<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [Fee Required]
For the fiscal year ended December 31, 1996
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required]
For the Transition period from ---------- to ----------
Commission File No. 811-2750
FKF, Inc.
(Exact name of registrant as specified in its charter)
Iowa 42-1083346
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Boatmen's Bank Building
317 Sixth Avenue, 3rd Floor
Des Moines, Iowa 50309
(Address of principal executive office) (Zip Code)
Registrant's telephone number, including area code: 515/235-7177
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (Sec.299.405 of this chapter) is not contained herein,
and will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part
III of this Form 10-K or any amendment to this Form 10-K [X]
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of February 28, 1997:
None
The number of shares outstanding of the issuer's classes of common stock as
of February 28, 1997:
Common Stock, $1 Par Value - 250,000
OMISSION OF INFORMATION BY CERTAIN WHOLLY-OWNED SUBSIDIARIES: REGISTRANT
MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS J(1)(a) AND (b) OF
FORM 10-K AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE
FORMAT.
DOCUMENTS INCORPORATED BY REFERENCE
None
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Item Page No.
---- --------
PART I
- ------
<S> <C>
Item 1. Business 2
-------
Item 2. Properties 2
-------
Item 3. Legal Proceeding 2
-------
Item 4. Submission of Matters to a Vote of Security Holders 3
-------
PART II
- -------
Item 5. Market for Registrant's Common Stock and Related Security Holder Matters 3
-------
Item 6. Selected Financial Data 3
-------
Item 7. Management's Discussion and Analysis of Financial Condition and
------- Results of Operations 3-4
Item 8. Financial Statements and Supplementary Data 4
-------
Item 9. Changes in and Disagreements with Accountants on
------- Accounting and Financial Disclosure 4
PART III
- --------
Item 10. Directors and Executive Officers of Registrant 4
--------
Item 11. Executive Compensation 4
--------
Item 12. Security Ownership of Certain Beneficial Owners and Management 4
--------
Item 13. Certain Relationships and Related Transactions 5
--------
PART IV
- -------
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 5-6
--------
SIGNATURES 7
- ----------
</TABLE>
1
<PAGE> 3
PART I
ITEM 1. BUSINESS
- ------- --------
Registrant, a registered face-amount certificate company under the
Investment Company Act of 1940 (the "40 Act"), was formed on May 17, 1977.
On August 11, 1977, First Kansas Financial, Inc. ("First Kansas") merged with
and into Central National Bancshares, Inc., an Iowa multi-bank holding
company, pursuant to an Agreement and Plan of Reorganization dated March 15,
1977, and amended as of April 19, 1977, and June 21, 1977, (the "Agreement").
As provided in the Agreement, First Kansas formed a wholly-owned
subsidiary, FKF, Inc. ("Registrant"), to assume the obligations of First
Kansas to its face-amount certificate holders. Immediately prior to
consummation of the merger, First Kansas transferred to Registrant assets and
certificate reserves in an amount in excess of its face-amount certificate
liabilities, and Registrant assumed all liabilities of First Kansas to its
face-amount certificate holders. An order of de-registration was issued on
August 14, 1977, SEC release number 9905, terminating the registration of
First Kansas under Section 8(f) of the 40 Act.
On April 16, 1981, Central National Bancshares, Inc. changed its name
to United Central Bancshares, Inc. Subsequently, on June 24, 1985, United
Central Bancshares, Inc. changed its name to First Interstate of Iowa, Inc.
pursuant to a franchise agreement entered into with First Interstate Bancorp,
Los Angeles, California. On April 1, 1992, First Interstate of Iowa, Inc.
merged with and into Boatmen's Bancshares of Iowa, Inc. ("BBII"), a
wholly-owned subsidiary of Boatmen's Bancshares, Inc. BBII is considered to
be Registrant's Parent.
First Kansas was the successor in reorganization to First Home
Investment Corporation of Kansas, Inc. ("FHI"), which company was in a
Chapter X reorganization proceeding in the United States District Court for
the District of Kansas (Case #24075-B-2) from April 24, 1973, to April 26,
1976. FHI was the original issuer of all of the face-amount certificates
assumed by Registrant. No face-amount certificates have been issued by FHI
or any successor of FHI since March 31, 1973.
Under the 40 Act, a company issuing face-amount certificates is
required to maintain reserves at a level not less than the surrender value of
outstanding certificates. While Registrant is not engaged in the issuance of
face-amount certificates, it does maintain deposits of cash and investments
of a kind which are qualified investments for face-amount certificate
companies as defined in Section 28 of the 40 Act. The deposits are
maintained at a level not less than the surrender value of the outstanding
certificates. Such deposits of qualified assets are presently maintained
with a Des Moines, Iowa bank and with the State of Illinois.
Registrant does not consider either financial information about
industry segments or information as to lines of business to be applicable
since Registrant exists for the sole purpose of performing the obligations of
First Kansas to holders of face-amount certificates issued by FHI.
Registrant does not intend to issue any face-amount certificates and
will be liquidated when all the currently outstanding face-amount
certificates are paid.
Registrant has no materially important assets other than cash and
securities.
ITEM 2. PROPERTIES
- ------- ----------
Registrant's offices are located with the principal offices of BBII.
Registrant does not lease any offices or property and does not own any real
estate.
ITEM 3. LEGAL PROCEEDINGS
- ------- -----------------
Registrant is not aware of any legal proceedings or actions to which
Registrant is a party or to which any of the assets of Registrant are
subject.
2
<PAGE> 4
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------- ---------------------------------------------------
Not applicable under the reduced disclosure rules.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED SECURITY
- ------- ---------------------------------------------------------
HOLDER MATTERS
--------------
Registrant is a wholly-owned subsidiary of BBII. There is not a
principal market for the trading of the common stock of Registrant, and the
information requested by this item with respect to trading of the shares and
price quotations is not applicable to Registrant.
There are no restrictions that would prohibit the payment of dividends
out of retained earnings. Registrant has declared and paid dividends
amounting to $20,000 in 1996, $0 in 1995 and $30,000 in 1994.
ITEM 6. SELECTED FINANCIAL DATA
- ------- -----------------------
Not applicable under the reduced disclosure rules.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
- ------- ----------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------
Liquidity. The outstanding face-amount certificates of Registrant may
---------
be redeemed, with certain exceptions, at the request of the certificates'
holders. The redemptions of such certificates are funded by the income
stream of Registrant, from conversion of assets, and if such should be
required, from borrowing.
The assets of Registrant consist of securities which qualify under the
Code of the District of Columbia or under such other rules of the Securities
and Exchange Commission as being of a kind in which insurance companies are
permitted to invest. Such assets are selected for investment to mature at
such frequencies and in such amounts so as to coincide with the level of
anticipated redemption requirements. Management can not, however, predict
with certainty the level of redemptions, and it is possible for redemption
requests to occur in amounts in excess of Registrant's immediate ability to
fund such redemptions without the sale of assets (potentially at a loss
dependent upon the prevailing market values and other pertinent factors).
In general, Registrant does not intend to borrow in order to fund
redemption requirements, but does retain the right to do so in the event
prevailing circumstances cause management to conclude such action would be
prudent and in the best interests of Registrant.
Capital Resources. Registrant, other than its obligations to fund the
-----------------
redemption of face-amount certificates, to pay management fees to BBII equal
to one percent of the average outstanding face-amount certificate liability
and to pay certain expenses incurred directly by Registrant, does not have
outstanding commitments of a material nature which would adversely affect
Registrant's capital resources.
Results of Operations - Earnings Analysis, 1996 vs. 1995. Net income
--------------------------------------------------------
decreased $5,000 in 1996, or 35.7%, to $9,000, down from $14,000 in 1995.
The decrease was primarily attributable to lower yields on the reinvested
proceeds of matured or called investments and to a lower average balance of
investment securities.
For 1996, the average rate earned on average qualified investment
securities was 6.3%, compared to 6.5% in 1995. Interest income on investment
securities was down $11,000 in 1996, or 10.9%, to $90,000, compared to
$101,000 in 1995. Investment expense (consisting of management fees)
increased $1,000 in 1996, or 7.7%, to $14,000, up from $13,000 in 1995.
3
<PAGE> 5
The provision for certificate reserves was $62,000 in 1996, compared to
$66,000 in 1995. The provision consists of amounts called for by the terms
of the outstanding certificates plus amounts credited under the Additional
Credit policy of Registrant.
