As filed with the Securities and Exchange Commission on March 19, 1997
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
FIRST ROBINSON FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 6035
(State or other jurisdiction of (Primary Standard Industrial
incorporation or organization) Classification Code Number)
Applied For
(I.R.S. Employer Identification No.)
501 East Main Street, Robinson, Illinois 62454
(618) 544-8621
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
Rick L. Catt, President
First Robinson Financial Corporation
501 East Main Street
Robinson, Illinois 62454
(618) 544-8621
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Please send copies of all communications to:
Jeffrey M. Werthan, P.C.
Gary A. Lax, P.C.
SILVER, FREEDMAN & TAFF, L.L.P.
(a limited liability partnership including professional corporations)
1100 New York Avenue, NW
Washington, DC 20005-3934
(202) 414-6100
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 being offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. [X]
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Maximum Maximum
Title of Each Amount Offering Aggregate Amount of
Class of Securities to be Price Offering Registration
to be Registered Registered(1) Per Share(1) Price(1) Fee
- --------------------------------------------------------------------------------
Common Stock, par
value $.01 per share 859,625 shares $10.00 $8,596,250 $2,605(1)
(1) Estimated solely for the purpose of calculating the registration fee.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
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 PURSUANT TO REGULATION S-K, ITEM 501(B)
<TABLE>
<CAPTION>
<S> <C>
1. Forepart of the Registration Statement and Facing Page; this Cross Reference Sheet; Outside
Outside Front Cover Page of Prospectus Front Cover Page of Prospectus
2. Inside Front and Outside Back Cover Pages Inside Front and Outside Back Cover Pages of
of Prospectus Prospectus
3. Summary Information, Risk Factors and Prospectus Summary; Risk Factors
Ratio of Earnings to Fixed Charges
4. Use of Proceeds Use of Proceeds; Capitalization
5. Determination of Offering Price The Conversion
6. Dilution *
7. Selling Security Holders *
8. Plan of Distribution Outside Front Cover Page of Prospectus; Prospectus
Summary; The Conversion
9. Description of Securities to be Registered Description of Capital Stock
10. Interests of Named Experts and Counsel *
11. Information with Respect to the Registrant Prospectus Summary; First Robinson Savings and
Loan, F.A.; First Robinson Financial Corporation;
Capitalization; Market for Common Stock;
Management's Discussion and Analysis of Financial
Condition and Results of Operations; Business;
Regulation; Management; Restrictions on Acquisitions
of Stock and Related Takeover Defensive Provisions;
Description of Capital Stock; Index to Financial
Statements
12. Disclosure of Commission Position on *
Indemnification for Securities Act Liabilities
<FN>
- ----------------------
*Omitted because the item is inapplicable.
</FN>
</TABLE>
<PAGE>
Prospectus
FIRST ROBINSON FINANCIAL CORPORATION
(Holding Company for "First Robinson Savings and Loan, F.A."
to become "First Robinson Savings Bank, National Association")
747,500 Shares of Common Stock
(Anticipated Maximum)
$10.00 Per Share Purchase Price
First Robinson Financial Corporation (the "Holding Company"), a
Delaware corporation, is offering up to 747,500 shares of common stock, par
value $.01 per share (the "Common Stock"), in connection with the conversion of
First Robinson Savings and Loan, F.A. ("First Robinson" or the "Association")
from a mutual savings and loan association to a stock savings and loan
association and the issuance of all of the Association's outstanding stock to
the Holding Company (the "Stock Conversion") pursuant to the Plan
(continued on next page)
FOR INFORMATION ON HOW TO SUBSCRIBE, CALL THE STOCK INFORMATION
CENTER AT (618) 544-5800.
FOR A DISCUSSION OF CERTAIN FACTORS TO BE CONSIDERED,
SEE "RISK FACTORS" BEGINNING ON PAGE __.
THESE SHARES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, THE OFFICE OF THRIFT SUPERVISION, ANY STATE
SECURITIES COMMISSION OR ANY OTHER FEDERAL AGENCY, NOR HAS
SUCH COMMISSION, OFFICE, ANY STATE SECURITIES COMMISSION
OR OTHER AGENCY PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
THE SHARES OF COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR
SAVINGS DEPOSITS AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE
CORPORATION, THE SAVINGS ASSOCIATION INSURANCE FUND OR
ANY OTHER CORPORATION, FUND OR GOVERNMENT AGENCY.
<TABLE>
<CAPTION>
Estimated Underwriting Fees Estimated Net
Purchase Price and Other Expenses(1) Conversion Proceeds(2)
-------------- --------------------- ----------------------
<S> <C> <C> <C>
Per Share(3) $10.00 $.62 $9.38
Minimum Total $5,525,000 $385,000 $5,140,000
Midpoint Total $6,500,000 $400,000 $6,100,000
Maximum Total $7,475,000 $400,000 $7,075,000
Maximum Total, as Adjusted(4) $8,596,250 $400,000 $8,196,250
<FN>
- ---------------
(1) Consists of estimated costs to the Association and the Holding Company in
the Conversion, including commissions payable to Trident Securities, Inc.
("Trident Securities") estimated to be $73,661 and $88,910, respectively,
based on the minimum and the maximum of the Estimated Valuation Range, in
connection with the Subscription and Community Offering. Trident
Securities has no obligation to purchase the Common Stock. Such fees and
commissions to selected dealers, if any, may be deemed to be underwriting
fees. See "Pro Forma Data" and "The Conversion - Stock Price and Number of
Shares to be Issued" for information regarding such fees and expenses. The
Holding Company has agreed to indemnify Trident Securities against certain
liabilities, including liabilities arising under the Securities Act of
1933, as amended (the "Act"). Actual expenses and thus net proceeds, may
be more or less than estimated amounts.
(2) Net Conversion proceeds may vary from the estimated amounts, depending on
the number of shares issued and actual conversion expenses. The actual
number of shares of Common Stock to be issued in the Stock Conversion will
not be determined until the close of the Subscription and Community
Offering.
(3) Assumes the sale of the midpoint number of shares. If the minimum, maximum
or 15% above the maximum number of shares are sold, estimated expenses per
share would be $.70, $.54 or $.47, respectively, resulting in estimated
net Stock Conversion proceeds per share of $9.30, $9.46 or $9.53,
respectively.
(4) As adjusted to give effect to an increase in the number of shares which
could be sold in the Stock Conversion due to an increase in the Estimated
Valuation Range of up to 15% above the maximum number of shares which may
be offered in the Stock Conversion at the Purchase Price, without the
resolicitation of subscribers or any right of cancellation, to reflect
changes in market and financial conditions following commencement of the
Subscription and Community Offering.
</FN>
</TABLE>
TRIDENT SECURITIES, INC.
The date of this Prospectus is ___________, 1997
<PAGE>
(continued from prior page)
of Conversion (the "Plan") of the Association. As soon as possible following
completion of the Stock Conversion, the Association intends to convert from a
federal stock savings and loan association (the "Converted Association") to a
national bank (the "Bank Conversion") to be known as First Robinson Savings
Bank, National Association (the "National Bank"). The purpose of the Bank
Conversion is to provide the Association with additional operating flexibility
and to enhance its ability to provide a full range of banking products and
services to its community. However, the Board of Directors of the Association
may elect at any time not to proceed with the Bank Conversion. Further, there
can be no assurance that the Association will obtain regulatory approval to
consummate the Bank Conversion. See "Risk Factors -- Potential Delay in
Completion or Denial of Bank Conversion." It is presently the intent of the
Association's Board of Directors to proceed with both the Stock Conversion and
the Bank Conversion. The Stock Conversion and the Bank Conversion are referred
to herein collectively as the "Conversion."
Pursuant to the Association's Plan, non-transferable rights to
subscribe for the Common Stock ("Subscription Rights") have been given to (i)
First Robinson's depositors with an account balance of $50 or more as of October
31, 1995 ("Eligible Account Holders"), (ii) tax qualified employee plans of the
Association and the Holding Company ("Tax Qualified Employee Plans"); provided,
however, that the Tax Qualified Employee Plans shall have first priority
Subscription Rights to the extent that the total number of shares of Common
Stock sold in the Stock Conversion exceeds the maximum of the Estimated
Valuation Range as defined below, (iii) First Robinson's depositors as of March
31, 1997 ("Supplemental Eligible Account Holders"), (iv) members of the
Association at the close of business on ________, 1997, other than Eligible
Account Holders and Supplemental Eligible Account Holders, and certain borrowers
as of both March 20, 1990 and ________, 1997, who continue to be borrowers as of
the date of the special meeting ("Other Members"), and (v) employees, officers
and directors of the Association (the "Subscription Offering"). Concurrently,
and subject to the prior rights of holders of Subscription Rights, the Holding
Company is offering the Common Stock for sale in a community offering to members
of the general public (the "Community Offering" and, when referred to together
with the Subscription Offering, the "Subscription and Community Offering"). All
purchases will be subject to the maximum and minimum purchase limi tations and
other terms and conditions described in this Prospectus including the
Association's and the Holding Company's right, in their sole discretion, to
reject orders received in the Community Offering in whole or in part.
Subscription rights are non-transferrable. Persons found to be transferring
subscription rights will be subject to forfeiture of such rights and possible
further sanctions and penalties imposed by the Office of Thrift Supervision (the
"OTS"), an agency of the U.S. Government.
The total number of shares to be issued in the Stock Conversion and the
price per share will be based upon an appraised valuation of the estimated
aggregate pro forma market value of the Common Stock. The purchase price per
share ("Purchase Price") has been fixed at $10.00. Based on the current
aggregate valuation range of $5,525,000 to $7,475,000 (the "Estimated Valuation
Range"), the Holding Company is offering up to 747,500 shares, subject to
adjustment of up to 859,625 shares for a total of up to $8,596,250. With the
exception of the Tax Qualified Employee Plans, no person, may purchase more than
$65,000 of the Common Stock offered in the Stock Conversion. In the aggregate,
no person, together with associates of and persons acting in concert with such
person, may purchase more than $100,000 of Common Stock offered in the Stock
Conversion based on the Estimated Valuation Range (as calculated without giving
effect to any increase in such range subsequent to the date hereof). The minimum
purchase is 25 shares. The purchase limitations described herein are subject to
increase or decrease at the sole discretion of the Association and the Holding
Company. See "The Conversion - Offering of Holding Company Common Stock."
Orders submitted are irrevocable until the completion of the Stock
Conversion; provided that, if the Stock Conversion is not completed within 45
days after the close of the Subscription and Community Offering, unless such
period has been extended with the consent of the OTS, all subscribers will have
their funds returned promptly, with interest at the Association's current
passbook rate per annum on payments made by cash, check, bank draft or money
order. If an extension of time has been granted, all subscribers will be
notified of such extension and of their rights to modify or rescind their
subscriptions and to have their funds promptly returned with interest. Such
extensions may not go beyond ________, 1999, two years from the date of the
Special Meeting of Members. See "The Conversion - Method of Payment for
Subscriptions." All Subscription Rights are non-transferable and will expire at
_:__ p.m., Robinson, Illinois time, on ________, 1997 unless the Subscription
and Community Offering is extended by First Robinson and the Holding Company.
The Holding Company has received conditional approval to trade its
Common Stock on the Nasdaq "Small Cap" Market under the symbol "____." Prior to
this offering a public market for the Common Stock did not exist. Trident
Securities has indicated its intention to make a market in the Holding Company's
Common Stock following the Conversion, subject to compliance with applicable
laws and other regulatory requirements. There can be no assurance that an active
and liquid trading market for the Common Stock will develop. See "Market for
Common Stock."
2
<PAGE>
[INSERT MAP]
THE SHARES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS OR DEPOSITS AND ARE
NOT INSURED OR GUARANTEED BY THE SAVINGS ASSOCIATION INSURANCE FUND, THE BANK
INSURANCE FUND OR THE FEDERAL DEPOSIT INSURANCE CORPORATION.
3
<PAGE>
PROSPECTUS SUMMARY
The following summary does not purport to be complete. It is qualified
in its entirety by the detailed information and financial statements appearing
elsewhere in this Prospectus.
First Robinson Savings and Loan, F.A.
First Robinson was originally chartered in 1883. First Robinson serves
the financial needs of residents and businesses in its primary market area
through its retail banking offices located in Crawford County, Illinois. Its
deposits are insured up to the maximum allowable amount by the Federal Deposit
Insurance Corporation (the "FDIC"). At December 31, 1996, First Robinson had
total assets of $67.5 million, deposits of $59.6 million, and retained earnings
of $4.7 million. The Association met all of its regulatory capital requirements
at that date.
First Robinson has been, and intends to continue to be, a
community-oriented, locally owned, financial institution offering financial
services to residents and businesses of Crawford County, Illinois. The principal
business of the Association has historically consisted of attracting deposits
from the general public and investing those funds in primarily one- to
four-family residential real estate loans and, to a lesser extent, consumer
loans, commercial business and commercial real estate loans and multi-family and
construction loans. The Association also invests in securities issued by the
U.S. government and other liquid assets. The Association's business strategy is
designed to maintain the Association's tangible capital in excess of regulatory
requirements and limit, to the extent practicable, interest rate vulnerability.
See generally, "Business of the Association."
The information set forth above should be considered in light of the
factors described under the caption "Risk Factors." For additional information
regarding the implementation of the Association's business strategy, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Asset/Liability Management."
The executive office of the Association is located at 501 East Main
Street, Robinson, Illinois 62454. Its telephone number at that address is (618)
544-8621.
First Robinson Financial Corporation
The Holding Company was incorporated under the laws of the State of
Delaware in March 1997, at the direction of the Board of Directors of the
Association for the purpose of serving as a holding company of the Converted
Association upon its conversion from mutual to stock form, and of the National
Bank following the Bank Conversion. Prior to the Conversion, the Holding Company
has not engaged and will not engage in any material operations. Upon
consummation of the Stock Conversion, the Holding Company will have no
significant assets other than the outstanding capital stock of the Converted
Association (or, following the Bank Conversion, the National Bank),
approximately 50% of the net proceeds from the Stock Conversion (less the amount
to fund the Employee Stock Ownership Plan ("ESOP")) and a note evidencing its
loan to the Association's ESOP. Upon consummation of the Bank Conversion, the
Holding Company's principal business will be overseeing and directing the
business of the National Bank and investing the net Stock Conversion proceeds
retained by it. In connection with the Bank Conversion, the Holding Company will
register with the Board of Governors of
4
<PAGE>
the Federal Reserve System (the "FRB") as a bank holding company under the Bank
Holding Company Act of 1956, as amended (the "BHCA").
First Robinson Savings Bank, National Association
Upon consummation of the Bank Conversion, the National Bank will
succeed to all of the assets and liabilities of the Converted Association
(which, pursuant to the Stock Conversion will have succeeded to all of the
assets and liabilities of the Association), and initially will continue to
conduct business in substantially the same manner as the Association prior to
the Conversion. Diversification of the National Bank's loan portfolio may also
alter the risk profile of the National Bank. See "Risk Factors - Effect of the
Conversion to a National Bank Charter on Operations."
The deposits of the National Bank will continue to be insured by the
SAIF of the FDIC, and, as such, the National Bank will continue to be subject to
regulation and supervision by the FDIC. The National Bank will not be subject to
OTS regulation and supervision; rather, the primary regulator of the National
Bank will be the Office of the Comptroller of the Currency (the "OCC"). The
National Bank will remain a member of the FHLB of Chicago. As a national bank,
the National Bank will also be required to become a member of the FRB.
The Conversion
The Subscription and Community Offering is being made in connection
with the Conversion of First Robinson from a federally chartered mutual savings
and loan association to a federally chartered stock savings and loan association
and the formation of First Robinson Financial Corporation as the holding company
of the Association. Net Conversion proceeds will increase the capital of the
Association and, consistent with regulatory restrictions, will support financial
services to the customers and members of the community which it serves. See "Use
of Proceeds." Upon consummation of the Stock Conversion, it is anticipated that
the Converted Association will convert to a national bank. The Bank Conversion
will be consummated as soon as possible thereafter; provided, however, that
under the Plan, the Association's Board of Directors has the ability to elect,
at any time, not to proceed with the Bank Conversion. Furthermore, there can be
no assurance that the Association will obtain regulatory approval to consummate
the Bank Conversion. It is presently the intent of the Association's Board of
Directors to proceed with both the Stock Conversion and the Bank Conversion. See
"Risk Factors - Potential Delay in Completion or Denial of Bank Conversion" and
"The Conversion General."
The Conversion is subject to certain conditions, including the prior
approval of the Plan by the Association's members at a special meeting to be
held on ________, 1997 (the "Special Meeting"). Approval of the Plan requires
the affirmative vote of members of the Association holding not less than a
majority of the total number of votes eligible to be cast at the Special
Meeting. After the Stock Conversion, depositors and borrowers of the Association
will have no voting rights in the Holding Company, unless they become
stockholders. Eligible Account Holders and Supplemental Eligible Account
Holders, however, will have certain liquidation rights in the Association. See
"The Conversion - Effects of Conversion to Stock Form on Depositors and
Borrowers of the Association - Liquidation Rights."
5
<PAGE>
Subscription and Community Offering. The Holding Company is offering
747,500 shares of Common Stock, at a price of $10.00 per share, in the
Subscription Offering. The shares of Common Stock to be issued in the Stock
Conversion are being offered in the following order of priority: (1) Eligible
Account Holders, (2) Tax Qualified Employee Plans; provided, however, that the
Tax Qualified Employee Plans shall have first priority Subscription Rights to
the extent that the total number of shares of Common Stock sold in the Stock
Conversion exceeds the maximum of the Estimated Valuation Range, (3)
Supplemental Eligible Account Holders, (4) Other Members, and (5) officers,
directors and employees of the Association. The Holding Company may offer any
shares of Common Stock not subscribed for in the Subscription Offering at the
same price in the Community Offering to certain members of the general public.
The Holding Company has engaged Trident Securities as selling agent and to
advise and consult with respect to the distribution of shares of Common Stock.
The Plan places limitations on the number of shares which may be
purchased in the Stock Conversion by various categories of persons. With the
exception of the Tax Qualified Employee Plans, no Eligible Account Holder,
Supplemental Eligible Account Holder, Other Member or director, officer or
employee may purchase in the Stock Conversion more than $65,000 of the Common
Stock, subject to adjustments in certain circumstances; and no person together
with his associates or group of persons acting in concert (other than the Tax
Qualified Employee Plans) may purchase more than $100,000 of the Common Stock
offered in the Stock Conversion (as calculated without giving effect to any
increase in the Estimated Valuation Range subsequent to the date hereof). Under
certain circumstances, the maximum purchase limitation may be increased or
decreased, consistent with OTS regulations, in the sole discretion of the
Association and the Holding Company and without a resolicitation of subscribers.
Further, to the extent that shares are available, each subscriber must subscribe
for a minimum of 25 shares. See "The Conversion - Offering of Holding Company
Common Stock."
All Subscription Rights for Common Stock are non-transferable and will
expire at _:__ p.m. Robinson, Illinois time on ________, 1997, unless the
Subscription and Community Offering is extended by First Robinson and the
Holding Company. The accompanying order form and certification, together with
full payment for all shares of Common Stock for which subscription is made, or
appropriate instructions authorizing withdrawal of such amount from one or more
deposit accounts at First Robinson, must be received by the Holding Company
prior to that time or any extension thereof. Under applicable federal
regulations, all shares of Common Stock must be sold in the Stock Conversion
within 45 days after the completion of the Subscription and Community Offering,
unless extended with OTS approval. If the Stock Conversion is not approved by
the members at the Special Meeting, no shares will be issued, the Stock
Conversion will not take place, all subscription funds received will be returned
promptly with interest at the Association's passbook rate, currently 3.0% per
annum, and all withdrawal authorizations will be terminated. If the aggregate
Purchase Price of the Common Stock actually sold in the Conversion is below
$5,525,000 or above $8,596,250 (15% above the maximum of the Estimated Valuation
Range), or if the Subscription and Community Offering is extended beyond
_______, 1997, subscribers will be permitted to modify or cancel their
subscriptions and to have their subscription funds returned promptly with
interest. In the event of such an extension, each subscriber will be notified in
writing of the time period within which the subscriber must notify the
Association of his intention to maintain, modify or rescind his subscription. In
the event the subscriber does not respond in any manner to the Association's
notice, the funds submitted will be refunded to the subscriber with interest at
3.0% per annum,
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<PAGE>
the Association's current passbook rate, and/or the subscriber's withdrawal
authorizations will be terminated. See "The Conversion - Offering of Holding
Company Common Stock."
Stock Pricing. The Purchase Price of the Common Stock in the
Subscription and Community Offering is a uniform price for all subscribers,
including members of the Board of Directors and management. The aggregate
Purchase Price is based upon an independent appraisal, which was reviewed by the
Board of Directors, of the aggregate pro forma market value of the Holding
Company and the Association as converted. The aggregate pro forma market value
was estimated by Ferguson & Company (the "Appraiser"), an experienced conversion
appraisal firm independent of the Association, to range from $5,525,000 to
$7,475,000 at March 4, 1997. Depending upon the final updated valuation, the
number of shares to be issued is subject to a maximum of 859,625 shares (15%
above the 747,500 maximum of the Estimated Valuation Range) and a minimum of
552,500 shares, based on a Purchase Price of $10.00. The Purchase Price of
$10.00 was determined by discussion between the Holding Company and the
Association and the Appraiser, 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 Stock Conversion. The appraisal
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 purchasing
shares of Common Stock. The appraisal considers First Robinson only as a going
concern and should not be considered as any indication of the liquidation value
of First Robinson. Moreover, the appraisal is necessarily based on many factors
which change from time to time. There can be no assurance that persons who
purchase shares in the Stock Conversion will be able to sell such shares at
prices at or above the purchase price. See "The Conversion - Stock Pricing and
Number of Shares to be Issued" for a description of the manner in which the
Stock Conversion valuation was made and the limitations on its use.
Non-transferability of Subscription Rights. Prior to the completion of
the Stock Conversion, federal regulations prohibit any person from transferring
or entering into any agreement or understanding to transfer the legal or
beneficial ownership of the Subscription Rights issued under the Plan or the
shares of Common Stock to be issued upon their exercise. Persons violating such
prohibition may lose their right to purchase stock in the Stock Conversion and
may be subject to sanctions by the OTS. Each person exercising Subscription
Rights will be required to certify that a purchase of Common Stock is solely for
the purchaser's own account and that there is no agreement or understanding
regarding the sale or transfer of such shares. See "The Stock Conversion -
Restrictions on Transferability."
Purchases by Directors and Executive Officers
The directors and executive officers of First Robinson intend to
purchase for investment purposes and at the same price as shares sold to other
investors in the Stock Conversion, approximately $735,000 of Common Stock (or
73,500 shares, or approximately 13.3%, 11.3%, 9.8% or 8.6%, respectively, of the
shares to be issued in the Stock Conversion at the minimum, midpoint, maximum
and 15% above the Estimated Valuation Range, respectively). There is no formal
agreement among the officers and directors and their affiliates regarding their
purchases of Common Stock. In addition, 8% of the shares issued in the Stock
Conversion are expected to be purchased by the Association's ESOP. See
"Management - Benefit Plans" and "The Stock Conversion - Participation by
Management."
7
<PAGE>
Use of Proceeds
The net proceeds from the sale of Common Stock in the Stock Conversion
are estimated to be $5.1 million, $6.1 million, $7.1 million and $8.2 million,
respectively, based on the minimum, midpoint, maximum and 15% above the maximum,
of the Estimated Valuation Range. See "Pro Forma Data." The Holding Company will
purchase all of the common stock of the Association to be issued upon Conversion
in exchange for 50% of the net proceeds from the issuance of the Common Stock
and will retain the remaining 50% of such net proceeds as its initial
capitalization (less funds loaned to the ESOP sufficient to purchase up to 8% of
shares sold in the Stock Conversion). Subject to regulatory approval, the
Holding Company intends to lend a portion of the net proceeds to the ESOP to
facilitate its purchase of up to 8% of the Common Stock sold in the Stock
Conversion. The Association intends to make contributions to the ESOP in an
amount to be determined by the Board of Directors, but not less than the amount
needed to pay any currently maturing obligations under the loan made to the
ESOP, subject to the Association's continuing compliance with its capital
requirements. These contributions would be allocated among all eligible
participants in proportion to their compensation. See "Management - Benefit
Plans - Employee Stock Ownership Plan." The remaining net proceeds retained by
the Holding Company will be invested primarily in short-term U.S. Government
agency securities and other assets. Subject to compliance with federal
regulations, such funds may also be used to repurchase the Common Stock or for
any other lawful purpose. The net proceeds retained by the Association will
become part of the Association's general funds and will be used to support its
lending and investment activities.
Dividends
The Holding Company currently intends to pay an annual cash dividend on
the Common Stock at a rate of approximately 3.0% of the Purchase Price of the
Common Stock. Dividends, when and if paid, will be subject to determination and
declaration by the Board of Directors in its discretion, which will take into
account the Holding Company's consolidated financial condition and results of
operations, tax considerations, industry standards, economic conditions,
regulatory restrictions, general business practices and other factors. See
"Dividends," "Regulation - Regulatory Capital Requirements" and "- Limitations
on Dividends and Other Capital Distributions."
Market For Common Stock
The Holding Company has never issued capital stock to the public and,
consequently, there is no existing market for the Common Stock. Although the
Holding Company has received conditional approval to trade its 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 of two market makers in the Common Stock. In the event
the listing requirements are not met, the Holding Company's Common Stock may not
be traded on the Nasdaq SmallCap Market. Trident Securities has indicated its
intention to make a market in the Common Stock, and the Association anticipates
that it will be able to secure at least one additional market maker for the
Common Stock. However, there can be no assurance that an active or liquid
trading market will develop, or that if a market develops, it will continue. A
public market having the desirable characteristics of depth, liquidity and
orderliness depends upon the presence in the marketplace of both willing buyers
and sellers of the Common Stock at any given time, which is not within the
control of the Holding Company
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<PAGE>
or any market maker. Accordingly, there can be no assurance that purchasers will
be able to sell their shares at or above the Purchase Price. See "Market for
Common Stock."
Benefits of Stock Conversion to Directors and Executive Officers
Employee Stock Ownership Plan. The Board of Directors of the
Association has adopted an ESOP, a tax-qualified employee benefit plan for
officers and employees of the Holding Company and the Association. The ESOP
intends to buy up to 8% of the Common Stock issued in the Stock Conversion
(approximately 442,000 to 687,700 of the Common Stock based on the issuance of
the minimum (552,500 shares) and 15% above the maximum (859,625 shares) of the
Estimated Valuation range and the $10.00 per share Purchase Price). The ESOP
will purchase the shares with funds borrowed from the Holding Company, and it is
anticipated that the ESOP will repay the loans through periodic tax-deductible
contributions from the Association over an estimated ten-year period. These
contributions will increase the compensation expense of the Association. The
Association's contributions to the ESOP will be allocated among participants on
the basis of their compensation. See "Management - Benefit Plans - Employee
Stock Ownership Plan" for a description of this plan.
Other Stock Benefit Plans. In addition to the ESOP, in the future the
Holding Company may consider the implementation of a stock option plan and
recognition and retention plan ("RRP") for the benefit of selected directors,
officers and employees of the Holding Company and the Association. Any such
stock option plan or RRP will be implemented no earlier than one year after the
date of the consummation of the Stock Conversion. If a determination is made to
implement a stock option plan or RRP, it is anticipated that any such plans will
be submitted to stockholders for their consideration at which time stockholders
would be provided with detailed information regarding such plan. If such plans
are approved, they may have a dilutive effect on the Holding Company's
stockholders as well as effect the Holding Company's net income and
stockholders' equity; although the actual effects cannot be determined until
such plans are implemented.
9
<PAGE>
Risk Factors
See "Risk Factors" for information regarding interest rate risk
exposure, effect of the conversion to a national bank charter on operations,
potential delay in completion or denial of Bank Conversion, risks related to
commercial business lending, geographical concentration of loans, ESOP
compensation expense, regulatory oversight, absence of active market for common
stock, takeover defensive provisions, voting control of shares by the Board,
Management, Employees and Employee Plans, difficulty in fully leveraging capital
and risk of delayed offering, which should be considered by prospective
investors prior to investing in the Common Stock.
10
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following table sets forth selected consolidated financial data of
the Association at and for the periods indicated. Financial data as of December
31, 1996, and for the two months ended December 31, 1996 and 1995, are
unaudited. In the opinion of management, all adjustments (consisting only of
normal recurring accruals) necessary for a fair presentation have been included.
The results of operations and other data for the two months ended December 31,
1996 are not necessarily indicative of the results of operations for the fiscal
year ending October 31, 1997. The consolidated financial data is derived in part
from, and should be read in conjunction with, the Financial Statements and Notes
thereto presented elsewhere in this Prospectus.
<TABLE>
<CAPTION>
At October 31,
December 31, ---------------------------------------------------------
1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ----
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Selected Financial Condition Data:
Total assets............................................. $67,538 $63,869 $54,708 $43,824 $41,299 $43,944
Loans receivable, net.................................... 57,003 54,448 44,854 34,093 30,885 30,064
Mortgage-backed securities............................... 3,917 4,011 2,973 3,284 3,792 4,705
Interest bearing deposits................................ 2,048 868 2,472 2,602 2,575 3,917
Investment securities.................................... 671 714 1,213 1,221 1,448 2,502
Deposits................................................. 59,642 56,691 49,404 39,208 36,976 39,922
Total borrowings......................................... 2,500 1,500 --- --- --- ---
Retained earnings - substantially restricted............. 4,746 4,658 4,536 4,111 3,747 3,301
</TABLE>
<TABLE>
<CAPTION>
Two Months Ended
December 31, Year Ended October 31,
--------------------- ------------------------------------------------------
1996 1995 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Selected Operations Data:
Total interest income......................... $ 906 $ 737 $4,827 $ 3,755 $ 2,985 $ 3,160 $ 3,620
Total interest expense........................ (495) (410) (2,655) (1,971) (1,446) (1,563) (2,121)
------ ------- ------- ------- -------- ------- --------
Net interest income........................ 411 327 2,172 1,784 1,539 1,597 1,499
Provision for loan losses..................... (8) (4) (270) (9) (24) (33) (40)
------- ------- ------- -------- -------- -------- --------
Net interest income after provision for
loan losses.................................. 403 323 1,902 1,775 1,515 1,564 1,459
Fees and service charges...................... 19 20 295 241 223 188 165
Gain (loss) on sales of loans, securities
and fixed assets............................. 29 21 60 1 --- 2 ---
Other non-interest income..................... 8 5 37 29 21 39 18
-------- -------- -------- -------- -------- -------- --------
Total non-interest income..................... 56 46 392 271 244 229 183
-------- ------- ------- ------- -------- -------- --------
Total non-interest expense.................... (338) (290) (2,120) (1,414) (1,176) (1,175) (1,175)
------ ------- ------- ------- ------- -------- --------
Income (loss) before taxes and
extraordinary item........................... 121 79 174 632 583 618 467
Income tax provision.......................... (47) (31) (51) (233) (221) (219) (160)
Extraordinary item............................ --- --- --- --- --- 48 ---
-------- -------- --------- --------- -------- -------- ---------
Net income.................................... $ 74 $ 48 $ 123 $ 399 $ 362 $ 447 $ 307
======= ======= ======= ======= ======= ======= ========
</TABLE>
11
<PAGE>
<TABLE>
<CAPTION>
Two Months
Ended
December 31, Year Ended October 31,
----------------- ----------------------------------------------
1996 1995 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Selected Financial Ratios and Other Data:
Performance Ratios:
Return on assets (ratio of net income to average
total assets)(1)......................................... .68% .53% .21% .82% .86% .97% .72%
Return on retained earnings (ratio of net
income to average equity)(1)............................. 9.36 6.37 2.60 9.68 9.08 11.24 9.76
Interest rate spread information:
Average during period.................................... 3.59 3.39 3.49 3.52 3.60 3.79 3.58
End of period............................................ 3.66 3.62 3.76 3.51 3.29 3.70 3.45
Net interest margin(2).................................... 3.96 3.78 3.86 3.90 3.88 4.09 3.73
Ratio of operating expense to average total assets........ 3.09 3.17 3.54 2.91 2.80 2.84 2.75
Ratio of average interest-earning assets to average
interest-bearing liabilities............................ 107.81 108.40 108.01 108.83 107.78 107.84 103.20
Quality Ratios:
Non-performing assets to total assets at end of period..... .48 .34 .61 .07 .07 .33 .37
Allowance for loan losses to non-performing loans.......... 958.14 153.70 430.21 2,125.00 2,215.00 3,670.00 1,640.91
Allowance for loan losses to loans receivable, net......... .72 .54 .76 .57 .84 1.19 1.20
Capital Ratios:
Retained earnings to total assets at end of period......... 7.03 8.37 7.29 8.29 9.38 9.07 8.91
Average retained earnings to average assets................ 7.23 8.24 7.91 8.49 9.45 8.59 7.36
Other Data:
Number of full-service offices............................. 3 3 3 3 1 1 1
Number of full-time employees.............................. 34 31 34 30 20 21 24
Number of deposit accounts................................. 7,692 6,134 7,279 5,885 5,284 5,006 5,169
Number of loan accounts.................................... 3,694 3,030 3,625 2,897 2,375 2,234 2,179
<FN>
- -----------------
(1) Ratios for the two month periods have been annualized.
(2) Net interest income divided by average interest-earning assets.
</FN>
</TABLE>
12
<PAGE>
RISK FACTORS
The following factors, in addition to those discussed elsewhere in this
Prospectus, should be considered by investors before deciding whether to
purchase the Common Stock offered in the Subscription and Community Offering.
Low Return of Equity; Difficulty in Fully Leveraging Capital
As a result of the existing capital level and the additional capital
that will be raised in the Stock Conversion, the Association's ability to
leverage quickly the net proceeds from the Stock Conversion is likely to be
limited. In addition, the expenses associated with the ESOP along with other
expenses associated with being a public company are expected to contribute to
reduced returns on equity (net income for a given period divided by the average
equity during that period) for the near term. Consequently, investors should not
expect a return on equity which will meet or exceed the average return on equity
for publicly traded financial services institutions for the foreseeable future.
Interest Rate Risk Exposure
The Association's profitability, like that of most financial
institutions, is dependent to a large extent upon its net interest income, which
is the difference between its interest income on interest-earning assets, such
as loans and investments, and its interest expense on interest-bearing
liabilities, such as deposits and borrowings. Changes in the level of interest
rates also affect the amount of loans originated by the Association and, thus,
the amount of loan and commitment fees, as well as the market value of the
Association's interest-earning assets. Moreover, changes in interest rates also
can result in disintermediation, which is the flow of funds away from savings
institutions into direct investments, such as corporate securities and other
investment vehicles, which because of the absence of federal insurance premiums
and reserve requirements, may yield higher rates of return than savings
institutions.
In addition, changes in interest rates also can affect the market value
of the Association's interest-earning assets, which are comprised of fixed and
adjustable-rate instruments with various terms to maturity. At December 31,
1996, the Association's investment securities and equity securities totalled
$691,000 and its investment in mortgage-backed securities had a carrying value
of approximately $3.9 million of which $345,000 is being held to maturity and
thus is not available to be sold in response to changes in interest rates. See
"Business - Investment Activities."
Potential Delay in Completion or Denial of Bank Conversion
The Plan permits the Board of Directors of the Association to elect, at
any time, not to proceed with the Bank Conversion. While the Office of the
Comptroller of the Currency (the "OCC") has conditionally approved the
Association's application to convert to a national bank, the FRB must approve
the Holding Company's application to become a bank holding company. If this
election is made by the Board of Directors or the FRB denies the Holding
Company's application, the Association will only proceed with the Stock
Conversion. It is currently the
13
<PAGE>
intent of the Association's Board of Directors to proceed with both the Stock
Conversion and the Bank Conversion. See "The Conversion -- General."
Risks Related To Commercial Business and Consumer Lending
As a federal savings association, the Association has traditionally
emphasized the origination of loans secured by one- to four-family residences.
However, the Association has increasingly been operating in a manner that is
more representative of a commercial bank than a savings association in that it
has increasingly originated commercial and consumer loans. At December 31, 1996,
commercial business loans amounted to $6.8 million, or 11.9% of the
Association's total loan portfolio and consumer loans amounted to $12.0 million
or 20.1% of the Association's total loan portfolio. While commercial business
loans and consumer are generally more interest rate sensitive or have shorter
terms and carry higher yields than do residential mortgage loans, they also
typically carry a higher degree of credit risk than residential mortgage loans.
Geographical Concentration of Loans
At December 31, 1996, substantially all of the Association's real
estate mortgage loans were secured by properties located in the Association's
primary market area of Crawford County, Illinois. While the Association
currently believes that its loans are adequately secured or reserved for, in the
event that real estate prices in the Association's market area substantially
weaken or economic conditions in its primary market area deteriorate, reducing
the value of properties securing the Association's loans, some borrowers may
default and the value of the real estate collateral may be insufficient to fully
secure the loan. In either event, the Association may experience increased
levels of delinquencies and related losses having an adverse impact on net
income.
ESOP Compensation Expense
In November, 1993, the American Institute of Certified Public
Accountants ("AICPA") issued Statement of Position 93-6 "Employers' Accounting
for Employee Stock Ownership Plans" ("SOP 93-6"). SOP 93-6 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.
Assuming shares of Common Stock appreciate in value over time, the adoption of
SOP 93-6 will increase compensation expense relating to the ESOP to be
established in connection with the Stock Conversion as compared with prior
guidance which required the recognition of compensation expense based on the
cost of shares acquired by the ESOP. It is impossible to determine at this time
the extent of such impact on future net income. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations Impact of New
Accounting Standards."
14
<PAGE>
Regulatory Oversight
The Association 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 Association is a member of the FHLB of Chicago and is subject to certain
limited regulation by the FRB. Such regulation and supervision governs the
activities in which an institution can engage and is intended primarily for the
protection of the FDIC insurance fund and depositors. Following the Bank
Conversion, the National Bank will be subject to extensive regulation and
supervision by the OCC and the FDIC, and the Holding Company will be subject to
extensive regulation and supervision of the FRB. Regulatory authorities have
been granted extensive discretion in connection with their supervisory and
enforcement activities. See "Regulation." The Congress is also reviewing
proposals to require all federal savings associations to convert to either a
national bank or state chartered depository institution no later than June 30,
1998. No assurance can be given as to whether or in what form such legislation
may be enacted.
Absence of Active Market for Common Stock
The Holding Company has never issued capital stock to the public and,
consequently, there is no existing market for the Common Stock. Although the
Holding Company has received conditional approval to trade its 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 300 stockholders and a
minimum of two market makers in the Common Stock. In the event the listing
requirements are not met, the Holding Company's Common Stock may not be traded
on the Nasdaq SmallCap Market. Trident Securities has indicated its intention to
make a market in the Common Stock, and the Holding Company anticipates that it
will be able to secure at least one additional market maker for the Common
Stock. However, there can be no assurance that an active or liquid trading
market will develop, or that if a market develops, it will continue. A public
market having the desirable characteristics of depth, liquidity and orderliness
depends upon the presence in the marketplace of both willing buyers and sellers
of the Common Stock at any given time, which is not within the control of the
Holding Company or any market maker. Accordingly, there can be no assurance that
purchasers will be able to sell their shares at or above the Purchase Price. See
"Market for Common Stock."
Takeover Defensive Provisions
Holding Company and Association Governing Instruments. Certain
provisions of the Holding Company's Certificate of Incorporation and Bylaws
assist the Holding Company in maintaining its status as an independent publicly
owned corporation. These provisions provide for, among other things, limiting
voting rights of beneficial owners of more than 10% of the Common Stock,
staggered terms for directors, noncumulative voting for directors, limits on the
calling of special meetings, a fair price/supermajority vote requirement for
certain business combinations and certain notice requirements. The 10% vote
limitation would not affect the ability of an individual who is not the
beneficial owner of more than 10% of the Common Stock to solicit revocable
proxies in a public solicitation for proxies for a particular meeting of
stockholders and to vote such proxies. In addition, provisions in the
Association's federal stock
15
<PAGE>
Charter that have an anti-takeover effect could also be applicable to changes in
control of the Holding Company as the sole shareholder of the Association. The
Association's Charter includes a provision applicable for five years which
prohibits acquisitions and offers to acquire, directly or indirectly, the
beneficial ownership of more than 10% of the Association's securities. Any
person violating this restriction may not vote the Association's securities in
excess of 10%. Any or all of these provisions may discourage potential proxy
contests and other takeover attempts, particularly those which have not been
negotiated with the Board of Directors. In addition, the Holding Company's
Certificate of Incorporation also authorizes preferred stock with terms to be
established by the Board of Directors which may rank prior to the Common Stock
as to dividend rights, liquidation preferences, or both, may have full or
limited voting rights and may have a dilutive effect on the ownership interests
of holders of the Common Stock. See "Restrictions on Acquisitions of Stock and
Related Takeover Defensive Provisions."
Bank Governing Instrument. Certain provisions of the National Bank's
Charter that have an anti-takeover effect could also be applicable to changes in
control of the Holding Company as the National Bank's sole shareholder. The
National Bank's Charter includes a provision which prohibits acquisitions and
offers to acquire, directly or indirectly, the beneficial ownership of more than
10% of the National Bank's securities. Any person violating this restriction may
not vote the National Bank's securities in excess of 10%. This provision may
discourage potential proxy contests and other takeover attempts, particularly
those which have not been negotiated with the Board of Directors. See
"Restrictions on Acquisition of Stock and Related Takeover Defensive
Provisions."
Regulatory and Statutory Provisions. Federal regulations prohibit, for
a period of three years following the completion of the Stock Conversion, the
beneficial ownership of more than 10% of the stock of the Converted Association
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. See "Restrictions on Acquisitions of Stock and Related Takeover
Defensive Provisions." Following the Bank Conversion, the Change in Bank Control
Act (the "CIBC"), the BHCA and the FRB regulations promulgated under those acts,
require that the consent of the FRB be obtained prior to any person or company
acquiring "control" of a bank holding company. Control is conclusively presumed
to exist if an individual or company acquires more than 25% of any class of
voting stock of a bank holding company. Control is rebuttably presumed to exist
if the person acquires 10% or more of any class of voting stock of a bank
holding company if either (i) the bank holding company has registered securities
under Section 12 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") or (ii) no other person will own a greater percentage of that
class of voting securities immediately after the transaction. The regulations
provide a procedure to rebut the rebuttable control presumption. Since the
Holding Company's Common Stock will be registered under Section 12 of the
Exchange Act, any acquisition of 10% or more of the Holding Company's Common
Stock will give rise to a rebuttable presumption that the acquiror of such stock
controls the Holding Company, requiring the acquiror, prior to acquiring such
stock, to rebut the presumption of control to the satisfaction of the FRB or
obtain FRB approval for the acquisition of control.
16
<PAGE>
Voting Control of Shares by the Board, Management, Employees and Employee Plans
The proposed purchases by the Board of Directors, management and
employees in the Subscription and Community Offerings could render it more
difficult to obtain majority support for stockholder proposals opposed by the
Board and management. Assuming the sale of shares at the minimum, midpoint and
maximum of the Estimated Valuation Range, the proposed purchases of $735,000 of
shares of the Common Stock by the Board and the executive officers would
represent 13.3%, 11.3% and 9.8%, respectively, of the number of shares to be
outstanding upon completion of the Stock Conversion. In addition, the ESOP
intends to purchase 8% of the shares of Common Stock sold in the Subscription
and Community Offerings. (Prior to allocation, shares held by the ESOP will be
voted by the independent trustee in its sole discretion.) See "Management -
Benefit Plans," "Description of Capital Stock" and "Restrictions on Acquisition
of Stock and Related Takeover Defensive Provisions."
Risk of Delayed Offering
The Subscription and Community Offering will expire at _:__ _.m.,
Robinson, Illinois time on ________, 1997 unless extended by the Holding Company
and the Association. However, unless waived by the Holding Company and the
Association, all orders will be irrevocable unless the Stock Conversion is not
completed by _______, 1997. In the event the Stock Conversion is not completed
by _______, 1997, subscribers will have the right to modify or rescind their
subscriptions and to have their subscription funds returned with interest.
USE OF PROCEEDS
The net proceeds from the sale of Common Stock in the Stock Conversion
are estimated to be $5.1 million, $6.1 million, $7.1 million and $8.2 million,
respectively, based on the minimum, midpoint, maximum and 15% above the maximum,
of the Estimated Valuation Range. See "Pro Forma Data." The Holding Company will
purchase all of the common stock of the Association to be issued upon Conversion
in exchange for 50% of the net proceeds from the issuance of the Common Stock
and will retain the remaining 50% of such net proceeds as its initial
capitalization (less funds loaned to the ESOP sufficient to purchase up to 8% of
shares sold in the Stock Conversion). Subject to regulatory approval, the
Holding Company intends to lend a portion of the net proceeds to the ESOP to
facilitate its purchase of up to 8% of the Common Stock sold in the Stock
Conversion. The Association intends to make contributions to the ESOP in an
amount to be determined by the Board of Directors, but not less than the amount
needed to pay any currently maturing obligations under the loan made to the
ESOP, subject to the Association's continuing compliance with its capital
requirements. These contributions would be allocated among all eligible
participants in proportion to their compensation. It is expected the ESOP will
purchase up to 8% of the total number of shares sold in the Stock Conversion.
See "Management - Benefit Plans - Employee Stock Ownership Plan." The remaining
net proceeds retained by the Holding Company will be invested primarily in
short-term U.S. Government agency securities and other assets. Subject to
compliance with federal regulations, such funds may also be used to pay regular
and special dividends and to repurchase the Common Stock. However, since the
Holding Company has not yet issued stock, there is currently
17
<PAGE>
insufficient information upon which an intention to repurchase stock could be
based. The net proceeds retained by the Association will become part of the
Association's general funds and will be used to support its lending and
investment activities.
In the future the Holding Company may consider the adoption of a
restricted stock plan (i.e., the RRP), at the earliest, one-year following the
Stock Conversion and subject to stockholder ratification. If such a plan is
implemented, the Holding Company may use a portion of the net proceeds to fund
the purchase by the plan of the Holding Company's Common Stock.
DIVIDENDS
The Holding Company intends to pay an annual cash dividend on the
Common Stock at a rate of approximately 3.0% of the Purchase Price of the Common
Stock. Dividends, when and if paid, will be subject to determination and
declaration by the Board of Directors in its discretion, which will take into
account the Holding Company's consolidated financial condition and results of
operations, tax considerations, industry standards, economic conditions,
regulatory restrictions, general business practices and other factors. See
"Dividends," "Regulation Regulatory Capital Requirements" and "- Limitations on
Dividends and Other Capital Distributions."
MARKET FOR COMMON STOCK
The Holding Company has never issued capital stock to the public and,
consequently, there is no existing market for the Common Stock. Although the
Holding Company has received conditional approval to trade its 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 of two market makers in the Common Stock. In the event
the listing requirements are not met, the Holding Company's Common Stock may not
be traded on the Nasdaq SmallCap Market. Trident Securities has indicated its
intention to make a market in the Common Stock, and the Association anticipates
that it will be able to secure at least one additional market maker for the
Common Stock. However, there can be no assurance that an active or liquid
trading market will develop, or that if a market develops, it will continue. A
public market having the desirable characteristics of depth, liquidity and
orderliness depends upon the presence in the marketplace of both willing buyers
and sellers of the Common Stock at any given time, which is not within the
control of the Holding Company or any market maker. Accordingly, there can be no
assurance that purchasers will be able to sell their shares at or above the
Purchase Price. See "Market for Common Stock."
18
<PAGE>
FIRST ROBINSON SAVINGS AND LOAN, F.A.
First Robinson is a federally chartered mutual savings and loan
association headquartered in Robinson, Illinois. Its deposits are insured up to
the maximum allowable amount by the SAIF of the FDIC. First Robinson serves
primarily Crawford County, Illinois. At December 31, 1996, First Robinson had
total assets of $67.5 million, deposits of $59.6 million and equity capital of
$4.7 million.
First Robinson has been, and intends to continue to be, a
locally-owned, community-oriented financial institution offering selected
financial services to meet the needs of the communities it serves. The
Association attracts deposits from the general public and uses such deposits,
together with other funds, to originate primarily one- to four-family
residential mortgage loans and, to a lesser extent, consumer loans, commercial
business loans and commercial real estate loans, and multi-family and
construction loans. See "Business - Lending Activities."
FIRST ROBINSON FINANCIAL CORPORATION
First Robinson Financial Corporation was incorporated under the laws of
the State of Delaware in March 1997 at the direction of the Board of Directors
of the Association for the purpose of serving as a savings and loan holding
company of the Converted Association upon the acquisition of all of the capital
stock issued by the Converted Association in the Stock Conversion, and then as a
bank holding company of the National Bank following the Bank Conversion. The
Holding Company has received approval from the OTS to acquire control of the
Converted Association, subject to satisfaction of certain conditions. The
Holding Company has applied to the FRB for approval to retain control of the
National Bank following the Bank Conversion. Such approval has not been obtained
as of the date of this Prospectus, and there can be no assurance that such
approval will be obtained. See "Risk Factors -- Potential Delay in Completion or
Denial of Bank Conversion." Prior to the Conversion, the Holding Company has not
engaged and will not engage in any material operations. Upon consummation of the
Conversion, the Holding Company will have no significant assets other than the
outstanding capital stock of the Converted Association (and the National Bank
following the Bank Conversion), 50% of the net proceeds from the Stock
Conversion (less the amount to fund the ESOP) and a note evidencing its loan to
fund the ESOP. Upon consummation of the Conversion, the Holding Company's
principal business will be overseeing the business of the National Bank and
investing the portion of the net Stock Conversion proceeds retained by it, and,
assuming the requisite FRB and OCC approvals are obtained, the Holding Company
will register with the FRB as a bank holding company under the BHCA.
The holding company structure will permit the Holding Company to expand
the financial services currently offered through the Association, although there
are no definitive plans or arrangements for such expansion at present. The
holding company structure will also provide the Association with enhanced
operational flexibility and provide the ability to diversify its business
opportunities through acquiring other financial institutions, thereby enhancing
its financial resources in order to compete more effectively with other
financial service organizations. At the present time, however, the Holding
Company does not have any plans,
19
<PAGE>
agreements, arrangements or understandings with respect to any such
acquisitions. After the Stock Conversion, the Holding Company will be classified
as a unitary savings and loan holding company and will be subject to regulation
by the OTS. After the Bank Conversion, the Holding Company will be classified as
a bank holding company and will be subject to regulation by the FRB.
The executive office of the Holding Company is located at 501 East Main
Street, Robinson, Illinois 62454. Its telephone number at that address is (618)
544-8621.
FIRST ROBINSON SAVINGS BANK, NATIONAL ASSOCIATION
Upon consummation of the Bank Conversion, the National Bank will
succeed to all of the assets and liabilities of the Converted Association
(which, pursuant to the Stock Conversion will have succeeded to all of the
assets and liabilities of the Association), and initially will continue to
conduct business in substantially the same manner as the Association prior to
the Conversion.
The deposits of the National Bank will continue to be insured by the
SAIF of the FDIC, and, as such, the National Bank will continue to be subject to
regulation and supervision by the FDIC. The National Bank will not be subject to
OTS regulation and supervision; rather, the primary regulator of the National
Bank will be the OCC. The National Bank will remain a member of the FHLB of
Chicago. As a national bank, the National Bank will also be required to become a
member of the Federal Reserve System.
PRO FORMA DATA
The following tables set forth the historical net income, retained
earnings and per share data of the Association at and for the year ended October
31, 1996 and the two months ended December 31, 1996, and, after giving effect to
the Stock Conversion, the pro forma consolidated net income, stockholders'
equity and per share data of the Holding Company at and for such periods. The
pro forma data is computed on the assumptions that (i) the specified number of
shares of Common Stock were sold at the beginning of the specified periods and
yielded net proceeds to the Holding Company as indicated, and (ii) such net
proceeds were invested by the Association and the Holding Company at the
beginning of the periods to yield a net return of 3.4%. The assumed return is
based on an approximate rate on the one-year Treasury bill at December 31, 1996
(5.5%), as adjusted for applicable federal and state taxes totaling 37.5% of
such assumed return. The use of this rate is viewed as being more relevant,
based on the intended use of the proceeds, than the use of an arithmetic average
of the Association's weighted average yield on all interest-earning assets and
the weighted average rate paid on deposits during such period (as required by
federal regulations). Total expenses were assumed to be $400,000 at the midpoint
of the Estimated Valuation Range. The pro forma net income amounts derived from
the assumptions set forth herein should not be considered indicative of the
actual results of operations of the Holding Company that would have been
attained for any period if the Stock Conversion had been actually consummated at
the beginning of such period, and the assumptions regarding investment yields
should not be considered indicative of the actual yields expected to be achieved
during any future period.
20
<PAGE>
The total number of shares to be issued in the Stock Conversion may be
increased or decreased to reflect changes in market and financial conditions
prior to the close of the Subscription and Community Offering. However, if the
aggregate Purchase Price of the Common Stock sold in the Stock Conversion is
below $5,525,000 (the minimum of the Estimated Valuation Range) or more than
$8,596,250 (15% above the maximum of the Estimated Valuation Range), subscribers
will be offered the opportunity to modify or cancel their subscriptions. See
"The Conversion - Stock Pricing and Number of Shares to be Issued."
<TABLE>
<CAPTION>
At or For the Year Ended October 31, 1996
---------------------------------------------------------
552,500 650,000 747,500 859,625
Shares Shares Shares Shares
at $10.00 at $10.00 at $10.00 at $10.00
per Share per Share per Share per Share
(Minimum (Midpoint (Maximum (Supermax
of Range) of Range) of Range) of Range)
--------- --------- --------- ---------
(Dollars in thousands, except per share amounts)
<S> <C> <C> <C> <C>
Gross proceeds............................................... $ 5,525 $ 6,500 $ 7,475 $ 8,596
Less offering expenses and commissions....................... (385) (400) (400) (400)
--------- --------- --------- ---------
Estimated net Conversion proceeds.......................... 5,140 6,100 7,075 8,196
Less common stock acquired by ESOP......................... (442) (520) (598) (688)
--------- --------- --------- ---------
Estimated proceeds available for investment................ $ 4,698 $ 5,580 $ 6,477 $ 7,508
======== ======== ======== ========
Net Income:
Historical................................................. $ 123 $ 123 $ 123 $ 123
Pro forma adjustments:
Net income from proceeds(1)............................ 161 192 223 258
ESOP................................................... (28) (33) (37) (43)
--------- --------- --------- ---------
Pro forma(5)......................................... $ 256 $ 282 $ 309 $ 338
======== ======== ======== ========
Per share
Historical(3).......................................... $ 0.24 $ 0.20 $ 0.18 $ 0.15
Pro forma adjustments:
Net income from proceeds(1).......................... 0.31 0.32 0.32 0.32
ESOP(3).............................................. (0.05) (0.05) (0.05) (0.05)
-------- ------- -------- --------
Pro forma(5)....................................... $ 0.50 $ 0.47 $ 0.45 $ 0.42
======== ======= ======= ========
Pro forma price to earnings (P/E ratio)(5)............. 20.0x 21.3 x 22.7 x 23.8 x
==== ===== ===== =====
Number of shares used in calculating earnings per share 512,720 603,200 693,680 797,732
======= ======= ======= =======
Stockholders' equity (book value)(4):
Historical................................................. $ 4,658 $ 4,658 $ 4,658 $ 4,658
Estimated net Conversion proceeds.......................... 5,140 6,100 7,075 8,196
Less common stock acquired by:
ESOP(2).................................................. (442) (520) (598) (688)
--------- --------- --------- ---------
Pro forma.............................................. $ 9,356 $ 10,238 $ 11,135 $ 12,166
========= ========= ======== ========
Per share
Historical(3).............................................. $ 8.43 $ 7.17 $ 6.23 $ 5.42
Estimated net proceeds from the sale of Common Stock....... 9.30 9.38 9.46 9.53
Less common stock acquired by:
ESOP...................................................... (0.80) (0.80) (0.80) (0.80)
-------- -------- -------- --------
Pro forma(5)......................................... $16.93 $15.75 $14.89 $14.15
====== ====== ====== ======
Pro forma price to book value................................ 59.1% 63.5% 67.1% 70.7%
===== ===== ===== =====
Number of shares used in calculating equity per share........ 552,500 650,000 747,500 859,625
======= ======= ======= =======
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
At or For the Two Months Ended December 31, 1996
-----------------------------------------------------
552,500 650,000 747,500 859,625
Shares Shares Shares Shares
at $10.00 at $10.00 at $10.00 at $10.00
per Share per Share per Share per Share
(Minimum (Midpoint (Maximum (Supermax
of Range) of Range) of Range) of Range)
(Dollars in thousands, except per share amounts)
<S> <C> <C> <C> <C>
Gross proceeds............................................... $ 5,525 $ 6,500 $ 7,475 $ 8,596
Less offering expenses and commissions....................... (385) (400) (400) (400)
--------- --------- --------- ---------
Estimated net Conversion proceeds.......................... 5,140 6,100 7,075 8,196
Less common stock acquired by ESOP......................... (442) (520) (598) (688)
--------- --------- --------- ---------
Estimated proceeds available for investment................ $ 4,698 $ 5,580 $ 6,477 $ 7,508
======== ======== ======== ========
Net Income:
Historical................................................. $ 74 $ 74 $ 74 $ 74
Pro forma adjustments:
Net income from proceeds(1)............................ 27 32 37 43
ESOP................................................... (5) (5) (6) (7)
--------- --------- --------- ---------
Pro forma(5)......................................... $ 96 $ 101 $ 105 $ 110
======== ======== ======== ========
Per share
Historical(3).......................................... $ 0.14 $ 0.12 $ 0.11 $ 0.09
Pro forma adjustments:
Net income from proceeds(1).......................... 0.05 0.05 0.05 0.05
ESOP(3).............................................. (0.01) (0.01) (0.01) (0.01)
-------- ------- -------- --------
Pro forma(5)....................................... $ 0.18 $ 0.16 $ 0.15 $ 0.13
======== ======= ======= ========
Pro forma price to earnings (P/E ratio)(5)............. 8.8x 9.8x 11.1x 11.9x
=== ==== ==== =====
Number of shares used in calculating earnings per share 512,720 603,200 693,680 797,732
======= ======= ======= =======
Stockholders' equity (book value)(4):
Historical................................................. $ 4,746 $ 4,746 $ 4,746 $ 4,746
Estimated net Conversion proceeds.......................... 5,140 6,100 7,075 8,196
Less common stock acquired by:
ESOP(2).................................................. (442) (520) (598) (688)
--------- --------- --------- ---------
Pro forma.............................................. $ 9,444 $ 10,326 $ 11,223 $ 12,254
========= ========= ======== ========
Per share
Historical(3).............................................. $ 8.59 $ 7.30 $ 6.35 $ 5.52
Estimated net proceeds from the sale of Common Stock....... 9.30 9.38 9.46 9.53
Less common stock acquired by:
ESOP...................................................... (0.80) (0.80) (0.80) (0.80)
-------- -------- -------- --------
Pro forma(5)......................................... $17.09 $15.88 $15.01 $14.25
====== ====== ====== ======
Pro forma price to book value................................ 58.5% 62.9% 66.6% 70.1%
===== ===== ===== ======
Number of shares used in calculating equity per share........ 552,500 650,000 747,500 859,625
======= ======= ======= =======
</TABLE>
(footnotes begin on following page)
22
<PAGE>
- ---------------------
(1) No effect has been given to withdrawals from savings accounts for the
purpose of purchasing Common Stock in the Conversion.
(2) 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 from the net proceeds from the
Conversion retained by the Holding Company. The Association intends to make
contributions to the ESOP in amounts at least equal to the principal and
interest requirement of the debt. The Association's payment of the ESOP debt
is based upon equal installments of principal over a ten-year period plus
interest. Interest income earned by the Holding Company on the ESOP debt
offsets the interest paid by the Association on the ESOP loan. Accordingly,
only the principal payments on the ESOP debt are recorded as an expense
(tax-effected) to the Holding Company on a consolidated basis. The amount
borrowed is reflected as a reduction of stockholders' equity. No
reinvestment is assumed on proceeds contributed to fund the ESOP. The ESOP
expense has been computed based on the requirements of Statement of Position
93-6 which requires recognition of expense based upon the average market
price of shares committed to be released during the year and the exclusion
of unallocated shares from earnings per share computations. The valuation of
shares committed to be released is based upon the average market value of
the shares during the year, which, for purposes of this calculation, is
assumed to be equal to the $10.00 per share offering price. See "Management
- Benefit Plans - Employee Stock Ownership Plan."
(3) Historical per share amounts have been computed as if the shares of Common
Stock expected to be issued in the Conversion had been outstanding during
the period or on the dates shown, but without any adjustment of historical
net income or historical equity capital to reflect the investment of the
estimated net proceeds of the sale of shares in the Conversion or the
additional ESOP expense as described above.
(4) "Book value" represents the difference between the stated amounts of the
Association's assets and liabilities. The amounts shown do not reflect the
effect of the Liquidation Account which will be established for the benefit
of Eligible and Supplemental Eligible Account Holders in the Conversion. See
"The Conversion - Effects of Conversion to Stock Form on Depositors and
Borrowers of the Association" and "Regulation - Federal and State Taxation."
The amounts shown for book value do not represent fair market values or
amounts distributable to shareholders in the unlikely event of liquidation.
(5) Does not represent possible future price appreciation or depreciation.
23
<PAGE>
PROPOSED MANAGEMENT PURCHASES
The following table sets forth information regarding intended Common
Stock purchases by each of the directors and executive officers of the
Association and the Holding Company and by all directors and executive officers
as a group. This table excludes shares to be purchased by the ESOP. See
"Management - Benefit Plans." The directors and executive officers of First
Robinson have indicated their intention to purchase in the Stock Conversion an
aggregate of $735,000 of Common Stock, equal to 13.3%, 11.3%, 9.8% and 8.6% of
the number of shares to be issued in the Subscription and Community Offering, at
the minimum, midpoint, maximum and 15% above the maximum of the Estimated
Valuation Range, respectively.
Aggregate Number of Shares Percentage
Purchase at $10.00 per of Shares at
Name and Title Price Share (1)(2) Midpoint
- -------------- --------- ---------------- ------------
Scott F. Pulliam,
Chairman of the Board $100,000 10,000 1.5%
Clell T. Keller, Director 100,000 10,000 1.5
James D. Goodwine, Director 50,000 5,000 .8
Donald K. Inboden, Director 100,000 10,000 1.5
William K. Thomas, Director 75,000 7,500 1.2
Rick L. Catt, Director,
President and Chief Executive 100,000 10,000 1.5
All directors and executive
officers as a group (10 persons) $735,000 73,500 11.3%
======== ====== ====
- ----------
(1) Does not include subscriptions by the ESOP.
(2) Includes shares intended to be purchased by family members in household.
24
<PAGE>
PRO FORMA REGULATORY CAPITAL ANALYSIS
Set forth below is a summary of the Association's status under OTS'
regulatory capital standards as of December 31, 1996 on a historical and a pro
forma basis assuming that the indicated number of shares were sold as of such
date.
<TABLE>
<CAPTION>
Pro Forma Based Upon Sale of
--------------------------------------------------------------------------------------
859,625 Shares
552,500 Shares 650,000 Shares 747,500 Shares (15% Above the
(Minimum of (Midpoint of (Maximum of Maximum of
Estimated Estimated Estimated Estimated
Historical Valuation Range) Valuation Range) Valuation Range) Valuation Range)
---------- ---------------- ---------------- ---------------- ----------------
Amount Percent(2) Amount(1) Percent(2) Amount(1) Percent(2) Amount(1) Percent(2) Amount(1) Percent(2)
------ ---------- --------- ---------- --------- ---------- --------- ---------- --------- ----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GAAP Capital $4,746 7.03% $7,072 10.06% $7,276 10.31% $7,686 10.81% $8,156 11.39%
====== ===== ====== ===== ====== ===== ====== ===== ====== =====
Tangible Capital:
Capital level $4,704 6.97% $7,030 10.00% $7,234 10.25% $7,644 10.76% $8,114 11.33%
Requirement 1,013 1.50 1,054 1.50 1,059 1.50 1,066 1.50 1,074 1.50
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Excess $3,691 5.47% $5,976 8.50% $6,175 8.75% $6,578 9.26% $7,040 9.83%
====== ===== ====== ===== ====== ===== ====== ===== ====== =====
Core Capital:
Capital level $4,704 6.97% $7,030 10.00% $7,234 10.25% $7,644 10.76% $8,114 11.33%
Requirement(3)(4) 2,026 3.00 2,109 3.00 2,117 3.00 2,132 3.00 2,149 3.00
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Excess $2,678 3.97% $4,921 7.00% $5,117 7.25% $5,512 7.76% $5,965 8.33%
====== ===== ====== ===== ====== ===== ====== ===== ====== =====
Risk-Based Capital:
Capital level(5) $5,116 10.25% $7,442 14.34% $7,646 14.67% $8,056 15.36% $8,526 16.13%
Requirement 3,993 8.00 4,152 8.00 4,169 8.00 4,197 8.00 4,229 8.00
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
Excess $1,123 2.25% $3,290 6.34% $3,477 6.67% $3,859 7.36% $4,297 8.13%
====== ===== ====== ===== ====== ===== ====== ===== ====== =====
- -------
<FN>
(1) Assumes retention by the Holding Company of 50% of the net Stock
Conversion proceeds (less the amount of the loan made to the ESOP from
the Holding Company's portion of the net Stock Conversion proceeds).
The remaining 50% of the net Stock Conversion proceeds will be provided
to the Association.
(2) Tangible and core capital levels are shown as a percentage of total
adjusted assets; risk-based capital levels are shown as a percentage of
risk-weighted assets.
(3) For regulatory capital purposes, the Association's capital will be
reduced by the anticipated purchases by the ESOP of 8.0% of the shares
of Common Stock sold in the Stock Conversion
(4) In April 1991, the OTS proposed a core capital requirement for savings
associations comparable to the requirement for national banks that
became effective December 31, 1990. The proposal calls for an OTS core
capital requirement of at least 3.0% of total adjusted assets for
thrifts that receive the highest supervisory rating for safety and
soundness, with a 4.0% to 5.0% core capital requirement for all other
thrifts. See "Regulation - Regulatory Capital Requirements."
(5) Assumes investment of net proceeds in 72% risk-weighted assets, the
Association's average risk weight at December 31, 1996.
</FN>
</TABLE>
25
<PAGE>
CAPITALIZATION
The table below sets forth the capitalization, including deposits, of
First Robinson as of December 31, 1996, and the pro forma consolidated
capitalization of the Holding Company at the minimum, the midpoint, maximum and
15% above the maximum of the Estimated Valuation Range, after giving effect to
the Stock Conversion and based on other assumptions set forth in the table and
under the caption "Pro Forma Data."
<TABLE>
<CAPTION>
Pro Forma Based
Upon Sale at $10.00 Per Share of
------------------------------------------------
552,500 650,000 747,500 859,625
Historical Shares Shares Shares Shares
---------- ------ ------ ------ ------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C>
Deposits(1)................................. $59,642 $59,642 $59,642 $59,642 $59,642
Borrowed funds(3)........................... 2,500 2,500 2,500 2,500 2,500
------- -------- -------- -------- --------
Total deposits and borrowed funds........... $62,142 $62,142 $62,142 $62,142 $62,142
======= ======= ======= ======= =======
Stockholders' Equity:
Serial Preferred Stock ($.01 par value)
Authorized - 500,000 shares; none to
be outstanding........................... $ --- $ --- $ --- $ --- $ ---
Common Stock ($.01 par value)
Authorized - 2,000,000 shares; to be
outstanding - (as shown)................. --- 6 7 7 9
Additional paid-in capital................. --- 5,134 6,093 7,068 8,187
Retained earnings, substantially
restricted(2)............................ 4,704 4,704 4,704 4,704 4,704
Unrealized gain on securities available
for sale, net of income taxes............ 42 42 42 42 42
Less common stock acquired by:
ESOP(3).................................. --- (442) (520) (598) (688)
-------- -------- ------- ------- -------
Total stockholders' equity............. $ 4,746 $ 9,444 $10,326 $11,223 $12,254
======== ======== ======= ======= =======
Total stockholders equity as a percent of
total assets............................... 7.0% 13.1% 14.1% 15.2% 16.3%
==== ==== ==== ==== ====
- -------------
<FN>
(1) No effect has been given to withdrawals from savings accounts for the
purpose of purchasing Common Stock in the Stock Conversion. Any such
withdrawals will reduce pro forma deposits by the amount of such
withdrawals.
(2) See "Dividends" and "Regulation - Limitations on Dividends and Other
Capital Distributions" regarding restrictions on future dividend
payments and "The Conversion - Effects of Conversion to Stock Form on
Depositors and Borrowers of the Association" regarding the liquidation
account to be established upon the Stock Conversion.
(3) Assumes that 8.0% of the shares issued in the Stock Conversion will be
acquired by the ESOP and that the ESOP will be funded by the Holding
Company. The Association intends to make contributions to the ESOP
sufficient to service and ultimately retire its debt. Since the Holding
Company will finance the ESOP debt, the ESOP debt will be eliminated
through consolidation and no liability will be reflected on the Holding
Company's consolidated financial statements. Accordingly, the amount of
stock acquired by the ESOP is shown in this table as a reduction of
total stockholders' equity. See "Management - Benefit Plans - Employee
Stock Ownership Plan."
</FN>
</TABLE>
26
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
The following Consolidated Statements of Income of First Robinson for
each of the years in the three year period ended October 31, 1996 have been
audited by Larsson, Woodyard & Henson LLP, independent certified public
accountants, whose report thereon appears elsewhere herein. The Statements of
Income should be read in conjunction with the Consolidated Financial Statements
and related Notes included elsewhere herein. The Statements of Income for the
two months ended December 31, 1996 and 1995 were not audited by the
Association's independent auditors, but in the opinion of the Association's
management reflect all adjustments necessary for a fair presentation of the
results of such periods. All such adjustments are of a normal recurring nature.
The results for the two month periods are not necessarily indicative of the
results of the Association which may be expected for the entire year or any
future periods.
27
<PAGE>
FIRST ROBINSON SAVINGS & LOAN ASSOCIATION
CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended October 31, 1996, 1995 and 1994 and
For the Two Months Ended December 31, 1996 and 1995 (Unaudited)
Two Months Ended For the Years
December 31, Ended October 31,
--------------- ------------------------
1996 1995 1996 1995 1994
------ ------ ------ ------ ------
Unaudited
1,000's
Interest income:
Interest on mortgage loans $ 546 $ 420 $2,789 $2,247 $1,869
Interest on nonmortgage loans 300 257 1,652 1,120 739
Interest on investments 60 60 386 388 377
------ ------ ------ ------ ------
Total interest income 906 737 4,827 3,755 2,985
------ ------ ------ ------ ------
Interest expense:
Interest on deposits 473 410 2,634 1,951 1,446
Interest on FHLB advances 22 0 21 20 0
------ ------ ------ ------ ------
Total interest expense 495 410 2,655 1,971 1,446
------ ------ ------ ------ ------
Net interest income 411 327 2,172 1,784 1,539
Provision for loan losses 8 4 270 9 24
------ ------ ------ ------ ------
Net interest income after
provision for loan losses 403 323 1,902 1,775 1,515
------ ------ ------ ------ ------
Non-interest income:
Fees on loans 19 20 139 120 108
Service charges on deposits 29 21 156 121 115
Gain on sale of assets 0 0 60 1 0
Other 8 5 37 29 21
------ ------ ------ ------ ------
56 46 392 271 244
------ ------ ------ ------ ------
Non-interest expense:
Compensation and employee
benefits 174 149 1,017 743 609
Professional services 4 4 32 26 26
Premises, occupancy, and equip 81 65 406 320 277
SAIF deposit insurance
(Note N) 21 17 393 92 84
Other 58 55 272 233 180
------ ------ ------ ------ ------
338 290 2,120 1,414 1,176
------ ------ ------ ------ ------
Income before income taxes 121 79 174 632 583
Provision for income
tax (Note I) 47 31 51 233 221
------ ------ ------ ------ ------
Net income $ 74 $ 48 $ 123 $ 399 $ 362
====== ====== ====== ====== ======
See accompanying notes to consolidated financial statements.
28
<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 Association. The information contained in this
section should be read in conjunction with consolidated financial statements and
accompanying notes thereto and the other sections contained in this Prospectus.
The principal business of the Association consists of accepting deposits from
the general public and investing these funds primarily in loans, mortgage-backed
and related securities. The Association's loans consist primarily of loans
secured by residential real estate located in its market area, consumer loans
and commercial loans.
The Association's net income is dependent primarily on its net interest
income, which is the difference between interest earned on interest-earning
assets and the interest paid on interest-bearing liabilities. Net interest
income is a function of the Association's "interest rate spread," which is the
difference between the average yield earned on interest-earning assets and the
average rate paid on interest-bearing liabilities. The interest rate spread is
affected by regulatory, economic and competitive factors that influence interest
rates, loan demand and deposit flows. To a lesser extent, the Bank's net income
also is affected by the level of general and administrative expenses and the
level of other income, which primarily consists of service charges and other
fees.
The operations of the Association are significantly affected by
prevailing economic conditions, competition and the monetary, fiscal and
regulatory policies of government agencies. Lending activities are influenced by
the demand for and supply of housing, competition among lenders, the level of
interest rates and the availability of funds. Deposit flows and costs of funds
are influenced by prevailing market rates of interest, primarily on competing
investments, account maturities and the levels of personal income and savings in
the Association's market area.
Historically, the Association's mission has been to originate loans on
a profitable basis to the communities it serves. In seeking to accomplish its
mission, the Board of Directors and management have adopted a business strategy
designed (i) to maintain the Association's capital level in excess of regulatory
requirements; (ii) to maintain the Association's asset quality; (iii) to
maintain, and if possible, increase the Association's earnings; and (iv) to
manage the Association's exposure to changes in interest rates.
Financial Condition
December 31, 1996 compared to October 31, 1996
Total assets increased approximately $3.6 million or 5.7%, to $67.5
million at December 31, 1996 from $63.9 million at October 31, 1996. This
increase in total assets was primarily the result of a $1.3 million increase in
cash and cash equivalents and a $2.6 million
29
<PAGE>
increase in loans receivable, net. These increases were funded by an increase of
$1.0 million in FHLB advances and a $3.0 million increase in deposits.
Liabilities increased approximately $3.6 million or 6.1% to $62.8
million at December 31, 1996 from $59.2 million at October 31, 1996. This
increase in liabilities was primarily the result of a $3.0 million, or 5.2%,
increase in deposits to $59.7 million at December 31, 1996 from $56.7 million at
October 31, 1996 and an increase in FHLB advances to $2.5 million at December
31, 1996 from $1.5 million at October 31, 1996, which was partially offset by
payment of the SAIF, one-time, special assessment of $281,000 in November, 1996
which was accrued at October 31, 1996. Deposits have increased due to the
Association's focus on providing competitive pricing and service in its market
area.
Retained earnings increased approximately $88,000 or 1.89% to $4.7
million at December 31, 1996 from $4.7 million at October 31, 1996, due to net
earnings of $74,000, and the net effect of unrealized gains on
available-for-sale securities of $14,000.
Comparison at October 31, 1996 and October 31, 1995
Total assets increased $9.1, or 16.75%, to $63.9 million at October 31,
1996 from $54.7 million at October 31, 1995. This was primarily the result of a
$9.6 million increase in loans receivable, net and a $539,000 increase in
investment securities which was partially offset by a $1.6 million decrease in
interest bearing deposits.
Loans receivable, net increased by $9.6 million, or 21.4%, to $54.4
million at October 31, 1996 from $44.9 million at October 31, 1995. This
increase was primarily due to competitive rates and terms, the opening of two
new branches, new loan staff with commercial loan background, growing customer
desire to do business with a locally-owned institution, and attracting new
relationships through a high level of superior service to individuals and small
businesses.
Investment securities held to maturity decreased $704,000, or 54.3%, to
$592,000 at October 31, 1996 from $1.3 million at October 31, 1995. The decrease
was attributed to maturing securities and principal reduction on mortgage-backed
securities. Investment securities available for sale increased by $1.2 million,
or 43.01%, to $4.1 million at October 31, 1996 from $2.9 million at October 31,
1995. This increase was due to the purchase of securities to offset new jumbo
certificates of deposit. Real estate owned increased $260,000 to $278,000 at
October 31, 1996 from $18,000 at October 31, 1995. This increase was one
foreclosed property, which should be sold by the third quarter 1997 with minimal
to no loss anticipated. Accrued interest receivable increased $219,000, or
74.2%, to $514,000 at October 31, 1996 from $295,000 at October 31, 1995. This
increase was due to increased loans and payment structure on the new loans.
Liabilities increased approximately $9.0 million, or 18.0%, to $59.2
million at October 31, 1996 from $50.2 million at October 31, 1995. This was
primarily the result of an increase in deposits of $7.3 million, or 14.8%, to
$56.7 million at October 31, 1996 from $49.4 million at October 31, 1995. The
increase in deposits was primarily due to additional market exposure with two
new branches, a general increase in market share in Robinson, and an increase of
$582,000 in jumbo certificates of deposit. Jumbo certificates of deposit
amounted
30
<PAGE>
to $10.7 million at October 31, 1996. FHLB advances increased to $1.5 million at
October 31, 1996 from no advances at October 31, 1995. The Association used
advances to fund loan demand in excess of funds available.
Other liabilities increased $252,000, or 32.8%, to $1.0 million at
October 31, 1996 from $768,000 at October 31, 1995. This increase was primarily
from an increase in accrued interest payable of $124,000 and an increase in
accrued expenses of $272,000 which was partially offset by a decrease in accrued
and deferred income taxes of $146,000. Accrued interest payable increase was due
to increased deposits in the current year and FHLB advances outstanding at
October 31, 1996. Accrued expenses increased primarily due to the SAIF,
one-time, special assessment of $281,000 which was paid in November of 1996.
Income taxes decreased primarily from reduced net income in 1996 and increases
in deferred tax assets from the directors retirement plan, initial year in 1996
with prior service funding and an increase in the allowance for loan losses in
1996.
Retained earnings increased by $122,000, or 2.7%, to $4.7 million at
October 31, 1996 from $4.5 million at October 31, 1995 due to net earnings of
$123,000, and by the net effect of unrealized gains on available-for-sale
securities of $1,000.
Operating Results
Comparison of Operating Results for the Two Months Ended December 31, 1996 and
December 31,1995
Performance Summary. Net income for the two months ended December 31
1996 was $74,000, an increase of $26,000 or 54.2%, from net income of $48,000
for the same period last year. This increase was primarily due to an increase of
$84,000 of net interest income and an increase in other non-operating income of
$10,000 which was in excess of the increase in non-operating expenses of $48,000
and income taxes of $16,000. For the two month period ended December 31, 1996
and 1995 the returns on average assets were 0.7% and 0.5%, respectively, while
the returns on average equity were 9.4% and 6.4%, respectively.
Net Interest Income. For the two months ended December 31, 1996, net
interest income increased $84,000. This reflects an increase in interest income
of $169,000, or 22.9% to $906,000 from $737,000, and an increase in interest
expense of $85,000, or 20.7%, to $495,000 for period ended in 1996 from $410,000
for the same period ended in 1995. The net increase was due primarily to higher
volumes of loans as explained by a 0.2% increase in net interest margin (net
interest income divided by average earning assets) and by a 0.2% increase in
interest rate spread (average rate on interest earning assets less average
interest paid on interest bearing liabilities).
For the two months ended December 31, 1996, the average yield on
interest-earning assets was 8.7%, compared to 8.5% for the same period last
year. The average cost of interest-bearing liabilities was 5.2% for the two
months ended December 31, 1996, compared to 5.1% for the same period last year.
31
<PAGE>
The average interest rate spread was 3.6% for the two months ended
December 31, 1996, compared to 3.4% for the same period last year. The average
net interest margin was 4.0% for the two months ended December 31, 1996,
compared to 3.8% for the same period last year. The increase in both of these
ratios is the result of an increase in lending offset by an increase in
borrowings.
Provision for Loan Losses. During the two months ended December 31,
1996, the Association recorded an $8,000 provision for loan losses compared to a
$4,000 provision for the same period last year. The allowance for loan losses of
$412,000 or 0.7% of loans receivable, net at December 31, 1996 compared to
$248,000 or 0.5% of loans receivable, net at December 31, 1995.
Non-Interest Income. For the two months ended December 31, 1996,
non-interest income increased $10,000, or 21.7% to $56,000 from $46,000 from the
same period last year. This increase was due primarily from the increase in the
fees and charges on deposit accounts.
Non-Interest Expense. For the two months ended December 31, 1996,
non-interest expense increased by $48,000, or 16.6%, to $338,000 from $290,000
for the same period last year. This increase was due primarily from additional
compensation and employee benefits and office occupancy expense from the branch
facilities.
Income Taxes. For the two months ended December 31, 1996 income taxes
increased $16,000 to $47,000 from $31,000 for the same period last year. This
increase results from the higher income before taxes. The Association's
effective tax rates were 38.8% and 39.2% (federal and state) for the respective
two month periods ended December 31, 1996 and 1995.
Comparison of Operating Results for the Years Ended October 31, 1996 and October
31, 1995
Performance Summary. Net income decreased by $276,000, or 69.2%, to
$123,000 at October 31, 1996 from $399,000 at October 31, 1995. The decrease was
primarily due to an increase of net interest income of $388,000 and an increase
of non-operating income of $121,000 and a reduction in income tax expense of
$182,000, offset by an increase of provision for loan losses of $261,000, an
increase of non-interest expense of $706,000. For the years ended October 31,
1996 and 1995, the returns on average assets were 0.2% and 0.8% respectively,
while the returns on average equity were 2.6% and 9.7%, respectively.
Net Interest Income. Net interest income increased by $388,000 at year
ended October 31, 1996 from October 31, 1995. This reflects an increase of $1.1
million, or 28.6%, in interest income to $4.8 million from $3.8 million and an
increase in interest expense of $684,000, or 34.7% to $2.7 million from $2.0
million. The increase in net interest margin was primarily from increases in the
balances and rates of interest earning assets, particularly loans receivable,
offset by increases of balances and rates of interest bearing deposits,
primarily certificates of deposit. The Association maintained approximately the
same interest rate spread for both years.
32
<PAGE>
For the year ended October 31, 1996, the average yield on
interest-earning assets was 8.6% compared to 8.2% for 1995. The average cost of
interest-bearing liabilities was 5.1% for the year ended October 31, 1996, an
increase from 4.7% for 1995. The average balance of interest-earning assets
increased by $10.6 million, or 23.1%, to $56.3 million for the year ended
October 31, 1996, compared to $45.7 million for 1995. The average balance of
interest-bearing liabilities increased by $10.1 million, or 24.0%, to $52.1
million for the year ended October 31, 1996 from $42.0 million for the year
ended October 31, 1995.
The average interest rate spread was 3.5% for the year ended October
31, 1996 compared to 3.5% for the year ended October 31, 1995. The average net
interest margin was 3.9% for the year ended October 31, 1996 compared to 3.9%
for 1995.
Provision for Loan Losses. During the year ended October 31, 1996, the
Association recorded a provision for additional loan losses of $270,000 compared
to $9,000 for the year ended October 31, 1995. This provision was recorded to
bring the allowance to approximately 0.8% of total loans. Management believed
that this was appropriate due to the significant growth in loans receivable
particularly in consumer and commercial credits.
Management will continue to monitor its allowance for loan losses and
make additions to the allowance through the provision for loan losses as
economic conditions and other factors dictate. Although the Association
maintains its allowance for loan losses at a level which it considers to be
adequate to provide for loan losses, there can be no assurance that future
losses will not exceed estimated amounts or that additional provisions for loan
losses will not be required in the future.
Non-Interest Income. For the year ended October 31, 1996, non-interest
income increased by $121,000, or 44.7%, to $392,000 from $271,000 at October 31,
1995. This increase is primarily from an increase in loan fees of $19,000, or
15.8%, an increase in service charges on deposits of $35,000, or 28.9%, and an
increase in gain on sale of assets of $59,000. The increase in gain on sale of
assets resulted primarily from a $45,000 gain on the sale of an SBA guaranteed
portion of a commercial loan and a $8,000 gain on the sale of real estate held
for investment.
Non-Interest Expense. Non-interest expense increased by $706,000, or
49.9%, to $2.1 million for the year ended October 31, 1996 from $1.4 million for
the year ended October 31, 1995. Compensation and employee benefits increased
$274,000, or 36.9%, to $1.0 million for year ended October 31, 1996 from
$743,000 for 1995. This increase is attributed to a directors' retirement plan,
which amounted to $94,000 including prior service award, additional employees
for the staffing of the two branches started in late 1995, and normal salary
increases. The SAIF made a one time assessment to all associations which
increased the SAIF insurance cost by $281,000 during 1996. The rate of deposit
insurance assessment is expected to significantly decline commencing January 1,
1997. See "Regulation - Insurance of Accounts and Regulation by the FDIC." In
addition, in the future, non-interest expense may increase due to expenses
associated with the ESOP and the costs of being a public company. Occupancy
expense increased $86,000, or 26.9%, to $406,000 for 1996 from $320,000 for
1995. This increase was mainly attributed to increased expenses of two branches
for all of 1996 as compared to part of a year in 1995.
33
<PAGE>
Income Taxes. Income taxes decreased by $182,000 to $51,000 for the
year ended October 31, 1996 from $233,000 for the year ended October 31, 1995.
This decrease results from the decrease in income before taxes. The
Association's effective tax rates were 29.3% and 36.9% for years ended October
31, 1996 and October 31, 1995, respectively.
Comparison of Operating Results for the Years ended October 31, 1995 and October
31, 1994
Performance Summary. Net income for the year ended October 31, 1995
increased by $37,000, or 10.2%, to $399,000 from $362,000 for the year ended
October 31, 1994. This increase was primarily due to an increase in net interest
income of $245,000, an increase in non-interest income of $27,000, and offset by
an increase in non-interest expenses of $238,000. For the years ended October
31, 1995 and October 31, 1994, the returns on average assets were 0.8% and 0.9%,
respectively, while the returns on average equity were 9.7% and 9.1%,
respectively.
Net Interest Income. For the year ended October 31, 1995, net interest
income increased $245,000, or 15.9% to $1.8 million at October 31, 1995 from
$1.5 million at October 31, 1994. This increase results from an increase in
interest income of $770,000 offset by an increase in interest expense of
$525,000. The net increase was primarily due to an increase in the Association's
loans combined with higher rates on loans partially offset by an increase in the
volume of demand deposit accounts and the rates paid by the Association on those
deposits.
For the year ended October 31, 1995 the average yield on
interest-earning assets was 8.2% compared to 7.5% for 1994. The average cost of
interest-bearing liabilities was 4.7% for the year ended October 31, 1995, an
increase from 3.9% for 1994. The average balance of interest-earning assets
increased $6.1 million, or 15.3%, to $45.7 million for the year ended October
31, 1995, compared to $39.7 for 1994. The average balance of interest-bearing
liabilities increased by $5.2 million, or 14.21%, to $42.0 million for the year
ended October 31, 1995 from $36.8 million for 1994.
The average interest rate spread decreased to 3.5% for the year ended
October 31, 1995, compared to 3.6% for 1994. The average net interest margin
increased to 3.9% for the year ended October 31, 1995, compared to 3.9% for the
year ended October 31, 1994.
Provision for Loan Losses. The Association recorded a provision for
loan losses of $9,000 for year ended October 31, 1995 down from a provision of
$24,000 for year ended October 31, 1994. The allowance for loan losses of
$255,000, or 0.6% of loans receivable, net at October 31, 1995 compares to
$288,000, or 0.8% of loans receivable, net at October 31, 1994.
Non-Interest Income. For the year ended October 31, 1995, non-interest
income increased $27,000, or 11.1%, to $271,000 from $244,000 for fiscal 1994.
This was primarily due to increased fees on loans and increased service charges
on deposits.
Non-Interest Expense. Non-interest expense increased by $238,000, or
20.2%, to $1.4 million at October 31, 1995 from $1.2 million at October 31,
1994. Compensation and employee benefits increased $134,000, or 22.0%, to
$743,000 for year ended in 1995 from
34
<PAGE>
$609,000 for 1994. This increase is attributed to additional employees for the
staffing of the two branches started in 1995 and normal salary increases.
Occupancy expense increased $43,000, or 15.5%, to $320,000 for year ended
October 31, 1995 from $277,000 for 1994. This increase was primarily due to
increased expenses of two branches opened in 1995. Other operating expenses
increased $53,000, or 29.4%, to $233,000 for the year ended October 31, 1995
from $180,000 for 1994. This increase is primarily from general increases with
increases of $9,000 in advertising, $20,000 in office supplies and $11,000 in
telephone and postage expenses attributed to the opening of the two new branches
in 1995. In addition SAIF insurance increased $8,000 in 1995 due to an increased
deposit base.
Income Taxes. Income taxes increased $12,000 to $233,000 during the
year ended October 31, 1995, from $221,000 for the year ended October 31, 1994.
This increase was a result of increased pre-tax income from fiscal 1994 to
fiscal 1995. The Association's effective tax rates were 36.9% and 37.9% for the
years ended October 31, 1995 and 1994, respectively.
35
<PAGE>
Average Balances/Interest Rates and Yields. The following table
presents for the periods indicated the total dollar amount of interest income
from average interest earning assets and the resultant yields, as well as the
interest expense on average interest bearing liabilities, expressed both in
dollars and rates. No tax equivalent adjustments were made. All average balances
are monthly average balances. Non-accruing loans have been included in the table
as loans carrying a zero yield.
<TABLE>
<CAPTION>
Two Months Ended
At December 31, December 31, Year Ended October 31,
----------------- -------------------------- --------------------------
1996 1996 1996
----------------- -------------------------- --------------------------
Average Interest Average Interest
Yield/ Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Balance Rate Balance Paid Rate Balance Paid Rate
--------- ------ ------- -------- ------ ------- ------- ------
(Dollars in Thousands)
Interest-Earning Assets:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Loans receivable(1)................ $57,549 9.01% $56,250 $845 9.01% $49,543 $ 4,441 8.96%
Mortgage-backed securities......... 3,830 7.23 3,918 47 7.20 3,872 248 6.40
Investment securities.............. 689 6.79 689 6 5.22 879 57 6.48
Interest-bearing deposits.......... 2,048 6.50 1,365 8 3.52 1,994 81 4.06
-------- ----- ------- ---- ----- ------- -------
Total interest-earning assets..... 64,116 8.80 62,222 906 8.74 56,288 4,827 8.58
---- -------
Noninterest-earning assets......... 3,422 3,455 3,523
--------- ------- --------
Total assets...................... $67,538 $65,677 $59,811
======= ======= =======
Interest-Bearing Liabilities:
Savings deposits................... $ 5,515 3.23 $ 5,264 27 3.08 $ 4,938 156 3.16
Demand and NOW deposits............ 7,313 3.13 6,839 36 3.16 6,447 207 3.21
Certificate of deposits............ 44,024 5.69 43,348 411 5.69 40,363 2,271 5.63
Borrowings......................... 2,500 5.51 2,262 21 5.57 367 21 5.72
-------- ----- ------- ---- ----- ------- -------
Total interest-bearing liabilities 59,352 5.14 57,713 495 5.15 52,115 2,655 5.09
---- -------
Noninterest-bearing liabilities..... 3,440 3,218 2,964
-------- ------- -------
Total liabilities................. 62,792 60,931 55,079
Retained earnings................... 4,705 4,719 4,695
Unrealized gains on securities...... 41 27 37
-------- ------- -------
Total assets...................... $67,538 $65,677 $59,811
======= ======= =======
Net interest income................. $411 $ 2,172
==== =======
Net interest spread................. 3.66% 3.59% 3.49%
==== ===== ====
Net average earning assets.......... $ 4,764 $ 4,509 $ 4,173
======== ======= =======
Net yield on average earning
assets............................. 4.04% 3.96% 3.86%
==== ===== ====
Average interest-earning assets
to average interest-bearing
liabilities....................... 1.08x 1.08x 1.08x
==== ==== ====
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year Ended October 31,
--------------------------------------------------------
1995 1994
-------------------------- -------------------------
Average Interest Average Interest
Outstanding Earned/ Yield/ Outstanding Earned/ Yield/
Balance Paid Rate Balance Paid Rate
------- ---- ------ ------- ---- ----
Interest-Earning Assets:
<S> <C> <C> <C> <C> <C> <C>
Loans receivable(1)................ $39,101 $ 3,367 8.61% $32,245 $ 2,608 8.09%
Mortgage-backed securities......... 3,117 204 6.54 3,403 203 5.97
Investment securities.............. 1,276 76 5.96 1,638 95 5.80
Interest-bearing deposits.......... 2,236 108 4.83 2,370 79 3.33
------- ------- ------- -------
Total interest-earning assets..... 45,730 3,755 8.21 39,656 2,985 7.53
------- -------
Noninterest-earning assets......... 2,786 2,544
------- -------
Total assets...................... $48,516 $42,200
======= =======
Interest-Bearing Liabilities:
Savings deposits................... $ 4,272 129 3.02 $ 4,384 131 2.99
Demand and NOW deposits............ 5,942 189 3.18 6,249 195 3.12
Certificate of deposits............ 31,478 1,633 5.19 26,159 1,120 4.28
Borrowings......................... 329 20 6.08 --- --- ---
------- ------- ------ -------
Total interest-bearing liabilities 42,021 1,971 4.69 36,792 1,446 3.93
------- -------
Noninterest-bearing liabilities..... 2,131 1,421
------- -------
Total liabilities................. 44,152 38,213
Retained earnings................... 4,353 3,984
Unrealized gains on securities...... 11 3
------- -------
Total assets...................... $48,516 $42,200
======= =======
Net interest income................. $ 1,784 $ 1,539
======= =======
Net interest spread................. 3.52% 3.60%
==== ====
Net average earning assets.......... $ 3,709 $ 2,864
======= =======
Net yield on average earning
assets............................. 3.90% 3.88%
==== ====
Average interest-earning assets
to average interest-bearing
liabilities....................... 1.09x 1.08x
==== ====
----------
<FN>
(1) Calculated net of deferred loan fees, loan discounts, loans in process
and loss reserves.
</FN>
</TABLE>
36
<PAGE>
Rate/Volume Analysis of Net Interest Income. The following schedule
presents the dollar amount of changes in interest income and interest expense
for major components of interest-earning assets and interest-bearing
liabilities. It distinguishes between the changes related to outstanding
balances and that due to the changes in interest rates. For each category of
interest-earning assets and interest-bearing liabilities, information is
provided on changes attributable to (i) changes in volume (i.e., changes in
volume multiplied by old rate) and (ii) changes in rate (i.e., changes in rate
multiplied by old volume). For purposes of this table, changes attributable to
both rate and volume, which cannot be segregated, have been allocated
proportionately to the change due to volume and the change due to rate.
<TABLE>
<CAPTION>
Two Months Ended
December 31, Year Ended October 31,
-------------------------- -------------------------------------------------------
1995 vs. 1996 1995 vs. 1996 1994 vs. 1995
-------------------------- -------------------------- --------------------------
Increase Increase Increase
(Decrease) (Decrease) (Decrease)
Due to Total Due to Total Due to Total
------------- Increase ------------- Increase ------------- Increase
Volume Rate (Decrease) Volume Rate (Decrease) Volume Rate (Decrease)
------ ---- ---------- ------ ---- ---------- ------ ---- ----------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable........................ $158 $10 $168 $932 $142 $1,074 $583 $176 $759
Mortgage-backed securities.............. 14 (2) 12 48 (4) 44 (17) 18 1
Investment securities................... (5) 1 (4) (26) 7 (19) (22) 3 (19)
Other................................... (5) (2) (7) (11) (16) (27) (4) 33 29
---- --- ---- ---- ---- ------ ---- ---- ----
Total interest-earning assets......... $162 $ 7 169 $943 $129 1,072 $540 $230 770
==== === ---- ==== ==== ------ ==== ==== ----
Interest-bearing liabilities:
Savings deposits........................ $ 6 $-- 6 $ 21 $ 6 27 $ (3) $ 1 (2)
Demand and NOW deposits................. 4 --- 4 16 2 18 (10) 4 (6)
Certificate accounts.................... 62 (8) 54 491 147 638 251 262 513
Borrowings.............................. 21 -- 21 2 (1) 1 20 -- 20
---- --- ---- ---- ---- ------ ---- ---- ----
Total interest-bearing liabilities.... $ 93 $(8) 85 $530 $154 684 $258 $267 525
==== === ---- ==== ==== ------ ==== ==== ----
Net interest income...................... $ 84 $ 388 $245
==== ====== ====
</TABLE>
37
<PAGE>
Asset/Liability Management
One of the Association's principal financial objectives is to achieve
long-term profitability while reducing its exposure to fluctuations in interest
rates. The Association has sought to reduce exposure of its earnings to changes
in market interest rates by managing the mismatch between asset and liability
maturities and interest rates. The principal element in achieving this objective
has been to increase the interest-rate sensitivity of the Association's assets
by originating loans with interest rates subject to periodic repricing to market
conditions. Accordingly, the Association has emphasized the origination of one
to three year adjustable rate mortgage loans, short-term and adjustable
commercial loans, and consumer loans for retention in its portfolio. Management
has offered higher yields on deposits with extended maturities to assist in
matching the rate sensitivity of its liabilities.
An asset or liability is interest rate sensitive within a specific time
period if it will mature or reprice within that time period. If the
Association's assets mature or reprice more quickly or to a greater extent than
its liabilities, the Association's net portfolio value and net interest income
would tend to increase during periods of rising interest rates but decrease
during periods of falling interest rates. If the Association's assets mature or
reprice more slowly or to a lesser extent than its liabilities, the
Association's net portfolio value and net interest income would tend to decrease
during periods of rising interest rates but increase during periods of falling
interest rates.
The Association's Board of Directors has formulated an Interest Rate
Risk Management policy designed to promote long-term profitability while
managing interest-rate risk. The Board of Directors has established an
Asset/Liability Committee which consists primarily of the management team of the
Association. This committee meets periodically and reports to the Board of
Directors quarterly concerning asset/liability policies, strategies and the
Association's current interest rate risk position. The committee's first
priority is to structure and price the Association's assets and liabilities to
maintain an acceptable interest rate spread while reducing the net effects of
changes in interest rates.
Management's principal strategy in managing the Association's interest
rate risk has been to maintain short and intermediate term assets in the
portfolio, including one and three year adjustable rate mortgage loans, as well
as increased levels of commercial, agricultural and consumer loans, which
typically are for short or intermediate terms and carry higher interest rates
than residential mortgage loans. In addition, in managing the Association's
portfolio of investment securities and mortgage-backed and related securities,
management seeks to purchase securities that mature on a basis that approximates
as closely as possible the estimated maturities of the Association's liabilities
or purchase securities that have adjustable rate provisions. The Association
does not engage in hedging activities.
In addition to shortening the average repricing of its assets, the
Association has sought to lengthen the average maturity of its liabilities by
adopting a tiered pricing program for its certificates of deposit, which
provides higher rates of interest on its longer term certificates in order to
encourage depositors to invest in certificates with longer maturities.
38
<PAGE>
Net Portfolio Value. In order to encourage associations to reduce their
interest rate risk, the OTS adopted a rule incorporating an interest rate risk
("IRR") component into the risk-based capital rules. The IRR component is a
dollar amount that will be deducted from total capital for the purpose of
calculating an institution's risk-based capital requirement and is measured in
terms of the sensitivity of its net portfolio value ("NPV") to changes in
interest rates. NPV is the difference between incoming and outgoing discounted
cash flows from assets, liabilities, and off-balance sheet contracts. An
institution's IRR is measured as the change to its NPV as a result of a
hypothetical 200 basis point ("bp") change in market interest rates. A resulting
change in NPV of more than 2% of the estimated market value of its assets will
require the institution to deduct from its capital 50% of that excess change.
The rules provide that the OTS will calculate the IRR component quarterly for
each institution. Management reviews the OTS measurements on a quarterly basis.
In addition to monitoring selected measures on NPV, management also monitors
effects on net interest income resulting from increases or decreases in rates.
This measure is used in conjunction with NPV measures to identify excessive
interest rate risk. The following table presents the Association's NPV at
December 31, 1996, as calculated by the OTS, based on information provided to
the OTS by the Association.
<TABLE>
<CAPTION>
At December 31, 1996
- ------------------------------------------------------------------------
Net Portfolio Value NPV as % of PV of Assets
- ------------------------------------------ ------------------------
Change in
Rate $ Amount $ Change % Change NPV Ratio BP Change
- --------- -------- -------- -------- --------- ---------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
+400 bp $4,647 $(1,560) (25)% 7.03% (195) bp
+300 5,195 (1,012) (16) 7.75 (123)
+200 5,668 (539) (9) 8.36 (62)
+100 6,016 (191) (3) 8.78 (20)
0 6,207 -- -- 8.98 --
-100 6,239 32 1 8.97 (1)
-200 6,248 42 1 8.93 (5)
-300 6,384 178 3 9.05 7
-400 6,590 383 6 9.26 28
</TABLE>
In the above table, the first column on the left presents the basis
point increments of yield curve shifts. The second column presents the overall
dollar amount of NPV at each basis point increment. The third and fourth columns
present the Association's actual position in dollar change and percentage change
in NPV at each basis point increment. The remaining columns present the
Association's percentage change and basis point change in its NPV as a
percentage of portfolio value of assets.
Had it been subject to the IRR component at December 31, 1996, the
Association would not have been considered to have had a greater than normal
level of interest rate exposure and a deduction from capital would not have been
required. Although the OTS has informed the Association that it is not subject
to the IRR component discussed above, the Association is still subject to
interest rate risk and, as can be seen above, rising interest rates will reduce
the Association's NPV. The OTS has the authority to require otherwise exempt
institutions to comply with the rule concerning interest rate risk. See
"Regulation -- Regulatory Capital Requirements."
39
<PAGE>
Certain shortcomings are inherent in the method of analysis presented
in the computation of NPV. Although certain assets and liabilities may have
similar maturities or periods within which they will reprice, they may react
differently to changes in market interest rates. The interest rates on certain
types of assets and liabilities may fluctuate in advance of changes in market
interest rates, while interest rates on other types may lag behind changes in
market rates.
The Association's Board of Directors is responsible for reviewing the
Association's asset and liability policies. The Board reviews interest rate risk
and trends quarterly, as well as liquidity, capital ratios and requirements,
monthly. Management is responsible for administering the policies and
determinations of the Board of Directors with respect to the Bank's asset and
liability goals and strategies.
Liquidity
The Association's primary sources of funds are deposits, repayments and
prepayments of loans and interest income. Although maturity and scheduled
amortization of loans are relatively predictable sources of funds, deposit flows
and prepayments on loans are influenced significantly by general interest rates,
economic conditions and competition.
The primary investment activity of the Association is originating one
to four family residential mortgages, commercial business and real estate loans,
and consumer loans to be held to maturity. For the two months ended December 31,
1996, and the fiscal years ended October 31, 1996 and 1995, the Association
originated loans for its portfolio in the amount of $7.5 million, $36.7 million
and $31.8 million, respectively. For the two months ended December 31, 1996, and
the fiscal years ended October 31, 1996 and 1995, these activities were funded
from repayments of $4.3 million, $23.9 million, and $16.4 million, respectively
and sales and participations of $600,000, $1.7 million, and $3.1 million,
respectively.
The Association is required to maintain minimum levels of liquid assets
under government regulations. The Association's eligible liquidity ratios were
3.2% and 7.4%, respectively, at October 31, 1996 and 1995.
The Association's most liquid assets are cash and cash equivalents,
which include short-term investments. At December 31, 1996, October 31, 1996 and
1995, cash and cash equivalents were $2.5 million, $1.3 million, and $2.8
million, respectively. Liquidity has been maintained at lower than required
levels the past few months due to an increase in loans receivable that exceeded
the increases in deposit growth for a similar period of time. Management has
monitored and reviewed its liquidity, however, and, maintains a $10.6 million
line of credit with the FHLB which can be accessed immediately. At December 31,
1996, the Association's liquidity and short-term liquidity levels were 5.2% and
3.7%, respectively.
Liquidity management for the Association is both an ongoing and
long-term function of the Association's asset/liability management strategy.
Excess funds, when applicable, generally are invested in deposits at the FHLB of
Chicago. Currently when the Association requires funds, beyond its ability to
generate deposits, additional sources of funds are available through the FHLB of
Chicago. The Association has the ability to pledge its FHLB of Chicago stock or
certain other assets as collateral for such advances. The Association has taken
advantage of this opportunity in recent months. Management and the Board of
Directors believe that due to significant amounts of adjustable rate mortgage
loans that could be sold and the Association's ability to acquire funds from the
FHLB of Chicago, the Association's liquidity is adequate.
40
<PAGE>
BUSINESS OF THE ASSOCIATION
General
As a community-oriented financial institution, the Association seeks to
serve the financial needs of the residents and businesses in its market area.
The principal business of the Association has historically consisted of
attracting retail deposits from the general public and investing those funds in
primarily one-to four-family residential real estate loans and, to a lesser
extent, consumer loans, commercial real estate loans and commercial business
loans. At December 31, 1996, substantially all of the Association's real estate
mortgage loans, were secured by properties located in the Association's market
area. See "Risk Factors Geographical Concentration of Loans." The Association
also invests in investment and equity securities and mortgage-backed securities,
and other permissible investments.
The Association currently offers a variety of deposit accounts having a
wide range of interest rates and terms. The Association's deposits include
passbook savings, NOW accounts, certificate accounts, IRA accounts and
non-interest bearing accounts. The Association generally solicits deposits in
its primary market area. The Association does not accept any brokered deposits.
The Association's revenues are derived principally from interest
income, including primarily interest on loans, deposits in other banks and
mortgage-backed securities and other investments.
Market Area
First Robinson primarily serves Crawford County, Illinois. The
Association currently has three offices located in Robinson, Palestine and
Oblong, Illinois.
Robinson, Palestine and Oblong, Illinois are located in Crawford
County, Illinois, approximately 150 miles east of St. Louis, Missouri and 35
miles northwest of Vincennes, Indiana. Crawford County, Illinois has a
population of approximately 20,000 and is expected to increase in population
from 1996 to 2001. However, the household income from Crawford County, Illinois
is expected to decrease over that same period. Further, the 1990 unemployment
rate for Crawford County, Illinois was 8.6%, compared to 6.6% and 6.3% for the
state and national averages, respectively. The major employers in the
Association's primary market area include: Marathon Oil Company (approximately
600 employees), Leaf Incorporated (approximately 550 employees), Briggs
Industries (approximately 325 employees), Robinson Correctional Facility
(approximately 325 employees), Dana Corporation (approximately 300 employees),
Fair Rite Products (approximately 260 employees), Crawford Memorial Hospital
(approximately 240 employees) and E.H. Baare Corporation (approximately 200
employees).
41
<PAGE>
Lending Activities
General. The Association's loan portfolio consists primarily of
conventional, first mortgage loans secured by one- to four-family residences
and, to a lesser extent, consumer loans, commercial real estate loans,
commercial business loans and multi-family real estate and construction loans.
At December 31, 1996, the Association's gross loans outstanding totalled $57.5
million, of which $27.8 million or 48.3 were one-to four-family residential
mortgage loans. Of the one- to four-family mortgage loans outstanding at that
date, 6.0% were fixed-rate loans, and 94.0% were adjustable-rate loans. At that
same date, consumer loans totalled $12.0 million or 20.9% of the Association's
total loan portfolio, all of which were fixed-rate loans. Also at that date, the
Association's commercial real estate loans totaled $10.6 million or 18.4% of the
Association's total loan portfolio of which 89.8% were adjustable-rate loans. At
December 31, 1996, commercial business loans totalled $6.8 million or 11.9% of
the Association's total loan portfolio, of which 51.8% were fixed-rate loans and
48.2% were adjustable-rate loans. At that same date, multi-family real estate
and construction loans totalled $290,000 or 0.5% of the Association's total loan
portfolio.
The Association also invests in mortgage-backed securities, obligations
of states or political subdivisions and other debt securities. At December 31,
1996, mortgage-backed securities totalled $3.9 million or 84.9% of the
Association's total investment and mortgage-backed securities portfolio and
obligations of states and political subdivisions and other debt securities
totalled $691,000, or 15.1% of the Association's total investment and
mortgage-backed securities portfolio. See "Investment Activities."
The Association's loans-to-one borrower limit is generally limited to
the greater of 15% of unimpaired capital and surplus or $500,000. See
"Regulation - Federal Regulation of Savings Associations." At December 31, 1996,
the maximum amount which the Association could have lent under this limit to any
one borrower and the borrower's related entities was approximately $767,000. At
December 31, 1996, the Association had no loans or groups of loans to related
borrowers with outstanding balances in excess of this amount. The Association's
five largest lending relationship at December 31, 1996 were as follows: (i) $4.1
million in loans to a heavy equipment contractor, of which $3.5 million was
participated to other lenders, secured by real estate, equipment, inventory and
accounts receivable as well as certificates of deposit and personal guarantees;
(ii) a $1.2 million loan to a grain elevator operator, of which $600,000 was
participated to other lenders, secured by real estate, equipment and inventory,
personal guarantees and warehouse receipts; (iii) a $725,000 loan to a pest
control company, secured by real estate; (iv) a $700,000 loan to a grain farm
operator secured by real estate, machinery, personal guarantees and inventory;
and (v) a $650,000 line of credit to a heavy equipment operator secured by
equipment, stock, personal guarantees and certificates of deposit. At December
31, 1996, all of these loans totalling $3.4 million in the aggregate were
performing in accordance with their terms.
42
<PAGE>
Loan Portfolio Composition. The following information concerning the
composition of the Association's rates loan portfolios in dollar amounts and in
percentages (before deductions for loans in process, deferred fees and discounts
and allowances for losses) as of the dates indicated.
<TABLE>
<CAPTION>
December 31, October 31,
--------------- -----------------------------------------------------------------------------------
1996 1996 1995 1994 1993 1992
--------------- --------------- --------------- --------------- --------------- ---------------
Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent Amount Percent
------ ------- ------ ------- ------ ------- ------ ------- ------ ------- ------ -------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Real Estate Loans:
One- to four-family.......... $27,822 48.35% $27,784 50.61% $23,448 51.80% $21,058 61.04% $19,225 61.26% $20,152 65.77%
Multi-family................. 135 .23 141 .26 174 .38 190 .55 169 .54 195 .64
Commercial................... 10,608 18.43 9,594 17.47 5,560 12.29 3,961 11.48 3,261 10.39 2,542 8.30
Construction or development.. 155 .27 76 .14 514 1.14 140 .41 409 1.30 559 1.82
------- ------ ------- ------ ------- ------ ------- ------ ------- ------ ------- ------
Total real estate loans.. 38,720 67.28 37,595 68.48 29,696 65.61 25,349 73.48 23,064 73.49 23,448 76.53
------- ------ ------- ------ ------- ------ ------- ------ ------- ------ ------- ------
Other Loans:
Consumer Loans:
Deposit account............. 569 .99 571 1.04 1,069 2.36 442 1.28 510 1.62 367 1.20
Automobile.................. 8,729 15.17 8,764 15.96 7,273 16.07 5,133 14.88 4,228 13.47 3,278 10.70
Other....................... 2,712 4.71 2,717 4.95 2,591 5.73 1,412 4.09 1,256 4.00 1,499 4.89
------- ------ ------- ------ ------- ------ ------- ------ ------- ------ ------- ------
Total consumer loans..... 12,010 20.87 12,052 21.95 10,933 24.16 6,987 20.25 5,994 19.09 5,144 16.79
------- ------ ------- ------ ------- ------ ------- ------ ------- ------ ------- ------
Commercial business loans.... 6,819 11.85 5,257 9.57 4,628 10.23 2,164 6.27 2,329 7.42 2,048 6.68
------- ------ ------- ------ ------- ------ ------- ------ ------- ------ ------- ------
Total other.............. 18,829 32.72 17,309 31.52 15,561 34.39 9,151 26.52 8,323 26.51 7,192 23.47
------- ------ ------- ------ ------- ------ ------- ------ ------- ------ ------- ------
Total loans.............. 57,549 100.00% 54,904 100.00% 45,257 100.00% 34,500 100.00% 31,387 100.00% 30,640 100.00%
------- ====== ------- ====== ------- ====== ------- ====== ------- ====== ------- ======
Less:
Loans in process............. (134) -- -- -- -- --
Deferred fees and discounts.. -- (43) (148) (119) (135) (215)
Allowance for losses......... (412) (413) (255) (288) (367) (361)
------ ------- ------- ------- ------- -------
Total loans receivable, net.. $57,003 $54,448 $44,854 $34,093 $30,885 $30,064
======= ======= ======= ======= ======= =======
</TABLE>
43
<PAGE>
The following schedule illustrates the interest rate sensitivity of the
Association's loan portfolio at December 31, 1996. Mortgages which have
adjustable or renegotiable interest rates are shown as maturing in the period
during which the contract is due. The schedule does not reflect the effects of
possible prepayments or enforcement of due-on-sale clauses.
<TABLE>
<CAPTION>
Real Estate
-----------------------------------------
One- to Four-Family Multi-family and Commercial
and Construction Commercial Consumer Business Total
------------------- ------------------- ------------------- ------------------- -------------------
Weighted Weighted Weighted Weighted Weighted
Average Average Average Average Average
Amount Rate Amount Rate Amount Rate Amount Rate Amount Rate
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
(Dollars in Thousands)
Due During
Years Ending
December 31,
------------
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1997(1)............ $ 8,784 8.57% $ 6,617 9.03% $ 2,095 10.47% $4,495 9.24% $21,991 9.03%
1998 and 1999...... 10,923 8.92 2,535 8.72 4,059 10.72 1,074 9.06 18,591 9.29
2000 and 2001...... 735 8.58 875 7.83 5,686 9.93 848 8.80 8,144 9.46
After 2001......... 7,535 7.86 716 8.39 170 9.58 402 7.83 8,823 7.93
------- ---- ------- ---- ------- ----- ------ ---- ------- ----
Total.............. $27,977 8.51% $10,743 8.82% $12,010 10.29% $6,819 9.07% $57,549 9.01%
======= ==== ======= ==== ======= ===== ====== ==== ======= ====
- ----------
<FN>
(1) Includes demand loans, loans having no stated maturity and overdraft loans.
</FN>
</TABLE>
The total amount of loans due after December 31, 1997 which have
predetermined interest rates is $13.5 million, while the total amount of loans
due after such dates which have floating or adjustable interest rates is $38.2
million.
44
<PAGE>
Underwriting Standards. All of the Association's lending is subject to
its written underwriting standards and loan origination procedures. Decisions on
loan applications are made on the basis of detailed applications and, if
applicable, property valuations. Properties securing real estate loans made by
First Robinson are generally appraised by Board-approved independent appraisers.
In the loan approval process, First Robinson assesses the borrower's ability to
repay the loan, the adequacy of the proposed security, the employment stability
of the borrower and the credit-worthiness of the borrower.
The Association requires evidence of marketable title and lien position
or appropriate title insurance on all loans secured by real property. The
Association also requires fire and extended coverage casualty insurance in
amounts at least equal to the lesser of the principal amount of the loan or the
value of improvements on the property, depending on the type of loan. As
required by federal regulations, the Association also requires flood insurance
to protect the property securing its interest if such property is located in a
designated flood area.
Management reserves the right to change the amount or type of lending
in which it engages to adjust to market or other factors.
One- to Four-Family Residential Mortgage Lending. Residential loan
originations are generated by the Association's marketing efforts, its present
customers, walk-in customers, referrals from real estate brokers. Historically,
the Association has focused its lending efforts primarily on the origination of
loans secured by one- to four-family residential mortgages in its market area.
At December 31, 1996, the Association's one- to four-family residential mortgage
loans totalled $27.8 million, or 48.3%, of the Association's gross loan
portfolio of which $57,000 was contractually delinquent 60 days or more at that
date.
The Association generally offers only adjustable rate mortgage loans,
but has in the past also offered fixed-rate mortgage loans. For the two months
ended December 31, 1996, the Association originated $3.0 million of real estate
loans, of which $1.4 million were secured by one- to four-family residential
real estate. Substantially all of the Association's one- to four-family
residential mortgage originations are secured by properties located in its
market area.
The Association offers adjustable-rate mortgage loans at rates and on
terms determined in accordance with market and competitive factors. The
Association currently originates adjustable-rate mortgage loans with a term of
up to 25 years. The Association currently offers one-year and three-year
adjustable-rate mortgage loans with a stated interest rate margin generally over
the one-year Treasury Bill Index, which adjusts at one and three year terms,
respectively. Increases or decreases in the interest rate of the Association's
adjustable-rate loans is generally limited to 100 basis points at any adjustment
date for a one-year adjustable rate loan, 200 basis points for a three-year
adjustable rate loan, and 600 basis points over the life of the loan. As a
consequence of using caps, the interest rates on these loans may not be as rate
sensitive as are the Association's liabilities. The Association qualifies
borrowers for adjustable-rate loans based on the initial interest rate of the
loan. As a result, the risk of default on these loans may increase as interest
rates increase. See "Asset Quality - Non-Performing Assets." At December 31,
1996, the total balance of one-to four-family adjustable-rate loans was $26.2
million or 45.5% of the Association's gross loan portfolio. See "-Originations,
Purchases and Sales of Loans."
45
<PAGE>
The Association also offers fixed-rate mortgage loans but with only
short-term maturities of up to 5 years. At December 31, 1996, the total balance
of one- to four-family fixed-rate loans was $1.7 million or 2.9% of the
Association's gross loan portfolio. See "- Originations, Purchases and Sales of
Loans."
Currently, the Association will generally lend up to 80% of the lesser
of the sales price or appraised value of the security property on owner occupied
one- to four-family loans. Residential loans do not include prepayment
penalties, are non-assumable (other than government-insured or guaranteed
loans), and do not produce negative amortization. Real estate loans originated
by the Association contain a "due on sale" clause allowing the Association to
declare the unpaid principal balance due and payable upon the sale of the
security property. The Association does not utilize private mortgage insurance.
The loans currently originated by the Association are not typically
underwritten and documented pursuant to the guidelines of the FHLMC. Under
current policy, the Association originates these loans for portfolio. See "-
Originations, Purchases and Sales of Loans and Mortgage-Backed Securities."
Consumer Lending. First Robinson offers secured and unsecured consumer
loans. Secured loans may be collateralized by a variety of asset types,
including automobiles, mobile homes and deposits. The Association currently
originates substantially all of its consumer loans in its primary market area.
At December 31, 1996, the Association's consumer loan portfolio totalled $12.0
million, or 20.9% of its gross loan portfolio, substantially all of which were
fixed rate loans. Under federal law, the Association's consumer loan portfolio,
when aggregated with investments in investment grade corporate debt, cannot
exceed 35% of assets. A national bank has no consumer loan portfolio
limitations.
A significant component of the Association's consumer loan portfolio
consists of new and used automobile loans. These loans generally have terms that
do not exceed five years. Generally, loans on vehicles are made in amounts up to
80% of the sales price. At December 31, 1996, the Association's automobile loans
totalled $8.8 million or 15.2% of the Association's gross loan portfolio. Of
this amount approximately $7.6 million or 86.4% and $1.2 million or 13.6% were
originated on a direct and indirect basis, respectively.
Consumer loan terms vary according to the type and value of collateral,
length of contract and creditworthiness of the borrower. The underwriting
standards employed by the Association for consumer loans include an application,
a determination of the applicant's payment history on other debts and an
assessment of ability to meet existing obligations and payments on the proposed
loan. Although creditworthiness of the applicant is a primary consideration, the
underwriting process also includes a comparison of the value of the security, if
any, in relation to the proposed loan amount.
Consumer loans may entail greater credit risk than do residential
mortgage loans, particularly in the case of consumer loans which are unsecured
or are secured by rapidly depreciable assets, such as automobiles. Further, any
repossessed collateral for a defaulted consumer loan may not provide an adequate
source of repayment of the outstanding loan balance as a result of the greater
likelihood of damage, loss or depreciation. In addition, consumer loan
46
<PAGE>
collections are dependent on the borrower's continuing financial stability, and
thus are more likely to be affected by adverse personal circumstances.
Furthermore, the application of various federal and state laws, including
bankruptcy and insolvency laws, may limit the amount which can be recovered on
such loans. At December 31, 1996, $126,000 of the Association's consumer loans
were contractually delinquent 60 days or more representing .22% of the loan
portfolio. There can be no assurances, however, that additional delinquencies
will not occur in the future.
Commercial Real Estate Lending. The Association also originates
commercial real estate loans. At December 31, 1996 approximately $10.6 million,
or 18.4% of the Association's gross loan portfolio, was comprised of commercial
real estate loans, none of which were non-performing at that date. Of this
amount, approximately $1.1 million or 10.2% of these loans were fixed-rate
commercial real estate loans and approximately $9.5 million or 89.8% were
adjustable rate loans. The largest commercial real estate loan was for $700,000
secured primarily by real estate, machinery, inventory and personal guarantees
in Crawford County, Illinois.
First Robinson will generally lend up to 80% of the value of the
collateral securing the loan with a maturity of up to five-years for fixed rate
loans and varying maturities up to 20 years for adjustable rate loans generally
with repricing of one year or less. In underwriting these loans, the Association
currently analyzes the financial condition of the borrower, the borrower's
credit history, and the reliability and predictability of the cash flow
generated by the property securing the loan. The Association requires personal
guaranties of corporate borrowers. Appraisals on properties securing commercial
real estate loans originated by the Association are performed by independent
appraisers. The Association also offers small business loans, which are
generally guaranteed up to 90% by various governmental agencies. The Association
has typically sold the guaranteed portion of such loans and retained the
uninsured portion as well as the servicing.
Commercial real estate loans generally present a higher level of risk
than loans secured by one- to four-family residences. This greater risk is due
to several factors, including the concentration of principal in a limited number
of loans and borrowers, the effect of general economic conditions on income
producing properties and the increased difficulty of evaluating and monitoring
these types of loans. Furthermore, the repayment of loans secured by commercial
real estate is typically dependent upon the successful operation of the related
real estate project. If the cash flow from the project is reduced (for example,
if leases are not obtained or renewed, or a bankruptcy court modifies a lease
term, or a major tenant is unable to fulfill its lease obligations), the
borrower's ability to repay the loan may be impaired.
Commercial Business Lending. The Association also originates commercial
business loans. At December 31, 1996 approximately $6.8 million, or 11.9% of the
Association's gross loan portfolio, was comprised of commercial business loans
of which $4,000 were non-performing at that date. Of this amount, approximately
$3.5 million or 51.8% were fixed rate loans and approximately $3.3 million or
48.2% were adjustable rate loans. The largest commercial business loans are
loans of $4.1 million to a heavy equipment contractor, of which $3.5 million was
participated to other lenders. At December 31, 1996, this borrower had $650,000
outstanding to the Association.
47
<PAGE>
Unlike residential mortgage loans, which generally are made on the
basis of the borrower's ability to make repayment from his or her employment and
other income and which are secured by real property whose value tends to be more
easily ascertainable, commercial business loans typically are made on the basis
of the borrower's ability to make repayment from the cash flow of the borrower's
business. As a result, the availability of funds for the repayment of commercial
business loans may be substantially dependent on the success of the business
itself (which, in turn, is likely to be dependent upon the general economic
environment). The Association's commercial business loans are usually, but not
always, secured by business assets and generally by personal assets as well.
However, the collateral securing the loans may depreciate over time, may be
difficult to appraise and may fluctuate in value based on the success of the
business. A small portion of the Association's commercial business loans are
unsecured.
The Association's commercial business lending policy includes credit
file documentation and analysis of the borrower's character, capacity to repay
the loan, the adequacy of the borrower's capital and collateral as well as an
evaluation of conditions affecting the borrower. Analysis of the borrower's
past, present and future cash flows is also an important aspect of the
Association's current credit analysis. Nonetheless, such loans, are believed to
carry higher credit risk than more traditional thrift investments.
Construction Lending. The Association had $155,000 in construction
loans for one- to four-family residences or .30% of the total loan portfolio at
December 31, 1996. No construction loans for commercial property existed as of
December 31, 1996.
First Robinson offers construction loans to individuals for the
construction of one- to four-family residences or commercial buildings. Such
loans are offered with fixed and adjustable rates of interest. Following the
construction period, these loans may become permanent loans.
Construction lending is generally considered to involve a higher level
of credit risk since the risk of loss on construction loans is dependent largely
upon the accuracy of the initial estimate of the individual property's value
upon completion of the project and the estimated cost (including interest) of
the project. If the cost estimate proves to be inaccurate, the Association may
be required to advance funds beyond the amount originally committed to permit
completion of the project.
Multi-Family Lending. The Association offers one- to three-year
adjustable-rate multi-family loans for terms of up to 20 years. First Robinson
will generally lend up to 80% of the value of the collateral securing the loan.
At December 31, 1996, the Association had $135,000 of multi-family real estate
loans or .2% of the Association's gross loan portfolio was comprised of such
loans of which none were non-performing at that date.
Multi-family lending is generally considered to involve a higher level
of credit risk than one- to four-family residential lending. This greater risk
in multi-family lending is due to several factors, including the concentration
of principal in a limited number of loans and borrowers, the effect of general
economic conditions on income producing properties and the increased difficulty
of evaluating and monitoring these types of loans. Furthermore, the
48
<PAGE>
repayment of loans secured by multi-family real estate is typically dependent
upon the successful operation of the related real estate project. If the cash
flow from the project is reduced (for example, if leases are not obtained or
renewed, or a bankruptcy court modifies a lease term, or a major tenant is
unable to fulfill its lease obligations), the borrower's ability to repay the
loan may be impaired.
Originations, Purchases and Sales of Loans
Loan originations are developed from continuing business with
depositors and borrowers, soliciting realtors, builders, walk-in customers.
While the Association currently originates adjustable-rate and
fixed-rate loans, its ability to originate loans to a certain extent is
dependent upon the relative customer demand for loans in its market, which is
affected by the interest rate environment, among other factors. For the two
months ended December 31, 1996, the Association originated $3.0 million in
fixed-rate loans and $4.5 million in adjustable-rate loans.
The Association sold through participations with other lenders,
$600,000 in commercial business loans for the two months ended December 31,
1996. Sales of these loans generally are beneficial to the Association since
these sales may produce future servicing income, provide funds for additional
lending and other investments and increase liquidity. The Association does not
sell loans pursuant to forward sales commitments and, therefore, an increase in
interest rates after loan origination and prior to sale may adversely affect the
Association's income at the time of sale. It is the Association's general policy
to sell participations in loan originations in amounts above $650,000.
During the two months ended December 31, 1996, the Association did not
purchase loans originated by other lenders.
49
<PAGE>
The following table shows the loan origination, purchase, sale and
repayment activities of the Association for the periods indicated.
<TABLE>
<CAPTION>
Two Months
Ended
December 31, Year Ended October 31,
------------ --------------------------
1996 1996 1995 1994
------------ ---- ---- ----
<S> <C> <C> <C> <C>
Originations by type:
Real estate:
One to four family............ $ 1,406 $11,883 $ 8,069 $ 9,375
Multi-family.................. 95 -- -- 95
------- ------- ------- -------
Commercial.................... 1,515 4,703 5,915 1,818
------- ------- ------- -------
Other:
Consumer...................... 1,807 12,391 11,885 8,267
Commercial business........... 2,725 7,717 5,889 3,202
------- ------- ------- -------
Total loans originated..... 7,548 36,694 31,758 22,757
------- ------- ------- -------
Purchases:
Real Estate:
Commercial.................... -- -- -- 400
Other:
Commercial business........... -- -- -- 500
------- ------- ------- -------
Total loan purchases........ -- -- -- 900
------- ------- ------- -------
Mortgage-backed securities......... -- 2,174 -- 500
------- ------- ------- -------
Total purchases............... -- 2,174 -- 1,400
------- ------- ------- -------
Sales and Repayments:
Real estate:
Commercial.................... -- 990 3,081 --
Other:
Commercial business................ 600 754 -- 109
------- ------- ------- -------
Total sales................... 600 1,744 3,081 109
------- ------- ------- -------
Principal reductions
Loans......................... 4,300 23,917 16,443 18,214
------- ------- ------- -------
Mortgaged-backed securities... 198 1,136 346 982
------- ------- ------- -------
Total Reductions............. 5,098 26,797 19,870 19,305
------- ------- ------- -------
Decreases in other items, net (3) (1,386) (1,477) (2,221)
------- ------- ------- -------
Net Increase....................... $ 2,447 $10,685 $10,411 $ 2,631
======= ======= ======= =======
</TABLE>
50
<PAGE>
Asset Quality
General. When a borrower fails to make a required payment on a loan,
the Association attempts to cause the delinquency to be cured by contacting the
borrower. In the case of loans secured by real estate, reminder notices are sent
to borrowers. If payment is late, appropriate late charges are assessed and a
notice of late charges is sent to the borrower. If the loan is in excess of 60
days delinquent, the loan will generally be referred to the Association's legal
counsel for collection.
When a loan becomes more than 90 days delinquent or is otherwise
impaired, the Association will generally place the loan on non-accrual status
and previously accrued interest income on the loan is charged against current
income.
Delinquent consumer loans are handled in a similar manner as to those
described above; however, shorter time frames for each step apply due to the
type of collateral generally associated with such types of loans. The
Association's procedures for repossession and sale of consumer collateral are
subject to various requirements under applicable consumer protection laws.
The following table sets forth the Association's loan delinquencies by
type, by amount and by percentage of type at December 31, 1996.
<TABLE>
<CAPTION>
Loans Delinquent For:
----------------------------------------------------------------------------
60-89 Days(1) 90 Days and Over(1) Nonaccrual Total Delinquent Loans
------------------------ ------------------------ ------------------------ ------------------------
Percent Percent Percent Percent
of Loan of Loan of Loan of Loan
Number Amount Category Number Amount Category Number Amount Category Number Amount Category
------ ------ -------- ------ ------ -------- ------ ------ -------- ------ ------ --------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Real Estate:
One- to four-family... 4 $ 47 .17% -- $ -- --% 1 $ 10 .04% 5 $ 57 .20%
Consumer................ 22 97 .35 1 1 -- 6 28 .10 29 126 .45
Commercial business..... -- -- -- -- -- -- 1 4 .01 1 4 .01
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----
Total.............. 26 $144 .25% 1 $ 1 --% 8 $ 42 .07% 35 $187 .32%
==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ==== ====
- ----------
<FN>
(1) Loans are still accruing.
</FN>
</TABLE>
51
<PAGE>
Non-Performing Assets. The table below sets forth the amounts and
categories of non-performing assets in the Association's loan portfolio. Loans
are placed on non-accrual status when the collection of principal and/or
interest become doubtful. Foreclosed assets include assets acquired in
settlement of loans.
<TABLE>
<CAPTION>
October 31,
December 31, ----------------------------
1996 1996 1995 1994 1993 1992
------------ ---- ---- ---- ---- ----
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Non-accruing loans:
One- to four-family.................. $ 10 $ 44 $ -- $ -- $ -- $ 19
Consumer............................. 28 24 -- -- -- 3
Commercial business.................. 4 -- -- -- -- ---
---- ---- ---- ---- ----
Total............................. 42 68 -- -- -- 22
---- ---- ---- ---- ---- ----
Accruing loans delinquent more
than 90 days:
One- to four-family.................. --- 15 10 -- -- ---
Commercial real estate............... --- 21 -- -- -- ---
Consumer............................. 1 -- 2 5 1 ---
Commercial business.................. --- -- -- 8 -- ---
---- ---- ---- ---- ---- ----
Total............................. 1 36 12 13 1 ---
---- ---- ---- ---- ---- ----
Foreclosed assets:
One- to four-family.................. 277 278 18 19 129 ---
Commercial real estate............... --- -- -- -- -- 140
Consumer............................. 6 7 6 -- 8 ---
----- ---- ---- ---- ---- ----
Total............................. 283 285 24 19 137 140
---- ---- ---- ---- ---- ----
Total non-performing assets............ $326 $389 $ 36 $ 32 $138 $162
==== ==== ==== ==== ==== ====
Total as a percentage of total assets.. .48% .61% .07% .07% .33% .37%
=== ==== ==== ==== ==== ===
</TABLE>
For the two months ended December 31, 1996, gross interest income which
would have been recorded had the non-accruing loans been current in accordance
with their original terms amounted to approximately $1,000. There was no amount
that was included in interest income on such loans for the two months ended
December 31, 1996.
Classified Assets. Federal regulations provide for the classification
of loans and other assets, such as debt and equity securities, considered by the
OTS to be of lesser quality, as "substandard," "doubtful" or "loss." An asset is
considered "substandard" if it is inadequately protected by the current net
worth and paying capacity of the obligor or the collateral pledged, if any.
"Substandard" assets include those characterized by the "distinct possibility"
that the insured institution will sustain "some loss" if the deficiencies are
not corrected. Assets classified as "doubtful" have all of the weaknesses
inherent in those classified "substandard" with the added characteristic that
the weaknesses present make "collection or liquidation in full" on the basis of
currently existing facts, conditions and values, "highly questionable and
improbable." Assets classified as "loss" are those considered "uncollectible"
and of such little value that their continuance as assets without the
establishment of a specific loss reserve is not warranted.
52
<PAGE>
When an insured institution classifies problem assets as either
substandard or doubtful, it may establish general allowances for losses in an
amount deemed prudent by management. General allowances represent loss
allowances which have been established to recognize the inherent risk associated
with lending activities, but which, unlike specific allowances, have not been
allocated to particular problem assets. When an insured institution classifies
problem assets as "loss," it is required either to establish a specific
allowance for losses equal to 100% of that portion of the asset so classified or
to charge-off such amount. An institution's determination as to the
classification of its assets and the amount of its valuation allowances is
subject to review by the regulatory authorities, who may order the establishment
of additional general or specific loss allowances. Following the Bank
Conversion, the Association will continue to be subject to these asset
classification requirements.
In connection with the filing of its periodic reports with the OTS and
in accordance with its classification of assets policy, the Association
regularly reviews loans in its portfolio to determine whether such assets
require classification in accordance with applicable regulations. On the basis
of management's review of its assets, at December 31, 1996, the Association had
classified a total of $741,000 of its assets as substandard and none as doubtful
or loss. At December 31, 1996, total classified assets comprised $741,000, or
15.6% of the Association's capital, or 1.1% of the Association's total assets.
Other Loans of Concern. As of December 31, 1996, there were $767,000
loans identified, but not classified, by the Association with respect to which
known information about the possible credit problems of the borrowers or the
cash flows of the security properties have caused management to have some doubts
as to the ability of the borrowers to comply with present loan repayment terms
and which may result in the future inclusion of such items in the non-performing
asset categories.
Allowance for Loan Losses. The allowance for loan losses is 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.
Real estate properties acquired through foreclosure are recorded at the
lower of cost or fair value minus estimated cost to sell. If fair value at the
date of foreclosure is lower than the balance of the related loan, the
difference will be charged-off to the allowance for loan losses at the time of
transfer. Valuations are periodically updated by management and if the value
declines, a specific provision for losses on such property is established by a
charge to operations. At December 31, 1996, the Association had $277,000 in real
estate properties acquired through foreclosure.
53
<PAGE>
Although management believes that it uses the best information
available to determine the allowance, unforeseen market conditions could result
in adjustments and net earnings could be significantly affected if circumstances
differ substantially from the assumptions used in making the final
determination. Future additions to the Association's allowance for loan losses
will be the result of periodic loan, property and collateral reviews and thus
cannot be predicted in advance. In addition, federal regulatory agencies, as an
integral part of the examination process, periodically review the Association's
allowance for loan losses. Such agencies may require the Association to increase
the allowance based upon their judgment of the information available to them at
the time of their examination. At December 31, 1996, the Association had a total
allowance for loan losses of $412,000, representing .7% of the Association's
loans, net. See Note C of the Notes to Consolidated Financial Statements.
54
<PAGE>
The distribution of the Association's allowance for losses on loans at
the dates indicated is summarized as follows:
<TABLE>
<CAPTION>
December 31, October 31,
------------------------------- -----------------------------------------------------------------
1996 1996 1995
------------------------------- ------------------------------- -------------------------------
Percent Percent Percent
of Loans of Loans of Loans
Loan in Each Loan in Each Loan in Each
Amount of Amounts Category Amount of Amounts Category Amount of Amounts Category
Loan Loss by to Total Loan Loss by to Total Loan Loss by to Total
Allowance Category Loans Allowance Category Loans Allowance Category Loans
--------- -------- -------- --------- -------- -------- --------- -------- --------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
One- to four-
family........... $126 $27,822 48.35% $ 77 $27,784 50.61% $ 80 $23,448 51.80%
Multi-family..... -- 135 .23 -- 141 .26 -- 174 .38
Commercial
real estate...... 13 10,608 18.43 13 9,594 17.47 14 5,560 12.29
Construction or
development.... -- 155 .27 -- 76 .14 -- 514 1.14
Consumer......... 42 12,010 20.87 28 12,052 21.95 45 10,933 24.16
Commercial
business......... 2 6,819 11.85 2 5,257 9.57 2 4,628 10.23
Unallocated...... 229 -- -- 293 -- -- 114 -- --
---- ------- ------ ---- ------- ------ ---- ------- ------
Total....... $412 $57,549 100.00% $413 $54,904 100.00% $255 $45,257 100.00%
==== ======= ====== ==== ======= ====== ==== ======= ======
</TABLE>
<TABLE>
<CAPTION>
October 31,
---------------------------------------------------------------------------------------------------
1994 1993 1992
------------------------------- ------------------------------- -------------------------------
Percent Percent Percent
of Loans of Loans of Loans
Loan in Each Loan in Each Loan in Each
Amount of Amounts Category Amount of Amounts Category Amount of Amounts Category
Loan Loss by to Total Loan Loss by to Total Loan Loss by to Total
Allowance Category Loans Allowance Category Loans Allowance Category Loans
--------- -------- -------- --------- -------- -------- --------- -------- --------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
One- to four-
family........... $ 82 $21,058 61.04% $ 96 $19,225 61.25% $135 $20,152 65.77%
Multi-family..... -- 190 .55 2 169 .54 3 195 .64
Commercial
real estate...... 14 3,961 11.48 16 3,261 10.39 23 2,542 8.30
Construction or
development.... -- 140 .41 -- 409 1.30 -- 559 1.82
Consumer......... 22 6,987 20.25 36 5,994 19.10 27 5,144 16.79
Commercial
business......... 2 2,164 6.27 2 2,329 7.42 2 2,048 6.68
Unallocated...... 168 -- -- 215 -- -- 171 -- --
---- ------- ------ ---- ------- ------ ---- ------- ------
Total....... $288 $34,500 100.00% $367 $31,387 100.00% $361 $30,640 100.00%
==== ======= ====== ==== ======= ====== ==== ======= ======
</TABLE>
55
<PAGE>
The following table sets forth an analysis of the Association's
allowance for loan losses.
<TABLE>
<CAPTION>
Two Months
Ended Year Ended October 31,
December 31, ------------------------------------------
1996 1996 1995 1994 1993 1992
------------ ------ ------ ------ ------ ------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Balance at beginning of period.................... $ 413 $ 255 $ 288 $ 367 $ 361 $ 411
Charge-offs:
One- to four-family............................. -- 2 -- -- 6 81
Consumer........................................ 10 94 44 59 32 25
Commercial business............................. -- 26 -- 157 -- --
------ ------ ------ ------ ------ ------
10 122 44 216 38 106
------ ------ ------ ------ ------ ------
Recoveries:
One- to four-family............................. -- -- -- 30 4 6
Consumer........................................ 1 10 2 2 7 10
Commercial business............................. -- -- -- 81 -- --
------ ------ ------ ------ ------ ------
1 10 2 113 11 16
------ ------ ------ ------ ------ ------
Net charge-offs................................... 9 112 42 103 27 90
Additions charged to operations................... 8 270 9 24 33 40
------ ------ ------ ------ ------ ------
Balance at end of period.......................... $ 412 $ 413 $ 255 $ 288 $ 367 $ 361
====== ====== ====== ====== ====== ======
Ratio of net charge-offs during the period to
average loans outstanding during the period(1)... .10% .23% .11% .32% .08% .26%
=== === === === === ===
Ratio of net charge-offs during the period to
average non-performing assets(1)................. 15.13% 54.90% 84.00% 97.17% 14.84% 63.83%
===== ===== ===== ===== ===== =====
<FN>
- -------------------
(1) Annualized December 31, 1996.
</FN>
</TABLE>
Investment Activities
General. First Robinson must maintain minimum levels of investments
that qualify as liquid assets under OTS regulations. Liquidity may increase or
decrease depending upon the availability of funds and comparative yields on
investments in relation to the return on loans. Historically, the Association
has generally maintained liquid assets at levels above the minimum requirements
imposed by the OTS regulations and at levels believed adequate to meet the
requirements of normal operations, including repayments of maturing debt and
potential deposit outflows. Cash flows projections are regularly reviewed and
updated to assure that adequate liquidity is maintained. A national bank is not
subject to such prescribed requirements. At December 31, 1996, the Association's
liquidity ratio (liquid assets as a percentage of net withdrawable savings
deposits and current borrowings) was 3.6%. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Liquidity and
Capital Resources" and "Regulation - Liquidity."
56
<PAGE>
Federally chartered savings institutions have the authority to invest
in various types of liquid assets, including United States Treasury obligations,
securities of various federal agencies, certain certificates of deposit of
insured banks and savings institutions, certain bankers' acceptances, repurchase
agreements and federal funds. Subject to various restrictions, federally
chartered savings institutions may also invest their assets in commercial paper,
investment grade corporate debt securities and mutual funds whose assets conform
to the investments that a federally chartered savings institution is otherwise
authorized to make directly. A national bank has similar investment authority.
Generally, the investment policy of the Association, as established by
the Board of Directors, is to invest funds among various categories of
investments and maturities based upon the Association's liquidity needs,
asset/liability management policies, investment quality, marketability and
performance objectives.
Investment Securities. At December 31, 1996, the Association's
investment securities (including a $264,000 investment in the common stock of
the FHLB of Chicago) totalled $4.6 million, or 6.8% of its total assets. It has
been the Association's general policy to invest in obligations of state and
political subdivisions, federal agency obligations and other investment
securities. As of December 31, 1996, the Association held $202,000 in FHLMC
stock. See Note B of the Notes to Consolidated Financial Statements.
OTS regulations restrict investments in corporate debt and equity
securities by the Association. These restrictions include prohibitions against
investments in the debt securities of any one issuer in excess of 15% of the
Association's unimpaired capital and unimpaired surplus as defined by federal
regulations, which totalled $767,000 as of December 31, 1996, plus an additional
10% if the investments are fully secured by readily marketable collateral. A
national bank is subject to virtually identical limitations. At December 31,
1996, the Association was in compliance with this regulation. See "Regulation -
Federal Regulation of Savings Associations" for a discussion of additional
restrictions on the Association's investment activities.
57
<PAGE>
The following table sets forth the composition of the Association's
investment and mortgage-backed securities at the dates indicated.
<TABLE>
<CAPTION>
December 31, October 31,
---------------- ---------------------------------------------------------
1996 1996 1995 1994
---------------- ------------------- ------------------ ----------------
Book % of Book % of Book % of Book % of
Value Total Value Total Value Total Value Total
------- ------- ------- ------- ------ ------- ------- ------
(Dollars in Thousands)
AVAILABLE FOR SALE
Equity Securities:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FHLB stock.................................... $ 264 6.57% $ 264 6.39 $ 240 8.30 $ 236 7.56%
FHLMC stock................................... 202 5.03 205 4.96 208 7.20 200 6.40
------- ------ ------- ----- ------ ----- ------ ------
Total equity securities..................... 466 11.60 469 11.35 448 15.50 436 13.96
------- ------- ------- ------ ------ ------ ------ ------
Mortgage-backed Securities:
GNMA.......................................... 191 4.75 209 5.06 309 10.69 352 11.27
FNMA.......................................... 2,645 65.83 2,730 66.05 1,139 39.42 1,246 39.90
FHLMC......................................... 716 17.82 725 17.54 994 34.39 1,089 34.87
------- ------- ------- ------ ------ ------ ------ ------
Total mortgage-backed securities............ $ 3,552 88.40% $ 3,664 88.65% $2,442 84.50% $2,687 86.04%
------- ------- ------- ------ ----- ------ ----- ------
Total available for sale.................... $ 4,018 100.00% $ 4,133 100.00% $2,890 100.00% $3,123 100.00%
======= ====== ======= ====== ===== ====== ===== ======
HELD TO MATURITY
Investment Securities:
FHLMC step up................................. $ --- ---% $ --- ---% $ 500 38.58 $ 500 36.21%
Municipal bonds............................... 225 39.47 245 41.39 265 20.45 285 20.64
-------- ------ ------- ------ ------ ------ ------ ------
Total investment securities................. 225 39.47 245 41.39 765 59.03 785 56.85
-------- ------- ------- ------ ------ ------ ------ ------
Mortgage-backed Securities:
FHLMC.......................................... $ 345 60.53% $ 347 58.61% $ 531 40.97% $ 596 43.15%
------- ------ ------- ----- ----- ------ ----- ------
Total held to maturity...................... $ 570 100.00% $ 592 100.00% $1,296 100.00% $1,381 100.00%
======= ====== ======= ====== ===== ====== ===== ======
Average remaining life of investment securities.. 3.24 Years 3.31 Years 3.49 years 4.39 years
Other interest-earning assets:
Total interest-bearing deposits with banks.. $2,048 100.00% $ 868 100.00% $2,472 100.00% $2,602 100.00%
====== ====== ======= ====== ====== ====== ====== ======
</TABLE>
58
<PAGE>
The Association's investment securities portfolio at December 31, 1996,
contained no securities of any issuer with an aggregate book value in excess of
10% of the Association's retained earnings, excluding those issued by the U.S.
government, or its agencies.
First Robinson's investments, including the mortgage-backed securities
portfolio, are managed in accordance with a written investment policy adopted by
the Board of Directors.
OTS guidelines, as well as those of the other federal banking
regulators, regarding investment portfolio policy and accounting require savings
associations to categorize securities and certain other assets as held for
"investment," "sale," or "trading." In addition, effective April 1, 1994, the
Association adopted SFAS 115 which states that securities available for sale are
accounted for at fair value and securities which management has the intent and
the Association has the ability to hold to maturity are accounted for on an
amortized cost basis. The Association's investment policy has strategies for
each type of security. At December 31, 1996, the Association classified $4.0
million of its investments as available for sale and $570,000 as held to
maturity. See Note _ of the Notes to Consolidated Financial Statements.
Mortgage-backed Securities. The Association invests primarily in
federal agency obligations. At December 31, 1996, the Association's investment
in mortgage-backed securities totalled $3.9 million or 5.8% of its total assets.
Of this amount, $345,000 was held to maturity and $3.5 million was available for
sale. At December 31, 1996, the Association did not have a trading portfolio.
See Note B of the Notes to Consolidated Financial Statements.
59
<PAGE>
The following table sets forth the maturities of the Association's
mortgage-backed securities at December 31, 1996.
<TABLE>
<CAPTION>
Due in December 31,
--------------------------------------------------------------------- 1996
6 Months 6 Months 1 to 3 to 5 5 to 10 10 to 20 Over 20 Balance
or Less to 1 Year 3 Years Years Years Years Years Outstanding
---------- --------- -------- -------- --------- --------- -------- -----------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Federal Home Loan Mortgage Corporation...... $109 $112 $ 498 $118 $ 79 $110 $ 15 $1,041
Federal National Mortgage Association....... 346 354 1,133 206 141 212 157 2,549
Government National Mortgage Association.... 33 35 117 --- --- --- --- 185
----- ------ ------ ----- ------ ----- ------ -------
Total.................................. $488 $501 $1,748 $324 $220 $322 $172 $3,775
==== ==== ====== ==== ==== ==== ==== ======
</TABLE>
60
<PAGE>
Sources of Funds
General. The Association's primary sources of funds are deposits,
receipt of principal and interest on loans and securities, interest earned on
deposits with other banks, and other funds provided from operations.
The Association has used FHLB advances to support lending activities
and to assist in the Association's asset/liability management strategy. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations - Asset\Liability Management." At December 31, 1996, the Association
had $2.5 million in FHLB advances, but had the capacity to borrow up to $10.6
million from the FHLB. Following the Bank Conversion, the Association intends to
remain a member of the FHLB of Chicago. See "-Borrowings."
Deposits. First Robinson offers a variety of deposit accounts having a
wide range of interest rates and terms. The Association's deposits consist of
passbook, money market deposit, IRA accounts, and certificate accounts. The
certificate accounts currently range in terms from 90 days to five years. The
Association has a significant amount of deposits that will mature within one
year. However, management expects that virtually all of the deposits will be
renewed.
The Association relies primarily on advertising, competitive pricing
policies and customer service to attract and retain these deposits. Currently,
First Robinson solicits deposits from its market area only, and does not use
brokers to obtain deposits. The flow of deposits is influenced significantly by
general economic conditions, changes in money market and prevailing interest
rates and competition.
The Association has become more susceptible to short-term fluctuations
in deposit flows as customers have become more interest rate conscious. The
Association endeavors to manage the pricing of its deposits in keeping with its
profitability objectives giving consideration to its asset/liability management.
The ability of the Association to attract and maintain savings accounts and
certificates of deposit, and the rates paid on these deposits, has been and will
continue to be significantly affected by market conditions.
61
<PAGE>
The following table sets forth the savings flows at the Association
during the periods indicated.
<TABLE>
<CAPTION>
Two Months
Ended
December 31, Year Ended October 31,
------------ -----------------------------------
1996 1996 1995 1994
---- ---- ---- ----
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Opening balance............................. $56,691 $ 49,404 $ 39,208 $ 36,976
Deposits.................................... 34,144 185,451 156,675 103,360
Withdrawals................................. 31,467 179,660 147,580 101,987
Interest credited........................... 274 1,496 1,101 859
------- -------- -------- ---------
Ending balance.............................. $59,642 $56,691 $49,404 $39,208
======= ======= ======= =======
Net increase................................ $2,951 $7,287 $10,196 $2,232
======= ====== ======= ======
Percent increase............................ 5.21% 14.75% 26.00% 6.04%
======= ====== ======= ======
</TABLE>
62
<PAGE>
The following table sets forth the dollar amount of savings deposits in
the various types of deposit programs offered by the Association for the periods
indicated.
<TABLE>
<CAPTION>
December 31, October 31,
------------ -----------
1996 1996 1995 1994
--------------------- ---------------------- ---------------------- --------------
Percent Percent Percent Percent
Amount of Total Amount of Total Amount of Total Amount of Total
------ -------- ------ -------- ------ -------- ------ --------
(Dollars in Thousands)
Transactions and Savings Deposits:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Non-interest bearing demand 0%........ $ 2,790 4.68% $ 2,265 4.00% $ 1,873 3.79% $ 1,402 3.58%
Passbook Accounts 3.23%............... 5,515 9.25 5,540 9.77 4,124 8.35 4,296 10.95
NOW Accounts 3.13%.................... 7,313 12.26 6,717 11.85 6,055 12.25 6,002 15.31
------- ------- -------- ------- ------- ------ -------- ------
Total Non-Certificates................ 15,618 26.19 14,522 25.62 12,052 24.39 11,700 29.84
------- ------- -------- ------- -------- ------ -------- -------
Certificates:
2.00 - 3.99%......................... $ 63 .10% $ 94 .17% $ 11 .02% $ 4,126 10.52%
4.00 - 5.99%......................... 24,792 41.57 22,958 40.49 21,810 44.15 23,022 58.72
6.00 - 7.99%......................... 19,169 32.14 19,117 33.72 15,531 31.44 360 .92
Total Certificates.................... 44,024 73.81 42,169 74.38 37,352 75.61 27,508 70.16
-------- ------ -------- ------- -------- ------ -------- -------
Total Deposits........................ $59,642 100.00% $56,691 100.00% $49,404 100.00% $39,208 100.00%
======= ====== ======= ====== ======= ====== ======= ======
</TABLE>
63
<PAGE>
The following table shows rate and maturity information for the
Association's certificates of deposit as of December 31, 1996.
<TABLE>
<CAPTION>
2.00- 4.00- 6.00- Percent
3.99% 5.99% 7.99% Total of Total
-------- -------- --------- ---------- --------
(Dollars in Thousands)
Certificate accounts
maturing
in quarter ending:
- ------------------
<S> <C> <C> <C> <C> <C>
March 31, 1997................. $ 307 $ 6,333 $ 3,504 $ 10,144 23.05%
June 30, 1997.................. --- 7,793 585 8,378 19.03
September 30, 1997............. --- 2,613 4,406 7,019 15.94
December 31, 1997.............. --- 3,427 1,825 5,252 11.93
March 31, 1998................. --- 1,566 707 2,273 5.16
June 30, 1998.................. --- 1,258 944 2,202 5.00
September 30, 1998............. --- 530 399 929 2.11
December 31, 1998.............. --- 553 1,316 1,869 4.25
March 30, 1999................. --- 193 107 300 .68
June 30, 1999.................. --- 174 552 726 1.65
September 30, 1999............. --- 8 425 433 .98
Thereafter..................... --- 100 4,399 4,499 10.22
------ -------- -------- -------- ------
Total....................... $ 307 $24,548 $19,169 $44,024 100.00%
===== ======= ======= ======= ======
Percent of total............ .70% 55.76% 43.54%
=== ===== ======
</TABLE>
The following table indicates the amount of the Association's
certificates of deposit and other deposits by time remaining until maturity as
of December 31, 1996.
<TABLE>
<CAPTION>
Maturity
Over Over
3 Months 3 to 6 6 to 12 Over
or Less Months Months 12 months Total
---------- ------ --------- --------- --------
<S> <C> <C> <C> <C> <C>
Certificates of deposit less than $100,000....... $7,113 $5,764 $ 9,548 $10,383 $32,808
Certificates of deposit of $100,000 or more...... 1,738 1,245 2,723 2,847 8,553
Public funds of $100,000 or more (1)............. 1,050 1,369 --- --- 2,419
------- ------- --------- --------- ---------
Total certificates of deposit.................... $9,901 $8,378 $12,271 $13,230 $43,780
====== ====== ======= ======= =======
- ---------------
<FN>
(1) Deposits from governmental and other public entities.
</FN>
</TABLE>
64
<PAGE>
Subsidiary Activities
As a federally chartered savings association, First Robinson is
permitted by OTS regulations to invest up to 2% of its assets, or approximately
$1.4 million at December 31, 1996, in the stock of, or loans to, service
corporation subsidiaries. First Robinson may invest an additional 1% of its
assets in service corporations where such additional funds are used for
inner-city or community development purposes and may lend additional amounts
based upon its general lending authority. In addition to investments in service
corporations, federal associations are permitted to invest an unlimited amount
in operating subsidiaries engaged solely in activities in which a federal
association may engage. At December 31, 1996, First Robinson had one subsidiary,
First Robinson Service Corporation, Inc., (the "Service Corporation"). The
Association's investment in the Service Corporation, which is inactive, complies
with OTS investment regulations.
As a national bank, the Association will be able to invest unlimited
amounts in subsidiaries that are engaged in activities in which the parent bank
may engage. In addition, a national bank may invest limited amounts in
subsidiaries that provide banking services, such as data processing, to other
financial institutions. Following the Bank Conversion, the Service Corporation
will continue to be a subsidiary of the National Bank.
Competition
First Robinson faces strong competition, both in originating real
estate, commercial and consumer loans and in attracting deposits. Competition in
originating loans comes primarily from commercial banks and credit unions
located in the Association's market area. Commercial banks provide vigorous
competition in consumer lending. The Association competes for real estate and
other loans principally on the basis of the quality of services it provides to
borrowers, the interest rates and loan processing fees it charges, and the types
of loans it originates. See "- Lending Activities."
The Association attracts all of its deposits through its retail banking
office. Therefore, competition for those deposits is principally from retail
brokerage offices, commercial banks and credit unions located in the community.
The Association competes for these deposits by offering a variety of account
alternatives at competitive rates and by providing convenient business hours.
The Association primarily serves Crawford County, Illinois. There are
four commercial banks which compete for deposits and loans in the Association's
market area.
Employees
At December 31, 1996, the Association had a total of 34 full-time and 6
part-time employees. The Association's employees are not represented by any
collective bargaining group. Management considers its employee relations to be
good.
65
<PAGE>
Properties
The Association conducts its business through its main office and two
branch offices, which are located in Crawford County, Illinois. The Association
owns its main office and branch offices. The following table sets forth
information relating to the Association's office as of December 31, 1996. The
total net book value of the Association's premises and equipment (including
land, buildings and leasehold improvements and furniture, fixtures and
equipment) at December 31, 1996 was approximately $2.6 million. See Note E of
the Notes to Consolidated Financial Statements.
Total
Approximate
Date Square Net Book Value at
Location Acquired Footage December 31, 1996
- ------------------------- -------- -------------- -----------------
Main Office:
501 East Main Street 1985 12,420 $1.6 million
Robinson, Illinois
Branch Offices:
119 East Grand Prairie 1995 1,800 399,000
Palestine, Illinois
102 West Main Street 1995 2,260 141,000
Oblong, Illinois
At December 31, 1996, the Association also had under construction a
drive-up facility to be located in Oblong, Illinois. At this date, the
Association had booked approximately $130,000 in costs associated with this
facility. It is estimated that total expenditures associated with the design and
construction of this facility will be approximately $235,000.
First Robinson believes that its current and planned facilities are
adequate to meet the present and foreseeable needs of the Association and the
Holding Company.
Legal Proceedings
First Robinson is involved, from time to time, as plaintiff or
defendant in various legal actions arising in the normal course of its
businesses. While the ultimate outcome of these proceedings cannot be predicted
with certainty, it is the opinion of management, after consultation with counsel
representing First Robinson in the proceedings, that the resolution of these
proceedings should not have a material effect on Holding Company's results of
operations on a consolidated basis.
66
<PAGE>
REGULATION
General
First Robinson is a federally chartered savings and loan association,
the deposits of which are federally insured and backed by the full faith and
credit of the United States Government. Accordingly, the Association is subject
to broad federal regulation and oversight extending to all its operations by the
OTS and the FDIC. The Association is a member of the FHLB of Chicago and is
subject to certain limited regulation by the FRB. First Robinson is a member of
the SAIF and the deposits of the Association are insured by the FDIC. As a
result, the FDIC has certain regulatory and examination authority the
Association. This regulatory oversight by the OTS will continue to apply to the
Association following consummation of the Stock Conversion but prior to
completion of the Bank Conversion.
Upon consummation of the Bank Conversion, the Association will be a
national bank and its deposit accounts will continue to be insured by the SAIF.
As a national bank, the Association also will be required to become a member of
the Federal Reserve System. The Association will be subject to supervision,
examination and regulation by the OCC (rather than the OTS) and to OCC
regulations governing such matters as capital standards, mergers, establishment
of branch offices, subsidiary investments and activities and general investment
authority, and it will remain subject to the FDIC's authority to conduct special
examinations. The Association will be required to file reports with the OCC
concerning its activities and financial condition and will be required to obtain
regulatory approvals prior to entering into certain transactions, including
mergers with, or acquisitions of, other depository institutions.
Certain of these regulatory requirements and restrictions are discussed
below or elsewhere in this document.
Federal Regulation of Savings Associations
The OTS has extensive authority over the operations of savings
associations. As part of this authority, First Robinson is required to file
periodic reports with the OTS and is subject to periodic examinations by the OTS
and the FDIC. Under agency scheduling guidelines, it is likely that another
examination will be initiated in the near future. When these examinations are
conducted by the OTS and the FDIC, the examiners may require the Association to
provide for higher general or specific loan loss reserves. All savings
associations are subject to a semi-annual assessment, based upon the savings
association's total assets, to fund the operations of the OTS.
The OTS also has extensive enforcement authority over all savings
institutions, including First Robinson. This enforcement authority includes,
among other things, the ability to assess civil money penalties, to issue
cease-and-desist or removal orders and to initiate injunctive actions. In
general, these enforcement actions may be initiated for violations of laws and
regulations and unsafe or unsound practices. Other actions or inactions may
provide the basis for enforcement action, including misleading or untimely
reports filed with the OTS. Except
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under certain circumstances, public disclosure of final enforcement actions by
the OTS is required.
In addition, the investment, lending and branching authority of the
Association is prescribed by federal laws and it is prohibited from engaging in
any activities not permitted by such laws. For instance, no savings institution
may invest in non-investment grade corporate debt securities. In addition, the
permissible level of investment by federal associations in loans secured by
non-residential real property may not exceed 400% of total capital, except with
approval of the OTS. Federal savings associations are also generally authorized
to branch nationwide. The Association is in compliance with the noted
restrictions. Following the Bank Conversion, the national bank will be able to
branch throughout the state of Illinois; however, its interstate branching
authority will be restricted. See "-- Interstate Banking and Branching."
First Robinson's general permissible lending limit for
loans-to-one-borrower is equal to the greater of $500,000 or 15% of unimpaired
capital and surplus (except for loans fully secured by certain readily
marketable collateral, in which case this limit is increased to 25% of
unimpaired capital and surplus). At December 31, 1996, the Association's lending
limit under this restriction was $767,000. Assuming the sale of the minimum
number of shares in the Stock Conversion at December 31, 1996, that limit would
be increased to $1.1 million. The Association is in compliance with the
loans-to-one-borrower limitation. These percentage limitations will continue to
apply to the National Bank following completion of the Bank Conversion.
The OTS, as well as the other federal banking agencies, has adopted
guidelines establishing safety and soundness standards on such matters as loan
underwriting and documentation, internal controls and audit systems, asset
quality, earnings standards, interest rate risk exposure and compensation and
other employee benefits. Any institution which fails to comply with these
standards must submit a compliance plan. A failure to submit a plan or to comply
with an approved plan will subject the institution to further enforcement
action. No assurance can be given as to whether or in what form the proposed
regulations will be adopted. Following completion of the Bank Conversion, the
National Bank will be subject to substantially similar guidelines adopted by the
OCC.
Insurance of Accounts and Regulation by the FDIC
The Association is a member of the SAIF, which is administered by the
FDIC. Deposits are insured up to applicable limits by the FDIC and such
insurance is backed by the full faith and credit of the United States
Government. As insurer, the FDIC imposes deposit insurance premiums and is
authorized to conduct examinations of and to require reporting by FDIC-insured
institutions. It also may prohibit any FDIC-insured institution from engaging in
any activity the FDIC determines by regulation or order to pose a serious risk
to the FDIC. The FDIC also has the authority to initiate enforcement actions
against savings associations, after giving the OTS an opportunity to take such
action, and may terminate the deposit insurance if it determines that the
institution has engaged in unsafe or unsound practices or is in an unsafe or
unsound condition.
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The FDIC's deposit insurance premiums are assessed through a risk-based
system under which all insured depository institutions are placed into one of
nine categories and assessed insurance premiums based upon their level of
capital and supervisory evaluation. Under the system, institutions classified as
well capitalized (i.e., a core capital ratio of at least 5%, a ratio of Tier 1
or core capital to risk-weighted assets ("Tier 1 risk-based capital") of at
least 6% and a risk-based capital ratio of at least 10%) and considered healthy
pay the lowest premium while institutions that are less than adequately
capitalized (i.e., core or Tier 1 risk-based capital ratios of less than 4% or a
risk-based capital ratio of less than 8%) and considered of substantial
supervisory concern pay the highest premium. Risk classification of all insured
institutions will be made by the FDIC for each semi-annual assessment period.
The FDIC is authorized to increase assessment rates, on a semiannual
basis, if it determines that the reserve ratio of the SAIF will be less than the
designated reserve ratio of 1.25% of SAIF insured deposits. In setting these
increased assessments, the FDIC must seek to restore the reserve ratio to that
designated reserve level, or such higher reserve ratio as established by the
FDIC. The FDIC may also impose special assessments on SAIF members to repay
amounts borrowed from the United States Treasury or for any other reason deemed
necessary by the FDIC.
In order to equalize the deposit insurance premium schedules for BIF
and SAIF insured institutions, the FDIC imposed a one-time special assessment on
all SAIF-assessable deposits pursuant to federal legislation passed on September
30, 1996. First Robinson's special assessment, which was $281,000, was paid in
November 1996, but accrued for the fiscal year ended October 31, 1996. Effective
January 1, 1997, the premium schedule for BIF and SAIF insured institutions
ranged from 0 to 27 basis points. However, SAIF-insured institutions are
required to pay a Financing Corporation (FICO) assessment, in order to fund the
interest on bonds issued to resolve thrift failures in the 1980s, equal to 6.48
basis points for each $100 in domestic deposits, while BIF-insured institutions
pay an assessment equal to 1.52 basis points for each $100 in domestic deposits.
The assessment is expected to be reduced to 2.43 no later than January 1, 2000,
when BIF insured institutions fully participate in the assessment. These
assessments, which may be revised based upon the level of BIF and SAIF deposits
will continue until the bonds mature in the year 2017.
The National Bank will be insured by the SAIF following completion of
the Bank Conversion. To the extent it becomes available, the Association may
consider paying an exit fee to the SAIF and an entrance fee to the BIF in order
to convert its insured deposits to the BIF. No prediction can be made at this
time as to whether this option, currently prohibited, may become available.
Regulatory Capital Requirements
Federal Savings Associations. Federally insured savings associations,
such as First Robinson, are required to maintain a minimum level of regulatory
capital. The OTS has established capital standards, including a tangible capital
requirement, a leverage ratio (or core capital) requirement and a risk-based
capital requirement applicable to such savings associations. These capital
requirements must be generally as stringent as the comparable capital
requirements
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for national banks. The OTS is also authorized to impose capital requirements in
excess of these standards on individual associations on a case-by-case basis.
The capital regulations require tangible capital of at least 1.5% of
adjusted total assets (as defined by regulation). Tangible capital generally
includes common stockholders' equity and retained income, and certain
noncumulative perpetual preferred stock and related income. In addition, all
intangible assets, other than a limited amount of purchased mortgage servicing
rights ("PMSRs"), must be deducted from tangible capital for calculating
compliance with the requirement. At December 31, 1996, the Association did not
have any intangible assets.
