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
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to ____________
Commission File Number 1-10602
MID-AMERICA BANCORP
(Exact name of registrant as specified in its charter)
Kentucky 61-1012933
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
500 West Broadway
Louisville, Kentucky 40202
(Address of Principal (Zip Code)
Executive Offices)
Registrant's telephone number, including area code: (502) 589-3351
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock AMEX
Securities registered pursuant to Section 12(g) of the Act: None
(continued)
<PAGE>
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 (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 by check mark if the disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K 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. [ ]
The aggregate market value of the voting stock held by non-
affiliates (shareholders other than directors, executive officers
and principal shareholders) of the registrant as of February 17,
1995 was approximately $84,093,000.
The number of shares outstanding of the registrant's common stock
as of February 17, 1995 was 8,813,128.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Registrant's Annual Report to Shareholders for the year
ended December 31, 1994 are incorporated by reference into Parts I
and II.
Portions of Registrant's Proxy Statement for the Annual Meeting of
Shareholders to be held April 20, 1995 are incorporated by
reference into Part III.
<PAGE>
TABLE OF CONTENTS
PART I
Item No. Page
1. BUSINESS . . . . . . . . . . . . . . . . . . . 2
2. PROPERTIES . . . . . . . . . . . . . . . . . . 12
3. LEGAL PROCEEDINGS . . . . . . . . . . . . . . 12
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS . . . . . . . . . . . . . . . . . . . 12
EXECUTIVE OFFICERS OF REGISTRANT . . . . . . . 12
PART II
5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED SECURITY HOLDER MATTERS . . . . . . . 14
6. SELECTED FINANCIAL DATA . . . . . . . . . . . 14
7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS. 14
8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. . 15
9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE . . . . 15
PART III
10. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT . . . . . . . . . . . . . . . . . . 16
11. EXECUTIVE COMPENSATION . . . . . . . . . . . . 16
12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT. . . . . . . . . . . . . 16
13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 16
PART IV
14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K. . . . . . . . . . . . . . 17
SIGNATURES . . . . . . . . . . . . . . . . . . 20
<PAGE>
PART I
ITEM 1. BUSINESS OF MID-AMERICA BANCORP
Mid-America Bancorp (the "Company") is a Kentucky corporation
registered as a bank holding company pursuant to the Bank Holding
Company Act of 1956, as amended (the "BHC Act"), and as a savings
and loan holding company pursuant to the Home Owners' Loan Act.
The Company is registered with, and subject to, the supervision of
the Board of Governors of the Federal Reserve System (the "Federal
Reserve Board") and the Office of Thrift Supervision ("OTS").
The Company's banking subsidiary, Mid-America Bank of Louisville
and Trust Company (the "Bank") represents the Company's primary
subsidiary. The Bank was established as a Kentucky banking
corporation on October 14, 1925, under the name "Morris Plan
Industrial Bank." On July 2, 1946 the Bank's name was changed to
"Bank of Louisville." The Bank merged with "Royal Bank and Trust
Company" in 1963 under the name Bank of Louisville-Royal Bank and
Trust Co. The Bank's name was changed to Bank of Louisville and
Trust Company on March 26, 1980. The present name of the Bank was
adopted on March 25, 1983, when the Bank was merged with the
Company.
The Bank is engaged in a wide range of commercial, trust, and
personal banking activities including the usual acceptance of
deposits for checking, savings and time deposit accounts; making of
real estate, construction, commercial, home improvement and
consumer loans; issuance of letters of credit; rental of safe
deposit boxes; providing financial counseling for institutions and
individuals; serving as executor of estates and as trustee under
trusts and under various pension and employee benefit plans;
serving as escrow agent on bond issues; serving as stock transfer
agent, exchange agent, dividend disbursing agent, and registrar
with respect to corporate securities; and participation in small
business loan and student loan programs.
The Company also operates a number of other subsidiaries, including
Mid-America Bank, FSB, a federal savings bank "Savings Bank", which
was organized and chartered during 1993. The Savings Bank is
located in Pewee Valley, Kentucky in Oldham County, and competes on
the local level with other commercial banks and financial
institutions in Oldham County, Kentucky for all types of deposits
and loans. Another subsidiary, Mid-America Money Order Company, is
engaged in the issuance and sale throughout the United States of
retail money orders and similar consumer-type payment instruments
having a face value of not more than $1,000. As of December 31,
1994, Mid-America Money Order Company was licensed to issue money
orders in all 50 states, the District of Columbia and the U.S.
Virgin Islands.
Competition
Competition for banking and related financial services is active in
Jefferson County, Kentucky and other geographic areas served by the
Company's subsidiaries. The Company's subsidiaries compete with
other financial institutions including savings and loan
associations, finance companies, mortgage banking companies, credit
unions, insurance companies, brokerage firms, mutual funds, and
other commercial banks. In addition, large money center banks
continue to increase competition in the Company's trade territories
through the acquisition of local financial institutions, the
establishment of loan production offices and the solicitation of
customers for credit cards and related services. At present, both
price and product range are critically important in maintaining and
expanding financial relationships.
On December 31, 1994, the Bank ranked fourth among banks and trust
companies in the City of Louisville and in Jefferson County,
Kentucky, in terms of total assets and in terms of total deposits.
On December 31, 1994 there were ten commercial banks and trust
companies in Jefferson County, including the Bank.
Employees
As of December 31, 1994, the Company and subsidiaries employed 596
persons on a full-time basis and 112 on a part-time basis.
Government Policies
As a financial institution, the earnings of the Company's various
operating subsidiaries are affected by state and federal laws and
by policies of various federal and state regulatory agencies.
These policies include, for example, statutory maximum legal
lending rates, domestic monetary policies of the Federal Reserve
Board, United States fiscal policy, and capital adequacy and
liquidity constraints imposed by bank regulatory agencies.
Supervision And Regulation
The Company is a registered bank holding company under the "BHC
Act", and is subject to supervision, regulation and examination by
the Federal Reserve Board. Under the "BHC Act", a bank holding
company is, with limited exceptions, prohibited from (i) acquiring
direct or indirect ownership or control of any voting shares of any
company which is not a bank or (ii) engaging in any activity other
than managing or controlling banks. Notwithstanding this
prohibition, a bank holding company may engage in or own shares of
a company that engages solely in activities which the Federal
Reserve Board has determined to be so closely related to banking,
or managing or controlling banks, as to be a proper incident
thereto.
As a registered bank holding company, the Company is required to
file with the Federal Reserve Board annual reports and other
information regarding its business operations and the business
operations of its subsidiaries. It is also subject to examination
by the Federal Reserve Board and is required to obtain Federal
Reserve Board approval prior to acquiring, directly or indirectly,
ownership or control of any voting shares of any bank, if, after
such acquisition, it would own or control, directly or indirectly,
more than five percent of the voting stock of such bank unless it
already owns a majority of the voting stock of such bank.
The Bank is subject to regulation and supervision, of which regular
bank examinations are a part, by the Kentucky Department of
Financial Institutions, Division of Banking. The Federal Deposit
Insurance Corporation ("FDIC") currently insures the deposits of
the Bank to a maximum of $100,000 per depositor. For this
protection, the Bank pays a semi-annual statutory assessment and is
subject to the rules and regulations of the FDIC pertaining to
deposit insurance. On July 13, 1989, the Bank became a member bank
in the Federal Reserve System. The Federal Reserve Board retains
direct supervision of state chartered member banks and their
affiliates through periodic examinations, the expense of which is
borne by the Bank.
The Savings Bank is subject to regulation and supervision, of which
regular examinations are a part, by the "OTS". The FDIC currently
insures the deposits of the Savings Bank to a maximum of $100,000
per depositor.
Eton Life Insurance Company, a wholly-owned subsidiary of the
Company, is regulated by the Kentucky Department of Insurance and
is subject to Kentucky statutes and regulations governing domestic
underwriters of credit life, accident, and health insurance.
The enactment in August 1989 of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989 ("FIRREA") placed the savings
and loan insurance fund under the control of the FDIC, created the
OTS in the U.S. Treasury Department and created the Resolution
Trust Corporation to act as receiver to liquidate failed thrift
institutions. FIRREA further expanded the power of bank holding
companies to allow for the acquisition of savings associations and
to operate them as separate thrift subsidiaries. FIRREA enhanced
the ability of bank holding companies to expand through thrift
acquisitions beyond their present geographic interstate banking
region. The tandem restrictions placed upon thrift subsidiaries of
bank holding companies have been removed allowing linkage of
deposit-taking activities and solicitation of deposits and loans on
behalf of affiliate companies. FIRREA led to many structural
changes in competition for loans, deposits and other services,
affected collateral valuation methods, and the acquisition of
financial institutions.
In addition to FIRREA, in December 1991 the Federal Deposit
Insurance Corporation Improvement Act of 1991 (the "FDIC
Improvement Act") was enacted. The FDIC Improvement Act dealt with
the recapitalization of the Bank Insurance Fund, deposit insurance
reform, including requiring the FDIC to establish a risk-based
premium assessment system, and a number of other regulatory and
supervisory matters.
On September 29, 1994, President Clinton signed into law the
Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
(the "Act"). When fully phased in, the Act will remove state law
barriers to interstate bank acquisitions and will permit the
consolidation of interstate banking operations. Under the Act,
effective September 29, 1995, adequately capitalized and managed
bank holding companies may acquire banks in any state, subject to
Community Reinvestment Act compliance, compliance with federal and
state antitrust laws and deposit concentration limits, and subject
to any state laws restricting the acquisition of a bank that has
not been in existence for a minimum time period (up to five years).
Effective September 29, 1995, the Act will also permit any bank
that is controlled by a bank holding company to act as agent for
any affiliated financial institution in deposit and loan
transactions, regardless of whether the institutions are located in
the same or different states. The Act's interstate branching
provisions will become operative on June 1, 1997, although any
state can, prior to that time, adopt legislation to accelerate
interstate branching or prohibit it completely. The Act's
interstate branching provisions will permit banks to merge across
state lines and, if state laws permit de novo branching, to
establish a new branch as its initial entry into a state.
