U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 10-QSB
--------------------
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED MARCH 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 005-55641
UNITED FINANCIAL HOLDINGS, INC.
(Name of Small Business Issuer in its Charter)
FLORIDA 59-2156002
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
333 THIRD AVENUE NORTH, SUITE 200
ST. PETERSBURG, FLORIDA 33701-3346
(Address of Principal Executive Offices)
(727) 898-2265
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or
for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
Yes X No ___
Indicate the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date:
Common Stock, $0.01 Par value 4,230,000
- --------------------------------- ----------------
Class Outstanding as of April 28, 2000
<PAGE>
UNITED FINANCIAL HOLDINGS, INC.
INDEX
PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements (unaudited)
Condensed Consolidated Balance Sheets -
At March 31, 2000 and December 31, 1999 1
Condensed Consolidated Statements of Earnings -
For the three months ended March 31, 2000 2
Condensed Consolidated Statements of Comprehensive Income -
For the three months ended March 31, 2000 3
Condensed Consolidated Statement of Stockholders' Equity -
For the three months ended March 31, 2000 4
Condensed Consolidated Statements of Cash Flows -
For the three months ended March 31, 2000 and 1999 5-6
Notes to Condensed Consolidated Financial Statements 7-8
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-13
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings 14
ITEM 2. Changes in Securities and Use of Proceeds 14
ITEM 3. Defaults Upon Senior Securities 14
ITEM 4. Submission of Matters to a Vote of Shareholders 14
ITEM 5. Other Information 14
ITEM 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
United Financial Holdings, Inc. and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
March 31, December 31,
2000 1999
(unaudited) (audited)
ASSETS ------------ -------------
Cash and due from banks $ 13,088 $ 8,866
Federal funds sold 11,257 2,917
Trading securities - 82
Securities held to maturity, market value of
$13,531 and $14,072 respectively 14,020 14,541
Securities available for sale, at market 8,464 9,924
Loans, net 156,795 153,497
Premises and equipment, net 9,505 9,619
Federal Home Loan Bank stock 507 507
Federal Reserve Bank stock 204 204
Intangible assets 2,049 1,748
Other real estate owned 1,515 1,528
Other assets 6,070 6,048
----------- ------------
Total assets $ 223,474 $ 209,481
=========== ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Demand $ 38,018 $ 32,936
NOW and money market 68,983 67,914
Savings & Time Deposits 79,696 74,248
----------- ------------
Total deposits 186,697 175,098
Securities sold under agreements to repurchase 9,247 7,307
Convertible subordinated debentures 630 630
Other liabilities 2,742 2,874
Total liabilities 199,316 185,909
Company-obligated Mandatory Redeemable Capital
Securities of Subsidiary
Trust Holding Solely Subordinated Debentures
Of The Company 6,750 6,750
STOCKHOLDERS' EQUITY
7% convertible preferred stock 100 100
Common stock 42 42
Paid-in capital 10,019 9,672
Accumulated other comprehensive income (301) (232)
Retained earnings 7,548 7,240
----------- ------------
Total stockholders' equity 17,408 16,822
----------- ------------
Total liabilities and stockholders' equity $ 223,474 $ 209,481
=========== ============
See accompanying notes to condensed consolidated financial statements.
- 1 -
<PAGE>
United Financial Holdings, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
(in thousands, except per share data)
Three Months Ended
March 31, March 31,
2000 1999
---------- -----------
Interest income
Loans and loan fees $ 3,799 $ 2,873
Securities 376 421
Federal funds sold and securities purchased
under reverse repurchase agreements 81 48
----------- -----------
Total interest income 4,256 3,342
Interest expense
Deposits 1,441 1,135
Long-term debt and other borrowings 89 66
Subordinated debentures issued to subsidiary
trust 159 157
----------- -----------
Total interest expense 1,689 1,358
----------- -----------
Net interest income 2,567 1,984
Provision for loan losses 150 225
----------- -----------
Net interest income after provision
for loan losses 2,417 1,759
Other income
Service charges on deposit accounts 226 176
Trust and investment management
income 770 663
Gain on Sale of Loans 26 112
All other fees and income 146 172
----------- -----------
Total other income 1,168 1,123
Other expense
Salaries and employee benefits 1,706 1,366
Occupancy expense 117 130
Furniture and equipment expense 165 141
Data Processing 140 131
Marketing and business development 44 41
Other operating expenses 645 438
----------- -----------
2,817 2,247
----------- -----------
Earnings before income taxes 768 635
Income tax expense 287 230
----------- -----------
NET EARNINGS $ 481 $ 405
=========== ===========
Earnings Per Share:
Basic $ .11 $ .10
Diluted $ .11 $ .09
See accompanying notes to condensed consolidated financial statements.
- 2 -
<PAGE>
United Financial Holdings, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(unaudited)
(in thousands)
Three Months Ended
March 31, March 31,
2000 1999
----------- -----------
Net earnings $ 481 $ 405
Other comprehensive income
Unrealized holding losses (105) (117)
Income tax benefit related to
items of other comprehensive income 36 40
----------- -----------
Comprehensive income $ 412 $ 328
=========== ===========
See accompanying notes to condensed consolidated financial statements.
- 3 -
<PAGE>
United Financial Holdings, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(unaudited)
(in thousands)
7% Accumu-
Convert- lated
ible Other
Pre- Compre-
Common ferred Paid-In hensive Retained
Stock Stock Capital Income Earnings Total
------ ------ ------- ------- -------- ---------
Balance at December 31,
1999 $ 42 $ 100 $ 9,672 $ (232) $ 7,240 $ 16,822
Net Earnings - - - - 481 481
Dividends on Common
& Preferred Stock - - - - (173) (173)
Accumulated other
comprehensive income - - - (69) - (69)
Performance Shares
Issued - - 347 - - 347
------ ------ ------- ------- -------- ---------
Balance at March 31,
2000 $ 42 $ 100 $10,019 $ (301) $ 7,548 $ 17,408
====== ====== ======= ======= ======== ========
See accompanying notes to condensed consolidated financial statements.
- 4 -
<PAGE>
United Financial Holdings, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
(in thousands)
Three Months Ended
March 31, March 31,
2000 1999
---------- -----------
Cash flows from operating activities:
Net earnings $ 481 $ 405
Adjustments to reconcile net earnings
to net cash cash provided by (used in)
operating activities
Provision for loan losses 150 225
Provision for depreciation and
amortization 209 183
Unrealized gain on trading securities - (5)
Accretion of securities discount (2) (4)
Amortization of unearned loan fees (25) (37)
Amortization of securities premiums 3 5
Gain on sales of loans (39) (206)
Decrease in interest receivable 156 86
Increase (decrease) in interest payable 1 (1)
(Increase) in other assets (494) (855)
(Decrease) in other liabilities (132) (796)
---------- ----------
Net cash provided by (used in)
operating activities 308 (1,000)
Cash flows from investing activities:
Purchase of Federal Reserve Bank stock
and FHLB stock - (73)
Net (increase) in Federal funds sold (8,340) (1,809)
Principal repayments of held to maturity
securities 258 509
Principal repayments of available for sale
securities 158 320
Proceeds from sale of Trading Securities 75 -
Proceeds from maturities of available for
sale securities 1,000 2,404
Proceeds from maturities of held to
maturity securities 500 50
Purchases of available for sale securities - (2,000)
Purchases of held to maturity securities - (372)
Proceeds from sales of loans 568 2,001
Net (increase) in loans (3,952) (8,845)
Capital expenditures (66) (659)
---------- ----------
Net cash used in investing activities (9,799) (8,474)
(continued)
See accompanying notes to condensed consolidated financial statements.
- 5 -
<PAGE>
United Financial Holdings, Inc. and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(unaudited)
(in thousands)
Three Months Ended
March 31, March 31,
2000 1999
----------- -----------
Cash flows from financing activities:
Net increase in demand deposits, NOW accounts,
money market accounts and savings accounts $ 6,296 $ 6,327
Net increase in certificates of deposit 5,304 5,245
Net increase (decrease) in securities sold
under agreements to repurchase 1,941 (1,586)
Repayment of long-term debt - (34)
Issuance of Company-obligated mandatory
redeemable capital securities of subsidiary
trust holding solely
subordinated debentures of the Company - 750
Issuance of common stock 346 490
Dividend paid on preferred stock (4) (7)
Dividend paid on common stock (170) (163)
----------- -----------
Net cash provided by financing
activities 13,713 11,022
----------- -----------
Net increase in cash and due from banks 4,222 1,548
Cash and due from banks at beginning of period 8,866 7,967
----------- -----------
Cash and due from banks at end of period $ 13,088 $ 9,515
=========== ===========
Cash paid during the period for:
Interest $ 1,688 $ 1,359
Income taxes $ 260 $ 65
Supplemental Disclosure of Non-cash Activity
Non-cash common stock issued $ 347 $ 112
See accompanying notes to condensed consolidated financial statements.
- 6 -
<PAGE>
UNITED FINANCIAL HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - HOLDING COMPANY AND SUBSIDIARIES BACKGROUND INFORMATION
United Financial Holdings, Inc. (the "Company") is a registered bank holding
company formed in 1982, the principal subsidiary of which is United Bank
("Bank"), a Florida-chartered commercial bank headquartered in St. Petersburg,
Florida. The Bank was founded in 1979 and is a community-oriented, full service
commercial bank with five branch offices serving the southern Pinellas County
area of the State of Florida.
The Company's other operating subsidiaries are Eickhoff, Pieper, & Willoughby,
Inc., an investment advisory firm registered under the Investment Advisers Act
of 1940 ("EPW") headquartered in Tampa, Florida, with an office in Jacksonville,
Florida, and United Trust Company, a Florida-chartered trust company ("United
Trust") located in St. Petersburg, Florida. EPW offers investment management
services to corporate, municipal and high net worth individual clients
throughout the State of Florida. United Trust is a wholesale provider of data
processing, administrative and accounting support and asset custody services to
professionals holding assets in trust (primarily legal and accounting firms). In
addition, United Trust also provides retail trust and investment management
services to individual and corporate clients.
NOTE 2 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information. In the opinion of management, all adjustments, consisting
primarily of normal recurring adjustments, necessary for a fair presentation of
the results for the interim periods have been made to fairly state the results
for the interim periods. The results of operations of the three months ended
March 31, 2000 are not necessarily indicative of the results expected for the
full year.