The OTS regulations establish special capitalization requirements for
savings associations that own subsidiaries. In determining compliance with the
capital requirements, all subsidiaries engaged solely in activities permissible
for national banks or engaged in certain other activities solely as agent for
its customers are "includable" subsidiaries that are consolidated for capital
purposes in proportion to the association's level of ownership. For excludable
subsidiaries the debt and equity investments in such subsidiaries are deducted
from assets and capital. First Robinson had no subsidiaries at December 31,
1996.
At December 31, 1996, the Association had tangible capital of $4.7
million, or 7.0% of adjusted total assets, which is approximately $3.7 million
above the minimum requirement of 1.5% of adjusted total assets in effect on that
date. On a pro forma basis, after giving effect to the sale of the minimum,
midpoint and maximum number of shares of Common Stock offered in the Stock
Conversion and investment of 50% of the net proceeds in assets not excluded for
tangible capital purposes, the Association would have had tangible capital equal
to 10.0%, 10.3% and 10.8%, respectively, of adjusted total assets at December
31, 1996, which is $6.0 million, $6.2 million and $6.6 million, respectively,
above the requirement.
The capital standards also require core capital equal to at least 3% of
adjusted total assets. Core capital generally consists of tangible capital plus
certain intangible assets, including a limited amount of purchased credit card
relationships ("PCCRs"). As a result of the prompt corrective action provisions
discussed below, however, a savings association must maintain a core capital
ratio of at least 4% to be considered adequately capitalized unless its
supervisory condition is such to allow it to maintain a 3% ratio. At December
31, 1996, the Association had no intangibles which were subject to these tests.
At December 31, 1996, the Association had core capital equal to $4.7
million, or 7.0% of adjusted total assets, which is $2.7 million above the
minimum leverage ratio requirement of 3% as in effect on that date. On a pro
forma basis, after giving effect to the sale of the minimum, midpoint and
maximum number of shares of Common Stock offered in the Stock Conversion and
investment of 50% of the net proceeds in assets not excluded from core capital,
the Association would have had core capital equal to 10.0%, 10.3% and 10.8%,
respectively, of adjusted total assets at December 31, 1996, which is $4.9
million, $5.1 million and $5.5 million, respectively, above the requirement.
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The OTS risk-based requirement requires savings associations to have
total capital of at least 8% of risk-weighted assets. Total capital consists of
core capital, as defined above, and supplementary capital. Supplementary capital
consists of certain permanent and maturing capital instruments that do not
qualify as core capital and general valuation loan and lease loss allowances up
to a maximum of 1.25% of risk-weighted assets. Supplementary capital may be used
to satisfy the risk-based requirement only to the extent of core capital. The
OTS is also authorized to require a savings association to maintain an
additional amount of total capital to account for concentration of credit risk
and the risk of non-traditional activities. At December 31, 1996, First Robinson
had no capital instruments that qualify as supplementary capital and $412,000 of
general loss reserves, which was less than 1.25% of risk-weighted assets.
In determining the amount of risk-weighted assets, all assets,
including certain off-balance sheet items, will be multiplied by a risk weight,
ranging from 0% to 100%, based on the risk inherent in the type of asset. For
example, the OTS has assigned a risk weight of 50% for prudently underwritten
permanent one- to four-family first lien mortgage loans not more than 90 days
delinquent and having a loan to value ratio of not more than 80% at origination
unless insured to such ratio by an insurer approved by the FNMA or FHLMC.
The OTS has adopted a final rule that requires every savings
association with more than normal interest rate risk exposure to deduct from its
total capital, for purposes of determining compliance with such requirement, an
amount equal to 50% of its interest-rate risk exposure multiplied by the present
value of its assets. This exposure is a measure of the potential decline in the
net portfolio value of a savings association, greater than 2% of the present
value of its assets, based upon a hypothetical 200 basis point increase or
decrease in interest rates (whichever results in a greater decline). Net
portfolio value is the present value of expected cash flows from assets,
liabilities and off-balance sheet contracts. The rule provides for a two quarter
lag between calculating interest rate risk and recognizing any deduction from
capital. The rule will not become effective until the OTS evaluates the process
by which savings associations may appeal an interest rate risk deduction
determination. It is uncertain as to when this evaluation may be completed. Any
savings association with less than $300 million in assets and a total capital
ratio in excess of 12%, such as the Association, is exempt from this requirement
unless the OTS determines otherwise.
On December 31, 1996, the Association had total capital of $5.1 million
and risk-weighted assets of $49.9 million; or total capital of 10.3% of
risk-weighted assets. This amount was $1.1 million above the 8% requirement in
effect on that date. On a pro forma basis, after giving effect to the sale of
the minimum, midpoint and maximum number of shares of Common Stock offered in
the Stock Conversion, the infusion to the Association of 50% of the net
Conversion proceeds and the investment of those proceeds to 72% risk-weighted
assets, the Association would have had total capital of 14.3%, 14.7% and 15.4%,
respectively, of risk-weighted assets, which is above the current 8% requirement
by $3.3 million, $3.5 million and $3.9 million, respectively.
National Banks. Upon consummation of the Bank Conversion, the National
Bank will no longer be subject to OTS capital regulations, but will be subject
to the capital regulations of the OCC. The OCC's regulations establish two
capital standards for national banks: a leverage
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requirement and a risk-based capital requirement. In addition, the OCC may, on a
case-by-case basis, establish individual minimum capital requirements for a
national bank that vary from the requirements which would otherwise apply under
OCC regulations. A national bank that fails to satisfy the capital requirements
established under the OCC's regulations will be subject to such administrative
action or sanctions as the OCC deems appropriate.
The leverage ratio adopted by the OCC requires a minimum ratio of "Tier
1 capital" to adjusted total assets of 3% for national banks rated composite 1
under the CAMEL rating system for banks. National banks not rated composite 1
under the CAMEL rating system for banks are required to maintain a minimum ratio
of Tier 1 capital to adjusted total assets of 4% to 5%, depending upon the level
and nature of risks of their operations. For purposes of the OCC's leverage
requirement, Tier 1 capital generally consists of the same components as core
capital under the OTS's capital regulations, except that no intangibles except
certain PMSRs and PCCRs may be included in capital.
The risk-based capital requirements established by the OCC's
regulations require national banks to maintain "total capital" equal to at least
8% of total risk-weighted assets. For purposes of the risk-based capital
requirement, "total capital" means Tier 1 capital (as described above) plus
"Tier 2 capital" (as described below), provided that the amount of Tier 2
capital may not exceed the amount of Tier 1 capital, less certain assets. The
components of Tier 2 capital under the OCC's regulations generally correspond to
the components of supplementary capital under OTS regulations. Total
risk-weighted assets generally are determined under the OCC's regulations in the
same manner as under the OTS's regulations. The OCC is also authorized to
require higher levels of capital for an institution in light of its interest
rate risk.
Prompt Corrective Action. The OTS and the FDIC are authorized and,
under certain circumstances required, to take certain actions against savings
associations that fail to meet their capital requirements. The OTS is generally
required to take action to restrict the activities of an "undercapitalized
association" (generally defined to be one with less than either a 4% core
capital ratio, a 4% Tier 1 risked-based capital ratio or an 8% risk-based
capital ratio). Any such association must submit a capital restoration plan and
until such plan is approved by the OTS may not increase its assets, acquire
another institution, establish a branch or engage in any new activities, and
generally may not make capital distributions. The OTS is authorized to impose
the additional restrictions that are applicable to significantly
undercapitalized associations.
Any savings association that fails to comply with its capital plan or
is "significantly undercapitalized" (i.e., Tier 1 risk-based or core capital
ratios of less than 3% or a risk-based capital ratio of less than 6%) must be
made subject to one or more of additional specified actions and operating
restrictions which may cover all aspects of its operations and include a forced
merger or acquisition of the association. An association that becomes
"critically undercapitalized" (i.e., a tangible capital ratio of 2% or less) is
subject to further mandatory restrictions on its activities in addition to those
applicable to significantly undercapitalized associations. In addition, the OTS
must appoint a receiver (or conservator with the concurrence of the FDIC) for a
savings association, with certain limited exceptions, within 90 days after it
becomes critically undercapitalized. Any undercapitalized association is also
subject to the general enforcement authority of the OTS and the FDIC, including
the appointment of a conservator or a receiver.
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The OTS is also generally authorized to reclassify an association into
a lower capital category and impose the restrictions applicable to such category
if the institution is engaged in unsafe or unsound practices or is in an unsafe
or unsound condition.
The imposition by the OTS or the FDIC of any of these measures on First
Robinson may have a substantial adverse effect on the Association's operations
and profitability and the value of the Common Stock purchased in the Stock
Conversion. Such issuance may result in the dilution in the percentage of
ownership of those persons purchasing shares in the Stock Conversion since
shareholders do not have preemptive rights.
Following completion of the Bank Conversion, the OCC will have the
authority to enforce such requirements against the National Bank.
Limitations on Dividends and Other Capital Distributions
Federal Savings Associations. OTS regulations impose various
restrictions or requirements on associations with respect to their ability to
pay dividends or make other distributions of capital. OTS regulations prohibit
an association from declaring or paying any dividends or from repurchasing any
of its stock if, as a result, the regulatory capital of the association would be
reduced below the amount required to be maintained for the liquidation account
established in connection with its mutual to stock conversion. See "The
Conversion-Effects of Conversion to Stock Form on Depositors and Borrowers of
the Association."
The OTS utilizes a three-tiered approach to permit associations, based
on their capital level and supervisory condition, to make capital distributions
which include dividends, stock redemptions or repurchases, cash-out mergers and
other transactions charged to the capital account. See "--Regulatory Capital
Requirements."
Generally, Tier 1 associations, which are associations that before and
after the proposed distribution meet their current capital requirements, may
make capital distributions during any calendar year equal to the greater of 100%
of net income for the year-to-date plus 50% of the amount by which the lesser of
the association's tangible, core or risk-based capital exceeds its fully
phased-in capital requirement for such capital component, as measured at the
beginning of the calendar year, or the amount authorized for a Tier 2
association. However, a Tier 1 association deemed to be in need of more than
normal supervision by the OTS may be downgraded to a Tier 2 or Tier 3
association as a result of such a determination. The Association meets the
requirements for a Tier 1 association and has not been notified of a need for
more than normal supervision. Tier 2 associations, which are associations that
before and after the proposed distribution meet their current minimum capital
requirements, may make capital distributions of up to 75% of net income over the
most recent four quarter period.
Tier 3 associations (which are associations that do not meet current
minimum capital requirements) that propose to make any capital distribution and
Tier 2 associations that propose to make a capital distribution in excess of the
noted safe harbor level must obtain OTS approval prior to making such
distribution. Tier 2 associations proposing to make a capital distribution
within the safe harbor provisions and Tier 1 associations proposing to make any
capital distribution need only submit written notice to the OTS 30 days prior to
such distribution. The
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OTS may object to the distribution during that 30-day period based on safety and
soundness concerns. A savings association may not make a capital distribution
without prior approval of the OTS and the FDIC if it is undercapitalized before,
or as a result of, such a distribution. See "- Regulatory Capital Requirements."
National Banks. Following the Bank Conversion, the National Bank's
ability to pay dividends will not be subject to the limitations in the OTS
regulations but will instead be governed by the National Bank Act and OCC
regulations. Under such statute and regulations, all dividends by a national
bank must be paid out of current or retained net profits, after deducting
reserves for losses and bad debts. The National Bank Act further restricts the
payment of dividends out of net profits by prohibiting a national bank from
declaring a dividend on its shares of common stock until the surplus fund equals
the amount of capital stock or, if the surplus fund does not equal the amount of
capital stock, until one-tenth of the Association's net profits for the
preceding half year in the case of quarterly or semi-annual dividends, or the
preceding two half-year periods in the case of annual dividends, are transferred
to the surplus fund. In addition, the prior approval of the OCC is required for
the payment of a dividend if the total of all dividends declared by a national
bank in any calendar year would exceed the total of its net profits for the year
combined with its net profits for the two preceding years, less any required
transfers to surplus or a fund for the retirement of any preferred stock.
The OCC has the authority to prohibit the payment of dividends by a
national bank when it determines such payment to be an unsafe and unsound
banking practice. In addition, the National Bank would be prohibited by federal
statute and the OCC's prompt corrective action regulations from making any
capital distribution if, after giving effect to the distribution, the National
Bank would be classified as "undercapitalized" under the OCC's regulations. See
"-- Prompt Corrective Action." Finally, the National Bank, like the Converted
Association, would not be able to pay dividends on its capital stock if its
capital would thereby be reduced below the remaining balance of the liquidation
account established in connection with the Stock Conversion.
Liquidity
All savings associations, including First Robinson, are required to
maintain an average daily balance of liquid assets equal to a certain percentage
of the sum of its average daily balance of net withdrawable deposit accounts and
borrowings payable in one year or less. For a discussion of what the Association
includes in liquid assets, see "Management's Discussion and Analysis of
Financial Condition and Results of Operations-Liquidity." This liquid asset
ratio requirement may vary from time to time (between 4% and 10%) depending upon
economic conditions and savings flows of all savings associations. At the
present time, the minimum liquid asset ratio is 5%.
In addition, short-term liquid assets (e.g., cash, certain time
deposits, certain bankers acceptances and short-term United States Treasury
obligations) currently must constitute at least 1% of the association's average
daily balance of net withdrawable deposit accounts and current borrowings.
Penalties may be imposed upon associations for violations of either liquid asset
ratio requirement. At December 31, 1996, the Association was in compliance with
both
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requirements, with an overall liquid asset ratio of 5.2% and a short-term liquid
assets ratio of 3.7%.
National banks are not subject to any prescribed liquidity
requirements.
Accounting
An OTS policy statement applicable to all savings associations
clarifies and re-emphasizes that the investment activities of a savings
association must be in compliance with approved and documented investment
policies and strategies, and must be accounted for in accordance with GAAP.
Under the policy statement, management must support its classification of and
accounting for loans and securities (i.e., whether held for investment, sale or
trading) with appropriate documentation. The Association is in compliance with
these amended rules.
The OTS has adopted an amendment to its accounting regulations, which
may be made more stringent than GAAP by the OTS, to require that transactions be
reported in a manner that best reflects their underlying economic substance and
inherent risk and that financial reports must incorporate any other accounting
regulations or orders prescribed by the OTS.
The National Bank will be subject to similar requirements following
completion of the Bank Conversion.
Qualified Thrift Lender Test
All savings associations, including First Robinson, are required to
meet a qualified thrift lender ("QTL") test to avoid certain restrictions on
their operations. This test requires a savings association to have at least 65%
of its portfolio assets (as defined by regulation) in qualified thrift
investments on a monthly average for nine out of every 12 months on a continuous
basis. Such assets primarily consist of residential housing related loans and
investments. At December 31, 1996, the Association met the test, but has not
always met the test since its effectiveness.
Any savings association that fails to meet the QTL test must convert to
a national bank charter, unless it requalifies as a QTL and thereafter remains a
QTL. If an association does not requalify and converts to a national bank
charter, it must remain SAIF-insured until the FDIC permits it to transfer to
the BIF. If such an association has not yet requalified or converted to a
national bank, its new investments and activities are limited to those
permissible for both a savings association and a national bank, and it is
limited to national bank branching rights in its home state. In addition, the
association is immediately ineligible to receive any new FHLB borrowings and is
subject to national bank limits for payment of dividends. If such association
has not requalified or converted to a national bank within three years after the
failure, it must divest of all investments and cease all activities not
permissible for a national bank. In addition, it must repay promptly any
outstanding FHLB borrowings, which may result in prepayment penalties.
The QTL requirements and the penalties imposed for the failure to
comply will not be applicable to the National Bank.
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Community Reinvestment Act
Under the Community Reinvestment Act ("CRA"), every FDIC insured
institution, including the Association and the National Bank, has a continuing
and affirmative obligation consistent with safe and sound banking practices to
help meet the credit needs of its entire community, including low and moderate
income neighborhoods. The CRA does not establish specific lending requirements
or programs for financial institutions nor does it limit an institution's
discretion to develop the types of products and services that it believes are
best suited to its particular community, consistent with the CRA. The CRA
requires the OTS, in connection with the examination of the Association, to
assess the institution's record of meeting the credit needs of its community and
to take such record into account in its evaluation of certain applications, such
as a merger or the establishment of a branch, by the Association. An
unsatisfactory rating may be used as the basis for the denial of an application
by the OTS.
The federal banking agencies, including the OTS, have recently revised
the CRA regulations and the methodology for determining an institution's
compliance with the CRA. Due to the heightened attention being given to the CRA
in the past few years, the Association may be required to devote additional
funds for investment and lending in its local community. The Association was
examined for CRA compliance in 1996 and received a rating of satisfactory.
Following completion of the Bank Conversion, the National Bank's compliance with
the CRA will be enforced by the OCC.
Transactions with Affiliates
Generally, transactions between a savings association or its
subsidiaries and its affiliates are required to be on terms as favorable to the
association as transactions with non-affiliates. In addition, certain of these
transactions, such as loans to an affiliate, are restricted to a percentage of
the association's capital. Affiliates of First Robinson include any company
which is under common control with the Association. In addition, a savings
association may not lend to any affiliate engaged in activities not permissible
for a bank holding company or acquire the securities of most affiliates.
Subsidiaries of the Association are not deemed affiliates, however; the OTS has
the discretion to treat subsidiaries of savings associations as affiliates on a
case by case basis.
Certain transactions with directors, officers or controlling persons
("Insiders") are also subject to conflict of interest regulations enforced by
the OTS. These conflict of interest regulations and other statutes also impose
restrictions on loans to such persons and their related interests, unless the
loans are made pursuant to an employee benefit program. Among other things, such
loans must be made on terms substantially the same as loans to unaffiliated
individuals. Following completion of the Bank Conversion, the National Bank will
be subject to virtually identical rules on transactions with affiliates and
loans to Insiders.
Federal Reserve System
The FRB requires all depository institutions to maintain non-interest
bearing reserves at specified levels against their transaction accounts
(primarily checking, NOW and Super NOW checking accounts). At December 31, 1996,
the Association was in compliance with these
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reserve requirements. The balances maintained to meet the reserve requirements
imposed by the FRB may be used to satisfy liquidity requirements that may be
imposed by the OTS. See "--Liquidity."
Savings associations are authorized to borrow from the Federal Reserve
Bank "discount window," but FRB regulations require associations to exhaust
other reasonable alternative sources of funds, including FHLB borrowings, before
borrowing from the Federal Reserve Bank.
As a national bank, the National Bank will be required to become a
member of the Federal Reserve System and subscribe for stock in the FRB of St.
Louis in an amount equal to 6% of the National Bank's paid in capital and
surplus (payment for one-half is initially required with the remainder subject
to call by the FRB of St. Louis). The National Bank will continue to be subject
to the reserve requirements to which the Association is presently subject under
FRB regulations.
Holding Company Regulation
The Holding Company will be a unitary savings and loan holding company
subject to regulatory oversight by the OTS. As such, the Holding Company is
required to register and file reports with the OTS and is subject to regulation
and examination by the OTS. In addition, the OTS has enforcement authority over
the Holding Company and its non-savings association subsidiaries which also
permits the OTS to restrict or prohibit activities that are determined to be a
serious risk to the subsidiary savings association.
As a unitary savings and loan holding company, the Holding Company
generally is not subject to activity restrictions. If the Holding Company
acquires control of another savings association as a separate subsidiary, it
would become a multiple savings and loan holding company, and the activities of
the Holding Company and any of its subsidiaries (other than the Bank or any
other SAIF-insured savings association) would become subject to such
restrictions unless such other associations each qualify as a QTL and were
acquired in a supervisory acquisition.
If the Association fails the QTL test, the Holding Company must obtain
the approval of the OTS prior to continuing after such failure, directly or
through its other subsidiaries, any business activity other than those approved
for multiple savings and loan holding companies or their subsidiaries. In
addition, within one year of such failure the Holding Company must register as,
and will become subject to, the restrictions applicable to bank holding
companies. The activities authorized for a bank holding company are more limited
than are the activities authorized for a unitary or multiple savings and loan
holding company. See "- Qualified Thrift Lender Test."
The Holding Company must obtain approval from the OTS before acquiring
control of any other SAIF-insured association. Such acquisitions are generally
prohibited if they result in a multiple savings and loan holding company
controlling savings associations in more than one state. However, such
interstate acquisitions are permitted based on express state statutory
authorization or in a supervisory acquisition of a failing savings association.
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Regulation of the Holding Company Following the Bank Conversion
General. Upon consummation of the Bank Conversion, the Holding Company,
as the sole shareholder of the National Bank, will become a bank holding company
and will register as such with the FRB and deregister with the OTS as a savings
and loan holding company.
Bank holding companies are subject to comprehensive regulation by the
FRB under the BHCA, and the regulations of the FRB. As a bank holding company,
the Holding Company will be required to file reports with the FRB and such
additional information as the FRB may require, and will be subject to regular
examinations by the FRB. The FRB also has extensive enforcement authority over
bank holding companies, including, among other things, the ability to assess
civil money penalties, to issue cease and desist or removal orders and to
require that a holding company divest subsidiaries (including its bank
subsidiaries). In general, enforcement actions may be initiated for violations
of law and regulations and unsafe or unsound practices.
Under FRB policy, a bank holding company must serve as a source of
strength for its subsidiary banks. Under this policy the FRB may require, and
has required in the past, a holding company to contribute additional capital to
an undercapitalized subsidiary bank.
Under the BHCA, a bank holding company must obtain FRB approval before:
(i) acquiring, directly or indirectly, ownership or control of any voting shares
of another bank or bank holding company if, after such acquisition, it would own
or control more than 5% of such shares (unless it already owns or controls the
majority of such shares); (ii) acquiring all or substantially all of the assets
of another bank or bank holding company; or (iii) merging or consolidating with
another bank holding company.
The BHCA also prohibits a bank holding company, with certain
exceptions, from acquiring direct or indirect ownership or control of more than
5% of the voting shares of any company which is not a bank or bank holding
company, or from engaging directly or indirectly in activities other than those
of banking, managing or controlling banks, or providing services for its
subsidiaries. The principal exceptions to these prohibitions involve certain
non-bank activities which, by statute or by FRB regulation or order, have been
identified as activities closely related to the business of banking or managing
or controlling banks. The list of activities permitted by the FRB includes,
among other things, operating a savings institution, mortgage company, finance
company, credit card company or factoring company; performing certain data
processing operations; providing certain investment and financial advice;
underwriting and acting as an insurance agent for certain types of
credit-related insurance; leasing property on a full-payout, non-operating
basis; selling money orders, travelers' checks and United States Savings Bonds;
real estate and personal property appraising; providing tax planning and
preparation services; and, subject to certain limitations, providing securities
brokerage services for customers. The Holding Company has no present plans to
engage in any of these activities.
Interstate Banking and Branching. On September 29, 1994, the
Riegle-Neal Interstate Banking and Branching Act of 1994 (the "Act") was enacted
to ease restrictions on interstate banking. Effective September 29, 1995, the
Act allows the FRB to approve an application of an adequately capitalized and
adequately managed bank holding company to acquire control of, or acquire all or
substantially all of the assets of, a bank located in a state other than such
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holding company's home state, without regard to whether the transaction is
prohibited by the laws of any state. The FRB may not approve the acquisition of
the bank that has not been in existence for the minimum time period (not
exceeding five years) specified by the statutory law of the host state. The Act
also prohibits the FRB from approving an application if the applicant (and its
depository institution affiliates) controls or would control more than 10% of
the insured deposits in the United States or 30% or more of the deposits in the
target bank's home state or in any state in which the target bank maintains a
branch. The Act does not affect the authority of states to limit the percentage
of total insured deposits in the state which may be held or controlled by a bank
or bank holding company to the extent such limitation does not discriminate
against out-of-state banks or bank holding companies. Individual states may also
waive the 30% state-wide concentration limit contained in the Act. The State of
Illinois does not currently have any deposit concentration limits or age
protection for new banks.
Additionally, beginning on June 1, 1997, the federal banking agencies
will be authorized to approve interstate merger transactions without regard to
whether such transaction is prohibited by the law of any state, unless the home
state of one of the banks opts out of the Act by adopting a law after the date
of enactment of the Act and prior to June 1, 1997 which applies equally to all
out-of-state banks and expressly prohibits merger transactions involving
out-of-state banks. Interstate acquisitions of branches will be permitted only
if the law of the state in which the branch is located permits such
acquisitions. Interstate mergers and branch acquisitions will also be subject to
the nationwide and statewide insured deposit concentration amounts described
above. The State of Illinois has authorized interstate merger transactions
effective June 1, 1997.
The Act authorizes the OCC and FDIC to approve interstate branching de
novo by national and state banks, respectively, only in states which
specifically allow for such branching. The Act also requires the appropriate
federal banking agencies to prescribe regulations by June 1, 1997 which prohibit
any out-of-state bank from using the interstate branching authority primarily
for the purpose of deposit production. These regulations must include guidelines
to ensure that interstate branches operated by an out-of-state bank in a host
state are reasonably helping to meet the credit needs of the communities which
they serve.
Dividends. The FRB has issued a policy statement on the payment of cash
dividends by bank holding companies, which expresses the FRB's view that a bank
holding company should pay cash dividends only to the extent that the Holding
Company's net income for the past year is sufficient to cover both the cash
dividends and a rate of earning retention that is consistent with the Holding
Company's capital needs, asset quality and overall financial condition. The FRB
also indicated that it would be inappropriate for a company experiencing serious
financial problems to borrow funds to pay dividends. Furthermore, under the
prompt corrective action regulations adopted by the FRB, the FRB may prohibit a
bank holding company from paying any dividends if the holding company's bank
subsidiary is classified as "undercapitalized". See " -- Regulatory Capital
Requirements -- Prompt Corrective Action."
Bank holding companies are required to give the FRB prior written
notice of any purchase or redemption of its outstanding equity securities if the
gross consideration for the purchase or redemption, when combined with the net
consideration paid for all such purchases or redemptions during the preceding 12
months, is equal to 10% or more of their consolidated net worth. The FRB may
disapprove such a purchase or redemption if it determines that the
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proposal would constitute an unsafe or unsound practice or would violate any
law, regulation, FRB order, or any condition imposed by, or written agreement
with, the FRB. This notification requirement does not apply to any company that
meets the well-capitalized standard for commercial banks, has a safety and
soundness examination rating of at least a "2" and is not subject to any
unresolved supervisory issues.
Capital Requirements. The FRB has established capital requirements for
bank holding companies that generally parallel the capital requirements for
national banks. For bank holding companies with consolidated assets of less than
$150 million, such as the Holding Company, compliance is measured on a bank-only
basis. See "-- Regulatory Capital Requirements National Banks." The Holding
Company's capital following the Conversion will exceed such requirements and be
at the same levels as that of the National Bank.
Federal Home Loan Bank System
The Association is a member of the FHLB of Chicago, which is one of 12
regional FHLBs, that administers the home financing credit function of savings
associations. Each FHLB serves as a reserve or central bank for its members
within its assigned region. It is funded primarily from proceeds derived from
the sale of consolidated obligations of the FHLB System. It makes loans to
members (i.e., advances) in accordance with policies and procedures, established
by the board of directors of the FHLB which are subject to the oversight of the
Federal Housing Finance Board. All advances from the FHLB are required to be
fully secured by sufficient collateral as determined by the FHLB. In addition,
all long-term advances are required to provide funds for residential home
financing.
As a member, the Association is required to purchase and maintain stock
in the FHLB of Chicago. At December 31, 1996, the Association had $264,000 in
FHLB stock, which was in compliance with this requirement. In past years, the
Association has received substantial dividends on its FHLB stock. Over the past
five calendar years such dividends have averaged 6.1% and were 6.8% for calendar
year 1996. The Association currently intends to remain a member of the FHLB
Chicago following completion of the Bank Conversion.
Under federal law the FHLBs are required to provide funds for the
resolution of troubled savings associations and to contribute to low- and
moderately priced housing programs through direct loans or interest subsidies on
advances targeted for community investment and low- and moderate-income housing
projects. These contributions have affected adversely the level of FHLB
dividends paid and could continue to do so in the future. These contributions
could also have an adverse effect on the value of FHLB stock in the future. A
reduction in value of First Robinson's FHLB stock may result in a corresponding
reduction in the Association's capital.
For the fiscal year ended October 31, 1996, dividends paid by the FHLB
of Chicago to the Association totaled $17,000, which constitute a $2,000
increase from over the amount of dividends received in fiscal year 1995.
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Federal and State Taxation
Federal Taxation. Savings associations such as the Association that
meet certain definitional tests relating to the composition of assets and other
conditions prescribed by the Internal Revenue Code of 1986, as amended (the
"Code"), are permitted to establish reserves for bad debts and to make annual
additions thereto which may, within specified formula limits, be taken as a
deduction in computing taxable income for federal income tax purposes. The
amount of the bad debt reserve deduction for "non-qualifying loans" is computed
under the experience method. The amount of the bad debt reserve deduction for
"qualifying real property loans" (generally loans secured by improved real
estate) may be computed under either the experience method or the percentage of
taxable income method (based on an annual election).
Under the experience method, the bad debt reserve deduction is an
amount determined under a formula based generally upon the bad debts actually
sustained by the savings association over a period of years.
Since 1987, the percentage of specially-computed taxable income that
was used to compute a savings association's bad debt reserve deduction under the
percentage of taxable income method (the "percentage bad debt deduction") was
8%. The percentage bad debt deduction thus computed was reduced by the amount
permitted as a deduction for non-qualifying loans under the experience method.
The availability of the percentage of taxable income method permitted qualifying
savings associations to be taxed at a lower effective federal income tax rate
than that applicable to corporations generally (approximately 31.3% assuming the
maximum percentage bad debt deduction). Under changes in federal tax law enacted
in August 1996, the percentage bad debt deduction has been eliminated for tax
years beginning after December 31, 1995. Accordingly, this method will not be
available to the Association for its tax years ending October 31, 1996 and
thereafter.
Under the percentage of taxable income method, the percentage bad debt
deduction could not exceed the amount necessary to increase the balance in the
reserve for qualifying real property loans to an amount equal to 6% of such
loans outstanding at the end of the taxable year or the greater of (i) the
amount deductible under the experience method or (ii) the amount which when
added to the bad debt deduction for non-qualifying loans equals the amount by
which 12% of the amount comprising savings accounts at year-end exceeds the sum
of surplus, undivided profits and reserves at the beginning of the year. Through
October 31, 1996, the 6% and 12% limitations did not restrict the percentage bad
debt deduction available to the Association.
The federal tax legislation enacted in August 1996 also imposes a
requirement to recapture into taxable income the portion of the qualifying and
non-qualifying loan reserves in excess of the "base-year" balances of such
reserves. For the Association, the base-year reserves are the balances as of
October 31, 1988. Recapture of the excess reserves will occur over a six-year
period which could begin for the Association as early as the tax year ending
October 31, 1996 (commencement of the recapture period may be delayed, however,
for up to two years provided the Association meets certain residential lending
requirements). This delay of the recapture is not available to the Association
if it converts to a national bank. The Association previously established, and
will continue to maintain, a deferred tax liability with respect to its federal
tax bad debt reserves in excess of the base-year balances; accordingly, the
legislative changes will have no effect on total income tax expense for
financial reporting purposes.
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Also, under the August 1996 legislation, the Association's base-year
federal tax bad debt reserves are "frozen" and subject to current recapture only
in very limited circumstances. Generally, recapture of all or a portion of the
base-year reserves will be required if the Association pays a dividend in excess
of the greater of its current or accumulated earnings and profits, redeems any
of its stock, or is liquidated. The Association has not established a deferred
federal tax liability under SFAS No. 109 for its base-year federal tax bad debt
reserves, as it does not anticipate engaging in any of the transactions that
would cause such reserves to be recaptured.
In addition to the regular income tax, corporations, including savings
associations such as the Association, generally are subject to a minimum tax. An
alternative minimum tax is imposed at a minimum tax rate of 20% on alternative
minimum taxable income, which is the sum of a corporation's regular taxable
income (with certain adjustments) and tax preference items, less any available
exemption. The alternative minimum tax is imposed to the extent it exceeds the
corporation's regular income tax and net operating losses can offset no more
than 90% of alternative minimum taxable income. For taxable years beginning
after 1986 and before 1996, corporations, including savings associations such as
the Association, are also subject to an environmental tax equal to 0.12% of the
excess of alternative minimum taxable income for the taxable year (determined
without regard to net operating losses and the deduction for the environmental
tax) over $2 million.
The Association files federal income tax returns on a fiscal year basis
using the accrual method of accounting.
The Association has not been audited by the IRS recently with respect
to federal income tax returns. In the opinion of management, any examination of
still open returns would not result in a deficiency which could have a material
adverse effect on the financial condition of the Association.
Illinois Taxation. For Illinois income tax purposes, the Association is
taxed at an effective rate equal to 7.18% of Illinois taxable income. For these
purposes, "Illinois Taxable Income" generally means federal taxable income,
subject to certain adjustments (including the addition of interest income on
state and municipal obligations and the exclusion of interest income on United
States Treasury obligations). The exclusion of income on United States Treasury
obligations has had the effect of eliminating Illinois taxable income for the
Association.
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MANAGEMENT
Directors and Executive Officers of the Holding Company
The Board of Directors of the Holding Company currently consists of six
members, each of whom is also a director of the Association. See "Management -
Directors of the Association." Each Director of the Holding Company has served
as such since the Holding Company's incorporation in March 1997. Directors of
the Holding Company will serve three-year staggered terms so that approximately
one-third of the directors will be elected at each annual meeting of
stockholders. The terms of the current directors of the Holding Company are the
same as their terms as directors of the Association. The Holding Company may
consider paying fees to directors. See "- Directors of the Association."
The executive officers of the Holding Company are elected annually and
hold office until their respective successor has been elected and qualified or
until death, resignation or removal by the Board of Directors. The executive
officers of the Holding Company, who have held their positions since March 1997,
are set forth below.
Name Title
- ------------------- ------------------------------------------------
Rick L. Catt Director, President and Chief Executive Officer
Jamie E. McReynolds Vice President, Chief Financial Officer and
Secretary
It is not anticipated that the executive officers of the Holding
Company will receive any remuneration in their capacity as Holding Company
executive officers. For information regarding compensation of directors and
executive officers of the Association, see "Compensation and Meetings of the
Board of Directors of the Association" and "- Executive Compensation."
Committees of the Holding Company
The Holding Company formed standing Audit and Nominating Committees in
connection with its organization in March 1997. The Holding Company committees
did not meet during fiscal 1996 or for the two months ended December 31, 1996.
The Audit Committee will review audit reports and related matters to
ensure effective compliance with regulations and internal policies and
procedures. This committee also will act on the recommendation by management of
an accounting firm to perform the Holding Company's annual audit and acts as a
liaison between the auditors and the Board. The current members of this
committee are Directors Pulliam, Thomas, Inboden and Catt.
The Nominating Committee will meet annually in order to nominate
candidates for membership on the Board of Directors. This committee is comprised
of the Board members who are not up for election.
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Indemnification
The Certificate of Incorporation of the Holding Company provides that a
director or officer of the Holding Company shall be indemnified by the Holding
Company to the fullest extent authorized by the Delaware General Corporation Law
against all expenses, liability and loss reasonably incurred or suffered by such
person in connection with his activities as a director or officer or as a
director or officer of another company, if the director or officer held such
position at the request of the Holding Company. Delaware law requires that such
director, officer, employee or agent, in order to be indemnified, must have
acted in good faith and in a manner reasonably believed to be not opposed to the
best interests of the Holding Company and, with respect to any criminal action
or proceeding, either had reasonable cause to believe such conduct was lawful or
did not have reasonable cause to believe his conduct was unlawful.
The Certificate of Incorporation and Delaware law also provide that the
indemnification provisions of such Certificate and the statute are not exclusive
of any other right which a person seeking indemnification may have or later
acquire under any statute, provision of the Certificate of Incorporation, Bylaws
of the Holding Company, agreement, vote of stockholders or disinterested
directors or otherwise.
These provisions may have the effect of deterring shareholder
derivative actions, since the Holding Company may ultimately be responsible for
expenses for both parties to the action.
A similar effect would not be expected for third-party claims.
In addition, the Certificate of Incorporation and Delaware law also
provide that the Holding Company may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Holding
Company or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the Holding
Company has the power to indemnify such person against such expense, liability
or loss under the Delaware General Corporation Law. The Holding Company intends
to obtain such insurance.
Directors of the Association
Upon completion of the Bank Conversion, each of the directors of the
Association will continue to serve as a director of the converted Bank. The
Board of Directors of the Association currently consists of six directors. The
directors are divided into three classes. Approximately one-third of the
directors are elected at each annual meeting of stockholders. Because the
Holding Company will own all of the issued and outstanding shares of capital
stock of the National Bank after the Bank Conversion, directors of the Holding
Company will elect the directors of the National Bank.
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Term of
Director Office
Name Age(1) Position(s) Held Since Expires
- ---- ------ ---------------- -------- -------
James D. Goodwine 34 Director 1993 1998
Scott F. Pulliam 39 Chairman of the Board 1985 1999
Clell T. Keller 72 Director 1984 1999
William K. Thomas 51 Director 1988 1999
Donald K. Inboden 64 Director 1990 2000
Rick L. Catt 44 Director, President and 1989 2000
Chief Executive Officer
- ----------
(1) At December 31, 1996.
The business experience of each director is set forth below. All
directors have held their present positions for at least the past five years,
except as otherwise indicated.
James D. Goodwine. Mr. Goodwine is a funeral Director and Vice
President of Goodwine Funeral Homes, Inc., a position he has held since 1986.
Scott F. Pulliam. Since 1983, Mr. Pulliam has practiced as a public
accountant in the Robinson, Illinois area.
Clell T. Keller. Mr. Keller is currently retired. From 1976 to his
retirement, Mr. Keller was the Clerk of the Circuit Court in Crawford County,
Illinois.
William K. Thomas. Since 1976, Mr. Thomas has practiced as an attorney
in the Robinson, Illinois area.
Donald K. Inboden. Mr. Inboden is currently retired. From 1955 to his
retirement, Mr. Inboden was employed in the refinery at Marathon Oil Company.
Rick L. Catt. Mr. Catt is President and Chief Executive Officer of the
Association, a position he has held since 1989.
Executive Officer Who are not Directors
Each of the executive officers of the Association will retain his or
her office following the Conversion. Officers are elected annually by the Board
of Directors of the Association. The business experience of the executive
officers who are not also directors is set forth below.
Jamie E. McReynolds. Ms. McReynolds, age 32, currently serves as a Vice
President, Chief Financial Officer, and Secretary. Ms. McReynolds has been
employed by the Association, in various capacities since 1986.
Leslie Trotter, III. Mr. Trotter, age 41, currently serves as a Vice
President and Treasurer. Mr. Trotter has been employed by the Association since
1978.
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Rita L. Elder. Ms. Elder, age 44, currently serves as a Vice President.
Ms. Elder has been employed by the Association, in various capacities, since
1985.
William D. Sandiford. Mr. Sandiford, age 39, currently serves as a Vice
President and Senior Loan Officer, a position he has held since 1995. From 1992
to 1995, Mr. Sandiford served as a vice president/branch manager of a national
bank located in Robinson, Illinois.
Meetings and Committees of the Board of Directors
The Association's Board of Directors meets at least monthly. During the
fiscal year ended October 31, 1996, the Board of Directors held 13 meetings. No
director attended fewer than 75% of the total meetings of the Board of Directors
and committees on which such Board member served during this period.
The Association has standing Loan, Building, Nominating, Audit,
Personnel and Investment Committees.
The Loan Committee is comprised of all directors. It meets on an as
needed basis to review loan requests in excess of $150,000. This committee met
28 times during fiscal 1996.
The Building Committee is responsible for overseeing the Association's
building, grounds, maintenance, repairs and the like. It is composed of
Directors Catt, Inboden and Goodwine. This committee met three times during
fiscal 1996.
The Nominating Committee, composed of Directors Keller, Pulliam and
Thomas, nominate individuals for election to the Association's Board of
Directors. This committee met once during fiscal 1996.
The Audit Committee, composed of Directors Pulliam, Thomas, Inboden and
Catt, review and receive audit findings from the Association's internal and
external auditors. This committee met five times in fiscal 1996.
The Personnel Committee, composed of Directors Keller, Pulliam and
Catt, review personnel evaluations and recommend salary adjustments to the
entire Board of Directors. This committee met 14 times in fiscal 1996.
The Investment Committee, composed of Director Catt and Vice Presidents
McReynolds and Sandiford, review the purchase and sale of investments. This
committee met once in fiscal 1996.
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Director Compensation
Each non-employee director is currently paid a fee of $375 for each
regular meeting attended, except for the Chairman of the Board who is paid $405
for each regular meeting attended. Non-employee directors receive committee fees
of $50 for each meeting attended, except for the Loan Committee participants who
receive a fee of $300 per month reduced by $100 for each missed meeting.
Employee directors do not receive fees for participation on any committees.
Executive Compensation
The following table sets forth information concerning the compensation
paid or granted to the Bank's Chief Executive Officer and each executive officer
who made in excess of $100,000 during fiscal 1996. No executive officer of the
Holding Company received cash compensation in excess of $100,000 in fiscal 1996.
<TABLE>
<CAPTION>
Summary Compensation Table
------------------------------------------------------------------------------------
Long-Term Compensation
Annual Compensation Awards
------------------------------------- -----------------------
Restricted
Name and Principal Other Annual Stock Options/ All Other
Position Year(1) Salary($) Bonus($) Compensation($) Award($) SARs(#) Compensation($)(2)
- ------------------- ------- --------- -------- --------------- --------- ------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Rick L. Catt 1996 $80,102 $10,218 $--- $ --- ---/--- $20,146
President, Chief
Executive Officer
and Director
- ------------------
<FN>
(1) In accordance with the revised rules on executive officer and director
compensation disclosure adopted by the Securities and Exchange
Commission, Summary Compensation information is excluded for the years
ended October 31, 1995 and 1994, as the Association was not a public
company during such periods.
(2) Includes $2,146 of life, health and disability premiums paid by the
Association, $14,000 one-time contribution by the Association to Mr.
Catt's Director Retirement Plan account, $2,731 paid by the Association
in discretionary contributions pursuant to the Association's 401(k)
Plan, country club dues of $1,160 and Rotary Club dues of $109.
</FN>
</TABLE>
Benefit Plans
General. First Robinson currently provides insurance benefits to its
employees, including health, life, long-term disability and major medical
insurance, subject to certain deductibles and copayments by employees.
Directors Retirement Plan. The Association maintains a Directors
Retirement Plan for the benefit of the members of the Board of Directors of the
Association. Under the terms of the Directors Retirement Plan, the Association
established a trust, the trustees of which are Directors Goodwine, Thomas and
Pulliam, with an initial principal of $94,000. The Directors Retirement Plan
provided for a one-time contribution of $2,000 per year for each director's past
service to the Association, future contributions of $2,000 per year for each
director, and a discretionary annual contribution for each director using
performance standards similar to those used under the Association's existing
401(k) plan. Each directors account will include a rate of return equal to the
highest rate paid on the Association's one year or less certificates of deposit.
Future annual contributions will be made to each director as of January 1st of
each year starting with January 1, 1998. See Note J to the Consolidated
Financial Statements.
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Employee Stock Ownership Plan. The Boards of Directors of First
Robinson and the Holding Company have approved the adoption of an ESOP for the
benefit of employees of First Robinson. The ESOP is designed to meet the
requirements of an employee stock ownership plan as described at Section
4975(e)(7) of the Code and Section 407(d)(6) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), and, as such, the ESOP is empowered
to borrow in order to finance purchases of the Holding Company's Common Stock.
It is anticipated that the ESOP will be capitalized with a loan from
the Holding Company. The proceeds from this loan are expected to be used by the
ESOP to purchase up to 8.0% of the Common Stock issued in the Stock Conversion.
In addition, recently adopted OTS regulations generally limit the use of a 8.0%
ESOP to institutions with tangible capital ratios of 10% of the adjusted total
assets that receive prior OTS approval of such plan. In the event the
Association's ratio of tangible capital to adjusted total assets does not exceed
10%, the funding of the Association's ESOP may be limited to 7.0% of the shares
sold in the Stock Conversion. After the Stock Conversion, as a qualified
employee pension plan under Section 401(a) of the Code, the ESOP will be in the
form of a stock bonus plan and will provide for contributions, predominantly in
the form of either the Holding Company's Common Stock or cash, which will be
used within a reasonable period after the date of contributions primarily to
purchase Holding Company Common Stock. The Association will receive a tax
deduction equal to the amount it contributes to the ESOP, subject to the
limitations set forth in the Code. The maximum tax-deductible contribution by
the Association in any year is an amount equal to the maximum amount that may be
deducted by the Association under Section 404 of the Code, subject to reduction
based on contributions to other Tax-Qualified Employee Plans. Additionally, the
Association will not make contributions if such contributions would cause the
Association to violate its regulatory capital requirements. The assets of the
ESOP will be invested primarily in Holding Company Common Stock.
From time to time, the ESOP may purchase additional shares of Common
Stock for the benefit of plan participants through purchases of outstanding
shares in the market, upon the original issuance of additional shares by the
Holding Company or upon the sale of shares held in treasury by the Holding
Company. Such purchases, which are not currently contemplated, would be subject
to then-applicable laws, regulations and market conditions.
Generally accepted accounting principles require that any borrowing by
the ESOP be reflected as a liability in the Holding Company's consolidated
financial statements, whether or not such borrowing is guaranteed by, or
constitutes a legally binding contribution commitment of the Holding Company or
the Association. In addition, shares purchased with borrowed funds will, to the
extent of the borrowings, be excluded from stockholders' equity, representing
unearned compensation to employees for future services not yet performed.
Consequently, if the ESOP purchases already-issued shares in the open market,
the Holding Company's consolidated liabilities will increase to the extent of
the ESOP's borrowings, and total and per share stockholders' equity will be
reduced to reflect such borrowings. If the ESOP purchases newly issued shares
from the Holding Company, total stockholders' equity would neither increase nor
decrease, but per share stockholders' equity and per share net income would
decrease because of the increase in the number of outstanding shares. In either
case, as the borrowings used to fund ESOP purchases are repaid, total
stockholders' equity will correspondingly increase.
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All employees of the Association are eligible to participate in the
ESOP after they attain age 21 and complete one year of service during which they
work at least 1,000 hours. Employees will be credited for years of service to
the Association prior to the adoption of the ESOP for participation and vesting
purposes. The Association's contribution to the ESOP is allocated among
participants on the basis of compensation. Each participant's account will be
credited with cash and shares of Holding Company Common Stock based upon
compensation earned during the year with respect to which the contribution is
made. After completing five years of service, a participant will be 100% vested
in his or her ESOP account. ESOP participants are entitled to receive
distributions from their ESOP accounts only upon termination of service.
Distribution will be made in cash and in whole shares of Holding Company Common
Stock. Fractional shares will be paid in cash. Participants will not incur a tax
liability until a distribution is made.
Participating employees are entitled to instruct the trustee of the
ESOP as to how to vote the shares held in their account. The trustee, who has
dispositive power over the shares in the Plan, will not be affiliated with the
Holding Company or First Robinson. The ESOP may be amended by the Board of
Directors of the Holding Company, except that no amendment may be made which
would reduce the interest of any participant in the ESOP trust fund or divert
any of the assets of the ESOP trust fund to purposes other than the benefit of
participants or their beneficiaries.
In addition to the above-described benefit plan, in the future, the
Holding Company may consider the implementation of a stock option plan and RRP.
It is not anticipated, however, that such plan or plans will be implemented
earlier than one year after the completion of the Stock Conversion. If a
determination is made to implement a stock option plan or RRP, it is anticipated
that any such plans will be submitted to stockholders for their consideration at
which time stockholders would be provided with detailed information regarding
such plan. If such plans are approved, they may have a dilutive effect on the
Holding Company's stockholders as well as effect the Holding Company's net
income and stockholders' equity; although such effects cannot be determined
until such plans are implemented. See "Summary - Benefits of Stock Conversion to
Directors and Executive Officers."
Indebtedness of Management
The Association has followed a policy of granting loans to officers and
directors. Loans to directors and executive officers are made in the ordinary
course of business and on the same terms and conditions as those of comparable
transactions with the general public prevailing at the time, in accordance with
the Association's underwriting guidelines, and do not involve more than the
normal risk of collectibility or present other unfavorable features.
All loans by the Association to its directors and executive officers
are subject to OTS regulations restricting loan and other transactions with
affiliated persons of the Association. Federal law currently requires that all
loans to directors and executive officers be made on terms and conditions
comparable to those for similar transactions with non-affiliates. Loans to all
directors and executive officers and their associates totaled $220,000 at
December 31, 1996, which was 3.0% of the Bank's equity capital at that date,
assuming completion of the Stock Conversion at the midpoint of the Estimated
Valuation Range. All loans to directors and executive officers were performing
in accordance with their terms at December 31, 1996.
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THE CONVERSION
The Board of Directors of First Robinson and the OTS have approved the
Plan of Conversion. OTS approval does not constitute a recommendation or
endorsement by the OTS of the Plan of Conversion. Certain terms used in the
following summary are defined in the Plan of Conversion, a copy of which may be
obtained by contacting First Robinson.
General
On November 12, 1996, the Board of Directors of First Robinson
unanimously adopted the Plan, subject to approval by the OTS and the members of
the Association. Pursuant to the Plan, the Association is to be converted from a
federal mutual savings and loan association to a federal stock savings and loan
association and subsequently to a national bank. The OTS has approved the Plan,
subject to its approval by the affirmative vote of the members of the
Association holding not less than a majority of the total number of votes
eligible to be cast at a special meeting called for that purpose (the "Special
Meeting"), to be held on ________, 1997.
The Stock Conversion will be accomplished through amendment of the
Association's federal charter to authorize the issuance of capital stock at
which time the Association will become a wholly owned subsidiary of the Holding
Company. Following consummation of the Stock Conversion, the Board of Directors
of the Association intends to effectuate the Bank Conversion by converting the
Converted Association to the National Bank. Upon completion of the Bank
Conversion, the National Bank will be a wholly owned subsidiary of the Holding
Company.
The Holding Company has received approval from the OTS to become the
holding company of the Converted Association subject to the satisfaction of
certain conditions and to acquire all of the common stock of the Converted
Association to be issued in the Stock Conversion in exchange for at least 50% of
the net proceeds form the sale of Common Stock in the Stock Conversion. The
Stock Conversion will be effected only upon completion of the sale of the shares
of Common Stock to be issued by the Holding Company pursuant to the Plan. The
Association has applied to the OTS and the OCC for approval of the conversion of
the Converted Association to a national bank, and the Holding Company has
applied to the FRB for approval of the Holding Company's continued ownership of
100% of the stock of the National Bank following the Bank Conversion. Such
approvals have not been received to date, and there can be no assurance that
such approval will be received. If such approvals are not received, the Bank
Conversion will not occur. See "Risk Factors -- Potential Delay in Completion or
Denial of Bank Conversion."
The Plan provides that the Board of Directors of the Association may,
at any time, elect not to proceed with the Bank Conversion. It is the present
intent of the Association's Board of Directors to proceed with both the Stock
Conversion and the Bank Conversion.
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Subscription Rights are being offered to the Eligible Account Holders
as of October 31, 1995, Tax Qualified Employee Plans of the Association,
Supplemental Eligible Account Holders as of March 31, 1997, Other Members, and
officers, directors and employees of the Association, with a preference within
each category given to natural persons residing in the Association's Local
Community. Additionally, members of the general public are being afforded the
opportunity to subscribe for Holding Company Common Stock in a direct Community
Offering, with a preference to natural persons who reside in the Association's
Local Community, See "Offering of Holding Company Common Stock." Subscriptions
for shares will be subject to the maximum and minimum purchase limitations set
forth in the Plan of Conversion.
Business Purposes
The Association's Board of Directors has undertaken the Bank Conversion
to allow the Association more flexibility in its lines of business. The
Association's lending activities can be more effectively developed if the
Association operated under regulatory requirements applicable to a national bank
rather than a federally chartered savings association. See "Regulation."
The Association's Board of Directors has formed the Holding Company to
serve upon consummation of the Stock Conversion as a holding company with the
Converted Association (and, following the Bank Conversion, the National Bank) as
its subsidiary. The portion of the net proceeds from the sale of the Common
Stock in the Stock Conversion to be distributed to the Converted Association
(and the National Bank) by the Holding Company will substantially increase the
Converted Association's (and the National Bank's) capital position which will in
turn increase the amount of funds available for lending and investment and
provide greater resources to support both current operations and future
expansion by the National Bank, although there are no current agreements or
understandings for such expansion. The holding company structure will provide
greater flexibility than the Association alone would have for diversification of
business activities and geographic expansion. Management believes that this
increased capital and operating flexibility will enable the National Bank to
compete more effectively with other types of financial services organizations.
In addition, the Conversion will also enhance the future access of the Holding
Company and the National Bank to the capital markets.
The potential impact of Stock Conversion upon the Association's capital
base is significant. The Association had retained earnings in accordance with
generally accepted accounting principles of $4.7 million, or 7.0% of assets, at
December 31, 1996. Assuming approximately $6.5 million (based on the sale of
650,000 shares of Common Stock at the midpoint of the Estimated Valuation Range)
of net proceeds are realized from the sale of the Common Stock, and after
deducting amounts necessary to fund the ESOP, the Holding Company's consolidated
stockholders' equity would have been approximately $10.3 million as of December
31, 1996. The Converted Association's ratio of tangible capital to adjusted
total assets would increase to at least 10.3% after the Stock Conversion. See
"Pro Forma Regulatory Capital Compliance." The investment of the net proceeds
from the sale of the Common Stock will provide the Converted Association with
additional income to further increase its capital position. The additional
capital may also assist the Converted Association (and the National Bank) in
offering new programs and expanded services to its customers.
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After completion of the Stock Conversion, the unissued Common Stock and
preferred stock authorized by the Holding Company's Certificate of Incorporation
will permit the Holding Company, subject to market conditions, to raise
additional equity capital through further sales of securities and to issue
securities in connection with possible acquisitions. At the present time, the
Holding Company has no plans with respect to additional offerings of securities.
Effects of Conversion to Stock Form on Depositors and Borrowers
of the Association
Voting Rights. Deposit account holders and certain borrowers will have
no voting rights in the converted Association, the National Bank or the Holding
Company, and will therefore not be able to elect directors of either entity or
to control their affairs. Subsequent to the Conversion, voting rights as to the
Association or the National Bank will be held exclusively by the Holding
Company. Voting rights as to the Holding Company will be held exclusively by its
Stockholders. Each purchaser of Holding Company Common Stock shall be entitled
to vote on any matters to be considered by the Holding Company's stockholders. A
stockholder will be entitled to one vote for each share of Common Stock owned,
subject to certain limitations applicable to holders of 10% or more of the
shares of the Common Stock. See "Description of Capital Stock." The Holding
Company intends to supply each stockholder with annual reports and proxy
statements.
Deposit Accounts and Loans. The general terms of the Association's
deposit accounts, the balances of the individual accounts and the existing FDIC
insurance coverage will not be affected by the Conversion. Furthermore, the
Conversion will not affect the loan accounts, the balances of these accounts, or
the obligations of the borrowers under their individual contractual arrangements
with the Association.
Tax Effects. The Association has received an opinion from Silver,
Freedman & Taff, L.L.P. with regard to federal income taxation, and an opinion
of Larsson, Woodyard & Henson LLP with regard to Illinois taxation, to the
effect that the adoption and implementation of the Stock Conversion set forth
herein will not be taxable for federal or Illinois tax purposes to the
Association. See "- Income Tax Consequences."
Liquidation Rights. Neither the Association nor the Converted
Association has any plan to liquidate. However, if there should ever be a
complete liquidation, either before or after Conversion, deposit account holders
would receive the protection of insurance by the FDIC up to applicable limits.
Subject thereto, liquidation rights before and after the Stock Conversion would
be as follows:
Liquidation Rights in Present Mutual Association. In addition to the
protection of SAIF insurance up to applicable limits, in the event of a complete
liquidation each holder of a deposit account in the Association in its present
mutual form would receive his or her pro rata share of any assets of the
Association remaining after payment of claims of all creditors (including the
claims of all depositors in the amount of the withdrawal value of their
accounts). Such holder's pro rata share of such remaining assets, if any, would
be in the same proportion of such assets as the balance in his or her deposit
account was to the aggregate balance in all deposit accounts in the Association
at the time of liquidation.
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Liquidation Rights in Proposed Converted Association. After the Stock
Conversion each deposit account holder, in the event of a complete liquidation,
would have a claim of the same general priority as the claims of all other
general creditors of the Association in addition to the protection of SAIF
insurance up to applicable limits. Therefore, except as described below, the
deposit account holder's claim would be solely in the amount of the balance in
his or her deposit account plus accrued interest. The holder would have no
interest in the value of the Association above that amount.
The Plan of Conversion provides that there shall be established, upon
the completion of the Stock Conversion, a special "liquidation account" for the
benefit of Eligible Account Holders and Supplemental Eligible Account Holders
(i.e., depositors at October 31, 1995 and March 31, 1997, respectively) in an
amount equal to the regulatory capital of the Association as of the date of its
latest consolidated statement of financial condition contained in the final
Prospectus relating to the sales of shares of First Robinson Common Stock in the
Stock Conversion. Each Eligible Account Holder and Supplemental Eligible Account
Holder would have an initial interest in such liquidation account for each
deposit account held in the Association on the qualifying date. An Eligible
Account Holder or Supplement Eligible Account Holder's interest as to each
deposit account would be in the same proportion of the total liquidation account
as the balance in his or her account on October 31, 1995 and March 31, 1997,
respectively, was to the aggregate balance in all deposit accounts of Eligible
Account Holders and Supplemental Eligible Account Holders on such date. However,
if an Eligible Account Holder or Supplemental Eligible Account Holders should
withdraw funds from a deposit account to purchase shares of Common Stock in the
Stock Conversion or otherwise reduce the amount in the deposit account on any
annual closing date of the Association to a level less than the lowest amount in
such account on October 31, 1995 or March 31, 1997, respectively, and on any
subsequent closing date, then the account holder's interest in this special
liquidation account would be reduced by an amount proportionate to any such
reduction, and the account holder's interest would cease to exist if such
deposit account were closed.
In addition, the interest in the special liquidation account would
never be increased despite any increase in the balance of the account holders'
related accounts after Conversion, and would only decrease.
Any assets remaining after the above liquidation rights of Eligible
Account Holders and Supplemental Eligible Account Holders were satisfied would
be distributed to the Holding Company as the sole stockholder of the
Association.
No merger, consolidation, purchase of bulk assets with assumption of
deposit accounts and other liabilities, or similar transaction, whether the
Association, as converted, or another SAIF-insured institution is the surviving
institution, is deemed to be a complete liquidation for purposes of distribution
of the liquidation account and, in any such transaction, the liquidation account
would be assumed to the full extent authorized by regulations of the OTS as then
in effect. The OTS has stated that the consummation of a transaction of the type
described in the preceding sentence in which the surviving entity is not a
SAIF-insured institution would be reviewed on a case-by-case basis to determine
whether the transaction should constitute a "complete liquidation" requiring
distribution of any then remaining balance in the liquidation account. While the
Association believes that such a transaction should not constitute a complete
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liquidation, there can be no assurance that the OTS will not adopt a contrary
position and, in such event, that the Association's position will be determined
to be correct.
The Bank Conversion shall not be deemed to be a complete liquidation of
the Converted Association for purposes of the distribution of the liquidation
account. Upon consummation of the Bank Conversion, the liquidation account, and
all rights and obligations of the Converted Association in connection therewith,
shall be assumed by the National Bank.
Common Stock. For information as to the characteristics of the Common
Stock to be issued under the Plan of Conversion, see "Dividends" and
"Description of Capital Stock." Common Stock issued under the Plan of Conversion
cannot, and will not, be insured by the FDIC or any other government agency.
The Association will continue, immediately after completion of the
Stock Conversion, to provide its services to depositors and borrowers pursuant
to its existing policies and will maintain the existing management and employees
of the Association. Other than for payment of expenses incident to the
Conversion, no assets of the Association will be distributed in the Stock
Conversion. First Robinson will continue to be a member of the FHLB System, and
its deposit accounts will continue to be insured by the FDIC. The affairs of the
Association will continue to be directed by the existing Board of Directors and
management.
Offering of Holding Company Common Stock
Under the Plan of Conversion, up to 747,500 shares of Holding Company
Common Stock will be offered for sale, subject to certain restrictions described
below through a Subscription and Community Offering.
The Subscription and Community Offering will expire at _:__ _.m.
Robinson, Illinois time, on ________, 1997 (the "Subscription Expiration Date")
unless extended by the Association and the Holding Company. Regulations of the
OTS require that all shares to be offered in the Stock Conversion be sold within
a period ending not more than 45 days after the Subscription Expiration Date (or
such longer period as may be approved by the OTS) or, despite approval of the
Plan of Conversion by members, the Conversion will not be effected and First
Robinson will remain in mutual form. This period expires on ________, 1997,
unless extended with the approval of the OTS. If the Subscription and Community
Offering is extended beyond __________, 1997, all subscribers will have the
right to modify or rescind their subscriptions and to have their subscription
funds returned promptly with interest. In the event of such an extension, all
subscribers will be notified in writing of the time period within which the
subscriber must notify the Association of his intention to modify or rescind his
subscription. In the event that a subscriber does not respond in any manner to
the Association's notice, the funds submitted by the subscriber will be refunded
to the subscriber with interest at the rate of 3.0% per annum and/or the
subscriber's withdrawal authorizations will be terminated. In the event that the
Stock Conversion is not effected, all funds submitted and not previously
refunded pursuant to the Subscription and Community Offering will be promptly
refunded to subscribers with interest at the rate of 3.0% per annum, and all
withdrawal authorizations will be terminated.
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In accordance with OTS regulations, nontransferable Subscription Rights
have been granted under the Plan of Conversion to the following persons in the
following order of priority: (1) Eligible Account Holders (deposit account
holders of the Association maintaining a Qualifying Deposit as of October 31,
1995), (2) Tax Qualified Employee Plans; provided, however, that the Tax
Qualified Employee Plans shall have first priority Subscription Rights to the
extent that the total number of shares of Common Stock sold in the Conversion
exceeds the maximum of the Estimated Valuation Range, (3) Supplemental Eligible
Account Holders (deposit account holders of the Association maintaining a
Qualifying Deposit as of March 31, 1997); (4) Other Members of the Association
(depositors of the Association other than Eligible Account Holders and
Supplemental Eligible Account Holders, and certain borrower members of the
Association as of March 20, 1990 and __________, 1997 who continue to be
borrowers as of the date of the Special Meeting) and (5) officers, directors and
employees of the Association. In addition, members of the general public not
otherwise included in categories 1-5 above ("Other Subscribers") will be
afforded an opportunity to subscribe for shares of First Robinson Common Stock
being offered in the Conversion. All subscriptions received will be subject to
the availability of First Robinson Common Stock after satisfaction of all
subscriptions of all persons having prior rights in the Subscription and
Community Offering, and to the maximum and minimum purchase limitations set
forth in the Plan of Conversion. The preference categories are more fully
described below.
Category No. 1 is reserved for the Association's Eligible Account
Holders. Subscription Rights to purchase shares under this category will be
allocated among Eligible Account Holders to permit each such depositor to
purchase shares in an amount equal to the greater of $65,000 of Common Stock
offered in the Stock Conversion, one-tenth of one percent (.10%) of the total
shares of Common Stock offered in the Stock Conversion, or 15 times the product
(rounded down to the next whole number) obtained by multiplying the total number
of shares of Common Stock to be issued by a fraction of which the numerator is
the amount of the qualifying deposit of the Eligible Account Holder and the
denominator is the total amount of the qualifying deposit of the Eligible
Account Holders in the converting Association in each case on October 31, 1995
(the "Eligibility Record Date"); if sufficient shares are not available, shares
shall be allocated first to permit each subscribing Eligible Account Holder to
purchase to the extent possible 100 shares, and thereafter among each
subscribing Eligible Account Holder pro rata in the same proportion that his
Qualifying Deposit bears to the total Qualifying Deposits of all subscribing
Eligible Account Holders whose subscriptions remain unsatisfied.
Category No. 2 provides for the issuance of Subscription Rights to Tax
Qualified Employee Plans (other than that portion of such plans that is self
directed) to purchase up to 10% of the total shares issued in the Subscription
Offering on a first priority basis. However, such plans shall not, in the
aggregate, purchase more than 10% of the Holding Company Common Stock issued. It
is currently intended that the ESOP will purchase 8% of the shares of Common
Stock issued in the Stock Conversion. Subscription Rights received pursuant to
this category shall be subordinated to all rights received by Eligible Account
Holders to purchase shares pursuant to Category No. 1; provided, however, that
notwithstanding any provision of the Plan of Conversion to the contrary, the Tax
Qualified Employee Plans shall have first priority Subscription Rights to the
extent that the total number of shares of Common Stock sold in the Stock
Conversion exceeds the maximum of the Estimated Valuation Range.
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Category No. 3 is reserved for the Association's Supplemental Eligible
Account Holders. Subscription Rights to purchase shares under this category will
be allocated among Supplemental Eligible Account Holders to purchase shares in
an amount equal to the greater of $65,000 of Common Stock offered in the Stock
Conversion, one-tenth of one percent (.10%) of the total shares of Common Stock
offered in the Stock Conversion, or 15 times the product (rounded down to the
next whole number) obtained by multiplying the total number of shares of Common
Stock to be issued by a fraction of which the numerator is the amount of the
qualifying deposit of the Supplemental Eligible Account Holder and the
denominator is the total amount of the qualifying deposit of the Supplemental
Eligible Account Holders in the converting Association in each case on March 31,
1997 (the "Supplemental Eligibility Record Date"), subject to the overall
purchase limitation after satisfying the subscriptions of Tax Qualified Employee
Plans. In the event of an oversubscription for shares, the shares available
shall be allocated first to permit each subscribing Supplemental Eligible
Account Holder, to the extent possible, to purchase a number of shares
sufficient to make his total allocation (including the number of shares, if any,
allocated in accordance with Category No. 1) equal to 100 shares, and thereafter
among each subscribing Supplemental Eligible Account Holder pro rata in the same
proportion that his Qualifying Deposit bears to the total Qualifying Deposits of
all subscribing Supplemental Eligible Account Holders whose subscriptions remain
unsatisfied.
Category No. 4 provides, to the extent that shares are then available
after satisfying the subscriptions of Eligible Account Holders, Tax Qualified
Employee Plans and Supplemental Eligible Account Holders, for the issuance of
Subscription Rights to each such Other Member to purchase shares in an amount
equal to the greater of $65,000 of Common Stock offered in the Stock Conversion
or one-tenth of one percent (.10%) of the total offering of shares offered in
the Stock Conversion based on the Estimated Valuation Range subject to the
overall purchase limitation and to the extent Common Stock is available. The
shares available shall be allocated among the subscribing Other Members pro rata
in the same proportion that his number of votes on the Voting Record Date bears
to the total number of votes on the Voting Record Date of all subscribing Other
Members on such date.
Category No. 5 provides for the issuance of Subscription Rights to
officers, directors and employees of the Association, to purchase up to a
maximum of $65,000 individually of the shares of Common Stock offered in the
Stock Conversion to the extent that shares are available after satisfying the
subscriptions of eligible subscribers in preference Categories 1, 2, 3 and 4. In
the event of an oversubscription, the available shares will be allocated pro
rata among all subscribers in this Category.
In addition, Other Subscribers to whom this Prospectus is delivered may
each subscribe for up to $65,000 of Common Stock offered in the Stock
Conversion, to the extent that shares remain available for purchase after
satisfaction of all subscriptions under preference Categories 1 through 5.
Finally, depending upon market conditions, the shares may be offered for sale to
Other Subscribers in a Community Offering to the general public. The price at
which the shares are sold in the Community Offering will be the same as the
price in the Subscription and Community Offering. If the Other Subscribers
subscribe for more shares than are available for purchase, the available shares
will be allocated (to the extent shares remain available) first to cover any
reservation of shares for a public offering or institutional orders, next to
cover orders of natural persons, then to cover the orders of any other person
subscribing for shares in the
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Community Offering so that each such person may receive 1,000 shares, and
thereafter, on a pro rata basis to such persons based on the amount of their
respective subscriptions.
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 (October 31,
1995), Supplemental Eligible Record Date (March 31, 1997) and members on the
Voting Record Date (_________, 1997) must list all accounts on the stock order
form giving all names in each account and the account number as
of the applicable record date.
The Plan also provides for certain additional limitations to be placed
upon the purchase of shares in the Stock Conversion. Specifically, no person by
himself or herself or with an associate, and no group of persons acting in
concert may subscribe for or purchase more than $100,000 of Common Stock offered
in the Stock Conversion based on the Estimated Valuation Range (as calculated
without giving effect to any increase in the Estimated Valuation Range after the
date hereof) without regard to an increase in the number of shares to be issued.
Officers and directors and their associates may not purchase, in the aggregate,
more than 34% of the shares to be sold in the Stock Conversion. For purposes of
the Plan, the members of the Board of Directors are not deemed to be acting in
concert solely by reason of their Board membership. For purposes of this
limitation, an associate of a person does not include a Tax-Qualified Employee
Plan or Non-Tax Qualified Employee Plan. Also, for purposes of this limitation,
an associate of an officer or director does not include a Tax-Qualified Employee
Plan. Moreover, any shares attributable to the officers and directors and their
associates, but held by a Tax-Qualified Employee Plan (other than that portion
of a plan which is self-directed) shall not be included in calculating the
number of shares which may be purchased under the limitations in this paragraph.
Shares purchased by employees who are not officers or directors of the
Association, or their associates, are not subject to this limitation. The term
"associate" is used above to indicate any of the following relationships with a
person: (i) any corporation or organization (other than the Holding Company or
the Association or a majority-owned subsidiary of the Holding Company or the
Association) of which a person is an officer or partner or is, directly or
indirectly, the beneficial owner of 10% or more of any class of equity security;
(ii) any trust or other estate in which such person has a substantial beneficial
interest or as to which such person serves as trustee or in a similar fiduciary
capacity; and (iii) any relative or spouse of such person or any relative of
such spouse who has the same home as such person or who is a director or officer
of the Holding Company or the Association or any subsidiary of the Holding
Company or the Association.
The Boards of Directors of the Holding Company and the Association may,
in their sole discretion, decrease the maximum purchase limit referred above or
increase the maximum purchase limitation up to 9.99% of the shares being offered
in the Subscription and Community Offering, provided that orders for shares
exceeding 5.0% of the shares being offered in the Subscription and Community
Offering shall not exceed, in the aggregate, 10% of the shares being offered in
the Subscription and Community Offering. Requests to purchase additional shares
of Holding Company Common Stock under this provision will be allocated by the
Boards of Directors on a pro rata basis giving priority in accordance with the
priority rights set forth above. Depending upon market and financial conditions,
and subject to certain regulatory limitations, the Boards of Directors of the
Holding Company and the Association, with the
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approval of the OTS and without further approval of the members, may increase or
decrease any of the above purchase limitations at any time. To the extent that
shares are available, each subscriber must subscribe for a minimum of 25 shares.
In computing the number of shares to be allocated, all numbers will be rounded
down to the next whole number.
Common Stock purchased in the Stock Conversion will be freely
transferable except for shares purchased by executive officers and directors of
the Association or the Holding Company and except as described below. See "-
Restrictions on Transferability." In addition, under National Association of
Securities Dealers, Inc. ("NASD") guidelines, members of the NASD and their
associates are subject to certain restrictions on transfer of securities
purchased in accordance with Subscription Rights and to certain reporting
requirements upon purchase of such securities.
The Association and the Holding Company will make reasonable efforts to
comply with the securities laws of all states in the United States in which
persons entitled to subscribe for shares pursuant to the Plan of Conversion
reside. However, no shares will be offered or sold under the Plan of Conversion
to any such person who (1) resides in a foreign country or (2) resides in a
state of the United States in which a small number of persons otherwise eligible
to subscribe for shares under the Plan of Conversion reside or as to which the
Association and the Holding Company determine that compliance with the
securities laws of such state would be impracticable for reasons of cost or
otherwise, including, but not limited to, a requirement that the Association or
the Holding Company or any of their officers, directors or employees register,
under the securities laws of such state, as a broker, dealer, salesman or agent.
No payments will be made in lieu of the granting of Subscription Rights to any
such person.
Marketing Arrangements
First Robinson and the Holding Company have retained Trident
Securities, which is a broker-dealer registered with the Securities and Exchange
Commission and a member of the NASD, to act as selling agent and to advise and
consult with respect to the distribution of shares in the Subscription and
Community Offering. Trident Securities has no obligation to purchase the
Conversion Stock. Trident Securities will assist First Robinson and the Holding
Company in the Subscription and Community Offering with respect to, but not
limited to, the following: (1) training and educating First Robinson's employees
regarding the mechanics and regulatory requirements of the Stock Conversion and
offering process; (2) conducting informational meetings for subscribers and
other potential purchasers; (3) keeping records of all stock subscriptions; (4)
organizing and staffing the Stock Information Center; and (5) otherwise
assisting in the sale of stock in the Subscription and Community Offering. For
their services, Trident Securities will receive (i) a fee of 1.70% of the
aggregate dollar amount of stock sold in the Subscription and Community
Offering, excluding purchases by directors, officers, employees and their
immediate family members, and employee stock ownership and benefit plans to
investors who reside in Crawford County, Illinois; (ii) a fee of 1.45% of the
aggregate dollar amount of stock sold in the Subscription and Community
Offering, excluding purchases by directors, officers, employees and their
immediate family members, and employee stock ownership and benefit plans to
investors who reside within the State of Illinois but outside Crawford County,
Illinois; (iii) a fee of .95% of the aggregate dollar amount of stock sold in
the Subscription and Community Offering, excluding purchases by directors,
officers, employees
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and their immediate family members, and employee stock ownership and benefit
plans to investors who reside outside the State of Illinois; (iv) reasonable
out-of-pocket expenses; and (iii) fees and expenses for Trident Securities'
counsel (not to exceed $30,000). For purposes of calculating Trident Securities
fee, it is assumed that the amount of stock sold in the Conversion will not
exceed the midpoint of the appraisal value of the Holding Company. Trident
Securities are under no obligation to purchase any shares of Common Stock in the
Conversion.
The Holding Company has agreed to indemnify Trident Securities against
certain claims or liabilities, including certain liabilities under the
Securities Act of 1933, as amended, including indemnification for damages
arising from material misstatements or material omissions based upon information
supplied by the Holding Company or the Association.
In addition, directors and executive officers of the Holding Company
and the Association, may to a limited extent, participate in the solicitation of
offers to purchase Common Stock. Other employees of the Association may
participate in the Subscription and Community Offering in administrative
capacities, providing clerical work in effecting a sales transaction or
answering questions of a potential purchaser provided that the content of the
employee's responses is limited to information contained in the Prospectus or
other offering document. Other questions of prospective purchasers will be
directed to registered representatives. Such other employees have been
instructed not to solicit offers to purchase Common Stock or provide advice
regarding the purchase of Common Stock. Sales of Common Stock by directors,
executive officers and registered representatives will be made from the Stock
Information Center. The Holding Company will rely on Rule 3a4-1 under the
Exchange Act, and sales of Common Stock will be conducted within the
requirements of Rule 3a4-1, so as to permit officers, directors and employees to
participate in the sale of Common Stock. No officer, director or employee of the
Holding Company or Association will be compensated in connection with his
participation by the payment of commissions or other remuneration based either
directly or indirectly on the transactions in the Common Stock.
Stock Pricing and Number of Shares to be Issued
Federal regulations require that the aggregate purchase price of the
securities of a thrift institution sold in connection with its conversion must
be based on an appraised aggregate market value of the institution as converted
(i.e., taking into account the expected receipt of proceeds from the sale of the
securities in the conversion), as determined by an independent valuation.
Ferguson & Company, which is experienced in the valuation and appraisal of
business entities, including thrift institutions involved in the conversion
process, was retained by First Robinson to prepare an appraisal of the estimated
pro forma market value of the Common Stock.
The Appraiser will receive a fee of approximately $25,000 for its
appraisal plus its reasonable out-of-pocket expenses incurred in connection with
the appraisal. The Association has agreed to indemnify the Appraiser under
certain circumstances against liabilities and expenses (including legal fees)
arising out of, related to, or based upon the Conversion.
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The Appraiser has prepared an appraisal of the estimated pro forma
market value of the Common Stock converted taking into account market conditions
for initial public offerings of thrift stocks and the formation of the Holding
Company as the holding company for the Association. The appraisal concluded
that, at March 4, 1997, an appropriate range for the estimated pro forma market
value of the Common Stock was from a minimum of $5,525,000 to a maximum of
$7,475,000, with a midpoint of $6,500,000. Assuming that the shares are sold at
$10.00 per share in the Stock Conversion, the estimated number of shares to be
issued in the Stock Conversion is expected to be between 552,500 and 747,500.
The Purchase Price of $10.00 was determined by discussion between the Boards of
Directors of the Holding Company, the Association and the Appraiser, taking into
account, among other factors, the requirement under OTS regulations that the
Common Stock be offered in a manner that will achieve the widest distribution of
the stock, and the liquidity in the Common Stock subsequent to the Stock
Conversion.
The appraisal involved a comparative evaluation of the operating and
financial statistics of First Robinson with those of other thrift institutions.
The appraisal also took into account such other factors as the market for thrift
institution stocks generally, prevailing economic conditions, both nationally
and in Illinois, which affect the operations of thrift institutions, the
competitive environment within which the Association operates, the effect of the
Association becoming a subsidiary of the Holding Company, and the effect of the
Association becoming a national bank. No detailed individual analysis of the
components of the Holding Company's or the Association's assets and liabilities
was performed in connection with the evaluation. The Plan of Conversion requires
that all of the shares subscribed for in the Subscription and Community Offering
be sold at the same price per share. The Board of Directors reviewed the
appraisal, including the methodology and the appropriateness of the assumptions
utilized by the Appraiser, and determined that in its opinion, the appraisal was
not unreasonable.
No sale of the shares will take place unless, prior thereto, the
Appraiser confirms to the OTS that, to the best of the Appraiser's knowledge and
judgment, nothing of a material nature has occurred which would cause the
Appraiser 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
Common Stock at the time of the sale. If, however, the facts do not justify such
a statement, a new Estimated Valuation Range and price per share may be set.
Under such circumstances, the Holding Company will be required to resolicit, and
subscribers would have the right to modify or rescind their subscriptions and to
have their subscription funds returned promptly with interest and holds on funds
authorized for withdrawal from deposit accounts would be released or reduced;
provided that if the pro forma market value of the Association upon conversion
has not decreased below $5,525,000 or increased to an amount which does not
exceed $8,596,250 (15% above the maximum of the Estimated Valuation Range), the
Holding Company and the Association do not intend to resolicit subscriptions
unless it is determined after consultation with the OTS that a resolicitation is
required.
Depending upon market and financial conditions, the number of shares
issued may be more or less than the range in number of shares shown above. A
change in the number of shares to be issued in the Stock Conversion will not
affect subscription rights, which are based on the shares being offered in the
Subscription Offering. In the event of an increase in the maximum number of
shares being offered, persons who exercise their maximum subscription
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rights will be notified of such increase and of their right to purchase
additional shares. Conversely, in the event of a decrease in the maximum number
of shares being offered, persons who exercise their maximum subscription rights
will be notified of such decrease and of the concomitant reduction in the number
of shares for which subscriptions may be made. A decrease in the number of
shares to be issued in the Stock Conversion would increase a purchaser's
ownership interest and both pro forma net income and net worth on a per share
basis while decreasing these amounts on an aggregate basis. In the event of a
resolicitation, subscribers will be afforded the opportunity to increase,
decrease or maintain their previously submitted order. In the event a new
valuation range is established by the Appraiser, such new range will be subject
to approval by the OTS and the Holding Company will be required to resolicit.
The Holding Company will also be required to resolicit if the price per share is
changed such that the total aggregate Purchase Price is not within the minimum
and 15% above the maximum of the Estimated Valuation Range.
If purchasers can not be found for an insignificant residue of
unsubscribed shares from the general public, other purchase arrangements will be
made by the Boards of Directors of the Holding Company and the Association, if
possible. Such other purchase arrangements will be subject to the approval of
the OTS and may provide for purchases by directors, officers, their associates
and other persons in excess of the limitations provided below. If such other
purchase arrangements cannot be made, the Subscription and Community Offering
will terminate.
In preparing its valuation of the pro forma market value of the Holding
Company Common Stock, the Appraiser relied upon and assumed the accuracy and
completeness of all financial and statistical information provided by the
Association and the Holding Company. The Appraiser also considered information
based upon other publicly available sources which it believes are reliable.
However, the Appraiser does not guarantee the accuracy and completeness of such
information and did not independently verify the financial statements and other
data provided by the Association and the Holding Company or independently value
the assets or liabilities of the Association and the Holding Company. The
valuation by the Appraiser is not intended and must not be construed as a
recommendation of any kind as to the advisability of voting to approve the Stock
Conversion or of purchasing shares of Common Stock. Moreover, because the
valuation is necessarily based upon estimates of and projections as to a number
of matters (including certain assumptions as to expense factors affecting the
net proceeds from the sale of Common Stock in the Stock Conversion and as to the
net earnings on such net proceeds), all of which are subject to change from time
to time, no assurance can be given that persons who purchase such shares in the
Stock Conversion will be able to sell such shares thereafter at or above the
Purchase Price.
Method of Payment for Subscriptions
Subscribers must, before the Subscription Expiration Date, or such date
to which the Subscription Expiration Date may be extended, return an original
order form and certification to the Association, properly completed, together
with checks or money orders in an amount equal to the Purchase Price ($10.00 per
share) multiplied by the number of shares for which subscription is made. No
cash, wire transfer orders or payments by third party checks will be accepted.
Payment for stock purchases can also be accomplished through authorization on
the order form of withdrawals from accounts with the Association without
incurring a penalty. Until
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completion or termination of the Stock Conversion, subscribers who elect to make
payment through authorization of withdrawal from accounts with the Association
will not be permitted to reduce the deposit balance in any such accounts below
the amount required to purchase the shares for which they subscribed. In such
cases interest will continue to be credited at the existing account rate on
deposits authorized for withdrawal until the completion of the Stock Conversion.
Interest at 3.0% per annum will be paid on amounts submitted by check, bank
draft or money order. Authorized withdrawals from certificate accounts for the
purchase of Common Stock will be permitted without the imposition of early
withdrawal penalties or loss of interest. However, withdrawals from certificate
accounts that reduce the balance of said accounts below the required minimum for
specific interest rate qualification will cause the cancellation of the
certificate accounts, and the remaining balance will earn interest at the
passbook savings account rate. Stock subscriptions received by the Association
may not be modified, withdrawn or canceled by the subscriber without the consent
of the Association and, if accepted by the Association, are final. Subscriptions
which are not received by the expiration date or are not in compliance with the
Plan of Conversion or the order form instructions may be deemed void by the
Association. Checks returned for non-payment may be considered void and may
result in an invalid order.
The beneficiaries of IRA accounts are deemed to have the same
subscription rights as other depositors. However, the IRA accounts maintained at
the Association do not permit investment in Common Stock. A depositor interested
in using his IRA funds to purchase Common Stock must do so through a
self-directed IRA account. Since the Association does not offer such accounts,
it will allow such a depositor to make a trustee to trustee transfer of the IRA
on deposit at the Association. There will be no early withdrawal or IRS
penalties for such transfers. The new trustee would hold the Common Stock in a
self-directed account in the same manner as the Association now holds the
depositor's IRA funds. An annual administrative fee might be payable to the new
trustee. The Association assumes no responsibility as to the selection of, or
services performed by, a new trustee.
Depositors interested in transferring IRA funds on deposit at the
Association to purchase Common Stock should contact the Stock Information Center
at (618) 544-5800 as soon as possible so that the necessary forms may be
forwarded for execution and returned prior to the Expiration Date of the
Subscription Offering.
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 Securities
Exchange Act of 1934, as amended, 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 Association will accept for processing only orders submitted on
original order forms. Payment by check, money order, bank draft or debit
authorization to an existing account at the Association must accompany the order
form.
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Risk of Delayed Offering
In the event that all shares of the Common Stock are not sold in the
Subscription Offering and concurrent Community Offering, First Robinson and the
Holding Company will extend the Community Offering for a period of up to 45 days
from the date of the termination of the Subscription Offering. Further
extensions are subject to OTS approval and may be granted for successive
periods, but not beyond 24 months from the date of the Special Meeting.
A material delay in the completion of the sale of all unsubscribed
shares in the Community Offering may result in a significant increase in the
costs in completing the Stock Conversion. Significant changes in First
Robinson's operations and financial condition, the aggregate market value of the
shares to be issued in the Stock Conversion and general market conditions may
occur during such material delay. In the event the Stock Conversion is not
consummated within 24 months after the date of the Special Meeting of Members,
First Robinson would charge accrued Conversion costs to then current period
operations.
Approval, Interpretation, Amendment and Termination
All interpretations of the Plan of Conversion, as well as the
completeness and validity of order forms, will be made by First Robinson and the
Holding Company and will be final, subject to the authority of the OTS and the
requirements of applicable law. The Plan of Conversion provides that, if deemed
necessary or desirable by the Boards of Directors of the Association and the
Holding Company, the Plan of Conversion may be substantively amended (including
an amendment to eliminate the formation of the Holding Company as part of the
Stock Conversion) by the Boards of Directors of the Association and the Holding
Company, as a result of comments from regulatory authorities or otherwise, at
any time but only with the concurrence of the OTS. Moreover, if the Plan of
Conversion is amended, subscriptions which have been received prior to such
amendment will not be refunded unless otherwise required by the OTS.
In the event that a decision is made to eliminate the Holding Company
as part of the Stock Conversion, the Holding Company will withdraw its
registration statement from the SEC, its holding company application with the
OTS on Form H-(e)1-S and with the FRB on Form Y- 3, and the Association will
take all steps necessary to complete the Stock Conversion and the Bank
Conversion without the Holding Company, including filing any necessary documents
with the OTS. In such event, and provided there is no regulatory action,
directive or other consideration upon which basis the Association determines not
to complete the Stock Conversion, if permitted by the OTS the Association will
issue and sell the common stock of the Association and subscribers will be
notified of the elimination of the Holding Company and resolicited (i.e.,
permitted to affirm their orders, in which case they will need affirmatively to
reconfirm their subscriptions prior to the expiration of the resolicitation
offering or their funds will be promptly refunded with interest at the
Association's current passbook rate per annum; or be permitted to modify or
rescind their subscriptions) and notified of the time period within which they
must affirmatively notify the Association of their intention to affirm, modify
or rescind their subscription. In the event that a holding company form of
organization is not used, all other pertinent terms of the Plan as described in
"- Offering of Holding Company Common Stock" will apply to the Stock Conversion
of the Association from the mutual to stock form of
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organization and the sale of the Association's common stock, as well as the
subsequent charter conversion of the Converted Association to the National Bank.
The Plan of Conversion will terminate if the sale of all shares is not
completed within 24 months after the date of the Special Meeting of Members. The
Plan of Conversion may be terminated by the Board of Directors of the
Association with the concurrence of the OTS, at any time. A specific resolution
approved by a two-thirds vote of the Board of Directors would be required to
terminate the Plan of Conversion prior to the end of such 24-month period.
Restrictions on Repurchase of Stock
For a period of three years following the Stock Conversion, the Holding
Company may not repurchase any shares of its capital stock, except in the case
of an offer to repurchase on a pro rata basis made to all holders of capital
stock of the Holding Company. Any such offer shall be subject to the prior
approval of the OTS. Furthermore, the Holding Company may not repurchase any of
its stock (i) if the result thereof would be to reduce the regulatory capital of
the Association below the amount required for the liquidation account to be
established pursuant to OTS regulations and (ii) except in compliance with the
requirements of the OTS' capital distribution rule.
The above limitations are subject to the OTS conversion rules which
generally provide that the Holding Company may repurchase its capital stock
provided (i) no repurchases occur within one year following the Stock Conversion
(except with OTS approval), (ii) repurchases during the second and third year
after conversion are part of an open market stock repurchase program that does
not allow for a repurchase of more than 5% of the Holding Company's outstanding
capital stock during a 12-month period, (iii) the repurchases do not cause the
Association to become undercapitalized, and (iv) the Holding Company provides
notice or an application to the OTS at least 10 days prior to the commencement
of a repurchase program and the OTS does not object. In addition, the above
limitations do not preclude repurchases of capital stock by the Holding Company
in the event applicable federal regulatory limitations are subsequently
liberalized or become inapplicable.
Restrictions on Transferability
The Subscription Rights described in this Prospectus are
non-transferable. Prior to the completion of the Stock Conversion, federal
regulations prohibit any person from transferring or entering into any agreement
or understanding to transfer the legal or beneficial ownership of the
subscription rights issued under the Plan or the shares of Common Stock to be
issued upon their exercise. Persons violating such prohibition may lose their
right to purchase stock in the Stock Conversion and may be subject to sanctions
by the OTS. Each person exercising subscription rights will be required to
certify that a purchase of Common Stock is solely for the purchaser's own
account and that there is no agreement or understanding regarding the sale or
transfer of such shares. The Association and the Holding Company will pursue any
and all legal and equitable remedies in the event it becomes aware of the
transfer of subscription rights and will not honor orders known by it to involve
the transfer of such rights.
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Except as to directors and executive officers of the Association and
the Holding Company, the shares of Common Stock sold in the Stock Conversion
will be freely transferable. Shares purchased by directors and executive
officers in the Stock Conversion shall be subject to the restrictions that such
shares shall not be sold during the period of one year following the date of
purchase, except in the event of the death of the stockholder, in which event
such restriction shall be released. Accordingly, stock certificates issued by
the Holding Company to directors and executive officers shall bear a legend
giving appropriate notice of such 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 applicable restriction upon transfer
of any restricted shares. Any shares issued at a later date as a stock dividend,
stock split or otherwise, to holders of restricted stock, shall be subject to
the same restrictions that may apply to such restricted stock. Holding Company
stock is subject to the requirements of the Securities Act. Accordingly, Holding
Company stock may be offered and sold only in compliance with such registration
requirements or pursuant to an applicable exemption from registration.
OTS regulations provide that for a period of three years following the
Stock Conversion, without prior approval of the OTS, neither directors and
officers of the Holding Company, the Association nor their associates may
purchase shares of the Holding Company, except from a broker registered with the
SEC. This restriction does not, however, apply to negotiated transactions
involving more than one percent of the Holding Company's outstanding Common
Stock or the purchase of stock made by or held by any one or more employee stock
benefit plans which may be attributable to individual directors or officers.
Holding Company stock received in the Stock Conversion by persons who
are not "affiliates" of the Holding Company may be resold without registration.
Shares received by affiliates of the Holding Company (primarily the directors,
officers and principal stockholders of the Holding Company) will be subject to
the resale restrictions of Rule 144 under the Securities Act, which are
discussed below. Rule 144 generally requires that there be publicly available
certain information concerning the Holding Company, and that sales thereunder be
made in routine brokerage transactions or through a market maker. If the
conditions of Rule 144 are satisfied, each affiliate (or group of persons acting
in concert with one or more affiliates) is entitled to sell in the public
market, without registration, in any three-month period, a number of shares
which does not exceed the greater of (i) 1% of the number of outstanding shares
of Holding Company stock, or (ii) if the stock is admitted to trading on a
national securities exchange or reported through the automated quotation system
of a registered securities association the average weekly reported volume of
trading during the four weeks preceding the sale.
Income Tax Consequences
Consummation of the Stock Conversion is expressly conditioned upon
prior receipt by the Association of either a ruling from the IRS or an opinion
of Silver, Freedman & Taff, L.L.P. with respect to federal taxation, and a
ruling of the Illinois taxation authorities or an opinion of Larsson, Woodyard &
Henson LLP with respect to Illinois taxation, to the effect that consummation of
the Stock Conversion will not be taxable to the Converted Association or the
Holding Company.
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An opinion has been received from Silver, Freedman & Taff, L.L.P. with
respect to the proposed Stock Conversion of the Association, to the effect that
(i) the Stock Conversion will qualify as a reorganization under Section
368(a)(1)(F) of the Internal Revenue Code of 1986, as amended, and no gain or
loss will be recognized to the Association in either its mutual form or its
stock form by reason of the proposed Stock Conversion, (ii) no gain or loss will
be recognized to the Association upon the receipt of money from the Holding
Company for Common Stock of the Holding Company, (iii) the assets of the
Association in either its mutual or its stock form will have the same basis
before and after the Stock Conversion, (iv) the holding period of the assets of
the Association will include the period during which the assets were held by the
Association in its mutual form prior to the Stock Conversion, (v) gain, if any,
will be realized by the depositors of the Association, upon the constructive
issuance to them of withdrawable deposit accounts of the Association immediately
after the proposed Stock Conversion, interests in the Liquidation Account, and
on the receipt or distribution to them of the nontransferable subscription
rights to purchase Holding Company Common Stock (any such gain will be
recognized by such account holder, but only in an amount not in excess of the
fair market value of the subscription rights and Liquidation Account interests
received), (vi) the basis of the account holder's savings accounts in the
Association after the Stock Conversion will be the same as the basis of his or
her savings accounts in the Association prior to the Stock Conversion, decreased
by the fair market value of the nontransferable subscription rights received and
increased by the amount, if any, of gain recognized on the exchange, (vii) the
basis of each account holder's interest in the Liquidation Account will be zero,
(viii) the basis of the Holding Company Common Stock to its shareholders will be
the Purchase Price thereof plus, in the case of stock acquired by account
holders, the basis, if any in the Subscription Rights and a shareholder's
holding period for Holding Company Common Stock acquired through the exercise of
Subscription Rights shall begin on the date on which the Subscription Rights are
exercised, (ix) the Association will succeed to and take into account the
earnings and profits or deficit in earnings and profits, of the Association, in
its mutual form, as of the date of the Stock Conversion, (x) the Association,
immediately after the Stock Conversion, will succeed to the bad debt reserve
accounts of the Association, in mutual form, and the bad debt reserves will have
the same character in the hands of the Association after the Stock Conversion as
if no distribution or transfer had occurred, and (xi) the creation of the
Liquidation Account will have no effect on the Association's taxable income,
deductions or addition to reserve for bad debts either in its mutual or stock
form.
The opinion from Silver, Freedman & Taff, L.L.P. is based, among other
things, on certain representations made by the Association and the Holding
Company to Silver, Freedman & Taff, L.L.P., including the representation that
the exercise price of the subscription rights to purchase Holding Company Common
Stock will be approximately equal to the fair market value of that stock at the
time of the completion of the proposed Stock Conversion. With respect to the
Subscription Rights, the Association will receive an opinion of the Appraiser
(the "Appraiser Opinion") which, based on certain assumptions, will conclude
that the Subscription Rights to be received by Eligible Account Holders and
other eligible subscribers do not have any economic value at the time of
distribution or at the time the Subscription Rights are exercised, whether or
not a public offering takes place.
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The Association has also received an opinion of Silver, Freedman &
Taff, L.L.P. to the effect that, based in part on the Appraiser Opinion and on
certain representations made by the Association and the Holding Company, among
other things: (i) no taxable income will be realized by depositors as a result
of the exercise of non-transferable subscription rights to purchase shares of
Holding Company Common Stock at fair market value; (ii) no taxable income will
be recognized by the Tax Qualified Employee Plans, borrowers, directors,
officers and employees of the Association on the receipt or exercise of
subscription rights to purchase shares of Holding Company Common Stock at fair
market value; and (iii) no taxable income will be realized by the Association or
the Holding Company on the issuance of Subscription Rights to eligible
subscribers to purchase shares of Holding Company Common Stock at fair market
value.
If it is subsequently established that the Subscription Rights received
by such persons have an ascertainable fair market value, or in the case of
directors and officers are compensatory in nature, then, in such event, the
Subscription Rights will be taxable to the recipient in the amount of their fair
market value. In this regard, the Subscription Rights may be taxed partially or
entirely at ordinary income tax rates.
With respect to Illinois taxation, the Association has received an
opinion of Larsson, Woodyard & Henson LLP to the effect that, assuming the Stock
Conversion does not result in any federal taxable income, gain or loss to the
Association in its mutual or stock form, the account holders, borrowers,
officers, directors and employees and Tax Qualified Employee Plans of the
Association, the Stock Conversion should not result in any Illinois income tax
liability to such entities or persons.
Unlike a private letter ruling, the opinion of Silver, Freedman & Taff,
L.L.P. and Larsson, Woodyard & Henson LLP as well as the Appraiser Opinion, have
no binding effect or official status, and no assurance can be given that the
conclusions reached in any of those opinions would be sustained by a court if
contested by the IRS or the Illinois tax authorities.
RESTRICTIONS ON ACQUISITIONS OF STOCK AND
RELATED TAKEOVER DEFENSIVE PROVISIONS
Although the Boards of Directors of First Robinson and the Holding
Company are not aware of any effort that might be made to obtain control of the
Holding Company after the Conversion, the Boards of Directors, as discussed
below, believe that it is appropriate to include certain provisions as part of
the Holding Company's certificate of incorporation to protect the interests of
the Holding Company and its stockholders from takeovers which the Board of
Directors of the Holding Company might conclude are not in the best interests of
the Association, the National Bank, the Holding Company or the Holding Company's
stockholders.
The following discussion is a general summary of the material
provisions of the Holding Company's certificate of incorporation and bylaws and
certain other regulatory provisions which may be deemed to have an
"anti-takeover" effect. The following description of certain of these provisions
is necessarily general and, with respect to provisions contained in the Holding
Company's certificate of incorporation and bylaws, the Association's proposed
stock charter and
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bylaws and the National Bank's proposed articles and bylaws, reference should be
made in each case to the document in question, each of which is part of the
Association's application to the OTS and the OCC, and the Holding Company's
Registration Statement filed with the SEC and holding company application filed
with the FRB. See "Additional Information."
Provisions of the Holding Company's Certificate of Incorporation and Bylaws
Directors. Certain provisions of the Holding Company's certificate of
incorporation and bylaws will impede changes in majority control of the Board of
Directors. The Holding Company's certificate of incorporation provide that the
Board of Directors of the Holding Company will be divided into three classes,
with directors in each class elected for three-year staggered terms except for
the initial directors. Thus, it would take two annual elections to replace a
majority of the Holding Company's Board. The Holding Company's certificate of
incorporation provide that the size of the Board of Directors may be increased
or decreased only by a majority vote of the Board. The certificate of
incorporation also provide that any vacancy occurring in the Board of Directors,
including a vacancy created by an increase in the number of directors, shall be
filled for the remainder of the unexpired term by a majority vote of the
directors then in office. Finally, the certificate and bylaws impose certain
notice and information requirements in connection with the nomination by
stockholders of candidates for election to the Board of Directors or the
proposal by stockholders of business to be acted upon at an annual meeting of
stockholders.
The certificate of incorporation provide that a director may only be
removed for cause by the affirmative vote of 80% of the shares eligible to vote.
Removal for "cause" is limited to the grounds for termination in the federal
regulations that applies to employment contracts of federally insured savings
institutions.
Restrictions on Call of Special Meetings. The certificate of
incorporation of the Holding Company provide that a special meeting of
stockholders may be called by the Chairman of the Board of the Holding Company
or pursuant to a resolution adopted by a majority of the Board of Directors.
Stockholders are not authorized to call a special meeting.
Absence of Cumulative Voting. The Holding Company's certificate of
incorporation provide that there shall be no cumulative voting rights in the
election of directors.
Authorization of Preferred Stock. The certificate of incorporation of
the Holding Company authorize 500,000 shares of serial preferred stock, without
par value. The Holding Company is authorized to issue preferred stock from time
to time in one or more series subject to applicable provisions of law; and the
Board of Directors is authorized to fix the designations, and relative
preferences, limitations, voting rights, if any, including without limitation,
conversion rights of such shares (which could be multiple or as a separate
class). In the event of a proposed merger, tender offer or other attempt to gain
control of the Holding Company that the Board of Directors does not approve, it
might be possible for the Board of Directors to authorize the issuance of a
series of preferred stock with rights and preferences that would impede the
completion of such a transaction. An effect of the possible issuance of
preferred stock, therefore, may be to deter a future takeover attempt. The Board
of Directors has no present plans or understandings for the issuance of any
preferred stock but it may issue any
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preferred stock on terms which the Board deems to be in the best interests of
the Holding Company and its stockholders.
Limitation on Voting Rights. The certificate of incorporation of the
Holding Company provide that (i) no person shall directly or indirectly offer to
acquire or acquire the beneficial ownership of more than 10% of any class of
equity security of the Holding Company (provided that such limitation shall not
apply to the acquisition of equity securities by any one or more tax-qualified
employee stock benefit plans maintained by the Holding Company, if the plan or
plans beneficially own no more than 25% of any class of such equity security of
the Holding Company); and that (ii) shares beneficially owned in violation of
the stock ownership restriction described above shall not be entitled to vote
and shall not be voted by any person or counted as voting stock in connection
with any matter submitted to a vote of stockholders. For these purposes, a
person (including management) who has obtained the right to vote shares of the
Common Stock pursuant to revocable proxies shall not be deemed to be the
"beneficial owner" of those shares if that person is not otherwise deemed to be
a beneficial owner of those shares.
The certificate of incorporation of the Holding Company further provide
that the Board of Directors of the Holding Company, when determining to take or
refrain from taking corporate action on any matter, including making or
declining to make any recommendation to the Holding Company's stockholders, may,
in connection with the exercise of its judgment in determining what is in the
best interest of the Holding Company, First Robinson, the National Bank, and the
stockholders of the Holding Company, give due consideration to all relevant
factors, including, without limitation, the social and economic effects of
acceptance of such offer on the Holding Company's customers and First Robinson's
(and the National Bank's) present and future account holders, borrowers and
employees; the effect on the communities in which the Holding Company and First
Robinson (and the National Bank) operate or are located; and the effect on the
ability of the Holding Company to fulfill the objectives of a financial
institution holding company and of First Robinson (and the National Bank) or
future subsidiaries to fulfill the objectives of a financial institution under
applicable statutes and regulations. The certificate of incorporation of the
Holding Company also authorize the Board of Directors to take certain actions to
encourage a person to negotiate for a change of control of the Holding Company
or to oppose such a transaction deemed undesirable by the Board of Directors
including the adoption of so-called shareholder rights plans. By having these
standards and provisions in the certificate of incorporation of the Holding
Company, the Board of Directors may be in a stronger position to oppose such a
transaction if the Board concludes that the transaction would not be in the best
interest of the Holding Company, even if the price offered is significantly
greater than the then market price of any equity security of the Holding
Company.
Procedures for Certain Business Combinations. The certificate of
incorporation of the Holding Company require that certain business combinations
between the Holding Company (or any majority-owned subsidiary thereof) and a 10%
or greater stockholder either (i) be approved by at least 80% of the total
number of outstanding voting shares of the Holding Company or (ii) be approved
by a majority of certain directors unaffiliated with such 10% or greater
stockholder or (iii) involve consideration per share generally equal to the
higher of (A) the highest amount paid by such 10% stockholder or its affiliates
in acquiring any shares of the Common Stock or (B) the "Fair Market Value"
(generally, the highest closing bid paid on the Common Stock
109
<PAGE>
during the 30 days preceding the date of the announcement of the proposed
business combination or on the date the 10% or greater stockholder became such,
whichever is higher).
Amendment to Certificate of Incorporation and Bylaws. Amendments to the
Holding Company's certificate of incorporation must be approved by the Holding
Company's Board of Directors and also by a majority of the outstanding shares of
the Holding Company's voting stock; provided, however, that approval by at least
80% of the outstanding voting stock is generally required for certain provisions
(i.e., provisions relating to number, classification, election and removal of
directors, amendment of bylaws, call of special stockholder meetings, criteria
for evaluating certain offers, offers to acquire and acquisitions of control,
director liability, certain business combinations, power of indemnification, and
amendments to provisions relating to the foregoing in the certificate of
incorporation).
The bylaws may be amended by the affirmative vote of the total number
of directors of the Holding Company or the affirmative vote of at least 80% of
the total votes eligible to be voted at a duly constituted meeting of
stockholders.
Purpose and Takeover Defensive Effects of the Holding Company's
Certificate of Incorporation and Bylaws. The Board of Directors of the
Association believes that the provisions described above are prudent and will
reduce the Holding Company's vulnerability to takeover attempts and certain
other transactions which have not been negotiated with and approved by its Board
of Directors. These provisions will also assist the Association (as well as the
National Bank) in the orderly deployment of the Conversion proceeds into
productive assets during the initial period after the Stock Conversion. The
Board of Directors believes these provisions are in the best interest of the
Association and of the Holding Company and its stockholders. In the judgment of
the Board of Directors, the Holding Company's Board will be in the best position
to determine the true value of the Holding Company and to negotiate more
effectively for what may be in the best interests of its stockholders.
Accordingly, the Board of Directors believes that it is in the best interests of
the Holding Company and its stockholders to encourage potential acquirors to
negotiate directly with the Board of Directors of the Holding Company and that
these provisions will encourage such negotiations and discourage hostile
takeover attempts. It is also the view of the Board of Directors that these
provisions should not discourage persons from proposing a merger or other
transaction at prices reflective of the true value of the Holding Company and
which is in the best interests of all stockholders.
Attempts to take over financial institutions and their holding
companies have become increasingly common. Takeover attempts which have not been
negotiated with and approved by the Board of Directors present to stockholders
the risk of a takeover on terms which may be less favorable than might otherwise
be available. A transaction which is negotiated and approved by the Board of
Directors, on the other hand, can be carefully planned and undertaken at an
opportune time in order to obtain maximum value for the Holding Company and its
stockholders, with due consideration given to matters such as the management and
business of the acquiring corporation and maximum strategic development of the
Holding Company's assets.
An unsolicited takeover proposal can seriously disrupt the business and
management of a corporation and cause it great expense. Although a tender offer
or other takeover attempt may be made at a price substantially above
then-current market prices, such offers are sometimes
110
<PAGE>
made for less than all of the outstanding shares of a target company. As a
result, stockholders may be presented with the alternative of partially
liquidating their investment at a time that may be disadvantageous or retaining
their investment in an enterprise which is under different management and whose
objectives may not be similar to those of the remaining stockholders. The
concentration of control, which could result from a tender offer or other
takeover attempt, could also deprive the Holding Company's remaining
stockholders of the benefits of certain protective provisions of the Exchange
Act, if the number of beneficial owners becomes less than the 300 required for
Exchange Act registration.
Potential Anti-Takeover Effects. Despite the belief of the Bank and the
Holding Company as to the benefits to stockholders of these provisions of the
Holding Company's certificate of incorporation and bylaws, these provisions may
also have the effect of discouraging a future takeover attempt which would not
be approved by the Holding Company's Board, but pursuant to which stockholders
may receive a substantial premium for their shares over then-current market
prices. As a result, stockholders who might desire to participate in such a
transaction may not have any opportunity to do so. Such provisions will also
render the removal of the Holding Company's Board of Directors and of management
more difficult. The Boards of Directors of the Association 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 Stock Conversion, the Holding Company may adopt
additional provisions to its certificate of incorporation regarding the
acquisition of its equity securities that would be permitted to a Delaware
corporation. The Holding Company and the Association do not presently intend to
propose the adoption of further restrictions on the acquisition of the Holding
Company's equity securities.
Other Restrictions on Acquisitions of Stock
Delaware Anti-Takeover Statute. The State of Delaware has enacted
legislation which provides that subject to certain exceptions a publicly held
Delaware corporation may not engage in any business combination with an
"interested stockholder" for three years after such stockholder became an
interested stockholder, unless, among other things, the interested stockholder
acquired at least 85% of the corporation's voting stock in the transaction that
resulted in the stockholder becoming an interested stockholder. This legislation
generally defines "interested stockholder" as any person or entity that owns 15%
or more of the corporation's voting stock. The term "business combination" is
defined broadly to cover a wide range of corporate transactions, including
mergers, sales of assets, issuances of stock, transactions with subsidiaries and
the receipt of disproportionate financial benefits. Under certain circumstances,
either the board of directors or both the board and two-thirds of the
stockholders other than the acquiror may approve a given business combination
and thereby exempt the corporation from the operation of the statute.
However, these statutory provisions do not apply to Delaware
corporations with fewer than 2,000 stockholders or which do not have voting
stock listed on a national exchange or listed for quotation with a registered
national securities association. The Holding Company has applied to have the
Common Stock listed on the Nasdaq SmallCap Market.
111
<PAGE>
OTS Regulation. OTS regulations prohibit any person prior to the
completion of a conversion from transferring, or entering into any agreement or
understanding to transfer, the legal or beneficial ownership of the Subscription
Rights issued under a plan of conversion or the stock to be issued upon their
exercise. This regulation also prohibits any person prior to the completion of a
conversion from offering, or making an announcement of an offer or intent to
make an offer, to purchase such Subscription Rights or stock. For three years
following conversion, this regulation prohibits any person, without the prior
approval of the OTS, from acquiring or making an offer (if opposed by the
institution) to acquire more than 10% of the stock of any converted savings
institution if such person is, or after consummation of such acquisition would
be, the beneficial owner of more than 10% of such stock. In the event that any
person, directly or indirectly, violates this regulation, the securities
beneficially owned by such person in excess of 10% shall not be counted as
shares entitled to vote and shall not be voted by any person or counted as
voting shares in connection with any matter submitted to a vote of stockholders.
Federal law provides that no company "directly or indirectly or acting
in concert with one or more persons, or through one or more subsidiaries, or
through one or more transactions," may acquire "control" of a savings
association at any time without the prior approval of the OTS. "Acting in
concert" is defined very broadly. In addition, federal regulations require that,
prior to obtaining control of a savings association, a person, other than a
company, must give 60 days' prior notice to the OTS and have received no OTS
objection to such acquisition of control. Any company that acquires such control
becomes a "savings and loan holding company" subject to registration,
examination and regulation as a savings and loan holding company. Under federal
law (as well as the regulations referred to below) the term "savings
association" includes state and federally chartered SAIF-insured institutions
and federally chartered savings associations whose accounts are insured by the
FDIC's BIF and holding companies thereof. Following completion of the Bank
Conversion, the control restrictions of the OTS will no longer be applicable.
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 which acquire beneficial ownership
exceeding 10% or more of any class of a savings association's stock must file
with the OTS a certification that the holder is not in control of such
institution, is not subject to a rebuttable determination of control and will
take no action which would result in a determination or rebuttable determination
of control without prior notice to or approval of the OTS, as applicable.
112
<PAGE>
FRB Regulation. The CIBC and the BHCA, together with the FRB
regulations under those acts, require that the consent of the FRB be obtained
prior to any person or company acquiring "control" of a bank holding company.
Controls is conclusively presumed to exist if an individual or company acquires
more than 25% of any class of voting stock of the bank holding company. Control
is rebuttably presumed to exist if the person acquires more than 10% of any
class of voting stock of a bank holding company if either (i) the Holding
Company has registered securities under Section 12 of the Exchange Act or (ii)
no other person will own a greater percentage of that class of voting securities
immediately after the transaction. The regulations provide a procedure to rebut
the rebuttable control presumption. Since the Holding Company's Common Stock
will be registered under Section 12 of the Exchange Act, any acquisition of 10%
or more of the Holding Company's Common Stock will give rise to a rebuttable
presumption that the acquiror of such stock controls the Holding Company,
requiring the acquiror, prior to acquiring such stock, to rebut the presumption
of control to the satisfaction of the FRB or obtain FRB approval for the
acquisition of control. Restrictions applicable to the operations of bank
holding companies may deter companies from seeking to obtain control of the
Holding Company. See "Regulation."
DESCRIPTION OF CAPITAL STOCK
Holding Company Capital Stock
The 2,500,000 shares of capital stock authorized by the Holding
Company's Certificate of Incorporation are divided into two classes, consisting
of 2,000,000 shares of Common Stock (par value $.01 per share) and 500,000
shares of serial preferred stock (par value $.01 per share). The Holding Company
currently expects to issue between 552,500 and 747,500 shares of Common Stock in
the Stock Conversion. The aggregate par value of the issued shares will
constitute the capital account of the Holding Company on a consolidated basis.
The balance of the purchase price of Common Stock, less expenses of Conversion,
will be reflected as paid-in capital. See "Capitalization." Upon payment of the
Purchase Price for the Common Stock, in accordance with the Plan, all such stock
will be duly authorized, fully paid, validly issued and nonassessable.
Each share of the Common Stock will have the same relative rights and
will be identical in all respects with each other share of the Common Stock. The
Common Stock of the Holding Company will represent non-withdrawable capital,
will not be of an insurable type and will not be insured by the FDIC.
Under Delaware law, the holders of the Common Stock will possess
exclusive voting power in the Holding Company. Each stockholder will be entitled
to one vote for each share held on all matters voted upon by stockholders,
subject to the limitation discussed under "Restrictions on Acquisitions of Stock
and Related Takeover Defensive Provisions - Provisions of the Holding Company's
Certificate of Incorporation and Bylaws - Limitation on Voting Rights." If the
Holding Company issues preferred stock subsequent to the Stock Conversion,
holders of the preferred stock may also possess voting powers.
113
<PAGE>
Liquidation or Dissolution. In the unlikely event of the liquidation or
dissolution of the Holding Company, the holders of the Common Stock will be
entitled to receive -- after payment or provision for payment of all debts and
liabilities of the Holding Company (including all deposits in the Association
and accrued interest thereon) and after distribution of the liquidation account
established upon the Stock Conversion for the benefit of Eligible Account
Holders who continue their deposit accounts at the Association -- all assets of
the Holding Company available for distribution, in cash or in kind. See "The
Conversion - Effects of Conversion to Stock Form on Depositors and Borrowers of
the Association." If preferred stock is issued subsequent to the Stock
Conversion, the holders thereof may have a priority over the holders of Common
Stock in the event of liquidation or dissolution.
No Preemptive Rights. Holders of the Common Stock will not be entitled
to preemptive rights with respect to any shares which may be issued. The Common
Stock will not be subject to call for redemption, and, upon receipt by the
Holding Company of the full purchase price therefor, each share of the Common
Stock will be fully paid and nonassessable.
Preferred Stock. After Stock Conversion, the Board of Directors of the
Holding Company will be authorized to issue preferred stock in series and to fix
and state the voting powers, designations, preferences and relative,
participating, optional or other special rights of the shares of each such
series and the qualifications, limitations and restrictions thereof. Preferred
stock may rank prior to the Common Stock as to dividend rights, liquidation
preferences, or both, and may have full or limited voting rights. The holders of
preferred stock will be entitled to vote as a separate class or series under
certain circumstances, regardless of any other voting rights which such holders
may have.
Except as discussed herein, the Holding Company has no present plans
for the issuance of the additional authorized shares of Common Stock or for the
issuance of any shares of preferred stock. In the future, the authorized but
unissued and unreserved shares of Common Stock will be available for general
corporate purposes including but not limited to possible issuance as stock
dividends or stock splits, in future mergers or acquisitions, under a cash
dividend reinvestment and stock purchase plan, in a future underwritten or other
public offering or under an employee stock ownership plan, stock option or
restricted stock plan. The authorized but unissued shares of preferred stock
will similarly be available for issuance in future mergers or acquisitions, in a
future underwritten public offering or private placement or for other general
corporate purposes. Except as described above or as otherwise required to
approve the transaction in which the additional authorized shares of Common
Stock or authorized shares of preferred stock would be issued, no stockholder
approval will be required for the issuance of these shares. Accordingly, the
Board of Directors of the Holding Company, without stockholder approval, can
issue preferred stock with voting and conversion rights which could adversely
affect the voting power of the holders of Common Stock.
Restrictions on Acquisitions. See "Restrictions on Acquisitions of
Stock and Related Takeover Defensive Provisions" for a description of certain
provisions of the Holding Company's certificate of incorporation and bylaws
which may affect the ability of the Holding Company's stockholders to
participate in certain transactions relating to acquisitions of control of the
Holding Company.
114
<PAGE>
Dividends. Upon consummation of the formation of the Holding Company,
the Holding Company's only asset will be the Association's Common Stock.
Although it is anticipated that the Holding Company will retain approximately
50% of the net proceeds in the Stock Conversion, dividends from the Association
will be an important source of income for the Holding Company. Should the
Association elect to retain its income, the ability of the Holding Company to
pay dividends to its own shareholders may be adversely affected. Furthermore, if
at any time in the future the Holding Company owns less than 80% of the
outstanding stock of the Association, certain tax benefits under the Code as to
inter-company distributions will not be fully available to the Holding Company
and it will be required to pay federal income tax on a portion of the dividends
received from the Association, thereby reducing the amount of income available
for distribution to the shareholders of the Holding Company. For further
information concerning the ability of the Association, and following the Bank
Conversion, the National Bank, to pay dividends to the Holding Company, see
"Dividends."
LEGAL AND TAX MATTERS
The legality of the Common Stock and the federal income tax
consequences of the Conversion will be passed upon for First Robinson by the
firm of Silver, Freedman & Taff, L.L.P. (a limited liability partnership
including professional corporations), 1100 New York Avenue, N.W., Washington,
DC. The Illinois state income tax consequences of the Conversion will be passed
upon for the Association by Larsson, Woodyard & Henson LLP, 702 East Court,
Paris, Illinois. Silver, Freedman & Taff, L.L.P. and Larsson, Woodyard & Henson
LLP have consented to the references herein to their opinions. Malizia, Spidi,
Sloane, & Fisch, P.C., Washington, DC, has acted as counsel to Trident
Securities.
EXPERTS
The financial statements of First Robinson as of October 31, 1996 and
1995, and for each of the years in the three-year period ended October 31, 1996,
included in this Prospectus have been audited by Larsson, Woodyard & Henson LLP,
independent certified public accountants, as indicated in their report which is
included herein and has been so included in reliance upon such report, given
upon the authority of that firm as experts in accounting and auditing.
The Appraiser has consented to the inclusion herein of the summary of
its letter to the Association setting forth its opinion as to the estimated pro
forma market value of the Association as converted and to the reference to its
opinion that subscription rights received by Eligible Account Holders and other
eligible subscribers do not have any economic value.
115
<PAGE>
ADDITIONAL INFORMATION
The Holding Company has filed with the SEC a registration statement
under the Securities Act, with respect to the Common Stock offered hereby. As
permitted by the rules and regulations of the SEC, this Prospectus does not
contain all the information set forth in the registration statement. Such
information can be examined without charge at the public reference facilities of
the SEC located at 450 Fifth Street, N.W., Washington, DC 20549, and copies of
such material can be obtained from the SEC at prescribed rates. The SEC also
maintains an internet address ("Web site") that contains reports, proxy and
information statements and other information regarding registrants, including
the Company, that file electronically with the SEC. The address for this Web
site is "http://www.sec.gov." The statements contained herein as to the contents
of any contract or other document filed as an exhibit to the registration
statement are, of necessity, brief descriptions thereof and are not necessarily
complete but do contain all material information regarding such documents; each
such statement is qualified by reference to such contract or document.
The Association has filed an Application for Approval of Conversion
with the OTS with respect to the Stock Conversion. Pursuant to the rules and
regulations of the OTS, this Prospectus omits certain information contained in
that Application. The Application may be examined at the principal offices of
the OTS, 1700 G Street, N.W., Washington, DC 20552 and at the Central Regional
Office of the OTS, 200 West Madison, Suite 1300, Chicago, IL 60606, without
charge.
In connection with the Stock Conversion, the Holding Company will
register the Common Stock with the SEC under Section 12(g) of the Exchange Act,
as amended, and, upon such registration, the Holding Company and the holders of
its Common Stock will become subject to the proxy solicitation rules, reporting
requirements and restrictions on stock purchases and sales by directors,
officers and greater than 10% stockholders, the annual and periodic reporting
and certain other requirements of the Exchange Act. Under the Plan, the Holding
Company has undertaken that it will not terminate such registration for a period
of at least three years following the Stock Conversion.
A copy of the Certificate of Incorporation and Bylaws of the Holding
Company are available without charge from the Association.
116
<PAGE>
FIRST ROBINSON FINANCIAL CORPORATION
Robinson, Illinois
Page
----
Independent Auditors' Report ........................................... F-2
Consolidated Financial Statements:
Consolidated Statements of Financial Condition at
December 31, 1996 (Unaudited) and October 31, 1996 and 1995 ............ F-3
Consolidated Statements of Income for the Two-Months Ended
December 31, 1996 and 1995 (Unaudited) and the Years Ended
October 31, 1996, 1995 and 1994 .................................... 28
Consolidated Statements of Retained Earnings for the
Two Months Ended December 31, 1996 and 1995 (Unaudited)
and the Years Ended October 31, 1996, 1995 and 1994 ................ F-4
Consolidated Statements of Cash Flows for the
Two Months Ended December 31, 1996 and 1995 (Unaudited)
and the Years Ended October 31, 1996, 1995 and 1994 ................ F-5
Notes to Consolidated Financial Statements ........................... F-8
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
First Robinson Savings & Loan, F. A.
and Subsidiary
Robinson, Illinois
We have audited the accompanying consolidated statements of financial condition
of First Robinson Savings & Loan, F. A. and Subsidiary as of October 31, 1996
and 1995 and the related consolidated statements of income, retained earnings,
and cash flows for each of the years ended October 31, 1996, 1995, and 1994.
These consolidated financial statements are the responsibility of the
Association'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 consolidated financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated 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 consolidated financial position of First
Robinson Savings & Loan, F. A. and Subsidiary as of October 31, 1996 and 1995,
and the results of their operations and their cash flows for the years ended
October 31, 1996, 1995, and 1994 in conformity with generally accepted
accounting principles.
As discussed in Note A to the consolidated financial statements, the Association
changed its method of accounting for income taxes during the year ended October
31, 1994 to adopt the provisions of Statement of Financial Accounting Standards
No. 109, Accounting for Income Taxes.
/s/ Larsson, Woodyard & Henson, LLP
November 15, 1996
F-2
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
ASSETS
October 31,
December 31, -------------------------
1996 1996 1995
---- ---- ----
Unaudited
---------
1,000's
----------------------------------------------
<S> <C> <C> <C>
Cash and cash equivalents:
Cash .................................................................... $ 470 $ 385 $ 302
Interest bearing deposits ............................................... 2,048 868 2,472
----- --- -----
Total cash and cash equivalents ....................................... 2,518 1,253 2,774
Securities held to maturity, approximate
market value of $566,000, $589,000 and
$1,289,000 for December 31, 1996,
October 31, 1996 and 1995, respectively
(Note B) ................................................................. 570 592 1,296
Securities available for sale
amortized cost of $3,949,000, $4,090,000 and
$2,844,000 for December 31, 1996, October 31,
1996 and 1995, respectively (Note B) ..................................... 4,018 4,133 2,890
Loans receivable, net (Note C) ............................................ 57,003 54,448 44,854
Foreclosed real estate .................................................... 277 278 18
Premises and equipment (Note E) ........................................... 2,553 2,564 2,497
Accrued interest receivable (Note D) ...................................... 518 514 295
Prepaid income taxes (Note I) ............................................. 0 19 0
Other assets .............................................................. 81 68 84
-- -- --
Total Assets .......................................................... $67,538 $63,869 $54,708
======= ======= =======
LIABILITIES AND RETAINED EARNINGS
Deposits (Notes F) ........................................................ $59,642 $56,691 $49,404
Federal Home Loan Bank advances (Note G) .................................. 2,500 1,500 0
Advances from borrowers for taxes and insurance ........................... 45 35 33
Accrued interest payable .................................................. 374 353 229
Accrued income taxes (Note I) ............................................. 28 0 16
Deferred income taxes (Note I) ............................................ 100 91 221
Accrued expenses .......................................................... 103 541 269
--- --- ---
Total Liabilities ..................................................... 62,792 59,211 50,172
Commitments and contingencies (Note L)
Retained Earnings - substantially
restricted (Note H) ...................................................... 4,746 4,658 4,536
----- ----- -----
Total Liabilities and Retained Earnings ............................... $67,538 $63,869 $54,708
======= ======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
F-3
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS
Unrealized
Gain
on Securities
Retained Available
Earnings for Sale, Net Total
-------- ------------- -----
1,000's
--------------------------------
Balance, October 31, 1993 ................ $3,747 $ 0 $ 3,747
Change in accounting for securities
as of November 1, 1993 .................. 0 63 63
Net income ............................... 362 0 362
Change in unrealized gain on
securities available for sale ........... 0 (61) (61)
----- --- ---
Balance, October 31, 1994 ................ 4,109 2 4,111
Net income ............................... 399 0 399
Change in unrealized gain on
securities available for sale ........... 0 26 26
----- -- --
Balance, October 31, 1995 ................ 4,508 28 4,536
Net income ............................... 123 0 123
Change in unrealized gain on
securities available for sale ........... 0 (1) (1)
----- -- --
Balance, October 31, 1996 ................ 4,631 27 4,658
Net income (unaudited) ................... 74 0 74
Change in unrealized gain on
securities available for sale
(unaudited) ............................. 0 14 14
----- -- --
Balance, December 31, 1996
(unaudited) ............................. $4,705 $ 41 $ 4,746
====== ===== =======
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Two Months Ended
December 31, For the Years Ended October 31,
------------------- ------------------------------------
1996 1995 1996 1995 1994
---- ---- ---- ---- ----
Unaudited
-------------------
1,000's
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income ............................................ $ 74 $ 48 $ 123 $ 399 $ 362
Adjustments to reconcile net
income to net cash (used in)
provided by operating activities
Provision for depreciation .......................... 27 25 165 120 96
Provision for loan losses ........................... 8 4 270 9 (24)
Amortization of premiums
on securities ..................................... 2 1 21 3 1
Accretion of discounts
on securities ..................................... 0 (4) (2) (1) 0
Decrease (increase) in
foreclosed real estate ............................ 1 (7) (260) 0 110
(Increase) decrease in other
repossessed property .............................. 0 0 0 (6) 7
(Increase) decrease in accrued
interest receivable ............................... (4) (30) (219) (82) 12
Decrease in prepaid income
taxes ............................................. 19 0 0 0 0
(Increase) decrease in other
assets ............................................ (13) 42 (3) (24) (5)
Increase in accrued interest
payable ........................................... 21 18 124 80 26
Increase (decrease) in
accrued income taxes .............................. 28 31 (16) 54 (196)
Increase (decrease) in
deferred income taxes ............................. 9 2 (131) 78 45
(Decrease) increase in
accrued expenses .................................. (438) (116) 272 116 20
FHLB stock dividends
received .......................................... 0 0 0 (4) 0
Gain on sale of loan ................................ 0 0 (45) 0 0
Gain on sale of premises
and equipment ..................................... 0 0 (8) (1) 0
--- --- --- --- ---
Net cash (used in) provided
by operating activities ......................... (266) 14 291 741 454
==== == === === ===
</TABLE>
F-5
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Two Months Ended
December 31, For the Years Ended October 31,
------------------------ ----------------------------------------
1996 1995 1996 1995 1994
---- ---- ---- ---- ----
Unaudited
-----------------------
1,000's
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Cash flows from investing activities:
Proceeds from sales of
available-for-sale securities ................ $ 0 $ 0 $ 0 $ 0 $ 87
Proceeds from maturities of
held-to-maturity securities .................. 22 17 706 143 781
Purchase of held-to-maturity
securities ................................... 0 0 0 0 (1,241)
Purchase of available-for-sale
securities ................................... 0 0 (2,218) 0 0
Repayment of mortgage-backed
securities available for sale ................ 127 91 954 278 1,079
Increase in loans receivable ................... (3,164) (922) (11,563) (13,852) (2,513)
Sale of originated loans ....................... 600 0 1,744 3,081 109
Purchase of loans .............................. 0 0 0 0 (900)
Decrease in foreclosed
real estate .................................. 1 0 0 1 119
Purchase of premises and
equipment .................................... (16) (38) (246) (685) (83)
Proceeds from sale of
premises and equipment ....................... 0 0 22 0 0
- - -- - -
Net cash used in
investing activities ...................... (2,430) (852) (10,601) (11,034) (2,562)
------ ---- ------- ------- ------
Cash flows from financing activities:
Net increase in deposits ....................... 2,951 116 7,287 10,196 2,232
Net advances from FHLB ......................... 1,000 0 1,500 0 0
Increase (decrease) in advances
from borrowers for taxes
and insurance ................................ 10 8 2 (1) (1)
-- - - -- --
Net cash provided by
financing activities ...................... 3,961 124 8,789 10,195 2,231
----- --- ----- ------ -----
Increase (decrease) in cash
and cash equivalents ............................ 1,265 (714) (1,521) (98) 123
Cash and cash equivalents
at beginning of period .......................... 1,253 2,774 2,774 2,872 2,749
----- ----- ----- ----- -----
Cash and cash equivalents
at end of period ................................ $ 2,518 $ 2,060 $ 1,253 $ 2,774 $ 2,872
======= ======= ======== ======== =======
</TABLE>
F-6
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Two Months Ended
December 31, For the Years Ended October 31,
------------------------ ----------------------------------------
1996 1995 1996 1995 1994
---- ---- ---- ---- ----
Unaudited
-----------------------
1,000's
--------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Supplemental Disclosures:
Additional Cash Flows
Information:
Cash paid for:
Interest on deposits .............................. $452 $392 $2,496 $ 1,877 $ 1,420
Interest on other borrowings ...................... 22 0 13 15 0
Income taxes:
Federal ........................................... 0 0 176 148 330
State ............................................. 0 0 40 43 46
Schedule of Non-Cash Investing
Activities:
Federal Home Loan Bank Stock
dividends ............................................ 0 0 0 4 0
Change in unrealized gain (loss)
on securities available for sale ..................... 5 25 2 (43) (3)
Change in deferred income taxes
attributed to unrealized gain
(loss) on securities available
for sale ............................................. 2 10 1 (27) (2)
Securities transferred to available
for sale ............................................. 0 0 0 0 4,048
Foreclosed real estate ................................ 0 0 260 0 9
</TABLE>
F-7
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A. Summary of Significant Accounting Policies
Description of the Business
First Robinson Savings & Loan, F.A. (the Association) is a federally
chartered mutual savings and loan with financial deposits insured by the
Federal Deposit Insurance Corporation through the Savings Association
Insurance Fund located in Crawford County, Illinois. The Association's
main office is in Robinson with branch facilities in Oblong and
Palestine. The Association provides financial services to individuals
and corporate customers, and is subject to competition from other
financial institutions. The Association is subject to the regulations of
certain federal agencies and undergoes periodic examinations by those
agencies.
Basis of Financial Statement Presentation
The accounting and reporting policies of the Association follow the
accrual basis of accounting and conform to generally accepted accounting
principles and to general practice within the financial institution
industry. The consolidated financial statements include the accounts of
the Association and its wholly owned subsidiary First Robinson Service
Corporation, Inc., which was incorporated to provide insurance services.
All material intercompany transactions and accounts have been
eliminated.
In preparing the consolidated financial statements, management is
required to make estimates and assumptions which significantly affect
the reported amounts of assets and liabilities as of the date of the
consolidated statement of financial condition and revenues and expenses
for the year. Actual results could differ significantly 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 loan losses and foreclosed real
estate, management obtains independent appraisals for significant
properties.
Management believes the allowance for loan losses and real estate owned
is adequate. 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 Association's allowances for losses on
loans and foreclosed real estate. Such agencies may require the
Association to recognize additions to the allowances based on their
judgments about information available to them at the time of their
examination.
The consolidated statements of financial condition as of December 31,
1996 and the consolidated statements of income, retained earnings, and
cash flows for the two-month periods ended December 31, 1996 and 1995
are unaudited. However, in the opinion of management, these consolidated
financial statements include all material adjustments necessary for the
fair presentation of the Association's financial position, consisting
solely of normal and recurring adjustments.
Cash Equivalents
Cash equivalents of $2,048,000, $868,000 and $2,472,000 at December 31,
1996, October 31, 1996 and 1995, respectively, consists of amounts due
from depository institutions and interest-bearing deposits. For purposes
of the consolidated statements of cash flows, the Association considers
all highly liquid debt instruments with original maturities of three
months or less to be cash equivalents.
Securities Held to Maturity
Securities classified as held to maturity are those securities the
Association has the positive intent and ability to hold to maturity
regardless of changes in market conditions, liquidity needs or changes
in general economic conditions. These securities are carried at cost
adjusted for amortization of premium and accretion of discount, which
are recognized in interest income using the interest method over the
period to maturity.
F-8
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A. Summary of Significant Accounting Policies
Securities Available for Sale
Securities classified as available for sale are those securities that
the Association intends to hold for an indefinite period of time, but
not necessarily to maturity, marketable equity securities, and FHLB
stock. Any decision to sell a security classified as available for sale
would be based on various factors, including significant movements in
interest rates, changes in the maturity mix of the Association's assets
and liabilities, liquidity needs, regulatory capital considerations, and
other similar factors. Securities available for sale are carried at fair
value. The difference between fair value and amortized cost, adjusted
for amortization of premium and accretion of discounts, which are
recognized in interest income using the interest method over their
contractual lives, results in an unrealized gain or loss. Unrealized
gains or losses are reported as increases or decreases in retained
earnings, net of the related deferred tax effect. Realized gains or
losses, determined on the basis of the cost of specific securities sold,
are included in earnings.
Loans and Allowance for Loan Losses
Loans are considered a held-to-maturity asset and, accordingly, are
carried at historical cost. Loans are stated at the amount of unpaid
principal, reduced by unearned discounts, allowances for loan losses,
loans in process, loans participated to other financial institutions,
and deferred loan origination fees. Unearned discounts on nonmortgage
installment loans are recognized as income over the term of the loan by
the interest method. Interest on all other mortgage and nonmortgage
loans is calculated by using the simple interest method on the unpaid
principal outstanding. The Association's policy is to discontinue the
accrual of interest income on any loan when, in the opinion of
management, there is reasonable doubt as to the timely collectibility of
interest or principal. Interest income on these loans is recognized to
the extent payments are received, and the principal is considered fully
collectible. An allowance for loan losses has been established for loans
through a provision for loan losses charged to operations. Loans are
charged against the allowance for loan losses when management believes
that the collectibility of the principal is unlikely. The allowance is
an amount that management believes will be adequate to absorb probable
losses on existing loans that may become uncollectible, based on
evaluations of the collectibility of loans and prior loan loss
experience. The evaluations take into consideration such factors as
changes in the nature and volume of the loan portfolio, overall
portfolio quality, review of specific problem loans, and current
economic conditions that may affect the borrowers' ability to pay.
Management believes that the allowance for loan losses is adequate.
While management uses available information to recognize losses on
loans, future additions to the allowance may be necessary based on
changes in economic conditions. In addition, various regulatory
agencies, as an integral part of their examination process, periodically
review the Association's allowance for loan losses. Such agencies may
require the Association to recognize additions to the allowance based on
their judgments of information available to them at the time of their
examination. 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.
Changes in the allowance relating to impaired loans are charged or
credited to the provision for loan losses.
On November 1, 1995, the Association adopted Financial Accounting
Standards Board Statement of Financial Accounting Standards No. 114,
"Accounting by Creditors for Impairment of a Loan," as amended by
Statement of Financial Accounting Standards No. 118, which requires
loans to be considered impaired when, based on current information and
events, it is probable the Association will not be able to collect all
amounts due. The portion of the allowance for loan losses applicable to
impaired loans has been computed based on the present value of the
estimated future cash flows of interest and principal discounted at the
loan's effective interest rate or on the fair value of the collateral
for collateral dependent loans. The entire change in present value of
expected cash flows of impaired loans or of collateral value is reported
as bad debt expense in the same manner in which impairment initially was
recognized or as a reduction in the amount of bad debt expense that
otherwise would be reported.
F-9
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F.A. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A. Summary of Significant Accounting Policies
Real Estate Held for Investment and Foreclosed Real Estate
Direct investments in real estate properties held for investment are
carried at the lower of cost, including cost of improvements and
amenities subsequent to acquisition, or net realizable value.
Foreclosed real estate held for sale is carried at the lower of cost or
estimated fair market value, net of estimated selling costs. 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.
Premises and Equipment
Land is carried at cost. Buildings and furniture, fixtures and equipment
are carried at cost adjusted for accumulated depreciated over the
estimated useful lives of the assets. Buildings and furniture, fixtures
and equipment are depreciated using the straight-line method. The
estimated useful lives are five to fifty years for buildings and
improvements and five to forty years for equipment.
Income Taxes
Deferred income tax assets and liabilities are computed annually for
differences between the financial statement and tax bases of assets and
liabilities that will result in taxable or deductible amounts in the
future based on enacted tax laws and rates applicable to the periods in
which the differences are expected to affect taxable income. Deferred
tax assets are reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all of the
deferred tax assets will not be realized. Deferred tax assets and
liabilities are adjusted for the effects of changes in tax laws and
rates on the date of enactment. Income tax expense is the tax payable or
refundable for the period plus or minus the change during the period in
deferred tax assets and liabilities.
Pension Plan
The Association has a pension plan covering substantially all employees.
It is the policy of the Association to fund the maximum amount that can
be deducted for federal income tax purposes but in amounts not less than
the minimum amounts required by law.
Off-Balance-Sheet Financial Instruments
In the ordinary course of business, the Association has entered into
off-balance-sheet financial instruments consisting of commitments to
extend credit, commitments under credit card arrangements, commercial
letters of credit and standby letters of credit. Such instruments are
recorded in the consolidated financial statements when they become
payable.
New Accounting Standards
Accounting for Mortgage Servicing Rights
In May 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 122 (FAS 122), "Accounting for
Mortgage Servicing Rights." FAS 122 requires the Association to
recognize as separate assets rights to service mortgage loans for
others, however those servicing rights are acquired. If the Association
acquires mortgage servicing rights through either the purchase or
origination of mortgage loans and sells those loans with servicing
rights retained, the Association should allocate the total cost of the
mortgage loans to mortgage servicing rights and the loans (without the
mortgage servicing rights) based on their relative fair values. The
mortgage servicing rights should be amortized in proportion to and over
the period of estimated net servicing income.
F-10
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A. Summary of Significant Accounting Policies
New Accounting Standards
Accounting for Mortgage Servicing Rights
FAS 122 is effective for fiscal years beginning after December 15,
1995. The Association will be required to adopt FAS 122 for the fiscal
year ending October 31, 1997. The Association believes the adoption of
FAS 122 will not have a material impact on the consolidated financial
statements.
Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities
In June 1996, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 125 (FAS 125), "Accounting for
Transfers and Servicing of Financial Assets and Extinguishment of
Liabilities."
FAS 125 requires that an entity should only recognize those assets that
it controls and liabilities it has incurred. Assets should be
recognized until control has been surrendered, and liabilities should
be recognized until they have been extinguished. Recognition of
financial assets and liabilities will not be affected by the sequence
of transactions unless the effect of the transactions is to maintain
effective control over a transferred financial asset.
FAS 125 is effective for transactions after December 31, 1996. The
Association believes the adoption of FAS 125 will not have a material
effect on the consolidated financial statements.
Reclassifications
Certain reclassifications have been made to the balances as of October
31, 1995 and 1994, with no effect on net income, to be consistent with
the classifications adopted for December 31 and October 31, 1996,
respectively.
Note B. Securities
Securities available for sale consist of the following:
December 31, 1996
-------------------------------------------
Gross Gross Approximate
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
---- ----- ------ -----
(1,000's)
---------------------------------------
(Unaudited)
---------------------------------------
Equity securities:
FHLMC stock ..................... $ 200 $ 2 $ 0 $ 202
FHLB stock ...................... 264 0 0 264
Mortgage-backed securities:
FNMA ............................ 2,598 52 5 2,645
FHLMC ........................... 702 14 0 716
GNMA ............................ 185 6 0 191
------ --- ------ ------
$3,949 $74 $ 5 $4,018
====== === ====== ======
F-11
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note B. Securities
Securities held to maturity consist of the following:
December 31, 1996
--------------------------------------------
Gross Gross Approximate
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
---- ----- ------ -----
(1,000's)
-----------------------------------
(Unaudited)
-----------------------------------
Municipal obligations ............ $225 $0 $ 0 $225
Mortgage-backed securities:
FHLMC ........................... 345 0 4 341
--- - - ---
$570 $0 $ 4 $566
==== == ==== ====
Securities available for sale consist of the following:
October 31, 1996
--------------------------------------------
Gross Gross Approximate
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
---- ----- ------ -----
(1,000's)
-----------------------------------
(Unaudited)
-----------------------------------
Equity securities:
FHLMC stock .................. $ 200 $ 5 $ 0 $ 205
FHLB stock ................... 264 0 0 264
Mortgage-backed securities:
FNMA ......................... 2,698 41 9 2,730
FHLMC ........................ 724 6 5 725
GNMA ......................... 204 5 0 209
--- - - ---
$4,090 $57 $ 14 $4,133
====== === ====== ======
Securities held to maturity consist of the following:
October 31, 1996
--------------------------------------------
Gross Gross Approximate
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
---- ----- ------ -----
(1,000's)
-----------------------------------
(Unaudited)
-----------------------------------
Municipal obligations ........... $245 $0 $ 0 $245
Mortgage-backed securities:
FHLMC .......................... 347 0 3 344
--- - - ---
$592 $0 $ 3 $589
==== == ==== ====
F-12
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note B. Securities
Securities available for sale consist of the following:
October 31, 1995
--------------------------------------------
Gross Gross Approximate
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
---- ----- ------ -----
(1,000's)
-----------------------------------
(Unaudited)
-----------------------------------
Equity securities:
FHLMC stock .................. $ 200 $ 8 $ 0 $ 208
FHLB stock ................... 240 0 0 240
Mortgage-backed securities:
FNMA certificates ............ 1,123 17 1 1,139
FHLMC certificates ........... 982 13 1 994
GNMA certificates ............ 299 10 0 309
--- -- - ---
$2,844 $48 $ 2 $2,890
====== === ====== ======
Securities held to maturity consist of the following:
October 31, 1995
--------------------------------------------
Gross Gross Approximate
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
---- ----- ------ -----
(1,000's)
-----------------------------------
(Unaudited)
-----------------------------------
U. S. Government and federal
agencies:
FHLMC step up .................... $ 500 $0 $ 6 $ 494
Municipal obligations ............. 265 0 0 265
Mortgage-backed securities:
FHLMC certificate ................ 531 1 2 530
--- - - ---
$1,296 $1 $ 8 $1,289
====== == ====== ======
Maturity analysis of securities is summarized as follows:
December 31, 1996
--------------------------------------------
Gross Gross Approximate
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
---- ----- ------ -----
(1,000's)
-----------------------------------------
(Unaudited)
-----------------------------------------
Due in one year or less .......... $ 0 $ 0 $ 15 $ 15
Due after one year through
five years ...................... 0 0 0 0
Due after five years through
ten years ....................... 0 0 0 0
Due after ten years .............. 464 466 210 210
Mortgage-backed securities ....... 3,485 3,552 345 341
----- ----- --- ---
$3,949 $4,018 $570 $566
====== ====== ==== ====
F-13
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note B. Securities
Maturity analysis of securities is summarized as follows:
October 31, 1996
-----------------------------------------------
Securities Securities
Available for Sale Held to Maturity
------------------------- ---------------------
Approximate Approximate
Amortized Market Amortized Market
Cost Value Cost Value
---- ----- ---- -----
(1,000's)
-----------------------------------------------
Due in one year or less ........ $ 0 $ 0 $ 35 $ 35
Due after one year through
five years .................... 0 0 0 0
Due after five years through
ten years ..................... 0 0 0 0
Due after ten years ............ 464 469 210 210
Mortgage-backed securities ..... 3,626 3,664 347 344
----- ----- --- ---
$4,090 $4,133 $592 $589
====== ====== ==== ====
October 31, 1996
-----------------------------------------------
Securities Securities
Available for Sale Held to Maturity
------------------------- ---------------------
Approximate Approximate
Amortized Market Amortized Market
Cost Value Cost Value
---- ----- ---- -----
(1,000's)
-----------------------------------------------
Due in one year or less ........ $ 0 $ 0 $ 126 $ 127
Due after one year through
five years .................... 0 0 559 552
Due after five years through
ten years ..................... 0 0 80 80
Due after ten years ............ 440 448 0 0
Mortgage-backed securities ..... 2,404 2,442 551 530
----- ----- --- ---
$2,844 $2,890 $1,296 $1,289
====== ====== ====== ======
There were no gains or losses on the sale of securities for the two-month
periods ended December 31, 1996 and 1995 and for the years ended October 31,
1996, 1995 and 1994. During 1994, the Association sold FHLB stock for $87,000
at no gain or loss.
Securities at December 31, 1996, October 31, 1996 and 1995, respectively, with
amortized cost of $2,279,000, $2,661,000 and $1,681,000, and approximate
market values of $2,321,000, $2,730,000 and $1,685,000 were pledged to secure
public deposits and for other purposes as required or permitted by law. The
Association had one derivative security at October 31, 1995, which was a FHLMC
Step Up.
As a member of the Federal Home Loan Bank system, the Bank is required to
maintain an investment in capital stock of the Federal Home Loan Bank in an
amount equal to 1% of its outstanding mortgage loans and it has no quoted
market value. For disclosure purposes, such stock is assumed to have a market
value which is equal to cost.
F-14
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note C. Loans Receivable
Loans receivable consisted of the following:
October 31,
December 31, --------------------
1996 1996 1995
---- ---- ----
(1,000's)
------------------------------------
(Unaudited)
-----------
Real estate loans:
One to four family residential ....... $27,822 $27,784 $23,448
Multi-family residential ............. 135 141 174
Commercial ........................... 10,608 9,594 5,560
Construction ......................... 155 76 514
--- -- ---
38,720 37,595 29,696
Other loans:
Deposit accounts ..................... 569 571 1,069
Automobile ........................... 8,729 8,764 7,273
Commercial ........................... 6,819 5,257 4,628
Other loans .......................... 2,712 2,717 2,591
----- ----- -----
Total loans ....................... 18,829 17,309 15,561
Less:
Allowance for loan losses ............ 412 413 255
Specific reserve ..................... 0 0 8
Unearned discounts ................... 0 43 140
Loans in process ..................... 134 0 0
--- - -
Net loans .......................... $57,003 $54,448 $44,854
======= ======= =======
An analysis of the allowance for loan losses is as follows:
December 31, October 31,
-------------------------------------------
1996 1995 1996 1995 1994
---- ---- ---- ---- ----
(1,000's)
--------------------------------------------
(Unaudited)
--------------------------------------------
Balance ............... $413 $255 $255 $288 $367
Provision for losses . 8 4 270 9 24
Loans charged off .... (10) (10) (122) (44) (131)
Recoveries ........... 1 1 10 2 28
--- --- --- --- ---
Balance ............... $412 $250 $413 $255 $288
==== ==== ==== ==== ====
Nonaccrual loans at December 31, 1996, October 31, 1996 and 1995 were $42,000,
$68,000 and $10,000, respectively. Management had not identified any other loans
considered to be impaired as of December 31, 1996, October 31, 1996 and 1995,
respectively.
The weighted average interest rate on loans at December 31, 1996, October 31,
1996 and 1995 was 9.01%, 8.84%, and 8.78%, respectively.
The Association sold participating interest in loans in the amount of $600,000
and $0 for two months ended December 31, 1996 and 1995, respectively, and
$1,138,000, $3,081,000, and $109,000 for the respective years ending October 31,
1996, 1995, and 1994. During the year ended October 31, 1996, the Association
sold one SBA guaranteed commercial real estate loan with unpaid principal
balance of $606,000 at a gain of $45,000.
F-15
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note D. Accrued Interest Receivable
Accrued interest receivable consisted of the following:
October 31,
December 31, -------------------
1996 1996 1995
---- ---- ----
(1,000's) (1,000's)
--------- ----------------
(Unaudited)
-----------
Mortgage loans ....................... $320 $312 $177
Nonmortgage loans .................... 192 193 101
Securities ........................... 6 9 17
---- ---- ----
$518 $514 $295
==== ==== ====
Note E. Premises and Equipment
Premises and equipment consisted of the following:
October 31,
December 31, --------------------
1996 1996 1995
---- ---- ----
(1,000's) (1,000's)
----------- --------------------
(Unaudited)
-----------
Land ................................. $ 313 $ 313 $ 288
Building ............................. 2,252 2,246 2,134
Furniture and equipment .............. 1,153 1,143 1,063
3,718 3,702 3,485
Accumulated depreciation ............. (1,165) (1,138) (988)
------ ------ ----
$ 2,553 $ 2,564 $ 2,497
======= ======= =======
Depreciation included in the consolidated statements of income amounted to
$27,000 and $25,000 for the two-month periods ended December 31, 1996 and 1995
and $165,000, $120,000 and $96,000 for the years ended October 31, 1996, 1995
and 1994, respectively.
Included in the buildings is $186,794 of capitalized interest from the 1985
building project. Amortization of capitalized interest, which is included in
premises, occupancy and equipment expense, amounted to $623 for each of the two
month periods ended December 31, 1996 and 1995, and $3,735 for each of the years
ended October 31, 1996, 1995 and 1994.
The Association has purchased land in Oblong for the construction of a drive-up
facility. At October 31, 1996, there had been no construction and at December
31, 1996 the Association had incurred $130,000 in cost associated with this
project. Total projected cost is $235,000 with completion within the next twelve
months.
F-16
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note F. Deposit Analysis
Deposits consisted of the following:
<TABLE>
<CAPTION>
December 31, October 31,
----------------------- -----------------------------------------------------
1996 1996 1995
----------------------- -------------------- ----------------------
Weighted Weighted Weighted
Average Average Average
Interest Interest Interest
Amount Rate Amount Rate Amount Rate
------ ---- ------ ---- ------ ----
(1,000's)
----------------------------------------------------------------------------------
(Unaudited)
---------------------
<S> <C> <C> <C> <C> <C> <C>
Non-interest bearing ..................... $ 2,790 .00% $ 2,265 .00% $ 1,873 .00%
NOW accounts ............................. 7,313 3.13% 6,717 3.12% 6,055 3.14%
Passbook ................................. 5,515 3.23% 5,540 3.00% 4,124 3.00%
Certificates ............................. 44,024 5.69% 42,169 5.65% 37,352 5.65%
------ ---- ------ ---- ------ ----
Total deposits ......................... $59,642 4.87% $56,691 4.87% $49,404 4.91%
======= ==== ======= ==== ======= ====
</TABLE>
Certificates had the following remaining maturities:
December 31, 1996
-----------------------------------------------------
Less Than One to Two to After
One Year Two Years Three Years Three Years Totals
-------- --------- ----------- ----------- ------
(1,000's)
-----------------------------------------------------
(Unaudited)
-----------------------------------------------------
3.00 to 3.99% ......... $ 307 $ 0 $ 0 $ 0 $ 307
4.00 to 4.99% ......... 20,166 3,907 375 100 24,548
5.00 to 5.99% ......... 10,320 3,366 1,084 4,399 19,169
6.00 to 6.99% ......... 0 0 0 0 0
------- ------ ------ ------ -------
Totals .............. $30,793 $7,273 $1,459 $4,499 $44,024
======= ====== ====== ====== =======
Certificates had the following remaining maturities:
October 31,1996
----------------------------------------------------------
Less Than One to Two to After
One Year Two Years Three Years Three Years Totals
-------- --------- ----------- ----------- ------
(1,000's)
----------------------------------------------------------
3.00 to 3.99% ..... $ 94 $ 0 $ 0 $ 0 $ 94
4.00 to 5.99% ..... 17,859 4,414 590 95 22,958
6.00 to 7.99% ..... 7,911 2,478 2,409 3,697 16,495
8.00 to 9.99% ..... 2,208 250 164 0 2,622
- ---- ---- ----- --- --- - -----
Totals .......... $28,072 $7,142 $3,163 $3,792 $42,169
======= ====== ====== ====== =======
F-17
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note F. Deposit Analysis
October 31, 1995
-------------------------------------------------------
Less Than One to Two to After
One Year Two Years Three Years Three Years Totals
-------- --------- ----------- ----------- ------
(1,000's)
-------------------------------------------------------
3.00 to 3.99% ......... $ 11 $ 0 $ 0 $ 0 $ 11
4.00 to 5.99% ......... 16,611 3,599 1,494 106 21,810
6.00 to 7.99% ......... 4,876 4,005 1,105 1,242 11,228
8.00 to 9.99% ......... 1,748 2,149 250 156 4,303
- ---- ---- ----- ----- --- --- -----
Totals .............. $23,246 $9,753 $2,849 $1,504 $37,352
======= ====== ====== ====== =======
Interest expense on deposits is summarized as follows:
December 31, October 31,
----------------- -------------------------------
1996 1995 1996 1995 1994
---- ---- ---- ---- ----
(1,000's)
----------------------------------------------------
(Unaudited)
-------------
Passbook ............. $ 27 $ 21 $ 156 $ 129 $ 131
NOW accounts ......... 36 32 207 189 195
Certificates ......... 410 357 2,271 1,633 1,120
--- --- ----- ----- -----
$473 $ 410 $2,634 $1,951 $1,446
==== ====== ====== ====== ======
At December 31, 1996, October 31, 1996 and 1995, the Association had
$10,972,000, $10,737,000 and $10,155,000, respectively, of deposit
accounts with balances of $100,000 or more. The Association did not have
brokered deposits at December 31, 1996, October 31, 1996 or 1995. Deposits
in excess of $100,000 are not federally insured.
Note G. Federal Home Loan Bank Advances
The Association has entered into a FHLB advance agreement on March 19,
1991. The agreement covers the terms and collateral requirements. The
daily advances are secured by FHLB stock and a portion of the qualified
mortgage loans of the Association. The Association had outstanding
advances of $2,500,000, $1,500,000 and $0 as of December 31, 1996, October
31, 1996 and 1995, respectively. In addition, the Association had $12,000,
$7,000 and $0 of accrued interest payable as of December 31, 1996, October
31, 1996 and 1995, respectively.
Information concerning FHLB advances is summarized as follows:
October 31,
December 31, ---------------------
1996 1996 1995
---- ---- ----
(Unaudited)
-----------
Average balance ...................... $2,262 $ 367 $ 329
Average interest rate ................ 5.57% 5.72% 6.08%
Maximum month-end balance ............ 2,500 1,500 2,000
F-18
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note H. Retained Earnings
The Association as a member of the Federal Home Loan Bank System is
required to hold a specified number of shares of capital stock, which is
carried at cost, in the Federal Home Loan Bank of Chicago. In addition,
the Association is required to maintain cash and liquid assets in an
amount equal to 5% of its deposit accounts and other obligations due
within one year. The Association has met these requirements.
Federal associations are required to satisfy three capital requirements:
(i) a requirement that "tangible capital" equal or exceed 1.5% of adjusted
total assets, (ii) a requirement that "core-capital" equal or exceed 3% of
adjusted total assets, and (iii) a risk-based capital standard of 8% of
"risk-adjusted" assets. Failure to comply with applicable regulatory
capital requirements can result in capital directives from regulatory
agencies, restrictions on growth, and other limitations on a federal
association's operations. At December 31, 1996, October 31, 1996 and 1995
the Association met each of the three capital requirements.
Generally Accepted Accounting Principles (GAAP) includes the unrealized
gain or loss on securities available for sale as capital. In November of
1994, the Office of Thrift Supervision (OTS) changed the determination of
regulatory capital not to include any unrealized gain or loss on
securities available for sale. As of December 31, 1996, October 31, 1996
and 1995, the Association had $41,000, $27,000 and $28,000 of unrealized
gain on securities available for sale included in GAAP capital.
The following table demonstrates, as of December 31, 1996, the extent to
which the Association exceeds the three minimum capital requirements:
Regulatory Capital
--------------------------------------
Actual Requirement Excess
------ ----------- ------
Tangible capital:
Dollar amount ...................... $ 4,704 $ 1,013 $ 3,691
Percent of tangible assets ......... 6.97% 1.50% 5.47%
Core capital:
Dollar amount ...................... $ 4,704 $ 2,026 $ 2,678
Percent of tangible assets ......... 6.97% 3.00% 3.97%
Risk-based capital:
Dollar amount ...................... $ 5,116 $ 3,993 $ 1,123
Percent of risk-weighted assets .... 10.25% 8.00% 2.25%
The Bank's total risk-weighted assets at December 31, 1996, were
approximately $49,912,000.
Consistent with the increased capital requirements imposed by regulators
of national banks, the core capital requirement for most savings
institutions, including the Association, is expected to rise to a level
ranging from 3% to 5% of adjusted total assets. A proposed regulation
requiring such a change was issued by the Office of Thrift Supervision
(OTS) in April 1991.
F-19
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note I. Income Tax
The components of the provision for income taxes are summarized as
follows:
December 31, October 31,
------------- ----------------------------
1996 1995 1996 1995 1994
---- ---- ---- ---- ----
(1,000's)
-----------------------------------------------
Currently payable: (Unaudited)
----------
Federal .............. $36 $27 $ 147 $162 $167
State ................ 11 4 33 35 30
Deferred:
Federal .............. 0 0 (105) 28 20
State ................ 0 0 (24) 8 4
- - --- - -
$47 $31 $ 51 $233 $221
=== === ===== ==== ====
Income tax expense for the two month periods ended December 31, 1996 and
1995, and the years ended October 31, 1996, 1995 and 1994, has been
provided at an effective rate of approximately 29.5%, 36.9% and 40.0%,
respectively. An analysis of tax expense for the three years setting forth
the reasons for the variations from the federal statutory rates is as
follows:
December 31, October 31,
------------ -----------------------
1996 1995 1996 1995 1994
---- ---- ---- ---- ----
(1,000's)
-------------------------------------
(Unaudited)
-----------
Computed tax at statutory rates$ ........ 41 $27 $ 51 $ 215 $ 198
Increase (decrease) in tax
expense resulting from:
State and local taxes based
on income, net of federal
income tax benefit ................... 6 4 15 28 23
Municipal interest .................... 0 0 (6) (5) (7)
Other ................................. 0 0 (9) (5) 7
- - -- -- -
$47 $31 $ 51 $ 233 $ 221
=== === ===== ===== =====
Under existing provisions of the Internal Revenue Code and similar
sections of the Illinois income tax law, qualifying thrifts may claim bad
debt deductions based on the greater of (1) a specified percentage of
taxable income, as defined, or (2) actual loss experience. If, in the
future, any of the accumulated bad debt deductions are used for any
purpose other than to absorb bad debt losses, gross taxable income may
result and income taxes may be payable.
The Small Business Job Protection Act became law on August 20, 1996. One
of the provisions in this law repealed the reserve method of accounting
for bad debts for thrift institutions so that the bad debt deduction
described in the preceding paragraph will no longer be effective for tax
years beginning after December 31, 1995. The change in the law requires
that the tax bad debt reserves accumulated after October 31, 1988 be
recaptured into taxable income over a six-year period. The start of the
six-year period can be delayed for up to two years if the Association
meets certain residential lending thresholds. Deferred taxes have been
provided on the portion of the tax reserve for loan loss that must be
recaptured.
Retained earnings at October 31, 1996 and 1995 includes approximately
$1,400,000 for which federal income tax has not been provided, which is
adjusted annually. The Association is allowed a special bad debt deduction
limited generally to 8 percent of otherwise taxable income and subject to
certain limitations based on aggregate loans and savings account balances
at the end of the year. If the amounts that qualify as deductions for
federal income tax purposes are later used for purposes other than for bad
debt losses, they will be subject to federal income tax at the then
current corporate rate. The unrecorded deferred tax liability on the above
amounts is approximately $560,000 at a 40% effective tax rate.
F-20
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note I. Income Tax
The tax effects of temporary differences that give rise to the deferred
tax assets and deferred tax liabilities are as follows:
December 31, October 31,
----------- ----------------
1996 1996 1995
---- ---- ----
(1,000's)
---------------------------------
(Unaudited)
-----------
Deferred tax assets:
Allowance for loan losses ................ $119 $119 $ 62
Directors retirement ..................... 36 36 0
155 155 62
Deferred tax liabilities:
Accrual basis adjustment ................. 46 51 81
Depreciation ............................. 173 169 174
FHLB stock ............................... 9 9 10
Allowance for unrealized gain on
securities available for sale .......... 27 17 18
---- ---- ----
255 246 283
--- --- ---
Net deferred tax liabilities .............. $100 $ 91 $221
==== ==== ====
No valuation allowance was required for deferred tax assets at December
31, 1996, October 31, 1996 or 1995.
Note J. Employee Benefit Plans
The Association has established a 401(k) profit sharing plan which covers
all employees with three months of service and minimum age of 21. This
plan allows for individual employees to elect a portion of their salaries
to be deferred with a matching provision of the first four percent of
salary deferral at a rate of twenty-five percent from the Association. The
plan has a five year vesting schedule. Contributions to this plan by the
Association amounted to $0 for each of the two-month periods ended
December 31, 1996 and 1995, respectively, and $3,000, $26,000, and $40,000
for the years ended October 31, 1996, 1995, and 1994, respectively, which
are included in compensation and employee benefits. The Association
accrued $14,000, $0 and $24,000, which is included in accrued expenses at
December 31, 1996, October 31, 1996 and 1995. Total pension cost including
administration and other fees amounted to $14,000 and $0 for each of the
two-month periods ended December 31, 1996 and 1995, respectively, and
$12,000, $27,000, and $42,000 for the years ended October 31, 1996, 1995,
and 1994, respectively, which are included in compensation and employee
benefits.
The Association received $83,000 for the year ended October 31, 1995, from
the termination of the Savings Association Retirement Fund, a deferred
benefit plan. The payment during 1995 was the final payment from this
fund.
The Association approved a directors retirement plan during 1996. The plan
provided for a one-time contribution of $2,000 per year of service for
each director, future contributions of $2,000 per year for each director,
and a discretionary annual contribution for each director using
performance standards similar to those used under the existing 401(k)
plan. Each directors account will include a rate of return equal to the
highest interest rate paid on the Association's one year or less
certificate of deposits. Future annual contributions will be made to each
director as of January 1 of each year starting with January 1, 1998. The
Association's contribution, including prior service, for the year ended
October 31, 1996 was $94,000 with interest of $400. The plan expense is
included in compensation and employee benefits for 1996 with the liability
recorded as a deposit account.
F-21
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F.A. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note K. Economic Dependency
The Association is a nondiscriminatory lender in their market area as
defined by their Community Reinvestment Act. The Association is a full
service institution with facilities located in southeast central Illinois.
The Association has no economic dependency other than the general market
area. Concentration of credit risk has been disclosed in Note C concerning
lending portfolio.
Note L. Commitments and Contingencies
In the normal course of business, the Association has various outstanding
commitments and contingent liabilities that are not reflected in the
accompanying consolidated financial statements. In addition, the
Association 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 statements of the Association.
October 31,
December 31, --------------------
1996 1996 1995
---- ---- ----
(1,000's)
------------------------------------
(Unaudited)
-----------
Fixed rate $87 $538 $ 0
=== ==== ====
Variable rate $1,973 $2,892 $409
====== ====== ====
Interest rates for fixed rate loan commitments at December 31, 1996 and
October 31, 1996 were from 5.00% to 10.00%. Interest rates for variable
rate loan commitments at December 31, and October 31, 1996 were from 8.00%
to 9.75%. Interest rates for variable rate loan commitments at October 31,
1995 were from 8.00% to 10.75%. The Association had unused lines of credit
in the amount of $1,823,000, $2,118,000 and $1,507,000 at December 31,
1996, October 31, 1996 and 1995, respectively. The Association had an
outstanding letter of credit in the amount of $250,000 at December 31,
1996.
The Association's exposure to credit loss in the event of nonperformance
by the other party to the financial instruments for commitments to extend
credit is represented by the contractual notional amount of these
instruments. The Association uses the same credit policies in making
commitments and conditional obligations as it does for on-balance-sheet
instruments.
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 and may require payment of a fee. Since many of the commitments
are expected to expire without being drawn upon, the total commitment
amounts do not necessarily represent future cash requirements. The
Association evaluates each customer's creditworthiness on a case-by-case
basis. The amount and type of collateral obtained, if deemed necessary by
the Association upon extension of credit, varies and is based on
management's credit evaluation of the counterparty.
F-22
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F.A. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note M. Related Parties
The Association has entered into transactions with its directors, and
executive officers, and their affiliates. Such transactions were made in
the ordinary course of business on substantially the same terms and
conditions, including interest rates and collateral, as those prevailing
at the same time for comparable transactions with other customers, and did
not, in the opinion of management, involve more than normal credit risk or
present other unfavorable features. A summary of loans to such related
parties is as follows:
October 31,
December 31, -----------------
1996 1996 1995
---- ---- ----
(1,000's)
----------------------------------
(Unaudited)
-----------
Balance .................... $210 $222 $ 69
New loans................... 34 140 164
Repayments.................. (24) (152) (11)
Balance .................... $220 $210 $222
Note N. Federal Deposit Insurance Corporation's Assessment
In September, 1996, the FDIC imposed the one-time assessment on all SAIF
insured deposits. The Association has included the FDIC assessment in the
amount of $281,000 in SAIF deposit insurance in the consolidated
statements of income for the year ended October 31, 1996.
Note O. Plan of Stock Conversion
On November 12, 1996, the board of directors of the Association adopted a
plan of conversion whereby the Association would convert to a federal
chartered stock savings bank and thereafter to a national bank. The plan
includes, as part of the conversion, the concurrent formation of a holding
company. The plan provides that nontransferable subscription rights to
purchase holding company conversion stock will be offered first to the
Association's eligible account holders of record as of October 31, 1995,
then to the Association's tax-qualified employee stock benefit plan, then
to supplemental eligible account holders then to other members.
Concurrently with, at any time during, or promptly after the subscription
offering, and on a lowest priority basis, an opportunity to subscribe may
also be offered to the general public in a community offering. Thereafter,
if all shares have not been sold, it is anticipated that any remaining
shares will be offered to the general public in an underwritten public
offering. The price of the holding company conversion stock will be based
upon an independent appraisal of the Association and will reflect its
estimated pro forma market value, as converted. The Association has not
filed its application for conversion at December 31, 1996.