<PAGE>
The following tables set forth selected statistical information with
respect to the Company and should be read in conjunction with the Company's
consolidated financial statements.
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDERS' EQUITY;
INTEREST RATES AND INTEREST DIFFERENTIAL
The schedule captioned "Average Balances and Yields/Rates Tax
Equivalent Basis" included on page 21 of the Company's annual report to
shareholders for the year ended December 31, 1994, which is incorporated
herein by reference, shows, for each major category of interest earning
asset and interest bearing liability, the average amount outstanding, the
interest earned or expensed on such amount and the average rate earned or
expensed for each of the years in the three-year period ended December 31,
1994. The schedule also shows the average rate earned on all interest
earning assets and the average rate expensed on all interest bearing
liabilities, the net interest spread and the net interest margin (net
interest income divided by total average interest earning assets) for each
of the years in the three-year period ended December 31, 1994. Nonaccrual
loans outstanding were included in calculating the rate earned on loans.
Total interest income includes the effects of taxable equivalent
adjustments using a tax rate of 35% for 1994 and 1993 and 34% for 1992.
The changes in interest income and interest expense resulting from
changes in volume and changes in rates for the years ended December 31,
1994 and 1993 are shown in the schedule captioned "Interest Income and
Interest Expense Volume and Rate Changes for the Years 1994 and 1993 Tax
Equivalent Basis" included on page 22 of the Company's annual report to
shareholders for the year ended December 31, 1994, which is incorporated
herein by reference.
SECURITIES PORTFOLIO
BOOK VALUE
<TABLE>
<CAPTION>
December 31
(In Thousands) --------------------------------------------
1994 1993 1992
------------ ------------ ------------
<S> <C> <C> <C>
U.S. Treasury and U.S. government agencies $296,262 $283,597 $114,048
States and political subdivisions 7,877 2,956 4,700
Corporate obligations 26,778 33,557 40,469
Equity securities and other 14,878 14,188 7,549
------------ ------------ ------------
$345,795 $334,298 $166,766
============ ============ ============
</TABLE>
<PAGE>
SECURITIES
MATURITY DISTRIBUTION AND WEIGHTED AVERAGE YIELDS
DECEMBER 31, 1994
<TABLE>
<CAPTION>
(Dollars In Thousands) Within After One But After Five But After
One Year Within Five Years Within Ten Years Ten Years
------------------ -------------------- --------------------- ---------------------
Amount Yield Amount Yield Amount Yield Amount Yield
---------- ------- ---------- --------- ----------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury and U.S.
Government agencies $151,740 4.34% $141,372 5.30% $1,292 3.92% $1,858 5.46%
States and political
subdivisions 584 11.98% 1,941 7.95% 1,406 8.00% $3,946 7.69%
Corporate obligations 16,946 5.23% 9,832 5.56% -- -- -- --
Equity securities and other 100 3.30% 250 6.75% -- -- 14,528 6.29%
---------- ---------- ----------- ----------
$169,370 4.45% $153,395 5.35% $2,698 6.05% $20,332 6.49%
========== ========== =========== ==========
</TABLE>
The calculation of the weighted average yield is based on the average tax
equivalent yield, weighted by the respective costs of the securities.
The weighted average yields on states and political subdivisions securities
are computed on a tax equivalent basis using a marginal federal tax rate of
35%.
LOAN PORTFOLIO
<TABLE>
<CAPTION>
(In Thousands)
December 31
--------------------------------------------------------
1994 1993 1992 1991 1990
--------- ----------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Commercial and financial $285,316 $250,881 $223,426 $175,182 $157,602
Real estate - construction and development 61,083 59,581 52,214 42,770 31,219
Real estate - mortgage 291,198 296,870 262,362 217,449 221,651
Consumer 61,799 50,236 45,265 57,972 63,491
--------- ----------- --------- ---------- ----------
$699,396 $657,568 $583,267 $493,373 $473,963
========= =========== ========= ========== ==========
</TABLE>
Includes domestic loans only as the Company has no foreign loans. The
Company has no other category of loans whose concentration exceeds 10% of
total loans.
<PAGE>
SELECTED LOAN MATURITIES AND
SENSITIVITY TO INTEREST RATES
DECEMBER 31, 1994
<TABLE>
<CAPTION>
(In Thousands)
Loan Maturities
---------------------------------------------------
After One
Within But Within After
One Year Five Years Five Years Total
---------------------------------------------------
<S> <C> <C> <C> <C>
Commercial and financial $80,499 $83,259 $121,558 $285,316
Real estate - construction and development 27,376 29,348 4,359 61,083
Real estate - mortgage 106,777 51,930 132,491 291,198
Consumer 36,152 13,559 12,088 61,799
------------ ------------ ------------ ------------
$250,804 $178,096 $270,496 $699,396
============ ============ ============ ============
Predetermined rates $31,124 $100,974 $190,853 $322,951
Floating rates 219,680 77,122 79,643 376,445
------------ ------------ ------------ ------------
$250,804 $178,096 $270,496 $699,396
============ ============ ============ ============
</TABLE>
NON-PERFORMING LOANS
Information with respect to the Company's non-performing loans is included
in the section captioned "Non-Performing and Restructured Assets" and
footnote D to the consolidated financial statements included on pages 15,
16 and 35, respectively, of the Company's annual report to shareholders for
the year ended December 31, 1994, which is incorporated herein by
reference.
<PAGE>
SUMMARY OF LOAN LOSS EXPERIENCE
<TABLE>
<CAPTION>
(Dollars In Thousands)
1994 1993 1992 1991 1990
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Balance, beginning of year..................... $6,578 $6,020 $5,523 $5,220 $4,250
Charge-offs:
Commercial and financial..................... 115 48 88 107 711
Real estate - construction and development... 28 639 1,012
Real estate - mortgage....................... 139 262 134 294 1,681
Consumer..................................... 211 266 282 347 381
--------- --------- --------- --------- ---------
Total charge-offs.......................... 493 576 504 1,387 3,785
--------- --------- --------- --------- ---------
Recoveries:
Commercial and financial..................... 10 7 8 159 7
Real estate - construction and development... 462 4
Real estate - mortgage....................... 125 99 197 608 44
Consumer..................................... 113 176 146 194 97
--------- --------- --------- --------- ---------
Total recoveries........................... 248 744 351 965 148
--------- --------- --------- --------- ---------
Net charge-offs (recoveries)................... 245 (168) 153 422 3,637
--------- --------- --------- --------- ---------
Provision for loan losses...................... 712 390 650 725 4,607
--------- --------- --------- --------- ---------
Balance, end of year........................... $7,045 $6,578 $6,020 $5,523 $5,220
========= ========= ========= ========= =========
Average loans, net of unearned income.......... $679,100 $615,070 $534,525 $479,667 $454,590
========= ========= ========= ========= =========
Net charge-offs (recoveries)
to average loans, net of unearned income..... 0.04% (0.03%) 0.03% 0.09% 0.80%
========= ========= ========= ========= =========
</TABLE>
The allowance for loan losses is maintained at a level sufficient to absorb
estimated potential credit losses. Management determines the adequacy of
the allowance based upon reviews of individual credits, evaluation of the
risk characteristics of the loan portfolio, including the impact of current
economic conditions on the borrowers' ability to repay, past collection and
loss experience and such other factors, which, in management's judgment,
deserve current recognition. The allowance for loan losses is increased by
charges to operating earnings and reduced by charge-offs, net of
recoveries.
<PAGE>
ALLOCATION OF ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
(Dollars In Thousands)
1994 1993 1992 1991 1990
-------------------- --------------------- ------------------- --------------------- --------------------
% Of % Of % Of % Of % Of
Allocation Loans In Allocation Loans In Allocation Loans In Allocation Loans In Allocation Loans In
Of Each Of Each Of Each Of Each Of Each
Allowance Category Allowance Category Allowance Category Allowance Category Allowance Category
For Loan To Total For Loan To Total For Loan To Total For Loan To Total For Loan To Total
Losses Loans Losses Loans Losses Loans Losses Loans Losses Loans
---------- --------- ---------- ---------- ---------- -------- ---------- --------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Commercial and
financial........ $3,651 40.79% $3,614 38.15% $2,598 35.70% $2,680 35.51% $1,840 29.70%
Real estate -
construction
and development.. 1,773 8.73% 1,235 9.06% 424 8.32% 450 8.67% 1,435 5.87%
Real estate -
mortgage......... 445 41.64% 378 45.15% 1,515 47.23% 1,085 44.07% 660 50.30%
Consumer.......... 1,176 8.84% 1,351 7.64% 1,483 8.75% 1,308 11.75% 1,285 14.13%
---------- --------- ---------- ---------- ---------- -------- ---------- --------- ---------- --------
$7,045 100.00% $6,578 100.00% $6,020 100.00% $5,523 100.00% $5,220 100.00%
========== ========= ========== ========== ========== ======== ========== ========= ========== ========
</TABLE>
MATURITY SCHEDULE OF TIME DEPOSITS OF $100,000 AND OVER
DECEMBER 31, 1994
<TABLE>
<CAPTION>
(In Thousands)
Certificate Of
Deposits Other Total
----------- -------- --------
<S> <C> <C> <C>
Three months or less....................................................................... $7,668 $4,235 $11,903
Over three through six months.............................................................. 3,117 --- 3,117
Over six through twelve months............................................................. 3,150 --- 3,150
Over twelve months......................................................................... 34,786 --- 34,786
----------- -------- --------
$48,721 $4,235 $52,956
=========== ========== ========
</TABLE>
RETURN ON EQUITY AND ASSETS
Selected ratios for the years 1994, 1993 and 1992 are included on page 2 of
the Company's annual report to shareholders for the year ended December 31,
1994 and are incorporated herein by reference.