The organization and business of the Company, accounting policies followed by
the Company and other information are contained in the Company's December 31,
1999 Form 10-KSB. This quarterly report should be read in conjunction with such
annual report.
NOTE 3 - EARNINGS PER SHARE
Basic earnings per share are based on the weighted average number of common
shares outstanding during the periods. Diluted earnings per share includes the
weighted average number of common shares outstanding during the periods and the
further dilution from the conversion of the convertible debt and the preferred
stock and the exercise of stock options using the treasury stock method. The
following is a reconciliation of the numerators and denominators of the basic
and diluted earnings per share computations for the periods presented (dollars
in thousands, except per share data):
- 7 -
<PAGE>
For the three months ended March 31,
-------------------------------------
2000 1999
------------------------- ---------------------------
Weighted Per Weighted Per
Average Share Average Share
Earnings Shares Amount Earnings Shares Amount
-------- --------- ------ -------- --------- --------
Basic EPS
Net earnings available
to Common Stockholders $ 478 4,227,512 $ .11 $ 398 4,051,133 $ .10
====== ======
Effect of dilutive
securities Incremental
shares from assumed
exercise or
conversion of:
Convertible Debt 8 152,789 8 152,790
Preferred Stock 3 84,345 7 175,860
Stock Options - 54 - -
-------- --------- -------- ---------
Diluted EPS
Net earnings available
to Common
Stockholders and
assumed
conversions $ 489 4,464,700 $ .11 $ 413 4,379,783 $ .09
======== ========= ====== ======== ========= ======
NOTE 4 - BUSINESS SEGMENT INFORMATION
United Financial has three reportable segments: Commercial Banking, Trust
Services, and Investment Management Services. Corporate and Other includes
corporate expenses such as corporate overhead, intercompany transactions, and
certain goodwill amortization. The following table presents the Company's
Business Segment Information for the three months ended March 31, 2000 and 1999,
respectively(Dollars in Thousands):
(Continued on 8b)
- 8a -
<PAGE>
NOTE 4 - BUSINESS SEGMENT INFORMATION (Continued from 8a)
For the three months ended March 31, 2000
Commercial Investment Trust Corporate
Banking Management Services & Overhead Total
---------- ---------- -------- ---------- -------
Net Interest Income $ 2,678 $ - $ 51 $ (162) $ 2,567
Non Interest Income 431 419 363 (45) 1,168
---------- ---------- -------- ---------- -------
Total Revenue 3,109 419 414 (207) 3,735
Loan Loss Provision 150 - - - 150
Non Interest Expense 1,820 609 356 32 2,817
---------- ---------- -------- ---------- -------
Pretax Income (Loss) 1,139 (190) 58 (239) 768
Income Taxes (Benefit) 414 (71) 30 (86) 287
---------- ---------- -------- ---------- -------
Segment Net Income $ 725 $ (119) $ 28 $ (153) $ 481
========== ========== ======== ========== =======
For the three months ended March 31, 1999
Commercial Investment Trust Corporate
Banking Management Services & Overhead Total
---------- ---------- -------- ---------- -------
Net Interest Income $ 2,098 $ - $ 42 $ (156) $ 1,984
Non Interest Income 459 398 278 (12) 1,123
---------- ---------- -------- ---------- -------
Total Revenue 2,557 398 320 (168) 3,107
Loan Loss Provision 225 - - - 225
Non Interest Expense 1,547 427 273 - 2,247
---------- ---------- -------- ---------- -------
Pretax Income (Loss) 785 (29) 47 (168) 635
Income Taxes (Benefit) 279 (10) 22 (61) 230
---------- ---------- -------- ---------- -------
Segment Net Income $ 506 $ (19) $ 25 $ (107) $ 405
========== ========== ======== ========== =======
- 8b -
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
This report contains statements that constitute "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The
words "believe," "estimate," "expect," "intend," "anticipate," "plan" and
similar expressions and variations thereof identify certain of such
forward-looking statements which speak only as of the dates on which they were
made. The Company undertakes no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information, future
events, or otherwise. Readers are cautioned that any such forward-looking
statements are not guarantees of future performance and involve risks and
uncertainties, and that actual results may differ materially from those
indicated in the forward-looking statements as a result of various factors. Such
factors include, but are not limited to competition, general economic
conditions, potential changes in interest rates, and changes in the value of
real estate securing loans made by the Company.
COMPARISON OF BALANCE SHEETS AT MARCH 31, 2000 AND DECEMBER 31, 1999
Overview
Total assets of the Company were $223.5 million at March 31, 2000,
compared to $209.5 million at December 31, 1999, an increase of $14.0 million or
6.7%. This increase was primarily the result of the Company's internal growth of
earning assets (primarily federal funds sold and loans) funded by an increase in
deposits.
Investment Securities
Investment securities, consisting of U.S. Treasury and federal agency
securities, obligations of state and political subdivisions and mortgage-backed
and corporate debt securities, were $22.5 million at March 31, 2000, compared to
$24.4 million at December 31, 1999, a decrease of $1.9 million or 7.8%. Included
in investment securities at March 31, 2000, were $8.5 million of securities held
as "available for sale" to provide the Company greater flexibility to respond to
changes in interest rates and liquidity. These securities have been recorded at
market value.
Loans
Total loans were $160.3 million at March 31, 2000, compared to $156.9
million at December 31, 1999, an increase of $3.4 million or 2.2%. For the same
period, real estate mortgage loans increased by $.5 million or .5%, commercial
loans increased by $3.6 million or 8.6%, and all other loans including consumer
loans decreased by $.7 million or 10.3%. Loans net of allowance for loan loss
and unearned fees were $156.8 million at March 31, 2000 compared to $153.5
million at December 31, 1999.
- 9 -
<PAGE>
The following table sets forth information concerning the loan portfolio
by collateral types as of the dates indicated (dollars in thousands):
March 31, December 31,
2000 1999
-------------- --------------
Real estate mortgage loans:
Commercial real estate $ 82,279 $ 82,622
One-to-four family residential 8,406 7,933
Multifamily residential 13,798 13,603
Construction and land development 4,789 4,585
-------------- --------------
Total real estate mortgage loans 109,272 108,743
Commercial loans 44,935 41,358
Consumer loans 5,222 5,930
Other loans 846 839
-------------- --------------
Gross loans 160,275 156,870
Allowances for loan losses (2,449) (2,341)
Unearned fees (1,031) (1,032)
-------------- --------------
Total loans net of allowance
and unearned fees $ 156,795 $ 153,497
============= ==============
Asset Quality and Allowance for Loan Losses
The allowance for loan losses represents management's estimate of an
amount adequate to provide for potential losses within the existing loan
portfolio. The allowance is based upon an ongoing quarterly assessment of the
probable estimated losses inherent in the loan portfolio, and to a lesser
extent, unused commitments to provide financing.
The methodologies for assessing the appropriateness of the allowance
consist of several key elements, which include: 1) the formula allowance; 2)
review of the underlying collateral on specific loans; and 3) historical loan
losses. The formula allowance is calculated by applying loss factors to
outstanding loans and unused commitments, in each case based on the internal
risk grade of those loans. Changes in risk grades of both performing and
non-performing loans affect the amount of the formula allowance. On the larger
criticized or classified credits, a review is conducted of the underlying
collateral that secures each credit. A worse case scenario review is conducted
on those loans to calculate the amount, if any, of potential loss. The
historical loan loss method is a review of the last six years of actual losses.
The loss percentage is calculated and applied to the current outstanding loans
in total.
Various conditions that would affect the loan portfolio are also evaluated.
General economic and business conditions that affect the portfolio are reviewed
including: 1) credit quality trends including trends in past due and
non-performing loans; 2) collateral values in general; 3) loan volumes and
concentration; 4) recent loss experience in particular segments of the
portfolio; 5) duration and strength of the current business cycle; 6) bank
regulatory examination results; and 7) findings of the external loan review
process. Senior management and the Directors' General Loan Committee review
these conditions quarterly. If any of these conditions presents a problem to the
loan portfolio, an additional allocation may be recommended.
- 10 -
<PAGE>
The following table sets forth information concerning the activity in the
allowance for loan losses during the periods indicated (dollars in thousands):
For the three months ended
March 31, 2000 March 31, 1999
-------------- --------------
Allowance at beginning of period $ 2,341 $ 1,984
Charge-offs:
Real estate loans - -
Commercial loans 27 -
Consumer loans 15 2
-------------- --------------
Total charge-offs 42 2
Recoveries:
Real estate loans - -
Commercial loans - -
Consumer loans - -
-------------- --------------
Total recoveries - -
Net charge-offs 42 2
Provision for loan losses 150 225
-------------- --------------
Allowance at end of period $ 2,449 $ 2,207
============== ==============
Nonperforming Assets
Nonperforming assets include 1) loans which are 90 days or more past due
and have been placed into non-accrual status; 2) accruing loans that are 90 days
or more delinquent that are deemed by management to be adequately secured and in
the process of collection; and 3) ORE (i.e., real estate acquired through
foreclosure or deed in lieu of foreclosure). All delinquent loans are reviewed
on a regular basis and are placed on non-accrual status when, in the opinion of
management, the possibility of collecting additional interest is deemed
insufficient to warrant further accrual. As a matter of policy, interest is not
accrued on loans past due 90 days or more unless the loan is both well secured
and in process of collection. When a loan is placed in non-accrual status,
interest accruals cease and uncollected accrued interest is reversed and charged
against current income. Additional interest income on such loans is recognized
only when received.
The following table sets forth information regarding the components of
nonperforming assets at the dates indicated (dollars in thousands):
For the three months ended
March 31, 2000 December 31, 1999
-------------- -----------------
Real estate loans $ 2,041 $ 1,462
Commercial loans 522 453
Consumer loans - -
-------------- --------------
Total non-accrual loans 2,563 1,915
Other Real Estate 1,515 1,528
Accruing Loans 90 days past due.. 41 441
-------------- --------------
Total nonperforming assets $ 4,119 $ 3,884
============== ==============
Bank Premises and Equipment
Bank premises and equipment was $9.5 million at March 31, 2000, compared
to $9.6 million at December 31, 1999, a decrease of $.1 million or 1.0%. This
decrease was primarily due to the depreciation of the buildings and equipment
and amortization of leasehold improvements.
