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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the fiscal year ended December 31, 1999
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transaction period from _________ to _________
Commission File Number 0-26032
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
AREA BANCSHARES CORPORATION
PROFIT SHARING/401(k) PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
AREA BANCSHARES CORPORATION
(Exact name of registrant as specified in its charter)
230 FREDERICA STREET
OWENSBORO, KY 42301
(Address of principal executive offices)
(270) 926-3232
(Registrant's telephone number)
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AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
Financial Statements and Schedules
December 31, 1999 and 1998
With Independent Auditors' Report Thereon
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AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Independent Auditors' Report 1
Statements of Net Assets Available for Benefits - December 31, 1999 and 1998 2
Statements of Changes in Net Assets Available for Benefits -
Years ended December 31, 1999 and 1998 3
Notes to Financial Statements 4
SCHEDULES
H Line 4d - Schedule of Non-Exempt Transactions -
Year Ended December 31, 1999 8
H Line 4i - Schedule of Assets Held for Investment Purposes -
December 31, 1999 9
</TABLE>
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INDEPENDENT AUDITORS' REPORT
The Retirement Committee of
Area Bancshares Corporation:
We have audited the accompanying statements of net assets available for
benefits of Area Bancshares Corporation Profit Sharing/401(k) Plan (the
Plan) as of December 31, 1999 and 1998, and the related statements of
changes in net assets available for benefits for the years then ended.
These financial statements are the responsibility of the Plan's management.
Our responsibility is to express an opinion on these financial statements
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of Area
Bancshares Corporation Profit Sharing/401(k) Plan as of December 31, 1999
and 1998, and the changes in net assets available for benefits for the
years then ended in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules of
non-exempt transactions and assets held for investment purposes are
presented for the purpose of additional analysis and are not a required
part of the basic financial statements, but are supplementary information
required by the Department of Labor's Rules and Regulations for Reporting
and Disclosure under the Employee Retirement Income Security Act of 1974.
These supplemental schedules are the responsibility of the Plan's
management and have been subjected to the auditing procedures applied in
the audit of the basic financial statements and, in our opinion, are fairly
stated in all material respects in relation to the basic financial
statements taken as a whole.
/s/ KPMG LLP
Louisville, Kentucky
June 27, 2000
1
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AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
Statements of Net Assets Available for Benefits
December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
----------- ----------
<S> <C> <C>
ASSETS
Investments, at fair value (note 3):
Cash equivalents $ 608,821 2,581,020
Common stocks 6,091,373 4,125,899
Mutual funds 11,323,083 7,661,445
----------- ----------
Total investments 18,023,277 14,368,364
----------- ----------
Receivables:
Employer contributions 162,564 118,384
Accrued income 16,330 47,561
Other -- 10,859
----------- ----------
178,894 176,804
----------- ----------
Total assets 18,202,171 14,545,168
----------- ----------
LIABILITIES
Accrued expenses 7,500 7,500
Payable to participants 5,721 14,187
----------- ----------
Total liabilities 13,221 21,687
----------- ----------
Net assets available for benefits $18,188,950 14,523,481
=========== ==========
</TABLE>
See accompanying notes to financial statements.
2
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AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 1999 and 1998
<TABLE>
<CAPTION>
1999 1998
----------- ----------
<S> <C> <C>
Additions to net assets attributed to:
Investment income:
Dividends and interest $ 683,848 774,937
Net appreciation 2,191,298 1,020,728
----------- ----------
2,875,146 1,795,665
----------- ----------
Contributions:
Employee 1,784,464 1,654,996
Employer 644,678 521,851
----------- ----------
2,429,142 2,176,847
----------- ----------
Total additions 5,304,288 3,972,512
----------- ----------
Deductions from net assets attributed to:
Benefits paid to participants 1,629,117 700,598
Administrative expenses 9,702 23,041
----------- ----------
Total deductions 1,638,819 723,639
----------- ----------
Net increase 3,665,469 3,248,873
Net assets available for benefits - beginning of year 14,523,481 11,274,608
----------- ----------
Net assets available for benefits - end of year $18,188,950 14,523,481
=========== ==========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE> 7
AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(1) DESCRIPTION OF PLAN
The following brief description of Area Bancshares Corporation (the
Corporation) Profit Sharing/401(k) Plan (the Plan) provides only general
information. Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions.