<PAGE>
FEDERAL FUNDS PURCHASED AND SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
(Dollars In Thousands)
Federal funds purchased and securities sold under agreements
to repurchase generally represent overnight borrowing
transactions. Included in repurchase agreements are balances
of several institutional customers which are subject to
substantial fluctuations, with reductions occurring in the
normal course of business after year end. The detail of these
short-term borrowings for the years 1994, 1993 and 1992 follows:
<TABLE>
<CAPTION>
1994 1993 1992
------------ ------------ -----------
<S> <C> <C> <C>
Federal funds purchased:
Balance at year end.................................... $5,800 $12,500 $10,975
Average during the year................................ 5,574 7,962 12,771
Maximum amount outstanding at any month end............ 11,325 13,100 17,175
Weighted average rate during the year.................. 3.79% 2.95% 3.50%
Weighted average rate on December 31................... 5.99% 3.02% 3.02%
<CAPTION>
1994 1993 1992
------------ ------------ -----------
<S> <C> <C> <C>
Securities sold under agreements to repurchase:
Balance at year end.................................... $213,101 $183,288 $162,077
Average during the year................................ 149,465 94,772 61,176
Maximum amount outstanding at any month end............ 213,101 183,288 162,077
Weighted average rate during the year.................. 3.97% 2.76% 3.36%
Weighted average rate on December 31................... 5.77% 3.20% 3.07%
</TABLE>
<PAGE>
ITEM 2. PROPERTIES
The Bank maintains a main office, warehouse, operations center and
30 branches in Jefferson County, Kentucky. The Bank owns 18 branch
offices, leases 11 branch offices, its operations center and the
main office, and owns the buildings but leases the land with regard
to 1 branch. The Bank also operates 40 automatic teller machines,
at various locations in its traditional customer base of Jefferson
County, Kentucky. The Savings Bank owns its main office facility
and operates one automatic teller machine in Oldham County,
Kentucky. See footnote F to the consolidated financial statements
on page 36 of the Company's annual report to shareholders for the
year ended December 31, 1994, which is incorporated herein by
reference, for additional information on premises, equipment and
lease commitments.
ITEM 3. LEGAL PROCEEDINGS
The information contained in footnote N to the Company's
consolidated financial statements included on page 41 of the
Company's annual report to shareholders for the year ended December
31, 1994, is incorporated herein by reference.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
EXECUTIVE OFFICERS OF REGISTRANT.
Listed below are the names and ages of the Company's executive
officers, positions held, and the year from which held. The
Company's executive officers are elected annually by the Board of
Directors and each, except Bertram W. Klein, Thomas L. Weber and
Paul E. Henry, is employed pursuant to an employment agreement.
Year From
Name Age Position Held Which Held
Bertram W. Klein 64 Chairman of the Board, 1985
Chief Executive Officer
& member of the Executive
Committee
Orson Oliver 51 President, Director & 1985
member of the Executive
Committee
Thomas L. Weber 62 Executive Vice President 1984
& member of the Executive
Committee
Paul E. Henry 59 Executive Vice President 1989
& member of the Executive
Committee
David N. Klein 39 Executive Vice President 1991
& member of the Executive
Committee
Richard B. Klein 36 Executive Vice President 1991
& member of the Executive
Committee
Gail W. Pohn 59 Executive Vice President 1993
& member of the Executive
Committee
Robert H. Sachs 55 Executive Vice President, 1993
General Counsel, & member
of the Executive Committee
Steven A. Small 41 Executive Vice President, 1993
Chief Financial Officer &
member of the Executive
Committee
David N. Klein joined the Company's subsidiary bank in 1978. He
was elected to his current position in 1991 and from 1987 to 1991
held the office of Senior Vice President - Retail Banking. He is
the son of Bertram W. Klein and the brother of Richard B. Klein.
Richard B. Klein joined the Company's subsidiary bank in 1980. He
was elected to his current position in 1991 and from 1987 to 1991
held the office of Senior Vice President-Consumer Loans and Credit.
He is the son of Bertram W. Klein and the brother of David N.
Klein.
Mr. Pohn joined the Company and the Company's subsidiary bank in
1993. Prior to joining the Company, from 1981 to 1993, he was
Senior Vice President, Chief Counsel and Secretary for National
City Bank, Kentucky (and its predecessor), a non-affiliate of the
Company.
Mr. Sachs joined the Company and the Company's subsidiary bank in
1993. From 1990 to 1993, Mr. Sachs was the President of Legal
Services Management, Inc., a consultant to corporations and law
firms regarding the effective management and delivery of legal
services. From 1989 to 1990 he was Vice President of Law and
Corporate Secretary to BATUS Inc., a $13 billion management and
holding company for the U.S. interests of BAT Industries, plc, a
large publicly held UK conglomerate. Prior to that, Mr. Sachs was
Vice President and General Counsel, Product Litigation, to Brown &
Williamson Tobacco Corporation.
Mr. Small, a CPA, joined the Company and the Company's subsidiary
bank in 1993. Prior to joining the Company, from 1986 to 1993, he
was a partner of KPMG Peat Marwick, Certified Public Accountants,
and worked primarily in serving financial institution clients of
that firm.
All other executive officers have served the Company or the Bank in
executive officer capacities for more than five years.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
SECURITY HOLDER MATTERS
The information captioned "Market for Mid-America Bancorp's Stock
and Related Security Holder Matters" included on page 25 of the
Company's annual report to shareholders for the year ended
December 31, 1994, is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information captioned "Summary of Financial Data" included on
page 23 of the Company's annual report to shareholders for the year
ended December 31, 1994 is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The Management's Discussion and Analysis of Financial Condition and
Results of Operations included on pages 11 through 22 of the
Company's annual report to shareholders for the year ended December
31, 1994 is incorporated herein by reference.
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of the Company and
report of independent auditors included on pages 27 through 44 in
the Company's annual report to shareholders for the year ended
December 31, 1994 are incorporated herein by reference:
Independent Auditors' Report
Consolidated balance sheets - December 31, 1994 and 1993
Consolidated statements of income -
years ended December 31 1994, 1993, and 1992
Consolidated statements of changes in shareholders' equity -
years ended December 31, 1994, 1993 and 1992
Consolidated statements of cash flows -
years ended December 31, 1994, 1993 and 1992
Notes to consolidated financial statements
The information captioned "Quarterly Financial Data" included on
page 24 of the Company's annual report to shareholders for the year
ended December 31, 1994 is incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None
<PAGE>
PART III
Item 10. Directors and Executive Officers of Registrant.
The information appearing under the heading "EXECUTIVE
OFFICERS OF REGISTRANT" appearing in Part I of this Form 10-K and
the information appearing under the headings "ELECTION OF
DIRECTORS" and "COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES
EXCHANGE ACT OF 1934" in the Company's definitive Proxy Statement
filed pursuant to Regulation 14A under the Securities Exchange Act
of 1934 in connection with the Company's 1995 Annual Meeting of
Shareholders are incorporated herein by reference.
Item 11. Executive Compensation.
The information appearing under the heading "EXECUTIVE
COMPENSATION" in the Company's definitive Proxy Statement filed
pursuant to Regulation 14A under the Securities Exhange Act of 1934
in connection with the Company's 1995 Annual Meeting of
Shareholders is incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners and
Management.
The information appearing under the headings "PRINCIPAL
SHAREHOLDERS" and "ELECTION OF DIRECTORS" in the Company's
definitive Proxy Statement filed pursuant to Regulation 14A under
the Securities Exhange Act of 1934 in connection with the Company's
1995 Annual Meeting of Shareholders is incorporated herein by
reference.
Item 13. Certain Relationships and Related Transactions.
The information appearing under the headings "CERTAIN
TRANSACTIONS" and "COMPENSATION COMMITTEE INTERLOCKS AND INSIDER
PARTICIPATION" in the Company's definitive Proxy Statement filed
pursuant to Regulation 14A under the Securities Exchange Act of
1934 in connection with the Company's 1995 Annual Meeting of
Shareholders is incorporated herein by reference.
<PAGE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K
a-l Financial Statements
See Part II, Item 8 for a listing of all financial
statements and report of independent auditors.
a-2 Financial Statement Schedules
All schedules normally required by Form lO-K are
omitted since they are either not applicable or the
required information is shown in the financial
statements or the notes thereto.
a-3 Exhibits
3(a) Amended and Restated Articles of Incorporation
of Mid-America Bancorp filed with the
Secretary of State of Kentucky on May 4, 1989;
as amended by Articles of Amendment filed with
the Secretary of State of Kentucky on April
19, 1993 and March 13, 1995.
(b) By-Laws of Mid-America Bancorp. Exhibit 3 (c)
to Registration Statement No. 2-80835 is
incorporated by reference herein.
(4) Amended and Restated Articles of Incorporation
and By-Laws. See Exhibits 3 (a) and 3 (b).
10. Material Contracts
(a) Mid-America Bancorp Non-Employee Directors
Deferred Compensation Plan.(*)
(b) Employment Agreement between the Company
and Orson Oliver dated, April 5, 1993. Exhibit
10 (a) to the Company's annual report on Form
10-K for the year ended December 31, 1993 is
incorporated by reference herein.(*)
(c) Employment Agreement between the Company and
Wallace A. Fudold dated, April 5, 1993.
Exhibit 10 (b) to the Company's annual report
on Form 10-K for the year ended December 31,
1993 is incorporated by reference herein.(*)
(d) Employment Agreement between the Company
and David N. Klein dated, April 5, 1993.
Exhibit 10 (c) to the Company's annual report
on Form 10-K for the year ended December 31,
1993 is incorporated by reference herein.(*)
(e) Employment Agreement between the Company
and Richard B. Klein dated, April 5, 1993.
Exhibit 10 (d) to the Company's annual report
on Form 10-K for the year ended December 31,
1993 is incorporated by reference herein.(*)
(f) Employment Agreement between the Company
and Robert Sachs dated, April 5, 1993.