- 11 -
<PAGE>
Deposits
Total deposits were $186.7 million at March 31, 2000, compared to $175.1
million at December 31, 1999, an increase of $11.6 million or 6.6%. During the
three months ended March 31, 2000, demand deposits increased $5.1 million, NOW
and money market deposits increased $1.1 million, and savings deposits and time
deposits increased $5.4 million.
Long-term Debt and Convertible Subordinated Debentures
There was no long-term debt outstanding (excluding convertible
subordinated debentures) at either March 31, 2000 or December 31, 1999. During
both periods, $630 thousand in convertible subordinated debentures were
outstanding.
Mandatory Redeemable Capital Securities of Subsidiary Trust
In December 1998, the Company, through a statutory business trust created
and owned by the Company, issued approximately $6.7 million (including an
overallotment of approximately $750 thousand that closed on January 14, 1999) of
Trust Preferred Securities that will mature on December 10, 2028. The principal
assets of the Trust are Debentures issued to the Company in an aggregate amount
of $6.96 million, with an interest rate of 9.40% and a maturity date of December
10, 2028.
Stockholders' Equity
Stockholders' equity was $17.4 million at March 31, 2000, or 7.79% of
total assets, compared to $16.8 million, or 8.02% of total assets at December
31, 1999. At March 31, 2000, the Bank's Tier I (core) Capital ratio was 7.67%,
its Tier I Risk-based Capital ratio was 9.10%, and its Total Risk-based Capital
ratio was 10.35%. The capital ratios of the Bank at that date all exceeded the
minimum regulatory guidelines for an institution to be considered "well
capitalized". The increase in stockholders' equity was due to first quarter net
income, less dividends declared and changes in the market value of securities
available for sale, net of deferred taxes.
COMPARISON OF RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED
MARCH 31, 2000 AND 1999
Overview
Net income for the three months ended March 31, 2000 was $481 thousand or
$0.11 per share diluted, compared to $405 thousand or $0.09 per share diluted
for the same period in 1999. On a pre-tax basis, United Trust earned $59
thousand in 2000 versus $47 thousand in 1999, EPW's pre-tax operating profits
(before deducting $280 thousand of costs associated with a cash payment in lieu
of the issuance of performance shares) increased to $90 thousand from $61
thousand during this period and the Bank's pre-tax profits increased to $1,138
thousand from $785 thousand during this same period.
Analysis of Net Interest Income
Interest income for the three months ended March 31, 2000 was $4.3
million, compared to $3.3 million for the same period in 1999, a $1.0 million or
30.3% increase. This increase in interest income is primarily due to an increase
in earning assets, consisting mostly of loans as well as a general increase in
interest rates. Interest expense was $1.7 million for the three months ended
March 31, 2000, compared to $1.4 million for the same period in 1999, a $0.3
million or 21.4% increase. This increase is primarily due to an increase in
interest bearing liabilities as well as a general increase in interest rates.
- 12 -
<PAGE>
Provision for Loan Losses
For the three months ended March 31, 2000, the provision for loan losses
charged to expense was $150 thousand, compared to $225 thousand for the same
period in 1999, a decrease of $75 thousand or 33.3%. The allowance of possible
loan losses was $2.4 million at March 31, 2000. Management's judgment as to the
adequacy of the allowance is based upon a number of assumptions about the future
events which it believes to be reasonable, but which may or may not be accurate.
Because of the inherent uncertainty of assumptions made during the evaluation
process, there can be no assurance that loan losses in future periods will not
exceed the allowance for loan losses or that additional provisions will not be
required.
Noninterest Income
Noninterest income for the three months ended March 31, 2000 was $1.2
million compared to $1.1 million for the same period in 1999, an increase of
$0.1 million or 9.1%. This increase was primarily due to increased revenues from
EPW and United Trust whose combined revenues increased $106 thousand during this
period.
Noninterest Expense
Total noninterest expense for the three months ended March 31, 2000 was
$2.8 million compared to $2.2 million for the same period in 1999, an increase
of $0.6 million or 27.3%. This increase was due to increases in salary and
benefits expense of $340 thousand (which includes $280 thousand related to the
cash payment in lieu of the issuance of performance shares pursuant to the
acquisition of EPW), furniture and equipment expense of $24 thousand, data
processing expense of $9 thousand, and other operating expense of $207 thousand,
which includes $111 thousand in consulting expense and REO expense of $23
thousand.
LIQUIDITY
During the three months ended March 31, 2000, the Company's primary
sources of funds consisted of deposit inflows and proceeds from the maturity and
principal repayment of securities available for sale. The Company used its
capital resources principally to fund existing and continuing loan commitments,
to purchase loan participations and to purchase overnight investments (i.e.
federal funds sold). At March 31, 2000, the Company had commitments to originate
loans totaling $7.8 million. Management believes the Company has adequate
resources to fund all its commitments. Management also believes that, if so
desired, it can adjust the rates on time deposits to retain deposits in a
changing interest rate environment. As a Florida-chartered commercial bank, the
Bank is required to maintain a liquidity reserve of at least 15% of its total
transaction accounts and 8% of its total nontransaction accounts less those
deposits of certain public funds. The liquidity reserve may consist of cash on
hand, cash on demand with other correspondent banks and other investments and
short-term marketable securities as defined, such as federal funds sold and
United States securities or securities guaranteed by the United States. As of
March 31, 2000, the Bank had liquidity of approximately $29.7 million, or
approximately 15% of total deposits.
Management believes the Bank was in compliance with all minimum capital
requirements that it was subject to at March 31, 2000.
- 13 -
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company and the Bank are parties to various legal proceedings in
the ordinary course of business. Management does not believe that there is any
pending or threatened proceeding against the Company or the Bank which, if
determined adversely, would have a material effect on the business, results of
operations, or financial position of the Company or the Bank.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
The following shares of United Financial common stock, par value $0.01
per share ("United Financial Common Stock"), were issued during the three months
ended March 31, 2000:
On January 31, 2000, an aggregate of 51,827 shares were issued to
certain officers of United Trust pursuant to an incentive stock plan established
in connection with the acquisition of Fiduciary Services Corporation ("FSC").
Under the plan, no additional cash or consideration was received by the Company
pursuant to the issuance of such shares. These shares of common stock were
issued in reliance upon the exemption from registration under Section 4(2) of
the Securities Act of 1933 as transactions by an issuer not involving any public
offering. The recipients of the securities issued represented their intentions
to acquire the securities for investment only and not with a view for resale or
distribution and appropriate legends were affixed to the share certificates
issued.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SHAREHOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10 Data Processing Services contract with FiServ Solutions, Inc.
27 Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the period ending March 31,
2000.
- 14 -
<PAGE>
UNITED FINANCIAL HOLDINGS, INC. AND SUBSIDIARIES
SIGNATURES
Under the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNITED FINANCIAL HOLDINGS, INC.
(Registrant)
Date: May 5, 2000 By: /s/ NEIL W. SAVAGE
--------------- -------------------
Neil W. Savage
President and
Chief Executive Officer
Date: May 5, 2000 By: /s/ C. PETER BARDIN
--------------- --------------------
C. Peter Bardin
Senior Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
- 15 -
Agreement Number:
AGREEMENT
between
FISERV SOLUTIONS, INC.
255 Fiserv Drive
Brookfield, WI 53045-5815
and
UNITED BANK & TRUST COMPANY
5801 49th Street North
St. Petersburg, Florida 33733
Date: DECEMBER 1999
FISERV
<PAGE>
AGREEMENT dated as of ("Agreement") between FISERV SOLUTIONS, INC., a Wisconsin
corporation ("Fiserv"), and United Bank & Trust Company , a Florida Financial
Institution ("Client").
================================================================================
Fiserv and Client hereby agree as follows:
1. Term. The initial term of this Agreement shall be 5 years and, unless
written notice of non-renewal is provided by either party at least 180
days prior to expiration of the initial term or any renewal term, this
Agreement shall automatically renew for a renewal term of 5 years.
This Agreement shall commence on the earliest of the day Fiserv
Services (as defined below) are first used by Client or .
2. Services. (a) Services Generally. Fiserv, itself and through its
affiliates, agrees to provide Client, and Client agrees to obtain from
Fiserv services ("Services") and products ("Products") (collectively,
"Fiserv Services") described in the attached Exhibits:
Exhibit A - Account Processing Services
Exhibit H - Additional Services (Disaster Recovery)
The Exhibits set forth specific terms and conditions applicable to the
Services and/or Products, and, where applicable, the Fiserv affiliate so
performing. Client may select additional services and products from time to time
by incorporating an appropriate Exhibit to this Agreement.
(b) Conversion Services. Fiserv will convert Client's existing applicable
data and/or information to the Fiserv Services. Those activities designed to
transfer the processing from Client's present servicer to the Fiserv Services
are referred to as "Conversion Services". Client agrees to cooperate with Fiserv
in connection with Fiserv's provision of Conversion Services and to provide all
necessary information and assistance to facilitate the conversion. Client is
responsible for all out-of-pocket expenses associated with the Conversion
Services. Fiserv will provide Conversion Services as required in connection with
Fiserv Services.
(c) Training Services. Fiserv shall provide training, training aids, user
manuals, and other documentation for Client's use as Fiserv finds necessary to
enable Client personnel to become familiar with Fiserv Services. If requested by
Client, classroom training in the use and operation of Fiserv Services will be
provided at a training facility designated by Fiserv. All such training aids and
manuals remain Fiserv's property.
3. Fees for Fiserv Services. (a) General. Client agrees to pay Fiserv:
(i) estimated fees for Fiserv Services for the following month as
specified in the Exhibits; (ii) estimated out-of-pocket charges for the
following month payable by Fiserv for the account of Client; and (iii)
estimated Taxes (as defined below) thereon (collectively, "Estimated
Fees").
Fiserv shall timely reconcile Estimated Fees paid by Client for the Fiserv
Services for the month and the fees and charges actually due Fiserv based on
Client's actual use of Fiserv Services for such month. Fiserv shall either issue
a credit to Client or provide Client with an invoice for any additional fees or
other charges owed. Fiserv may change the amount of Estimated Fees billed to
master.1197 FISERV
- 1 -
<PAGE>
reflect appropriate changes in actual use of Fiserv Services. Estimated Fees may
be increased from time to time as set forth in the Exhibits. Upon notification
to and acceptance by Client, Fiserv may increase its fees in excess of amounts
listed in the Exhibits in the event that Fiserv implements major system
enhancements to comply with changes in law, government regulation, or industry
practices.