Subsequent to conversion, savings account holders and borrowers will not
have voting rights in the Association. Voting rights of the Association
will be vested exclusively with the holding company. Savings deposits will
continue to be insured by the Savings Association Insurance Fund of the
Federal Deposit Insurance Corporation.
All costs associated with the conversion will be deferred and deducted
from the proceeds from the sale of stock. If the Association does not
convert to stock form, such costs will be charged to expense.
For the purpose of granting eligible members of the Association a priority
in the event of future liquidation, the Association will, at the time of
conversion, establish a liquidation account equal to its regulatory
capital as of the date of the latest balance sheet used in the final
conversion offering circular. In the event (and only in such event) of
future liquidation of the converted Association, an eligible savings
account holder who continues to maintain a savings account shall be
entitled to receive a distribution from the liquidation account, in the
proportionate amount of the then current adjusted balance of the savings
deposits then held, before any distributions may be made with respect to
capital stock.
F-23
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note O. Plan of Stock Conversion
Present regulations provide that the Association may not declare or pay a
cash dividend on or repurchase any of its capital stock if the result
thereof would be to reduce the regulatory capital of the Association below
the amount required for the liquidation account or the regulatory capital
requirement. Further, any dividend declared or paid on, or repurchase of,
the Association's capital stock shall be in compliance with the rules and
regulations of the OTS, until the conversion to a national bank, then the
OCC, or other applicable regulations.
Note P. Disclosures about Fair Value of Financial Institutions
In December, 1991, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 107, "Disclosures About
Fair Value of Financial Instruments." This statement extends the existing
fair value disclosure practices for some instruments by requiring all
entities to disclose the fair value of financial instruments (as defined),
both assets and liabilities recognized and not recognized in the
statements of financial condition, for which it is practicable to estimate
fair value.
There are inherent limitations in determining fair value estimates, as
they relate only to specific data based on relevant information at that
time. As a significant percentage of the Association's financial
instruments do not have an active trading market, fair value estimates are
necessarily based on future expected cash flows, credit losses, and other
related factors. Such estimates are accordingly, subjective in nature,
judgmental and involve imprecision. Future events will occur at levels
different from that in the assumptions, and such differences may
significantly affect the estimates.
The statement 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
Association.
Additionally, the tax impact of the unrealized gains or losses has not
been presented or included in the estimates of fair value.
The following methods and assumptions were used by the Association in
estimating its fair value disclosures for financial instruments.
Cash and Cash Equivalents: The carrying amounts reported in the
consolidated statements of financial condition for cash and short-term
instruments approximate those assets' fair values.
Securities: Fair values for securities are based on quoted market
prices, where available. If quoted market prices are not available, fair
values are based on quoted market prices of comparable instruments. No
active market exists for the Federal Home Loan Bank capital stock. The
carrying value is estimated to be fair value since if the Bank withdraws
membership in the Federal Home Loan Bank, the stock must be redeemed for
face value.
Loans Receivable: The fair value of loans was estimated by discounting
the future cash flows using the current rates at which similar loans
would be made to borrowers with similar credit ratings and for the same
remaining maturities.
Deposits: The fair value of savings deposits and certain money market
deposits is the amount payable on demand at the reporting date. The fair
value of fixed-maturity certificates of deposit is estimated using the
rates currently offered for deposits of similar remaining maturities.
Borrowings: The fair value of FHLB advances and other borrowings are
estimated using rates currently available for debt with similar terms
and remaining maturities.
F-24
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F. A. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note P. Disclosures about Fair Value of Financial Institutions
The Association estimates fair value of financial instruments on a
calendar quarter basis to correspond to other regulatory reporting
requirements.
The estimated fair value of the Association's financial instruments are as
follows:
December 31, September 30,
1996 1996
---------------- ------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
------ ----- ------ -----
(1,000's)
-------------------------------------
(Unaudited)
-------------------------------------
ASSETS
Cash and interest bearing deposits .. $ 2,518 $ 2,518 $ 2,449 $ 2,449
Securities available for sale ....... 4,018 4,018 3,927 3,970
Securities held to maturity ......... 570 566 592 589
Loans receivable, net ............... 57,003 57,454 53,998 55,103
LIABILITIES
Deposits ............................ 59,642 59,832 57,069 57,158
FHLB advances ....................... 2,500 2,500 1,500 1,500
F-25
<PAGE>
================================================================================
No person has been authorized to give any information or to make any
representation other than as contained in this Prospectus in connection with the
offering made hereby, and, if given or made, such other information or
representation must not be relied upon as having been authorized by the Holding
Company or the Association. 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 in any jurisdiction in which such offer or solicitation is not authorized
or in which the person making such offer or solicitation is not qualified to do
so, or to any person to whom it is unlawful to make such offer or solicitation
in such jurisdiction. Neither the delivery of this Prospectus nor any sale
hereunder shall under any circumstances create any implication that there has
been no change in the affairs of the Holding Company or the Association since
any of the dates as of which information is furnished herein or since the date
hereof.
-------------
TABLE OF CONTENTS
Page
Prospectus Summary........................................................
Selected Financial Information............................................
Risk Factors..............................................................
Use of Proceeds...........................................................
Dividends.................................................................
Market for Common Stock...................................................
First Robinson Savings and Loan, F.A......................................
First Robinson Financial Corporation......................................
First Robinson Savings Bank, National Association.........................
Pro Forma Data............................................................
Proposed Management Purchases.............................................
Pro Forma Regulatory Capital Analysis.....................................
Capitalization............................................................
Statements of Income......................................................
Management's Discussion and Analysis of
Financial Condition and Results of Operations............................
Business of the Association...............................................
Regulation................................................................
Management................................................................
The Conversion............................................................
Restrictions on Acquisitions of Stock
and Related Takeover Defensive Provisions................................
Description of Capital Stock..............................................
Legal and Tax Matters.....................................................
Experts...................................................................
Additional Information....................................................
Index to Financial Statements............................................. F-1
Until the later of ________, 1997, or 25 days after com mencement of the
offering of Common Stock, all dealers effecting transactions in the registered
securities, whether or not participating in this distribution, may be required
to deliver a prospectus. This is in addition to the obligation of dealers to
deliver a prospectus when acting as underwriters and with respect to their
unsold allotments or subscriptions.
================================================================================
<PAGE>
================================================================================
747,500 Shares
(Anticipated Maximum)
FIRST ROBINSON FINANCIAL
CORPORATION
(Holding Company for First Robinson
Savings and Loan, F.A. to become
First Robinson Savings Bank, National Association)
Common Stock
$10.00 Per Share
Purchase Price
---------------------
PROSPECTUS
---------------------
TRIDENT SECURITIES, INC.
________, 1997
================================================================================
117
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
Set forth below is an estimate of the amount of fees and expenses
(other than underwriting discounts and commissions) to be incurred in connection
with the issuance of the shares.
Counsel fees and expenses............................................. $ 80,000
Accounting fees and expenses.......................................... 30,000
Appraisal and business plan
preparation fees and expenses....................................... 30,000
Conversion Agent fees and expenses.................................... 8,000
Underwriting fees(1) (including financial
advisory fee and expenses)......................................... 88,910
Underwriter's counsel fees and expenses............................... 32,500
Printing, postage and mailing......................................... 50,000
Registration and Filing Fees.......................................... 25,000
Blue Sky fees and expenses............................................ 6,000
Stock Transfer Agent and Certificates................................. 7,500
Other expenses(1)..................................................... 42,090
--------
TOTAL............................................................ $400,000
========
- ------------------
(1) Based on maximum of Estimated Valuation Range.
Item 14. Indemnification of Directors and Officers
Article Eleventh of the Holding Company's Certificate of Incorporation
provides for indemnification of directors and officers of the Holding Company
against any and all liabilities, judgments, fines and reasonable settlements,
costs, expenses and attorneys' fees incurred in any actual, threatened or
potential proceeding, except to the extent that such indemnification is limited
by Delaware law and such law cannot be varied by contract or bylaw. Article
Eleventh also provides for the authority to purchase insurance with respect
thereto.
Section 145 of the General Corporation Law of the State of Delaware
authorizes a corporation's Board of Directors to grant indemnity under certain
circumstances to directors and officers, when made, or threatened to be made,
parties to certain proceedings by reason of such status with the corporation,
against judgments, fines, settlements and expenses, including attorneys' fees.
In addition, under certain circumstances such persons may be indemnified against
expenses actually and reasonably incurred in defense of a proceeding by or on
behalf of the corporation. Similarly, the corporation, under certain
circumstances, is authorized to indemnify directors and officers of other
corporations or enterprises who are serving as such at the request of the
corporation, when such persons are made, or threatened to be made, parties to
certain proceedings by reason of such status, against judgments, fines,
settlements and expenses, including attorneys' fees; and under certain
circumstances, such persons may be indemnified
<PAGE>
against expenses actually and reasonably incurred in connection with the defense
or settlement of a proceeding by or in the right of such other corporation or
enterprise. Indemnification is permitted where such person (i) was acting in
good faith; (ii) was acting in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation or other corporation or
enterprise, as appropriate; (iii) with respect to a criminal proceeding, has no
reasonable cause to believe his conduct was unlawful; and (iv) was not adjudged
to be liable to the corporation or other corporation or enterprise (unless the
court where the proceeding was brought determines that such person is fairly and
reasonably entitled to indemnity).
Unless ordered by a court, indemnification may be made only following a
determination that such indemnification is permissible because the person being
indemnified has met the requisite standard of conduct. Such determination may be
made (i) by the Board of Directors of the Holding Company by a majority vote of
a quorum consisting of directors not at the time parties to such proceeding; or
(ii) if such a quorum cannot be obtained or the quorum so directs, then by
independent legal counsel in a written opinion; or (iii) by the stockholders.
Section 145 also permits expenses incurred by directors and officers in
defending a proceeding to be paid by the corporation in advance of the final
disposition of such proceedings upon the receipt of an undertaking by the
director or officer to repay such amount if it is ultimately determined that he
is not entitled to be indemnified by the corporation against such expenses.
Item 15. Recent Sales of Unregistered Securities
The Registrant is newly incorporated, solely for the purpose of acting
as the holding company of the First Robinson Savings and Loan, F.A. pursuant to
the Plan of Conversion (filed as Exhibit 2 herein), and no sales of its
securities have occurred to date, other than the sale of one share of the
Registrant's stock to its incorporator for the purpose of qualifying the
Registrant to do business in the State of Illinois.
<PAGE>
Item 16. Exhibits and Financial Statement Schedules
(a) Exhibits:
1.1 Letter Agreement regarding management, marketing and
consulting services
1.2 Form of Agency Agreement*
2 Plan of Conversion
3.1 Certificate of Incorporation of the Holding Company
3.2 Bylaws of the Holding Company
3.3 Charter of Association in stock form
3.4 Bylaws of Association in stock form
3.5 Articles of Association of National Bank
3.6 Bylaws of National Bank
4 Form of Stock Certificate of the Holding Company
5 Opinion of Silver, Freedman & Taff, L.L.P. with Respect to Legality
of Stock
8.1 Opinion of Silver, Freedman & Taff, L.L.P. with respect to Federal
income tax consequences of the Stock Conversion*
8.2 Opinion of Larsson, Woodyard & Henson LLP with respect to Illinois
income tax consequences of the Stock Conversion
10.1 Letter Agreement regarding Appraisal Services and Business Plan
Preparation
10.2 Employee Stock Ownership Plan
10.3 Directors Retirement Plan
22 Subsidiaries
24.1 Consent of Silver, Freedman & Taff, L.L.P.
24.2 Consent of Larsson, Woodyard & Henson LLP
24.3 Consent of Ferguson & Company
25 Power of Attorney (set forth on signature page)
99.1 Appraisal
99.2 Proxy Statement and form of proxy to be furnished to the Association's
account holders
99.3 Stock Order Form and Order Form Instructions*
99.4 Certification
99.5 Question and Answer Brochure
99.6 Advertising, Training and Community Informational Meeting
Materials
99.7 Letter of Appraiser with respect to Subscription Rights
* To be filed supplementally or by amendment.
<PAGE>
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;
(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; and
(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 of 1933, 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 deemed to 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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 Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such 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 question whether such indemnification by it is against public
policy as expressed in the Act and it will be governed by the final adjudication
of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act shall be deemed to be part of this Registration
Statement as of the time it was declared effective.
<PAGE>
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of prospectus
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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized in the City of Robinson,
State of Illinois on March 19, 1997.
FIRST ROBINSON FINANCIAL CORPORATION
By:/s/ Rick L. Catt
---------------------------------
Rick L. Catt, President and
Chief Executive Officer
(Duly Authorized Representative)
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Rick L. Catt his true and lawful
attorneys-in-fact and agents, with full power of substitution and
re-substitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement, and to file the same, with all exhibits thereto,
and all other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all said attorneys-in-fact and
agents or their substitutes or substitute may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<PAGE>
/s/ Rick L. Catt /s/ Jamie E. McReynolds
- -------------------------------------- ------------------------------------
Rick L. Catt, Director, Jamie E. McReynolds, Vice President,
President and Chief Executive Officer Secretary and Chief Financial
(Chief Operating Officer) Officer (Principal Financial
Officer)
/s/ Scott F. Pulliam /s/ James D. Goodwine
- -------------------------------------- -----------------------------------
Scott F. Pulliam, Chairman of the Board James D. Goodwine, Director
/s/ Cell T. Keller /s/ William K. Thomas
- -------------------------------------- -----------------------------------
Cell T. Keller, Director William K. Thomas, Director
/s/ Donald K. Inboden
- --------------------------------------
Donald K. Inboden, Director
<PAGE>
As filed with the Securities and Exchange Commission on March 19, 1997
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBITS
TO
FORM S-1
UNDER
THE SECURITIES ACT OF 1933
FIRST ROBINSON FINANCIAL CORPORATION
501 East Main Street
Robinson, Illinois 62454
<PAGE>
EXHIBIT INDEX
Exhibits:
- ---------
1.1 Letter Agreement regarding management, marketing and consulting
services
1.2 Form of Agency Agreement*
2 Plan of Conversion
3.1 Certificate of Incorporation of the Holding Company
3.2 Bylaws of the Holding Company
3.3 Charter of Association in stock form
3.4 Bylaws of Association in stock form
3.5 Articles of Association of National Bank
3.6 Bylaws of National Bank
4 Form of Stock Certificate of the Holding Company
5 Opinion of Silver, Freedman & Taff, L.L.P. with Respect to Legality
of Stock
8.1 Opinion of Silver, Freedman & Taff, L.L.P. with respect to Federal
income tax consequences of the Stock Conversion*
8.2 Opinion of Larsson, Woodyard & Henson LLP with respect to Illinois
income tax consequences of the Stock Conversion
10.1 Letter Agreement regarding Appraisal Services and Business Plan
Preparation
10.2 Employee Stock Ownership Plan
10.3 Directors Retirement Plan
22 Subsidiaries
24.1 Consent of Silver, Freedman & Taff, L.L.P.
24.2 Consent of Larsson, Woodyard & Henson LLP
24.3 Consent of Ferguson & Company
25 Power of Attorney (set forth on signature page)
99.1 Appraisal
99.2 Proxy Statement and form of proxy to be furnished to the
Association's account holders
99.3 Stock Order Form and Order Form Instructions*
99.4 Certification
99.5 Question and Answer Brochure
99.6 Advertising, Training and Community Informational Meeting
Materials
99.7 Letter of Appraiser with respect to Subscription Rights
- ---------------
* To be filed supplementally or by amendment.
EXHIBIT 1.1
TRIDENT SECURITIES, INC. LETTERHEAD
December 19, 1996
Board of Directors
First Robinson Savings & Loan, F.A.
501 East Main Street
Robinson, Illinois 62454
RE: Conversion Stock Marketing Services
Gentlemen:
This letter sets forth the terms of the proposed engagement between Trident
Securities, Inc. ("Trident") and First Robinson Savings & Loan, F.A. (the
"Association") concerning our investment banking services in connection with the
conversion of the Association from a mutual to a capital stock form of
organization.
Trident is prepared to assist the Association in connection with the offering of
its shares of common stock during the subscription offering and community
offering as such terms are defined in the Association's Plan of Conversion (the
"Plan"). The specific terms of the services contemplated hereunder shall be set
forth in a definitive sales agency agreement (the "Agreement") between Trident
and the Association to be executed no later than the date the offering
circular/prospectus is declared effective by the appropriate regulatory
authorities. The price of the shares during the subscription offering and
community offering will be the price established by the Association's Board of
Directors, based upon an independent appraisal as approved by the appropriate
regulatory authorities.
Trident will act as financial advisor and exercise its best efforts to assist
the Association in the sale of its common stock during the subscription offering
and community offering. Additionally, Trident may enter into agreements with
other National Association of Securities Dealers, Inc., ("NASD") member firms to
act as selected dealers, assisting in the sale of the common stock. Trident and
the Association will jointly determine the selected dealers to assist the
Association during the community offering. At the appropriate time, Trident in
conjunction with its counsel, will conduct an examination of the relevant
documents and records of the Association as Trident deems necessary and
appropriate. The Association will use its best efforts to make all documents,
records and other information reasonably deemed necessary by Trident or its
counsel available to them upon request.
For its services hereunder, Trident will receive the following compensation and
reimbursement from the Association:
1. A commission equal to 1.70% of the aggregate dollar amount of
capital stock sold to investors who reside in Crawford County,
Illinois, a commission equal to 1.45% on sales to investors
residing in contiguous Illinois counties, a commission equal
to 1.20% on sales to investors residing in other Illinois
counties and a
<PAGE>
commission equal to 0.95% on sales to investors residing
outside the state of Illinois. No commission shall be payable
on shares purchased by officers, directors, employees or their
associates or employee benefit plans. Further, all commissions
shall be based on the amount of stock sold; however, for the
purpose of calculating Trident's commission, it shall be
assumed that the amount of stock sold shall not be in excess
of the midpoint of the appraised value as stated on the final
Prospectus cover.
An engagement fee of $8,500 has been enclosed, which $8,500 shall be
deducted from the commission payable to Trident upon closing of the offering.
Illustrative examples (which assume that the midpoint of the valuation
range disclosed in the final Prospectus is $6.3 million) of the calculation of
the commission follow:
Scenario 1
Assume 100% of stock sold to Investors in Crawford County, Illinois:
$1,500,000 x 0% = $0.00 (ESOP and Insiders) $4,800,000 x 1.70% =
$81,600 Maximum Possible Fee or 1.29% of total offering
Scenario 2
Assume 75% of stock sold to Investors in Crawford County, Illinois: $1,500,000
x 0% = $0.00 (ESOP and Insiders) $3,225,000 x 1.70% = $54,825
Assume 15% of stock sold to Investors in Contiguous Counties:
$945,000 x 1.45% = $13,703
Assume 10% of stock sold to other Illinois Investors:
$630,000 x 1.20% = $7,560
Total Commissions: $76,088 or 1.21% of total offering
Scenario 3
Assume 40% of stock sold to Investors in Crawford County, Illinois: $1,500,00
x 0% = $0.00 (ESOP and Insiders) $1,020,000 x 1.70% = $17,340
Assume 20% of stock sold to Investor in Contiguous Counties:
$1,260,000 x 1.45% = $18,270
Assume 20% of stock sold to Investors in other Illinois Counties:
$1,260,000 x 1.20% = $15,120
Assume 20% of stock sold to Investors outside the state of Illinois:
$1,260,000 x 0.95% = $11,970
Total Commissions: $62,700 or 0.995% of total offering
Scenario 4
Assume $8,332,000 Super Maximum sold in Offering
Assume $996,000 of stock purchases by Officers and Directors
<PAGE>
Assume Orders for $10,000,000 are received
1) ESOP at 8% of Super Maximum equals $666,560
2) Officers' and Directors' purchases equal $996,000 (or
as stated in Prospectus)
3) 40% or $3,332,800 sold locally (this would also
include ESOP and Officer/Director purchases)
4) 20% or $1,666,400 sold in the contiguous counties
5) 20% or $1,666,400 sold to other Illinois investors
6) 20% or $1,666,400 sold to investors outside Illinois
To determine fees, the above percentages would be applied to the
offering as if it had closed at the $6.3 Million assumed midpoint or the
ultimate offering midpoint disclosed on the cover of the final Prospectus and
the fee schedule would be identical to Scenario #3, above.
2. For stock sold by other NASD member firms under selected
dealer's agreements, the commission shall not exceed a fee to
be agreed upon jointly by Trident and the Association to
reflect market requirements at the time of the stock
allocation in a Syndicated Community Offering.
3. The foregoing fees and commissions are to be payable to
Trident at closing as defined in the Agreement to be entered
into between the Association and Trident.
4. Trident shall be reimbursed for allocable expenses incurred by
them, including legal fees, whether or not the Agreement is
consummated. In this respect, Trident's out-of-pocket expenses
will not exceed $8,500 and its legal fees will not exceed
$24,000 and $6,000 for "Blue Sky" work. Out-of-pocket expenses
will be billed monthly as incurred up to the $8,500 limit.
It further is understood that the Association will pay all other expenses of the
conversion including but not limited to its attorneys' fees (including
out-of-pocket expenses), NASD filing fees, and filing and registration fees and
fees of Trident's attorneys relating to any required state securities law
filings, telephone charges, air freight, rental equipment, supplies, transfer
agent charges, fees relating to auditing and accounting and costs of printing
all documents necessary in connection with the foregoing.
For purposes of Trident's obligation to file certain documents and to make
certain representation to the NASD in connection with the conversion, the
Association warrants that: (a) the Association has not privately placed any
securities within the last 18 months; (b) there have been no material dealings
within the last 12 months between the Association and any NASD member or any
person related to or associated with any such member; (c) none of the officers
or directors of the Association has any affiliation with the NASD; (d) except as
contemplated by this engagement letter with Trident, the Association has no
financial or management consulting contracts outstanding with any other person;
(e) the Association has not granted Trident a right of first refusal with
respect to the underwriting of any future offering of the Association stock; and
(f) there has been no intermediary between Trident and the Association in
connection with the public offering of the Association's shares, and no person
is being compensated in any manner for providing such service.
<PAGE>
The Association agrees to indemnify and hold Trident and its affiliates (as
defined in Rule 405 under the Securities act of 1933, as amended) and their
respective directors, officers, employees, agents and controlling persons
(Trident and each such person being an "Indemnified Party") harmless from and
against any and all losses, claims, damages and liabilities (or actions,
including shareholder actions, in respect thereof), joint or several, to which
such Indemnified Party may become subject under any applicable federal or state
law, or otherwise, and related to or arising out of the performance by Trident
of the services contemplated by, or the engagement of Trident and will reimburse
any Indemnified Party for all expenses (including reasonable counsel fees and
expenses) as they are incurred in connection with the investigation of,
preparation for or defense arising therefrom, whether or not such Indemnified
Party is a party and whether or not such claim, action or proceeding is
initiated or bought by the Association. The Association will not be liable to
any Indemnified Party under the foregoing indemnification provision (i) in any
settlement by an Indemnified Party effected without its prior written consent;
or (ii) to the extent that any loss, claim, damage or liability is found in a
final judgement by a court of competent jurisdiction to have resulted primarily
from Trident's bad faith, willful misconduct or gross negligence.
Trident agrees to indemnify and hold the Association and its affiliates (as
defined in Rule 405 under the Securities Act of 1933, as amended) and its
respective directors, officers, employees, agents and controlling persons (the
Association, its holding company and each such person being an "Indemnified
Party") harmless from and against any and all losses, claims, damages and
liabilities (or actions, including shareholder actions, in respect thereof),
joint or several, to which such Indemnified Party may become subject under any
applicable federal or state law, or which such Indemnified Party may become
subject under any applicable federal or state law, or otherwise, and related to
or arising out of the bad faith, willful misconduct or gross negligence of
Trident, as found in a final judgement by a court of competent jurisdiction, in
the performance by Trident of the services contemplated by, or the engagement of
Trident and will reimburse any Indemnified Party for all expenses (including
reasonable counsel fees and expenses) in connection with the investigation of,
preparation for or defense arising therefrom, whether or not such Indemnified
Party is a party and whether or not such claim, action or proceeding is
initiated or brought by Trident. Trident will not be liable to any Indemnified
Party under the foregoing indemnification provision (i) in any settlement by an
Indemnified Party effected without its prior written consent; or (ii) to the
extent that any loss, claim, damage or liability is found in a final judgement
by a court of competent jurisdiction to have resulted primarily from the
Association's bad faith, willful misconduct or gross negligence.
As promptly as possible after receipt by an Indemnified Party of notice of an
intention to commence, or the commencement of, any action, suit or proceeding
for which an Indemnified Party may seek indemnification, an Indemnified Party
shall notify the indemnifying party in writing thereof, enclosing a copy of all
letters or documents received and/or papers served; provided that a failure or
delay in giving any such notice shall not affect the obligation of the
indemnifying party to indemnify the Indemnified Party, unless and to the extent
that such failure or delay materially adversely affects the indemnifying party.
In case any such action, suit or proceeding shall be brought against an
Indemnified Party, the indemnifying party shall be
<PAGE>
entitled to participate therein and, to the extent that it shall wish, to assume
the defense thereof. After notice form the indemnifying party to any Indemnified
Party of the same's election to assume the defense thereof, the indemnifying
party shall not be liable to an Indemnified Party for any legal fees or other
expenses subsequently incurred by an Indemnified Party in the defense thereof,
other than for reasonable costs or investigation and except as provided in the
next paragraph.
An Indemnified Party shall have the right to employ its or his own counsel in
any such action, suit or proceeding, but in such event the Indemnified Party's
legal fees and other expenses shall not be reimbursed by the indemnifying party
unless (i) the employment of such counsel has been requested by the Indemnified
Party and authorized by the indemnifying party of (ii) the Indemnified Party
shall have reasonably concluded that there may be a conflict of interest between
the indemnifying party and the Indemnified Party in the defense of such action,
suit or proceeding. In the event the Indemnified Party concludes that there may
be such a conflict of interest, (i) the indemnifying party shall not have the
right to assume and direct the defense of such action, suit or proceeding on
behalf of the Indemnified Party and (ii) the indemnifying party shall indemnify
the Indemnified Party for all reasonable legal fees and other expenses
reasonably incurred by the Indemnified Party, but the indemnifying party shall
not be liable for any settlement or negotiated disposition of such action, suit
or proceeding or any part thereof effected without the written consent of the
indemnifying party.
If the indemnification provided for in this agreement is for any reason held
unenforceable by an Indemnified Party, the Association agrees to contribute to
the losses, claims, damages and liabilities for which such indemnification is
held unenforceable (i) in such proportion as is appropriate to reflect the
relative benefits to the Association, on the one hand, and trident on the other
hand, of the transaction as contemplated (whether or not the transaction is
consummated) or, (ii) if (but only if) the allocation provided for in clause (i)
is for any reason unenforceable, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) but also the relative
fault of the Association, on the one hand, and Trident on the other hand, as
well as other relevant equitable considerations. The Association agrees that for
the purposes of this paragraph, the relative benefits of the Association and
Trident of the transaction as contemplated shall be deemed to the in the same
proportion that the total value received or contemplated to be received by the
Association or its shareholders, as the case may be, as a result of or in
connection with the transaction bears to the fees paid or to be paid to Trident
under this legal agreement.
The Association and Trident each agree that without each other's prior written
consent, which shall not be unreasonably withheld, neither will settle,
compromise or consent to the entry of any judgement in any pending or threatened
claim, action or proceeding in respect of which indemnification could be sought
under the indemnification provision of this letter agreement (whether or not
Trident, the Association or any other Indemnified Party is an actual or
potential party to such claim action or proceeding), unless such settlement,
compromise or consent includes an unconditional release of each Indemnified
Party from all liability arising out of such claim, action or proceeding.
Notwithstanding the above, to the extent that the Association's indemnification
or contribution
<PAGE>
is a "covered transaction" as defined in 12 U.S.C. 371c(b)(7), the Association's
holding company shall assume the Association's obligation to indemnify or
contribute.
This letter is merely a statement of intent and is not a binding legal agreement
except as to paragraph (4) above with regard to the obligation to reimburse
Trident for allocable expenses to be incurred prior to the execution of the
Agreement, the indemnity described herein, and the Association agree in
principle to the contents hereof and propose to proceed promptly, and in good
faith, to work out the arrangements with respect to the proposed offering, any
legal obligations between Trident and the Association shall be only as set forth
in a duly executed Agreement. Such Agreement shall be in form and content
satisfactory to Trident and the Association, as well as their counsel, and
Trident's obligations thereunder shall be subject to, among other things, there
being in Trident's opinion no material adverse change in the condition or
obligations of the Association or no market conditions which might render the
sale of the shares by the Association hereby contemplated inadvisable.
Trident agrees to maintain in confidence all information and documents (to be
read in the broadest sense) received from the Association, and not to disclose
any such information or documents except to Trident's officers, directors,
counsel and representatives who need to know such information for the purpose of
evaluating the transaction and who will, prior to being provided such
information or documents, agree to be bound by the terms of this agreement,
unless disclosure is required by law or regulation, in which case Trident will
provide timely notice so that the Association may seek a protective order or
other appropriate remedy and/or permit disclosure of only that portion of such
information or documents which is legally required to be disclosed.
Please acknowledge your agreement to the foregoing by signing below and
returning to Trident one copy of this letter. Trident acknowledges receipt of
the advance payment of $8,500.
Yours very truly,
TRIDENT
SECURITIES, INC.
By: /s/ Timothy E. Lavelle
Timothy E. Lavelle
Managing Director
TEL/cs
11-14-1
Agreed and accepted to this 20th day of December, 1996
FIRST ROBINSON SAVINGS AND LOAN, F.A.
By: /s/ Rick L. Catt
Rick L. Catt
President
EXHIBIT 2
PLAN OF CONVERSION
<PAGE>
FIRST ROBINSON SAVINGS & LOAN, F.A.
Robinson, Illinois
PLAN OF CONVERSION
From Mutual to Stock Form of Organization
and From a Savings Association to a National Bank
I. GENERAL
On November 12, 1996, the Board of Directors of the Association adopted
this Plan of Conversion whereby the Association will convert from a federal
mutual savings and loan association to a federal stock savings association and
then from a federal stock savings association to a national bank. The Plan
includes as part of the conversion, the concurrent formation of a holding
company, to be named in the future. The Plan provides that non-transferable
subscription rights to purchase Holding Company Conversion Stock will be offered
first to Eligible Account Holders of record as of the Eligibility Record Date,
then to the Association's Tax-Qualified Employee Plans, then to Supplemental
Eligible Account Holders of record as of the Supplemental Eligibility Record
Date, then to Other Members, and then to directors, officers and employees.
Concurrently with, at any time during, or promptly after the Subscription
Offering, and on a lowest priority basis, an opportunity to subscribe may also
be offered to the general public in a Direct Community Offering. The price of
the Holding Company Conversion Stock will be based upon an independent appraisal
of the Association and will reflect its estimated pro forma market value, as
converted. It is the desire of the Board of Directors of the Association to
attract new capital to the Association in order to increase its capital, support
future savings growth and accommodate or facilitate future growth opportunities.
The Converted Association is also expected to benefit from its management and
other personnel having a stock ownership in its business, since stock ownership
is viewed as an effective performance incentive and a means of attracting,
retaining and compensating management and other personnel. No change will be
made in the Board of Directors or management as a result of the Conversion.
The conversion of the Association to the Converted Association is
referred to herein as the "Stock Conversion," the conversion of the Converted
Association to the National Bank is referred to herein as the "Bank Conversion"
and the Stock Conversion and the Bank Conversion are referred to herein
collectively as the "Conversion."
II. DEFINITIONS
Acting in Concert: The term "acting in concert" shall have the same
meaning given it in ss.574.2(c) of the Rules and Regulations of the OTS.
Actual Subscription Price: The price per share, determined as provided
in Section VII of the Plan, at which Holding Company Conversion Stock will be
sold in the Subscription Offering.
Affiliate: An "affiliate" of, or a Person "affiliated" with, a
specified Person, is a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by or is under common control with,
the Person specified.
Associate: The term "associate," when used to indicate a relationship
with any Person, means (i) any corporation or organization (other than the
Holding Company, the Association or a majority-owned subsidiary of the Holding
Company) of which such Person is an officer or partner or is, directly or
indirectly, the beneficial
<PAGE>
owner of ten percent or more of any class of equity securities, (ii) any trust
or other estate in which such Person has a substantial beneficial interest or as
to which such Person serves as trustee or in a similar fiduciary capacity, and
(iii) any relative or spouse of such Person, or any relative of such spouse, who
has the same home as such Person or who is a director or officer of the Holding
Company or the Association or any subsidiary of the Association; provided,
however, that any Tax-Qualified or Non-Tax-Qualified Employee Plan shall not be
deemed to be an associate of any director or officer of the Holding Company or
the Association, to the extent provided in Section VI hereof.
Association: First Robinson Savings & Loan, F.A., or such other name as
the institution may adopt.
Bank Conversion: The conversion of the Converted Association from a
federally chartered stock savings association to a national bank ("National
Bank").
BIF: Bank Insurance Fund.
Capital Stock: Any and all authorized shares of stock of the Converted
Association after the Stock Conversion.
Conversion: Except as provided in Section III.F., the term "Conversion"
means the Stock Conversion and the Bank Conversion.
Converted Association: The federally chartered stock savings
institution resulting from the conversion of the Association in accordance with
the Plan.
Deposit Account: Any withdrawable or repurchasable account or deposit
in excess of $50 in the Association.
Direct Community Offering: The offering to the general public of any
unsubscribed shares which may be effected as provided in Section VI hereof.
Eligibility Record Date: The close of business on October 31, 1995.
Eligible Account Holder: Any Person holding a Qualifying Deposit in the
Association on the Eligibility Record Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
2
<PAGE>
FRB: The Board of Governors of the Federal Reserve System.
Holding Company: A corporation which upon completion of the Stock
Conversion will own all of the outstanding common stock of the Converted
Association, the name of which will be selected in the future, through the
issuance and sale of the Holding Company Conversion Stock under the Plan and the
concurrent acquisition of 100% of the Capital Stock to be issued and sold
pursuant to the Plan in connection with the Stock Conversion, and following the
Bank Conversion, the bank holding company for the National Bank.
Holding Company Conversion Stock: Shares of common stock, par value
$.01 per share, to be issued and sold by the Holding Company as a part of the
Conversion; provided, however, that for purposes of calculating Subscription
Rights and maximum purchase limitations under the Plan, references to the number
of shares of Holding Company Conversion Stock shall refer to the number of
shares offered in the Subscription Offering.
Market Maker: A dealer (i.e., any Person who engages directly or
indirectly as agent, broker or principal in the business of offering, buying,
selling, or otherwise dealing or trading in securities issued by another Person)
who, with respect to a particular security, (i) regularly publishes bona fide,
competitive bid and offer quotations in a recognized inter-dealer quotation
system; or (ii) furnishes bona fide competitive bid and offer quotations on
request; and (iii) is ready, willing, and able to effect transactions in
reasonable quantities at his quoted prices with other brokers or dealers.
Maximum Subscription Price: The price per share of Holding Company
Conversion Stock to be paid initially by subscribers in the Subscription
Offering.
Member: Any Person or entity that qualifies as a member of the
Association pursuant to its mutual charter and bylaws.
National Bank: The national bank resulting from the Bank Conversion.
Non-Tax-Qualified Employee Plan: Any defined benefit plan or defined
contribution plan of the Association or Holding Company, such as an employee
stock ownership plan, stock bonus plan, profit-sharing plan or other plan, which
with its related trust does not meet the requirements to be "qualified" under
Section 401 of the Internal Revenue Code.
OCC: Office of the Comptroller of the Currency, Department of the
Treasury.
OCC Conversion Application: The application submitted to the OCC for
approval of the Bank Conversion.
OTS: Office of Thrift Supervision, Department of the Treasury.
OTS Bank Conversion Application: The application submitted to the OTS
for approval of the Bank Conversion.
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OTS Conversion Application: The application submitted to the OTS on
Form AC.
Officer: An executive officer of the Association or the Holding
Company, including the Chairman of the Board, President, Executive Vice
Presidents, Senior Vice Presidents in charge of principal business functions,
Secretary and Treasurer.
Order Forms: Forms to be used in the Subscription Offering to exercise
Subscription Rights.
Other Members: Members of the Association, other than Eligible Account
Holders, Tax-Qualified Employee Plans or Supplemental Eligible Account Holders,
as of the Voting Record Date.
Person: An individual, a corporation, a partnership, an association, a
joint-stock company, a trust, any unincorporated organization, or a government
or political subdivision thereof, including the formation of the Holding
Company.
Plan: This Plan of Conversion, which provides for the conversion of the
Association from a federally chartered mutual savings association to a federally
chartered stock savings association, and the subsequent conversion of the
Converted Association from a federally chartered stock savings association to a
national bank, including any amendment approved as provided in this Plan.
Public Offering: The offering for sale by the Underwriters to the
general public of any shares of Holding Company Conversion Stock not subscribed
for in the Subscription Offering or the Direct Community Offering.
Public Offering Price: The price per share at which any unsubscribed
shares of Holding Company Conversion Stock are initially offered for sale in the
Public Offering.
Qualifying Deposit: The aggregate balance of each Deposit Account of an
Eligible Account Holder as of the Eligibility Record Date or of a Supplemental
Eligible Account Holder as of the Supplemental Eligibility Record Date.
SAIF: The Savings Association Insurance Fund.
SEC: The Securities and Exchange Commission.
Special Meeting: The Special Meeting of Members called for the purpose
of considering and voting upon the Plan of Conversion.
Stock Conversion: The Conversion of the Association to the Converted
Association.
Subscription Offering: The offering of shares of Holding Company
Conversion Stock for subscription and purchase pursuant to Section VI of the
Plan.
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Subscription Rights: Non-transferable, non-negotiable, personal rights
of the Association's Eligible Account Holders, Tax-Qualified Employee Plans,
Supplemental Eligible Account Holders, Other Members, and directors, Officers
and employees to subscribe for shares of Holding Company Conversion Stock in the
Subscription Offering.
Supplemental Eligibility Record Date: The last day of the calendar
quarter preceding approval of the Plan by the OTS.
Supplemental Eligible Account Holder: Any person holding a Qualifying
Deposit in the Association (other than an officer or director and their
associates) on the Supplemental Eligibility Record Date.
Tax-Qualified Employee Plans: Any defined benefit plan or defined
contribution plan of the Association or Holding Company, such as an employee
stock ownership plan, stock bonus plan, profit-sharing plan or other plan, which
with its related trust meets the requirements to be "qualified" under Section
401 of the Internal Revenue Code.
Underwriters: The investment banking firm or firms agreeing to purchase
Holding Company Conversion Stock in order to offer and sell such Holding Company
Conversion Stock in the Public Offering.
Voting Record Date: The date set by the Board of Directors in
accordance with federal regulations for determining Members eligible to vote at
the Special Meeting.
III. STEPS PRIOR TO SUBMISSION OF THE PLAN TO THE MEMBERS FOR APPROVAL
Prior to submission of the Plan to its Members for approval, the
Association must receive approval from the OTS for consummation of the Stock
Conversion. The following steps must be taken prior to such regulatory approval:
A. The Board of Directors shall adopt the Plan by not less than a
two-thirds vote.
B. The Association shall notify its Members of the adoption of the
Plan by publishing a statement in a newspaper having a general
circulation in each community in which the Association maintains an
office.
C. Copies of the Plan adopted by the Board of Directors shall be
made available for inspection at each office of the Association.
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D. The Association will promptly cause an OTS Conversion
Application, OTS Bank Conversion Application and an OTS Holding Company
Application on Form H-(e)1-S to be prepared and filed with the OTS; an
FRB Holding Company Application on Form Y-3 to be prepared and filed
with the FRB; an OCC Conversion Application to be prepared and filed
with the OCC; and a Registration Statement on Form S-1 to be prepared
and filed with the SEC..
E. Upon filing of the OTS Conversion Application, the Association
shall notify its Members that it has filed the OTS Conversion
Application by posting notice in each of its offices and by publishing
notice in a newspaper having general circulation in each community in
which the Association maintains an office.
F. The Board of Directors of the Association, by majority vote, may,
at any time, and notwithstanding any language in this Plan to the
contrary elect not to proceed with the Bank Conversion, in which event
the FRB Holding Company Application, the OCC Conversion Application and
the OTS Bank Conversion Application may be withdrawn or abandoned. In
the event the Bank Conversion is not pursued, any references to the
Bank Conversion in this Plan shall be disregarded.
IV. CONVERSION PROCEDURE
Upon receipt of all regulatory approvals required for consummation of
the Stock Conversion, the Association shall convene the Special Meeting
scheduled in accordance with the Association's Bylaws to vote on the Plan.
Promptly after receipt of OTS approval of the OTS Conversion Application and at
least 20 days but not more than 45 days prior to the Special Meeting, the
Association will distribute proxy solicitation materials to all voting Members
as of the Voting Record Date established for voting at the Special Meeting.
Proxy materials will also be sent to each beneficial holder of an Individual
Retirement Account where the name of the beneficial holder is disclosed on the
Association's records. The proxy solicitation materials will include a copy of
the Proxy Statement and other documents authorized for use by the regulatory
authorities and may also include a Subscription and Community Prospectus as
provided in Section VI below. The Association will also advise each Eligible
Account Holder and Supplemental Eligible Account Holder not entitled to vote at
the Special Meeting of the proposed Conversion and the scheduled Special Meeting
and provide a postage paid card on which to indicate whether he or she wishes to
receive the Subscription and Community Prospectus, if the Subscription Offering
is not held concurrently with the proxy solicitation of Members for the Special
Meeting.
Pursuant to applicable regulations, an affirmative vote of at least a
majority of the total outstanding votes of the Members will be required for
approval of the Plan. Voting may be in person or by proxy.
By voting in favor of the adoption of the Plan and the Conversion, the
Members will be voting in favor of (i) the Stock Conversion and the adoption by
the Association of the Federal Stock Charter and Bylaws in the forms attached as
Exhibits A and B to this Plan and (ii) the subsequent Bank Conversion and the
adoption by the Converted Association of the national bank articles of
association and bylaws in the forms attached as
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Exhibits C and D to this Plan. Failure to pursue or receive regulatory approval
for the Bank Conversion shall have no effect on the vote with respect to the
Stock Conversion.
The Holding Company Conversion Stock will be offered for sale in the
Subscription Offering at the Maximum Subscription Price to Eligible Account
Holders, Tax-Qualified Employee Plans, Supplemental Eligible Account Holders,
Other Members and directors, Officers and employees of the Association, prior to
or within 45 days after the date of the Special Meeting. The Association may,
either concurrently with, at any time during, or promptly after the Subscription
Offering, also offer the Holding Company Conversion Stock to and accept
subscriptions from other Persons in a Direct Community Offering; provided that
the Association's Eligible Account Holders, Tax-Qualified Employee Plans,
Supplemental Eligible Account Holders, Other Members and directors, Officers and
employees shall have the priority rights to subscribe for Holding Company
Conversion Stock set forth in Section VI of this Plan. However, the Holding
Company and the Association may delay commencing the Subscription Offering
beyond such 45 day period in the event there exist unforeseen material adverse
market or financial conditions. If the Subscription Offering commences prior to
the Special Meeting, subscriptions will be accepted subject to the approval of
the Plan at the Special Meeting.
The period for the Subscription Offering and Direct Community Offering
will be not less than 20 days nor more than 45 days unless extended by the
Association. Upon completion of the Subscription Offering and the Direct
Community Offering, if any, any unsubscribed shares of Holding Company
Conversion Stock will, if feasible, be sold to the Underwriters for resale to
the general public in the Public Offering. If for any reason the Public Offering
of all shares not sold in the Subscription Offering and Direct Community
Offering cannot be effected, the Holding Company and the Association will use
their best efforts to obtain other purchasers, subject to OTS approval.
Completion of the sale of all shares of Holding Company Conversion Stock not
sold in the Subscription Offering and Direct Community Offering is required
within 45 days after termination of the Subscription Offering, subject to
extension of such 45 day period by the Holding Company and the Association with
the approval of the OTS. The Holding Company and the Association may jointly
seek one or more extensions of such 45 day period if necessary to complete the
sale of all shares of Holding Company Conversion Stock. In connection with such
extensions, subscribers and other purchasers will be permitted to increase,
decrease or rescind their subscriptions or purchase orders to the extent
required by the OTS in approving the extensions. Completion of the sale of all
shares of Holding Company Conversion Stock is required within 24 months after
the date of the Special Meeting.
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V. CONSUMMATION OF CONVERSION
A. Consummation of the Stock Conversion.
The date of consummation of the Stock Conversion will be the
effective date of the amendment of the Association's federal mutual
charter to read in the form of a federal stock charter, which shall be
the date of the sale of the Holding Company Conversion Stock. After
receipt of all orders for Holding Company Conversion Stock, and
concurrently with the execution thereof, the amendment of the
Association's federal mutual charter and bylaws to authorize the
issuance of shares of Capital Stock and to conform to the requirements
of a federal capital stock savings association will be declared
effective by the OTS, the amended bylaws approved by the Members will
become effective, and the Association will thereby be and become the
Converted Association. At such time, the Holding Company Conversion
Stock will be issued and sold by the Holding Company, the Capital Stock
to be issued in the Conversion will be issued and sold to the Holding
Company, and the Converted Association will become a wholly owned
subsidiary of the Holding Company. The Converted Association will issue
to the Holding Company 100% of its common stock, representing all of
the shares of Capital Stock to be issued by the Converted Association
in the Stock Conversion, and the Holding Company will make payment to
the Converted Association of that portion of the aggregate net proceeds
realized by the Holding Company from the sale of the Holding Company
Conversion Stock under the Plan as is necessary to increase the
Converted Association's tangible capital to at least 10% of its
adjusted total assets, or such other portion of the aggregate net
proceeds as may be authorized or required by the OTS.
B. Consummation of the Bank Conversion.
The Bank Conversion shall be deemed to occur and shall be
effective upon completion of all actions necessary or appropriate under
applicable federal statutes and regulations and the policies of the
FRB, the OCC and the OTS to complete the conversion of the Converted
Association to a national bank, including without limitation, the
approval of the Bank Conversion by the Holding Company, as the sole
shareholder of the Converted Association, whereupon the Converted
Association will thereby be and become the National Bank. The Bank
Conversion shall be consummated as soon as reasonably practicable
following the consummation of the Stock Conversion as described in
Section VI herein.
VI. STOCK OFFERING
A. Total Number of Shares and Purchase Price of Conversion Stock
The total number of shares of Holding Company Conversion Stock to be
issued and sold in the Conversion will be determined by the Boards of Directors
of the Association and the Holding Company prior to the commencement of the
Subscription Offering, subject to adjustment if necessitated by market or
financial conditions prior to consummation of the Conversion. The total number
of shares of Holding Company Conversion Stock shall also be subject to increase
in connection with any oversubscriptions in the Subscription Offering or Direct
Community Offering.
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The aggregate price for which all shares of Holding Company Conversion
Stock will be sold will be based on an independent appraisal of the estimated
total pro forma market value of the Holding Company and the Converted
Association. Such appraisal shall be performed in accordance with OTS guidelines
and will be updated as appropriate under or required by applicable regulations.
The appraisal will be made by an independent investment banking or
financial consulting firm experienced in the area of thrift institution
appraisals. The appraisal will include, among other things, an analysis of the
historical and pro forma operating results and net worth of the Converted
Association in accordance with applicable regulations.
Based upon the independent appraisal, the Board of Directors of the
Holding Company and the Association will jointly fix the Maximum Subscription
Price.
If, following completion of the Subscription Offering and Direct
Community Offering, a Public Offering is effected, the Actual Subscription Price
for each share of Holding Company Conversion Stock will be the same as the
Public Offering Price at which unsubscribed shares of Holding Company Conversion
Stock are initially offered for sale by the Underwriters in the Public Offering.
The Public Offering Price will be a price negotiated by the Holding Company and
the Association with the Underwriters, not in excess of the Maximum Subscription
Price. The price paid by the Underwriters for each unsubscribed share will be
the Public Offering Price less a negotiated underwriting discount.
If, upon completion of the Subscription Offering and Direct Community
Offering, all of the Holding Company Conversion Stock is subscribed for or only
a limited number of shares remain unsubscribed for, or if a Public Offering
otherwise cannot be effected, the Actual Subscription Price for each share of
Holding Company Conversion Stock will be determined by dividing the estimated
appraised aggregate pro forma market value of the Holding Company and the
Converted Association, based on the independent appraisal as updated upon
completion of the Subscription Offering or other sale of all of the Holding
Company Conversion Stock, by the total number of shares of Holding Company
Conversion Stock to be issued and sold by the Holding Company upon Conversion.
Such appraisal will then be expressed in terms of a specific aggregate dollar
amount rather than as a range.
B. Subscription Rights
Non-transferable Subscription Rights to purchase shares will be issued
without payment therefor to Eligible Account Holders, Tax-Qualified Employee
Plans, Supplemental Eligible Account Holders, Other Members and directors,
Officers and employees of the Association as set forth below.
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1. Preference Category No. 1: Eligible Account Holders
Each Eligible Account Holder shall receive non-transferable
Subscription Rights to subscribe for shares of Holding Company
Conversion Stock in an amount equal to the greater of $65,000 of
Conversion Stock offered in the Conversion (exclusive of any additional
shares offered pursuant to an increase in the appraisal range not
requiring a resolicitation of subscribers), one-tenth of one percent
(.10%) of the total offering of shares, or 15 times the product
(rounded down to the next whole number) obtained by multiplying the
total number of shares of common stock to be issued by a fraction of
which the numerator is the amount of the qualifying deposit of the
Eligible Account Holder and the denominator is the total amount of
qualifying deposits of all Eligible Account Holders in the converting
Association in each case on the Eligibility Record Date. If sufficient
shares are not available, shares shall be allocated first to permit
each subscribing Eligible Account Holder to purchase, to the extent
possible, 100 shares, and thereafter among each subscribing Eligible
Account Holder pro rata in the same proportion that his Qualifying
Deposit bears to the total Qualifying Deposits of all subscribing
Eligible Account Holders whose subscriptions remain unsatisfied.
Non-transferable Subscription Rights to purchase Holding
Company Conversion Stock received by directors and Officers of the
Association and their Associates, based on their increased deposits in
the Association in the one year period preceding the Eligibility Record
Date, shall be subordinated to all other subscriptions involving the
exercise of non-transferable Subscription Rights of Eligible Account
Holders.
2. Preference Category No. 2: Tax-Qualified Employee Plans
Each Tax-Qualified Employee Plan shall be entitled to receive
non-transferable Subscription Rights to purchase up to 10% of the
shares of Holding Company Conversion Stock, provided that singly or in
the aggregate such plans (other than that portion of such plans which
is self-directed) shall not purchase more than 10% of the shares of the
Holding Company Conversion Stock. Subscription Rights received pursuant
to this Category shall be subordinated to all rights received by
Eligible Account Holders to purchase shares pursuant to Category No. 1;
provided, however, that notwithstanding any other provision of this
Plan to the contrary, the Tax-Qualified Employee Plans shall have a
first priority Subscription Right to the extent that the total number
of shares of Holding Company Conversion Stock sold in the Conversion
exceeds the maximum of the appraisal range as set forth in the
subscription prospectus.
3. Preference Category No. 3: Supplemental Eligible Account
Holders
Each Supplemental Eligible Account Holder shall receive
non-transferable Subscription Rights to subscribe for shares of Holding
Company Conversion Stock in an amount equal to the greater of $65,000
of Conversion Stock offered in the Conversion (exclusive of any
additional shares offered pursuant to an increase in the appraisal
range not requiring a resolicitation of subscribers), or one-tenth of
one percent (.10%) of the total offering of shares, or 15 times the
product (rounded down to the next whole number) obtained by multiplying
the total number of shares of common stock to be issued by a fraction
of which the numerator is the amount of the qualifying deposit of the
Supplemental Eligible Account Holder and the denominator is the total
amount of qualifying deposits of all Supplemental Eligible Account
Holders in the converting Association in each case on the Supplemental
Eligibility Record Date.
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Subscription Rights received pursuant to this category shall
be subordinated to all Subscription Rights received by Eligible Account
Holders and Tax-Qualified Employee Plans pursuant to Category Nos. 1
and 2 above.
Any non-transferable Subscription Rights to purchase shares
received by an Eligible Account Holder in accordance with Category No.
1 shall reduce to the extent thereof the Subscription Rights to be
distributed to such person pursuant to this Category.
In the event of an oversubscription for shares under the
provisions of this subparagraph, the shares available shall be
allocated first to permit each subscribing Supplemental Eligible
Account Holder to purchase, to the extent possible, a number of shares
sufficient to make his total allocation (including the number of
shares, if any, allocated in accordance with Category No. 1) equal to
100 shares, and thereafter among each subscribing Supplemental Eligible
Account Holder pro rata in the same proportion that his Qualifying
Deposit bears to the total Qualifying Deposits of all subscribing
Supplemental Eligible Account Holders whose subscriptions remain
unsatisfied.
4. Preference Category No. 4: Other Members
Each Other Member shall receive non-transferable Subscription
Rights to subscribe for shares of Holding Company Conversion Stock
remaining after satisfying the subscriptions provided for under
Category Nos. 1 through 3 above, subject to the following conditions:
a. Each Other Member shall be entitled to subscribe
for an amount of shares equal to the greater of $65,000 of
Holding Company Conversion Stock offered in the Conversion
(exclusive of any additional shares offered pursuant to an
increase in the appraisal range not requiring a resolicitation
of subscribers) or one-tenth of one percent (.10%) of the
total offering of shares of common stock in the Conversion, to
the extent that Holding Company Conversion Stock is available.
b. In the event of an oversubscription for shares
under the provisions of this subparagraph, the shares
available shall be allocated among the subscribing Other
Members pro rata in the same proportion that his number of
votes on the Voting Record Date bears to the total number of
votes on the Voting Record Date of all subscribing Other
Members on such date. Such number of votes shall be determined
based on the Association's mutual charter and bylaws in effect
on the date of approval by members of this Plan of Conversion.
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5. Preference Category No. 5: Directors, Officers
and Employees
Each director, Officer and employee of the Association as of
the date of the commencement of the Subscription Offering shall be
entitled to receive non-transferable Subscription Rights to purchase
shares of the Holding Company Conversion Stock to the extent that
shares are available after satisfying subscriptions under Category Nos.
1 through 4 above. The shares which may be purchased under this
Category are subject to the following conditions:
a. The total number of shares which may be purchased
under this Category may not exceed 24% of the number of shares
of Holding Company Conversion Stock.
b. The maximum amount of shares which may be
purchased under this Category by any Person is $65,000 of
Holding Company Conversion Stock offered in the Conversion
(exclusive of any additional shares offered pursuant to an
increase in the appraisal range not requiring a resolicitation
of subscribers) of Conversion Stock. In the event of an
oversubscription for shares under the provisions of this
subparagraph, the shares available shall be allocated pro rata
among all subscribers in this Category.
C. Direct Community Offering and Public Offering
1. Any shares of Holding Company Conversion Stock not
subscribed for in the Subscription Offering may be offered for sale in
a Direct Community Offering. This will involve an offering of all
unsubscribed shares directly to the general public. The Direct
Community Offering, if any, shall be for a period of not less than 20
days nor more than 45 days unless extended by the Holding Company and
the Association, and shall commence concurrently with, during or
promptly after the Subscription Offering. The purchase price per share
to the general public in a Direct Community Offering shall be the same
as the Actual Subscription Price. The Holding Company and the
Association may use an investment banking firm or firms on a best
efforts basis to sell the unsubscribed shares in the Subscription and
Direct Community Offering. The Holding Company and the Association may
pay a commission or other fee to such investment banking firm or firms
as to the shares sold by such firm or firms in the Subscription and
Direct Community Offering and may also reimburse such firm or firms for
expenses incurred in connection with the sale. The Holding Company
Conversion Stock will be offered and sold in the Direct Community
Offering, in accordance with OTS regulations, so as to achieve the
widest distribution of the Holding Company Conversion Stock. No person,
by himself or herself, or with an Associate or group of Persons acting
in concert, may subscribe for or purchase more than $65,000 of Holding
Company Conversion Stock offered in the Direct Community Offering
(exclusive of any additional shares offered pursuant to an increase in
the appraisal range not requiring a resolicitation of subscribers). The
Holding Company and the Association may limit total subscriptions under
this Section VI.C.1 so as to assure that the number of shares available
for the Public Offering may be up to a specified percentage of the
number of shares of Holding Company Conversion Stock. Finally, the
Holding Company and the Association may reserve shares offered in the
Community Offering for sales to institutional investors.
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In the event of an oversubscription for shares in the
Community Offering, shares may be allocated (to the extent shares
remain available) first to cover any reservation of shares for a public
offering or institutional orders, next to cover orders of natural
persons residing in Crawford County, Illinois, then to cover the orders
of any other person subscribing for shares in the Community Offering so
that each such person may receive 1,000 shares, and thereafter, on a
pro rata basis to such persons based on the amount of their respective
subscriptions.
The Holding Company and the Association, in their sole
discretion, may reject subscriptions, in whole or in part, received
from any Person under this Section VI.C.
2. Any shares of Holding Company Conversion Stock not sold in
the Subscription Offering or in the Direct Community Offering, if any,
shall then be sold to the Underwriters for resale to the general public
at the Public Offering Price in the Public Offering. It is expected
that the Public Offering, if any, will commence as soon as practicable
after termination of the Subscription Offering and the Direct Community
Offering. The Public Offering shall be completed within 45 days after
the termination of the Subscription Offering, unless such period is
extended as provided in Section IV hereof. The Public Offering Price
and the underwriting discount shall be determined as provided in
Section VI.A hereof and set forth in the underwriting agreement between
the Holding Company and the Association and the Underwriters. Such
underwriting agreement shall be filed with the OTS and the SEC.
3. If for any reason a Public Offering of unsubscribed shares
of Holding Company Conversion Stock cannot be effected and any shares
remain unsold after the Subscription Offering and the Direct Community
Offering, if any, the Board of Directors of the Holding Company and the
Association will seek to make other arrangements for the sale of the
remaining shares. Such other arrangements will be subject to the
approval of the OTS and to compliance with applicable securities laws.
D. Additional Limitations Upon Purchases of Shares of Holding Company
Conversion Stock
The following additional limitations shall be imposed on all purchases
of Holding Company Conversion Stock in the Conversion:
1. No Person, by himself or herself, or with an Associate or
group of Persons acting in concert, may subscribe for or purchase in
the Conversion a number of shares of Holding Company Conversion Stock
which exceeds $100,000 of Holding Company Conversion Stock offered in
the Conversion based on the appraisal range contained in the
Association's subscription prospectus (exclusive of any additional
shares that may be offered pursuant to an increase in such appraisal
range not requiring a resolicitation of subscribers). For purposes of
this paragraph, an Associate of a Person does not include a
Tax-Qualified or Non-Tax Qualified Employee Plan in which the person
has a substantial beneficial interest or serves as a trustee or in a
similar fiduciary capacity. Moreover, for purposes of this paragraph,
shares held by one or more Tax-Qualified or Non-Tax Qualified Employee
Plans attributed to a Person shall not be aggregated with shares
purchased directly by or otherwise attributable to that Person.
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2. Directors and Officers and their Associates may not
purchase in all categories in the Conversion an aggregate of more than
34% of the Holding Company Conversion Stock. For purposes of this
paragraph, an Associate of a Person does not include any Tax-Qualified
Employee Plan. Moreover, any shares attributable to the Officers and
directors and their Associates, but held by one or more Tax-Qualified
Employee Plans shall not be included in calculating the number of
shares which may be purchased under the limitation in this paragraph.
3. The minimum number of shares of Holding Company Conversion
Stock that may be purchased by any Person in the Conversion is 25
shares, provided sufficient shares are available.
4. The Board of Directors of the Holding Company and the
Association may, in their sole discretion, increase the maximum
purchase limitation referred to in subparagraph 1. herein up to 9.99%,
provided that orders for shares exceeding 5% of the shares being
offered in the Subscription Offering shall not exceed, in the
aggregate, 10% of the shares being offered in the Subscription
Offering. Requests to purchase additional shares of Holding Company
Conversion Stock under this provision will be allocated by the Boards
of Directors on a pro rata basis giving priority in accordance with the
priority rights set forth in this Section VI.
Depending upon market and financial conditions, the Board of Directors
of the Holding Company and the Association, with the approval of the OTS and
without further approval of the Members, may increase or decrease any of the
above purchase limitations.
For purposes of this Section VI, the directors of the Association shall
not be deemed to be Associates or a group acting in concert solely as a result
of their serving in such capacities.
Each Person purchasing the Holding Company Conversion Stock in the
Conversion shall be deemed to confirm that such purchase does not conflict with
the above purchase limitations.
E. Restrictions and Other Characteristics of Holding Company Conversion
Stock Being Sold
1. Transferability. Holding Company Conversion Stock purchased
by Persons other than directors and Officers of the Holding Company or
the Association will be transferable without restriction. Shares
purchased by directors or Officers shall not be sold or otherwise
disposed of for value for a period of one year from the date of
Conversion, except for any disposition of such shares (i) following the
death of the original purchaser, or (ii) resulting from an exchange of
securities in a merger or acquisition approved by the applicable
regulatory authorities. Any transfers that could result in a change of
control of the Holding Company or the Association or result in the
ownership by any Person or group acting in concert of more than 10% of
any class of the Association's or the Holding Company's equity
securities are subject to the prior approval of the OTS.
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The certificates representing shares of Conversion Stock
issued to directors and Officers shall bear a legend giving appropriate
notice of the one year holding period restriction. Appropriate
instructions shall be given to the transfer agent for such stock with
respect to the applicable restrictions relating to the transfer of
restricted stock. Any shares of common stock of the Association
subsequently issued as a stock dividend, stock split, or otherwise,
with respect to any such restricted stock, shall be subject to the same
holding period restrictions for Association directors and Officers as
may be then applicable to such restricted stock.
No director or Officer of the Holding Company or the
Association, or Associate of such a director or Officer, shall purchase
any outstanding shares of capital stock of the Holding Company for a
period of three years following the Conversion without the prior
written approval of the OTS, except through a broker or dealer
registered with the SEC or in a "negotiated transaction" involving more
than one percent of the then-outstanding shares of common stock of the
Holding Company. As used herein, the term "negotiated transaction"
means a transaction in which the securities are offered and the terms
and arrangements relating to any sale are arrived at through direct
communications between the seller or any Person acting on its behalf
and the purchaser or his investment representative. The term
"investment representative" shall mean a professional investment
advisor acting as agent for the purchaser and independent of the seller
and not acting on behalf of the seller in connection with the
transaction.
2. Repurchase and Dividend Rights. For a period of three years
following Conversion, the Converted Association shall not repurchase
any shares of its capital stock, except in the case of an offer to
repurchase on a pro rata basis made to all holders of capital stock of
the Converted Association. Any such offer shall be subject to the prior
approval of the OTS. A repurchase of qualifying shares of a director
shall not be deemed to be a repurchase for purposes of this Section
VI.E.2.
Present regulations also provide that the Converted
Association may not declare or pay a cash dividend on or repurchase any
of its stock (i) if the result thereof would be to reduce the
regulatory capital of the Converted Association below the amount
required for the liquidation account to be established pursuant to
Section XII hereof, and (ii) except in compliance with requirements of
Section 563.134 of the Rules and Regulations of the OTS.
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The above limitations are subject to Section 563b.3 (g)(3) of
the Rules and Regulations of the OTS, which generally provides that the
Converted Association may repurchase its capital stock provided (i) no
repurchases occur within one year following conversion, (ii)
repurchases during the second and third year after conversion are part
of an open market stock repurchase program that does not allow for a
repurchase of more than 5% of the Converted Association's outstanding
capital stock during a twelve-month period without OTS approval, (iii)
the repurchases do not cause the Association to become
undercapitalized, and (iv) the Converted Association provides notice to
the OTS at least 10 days prior to the commencement of a repurchase
program and the OTS does not object. In addition, the above limitations
shall not preclude payments of dividends or repurchases of capital
stock by the Converted Association in the event applicable federal
regulatory limitations are liberalized subsequent to OTS approval of
the Plan. Such restrictions and limitations shall not apply following
consummation of the Bank Conversion, unless the OTS approval of the
Bank Conversion otherwise requires.
3. Voting Rights. After the Conversion, holders of deposit
accounts will not have voting rights in the Converted Association or
the Holding Company. Exclusive voting rights as to the Association will
be vested with the Holding Company, as the sole stockholder of the
Association; voting rights as to the Holding Company will be held
exclusively by its stockholders.
F. Exercise of Subscription Rights; Order Forms
1. If the Subscription Offering occurs concurrently with the
solicitation of proxies for the Special Meeting, the subscription
prospectus and Order Form may be sent to each Eligible Account Holder,
Tax-Qualified Employee Plan, Supplemental Eligible Account Holder,
Other Member, and director, Officer and employee at their last known
address as shown on the records of the Association. However, the
Association may, and if the Subscription Offering commences after the
Special Meeting the Association shall, furnish a subscription
prospectus and Order Form only to Eligible Account Holders,
Tax-Qualified Employee Plans, Supplemental Eligible Account Holders,
Other Members, and directors, Officers and employees who have returned
to the Association by a specified date prior to the commencement of the
Subscription Offering a post card or other written communication
requesting a subscription prospectus and Order Form. In such event, the
Association shall provide a postage-paid post card for this purpose and
make appropriate disclosure in its proxy statement for the solicitation
of proxies to be voted at the Special Meeting and/or letter sent in
lieu of the proxy statement to those Eligible Account Holders,
Tax-Qualified Employee Plans or Supplemental Eligible Account Holders
who are not Members on the Voting Record Date.
2. Each Order Form will be preceded or accompanied by a
subscription prospectus describing the Converted Association and the
shares of Holding Company Conversion Stock being offered for
subscription and containing all other information required by the OTS
or the SEC or necessary to enable Persons to make informed investment
decisions regarding the purchase of Holding Company Conversion Stock.
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3. The Order Forms (or accompanying instructions) used for the
Subscription Offering will contain, among other things, the following:
(i) A clear and intelligible explanation of the
Subscription Rights granted under the Plan to Eligible Account
Holders, Tax-Qualified Employee Plans, Supplemental Eligible
Account Holders, Other Members, and directors, Officers and
employees;
(ii) A specified expiration date by which Order Forms
must be returned to and actually received by the Association
or its representative for purposes of exercising Subscription
Rights, which date will be not less than 20 days after the
Order Forms are mailed by the Association;
(iii) The Maximum Subscription Price to be paid for each
share subscribed for when the Order Form is returned;
(iv) A statement that 25 shares is the minimum number of
shares of Conversion Stock that may be subscribed for under
the Plan;
(v) A specifically designated blank space for indicating
the number of shares being subscribed for;
(vi) A set of detailed instructions as to how to complete
the Order Form including a statement as to the available
alternative methods of payment for the shares being subscribed
for;
(vii) Specifically designated blank spaces for dating and
signing the Order Form;
(viii) An acknowledgement that the subscriber has
received the subscription prospectus;
(ix) A statement of the consequences of failing to
properly complete and return the Order Form, including a
statement that the Subscription Rights will expire on the
expiration date specified on the Order Form unless such
expiration date is extended by the Holding Company and the
Association, and that the Subscription Rights may be exercised
only by delivering the Order Form, properly completed and
executed, to the Association or its representative by the
expiration date, together with required payment of the Maximum
Subscription Price for all shares of Holding Company
Conversion Stock subscribed for;
(x) A statement that the Subscription Rights are
non-transferable and that all shares of Holding Company
Conversion Stock subscribed for upon exercise of Subscription
Rights must be purchased on behalf of the Person exercising
the Subscription Rights for his own account; and
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(xi) A statement that, after receipt by the Association
or its representative, a subscription may not be modified,
withdrawn or canceled without the consent of the Association.
G. Method of Payment
Payment for all shares of Holding Company Conversion Stock subscribed
for, computed on the basis of the Maximum Subscription Price, must accompany all
completed Order Forms. Payment may be made in cash (if presented in Person), by
check, or, if the subscriber has a Deposit Account in the Association (including
a certificate of deposit), the subscriber may authorize the Association to
charge the subscriber's account.
If a subscriber authorizes the Association to charge his or her
account, the funds will continue to earn interest, but may not be used by the
subscriber until all Holding Company Conversion Stock has been sold or the Plan
is terminated, whichever is earlier. The Association will allow subscribers to
purchase shares by withdrawing funds from certificate accounts without the
assessment of early withdrawal penalties with the exception of prepaid interest
in the form of promotional gifts. 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 rate paid
on the certificate will continue until the certificate reaches maturity. This
waiver of the early withdrawal penalty is applicable only to withdrawals made in
connection with the purchase of Holding Company Conversion Stock under the Plan.
Interest will also be paid, at not less than the then-current passbook rate, on
all orders paid in cash, by check or money order, from the date payment is
received until consummation of the Stock Conversion. Payments made in cash, by
check or money order will be placed by the Association in an escrow or other
account established specifically for this purpose.
In the event of an unfilled amount of any subscription order, the
Converted Association will make an appropriate refund or cancel an appropriate
portion of the related withdrawal authorization, after consummation of the Stock
Conversion, including any difference between the Maximum Subscription Price and
the Actual Subscription Price (unless subscribers are afforded the right to
apply such difference to the purchase of additional whole shares). If for any
reason the Stock Conversion is not consummated, purchasers will have refunded to
them all payments made and all withdrawal authorizations will be canceled in the
case of subscription payments authorized from accounts at the Association.
If any Tax-Qualified Employee Plans or Non-Tax-Qualified Employee Plans
subscribe for shares during the Subscription Offering, such plans will not be
required to pay for the shares subscribed for at the time they subscribe, but
may pay for such shares of Holding Company Conversion Stock subscribed for upon
consummation of the Stock Conversion. In the event that, after the completion of
the Subscription Offering, the amount of shares to be issued is increased above
the maximum of the appraisal range included in the prospectus, the Tax Qualified
and Non-Tax Qualified Employee Plans shall be entitled to increase their
subscriptions by a percentage equal to the percentage increase in the amount of
shares to be issued above the maximum of the appraisal range provided that such
subscriptions shall continue to be subject to applicable purchase limits and
stock allocation procedures.
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H. Undelivered, Defective or Late Order Forms; Insufficient Payment
The Boards of Directors of the Holding Company and the Association
shall have the absolute right, in their sole discretion, to reject any Order
Form, including but not limited to, any Order Forms which (i) are not delivered
or are returned by the United States Postal Service (or the addressee cannot be
located); (ii) are not received back by the Association or its representative,
or are received after the termination date specified thereon; (iii) are
defectively completed or executed; (iv) are not accompanied by the total
required payment for the shares of Holding Company Conversion Stock subscribed
for (including cases in which the subscribers' Deposit Accounts or certificate
accounts are insufficient to cover the authorized withdrawal for the required
payment); or (v) are submitted by or on behalf of a Person whose representations
the Boards of Directors of the Holding Company and the Association believe to be
false or who they otherwise believe, either alone or acting in concert with
others, is violating, evading or circumventing, or intends to violate, evade or
circumvent, the terms and conditions of this Plan. In such event, the
Subscription Rights of the Person to whom such rights have been granted will not
be honored and will be treated as though such Person failed to return the
completed Order Form within the time period specified therein. The Association
may, but will not be required to, waive any irregularity relating to any Order
Form or require submission of corrected Order Forms or the remittance of full
payment for subscribed shares by such date as the Association may specify. The
interpretations of the Holding Company and the Association of the terms and
conditions of this Plan and of the proper completion of the Order Form will be
final, subject to the authority of the OTS.
I. Member in Non-Qualified States or in Foreign Countries
The Holding Company and the Association will make reasonable efforts to
comply with the securities laws of all states in the United States in which
Persons entitled to subscribe for Holding Company Conversion Stock pursuant to
the Plan reside. However, no shares will be offered or sold under the Plan of
Conversion to any such Person who (1) resides in a foreign country or (2)
resides in a state of the United States in which a small number of Persons
otherwise eligible to subscribe for shares under the Plan reside or as to which
the Holding Company and the Association determine that compliance with the
securities laws of such state would be impracticable for reasons of cost or
otherwise, including, but not limited to, a requirement that the Holding Company
and the Association or any of its officers, directors or employees register,
under the securities laws of such state, as a broker, dealer, salesman or agent.
No payments will be made in lieu of the granting of Subscription Rights to any
such Person.
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VI. FEDERAL STOCK CHARTER AND BYLAWS
A. As part of the Conversion, the Association will take all appropriate
steps to amend its charter to read in the form of federal stock savings
institution charter as prescribed by the OTS. A copy of the proposed stock
charter is available upon request. By their approval of the Plan, the Members of
the Association will thereby approve and adopt such charter.
B. The Association will also take appropriate steps to amend its bylaws
to read in the form prescribed by the OTS for a federal stock savings
institution. A copy of the proposed federal stock bylaws is available upon
request.
C. The effective date of the adoption of the Association's federal
stock charter and bylaws shall be the date of the issuance and sale of the
Holding Company Conversion Stock as specified by the OTS.
D. As part of the Bank Conversion, a national bank articles of
association and bylaws will be adopted to allow the National Bank to operate as
a national bank. By approving the Plan, the Members of the Association will
thereby approve such articles of association and bylaws. Prior to completion of
the Bank Conversion, the articles of association and bylaws may be amended in
accordance with the provisions and limitations for amending the Plan under
Section XIV below. The effective date of the articles of association and bylaws
of the National Bank shall be the date of the consummation of the Bank
Conversion.
VII. HOLDING COMPANY CERTIFICATE OF INCORPORATION
A copy of the proposed certificate of incorporation of the Holding
Company will be made available from the Association upon request.
VIII. DIRECTORS OF THE CONVERTED ASSOCIATION AND THE NATIONAL BANK
Each Person serving as a member of the Board of Directors of the
Association at the time of the Stock Conversion will thereupon become a director
of the Converted Association. If the Bank Conversion is consummated, each person
serving as a member of the Board of Directors of the Converted Association at
the time of the Bank Conversion will become a director of the National Bank.
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IX. STOCK OPTION AND INCENTIVE PLAN AND RECOGNITION AND RETENTION PLAN
In order to provide an incentive for directors, Officers and employees
of the Holding Company and its subsidiaries (including the Converted
Association), the Boards of Director of the Holding Company intends to adopt,
subject to shareholder approval, a stock option and incentive plan and a
recognition and retention plan as soon as permitted by applicable regulation.
X. CONTRIBUTIONS TO TAX-QUALIFIED EMPLOYEE PLANS
The Converted Association and the Holding Company may in their
discretion make scheduled contributions to any Tax-Qualified Employee Plans,
provided that any such contributions which are for the acquisition of Holding
Company Conversion Stock, or the repayment of debt incurred for such an
acquisition, do not cause the Converted Association to fail to meet its
regulatory capital requirements.
XI. SECURITIES REGISTRATION AND MARKET MAKING
Promptly following the Stock Conversion, the Holding Company will
register its stock with the SEC pursuant to the Exchange Act. In connection with
the registration, the Holding Company will undertake not to deregister such
stock, without the approval of the OTS, for a period of three years thereafter.
If the Bank Conversion is consummated, the National Bank will become
subject to the sole jurisdiction of the OCC, and the Holding Company, which will
undertake not to deregister its stock, without the approval of the OCC for a
period of three years after the Stock Conversion, to the sole jurisdiction of
the FRB.
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XII. STATUS OF SAVINGS ACCOUNTS AND LOANS SUBSEQUENT TO CONVERSION
Each Deposit Account holder shall retain, without payment, a
withdrawable Deposit Account or Accounts in the Converted Association, equal in
amount to the withdrawable value of such account holder's Deposit Account or
Accounts prior to the Stock Conversion. Each Person holding a Savings Account at
the Converted Association as of immediately prior to consummation of the Bank
Conversion as set forth in Section V.B. herein shall receive, without payment, a
withdrawable Savings Account or Savings Accounts in the National Bank equal in
dollar amount and on the same terms and conditions as in effect as of
immediately prior to the consummation of the Bank Conversion. All Deposit
Accounts will continue to be insured by the FDIC up to the applicable limits of
insurance coverage, and shall be subject to the same terms and conditions
(except as to voting and liquidation rights) as such Deposit Account in the
Association at the time of the Conversion. All loans shall retain the same
status after Conversion as these loans had prior to Conversion.
XIII. LIQUIDATION ACCOUNT
For purposes of granting to Eligible Account Holders and Supplemental
Eligible Account Holders who continue to maintain Deposit Accounts at the
Converted Association a priority in the event of a complete liquidation of the
Converted Association, the Converted Association will, at the time of
Conversion, establish a liquidation account in an amount equal to the net worth
of the Association as shown on its latest statement of financial condition
contained in the final prospectus used in connection with the Conversion. The
creation and maintenance of the liquidation account will not operate to restrict
the use or application of any of the regulatory capital accounts of the
Converted Association; provided, however, that such regulatory capital accounts
will not be voluntarily reduced below the required dollar amount of the
liquidation account. Each Eligible Account Holder and Supplemental Eligible
Account Holder shall, with respect to the Deposit Account held, have a related
inchoate interest in a portion of the liquidation account balance ("subaccount
balance").
The initial subaccount balance of a Deposit Account held by an Eligible
Account Holder or Supplemental Eligible Account Holder shall be determined by
multiplying the opening balance in the liquidation account by a fraction of
which the numerator is the amount of the Qualifying Deposit in the Deposit
Account on the Eligibility Record Date or the Supplemental Eligibility Record
Date and the denominator is the total amount of the Qualifying Deposits of all
Eligible Account Holders and Supplemental Eligible Account Holders on such
record dates in the Association. Such initial subaccount balance shall not be
increased, and it shall be subject to downward adjustment as provided below.
If the deposit balance in any Deposit Account of an Eligible Account
Holder or Supplemental Eligible Account Holder at the close of business on any
annual closing date subsequent to the record date is less than the lesser of (i)
the deposit balance in such Deposit Account at the close of business on any
other annual closing date subsequent to the Eligibility Record Date or the
Supplemental Eligibility Record Date or (ii) the amount of the Qualifying
Deposit in such Deposit Account on the Eligibility Record Date or Supplemental
Eligibility Record Date, the subaccount balance shall be reduced in an amount
proportionate to the reduction in such deposit balance. In the event of a
downward adjustment, the subaccount balance shall not be subsequently increased,
notwithstanding any increase in the deposit balance of the related Deposit
Account. If all funds in such Deposit Account are withdrawn, the related
subaccount balance shall be reduced to zero.
In the event of a complete liquidation of the Association (and only in
such event), each Eligible Account Holder and Supplemental Eligible Account
Holder shall be entitled to receive a liquidation distribution from the
liquidation account in the amount of the then-current adjusted subaccount
balances for Deposit Accounts then held before any liquidation distribution may
be made to stockholders. No merger, consolidation, bulk
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purchase of assets with assumptions of Deposit Accounts and other liabilities,
or similar transactions with another institution the accounts of which are
insured by the SAIF, shall be considered to be a complete liquidation. In such
transactions, the liquidation account shall be assumed by the surviving
institution.
The Bank Conversion shall not be deemed to be a complete liquidation of
the Converted Association for purposes of the distribution of the liquidation
account. Upon consummation of the Bank Conversion, the liquidation account, and
all rights and obligations of the Converted Association in connection therewith,
shall be assumed by the National Bank.
The liquidation account shall be maintained by the National Bank, under
the same rules and conditions applicable to the Converted Association,
subsequent to the Bank Conversion for the benefit of Eligible Account Holders
and Supplemental Eligible Account Holders who retain their Deposit Account in
the National Bank.
XIV. RESTRICTIONS ON ACQUISITION OF CONVERTED ASSOCIATION, THE NATIONAL
BANK, OR THE HOLDING COMPANY
Regulations of the OTS limit acquisitions, and offers to acquire,
direct or indirect beneficial ownership of more than 10% of any class of an
equity security of the Converted Association or the Holding Company. In
addition, consistent with the regulations of the OTS, the charter of the
Converted Association shall provide that for a period of five years following
completion of the Conversion: (i) no Person (i.e., no individual, group acting
in concert, corporation, partnership, association, joint stock company, trust,
or unincorporated organization or similar company, syndicate, or any other group
formed for the purpose of acquiring, holding or disposing of securities of an
insured institution) shall directly or indirectly offer to acquire or acquire
beneficial ownership of more than 10% of any class of the Association's equity
securities. Shares beneficially owned in violation of this charter provision
shall not be counted as shares entitled to vote and shall not be voted by any
Person or counted as voting shares in connection with any matter submitted to
the shareholders for a vote. This limitation shall not apply to any offer to
acquire or acquisition of beneficial ownership of more than 10% of the common
stock of the Association by a corporation whose ownership is or will be
substantially the same as the ownership of the Association, provided that the
offer or acquisition is made more than one year following the date of completion
of the Conversion; (ii) shareholders shall not be permitted to cumulate their
votes for elections of directors; and (iii) special meetings of the shareholders
relating to changes in control or amendment of the charter may only be called by
the Boards of Directors.
Upon consummation of the Bank Conversion, no person (i.e., an
individual, a group acting in concert, a corporation, a partnership, an
association, a joint stock company, a trust or any 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 or its
holding company) shall directly, or indirectly, offer to purchase or actually
acquire the beneficial ownership of more than 10% of any class of the Holding
Company's stock without the prior approval of the FRB.
The Holding Company may provide in its certificate of incorporation a
provision that, for a specified period of up to five years following the date of
the completion of the Stock Conversion, no person shall directly or indirectly
offer to acquire or actually acquire the beneficial ownership of more than 10%
of any class of Holding Company stock except with respect to purchases by one or
more Tax-Qualified Employee Stock Benefit Plans of the Holding Company or
Converted Association. The Holding Company may provide in its certificate of
incorporation for such other provisions affecting the acquisition of Holding
Company stock as shall be determined by its Boards of Directors.
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XV. AMENDMENT OR TERMINATION OF PLAN
If necessary or desirable, the Plan may be amended at any time prior to
submission of the Plan and proxy materials to the Members by a two-thirds vote
of the respective Boards of Directors of the Holding Company and the
Association. After submission of the Plan and proxy materials to the Members,
the Plan may be amended by a two-thirds vote of the respective Boards of
Directors of the Holding Company and the Association only with the concurrence
of the OTS. Any amendments to the Plan made after approval by the Members with
the concurrence of the OTS shall not necessitate further approval by the Members
unless otherwise required.
The Plan may be terminated by a two-thirds vote of the Association's
Board of Directors at any time prior to the Special Meeting of Members, and at
any time following such Special Meeting with the concurrence of the OTS. In its
discretion, the Board of Directors of the Association may modify or terminate
the Plan upon the order or with the approval of the OTS and without further
approval by Members. The Plan shall terminate if the sale of all shares of
Conversion Stock is not completed within 24 months of the date of the Special
Meeting. A specific resolution approved by a majority of the Board of Directors
of the Association is required in order for the Association to terminate the
Plan prior to the end of such 24 month period.
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XVI. EXPENSES OF THE CONVERSION
The Holding Company and the Association shall use their best efforts to
assure that expenses incurred by them in connection with the Conversion shall be
reasonable.
XVII. TAX RULING
Consummation of the Stock Conversion is expressly conditioned upon
prior receipt of either a ruling of the United States Internal Revenue Service
or an opinion of tax counsel with respect to federal taxation, and either a
ruling of the Illinois taxation authorities or an opinion of tax counsel or
other tax advisor with respect to Illinois taxation, to the effect that
consummation of the Stock Conversion will not be taxable to the Holding Company
or the Association.
XVIII. EXTENSION OF CREDIT FOR PURCHASE OF STOCK
The Association may not knowingly loan funds or otherwise extend credit
to any Person to purchase in the Conversion shares of Holding Company Conversion
Stock.
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EXHIBIT 3.1
CERTIFICATE OF INCORPORATION
OF THE HOLDING COMPANY
<PAGE>
CERTIFICATE OF INCORPORATION
OF
FIRST ROBINSON FINANCIAL CORPORATION
FIRST: The name of the Corporation is First Robinson Financial
Corporation (hereinafter sometimes referred to as the "Corporation").
SECOND: The address of the registered office of the Corporation in the
State of Delaware is Corporation Trust Center, 1209 Orange Street, in the City
of Wilmington, County of New Castle. The name of the registered agent at that
address is The Corporation Trust Company.
THIRD: The purpose of the Corporation is to engage in any lawful act or
activity for which a corporation may be organized under the General Corporation
Law of Delaware.
FOURTH:
A. The total number of shares of all classes of stock which the
Corporation shall have the authority to issue is two million five hundred
thousand (2,500,000) consisting of:
1. Five hundred thousand (500,000) shares of preferred stock, par value
one cent ($.01) per share (the "Preferred Stock"); and
2. Two million (2,000,000) shares of common stock, par value one cent
($.01) per share (the "Common Stock").
<PAGE>
B. The Board of Directors is hereby expressly authorized, subject to
any limitations prescribed by law, to provide for the issuance of the shares of
Preferred Stock in series, and by filing a certificate pursuant to the
applicable law of the State of Delaware (such certificate being hereinafter
referred to as a "Preferred Stock Designation"), to establish from time to time
the number of shares to be included in each such series, and to fix the
designation, powers, preferences and rights of the shares of each such series
and any qualifications, limitations or restrictions thereof. The number of
authorized shares of the Preferred Stock may be increased or decreased (but not
below the number of shares thereof then outstanding) by the affirmative vote of
the holders of a majority of the Common Stock, without a vote of the holders of
the Preferred Stock, or of any series thereof, unless a vote of any such holders
is required pursuant to the terms of any Preferred Stock Designation.
C.1. Notwithstanding any other provision of this Certificate of
Incorporation, in no event shall any record owner of any outstanding Common
Stock which is beneficially owned, directly or indirectly, by a person who, as
of any record date for the determination of stockholders entitled to vote on any
matter, beneficially owns in excess of 10% of the then-outstanding shares of
Common Stock (the "Limit"), be entitled, or permitted to any vote in respect of
the shares held in excess of the Limit. The number of votes which may be cast by
any record owner by virtue of the provisions hereof in respect of Common Stock
beneficially owned by such person owning shares in excess of the Limit shall be
a number equal to the total number of votes which a single record owner of all
Common Stock owned by such person would be entitled to cast, multiplied by a
fraction, the numerator of which is the number of shares of such class or series
beneficially owned by such person and owned of record by such record owner and
the denominator of which is the total number of shares of Common Stock
beneficially owned by such person owning shares in excess of the Limit.
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C.2. The following definitions shall apply to this Section C of this
Article FOURTH:
(a) An "affiliate" of a specified person shall mean a person that directly,
or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the person specified.
(b) "Beneficial ownership" shall be determined pursuant to Rule 13d-3 of
the General Rules and Regulations under the Securities Exchange Act of
1934 (or any successor rule or statutory provision), or, if said Rule
13d-3 shall be rescinded and there shall be no successor rule or
statutory provision thereto, pursuant to said Rule 13d-3 as in effect
on October 31, 1994; provided, however, that a person shall, in any
event, also be deemed the "beneficial owner" of any Common Stock:
(1) which such person or any of its affiliates beneficially owns,
directly or indirectly; or
(2) which such person or any of its affiliates has (i) the right
to acquire (whether such right is exercisable immediately or
only after the passage of time), pursuant to any agreement,
arrangement or understanding (but shall not be deemed to be
the beneficial owner of any voting shares solely by reason of
an agreement, contract, or other arrangement with this
Corporation to effect any transaction which is described in
any one or more of the clauses of Section A of Article EIGHTH)
or upon the exercise of conversion rights, exchange rights,
warrants, or options or otherwise, or (ii) sole or shared
voting or investment power with respect thereto pursuant to
any agreement, arrangement, understanding, relationship or
otherwise (but shall not be deemed to be the beneficial owner
of any voting shares solely by reason of a revocable proxy
granted for a particular meeting of stockholders, pursuant to
a public solicitation of proxies for such meeting, with
respect to shares of which neither such person nor any such
affiliate is otherwise deemed the beneficial owner); or
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(3) which are beneficially owned, directly or indirectly, by any
other person with which such first mentioned person or any of
its affiliates acts as a partnership, limited partnership,
syndicate or other group pursuant to any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting or disposing of any shares of capital stock of
this Corporation;
and provided further, however, that (1) no director or officer of this
Corporation (or any affiliate of any such director or officer) shall,
solely by reason of any or all of such directors or officers acting in
their capacities as such, be deemed, for any purposes hereof, to
beneficially own any Common Stock beneficially owned by any other such
director or officer (or any affiliate thereof), and (2) neither any
employee stock ownership or similar plan of this Corporation or any
subsidiary of this Corporation nor any trustee with respect thereto (or
any affiliate of such trustee) shall, solely by reason of such capacity
of such trustee, be deemed, for any purposes hereof, to beneficially
own any Common Stock held under any such plan. For purposes of
computing the percentage beneficial ownership of Common Stock of a
person, the outstanding Common Stock shall include shares deemed owned
by such person through application of this subsection but shall not
include any other Common Stock which may be issuable by this
Corporation pursuant to any agreement, or upon exercise of conversion
rights, warrants or options, or otherwise. For all other purposes, the
outstanding Common Stock shall include only Common Stock then
outstanding and shall not include any Common Stock which may be
issuable by this Corporation pursuant to any agreement, or upon the
exercise of conversion rights, warrants or options, or otherwise.
(c) A "person" shall mean any individual, firm, corporation, or other
entity.
(d) The Board of Directors shall have the power to construe and apply the
provisions of this section and to make all determinations necessary or
desirable to implement such provisions, including but not limited to
matters with respect to (1) the number of shares of Common Stock
beneficially owned by any person, (2) whether a person is an affiliate
of another, (3) whether a person has an agreement, arrangement, or
understanding with another as to the matters referred to in the
definition of beneficial ownership, (4) the application of any other
definition or operative provision of this Section to the given facts,
or (5) any other matter relating to the applicability or effect of this
Section.
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C.3. The Board of Directors shall have the right to demand that any
person who is reasonably believed to beneficially own Common Stock in excess of
the Limit (or holds of record Common Stock beneficially owned by any person in
excess of the Limit) (a "Holder in Excess") supply the Corporation with complete
information as to (1) the record owner(s) of all shares beneficially owned by
such Holder in Excess, and (2) any other factual matter relating to the
applicability or effect of this section as may reasonably be requested of such
Holder in Excess. The Board of Directors shall further have the right to receive
from any Holder in Excess reimbursement for all expenses incurred by the Board
in connection with its investigation of any matters relating to the
applicability or effect of this section on such Holder in Excess, to the extent
such investigation is deemed appropriate by the Board of Directors as a result
of the Holder in Excess refusing to supply the Corporation with the information
described in the previous sentence.
C.4. Except as otherwise provided by law or expressly provided in this
Section C, the presence, in person or by proxy, of the holders of record of
shares of capital stock of the Corporation entitling the holders thereof to cast
one-third of the votes (after giving effect, if required, to the provisions of
this Section) entitled to be cast by the holders of shares of capital stock of
the Corporation entitled to vote shall constitute a quorum at all meetings of
the stockholders, and every reference in this Certificate of Incorporation to a
majority or other proportion of capital stock (or the holders thereof) for
purposes of determining any quorum requirement or any requirement for
stockholder consent or approval shall be deemed to refer to such majority or
other proportion of the votes (or the holders thereof) then entitled to be cast
in respect of such capital stock.
C.5. Any constructions, applications, or determinations made by the
Board of Directors, pursuant to this Section in good faith and on the basis of
such information and assistance as was then reasonably available for such
purpose, shall be conclusive and binding upon the Corporation and its
stockholders.
C.6. In the event any provision (or portion thereof) of this Section C
shall be found to be invalid, prohibited or unenforceable for any reason, the
remaining provisions (or portions thereof) of this Section shall remain in full
force and effect, and shall be construed as if such invalid, prohibited or
unenforceable provision had been stricken herefrom or otherwise rendered
inapplicable, it being the intent of this Corporation and its stockholders that
each such remaining provision (or portion thereof) of this Section C remain, to
the fullest extent permitted by law, applicable and enforceable as to all
stockholders, including stockholders owning an amount of stock over the Limit,
notwithstanding any such finding.
FIFTH: The following provisions are inserted for the management of the
business and the conduct of the affairs of the Corporation, and for further
definition, limitation and regulation of the powers of the Corporation and of
its directors and stockholders:
A. The business and affairs of the Corporation shall be managed by or under
the direction of the Board of Directors. In addition to the powers and
authority expressly conferred upon them by Statute or by this
Certificate of Incorporation or the By-laws of the Corporation, the
directors are hereby empowered to exercise all such powers and do all
such acts and things as may be exercised or done by the Corporation.
B. The directors of the Corporation need not be elected by written ballot
unless the By-laws so provide.
C. Subject to the rights of holders of any class or series of Preferred
Stock, any action required or permitted to be taken by the stockholders
of the Corporation must be effected at a duly called annual or special
meeting of stockholders of the Corporation and may not be effected by
any consent in writing by such stockholders.
D. Subject to the rights of holders of any class or series of Preferred
Stock, special meetings of stockholders of the Corporation may be called
only by the Board of Directors pursuant to a resolution adopted by a
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majority of the total number of directors which the Corporation would
have if there were no vacancies on the Board of Directors (the "Whole
Board").
E. Stockholders shall not be permitted to cumulate their votes for the
election of directors.
SIXTH:
A. The number of directors shall be fixed from time to time exclusively
by the Board of Directors pursuant to a resolution adopted by a majority of the
Whole Board. The directors, other than those who may be elected by the holders
of any class or series of Preferred Stock, shall be divided into three classes,
as nearly equal in number as reasonably possible, with the term of office of the
first class to expire at the conclusion of the first annual meeting of
stockholders, the term of office of the second class to expire at the conclusion
of the annual meeting of stockholders one year thereafter and the term of office
of the third class to expire at the conclusion of the annual meeting of
stockholders two years thereafter, with each director to hold office until his
or her successor shall have been duly elected and qualified. At each annual
meeting of stockholders following such initial classification and election,
directors elected to succeed those directors whose terms expire shall be elected
for a term of office to expire at the third succeeding annual meeting of
stockholders after their election, with each director to hold office until his
or her successor shall have been duly elected and qualified.
B. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, newly created directorships resulting from any increase
in the authorized number of directors or any vacancies in the Board of Directors
resulting from death, resignation, retirement, disqualification, removal from
office or other cause may be filled only by a majority vote of the directors
then in office, though less than a quorum, and directors so chosen shall hold
office for a term expiring at the annual meeting of stockholders at which the
term of office of the class to which they have been elected expires, and until
such director's successor shall have been duly elected and qualified. No
decrease in the number of directors constituting the Board of Directors shall
shorten the term of any incumbent director.
C. Advance notice of stockholder nominations for the election of
directors and of business to be brought by stockholders before any meeting of
the stockholders of the Corporation shall be given in the manner provided in the
By-laws of the Corporation.
D. Subject to the rights of the holders of any series of Preferred
Stock then outstanding, any directors, or the entire Board of Directors, may be
removed from office at any time, but only for cause and only by the affirmative
vote of the holders of at least 80% of the voting power of all of the
then-outstanding shares of capital stock of the Corporation entitled to vote
generally in the election of directors (after giving effect to the provisions of
Article FOURTH of this Certificate of Incorporation), voting together as a
single class.
SEVENTH: The Board of Directors is expressly empowered to adopt, amend
or repeal the By-laws of the Corporation. Any adoption, amendment or repeal of
the By-laws of the Corporation by the Board of Directors shall require the
approval of a majority of the Whole Board. The stockholders shall also have
power to adopt, amend or repeal the By-laws of the Corporation. In addition to
any vote of the holders of any class or series of stock of this Corporation
required by law or by this Certificate of Incorporation, the affirmative vote of
the holders of at least 80% of the voting power of all of the then-outstanding
shares of the capital stock of the Corporation entitled to vote generally in the
election of directors (after giving effect to the provisions of Article FOURTH
hereof), voting together as a single class, shall be required to adopt, amend or
repeal any provisions of the By-laws of the Corporation.
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EIGHTH:
A. In addition to any affirmative vote required by law or this
Certificate of Incorporation, and except as otherwise expressly provided in this
Section:
1. any merger or consolidation of the Corporation or any Subsidiary (as
hereinafter defined) with (i) any Interested Stockholder (as hereinafter
defined) or (ii) any other corporation (whether or not itself an
Interested Stockholder) which is, or after such merger or consolidation
would be, an Affiliate (as hereinafter defined) of an Interested
Stockholder; or
2. any sale, lease, exchange, mortgage, pledge, transfer or other
disposition (in one transaction or a series of transactions) to or with
any Interested Stockholder, or any Affiliate of any Interested
Stockholder, of any assets of the Corporation or any Subsidiary having
an aggregate Fair Market Value (as hereafter defined) equaling or
exceeding 25% or more of the combined assets of the Corporation and its
Subsidiaries; or
3. the issuance or transfer by the Corporation or any Subsidiary (in one
transaction or a series of transactions) of any securities of the
Corporation or any Subsidiary to any Interested Stockholder or any
Affiliate of any Interested Stockholder in exchange for cash, securities
or other property (or a combination thereof) having an aggregate Fair
Market Value equaling or exceeding 25% of the combined assets of the
Corporation and its Subsidiaries except pursuant to an employee benefit
plan of the Corporation or any Subsidiary thereof; or
4. the adoption of any plan or proposal for the liquidation or dissolution
of the Corporation proposed by or on behalf of any Interested
Stockholder or any Affiliate of any Interested Stockholder; or
5. any reclassification of securities (including any reverse stock split),
or recapitalization of the Corporation, or any merger or consolidation
of the Corporation with any of its Subsidiaries or any other transaction
(whether or not with or into or otherwise involving an Interested
Stockholder) which has the effect, directly or indirectly, of increasing
the proportionate share of the outstanding shares of any class of equity
or convertible securities of the Corporation or any Subsidiary which is
directly or indirectly owned by any Interested Stockholder or any
Affiliate of any Interested Stockholder (a "Disproportionate
Transaction"); provided, however, that no such transaction shall be
deemed a Disproportionate Transaction if the increase in the
proportionate ownership of the Interested Stockholder or Affiliate as a
result of such transaction is no greater than the increase experienced
by the other stockholders generally;
shall require the affirmative vote of the holders of at least 80% of the voting
power of the then-outstanding shares of stock of the Corporation entitled to
vote in the election of directors (the "Voting Stock"), voting together as a
single class. Such affirmative vote shall be required notwithstanding the fact
that no vote may be required, or that a lesser percentage may be specified, by
law or by any other provisions of this Certificate of Incorporation or any
Preferred Stock Designation or in any agreement with any national securities
exchange or quotation system or otherwise.
The term "Business Combination" as used in this Article EIGHTH shall
mean any transaction which is referred to in any one or more of paragraphs 1
through 5 of Section A of this Article EIGHTH.
B. The provisions of Section A of this Article EIGHTH shall not be
applicable to any particular Business Combination, and such Business Combination
shall require only the affirmative vote of the majority of the outstanding
shares of capital stock entitled to vote, or such vote as is required by law or
by this Certificate of Incorporation, if, in the case of any Business
Combination that does not involve any cash or other consideration being received
by the stockholders of the Corporation solely in their capacity as stockholders
of
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the Corporation, the condition specified in the following paragraph 1 is met or,
in the case of any other Business Combination, all of the conditions specified
in either of the following paragraphs 1 and 2 are met:
1. The Business Combination shall have been approved by a majority of the
Disinterested Directors (as hereinafter defined).
2. All of the following conditions shall have been met:
(a) The aggregate amount of the cash and the Fair Market Value as of
the date of the consummation of the Business Combination of
consideration other than cash to be received per share by the
holders of Common Stock in such Business Combination shall at
least be equal to the higher of the following:
I. (if applicable) the Highest Per Share Price,
including any brokerage commissions, transfer taxes
and soliciting dealers' fees, paid by the Interested
Stockholder or any of its Affiliates for any shares
of Common Stock acquired by it (X) within the
two-year period immediately prior to the first public
announcement of the proposal of the Business
Combination (the "Announcement Date"), or (Y) in the
transaction in which it became an Interested
Stockholder, whichever is higher.
II. the Fair Market Value per share of Common Stock on
the Announcement Date or on the date on which the
Interested Stockholder became an Interested
Stockholder (such latter date is referred to in this
Article EIGHTH as the "Determination Date"),
whichever is higher.
(b) The aggregate amount of the cash and the Fair Market Value as of
the date of the consummation of the Business Combination of
consideration other than cash to be received per share by
holders of shares of any class of outstanding Voting Stock other
than Common Stock shall be at least equal to the highest of the
following (it being intended that the requirements of this
subparagraph (b) shall be required to be met with respect to
every such class of outstanding Voting Stock, whether or not the
Interested Stockholder has previously acquired any shares of a
particular class of Voting Stock):
I. (if applicable) the Highest Per Share Price (as
hereinafter defined), including any brokerage
commissions, transfer taxes and soliciting dealers'
fees, paid by the Interested Stockholder for any
shares of such class of Voting Stock acquired by it
(X) within the two-year period immediately prior to
the Announcement Date, or (Y) in the transaction in
which it became an Interested Stockholder, whichever
is higher;
II. (if applicable) the highest preferential amount per
share to which the holders of shares of such class of
Voting Stock are entitled in the event of any
voluntary or involuntary liquidation, dissolution or
winding up of the Corporation; and
III. the Fair Market Value per share of such class of
Voting Stock on the Announcement Date or on the
Determination Date, whichever is higher.
(c) The consideration to be received by holders of a particular
class of outstanding Voting Stock (including Common Stock) shall
be in cash or in the same form as the Interested Stockholder has
previously paid for shares of such class of Voting Stock. If the
Interested Stockholder has paid for shares of any class of
Voting Stock with varying forms of consideration, the form of
consideration to be received per share by holders of shares of
such class of Voting Stock shall be
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either cash or the form used to acquire the largest number of
shares of such class of Voting Stock previously acquired by the
Interested Stockholder. The price determined in accordance with
subparagraph B.2 of this Article EIGHTH shall be subject to
appropriate adjustment in the event of any stock dividend, stock
split, combination of shares or similar event.
(d) After such Interested Stockholder has become an Interested
Stockholder and prior to the consummation of such Business
Combination; (i) except as approved by a majority of the
Disinterested Directors, there shall have been no failure to
declare and pay at the regular date therefor any full quarterly
dividends (whether or not cumulative) on any outstanding stock
having preference over the Common Stock as to dividends or
liquidation; (ii) there shall have been (X) no reduction in the
annual rate of dividends paid on the Common Stock (except as
necessary to reflect any subdivision of the Common Stock),
except as approved by a majority of the Disinterested Directors,
and (Y) an increase in such annual rate of dividends as
necessary to reflect any reclassification (including any reverse
stock split), recapitalization, reorganization or any similar
transaction which has the effect of reducing the number of
outstanding shares of Common Stock, unless the failure to so
increase such annual rate is approved by a majority of the
Disinterested Directors; and (iii) neither such Interested
Stockholder nor any of its Affiliates shall have become the
beneficial owner of any additional shares of Voting Stock except
as part of the transaction which results in such Interested
Stockholder becoming an Interested Stockholder.
(e) After such Interested Stockholder has become an Interested
Stockholder, such Interested Stockholder shall not have received
the benefit, directly or indirectly (except proportionately as a
stockholder), of any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax
advantages provided by the Corporation, whether in anticipation
of or in connection with such Business Combination or otherwise.
(f) A proxy or information statement describing the proposed
Business Combination and complying with the requirements of the
Securities Exchange Act of 1934 and the rules and regulations
thereunder (or any subsequent provisions replacing such Act,
rules or regulations) shall be mailed to stockholders of the
Corporation at least 30 days prior to the consummation of such
Business Combination (whether or not such proxy or information
statement is required to be mailed pursuant to such Act or
subsequent provisions).
C. For the purposes of this Article EIGHTH:
1. A "Person" shall include an individual, a group acting in concert, a
corporation, a partnership, an association, a joint venture, a pool, a
joint stock company, a trust, an unincorporated organization or similar
company, a syndicate or any other group formed for the purpose of
acquiring, holding or disposing of securities.
2. "Interested Stockholder" shall mean any Person (other than the
Corporation or any holding company or Subsidiary thereof) who or which:
(a) is the beneficial owner, directly or indirectly, of more than
10% of the voting power of the outstanding Voting Stock; or
(b) is an Affiliate of the Corporation and at any time within the
two-year period immediately prior to the date in question was
the beneficial owner, directly or indirectly, of 10% or more
of the voting power of the then-outstanding Voting Stock; or
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(c) is an assignee of or has otherwise succeeded to any shares of
Voting Stock which were at any time within the two-year period
immediately prior to the date in question beneficially owned
by any Interested Stockholder, if such assignment or
succession shall have occurred in the course of a transaction
or series of transactions not involving a public offering
within the meaning of the Securities Act of 1933.
3. A Person shall be a "beneficial owner" of any Voting Stock:
(a) which such Person or any of its Affiliates or Associates (as
hereinafter defined) beneficially owns, directly or indirectly
within the meaning of Rule 13d-3 under the Securities Exchange
Act of 1934, as in effect on October 31, 1994; or
(b) which such Person or any of its Affiliates or Associates has
(i) the right to acquire (whether such right is exercisable
immediately or only after the passage of time), pursuant to
any agreement, arrangement or understanding or upon the
exercise of conversion rights, exchange rights, warrants or
options, or otherwise, or (ii) the right to vote pursuant to
any agreement, arrangement or understanding (but neither such
Person nor any such Affiliate or Associate shall be deemed to
be the beneficial owner of any shares of Voting Stock solely
by reason of a revocable proxy granted for a particular
meeting of stockholders, pursuant to a public solicitation of
proxies for such meeting, and with respect to which shares
neither such Person nor any such Affiliate or Associate is
otherwise deemed the beneficial owner); or
(c) which are beneficially owned, directly or indirectly within
the meaning of Rule 13d-3 under the Securities Exchange Act of
1934, as in effect on October 31, 1994, by any other Person
with which such Person or any of its Affiliates or Associates
has any agreement, arrangement or understanding for the
purposes of acquiring, holding, voting (other than solely by
reason of a revocable proxy as described in Subparagraph (b)
of this Paragraph 3) or in disposing of any shares of Voting
Stock;
provided, however, that, in the case of any employee stock ownership or
similar plan of the Corporation or of any Subsidiary in which the
beneficiaries thereof possess the right to vote any shares of Voting
Stock held by such plan, no such plan nor any trustee with respect
thereto (nor any Affiliate of such trustee), solely by reason of such
capacity of such trustee, shall be deemed, for any purposes hereof, to
beneficially own any shares of Voting Stock held under any such plan.
4. For the purpose of determining whether a Person is an Interested
Stockholder pursuant to Paragraph 2 of this Section C, the number of
shares of Voting Stock deemed to be outstanding shall include shares
deemed owned through application of Paragraph 3 of this Section C but
shall not include any other shares of Voting Stock which may be
issuable pursuant to any agreement, arrangement or understanding, or
upon exercise of conversion rights, warrants or options, or otherwise.
5. "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as in effect on October 31, 1994.
6. "Subsidiary" means any corporation of which a majority of any class of
equity security is owned, directly or indirectly, by the Corporation;
provided, however, that for the purposes of the definition of
Interested Stockholder set forth in Paragraph 2 of this Section C, the
term "Subsidiary" shall mean only a corporation of which a majority of
each class of equity security is owned, directly or indirectly, by the
Corporation.
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7. "Disinterested Director" means any member of the Board of Directors who
is unaffiliated with the Interested Stockholder and was a member of the
Board of Directors prior to the time that the Interested Stockholder
became an Interested Stockholder, and any director who is thereafter
chosen to fill any vacancy on the Board of Directors or who is elected
and who, in either event, is unaffiliated with the Interested
Stockholder, and in connection with his or her initial assumption of
office is recommended for appointment or election by a majority of
Disinterested Directors then on the Board of Directors.
8. "Fair Market Value" means: (a) in the case of stock, the highest
closing sales price of the stock during the 30-day period immediately
preceding the date in question of a share of such stock of the National
Association of Securities Dealers Automated Quotations ("NASDAQ")
System or any system then in use, or, if such stock is admitted to
trading on a principal United States securities exchange registered
under the Securities Exchange Act of 1934, Fair Market Value shall be
the highest sale price reported during the 30-day period preceding the
date in question, or, if no such quotations are available, the Fair
Market Value on the date in question of a share of such stock as
determined by the Board of Directors in good faith, in each case with
respect to any class of stock, appropriately adjusted for any dividend
or distribution in shares of such stock or in combination or
reclassification of outstanding shares of such stock into a smaller
number of shares of such stock, and (b) in the case of property other
than cash or stock, the Fair Market Value of such property on the date
in question as determined by the Board of Directors in good faith.
9. Reference to "Highest Per Share Price" shall in each case with respect
to any class of stock reflect an appropriate adjustment for any
dividend or distribution in shares of such stock or any stock split or
reclassification of outstanding shares of such stock into a greater
number of shares of such stock or any combination or reclassification
of outstanding shares of such stock into a smaller number of shares of
such stock.
10. In the event of any Business Combination in which the Corporation
survives, the phrase "consideration other than cash to be received" as
used in Subparagraphs (a) and (b) of Paragraph 2 of Section B of this
Article EIGHTH shall include the shares of Common Stock and/or the
shares of any other class of outstanding Voting Stock retained by the
holders of such shares.
D. A majority of the Disinterested Directors of the Corporation shall
have the power and duty to determine for the purposes of this Article EIGHTH, on
the basis of information known to them after reasonable inquiry, (a) whether a
person is an Interested Stockholder; (b) the number of shares of Voting Stock
beneficially owned by any person; (c) whether a person is an Affiliate or
Associate of another; and (d) whether the assets which are the subject of any
Business Combination have, or the consideration to be received for the issuance
or transfer of securities by the Corporation or any Subsidiary in any Business
Combination has an aggregate Fair Market Value equaling or exceeding 25% of the
combined assets of the Corporation and its Subsidiaries. A majority of the
Disinterested Directors shall have the further power to interpret all of the
terms and provisions of this Article EIGHTH.
E. Nothing contained in this Article EIGHTH shall be construed to
relieve any Interested Stockholder from any fiduciary obligation imposed by law.
F. Notwithstanding any other provisions of this Certificate of
Incorporation or any provision of law which might otherwise permit a lesser vote
or no vote, but in addition to any affirmative vote of the holders of any
particular class or series of the Voting Stock required by law, this Certificate
of Incorporation or any Preferred Stock Designation, the affirmative vote of the
holders of at least 80% of the voting power of all of the then-outstanding
shares of the Voting Stock, voting together as a single class, shall be required
to alter, amend or repeal this Article EIGHTH.
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NINTH: The Board of Directors of the Corporation, when evaluating any
offer of another Person (as defined in Article EIGHTH hereof) to (A) make a
tender or exchange offer for any equity security of the Corporation, (B) merge
or consolidate the Corporation with another corporation or entity or (C)
purchase or otherwise acquire all or substantially all of the properties and
assets of the Corporation, may, in connection with the exercise of its judgment
in determining what is in the best interest of the Corporation and its
stockholders, give due consideration to all relevant factors, including, without
limitation, the social and economic effect of acceptance of such offer on the
Corporation's present and future customers and employees and those of its
Subsidiaries (as defined in Article EIGHTH hereof); on the communities in which
the Corporation and its Subsidiaries operate or are located; on the ability of
the Corporation to fulfill its corporate objectives as a financial institution
holding company and on the ability of its subsidiary financial institution to
fulfill the objectives of a federally insured financial institution under
applicable statutes and regulations.
TENTH:
A. Except as set forth in Section B of this Article TENTH, in addition
to any affirmative vote of stockholders required by law or this Certificate of
Incorporation, any direct or indirect purchase or other acquisition by the
Corporation of any Equity Security (as hereinafter defined) of any class from
any Interested Person (as hereinafter defined) shall require the affirmative
vote of the holders of at least 80% of the Voting Stock of the Corporation that
is not beneficially owned (for purposes of this Article TENTH beneficial
ownership shall be determined in accordance with Section C.2(b) of Article
FOURTH hereof) by such Interested Person, voting together as a single class.
Such affirmative vote shall be required notwithstanding the fact that no vote
may be required, or that a lesser percentage may be specified, by law or by any
other provisions of this Certificate of Incorporation or any Preferred Stock
Designation or in any agreement with any national securities exchange or
quotation system, or otherwise. Certain defined terms used in this Article TENTH
are as set forth in Section C below.
B. The provisions of Section A of this Article TENTH shall not be
applicable with respect to:
1. any purchase or other acquisition of securities made as part of a
tender or exchange offer by the Corporation or a Subsidiary (which
term, as used in this Article TENTH, is as defined in the first clause
of Section C.6 of Article EIGHTH hereof) of the Corporation to purchase
securities of the same class made on the same terms to all holders of
such securities and complying with the applicable requirements of the
Securities Exchange Act of 1934 and the rules and regulations
thereunder (or any subsequent provision replacing such Act, rules or
regulations);
2. any purchase or acquisition made pursuant to an open market purchase
program approved by a majority of the Board of Directors, including a
majority of the Disinterested Directors (which term, as used in this
Article TENTH, is as defined in Article EIGHTH hereof); or
3. any purchase or acquisition which is approved by a majority of the
Board of Directors, including a majority of the Disinterested
Directors, and which is made at no more than the Market Price (as
hereinafter defined), on the date that the understanding between the
Corporation and the Interested Person is reached with respect to such
purchase (whether or not such purchase is made or a written agreement
relating to such purchase is executed on such date), of shares of the
class of Equity Security to be purchased.
C. For the purposes of this Article TENTH:
1. The term Interested Person shall mean any Person (other than the
Corporation, Subsidiaries of the Corporation, pension, profit sharing,
employee stock ownership or other employee benefit plans of the
Corporation and its Subsidiaries, entities organized or established by
the Corporation or any of its
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Subsidiaries pursuant to the terms of such plans and trustees and
fiduciaries with respect to any such plan acting in such capacity) that
is the direct or indirect beneficial owner of 5% or more of the Voting
Stock of the Corporation, and any Affiliate or Associate of any such
person.
2. The Market Price of shares of a class of Equity Security on any day
shall mean the highest sale price of shares of such class of Equity
Security on such day, or, if that day is not a trading day, on the
trading day immediately preceding such day, on the national securities
exchange or the NASDAQ System or any other system then in use on which
such class of Equity Security is traded.
3. The term Equity Security shall mean any security described in Section
3(a)(11) of the Securities Exchange Act of 1934, as in effect on October
31, 1994, which is traded on a national securities exchange or the
NASDAQ System or any other system then in use.
4. For purposes of this Article TENTH, all references to the term
Interested Stockholder in the definition of Disinterested Director shall
be deemed to refer to the term Interested Person.
ELEVENTH:
A. Each person who was or is made a party or is threatened to be made a
party to or is otherwise involved in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a "proceeding"),
by reason of the fact that he or she is or was a director or an officer of the
Corporation or is or was serving at the request of the Corporation as a director
or officer of another corporation, including, without limitation, any Subsidiary
(as defined in Article EIGHTH herein), partnership, joint venture, trust or
other enterprise, including service with respect to an employee benefit plan
(hereinafter an "indemnitee"), whether the basis of such proceeding is alleged
action in an official capacity as a director or officer or in any other capacity
while serving as a director or officer, shall be indemnified and held harmless
by the Corporation to the fullest extent authorized by the Delaware General
Corporation Law, as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such amendment permits the
Corporation to provide broader indemnification rights than such law permitted
the Corporation to provide prior to such amendment), against all expense,
liability and loss (including attorneys' fees, judgments, fines, ERISA excise
taxes or penalties and amounts paid in settlement) reasonably incurred or
suffered by such indemnitee in connection therewith; provided, however, that,
except as provided in Section C hereof with respect to proceedings to enforce
rights to indemnification, the Corporation shall indemnify any such indemnitee
in connection with a proceeding (or part thereof) initiated by such indemnitee
only if such proceeding (or part thereof) was authorized by the Board of
Directors of the Corporation.
B. The right to indemnification conferred in Section A of this Article
shall include the right to be paid by the Corporation the expenses incurred in
defending any such proceeding in advance of its final disposition (hereinafter
an "advancement of expenses"); provided, however, that, if the Delaware General
Corporation Law requires, an advancement of expenses incurred by an indemnitee
in his or her capacity as a director or officer (and not in any other capacity
in which service was or is rendered by such indemnitee, including, without
limitation, service to an employee benefit plan) shall be made only upon
delivery to the Corporation of an undertaking (hereinafter an "undertaking"), by
or on behalf of such indemnitee, to repay all amounts so advanced if it shall
ultimately be determined by final judicial decision from which there is no
further right to appeal (hereinafter a "final adjudication"), that such
indemnitee is not entitled to be indemnified for such expenses under this
Section or otherwise. The rights to indemnification and to the advancement of
expenses conferred in Sections A and B of this Article shall be contract rights
and such rights shall continue as to an indemnitee who has ceased to be a
director or officer and shall inure to the benefit of the indemnitee's heirs,
executors and administrators.
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C. If a claim under Section A or B of this Article is not paid in full
by the Corporation within sixty days after a written claim has been received by
the Corporation, except in the case of a claim for an advancement of expenses,
in which case the applicable period shall be twenty days, the indemnitee may at
any time thereafter bring suit against the Corporation to recover the unpaid
amount of the claim. If successful in whole or in part in any such suit, or in a
suit brought by the Corporation to recover an advancement of expenses pursuant
to the terms of an undertaking, the indemnitee shall also be entitled to be paid
the expense of prosecuting or defending such suit. In (i) any suit brought by
the indemnitee to enforce a right to indemnification hereunder (but not in a
suit brought by the indemnitee to enforce a right to an advancement of expenses)
it shall be a defense that, and (ii) in any suit by the Corporation to recover
an advancement of expenses pursuant to the terms of an undertaking the
Corporation shall be entitled to recover such expenses upon a final adjudication
that, the indemnitee has not met any applicable standard for indemnification set
forth in the Delaware General Corporation Law. Neither the failure of the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
suit that indemnification of the indemnitee is proper in the circumstances
because the indemnitee has met the applicable standard of conduct set forth in
the Delaware General Corporation Law, nor an actual determination by the
Corporation (including its Board of Directors, independent legal counsel, or its
stockholders) that the indemnitee has not met such applicable standard of
conduct, shall create a presumption that the indemnitee has not met the
applicable standard of conduct or, in the case of such a suit brought by the
indemnitee, be a defense to such suit. In any suit brought by the indemnitee to
enforce a right to indemnification or to an advancement of expenses hereunder,
or by the Corporation to recover an advancement of expenses pursuant to the
terms of an undertaking, the burden of proving that the indemnitee is not
entitled to be indemnified, or to such advancement of expenses, under this
Article or otherwise shall be on the Corporation.
D. The rights to indemnification and to the advancement of expenses
conferred in this Article shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, the Corporation's
Certificate of Incorporation, By-laws, agreement, vote of stockholders or
Disinterested Directors or otherwise.
E. The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss
under the Delaware General Corporation Law.
F. The Corporation may, to the extent authorized from time to time by a
majority vote of the disinterested directors, grant rights to indemnification
and to the advancement of expenses to any employee or agent of the Corporation
to the fullest extent of the provisions of this Article with respect to the
indemnification and advancement of expenses of directors and officers of the
Corporation.
TWELFTH: A director of this Corporation shall not be personally liable
to the Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii) for acts
or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived an
improper personal benefit. If the Delaware General Corporation Law is hereafter
amended to further eliminate or limit the personal liability of directors, then
the liability of a director of the Corporation shall be eliminated or limited to
the fullest extent permitted by the Delaware General Corporation Law, as so
amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.
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THIRTEENTH: The Corporation reserves the right to amend or repeal any
provision contained in this Certificate of Incorporation in the manner
prescribed by the laws of the State of Delaware and all rights conferred upon
stockholders are granted subject to this reservation; provided, however, that,
notwithstanding any other provision of this Certificate of Incorporation or any
provision of law which might otherwise permit a lesser vote or no vote, but in
addition to any vote of the holders of any class or series of the stock of this
Corporation required by law or by this Certificate of Incorporation, the
affirmative vote of the holders of at least 80% of the voting power of all of
the then-outstanding shares of the capital stock of the Corporation entitled to
vote generally in the election of directors (after giving effect to the
provisions of Article FOURTH), voting together as a single class, shall be
required to amend or repeal this Article THIRTEENTH, clauses B or C of Article
FOURTH, clauses C or D of Article FIFTH, Article SIXTH, Article SEVENTH, Article
EIGHTH, Article TENTH or Article ELEVENTH.
FOURTEENTH: The name and mailing address of the sole incorporator are
as follows:
NAME MAILING ADDRESS
---- ---------------
Rick L. Catt First Robinson Savings and Loan, F.A.
501 East Main Street
Robinson, Illinois 62454
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I, THE UNDERSIGNED, being the incorporator, for the purpose of forming
a corporation under the laws of the State of Delaware, do make, file and record
this Certificate of Incorporation, do certify that the facts herein stated are
true, and, accordingly, have hereto set my hand this 13th day of March, 1997.
/s/ Rick L. Catt
------------------------------
Rick L. Catt, Incorporator
EXHIBIT 3.2
BYLAWS OF THE HOLDING COMPANY
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FIRST ROBINSON FINANCIAL CORPORATION
BY-LAWS
ARTICLE I
STOCKHOLDERS
Section 1. Annual Meeting.
An annual meeting of the stockholders, for the election of directors to
succeed those whose terms expire and for the transaction of such other business
as may properly come before the meeting, shall be held at such place, on such
date, and at such time as the Board of Directors shall each year fix.
Section 2. Special Meetings.
Subject to the rights of the holders of any class or series of
preferred stock of the Corporation, special meetings of stockholders of the
Corporation may be called only by the Board of Directors pursuant to a
resolution adopted by a majority of the total number of directors which the
Corporation would have if there were no vacancies on the Board of Directors
(hereinafter the "Whole Board").
Section 3. Notice of Meetings.
Written notice of the place, date, and time of all meetings of the
stockholders shall be given, not less than ten (10) nor more than sixty (60)
days before the date on which the meeting is to be held, to each stockholder
entitled to vote at such meeting, except as otherwise provided herein or
required by law (meaning, here and hereinafter, as required from time to time by
the Delaware General Corporation Law or the Certificate of Incorporation of the
Corporation).
When a meeting is adjourned to another place, date or time, written
notice need not be given of the adjourned meeting if the place, date and time
thereof are announced at the meeting at which the adjournment is taken;
provided, however, that if the date of any adjourned meeting is more than thirty
(30) days after the date for which the meeting was originally noticed, or if a
new record date is fixed for the adjourned meeting, written notice of the place,
date and time of the adjourned meeting shall be given in conformity herewith. At
any adjourned meeting, any business may be transacted which might have been
transacted at the original meeting.
Section 4. Quorum.
At any meeting of the stockholders, the holders of at least one-third
of all of the shares of the stock entitled to vote at the meeting, present in
person or by proxy, shall constitute a quorum for all purposes, unless or except
to the extent that the presence of a larger number may be required by law. Where
a separate vote by a class or classes is required, a majority of the shares of
such class or classes, present in person or represented by proxy, shall
constitute a quorum entitled to take action with respect to that vote on that
matter.
If a quorum shall fail to attend any meeting, the chairman of the
meeting or the holders of a majority of the shares of stock entitled to vote who
are present, in person or by proxy, may adjourn the meeting to another place,
date or time.
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If a notice of any adjourned special meeting of stockholders is sent to
all stockholders entitled to vote thereat, stating that it will be held with
those present constituting a quorum, then except as otherwise required by law,
those present at such adjourned meeting shall constitute a quorum, and all
matters shall be determined by a majority of the votes cast at such meeting.
Section 5. Organization.
Such person as the Board of Directors may have designated or, in the
absence of such a person, the President of the Corporation or, in his or her
absence, such person as may be chosen by the holders of a majority of the shares
entitled to vote who are present, in person or by proxy, shall call to order any
meeting of the stockholders and act as chairman of the meeting. In the absence
of the Secretary of the Corporation, the secretary of the meeting shall be such
person as the chairman appoints.
Section 6. Conduct of Business.
(a) The chairman of any meeting of stockholders shall
determine the order of business and the procedure at the meeting, including such
regulation of the manner of voting and the conduct of discussion as seem to him
or her in order.
(b) At any annual meeting of the stockholders, only such
business shall be conducted as shall have been brought before the meeting (i) by
or at the direction of the Board of Directors or (ii) by any stockholder of the
Corporation who is entitled to vote with respect thereto and who complies with
the notice procedures set forth in this Section 6(b). For business to be
properly brought before an annual meeting by a stockholder, the stockholder must
have given timely notice thereof in writing to the Secretary of the Corporation.
To be timely, a stockholder's notice must be delivered or mailed to and received
at the principal executive offices of the Corporation not less than thirty (30)
days prior to the date of the annual meeting; provided, however, that in the
event that less than forty (40) days' notice of the date of the meeting is given
or made to stockholders, notice by the stockholder to be timely must be received
not later than the close of business on the 10th day following the day on which
such notice of the date of the annual meeting was mailed. A stockholder's notice
to the Secretary shall set forth as to each matter such stockholder proposes to
bring before the annual meeting (i) a brief description of the business desired
to be brought before the annual meeting and the reasons for conducting such
business at the annual meeting, (ii) the name and address, as they appear on the
Corporation's books, of the stockholder who proposed such business, (iii) the
class and number of shares of the Corporation's capital stock that are
beneficially owned by such stockholder and (iv) any material interest of such
stockholder in such business. Notwithstanding anything in these By-laws to the
contrary, no business shall be brought before or conducted at an annual meeting
except in accordance with the provisions of this Section 6(b). The officer of
the Corporation or other person presiding over the annual meeting shall, if the
facts so warrant, determine and declare to the meeting that business was not
properly brought before the meeting in accordance with the provisions of this
Section 6(b) and, if he should so determine, he shall so declare to the meeting
and any such business so determined to be not properly brought before the
meeting shall not be transacted.
At any special meeting of the stockholders, only such business
shall be conducted as shall have been brought before the meeting by or at the
direction of the Board of Directors or by or at the direction of the holders of
not less than one-tenth of all the outstanding capital stock of the Corporation
at whose instance the special meeting is called.
(c) Only persons who are nominated in accordance with the
procedures set forth in these Bylaws and who are domiciled in Crawford County,
Illinois shall be eligible for election as directors. Nominations of persons for
election to the Board of Directors of the Corporation may be made at a meeting
of stockholders at which directors are to be elected only (i) by or at the
direction of the Board of Directors or (ii) by any stockholder of the
Corporation entitled to vote for the election of directors at the meeting who
complies with the notice procedures set forth in this Section 6(c). Such
nominations, other than those made by or at the direction of the Board of
Directors, shall be made by timely notice in writing to the Secretary of the
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Corporation. To be timely, a stockholder's notice shall be delivered or mailed
to and received at the principal executive offices of the Corporation not less
than 30 days prior to the date of the meeting; provided, however, that in the
event that less than 40 days' notice of the date of the meeting is given or made
to stockholders, notice by the stockholder to be timely must be so received not
later than the close of business on the 10th day following the day on which such
notice of the date of the meeting was mailed. Such stockholder's notice shall
set forth (i) as to each person whom such stockholder proposes to nominate for
election or re-election as a director, all information relating to such person
that is required to be disclosed in solicitations of proxies for election of
directors, or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended (including such person's
written consent to being named in the proxy statement as a nominee and to
serving as a director if elected); and (ii) as to the stockholder giving the
notice: (x) the name and address, as they appear on the Corporation's books, of
such stockholder and (y) the class and number of shares of the Corporation's
capital stock that are beneficially owned by such stockholder. At the request of
the Board of Directors, any person nominated by the Board of Directors for
election as a director shall furnish to the Secretary of the Corporation that
information required to be set forth in a stockholder's notice of nomination
which pertains to the nominee. No person shall be eligible for election as a
director of the Corporation unless nominated in accordance with the provisions
of this Section 6(c). The officer of the Corporation or other person presiding
at the meeting shall, if the facts so warrant, determine that a nomination was
not made in accordance with such provisions and, if he or she should so
determine, he or she shall so declare to the meeting and the defective
nomination shall be disregarded.
Section 7. Proxies and Voting.
At any meeting of the stockholders, every stockholder entitled to vote
may vote in person or by proxy authorized by an instrument in writing (or as
otherwise permitted under applicable law) by the stockholder or his duly
authorized attorney-in-fact filed in accordance with the procedure established
for the meeting. Proxies solicited on behalf of the management shall be voted as
directed by the stockholder or in the absence of such direction, as determined
by a majority of the Board of Directors. No proxy shall be valid after eleven
months from the date of its execution except for a proxy coupled with an
interest.
Each stockholder shall have one (1) vote for every share of stock
entitled to vote which is registered in his or her name on the record date for
the meeting, except as otherwise provided herein or in the Certificate of
Incorporation of the Corporation or as required by law.
All voting, including on the election of directors but excepting where
otherwise required by law, may be by a voice vote; provided, however, that upon
demand therefore by a stockholder entitled to vote or his or her proxy, a stock
vote shall be taken. Every stock vote shall be taken by ballot, each of which
shall state the name of the stockholder or proxy voting and such other
information as may be required under the procedure established for the meeting.
Every vote taken by ballot shall be counted by an inspector or inspectors
appointed by the chairman of the meeting.
All elections shall be determined by a plurality of the votes cast, and
except as otherwise required by law or as provided in the Certificate of
Incorporation, all other matters shall be determined by a majority of the votes
cast.
Section 8. Stock List.
The officer who has charge of the stock transfer books of the
Corporation shall prepare and make, in the time and manner required by
applicable law, a list of stockholders entitled to vote and shall make such list
available for such purposes, at such places, at such times and to such persons
as required by applicable law.
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The stock transfer books shall be the only evidence as to the identity of the
stockholders entitled to examine the stock transfer books or to vote in person
or by proxy at any meeting of stockholders.
Section 9. Consent of Stockholders in Lieu of Meeting.
Subject to the rights of the holders of any class or series of
preferred stock of the Corporation, any action required or permitted to be taken
by the stockholders of the Corporation must be effected at a duly called annual
or special meeting of stockholders of the Corporation and may not be effected by
any consent in writing by such stockholders.
Section 10. Inspectors of Election
The Board of Directors shall, in advance of any meeting of
stockholders, appoint one or more persons as inspectors of election, to act at
the meeting or any adjournment thereof and make a written report thereof, in
accordance with applicable law.
ARTICLE II
BOARD OF DIRECTORS
Section 1. General Powers, Number and Term of Office.
The business and affairs of the Corporation shall be managed by or
under the direction of the Board of Directors. The number of directors shall be
as provided for in the Certificate of Incorporation. The Board of Directors
shall annually elect a Chairman of the Board and a President from among its
members and shall designate, when present, either the Chairman of the Board or
the President to preside at its meetings.
The directors, other than those who may be elected by the holders of
any class or series of preferred stock, shall be divided into three classes, as
nearly equal in number as reasonably possible, with the term of office of the
first class to expire at the conclusion of the first annual meeting of
stockholders, the term of office of the second class to expire at the conclusion
of the annual meeting of stockholders one year thereafter and the term of office
of the third class to expire at the conclusion of the annual meeting of
stockholders two years thereafter, with each director to hold office until his
or her successor shall have been duly elected and qualified. At each annual
meeting of stockholders, commencing with the first annual meeting, directors
elected to succeed those directors whose terms expire shall be elected for a
term of office to expire at the third succeeding annual meeting of stockholders
after their election, with each director to hold office until his or her
successor shall have been duly elected and qualified.
Section 2. Vacancies and Newly Created Directorships.
Subject to the rights of the holders of any class or series of
preferred stock then outstanding, newly created directorships resulting from any
increase in the authorized number of directors or any vacancies in the Board of
Directors resulting from death, resignation, retirement, disqualification,
removal from office or other cause may be filled only by a majority vote of the
directors then in office, though less than a quorum, and directors so chosen
shall hold office for a term expiring at the annual meeting of stockholders at
which the term of office of the class to which they have been elected expires,
and until such director's successor shall have been duly elected and qualified.
No decrease in the number of authorized directors constituting the Board shall
shorten the term of any incumbent director.
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Section 3. Regular Meetings.
Regular meetings of the Board of Directors shall be held at such place
or places, on such date or dates, and at such time or times as shall have been
established by the Board of Directors and publicized among all directors. A
notice of each regular meeting shall not be required.
Section 4. Special Meetings.
Special meetings of the Board of Directors may be called by one-third
(1/3) of the directors then in office (rounded up to the nearest whole number)
or by the President and shall be held at such place, on such date, and at such
time as they or he or she shall fix. Notice of the place, date, and time of each
such special meeting shall be given to each director by whom it is not waived by
mailing written notice not less than five (5) days before the meeting or by
telegraphing or telexing or by facsimile transmission of the same not less than
twenty-four (24) hours before the meeting. Unless otherwise indicated in the
notice thereof, any and all business may be transacted at a special meeting.
Section 5. Quorum.
At any meeting of the Board of Directors, a majority of the authorized
number of directors then constituting the Board shall constitute a quorum for
all purposes. If a quorum shall fail to attend any meeting, a majority of those
present may adjourn the meeting to another place, date, or time, without further
notice or waiver thereof.
Section 6. Participation in Meetings By Conference Telephone.
Members of the Board of Directors, or of any committee thereof, may
participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other and such participation shall
constitute presence in person at such meeting.
Section 7. Conduct of Business.
At any meeting of the Board of Directors, business shall be transacted
in such order and manner as the Board may from time to time determine, and all
matters shall be determined by the vote of a majority of the directors present,
except as otherwise provided herein or required by law. Action may be taken by
the Board of Directors without a meeting if all members thereof consent thereto
in writing, and the writing or writings are filed with the minutes of
proceedings of the Board of Directors.
Section 8. Powers.
The Board of Directors may, except as otherwise required by law,
exercise all such powers and do all such acts and things as may be exercised or
done by the Corporation, including, without limiting the generality of the
foregoing, the unqualified power:
(1) To declare dividends from time to time in accordance with
law;
(2) To purchase or otherwise acquire any property, rights or
privileges on such terms as it shall determine;
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(3) To authorize the creation, making and issuance, in such
form as it may determine, of written obligations of every kind, negotiable or
non-negotiable, secured or unsecured, and to do all things necessary in
connection therewith;
(4) To remove any officer of the Corporation with or without
cause, and from time to time to devolve the powers and duties of any officer
upon any other person for the time being;
(5) To confer upon any officer of the Corporation the power to
appoint, remove and suspend subordinate officers, employees and agents;
(6) To adopt from time to time such stock, option, stock
purchase, bonus or other compensation plans for directors, officers, employees
and agents of the Corporation and its subsidiaries as it may determine;
(7) To adopt from time to time such insurance, retirement, and
other benefit plans for directors, officers, employees and agents of the
Corporation and its subsidiaries as it may determine; and,
(8) To adopt from time to time regulations, not inconsistent
with these By-laws, for the management of the Corporation's business and
affairs.
Section 9. Compensation of Directors.
Directors, as such, may receive, pursuant to resolution of the Board of
Directors, fixed fees and other compensation for their services as directors,
including, without limitation, their services as members of committees of the
Board of Directors.
ARTICLE III
COMMITTEES
Section 1. Committees of the Board of Directors.
The Board of Directors, by a vote of a majority of the Board of
Directors, may from time to time designate committees of the Board, with such
lawfully delegable powers and duties as it thereby confers, to serve at the
pleasure of the Board and shall, for those committees and any others provided
for herein, elect a director or directors to serve as the member or members,
designating, if it desires, other directors as alternate members who may replace
any absent or disqualified member at any meeting of the committee. Any committee
so designated may exercise the power and authority of the Board of Directors to
declare a dividend, to authorize the issuance of stock or to adopt a certificate
of ownership and merger pursuant to Section 253 of the Delaware General
Corporation Law if the resolution which designated the committee or a
supplemental resolution of the Board of Directors shall so provide. In the
absence or disqualification of any member of any committee and any alternate
member in his or her place, the member or members of the committee present at
the meeting and not disqualified from voting, whether or not he or she or they
constitute a quorum, may by unanimous vote appoint another member of the Board
of Directors to act at the meeting in the place of the absent or disqualified
member.
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Section 2. Conduct of Business.
Each committee may determine the procedural rules for meeting and
conducting its business and shall act in accordance therewith, except as
otherwise provided herein or required by law. Adequate provision shall be made
for notice to members of all meetings; one-third (1/3) of the members shall
constitute a quorum unless the committee shall consist of one (1) or two (2)
members, in which event one (1) member shall constitute a quorum; and all
matters shall be determined by a majority vote of the members present. Action
may be taken by any committee without a meeting if all members thereof consent
thereto in writing, and the writing or writings are filed with the minutes of
the proceedings of such committee.
Section 3. Nominating Committee.
The Board of Directors shall appoint a Nominating Committee of the
Board, consisting of three (3) members, one of which shall be the President if,
and only so long as, the President remains in office as a member of the Board of
Directors. The Nominating Committee shall have authority (a) to review any
nominations for election to the Board of Directors made by a stockholder of the
Corporation pursuant to Section 6(c)(ii) of Article I of these By-laws in order
to determine compliance with such By-law and (b) to recommend to the Whole Board
nominees for election to the Board of Directors to replace those directors whose
terms expire at the annual meeting of stockholders next ensuing.
ARTICLE IV
OFFICERS
Section 1. Generally.
(a) The Board of Directors as soon as may be practicable after
the annual meeting of stockholders shall choose a President, a Secretary and a
Treasurer and from time to time may choose such other officers as it may deem
proper. The President shall be chosen from among the directors. Any number of
offices may be held by the same person.
(b) The term of office of all officers shall be until the next
annual election of officers and until their respective successors are chosen,
but any officer may be removed from office at any time by the affirmative vote
of a majority of the authorized number of directors then constituting the Board
of Directors.
(c) All officers chosen by the Board of Directors shall each
have such powers and duties as generally pertain to their respective offices,
subject to the specific provisions of this Article IV. Such officers shall also
have such powers and duties as from time to time may be conferred by the Board
of Directors or by any committee thereof.
Section 2. President.
The President shall be the chief executive officer and, subject to the
control of the Board of Directors, shall have general power over the management
and oversight of the administration and operation of the Corporation's business
and general supervisory power and authority over its policies and affairs. He
shall see that all orders and resolutions of the Board of Directors and of any
committee thereof are carried into effect.
Each meeting of the stockholders and of the Board of Directors shall be
presided over by such officer as has been designated by the Board of Directors
or, in his absence, by such officer or other person as is chosen at the meeting.
The Secretary or, in his absence, the General Counsel of the Corporation or such
officer as has
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been designated by the Board of Directors or, in his absence, such officer or
other person as is chosen by the person presiding, shall act as secretary of
each such meeting.
Section 3. Vice President.
The Vice President or Vice Presidents, if any, shall perform the duties
of the President in his absence or during his disability to act. In addition,
the Vice Presidents shall perform the duties and exercise the powers usually
incident to their respective offices and/or such other duties and powers as may
be properly assigned to them from time to time by the Board of Directors, the
Chairman of the Board or the President.
Section 4. Secretary.
The Secretary or an Assistant Secretary shall issue notices of
meetings, shall keep their minutes, shall have charge of the seal and the
corporate books, shall perform such other duties and exercise such other powers
as are usually incident to such offices and/or such other duties and powers as
are properly assigned thereto by the Board of Directors, the Chairman of the
Board or the President.
Section 5. Treasurer.
The Treasurer shall have charge of all monies and securities of the
Corporation, other than monies and securities of any division of the Corporation
which has a treasurer or financial officer appointed by the Board of Directors,
and shall keep regular books of account. The funds of the Corporation shall be
deposited in the name of the Corporation by the Treasurer with such associations
or trust companies as the Board of Directors from time to time shall designate.
He shall sign or countersign such instruments as require his signature, shall
perform all such duties and have all such powers as are usually incident to such
office and/or such other duties and powers as are properly assigned to him by
the Board of Directors, the Chairman of the Board or the President, and may be
required to give bond for the faithful performance of his duties in such sum and
with such surety as may be required by the Board of Directors.
Section 6. Assistant Secretaries and Other Officers.
The Board of Directors may appoint one or more assistant secretaries
and one or more assistants to the Treasurer, or one appointee to both such
positions, which officers shall have such powers and shall perform such duties
as are provided in these By-laws or as may be assigned to them by the Board of
Directors, the Chairman of the Board or the President.
Section 7. Action with Respect to Securities of Other Corporations
Unless otherwise directed by the Board of Directors, the President or
any officer of the Corporation authorized by the President shall have power to
vote and otherwise act on behalf of the Corporation, in person or by proxy, at
any meeting of stockholders of or with respect to any action of stockholders of
any other corporation in which this Corporation may hold securities and
otherwise to exercise any and all rights and powers which this Corporation may
possess by reason of its ownership of securities in such other Corporation.
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ARTICLE V
STOCK
Section 1. Certificates of Stock.
Each stockholder shall be entitled to a certificate signed by, or in
the name of the Corporation by, the President or a Vice President, and by the
Secretary or an Assistant Secretary, or the Treasurer or an Assistant Treasurer,
certifying the number of shares owned by him or her. Any or all of the
signatures on the certificate may be by facsimile.
Section 2. Transfers of Stock.
Transfers of stock shall be made only upon the transfer books of the
Corporation kept at an office of the Corporation or by transfer agents
designated to transfer shares of the stock of the Corporation. Except where a
certificate is issued in accordance with Section 4 of Article V of these
By-laws, an outstanding certificate for the number of shares involved shall be
surrendered for cancellation before a new certificate is issued therefore.
Section 3. Record Date.
In order that the Corporation may determine the stockholders entitled
to notice of or to vote at any meeting of stockholders, or to receive payment of
any dividend or other distribution or allotment of any rights or to exercise any
rights in respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may fix a record
date, which record date shall not precede the date on which the resolution
fixing the record date is adopted and which record date shall not be more than
sixty (60) nor less than ten (10) days before the date of any meeting of
stockholders, nor more than sixty (60) days prior to the time for such other
action as hereinbefore described; provided, however, that if no record date is
fixed by the Board of Directors, the record date for determining stockholders
entitled to notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice is given or,
if notice is waived, at the close of business on the day next preceding the day
on which the meeting is held, and, for determining stockholders entitled to
receive payment of any dividend or other distribution or allotment of rights or
to exercise any rights of change, conversion or exchange of stock or for any
other purpose, the record date shall be at the close of business on the day on
which the Board of Directors adopts a resolution relating thereto.
A determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of the meeting;
provided, however, that the Board of Directors may fix a new record date for the
adjourned meeting.
Section 4. Lost, Stolen or Destroyed Certificates.
In the event of the loss, theft or destruction of any certificate of
stock, another may be issued in its place pursuant to such regulations as the
Board of Directors may establish concerning proof of such loss, theft or
destruction and concerning the giving of a satisfactory bond or bonds of
indemnity.
Section 5. Regulations.
The issue, transfer, conversion and registration of certificates of
stock shall be governed by such other regulations as the Board of Directors may
establish.
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<PAGE>
ARTICLE VI
NOTICES
Section 1. Notices.
Except as otherwise specifically provided herein or required by law,
all notices required to be given to any stockholder, director, officer, employee
or agent shall be in writing and may in every instance be effectively given by
hand delivery to the recipient thereof, by depositing such notice in the mail,
postage paid, by sending such notice by prepaid telegram or mailgram or by
sending such notice by facsimile machine or other electronic transmission. Any
such notice shall be addressed to such stockholder, director, officer, employee
or agent at his or her last known address as the same appears on the books of
the Corporation. The time when such notice is received, if hand delivered, or
dispatched, if delivered through the mail, by telegram or mailgram or by
facsimile machine or other electronic transmission, shall be the time of the
giving of the notice.
Section 2. Waivers.
A written waiver of any notice, signed by a stockholder, director,
officer, employee or agent, whether before or after the time of the event for
which notice is to be given, shall be deemed equivalent to the notice required
to be given to such stockholder, director, officer, employee or agent. Neither
the business nor the purpose of any meeting need be specified in such a waiver.
ARTICLE VII
MISCELLANEOUS
Section 1. Facsimile Signatures.
In addition to the provisions for use of facsimile signatures elsewhere
specifically authorized in these By-laws, facsimile signatures of any officer or
officers of the Corporation may be used whenever and as authorized by the Board
of Directors or a committee thereof.
Section 2. Corporate Seal.
The Board of Directors may provide a suitable seal, containing the name
of the Corporation, which seal shall be in the charge of the Secretary. If and
when so directed by the Board of Directors or a committee thereof, duplicates of
the seal may be kept and used by the Treasurer or by an Assistant Secretary or
Assistant Treasurer.
Section 3. Reliance upon Books, Reports and Records.
Each director, each member of any committee designated by the Board of
Directors, and each officer of the Corporation shall, in the performance of his
or her duties, be fully protected in relying in good faith upon the books of
account or other records of the Corporation and upon such information, opinions,
reports or statements presented to the Corporation by any of its officers or
employees, or committees of the Board of Directors so designated, or by any
other person as to matters which such director or committee member reasonably
believes are within such other person's professional or expert competence and
who has been selected with reasonable care by or on behalf of the Corporation.
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Section 4. Fiscal Year.
The fiscal year of the Corporation shall be as fixed by the Board of
Directors.
Section 5. Time Periods.
In applying any provision of these By-laws which requires that an act
be done or not be done a specified number of days prior to an event or that an
act be done during a period of a specified number of days prior to an event,
calendar days shall be used, the day of the doing of the act shall be excluded
and the day of the event shall be included.
ARTICLE VIII
AMENDMENTS
The By-laws of the Corporation may be adopted, amended or repealed as
provided in Article SEVENTH of the Certificate of Incorporation of the
Corporation.
11
EXHIBIT 3.3
CHARTER OF THE ASSOCIATION IN STOCK FORM
<PAGE>
FEDERAL STOCK CHARTER
FIRST ROBINSON SAVINGS
AND LOAN, F.A.
SECTION 1. Corporate title. The full corporate title of the savings
association is "First Robinson Savings and Loan, F.A."
SECTION 2. Office. The home office of the savings association shall be
located at 501 East Main Street, Robinson, Crawford County, State of Illinois.
SECTION 3. Duration. The duration of the savings association is
perpetual.
SECTION 4. Purpose and powers. The purpose of the savings association
is to pursue any or all of the lawful objectives of a federal savings and loan
association chartered under section 5 of the Home Owners' Loan Act and to
exercise all of the express, implied, and incidental powers conferred thereby
and by all acts amendatory thereof and supplemental thereto, subject to the
Constitution and laws of the United States as they are now in effect, or as they
may hereafter be amended, and subject to all lawful and applicable rules,
regulations, and orders of the Office of Thrift Supervision ("Office").
SECTION 5. Capital stock. The total number of shares of all classes of
the capital stock which the savings association has the authority to issue is
two million five hundred thousand (2,500,000), of which two million (2,000,000)
shall be common stock of par value of $.01 per share, and of which five hundred
thousand (500,000) shall be serial preferred stock of par value $.01 per share.
The shares may be issued from time to time as authorized by the board of
directors without further approval of stockholders, except as otherwise provided
in this Section 5 or to the extent that such approval is required by governing
law, rule or regulation. The consideration for the issuance of the shares shall
be paid in full before their issuance and shall not be less than the par value.
Neither promissory notes nor future services shall constitute payment or part
payment for the issuance of shares of the savings association. The consideration
for the shares shall be cash, tangible or intangible property (to the extent
direct investment in such property would be permitted), labor, or services
actually performed for the savings association or any combination of the
foregoing. In the absence of actual fraud in the transaction, the value of such
property, labor, or services, as determined by the board of directors of the
savings association, shall be conclusive. Upon payment of such consideration,
such shares shall be deemed to be fully paid and nonassessable. In the case of a
stock dividend, that part of the surplus of the savings association which is
transferred to stated capital upon the issuance of shares as a share dividend
shall be deemed to be the consideration for their issuance.
Except for shares issuable in connection with the conversion of the
savings association from the mutual to the stock form of organization, no shares
of capital stock (including shares issuable upon conversion, exchange, or
exercise of other securities) shall be issued, directly or indirectly, to
officers, directors, or controlling persons of the savings association other
than as part of a general public offering or as qualifying shares to a director,
unless their issuance or the plan under which they would be issued has been
approved by a majority of the total votes eligible to be cast at a legal
meeting.
<PAGE>
Nothing contained in this Section 5 (or in any supplementary sections
hereto) shall entitle the holders of any class of a series of capital stock to
vote as a separate class or series or to more than one vote per share, except as
to the cumulation of votes for the election of directors: Provided, That this
restriction on voting separately by class or series shall not apply:
(i) To any provision which would authorize the holders of
preferred stock, voting as a class or series, to elect some
members of the board of directors, less than a majority
thereof, in the event of default in the payment of dividends
on any class or series of preferred stock;
(ii) To any provision which would require the holders of preferred
stock, voting as a class or series, to approve the merger or
consolidation of the savings association with another
corporation or the sale, lease, or conveyance (other than by
mortgage or pledge) of properties or business in exchange for
securities of a corporation other than the savings association
if the preferred stock is exchanged for securities of such
other corporation: Provided, That no provision may require
such approval for transactions undertaken with the assistance
or pursuant to the direction of the Office, the Federal
Deposit Insurance Corporation or the Resolution Trust
Corporation;
(iii) To any amendment which would adversely change the specific
terms of any class or series of capital stock as set forth in
this Section 5 (or in any supplementary sections hereto),
including any amendment which would create or enlarge any
class or series ranking prior thereto in rights and
preferences. An amendment which increases the number of
authorized shares of any class or series of capital stock, or
substitutes the surviving savings association in a merger or
consolidation for the savings association, shall not be
considered to be such an adverse change.
A description of the different classes and series (if any) of the
savings association's capital stock and a statement of the designations, and the
relative rights, preferences, and limitations of the shares of each class and
series (if any) of capital stock are as follows:
A. Common stock. Except as provided in this Section 5 (or in any
supplementary sections thereto) the holders of the common stock shall
exclusively possess all voting power. Each holder of shares of common stock
shall be entitled to one vote for each share held by such holder, except as to
the cumulation of votes for the election of directors.
Whenever there shall have been paid, or declared and set aside for
payment, to the holders of the outstanding shares of any class of stock having
preference over the common stock as to the payment of dividends, the full amount
of dividends and of sinking fund, retirement fund, or other retirement payments,
if any, to which such holders are respectively entitled in preference to the
common stock, then dividends may be paid on the common stock and on any class or
series of stock entitled to participate therewith as to dividends out of any
assets legally available for the payment of dividends.
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In the event of any liquidation, dissolution, or winding up of the
savings association, the holders of the common stock (and the holders of any
class or series of stock entitled to participate with the common stock in the
distribution of assets) shall be entitled to receive, in cash or in kind, the
assets of the savings association available for distribution remaining after:
(i) Payment or provision for payment of the savings association's debts and
liabilities; (ii) distributions or provision for distributions in settlement of
its liquidation account; and (iii) distributions or provisions for distributions
to holders of any class or series of stock having preference over the common
stock in the liquidation, dissolution, or winding up of the savings association.
Each share of common stock shall have the same relative rights as and be
identical in all respects with all the other shares of common stock.
B. Preferred Stock. The savings association may provide in
supplementary sections to its charter for one or more classes of preferred
stock, which shall be separately identified. The shares of any class may be
divided into and issued in series, with each series separately designated so as
to distinguish the shares thereof from the shares of all other series and
classes. The terms of each series shall be set forth in a supplementary section
to the charter. All shares of the same class shall be identical except as to the
following relative rights and preferences, as to which there may be variations
between different series:
(a) The distinctive serial designation and the number of shares
constituting such series;
(b) The dividend rate or the amount of dividends to be paid on the
shares of such series, whether dividends shall be cumulative
and, if so, from which date(s), the payment date(s) for
dividends, and the participating or other special rights, if
any, with respect to dividends;
(c) The voting powers, full or limited, if any, of shares of such
series;
(d) Whether the shares of such series shall be redeemable and, if
so, the price(s) at which, and the terms and conditions on
which such shares may be redeemed;
(e) The amount(s) payable upon the shares of such series in the
event of voluntary or involuntary liquidation, dissolution, or
winding up of the savings association;
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<PAGE>
(f) Whether the shares of such series shall be entitled to the
benefit of a sinking or retirement fund to be applied to the
purchase or redemption of such shares, and if so entitled, the
amount of such fund and the manner of its application,
including the price(s) at which such shares may be redeemed or
purchased through the application of such fund;
(g) Whether the shares of such series shall be convertible into,
or exchangeable for, shares of any other class or classes of
stock of the savings association and, if so, the conversion
price(s), or the rate(s) of exchange, and the adjustments
thereof, if any, at which such conversion or exchange may be
made, and any other terms and conditions of such conversion or
exchange;
(h) The price or other consideration for which the shares of such
series shall be issued; and
(i) Whether the shares of such series which are redeemed or
converted shall have the status of authorized but unissued
shares of serial preferred stock and whether such shares may
be reissued as shares of the same or any other series of
serial preferred stock.
Each share of each series of serial preferred stock shall have the same
relative rights as and be identical in all respects with all the other shares of
the same series.
The board of directors shall have authority to divide, by the adoption
of supplementary charter sections, any authorized class of preferred stock into
series, and, within the limitations set forth in this section and the remainder
of this charter, fix and determine the relative rights and preferences of the
shares of any series so established.
Prior to the issuance of any preferred shares of a series established
by a supplementary charter section adopted by the board of directors, the
savings association shall file with the Secretary to the Office a dated copy of
that supplementary section of this charter established and designating the
series and fixing and determining the relative rights and preferences thereof.
SECTION 6. Preemptive rights. Holders of the capital stock of the
savings association shall be entitled to preemptive rights with respect to any
shares of the savings association which may be issued.
SECTION 7. Liquidation account. Pursuant to the requirements of the
Office's regulations (12 C.F.R. Subchapter D) the savings association shall
establish and maintain a liquidation account for the benefit of its savings
account holders as of September 30, 1994 ("eligible savers"). In the event of a
complete liquidation of the savings association, it shall comply with such
regulations with respect to the amount and the priorities on liquidation of each
of the savings association's eligible saver's inchoate interest in the
liquidation account,
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<PAGE>
to the extent it is still in existence: Provided, that an eligible saver's
inchoate interest in the liquidation account shall not entitle such eligible
saver to any voting rights at meetings of the savings association's
stockholders.
SECTION 8. Certain provisions applicable for five years.
Notwithstanding anything contained in the savings association's charter or
bylaws to the contrary, for a period of five years from the date of completion
of the conversion of the savings association from mutual to stock form, the
following provisions shall apply:
A. Beneficial ownership limitation. No person shall directly or
indirectly offer to acquire or acquire the beneficial ownership of more than 10%
of any class of an equity security of the savings association. This limitation
shall not apply to a transaction in which the savings association forms a
holding company without change in the respective beneficial ownership interests
of its stockholders other than pursuant to the exercise of any dissenter and
appraisal rights, the purchase of shares by underwriters in connection with a
public offering, or the purchase of shares by a tax-qualified employee stock
benefit plan which is exempt from the approval requirements under Section
574.3(c)(1)(vi) of the Office's regulations.
In the event shares are acquired in violation of this Section 8, all
shares beneficially owned by any person in excess of 10% shall be considered
"excess shares" and shall not be counted as shares entitled to vote and shall
not be voted by any person or counted as voting shares in connection with any
matters submitted to the stockholders for a vote.
For purposes of this Section 8, the following definitions apply:
(1) The term "person" includes an individual, a group acting in
concert, a corporation, a partnership, a savings association, a joint stock
company, a trust, an unincorporated organization or similar company, a syndicate
or any other group formed for the purpose of acquiring, holding or disposing of
the equity securities of the savings association.
(2) The term "offer" includes every offer to buy or otherwise acquire,
solicitation of an offer to sell, tender offer for, or request or invitation for
tenders of, a security or interest in a security for value.
(3) The term "acquire" includes every type of acquisition, whether
effected by purchase, exchange, operation of law or otherwise.
(4) The term "acting in concert" means (a) knowing participation in a
joint activity or conscious parallel action towards a common goal whether or not
pursuant to an express agreement, or (b) a combination or pooling of voting or
other interests in the securities of an issuer for a common purpose pursuant to
any contract, understanding, relationship, agreement or other arrangements,
whether written or otherwise.
B. Cumulative voting limitation. Stockholders shall not be permitted to
cumulate their votes for election of directors.
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<PAGE>
C. Call for special meetings. Special meetings of stockholders relating
to changes in control of the savings association or amendments to its charter
shall be called only upon direction of the board of directors.
SECTION 9. Directors. The savings association shall be under the
direction of a board of directors. The authorized number of directors, as stated
in the savings association's bylaws, shall not be fewer than five nor more than
fifteen.
SECTION 10. Amendment of charter. Except as provided in Section 5, no
amendment, addition, alteration, change or repeal of this charter shall be made,
unless such is first proposed by the board of directors of the savings
association, then preliminarily approved by the Office, which preliminary
approval may be granted by the Office pursuant to regulations specifying
preapproved charter amendments, and thereafter approved by the stockholders by a
majority of the total votes eligible to be cast at a legal meeting. Any
amendment, addition, alteration, change, or repeal so acted upon shall be
effective upon filing with the Office in accordance with regulatory procedures
or on such other date as the Office may specify in its preliminary approval.
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<PAGE>
FIRST ROBINSON SAVINGS AND
LOAN, F.A.
ATTEST: __________________________ By:________________________
Secretary President
OFFICE OF THRIFT SUPERVISION
ATTEST: ___________________________ By:________________________
Secretary of the Office Director of the Office
of Thrift Supervision
Declared effective this _____________ day of ___________________, 1997.
7
EXHIBIT 3.4
BYLAWS OF THE ASSOCIATION IN STOCK FORM
<PAGE>
STOCK BYLAWS
OF
FIRST ROBINSON SAVINGS AND LOAN, F.A.
Article I - Home Office
The home office of the association shall be at 501 East Main Street, in
the County of Crawford, in the State of Illinois.
Article II - Shareholders
Section 1. Place of Meetings. All annual and special meetings of
shareholders shall be held at the home office of the association or at such
other convenient place as the board of directors may determine.
Section 2. Annual Meeting. A meeting of the shareholders of the
association for the election of directors and for the transaction of any other
business of the association shall be held annually within 150 days after the end
of the association's fiscal year on the fourth Tuesday of each November if not a
legal holiday, and if a legal holiday, then on the next day following which is
not a legal holiday, at 8:00 a.m., or at such other date and time within such
150-day period as the board of directors may determine.
Section 3. Special Meetings. Special meetings of the shareholders for
any purpose or purposes, unless otherwise prescribed by the regulations of the
Office of Thrift Supervision ("Office"), may be called at any time by the
chairman of the board, the president, or a majority of the board of directors,
and shall be called by the chairman of the board, the president, or the
secretary upon the written request of the holders of not less than one-tenth of
all of the outstanding capital stock of the association entitled to vote at the
meeting. Such written request shall state the purpose or purposes of the meeting
and shall be delivered to the home office of the association addressed to the
chairman of the board, the president, or the secretary.
Section 4. Conduct of Meetings. Annual and special meetings shall be
conducted in accordance with the most current edition of Robert's Rules of Order
unless otherwise prescribed by regulations of the Office or these bylaws or the
board of directors adopts another written procedure for the conduct of meetings.
The board of directors shall designate, when present, either the chairman of the
board or president to preside at such meetings.
Section 5. Notice of Meetings. Written notice stating the place, day,
and hour of the meeting and the purpose(s) for which the meeting is called shall
be delivered not fewer than 20 nor more than 50 days before the date of the
meeting, either personally or by mail, by or at the direction of the chairman of
the board, the president, or the secretary, or the directors calling the
meeting, to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the mail,
addressed to the shareholder
<PAGE>
at the address as it appears on the stock transfer books or records of the
association as of the record date prescribed in section 6 of this article II
with postage prepaid. When any shareholders' meeting, either annual or special,
is adjourned for 30 days or more, notice of the adjourned meeting shall be given
as in the case of an original meeting. It shall not be necessary to give any
notice of the time and place of any meeting adjourned for less than 30 days or
of the business to be transacted at the meeting, other than an announcement at
the meeting at which such adjournment is taken.
Section 6. Fixing of Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment, or shareholders entitled to receive payment of any dividend, or
in order to make a determination of shareholders for any other proper purpose,
the board of directors shall fix in advance a date as the record date for any
such determination of shareholders. Such date in any case shall be not more than
60 days and, in case of a meeting of shareholders, not fewer than 10 days prior
to the date on which the particular action, requiring such determination of
shareholders, is to be taken. When a determination of shareholders entitled to
vote at any meeting of shareholders has been made as provided in this section,
such determination shall apply to any adjournment.
Section 7. Voting Lists. At least 20 days before each meeting of the
shareholders, the officer or agent having charge of the stock transfer books for
shares of the association shall make a complete list of the shareholders of
record entitled to vote at such meeting, or any adjournment thereof, arranged in
alphabetical order, with the address and the number of shares held by each. This
list of shareholders shall be kept on file at the home office of the association
and shall be subject to inspection by any shareholder of record or the
shareholder's agent at any time during usual business hours for a period of 20
days prior to such meeting. Such list shall also be produced and kept open at
the time and place of the meeting and shall be subject to inspection by any
shareholder of record or any shareholder's agent during the entire time of the
meeting. The original stock transfer book shall constitute prima facie evidence
of the shareholders entitled to examine such list or transfer books or to vote
at any meeting of shareholders. In lieu of making the shareholder list available
for inspection by shareholders as provided in the preceding paragraph, the board
of directors may elect to follow the procedures prescribed in ss. 552.6(d) of
the Office's regulations as now or hereafter in effect.
Section 8. Quorum. A majority of the outstanding shares of the
association entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. If less than a majority of the
outstanding shares is represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. The shareholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough shareholders to constitute less than a quorum. If a quorum is present,
the affirmative vote of the majority of the shares represented at the meeting
and entitled to vote on the subject matter shall be the act of the shareholders,
unless the vote of a greater number of shareholders voting together or voting by
classes is required by law or the charter. Directors, however, are elected by a
plurality of the votes cast at an election of directors.
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<PAGE>
Section 9. Proxies. At all meetings of shareholders, a shareholder may
vote by proxy executed in writing by the shareholder or by his or her duly
authorized attorney in fact. Proxies may be given telephonically or
electronically as long as the holder uses a procedure for verifying the identity
of the shareholder. Proxies solicited on behalf of the management shall be voted
as directed by the shareholder or, in the absence of such direction, as
determined by a majority of the board of directors. No proxy shall be valid more
than eleven months from the date of its execution except for a proxy coupled
with an interest.
Section 10. Voting of Shares in the Name of Two or More Persons. When
ownership stands in the name of two or more persons, in the absence of written
directions to the association to the contrary, at any meeting of the
shareholders of the association any one or more of such shareholders may cast,
in person or by proxy, all votes to which such ownership is entitled. In the
event an attempt is made to cast conflicting votes, in person or by proxy, by
the several persons in whose names shares of stock stand, the vote or votes to
which those persons are entitled shall be cast as directed by a majority of
those holding such and present in person or by proxy at such meeting, but no
votes shall be cast for such stock if a majority cannot agree.
Section 11. Voting of Shares by Certain Holders. Shares standing in the
name of another corporation may be voted by any officer, agent, or proxy as the
bylaws of such corporation may prescribe, or, in the absence of such provision,
as the board of directors of such corporation may determine. Shares held by an
administrator, executor, guardian, or conservator may be voted by him or her,
either in person or by proxy, without a transfer of such shares into his or her
name. Shares standing in the name of a trustee may be voted by him or her,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him or her without a transfer of such shares into his or her name.
Shares held in trust in an IRA or Keogh Account, however, may be voted by the
association if no other instructions are received. Shares standing in the name
of a receiver may be voted by such receiver, and shares held by or under the
control of a receiver may be voted by such receiver without the transfer into
his or her name if authority to do so is contained in an appropriate order of
the court or other public authority by which such receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Neither treasury shares of its own stock held by the association nor
shares held by another corporation, if a majority of the shares entitled to vote
for the election of directors of such other corporation are held by the
association, shall be voted at any meeting or counted in determining the total
number of outstanding shares at any given time for purposes of any meeting.
Section 12. Cumulative Voting. Every shareholder entitled to vote at an
election for directors shall have the right to vote, in person or by proxy, the
number of shares owned by the shareholder for as many persons as there are
directors to be elected and for whose election the shareholder has a right to
vote, or to cumulate the votes by giving one candidate as many votes as the
number of such directors to be elected multiplied by the number of shares shall
equal or
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by distributing such votes on the same principle among any number of candidates.
Section 13. Inspectors of Election. In advance of any meeting of
shareholders, the board of directors may appoint any person other than nominees
for office as inspectors of election to act at such meeting or any adjournment.
The number of inspectors shall be either one or three. Any such appointment
shall not be altered at the meeting. If inspectors of election are not so
appointed, the chairman of the board or the president may, or on the request of
not fewer than 10 percent of the votes represented at the meeting shall, make
such appointment at the meeting. If appointed at the meeting, the majority of
the votes present shall determine whether one or three inspectors are to be
appointed. In case any person appointed as inspector fails to appear or fails or
refuses to act, the vacancy may be filled by appointment by the board of
directors in advance of the meeting or at the meeting by the chairman of the
board or the president.
Unless otherwise prescribed by regulations of the Office, the duties of
such inspectors shall include: determining the number of shares and the voting
power of each share, the shares represented at the meeting, the existence of a
quorum, and the authenticity, validity and effect of proxies; receiving votes,
ballots, or consents; hearing and determining all challenges and questions in
any way arising in connection with the rights to vote; counting and tabulating
all votes or consents; determining the result; and such acts as may be proper to
conduct the election or vote with fairness to all shareholders.