Exhibit 10 (e) to the Company's annual report
on Form 10-K for the year ended December 31,
1993 is incorporated by reference herein.(*)
(g) Employment Agreement between the Company
and Gail Pohn dated, April 5, 1993. Exhibit 10
(f) to the Company's annual report on Form 10-K
for the year ended December 31, 1993 is
incorporated by reference herein.(*)
(h) Employment Agreement between the Company
and Steven Small. May 3, 1993. Exhibit 10
(g) to the Company's annual report on Form 10-K
for the year ended December 31, 1993 is
incorporated by reference herein.(*)
(i) Agreement and General Release between the
Company and Stanley L. Atlas dated,
October 26, 1993. Exhibit 10 (h) to the
Company's annual report on Form 10-K for the
year ended December 31, 1993 is incorporated by
reference herein.(*)
(j) Amended and Restated Mid-America Bancorp
Incentive Stock Option Plan is incorporated
herein by reference to Post-Effective
Amendment Number 1 to Form S-8 Registration
Statement No. 2-92270.(*)
(k) Mid-America Bancorp 1991 Incentive Stock
Option Plan. Exhibit 28 to Registration
Statement No. 33-42989 is incorporated by
reference herein.(*)
(l) Mid-America Bancorp Incentive Compensation
Plan. Exhibit 10(d) to the Company's annual
report on Form 10-K for the year ended
December 31, 1990 is incorporated by reference
herein.(*)
* Management contract or compensatory plan or
arrangement required to be filed as an exhibit
pursuant to Item 14(c) of this report.
11. Statement re Computation of per share
earnings.
13. Selected portions of the annual report to
shareholders for the year ended December 31,
1994.
21. Subsidiaries of the Company.
23. Consent of independent auditors.
27. Financial Data Schedule.
99. Additional Exhibits
Form 11-K
b Reports on Form 8-K
None
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Company has duly caused this
report to be signed on its behalf by the undersigned, thereunto
duly authorized.
MID-AMERICA BANCORP
March 20, 1995 BY: /s/ Bertram W. Klein
Bertram W. Klein
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities indicated.
/s/ Bertram W. Klein Chairman of the Board & Mar. 20, 1995
Bertram W. Klein Chief Executive Officer
/s/ Orson Oliver President & Director Mar. 20, 1995
Orson Oliver
/s/ Steven A. Small Executive Vice President Mar. 20, 1995
Steven A. Small & Chief Financial Officer
/s/ Leslie D. Aberson Director Mar. 20, 1995
Leslie D. Aberson
/s/ Robert P. Adelberg Director Mar. 20, 1995
Robert P. Adelberg
Director Mar. 20, 1995
Stanley L. Atlas
/s/ William C. Ballard, Jr. Director Mar. 20, 1995
William C. Ballard, Jr.
/s/ Martha Layne Collins Director Mar. 20, 1995
Martha Layne Collins
/s/ Peggy Ann Marksetin Director Mar. 20, 1995
Peggy Ann Markstein
/s/ Donald G. McClinton Director Mar. 20, 1995
Donald G. McClinton
/s/ John S. Palmore Director Mar. 20, 1995
John S. Palmore
/s/ Woodford R. Porter, Sr. Director Mar. 20, 1995
Woodford R. Porter, Sr.
/s/ Benjamin K. Richmond Director Mar. 20, 1995
Benjamin K. Richmond
/s/ Bruce J. Roth Director Mar. 20, 1995
Bruce J. Roth
/s/ Raymond L. Sales Director Mar. 20, 1995
Raymond L. Sales
/s/ Thomas E. Sandefur, Jr. Director Mar. 20, 1995
Thomas E. Sandefur, Jr.
Director Mar. 20, 1995
Al J. Schneider
/s/ Henry C. Wagner Director Mar. 20, 1995
Henry C. Wagner
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
EXHIBITS
filed with
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
Commission file number 1-10602
________________
MID-AMERICA BANCORP
<PAGE>
INDEX TO EXHIBITS
Page
3(a) Amended and Restated Articles of Incorporation of Mid-
America Bancorp filed with the Secretary of State of
Kentucky on May 4, 1989, as amended by Articles of
Amendment filed with the Secretary of the State of
Kentucky on April 19, 1993 and March 13, 1995. 24
10. Material Contracts
(a) Mid-America Bancorp Non-Employee
Directors Deferred Compensation Plan 38
11. Statement re computation of per share earnings. 44
13. Selected portions of the annual report to shareholders
for the year ended December 31, 1994. 45
21. Subsidiaries of the Company. 93
23. Consent of independent auditors. 94
27. Financial Data Schedule 95
99. Additional Exhibits-Form 11-K 96
<PAGE>
Exhibit 3(a)
ANNEX A
ARTICLES OF RESTATEMENT
OF
ARTICLES OF INCORPORATION
OF
MID-AMERICA BANCORP
Pursuant to KRS 271B.10-070(4), Articles of Restatement of
Articles of Incorporation of Mid-America Bancorp (the "Corpora-
tion") are hereby adopted:
FIRST: The name of the Corporation is Mid-America Bancorp.
SECOND: The Corporation's Restated Articles of Incorporation
are as follows:
ARTICLE I
The name of the Corporation is Mid-America Bancorp.
ARTICLE II
The purpose or purposes for which the Corporation is organized
are, subject to the restrictions imposed upon it by applicable
Federal and State laws and regulations governing bank holding
companies, the following:
1. To engage in any or all lawful business for which
corporations may be incorporated under the Kentucky Business
Corporation Act, and to exercise any and all powers that corpora-
tions may now or hereafter exercise under the Kentucky Business
Corporation Act, whether or not specifically enumerated herein.
2. To act as a bank holding company.
3. To purchase, take, receive, lease or otherwise acquire,
own, hold, improve, use or otherwise deal in and with real and
personal property, or any interest therein, wherever situated.
4. To sell, convey, mortgage, pledge, lease, exchange,
transfer and otherwise dispose of all or any part of its property
and assets.
5. To act as agent, broker or attorney-in-fact for others
for any purpose whatsoever.
6. To purchase, take, receive, subscribe for and otherwise
acquire, own, hold, vote, use, employ, sell, mortgage, lend,
pledge, or otherwise dispose of, use and deal in and with, shares
and other interests in, and promissory notes, bills of exchange,
trade acceptances and other obligations of itself or other
corporations (whether domestic or foreign), associations, partner-
ships or individuals, and direct or indirect obligations of the
United States or of any other government, state, territory,
governmental district or municipality, or a governmental instrumen-
tality.
7. To make contracts and guarantees and incur liabilities,
borrow money at such rates of interest as the Corporation may
determine, issue its notes, bonds and other obligations and secure
them by mortgage or pledge of all or any of its property, franchis-
es and income, and to issue its notes, bonds and other evidences of
indebtedness convertible into common or preferred stock or other
securities of the Corporation.
8. To apply for, obtain, register, purchase, lease or
otherwise acquire, and to hold, use, pledge, lease, sell, assign or
otherwise dispose of, formulas, secret processes, distinctive
marks, improvements, processes, trade names, trademarks, copy-
rights, patents, licenses, concessions and the like, whether used
in connection with or secured under letters or patents, or issued
by any country or authority, or otherwise; and to issue, exercise,
develop and grant licenses in respect thereof or otherwise turn
them to account.
9. To purchase or otherwise acquire, hold, sell, pledge,
transfer or otherwise dispose of, and to re-issue or cancel the
shares of its own capital stock or any securities or other
obligations of the Corporation in the manner and to the full extent
now or hereafter permitted by the laws of the Commonwealth of
Kentucky and applicable federal laws and regulations.
10. To pay pensions and establish pension plans, pension
trusts, profit sharing plans, stock bonus plans, stock option
plans, and other incentive plans for any or all of its directors,
officers and employees.
11. To make donations for the public welfare and for
charitable, scientific or educational purposes and in aid of the
United States government.
12. To lend its funds or credit from time to time to such
extent, to such persons, firms, associations, corporations,
governments or subdivisions thereof, and on such terms and on such
security, if any, or without security, as the Board of Directors of
the Corporation may determine and as may be lawful.
13. To conduct its business, carry on its operations, have
offices and exercise its corporate powers in any state, territory,
district and possession of the United States and in any foreign
country.
14. To be a promoter, partner, limited partner, member,
associate or manger of any partnership, limited partnership, joint
venture, trust or other enterprise, and to do all things necessary
or proper in connection therewith as a natural person might or
could do.
15. To acquire, in whole or in part, the assets, property,
rights and goodwill of any corporation, association, partnership or
individual and to assume and agree to pay the whole or any part of
the liabilities and obligations of the transferor.
16. To such extent as a corporation organized under the
Kentucky Business Corporation Act may now or hereafter lawfully do,
as principal or agent, along or in connection with other corpora-
tions, firms or individuals, to do all and everything necessary,
suitable, convenient or proper for, or in connection with, or
incident to, the accomplishment of any of the purposes, or the
attainment of any one or more of the objects herein enumerated, or
designed directly or indirectly to promote the interests of the
Corporation, or to enhance the value of its properties; and in
general to do any and all things and exercise any and all powers,
rights and privileges which a corporation may now or hereafter be
organized to do, or to exercise under the Kentucky Business
Corporation Act or under any laws amendatory thereof, supplemental
thereto, or substituted therefor; and to do any or all of the
things hereinabove set forth to the same extent as natural persons
might or could do.
The foregoing clauses shall be construed as powers, as well as
objects and purposes, and the matters expressed in each clause
shall, unless herein otherwise expressly provided, be in no wise
limited by reference to or inference from the terms of any other
clause, but shall be regarded as independent purposes and powers,
and the enumeration of specific purposes and powers shall not be
construed to limit or restrict in any manner the general powers of
the Corporation nor the meaning of the general powers of the
Corporation nor the meaning of the general terms used in describing
any such purposes and powers; nor shall the expression of one thing
be deemed to exclude another not expressed, although it be of like
nature.
ARTICLE III
The period of duration of the Corporation shall be perpetual.
ARTICLE IV
The total number of shares of all classes of capital stock
which the Corporation shall have the authority to issue is
10,750,000 shares which shall be divided into two classes as
follows:
10,000,000 shares of Common Stock, having no
par value per share and
750,000 shares of Preferred Stock, having no
par value per share.
The designations, voting powers, preferences and relative,
participating, optional or other special rights, qualifications,
limitations or restrictions of the above classes of stock shall be
as follows:
(a) The Common Stock shall be without distinction as to
powers, preferences and rights and such stock may be issued for
such consideration as shall from time to time be fixed by the Board
of Directors.