(b) Additional Charges. Fees for out-of-pocket expenses, such as
telephone, microfiche, courier, and other charges incurred by Fiserv for goods
or services obtained by Fiserv on Client's behalf shall be billed to Client at
cost plus the applicable Fiserv administrative fee. Such out-of-pocket expenses
may be changed from time to time upon notification of a fee change from a
vendor/provider.
(c) Taxes. Fiserv shall add to each invoice any sales, use, excise,
value added, and other taxes and duties however designated that are levied by
any taxing authority relating to the Fiserv Services ("Taxes"). In no event
shall "Taxes" include taxes based upon the net income of Fiserv.
(d) Exclusions. The Estimated Fees do not include, and Client shall be
responsible for, furnishing transportation or transmission of information
between Fiserv's service center(s), Client's site(s), and any applicable
clearing house, regulatory agency, or Federal Reserve Bank.
(e) Payment Terms. Estimated Fees are due and payable monthly upon receipt
of invoice. Client shall pay Fiserv through the Automated Clearing House. In the
event any amounts due remain unpaid beyond the 30th day after payment is due,
Client shall pay a late charge of 1.5% per month. Client agrees that it shall
neither make nor assert any right of deduction or set-off from Estimated Fees on
invoices submitted by Fiserv for Fiserv Services.
4. Access to Fiserv Services. (a) Procedures. Client agrees to
comply with applicable regulatory requirements and procedures for use of
Services established by Fiserv.
(b) Changes. Fiserv continually reviews and modifies Fiserv systems used
in the delivery of Services (the "Fiserv System") to improve service and comply
with government regulations, if any, applicable to the data and information
utilized in providing Services. Fiserv reserves the right to make changes in
Services, including but not limited to operating procedures, type of equipment
or software resident at, and the location of Fiserv's service center(s). Fiserv
will notify Client of any material change that affects Client's normal operating
procedures, reporting, or service costs prior to implementation of such change.
(c) Communications Lines. Fiserv shall order the installation of
appropriate communication lines and equipment to facilitate Client's access to
Services. Client understands and agrees to pay charges relating to the
installation and use of such lines and equipment as set forth in the Exhibits.
(d) Terminals and Related Equipment. Client shall obtain necessary and
sufficient terminals and other equipment, approved by Fiserv and compatible with
the Fiserv System, to transmit and receive data and information between Client's
location(s), Fiserv's service center(s), and/or other necessary location(s).
Fiserv and Client may mutually agree to change the type(s) of terminal and
equipment used by Client.
master.1197 FISERV
- 2 -
<PAGE>
5. Client Obligations. (a) Input. Client shall be solely responsible
for the input, transmission, or delivery to and from Fiserv of all information
and data required by Fiserv to perform Services unless Client has retained
Fiserv to handle such responsibilities, as specifically set forth in the
Exhibits. The information and data shall be provided in a format and manner
approved by Fiserv. Client will provide at its own expense or procure from
Fiserv all equipment, computer software, communication lines, and interface
devices required to access the Fiserv System. If Client has elected to provide
such items itself, Fiserv shall provide Client with a list of compatible
equipment and software; Client agrees to pay Fiserv's standard fee for
recertification of the Fiserv System resulting therefrom.
(b) Client Personnel. Client shall designate appropriate Client personnel
for training in the use of the Fiserv System, shall supply Fiserv with
reasonable access to Client's site during normal business hours for Conversion
Services and shall cooperate with Fiserv personnel in their performance of
Services, including Conversion Services.
(c) Use of Fiserv System. Client shall (i) comply with any operating
instructions on the use of the Fiserv System provided by Fiserv; (ii) review all
reports furnished by Fiserv for accuracy; and (iii) work with Fiserv to
reconcile any out of balance conditions. Client shall determine and be
responsible for the authenticity and accuracy of all information and data
submitted to Fiserv.
(d) Client's Systems. Client shall be responsible for ensuring that its
systems are Year 2000 compliant and capable of passing and/or accepting date
formats from and/or to the Fiserv System.
6. Ownership and Confidentiality. (a) Definition.
(i) Client Information. "Client Information" means: (A) confidential
plans, customer lists, information, and other proprietary material of
Client that is marked with a restrictive legend, or if not so marked with
such legend or is disclosed orally, is identified as confidential at the
time of disclosure (and written confirmation thereof is promptly provided
to Fiserv); and (B) any information and data concerning the business and
financial records of Client's customers prepared by or for Fiserv, or used
in any way by Fiserv in connection with the provision of Fiserv Services
(whether or not any such information is marked with a restrictive legend).
(ii) Fiserv Information. "Fiserv Information" means: (A) confidential
plans, information, research, development, trade secrets, business affairs
(including that of any Fiserv client, supplier, or affiliate), and other
proprietary material of Fiserv that is marked with a restrictive legend,
or if not so marked with such legend or is disclosed orally, is identified
as confidential at the time of disclosure (and written confirmation
thereof is promptly provided to Client); and (B) Fiserv's proprietary
computer programs, including custom software modifications, software
documentation and training aids, and all data, code, techniques,
algorithms, methods, logic, architecture, and designs embodied or
incorporated therein (whether or not any such information is marked with a
restrictive legend).
master.1197 FISERV
- 3 -
<PAGE>
(iii) Information. "Information" means Client Information and Fiserv
Information. No obligation of confidentiality applies to any Information
that the receiving party ("Recipient") (A) already possesses without
obligation of confidentiality; (B) develops independently; or (C)
rightfully receives without obligation of confidentiality from a third
party. No obligation of confidentiality applies to any Information that
is, or becomes, publicly available without breach of this Agreement.
(b) Obligations. Recipient agrees to hold as confidential all Information
it receives from the disclosing party ("Discloser"). All Information shall
remain the property of Discloser or its suppliers and licensors. Information
will be returned to Discloser at the termination or expiration of this
Agreement. Recipient will use the same care and discretion to avoid disclosure
of Information as it uses with its own similar information that it does not wish
disclosed, but in no event less than a reasonable standard of care. Recipient
may use Information for any purpose that does not violate such obligation of
confidentiality. Recipient may disclose Information to (i) employees and
employees of affiliates who have a need to know; and (ii) any other party with
Discloser's written consent. Before disclosure to any of the above parties,
Recipient will have a written agreement with such party sufficient to require
that party to treat Information in accordance with this Agreement. Recipient may
disclose Information to the extent required by law. However, Recipient agrees to
give Discloser prompt notice so that it may seek a protective order. The
provisions of this sub-section survive any termination or expiration of this
Agreement.
(c) Residuals. Nothing contained in this Agreement shall restrict
Recipient from the use of any ideas, concepts, know-how, or techniques contained
in Information that are related to Recipient's business activities
("Residuals"), provided that in so doing, Recipient does not breach its
obligations under this Section. However, this does not give Recipient the right
to disclose the Residuals except as set forth elsewhere in this Agreement.
(d) Fiserv System. The Fiserv System contains information and computer
software that are proprietary and confidential information of Fiserv, its
suppliers, and licensors. Client agrees not to attempt to circumvent the devices
employed by Fiserv to prevent unauthorized access to the Fiserv System,
including, but not limited to, alterations, decompiling, disassembling,
modifications, and reverse engineering thereof.
(e) Confidentiality of this Agreement. Fiserv and Client agree to keep
confidential the prices, terms and conditions of this Agreement, without
disclosure to third parties.
7. Regulatory Agencies, Regulations and Legal Requirements. (a) Client
Files. Records maintained and produced for Client ("Client Files") may be
subject to examination by such Federal, State, or other governmental regulatory
agencies as may have jurisdiction over Client's business to the same extent as
such records would be subject if maintained by Client on its own premises.
Client agrees that Fiserv is authorized to give all reports, summaries, or
information contained in or derived from the data or information in Fiserv's
possession relating to Client when formally requested to do so by an authorized
regulatory or government agency.
(b) Compliance with Regulatory Requirements. Client agrees to comply
with applicable regulatory and legal requirements, including without limitation:
master.1197 FISERV
- 4 -
<PAGE>
(i) submitting a copy of this Agreement to the appropriate regulatory
agencies prior to the date Services commence; (ii) providing adequate
notice to the appropriate regulatory agencies of the termination of this
Agreement or any material changes in Services; (iii) retaining records of
its accounts as required by regulatory authorities; (iv) obtaining and
maintaining, at its own expense, any Fidelity Bond required by any
regulatory or governmental agency; and (v) maintaining, at its own
expense, such casualty and business interruption insurance coverage for
loss of records from fire, disaster, or other causes, and taking such
precautions regarding the same, as may be required by regulatory
authorities.
8. Warranties. (a)Fiserv Warranties. Fiserv represents and warrants that:
(i)(A) Services will conform to the specifications set forth in the
Exhibits; (B) Fiserv will perform Client's work accurately provided that
Client supplies accurate data and information, and follows the procedures
described in all Fiserv documentation, notices, and advices; (C) Fiserv
personnel will exercise due care in provision of Services; (D) the Fiserv
System will comply in all material respects with all applicable Federal
and State regulations governing Services; and (E) the Fiserv System is or
will be Year 2000 compliant. In the event of an error or other default
caused by Fiserv personnel, systems, or equipment, Fiserv shall correct
the data or information and/or reprocess the affected item or report at no
additional cost to Client. Client agrees to supply Fiserv with a written
request for correction of the error within 7 days after Client's receipt
of the work containing the error. Work reprocessed due to errors in data
supplied by Client, on Client's behalf by a third party, or by Client's
failure to follow procedures set forth by Fiserv shall be billed to Client
at Fiserv's then current time and material rates; and (ii) it owns or has
a license to furnish all equipment or software comprising the Fiserv
System. Fiserv shall indemnify Client and hold it harmless against any
claim or action that alleges that the Fiserv System use infringes a United
States patent, copyright, or other proprietary right of a third party.
Client agrees to notify Fiserv promptly of any such claim and grants
Fiserv the sole right to control the defense and disposition of all such
claims. Client shall provide Fiserv with reasonable cooperation and
assistance in the defense of any such claim.