Section 14. Nominating Committee. The board of directors shall act as a
nominating committee for selecting the management nominees for election as
directors. Except in the case of nominee substituted as a result of the death or
other incapacity of a management nominee, the nominating committee shall deliver
written nominations to the secretary at least 20 days prior to the date of the
annual meeting. Upon delivery, such nominations shall be posted in a conspicuous
place in each office of the association. No nominations for directors except
those made by the nominating committee shall be voted upon at the annual meeting
unless other nominations by shareholders are made in writing and delivered to
the secretary of the association at least five days prior to the date of the
annual meeting. Upon delivery, such nominations shall be posted in a conspicuous
place in each office of the association. Ballots bearing the names of all
persons nominated by the nominating committee and by shareholders shall be
provided for use at the annual meeting. However, if the nominating committee
shall fail or refuse to act at least 20 days prior to the annual meeting,
nominations for directors may be made at the annual meeting by any shareholder
entitled to vote and shall be voted upon.
Section 15. New Business. Any new business to be taken up at the annual
meeting shall be stated in writing and filed with the secretary of the
association at least five days before the date of the annual meeting, and all
business so stated, proposed, and filed shall be considered at the annual
meeting; but no other proposal shall be acted upon at the annual meeting. Any
shareholder may make any other proposal at the annual meeting and the same may
be discussed and considered, but unless stated in writing and filed with the
secretary at least five days before the meeting, such proposal shall be laid
over for action at an adjourned, special, or annual meeting of the shareholders
taking place 30 days or more thereafter. This provision shall not prevent the
consideration and approval or disapproval at the annual meeting of reports of
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officers, directors, and committees; but in connection with such reports, no new
business shall be acted upon at such annual meeting unless stated and filed as
herein provided.
Section 16. Informal Action by Shareholders. Any action required to be
taken at a meeting of the shareholders, or any other action which may be taken
at a meeting of shareholders, may be taken without a meeting if consent in
writing, setting forth the action so taken, shall be given by all of the
shareholders entitled to vote with respect to the subject matter.
Article III - Board of Directors
Section 1. General Powers. The business and affairs of the association
shall be under the direction of its board of directors. The board of directors
shall annually elect a chairman of the board and a president from among its
members and shall designate, when present, either the chairman of the board or
the president to preside at its meetings.
Section 2. Number and Term. The board of directors shall consist of
sixmembers, and shall be divided into three classes as nearly equal in number as
possible. The members of each class shall be elected for a term of three years
and until their successors are elected and qualified. One class shall be elected
by ballot annually.
Section 3. Regular Meetings. A regular meeting of the board of
directors shall be held without other notice than this bylaw following the
annual meeting of shareholders. The board of directors may provide, by
resolution, the time and place, for the holding of additional regular meetings
without other notice than such resolution. Directors may participate in a
meeting by means of a conference telephone or similar communications device
through which all persons participating can hear each other at the same time.
Participation by such means shall constitute presence in person for all
purposes.
Section 4. Qualification. Each director shall at all times be the
beneficial owner of not less than 100 shares of capital stock of the association
unless the association is a wholly owned subsidiary of a holding company.
Section 5. Special Meetings. Special meetings of the board of directors
may be called by or at the request of the chairman of the board, the president,
or one-third of the directors. The persons authorized to call special meetings
of the board of directors may fix any place, within the association's normal
lending territory, as the place for holding any special meeting of the board of
directors called by such persons.
Members of the board of directors may participate in special meetings
by means of conference telephone or similar communications equipment by which
all persons participating in the meeting can hear each other. Such participation
shall constitute presence in person for all purposes.
Section 6. Notice. Written notice of any special meeting shall be given
to each director at least 24 hours prior thereto when delivered personally or by
telegram or at least five days prior thereto when delivered by mail at the
address at which the director is most likely to
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be reached. Such notice shall be deemed to be delivered when deposited in the
mail so addressed, with postage prepaid if mailed, when delivered to the
telegraph company if sent by telegram, or when the association receives notice
of delivery if electronically transmitted. Any director may waive notice of any
meeting by a writing filed with the secretary. The attendance of a director at a
meeting shall constitute a waiver of notice of such meeting, except where a
director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
meeting of the board of directors need be specified in the notice or waiver of
notice of such meeting.
Section 7. Quorum. A majority of the number of directors fixed by
section 2 of this article III shall constitute a quorum for the transaction of
business at any meeting of the board of directors; but if less than such
majority is present at a meeting, a majority of the directors present may
adjourn the meeting from time to time. Notice of any adjourned meeting shall be
given in the same manner as prescribed by section 5 of this Article III.
Section 8. Manner of Acting. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the board
of directors, unless a greater number is prescribed by regulation of the Office
or by these bylaws.
Section 9. Action Without a Meeting. Any action required or permitted
to be taken by the board of directors at a meeting may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the directors.
Section 10. Resignation. Any director may resign at any time by sending
a written notice of such resignation to the home office of the association
addressed to the chairman of the board or the president. Unless otherwise
specified, such resignation shall take effect upon receipt by the chairman of
the board or the president. More than three consecutive absences from regular
meetings of the board of directors, unless excused by resolution of the board of
directors, shall automatically constitute a resignation, effective when such
resignation is accepted by the board of directors.
Section 11. Vacancies. Any vacancy occurring on the board of directors
may be filled by the affirmative vote of a majority of the remaining directors
although less than a quorum of the board of directors. A director elected to
fill a vacancy shall be elected to serve only until the next election of
directors by the shareholders. Any directorship to be filled by reason of an
increase in the number of directors may be filled by election by the board of
directors for a term of office continuing only until the next election of
directors by the shareholders.
Section 12. Compensation. Directors, as such, may receive a stated
salary for their services. By resolution of the board of directors, a reasonable
fixed sum, and reasonable expenses of attendance, if any, may be allowed for
attendance at each regular or special meeting of the board of directors. Members
of either standing or special committees may be allowed such compensation for
attendance at committee meetings as the board of directors may determine.
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Section 13. Presumption of Assent. A director of the association who is
present at a meeting of the board of directors at which action on any
association matter is taken shall be presumed to have assented to the action
taken unless his or her dissent or abstention shall be entered in the minutes of
the meeting or unless he or she shall file a written dissent to such action with
the person acting as the secretary of the meeting before the adjournment thereof
or shall forward such dissent by registered mail to the secretary of the
association within five days after the date a copy of the minutes of the meeting
is received. Such right to dissent shall not apply to a director who voted in
favor of such action.
Section 14. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director may be removed only for cause by a vote
of the holders of a majority of the shares then entitled to vote at an election
of directors. If less than the entire board is to be removed, no one of the
directors may be removed if the votes cast against the removal would be
sufficient to elect a director if then cumulatively voted at an election of the
class of directors of which such director is a part. If cumulative voting has
been deleted, the preceding sentence should be deleted. Whenever the holders of
the shares of any class are entitled to elect one or more directors by the
provisions of the charter or supplemental sections thereto, the provisions of
this section shall apply, in respect to the removal of a director or directors
so elected, to the vote of the holders of the outstanding shares of that class
and not to the vote of the outstanding shares as a whole.
Article IV - Executive and Other Committees
Section 1. Appointment. The board of directors, by resolution adopted
by a majority of the full board, may designate the chief executive officer and
two or more of the other directors to constitute an executive committee. The
designation of any committee pursuant to this Article IV and the delegation of
authority shall not operate to relieve the board of directors, or any director,
of any responsibility imposed by law or regulation.
Section 2. Authority. The executive committee, when the board of
directors is not in session, shall have and may exercise all of the authority of
the board of directors except to the extent, if any, that such authority shall
be limited by the resolution appointing the executive committee; and except also
that the executive committee shall not have the authority of the board of
directors with reference to: the declaration of dividends; the amendment of the
charter or bylaws of the association, or recommending to the shareholders a plan
of merger, consolidation, or conversion; the sale, lease, or other disposition
of all or substantially all of the property and assets of the association
otherwise than in the usual and regular course of its business; a voluntary
dissolution of the association; a revocation of any of the foregoing; or the
approval of a transaction in which any member of the executive committee,
directly or indirectly, has any material beneficial interest.
Section 3. Tenure. Subject to the provisions of section 8 of this
article IV, each member of the executive committee shall hold office until the
next regular annual meeting of the board of directors following his or her
designation and until a successor is designated as a member of the executive
committee.
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Section 4. Meetings. Regular meetings of the executive committee may be
held without notice at such times and places as the executive committee may fix
from time to time by resolution. Special meetings of the executive committee may
be called by any member thereof upon not less than one day's notice stating the
place, date, and hour of the meeting, which notice may be written or oral. Any
member of the executive committee may waive notice of any meeting and no notice
of any meeting need be given to any member thereof who attends in person. The
notice of a meeting of the executive committee need not state the business
proposed to be transacted at the meeting.
Section 5. Quorum. A majority of the members of the executive committee
shall constitute a quorum for the transaction of business at any meeting
thereof, and action of the executive committee must be authorized by the
affirmative vote of a majority of the members present at a meeting at which a
quorum is present.
Section 6. Action Without a Meeting. Any action required or permitted
to be taken by the executive committee at a meeting may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the members of the executive committee.
Section 7. Vacancies. Any vacancy in the executive committee may be
filled by a resolution adopted by a majority of the full board of directors.
Section 8. Resignations and Removal. Any member of the executive
committee may be removed at any time with or without cause by resolution adopted
by a majority of the full board of directors. Any member of the executive
committee may resign from the executive committee at any time by giving written
notice to the president or secretary of the association. Unless otherwise
specified, such resignation shall take effect upon its receipt; the acceptance
of such resignation shall not be necessary to make it effective.
Section 9. Procedure. The executive committee shall elect a presiding
officer from its members and may fix its own rules of procedure which shall not
be inconsistent with these bylaws. It shall keep regular minutes of its
proceeding and report the same to the board of directors for its information at
the meeting held next after the proceedings shall have occurred.
Section 10. Other Committees. The board of directors may by resolution
establish an audit, loan, or other committee composed of directors as they may
determine to be necessary or appropriate for the conduct of the business of the
association and may prescribe the duties, constitution, and procedures thereof.
Article V - Officers
Section 1. Positions. The officers of the association shall be a
president, one or more vice presidents, a secretary, and a treasurer or
comptroller, each of whom shall be elected by the board of directors. The board
of directors may also designate the chairman of the board as an officer. The
offices of the secretary and treasurer or comptroller may be held by the same
person and a vice president may also be either the secretary or the treasurer or
comptroller. The
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board of directors may designate one or more vice presidents as executive vice
president or senior vice president. The board of directors may also elect or
authorize the appointment of such other officers as the business of the
association may require. The officers shall have such authority and perform such
duties as the board of directors may from time to time authorize or determine.
In the absence of action by the board of directors, the officers shall have such
powers and duties as generally pertain to their respective offices.
Section 2. Election and Term of Office. The officers of the association
shall be elected annually at the first meeting of the board of directors held
after each annual meeting of the shareholders. If the election of officers is
not held at such meeting, such election shall be held as soon thereafter as
possible. Each officer shall hold office until a successor has been duly elected
and qualified or until the officer's death, resignation, or removal in the
manner hereinafter provided. Election or appointment of an officer, employee, or
agent shall not of itself create contractual rights. The board of directors may
authorize the association to enter into an employment contract with any officer
in accordance with regulations of the Office; but no such contract shall impair
the right of the board of directors to remove any officer at any time in
accordance with section 3 of this article V.
Section 3. Removal. Any officer may be removed by the board of
directors whenever in its judgment the best interests of the association will be
served thereby, but such removal, other than for cause, shall be without
prejudice to the contractual rights, if any, of the person so removed.
Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification, or otherwise may be filled by the board
of directors for the unexpired portion of the term.
Section 5. Remuneration. The remuneration of the officers shall be
fixed from time to time by the board of directors.
Article VI - Contracts, Loans, Checks, and Deposits
Section 1. Contracts. To the extent permitted by regulations of the
Office, and except as otherwise prescribed by these bylaws with respect to
certificates for shares, the board of directors may authorize any officer,
employee, or agent of the association to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the association.
Such authority may be general or confined to specific instances.
Section 2. Loans. No loans shall be contracted on behalf of the
association and no evidence of indebtedness shall be issued in its name unless
authorized by the board of directors. Such authority may be general or confined
to specific instances.
Section 3. Checks, Drafts, etc. All checks, drafts, or other orders for
the payment of money, notes, or other evidences of indebtedness issued in the
name of the association shall be signed by one or more officers, employees or
agents of the association in such manner as shall from time to time be
determined by the board of directors.
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Section 4. Deposits. All funds of the association not otherwise
employed shall be deposited from time to time to the credit of the association
in any duly authorized depositories as the board of directors may select.
Article VII - Certificates for Shares and Their Transfer
Section 1. Certificates for Shares. Certificates representing shares of
capital stock of the association shall be in such form as shall be determined by
the board of directors and approved by the Office. Such certificates shall be
signed by the chief executive officer or by any other officer of the association
authorized by the board of directors, attested by the secretary or an assistant
secretary, and sealed with the corporate seal or a facsimile thereof. The
signatures of such officers upon a certificate may be facsimiles if the
certificate is manually signed on behalf of a transfer agent or a registrar
other than the association itself or one of its employees. Each certificate for
shares of capital stock shall be consecutively numbered or otherwise identified.
The name and address of the person to whom the shares are issued, with the
number of shares and date of issue, shall be entered on the stock transfer books
of the association. All certificates surrendered to the association for transfer
shall be cancelled and no new certificate shall be issued until the former
certificate for a like number of shares has been surrendered and cancelled,
except that in the case of a lost or destroyed certificate, a new certificate
may be issued upon such terms and indemnity to the association as the board of
directors may prescribe.
Section 2. Transfer of Shares. Transfer of shares of capital stock of
the association shall be made only on its stock transfer books. Authority for
such transfer shall be given only by the holder of record or by his or her legal
representative, who shall furnish proper evidence of such authority, or by his
or her attorney authorized by a duly executed power of attorney and filed with
the association. Such transfer shall be made only on surrender for cancellation
of the certificate for such shares. The person in whose name shares of capital
stock stand on the books of the association shall be deemed by the association
to be the owner for all purposes.
Article VIII - Fiscal Year
The fiscal year of the association shall end on the 31st day of October
of each year. The appointment of accountants shall be subject to annual
ratification by the shareholders.
Article IX - Dividends
Subject to the terms of the association's charter and the regulations
and orders of the Office, the board of directors may, from time to time,
declare, and the association may pay, dividends on its outstanding shares of
capital stock.
Article X - Corporate Seal
The board of directors shall provide an association seal which shall be
two concentric circles between which shall be the name of the association. The
year of incorporation or an emblem may appear in the center.
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Article XI - Amendments
These bylaws may be amended in a manner consistent with regulations of
the Office and shall be effective after: (i) approval of the amendment by a
majority vote of the authorized board of directors, or by a majority vote of the
votes cast by the shareholders of the association at any legal meeting, and (ii)
receipt of any applicable regulatory approval. When an association fails to meet
its quorum requirements, solely due to vacancies on the board, then the
affirmative vote of a majority of the sitting board will be required to amend
the bylaws.
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EXHIBIT 3.5
ARTICLES OF ASSOCIATION OF NATIONAL BANK
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FIRST ROBINSON SAVINGS BANK, NATIONAL ASSOCIATION
ARTICLES OF ASSOCIATION
For the purpose of organizing an Association to carry on the business
of banking under the laws of the United States, the undersigned do enter into
the following articles of association:
FIRST. The title of this Association shall be First Robinson Savings
Bank, National Association.
SECOND. The Main Office of the Association shall be in Robinson,
Illinois, County of Crawford, State of Illinois. The general business of the
Association shall be conducted at its main office and its branches.
THIRD. The Board of Directors of this Association shall consist of not
less than five nor more than twenty-five persons, the exact number to be fixed
and determined from time to time by resolution of a majority of the full Board
of Directors or by resolution of a majority of the shareholders at any annual or
special meeting thereof. Each director shall own common or preferred stock of
the Association with an aggregate par value of not less than $1,000, or common
or preferred stock of a bank holding company owning the Association with an
aggregate par, fair market or equity value of not less than $1,000, as of either
(i) the date of purchase, (ii) the date the person became a director or (iii)
the date of that person's most recent election to the Board of Directors,
whichever is greater. Any combination of common or preferred stock of the
Association or holding company may be used.
Any vacancy in the Board of Directors may be filled by action of a
majority of the remaining directors between meetings of shareholders. The Board
of Directors may not increase the number of directors between meetings of
shareholders to a number which: (1) exceeds by more than two the number of
directors last elected by shareholders where the number was 15 or less; and (2)
exceeds by more than four the number of directors last elected by shareholders
where the number was 16 or more, but in no event shall the number of directors
exceed 25.
Terms of directors, including directors selected to fill vacancies,
shall expire at the next regular meeting of shareholders at which directors are
elected, unless the directors resign or are removed from office.
Despite the expiration of a director's term, the director shall
continue to serve until his or her successor is elected and qualifies or until
there is a decrease in the number of directors and his or her position is
eliminated.
Honorary or advisory members of the Board of Directors, without voting
power or power of final decision in matters concerning the business of the
Association, may be appointed by resolution of a majority of the full Board of
Directors, or by resolution of shareholders at any annual or special meeting.
Honorary or advisory directors shall not be counted for purposes of determining
the number of directors of the Association or the presence of a quorum in
connection with any board action, and shall not be required to own qualifying
shares.
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FOURTH. There shall be an annual meeting of the shareholders to elect
directors and transact whatever other business may be brought before the
meeting. It shall be held at the main office or any other convenient place the
Board of Directors may designate, on the day of each year specified therefore in
the bylaws, or if that day falls on a legal holiday in the State in which the
Association is located, on the next following banking day. If no election is
held on the day fixed, or in the event of a legal holiday, an election may be
held on any subsequent day within 60 days of the day fixed, to that designated
by the Board of Directors, or, if the directors fail to fix the day, by
shareholders representing two-thirds of the shares issued and outstanding. In
all cases at least 10 days advance notice of the meeting shall be given to the
shareholders by first class mail.
In all elections of directors, the number of votes each common
shareholder may cast will be determined by multiplying the number of shares he
or she owns by the number of directors to be elected. Those votes may be
cumulated and cast for a single candidate or may be distributed among two or
more candidates in the manner selected by the shareholder. On all other
questions, each common shareholder shall be entitled to one vote for each share
of stock held by him or her. If the issuance of preferred stock with voting
rights has been authorized by a vote of shareholders owning a majority of the
common stock of the Association, preferred shareholders will not have cumulative
voting rights and will not be included within the same class as common
shareholders to elect directors.
Nominations for election to the Board of Directors may be made by the
Board of Directors or by any shareholder of any outstanding class of capital
stock of the bank entitled to vote for election of directors.
Nominations for election to the board of directors may be made by the
board of directors or by any stockholder of any outstanding class of capital
stock of the association entitled to vote for election of directors. Nominations
other than those made by or on behalf of the existing management shall be made
in writing and be delivered or mailed to the president of the association not
less than 14 days nor more than 50 days prior to any meeting of shareholders
called for the election of directors; provided, however, that if less than 21
days notice of the meeting is given to shareholders, such nominations shall be
mailed or delivered to the president of the association not later than the close
of business on the seventh day following the day on which the notice of meeting
was mailed. Such notification shall contain the following information to the
extent known to the notifying shareholder.
(1) The name and address of each proposed nominee.
(2) The principal occupation of each proposed nominee.
(3) The total number of shares of capital stock of the association that
will be voted for each proposed nominee.
(4) The name and residence address of the notifying shareholder.
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(5) The number of shares of capital stock of the association owned by the
notifying shareholder.
Nominations not made in accordance herewith may, in his/her discretion,
be disregarded by the chairperson of the meeting, and the vote tellers may
disregard all votes cast for each such nominee. No bylaw may unreasonably
restrict the nomination of directors by shareholders.
A director may resign at any time by delivering written notice to the
Board of Directors, its chairperson, or to the Association, which resignation
shall be effective when the notice is delivered unless the notice specifies a
later effective date.
A director may be removed by shareholders at a meeting called to remove
him or her, where notice of the meeting stating that the purpose or one of the
purposes is to remove him or her is provided, if there is a failure to fulfill
one of the affirmative requirements for qualification, or for cause, provided,
however, that a director may not be removed if the number of votes sufficient to
elect him or her under cumulative voting is voted against his or her removal.
FIFTH. The authorized amount of capital stock of this Association shall
be two million (2,000,000) shares of common stock of the par value of five
dollars ($5.00) each; and five hundred thousand (500,000) shares of preferred
stock; but said capital stock may be increased or decreased from time to time,
according to the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the
Association shall have any pre-emptive or preferential right of subscription to
any shares of any class of stock of the Association, whether now or hereafter
authorized, or to any obligations convertible into stock of the Association,
issued, or sold, nor any right of subscription to any thereof other than such,
if any, as the Board of Directors, in its discretion may from time to time
determine and at such price as the Board of Directors may from time to time fix.
Unless otherwise specified in the articles of Association or required
by law, (1) all matters requiring shareholder action, including amendments to
the articles of association must be approved by shareholders owning a majority
voting interest in the outstanding voting stock, and (2) each shareholder shall
be entitled to one vote per share.
Unless otherwise specified in the articles of association or required
by law, all shares of voting stock shall be voted together as a class, on any
matters requiring shareholder approval. If a proposed amendment would affect two
or more classes or series in the same or a substantially similar way, all the
classes or series so affected, must vote together as a single voting group on
the proposed amendment.
Shares of the same class or series may be issued as a dividend on a pro
rata basis and without consideration. Shares of another class or series may be
issued as a share dividend for a class or series of stock if approved by a
majority of the votes entitled to be cast by the class or series to be issued
unless there are no outstanding shares of the class or series to be issued.
Unless
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otherwise provided by the Board of Directors, the record date for determining
shareholders entitled to a share dividend shall be the date the Board of
Directors authorizes the share dividend.
Unless otherwise provided in the bylaws, the record date for
determining shareholders entitled to notice of and to vote at any meeting is the
close of business on the day before the first notice is mailed or otherwise sent
to the shareholders, provided that in no event may a record date be more than 70
days before the meeting.
If a shareholder is entitled to fractional shares pursuant to a stock
dividend, consolidation or merger, reverse stock split or otherwise, the
Association may (a) issue fractional shares or, (b) in lieu of the issuance of
fractional shares, issue script or warrants entitling the holder to receive a
full share upon surrendering enough script or warrants to equal a full share,
(c) if there is an established and active market in the Association's stock,
make reasonable arrangements to provide the shareholder an opportunity to
realize a fair price through sale of the fraction, or purchase of the additional
fraction required for a full share, (d) remit the cash equivalent of the
fraction to the shareholder, or (e) sell full shares representing all the
fractions at public auction or to the highest bidder after having solicited and
received sealed bids from at least three licensed stock brokers, and distribute
the proceeds pro rata to shareholders who otherwise would be entitled to the
fractional shares. The holder of a fractional share is entitled to exercise the
rights for shareholder, including the right to vote, to receive dividends, and
to participate in the assets of the Association upon liquidation, in proportion
to the fractional interest. The holder of script or warrants is not entitled to
any of these rights unless the script or warrants explicitly provide for such
rights. The script or warrants may be subject to such additional conditions as
(1) that the script or warrants will become void if not exchanged for full
shares before a specified date; and (2) that the shares for which the script or
warrants are exchangeable may be sold at the option of the Association and the
proceeds paid to scriptholders.
The Association, at any time and from time to time, may authorize and
issue debt obligations, whether or not subordinated, without the approval of the
shareholders. Obligations classified as debt, whether or not subordinated, which
may be issued by the Association without the approval of shareholders, do not
carry voting rights on any issue, including an increase or decrease in the
aggregate number of the securities, or the exchange or reclassification of all
or part of securities into securities of another class or series.
Nothing contained in this Article Fifth (or in any supplementary
sections hereto) shall entitle the holders of any class of a series of capital
stock to vote as a separate class or series or to more than one vote per share,
except as to the cumulation of votes for the election of directors: Provided,
That this restriction on voting separately by class or series shall not apply:
(i) To any provision which would authorize the holders of
preferred stock, voting as a class or series, to elect some members of
the board of directors, less than a majority thereof, in the event of
default in the payment of dividends on any class or series of preferred
stock;
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(ii) To any provision which would require the holders of
preferred stock, voting as a class or series, to approve the merger or
consolidation of the Association with another corporation or the sale,
lease, or conveyance (other than by mortgage or pledge) of properties
or business in exchange for securities of a corporation other than the
Association if the preferred stock is exchanged for securities of such
other corporation;
(iii) To any amendment which would adversely change the
specific terms of any class or series of capital stock as set forth in
this Article Fifth (or in any supplementary sections hereto), including
any amendment which would create or enlarge any class or series ranking
prior thereto in rights and preferences. An amendment which increases
the number of authorized shares of any class or series of capital
stock, or substitutes the surviving Association in a merger or
consolidation for the Association, shall not be con sidered to be such
an adverse change.
A description of the different classes and series (if any) of the
Association's capital stock and a statement of the designations, and the
relative rights, preferences, and limitations of the shares of each class of and
series (if any) of capital stock are as follows:
A. Common Stock. Except as provided in this Article Fifth (or in any
supplementary sections thereto), the holders of the common stock shall
exclusively possess all voting power. Each holder of shares of common stock
shall be entitled to one vote for each share held by such holder, except as to
the cumulation of votes for the election of directors.
Whenever there shall have been paid, or declared and set aside for
payment, to the holders of the outstanding shares of any class of stock having
preference over the common stock as to the payment of dividends, the full amount
of dividends and of sinking fund, retirement fund or other retirement payments,
if any, to which such holders are respectively entitled in preference to the
common stock, then dividends may be paid on the common stock and on any class or
series of stock entitled to participate therewith as to dividends out of any
assets legally available for the payment of dividends.
In the event of any liquidation, dissolution, or winding up of the
Association, the holders of the common stock (and the holders of any class or
series of stock entitled to participate with the common stock in the
distribution of assets) shall be entitled to receive, in cash or in kind, the
assets of the Association available for distribution remaining after: (i)
Payment or provision for payment of the Association's debts and liabilities;
(ii) distributions or provision for distributions in settlement of its
liquidation account; and (iii) distributions or provisions for distributions to
holders of any class or series of stock having preference over the common stock
in the liquidation, dissolution, or winding up of the Association. Each share of
common stock shall have the same relative rights as and be identical in all
respects with all the other shares of common stock.
B. Preferred Stock. The Association may provide in supplementary
sections to its charter, without shareholder approval, for one or more classes
of preferred stock, which shall be separately identified. The shares of any
class may be divided into and issued in series, with each series separately
designated so as to distinguish the shares thereof from the shares of all other
series and
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classes. The terms of each series shall be set forth in a supplementary section
to the charter. All shares of the same class shall be identical except as to the
following relative rights and preferences, as to which there may be variations
between different series;
(a) The distinctive serial designation and the number of shares
constituting such series;
(b) The dividend rates or the amount of dividends to be paid on
the shares of such series, whether dividends shall be
cumulative and, if so, from which date(s), the payment date(s)
for dividends, and the participating or other special rights,
if any, with respect to dividends;
(c) The voting powers, full or limited, if any, of shares of such
series;
(d) Whether the shares of such series shall be redeemable and, if
so, the price(s) at which, and the terms and conditions on
which, such shares may be redeemed;
(e) The amount(s) payable upon the shares of such series in the
event of voluntary or involuntary liquidation, dissolution or
winding up of the Association;
(f) Whether the shares of such series shall be entitled to the
benefit of a sinking or retirement fund to be applied to the
purchases or redemption of such shares, and if so entitled,
the amount of such fund and the manner of its application,
including the price(s) at which such shares may be redeemed or
purchased through the application of such fund;
(g) Whether the shares of such series shall be convertible into,
or exchangeable for, shares of any other class or classes of
stock of the Association and, if so, the conversion price(s),
or the rate(s) of exchange, and the adjustments thereof, if
any, at which such conversion or exchange may be made, and any
other terms and conditions of such conversion or exchange;
(h) The price or other consideration for which the shares of such
series shall be issued; and
(i) Whether the shares of such series which are redeemed or
converted shall have the status of authorized but unissued
shares of serial preferred stock and whether such shares may
be reissued as shares of the same or any other series of
serial preferred stock.
Each share of each series of serial preferred stock shall have the same
relative rights as and be identical in all respects with all the other shares of
the same series.
The board of directors shall have authority to divide, by the adoption
of supplementary charter sections, any authorized class of preferred stock into
series, and, within the limitations set
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forth in this Article Fifth and the charter, fix and determine the relative
rights and preferences of the shares of any series so established.
SIXTH. The Board of Directors shall appoint one of its members
president of this Association, and one of its members chairperson of the board
and shall have the power to appoint one or more vice presidents, a secretary who
shall keep minutes of the directors' and shareholders' meetings and be
responsible for authenticating the records of the Association, and such other
officers and employees as may be required to transact the business of this
Association. A duly appointed officer may appoint one or more officers or
assistant officers is authorized by the Board of Directors in accordance with
the bylaws.
The Board of Directors shall have the power to:
(1) Define the duties of the officers, employees and agents of the
Association.
(2) Delegate the performance of its duties, but not the
responsibility for its duties, to the officers, employees,
and agents of the Association.
(3) Fix the compensation and enter into employment contracts with
its officers and employees upon reasonable terms and
conditions consistent with applicable law.
(4) Dismiss officers and employees.
(5) Require bonds from officers and employees and to fix the
penalty thereof.
(6) Ratify written policies authorized by the Association's
management or committees of the board.
(7) Regulate the manner in which any increase or decrease of the
capital of the Association shall be made, provided that
nothing herein shall restrict the power of shareholders to
increase or decrease the capital of the Association in
accordance with law, and nothing shall raise or lower from
two-thirds the percentage required for shareholder approval to
increase or reduce the capital.
(8) Manage and administer the business and affairs of the
Association.
(9) Adopt initial bylaws, not inconsistent with law or the
articles of association, for managing the business and
regulating the affairs of the Association.
(10) Amend or repeal bylaws, except to the extent that the articles
of association reserve this power in whole or in part to
shareholders.
(11) Make contracts.
(12) Generally to perform all acts that are legal for a Board of
Directors to perform.
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SEVENTH. The Board of Directors shall have the power to change the
location of the Main Office to any other place within the limits of Crawford,
Illinois, without the approval of the shareholders, and shall have the power to
establish or change the location of any branch or branches of the Association to
any other location, without the approval of the shareholders but subject to the
approval of the Office of the Comptroller of the Currency.
EIGHTH. The corporate existence of this Association shall continue
until terminated according to the laws of the United States.
NINTH. The Board of Directors of this Association, or any one or more
shareholders owning, in the aggregate, not less than ten percent of the stock of
this Association, may call a special meeting of shareholders at any time. Unless
otherwise provided by the laws of the United States, a notice of the time,
place, and purpose of every annual and special meeting of the shareholders shall
be given by first-class mail, postage prepaid, mailed at least 10, and no more
than 60 days prior to the date of the meeting to each shareholder of record at
his/her address as shown upon the books of this Association. Unless otherwise
provided by the Bylaws, any action requiring approval by the shareholders must
be effected at a duly called annual or special meeting.
TENTH. Indemnification
(a) In this Article:
"applicant" means the person seeking indemnification pursuant to this
Article.
"Association" means, in addition to the Association, any constituent
association, institution or entity (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 agent of such
constituent entity, or is or was serving at the request of such
constituent entity as a director, officer, employee or agent of another
association, partnership, joint venture, trust or other enterprise,
shall stand in the same position under the provisions of this Article
with respect to the resulting or surviving entity as he would have with
respect to such constituent entity if its separate existence had
continued.
"expenses" includes counsel fees.
"liability" means the obligation to pay a judgment, settlement,
penalty, fine, including any excise tax assessed with respect to an
employee benefit plan, or reasonable expenses incurred with respect to
a proceeding.
"party" includes an individual who was, is, or is threatened to be made
a named defendant or respondent in a proceeding.
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"proceeding" means any threatened, pending, or completed action, suit,
or proceeding, whether civil, criminal, administrative or investigative
and whether formal or informal.
(b) To the full extent that the Illinois Corporation Act, as it exists
on the date hereof or as hereafter amended, permits the limitation or
elimination of the liability of directors and officers, no director or officer
of the Association made a party to any proceeding shall be liable to the
Association or its shareholders for monetary damages arising out of any
transaction, occurrence or course of conduct, whether occurring prior or
subsequent to the effective date of this Article.
(c) The Association shall indemnify (i) any person who was or is a
party to any proceeding, including a proceeding brought by a shareholder in the
right of the Association or brought by or on behalf of shareholders of the
Association, by reason of the fact that he is or was a director or officer of
the Association, or (ii) any director or officer who is or was serving at the
request of the Association as a director, trustee, partner or officer or another
association, corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise, against any liability incurred by him in connection
with such proceeding unless he engaged in willful misconduct or a knowing
violation of the criminal law, provided, however, no such indemnification may
apply to expenses, penalties, or other payments incurred in an administrative
proceeding or action instituted by an appropriate bank regulatory agency which
proceeding or action results in a final order assessing civil money penalties or
requiring affirmative action by an individual or individuals in the form of
payments to the Association. A person is considered to be serving an employee
benefit plan at the Association's request if his duties to the Association also
impose duties on, or otherwise involve services by, him to the plan or to
participants in or beneficiaries of the plan. The Board of Directors is hereby
empowered, by a majority vote of a quorum of disinterested directors, to enter
into a contract to indemnify any director or officer in respect of any
proceedings arising from any act or omission, whether occurring before or after
the execution of such contract.
(d) The provisions of this Article shall be applicable to all
proceedings commenced after it becomes effective, arising from any act or
omission, whether occurring before or after such adoption. No amendment or
repeal of this Article shall have any effect on the rights provided under this
Article with respect to any act or omission occurring prior to such amendment or
repeal. The Association shall promptly take all such actions, and make all such
determinations, as shall be necessary or appropriate to comply with its
obligation to make any indemnity under this Article and shall promptly pay or
reimburse all reasonable expenses, including attorneys' fees, incurred by any
such director, officer, employee or agent in connection with such actions and
determinations or proceedings of any kind arising therefrom.
(e) The termination of any 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 applicant did not meet the standard of
conduct described in section (b) or (c) of this Article.
(f) Any indemnification under section (c) of this Article (unless
ordered by a court) shall be made by the Association only as authorized in the
specific case upon a determination
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that indemnification of the applicant is proper in the circumstances because he
has met the applicable standard of conduct set forth in section (c).
The determination shall be made:
(i) By the Board of Directors by a majority vote of a quorum
consisting of directors not at the time parties to the proceeding;
(ii) If a quorum cannot be obtained under subsection (i) of
this section, by majority vote of a committee duly designated by the
Board of Directors (in which designation directors who are parties may
participate), consisting solely of two or more directors not at the
time parties to the proceedings;
(iii) By special legal counsel:
(A) Selected by the Board of Directors or its
committee in the manner prescribed in subsection (i) or (ii)
of this section; or
(B) If a quorum of the Board of Directors cannot be
obtained under subsection (i) of this section and a committee
cannot be designated under subsection (ii) of this section,
selected by majority vote of the full Board of Directors, in
which selection directors who are parties may participate; or
(iv) By the shareholders, but shares owned by or voted under
the control of directors who are at the time parties to the proceeding
may not be voted on the determination. To the extent, however, that an
applicant who has been successful on the merits or otherwise in defense
of any action, suit or proceeding described above, or in defense of any
claim, issue or matter therein, shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith, without the necessity of authorization in the
specific case. No applicant shall be entitled to indemnification in
connection with any action, suit or proceeding voluntarily initiated by
such person unless the action, suit or proceeding was authorized by a
majority of the entire Board of Directors.
Authorization of indemnification and evaluation as to
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is appropriate, except that if the
determination is made by special legal counsel, such evaluation as to
reasonableness of expenses shall be made by those entitled under
subsection (iii) of this section (f) to select counsel.
Notwithstanding the foregoing, in the event there has been a
change in the composition of a majority of the Board of Directors after
the date of the alleged act or omission with respect to which
indemnification is claimed, any determination as to indemnification and
advancement of expenses with respect to any claim for indemnification
made pursuant to this Article shall be made by special legal counsel
agreed upon by
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the Board of Directors and the applicant. If the Board of Directors
and the applicant are unable to agree upon such special legal counsel,
the Board of Directors and the applicant each shall select a nominee,
and the nominees shall select such special legal counsel.
(g) Notwithstanding any contrary determination in the specific case
under Paragraph f of this Article, and notwithstanding the absence of any
determination thereunder, any applicant may apply to any court of competent
jurisdiction in the State of Illinois for indemnification to the extent
otherwise permissible under Paragraph C of this Article. The basis of such
indemnification by a court shall be a determination by such court that
indemnification of the applicant is proper in the circumstances because he has
met the applicable standards of conduct set forth in Paragraph C of this
Article. Notice of any application for indemnification pursuant to this
Paragraph (g) shall be given to the Association promptly upon the filing of such
application. Notwithstanding any of the foregoing, unless otherwise required by
law, no applicant shall be entitled to indemnification in connection with any
action, suit or proceeding voluntarily initiated by such person unless the
action, suit or proceeding was authorized by a majority of the entire Board of
Directors.
(h) The Association shall pay for or reimburse the reasonable expenses
incurred by any applicant who is a party to a proceeding in advance of final
disposition of the proceeding or the making of any determination under section
(c) if the applicant furnishes the Association:
(i) (A) a written statement of his good faith belief that
he has met the standard of conduct described in section (c); and
(B) a written undertaking, executed personally or on
his behalf, to repay the advance if it is ultimately determined that he
did not meet such standard of conduct.
(ii) The undertaking required by paragraph (B) of subsection
(i) of this section shall be an unlimited general obligation of the
applicant but need not be secured and may be accepted without reference
to financial ability to make repayment.
(iii) Authorizations of payments under this section shall be
made by the persons specified in section (f).
(i) The Board of Directors is hereby empowered, by majority vote of a
quorum consisting of disinterested directors, to cause the Association to
indemnify or contract to indemnify any person not specified in section (b) or
(c) of this Article who was, is or may become a party to any proceeding, by
reason of the fact that he is or was an employee or agent of the Association, or
is or was serving at the request of the Association as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, to the same extent as if such person
were specified as one to whom indemnification is granted in section (c). The
provisions of sections (d) through (h) of this Article shall be applicable to
any indemnification provided hereafter pursuant to this section (i).
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(j) The Association may purchase and maintain insurance to indemnify it
against the whole or any portion of the liability assumed by it in accordance
with this Article and may also procure insurance, in such amounts as the Board
of Directors may determine, on behalf of any person who is or was a director,
officer, employee or agent of the Association, or is or was serving at the
request of the Association, as a director, officer, trustee, partner, employee
or agent of another corporation, partnership, joint venture, trust, employee
benefit plan or other enterprise, against any liability asserted against or
incurred by him any such capacity or arising from his status as such, whether or
not the Association would have the power to indemnify him against such liability
under the provisions of this Article.
(k) Every reference herein to directors, officers, trustees, partners,
employees or agents shall include former directors, officers, employees and
agents and their respective heirs, executors and administrators. The
indemnification hereby provided and provided hereafter pursuant to the power
hereby conferred by this Article on the Board of Directors shall not be
exclusive of any other rights to which any person may be entitled, including any
right under policies of insurance that may be purchased and maintained by the
Association or others, with respect to claims, issues or matters in relation to
which the Association would not have the power to indemnify such person under
the provisions of this Article. Such rights shall not prevent or restrict the
power of the Association to make or provide for any further indemnity, or
provisions for determining entitlement to indemnity, pursuant to one or more
indemnification agreements, Bylaws, or other arrangements (including, without
limitation, creation of trust funds or security interests funded by letters of
credit or other means) approved by the Board of Directors (whether or not any of
the directors of the Association shall be a party to or beneficiary of any such
agreements, Bylaws or arrangements); provided, however, that any provision of
such agreements, Bylaws or other arrangements shall not be effective if and to
the extent that it is determined to be contrary to this Article or applicable
laws of the State of Illinois.
(l) Each provision of this Article shall be severable, and an adverse
determination as to any such provision shall in no way affect the validity of
any other provision.
ELEVENTH. These articles of association may be amended at any regular
or special meeting of the shareholders by the affirmative vote of the holders of
a majority of the stock of this Association, unless the vote of the holders of a
greater amount of stock is required by law, and in that case by the vote of the
holders of such greater amount. The Association's Board of Directors may propose
one or more amendments to the articles of association for submission to the
shareholders.
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In witness whereof, we have hereunto set our hands this ___ day of
__________, 1997.
- ------------------------------- --------------------------------
James D. Goodwine Scott F. Pulliam
- ------------------------------- --------------------------------
Clell T. Keller Donald K. Inboden
- ------------------------------- --------------------------------
William K. Thomas Rick L. Catt
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EXHIBIT 3.6
BYLAWS OF FIRST ROBINSON SAVINGS BANK, NATIONAL ASSOCIATION
<PAGE>
BYLAWS OF
FIRST ROBINSON SAVINGS BANK, NATIONAL ASSOCIATION
ARTICLE I
Meetings of Shareholders
Section 1.1. Annual Meeting. The regular annual meeting of the
shareholders to elect directors and transact whatever other business may
properly come before the meeting, shall be held at the main office of the
Association, 501 East Main Street, City of Robinson, State of Illinois or such
other places as the Board of Directors may designate, at 8:00 a.m. on the Fourth
Tuesday of November of each year. If, for any cause, an election of directors is
not made on that date, or in the event of a legal holiday, on the next following
banking day, an election may be held on any subsequent day within 60 days of the
date fixed, to be designated by the Board of Directors, or if the directors fail
to fix the date, by the shareholders representing two-thirds of the shares.
Section 1.2. Special Meetings. Except as otherwise specifically
provided by statute, special meetings of the shareholders may be called for any
purpose at any time by the Board of Directors or by any one or more shareholders
owning, in the aggregate, not less than ten percent of the outstanding stock of
the Association entitled to vote at the meeting. Every such special meeting,
unless otherwise provided by law, shall be called by mailing, postage prepaid,
not less than 10 days prior to the date fixed for the meeting, to each
shareholder at the address appearing on the books of the Association a notice
stating the purpose of the meeting. Such written request shall state the purpose
or purposes of the meeting and shall be delivered to the home office of the
Association to the Chairperson of the Board, the President or the Secretary.
Section 1.3. Nominations of Directors. Nominations for election to the
board of directors may be made by the board of directors or by any stockholder
of any outstanding class of capital stock of the association entitled to vote
for election of directors. Nominations other than those made by or on behalf of
the existing management shall be made in writing and be delivered or mailed to
the president of the association not less than 14 days nor more than 50 days
prior to any meeting of shareholders called for the election of directors;
provided, however, that if less than 21 days notice of the meeting is given to
shareholders, such nominations shall be mailed or delivered to the president of
the association not later than the close of business on the seventh day
following the day on which the notice of meeting was mailed. Such notification
shall contain the following information to the extent known to the notifying
shareholder.
(1) The name and address of each proposed nominee.
(2) The principal occupation of each proposed nominee.
<PAGE>
(3) The total number of shares of capital stock of the association that
will be voted for each proposed nominee.
(4) The name and residence address of the notifying shareholder.
(5) The number of shares of capital stock of the association owned by the
notifying shareholder.
Nominations not made in accordance herewith may, in his/her discretion,
be disregarded by the chairperson of the meeting, and the vote tellers may
disregard all votes cast for each such nominee. No bylaw may unreasonably
restrict the nomination of directors by shareholders.
Such notification shall contain the following information to the extent
known to the notifying shareholder: (i) the name and address of the proposed
nominee; (ii) the principal occupation of the proposed nominee; (iii) the total
number of shares of capital stock of the Association that will be voted for each
proposed nominee; (iv) the name and residence of the notifying shareholder; and
(v) the number of shares of capital stock of the Association owned by the
notifying shareholder. Nominations not made in accordance herewith may, in the
discretion of the chairperson of the meeting, be disregarded by the chairperson
and upon the chairperson's instructions, the vote tellers may disregard all
votes cast for each such nominee.
Section 1.4. Proxies. Shareholders may vote at any meeting of the
shareholders by proxies duly authorized in writing, but no officer or employee
of this Association shall act as proxy. Proxies solicited on behalf of the
management shall be voted as directed by the shareholder, or in the absence of
such direction, as determined by a majority of the Board of Directors. Proxies
shall be valid only for one meeting, to be specified therein, and any
adjournments of such meeting. Proxies shall be dated and filed with the records
of the meeting. Proxies with rubber stamped facsimile signatures may be used and
unexecuted proxies may be counted upon receipt of a confirming telegram from the
shareholder. No proxy shall be valid more than eleven months from the date of
its execution except for a proxy coupled with an interest. Proxies meeting the
above requirements submitted at any time during a meeting shall be accepted.
Section 1.5. Quorum. A majority of the outstanding capital stock,
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders, unless otherwise provided by law, or by the shareholders or
directors pursuant to Section 9.2; but less than a quorum may adjourn any
meeting by action of a majority of the shares so represented, from time to time,
and the meeting may be held, as adjourned, without further notice. A majority of
the votes cast shall decide every question or matter submitted to the
shareholders at any meeting, unless otherwise provided by law or by the Articles
of Association, or by the shareholders or directors pursuant to Section 9.2. At
such adjourned meeting at which a quorum is present or represented, any business
may be transacted which might have been transacted at the meeting as originally
notified. The shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
shareholders to constitute less than a quorum.
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Section 1.6. Waiver of Notice. A written waiver of notice, signed by
the person entitled to notice, whether before or after the time stated therein,
shall be deemed equivalent to notice. Attendance of a person at a meeting shall
constitute waiver of notice of such meeting, except when the person attends a
meeting for the express purpose of objecting, at the beginning of the meeting,
to the transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting need be specified in any written waiver of notice.
Section 1.7. Notice of Meetings. Written notice stating the place, day,
and hour of the meeting and the purpose(s) for which the meeting is called shall
be delivered not fewer than 10 nor more than 50 days before the date of the
meeting, either personally or by mail, by or at the direction of the Chairperson
of the Board, the President, or the Secretary, or the directors calling the
meeting, to each shareholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the U.S.
mail, addressed to the shareholder at the address as it appears on the stock
transfer books or records of the savings bank as of the record date prescribed
in Section 1.8 with postage prepaid. When any shareholders' meeting, either
annual or special, is adjourned to a different date, time or place, notice need
not be given of the new date, time or place, if the new date, time or place is
announced at the meeting before adjournment, unless any additional items of
business are to be considered, or the Association becomes aware of an
intervening event materially affecting any matter to be voted upon on more than
10 days prior to the date to which the meeting is adjourned. If a new record
date is fixed, however, notice of the adjourned meeting must be given to persons
who are shareholders as of the new record date.
Section 1.8. Fixing of Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment, or shareholders entitled to receive payment of any dividend, or
in order to make a determination of shareholders for any other proper purpose,
the board of directors shall fix in advance a date as the record date for any
such determination of shareholders. Such date in any case shall be not more than
60 days and, in case of a meeting of shareholders, not fewer than 10 days prior
to the date on which the particular action, requiring such determination of
shareholders, is to be taken. When a determination of shareholders entitled to
vote at any meeting of shareholders has been made as provided in this section,
such determination shall apply to any adjournment. The record date for
determining shareholders entitled to vote at a special meeting is the date the
first shareholder signs a demand for the meeting describing the purpose or
purposes for which it is to be held.
A special meeting may be called by the shareholders or the Board of
Directors to amend the Articles of Association or Bylaws, whether or not the
Bylaws may be amended by the Board of Directors in the absence of shareholder
approval.
Section 1.9. Voting List. At least 20 days before each meeting of the
shareholders, the officer or agent having charge of the stock transfer books for
shares of the Association shall make a complete list of the shareholders
entitled to vote at such meeting, or any adjournment, arranged in alphabetical
order, with the address and the number of shares held by each. This list of
shareholders shall be kept on file at the home office of the Association and
shall be subject to inspection by any shareholder at any time during usual
business hours for a period of 20 days prior
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to such meeting. Such list shall also be produced and kept open at the time and
place of the meeting and shall be subject to inspection by any shareholder
during the entire time of the meeting. The original stock transfer book shall
constitute prima facie evidence of the shareholders entitled to examine such
list or transfer books or to vote at any meeting of shareholders.
Section 1.10. Voting of Shares in the Name of Two or More Persons. When
ownership stands in the name of two or more persons, in the absence of written
directions to the Association to the contrary, at any meeting of the
shareholders of the Association any one or more of such shareholders may cast,
in person or by proxy, all votes to which such ownership is entitled. In the
event an attempt is made to cast conflicting votes, in person or by proxy, by
the several persons in whose names shares of stock stand, the vote or votes to
which those persons are entitled shall be cast as directed by a majority of
those holding such stock and present in person or by proxy at such meeting, but
no votes shall be cast for such stock if a majority cannot agree.
Section 1.11. Voting of shares by Certain Holders. Shares standing in
the name of another corporation may be voted by any officer, agent, or proxy as
the bylaws of such corporation may prescribe, or, in the absence of such
provision, as the board of directors of such corporation may determine. Shares
held by an administrator, executor, guardian, or conservator may be voted by
him, either in person or by proxy, without a transfer of such shares into his
name. Shares standing in the name of a trustee may be voted by him, either in
person or by proxy, but no trustee shall be entitled to vote shares held by him
without a transfer of such shares into his name. Shares standing in the name of
a receiver may be voted by such receiver, and shares held by or under the
control of a receiver may be voted by such receiver without the transfer into
his name if authority to do so is contained in an appropriate order of the court
or other public authority by which such receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Neither treasury shares of its own stock held by the Association nor
shares held by another corporation, if a majority of the shares entitled to vote
for the election of directors of such other corporation are held by the
Association, shall be voted at any meeting or counted in determining the total
number of outstanding shares at any given time for purposes of any meeting.
Section 1.12. Cumulative Voting. Every shareholder entitled to vote at
an election for directors shall have the right to vote, in person or by proxy,
the number of shares owned by the shareholder for as many persons as there are
directors to be elected and for whose election the shareholder has a right to
vote, or to cumulate the votes by giving one candidate as many votes as the
number of such directors to be elected multiplied by the number of shares shall
equal or by distributing such votes on the same principle among any number of
candidates.
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Section 1.13. Inspectors of Election. In advance of any meeting of
shareholders, the board of directors may appoint any persons other than nominees
for office as inspectors of election to act at such meeting or any adjournment.
The number of inspectors shall be either one or three. Any such appointment
shall not be altered at the meeting. If inspectors of election are not so
appointed, the Chairperson of the Board or the President may, or on the request
of not fewer than 10 percent of the votes represented at the meeting shall, make
such appointment at the meeting. If appointed at the meeting, the majority of
the votes present shall determine whether one or three inspectors are to be
appointed. In case any person appointed as inspector fails to appear or fails or
refuses to act, the vacancy may be filled by appointment by the Board of
Directors in advance of the meeting or at the meeting by the Chairperson of the
Board or the President.
Unless otherwise prescribed by law, the duties of such inspectors shall
include: de termining the number of shares and the voting power of each share,
the shares represented at the meeting, the existence of a quorum, and the
authenticity, validity and effect of proxies; receiving votes, ballots or
consents; hearing and determining all challenges and questions in any way
arising in connection with the right to vote; counting and tabulating all votes
or consents; determining the result; and such acts as may be proper to conduct
the election or vote with fairness to all shareholders.
Section 1.14. New Business. Any new business to be taken up at the
annual meeting shall be stated in writing and filed with the Secretary of the
Association at least five days before the date of the annual meeting, and all
business so stated, proposed, and filed shall be considered at the annual
meeting; but no other proposal shall be acted upon at the annual meeting. Any
shareholder may make any other proposal at the annual meeting and the same may
be discussed and considered, but unless stated in writing and filed with the
Secretary at least five days before the meeting, such proposal shall be laid
over for action at an adjourned, special, or annual meeting of the shareholders
taking place 30 days or more thereafter. This provision shall not prevent the
consideration and approval or disapproval at the annual meeting of reports of
officers, directors, and committees; but in connection with such reports, no new
business shall be acted upon at such annual meeting unless stated and filed as
herein provided.
Section 1.15. Informal Action by Shareholders. Any action required to
be taken at a meeting of the shareholders, or any other action which may be
taken at a meeting of shareholders, may be taken without a meeting if consent in
writing, setting forth the action so taken, shall be given by all of the
shareholders entitled to vote with respect to the subject matter.
ARTICLE II
Directors
Section 2.1. Board of Directors. The Board of Directors shall have the
power to manage and administer the business and affairs of the Association.
Except as expressly limited by law, all corporate powers of the Association
shall be vested in and may be exercised by said Board of Directors.
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Section 2.2. Number. The Board of Directors shall consist of not less
than five nor more than twenty-five shareholders, the exact number within such
minimum and maximum limits to be fixed and determined from time to time by
resolution of a majority of the full Board of Directors or by resolution of the
shareholders at any meeting thereof; provided, however, that a majority of the
full Board of Directors may not increase the number of directors to a number
which; (i) exceeds by more than two the number of directors last elected by
shareholders where such number was fifteen or less; and (ii) to a number which
exceeds by more than four the number of directors last elected by shareholders
where such number was sixteen or more, but in no event shall the number of
directors exceed twenty-five. The members of the Board of Directors shall be
elected annually.
Section 2.3. Organization Meeting. The Cashier, upon receiving the
certificate of the Inspectors of Election, of the result of any election, shall
notify the directors-elect of their election and of the time at which they are
required to meet at the main office of the Association to organize the new Board
of Directors and elect and appoint officers of the Association for the
succeeding year. Such meeting shall be held on the day of the election or as
soon thereafter as practicable, and, in any event, within 30 days thereof. If,
at the time fixed for such meeting, there shall not be a quorum, the directors
present may adjourn the meeting, from time to time, until a quorum is obtained.
Section 2.4. Regular Meetings. The regular meetings of the Board of
Directors shall be held, without notice, on the Second Tuesday of each month at
the main office. When any regular meeting of the Board of Directors falls upon a
holiday, the meeting shall be held on the next banking business day unless the
Board of Directors shall designate another day.
Section 2.5. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairperson of the Board, the President or at the
request one-third of the directors. Each member of the Board of Directors shall
be given notice stating the time and place by telegram, letter, or in person, of
each special meeting. The persons authorized to call special meetings may fix
any place for holding any special meeting called by such persons.
Section 2.6. Quorum. A majority of the director positions on the Board
of Directors shall constitute a quorum at any meeting, except when otherwise
provided by law or these Bylaws, provided that a quorum may not be reduced below
one-third of the director positions but a less number may adjourn any meeting,
from time to time, and the meeting may be held, as adjourned, without further
notice. If the number of directors is reduced below the number that would
constitute a quorum, no business may be transacted, except selecting directors
to fill vacancies in conformance with Section 2.7. If a quorum is present, the
directors may take action through a vote of the majority of the directors who
are in attendance.
Section 2.7. Vacancies. When any vacancy occurs among the directors,
including a vacancy created by an increase in the number of directors, the
remaining members of the Board of Directors, according to the laws of the United
States, may appoint a director to fill such vacancy at any regular meeting of
the Board of Directors, or at a special meeting called for that purpose at which
a quorum is present, or if the directors remaining in office constitute fewer
than
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a quorum of the Board of Directors, by the affirmative vote of a majority of all
the directors remaining in office, or by shareholders at a special meeting
called for that purpose, in conformance with Section 1.2. At any such
shareholder meeting, each shareholder entitled to vote shall have the right to
multiply the number of votes he or she is entitled to cast by the number of
vacancies being filled and cast the product for a single candidate or distribute
the product among two or more candidates. A vacancy that will occur at a
specific later date (by reason of a resignation effective at a later date) may
be filled before the vacancy occurs but the new director may not take office
until the vacancy occurs.
Section 2.8. Telephone Meetings. Members of the Board of Directors may
participate in and hold meetings by means of conference telephone or similar
communications equipment such that all persons participating in the meeting can
hear each other. Such participation shall constitute presence in person but
shall not constitute attendance for the purposes of compensation pursuant to
Section 2.12.
Section 2.9. Notice. Written notice of any special meeting shall be
given to each director at least two days prior thereto when delivered personally
or by telegram or at least five days prior thereto when delivered by mail at the
address at which the director is most likely to be reached. Such notice shall be
deemed to be delivered when deposited in the mail so ad dressed, with postage
prepaid if mailed or when delivered to the telegraph company if sent by
telegram. Any director may waive notice of any meeting by a writing filed with
the Secretary. The attendance of a director at a meeting shall constitute a
waiver of notice of such meeting, except where a director attends a meeting for
the express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any meeting of the Board of Directors need be
specified in the notice or waiver of notice of such meeting.
Section 2.10. Action Without a Meeting. Any action required or
permitted to be taken by the Board of Directors at a meeting may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the directors.
Section 2.11. Manner of Acting. The act of a majority of the directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors, unless a greater number is required by law, the Articles of
Association or these Bylaws.
Section 2.12. Resignation. Any director may resign at any time by
sending a written notice of such resignation to the home office of the
Association addressed to the Chairperson of the Board or the President. Unless
otherwise specified, such resignation shall take effect upon receipt by the
Chairperson of the Board or the President. More than three consecutive absences
from regular meetings of the Board of Directors, unless excused by resolution of
the Board of Directors, shall automatically constitute a resignation, effective
when such resignation is accepted by the Board of Directors.
Section 2.13. Compensation. Directors, as such, may receive a stated
salary for their services. By resolution of the Board of Directors, a reasonable
fixed sum, and reasonable expenses of attendance, if any, may be allowed for
actual attendance at each regular or special
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meeting of the Board of Directors. Members of either standing or special
committees may be allowed such compensation for actual attendance at committee
meetings as the Board of Directors may determine.
Section 2.14. Presumption of Assent. A director of the Association who
is present at a meeting of the Board of Directors at which action on any
Association matter is taken shall be presumed to have assented to the action
taken unless his dissent or abstention shall be entered in the minutes of the
meeting or unless he shall file a written dissent to such action with the person
acting as the secretary of the meeting before the adjournment thereof or shall
forward such dissent by registered mail to the secretary of the Association
within five days after the date a copy of the minutes of the meeting is
received. Such right to dissent shall not apply to a director who voted in favor
of such action.
Section 2.15. Removal of Directors. At a meeting of shareholders called
expressly for that purpose, any director may be removed for cause by a vote of
the holders of a majority of the shares then entitled to vote at an election of
directors. If less than the entire board is to be removed, no one of the
directors may be removed if the votes cast against the removal would be
sufficient to elect a director if then cumulatively voted at an election of the
class of directors of which such director is a part. Whenever the holders of the
shares of any class are entitled to elect one or more directors by the
provisions of the Articles of Association, the provisions of this section shall
apply, in respect to the removal of a director or directors so elected, to the
vote of the holders of the outstanding shares of that class and not to the vote
of the outstanding shares as a whole.
ARTICLE III
Committees of the Board
Section 3.1. Appointment. The Board of Directors, by resolution adopted
by a majority of the full Board of Directors, may designate the Chief Executive
Officer and two or more of the other directors to constitute an executive
committee. The designation of any committee pursuant to this Article III and the
delegation of authority shall not operate to relieve the Board of Directors, or
any director, of any responsibility imposed by law or regulation.
Section 3.2. Authority. The executive committee, when the Board of
Directors is not in session, shall have and may exercise all of the authority of
the Board of Directors except to the extent, if any, that such authority shall
be limited by the resolution appointing the executive committee; and except also
that the executive committee shall not have the authority of the Board of
Directors with reference to: the declaration of dividends; the amendment of the
Articles of Association or Bylaws of the Association or recommending to the
shareholders a plan of merger, consolidation, or conversion; the sale, lease, or
other disposition of all or substantially all of the property and assets of the
Association otherwise than in the usual and regular course of its business; a
voluntary dissolution of the Association; a revocation of any of the foregoing;
or the approval of a transaction in which any member of the executive committee,
directly or indirectly, has any material beneficial interest.
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Section 3.3. Tenure. Subject to the provisions of Section 3.8, each
member of the executive committee shall hold office until the next regular
annual meeting of the Board of Directors following his or her designation and
until a successor is designated as a member of the executive committee.
Section 3.4. Meetings. Regular meetings of the executive committee may
be held without notice at such times and places as the executive committee may
fix from time to time by resolution. Special meetings of the executive committee
may be called by any member thereof upon not less than one day's notice stating
the place, date, and hour of the meeting, which notice may be written or oral.
Any member of the executive committee may waive notice of any meeting and no
notice of any meeting need be given to any member thereof who attends in person.
The notice of a meeting of the executive committee need not state the business
proposed to be transacted at the meeting.
Section 3.5. Quorum. A majority of the members of the executive
committee shall constitute a quorum for the transaction of business at any
meeting thereof, and action of the executive committee must be authorized by the
affirmative vote of a majority of the members present at a meeting at which a
quorum is present.
Section 3.6. Action Without a Meeting. Any action required or permitted
to be taken by the executive committee at a meeting may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the members of the executive committee.
Section 3.7. Vacancies. Any vacancy in the executive committee may be
filled by a resolution adopted by a majority of the full board of directors.
Section 3.8. Resignations and Removal. Any member of the executive
committee may be removed at any time with or without cause by resolution adopted
by a majority of the full board of directors. Any member of the executive
committee may resign from the executive committee at any time by giving written
notice to the President or Secretary of the Association. Unless otherwise
specified, such resignation shall take effect upon its receipt; the acceptance
of such resignation shall not be necessary to make it effective.
Section 3.9. Procedure. The executive committee shall elect a presiding
officer from its members and may fix its own rules of procedure which shall not
be inconsistent with these Bylaws. It shall keep regular minutes of its
proceedings and report the same to the Board of Directors for its information at
the meeting held next after the proceedings shall have occurred.
Section 3.10. Loan Committee. There shall be a loan committee composed
of four directors, appointed by the Board of Directors annually or more often.
The loan committee shall have power to discount and purchase bills, notes and
other evidences of debt, to buy and sell bills of exchange, to examine and
approve loans and discounts, to exercise authority regarding loans and
discounts, and to exercise, when the Board of Directors is not in session, all
other powers of the Board of Directors regarding loans that may lawfully be
delegated. The loan committee shall keep minutes of its meetings, and such
minutes shall be submitted at the next regular meeting of
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the Board of Directors at which a quorum is present, and any action taken by the
Board of Directors with respect thereto shall be entered in the minutes of the
Board of Directors.
Section 3.11. Investment Committee. There shall be an investment
committee composed of three directors, appointed by the Board of Directors
annually or more often. The investment committee shall have the power to insure
adherence to investment policy, to recommend amendments thereto, to purchase and
sell securities, to exercise authority regarding investments and to exercise,
when the Board of Directors is not in session, all other powers of the Board of
Directors regarding investment securities that may be lawfully delegated. The
investment committee shall keep minutes of its meetings, and such minutes shall
be submitted at the next regular meeting of the Board of Directors at which a
quorum is present, and any action taken by the Board of Directors with respect
thereto shall be entered in the minutes of the Board of Directors.
Section 3.12. Examining Committee. There shall be an Examining
Committee composed of not less than three directors, exclusive of any active
officers, appointed by the Board of Directors annually or more often, whose duty
it shall be to make an examination at least once during each calendar year and
within 15 months of the last such examination into the affairs of the
Association or cause suitable examinations to be made by auditors responsible
only to the Board of Directors and to report the result of such examination in
writing to the Board of Directors at the next regular meeting thereafter. Such
report shall state whether the Association is in a sound condition, whether
adequate internal controls and procedures are being maintained and shall
recommend to the Board of Directors such changes in the manner of conducting the
affairs of the Association as shall be deemed advisable.
Section 3.13. Other Committees. The Board of Directors may appoint,
from time to time, from its own members, other committees of one or more
persons, for such purposes and with such powers as the Board of Directors may
determine. A committee may not, however, (i) authorize distributions of assets
or dividends; (ii) approve action required to be approved by shareholders; (iii)
fill vacancies on the Board of Directors or any of its committees; (iv) amend
the Articles of Association; (v) adopt, amend or repeal these Bylaws; or (vi)
authorize or approve issuance or sale or contract for sale of shares, or
determine the designation and relative rights, preferences and limitations of a
class or series or shares.
ARTICLE IV
Officers and Employees
Section 4.1. Chairperson of the Board of Directors. The Board of
Directors shall appoint one of its members to be the Chairperson of the Board of
Directors to serve at its pleasure. Such person shall preside at all meetings of
the Board of Directors. The Chairperson of the Board of Directors shall
supervise the carrying out of the policies adopted or approved by the Board of
Directors; shall have general executive powers, as well as the specific powers
conferred by these
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Bylaws; and shall also have and may exercise such further powers and duties as
from time to time may be conferred upon, or assigned by the Board of Directors.
Section 4.2. President. The Board of Directors shall appoint one of its
members to be the President of the Association. In the absence of the
Chairperson, the President shall preside at any meeting of the Board of
Directors. The President shall have all general executive powers, and shall have
and may exercise any and all other powers and duties pertaining by law,
regulation, or practice, to the Office of President, or imposed by these Bylaws.
The President shall also have and may exercise such further powers and duties as
from time to time may be conferred, or assigned by the Board of Directors.
Section 4.3 Vice President. The Board of Directors may appoint one or
more Vice Presidents. Each Vice President shall have such powers and duties as
may be assigned by the Board of Directors. One Vice President shall be
designated by the Board of Directors, in the absence of the President, to
perform all the duties of the President.
Section 4.4. Secretary. The Board of Directors shall appoint a
Secretary, Cashier, or other designated officer who shall be Secretary of the
Board of Directors and of the Association, and shall keep accurate minutes of
all meetings. The Secretary shall attend to the giving of all notices required
by these Bylaws; shall be custodian of the corporate seal, records, documents
and papers of the Association; shall provide for the keeping of proper records
of all transactions of the Association; shall have and may exercise any and all
other powers and duties pertaining by law, regulation or practice, to the office
of Cashier, or imposed by these Bylaws; and shall also perform such other duties
as may be assigned from time to time, by the Board of Directors.
Section 4.5. Other Officers. The Board of Directors may appoint one or
more assistant vice presidents, one or more trust officers, one or more
assistant secretaries, one or more assistant cashiers, one or more managers and
assistant managers of branches and such other officers and attorneys in fact as
from time to time may appear to the Board of Directors to be required or
desirable to transact the business of the Association. Such officers shall
respectively exercise such powers and perform such duties as pertain to their
several offices, or as may be conferred upon, or assigned to, them by the Board
of Directors, the Chairperson of the Board of Directors or the President. The
Board of Directors may authorize an officer to appoint one or more officers or
assistant officers.
Section 4.6. Tenure of Office. The President and all other officers
shall hold office for the current year for which the Board of Directors was
elected, unless they shall resign, die, become disqualified, or be removed; and
any vacancy occurring in the office of President or other officer shall be
filled promptly by the Board of Directors for the unexpired portion of the term.
Election or appointment of an officer, employee or agent shall not of itself
create contractual rights. The Board of Directors may authorize the Association
to enter into an employment contract with any officer, but no such contract will
impair the right of the Board of Directors to remove any officer in accordance
with Section 4.8.
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Section 4.7. Resignation. An officer may resign at any time by
delivering notice to the Association. A resignation is effective when the notice
is given unless the notice specifies a later effective date.
Section 4.8. Removal. Any officer may be removed by the Board of
Directors whenever in its judgment the best interests of the Association will be
served thereby, but such removal, other than for cause, shall be without
prejudice to the contractual rights, if any, of the person so removed.
Section 4.9. Remuneration. The remuneration of the officers shall be
fixed from time to time by the Board of Directors.
ARTICLE V
Stock and Stock Certificates
Section 5.1. Transfers. Shares of stock shall be transferable on the
books of the Association, and a transfer book shall be kept in which all
transfers of stock shall be recorded. Authority for such transfer shall be given
only by the holder of record or by his legal representative, who shall furnish
proper evidence of such authority, or by his attorney authorized by a duly
executed power of attorney and filed with the Association. Such transfer shall
be made only on surrender for cancellation of the certificate for such shares.
The person in whose name shares of capital stock stand on the books of the
Association shall be deemed by the Association to be the owner for all purposes.
The Board of Directors may impose conditions upon the transfer of the stock
reasonably calculated to simplify the work of the Association with respect to
stock transfers, voting at shareholder meetings, and related matters and to
protect it against fraudulent transfers. Every person becoming a shareholder by
such transfer shall in proportion to his shares, succeed to all rights of the
prior holder of such shares. Each certificate for shares of capital stock shall
be consecutively numbered or otherwise identified. The name and address of the
person to whom the shares are issued, with the number of shares and date of
issue, shall be entered on the stock transfer books of the Association. All
certificates surrendered to the Association for transfer shall be cancelled and
no new certificate shall be issued until the former certificate for a like
number of shares has been surrendered and cancelled, except that in the case of
a lost or destroyed certificate, a new certificate may be issued upon such terms
and indemnity to the savings bank as the Board of Directors may prescribe.
Section 5.2. Stock Certificates. Certificates representing shares of
capital stock of the Association shall be in such form as shall be determined by
the Board of Directors. Certificates of stock shall bear the signature of the
President (which may be engraved, printed or impressed), and shall be signed
manually or by facsimile process by the Secretary, Assistant Secretary, Cashier,
Assistant Cashier, or any other officer appointed by the Board of Directors for
that purpose, to be known as an authorized officer, and the seal of the
Association shall be engraved thereon. Each certificate shall recite on its face
that the stock represented thereby is transferable only upon the books of the
Association properly endorsed.
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The Board of Directors may adopt or utilize procedures for replacing
lost, stolen, or destroyed stock certificates as permitted by law.
The Association may establish a procedure through which the beneficial
owner of shares that are registered in the name of a nominee may be recognized
by the Association as the shareholder. The procedure may set forth: (i) the
types of nominees to which it applies; (ii) the rights or privileges that the
Association recognizes in a beneficial owner; (iii) how the nominee may request
the Association to recognize the beneficial owner as the shareholder; (iv) the
information that must be provided when the procedure is selected; (v) the period
over which the Association will continue to recognize the beneficial owner as
the shareholder; and (vi) other aspects of the rights and duties created.
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ARTICLE VI
Corporate Seal
The President, the Cashier, the Secretary or any Assistant Cashier or Assistant
Secretary, or other officer thereunto designated by the Board of Directors,
shall have authority to affix the corporate seal to any document requiring such
seal, and to attest the same. Such seal shall be substantially in the following
form:
ARTICLE VII
Miscellaneous Provisions
Section 7.1. Fiscal Year. The fiscal year of the Association shall be
on the 31st of October of each year.
Section 7.2. Execution of Instruments. All agreements, indentures,
mortgages, deeds, conveyances, transfers, certificates, declarations, receipts,
discharges, releases, satisfactions, settlements, petitions, schedules,
accounts, affidavits, bonds, undertakings, proxies, checks, drafts and other
instruments or documents may be signed, executed, acknowledged, verified,
delivered or accepted on behalf of the Association by the Chairperson of the
Board of the Directors, or the President, or any Vice President, or the
Secretary, or the Cashier, or, if in connection with the exercise of fiduciary
powers of the Association, by any of those officers or by any trust officer. Any
such instruments may also be executed, acknowledged, verified, delivered or
accepted on behalf of the Association in such other manner and by such other
officers as the Board of Directors may from time to time direct. The provisions
of this Section 8.2 are supplementary to any other provision of these Bylaws.
Section 7.3. Records. The Articles of Association, the Bylaws and the
proceedings of all meetings of the shareholders, the Board of Directors, and
standing committees of the Board of Directors, shall be recorded in appropriate
minute books provided for that purpose. The minutes of each meeting shall be
signed by the Secretary, Cashier or other officer appointed to act as secretary
of the meeting.
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ARTICLE VIII
Bylaws
Section 8.1. Inspection. A copy of the Bylaws, with all amendments,
shall at all times be kept in a convenient place at the main office of the
Association, and shall be open for inspection to all shareholders during banking
hours.
Section 8.2. Amendments. The Bylaws may be amended, altered or
repealed, at any regular meeting of the Board of Directors, by a vote of a
majority of the total number of the directors. The Association's shareholders
may amend or repeal the Bylaws even though the Bylaws may be amended or repealed
by its Board of Directors.
I, Jamie McReynolds certify that: (1) I am the duly constituted
secretary or cashier of First Robinson Federal Savings Bank, N.A. and Secretary
of its Board of Directors, and as such officer am the official custodian of its
records; (2) the foregoing bylaws are the bylaws of the Association, and all of
them are now lawfully in force and effect.
I have hereunto affixed my official signature and the seal of the
Association, in the City of Robinson, on this day of ____________, 1997.
-------------------------------
Jamie McReynolds
Secretary
15
EXHIBIT 4
FORM OF STOCK CERTIFICATE OF THE HOLDING COMPANY
<PAGE>
NUMBER ______________
COMMON STOCK
CUSIP No.
FIRST ROBINSON FINANCIAL CORPORATION
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
This Certifies that
is the owner of
FULLY PAID AND NONASSESSABLE SHARES OF COMMON STOCK, PAR VALUE $.01 PER
SHARE OF First Robinson Financial Corporation (the "Corporation"), a Delaware
corporation. 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. This certificate is not valid until
countersigned and registered by the Corporation's transfer agent and registrar.
THIS SECURITY IS NOT A DEPOSIT OR ACCOUNT AND IS NOT FEDERALLY INSURED OR
GUARANTEED.
IN WITNESS WHEREOF, the Corporation has caused this certificate to be
executed by the facsimile signatures of its duly authorized officers and has
caused a facsimile of its corporate seal to be hereunto affixed.
DATED__________________
________________________________ _______________________________
Jamie McReynolds, Secretary Rick L. Catt
President
[Seal]
Countersigned and Registered:
[ Name ]
________________________________
Transfer Agent and Registrar
<PAGE>
FIRST ROBINSON FINANCIAL CORPORATION
The shares represented by this certificate are issued subject to all
the provisions of the Certificate of Incorporation and Bylaws of First Robinson
Financial Corporation (the "Corporation") as from time to time amended (copies
of which are on file at the principal executive offices of the Corporation).
The Corporation's Certificate of Incorporation provides that no
"person" (as defined in the Certificate of Incorporation) who "beneficially
owns" (as defined in the Certificate of Incorporation) in excess of 10% of the
outstanding shares of the Corporation shall be entitled to vote any shares held
in excess of such limit. This provision of the Certificate of Incorporation
shall not apply to an acquisition of securities of the Corporation by an
employee stock purchase plan or other employee benefit plan of the Corporation
or any of its subsidiaries.
The Corporation's Certificate of Incorporation also includes a
provision the general effect of which is to require the affirmative vote of the
holders of 80% of the outstanding voting shares of the Corporation to approve
certain "business combinations" (as defined in the Certificate of Incorporation)
between the Corporation and a stockholder owning in excess of 10% of the
outstanding shares of the Corporation. However, only the affirmative vote of a
majority of the outstanding shares or such vote as is otherwise required by law
(rather than the 80% voting requirement) is applicable to the particular
transaction if it is approved by a majority of the "disinterested directors" (as
defined in the Certificate of Incorporation) or, alternatively, the transaction
satisfies certain minimum price and procedural requirements. The Corporation's
Certificate of Incorporation also contains a provision which requires the
affirmative vote of holders of at least 80% of the outstanding voting shares of
the Corporation which are not beneficially owned by the "interested person" (as
defined in the Certificate of Incorporation) to approve the direct or indirect
purchase or other acquisition by the Corporation of any "equity security" (as
defined in the Certificate of Incorporation) from such interested person.
The Corporation will furnish to any stockholder upon request and
without charge a full statement of the powers, designations, preferences and
relative participating, optional or other special rights of each authorized
class of stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights, to the extent that the same have
been fixed, and of the authority of the board of directors to designate the same
with respect to other series. Such request may be made to the Corporation or to
its Transfer Agent and Registrar.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT______ Custodian________
TEN ENT - as tenants by the entirety (Cust) (Minor)
JT TEN - as joint tenants with right Under Uniform Gift to Minors Act-________
of survivorship and not as (State)
tenants in common. UNIF TRANS MIN ACT_____ Custodian________
(Cust) (Minor)
Under Uniform Transfers to
Minors Act-________
(State)
Additional abbreviations may also be used though not in the above list.
<PAGE>
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 ZIP CODE, OF ASSIGNEE)
________________________________________________________________________________
__________________________________________________________________________Shares
of Common Stock represented by the within certificate, and do hereby irrevocably
constitute and appoint_________________________________________________ Attorney
to transfer the said shares on the books of the within named Corporation with
full power of substitution in the premises.
Dated__________________________
_______________________________
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.
EXHIBIT 5
OPINION OF SILVER, FREEDMAN & TAFF, L.L.P.
WITH RESPECT TO LEGALITY OF STOCK
<PAGE>
[SILVER, FREEDMAN & TAFF LETTERHEAD]
March 19, 1997
The Board of Directors
First Robinson Financial Corporation
501 East Main Street
Robinson, Illinois 62454
Re: Registration Statement
Under the Securities Act of 1933
Gentlemen:
This opinion is rendered in connection with the Registration Statement
to be filed on Form S-1 with the Securities and Exchange Commission under the
Securities Act of 1933 relating to the 859,625 shares of Common Stock of First
Robinson Financial Corporation (the "Company"), par value $.01 per share, to be
issued. As counsel, we have reviewed the Certificate of Incorporation of the
Company and such other documents as we have deemed appropriate for the purpose
of this opinion. We are rendering this opinion as of the time the Registration
Statement referred to above becomes effective.
Based on the foregoing, we are of the opinion that the shares of Common
Stock of the Company covered by the aforesaid Registration Statement will, when
sold, be validly issued, fully paid and non-assessable shares of Common Stock of
the Company.
Very truly yours,
/s/ Silver, Freedman & Taff, L.L.P
SILVER, FREEDMAN & TAFF, L.L.P.
EXHIBIT 8.2
[LARSSON, WOODYARD & HENSON, LLP]
Board of Directors
First Robinson Savings & Loan, F. A.
501 East Main St.
Robinson, Illinois 62454
RE: Illinois Tax Opinion relating to the conversion of First Robinson
Savings & Loan, F. A. from a federally-chartered mutual savings
association to a federally-chartered stock savings association to a
national bank, under Chapter 35 of the Illinois Compiled Statements.
In accordance with you request, we render our opinion relating to the Illinois
income tax consequences of the proposed conversion of First Robinson Savings &
Loan, F.A. (Mutual") from a federally-chartered mutual savings association to a
federally-chartered stock savings association ("Stock Association") to a
national bank ("Bank"), pursuant to the provisions of Chapter 35 of the Illinois
Compiled Statutes ("35 ILCS").
Statement of Facts
The facts and circumstances surrounding the proposed charter conversion are
quite detailed and are described at length in both the Plan of Conversion and
the federal income tax opinion provided by Silver, Freedman and Taff. However, a
brief summary of the proposed plan of conversion is as follows:
Statement of Facts
The facts and circumstances surrounding the proposed charter conversion are
quite detailed and are described at length in both the Plan of Conversion and
the federal income tax opinion provided by Silver, Freedman and Taff. However, a
brief summary of the proposed plan of conversion is as follows:
Mutual is a federally chartered mutual savings association. As a mutual savings
association, Mutual has no authorized stock. Mutual wishes to amend its charter
to permit it to continue operations in the form of a federally chartered stock
savings bank ("Stock Association") and to a national bank ("Bank"). The fair
market value of Stock Association deposit accounts received by Mutual deposit
account holders will be equal to the fair market value of Mutual deposit
accounts surrendered as a result of the conversion process. In connection with
the proposed charter conversion, Stock Association will become a wholly-owned
subsidiary of First Robinson Financial Corp (Holding Company), a newly organized
Delaware corporation.
<PAGE>
Board of Directors
First Robinson Savings & Loan, F. A.
Page 2
Opinion
Based solely upon the facts as described in the Plan of Conversion, a review of
the federal income tax opinion as provided by the law firm of Silver, Freedman
and Taff, as well as analysis and examination of applicable with the Plan of
Conversion:
1. The conversion of the Mutual from a federal mutual savings bank to a
federal stock savings bank will not result in taxable gain or loss to
either the Mutual, Stock Association, or the Bank. [35 ILCS 5/203(e)(l)
and [35 IL ILCS 5/203(b)(2)].
2. The Bank will recognize no gain or loss upon the receipt of money and
other property, if any, in exchange for shares of its common stock. [35
ILCS 5/203(e)(1)] and {35 ILCS 5/203(b)(2).
3. No gain or loss will be recognized by the Holding Company upon receipt
of money for the conversion stock. [35 ILCS 2/203(b)(2)].
4. The creation of the liquidation account on the records of the Bank will
have no effect on the Mutual or the Bank's taxable income. [35 ILCS
5/203(e)(1) and [35 ILCS 5/203(b)(2)].
5. There will be no gain or loss recognized to Mutual deposit account
holders on the receipt of Bank deposit accounts, or upon the creation
of liquidation accounts in the Bank. [35 ILCS 5/203(e)(1)] and [35 ILCS
5/203(b)(2)].
6. There will be no gain or loss recognized to any taxpayer receiving
Holding Company stock subscription rights. [35 ILCS 5/203(e)(1)] and
[35 ILCS 5/203(b)(2)].
Our opinion is based upon legal authorities currently in effect, which
authorities are subject to modification or challenge at any time and perhaps
with retroactive effect and subject to the assumptions detailed in the federal
tax opinion. Further, no opinion is expressed as to the tax treatment of the
transaction under the provisions of any of the other sections of the Illinois
Code and Income Tax Regulations which may also be applicable thereto, or to the
tax treatment of any conditions existing at the time of, or effects resulting
from, the transaction which are not specifically covered by the opinions set
forth above.
Sincerely,
/s/ Larsson, Woodyard & Henson, LLP
Larsson, Woodyard & Henson, LLP
Certified Public Accountants
March 4, 1997
EXHIBIT 10.1
December 11, 1996
Board of Directors
First Robinson Savings and Loan Association, FA
501 E Main Street
Robinson, Illinois 62454
Dear Directors:
This letter sets forth the agreement between First Robinson Savings and
Loan Association, FA ("First Robinson"), Robinson, Illinois, and Ferguson & Co.,
LLP, ("F&C"), Irving, Texas, under the terms of which First Robinson has engaged
F&C, in connection with its conversion from mutual to stock form, to (1)
determine the pro forma market value of the shares of common stock to be issued
and sold by First Robinson or its holding company; and (2) assist First Robinson
in preparing a business plan to be filed with the application for approval to
convert to stock.
F&C agrees to deliver the written valuation and business plan to First
Robinson at the above address on or before a mutually agreed upon date. Further,
F&C agrees to perform such other services as are necessary or required in
connection with comments from the applicable regulatory authorities relating to
the business plan and appraisal and the preparation of appraisal updates as
requested by First Robinson or its counsel. It is understood that the services
of F&C under this agreement shall be limited as herein described.
F&C's fee for the business plan and initial appraisal valuation report
and any required updates shall be $25,000. In addition, First Robinson shall
reimburse F&C for all out-of-pocket expenses (which we estimate to be
approximately $5,000). Payment under this agreement shall be made as follows:
Upon execution of this engagement letter--$7,500.
Upon delivery of the business plan--$7,500.
Upon delivery of the completed appraisal report--$10,000.
Out-of-pocket expenses are to be paid monthly.
If, during the course of First Robinson's conversion, unforeseen events
occur so as to change materially the nature or the work content of the services
described in this contract, the terms of the contract shall be subject to
renegotiation. Such unforeseen events shall include, but not be limited to,
major changes in the conversion regulations, appraisal guidelines or processing
procedures as they relate to conversion appraisals, major changes in First
Robinson's management or operating policies, execution of a merger agreement
with another institution prior to completion of conversion, and excessive delays
or suspension of processing of conversions by the regulatory authorities such
that completion of First Robinson's conversion requires the preparation by F&C
of a new appraisal report or business plan, excluding appraisal updates during
the course of the engagement.
To induce F&C to provide the services described above, First Robinson
hereby agrees as follows:
First Robinson shall supply to F&C such information with
respect to its business and financial condition as F&C
reasonably may request in order to make the aforesaid
valuation. Such information made available to F&C shall
include, but not be limited to, annual financial statements,
periodic regulatory filings, material agreements, debt
instruments and corporate books and records.
First Robinson hereby represents and warrants, to the best of
its knowledge, that any information provided to F&C does not
and will not, at any time relevant hereto, contain any
misstatement or untrue statement of a material fact or omit
any and all material facts required to be stated therein or
necessary to make the statements therein not false or
misleading in light of the circumstances under which they were
made.
<PAGE>
First Robinson shall indemnify and hold harmless F&C and any
employees of F&C who act for or on behalf of F&C in connection
with the services called for under this agreement, from and
against any and all loss, cost, damage, claim, liability or
expense of any kind, including reasonable attorneys fees and
other expenses incurred in investigating, preparing to defend
and defending any claim or claims (specifically including, but
not limited to, claims under federal and state securities
laws) arising out of any misstatement or untrue statement of a
material fact contained in the information supplied by First
Robinson to F&C or by an omission to state a material fact in
the information so provided which is required to be stated
therein in order to make the statement therein not false or
misleading.
F&C shall not be entitled to indemnification pursuant to
Paragraph 3 above with regard to any claim arising where, with
regard to the basis for such claim, F&C had knowledge that a
statement of a fact material to the evaluation and contained
in the information supplied by First Robinson was untrue or
had knowledge that a material fact was omitted from the
information so provided and that such material fact was
necessary in order to make the statement made to F&C not false
or misleading.
F&C additionally shall not be entitled to indemnification
pursuant to Paragraph 3 above notwithstanding its lack of
actual knowledge of an intentional misstatement or omission of
a material fact in the information provided if F&C is
determined to have been negligent or to have failed to
exercise due diligence in the preparation of its valuation.
First Robinson and F&C are not affiliated, and neither First Robinson
nor F&C has an economic interest in, or held in common with, the other and has
not derived a significant portion of its gross revenue, receipts or net income
for any period from transactions with the other.
In order for F&C to consider this proposal binding, please acknowledge
your consent to the foregoing by executing the enclosed copies of this letter
and returning one copy to us, together with a check payable to Ferguson & Co. in
the amount of $7,500. The extra copy of this letter is for your conversion
counsel.
Yours very truly,
/s/ Robin L. Fussell
--------------------
Robin L. Fussell
Principal
Agreed to ($7,500 check enclosed):
First Robinson Savings and Loan Association, FA
Robinson, Illinois
By: /s/ Rick L. Catt
Date: December 16, 1996
EXHIBIT 10.2
FORM OF
EMPLOYEE STOCK OWNERSHIP PLAN
<PAGE>
FIRST ROBINSON FINANCIAL CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
Effective as of November 1, 1996
<PAGE>
FIRST ROBINSON FINANCIAL CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
TABLE OF CONTENTS
Page
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PREAMBLE 1
ARTICLE I DEFINITION OF TERMS AND CONSTRUCTION
1.1 Definitions
(a) "Act" 2
(b) "Administrator" 2
(c) "Annual Additions" 2
(d) "Authorized Leave of Absence" 2
(e) "Beneficiary" 2
(f) "Board of Directors" 2
(g) "Break" 3
(h) "Code" 3
(i) "Compensation" 3
(j) "Date of Hire" 3
(k) "Disability" 3
(l) "Disability Retirement Date" 3
(m) "Early Retirement Date" 4
(n) "Effective Date" 4
(o) "Eligibility Period" 4
(p) "Employee" 4
(q) "Employer" 4
(r) "Employer Securities" 4
(s) "Entry Date" 4
(t) "Exempt Loan" 4
(u) "Former Participant" 4
(v) "Fund" 4
(w) "Hour of Service" 5
(x) "Investment Adjustments" 5
(y) "Limitation Year" 5
(z) "Normal Retirement Date" 5
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(aa) "Participant" 5
(bb) "Plan" 6
(cc) "Plan Year" 6
(dd) "Qualified Domestic Relations Order" 6
(ee) "Retirement" 6
(ff) "Service" 6
(gg) "Sponsor" 6
(hh) "Trust Agreement" 6
(ii) "Trustee" 7
(jj) "Valuation Date" 7
(kk) "Year of Service" 7
1.2 Plurals and Gender 7
1.3 Incorporation of Trust Agreement 7
1.4 Headings 8
1.5 Severability 8
1.6 References to Governmental Regulations 8
ARTICLE II PARTICIPATION
2.1 Commencement of Participation 9
2.2 Termination of Participation 9
2.3 Resumption of Participation 9
2.4 Determination of Eligibility 10
ARTICLE III CREDITED SERVICE
3.1 Service Counted for Eligibility Purposes 11
3.2 Service Counted for Vesting Purposes 11
3.3 Credit for Pre-Break Service 11
3.4 Service Credit During Authorized Leaves 11
3.5 Service Credit During Maternity or
Paternity Leave 12
3.6 Ineligible Employees 12
ARTICLE IV CONTRIBUTIONS
4.1 Employee Stock Ownership Contributions 13
4.2 Time and Manner of Employee Stock Ownership
Contributions 13
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<PAGE>
Page
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4.3 Records of Contributions 14
4.4 Erroneous Contributions 14
ARTICLE V ACCOUNTS, ALLOCATIONS AND INVESTMENTS
5.1 Establishment of Separate Participant
Accounts 16
5.2 Establishment of Suspense Account 16
5.3 Allocation of Earnings, Losses and Expenses 17
5.4 Allocation of Forfeitures 17
5.5 Allocation of Annual Employee Stock
Ownership Contributions 17
5.6 Limitation on Annual Additions 18
5.7 Erroneous Allocations 21
5.8 Value of Participant's Interest in Fund 21
5.9 Investment of Account Balances 21
ARTICLE VI RETIREMENT, DEATH AND DESIGNATION
OF BENEFICIARY
6.1 Normal Retirement 22
6.2 Early Retirement 22
6.3 Disability Retirement 22
6.4 Death Benefits 22
6.5 Designation of Death Beneficiary and
Manner of Payment 23
ARTICLE VII VESTING AND FORFEITURES
7.1 Vesting on Death, Disability, Normal Retirement 24
7.2 Vesting on Termination of Participation 24
7.3 Disposition of Forfeitures 24
ARTICLE VIII EMPLOYEE STOCK OWNERSHIP RULES
8.1 Right to Demand Employer Securities 26
8.2 Voting Rights 26
8.3 Nondiscrimination in Employee Stock Owner-
ship Contributions 26
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<PAGE>
Page
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8.4 Dividends 27
8.5 Exempt Loans 27
8.6 Exempt Loan Payments 29
8.7 Put Option 30
8.8 Diversification Requirements 30
8.9 Independent Appraiser 31
ARTICLE IX PAYMENTS AND DISTRIBUTIONS
9.1 Payments on Termination of Service
- In General 32
9.2 Commencement of Payments 32
9.3 Mandatory Commencement of Benefits 33
9.4 Required Beginning Dates 35
9.5 Form of Payment 36
9.6 Payments Upon Termination of Plan 36
9.7 Distribution Pursuant to Qualified
Domestic Relations Orders 36
9.8 Cash-Out Distributions 37
9.9 ESOP Distribution Rules 37
9.10 Withholding 38
9.11 Waiver of 30-day Notice 38
ARTICLE X PROVISIONS RELATING TO TOP-HEAVY PLANS
10.1 Top-Heavy Rules to Control 40
10.2 Top-Heavy Plan Definitions 40
10.3 Calculation of Accrued Benefits 42
10.4 Determination of Top-Heavy Status 43
10.5 Determination of Super Top-Heavy Status 43
10.6 Minimum Contribution 44
10.7 Vesting 45
10.8 Maximum Benefit Limitation 45
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<PAGE>
Page
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ARTICLE XI ADMINISTRATION
11.1 Appointment of Administrator 46
11.2 Resignation or Removal of Administrator 46
11.3 Appointment of Successors: Terms of
Office, Etc. 46
11.4 Powers and Duties of Administrator 46
11.5 Action by Administrator 48
11.6 Participation by Administrators 48
11.7 Agents 48
11.8 Allocation of Duties 48
11.9 Delegation of Duties 48
11.10 Administrator's Action Conclusive 49
11.11 Compensation and Expenses of
Administrator 49
11.12 Records and Reports 49
11.13 Reports of Fund Open to Participants 49
11.14 Named Fiduciary 49
11.15 Information from Employer 50
11.16 Reservation of Rights by Employer 50
11.17 Liability and Indemnification 50
11.18 Service as Trustee and Administrator 50
ARTICLE XII CLAIMS PROCEDURE
12.1 Notice of Denial 51
12.2 Right to Reconsideration 51
12.3 Review of Documents 51
12.4 Decision by Administrator 51
12.5 Notice by Administrator 51
ARTICLE XIII AMENDMENTS, TERMINATION AND MERGER
13.1 Amendments 52
13.2 Consolidation, Merger or Other
Transactions of Employer 52
13.3 Consolidation or Merger of Trust 53
13.4 Bankruptcy or Insolvency of Employer 53
13.5 Voluntary Termination 54
13.6 Partial Termination of Plan or Permanent
Discontinuance of Contributions 54
-v-
<PAGE>
Page
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ARTICLE XIV MISCELLANEOUS
14.1 No Diversion of Funds 55
14.2 Liability Limited 55
14.3 Incapacity 55
14.4 Spendthrift Clause 55
14.5 Benefits Limited to Fund 56
14.6 Cooperation of Parties 56
14.7 Payments Due Missing Persons 56
14.8 Governing Law 56
14.9 Nonguarantee of Employment 57
14.10 Counsel 57
-vi-
<PAGE>
FIRST ROBINSON FINANCIAL CORPORATION
EMPLOYEE STOCK OWNERSHIP PLAN
PREAMBLE
Effective as of November 1, 1996, First Robinson Financial Corporation,
a Delaware corporation, (the "Sponsor"), has adopted the First Robinson
Financial Corporation Employee Stock Ownership Plan in order to enable
Participants to share in the growth and prosperity of the Sponsor and its wholly
owned subsidiary, First Robinson Savings Bank, National Association (previously
known as First Robinson Savings and Loan, F.A.), and to provide Participants
with an opportunity to accumulate capital for their future economic security by
accumulating funds to provide retirement, death and disability benefits. The
Plan is a stock bonus plan designed to meet the re quirements of an employee
stock ownership plan as described at Section 4975(e)(7) of the Code and Section
407(d)(6) of ERISA. The primary purpose of the employee stock ownership plan is
to invest in employer securities. The Sponsor intends that the Plan will qualify
under Sections 401(a) and 501(a) of the Code and will comply with the provisions
of ERISA. The Plan has been drafted to comply with the Tax Reform Act of 1986,
the Omnibus Budget Reconciliation Act of 1986, the Omnibus Budget Reconciliation
Act of 1987, the Technical and Miscellaneous Revenue Act of 1988, the Revenue
Reconciliation Act of 1989, the Omnibus Budget Reconciliation Act of 1993, and
the Small Business Job Protection Act of 1996.
The terms of this Plan shall apply only with respect to Employees of
the Employer on and after November 1, 1996.
-1-
<PAGE>
ARTICLE I
DEFINITION OF TERMS AND CONSTRUCTION
1.1 Definitions.
Unless a different meaning is plainly implied by the context, the
following terms as used in this Plan shall have the following meanings:
(a) "Act" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, or any successor statute.
(b) "Administrator" shall mean the administrative committee provided
for in Article XI.
(c) "Annual Additions" shall mean, with respect to each Participant,
the sum of those amounts allocated to the Participant's accounts under this Plan
and under any other qualified de fined contribution plan to which the Employer
contributes for any Limitation Year, consisting of the following:
(1) Employer contributions;
(2) Forfeitures; and
(3) Voluntary contributions (if any).
(d) "Authorized Leave of Absence" shall mean an absence from Service
with respect to which the Employee may or may not be entitled to Compensation
and which meets any one of the following requirements:
(1) Service in any of the armed forces of the United States
for up to 36 months, provided that the Employee resumes Service within
90 days after discharge, or such longer period of time during which
such Employee's employment rights are protected by law; or
(2) Any other absence or leave expressly approved and granted
by the Employer which does not exceed 24 months, provided that the
Employee resumes Service at or before the end of such approved leave
period. In approving such leaves of absence, the Employer shall treat
all Employees on a uniform and nondiscriminatory basis.
(e) "Beneficiary" shall mean such persons as may be designated by the
Participant to receive benefits after the death of the Participant, or such
persons designated by the Administrator to receive benefits after the death of
the Participant, all as provided in Section 6.5.
(f) "Board of Directors" shall mean the Board of Directors of the
Sponsor.
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<PAGE>
(g) "Break" shall mean a Plan Year during which an Employee fails to
complete more than 500 Hours of Service.
(h) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time, or any successor statute.
(i) "Compensation" shall mean the amount of remuneration paid to an
Employee by the Employer, after the date on which the Employee becomes a
Participant, for services rendered to the Employer during a Plan Year, including
base salary, bonuses, overtime and commissions, and any amount of compensation
contributed pursuant to a salary reduction election under Code Section 401(k)
and any amount of compensation contributed to a cafeteria plan described at
Section 125 of the Code, but excluding amounts paid by the Employer or accrued
with respect to this Plan or any other qualified or non-qualified unfunded plan
of deferred compensation or other employee welfare plan to which the Employer
contributes, payments for group insurance, medical benefits, reimbursement for
expenses, and other forms of extraordinary pay, and excluding amounts accrued
for a prior year.
Notwithstanding the foregoing, for purposes of complying with Code Section 415,
a Participant's contributions to the 401(k) Plan and cafeteria plan shall not be
included in the Participant's compensation. Notwithstanding anything herein to
the contrary, the annual Compensation of each Participant taken into account
under the Plan for any Plan Year shall not exceed $150,000, as adjusted from
time to time in accordance with Section 415(d) of the Code. In determining the
compensation of a Participant for purposes of this limitation, the rules of
section 414(q)(6) of the Code shall apply, except in applying such rules, the
term "family" shall include only the spouse of the Participant and any lineal
descendants of the Participant who have not attained age 19 before the close of
the year. If, as a result of such rules, the adjusted $150,000 limitation is
exceeded, then (except for purposes of determining the portion of compensation
up to the integration level), the limitation shall be prorated among the
affected individuals in proportion to each such individual's compensation as
determined under this section prior to the application of this limitation.
(j) "Date of Hire" shall mean the date on which a person shall perform
his first Hour of Service. Notwithstanding the foregoing, in the event a person
incurs one or more consecutive Breaks after his initial Date of Hire which
results in the forfeiture of his pre-Break Service pursuant to Section 3.3, his
"Date of Hire" shall thereafter be the date on which he completes his first Hour
of Service after such Break or Breaks.
(k) "Disability" shall mean a physical or mental impairment which
prohibits a Participant from engaging in any occupation for wages or profit and
which has caused the Social Security Administration to classify the individual
as "disabled" for purposes of Social Security.
(l) "Disability Retirement Date" shall mean the first day of the month
after which a Participant incurs a Disability.
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<PAGE>
(m) "Early Retirement Date" shall mean the first day of the month
coincident with or next following the date on which a Participant attains age 55
and completes 5 Years of Service.
(n) "Effective Date" shall mean November 1, 1996.
(o) "Eligibility Period" shall mean the period of 12 consecutive months
commencing on an Employee's Date of Hire. Succeeding eligibility computation
periods after the initial eligibility computation period shall be based on Plan
Years which include the first anniversary of an Employee's Date of Hire.
(p) "Employee" shall mean any person employed by the Employer,
including officers but excluding directors in their capacity as such; provided,
however, that the term "Employee" shall not include leased employees, employees
regularly employed outside the employer's own offices in connection with the
operation and maintenance of buildings or other properties acquired through
foreclosure or deed, commissioned loan officers and any employee included in a
unit of employees covered by a collective-bargaining agreement with the Employer
that does not expressly provide for participation of such employees in this
Plan, where there has been good-faith bargaining between the Employer and
employees' representatives on the subject of retirement benefits.
(q) "Employer" shall mean First Robinson Financial Corporation, a
Delaware corporation, and its wholly owned subsidiary, First Robinson Bank for
Savings, or any successors to the aforesaid corporations by merger,
consolidation or otherwise, which may agree to continue this Plan, or any
affiliated or subsidiary corporation or business organization of any Employer
which, with the consent of the Sponsor, shall agree to become a party to this
Plan.
(r) "Employer Securities" shall mean the common stock issued by First
Robinson Financial Corporation, a Delaware corporation.
(s) "Entry Date" shall mean each November 1 and May 1, so long as this
Plan shall remain in effect.
(t) "Exempt Loan" shall mean a loan described at Section 4975(d)(1) of
the Code to the Trustee to purchase Employer Securities for the Plan, made or
guaranteed by a disqualified person, as defined at Section 4975(e)(2) of the
Code, including, but not limited to, a direct loan of cash, a purchase money
transaction, an assumption of an obligation of the Trustee, an unsecured
guarantee or the use of assets of such disqualified person as collateral for
such a loan.
(u) "Former Participant" shall mean any previous Participant whose
participation has terminated but who has a vested interest in the Plan which has
not been distributed in full.
(v) "Fund" shall mean the Fund maintained by the Trustee pursuant to
the Trust Agreement in order to provide for the payment of the benefits
specified in the Plan.
-4-
<PAGE>
(w) "Hour of Service" shall mean each hour for which an Employee is
directly or indirectly paid or entitled to payment by an Employer for the
performance of duties or for reasons other than the performance of duties (such
as vacation time, holidays, sickness, disability, paid layoffs, jury duty and
similar periods of paid nonworking time). To the extent not otherwise in cluded,
Hours of Service shall also include each hour for which back pay, irrespective
of mitigation of damages, is either awarded or agreed to by the Employer. Hours
of working time shall be credited on the basis of actual hours worked, even
though compensated at a premium rate for overtime or other reasons. In computing
and crediting Hours of Service for an Employee under this Plan, the rules set
forth in Sections 2530.200b-2(b) and (c) of the Department of Labor Regulations
shall apply, said Sections being herein incorporated by reference. Hours of
Service shall be credited to the Plan Year or other relevant period during which
the services were performed or the nonworking time occurred, regardless of the
time when Compensation therefor may be paid. Any Employee for whom no hourly
employment records are kept by the Employer shall be credited with 45 Hours of
Service for each calendar week in which he would have been credited with a least
one Hour or Service under the foregoing provisions, if hourly records were
available. Effective November 1, 1985, for absences commencing on or after that
date, solely for purposes of determining whether a Break for participation and
vesting purposes has occurred in an Eligibility Period or Plan Year, an
individual who is absent from work for maternity or paternity reasons shall
receive credit for the Hours of Service which would otherwise have been credited
to such individual but for such absence, or in any case in which such hours
cannot be determined, 8 Hours of Service per day of such absence. For purposes
of this Section 1.1(w), an absence from work for maternity or paternity reasons
means an absence (1) by reason of the pregnancy of the individual, (2) by reason
of a birth of a child of the individual, (3) by reason of the placement of a
child with the individual in connection with the adoption of such child by such
individual, or (4) for purposes of caring for such child for a period beginning
immediately follow ing such birth or placement. The Hours of Service credited
under this provision shall be credited (1) in the computation period in which
the absence begins if the crediting is necessary to prevent a Break in that
period, or (2) in all other cases, in the following computation period.
(x) "Investment Adjustments" shall mean the increases and/or decreases
in the value of a Participant's accounts attributable to earnings, gains, losses
and expenses of the Fund, as set forth in Section 5.3.
(y) "Limitation Year" shall mean the Plan Year.
(z) "Normal Retirement Date" shall mean the first day of the month
coincident with or during which a Participant attains age 65 and completes the
fifth anniversary of his participation in the Plan.
(aa) "Participant" shall mean an Employee who has met all of the
eligibility requirements of the Plan and who is currently included in the Plan
as provided in Article II hereof.
(bb) "Plan" shall mean the First Robinson Financial Corporation
Employee Stock Ownership Plan, as described herein or as hereafter amended from
time to time.
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(cc) "Plan Year" shall mean any 12 consecutive month period commencing
on November 1 and ending on October 31.
(dd) "Qualified Domestic Relations Order" shall mean any judgment,
decree or order (including approval of a property settlement agreement) that
relates to the provision of child sup port, alimony, marital property rights to
a spouse, former spouse, child or other dependent of the Participant (all such
persons hereinafter termed "alternate payee") and is made pursuant to a State
domestic relations law (including community property law) and, further, that
creates or recognizes the existence of an alternate payee's right to, or assigns
to an alternate payee the right to receive all or a portion of the benefits
payable with respect to a Participant and that clearly specifies the following:
(1) the name and last known mailing address (if available) of
the Participant and the name and mailing address of each alternate
payee to which the order relates;
(2) the amount or percentage of the Participant's benefits to
be paid to an alternate payee or the manner in which the amount is to
be determined; and
(3) the number of payments or period for which payments are
required.
A domestic relations order is not a Qualified Domestic Relations Order
if it:
(1) requires the Plan to provide any type or form of benefit
or any option not otherwise provided under the Plan; or,
(2) requires the Plan to provide increased benefits, or
(3) requires payment of benefits to an alternate payee that is
required to be paid to another alternate payee under a previously
existing Qualified Domestic Relations Order.
(ee) "Retirement" shall mean termination of employment which qualifies
as early, normal or Disability retirement as described in Article VI.
(ff) "Service" shall mean employment with the Employer.
(gg) "Sponsor" shall mean First Robinson Financial Corporation, a
Delaware corporation.
(hh) "Trust Agreement" shall mean the agreement, dated March ___, 1997
by and between First Robinson Financial Corporation, a Delaware corporation, and
First Bankers Trust Co., N.A., of Quincy, Illinois.
(ii) "Trustee" shall mean the Trustee or Trustees by whom the assets of
the Plan are held, as provided in the Trust Agreement, or his or their
successors.
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(jj) "Valuation Date" shall mean the last day of each Plan Year. The
Trustee may make additional valuations, at the instruction of the Administrator,
but in no event may the Administrator request additional valuations by the
Trustee more frequently than quarterly. Whenever such date falls on a Saturday,
Sunday or holiday, the preceding business day shall be the Valuation Date.
(kk) "Year of Service" shall mean any Plan Year during which an
Employee has completed at least 1,000 Hours of Service, except as otherwise
specified in Article III, in the determination of Years of Service for
eligibility and vesting purposes under this Plan, the term "Year of Service"
shall also mean any Plan Year during which an Employee has completed at least
1,000 Hours of Service with an entity that is:
(1) a member of a controlled group including the Employer,
while it is a member of such controlled group (within the meaning of
Section 414(b) of the Code);
(2) in a group of trades or businesses under common control
with the Employer, while it is under common control (within the meaning
of Section 414(c) of the Code);
(3) a member of an affiliated service group including the
Employer, while it is a member of such affiliated service group (within
the meaning of Section 414(m) of the Code); or
(4) a leasing organization, under the circumstances described
in Section 414(n) of the Code.
1.2 Plurals and Gender.
Where appearing in the Plan and the Trust Agreement, the masculine
gender shall include the feminine and neuter genders, and the singular shall
include the plural, and vice versa, unless the context clearly indicates a
different meaning.
1.3 Incorporation of Trust Agreement.
The Trust Agreement, as the same may be amended from time to time, is
intended to be and hereby is incorporated by reference into this Plan and for
all purposes shall be deemed a part of the Plan.
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1.4 Headings.
The headings and sub-headings in this Plan are inserted for the
convenience of reference only and are to be ignored in any construction of the
provisions hereof.
1.5 Severability.
In case any provision of this Plan shall be held illegal or void, such
illegality or invalidity shall not affect the remaining provisions of this Plan,
but shall be fully severable, and the Plan shall be construed and enforced as if
said illegal or invalid provisions had never been inserted herein.
1.6 References to Governmental Regulations.
References in this Plan to regulations issued by the Internal Revenue
Service, the Department of Labor, or other governmental agencies shall include
all regulations, rulings, proce dures, releases and other position statements
issued by any such agency.
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ARTICLE II
PARTICIPATION
2.1 Commencement of Participation.
(a) Any Employee who completes at least 1,000 Hours of Service during
his Eligibility Period or during any Plan Year beginning after his Date of Hire
shall initially become a Participant on the Entry Date coincident with or next
following the later of the following dates, provided he is employed by the
Employer on that Entry Date:
(1) The date which is 12 months after his Date of Hire; and
(2) The date on which he attains age 21.
(b) Any Employee who had satisfied the requirements set forth in
Section 2.1(a) during the 12-month period prior to the Effective Date shall
become a Participant on the Effective Date, provided he is still employed by the
Employer on the Effective Date.
2.2 Termination of Participation.
After commencement or resumption of his participation, an Employee
shall remain a Participant during each consecutive Plan Year thereafter until
the earliest of the following dates:
(a) His actual Retirement date;
(b) His date of death; or
(c) The last day of a Plan Year during which he incurs a Break.
2.3 Resumption of Participation.
(a) Any Participant whose employment terminates and who resumes Service
before he incurs a Break shall resume participation immediately on the date he
is reemployed.
(b) Except as otherwise provided in Section 2.3(c), any Participant who
incurs one or more Breaks and resumes Service shall resume participation
retroactively as of the first day of the first Plan Year in which he completes a
Year of Service after such Break(s).
(c) Any Participant who incurs one or more Breaks and resumes Service,
but whose pre- Break Service is not reinstated to his credit pursuant to Section
3.3, shall be treated as a new Employee and shall again be required to satisfy
the eligibility requirements contained in Section 2.1 before resuming
participation on the appropriate Entry Date, as specified in Section 2.1.
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2.4 Determination of Eligibility.
The Administrator shall determine the eligibility of Employees in
accordance with the provisions of this Article. For each Plan Year, the Employer
shall furnish the Administrator a list of all Employees, indicating the original
date of their reemployment with the Employer and any Breaks they may have
incurred.
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ARTICLE III
CREDITED SERVICE
3.1 Service Counted for Eligibility Purposes.
Except as provided in Section 3.3, all Years of Service completed by an
Employee shall be counted in determining his eligibility to become a Participant
on and after the Effective Date, whether such Service was completed before or
after the Effective Date.
3.2 Service Counted for Vesting Purposes.
All Years of Service completed by an Employee (including Years of
Service completed prior to the Effective Date) shall be counted in determining
his vested interest in this Plan, except the following:
(a) Service which is disregarded under the provisions of Section 3.3;
(b) Service prior to the Effective Date of this Plan if such Service
would have been disregarded under the "break in service" rules (within the
meaning of Section 1.411(a)-5(b)(6) of the Treasury Regulations).
3.3 Credit for Pre-Break Service.
Upon his resumption of participation following one or a series of
consecutive Breaks, an Employee's pre-Break Service shall be reinstated to his
credit for all purposes of this Plan only if either:
(a) He was vested in any portion of his accrued benefit at the time the
Break(s) began; or
(b) The number of his consecutive Breaks does not equal or exceed the
greater of 5 or the number of his Years of Service credited to him before the
Breaks began.
Except as provided in the foregoing, none of an Employee's Service
prior to one or a series of consecutive Breaks shall be counted for any purpose
in connection with his participation in this Plan thereafter.
3.4 Service Credit During Authorized Leaves.
An Employee shall receive no Service credit under Section 3.1 or 3.2
during any Authorized Leave of Absence. However, solely for the purpose of
determining whether he has incurred a Break during any Plan Year in which he is
absent from Service for one or more Authorized Leaves of Absence, he shall be
credited with 45 Hours of Service for each week during any such leave period.
Notwithstanding the foregoing, if an Employee fails to return to Service on or
before the end of a leave
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period, he shall be deemed to have terminated Service as of the first day of
such leave period and his credit for Hours of Service, determined under this
Section 3.4, shall be revoked. Notwithstanding anything contained herein to the
contrary, an Employee who is absent by reason of military service as set forth
in Section 1.1(d)(1) shall be given Service credit under this Plan for such
military leave period to the extent, and for all purposes, required by law.
3.5 Service Credit During Maternity or Paternity Leave.
Effective for absences beginning on or after January 1, 1985, for
purposes of determining whether a Break has occurred for participation and
vesting purposes, an individual who is on maternity or paternity leave as
described in Section 1.1(w), shall be deemed to have completed Hours of Service
during such period of absence, all in accordance with Section 1.1(w). Not
withstanding the foregoing, no credit shall be given for such Hours of Service
unless the individual furnishes to the Administrator such timely information as
the Administrator may reasonably require to determine:
(a) that the absence from Service was attributable to one of the
maternity or paternity reasons enumerated in Section 1.1(w); and
(b) the number of days for which such absence lasted.
In no event, however, shall any credit be given for such leave other than for
determining whether a Break has occurred.
3.6 Ineligible Employees.
Notwithstanding any provisions of this Plan to the contrary, any person
who is employed by the Employer, but who is ineligible to participate in this
Plan, either because of his failure
(a) To meet the eligibility requirements contained in Article II; or
(b) To be an Employee, as defined in Section 1.1(p), shall,
nevertheless, earn Years of Service for eligibility and vesting purposes
pursuant to the rules contained in this Article III. However, such a person
shall not be entitled to receive any contributions hereunder unless and until he
becomes a Participant in this Plan, and then, only during his period of
participation.
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ARTICLE IV
CONTRIBUTIONS
4.1 Employee Stock Ownership Contributions.
(a) Subject to all of the provisions of this Article IV, for each Plan
Year commencing on or after the Effective Date, the Employer shall make an
Employee Stock Ownership contribution to the Fund, in such amount as may be
determined by the Board of Directors in its discretion. Such contribution shall
be in the form of cash or Employer Securities. In determining the value of
Employer Securities transferred to the Fund as an Employee Stock Ownership con
tribution, the Administrator may determine the average of closing prices of such
securities for a period of up to 90 consecutive days immediately preceding the
date on which the securities are contributed to the Fund. In the event that the
Employer Securities are not readily tradable on an established securities
market, the value of the Employer Securities transferred to the Fund shall be
determined by an independent appraiser in accordance with Section 8.9.
(b) In no event shall such contribution by the Employer exceed for any
Plan Year the maximum amount that may be deducted by the Employer under Section
404 of the Code, nor shall such contribution cause the Employer to violate its
regulatory capital requirements. Each Employee Stock Ownership contribution by
the Employer shall be deemed to be made on the express condition that the Plan,
as then in effect, shall be qualified under Sections 401 and 501 of the Code and
that the amount of such contribution shall be deductible from the Employer's
income under Section 404 of the Code.
4.2 Time and Manner of Employee Stock Ownership Contributions.
(a) The Employee Stock Ownership contribution (if any) for each Plan
Year shall be paid to the Trustee in one lump sum or installments at any time on
or before the expiration of the time prescribed by law (including any
extensions) for filing of the Employer's federal income tax return for its
fiscal year ending concurrent with or during such Plan Year. Any portion of the
Employee Stock Ownership contribution for each Plan Year that may be made prior
to the last day of the Plan Year shall be maintained by the Trustee in the
Employee Stock Ownership suspense account described in Section 5.2 until the
last day of such Plan Year.
(b) If an Employee Stock Ownership contribution for a Plan Year is paid
after the close of the Employer's fiscal year which ends concurrent with or
during such Plan Year but on or prior to the due date (including any extensions)
for filing of the Employer's federal income tax return for such fiscal year, it
shall be considered, for allocation purposes, as an Employee Stock Ownership
contribution to the Fund for the Plan Year for which it was computed and
accrued, unless such contribution is accompanied by a statement to the Trustee,
signed by a representative of the Employer, which specifies that the Employee
Stock Ownership contribution is made with respect to the Plan Year in which it
is
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received by the Trustee. Any Employee Stock Ownership contribution paid by the
Employer during any Plan Year but after the due date (including any extensions)
for filing of its federal income tax return for the fiscal year of the Employer
ending on or before the last day of the preceding Plan Year shall be treated,
for allocation purposes, as an Employee Stock Ownership contribution to the Fund
for the Plan Year in which the contribution is paid to the Trustee.
(c) Notwithstanding anything contained herein to the contrary, no
Employee Stock Ownership contribution shall be made for any year during which a
"limitations account" created pursuant to Section 5.6(c)(2) is in existence
until the balance of such limitations account has been reallocated in accordance
with Section 5.6(c)(2).
4.3 Records of Contributions.
The Employer shall deliver at least annually to the Trustee, with
respect to the contributions contemplated in Section 4.1, a certificate of the
Administrator, in such form as the Trustee shall approve, setting forth:
(a) The aggregate amount of contributions, if any, to the Fund for such
Plan Year;
(b) The names, Internal Revenue Service identifying numbers and current
residential addresses of all Participants in the Plan;
(c) The amount and category of contributions to be allocated to each
such Participant; and
(d) Any other information reasonably required for the proper operation
of the Plan.
4.4 Erroneous Contributions.
(a) Notwithstanding anything herein to the contrary, upon the
Employer's request, a contribution which was made by a mistake of fact, or
conditioned upon the initial qualification of the Plan, under Code Section 401,
or upon the deductibility of the contribution under Section 404 of the Code,
shall be returned to the Employer by the Trustee within one year after the
payment of the contribution, the denial of the qualification or the disallowance
of the deduction (to the extent disallowed), whichever is applicable; provided,
however, that in the case of denial of the initial qualification of the Plan, a
contribution shall not be returned unless an Application for Determination has
been timely filed with the Internal Revenue Service. Any portion of a
contribution returned pursuant to this Section 4.4 shall be adjusted to reflect
its proportionate share of the losses of the fund, but shall not be adjusted to
reflect any earnings or gains. Notwithstanding any provisions of this Plan to
the contrary, the right or claim of any Participant or Beneficiary to any asset
of the Fund or any benefit under this Plan shall be subject to and limited by
this Section 4.4.
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(b) In no event shall voluntary Employee contributions be accepted. Any
such voluntary Employee contributions (and any earnings attributable thereto)
mistakenly received by the Trustee shall promptly be returned to the
Participant.
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ARTICLE V
ACCOUNTS, ALLOCATIONS AND INVESTMENTS
5.1 Establishment of Separate Participant Accounts.
The Administrator shall establish and maintain separate individual
accounts for Participants in the Plan and for each Former Participant in
accordance with the provisions of this Article V. Such separate accounts shall
be for accounting purposes only and shall not require a segregation of the Fund,
and no Participant, Former Participant or Beneficiary shall acquire any right to
or interest in any specific assets of the Fund as a result of the allocations
provided for under this Plan, except where segregation is expressly provided for
in this Plan.
(a) Employee Stock Ownership Accounts.
The Administrator shall establish a separate Employee Stock Ownership
Account in the Fund for each Participant. The account shall be credited as of
the last day of each Plan Year with the amounts allocated to the Participant
under Sections 5.4 and 5.5. The Administrator may establish subaccounts
hereunder, an Employer Stock Account reflecting a Participant's interest in
Employer Securities held by the Trust and an Other Investments Account
reflecting the Participant's interest in his Employee Stock Ownership Account
other than Employer Securities.
(b) Distribution Accounts.
In any case where distribution of a terminated Participant's vested
interest in the Plan is to be deferred, the Administrator shall establish a
separate, nonforfeitable account in the Fund to which the balance in his
Employee Stock Ownership Account in the Plan shall be transferred after such
Participant incurs a Break. Unless the Former Participant's distribution ac
counts are segregated for investment purposes pursuant to section 9.4, they
shall share in Investment Adjustments.
(c) Other Accounts.
The Administrator shall establish such other separate accounts for each
Participant as may be necessary or desirable for the convenient administration
of the Fund.
5.2 Establishment of Suspense Accounts.
The Administrator shall establish separate accounts to be known as
"suspense accounts." There shall be credited to such appropriate suspense
accounts any Employee Stock Ownership contributions that may be made prior to
the last day of the Plan Year, as provided in Section 4.2. The suspense accounts
shall share proportionately as to time and amount in any Investment Adjustments.
As of the last day of each Plan Year, the balance of the Employee Stock
Ownership suspense account shall be added to the Employee Stock Ownership
contribution and allocated to the Employee Stock Ownership
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Accounts of Participants as provided in Section 5.5, except as provided herein.
In the event that the Plan takes an Exempt Loan, the Employer Securities pur
chased thereby shall be allocated to a separate Exempt Loan Suspense Account,
from which alloca tions shall be made in accordance with Section 8.5.
5.3 Allocation of Earnings, Losses and Expenses.
As of each Valuation Date, any increase or decrease in the net worth of
the aggregate Employee Stock Ownership Accounts held in the Fund attributable to
earnings, losses, expenses and unrealized appreciation or depreciation in each
such aggregate Account, as determined by the Trustee pursuant to the Trust
Agreement, shall be credited to or deducted from the appropriate sus pense
accounts and all Participants' Employee Stock Ownership Accounts (except
segregated distribution accounts described in Section 5.1(b) and the
"limitations account" described in Section 5.6(c)(4)) in the proportion that the
value of each such Account (determined immediately prior to such allocation and
before crediting any Employee Stock Ownership contributions and forfeitures for
the current Plan Year but after adjustment for any transfer to or from such
Accounts and for the time such funds were in such Accounts) bears to the value
of all Employee Stock Ownership Accounts.
5.4 Allocation of Forfeitures.
As of the last day of each Plan Year, all forfeitures attributable to
the Employee Stock Ownership Accounts which are then available for reallocation
shall be, as appropriate, added to the Employee Stock Ownership contribution (if
any) for such year and allocated among the Participants' Employee Stock
Ownership Accounts, as appropriate, in the manner provided in Sections 5.5 and
5.6.
5.5 Allocation of Annual Employee Stock Ownership Contributions.
As of the last day of each Plan Year for which the Employer shall make
an Employee Stock Ownership contribution, the Administrator shall allocate the
Employee Stock Ownership contribution (including reallocable forfeitures) for
such Plan Year to the Employee Stock Ownership account of each Participant who
completed at least 1,000 Hours of Service during that Plan Year, provided that
he is still employed by the Employer on the last day of the Plan Year. Such
allocation shall be made in the same proportion that each such Participant's
Compensation for such Plan Year bears to the total Compensation of all such
Participants for such Plan Year, subject to Section 5.6. Notwithstanding the
foregoing, if a Participant attains his Normal Retirement Date and terminates
Service prior to the last day of the Plan Year but after completing 1,000 Hours
of Service, he shall be entitled to an allocation based on his Compensation
earned prior to his termination and during the Plan Year. Furthermore, if a
Participant completes 1,000 Hours of Service and is on a Leave of Absence on the
last day of the Plan Year because of pregnancy or other medical reason, such a
Participant shall be entitled to an allocation based on his Compensation earned
during such Plan Year.
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5.6 Limitation on Annual Additions.
(a) Notwithstanding any provisions of this Plan to the contrary, the
total Annual Additions credited to a Participant's accounts under this Plan (and
under any other defined contribution plan to which the Employer contributes) for
any Limitation Year shall not exceed the lesser of:
(1) 25% of the Participant's compensation for such Limitation
Year; or
(2) $30,000 (or, if greater, one-fourth of the defined benefit
dollar limitation set forth in Section 415(b)(1)(A) of the Code).
Whenever otherwise allowed by law, the maximum amount of $30,000 shall
be automatically adjusted annually for cost-of-living increases in
accordance with Section 415(d) of the Code and the highest such
increase effective at any time during the Limitation Year shall be
effective for the entire Limitation Year, without any amendment to this
Plan.
(b) Solely for the purpose of this Section 5.6, the term "compensation"
is defined as wages, salaries, and 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 includable in
gross income (including, but not limited to, commissions paid to salesmen,
compensation for services on the basis of a percentage of profits, commissions
on insurance premiums, tips, bonuses, fringe benefits, and reimbursements or
other expense allowances under a nonaccountable plan (as described in Treas.
Regs. Section 1.62-2(c)), and excluding the following:
(1) Employer contributions to a plan of deferred compensation
which are not includible in the Employee's gross income for the taxable
year in which contributed, or Employer contributions under a simplified
employee pension plan to the extent such contributions are deductible
by the Employee, or any distributions from a plan of deferred
compensation;
(2) Amounts realized from the exercise of a non-qualified
stock option, or when restricted stock (or property) held by the
employee either becomes freely transferable or is no longer subject to
a substantial risk of forfeiture;
(3) Amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock option; and
(4) Other amounts which received special tax benefits, or
contributions made by the employer (whether or not under a salary
reduction agreement) towards the purchase of an annuity contract
described in section 403(b) of the Code (whether or not the
contributions are actually excludable from the gross income of the
Employee).
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(c) In the event that the limitations on Annual Additions described in
this Section 5.6(a) above are exceeded with respect to any Participant in any
Limitation Year, then the contributions allocable to the Participant for such
year shall be reduced to the minimum extent required by such limitations in the
following order of priority:
(1) If any further reductions in Annual Additions are
necessary, then the Employee Stock Ownership contributions and
forfeitures allocated during such Limitation Year to the Participant's
Employee Stock Ownership Account shall be reduced. The amount of any
such reductions in the Employee Stock Ownership contributions and
forfeitures shall be reallocated to all other Participants in the same
manner as set forth under Sections 5.4 and 5.5.
(2) Any amounts which cannot be reallocated to other
Participants in a current Limitation Year in accordance with Section
5.6(c)(1) above because of the limitations contained in Sections 5.6(a)
and (d) shall be credited to an account designated as the "limitations
account" and carried forward to the next and subsequent Limitation
Years until it can be reallocated to all Participants as set forth in
Sections 5.4, and 5.5, as appropriate. No Investment Adjustments shall
be allocated to this limitations account. In the next and subsequent
Limitation Years, all amounts in the limitations account must be
allocated in the manner described in Sections 5.4 and 5.5, as
appropriate, before any Employee Stock Ownership contributions may be
made to this Plan for that Limitation Year.
(3) The Administrator shall determine to what extent the
Annual Additions to any Participant's Employee Stock Ownership Account
must be reduced in each Limitation Year. The Administrator shall reduce
the Annual Additions to all other qualified, tax-exempt retirement
plans maintained by the Employer in accordance with the terms contained
therein for required reductions or reallocations mandated by Section
415 of the Code before reducing any Annual Additions in this Plan.
(4) In the event this Plan is voluntarily terminated by the
Employer under Section 13.5, any amounts credited to the limitations
account described in Section 5.6(c)(2) above which have not be
reallocated as set forth herein shall be distributed to the
Participants who are still employed by the Employer on the date of
termination, in the proportion that each Participant's Compensation
bears to the Compensation of all Participants.
(d) The Annual Additions credited to a Participant's accounts for each
Limitation Year are further limited so that in the case of an Employee who is a
Participant in both this Plan and any qualified defined benefit plan
(hereinafter referred to as a "pension plan") of the Employer, the sum of (1)
and (2) below will not exceed 1.0:
(1) (A) The projected annual normal retirement benefit of a
Participant under the pension plan, divided by
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(B) The lesser of:
(i) The product of 1.25 multiplied by the dollar
limitation in effect under Section 415(b)(1)(A) of the Code
for such Limitation Year, or
(ii) The product of 1.4 multiplied by the amount of
compensation which may be taken into account under Section
415(b)(1)(B) of the Code for the Participant for such
Limitation Year; plus
(2) (A) The sum of Annual Additions credited to the
Participant under this Plan for all Limitation Years, divided by:
(B) The sum of the lesser of the following amounts determined
for such Limitation Year and for each prior year of service with the
Employer:
(i) The product of 1.25 multiplied by the dollar
limitation in effect under Section 415(b)(1)(A) of the Code
for such Limitation Year, or
(ii) The product of 1.4 multiplied by the amount of
compensation which may be taken into account under Section
415(b)(1)(B) of the Code for the Participant for such
Limitation Year.
The Administrator may, in calculating the defined contribution plan
fraction described in Section 5.6(d)(2), elect to use the transitional rule
pursuant to Section 415(e)(6) of the Code, if applicable. If the sum of the
fractions produced above will exceed 1.0, even after the use of the "fresh
start" rule contained in Section 235 of the Tax Equity and Fiscal Responsibility
Act of 1982 ("TEFRA"), if applicable, then the same provisions as stated in
Section 5.6(c) above shall apply. If, even after the reductions provided for in
Section 5.6(c), the sum of the fractions still exceed 1.0, then the benefits of
the Participant provided under the pension plan shall be reduced to the extent
necessary, in accordance with Treasury Regulations issued under the Code. Solely
for the purposes of this Section 5.6(d), the term "years of service" shall mean
all years of service defined by Treasury Regulations issued under Section 415 of
the Code.
(e) In the event that the Employer is a member of (1) a controlled
group of corporations or a group of trades or businesses under common control
(as described in Section 414(b) or (c) of the Code, as modified by Section
415(h) thereof), or (2) an affiliated service group (as described in Section
414(m) of the Code), the Annual Additions credited to any Participant's accounts
in any such Limitation Year shall be further limited by reason of the existence
of all other qualified retirement plans maintained by such affiliated
corporations, other entities under common control or other members of the
affiliated service group, to the extent such reduction is required by Section
415 of the Code and the regulations promulgated thereunder. The Administrator
shall determine if any such reduction in the Annual Additions to a Participant's
accounts is required for this reason, and if so, the same provisions as stated
in 5.6(c) and (d) above shall apply.
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(f) Annual Additions shall not include any Employer contributions which
are used by the Trust to pay interest on an Exempt Loan nor any forfeitures of
Employer Securities purchased with the proceeds of an Exempt Loan, provided that
not more than one-third of the Employer contributions are allocated to
Participants who are among the group of employees deemed "highly compensated
employees" within the meaning of Code Section 414(q).
5.7 Erroneous Allocations.
No Participant shall be entitled to any Annual Additions or other
allocations to his accounts in excess of those permitted under Sections 5.3,
5.4, 5.5, and 5.6. If it is determined at anytime that the Administrator and/or
Trustees have erred in accepting and allocating any contributions or forfeitures
under this Plan, or in allocating Investment Adjustments, or in excluding or
including any person as a Participant, then the Administrator, in a uniform and
nondiscriminatory manner, shall determine the manner in which such error shall
be corrected and shall promptly advise the Trustee in writing of such error and
of the method for correcting such error. The accounts of any or all Participants
may be revised, if necessary, in order to correct such error.
5.8 Value of Participant's Interest in Fund.
At any time, the value of a Participant's interest in the Fund shall
consist of the aggregate value of his Employee Stock Ownership Account and his
distribution account, if any, determined as of the next-preceding Valuation
Date. The Administrator shall maintain adequate records of the cost basis of
Employer Securities allocated to each Participant's Employer Stock Ownership
Account.
5.9 Investment of Account Balances.
The Employee Stock Ownership Accounts shall be invested primarily in
Employer Securities. Employer Securities shall constitute at least 51% of the
assets of all Employee Stock Ownership Accounts. All sales of Employer
Securities by the Trustee attributable to the Employee Stock Ownership Accounts
of all Participants shall be charged pro rata to the Employee Stock Ownership
Accounts of all Participants.
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ARTICLE VI
RETIREMENT, DEATH AND DESIGNATION OF BENEFICIARY
6.1 Normal Retirement.
A Participant who reaches his Normal Retirement Date and who shall
retire at that time shall thereupon be entitled to retirement benefits based on
the value of his interest in the Fund, payable pursuant to the provisions of
Section 9.1. A Participant who remains in Service after his Normal Retirement
Date shall not be entitled to any retirement benefits until his actual
termination of Service thereafter (except as provided in Section 9.3(g)) and he
shall meanwhile continue to participate in this Plan.
6.2 Early Retirement.
A Participant who reaches his Early Retirement Date may retire at such
time (or, at his election, as of the first day of any month thereafter prior to
his Normal Retirement Date) and shall thereupon be entitled to retirement
benefits based on the value of his interest in the Fund, payable pursuant to the
provisions of Section 9.1.
6.3 Disability Retirement.
In the event a Participant incurs a Disability, he may retire on his
Disability Retirement Date and shall thereupon be entitled to retirement
benefits based on the value of his interest in the Fund, payable pursuant to the
provisions of Section 9.1.
6.4 Death Benefits.
(a) Upon the death of a Participant before his Retirement or other
termination of Service, the value of his interest in the Fund shall be payable
pursuant to the provisions of Section 9.1. The Administrator shall direct the
Trustee to distribute his interest in the Fund to any surviving Beneficiary
designated by the Participant or, if none, to such persons designated by the
Administrator pursuant to Section 6.5.
(b) Upon the death of a Former Participant, the Administrator shall
direct the Trustee to distribute any undistributed balance of his interest in
the Fund to any surviving Beneficiary designated by him or, if none, to such
persons designated by the Administrator pursuant to Section 6.5.
(c) The Administrator may require such proper proof of death and such
evidence of the right of any person to receive the interest in the Fund 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.
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6.5 Designation of Death Beneficiary and Manner of Payment.
(a) Each Participant shall have the right to designate a Beneficiary or
Beneficiaries to receive the sum or sums to which he may be entitled upon his
death. The Participant may also designate the manner in which any death benefits
under this Plan shall be payable to his Beneficiary, provided that such
designation is in accordance with Section 9.4. Such designation of Beneficiary
and manner of payment shall be in writing and delivered to the Administrator,
and shall be effective when received by the Administrator. The Participant shall
have the right to change such designation by notice in writing to the
Administrator. Such change of Beneficiary or the manner of payment shall become
effective upon its receipt by the Administrator. Any such change shall be deemed
to revoke all prior designations.
(b) If a Participant shall fail to designate validly a Beneficiary or
if no designated Beneficiary survives the Participant, his interest in the Fund
shall be paid to the person or persons in the first of the following classes of
successive preference Beneficiaries surviving at the death of the Participant:
the Participant's (1) widow or widower, (2) children, (3) parents, and (4)
estate. The Administrator shall decide what Beneficiaries, if any, shall have
been validly designated, and its decision shall be binding and conclusive on all
persons.
(c) Notwithstanding the foregoing, if a Participant has been married
throughout the 12 month period preceding the date of his death, the sum or sums
to which he may be entitled under this Plan upon his death shall be paid to his
spouse, unless the Participant's spouse shall have consented to the election of
another Beneficiary. Such a spousal consent shall be in writing and shall be
witnessed either by a representative of the Plan or a notary public. If it is
established to the satisfaction of the Administrator that such spousal consent
cannot be obtained because there is no spouse, because the spouse cannot be
located, or other reasons prescribed by governmental regulations, the consent of
the spouse may be waived, and the Participant may designate a Beneficiary or
Beneficiaries other than his spouse.
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ARTICLE VII
VESTING AND FORFEITURES
7.1 Vesting on Death, Disability and Normal Retirement.
Unless his participation in this Plan shall have terminated prior
thereto, upon a Participant's death, Disability or upon his attainment of Normal
Retirement Date (whether or not he actually retires at that time) while he is
still employed by the Employer, the Participant's entire interest in the Fund
shall be fully vested and nonforfeitable.
7.2 Vesting on Termination of Participation.
Upon termination of his participation in this Plan for any reason other
than death, Disability, or Normal Retirement, a Participant shall be vested in a
percentage of his Employee Stock Ownership Account, such vested percentages to
be determined under the following table, based on the Years of Service
(including Years of Service prior to the Effective Date) credited to him for
vesting purposes at the time of his termination of participation:
Years of Service Completed Percentage Vested
-------------------------- -----------------
Less than 5 0%
5 or more 100%
Any portion of the Participant's Employee Stock Ownership Account which
is not vested at the time he incurs a Break shall thereupon be forfeited and
disposed of pursuant to Section 7.3. Distribution of the vested portion of a
terminated Participant's interest in the Plan may be authorized by the
Administrator in any manner permitted under Section 9.1.
7.3 Disposition of Forfeitures.
(a) In the event a Participant incurs a Break and subsequently resumes
both his Service and his participation in the Plan prior to incurring at least 5
Breaks, the forfeitable portion of his Employee Stock Ownership Account shall be
reinstated to the credit of the Participant as of the date he resumes
participation.
(b) In the event a Participant terminates Service and subsequently
incurs a Break and receives a distribution, or in the event a Participant does
not terminate Service, but incurs at least 5 Breaks, or in the event that a
Participant terminates Service and incurs at least 5 Breaks but has not received
a distribution, then the forfeitable portion of his Employer Account, including
Investment Adjustments, shall be reallocated to other Participants, pursuant to
Section 5.4 as of the date the Participant incurs such Break or Breaks, as the
case may be.
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(c) In the event a former Participant who had received a distribution
from the Plan is rehired, he shall repay the amount of his distribution before
the earlier of 5 years after the date of his rehire by the Employer, or the
close of the first period of 5 consecutive Breaks commencing after the
withdrawal in order for any forfeited amounts to be restored to him.
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ARTICLE VIII
EMPLOYEE STOCK OWNERSHIP PROVISIONS
8.1 Right to Demand Employer Securities.
A Participant entitled to a distribution from his Employee Stock
Ownership Account shall be entitled to demand that his interest in the Account
be distributed to him in the form of Employer Securities, all subject to Section
9.9. In the event that the Employer Securities are not readily tradable on an
established market, the Participant shall be entitled to require that the
Employer repurchase the Employer Securities under a fair valuation formula, as
provided by governmental regulations. The Participant or Beneficiary shall be
entitled to exercise the put option described in the preceding sentence for a
period of not more than 60 days following the date of distribution of Employer
Securities to him. If the put option is not exercised within such 60-day period,
the Participant or Beneficiary may exercise the put option during an additional
period of not more than 60 days after the beginning of the first day of the
first Plan Year following the Plan Year in which the first put option period
occurred, all as provided in regulations promulgated by the Secretary of the
Treasury.
8.2 Voting Rights.
Each Participant with an Employee Stock Ownership Account shall be
entitled to direct the Trustee as to the manner in which the Employer Securities
in such Account are to be voted. Employer Securities held in the Employee Stock
Ownership Suspense Account or the Exempt Loan Suspense Account shall be voted by
the Trustee on each issue with respect to which shareholders are entitled to
vote in the manner directed by the majority of the Participants who directed the
Trustee as to the manner of voting their shares in the Employee Stock Ownership
Accounts with respect to such issue. Prior to the initial allocation of shares,
the Trustee shall be entitled to vote the shares in the Suspense Account without
prior direction from the Participants or the Administrator. In the event that a
Participant fails to give timely voting instructions to the Trustee with respect
to the voting of his allocated Employer Securities, the Trustee shall be
entitled to vote such shares in its discretion.
8.3 Nondiscrimination in Employee Stock Ownership Contributions.
In the event that the amount of the Employee Stock Ownership
contributions that would be required in any Plan Year to make the scheduled
payments on an Exempt Loan would exceed the amount that would otherwise be
deductible by the Employer for such Plan Year under Code Section 404, then no
more than one-third of the Employee Stock Ownership contributions for the Plan
Year, which is also the Employer's taxable year, shall be allocated to the group
of Employees who, during the Plan Year or the preceding Plan Year:
(a) Was at any time a 5 percent owner of the Employer;
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(b) Received compensation from the Employer in excess of $75,000, as
adjusted under Code Section 414(q);
(c) Received compensation from the Employer in excess of $50,000, as
adjusted under Code Section 414(q), and was in the "top-paid group" of employees
(as defined below) for such year; or
(d) Was at any time an officer and received compensation greater than
50 percent of the amount in effect under Code Section 415(b)(1)(A), as adjusted
for cost-of-living increases permitted under Code Section 415(d)(1), but without
regard to any adjustment under Code Section 415(c)(6)(A).
An Employee shall be deemed a member of the "top-paid group" of employees for a
given Plan Year if such Employee is in the group of the top 20% of the employees
of the Employer when ranked on the basis of compensation.
8.4 Dividends.
Dividends paid with respect to Employer Securities credited to a
Participant's Employee Stock Ownership account as of the record date for the
dividend payment may be paid in cash to the Participants, pursuant to the
directions of the Board of Directors of the Sponsor. If the Board of Directors
shall direct that the aforesaid dividends shall be paid directly to
Participants, the quarterly dividends paid with respect to such Employer
Securities shall be paid to the Plan, from which dividend distributions in cash
shall be made to the Participants with respect to the Employer Securities in
their Employee Stock Ownership Accounts within 90 days of the close of the Plan
Year in which the dividends were paid. Dividends on Employer Securities obtained
pursuant to an Exempt Loan and still held in the Suspense Account may be used to
make payments on an Exempt Loan, as described in Section 8.5.
8.5 Exempt Loans.
(a) The Sponsor may direct the Trustee to obtain Exempt Loans. The
Exempt Loan may take the form of (i) a loan from a bank or other commercial
lender to purchase Employer Securities (ii) a loan from the Employer to the
Plan; or (iii) an installment sale of Employer Securities to the Plan. The
proceeds of any such Exempt Loan shall be used, within a reasonable time after
the Exempt Loan is obtained, only to purchase Employer Securities, repay the
Exempt Loan, or repay any prior Exempt Loan. Any such Exempt Loan shall provide
for no more than a reasonable rate of interest and shall be without recourse
against the Plan. The number of years to maturity under the Exempt Loan must be
definitely ascertainable at all times. The only assets of the Plan that may be
given as collateral for an Exempt Loan are Employer Securities acquired with the
proceeds of the Exempt Loan and Employer Securities that were used as collateral
for a prior Exempt Loan repaid with the proceeds of the current Exempt Loan.
Such Employer Securities so pledged shall be placed in an Exempt Loan Suspense
Account. No person or institution entitled to payment under
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an Exempt Loan shall have recourse against Trust assets other than the aforesaid
collateral, Employer Stock Ownership contributions (other than contributions of
Employer Securities) that are available under the Plan to meet obligations under
the Exempt Loan and earnings attributable to such collateral and the investment
of such contributions. All Employee Stock Ownership contribu tions paid during
the Plan Year in which an Exempt Loan is made (whether before or after the date
the proceeds of the Exempt Loan are received), all Employee Stock Ownership
contribu tions paid thereafter until the Exempt Loan has been repaid in full,
and all earnings from investment of such Employee Stock Ownership contributions,
without regard to whether any such Employee Stock Ownership contributions and
earnings have been allocated to Participants' Employee Stock Ownership Accounts,
shall be available to meet obligations under the Exempt Loan as such obligations
accrue, or prior to the time such obligations accrue, unless otherwise provided
by the Employer at the time any such contribution is made. Any pledge of
Employer Securities shall provide for the release of shares so pledged upon the
payment of any portion of the Exempt Loan.
(b) For each Plan Year during the duration of the Exempt Loan, the
number of shares of Employer Securities released from such pledge shall equal
the number of encumbered shares held immediately before release for the current
Plan Year multiplied by a fraction. The numerator of the fraction is the sum of
principal and interest paid in such Plan Year. The denominator of the fraction
is the sum of the numerator plus the principal and interest to be paid for all
future years. Such years will be determined without taking into account any
possible extension or renewal periods. If interest on any Exempt Loan is
variable, the interest to be paid in future years under the Exempt Loan shall be
computed by using the interest rate applicable as of the end of the Plan Year.
(c) Notwithstanding the foregoing, the Trustee may obtain an Exempt
Loan pursuant to the terms of which the number of Employer Securities to be
released from encumbrance shall be determined solely with reference to principal
payments. In the event that such an Exempt Loan is obtained, annual payments of
principal and interest shall be at a cumulative rate that is not less rapid at
any time than level payments of such amounts for not more than 10 years. The
amount of interest in any such annual loan repayment shall be disregarded only
to the extent that it would be determined to be interest under standard loan
amortization tables. The requirement set forth in the preceding sentence shall
not be applicable from the time that, by reason of a renewal, extension, or
refinancing, the sum of the expired duration of the Exempt Loan, the renewal
period, the extension period, and the duration of a new Exempt Loan exceeds 10
years.
8.6 Exempt Loan Payments.
(a) Payments of principal and interest on any Exempt Loan during a Plan
Year shall be made by the Trustee (as directed by the Administrator) only from
(1) Employee Stock Ownership contributions to the Trust made to meet the Plan's
obligation under an Exempt Loan (other than contributions of Employer
Securities) and from any earnings attributable to Employer Securities held as
collateral for an Exempt Loan and investments of such contribu tions (both
received during or prior to the Plan Year); (2) the proceeds of a subsequent
Exempt Loan made to repay a prior Exempt Loan; and (3) the proceeds of the sale
of any Employer Securities held as
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collateral for an Exempt Loan. Such contribution and earnings shall be accounted
for separately by the Plan until the Exempt Loan is repaid.
(b) Employer Securities released by reason of the payment of principal
or interest on an Exempt Loan from amounts allocated to Participants' Employee
Stock Ownership Accounts shall immediately upon payment be allocated as set
forth in Section 5.5.
(c) The Employer shall contribute to the Trust sufficient amounts to
enable the Trust to pay principal and interest on any such Exempt Loans as they
are due, provided however that no such contribution shall exceed the limitations
in Section 5.6. In the event that such contributions by reason of the
limitations in Section 5.6 are insufficient to enable the Trust to pay principal
and interest on such Exempt Loan as it is due, then upon the Trustee's request
the Employer shall:
(1) Make an Exempt Loan to the Trust in sufficient amounts to
meet such principal and interest payments. Such new Exempt Loan shall
be subordinated to the prior Exempt Loan. Securities released from the
pledge of the prior Exempt Loan shall be pledged as collateral to
secure the new Exempt Loan. Such Employer Securities will be released
from this new pledge and allocated to the Employee Stock Ownership
Accounts of the Participants in accordance with applicable provisions
of the Plan;
(2) Purchase any Employer Securities pledged as collateral in
an amount necessary to provide the Trustee with sufficient funds to
meet the principal and interest repayments. Any such sale by the Plan
shall meet the requirements of Section 408(e) of ERISA; or
(3) Any combination of the foregoing. However, the Employer
shall not, pursuant to the provisions of this subsection, do, fail to
do or cause to be done any act or thing which would result in a
disqualification of the Plan as an Employee Stock Ownership Plan under
the Code.
(d) Except as provided in Section 8.1 above and notwithstanding any
amendment to or termination of the Plan which causes it to cease to qualify as
an Employee Stock Ownership plan within the meaning of Section 4975(e)(7) of the
Code, or any repayment of an Exempt Loan, no shares of Employer Securities
acquired with the proceeds of an Exempt Loan obtained by the Trust to purchase
Employer Securities may be subject to a put, call or other option, or buy-sell
or similar arrangement while such shares are held by the Plan or when such
Shares are distributed from the Plan.
8.7 Put Option.
If a Participant exercises a put option (as set forth in Section 8.1)
with respect to Employer Securities that were distributed as part of a total
distribution pursuant to which a Participant's Employee Stock Ownership Account
is distributed to him in a single taxable year, the Employer or
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the Plan may elect to pay the purchase price of the Employer Securities over a
period not to exceed 5 years. Such payments shall be made in substantially equal
installments not less frequently than annually over a period beginning not later
than 30 days after the exercise of the put option. Reasonable interest shall be
paid to the Participant with respect to the unpaid balance of the purchase price
and adequate security shall be provided with respect thereto. In the event that
a Participant exercises a put option with respect to Employer Securities that
are distributed as part of an installment distribution, the amount to be paid
for such securities shall be paid not later than 30 days after the exercise of
the put option.
8.8 Diversification Requirements
Each Participant who has completed at least 10 years of participation
in the Plan and has attained age 55 may elect within 90 days after the close of
each Plan Year during his "qualified election period" to direct the Plan as to
the investment of at least 25 percent of his Employee Stock Ownership Account
(to the extent such percentage exceeds the amount to which a prior election
under this Section 8.8 had been made). For purposes of this Section 8.8, the
term "qualified election period" shall mean the 5-Plan-Year period beginning
with the Plan Year after the Plan Year in which the Participant attains age 55
(or, if later, beginning with the Plan Year after the first Plan Year in which
the Employee first completes at least 10 years of participation in the Plan). In
the case of the Employee who has attained age 60 and completed 10 years of
participation in the prior Plan Year and in the case of the election year in
which any other Participant who has met the minimum age and service requirements
for diversification can make his last election hereunder, he shall be entitled
to direct the Plan as to the investment of at least 50 percent of his Employee
Stock Ownership Account (to the extent such percentage exceeds the amount to
which a prior election under this Section 8.8 had been made). The Plan shall
make available at least 3 investment options (not inconsistent with regulations
prescribed by the Department of Treasury) to each Participant making an election
hereunder. The Plan shall be deemed to have met the requirements of this Section
if the portion of the Participant's Employee Stock Ownership Account covered by
the election hereunder is distributed to the Participant or his designated
Beneficiary within 90 days after the period during which the election may be
made. In the absence of such a distribution, the Trustee shall implement the
Participant's election within 90 days following the expiration of the qualified
election period.
8.9 Independent Appraiser.
An independent appraiser meeting the requirements of Code Section
170(a)(1) shall value the Employer Securities in those Plan Years when such
securities are not readily tradable on an established securities market.
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ARTICLE IX
PAYMENTS AND DISTRIBUTIONS
9.1 Payments on Termination of Service - In General.
All benefits provided under this Plan shall be funded by the value of a
Participant's vested interest in the Fund. As soon as practicable after a
Participant's Retirement, death or termination of Service, the Administrator
shall ascertain the value of his vested interest in the Fund, as provided in
Article V, and the Administrator shall hold or dispose of the same in accordance
with the following provisions of this Article IX.
9.2 Commencement of Payments.
(a) Distributions upon Retirement or Death. Upon a Participant's
Retirement or Death, payment of benefits under this Plan shall, unless the
Participant otherwise elects (in accordance with Section 9.3), commence no later
than 6 months after the close of the Plan Year in which occurs the date of the
Participant's Retirement or death.
(b) Distribution following Termination of Service. Unless a Participant
elects otherwise, if a Participant terminates Service prior to Retirement or
death, he shall be accorded an opportunity to commence receipt of distributions
from his Accounts within six (6) months after the Valuation Date next following
the date of his termination of service. A Participant who terminates Service
with a deferred vested benefit shall be entitled to receive from the
Administrator a statement of his benefits. In the event that a Participant
elects not to commence receipt of distributions from his Accounts in accordance
with this Section 9.2(b), after the Participant incurs a Break, the
Administrator shall transfer his deferred vested interest to a distribution
account. If a Participant's vested Employer Account does not exceed (or at the
time of any prior distribution did not exceed) $3,500, the Plan Administrator
may distribute the vested portion of his Employer Account as soon as
administratively feasible without the consent of the Participant or his spouse.
(c) Distribution of Accounts Greater Than $3,500. If the value of a
Participant's vested Account balance exceeds (or at the time of any prior
distribution exceeded) $3,500, and the Account balance is immediately
distributable, the Participant must consent to any distribution of such Account
balance. The Plan Administrator shall notify the Participant of the right to
defer any distribution until the Participant's Account balance is no longer
immediately distributable. The consent of the Participant shall not be required
to the extent that a distribution is required to satisfy Code ss.401(a)(9) or
Code ss.415.
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9.3 Mandatory Commencement of Benefits.
(a) Unless a Participant elects otherwise, in writing, distribution of
benefits will begin no later than the 60th day after the latest of the close of
the Plan Year in which (i) the Participant attains age 65, (ii) occurs the tenth
anniversary of the year in which the Participant commenced participation in the
Plan Year, or (iii) the Participant terminates Service with the Employer.
(b) In the event that the Plan shall be subsequently amended to provide
for a form of distribution other than a lump sum, as of the first distribution
calendar year, distributions, if not made in a lump sum, may be made only over
one of the following periods (or a combination thereof):
(i) the life of the Participant,
(ii) the life of the Participant and the designated beneficiary,
(iii) a period certain not extending beyond the life expectancy of
the Participant, or
(iv) a period certain not extending beyond the joint and last
survivor expectancy of the Participant and a designated
beneficiary.
(c) In the event that the Plan shall be subsequently amended to provide
for a form of distribution other than a lump sum, if the participant's interest
is to be distributed in other than a lump sum, the following minimum
distribution rules shall apply on or after the required beginning date:
(i) If a Participant's benefit is to be distributed over (1) a
period not extending beyond the life expectancy of the Participant or
the joint life and last survivor expectancy of the Participant and the
Participant's designated beneficiary or (2) a period not extending
beyond the life expectancy of the designated beneficiary, the amount
required to be distributed for each calendar year, beginning with
distributions for the first distribution calendar year, must at least
equal the quotient obtained by dividing the Participant's benefit by
the applicable life expectancy.
(ii) For calendar years beginning after December 31, 1988, the
amount to be distributed each year, beginning with distributions for
the first distribution calendar year shall not be less than the
quotient obtained by dividing the Participant's benefit by the lesser
of (1) the applicable life expectancy or (2) if the Participant's
spouse is not the designated beneficiary, the applicable divisor
determined from the table set forth in Q&A-4 of section 1.401(a)(9)-2
of the Proposed Regulations. Distributions after the death of the
participant shall be distributed using the applicable life expectancy
in sub-section (iii) above as the relevant divisor without regard to
Proposed Regulations 1.401(a)(9)-2.
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(iii) The minimum distribution required for the Participant's
first distribution calendar year must be made on or before the
Participant's required beginning date. The minimum distribution for
other calendar years, including the minimum distribution for the
distribution calendar year in which the employee's required beginning
date occurs, must be made on or before December 31 of the distribution
calendar year.
(d) If a Participant dies after a distribution has commenced in
accordance with Section 8.3(b) but before his entire interest has been
distributed to him, the remaining portion of such interest shall be distributed
to his Beneficiary at least as rapidly as under the method of distribution in
effect as of the date of his death.
(e) If a Participant shall die before the distribution of his interest
in the Plan has begun, the entire interest of the Participant shall be
distributed by December 31 of the calendar year containing the fifth anniversary
of the death of the Participant, except in the following events:
(i) If any portion of the Participant's interest is payable to
(or for the benefit of) a designated beneficiary over a period not
extending beyond the life expectancy of such beneficiary and such
distributions begin not later than December 31 of the calendar year
immediately following the calendar year in which the Participant died.
(ii) If any portion of the Participant's interest is payable
to (or for the benefit of) the Participant's spouse over a period not
extending beyond the life expectancy of such spouse and such
distributions begin no later than December 31 of the calendar year in
which the Participant would have attained age 70-1/2.
If the Participant has not made a distribution election by the time of
his death, the Participant's designated beneficiary shall elect the method of
distribution no later than the earlier of (1) December 31 of the calendar year
in which distributions would be required to begin under this Article or (2)
December 31 of the calendar year which contains the fifth anniversary of the
date of death of the Participant. If the Participant has no designated
beneficiary, or if the designated beneficiary does not elect a method of
distribution, distribution of the Participant's entire interest shall be
completed by December 31 of the calendar year containing the fifth anniversary
of the Participant's death.
(f) For purposes of this Article, the life expectancy of a Participant
and his spouse may be redetermined but not more frequently than annually. The
life expectancy (or joint and last survivor expectancy) shall be calculated
using the attained age of the Participant (or designated beneficiary) as of the
Participant's (or designated beneficiary's) birthday in the applicable calendar
year reduced by one for each calendar year which has elapsed since the date life
expectancy was first calculated. If life expectancy is being recalculated, the
applicable life expectancy shall be the life expectancy as so recalculated. The
applicable calendar year shall be the first distribution calendar year, and if
life expectancy is being recalculated, such succeeding calendar year. Unless
otherwise elected by the Participant (or his spouse, if applicable) by the time
distributions are
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required to begin, life expectancies shall be recalculated annually. Any such
election not to recalculate shall be irrevocable and shall apply to all
subsequent years. The life expectancy of a nonspouse beneficiary may not be
recalculated.
(g) For purposes of Section 9.3(b) and 9.3(e), any amount paid to a
child shall be treated as if it had been paid to a surviving spouse if such
amount will become payable to the surviving spouse upon such child reaching
majority (or other designated event permitted under regulations).
(h) For distributions beginning before the Participant's death, the
first distribution calendar year is the calendar year immediately preceding the
calendar year which contains the Participant's required beginning date. For
distributions beginning after the Participant's death, the first distribution
calendar year is the calendar year in which distributions are required to begin
pursuant to this Article.
9.4 Required Beginning Dates.
(a) General Rule. The required beginning date of a Participant is the
first day of April of the calendar year following the calendar year in which the
participant attains age 70-1/2.
(b) Transitional rules. The required beginning date of a Participant
who attains age 70- 1/2 before January 1, 1988, shall be determined in
accordance with (1) or (2) below:
(1) Non-5-percent owners. The required beginning date of a
Participant who is not a 5-percent owner is the first day of April of
the calendar year following the calendar year in which the later of
retirement or attainment or age 70-1/2 occurs.
(2) 5-percent owners. The required beginning date of a
Participant who is a 5- percent owner during any year beginning after
December 31, 1989, is the first day of April following the later of:
(i) the calendar year in which the Participant
attains age 70-1/2, or
(ii) the earlier of the calendar year with or within
which ends the Plan Year in which the Participant becomes a
5-percent owner, or the calendar year in which the Participant
retires.
The required beginning date of a Participant who is not a 5-percent
owner who attains age 70-1/2 during 1988 and who has not retired as of January
1, 1989, is April 1, 1990. Commencing November 1, 1997, however, the required
beginning date of such a Participant shall be April 1 of the calendar year
following the later of either: (i) the calendar year in which the Participant
attains age 70-1/2, or (ii) the calendar year in which the Participant retires.
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(c) 5-percent owner. A Participant is treated as a 5-percent owner for
purposes of this section if such Participant is a 5-percent owner as defined in
section 416(i) of the Code (determined in accordance with section 416 but
without regard to whether the plan is top-heavy) at any time during the Plan
Year ending with or within the calendar year in which such owner attains age
66-1/2 or any subsequent Plan Year. Once distributions have begun to a 5-
percent owner under this section, they must continue to be distributed, even if
the Participant ceases to be a 5-percent owner in a subsequent year.
9.5 Form of Payment.
Each Participant's vested interest shall be distributed in a lump sum
payment. Notwithstanding the preceding sentence, but subject to Section 9.3, the
Administrator may not distribute a lump sum when the present value of a
Participant's total Account balances is in excess of $3,500 without the
Participant's consent. This form of payment shall be the normal form of
distribution. Furthermore, however, in the event that the Administrator must
commence distributions with respect to an Employee who has attained age 70-1/2
and is still employed by the Employer, if the Employee does not elect a lump sum
distribution, payments shall be made in installments in such amounts as shall
satisfy the minimum distribution rules of Section 9.3.
9.6 Payments Upon Termination of Plan.
Upon termination of this Plan pursuant to Sections 13.2, 13.4, 13.5 or
13.6, the Administrator shall continue to perform its duties and the Trustee
shall make all payments upon the following terms, conditions and provisions: All
interests of Participants shall immediately become fully vested; the value of
the interests of all Participants shall be determined within 60 days after such
termination, and the Administrator shall have the same powers to direct the
Trustee in making payments as contained in Sections 9.1 and 13.5.
9.7 Distributions Pursuant to Qualified Domestic Relations Orders.
Upon receipt of a domestic relations order, the Administrator shall
notify promptly the Participant and any alternate payee of receipt of the order
and the Plan's procedure for deter mining whether the order is a Qualified
Domestic Relations Order. While the issue of whether a domestic relations order
is a Qualified Domestic Relations Order is being determined, if the benefits
would otherwise be paid, the Administrator shall segregate in a separate account
in the Plan the amounts that would be payable to the alternate payee during such
period if the order were a Qualified Domestic Relations Order. If within 18
months the order is determined to be a Qualified Domestic Relations Order, the
amounts so segregated, along with the interest or investment earnings
attributable thereto shall be paid to the alternate payee. Alternatively, if
within 18 months, it is determined that the order is not a Qualified Domestic
Relations Order or if the issue is still unresolved, the amounts segregated
under this Section 9.6, with the earnings attributable thereto, shall be paid to
the Participant or Beneficiary who would have been entitled to such amounts if
there had been no order. The determination as to whether the order is qualified
shall be applied
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prospectively. Thus, if the Administrator determines that the order is a
Qualified Domestic Relations Order after the 18-month period, the Plan shall not
be liable for payments to the alternative payee for the period before the order
is determined to be a Qualified Domestic Relations Order.
9.8 Cash-Out Distributions
If a Participant receives a distribution of the entire present value of
his vested Account balances under this Plan because of the termination of his
participation in the Plan, the Plan shall disregard a Participant's Service with
respect to which such cash-out distribution shall have been made, in computing
his accrued benefit under the Plan in the event that a Former Participant shall
again become an Employee and become eligible to participate in the Plan. Such a
distribution shall be deemed to be made on termination of participation in the
Plan if it is made not later than the close of the second Plan Year following
the Plan Year in which such termination occurs. The forfeitable portion of a
Participant's accrued benefit shall be restored upon repayment to the Plan by
such former Participant of the full amount of the cash-out distribution,
provided that the former Participant again becomes an Employee. Such repayment
must be made by the Employee not later than the end of the 5-year period
beginning with the date of the distribution. Forfeitures required to be restored
by virtue of such repayment shall be restored from the following sources in the
following order of preference: (i) current forfeitures; (ii) additional employee
stock ownership contributions, as appropriate and as subject to Section 5.6; and
(iii) investment earnings of the Fund. In the event that a Participant's
interest in the Plan is totally forfeitable, a Participant shall be deemed to
have received a distribution of zero upon his termination of Service. In the
event of a return to Service within 5 years of the date of his deemed
distribution, the Participant shall be deemed to have repaid his distribution in
accordance with the rules of this Section 9.8.
9.9 ESOP Distribution Rules.
Notwithstanding any provision of this Article IX to the contrary, the
distribution of a Participant's Employee Stock Ownership Account (unless the
Participant elects otherwise in writing), shall commence as soon as
administratively feasible as of the first Valuation Date coincident with or next
following his death, disability or termination of Service, but not later than 1
year after the close of the Plan Year in which the Participant separates from
Service by reason of the attainment of his Normal Retirement Date, disability,
death or separation from Service. In addition, all distributions hereunder
shall, to the extent that the Participant's Account is invested in Employer
Securities, be made in the form of Employer Securities. Fractional shares,
however, may be distributed in the form of cash.
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9.10 Withholding.
(a) Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this Article IX, a
distributee may elect, at the time and in the manner prescribed by the Plan
Administrator, to have any portion of an "eligible rollover distribution" paid
directly to an "eligible retirement plan" specified by the distributee in a
"direct rollover."
(b) For purposes of this Section 9.10, an "eligible rollover
distribution" is any distribution of all or any portion of the balance to the
credit of the distributee, except that an "eligible rollover distribution" does
not include: any distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made for the life (or life
expectancy) of the distributee or the joint lives (or joint life expectancies)
of the distributee and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent such
distribution is required under section 401(a)(9) of the Code; and the portion of
any distribution that is not includible in gross income (determined without
regard to the exclusion for net unrealized appreciation with respect to Employer
Securities).
(c) For purposes of this Section 9.10, an "eligible retirement plan" is
an individual retirement account described in section 408(a) of the Code, an
individual retirement annuity described in section 408(b) of the Code, an
annuity plan described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts the distributee's eligible
rollover distribution. However, in the case of an "eligible rollover
distribution" to the surviving spouse, an "eligible retirement plan" is an
individual retirement account or individual retirement annuity.
(d) For purposes of this Section 9.10, a distributee includes a
Participant or former Participant. In addition, the Participant's or former
Participant's surviving spouse and the Participant's or former Participant's
spouse or former spouse who is the alternate payee under a qualified domestic
relations order, as defined in section 414(p) of the Code, are "distributees"
with regard to the interest of the spouse or former spouse.
(e) For purposes of this Section 9.10, a "direct rollover" is a payment
by the Plan to the "eligible retirement plan" specified by the distributee.
9.11 Waiver of 30-day Notice.
If a distribution is one to which sections 401(a)(11) and 417 of the
Code do not apply, such distribution may commence less than 30 days after the
notice required under section 1.411(a)-11(c) of the Income Tax Regulations is
given, provided that: (1) the Plan Administrator clearly informs the Participant
that the Participant has a right to a period of at least 30 days after receiving
the notice to consider the decision of whether or not to elect a distribution
(and, if applicable, a
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particular distribution option), and (2) the Participant, after receiving the
notice, affirmatively elects a distribution.
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ARTICLE X
PROVISIONS RELATING TO TOP-HEAVY PLANS
10.1 Top-Heavy Rules to Control.
Anything contained in this Plan to the contrary notwithstanding, if for
any Plan Year the Plan is a top-heavy plan, as determined pursuant to Section
416 of the Code, then the Plan must meet the requirements of this Article X for
such Plan Year.
10.2 Top-Heavy Plan Definitions.
Unless a different meaning is plainly implied by the context, the
following terms as used in this Article X shall have the following meanings:
(a) "Accrued Benefit" shall mean the account balances or accrued
benefits of an Employee, calculated pursuant to Section 10.3.
(b) "Determination Date" shall mean, with respect to any particular
Plan Year of this Plan, the last day of the preceding Plan Year (or, in the case
of the first Plan Year of the Plan, the last day of the first Plan Year). In
addition, the term "Determination Date" shall mean, with respect to any
particular plan year of any plan (other than this Plan) in a Required
Aggregation Group or a Permissive Aggregation Group, the last day of the plan
year of such plan which falls within the same calendar year as the Determination
Date for this Plan.
(c) "Employer" shall mean the Employer (as defined in Section 1.1(q))
and any entity which is (1) a member of a controlled group including such
Employer, while it is a member of such controlled group (within the meaning of
Section 414(b) of the Code), (2) in a group of trades or businesses under common
control with such Employer, while it is under common control (within the meaning
of Section 414(c) of the Code), and (3) a member of an affiliated service group
including such Employer, while it is a member of such affiliated service group
(within the meaning of Section 414(m) of the Code).
(d) "Key Employee" shall mean any Employee or former Employee (or any
Beneficiary of such Employee or former Employee, as the case may be) who, at any
time during the Plan Year or during the 4 immediately preceding Plan Years is
one of the following:
(1) An officer of the Employer who has compensation greater
than 50% of the amount in effect under Code 415(b)(1)(A) for the Plan
Year; provided, however, that no more than 50 Employees (or, if lesser,
the greater of 3 or 10% of the Employees) shall be deemed officers;
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(2) One of the 10 Employees having annual compensation (as
defined in Section 415 of the Code) in excess of the limitation in
effect under Section 415(c)(1)(A) of the Code, and owning (or
considered as owning, within the meaning of Section 318 of the Code)
the largest interests in the Employer;
(3) Any Employee owning (or considered as owning, within the
meaning of Section 318 of the Code) more than 5% of the outstanding
stock of the Employer or stock possessing more than 5% of the total
combined voting power of all stock of the Employer; or
(4) Any Employee having annual compensation (as defined in
Section 415 of the Code) of more than $150,000 and who would be
described in Section 10.2(d)(3) if "1%" were substituted for "5%"
wherever the latter percentage appears.