(b) Subject to the preferential rights of the Preferred
Stock, the holders of the Common Stock shall be entitled to
receive, to the extent permitted by law, such dividends as may be
declared from time to time by the Board of Directors.
(c) Each holder of Common Stock shall have one vote in
respect of each share of Common Stock held by such shareholder of
record on the books of the Corporation on all matters voted upon by
the stockholders except that at each election for directors, each
holder of Common Stock entitled to vote at such election shall have
the right to cast as many votes in the aggregate as equal the total
number of shares of Common Stock held by such shareholder multi-
plied by the number of directors to be elected at such election;
and each such shareholder may cast the whole number of votes for
one candidate, or distribute such votes among two or more candi-
dates.
(d) The Board of Directors of the Corporation is hereby
expressly authorized to issue shares of Preferred Stock, from time
to time, in such series, and with such designations, preferences
and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions thereof, as shall be
stated and expressed in the resolution or resolutions providing for
the issue of such stock adopted by the Board of Directors, and as
are not stated or expressed in this Certificate of Incorporation or
any amendment thereto including determination of any of the
following:
(1) The rate of dividend;
(2) Whether shares may be redeemed and, if so, the
redemption price and the terms and conditions of redemption;
(3) The amount payable upon shares in event of voluntary
or involuntary liquidation;
(4) Sinking fund provisions, if any, for the redemption
or purchase of shares;
(5) The terms and conditions, if any, on which shares
may be converted;
(6) Voting rights, if any;
(7) The stated value of the shares of each series;
(8) The distinctive serial designation and the number of
shares constituting a series; and
(9) Any other preferences, privileges and powers, and
relative, participating, or other special rights, and qualifi-
cations, limitations or restrictions of such series permitted
by the laws of the Commonwealth of Kentucky, as the Board of
Directors may deem advisable and as shall not be inconsistent
with the provisions of the Certificate of Incorporation.
ARTICLE V
The affairs of the Corporation shall be managed and conducted
by a Board of Directors. The number of directors shall be fixed by
resolutions of the stockholders at their annual meeting or by the
By-Laws, but shall never be less than fifteen.
The Board of Directors of the Corporation may, from time to
time, distribute to its stockholders out of capital surplus of the
Corporation a portion of its assets in cash or property.
The Board of Directors of the Corporation, to the extent not
prohibited by law, shall have the power to cause the Corporation to
repurchase shares of its own Common Stock and Preferred Stock to
the full extent of its unreserved and unrestricted capital surplus,
or any other surplus, available therefor.
ARTICLE VI
Indemnification. Current and former directors and officers of
the Corporation (and their heirs, executors and administrators)
shall be indemnified to the maximum extent permitted or mandated
by, and in accordance with, the Kentucky Business Corporation Act,
as amended from time to time. The indemnification provided by this
Article shall not be exclusive of any other rights to which those
indemnified may be entitled under any bylaw, agreement, vote of
shareholders or disinterested directors or otherwise.
The Corporation may purchase and maintain insurance on behalf
of any person who is or was a director or officer of the Corpora-
tion, or who while a director or officer of the Corporation, is or
was serving at the request of the Corporation as a director,
officer, partner, trustee, employee, or agent of another foreign or
domestic corporation, partnership, joint venture, trust, employee
benefit plan, or other enterprise against any liability asserted
against him and incurred by him in any such capacity or arising out
of his status as such, whether or not the Corporation would have
the power to indemnify him against such liability under the
provisions of this Article.
ARTICLE VII
Consideration of Certain Factors. The Board of Directors may
base its response to any offer of another party to: (a) make a
tender or exchange offer for any equity security of the Corpora-
tion, (b) merge or consolidate the Corporation with another
corporation, or (c) purchase or otherwise acquire all or substan-
tially all of the properties and assets of the Corporation
(collectively, "Acquisition Proposals") upon an evaluation of the
best interest of the Corporation and its shareholders. Relevant
factors to be considered in such evaluation include, without
limitation, the following:
(a) The consideration being offered in the Acquisi-
tion Proposal, not only in relation to the then current
market value of the Corporation's stock, but also in
relation to (i) the Board of Directors' then current
estimate of the current or future value of the Corpora-
tion in a freely negotiated transaction, and (ii) the
Board of Directors' then current estimate of the future
value of the Corporation as an independent entity;
(b) The social, legal and economic effects upon
employees, customers and other constituents of the
Corporation and its subsidiaries;
(c) The social, legal and economic effects on the
communities in which the Corporation and its subsidiaries
operate or are located; and
(d) The competence, experience and integrity of the
acquiring party or parties and its or their management.
ARTICLE VIII
Limitation on Director Liability. A director of the Corpora-
tion shall not be personally liable to the Corporation or its
shareholders for monetary damages for breach of duty as a director
except for liability (i) for any transaction in which the
director's personal financial interest is in conflict with the
financial interests of the Corporation or its shareholders; (ii)
for acts or omissions not in good faith or which involve intention-
al misconduct or are known to the director to be a violation of
law; (iii) under KRS 271B.8-330; and (iv) from any transaction from
which the director derived an improper personal benefit. Any
repeal or modification of this Article by the shareholders of the
Corporation shall not adversely affect any limitation on the
liability of a director of the Corporation with respect to matters
arising before the time of such repeal or modification.
<PAGE>
ARTICLES OF AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
MID-AMERICA BANCORP
Pursuant to the provisions of KRS 271B.10-030 and KRS
271B.10-060, the following Articles of Amendment to the Articles of
Incorporation of MID-AMERICA BANCORP, a Kentucky corporation (the
"Corporation") are hereby adopted:
FIRST: The name of the Corporation is Mid-America Bancorp.
SECOND: Article V of the Corporation's Articles of Incorpo-
ration is deleted in its entirety and the following
is inserted in lieu thereof:
ARTICLE V
Number and Authority of Directors
The Board of Directors shall consist of
not fewer than 10 nor more than 21 individu-
als, with the exact number of individuals
within such range to be determined by resolu-
tion of the Board of Directors from time to
time. Except as otherwise set forth in the
Kentucky Business Corporation Act, the Board
of Directors shall have the authority to
exercise all the corporate powers of the
Corporation and shall manage all of the busi-
ness and affairs of the Corporation."
THIRD: The above designated amendment does not provide for
an exchange, reclassification or cancellation of
issued shares of stock of the Corporation.
FOURTH: The designated amendment was adopted by the Corpor-
ation's Board of Directors on February 15, 1993,
and submitted for approval by the Corporation's
shareholders. The Corporation has 8,205,358 out-
standing shares of common stock, without par value,
each such share entitled to vote on the amendment.
6,687,515 shares of the common stock were indisput-
ably represented at a shareholders' meeting held on
April 13, 1993 duly called in accordance with the
Kentucky Business Corporation Act, with 6,608,991
votes indisputably cast in favor of the designated
amendment, such votes being sufficient for approval
of the amendment.
Dated: April 14, 1993.
MID-AMERICA BANCORP
By: /s/ Orson Oliver
Orson Oliver, President
This instrument was prepared by:
/s/ Carmin Grandinetti
Carmin D. Grandinetti
GREENEBAUM DOLL & MCDONALD
3300 First National Tower
Louisville, Kentucky 40202
(502) 589-4200
<PAGE>
ARTICLES OF AMENDMENT
TO THE
ARTICLES OF INCORPORATION
OF
MID-AMERICA BANCORP
Pursuant to the provisions of KRS 271B.10-030 and KRS
271B.10-060, the undersigned corporation executes these Articles of
Amendment to its Articles of Incorporation:
FIRST: The name of the corporation is MID-AMERICA
BANCORP.
SECOND: The following amendments to the Articles of
Incorporation of the corporation were adopted by the shareholders
of the corporation in the manner prescribed by the Kentucky
Business Corporation Act:
First Amendment. Article V of the Articles of Incorporation
is amended to read in its entirety as follows:
ARTICLE V
Number and Authority of Directors
The Board of Directors shall consist of not
fewer than 10 nor more than 21 individuals, with
the exact number of individuals within such range
to be determined by resolution of the Board of
Directors from time to time. The directors shall
be divided into three classes as nearly equal in
number as may be. At the annual meeting of share-
holders in 1994, one class of five directors shall
be elected for a one-year term, one class of six
directors shall be elected for a two-year term, and
one class of six directors shall be elected for a
three-year term. Commencing with the annual meet-
ing of shareholders in 1995 and at each succeeding
annual meeting, successors to the class of direc-
tors whose terms expire at such meeting shall be
elected for a three-year term. If the number of
directors is changed, any increase or decrease in
directors shall be apportioned among the classes so
as to maintain the number of directors comprising
each class as nearly equal as possible. Any addi-
tional directors of a class shall hold office for a
term which will coincide with the remaining term of
the other directors of the class. Except as other-
wise set forth in the Kentucky Business Corporation
Act, the Board of Directors shall have the authori-
ty to exercise all the corporate powers of the
Corporation and shall manage all of the business
and affairs of the Corporation.
Second Amendment. Article IV of the Articles of Incorporation
is amended to read in its entirety as follows:
ARTICLE IV
The total number of shares of all classes
of capital stock which the Corporation shall
have the authority to issue is 12,750,000
shares which shall be divided into two classes
as follows:
12,000,000 shares of Common Stock, having
no par value per share; and
750,000 shares of Preferred Stock, having
no par value per share.
The designations, voting powers, prefer-
ences and relative, participating, optional or
other special rights, qualifications, limita-
tions or restrictions of the above classes of
stock shall be as follows:
(a) The Common Stock shall be without
distinction as to powers, preferences and
rights and such stock may be issued for such
consideration as shall from time to time be
fixed by the Board of Directors.
(b) Subject to the preferential rights
of the Preferred Stock, the holders of the
Common Stock shall be entitled to receive, to
the extent permitted by law, such dividends as
may be declared from time to time by the Board
of Directors.