THE WARRANTIES STATED ABOVE ARE LIMITED WARRANTIES AND ARE THE ONLY WARRANTIES
MADE BY FISERV. FISERV DOES NOT MAKE, AND CLIENT HEREBY EXPRESSLY WAIVES, ALL
OTHER WARRANTIES, INCLUDING WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. THE STATED EXPRESS WARRANTIES ARE IN LIEU OF ALL LIABILITIES
OR OBLIGATIONS OF FISERV FOR DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE
DELIVERY, USE, OR PERFORMANCE OF FISERV SERVICES.
(b) Client Warranties. Client represents and warrants that: (A) no
contractual obligations exist that would prevent Client from entering into this
Agreement; (B) it has complied with all applicable regulatory requirements; and
(C) Client has requisite authority to execute, deliver, and perform this
Agreement. Client shall indemnify and hold harmless Fiserv, its officers,
directors, employees, and affiliates against any claims or actions arising out
of (X) the use by Client of the Fiserv System in a manner other than that
provided in this Agreement; and (Y) any and all claims by third parties through
master.1197 FISERV
- 5 -
<PAGE>
Client arising out of the performance and non-performance of Fiserv Services by
Fiserv, provided that the indemnity listed in clause (Y) hereof shall not
preclude Client's recovery of direct damages pursuant to the terms and subject
to the limitations of this Agreement.
9. Limitation of Liability. (a) General. IN NO EVENT SHALL FISERV BE
LIABLE FOR LOSS OF GOODWILL, OR FOR SPECIAL, INDIRECT, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES ARISING FROM CLIENT'S USE OF FISERV SERVICES, OR FISERV'S
SUPPLY OF EQUIPMENT OR SOFTWARE, REGARDLESS OF WHETHER SUCH CLAIM ARISES IN TORT
OR IN CONTRACT. CLIENT MAY NOT ASSERT ANY CLAIM AGAINST FISERV MORE THAN 2 YEARS
AFTER SUCH CLAIM ACCRUED. FISERV'S AGGREGATE LIABILITY FOR ANY AND ALL CAUSES OF
ACTION RELATING TO SERVICES SHALL BE LIMITED TO THE TOTAL FEES PAID BY CLIENT TO
FISERV FOR SERVICES RESULTING IN SUCH LIABILITY IN THE 2 MONTH PERIOD PRECEDING
THE DATE THE CLAIM ACCRUED. FISERV'S AGGREGATE LIABILITY FOR A DEFAULT RELATING
TO EQUIPMENT OR SOFTWARE SHALL BE LIMITED TO THE AMOUNT PAID BY CLIENT FOR THE
EQUIPMENT OR SOFTWARE.
(b) Lost Records. If Client's records or other data submitted for
processing are lost or damaged as a result of any failure by Fiserv, its
employees, or agents to exercise reasonable care to prevent such loss or damage,
Fiserv's liability on account of such loss or damages shall not exceed the
reasonable cost of reproducing such records or data from exact duplicates
thereof in Client's possession.
10. Disaster Recovery. (a) General. Fiserv maintains a disaster recovery
plan ("Disaster Recovery Plan") for each Service. A "Disaster" shall mean any
unplanned interruption of the operations of or inaccessibility to Fiserv's
service center in which Fiserv, using reasonable judgment, requires relocation
of processing to a recovery location. Fiserv shall notify Client as soon as
possible after Fiserv deems a service outage to be a Disaster. Fiserv shall move
the processing of Client's standard services to a recovery location as
expeditiously as possible and shall coordinate the cut-over to back-up
telecommunication facilities with the appropriate carriers. Client shall
maintain adequate records of all transactions during the period of service
interruption and shall have personnel available to assist Fiserv in implementing
the switchover to the recovery location. During a Disaster, optional or
on-request services shall be provided by Fiserv only to the extent adequate
capacity exists at the recovery location and only after stabilizing the
provision of base services.
(b) Communications. Fiserv shall work with Client to establish a plan
for alternative communications in the event of a Disaster.
(c) Disaster Recovery Test. Fiserv shall test the Disaster Recovery Plan
periodically. Client agrees to participate in and assist Fiserv with such test,
if requested by Fiserv. Upon Client request, test results will be made available
to Client's management, regulators, auditors, and insurance underwriters.
(d) Client Plans. Fiserv agrees to release information necessary
to allow Client's development of a disaster recovery plan that operates in
concert with the Disaster Recovery Plan.
(e) No Warranty. Client understands and agrees that the Disaster Recovery
Plan is designed to minimize, but not eliminate, risks associated with a
master.1197 FISERV
- 6 -
<PAGE>
Disaster affecting Fiserv's service center(s). Fiserv does not warrant that
Fiserv Services will be uninterrupted or error free in the event of a Disaster;
no performance standards shall be applicable for the duration of a Disaster.
Client maintains responsibility for adopting a disaster recovery plan relating
to disasters affecting Client's facilities and for securing business
interruption insurance or other insurance necessary for Client's protection.
11. Termination. (a) Material Breach. Except as provided elsewhere
in this Section 11, either party may terminate this Agreement in the event of
a material breach by the other party not cured within 90 days following
written notice stating, with particularity and in reasonable detail, the nature
of the claimed breach.
(b) Failure to Pay. In the event any invoice remains unpaid by Client 30
days after due, or Client deconverts any data or information from the Fiserv
System without prior written consent of Fiserv, Fiserv, at its sole option, may
terminate this Agreement and/or Client's access to and use of Fiserv Services.
Any invoice submitted by Fiserv shall be deemed correct unless Client provides
written notice to Fiserv within 15 days of the invoice date specifying the
nature of the disagreement.
(c) Remedies. Remedies contained in this Section 11 are cumulative and are
in addition to the other rights and remedies available to Fiserv under this
Agreement, by law or otherwise.
(d) Defaults. If Client:
(i) defaults in the payment of any sum of money due;
(ii) breaches this Agreement in any material respect or otherwise defaults
in any material respect in the performance of any of its obligations; or
iii) commits an act of bankruptcy or becomes the subject of any proceeding
under the Bankruptcy Code or becomes insolvent or if any substantial part
of Client's property becomes subject to any levy, seizure, assignment,
application, or sale for or by any creditor or governmental agency; then,
in any such event, Fiserv may, upon written notice, terminate this
Agreement and be entitled to recover from Client as liquidated damages an
amount equal to the present value of all payments remaining to be made
hereunder for the remainder of the initial term or any renewal term of this
Agreement. For purposes of the preceding sentence, present value shall be
computed using the "prime" rate (as published in The Wall Street Journal)
in effect at the date of termination and "all payments remaining to be
made" shall be calculated based on the average bills for the 3 months
immediately preceding the date of termination. Client agrees to reimburse
Fiserv for any expenses Fiserv may incur, including reasonable attorneys'
fees, in taking any of the foregoing actions.
(e) Convenience. Client may terminate this Agreement during any term by
paying a termination fee based on the remaining unused term of this Agreement,
the amount to be determined by multiplying Client's largest monthly invoice for
each Fiserv Service received by Client during the term (or if no monthly invoice
has been received, the sum of the estimated monthly billing for each Fiserv
Service to be received hereunder) by 80% times the remaining months of the term,
plus any unamortized conversion fees or third party costs existing on Fiserv's
books on the date of termination. Client understands and agrees that Fiserv
master.1197 FISERV
- 7 -
<PAGE>
losses incurred as a result of early termination of the Agreement would be
difficult or impossible to calculate as of the effective date of termination
since they will vary based on, among other things, the number of clients using
the Fiserv System on the date the Agreement terminates. Accordingly, the amount
set forth in the first sentence of this subsection represents Client's agreement
to pay and Fiserv's agreement to accept as liquidated damages (and not as a
penalty) such amount for any such Client termination.
(f) Merger. In the event of a merger between Client and another
organization in which Client is not the surviving organization and where the
other organization was not previously a user of Fiserv services similar to the
Services, Fiserv will allow an early termination of this Agreement upon the
following terms and conditions:
(i) written notice must be given 3 months in advance, specifying the
termination date; (ii) Fiserv may specify a deconversion date based on its
previous commitments and work loads; and (iii) Fiserv may charge a
termination fee in accordance with subsection (e) above.
(g) Return of Data Files. Upon expiration or termination of this
Agreement, Fiserv shall furnish to Client such copies of Client Files as Client
may request in Fiserv's standard machine readable format along with such
information and assistance as is reasonable and customary to enable Client to
deconvert from the Fiserv System, provided, however, that Client consents and
agrees and authorizes Fiserv to retain Client Files until (i) Fiserv is paid in
full for (A) all Services provided through the date such Client Files are
returned to Client; and (B) any and all other amounts that are due or will
become due under this Agreement; (ii) Fiserv is paid its then standard rates for
the services necessary to return such Client Files; (iii) if this Agreement is
being terminated, Fiserv is paid any applicable termination fee pursuant to
subsection (d), (e), or (f) above; and (iv) Client has returned to Fiserv all
Fiserv Information. Unless directed by Client in writing to the contrary, Fiserv
shall be permitted to destroy Client Files any time after 30 days from the final
use of Client Files for processing.
(h) Miscellaneous. Client understands and agrees that Client is
responsible for the deinstallation and return shipping of any Fiserv-owned
equipment located on Client's premises.
12. Arbitration. (a) General. Except with respect to disputes arising from
a misappropriation or misuse of either party's proprietary rights, any dispute
or controversy arising out of this Agreement, or its interpretation, shall be
submitted to and resolved exclusively by arbitration under the rules then
prevailing of the American Arbitration Association, upon written notice of
demand for arbitration by the party seeking arbitration, setting forth the
specifics of the matter in controversy or the claim being made. The arbitration
shall be heard before an arbitrator mutually agreeable to the parties; provided,
that if the parties cannot agree on the choice of arbitrator within 10 days
after the first party seeking arbitration has given written notice, then the
arbitration shall be heard by three arbitrators, one chosen by each party, and
the third chosen by those two arbitrators. The arbitrators will be selected from
a panel of persons having experience with and knowledge of information
technology and at least one of the arbitrators selected will be an attorney. A
hearing on the merits of all claims for which arbitration is sought by either
master.1197 FISERV
- 8 -
<PAGE>
party shall be commenced not later than 60 days from the date demand for
arbitration is made by the first party seeking arbitration. The arbitrator(s)
must render a decision within 10 days after the conclusion of such hearing. Any
award in such arbitration shall be final and binding upon the parties and the
judgment thereon may be entered in any court of competent jurisdiction.