For purposes of applying Section 318 of the Code to the provisions of
this Section 10.2(d), Section 318(a)(2)(C) of the Code shall be applied by
substituting "5%" for "50%" wherever the latter percentage appears. In addition,
for purposes of this Section 10.2(d), the provisions of Section 414(b), (c) and
(m) shall not apply in determining ownership interests in the Employer. However,
for purposes of determining whether an individual has compensation in excess of
$150,000, or whether an individual is a Key Employee under Section 10.2(d)(1)
and (2), compensation from each entity required to be aggregated under Sections
414(b), (c) and (m) of the Code shall be taken into account. Notwithstanding
anything contained herein to the contrary, all determinations as to whether a
person is or is not a Key Employee shall be resolved by reference to Section 416
of the Code and any rules and regulations promulgated thereunder.
(e) "Non-Key Employee" shall mean any Employee or former Employee (or
any Beneficiary of such Employee or former Employee, as the case may be) who is
not considered to be a Key Employee with respect to this Plan.
(f) "Permissive Aggregation Group" shall mean all plans in the Required
Aggregation Group and any other plans maintained by the Employer which satisfy
Sections 401(a)(4) and 410 of the Code when considered together with the
Required Aggregation Group.
(g) "Required Aggregation Group" shall mean each plan (including any
terminated plan) of the Employer in which a Key Employee is (or in the case of a
terminated plan, had been) a Participant in the Plan Year containing the
Determination Date or any of the 4 preceding Plan Years, and each other plan of
the Employer which enables any plan of the Employer in which a Key Employee is a
Participant to meet the requirement of Sections 401(a)(4) and 410 of the Code.
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10.3 Calculation of Accrued Benefits.
(a) An Employee's Accrued Benefit shall be equal to:
(1) With respect to this Plan or any other defined
contribution plan (other than a defined contribution pension plan) in a
Required Aggregation Group or a Permissive Aggregation Group, the
Employee's account balances under the respective plan, determined as of
the most recent plan valuation date within a 12-month period ending on
the Determination Date, including contributions actually made after the
valuation date but before the Determination Date (and, in the first
plan year of a plan, also including any contributions made after the
Determination Date which are allocated as of a date in the first plan
year).
(2) With respect to any defined contribution pension plan in a
Required Aggregation Group or a Permissive Aggregation Group, the
Employee's account balances under the plan, determined as of the most
recent plan valuation date within a 12-month period ending on the
Determination Date, including contributions which have not actually
been made, but which are due to be made as of the Determination Date.
(3) With respect to any defined benefit plan in a Required
Aggregation Group or a Permissive Aggregation Group, the present value
of the Employee's accrued bene fits under the plan, determined as of
the most recent plan valuation date within a 12- month period ending on
the Determination Date, pursuant to the actuarial assumptions used by
such plan, and calculated as if the Employee terminated Service under
such plan as of the valuation date (except that, in the first plan year
of a plan, a current Participant's estimated Accrued Benefit Plan as of
the Determination Date shall be taken into account).
(4) If any individual has not performed services for the
Employer maintaining the Plan at any time during the 5-year period
ending on the Determination Date, any Accrued Benefit for such
individual shall not be taken into account.
(b) The Accrued Benefit of any Employee shall be further adjusted as
follows:
(1) The Accrued Benefit shall be calculated to include all
amounts attributable to both Employer and Employee contributions, but
shall exclude amounts attributable to voluntary deductible Employee
contributions, if any.
(2) The Accrued Benefit shall be increased by the aggregate
distributions made with respect to an Employee under the plan or plans,
as the case may be, during the 5- year period ending on the
Determination Date.
(3) Rollover and direct plan-to-plan transfers shall be taken
into account as follows:
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(A) If the transfer is initiated by the Employee and
made from a plan maintained by one employer to a plan
maintained by another unrelated employer, the transferring
plan shall continue to count the amount transferred; the
receiving plan shall not count the amount transferred.
(B) If the transfer is not initiated by the Employee
or is made between plans maintained by related employers, the
transferring plan shall no longer count the amount
transferred; the receiving plan shall count the amount
transferred.
(c) If any individual has not performed services for the Employer at
any time during the 5-year period ending on the Determination Date, any accrued
benefit for such individual (and the account of such individual) shall not be
taken into account.
10.4 Determination of Top-Heavy Status.
This Plan shall be considered to be a top-heavy plan for any Plan Year
if, as of the Determination Date, the value of the Accrued Benefits of Key
Employees exceeds 60% of the value of the Accrued Benefits of all eligible
Employees under the Plan. Notwithstanding the foregoing, if the Employer
maintains any other qualified plan, the determination of whether this Plan is
top-heavy shall be made after aggregating all other plans of the Employer in the
Required Aggregation Group and, if desired by the Employer as a means of
avoiding top-heavy status, after aggregating any other plan of the Employer in
the Permissive Aggregation Group. If the required Aggregation Group is
top-heavy, then each plan contained in such group shall be deemed to be
top-heavy, notwithstanding that any particular plan in such group would not
otherwise be deemed to be top-heavy. Conversely, if the Permissive Aggregation
Group is not top-heavy, then no plan contained in such group shall be deemed to
be top-heavy, notwithstanding that any particular plan in such group would
otherwise be deemed to be top-heavy. In no event shall a plan included in a
top-heavy Permissive Aggregation Group be deemed a top-heavy plan unless such
plan is also included in a top-heavy Required Aggregation Group.
10.5 Determination of Super Top-Heavy Status.
The Plan shall be considered to be a super top-heavy plan if, as of the
Determination Date, the Plan would meet the test specified in Section 10.4 above
for classification as a top-heavy plan, except that "90%" shall be substituted
for "60%" whenever the latter percentage appears.
10.6 Minimum Contribution.
(a) For any year in which the Plan is top-heavy, each Non-Key Employee
who has met the age and service requirements, if any, contained in the Plan,
shall be entitled to a minimum contribution (which may include forfeitures
otherwise allocable) equal to a percentage of such Non-Key Employee's
compensation (as defined in Section 415 of the Code) as follows:
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(1) If the Non-Key Employee is not covered by a defined
benefit plan maintained by the Employer, then the minimum contribution
under this Plan shall be 3% of such Non-Key Employee's compensation.
(2) If the Non-Key Employee is covered by a defined benefit
plan maintained by the Employer, then the minimum contribution under
this Plan shall be 5% of such Non-Key Employee's compensation.
(b) Notwithstanding the foregoing, the minimum contribution otherwise
allocable to a Non-Key Employee under this Plan shall be reduced in the
following circumstances:
(1) The percentage minimum contribution required under this
Plan shall in no event exceed the percentage contribution made for the
Key Employee for whom such percentage is the highest for the Plan Year
after taking into account contributions under other defined
contribution plans in this Plan's Required Aggregation Group; provided,
however, that this Section 10.7(b)(1) shall not apply if this Plan is
included in a Required Aggregation Group and this Plan enables a
defined benefit plan in such Required Aggregation Group to meet the
requirements of Section 401(a)(4) or 410 of the Code.
(2) No minimum contribution shall be required (or the minimum
contribution shall be reduced, as the case may be) for a Non-Key
Employee under this Plan for any Plan Year if the Employer maintains
another qualified plan under which a minimum benefit or contribution is
being accrued or made on account of such Plan Year, in whole or in
part, on behalf of the Non-Key Employee, in accordance with Section
416(c) of the Code.
(c) For purposes of this Section 10.6, there shall be disregarded (1)
any Employer contributions attributable to a salary reduction or similar
arrangement, or (2) any Employer contributions to or any benefits under Chapter
21 of the Code (relating to the Federal Insurance Contributions Act), Title II
of the Social Security Act, or any other federal or state law.
(d) For purposes of this Section 10.6, minimum contributions shall be
required to be made on behalf of only those Non-Key Employees, as described in
Section 10.7(a), who have not terminated Service as of the last day of the Plan
Year. If a Non-Key Employee is otherwise entitled to receive a minimum
contribution pursuant to this Section 10.6(d), the fact that such Non-Key
Employee failed to complete 1,000 Hours of Service or failed to make any
mandatory or elective contributions under this Plan, if any are so required,
shall not preclude him from receiving such minimum contribution.
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10.7 Vesting.
(a) For any Plan Year in which the Plan is a top-heavy plan, a
Participant's Employer account shall continue to vest according to the following
schedule:
Years of Service Completed Percentage Vested
-------------------------- ------------------
Less than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
(b) For purposes of Section 10.7(a), the term "year of service" shall
have the same meaning as set forth in Section 1.1(kk), as modified by Section
3.2
(c) If for any Plan Year the Plan becomes top-heavy and the vesting
schedule set forth in Section 10.7(a) becomes effective, then, even if the Plan
ceases to be top-heavy in any subsequent Plan Year, the vesting schedule set
forth in Section 10.7(a) shall remain applicable with respect to any Participant
who has completed 3 Years of Service.
10.8 Maximum Benefit Limitation.
For any Plan Year in which the Plan is a top-heavy plan, Section
5.6(d)(1)(B)(i) and Section 5.6(d)(2)(B)(i)shall be read by substituting "1.0"
for "1.25" wherever the latter figure appears; provided, however, that such
substitution shall not have the effect of reducing any benefit accrued under a
defined benefit plan prior to the first day of the plan year in which this
Section 10.8 becomes applicable.
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ARTICLE XI
ADMINISTRATION
11.1 Appointment of Administrator.
This Plan shall be administered by a committee consisting of up to 5
persons, whether or not Employees or Participants, who shall be appointed from
time to time by the Board of Directors to serve at its pleasure. The Sponsor may
require that each person appointed as an Administrator shall signify his
acceptance by filing an acceptance with the Sponsor. The term "Administrator" as
used in this Plan shall refer to the members of the committee, either
individually or collectively, as appropriate. In the event that the Sponsor
shall elect not to appoint any individuals to constitute a committee to
administer the Plan, the Sponsor shall serve as the Administrator hereunder.
11.2 Resignation or Removal of Administrator.
An Administrator shall have the right to resign at any time by giving
notice in writing, mailed or delivered to the Employer and to the Trustee. Any
Administrator who was an employee of the Employer at the time of his appointment
shall be deemed to have resigned as an Administrator upon his termination of
Service. The Board of Directors may, in its discretion, remove any Administrator
with or without cause, by giving notice in writing, mailed or delivered to the
Administrator and to the Trustee.
11.3 Appointment of Successors: Terms of Office, Etc.
Upon the death, resignation or removal of an Administrator, the
Employer may appoint, by Board of Directors' resolution, a successor or
successors. Notice of termination of an Administrator and notice of appointment
of a successor shall be made by the Employer in writing, with copies mailed or
delivered to the Trustee, and the successor shall have all the rights and
privileges and all of the duties and obligations of the predecessor.
11.4 Powers and Duties of Administrator.
The Administrator shall have the following duties and responsibilities
in connection with the administration of this Plan:
(a) To promulgate and enforce such rules, regulations and procedures as
shall be proper for the efficient administration of the Plan, such rules,
regulations and procedures to apply uniformly to all Employees, Participants and
Beneficiaries;
(b) To determine all questions arising in the administration,
interpretation and application of the Plan, including questions of eligibility
and of the status and rights of Partici pants, Beneficiaries and any other
persons hereunder;
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(c) To decide any dispute arising hereunder strictly in accordance with
the terms of the Plan; provided, however, that no Administrator shall
participate in any matter involving any questions relating solely to his own
participation or benefits under this Plan;
(d) To advise the Employer and the Trustee regarding the known future
needs for funds to be available for distribution in order that the Trustee may
establish investments accordingly;
(e) To correct defects, supply omissions and reconcile inconsistencies
to the extent necessary to effectuate the Plan;
(f) To advise the Employer of the maximum deductible contribution to
the Plan for each fiscal year;
(g) To direct the Trustee concerning all payments which shall be made
out of the Fund pursuant to the provisions of this Plan;
(h) To advise the Trustee on all terminations of Service by
Participants, unless the Employer has so notified the Trustee;
(i) To confer with the Trustee on the settling of any claims against
the Fund;
(j) To make recommendations to the Board of Directors with respect to
proposed amendments to the Plan and the Trust Agreement;
(k) To file all reports with government agencies, Employees and other
parties as may be required by law, whether such reports are initially the
obligation of the Employer, the Plan or the Trustee; and
(l) To have all such other powers as may be necessary to discharge its
duties hereunder.
Reasonable discretion is granted to the Administrator to affect the
benefits, rights and privileges of Participants, Beneficiaries or other persons
affected by this Plan. The Administrator shall exercise reasonable discretion
under the terms of this Plan and shall administer the Plan strictly in
accordance with its terms, such administration to be exercised uniformly so that
all persons similarly situated shall be similarly treated.
11.5 Action by Administrator.
The Administrator may elect a Chairman and Secretary from among its
members and may adopt rules for the conduct of its business. A majority of the
members then serving shall constitute a quorum for the transaction of business.
All resolutions or other action taken by the Administrator shall be by vote of a
majority of those present at such meeting and entitled to vote. Resolutions may
be adopted or other action taken without a meeting upon written consent signed
by at least a
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majority of the members. All documents, instruments, orders, requests,
directions, instructions and other papers shall be executed on behalf of the
Administrator by either the Chairman or the Secretary of the Administrator, if
any, or by any member or agent of the Administrator duly authorized to act on
the Administrator's behalf.
11.6 Participation by Administrators.
No Administrator shall be precluded from becoming a Participant in the
Plan if he would be otherwise eligible, but he shall not be entitled to vote or
act upon matters or to sign any documents relating specifically to his own
participation under the Plan, except when such matters or documents relate to
benefits generally. If this disqualification results in the lack of a quorum,
then the Board of Directors shall appoint a sufficient number of temporary
Administrators who shall serve for the sole purpose of determining such a
question.
11.7 Agents.
The Administrator may employ agents and provide for such clerical,
legal, actuarial, accounting, medical, advisory or other services as it deems
necessary to perform its duties under this Plan. The cost of such services and
all other expenses incurred by the Administrator in connection with the
administration of the Plan shall be paid from the Fund, unless paid by the
Employer.
11.8 Allocation of Duties.
The duties, powers and responsibilities reserved to the Administrator
may be allocated among its members so long as such allocation is pursuant to
written procedures adopted by the Administrator, in which case, except as may be
required by the Act, no Administrator shall have any liability, with respect to
any duties, powers or responsibilities not allocated to him, for the acts of
omissions of any other Administrator.
11.9 Delegation of Duties.
The Administrator may delegate any of its duties to other employees of
the Employer, to the Trustee with its consent, or to any other person or firm,
provided that the Administrator shall prudently choose such agents and rely in
good faith on their actions.
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11.10 Administrator's Action Conclusive.
Any action on matters within the authority of the Administrator shall
be final and conclusive except as provided in Article XII.
11.11 Compensation and Expenses of Administrator.
No Administrator who is receiving compensation from the Employer as a
full-time employee, as a director or agent, shall be entitled to receive any
compensation or fee for his services hereunder. Any other Administrator shall be
entitled to receive such reasonable compensation for his services as an
Administrator hereunder as may be mutually agreed upon between the Employer and
such Administrator. Any such compensation shall be paid from the Fund, unless
paid by the Employer. Each Administrator shall be entitled to reimbursement by
the Employer for any reasonable and necessary expenditures incurred in the
discharge of his duties.
11.12 Records and Reports.
The Administrator shall maintain adequate records of its actions and
proceedings in administering this Plan and shall file all reports and take all
other actions as it deems appropriate in order to comply with the Act, the Code
and governmental regulations issued thereunder.
11.13 Reports of Fund Open to Participants.
The Administrator shall keep on file, in such form as it shall deem
convenient and proper, all annual reports of the Fund received by the
Administrator from the Trustee, and a statement of each Participant's interest
in the Fund as from time to time determined. The annual reports of the Fund and
the statement of his own interest in the Fund, as well as a complete copy of the
Plan and the Trust Agreement and copies of annual reports to the Internal
Revenue Service, shall be made available by the Administrator to the Employer
for examination by each Participant during reasonable hours at the office of the
Employer, provided, however, that the statement of a Participant's interest
shall not be made available for examination by any other Participant.
11.14 Named Fiduciary.
The Administrator is the named fiduciary for purposes of the Act and
shall be the designated agent for receipt of service of process on behalf of the
Plan. It shall use ordinary care and diligence in the performance of its duties
under this Plan. Nothing in this Plan shall preclude the Employer from
indemnifying the Administrator for all actions under this Plan, or from
purchasing liability insurance to protect it with respect to its duties under
this Plan.
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11.15 Information from Employer.
The Employer shall promptly furnish all necessary information to the
Administrator to permit it to perform its duties under this Plan. The
Administrator shall be entitled to rely upon the accuracy and completeness of
all information furnished to it by the Employer, unless it knows or should have
known that such information is erroneous.
11.16 Reservation of Rights by Employer.
Where rights are reserved in this Plan to the Employer, such rights
shall be exercised only by action of the Board of Directors, except where the
Board of Directors, by written resolution, delegates any such rights to one or
more officers of the Employer or to the Administrator. Subject to the rights
reserved to the Board of Directors acting on behalf of the Employer as set forth
in this Plan, no member of the Board of Directors shall have any duties or
responsibilities under this Plan, except to the extent he shall be acting in the
capacity of an Administrator or Trustee.
11.17 Liability and Indemnification.
(a) The Administrator shall perform all duties required of it under
this Plan in a prudent manner. To the extent not prohibited by the Act, the
Administrator shall not be responsible in any way for any action or omission of
the Employer, the Trustee or any other fiduciaries in the performance of their
duties and obligations set forth in this Plan and in the Trust Agreement. To the
extent not prohibited by the Act, the Administrator shall also not be
responsible for any act or omission of any of its agents, or with respect to
reliance upon advice of its counsel (whether or not such counsel is also counsel
to the Employer or the Trustee), provided that such agents or counsel were
prudently chosen by the Administrator and that the Administrator relied in good
faith upon the action of such agent or the advice of such counsel.
(b) The Administrator shall not be relieved from responsibility or
liability for any responsibility, obligation or duty imposed upon it under this
Plan or under the Act. Except for its own gross negligence, willful misconduct
or willful breach of the terms of this Plan, the Administrator shall be
indemnified and held harmless by the Employer against liability or losses
occurring by reason of any act or omission of the Administrator to the extent
that such indemnification does not violate the Act or any other federal or state
laws.
11.18 Service as Trustee and Administrator.
Nothing in this Plan shall prevent one or more Trustees from serving as
Administrator under this Plan.
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<PAGE>
ARTICLE XII
CLAIMS PROCEDURE
12.1 Notice of Denial.
If a Participant or his Beneficiary is denied any benefits under this
Plan, either in whole or in part, the Administrator shall advise the claimant in
writing of the amount of his benefit, if any, and the specific reasons for the
denial. The Administrator shall also furnish the claimant at that time with a
written notice containing:
(a) A specific reference to pertinent Plan provisions;
(b) A description of any additional material or information necessary
for the claimant to perfect his claim, if possible, and an explanation of why
such material or informa tion is needed; and
(c) An explanation of the Plan's claim review procedure.
12.2 Right to Reconsideration.
Within 60 days of receipt of the information described in 12.1 above,
the claimant shall, if he desires further review, file a written request for
reconsideration with the Administrator.
12.3 Review of Documents.
So long as the claimant's request for review is pending (including the
60-day period described in Section 12.2 above), the claimant or his duly
authorized representative may review pertinent Plan documents and the Trust
Agreement (and any pertinent related documents) and may submit issues and
comments in writing to the Administrator.
12.4 Decision by Administrator.
A final and binding decision shall be made by the Administrator within
60 days of the filing by the claimant of his request for reconsideration;
provided, however, that if the Admin istrator feels that a hearing with the
claimant or his representative present is necessary or desirable, this period
shall be extended an additional 60 days.
12.5 Notice by Administrator.
The Administrator's decision shall be conveyed to the claimant in
writing and shall include specific reasons for the decision, written in a manner
calculated to be understood by the claimant, with specific references to the
pertinent Plan provisions on which the decision is based.
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<PAGE>
ARTICLE XIII
AMENDMENTS, TERMINATION AND MERGER
13.1 Amendments.
The Employer reserves the right at any time and from time to time, and
retroactively if deemed necessary or appropriate by it, to the extent
permissible under law, to conform with governmental regulations or other
policies, to amend in whole or in part any or all of the provisions of this
Plan, provided that:
(a) No amendment shall make it possible for any part of the Fund to be
used for, or diverted to, purposes other than for the exclusive benefit of
Participants or their Beneficiaries under the Trust Agreement, except to the
extent provided in Section 4.4;
(b) No amendment may, directly or indirectly, reduce the vested portion
of any Participant's interest as of the effective date of the amendment or
change the vesting schedule with respect to the future accrual of Employer
contributions for any Participants unless each Participant with 3 or more Years
of Service with the Employer is permitted to elect to have the vesting schedule
in effect before the amendment used to determine his vested benefit; and
(c) No amendment may eliminate an optional form of benefit.
(d) No amendment may increase the duties of the Trustee without its
consent.
(e) No amendment that shall change any of the following types of
provisions shall be made more than once every 6 months, other than to comport
with changes in the Code, the Act or the regulations thereunder: (i) any
provision stating the amount and price of Employer Securities to be awarded to
designated officers and directors or categories of officers and directors; (ii)
any provisions specifying the timing of awards or allocations to officers and
directors; (iii) any provision setting forth a formula that determines the
amount, price and timing of allocations or awards, using objective criteria such
as earnings of the issuer, value of the Employer Securities, Years of Service,
job classification and Compensation levels.
Amendments may be made in the form of Board of Directors' resolutions
or separate written document. Copies of all amendments shall be delivered to the
Trustee.
13.2 Consolidation, Merger or Other Transactions of Employer.
Nothing in this Plan shall prevent the consolidation, merger,
reorganization or liquidation of the Employer, or prevent the sale by Employer
of any or all of its property. Any successor corporation or other entity formed
and resulting from any such transaction shall have the right to become a party
to this Plan by adopting the same by resolution and by appointing a new Trustee
as
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<PAGE>
though the Trustee had resigned in accordance with the Trust Agreement, and by
executing a proper supplemental agreement with the Trustee. If, within 180 days
from the effective date of such transaction, such new entity does not become a
party to this Plan as above provided, this Plan shall automatically be
terminated and the Trustee shall make payments to the persons entitled thereto
in accordance with Section 9.5.
13.3 Consolidation or Merger of Trust.
In the event of any merger or consolidation of the Fund with, or
transfer in whole or in part of the assets and liabilities of the Fund to,
another trust fund held under any other plan of deferred compensation maintained
or to be established for the benefit of all or some of the Participants of this
Plan, the assets of the Fund applicable to such Participants shall be
transferred to the other trust fund only if:
(a) Each Participant would receive a benefit under such successor trust
fund immediately after the merger, consolidation or transfer which is equal to
or greater than the benefit he would have been entitled to receive immediately
before the merger, consolidation or transfer (determined as if this Plan and
such transferee trust fund had then terminated);
(b) Resolutions of the Board of Directors under this Plan, or of any
new or successor employer of the affected Participants, shall authorize such
transfer of assets, and, in the case of the new or successor employer of the
affected Participants, its resolutions shall include an assumption of
liabilities with respect to such Participants' inclusion in the new employer's
plan; and
(c) Such other plan and trust are qualified under Sections 401(a) and
501(a) of the Code.
13.4 Bankruptcy or Insolvency of Employer.
In the event of (a) the Employer's legal dissolution or liquidation by
any procedure other than a consolidation or merger, (b) the Employer's
receivership, insolvency, or cessation of its business as a going concern, or
(c) the commencement of any proceeding by or against the Employer under the
federal bankruptcy laws, and similar federal or state statute, or any federal or
state statute or rule providing for the relief of debtors, compensation of
creditors, arrangement, receivership, liquidation or any similar event which is
not dismissed within 30 days, this Plan shall terminate automatically on such
date (provided, however, that if a proceeding is brought against the Employer
for reorganization under Chapter 11 of the United States Bankruptcy Code or any
similar federal or state statute, then this Plan shall terminate automatically
if and when said proceeding results in a liquidation of the Employer, or the
approval of any Plan providing therefor, or the proceeding is converted to a
case under Chapter 7 of the Bankruptcy Code or any similar conversion to a
liquidation proceeding under federal or state law including, but not limited to,
a receivership proceeding). In the event of any such termination as provided in
the foregoing
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<PAGE>
sentence, the Trustee shall make payments to the persons entitled thereto in
accordance with Section 9.5 hereof.
13.5 Voluntary Termination.
The Board of Directors reserves the right to terminate this Plan at any
time by giving to the Trustee and the Administrator notice in writing of such
desire to terminate. The Plan shall terminate upon the date of receipt of such
notice, the interests of all Participants shall become fully vested, and the
Trustee shall make payments to each Participant or Beneficiary in accordance
with Section 9.5. Alternatively, the Employer, in its discretion, may determine
to continue the Trust Agreement and to continue the maintenance of the Fund, in
which event distributions shall be made upon the contingencies and in all the
circumstances which would have been entitled such distributions on a fully
vested basis, had there been no termination of the Plan.
13.6 Partial Termination of Plan or Permanent Discontinuance of Contributions.
In the event that a partial termination of the Plan shall be deemed to
have occurred, or if the Employer shall discontinue completely its contributions
hereunder, the right of each affected Participant to his interest in the Fund
shall be fully vested. The Employer, in its discretion, shall decide whether to
direct the Trustee to make immediate distribution of such portion of the Fund
assets to the persons entitled thereto or to make distribution in the
circumstances and contingencies which would have controlled such distributions
if there had been no partial termination or discontinuance of contributions.
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<PAGE>
ARTICLE XIV
MISCELLANEOUS
14.1 No Diversion of Funds.
It is the intention of the Employer that it shall be impossible for any
part of the corpus or income of the Fund to be used for, or diverted to,
purposes other than for the exclusive benefit of the Participants or their
Beneficiaries, except to extent that a return of the Employer's contribution is
permitted under Section 4.4.
14.2 Liability Limited.
Neither the Employer nor the Administrator, nor any agents, employees,
officers, directors or shareholders of any of them, nor the Trustee, nor any
other person shall have any liability or responsibility with respect to this
Plan, except as expressly provided herein.
14.3 Incapacity.
If the Administrator shall receive evidence satisfactory to it that a
Participant or Beneficiary entitled to receive any benefit under the Plan is, at
the time when such benefit becomes payable, a minor, or is physically or
mentally incompetent to receive such benefit and to give a valid release
therefor, and that another person or an institution is then maintaining or has
custody of such Participant or Beneficiary, and that no guardian, committee or
other representative of the estate of such Participant or Beneficiary shall have
been duly appointed, the Administrator may direct the Trustee to make payment of
such benefit otherwise payable to such Participant or Beneficiary, to such other
person or institution, including a custodian under a Uniform Gifts to Minor Act,
or corresponding legislation (who shall be an adult, a guardian of the minor or
a trust company), and the release of such other person or institution shall be a
valid and complete discharge for the payment of such benefit.
14.4 Spendthrift Clause.
Except as permitted by the Act or the Code, no benefits or other
amounts payable under the Plan shall be subject in any manner to anticipation,
sale, transfer, assignment, pledge, encumbrance, charge or alienation. If the
Administrator determines that any person entitled to any payments under the Plan
has become insolvent or bankrupt or has attempted to anticipate, sell, transfer,
assign, pledge, encumber, charge or otherwise in any manner alienate any benefit
or other amount payable to him under the Plan or that there is any danger of any
levy or attachment or other court process or encumbrance on the part of any
creditor of such person entitled to payments under the Plan against any benefit
or other accounts payable to such person, the Administrator may, at any time, in
its discretion, direct the Trustee to withhold any or all payments to such
person under the
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<PAGE>
Plan and apply the same for the benefit of such person, in such manner and in
such proportion as the Administrator may deem proper.
14.5 Benefits Limited to Fund.
All contributions by the Employer to the Fund shall be voluntary, and
the Employer shall be under no legal liability to make any such contributions.
The benefits of this Plan shall be only as can be provided by the assets of the
Fund, and no liability for the payment of benefits under the Plan or for any
loss of assets due to any action or inaction of the Trustee shall be imposed
upon the Employer.
14.6 Cooperation of Parties.
All parties to this Plan and any party claiming interest hereunder
agree to perform any and all acts and execute any and all documents and papers
which are necessary and desirable for carrying out this Plan or any of its
provisions.
14.7 Payments Due Missing Persons.
The Administrator shall direct the Trustee to make a reasonable effort
to locate all persons entitled to benefits under the Plan; however,
notwithstanding any provision in the Plan to the contrary, if, after a period of
5 years from the date such benefit shall be due, any such persons entitled to
benefits have not been located, their rights under the Plan shall stand sus
pended. Before this provision becomes operative, the Trustee shall send a
certified letter to all such persons at their last known address advising them
that their interest in benefits under the Plan shall be suspended. Any such
suspended amounts shall be held by the Trustee for a period of 3 additional
years (or a total of 8 years from the time the benefits first became payable),
and thereafter such amounts shall be reallocated among current Participants in
the same manner that a current contribution would be allocated. However, if a
person subsequently makes a valid claim with respect to such reallocated amounts
and any earnings thereon, the Plan earnings or the Employer's contribution to be
allocated for the year in which the claim shall be paid shall be reduced by the
amount of such payment. Any such suspended amounts shall be handled in a manner
not inconsistent with regulations issued by the Internal Revenue Service and
Department of Labor.
14.8 Governing Law.
This Plan has been executed in the State of Illinois and all questions
pertaining to its validity, construction and administration shall be determined
in accordance with the laws of that State, except to the extent superseded by
the Act.
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<PAGE>
14.9 Nonguarantee of Employment.
Nothing contained in this Plan shall be construed as a contract of
employment between the Employer and any Employee, or as a right of any Employee
to be continued in the employ ment of the Employer, or as a limitation of the
right of the Employer to discharge any of its Employees, with or without cause.
14.10 Counsel.
The Trustee and the Administrator may consult with legal counsel, who
may be counsel for the Employer and for the Administrator or the Trustee (as the
case may be), with respect to the meaning or construction of this Plan and the
Trust Agreement, their respective obligations or duties hereunder or with
respect to any action or proceeding or any question of law, and they shall be
fully protected with respect to any action taken or omitted by them in good
faith pursuant to the advice of legal counsel.
IN WITNESS WHEREOF, the Sponsor has caused these presents to be
executed by its duly authorized officers and its corporate seal to be affixed on
this _____ day of March, 1997.
FIRST ROBINSON FINANCIAL
CORPORATION
ATTEST:
____________________________ By _____________________________
Jamie E. McReynolds, Rick L. Catt,
Secretary President
[Corporate Seal]
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EXHIBIT 10.3
FIRST ROBINSON SAVINGS & LOAN, F.A.
DIRECTORS' RETIREMENT PLAN
The Board of Directors of First Robinson Savings & Loan, F.A. has
adopted this Directors' Retirement Plan, effective September 10, 1996, in order
to provide competitive compensation for its Directors, to attract, retain, and
motivate Directors, and to encourage the long-term financial success of the
Association through a performance-based benefit formula.
ARTICLE I
Definitions
The following words and phrases, when used in the Plan with an initial
capital letter, shall have the meanings set forth below unless the context
clearly indicates otherwise.
"Account" shall mean a bookkeeping account maintained by the
Association in the name of the Participant.
"Affiliate" shall mean any "parent corporation" or "subsidiary
corporation" of the Association, as the terms are defined in Section 424(e) and
(f), respectively, of the Code.
"Association" shall mean First Robinson Savings & Loan, F.A., and any
successor to its interest.
"Beneficiary" shall mean the person or persons whom a Participant may
designate as the beneficiary of the Participant's Benefits. A Participant's
election of a Beneficiary shall be made on the Election Form, shall be revocable
by the Participant during his or her lifetime, and shall be effective only upon
its delivery to an executive officer of the Association and acceptance by the
Board (which acceptance shall be presumed unless, within ten business days of
delivery of the Participant's election, the Board provides the Participant with
a written notice detailing the reasons for its rejection).
"Benefits" shall mean, collectively, the benefits that accumulate under
Article II of the Plan.
"Board" shall mean the Board of Directors of the Association.
"Change in Control" shall mean any of the following events:
(a) When the Association is in the "mutual" form of organization, a
"Change in Control" shall be deemed to have occurred if:
(i) as a result of, or in connection with, any exchange offer,
merger or other business combination, sale of assets or contested
election, any combination of the
<PAGE>
foregoing transactions, or any similar transaction, the persons who
were Directors of the Association before such transaction cease to
constitute a majority of the Board of Directors of the Association or
any successor to the Association;
(ii) the Association transfers substantially all of its assets
to another corporation which is not an Affiliate of the Association;
(iii) the Association sells substantially all of the assets of
an Affiliate which accounted for 50% or more of the controlled group's
assets immediately prior to such sale;
(iv) any "person" including a "group", exclusive of the Board
of Directors of the Association or any committee thereof, is or becomes
the "beneficial owner", directly or indirectly, of proxies of the
Association representing twenty-five percent (25%) or more of the
combined voting power of the Association's members; or
(v) the Association is merged or consolidated with another
corporation and, as a result of the merger or consolidation, less than
seventy percent (70%) of the outstanding proxies relating to the
surviving or resulting corporation are given, in the aggregate, by the
former members of the Association.
(b) If the Association shall be in the "stock" form of organization, a
"Change in Control" shall be deemed to have occurred if:
(i) as a result of, or in connection with, any initial public
offering, tender offer or exchange offer, merger or other business
combination, sale of assets or contested election, any combination of
the foregoing transactions, or any similar transaction, the persons who
were Directors of the Association before such transaction cease to
constitute a majority of the Board of Directors of the Association or
any successor to the Association;
(ii) the Association transfers substantially all of its assets
to another corporation which is not an Affiliate of the Association;
(iii) the Association sells substantially all of the assets of
an Affiliate which accounted for 50% or more of the controlled group's
assets immediately prior to such sale;
(iv) any "person" including a "group" is or becomes the
"beneficial owner", directly or indirectly, of securities of the
Association representing twenty-five percent (25%) or more of the
combined voting power of the Association's outstanding securities (with
the terms in quotation marks having the meaning set forth under the
federal securities laws); or
(v) the Association is merged or consolidated with another
corporation and, a result of the merger or consolidation, less than
seventy percent (70%) of the outstanding
<PAGE>
voting securities of the surviving or resulting corporation is owned in
the aggregate by the former stockholders of the Association.
Notwithstanding the foregoing, a "change in Control" shall not be
deemed to occur solely by reason of a transaction in which the Association
converts to the stock form or organization, or creates an independent holding
company in connection therewith. The decision of the Board as to whether a
Change in Control has occurred shall be conclusive and binding.
"Director" shall mean a member of the Board.
"Effective Date" shall mean the date on which the Plan first becomes
effective, as referenced in the opening paragraph of this document.
"Election Form" shall mean the form attached hereto as Exhibit"A".
"Employee" shall mean any person who is employed by the Association.
"Participant" shall mean an individual who serves on the Board at some
time on or after the Effective Date.
"Plan" shall mean this First Robinson Savings & Loan, F.A. Directors'
Retirement Plan.
"Trust Agreement" shall mean that agreement entered into pursuant to
the terms hereof between the Association and the Trustee, and "Trust" means the
trust created thereunder.
"Trustee" shall mean that person(s) or entity appointed by the Board
pursuant to the Trust Agreement to hold legal title to the Plan Assets for the
purposes set forth herein.
ARTICLE II
Credit to Accounts
On the Effective Date. Each Participant who is a Director on the
Effective Date shall have his or her Account credited with an amount equal to
the product of $2,000 and his or her full years of service as a Director.
After the Effective Date. On each January 1st after the Effective Date,
each Participant who is a Director on said date shall have his or her Account
credited with an amount equal to the sum of --
(i) $2,000,
(ii) a discretionary amount (which may be nothing) determined by
the Board in a manner consistent with the Association's
performance-based contributions to its 401k Retirement Savings
Plan, and
<PAGE>
(iii) a rate of return, on any amounts previously credited to the
Participant's Account, equal to the highest rate of interest
paid by the Association on certificates of deposit having a
term of one year or less. Notwithstanding the foregoing, if
the Association has converted to stock form, said rate of
return on the previously credited balances of Accounts shall
equal the dividend-adjusted rate of return on the
Association's common stock (or that of its holding company, if
one exits).
ARTICLE III
Distribution from Accounts; Election Forms
General Rule. Account balances shall be paid in cash, in ten equal
annual installments beginning during the first quarter of the calendar year
which next follows the calendar year in which the Participant ceases to be a
Director for any reason, with any subsequent payments being made by the last day
of the first quarter of each subsequent calendar year until the Participant has
collected the entire value of his or her Account. Notwithstanding the foregoing:
(i) a Participant may elect on his or her Election Form to have his or her
Account paid in a single lump sum distribution, or in annual payments over a
period of less than ten years, and (ii) to the extent required under federal
banking law, the amounts otherwise payable to a Participant shall be reduced to
the extent that on the date of a Participant's termination of employment, either
(I) the present value of his or her Benefits exceeds the limitations that are
set forth in Regulatory Bulletin 27a of the Office of Thrift Supervision, as in
effect on the Effective Date, of (II) such reduction is necessary to avoid
subjecting the Association to liability under Section 280g of the Internal
Revenue code of 1986, as amended.
Death Benefits. If a Participant dies before receiving all Benefits
payable pursuant to the preceding paragraph, then the remaining balance of the
Participant's Account shall be distributed in a lump sum to the Participant's
designated Beneficiary (or estate, in the absence of a validly-named or living
Beneficiary) not later than the first day of the second month following the date
of the Participant's death; provided that a Participant may specify on the
election Form a distribution period of up to 10 years (with payments to be made
in substantially equal annual installments). Beneficiary designations made
pursuant to executed Election Forms shall be revocable during the Participant's
lifetime and a Participant may, by submitting an effective superseding Election
Form at any time and from time to time, prospectively change the designated
Beneficiary and the manner of payment to Beneficiary.
ARTICLE IV
Source of Benefits
General Rule. Benefits shall constitute an unfunded, unsecured promise
by the Association to provide such payments in the future, as and to the extent
such Benefits become
<PAGE>
payable. Benefits shall be paid from the general assets of the Association, and
no person shall, by virtue of this Plan, have any interest in such assets (other
than as an unsecured creditor of the Association). For any fiscal year during
which a Trust is maintained, (i) the Trustee shall inform the Board annually
prior to the commencement of each fiscal year as to the manner in which such
Trust assets shall be invested, and (ii) the Board shall, as soon as practicable
after the end of each fiscal year of the Association, provide the Trustee with a
schedule specifying the amounts payable to each Participant, and the time for
making such payments.
Change in Control. In the event of a Change in Control, the Association
shall contribute to the Trust an amount sufficient to provide the Trust with
assets having an overall value equivalent to the value of the aggregate Account
balances under the Plan.
ARTICLE V
Assignment
Except as otherwise provided by this Plan, it is agreed that neither
the Participant nor his Beneficiary nor any other person or persons shall have
any right to commute, sell, assign, transfer, encumber and pledge or otherwise
convey the right to receive any Benefits hereunder, which Benefits and the
rights thereto are expressly declared to be nontransferabl.e
ARTICLE VI
No Retention of Services
The Benefits payable under this Plan shall be independent of, and in
addition to, any other compensation payable by the Association to a Participant,
whether in the form of fees, bonus, retirement income under employee benefit
plans sponsored or maintained by the Association or otherwise. This Plan shall
not be deemed to constitute a contract of employment between the Association and
any Participant.
ARTICLE VII
Rights of Directors; Termination or Suspension
under Federal Law
The rights of the Directors under this Plan and of their Beneficiaries
(if any) shall be solely those of unsecured creditors of the Association. If the
Participant is removed and/or permanently prohibited from participating in the
conduct of the Association's affairs by an order issued under Sections 8(e)(4)
or (g)(1) of the Federal Deposit Insurance Act ("FDIA") (12 U.S.C. 1818(e)(4) or
(g)(1)), all obligations of the Association under this Plan shall terminate, as
of the effective date of the order, but vested rights of the parties shall not
be affected. If the Association is in default (as defined in Section 3(x)(1) of
FDIA), all obligations under this Plan
<PAGE>
shall terminate as of the date of default; however, this Paragraph shall not
affect the vested rights of the parties.
All obligations under this Plan shall terminate, except to the extent
that continuation of this Plan is necessary for the continued operation of the
Association: (i) by the Director of the Office of Thrift Supervision ("Director
of the OTS"), or his or her designee, at the time that the Federal Deposit
Insurance Corporation (the "FDIC") or the Resolution Trust Corporation enters
into an agreement to provide assistance to or on behalf of the Association under
the authority contained in Section 13(c) of FDIA; or (ii) by the Director of the
OTS, or his or her designee, at the time that the Director of the OTS, or his or
her designee approves a supervisory merger to resolve problems related to
operation of the Association or when the Association is determined by the
Director of the OTS to be in an unsafe or unsound condition. Such action shall
not affect any vested rights of the parties.
If a notice served under Section 8(e)(3) or (g)(1) of the FDIA (12
U.S.C. 1818(e)(3) or (g)(1)) suspends and/or temporarily prohibits the
Participant from participating in the conduct of the Association's affairs, the
Association's obligations under this Plan shall be suspended as of the date of
such service, unless stayed by appropriate proceedings. If the charges in the
notice are dismissed, the Association may in its discretion (i) pay the
Participant all or part of the compensation withheld while its contract
obligations were suspended, and (ii) reinstate (in whole or in part) any of its
obligations which were suspended.
ARTICLE VIII
Reorganization
The Association agrees that it will not merge or consolidate with any
other corporation or organization, or permit its business activities to be taken
over by any other organization, unless and until the succeeding or continuing
corporation or other organization shall expressly assume the rights and
obligations of the Association herein set forth. The Association further agrees
that it will not cease its business activities or terminate its existence, other
than as heretofore set forth in this paragraph, without having made adequate
provision for the fulfillment of its obligation hereunder.
ARTICLE IX
Amendment and Termination
The Board may amend or terminate the Plan at any time, provided that no
such amendment or termination shall, without the written consent of an affected
Participant, alter or impair any vested rights of the Participant under the
Plan.
<PAGE>
ARTICLE X
State Law
This Plan shall be construed and governed in all respects under and by
the laws of the State of Illinois. If any provision of this Plan shall be held
by a court of competent jurisdiction to be invalid or unenforceable, the
remaining provisions hereof shall continue to be fully effective.
ARTICLE XI
Headings; Gender
Headings and subheadings in the Plan are inserted for convenience and
reference only and constitute no part of this Plan. This Plan shall be
construed, where required, so that the masculine gender includes the feminine.
ARTICLE XII
Interpretation of the Plan
The Board shall have sole and absolute discretion to administer,
construe, and interpret the Plan, and the decisions of the Board shall be
conclusive and binding on all affected parties (unless such decisions are
arbitrary and capricious).
ARTICLE XIII
Legal Fees
In the event any dispute shall arise between a Participant and the
Association as to the terms or interpretation of this Plan, whether instituted
by formal legal proceedings or otherwise, including any action taken by a
Director to enforce the terms of this Plan or in defending against any action
taken by the Association, the Association shall reimburse the Director for all
costs and expenses, including reasonable attorneys' fees, arising from such
dispute, proceedings or actions; provided that the Director shall return such
amounts to the Association if he fails to obtain a final judgment by a court of
competent jurisdiction or obtain a settlement of such dispute, proceedings, or
actions substantially in his or her favor. Such reimbursements to a Director
shall be paid within 10 days of the Director furnishing to the Association
written evidence, which may be in the form, among other things, of a cancelled
check or receipt, of any costs or expenses incurred by the Director. Any such
request for reimbursement by a Director shall be made no more frequently than at
30 day intervals.
<PAGE>
ARTICLE XIV
Duration of Plan
Unless terminated earlier in accordance with Article IX, this Plan
shall remain in effect during the term of service of the Participants and until
all Benefits payable hereunder have been made.
<PAGE>
IN WITNESS WHEREOF, the Bank, by its duly authorized officer, has
caused this Agreement to be executed, and its corporate seal affixed, and the
undersigned Trustees have executed this Agreement, this 10th day of September,
1996.
ATTEST: FIRST ROBINSON SAVINGS & LOAN, F.A.
Jamie McReynolds By: /s/ Rick L. Catt
Its President
ATTEST:
Jamie McReynolds /s/ J. Douglas Goodwine
Trustee
ATTEST:
Jamie McReynolds /s/ Scott F. Pulliam
Trustee
ATTEST:
Jamie McReynolds /s/ Willam K. Thomas
Trustee
EXHIBIT 22
SUBSIDIARIES
<PAGE>
EXHIBIT 22
SUBSIDIARIES OF THE REGISTRANT
(Upon the completion of Transaction)
State of
Percentage Incorporation
of or
Parent Subsidiary Ownership Organization
- ------ ---------- --------- -------------
First Robinson Financial First Robinson Savings 100% Federal
Corporation and Loan, F.A.
First Robinson Savings First Robinson Service 100% Illinois
and Loan Association, F.A. Corporation, Inc.
It is contemplated that the financial statements of the Registrant will
be consolidated with First Robinson Savings and Loan, F.A.
EXHIBIT 24.1
CONSENT OF SILVER, FREEDMAN & TAFF, L.L.P.
<PAGE>
[SILVER, FREEDMAN & TAFF, L.L.P.]
CONSENT OF COUNSEL
We consent to the use of our opinion, to the incorporation by reference
of such opinion as an exhibit to the Form S-1 and to the reference to our firm
under the headings "The Conversion - Income Tax Consequences" and "Legal and Tax
Matters" in the Prospectus and proxy statement included in this Form S-1. In
giving this consent, we do not admit that we are within the category of persons
whose consent is required under Section 7 of the Securities Act of 1933, as
amended, or the rules and regulations of the Securities and Exchange Commission
thereunder.
/s/ Silver, Freedman & Taff, L.L.P.
SILVER, FREEDMAN & TAFF, L.L.P.
Washington, D.C.
March 19, 1997
EXHIBIT 24.2
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the use in the OTS Application to Convert on Form
AC and in the SEC Registration Statement on Form S-1 of our report dated
November 15, 1996, relating to the consolidated financial statements of First
Robinson Savings and Loan, F.A. for the three years ended October 31, 1996, and
the use of our name under the caption "Experts" in the Prospectus, which is a
part of the OTS Application and the SEC Registration Statement.
/s/ Larsson, Woodyard & Henson LLP
LARSSON, WOODYARD & HENSON LLP
Paris, Illinois
March 17, 1997
EXHIBIT 24.3
March 19, 1997
Board of Directors
First Robinson Savings and Loan, F.A.
501 East Main Street
Robinson, Illinois 62454
Directors:
We hereby consent to the use of our firm's name in the Form AC
Application for Conversion of First Robinson Savings and Loan, F.A., Robinson,
Illinois, and any amendments thereto, in the Form S-1 Registration Statement of
First Robinson Financial Corporation and any amendments thereto, and in the
Application H-(e)1-S for First Robinson Financial Corporation. We also hereby
consent to the inclusion of, summary of, and references to our Appraisal Report
and our opinion concerning subscription rights in such filings including the
Prospectus of First Robinson Financial Corporation.
Robin L. Fussell
Principal
Conversion Valuation Report
-----------------------
Valued as of March 4, 1997
FIRST ROBINSON SAVINGS AND LOAN, F.A.
Robinson, Illinois
Prepared By:
Ferguson & Company
Suite 550
122 W. John Carpenter Freeway
Irving, TX 75039
972/869-1177
<PAGE>
STATEMENT OF APPRAISER'S INDEPENDENCE
First Robinson Savings and Loan, F.A.
Robinson, Illinois
We are the appraiser for First Robinson Savings and Loan, F.A. ("First
Robinson" or "Association") in connection with its mutual to stock conversion.
We are submitting our independent estimate of the pro forma market value of the
Association's stock to be issued in the conversion. In connection with our
appraisal of the Association's to-be-issued stock, we have received a fee which
was not related to the estimated final value. The estimated pro forma market
value is solely the opinion of our company and it was not unduly influenced by
the Association, its conversion counsel, its selling agent, or any other party
connected with the conversion. We also received a fixed fee for assisting the
Association in connection with the preparation of its business plan to be
submitted with the conversion application.
First Robinson has agreed to indemnify Ferguson & Company under certain
circumstances against liabilities arising out of our services. Specifically, we
are indemnified against liabilities arising from our appraisal except to the
extent such liabilities are determined to have arisen because of our negligence
or willful conduct.
Ferguson & Company
/s/ Robin L. Fussell
Robin L. Fussell
Principal
March 10, 1997
<PAGE>
March 10, 1997
Board of Directors
First Robinson Savings and Loan, F.A.
501 East Main Street
Robinson, Illinois 62454
Dear Directors:
We have completed and hereby provide, as of March 4, 1997, an
independent appraisal of the estimated pro forma market value of First Robinson
Savings and Loan, F.A. ("First Robinson" or the "Association"), Robinson,
Illinois, in connection with the conversion of First Robinson from the mutual to
stock form of organization ("Conversion"). This appraisal report is furnished
pursuant to the regulatory filing of the Association's Application for
Conversion ("Form AC") with the Office of Thrift Supervision ("OTS").
Ferguson & Company ("F&C") is a consulting firm that specializes in
providing financial, economic, and regulatory services to financial
institutions. The background and experience of F&C is presented in Exhibit I. We
believe that, except for the fees we will receive for preparing the appraisal
and assisting with First Robinson's business plan, we are independent. F&C
personnel are prohibited from owning stock in conversion clients for a period of
at least one year after conversion.
In preparing our appraisal, we have reviewed First Robinson's
Application for Approval of Conversion, including the Proxy Statement as filed
with the OTS. We conducted an analysis of First Robinson that included
discussions with Larsson, Woodyard & Henson, LLP, the Association's independent
auditors, and with Silver, Freedman & Taff, L.L.P., the Association's conversion
counsel. In addition, where appropriate, we considered information based on
other available published sources that we believe is reliable; however, we
cannot guarantee the accuracy or completeness of such information.
We also reviewed the economy in First Robinson's primary market area
and compared the Association's financial condition and operating results with
that of selected publicly traded thrift institutions. We reviewed conditions in
the securities markets in general and in the market for thrifts stocks in
particular.
Our appraisal is based on First Robinson's representation that the
information contained in the Form AC and additional evidence furnished to us by
the Association and its independent auditors are truthful, accurate, and
complete. We did not independently verify the financial statements and other
information provided by First Robinson and its auditors, nor did we
independently value the Association's assets or liabilities. The valuation
considers First Robinson only as a going concern and should not be considered an
indication of its liquidation value.
It is our opinion that, as of March 4, 1997, the estimated pro forma
market value of First Robinson was $6,500,000, or 650,000 shares at $10.00 per
share. The resultant valuation range was $5,525,000 at the minimum (552,500
shares at $10.00 per share) to $7,475,000 at the maximum (747,500 shares at
$10.00 per share), based on a range of 15 percent below and above the midpoint
valuation. The supermaximum was $8,596,250 (859,625 shares at $10.00 per share).
Our valuation is not intended, and must not be construed, as a
recommendation of any kind as to the advisability of purchasing shares of common
stock in the conversion. 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 conversion will thereafter be able to sell such
shares at prices related to the foregoing estimate of the Association's pro
forma market value. F&C is not a seller of securities within the meaning of any
federal or state securities laws and any report prepared by F&C shall not be
used as an offer or solicitation with respect to the purchase or sale of any
securities.
<PAGE>
Our opinion is based on circumstances as of the date hereof, including
current conditions in the United States securities markets. Events occurring
after the date hereof, including, but not limited to, changes affecting the
United States securities markets and subsequent results of operations of First
Robinson, could materially affect the assumptions used in preparing this
appraisal.
The valuation reported herein will be updated as provided in the OTS
conversion regulations and guidelines. Any updates will consider, among other
things, any developments or changes in First Robinson's financial performance
and condition, management policies, and current conditions in the equity markets
for thrift shares. Should any such new developments or changes be material, in
our opinion, to the valuation of the shares, appropriate adjustments will be
made to the estimated pro forma market value. The reasons for any such
adjustments will be explained in detail at the time.
Respectfully,
FERGUSON & COMPANY
/s/ Robin L. Fussell
Robin L. Fussell
Principal
<PAGE>
FERGUSON & COMPANY
TABLE OF CONTENTS
First Robinson Savings and Loan, F.A.
Robinson, Illinois
PAGE
----
INTRODUCTION 1
SECTION I. - FINANCIAL CHARACTERISTICS 2
PAST & PROJECTED ECONOMIC CONDITIONS 2
FINANCIAL CONDITION OF INSTITUTION 2
Balance Sheet Trends 2
Asset/Liability Management 2
Income and Expense Trends 3
Regulatory Capital Requirements 3
Lending 3
Nonperforming Assets 3
Classified Assets 3
Loan Loss Allowance 4
Mortgage-Backed Securities and Investments 4
Savings Deposits 4
Borrowings 4
Subsidiaries 4
Legal Proceedings 4
EARNINGS CAPACITY OF THE INSTITUTION 4
Asset-Size-Efficiency of Asset Utilization 5
Intangible Values 5
Effect of Government Regulations 5
Office Facilities 5
SECTION II - MARKET AREA 1
DEMOGRAPHICS 1
i
<PAGE>
FERGUSON & COMPANY
TABLE OF CONTENTS - CONTINUED
First Robinson Savings and Loan, F.A.
Robinson, Illinois
PAGE
----
SECTION III - COMPARISON WITH PUBLICLY TRADED THRIFTS 1
COMPARATIVE DISCUSSION 1
Selection Criteria 1
Profitability 2
Balance Sheet Characteristics 2
Risk Factors 3
Summary of Financial Comparison 3
FUTURE PLANS 3
SECTION IV - CORRELATION OF MARKET VALUE 1
MARKETABILITY & LIQUIDITY OF STOCK TO BE ISSUED 1
Financial Aspects 1
Market Area 2
Management 2
Dividends 3
Liquidity 3
Thrift Equity Market Conditions 3
ILLINOIS ACQUISITIONS 4
EFFECT OF INTEREST RATES ON THRIFT STOCK 4
Adjustments Conclusion 6
Valuation Approach 6
Conversion to Bank and Comparison to Banks 7
Valuation Conclusion 7
ii
<PAGE>
FERGUSON & COMPANY
TABLE OF CONTENTS - CONTINUED
First Robinson Savings and Loan, F.A.
Robinson, Illinois
TABLE
NUMBER TABLE TITLE PAGE
- ------ ----------- ----
SECTION I - FINANCIAL CHARACTERISTICS
1 Selected Financial Data 6
2 Selected Financial Ratios 7
3 GAP Analysis 8
4 Interest Rate Shock 9
5 Capital Compliance 10
6 Loan Portfolio Composition 11
7 Loan Maturities 12
8 Loan Origination, Purchase, and Repayment Activity 13
9 Average Balances, Rates, and Yields 14
10 Rate/Volume Analysis 16
11 Loan Delinquencies at December 31, 1996 17
12 Non-Performing Assets 18
13 Analysis of the Allowance for Loan Losses 19
14 Allocation of the Allowance for Loan Losses 20
15 Investments 21
16 Mortgage-Backed Securities Maturities 22
17 Savings Deposit Detail 23
18 Certificates of Deposit Maturities 24
19 Savings Flows 25
20 Offices 26
SECTION II - MARKET AREA
1 Demographic Trends 3
2 Percent Employment by Industry 4
3 Market Area Deposits 5
SECTION III - COMPARISON WITH PUBLICLY
TRADED THRIFTS
1 Comparatives General 4
2 Key Financial Indicators 5
3 Pro Forma Comparisons 6
iii
<PAGE>
FERGUSON & COMPANY
TABLE OF CONTENTS - CONTINUED
First Robinson Savings and Loan, F.A.
Robinson, Illinois
TABLE
NUMBER TABLE TITLE PAGE
- ------- ----------- ----
SECTION IV - CORRELATION OF MARKET VALUE
1 Appraisal Earnings Adjustments 2
2 Illinois Acquisitions 8
3 Recent Conversions 10
4.a Comparison of Pricing Ratios 13
4.b Comparison of Pricing Ratios - Bank Related 14
FIGURE
NUMBER LIST OF FIGURES PAGE
- ------- --------------- ----
SECTION IV - CORRELATION OF MARKET VALUE
1 SNL Index 15
2 Selected Interest Rates 16
EXHIBIT TITLE
-------------
Exhibit I - Ferguson & Company Qualifications
Exhibit II - Selected Region, State, and Comparatives Information
Exhibit III - First Robinson Savings and Loan Association, F.A. TAFS Report
Exhibit IV - Comparative Group TAFS and Bank Source Reports
Exhibit V - Selected Publicly Traded Thrifts
Exhibit VI - Comparative Group Selection
Exhibit VII - Pro Forma Calculations
Pro Forma Assumptions
Pro Forma Effect of Conversion Proceeds At the Minimum of the Range
Pro Forma Effect of Conversion Proceeds At the Midpoint of the Range
Pro Forma Effect of Conversion Proceeds At the Maximum of the Range
Pro Forma Effect of Conversion Proceeds At the SuperMax of the Range
Pro Forma Analysis Sheet
Exhibit VIII - Pink Sheet Banks
Exhibit IX - Other Thrifts Converting to Stock and Commercial Bank
iv
<PAGE>
SECTION I
FINANCIAL CHARACTERISTICS
<PAGE>
FERGUSON & COMPANY Section I.
- ------------------ ----------
INTRODUCTION
First Robinson Savings and Loan, F.A. ("First Robinson" or
"Association") is a federally chartered, federally insured mutual savings and
loan association headquartered in Robinson (Crawford County), Illinois. It was
chartered in 1883 as Crawford Building & Loan Association. It joined the FHLB
system in 1933 and obtained federal insurance of accounts in 1954. It adopted a
federal charter and its current name in 1990. In November 1996, it adopted a
plan to convert to a stock savings and loan association, via a standard mutual
to stock conversion.
At December 31, 1996, First Robinson had total assets of $67.5 million,
loans of $57.0 million, mortgage-backed securities of $3.9 million,
interest-bearing deposits in other banks of $2.0 million, deposits of $59.6
million, borrowings of $2.5 million, and net worth of $4.7 million, or 7.0% of
assets.
The Association has three offices, which are located in Robinson,
Palestine, and Oblong (all in Crawford County), Illinois. Illinois is in the
midwestern portion of the United States. Crawford County is located in the
southeastern portion of Illinois.
First Robinson is a traditional thrift in transition to a commercial
bank. It invests primarily in (1) 1-4 family loans, (2) consumer loans, (3)
commercial business loans, (4) mortgage backed securities, and (5) temporary
cash investments. It is funded principally by savings deposits and existing net
worth. It has utilized minor amounts of borrowings recently.
The Association offers a full spectrum of loan products to accommodate
its customer base and single family loans dominate the Association's loan
portfolio. In recent years, First Robinson has emphasized consumer and
commercial business lending. At December 31, 1996, loans on 1-4 family dwellings
made up 41.2% of total assets and 48.3% of the loan portfolio. Consumer loans
were 20.9% of the loan portfolio and commercial business loans were 11.8% of the
loan portfolio. Mortgage backed securities made up 5.8% of total assets. Cash
and investment securities made up 3.0% of First Robinson's assets at December
31, 1996.
First Robinson had $326,000 in non-performing assets at December 31,
1996, as compared to $389,000 at October 31, 1996, and $36,000 at October 31,
1995.
Savings deposits increased $19.7 million during the period from October
31, 1992, to December 31, 1996, a compound annual growth rate of 10.10%. Savings
increased $2.2 million (6.04%) in 1994, increased $10.2 million (26.00%) in
1995, increased $7.3 million (14.75%) in 1996, and increased $3.0 million
(5.21%) in the two months ended December 31, 1996. First Robinson has not relied
extensively on borrowings during recent years. It had $1.5 million in borrowings
at October 31, 1996, and $2.5 million in borrowings at December 31, 1996.
The Association's capital to assets ratio has declined during the
period of four years and two months ending December 31, 1996. Equity capital, as
a percentage of assets, has decreased from 8.91% at October 31, 1992, to 7.03%
at December 31, 1996. The compound annual asset growth rate was 10.84% during
the period, while the compound annual growth rate for equity was only 9.09%.
First Robinson's profitability, as measured by return on average assets
("ROAA"), has been at or below its peer group average of thrifts filing TFR's
with the OTS, consisting of OTS supervised thrifts with assets between $25
million and $50 million for 1993 and 1994, and thrifts with assets between $50
million and $100 million for 1995 and 1996. For the years ending December 31,
1993, 1994, and 1995, and the nine months ended September 30, 1996, First
Robinson ranked in the 52nd, 55th, 49th, and 26th percentile, respectively, in
ROAA, based on information derived from the TAFS thrift database published by
Sheshunoff Information Services Inc. (See Exhibit III, page 2). In return on
equity for the same periods, First Robinson ranked in the 44th, 57th, 62nd, and
26th percentile, respectively.
1
<PAGE>
I. FINANCIAL CHARACTERISTICS
PAST & PROJECTED ECONOMIC CONDITIONS
Fluctuations in thrift earnings in recent years have occurred within
the time frames as a result of changing temporary trends in interest rates and
other economic factors. However, the year-to-year results have been upward while
the general trends in the thrift industry have been improving as interest rates
declined. Interest rates began a general upward movement during late 1993,
followed by a decline in interest margins and profitability. Rates began a
general decline in mid 1995 and then leveled off on the short end and increased
on the long end. First Robinson enjoyed its best spread for the year ended
October 31, 1993, when its spread for the period was 3.79%. It declined 19 basis
points ("bp") in 1994, 8 bp in 1995, and 3 bp in 1996, before increasing 10 bp
for the two month period ending December 31, 1996.
The thrift industry generally is better equipped to cope with changing
interest rates than it was in the past, and investors have recognized the
demonstrated ability of the thrift industry to maintain interest margins in
spite of rising interest rates. However, rate increases and the shortening of
the time elapsed between increases during 1994 placed pressure on portfolio
managers to shorten maturities, which negatively impacts the future earnings of
financial institutions.
FINANCIAL CONDITION OF INSTITUTION
Balance Sheet Trends
As Table I.1 shows, First Robinson experienced healthy growth in assets
during the period of two years and two months ending December 31, 1996. Assets
increased $23.7 million, or 54.11% during the period. Loans increased $22.9
million, or 67.2%. Savings deposits increased by $20.4 million, or 52.12%.
Equity increased $635 thousand, or 15.45%.
Asset/Liability Management
Managing interest rate risk is a major component of the strategy used
in operating a thrift. Most of a thrift's interest earning assets are long-term,
while most of the interest bearing liabilities have short to intermediate terms
to contractual maturity. To compensate, asset/liability management techniques
include (1) making long term loans with interest rates that adjust to market
periodically, (2) investing in assets with shorter terms to maturity, (3)
lengthening the terms to maturities of savings deposits, and (4) seeking to
employ any combination of the aforementioned techniques artificially through the
use of synthetic hedge instruments. Table I.3 shows the gap analysis of First
Robinson's interest earning assets and interest bearing liabilities at September
30, 1996. It shows that, within one year of September 30, 1996, First Robinson
has a negative gap to interest bearing liabilities of 38.75% and a negative gap
to total assets of 26.75%. First Robinson has a negative cumulative gap to
assets at the end of three years of 14.65% and a negative gap of 7.51% at the
end of five years. Table I.4 provides rate shock information at varying levels
of interest rate change. The Association has some exposure to interest rate
increases, but its exposure will be further mitigated through the equity raised
in the conversion.
First Robinson's basic approach to interest rate risk management has
been to emphasize adjustable mortgage loans, short and intermediate term
consumer and commercial loans, and adjustable commercial loans. First Robinson
currently is not utilizing synthetic hedge instruments and has not used
borrowings extensively in recent years. First Robinson's business plan calls for
a continuation of these strategies.
2
<PAGE>
Income and Expense Trends
First Robinson was profitable for the two fiscal years and two months
ending December 31, 1996. Fluctuations in income over the period have resulted
principally from (1) changes in non-interest expense, principally the SAIF
assessment of approximately $281,000 in 1996; and (2) significant additions to
the loan loss allowance in 1996.
Net interest income increased in 1995 and 1996 principally as a result
of growth.
Regulatory Capital Requirements
As Table I.5 demonstrates, First Robinson meets all regulatory capital
requirements, and meets the regulatory definition of a "Well Capitalized"
institution. Moreover, the additional capital raised in the stock conversion
will add to the existing capital cushion.
Lending
Table I.6 provides an analysis of the Association's loan portfolio by
type of loan and security. This analysis shows that, from October 31, 1994,
through December 31, 1996, First Robinson's loan composition has been dominated
by 1-4 family dwelling loans. The portfolio has been shifting, however, from 1-4
family loans to consumer and commercial business loans. Table I.7 provides
information on loan maturities and repricing opportunities at December 31, 1996.
The schedule shows that, at that date, approximately 85% of the portfolio was
scheduled to mature or reprice within five years.
Table I.8 provides information with respect to loan originations and
repayments. It indicates the years ended October 31, 1996 and 1995 were good
growth years and the October 31, 1997 year has started out well.
Table I.9 provides rates, yields, and average balances for each of the
three years ended October 31, 1996 and the two months ended December 31, 1996.
Interest rates earned on interest-earning assets increased from 7.53% in 1994 to
8.21% in 1995, 8.58% in 1996, and 8.74% for the two months ended December 31,
1996. Interest rates paid on interest-bearing liabilities increased from 3.93%
in 1994 to 4.69% in 1995, 5.09% in 1996, and 5.15% for the two months ended
December 31, 1996. First Robinson's spread decreased from 3.60% in 1994 to 3.52%
in 1995, 3.48% in 1996, and increased to 3.59% for the two months ended December
31, 1996.
Table I.10 provides a rate volume analysis, measuring differences in
interest earning assets and interest costing liabilities and the interest rates
thereon during the years ended October 31, 1994 versus 1995, and October 31,
1995, versus 1996, and the period of two months ended December 31, 1995 versus
1996. The table shows that most of the increase in net interest income for the
periods presented resulted from growth in volume, though changing rates was
significant for the 1995 versus 1994 comparison.
Non-performing Assets
As shown in Table I.11, the Association had only $144,000 in loans that
were over 60 days delinquent at December 31, 1996, and $1 thousand in loans over
90 days delinquent. The Association also had $42 thousand in nonaccruing loans
at December 31, 1996. As shown in Table I.12, First Robinson had $326 thousand
in nonperforming assets at December 31, 1996, $389 thousand at October 31, 1996,
and $36 thousand at October 31, 1995.
Classified Assets
First Robinson had $741 thousand in classified assets at December 31,
1996. The classified assets were all in the substandard category. The
Association had a loan loss allowance of $412 thousand, or 55.6% of classified
assets at December 31, 1996.
3
<PAGE>
Loan Loss Allowance
Table I.13 provides an analysis of First Robinson's loan loss
allowance. Table I.14 shows the allocation of the loan loss allowance among the
various loan categories as of October 31, 1994, 1995, and 1996 and December 31,
1996.
Mortgage-Backed Securities and Investments
Table I.15 provides a breakdown of investments as of October 31, 1994,
1995, and 1996 and December 31, 1996. Table I.16 provides maturity information
for mortgage-backed securities at December 31, 1996.
Savings Deposits
At December 31, 1996, First Robinson's deposit portfolio was composed
as follows: Non-interest bearing DDA's--$2.790 million or 4.7%; passbook
accounts--$7.313 million or 12.3%; Money market accounts--$5.515 million or
9.3%; and certificate accounts--$44.024 million or 73.8% (see Table I.17). Table
I.18 shows the maturities of certificates by quarter within various rate ranges
at December 31, 1996. It shows that approximately 70% of the Association's
certificates mature within one year.
First Robinson is not overly dependent on jumbo certificates of
deposit. At December 31, 1996, the Association had $8.553 million in
certificates that were issued for $100 thousand or more, or 14.34% of its total
deposits (see Table I.18).
Table I.19 presents information on deposit flows for the years ending
October 31, 1994, 1995, and 1996 and the two months ended December 31, 1996. It
shows deposit growth as follows: 6.04%, 26.00%, 14.75%, and 5.21% (31.23%
annualized) for the years ended October 31, 1994, 1995, and 1996, and the two
months ended December 31, 1996, respectively.
Borrowings
First Robinson has had only minor borrowings in recent years.
Subsidiaries
First Robinson has one inactive subsidiary.
Legal Proceedings
From time to time, First Robinson becomes involved in legal proceedings
principally related to the enforcement of its security interest in real estate
loans. In the opinion of Management of the Association, no legal proceedings are
in process or pending that would have a material effect on First Robinson's
financial position, results of operations, or liquidity.
EARNINGS CAPACITY OF THE INSTITUTION
As in any interest sensitive industry, the future earnings capacity of
First Robinson will be affected by the interest rate environment. Historically,
the thrift industry has performed at less profitable levels in periods of rising
interest rates. This performance is due principally to the general composition
of the assets and the limited repricing opportunities afforded even the
adjustable rate loans. The converse earnings situation (falling rates) does not
afford the same degree of profitability potential for thrifts due to the
tendency of borrowers to refinance both high rate fixed rate loans and
adjustable loans as rates decline.
First Robinson is no exception to the aforementioned phenomenon. With
its current asset and liability structure, however, its exposure to rising
interest rates is not significant.
The addition of capital through the conversion will allow First
Robinson to grow. As growth is attained, the leverage of that new capital
should, from a ratio of expenses to total assets standpoint, reduce the
operating expense ratio. However, growth and additional leverage will likely be
moderate and well controlled to maintain the current risk levels inherent in the
Association's asset base.
4
<PAGE>
Asset-Size-Efficiency of Asset Utilization
At its current size and in its current asset configuration, First
Robinson is a moderately efficient operation. With total assets of approximately
$67.5 million, First Robinson has 37 full time equivalent employees. First
Robinson is inefficient with respect to utilization of its premises. Despite
healthy asset growth in recent years, it still has not grown enough to fully
absorb the occupancy costs associated with the new headquarters building that
was built in 1985.
Intangible Values
First Robinson's greatest intangible value lies in its loyal deposit
base. First Robinson has a 114 year history of sound operations, controlled
growth, and consistent earnings. At June 30, 1996, the Association had 15.53% of
the deposit market in its area (up from 10.54% at June 30, 1994), and it has the
ability to increase market share. First Robinson has enjoyed deposit growth at
the expense of local competing commercial banks, principally as a result of
superior service following acquisition of local banks by large out-of-state
banks.
First Robinson has no significant intangible values that could be
attributed to unrecognized asset gains on investments and real estate.
Effect of Government Regulations
Although still considered a traditional thrift, First Robinson is in
transition to a commercial bank. However, its business plan calls for the
increase in percentage of loans in consumer and commercial loans to reverse.
Government regulations will have the greatest impact in the area of cost of
compliance and reporting. The conversion will create an additional layer of
regulations and reporting and thereby increase the cost to the Association.
Office Facilities
First Robinson's main office is a well maintained facility that was
built by the Association in 1985. Both branch facilities were acquired in 1995.
Table I.20 provides information on First Robinson's offices. The facilities are
adequate for the convenience and needs of the Association's customer base.
5
<PAGE>
Table I.1 - Selected Financial Data
<TABLE>
<CAPTION>
At
December 31, At October 31, Compound
------------ ----------------------------------------- Growth
1996 1996 1995 1994 1993 1992 Rate
---- ---- ---- ---- ---- ---- ----
($000's)
Selected Financial Condition Data:
<S> <C> <C> <C> <C> <C> <C> <C>
Total assets ................................... 67,538 63,869 54,708 43,824 41,299 43,944 10.84%
Loans receivable, net .......................... 57,003 54,448 44,854 34,093 30,885 30,064 16.55%
Mortgage-backed securities ..................... 3,917 4,011 2,973 3,284 3,792 4,705 -4.49%
Interest bearing deposits ...................... 2,048 868 2,472 2,602 2,575 3,917 -16.79%
Investment securities .......................... 671 714 1,213 1,221 1,448 2,502 -36.90%
Savings deposits ............................... 59,642 56,691 49,404 39,208 36,976 39,922 10.10%
Borrowings ..................................... 2,500 1,500 -- -- -- -- NM
Equity - substantially restricted ............. 4,746 4,658 4,536 4,111 3,747 3,301 9.09%
</TABLE>
<TABLE>
<CAPTION>
Two Months Ended
December 31, Year Ended October 31,
------------------- ---------------------------------------------
1996 1995 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
($000's)
Selected Operations Data:
<S> <C> <C> <C> <C> <C> <C> <C>
Interest income 906 737 4,827 3,755 2,985 3,160 3,620
Interest expense 495 410 2,655 1,971 1,446 1,563 2,121
--- --- ----- ----- ----- ----- -----
Net interest income 411 327 2,172 1,784 1,539 1,597 1,499
Provision for loan losses (recovery) 8 4 270 9 24 33 40
- - --- - -- -- --
Net interest income after
provision for loan losses 403 323 1,902 1,775 1,515 1,564 1,459
--- --- ----- ----- ----- ----- -----
Noninterest income 56 46 392 271 248 229 183
-- -- --- --- --- --- ---
Sub-total 459 369 2,294 2,046 1,763 1,793 1,642
--- --- ----- ----- ----- ----- -----
Noninterest expense 338 290 2,120 1,414 1,180 1,175 1,175
--- --- ----- ----- ----- ----- -----
Income before taxes 121 79 174 632 583 618 467
Income tax expense 47 31 51 233 221 219 160
Extraordinary income - - - - - 48 -
--- --- ----- ----- ----- ----- -----
Net income 74 48 123 399 362 447 307
== == === === === === ===
</TABLE>
6
<PAGE>
Table I.2 - Selected Financial Ratios
<TABLE>
<CAPTION>
At or for the Two Months
Ended October 31, At of For the Year Ended October 31,
--------------------------- -----------------------------------------------------
1996 1995 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
Performance Ratios:
<S> <C> <C> <C> <C> <C> <C> <C>
Return on assets (ratio of net earnings
to average total assets) 0.68% 0.53% 0.21% 0.82% 0.86% 0.97% 0.72%
Return on equity (ratio of net earnings
to average equity) 9.36% 6.37% 2.60% 9.68% 9.08% 11.24% 9.76%
Ratio of average interest-earning assets to
average interest-bearing liabilities 107.81% 108.40% 108.01% 108.83% 107.78% 98.43% 103.20%
Ratio of net interest income, after provision
for loan losses, to noninterest expense 119.23% 111.38% 89.72% 125.53% 128.39% 132.99% 124.17%
Net interest rate spread 3.59% 3.39% 3.49% 3.52% 3.60% 3.79% 3.58%
Net yield on average interest-earning assets 3.96% 3.78% 3.86% 3.90% 3.88% 4.09% 3.73%
Quality Ratios:
Non-performing assets to total assets
at end of period 0.48% 0.34% 0.60% 0.07% 0.07% 0.33% 0.37%
Allowance for loan losses to non-performing
loans at end of period 958.14% 153.70% 430.21% 2125.00% 2215.00% 3670.00% 1640.91%
Allowance for loan losses to total loans, net 0.72% 0.54% 0.76% 0.57% 0.84% 1.19% 1.20%
Capital Ratios:
Equity to total assets at end of period 7.03% 8.37% 7.29% 8.29% 9.38% 9.07% 8.91%
Average equity to average assets 7.23% 8.24% 7.91% 8.49% 9.45% 8.59% 7.36%
</TABLE>
7
<PAGE>
Table I.3 - Gap Analysis
<TABLE>
<CAPTION>
At September 30, 1996
------------------------------------------------------------------
Six Six One Three
Months Months to to Three to Five Over Five
or Less One Year Years Years Years Total
------- -------- ----- ----- ----- -----
($000's)
Interest-earning assets:
<S> <C> <C> <C> <C> <C> <C>
Fixed rate loans 884 456 145 630 756 2,871
Adjustable rate loans 10,772 3,289 13,313 980 7,495 35,849
Commercial loans 3,477 1,018 1,074 848 402 6,819
Consumer loans 1,338 757 4,059 5,686 170 12,010
Mortgage-backed securities 965 2,236 391 - 183 3,775
Investmentsecurities 2,063 20 70 40 544 2,737
----- -- -- -- --- -----
Total interest-earning assets 19,499 7,776 19,052 8,184 9,550 64,061
Interest-bearing liabilities:
Certificate accounts 18,522 10,680 11,246 3,576 - 44,024
Demand deposits 7,313 - - - - 7,313
Passbook accounts 5,515 - - - - 5,515
FHLB advances 2,500 - - - - 2,500
----- ------ ------ ----- ----- ------
Total interest-bearing liabilities 33,850 10,680 11,246 3,576 - 59,352
====== ====== ====== ===== ======
Interest-earning assets less
interest-bearing liabilities (14,351) (2,904) 7,806 4,608 9,550 4,709
======= ====== ===== ===== ===== =====
Cumulative interest-rate sensitivity gap (14,351) (17,255) (9,449) (4,841) 4,709
======= ======= ====== ====== =====
Cumulative interest-rate sensitivity gap
as a percentage of interest-earning assets -22.40% -26.94% -14.75% -7.56% 7.35%
===== ===== ===== ==== ====
Cumulative interest-rate sensitivity gap
as a percentage of assets -22.25% -26.75% -14.65% -7.51% 7.30%
===== ===== ===== ==== ====
Cumulative ratio of interest earning
assets to interest-bearing liabilities 57.60% 61.25% 83.06% 91.84% 107.93%
===== ===== ===== ===== ======
</TABLE>
8
<PAGE>
Table I.4 - Interest Rate Shock
Net Portfolio Value
December 31, 1996
----------------------------------------------------
Estimated
NPV as a
Change Estimated Percent
in Rates NPV of Assets $ Change % Change
- --------- --------- --------- -------- --------
($000's)
+400 bp $4,647 7.03% (1,560) -25%
+300 bp 5,195 7.75% (1,012) -16%
+200 bp 5,668 8.36% (539) -9%
+100 bp 6,016 8.78% (191) -3%
0 bp 6,207 8.98% - -
- -100 bp 6,239 8.97% 32 1%
- -200 bp 6,248 8.93% 41 1%
- -300 bp 6,384 9.05% 177 3%
- -400 bp 6,590 9.26% 383 6%
Source: Report from OTS Risk Management Division.
9
<PAGE>
Table I.5 - Capital Compliance
December 31, 1996
-------------------------------
Amount Percent
($000's) of Assets
--------- ----------
Capital under generally accepted
accounting principals .............. 4,746 7.03%
===== ====
Tangible capital .................... 4,704 6.97%
Tangible capital requirement ........ 1,013 1.50%
----- ----
Excess ................ 3,691 5.47%
===== ====
Core capital ........................ 4,704 6.97%
Core capital requirement ............ 2,026 3.00%
----- ----
Excess ................ 2,678 3.97%
===== ====
Total regulatory capital ............ 5,116 10.25%
Risk-based capital requirement ...... 3,993 8.00%
----- ----
Excess ................ 1,123 2.25%
===== ====
10
<PAGE>
Table I.6 - Loan Portfolio Composition
<TABLE>
<CAPTION>
At December 31, At October 31,
----------------- ----------------------------------------------------------
1996 1996 1995 1994
---------------- ---------------- ----------------- -------------------
Amount Percent Amount Percent Amount Percent Amount Percent
------ ------- ------ ------- ------ ------- ------ -------
($000's)
Mortgage Loans:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1-4 family 27,822 48.3% 27,784 50.6% 23,448 51.8% 21,058 61.0%
Multi family 135 0.2% 141 0.3% 174 0.4% 190 0.6%
Non-residential 10,608 18.4% 9,594 17.5% 5,560 12.3% 3,961 11.5%
Construction 155 0.3% 76 0.1% 514 1.1% 140 0.4%
--- --- -- --- --- --- --- ---
Total real estate loans 38,720 67.3% 37,595 68.5% 29,696 65.6% 25,349 73.5%
------ ---- ------ ---- ------ ---- ------ ----
Other Loans:
Deposit 569 1.0% 571 1.0% 1,069 2.4% 442 1.3%
Automobile 8,729 15.2% 8,764 16.0% 7,273 16.1% 5,133 14.9%
Other consumer 2,712 4.7% 2,717 4.9% 2,591 5.7% 1,412 4.1%
----- --- ----- --- ----- --- ----- ---
Total consumer loans 12,010 20.9% 12,052 22.0% 10,933 24.2% 6,987 20.3%
------ ---- ------ ---- ------ ---- ----- ----
Commercial business loans 6,819 11.8% 5,257 9.6% 4,628 10.2% 2,164 6.3%
----- ---- ----- --- ----- ---- ----- ---
Total other loans 18,829 32.7% 17,309 31.5% 15,561 34.4% 9,151 26.5%
------ ---- ------ ---- ------ ---- ----- ----
Total loans 57,549 100.0% 54,904 100.0% 45,257 100.0% 34,500 100.0%
----- ===== ------ ===== ------ ===== ------ =====
Less:
Loans in process 134 - - -
Deferred fees and discounts - 43 148 119
Allowance for losses 412 413 255 288
--- --- --- ---
Loan portfolio, net 57,003 54,448 44,854 34,093
====== ====== ====== ======
</TABLE>
11
<PAGE>
Table I.7 - Loan Maturities
The following table sets forth certain information at December 31, 1996,
regarding the amount of loans maturing in the loan portfolio, based on
contractual terms to maturity. Adjustable rate loans are shown as maturing in
the period in which the rate adjusts.
<TABLE>
<CAPTION>
Under One to Three to Over
One Year Three Years Five Years Five Years Total
-------- ----------- ---------- ---------- -----
($000's)
<S> <C> <C> <C> <C> <C>
Mortgage loans
1-4 family 8,784 10,923 735 7,535 27,977
Multi family and
commercial 6,617 2,535 875 716 10,743
Consumer 2,095 4,059 5,686 170 12,010
Commercial business 4,495 1,074 848 402 6,819
----- ----- --- --- -----
Total 21,991 18,591 8,144 8,823 57,549
====== ====== ===== ===== ======
Yield 9.03% 9.29% 9.46% 7.93% 9.01%
==== ==== ==== ==== ====
</TABLE>
12
<PAGE>
Table I.8 - Loan Origination, Purchase, and Repayment Activity
<TABLE>
<CAPTION>
Two Months
Ended
December 31, Year Ended October 31,
------------ --------------------------------------
1996 1996 1995 1994
------ ------ ------ -----
($000's)
<S> <C> <C> <C> <C>
Originations by type:
Real estate:
One- to four-family ................................ 1,406 11,883 8,069 9,375
Multi family ....................................... 95 -- -- 95
Commercial ......................................... 1,515 4,703 5,915 1,818
Other:
Consumer ........................................... 1,807 12,391 11,885 8,267
Commercial business ................................ 2,725 7,717 5,889 3,202
----- ----- ----- -----
Total loans originated .......................... 7,548 36,694 31,758 22,757
----- ------ ------ ------
Purchases:
Commercial real estate ............................. -- -- -- 400
Commercial business ................................ -- -- -- 500
MBS ................................................ -- 2,174 -- 500
----- ------ ------ ------
Total loans originated and purchases ............ 7,548 38,868 31,758 24,157
Loan sales: .......................................... 600 1,744 3,081 109
--- ----- ----- ---
Loan repayments: ..................................... 4,300 23,917 16,443 18,214
MBS repayments: ...................................... 198 1,136 346 982
Decrease (increase) in other items, net: ............. (3) (1,386) (1,477) (2,221)
-- ------ ------ ------
Net increase (decrease) in loans receivable, net 2,447 10,685 10,411 2,631
===== ====== ====== =====
</TABLE>
13
<PAGE>
Table I.9 - Average balances, Rates, and Yields
<TABLE>
<CAPTION>
Two Months Ended December 31, Year Ended October 31,
-------------------------------------------- ----------------------------------------
1996 1996
-------------------------------------------- ----------------------------------------
Average Interest Average Interest
Outstanding Earned/ Average Outstanding Earned/ Average
Balance Paid Yield/Rate Balance Paid Yield/Rate
------- ---- ---------- ------- ---- ----------
($000's)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans 56,250 845 9.01% 49,543 4,441 8.96%
Mortgage-backed securities 3,918 47 7.20% 3,872 248 6.40%
Investment securities 689 6 5.22% 879 57 6.48%
Interest-bearing deposits 1,365 8 3.52% 1,994 81 4.06%
----- - ---- ----- -- ----
Total interest-earning assets 62,222 906 8.74% 56,288 4,827 8.58%
====== === ==== ====== ===== ====
Interest-bearing liabilities:
Savings deposits 5,264 27 3.08% 4,938 156 3.16%
Demand and NOW accounts 6,839 36 3.16% 6,447 207 3.21%
Certificates of deposit 43,348 411 5.69% 40,363 2,271 5.63%
Borrowings 2,262 21 5.57% 367 21 5.72%
----- -- ---- --- -- ----
Total interest-bearing liabilities 57,713 495 5.15% 52,115 2,655 5.09%
====== === ==== ====== ===== ====
Net interest income 411 2,172
=== =====
Net interest rate spread 3.59% 3.48%
==== ====
Net average earning assets 4,509 4,173
===== =====
Net interest margin 3.96% 3.86%
==== ====
Average interest-earning assets to
average interest-bearing liabilities 108% 108%
=== ===
</TABLE>
<TABLE>
<CAPTION>
Year Ended October 31,
------------------------------------------------------------------------------------
1995 1994
---------------------------------------- --------------------------------------
Average Interest Average Interest
Outstanding Earned/ Average Outstanding Earned/ Average
Balance Paid Yield/Rate Balance Paid Yield/Rate
------- ---- ---------- ------- ---- ----------
($000's)
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans 39,101 3,367 8.61% 32,245 2,608 8.09%
Mortgage-backed securities 3,117 204 6.54% 3,403 203 5.97%
Investment securities 1,276 76 5.96% 1,638 95 5.80%
Interest-bearing deposits 2,236 108 4.83% 2,370 79 3.33%
----- --- ---- ----- -- ----
Total interest-earning assets 45,730 3,755 8.21% 39,656 2,985 7.53%
====== ===== ==== ====== ===== ====
Interest-bearing liabilities:
Savings deposits 4,272 129 3.02% 4,384 131 2.99%
Demand and NOW accounts 5,942 189 3.18% 6,249 195 3.12%
Certificates of deposit 31,478 1,633 5.19% 26,159 1,120 4.28%
Borrowings 329 20 6.08% - - -
--- -- ---- ------ ----- -----
Total interest-bearing liabilities 42,021 1,971 4.69% 36,792 1,446 3.93%
====== ===== ==== ====== ===== ====
Net interest income 1,784 1,539
===== =====
Net interest rate spread 3.52% 3.60%
==== ====
Net average earning assets 3,709 2,864
===== =====
Net interest margin 3.90% 3.88%
==== ====
Average interest-earning assets to
average interest-bearning liabilities 109% 108%
=== ===
</TABLE>
14
<PAGE>
Table I.10 - Rate/Volume Analysis
<TABLE>
<CAPTION>
Year Ended October 31,
Two Months Ended December 31, ---------------------------------------------------------------
1996 vs. 1995 1996 vs. 1995 1995 vs. 1994
--------------------------- ----------------------------- -----------------------------
Increase Increase Increase
(Decrease) (Decrease) (Decrease)
Due to Due to Due to
-------------- Total -------------- Total ------------------ Total
Increase Increase Increase
Volume Rate (Decrease) Volume Rate (Decrease) Volume Rate (Decrease)
------ ---- ---------- ------ ---- ---------- ------ ---- ----------
($000's)
Interest-earning assets:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans ................................ 158 10 168 932 142 1,074 583 176 759
Mortgage-backed securities ............ 14 (2) 12 48 (4) 44 (17) 18 1
Investment securities ................. (5) 1 (4) (26) 7 (19) (22) 3 (19)
Other ................................. (5) (2) (7) (11) (16) (27) (4) 33 29
-- -- -- --- --- --- -- -- --
Total interest-earning assets ....... 162 7 169 943 129 1,072 540 230 770
=== = === === === ===== === === ===
Interest-bearing liabilities:
Deposits .............................. 72 (8) 64 528 155 683 238 267 505
Borrowings ............................ 21 -- 21 2 (1) 1 20 -- 20
-- -- -- --- -- --- -- --- --
Total interest-bearing liabilities ... 93 (8) 85 530 154 684 258 267 525
== == == === === === === === ===
Increase (decrease) in
net interest income ............... 84 388 245
== === ===
</TABLE>
15
<PAGE>
Table I.11 - Loan Delinquencies at December 31, 1996
<TABLE>
<CAPTION>
60-89 Days 90 Days & Over Nonaccrual Total
------------------ ------------------ ----------------- ------------------
Percent Percent Percent Percent
of Gross of Gross of Gross of Gross
Amount Loans Amount Loans Amount Loans Amount Loans
------ ----- ------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Real Estate:
1-4 family 47 0.17% -- 0.00% 10 0.04% 57 0.20%
Consumer 97 0.35% 1 0.00% 28 0.10% 126 0.45%
Commercial business -- 0.00% -- 0.00% 4 0.01% 4 0.01%
------ -------- ------ -------- ------ -------- ------ --------
Total 144 0.25% 1 0.00% 42 0.07% 187 0.32%
====== ======== ====== ======== ====== ======== ====== ========
</TABLE>
16
<PAGE>
Table I.12 - Non-Performing Assets
The table below sets forth the amounts and categories of non-performing assets.
Loans are placed on non-accrual status when the collection of principal or
interest becomes doubtful.
December 31, October 31,
----------- -------------------------
1996 1996 1995 1994
---- ---- ---- ----
($000's)
Non-accruing loans:
Real estate:
One- to four-family 10 44 -- --
Consumer 28 24 -- --
Commercial business 4 -- -- --
---- ---- ---- ----
Total 42 68 -- --
==== ==== ==== ====
Accruing loans delinquent 90 days or more:
Real estate:
One- to four-family -- 15 10 --
Commercial -- 21 -- --
Consumer 1 -- 2 5
Commercial business -- -- -- 8
---- ---- ---- ----
Total 1 36 12 13
---- ---- ---- ----
Total non-performing loans 43 104 12 13
---- ---- ---- ----
Foreclosed assets:
Real estate:
One- to four-family 277 278 18 19
Commercial real estate -- -- -- --
Consumer 6 7 6 --
---- ---- ---- ----
Total 283 285 24 19
---- ---- ---- ----
Total non-performing assets 326 389 36 32
==== ==== ==== ====
Total non-performing loans as
a percentage of total net loans 0.08% 0.18% 0.02% 0.02%
==== ==== ==== ====
Total non-performing assets as
a percentage of total assets 0.48% 0.60% 0.07% 0.07%
==== ==== ==== ====
17
<PAGE>
Table I.13 - Analysis of the Allowance for Loan Losses
Two Months
ended
December 31, Year ended October 31,
----------- ---------------------------
1996 1996 1995 1994
----------- ------ ------- --------
($000's)
Balance at beginning of period 413 255 288 367
------ ------ ------- -------
Charge-offs:
One- to four-family -- 2 44 --
Consumer 10 94 -- 59
Commercial business -- 26 -- 157
------ ------ ------- -------
10 122 44 216
------ ------ ------- -------
Recoveries:
One- to four-family -- -- -- 30
Consumer 1 10 2 2
Commercial business -- -- -- 81
------ ------ ------- -------
1 10 2 113
------ ------ ------- -------
Net charge-offs 9 112 42 103
Additions charged
(credited) to operations 8 270 9 24
------ ------ ------- -------
Balance at end of period 412 413 255 288
====== ====== ======= =======
Allowance for loan losses to total
non-performing loans at end of period 958.14% 397.21% 2125.00% 2215.38%
====== ====== ======= =======
Allowance for loan losses to
net loans at end of period 0.72% 0.76% 0.57% 0.84%
====== ====== ======= =======
18
<PAGE>
Table I.14 - Allocation of Allowance for Loan Losses
<TABLE>
<CAPTION>
At December 31, At October 31,
-------------------- ----------------------------------------------------------------------
1996 1996 1995 1994
-------------------- --------------------- -------------------- ---------------------
Percent Percent Percent Percent
of Loans of Loans of Loans of Loans
in Each in Each in Each in Each
Amount of Category Amount of Category Amount of Category Amount of Category
Loan Loss to Gross Loan Loss to Gross Loan Loss to Gross Loan Loss to Gross
Allowance Loans Allowance Loans Allowance Loans Allowance Loans
--------- ----- --------- ----- --------- ----- --------- -----
($000's)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Real Estate:
1-4 family ............... 126 48.35% 77 50.61% 80 51.80% 82 61.04%
Multi family ............. -- 0.23% -- 0.26% -- 0.38%- -- 0.55%
Commercial ............... 13 18.43% 13 17.47% 14 12.29% 14 11.48%
Construction ............. -- 0.27% -- 0.14% -- 1.14%- -- 0.41%
Consumer ................... 42 20.87% 28 21.95% 45 24.16% 22 20.25%
Commercial
business ................. 2 11.85% 2 9.57% 2 10.23% 2 6.27%
Unallocated ................ 229 0.00% 293 0.00% 114 0.00% 168 0.00%
--- ---- --- ---- --- ---- --- ----
412 100.00% 413 100.00% 255 100.00% 288 100.00%
=== ====== === ====== === ====== === ======
</TABLE>
19
<PAGE>
Table I.15 - Investments
<TABLE>
<CAPTION>
December 31, October 31,
---------------- ----------------------------------------------------------
1996 1996 1995 1994
---------------- ---------------- ---------------- ----------------
Book % of Book % of Book % of Book % of
Value Total Value Total Value Total Value Total
----- ------ ----- ------ ----- ------ ----- ------
($000's)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AVAILABLE FOR SALE:
Equity Securities:
FHLB stock 264 6.57% 264 6.39% 240 8.30% 236 7.56%
FHLMC stock 202 5.03% 205 4.96% 208 7.20% 200 6.40%
------ ------ ------ ------ ------ ------ ------ ------
Total 466 11.60% 469 11.35% 448 15.50% 436 13.96%
------ ------ ------ ------ ------ ------ ------ ------
Mortgage-backed securities:
GNMA 191 4.75% 264 5.06% 309 10.69% 352 11.27%
FNMA 2,645 65.83% 2,730 66.05% 1,139 39.42% 1,246 39.90%
FHLMC 716 17.82% 725 17.54% 994 34.39% 1,089 34.87%
------ ------ ------ ------ ------ ------ ------ ------
Total 3,552 88.40% 3,664 88.65% 2,442 84.50% 2,687 86.04%
------ ------ ------ ------ ------ ------ ------ ------
Total available for sale 4,018 100.00% 4,133 100.00% 2,890 100.00% 3,123 100.00%
====== ====== ====== ====== ====== ====== ====== ======
HELD TO MATURITY:
Investment securities:
FHLMC step up bonds -- 0.00% -- 0.00% 500 38.58% 500 36.21%
Municipal bonds 225 39.47% 245 41.39% 265 20.45% 285 20.64%
------ ------ ------ ------ ------ ------ ------ ------
Total 225 39.47% 245 41.39% 765 59.03% 785 56.85%
------ ------ ------ ------ ------ ------ ------ ------
Mortgage-backed securities:
FHLMC 345 60.53% 347 58.61% 531 40.97% 596 43.15%
------ ------ ------ ------ ------ ------ ------ ------
Total Held to Maturity 570 100.00% 592 100.00% 1,296 100.00% 1,381 100.00%
====== ====== ====== ====== ====== ====== ====== ======
Average Remaining Life 3.24 Years 3.31 Years 3.49 Years 4.39 Years
---------- ---------- ---------- ----------
</TABLE>
20
<PAGE>
Table I.16 - Mortgage-Backed Securities Maturities
At December 31, 1996
-----------------------------------------
FHLMC FNMA GNMA Total
----- ---- ---- -----
($000's)
Due in:
6 Months or less .................. 109 346 33 488
6 Months to 1 Year ................ 112 354 35 501
1 to 3 Years ...................... 498 1,133 117 1,748
3 to 5 Years ...................... 118 206 -- 324
5 to 10 Years ..................... 79 141 -- 220
10 to 20 Years .................... 110 212 -- 322
Over 20 Years ..................... 15 157 -- 172
----- ----- ----- -----
Total ..................... 1,041 2,549 185 3,775
===== ===== ===== =====
21
<PAGE>
Table I.17 - Savings Deposits Detail
<TABLE>
<CAPTION>
At December 31, At October 31,
------------------- ---------------------------------------------------------------------
1996 1996 1995 1994
------------------- ------------------- ------------------- -------------------
Percent of Percent of Percent of Percent of
Amount Total Amount Total Amount Total Amount Total
------ ---------- ------ ---------- ------ ---------- ------ ----------
(000's)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Transactions and
Savings Deposits:
Non-interest DDA's 2,790 4.68% 2,265 4.00% 1,873 3.79% 1,402 3.58%
Money market accounts 5,515 9.25% 5,540 9.77% 4,124 8.35% 4,296 10.96%
Passbook accounts 7,313 12.26% 6,717 11.85% 6,055 12.26% 6,002 15.31%
------ ---------- ------ ---------- ------ ---------- ------ ----------
Total 15,618 26.19% 14,522 25.62% 12,052 24.39% 11,700 29.84%
------ ---------- ------ ---------- ------ ---------- ------ ----------
Certificates:
2.00 - 3.99% 63 0.11% 94 0.17% 11 0.02% 4,126 10.52%
4.00 - 5.99% 24,792 41.57% 22,958 40.50% 21,810 44.15% 23,022 58.72%
6.00 - 7.99% 19,169 32.14% 19,117 33.72% 15,531 31.44% 360 0.92%
------ --------- ------ --------- ------ ---------- ------ ----------
Total certificates 44,024 73.81% 42,169 74.38% 37,352 75.61% 27,508 70.16%
------ --------- ------ --------- ------ ---------- ------ ----------
Total deposits 59,642 100.00% 56,691 100.00% 49,404 100.00% 39,208 100.00%
====== ========= ====== ========= ====== ========== ====== ==========
</TABLE>
22
<PAGE>
Table I.18 - Certificates of Deposit Maturities
The table below provides CD maturities at December 31, 1996, by quarter in rate
ranges.
2.00- 4.00- 6.00- Percent
3.99% 5.99% 7.99% Total of Total
----- ----- ----- ----- --------
Certificates maturing
in quarter ending:
March 31, 1997 307 6,333 3,504 9,900 22.61%
June 30, 1997 -- 7,793 585 8,378 19.14%
September 30, 1997 -- 2,613 4,406 7,019 16.03%
December 31, 1997 -- 3,427 1,825 5,252 12.00%
March 31, 1998 -- 1,566 707 2,273 5.19%
June 30, 1998 -- 1,258 944 2,202 5.03%
September 30, 1998 -- 530 399 929 2.12%
December 31, 1998 -- 553 1,316 1,869 4.27%
March 31, 1999 -- 193 107 300 0.69%
June 30, 1998 -- 174 552 726 1.66%
September 30, 1999 -- 8 425 433 0.99%
Thereafter -- 100 4,399 4,499 10.28%
---- ------ ------ ------ ------
Total 307 24,548 19,169 43,780 100.00%
==== ====== ====== ====== ======
Percent of total 0.70% 56.07% 43.78% 100.00%
==== ====== ====== ======
The following table indicates the amount of the Association's certificates of
deposit by time remaining to maturity at December 31, 1996.
Maturity
--------------------------------------
Over Over
3 Months 3 to 6 6 to 12 Over
or Less Months Months 12 Months Total
------- ------ ------ --------- -----
Certificates under $100,000 7,113 5,764 9,548 10,383 32,808
Certificates of $100,000 or more 1,738 1,245 2,723 2,847 8,553
Public funds of $100,000 or more 1,050 1,369 -- --
----- ----- ------ ------ ------
Total certificates of deposits 9,901 8,378 12,271 13,230 43,780
===== ===== ====== ====== ======
23
<PAGE>
Table I.19 - Savings Flows
The following table sets forth the savings flows for the periods indicated.
Two Months
Ended
December 31, Year Ended October 31,
------------ ------------------------------------
1996 1996 1995 1994
---- ---- ---- ----
Opening balance 56,691 49,404 39,208 36,976
Deposits 34,144 185,451 156,675 103,360
Withdrawals 31,467 179,660 147,580 101,987
Interest credited 274 1,496 1,101 859
------ ------- ------- -------
Ending Balance 59,642 56,691 49,404 39,208
====== ======= ======= =======
Net increase (decrease) 2,951 7,287 10,196 2,232
====== ======= ======= =======
Percent increase (decrease) 5.21% 14.75% 26.00% 6.04%
====== ======= ======= ======
24
<PAGE>
Table I.20 - Offices
Net Book Year Owned or Square
Physical address Value Opened Leased Footage
- ---------------- ----- ------ ------ -------
($000's)
Main Office:
501 East Main Street 1,600 1985 Owned 12,420
Robinson, Illinois
Branch Offices:
119 East Grand Prairie 399 1995 Owned 1,850
Palestine, Illinois
102 West Main Street 141 1995 Owned 2,260
Oblong, Illinois
25
<PAGE>
SECTION II
MARKET AREA
<PAGE>
FERGUSON & COMPANY Section II.
- ------------------ -----------
II. MARKET AREA
DEMOGRAPHICS
First Robinson conducts its operations through three offices located in
Robinson, Oblong, and Palestine, all in Crawford County, Illinois. Illinois is
in the midwestern region of the United States. Crawford County is in the
southeastern section of Illinois.
First Robinson has determined that its principal trade area is Crawford
County. Table II.1 presents historical and projected trends for the United
States, Illinois, and Crawford County, and zip codes 62449, 62454, and 62451,
which include Oblong, Robinson, and Palestine, respectively. The information
addresses population, income, employment, and housing trends.
As indicated in Table II.1, population growth rates for Crawford County
are well below both the United States rate and the rate for the State of
Illinois, which is well below that of the United States. Household income growth
for Crawford County is projected to be below that of the State of Illinois and
the United States for the period 1996 to 2001.
In the period from 1990 until 1996, the population of the State of
Illinois grew 4.13%. During the same period, the Crawford County population
increased 2.61% and the United States population increased 6.67%. Projections of
population growth from 1996 through 2001 indicate that the State of Illinois
will increase 3.18%, while Crawford County is projected to increase by 2.03% and
the United States population is projected to increase by 5.09%.
Household income is projected to decline by 8.91% for Crawford County
from 1996 to 2001. For the same period, household income is projected to decline
by 6.36% for the State of Illinois and decline by 3.88% for the United States.
Per capita and household income levels for the State of Illinois are slightly
higher than those of the United States, but per capita and household income
levels for Crawford County are well below both the State of Illinois and the
United States.
The 2001 estimate shows that, for Crawford County, households with
incomes less than $15,000 are expected to be 25%; those with incomes between
$15,000 and $25,000 are estimated at 21%; those with incomes between $25,000 and
$50,000 are estimated at 37%; those with incomes between $50,000 and $100,000
are estimated at 15%; and households with incomes in excess of $100,000 are
projected to be only 3%. The 2001 estimates for Illinois are 19%, 15%, 34%, 26%,
and 7%, respectively.
The number of households in Crawford County is projected to grow by
2.22% from 1996 to 2001, well below the projected growth rate for the State of
Illinois at 3.20% and also below that of the United States at 5.14%.
With projections of a modest growth in population and number of
households, combined with projections of a flat household income, the market for
housing units will be limited. Crawford County has approximately 8,500 housing
units, of which 72.15% are owner occupied, and a vacancy rate of 7.94%.
The principal sources of employment in Crawford County are
trade--34.1%; manufacturing--22.5%; and services--13.3%. The major employers in
First Robinson's market area are engaged in health care, education,
confectionery products, and light manufacturing. Some of the major employers
are: Marathon Oil Company (600 employees - refinery); Leaf, Incorporated (550
employees - candy); Briggs Industries (325 employees - bath ceramics); Robinson
Correctional Facility (323 employees - detention); Dana Corporation (300
employees - gaskets); Fair Rite Products (260 employees electronic ceramics);
Community Unit Number 2 Schools (242 employees - education); Crawford Memorial
Hospital (240 employees - health care); and E. H. Baare Corporation (195
employees - wire products).
1
<PAGE>
Analysis of the data presented above presents a picture of limited
economic opportunity, suggesting that First Robinson's growth opportunities
within its current market area will be slow.
Based on information publicly available on deposits as of June 30, 1996
(see Table II.3), Crawford County had $355.4 million in deposits and First
Robinson had 15.53% of the deposit market, up from 10.54% of the market at June
30, 1994. First Robinson's recent deposit growth rate has been excellent, though
the overall market has shown little growth. First Robinson's competition
consists of four commercial banks and two credit unions. First Robinson's
excellent growth in a flat market has occurred as a result of First Robinson
providing superior service while other banks in its market cannot compete on a
service basis because they have been acquired by large out-of-state banks. Table
II.3 shows that from June 30, 1994 to 1996, First Robinson's deposits increased
by $18.2 million while competing commercial banks lost $14.2 million in
deposits. First Robinson's business plan projects that its growth rate will slow
in time as the customer dissatisfaction with competing banks subsides.
Building permit information was not available. However, low projected
population growth rates portend limited building. First Robinson has little
competition from other financial institutions for the residential loan
opportunities.
Growth opportunities for First Robinson can be assessed by reviewing
economic factors in its market area. The salient factors include growth trends,
economic trends, and competition from other financial institutions. We have
reviewed these factors to assess the potential for the market area. In assessing
the growth potential of First Robinson, we must also assess the willingness and
flexibility of management to respond to the competitive factors that exist in
the market area. Our analysis of the economic potential and the potential of
management affects the valuation of the Association. Management has demonstrated
its flexibility through its decision to switch to a commercial bank charter and
continue to make residential loans.
2
Section II.
Table II.1 - Demographic Trends
Key Economic Indicators
United States, Illinois, Crawford County and Zip Codes 62449, 62454, and 62451
<TABLE>
<CAPTION>
================================================================================================================================
United Crawford Zip Code Zip Code Zip Code
Key Economic Indicator States Illinois County 62449 62454 62451
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Total Population, 2001 Est. 278,802,003 12,281,535 20,377 3,735 9,852 2,438
1996 - 2001 Percent Change, Est. 5.09 3.18 2.03 2.10 2.58 0.87
Total Population, 1996 Est. 265,294,885 11,902,847 19,972 3,658 9,604 2,417
1990 - 96 Percent Change, Est. 6.67 4.13 2.61 2.75 3.77 0.17
Total Population, 1990 248,709,873 11,430,602 19,464 3,560 9,255 2,413
- --------------------------------------------------------------------------------------------------------------------------------
Household Income, 2001 Est. 33,189 34,009 24,473 25,748 25,748 21,378
1996 - 2001 Percent Change, Est. (3.88) (6.36) (8.91) (7.42) (7.42) (14.55)
Household Income, 1996 Est. 34,530 36,318 26,866 27,811 27,811 25,019
- --------------------------------------------------------------------------------------------------------------------------------
Per Capita Income, 1990 16,738 17,337 13,228 12,929 13,792 12,434
- --------------------------------------------------------------------------------------------------------------------------------
Household Income Distribution-
2001 Est. (%)
$15,000 and less 20 19 25 22 25 28
$15,000 - $25,000 16 15 21 21 21 22
$25,000 - $50,000 34 34 37 41 36 34
$50,000 - $100,000 24 26 15 14 15 14
$100,000 - $150,000 4 5 2 1 2 1
$150,000 and over 2 2 1 1 1 1
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Unemployment rate, 1990 6.24 6.59 8.60 8.58 9.08 7.28
- --------------------------------------------------------------------------------------------------------------------------------
Median Age of Population, 1996 Est. 34.3 34.3 38.3 38.2 38.2 38.2
Median Age of Population, 1990 32.9 32.8 37.1 37.4 37.4 36.3
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Average Housing Value, 1990 79,098 80,124 42,429 41,215 42,120 41,781
- --------------------------------------------------------------------------------------------------------------------------------
Total Households, 2001 Est. 103,293,062 4,527,174 8,211 1,471 4,096 994
1996 - 2001 Percent Change, Est. 5.14 3.20 2.22 2.22 2.81 0.91
Total Households, 1996 98,239,161 4,386,585 8,033 1,439 3,984 985
1990 - 96 Percent Change, Est. 6.84 4.39 3.09 3.23 4.29 0.51
Total Households, 1990 91,947,410 4,202,240 7,792 1,394 3,820 980
- --------------------------------------------------------------------------------------------------------------------------------
Total Housing Units, 1990 101,641,260 4,506,275 8,464 1,496 4,174 1,053
% Vacant 10.07 6.75 7.94 7.22 8.72 6.65
% Occupied 89.93 93.25 92.06 92.78 91.28 93.35
% By Owner 57.78 59.90 72.15 77.54 67.68 71.32
% By Renter 32.15 33.35 19.91 15.24 23.60 22.03
================================================================================================================================
</TABLE>
Source: Scan/US, Inc.
<PAGE>
Table II.2 - Percent Employment by Industry
United States, Illinois, and Crawford County
United Crawford
Industry States Illinois County
================================== ============= ============= ==============
Construction/Agriculture/Mining 9.5 7.5 7.1
Manufacturing 17.7 16.7 22.5
Transportation/Utilities 7.1 5.6 6.6
Trade 21.2 22.5 34.1
Finance/Insurance 6.9 7.0 5.1
Services 32.7 26.7 13.3
Public Administration 4.8 13.8 11.3
Source: State of Illinois
<PAGE>
Table II.3 - Market Area Deposits
- --------------------------------------------------------------------------------
1994 1995 1996
(in Thousands)
Crawford County
Total First Robinson Savings $ 37,025 $ 43,973 $ 55,199
--------- --------- ---------
Number 1 1 1
Number of Branches 1 2 3
Total Bank Deposits $ 312,960 $ 308,588 $ 298,724
--------- --------- ---------
Number 4 4 4
Number of Branches 9 9 10
Total Credit Union Deposits $ 1,324 $ 1,353 $ 1,476
--------- --------- ---------
Number 2 2 2
Number of Branches 2 2 2
Total Crawford Co. Deposits $ 351,309 $ 353,914 $ 355,399
Percent of Deposits Held by
First Robinson Savings 10.54% 12.42% 15.53%
- --------------------------------------------------------------------------------
Source: BranchSource, a product of Sheshunoff Information Services, Inc.
SECTION III
COMPARISON WITH PUBLICLY
TRADED THRIFTS
<PAGE>
FERGUSON & COMPANY Section III.
- ------------------ ------------
III. COMPARISON WITH PUBLICLY TRADED THRIFTS
COMPARATIVE DISCUSSION
This section presents an analysis of First Robinson relative to a group
of ten publicly traded thrift institutions ("Comparative Group"). Such analysis
is necessary to determine the adjustments that must be made to the pro forma
market value of First Robinson's stock. Table III.1 presents a listing of the
comparative group with general information about the group. Table III.2 presents
key financial indicators relative to profitability, balance sheet composition
and strength, and risk factors. Table III.3 presents a pro forma comparison of
First Robinson to the comparative group. Exhibits III and IV contain selected
financial information on First Robinson and the comparative group. This
information is derived from quarterly TFR's filed with the OTS and call reports
filed with the FDIC. The selection criteria and comparison with the Comparative
Group are discussed below.
Selection Criteria
Ideally, the comparative group would consist of thrifts in the same
geographic region with identical local economies, asset size, capital level,
earnings performance, asset quality, etc. However, there are few comparably
sized institutions with stock that is liquid enough to provide timely,
meaningful market values. Therefore, we have selected a group of comparatives
that are either listed on the New York Stock Exchange ("NYSE"), the American
Stock Exchange ("AMEX"), or Nasdaq. We excluded companies that are apparent
takeover targets and companies with unusual characteristics that tend to distort
both mean and median calculations. For example, we have excluded all companies
with losses during the trailing twelve months. We have also excluded mutual
holding companies (see Exhibit VI).
Because of the limited number of similar size thrifts with sufficient
trading volume, we looked for members of the comparative group among thrifts
with assets between $50 million and $100 million. The Midwest Region, which
includes Illinois, had 28 thrifts that met the size requirements. We found 45
thrifts that met the asset size requirements in the entire country (we consider
10 to be the minimum number), and we retained 10 and eliminated 35 for the
following reasons: (a) One was a mutual holding company; (b) One was BIF
insured; (c) Seven had no earnings for the most recent quarter; (d) Two had
agreed to be acquired; (e) Three had non-performing assets in excess of 1.25% of
total assets; (f) Seventeen had less than 60% of their assets in loans; and (g)
Three had loans serviced in excess of 40% of assets. After eliminating the
thrifts described above, there were 10 left.
The principal source of data was SNL Securities, Charlottesville,
Virginia. There are approximately 420 publicly traded thrifts listed on NYSE,
AMEX, or Nasdaq. In developing statistics for the entire country, we eliminated
certain institutions that skewed the results, in order to make the data more
meaningful:
o We eliminated companies with losses,
o We eliminated indicated acquisition targets,
o We eliminated companies with price/earnings ratios in excess of 25, and
o We eliminated companies that had not reported as a stock institution
for one complete year.
The resulting group of 278 publicly traded thrifts is included in Exhibit V.
1
<PAGE>
The selected group of comparatives has sufficient trading volume to
provide meaningful price data. Seven of the comparative group members are
located in the Midwest and the others are located in the Southeast (2), and
Mid-Atlantic (1) Regions. With total assets of approximately $67.5 million,
First Robinson is slightly below the group selected, which has average assets of
$80.8 million and median assets of $80.9 million. However, First Robinson's
assets after conversion will be closer to the comparative group. Pro forma
assets at the midpoint are $72.9 million.
Profitability
Using the comparison of profitability components as a percentage of
average assets, First Robinson was below the comparative group in loss
provisions, .44% to .08%; operating expense, 2.91% to 2.39%; and core income,
.74% to .92%. First Robinson was above the comparative group in net income, .74%
to .68%; net interest income, 3.64% to 3.59%; and other operating income, .54%
to .25%. First Robinson's operating expense minus other income was 2.37% versus
2.14% for the comparative group. After conversion, deployment of the proceeds
will provide additional income, and First Robinson will compare more favorably
with the comparative group in terms of return on average assets, with a return
of .86% at the midpoint of the appraisal range. Pro forma return on average
equity is 5.71% at the midpoint, versus a mean of 3.86% and median of 4.98% for
the comparative group. The Comparative group's net income of .68% and its return
on equity percentages are after the SAIF assessment. The Comparative group's
core income of .92% factors out the SAIF assessment.
As compared with the Comparative group, First Robinson has a better
interest spread and it has more noninterest income. First Robinson's principal
impediment to earnings is its home office facility. The home office was built in
1985 at an original cost of $2.0 million. It has a book value of $1.6 million at
December 31, 1996. It contains approximately 12,400 square feet of space. Over
time, as the Association grows in size, the cost of the building will diminish
relative to size and the building will be fully utilized. First Robinson's
occupancy expense as a percent of average assets was .61%, .57%, .61%, and .58%
for the years ended December 31, 1994, 1995, and 1996, and the nine months
September 30, 1996. The composite occupancy expense as a percent of average
assets for all OTS thrifts in Illinois between $50 million and $100 million in
assets for the same periods was .36%, .37%, .40%, and .39%.1
Balance Sheet Characteristics
The general asset composition of First Robinson is similar to that of
the comparative group, but more retail oriented. First Robinson has a lower
level of passive investments with 9.83% of its assets invested in cash,
investments, and mortgage-backed securities, versus 18.73% for the comparative
group. First Robinson has a higher percentage of its assets in loans, at 84.40%
versus 77.90% for the comparative group. First Robinson's percentage of earning
assets to interest costing liabilities is much lower than that of the group.
First Robinson has 107.81% and the comparative group averages 118.22%. After
conversion, First Robinson's ratio will be closer to that of the group of
comparatives.
The liability side differs mainly in that First Robinson has a lower
percentage of borrowings, a higher percentage of deposits, and a lower
percentage of equity. First Robinson has borrowings equal to 3.70% of assets
versus 10.95% for the comparative group and First Robinson has deposits equal to
88.31% of assets versus 71.95% for the comparative group. First Robinson's
equity is 7.03% of assets versus 15.99% for the comparative group. First
Robinson's equity ratio after conversion will be much closer to that of the
comparative group. First Robinson's pro forma equity ratio at the midpoint is
13.80%.
- ---------
1 TAFS, published by Sheshunoff Information Services, Inc.
2
<PAGE>
Risk Factors
Both First Robinson and the comparative group have low levels of
nonperforming assets, with First Robinson's being slightly lower than the
comparative group. First Robinson's loan loss allowance is .72% of net loans,
which compares favorably with the comparative group, which is .62%. First
Robinson's one year gap to assets is negative 25.55% versus positive .73% for
the comparative group. However, the comparative group average is based on
information provided by only three of the ten members of the group.
Summary of Financial Comparison
Based on the above discussion of operational, balance sheet, and risk
characteristics of First Robinson compared with the group, we believe that First
Robinson's performance is level with that of the comparative group. While First
Robinson's capital level is below the comparative group, the conversion proceeds
will increase its capital well above the comparatives. Otherwise, First
Robinson's earnings are hindered by its main office building. Future asset
growth is needed to reduce the drag on earnings created by the building.
FUTURE PLANS
First Robinson's future plans are to remain a well capitalized but
leveraged, profitable institution with good asset quality and a commitment to
serving the needs of its trade area, emphasizing lending and slowing the
transition from thrift to commercial bank. The business plan emphasizes growth
in mortgage lending, consumer lending, and commercial non-real estate lending in
ratios that are close to the current composition of the loan portfolio.
Management recognizes that it will take time to invest the proceeds of its
capital infusion in a manner consistent with its historic performance and
current policy. During that period of time, management is willing to accept a
lower return on equity.
In recent years, First Robinson has experienced healthy growth. The
Association's business plan projects that it will experience growth in loans,
savings deposits, and liquidity; however, the rate of growth is projected to
decline. The additional capital raised by the sale of Common Stock will
initially be used to purchase short term investment securities. Adjustable rate
and short term loans will be emphasized. The Association will continue to
minimize long term, fixed rate loans.
First Robinson has no current plans to open or acquire branches.
However, the additional capital and the formation of a holding company would
make acquisition of branches or another financial institution a viable option.
Management intends to expand and will open additional full service branches and
loan production offices if necessary to meet the Association's growth plans.
Increasing market penetration by increasing the number of services and
products available, coupled with opening additional offices, are the most likely
methods to be employed to achieve growth on a long-term basis.
3
Table III.1 - Comparatives General Section III
<TABLE>
<CAPTION>
Total Current Current
Number Assets Stock Market
Type of ($000) Price Value
Ticker Short Name City State Thrift(1) Offices MRQ IPO Date ($) ($M)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ALBC Albion Banc Corp. Albion NY Traditional 2 59,860 07/26/93 16.750 4.19
CKFB CKF Bancorp, Inc. Danville KY Traditional 1 60,038 01/04/95 18.750 17.39
GFSB GFS Bancorp, Inc. Grinnell IA Traditional 1 87,625 01/06/94 22.250 11.07
KSAV KS Bancorp, Inc. Kenly NC Traditional 3 100,840 12/30/93 21.500 14.26
LOGN Logansport Financial Corp. Logansport IN Traditional 1 77,668 06/14/95 13.500 16.96
MIVI Mississippi View Holding Co. Little Falls MN Traditional 1 70,329 03/24/95 14.875 12.71
NWEQ Northwest Equity Corp. Amery WI Traditional 3 96,518 10/11/94 13.500 12.55
SFFC StateFed Financial Corporation Des Moines IA Traditional 2 82,809 01/05/94 18.380 14.50
SOBI Sobieski Bancorp, Inc. South Bend IN Traditional 3 78,978 03/31/95 14.000 12.35
SZB SouthFirst Bancshares, Inc. Sylacauga AL Traditional 2 93,110 02/14/95 13.750 11.29
Maximum 3 100,840 22.250 17.39
Minimum 1 59,860 13.500 4.19
Average 2 80,778 16.726 12.73
Median 2 80,894 15.813 12.63
<FN>
(1) Made determination by reference to TAFS and BankSource reports. TAFS reports
are derived from quarterly reports filed with the OTS and BankSource reports are
derived from call reports filed with the FDIC. TAFS and BankSource are published
by Sheshunoff Information Services, Austin, Texas.
</FN>
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
First Robinson
Savings
and Loan Comparative
Association Group
------------------------- -----------------
Profitability
(% of average assets)
<S> <C> <C>
Net income (1) 0.74 0.68
Net interest income 3.64 3.59
Loss (recovery) provisions 0.44 0.08
Other operating income (2) 0.54 0.25
Operating expense (3) 2.91 2.39
Core income ( excluding gains
and losses on asset sales) (1) 0.74 0.92
Balance Sheet Factors
(% of assets)
Cash and investments 4.03 12.86
Mortgage-backed securities 5.80 5.87
Loans 84.40 77.90
Savings deposits 88.31 71.95
Borrowings 3.70 10.95
Equity 7.03 15.99
Tangible equity 7.03 15.99
Risk Factors
(%)
Earning assets/costing liabilities 107.81 118.22
Non-performing assets/assets 0.48 0.67
Loss allowance/non performing assets 126.38 109.19
Loss allowance/loans 0.72 0.62
One year gap/assets (25.55) 0.73
<FN>
(1) Used appraisal earnings.
(2) Excluded $68,000 gains on asset sales.
(3) Excluded $281,000 SAIF assessment and $82,000 abnormal directors' insurance
expense.
</FN>
</TABLE>
Source: SNL Securities, F&C calculations,
and Offering Circular
<PAGE>
<TABLE>
<CAPTION>
As of March 4, 1997
Ticker Name Price Mk Value PE P/Book P/TBook P/Assets Div Yld
($) ($Mil) (X) (%) (%) (%) (%)
First Robinson
-----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Before Conversion N/A N/A N/A N/A N/A N/A N/A
Pro Forma Supermax 10.000 8.60 14.0 72.2 72.2 7.7 3.00
Pro Forma Maximum 10.000 7.48 12.7 68.4 68.4 8.9 3.00
Pro Forma Midpoint 10.000 6.50 11.4 64.6 64.6 10.1 3.00
Pro Forma Minimum 10.000 5.53 10.0 59.9 59.9 11.5 3.00
Comparative Group
-----------------------
Averages 16.726 12.73 19.7 96.9 97.0 16.1 2.39
Medians 15.813 12.63 15.5 97.8 97.8 14.9 2.26
Illinois Public Thrifts
-----------------------
Averages 23.766 142.50 17.7 121.5 125.0 13.3 1.37
Medians 20.938 55.03 17.0 113.4 114.5 13.4 1.57
Midwest Region Thrifts
-----------------------
Averages 21.917 128.74 16.6 129.4 133.3 14.7 1.94
Medians 19.250 40.57 15.9 114.1 115.2 14.0 2.07
All Public Thrifts
-----------------------
Averages 22.073 207.41 16.2 139.2 146.2 13.7 1.96
Medians 19.563 53.14 15.8 130.8 136.1 12.5 1.99
Comparative Group
-----------------------
ALBC AlbionBancCorp-NY 16.750 4.19 38.1 72.6 72.6 7.0 1.85
CKFB CKFBancorp-KY 18.750 17.39 22.9 110.2 110.2 29.0 2.35
GFSB GFSBancorp,Inc.-IA 22.250 11.07 11.7 110.6 110.6 12.7 1.80
KSAV KSBancorp,Inc-NC 21.500 14.26 13.5 103.9 104.0 14.1 2.79
LOGN LogansprtFinCrp-IN 13.500 16.96 15.5 109.9 109.9 21.8 2.96
MIVI MissViewHoldCo-MN 14.875 12.71 17.9 97.5 97.5 18.1 1.08
NWE NorthwestEqty-WI 13.500 12.55 14.5 97.7 97.7 13.0 3.26
SFFC StateFedFinCorp-IA 18.380 14.50 14.5 97.9 97.9 17.4 2.18
SOBI SobieskiBancorp-IN 14.000 12.35 29.2 82.1 82.1 15.6 2.00
SZB SouthFstBncshrs-AL 13.750 11.29 NM 87.0 87.0 12.2 3.64
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
As of March 4, 1997
Ticker Name Assets Eq/A TEq/A EPS ROAA ROAE
($000) (%) (%) ($) (%) (%)
First Robinson
-----------------------
<S> <C> <C> <C> <C> <C> <C>
Before Conversion 67,538 7.0 7.0 N/A 0.74 9.69
Pro Forma Supermax 74,703 15.9 15.9 0.71 0.90 5.18
Pro Forma Maximum 73,716 14.8 14.8 0.79 0.88 5.44
Pro Forma Midpoint 72,858 13.8 13.8 0.88 0.86 5.71
Pro Forma Minimum 72,015 12.8 12.8 1.00 0.84 6.02
Comparative Group
-----------------------
Averages 80,778 16.0 16.0 0.92 0.92 4.71
Medians 80,894 15.8 15.8 0.85 1.09 6.14
Illinois Public Thrifts
-----------------------
Averages 1,010,815 11.2 11.0 1.43 0.60 5.10
Medians 393,234 10.3 10.0 1.36 0.58 5.34
Midwest Region Thrifts
-----------------------
Averages 863,529 12.1 11.9 1.40 0.71 6.13
Medians 325,168 11.0 10.7 1.21 0.71 5.09
All Public Thrifts
-----------------------
Averages 1,623,703 10.4 10.2 1.47 0.76 7.86
Medians 418,115 9.0 8.7 1.28 0.72 6.60
Comparative Group
ALBC AlbionBancCorp-NY 59,860 9.6 9.6 0.44 0.20 (11.45)
CKFB CKFBancorp-KY 60,038 25.2 25.2 0.82 1.30 5.19
GFSB GFSBancorp,Inc.-IA 87,625 11.5 11.5 1.91 1.17 9.93
KSAV KSBancorp,Inc-NC 100,840 13.6 13.6 1.59 1.18 7.96
LOGN LogansprtFinCrp-IN 77,668 19.9 19.9 0.87 1.51 7.02
MIVI MissViewHoldCo-MN 70,329 18.5 18.5 0.83 1.00 5.32
NWE NorthwestEqty-WI 96,518 12.3 12.3 0.93 0.97 8.47
SFFC StateFedFinCorp-IA 82,809 17.8 17.8 1.27 1.27 6.96
SOBI SobieskiBancorp-IN 78,978 17.7 17.7 0.48 0.50 3.78
SZB SouthFstBncshrs-AL 93,110 14.0 14.0 0.05 0.05 3.92
</TABLE>
Note: Stock prices are closing prices or last trade. Pro forma
calculations for First Robinson are based on sales at $10 a
share with a midpoint of $6,500,000, minimum of $5,525,000,
and maximum of $7,475,000.
Sources: First Robinson's audited and unaudited financial
statements, SNL Securities, and F&C calculations.
SECTION IV
CORRELATION OF MARKET
VALUE
<PAGE>
FERGUSON & COMPANY Section IV.
- ------------------ ------------
IV. CORRELATION OF MARKET VALUE
MARKETABILITY & LIQUIDITY OF STOCK TO BE ISSUED
Certain factors must be considered to determine whether adjustments are
required in correlating First Robinson's market value to the comparative group.
Those factors include financial aspects, market area, management, dividends,
liquidity, thrift equity market conditions, and subscription interest.
This section addresses the aforementioned factors and the estimated pro
forma market value of the to-be-issued common shares and compares the resulting
market value of the Association to the members of its comparative group and the
selected group of publicly held thrifts.
Financial Aspects
Section III includes a discussion regarding a comparison of First
Robinson's earnings, balance sheet characteristics, and risk factors with its
comparative group. Table III.2 presents a comparison of certain key indicators,
and Table III.3 presents certain key indicators on a pro forma basis after
conversion.
As shown in Table III.2, from an earnings viewpoint, First Robinson is
below its comparative group in core income as a percentage of average assets.
First Robinson's core income is based on appraisal earnings which factors out
unusual or nonrecurring items and the comparative group's core income is
computed on the same basis. First Robinson's net interest income as a percent of
assets is 3.64% versus 3.59% for the comparatives. The difference is
attributable to the loan mix (i.e., First Robinson has more in consumer and
commercial loans, which have higher yields), First Robinson's higher ratio of
loans to assets and lower ratio of investments to assets versus the comparative
group, and First Robinson's deposit mix, which includes more transaction
accounts. First Robinson's spread is sufficient for its net interest income as a
percent of assets to exceed that of the comparative group, despite the group
having significantly higher equity and therefore a much higher ratio of interest
earning assets to interest bearing liabilities.
First Robinson's loan loss provisions are well above its comparative
group, with loss provisions of .44% of assets versus .08% of assets for the
comparative group. This results from First Robinson having higher levels of
consumer and commercial loans, which generally entail more risk. First
Robinson's other operating income is .54% of average assets, versus .25% for the
comparative group. First Robinson's higher ratio results from its loan and
deposit mix, which are more commercial bank oriented, and give rise to more fee
income.
First Robinson's operating expense ratio, at 2.91% of average assets,
is well above that of the comparative group, which is 2.39%. First Robinson's
higher ratio results from its generally higher level of commercial bank type
loans and deposits and from its higher occupancy costs, as discussed more fully
in Section III.
After First Robinson completes its stock conversion, its core income as
a percentage of average assets will increase. Table III.3 projects that First
Robinson's return on assets will be .86% at the midpoint, versus a mean of .92%
and median of 1.09% for the comparative group.
1
<PAGE>
First Robinson's pro forma equity to assets ratio at the midpoint is
13.8%, versus a mean of 16.0% and median of 15.8% for the comparative group,
making it slightly easier for First Robinson to achieve a reasonable return on
equity. First Robinson's pro forma return on equity is 5.71% at the midpoint
versus a mean of 4.71% and median of 6.14% for the comparative group. The mean
return on equity for the comparative group is somewhat distorted because of the
SAIF assessment.
First Robinson's recorded earnings have been adjusted for appraisal
purposes. The Association recorded higher than normal loan loss provisions,
gains on asset sales, higher than normal directors' retirement expense, and the
SAIF resolution assessment.
Table IV.1 - Appraisal Earnings Adjustments
Net income, year ended December 31, 1996.......................... $149,000
Plus SAIF assessment.............................................. 281,000
Plus excess directors' retirement expense--94,000 - 12,000........ 82,000
Plus loan loss provisions in excess of normal
amount--270,000 - 80,000......................................... 190,000
Less gains on asset sales......................................... -68,000
Less applicable taxes on above adjustments at 37.5%............... -182,000
--------
Appraisal earnings, year ended December 31, 1996.................. $452,000
========
First Robinson's asset composition is less passive than the comparative
group. First Robinson has a higher ratio of loans to assets, lower ratio of
investments and mortgage-backed securities to assets, higher ratio of deposits
to assets, and lower ratio of borrowings to assets. From the risk factor
viewpoint, First Robinson is similar to the comparative group. First Robinson
has a slightly lower level of non performing assets. First Robinson's loan loss
allowance is .72% of net loans, comparing favorably with the comparative group,
which is 0.62%. First Robinson has a higher level of consumer and commercial
loans, which entail a higher level of risk. Its ratio of interest earning assets
to interest bearing liabilities (107.81%) is well below the comparative group
(118.22%). First Robinson's ratio will be level with the comparative group after
conversion. From an interest rate risk factor, First Robinson is probably as
well off or better than the comparative group.
We believe that no adjustment is necessary relative to financial
aspects of First Robinson.
Market Area
Section II describes First Robinson's market area.
We believe that no adjustment is required for First Robinson's market
area.
Management
The President, who functions as CEO, has been with First Robinson 8
years, serving as CEO since joining the Association. The Vice
President-Treasurer has been with the Association for 19 years. The Vice
President-CFO has been with the Association for 11 years. The Vice President-
Branching has been with the Association for 12 years. The Vice President-Lending
has been with the Association for two years, but had several years of commercial
banking experience prior to joining First Robinson. To facilitate the
Association's conversion from thrift to commercial bank, the Association's
management staff includes a wealth of commercial bank experience with local
banks. First Robinson's results compare well with the comparative group. First
Robinson's management has done a better job of planning and preparing for the
Association's future. First Robinson has a management succession plan.
2
<PAGE>
We believe that no adjustment is required for First Robinson's
management.
Dividends
Table III.3 provides dividend information relative to the comparative
group and the thrift industry as a whole. The comparative group is paying a mean
yield on price of 2.39% and a median of 2.26%, while all public thrifts are
paying a mean of 1.96% and median of 1.99%. First Robinson intends to pay a
dividend at an initial annual rate of 3.00%.
We believe that no adjustment is required relative to First Robinson's
intention to pay dividends.
Liquidity
The Holding Company has never issued capital stock to the public, and
as a result, no existing market for the Common Stock exists. Although the
Holding Company has applied to list its Common Stock on the Nasdaq Small Cap
market, there can be no assurance that a liquid trading market will develop.
A public market having the desirable characteristics of depth,
liquidity, and orderliness depends upon the presence, in the market place, of
both willing buyers and sellers of the Common Stock. These characteristics are
not within the control of the Association or the market.
The peer group includes companies with sufficient trading volume to
develop meaningful pricing characteristics for the stock. The market value of
the comparative group ranges from $4.19 million to $17.39 million, with a mean
value of $12.73 million. The midpoint of First Robinson's valuation range is
$6.5 million at $10 a share, or 650,000 shares.
We believe a slight downward adjustment is required relative to the
liquidity of First Robinson's stock.
Thrift Equity Market Conditions
The SNL Thrift Index is summarized in Figure IV.1. As the table
demonstrates, the Thrift Index has performed well since the end of 1990. The
Index has grown as follows: Year ended December 31, 1991--increased 49.0% from
96.6 to 143.9; Year ended December 31, 1992--increased 39.7% to 201.1; Year
ended December 31, 1993--increased 25.6% to 252.5; Year ended December 31,
1994--decreased 3.1% to 244.7; Year ended December 31, 1995--increased 53.9% to
376.5; Year ended December 31, 1996--increased 28.4% to 483.6; and Period ended
March 4, 1997--increased 16.2% to 562.1. It is market value weighted with a base
value of 100 as of March 31, 1984.
As shown in Figure IV.1, which is a graph of the SNL Thrift Index
covering from December 31, 1990 through March 4, 1997, the market, as depicted
by the index, has experienced fluctuations recently. It dipped in the latter
part of 1994, but recovered during the first quarter of 1995. During 1995, the
Index continued a more robust increase and moved from 244.7 at year end 1994 to
376.5 by December 31, 1995, an increase of 53.9%. However, the Index was flat
for the first six months of 1996, but it has picked up since June 30, 1996.
3
<PAGE>
The increase in the SNL Index, in general, has been parallel with the
increases in other equity markets with some interim fluctuations caused by
changes or anticipated changes in interest rates. Another factor, however, is
also notable. In other markets, increased prices are responding to improved
profits, with price to earnings ratios increasing as earnings potentials are
anticipated. However, the thrift IPO market has been affected by speculation
that the majority of the institutions will become viable consolidation
candidates and sell at some expanded multiple of book value.
ILLINOIS ACQUISITIONS
Table IV.2 provides information relative to acquisitions of financial
institutions in Illinois between January 1, 1995 and November 25, 1996. There
were 13 thrift acquisitions and 43 bank acquisitions announced during that time
frame. Currently, there are 28 publicly held thrifts in the State of Illinois.
There are 164 publicly held thrifts in the midwest region of the country. Bank
acquisitions in Illinois since January 1, 1995, have averaged 184.5% of tangible
book value and 18.2 times earnings. The median price has been 181.6% of tangible
book value and 14.9 times earnings. Thrifts generally sell at lower price/book
multiples than do banks. Thrifts in Illinois during that period have averaged
136.1% of tangible book value and 20.4 times earnings.
EFFECT OF INTEREST RATES ON THRIFT STOCK
The current interest rate environment and the anticipated rate
environment will affect the pricing of thrift stocks and all other interest
sensitive stocks. As the economy continues to expand, the fear of inflation can
return. The Federal Reserve, in its resolve to curb inflation, has increased
rates in the past, but has more recently relented to vagaries of the economy and
passed an opportunity to increase rates. In some minds, this was an attempt to
stimulate what is currently perceived as a fragile and irresolute economy that
could be dampened by a modest increase in rates. Recent gains in thrift stocks
are mainly due to the rise in other equity markets, the effect of supply and
demand, and fewer conversions. Should the merger and acquisition levels drop, if
there were a sharp and sustained rise in the interest rates, or if other equity
markets have an adjustment, the market in thrift equities would also adjust
downward.
What is likely to happen in the short to intermediate term is that
rates will float around current levels and trend upward. The yield curve will
continue to be of normal configuration. Most economists feel that a rise of
three quarters of one percent on the short side and less on the long side could
severely dampen the economy. Currently, we are in the second longest post-war
expansion on record. The Federal Reserve passed on raising rates in February and
the next opportunity will be March 25, 1997. There is concern that a decision to
raise rates could have significant impact upon the stock market, and if rates
are increased, it will not be by much. It is also possible that the Fed could
slow the economy, without raising rates. It could allow the U. S. Dollar to
remain strong against the Yen and the European currencies. Although not as
effective as a rate increase, a continuing strong dollar would have a natural
economic "braking effect" on the U.S. economy. Goods and services produced by
countries with weaker currencies would become cheaper on the global economy and
more competitive to U.S. produced good. The net result would be a market induced
slowing of the economy -- until the U.S. Dollar loses its strength and values of
currencies are adjusted.
Thrift net interest margins will narrow if the cost of funds starts to
rise more quickly than currently anticipated. Even with portfolios replete with
adjustable rate loans and adjustable MBS's, a quickly rising rate environment
can cause the cost of funds to rise faster than the adjustable assets can
accommodate, and accordingly, spreads would narrow. If rates rise in a slow and
orderly manner, then the negative impact on spreads will be less and the
adjustable rate assets will have time to rise and protect rate spreads.
4
<PAGE>
As clearly illustrated, the SNL Thrift Index has performed well over
the last six years. It moved in tandem with all interest sensitive stocks and
reflected the weakness in the market as investors began to consider the
importance of increases in rates and their impact on the net interest margins of
thrifts. The clear implication is that rising interest rates will have a
negative impact on earnings.
Figure IV.2 graphically displays the rate environment since August 30,
1996. At that time, the yield curve was relatively flat, with only a 186 basis
point ("BP") difference between the federal funds rate and the 30 year treasury
at August 30, 1996. Since that time, the yield curve has changed very little
with a 155 BP spread between the federal funds rate and the 30 year treasury
rate at February 28, 1997.
At August 30, 1996, the spread between the 1 year T-Bill and the 5 year
T-Note was 80 bp, and the spread between the 5 year T-Note and the 30 year bond
was 47 bp. On February 28, 1997, the spreads were 73 and 46 bp, respectively.
From August 1996 to February 1997, the Fed Funds rate decreased 5 basis
points and the Prime Rate did not change.
Increased cost of funds will serve to narrow the net interest margins
of thrifts. A thrift's ability to maintain net interest margins through business
cycles is important to investors, unless thrifts can offset the decline in net
interest income by other sources of revenue or reductions in noninterest
expense. The former is difficult and the latter is unlikely.
First Robinson, with its interest rate risk management combined with
its equity position (especially on a pro forma basis), is less vulnerable to
rising rates than most.
During 1993, conversion stocks often experienced first day 30% or more
increases in value. However, as Table IV.3 shows, recent price appreciation has
not been quite as robust. Table IV.3 provides information on 20 conversions
completed since August 31, 1996. The average change in price since conversion is
a gain of 47.6% and the median change is a gain of 44.1%. Within that group, all
have increased in value with a range of a low of 32.5% to a high of 83.8%. The
average increase in value at one day, one week, and one month after conversion
has been 26.0%, 28.3%, and 33.1%, respectively. The median increase in value at
one day, one week, and one month after conversion has been 27.5%, 27.5%, and
33.8%, respectively.
Because of the lack of complete earnings information on recent
conversions, a meaningful comparison of the price earnings ratios is difficult
to make. However, there is sufficient information to review the price to book
ratio. The average price-to-book ratio, as of March 4, 1997, is 101.2% and the
median is 98.3%. That compares to the offering price to pro forma book, where
the average was 71.6% and the median was 72.1%.
We believe a downward adjustment is required for the new issue
discount.
5
<PAGE>
Adjustments Conclusion
Adjustments Summary
- --------------------------------------------------------------------------------
No Change Upward Down
Financial Aspects X
Market Area X
Management X
Dividends X
Liquidity X
Thrift Equity Market Conditions X
- --------------------------------------------------------------------------------
Valuation Approach
Typically, investors rely on the price/earnings ratio as the most
appropriate indicator of value. We consider price/earnings to be one of the
important pricing methods in valuing a thrift stock. Price/book is a well
recognized yardstick for measuring the value of financial institution stocks in
general. Another method of viewing thrift values is price/assets, which is more
meaningful in situations where the subject is thinly capitalized. Given the
healthy condition of the thrift industry today, more emphasis is placed on
price/earnings and price/book. Generally, price/earnings and price/book should
be considered in tandem.
Table III.3 presents First Robinson's pro forma ratios and compares
them to the ratios of its comparative group and the publicly held thrift
industry as a whole. First Robinson's earnings for the twelve months ended
December 31, 1996, were approximately $149,000, with adjustments of $303,000
required to determine appraisal earnings of $452,000. Management has indicated
an intention, through its diversification of deposit and loan products, to
exhibit the flexibility in operations needed to serve both the public and the
institution. The Association is positioned to manage reasonable interest rate
variations. The Association projects modest growth.
The comparative group traded at an average of 19.7 times earnings at
March 4, 1997, and at 96.9% of book value. The comparative group traded at a
median of 15.5 times earnings and a median of 97.8% of book value. At the
midpoint of the valuation range, First Robinson is priced at 11.4 times earnings
and 64.6% of book value. At the maximum end of the range, First Robinson is
priced at 12.7 times earnings and 68.4% of book value. At the supermaximum,
First Robinson is priced at 14.0 times earnings and 72.2% of book value.
The midpoint valuation of $6,500,000 represents a discount of 33.3%
from the average and a discount of 33.9% from the median of the comparative
group on a price/book basis. The price/earnings ratio for First Robinson at the
midpoint represents a discount of 42.1% from the comparative group's mean and a
discount of 26.5% from the median price/earnings ratio.
The maximum valuation of $7,475,000 represents a discount of 29.4% from
the average and 30.1% from the median of the comparative group on a price/book
basis. The price/earnings ratio for First Robinson at the maximum represents a
discount of 35.5% from the average and a discount of 18.1% from the median of
the comparative group.
6
<PAGE>
As shown in Table IV.3, conversions closing since August 31, 1996, have
closed at an average price to book ratio of 71.6% and median of 72.1%. First
Robinson's pro forma price to book ratio is 64.6% at the midpoint, 68.4% at the
maximum, and 72.2% at the supermaximum of the range. At the midpoint, First
Robinson is 9.8% below the average and 10.4% below the median. At the maximum of
the range, First Robinson is 4.5% below the average and 5.1% below the median.
At the supermaximum of the range, First Robinson's pro forma price to book ratio
is .8% above the average and .1% above the median.
Conversion to Bank and Comparison to Banks
Part of First Robinson's plan is the conversion to a national bank
charter. We have conducted some analysis work on other thrifts that converted to
stock and to national bank charters at the time of stock conversion. They
include Community of Olney, Illinois, First Southern of Florence, Alabama, and
Heartland of Herrin, Illinois (see Exhibit IX).
At the time of conversion, Community had already made much progress in
converting its balance sheet structure to a bank. Its loan portfolio was only
47% real estate, with the balance in consumer, agricultural, and commercial
non-real estate loans. It apparently was having difficulty meeting the qualified
thrift lender test. First Southern's balance sheet looked much more like a
traditional thrift, with 83% of its loans in real estate loans. Heartland also
looked much more like a traditional thrift, with 96% of its loans in real estate
loans. Since conversion, however, both First Southern and Heartland have
performed much better than Community. Part of the performance relates to
acquisition interest.
First Robinson's loan portfolio is 67% real estate. Its assets are more
"bank like" than those of First Southern and Heartland, but less "bank like"
than those of Community. We developed the valuation for First Robinson as a
thrift, and we believe that its pricing ratios should be commensurate with other
thrifts, based on an analysis of the institution.
Table IV.4.2.b provides a comparison of First Robinson's pricing ratios
to those of other charter flips (Community, First Southern, and Heartland) on
both current pricing ratios and conversion pricing ratios, all pink sheet banks,
and Illinois pink sheet banks. Although First Robinson intends to list as a
small cap Nasdaq, we believe pink sheet banks are more appropriate for
comparison. First Robinson's price to earnings ratio compares well with all four
groups of banks. Its price to book ratio compares well with the conversion
pricing of the other charter flips.
Valuation Conclusion
We believe that as of March 4, 1997, the estimated pro forma market
value of First Robinson was $6,500,000. The resulting valuation range was
$5,525,000 at the minimum to $7,475,000 at the maximum, based on a range of 15%
below and 15% above the midpoint valuation. The supermaximum is $8,596,250,
based on 1.15 times the maximum. Pro forma comparisons with the comparative
group are presented in Table III.3 based on calculations shown in Exhibit VII.
7
SECTION IV
Table IV.2 -- Illinois Acquisitions
<TABLE>
<CAPTION>
Buyer: Seller:
1:Total 1:Total Completed/
Bank/ Bank/ Assets Assets Announce Terminated
Buyer ST Thrift Seller ST Thrift ($000) ($000) Date Status Date
- ----- -- ------ ------ -- ------ ------- ------- -------- ------ ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Norwest Corporation MN Bank Farmers Nat'l Bncp IL Bank 78,427,600 181,453 11/25/96 Pending NA
CNB Bancshares Inc. IN Bank BMC Bancshares IL Bank 3,948,418 104,151 10/11/96 Pending NA
Pontiac Bancorp Inc. IL Bank Bank of Dwight IL Bank 169,013 32,485 09/30/96 Pending NA
BanPonce Corp PR Bank CBC Bancorp IL Bank 16,442,137 315,828 09/27/96 NonBinding NA
Central Banc, Inc. IL Bank State Bank of Osco IL Bank 112,448 37,824 09/03/96 Pending NA
Mercantile Bancorp MO Bank Regional Bancshares IL Bank 18,037,829 169,366 08/23/96 Pending NA
First Carmi Bncshrs IL Bank First NB - Enfield IL Bank 68,370 28,805 07/15/96 Completed 08/07/96
ABN-AMRO Holding FO Foreign CNBC Bancorp, Inc. IL Bank 28,005,460 811,456 06/27/96 Completed 11/01/96
TCF Financial Corp MN Thrift BOC Financial Corp IL Bank 7,039,282 194,205 06/25/96 Pending NA
Taylor Invstmt Group IL NonDep Cole Taylor Bank IL Bank NA 1,773,619 06/13/96 Pending NA
National City Bncs IN Bank First NB/Wayne City IL Bank 988,888 52,389 06/04/96 Completed 08/31/96
TPI Financial IL Bank Security Chicago Crp IL Bank NA 67,487 05/29/96 Pending NA
Quest Acquisition Cp IL NonDep Anchor Bank IL Bank NA 22,854 05/24/96 Pending NA
Carlinville Nat'l IL Bank Lincoln Trail Bcshrs IL Bank 129,080 38,264 05/21/96 Pending NA
First Nokomis Bncp IL Bank Ayars State Bank IL Bank 47,626 28,176 05/16/96 Completed 09/19/96
UnionBancorp IL Bank Country Bancshares IL Bank 296,426 86,754 03/22/96 Completed 09/24/96
Associated Banc-Corp WI Bank Mid-America Nat'l IL Bank 3,697,842 43,277 03/20/96 Completed 07/31/96
Mercantile Bancorp MO Bank Today's Bancorp, Inc IL Bank 15,934,370 518,484 03/20/96 Completed 11/08/96
Suburban Illinois IL Bank First Security Bank IL Bank 125,977 77,259 03/20/96 Completed 07/05/96
ABN-AMRO Holding FO Foreign Comerica Bank-IL IL Bank 27,344,928 1,465,543 03/19/96 Completed 08/01/96
Granville Bancshares IL Bank Sheridan St Bk IL Bank 40,636 14,270 03/15/96 Completed 07/31/96
UnionBancorp IL Bank Prairie Bancorp IL Bank 283,332 255,470 01/23/96 Completed 08/07/96
Northern IL Finc'l IL Bank Premier Fin'l Svcs IL Bank 927,646 648,155 01/18/96 Completed 08/22/96
Thomson Investment IL Bank Savanna Bancorp IL Bank NA 37,017 01/15/96 Completed 07/01/96
NBE Bancshares IL Bank Pinnacle Bancshares IL Bank 46,698 18,216 01/05/96 Completed 04/15/96
First Financial Corp IN Bank Crawford Bancorp IL Bank 1,352,073 96,219 12/15/95 Completed 07/31/96
Summit Bancshares IL Bank Ingraham State Bank IL Bank 120,842 14,249 12/15/95 Completed 07/01/96
Old National Bancorp IN Bank National Bk of Carm IL Bank 4,447,651 67,306 12/12/95 Completed 05/30/96
CNB Bancshares Inc. IN Bank Du Quoin Bancorp IL Bank 3,609,638 86,756 11/17/95 Completed 05/17/96
Magna Group MO Bank River Bend Bcshrs IL Bank 4,721,082 160,657 10/11/95 Completed 02/29/96
United Comm'ty Bncp IL Bank State Bank of Auburn IL Bank 205,250 52,161 10/05/95 Completed 01/06/96
Heritage Fin'l Svcs IL Bank FNB of Lockport IL Bank 1,034,592 109,654 09/28/95 Completed 02/02/96
Norwest Corporation MN Bank Canton Bancshares IL Bank 66,623,000 51,643 08/25/95 Completed 03/07/96
Mercantile Bancorp MO Bank First Sterling Bcp IL Bank 15,296,293 168,300 07/25/95 Completed 01/03/96
First Decatur Bcshrs IL Bank First Shelby Fin'l IL Bank 309,388 66,562 06/22/95 Completed 04/01/96
Shorebank Corp IL Bank Indecorp IL Bank 305,482 279,552 06/19/95 Completed 12/15/95
Naperville Bancorp IL Bank Naperville Bank IL Bank NA 35,925 05/23/95 Completed 12/15/95
Merchants Bancorp IL Bank Valley Banc Services IL Bank 496,289 136,228 04/21/95 Completed 01/03/96
Associated Banc-Corp WI Bank GN Bancorp, Inc IL Bank 3,284,318 127,983 03/23/95 Completed 08/03/95
Old National Bancorp IN Bank Shawnee Bancorp IL Bank 4,152,108 29,709 02/23/95 Completed 12/07/95
Scott Bancshares IL Bank Maroa Bancshares IL Bank 64,826 15,090 02/07/95 Completed 06/30/95
Golden Bancshares IL Bank M L Quinn Properties IL Bank 23,282 27,565 01/07/95 Completed 05/15/95
Lima Bancshares IL Bank Wemple State Bank IL Bank 18,423 26,482 01/07/95 Completed 05/15/95
Blackhawk Bancorp WI Bank Rochelle Bancorp IL Thrift 151,820 48,280 11/21/96 Pending NA
Jacksonville SB, MHC IL Thrift LCS Bancorp IL Thrift 143,044 18,869 08/15/96 Pending NA
Charter Financial IL Thrift Home Federal SB IL Thrift 300,812 32,329 08/13/96 Pending NA
Hinsdale Finl Corp IL Thrift Liberty Bancorp IL Thrift 662,482 651,198 08/02/96 Pending NA
Pinnacle Banc Group IL Bank Financial Security IL Thrift 818,697 277,057 04/22/96 Completed 09/30/96
Charter Financial IL Thrift Community Svgs Bank IL Thrift 293,171 56,897 01/26/96 Completed 05/15/96
First Chicago NBD IL Bank Barrington Bancorp IL Thrift 122,002,000 67,775 01/26/96 Completed 06/06/96
Standard Federal Bk MI Thrift Bell Bancorp IL Thrift 13,271,994 1,901,498 12/14/95 Completed 06/07/96
MAF Bancorp IL Thrift N.S. Bancorp IL Thrift 1,870,048 1,160,184 11/29/95 Completed 05/30/96
Mercantile Bancorp MO Bank Metro Savings Bk FSB IL Thrift 15,296,293 80,894 09/15/95 Completed 03/08/96
Marquette Nat'l Corp IL Bank Huntington Fed'l Sav IL Thrift 992,075 48,655 05/30/95 Completed 06/30/95
Security Bank SB IL Thrift United Bank, SB IL Thrift 132,058 38,664 04/24/95 Completed 07/01/95
NBD Bancorp MI Bank DeerBank Corp IL Thrift 45,566,302 765,886 01/09/95 Completed 07/01/95
Average 9,993,713 244,457
Median 927,646 67,631
Average-Banks 8,109,962 198,637
Median-Banks 958,267 67,487
Average-Thrifts 15,500,061 396,014
Median-Thrifts 818,697 67,775
</TABLE>
<PAGE>
Table IV.2 -- Illinois Acquisitions (continued)
<TABLE>
<CAPTION>
Ann'd Ann'd Ann'd Ann'd Final Final Final Final
Deal Deal Deal Pr/ Deal Pr/ Deal Deal Deal Pr/ Deal Pr/
Value Pr/Bk Tg Bk 4-Qtr Value Pr/Bk Tg Bk 4-Qtr
Seller ($M) (%) (%) EPS (x) ($M) (%) (%) EPS (x)
- ------ ----- ----- -------- -------- ----- ----- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Farmers Nat'l Bncp NA NA NA NA NA NA NA NA
BMC Bancshares 25.3 184.2 184.2 23.1 NA NA NA NA
Bank of Dwight NA NA NA NA NA NA NA NA
CBC Bancorp NA NA NA NA NA NA NA NA
State Bank of Osco NA NA NA NA NA NA NA NA
Regional Bancshares 41.1 178.9 178.9 12.2 NA NA NA NA
First NB - Enfield NA NA NA NA NA NA NA NA
CNBC Bancorp, Inc. 132.3 200.6 200.8 13.8 131.6 195.7 195.9 13.5
BOC Financial Corp NA NA NA NA NA NA NA NA
Cole Taylor Bank 197.3 NA NA NA NA NA NA NA
First NB/Wayne City 12.0 194.9 194.9 13.7 12.0 187.9 187.9 13.3
Security Chicago Crp NA NA NA NA NA NA NA NA
Anchor Bank 4.6 137.2 145.2 57.5 NA NA NA NA
Lincoln Trail Bcshrs 2.8 223.1 242.4 15.2 NA NA NA NA
Ayars State Bank 3.5 156.8 156.8 31.5 3.5 155.7 155.7 33.5
Country Bancshares 11.4 173.5 176.9 23.0 11.4 170.3 173.4 15.7
Mid-America Nat'l 6.9 176.9 176.9 7.3 6.7 164.5 164.5 17.9
Today's Bancorp, Inc 86.1 181.5 207.9 17.2 NA NA NA NA
First Security Bank NA NA NA NA NA NA NA NA
Comerica Bank-IL 190.0 119.9 136.5 16.6 190.0 116.0 130.1 26.6
Sheridan St Bk 2.4 200.0 200.0 12.6 2.4 190.8 190.8 11.8
Prairie Bancorp NA NA NA NA NA NA NA NA
Premier Fin'l Svcs 70.3 135.9 257.1 13.0 95.5 190.7 349.7 15.8
Savanna Bancorp 3.0 144.3 144.3 22.1 3.0 144.3 144.3 22.1
Pinnacle Bancshares 2.0 169.0 169.0 11.8 2.0 NA NA NA
Crawford Bancorp 18.9 195.0 204.6 21.5 20.1 203.9 213.5 39.4
Ingraham State Bank NA NA NA NA NA NA NA NA
National Bk of Carm 12.6 146.4 171.7 16.4 13.0 156.3 183.2 17.4
Du Quoin Bancorp 13.1 187.0 187.0 13.2 14.2 216.3 216.3 NA
River Bend Bcshrs 25.6 195.1 230.6 12.4 25.0 172.3 199.0 13.4
State Bank of Auburn 7.3 149.8 149.8 16.4 7.3 135.9 135.9 15.4
FNB of Lockport 16.8 89.9 206.5 NA 16.8 109.0 182.8 25.2
Canton Bancshares 9.7 151.1 151.1 13.3 10.2 154.6 154.6 14.1
First Sterling Bcp 23.6 131.5 134.4 13.8 23.9 133.3 135.7 14.0
First Shelby Fin'l 14.2 144.8 144.8 17.4 14.4 130.9 130.9 18.7
Indecorp NA NA NA NA NA NA NA NA
Naperville Bank 3.6 201.8 233.1 NA 3.6 226.5 264.7 NA
Valley Banc Services 20.5 227.9 237.1 32.1 20.5 218.3 225.4 43.2
GN Bancorp, Inc 22.8 192.0 192.0 14.3 24.4 207.3 207.3 16.4
Shawnee Bancorp 4.9 246.1 246.1 20.2 5.0 241.5 241.5 20.4
Maroa Bancshares 1.8 144.5 144.5 14.5 1.8 128.0 128.0 11.3
M L Quinn Properties 3.3 128.9 128.9 13.1 3.3 126.3 126.3 9.7
Wemple State Bank NA NA NA NA NA NA NA NA
Rochelle Bancorp 4.2 NA NA NA NA NA NA NA
LCS Bancorp 1.8 NA NA NA NA NA NA NA
Home Federal SB 6.3 129.2 129.2 16.7 NA NA NA NA
Liberty Bancorp 60.9 94.8 95.1 18.4 NA NA NA NA
Financial Security 46.0 110.0 110.0 21.1 43.4 108.9 108.9 20.7
Community Svgs Bank 7.5 160.4 160.4 20.2 7.5 159.1 159.1 28.5
Barrington Bancorp 17.9 148.6 148.6 35.9 18.2 149.2 149.2 61.0
Bell Bancorp 362.8 114.7 114.7 27.6 362.7 112.3 112.3 29.8
N.S. Bancorp 275.7 113.2 113.2 16.4 270.4 106.9 106.9 12.5
Metro Savings Bk FSB 9.0 159.7 159.7 13.1 9.1 153.5 154.2 16.0
Huntington Fed'l Sav NA NA NA NA NA NA NA NA
United Bank, SB NA NA NA NA NA NA NA NA
DeerBank Corp 119.8 193.0 193.7 14.3 106.2 185.8 186.4 14.2
Average 45.3 162.4 173.3 18.7 46.2 163.0 174.7 21.1
Median 12.9 159.7 171.7 16.4 13.6 156.3 164.5 16.4
Average-Banks 31.9 170.3 184.5 18.2 26.5 169.8 184.9 19.5
Median-Banks 12.6 175.2 181.6 14.9 12.0 167.4 183.0 16.1
Average-Thrifts 82.9 135.9 136.1 20.4 116.8 139.4 139.6 26.1
Median-Thrifts 17.9 129.2 129.2 18.4 43.4 149.2 149.2 20.7
</TABLE>
<PAGE>
Table IV.3 -- Recent Conversions
(Completed since August 31, 1996)
<TABLE>
<CAPTION>
Conversion Pricing Ratios
---------------------------------
Price/ Price/ Price/
Conversion Gross Offering Pro-Forma Pro-Forma Adjusted
Assets Proceeds Price Book Value Earnings Assets
Ticker Short Name State IPO Date ($000) ($000) ($) (%) (x) (%)
- ------ ---------- ----- -------- ---------- -------- -------- ---------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EFBC Empire Federal Bancorp, Inc. MT 01/27/97 86,810 25,921 10.000 68.1 21.5 23.0
FAB FirstFed America Bancorp, Inc. MA 01/15/97 723,778 87,126 10.000 72.0 13.6 10.7
RSLN Roslyn Bancorp, Inc. NY 01/13/97 1,596,744 423,714 10.000 72.0 9.3 21.0
AFBC Advance Financial Bancorp WV 01/02/97 91,852 10,845 10.000 71.1 16.8 10.6
HCFC Home City Financial Corp. OH 12/30/96 55,728 9,522 10.000 71.2 13.7 14.6
CENB Century Bancorp, Inc. NC 12/23/96 81,304 20,367 50.000 72.1 18.9 20.0
SCBS Southern Community Bancshares AL 12/23/96 64,381 11,374 10.000 74.4 14.5 15.0
BFFC Big Foot Financial Corp. IL 12/20/96 194,624 25,128 10.000 72.7 33.1 11.4
RIVR River Valley Bancorp IN 12/20/96 86,604 11,903 10.000 73.0 15.2 12.1
PSFI PS Financial, Inc. IL 11/27/96 53,520 21,821 10.000 71.9 17.2 29.0
CFNC Carolina Fincorp, Inc. NC 11/25/96 94,110 18,515 10.000 77.0 17.2 16.4
DCBI Delphos Citizens Bancorp, Inc. OH 11/21/96 88,022 20,387 10.000 72.2 14.6 18.8
FTNB Fulton Bancorp, Inc. MO 10/18/96 85,496 17,193 10.000 72.5 14.6 16.7
CNBA Chester Bancorp, Inc. IL 10/08/96 134,781 21,821 10.000 72.1 18.8 13.9
SSFC South Street Financial Corp. NC 10/03/96 166,978 44,965 10.000 76.3 26.1 21.2
AFED AFSALA Bancorp, Inc. NY 10/01/96 133,046 14,548 10.000 71.7 13.7 9.9
CBES CBES Bancorp, Inc. MO 09/30/96 86,168 10,250 10.000 61.1 13.2 10.6
WEHO Westwood Homestead Fin. Corp. OH 09/30/96 96,638 28,434 10.000 73.8 NA 22.7
HBEI Home Bancorp of Elgin, Inc. IL 09/27/96 304,520 70,093 10.000 72.6 24.9 18.7
PFFC Peoples Financial Corp. OH 09/13/96 78,078 14,910 10.000 64.3 28.6 16.0
Maximum 1,596,744 423,714 50.000 77.0 33.1 29.0
Minimum 53,520 9,522 10.000 61.1 9.3 9.9
Average 215,159 45,442 12.000 71.6 18.2 16.6
Median 89,937 20,377 10.000 72.1 16.8 16.2
</TABLE>
<TABLE>
<CAPTION>
Post Conversion Price Increase (Decrease)
Current Current Current Price One Price One Price One -----------------------------------------
Stock Price/ Price/T Day After Week After Month After One One One To
Price Book V Book V Conversion Conversion Conversion Day Week Month Date
Ticker ($) (%) (%) ($) ($) ($) (%) (%) (%) (%)
- ------ ------- ------- ------- ---------- ---------- ----------- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EFBC 13.750 NA NA 13.250 13.500 13.750 32.50 35.00 37.50 37.50
FAB 14.625 NA NA 13.625 14.125 14.875 36.25 41.25 48.75 46.25
RSLN 15.875 NA NA 15.000 15.938 16.000 50.00 59.38 60.00 58.75
AFBC 14.063 NA NA 12.875 12.938 14.000 28.75 29.38 40.00 40.63
HCFC 14.000 87.7 87.7 NA 12.500 13.500 NA 25.00 35.00 40.00
CENB 71.000 97.9 97.9 62.625 66.000 65.125 25.25 32.00 30.25 42.00
SCBS 13.250 94.4 94.4 13.000 13.750 13.500 30.00 37.50 35.00 32.50
BFFC 13.750 NA NA 12.313 12.500 13.875 23.13 25.00 38.75 37.50
RIVR 15.250 NA NA 13.688 13.875 15.000 36.88 38.75 50.00 52.50
PSFI 13.750 NA NA 11.641 11.688 12.500 16.41 16.88 25.00 37.50
CFNC 15.125 107.6 107.6 13.000 13.000 13.625 30.00 30.00 36.25 51.25
DCBI 13.750 93.7 93.7 12.125 12.125 12.063 21.25 21.25 20.63 37.50
FTNB 18.375 128.0 128.0 12.500 12.875 14.750 NA 28.75 47.50 83.75
CNBA 14.750 NA NA 12.938 12.625 12.625 29.38 26.25 26.25 47.50
SSFC 16.500 122.0 122.0 NA 12.500 12.375 NA 25.00 23.75 65.00
AFED 13.250 85.3 85.5 11.375 11.313 11.563 13.75 13.13 15.63 32.50
CBES 17.250 102.1 102.1 12.625 13.438 13.250 26.25 34.38 32.50 72.50
WEHO 13.875 98.7 98.7 10.750 10.625 10.500 7.50 6.25 5.00 38.75
HBEI 14.750 103.5 103.5 11.813 12.500 12.625 NA 25.00 26.25 47.50
PFFC 15.125 93.5 93.5 10.875 11.500 12.750 8.75 15.00 27.50 51.25
Maximum 71.000 128.0 128.0 62.625 66.000 65.125 50.00 59.38 60.00 83.75
Minimum 13.250 85.3 85.5 10.750 10.625 10.500 7.50 6.25 5.00 32.50
Average 17.603 101.2 101.2 15.334 15.466 15.913 26.00 28.26 33.08 47.63
Median 14.688 98.3 98.3 12.750 12.750 13.500 27.50 27.50 33.75 44.13
</TABLE>
<PAGE>
Table IV.4.a
Comparison of Pricing Ratios
<TABLE>
<CAPTION>
Group Percent Premium
Compared to (Discount) Versus
First ------------------ ------------------
Robinson Average Median Average Median
-------- ------- ------ ------- ------
<S> <C> <C> <C> <C> <C>
Comparison of PE ratio at
midpoint to:
- ---------------------------
Comparative group 11.4 19.7 15.5 (42.1) (26.5)
Illinois thrifts 11.4 17.7 17.0 (35.6) (32.9)
Midwest Region thrifts 11.4 16.6 15.9 (31.3) (28.3)
All public thrifts 11.4 16.2 15.8 (29.6) (27.8)
Recent conversions 11.4 18.2 16.8 (37.4) (32.1)
Comparison of PE ratio at
maximum to:
- ---------------------------
Comparative group 12.7 19.7 15.5 (35.5) (18.1)
Illinois thrifts 12.7 17.7 17.0 (28.2) (25.3)
Midwest Region thrifts 12.7 16.6 15.9 (23.5) (20.1)
All public thrifts 12.7 16.2 15.8 (21.6) (19.6)
Recent conversions 12.7 18.2 16.8 (30.2) (24.4)
Comparison of PE ratio at
supermaximum to:
- ---------------------------
Comparative group 14.0 19.7 15.5 (28.9) (9.7)
Illinois thrifts 14.0 17.7 17.0 (20.9) (17.6)
Midwest Region thrifts 14.0 16.6 15.9 (15.7) (11.9)
All public thrifts 14.0 16.2 15.8 (13.6) (11.4)
Recent conversions 14.0 18.2 16.8 (23.1) (16.7)
Comparison of PB ratio at
midpoint to:
- ---------------------------
Comparative group 64.6 96.9 97.8 (33.3) (33.9)
Illinois thrifts 64.6 121.5 113.4 (46.8) (43.0)
Midwest Region thrifts 64.6 129.4 114.1 (50.1) (43.4)
All public thrifts 64.6 139.2 130.8 (53.6) (50.6)
Recent conversions 64.6 71.6 72.1 (9.8) (10.4)
Comparison of PB ratio at
maximum to:
- ---------------------------
Comparative group 68.4 96.9 97.8 (29.4) (30.1)
Illinois thrifts 68.4 121.5 113.4 (43.7) (39.7)
Midwest Region thrifts 68.4 129.4 114.1 (47.1) (40.1)
All public thrifts 68.4 139.2 130.8 (50.9) (47.7)
Recent conversions 68.4 71.6 72.1 (4.5) (5.1)
Comparison of PB ratio at
supermaximum to:
- ---------------------------
Comparative group 72.2 96.9 97.8 (25.5) (26.2)
Illinois thrifts 72.2 121.5 113.4 (40.6) (36.3)
Midwest Region thrifts 72.2 129.4 114.1 (44.2) (36.7)
All public thrifts 72.2 139.2 130.8 (48.1) (44.8)
Recent conversions 72.2 71.6 72.1 0.8 0.1
</TABLE>
<PAGE>
Table IV.4.b
Comparison of Pricing Ratios -- Bank Related
<TABLE>
<CAPTION>
Group Percent Premium
Compared to (Discount) Versus
First ------------------ ------------------
Robinson Average Median Average Median
-------- ------- ------ ------- ------
<S> <C> <C> <C> <C> <C>
Comparison of PE ratio at
midpoint to:
- ---------------------------
Comparative group 11.4 19.7 15.5 (42.1) (26.5)
Other charter flips-Current 11.4 12.5 12.5 (8.8) (8.8)
Other charter flips-Conversion 11.4 15.4 15.4 (26.0) (26.0)
All pink sheet banks 11.4 12.4 11.8 (8.1) (3.4)
Illinois pink sheet banks 11.4 11.5 10.4 (0.9) 9.6
Comparison of PE ratio at
maximum to:
- ------------------------------
Other charter flips-Current 12.7 12.5 12.5 1.6 1.6
Other charter flips-Conversion 12.7 15.4 15.4 (17.5) (17.5)
All pink sheet banks 12.7 12.4 11.8 2.4 7.6
Illinois pink sheet banks 12.7 11.5 10.4 10.4 22.1
Comparison of PE ratio at
supermaximum to:
- ------------------------------
Other charter flips-Current 14.0 12.5 12.5 12.0 12.0
Other charter flips-Conversion 14.0 15.4 15.4 (9.1) (9.1)
All pink sheet banks 14.0 12.4 11.8 12.9 18.6
Illinois pink sheet banks 14.0 11.5 10.4 21.7 34.6
Comparison of PB ratio at
midpoint to:
- ------------------------------
Other charter flips-Current 64.6 113.5 113.5 (43.1) (43.1)
Other charter flips-Conversion 64.6 72.0 72.0 (10.3) (10.3)
All pink sheet banks 64.6 151.6 101.7 (57.4) (36.5)
Illinois pink sheet banks 64.6 125.7 105.7 (48.6) (38.9)
Comparison of PB ratio at
maximum to:
- ------------------------------
Other charter flips-Current 68.4 113.5 113.5 (39.7) (39.7)
Other charter flips-Conversion 68.4 72.0 72.0 (5.0) (5.0)
All pink sheet banks 68.4 151.6 101.7 (54.9) (32.7)
Illinois pink sheet banks 68.4 125.7 105.7 (45.6) (35.3)
Comparison of PB ratio at
supermaximum to:
- ------------------------------
Other charter flips-Current 72.2 113.5 113.5 (36.4) (36.4)
Other charter flips-Conversion 72.2 72.0 72.0 0.3 0.3
All pink sheet banks 72.2 151.6 101.7 (52.4) (29.0)
Illinois pink sheet banks 72.2 125.7 105.7 (42.6) (31.7)
</TABLE>
<PAGE>
Figure IV.1 -- SNL Index
% CHANGE SINCE
---------------------
SNL PREVIOUS
DATE INDEX DATE 12/31/95
---- ----- -------- --------
12/31/90 96.6
12/31/91 143.9 49.0%
12/31/92 201.1 39.7%
12/31/93 252.5 25.6%
12/31/94 244.7 -3.1%
12/31/95 376.5 53.9%
3/31/96 382.1 1.5% 1.5%
6/30/96 377.2 -1.3% 0.2%
9/30/96 429.3 13.8% 14.0%
12/31/96 483.6 12.6% 28.4%
3/4/97 562.1 16.2% 49.3%
[SNL INDEX GRAPH HERE]
<PAGE>
Figure IV.2 -- Selected Interest Rates
- ---------------------------------------------------------------
1 Year 5 Year 10 Year 30 Year
Fed Fds (*) T-bill Treas. Treas. Treas.