Other operating income increased in 1996 by $5,000, or 166.7%, to
$8,000, up from $3,000 in 1995. Other operating expenses increased $4,000 in
1996, or 57.1%, to $11,000, up from $7,000 in 1995.
On a per share basis, net income was $.04 for 1996, a 20% decrease from
the $.05 earned in 1995.
Results of Operations - Earnings Analysis, 1995 vs. 1994. Net income
--------------------------------------------------------
increased $3,000 in 1995, or 27.3%, to $14,000, up from $11,000 in 1994. The
increase was primarily attributable to reductions in data processing expense,
audit fees and the reversal of an overaccrual for additional credit expense
for 1994 and 1995.
For 1995, the average rate earned on average qualified investment
securities was 6.5%, compared to 6.2% in 1994. Interest income on investment
securities was down $1,000 in 1995, or 1.0%, to $101,000, compared to
$102,000 in 1994. Investment expense (consisting of management fees)
remained constant at $13,000 for both 1995 and 1994.
The provision for certificate reserves was $66,000 in 1995, compared to
$65,000 in 1994. The provision consists of amounts called for by the terms
of the outstanding certificates plus amounts credited under the Additional
Credit policy of Registrant.
Other operating income increased in 1995 by $3,000, to $3,000, up from
$0 in 1994. Other operating expenses decreased $4,000 in 1995, or 36.4%, to
$7,000, down from $11,000 in 1994.
On a per share basis, net income was $.05 for 1995, a 25% increase from
the $.04 earned in 1994.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
- ------- -------------------------------------------
The financial statements of Registrant for the years 1996, 1995 and
1994 are submitted herewith on pages 9 through 17.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
- ------- ---------------------------------------------
ON ACCOUNTING AND FINANCIAL DISCLOSURE
--------------------------------------
None
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
- -------- ----------------------------------------------
Not applicable under the reduced disclosure rules.
ITEM 11. EXECUTIVE COMPENSATION
- -------- ----------------------
Not applicable under the reduced disclosure rules.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
- -------- -----------------------------------------------
AND MANAGEMENT
--------------
Not applicable under the reduced disclosure rules.
4
<PAGE> 6
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
- -------- ----------------------------------------------
Not applicable under the reduced disclosure rules.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
- -------- ----------------------------------------------------------------
(a) (1) The following financial statements and independent
auditor's report of Registrant are included in Item 8:
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Independent Auditors' Report - Ernst & Young LLP 8
Balance Sheets - December 31, 1996 and 1995 9
Statements of Operations - Years Ended December 31, 1996, 1995 and 1994 10
Statements of Changes in Shareholder's Equity -
Years Ended December 31, 1996, 1995 and 1994 11
Statements of Cash Flows - Years Ended December 31, 1996, 1995 and 1994 12
Notes to Financial Statements 13-17
</TABLE>
(a) (2) The following financial statement schedules are included
in Item 14(d):
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Schedule I - Investments in Securities of Unaffiliated Issuer -
December 31, 1996 18
Schedule V - Qualified Assets on Deposit - December 31, 1996 19
Schedule XI - Certificate Reserves - Years Ended December 31, 1996,
1995 and 1994 20-32
</TABLE>
Other financial statement schedules required by Article 6
of Regulation S-X are not required under the related
instructions or are inapplicable, and therefore have been
omitted.
(a) (3) Listing of Exhibits - The following documents are filed as
-------------------
exhibits to this report or are incorporated by reference by
specific reference to previous filings with the
Commission:
<TABLE>
<CAPTION>
Exhibit No.
-----------
<C> <S>
(3) Articles of Incorporation and Bylaws of
Registrant are on file with the Commission as
exhibits to Registrant's Form N-8B-4 Report
filed on October 25, 1977, which documents are
hereby incorporated by reference.
(4) Copies of or specimen copies of each of the
outstanding face-amount certificates, that
being Series 20, 20L, 20LA, 27 and 27A, and a
copy of an order of the United States District
Court for the District of Kansas, dated May 2,
1977, are on file with the Commission as
exhibits to Registrant's Form N-8B-4 Report
filed on October 25, 1977, which documents are
hereby incorporated by reference.
5
<PAGE> 7
(10) A copy of the Depository Agreement, dated
October 23, 1962, as supplemented and
assigned, is on file with the Commission as
an exhibit to Registrant's Form N-8B-4
Report filed on October 25, 1977, and a copy
of the Second Amendment to the Depository
Agreement dated November 6, 1981, is
filed as an exhibit to the 1981 Form
10-K dated March 16, 1982, which
documents are hereby incorporated by
reference.
(13) Registrant's Annual Report to Shareholder
consists of the financial statements
submitted herewith on pages 8 through 17.
(16) A copy of the letter regarding the change
in certifying accountants dated March 18,
1993, is on file with the Commission as an
exhibit to Registrant's Form 8-K filed on
March 18, 1993, which document is hereby
incorporated by reference.
</TABLE>
(b) Reports on Form 8-K - Registrant did not file a report on Form
-------------------
8-K during the fourth quarter of 1996.
(c) Exhibits - The response to this portion of Item 14 is submitted
--------
as a separate section of this report on page 33.
(d) Financial Statement Schedules - The financial statement schedules
-----------------------------
of Registrant are submitted herewith on pages 18 through 32.
6
<PAGE> 8
SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
FKF, Inc.
Date: March 31, 1997 By: /s/ Thomas M. Fix
---------------------- -----------------------------------
Thomas M. Fix, President, CEO,
Treasurer and Director
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of Registrant
and in the capacities and on the dates indicate.
Date
----
March 31, 1997 By: /s/ Thomas M. Fix
- --------------------------- -----------------------------------
Thomas M. Fix, President, CEO,
Treasurer and Director
March 31, 1997 By: /s/ Daniel J. Fliger
- --------------------------- -----------------------------------
Daniel J. Fliger, Secretary and Director
March 31, 1997 By: /s/ Kelly Swinton
- --------------------------- -----------------------------------
Kelly Swinton, Controller
7
<PAGE> 9
Report of Independent Auditors
The Board of Directors and Shareholder
FKF, Inc.
We have audited the accompanying balance sheets of FKF, Inc. as of
December 31, 1996 and 1995 and the related statements of operations,
changes in shareholder's equity, and cash flows for each of the three
years in the period ended December 31, 1996. Our audits also included the
financial statement schedules listed in the Index at Item 14(a). These
financial statements and schedules are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of FKF, Inc. at
December 31, 1996 and 1995, and the results of its operations and its cash
flows for each of the three years in the period ended December 31, 1996,
in conformity with generally accepted accounting principles. Also, in our
opinion, the related financial statement schedules, when considered
in relation to the basic financial statements taken as a whole, present
fairly in all material respects the information set forth therein.
St. Louis, Missouri By: /s/ Ernst & Young LLP
March 25, 1997 ---------------------
8
<PAGE> 10
<TABLE>
BALANCE SHEETS
FKF, INC.
<CAPTION>
December 31
1996 1995
------------ ------------
<S> <C> <C>
QUALIFIED ASSETS--Note B and Schedule V
Cash $ 298 $ 521
Interest and other receivables 9,696 20,450
Investment securities--Note B and Schedule I:
Held-to-maturity securities 49,800 49,800
Available-for-sale securities 1,376,206 1,533,652
------------ ------------
Total investment securities 1,426,006 1,583,452
Current federal income taxes receivable from parent company 1,918 1,216
------------ ------------
$ 1,437,918 $ 1,605,639
============ ============
CERTIFICATE RESERVES, LIABILITIES AND
SHAREHOLDER'S EQUITY
Certificate reserves--Note C and Schedule XI:
Installment payment certificates $ 23,018 $ 48,807
Single payment certificates 555,818 613,659
Unapplied advance payments on
installment certificates 12,147 19,239
Additional amounts accrued or credited--Note D 540,233 595,811
------------ ------------
1,131,216 1,277,516
Current liabilities:
Deferred federal income taxes payable 5,305 8,808
Other 575 525
------------ ------------
5,880 9,333
------------ ------------
CURRENT RESERVES AND
CURRENT LIABILITIES 1,137,096 1,286,849
Shareholder's Equity:
Common Stock, par value $1--authorized 4,000,000
shares; issued and outstanding 250,000 shares
(all owned by Boatmen's Bancshares of Iowa, Inc.) 250,000 250,000
Paid-in surplus 12,906 12,906
Retained earnings 28,064 38,655
Net unrealized holding gains on
available-for-sale securities 9,852 17,229
------------ ------------
300,822 318,790
------------ ------------
$ 1,437,918 $ 1,605,639
============ ============
</TABLE>
See notes to financial statements 9
<PAGE> 11
<TABLE>
STATEMENTS OF OPERATIONS
FKF, INC.