(b) Applicable Law. The arbitration shall be governed by the United
States Arbitration Act, 9 U.S.C. 1-16. The arbitrators shall apply the
substantive law of the State of Wisconsin, without reference to provisions
relating to conflict of laws. The arbitrators shall not have the power to alter,
modify, amend, add to, or subtract from any term or provision of this Agreement,
nor to rule upon or grant any extension, renewal, or continuance of this
Agreement. The arbitrators shall have the authority to grant any legal remedy
available had the parties submitted the dispute to a judicial proceeding.
(c) Situs. If arbitration is required to resolve any disputes between the
parties, the proceedings to resolve the first such dispute shall be held in
Atlanta, Georgia, the proceedings to resolve the second such dispute shall be
held in St. Petersburg, Florida, and the proceedings to resolve any subsequent
disputes shall alternate between Atlanta, Georgia and St. Petersburg, Florida.
13. Insurance. Fiserv carries the following types of insurance policies:
(i) Comprehensive General Liability in an amount not less than $1 million
per occurrence for claims arising out of bodily injury and property
damage; (ii) Commercial Crime covering employee dishonesty in an amount
not less than $5 million; (iii) All-risk property coverage including Extra
Expense and Business Income coverage; and (iv) Workers Compensation as
mandated or allowed by the laws of the state in which Services are being
performed, including $500,000 coverage for Employer's Liability.
14. Audit. Fiserv employs an internal auditor responsible for ensuring the
integrity of its processing environments and internal controls. In addition,
Fiserv provides for periodic independent audits of its operations. Fiserv shall
provide Client with a copy of the audit of the Fiserv service center providing
Services within a reasonable time after its completion and shall charge each
client a fee based on the pro rata cost of such audit. Fiserv shall also provide
a copy of such audit to the appropriate regulatory agencies, if any, having
jurisdiction over Fiserv's provision of Services.
15. General. (a) Binding Agreement. This Agreement is binding upon
the parties and their respective successors and permitted assigns. Neither
this Agreement nor any interest may be sold, assigned, transferred, pledged,
or otherwise disposed of by Client, whether pursuant to change of control or
otherwise, without Fiserv's prior written consent. Client agrees that
Fiserv may subcontract any Services to be performed hereunder. Any such
subcontractors shall be required to comply with all applicable terms and
conditions.
(b) Entire Agreement. This Agreement, including its Exhibits, which are
expressly incorporated herein by reference, constitutes the complete and
exclusive statement of the agreement between the parties as to the subject
matter hereof and supersedes all previous agreements with respect thereto.
Modifications of this Agreement must be in writing and signed by duly authorized
- 9 -
<PAGE>
representatives of the parties. Each party hereby acknowledges that it has not
entered into this Agreement in reliance upon any representation made by the
other party not embodied herein. In the event any of the provisions of any
Exhibit are in conflict with any of the provisions of this Agreement, the terms
and provisions of this Agreement shall control unless the Exhibit in question
expressly provides that its terms and provisions shall control.
(c) Severability. If any provision of this Agreement is held to be
unenforceable or invalid, the other provisions shall continue in full force and
effect.
(d) Governing Law. This Agreement will be governed by the
substantive laws of the State of Wisconsin, without reference to provisions
relating to conflict of laws. The United Nations Convention of Contracts for
the International Sale of Goods shall not apply to this Agreement.
(e) Force Majeure. Neither party shall be responsible for delays or
failures in performance resulting from acts reasonably beyond the control of
that party.
(f) Notices. Any written notice required or permitted to be given
hereunder shall be given by: (i) Registered or Certified Mail, Return Receipt
Requested, postage prepaid; (ii) confirmed facsimile; or (iii) nationally
recognized courier service to the other party at the addresses listed on the
cover page or to such other address or person as a party may designate in
writing. All such notices shall be effective upon receipt.
(g) No Waiver. The failure of either party to insist on strict
performance of any of the provisions hereunder shall not be construed as the
waiver of any subsequent default of a similar nature.
(h) Financial Statements. Fiserv shall provide Client and the appro-
priate regulatory agencies so requiring a copy of Fiserv, Inc.'s audited
consolidated financial statements.
(i) Prevailing Party. The prevailing party in any arbitration, suit, or
action brought against the other party to enforce the terms of this Agreement or
any rights or obligations hereunder, shall be entitled to receive its reasonable
costs, expenses, and attorneys' fees of bringing such arbitration, suit, or
action.
(j) Survival. All rights and obligations of the parties under this
Agreement that, by their nature, do not terminate with the expiration or
termination of this Agreement shall survive the expiration or termination of
this Agreement.
(k) Exclusivity. Client agrees that Fiserv shall be the sole and exclusive
provider of the services that are the subject matter of this Agreement. For
purposes of the foregoing, the term "Client" shall include Client affiliates.
During the term of this Agreement, Client agrees not to enter into an agreement
with any other entity to provide these services (or similar services) without
Fiserv's prior written consent. If Client acquires another entity, the
exclusivity provided to Fiserv hereunder shall take effect with respect to such
acquired entity as soon as practicable after termination of such acquired
master.1197 FISERV
- 10 -
<PAGE>
entity's previously existing arrangement for these services. If Client is
acquired by another entity, the exclusivity provided to Fiserv hereunder shall
apply with respect to the level or volume of these services provided immediately
prior to the signing of the definitive acquisition agreement relating to such
acquisition and shall continue with respect to the level or volume of these
services until any termination or expiration of this Agreement.
(l) Recruitment of Employees. Client agrees not to hire Fiserv's employees
during the term of this Agreement and for a period of 6 months after any
termination or expiration thereof, except with Fiserv's prior written consent.
================================================================================
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized representatives as of the date indicated below.
For Client: For Fiserv:
UNITED BANK & TRUST COMPANY FISERV SOLUTIONS, INC.
By: By:
Name: Name: William L. Kenney
Title: Title: President Fiserv Atlanta
Date: Date:
master.1197 FISERV
- 11 -
<PAGE>
ADDENDUM TO AGREEMENT
BETWEEN
UNITED BANK & TRUST COMPANY
AND
FISERV SOLUTIONS, INC.
11. Termination (g) Return of Data Files.
Unless directed by Client in writing to the contrary, Fiserv shall be
permitted to destroy Client Files any time after the end of the
calendar year immediately following the final use of Client Files for
processing. Files maintained will be the LAST END OF MONTH prior to
Client deconversion from Fiserv processing.
ACCEPTED BY:
For Client: For Fiserv:
UNITED BANK & TRUST COMPANY FISERV SOLUTIONS, INC.
By: By:
Name: Name: William L. Kenney
Title: Title: President Fiserv Atlanta
Date: Date:
master.1197 FISERV
- 12 -
<PAGE>
Exhibit A
Account Processing Services
Client agrees with Fiserv as follows:
1. Services. Fiserv will provide Client the Account Processing
Services ("Account Processing Services") specified in Exhibit A - 1.
2. Fees. Client shall pay Fiserv fees and other charges for Account
Processing Services specified in Exhibit A - 2.
3. Responsibility for Accounts. Client shall be responsible for balancing
its accounts each business day and notifying Fiserv immediately of any errors or
discrepancies. Provided that Client immediately notifies Fiserv of any
discrepancy in Client's accounts, Fiserv shall, at its expense, promptly
recompute accounts affected by discrepancies solely caused by the Fiserv Systems
or provide for another mutually agreeable resolution. Fiserv will use its
commercially reasonable efforts to correct errors attributable to Client or
Client's other third party servicers. Reconstruction of error conditions
attributable to Client or to third parties acting on Client's behalf will be
done at prevailing rates as set forth in Exhibit A - 2.
4. Annual Histories. Fiserv currently maintains annual histories, where
applicable, for its clients. These histories can be used to reconstruct Client
Files in an emergency. However, in order to permit prompt and accurate
reconstruction of accounts, Client agrees to retain at all times and make
available to Fiserv upon request the most recent data printout(s) received from
Fiserv, together with copies or other accurate and retrievable records of all
transactions to be reflected on the next consecutive printout(s).
5. Hours of Operation. Account Processing Services will be available for
use by Client during standard Fiserv business hours, excluding holidays, as
specified in Exhibit A - 3. Account Processing Services may be available during
additional hours, during which time Client may use Services at its option and
subject to additional charges.
6. Protection of Data. (a) For the purpose of compliance with
applicable government regulations, Fiserv has an operations backup center,
for which Client agrees to pay the charges indicated in Exhibit A - 2. Copies
of transaction files are maintained by Fiserv off premises in secured vaults.
(b) Fiserv provides "on-line" security via utilization of leased lines
with poll/select protocol.
(c) Upon Client providing access to Client Files through Client's
customers' personal computers or voice response system, Client agrees to
indemnify and hold harmless Fiserv, its officers, directors, employees, and
affiliates against any claims or actions arising out of such access to Client
Files or any Fiserv files (including the files of other Fiserv clients) or the
Fiserv System or other Fiserv systems.
7. Processing Priority. Fiserv does not subscribe to any processing
priority; all users receive equal processing consideration.
master.1197 FISERV
- 13 -
<PAGE>
8. Forms and Supplies. Client assumes and will pay the charges for all
customized forms, supplies, and delivery charges. Custom forms ordered through
Fiserv will be subject to a 15% administrative fee for warehousing and inventory
control. Forms ordered by Client and warehoused at Fiserv will be subject to the
administrative fee set forth in Exhibit A - 2.
9. Regulatory Supervision. By entering into this Agreement, Fiserv agrees
that the Office of Thrift Supervision, FDIC, or other regulatory agencies having
authority over Client's operations shall have the authority and responsibility
provided to the regulatory agencies pursuant to the Bank Service Corporation
Act, 12 U.S.C. 1867(C) relating to services performed by contract or otherwise.
================================================================================
IN WITNESS WHEREOF, the parties hereto have caused this Exhibit A to
the Agreement to be executed by their duly authorized representatives as of the
date indicated below.
UNITED BANK & TRUST COMPANY FISERV SOLUTIONS, INC.