(c) Each holder of Common Stock shall
have one vote in respect of each share of
Common Stock held by such shareholder of
record on the books of the Corporation on all
matters voted upon by the stockholders except
that at each election for directors, each
holder of Common Stock entitled to vote at
such election shall have the right to cast as
many votes in the aggregate as equal the total
number of shares of Common Stock held by such
shareholder multiplied by the number of direc-
tors to be elected at such election; and each
such shareholder may cast the whole number of
votes for one candidate, or distribute such
votes among two or more candidates.
(d) The Board of Directors of the Corpo-
ration is hereby expressly authorized to issue
shares of Preferred Stock, from time to time,
in such series, and with such designations,
preferences and relative, participating,
optional or other special rights, and qualifi-
cations, limitations or restrictions thereof,
as shall be stated and expressed in the reso-
lution or resolutions providing for the issue
of such stock adopted by the Board of Direc-
tors, and as are not stated or expressed in
this Certificate of Incorporation or any
amendment thereto including determination of
any of the following:
(1) The rate of dividend;
(2) Whether shares may be redeemed
and, if so, the redemption price and the terms
and conditions of redemption;
(3) The amount payable upon shares
in event of voluntary or involuntary liquida-
tion;
(4) Sinking fund provisions, if
any, for the redemption or purchase of shares;
(5) The terms and conditions, if
any, on which shares may be converted;
(6) Voting rights, if any;
(7) The stated value of the shares
of each series;
(8) The distinctive serial designa-
tion and the number of shares constituting a
series; and
(9) Any other preferences, privi-
leges and powers, and relative, participating,
or other special rights, and qualifications,
limitations or restrictions of such series
permitted by the laws of the Commonwealth of
Kentucky, as the Board of Directors may deem
advisable and as shall not be inconsistent
with the provisions of the Certificate of
Incorporation.
THIRD: Neither of the amendments provides for an
exchange, reclassification or cancellation of issued shares.
FOURTH: The date of the adoption of each of the
amendments was April 21, 1994.
FIFTH: The amendments were approved at a meeting of
shareholders. The designation, number of outstanding shares,
number of votes entitled to be cast by the sole voting group
entitled to vote separately on each of the amendments and number of
votes indisputably represented at the meeting are as follows:
Number of Number of
Votes Enti- Votes Indis-
tled to be putably Rep-
Number of Out- Cast by Sole resented at
Designation standing Shares Voting Group the Meeting
Common Stock 8,518,866 8,518,866 7,416,226
SIXTH: The total number of votes cast for and against
each of the amendments to the Articles of Incorporation by the sole
voting group entitled to vote separately thereon is as follows:
For the amendment to Article V:
Votes Cast For Votes Cast Against
6,073,763 575,060
<PAGE>
For the amendment to Article IV:
Votes Cast For Votes Cast Against
7,192,556 140,142
Dated this 10th day of March, 1995.
MID-AMERICA BANCORP
By /s/ Orson Oliver
Orson Oliver, President
THIS INSTRUMENT PREPARED BY:
/s/ Cynthia W. Young
Cynthia W. Young
WYATT, TARRANT & COMBS
Citizens Plaza
Louisville, Kentucky 40202
(502) 589-5235
<PAGE>
Exhibit 10 (a)
APPENDIX A
MID-AMERICA BANCORP
NON-EMPLOYEE DIRECTORS DEFERRED
COMPENSATION PLAN
ARTICLE 1
Purposes
1.1 Purposes. The purposes of this Non-Employee Directors Deferred
Compensation Plan ("Plan") of Mid-America Bancorp, a Kentucky corporation
("Company"), are to encourage the Company's non-employee directors to
invest in the future of the Company through ownership of an interest in the
Company and to provide flexibility to the Company in attracting and
retaining directors.
ARTICLE 2
Eligibility and Participation
2.1 Eligibility. Any director of the Company who is not an employee of
the Company or a subsidiary of the Company ("Director") is eligible to
participate in the Plan.
2.2 Participation. A Director shall become a participant in the Plan
("Participant") by filing an Election Form in accordance with the
provisions of Section 5.1.a. A Participant shall remain a Participant
until such time as the Participant has received all payments to which the
Participant is entitled under the terms of the Plan.
ARTICLE 3
Shares Subject to Plan
3.1 Number of Shares. Subject to adjustment as provided in Section
3.2, the number of shares of the Company's common stock ("Common Stock"),
reserved for issuance under the Plan is 70,000 shares. Any Common Stock
issued under the Plan may consist, in whole or in part, of authorized and
unissued shares or treasury shares.
3.2 Adjustments. In the event of a merger, reorganization,
consolidation, recapitaliza-tion, reclassification, split-up, spin-off,
separation, liquidation, stock dividend, stock split, reverse stock split,
share combination, share exchange or other change in the corporate
structure of the Company affecting the Common Stock, the Committee (as
hereinafter defined) shall substitute or adjust the total number and class
of stock or securities which may be issued under the Plan and which are
credited to a Participant's Deferred Stock Account as it determines to be
appropriate and equitable to prevent dilution or enlargement of the rights
of Participants.
ARTICLE 4
Administration
4.1 The Committee. The Plan shall be administered by the Planning &
Management Committee of the Board of Directors of the Company ("Board"), or
by any other committee ("Committee") appointed by the Board consisting of
two or more directors of the Company who are "disinterested persons" within
the meaning of Rule 16b-3 (or any successor provision) promulgated under
the Securities Exchange Act of 1934, as amended ("Exchange Act").
4.2 Authority of the Committee. The Committee shall have sole
discretion to make all determinations which may be necessary or advisable
for the administration of the Plan. To the extent permitted by law and
Rule 16b-3 promulgated under the Exchange Act, the Committee may delegate
its authority as identified hereunder. All determinations and decisions
made by the Committee pursuant to the provisions of the Plan, and all
related orders or resolutions of the Board, shall be final, conclusive and
binding upon all persons, including the Company, Participants and their
estates and beneficiaries.
4.3 Section 16 Compliance. It is the intention of the Company that the
Plan and the administration of the Plan comply in all respects with Section
16(b) of the Exchange Act and the rules and regulations promulgated
thereunder. If any Plan provision, or any aspect of the administration of
the Plan, is found not to be in compliance with Section 16(b) of the
Exchange Act, the provision or administration shall be deemed null and
void, and in all events the Plan shall be construed in favor of its meeting
the requirements of Rule 16b-3 promulgated under the Exchange Act.
ARTICLE 5
Deferral Election
5.1 Making of Election.
a. Each Director may elect in writing, in the manner and on
the form ("Election Form") prescribed by the Committee, to defer payment of
all, but not less than all, of the fees which would otherwise be paid to
such Director by the Company for services on the Board and committees
thereof. An election shall be effective with respect to amounts which
would otherwise be paid to the Participant beginning on or after the first
day of the calendar quarter following the making of the election; provided,
however, that in the case of those persons who are Directors on the date
hereof, the initial election shall become effective as of July 1, 1994.
Once an election has been made, it shall remain in effect with respect to
all future amounts which would otherwise be paid to the Participant as a
Director until changed by the filing of a new election in the manner
provided in Section 5.1.b.
b. In the case of those persons who are Directors on the date
hereof, the initial election, if any, to participate in the Plan shall be
made by April 30, 1994. In the case of Directors elected or reelected at
an annual meeting of the Company, an election or change in an existing
election may only be made within 30 days following the annual meeting. In
the case of a Director elected at other than an annual meeting, the initial
election to participate in the Plan may only be made within 30 days
following the Director's election to the Board. At the time of making any
such election or change in an existing election, the Participant shall
further elect, in accordance with procedures adopted by the Committee, (i)
to have either 100% or 50% of the amount of such deferred fees be deemed
invested in Common Stock ("Share Election"), or (ii) to have either 100% or
50% of such deferred fees deemed invested with interest ("Cash Election");
provided, however, that in no event shall a Share Election be effective
until six months after the date of the Share Election, with the result that
during such six-month period, the Participant shall be deemed to have made
a Cash Election.
5.2 Participant Account. A Participant Account shall be established
for each Participant. Deferred compensation will be credited to the
Participant's Participant Account as of the date such compensation would
otherwise be payable to the Participant. A Participant Account shall
include a Deferred Cash Account, if a Cash Election has been made, and/or a
Deferred Stock Account, if a Share Election has been made.
5.3 Deferred Cash Account. Each Deferred Cash Account shall be
credited with the amounts deferred on behalf of a Participant plus annual
interest thereon as provided in Section 7.1.
5.4 Deferred Stock Account. Each Deferred Stock Account shall be
credited with 110% of the amounts deferred to the Deferred Stock Account on
behalf of a Participant. Deferred Stock Accounts shall also be credited as
of the payment date for dividends on Common Stock in an amount equal to the
dividends attributable to the number of shares of Common Stock credited to
the Participant's Deferred Stock Account as of the record date set by the
Board for the payment of dividends (the amounts referred to in the first
two sentences of this Section 5.4 are hereinafter referred to as the "Cash
Credits"). As of the last day of March, June, September and December of
each year, there shall be credited to a Participant's Deferred Stock
Account a number of shares of Common Stock equal to that whole number
obtained by dividing (i) the amount of Cash Credits in the Deferred Stock
Account as of such date, by (ii) the fair market value of the Common Stock
(determined as provided in Section 6.1) on such date. Any amount of the
Deferred Stock Account in excess of the number of shares of Common Stock
credited to the Deferred Stock Account shall be treated as a Cash Credit
and held in the Deferred Stock Account until the end of the following
quarterly crediting date.
ARTICLE 6
Fair Market Value
6.1 Fair Market Value. For purposes of this Plan, the fair market
value of the Common Stock on any date shall be (i) if the Common Stock is
listed on a national or regional exchange, or on the NASDAQ National Market
System or a comparable market, the closing price of the Common Stock on
such date, or (ii) if (i) above does not apply, the value determined by the
Committee.
ARTICLE 7
Interest
7.1 Interest on Deferred Cash Account. Interest will be credited to
each Deferred Cash Account at the announced prime rate of Bank of
Louisville as the same shall exist from time to time, changing with each
change in such announced prime rate. This assumed interest shall be
compounded annually and treated as earned from the date deferred
compensation is credited to the Deferred Cash Account to the date of
withdrawal.