<CAPTION>
Years Ended December 31
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
NET INVESTMENT INCOME
Income on investment securities $ 90,067 $ 100,671 $ 102,390
Mangagement fees to parent company (13,581) (12,706) (13,416)
----------- ----------- -----------
76,486 87,965 88,974
----------- ----------- -----------
PROVISION FOR CERTIFICATE RESERVES--Note D
Specified interest credited to reserves 22,285 25,181 27,120
Provision for additional credits to reserves 40,106 41,194 38,054
----------- ----------- -----------
62,391 66,375 65,174
----------- ----------- -----------
NET INVESTMENT INCOME LESS PROVISION
FOR CERTIFICATE RESERVES 14,095 21,590 23,800
----------- ----------- -----------
OTHER OPERATING INCOME
Securities gains 7,274 151 --
Miscellaneous 1,066 2,620 --
----------- ----------- -----------
8,340 2,771 --
----------- ----------- -----------
OTHER OPERATING EXPENSE
Professional fees -- -- 1,000
Registration fees 250 250 250
Miscellaneous 10,946 7,138 9,827
----------- ----------- -----------
11,196 7,388 11,077
----------- ----------- -----------
INCOME BEFORE INCOME TAXES 11,239 16,973 12,723
INCOME TAXES--Note E 1,830 3,333 1,826
----------- ----------- -----------
NET INCOME $ 9,409 $ 13,640 $ 10,897
=========== =========== ===========
Net income per share $ 0.04 $ 0.05 $ 0.04
=========== =========== ===========
</TABLE>
See notes to financial statements 10
<PAGE> 12
<TABLE>
STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
FKF, INC.
<CAPTION>
Net
Unrealized
Holding
Gains(Losses)
Common Paid-in Retained on AFS
Stock Surplus Earnings Securities Total
---------- --------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C>
BALANCE AT JANUARY 1, 1994 $ 250,000 $ 12,906 $ 44,118 -- $ 307,024
Net Income -- -- 10,897 -- 10,897
Change in unrealized gains (losses) on
available-for-sale securities,
net of income taxes of $11,606 -- -- -- (21,553) (21,553)
Cash dividend declared-$0.12 per share -- -- (30,000) -- (30,000)
---------- --------- ---------- ----------- ----------
BALANCE AT DECEMBER 31, 1994 $ 250,000 $ 12,906 $ 25,015 $ (21,553) $ 266,368
Net Income -- -- 13,640 -- 13,640
Change in unrealized gains (losses) on
available-for-sale securities,
net of income taxes of $(20,414) -- -- -- 38,782 38,782
---------- --------- ---------- ----------- ----------
BALANCE AT DECEMBER 31, 1995 $ 250,000 $ 12,906 $ 38,655 $ 17,229 $ 318,790
Net Income -- -- 9,409 -- 9,409
Change in unrealized gains (losses) on
available-for-sale securities,
net of income taxes of $3,503 -- -- -- (7,377) (7,377)
Cash dividend declared-$0.08 per share -- -- (20,000) -- (20,000)
---------- --------- ---------- ----------- ----------
BALANCE AT DECEMBER 31, 1996 $ 250,000 $ 12,906 $ 28,064 $ 9,852 $ 300,822
========== ========= ========== =========== ==========
</TABLE>
See notes to financial statements 11
<PAGE> 13
<TABLE>
STATEMENTS OF CASH FLOWS
FKF, INC.
<CAPTION>
Years Ended December 31
1996 1995 1994
--------- ---------- -----------
<S> <C> <C> <C>
Net Income $ 9,409 $ 13,640 $ 10,897
Operating Activities:
Adjustments to reconcile net income to net
cash provided by operating activities:
Realized investment securities gain (7,274) (151) --
Provision for reserves 62,815 66,142 66,802
Accretion of investment securities discounts (4,451) (6,956) (7,757)
(Increase) decrease in accrued interest 10,754 (433) (2,968)
Increase (decrease) in current liabilities 50 57 (1,324)
(Increase) decrease in other assets (702) (872) (42)
--------- ---------- -----------
Net Cash Provided by Operating Activities 70,601 71,427 65,608
--------- ---------- -----------
Investing Activities:
Proceeds from maturities of availiable-for-sale
investment securities 758,018 1,029,975 1,305,758
Purchase of available-for-sale investment securities (599,728) (903,792) (1,204,679)
--------- ---------- -----------
Net Cash Provided by Investing Activities 158,290 126,183 101,079
--------- ---------- -----------
Financing Activities:
Cash dividends paid (20,000) -- (30,000)
Payments for redemption of face-amount
certificates (209,114) (197,398) (136,857)
--------- ---------- -----------
Net Cash Used by Financing Activities (229,114) (197,398) (166,857)
--------- ---------- -----------
Increase (Decrease) in Cash and
Cash Equivalents (223) 212 (170)
Cash and cash equivalents at beginning of year 521 309 479
--------- ---------- -----------
Cash and Cash Equivalents at End of Year $ 298 $ 521 $ 309
========= ========== ===========
Supplemental Disclosure of Cash Flow
Information - Cash Paid During the Year
for Income Taxes $ 2,532 $ 4,983 $ 1,090
========= ========== ===========
</TABLE>
See notes to financial statements 12
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS
FKF, INC.
NOTE A--SIGNIFICANT ACCOUNTING POLICIES
Organization: FKF, Inc., a wholly-owned subsidiary of Boatmen's Bancshares
- ------------
of Iowa, Inc. ("BBII"), is a face-amount certificate investment company as
defined by Section 28 of the Investment Company Act of 1940. The Company was
formed for the sole purpose of assuming the liabilities of First Kansas
Financial, Inc. to holders of its face-amount certificates. First Kansas
Financial, Inc. was the parent company of FKF, Inc. until its merger with and
into BBII, a wholly-owned subsidiary of Boatmen's Bancshares, Inc. In
accordance with this corporate purpose, the Company does not accept
investments in face-amount certificates.
Cash and Cash Equivalents: For purposes of reporting cash flows, cash and
- -------------------------
cash equivalents include only cash as presented on the balance sheet.
Investment Securities: Debt securities are classified as held-to-maturity
- ---------------------
when the Company has the positive intent and ability to hold the securities
to maturity. Held-to-maturity securities are stated at cost adjusted for
accretion of discounts and amortization of premiums compiled by the
straight-line method. Such amortization, interest and dividends are included
in Income on Investment Securities. Realized gains and losses, and declines
in value judged to be other-than-temporary are included in securities gains
(losses). The cost of securities sold are determined on a specific
identification basis.
Debt securities not classified as held-to-maturity and marketable equity
securities are classified as available-for-sale. Available-for-sale
securities are stated at fair value, with the unrealized gains and losses,
net of tax, reported in a separate component of shareholders' equity.
Face-Amount Certificate Reserves: Face-amount certificate reserves are
- --------------------------------
stated at the amount computed in accordance with the provisions of the
respective certificates and Section 28 of the Investment Company Act of 1940.
Income Taxes: The Company's taxable income is included in the consolidated
- ------------
income tax returns of Boatmen's Bancshares, Inc. The Company provides for
income taxes as if separate returns are filed and remits to the parent
company amounts that are currently payable.
Management Fees: Management fees are charged by BBII for services provided
- ---------------
to the Company. Annual fees are computed at the rate of one percent of the
average outstanding balance of face-amount certificate reserves.
Use of Estimates: The preparation of financial statements in conformity with
- ----------------
generally accepted accounting principles requires management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
13
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS (continued)
FKF, INC.
Net Income Per Share: Net income per share amounts are based on the weighted
- --------------------
average number of common shares outstanding during the year.