(A) GENERAL
The Plan is a defined contribution plan generally covering all
full-time employees of Area Bancshares Corporation, The Owensboro
National Bank, First City Bank and Trust Company, Bowling Green
Bank and Trust Company, New Farmers National Bank, Southern
Deposit Bank, Citizens Deposit Bank, Alliance Bank, Broadway Bank
and Trust, First and Peoples Bank, HNB Bank, N.A., Jefferson
Banking Company, Peoples Commercial Bank, The Vine Street Trust
Company, and Vine Street Financial, Inc. (the Banks) who have
completed six months of service and have attained the age of 21.
The Plan is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA).
(B) CONTRIBUTIONS
Participants may contribute not less than 1% and not more than 15%
of their salary to the Plan and direct their investments between
one or more of nine investment funds, subject to annual
limitations. Participant 401(k) deferrals are matched by the Banks
on the basis of a 50% match on participant deferrals up to 7% of
the participant's salary.
(C) PARTICIPANT ACCOUNTS
Investment earnings are allocated based on each participant's
proportionate share of the fair market value of the appropriate
funds as of the valuation date, decreased by any distributions to
the participant.
The Banks' prior contributions and related earnings, which are
forfeited during the year as a result of employee terminations,
are allocated to eligible participants in the Plan as of each
December 31 valuation date based on the participant's
proportionate share of compensation relative to the compensation
paid to all eligible participants during the Plan year. Effective
with the Plan year beginning January 1, 1995, forfeitures reduce
employer match contributions.
Participants direct their 401(K) and employer match contributions
into designated funds. These funds during the Plan years ended
December 31, 1999 and 1998 were: Fidelity FICP Treasury II Money
Market Fund; Area Bancshares Corporation Stock; Federated U.S.
Government Fund; Federated Intermediate Income Fund; Fidelity
Puritan Fund; Fidelity Blue Chip Fund; Fidelity Value Fund;
Fidelity Low Price Stock Fund; and T. Rowe Price International
Fund.
(D) VESTING
Participants are immediately 100% vested in their contributions
and related earnings. Participants are 100% vested in the Banks'
contributions and related earnings after five years of service.
4
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AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(E) PAYMENT OF BENEFITS
Upon retirement, termination of service or total and permanent
disability, a participant or his designated beneficiary may elect
to receive all amounts credited to the participant's account plus
the participant's share of the Banks' contributions for the
current fiscal year in a lump-sum, equal installments over a
period not to exceed the life expectancy of the participant or the
joint life expectancy of the participant and participant's spouse,
applied to the purchase of an annuity or paid or applied in any
combination thereof. Upon death, the participant's designated
beneficiary may elect to receive the amount such participant would
have been entitled to receive, had he retired on the date of his
death, in one lump-sum, in equal installments over a period not to
exceed life expectancy, or applied to the purchase of an immediate
life annuity. Any portion of a participant's account relating to
employer contributions to which he is not entitled for any reason
is forfeited upon the participant's incurring a break in service
as defined under the Plan.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF FINANCIAL STATEMENT PRESENTATION
The accompanying financial statements have been prepared on the
accrual basis of accounting and comply with the rules and
regulations prescribed or permitted by the Department of Labor.
(B) INVESTMENTS
Investments are stated at fair value. Quoted market prices are
used to value investments. Purchases and sales of investments are
recorded on a trade-date basis. Interest income is recorded on the
accrual basis. Dividends are recorded on the ex-dividend date.
(C) USE OF ESTIMATES
Management of the Plan has made a number of estimates and
assumptions relating to the reporting of assets and liabilities
and the disclosure of contingent liabilities to prepare these
financial statements in conformity with generally accepted
accounting principles. Actual results could differ from those
estimates.
(3) INVESTMENTS
In September 1999, the American Institute of Certified Public
Accountants issued Statement of Position 99-3, Accounting for and
Reporting of Certain Defined Contribution Plan Investments and Other
Disclosure Matters (SOP 99-3). SOP 99-3 simplifies the disclosure for
certain investments and is effective for plan years ending after
December 15, 1999. The Plan adopted SOP 99-3 during the Plan year ending
December 31, 1999. Accordingly, information previously required to be
disclosed about participant-directed fund investment programs is not
presented in the Plan's 1999 financial statements. The Plan's 1998
financial statements have been reclassified to conform with the current
year's presentation.