ARTICLE 8
Payment of Deferred Amounts
8.1 Limitation on Payment of Deferred Amounts. No payment may be made
from any Participant Account except as provided in this Article 8.
8.2 Time for Payment of Deferred Amounts.
a. Payment of the amount in a Participant Account shall be
made upon the earlier to occur of (i) 60 days following the date the
Participant ceases to be a Director, (ii) the date selected by the
Participant at the time of making a Cash Election or Share Election (which
date may be different for the Cash Election and the Stock Election) or
(iii) 60 days following a Change in Control (as defined in Section 8.2.b).
Payment shall be made in the form of a lump sum, with payment from a
Deferred Cash Account made in cash, and payment from a Deferred Stock
Account made in Common Stock (except for any Cash Credits remaining in the
Participant's Deferred Stock Account, which shall be paid in cash).
b. For purposes of the Plan, a Change in Control shall occur upon
(I)the acquisition by any person after the date hereof of beneficial ownership
of 50% or more of the voting power of the Company's outstanding voting
stock, (ii) five or more of the current members of the Board ceasing to be
members of the Board unless any replacement director was elected by a vote
of either at least 75% of the remaining directors, or of at least 75% of
the shares entitled to vote on such replacement, or (iii) approval by the
stockholders of the Company of (a) a merger or consolidation of the Company
with another corporation if the stockholders of the Company immediately
before such vote will not, as a result of such merger or consolidation, own
more than 50% of the voting stock of the corporation resulting from such
merger or consolidation, or (b) a complete liquidation of the Company or
sale of all, or substantially all, of the assets of the Company.
Notwithstanding the foregoing, a Change in Control shall not occur solely
because 50% or more of the voting stock of the Company is acquired by (i) a
trust which is part of an employee benefit plan maintained by the Company
or its subsidiaries, or (ii) a corporation which, immediately following
such acquisition, is owned directly or indirectly by the stockholders of
the Company in the same proportion as their ownership of stock in the
Company immediately prior to such acquisition.
ARTICLE 9
Miscellaneous
9.1 Assignability. No right to receive payments hereunder shall be
transferable or assignable by a Participant except by will or by the laws
of descent and distribution.
9.2 Amendment or Termination. The Plan may be amended, modified or
terminated by the Board at any time or from time to time. Notwithstanding
the foregoing, without the approval of stockholders of the Company (as may
be required by Section 16 of the Exchange Act and the rules promulgated
thereunder, any national securities exchange or system on which the Common
Stock is then listed or reported or a regulatory body having jurisdiction
with respect hereto), no such amendment, modification or termination may
(i) materially increase the benefits accruing to Participants under the
Plan, (ii) materially increase the total number of shares of Common Stock
which may be issued under the Plan, except as provided in Section 3.2 or
(iii) materially modify the eligibility requirements for participation in
the Plan. No amendment, modification or termination shall, without the
consent of a Participant, adversely affect such Participant's existing
rights under the Plan.
9.3 Future Director Terms. Nothing in the Plan, nor any action taken
under the Plan, shall be construed as giving any Participant a right to
continue as a Director or require the Company to nominate or cause the
nomination of a Participant for a future term as a Director.
9.4 Participant's Rights Unsecured. The right of any Participant to
receive payment of deferred amounts under the provisions of the Plan shall
be an unsecured claim against the general assets of the Company. The
maintenance of individual Participant Accounts is for bookkeeping purposes
only. The Company is not obligated to acquire or set aside any particular
assets for the discharge of its obligations, nor shall any Participant have
any property rights in any particular assets held by the Company, whether
or not held for the purpose of funding the Company's obligations
hereunder.
9.5 Governing Law. To the extent not preempted by Federal law, this
Plan shall be governed by, and construed in accordance with, the laws of
the Commonwealth of Kentucky without regard to its conflict of laws rules.
IN WITNESS WHEREOF, the Company has caused the Plan to be executed by
the Board this 21st day of February, 1994.
MID-AMERICA BANCORP
By: /s/ Bertram W. Klein
Bertram W. Klein, Chairman of the
Board
<PAGE>
Exhibit 11
Statements re computation of per share earnin ----------
<TABLE>
<CAPTION>
(In Thousands Except for Per Share Data)
Year ended December 31
-----------------------------------
1994 1993 1992
--------- --------- -----------
<S> <C> <C> <C>
Weighted average common stock outstanding............ 8,794 8,716 8,678
Common equivalent shares for stock option plan using
the treasury stock method........................ 107 98
--------- --------- -----------
Weighted average shares outstanding.................. 8,901 8,814 8,678
========= ========= ===========
Net income........................................... $12,612 $11,573 $9,521
========= ========= ===========
Net income per share................................. $1.42 $1.31 $1.10
========= ========= ===========
</TABLE>
All share and per share information has been adjusted for the 3% stock
dividend issued in December 1994.
<PAGE>
Comparative Summary
<TABLE>
<CAPTION>
Dollars In Thousands, Except Per Share Amounts 1994 1993 1992
-----------------------------------------------
<S> <C> <C> <C>
AT YEAR END
Total assets $1,213,990 $1,169,023 $1,041,649
Total deposits 732,620 729,449 689,377
Loans, net of unearned income 699,396 657,568 583,267
Total shareholders' equity 125,052 119,590 112,629
FOR THE YEAR
Net income $12,612 $11,573 $9,521
Cash dividends declared $5,559 $ 5,356 $4,554
Weighted average shares outstanding 8,901 8,814 8,678
PER SHARE DATA
Book value $14.20 $13.64 $12.95
Market value 17.00 17.25 15.13
Cash dividends declared 0.65 0.65 0.60
Net income 1.42 1.31 1.10
SELECTED RATIOS
Return on average total assets 1.11% 1.11% 1.01%
Return on average shareholders' equity 10.36 10.00 8.77
Cash dividend payout ratio 44.44 46.75 48.85
Average shareholders' equity to average total assets 10.71 11.09 11.48
Allowance for loan losses to loans, net of unearned income 1.01 1.00 1.03
</TABLE>
<PAGE>
MANAGEMENT'S DISCUSSION and ANALYSIS
OF
FINANCIAL CONDITION and RESULTS OF OPERATIONS
This discussion analyzes the results of operations and
financial condition for Mid-America Bancorp and subsidiaries (the
Company), including its primary subsidiary, Mid-America Bank of
Louisville and Trust Company (the Bank). It should be read in
conjunction with the consolidated financial statements and related
notes presented on pages 28-44.
1994 COMPARED TO 1993
Net income for 1994 was $12,612,000 or $1.42 per share
compared with $11,573,000 or $1.31 per share for 1993. This
increase was primarily due to an increase in net interest income.
For 1994, return on average total assets (ROA) was 1.11% and return
on average equity (ROE) was 10.36%, compared with 1993 when the ROA
was 1.11% and ROE was 10.00%. The discussion that follows explains
in more detail the factors affecting 1994 operating results and
changes in financial condition.
NET INTEREST INCOME
Net interest income is the difference between interest income
on earning assets and the interest expense incurred for funding
sources used to support earning assets. Earning assets include
primarily loans and securities. The primary sources used to fund
these assets include deposits, purchased and borrowed funds, and
capital. The net interest spread is the difference between the
average rate of interest earned on earning assets on a tax
equivalent basis and the average rate of interest expensed on
interest bearing liabilities. The net yield on earning assets is
net interest income on a tax equivalent basis as a percent of the
average balance of earning assets. Detailed information on the
average balances of earning assets and funding sources, interest
rates, and the net yield on earning assets is shown in the table on
page 21.
In 1994, net interest income on a tax equivalent basis
increased $4,629,000 to $46,055,000. Net interest income was
favorably impacted by increases in average earning assets and
rising interest rates. The average yield on earning assets
increased from 7.45% in 1993 to 7.60% in 1994, with a similar
increase in the average rate on interest bearing liabilities from
3.82% in 1993 to 3.94% in 1994. The shift to higher interest
rates, interacting with the timing of repricing and shift in
composition of earning assets and interest bearing liabilities
during the year, resulted in a net interest spread of 3.66% in 1994
compared to 3.63% in 1993. The net yield on earning assets also
increased in 1994 to 4.34% compared to 4.27% in 1993. The average
prime rate in 1994 was 7.14% compared to 6.00% in 1993.
Average earning assets increased approximately $90 million or
9.3% in 1994 to $1,059,202,000. The increase was centered in
loans, which increased approximately $64 million or 10.4% to
$679,100,000, and in the securities portfolio, which increased
approximately $55 million. These increases were partially offset
by a $29 million decrease in short-term lower yielding assets
(federal funds sold and securities purchased under agreements to
resell). Changes in the composition and amounts of earning assets
arose in part from management's response to the increasing interest
rate environment in 1994, where such changes were necessary to
maintain a proper match among assets and liabilities, while
increasing the yield on investable funds.
The growth in average earning assets was achieved despite a
minor increase in average deposits. Average advances from the
Federal Home Loan Bank increased $24 million. Securities sold
under agreements to repurchase, a short-term higher yielding
collateralized instrument used by customers with large amounts of
investable funds, increased $52 million. Non-interest bearing
liabilities, which include outstanding money orders and similar
payment instruments, continued to increase in 1994 and provide
support for earning asset growth. Non-interest bearing deposits
and capital were 20.5% of earning assets in 1994 compared to 21.1%
in 1993.
The changes in interest income attributable to volume and rate
changes are summarized in the table on page 22.
PROVISION FOR LOAN LOSSES
The provision for loan losses was $712,000 in 1994 compared to
$390,000 for 1993. During 1994, the Company had net charge-offs of
$245,000, compared to net recoveries of $168,000 in 1993, a decline
in the level of non-performing loans, and no appreciable increase
in the risk characteristics of its loan portfolio. These and other
factors were considered in determining the provision for loan
losses in 1994.
The allowance for loan losses is maintained at a level
sufficient to absorb estimated potential credit losses in the loan
portfolio, considering non-performing loans and overall economic
conditions. In evaluating the allowance for loan losses,
management considers its evaluation of the risk characteristics of
the loan portfolio, including the impact of current economic
conditions on the borrowers' ability to repay, past collection
experience and such other factors which, in management's judgement,
deserve current recognition. At December 31, 1994, the allowance
for loan losses was 1.01% of loans outstanding compared to 1.00% at
the end of 1993. The following is a summary of the Company's loan
loss experience for each of the last three years.