NOTE B--QUALIFIED ASSETS
Under the provisions of its face-amount certificates and the Investment
Company Act of 1940, the Company is required to have cash and qualified
investments (as defined in Section 28(b) of the Act) with a value not less
than the aggregate amount of the $250,000 capital stock requirement and the
face-amount certificate reserves. At December 31, 1996, the company had
qualified assets of $1,437,918 which exceeded the amount of qualified assets
required under the Act of $1,381,216.
The average taxable equivalent rates of return for each type of investment
security owned by the Company are as follows:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
U. S. Treasury Notes 5.7% 7.4% 8.3%
Other Bonds 6.2% 6.3% 6.3%
Other Securities 6.9% 7.1% 5.6%
</TABLE>
As provided by the face-amount certificates, the Company must maintain
qualified assets equal to the face-amount certificate reserves at a
depository as security for the performance of its obligations. At December
31, 1996, $1,410,849 of investment securities (at amortized cost) were on
deposit at the Brenton Bank, N.A. and with the State of Illinois to satisfy
these requirements.
The following is a summary of held-to-maturity securities and
available-for-sale securities at December 31, 1996:
<TABLE>
<CAPTION>
Held-To-Maturity Securities
-------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ------
<S> <C> <C> <C> <C>
Other debt securities $ 49,800 $ 1,286 $ -- $ 51,086
========== ======= ======= ==========
<CAPTION>
Available-For-Sale Securities
-------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ------
<S> <C> <C> <C> <C>
U.S. Treasury securities
and obligations of U.S.
Government agencies $ 198,484 $ 284 $ (620) $ 198,148
Other debt securities 1,075,673 5,873 -- 1,081,546
Equity securities 86,892 10,151 ( 531) 96,512
---------- ------- ------- ----------
$1,361,049 $16,308 $(1,151) $1,376,206
========== ======= ======= ==========
</TABLE>
14
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS (continued)
FKF, INC.
The following is a summary of held-to-maturity securities and
available-for-sale securities at December 31, 1995:
<TABLE>
<CAPTION>
Held-To-Maturity Securities
------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ------
<S> <C> <C> <C> <C>
Other debt securities $ 49,800 $ 443 $ -- $ 50,243
========== ======= ======= =========
<CAPTION>
Available-For-Sale Securities
-----------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
--------- ---------- ---------- ------
<S> <C> <C> <C> <C>
U.S. Treasury securities
and obligations of U.S.
Government agencies $ 49,655 $ 870 $ -- $ 50,525
Other debt securities 1,323,703 10,831 (563) 1,333,971
Equity securities 134,257 17,555 (2,656) 149,156
---------- ------- ------- ----------
$1,507,615 $29,256 $(3,219) $1,533,652
========== ======= ======= ==========
</TABLE>
The amortized cost and market value of debt securities at December 31, 1996
by contractual maturity are as follows:
<TABLE>
<CAPTION>
Amortized Market
Cost Value
--------- ------
<S> <C> <C>
Held-to-maturity securities:
Due after five through ten years $ 49,800 $ 51,086
========== ==========
<CAPTION>
Amortized Market
Cost Value
--------- ------
<S> <C> <C>
Available-for-sale securities:
Due in one year or less $ 431,109 $ 431,670
Due after one year through five years 843,048 848,024
Due after five years through ten years -- --
Due after ten years -- --
---------- ----------
1,274,157 1,279,694
Equity securities 86,892 96,512
---------- ----------
$1,361,049 $1,376,206
========== ==========
Total investment securities $1,410,849 $1,427,292
========== ==========
</TABLE>
15
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS (continued)
FKF, INC.
NOTE C--CERTIFICATE RESERVES
At December 31, 1996, the carrying value of face-amount certificate reserves,
by type of certificate, and annual rates of accumulation thereon were as
follows:
<TABLE>
<CAPTION>
Carrying Accumulation
Value Rate
-------- ------------
<S> <C> <C>
Installment payment certificates:
Series 20L $ 12,131 3-1/8%
Series 20LA 10,887 3-1/8%
----------
23,018
Single payment certificates:
Series 27 539,520 3-1/2%
Series 27A 16,298 3-1/2%
----------
555,818
Unapplied advance payments on
installment certificates 12,147 3-1/8%
Additional amounts accrued or credited 540,233
----------
$1,131,216
</TABLE>
Redemptions of outstanding face-amount certificates, as provided by the
respective certificates, totaled $209,114 and $197,398 during the years ended
December 31, 1996 and 1995, respectively.
Under the provisions of Series 20LA and 27A face-amount certificates, the
Company is required to maintain a special share reserve with a depository
consisting of all shares of Boatmen's Bancshares, Inc. common stock of
certificate holders which have been purchased under the terms of their
certificates. At December 31, 1996, 856 shares of common stock of Boatmen's
Bancshares, Inc. were on deposit with Brenton Bank, N.A. Dividends paid on
such shares of common stock are credited to the reserves and unapplied
payments of the corresponding face-amount certificates.
NOTE D--ADDITIONAL AMOUNTS ACCRUED OR CREDITED
The income earned by the Company from the investment of funds derived solely
from the assets comprising face-amount certificate reserves, after allowance
for taxes, are applied: first, to the payment of the stated rate of interest
set forth in the face-amount certificates; second, to the payment of annual
management fees equal to one percent of the average outstanding balance of
face-amount certificate reserves; third, to additional credits up to four
percent of the face-amount certificate reserves; and fourth, the remainder of
said income, if any, is divided equally between the Company and said
face-amount certificate holders.
16
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS (continued)
FKF, INC.
NOTE E--INCOME TAXES
The reasons for the difference between income tax expense and the amount
computed by applying the statutory Federal income tax rate, 35%, before
income taxes were:
<TABLE>
<CAPTION>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
Provision at statutory rate $ 3,941 $ 5,941 $ 4,453
Effect of non-taxable interest income (897) (897) (897)
Effect of non-taxable dividend income (1,214) (1,711) (1,730)
------- ------- -------
$ 1,830 $ 3,333 $ 1,826
======= ======= =======
</TABLE>
NOTE F--SUBSEQUENT EVENT
On January 7, 1997, Boatmen's Bancshares, Inc. (BBI) merged into NationsBank
Corporation (NationsBank). Under the terms of the agreement, each
outstanding share of BBI common stock was converted into the right to receive
1.305 shares of NationsBank common stock, adjusted for the 2 for 1 stock
split completed by NationsBank on February 27, 1997.
17
<PAGE> 19
<TABLE>
Schedule I
FKF, Inc.
Investments in Securities of Unaffiliated Issuers
December 31, 1996
<CAPTION>
Number of
Shares or
Principal
Amount of
Bonds and Market Market
Name of Issuer and Title of Issue Notes Cost Adjustment Value
--------------------------------------------------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C>
HELD-TO-MATURITY SECURITIES
Other Bonds:
Public Housing Authority, Cook County,
Illinois, 5.125% due May 1, 2005 $ 50,000 $ 49,800 $ 1,286 $ 51,086
---------- ------- ----------
Total Held-to-Maturity Securities 49,800 1,286 51,086
---------- ------- ----------
AVAILABLE-FOR-SALE SECURITIES
U.S. Treasury Notes:
5.875%, due August 15, 1998 50,000 49,786 284 50,070
5.000%, due February 15, 1999 150,000 148,698 (620) 148,078
---------- ------- ----------
198,484 (336) 198,148
Other Bonds:
Federal Agency, FHLB 5.87%, due June 26, 1998 350,000 349,945 1,149 351,094
Federal Agency, FNMA 5.375%, due June 10, 1998 300,000 294,619 4,163 298,782
Federal Agency, SLMA 3.77%, due July 16, 1997 250,000 249,986 561 250,547
---------- ------- ----------
894,550 5,873 900,423
Other Securities:
Preferred Stocks:
Cleveland Electric Illuminating, 7.40% 250 21,406 (531) 20,875
GTE of California, 7.48% 180 16,020 2,182 18,202
Entergy Gulf States Utilities, 8.80% 135 12,479 818 13,297
Northern States Power, 7.00% 220 18,232 3,768 22,000
Texas Utilities Power Co., 7.20% 220 18,755 3,383 22,138
---------- ------- ----------
86,892 9,620 96,512
Short-term U.S. Government Securities:
Brenton Money Market 181,123 181,123 N/A 181,123
---------- ------- ----------
Total Available-for-Sale Securities 1,361,049 15,157 1,376,206
---------- ------- ----------
TOTAL INVESTMENT SECURITIES $1,410,849 $16,443 $1,427,292
========== ======= ==========
<FN>
Note 1: Generally, market value is determined on the last business day of
the year by using either the last reported sales price, the mean
between the last quoted bid and asked prices, or if quotations are
not available, management's best estimate of the fair value.