5
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AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
The following table represents the fair value of individual investments
which exceed 5% of the Plan's net assets:
<TABLE>
<CAPTION>
1999 1998
----------- ---------
<S> <C> <C>
Common stock:
Area Bancshares Corporation $ 4,187,467 3,673,950
Security First Technologies Corporation 1,903,906 451,949
Mutual Funds:
Fidelity Blue Chip Fund 5,778,889 3,847,661
Fidelity Low Price Stock Fund 2,125,461 2,543,697
Fidelity Value Fund 1,614,813 1,682,845
</TABLE>
During 1999 and 1998, the Plan's investments (including gains and losses
on investments bought and sold, as well as held during the year)
appreciated in value by $2,191,298 and $1,020,728, respectively, as
follows:
<TABLE>
<CAPTION>
1999 1998
----------- ---------
<S> <C> <C>
Common stock $ 1,381,370 599,636
Mutual funds 809,928 421,092
----------- ---------
$ 2,191,298 1,020,728
=========== =========
</TABLE>
(4) TAX STATUS
The Internal Revenue Service has determined and informed the Company by
a letter dated January 1, 1996, that the Plan and related trust are
designed in accordance with applicable sections of the Internal Revenue
Code (IRC).
A participant has no taxable income as a result of contributions of the
employer or income of the Plan until he or she receives a distribution
or a distribution is made available under the Plan.
(5) PLAN TERMINATION
While the Corporation has not expressed any intent to terminate the Plan
or to discontinue contributions, it is free to do so at any time,
subject to the provisions set forth in ERISA. In the event of
termination or partial termination or upon discontinuance of
contributions, the amounts credited to participants' accounts become
nonforfeitable.
(6) RELATED-PARTY TRANSACTIONS
The Owensboro National Bank, a wholly owned subsidiary of Area
Bancshares Corporation, is trustee of the Plan. The trustee provided
management and accounting services and use of property and equipment to
the Plan at no charge during 1999 and 1998. All Plan investments and the
related investment earnings were maintained by the trustee.
6
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AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(7) NON-EXEMPT TRANSACTIONS
If was noted that there was an unintentional delay by the Trustee in
posting the February 5, 1999 employee deferrals of $3,269. On February
22, 1999, theses amounts were posted by the trustee. The Trustee is in
the process of calculating interest on these late contributions.
Participant accounts will be credited with such amounts once calculated.
7
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SCHEDULE H
AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
EIN: 61-0902343
Line 4d - Schedule of Non-Exempt Transactions
December 31, 1999
<TABLE>
<CAPTION>
RELATIONSHIP TO PLAN
EMPLOYER OR OTHER DESCRIPTION OF COST OF
IDENTITY OF PARTY INVOLVED PARTY-IN-INTEREST TRANSACTION ASSET
---------------------------- -------------------- ---------------------- --------
<S> <C> <C> <C>
Area Bancshares Corporation Trustee Employee deferrals not $ 3,269
deposited in a timely
manner
</TABLE>
It was noted that there was an unintentional delay by the Trustee in posting the
February 5, 1999 employee deferrals of $3,269. On February 22, 1999, these
amounts were posted by the trustee.
8
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SCHEDULE H
AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
EIN: 61-0902343
Line 4i - Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
IDENTITY OF ISSUE, BORROWER, CURRENT
LESSOR OR SIMILAR PARTY DESCRIPTION OF INVESTMENT VALUE
--------------------------------- ---------------------------------- -------------
<S> <C> <C>
Fidelity Investments FICP Treasury II Money Market Fund $ 608,821
Area Bancshares Corporation* Common Stock 4,187,467
Security First Technologies Corp. Common Stock 1,903,906
Federated Investments U.S. Government Fund 271,030
Federated Investments Intermediate Income Fund 141,422
Fidelity Investments Puritan Fund 1,002,510
Fidelity Investments Blue Chip Fund 5,778,889
Fidelity Investments Value Fund 1,614,813
Fidelity Investments Low Price Stock Fund 2,125,461
T. Rowe Price International Stock Fund 388,958
-------------
Total Investments $ 18,023,277
=============
</TABLE>
*Denotes a party in-interest.
9
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AREA BANCSHARES CORPORATION
PROFIT SHARING/401(K) PLAN
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
Area Bancshares Corporation
Profit Sharing/401(k) Plan
Date: July 13, 2000 By: /s/ Thomas R. Brumley
------------- ---------------------
Name: Thomas R. Brumley
Title: President and Chief
Executive Officer
Date: July 13, 2000 By: /s/ John A. Ray
------------- ---------------
Name: John A. Ray
Title: Executive Vice President and
Chief Operating Officer
Date: July 13, 2000 By: /s/ Patricia C. Drury
------------- ---------------------
Name: Patricia C. Drury
Title: Vice President, Trust Officer
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description Submission Media
----------- ----------- ----------------
<S> <C> <C>
Ex 23 Consent of KPMG LLP, Electronic
Independent Public Accountants,
Dated July 12, 2000
</TABLE>