- ---------------------------------------------------------------
8/30/96 5.21 5.80 6.60 6.84 7.07
9/6/96 5.39 5.94 6.73 6.95 7.17
9/13/96 5.16 5.90 6.69 6.93 7.16
9/27/96 5.34 5.75 6.53 6.77 6.96
10/17/96 5.25 5.56 6.28 6.55 6.86
10/25/96 5.22 5.52 6.25 6.53 6.81
11/18/96 5.21 5.39 5.96 6.19 6.46
11/29/96 5.30 5.41 5.90 6.12 6.41
12/13/96 5.22 5.45 6.03 6.27 6.53
12/20/96 5.38 5.51 6.15 6.40 6.63
12/31/96 5.18 5.48 6.12 6.34 6.58
1/17/97 5.19 5.60 6.33 6.56 6.81
1/31/97 5.18 5.60 6.36 6.62 6.89
2/14/97 5.05 5.48 6.14 6.37 6.65
2/28/97 5.16 5.52 6.25 6.45 6.71
(*) Seven-day average for week ending two days earlier than date shown.
Rates August 30, 1996 to February 28, 1997
[INTEREST RATE GRAPH GOES HERE]
- ---------------------------------------------------------------
1 Year 5 Year 10 Year 30 Year
Fed Fds (*) T-bill Treas. Treas. Treas.
- ---------------------------------------------------------------
2/28/97 5.16 5.52 6.25 6.45 6.71
Current Yield Curve
[CURRENT YIELD GRAPH GOES HERE]
<PAGE>
EXHIBITS
<PAGE>
EXHIBIT I
<PAGE>
FERGUSON & COMPANY
- ------------------
Exhibit I - Firm Qualifications
Ferguson & Company (F&C), is a financial, economic, and regulatory
consulting firm providing services to financial institutions. It is located in
Irving, Texas. Its services to financial institutions include:
o Mergers and acquisition services
o Business plans
o Fairness opinions and conversion appraisals
o Litigation support
o Operational and efficiency consulting
o Human resources evaluation and management
F&C developed several financial institution databases of information
derived from periodic financial reports filed with regulatory authorities by
financial institutions. For example, F&C developed TAFS and BankSource. TAFS
includes thrifts filing TFR's with the OTS and BankSource includes banks and
savings banks filing call reports with the FDIC. Both databases of information
include information from the periodic reports plus numerous calculations derived
from F&C's analysis. In addition, both databases are interactive, permitting the
user to conduct merger analysis, do peer group comparisons, and a number of
other items. In 1994, F&C sold its electronic publishing segment to Sheshunoff
Information Services Inc., Austin, Texas.
Brief biographical information is presented below on F&C's principals:
WILLIAM C. FERGUSON, MANAGING PARTNER
Mr. Ferguson has approximately 30 years of experience providing various
services to financial institutions. He was a partner in a CPA firm prior to
founding F&C in 1984. Mr. Ferguson is a frequent speaker for financial
institution seminars and he has testified before Congressional Committees
several times on his analysis of the state of the thrift industry. Mr. Ferguson
has a B.A. degree from Austin Peay University and an M.S. degree from the
University of Tennessee. He is a CPA.
1
<PAGE>
FERGUSON & COMPANY
- ------------------
Exhibit I - Firm Qualifications
CHARLES M. HEBERT, PRINCIPAL
Mr. Hebert has over 30 years of experience providing services to and
managing financial institutions. He spent 7 years as a national bank examiner,
14 years in bank management, 5 years in thrift management, and has spent the
last 8 years on the F&C consulting staff. Mr. Hebert holds a B.S. degree from
Louisiana State University.
ROBIN L. FUSSELL, PRINCIPAL
Mr. Fussell has over 25 years of experience providing professional
services to and managing financial institutions. He worked on the audit staff of
a "Big Six" accounting firm for 12 years, served as CFO of a thrift for 3 years,
and has worked in financial institution consulting for the last 13 years. He is
a co-founder of F&C. He holds a B.S. degree from East Carolina University. He is
a CPA.
2
EXHIBIT II
<PAGE>
FERGUSON & COMPANY Exhibit 11.1 - Selected Publicly Traded Midwest Thrifts
- ------------------
<TABLE>
<CAPTION>
Deposit Current Current
Insurance Stock Market
Agency Price Value
Ticker Short Name City State Region (BIF/SAIF) Exchange IPO Date ($) ($M)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AADV Advantage Bancorp, Inc. Kenosha WI MW SAIF NASDAQ 03/23/92 35.500 116.27
ABCL Alliance Bancorp, Inc. Hinsdale IL MW SAIF NASDAQ 07/07/92 30.875 164.68
ABCW Anchor BanCorp Wisconsin Madison WI MW SAIF NASDAQ 07/16/92 46.750 216.03
ASBI Ameriana Bancorp New Castle IN MW SAIF NASDAQ 03/02/87 16.250 53.48
ASBP ASB Financial Corp. Portsmouth OH MW SAIF NASDAQ 05/11/95 11.500 19.80
BDJI First Federal Bancorporation Bemidji MN MW SAIF NASDAQ 04/04/95 18.500 12.96
BWFC Bank West Financial Corp. Grand Rapids MI MW SAIF NASDAQ 03/30/95 11.750 21.38
CAFI Camco Financial Corp. Cambridge OH MW SAIF NASDAQ NA 16.000 49.01
CAPS Capital Savings Bancorp, Inc. Jefferson City MO MW SAIF NASDAQ 12/29/93 14.000 26.49
CASH First Midwest Financial, Inc. Storm Lake IA MW SAIF NASDAQ 09/20/93 17.000 49.24
CBCI Calumet Bancorp, Inc. Dolton IL MW SAIF NASDAQ 02/20/92 36.250 84.79
CBIN Community Bank Shares New Albany IN MW SAIF NASDAQ 04/10/95 13.750 27.28
CBSB Charter Financial, Inc. Sparta IL MW SAIF NASDAQ 12/29/95 15.875 67.52
CFB Commercial Federal Corporation Omaha NE MW SAIF NYSE 12/31/84 36.125 776.34
CFSB CFSB Bancorp, Inc. Lansing MI MW SAIF NASDAQ 06/22/90 20.380 95.91
CIBI Community Investors Bancorp Bucyrus OH MW SAIF NASDAQ 02/07/95 17.500 11.08
CKFB CKF Bancorp, Inc. Danville KY MW SAIF NASDAQ 01/04/95 18.750 17.39
CMRN Cameron Financial Corp Cameron MO MW SAIF NASDAQ 04/03/95 16.500 47.01
COFI Charter One Financial Cleveland OH MW SAIF NASDAQ 01/22/88 46.625 2,165.39
CTZN CitFed Bancorp, Inc. Dayton OH MW SAIF NASDAQ 01/23/92 34.250 294.02
DFIN Damen Financial Corp. Schaumburg IL MW SAIF NASDAQ 10/02/95 14.500 54.68
DNFC D & N Financial Corp. Hancock MI MW SAIF NASDAQ 02/13/85 18.125 151.31
EFBI Enterprise Federal Bancorp West Chester OH MW SAIF NASDAQ 10/17/94 15.125 30.64
FBCI Fidelity Bancorp, Inc. Chicago IL MW SAIF NASDAQ 12/15/93 19.688 54.86
FBSI First Bancshares, Inc. Mountain Grove MO MW SAIF NASDAQ 12/22/93 19.250 23.01
FDEF First Defiance Financial Defiance OH MW SAIF NASDAQ 10/02/95 13.125 124.31
FFBI First Financial Bancorp, Inc. Belvidere IL MW SAIF NASDAQ 10/04/93 16.500 7.47
FFBZ First Federal Bancorp, Inc. Zanesville OH MW SAIF NASDAQ 07/13/92 17.500 27.51
FFHC First Financial Corp. Stevens Point WI MW SAIF NASDAQ 12/24/80 26.375 970.67
FFHH FSF Financial Corp. Hutchinson MN MW SAIF NASDAQ 10/07/94 17.125 55.32
FFHS First Franklin Corporation Cincinnati OH MW SAIF NASDAQ 01/26/88 17.000 19.66
FFKY First Federal Financial Corp. Elizabethtown KY MW SAIF NASDAQ 07/15/87 20.000 83.64
FFSL First Independence Corp. Independence KS MW SAIF NASDAQ 10/08/93 12.250 12.96
FFSW FirstFederal Financial Svcs Wooster OH MW SAIF NASDAQ 03/31/87 37.750 136.92
FFSX First Fed SB of Siouxland, MHC Sioux City IA MW SAIF NASDAQ 07/13/92 30.000 56.50
FFWC FFW Corp. Wabash IN MW SAIF NASDAQ 04/05/93 25.375 17.81
FFWD Wood Bancorp, Inc. Bowling Green OH MW SAIF NASDAQ 08/31/93 15.750 23.51
FFYF FFY Financial Corp. Youngstown OH MW SAIF NASDAQ 06/28/93 25.125 108.51
FISB First Indiana Corporation Indianapolis IN MW SAIF NASDAQ 08/02/83 28.250 234.57
FNGB First Northern Capital Corp. Green Bay WI MW SAIF NASDAQ 12/29/83 19.000 83.36
FTFC First Federal Capital Corp. La Crosse WI MW SAIF NASDAQ 11/02/89 28.750 176.15
FTSB Fort Thomas Financial Corp. Fort Thomas KY MW SAIF NASDAQ 06/28/95 11.750 18.49
GFCO Glenway Financial Corp. Cincinnati OH MW SAIF NASDAQ 11/30/90 22.500 26.72
GFSB GFS Bancorp, Inc. Grinnell IA MW SAIF NASDAQ 01/06/94 22.250 11.07
GSBC Great Southern Bancorp, Inc. Springfield MO MW SAIF NASDAQ 12/14/89 17.250 141.05
GTFN Great Financial Corporation Louisville KY MW SAIF NASDAQ 03/31/94 32.125 453.50
GWBC Gateway Bancorp, Inc. Catlettsburg KY MW SAIF NASDAQ 01/18/95 14.375 15.46
HALL Hallmark Capital Corp. West Allis WI MW SAIF NASDAQ 01/03/94 19.125 27.60
HBFW Home Bancorp Fort Wayne IN MW SAIF NASDAQ 03/30/95 19.750 52.39
HFFB Harrodsburg First Fin Bancorp Harrodsburg KY MW SAIF NASDAQ 10/04/95 15.750 31.98
HFFC HF Financial Corp. Sioux Falls SD MW SAIF NASDAQ 04/08/92 19.500 56.75
HFGI Harrington Financial Group Richmond IN MW SAIF NASDAQ NA 10.500 34.20
HFSA Hardin Bancorp, Inc. Hardin MO MW SAIF NASDAQ 09/29/95 14.375 13.73
HHFC Harvest Home Financial Corp. Cheviot OH MW SAIF NASDAQ 10/10/94 11.000 10.28
HMCI HomeCorp, Inc. Rockford IL MW SAIF NASDAQ 06/22/90 20.000 22.58
HMNF HMN Financial, Inc. Spring Valley MN MW SAIF NASDAQ 06/30/94 23.500 104.20
HOMF Home Federal Bancorp Seymour IN MW SAIF NASDAQ 01/23/88 27.250 91.33
HVFD Haverfield Corporation Cleveland OH MW SAIF NASDAQ 03/19/85 22.500 42.89
INBI Industrial Bancorp Bellevue OH MW SAIF NASDAQ 08/01/95 12.875 70.87
</TABLE>
1
<PAGE>
FERGUSON & COMPANY Exhibit 11.1 - Selected Publicly Traded Midwest Thrifts
- ------------------
<TABLE>
<CAPTION>
Deposit Current Current
Insurance Stock Market
Agency Price Value
Ticker Short Name City State Region (BIF/SAIF) Exchange IPO Date ($) ($M)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JSBA Jefferson Savings Bancorp Ballwin MO MW SAIF NASDAQ 04/08/93 28.375 118.66
KNK Kankakee Bancorp, Inc. Kankakee IL MW SAIF AMSE 01/06/93 27.375 38.73
KYF Kentucky First Bancorp, Inc. Cynthiana KY MW SAIF AMSE 08/29/95 11.875 16.49
LARK Landmark Bancshares, Inc. Dodge City KS MW SAIF NASDAQ 03/28/94 18.750 34.42
LOGN Logansport Financial Corp. Logansport IN MW SAIF NASDAQ 06/14/95 13.500 16.96
MAFB MAF Bancorp, Inc. Clarendon Hills IL MW SAIF NASDAQ 01/12/90 40.500 424.85
MARN Marion Capital Holdings Marion IN MW SAIF NASDAQ 03/18/93 22.000 40.57
MBLF MBLA Financial Corp. Macon MO MW SAIF NASDAQ 06/24/93 20.125 26.94
MCBS Mid Continent Bancshares Inc. El Dorado KS MW SAIF NASDAQ 06/27/94 25.000 50.42
MFBC MFB Corp. Mishawaka IN MW SAIF NASDAQ 03/25/94 19.234 34.12
MFFC Milton Federal Financial Corp. West Milton OH MW SAIF NASDAQ 10/07/94 13.750 30.32
MIVI Mississippi View Holding Co. Little Falls MN MW SAIF NASDAQ 03/24/95 14.875 12.71
MSBF MSB Financial, Inc. Marshall MI MW SAIF NASDAQ 02/06/95 21.000 13.48
MWBI Midwest Bancshares, Inc. Burlington IA MW SAIF NASDAQ 11/12/92 26.750 9.35
MWFD Midwest Federal Financial Baraboo WI MW SAIF NASDAQ 07/08/92 18.000 29.17
NASB North American Savings Bank Grandview MO MW SAIF NASDAQ 09/27/85 38.690 87.58
NEIB Northeast Indiana Bancorp Huntington IN MW SAIF NASDAQ 06/28/95 14.250 25.58
NWEQ Northwest Equity Corp. Amery WI MW SAIF NASDAQ 10/11/94 13.500 12.55
OFCP Ottawa Financial Corp. Holland MI MW SAIF NASDAQ 08/19/94 19.750 102.30
OHSL OHSL Financial Corp. Cincinnati OH MW SAIF NASDAQ 02/10/93 22.000 26.90
PCBC Perry County Financial Corp. Perryville MO MW SAIF NASDAQ 02/13/95 19.000 15.72
PERM Permanent Bancorp, Inc. Evansville IN MW SAIF NASDAQ 04/04/94 22.500 46.86
PFDC Peoples Bancorp Auburn IN MW SAIF NASDAQ 07/07/87 23.000 53.04
PTRS Potters Financial Corp. East Liverpool OH MW SAIF NASDAQ 12/31/93 20.000 10.12
PVFC PVF Capital Corp. Bedford Heights OH MW SAIF NASDAQ 12/30/92 16.750 38.92
QCFB QCF Bancorp, Inc. Virginia MN MW SAIF NASDAQ 04/03/95 18.750 26.74
SBCN Suburban Bancorporation, Inc. Cincinnati OH MW SAIF NASDAQ 09/30/93 17.750 26.18
SECP Security Capital Corporation Milwaukee WI MW SAIF NASDAQ 01/03/94 83.500 768.42
SFFC StateFed Financial Corporation Des Moines IA MW SAIF NASDAQ 01/05/94 18.380 14.50
SFSB SuburbFed Financial Corp. Flossmoor IL MW SAIF NASDAQ 03/04/92 22.656 28.43
SFSL Security First Corp. Mayfield Heights OH MW SAIF NASDAQ 01/22/88 17.750 88.29
SMBC Southern Missouri Bancorp, Inc Poplar Bluff MO MW SAIF NASDAQ 04/13/94 16.000 26.21
SMFC Sho-Me Financial Corp. Mt. Vernon MO MW SAIF NASDAQ 07/01/94 29.500 42.89
SPBC St. Paul Bancorp, Inc. Chicago IL MW SAIF NASDAQ 05/18/87 26.750 609.26
SSBK Strongsville Savings Bank Strongsville OH MW SAIF NASDAQ NA 22.750 57.58
STFR St. Francis Capital Corp. Milwaukee WI MW SAIF NASDAQ 06/21/93 30.500 163.36
STND Standard Financial, Inc. Chicago IL MW SAIF NASDAQ 08/01/94 20.375 329.53
SWBI Southwest Bancshares Hometown IL MW SAIF NASDAQ 06/24/92 19.880 52.43
TCB TCF Financial Corp. Minneapolis MN MW SAIF NYSE 06/17/86 44.625 1,551.04
THR Three Rivers Financial Corp. Three Rivers MI MW SAIF AMSE 08/24/95 15.125 12.88
WAYN Wayne Savings & Loan Co. MHC Wooster OH MW SAIF NASDAQ 06/25/93 26.000 38.97
WCBI Westco Bancorp Westchester IL MW SAIF NASDAQ 06/26/92 21.500 55.19
WEFC Wells Financial Corp. Wells MN MW SAIF NASDAQ 04/11/95 15.000 31.17
WFCO Winton Financial Corp. Cincinnati OH MW SAIF NASDAQ 08/04/88 13.000 25.82
Maximum 83.500 2,165.39
Minimum 10.500 7.47
Average 21.917 128.74
Median 19.250 40.57
</TABLE>
2
<PAGE>
FERGUSON & COMPANY Exhibit 11.1 - Selected Publicly Traded Midwest Thrifts
- ------------------
<TABLE>
<CAPTION>
Tangible ROAA ROACE
Price/ Current Current Current Total Equity/ Equity/ Core Before Before
LTM Price/ Price/ T Price/ Dividend Assets Assets T Assets EPS Extra Extra Merger Current
Core EPS Book V Book V Assets Yield ($000) (%) (%) ($) (%) (%) Target? Pricing
Ticker (x) (%) (%) (%) (%) MRQ MRQ MRQ LTM LTM LTM (Y/N) Date
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AADV 15.6 128.9 139.2 11.3 1.13 1,031,221 8.7 8.2 2.28 0.32 3.42 N 03/04/97
ABCL 19.3 147.0 151.1 12.5 - 667,964 8.5 8.3 1.60 0.47 5.72 N 03/04/97
ABCW 14.8 187.5 192.2 11.6 1.07 1,869,211 6.2 6.0 3.17 0.72 11.06 N 03/04/97
ASBI 15.5 121.7 121.8 13.5 3.69 396,755 11.1 11.1 .05 0.62 5.40 N 03/04/97
ASBP 19.5 106.1 106.1 17.7 3.48 111,824 15.7 15.7 0.59 0.60 2.72 N 03/04/97
BDJI 18.5 103.9 103.9 11.8 - 109,729 11.4 11.4 1.00 0.32 2.45 N 03/04/97
BWFC 23.5 94.2 94.2 14.9 2.38 143,186 15.9 15.9 0.50 0.77 4.12 N 03/04/97
CAFI 11.0 108.8 118.6 10.4 3.00 469,449 9.6 8.9 1.45 0.79 9.19 N 03/04/97
CAPS 13.3 132.8 132.8 11.2 1.71 235,687 8.5 8.5 1.05 0.63 6.65 N 03/04/97
CASH 12.3 112.7 127.3 13.3 2.12 369,885 11.8 10.6 1.38 0.75 6.38 N 03/04/97
CBCI 14.3 105.4 105.4 16.9 - 510,217 16.0 16.0 2.54 1.08 6.56 N 03/04/97
CBIN 13.9 107.1 107.3 11.6 2.47 234,600 10.9 10.8 0.99 0.59 5.03 N 03/04/97
CBSB 16.2 116.7 126.0 17.8 1.51 380,051 15.2 14.3 0.98 0.98 5.72 N 03/04/97
CFB 13.2 196.7 223.7 11.3 0.78 6,868,213 5.8 5.1 2.73 0.66 11.05 N 03/04/97
CFSB 13.6 153.6 153.6 11.6 2.36 829,800 7.5 7.5 1.50 0.69 8.54 N 03/04/97
CIBI 12.6 101.5 101.5 11.6 2.29 95,787 11.4 11.4 1.39 0.64 4.99 N 03/04/97
CKFB 22.9 110.2 110.2 29.0 2.35 60,038 25.2 25.2 0.82 1.30 4.87 N 03/04/97
CMRN 17.0 99.1 99.1 24.5 1.70 191,879 24.7 24.7 0.97 1.15 4.39 N 03/04/97
COFI 13.7 233.1 251.5 15.6 1.97 13,904,563 6.7 6.2 3.41 0.94 13.89 N 03/04/97
CTZN 14.9 159.0 179.4 10.1 0.93 2,918,160 6.3 5.7 2.30 0.51 7.68 N 03/04/97
DFIN 22.7 101.5 101.5 23.2 1.66 235,264 22.9 22.9 0.64 0.72 3.09 N 03/04/97
DNFC 12.8 177.7 179.8 10.3 - 1,473,054 5.9 5.8 1.42 0.67 11.58 N 03/04/97
EFBI 17.4 98.2 98.3 12.4 - 246,397 12.7 12.7 0.87 0.68 4.71 N 03/04/97
FBCI 17.6 111.4 111.7 11.3 1.63 484,106 10.2 10.1 1.12 0.50 4.37 N 03/04/97
FBSI 14.7 99.3 99.5 14.7 1.04 157,014 14.8 14.7 1.31 0.83 5.19 N 03/04/97
FDEF 23.0 106.6 106.6 22.9 2.44 543,411 21.5 21.5 0.57 0.78 3.26 N 03/04/97
FFBI 23.2 99.4 99.4 7.7 - 97,143 7.7 7.7 0.71 0.12 1.28 N 03/04/97
FFBZ 15.9 209.1 209.3 14.6 1.37 189,065 7.6 7.6 1.10 0.77 10.08 N 03/04/97
FFHC 14.5 236.6 244.2 17.0 2.28 5,700,431 7.2 7.0 1.82 0.91 12.48 N 03/04/97
FFHH 21.4 108.3 108.3 15.3 2.92 362,373 12.4 12.4 0.80 0.58 4.02 N 03/04/97
FFHS 16.4 99.7 100.4 8.8 1.88 222,302 8.9 8.8 1.04 0.13 1.35 N 03/04/97
FFKY 16.5 167.4 178.6 22.8 2.60 367,067 13.6 12.9 1.21 1.23 8.76 N 03/04/97
FFSL 15.5 108.1 108.1 11.9 2.04 108,914 11.0 11.0 0.79 0.58 4.84 N 03/04/97
FFSW 17.4 250.5 306.7 12.3 1.27 1,110,723 7.4 6.5 2.17 0.92 13.44 N 03/04/97
FFSX 17.2 151.1 152.4 12.4 2.40 457,311 8.2 8.1 1.74 0.41 4.90 N 03/04/97
FFWC 11.1 110.5 110.5 11.3 2.37 158,200 10.2 10.2 2.28 0.87 8.36 N 03/04/97
FFWD 13.6 115.1 115.1 14.7 2.54 159,693 12.8 12.8 1.16 0.92 6.68 N 03/04/97
FFYF 16.9 130.2 130.2 18.6 2.79 582,331 14.3 14.3 1.49 0.84 4.74 N 03/04/97
FISB 15.8 169.2 171.4 15.7 2.12 1,496,421 9.3 9.2 1.79 0.90 10.23 N 03/04/97
FNGB 17.4 118.7 118.7 13.5 3.37 615,503 11.4 11.4 1.09 0.56 4.61 N 03/04/97
FTFC 17.4 190.4 201.9 12.1 2.23 1,469,422 6.3 6.0 1.65 0.71 10.18 N 03/04/97
FTSB 24.5 117.9 117.9 20.3 2.13 91,109 17.2 17.2 0.48 0.51 2.32 N 03/04/97
GFCO 14.3 99.6 101.4 9.6 3.02 278,721 9.6 9.5 1.57 0.31 3.28 N 03/04/97
GFSB 11.7 110.6 110.6 12.7 1.80 87,625 11.5 11.5 1.91 0.96 8.10 N 03/04/97
GSBC 14.5 234.4 234.4 21.1 2.32 669,483 9.0 9.0 1.19 1.42 14.24 N 03/04/97
GTFN 24.2 161.7 168.5 15.7 1.49 2,897,162 9.7 9.3 1.33 0.73 7.00 N 03/04/97
GWBC 21.1 90.8 90.8 23.3 2.78 66,439 25.6 25.6 0.68 0.76 2.99 N 03/04/97
HALL 13.0 98.3 98.3 7.0 - 396,808 7.1 7.1 1.47 0.43 5.81 N 03/04/97
HBFW 19.4 115.2 115.2 16.1 1.01 325,168 14.0 14.0 1.02 0.52 3.36 N 03/04/97
HFFB 22.2 102.9 102.9 29.9 2.54 107,051 26.8 26.8 0.71 0.99 3.52 N 03/04/97
HFFC 13.8 115.0 115.3 10.3 1.85 552,735 9.3 9.2 1.41 0.61 6.67 N 03/04/97
HFGI 14.6 143.6 143.6 6.5 - 527,369 4.5 4.5 0.72 0.32 7.42 N 03/04/97
HFSA 18.9 95.9 95.9 14.2 2.78 97,015 14.8 14.8 0.76 0.49 2.82 N 03/04/97
HHFC 23.9 98.9 98.9 12.3 3.64 83,659 12.4 12.4 0.46 0.21 1.36 N 03/04/97
HMCI 22.2 108.2 108.2 6.7 - 335,824 6.2 6.2 0.90 0.11 1.72 N 03/04/97
HMNF 20.6 126.9 126.9 18.8 - 554,732 14.8 14.8 1.14 0.78 4.82 N 03/04/97
HOMF 13.0 169.4 175.4 14.0 1.47 650,433 8.3 8.0 2.09 1.01 12.18 N 03/04/97
HVFD 14.7 151.3 151.4 12.4 2.49 346,856 8.2 8.2 1.53 0.44 5.21 N 03/04/97
INBI 15.9 114.1 114.1 21.7 3.11 326,613 19.0 19.0 0.81 0.75 3.62 N 03/04/97
</TABLE>
3
<PAGE>
FERGUSON & COMPANY Exhibit 11.1 - Selected Publicly Traded Midwest Thrifts
- ------------------
<TABLE>
<CAPTION>
Tangible ROAA ROACE
Price/ Current Current Current Total Equity/ Equity/ Core Before Before
LTM Price/ Price/ T Price/ Dividend Assets Assets T Assets EPS Extra Extra Merger Current
Core EPS Book V Book V Assets Yield ($000) (%) (%) ($) (%) (%) Target? Pricing
Ticker (x) (%) (%) (%) (%) MRQ MRQ MRQ LTM LTM LTM (Y/N) Date
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
JSBA 16.5 131.4 159.5 10.5 1.41 1,128,339 7.2 6.0 1.72 0.23 3.21 N 03/04/97
KNK 17.3 106.2 113.6 11.1 1.75 350,643 10.4 9.8 1.58 0.50 4.95 N 03/04/97
KYF 16.5 109.5 109.5 18.8 4.21 87,874 17.2 17.2 0.72 0.87 3.88 N 03/04/97
LARK 17.1 105.2 105.2 15.5 2.13 221,978 14.7 14.7 1.10 0.80 4.91 N 03/04/97
LOGN 15.5 109.9 109.9 21.8 2.96 77,668 19.9 19.9 0.87 1.20 5.09 N 03/04/97
MAFB 13.4 169.5 196.4 13.2 0.89 3,230,341 7.8 6.8 3.03 0.68 9.57 N 03/04/97
MARN 16.9 101.5 101.5 23.1 3.64 175,806 22.7 22.7 1.30 1.15 4.90 N 03/04/97
MBLF 16.2 94.8 94.8 12.9 1.99 208,898 13.6 13.6 1.24 0.66 4.86 N 03/04/97
MCBS 12.4 129.1 129.1 14.2 1.60 355,525 10.6 10.6 2.01 1.05 8.88 N 03/04/97
MFBC 21.6 99.0 99.0 15.2 1.66 223,945 15.4 15.4 0.89 0.52 2.93 N 03/04/97
MFFC 23.3 111.9 111.9 17.3 4.36 175,707 15.4 15.4 0.59 0.61 3.24 N 03/04/97
MIVI 17.9 97.5 97.5 18.1 1.08 70,329 18.5 18.5 0.83 0.68 3.63 N 03/04/97
MSBF 13.4 107.1 107.1 20.5 2.38 66,541 19.1 19.1 1.57 1.29 6.07 N 03/04/97
MWBI 10.0 97.3 97.3 6.9 2.24 136,425 7.0 7.0 2.67 0.46 6.61 N 03/04/97
MWFD 16.8 176.6 184.8 14.8 1.67 194,707 8.4 8.1 1.07 1.04 11.26 N 03/04/97
NASB 11.0 171.2 177.7 12.3 2.07 711,088 7.2 7.0 3.51 1.13 15.19 N 03/04/97
NEIB 15.8 99.7 99.7 17.4 2.25 160,032 17.4 17.4 0.90 1.02 4.97 N 03/04/97
NWEQ 14.5 97.7 97.7 13.0 3.26 96,518 12.3 12.3 0.93 0.76 5.88 N 03/04/97
OFCP 20.6 135.7 171.7 12.4 1.82 827,275 9.1 7.3 0.96 0.40 3.11 N 03/04/97
OHSL 15.9 106.9 106.9 12.4 3.46 217,627 11.6 11.6 1.38 0.57 4.60 N 03/04/97
PCBC 15.7 103.7 103.7 19.6 2.11 80,408 18.9 18.9 1.21 0.71 3.69 N 03/04/97
PERM 23.4 116.9 118.1 11.4 1.33 412,967 9.7 9.6 0.96 0.24 2.37 N 03/04/97
PFDC 12.6 123.5 123.5 18.9 2.61 280,339 15.3 15.3 1.82 1.12 7.26 N 03/04/97
PTRS 22.7 98.3 98.3 8.1 1.40 125,497 8.2 8.2 0.88 0.03 0.27 N 03/04/97
PVFC 7.2 163.6 163.6 11.2 - 347,577 6.9 6.9 2.33 0.99 14.87 N 03/04/97
QCFB 12.4 102.2 102.2 18.0 - 148,321 17.6 17.6 1.51 1.24 6.18 N 03/04/97
SBCN 21.4 98.4 98.4 12.0 3.38 218,734 11.8 11.8 0.83 0.19 1.50 N 03/04/97
SECP 17.8 143.5 143.5 21.0 1.44 3,657,959 15.5 15.5 4.69 0.99 6.02 N 03/04/97
SFFC 14.5 97.9 97.9 17.4 2.18 82,809 17.8 17.8 1.27 1.01 5.29 N 03/04/97
SFSB 15.8 108.3 108.8 7.0 1.41 404,092 6.5 6.5 1.43 0.28 4.04 N 03/04/97
SFSL 12.4 153.2 156.0 14.1 2.48 624,296 9.2 9.1 1.43 0.94 9.99 N 03/04/97
SMBC 15.7 101.5 NA 16.4 3.13 159,653 16.2 NA 1.02 0.74 4.56 N 03/04/97
SMFC 17.8 142.8 142.8 14.4 - 298,037 10.1 10.1 1.66 0.79 7.14 N 03/04/97
SPBC 16.6 157.0 157.5 14.0 1.79 4,357,170 8.9 8.9 1.61 0.62 6.85 N 03/04/97
SSBK 12.9 133.4 135.9 10.2 2.11 567,490 7.6 7.5 1.76 0.68 8.38 N 03/04/97
STFR 17.1 128.5 135.3 11.6 1.57 1,409,316 8.9 8.5 1.78 0.72 7.31 N 03/04/97
STND 20.0 122.9 123.1 13.7 1.96 2,405,221 11.2 11.1 1.02 0.53 4.45 N 03/04/97
SWBI 15.4 131.6 131.6 13.7 3.82 382,375 10.4 10.4 1.29 0.72 6.30 N 03/04/97
TCB 16.0 282.3 293.4 21.9 1.68 7,090,862 7.8 7.5 2.79 1.24 16.13 N 03/04/97
THR 17.6 100.6 101.0 14.4 2.38 89,271 14.3 14.3 0.86 0.53 3.59 N 03/04/97
WAYN 24.1 170.8 170.8 15.6 3.54 250,057 9.1 9.1 1.08 0.28 2.97 N 03/04/97
WCBI 14.2 115.4 115.4 17.8 2.79 310,992 15.4 15.4 1.51 1.06 6.83 N 03/04/97
WEFC 15.6 110.5 110.5 15.5 - 201,326 14.0 14.0 0.96 0.61 4.21 N 03/04/97
WFCO 12.0 120.8 123.8 8.8 3.23 292,264 7.3 7.2 1.08 0.67 8.96 N 03/04/97
Maximum 24.5 282.3 306.7 29.9 4.36 13,904,563 26.8 26.8 4.69 1.42 16.13
Minimum 7.2 90.8 90.8 6.5 - 60,038 4.5 4.5 0.46 0.03 0.27
Average 16.6 129.4 133.3 14.7 1.94 863,529 12.1 11.9 1.40 0.71 6.13
Median 15.9 114.1 115.2 14.0 2.07 325,168 11.0 10.7 1.21 0.71 5.09
</TABLE>
4
<PAGE>
FERGUSON & COMPANY Exhibit 11.1 - Selected Publicly Traded Midwest Thrifts
- ------------------
ROAA ROACE
NPAs/ Price/ Core Before Before
Assets Core EPS Extra Extra
(%) EPS ($) (%) (%)
TICKER MRQ (x) MRQ MRQ MRQ
AADV 0.55 14.3 0.62 0.96 10.95
ABCL 0.26 21.4 0.36 0.66 7.72
ABCW 0.80 12.8 0.91 0.99 16.05
ASBI 0.41 16.9 0.24 0.90 8.20
ASBP 1.60 19.2 0.15 1.11 5.83
BDJI 0.22 16.0 0.29 0.71 6.25
BWFC 0.05 24.5 0.12 1.04 6.25
CAFI 0.35 12.5 0.32 1.05 10.82
CAPS 0.12 12.5 0.28 0.92 10.88
CASH 0.75 12.9 0.33 1.01 8.78
CBCI 1.57 13.7 0.66 1.35 8.39
CBIN 0.13 12.3 0.28 (0.21) (1.90)
CBSB 0.54 14.2 0.28 1.21 8.12
CFB 1.02 12.7 0.71 0.90 15.97
CFSB 0.24 12.4 0.41 1.06 13.94
CIBI 0.69 12.2 0.36 0.91 7.81
CKFB 0.52 21.3 0.22 1.31 5.19
CMRN 0.13 17.2 0.24 1.35 5.46
COFI 0.26 13.7 0.85 1.24 18.54
CTZN 0.52 13.2 0.65 0.83 12.72
DFIN 0.15 33.0 0.11 0.67 2.94
DNFC 0.55 11.9 0.38 0.90 16.05
EFBI 0.01 14.5 0.26 1.15 8.59
FBCI 0.65 16.4 0.30 0.69 6.77
FBSI 0.04 13.4 0.36 1.37 9.21
FDEF 0.41 27.3 0.12 0.87 3.93
FFBI 0.22 20.6 0.20 (0.70) (8.84)
FFBZ 0.66 18.2 0.24 0.90 11.97
FFHC 0.28 13.5 0.49 1.37 18.81
FFHH 0.04 17.8 0.24 0.81 6.24
FFHS 0.39 14.7 0.29 0.09 0.98
FFKY 0.10 15.2 0.33 1.53 11.17
FFSL 0.34 20.4 0.15 0.62 5.61
FFSW 0.16 10.5 0.90 0.29 2.45
FFSX 0.15 17.9 0.42 0.69 8.50
FFWC 0.11 10.8 0.59 1.09 10.79
FFWD 0.02 12.7 0.31 1.24 9.55
FFYF 0.86 17.5 0.36 1.27 7.38
FISB 1.78 18.1 0.39 1.17 12.62
FNGB 0.15 16.4 0.29 0.91 8.04
FTFC 0.12 12.8 0.56 (0.02) (0.25)
FTSB 1.68 16.3 0.18 1.16 6.58
GFCO 0.21 14.4 0.39 0.72 7.63
GFSB 1.65 11.4 0.49 1.14 9.93
GSBC 1.75 13.1 0.33 1.76 19.00
GTFN 0.41 21.1 0.38 0.96 9.92
GWBC 0.12 20.0 0.18 1.10 4.34
HALL 0.02 12.0 0.40 0.58 8.28
HBFW 0.00 19.0 0.26 0.80 5.66
HFFB 0.00 20.7 0.19 1.34 4.92
HFFC 0.54 12.5 0.39 0.92 9.99
HFGI 0.23 11.4 0.23 0.44 10.32
HFSA 0.18 15.0 0.24 0.93 5.92
HHFC 0.26 15.3 0.18 0.77 6.24
HMCI 3.51 27.8 0.18 0.41 6.76
HMNF 0.06 19.6 0.30 0.93 6.09
HOMF 0.54 12.2 0.56 1.35 16.41
HVFD 0.78 13.1 0.43 0.96 11.56
INBI 0.16 15.3 0.21 1.68 8.86
5
<PAGE>
FERGUSON & COMPANY Exhibit 11.1 - Selected Publicly Traded Midwest Thrifts
- ------------------
ROAA ROACE
NPAs/ Price/ Core Before Before
Assets Core EPS Extra Extra
(%) EPS ($) (%) (%)
TICKER MRQ (x) MRQ MRQ MRQ
JSBA 1.02 13.9 0.51 (1.01) (13.85)
KNK 0.60 13.2 0.52 0.91 8.90
KYF 0.00 16.5 0.18 1.05 5.33
LARK 0.23 16.2 0.29 1.19 7.99
LOGN 0.52 15.3 0.22 1.40 7.02
MAFB 0.40 12.2 0.83 1.14 14.80
MARN 1.04 16.7 0.33 1.51 6.66
MBLF 0.26 13.6 0.37 0.93 7.43
MCBS 0.14 11.2 0.56 1.25 11.77
MFBC 0.00 18.5 0.26 0.86 5.30
MFFC 0.17 24.6 0.14 0.88 5.28
MIVI 0.26 17.7 0.21 0.98 5.32
MSBF 0.47 12.8 0.41 1.54 7.93
MWBI 0.68 9.8 0.68 0.82 11.63
MWFD 0.24 17.3 0.26 0.21 2.45
NASB 2.79 11.0 0.88 0.71 10.15
NEIB 0.20 12.7 0.28 0.57 3.16
NWEQ 1.52 12.1 0.28 1.04 8.47
OFCP 0.18 17.6 0.28 (0.56) (5.68)
OHSL 0.01 18.3 0.30 (0.37) (3.14)
PCBC 0.00 18.3 0.26 1.43 7.65
PERM 1.08 18.2 0.31 0.69 7.17
PFDC 0.34 14.0 0.41 1.34 8.82
PTRS 2.20 25.0 0.20 (1.06) (12.06)
PVFC 0.53 8.9 0.47 1.36 20.42
QCFB NA 10.7 0.44 0.39 2.11
SBCN 0.26 17.1 0.26 0.70 5.88
SECP 0.11 14.0 1.49 1.57 9.93
SFFC 0.79 13.5 0.34 1.24 6.96
SFSB 0.25 14.9 0.38 0.66 10.05
SFSL 0.25 12.0 0.37 1.33 14.39
SMBC 0.61 14.8 0.27 1.06 6.65
SMFC 0.09 14.8 0.50 1.17 11.52
SPBC 0.15 14.9 0.45 1.01 11.40
SSBK 0.11 11.6 0.49 1.11 14.29
STFR 0.32 16.6 0.46 0.89 10.09
STND 0.18 19.6 0.26 0.70 25.30
SWBI 0.24 15.1 0.33 0.96 9.31
TCB 0.69 15.5 0.72 1.64 20.49
THR 1.23 15.1 0.25 0.91 6.35
WAYN 0.69 25.0 0.26 0.65 7.04
WCBI 0.50 13.8 0.39 1.49 9.66
WEFC NA 16.3 0.23 0.96 6.88
WFCO 0.39 10.8 0.30 1.04 14.35
Maximum 3.51 33.0 1.49 1.76 25.30
Minimum - 8.9 0.11 (1.06) (13.85)
Average 0.51 15.7 0.38 0.90 8.14
Median 0.26 14.9 0.32 0.96 8.04
6
<PAGE>
FERGUSON & COMPANY Exhibit II.2 - Selected Publicly Traded Illinois Thrifts
- ------------------
<TABLE>
<CAPTION>
Deposit Current Current
Insurance Stock Market
Agency Price Value
Ticker Short Name City State Region (BIF/SAIF) Exchange IPO Date ($) ($M)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ABCL Alliance Bancorp, Inc. Hinsdale IL MW SAIF NASDAQ 07/07/92 30.875 164.68
CBCI Calumet Bancorp, Inc. Dolton IL MW SAIF NASDAQ 02/20/92 36.250 84.79
CBSB Charter Financial, Inc. Sparta IL MW SAIF NASDAQ 12/29/95 15.875 67.52
DFIN Damen Financial Corp. Schaumburg IL MW SAIF NASDAQ 10/02/95 14.500 54.68
FBCI Fidelity Bancorp, Inc. Chicago IL MW SAIF NASDAQ 12/15/93 19.688 54.86
FFBI First Financial Bancorp, Inc. Belvidere IL MW SAIF NASDAQ 10/04/93 16.500 7.47
HMCI HomeCorp, Inc. Rockford IL MW SAIF NASDAQ 06/22/90 20.000 22.58
KNK Kankakee Bancorp, Inc. Kankakee IL MW SAIF AMSE 01/06/93 27.375 38.73
MAFB MAF Bancorp, Inc. Clarendon Hills IL MW SAIF NASDAQ 01/12/90 40.500 424.85
SFSB SuburbFed Financial Corp. Flossmoor IL MW SAIF NASDAQ 03/04/92 22.656 28.43
SPBC St. Paul Bancorp, Inc. Chicago IL MW SAIF NASDAQ 05/18/87 26.750 609.26
STND Standard Financial, Inc. Chicago IL MW SAIF NASDAQ 08/01/94 20.375 329.53
SWBI Southwest Bancshares Hometown IL MW SAIF NASDAQ 06/24/92 19.880 52.43
WCBI Westco Bancorp Westchester IL MW SAIF NASDAQ 06/26/92 21.500 55.19
Maximum 40.500 609.26
Minimum 14.500 7.47
Average 23.766 142.50
Median 20.938 55.03
</TABLE>
7
<PAGE>
FERGUSON & COMPANY Exhibit II.2 - Selected Publicly Traded Illinois Thrifts
- ------------------
<TABLE>
<CAPTION>
Tangible ROAA ROACE
Price/ Current Current Current Total Equity/ Equity/ Core Before Before
LTM Price/ Price/ T Price/ Dividend Assets Assets T Assets EPS Extra Extra Merger Current
Core EPS Book V Book V Assets Yield ($000) (%) (%) ($) (%) (%) Target? Pricing
Ticker (x) (%) (%) (%) (%) MRQ MRQ MRQ LTM LTM LTM (Y/N) Date
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ABCL 19.3 147.0 151.1 12.5 - 667,964 8.5 8.3 1.60 0.47 5.72 N 03/04/97
CBCI 14.3 105.4 105.4 16.9 - 510,217 16.0 16.0 2.54 1.08 6.56 N 03/04/97
CBSB 16.2 116.7 126.0 17.8 1.51 380,051 15.2 14.3 0.98 0.98 5.72 N 03/04/97
DFIN 22.7 101.5 101.5 23.2 1.66 235,264 22.9 22.9 0.64 0.72 3.09 N 03/04/97
FBCI 17.6 111.4 111.7 11.3 1.63 484,106 10.2 10.1 1.12 0.50 4.37 N 03/04/97
FFBI 23.2 99.4 99.4 7.7 - 97,143 7.7 7.7 0.71 0.12 1.28 N 03/04/97
HMCI 22.2 108.2 108.2 6.7 - 335,824 6.2 6.2 0.90 0.11 1.72 N 03/04/97
KNK 17.3 106.2 113.6 11.1 1.75 350,643 10.4 9.8 1.58 0.50 4.95 N 03/04/97
MAFB 13.4 169.5 196.4 13.2 0.89 3,230,341 7.8 6.8 3.03 0.68 9.57 N 03/04/97
SFSB 15.8 108.3 108.8 7.0 1.41 404,092 6.5 6.5 1.43 0.28 4.04 N 03/04/97
SPBC 16.6 157.0 157.5 14.0 1.79 4,357,170 8.9 8.9 1.61 0.62 6.85 N 03/04/97
STND 20.0 122.9 123.1 13.7 1.96 2,405,221 11.2 11.1 1.02 0.53 4.45 N 03/04/97
SWBI 15.4 131.6 131.6 13.7 3.82 382,375 10.4 10.4 1.29 0.72 6.30 N 03/04/97
WCBI 14.2 115.4 115.4 17.8 2.79 310,992 15.4 15.4 1.51 1.06 6.83 N 03/04/97
Maximum 23.2 169.5 196.4 23.2 3.82 4,357,170 22.9 22.9 3.03 1.08 9.57
Minimum 13.4 99.4 99.4 6.7 - 97,143 6.2 6.2 0.64 0.11 1.28
Average 17.7 121.5 125.0 13.3 1.37 1,010,815 11.2 11.0 1.43 0.60 5.10
Median 17.0 113.4 114.5 13.4 1.57 393,234 10.3 10.0 1.36 0.58 5.34
</TABLE>
8
<PAGE>
FERGUSON & COMPANY Exhibit II.2 - Selected Publicly Traded Illinois Thrifts
- ------------------
ROAA ROACE
NPAs/ Price/ Core Before Before
Assets Core EPS Extra Extra
(%) EPS ($) (%) (%)
Ticker MRQ (x) MRQ MRQ MRQ
ABCL 0.26 21.4 0.36 0.66 7.72
CBCI 1.57 13.7 0.66 1.35 8.39
CBSB 0.54 14.2 0.28 1.21 8.12
DFIN 0.15 33.0 0.11 0.67 2.94
FBCI 0.65 16.4 0.30 0.69 6.77
FFBI 0.22 20.6 0.20 (0.70) (8.84)
HMCI 3.51 27.8 0.18 0.41 6.76
KNK 0.60 13.2 0.52 0.91 8.90
MAFB 0.40 12.2 0.83 1.14 14.80
SFSB 0.25 14.9 0.38 0.66 10.05
SPBC 0.15 14.9 0.45 1.01 11.40
STND 0.18 19.6 0.26 0.70 25.30
SWBI 0.24 15.1 0.33 0.96 9.31
WCBI 0.50 13.8 0.39 1.49 9.66
Maximum 3.51 33.0 0.83 1.49 25.30
Minimum 0.15 12.2 0.11 (0.70) (8.84)
Average 0.66 17.9 0.38 0.80 8.66
Median 0.33 15.0 0.35 0.81 8.65
9
<PAGE>
FERGUSON & COMPANY Exhibit II.3 - Comparatives General
- ------------------
<TABLE>
<CAPTION>
Total Current Current
Number Assets Stock Market
of ($000) Price Value
Ticker Short Name City State Offices Mst RctQ IPO Date ($) ($M)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ALBC Albion Banc Corp. Albion NY 2 59,860 07/26/93 16.750 4.19
CKFB CKF Bancorp, Inc. Danville KY 1 60,038 01/04/95 18.750 17.39
GFSB GFS Bancorp, Inc. Grinnell IA 1 87,625 01/06/94 22.250 11.07
KSAV KS Bancorp, Inc. Kenly NC 3 100,840 12/30/93 21.500 14.26
LOGN Logansport Financial Corp. Logansport IN 1 77,668 06/14/95 13.500 16.96
MIVI Mississippi View Holding Co. Little Falls MN 1 70,329 03/24/95 14.875 12.71
NWEQ Northwest Equity Corp. Amery WI 3 96,518 10/11/94 13.500 12.55
SFFC StateFed Financial Corporation Des Moines IA 2 82,809 01/05/94 18.380 14.50
SOBI Sobieski Bancorp, Inc. South Bend IN 3 78,978 03/31/95 14.000 12.35
SZB SouthFirst Bancshares, Inc. Sylacauga AL 2 93,110 02/14/95 13.750 11.29
Maximum 3 100,840 22.250 17.39
Minimum 1 59,860 13.500 4.19
Average 2 80,778 16.726 12.73
Median 2 80,894 15.813 12.63
</TABLE>
10
<PAGE>
FERGUSON & COMPANY Exhibit II.4 - Comparatives Balance Sheets
- ------------------
<TABLE>
<CAPTION>
Total Mortgage- Investment & Loan
Total Cash and Backed Net Foreclosed Servicing Total Other Total
Assets Investments Securities Loans Real Estate Rights Intangibles Assets Deposits
($000) ($000) ($000) ($000) ($000) ($000) ($000) ($000) ($000)
Short Name MRQ MRQ MRQ MRQ MRQ MRQ MRQ MRQ MRQ
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Albion Banc Corp. 59,860 10,135 3,855 46,970 151 - - 2,604 47,104
CKF Bancorp, Inc. 60,038 5,662 7 53,218 227 - - 931 42,832
GFS Bancorp, Inc. 87,625 10,579 3,242 75,874 - - - 1,172 58,455
KS Bancorp, Inc. 100,840 16,531 1,393 81,511 66 - 10 2,722 82,346
Logansport Financial Corp. 77,668 18,549 6,411 56,802 - - - 2,317 57,396
Mississippi View Holding Co. 70,329 24,580 4,543 43,799 - - - 1,892 56,342
Northwest Equity Corp. 96,518 14,850 7,567 77,810 88 - - 3,341 62,440
StateFed Financial Corporation 82,809 10,667 - 68,006 1,797 - - 2,339 48,216
Sobieski Bancorp, Inc. 78,978 21,042 14,778 55,348 - - - 2,588 58,985
SouthFirst Bancshares, Inc. 93,110 23,797 NA 65,971 - NA - 3,158 64,696
Maximum 100,840 24,580 14,778 81,511 1,797 - 10 3,341 82,346
Minimum 59,860 5,662 - 43,799 - - - 931 42,832
Average 80,778 15,639 4,644 62,531 233 - 1 2,306 57,881
Median 80,894 15,691 3,855 61,387 33 - - 2,464 57,926
</TABLE>
11
<PAGE>
FERGUSON & COMPANY Exhibit II.4 - Comparatives Balance Sheets
- ------------------
<TABLE>
<CAPTION>
Regulatory
Total Subordinated Other Total Preferred Common Total Tangible
Borrowings Debt Liabilities Liabilities Equity Equity Equity Capital
($000) ($000) ($000) ($000) ($000) ($000) ($000) ($000)
Short Name MRQ MRQ MRQ MRQ MRQ MRQ MRQ MRQ
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Albion Banc Corp. 6,282 - 707 54,093 - 5,767 5,767 4,869
CKF Bancorp, Inc. 1,252 - 855 44,939 - 15,099 15,099 11,967
GFS Bancorp, Inc. 18,290 - 828 77,573 - 10,052 10,052 8,231
KS Bancorp, Inc. 4,000 - 773 87,119 - 13,721 13,721 NA
Logansport Financial Corp. 3,400 - 1,445 62,241 - 15,427 15,427 15,584
Mississippi View Holding Co. - - 951 57,293 - 13,035 13,035 10,638
Northwest Equity Corp. 21,756 - 495 84,691 - 11,827 11,827 NA
StateFed Financial Corporation 19,000 - 875 68,091 - 14,718 14,718 9,489
Sobieski Bancorp, Inc. 5,700 - 351 65,036 - 13,942 13,942 9,300
SouthFirst Bancshares, Inc. 14,008 - 1,385 80,089 - 13,021 13,021 11,794
Maximum 21,756 - 1,445 87,119 - 15,427 15,427 15,584
Minimum - - 351 44,939 - 5,767 5,767 4,869
Average 9,369 - 867 68,117 - 12,661 12,661 10,234
Median 5,991 - 842 66,564 - 13,378 13,378 10,064
</TABLE>
12
<PAGE>
FERGUSON & COMPANY Exhibit II.4 - Comparatives Balance Sheets
- ------------------
<TABLE>
<CAPTION>
Regulatory Regulatory Loan Loss
Core Total Tangible Core Risk-Based NPAs/ Reserves/ Reserves/
Capital Capital Capital/ Capital/ Capital/ Assets Assets NPLs
($000) ($000) Tangible Adj Tan Risk-Weightd (%) (%) (%)
Short Name MRQ MRQ Assets (%) Assets (%) Assets (%) MRQ MRQ MRQ
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Albion Banc Corp. 4,869 5,178 8.2 8.2 16.7 0.37 0.52 278.38
CKF Bancorp, Inc. 11,967 12,074 20.9 20.9 36.8 0.52 0.18 122.99
GFS Bancorp, Inc. 8,231 8,826 10.1 10.1 18.9 1.65 0.81 49.34
KS Bancorp, Inc. NA 14,013 NA NA NA 0.27 0.30 109.03
Logansport Financial Corp. 15,584 15,820 21.8 21.8 41.6 0.52 0.30 58.13
Mississippi View Holding Co. 10,638 11,067 14.9 14.9 31.7 0.26 1.25 474.05
Northwest Equity Corp. 7,435 7,914 NA NA NA 1.52 0.50 34.31
StateFed Financial Corporation 9,489 9,741 13.2 13.2 22.7 0.79 0.30 38.36
Sobieski Bancorp, Inc. 9,300 9,500 11.9 11.9 28.5 0.24 0.25 105.26
SouthFirst Bancshares, Inc. 11,794 11,997 12.7 12.7 23.5 0.53 0.27 51.22
Maximum 15,584 15,820 21.8 21.8 41.6 1.65 1.25 474.05
Minimum 4,869 5,178 8.2 8.2 16.7 0.24 0.18 34.31
Average 9,923 10,613 14.2 14.2 27.6 0.67 0.47 132.11
Median 9,489 10,404 13.0 13.0 26.0 0.52 0.30 81.70
</TABLE>
13
<PAGE>
FERGUSON & COMPANY Exhibit II.4 - Comparatives Balance Sheets
- ------------------
<TABLE>
<CAPTION>
Publicly Tangible Earn Assets/ Full-Time Loans Cash &
Reported Publicly Rep Int Bearing Equivalent Serviced Investments MBS/
Book Value Book Value Liabilities Employees For Others (ex MBS)/ Assets
($) ($) (%) (Actual) ($000) Assets (%) (%)
Short Name MRQ MRQ MRQ MRQ MRQ MRQ MRQ
<S> <C> <C> <C> <C> <C> <C> <C>
Albion Banc Corp. 23.06 23.06 109.8 26.00 11,367 10.49 6.44
CKF Bancorp, Inc. 17.02 17.02 134.3 8.00 - 9.42 0.01
GFS Bancorp, Inc. 20.12 20.12 113.9 16.00 15,618 8.37 3.70
KS Bancorp, Inc. 20.69 20.67 113.1 26.00 - 15.01 1.38
Logansport Financial Corp. 12.28 12.28 128.0 12.00 - 15.63 8.25
Mississippi View Holding Co. 15.25 15.25 123.1 21.00 - 28.49 6.46
Northwest Equity Corp. 13.82 13.82 108.3 34.00 24,642 7.55 7.84
StateFed Financial Corporation 18.78 18.78 117.7 NA - 12.88 -
Sobieski Bancorp, Inc. 17.05 17.05 118.6 NA NA 7.93 18.71
SouthFirst Bancshares, Inc. 15.81 15.81 115.5 NA NA NA NA
Maximum 23.06 23.06 134.3 34.00 24,642 28.49 18.71
Minimum 12.28 12.28 108.3 8.00 - 7.55 -
Average 17.39 17.39 118.2 20.43 6,453 12.86 5.87
Median 17.04 17.04 116.6 21.00 - 10.49 6.44
</TABLE>
14
<PAGE>
FERGUSON & COMPANY Exhibit II.5 - Comparatives Operations
- ------------------
<TABLE>
<CAPTION>
Net Income Loan Total Total Net Loan
Average Net Before Loss Noninterest Noninterest Chargeoffs/
Assets Income Extra Items ROAA ROAE Provision Income Expense Avg Loans
($000) ($000) ($000) (%) (%) ($000) ($000) ($000) (%)
Short Name LTM LTM LTM LTM LTM LTM LTM LTM LTM
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Albion Banc Corp. 57,693 (60) (60) (0.10) (1.00) 104 206 1,930 0.07
CKF Bancorp, Inc. 58,294 760 760 1.30 4.87 7 53 1,060 -
GFS Bancorp, Inc. 83,444 798 798 0.96 8.10 310 117 1,479 -
KS Bancorp, Inc. 93,529 825 825 0.88 5.94 69 133 1,841 -
Logansport Financial Corp. 76,158 913 913 1.20 5.09 12 112 1,250 -
Mississippi View Holding Co. 69,839 474 474 0.68 3.63 1 198 1,706 0.02
Northwest Equity Corp. 90,470 691 691 0.76 5.88 62 404 2,242 0.03
StateFed Financial Corporation 77,575 782 782 1.01 5.29 24 63 1,254 -
Sobieski Bancorp, Inc. 78,342 166 166 0.21 1.18 - 183 2,060 -
SouthFirst Bancshares, Inc. 89,607 (56) (56) (0.06) (0.43) 1 494 3,438 0.02
Maximum 93,529 913 913 1.30 8.10 310 494 3,438 0.07
Minimum 57,693 (60) (60) (0.10) (1.00) - 53 1,060 -
Average 77,495 529 529 0.68 3.86 59 196 1,826 0.01
Median 77,959 726 726 0.82 4.98 18 158 1,774 -
</TABLE>
15
<PAGE>
FERGUSON & COMPANY Exhibit II.5 - Comparatives Operations
- ------------------
<TABLE>
<CAPTION>
Common Dividend Interest Interest Net Interest Gain on Real
LTM EPS Dividends Payout Income/ Expense/ Income/ Sale/ Estate
After Extra Per Share Ratio Avg Assets Avg Assets Avg Assets Avg Assets Expense
($) ($) (%) (%) (%) (%) (%) ($000)
Short Name LTM LTM LTM LTM LTM LTM LTM LTM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Albion Banc Corp. (0.28) 0.31 NM 7.54 4.12 3.42 0.01 (21)
CKF Bancorp, Inc. 0.83 0.42 50.60 7.42 3.69 3.73 0.48 -
GFS Bancorp, Inc. 1.56 0.38 24.04 8.15 4.71 3.44 (0.08) -
KS Bancorp, Inc. 1.19 1.20 100.84 8.06 4.29 3.77 0.02 (51)
Logansport Financial Corp. 0.69 3.40 492.75 7.42 3.57 3.85 (0.06) -
Mississippi View Holding Co. 0.56 0.24 42.86 7.39 3.64 3.75 0.02 (15)
Northwest Equity Corp. 0.78 0.28 35.90 8.05 4.35 3.71 0.07 (57)
StateFed Financial Corporation 1.00 0.40 40.00 7.86 4.34 3.52 (0.03) (173)
Sobieski Bancorp, Inc. 0.20 - - 7.09 3.91 3.18 0.09 (3)
SouthFirst Bancshares, Inc. (0.07) 0.50 NM 7.55 4.08 3.48 0.18 (10)
Maximum 1.56 3.40 492.75 8.15 4.71 3.85 0.48 -
Minimum (0.28) - - 7.09 3.57 3.18 (0.08) (173)
Average 0.65 0.71 98.37 7.65 4.07 3.59 0.07 (33)
Median 0.74 0.39 41.43 7.55 4.10 3.62 0.02 (13)
</TABLE>
16
<PAGE>
FERGUSON & COMPANY Exhibit II.5 - Comparatives Operations
- ------------------
<TABLE>
<CAPTION>
Noninterest G&A Noninterest Net Oper Total Amortization Extra and
Income/ Expense/ Expense/ Expenses/ Nonrecurring of Tax After Tax
Avg Assets Avg Assets Avg Assets Avg Assets Expense Intangibles Provision Items
(%) (%) (%) (%) ($000) ($000) ($000) ($000)
Short Name LTM LTM LTM LTM LTM LTM LTM LTM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Albion Banc Corp. 0.36 3.38 3.35 3.02 275 - (62) -
CKF Bancorp, Inc. 0.09 1.82 1.82 1.73 274 - 409 -
GFS Bancorp, Inc. 0.14 1.77 1.77 1.63 288 - 136 -
KS Bancorp, Inc. 0.14 2.01 1.97 1.87 437 8 502 -
Logansport Financial Corp. 0.15 1.64 1.64 1.49 334 - 507 -
Mississippi View Holding Co. 0.28 2.46 2.44 2.18 363 - 285 -
Northwest Equity Corp. 0.45 2.54 2.48 2.09 350 - 474 -
StateFed Financial Corporation 0.08 1.84 1.62 1.76 291 - 420 -
Sobieski Bancorp, Inc. 0.23 2.63 2.63 2.40 414 - 100 -
SouthFirst Bancshares, Inc. 0.55 3.85 3.84 3.30 430 - 71 -
Maximum 0.55 3.85 3.84 3.30 437 8 507 -
Minimum 0.08 1.64 1.62 1.49 274 - (62) -
Average 0.25 2.39 2.36 2.15 346 1 284 -
Median 0.19 2.24 2.21 1.98 342 - 347 -
</TABLE>
17
<PAGE>
FERGUSON & COMPANY Exhibit II.5 - Comparatives Operations
- ------------------
<TABLE>
<CAPTION>
Core Yield on Cost of Interest Loan Loss
Efficiency Income/ Preferred Int Earning Int Bearing Effective Yield Provision/
Ratio Avg Assets Dividends Assets Liabilities Tax Rate Spread Avg Assets
(%) (%) ($000) (%) (%) (%) (%) (%)
Short Name LTM LTM LTM LTM LTM LTM LTM LTM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Albion Banc Corp. 89.45 0.20 - 7.96 4.77 NM 3.19 0.18
CKF Bancorp, Inc. 47.58 1.30 - 7.58 5.14 34.99 2.44 0.01
GFS Bancorp, Inc. 49.45 1.17 - 8.21 5.41 14.56 2.80 0.37
KS Bancorp, Inc. 51.50 1.18 - 8.14 5.20 37.83 2.94 0.07
Logansport Financial Corp. 41.04 1.51 - 7.75 4.72 35.70 3.03 0.02
Mississippi View Holding Co. 61.16 1.00 - 7.55 4.55 37.55 3.00 0.00
Northwest Equity Corp. 61.19 0.97 - 8.52 4.99 40.69 3.53 0.07
StateFed Financial Corporation 51.07 1.27 - 8.25 5.44 34.94 2.81 0.03
Sobieski Bancorp, Inc. 77.24 0.50 - 7.32 4.82 37.59 2.50 -
SouthFirst Bancshares, Inc. 95.54 0.05 - 7.90 4.94 473.33 2.96 0.00
Maximum 95.54 1.51 - 8.52 5.44 473.33 3.53 0.33
Minimum 41.04 0.05 - 7.32 4.55 14.56 2.44 -
Average 62.52 0.92 - 7.92 5.00 83.02 2.92 0.08
Median 56.33 1.09 - 7.93 4.97 37.55 2.95 0.02
</TABLE>
18
<PAGE>
FERGUSON & COMPANY Exhibit II.6 - Comparitives Pricing Characteristics
- ------------------
<TABLE>
<CAPTION>
Current Current Price/ Current
Stock Market LTM Price/
Abbreviated Price Value Core EPS Book V
Ticker Name City State ($) ($M) (x) (%)
<S> <C> <C> <C> <C> <C> <C> <C>
ALBC AlbionBancCorp-NY Albion NY 16.750 4.19 38.1 72.6
CKFB CKFBancorp-KY Danville KY 18.750 17.39 22.9 110.2
GFSB GFSBancorp,Inc.-IA Grinnell IA 22.250 11.07 11.7 110.6
KSAV KSBancorp,Inc-NC Kenly NC 21.500 14.26 13.5 103.9
LOGN LogansprtFinCrp-IN Logansport IN 13.500 16.96 15.5 109.9
MIVI MissViewHoldCo-MN Little Falls MN 14.875 12.71 17.9 97.5
NWEQ NorthwestEqty-WI Amery WI 13.500 12.55 14.5 97.7
SFFC StateFedFinCorp-IA Des Moines IA 18.380 14.50 14.5 97.9
SOBI SobieskiBancorp-IN South Bend IN 14.000 12.35 29.2 82.1
SZB SouthFstBncshrs-AL Sylacauga AL 13.750 11.29 NM 87.0
Maximum 22.250 17.39 38.1 110.6
Minimum 13.500 4.19 11.7 72.6
Average 16.726 12.73 19.7 96.9
Median 15.813 12.63 15.5 97.8
</TABLE>
19
<PAGE>
FERGUSON & COMPANY Exhibit II.6 - Comparitives Pricing Characteristics
- ------------------
<TABLE>
<CAPTION>
Tangible ROAA
Current Current Total Equity/ Equity/ Core Before
Price/ T Price/ Dividend Assets Assets T Assets EPS Extra
Book V Assets Yield ($000) (%) (%) ($) (%)
Ticker (%) (%) (%) MRQ MRQ MRQ LTM LTM
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ALBC 72.6 7.0 1.85 59,860 9.6 9.6 0.44 (0.10)
CKFB 110.2 29.0 2.35 60,038 25.2 25.2 0.82 1.30
GFSB 110.6 12.7 1.80 87,625 11.5 11.5 1.91 0.96
KSAV 104.0 14.1 2.79 100,840 13.6 13.6 1.59 0.88
LOGN 109.9 21.8 2.96 77,668 19.9 19.9 0.87 1.20
MIVI 97.5 18.1 1.08 70,329 18.5 18.5 0.83 0.68
NWEQ 97.7 13.0 3.26 96,518 12.3 12.3 0.93 0.76
SFFC 97.9 17.4 2.18 82,809 17.8 17.8 1.27 1.01
SOBI 82.1 15.6 2.00 78,978 17.7 17.7 0.48 0.21
SZB 87.0 12.2 3.64 93,110 14.0 14.0 0.05 (0.06)
Maximum 110.6 29.0 3.64 100,840 25.2 25.2 1.91 1.30
Minimum 72.6 7.0 1.08 59,860 9.6 9.6 0.05 (0.10)
Average 97.0 16.1 2.39 80,778 16.0 16.0 0.92 0.68
Median 97.8 14.9 2.26 80,894 15.8 15.8 0.85 0.82
</TABLE>
20
<PAGE>
FERGUSON & COMPANY Exhibit II.6 - Comparitives Pricing Characteristics
- ------------------
<TABLE>
<CAPTION>
ROACE ROAA ROACE
Before NPAs/ Price/ Core Before Before
Extra Merger Current Assets Core EPS Extra Extra
(%) Target? Pricing (%) EPS ($) (%) (%)
Ticker LTM (Y/N) Date MRQ (x) MRQ MRQ MRQ
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ALBC (1.00) N 03/04/97 0.37 139.6 0.03 (1.14) (11.45)
CKFB 4.87 N 03/04/97 0.52 21.3 0.22 1.31 5.19
GFSB 8.10 N 03/04/97 1.65 11.4 0.49 1.14 9.93
KSAV 5.94 N 03/04/97 0.27 14.1 0.38 1.11 7.96
LOGN 5.09 N 03/04/97 0.52 15.3 0.22 1.40 7.02
MIVI 3.63 N 03/04/97 0.26 17.7 0.21 0.98 5.32
NWEQ 5.88 N 03/04/97 1.52 12.1 0.28 1.04 8.47
SFFC 5.29 N 03/04/97 0.79 13.5 0.34 1.24 6.96
SOBI 1.18 N 03/04/97 0.24 31.8 0.11 0.66 3.78
SZB (0.43) N 03/04/97 0.53 31.3 0.11 0.55 3.92
Maximum 8.10 1.65 139.6 0.49 1.40 9.93
Minimum (1.00) 0.24 11.4 0.03 (1.14) (11.45)
Average 3.86 0.67 30.8 0.24 0.83 4.71
Median 4.98 0.52 16.5 0.22 1.08 6.14
</TABLE>
21
<PAGE>
FERGUSON & COMPANY Exhibit II.7 - Comparitives Risk Characteristics
- ------------------
<TABLE>
<CAPTION>
NPAs + Loans Net Loan
NPAs/ 0+ Pst Due/ NPAs/ Reserves/ Reserves/ Chargeoffs/
Assets Assets Equity Loans NPAs Avg Loans
(%) (%) (%) (%) (%) (%)
Short Name MRQ MRQ MRQ MRQ MRQ MRQ
<S> <C> <C> <C> <C> <C> <C>
Albion Banc Corp. 0.37 0.37 3.83 0.65 139.82 0.09
CKF Bancorp, Inc. 0.52 1.12 2.08 0.20 34.08 -
GFS Bancorp, Inc. 1.65 1.65 14.38 0.93 49.34 -
KS Bancorp, Inc. 0.27 0.27 2.02 0.37 109.03 -
Logansport Financial Corp. 0.52 0.52 2.63 0.41 58.13 -
Mississippi View Holding Co. 0.26 0.37 1.42 1.96 474.05 -
Northwest Equity Corp. 1.52 1.53 12.42 0.61 32.61 (0.04)
StateFed Financial Corporation 0.79 1.86 4.46 0.37 38.36 -
Sobieski Bancorp, Inc. 0.24 0.24 1.36 0.36 105.26 -
SouthFirst Bancshares, Inc. 0.53 0.91 3.76 0.38 51.22 -
Maximum 1.65 1.86 14.38 1.96 474.05 0.09
Minimum 0.24 0.24 1.36 0.20 32.61 (0.04)
Average 0.67 0.88 4.84 0.62 109.19 0.01
Median 0.52 0.72 3.20 0.40 54.68 -
</TABLE>
22
<PAGE>
FERGUSON & COMPANY Exhibit II.7 - Comparitives Risk Characteristics
- ------------------
Intangible One Year Earn Assets/
Loans/ Assets/ Cum Gap/ Net Int Bearing
Assets Equity Assets Loans Liabilities
(%) (%) (%) ($000) (%)
Short Name MRQ MRQ MRY MRQ MRQ
Albion Banc Corp. 78.98 - NA 46,970 109.77
CKF Bancorp, Inc. 88.82 - NA 53,218 134.33
GFS Bancorp, Inc. 87.40 - 13.67 75,874 113.86
KS Bancorp, Inc. 81.13 0.07 NA 81,511 113.08
Logansport Financial Corp. 73.44 - NA 56,802 128.00
Mississippi View Holding Co. 63.61 - NA 43,799 123.07
Northwest Equity Corp. 81.56 - (4.26) 77,810 108.27
StateFed Financial Corporation 82.43 - NA 68,006 117.71
Sobieski Bancorp, Inc. 70.33 - NA 55,348 118.64
SouthFirst Bancshares, Inc. 71.32 - (7.23) 65,971 115.48
Maximum 88.82 0.07 13.67 81,511 134.33
Minimum 63.61 - (7.23) 43,799 108.27
Average 77.90 0.01 0.73 62,531 118.22
Median 80.06 - (4.26) 61,387 116.60
23
<PAGE>
EXHIBIT III
<PAGE>
FERGUSON & COMPANY EXHIBIT III
- ------------------
FIRST ROBINSON S&L, FA
ROBINSON, IL
FINANCIAL HIGHLIGHTS
1993 1994 1995 YTD 9/96
($000's)
BALANCE SHEET:
Total Assets 41,922 44,593 54,872 64,497
% Change in Assets (1.45) 6.37 23.05 17.54
Total Loans 31,127 35,780 46,060 54,437
Deposits 37,450 39,857 49,575 57,115
Broker Originated Deposits -- -- -- --
CAPITAL:
Equity Capital 3,814 4,167 4,587 4,605
Tangible Capital 3,814 4,167 4,556 4,565
Core Capital 3,814 4,167 4,556 4,565
Risk-Based Capital 4,119 4,440 4,791 4,963
Equity Capital/Total Assets 9.10 9.34 8.36 7.14
Core Capital/Risk Based Assets 15.02 14.13 11.63 9.68
Core Capital/Adj Tang Assets 9.10 9.34 8.31 7.08
Tangible Cap/Tangible Assets 9.10 9.34 8.31 7.08
Risk-Based Cap/Risk-Wt Assets 16.22 15.05 12.23 10.52
PROFITABILITY:
Net Income(Loss) 461 362 380 9
Ret on Avg Assets Bef Ext Item 0.98 0.84 0.76 0.02
Return on Average Equity 11.52 9.07 8.63 0.26
Net Interest Income/Avg Assets 3.74 3.56 3.62 3.59
Noninterest Income/Avg Assets 0.59 0.58 0.60 0.70
Noninterest Expense/Avg Assets 2.75 2.73 3.00 3.68
Yield/Cost Spread 3.84 3.60 3.63 3.66
LIQUIDITY:
Int Earn Assets/Int Bear Liab 105.15 105.39 103.83 103.17
Brokered Deposits/Tot Deposits -- -- -- --
ASSET QUALITY:
Nonperf Lns+REO/Total Lns+REO 0.34 0.37 0.68 0.75
Nonaccrual Loans/Gross Loans -- -- 0.14 0.23
Nonaccrual Lns/Ln Loss Reserve -- -- 26.10 30.34
Repos Assets/Tot Assets 0.06 0.04 0.05 0.13
Net Chrg-Off/Av Adj Lns 0.12 0.25 0.11 0.27
Non 1-4 Cons&Conv Mtg Lns/TA 8.21 10.91 10.89 14.59
1
<PAGE>
FERGUSON & COMPANY EXHIBIT III
- ------------------
FIRST ROBINSON S&L, FA
ROBINSON, IL
SELECTED PEER GROUP RATIOS & RANKINGS
1993 1994 1995 YTD 9/96
Peer Group Category 2 2 3 3
CAPITAL:
Equity Capital/Total Assets 9.10 9.34 8.36 7.14
Peer Group Percentile 61 52 38 26
Core Cap/Adj Tangible Assets 9.10 9.34 8.31 7.08
Peer Group Percentile 61 53 40 26
Tangible Cap/Tangible Assets 9.10 9.34 8.31 7.08
Peer Group Percentile 61 53 40 26
Risk-Based Cap/Risk-Wt Assets 16.22 15.05 12.23 10.52
Peer Group Percentile 40 23 15 7
ASSET QUALITY:
Risk Assets/Total Assets 8.31 10.99 10.96 14.74
Peer Group Percentile 36 20 33 23
Risk Weighted Assts/Tot Assts 60.58 66.15 71.37 73.13
Peer Group Percentile 8 4 1 3
Nonaccrual Loans/Gross Loans - - 0.14 0.23
Peer Group Percentile 100 100 56 53
Repos Assets/Tot Assets 0.06 0.04 0.05 0.13
Peer Group Percentile 57 43 43 30
90+ Day Del Loans/Gross Loans 0.06 0.16 0.21 0.03
Peer Group Percentile 56 43 38 50
90Day P Due+NonAccr-(1-4)/LLR - 5.17 33.33 9.47
Peer Group Percentile 100 48 36 54
LIQUIDITY:
Avg Reg Liquidity Ratio 10.69 7.22 6.20 5.06
Peer Group Percentile 22 15 7 2
PROFITABILITY:
Ret on Avg Assets Bef Ext Item 0.98 0.84 0.76 0.02
Peer Group Percentile 52 55 49 26
Return on Equity Capital 10.83 8.69 8.28 0.26
Peer Group Percentile 44 57 62 26
Int Earn Assets/Int Bear Liab 105.15 105.39 103.83 103.17
Peer Group Percentile 44 39 26 20
Yield on Earning Assts 7.78 7.40 8.32 8.47
Peer Group Percentile 66 65 82 85
Cost of Funds 3.94 3.81 4.69 4.81
Peer Group Percentile 58 53 58 47
Yield/Cost Spread 3.84 3.60 3.63 3.66
Peer Group Percentile 72 67 79 78
2
<PAGE>
FERGUSON & COMPANY EXHIBIT III
- ------------------
FIRST ROBINSON S&L, FA
ROBINSON, IL
FINANCIAL HIGHLIGHTS
12/31/95 3/31/96 6/30/96 9/30/96
($000's)
BALANCE SHEET:
Total Assets 54,872 60,006 62,832 64,497
% Change in Assets 1.59 9.36 4.71 2.65
Total Loans 46,060 47,843 52,394 54,437
Deposits 49,575 53,374 55,199 57,115
Broker Originated Deposits -- -- -- --
CAPITAL:
Equity Capital 4,587 4,690 4,794 4,605
Tangible Capital 4,556 4,645 4,753 4,565
Core Capital 4,556 4,645 4,753 4,565
Risk-Based Capital 4,791 4,897 4,983 4,963
Equity Capital/Total Assets 8.36 7.82 7.63 7.14
Core Capital/Risk Based Assets 11.63 11.03 10.36 9.68
Core Capital/Adj Tang Assets 8.31 7.75 7.57 7.08
Tangible Cap/Tangible Assets 8.31 7.75 7.57 7.08
Risk-Based Cap/Risk-Wt Assets 12.23 11.63 10.86 10.52
PROFITABILITY:
Net Income(Loss) 81 89 108 (188)
Ret on Avg Assets Bef Ext Item 0.60 0.62 0.70 (1.18)
Return on Average Equity 7.13 7.67 9.11 (16.00)
Net Interest Income/Avg Assets 3.56 3.43 3.58 3.74
Noninterest Income/Avg Assets 0.56 0.87 0.63 0.62
Noninterest Expense/Avg Assets 3.29 2.97 2.87 5.12
Yield/Cost Spread 3.60 3.48 3.64 3.82
LIQUIDITY:
Int Earn Assets/Int Bear Liab 103.83 103.40 103.30 103.17
Brokered Deposits/Tot Deposits -- -- -- --
ASSET QUALITY:
Nonperf Lns+REO/Total Lns+REO 0.68 0.66 0.43 0.75
Nonaccrual Loans/Gross Loans 0.14 0.30 -- 0.23
Nonaccrual Lns/Ln Loss Reserve 26.10 53.38 -- 30.34
Repos Assets/Tot Assets 0.05 0.03 0.12 0.13
Net Chrg-Off/Av Adj Lns 0.25 0.26 0.41 0.14
Non 1-4 Cons&Conv Mtg Lns/TA 10.89 12.55 15.08 14.59
3
<PAGE>
FERGUSON & COMPANY EXHIBIT III
- ------------------
FIRST ROBINSON S&L, FA
ROBINSON, IL
SELECTED PEER GROUP RATIOS & RANKINGS
12/31/95 3/31/96 6/30/96 9/30/96
Peer Group Category 2 2 3 3
CAPITAL:
Equity Capital/Total Assets 8.36 7.82 7.63 7.14
Peer Group Percentile 38 32 30 26
Core Cap/Adj Tangible Assets 8.31 7.75 7.57 7.08
Peer Group Percentile 40 34 31 26
Tangible Cap/Tangible Assets 8.31 7.75 7.57 7.08
Peer Group Percentile 40 34 31 26
Risk-Based Cap/Risk-Wt Assets 12.23 11.63 10.86 10.52
Peer Group Percentile 15 11 6 7
ASSET QUALITY:
Risk Assets/Total Assets 10.96 12.60 15.23 14.74
Peer Group Percentile 33 27 20 23
Risk Weighted Assts/Tot Assts 71.37 70.20 73.00 73.13
Peer Group Percentile 1 3 3 3
Nonaccrual Loans/Gross Loans 0.14 0.30 - 0.23
Peer Group Percentile 56 53 100 53
Repos Assets/Tot Assets 0.05 0.03 0.12 0.13
Peer Group Percentile 43 50 32 30
90+ Day Del Loans/Gross Loans 0.21 0.08 0.05 0.03
Peer Group Percentile 38 48 47 50
90Day P Due+NonAccr-(1-4)/LLR 33.33 34.21 7.79 9.47
Peer Group Percentile 36 35 59 54
LIQUIDITY:
Avg Reg Liquidity Ratio 6.20 7.68 5.12 5.06
Peer Group Percentile 7 17 3 2
PROFITABILITY:
Ret on Avg Assets Bef Ext Item 0.60 0.62 0.70 (1.18)
Peer Group Percentile 40 41 39 18
Return on Equity Capital 7.06 7.59 9.01 (16.33)
Peer Group Percentile 53 58 65 14
Int Earn Assets/Int Bear Liab 103.83 103.40 103.30 103.17
Peer Group Percentile 26 23 22 20
Yield on Earning Assts 8.63 8.40 8.33 8.65
Peer Group Percentile 86 84 81 88
Cost of Funds 5.03 4.92 4.68 4.84
Peer Group Percentile 47 43 55 46
Yield/Cost Spread 3.60 3.48 3.64 3.82
Peer Group Percentile 78 75 76 81
4
<PAGE>
EXHIBIT IV
<PAGE>
FERGUSON & COMPANY EXHIBIT IV
- ------------------
ALBION FS&LA
ALBION, NY
ALBC FINANCIAL HIGHLIGHTS
1993 1994 1995 YTD 9/96
($000's)
BALANCE SHEET:
Total Assets 50,282 55,371 56,264 59,253
% Change in Assets 21.69 10.12 1.61 5.31
Total Loans 39,666 47,042 44,124 47,108
Deposits 36,310 38,494 46,432 47,058
Broker Originated Deposits - - - -
CAPITAL:
Equity Capital 4,390 4,787 4,992 4,909
Tangible Capital 4,390 4,787 4,916 4,869
Core Capital 4,390 4,787 4,916 4,869
Risk-Based Capital 4,494 5,011 5,160 5,178
Equity Capital/Total Assets 8.73 8.65 8.87 8.28
Core Capital/Risk Based Assets 16.97 15.63 16.39 15.68
Core Capital/Adj Tang Assets 8.73 8.65 8.75 8.22
Tangible Cap/Tangible Assets 8.73 8.65 8.75 8.22
Risk-Based Cap/Risk-Wt Assets 17.37 16.36 17.20 16.67
PROFITABILITY:
Net Income(Loss) 392 357 169 (87)
Ret on Avg Assets Bef Ext Item 0.86 0.68 0.29 (0.20)
Return on Average Equity 10.45 7.78 3.47 (2.31)
Net Interest Income/Avg Assets 3.51 3.83 3.27 3.46
Noninterest Income/Avg Assets 0.49 0.32 0.37 0.45
Noninterest Expense/Avg Assets 2.69 2.90 3.12 3.97
Yield/Cost Spread 3.40 3.79 3.28 3.59
LIQUIDITY:
Int Earn Assets/Int Bear Liab 109.29 108.07 105.09 105.06
Brokered Deposits/Tot Deposits - - - -
ASSET QUALITY:
Nonperf Lns+REO/Total Lns+REO 1.04 0.64 0.82 0.78
Nonaccrual Loans/Gross Loans 0.86 0.46 0.73 0.23
Nonaccrual Lns/Ln Loss Reserve 281.30 99.11 131.97 44.94
Repos Assets/Tot Assets 0.07 0.06 0.04 0.19
Net Chrg-Off/Av Adj Lns (0.02) 0.07 0.02 0.09
Non 1-4 Cons&Conv Mtg Lns/TA 4.40 4.70 4.51 4.13
1
<PAGE>
FERGUSON & COMPANY EXHIBIT IV
- ------------------
CENTRAL KENTUCKY FSB
DANVILLE, KY
CKFB FINANCIAL HIGHLIGHTS
1993 1994 1995 YTD 9/96
($000's)
BALANCE SHEET:
Total Assets 50,050 56,377 56,545 59,900
% Change in Assets 3.51 12.64 0.30 5.93
Total Loans 41,974 45,441 49,997 53,194
Deposits 43,599 44,273 43,126 45,696
Broker Originated Deposits - - - -
CAPITAL:
Equity Capital 5,664 11,290 12,295 12,849
Tangible Capital 5,664 10,989 11,781 12,441
Core Capital 5,664 10,989 11,781 12,441
Risk-Based Capital 5,740 11,065 11,881 12,559
Equity Capital/Total Assets 11.32 20.03 21.74 21.45
Core Capital/Risk Based Assets 21.41 39.04 33.63 36.44
Core Capital/Adj Tang Assets 11.32 19.65 21.03 20.91
Tangible Cap/Tangible Assets 11.32 19.65 21.03 20.91
Risk-Based Cap/Risk-Wt Assets 21.70 39.31 33.92 36.79
PROFITABILITY:
Net Income(Loss) 560 542 764 622
Ret on Avg Assets Bef Ext Item 1.29 1.02 1.37 1.42
Return on Average Equity 11.78 6.39 6.47 6.57
Net Interest Income/Avg Assets 3.21 2.98 3.87 3.68
Noninterest Income/Avg Assets 0.16 0.16 0.16 0.81
Noninterest Expense/Avg Assets 1.35 1.60 1.89 2.37
Yield/Cost Spread 2.93 2.46 3.11 2.83
LIQUIDITY:
Int Earn Assets/Int Bear Liab 110.09 123.66 125.92 126.23
Brokered Deposits/Tot Deposits - - - -
ASSET QUALITY:
Nonperf Lns+REO/Total Lns+REO 1.41 1.48 1.09 1.65
Nonaccrual Loans/Gross Loans 0.25 - 0.00 0.63
Nonaccrual Lns/Ln Loss Reserve 136.84 - 2.00 288.14
Repos Assets/Tot Assets 0.07 - - -
Net Chrg-Off/Av Adj Lns - - - -
Non 1-4 Cons&Conv Mtg Lns/TA 10.59 10.51 13.09 13.81
2
<PAGE>
FERGUSON & COMPANY EXHIBIT IV
- ------------------
GRINNELL FSB
GRINNELL, IA
GFSB FINANCIAL HIGHLIGHTS
1993 1994 1995 YTD 9/96
($000's)
BALANCE SHEET:
Total Assets 59,489 61,028 79,392 83,951
% Change in Assets 18.60 2.59 30.09 5.74
Total Loans 36,501 49,805 65,255 74,784
Deposits 51,196 43,412 47,780 54,895
Broker Originated Deposits -- -- -- --
CAPITAL:
Equity Capital 4,194 6,779 7,725 8,397
Tangible Capital 4,167 6,779 7,776 8,444
Core Capital 4,167 6,779 7,776 8,444
Risk-Based Capital 4,534 7,179 8,180 9,045
Equity Capital/Total Assets 7.05 11.11 9.73 10.00
Core Capital/Risk Based Assets 14.22 20.40 17.53 17.61
Core Capital/Adj Tang Assets 7.01 11.11 9.79 10.05
Tangible Cap/Tangible Assets 7.01 11.11 9.79 10.05
Risk-Based Cap/Risk-Wt Assets 15.47 21.60 18.45 18.86
PROFITABILITY:
Net Income(Loss) 411 534 670 515
Ret on Avg Assets Bef Ext Item 0.84 0.89 0.97 0.85
Return on Average Equity 11.51 9.73 9.28 8.45
Net Interest Income/Avg Assets 2.76 3.05 2.88 3.22
Noninterest Income/Avg Assets 0.26 0.32 0.28 0.39
Noninterest Expense/Avg Assets 1.63 1.96 1.70 2.12
Yield/Cost Spread 2.57 2.80 2.43 2.84
LIQUIDITY:
Int Earn Assets/Int Bear Liab 105.79 111.62 109.57 110.41
Brokered Deposits/Tot Deposits -- -- -- --
ASSET QUALITY:
Nonperf Lns+REO/Total Lns+REO 1.44 0.17 0.13 1.84
Nonaccrual Loans/Gross Loans -- 0.06 0.13 1.81
Nonaccrual Lns/Ln Loss Reserve -- 7.25 21.29 201.02
Repos Assets/Tot Assets 0.38 0.05 - - --
Net Chrg-Off/Av Adj Lns 0.42 -- 0.01 0.00
Non 1-4 Cons&Conv Mtg Lns/TA 16.42 24.31 24.69 24.80
3
<PAGE>
FERGUSON & COMPANY EXHIBIT IV
- ------------------
KENLY SVG BK SSB
KENLY, NC
KSAV FINANCIAL HIGHLIGHTS
1993 1994 1995 YTD 9/96
($000's)
BALANCE SHEET:
Total Assets 82,838 79,607 87,228 95,973
% Change in Assets 12.95 (3.90) 9.57 10.03
Securities-Book Value 9,041 11,481 11,022 9,803
Securities-Fair Value 9,095 11,323 11,022 9,806
Total Loans & Leases 60,566 63,965 70,312 79,349
Total Deposits 68,130 66,457 71,301 78,086
Loan/Deposit Ratio 88.90 96.25 98.61 101.62
Provision for Loan Losses 71 12 10 63
CAPITAL:
Equity Capital 10,504 11,758 12,291 12,724
Total Qualifying Capital(Est) 10,683 11,859 12,147 12,615
Equity Capital/Average Assets 13.45 14.48 14.21 13.37
Tot Qual Cap/Rk Bsd Asts(Est) 26.17 27.70 26.00 26.52
Tier 1 Cap/Rsk Bsed Asts(Est) 25.65 27.18 25.50 25.89
T1 Cap/Avg Assets(Lev Est) 14.15 14.30 13.22 12.43
Dividends Declared/Net Income -- -- 75.53 28.68
PROFITABILITY:
Net Income(Loss) 550 1,151 993 523
Return on Average Assets 0.70 1.42 1.15 0.73
Return on Average Equity Cap 6.53 10.34 8.03 5.55
Net Interest Margin 3.96 4.01 4.04 3.79
Net Int Income/Avg Assets 3.98 4.07 3.80 3.61
Noninterest Income/Avg Assets 0.07 0.08 0.10 0.13
Noninterest Exp/Avg Assets 2.86 1.88 2.04 2.50
ASSET QUALITY:
NPL+Frcl RE/Lns+Frcl RE 0.55 0.22 0.35 0.94
NPA's/Equity + LLR 3.13 1.17 1.96 5.75
LLR/Nonperf & Restrcd Lns 75.63 159.29 95.10 55.53
Foreclosed RE/Total Assets 0.07 -- -- 0.22
90+ Day Del Loans/Total Loans -- -- -- --
Loan Loss Reserves/Total Lns 0.35 0.35 0.33 0.37
Net Charge-Offs/Average Loans -- -- -- --
Dom Risk R/E Lns/Tot Dom Lns 1.61 5.50 4.36 6.43
LIQUIDITY:
Brokered Dep/Total Dom Deps -- -- -- --
$100M+ Time Dep/Total Dom Dep 13.68 12.71 15.25 17.07
Int Earn Assets/Int Bear Liab 122.66 118.42 118.71 116.94
Pledged Sec/Total Sec 1.11 2.61 2.72 4.08
Fair Value Sec/Amort Cost Sec 100.60 99.99 105.54 106.95
4
<PAGE>
FERGUSON & COMPANY EXHIBIT IV
- ------------------
LOGANSPORT SAVINGS BANK, FSB
LOGANSPORT, IN
LOGN FINANCIAL HIGHLIGHTS
1993 1994 1995 YTD 9/96
($000's)
BALANCE SHEET:
Total Assets 56,229 59,452 70,750 76,313
% Change in Assets 14.46 5.73 19.00 7.86
Total Loans 38,014 43,691 49,058 55,882
Deposits 49,558 51,202 52,502 55,933
Broker Originated Deposits -- -- -- --
CAPITAL:
Equity Capital 6,397 6,935 16,672 16,477
Tangible Capital 6,397 7,131 16,671 16,705
Core Capital 6,397 7,131 16,671 16,705
Risk-Based Capital 6,598 7,337 16,894 16,938
Equity Capital/Total Assets 11.38 11.66 23.56 21.59
Core Capital/Risk Based Assets 17.30 21.31 42.94 41.06
Core Capital/Adj Tang Assets 11.38 11.93 23.56 21.82
Tangible Cap/Tangible Assets 11.38 11.93 23.56 21.82
Risk-Based Cap/Risk-Wt Assets 17.84 21.93 43.51 41.64
PROFITABILITY:
Net Income(Loss) 777 734 851 587
Ret on Avg Assets Bef Ext Item 1.39 1.27 1.30 1.07
Return on Average Equity 12.22 11.01 6.67 4.73
Net Interest Income/Avg Assets 3.72 3.27 3.18 3.55
Noninterest Income/Avg Assets 0.33 0.30 0.48 0.36
Noninterest Expense/Avg Assets 1.64 1.66 1.57 2.23
Yield/Cost Spread 3.50 3.09 2.56 2.80
LIQUIDITY:
Int Earn Assets/Int Bear Liab 109.15 108.43 125.00 123.15
Brokered Deposits/Tot Deposits -- -- -- --
ASSET QUALITY:
Nonperf Lns+REO/Total Lns+REO 1.27 0.64 0.63 0.51
Nonaccrual Loans/Gross Loans -- -- -- --
Nonaccrual Lns/Ln Loss Reserve -- -- -- --
Repos Assets/Tot Assets -- -- -- --
Net Chrg-Off/Av Adj Lns -- -- 0.01 (0.00)
Non 1-4 Cons&Conv Mtg Lns/TA 4.91 3.71 5.36 7.67
5
<PAGE>
FERGUSON & COMPANY EXHIBIT IV
- ------------------
COMMUNITY FS&LA
LITTLE FALLS, MN
MIVI FINANCIAL HIGHLIGHTS
1993 1994 1995 YTD 9/96
($000's)
BALANCE SHEET:
Total Assets 64,942 62,111 69,212 69,988
% Change in Assets (2.47) (4.36) 11.43 1.12
Total Loans 44,315 44,310 43,438 43,494
Deposits 58,783 55,312 54,689 56,594
Broker Originated Deposits - - - -
CAPITAL:
Equity Capital 5,646 6,137 10,912 10,643
Tangible Capital 5,634 6,043 10,692 10,404
Core Capital 5,634 6,043 10,692 10,404
Risk-Based Capital 5,985 6,419 11,092 10,834
Equity Capital/Total Assets 8.69 9.88 15.77 15.21
Core Capital/Risk Based Assets 17.01 18.90 32.13 30.46
Core Capital/Adj Tang Assets 8.68 9.74 15.50 14.92
Tangible Cap/Tangible Assets 8.68 9.74 15.50 14.92
Risk-Based Cap/Risk-Wt Assets 18.07 20.08 33.33 31.72
PROFITABILITY:
Net Income(Loss) 748 414 837 338
Ret on Avg Assets Bef Ext Item 1.14 0.65 1.22 0.65
Return on Average Equity 14.19 7.03 8.46 4.20
Net Interest Income/Avg Assets 3.25 3.40 3.63 3.45
Noninterest Income/Avg Assets 0.39 0.40 0.53 0.47
Noninterest Expense/Avg Assets 2.05 2.40 2.17 2.84
Yield/Cost Spread 3.06 3.23 3.21 2.93
LIQUIDITY:
Int Earn Assets/Int Bear Liab 108.19 108.61 115.61 116.43
Brokered Deposits/Tot Deposits - - - -
ASSET QUALITY:
Nonperf Lns+REO/Total Lns+REO 0.55 0.09 0.22 0.14
Nonaccrual Loans/Gross Loans 0.01 0.05 - 0.04
Nonaccrual Lns/Ln Loss Reserve 0.58 2.06 - 1.94
Repos Assets/Tot Assets 0.11 - 0.02 -
Net Chrg-Off/Av Adj Lns 0.19 (0.03) 0.33 0.02
Non 1-4 Cons&Conv Mtg Lns/TA 4.64 5.96 2.47 3.03
6
<PAGE>
FERGUSON & COMPANY EXHIBIT IV
- ------------------
NORTHWEST SVGS BK
AMERY, WI
NWEQ FINANCIAL HIGHLIGHTS
1993 1994 1995 YTD 9/96
($000's)
BALANCE SHEET:
Total Assets 61,962 66,921 83,030 95,524
% Change in Assets -- 8.00 24.07 15.05
Securities-Book Value 5,404 4,274 9,000 11,341
Securities-Fair Value 5,404 4,234 9,138 11,256
Total Loans & Leases 51,702 58,164 69,239 77,468
Total Deposits 49,108 51,817 58,825 62,518
Loan/Deposit Ratio 105.28 112.25 117.70 123.91
Provision for Loan Losses 203 17 24 37
CAPITAL:
Equity Capital 4,479 8,368 9,384 7,178
Total Qualifying Capital(Est) 4,945 8,960 9,832 7,652
Equity Capital/Average Assets 7.23 12.99 12.78 8.13
Tot Qual Cap/Rk Bsd Asts(Est) 12.50 20.50 18.24 12.66
Tier 1 Cap/Rsk Bsed Asts(Est) 11.33 19.51 17.43 11.92
T1 Cap/Avg Assets(Lev Est) 7.30 12.95 11.59 7.69
Dividends Declared/Net Income -- -- -- 556.25
PROFITABILITY:
Net Income(Loss) 531 655 865 480
Return on Average Assets 0.86 1.02 1.18 0.72
Return on Average Equity Cap 11.86 10.20 9.75 7.68
Net Interest Margin 3.68 3.91 4.12 3.75
Net Int Income/Avg Assets 3.57 3.81 3.95 3.56
Noninterest Income/Avg Assets 0.80 0.65 0.64 0.60
Noninterest Exp/Avg Assets 2.80 2.70 2.56 2.86
ASSET QUALITY:
NPL+Frcl RE/Lns+Frcl RE 0.16 0.88 0.63 1.34
NPA's/Equity + LLR 1.64 5.85 4.45 13.68
LLR/Nonperf & Restrcd Lns 5,177.78 93.29 140.06 50.97
Foreclosed RE/Total Assets 0.12 0.08 0.15 0.17
90+ Day Del Loans/Total Loans 0.00 -- 0.00 0.00
Loan Loss Reserves/Total Lns 0.90 0.74 0.63 0.58
Net Charge-Offs/Average Loans 0.05 0.09 0.03 0.04
Dom Risk R/E Lns/Tot Dom Lns 12.48 12.14 14.69 13.99
LIQUIDITY:
Brokered Dep/Total Dom Deps -- -- -- --
$100M+ Time Dep/Total Dom Dep 2.56 9.74 3.76 5.30
Int Earn Assets/Int Bear Liab 108.29 114.78 112.50 108.61
Pledged Sec/Total Sec 30.81 22.70 45.34 29.95
Fair Value Sec/Amort Cost Sec 100.00 93.32 101.35 98.84
7
<PAGE>
FERGUSON & COMPANY EXHIBIT IV
- ------------------
STATE FS&LA OF DES MOINES
DES MOINES, IA
SFFC FINANCIAL HIGHLIGHTS
1993 1994 1995 YTD 9/96
($000's)
BALANCE SHEET:
Total Assets 64,900 64,977 71,246 78,034
% Change in Assets 12.09 0.12 9.65 9.53
Total Loans 47,643 54,307 60,444 65,991
Deposits 53,460 46,043 46,201 46,985
Broker Originated Deposits -- -- 396 1,584
CAPITAL:
Equity Capital 6,699 10,101 10,067 10,596
Tangible Capital 6,439 9,641 9,537 10,145
Core Capital 6,439 9,641 9,537 10,145
Risk-Based Capital 6,621 9,845 9,765 10,391
Equity Capital/Total Assets 10.32 15.55 14.13 13.58
Core Capital/Risk Based Assets 19.52 27.98 24.47 22.20
Core Capital/Adj Tang Assets 10.02 15.14 13.63 13.19
Tangible Cap/Tangible Assets 10.02 15.14 13.63 13.19
Risk-Based Cap/Risk-Wt Assets 20.08 28.57 25.05 22.74
PROFITABILITY:
Net Income(Loss) 762 803 729 481
Ret on Avg Assets Bef Ext Item 1.34 1.24 1.07 0.87
Return on Average Equity 12.96 9.56 6.99 6.18
Net Interest Income/Avg Assets 3.65 3.83 3.46 3.38
Noninterest Income/Avg Assets 0.29 0.28 0.35 0.43
Noninterest Expense/Avg Assets 1.77 2.05 2.02 2.45
Yield/Cost Spread 3.44 3.51 2.90 2.95
LIQUIDITY:
Int Earn Assets/Int Bear Liab 109.30 117.65 114.08 111.28
Brokered Deposits/Tot Deposits -- -- 0.86 3.37
ASSET QUALITY:
Nonperf Lns+REO/Total Lns+REO 0.55 0.22 0.64 1.56
Nonaccrual Loans/Gross Loans 0.08 0.21 -- 0.51
Nonaccrual Lns/Ln Loss Reserve 21.43 57.84 -- 143.09
Repos Assets/Tot Assets 0.23 -- -- --
Net Chrg-Off/Av Adj Lns 0.00 0.07 -- --
Non 1-4 Cons&Conv Mtg Lns/TA 24.18 28.11 27.78 28.37
8
<PAGE>
FERGUSON & COMPANY EXHIBIT IV
- ------------------
SOBIESKI FS&LA
SOUTH BEND, IN
SOBI FINANCIAL HIGHLIGHTS
1993 1994 1995 YTD 9/96
($000's)
BALANCE SHEET:
Total Assets 73,723 70,694 72,595 77,333
% Change in Assets 3.36 (4.11) 2.69 6.53
Total Loans 48,723 49,594 45,893 51,288
Deposits 67,996 64,309 61,399 60,649
Broker Originated Deposits -- -- -- --
CAPITAL:
Equity Capital 5,287 5,917 10,002 9,165
Tangible Capital 5,287 5,917 9,964 9,166
Core Capital 5,287 5,917 9,964 9,166
Risk-Based Capital 5,487 6,117 10,164 9,366
Equity Capital/Total Assets 7.17 8.37 13.78 11.85
Core Capital/Risk Based Assets 17.87 19.89 35.15 27.91
Core Capital/Adj Tang Assets 7.17 8.37 13.73 11.85
Tangible Cap/Tangible Assets 7.17 8.37 13.73 11.85
Risk-Based Cap/Risk-Wt Assets 18.54 20.56 35.86 28.52
PROFITABILITY:
Net Income(Loss) 790 686 363 (25)
Ret on Avg Assets Bef Ext Item 1.09 0.95 0.55 (0.04)
Return on Average Equity 16.15 12.25 4.27 (0.34)
Net Interest Income/Avg Assets 3.72 3.53 2.94 2.88
Noninterest Income/Avg Assets 0.18 0.22 0.23 0.27
Noninterest Expense/Avg Assets 2.12 2.20 2.33 3.21
Yield/Cost Spread 3.63 3.45 2.69 2.64
LIQUIDITY:
Int Earn Assets/Int Bear Liab 105.08 105.04 109.97 108.49
Brokered Deposits/Tot Deposits -- -- -- --
ASSET QUALITY:
Nonperf Lns+REO/Total Lns+REO 0.91 0.30 0.17 0.19
Nonaccrual Loans/Gross Loans -- -- -- --
Nonaccrual Lns/Ln Loss Reserve -- -- -- --
Repos Assets/Tot Assets -- 0.05 0.02 --
Net Chrg-Off/Av Adj Lns -- -- -- --
Non 1-4 Cons&Conv Mtg Lns/TA 0.53 0.50 3.57 3.01
9
<PAGE>
FERGUSON & COMPANY EXHIBIT IV
- ------------------
FIRST FEDERAL OF THE SOUTH
SYLACAUGA, AL
SZB FINANCIAL HIGHLIGHTS
1993 1994 1995 YTD 9/96
($000's)
BALANCE SHEET:
Total Assets 80,094 83,109 84,825 89,147
% Change in Assets (3.04) 3.76 2.06 5.10
Total Loans 44,659 50,193 55,220 62,871
Deposits 66,127 68,743 65,110 64,145
Broker Originated Deposits -- -- -- --
CAPITAL:
Equity Capital 7,219 7,606 11,681 11,922
Tangible Capital 7,219 7,606 11,041 11,246
Core Capital 7,219 7,606 11,041 11,246
Risk-Based Capital 7,393 7,805 11,243 11,448
Equity Capital/Total Assets 9.01 9.15 13.77 13.37
Core Capital/Risk Based Assets 22.40 21.51 24.82 23.11
Core Capital/Adj Tang Assets 9.01 9.15 13.12 12.71
Tangible Cap/Tangible Assets 9.01 9.15 13.12 12.71
Risk-Based Cap/Risk-Wt Assets 22.94 22.08 25.27 23.53
PROFITABILITY:
Net Income(Loss) 808 333 625 171
Ret on Avg Assets Bef Ext Item 0.99 0.41 0.74 0.26
Return on Average Equity 11.88 4.49 5.80 1.92
Net Interest Income/Avg Assets 3.34 3.52 3.46 3.50
Noninterest Income/Avg Assets 0.77 0.78 1.37 0.96
Noninterest Expense/Avg Assets 2.58 3.49 3.62 4.09
Yield/Cost Spread 3.32 3.50 3.10 3.11
LIQUIDITY:
Int Earn Assets/Int Bear Liab 105.47 106.07 112.86 114.81
Brokered Deposits/Tot Deposits -- -- -- --
ASSET QUALITY:
Nonperf Lns+REO/Total Lns+REO 1.63 0.91 0.69 0.87
Nonaccrual Loans/Gross Loans 0.29 0.41 0.22 0.29
Nonaccrual Lns/Ln Loss Reserve 67.19 98.68 51.50 81.20
Repos Assets/Tot Assets 0.18 -- 0.03 --
Net Chrg-Off/Av Adj Lns 0.40 (0.32) 0.26 0.03
Non 1-4 Cons&Conv Mtg Lns/TA 0.97 0.06 0.05 0.05
10
<PAGE>
EXHIBIT V
<PAGE>
FERGUSON & COMPANY Exhibit V - Selected Publicly Traded Thrifts
- ------------------
<TABLE>
<CAPTION>
Deposit Current Current
Insurance Stock Market
Agency Price Value
Ticker Short Name City State Region (BIF/SAIF) Exchange IPO Date ($) ($M)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AADV Advantage Bancorp, Inc. Kenosha WI MW SAIF NASDAQ 03/23/92 35.500 116.27
ABBK Abington Bancorp, Inc. Abington MA NE BIF NASDAQ 06/10/86 21.500 40.70
ABCL Alliance Bancorp, Inc. Hinsdale IL MW SAIF NASDAQ 07/07/92 30.875 164.68
ABCW Anchor BanCorp Wisconsin Madison WI MW SAIF NASDAQ 07/16/92 46.750 216.03
AFCB Affiliated Community Bancorp Waltham MA NE SAIF NASDAQ 10/19/95 25.125 129.37
AFFFZ America First Financial Fund San Francisco CA WE SAIF NASDAQ NA 32.625 196.10
AHM Ahmanson & Company (H.F.) Irwindale CA WE SAIF NYSE 10/25/72 41.375 4,226.58
ALBK ALBANK Financial Corporation Albany NY MA SAIF NASDAQ 04/01/92 36.375 469.63
ANBK American National Bancorp Baltimore MD MA SAIF NASDAQ 10/31/95 13.000 46.85
ANDB Andover Bancorp, Inc. Andover MA NE BIF NASDAQ 05/08/86 28.000 143.75
ASBI Ameriana Bancorp New Castle IN MW SAIF NASDAQ 03/02/87 16.250 53.48
ASBP ASB Financial Corp. Portsmouth OH MW SAIF NASDAQ 05/11/95 11.500 19.80
ASFC Astoria Financial Corporation Lake Success NY MA SAIF NASDAQ 11/18/93 42.000 901.86
BANC BankAtlantic Bancorp, Inc. Fort Lauderdale FL SE SAIF NASDAQ 11/29/83 16.500 311.16
BDJI First Federal Bancorporation Bemidji MN MW SAIF NASDAQ 04/04/95 18.500 12.96
BFD BostonFed Bancorp, Inc. Burlington MA NE SAIF AMSE 10/24/95 16.500 103.30
BFSB Bedford Bancshares, Inc. Bedford VA SE SAIF NASDAQ 08/22/94 19.250 22.02
BKC American Bank of Connecticut Waterbury CT NE BIF AMSE 12/01/81 30.375 69.65
BKCT Bancorp Connecticut, Inc. Southington CT NE BIF NASDAQ 07/03/86 21.750 55.91
BKUNA BankUnited Financial Corp. Coral Gables FL SE SAIF NASDAQ 12/11/85 10.000 85.24
BSBC Branford Savings Bank Branford CT NE BIF NASDAQ 11/04/86 4.000 20.72
BVFS Bay View Capital Corp. San Mateo CA WE SAIF NASDAQ 05/09/86 56.375 376.28
BWFC Bank West Financial Corp. Grand Rapids MI MW SAIF NASDAQ 03/30/95 11.750 21.38
CAFI Camco Financial Corp. Cambridge OH MW SAIF NASDAQ NA 16.000 49.01
CAPS Capital Savings Bancorp, Inc. Jefferson City MO MW SAIF NASDAQ 12/29/93 14.000 26.49
CARV Carver Bancorp, Inc. New York NY MA SAIF NASDAQ 10/25/94 9.875 22.85
CASB Cascade Financial Corp. Everett WA WE SAIF NASDAQ 09/16/92 16.375 33.62
CASH First Midwest Financial, Inc. Storm Lake IA MW SAIF NASDAQ 09/20/93 17.000 49.24
CBCI Calumet Bancorp, Inc. Dolton IL MW SAIF NASDAQ 02/20/92 36.250 84.79
CBIN Community Bank Shares New Albany IN MW SAIF NASDAQ 04/10/95 13.750 27.28
CBNH Community Bankshares, Inc. Concord NH NE BIF NASDAQ 05/08/86 22.750 55.71
CBSA Coastal Bancorp, Inc. Houston TX SW SAIF NASDAQ NA 26.500 131.62
CBSB Charter Financial, Inc. Sparta IL MW SAIF NASDAQ 12/29/95 15.875 67.52
CEBK Central Co-operative Bank Somerville MA NE BIF NASDAQ 10/24/86 18.125 35.62
CENF CENFED Financial Corp. Pasadena CA WE SAIF NASDAQ 10/25/91 33.750 173.97
CFB Commercial Federal Corporation Omaha NE MW SAIF NYSE 12/31/84 36.125 776.34
CFCP Coastal Financial Corp. Myrtle Beach SC SE SAIF NASDAQ 09/26/90 25.500 88.03
CFFC Community Financial Corp. Staunton VA SE SAIF NASDAQ 03/30/88 22.250 28.31
CFSB CFSB Bancorp, Inc. Lansing MI MW SAIF NASDAQ 06/22/90 20.380 95.91
CFX CFX Corporation Keene NH NE BIF AMSE 02/12/87 16.875 219.05
CIBI Community Investors Bancorp Bucyrus OH MW SAIF NASDAQ 02/07/95 17.500 11.08
CKFB CKF Bancorp, Inc. Danville KY MW SAIF NASDAQ 01/04/95 18.750 17.39
CMRN Cameron Financial Corp Cameron MO MW SAIF NASDAQ 04/03/95 16.500 47.01
CMSV Community Savings, MHC North Palm Beach FL SE SAIF NASDAQ 10/24/94 19.750 96.97
CNIT CENIT Bancorp, Inc. Norfolk VA SE SAIF NASDAQ 08/06/92 44.500 72.69
CNSK Covenant Bank for Savings Haddonfield NJ MA BIF NASDAQ NA 13.625 37.36
COFI Charter One Financial Cleveland OH MW SAIF NASDAQ 01/22/88 46.625 2,165.39
CSA Coast Savings Financial Los Angeles CA WE SAIF NYSE 12/23/85 46.625 866.51
CTBK Center Banks Incorporated Skaneateles NY MA BIF NASDAQ 06/02/86 19.500 18.49
CTZN CitFed Bancorp, Inc. Dayton OH MW SAIF NASDAQ 01/23/92 34.250 294.02
CVAL Chester Valley Bancorp Inc. Downingtown PA MA SAIF NASDAQ 03/27/87 21.500 35.13
CZF CitiSave Financial Corp Baton Rouge LA SW SAIF AMSE 07/14/95 13.750 13.23
DFIN Damen Financial Corp. Schaumburg IL MW SAIF NASDAQ 10/02/95 14.500 54.68
DIBK Dime Financial Corp. Wallingford CT NE BIF NASDAQ 07/09/86 20.750 106.43
DME Dime Bancorp, Inc. New York NY MA BIF NYSE 08/19/86 17.250 1,806.83
DNFC D & N Financial Corp. Hancock MI MW SAIF NASDAQ 02/13/85 18.125 151.31
DSL Downey Financial Corp. Newport Beach CA WE SAIF NYSE 01/01/71 23.250 591.92
EBSI Eagle Bancshares Tucker GA SE SAIF NASDAQ 04/01/86 16.500 75.11
EFBI Enterprise Federal Bancorp West Chester OH MW SAIF NASDAQ 10/17/94 15.125 30.64
</TABLE>
1
<PAGE>
FERGUSON & COMPANY Exhibit V - Selected Publicly Traded Thrifts
- ------------------
<TABLE>
<CAPTION>
Deposit Current Current
Insurance Stock Market
Agency Price Value
Ticker Short Name City State Region (BIF/SAIF) Exchange IPO Date ($) ($M)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EGFC Eagle Financial Corp. Bristol CT NE SAIF NASDAQ 02/03/87 29.500 134.06
EIRE Emerald Isle Bancorp, Inc. Quincy MA NE BIF NASDAQ 09/08/86 19.250 42.56
EQSB Equitable Federal Savings Bank Wheaton MD MA SAIF NASDAQ 09/10/93 32.750 19.65
ESBK Elmira Savings Bank (The) Elmira NY MA BIF NASDAQ 03/01/85 19.000 13.43
FBBC First Bell Bancorp, Inc. Pittsburgh PA MA SAIF NASDAQ 06/29/95 15.875 123.16
FBCI Fidelity Bancorp, Inc. Chicago IL MW SAIF NASDAQ 12/15/93 19.688 54.86
FBHC Fort Bend Holding Corp. Rosenberg TX SW SAIF NASDAQ 06/30/93 23.250 19.07
FBSI First Bancshares, Inc. Mountain Grove MO MW SAIF NASDAQ 12/22/93 19.250 23.01
FCIT First Citizens Financial Corp. Gaithersburg MD MA SAIF NASDAQ 12/17/86 22.000 64.63
FCME First Coastal Corporation Westbrook ME NE BIF NASDAQ NA 8.750 11.88
FDEF First Defiance Financial Defiance OH MW SAIF NASDAQ 10/02/95 13.125 124.31
FED FirstFed Financial Corp. Santa Monica CA WE SAIF NYSE 12/16/83 26.375 277.72
FESX First Essex Bancorp, Inc. Andover MA NE BIF NASDAQ 08/04/87 15.438 114.57
FFBI First Financial Bancorp, Inc. Belvidere IL MW SAIF NASDAQ 10/04/93 16.500 7.47
FFBS FFBS BanCorp, Inc. Columbus MS SE SAIF NASDAQ 07/01/93 22.000 34.44
FFBZ First Federal Bancorp, Inc. Zanesville OH MW SAIF NASDAQ 07/13/92 17.500 27.51
FFCH First Financial Holdings Inc. Charleston SC SE SAIF NASDAQ 11/10/83 27.000 170.24
FFES First Federal of East Hartford East Hartford CT NE SAIF NASDAQ 06/23/87 25.750 67.63
FFFC FFVA Financial Corp. Lynchburg VA SE SAIF NASDAQ 10/12/94 24.250 113.79
FFFG F.F.O. Financial Group, Inc. St. Cloud FL SE SAIF NASDAQ 10/13/88 3.750 31.61
FFFL Fidelity Bankshares Inc., MHC West Palm Beach FL SE SAIF NASDAQ 01/07/94 18.375 123.93
FFHC First Financial Corp. Stevens Point WI MW SAIF NASDAQ 12/24/80 26.375 970.67
FFHH FSF Financial Corp. Hutchinson MN MW SAIF NASDAQ 10/07/94 17.125 55.32
FFHS First Franklin Corporation Cincinnati OH MW SAIF NASDAQ 01/26/88 17.000 19.66
FFIC Flushing Financial Corp. Flushing NY MA BIF NASDAQ 11/21/95 18.625 153.67
FFKY First Federal Financial Corp. Elizabethtown KY MW SAIF NASDAQ 07/15/87 20.000 83.64
FFLC FFLC Bancorp, Inc. Leesburg FL SE SAIF NASDAQ 01/04/94 26.625 64.90
FFSL First Independence Corp. Independence KS MW SAIF NASDAQ 10/08/93 12.250 12.96
FFSW FirstFederal Financial Svcs Wooster OH MW SAIF NASDAQ 03/31/87 37.750 136.92
FFSX First Fed SB of Siouxland, MHC Sioux City IA MW SAIF NASDAQ 07/13/92 30.000 56.50
FFWC FFW Corp. Wabash IN MW SAIF NASDAQ 04/05/93 25.375 17.81
FFWD Wood Bancorp, Inc. Bowling Green OH MW SAIF NASDAQ 08/31/93 15.750 23.51
FFYF FFY Financial Corp. Youngstown OH MW SAIF NASDAQ 06/28/93 25.125 108.51
FGHC First Georgia Holding, Inc. Brunswick GA SE SAIF NASDAQ 02/11/87 7.500 22.89
FIBC Financial Bancorp, Inc. Long Island City NY MA SAIF NASDAQ 08/17/94 17.940 31.35
FISB First Indiana Corporation Indianapolis IN MW SAIF NASDAQ 08/02/83 28.250 234.57
FKFS First Keystone Financial Media PA MA SAIF NASDAQ 01/26/95 22.250 27.32
FLFC First Liberty Financial Corp. Macon GA SE SAIF NASDAQ 12/06/83 22.000 156.87
FMCO FMS Financial Corporation Burlington NJ MA SAIF NASDAQ 12/14/88 19.750 47.26
FMSB First Mutual Savings Bank Bellevue WA WE BIF NASDAQ 12/17/85 20.250 49.68
FNGB First Northern Capital Corp. Green Bay WI MW SAIF NASDAQ 12/29/83 19.000 83.36
FOBC Fed One Bancorp Wheeling WV SE SAIF NASDAQ 01/19/95 19.125 47.02
FRC First Republic Bancorp San Francisco CA WE BIF NYSE NA 23.875 183.26
FSBI Fidelity Bancorp, Inc. Pittsburgh PA MA SAIF NASDAQ 06/24/88 23.875 33.01
FSFC First Southeast Financial Corp Anderson SC SE SAIF NASDAQ 10/08/93 10.750 47.17
FSLA First Savings Bank, MHC Edison NJ MA SAIF NASDAQ 07/10/92 21.250 152.69
FSPG First Home Bancorp, Inc. Pennsville NJ MA SAIF NASDAQ 04/20/87 18.875 51.12
FSTC First Citizens Corporation Newnan GA SE SAIF NASDAQ 03/01/86 24.750 40.03
FTF Texarkana First Financial Corp Texarkana AR SE SAIF AMSE 07/07/95 17.000 31.16
FTFC First Federal Capital Corp. La Crosse WI MW SAIF NASDAQ 11/02/89 28.750 176.15
FTSB Fort Thomas Financial Corp. Fort Thomas KY MW SAIF NASDAQ 06/28/95 11.750 18.49
FWWB First SB of Washington Bancorp Walla Walla WA WE SAIF NASDAQ 11/01/95 19.750 208.74
GBCI Glacier Bancorp, Inc. Kalispell MT WE SAIF NASDAQ 03/30/84 24.500 82.72
GDW Golden West Financial Oakland CA WE SAIF NYSE 05/29/59 68.375 3,920.79
GFCO Glenway Financial Corp. Cincinnati OH MW SAIF NASDAQ 11/30/90 22.500 26.72
GFSB GFS Bancorp, Inc. Grinnell IA MW SAIF NASDAQ 01/06/94 22.250 11.07
GLN Glendale Federal Bank, FSB Glendale CA WE SAIF NYSE 10/01/83 26.125 1,301.25
GPT GreenPoint Financial Corp. New York NY MA BIF NYSE 01/28/94 58.500 2,777.64
GRTR Greater New York Savings Bank New York NY MA BIF NASDAQ 06/17/87 15.875 214.86
</TABLE>
2
<PAGE>
FERGUSON & COMPANY Exhibit V - Selected Publicly Traded Thrifts
- ------------------
<TABLE>
<CAPTION>
Deposit Current Current
Insurance Stock Market
Agency Price Value
Ticker Short Name City State Region (BIF/SAIF) Exchange IPO Date ($) ($M)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GSBC Great Southern Bancorp, Inc. Springfield MO MW SAIF NASDAQ 12/14/89 17.250 141.05
GSLC Guaranty Financial Corp. Charlottesville VA SE SAIF NASDAQ NA 9.750 9.01
GTFN Great Financial Corporation Louisville KY MW SAIF NASDAQ 03/31/94 32.125 453.50
GUPB GFSB Bancorp, Inc. Gallup NM SW SAIF NASDAQ 06/30/95 16.250 14.65
GWBC Gateway Bancorp, Inc. Catlettsburg KY MW SAIF NASDAQ 01/18/95 14.375 15.46
HALL Hallmark Capital Corp. West Allis WI MW SAIF NASDAQ 01/03/94 19.125 27.60
HARB Harbor Federal Savings Bk, MHC Fort Pierce FL SE SAIF NASDAQ 01/06/94 38.000 187.68
HARL Harleysville Savings Bank Harleysville PA MA SAIF NASDAQ 08/04/87 21.250 34.61
HAVN Haven Bancorp, Inc. Woodhaven NY MA SAIF NASDAQ 09/23/93 33.000 142.74
HBFW Home Bancorp Fort Wayne IN MW SAIF NASDAQ 03/30/95 19.750 52.39
HBNK Highland Federal Bank FSB Burbank CA WE SAIF NASDAQ NA 22.625 51.95
HBS Haywood Bancshares, Inc. Waynesville NC SE BIF AMSE 12/18/87 16.750 20.11
HFFB Harrodsburg First Fin Bancorp Harrodsburg KY MW SAIF NASDAQ 10/04/95 15.750 31.98
HFFC HF Financial Corp. Sioux Falls SD MW SAIF NASDAQ 04/08/92 19.500 56.75
HFGI Harrington Financial Group Richmond IN MW SAIF NASDAQ NA 10.500 34.20
HFSA Hardin Bancorp, Inc. Hardin MO MW SAIF NASDAQ 09/29/95 14.375 13.73
HHFC Harvest Home Financial Corp. Cheviot OH MW SAIF NASDAQ 10/10/94 11.000 10.28
HIFS Hingham Instit. for Savings Hingham MA NE BIF NASDAQ 12/20/88 18.625 24.17
HMCI HomeCorp, Inc. Rockford IL MW SAIF NASDAQ 06/22/90 20.000 22.58
HMNF HMN Financial, Inc. Spring Valley MN MW SAIF NASDAQ 06/30/94 23.500 104.20
HOMF Home Federal Bancorp Seymour IN MW SAIF NASDAQ 01/23/88 27.250 91.33
HPBC Home Port Bancorp, Inc. Nantucket MA NE BIF NASDAQ 08/25/88 19.250 35.46
HRBF Harbor Federal Bancorp, Inc. Baltimore MD MA SAIF NASDAQ 08/12/94 17.125 30.04
HRZB Horizon Financial Corp. Bellingham WA WE BIF NASDAQ 08/01/86 15.000 96.36
HTHR Hawthorne Financial Corp. El Segundo CA WE SAIF NASDAQ NA 11.000 28.59
HVFD Haverfield Corporation Cleveland OH MW SAIF NASDAQ 03/19/85 22.500 42.89
IFSB Independence Federal Savings Washington DC MA SAIF NASDAQ 06/06/85 9.000 11.52
INBI Industrial Bancorp Bellevue OH MW SAIF NASDAQ 08/01/95 12.875 70.87
IPSW Ipswich Savings Bank Ipswich MA NE BIF NASDAQ 05/26/93 15.500 18.41
ISBF ISB Financial Corporation New Iberia LA SW SAIF NASDAQ 04/07/95 25.125 177.16
ITLA ITLA Capital Corp. La Jolla CA WE BIF NASDAQ 10/24/95 16.750 131.05
IWBK InterWest Bancorp, Inc. Oak Harbor WA WE SAIF NASDAQ NA 35.063 280.53
JSBA Jefferson Savings Bancorp Ballwin MO MW SAIF NASDAQ 04/08/93 28.375 118.66
JSBF JSB Financial, Inc. Lynbrook NY MA BIF NASDAQ 06/27/90 39.375 385.21
KFBI Klamath First Bancorp Klamath Falls OR WE SAIF NASDAQ 10/05/95 16.125 161.29
KNK Kankakee Bancorp, Inc. Kankakee IL MW SAIF AMSE 01/06/93 27.375 38.73
KSAV KS Bancorp, Inc. Kenly NC SE SAIF NASDAQ 12/30/93 21.500 14.26
KSBK KSB Bancorp, Inc. Kingfield ME NE BIF NASDAQ 06/24/93 34.000 13.98
KYF Kentucky First Bancorp, Inc. Cynthiana KY MW SAIF AMSE 08/29/95 11.875 16.49
LARK Landmark Bancshares, Inc. Dodge City KS MW SAIF NASDAQ 03/28/94 18.750 34.42
LARL Laurel Capital Group, Inc. Allison Park PA MA SAIF NASDAQ 02/20/87 21.500 32.58
LFED Leeds Federal Savings Bk, MHC Baltimore MD MA SAIF NASDAQ 05/02/94 18.250 63.05
LIFB Life Bancorp, Inc. Norfolk VA SE SAIF NASDAQ 10/11/94 19.625 193.24
LISB Long Island Bancorp, Inc. Melville NY MA SAIF NASDAQ 04/18/94 37.250 911.07
LOGN Logansport Financial Corp. Logansport IN MW SAIF NASDAQ 06/14/95 13.500 16.96
LSBX Lawrence Savings Bank North Andover MA NE BIF NASDAQ 05/02/86 10.125 43.03
LVSB Lakeview Financial West Paterson NJ MA SAIF NASDAQ 12/22/93 33.250 80.42
MAFB MAF Bancorp, Inc. Clarendon Hills IL MW SAIF NASDAQ 01/12/90 40.500 424.85
MARN Marion Capital Holdings Marion IN MW SAIF NASDAQ 03/18/93 22.000 40.57
MASB MASSBANK Corp. Reading MA NE BIF NASDAQ 05/28/86 40.750 109.48
MBB MSB Bancorp, Inc. Goshen NY MA BIF AMSE 09/03/92 18.750 53.14
MBB MSB Bancorp, Inc. Goshen NY MA BIF AMSE NA 18.750 53.14
MBLF MBLA Financial Corp. Macon MO MW SAIF NASDAQ 06/24/93 20.125 26.94
MCBN Mid-Coast Bancorp, Inc. Waldoboro ME NE SAIF NASDAQ 11/02/89 19.000 4.37
MCBS Mid Continent Bancshares Inc. El Dorado KS MW SAIF NASDAQ 06/27/94 25.000 50.42
MDBK Medford Savings Bank Medford MA NE BIF NASDAQ 03/18/86 28.500 129.24
MERI Meritrust Federal SB Thibodaux LA SW SAIF NASDAQ NA 35.500 27.48
MFBC MFB Corp. Mishawaka IN MW SAIF NASDAQ 03/25/94 19.234 34.12
MFFC Milton Federal Financial Corp. West Milton OH MW SAIF NASDAQ 10/07/94 13.750 30.32
</TABLE>
3
<PAGE>
FERGUSON & COMPANY Exhibit V - Selected Publicly Traded Thrifts
- ------------------
<TABLE>
<CAPTION>
Deposit Current Current
Insurance Stock Market
Agency Price Value
Ticker Short Name City State Region (BIF/SAIF) Exchange IPO Date ($) ($M)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MFLR Mayflower Co-operative Bank Middleboro MA NE BIF NASDAQ 12/23/87 18.000 16.01
MFSL Maryland Federal Bancorp Hyattsville MD MA SAIF NASDAQ 06/02/87 37.500 117.42
MGNL Magna Bancorp, Inc. Hattiesburg MS SE SAIF NASDAQ 03/13/91 18.500 254.21
MIVI Mississippi View Holding Co. Little Falls MN MW SAIF NASDAQ 03/24/95 14.875 12.71
MLBC ML Bancorp, Inc. Villanova PA MA SAIF NASDAQ 08/11/94 17.375 202.65
MSBF MSB Financial, Inc. Marshall MI MW SAIF NASDAQ 02/06/95 21.000 13.48
MWBI Midwest Bancshares, Inc. Burlington IA MW SAIF NASDAQ 11/12/92 26.750 9.35
MWBX MetroWest Bank Framingham MA NE BIF NASDAQ 10/10/86 5.063 70.32
MWFD Midwest Federal Financial Baraboo WI MW SAIF NASDAQ 07/08/92 18.000 29.17
NASB North American Savings Bank Grandview MO MW SAIF NASDAQ 09/27/85 38.690 87.58
NEBC Northeast Bancorp Portland ME NE BIF NASDAQ 08/19/87 13.625 16.78
NEIB Northeast Indiana Bancorp Huntington IN MW SAIF NASDAQ 06/28/95 14.250 25.58
NHTB New Hampshire Thrift Bncshrs New London NH NE SAIF NASDAQ 05/22/86 12.125 20.67
NMSB NewMil Bancorp, Inc. New Milford CT NE BIF NASDAQ 02/01/86 9.250 37.39
NSSB Norwich Financial Corp. Norwich CT NE BIF NASDAQ 11/14/86 23.000 124.19
NSSY Norwalk Savings Society Norwalk CT NE BIF NASDAQ 06/16/94 25.375 60.84
NTMG Nutmeg Federal S&LA Danbury CT NE SAIF NASDAQ NA 7.375 5.24
NWEQ Northwest Equity Corp. Amery WI MW SAIF NASDAQ 10/11/94 13.500 12.55
NWSB Northwest Savings Bank, MHC Warren PA MA SAIF NASDAQ 11/07/94 15.000 350.64
NYB New York Bancorp Inc. Douglaston NY MA SAIF NYSE 01/28/88 32.125 532.30
OCWN Ocwen Financial Corporation West Palm Beach FL SE SAIF NASDAQ NA 34.250 915.99
OFCP Ottawa Financial Corp. Holland MI MW SAIF NASDAQ 08/19/94 19.750 102.30
OHSL OHSL Financial Corp. Cincinnati OH MW SAIF NASDAQ 02/10/93 22.000 26.90
PBCI Pamrapo Bancorp, Inc. Bayonne NJ MA SAIF NASDAQ 11/14/89 20.125 63.51
PBCT People's Bank, MHC Bridgeport CT NE BIF NASDAQ 07/06/88 34.000 1,378.82
PBKB People's Bancshares, Inc. South Easton MA NE BIF NASDAQ 10/23/86 12.750 45.43
PBNB People's Savings Financial Cp. New Britain CT NE BIF NASDAQ 08/20/86 31.500 60.03
PCBC Perry County Financial Corp. Perryville MO MW SAIF NASDAQ 02/13/95 19.000 15.72
PCCI Pacific Crest Capital Agoura Hills CA WE BIF NASDAQ NA 13.500 39.55
PDB Piedmont Bancorp, Inc. Hillsborough NC SE SAIF AMSE 12/08/95 10.625 29.23
PEEK Peekskill Financial Corp. Peekskill NY MA SAIF NASDAQ 12/29/95 14.875 49.00
PERM Permanent Bancorp, Inc. Evansville IN MW SAIF NASDAQ 04/04/94 22.500 46.86
PERT Perpetual Bank, MHC Anderson SC SE SAIF NASDAQ 10/26/93 26.000 39.12
PETE Primary Bank Peterborough NH NE BIF NASDAQ 10/14/93 17.000 35.46
PFDC Peoples Bancorp Auburn IN MW SAIF NASDAQ 07/07/87 23.000 53.04
PFNC Progress Financial Corporation Blue Bell PA MA SAIF NASDAQ 07/18/83 8.630 32.31
PFSB PennFed Financial Services,Inc West Orange NJ MA SAIF NASDAQ 07/15/94 25.000 120.52
PFSL Pocahontas FS&LA, MHC Pocahontas AR SE SAIF NASDAQ 04/05/94 19.063 31.04
PHBK Peoples Heritage Finl Group Portland ME NE BIF NASDAQ 12/04/86 31.000 874.87
PKPS Poughkeepsie Savings Bank, FSB Poughkeepsie NY MA SAIF NASDAQ 11/19/85 6.063 76.34
PLE Pinnacle Bancshares, Inc. Jasper AL SE SAIF AMSE 12/17/86 22.125 19.69
PSAB Prime Bancorp, Inc. Philadelphia PA MA SAIF NASDAQ 11/21/88 20.750 109.79
PSBK Progressive Bank, Inc. Fishkill NY MA BIF NASDAQ 08/01/84 23.750 90.84
PTRS Potters Financial Corp. East Liverpool OH MW SAIF NASDAQ 12/31/93 20.000 10.12
PULS Pulse Bancorp South River NJ MA SAIF NASDAQ 09/18/86 18.000 55.10
PVFC PVF Capital Corp. Bedford Heights OH MW SAIF NASDAQ 12/30/92 16.750 38.92
PVSA Parkvale Financial Corporation Monroeville PA MA SAIF NASDAQ 07/16/87 26.500 107.22
PWBC PennFirst Bancorp, Inc. Ellwood City PA MA SAIF NASDAQ 06/13/90 13.500 52.67
QCBC Quaker City Bancorp, Inc. Whittier CA WE SAIF NASDAQ 12/30/93 19.125 72.52
QCFB QCF Bancorp, Inc. Virginia MN MW SAIF NASDAQ 04/03/95 18.750 26.74
QCSB Queens County Bancorp, Inc. Flushing NY MA BIF NASDAQ 11/23/93 57.625 439.68
RARB Raritan Bancorp Inc. Raritan NJ MA BIF NASDAQ 03/01/87 24.875 37.65
RCSB RCSB Financial, Inc. Rochester NY MA BIF NASDAQ 04/29/86 32.375 496.35
RELY Reliance Bancorp, Inc. Garden City NY MA SAIF NASDAQ 03/31/94 21.875 193.04
ROSE TR Financial Corp. Garden City NY MA BIF NASDAQ 06/29/93 35.750 314.14
RVSB Riverview Savings Bank, MHC Camas WA WE SAIF NASDAQ 10/26/93 18.250 40.07
SBCN Suburban Bancorporation, Inc. Cincinnati OH MW SAIF NASDAQ 09/30/93 17.750 26.18
SECP Security Capital Corporation Milwaukee WI MW SAIF NASDAQ 01/03/94 83.500 768.42
SFED SFS Bancorp, Inc. Schenectady NY MA SAIF NASDAQ 06/30/95 17.125 21.89
</TABLE>
4
<PAGE>
FERGUSON & COMPANY Exhibit V - Selected Publicly Traded Thrifts
- ------------------
<TABLE>
<CAPTION>
Deposit Current Current
Insurance Stock Market
Agency Price Value
Ticker Short Name City State Region (BIF/SAIF) Exchange IPO Date ($) ($M)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SFFC StateFed Financial Corporation Des Moines IA MW SAIF NASDAQ 01/05/94 18.380 14.50
SFSB SuburbFed Financial Corp. Flossmoor IL MW SAIF NASDAQ 03/04/92 22.656 28.43
SFSL Security First Corp. Mayfield Heights OH MW SAIF NASDAQ 01/22/88 17.750 88.29
SHEN First Shenango Bancorp, Inc. New Castle PA MA SAIF NASDAQ 04/06/93 24.750 50.98
SISB SIS Bancorp, Inc. Springfield MA NE BIF NASDAQ 02/08/95 26.500 151.68
SMBC Southern Missouri Bancorp, Inc Poplar Bluff MO MW SAIF NASDAQ 04/13/94 16.000 26.21
SMFC Sho-Me Financial Corp. Mt. Vernon MO MW SAIF NASDAQ 07/01/94 29.500 42.89
SOPN First Savings Bancorp, Inc. Southern Pines NC SE SAIF NASDAQ 01/06/94 20.000 73.78
SOSA Somerset Savings Bank Somerville MA NE BIF NASDAQ 07/09/86 2.750 45.79
SPBC St. Paul Bancorp, Inc. Chicago IL MW SAIF NASDAQ 05/18/87 26.750 609.26
SSBK Strongsville Savings Bank Strongsville OH MW SAIF NASDAQ NA 22.750 57.58
STFR St. Francis Capital Corp. Milwaukee WI MW SAIF NASDAQ 06/21/93 30.500 163.36
STND Standard Financial, Inc. Chicago IL MW SAIF NASDAQ 08/01/94 20.375 329.53
STSA Sterling Financial Corp. Spokane WA WE SAIF NASDAQ NA 17.000 94.17
SVRN Sovereign Bancorp, Inc. Wyomissing PA MA SAIF NASDAQ 08/12/86 12.688 756.73
SWBI Southwest Bancshares Hometown IL MW SAIF NASDAQ 06/24/92 19.880 52.43
SWCB Sandwich Co-operative Bank Sandwich MA NE BIF NASDAQ 07/25/86 32.000 60.85
TBK Tolland Bank Tolland CT NE BIF AMSE 12/19/86 15.630 18.33
TCB TCF Financial Corp. Minneapolis MN MW SAIF NYSE 06/17/86 44.625 1,551.04
THR Three Rivers Financial Corp. Three Rivers MI MW SAIF AMSE 08/24/95 15.125 12.88
THRD TF Financial Corporation Newtown PA MA SAIF NASDAQ 07/13/94 18.750 80.28
TPNZ Tappan Zee Financial, Inc. Tarrytown NY MA SAIF NASDAQ 10/05/95 14.500 22.32
TRIC Tri-County Bancorp, Inc. Torrington WY WE SAIF NASDAQ 09/30/93 18.500 11.26
TSBS Trenton SB, MHC Lawrenceville NJ MA BIF NASDAQ 08/03/95 15.875 143.46
TSH Teche Holding Co. Franklin LA SW SAIF AMSE 04/19/95 15.000 51.56
TWIN Twin City Bancorp Bristol TN SE SAIF NASDAQ 01/04/95 18.500 15.79
UBMT United Financial Corp. Great Falls MT WE SAIF NASDAQ 09/23/86 19.500 23.85
UFRM United Federal Savings Bank Rocky Mount NC SE SAIF NASDAQ 07/01/80 8.250 25.29
VFFC Virginia First Financial Corp. Petersburg VA SE SAIF NASDAQ 01/01/78 15.625 90.46
WAMU Washington Mutual Inc. Seattle WA WE BIF NASDAQ 03/11/83 53.188 6,709.26
WAYN Wayne Savings & Loan Co. MHC Wooster OH MW SAIF NASDAQ 06/25/93 26.000 38.97
WBST Webster Financial Corporation Waterbury CT NE SAIF NASDAQ 12/12/86 39.375 312.10
WCBI Westco Bancorp Westchester IL MW SAIF NASDAQ 06/26/92 21.500 55.19
WEFC Wells Financial Corp. Wells MN MW SAIF NASDAQ 04/11/95 15.000 31.17
WFCO Winton Financial Corp. Cincinnati OH MW SAIF NASDAQ 08/04/88 13.000 25.82
WFSL Washington Federal, Inc. Seattle WA WE SAIF NASDAQ 11/17/82 26.000 1,233.70
WRNB Warren Bancorp, Inc. Peabody MA NE BIF NASDAQ 07/09/86 15.750 57.67
WSB Washington Savings Bank, FSB Waldorf MD MA SAIF AMSE NA 5.125 21.63
WSFS WSFS Financial Corporation Wilmington DE MA BIF NASDAQ 11/26/86 11.875 153.33
WSTR WesterFed Financial Corp. Missoula MT WE SAIF NASDAQ 01/10/94 20.875 91.79
WVFC WVS Financial Corporation Pittsburgh PA MA SAIF NASDAQ 11/29/93 25.500 44.29
YFED York Financial Corp. York PA MA SAIF NASDAQ 02/01/84 18.125 123.11
Maximum 83.500 6,709.26
Minimum 2.750 4.37
Average 22.073 207.41
Median 19.563 53.14
</TABLE>
5
<PAGE>
FERGUSON & COMPANY Exhibit V - Selected Publicly Traded Thrifts
- ------------------
<TABLE>
<CAPTION>
Tangible ROAA ROACE
Price/ Current Current Current Total Equity/ Equity/ Core Before Before
LTM Price/ Price/ T Price/ Dividend Assets Assets T Assets EPS Extra Extra Merger Current
Core EPS Book V Book V Assets Yield ($000) (%) (%) ($) (%) (%) Target? Pricing
Ticker (x) (%) (%) (%) (%) MRQ MRQ MRQ LTM LTM LTM (Y/N) Date
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AADV 15.6 128.9 139.2 11.3 1.13 1,031,221 8.7 8.2 2.28 0.32 3.42 N 03/04/97
ABBK 14.2 121.3 135.8 8.4 1.86 486,958 6.9 6.2 1.51 0.74 11.00 N 03/04/97
ABCL 19.3 147.0 151.1 12.5 - 667,964 8.5 8.3 1.60 0.47 5.72 N 03/04/97
ABCW 14.8 187.5 192.2 11.6 1.07 1,869,211 6.2 6.0 3.17 0.72 11.06 N 03/04/97
AFCB 13.2 125.3 126.1 12.5 2.39 1,032,213 9.8 9.8 1.90 0.88 8.70 N 03/04/97
AFFFZ 6.0 116.5 118.4 8.9 4.90 2,209,051 8.0 7.9 5.47 1.37 19.46 N 03/04/97
AHM 18.6 216.7 257.5 8.5 2.13 49,902,044 4.9 4.3 2.23 0.29 4.53 N 03/04/97
ALBK 15.8 147.2 170.4 13.4 1.65 3,506,136 9.1 8.0 2.30 0.77 8.20 N 03/04/97
ANBK 19.7 100.5 100.5 9.6 0.92 486,639 9.2 9.2 0.66 0.15 1.44 N 03/04/97
ANDB 11.3 150.0 150.0 11.9 2.14 1,204,813 8.0 8.0 2.48 1.09 14.08 N 03/04/97
ASBI 15.5 121.7 121.8 13.5 3.69 396,755 11.1 11.1 1.05 0.62 5.40 N 03/04/97
ASBP 19.5 106.1 106.1 17.7 3.48 111,824 15.7 15.7 0.59 0.60 2.72 N 03/04/97
ASFC 17.8 153.2 184.6 12.4 1.05 7,272,763 8.1 6.8 2.36 0.53 6.38 N 03/04/97
BANC 17.4 173.9 187.1 11.2 0.88 2,170,480 6.4 6.0 0.95 0.85 10.90 N 03/04/97
BDJI 18.5 103.9 103.9 11.8 - 109,729 11.4 11.4 1.00 0.32 2.45 N 03/04/97
BFD 23.9 111.9 NA 12.6 1.21 820,567 10.5 NA 0.69 0.40 3.32 N 03/04/97
BFSB 12.6 112.7 112.7 17.0 2.49 129,601 14.3 14.3 1.53 1.06 7.02 N 03/04/97
BKC 13.2 147.7 154.7 12.5 4.74 558,437 8.5 8.1 2.30 1.26 14.40 N 03/04/97
BKCT 13.0 130.8 130.8 13.3 3.77 419,398 10.2 10.2 1.67 1.26 11.73 N 03/04/97
BKUNA 22.2 131.8 164.5 6.0 - 1,329,044 7.4 6.6 0.45 0.40 2.35 N 03/04/97
BSBC 14.8 159.4 159.4 14.3 2.00 183,511 9.0 9.0 0.27 1.05 11.77 N 03/04/97
BVFS 19.2 188.1 198.2 11.4 1.14 3,300,262 6.1 5.8 2.93 0.34 5.39 N 03/04/97
BWFC 23.5 94.2 94.2 14.9 2.38 143,186 15.9 15.9 0.50 0.77 4.12 N 03/04/97
CAFI 11.0 108.8 118.6 10.4 3.00 469,449 9.6 8.9 1.45 0.79 9.19 N 03/04/97
CAPS 13.3 132.8 132.8 11.2 1.71 235,687 8.5 8.5 1.05 0.63 6.65 N 03/04/97
CARV 24.1 65.5 68.4 6.1 - 372,147 9.4 9.0 0.41 (0.03) (0.28) N 03/04/97
CASB 20.5 158.4 158.4 9.7 - 348,050 6.1 6.1 0.80 0.51 8.16 N 03/04/97
CASH 12.3 112.7 127.3 13.3 2.12 369,885 11.8 10.6 1.38 0.75 6.38 N 03/04/97
CBCI 14.3 105.4 105.4 16.9 - 510,217 16.0 16.0 2.54 1.08 6.56 N 03/04/97
CBIN 13.9 107.1 107.3 11.6 2.47 234,600 10.9 10.8 0.99 0.59 5.03 N 03/04/97
CBNH 14.0 136.6 136.6 10.1 2.81 550,596 7.4 7.4 1.63 0.94 12.84 N 03/04/97
CBSA 12.1 141.7 169.9 4.6 1.51 2,875,907 3.3 2.8 2.19 0.25 7.48 N 03/04/97
CBSB 16.2 116.7 126.0 17.8 1.51 380,051 15.2 14.3 0.98 0.98 5.72 N 03/04/97
CEBK 16.6 107.0 120.6 11.0 1.77 324,297 10.3 9.2 1.09 0.59 5.92 N 03/04/97
CENF 10.5 152.6 152.9 8.0 1.07 2,184,858 5.2 5.2 3.23 0.55 10.88 N 03/04/97
CFB 13.2 196.7 223.7 11.3 0.78 6,868,213 5.8 5.1 2.73 0.66 11.05 N 03/04/97
CFCP 21.8 304.3 304.3 19.4 1.73 453,955 6.4 6.4 1.17 0.88 14.38 N 03/04/97
CFFC 13.2 123.3 123.3 17.0 2.52 166,664 13.8 13.8 1.69 1.04 7.50 N 03/04/97
CFSB 13.6 153.6 153.6 11.6 2.36 829,800 7.5 7.5 1.50 0.69 8.54 N 03/04/97
CFX 15.3 164.8 177.1 14.2 5.22 1,547,092 8.6 8.1 1.10 0.86 9.58 N 03/04/97
CIBI 12.6 101.5 101.5 11.6 2.29 95,787 11.4 11.4 1.39 0.64 4.99 N 03/04/97
CKFB 22.9 110.2 110.2 29.0 2.35 60,038 25.2 25.2 0.82 1.30 4.87 N 03/04/97
CMRN 17.0 99.1 99.1 24.5 1.70 191,879 24.7 24.7 0.97 1.15 4.39 N 03/04/97
CMSV 16.2 127.4 127.4 14.8 4.05 655,209 11.6 11.6 1.22 0.64 5.37 N 03/04/97
CNIT 18.4 150.6 165.3 10.6 2.25 685,962 7.0 6.5 2.42 0.40 5.61 N 03/04/97
CNSK 20.3 174.9 174.9 9.7 - 387,177 7.3 7.3 0.67 0.42 5.35 N 03/04/97
COFI 13.7 233.1 251.5 15.6 1.97 13,904,563 6.7 6.2 3.41 0.94 13.89 N 03/04/97
CSA 22.7 204.1 207.2 10.0 - 8,704,952 4.9 4.8 2.05 0.13 2.56 N 03/04/97
CTBK 13.1 113.9 116.5 7.6 2.05 242,182 6.7 6.6 1.49 0.65 9.54 N 03/04/97
CTZN 14.9 159.0 179.4 10.1 0.93 2,918,160 6.3 5.7 2.30 0.51 7.68 N 03/04/97
CVAL 14.2 136.8 136.8 12.1 2.05 290,173 8.9 8.9 1.51 0.61 6.72 N 03/04/97
CZF 15.6 109.0 109.0 17.5 2.91 75,635 16.0 16.0 0.88 0.78 4.30 N 03/04/97
DFIN 22.7 101.5 101.5 23.2 1.66 235,264 22.9 22.9 0.64 0.72 3.09 N 03/04/97
DIBK 8.4 169.9 176.8 14.2 1.74 751,303 8.3 8.0 2.46 1.82 22.19 N 03/04/97
DME 13.7 176.7 178.4 9.6 - 18,870,108 5.4 5.4 1.26 0.52 10.36 N 03/04/97
DNFC 12.8 177.7 179.8 10.3 - 1,473,054 5.9 5.8 1.42 0.67 11.58 N 03/04/97
DSL 18.2 151.2 153.6 11.4 1.38 5,198,157 7.5 7.4 1.28 0.42 5.34 N 03/04/97
EBSI 14.4 129.5 129.5 11.3 3.64 666,166 8.7 8.7 1.15 0.59 6.63 N 03/04/97
EFBI 17.4 98.2 98.3 12.4 - 246,397 12.7 12.7 0.87 0.68 4.71 N 03/04/97
</TABLE>
6
<PAGE>
FERGUSON & COMPANY Exhibit V - Selected Publicly Traded Thrifts
- ------------------
<TABLE>
<CAPTION>
Tangible ROAA ROACE
Price/ Current Current Current Total Equity/ Equity/ Core Before Before
LTM Price/ Price/ T Price/ Dividend Assets Assets T Assets EPS Extra Extra Merger Current
Core EPS Book V Book V Assets Yield ($000) (%) (%) ($) (%) (%) Target? Pricing
Ticker (x) (%) (%) (%) (%) MRQ MRQ MRQ LTM LTM LTM (Y/N) Date
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
EGFC 16.0 127.4 169.9 9.2 3.12 1,458,050 7.2 5.5 1.84 0.96 13.44 N 03/04/97
EIRE 16.7 152.4 152.4 10.4 1.46 409,639 6.8 6.8 1.15 0.63 9.38 N 03/04/97
EQSB 10.8 137.1 137.1 6.9 - 286,637 5.0 5.0 3.03 0.41 8.08 N 03/04/97
ESBK 22.4 95.3 99.6 6.0 3.37 222,839 6.3 6.1 0.85 0.28 4.43 N 03/04/97
FBBC 13.6 142.5 142.5 18.8 2.52 656,183 13.2 13.2 1.17 1.30 6.75 N 03/04/97
FBCI 17.6 111.4 111.7 11.3 1.63 484,106 10.2 10.1 1.12 0.50 4.37 N 03/04/97
FBHC 16.0 106.5 115.1 6.9 1.20 278,532 6.4 6.0 1.45 0.23 3.47 N 03/04/97
FBSI 14.7 99.3 99.5 14.7 1.04 157,014 14.8 14.7 1.31 0.83 5.19 N 03/04/97
FCIT 15.8 155.3 155.3 9.4 - 687,196 6.1 6.1 1.39 0.48 7.98 N 03/04/97
FCME 2.7 144.9 144.9 8.7 - 136,429 6.0 6.0 3.20 1.49 45.72 N 03/04/97
FDEF 23.0 106.6 106.6 22.9 2.44 543,411 21.5 21.5 0.57 0.78 3.26 N 03/04/97
FED 15.6 142.7 144.8 6.7 - 4,143,852 4.7 4.6 1.69 0.20 4.22 N 03/04/97
FESX 12.1 137.8 160.7 10.7 3.11 1,067,175 7.8 6.8 1.28 1.08 14.37 N 03/04/97
FFBI 23.2 99.4 99.4 7.7 - 97,143 7.7 7.7 0.71 0.12 1.28 N 03/04/97
FFBS 18.8 131.9 131.9 27.1 2.27 127,125 19.4 19.4 1.17 1.13 5.72 N 03/04/97
FFBZ 15.9 209.1 209.3 14.6 1.37 189,065 7.6 7.6 1.10 0.77 10.08 N 03/04/97
FFCH 14.1 176.7 176.7 10.8 2.67 1,582,274 6.1 6.1 1.92 0.52 8.24 N 03/04/97
FFES 11.1 112.4 112.4 7.1 2.33 958,550 6.3 6.3 2.32 0.43 6.91 N 03/04/97
FFFC 18.5 142.3 145.5 21.3 1.65 533,826 14.0 13.7 1.31 1.05 6.68 N 03/04/97
FFFG 17.1 168.2 168.2 10.2 - 311,028 6.1 6.1 0.22 0.21 3.28 N 03/04/97
FFFL 23.9 151.6 153.0 14.2 4.35 875,998 9.3 9.3 0.77 0.43 4.36 N 03/04/97
FFHC 14.5 236.6 244.2 17.0 2.28 5,700,431 7.2 7.0 1.82 0.91 12.48 N 03/04/97
FFHH 21.4 108.3 108.3 15.3 2.92 362,373 12.4 12.4 0.80 0.58 4.02 N 03/04/97
FFHS 16.4 99.7 100.4 8.8 1.88 222,302 8.9 8.8 1.04 0.13 1.35 N 03/04/97
FFIC 23.9 115.3 115.3 19.8 0.86 775,343 17.2 17.2 0.78 0.91 4.89 N 03/04/97
FFKY 16.5 167.4 178.6 22.8 2.60 367,067 13.6 12.9 1.21 1.23 8.76 N 03/04/97
FFLC 21.0 121.0 121.0 18.7 1.80 346,442 15.5 15.5 1.27 0.65 3.94 N 03/04/97
FFSL 15.5 108.1 108.1 11.9 2.04 108,914 11.0 11.0 0.79 0.58 4.84 N 03/04/97
FFSW 17.4 250.5 306.7 12.3 1.27 1,110,723 7.4 6.5 2.17 0.92 13.44 N 03/04/97
FFSX 17.2 151.1 152.4 12.4 2.40 457,311 8.2 8.1 1.74 0.41 4.90 N 03/04/97
FFWC 11.1 110.5 110.5 11.3 2.37 158,200 10.2 10.2 2.28 0.87 8.36 N 03/04/97
FFWD 13.6 115.1 115.1 14.7 2.54 159,693 12.8 12.8 1.16 0.92 6.68 N 03/04/97
FFYF 16.9 130.2 130.2 18.6 2.79 582,331 14.3 14.3 1.49 0.84 4.74 N 03/04/97
FGHC 18.3 190.4 212.5 15.2 0.71 150,551 8.0 7.2 0.41 0.56 6.79 N 03/04/97
FIBC 14.2 121.7 122.4 12.1 2.23 259,104 9.9 9.9 1.26 0.50 4.78 N 03/04/97
FISB 15.8 169.2 171.4 15.7 2.12 1,496,421 9.3 9.2 1.79 0.90 10.23 N 03/04/97
FKFS 12.2 123.4 123.4 9.3 0.90 310,695 7.5 7.5 1.82 0.48 5.93 N 03/04/97
FLFC 16.4 191.8 218.3 12.9 1.82 1,212,681 7.4 6.6 1.34 0.80 11.32 N 03/04/97
FMCO 10.5 139.7 143.1 8.7 1.01 541,710 6.2 6.1 1.89 0.58 9.05 N 03/04/97
FMSB 13.8 181.3 NA 11.9 0.99 416,832 6.6 NA 1.47 1.01 15.33 N 03/04/97
FNGB 17.4 118.7 118.7 13.5 3.37 615,503 11.4 11.4 1.09 0.56 4.61 N 03/04/97
FOBC 14.7 113.3 119.2 13.8 3.03 341,897 11.7 11.2 1.30 0.69 5.70 N 03/04/97
FRC 18.8 145.1 145.2 8.5 - 2,156,599 5.9 5.9 1.27 0.61 10.86 N 03/04/97
FSBI 13.4 142.5 142.5 10.3 1.51 320,336 7.2 7.2 1.78 0.50 6.98 N 03/04/97
FSFC 15.1 139.8 139.8 14.5 1.86 326,013 10.4 10.4 0.71 0.01) (0.08) N 03/04/97
FSLA 18.3 164.5 186.4 15.5 1.88 987,115 9.4 8.4 1.16 0.49 5.15 N 03/04/97
FSPG 10.8 156.6 159.7 10.3 2.12 498,399 6.6 6.4 1.75 0.90 13.77 N 03/04/97
FSTC 9.8 163.0 207.3 15.3 1.78 257,288 9.4 7.5 2.52 2.04 19.36 N 03/04/97
FTF 10.8 118.6 118.6 19.1 2.65 163,571 16.1 16.1 1.58 1.39 7.41 N 03/04/97
FTFC 17.4 190.4 201.9 12.1 2.23 1,469,422 6.3 6.0 1.65 0.71 10.18 N 03/04/97
FTSB 24.5 117.9 117.9 20.3 2.13 91,109 17.2 17.2 0.48 0.51 2.32 N 03/04/97
FWWB 20.4 130.7 142.3 21.4 1.01 977,075 15.1 14.1 0.97 1.05 5.71 N 03/04/97
GBCI 13.5 212.3 212.5 20.1 2.61 412,042 9.5 9.4 1.82 1.36 14.25 N 03/04/97
GDW 9.0 166.8 166.8 10.4 0.64 37,730,598 6.2 6.2 7.57 1.03 16.75 N 03/04/97
GFCO 14.3 99.6 101.4 9.6 3.02 278,721 9.6 9.5 1.57 0.31 3.28 N 03/04/97
GFSB 11.7 110.6 110.6 12.7 1.80 87,625 11.5 11.5 1.91 0.96 8.10 N 03/04/97
GLN 24.9 173.7 186.2 8.6 - 15,128,192 6.4 6.0 1.05 0.29 3.66 N 03/04/97
GPT 20.8 168.3 293.7 20.8 1.71 13,325,585 11.0 6.6 2.81 0.95 8.97 N 03/04/97
GRTR 24.1 140.4 140.4 8.5 1.26 2,541,888 8.3 8.3 0.66 0.72 7.55 N 03/04/97
</TABLE>
7
<PAGE>
FERGUSON & COMPANY Exhibit V - Selected Publicly Traded Thrifts
- ------------------
<TABLE>
<CAPTION>
Tangible ROAA ROACE
Price/ Current Current Current Total Equity/ Equity/ Core Before Before
LTM Price/ Price/ T Price/ Dividend Assets Assets T Assets EPS Extra Extra Merger Current
Core EPS Book V Book V Assets Yield ($000) (%) (%) ($) (%) (%) Target? Pricing
Ticker (x) (%) (%) (%) (%) MRQ MRQ MRQ LTM LTM LTM (Y/N) Date
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GSBC 14.5 234.4 234.4 21.1 2.32 669,483 9.0 9.0 1.19 1.42 14.24 N 03/04/97
GSLC 18.4 135.6 135.6 7.8 1.03 116,177 5.7 5.7 0.53 0.46 7.77 N 03/04/97
GTFN 24.2 161.7 168.5 15.7 1.49 2,897,162 9.7 9.3 1.33 0.73 7.00 N 03/04/97
GUPB 20.1 100.7 100.7 17.9 2.46 81,775 17.8 17.8 0.81 0.76 3.68 N 03/04/97
GWBC 21.1 90.8 90.8 23.3 2.78 66,439 25.6 25.6 0.68 0.76 2.99 N 03/04/97
HALL 13.0 98.3 98.3 7.0 - 396,808 7.1 7.1 1.47 0.43 5.81 N 03/04/97
HARB 15.7 214.1 223.0 17.7 3.68 1,060,339 8.3 8.0 2.42 0.91 10.74 N 03/04/97
HARL 12.7 169.7 169.7 10.7 1.88 324,230 6.3 6.3 1.67 0.62 9.33 N 03/04/97
HAVN 10.9 143.6 NA 9.0 1.82 1,583,545 6.3 NA 3.02 0.62 9.83 N 03/04/97
HBFW 19.4 115.2 115.2 16.1 1.01 325,168 14.0 14.0 1.02 0.52 3.36 N 03/04/97
HBNK 22.0 149.0 149.0 10.6 - 489,701 7.1 7.1 1.03 0.15 1.92 N 03/04/97
HBS 15.0 100.2 104.3 15.4 3.34 130,859 15.3 14.8 1.12 0.70 4.57 N 03/04/97
HFFB 22.2 102.9 102.9 29.9 2.54 107,051 26.8 26.8 0.71 0.99 3.52 N 03/04/97
HFFC 13.8 115.0 115.3 10.3 1.85 552,735 9.3 9.2 1.41 0.61 6.67 N 03/04/97
HFGI 14.6 143.6 143.6 6.5 - 527,369 4.5 4.5 0.72 0.32 7.42 N 03/04/97
HFSA 18.9 95.9 95.9 14.2 2.78 97,015 14.8 14.8 0.76 0.49 2.82 N 03/04/97
HHFC 23.9 98.9 98.9 12.3 3.64 83,659 12.4 12.4 0.46 0.21 1.36 N 03/04/97
HIFS 11.9 125.8 125.8 12.0 1.93 201,586 9.5 9.5 1.57 1.10 11.06 N 03/04/97
HMCI 22.2 108.2 108.2 6.7 - 335,824 6.2 6.2 0.90 0.11 1.72 N 03/04/97
HMNF 20.6 126.9 126.9 18.8 - 554,732 14.8 14.8 1.14 0.78 4.82 N 03/04/97
HOMF 13.0 169.4 175.4 14.0 1.47 650,433 8.3 8.0 2.09 1.01 12.18 N 03/04/97
HPBC 11.7 176.4 176.4 18.7 4.16 189,931 10.6 10.6 1.65 1.72 15.84 N 03/04/97
HRBF 23.5 106.5 106.5 13.7 2.34 218,777 12.9 12.9 0.73 0.33 2.35 N 03/04/97
HRZB 13.0 123.3 123.3 19.1 2.67 504,553 15.5 15.5 1.15 1.56 9.70 N 03/04/97
HTHR 19.3 89.8 89.8 3.5 - 827,784 5.3 5.3 0.57 0.89 16.58 N 03/04/97
HVFD 14.7 151.3 151.4 12.4 2.49 346,856 8.2 8.2 1.53 0.44 5.21 N 03/04/97
IFSB 23.1 69.1 79.8 4.7 2.44 247,888 6.7 5.9 0.39 0.13 1.98 N 03/04/97
INBI 15.9 114.1 114.1 21.7 3.11 326,613 19.0 19.0 0.81 0.75 3.62 N 03/04/97
IPSW 14.6 187.0 187.0 11.6 1.29 158,942 6.2 6.2 1.06 1.22 20.14 N 03/04/97
ISBF 24.4 147.0 151.5 25.8 1.35 685,827 16.4 16.0 1.03 0.80 4.34 N 03/04/97
ITLA 12.3 146.7 146.7 16.2 - 810,443 11.0 11.0 1.36 1.41 13.73 N 03/04/97
IWBK 15.8 241.7 247.6 6.5 1.60 1,703,244 6.8 6.7 2.22 0.81 11.92 N 03/04/97
JSBA 16.5 131.4 159.5 10.5 1.41 1,128,339 7.2 6.0 1.72 0.23 3.21 N 03/04/97
JSBF 16.7 117.2 117.2 25.3 3.56 1,518,830 21.6 21.6 2.36 1.65 7.60 N 03/04/97
KFBI 20.4 105.7 105.7 24.0 1.74 673,094 22.7 22.7 0.79 0.91 3.55 N 03/04/97
KNK 17.3 106.2 113.6 11.1 1.75 350,643 10.4 9.8 1.58 0.50 4.95 N 03/04/97
KSAV 13.5 103.9 104.0 14.1 2.79 100,840 13.6 13.6 1.59 0.88 5.94 N 03/04/97
KSBK 10.1 149.8 160.9 10.4 0.59 134,079 7.0 6.5 3.36 0.93 13.70 N 03/04/97
KYF 16.5 109.5 109.5 18.8 4.21 87,874 17.2 17.2 0.72 0.87 3.88 N 03/04/97
LARK 17.1 105.2 105.2 15.5 2.13 221,978 14.7 14.7 1.10 0.80 4.91 N 03/04/97
LARL 12.2 150.2 150.2 16.1 2.05 202,474 10.7 10.7 1.77 1.11 10.45 N 03/04/97
LFED 21.0 140.2 140.2 22.7 3.73 278,311 16.2 16.2 0.87 0.77 4.75 N 03/04/97
LIFB 16.6 128.0 132.2 13.6 2.24 1,419,762 10.6 10.3 1.18 0.68 5.52 N 03/04/97
LISB 23.3 173.3 175.1 15.8 1.61 5,759,340 9.1 9.1 1.60 0.63 6.22 N 03/04/97
LOGN 15.5 109.9 109.9 21.8 2.96 77,668 19.9 19.9 0.87 1.20 5.09 N 03/04/97
LSBX 8.5 148.2 148.2 12.7 - 337,856 8.6 8.6 1.19 1.61 20.74 N 03/04/97
LVSB 20.5 168.2 209.9 17.1 0.75 471,799 10.1 8.3 1.62 1.43 13.98 N 03/04/97
MAFB 13.4 169.5 196.4 13.2 0.89 3,230,341 7.8 6.8 3.03 0.68 9.57 N 03/04/97
MARN 16.9 101.5 101.5 23.1 3.64 175,806 22.7 22.7 1.30 1.15 4.90 N 03/04/97
MASB 12.7 118.7 118.7 12.3 2.65 888,237 10.4 10.4 3.22 1.08 10.65 N 03/04/97
MBB 18.2 95.7 243.5 6.3 3.20 848,255 8.0 4.2 1.03 0.17 0.83 N 03/04/97
MBB 18.2 95.7 243.5 6.3 3.20 848,255 8.0 4.2 1.03 0.17 0.83 N 03/04/97
MBLF 16.2 94.8 94.8 12.9 1.99 208,898 13.6 13.6 1.24 0.66 4.86 N 03/04/97
MCBN 12.7 87.9 87.9 7.6 2.74 57,838 8.6 8.6 1.50 0.40 4.50 N 03/04/97
MCBS 12.4 129.1 129.1 14.2 1.60 355,525 10.6 10.6 2.01 1.05 8.88 N 03/04/97
MDBK 13.3 139.7 151.4 12.4 2.53 1,039,098 8.9 8.3 2.15 1.05 11.72 N 03/04/97
MERI 14.0 156.8 156.8 12.1 1.97 226,591 7.7 7.7 2.54 0.55 7.36 N 03/04/97
MFBC 21.6 99.0 99.0 15.2 1.66 223,945 15.4 15.4 0.89 0.52 2.93 N 03/04/97
MFFC 23.3 111.9 111.9 17.3 4.36 175,707 15.4 15.4 0.59 0.61 3.24 N 03/04/97
</TABLE>
8
<PAGE>
FERGUSON & COMPANY Exhibit V - Selected Publicly Traded Thrifts
- ------------------
<TABLE>
<CAPTION>
Tangible ROAA ROACE
Price/ Current Current Current Total Equity/ Equity/ Core Before Before
LTM Price/ Price/ T Price/ Dividend Assets Assets T Assets EPS Extra Extra Merger Current
Core EPS Book V Book V Assets Yield ($000) (%) (%) ($) (%) (%) Target? Pricing
Ticker (x) (%) (%) (%) (%) MRQ MRQ MRQ LTM LTM LTM (Y/N) Date
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
MFLR 16.2 137.9 140.5 13.3 2.67 120,448 9.6 9.5 1.11 0.94 9.67 N 03/04/97
MFSL 13.5 127.2 129.1 10.4 2.13 1,129,756 8.2 8.1 2.78 0.53 6.48 N 03/04/97
MGNL 11.9 195.2 203.3 18.9 3.24 1,341,985 9.7 9.4 1.55 1.37 13.90 N 03/04/97
MIVI 17.9 97.5 97.5 18.1 1.08 70,329 18.5 18.5 0.83 0.68 3.63 N 03/04/97
MLBC 17.2 132.9 136.3 10.8 2.19 1,875,091 7.5 7.4 1.01 0.71 9.21 N 03/04/97
MSBF 13.4 107.1 107.1 20.5 2.38 66,541 19.1 19.1 1.57 1.29 6.07 N 03/04/97
MWBI 10.0 97.3 97.3 6.9 2.24 136,425 7.0 7.0 2.67 0.46 6.61 N 03/04/97
MWBX 10.6 179.5 179.5 13.5 2.37 522,570 7.5 7.5 0.48 1.33 17.97 N 03/04/97
MWFD 16.8 176.6 184.8 14.8 1.67 194,707 8.4 8.1 1.07 1.04 11.26 N 03/04/97
NASB 11.0 171.2 177.7 12.3 2.07 711,088 7.2 7.0 3.51 1.13 15.19 N 03/04/97
NEBC 24.3 100.2 117.1 7.0 2.35 238,459 7.9 6.9 0.56 0.46 5.49 N 03/04/97
NEIB 15.8 99.7 99.7 17.4 2.25 160,032 17.4 17.4 0.90 1.02 4.97 N 03/04/97
NHTB 13.6 107.2 107.2 7.8 4.12 264,016 7.3 7.3 0.89 0.40 5.25 N 03/04/97
NMSB 16.8 114.2 114.2 12.0 2.60 311,863 10.5 10.5 0.55 0.82 7.49 N 03/04/97
NSSB 20.9 162.3 173.5 18.2 2.09 683,299 11.2 10.6 1.10 0.95 8.91 N 03/04/97
NSSY 20.0 137.7 143.5 9.5 0.79 637,156 7.2 6.9 1.27 0.81 10.27 N 03/04/97
NTMG 22.4 104.2 104.2 5.6 - 93,924 5.8 5.8 0.33 0.32 4.83 N 03/04/97
NWEQ 14.5 97.7 97.7 13.0 3.26 96,518 12.3 12.3 0.93 0.76 5.88 N 03/04/97
NWSB 17.7 183.6 192.6 18.3 2.13 1,911,978 10.0 9.6 0.85 0.72 6.95 N 03/04/97
NYB 15.0 334.6 334.6 17.1 1.87 3,122,017 5.1 5.1 2.14 1.22 21.81 N 03/04/97
OCWN 22.4 450.1 450.1 36.9 - 2,483,685 8.2 8.2 1.53 2.49 31.08 N 03/04/97
OFCP 20.6 135.7 171.7 12.4 1.82 827,275 9.1 7.3 0.96 0.40 3.11 N 03/04/97
OHSL 15.9 106.9 106.9 12.4 3.46 217,627 11.6 11.6 1.38 0.57 4.60 N 03/04/97
PBCI 14.9 118.7 119.7 17.5 4.97 362,910 14.7 14.6 1.35 0.81 5.25 N 03/04/97
PBCT 22.2 223.1 223.4 18.0 2.59 7,645,200 8.1 8.1 1.53 1.13 13.87 N 03/04/97
PBKB 18.0 146.2 152.9 9.2 2.82 496,133 6.3 6.0 0.71 0.74 13.03 N 03/04/97
PBNB 16.2 130.0 139.0 12.5 2.92 482,394 9.6 9.0 1.95 0.93 8.92 N 03/04/97
PCBC 15.7 103.7 103.7 19.6 2.11 80,408 18.9 18.9 1.21 0.71 3.69 N 03/04/97
PCCI 16.1 161.7 161.7 13.0 - 304,085 8.1 8.1 0.84 1.06 13.14 N 03/04/97
PDB 23.6 148.8 148.8 23.4 3.77 125,086 15.7 15.7 0.45 (0.21) (0.77) N 03/04/97
PEEK 19.8 102.7 102.7 26.8 2.42 187,534 26.1 26.1 0.75 1.13 3.78 N 03/04/97
PERM 23.4 116.9 118.1 11.4 1.33 412,967 9.7 9.6 0.96 0.24 2.37 N 03/04/97
PERT 19.1 132.1 132.1 17.5 - 223,000 13.3 13.3 1.36 0.76 6.85 N 03/04/97
PETE 11.0 126.0 126.3 8.3 - 427,407 6.6 6.6 1.55 0.85 13.39 N 03/04/97
PFDC 12.6 123.5 123.5 18.9 2.61 280,339 15.3 15.3 1.82 1.12 7.26 N 03/04/97
PFNC 21.1 161.9 186.8 8.4 0.93 383,981 5.2 4.5 0.41 0.35 6.58 N 03/04/97
PFSB 13.2 120.8 148.6 9.9 1.12 1,213,679 7.6 6.2 1.89 0.55 6.39 N 03/04/97
PFSL 13.5 133.1 133.1 8.3 4.72 373,084 6.3 6.3 1.41 0.55 9.15 N 03/04/97
PHBK 13.8 200.3 239.6 16.2 2.32 5,398,398 8.1 6.9 2.25 1.21 14.41 N 03/04/97
PKPS 21.7 106.6 106.6 8.9 1.65 858,690 8.4 8.4 0.28 0.17 2.02 N 03/04/97
PLE 12.9 128.8 133.2 10.1 3.62 195,502 7.8 7.6 1.71 0.51 6.55 N 03/04/97
PSAB 16.1 155.7 NA 11.9 3.28 926,071 7.6 NA 1.29 0.46 5.75 N 03/04/97
PSBK 9.9 125.2 142.3 10.4 2.86 875,180 8.3 7.4 2.39 1.09 13.13 N 03/04/97
PTRS 22.7 98.3 98.3 8.1 1.40 125,497 8.2 8.2 0.88 0.03 0.27 N 03/04/97
PULS 11.9 138.6 138.6 10.8 3.89 509,690 7.8 7.8 1.51 0.72 7.60 N 03/04/97
PVFC 7.2 163.6 163.6 11.2 - 347,577 6.9 6.9 2.33 0.99 14.87 N 03/04/97
PVSA 11.4 150.9 152.3 11.3 1.96 945,302 7.5 7.5 2.32 0.77 10.67 N 03/04/97
PWBC 13.1 102.2 111.9 7.5 2.67 698,735 7.4 6.8 1.03 0.41 5.47 N 03/04/97
QCBC 18.9 107.0 107.2 9.5 - 764,466 8.9 8.9 1.01 0.27 2.87 N 03/04/97
QCFB 12.4 102.2 102.2 18.0 - 148,321 17.6 17.6 1.51 1.24 6.18 N 03/04/97
QCSB 20.8 208.0 208.0 32.4 1.74 1,358,656 15.6 15.6 2.77 1.63 10.10 N 03/04/97
RARB 12.6 137.2 140.1 10.8 2.81 354,176 7.8 7.7 1.98 0.84 11.12 N 03/04/97
RCSB 14.2 153.3 157.4 12.4 1.85 4,014,317 8.1 7.9 2.28 1.00 12.39 N 03/04/97
RELY 13.8 124.2 178.1 10.3 2.56 1,878,184 8.3 5.9 1.59 0.52 6.00 N 03/04/97
ROSE 12.5 142.9 142.9 9.6 2.46 3,259,627 6.3 6.3 2.87 1.00 16.03 N 03/04/97
RVSB 16.4 164.3 182.3 17.9 1.21 224,473 10.9 9.9 1.11 0.97 8.87 N 03/04/97
SBCN 21.4 98.4 98.4 12.0 3.38 218,734 11.8 11.8 0.83 0.19 1.50 N 03/04/97
SECP 17.8 143.5 143.5 21.0 1.44 3,657,959 15.5 15.5 4.69 0.99 6.02 N 03/04/97
SFED 17.0 103.4 103.4 13.2 1.40 166,030 12.8 12.8 1.01 0.45 3.22 N 03/04/97
</TABLE>
9
<PAGE>
FERGUSON & COMPANY Exhibit V - Selected Publicly Traded Thrifts
- ------------------
<TABLE>
<CAPTION>
Tangible ROAA ROACE
Price/ Current Current Current Total Equity/ Equity/ Core Before Before
LTM Price/ Price/ T Price/ Dividend Assets Assets T Assets EPS Extra Extra Merger Current
Core EPS Book V Book V Assets Yield ($000) (%) (%) ($) (%) (%) Target? Pricing
Ticker (x) (%) (%) (%) (%) MRQ MRQ MRQ LTM LTM LTM (Y/N) Date
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SFFC 14.5 97.9 97.9 17.4 2.18 82,809 17.8 17.8 1.27 1.01 5.29 N 03/04/97
SFSB 15.8 108.3 108.8 7.0 1.41 404,092 6.5 6.5 1.43 0.28 4.04 N 03/04/97
SFSL 12.4 153.2 156.0 14.1 2.48 624,296 9.2 9.1 1.43 0.94 9.99 N 03/04/97
SHEN 14.2 118.4 118.4 12.6 1.94 405,785 10.6 10.6 1.74 0.82 6.43 N 03/04/97
SISB 8.4 144.9 144.9 11.3 1.81 1,348,612 7.6 7.6 3.16 1.52 20.91 N 03/04/97
SMBC 15.7 101.5 NA 16.4 3.13 159,653 16.2 NA 1.02 0.74 4.56 N 03/04/97
SMFC 17.8 142.8 142.8 14.4 - 298,037 10.1 10.1 1.66 0.79 7.14 N 03/04/97
SOPN 18.4 110.9 110.9 27.8 3.40 265,888 25.0 25.0 1.09 1.34 5.18 N 03/04/97
SOSA 16.2 153.6 153.6 8.9 - 517,342 5.8 5.8 0.17 0.55 9.88 N 03/04/97
SPBC 16.6 157.0 157.5 14.0 1.79 4,357,170 8.9 8.9 1.61 0.62 6.85 N 03/04/97
SSBK 12.9 133.4 135.9 10.2 2.11 567,490 7.6 7.5 1.76 0.68 8.38 N 03/04/97
STFR 17.1 128.5 135.3 11.6 1.57 1,409,316 8.9 8.5 1.78 0.72 7.31 N 03/04/97
STND 20.0 122.9 123.1 13.7 1.96 2,405,221 11.2 11.1 1.02 0.53 4.45 N 03/04/97
STSA 23.3 149.0 NA 6.1 - 1,536,344 5.8 NA 0.73 0.16 0.91 N 03/04/97
SVRN 13.4 191.1 270.5 8.0 0.63 9,433,154 5.0 3.9 0.95 0.58 12.66 N 03/04/97
SWBI 15.4 131.6 131.6 13.7 3.82 382,375 10.4 10.4 1.29 0.72 6.30 N 03/04/97
SWCB 15.0 157.5 165.9 13.1 3.75 464,555 8.3 7.9 2.14 0.94 11.47 N 03/04/97
TBK 11.9 117.5 121.6 7.9 1.28 232,282 6.7 6.5 1.31 0.65 9.84 N 03/04/97
TCB 16.0 282.3 293.4 21.9 1.68 7,090,862 7.8 7.5 2.79 1.24 16.13 N 03/04/97
THR 17.6 100.6 101.0 14.4 2.38 89,271 14.3 14.3 0.86 0.53 3.59 N 03/04/97
THRD 16.9 102.4 117.3 12.4 2.13 647,853 11.2 9.9 1.11 0.61 4.74 N 03/04/97
TPNZ 19.1 105.0 105.0 19.1 1.38 116,726 18.2 18.2 0.76 0.71 3.82 N 03/04/97
TRIC 15.4 85.7 85.7 13.1 3.24 85,888 15.3 15.3 1.20 0.71 4.87 N 03/04/97
TSBS 21.2 138.8 151.9 23.9 2.21 601,017 17.2 15.9 0.75 1.56 8.34 N 03/04/97
TSH 14.2 99.9 99.9 13.3 3.33 388,910 13.3 13.3 1.06 0.69 4.42 N 03/04/97
TWIN 17.3 118.0 118.0 15.0 3.46 105,263 12.7 12.7 1.07 0.62 4.69 N 03/04/97
UBMT 15.2 98.0 98.0 22.1 4.82 107,945 22.5 22.5 1.28 1.20 5.24 N 03/04/97
UFRM 20.1 128.1 128.1 9.6 2.42 263,582 7.5 7.5 0.41 0.27 3.38 N 03/04/97
VFFC 17.0 142.2 147.7 11.2 0.64 808,545 7.9 7.6 0.92 1.42 17.69 N 03/04/97
WAMU 22.8 275.6 292.7 15.1 1.88 44,551,925 5.4 5.1 2.33 0.27 4.46 N 03/04/97
WAYN 24.1 170.8 170.8 15.6 3.54 250,057 9.1 9.1 1.08 0.28 2.97 N 03/04/97
WBST 13.6 158.8 205.1 8.0 1.83 3,917,600 5.3 4.2 2.89 0.67 12.23 N 03/04/97
WCBI 14.2 115.4 115.4 17.8 2.79 310,992 15.4 15.4 1.51 1.06 6.83 N 03/04/97
WEFC 15.6 110.5 110.5 15.5 - 201,326 14.0 14.0 0.96 0.61 4.21 N 03/04/97
WFCO 12.0 120.8 123.8 8.8 3.23 292,264 7.3 7.2 1.08 0.67 8.96 N 03/04/97
WFSL 12.9 185.9 207.5 21.0 3.36 5,869,259 11.3 10.3 2.02 1.64 13.93 N 03/04/97
WRNB 10.0 167.4 167.4 16.1 2.79 358,954 9.6 9.6 1.58 1.87 20.56 N 03/04/97
WSB 10.7 102.9 102.9 8.5 1.95 255,049 8.2 8.2 0.48 0.48 5.82 N 03/04/97
WSFS 10.2 202.3 204.4 11.3 - 1,357,635 5.6 5.5 1.17 1.28 21.19 N 03/04/97
WSTR 18.8 115.5 115.5 16.3 1.92 563,617 14.1 14.1 1.11 0.61 4.47 N 03/04/97
WVFC 13.1 126.2 126.2 16.1 3.14 275,920 12.7 12.7 1.95 1.06 7.78 N 03/04/97
YFED 16.0 130.2 130.2 10.6 3.31 1,160,035 8.2 8.2 1.13 0.55 6.57 N 03/04/97
Maximum 24.9 450.1 450.1 36.9 5.22 49,902,044 26.8 26.8 7.57 2.49 45.72
Minimum 2.7 65.5 68.4 3.5 - 57,838 3.3 2.8 0.17 (0.21) (0.77)
Average 16.2 139.2 146.2 13.7 1.96 1,623,703 10.4 10.2 1.47 0.76 7.86
Median 15.8 130.8 136.1 12.5 1.99 418,115 9.0 8.7 1.28 0.72 6.60
</TABLE>
10
<PAGE>
FERGUSON & COMPANY Exhibit V - Selected Publicly Traded Thrifts
- ------------------
ROAA ROACE
NPAs/ Price/ Core Before Before
Assets Core EPS Extra Extra
(%) EPS ($) (%) (%)
Ticker MRQ (x) MRQ MRQ MRQ
AADV 0.55 14.3 0.62 0.96 10.95
ABBK 0.31 13.1 0.41 0.76 11.32
ABCL 0.26 21.4 0.36 0.66 7.72
ABCW 0.80 12.8 0.91 0.99 16.05
AFCB 0.49 11.9 0.53 1.06 10.84
AFFFZ 0.44 2.3 3.51 4.72 63.21
AHM 2.07 15.7 0.66 0.73 16.58
ALBK 0.66 14.2 0.64 1.03 11.30
ANBK NA 16.3 0.20 (0.58) (6.00)
ANDB 1.21 11.9 0.59 1.07 13.44
ASBI 0.41 16.9 0.24 0.90 8.20
ASBP 1.60 19.2 0.15 1.11 5.83
ASFC 0.53 16.7 0.63 0.75 9.37
BANC 0.72 15.9 0.26 0.21 3.06
BDJI 0.22 16.0 0.29 0.71 6.25
BFD NA 22.9 0.18 0.60 5.53
BFSB 0.03 14.6 0.33 1.10 7.73
BKC 2.20 15.8 0.48 1.26 14.59
BKCT 1.03 12.4 0.44 1.24 11.84
BKUNA 0.66 19.2 0.13 0.62 7.38
BSBC 1.92 14.3 0.07 1.15 12.63
BVFS 0.73 16.6 0.85 0.58 9.79
BWFC 0.05 24.5 0.12 1.04 6.25
CAFI 0.35 12.5 0.32 1.05 10.82
CAPS 0.12 12.5 0.28 0.92 10.88
CARV 0.41 35.3 0.07 0.16 1.75
CASB 0.57 21.6 0.19 0.53 8.76
CASH 0.75 12.9 0.33 1.01 8.78
CBCI 1.57 13.7 0.66 1.35 8.39
CBIN 0.13 12.3 0.28 (0.21) (1.90)
CBNH 0.44 12.9 0.44 0.95 12.77
CBSA 0.56 11.8 0.56 0.45 13.95
CBSB 0.54 14.2 0.28 1.21 8.12
CEBK 1.67 10.3 0.44 0.99 9.82
CENF 1.46 17.6 0.48 0.50 9.77
CFB 1.02 12.7 0.71 0.90 15.97
CFCP 0.19 20.6 0.31 1.12 18.06
CFFC 0.35 12.1 0.46 1.41 10.22
CFSB 0.24 12.4 0.41 1.06 13.94
CFX 0.68 13.6 0.31 1.18 13.67
CIBI 0.69 12.2 0.36 0.91 7.81
CKFB 0.52 21.3 0.22 1.31 5.19
CMRN 0.13 17.2 0.24 1.35 5.46
CMSV 0.63 22.4 0.22 0.71 6.11
CNIT 0.77 14.1 0.79 (0.07) (0.96)
CNSK 1.17 42.6 0.08 (0.41) (9.65)
COFI 0.26 13.7 0.85 1.24 18.54
CSA 1.43 23.3 0.50 0.45 9.20
CTBK 1.61 11.3 0.43 0.72 10.85
CTZN 0.52 13.2 0.65 0.83 12.72
CVAL 0.64 13.8 0.39 0.92 10.36
CZF 0.22 20.2 0.17 (0.45) (2.73)
DFIN 0.15 33.0 0.11 0.67 2.94
DIBK 0.50 8.5 0.61 1.90 22.36
DME 2.20 13.5 0.32 0.63 12.05
DNFC 0.55 11.9 0.38 0.90 16.05
DSL 1.19 17.6 0.33 0.69 9.03
EBSI 0.88 14.7 0.28 0.75 8.43
EFBI 0.01 14.5 0.26 1.15 8.59
11
<PAGE>
FERGUSON & COMPANY Exhibit V - Selected Publicly Traded Thrifts
- ------------------
ROAA ROACE
NPAs/ Price/ Core Before Before
Assets Core EPS Extra Extra
(%) EPS ($) (%) (%)
Ticker MRQ (x) MRQ MRQ MRQ
EGFC 1.20 12.1 0.61 0.81 11.23
EIRE 0.26 12.3 0.39 0.83 12.16
EQSB 0.73 10.1 0.81 0.73 14.81
ESBK 0.84 17.6 0.27 0.36 5.64
FBBC 0.10 14.7 0.27 1.24 7.57
FBCI 0.65 16.4 0.30 0.69 6.77
FBHC 1.18 17.1 0.34 0.60 9.41
FBSI 0.04 13.4 0.36 1.37 9.21
FCIT 2.14 12.8 0.43 0.85 14.30
FCME 2.24 8.8 0.25 0.89 18.95
FDEF 0.41 27.3 0.12 0.87 3.93
FED 1.78 10.6 0.62 0.64 14.05
FESX 0.62 10.7 0.36 1.23 16.33
FFBI 0.22 20.6 0.20 (0.70) (8.84)
FFBS 0.32 17.7 0.31 1.50 7.70
FFBZ 0.66 18.2 0.24 0.90 11.97
FFCH 1.10 13.0 0.52 0.86 14.13
FFES 0.42 13.4 0.48 0.49 7.81
FFFC 0.36 17.3 0.35 1.34 9.33
FFFG 2.94 18.8 0.05 (0.63) (9.56)
FFFL 0.36 25.5 0.18 0.74 7.89
FFHC 0.28 13.5 0.49 1.37 18.81
FFHH 0.04 17.8 0.24 0.81 6.24
FFHS 0.39 14.7 0.29 0.09 0.98
FFIC NA 20.2 0.23 0.90 5.16
FFKY 0.10 15.2 0.33 1.53 11.17
FFLC 0.30 20.8 0.32 0.94 5.92
FFSL 0.34 20.4 0.15 0.62 5.61
FFSW 0.16 10.5 0.90 0.29 2.45
FFSX 0.15 17.9 0.42 0.69 8.50
FFWC 0.11 10.8 0.59 1.09 10.79
FFWD 0.02 12.7 0.31 1.24 9.55
FFYF 0.86 17.5 0.36 1.27 7.38
FGHC 1.21 20.8 0.09 0.81 10.10
FIBC 3.62 13.2 0.34 0.90 9.20
FISB 1.78 18.1 0.39 1.17 12.62
FKFS 2.42 11.1 0.50 0.84 10.86
FLFC 0.83 17.7 0.31 1.00 15.15
FMCO 1.20 9.0 0.55 1.06 16.36
FMSB NA 12.7 0.40 0.99 15.05
FNGB 0.15 16.4 0.29 0.91 8.04
FOBC 0.17 14.1 0.34 0.99 8.51
FRC 1.32 17.6 0.34 0.65 11.43
FSBI 0.42 13.6 0.44 0.80 11.48
FSFC 0.10 14.9 0.18 0.97 9.57
FSLA 0.72 17.1 0.31 0.95 10.22
FSPG 0.83 11.5 0.41 0.93 14.20
FSTC NA 11.1 0.56 1.80 19.58
FTF 0.08 11.8 0.36 1.50 9.39
FTFC 0.12 12.8 0.56 (0.02) (0.25)
FTSB 1.68 16.3 0.18 1.16 6.58
FWWB 0.22 17.0 0.29 1.30 8.48
GBCI 0.09 13.6 0.45 0.82 8.66
GDW 1.43 13.2 1.30 0.81 13.13
GFCO 0.21 14.4 0.39 0.72 7.63
GFSB 1.65 11.4 0.49 1.14 9.93
GLN 1.69 21.8 0.30 0.61 9.92
GPT 2.89 18.8 0.78 1.02 9.46
GRTR 7.84 22.1 0.18 0.80 8.38
12
<PAGE>
FERGUSON & COMPANY Exhibit V - Selected Publicly Traded Thrifts
- ------------------
ROAA ROACE
NPAs/ Price/ Core Before Before
Assets Core EPS Extra Extra
(%) EPS ($) (%) (%)
Ticker MRQ (x) MRQ MRQ MRQ
GSBC 1.75 13.1 0.33 1.76 19.00
GSLC 1.94 81.3 0.03 0.63 11.16
GTFN 0.41 21.1 0.38 0.96 9.92
GUPB 0.15 23.9 0.17 0.72 3.99
GWBC 0.12 20.0 0.18 1.10 4.34
HALL 0.02 12.0 0.40 0.58 8.28
HARB 0.57 15.6 0.61 1.17 14.41
HARL 0.04 11.1 0.48 1.00 16.02
HAVN 0.94 11.0 0.75 0.89 14.05
HBFW 0.00 19.0 0.26 0.80 5.66
HBNK 2.51 11.3 0.50 0.96 13.46
HBS 2.33 12.0 0.35 (0.04) (0.26)
HFFB 0.00 20.7 0.19 1.34 4.92
HFFC 0.54 12.5 0.39 0.92 9.99
HFGI 0.23 11.4 0.23 0.44 10.32
HFSA 0.18 15.0 0.24 0.93 5.92
HHFC 0.26 15.3 0.18 0.77 6.24
HIFS 0.59 10.1 0.46 1.22 12.57
HMCI 3.51 27.8 0.18 0.41 6.76
HMNF 0.06 19.6 0.30 0.93 6.09
HOMF 0.54 12.2 0.56 1.35 16.41
HPBC 0.04 10.9 0.44 1.74 16.28
HRBF 0.36 21.4 0.20 0.61 4.71
HRZB 0.00 11.7 0.32 1.63 10.36
HTHR 10.58 NM (0.11) (1.09) (32.90)
HVFD 0.78 13.1 0.43 0.96 11.56
IFSB 2.37 14.1 0.16 (0.55) (8.17)
INBI 0.16 15.3 0.21 1.68 8.86
IPSW 2.02 13.4 0.29 1.24 20.61
ISBF NA 24.2 0.26 (0.11) (0.68)
ITLA NA 12.0 0.35 1.46 12.83
IWBK 0.68 16.9 0.52 1.15 17.45
JSBA 1.02 13.9 0.51 (1.01) (13.85)
JSBF 1.30 15.6 0.63 1.72 8.08
KFBI 0.03 21.2 0.19 1.11 4.90
KNK 0.60 13.2 0.52 0.91 8.90
KSAV 0.27 14.1 0.38 1.11 7.96
KSBK 1.37 8.6 0.99 0.85 12.28
KYF 0.00 16.5 0.18 1.05 5.33
LARK 0.23 16.2 0.29 1.19 7.99
LARL 0.60 11.7 0.46 1.54 14.51
LFED 0.00 21.7 0.21 1.05 6.55
LIFB 0.44 14.4 0.34 0.90 8.56
LISB 1.08 21.2 0.44 0.87 9.10
LOGN 0.52 15.3 0.22 1.40 7.02
LSBX 0.56 6.2 0.41 2.11 25.30
LVSB 1.14 23.8 0.35 2.09 20.52
MAFB 0.40 12.2 0.83 1.14 14.80
MARN 1.04 16.7 0.33 1.51 6.66
MASB 0.24 12.3 0.83 1.08 10.45
MBB 0.78 17.4 0.27 (0.41) (8.02)
MBB 0.78 17.4 0.27 (0.41) (8.02)
MBLF 0.26 13.6 0.37 0.93 7.43
MCBN 0.34 9.7 0.49 0.85 9.79
MCBS 0.14 11.2 0.56 1.25 11.77
MDBK 0.36 13.0 0.55 1.05 11.70
MERI 0.29 12.3 0.72 1.01 13.56
MFBC 0.00 18.5 0.26 0.86 5.30
MFFC 0.17 24.6 0.14 0.88 5.28
13
<PAGE>
FERGUSON & COMPANY Exhibit V - Selected Publicly Traded Thrifts
- ------------------
ROAA ROACE
NPAs/ Price/ Core Before Before
Assets Core EPS Extra Extra
(%) EPS ($) (%) (%)
Ticker MRQ (x) MRQ MRQ MRQ
MFLR 0.97 17.3 0.26 1.01 10.37
MFSL 0.42 7.7 1.22 0.17 2.16
MGNL 2.47 12.5 0.37 1.72 17.46
MIVI 0.26 17.7 0.21 0.98 5.32
MLBC 0.84 20.7 0.21 0.63 8.43
MSBF 0.47 12.8 0.41 1.54 7.93
MWBI 0.68 9.8 0.68 0.82 11.63
MWBX 1.00 9.7 0.13 1.45 17.82
MWFD 0.24 17.3 0.26 0.21 2.45
NASB 2.79 11.0 0.88 0.71 10.15
NEBC 1.34 12.2 0.28 0.90 11.97
NEIB 0.20 12.7 0.28 0.57 3.16
NHTB 0.94 13.2 0.23 (0.37) (5.03)
NMSB 1.55 16.5 0.14 0.84 7.84
NSSB 1.09 17.4 0.33 1.13 10.26
NSSY 1.99 11.8 0.54 0.82 11.66
NTMG 1.35 26.3 0.07 (0.67) (12.87)
NWEQ 1.52 12.1 0.28 1.04 8.47
NWSB 0.91 19.7 0.19 1.02 10.32
NYB 1.29 13.6 0.59 1.39 26.29
OCWN 4.37 10.3 0.83 4.35 52.80
OFCP 0.18 17.6 0.28 (0.56) (5.68)
OHSL 0.01 18.3 0.30 (0.37) (3.14)
PBCI 2.23 14.8 0.34 1.20 8.08
PBCT 1.33 20.7 0.41 1.13 13.56
PBKB 0.95 18.8 0.17 0.74 12.44
PBNB 0.55 17.9 0.44 0.76 7.70
PCBC 0.00 18.3 0.26 1.43 7.65
PCCI 1.83 13.0 0.26 1.10 12.93
PDB 0.62 NM (0.16) (4.50) (22.16)
PEEK 0.60 23.2 0.16 1.21 4.33
PERM 1.08 18.2 0.31 0.69 7.17
PERT 0.26 17.1 0.38 1.08 7.69
PETE 1.04 9.0 0.47 0.96 14.77
PFDC 0.34 14.0 0.41 1.34 8.82
PFNC 0.91 13.5 0.16 0.75 14.51
PFSB 0.78 12.3 0.51 0.82 10.51
PFSL 0.26 13.6 0.35 0.62 10.14
PHBK 0.86 12.3 0.63 1.33 16.97
PKPS 4.14 16.8 0.09 0.57 6.91
PLE 1.56 12.3 0.45 0.92 11.83
PSAB NA 43.2 0.12 (0.39) (4.82)
PSBK 0.85 11.9 0.50 0.87 10.57
PTRS 2.20 25.0 0.20 (1.06) (12.06)
PULS 0.61 10.5 0.43 1.06 14.02
PVFC 0.53 8.9 0.47 1.36 20.42
PVSA 0.30 10.7 0.62 1.12 15.44
PWBC 0.59 13.0 0.26 0.58 7.92
QCBC 1.51 14.9 0.32 0.67 7.48
QCFB NA 10.7 0.44 0.39 2.11
QCSB 0.55 28.8 0.50 1.15 7.51
RARB 0.44 11.3 0.55 0.70 9.20
RCSB 0.64 13.7 0.59 0.96 11.98
RELY 0.86 12.7 0.43 0.83 10.12
ROSE 0.47 11.0 0.81 0.98 15.49
RVSB 0.28 16.3 0.28 1.10 10.18
SBCN 0.26 17.1 0.26 0.70 5.88
SECP 0.11 14.0 1.49 1.57 9.93
SFED 0.61 11.9 0.36 (0.30) (2.31)
14
<PAGE>
FERGUSON & COMPANY Exhibit V - Selected Publicly Traded Thrifts
- ------------------
ROAA ROACE
NPAs/ Price/ Core Before Before
Assets Core EPS Extra Extra
(%) EPS ($) (%) (%)
Ticker MRQ (x) MRQ MRQ MRQ
SFFC 0.79 13.5 0.34 1.24 6.96
SFSB 0.25 14.9 0.38 0.66 10.05
SFSL 0.25 12.0 0.37 1.33 14.39
SHEN 0.43 11.7 0.53 1.17 10.16
SISB 0.53 15.8 0.42 0.77 10.37
SMBC 0.61 14.8 0.27 1.06 6.65
SMFC 0.09 14.8 0.50 1.17 11.52
SOPN 0.08 16.7 0.30 1.77 7.02
SOSA 6.62 13.8 0.05 0.63 11.05
SPBC 0.15 14.9 0.45 1.01 11.40
SSBK 0.11 11.6 0.49 1.11 14.29
STFR 0.32 16.6 0.46 0.89 10.09
STND 0.18 19.6 0.26 0.70 25.30
STSA 0.42 14.7 0.29 0.57 11.09
SVRN 0.54 13.8 0.23 0.80 18.81
SWBI 0.24 15.1 0.33 0.96 9.31
SWCB 1.00 12.9 0.62 1.08 13.48
TBK 2.42 8.7 0.45 0.74 11.07
TCB 0.69 15.5 0.72 1.64 20.49
THR 1.23 15.1 0.25 0.91 6.35
THRD 0.32 17.4 0.27 0.73 6.59
TPNZ 0.93 20.1 0.18 0.87 4.83
TRIC 0.05 12.9 0.36 1.09 8.20
TSBS 0.50 23.4 0.17 1.38 7.59
TSH 0.08 13.9 0.27 0.92 6.80
TWIN 0.26 51.4 0.09 0.38 3.02
UBMT 0.62 15.2 0.32 0.14 0.60
UFRM 1.01 NM (0.02) (1.32) (16.96)
VFFC 1.98 16.3 0.24 1.10 13.85
WAMU 0.99 NM (0.02) (0.80) (16.80)
WAYN 0.69 25.0 0.26 0.65 7.04
WBST 0.80 13.3 0.74 0.78 15.00
WCBI 0.50 13.8 0.39 1.49 9.66
WEFC NA 16.3 0.23 0.96 6.88
WFCO 0.39 10.8 0.30 1.04 14.35
WFSL 0.81 12.3 0.53 1.76 15.54
WRNB 1.76 8.0 0.49 2.20 23.34
WSB NA 12.8 0.10 (1.00) (11.86)
WSFS 2.23 11.0 0.27 1.18 19.07
WSTR 0.10 18.6 0.28 0.95 6.83
WVFC 0.33 12.3 0.52 1.31 10.44
YFED 1.58 14.2 0.32 0.98 12.37
Maximum 10.58 81.3 3.51 4.72 63.21
Minimum - 2.3 (0.16) (4.50) (32.90)
Average 0.87 15.9 0.39 0.85 9.01
Median 0.57 14.3 0.34 0.92 9.44
15
<PAGE>
EXHIBIT VI
<PAGE>
Exhibit VI - Comparative Group Selection
To search for a comparative group for First Robinson, we selected all thrifts
from the entire U.S. with assets between $50 million and $100 million that have
sufficient trading volume to produce meaningful market information. All of these
thrifts are listed on either AMEX, NYSE, or Nasdaq.