Note 2: Held-to-maturity securities are stated at cost, while Available-
for-sale securities are stated at market value.
Note 3: The aggregate cost for Federal income tax purposes is $1,410,849
</TABLE>
18
<PAGE> 20
Schedule V
<TABLE>
FKF, Inc.
Qualified Assets on Deposit
December 31, 1996
<CAPTION>
First Mortgages
and Other First
Investment Liens on Real
Name of Depository Cash Securities Estate Other Total
- ------------------ ---- ---------- --------------- ----- -----
<S> <C> <C> <C> <C> <C>
Brenton Bank, N.A. $298 $1,361,063 $ -- $ -- $1,361,361
State of Illinois -- 49,786 -- -- 49,786
---- ---------- ----------- ----------- ----------
$298 $1,410,849 $ -- $ -- $1,411,147
==== ========== =========== =========== ==========
</TABLE>
19
<PAGE> 21
<TABLE>
Schedule XI
FKF, Inc.
Certificate Reserves
Year Ended December 31, 1995
<CAPTION>
Balance at Beginning of Year Additions
-------------------------------------- --------------------------------------
Amount Reserve Charged
Number of Amount Charged Payments by to
of Maturity of to Certificate Other
Description Accounts Value Reserves Income Holders Accounts
- ------------------- -------- -------- -------- ------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Series 20
installment
payment
face-amount
certificates (2.52%
yield to maturity):
Monthly Payments
1-12 $ $ $ $ $
13-24
25-36
37-48
49-60
61-72
73-84
85-96
Paid-up 6 249 488 11
------- -------- -------- ------- -------- --------
Total Certificates 6 249 488 11
Additional Credits 426 426 18
------- -------- ------- ------- -------- --------
Total 6 $ 675 $ 914 $ 29 $ $
======= ======== ======== ======= ======== ========
<CAPTION>
Deductions Balance at End of Year
------------------------------------------- -----------------------------------
Cash Amount
Surrenders Cancellations Number of Amount
Prior and of Maturity Of
Description Maturities to Maturity Withdrawals Accounts Value Reserves
- ------------------- ---------- ----------- ------------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Series 20
installment
payment
face-amount
certifcates (2.52%
yield to maturity):
Monthly Payments
1-12 $ $ $ $ $ $
13-24
25-36
37-48
49-60
61-72
73-84
85-96
Paid-up 499
---------- ----------- ------------- -------- -------- --------
Total Certificates 499
Additional Credits 444
---------- ----------- ------------- -------- -------- --------
Total $ 943 $ $ $ 0 $ 0 $ 0
========== =========== ============= ======== ======== ========
20
<PAGE> 22
<CAPTION>
Schedule XI (continued)
FKF, Inc.
Certificate Reserves
Year Ended December 31, 1994
Balance at Beginning of Year Additions
-------------------------------------- --------------------------------------
Amount Reserve Charged
Number of Amount Charged Payments by to
of Maturity of to Certificate Other
Description Accounts Value Reserves Income Holders Accounts
- ------------------- -------- -------- -------- ------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Series 20
installment
payment
face-amount
certifcates (2.52%
yield to maturity):
Monthly Payments
1-12 $ $ $ $ $
13-24
25-36
37-48
49-60
61-72
73-84
85-96
Paid-up 6 249 473 15
------- -------- -------- ------- -------- --------
Total Certificates 6 249 473 15
Additional Credits 390 390 36
------- -------- -------- ------- -------- --------
Total 6 $ 639 $ 863 $ 51 $ $
======= ======== ======== ======= ======== ========
<CAPTION>
Deductions Balance at End of Year
------------------------------------------- -----------------------------------
Cash Amount
Surrenders Cancellations Number of Amount
Prior and of Maturity Of
Description Maturities to Maturity Withdrawals Accounts Value Reserves
- ------------------- ---------- ----------- ------------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Series 20
installment
payment
face-amount
certifcates (2.52%
yield to maturity):
Monthly Payments
1-12 $ $ $ $ $ $
13-24
25-36
37-48
49-60
61-72
73-84
85-96
Paid-up 6 249 488
---------- ----------- ------------- -------- -------- --------
Total Certificates 6 249 488
Additional Credits 426 426
---------- ----------- ------------- -------- -------- --------
Total $ $ $ $ 6 $ 675 $ 914
========== =========== ============= ======== ======== ========
21
<PAGE> 23
<CAPTION>
Schedule XI (continued)
FKF, Inc.
Certificate Reserves
Year Ended December 31, 1996
Balance at Beginning of Year Additions
-------------------------------------- --------------------------------------
Amount Reserve Charged
Number of Amount Charged Payments by to
of Maturity of to Certificate Other
Description Accounts Value Reserves Income Holders Accounts
- ------------------- -------- --------- -------- ------- ----------- --------
Series 20L installment face-amount
certificates (2.51% yield to maturity):
<S> <C> <C> <C> <C> <C> <C>
Monthly Payments
1-12 378 $862,000 $22,649 $ 561 $ $
13-24 23 44,000 4,097 90
37-48 1 1,000 31 1
Paid-up 49 905 1,928 34
------- --------- -------- ------- -------- --------
Total Certificates 451 907,905 28,705 686
Additional Credits 27,201 27,201 1,615
------- --------- -------- ------- -------- --------
Total 451 $935,106 $55,906 $2,301 $ $
======= ========= ======== ======= ======== ========
<CAPTION>
Series 20LA installment face-amount
certificates (2.51% yield to maturity):
<S> <C> <C> <C> <C> <C> <C>
Monthly Payments
1-12 52 $229,000 $ 8,129 $ 204 $ $
13-24 2 21,000 2,324 71
Paid-up 10 2,307 9,649 166
------- --------- -------- ------- -------- --------
Total Certificates 64 252,307 20,102 441
Additional Credits 24,078 24,078 1,497
------- --------- -------- ------- -------- --------
Total 64 $276,385 $44,180 $1,938 $ $
======= ========= ======== ======= ======== ========
<CAPTION>
Deductions Balance at End of Year
------------------------------------------- -----------------------------------
Cash Amount
Surrenders Cancellations Number of Amount
Prior and of Maturity Of
Description Maturities to Maturity Withdrawals Accounts Value Reserves
- ------------------- ---------- ----------- ------------- -------- --------- --------
Series 20L installment face-amount
certificates (2.51% yield to maturity):
<S> <C> <C> <C> <C> <C> <C>
Monthly Payments
1-12 $ 13,371 $ $ $ 117 $321,000 $ 9,839
13-24 2,656 7 16,000 1,531
37-48 32 0 0 0
Paid-up 1,201 12 313 761
---------- ----------- ------------- -------- --------- --------
Total Certificates 17,260 136 337,313 12,131
Additional Credits 16,596 12,220 12,220
---------- ----------- ------------- -------- --------- --------
Total $ 33,856 $ $ $ 136 $349,533 $24,351
========== =========== ============= ======== ========= ========
<CAPTION>
Series 20LA installment face-amount
certificates (2.51% yield to maturity):
<S> <C> <C> <C> <C> <C> <C>
Monthly Payments
1-12 $ 5,321 $ $ $ 18 $ 84,000 $ 3,012
13-24 91 1 20,000 2,304
Paid-up 4,244 6 1,306 5,571
---------- ----------- ------------- -------- --------- --------
Total Certificates 9,656 25 105,306 10,887
Additional Credits 11,362 14,213 14,213
---------- ----------- ------------- -------- --------- --------
Total $ 21,018 $ $ $ 25 $119,519 $25,100
========== =========== ============= ======== ========= ========
22
<PAGE> 24
<CAPTION>
Schedule XI (continued)
FKF, Inc.