By: By:
Name: Name: William L. Kenney
Title: Title: President Fiserv Atlanta
Date: Date:
master.1197 FISERV
- 14 -
<PAGE>
Exhibit A-1
Account Processing Services
Fiserv will provide Client with the following Account Processing Services:
I. Services and/or functions to be performed by Fiserv:
A. Maintain the necessary computer equipment in order to provide
Client with complete electronic bookkeeping service for
Deposit Accounts, Certificate Accounts, Loan Accounts, Central
Information System, Account Analysis, ACH (Receiving), General
Ledger, and On-Line Documentation five (5) days per week. The
Information Technology, Inc. (ITI) Premier II Banking System
will be used for Client's application processing.
B. Provide necessary assistance to Client for the initial
set-up to convert to the Fiserv system. Customer Service is
provided by toll-free telephone as follows:
(1) Full Customer Service specialists for all applications,
Monday through Friday - 8:00 a.m. to 5:00 p.m. (EST)
(2) Limited telephone coverage, Monday through Friday - 5:00 p.m.
to 7:00 p.m. (EST)
(3) Emergency after hours Customer Service, via Beeper -
24 hours/day, 7 day/week
C. Receive transmitted transaction data from Client at Fiserv by
7:00 p.m. (EST) daily or receive transaction input at a Fiserv
center at mutually agreed time. If transaction data is not
received by this appropriate time, assurance cannot be made
for meeting the Client's scheduled needs the following day.
D. Reconcile Client's balancing totals.
E. Exercise reasonable care in handling data submitted to
Fiserv and hold all information received by Fiserv in
strictest confidence.
F. Calculate and provide figures for the daily accrual of
interest earned, late charges due, and service charges.
G. Transmit selected reports to Client's remote print facility
or Fiserv facility for printing.
II. Services, functions and requirements to be performed by Client for
participation in this agreement:
A. Purchase/lease all equipment required in the bank to utilize
the services provided by Fiserv.
B. Provide transmitted data to Fiserv's Computer Center daily by
7:00 p.m. EST, or provide input data to a Fiserv center by
mutually agreed times, records containing the necessary
information to process the applications.
master.1197 FISERV
- 15 -
<PAGE>
C. Provide information on new accounts, change of address,
changes of title and status change through the on-line data
entry system.
D. Repair and re-enter for reprocessing all rejected items,
handle return items and reconcile controls.
E. Verify signatures and stop payments, cancel and file
checks, microfilm, assemble and mail statements, handle
return items and reconcile controls.
F. Balance work daily to General Ledger Controls, verify new
and re-issued coupon books, and mail notices.
G. Print and distribute reports selected by Client.
H. Provide necessary transportation and Content Insurance
coverage To and From Fiserv facility.
III. Fiserv will provide the following ancillary support services included
in the monthly processing fee.
Refer to Ancillary Module Current Fees Schedule, Exhibit A-5.
master.1197 FISERV
- 16 -
<PAGE>
Exhibit A-2
Account Processing Services
Fiserv will provide Client with the following Account Processing Services at the
fees and prices indicated:
I. Fees to be paid monthly by Client to Fiserv for performance of the
services outlined in Section I:
A. Monthly Processing Fees
The Client will be charged a monthly fee of $ 0.60 per
account on file (Deposit & Loan).
The Client will be charged a monthly fee of $ 0.15 per
account on file (General Ledger).
Each anniversary of the Agreement, Deposit, Loan and General
Ledger Accounts will be averaged based on the previous 12
months and extended monthly for the next 12 month period.
B. Loan Coupon Books* $ 2.05 Each (Postage Additional)
C. Furnished by Client *
Postage/Courier Fees
Telephone Lines
Modems and Annual Modem Maintenance
In-Bank Terminal Equipment/Software
In-Bank Equipment/Software Maintenance
D. Conversion/Installation Fees $ WAIVED
A flat fee of $ 0 will be charged to convert to
Premier II plus travel and related expenses.
E. Supplies
All forms necessary to the daily operations of Fiserv's System
can be purchased through Fiserv at prices quoted at the time
of purchase.
F. Miscellaneous Services
20 Smart Reports will be provided and included in Base
Monthly Processing Fee. Additional services provided per
Exhibit A-4.
G. Platform/Teller Interfaces
$ 250.00 Each Per Function
(i.e. Deposit/Loan/Teller)
(Continued)
master.1197 FISERV
- 17 -
<PAGE>
EXHIBIT A-2 - continued
H. ATM/EFT Service
Installation Fees:
One-Time Charge $ 5,000.00
Per ATM Connect Fee $ 500.00
Per Network $ 500.00
Surcharge Set-Up $ 1,000.00
Surcharge Set-Up Per ATM $ 150.00
Communication Install Fee Pass Through
Monthly Charges
Fiserv Support $ 400.00
Network Support per Network $ 100.00
Card Base Record $ 0.06 Per Card
$ 100.00 Minimum
Per ATM Connect Fee $ 100.00 Per Device
Per ATM 7 X 24 Monitoring Fee $ 15.00 Per Device
Communication Line Cost Pass Through
Per Transaction Fees
ON/US Transaction Fees $ 0.10
Foreign Transaction Fees $ 0.10
Surcharge Transaction Fees $ 0.15 In
Addition
to Above
Transaction
Fees
ATM Cards
Plastic Stock Pass Through
New Card Order $ 1.75 Per Card
PIN Mailer $ 0.35 Per Mailer
Postage Pass Through
Non-Atlanta Host Authorization
One-Time Set-Up $ 1,500.00
Monthly Charge $ 500.00 Base Plus
$.06 Per
Card
Record On File
Positive Balance File (PBF)
One-Time Set-Up $ 1,500.00
Monthly Charge $ 600.00
Communications Charges Pass Through
Visa Debit Processing Per Separate Quote
I. End of Year Processing
Per fee schedule published annually.
(continued)
master.1197 FISERV
- 18 -
<PAGE>
EXHIBIT A-2 - continued
J. On-Line Terminal Support
Client will be charged a fee of $15.00 per on-line
device per month. (First 50 Devices Included)
K. Special Processing $ 85.00 Per Quarter
Hour
L. Programming/Consulting $ 85.00 Per Hour
M. On-Site Support/Training $ 900.00 Per Person
Per Day
Plus
Travel and
Related
Expenses.
N. Deconversion Fees
File formats and magnetic tapes in Fiserv format will be
provided to designated processor as requested in writing
providing the Client has no outstanding payments to Fiserv.
Charges for the creation and delivery of these files will be
computer run time or $2,500 per application per request,
whichever is greater. All consulting interpretation and
computer time required for the deconversion will be billed at
per hour current rates.
O. Charges for Services
The monthly processing fees defined may be changed annually
after the first anniversary of this Agreement. Each change
shall be limited to the lessor of five percent (5%) or the
change in the U.S. Department of Labor, Consumer Price Index
for the twelve (12) month period preceding the anniversary
date.
* All third party fees are subject to change without notice.
master.1197 FISERV
- 19 -
<PAGE>
Exhibit A-3
Hours of Operation
The Fiserv Account Processing Center will be in operation for On-Line
Accounting Processing Services in accordance with the following:
Monday 8:00 A.M. - 7:00 P.M.
Tuesday 8:00 A.M. - 7:00 P.M.
Wednesday 8:00 A.M. - 7:00 P.M.
Thursday 8:00 A.M. - 7:00 P.M.
Friday 8:00 A.M. - 7:00 P.M.
Saturday 8:00 A.M. - 4:00 P.M.
All times stated are in accordance with prevailing local times for the
Fiserv Account Processing Center. The Fiserv Account Processing Center will
observe national holidays, and will be closed for on-line operations.
master.1197 FISERV
- 20 -
<PAGE>
Exhibit A-4
MISCELLANEOUS SERVICES
REQUEST FEE
================================================================================
PRM SMART Reports & Pull Files $ 50 Per Report/File
CIS/6110/CIS/6030 Standard One Per Month
Safe Deposit Box Billing Additional at $50.00
Per Report
Safe Deposit Box Trial and Past Due Reports
CIS/6040 Standard One Per Month
Debit Card Reference Journal Additional at $50.00
Per Request
CIS/6111 Standard One Per Month
Debit Card Billing Additional at $50.00
Per Request
DDA/3000 $ 85 Per Request
"On-Demand" Statement Cycles
DDA/3800 $340 Per Request*
DDA Month End Account Profitability Analysis *One execution of
this program is
included with month
end processing.
Charge would only
apply to requests
other than month end.
DDA/6000 $170 Per Request*
DDA Balance Range Report *One execution
of this program
is included with
month end processing.
Charge would
only apply to
requests other
than month end.
DDA/6100 $100 Plus $.35 per
Audit Confirmations - DDA Confirmation
DDA/6002 $ 85 Per Request
Account Code/Cycle Distribution Report
DDA/6003 Standard at month end
DDA Holds Report only. Other requests
$85.00
DDA/6004 $ 85 Per Request
Report Errors Concerning DDA Stmts.
(Continued)
master.1197 FISERV
- 21 -
<PAGE>
Exhibit A-4 - (Continued)
SAV/6000 $170 Per Request*
SAV Balance Range Report *One execution
of this program
is included with
month end processing.
Charge would only
apply to requests
other than month end.
SAV/6100 $100 Plus $.35 per
Audit Confirmations - SAV Confirmation
SAV/6002 $ 85 Per Request
Account Code/Cycle Distribution Report
SAV/6003 Standard at month end
Report of SAV Holds only. Other requests
$85.
SAV/6007 Standard at month end
Automatic Transfers to DDA Report only. Other requests
$85.
SAV/6006 Standard at month end
Savings Balances Subject to Rate Change only. Other requests
$85.
COD/6006 $170 Per Request*
CD Analysis Reports *One execution of this
program is included
with month end
processing. Charge
would only apply to
requests other than
month end.
COD/6100 $100 Plus $.35 per
Audit Confirmations - CD Confirmation
COD/6002 $ 85 Per Request
Account Code/Cycle Distribution Report
COD/6003 $ 85 Per Request
Report of CD Holds
LAS/6013 Standard at month end
Loan Status Report - Reports by Period only. Other requests
$85.
LAS/6012 Standard at month end
FHA Title I Home Improvement Loan Reporting only. Other requests
$85.
(Continued)
master.1197 FISERV
- 22 -
<PAGE>
Exhibit A-4 - (Continued)
LAS/5202 Standard at month end
Escrow Addenda Reference Journal only. Other requests
$85.