We found 45 thrifts in the asset size described above. We eliminated 35 and
retained a group of 10. Normally, we consider 10 to be the desired sample size.
We eliminated thrifts for the following reasons: 1) Mutual holding company; 2)
BIF insured; 3) No PE information for the most recent quarter; 4) Negative ROAA
or ROACE for the most recent quarter; 5) Merger agreement has been executed; 6)
Non-performing assets of 1.25% or more of total assets; 7) Loans under 60% of
total assets; and 8) Loans serviced more than 40% of assets.
The group of 45 from which the comparative group was selected is listed on
Exhibit VI.1 and the selected comparative group is listed on Exhibit VI.2. On
Exhibit VI.1, we have underlined the cells that indicate which ones were not
selected and why. Set forth below is a legend for the column summarizing reasons
individual thrifts were not selected.
A Mutual holding company.
B BIF insured.
C No PE information for the most recent quarter.
D Negative ROAA and ROACE for the most recent quarter.
E Announced acquisition target.
F Non-performing assets of 1.25% or more of total assets.
G Loans are less than 60% of assets.
H Loans serviced exceeds 40% of assets.
1
<PAGE>
Exhibit VI.1 - Comparatives Selection
<TABLE>
<CAPTION>
Deposit Current Current
Insurance Stock Market
Agency Price Value
Ticker Short Name City State Region (BIF/SAIF) Exchange IPO Date ($) ($M)
- ------ ---------- ---- ----- ------ ---------- -------- -------- --- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ALBC Albion Banc Corp. Albion NY MA SAIF NASDAQ 07/26/93 17.375 4.34
AMFC AMB Financial Corp. Munster IN MW SAIF NASDAQ 04/01/96 12.500 13.35
ATSB AmTrust Capital Corp. Peru IN MW SAIF NASDAQ 03/28/95 10.000 5.28
BRFC Bridgeville Savings Bank Bridgeville PA MA SAIF NASDAQ 10/07/94 15.250 17.14
CBES CBES Bancorp, Inc. Excelsior Springs MO MW SAIF NASDAQ 09/30/96 14.250 14.61
CCFH CCF Holding Company Jonesboro GA SE SAIF NASDAQ 07/12/95 14.500 13.28
CIBI Community Investors Bancorp Bucyrus OH MW SAIF NASDAQ 02/07/95 17.250 11.49
CKFB CKF Bancorp, Inc. Danville KY MW SAIF NASDAQ 01/04/95 19.750 18.59
CNSB CNS Bancorp, Inc. Jefferson City MO MW SAIF NASDAQ 06/12/96 14.000 23.14
CRZY Crazy Woman Creek Bancorp Buffalo WY WE SAIF NASDAQ 03/29/96 11.750 12.43
CZF CitiSave Financial Corp Baton Rouge LA SW SAIF AMSE 07/14/95 13.125 12.63
FCB Falmouth Co-Operative Bank Falmouth MA NE BIF AMSE 03/28/96 13.750 20.00
FFBI First Financial Bancorp, Inc. Belvidere IL MW SAIF NASDAQ 10/04/93 15.500 7.01
FFDF FFD Financial Corp. Dover OH MW SAIF NASDAQ 04/03/96 13.750 20.00
FTSB Fort Thomas Financial Corp. Fort Thomas KY MW SAIF NASDAQ 06/28/95 14.250 22.43
GFSB GFS Bancorp, Inc. Grinnell IA MW SAIF NASDAQ 01/06/94 20.250 10.18
GUPB GFSB Bancorp, Inc. Gallup NM SW SAIF NASDAQ 06/30/95 14.750 13.29
GWBC Gateway Bancorp, Inc. Catlettsburg KY MW SAIF NASDAQ 01/18/95 14.000 15.59
HFSA Hardin Bancorp, Inc. Hardin MO MW SAIF NASDAQ 09/29/95 12.500 11.94
HHFC Harvest Home Financial Corp. Cheviot OH MW SAIF NASDAQ 10/10/94 9.875 9.23
HZFS Horizon Financial Svcs Corp. Oskaloosa IA MW SAIF NASDAQ 06/30/94 14.625 6.22
INCB Indiana Community Bank, SB Lebanon IN MW SAIF NASDAQ 12/15/94 15.500 14.29
KSAV KS Bancorp, Inc. Kenly NC SE SAIF NASDAQ 12/30/93 21.000 13.93
KYF Kentucky First Bancorp, Inc. Cynthiana KY MW SAIF AMSE 08/29/95 14.625 20.31
LOGN Logansport Financial Corp. Logansport IN MW SAIF NASDAQ 06/14/95 11.688 15.46
LXMO Lexington B&L Financial Corp. Lexington MO MW SAIF NASDAQ 06/06/96 12.125 15.34
MCBN Mid-Coast Bancorp, Inc. Waldoboro ME NE SAIF NASDAQ 11/02/89 19.938 4.59
MIVI Mississippi View Holding Co. Little Falls MN MW SAIF NASDAQ 03/24/95 12.500 10.97
MORG Morgan Financial Corp. Fort Morgan CO SW SAIF NASDAQ 01/11/93 11.500 8.95
MSBF MSB Financial, Inc. Marshall MI MW SAIF NASDAQ 02/06/95 18.500 12.09
NSLB NS&L Bancorp, Inc. Neosho MO MW SAIF NASDAQ 06/08/95 13.250 11.18
NTMG Nutmeg Federal S&LA Danbury CT NE SAIF NASDAQ NA 8.000 5.68
NWEQ Northwest Equity Corp. Amery WI MW SAIF NASDAQ 10/11/94 11.750 10.92
PCBC Perry County Financial Corp. Perryville MO MW SAIF NASDAQ 02/13/95 17.250 14.71
PFFC Peoples Financial Corp. Massillon OH MW SAIF NASDAQ 09/13/96 12.500 18.64
SFFC StateFed Financial Corporation Des Moines IA MW SAIF NASDAQ 01/05/94 17.250 14.03
SOBI Sobieski Bancorp, Inc. South Bend IN MW SAIF NASDAQ 03/31/95 13.750 12.29
SSB Scotland Bancorp, Inc Laurinburg NC SE SAIF AMSE 04/01/96 13.875 25.53
SZB SouthFirst Bancshares, Inc. Sylacauga AL SE SAIF AMSE 02/14/95 12.750 10.69
THBC Troy Hill Bancorp, Inc. Pittsburgh PA MA SAIF NASDAQ 06/27/94 20.000 21.36
THR Three Rivers Financial Corp. Three Rivers MI MW SAIF AMSE 08/24/95 14.250 12.13
TRIC Tri-County Bancorp, Inc. Torrington WY WE SAIF NASDAQ 09/30/93 18.250 11.11
WCFB Webster City Federal SB, MHC Webster City IA MW SAIF NASDAQ 08/15/94 13.500 28.35
WHGB WHG Bancshares Corp. Lutherville MD MA SAIF NASDAQ 04/01/96 13.625 22.07
WWFC Westwood Financial Corporation Westwood NJ MA SAIF NASDAQ 06/07/96 15.250 9.86
Maximum 21.000 28.35
Minimum 8.000 4.34
Average 14.569 13.93
Median 14.000 13.28
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Tangible ROAA ROAA ROAA
Price/ Price/ Current Current Current Total Equity/ Equity/ Core Core Before Before Before
LTM Core Price/ Price\ Price/ Dividend Assets Assets T Assets EPS EPS Extra Extra Extra
Core EPS EPS B Value B Value Assets Yield ($000) (%) (%) ($) ($) (%) (%) (%)
Ticker (X) (X) (%) (%) (%) (%) MRQ MRQ MRQ LTM MRQ LTM MRQ LTM
- ------ --- --- --- --- --- --- --- --- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ALBC 32.78 28.96 73.41 73.41 7.59 1.77 57,784 10.34 10.34 0.53 0.15 0.24 0.27 2.33
AMFC NA 19.53 86.81 86.81 16.82 1.92 83,542 19.37 19.37 NA 0.16 0.49 (0.06) NA
ATSB 66.67 17.86 73.86 NA 7.32 -- 72,108 9.91 NA 0.15 0.14 0.26 (0.49) 2.45
BRFC 23.46 20.07 108.00 108.00 31.26 2.10 54,835 28.94 28.94 0.65 0.19 0.97 0.28 3.38
CBES NA NA 86.05 NA 15.10 2.76 96,716 17.55 NA NA NA NA (0.16) NA
CCFH NA 20.14 97.58 97.58 20.67 2.32 79,325 21.19 21.19 NA 0.18 0.97 0.97 4.91
CIBI 13.07 13.07 101.53 101.53 12.12 2.23 94,799 11.94 11.94 1.32 0.33 0.68 (0.44) 5.03
CKFB 24.38 22.44 117.56 117.56 31.04 -- 59,898 25.22 25.22 0.81 0.22 1.28 1.38 4.70
CNSB NA 35.00 95.89 95.89 23.40 3.40 98,898 24.40 24.40 NA 0.10 NA (0.70) NA
CRZY NA 17.28 80.37 80.37 24.13 3.05 51,517 30.03 30.03 NA 0.17 0.79 0.39 3.10
CZF 14.91 19.30 104.08 104.08 16.70 1.46 75,635 16.00 15.99 0.88 0.17 0.78 (0.45) 4.30
FCB NA 28.65 91.97 91.97 22.60 -- 88,498 24.57 24.57 NA 0.12 0.67 0.79 NA
FFBI 21.83 19.38 93.37 93.37 7.22 1.46 97,143 7.73 7.73 0.71 0.20 0.12 (0.70) 1.28
FFDF NA 19.10 93.41 93.41 23.41 1.75 85,434 25.07 25.07 NA 0.18 0.69 (0.11) NA
FTSB 17.38 17.81 103.64 103.64 25.23 1.98 88,874 24.35 24.35 0.82 0.20 1.33 1.28 5.39
GFSB 11.31 11.51 103.26 103.26 11.94 2.71 85,206 11.57 11.57 1.79 0.44 0.91 0.17 7.59
GUPB 18.67 16.76 90.16 90.16 16.68 2.86 79,708 18.50 18.50 0.79 0.22 0.80 0.18 3.53
GWBC 26.92 NM 89.51 89.51 22.44 3.20 69,496 25.07 25.07 0.52 -- 0.84 0.02 3.30
HFSA 18.38 18.38 85.27 85.27 14.31 4.05 87,807 16.78 16.78 0.68 0.17 0.44 (0.60) 2.39
HHFC 15.67 15.43 72.29 72.29 12.08 2.19 76,399 16.71 16.71 0.63 0.16 0.75 0.74 4.14
HZFS 26.12 18.28 79.61 79.61 8.55 2.26 76,652 10.73 10.73 0.56 0.20 0.13 (0.68) 1.13
INCB 32.98 25.83 128.10 128.10 15.76 2.86 90,697 12.30 12.30 0.47 0.15 0.15 (0.75) 1.02
KSAV 12.96 9.72 100.82 100.91 14.49 3.42 96,150 14.37 14.36 1.62 0.54 0.82 0.05 5.30
KYF 20.60 22.85 106.13 106.13 23.61 3.42 86,009 22.25 22.25 0.71 0.16 0.89 0.07 3.68
LOGN 13.91 12.18 97.08 97.08 19.39 -- 79,726 19.98 19.98 0.84 0.24 1.24 0.41 4.78
LXMO NA NA 81.87 81.87 25.03 2.61 61,294 30.57 30.57 NA NA NA 1.03 NA
MCBN 14.88 15.10 93.34 93.34 8.20 1.28 55,956 8.78 8.78 1.34 0.33 0.34 (0.53) 3.83
MIVI 13.74 13.02 89.16 89.16 16.40 2.09 69,322 18.40 18.40 0.91 0.24 1.31 1.13 6.73
MORG 13.69 13.69 94.42 94.42 11.93 2.70 75,053 12.63 12.63 0.84 0.21 0.74 (0.04) 5.10
MSBF 12.01 11.56 96.00 96.00 19.24 3.77 62,832 20.05 20.05 1.54 0.40 1.40 0.27 6.19
NSLB 22.46 19.49 83.70 83.70 19.51 1.88 57,288 23.31 23.31 0.59 0.17 0.97 0.97 4.08
NTMG 24.24 20.00 108.84 108.84 6.23 3.40 91,158 6.22 6.22 0.33 0.10 0.67 0.66 10.92
NWEQ 14.33 15.46 86.72 86.72 11.43 1.74 95,501 12.14 12.14 0.82 0.19 0.71 0.05 5.18
PCBC 18.35 17.25 97.46 97.46 18.29 -- 80,394 18.77 18.77 0.94 0.25 0.88 0.55 4.36
PFFC NA NA NA NA NA 2.32 78,252 12.88 12.88 NA NA NA 0.48 NA
SFFC 15.54 14.38 94.01 94.01 18.29 -- 76,705 19.46 19.46 1.11 0.30 1.19 1.28 5.99
SOBI 35.26 31.25 87.47 87.47 15.59 2.16 78,863 17.82 17.82 0.39 0.11 0.43 0.48 2.34
SSB NA NA 103.31 103.31 36.22 3.92 70,488 35.05 35.05 NA NA NA 1.74 NA
SZB 37.50 24.52 84.33 84.33 12.16 2.00 90,542 14.41 14.41 0.34 0.13 0.57 0.84 3.50
THBC 19.80 20.83 118.55 118.55 21.47 2.53 99,470 18.11 18.11 1.01 0.24 1.02 0.22 4.84
THR 17.81 16.19 95.90 96.28 13.88 2.74 87,369 14.48 14.43 0.80 0.22 0.52 (0.42) 3.43
TRIC 18.07 15.73 89.55 89.55 14.48 5.93 76,718 16.17 16.17 1.01 0.29 0.95 1.00 5.13
WCFB 34.62 NM 131.07 131.07 30.00 1.47 94,492 22.89 22.89 0.39 -- 0.87 -- 3.88
WHGB NA NA 94.88 94.88 22.62 1.31 97,570 23.84 23.84 NA NA NA 1.05 NA
WWFC NA 15.89 103.32 117.85 10.53 1.31 93,648 10.19 9.05 NA 0.24 NA (0.65) NA
Maximum 66.67 35.00 131.07 131.07 36.22 5.93 99,470 35.05 35.05 1.79 0.54 1.40 1.74 10.92
Minimum 11.31 9.72 72.29 72.29 6.23 -- 51,517 6.22 6.22 0.15 -- 0.12 (0.75) 1.02
Average 21.95 18.79 95.31 96.40 17.62 2.16 80,128 18.25 18.43 0.81 0.21 0.76 0.27 4.26
Median 18.38 18.07 94.22 94.65 16.69 2.19 79,726 18.11 18.40 0.80 0.19 0.79 0.22 4.14
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
ROACE Loans Loans
Before NPAs/ Loans/ Loans/ Deposits/ Borrowings/ Serviced Serviced/
Extra Merger Current Assets Deposits Assets Assets Assets For Others Assets Reasons
(%) Target? Pricing (%) (%) (%) (%) (%) ($000) (%) for
Ticker MRQ (Y/N) Date MRQ MRQ MRQ MRQ MRQ MRQ MRQ Excluding
- ------ --- ----- ---- --- --- --- --- --- --- --- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ALBC 2.52 N 11/22/96 0.76 99.30 81.64 82.21 5.69 11,183 19.35 Included
AMFC (0.30) N 11/22/96 0.43 97.63 75.30 77.13 1.20 -- -- D
ATSB (4.96) N 11/22/96 2.58 110.63 72.47 65.51 23.44 NA NA C,F
BRFC 0.97 Y 11/22/96 0.21 62.36 36.80 59.01 9.50 -- -- E,G
CBES (1.18) N 11/22/96 NA NA NA 67.87 12.41 NA NA C,D
CCFH 4.58 N 11/22/96 0.92 70.95 61.17 76.52 0.63 NA NA
CIBI (3.61) N 11/22/96 0.88 99.76 73.84 74.02 13.05 650 0.69 D
CKFB 5.34 N 11/22/96 0.57 121.74 88.39 72.60 0.44 -- --
CNSB (2.85) N 11/22/96 0.33 78.83 58.59 74.33 -- 23,244 23.50 D,G
CRZY 1.29 N 11/22/96 0.12 88.95 50.73 57.03 11.87 81 0.16 G
CZF (2.73) N 11/22/96 0.22 71.48 58.49 81.83 -- 1,333 1.76 D,G
FCB 3.21 N 11/22/96 -- 58.43 43.17 73.88 0.96 447 0.51 B,G
FFBI (8.84) N 11/22/96 0.22 111.52 75.64 67.82 23.21 53,186 54.75 D,H
FFDF (0.41) N 11/22/96 0.15 93.59 58.61 62.63 10.98 -- -- D,G
FTSB 5.28 N 11/22/96 1.27 123.10 85.80 69.70 5.07 -- -- F
GFSB 1.45 N 11/22/96 NA NA NA 64.42 22.66 NA NA
GUPB 0.93 N 11/22/96 0.25 86.38 52.01 60.22 20.01 -- -- G
GWBC 0.07 N 11/22/96 0.09 35.39 26.22 74.09 -- -- -- C,G
HFSA (3.53) N 11/22/96 0.19 75.79 57.57 75.96 5.69 3,601 4.10 D,G
HHFC 4.33 N 11/22/96 0.19 72.21 55.04 76.21 6.54 378 0.49 G
HZFS (6.11) N 11/22/96 NA NA NA 72.03 16.50 NA NA D
INCB (6.01) N 11/22/96 NA NA NA 86.23 -- NA NA D
KSAV 0.32 N 11/22/96 0.55 102.89 82.53 80.21 4.16 -- --
KYF 0.31 N 11/22/96 -- 91.99 53.07 57.69 18.98 -- -- G
LOGN 1.81 N 11/22/96 0.36 99.87 70.06 70.16 3.76 -- --
LXMO NA N 11/22/96 0.98 97.20 66.91 68.83 -- NA NA C
MCBN (6.07) N 11/22/96 0.41 108.15 82.43 76.22 14.19 6,993 12.50 D
MIVI 6.04 N 11/22/96 0.46 76.83 62.05 80.77 -- -- --
MORG (0.31) N 11/22/96 1.29 116.99 71.50 61.12 24.58 4,444 5.92 D,F
MSBF 1.30 N 11/22/96 0.24 142.13 93.01 65.44 12.73 33,586 53.45 H
NSLB 4.14 N 11/22/96 -- 69.12 51.94 75.05 -- -- -- G
NTMG 10.39 N 11/22/96 NA 103.31 88.39 85.56 6.31 253,759 278.37 H
NWEQ 0.41 N 11/22/96 1.19 123.95 81.12 65.44 21.64 24,318 25.46
PCBC 2.83 N 11/22/96 NA 17.77 13.82 77.77 3.11 NA NA G
PFFC NA N 11/22/96 NA 61.12 52.76 86.31 -- -- -- C,G
SFFC 6.46 N 11/22/96 0.43 137.65 82.07 59.62 19.56 NA NA
SOBI 2.64 N 11/22/96 0.11 87.08 67.60 77.64 3.80 -- --
SSB 4.81 N 11/22/96 -- 105.04 62.10 59.12 4.26 -- -- C
SZB 5.69 N 11/22/96 0.13 95.56 68.91 72.11 11.61 -- --
THBC 1.14 Y 11/22/96 0.90 160.61 85.02 52.94 27.09 -- -- E
THR (2.89) N 11/22/96 1.22 91.46 65.96 72.12 11.27 NA NA D
TRIC 6.82 N 11/22/96 0.22 69.89 41.41 59.25 24.05 171 0.22 G
WCFB 0.02 N 11/22/96 0.45 76.32 57.36 75.15 0.35 -- -- A,C,G
WHGB 4.75 N 11/22/96 0.60 103.62 76.68 74.00 -- 11,115 11.39 C
WWFC (6.22) N 11/22/96 -- 46.32 41.32 89.21 -- -- -- D,G
Maximum 10.39 2.58 160.61 93.01 89.21 27.09 253,759 278.37
Minimum (8.84) -- 17.77 13.82 52.94 -- -- --
Average 0.79 0.50 91.51 64.13 71.40 8.92 12,243 14.08
Median 0.97 0.35 93.59 65.96 72.60 5.69 -- --
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Deposit Current Current
Insurance Stock Market
Agency Price Value
Ticker Short Name City State Region (BIF/SAIF) Exchange IPO Date ($) ($M)
- ------ ---------- ---- ----- ------ ---------- -------- -------- --- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ALBC Albion Banc Corp. Albion NY MA SAIF NASDAQ 07/26/93 17.375 4.34
CKFB CKF Bancorp, Inc. Danville KY MW SAIF NASDAQ 01/04/95 19.750 18.59
GFSB GFS Bancorp, Inc. Grinnell IA MW SAIF NASDAQ 01/06/94 20.250 10.18
KSAV KS Bancorp, Inc. Kenly NC SE SAIF NASDAQ 12/30/93 21.000 13.93
LOGN Logansport Financial Corp. Longansport IN MW SAIF NASDAQ 06/14/95 11.688 15.46
MIVI Mississippi View Holding Co. Little Falls MN MW SAIF NASDAQ 03/24/95 12.500 10.97
NWEQ Northwest Equity Corp. Amery WI MW SAIF NASDAQ 10/11/94 11.750 10.92
SFFC StateFed Financial Corporation Des Moines IA MW SAIF NASDAQ 01/05/94 17.250 14.03
SOBI Sobieski Bancorp, Inc. South Bend IN MW SAIF NASDAQ 03/31/95 13.750 12.29
SZB SouthFirst Bancshares, Inc. Sylacauga AL SE SAIF AMSE 02/14/95 12.750 10.69
Maximum 21.000 18.59
Minimum 11.688 4.34
Average 15.806 12.14
Median 15.500 11.63
</TABLE>
5
<PAGE>
Exhibit VI.2 - Comparatives Selected
<TABLE>
<CAPTION>
Tangible ROAA ROAA ROACE
Price/ Price/ Current Current Current Total Equity/ Equity/ Core Core Before Before Before
LTM Core Price/ Price\ Price/ Dividend Assets Assets T Assets EPS EPS Extra Extra Extra
Core EPS EPS B Value B Value Assets Yield ($000) (%) (%) ($) ($) (%) (%) (%)
Ticker (X) (X) (%) (%) (%) (%) MRQ MRQ MRQ LTM MRQ LTM MRQ LTM
- ------ --- --- --- --- --- --- --- --- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ALBC 32.78 28.96 73.41 73.41 7.59 1.77 57,784 10.34 10.34 0.53 0.15 0.24 0.27 2.33
CKFB 24.38 22.44 117.56 117.56 31.04 2.23 59,898 25.22 25.22 0.81 0.22 1.28 1.38 4.70
GFSB 11.31 11.51 103.26 103.26 11.94 1.98 85,206 11.57 11.57 1.79 0.44 0.91 0.17 7.59
KSAV 12.96 9.72 100.82 100.91 14.49 2.86 96,150 14.37 14.36 1.62 0.54 0.82 0.05 5.30
LOGN 13.91 12.18 97.08 97.08 19.39 3.42 79,726 19.98 19.98 0.84 0.24 1.24 0.41 4.78
MIVI 13.74 13.02 89.16 89.16 16.40 1.28 69,322 18.40 18.40 0.91 0.24 1.31 1.13 6.73
NWEQ 14.33 15.46 86.72 86.72 11.43 3.40 95,501 12.14 12.14 0.82 0.19 0.71 0.05 5.18
SFFC 15.54 14.38 94.01 94.01 18.29 2.32 76,705 19.46 19.46 1.11 0.30 1.19 1.28 5.99
SOBI 35.26 31.25 87.47 87.47 15.59 -- 78,863 17.82 17.82 0.39 0.11 0.43 0.48 2.34
SZB 37.50 24.52 84.33 84.33 12.16 3.92 90,542 14.41 14.41 0.34 0.13 0.57 0.84 3.50
Maximum 37.50 31.25 117.56 117.56 31.04 3.92 96,150 25.22 25.22 1.79 0.54 1.31 1.38 7.59
Minimum 11.31 9.72 73.41 73.41 7.59 -- 57,784 10.34 10.34 0.34 0.11 0.24 0.05 2.33
Average 21.17 18.34 93.38 93.39 15.83 2.32 78,970 16.37 16.37 0.92 0.26 0.87 0.61 4.84
Median 14.94 14.92 91.59 91.59 15.04 2.27 79,295 16.12 16.12 0.83 0.23 0.87 0.45 4.98
</TABLE>
6
<PAGE>
<TABLE>
<CAPTION>
ROACE Loans Loans
Before NPAs/ Loans/ Loans/ Deposits/ Borrowings/ Serviced Serviced/
Extra Merger Current Assets Deposits Assets Assets Assets For Others Assets
(%) Target? Pricing (%) (%) (%) (%) (%) ($000) (%)
Ticker MRQ (Y/N) Date MRQ MRQ MRQ MRQ MRQ MRQ MRQ
- ------ --- ----- ---- --- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ALBC 2.52 N 11/22/96 0.76 99.30 81.64 82.21 5.69 11,183 19.35
CKFB 5.34 N 11/22/96 0.57 121.74 88.39 72.60 0.44 -- --
GFSB 1.45 N 11/22/96 NA NA NA 64.42 22.66 NA NA
KSAV 0.32 N 11/22/96 0.55 102.89 82.53 80.21 4.16 -- --
LOGN 1.81 N 11/22/96 0.36 99.87 70.06 70.16 3.76 -- --
MIVI 6.04 N 11/22/96 0.46 76.83 62.05 80.77 -- -- --
NWEQ 0.41 N 11/22/96 1.19 123.95 81.12 65.44 21.64 24,318 25.46
SFFC 6.46 N 11/22/96 0.43 137.65 82.07 59.62 19.56 NA NA
SOBI 2.64 N 11/22/96 0.11 87.08 67.60 77.64 3.80 -- --
SSB 4.81 N 11/22/96 -- 105.04 62.10 59.12 4.26 -- --
SZB 5.69 N 11/22/96 0.13 95.56 68.91 72.11 11.61 -- --
Maximum 6.46 1.19 137.65 88.39 82.21 22.66 24,318 25.46
Minimum 0.23 0.11 76.83 62.05 59.62 -- -- --
Average 3.27 0.51 104.99 76.04 72.52 9.33 4,438 5.60
Median 2.58 0.46 99.87 81.12 72.36 4.93 -- --
</TABLE>
7
<PAGE>
EXHIBIT VII
<PAGE>
Exhibit VII
Pro Forma Assumptions
1. Net proceeds from the conversion were invested at the beginning of the period
at 5.50%, which was the approximate rate on the one-year treasury bill on
December 31, 1996. This rate was selected because it is considered more
representative of the rate the Association is likely to earn.
2. First Robinson's ESOP will acquire 8% of the conversion stock with loan
proceeds obtained from the Holding Company; therefore, there will be no interest
expense. We assumed that the ESOP expense is 10% annually of the initial
purchase.
3. First Robinson's RP will acquire 4% of the stock through open market
purchases at $10 per share and the expense is recognized ratably over five years
as the shares vest.
4. All pro forma income and expense items are adjusted for income taxes at a
combined state and federal rate of 37.5%.
5. In calculating the pro forma adjustments to net worth, the ESOP and RP are
deducted in accordance with generally accepted accounting principles.
6. Earnings per share ("EPS") calculations have ignored AICPA SOP 93-6.
Calculating EPS under SOP 93-6 and assuming 10% of the ESOP shares are committed
to be released and allocated to the individual accounts at the beginning of the
period would yield EPS of $1.07, $.94, $.85, and $.77, and price to earnings
ratios of 9.3, 10.6, 11.8, and 13.0, at the minimum, midpoint, maximum, and
supermaximum of the range,
1
<PAGE>
Exhibit VII
Pro Forma Effect of Conversion Proceeds
At the Minimum of the Conversion Valuation Range
Valuation Date as of March 4, 1997
First Robinson Savings and Loan Association, FA, Robinson, Illinois
- -------------------------------------------------------------------
1. Conversion Proceeds
Pro Forma Market Value $5,525,000
Less: Estimated Expenses (385,000)
----------
Net Conversion Proceeds $5,140,000
2. Estimated Additional Income From Conversion Proceeds
Net Conversion Proceeds $5,140,000
Less: ESOP Contributions (442,000)
RP Contributions (221,000)
-----------
Net Conversion Proceeds after ESOP & RP $4,477,000
Estimated Incremental Rate of Return(1) 3.44%
-----------
Estimated Additional Income $ 153,897
Less: ESOP Expense (27,625)
RP Expense (27,625)
------------
$ 98,647
============
3. Pro Forma Calculations
Before Conversion After
Period Conversion Results Conversion
------ ---------- ------- ----------
a. Pro Forma Earnings
Twelve Months Ended
December 31, 1996 $ 452,000 $ 98,647 550,647
b. Pro Forma Net Worth
December 31, 1996 $ 4,746,000 $4,477,000 9,223,000
c. Pro Forma Net Assets
December 31, 1996 $67,538,000 $4,477,000 72,015,000
(1) Assumes Proceeds can be reinvested at 5.50 percent and earnings taxed at a
rate of 37.5 percent.
2
<PAGE>
Exhibit VII
Pro Forma Effect of Conversion Proceeds
At the Midpoint of the Conversion Valuation Range
Valuation Date as of March 4, 1997
First Robinson Savings and Loan Association, FA, Robinson, Illinois
- -------------------------------------------------------------------
1. Conversion Proceeds
Pro Forma Market Valuation $6,500,000
Less: Estimated Expenses (400,000)
---------
Net Conversion Proceeds $6,100,000
2. Estimated Additional Income From Conversion Proceeds
Net Conversion Proceeds $6,100,000
Less: ESOP Contributions (520,000)
RP Contributions (260,000)
---------
Net Conversion Proceeds after ESOP & RP $5,320,000
Estimated Incremental Rate of Return(1) 3.44%
----------
Estimated Additional Income $ 182,875
Less: ESOP Expense (32,500)
RP Expense (32,500)
-----------
$ 117,875
===========
3. Pro Forma Calculations
Before Conversion After
Period Conversion Results Conversion
------ ---------- ------- ----------
a. Pro Forma Earnings
Twelve Months Ended
December 31, 1996 $452,000 117,875 569,875
b. Pro Forma Net Worth
December 31, 1996 $4,746,000 5,320,000 10,066,000
c. Pro Forma Net Assets
December 31, 1996 $67,538,000 5,320,000 72,858,000
(1) Assumes Proceeds can be reinvested at 5.50 percent and earnings taxed at a
rate of 37.5 percent.
3
<PAGE>
Exhibit VII
Pro Forma Effect of Conversion Proceeds
At the Maximum of the Conversion Valuation Range
Valuation Date as of March 4, 1997
First Robinson Savings and Loan Association, FA, Robinson, Illinois
- -------------------------------------------------------------------
1. Conversion Proceeds
Pro Forma Market Valuation $7,475,000
Less: Estimated Expenses (400,000)
-----------
Net Conversion Proceeds $7,075,000
2. Estimated Additional Income From Conversion Proceeds
Net Conversion Proceeds $7,075,000
Less: ESOP Contributions (598,000)
RP Contributions (299,000)
-----------
Net Conversion Proceeds after ESOP & RP $6,178,000
Estimated Incremental Rate of Return(1) 3.44%
-----------
Estimated Additional Income $ 212,369
Less: ESOP Expense (37,375)
RP Expense (37,375)
-----------
$ 137,619
-----------
3. Pro Forma Calculations
Before Conversion After
Period Conversion Results Conversion
------ ---------- ------- ----------
a. Pro Forma Earnings
Twelve Months Ended
December 31, 1996 $ 452,000 137,619 589,619
b. Pro Forma Net Worth
December 31, 1996 $ 4,746,000 $6,178,000 10,924,000
c. Pro Forma Net Assets
December 31, 1996 $67,538,000 $6,178,000 73,716,000
(1) Assumes Proceeds can be reinvested at 5.50 percent and earnings taxed at a
rate of 37.5 percent.
4
<PAGE>
Exhibit VII
Pro Forma Effect of Conversion Proceeds
At the SuperMax of the Conversion Valuation Range
Valuation Date as of March 4, 1997
First Robinson Savings and Loan Association, FA, Robinson, Illinois
- -------------------------------------------------------------------
1. Conversion Proceeds
Pro Forma Market Valuation $ 8,596,250
Less: Estimated Expenses $ (400,000)
-------------
Net Conversion Proceeds $ 8,196,250
2. Estimated Additional Income From Conversion Proceeds
Net Conversion Proceeds $ 8,196,250
Less: ESOP Contributions $ (687,700)
RP Contributions $ (343,850)
-------------
Net Conversion Proceeds after ESOP & RP $ 7,164,700
Estimated Incremental Rate of Return(1) 3.44%
-------------
Estimated Additional Income $ 246,287
Less: ESOP Expense $ (42,981)
RP Expense $ (42,981)
--------------
$ 160,324
--------------
3. Pro Forma Calculations
Before Conversion After
Period Conversion Results Conversion
------ ---------- ------- ----------
a. Pro Forma Earnings
Twelve Months Ended
December 31, 1996 $ 452,000 $ 160,324 $ 612,324
b. Pro Forma Net Worth
December 31, 1996 $ 4,746,000 $7,164,700 $11,910,700
c. Pro Forma Net Assets
December 31, 1996 $ 67,538,000 $7,164,700 $74,702,700
(1) Assumes Proceeds can be reinvested at 5.50 percent and earnings taxed at a
rate of 37.5 percent.
5
<PAGE>
Exhibit VII
Pro Forma Analysis Sheet
<TABLE>
<CAPTION>
Name of Association: First Robinson Savings and Loan Association, FA, Robinson, Illinois
Date of Market Prices: March 4, 1997 Illinois Publicly All Publicly
Comparatives Held Thrifts Held Thrifts
-------------- ----------------- -------------------
Symbols Value Mean Median Mean Median Mean Median
------- ----- ---- ------ ---- ------ ---- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Price-Earnings Ratio ...................... P/E
Last Twelve Months ................... N/A
At Minimum of Range .................. 10.0
At Midpoint of Range ................. 11.4 19.7 15.5 17.7 17.0 16.2 15.8
At Maximum of Range .................. 12.7
At Supermax of Range ................. 14.0
Price-Book Ratio .......................... P/B
At Minimum of Range .................. 59.9%
At Midpoint of Range ................. 64.6% 96.9 97.8 121.5 113.4 139.2 130.8
At Maximum of Range .................. 68.4%
At Supermax of Range ................. 72.2%
Price-Asset Ratio ......................... P/A
At Minimum of Range .................. 7.7%
At Midpoint of Range ................. 8.9% 16.1 14.9 13.3 13.4 13.7 12.5
At Maximum of Range .................. 10.1%
At Supermax of Range ................. 11.5%
Twelve Mo. Earnings Base .................. Y $ 452,000
Period Ended December 31, 1996
Book Value ................................ B $ 4,746,000
As of December 31, 1996
Total Assets .............................. A $67,538,000
As of December 31, 1996
Return on Money (1) ....................... R 3.44%
Conversion Expense ........................ X $ 400,000
Underwriting Commission ................... C 0.00%
Percentage Underwritten ................... S 0.00%
Estimated Dividend
Dollar Amount ........................ DA $ 195,000
Yield ................................ DY 3.00%
ESOP Contributions ........................ P $ 520,000
RP Contributions .......................... I $ 260,000
ESOP Annual Expense ....................... E $ 32,500
RP Annual Contributions ................... M $ 32,500
Cost of ESOP Borrowings ................... F 0.00%
<FN>
- -------------
(1) Assumes Proceeds can be reinvested at 5.50 percent and earnings taxed at a
rate of 37.5 percent.
</FN>
</TABLE>
6
<PAGE>
Exhibit VII
Pro Forma Analysis Sheet
Calculation of Estimated Value (V) at Midpoint Value
1. V= P/A(A-X-P-I) $ 6,500,000
---------------------------
1-P/A(1-(CxS))
2. V= P/B(B-X-P-I) $ 6,500,000
---------------------------
1-P/B(1-(CxX))
3. V= P/E(Y-R(X+P+I)-(E+M)) $ 6,500,000
---------------------------
1-P/E(R(1-(CxX))
Value
Estimated Value Per Share Total Shares Date
----------------- ------------ -------------- ---------------
$6,500,000 $10.00 650,000 March 4, 1997
Range of Value
$6.5 million x 1.15 = $7.475 million or 747,500 shares at $10.00 per share
$6.5 million x 0.85 = $5.525 million or 552,500 shares at $10.00 per share
7
<PAGE>
EXHIBIT VIII
<PAGE>
Exhibit VIII.1 - Pink Sheet Banks
<TABLE>
<CAPTION>
Current Current
Stock Market
Price Value
Ticker Short Name City State Region Exchange IPO Date ($) ($M)
- ------ ---------- ---- ----- ------ -------- -------- --- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
AANB Abigail Adams National Bancorp Washington DC MA OTC Bul NA 26.000 7.41
ABCU Alliance Bank Culver City CA WE OTC Bul NA 0.750 2.64
ACNB ACNB Corporation Gettysburg PA MA OTC Bul NA 16.880 89.48
AMNB American National Bankshares Danville VA SE OTC Bul NA 24.000 78.72
ASTXX Bank of Astoria Astoria OR WE Pink Sh NA 12.000 13.88
ATLV Antelope Valley Bank Lancaster CA WE OTC Bul NA 34.250 26.28
BALX Bank of Alexandria Alexandria VA SE OTC Bul NA 13.380 8.75
BATH Bath National Corporation Bath NY MA OTC Bul NA 35.750 48.83
BBNK Business Bank of California San Bernardino CA WE OTC Bul NA 9.875 14.42
BCDO Bank of Coronado Coronado CA WE OTC Bul NA 4.625 3.48
BCNB Berlin City Bank Berlin NH NE OTC Bul NA 302.000 19.12
BCSV Bay Commercial Services San Leandro CA WE Pink Sh NA 10.500 11.31
BDGE Bridge Bancorp, Inc. Bridgehampton NY MA OTC Bul NA 62.000 29.09
BHBS Bar Harbor Bankshares Bar Harbor ME NE OTC Bul NA 38.500 66.15
BHEM Bank of Hemet Riverside CA WE Pink Sh NA 22.500 20.14
BKHB Blackhawk Bancorp, Inc. Beloit WI MW OTC Bul NA 11.500 26.29
BKTI Bank of Tidewater Virginia Beach VA SE OTC Bul NA 25.000 35.08
BLCA Borel Bank & Trust Company San Mateo CA WE OTC Bul NA 25.000 35.39
BMRC Bank of Marin Corte Madera CA WE OTC Bul NA 22.000 25.07
BNKA Bank of Amador Jackson CA WE OTC Bul NA 10.500 13.74
BPLU Bank of Petaluma Petaluma CA WE OTC Bul NA 19.000 11.43
BSMR Bank of Santa Maria Santa Maria CA WE OTC Bul NA 16.625 45.96
BVNC Beverly National Corp. Beverly MA NE OTC Bul NA 24.625 18.58
BWCF BWC Financial Corp. Walnut Creek CA WE OTC Bul NA 24.750 25.16
BWCK Brunswick Bancorp New Brunswick NJ MA OTC Bul NA 20.250 14.62
BWND Bank of South Windsor South Windsor CT NE Pink Sh NA 8.500 8.00
BYAR Bay Area Bancshares Redwood City CA WE OTC Bul NA 16.875 14.13
BYLK Baylake Corporation Sturgeon Bay WI MW OTC Bul NA 26.500 65.15
CADL Cardinal Bancorp, Incorporated Everett PA MA OTC Bul NA 19.000 18.81
CAFP Carolina First Bancshares Lincolnton NC SE Pink Sh NA 33.500 68.77
CBAN Colony Bankcorp, Incorporated Fitzgerald GA SE Pink Sh NA 22.500 32.60
CBIV Community Bankshares, Inc. Petersburg VA SE OTC Bul NA 17.250 32.79
CBTN CB&T, Incorporated McMinnville TN SE OTC Bul NA 115.000 30.43
CCBN Central Coast Bancorp Salinas CA WE OTC Bul NA 22.750 64.81
CCFN CCFNB Bancorp, Incorporated Bloomsburg PA MA OTC Bul NA 17.250 23.83
CCNE CNB Financial Corporation Clearfield PA MA OTC Bul NA 35.500 61.16
CESR Central Sierra Bank San Andreas CA WE OTC Bul NA 11.875 9.71
CFCXX C&F Financial Corporation West Point VA SE Pink Sh NA 17.750 37.51
CHMG Chemung Financial Corporation Elmira NY MA OTC Bul NA 35.750 74.08
CHTP Charter Pacific Bank Agoura Hills CA WE OTC Bul NA 2.125 9.79
CIBN California Independent Bancorp Yuba City CA WE OTC Bul NA 22.000 31.93
CIWV Citizens Financial Corp Elkins WV SE OTC Bul NA 25.500 17.43
CLBU Commerce National Bank Worthington OH MW Pink Sh NA 30.000 15.80
CLDB Cortland Bancorp Cortland OH MW OTC Bul NA 45.000 48.67
CMTV Community Bancorp. Derby VT NE Pink Sh NA 19.000 27.59
CNAF Commercial National Fincl Corp Latrobe PA MA OTC Bul NA 23.500 42.30
CNBB CNB Bancorp, Inc. Gloversville NY MA OTC Bul NA 27.000 43.20
CNBC Center Bancorp, Inc. Union NJ MA OTC Bul NA 32.250 48.51
COBG Continental Bank Garden City NY MA Pink Sh NA 20.000 18.43
CPKF Chesapeake Financial Shares Kilmarnock VA SE OTC Bul NA 15.000 12.60
CSVG Commercial Bancshares, Inc. Upper Sandusky OH MW OTC Bul NA 57.125 19.83
CTLN Cortland First Financial Corp. Cortland NY MA OTC Bul NA 21.500 43.34
CTVN Shore Bancshares, Incorporated Centreville MD MA Pink Sh NA 28.000 28.21
CTZV Citizens Savings B&TC St. Johnsbury VT NE OTC Bul NA 44.000 6.69
CVIC Clovis Community Bank Clovis CA WE OTC Bul NA 21.250 23.31
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
Current Current
Stock Market
Price Value
Ticker Short Name City State Region Exchange IPO Date ($) ($M)
- ------ ---------- ---- ----- ------ -------- -------- --- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CVLY Codorus Valley Bancorp, Inc. Glen Rock PA MA OTC Bul NA 30.375 31.75
CWBS Commonwealth Bnkshrs, Inc. Norfolk VA SE OTC Bul NA 10.500 9.95
CYBK County Bank Corporation Lapeer MI MW OTC Bul NA 41.500 24.62
CYFN Century Financial Corporation Rochester PA MA OTC Bul NA 15.750 53.11
CZFS Citizens Financial Services Mansfield PA MA OTC Bul NA 27.000 36.73
CZNC Citizens & Northern Corp. Wellsboro PA MA OTC Bul NA 26.875 134.71
DAWB Delaware County B&TC Delaware OH MW OTC Bul NA 47.000 66.95
DEBC Delta National Bancorp Manteca CA WE OTC Bul NA 27.500 10.36
DIMC Dimeco, Incorporated Honesdale PA MA OTC Bul NA 24.000 17.33
DNBF DNB Financial Corporation Downingtown PA MA OTC Bul NA 32.500 22.47
DNIG Dana Niguel Bank, NA Dana Point CA WE Pink Sh NA 1.750 1.63
DROV Drovers Bancshares Corporation York PA MA OTC Bul NA 23.500 66.02
EGBXX EvergreenBank Seattle WA WE Pink Sh NA 13.000 9.06
EMBM Empire Banc Corporation Traverse City MI MW OTC Bul NA 38.250 66.78
EPNB Ephrata National Bank Ephrata PA MA OTC Bul NA 33.750 101.25
EVNXX Evans Bancorp, Incorporated Angola NY MA Pink Sh NA 21.000 7.14
FBMI Firstbank Corporation Alma MI MW OTC Bul NA 37.000 60.23
FBSYA First Busey Corporation Urbana IL MW OTC Bul NA 23.250 133.03
FBTT First Bankers Trustshares, Inc Quincy IL MW OTC Bul NA 33.250 10.53
FCBN First Citizens Bancorp. of SC Columbia SC SE OTC Bul NA 207.000 184.81
FCFT FCFT, Incorporated Princeton WV SE OTC Bul NA 34.250 154.81
FCZA First Citizens Banc Corp Sandusky OH MW OTC Bul NA 31.000 94.60
FDDB Fidelity Deposit & Discount Bk Dunmore PA MA OTC Bul NA 84.250 34.87
FDNM First National Community Bank Dunmore PA MA OTC Bul NA 31.250 34.08
FETM Fentura Bancorp, Incorporated Fenton MI MW OTC Bul NA 43.125 29.20
FGYH First Guaranty Bank Hammond LA SW Pink Sh NA 8.500 21.87
FINN First Natl of Nebraska, Inc. Omaha NE MW OTC Bul NA 3,500.000 1,213.68
FIOW First Financial Bancorporation Iowa City IA MW OTC Bul NA 31.125 72.57
FIVR First Evergreen Corporation Evergreen Park IL MW OTC Bul NA 425.000 170.85
FJMY First Jermyn Corporation (The) Jermyn PA MA OTC Bul NA 44.750 39.59
FKYS First Keystone Corporation Berwick PA MA OTC Bul NA 34.500 30.68
FLHI First Lehigh Corporation Allentown PA MA OTC Bul NA 5.250 10.50
FLLC First Financial Bancorp Lodi CA WE OTC Bul NA 9.750 12.75
FMBH First Mid-Illinois Bcshs, Inc. Mattoon IL MW OTC Bul NA 40.000 37.40
FMNB Farmers National Banc Corp. Canfield OH MW OTC Bul NA 24.875 82.37
FNAN First NB of Anchorage Anchorage AK WE OTC Bul NA 1,760.000 352.00
FNBB FNB Financial Corporation McConnellsburg PA MA OTC Bul NA 33.000 13.20
FNBL First Litchfield Financial Litchfield CT NE Pink Sh NA 29.000 14.12
FNCH FNB Corporation Christiansburg VA SE Pink Sh NA 38.000 63.15
FNLB First National Bancorp, Inc. Joliet IL MW OTC Bul NA 97.250 118.25
FOBT Four Oaks Bank & Trust Company Four Oaks NC SE OTC Bul NA 24.125 20.22
FPHN First Philson Financial Corp. Berlin PA MA OTC Bul NA 56.000 24.39
FRAF Franklin Financial Svcs Corp. Chambersburg PA MA OTC Bul NA 32.500 61.75
FRMS Farmers & Merchants Bancorp Archbold OH MW OTC Bul NA 61.500 79.95
FSLB First Sterling Banks, Inc. Kennesaw GA SE Pink Sh NA 17.875 23.61
FWCC First West Chester Corporation West Chester PA MA OTC Bul NA 33.250 57.06
FWEH First Bank of West Hartford West Hartford CT NE OTC Bul NA 9.750 14.47
FXNC First National Corporation Strasburg VA SE OTC Bul NA 21.000 16.26
GABS Georgia Bancshares, Inc. Tucker GA SE Pink Sh NA 12.000 7.01
GBFP Georgia Bank Financial Corp. Augusta GA SE Pink Sh NA 19.000 29.30
GFLS Greater Community Bancorp Totowa NJ MA OTC Bul NA 18.688 35.20
GLBT Glastonbury Bank and Trust Co Glastonbury CT NE OTC Bul NA 10.625 19.44
GRBC GreatBanc, Incorporated Aurora IL MW Pink Sh NA 12.188 18.98
GREXX Greer State Bank Greer SC SE Pink Sh NA 24.000 14.98
GRGN Grange National Banc Corp Tunkhannock PA MA OTC Bul NA 38.750 13.64
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Current Current
Stock Market
Price Value
Ticker Short Name City State Region Exchange IPO Date ($) ($M)
- ------ ---------- ---- ----- ------ -------- -------- --- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
GRYB Guaranty State Bancorp Durham NC SE OTC Bul NA 23.250 20.46
HABN Harbor Bancorp Long Beach CA WE OTC Bul NA 13.625 19.28
HBKS Heritage Bankshares, Inc. Norfolk VA SE OTC Bul NA 11.375 8.92
HBNC Horizon Bancorp Michigan City IN MW OTC Bul NA 48.250 34.42
HBSI Highlands Bankshares, Inc. Petersburg WV SE OTC Bul NA 42.000 21.59
HEOP Heritage Oaks Bancorp Paso Robles CA WE OTC Bul NA 14.625 9.88
HOVB Hanover Bancorp, Inc. Hanover PA MA OTC Bul NA 17.000 50.48
HRFD Harford National Bank Aberdeen MD MA OTC Bul NA 47.500 15.26
HTLF Heartland Financial USA, Inc. Dubuque IA MW Pink Sh NA 25.375 120.16
IBDB Ironbound Bank Newark NJ MA Pink Sh NA 11.750 12.24
IBNC International Bancshares Corp. Laredo TX SW OTC Bul NA 53.000 463.65
IFNC Intrust Financial Corporation Wichita KS MW OTC Bul NA 63.750 141.68
IFST Iowa First Bancshares Corp. Muscatine IA MW OTC Bul NA 20.750 35.75
JFBC Jeffersonville Bancorp Jeffersonville NY MA Pink Sh NA 22.500 26.74
JUVF Juniata Valley Financial Corp. Mifflintown PA MA OTC Bul NA 42.000 46.85
LAYB Lafayette Bancorporation Lafayette IN MW OTC Bul NA 23.250 45.69
LKFN Lakeland Financial Corporation Warsaw IN MW OTC Bul NA 35.000 101.39
LNBB LNB Bancorp, Incorporated Lorain OH MW OTC Bul NA 30.000 124.16
LNBS Lanier Bankshares, Inc. Gainesville GA SE OTC Bul NA 19.500 12.07
MBKT Monroe Bank and Trust Monroe MI MW OTC Bul NA 33.250 166.25
MCBF MCB Financial Corporation San Rafael CA WE OTC Bul NA 11.250 10.61
MFRM Mechanics and Farmers Bank Durham NC SE OTC Bul NA 14.125 8.04
MGNB Mahoning National Bancorp, Inc Youngstown OH MW OTC Bul NA 23.000 144.90
MMBI Merchants and Manufacturers Milwaukee WI MW OTC Bul NA 31.000 27.02
MOBP Monarch Bancorp Laguna Niguel CA WE Pink Sh NA 3.000 103.12
MPEN Mid Penn Bancorp, Incorporated Millersburg PA MA OTC Bul NA 35.250 43.78
MSHN Merchants of Shenandoah BnCorp Shenandoah PA MA OTC Bul NA 26.500 7.72
MTMB Maritime Bank & Trust Company Essex CT NE OTC Bul NA 16.250 7.59
MTTB Mid-State Bank Arroyo Grande CA WE OTC Bul NA 17.250 113.45
NBOH National Bancshares Corp. Orrville OH MW OTC Bul NA 37.000 42.24
NECA New Canaan Bk & Trust Company New Canaan CT NE OTC Bul NA 55.500 18.21
NKSH National Bankshares, Inc. Blacksburg VA SE OTC Bul NA 25.500 96.72
NOTW Northwest Bank & Trust Company Davenport IA MW OTC Bul NA 33.000 28.05
NOVB North Valley Bancorp Redding CA WE OTC Bul NA 22.750 42.00
ORRB Orrstown Financial Services Shippensburg PA MA OTC Bul NA 31.000 30.28
PABK Pan American Bank Los Angeles CA WE OTC Bul NA 2.250 3.44
PABN Pacific Capital Bancorp Salinas CA WE OTC Bul NA 25.875 70.64
PAHC Pioneer American Holding Co. Carbondale PA MA OTC Bul NA 24.000 67.89
PCHB Pocahontas Bankshares Corp. Bluefield WV SE OTC Bul NA 18.500 37.00
PCLF Pinnacle Financial Corporation Elberton GA SE Pink Sh NA 62.500 48.00
PFCY Peoples Financial Corp., Inc. Ford City PA MA Pink Sh NA 28.500 25.07
PLBA Plumas Bank Quincy CA WE OTC Bul NA 13.500 17.61
PNBF PNB Financial Group Newport Beach CA WE OTC Bul NA 11.500 24.96
PPBK Peoples Bank of Oxford Oxford PA MA OTC Bul NA 22.250 60.61
PRFS PennRock Financial Services Blue Ball PA MA OTC Bul NA 17.000 102.64
PSBT Penn Security B&TC Scranton PA MA OTC Bul NA 94.000 50.48
PSEB Peoples State Bank (The) East Berlin PA MA OTC Bul NA 16.250 22.12
PSHR Pioneer Bancshares, Inc. Chattanooga TN SE OTC Bul NA 34.000 127.84
PWOD Penns Woods Bancorp, Inc. Jersey Shore PA MA OTC Bul NA 47.750 60.99
QNBC QNB Corporation Quakertown PA MA OTC Bul NA 32.000 45.58
RBNF Rurban Financial Corp., Inc. Defiance OH MW OTC Bul NA 30.250 69.22
SBGA Summit Bank Corporation Atlanta GA SE OTC Bul NA 14.750 20.76
SBHC Security Bank Holding Company Coos Bay OR WE OTC Bul NA 8.250 22.79
SBTL Salisbury Bank & Trust Company Lakeville CT NE OTC Bul NA 64.000 16.52
SBVA Salem Bank and Trust, NA Salem VA SE OTC Bul NA 15.250 20.30
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Current Current
Stock Market
Price Value
Ticker Short Name City State Region Exchange IPO Date ($) ($M)
- ------ ---------- ---- ----- ------ -------- -------- --- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SFBC Slade's Ferry Bancorp Somerset MA NE OTC Bul NA 9.000 25.10
SLFI Sterling Financial Corporation Lancaster PA MA OTC Bul NA 25.750 160.60
SLNB Santa Lucia National Bank Atascadero CA WE Pink Sh NA 18.500 7.29
SMAL Summit Bancshares, Inc. Oakland CA WE OTC Bul NA 33.250 14.12
SMTB Smithtown Bancorp, Inc. Smithtown NY MA OTC Bul NA 34.750 15.06
SNBN Security National Bank & Tr Co Newark NJ MA OTC Bul NA 14.500 3.84
SOJB Southern Jersey Bncp of DE Bridgeton NJ MA OTC Bul NA 40.000 43.40
SOMC Southern Michigan Bancorp, Inc Coldwater MI MW OTC Bul NA 45.875 43.60
SOVY Sonoma Valley Bank Sonoma CA WE OTC Bul NA 25.000 13.49
SRCK Slippery Rock Financial Corp. Slippery Rock PA MA OTC Bul NA 34.250 47.20
SRTB Saratoga Bancorp Saratoga CA WE OTC Bul NA 14.630 15.15
STYB Security Banc Corporation Springfield OH MW OTC Bul NA 44.000 266.20
SXSX Sussex County State Bank Franklin NJ MA OTC Bul NA 18.750 12.66
TBLC Timberline Bancshares, Inc. Yreka CA WE OTC Bul NA 11.375 10.86
TOBC Tower Bancorp Incorporated Greencastle PA MA OTC Bul NA 35.250 29.90
TRIXX Tri City Bankshares Corp. Oak Creek WI MW Pink Sh NA 22.500 55.94
UBFO United Security Bank, NA Fresno CA WE Pink Sh NA 23.250 39.14
UNBO UNB Corporation Canton OH MW OTC Bul NA 31.875 184.42
UPBN Upbancorp, Incorporated Chicago IL MW OTC Bul NA 71.000 15.67
USBH U.S.B. Holding Company, Inc Orangeburg NY MA OTC Bul NA 25.000 154.28
USBI United Security Bcshs, Inc. Thomasville AL SE Pink Sh NA 16.000 34.21
UVSP Univest Corporation of PA Souderton PA MA OTC Bul NA 38.250 148.74
VADO Valle de Oro Bank, NA El Cajon CA WE OTC Bul NA 16.500 19.40
VCBA Virginia Commerce Bank Arlington VA SE OTC Bul NA 12.600 12.09
VRBA VRB Bancorp Rogue River OR WE OTC Bul NA 13.500 47.79
VTGB Vintage Bank Napa CA WE Pink Sh NA 31.000 19.84
WIBW Wilton Bank Wilton CT NE OTC Bul NA 17.000 6.83
WMFR West Michigan National Bank Frankfort MI MW Pink Sh NA 16.250 6.69
WNNB Wayne Bancorp Wooster OH MW OTC Bul NA 29.000 114.14
YAVY Yadkin Valley Bank & Trust Co. Elkin NC SE Pink Sh NA 29.250 101.87
YOBK Yosemite Bank Mariposa CA WE OTC Bul NA 13.750 9.18
Maximum 3,500.000 1,213.68
Minimum 0.750 1.63
Average 58.319 53.82
Median 24.813 29.15
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
Price/ Price/ Tangible ROAA ROAC
Current Current Current Core Core Total Equity/ Equity/ Core Before Before
Price/ Price/T Dividend EPS EPS Assets Assets T Assets EPS Extra Extra
Book V Book V Yield (x) (x) ($000) (%) (%) ($) (%) (%)
Ticker (%) (%) (%) MRQ LTM MRQ MRQ MRQ MRQ LTM LTM
- ------ --- --- --- --- --- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
AANB 109.1 109.1 3.85 7.4 7.0 88,889 7.6 7.6 1.18 1.20 15.85
ABCU 80.7 80.7 - 16.4 9.4 48,047 6.8 6.8 0.07 0.62 9.46
ACNB 184.9 184.9 4.27 11.5 12.7 487,900 10.0 10.0 1.30 1.48 14.09
AMNB 150.8 NA 3.00 13.3 13.2 440,158 11.9 NA 1.82 1.35 11.66
ASTXX 165.1 165.1 5.83 8.8 8.5 80,197 10.5 10.5 1.42 2.16 20.84
ATLV 152.7 152.7 - 10.3 12.3 42,801 12.1 12.1 2.24 1.51 12.67
BALX 123.1 123.1 - 12.3 12.5 66,560 10.7 10.7 0.98 0.97 9.43
BATH 164.3 166.1 2.24 12.6 13.5 267,574 11.1 11.0 2.57 1.44 12.09
BBNK 104.6 110.2 - 33.9 19.4 100,308 13.7 13.1 0.49 0.92 7.02
BCDO 105.6 105.6 - 4.0 3.2 236,852 9.0 9.0 0.94 1.83 22.80
BCNB 89.1 94.9 2.32 8.8 8.1 243,602 8.8 8.3 37.43 1.06 12.78
BCSV 118.9 118.9 2.86 8.7 12.0 99,128 9.6 9.6 0.75 1.12 11.62
BDGE 179.2 179.2 4.68 9.3 10.0 212,603 7.6 7.6 6.00 1.48 18.35
BHBS 178.0 178.0 2.60 8.6 10.9 342,034 10.9 10.9 3.54 1.92 18.41
BHEM 100.2 100.2 4.44 14.9 12.0 234,257 8.6 8.6 1.83 0.59 6.82
BKHB 119.3 119.3 3.48 16.5 17.6 151,484 14.5 14.5 0.71 1.16 8.04
BKTI 235.2 235.2 4.00 15.4 15.1 153,373 9.7 9.7 1.59 1.61 16.26
BLCA 181.6 181.6 5.40 9.5 12.2 208,487 9.4 9.4 1.91 1.32 13.42
BMRC 166.3 166.3 - 9.9 11.8 187,149 8.1 8.1 1.55 1.06 12.85
BNKA 165.9 167.2 4.38 9.5 9.8 876,865 10.8 10.7 0.97 1.79 15.88
BPLU 122.0 124.1 0.50 8.2 10.8 129,476 7.2 7.1 1.69 0.90 12.32
BSMR 156.7 167.6 3.61 11.6 12.9 294,132 10.0 9.4 1.22 1.27 12.07
BVNC 126.4 126.4 2.60 7.3 7.8 180,619 8.1 8.1 2.59 1.16 14.13
BWCF 153.4 153.4 - 14.2 14.4 177,373 9.3 9.3 1.62 1.27 12.45
BWCK 79.4 79.4 - 19.5 12.3 93,536 19.7 19.7 1.58 1.21 6.40
BWND 89.6 89.6 - 12.1 9.9 135,000 6.6 6.6 0.83 0.61 9.18
BYAR 157.3 157.3 2.13 9.6 12.4 104,206 8.6 8.6 1.12 1.42 16.33
BYLK 177.6 200.9 3.62 16.0 14.3 388,148 9.5 8.5 1.92 1.42 12.87
CADL 127.1 127.1 2.11 9.5 9.9 124,101 11.9 11.9 1.73 1.37 11.72
CAFP 203.9 205.9 1.43 12.1 13.2 417,318 8.1 8.0 2.27 1.18 14.83
CBAN 127.8 131.5 1.33 9.0 11.8 288,574 7.9 7.7 1.87 0.88 11.25
CBIV 183.9 183.9 1.16 11.0 12.9 165,380 10.8 10.8 1.40 1.96 19.11
CBTN 97.7 97.7 - 5.7 6.1 256,571 12.1 12.1 6.28 1.70 14.30
CCBN 179.6 179.6 - 13.7 10.6 375,994 9.6 9.6 2.01 1.65 17.64
CCFN 115.4 115.4 2.32 11.7 12.7 170,086 12.2 12.2 1.33 1.11 9.35
CCNE 154.0 167.3 3.49 15.3 14.5 326,902 12.2 11.3 2.48 1.40 11.08
CESR 124.0 124.0 5.05 6.9 9.7 792,255 8.5 8.5 1.17 1.08 12.67
CFCXX 118.7 127.3 3.61 33.3 21.5 252,278 13.2 12.5 0.93 1.53 11.75
CHMG 132.0 152.1 3.13 10.6 12.2 532,213 10.5 9.3 2.84 1.19 11.30
CHTP 146.6 146.6 - NM 23.7 82,586 8.1 8.1 0.07 0.40 5.07
CIBN 163.7 163.7 2.00 12.5 12.0 216,952 9.3 9.3 1.91 1.60 17.66
CIWV 118.0 119.2 1.57 10.8 10.5 130,364 11.3 11.2 2.43 1.30 11.69
CLBU 212.0 212.0 1.17 14.7 16.4 103,267 7.2 7.2 1.83 1.14 13.44
CLDB 138.4 140.4 1.94 9.8 10.6 375,154 9.4 9.3 3.73 1.10 12.09
CMTV 144.5 144.5 5.90 8.9 11.2 205,536 9.3 9.3 1.49 1.08 12.23
CNAF 126.3 126.3 2.72 10.5 10.5 267,064 12.5 12.5 2.08 1.43 11.57
CNBB 155.7 155.7 2.96 16.4 13.4 214,762 12.9 12.9 1.91 1.46 11.34
CNBC 172.6 172.6 3.72 9.9 11.3 376,852 7.5 7.5 1.92 1.20 15.83
COBG 140.8 173.8 0.60 10.5 11.1 141,872 7.7 6.3 1.17 0.60 8.31
CPKF 104.8 105.6 1.87 7.1 8.2 142,734 8.4 8.4 1.83 1.15 13.65
CSVG 142.7 146.7 3.50 13.0 12.9 170,980 8.1 7.9 4.11 0.90 10.65
CTLN 170.8 170.8 2.61 13.9 13.7 219,072 11.6 11.6 1.42 1.35 11.74
CTVN 128.7 129.3 2.57 11.2 11.7 143,946 15.2 15.2 2.13 1.63 10.74
CTZV 75.7 75.7 3.41 6.8 7.3 388,667 10.0 10.0 5.61 0.98 10.02
CVIC 135.8 137.8 1.69 8.7 10.5 147,194 11.7 11.5 1.69 1.40 11.78
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Price/ Price/ Tangible ROAA ROAC
Current Current Current Core Core Total Equity/ Equity/ Core Before Before
Price/ Price/T Dividend EPS EPS Assets Assets T Assets EPS Extra Extra
Book V Book V Yield (x) (x) ($000) (%) (%) ($) (%) (%)
Ticker (%) (%) (%) MRQ LTM MRQ MRQ MRQ MRQ LTM LTM
- ------ --- --- --- --- --- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CVLY 143.8 143.8 2.50 10.4 11.1 235,693 9.4 9.4 2.60 1.17 13.02
CWBS 107.1 107.1 - 14.0 10.4 102,274 9.1 9.1 0.91 0.88 9.89
CYBK 127.2 127.2 2.70 7.6 7.7 174,766 11.1 11.1 4.84 1.68 15.67
CYFN 165.6 166.5 3.30 10.1 10.5 381,331 8.4 8.4 1.35 1.22 14.75
CZFS 160.3 167.2 3.33 11.7 11.3 282,810 8.1 7.8 2.32 1.13 13.59
CZNC 188.2 188.2 2.65 14.5 14.4 610,192 11.7 11.7 1.77 1.55 13.36
DAWB 215.2 215.2 1.49 10.9 11.7 318,257 9.8 9.8 3.26 1.59 15.66
DEBC 100.9 100.9 2.55 7.6 10.3 90,581 11.3 11.3 2.68 1.09 10.15
DIMC 131.8 131.8 3.00 11.5 11.1 140,240 9.4 9.4 2.17 1.22 12.95
DNBF 138.6 138.6 1.85 9.2 9.7 207,128 7.8 7.8 3.25 1.17 15.16
DNIG 43.1 43.1 - 9.4 9.4 434,515 11.0 11.0 0.16 0.38 3.48
DROV 173.3 173.3 2.55 12.1 13.4 446,713 8.5 8.5 1.59 1.20 13.31
EGBXX 78.6 78.6 1.46 10.5 10.3 133,886 8.6 8.6 1.26 0.69 7.89
EMBM 204.4 207.0 3.66 14.6 18.1 400,819 8.2 8.1 2.13 1.18 14.60
EPNB 251.5 251.5 1.42 22.3 22.3 294,650 13.7 13.7 1.48 1.55 11.51
EVNXX 47.4 47.4 2.95 4.0 4.4 136,730 11.0 11.0 4.77 1.20 10.82
FBMI 182.0 205.9 2.38 11.6 12.9 404,571 8.2 7.3 2.61 1.25 15.15
FBSYA 216.9 NA 2.93 17.4 17.3 864,918 8.5 NA 1.33 1.09 13.18
FBTT 106.0 118.2 1.56 4.8 5.2 178,644 6.1 5.6 5.31 1.07 18.40
FCBN 157.6 181.5 - 7.8 8.0 1,883,009 6.7 5.9 19.47 1.02 16.27
FCFT 173.3 181.7 4.09 9.1 10.2 837,664 10.7 10.2 3.34 1.73 16.26
FCZA 268.4 287.8 - 19.9 19.4 302,723 11.6 10.9 1.35 1.31 11.58
FDDB 137.5 137.5 2.61 11.4 12.9 269,137 9.4 9.4 6.69 1.09 11.70
FDNM 128.4 128.4 3.20 8.2 8.6 361,865 7.3 7.3 3.37 1.13 14.89
FETM 121.1 121.1 3.34 11.0 9.4 254,381 9.5 9.5 4.59 1.33 14.04
FGYH 201.4 201.4 4.71 4.9 5.9 200,882 7.4 7.4 0.89 1.53 22.90
FINN 248.7 NA 0.97 13.2 16.7 6,912,057 7.1 NA 203.28 1.08 15.30
FIOW 138.0 139.7 2.83 11.7 11.5 467,725 11.2 11.1 2.62 1.28 11.51
FIVR 94.2 96.6 3.53 8.3 8.8 1,861,756 9.7 9.5 48.10 1.09 11.75
FJMY 138.8 138.8 2.68 10.9 10.8 322,221 8.9 8.9 3.98 1.24 14.34
FKYS 111.7 111.7 4.06 8.6 7.3 242,557 11.3 11.3 4.73 1.76 15.62
FLHI 154.9 154.9 - 11.3 8.8 110,788 11.2 11.2 0.51 2.59 53.18
FLLC 110.3 110.3 2.05 26.4 23.2 106,175 10.9 10.9 0.41 0.54 4.85
FMBH 105.7 126.0 1.90 7.3 8.6 523,569 7.4 6.3 4.32 0.82 10.62
FMNB 236.7 NA 1.93 20.0 19.8 338,112 10.3 NA 1.21 1.27 12.01
FNAN 101.7 101.7 2.84 9.1 9.9 1,467,345 23.6 23.6 155.10 2.18 9.23
FNBB 127.8 130.5 2.18 13.3 14.7 98,433 10.5 10.3 2.38 1.02 9.36
FNBL 117.6 117.6 3.48 8.2 9.7 170,085 7.1 7.1 3.08 0.92 13.01
FNCH 170.6 170.6 3.68 11.7 11.8 395,324 9.1 9.1 3.23 1.41 15.20
FNLB 170.0 201.1 3.09 11.9 14.1 809,786 8.6 7.4 6.30 1.03 11.61
FOBT 140.8 142.6 2.16 9.7 10.7 159,113 9.0 8.9 2.24 1.24 13.96
FPHN 117.9 117.9 2.50 9.7 9.9 198,851 10.4 10.4 5.36 1.17 11.81
FRAF 176.7 178.3 2.46 12.0 13.8 326,638 10.7 10.6 2.27 1.34 12.43
FRMS 190.9 190.9 1.63 7.4 8.2 498,888 8.4 8.4 3.77 1.04 12.34
FSLB 165.2 166.1 1.68 13.5 10.2 132,240 10.8 10.8 1.37 1.71 14.97
FWCC 172.0 172.0 3.01 11.3 12.5 397,684 8.3 8.3 2.46 1.12 13.59
FWEH 173.8 173.8 1.64 6.9 7.1 177,068 10.8 10.8 0.78 1.90 21.28
FXNC 109.6 109.6 4.76 10.8 11.3 141,225 10.5 10.5 1.88 1.06 10.35
GABS 120.2 120.2 1.67 13.0 7.9 954,343 10.7 10.7 1.52 1.78 15.60
GBFP 179.3 189.4 - 12.5 15.4 216,007 7.6 7.2 1.14 0.99 12.68
GFLS 174.5 179.7 1.71 12.5 14.4 256,540 7.9 7.7 1.08 0.80 10.26
GLBT 127.6 127.6 - 8.5 4.9 230,106 6.6 6.6 1.87 0.80 14.95
GRBC 101.2 101.2 4.60 8.3 10.4 434,778 6.0 6.0 1.18 0.72 12.32
GREXX 175.1 175.1 - 13.8 14.4 89,891 9.5 9.5 1.53 1.17 11.87
GRGN 129.2 131.3 - 7.9 8.7 103,166 10.2 10.1 4.10 1.48 14.45
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Price/ Price/ Tangible ROAA ROAC
Current Current Current Core Core Total Equity/ Equity/ Core Before Before
Price/ Price/T Dividend EPS EPS Assets Assets T Assets EPS Extra Extra
Book V Book V Yield (x) (x) ($000) (%) (%) ($) (%) (%)
Ticker (%) (%) (%) MRQ LTM MRQ MRQ MRQ MRQ LTM LTM
- ------ --- --- --- --- --- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
GRYB 195.9 195.9 1.55 18.6 18.7 96,560 10.8 10.8 1.23 1.16 10.71
HABN 125.7 127.8 - 10.5 14.4 204,108 7.5 7.4 0.73 0.55 7.20
HBKS 146.0 146.0 - 7.0 8.3 376,846 8.0 8.0 1.11 1.21 15.20
HBNC 107.3 107.3 2.90 12.8 12.3 371,106 8.6 8.6 3.57 0.73 8.30
HBSI 108.9 108.9 1.71 8.7 9.9 177,676 11.2 11.2 3.96 1.16 10.38
HEOP 140.1 142.0 2.19 9.3 8.9 985,122 8.3 8.2 1.38 1.20 13.92
HOVB 160.1 160.1 2.82 16.3 17.7 356,129 8.9 8.9 1.03 1.03 11.12
HRFD 139.0 139.0 6.32 10.8 10.1 105,094 10.5 10.5 4.72 1.40 14.66
HTLF 171.0 174.0 1.58 13.8 16.2 736,552 9.5 9.4 1.50 1.13 12.00
IBDB 121.5 124.6 1.70 10.7 14.2 105,513 9.5 9.3 0.72 0.81 7.91
IBNC 177.5 NA - 8.8 8.7 2,998,401 8.7 4.77 1.46 17.09
IFNC 106.8 123.1 2.20 12.5 13.0 1,662,172 8.0 7.0 4.69 0.77 9.39
IFST 147.2 151.7 3.66 7.3 7.6 275,027 8.8 8.6 1.90 1.25 14.61
JFBC 129.2 129.2 2.84 13.1 11.5 200,222 10.4 10.4 1.87 1.19 11.28
JUVF 179.0 179.0 1.81 15.5 15.3 211,793 12.4 12.4 2.39 1.31 10.86
LAYB 131.9 NA 2.07 12.2 11.4 414,36 8.4 8.4 NA 2.05 12.30
LKFN 241.2 241.2 1.37 14.4 14.3 656,551 6.4 6.4 2.13 1.07 14.97
LNBB 280.9 280.9 2.13 19.7 20.6 438,243 10.1 10.1 1.41 1.37 13.70
LNBS 148.9 148.9 1.13 10.4 11.3 79,347 10.2 10.2 1.72 1.34 14.06
MBKT 155.7 156.7 2.17 9.2 9.9 898,300 11.9 11.8 3.29 1.90 16.24
MCBF 104.2 104.2 - 8.7 19.6 131,504 7.8 7.8 0.55 1.56 20.97
MFRM 56.5 56.6 4.96 5.1 6.3 126,551 11.2 11.2 2.29 1.04 9.53
MGNB 187.9 187.9 2.78 12.4 12.7 769,560 10.0 10.0 1.87 1.55 15.83
MMBI 104.3 104.3 2.58 23.8 16.9 270,756 9.6 9.6 1.75 0.45 4.55
MOBP 192.3 434.8 - 12.5 7.7 490,294 10.9 5.1 0.13 0.56 4.29
MPEN 177.8 179.2 4.31 11.2 12.6 210,299 11.7 11.6 2.67 1.65 14.32
MSHN 124.5 124.7 1.89 15.0 17.8 58,127 10.7 10.7 1.45 0.73 7.01
MTMB 129.4 129.4 2.46 8.8 10.0 69,900 8.4 8.4 1.47 1.08 11.97
MTTB 175.7 NA - 25.6 23.0 792,431 8.2 NA 0.67 0.57 7.00
NBOH 171.7 176.5 1.73 16.4 16.5 174,233 14.1 13.8 1.99 1.32 9.55
NECA 151.0 151.0 - 8.1 8.6 138,406 8.7 8.7 4.43 1.21 14.51
NKSH 191.6 195.7 2.51 15.8 14.9 389,351 13.0 12.7 1.74 1.65 16.51
NOTW 168.6 168.6 6.97 12.5 12.7 150,763 11.0 11.0 2.49 1.38 12.85
NOVB 180.4 NA 3.08 10.7 10.2 253,540 9.2 NA 2.14 1.70 18.70
ORRB 191.0 198.0 2.45 12.7 12.8 157,556 10.1 9.7 2.30 1.48 14.75
PABK 69.2 69.4 - NM 9.8 839,246 12.6 12.6 0.23 0.96 7.72
PABN 156.9 156.9 2.32 13.1 14.0 412,510 10.9 10.9 1.87 1.39 11.93
PAHC 231.7 236.9 2.83 19.4 20.0 330,213 9.2 9.0 1.20 1.13 12.76
PCHB 150.3 152.8 3.24 13.2 13.4 278,572 8.8 8.7 1.42 1.04 11.84
PCLF 149.8 149.8 2.69 8.4 8.6 234,230 13.7 13.7 5.92 2.03 14.84
PFCY 97.5 99.2 3.23 18.2 20.3 198,960 12.9 12.7 1.18 0.92 7.26
PLBA 153.2 153.9 - 9.3 11.5 142,092 8.1 8.1 1.07 1.14 14.12
PNBF 137.9 137.9 - 7.0 7.4 198,199 9.4 9.4 1.66 1.98 20.94
PPBK 204.7 204.7 1.44 18.5 19.5 192,894 15.4 15.4 1.14 1.69 10.98
PRFS 191.0 194.1 2.82 15.8 15.8 547,603 9.8 9.7 1.00 1.26 12.92
PSBT 124.4 124.4 3.40 11.4 10.5 398,035 10.2 10.2 8.57 1.17 11.54
PSEB 135.4 135.4 1.97 11.6 15.1 219,055 7.5 7.5 1.04 0.71 9.21
PSHR 140.2 151.3 2.56 13.5 16.9 854,071 10.7 10.0 2.12 1.01 9.15
PWOD 181.8 181.8 2.09 10.2 12.0 259,724 12.9 12.9 3.51 2.12 17.25
QNBC 206.7 206.7 1.75 17.6 17.0 286,717 7.7 7.7 1.94 1.02 13.31
RBNF 171.3 176.0 1.89 17.2 17.3 426,018 9.5 9.3 1.87 1.05 10.68
SBGA 132.3 130.0 2.17 17.6 13.0 140,869 11.1 11.3 1.19 1.84 16.14
SBHC 164.3 171.2 2.42 9.9 10.2 170,278 8.1 7.9 0.86 1.39 16.17
SBTL 89.2 89.2 2.69 6.5 8.5 170,782 10.9 10.9 6.60 1.27 11.79
SBVA 147.3 147.3 1.97 13.9 16.2 122,704 11.2 11.2 0.89 1.02 9.52
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Price/ Price/ Tangible ROAA ROAC
Current Current Current Core Core Total Equity/ Equity/ Core Before Before
Price/ Price/T Dividend EPS EPS Assets Assets T Assets EPS Extra Extra
Book V Book V Yield (x) (x) ($000) (%) (%) ($) (%) (%)
Ticker (%) (%) (%) MRQ LTM MRQ MRQ MRQ MRQ LTM LTM
- ------ --- --- --- --- --- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
SFBC 126.4 151.8 1.78 8.1 10.3 290,978 6.8 5.8 0.85 0.94 12.68
SLFI 237.3 237.3 2.95 17.6 17.5 748,273 9.0 9.0 1.53 1.36 15.06
SLNB 102.4 102.4 1.08 9.0 8.1 176,040 9.4 9.4 2.03 1.08 11.43
SMAL 119.8 119.8 4.51 10.6 10.1 91,339 12.9 12.9 3.15 1.67 12.76
SMTB 113.6 113.6 3.68 6.5 10.2 177,759 7.5 7.5 3.06 0.80 10.32
SNBN 60.2 60.2 - 13.0 14.9 81,302 7.8 7.8 0.87 0.32 4.10
SOJB 111.0 111.0 2.75 7.4 8.4 423,935 9.2 9.2 4.90 1.38 15.13
SOMC 186.7 200.5 2.09 14.1 13.9 235,542 9.8 9.2 3.17 1.45 13.96
SOVY 182.2 182.2 - 8.8 10.0 86,895 8.5 8.5 2.00 1.39 15.59
SRCK 237.5 237.5 1.75 14.0 15.0 192,454 10.3 10.3 1.87 1.55 13.84
SRTB 131.7 131.7 1.37 12.3 14.2 109,705 10.5 10.5 0.90 1.02 9.24
STYB 264.1 300.8 1.73 16.5 17.9 816,334 12.4 11.0 2.18 1.92 14.18
SXSX 164.5 186.2 2.56 19.3 20.7 98,778 7.8 6.9 0.82 0.55 6.93
TBLC 160.0 160.0 - 7.2 9.0 79,470 8.5 8.5 1.03 1.21 15.04
TOBC 168.9 168.9 2.55 14.2 13.5 148,621 11.9 11.9 2.56 1.62 13.80
TRIXX 114.5 114.5 3.78 8.0 9.7 436,657 11.2 11.2 2.33 1.41 12.71
UBFO 210.6 211.2 2.75 10.1 10.8 161,875 11.5 11.5 1.95 2.07 18.82
UNBO 258.5 283.8 2.20 25.0 24.6 809,979 8.8 8.1 1.34 1.08 11.89
UPBN 86.1 87.5 2.82 22.4 16.3 215,900 8.4 8.3 3.96 0.43 4.91
USBH 306.8 308.3 1.28 11.6 12.5 802,724 6.7 6.6 1.22 1.48 21.54
USBI 129.5 129.5 3.25 7.7 7.7 239,362 11.0 11.0 1.95 1.94 16.21
UVSP 152.9 157.0 2.41 11.3 11.2 912,459 10.7 10.4 3.21 1.34 12.90
VADO 126.1 126.1 1.46 9.2 13.4 183,449 8.4 8.4 1.16 0.82 9.45
VCBA 120.2 121.2 - 8.6 11.1 122,721 8.2 8.1 1.08 0.99 11.06
VRBA 242.4 253.8 - 9.5 10.4 166,949 11.8 11.3 0.91 2.03 17.65
VTGB 163.8 163.8 - 11.2 9.6 122,740 9.9 9.9 2.48 1.41 14.58
WIBW 103.8 103.8 2.94 7.0 7.2 271,606 9.2 9.2 2.35 1.37 15.28
WMFR 81.8 81.8 - 11.5 12.0 27,165 30.1 30.1 1.23 1.95 6.36
WNNB 285.4 292.9 1.31 17.8 18.6 334,692 12.0 11.7 1.34 1.50 12.81
YAVY 367.0 381.4 0.99 18.7 19.4 283,183 9.8 9.5 1.31 1.64 17.17
YOBK 114.4 114.4 - 14.3 12.9 80,379 10.0 10.0 0.93 0.87 8.96
Maximum 367.0 434.8 6.97 33.9 24.6 6,912,057 30.1 30.1 203.28 2.59 53.18
Minimum 43.1 43.1 - 4.0 3.2 227,165 6.0 5.1 0.07 0.32 3.48
Average 151.6 154.3 2.15 12.0 12.4 339,157 10.0 9.9 4.53 1.25 12.93
Median 146.9 148.1 2.19 11.3 11.8 207,808 9.6 9.5 1.87 1.21 12.70
</TABLE>
<PAGE>
ROAA ROACE
NPAs/ Core Before Before
Merger Current Assets EPS Extra Extra
Target? Pricing (%) ($) (%) (%)
Ticker (Y/N) Date MRQ MRQ MRQ MRQ
AANB N 05/22/96 3.04 0.28 1.09 14.20
ABCU N 03/04/97 1.57 0.01 0.24 3.56
ACNB N 03/04/97 0.46 0.36 1.58 15.68
AMNB N 03/04/97 NA 0.45 1.48 12.27
ASTXX N 02/28/97 0.50 0.34 2.01 19.44
ATLV N 03/04/97 NA 0.67 1.46 12.19
BALX N 03/04/97 4.10 0.25 0.97 9.08
BATH N 03/04/97 0.25 0.69 1.44 12.48
BBNK N 03/04/97 5.44 0.07 1.39 10.17
BCDO N 03/04/97 4.27 0.19 1.58 17.91
BCNB N 03/04/97 1.02 8.61 1.03 12.18
BCSV N 03/04/97 0.21 0.26 1.49 15.63
BDGE N 03/04/97 0.11 1.61 1.59 20.52
BHBS N 03/04/97 1.12 1.12 2.46 23.02
BHEM N 03/04/97 4.17 0.37 0.57 6.53
BKHB N 03/04/97 0.56 0.19 1.33 9.11
BKTI N 03/04/97 0.07 0.39 1.55 15.46
BLCA N 03/04/97 0.89 0.61 1.35 14.54
BMRC N 03/04/97 0.03 0.46 1.18 14.55
BNKA N 03/04/97 0.52 0.25 1.72 15.73
BPLU N 03/04/97 0.11 0.56 1.12 17.40
BSMR N 03/04/97 0.78 0.34 1.30 13.01
BVNC N 03/04/97 0.99 0.69 1.21 14.42
BWCF N 03/04/97 0.02 0.41 1.20 12.35
BWCK N 03/04/97 9.04 0.25 0.77 4.04
BWND N 02/28/97 2.31 0.17 0.52 7.71
BYAR N 03/04/97 1.06 0.36 1.47 16.90
BYLK N 03/04/97 0.80 0.43 1.09 11.35
CADL N 03/04/97 0.78 0.45 1.42 12.09
CAFP N 03/04/97 0.28 0.62 1.02 12.65
CBAN N 02/28/97 3.51 0.61 1.12 13.94
CBIV N 03/04/97 0.52 0.41 1.99 22.71
CBTN N 03/04/97 0.05 4.39 1.79 14.93
CCBN N 03/04/97 0.25 0.39 1.06 11.01
CCFN N 03/04/97 0.06 0.36 1.15 9.80
CCNE N 03/04/97 0.28 0.59 1.29 10.39
CESR N 03/04/97 1.26 0.41 1.46 17.24
CFCXX N 02/28/97 0.20 0.15 1.69 12.93
CHMG N 03/04/97 NA 0.82 1.33 12.68
CHTP N 03/04/97 5.93 (0.09) (1.89) (23.52)
CIBN N 05/22/96 1.52 0.46 1.47 15.88
CIWV N 03/04/97 0.13 0.59 1.24 11.03
CLBU N 02/28/97 - 0.51 1.19 14.38
CLDB N 03/04/97 0.47 1.01 1.16 12.63
CMTV N 03/04/97 1.11 0.47 1.34 15.01
CNAF N 05/22/96 0.14 0.52 1.41 11.07
CNBB N 03/04/97 NA 0.39 1.19 9.33
CNBC N 05/22/96 - 0.55 1.36 17.63
COBG N 03/04/97 1.32 0.31 0.61 8.30
CPKF N 03/04/97 NA 0.53 1.28 15.12
CSVG N 02/28/97 0.77 1.02 0.59 6.96
CTLN N 03/04/97 0.23 0.35 1.31 11.39
CTVN N 02/28/97 0.75 0.56 1.59 10.46
CTZV N 03/04/97 0.57 1.50 1.03 10.32
CVIC N 03/04/97 1.32 0.51 1.64 13.96
<PAGE>
ROAA ROACE
NPAs/ Core Before Before
Merger Current Assets EPS Extra Extra
Target? Pricing (%) ($) (%) (%)
Ticker (Y/N) Date MRQ MRQ MRQ MRQ
CVLY N 03/04/97 1.39 0.69 1.21 13.27
CWBS N 03/04/97 5.79 0.17 0.62 7.03
CYBK N 03/04/97 0.52 1.23 1.68 15.33
CYFN N 05/22/96 0.27 0.35 1.24 14.77
CZFS N 03/04/97 0.59 0.56 1.08 13.33
CZNC N 03/04/97 NA 0.44 1.46 12.75
DAWB N 03/04/97 0.30 0.87 1.61 16.17
DEBC N 03/04/97 2.33 0.90 1.50 13.53
DIMC N 03/04/97 NA 0.52 1.13 11.98
DNBF N 03/04/97 NA 0.86 1.19 15.50
DNIG N 03/04/97 4.38 0.04 0.40 3.61
DROV N 03/04/97 0.57 0.44 1.21 13.58
EGBXX N 02/28/97 0.27 0.31 0.65 7.59
EMBM N 03/04/97 NA 0.66 1.26 15.52
EPNB N 03/04/97 NA 0.37 1.50 11.00
EVNXX N 02/28/97 0.17 1.30 1.18 10.84
FBMI N 03/04/97 0.12 0.73 1.34 16.26
FBSYA N 03/04/97 NA 0.33 1.11 13.49
FBTT N 03/04/97 0.15 1.46 1.11 18.99
FCBN N 03/04/97 0.18 4.97 0.94 15.79
FCFT N 03/04/97 0.97 0.93 1.44 13.25
FCZA N 03/04/97 0.30 0.33 1.34 11.59
FDDB N 03/04/97 NA 1.89 1.16 12.47
FDNM N 03/04/97 0.46 0.88 1.13 15.18
FETM N 03/04/97 0.26 0.98 1.31 13.86
FGYH N 02/28/97 1.30 0.27 1.75 26.35
FINN N 03/04/97 NA 64.24 1.34 18.70
FIOW N 03/04/97 0.12 0.64 1.26 11.44
FIVR N 03/04/97 0.09 12.77 1.09 11.40
FJMY N 03/04/97 1.01 0.99 1.09 12.45
FKYS N 03/04/97 0.13 1.00 1.45 13.04
FLHI N 03/04/97 7.36 0.10 1.67 28.62
FLLC N 03/04/97 1.53 0.09 0.48 4.36
FMBH N 03/04/97 0.23 1.26 0.54 6.24
FMNB N 03/04/97 NA 0.30 1.21 11.17
FNAN N 03/04/97 0.45 42.36 2.35 9.90
FNBB N 03/04/97 0.78 0.66 1.09 10.25
FNBL N 02/28/97 1.17 0.91 1.06 14.76
FNCH N 02/28/97 0.19 0.81 1.38 14.72
FNLB N 03/04/97 0.16 1.86 1.15 13.06
FOBT N 03/04/97 0.22 0.62 1.20 13.59
FPHN N 03/04/97 0.01 1.36 1.19 11.60
FRAF N 03/04/97 0.31 0.65 1.32 12.21
FRMS N 02/28/97 0.48 1.04 1.09 13.05
FSLB N 03/04/97 0.31 0.26 1.70 15.20
FWCC N 03/04/97 0.50 0.68 1.16 14.09
FWEH N 03/04/97 1.17 0.20 1.87 19.35
FXNC N 03/04/97 0.61 0.49 1.06 10.40
GABS N 02/28/97 0.35 0.23 1.05 9.60
GBFP N 03/04/97 0.87 0.35 1.23 16.38
GFLS N 03/04/97 1.61 0.31 0.74 9.53
GLBT N 05/22/96 0.89 0.27 0.86 12.91
GRBC N 03/04/97 1.13 0.37 0.69 12.24
GREXX N 02/28/97 NA 0.40 1.14 11.89
GRGN N 03/04/97 0.23 1.13 1.57 15.38
<PAGE>
ROAA ROACE
NPAs/ Core Before Before
Merger Current Assets EPS Extra Extra
Target? Pricing (%) ($) (%) (%)
Ticker (Y/N) Date MRQ MRQ MRQ MRQ
GRYB N 03/04/97 0.15 0.31 1.13 10.66
HABN N 03/04/97 3.41 0.25 0.75 9.97
HBKS N 03/04/97 NA 0.33 1.36 17.20
HBNC N 03/04/97 0.82 0.86 0.68 7.86
HBSI N 03/04/97 0.13 1.13 1.21 10.88
HEOP N 03/04/97 1.05 0.33 1.17 13.40
HOVB N 03/04/97 0.11 0.28 1.07 12.23
HRFD N 03/04/97 1.10 1.10 1.03 10.51
HTLF N 03/04/97 0.31 0.44 1.29 13.54
IBDB N 03/04/97 0.54 0.24 0.97 9.99
IBNC N 03/04/97 NA 1.18 1.43 16.56
IFNC N 03/04/97 0.28 1.22 0.60 7.31
IFST N 03/04/97 0.35 0.50 1.29 14.81
JFBC N 03/04/97 2.19 0.41 1.00 9.75
JUVF N 03/04/97 0.26 0.59 1.25 10.23
LAYB N 03/04/97 NA 0.48 0.96 11.27
LKFN N 03/04/97 0.35 0.53 1.02 17.63
LNBB N 03/04/97 0.18 0.37 1.44 14.38
LNBS N 02/28/97 0.19 0.47 1.42 14.44
MBKT N 03/04/97 0.57 0.88 2.00 16.74
MCBF N 03/04/97 0.06 0.31 0.99 12.81
MFRM N 03/04/97 0.19 0.71 1.30 11.81
MGNB N 03/04/97 0.57 0.48 1.50 14.91
MMBI N 03/04/97 0.28 0.31 (0.18) (1.83)
MOBP N 03/04/97 1.53 0.02 0.10 0.87
MPEN N 03/04/97 0.82 0.75 1.82 15.55
MSHN N 03/04/97 0.15 0.43 0.85 8.13
MTMB N 03/04/97 - 0.42 1.18 13.38
MTTB N 03/04/97 NA 0.15 0.59 7.30
NBOH N 03/04/97 0.06 0.50 1.33 9.37
NECA N 03/04/97 2.21 1.17 1.28 14.75
NKSH N 03/04/97 0.44 0.41 1.61 12.63
NOTW N 03/04/97 NA 0.63 1.41 12.65
NOVB N 03/04/97 0.68 0.51 1.61 17.58
ORRB N 03/04/97 0.04 0.58 1.46 14.52
PABK N 03/04/97 2.37 (0.01) (0.15) (1.13)
PABN N 12/13/96 0.80 0.50 1.35 12.06
PAHC N 03/04/97 1.76 0.31 1.25 14.02
PCHB N 03/04/97 1.21 0.36 1.06 11.86
PCLF N 03/04/97 0.45 1.52 2.02 14.84
PFCY N 03/04/97 0.73 0.33 0.98 7.62
PLBA N 03/04/97 0.91 0.33 1.24 15.25
PNBF N 03/04/97 3.38 0.44 2.09 22.11
PPBK N 03/04/97 0.84 0.30 1.74 11.33
PRFS N 03/04/97 0.18 0.25 1.23 12.62
PSBT N 03/04/97 0.37 1.98 1.06 10.50
PSEB N 03/04/97 1.26 0.34 0.84 10.88
PSHR N 02/28/97 0.25 0.66 1.24 11.53
PWOD N 03/04/97 0.39 1.03 2.70 21.39
QNBC N 03/04/97 2.04 0.47 0.95 12.24
RBNF N 03/04/97 NA 0.47 1.03 10.58
SBGA N 10/18/96 0.11 0.22 1.33 11.88
SBHC N 09/13/96 0.55 0.22 1.47 17.66
SBTL N 03/04/97 NA 2.15 2.02 18.64
SBVA N 03/04/97 0.66 0.26 1.02 9.45
<PAGE>
ROAA ROACE
NPAs/ Core Before Before
Merger Current Assets EPS Extra Extra
Target? Pricing (%) ($) (%) (%)
Ticker (Y/N) Date MRQ MRQ MRQ MRQ
SFBC N 03/04/97 1.88 0.27 1.03 15.54
SLFI N 03/04/97 0.16 0.38 1.33 14.72
SLNB N 03/04/97 2.30 0.46 0.97 10.25
SMAL N 03/04/97 1.40 0.75 1.57 11.99
SMTB N 03/04/97 4.12 1.20 1.18 15.99
SNBN N 03/04/97 NA 0.25 0.32 4.11
SOJB N 02/28/97 1.32 1.38 1.60 17.65
SOMC N 03/04/97 0.34 0.78 1.44 13.74
SOVY N 03/04/97 1.09 0.57 1.50 17.07
SRCK N 03/04/97 0.70 0.50 1.54 14.27
SRTB N 03/04/97 1.27 0.26 1.11 10.73
STYB N 03/04/97 0.54 0.59 1.72 13.44
SXSX N 03/04/97 1.54 0.22 0.58 7.32
TBLC N 02/28/97 0.38 0.32 1.52 18.41
TOBC N 03/04/97 NA 0.61 1.47 12.44
TRIXX N 02/28/97 0.18 0.70 1.64 14.75
UBFO N 03/04/97 4.26 0.52 2.17 19.51
UNBO N 03/04/97 0.20 0.33 1.10 12.36
UPBN N 03/04/97 1.35 0.72 0.32 3.79
USBH N 03/04/97 1.15 0.33 1.11 16.97
USBI N 02/28/97 0.36 0.49 1.82 16.40
UVSP N 03/04/97 0.52 0.80 1.37 12.95
VADO N 03/04/97 2.36 0.42 1.07 13.31
VCBA N 03/04/97 0.07 0.35 1.11 13.41
VRBA N 03/04/97 0.01 0.25 2.15 18.32
VTGB N 03/04/97 NA 0.53 1.42 14.81
WIBW N 03/04/97 1.12 0.61 1.37 15.06
WMFR N 03/04/97 NA 0.32 1.95 6.40
WNNB N 12/31/96 - 0.35 1.56 13.10
YAVY N 03/04/97 0.08 0.34 1.67 17.21
YOBK N 03/04/97 0.41 0.21 0.86 8.80
Maximum 9.04 64.24 2.70 28.62
Minimum - (0.09) (1.89) (23.52)
Average 1.02 1.25 1.24 12.74
Median 0.53 0.47 1.24 12.94
<PAGE>
Exhibit VIII.2 - Illinois Pink Sheet Banks
<TABLE>
<CAPTION>
Current Current
Stock Market
Price Value
Ticker Short Name City State Region Exchange IPO Date ($) ($M)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FBSYA First Busey Corporation Urbana IL MW OTC Bul NA 23.250 133.03
FBTT First Bankers Trustshares, Inc Quincy IL MW OTC Bul NA 33.250 10.53
FIVR First Evergreen Corporation Evergreen Park IL MW OTC Bul NA 425.000 170.85
FMBH First Mid-Illinois Bcshs, Inc. Mattoon IL MW OTC Bul NA 40.000 37.40
FNLB First National Bancorp, Inc. Joliet IL MW OTC Bul NA 97.250 118.25
GRBC GreatBanc, Incorporated Aurora IL MW Pink Sh NA 12.188 18.98
UPBN Upbancorp, Incorporated Chicago IL MW OTC Bul NA 71.000 15.67
Maximum 425.000 170.85
Minimum 12.188 10.53
Average 100.277 72.10
Median 40.000 37.40
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Price/ Price/ Tangible ROAA ROACE
Current Current Current Core Core Total Equity/ Equity/ Core Before Before
Price/ Price/ T Dividend EPS EPS Assets Assets T Assets EPS Extra Extra
Book V Book V Yield (x) (x) ($000) (%) (%) ($) (%) (%)
Ticker (%) (%) (%) MRQ LTM MRQ MRQ MRQ LTM LTM LTM
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
FBSYA 216.9 NA 2.93 17.4 17.3 864,918 8.5 NA 1.33 1.09 13.18
FBTT 106.0 118.2 1.56 4.8 5.2 178,644 6.1 5.6 5.31 1.07 18.40
FIVR 94.2 96.6 3.53 8.3 8.8 1,861,7568 9.7 9.5 48.10 1.09 11.75
FMBH 105.7 126.0 1.90 7.3 8.6 523,569 7.4 6.3 4.32 0.82 10.62
FNLB 170.0 201.1 3.09 11.9 14.1 809,786 8.6 7.4 6.30 1.03 11.61
GRBC 101.2 101.2 4.60 8.3 10.4 434,778 6.0 6.0 1.18 0.72 12.32
UPBN 86.1 87.5 2.82 22.4 16.3 215,900 8.4 8.3 3.96 0.43 4.91
Maximum 216.9 201.1 4.60 22.4 17.3 1,861,756 9.7 9.5 48.10 1.09 18.40
Minimum 86.1 87.5 1.56 4.8 5.2 178,644 6.0 5.6 1.18 0.43 4.91
Average 125.7 121.8 2.92 11.5 11.5 698,479 7.8 7.2 10.07 0.89 11.83
Median 105.7 109.7 2.93 8.3 10.4 523,569 8.4 6.9 4.32 1.03 11.75
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ROAA ROACE
NPAs/ Core Before Before
Merger Current Assets EPS Extra Extra
Target? Pricing (%) ($) (%) (%)
Ticker (Y/N) Date MRQ MRQ MRQ MRQ
<S> <C> <C> <C> <C> <C> <C>
FBSYA N 03/04/97 NA 0.33 1.11 13.49
FBTT N 03/04/97 0.15 1.46 1.11 18.99
FIVR N 03/04/97 0.09 12.77 1.09 11.40
FMBH N 03/04/97 0.23 1.26 0.54 6.24
FNLB N 03/04/97 0.16 1.86 1.15 13.06
GRBC N 03/04/97 1.13 0.37 0.69 12.24
UPBN N 03/04/97 1.35 0.72 0.32 3.79
Maximum 1.35 12.77 1.15 18.99
Minimum 0.09 0.33 0.32 3.79
Average 0.52 2.68 0.86 11.32
Median 0.20 1.26 1.09 12.24
</TABLE>
<PAGE>
EXHIBIT IX - Other Thrifts Converting
to Stock and Commercial Banks
<TABLE>
<CAPTION>
Heartland First Community
Bancshares, Southern Financial
Incorporated Bancshares Corp.
Herrin, Florence, Olney,
Illinois Alabama Illinois Average
------------------- -------------------- -------------------- ---------------------
<S> <C> <C> <C> <C>
Stock conversion date 6/28/96 4/13/95 6/29/95
Conversion assets $ 61,309,000 $ 148,968,000 $ 164,633,000 $ 124,970,000
Conversion pricing ratios:
Price to book 70.8% 68.7% 76.4% 72.0%
Price to earnings 21.3 14.6 10.3 15.4
Price to assets 12.8% 12.1% 13.8% 12.9%
Stock issue:
Shares issued 876,875 2,049,875 2,645,000 1,857,250
Price per share $ 10.00 $ 10.00 $ 10.00 $ 10.00
Gross proceeds $ 8,768,750 $ 20,499,000 $ 26,450,000 $ 18,572,583
Price March 10, 1997 (1) $ 15.25 $ 13.50 $ 14.75 $ 14.50
Price appreciation:
One day 0.00% 30.00% 15.00% 15.0%
One week 3.75% 30.00% 16.25% 16.7%
One month 1.25% 25.00% 12.50% 12.9%
To date (2) 52.50% 89.00% 47.50% 63.0%
Current pricing ratios:
Price to book 106.4% 119.2% 114.9% 113.5%
Price to earnings NM 11.5 13.4 12.5
Non-real estate loans/loans 3.7% 17.2% 53.0% 24.6%
Loans/assets 57.2% 78.3% 67.6% 67.7%
<FN>
(1) Heartland's price is March 7, 1997.
(2) To date increase in value takes into
consideration $5.40 in return of capital
dividends for First Southern.
</FN>
</TABLE>
EXHIBIT 99.2
PROXY STATEMENT AND FORM OF PROXY TO BE
FURNISHED TO THE ASSOCIATION'S
ACCOUNT HOLDERS
<PAGE>
FORM OF PROXY
REVOCABLE PROXY
FIRST ROBINSON SAVINGS AND LOAN, F.A.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF FIRST
ROBINSON SAVINGS AND LOAN, F.A.
The undersigned member of First Robinson Savings and Loan, F.A. (the
"Association") hereby appoints the Board of Directors of the Association as
proxies to cast all votes which the undersigned member is entitled to cast at a
Special Meeting of Members to be held at the main office of the Association,
located at 501 East Main Street, Robinson, Illinois, at the hour and date stated
in the Proxy Statement, and at any and all adjournments and postponements
thereof, and to act with respect to all votes that the undersigned would be
entitled to cast, if then personally present, in accordance with the
instructions on the reverse side hereof:
to vote FOR or AGAINST the adoption of the Plan of Conversion providing
for the conversion of the Association from a federally chartered mutual savings
association to a federally chartered stock savings association as a wholly owned
subsidiary of First Robinson Financial Corporation, a newly organized Delaware
corporation formed by the Association for the purpose of becoming the holding
company for the Association, the subsequent conversion of the Association to a
national bank under the name First Robinson Savings Bank, National Association"
and the related transactions provided for in such Plan of Conversion, including
the adoption of an amended Federal Stock Charter and Bylaws for the Association
and the adoption of the Articles of Association and Bylaws for First Robinson
Savings Bank, National Association, pursuant to the laws of the United States
and the Rules and Regulations administered by the Office of Thrift Supervision
and the Office of the Comptroller of the Currency.
This proxy will be voted as directed by the undersigned member. UNLESS
CONTRARY DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR ADOPTION OF THE PLAN
OF CONVERSION. In addition, this proxy will be voted at the discretion of the
Board of Directors upon any other matter as may properly come before the Special
Meeting.
The undersigned member may revoke this proxy at any time before it is
voted by delivering to the Secretary of the Association either by a written
revocation of the proxy or a duly executed proxy bearing a later date, or by
appearing at the Special Meeting and voting in person. The undersigned member
hereby acknowledges receipt of the Notice of Special Meeting and Proxy
Statement.
(IMPORTANT: PLEASE VOTE, DATE AND SIGN ON REVERSE SIDE)
<PAGE>
FIRST ROBINSON SAVINGS AND LOAN, F.A.
Please Mark Votes Below
Approval of the Plan of Conversion
___ ___
FOR |___| AGAINST |___|
DATE ___________________, 1997
X______________________
X______________________
IMPORTANT: Please sign
your name exactly as it
appears on this proxy.
Joint accounts need
only one signature.
When signing as an
attorney,
administrator, agent,
corporation, officer,
executor, trustee or
guardian, etc., please
add your full title to
your signature.
NOTE: IF YOU RECEIVE MORE THAN ONE PROXY CARD, PLEASE SIGN AND
RETURN ALL CARDS IN THE ACCOMPANYING ENVELOPE.
<PAGE>
FIRST ROBINSON SAVINGS AND LOAN, F.A.
501 East Main Street
Robinson, Illinois 62454
(618) 544-8621
____________________________________
NOTICE OF SPECIAL MEETING OF MEMBERS
____________________________________
Notice is hereby given that a Special Meeting of Members (the
"Special Meeting") of First Robinson Savings and Loan, F.A. (the "Association"),
will be held at the main office of the Association located at 501 East Main
Street, Robinson, Illinois 62454 on ________, 1997 at _:__ _.m., Robinson,
Illinois time. The purpose of this Special Meeting is to consider and vote upon:
A Plan of Conversion providing for the conversion of the association
from a federally chartered mutual savings association to a federally
chartered stock savings association as a wholly-owned subsidiary of
First Robinson Financial Corporation, a newly organized Delaware
corporation formed by the Association for the purpose of becoming the
holding company for the Association, the subsequent conversion of the
Association to a national bank under the name "First Robinson Savings
Bank, National Association" and the related transactions provided for
in such Plan, including the adoption of an amended Federal Stock
Charter and Bylaws for the Association and the adoption of the Articles
of Association and Bylaws for First Robinson Savings Bank, National
Association, pursuant to the laws of the United States and the Rules
and Regulations administered by the Office of Thrift Supervision and
the Office of the Comptroller of the Currency; and
such other business as may properly come before the Special Meeting or any
adjournment thereof. Management is not aware of any such other business.
The members who shall be entitled to notice of and to vote at the
Special Meeting and any adjournment thereof are depositors and certain borrowers
of the Association at the close of business on _________, 1997 who continue to
be members as of the date of the Special Meeting. In the event there are not
sufficient votes for approval of the Plan of Conversion at the time of the
Special Meeting, the Special Meeting may be adjourned from time to time in order
to permit further solicitation of proxies.
BY ORDER OF THE BOARD OF DIRECTORS
Rick L. Catt
Director, President and
Chief Executive Officer
Robinson, Illinois
_________, 1997
________________________________________________________________________________
YOUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE
FOR APPROVAL OF THE PLAN OF CONVERSION BY COMPLETING THE
ENCLOSED PROXY CARD AND RETURNING IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE AS SOON AS POSSIBLE.
YOUR VOTE IS VERY IMPORTANT.
________________________________________________________________________________
<PAGE>
SUMMARY OF PROPOSED CONVERSION
This summary does not purport to be complete and is qualified in its
entirety by the more detailed information contained in the remainder of this
Proxy Statement and the accompanying Prospectus.
Under its present "mutual" form of organization, the Association has no
stockholders. Its deposit account holders and certain borrowers are members of
the Association and have voting rights in that capacity. In the unlikely event
of liquidation, the Association's deposit account holders would have the sole
right to receive any assets of the Association remaining after payment of its
liabilities (including the claims of all deposit account holders to the
withdrawal value of their deposits). Under the Plan of Conversion (the "Plan of
Conversion") to be voted on at the Special Meeting, the Association would be
converted into a federally chartered savings association organized in stock form
(the "Converted Association"), and all of the Association's common stock would
be sold concurrently to the Holding Company (the "Stock Conversion").
Subsequently, the Association will convert from a federally chartered stock
savings association to a national bank (the "Bank Conversion") under the name
"First Robinson Savings Bank, National Association." The Holding Company will
offer and sell its common stock (the "Common Stock") in an offering (1) to
depositors with an account balance of $50 or more on October 31, 1995 ("Eligible
Account Holders"), (2) tax-qualified employee plans of the Association and the
Holding Company ("Tax-Qualified Employee Plans"), (3) depositors of the
Association with an account balance of $50 or more as of March 31, 1997
("Supplemental Eligible Account Holders"), (4) members of the Association as of
________, 1997, other then Eligible or Supplemental Eligible Account Holders and
certain borrowers as of both March 20, 1990 and ________, 1997 ("Other Members")
and (5) directors, officers and employees of the Association on a priority basis
(the "Subscription Offering"). Notwithstanding the foregoing, to the extent
orders for shares exceed the maximum of the appraisal range, Tax-Qualified
Employee Plans shall be afforded a first priority to purchase shares sold above
the maximum of the appraisal range. It is anticipated that Tax-Qualified
Employee Plans will purchase 8% of the Common Stock sold in the Stock
Conversion.
Following with the Subscription Offering, to the extent the Common
Stock is not all sold to the persons in the foregoing categories, the Holding
Company will offer Common Stock to members of the general public ("Other
Subscribers") to whom a prospectus (the "Prospectus") has been delivered ("the
Community Offering"). The Subscription Offering and the Community Offering are
referred to collectively as the "Subscription and Community Offering." Voting
and liquidation rights with respect to the Association would thereafter be held
by the Holding Company, except to the limited extent of the liquidation account
(the "Liquidation Account") that will be established for the benefit of Eligible
and Supplemental Eligible Account Holders of the Association and voting and
liquidation rights in the Holding Company would be held only by those persons
who become stockholders of the Holding Company through purchase of shares of its
Common Stock. See "Description of the Plan of Conversion - Principal Effects of
Conversion - Liquidation Rights of Depositor Members."
THE CONVERSION WILL NOT AFFECT THE BALANCE, INTEREST RATE OR FEDERAL
INSURANCE PROTECTION OF ANY SAVINGS DEPOSIT, AND NO PERSON WILL BE OBLIGATED TO
PURCHASE ANY STOCK IN THE STOCK CONVERSION.
Business Purposes The net proceeds from the sale of Common Stock in the Stock
for Conversion Conversion will substantially increase the Association's
capital, which will increase the amount of funds available
for lending and investment, and support current operations
and the continued growth of the Association's business. The
holding company structure will provide greater flexibility
than the Association alone would have for diversification of
business activities and geographic operations. Management
believes that this increased capital and operating
flexibility will enable the Association to compete more
effectively with other savings institutions and other types
of financial service organizations. Management also
believes that the Conversion will enhance the future
access of the Holding Company and the Converted Association
and the National Bank to the capital markets.
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The Bank Conversion shall be deemed to occur and shall be
effective upon completion of all actions necessary or
appropriate under applicable federal statutes and
regulations and the policies of the Office of the
Comptroller of the Currency ("OCC") and the Office of Thrift
Supervision ("OTS") to complete the conversion of the
Converted Association to a national bank, including without
limitation the approval of the Bank Conversion by the
Holding Company, as the sole stockholder of the Converted
Association, and the Converted Association will thereby be
and become the National Bank. The Bank Conversion shall be
consummated as soon as practicable following the
consummation of the Stock Conversion.
Subscription and As part of the Stock Conversion, Common Stock is being
Community Offering offered for sale in the Subscription Offering, in the
priorities summarized below, to the Association's (1)
Eligible Account Holders, (2) Tax-Qualified Employee Plans,
(3) Supplemental Eligible Account Holders (4) Other Members,
and (5) employees, officers and directors. In addition, in
the Community Offering, Other Subscribers may purchase
Common Stock to the extent shares are available after
satisfaction of subscriptions in the Subscription Offering.
Subscription Each Eligible Account Holder has been given non-transferable
Rights of Eligible rights to subscribe for the greater of $65,000 of Common
Account Holders Stock, one-tenth of one percent of the total number of
shares offered in the Subscription and Community Offering or
15 times the product (rounded down to the whole next number)
obtained by multiplying the total number of shares to be
issued by a fraction of which the numerator is the amount of
qualifying deposits of such subscriber and the denominator
is the total qualifying deposits of all account holders in
this category on the qualifying date.
Subscription The Association's Tax-Qualified Employee Plans have been
Rights of Tax- given non-transferable rights to subscribe, individually and
Qualified in the aggregate, for up to 10% of the total number of
Employee shares sold in the Stock Conversion after satisfaction of
Plan subscriptions of Eligible Account Holders. Notwithstanding
the foregoing, to the extent orders for shares exceed the
maximum of the appraisal range, Tax-Qualified Employee Plans
shall be afforded a first priority to purchase shares sold
above the maximum of the appraisal range. It is anticipated
that Tax-Qualified Employee Plans will purchase 8% of the
Common Stock sold in the Stock Conversion.
Subscription Rights After satisfaction of subscriptions of Eligible Account
of Supplemental Holders and Tax-Qualified Employee Plans, each Supplemental
Eligible Account Eligible Account Holder (other than directors and officers
Holders of the Association) has been given non-transferable rights
to subscribe for the greater of $65,000 of Common Stock,
one-tenth of one percent of the total number of shares
offered in the Stock Conversion or 15 times the product
(rounded down to the whole next number) obtained by
multiplying the total number of shares to be issued by a
fraction of which the numerator is the amount of qualifying
deposits of such subscriber and the denominator is the total
qualifying deposits of all account holders in this category
on the qualifying date. The subscription rights of each
Supplemental Eligible Account Holder shall be reduced to the
extent of such person's subscription rights as an Eligible
Account Holder.
Subscription Each Other Member has been given non-transferable rights to
Rights of Other subscribe for up to $65,000 of Common Stock or one-tenth of
Members one percent of the total number of shares offered in the
Stock Conversion after satisfaction of the subscriptions of
the Association's Eligible Account Holders, Tax-Qualified
Employee Plans and Supplemental Eligible Account Holders.
Subscription Each individual employee, officer and director of the
Rights of Association has been given the right to subscribe for up to
Association $65,000 of Common Stock after satisfaction of the
Personnel subscriptions of Eligible Account Holders, Tax-Qualified
Employee Plans, Supplemental Eligible Account Holders and
Other Members. Total shares subscribed for by the employees,
officers and
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directors in this category may not exceed 25% of the total
shares offered in the Conversion.
Purchase No person, together with associates, and persons acting in
Limitations concert, may purchase more than $100,000 of Common Stock
offered in the Stock Conversion based on the Estimated
Valuation Range (as calculated without giving effect to any
increase in such range subsequent to the date hereof). The
aggregate purchases of directors and executive officers and
their associates may not exceed 34% of the total number of
shares offered in the Stock Conversion. These purchase
limitations do not apply to the Association's Tax-Qualified
Employee Plans.
Expiration Date of All subscriptions for Common Stock must be received by _:__
Subscription and _.m., Robinson, Illinois time on ________, 1997.
Community
Offerings
How to Subscribe For information on how to subscribe for Common Stock being
for Shares offered in the Stock Conversion, please read the Prospectus
and the stock order form and instructions accompanying this
Proxy Statement. Subscriptions will not become effective
until the Plan of Conversion has been approved by the
Association's members and all of the Common Stock offered in
the Stock Conversion has been subscribed for or sold in the
Subscription and Community Offering or through such other
means as may be approved by the OTS.
Price of Common All sales of Common Stock in the Subscription and Community
Stock Offering will be made at the same price per share which is
currently expected to be $10.00 per share on the basis of an
independent appraisal of the pro forma market value of the
Association and the Holding Company upon Conversion. On the
basis of a preliminary appraisal by Ferguson & Company, LLP
which has been reviewed by the OTS, a minimum of 552,500 and
a maximum of 747,500 shares will be offered in the Stock
Conversion. See "The Conversion - Stock Pricing and Number
of Shares to be Issued" in the Prospectus.
Tax Consequences The Association has received an opinion from its special
counsel, Silver, Freedman & Taff, L.L.P., stating that the
Stock Conversion is a nontaxable reorganization under
Section 368(a)(1)(F) of the Internal Revenue Code. The
Association has also received an opinion from Larsson,
Woodyard & Henson, LLP stating that the Stock Conversion
will not be a taxable transaction for Illinois income tax
purposes.
Required Vote Approval of the Plan of Conversion will require the
affirmative vote of a majority of all votes eligible to be
cast at the Special Meeting.
YOUR BOARD OF DIRECTORS URGES YOU TO VOTE FOR
THE PLAN OF CONVERSION
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FIRST ROBINSON SAVINGS AND LOAN, F.A.
PROXY STATEMENT
SPECIAL MEETING OF MEMBERS TO BE HELD ON ________, 1997
PURPOSE OF MEETING
This Proxy Statement is being furnished to you in connection with the
solicitation on behalf of the Board of Directors of First Robinson Savings and
Loan, F.A. (the "Association") of the proxies to be voted at the Special Meeting
of Members (the "Special Meeting") of the Association to be held at the
Association's main office located at 501 East Main Street, Robinson, Illinois,
on ________, 1997 at _:__ _.m. Robinson, Illinois time, and at any adjournments
thereof. The Special Meeting is being held for the purpose of considering and
voting upon a Plan of Conversion under which the Association would be converted
from its present mutual form of organization into a federally chartered savings
association organized in stock form (the "Converted Association"), the
concurrent sale of all the common stock of the stock savings association to
First Robinson Financial Corporation (the "Holding Company"), a Delaware
corporation, the sale by the Holding Company of shares of its common stock (the
"Common Stock"), and the subsequent conversion of the association to a national
bank under the name "First Robinson Savings Bank, National Association" (the
"National Bank") and such other business as may properly come before the meeting
and any adjournment thereof.
RECOMMENDATION OF THE BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF THE ASSOCIATION UNANIMOUSLY RECOMMENDS THAT
YOU VOTE TO APPROVE THE PLAN OF CONVERSION.
The Association is currently organized in "mutual" rather than "stock"
form, meaning that it has no stockholders and no authority under its federal
mutual charter to issue capital stock. The Association's Board of Directors has
adopted the Plan of Conversion providing for the Conversion. The sale of Common
Stock of the Holding Company, which was recently formed to become the holding
company of the Association, will substantially increase the Association's net
worth. The Holding Company will exchange approximately 50% of the net proceeds
from the sale of the Common Stock for the common stock of the Association to be
issued upon Stock Conversion. The Holding Company expects to retain the balance
of the net proceeds, as its initial capitalization of which the Holding Company
intends to lend funds to the ESOP to fund its purchase of Common Stock. The net
proceeds from the sale of Common Stock in the Stock Conversion will
substantially increase the Association's capital, which will increase the amount
of funds available for lending and investment, and support current operations
and the continued growth of the Association's business. The holding company
structure will provide greater flexibility than the Association alone would have
for diversification of business activities and geographic operations. Management
believes that this increased capital and operating flexibility will enable the
Association to compete more effectively with other savings institutions and
other types of financial service organizations. The Board of Directors of the
Association also believes that the Conversion and the use of a holding company
structure will enhance the Converted Association's and the National Bank's
ability to expand through possible mergers and acquisitions (although no such
transactions are contemplated at this time) and will facilitate its future
access to the capital markets.
The Board of Directors of the Association believes that the Stock
Conversion will further benefit the Association by enabling it to attract and
retain key personnel through prudent use of stock-related incentive compensation
and benefit plans.
Voting in favor of the Plan of Conversion will not obligate any person
to purchase any Common Stock.
THE OFFICE OF THRIFT SUPERVISION ("OTS") HAS APPROVED THE PLAN OF
CONVERSION SUBJECT TO THE APPROVAL OF THE ASSOCIATION'S MEMBERS AND THE
SATISFACTION OF CERTAIN OTHER CONDITIONS. HOWEVER, SUCH APPROVAL DOES NOT
CONSTITUTE A RECOMMENDATION OR ENDORSEMENT OF THE PLAN OF CONVERSION BY THE OTS.
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FIRST ROBINSON SAVINGS AND LOAN, F.A.
The Association is a federally chartered mutual savings and loan
association headquartered in Robinson, Illinois. Its deposits are insured up to
the maximum allowable amount by the SAIF of the FDIC. The Association serves
primarily Crawford County, Illinois. At December 31, 1997, the Association had
total assets of $67.5 million, deposits of $59.6 million and equity capital of
$4.7 million.
The Association has been, and intends to continue to be, a
locally-owned community-oriented financial institution offering selected
financial services to meet the needs of the communities it serves. The
Association attracts deposits from the general public and uses such deposits,
together with other funds, to originate primarily one- to four-family
residential mortgage loans. The Association also originates consumer loans,
commercial business and commercial real estate loans, and multi-family and
construction loans.
FIRST ROBINSON FINANCIAL CORPORATION
First Robinson Financial Corporation was incorporated under the laws of
the State of Delaware in March 1997 at the direction of the Board of Directors
of the Association for the purpose of serving as a savings and loan holding
company of the Converted Association upon the acquisition of all of the capital
stock issued by the Converted Association in the Stock Conversion, and then as a
bank holding company of the National Bank following the Bank Conversion. The
Holding Company has received approval from the OTS to acquire control of the
Converted Association, subject to satisfaction of certain conditions. The
Holding Company has applied to the FRB for approval to retain control of the
National Bank following the Bank Conversion. Such approval has not been obtained
as of the date of this Prospectus, and there can be no assurance that such
approval will be obtained. See "Risk Factors -- Potential Delay in Completion or
Denial of Bank Conversion." Prior to the Conversion, the Holding Company has not
engaged and will not engage in any material operations. Upon consummation of the
Conversion, the Holding Company will have no significant assets other than the
outstanding capital stock of the Converted Association (and the National Bank
following the Bank Conversion), approximately 50% of the net proceeds from the
Stock Conversion (less the amount to fund the ESOP) and a note evidencing its
loan to fund the employee stock ownership plan. Upon consummation of the
Conversion, the Holding Company's principal business will be overseeing the
business of the National Bank and investing the portion of the net Stock
Conversion proceeds retained by it, and, assuming the requisite Federal Reserve
Board ("FRB") approval is obtained, the Holding Company will register with the
FRB as a bank holding company under the Bank Holding Company Act.
The holding company structure will permit the Holding Company to expand
the financial services currently offered through the Association, although there
are no definitive plans or arrangements for such expansion at present. The
holding company structure will also provide the Association with enhanced
operational flexibility and provide the ability to diversify its business
opportunities through acquiring other financial institutions, thereby enhancing
its financial resources in order to compete more effectively with other
financial service organizations. At the present time, however, the Holding
Company does not have any plans, agreements, arrangement or understandings with
respect to any such acquisitions. After the Stock Conversion, the Holding
Company will be classified as a unitary savings and loan holding company and
will be subject to regulation by the OTS. After the Bank Conversion, the Holding
Company will be classified as a bank holding company and will be subject to
regulation by the FRB.
The executive office of the Holding Company is located at 501 East Main
Street, Robinson, Illinois 62454. Its telephone number at that address is (618)
544-8621.
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FIRST ROBINSON SAVINGS BANK, NATIONAL ASSOCIATION
Upon consummation of the Bank Conversion, the National Bank will
succeed to all of the assets and liabilities of the Converted Association
(which, pursuant to the Stock Conversion will have succeeded to all of the
assets and liabilities of the Association), and will continue to conduct
business in substantially the same manner as the Association prior to the
Conversion.
The deposits of the National Bank will continue to be insured by the
SAIF of the FDIC, and, as such, the National Bank will continue to be subject to
regulation and supervision by the FDIC. The National Bank will not be subject to
OTS regulation and supervision; rather, the primary regulator of the National
Bank will be the OCC. The National Bank will remain a member of the FHLB of
Chicago. As a national bank, the National Bank will also be required to become a
member of the Federal Reserve System.
INFORMATION RELATING TO VOTING AT THE SPECIAL MEETING
The Board of Directors of the Association has fixed _________, 1997 as
the voting record date ("Voting Record Date") for the determination of members
entitled to notice of the Special Meeting. All Association depositors and
certain borrowers are members of the Association under its current charter. All
Association members of record as of the close of business on the Voting Record
Date and borrowers as of both March 20, 1990 and the Voting Record Date who
continue to be members as of the date of the Special Meeting will be entitled to
vote at the Special Meeting or any adjournment thereof.
Each depositor (including IRA and Keogh account beneficiaries) will be
entitled at the Special Meeting to cast one vote for each $100, or fraction
thereof, of the aggregate withdrawal value of all of such depositor's accounts
in the Association as of the Voting Record Date, up to a maximum of 1,000 votes.
In general, accounts held in different ownership capacities will be treated as
separate memberships for purposes of applying the 1,000 vote limitation. For
example, if two persons hold a $100,000 account in their joint names and each of
the persons also holds a separate account for $100,000 in his own name, each
person would be entitled to 1,000 votes for each separate account and they would
together be entitled to cast 1,000 votes on the basis of the joint account.
Where no proxies are received from IRA and Keogh account beneficiaries, after
due notification, the Association, as trustee of these accounts, is entitled to
vote these accounts in favor of the Plan of Conversion.
Each borrower member of the Association as of both March 20, 1990 and
the Voting Record Date who continues to be a borrower as of the date of the
Special Meeting will be entitled to cast one vote as a borrower member, in
addition to any votes he or she may be entitled to cast as a depositor.
Approval of the Plan of Conversion requires the affirmative vote of a
majority of the total outstanding votes of the Association's members eligible to
be cast at the Special Meeting. As of ________, 1997, the Association had
approximately ___ members who were entitled to cast a total of approximately
______ votes at the Special Meeting.
Association members may vote at the Special Meeting or any adjournment
thereof in person or by proxy. Any member giving a proxy will have the right to
revoke the proxy at any time before it is voted by giving written notice to the
Secretary of the Association, provided that such written notice is received by
the Secretary prior to the Special Meeting or any adjournment thereof, or upon
request if the member is present and chooses to vote in person.
All properly executed proxies received by the Board of Directors of the
Association will be voted in accordance with the instructions indicated thereon
by the members giving such proxies. If no instructions are given, such proxies
will be voted in favor of the Plan of Conversion. If any other matters are
properly presented at the Special Meeting and may properly be voted on, the
proxies solicited hereby will be voted on such matters in
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accordance with the best judgment of the proxy holders named thereon. Management
is not aware of any other business to be presented at the Special Meeting.
If a proxy is not executed and is returned or the member does not vote
in person, the Association is prohibited by OTS regulations from using a
previously executed proxy to vote for the Conversion. As a result, failure to
vote may have the same effect as a vote against the Plan of Conversion.
To the extent necessary to permit approval of the Plan of Conversion,
proxies may be solicited by officers, directors or regular employees of the
Association, in person, by telephone or through other forms of communication
and, if necessary, the Special Meeting may be adjourned to a later date. Such
persons will be reimbursed by the Association for their expenses incurred in
connection with such solicitation. The Association will bear all costs of this
solicitation. The proxies solicited hereby will be used only at the Special
Meeting and at any adjournment thereof.