Certificate Reserves
Year Ended December 31, 1995
Balance at Beginning of Year Additions
-------------------------------------- --------------------------------------
Amount Reserve Charged
Number of Amount Charged Payments by to
of Maturity of to Certificate Other
Description Accounts Value Reserves Income Holders Accounts
- ------------------- -------- ----------- -------- ------- ----------- --------
Series 20L installment face-amount
certificates (2.51% yield to maturity):
<S> <C> <C> <C> <C> <C> <C>
Monthly Payments
1-12 431 $1,013,000 $29,107 $ 845 $ $
13-24 44 94,000 9,145 255
25-36 8 11,000 1,938 38
37-48 1 1,000 30 1
Paid-up 133 2,873 5,636 141
-------- ----------- -------- ------- -------- --------
Total Certificates 617 1,121,873 45,856 1,280
Additional Credits 42,161 42,161 2,472
-------- ----------- -------- ------- -------- --------
Total 617 $1,164,034 $88,017 $3,752 $ $
======== =========== ======== ======= ======== ========
<CAPTION>
Series 20LA installment face-amount
certificates (2.51% yield to maturity):
<S> <C> <C> <C> <C> <C> <C>
Monthly Payments
1-12 63 $ 286,000 $ 9,713 $ 266 $ $
13-24 3 26,000 2,958 69
Paid-up 15 3,033 11,660 304
-------- ----------- -------- ------- -------- --------
Total Certificates 81 315,033 24,331 639
Additional Credits 28,535 28,535 1,744
-------- ----------- -------- ------- -------- --------
Total 81 $ 343,568 $52,866 $2,383 $ $
======== =========== ======== ======= ======== ========
<CAPTION>
Deductions Balance at End of Year
------------------------------------------- -----------------------------------
Cash Amount
Surrenders Cancellations Number of Amount
Prior and of Maturity Of
Description Maturities to Maturity Withdrawals Accounts Value Reserves
- ------------------- ---------- ----------- ------------- -------- --------- --------
Series 20L installment face-amount
certificates (2.51% yield to maturity):
<S> <C> <C> <C> <C> <C> <C>
Monthly Payments
1-12 $ 7,303 $ $ $ 378 $862,000 $22,649
13-24 5,303 23 44,000 4,097
25-36 1,976 0 0 0
37-48 0 1 1,000 31
Paid-up 3,849 49 905 1,928
---------- ----------- ------------- -------- --------- --------
Total Certificates 18,431 451 907,905 28,705
Additional Credits 17,432 27,201 27,201
---------- ----------- ------------- -------- --------- --------
Total $ 35,863 $ $ $ 451 $935,106 $55,906
========== =========== ============= ======== ========= ========
<CAPTION>
Series 20LA installment face-amount
certificates (2.51% yield to maturity):
<S> <C> <C> <C> <C> <C> <C>
Monthly Payments
1-12 $ 1,850 $ $ $ 52 $229,000 $ 8,129
13-24 703 2 21,000 2,324
Paid-up 2,315 10 2,307 9,649
---------- ----------- ------------- -------- --------- --------
Total Certificates 4,868 64 252,307 20,102
Additional Credits 6,201 24,078 24,078
---------- ----------- ------------- -------- --------- --------
Total $ 11,069 $ $ $ 64 $276,385 $44,180
========== =========== ============= ======== ========= ========
23
<PAGE> 25
<CAPTION>
Schedule XI (continued)
FKF, Inc.
Certificate Reserves
Year Ended December 31, 1994
Balance at Beginning of Year Additions
-------------------------------------- --------------------------------------
Amount Reserve Charged
Number of Amount Charged Payments by to
of Maturity of to Certificate Other
Description Accounts Value Reserves Income Holders Accounts
- ------------------- -------- --------- --------- ------- ----------- --------
Series 20L installment face-amount
certificates (2.51% yield to maturity):
<S> <C> <C> <C> <C> <C> <C>
Monthly Payments
1-12 493 $1,188,000 $ 33,408 $ 935 $ $
13-24 50 107,000 10,679 280
25-36 10 22,000 3,624 111
37-48 2 2,000 114 1
Paid-up 147 3,643 6,914 195
-------- ----------- --------- ------- -------- --------
Total Certificates 702 1,322,643 54,739 1,522
-------- ----------- --------- ------- -------- --------
Additional Credits 47,035 47,035 4,088
======== =========== ========= ======= ======== ========
Total 702 $1,369,678 $101,774 $5,610 $ $
<CAPTION>
Series 20LA installment face-amount
certificates (2.51% yield to maturity):
<S> <C> <C> <C> <C> <C> <C>
Monthly Payments
1-12 85 $ 492,000 $ 16,078 $ 365 $ $
13-24 3 26,000 2,870 88
25-36 1 2,000 383
Paid-up 15 3,033 11,313 347
-------- ----------- --------- ------- -------- --------
Total Certificates 104 523,033 30,644 800
Additional Credits 34,291 34,291 3,035
-------- ----------- --------- ------- -------- --------
Total 104 $ 557,324 $ 64,935 $3,835 $ $
======== =========== ========= ======= ======== ========
<CAPTION>
Deductions Balance at End of Year
------------------------------------------- -----------------------------------
Cash Amount
Surrenders Cancellations Number of Amount
Prior and of Maturity Of
Description Maturities to Maturity Withdrawals Accounts Value Reserves
- ------------------- ---------- ----------- ------------- -------- ----------- --------
Series 20L installment face-amount
certificates (2.51% yield to maturity):
<S> <C> <C> <C> <C> <C> <C>
Monthly Payments
1-12 $ 5,236 $ $ $ 431 $1,013,000 $29,107
13-24 1,814 44 94,000 9,145
25-36 1,797 8 11,000 1,938
37-48 85 1 1,000 30
Paid-up 1,473 133 2,873 5,636
---------- ----------- ------------- -------- ----------- --------
Total Certificates 10,405 617 1,121,873 45,856
Additional Credits 8,962 42,161 42,161
---------- ----------- ------------- -------- ----------- --------
Total $ 19,367 $ $ $ 617 $1,164,034 $88,017
========== =========== ============= ======== =========== ========
<CAPTION>
Series 20LA installment face-amount
certificates (2.51% yield to maturity):
<S> <C> <C> <C> <C> <C> <C>
Monthly Payments
1-12 $ 6,730 $ $ $ 63 $ 286,000 $ 9,713
13-24 3 26,000 2,958
25-36 383
Paid-up 15 3,033 11,660
---------- ----------- ------------- -------- ----------- --------
Total Certificates 7,113 81 315,033 24,331
Additional Credits 8,791 28,535 28,535
---------- ----------- ------------- -------- ----------- --------
Total $ 15,904 $ $ $ 81 $ 343,568 $52,866
========== =========== ============= ======== =========== ========
24
<PAGE> 26
<CAPTION>
Schedule XI (continued)
FKF, Inc.
Certificate Reserves
Year Ended December 31, 1996
Balance at Beginning of Year Additions
-------------------------------------- --------------------------------------
Amount Reserve Charged
Number of Amount Charged Payments by to
of Maturity of to Certificate Other
Description Accounts Value Reserves Income Holders Accounts
- ------------------- -------- -------- -------- ------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Series 27 single
payment face-
amount certificates
(3.2% yield to
maturity):
Total Certificates 405 $1,124,030 $ 594,664 $20,159 $ $
Additional Credits 490,495 490,495 36,140
-------- ----------- ----------- -------- -------- --------
Total 405 $1,614,525 $1,085,159 $56,299 $ $
======== =========== =========== ======== ======== ========
Series 27A single
payment face-
amount investment
annuity certificates
(3.2% yield to
maturity):
Total Certificates 8 $ 12,920 $ 18,995 $ 540 $ $ 566
Additional Credits 12,842 12,842 877
-------- ----------- ----------- -------- -------- --------
Total 8 $ 25,762 $ 31,837 $ 1,417 $ $ 566
======== =========== =========== ======== ======== ========
<CAPTION>
Deductions Balance at End of Year
------------------------------------------- -----------------------------------
Cash Amount
Surrenders Cancellations Number of Amount
Prior and of Maturity Of
Description Maturities to Maturity Withdrawals Accounts Value Reserves
- ------------------- ---------- ----------- ------------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Series 27 single
payment face-
amount certificates
(3.2% yield to
maturity):
Total Certificates $ $ 75,303 $ $ 369 $1,024,550 $ 539,520
Additional Credits 64,098 462,537 462,537
---------- ----------- ------------- -------- ----------- -----------
Total $ 139,401 $ $ 369 $1,487,087 $1,002,057
========== =========== ============= ======== =========== ===========
Series 27A single
payment face-
amount investment
annuity certificates
(3.2% yield to
maturity):
Total Certificates $ $ 3,803 $ $ 7 $ 10,420 $ 16,298
Additional Credits 2,563 11,156 11,156
---------- ----------- ------------- -------- ----------- -----------
Total $ $ 6,366 $ $ 7 $ 21,576 $ 27,454
========== =========== ============= ======== =========== ===========
<FN>
Note: Additions charged to other accounts represent amounts credited to certificate reserves from dividends declared by
Boatmen's Bancshares, Inc. upon common stock beneficially owned by face-amount certificate holders.