LAS/5203 Standard at month end
Escrow Review Conversion only. Other requests
$85.
LAS/6007 $170 Per Request*
Loan Analysis Report *One execution of this
program is included
with month end
processing.Charge
would only apply to
requests other than
month end.
LAS/6100 $100 Plus $.35 per
Audit Confirmations - Loans Confirmation
LAS/6008 Standard at month end
Dealer, Source or Participated Report only. Other requests
$85.
LAS/6200 $ 85 Per Request
Line Transcript Statement Report
LAS/6201 $ 85 Per Request
Note Transcript Statement Report
LAS/6202 $ 85 Per Request
Note Statement
LAS/6009 $170 Per Request*
Direct/Indirect Liability Reporting *One execution
of this program
is included
with month end
processing. Charge
would only apply to
requests other than
month end.
LAS/6010 $ 85 Per Request
Extracts Source ID Numbers
Updates Market Prices
LAS/6011 $ 85 Per Request*
HMDA Reporting Code Analysis Reports *One execution of this
program is included
with month-end
processing.
(Continued)
master.1197 FISERV
- 23 -
<PAGE>
Exhibit A-4 - (Continued)
CIS/6401 $ 25 Per application plus
Cross Application Processing SMART plus $.15 per account.
Weekend processing
only.
CIS/6300 $ 50 Per Request
Specifications Reports
FMS/8200 $ 50 Per Request
Move Projected Budget to Current Budget
ADS/0900 $100 Per Applications $.01
Mass Maintenance $.01 Per Account on
File.
Specification Changes $ 25 Per Quarter Hour
Special Programming or Consulting $ 85 Per Hour
Computer Time for Special Client Request $ 85 Per Quarter Hour
Reshipping of Print Files $ 20 Per File
$100 Minimum
$500 Maximum per
Processing Day
master.1197 FISERV
- 24 -
<PAGE>
Exhibit A-4
PAPERLESS ITEM MODULE (PIM) SERVICES
Fiserv will provide PIM Services per the fees outlined below:
ACH Formatted File Input Service
Implementation Fee $ 85.00 Per Hour
$225.00 Minimum
Per Input Formatted File $ .01 Per Transaction
$ 30.00 Minimum Per File
ACH Origination Service
Implementation Fee $150.00
Per Monthly Fee $ 50.00 Plus $.01 Per
Transaction
$100.00 Monthly Minimum
Miscellaneous Service Fees subject to change.
master.1197 FISERV
- 25 -
<PAGE>
Exhibit A-5
ANCILLARY MODULES
ONE-TIME
DESCRIPTION FEE MONTHLY FEE
General Ledger Accounting System with
Cost Center Accounting N/A Included
Asset Liability Management System $2,000 $325
Bond Account System $1,500 $200
Check Reconciliation $1,500 $200
Base/
$35.00
Per Input
File
Fixed Asset System $1,500 $200
Stockholder Accounting System $1,500 $200
Accounts Payable System N/A Included
Loan Custodial Module $1,500 $200
Automated Collateral Insurance Reporting Module N/A $65
Per Tape
Automated Credit Reporting Insurance Reporting
Module N/A $65
Per Tape
(1 per
Month
Included)
Holding Company Reporting Module $3,000 $300
Federal Call Reporting Module N/A Included
Safe Deposit Box Accounting System N/A Included
On-Line Loan Collection Module $4,000 $350
Telebanc N/A Included
Execubanc Banking Module $5,000 Base $400
plus $.03
per Total
Accounts
on File
(Continued)
master.1197 FISERV
- 26 -
<PAGE>
Exhibit A-5 - (Continued)
PC Banc $5,000 Base $400
plus $.03
per Total
Accounts
on File
Director $5,000 $500
Prime Data Warehousing $5,000 Base $400
Hardware/Software Per Separate Quote Plus $.03
Third Party Training Additional Per Total
Accounts
on File
(Monthly)
Base $400
Plus $.06
Per Total
Accounts
on file
(Weekly)
NetBanc (Internet Banking) Per Separate Quote
Paperless Item Module (PIM) N/A Included
IBB PowerLink N/A $300
Router Equipment Monthly Lease/Maintenance N/A $321.71
(Expires
8/2000)
EF7 100/EF7900/PWTeller $2,500 $250
PLUS Platform & Teller N/A Included
Sharp 6500 $2,500 $250
Platform Transfer CFI Loan/CFI Deposit/Bankers System $2,500 $250
Deposit/Bankers System Loan/Formation Technologies Loan per
Function
Ancillary Module One-Time Fees and Monthly Fees subject to change.
Implementation travel and related expenses additional.
master.1197 FISERV
- 27 -
<PAGE>
Exhibit H
FISERV SOLUTIONS, INC. DISASTER RECOVERY AGREEMENT
EFT/ATM SERVICES
(Atlanta Stratus Support Only)
I. A Disaster shall mean any unplanned interruption of the operations of or
inaccessibility to Fiserv's data center which appears in Fiserv's
reasonable judgment to require relocation of processing to a primary
recovery location. Fiserv shall notify Client as soon as possible after it
deems a service outage to be a Disaster. Fiserv shall move the processing
of Client's standard on-line services to a primary recovery location as
expeditiously as possible and shall coordinate the cut-over to back-up data
lines with the appropriate carriers. Client shall maintain adequate records
of all transactions during the period of service interruption and shall
have personnel available to assist Fiserv in implementing the switchover to
the primary recovery location. During a Disaster, optional or on-request
services shall be provided by Fiserv only to the extent that there is
adequate capacity at the primary recovery location and only after
stabilizing the provision of base on-line services.
II. Fiserv shall work with Client to establish a plan for alternative data
communications in the event of a Disaster.
III. Fiserv shall test its Disaster Recovery Services Plan by conducting an
annual test. Client agrees to participate in and assist Fiserv with such
testing. Test results will be made available to Client's management,
regulators, internal and external auditors, and (upon request) to Client's
insurance underwriters.
IV. Client understands and agrees that the Fiserv Disaster Recovery Plan is
designed to minimize but not eliminate risks associated with a Disaster
affecting Fiserv's data center. Fiserv does not warrant that service will
be uninterrupted or error free in the event of a Disaster. Client
maintains responsibility for adopting a disaster recovery plan relating to
disasters affecting Client's facilities and for securing business
interruption insurance or other insurance as necessary to properly protect
Client's revenues in the event of a disaster.
V. Monthly subscription fee $100.00.
ACCEPTED BY:
UNITED BANK & TRUST COMPANY FISERV SOLUTIONS, INC.
- ------------------------------------ ---------------------------------
Authorized Signature Authorized Signature
Printed Name: Printed Name: William L. Kenney
Title: Title: President Fiserv Atlanta
- ------------------------------------ ---------------------------------
Date Date
master.1197 FISERV
- 28 -
<PAGE>
Exhibit H
FISERV ATLANTA DISASTER RECOVERY AGREEMENT
ON-LINE SERVICES
I. A Disaster shall mean any unplanned interruption of the operations of or
inaccessibility to Fiserv's data center which appears in Fiserv's
reasonable judgment to require relocation of processing to a primary
recovery location. Fiserv shall notify Client as soon as possible after it
deems a service outage to be a Disaster. Fiserv shall move the processing
of Client's standard on-line services to a primary recovery location as
expeditiously as possible and shall coordinate the cut-over to back-up data
lines with the appropriate carriers. Client shall maintain adequate records
of all transactions during the period of service interruption and shall
have personnel available to assist Fiserv in implementing the switchover to
the primary recovery location. During a Disaster, optional or on-request
services shall be provided by Fiserv only to the extent that there is
adequate capacity at the primary recovery location and only after
stabilizing the provision of base on-line services.
II. Fiserv shall work with Client to establish a plan for alternative data
communications in the event of a Disaster.
III. Fiserv shall test its Disaster Recovery Services Plan by conducting an
annual test. Client agrees to participate in and assist Fiserv with such
testing. Test results will be made available to Client's management,
regulators, internal and external auditors, and (upon request) to Client's
insurance underwriters.
IV. Client understands and agrees that the Fiserv Disaster Recovery Plan is
designed to minimize but not eliminate risks associated with a Disaster
affecting Fiserv's data center. Fiserv does not warrant that service will
be uninterrupted or error free in the event of a Disaster. Client maintains
responsibility for adopting a disaster recovery plan relating to disasters
affecting Client's facilities and for securing business interruption
insurance or other insurance as necessary to properly protect Client's
revenues in the event of a disaster.
V. Monthly subscription fee $.01 per Deposit & Loan Account on File.
ACCEPTED BY:
UNITED BANK & TRUST COMPANY FISERV SOLUTIONS, INC.
- ------------------------------------ ------------------------------------
Authorized Signature Authorized Signature
Printed Name: Printed Name: William L. Kenney
Title: Title: President Fiserv Atlanta
- ------------------------------------ ------------------------------------
Date Date
master.1197 FISERV
- 29 -
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 12,755
<INT-BEARING-DEPOSITS> 333
<FED-FUNDS-SOLD> 11,257
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 8,464
<INVESTMENTS-CARRYING> 14,020
<INVESTMENTS-MARKET> 13,531
<LOANS> 159,244
<ALLOWANCE> 2,449
<TOTAL-ASSETS> 223,474
<DEPOSITS> 186,697
<SHORT-TERM> 0
<LIABILITIES-OTHER> 2,742
<LONG-TERM> 630
0
100
<COMMON> 42
<OTHER-SE> 17,266
<TOTAL-LIABILITIES-AND-EQUITY> 223,474
<INTEREST-LOAN> 3,799
<INTEREST-INVEST> 376
<INTEREST-OTHER> 81
<INTEREST-TOTAL> 10,663
<INTEREST-DEPOSIT> 1,441
<INTEREST-EXPENSE> 1,689
<INTEREST-INCOME-NET> 2,567
<LOAN-LOSSES> 150
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,817
<INCOME-PRETAX> 287
<INCOME-PRE-EXTRAORDINARY> 287
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 481
<EPS-BASIC> 0.11
<EPS-DILUTED> 0.11
<YIELD-ACTUAL> 5.55
<LOANS-NON> 2,563
<LOANS-PAST> 41
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,341
<CHARGE-OFFS> 42
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 2,449
<ALLOWANCE-DOMESTIC> 2,449
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 457
</TABLE>