DESCRIPTION OF THE PLAN OF CONVERSION
The Plan of Conversion to be presented for approval at the Special
Meeting provides for the Conversion to be accomplished through adoption of
amended charter and bylaws for the Association to authorize the issuance of
capital stock along with the concurrent formation of a holding company, the
subsequent conversion of the Association to a national bank under the name
"First Robinson Savings Bank, National Association" and the related transactions
provided for in the Plan of Conversion, including the adoption of an amended
Federal Stock Charter and Bylaws for the Association and the adoption of
Articles of Association and Bylaws for First Robinson Savings Bank, National
Association. As part of the Conversion, the Plan of Conversion provides for the
subscription offering (the "Subscription Offering") of the Common Stock to the
Association's (i) Eligible Account Holders (deposit account holders with an
account balance of $50 or more as of October 31, 1995); (ii) Tax-Qualified
Employee Plans, (iii) Supplemental Eligible Account Holders (deposit account
holders with an account balance of $50 or more as of March 31, 1997); (iv) Other
Members (deposit account holders and borrowers eligible to vote at the Special
Meeting who are not Eligible Account Holders or Supplemental Eligible Account
Holders); and (v) the Association's employees, officers and directors.
Notwithstanding the foregoing, to the extent orders for shares exceed the
maximum of the appraisal range, Tax-Qualified Employee Plans shall be afforded a
first priority to purchase shares sold above the maximum of the appraisal range.
It is anticipated that Tax-Qualified Employee Plans will purchase 8% of the
Common Stock sold in the Stock Conversion. Following with the Subscription
Offering, members of the general public will be afforded the opportunity to
purchase the Common Stock not subscribed for in the Subscription Offering (the
"Community Offering" and when referred to with the Subscription Offering, the
"Subscription and Community Offering").
THE SUBSCRIPTION AND COMMUNITY OFFERING HAVE COMMENCED AS OF THE DATE
OF MAILING OF THIS PROXY STATEMENT. A PROSPECTUS EXPLAINING THE TERMS OF THE
SUBSCRIPTION AND COMMUNITY OFFERING, INCLUDING HOW TO ORDER AND PAY FOR SHARES
AND DESCRIBING THE BUSINESS OF THE ASSOCIATION AND THE HOLDING COMPANY;
ACCOMPANIES THIS PROXY STATEMENT AND SHOULD BE READ BY ALL PERSONS WHO WISH TO
CONSIDER SUBSCRIBING FOR COMMON STOCK. THE SUBSCRIPTION AND COMMUNITY OFFERING
EXPIRES AT _:__ _.M. ROBINSON, ILLINOIS TIME ON ________, 1997 UNLESS EXTENDED
BY THE ASSOCIATION AND THE HOLDING COMPANY.
The federal conversion regulations require that all stock offered in a
conversion must be sold in order for the conversion to become effective. The
conversion regulations require that the offering be completed within 45 days
after completion of the Subscription Offering period unless extended by the
Association and the Holding Company with the approval of the OTS. This 45-day
period expires ________, 1997 unless the Subscription Offering is extended. If
this is not possible, an occurrence that is currently not anticipated, the Board
of Directors of the Association and the Holding Company will consult with the
OTS to determine an appropriate alternative method of selling all unsubscribed
shares offered in the Stock Conversion. The Plan of Conversion provides that the
Stock Conversion must be completed within 24 months after the date of the
Special Meeting.
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The Subscription and Community Offering or any other sale of the
unsubscribed shares will be made as soon as practicable after the date of the
Special Meeting. No sales of shares may be completed, either in the Subscription
and Community Offering or otherwise, unless the Plan of Conversion is approved
by the members of the Association.
The commencement and completion of the Subscription and Community
Offering, however, is subject to market conditions and other factors beyond the
Association's control. Due to adverse conditions in the stock market in the
past, a number of converting thrift institutions encountered significant delays
in completing their stock offerings or were not able to complete them at all. No
assurance can be given as to the length of time after approval of the Plan of
Conversion at the Special Meeting that will be required to complete the
Subscription and Community Offering or other sale of the Common Stock to be
offered in the Conversion. If delays are experienced, significant changes may
occur in the estimated pro forma market value of the Holding Company's Common
Stock, together with corresponding changes in the offering price and the net
proceeds realized by the Association and the Holding Company from the sale of
the Common Stock. The Association and the Holding Company may also incur
substantial additional printing, legal, accounting and other expenses in
completing the Conversion.
The following is a brief summary of the Conversion and is qualified in
its entirety by reference to the Plan of Conversion, a complete copy of which is
attached. The Association's federal stock charter and bylaws that will become
effective upon completion of the Stock Conversion and a copy of the National
Bank's Articles of Association and Bylaws that will become effective upon
completion of the Bank Conversion are available from the Association upon
request. Additionally, a copy of the Holding Company's certificate of
incorporation and bylaws are available from the Association upon request.
Principal Effects of Conversion
Depositors. The Conversion will not change the amount, interest rate,
withdrawal rights or federal insurance protection of deposit accounts, or affect
deposit accounts in any way other than with respect to voting and liquidation
rights as discussed below.
Borrowers. The rights and obligations of borrowers under their loan
agreements with the Association will remain unchanged by the Conversion. The
principal amount, interest rate and maturity date of loans will remain as they
were contractually fixed prior to the Conversion.
Voting Rights of Members. Under the Association's current federal
mutual charter, depositors and certain borrowers have voting rights as members
of the Association with respect to the election of directors and certain other
affairs of the Association. After the Conversion, exclusive voting rights with
respect to all such matters will be vested in the Holding Company as the sole
stockholder of the Association and, following the Bank Conversion, the National
Bank. Depositors and borrowers will no longer have any voting rights, except to
the extent that they become stockholders of the Holding Company through the
purchase of its Common Stock. Voting rights in the Holding Company will be held
exclusively by its stockholders.
Liquidation Rights of Depositor Members. Currently, in the unlikely
event of liquidation of the Association, any assets remaining after satisfaction
of all creditors' claims in full (including the claims of all depositors to the
withdrawal value of their accounts) would be distributed pro rata among the
depositors of the Association, with the pro rata share of each being the same
proportion of all such remaining assets as the withdrawal value of each
depositor's account is of the total withdrawal value of all accounts in the
Association at the time of liquidation. After the Conversion, the assets of the
Association would first be applied, in the event of liquidation, against the
claims of all creditors (including the claims of all depositors to the
withdrawal value of their accounts). Any remaining assets would then be
distributed to the persons who qualified as Eligible Account Holders or
Supplemental Eligible Account Holders under the Plan of Conversion to the extent
of their interests in a "Liquidation Account" that will be established at the
time of the completion of the Conversion and then to the Holding Company as the
sole stockholder of the Association's outstanding common stock. The
Association's depositors who did not qualify as Eligible Account Holders or
Supplemental Eligible Account Holders would have no right to share in any
residual net worth of the Association in the event of liquidation after the
Conversion, but would continue to have the right as creditors of the Association
to receive the full withdrawal value of their deposits prior to any distribution
to the Holding Company as the Association's sole stockholder. In addition, the
Association's deposit accounts will continue to be insured by the Federal
Deposit Insurance Corporation ("FDIC") to the maximum extent permitted
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by law, currently up to $100,000 per insured account. The Liquidation Account
will initially be established in an amount equal to the net worth of the
Association as of the date of the Association's latest statement of financial
condition contained in the final prospectus used in connection with the
Conversion. Each Eligible Account Holder and/or Supplemental Eligible Account
Holder will receive an initial interest in the Liquidation Account in the same
proportion as the balance in all of his qualifying deposit accounts was of the
aggregate balance in all qualifying deposit accounts of all Eligible Account
Holders and Supplemental Eligible Account Holders on October 31, 1995 or March
31, 1997, respectively. For accounts in existence on both dates, separate
subaccounts shall be determined on the basis of the qualifying deposits in such
accounts on the record dates. However, if the amount in the qualifying deposit
account on any annual closing date of the Association is less than the lowest
amount in such deposit account on the Eligibility Record Date and/or
Supplemental Eligibility Record Date, and any subsequent annual closing date,
this interest in the Liquidation Account will be reduced by an amount
proportionate to such reduction in the related deposit account and will not
thereafter be increased despite any subsequent increase in the related deposit
account. The Bank Conversion shall not be deemed to be a complete liquidation of
the Converted Association for purposes of the distribution of the liquidation
account. Upon consummation of the Bank Conversion, the liquidation account, and
all rights and obligations of the Converted Association in connection therewith,
shall be assumed by the National Bank.
The Association. Under federal law, the stock savings association
resulting from the Stock Conversion will be deemed to be a continuation of the
mutual association rather than a new entity and will continue to have all of the
rights, privileges, properties, assets and liabilities of the Association prior
to the Stock Conversion. The Stock Conversion will enable the Association to
issue capital stock, but will not change the general objectives, purposes or
types of business currently conducted by the association, and no assets of the
Association will be distributed in order to effect the Conversion, other than to
pay the expenses incident thereto. After the Stock Conversion, the Association
will remain subject to examination and regulation by the OTS and will continue
to be a member of the Federal Home Loan Bank System. The Stock Conversion will
not cause any change in the executive officers or directors of the Association.
The National Bank. The National Bank will be deemed to be a
continuation of the Converted Association and will have all the rights,
privileges, properties, assets and liabilities of the Converted Association. The
Bank Conversion shall be deemed to occur and shall be effective upon completion
of all actions necessary or appropriate to complete the Bank Conversion. After
the Bank Conversion, the National Bank will be subject to examination and
regulation by the OCC and will become a member of the Federal Reserve System.
The National Bank intends to remain a member of the Federal Home Loan Bank
System. The Bank Conversion will not cause any change in the executive officers
or directors of the National Bank.
Federal and State Taxation
Savings associations such as the Association that meet certain
definitional tests relating to the composition of assets and other conditions
prescribed by the Internal Revenue Code of 1986, as amended (the "Code"), are
permitted to establish reserves for bad debts and to make annual additions
thereto which may, within specified formula limits, be taken as a deduction in
computing taxable income for federal income tax purposes. The amount of the bad
debt reserve deduction for "non-qualifying loans" is computed under the
experience method. The amount of the bad debt reserve deduction for "qualifying
real property loans" (generally loans secured by improved real estate) may be
computed under either the experience method or the percentage of taxable income
method (based on an annual election).
Under the experience method, the bad debt reserve deduction is an
amount determined under a formula based generally upon the bad debts actually
sustained by the savings association over a period of years.
Since 1987, the percentage of specially-computed taxable income that
was used to compute a savings association's bad debt reserve deduction under the
percentage of taxable income method (the "percentage bad debt deduction") was
8%. The percentage bad debt deduction thus computed was reduced by the amount
permitted as a deduction for non-qualifying loans under the experience method.
The availability of the percentage of taxable income method permitted qualifying
savings associations to be taxed at a lower effective federal income tax rate
than that applicable to corporations generally (approximately 31.3% assuming the
maximum percentage bad debt deduction). Under changes in federal tax law enacted
in August 1996, the percentage bad debt deduction has been
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eliminated for tax years beginning after December 31, 1995. Accordingly, this
method will not be available to the Association for its tax years ending October
31, 1996 and thereafter.
Under the percentage of taxable income method, the percentage bad debt
deduction could not exceed the amount necessary to increase the balance in the
reserve for qualifying real property loans to an amount equal to 6% of such
loans outstanding at the end of the taxable year or the greater of (i) the
amount deductible under the experience method or (ii) the amount which when
added to the bad debt deduction for non-qualifying loans equals the amount by
which 12% of the amount comprising savings accounts at year-end exceeds the sum
of surplus, undivided profits and reserves at the beginning of the year. Through
October 31, 1996, the 6% and 12% limitations did not restrict the percentage bad
debt deduction available to the Association.
The federal tax legislation enacted in August 1996 also imposes a
requirement to recapture into taxable income the portion of the qualifying and
non-qualifying loan reserves in excess of the "base-year" balances of such
reserves. For the Association, the base-year reserves are the balances as of
October 31, 1988. Recapture of the excess reserves will occur over a six-year
period which could begin for the Association as early as the tax year ending
October 31, 1996 (commencement of the recapture period may be delayed, however,
for up to two years provided the Association meets certain residential lending
requirements). This delay of the recapture is not available to the Association
if it converts to a national bank. The Association previously established, and
will continue to maintain, a deferred tax liability with respect to its federal
tax bad debt reserves in excess of the base-year balances; accordingly, the
legislative changes will have no effect on total income tax expense for
financial reporting purposes.
Also, under the August 1996 legislation, the Association's base-year
federal tax bad debt reserves are "frozen" and subject to current recapture only
in very limited circumstances. Generally, recapture of all or a portion of the
base-year reserves will be required if the Association pays a dividend in excess
of the greater of its current or accumulated earnings and profits, redeems any
of its stock, or is liquidated. The Association has not established a deferred
federal tax liability under SFAS No. 109 for its base-year federal tax bad debt
reserves, as it does not anticipate engaging in any of the transactions that
would cause such reserves to be recaptured.
In addition to the regular income tax, corporations, including savings
associations such as the Association, generally are subject to a minimum tax. An
alternative minimum tax is imposed at a minimum tax rate of 20% on alternative
minimum taxable income, which is the sum of a corporation's regular taxable
income (with certain adjustments) and tax preference items, less any available
exemption. The alternative minimum tax is imposed to the extent it exceeds the
corporation's regular income tax and net operating losses can offset no more
than 90% of alternative minimum taxable income. For taxable years beginning
after 1986 and before 1996, corporations, including savings associations such as
the Association, are also subject to an environmental tax equal to 0.12% of the
excess of alternative minimum taxable income for the taxable year (determined
without regard to net operating losses and the deduction for the environmental
tax) over $2 million.
The Association files federal income tax returns on a fiscal year basis
using the accrual method of accounting.
The Association has not been audited by the IRS recently with respect
to federal income tax returns. In the opinion of management, any examination of
still open returns would not result in a deficiency which could have a material
adverse effect on the financial condition of the Association.
Illinois Taxation. For Illinois income tax purposes, the Association is
taxed at an effective rate equal to 7.18% of Illinois taxable income. For these
purposes, "Illinois Taxable Income" generally means federal taxable income,
subject to certain adjustments (including the addition of interest income on
state and municipal obligations and the exclusion of interest income on United
States Treasury obligations). The exclusion of income on United States Treasury
obligations has had the effect of eliminating Illinois taxable income for the
Association.
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Approval, Interpretation, Amendment and Termination
Under the Plan of Conversion, the letter from the OTS giving approval
thereto, and applicable regulations, consummation of the Stock Conversion is
subject to the satisfaction of the following conditions: (a) approval of the
Plan of Conversion by members of the Association casting at least a majority of
the votes eligible to be cast at the Special Meeting; (b) sale of all of the
Common Stock to be offered in the Stock Conversion; and (c) receipt of favorable
rulings or opinions of counsel as to the federal and Illinois tax consequences
of the Stock Conversion. The Bank Conversion is subject to final OCC approval to
convert to a national bank.
The Plan of Conversion may be substantively amended by the Boards of
Directors of the Association and the Holding Company with the concurrence of the
OTS. If the Plan of Conversion is amended, proxies which have been received
prior to such amendment will not be resolicited unless otherwise required by the
OTS. Also, as required by the federal regulations, the Plan of Conversion
provides that the transactions contemplated thereby may be terminated by the
Board of Directors of the Association alone at any time prior to the Special
Meeting and may be terminated by the Board of Directors of the Association at
any time thereafter with the concurrence of the OTS, notwithstanding approval of
the Plan of Conversion by the members of the Association at the Special Meeting.
All interpretations by the Association and the Holding Company of the Plan of
Conversion and of the Order Forms and related materials for the Subscription and
Community Offering will be final, except as regards or affects the OTS.
Judicial Review
Section 5(i)(2)(B) of the Home Owners' Loan Act, as amended, 12 U.S.C.
ss.1464(i)(2)(B) and Section 563b.8(u) of the Rules and Regulations promulgated
thereunder (12 C.F.R. Section 563b.8(u)) provide: (i) that persons aggrieved by
a final action of the OTS which approves, with or without conditions, or
disapproves a plan of conversion, may obtain review of such final action only by
filing a written petition in the United States Court of Appeals for the circuit
in which the principal office or residence of such person is located, or in the
United States Court of Appeals for the District of Columbia, requesting that the
final action of the OTS be modified, terminated or set aside, and (ii) that such
petition must be filed within 30 days after publication of notice of such final
action in the Federal Register, or 30 days after the date of mailing of the
notice and proxy statement for the meeting of the converting institution's
members at which the conversion is to be voted on, whichever is later. The
notice of the Special Meeting of the Association's members to vote on the Plan
of Conversion described herein is included at the beginning of this Proxy
Statement. The statute and regulation referred to above should be consulted for
further information.
CHARTER AND BYLAWS
The following is a summary of certain provisions of the Charter and
Bylaws which will become effective upon the conversion of the Association into a
federally chartered stock savings association and the Articles of Association
and Bylaws which will become effective upon the conversion of the Conversion
Association into a national bank. Complete copies of the Charter and Bylaws of
the Converted Association and Articles of Association and Bylaws of the National
Bank are available upon request from the Association.
The Converted Association will be authorized to issue 2,500,000 shares
with a par value of $.01 per share and the National Bank will be authorized to
issue 2,000,000 shares of common stock with a par value of $1.00 per share.
Neither the Conversion Association's nor the National Bank's common stock will
be insured by the FDIC. All of the Converted Association's and, following the
Bank Conversion, the National Bank's outstanding common stock will be owned by
the Holding Company. Accordingly, exclusive voting rights with respect to the
affairs of the Association after the Conversion will be vested in the Board of
Directors of the Holding Company.
The Converted Association's Charter will provide that the number of
Directors shall be not fewer than five or more than 15, with the exact number to
be fixed in the Converted Association's Bylaws. The proposed Bylaws provide that
the number of the Converted Association's directors shall be six. Directors
generally will serve for terms of three years, and the terms of Directors will
be staggered so that approximately one-third of the Board is elected each year.
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The Articles of Association of the National Bank will provide that the
number of Directors shall not be fewer than five nor more than 25, with the
exact number to be fixed by resolution of the National Bank's Board of Directors
or by resolution of its stockholders (i.e., the Holding Company). Directors of
the National Bank will serve for terms of one year.
In addition to the common stock, the Converted Association will be
authorized to issue 500,000 shares of serial preferred stock, par value $.01 per
share. The Board of Directors will be permitted, without further stockholder
approval, to authorize the issuance of preferred stock in series and to fix the
voting powers, designations, preferences and relative, participating, optional,
conversion and other special rights of the shares of each series of the
preferred stock and the qualifications, limitations and restrictions thereof.
Preferred stock may rank prior to common stock in dividend rights, liquidation
preferences, or both, and may have voting rights.
The Articles of the Association of the National Bank do not provide
authorization for the issuance of preferred stock. In order for the National
Bank to issue preferred stock, an amendment to the Articles of Association that
sets forth the terms, rights and preferences of a class of preferred stock must
be proposed by the Board of Directors and approved by the OCC and by the Holding
Company as the sole stockholder of the National Bank.
Neither the Charter nor the Bylaws of the Converted Association provide
for indemnification of officers and directors. However, the Converted
Association will be required by OTS regulations (as the Association currently
is) to indemnify its directors, officers and employees against legal and other
expenses incurred in defending lawsuits brought against them by reasons of the
performance of their official duties. Indemnification may be made to any such
person only if final judgment on the merits is in his favor or, in case of (i)
settlement, (ii) final judgment against him or (iii) final judgment in his
favor, other than on the merits, if a majority of the directors of the Converted
Association determines that he was acting in good faith within the scope of his
employment or authority as he could reasonably have perceived it under the
circumstances and for a purpose he could have reasonably believed under the
circumstances was in the best interest of the Converted Association or its
stockholders. If a majority of the directors of the Converted Association
concludes that in connection with an action any person ultimately may become
entitled to indemnification, the Directors may authorize payment of reasonable
costs and expenses arising from defense or settlement of such action.
The National Bank's Articles of Association will provide for
indemnification of any individual who is or was a director, officer, employee or
agent of the National Bank in any proceeding in which the individual is made a
party as a result of his service in such capacity, if the individual acted in
good faith and in a manner he reasonably believed to be in, or not opposed to,
the best interests of the National Bank and, with respect to any criminal
proceeding, he had no reasonable cause to believe his conduct was unlawful,
unless such indemnification would be prohibited by law. Under the Articles of
Association, an individual may not be indemnified in connection with a
proceeding by or in the right of the National Bank in which the individual was
adjudged liable to the National Bank unless a court of competent jurisdiction
determines he is fairly and reasonably entitled to indemnification in view of
all the relevant circumstances.
ADDITIONAL INFORMATION
The information contained in the accompanying Prospectus, including a
more detailed description of the Plan of Conversion, consolidated financial
statements of the Association and a description of the capitalization and
business of the Association and the Holding Company, including the Association's
directors and executive officers and their compensation, the conversion of the
association to a national bank, the anticipated use of the net proceeds from the
sale of the Common Stock, and a description of the Common Stock, is intended to
help you evaluate the Conversion and is incorporated by this reference.
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YOUR VOTE IS VERY IMPORTANT TO US. PLEASE TAKE A MOMENT NOW TO COMPLETE
AND RETURN YOUR PROXY CARD IN THE POSTAGE-PAID ENVELOPE PROVIDED. YOU MAY STILL
ATTEND THE SPECIAL MEETING AND VOTE IN PERSON EVEN THOUGH YOU HAVE VOTED YOUR
PROXY. FAILURE TO SUBMIT A PROXY WILL HAVE THE SAME EFFECT AS VOTING AGAINST THE
CONVERSION.
If you have any questions, please call our Stock Sales Center at (618)
544-5800.
IMPORTANT: YOU MAY BE ENTITLED TO VOTE IN MORE THAN ONE CAPACITY.
PLEASE SIGN, DATE AND PROMPTLY RETURN EACH PROXY CARD YOU RECEIVE.
------------------------
THIS PROXY STATEMENT IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN
OFFER TO BUY STOCK. THE OFFER WILL BE MADE ONLY BY THE PROSPECTUS.
THIS SECURITY IS NOT A DEPOSIT OR ACCOUNT AND IS NOT FEDERALLY INSURED
OR GUARANTEED.
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FIRST ROBINSON SAVINGS & LOAN, F.A.
Robinson, Illinois
PLAN OF CONVERSION
From Mutual to Stock Form of Organization
and From a Savings Association to a National Bank
I. GENERAL
On November 12, 1996, the Board of Directors of the Association adopted
this Plan of Conversion whereby the Association will convert from a federal
mutual savings and loan association to a federal stock savings association and
then from a federal stock savings association to a national bank. The Plan
includes as part of the conversion, the concurrent formation of a holding
company, to be named in the future. The Plan provides that non-transferable
subscription rights to purchase Holding Company Conversion Stock will be offered
first to Eligible Account Holders of record as of the Eligibility Record Date,
then to the Association's Tax-Qualified Employee Plans, then to Supplemental
Eligible Account Holders of record as of the Supplemental Eligibility Record
Date, then to Other Members, and then to directors, officers and employees.
Concurrently with, at any time during, or promptly after the Subscription
Offering, and on a lowest priority basis, an opportunity to subscribe may also
be offered to the general public in a Direct Community Offering. The price of
the Holding Company Conversion Stock will be based upon an independent appraisal
of the Association and will reflect its estimated pro forma market value, as
converted. It is the desire of the Board of Directors of the Association to
attract new capital to the Association in order to increase its capital, support
future savings growth and accommodate or facilitate future growth opportunities.
The Converted Association is also expected to benefit from its management and
other personnel having a stock ownership in its business, since stock ownership
is viewed as an effective performance incentive and a means of attracting,
retaining and compensating management and other personnel. No change will be
made in the Board of Directors or management as a result of the Conversion.
The conversion of the Association to the Converted Association is
referred to herein as the "Stock Conversion," the conversion of the Converted
Association to the National Bank is referred to herein as the "Bank Conversion"
and the Stock Conversion and the Bank Conversion are referred to herein
collectively as the "Conversion."
II. DEFINITIONS
Acting in Concert: The term "acting in concert" shall have the same
meaning given it in ss.574.2(c) of the Rules and Regulations of the OTS.
Actual Subscription Price: The price per share, determined as provided
in Section VII of the Plan, at which Holding Company Conversion Stock will be
sold in the Subscription Offering.
Affiliate: An "affiliate" of, or a Person "affiliated" with, a
specified Person, is a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by or is under common control with,
the Person specified.
Associate: The term "associate," when used to indicate a relationship
with any Person, means (i) any corporation or organization (other than the
Holding Company, the Association or a majority-owned subsidiary of the Holding
Company) of which such Person is an officer or partner or is, directly or
indirectly, the beneficial owner of ten percent or more of any class of equity
securities, (ii) any trust or other estate in which such Person has a
substantial beneficial interest or as to which such Person serves as trustee or
in a similar fiduciary capacity, and (iii) any relative or spouse of such
Person, or any relative of such spouse, who has the same home as such Person or
who is a director or officer of the Holding Company or the Association or any
subsidiary of the Association; provided, however, that any Tax-Qualified or
Non-Tax-Qualified Employee Plan shall not be deemed to be an associate of any
director or officer of the Holding Company or the Association, to the extent
provided in Section VI hereof.
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Association: First Robinson Savings & Loan, F.A., or such other name as
the institution may adopt.
Bank Conversion: The conversion of the Converted Association from a
federally chartered stock savings association to a national bank ("National
Bank").
BIF: Bank Insurance Fund.
Capital Stock: Any and all authorized shares of stock of the Converted
Association after the Stock Conversion.
Conversion: Except as provided in Section III.F., the term "Conversion"
means the Stock Conversion and the Bank Conversion.
Converted Association: The federally chartered stock savings
institution resulting from the conversion of the Association in accordance with
the Plan.
Deposit Account: Any withdrawable or repurchasable account or deposit
in excess of $50 in the Association.
Direct Community Offering: The offering to the general public of any
unsubscribed shares which may be effected as provided in Section VI hereof.
Eligibility Record Date: The close of business on October 31, 1995.
Eligible Account Holder: Any Person holding a Qualifying Deposit in the
Association on the Eligibility Record Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
FRB: The Board of Governors of the Federal Reserve System.
Holding Company: A corporation which upon completion of the Stock
Conversion will own all of the outstanding common stock of the Converted
Association, the name of which will be selected in the future, through the
issuance and sale of the Holding Company Conversion Stock under the Plan and the
concurrent acquisition of 100% of the Capital Stock to be issued and sold
pursuant to the Plan in connection with the Stock Conversion, and following the
Bank Conversion, the bank holding company for the National Bank.
Holding Company Conversion Stock: Shares of common stock, par value
$.01 per share, to be issued and sold by the Holding Company as a part of the
Conversion; provided, however, that for purposes of calculating Subscription
Rights and maximum purchase limitations under the Plan, references to the number
of shares of Holding Company Conversion Stock shall refer to the number of
shares offered in the Subscription Offering.
Market Maker: A dealer (i.e., any Person who engages directly or
indirectly as agent, broker or principal in the business of offering, buying,
selling, or otherwise dealing or trading in securities issued by another Person)
who, with respect to a particular security, (i) regularly publishes bona fide,
competitive bid and offer quotations in a recognized inter-dealer quotation
system; or (ii) furnishes bona fide competitive bid and offer quotations on
request; and (iii) is ready, willing, and able to effect transactions in
reasonable quantities at his quoted prices with other brokers or dealers.
Maximum Subscription Price: The price per share of Holding Company
Conversion Stock to be paid initially by subscribers in the Subscription
Offering.
Member: Any Person or entity that qualifies as a member of the
Association pursuant to its mutual charter and bylaws.
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National Bank: The national bank resulting from the Bank Conversion.
Non-Tax-Qualified Employee Plan: Any defined benefit plan or defined
contribution plan of the Association or Holding Company, such as an employee
stock ownership plan, stock bonus plan, profit-sharing plan or other plan, which
with its related trust does not meet the requirements to be "qualified" under
Section 401 of the Internal Revenue Code.
OCC: Office of the Comptroller of the Currency, Department of the
Treasury.
OCC Conversion Application: The application submitted to the OCC for
approval of the Bank Conversion.
OTS: Office of Thrift Supervision, Department of the Treasury.
OTS Bank Conversion Application: The application submitted to the OTS
for approval of the Bank Conversion.
OTS Conversion Application: The application submitted to the OTS on
Form AC.
Officer: An executive officer of the Association or the Holding
Company, including the Chairman of the Board, President, Executive Vice
Presidents, Senior Vice Presidents in charge of principal business functions,
Secretary and Treasurer.
Order Forms: Forms to be used in the Subscription Offering to exercise
Subscription Rights.
Other Members: Members of the Association, other than Eligible Account
Holders, Tax- Qualified Employee Plans or Supplemental Eligible Account Holders,
as of the Voting Record Date.
Person: An individual, a corporation, a partnership, an association, a
joint-stock company, a trust, any unincorporated organization, or a government
or political subdivision thereof, including the formation of the Holding
Company.
Plan: This Plan of Conversion, which provides for the conversion of the
Association from a federally chartered mutual savings association to a federally
chartered stock savings association, and the subsequent conversion of the
Converted Association from a federally chartered stock savings association to a
national bank, including any amendment approved as provided in this Plan.
Public Offering: The offering for sale by the Underwriters to the
general public of any shares of Holding Company Conversion Stock not subscribed
for in the Subscription Offering or the Direct Community Offering.
Public Offering Price: The price per share at which any unsubscribed
shares of Holding Company Conversion Stock are initially offered for sale in the
Public Offering.
Qualifying Deposit: The aggregate balance of each Deposit Account of an
Eligible Account Holder as of the Eligibility Record Date or of a Supplemental
Eligible Account Holder as of the Supplemental Eligibility Record Date.
SAIF: The Savings Association Insurance Fund.
SEC: The Securities and Exchange Commission.
Special Meeting: The Special Meeting of Members called for the purpose
of considering and voting upon the Plan of Conversion.
Stock Conversion: The Conversion of the Association to the Converted
Association.
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Subscription Offering: The offering of shares of Holding Company
Conversion Stock for subscription and purchase pursuant to Section VI of the
Plan.
Subscription Rights: Non-transferable, non-negotiable, personal rights
of the Association's Eligible Account Holders, Tax-Qualified Employee Plans,
Supplemental Eligible Account Holders, Other Members, and directors, Officers
and employees to subscribe for shares of Holding Company Conversion Stock in the
Subscription Offering.
Supplemental Eligibility Record Date: The last day of the calendar
quarter preceding approval of the Plan by the OTS.
Supplemental Eligible Account Holder: Any person holding a Qualifying
Deposit in the Association (other than an officer or director and their
associates) on the Supplemental Eligibility Record Date.
Tax-Qualified Employee Plans: Any defined benefit plan or defined
contribution plan of the Association or Holding Company, such as an employee
stock ownership plan, stock bonus plan, profit-sharing plan or other plan, which
with its related trust meets the requirements to be "qualified" under Section
401 of the Internal Revenue Code.
Underwriters: The investment banking firm or firms agreeing to purchase
Holding Company Conversion Stock in order to offer and sell such Holding Company
Conversion Stock in the Public Offering.
Voting Record Date: The date set by the Board of Directors in
accordance with federal regulations for determining Members eligible to vote at
the Special Meeting.
III. STEPS PRIOR TO SUBMISSION OF THE PLAN TO THE MEMBERS FOR
APPROVAL
Prior to submission of the Plan to its Members for approval, the
Association must receive approval from the OTS for consummation of the Stock
Conversion. The following steps must be taken prior to such regulatory approval:
A. The Board of Directors shall adopt the Plan by not less
than a two-thirds vote.
B. The Association shall notify its Members of the adoption of
the Plan by publishing a statement in a newspaper having a general
circulation in each community in which the Association maintains an
office.
C. Copies of the Plan adopted by the Board of Directors shall
be made available for inspection at each office of the Association.
D. The Association will promptly cause an OTS Conversion
Application, OTS Bank Conversion Application and an OTS Holding Company
Application on Form H- (e)1-S to be prepared and filed with the OTS; an
FRB Holding Company Application on Form Y-3 to be prepared and filed
with the FRB; an OCC Conversion Application to be prepared and filed
with the OCC; and a Registration Statement on Form S-1 to be prepared
and filed with the SEC..
E. Upon filing of the OTS Conversion Application, the
Association shall notify its Members that it has filed the OTS
Conversion Application by posting notice in each of its offices and by
publishing notice in a newspaper having general circulation in each
community in which the Association maintains an office.
F. The Board of Directors of the Association, by majority
vote, may, at any time, and notwithstanding any language in this Plan
to the contrary elect not to proceed
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with the Bank Conversion, in which event the FRB Holding Company
Application, the OCC Conversion Application and the OTS Bank Conversion
Application may be withdrawn or abandoned. In the event the Bank
Conversion is not pursued, any references to the Bank Conversion in
this Plan shall be disregarded.
IV. CONVERSION PROCEDURE
Upon receipt of all regulatory approvals required for consummation of
the Stock Conversion, the Association shall convene the Special Meeting
scheduled in accordance with the Association's Bylaws to vote on the Plan.
Promptly after receipt of OTS approval of the OTS Conversion Application and at
least 20 days but not more than 45 days prior to the Special Meeting, the
Association will distribute proxy solicitation materials to all voting Members
as of the Voting Record Date established for voting at the Special Meeting.
Proxy materials will also be sent to each beneficial holder of an Individual
Retirement Account where the name of the beneficial holder is disclosed on the
Association's records. The proxy solicitation materials will include a copy of
the Proxy Statement and other documents authorized for use by the regulatory
authorities and may also include a Subscription and Community Prospectus as
provided in Section VI below. The Association will also advise each Eligible
Account Holder and Supplemental Eligible Account Holder not entitled to vote at
the Special Meeting of the proposed Conversion and the scheduled Special Meeting
and provide a postage paid card on which to indicate whether he or she wishes to
receive the Subscription and Community Prospectus, if the Subscription Offering
is not held concurrently with the proxy solicitation of Members for the Special
Meeting.
Pursuant to applicable regulations, an affirmative vote of at least a
majority of the total outstanding votes of the Members will be required for
approval of the Plan. Voting may be in person or by proxy.
By voting in favor of the adoption of the Plan and the Conversion, the
Members will be voting in favor of (i) the Stock Conversion and the adoption by
the Association of the Federal Stock Charter and Bylaws in the forms attached as
Exhibits A and B to this Plan and (ii) the subsequent Bank Conversion and the
adoption by the Converted Association of the national bank articles of
association and bylaws in the forms attached as Exhibits C and D to this Plan.
Failure to pursue or receive regulatory approval for the Bank Conversion shall
have no effect on the vote with respect to the Stock Conversion.
The Holding Company Conversion Stock will be offered for sale in the
Subscription Offering at the Maximum Subscription Price to Eligible Account
Holders, Tax-Qualified Employee Plans, Supplemental Eligible Account Holders,
Other Members and directors, Officers and employees of the Association, prior to
or within 45 days after the date of the Special Meeting. The Association may,
either concurrently with, at any time during, or promptly after the Subscription
Offering, also offer the Holding Company Conversion Stock to and accept
subscriptions from other Persons in a Direct Community Offering; provided that
the Association's Eligible Account Holders, Tax-Qualified Employee Plans,
Supplemental Eligible Account Holders, Other Members and directors, Officers and
employees shall have the priority rights to subscribe for Holding Company
Conversion Stock set forth in Section VI of this Plan. However, the Holding
Company and the Association may delay commencing the Subscription
Offering beyond such 45 day period in the event there exist unforeseen material
adverse market or financial conditions. If the Subscription Offering commences
prior to the Special Meeting, subscriptions will be accepted subject to the
approval of the Plan at the Special Meeting.
The period for the Subscription Offering and Direct Community Offering
will be not less than 20 days nor more than 45 days unless extended by the
Association. Upon completion of the Subscription Offering and the Direct
Community Offering, if any, any unsubscribed shares of Holding Company
Conversion Stock will, if feasible, be sold to the Underwriters for resale to
the general public in the Public Offering. If for any reason the Public Offering
of all shares not sold in the Subscription Offering and Direct Community
Offering cannot be effected, the Holding Company and the Association will use
their best efforts to obtain other purchasers, subject to OTS approval.
Completion of the sale of all shares of Holding Company Conversion Stock not
sold in the Subscription Offering and Direct Community Offering is required
within 45 days after termination of the Subscription Offering, subject to
extension of such 45 day period by the Holding Company and the Association with
the approval of the OTS. The Holding Company and the Association may jointly
seek one or more extensions of such 45 day period if necessary
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to complete the sale of all shares of Holding Company Conversion Stock. In
connection with such extensions, subscribers and other purchasers will be
permitted to increase, decrease or rescind their subscriptions or purchase
orders to the extent required by the OTS in approving the extensions. Completion
of the sale of all shares of Holding Company Conversion Stock is required within
24 months after the date of the Special Meeting.
V. CONSUMMATION OF CONVERSION
A. Consummation of the Stock Conversion.
The date of consummation of the Stock Conversion will be the
effective date of the amendment of the Association's federal mutual
charter to read in the form of a federal stock charter, which shall be
the date of the sale of the Holding Company Conversion Stock. After
receipt of all orders for Holding Company Conversion Stock, and
concurrently with the execution thereof, the amendment of the
Association's federal mutual charter and bylaws to authorize the
issuance of shares of Capital Stock and to conform to the requirements
of a federal capital stock savings association will be declared
effective by the OTS, the amended bylaws approved by the Members will
become effective, and the Association will thereby be and become the
Converted Association. At such time, the Holding Company Conversion
Stock will be issued and sold by the Holding Company, the Capital Stock
to be issued in the Conversion will be issued and sold to the Holding
Company, and the Converted Association will become a wholly owned
subsidiary of the Holding Company. The Converted Association will issue
to the Holding Company 100% of its common stock, representing all of
the shares of Capital Stock to be issued by the Converted Association
in the Stock Conversion, and the Holding Company will make payment to
the Converted Association of that portion of the aggregate net proceeds
realized by the Holding Company from the sale of the Holding Company
Conversion Stock under the Plan as is necessary to increase the
Converted Association's tangible capital to at least 10% of its
adjusted total assets, or such other portion of the aggregate net
proceeds as may be authorized or required by the OTS.
B. Consummation of the Bank Conversion.
The Bank Conversion shall be deemed to occur and shall be
effective upon completion of all actions necessary or appropriate under
applicable federal statutes and regulations and the policies of the
FRB, the OCC and the OTS to complete the conversion of the Converted
Association to a national bank, including without limitation, the
approval of the Bank Conversion by the Holding Company, as the sole
shareholder of the Converted Association, whereupon the Converted
Association will thereby be and become the National Bank. The Bank
Conversion shall be consummated as soon as reasonably practicable
following the consummation of the Stock Conversion as described in
Section VI herein.
VI. STOCK OFFERING
A. Total Number of Shares and Purchase Price of Conversion Stock
The total number of shares of Holding Company Conversion Stock to be
issued and sold in the Conversion will be determined by the Boards of Directors
of the Association and the Holding Company prior to the commencement of the
Subscription Offering, subject to adjustment if necessitated by market or
financial conditions prior to consummation of the Conversion. The total number
of shares of Holding Company Conversion Stock shall also be subject to increase
in connection with any oversubscriptions in the Subscription Offering or Direct
Community Offering.
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The aggregate price for which all shares of Holding Company Conversion
Stock will be sold will be based on an independent appraisal of the estimated
total pro forma market value of the Holding Company and the Converted
Association. Such appraisal shall be performed in accordance with OTS guidelines
and will be updated as appropriate under or required by applicable regulations.
The appraisal will be made by an independent investment banking or
financial consulting firm experienced in the area of thrift institution
appraisals. The appraisal will include, among other things, an analysis of the
historical and pro forma operating results and net worth of the Converted
Association in accordance with applicable regulations.
Based upon the independent appraisal, the Board of Directors of the
Holding Company and the Association will jointly fix the Maximum Subscription
Price.
If, following completion of the Subscription Offering and Direct
Community Offering, a Public Offering is effected, the Actual Subscription Price
for each share of Holding Company Conversion Stock will be the same as the
Public Offering Price at which unsubscribed shares of Holding Company Conversion
Stock are initially offered for sale by the Underwriters in the Public Offering.
The Public Offering Price will be a price negotiated by the Holding Company and
the Association with the Underwriters, not in excess of the Maximum Subscription
Price. The price paid by the Underwriters for each unsubscribed share will be
the Public Offering Price less a negotiated underwriting discount.
If, upon completion of the Subscription Offering and Direct Community
Offering, all of the Holding Company Conversion Stock is subscribed for or only
a limited number of shares remain unsubscribed for, or if a Public Offering
otherwise cannot be effected, the Actual Subscription Price for each share of
Holding Company Conversion Stock will be determined by dividing the estimated
appraised aggregate pro forma market value of the Holding Company and the
Converted Association, based on the independent appraisal as updated upon
completion of the Subscription Offering or other sale of all of the Holding
Company Conversion Stock, by the total number of shares of Holding Company
Conversion Stock to be issued and sold by the Holding Company upon Conversion.
Such appraisal will then be expressed in terms of a specific aggregate dollar
amount rather than as a range.
B. Subscription Rights
Non-transferable Subscription Rights to purchase shares will be issued
without payment therefor to Eligible Account Holders, Tax-Qualified Employee
Plans, Supplemental Eligible Account Holders, Other Members and directors,
Officers and employees of the Association as set forth below.
1. Preference Category No. 1: Eligible Account Holders
Each Eligible Account Holder shall receive non-transferable
Subscription Rights to subscribe for shares of Holding Company
Conversion Stock in an amount equal to the greater of $65,000 of
Conversion Stock offered in the Conversion (exclusive of any additional
shares offered pursuant to an increase in the appraisal range not
requiring a resolicitation of subscribers), one-tenth of one percent
(.10%) of the total offering of shares, or 15 times the product
(rounded down to the next whole number) obtained by multiplying the
total number of shares of common stock to be issued by a fraction of
which the numerator is the amount of the qualifying deposit of the
Eligible Account Holder and the denominator is the total amount of
qualifying deposits of all Eligible Account Holders in the converting
Association in each case on the Eligibility Record Date. If sufficient
shares are not available, shares shall be allocated first to permit
each subscribing Eligible Account Holder to purchase, to the extent
possible, 100 shares, and thereafter among each subscribing Eligible
Account Holder pro rata in the same proportion that his Qualifying
Deposit bears to the total Qualifying Deposits of all subscribing
Eligible Account Holders whose subscriptions remain unsatisfied.
Non-transferable Subscription Rights to purchase Holding
Company Conversion Stock received by directors and Officers of the
Association and their Associates, based on their increased deposits in
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the Association in the one year period preceding the Eligibility Record
Date, shall be subordinated to all other subscriptions involving the
exercise of non-transferable Subscription Rights of Eligible Account
Holders.
2. Preference Category No.2: Tax-Qualified Employee Plans
Each Tax-Qualified Employee Plan shall be entitled to receive
non-transferable Subscription Rights to purchase up to 10% of the
shares of Holding Company Conversion Stock, provided that singly or in
the aggregate such plans (other than that portion of such plans which
is self-directed) shall not purchase more than 10% of the shares of the
Holding Company Conversion Stock. Subscription Rights received pursuant
to this Category shall be subordinated to all rights received by
Eligible Account Holders to purchase shares pursuant to Category No. 1;
provided, however, that notwithstanding any other provision of this
Plan to the contrary, the Tax-Qualified Employee Plans shall have a
first priority Subscription Right to the extent that the total number
of shares of Holding Company Conversion Stock sold in the Conversion
exceeds the maximum of the appraisal range as set forth in the
subscription prospectus.
3. Preference Category No. 3: Supplemental Eligible
Account Holders
Each Supplemental Eligible Account Holder shall receive
non-transferable Subscription Rights to subscribe for shares of Holding
Company Conversion Stock in an amount equal to the greater of $65,000
of Conversion Stock offered in the Conversion (exclusive of any
additional shares offered pursuant to an increase in the appraisal
range not requiring a resolicitation of subscribers), or one-tenth of
one percent (.10%) of the total offering of shares, or 15 times the
product (rounded down to the next whole number) obtained by multiplying
the total number of shares of common stock to be issued by a fraction
of which the numerator is the amount of the qualifying deposit of the
Supplemental Eligible Account Holder and the denominator is the total
amount of qualifying deposits of all Supplemental Eligible Account
Holders in the converting Association in each case on the Supplemental
Eligibility Record Date.
Subscription Rights received pursuant to this category shall
be subordinated to all Subscription Rights received by Eligible Account
Holders and Tax-Qualified Employee Plans pursuant to Category Nos. 1
and 2 above.
Any non-transferable Subscription Rights to purchase shares
received by an Eligible Account Holder in accordance with Category No.
1 shall reduce to the extent thereof the Subscription Rights to be
distributed to such person pursuant to this Category.
In the event of an oversubscription for shares under the
provisions of this subparagraph, the shares available shall be
allocated first to permit each subscribing Supplemental Eligible
Account Holder to purchase, to the extent possible, a number of shares
sufficient to make his total allocation (including the number of
shares, if any, allocated in accordance with Category No. 1) equal to
100 shares, and thereafter among each subscribing Supplemental Eligible
Account Holder pro rata in the same proportion that his Qualifying
Deposit bears to the total Qualifying Deposits of all subscribing
Supplemental Eligible Account Holders whose subscriptions remain
unsatisfied.
4. Preference Category No. 4: Other Members
Each Other Member shall receive non-transferable Subscription
Rights to subscribe for shares of Holding Company Conversion Stock
remaining after satisfying the subscriptions provided for under
Category Nos. 1 through 3 above, subject to the following conditions:
a. Each Other Member shall be entitled to subscribe
for an amount of shares equal to the greater of $65,000 of
Holding Company Conversion Stock offered in the Conversion
(exclusive of any additional shares offered pursuant to an
increase in the appraisal range not requiring a resolicitation
of subscribers) or one-tenth of one percent (.10%) of the
total offering
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of shares of common stock in the Conversion, to the extent
that Holding Company Conversion Stock is available.
b. In the event of an oversubscription for shares
under the provisions of this subparagraph, the shares
available shall be allocated among the subscribing Other
Members pro rata in the same proportion that his number of
votes on the Voting Record Date bears to the total number of
votes on the Voting Record Date of all subscribing Other
Members on such date. Such number of votes shall be determined
based on the Association's mutual charter and bylaws in effect
on the date of approval by members of this Plan of Conversion.
5. Preference Category No. 5: Directors, Officers and
Employees
Each director, Officer and employee of the Association as of
the date of the commencement of the Subscription Offering shall be
entitled to receive non-transferable Subscription Rights to purchase
shares of the Holding Company Conversion Stock to the extent that
shares are available after satisfying subscriptions under Category Nos.
1 through 4 above. The shares which may be purchased under this
Category are subject to the following conditions:
a. The total number of shares which may be purchased
under this Category may not exceed 24% of the number of shares
of Holding Company Conversion Stock.
b. The maximum amount of shares which may be
purchased under this Category by any Person is $65,000 of
Holding Company Conversion Stock offered in the Conversion
(exclusive of any additional shares offered pursuant to an
increase in the appraisal range not requiring a resolicitation
of subscribers) of Conversion Stock. In the event of an
oversubscription for shares under the provisions of this
subparagraph, the shares available shall be allocated pro rata
among all subscribers in this Category.
C. Direct Community Offering and Public Offering
1. Any shares of Holding Company Conversion Stock not
subscribed for in the Subscription Offering may be offered for sale in
a Direct Community Offering. This will involve an offering of all
unsubscribed shares directly to the general public. The Direct
Community Offering, if any, shall be for a period of not less than 20
days nor more than 45 days unless extended by the Holding Company and
the Association, and shall commence concurrently with, during or
promptly after the Subscription Offering. The purchase price per share
to the general public in a Direct Community Offering shall be the same
as the Actual Subscription Price. The Holding Company and the
Association may use an investment banking firm or firms on a best
efforts basis to sell the unsubscribed shares in the Subscription and
Direct Community Offering. The Holding Company and the Association may
pay a commission or other fee to such investment banking firm or firms
as to the shares sold by such firm or firms in the Subscription and
Direct Community Offering and may also reimburse such firm or firms for
expenses incurred in connection with the sale. The Holding Company
Conversion Stock will be offered and sold in the Direct Community
Offering, in accordance with OTS regulations, so as to achieve the
widest distribution of the Holding Company Conversion Stock. No person,
by himself or herself, or with an Associate or group of Persons acting
in concert, may subscribe for or purchase more than $65,000 of Holding
Company Conversion Stock offered in the Direct Community Offering
(exclusive of any additional shares offered pursuant to an increase in
the appraisal range not requiring a resolicitation of subscribers). The
Holding Company and the Association may limit total subscriptions under
this Section VI.C.1 so as to assure that the number of shares available
for the Public Offering may be up to a specified percentage of the
number of shares of Holding Company Conversion Stock. Finally, the
Holding Company and the Association may reserve shares offered in the
Community Offering for sales to institutional investors.
In the event of an oversubscription for shares in the
Community Offering, shares may be allocated (to the extent shares
remain available) first to cover any reservation of shares for a public
offering or
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institutional orders, next to cover orders of natural
persons residing in Crawford County, Illinois, then to cover the orders
of any other person subscribing for shares in the Community Offering so
that each such person may receive 1,000 shares, and thereafter, on a
pro rata basis to such persons based on the amount of their respective
subscriptions.
The Holding Company and the Association, in their sole
discretion, may reject subscriptions, in whole or in part, received
from any Person under this Section VI.C.
2. Any shares of Holding Company Conversion Stock not sold in
the Subscription Offering or in the Direct Community Offering, if any,
shall then be sold to the Underwriters for resale to the general public
at the Public Offering Price in the Public Offering. It is expected
that the Public Offering, if any, will commence as soon as practicable
after termination of the Subscription Offering and the Direct Community
Offering. The Public Offering shall be completed within 45 days after
the termination of the Subscription Offering, unless such period is
extended as provided in Section IV hereof. The Public Offering Price
and the underwriting discount shall be determined as provided in
Section VI.A hereof and set forth in the underwriting agreement between
the Holding Company and the Association and the Underwriters. Such
underwriting agreement shall be filed with the OTS and the SEC.
3. If for any reason a Public Offering of unsubscribed shares
of Holding Company Conversion Stock cannot be effected and any shares
remain unsold after the Subscription Offering and the Direct Community
Offering, if any, the Board of Directors of the Holding Company and the
Association will seek to make other arrangements for the sale of the
remaining shares. Such other arrangements will be subject to the
approval of the OTS and to compliance with applicable securities laws.
D. Additional Limitations Upon Purchases of Shares of Holding
Company Conversion Stock
The following additional limitations shall be imposed on all purchases
of Holding Company Conversion Stock in the Conversion:
1. No Person, by himself or herself, or with an Associate or
group of Persons acting in concert, may subscribe for or purchase in
the Conversion a number of shares of Holding Company Conversion Stock
which exceeds $100,000 of Holding Company Conversion Stock offered in
the Conversion based on the appraisal range contained in the
Association's subscription prospectus (exclusive of any additional
shares that may be offered pursuant to an increase in such appraisal
range not requiring a resolicitation of subscribers). For purposes of
this paragraph, an Associate of a Person does not include a
Tax-Qualified or Non-Tax Qualified Employee Plan in which the person
has a substantial beneficial interest or serves as a trustee or in a
similar fiduciary capacity. Moreover, for purposes of this paragraph,
shares held by one or more Tax-Qualified or Non-Tax Qualified Employee
Plans attributed to a Person shall not be aggregated with shares
purchased directly by or otherwise attributable to that Person.
2. Directors and Officers and their Associates may not
purchase in all categories in the Conversion an aggregate of more than
34% of the Holding Company Conversion Stock. For purposes of this
paragraph, an Associate of a Person does not include any Tax-Qualified
Employee Plan. Moreover, any shares attributable to the Officers and
directors and their Associates, but held by one or more Tax-Qualified
Employee Plans shall not be included in calculating the number of
shares which may be purchased under the limitation in this paragraph.
3. The minimum number of shares of Holding Company Conversion
Stock that may be purchased by any Person in the Conversion is 25
shares, provided sufficient shares are available.
4. The Board of Directors of the Holding Company and the
Association may, in their sole discretion, increase the maximum
purchase limitation referred to in subparagraph 1. herein up to 9.99%,
provided that orders for shares exceeding 5% of the shares being
offered in the Subscription Offering shall not exceed, in the
aggregate, 10% of the shares being offered in the Subscription
Offering. Requests to
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purchase additional shares of Holding Company Conversion Stock under
this provision will be allocated by the Boards of Directors on a pro
rata basis giving priority in accordance with the priority rights set
forth in this Section VI.
Depending upon market and financial conditions, the Board of Directors
of the Holding Company and the Association, with the approval of the OTS and
without further approval of the Members, may increase or decrease any of the
above purchase limitations.
For purposes of this Section VI, the directors of the Association shall
not be deemed to be Associates or a group acting in concert solely as a result
of their serving in such capacities.
Each Person purchasing the Holding Company Conversion Stock in the
Conversion shall be deemed to confirm that such purchase does not conflict with
the above purchase limitations.
E. Restrictions and Other Characteristics of Holding Company
Conversion Stock Being Sold
1. Transferability. Holding Company Conversion Stock purchased
by Persons other than directors and Officers of the Holding Company or
the Association will be transferable without restriction. Shares
purchased by directors or Officers shall not be sold or otherwise
disposed of for value for a period of one year from the date of
Conversion, except for any disposition of such shares (i) following the
death of the original purchaser, or (ii) resulting from an exchange of
securities in a merger or acquisition approved by the applicable
regulatory authorities. Any transfers that could result in a change of
control of the Holding Company or the Association or result in the
ownership by any Person or group acting in concert of more than 10% of
any class of the Association's or the Holding Company's equity
securities are subject to the prior approval of the OTS.
The certificates representing shares of Conversion Stock
issued to directors and Officers shall bear a legend giving appropriate
notice of the one year holding period restriction. Appropriate
instructions shall be given to the transfer agent for such stock with
respect to the applicable restrictions relating to the transfer of
restricted stock. Any shares of common stock of the Association
subsequently issued as a stock dividend, stock split, or otherwise,
with respect to any such restricted stock, shall be subject to the same
holding period restrictions for Association directors and Officers as
may be then applicable to such restricted stock.
No director or Officer of the Holding Company or the
Association, or Associate of such a director or Officer, shall purchase
any outstanding shares of capital stock of the Holding Company for a
period of three years following the Conversion without the prior
written approval of the OTS, except through a broker or dealer
registered with the SEC or in a "negotiated transaction" involving more
than one percent of the then-outstanding shares of common stock of the
Holding Company. As used herein, the term "negotiated transaction"
means a transaction in which the securities are offered and the terms
and arrangements relating to any sale are arrived at through direct
communications between the seller or any Person acting on its behalf
and the purchaser or his investment representative. The term
"investment representative" shall mean a professional investment
advisor acting as agent for the purchaser and independent of the seller
and not acting on behalf of the seller in connection with the
transaction.
2. Repurchase and Dividend Rights. For a period of three years
following Conversion, the Converted Association shall not repurchase
any shares of its capital stock, except in the case of an offer to
repurchase on a pro rata basis made to all holders of capital stock of
the Converted Association. Any such offer shall be subject to the prior
approval of the OTS. A repurchase of qualifying shares of a director
shall not be deemed to be a repurchase for purposes of this Section
VI.E.2.
Present regulations also provide that the Converted
Association may not declare or pay a cash dividend on or repurchase any
of its stock (i) if the result thereof would be to reduce the
regulatory capital of the Converted Association below the amount
required for the liquidation account to be established
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pursuant to Section XII hereof, and (ii) except in compliance with
requirements of Section 563.134 of the Rules and Regulations of the
OTS.
The above limitations are subject to Section 563b.3 (g)(3) of
the Rules and Regulations of the OTS, which generally provides that the
Converted Association may repurchase its capital stock provided (i) no
repurchases occur within one year following conversion, (ii)
repurchases during the second and third year after conversion are part
of an open market stock repurchase program that does not allow for a
repurchase of more than 5% of the Converted Association's outstanding
capital stock during a twelve-month period without OTS approval, (iii)
the repurchases do not cause the Association to become
undercapitalized, and (iv) the Converted Association provides notice to
the OTS at least 10 days prior to the commencement of a repurchase
program and the OTS does not object. In addition, the above limitations
shall not preclude payments of dividends or repurchases of capital
stock by the Converted Association in the event applicable federal
regulatory limitations are liberalized subsequent to OTS approval of
the Plan. Such restrictions and limitations shall not apply following
consummation of the Bank Conversion, unless the OTS approval of the
Bank Conversion otherwise requires.
3. Voting Rights. After the Conversion, holders of deposit
accounts will not have voting rights in the Converted Association or
the Holding Company. Exclusive voting rights as to the Association will
be vested with the Holding Company, as the sole stockholder of the
Association; voting rights as to the Holding Company will be held
exclusively by its stockholders.
F. Exercise of Subscription Rights; Order Forms
1. If the Subscription Offering occurs concurrently with the
solicitation of proxies for the Special Meeting, the subscription
prospectus and Order Form may be sent to each Eligible Account Holder,
Tax-Qualified Employee Plan, Supplemental Eligible Account Holder,
Other Member, and director, Officer and employee at their last known
address as shown on the records of the Association. However, the
Association may, and if the Subscription Offering commences after the
Special Meeting the Association shall, furnish a subscription
prospectus and Order Form only to Eligible Account Holders,
Tax-Qualified Employee Plans, Supplemental Eligible Account Holders,
Other Members, and directors, Officers and employees who have returned
to the Association by a specified date prior to the commencement of the
Subscription Offering a post card or other written communication
requesting a subscription prospectus and Order Form. In such event, the
Association shall provide a postage-paid post card for this purpose and
make appropriate disclosure in its proxy statement for the solicitation
of proxies to be voted at the Special Meeting and/or letter sent in
lieu of the proxy statement to those Eligible Account Holders,
Tax-Qualified Employee Plans or Supplemental Eligible Account Holders
who are not Members on the Voting Record Date.
2. Each Order Form will be preceded or accompanied by a
subscription prospectus describing the Converted Association and the
shares of Holding Company Conversion Stock being offered for
subscription and containing all other information required by the OTS
or the SEC or necessary to enable Persons to make informed investment
decisions regarding the purchase of Holding Company Conversion Stock.
3. The Order Forms (or accompanying instructions) used for the
Subscription Offering will contain, among other things, the following:
(i) A clear and intelligible explanation of the
Subscription Rights granted under the Plan to Eligible Account
Holders, Tax-Qualified Employee Plans, Supplemental Eligible
Account Holders, Other Members, and directors, Officers and
employees;
(ii) A specified expiration date by which Order
Forms must be returned to and actually received by the
Association or its representative for purposes of exercising
Subscription Rights, which date will be not less than 20 days
after the Order Forms are mailed by the Association;
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(iii) The Maximum Subscription Price to be paid for
each share subscribed for when the Order Form is returned;
(iv) A statement that 25 shares is the minimum
number of shares of Conversion Stock that may be subscribed
for under the Plan;
(v) A specifically designated blank space for
indicating the number of shares being subscribed for;
(vi) A set of detailed instructions as to how to
complete the Order Form including a statement as to the
available alternative methods of payment for the shares being
subscribed for;
(vii) Specifically designated blank spaces for
dating and signing the Order Form;
(viii) An acknowledgement that the subscriber has
received the subscription prospectus;
(ix) A statement of the consequences of failing to
properly complete and return the Order Form, including a
statement that the Subscription Rights will expire on the
expiration date specified on the Order Form unless such
expiration date is extended by the Holding Company and the
Association, and that the Subscription Rights may be exercised
only by delivering the Order Form, properly completed and
executed, to the Association or its representative by the
expiration date, together with required payment of the Maximum
Subscription Price for all shares of Holding Company
Conversion Stock subscribed for;
(x) A statement that the Subscription Rights are
non-transferable and that all shares of Holding Company
Conversion Stock subscribed for upon exercise of Subscription
Rights must be purchased on behalf of the Person exercising
the Subscription Rights for his own account; and
(xi) A statement that, after receipt by the
Association or its representative, a subscription may not be
modified, withdrawn or canceled without the consent of the
Association.
G. Method of Payment
Payment for all shares of Holding Company Conversion Stock subscribed
for, computed on the basis of the Maximum Subscription Price, must accompany all
completed Order Forms. Payment may be made in cash (if presented in Person), by
check, or, if the subscriber has a Deposit Account in the Association (including
a certificate of deposit), the subscriber may authorize the Association to
charge the subscriber's account.
If a subscriber authorizes the Association to charge his or her
account, the funds will continue to earn interest, but may not be used by the
subscriber until all Holding Company Conversion Stock has been sold or the Plan
is terminated, whichever is earlier. The Association will allow subscribers to
purchase shares by withdrawing funds from certificate accounts without the
assessment of early withdrawal penalties with the exception of prepaid interest
in the form of promotional gifts. 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 rate paid
on the certificate will continue until the certificate reaches maturity. This
waiver of the early withdrawal penalty is applicable only to withdrawals made in
connection with the purchase of Holding Company Conversion Stock under the Plan.
Interest will also be paid, at not less than the then-current passbook rate, on
all orders paid in cash, by check or money order, from the date payment is
received until consummation of the Stock Conversion. Payments made in cash, by
check or money order will be placed by the Association in an escrow or other
account established specifically for this purpose.
In the event of an unfilled amount of any subscription order, the
Converted Association will make an appropriate refund or cancel an appropriate
portion of the related withdrawal authorization, after consummation of the Stock
Conversion, including any difference between the Maximum Subscription Price and
the Actual Subscription
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Price (unless subscribers are afforded the right to apply such difference to the
purchase of additional whole shares). If for any reason the Stock Conversion is
not consummated, purchasers will have refunded to them all payments made and all
withdrawal authorizations will be canceled in the case of subscription payments
authorized from accounts at the Association.
If any Tax-Qualified Employee Plans or Non-Tax-Qualified Employee Plans
subscribe for shares during the Subscription Offering, such plans will not be
required to pay for the shares subscribed for at the time they subscribe, but
may pay for such shares of Holding Company Conversion Stock subscribed for upon
consummation of the Stock Conversion. In the event that, after the completion of
the Subscription Offering, the amount of shares to be issued is increased above
the maximum of the appraisal range included in the prospectus, the Tax Qualified
and Non-Tax Qualified Employee Plans shall be entitled to increase their
subscriptions by a percentage equal to the percentage increase in the amount of
shares to be issued above the maximum of the appraisal range provided that such
subscriptions shall continue to be subject to applicable purchase limits and
stock allocation procedures.
H. Undelivered, Defective or Late Order Forms; Insufficient Payment
The Boards of Directors of the Holding Company and the Association
shall have the absolute right, in their sole discretion, to reject any Order
Form, including but not limited to, any Order Forms which (i) are not delivered
or are returned by the United States Postal Service (or the addressee cannot be
located); (ii) are not received back by the Association or its representative,
or are received after the termination date specified thereon; (iii) are
defectively completed or executed; (iv) are not accompanied by the total
required payment for the shares of Holding Company Conversion Stock subscribed
for (including cases in which the subscribers' Deposit Accounts or certificate
accounts are insufficient to cover the authorized withdrawal for the required
payment); or (v) are submitted by or on behalf of a Person whose representations
the Boards of Directors of the Holding Company and the Association believe to be
false or who they otherwise believe, either alone or acting in concert with
others, is violating, evading or circumventing, or intends to violate, evade or
circumvent, the terms and conditions of this Plan. In such event, the
Subscription Rights of the Person to whom such rights have been granted will not
be honored and will be treated as though such Person failed to return the
completed Order Form within the time period specified therein. The Association
may, but will not be required to, waive any irregularity relating to any Order
Form or require submission of corrected Order Forms or the remittance of full
payment for subscribed shares by such date as the Association may specify. The
interpretations of the Holding Company and the Association of the terms and
conditions of this Plan and of the proper completion of the Order Form will be
final, subject to the authority of the OTS.
I. Member in Non-Qualified States or in Foreign Countries
The Holding Company and the Association will make reasonable efforts to
comply with the securities laws of all states in the United States in which
Persons entitled to subscribe for Holding Company Conversion Stock pursuant to
the Plan reside. However, no shares will be offered or sold under the Plan of
Conversion to any such Person who (1) resides in a foreign country or (2)
resides in a state of the United States in which a small number of Persons
otherwise eligible to subscribe for shares under the Plan reside or as to which
the Holding Company and the Association determine that compliance with the
securities laws of such state would be impracticable for reasons of cost or
otherwise, including, but not limited to, a requirement that the Holding Company
and the Association or any of its officers, directors or employees register,
under the securities laws of such state, as a broker, dealer, salesman or agent.
No payments will be made in lieu of the granting of Subscription Rights to any
such Person.
VI. FEDERAL STOCK CHARTER AND BYLAWS
A. As part of the Conversion, the Association will take all appropriate
steps to amend its charter to read in the form of federal stock savings
institution charter as prescribed by the OTS. A copy of the proposed stock
charter is available upon request. By their approval of the Plan, the Members of
the Association will thereby approve and adopt such charter.
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B. The Association will also take appropriate steps to amend its bylaws
to read in the form prescribed by the OTS for a federal stock savings
institution. A copy of the proposed federal stock bylaws is available upon
request.
C. The effective date of the adoption of the Association's federal
stock charter and bylaws shall be the date of the issuance and sale of the
Holding Company Conversion Stock as specified by the OTS.
D. As part of the Bank Conversion, a national bank articles of
association and bylaws will be adopted to allow the National Bank to operate as
a national bank. By approving the Plan, the Members of the Association will
thereby approve such articles of association and bylaws. Prior to completion of
the Bank Conversion, the articles of association and bylaws may be amended in
accordance with the provisions and limitations for amending the Plan under
Section XIV below. The effective date of the articles of association and bylaws
of the National Bank shall be the date of the consummation of the Bank
Conversion.
VII. HOLDING COMPANY CERTIFICATE OF INCORPORATION
A copy of the proposed certificate of incorporation of the Holding
Company will be made available from the Association upon request.
VIII. DIRECTORS OF THE CONVERTED ASSOCIATION AND THE NATIONAL
BANK
Each Person serving as a member of the Board of Directors of the
Association at the time of the Stock Conversion will thereupon become a director
of the Converted Association. If the Bank Conversion is consummated, each person
serving as a member of the Board of Directors of the Converted Association at
the time of the Bank Conversion will become a director of the National Bank.
IX. STOCK OPTION AND INCENTIVE PLAN AND RECOGNITION AND
RETENTION PLAN
In order to provide an incentive for directors, Officers and employees
of the Holding Company and its subsidiaries (including the Converted
Association), the Boards of Director of the Holding Company intends to adopt,
subject to shareholder approval, a stock option and incentive plan and a
recognition and retention plan as soon as permitted by applicable regulation.
X. CONTRIBUTIONS TO TAX-QUALIFIED EMPLOYEE PLANS
The Converted Association and the Holding Company may in their
discretion make scheduled contributions to any Tax-Qualified Employee Plans,
provided that any such contributions which are for the acquisition of Holding
Company Conversion Stock, or the repayment of debt incurred for such an
acquisition, do not cause the Converted Association to fail to meet its
regulatory capital requirements.
XI. SECURITIES REGISTRATION AND MARKET MAKING
Promptly following the Stock Conversion, the Holding Company will
register its stock with the SEC pursuant to the Exchange Act. In connection with
the registration, the Holding Company will undertake not to deregister such
stock, without the approval of the OTS, for a period of three years thereafter.
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If the Bank Conversion is consummated, the National Bank will become
subject to the sole jurisdiction of the OCC, and the Holding Company, which will
undertake not to deregister its stock, without the approval of the OCC for a
period of three years after the Stock Conversion, to the sole jurisdiction of
the FRB.
XII. STATUS OF SAVINGS ACCOUNTS AND LOANS SUBSEQUENT TO
CONVERSION
Each Deposit Account holder shall retain, without payment, a
withdrawable Deposit Account or Accounts in the Converted Association, equal in
amount to the withdrawable value of such account holder's Deposit Account or
Accounts prior to the Stock Conversion. Each Person holding a Savings Account at
the Converted Association as of immediately prior to consummation of the Bank
Conversion as set forth in Section V.B. herein shall receive, without payment, a
withdrawable Savings Account or Savings Accounts in the National Bank equal in
dollar amount and on the same terms and conditions as in effect as of
immediately prior to the consummation of the Bank Conversion. All Deposit
Accounts will continue to be insured by the FDIC up to the applicable limits of
insurance coverage, and shall be subject to the same terms and conditions
(except as to voting and liquidation rights) as such Deposit Account in the
Association at the time of the Conversion. All loans shall retain the same
status after Conversion as these loans had prior to Conversion.
XIII. LIQUIDATION ACCOUNT
For purposes of granting to Eligible Account Holders and Supplemental
Eligible Account Holders who continue to maintain Deposit Accounts at the
Converted Association a priority in the event of a complete liquidation of the
Converted Association, the Converted Association will, at the time of
Conversion, establish a liquidation account in an amount equal to the net worth
of the Association as shown on its latest statement of financial condition
contained in the final prospectus used in connection with the Conversion. The
creation and maintenance of the liquidation account will not operate to restrict
the use or application of any of the regulatory capital accounts of the
Converted Association; provided, however, that such regulatory capital accounts
will not be voluntarily reduced below the required dollar amount of the
liquidation account. Each Eligible Account Holder and Supplemental Eligible
Account Holder shall, with respect to the Deposit Account held, have a related
inchoate interest in a portion of the liquidation account balance ("subaccount
balance").
The initial subaccount balance of a Deposit Account held by an Eligible
Account Holder or Supplemental Eligible Account Holder shall be determined by
multiplying the opening balance in the liquidation account by a fraction of
which the numerator is the amount of the Qualifying Deposit in the Deposit
Account on the Eligibility Record Date or the Supplemental Eligibility Record
Date and the denominator is the total amount of the Qualifying Deposits of all
Eligible Account Holders and Supplemental Eligible Account Holders on such
record dates in the Association. Such initial subaccount balance shall not be
increased, and it shall be subject to downward adjustment as provided below.
If the deposit balance in any Deposit Account of an Eligible Account
Holder or Supplemental Eligible Account Holder at the close of business on any
annual closing date subsequent to the record date is less than the lesser of (i)
the deposit balance in such Deposit Account at the close of business on any
other annual closing date subsequent to the Eligibility Record Date or the
Supplemental Eligibility Record Date or (ii) the amount of the Qualifying
Deposit in such Deposit Account on the Eligibility Record Date or Supplemental
Eligibility Record Date, the subaccount balance shall be reduced in an amount
proportionate to the reduction in such deposit balance. In the event of a
downward adjustment, the subaccount balance shall not be subsequently increased,
notwithstanding any increase in the deposit balance of the related Deposit
Account. If all funds in such Deposit Account are withdrawn, the related
subaccount balance shall be reduced to zero.
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In the event of a complete liquidation of the Association (and only in
such event), each Eligible Account Holder and Supplemental Eligible Account
Holder shall be entitled to receive a liquidation distribution from the
liquidation account in the amount of the then-current adjusted subaccount
balances for Deposit Accounts then held before any liquidation distribution may
be made to stockholders. No merger, consolidation, bulk purchase of assets with
assumptions of Deposit Accounts and other liabilities, or similar transactions
with another institution the accounts of which are insured by the SAIF, shall be
considered to be a complete liquidation. In such transactions, the liquidation
account shall be assumed by the surviving institution.
The Bank Conversion shall not be deemed to be a complete liquidation of
the Converted Association for purposes of the distribution of the liquidation
account. Upon consummation of the Bank Conversion, the liquidation account, and
all rights and obligations of the Converted Association in connection therewith,
shall be assumed by the National Bank.
The liquidation account shall be maintained by the National Bank, under
the same rules and conditions applicable to the Converted Association,
subsequent to the Bank Conversion for the benefit of Eligible Account Holders
and Supplemental Eligible Account Holders who retain their Deposit Account in
the National Bank.
XIV. RESTRICTIONS ON ACQUISITION OF CONVERTED ASSOCIATION, THE
NATIONAL BANK, OR THE HOLDING COMPANY
Regulations of the OTS limit acquisitions, and offers to acquire,
direct or indirect beneficial ownership of more than 10% of any class of an
equity security of the Converted Association or the Holding Company. In
addition, consistent with the regulations of the OTS, the charter of the
Converted Association shall provide that for a period of five years following
completion of the Conversion: (i) no Person (i.e., no individual, group acting
in concert, corporation, partnership, association, joint stock company, trust,
or unincorporated organization or similar company, syndicate, or any other group
formed for the purpose of acquiring, holding or disposing of securities of an
insured institution) shall directly or indirectly offer to acquire or acquire
beneficial ownership of more than 10% of any class of the Association's equity
securities. Shares beneficially owned in violation of this charter provision
shall not be counted as shares entitled to vote and shall not be voted by any
Person or counted as voting shares in connection with any matter submitted to
the shareholders for a vote. This limitation shall not apply to any offer to
acquire or acquisition of beneficial ownership of more than 10% of the common
stock of the Association by a corporation whose ownership is or will be
substantially the same as the ownership of the Association, provided that the
offer or acquisition is made more than one year following the date of completion
of the Conversion; (ii) shareholders shall not be permitted to cumulate their
votes for elections of directors; and (iii) special meetings of the shareholders
relating to changes in control or amendment of the charter may only be called by
the Boards of Directors.
Upon consummation of the Bank Conversion, no person (i.e., an
individual, a group acting in concert, a corporation, a partnership, an
association, a joint stock company, a trust or any 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 or its
holding company) shall directly, or indirectly, offer to purchase or actually
acquire the beneficial ownership of more than 10% of any class of the Holding
Company's stock without the prior approval of the FRB.
The Holding Company may provide in its certificate of incorporation a
provision that, for a specified period of up to five years following the date of
the completion of the Stock Conversion, no person shall directly or indirectly
offer to acquire or actually acquire the beneficial ownership of more than 10%
of any class of Holding Company stock except with respect to purchases by one or
more Tax-Qualified Employee Stock Benefit Plans of the Holding Company or
Converted Association. The Holding Company may provide in its certificate of
incorporation for such other provisions affecting the acquisition of Holding
Company stock as shall be determined by its Boards of Directors.
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XV. AMENDMENT OR TERMINATION OF PLAN
If necessary or desirable, the Plan may be amended at any time prior to
submission of the Plan and proxy materials to the Members by a two-thirds vote
of the respective Boards of Directors of the Holding Company and the
Association. After submission of the Plan and proxy materials to the Members,
the Plan may be amended by a two-thirds vote of the respective Boards of
Directors of the Holding Company and the Association only with the concurrence
of the OTS. Any amendments to the Plan made after approval by the Members with
the concurrence of the OTS shall not necessitate further approval by the Members
unless otherwise required.
The Plan may be terminated by a two-thirds vote of the Association's
Board of Directors at any time prior to the Special Meeting of Members, and at
any time following such Special Meeting with the concurrence of the OTS. In its
discretion, the Board of Directors of the Association may modify or terminate
the Plan upon the order or with the approval of the OTS and without further
approval by Members. The Plan shall terminate if the sale of all shares of
Conversion Stock is not completed within 24 months of the date of the Special
Meeting. A specific resolution approved by a majority of the Board of Directors
of the Association is required in order for the Association to terminate the
Plan prior to the end of such 24 month period.
XVI. EXPENSES OF THE CONVERSION
The Holding Company and the Association shall use their best efforts to
assure that expenses incurred by them in connection with the Conversion shall be
reasonable.
XVII. TAX RULING
Consummation of the Stock Conversion is expressly conditioned upon
prior receipt of either a ruling of the United States Internal Revenue Service
or an opinion of tax counsel with respect to federal taxation, and either a
ruling of the Illinois taxation authorities or an opinion of tax counsel or
other tax advisor with respect to Illinois taxation, to the effect that
consummation of the Stock Conversion will not be taxable to the Holding Company
or the Association.
XVIII. EXTENSION OF CREDIT FOR PURCHASE OF STOCK
The Association may not knowingly loan funds or otherwise extend credit
to any Person to purchase in the Conversion shares of Holding Company Conversion
Stock.
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FIRST ROBINSON SAVINGS & LOAN, F.A.
Robinson, Illinois
PLAN OF CONVERSION
From Mutual to Stock Form of Organization
and From a Savings Association to a National Bank
I. GENERAL
On November 12, 1996, the Board of Directors of the Association adopted
this Plan of Conversion whereby the Association will convert from a federal
mutual savings and loan association to a federal stock savings association and
then from a federal stock savings association to a national bank. The Plan
includes as part of the conversion, the concurrent formation of a holding
company, to be named in the future. The Plan provides that non-transferable
subscription rights to purchase Holding Company Conversion Stock will be offered
first to Eligible Account Holders of record as of the Eligibility Record Date,
then to the Association's Tax-Qualified Employee Plans, then to Supplemental
Eligible Account Holders of record as of the Supplemental Eligibility Record
Date, then to Other Members, and then to directors, officers and employees.
Concurrently with, at any time during, or promptly after the Subscription
Offering, and on a lowest priority basis, an opportunity to subscribe may also
be offered to the general public in a Direct Community Offering. The price of
the Holding Company Conversion Stock will be based upon an independent appraisal
of the Association and will reflect its estimated pro forma market value, as
converted. It is the desire of the Board of Directors of the Association to
attract new capital to the Association in order to increase its capital, support
future savings growth and accommodate or facilitate future growth opportunities.
The Converted Association is also expected to benefit from its management and
other personnel having a stock ownership in its business, since stock ownership
is viewed as an effective performance incentive and a means of attracting,
retaining and compensating management and other personnel. No change will be
made in the Board of Directors or management as a result of the Conversion.
The conversion of the Association to the Converted Association is
referred to herein as the "Stock Conversion," the conversion of the Converted
Association to the National Bank is referred to herein as the "Bank Conversion"
and the Stock Conversion and the Bank Conversion are referred to herein
collectively as the "Conversion."
II. DEFINITIONS
Acting in Concert: The term "acting in concert" shall have the same
meaning given it in ss.574.2(c) of the Rules and Regulations of the OTS.
Actual Subscription Price: The price per share, determined as provided
in Section VII of the Plan, at which Holding Company Conversion Stock will be
sold in the Subscription Offering.
Affiliate: An "affiliate" of, or a Person "affiliated" with, a
specified Person, is a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by or is under common control with,
the Person specified.
Associate: The term "associate," when used to indicate a relationship
with any Person, means (i) any corporation or organization (other than the
Holding Company, the Association or a majority-owned subsidiary of the Holding
Company) of which such Person is an officer or partner or is, directly or
indirectly, the beneficial
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owner of ten percent or more of any class of equity securities, (ii) any trust
or other estate in which such Person has a substantial beneficial interest or as
to which such Person serves as trustee or in a similar fiduciary capacity, and
(iii) any relative or spouse of such Person, or any relative of such spouse, who
has the same home as such Person or who is a director or officer of the Holding
Company or the Association or any subsidiary of the Association; provided,
however, that any Tax-Qualified or Non-Tax-Qualified Employee Plan shall not be
deemed to be an associate of any director or officer of the Holding Company or
the Association, to the extent provided in Section VI hereof.
Association: First Robinson Savings & Loan, F.A., or such other name as
the institution may adopt.
Bank Conversion: The conversion of the Converted Association from a
federally chartered stock savings association to a national bank ("National
Bank").
BIF: Bank Insurance Fund.
Capital Stock: Any and all authorized shares of stock of the Converted
Association after the Stock Conversion.
Conversion: Except as provided in Section III.F., the term "Conversion"
means the Stock Conversion and the Bank Conversion.
Converted Association: The federally chartered stock savings
institution resulting from the conversion of the Association in accordance with
the Plan.
Deposit Account: Any withdrawable or repurchasable account or deposit
in excess of $50 in the Association.
Direct Community Offering: The offering to the general public of any
unsubscribed shares which may be effected as provided in Section VI hereof.
Eligibility Record Date: The close of business on October 31, 1995.
Eligible Account Holder: Any Person holding a Qualifying Deposit in the
Association on the Eligibility Record Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
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FRB: The Board of Governors of the Federal Reserve System.
Holding Company: A corporation which upon completion of the Stock
Conversion will own all of the outstanding common stock of the Converted
Association, the name of which will be selected in the future, through the
issuance and sale of the Holding Company Conversion Stock under the Plan and the
concurrent acquisition of 100% of the Capital Stock to be issued and sold
pursuant to the Plan in connection with the Stock Conversion, and following the
Bank Conversion, the bank holding company for the National Bank.
Holding Company Conversion Stock: Shares of common stock, par value
$.01 per share, to be issued and sold by the Holding Company as a part of the
Conversion; provided, however, that for purposes of calculating Subscription
Rights and maximum purchase limitations under the Plan, references to the number
of shares of Holding Company Conversion Stock shall refer to the number of
shares offered in the Subscription Offering.
Market Maker: A dealer (i.e., any Person who engages directly or
indirectly as agent, broker or principal in the business of offering, buying,
selling, or otherwise dealing or trading in securities issued by another Person)
who, with respect to a particular security, (i) regularly publishes bona fide,
competitive bid and offer quotations in a recognized inter-dealer quotation
system; or (ii) furnishes bona fide competitive bid and offer quotations on
request; and (iii) is ready, willing, and able to effect transactions in
reasonable quantities at his quoted prices with other brokers or dealers.
Maximum Subscription Price: The price per share of Holding Company
Conversion Stock to be paid initially by subscribers in the Subscription
Offering.
Member: Any Person or entity that qualifies as a member of the
Association pursuant to its mutual charter and bylaws.
National Bank: The national bank resulting from the Bank Conversion.
Non-Tax-Qualified Employee Plan: Any defined benefit plan or defined
contribution plan of the Association or Holding Company, such as an employee
stock ownership plan, stock bonus plan, profit-sharing plan or other plan, which
with its related trust does not meet the requirements to be "qualified" under
Section 401 of the Internal Revenue Code.
OCC: Office of the Comptroller of the Currency, Department of the
Treasury.
OCC Conversion Application: The application submitted to the OCC for
approval of the Bank Conversion.
OTS: Office of Thrift Supervision, Department of the Treasury.
OTS Bank Conversion Application: The application submitted to the OTS
for approval of the Bank Conversion.
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OTS Conversion Application: The application submitted to the OTS on
Form AC.
Officer: An executive officer of the Association or the Holding
Company, including the Chairman of the Board, President, Executive Vice
Presidents, Senior Vice Presidents in charge of principal business functions,
Secretary and Treasurer.
Order Forms: Forms to be used in the Subscription Offering to exercise
Subscription Rights.
Other Members: Members of the Association, other than Eligible Account
Holders, Tax-Qualified Employee Plans or Supplemental Eligible Account Holders,
as of the Voting Record Date.
Person: An individual, a corporation, a partnership, an association, a
joint-stock company, a trust, any unincorporated organization, or a government
or political subdivision thereof, including the formation of the Holding
Company.
Plan: This Plan of Conversion, which provides for the conversion of the
Association from a federally chartered mutual savings association to a federally
chartered stock savings association, and the subsequent conversion of the
Converted Association from a federally chartered stock savings association to a
national bank, including any amendment approved as provided in this Plan.
Public Offering: The offering for sale by the Underwriters to the
general public of any shares of Holding Company Conversion Stock not subscribed
for in the Subscription Offering or the Direct Community Offering.
Public Offering Price: The price per share at which any unsubscribed
shares of Holding Company Conversion Stock are initially offered for sale in the
Public Offering.
Qualifying Deposit: The aggregate balance of each Deposit Account of an
Eligible Account Holder as of the Eligibility Record Date or of a Supplemental
Eligible Account Holder as of the Supplemental Eligibility Record Date.
SAIF: The Savings Association Insurance Fund.
SEC: The Securities and Exchange Commission.
Special Meeting: The Special Meeting of Members called for the purpose
of considering and voting upon the Plan of Conversion.
Stock Conversion: The Conversion of the Association to the Converted
Association.
Subscription Offering: The offering of shares of Holding Company
Conversion Stock for subscription and purchase pursuant to Section VI of the
Plan.
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Subscription Rights: Non-transferable, non-negotiable, personal rights
of the Association's Eligible Account Holders, Tax-Qualified Employee Plans,
Supplemental Eligible Account Holders, Other Members, and directors, Officers
and employees to subscribe for shares of Holding Company Conversion Stock in the
Subscription Offering.
Supplemental Eligibility Record Date: The last day of the calendar
quarter preceding approval of the Plan by the OTS.
Supplemental Eligible Account Holder: Any person holding a Qualifying
Deposit in the Association (other than an officer or director and their
associates) on the Supplemental Eligibility Record Date.
Tax-Qualified Employee Plans: Any defined benefit plan or defined
contribution plan of the Association or Holding Company, such as an employee
stock ownership plan, stock bonus plan, profit-sharing plan or other plan, which
with its related trust meets the requirements to be "qualified" under Section
401 of the Internal Revenue Code.
Underwriters: The investment banking firm or firms agreeing to purchase
Holding Company Conversion Stock in order to offer and sell such Holding Company
Conversion Stock in the Public Offering.
Voting Record Date: The date set by the Board of Directors in
accordance with federal regulations for determining Members eligible to vote at
the Special Meeting.
III. STEPS PRIOR TO SUBMISSION OF THE PLAN TO THE MEMBERS FOR APPROVAL
Prior to submission of the Plan to its Members for approval, the
Association must receive approval from the OTS for consummation of the Stock
Conversion. The following steps must be taken prior to such regulatory approval:
A. The Board of Directors shall adopt the Plan by not less than a
two-thirds vote.
B. The Association shall notify its Members of the adoption of the
Plan by publishing a statement in a newspaper having a general
circulation in each community in which the Association maintains an
office.
C. Copies of the Plan adopted by the Board of Directors shall be
made available for inspection at each office of the Association.
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D. The Association will promptly cause an OTS Conversion
Application, OTS Bank Conversion Application and an OTS Holding Company
Application on Form H-(e)1-S to be prepared and filed with the OTS; an
FRB Holding Company Application on Form Y-3 to be prepared and filed
with the FRB; an OCC Conversion Application to be prepared and filed
with the OCC; and a Registration Statement on Form S-1 to be prepared
and filed with the SEC..
E. Upon filing of the OTS Conversion Application, the Association
shall notify its Members that it has filed the OTS Conversion
Application by posting notice in each of its offices and by publishing
notice in a newspaper having general circulation in each community in
which the Association maintains an office.
F. The Board of Directors of the Association, by majority vote, may,
at any time, and notwithstanding any language in this Plan to the
contrary elect not to proceed with the Bank Conversion, in which event
the FRB Holding Company Application, the OCC Conversion Application and
the OTS Bank Conversion Application may be withdrawn or abandoned. In
the event the Bank Conversion is not pursued, any references to the
Bank Conversion in this Plan shall be disregarded.
IV. CONVERSION PROCEDURE
Upon receipt of all regulatory approvals required for consummation of
the Stock Conversion, the Association shall convene the Special Meeting
scheduled in accordance with the Association's Bylaws to vote on the Plan.
Promptly after receipt of OTS approval of the OTS Conversion Application and at
least 20 days but not more than 45 days prior to the Special Meeting, the
Association will distribute proxy solicitation materials to all voting Members
as of the Voting Record Date established for voting at the Special Meeting.
Proxy materials will also be sent to each beneficial holder of an Individual
Retirement Account where the name of the beneficial holder is disclosed on the
Association's records. The proxy solicitation materials will include a copy of
the Proxy Statement and other documents authorized for use by the regulatory
authorities and may also include a Subscription and Community Prospectus as
provided in Section VI below. The Association will also advise each Eligible
Account Holder and Supplemental Eligible Account Holder not entitled to vote at
the Special Meeting of the proposed Conversion and the scheduled Special Meeting
and provide a postage paid card on which to indicate whether he or she wishes to
receive the Subscription and Community Prospectus, if the Subscription Offering
is not held concurrently with the proxy solicitation of Members for the Special
Meeting.
Pursuant to applicable regulations, an affirmative vote of at least a
majority of the total outstanding votes of the Members will be required for
approval of the Plan. Voting may be in person or by proxy.
By voting in favor of the adoption of the Plan and the Conversion, the
Members will be voting in favor of (i) the Stock Conversion and the adoption by
the Association of the Federal Stock Charter and Bylaws in the forms attached as
Exhibits A and B to this Plan and (ii) the subsequent Bank Conversion and the
adoption by the Converted Association of the national bank articles of
association and bylaws in the forms attached as
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Exhibits C and D to this Plan. Failure to pursue or receive regulatory approval
for the Bank Conversion shall have no effect on the vote with respect to the
Stock Conversion.
The Holding Company Conversion Stock will be offered for sale in the
Subscription Offering at the Maximum Subscription Price to Eligible Account
Holders, Tax-Qualified Employee Plans, Supplemental Eligible Account Holders,
Other Members and directors, Officers and employees of the Association, prior to
or within 45 days after the date of the Special Meeting. The Association may,
either concurrently with, at any time during, or promptly after the Subscription
Offering, also offer the Holding Company Conversion Stock to and accept
subscriptions from other Persons in a Direct Community Offering; provided that
the Association's Eligible Account Holders, Tax-Qualified Employee Plans,
Supplemental Eligible Account Holders, Other Members and directors, Officers and
employees shall have the priority rights to subscribe for Holding Company
Conversion Stock set forth in Section VI of this Plan. However, the Holding
Company and the Association may delay commencing the Subscription Offering
beyond such 45 day period in the event there exist unforeseen material adverse
market or financial conditions. If the Subscription Offering commences prior to
the Special Meeting, subscriptions will be accepted subject to the approval of
the Plan at the Special Meeting.
The period for the Subscription Offering and Direct Community Offering
will be not less than 20 days nor more than 45 days unless extended by the
Association. Upon completion of the Subscription Offering and the Direct
Community Offering, if any, any unsubscribed shares of Holding Company
Conversion Stock will, if feasible, be sold to the Underwriters for resale to
the general public in the Public Offering. If for any reason the Public Offering
of all shares not sold in the Subscription Offering and Direct Community
Offering cannot be effected, the Holding Company and the Association will use
their best efforts to obtain other purchasers, subject to OTS approval.
Completion of the sale of all shares of Holding Company Conversion Stock not
sold in the Subscription Offering and Direct Community Offering is required
within 45 days after termination of the Subscription Offering, subject to
extension of such 45 day period by the Holding Company and the Association with
the approval of the OTS. The Holding Company and the Association may jointly
seek one or more extensions of such 45 day period if necessary to complete the
sale of all shares of Holding Company Conversion Stock. In connection with such
extensions, subscribers and other purchasers will be permitted to increase,
decrease or rescind their subscriptions or purchase orders to the extent
required by the OTS in approving the extensions. Completion of the sale of all
shares of Holding Company Conversion Stock is required within 24 months after
the date of the Special Meeting.
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V. CONSUMMATION OF CONVERSION
A. Consummation of the Stock Conversion.
The date of consummation of the Stock Conversion will be the
effective date of the amendment of the Association's federal mutual
charter to read in the form of a federal stock charter, which shall be
the date of the sale of the Holding Company Conversion Stock. After
receipt of all orders for Holding Company Conversion Stock, and
concurrently with the execution thereof, the amendment of the
Association's federal mutual charter and bylaws to authorize the
issuance of shares of Capital Stock and to conform to the requirements
of a federal capital stock savings association will be declared
effective by the OTS, the amended bylaws approved by the Members will
become effective, and the Association will thereby be and become the
Converted Association. At such time, the Holding Company Conversion
Stock will be issued and sold by the Holding Company, the Capital Stock
to be issued in the Conversion will be issued and sold to the Holding
Company, and the Converted Association will become a wholly owned
subsidiary of the Holding Company. The Converted Association will issue
to the Holding Company 100% of its common stock, representing all of
the shares of Capital Stock to be issued by the Converted Association
in the Stock Conversion, and the Holding Company will make payment to
the Converted Association of that portion of the aggregate net proceeds
realized by the Holding Company from the sale of the Holding Company
Conversion Stock under the Plan as is necessary to increase the
Converted Association's tangible capital to at least 10% of its
adjusted total assets, or such other portion of the aggregate net
proceeds as may be authorized or required by the OTS.
B. Consummation of the Bank Conversion.
The Bank Conversion shall be deemed to occur and shall be
effective upon completion of all actions necessary or appropriate under
applicable federal statutes and regulations and the policies of the
FRB, the OCC and the OTS to complete the conversion of the Converted
Association to a national bank, including without limitation, the
approval of the Bank Conversion by the Holding Company, as the sole
shareholder of the Converted Association, whereupon the Converted
Association will thereby be and become the National Bank. The Bank
Conversion shall be consummated as soon as reasonably practicable
following the consummation of the Stock Conversion as described in
Section VI herein.
VI. STOCK OFFERING
A. Total Number of Shares and Purchase Price of Conversion Stock
The total number of shares of Holding Company Conversion Stock to be
issued and sold in the Conversion will be determined by the Boards of Directors
of the Association and the Holding Company prior to the commencement of the
Subscription Offering, subject to adjustment if necessitated by market or
financial conditions prior to consummation of the Conversion. The total number
of shares of Holding Company Conversion Stock shall also be subject to increase
in connection with any oversubscriptions in the Subscription Offering or Direct
Community Offering.
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The aggregate price for which all shares of Holding Company Conversion
Stock will be sold will be based on an independent appraisal of the estimated
total pro forma market value of the Holding Company and the Converted
Association. Such appraisal shall be performed in accordance with OTS guidelines
and will be updated as appropriate under or required by applicable regulations.
The appraisal will be made by an independent investment banking or
financial consulting firm experienced in the area of thrift institution
appraisals. The appraisal will include, among other things, an analysis of the
historical and pro forma operating results and net worth of the Converted
Association in accordance with applicable regulations.
Based upon the independent appraisal, the Board of Directors of the
Holding Company and the Association will jointly fix the Maximum Subscription
Price.
If, following completion of the Subscription Offering and Direct
Community Offering, a Public Offering is effected, the Actual Subscription Price
for each share of Holding Company Conversion Stock will be the same as the
Public Offering Price at which unsubscribed shares of Holding Company Conversion
Stock are initially offered for sale by the Underwriters in the Public Offering.
The Public Offering Price will be a price negotiated by the Holding Company and
the Association with the Underwriters, not in excess of the Maximum Subscription
Price. The price paid by the Underwriters for each unsubscribed share will be
the Public Offering Price less a negotiated underwriting discount.
If, upon completion of the Subscription Offering and Direct Community
Offering, all of the Holding Company Conversion Stock is subscribed for or only
a limited number of shares remain unsubscribed for, or if a Public Offering
otherwise cannot be effected, the Actual Subscription Price for each share of
Holding Company Conversion Stock will be determined by dividing the estimated
appraised aggregate pro forma market value of the Holding Company and the
Converted Association, based on the independent appraisal as updated upon
completion of the Subscription Offering or other sale of all of the Holding
Company Conversion Stock, by the total number of shares of Holding Company
Conversion Stock to be issued and sold by the Holding Company upon Conversion.
Such appraisal will then be expressed in terms of a specific aggregate dollar
amount rather than as a range.
B. Subscription Rights
Non-transferable Subscription Rights to purchase shares will be issued
without payment therefor to Eligible Account Holders, Tax-Qualified Employee
Plans, Supplemental Eligible Account Holders, Other Members and directors,
Officers and employees of the Association as set forth below.
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1. Preference Category No. 1: Eligible Account Holders
Each Eligible Account Holder shall receive non-transferable
Subscription Rights to subscribe for shares of Holding Company
Conversion Stock in an amount equal to the greater of $65,000 of
Conversion Stock offered in the Conversion (exclusive of any additional
shares offered pursuant to an increase in the appraisal range not
requiring a resolicitation of subscribers), one-tenth of one percent
(.10%) of the total offering of shares, or 15 times the product
(rounded down to the next whole number) obtained by multiplying the
total number of shares of common stock to be issued by a fraction of
which the numerator is the amount of the qualifying deposit of the
Eligible Account Holder and the denominator is the total amount of
qualifying deposits of all Eligible Account Holders in the converting
Association in each case on the Eligibility Record Date. If sufficient
shares are not available, shares shall be allocated first to permit
each subscribing Eligible Account Holder to purchase, to the extent
possible, 100 shares, and thereafter among each subscribing Eligible
Account Holder pro rata in the same proportion that his Qualifying
Deposit bears to the total Qualifying Deposits of all subscribing
Eligible Account Holders whose subscriptions remain unsatisfied.
Non-transferable Subscription Rights to purchase Holding
Company Conversion Stock received by directors and Officers of the
Association and their Associates, based on their increased deposits in
the Association in the one year period preceding the Eligibility Record
Date, shall be subordinated to all other subscriptions involving the
exercise of non-transferable Subscription Rights of Eligible Account
Holders.
2. Preference Category No. 2: Tax-Qualified Employee Plans
Each Tax-Qualified Employee Plan shall be entitled to receive
non-transferable Subscription Rights to purchase up to 10% of the
shares of Holding Company Conversion Stock, provided that singly or in
the aggregate such plans (other than that portion of such plans which
is self-directed) shall not purchase more than 10% of the shares of the
Holding Company Conversion Stock. Subscription Rights received pursuant
to this Category shall be subordinated to all rights received by
Eligible Account Holders to purchase shares pursuant to Category No. 1;
provided, however, that notwithstanding any other provision of this
Plan to the contrary, the Tax-Qualified Employee Plans shall have a
first priority Subscription Right to the extent that the total number
of shares of Holding Company Conversion Stock sold in the Conversion
exceeds the maximum of the appraisal range as set forth in the
subscription prospectus.
3. Preference Category No. 3: Supplemental Eligible Account
Holders
Each Supplemental Eligible Account Holder shall receive
non-transferable Subscription Rights to subscribe for shares of Holding
Company Conversion Stock in an amount equal to the greater of $65,000
of Conversion Stock offered in the Conversion (exclusive of any
additional shares offered pursuant to an increase in the appraisal
range not requiring a resolicitation of subscribers), or one-tenth of
one percent (.10%) of the total offering of shares, or 15 times the
product (rounded down to the next whole number) obtained by multiplying
the total number of shares of common stock to be issued by a fraction
of which the numerator is the amount of the qualifying deposit of the
Supplemental Eligible Account Holder and the denominator is the total
amount of qualifying deposits of all Supplemental Eligible Account
Holders in the converting Association in each case on the Supplemental
Eligibility Record Date.
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Subscription Rights received pursuant to this category shall
be subordinated to all Subscription Rights received by Eligible Account
Holders and Tax-Qualified Employee Plans pursuant to Category Nos. 1
and 2 above.
Any non-transferable Subscription Rights to purchase shares
received by an Eligible Account Holder in accordance with Category No.
1 shall reduce to the extent thereof the Subscription Rights to be
distributed to such person pursuant to this Category.
In the event of an oversubscription for shares under the
provisions of this subparagraph, the shares available shall be
allocated first to permit each subscribing Supplemental Eligible
Account Holder to purchase, to the extent possible, a number of shares
sufficient to make his total allocation (including the number of
shares, if any, allocated in accordance with Category No. 1) equal to
100 shares, and thereafter among each subscribing Supplemental Eligible
Account Holder pro rata in the same proportion that his Qualifying
Deposit bears to the total Qualifying Deposits of all subscribing
Supplemental Eligible Account Holders whose subscriptions remain
unsatisfied.
4. Preference Category No. 4: Other Members
Each Other Member shall receive non-transferable Subscription
Rights to subscribe for shares of Holding Company Conversion Stock
remaining after satisfying the subscriptions provided for under
Category Nos. 1 through 3 above, subject to the following conditions:
a. Each Other Member shall be entitled to subscribe
for an amount of shares equal to the greater of $65,000 of
Holding Company Conversion Stock offered in the Conversion
(exclusive of any additional shares offered pursuant to an
increase in the appraisal range not requiring a resolicitation
of subscribers) or one-tenth of one percent (.10%) of the
total offering of shares of common stock in the Conversion, to
the extent that Holding Company Conversion Stock is available.
b. In the event of an oversubscription for shares
under the provisions of this subparagraph, the shares
available shall be allocated among the subscribing Other
Members pro rata in the same proportion that his number of
votes on the Voting Record Date bears to the total number of
votes on the Voting Record Date of all subscribing Other
Members on such date. Such number of votes shall be determined
based on the Association's mutual charter and bylaws in effect
on the date of approval by members of this Plan of Conversion.
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5. Preference Category No. 5: Directors, Officers
and Employees
Each director, Officer and employee of the Association as of
the date of the commencement of the Subscription Offering shall be
entitled to receive non-transferable Subscription Rights to purchase
shares of the Holding Company Conversion Stock to the extent that
shares are available after satisfying subscriptions under Category Nos.
1 through 4 above. The shares which may be purchased under this
Category are subject to the following conditions:
a. The total number of shares which may be purchased
under this Category may not exceed 24% of the number of shares
of Holding Company Conversion Stock.
b. The maximum amount of shares which may be
purchased under this Category by any Person is $65,000 of
Holding Company Conversion Stock offered in the Conversion
(exclusive of any additional shares offered pursuant to an
increase in the appraisal range not requiring a resolicitation
of subscribers) of Conversion Stock. In the event of an
oversubscription for shares under the provisions of this
subparagraph, the shares available shall be allocated pro rata
among all subscribers in this Category.
C. Direct Community Offering and Public Offering
1. Any shares of Holding Company Conversion Stock not
subscribed for in the Subscription Offering may be offered for sale in
a Direct Community Offering. This will involve an offering of all
unsubscribed shares directly to the general public. The Direct
Community Offering, if any, shall be for a period of not less than 20
days nor more than 45 days unless extended by the Holding Company and
the Association, and shall commence concurrently with, during or
promptly after the Subscription Offering. The purchase price per share
to the general public in a Direct Community Offering shall be the same
as the Actual Subscription Price. The Holding Company and the
Association may use an investment banking firm or firms on a best
efforts basis to sell the unsubscribed shares in the Subscription and
Direct Community Offering. The Holding Company and the Association may
pay a commission or other fee to such investment banking firm or firms
as to the shares sold by such firm or firms in the Subscription and
Direct Community Offering and may also reimburse such firm or firms for
expenses incurred in connection with the sale. The Holding Company
Conversion Stock will be offered and sold in the Direct Community
Offering, in accordance with OTS regulations, so as to achieve the
widest distribution of the Holding Company Conversion Stock. No person,
by himself or herself, or with an Associate or group of Persons acting
in concert, may subscribe for or purchase more than $65,000 of Holding
Company Conversion Stock offered in the Direct Community Offering
(exclusive of any additional shares offered pursuant to an increase in
the appraisal range not requiring a resolicitation of subscribers). The
Holding Company and the Association may limit total subscriptions under
this Section VI.C.1 so as to assure that the number of shares available
for the Public Offering may be up to a specified percentage of the
number of shares of Holding Company Conversion Stock. Finally, the
Holding Company and the Association may reserve shares offered in the
Community Offering for sales to institutional investors.
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In the event of an oversubscription for shares in the
Community Offering, shares may be allocated (to the extent shares
remain available) first to cover any reservation of shares for a public
offering or institutional orders, next to cover orders of natural
persons residing in Crawford County, Illinois, then to cover the orders
of any other person subscribing for shares in the Community Offering so
that each such person may receive 1,000 shares, and thereafter, on a
pro rata basis to such persons based on the amount of their respective
subscriptions.
The Holding Company and the Association, in their sole
discretion, may reject subscriptions, in whole or in part, received
from any Person under this Section VI.C.
2. Any shares of Holding Company Conversion Stock not sold in
the Subscription Offering or in the Direct Community Offering, if any,
shall then be sold to the Underwriters for resale to the general public
at the Public Offering Price in the Public Offering. It is expected
that the Public Offering, if any, will commence as soon as practicable
after termination of the Subscription Offering and the Direct Community
Offering. The Public Offering shall be completed within 45 days after
the termination of the Subscription Offering, unless such period is
extended as provided in Section IV hereof. The Public Offering Price
and the underwriting discount shall be determined as provided in
Section VI.A hereof and set forth in the underwriting agreement between
the Holding Company and the Association and the Underwriters. Such
underwriting agreement shall be filed with the OTS and the SEC.
3. If for any reason a Public Offering of unsubscribed shares
of Holding Company Conversion Stock cannot be effected and any shares
remain unsold after the Subscription Offering and the Direct Community
Offering, if any, the Board of Directors of the Holding Company and the
Association will seek to make other arrangements for the sale of the
remaining shares. Such other arrangements will be subject to the
approval of the OTS and to compliance with applicable securities laws.
D. Additional Limitations Upon Purchases of Shares of Holding Company
Conversion Stock
The following additional limitations shall be imposed on all purchases
of Holding Company Conversion Stock in the Conversion:
1. No Person, by himself or herself, or with an Associate or
group of Persons acting in concert, may subscribe for or purchase in
the Conversion a number of shares of Holding Company Conversion Stock
which exceeds $100,000 of Holding Company Conversion Stock offered in
the Conversion based on the appraisal range contained in the
Association's subscription prospectus (exclusive of any additional
shares that may be offered pursuant to an increase in such appraisal
range not requiring a resolicitation of subscribers). For purposes of
this paragraph, an Associate of a Person does not include a
Tax-Qualified or Non-Tax Qualified Employee Plan in which the person
has a substantial beneficial interest or serves as a trustee or in a
similar fiduciary capacity. Moreover, for purposes of this paragraph,
shares held by one or more Tax-Qualified or Non-Tax Qualified Employee
Plans attributed to a Person shall not be aggregated with shares
purchased directly by or otherwise attributable to that Person.
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2. Directors and Officers and their Associates may not
purchase in all categories in the Conversion an aggregate of more than
34% of the Holding Company Conversion Stock. For purposes of this
paragraph, an Associate of a Person does not include any Tax-Qualified
Employee Plan. Moreover, any shares attributable to the Officers and
directors and their Associates, but held by one or more Tax-Qualified
Employee Plans shall not be included in calculating the number of
shares which may be purchased under the limitation in this paragraph.
3. The minimum number of shares of Holding Company Conversion
Stock that may be purchased by any Person in the Conversion is 25
shares, provided sufficient shares are available.
4. The Board of Directors of the Holding Company and the
Association may, in their sole discretion, increase the maximum
purchase limitation referred to in subparagraph 1. herein up to 9.99%,
provided that orders for shares exceeding 5% of the shares being
offered in the Subscription Offering shall not exceed, in the
aggregate, 10% of the shares being offered in the Subscription
Offering. Requests to purchase additional shares of Holding Company
Conversion Stock under this provision will be allocated by the Boards
of Directors on a pro rata basis giving priority in accordance with the
priority rights set forth in this Section VI.
Depending upon market and financial conditions, the Board of Directors
of the Holding Company and the Association, with the approval of the OTS and
without further approval of the Members, may increase or decrease any of the
above purchase limitations.
For purposes of this Section VI, the directors of the Association shall
not be deemed to be Associates or a group acting in concert solely as a result
of their serving in such capacities.
Each Person purchasing the Holding Company Conversion Stock in the
Conversion shall be deemed to confirm that such purchase does not conflict with
the above purchase limitations.
E. Restrictions and Other Characteristics of Holding Company Conversion
Stock Being Sold
1. Transferability. Holding Company Conversion Stock purchased
by Persons other than directors and Officers of the Holding Company or
the Association will be transferable without restriction. Shares
purchased by directors or Officers shall not be sold or otherwise
disposed of for value for a period of one year from the date of
Conversion, except for any disposition of such shares (i) following the
death of the original purchaser, or (ii) resulting from an exchange of
securities in a merger or acquisition approved by the applicable
regulatory authorities. Any transfers that could result in a change of
control of the Holding Company or the Association or result in the
ownership by any Person or group acting in concert of more than 10% of
any class of the Association's or the Holding Company's equity
securities are subject to the prior approval of the OTS.
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The certificates representing shares of Conversion Stock
issued to directors and Officers shall bear a legend giving appropriate
notice of the one year holding period restriction. Appropriate
instructions shall be given to the transfer agent for such stock with
respect to the applicable restrictions relating to the transfer of
restricted stock. Any shares of common stock of the Association
subsequently issued as a stock dividend, stock split, or otherwise,
with respect to any such restricted stock, shall be subject to the same
holding period restrictions for Association directors and Officers as
may be then applicable to such restricted stock.
No director or Officer of the Holding Company or the
Association, or Associate of such a director or Officer, shall purchase
any outstanding shares of capital stock of the Holding Company for a
period of three years following the Conversion without the prior
written approval of the OTS, except through a broker or dealer
registered with the SEC or in a "negotiated transaction" involving more
than one percent of the then-outstanding shares of common stock of the
Holding Company. As used herein, the term "negotiated transaction"
means a transaction in which the securities are offered and the terms
and arrangements relating to any sale are arrived at through direct
communications between the seller or any Person acting on its behalf
and the purchaser or his investment representative. The term
"investment representative" shall mean a professional investment
advisor acting as agent for the purchaser and independent of the seller
and not acting on behalf of the seller in connection with the
transaction.
2. Repurchase and Dividend Rights. For a period of three years
following Conversion, the Converted Association shall not repurchase
any shares of its capital stock, except in the case of an offer to
repurchase on a pro rata basis made to all holders of capital stock of
the Converted Association. Any such offer shall be subject to the prior
approval of the OTS. A repurchase of qualifying shares of a director
shall not be deemed to be a repurchase for purposes of this Section
VI.E.2.
Present regulations also provide that the Converted
Association may not declare or pay a cash dividend on or repurchase any
of its stock (i) if the result thereof would be to reduce the
regulatory capital of the Converted Association below the amount
required for the liquidation account to be established pursuant to
Section XII hereof, and (ii) except in compliance with requirements of
Section 563.134 of the Rules and Regulations of the OTS.
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The above limitations are subject to Section 563b.3 (g)(3) of
the Rules and Regulations of the OTS, which generally provides that the
Converted Association may repurchase its capital stock provided (i) no
repurchases occur within one year following conversion, (ii)
repurchases during the second and third year after conversion are part
of an open market stock repurchase program that does not allow for a
repurchase of more than 5% of the Converted Association's outstanding
capital stock during a twelve-month period without OTS approval, (iii)
the repurchases do not cause the Association to become
undercapitalized, and (iv) the Converted Association provides notice to
the OTS at least 10 days prior to the commencement of a repurchase
program and the OTS does not object. In addition, the above limitations
shall not preclude payments of dividends or repurchases of capital
stock by the Converted Association in the event applicable federal
regulatory limitations are liberalized subsequent to OTS approval of
the Plan. Such restrictions and limitations shall not apply following
consummation of the Bank Conversion, unless the OTS approval of the
Bank Conversion otherwise requires.
3. Voting Rights. After the Conversion, holders of deposit
accounts will not have voting rights in the Converted Association or
the Holding Company. Exclusive voting rights as to the Association will
be vested with the Holding Company, as the sole stockholder of the
Association; voting rights as to the Holding Company will be held
exclusively by its stockholders.
F. Exercise of Subscription Rights; Order Forms
1. If the Subscription Offering occurs concurrently with the
solicitation of proxies for the Special Meeting, the subscription
prospectus and Order Form may be sent to each Eligible Account Holder,
Tax-Qualified Employee Plan, Supplemental Eligible Account Holder,
Other Member, and director, Officer and employee at their last known
address as shown on the records of the Association. However, the
Association may, and if the Subscription Offering commences after the
Special Meeting the Association shall, furnish a subscription
prospectus and Order Form only to Eligible Account Holders,
Tax-Qualified Employee Plans, Supplemental Eligible Account Holders,
Other Members, and directors, Officers and employees who have returned
to the Association by a specified date prior to the commencement of the
Subscription Offering a post card or other written communication
requesting a subscription prospectus and Order Form. In such event, the
Association shall provide a postage-paid post card for this purpose and
make appropriate disclosure in its proxy statement for the solicitation
of proxies to be voted at the Special Meeting and/or letter sent in
lieu of the proxy statement to those Eligible Account Holders,
Tax-Qualified Employee Plans or Supplemental Eligible Account Holders
who are not Members on the Voting Record Date.
2. Each Order Form will be preceded or accompanied by a
subscription prospectus describing the Converted Association and the
shares of Holding Company Conversion Stock being offered for
subscription and containing all other information required by the OTS
or the SEC or necessary to enable Persons to make informed investment
decisions regarding the purchase of Holding Company Conversion Stock.
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3. The Order Forms (or accompanying instructions) used for the
Subscription Offering will contain, among other things, the following:
(i) A clear and intelligible explanation of the
Subscription Rights granted under the Plan to Eligible Account
Holders, Tax-Qualified Employee Plans, Supplemental Eligible
Account Holders, Other Members, and directors, Officers and
employees;
(ii) A specified expiration date by which Order Forms
must be returned to and actually received by the Association
or its representative for purposes of exercising Subscription
Rights, which date will be not less than 20 days after the
Order Forms are mailed by the Association;
(iii) The Maximum Subscription Price to be paid for each
share subscribed for when the Order Form is returned;
(iv) A statement that 25 shares is the minimum number of
shares of Conversion Stock that may be subscribed for under
the Plan;
(v) A specifically designated blank space for indicating
the number of shares being subscribed for;
(vi) A set of detailed instructions as to how to complete
the Order Form including a statement as to the available
alternative methods of payment for the shares being subscribed
for;
(vii) Specifically designated blank spaces for dating and
signing the Order Form;
(viii) An acknowledgement that the subscriber has
received the subscription prospectus;
(ix) A statement of the consequences of failing to
properly complete and return the Order Form, including a
statement that the Subscription Rights will expire on the
expiration date specified on the Order Form unless such
expiration date is extended by the Holding Company and the
Association, and that the Subscription Rights may be exercised
only by delivering the Order Form, properly completed and
executed, to the Association or its representative by the
expiration date, together with required payment of the Maximum
Subscription Price for all shares of Holding Company
Conversion Stock subscribed for;
(x) A statement that the Subscription Rights are
non-transferable and that all shares of Holding Company
Conversion Stock subscribed for upon exercise of Subscription
Rights must be purchased on behalf of the Person exercising
the Subscription Rights for his own account; and
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(xi) A statement that, after receipt by the Association
or its representative, a subscription may not be modified,
withdrawn or canceled without the consent of the Association.
G. Method of Payment
Payment for all shares of Holding Company Conversion Stock subscribed
for, computed on the basis of the Maximum Subscription Price, must accompany all
completed Order Forms. Payment may be made in cash (if presented in Person), by
check, or, if the subscriber has a Deposit Account in the Association (including
a certificate of deposit), the subscriber may authorize the Association to
charge the subscriber's account.
If a subscriber authorizes the Association to charge his or her
account, the funds will continue to earn interest, but may not be used by the
subscriber until all Holding Company Conversion Stock has been sold or the Plan
is terminated, whichever is earlier. The Association will allow subscribers to
purchase shares by withdrawing funds from certificate accounts without the
assessment of early withdrawal penalties with the exception of prepaid interest
in the form of promotional gifts. 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 rate paid
on the certificate will continue until the certificate reaches maturity. This
waiver of the early withdrawal penalty is applicable only to withdrawals made in
connection with the purchase of Holding Company Conversion Stock under the Plan.
Interest will also be paid, at not less than the then-current passbook rate, on
all orders paid in cash, by check or money order, from the date payment is
received until consummation of the Stock Conversion. Payments made in cash, by
check or money order will be placed by the Association in an escrow or other
account established specifically for this purpose.
In the event of an unfilled amount of any subscription order, the
Converted Association will make an appropriate refund or cancel an appropriate
portion of the related withdrawal authorization, after consummation of the Stock
Conversion, including any difference between the Maximum Subscription Price and
the Actual Subscription Price (unless subscribers are afforded the right to
apply such difference to the purchase of additional whole shares). If for any
reason the Stock Conversion is not consummated, purchasers will have refunded to
them all payments made and all withdrawal authorizations will be canceled in the
case of subscription payments authorized from accounts at the Association.
If any Tax-Qualified Employee Plans or Non-Tax-Qualified Employee Plans
subscribe for shares during the Subscription Offering, such plans will not be
required to pay for the shares subscribed for at the time they subscribe, but
may pay for such shares of Holding Company Conversion Stock subscribed for upon
consummation of the Stock Conversion. In the event that, after the completion of
the Subscription Offering, the amount of shares to be issued is increased above
the maximum of the appraisal range included in the prospectus, the Tax Qualified
and Non-Tax Qualified Employee Plans shall be entitled to increase their
subscriptions by a percentage equal to the percentage increase in the amount of
shares to be issued above the maximum of the appraisal range provided that such
subscriptions shall continue to be subject to applicable purchase limits and
stock allocation procedures.
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H. Undelivered, Defective or Late Order Forms; Insufficient Payment
The Boards of Directors of the Holding Company and the Association
shall have the absolute right, in their sole discretion, to reject any Order
Form, including but not limited to, any Order Forms which (i) are not delivered
or are returned by the United States Postal Service (or the addressee cannot be
located); (ii) are not received back by the Association or its representative,
or are received after the termination date specified thereon; (iii) are
defectively completed or executed; (iv) are not accompanied by the total
required payment for the shares of Holding Company Conversion Stock subscribed
for (including cases in which the subscribers' Deposit Accounts or certificate
accounts are insufficient to cover the authorized withdrawal for the required
payment); or (v) are submitted by or on behalf of a Person whose representations
the Boards of Directors of the Holding Company and the Association believe to be
false or who they otherwise believe, either alone or acting in concert with
others, is violating, evading or circumventing, or intends to violate, evade or
circumvent, the terms and conditions of this Plan. In such event, the
Subscription Rights of the Person to whom such rights have been granted will not
be honored and will be treated as though such Person failed to return the
completed Order Form within the time period specified therein. The Association
may, but will not be required to, waive any irregularity relating to any Order
Form or require submission of corrected Order Forms or the remittance of full
payment for subscribed shares by such date as the Association may specify. The
interpretations of the Holding Company and the Association of the terms and
conditions of this Plan and of the proper completion of the Order Form will be
final, subject to the authority of the OTS.
I. Member in Non-Qualified States or in Foreign Countries
The Holding Company and the Association will make reasonable efforts to
comply with the securities laws of all states in the United States in which
Persons entitled to subscribe for Holding Company Conversion Stock pursuant to
the Plan reside. However, no shares will be offered or sold under the Plan of
Conversion to any such Person who (1) resides in a foreign country or (2)
resides in a state of the United States in which a small number of Persons
otherwise eligible to subscribe for shares under the Plan reside or as to which
the Holding Company and the Association determine that compliance with the
securities laws of such state would be impracticable for reasons of cost or
otherwise, including, but not limited to, a requirement that the Holding Company
and the Association or any of its officers, directors or employees register,
under the securities laws of such state, as a broker, dealer, salesman or agent.
No payments will be made in lieu of the granting of Subscription Rights to any
such Person.
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VI. FEDERAL STOCK CHARTER AND BYLAWS
A. As part of the Conversion, the Association will take all appropriate
steps to amend its charter to read in the form of federal stock savings
institution charter as prescribed by the OTS. A copy of the proposed stock
charter is available upon request. By their approval of the Plan, the Members of
the Association will thereby approve and adopt such charter.
B. The Association will also take appropriate steps to amend its bylaws
to read in the form prescribed by the OTS for a federal stock savings
institution. A copy of the proposed federal stock bylaws is available upon
request.
C. The effective date of the adoption of the Association's federal
stock charter and bylaws shall be the date of the issuance and sale of the
Holding Company Conversion Stock as specified by the OTS.
D. As part of the Bank Conversion, a national bank articles of
association and bylaws will be adopted to allow the National Bank to operate as
a national bank. By approving the Plan, the Members of the Association will
thereby approve such articles of association and bylaws. Prior to completion of
the Bank Conversion, the articles of association and bylaws may be amended in
accordance with the provisions and limitations for amending the Plan under
Section XIV below. The effective date of the articles of association and bylaws
of the National Bank shall be the date of the consummation of the Bank
Conversion.
VII. HOLDING COMPANY CERTIFICATE OF INCORPORATION
A copy of the proposed certificate of incorporation of the Holding
Company will be made available from the Association upon request.
VIII. DIRECTORS OF THE CONVERTED ASSOCIATION AND THE NATIONAL BANK
Each Person serving as a member of the Board of Directors of the
Association at the time of the Stock Conversion will thereupon become a director
of the Converted Association. If the Bank Conversion is consummated, each person
serving as a member of the Board of Directors of the Converted Association at
the time of the Bank Conversion will become a director of the National Bank.
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IX. STOCK OPTION AND INCENTIVE PLAN AND RECOGNITION AND RETENTION PLAN
In order to provide an incentive for directors, Officers and employees
of the Holding Company and its subsidiaries (including the Converted
Association), the Boards of Director of the Holding Company intends to adopt,
subject to shareholder approval, a stock option and incentive plan and a
recognition and retention plan as soon as permitted by applicable regulation.
X. CONTRIBUTIONS TO TAX-QUALIFIED EMPLOYEE PLANS
The Converted Association and the Holding Company may in their
discretion make scheduled contributions to any Tax-Qualified Employee Plans,
provided that any such contributions which are for the acquisition of Holding
Company Conversion Stock, or the repayment of debt incurred for such an
acquisition, do not cause the Converted Association to fail to meet its
regulatory capital requirements.
XI. SECURITIES REGISTRATION AND MARKET MAKING
Promptly following the Stock Conversion, the Holding Company will
register its stock with the SEC pursuant to the Exchange Act. In connection with
the registration, the Holding Company will undertake not to deregister such
stock, without the approval of the OTS, for a period of three years thereafter.
If the Bank Conversion is consummated, the National Bank will become
subject to the sole jurisdiction of the OCC, and the Holding Company, which will
undertake not to deregister its stock, without the approval of the OCC for a
period of three years after the Stock Conversion, to the sole jurisdiction of
the FRB.
21
<PAGE>
XII. STATUS OF SAVINGS ACCOUNTS AND LOANS SUBSEQUENT TO CONVERSION
Each Deposit Account holder shall retain, without payment, a
withdrawable Deposit Account or Accounts in the Converted Association, equal in
amount to the withdrawable value of such account holder's Deposit Account or
Accounts prior to the Stock Conversion. Each Person holding a Savings Account at
the Converted Association as of immediately prior to consummation of the Bank
Conversion as set forth in Section V.B. herein shall receive, without payment, a
withdrawable Savings Account or Savings Accounts in the National Bank equal in
dollar amount and on the same terms and conditions as in effect as of
immediately prior to the consummation of the Bank Conversion. All Deposit
Accounts will continue to be insured by the FDIC up to the applicable limits of
insurance coverage, and shall be subject to the same terms and conditions
(except as to voting and liquidation rights) as such Deposit Account in the
Association at the time of the Conversion. All loans shall retain the same
status after Conversion as these loans had prior to Conversion.
XIII. LIQUIDATION ACCOUNT
For purposes of granting to Eligible Account Holders and Supplemental
Eligible Account Holders who continue to maintain Deposit Accounts at the
Converted Association a priority in the event of a complete liquidation of the
Converted Association, the Converted Association will, at the time of
Conversion, establish a liquidation account in an amount equal to the net worth
of the Association as shown on its latest statement of financial condition
contained in the final prospectus used in connection with the Conversion. The
creation and maintenance of the liquidation account will not operate to restrict
the use or application of any of the regulatory capital accounts of the
Converted Association; provided, however, that such regulatory capital accounts
will not be voluntarily reduced below the required dollar amount of the
liquidation account. Each Eligible Account Holder and Supplemental Eligible
Account Holder shall, with respect to the Deposit Account held, have a related
inchoate interest in a portion of the liquidation account balance ("subaccount
balance").
The initial subaccount balance of a Deposit Account held by an Eligible
Account Holder or Supplemental Eligible Account Holder shall be determined by
multiplying the opening balance in the liquidation account by a fraction of
which the numerator is the amount of the Qualifying Deposit in the Deposit
Account on the Eligibility Record Date or the Supplemental Eligibility Record
Date and the denominator is the total amount of the Qualifying Deposits of all
Eligible Account Holders and Supplemental Eligible Account Holders on such
record dates in the Association. Such initial subaccount balance shall not be
increased, and it shall be subject to downward adjustment as provided below.
If the deposit balance in any Deposit Account of an Eligible Account
Holder or Supplemental Eligible Account Holder at the close of business on any
annual closing date subsequent to the record date is less than the lesser of (i)
the deposit balance in such Deposit Account at the close of business on any
other annual closing date subsequent to the Eligibility Record Date or the
Supplemental Eligibility Record Date or (ii) the amount of the Qualifying
Deposit in such Deposit Account on the Eligibility Record Date or Supplemental
Eligibility Record Date, the subaccount balance shall be reduced in an amount
proportionate to the reduction in such deposit balance. In the event of a
downward adjustment, the subaccount balance shall not be subsequently increased,
notwithstanding any increase in the deposit balance of the related Deposit
Account. If all funds in such Deposit Account are withdrawn, the related
subaccount balance shall be reduced to zero.
In the event of a complete liquidation of the Association (and only in
such event), each Eligible Account Holder and Supplemental Eligible Account
Holder shall be entitled to receive a liquidation distribution from the
liquidation account in the amount of the then-current adjusted subaccount
balances for Deposit Accounts then held before any liquidation distribution may
be made to stockholders. No merger, consolidation, bulk
22
<PAGE>
purchase of assets with assumptions of Deposit Accounts and other liabilities,
or similar transactions with another institution the accounts of which are
insured by the SAIF, shall be considered to be a complete liquidation. In such
transactions, the liquidation account shall be assumed by the surviving
institution.
The Bank Conversion shall not be deemed to be a complete liquidation of
the Converted Association for purposes of the distribution of the liquidation
account. Upon consummation of the Bank Conversion, the liquidation account, and
all rights and obligations of the Converted Association in connection therewith,
shall be assumed by the National Bank.
The liquidation account shall be maintained by the National Bank, under
the same rules and conditions applicable to the Converted Association,
subsequent to the Bank Conversion for the benefit of Eligible Account Holders
and Supplemental Eligible Account Holders who retain their Deposit Account in
the National Bank.
XIV. RESTRICTIONS ON ACQUISITION OF CONVERTED ASSOCIATION, THE NATIONAL
BANK, OR THE HOLDING COMPANY
Regulations of the OTS limit acquisitions, and offers to acquire,
direct or indirect beneficial ownership of more than 10% of any class of an
equity security of the Converted Association or the Holding Company. In
addition, consistent with the regulations of the OTS, the charter of the
Converted Association shall provide that for a period of five years following
completion of the Conversion: (i) no Person (i.e., no individual, group acting
in concert, corporation, partnership, association, joint stock company, trust,
or unincorporated organization or similar company, syndicate, or any other group
formed for the purpose of acquiring, holding or disposing of securities of an
insured institution) shall directly or indirectly offer to acquire or acquire
beneficial ownership of more than 10% of any class of the Association's equity
securities. Shares beneficially owned in violation of this charter provision
shall not be counted as shares entitled to vote and shall not be voted by any
Person or counted as voting shares in connection with any matter submitted to
the shareholders for a vote. This limitation shall not apply to any offer to
acquire or acquisition of beneficial ownership of more than 10% of the common
stock of the Association by a corporation whose ownership is or will be
substantially the same as the ownership of the Association, provided that the
offer or acquisition is made more than one year following the date of completion
of the Conversion; (ii) shareholders shall not be permitted to cumulate their
votes for elections of directors; and (iii) special meetings of the shareholders
relating to changes in control or amendment of the charter may only be called by
the Boards of Directors.
Upon consummation of the Bank Conversion, no person (i.e., an
individual, a group acting in concert, a corporation, a partnership, an
association, a joint stock company, a trust or any 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 or its
holding company) shall directly, or indirectly, offer to purchase or actually
acquire the beneficial ownership of more than 10% of any class of the Holding
Company's stock without the prior approval of the FRB.
The Holding Company may provide in its certificate of incorporation a
provision that, for a specified period of up to five years following the date of
the completion of the Stock Conversion, no person shall directly or indirectly
offer to acquire or actually acquire the beneficial ownership of more than 10%
of any class of Holding Company stock except with respect to purchases by one or
more Tax-Qualified Employee Stock Benefit Plans of the Holding Company or
Converted Association. The Holding Company may provide in its certificate of
incorporation for such other provisions affecting the acquisition of Holding
Company stock as shall be determined by its Boards of Directors.
23
<PAGE>
XV. AMENDMENT OR TERMINATION OF PLAN
If necessary or desirable, the Plan may be amended at any time prior to
submission of the Plan and proxy materials to the Members by a two-thirds vote
of the respective Boards of Directors of the Holding Company and the
Association. After submission of the Plan and proxy materials to the Members,
the Plan may be amended by a two-thirds vote of the respective Boards of
Directors of the Holding Company and the Association only with the concurrence
of the OTS. Any amendments to the Plan made after approval by the Members with
the concurrence of the OTS shall not necessitate further approval by the Members
unless otherwise required.
The Plan may be terminated by a two-thirds vote of the Association's
Board of Directors at any time prior to the Special Meeting of Members, and at
any time following such Special Meeting with the concurrence of the OTS. In its
discretion, the Board of Directors of the Association may modify or terminate
the Plan upon the order or with the approval of the OTS and without further
approval by Members. The Plan shall terminate if the sale of all shares of
Conversion Stock is not completed within 24 months of the date of the Special
Meeting. A specific resolution approved by a majority of the Board of Directors
of the Association is required in order for the Association to terminate the
Plan prior to the end of such 24 month period.
24
<PAGE>
XVI. EXPENSES OF THE CONVERSION
The Holding Company and the Association shall use their best efforts to
assure that expenses incurred by them in connection with the Conversion shall be
reasonable.
XVII. TAX RULING
Consummation of the Stock Conversion is expressly conditioned upon
prior receipt of either a ruling of the United States Internal Revenue Service
or an opinion of tax counsel with respect to federal taxation, and either a
ruling of the Illinois taxation authorities or an opinion of tax counsel or
other tax advisor with respect to Illinois taxation, to the effect that
consummation of the Stock Conversion will not be taxable to the Holding Company
or the Association.
XVIII. EXTENSION OF CREDIT FOR PURCHASE OF STOCK
The Association may not knowingly loan funds or otherwise extend credit
to any Person to purchase in the Conversion shares of Holding Company Conversion
Stock.
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EXHIBIT 99.4
CERTIFICATION
<PAGE>
CERTIFICATION
I ACKNOWLEDGE THAT THIS SECURITY IS NOT A DEPOSIT OR ACCOUNT AND IS NOT
FEDERALLY INSURED, AND IS NOT GUARANTEED BY FIRST ROBINSON SAVINGS AND LOAN,
F.A., OR BY THE FEDERAL GOVERNMENT.
If anyone asserts that this security is federally insured or
guaranteed, or is as safe as an insured deposit, I should call the Office of
Thrift Supervision, Central Regional Director, Ronald N. Karr, at (312)
917-5000.
I further certify that, before purchasing the common stock par value
$0.01 of First Robinson Financial Corporation, the proposed holding company for
First Robinson Savings and Loan, F.A. (the "Association"), I received a
prospectus dated ___________, 1997 (the "Prospectus").
The Prospectus that I received contains disclosure concerning the
nature of the security being offered and describes the risks involved in the
investment, including, but not limited to: the Association's low return of
equity; difficulty in fully leveraging capital; interest rate risk exposure;
potential delay in completion or denial of bank conversion; risks related to
commercial business and consumer lending; geographical concentration of loans;
ESOP compensation expense; regulatory oversight; absence of active market for
common stock; takeover defensive provisions; voting control of shares by the
board, management and employee plans; risk of delayed offering.
For a more detailed description of the risks involved in the offering,
see "Risk Factors" at pages __ through __ of the Prospectus.
In addition, the certificate of incorporation of the Company requires a
vote of 80% of stockholders to remove directors, to approve certain business
combinations or to amend the certificate of incorporation, which may have the
effect of discouraging a future takeover attempt of the Company. For additional
information, see pages ___ through ___ of the Prospectus.
NOTE: If the stock is to be held jointly, Signature:_______________________
both parties must sign.
Signature:_______________________
Date:____________________________
EXHIBIT 99.5
First Robinson Savings and Loan, F.A. ("First Robinson")
Robinson, Illinois
Questions and Answers Regarding the Subscription and Community Offering
MUTUAL TO STOCK CONVERSION
First Robinson's Board of Directors has unanimously voted to convert the savings
association from its present mutual form to a stock institution, subject to
approval of the conversion by First Robinson's members and regulatory
authorities, and, thereafter, to convert to a national bank. Complete details on
the conversion, including reasons for conversion, are contained in the
Prospectus and Proxy Statement. We urge you to read them carefully.
This brochure is provided to answer basic questions you might have about the
conversion. Remember, the conversion will not affect the rate on any of your
savings accounts, deposit certificates, or loans.
1. Q. What is a "Conversion"?
A. Conversion is a change in the legal form of
organization. Following completion of the conversion
from a federal mutual savings and loan association to
a federal stock savings and loan association, First
Robinson intends to convert from a federal stock
savings and loan association to a national bank to be
known as "First Robinson Savings Bank, N.A." (the
"Bank"). First Robinson currently operates as a
federal mutual savings and loan association with no
shareholders. Through the conversion, First Robinson
will form a holding company, First Robinson Financial
Corporation, which will ultimately own all of the
outstanding stock of the Association. First Robinson
Financial Corporation will issue stock in the
conversion, as described below, and will be a
publicly-owned company.
2. Q. Why is First Robinson converting?
A. The stock form of ownership is used by most business
corporations and financial institutions. First
Robinson has reached an important point in its
development with its decision to convert to the stock
form of ownership. First Robinson's management
believes the continued diversification of the
institution's asset and deposit base and the
establishment of new banking services should enhance
long-term operating potential. The capital raised by
issuing stock will:
* Enhance the Association's capital position.
* Facilitate future access to the capital
markets.
* Provide additional funds for increased
lending and investment opportunities.
<PAGE>
* Enable the Association to provide banking
services.
* Enhance long-term operating potential.
3. Q. Will the conversion have any effect on savings accounts,
certificates of deposit or loans with First Robinson?
A. No. The conversion will not change the amount,
interest rate or withdrawal rights of savings and
checking accounts or certificates of deposit. The
rights and obligations of borrowers under their loan
agreements will not be affected.
However, upon consummation of the conversion, First
Robinson's deposit account holders and borrowers will
no longer have voting rights unless they purchase
common stock in First Robinson Financial Corporation
4. Q. Will the conversion cause any changes in personnel or
management?
A. No. The conversion will not cause any changes in
personnel or management. The normal day-to-day
operations will continue as before.
5. Q. Did the Board of Directors of First Robinson approve the
conversion?
A. Yes. The Board of Directors unanimously adopted the
Plan of Conversion on November 12, 1996.
THE SUBSCRIPTION AND COMMUNITY OFFERING
6. Q. Who is entitled to buy First Robinson Financial Corporation
common stock?
A. Subscription rights to buy common stock will be given
in order of priority to (i) depositors of the
Association as of October 31, 1995 with a $50.00
minimum deposit at that date (the "Eligible Account
Holders"); (ii) the Company's employee stock
ownership plan (the "ESOP"), a tax qualified employee
stock benefit plan; (iii) depositors of the
Association with $50.00 or more on deposit as of
March 31, 1997 (the "Supplemental Eligible Account
Holders"); (iv) depositors of the Association as of
________, 1997 and borrowers as of both March 20,
1990 and ________, 1997 ("Other Members"); and (v)
directors, officers and employees of the Association,
subject to the purchase limitations set forth in the
Plan of Conversion.
Shares that are not subscribed for during the
subscription offering, if any, may be offered to the
general public ("Other Subscribers") through a
community offering with preference given to natural
persons and trusts of natural persons who are
permanent residents of Crawford County, Illinois (the
"Local
<PAGE>
Community"). It is anticipated that any shares not
subscribed for in the Subscription and Community
Offerings will be offered to certain members of the
general public through a syndicate of registered
broker dealers pursuant to selected dealers
agreements in a Syndicated Community Offering.
7. Q. How do I subscribe for shares of stock?
A. Eligible customers wishing to exercise their
subscription rights must return the enclosed Stock
Order Form to First Robinson. The Stock Order Form
must be completed and returned along with full
payment or appropriate instructions authorizing a
withdrawal from a deposit account at First Robinson
on or prior to the close of the Subscription Offering
which is ______ p.m., Central Time, on _________,
1997, unless extended. Members of the public who wish
to order stock directly from First Robinson in the
Community Offering should return their Stock Order
Form and accompanying payment to First Robinson prior
to ____ p.m. Central Time on ___________, 1997,
unless extended.
8. Q. How can I pay for my subscription?
A. First, you may pay for your stock by check or money
order. These funds will earn interest at First
Robinson's passbook rate from the day we receive them
until the completion or termination of the
conversion. The passbook rate was __% as of
_________, 1997.
Second, you may authorize us to withdraw funds from
your First Robinson savings account or certificate of
deposit without early withdrawal penalty. These funds
will continue to earn interest at the rate in effect
for your account until completion of the offering at
which time your funds will be withdrawn for your
purchase. Funds remaining in this account (if any)
will continue at the contractual rate unless the
withdrawal reduces the account balance below the
applicable minimum in which case you will receive
interest at the passbook rate. A hold will be placed
on your account for the amount you specify for stock
payment. You will not have access to these funds from
the day we receive your order until the completion or
termination of the conversion.
If you want to use Individual Retirement Account
deposits held at First Robinson to purchase stock,
call our Stock Information Center at (618) _________
for assistance. There will be no early withdrawal or
IRS penalties incurred by these transactions.
9. Q. When must I place my order for shares of stock?
A. To exercise subscription rights in the subscription
offering, a Stock Order Form must be received by
First Robinson with full payment for all shares
subscribed for not later than ____ p.m., Central
Time, on _________, 1997.
<PAGE>
Non-customers desiring to order shares through the
community offering must order shares before the close
of the community offering, which will be at ____
p.m., Central Time on _________, 1997, unless
extended.
10. Q. How many shares of stock are being offered?
A. First Robinson Financial Corporation is offering
650,000 shares of common stock at a price of $10.00
per share. The number of shares may be decreased to
552,500 or increased to 859,625 in response to the
independent appraiser's final determination of the
consolidated pro forma market value of the common
stock issued in the conversion.
11. Q. What is the minimum and maximum number of shares that I can
purchase during the offering period?
A. The minimum number of shares that may be purchased is
25 shares. No Stock Order Form will be accepted for
less than $250.00. The maximum number of shares may
not exceed 6,500 shares for any individual or 10,000
shares for their associates or any group acting in
concert as defined in First Robinson's Plan of
Conversion.
12. Q. How was it determined that between 552,500 shares and
859,625 shares of stock would be issued at $10.00 per share?
A. The share range was determined through an appraisal
of First Robinson by Ferguson & Company, L.L.C., an
independent appraisal firm specializing in the thrift
industry.
13. Q. Must I pay a commission on the stock for which I subscribe?
A. No. You will not pay a commission on stock purchased
in the Subscription Offering, the Community Offering
or the Syndicated Community Offering, if any.
Conversion expenses, including commissions, will be
deducted from the proceeds of the offering upon
completion of the conversion.
14. Q. Will I receive interest on funds I submit for stock
purchases?
A. Yes. First Robinson will pay its current passbook
rate from the date funds are received (with a
completed Stock Order Form) during the subscription
and community offerings until completion of the
conversion. That rate, as of ________, 1997 was __%.
15. Q. If I have misplaced my Stock Order Form, what should I do?
A. First Robinson will mail you another order form or
you may obtain one from the First Robinson main
office. If you need assistance in obtaining or
completing a
<PAGE>
Stock Order Form, a First Robinson employee or a
Trident Securities, Inc. representative will be happy
to help you.
16. Q. Will there be any dividends paid on the stock?
A. The Company currently intends to pay an annual cash
dividend at a rate of approximately 3.0%, or $0.30
per share. The payment of cash dividends on the
Common Stock will be subject to the requirements of
applicable law and the determination by the Board of
Directors of the Company that the net income, capital
and financial condition of the Company, banking
industry trends and general economic conditions
justify the payment of dividends. In addition, from
time to time in an effort to manage capital to a
reasonable level, the Board may determine if it is
prudent 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. Like all possible dividends, there can be
no assurance that periodic special cash dividends
will be paid or, that, if paid, will continue to be
paid. In conjunction with the conversion, First
Robinson has established a dividend direct deposit
plan. This allows customers to have dividend checks
deposited directly into their First Robinson savings
or checking accounts. Customers may choose to
participate in the direct deposit plan by checking
the appropriate box on the stock order form and
listing their account number to be used for deposits.
17. Q. How much stock do the directors and officers of First
Robinson intend to purchase through the Subscription Offering?
A. Directors and executive officers intend to purchase
approximately $735,000 (11.3% at the midpoint of the
offering) of the stock to be offered in the
conversion. The purchase price paid by directors and
officers will be the same as that paid by customers
and the general public.
18. Q. Are the subscription rights transferable to another party?
A. No. Pursuant to federal regulations, subscription
rights granted to Eligible Account Holders,
Supplemental Eligible Account Holders and Other
Members may be exercised only by the person(s) to
whom they are granted. Any person found to be
transferring subscription rights will be subject to
forfeiture of such rights.
19. Q. I closed my account several months ago. Someone told me
that I am still eligible to buy stock. Is that true?
A. If you were an account holder on the Eligibility
Record Date, October 31, 1995, or the Supplemental
Eligibility Record Date, March 31, 1997, you are
entitled to purchase stock without regard to whether
you continued to hold your First Robinson account.
<PAGE>
20. Q. May I obtain a loan from First Robinson using stock as
collateral to pay for my shares?
A. No. Federal regulations do not allow First Robinson
to make loans for this purpose, but other financial
institutions could make a loan for this purpose.
21. Q. Will the FDIC (Federal Deposit Insurance Corporation)
insure the shares of stock?
A. No. The shares are not and may not be insured by the
FDIC. However, the Savings Association Insurance Fund
of the FDIC will continue to insure savings accounts
and certificates of deposit up to the applicable
limits allowed by law.
22. Q. Will there be a market for the stock following the
conversion?
A. Neither the Company nor the Association has ever
issued stock before, and due to the relatively small
size of the Offerings, it is unlikely that an active
and liquid trading market will develop or be
maintained. The Company will request that Trident
Securities undertake to match offers to buy and
offers to sell the Common Stock, and Trident
Securities intends to list the Common Stock
over-the-counter through the National Daily Quotation
System "Pink Sheets" published by the National
Quotation Bureau, Inc. However, purchasers of Common
Stock should have a long-term investment intent and
recognize that the absence of an active and liquid
trading market may make it difficult to sell the
Common Stock and may have an adverse effect on the
price.
23. Q. Can I purchase stock using funds in a First Robinson IRA
account?
A. Yes. Contact the Stock Information Center for the
necessary forms. However, it takes several days to
process the necessary IRA forms and, therefore, it is
necessary that your response be received by [one week
prior to closing], 1997, to accommodate your order.
ABOUT VOTING "FOR" THE PLAN OF CONVERSION
24. Q. Am I eligible to vote at the Special Meeting of Members to
be held to consider the Plan of Conversion?
A. At the Special Meeting of Members to be held on
_______, 1997, you are eligible to vote if you are
one of the "Voting Members," who are holders of First
Robinson's deposit accounts as of _________, 1997 or
loans as of both March 20, 1990 and _______, 1997
(the "Voting Record Date") for the Special Meeting.
However, Association members of record as of the
close of business on the Voting Record Date who cease
to be depositors or borrowers prior to the date of
<PAGE>
the Special Meeting are no longer members and will
not be entitled to vote at the Special Meeting. If
you are a Voting Member, you should have received a
proxy statement and proxy card with which to vote.
25. Q. How many votes do I have as a Voting Member?
A. Each account holder is entitled to one vote for each
$100, or fraction thereof, on deposit in such
account. Each borrower who holds eligible borrowings
is entitled to cast one vote in addition to the
number of votes, if any, he or she is entitled to
vote as an account holder. No member may cast more
than 1,000 votes.
26. Q. If I vote "against" the Plan of Conversion and it is
approved, will I be prohibited from buying stock during the
subscription offering?
A. No. Voting against the Plan of Conversion in no way
restricts you from purchasing stock in either the
subscription offering or the community offering.
27. Q. What happens if First Robinson does not get enough votes to
approve the Plan of Conversion?
A. First Robinson's Conversion would not take place and
First Robinson would remain a mutual savings and loan
association.
28. Q. As a qualifying depositor or borrower of First Robinson, am
I required to vote?
A. No. However, failure to return your proxy card will
have the same effect as a vote "Against" the Plan of
Conversion.
29. Q. What is a Proxy Card?
A. A Proxy Card gives you the ability to vote without
attending the Special Meeting in person. You may
attend the meeting and vote in person, even if you
have returned your proxy card, if you choose to do
so. However, if you are unable to attend, you still
are represented by proxy.
30. Q. How does the conversion affect me?
A. The conversion is intended, among other things, to
assist First Robinson in maintaining and expanding
its many services to First Robinson's customers and
community. By purchasing stock, you will also have
the opportunity to invest in First Robinson Financial
Corporation, the holding company that will own the
nationally-chartered bank into which First Robinson
will convert. However, there is no obligation to
purchase stock; the purchase of stock is strictly
optional.
31. Q. How can I get further information concerning the stock
offering?
<PAGE>
A. You may call the Stock Information Center, collect at
(618) 544-5800 for further information or a copy of
the Prospectus, Stock Order Form, Proxy Statement and
Proxy Card.
This information is neither an offer to sell nor a solicitation of an offer to
buy securities. The offer is made only by the Prospectus. A Prospectus can be
obtained at any First Robinson office or by calling the First Robinson Stock
Information Center. There shall be no sale of stock in any state in which any
offer, solicitation of an offer or sale of stock would be unlawful.
The stock is not a deposit or account and is not federally insured or
guaranteed.
FOR YOUR CONVENIENCE
In order to assist you during the stock offering period, we have
established a Stock Information Center to answer your questions. Please call
collect:
(618) 544-5800
EXHIBIT 99.6
Press Release
FOR IMMEDIATE RELEASE
For More Information Contact:
Rick L. Catt, President
Telephone: (618) 544-8621
FIRST ROBINSON SAVINGS AND LOAN, F.A.
STOCK SALE APPROVED
Robinson, Illinois - Mr. Rick L. Catt, President of First Robinson
Savings and Loan, F.A. ("First Robinson"), Robinson, Illinois, announced today
that First Robinson has received approval from the Office of Thrift Supervision
to convert from a federal mutual savings and loan association to a federal stock
savings and loan association and to become a wholly-owned subsidiary of a
newly-formed holding company, First Robinson Financial Corporation (the
"Company"). Following completion of the stock conversion, First Robinson has
also received regulatory approval to convert from a federal stock savings and
loan association to a national bank to be known as "First Robinson Savings Bank,
N.A."
A Prospectus and Proxy Statement describing the Plan of Conversion will
be mailed to certain members of First Robinson on or about ___________, 1997.
Under the Plan of Conversion, the company is offering an estimated 650,000
shares of common stock at $10.00 per share. Certain of First Robinson's past and
present depositors and borrowers will have the opportunity to purchase stock
through a subscription offering that closes on ________, 1997. Shares that are
not subscribed for during the subscription offering, if any, may be offered to
the general public, with preference given to natural persons and trusts of
natural persons who are permanent residents of Crawford County, Illinois, in a
community offering. The offerings are being managed by Trident Securities, Inc.,
of Raleigh, North Carolina.
<PAGE>
Mr. Catt stated "First Robinson remains committed to its local market
as a hometown community financial institution with even stronger financial
resources."
First Robinson Savings and Loan, F.A. is located in Robinson, Illinois.
The Association was founded in 1883. At December 31, 1996, First Robinson had
total assets of $67.5 million and retained income of $4.7 million. Customers or
interested members of the community with questions concerning the stock offering
should call the institution at (618) 544-5800 or visit First Robinson.
<PAGE>
Press Release FOR IMMEDIATE RELEASE
Contact: Rick L. Catt, President
Telephone: (618) 544-8621
FIRST ROBINSON FINANCIAL CORPORATION, HOLDING COMPANY FOR
FIRST ROBINSON SAVINGS AND LOAN, F.A.,
COMPLETES INITIAL STOCK OFFERING
Robinson, Illinois - Mr. Rick L. Catt, President of First Robinson
Savings and Loan, F.A. ("First Robinson"), based in Robinson, Illinois,
announced today that First Robinson Financial Corporation, the holding company
for First Robinson Savings and Loan, F.A., has completed its initial common
stock offering. It is anticipated that the common stock of First Robinson
Financial Corporation will begin trading on the Nasdaq SmallCap Market under the
symbol "____" on or about ___________, 1997. In addition, following the stock
conversion, the institution will convert to a national bank to be known as
"First Robinson Savings Bank, N.A. (the "Bank")." First Robinson Financial
Corporation, will issue __________ shares of its common stock.
The net proceeds contributed to First Robinson upon conversion will
substantially increase its capital. First Robinson ultimately intends to use
such funds for general corporate purposes, among them the origination of loans
and other investments. It is expected that in the interim all or part of the
proceeds will be invested in short-term and intermediate-term securities.
On __________, 1997, First Robinson's Plan of Conversion was approved
by First Robinson's depositor and borrower members at a Special Meeting that was
held at the main office of the institution.
Mr. Catt indicated that the Officers and Board of Directors of First
Robinson want to express their thanks for the response by customers and the
community to the stock offering and that the Association looks forward to
serving the needs of its customers as a stock institution.
<PAGE>
Trident Securities, Inc. of Raleigh, North Carolina managed the
subscription and community offerings for First Robinson Financial Corporation.
<PAGE>
OFFICER AND DIRECTOR STOCK PURCHASE COMMITMENTS
Name Amount Shares Percent@Midpoint
- ---- ------ ------ ----------------
Scott F. Pulliam
Chairman of the Board $ 100,000 10,000 1.50%
Clell T. Keller
Director $ 100,000 10,000 1.50%
James D. Goodwine
Director $ 50,000 5,000 0.75%
Donald K. Imboden
Director $ 100,000 10,000 1.50%
William K. Thomas
Director $ 75,000 7,500 1.15%
Rick L. Catt, President,
Director and C.E.O. $ 100,000 10,000 1.50%
All directors and executive
officers as a group
(10 persons) and their
associates $ 735,000 73,500 11.30%
========== ====== ======
This information is neither an offer to sell nor a solicitation of an offer to
buy securities. The offer is made only by the Prospectus.
The stock is not a deposit or account and is not federally insured or
guaranteed.
<PAGE>
(First Robinson Letterhead)
________, 1995
Dear Retirement Account Participant:
As you know First Robinson Savings and Loan, F.A. is converting from a
federal mutual savings and loan association to a federal stock savings and loan
association. Following completion of the stock conversion, First Robinson
intends to convert from a federal stock savings and loan association to a
national bank to be known as "First Robinson Savings Bank, N.A." The Association
is providing current and certain former depositors and borrowers an opportunity
to purchase stock through a Subscription Offering. First Robinson Financial
Corporation, the proposed holding company for First Robinson, is offering up to
859,625 shares of common stock at $10.00 per share.
As the holder of a Retirement Account you have an opportunity to become
a shareholder of First Robinson Financial Corporation If you desire to purchase
stock using funds being held in your Retirement Account, we can assist you in
self-directing those funds which are currently held in certificates of deposit.
This process can be done without an early withdrawal penalty or without a
negative tax consequence to your retirement account. The stock that you purchase
would be held in a self-directed retirement plan.
If you are interested in receiving more information on self-directing
your IRA, please contact our Stock Information Center at (618) 544-5800. This
transaction cannot be done through the mail and will require that you visit the
First Robinson office. Furthermore, it takes several days to process the
necessary IRA forms and regulations concerning retirement accounts require that
your response be received by [one week prior to closing], 1997 to accommodate
your interest.
Sincerely,
Rick L. Catt
President
This does not constitute an offer to sell, or the solicitation of an offer to
buy shares of First Robinson Financial Corporation common stock offered in the
conversion, nor does it constitute the solicitation of a proxy in connection
with the conversion. Such offers and solicitations of proxies are made only by
means of the Prospectus and the Proxy Statement, respectively. There shall be no
sale of stock in any state in which any offer, solicitation of an offer or sale
of stock would be unlawful. The shares of First Robinson Financial Corporation
common stock offered in the conversion are not deposits or accounts and are not
federally insured or guaranteed.
<PAGE>
POSTER
First Robinson Savings and Loan, F.A.
STOCK OFFERING MATERIALS
AVAILABLE HERE
Subscription Rights for the Stock Offering
by First Robinson Financial Corporation
Expire on _______, 1997
<PAGE>
This announcement is neither an offer to sell nor a solicitation of an offer to
buy these securities. The offer is made only by the Prospectus and Proxy
Statement. These shares have not been approved or disapproved by the Securities
and Exchange Commission Office of Thrift Supervision, or Federal Deposit
Insurance Corporation, nor has such Commission, Office or Corporation passed
upon the accuracy or adequacy of the Prospectus and Proxy Statement. Any
representation to the contrary is unlawful.
New Issue __________, 1997
Up to 859,625 Shares
These shares are being offered pursuant
to a Plan of Conversion whereby
First Robinson Savings and Loan, F.A.
of Robinson, Illinois will convert
from a federal mutual savings and loan association
to a federal stock savings and loan association and,
following completion of the offering, convert
to a national bank, to be known as
"First Robinson Savings Bank, N.A.,"
and become the wholly-owned subsidiary of
First Robinson Financial Corporation
Common Stock
---------------
Price $10.00 Per Share
---------------
Copies of the Prospectus may be obtained in any State in which
this announcement is circulated from such of the undersigned
or other brokers and dealers
as may legally offer these securities in such state.
Trident Securities, Inc.
For a copy of the Prospectus call (618) 544-5800.
1
<PAGE>
* Sent to prospects who are customers *
_________ , 1997
&salutation& &firstname& &lastname&
&address&
&city&, &state& &zip&
Dear &prefername&:
Recently you may have read in the newspaper that First Robinson Savings
and Loan, F.A. will convert from a federal mutual savings and loan association
to a federal stock savings and loan association. Following completion of the
stock conversion, First Robinson intends to convert from a federal stock savings
and loan association to a national bank to be known as "First Robinson Savings
Bank, N.A." This is the most significant event in the history of the Association
in that it allows customers, community members, employees and directors the
opportunity to share in First Robinson's future by becoming charter stockholders
of First Robinson Financial Corporation, the Association's proposed holding
company.
As a customer of First Robinson, you should have received a packet of
information regarding the conversion, including a Prospectus and a Proxy
Statement. In addition, we are holding several presentations for friends of the
officers and directors to discuss the stock offering in more detail. You will
receive an invitation in the near future.
Please feel free to call me or the First Robinson's Stock Information
Center at (618) 544- 5800 if you have any questions. I look forward to seeing
you at one of our informational presentations.
Sincerely,
Rick L. Catt
President
This does not constitute an offer to sell, or the solicitation of an offer to
buy, shares of First Robinson Financial Corporation common stock offered in the
conversion, nor does it constitute the solicitation of a proxy in connection
with the conversion. Such offers and solicitations of proxies are made only by
means of the Prospectus and the Proxy Statement, respectively. There shall be no
sale of stock in any state in which any offer, solicitation of an offer or sale
of stock would be unlawful. The shares of First Robinson Financial Corporation
common stock offered in the conversion are not deposits or accounts and are not
federally insured or guaranteed.
<PAGE>
* Sent to prospects who are not customers *
_________, 1997
&salutation& &firstname& &lastname&
&address&
&city&, &state& &zip&
Dear &prefername&:
Recently you may have read in the newspaper that First Robinson Savings
and Loan, F.A. will be converting from a federal mutual savings and loan
association to a federal stock savings and loan association. Following
completion of the stock conversion, First Robinson intends to convert from a
federal stock savings and loan association to a national bank to be known as
"First Robinson Savings Bank, N.A." This is the most significant event in the
history of the Association in that it allows customers, community members,
employees and directors the opportunity to share in First Robinson's future by
becoming charter stockholders of the Association's Holding Company, First
Robinson Financial Corporation
[Director/officer] has asked that you be sent a Prospectus and stock
order form which will allow you to become a charter stockholder, should you
desire. In addition, we are holding several presentations for friends of the
officers and directors to discuss the stock offering in more detail.
You will receive an invitation in the near future.
Please feel free to call me or the First Robinson's Stock Information
Center at (618) 544- 5800 if you have any questions. I look forward to seeing
you at one of our informational presentations.
Sincerely,
Rick L. Catt
President
This does not constitute an offer to sell, or the solicitation of an offer to
buy, shares of First Robinson Financial Corporation common stock offered in the
conversion, nor does it constitute the solicitation of a proxy in connection
with the conversion. Such offers and solicitations of proxies are made only by
means of the Prospectus and the Proxy Statement, respectively. There shall be no
sale of stock in any state in which any offer, solicitation of an offer or sale
of stock would be unlawful. The shares of First Robinson Financial Corporation
common stock offered in the conversion are not deposits or accounts and are not
federally insured or guaranteed.
<PAGE>
* Sent to individuals requesting information *
_________, 1997
&salutation& &firstname& &lastname&
&address&
&city&, &state& &zip&
Dear &prefername&:
Enclosed you will find the offering materials relating to the mutual to
stock conversion of First Robinson Savings and Loan, F.A. and the initial stock
offering of the Association's Holding Company, First Robinson Financial
Corporation.
In connection with the conversion, First Robinson Financial Corporation
is offering up to 859,625 shares of its common stock at a price of $10.00 per
share. Please review the enclosed Prospectus so that you may make an informed
investment decision based on your individual financial situation. If you wish to
purchase stock, the enclosed order form should be completed and returned to
First Robinson no later than ____ p.m. Central Time, on ________, 1997.
If you have any questions concerning the conversion, please feel free
to call the First Robinson's Stock Information Center at (618) _________.
Sincerely,
Rick L. Catt
President
This does not constitute an offer to sell, or the solicitation of an offer to
buy, shares of First Robinson Financial Corporation common stock offered in the
conversion, nor does it constitute the solicitation of a proxy in connection
with the conversion. Such offers and solicitations of proxies are made only by
means of the Prospectus and the Proxy Statement, respectively. There shall be no
sale of stock in any state in which any offer, solicitation of an offer or sale
of stock would be unlawful. The shares of First Robinson Financial Corporation
common stock offered in the conversion are not deposits or accounts and are not
federally insured or guaranteed.
<PAGE>
The Directors and Officers
of
First Robinson Savings and Loan, F.A.
cordially invite you to attend a brief
presentation regarding the stock offering of
First Robinson Financial Corporation,
our proposed holding company
Please join us at the
Place
Address
Date
at 6:00 p.m.
for hors d'oeuvres
R.S.V.P.
(___) (Collect)
list of directors and officers
<PAGE>
* Sent to those attending a community meeting *
__________, 1997
&salutation& &firstname& &lastname&
&address&
&city&, &state& &zip&
Dear &prefername&:
Thank you for attending our informational presentation relating to
First Robinson Savings and Loan, F.A.'s conversion to a stock institution. The
information presented at the meeting and the Prospectus you recently received
should assist you in making an informed investment decision.
Obviously, we are excited about this stock offering and the opportunity
to share in the future of First Robinson. This conversion is the most important
event in our history and it gives the Association the strength and corporate
flexibility to compete in the future.
We will contact you in the near future to get an indication of your
interest in our offering. In the meantime, if your investment decision is made,
feel free to return your order form at your convenience, but not later than
_________, 1997. If you have any questions, please call the Stock Information
Center at (618) 544-5800.
Sincerely,
Rick L. Catt
President
This does not constitute an offer to sell, or the solicitation of an offer to
buy, shares of First Robinson Financial Corporation common stock offered in the
conversion, nor does it constitute the solicitation of a proxy in connection
with the conversion. Such offers and solicitations of proxies are made only by
means of the Prospectus and the Proxy Statement, respectively. There shall be no
sale of stock in any state in which any offer, solicitation of an offer or sale
of stock would be unlawful. The shares of First Robinson Financial Corporation
common stock offered in the conversion are not deposits or accounts and are not
federally insured or guaranteed.
<PAGE>
* Sent to those not attending a community meeting *
_________, 1997
&salutation& &firstname& &lastname&
&address&
&city&, &state& &zip&
Dear &prefername&:
I am sorry you were unable to attend our recent presentation regarding
First Robinson Savings and Loan, F.A.'s mutual to stock conversion. The Board of
Directors and management team of First Robinson Savings and Loan, F.A. are
committed to contributing to long term shareholder value and as a group we
intend to personally invest approximately $735,000 of our own funds. We are
enthusiastic about the stock offering and the opportunity to share in the future
of First Robinson.
We have established a Stock Information Center to assist you with any
questions regarding the stock offering. Should you require any assistance
between now and _________, 1997, I encourage you to either stop by our Stock
Information Center or call (618) 544-5800.
I hope you will join me as a charter stockholder in First Robinson
Savings and Loan, F.A.
Sincerely,
Rick L. Catt
President
This does not constitute an offer to sell, or the solicitation of an offer to
buy, shares of First Robinson Financial Corporation common stock offered in the
conversion, nor does it constitute the solicitation of a proxy in connection
with the conversion. Such offers and solicitations of proxies are made only by
means of the Prospectus and the Proxy Statement, respectively. There shall be no
sale of stock in any state in which any offer, solicitation of an offer or sale
of stock would be unlawful. The shares of First Robinson Financial Corporation
common stock offered in the conversion are not deposits or accounts and are not
federally insured or guaranteed.
<PAGE>
* Final Reminder Letter *
_________, 1997
&salutation&firstname&lastname&
&address&
&city&, &state& &zip&
Dear &prefername&:
Just a quick note to remind you that the deadline for purchasing stock
in First Robinson Financial Corporation is quickly approaching. I hope you will
join me in becoming a charter stockholder in one of Illinois' newest publicly
owned financial institutions.
The deadline for becoming a charter stockholder is _________, 1997. If
you have any questions, I hope you will call our Stock Information Center at
(618) 544-5800.
Once again, I look forward to having you join me as a charter
stockholder in First Robinson Financial Corporation
Sincerely,
Rick L. Catt
President
This does not constitute an offer to sell, or the solicitation of an offer to
buy, shares of First Robinson Financial Corporation common stock offered in the
conversion, nor does it constitute the solicitation of a proxy in connection
with the conversion. Such offers and solicitations of proxies are made only by
means of the Prospectus and the Proxy Statement, respectively. There shall be no
sale of stock in any state in which any offer, solicitation of an offer or sale
of stock would be unlawful. The shares of First Robinson Financial Corporation
common stock offered in the conversion are not deposits or accounts and are not
federally insured or guaranteed.
<PAGE>
P R O X Y G R A M
(LOGO)
YOUR VOTE ON OUR CONVERSION PLAN HAS NOT BEEN RECEIVED.
YOUR VOTE IS VERY IMPORTANT, PARTICULARLY SINCE FAILURE TO VOTE IS EQUIVALENT TO
VOTING AGAINST THE PLAN.
VOTING FOR THE CONVERSION PLAN WILL NOT AFFECT THE INSURANCE OF YOUR ACCOUNT. IT
WILL CONTINUE TO BE INSURED UP TO THE LEGAL LIMIT ($100,000 PER ACCOUNT AS
DEFINED BY LAW) BY THE SAVINGS ASSOCIATION INSURANCE FUND OF THE FEDERAL DEPOSIT
INSURANCE CORPORATION, AN AGENCY OF THE U.S. GOVERNMENT.
REMEMBER, VOTING FOR CONVERSION DOES NOT OBLIGATE YOU TO BUY
ANY STOCK.
PLEASE ACT PROMPTLY! SIGN THE ENCLOSED PROXY CARD AND MAIL OR
DELIVER IT TO FIRST ROBINSON SAVINGS AND LOAN, F.A.
WE RECOMMEND THAT YOU VOTE "FOR" THE PLAN OF CONVERSION.
THANK YOU!
THE BOARD OF DIRECTORS AND
MANAGEMENT OF FIRST ROBINSON
SAVINGS AND LOAN, F.A.
EXHIBIT 99.7
March 10, 1997
Board of Directors
First Robinson Savings and Loan, F.A.
501 East Main Street
Robinson, Illinois 62454
Plan of Conversion, Subscription Rights
Dear Directors:
Terms used in this letter not otherwise defined herein have the same
meanings for such terms in the Plan of Conversion adopted by the Board of
Directors of First Robinson Savings and Loan, F.A., Robinson, Illinois ("First
Robinson" or the "Association"), under which the Association will convert from a
mutual savings and loan association to a stock savings and loan association and
issue all of the Association's stock to First Robinson Financial Corporation
(the "Holding Company"). Simultaneously, the Holding Company will issue shares
of common stock.
We understand that in accordance with the Plan of Conversion,
Subscription Rights to purchase shares of Common Stock in the Holding Company
are to be issued to (1) Eligible Account Holders, (2) The Association's tax
qualified employee plans, (3) Supplemental Eligible Account Holders, and (4)
Other Members. Based solely upon our observation that the Subscription Rights
will be available to such parties without cost, will be legally non-transferable
and of short duration, and will afford such parties the right only to purchase
shares of Common Stock at the same price to be paid by members of the general
public in the Community Offering, but without undertaking any independent
investigation of state or federal laws or the position of the Internal Revenue
Service with respect to such issue, we are of the belief that:
(1) the Subscription Rights will have no ascertainable market value;
and
(2) the price at which the Subscription Rights are exercisable will not
be more or less than the pro forma market value of the shares upon issuance.
Changes in the local and national economy, the legislative and
regulatory environment, the stock market, interest rates and other external
forces (e.g., natural disasters or significant global events) occur from time to
time and may materially affect the value of thrift stocks as a whole or the
Holding Company's value. Accordingly, no assurance can be given that persons who
subscribe to shares of Common Stock in the Conversion will thereafter be able to
sell such shares at the same price paid in the Subscription Offering.
Sincerely,
Robin L. Fussell
Principal