25
<PAGE> 27
<CAPTION>
Schedule XI (continued)
FKF, Inc.
Certificate Reserves
Year Ended December 31, 1995
Balance at Beginning of Year Additions
-------------------------------------- --------------------------------------
Amount Reserve Charged
Number of Amount Charged Payments by to
of Maturity of to Certificate Other
Description Accounts Value Reserves Income Holders Accounts
- ------------------- -------- -------- -------- ------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Series 27 single
payment face-
amount certificates
(3.2% yield to
maturity):
Total Certificates 447 $1,240,030 $ 650,412 $21,928 $ $
Additional Credits 521,408 521,408 32,278
-------- ----------- ----------- -------- -------- --------
Total 447 $1,761,438 $1,171,820 $54,206 $ $
======== =========== =========== ======== ======== ========
Series 27A single
payment face-
amount investment
annuity certificates
(3.2% yield to
maturity):
Total Certificates 9 $ 13,140 $ 17,951 $ 641 $ $ 757
Additional Credits 12,204 12,204 866
-------- ----------- ----------- -------- -------- --------
Total 9 $ 25,344 $ 30,155 $ 1,507 $ $ 757
======== =========== =========== ======== ======== ========
<CAPTION>
Deductions Balance at End of Year
------------------------------------------- -----------------------------------
Cash Amount
Surrenders Cancellations Number of Amount
Prior and of Maturity Of
Description Maturities to Maturity Withdrawals Accounts Value Reserves
- ------------------- ---------- ----------- ------------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Series 27 single
payment face-
amount certificates
(3.2% yield to
maturity):
Total Certificates $ $ 77,676 $ $ 405 $1,124,030 $ 594,664
Additional Credits 63,191 490,495 490,495
---------- ----------- ------------- -------- ----------- -----------
Total $ $ 140,867 $ $ 405 $1,614,525 $1,085,159
========== =========== ============= ======== =========== ===========
Series 27A single
payment face-
amount investment
annuity certificates
(3.2% yield to
maturity):
Total Certificates $ $ 354 $ $ 8 $ 12,920 $ 18,995
Additional Credits 228 12,842 12,842
---------- ----------- ------------- -------- ----------- -----------
Total $ $ 582 $ $ 8 $ 25,762 $ 31,837
========== =========== ============= ======== =========== ===========
<FN>
Note: Additions charged to other accounts represent amounts credited to certificate reserves from dividends declared by
Boatmen's Bancshares, Inc. upon common stock beneficially owned by face-amount certificate holders.
26
<PAGE> 28
<CAPTION>
Schedule XI (continued)
FKF, Inc.
Certificate Reserves
Year Ended December 31, 1994
Balance at Beginning of Year Additions
-------------------------------------- --------------------------------------
Amount Reserve Charged
Number of Amount Charged Payments by to
of Maturity of to Certificate Other
Description Accounts Value Reserves Income Holders Accounts
- ------------------- -------- -------- -------- ------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Series 27 single
payment face-
amount certificates
(3.2% yield to
maturity):
Total Certificates 489 $1,365,490 $ 675,312 $23,208 $ $
Additional Credits 511,370 511,370 47,754
-------- ----------- ----------- -------- -------- --------
Total 489 $1,876,860 $1,186,682 $70,962 $ $
======== =========== =========== ======== ======== ========
Series 27A single
payment face-
amount investment
annuity certificates
(3.2% yield to
maturity):
Total Certificates 11 $ 16,670 $ 21,451 $ 758 $ $ 471
Additional Credits 14,012 14,012 1,454
-------- ----------- ----------- -------- -------- --------
Total 11 $ 30,682 $ 35,463 $ 2,212 $ $ 471
======== =========== =========== ======== ======== ========
<CAPTION>
Deductions Balance at End of Year
------------------------------------------- -----------------------------------
Cash Amount
Surrenders Cancellations Number of Amount
Prior and of Maturity Of
Description Maturities to Maturity Withdrawals Accounts Value Reserves
- ------------------- ---------- ----------- ------------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Series 27 single
payment face-
amount certificates
(3.2% yield to
maturity):
Total Certificates $ $ 48,108 $ $ 447 $1,240,030 $ 650,412
Additional Credits 37,716 521,408 521,408
---------- ----------- ------------- -------- ----------- -----------
Total $ $ 85,824 $ $ 447 $1,761,438 $1,171,820
========== =========== ============= ======== =========== ===========
Series 27A single
payment face-
amount investment
annuity certificates
(3.2% yield to
maturity):
Total Certificates $ $ 4,729 $ $ 9 $ 13,140 $ 17,951
Additional Credits 3,262 12,204 12,204
---------- ----------- ------------- -------- ----------- -----------
Total $ $ 7,991 $ $ 9 $ 25,344 $ 30,155
========== =========== ============= ======== =========== ===========
<FN>
Note: Additions charged to other accounts represent amounts credited to certificate reserves from dividends declared by
Boatmen's Bancshares, Inc. upon common stock beneficially owned by face-amount certificate holders.
</TABLE>
27
<PAGE> 29
<TABLE>
FKF, Inc. Schedule XI (continued)
-----------------------
Amounts Periodically Credited to Certificate Holders' Accounts
to Accumulate the Maturity Amount of Installment Certificates
Series 20
---------
<CAPTION>
Amount credited
Payments Amount to reserves
made by credited to mature Total credited
Certificate Less to reserve by charges to reserves Accumulative
Year holders loading to mature to income to mature total
---- ----------- ------- ---------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
1st 38.10 19.04 19.06 .62 19.68 19.68
2nd 38.10 2.66 35.44 1.80 37.24 56.92
3rd 38.10 2.66 35.44 3.00 38.44 95.36
4th 38.10 2.66 35.44 4.26 39.70 135.06
5th 38.10 2.66 35.44 5.54 40.98 176.04
6th 38.10 1.52 36.58 6.92 43.50 219.54
7th 38.10 1.52 36.58 8.32 44.90 264.44
8th 38.10 1.52 36.58 9.78 46.36 310.80
9th 38.10 1.52 36.58 11.28 47.86 358.66
10th 38.10 1.52 36.58 12.86 49.44 408.10
11th 38.10 1.52 36.58 14.44 51.02 459.12
12th 38.10 1.52 36.58 16.12 52.70 511.82
13th 38.10 1.52 36.58 17.84 54.42 566.24
14th 38.10 1.52 36.58 19.60 56.18 622.42
15th 38.10 1.52 36.58 21.42 58.00 680.42
16th 38.10 1.52 36.58 23.32 59.90 740.32
17th 38.10 1.52 36.58 25.26 61.84 802.16
18th 38.10 1.52 36.58 27.26 63.84 866.00
19th 38.10 1.52 36.58 29.34 65.92 931.92
20th 38.10 1.52 36.58 31.50 68.08 1,000.00
</TABLE>
28
<PAGE> 30
<TABLE>
FKF, Inc. Schedule XI (continued)
-----------------------
Amounts Periodically Credited to Certificate Holders' Accounts
to Accumulate the Maturity Amount of Installment Certificates
Certificate Series 20L and 20LA per $1,000 Face Amount
------------------------------------------------------
Monthly Payment Basis
---------------------
<CAPTION>
Annual gross Amount credited
payments Amount to reserves
made by credited to mature Total credited
certificate Less to reserves by charges to reserves Accumulative
Year holders loading to mature to income to mature total
---- ----------- ------- ----------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
1st 51.00 5.76 45.24 .77 46.01 46.01
2nd 51.00 5.76 45.24 2.18 47.42 93.43
3rd 51.00 5.76 45.24 3.63 48.87 142.30
4th 51.00 5.76 45.24 5.13 50.37 192.67
5th 51.00 5.76 45.24 6.88 52.12 244.79
6th 51.00 5.76 45.24 8.07 53.31 298.10
7th 51.00 5.76 45.24 9.91 55.15 353.25
8th 51.00 5.76 45.24 11.60 56.84 410.09
9th 51.00 5.76 45.24 13.34 58.58 468.67
10th 51.00 5.76 45.24 15.14 60.38 529.05
11th 51.00 5.76 45.24 16.99 62.23 591.28
12th 51.00 5.76 45.24 18.90 64.14 655.42
13th 51.00 5.76 45.24 20.86 66.10 721.52
14th 51.00 5.76 45.24 22.89 68.13 789.65
15th 51.00 5.76 45.24 24.68 69.92 859.57
16th 26.66 26.66 886.23
17th 27.17 27.17 913.40
18th 28.00 28.00 941.40
19th 28.86 28.86 970.26
20th 29.74 29.74 1,000.00
</TABLE>
29
<PAGE> 31
<TABLE>
FKF, Inc. Schedule XI (continued)
-----------------------
Amounts Periodically Credited to Certificate Holders' Accounts
to Accumulate the Maturity Amount of Installment Certificates
Certificate Series 20L and 20LA per $1,000 Face Amount
------------------------------------------------------
Monthly Payment Basis
---------------------
<CAPTION>
Annual gross Amount credited
payments Amount to reserves
made by credited to mature Total credited
certificate Less to reserves by charges to reserves Accumulative
Year holders loading to mature to income to mature total
---- ----------- ------- ----------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
1st 48.00 3.36 44.64 1.37 46.01 46.01
2nd 48.00 3.36 44.64 2.78 47.42 93.43
3rd 48.00 3.36 44.64 4.23 48.87 142.30
4th 48.00 3.36 44.64 5.73 50.37 192.67
5th 48.00 3.36 44.64 7.48 52.12 244.79
6th 48.00 3.36 44.64 8.67 53.31 298.10
7th 48.00 3.36 44.64 10.51 55.15 353.25
8th 48.00 3.36 44.64 12.20 56.84 410.09
9th 48.00 3.36 44.64 13.94 58.58 468.67
10th 48.00 3.36 44.64 15.74 60.38 529.05
11th 48.00 3.36 44.64 17.59 62.23 591.28
12th 48.00 3.36 44.64 19.50 64.14 655.42
13th 48.00 3.36 44.64 21.46 66.10 721.52
14th 48.00 3.36 44.64 23.49 68.13 789.65
15th 48.00 3.36 44.64 25.28 69.92 859.57
16th 26.66 26.66 886.23
17th 27.17 27.17 913.40
18th 28.00 28.00 941.40
19th 28.86 28.86 970.26
20th 29.74 29.74 1,000.00
</TABLE>
30
<PAGE> 32
<TABLE>
FKF, Inc. Schedule XI (continued)
-----------------------
Amounts Periodically Credited to Certificate Holders' Accounts
to Accumulate the Maturity Amount of Installment Certificates
Series 27
---------
<CAPTION>
Annual gross Amount credited
payments Amount to reserves
made by credited to mature Total credited
certificate Less to reserves by charges to reserves Accumulative
Year holders loading to mature to income to mature total
---- ----------- ------- ----------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
1st 425.00 29.75 395.25 13.83 409.08 409.08
2nd 14.31 14.31 423.39
3rd 14.81 14.81 438.20
4th 15.33 15.33 453.53
5th 15.86 15.86 469.39
6th 16.42 16.42 485.81
7th 16.99 16.99 502.80
8th 17.58 17.58 520.38
9th 18.20 18.20 538.58
10th 18.84 18.84 557.42
11th 19.50 19.50 576.92
12th 20.18 20.18 597.10
13th 20.88 20.88 617.98
14th 21.61 21.61 639.59
15th 22.37 22.37 661.96
16th 23.15 23.15 685.11
17th 23.96 23.96 709.07
18th 24.80 24.80 733.87
19th 25.67 25.67 759.54
20th 26.57 26.57 786.11
21st 27.50 27.50 813.61
22nd 28.46 28.46 842.07
23rd 29.45 29.45 871.52
24th 30.48 30.48 902.00
25th 31.54 31.54 933.54
26th 32.66 32.66 966.20
27th 33.80 33.80 1,000.00
</TABLE>
31
<PAGE> 33
<TABLE>
FKF, Inc. Schedule XI (continued)
-----------------------
Amounts Periodically Credited to Certificate Holders' Accounts
to Accumulate the Maturity Amount of Installment Certificates
Series 27A
----------
<CAPTION>
Annual gross Amount credited
payments Amount to reserves
made by credited to mature Total credited
certificate Less to reserves by charges to reserves Accumulative
Year holders loading to mature to income to mature total
---- ----------- ------- ----------- ------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
1st 425.00 29.75 395.25 13.83 409.08 409.08
2nd 14.31 14.31 423.39
3rd 14.81 14.81 438.20
4th 15.33 15.33 453.53
5th 15.86 15.86 469.39
6th 16.42 16.42 485.81
7th 16.99 16.99 502.80
8th 17.58 17.58 520.38
9th 18.20 18.20 538.58
10th 18.84 18.84 557.42
11th 19.50 19.50 576.92
12th 20.18 20.18 597.10
13th 20.88 20.88 617.98
14th 21.61 21.61 639.59
15th 22.37 22.37 661.96
16th 23.15 23.15 685.11
17th 23.96 23.96 709.07
18th 24.80 24.80 733.87
19th 25.67 25.67 759.54
20th 26.57 26.57 786.11
21st 27.50 27.50 813.61
22nd 28.46 28.46 842.07
23rd 29.45 29.45 871.52
24th 30.48 30.48 902.00
25th 31.54 31.54 933.54
26th 32.66 32.66 966.20
27th 33.80 33.80 1,000.00
</TABLE>
32
<PAGE> 34
INDEX TO EXHIBITS
-----------------
The following documents are filed as exhibits to this report or are
incorporated by reference by specific reference to previous filings with the
Commission:
Exhibit No.
- -----------
(3) Articles of Incorporation and Bylaws of Registrant are on file
with the Commission as exhibits to Registrant's Form N-8B-4
Report filed on October 25, 1977, which documents are hereby
incorporated by reference.
(4) Copies of or specimen copies of each of the outstanding face-
amount certificates, that being Series 20, 20L, 20LA, 27 and 27A,
and a copy of an order of the United States District Court for
the District of Kansas, dated May 2, 1977, are on file with the
Commission as exhibits to Registrant's Form N-8B-4 Report filed
on October 25, 1977, which documents are hereby incorporated by
reference.
(10) A copy of the Depository Agreement, dated October 23, 1962, as
supplemented and assigned, is on file with the Commission as an
exhibit to Registrant's Form N-8B-4 Report filed on October 25,
1977, and a copy of the Second Amendment to the Depository
Agreement dated November 6, 1981, is filed as an exhibit to the
1981 Form 10-K dated March 16, 1982, which documents are hereby
incorporated by reference.
(13) Registrant's Annual Report to Shareholder consists of the
financial statements submitted herewith on pages 9 through 19.
(16) A copy of the letter regarding the change in certifying
accountants dated March 18, 1993, is on file with the Commission
as an exhibit to Registrant's Form 8-K filed on March 18, 1993,
which document is hereby incorporated by reference.
33
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 298
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,376,206
<INVESTMENTS-CARRYING> 49,800
<INVESTMENTS-MARKET> 51,086
<LOANS> 0
<ALLOWANCE> 0
<TOTAL-ASSETS> 1,437,918
<DEPOSITS> 0
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,137,096
<LONG-TERM> 0
0
0
<COMMON> 250,000
<OTHER-SE> 50,822
<TOTAL-LIABILITIES-AND-EQUITY> 1,437,918
<INTEREST-LOAN> 0
<INTEREST-INVEST> 90,067
<INTEREST-OTHER> 0
<INTEREST-TOTAL> 90,067
<INTEREST-DEPOSIT> 0
<INTEREST-EXPENSE> 0
<INTEREST-INCOME-NET> 90,067
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 7,274
<EXPENSE-OTHER> 87,168
<INCOME-PRETAX> 11,239
<INCOME-PRE-EXTRAORDINARY> 9,409
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,409
<EPS-PRIMARY> 0.04
<EPS-DILUTED> 0.04
<YIELD-ACTUAL> 6.41
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