<TABLE>
<CAPTION>
Dollars In Thousands 1994 1993 1992
-----------------------------------------
<S> <C> <C> <C>
Balance, January 1 $6,578 $6,020 $5,523
Provision for loan losses 712 390 650
Net loan recoveries (charge-offs) (245) 168 (153)
-----------------------------------------
Balance, December 31 $7,045 $6,578 $6,020
=========================================
Average loans $679,100 $615,070 $534,525
Loans at year-end 699,396 657,568 583,267
Non-performing and restructured loans at year-end 3,511 3,872 5,829
Provision for loan losses to average loans 0.10% 0.06% 0.12%
Net charge-offs (recoveries) to average loans 0.04 (0.03) 0.03
Allowance for loan losses to average loans 1.04 1.07 1.13
Allowance for loan losses to year-end loans 1.01 1.00 1.03
</TABLE>
NON-INTEREST INCOME
Non-interest income increased $657,000 or 6% in 1994 compared
to 1993. Non-interest income includes the Company's fee related
revenues, which are the primary source of sustainable non-interest
income. Also included are securities and trading account gains and
losses which are not recurring in nature.
Trust Department income was relatively flat in 1994 compared
to 1993, despite increased fees for special services in the stock
transfer area during 1993. The current year was favorably impacted
by the fee revenues associated with a 4% increase in trust assets
under management. Service charges on deposit accounts decreased
3.3% in 1994 compared to 1993. This decline, related primarily to
checking account service charges, results from new and more
competitively priced retail deposit products which have attracted
new depositors as well as conversions of existing accounts from
higher priced deposit products. Money order fees increased from
$2,553,000 in 1993 to $3,333,000 in 1994, an increase of 30.6%.
This increase was due to the increased sales volume of the money
order subsidiary. The money order subsidiary operates in all 50
states, through a network of approximately 2,800 agents. There has
been a continuing increase in the monthly volume of money order
sales throughout 1994. Securities and trading account activity
resulted in a net loss of $4,000 in 1994 compared to a net loss of
$101,000 in 1993. There were no significant fluctuations between
1994 and 1993 in the several components of other non-interest
income.
OTHER OPERATING EXPENSES
Other operating expenses increased $3,316,000 or 9.7% to
$37,592,000 from $34,276,000 in 1993. This increase is primarily
associated with increases in personnel costs, expenses related to
technology improvements and maintenance, and expenses related to
facilities remodeling and expansion.
Salaries and benefits increased $2,112,000 or 11.5% to
$20,538,000. The increase in salaries and benefits is attributed
to several factors, including annual salary adjustments which
averaged approximately 7.5%, a full year's cost for the management
and staffing additions and upgrades that occurred throughout the
later half of 1993, and an increase in average full-time employees
from 626 to 639. The increase in the employee base was related to
support of operations, technology enhancements, credit analysis,
customer service and business development activities.
Occupancy, and furniture and equipment expenses both increased
in 1994 compared to 1993. Occupancy expense, up 8.7% in 1994, was
impacted primarily by increased rent expense related to additional
space at the main office facility, and additional depreciation
related to the subsidiary Savings Bank's facility, opened in
December 1993, and improvements at several branches. Furniture and
equipment expenses increased 6.9% in 1994 compared to 1993. The
increased furniture and equipment expenses reflect increased
depreciation for technology equipment additions/upgrades in 1993
and 1994 and depreciation on additional money order equipment.
Equipment maintenance expenses were similarly impacted by new
technology equipment and additional money order equipment.
The other expenses category of other operating expenses
includes operating supplies, professional fees, taxes other than
income taxes, deposit insurance and other expenses. Generally, the
expanded level of activity throughout the Bank and at the money
order subsidiary has caused the 7.6% increase in these expenses in
1994 compared to 1993. There were no significant unusual items in
these expense categories in 1994.
INCOME TAXES
The effective tax rates were 31.3%, 31.2%, and 30.2% for 1994,
1993, and 1992, respectively. The difference between the statutory
and the effective tax rates was principally attributable to the
tax-exempt status of interest income on obligations of states and
political subdivisions and certain loans.
The Company adopted FASB Statement No. 109, "Accounting for
Income Taxes", prospectively in the first quarter of 1993. The
implementation of this new accounting standard was not significant
to financial condition or results of operations.
BALANCE SHEET
Total assets were $1,213,990,000 at December 31, 1994,
compared with $1,169,023,000 one year ago. Total assets averaged
$1,136,565,000 during 1994, an increase of approximately $93
million, or 8.9%. Average earning assets increased approximately
$90 million or 9.3% to $1,059,202,000 in 1994. Increased loan
volume accounted for a substantial portion of the increase in
earning assets.
SECURITIES
The Company's securities portfolio includes obligations of the
U.S. Government and its agencies, obligations of various states and
political subdivisions, corporate debt securities and other
securities which are comprised primarily of Federal Reserve Bank
and Federal Home Loan Bank stock. At December 31, 1994,
securities held to maturity totalled $214,313,000, and securities
classified as available for sale totalled $131,482,000.
FASB Statement No. 115, "Accounting for Certain Investments in
Debt and Equity Securities", was adopted by the Company on January
1, 1994. The principal effect of adoption of FASB Statement No.
115 was that debt securities classified as available for sale are
reported at fair value, with unrealized losses of $3,174,000
excluded from earnings and reported as a separate component of
shareholders' equity, on a net of tax basis. Securities held to
maturity continue to be reported at amortized cost and had net
unrealized losses of $4,939,000 on December 31, 1994. See Note C
of the consolidated financial statements for gross unrealized gain
and loss information.
The securities portfolio is utilized for pledging requirements
on certain borrowings and public and fiduciary deposits, and
provides liquidity from scheduled maturities.
The Company's securities portfolio is considered to be high
grade. U.S. Treasury and agency obligations were 85.7% of the
securities portfolio at December 31, 1994. Direct obligations of
the U.S. Government are full faith and credit obligations of the
federal government. Issues of federal agencies are also directly
guaranteed or sponsored by the United States. Risk associated with
obligations of states and political subdivisions and corporate
securities in the portfolio is minimized through the purchase of
high quality securities and the avoidance of concentrations with
any single issuer. At December 31, 1994, the largest percentage of
tax exempt securities held were issued by Kentucky municipalities.
Rated state and political obligations are rated "A-" or better and
corporate investments have a "BBB+" rating or better. The Company
has no derivative financial instruments as defined in FASB
Statement No. 119, "Disclosure About Derivative Financial
Instruments and Fair Value of Financial Instruments".
LOANS
Total loans and leases, net of unearned income, were
$699,396,000 at December 31, 1994, an increase of approximately $42
million or 6.4% compared to December 31, 1993. Average loans
increased approximately $64 million or 10.4%, to $679,100,000 in
1994 from $615,070,000 in 1993.
The loan portfolio continues to be concentrated in residential
real estate mortgage loans. Total loans in this category were
$291,198,000 at December 31, 1994, down approximately 2% from a
year ago. The Company has been a market leader in home equity
financing which contributes to this concentration in the loan
portfolio. Real estate mortgages are principally in the
metropolitan Louisville, Kentucky area. Unlike other regions of
the United States, this market has not experienced high inflation
in real estate prices.
Commercial and financial loans increased $34 million to
$285,316,000, as the Company continued to emphasize lending to
businesses in the community.
During 1994, construction and development loans increased 2.5%
to $61,083,000. These loans are principally for the development of
residential housing tracts, office buildings and shopping centers.
The Company has no foreign loans and continues to lend
principally within its metropolitan area.
NON-PERFORMING and RESTRUCTURED ASSETS
Non-performing assets include non-accrual and restructured
loans, loans 90 days or more past due and other real estate held
for sale. On December 31, 1994, non-performing assets totaled
$5,896,000 compared with $6,842,000 at December 31, 1993.
Information with respect to non-performing loans and assets is
presented in the table below:
<TABLE>
<CAPTION>
Dollars In Thousands December 31
----------------------------------------------------
1994 1993 1992 1991 1990
-------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Loans accounted for on a non-accrual basis $2,705 $2,695 $4,453 $2,006 $5,096
Loans restructured as to principal or interest --- --- --- 1,931 ---
Loans contractually past due ninety days or more
as to interest or principal payments 806 1,177 1,376 1,119 1,445
------ ------ ------ ------ ------
Total non-performing and restructured loans 3,511 3,872 5,829 5,056 6,541
Other real estate held for sale 2,385 2,970 3,561 3,292 2,780
------ ------ ------ ------ ------
Total non-performing and restructured assets $5,896 $6,842 $9,390 $8,348 $9,321
====== ====== ====== ====== ======
Non-performing and restructured loans to total loans 0.50% 0.59% 1.00% 1.02% 1.38%
Non-performing and restructured assets to total assets 0.49 0.59 0.90 0.85 0.95
Allowance for loan losses to non-performing and
restructured loans 200.66 169.89 103.28 109.24 79.80
</TABLE>
The accrual of interest on loans is discontinued when it is
determined that the collection of interest or principal is
doubtful, or generally when a default of interest or principal has
existed for 90 days or more, unless the loan is fully secured and
in the process of collection. At December 31, 1994, there were
loans for which payments were current or less than 90 days past due
where borrowers are currently experiencing financial difficulties.
These potential problem loans, amounting to approximately $12
million, are subject to management review and are considered in
determining the adequacy of the allowance for loan losses.
In 1994 the level of non-performing and restructured loans
declined to approximately $3.5 million and at the end of 1994 these
loans were .50% of total loans. Management has carefully evaluated
its risk, including consideration of underlying collateral values
based on current market conditions, with respect to non-accrual
loans, loans past due 90 days or more, and potential problem loans.
Other real estate held for sale decreased $585,000 to $2.4
million at December 31, 1994. During 1994 other real estate
acquired in settlement of loans aggregated $648,000 and sales of
other real estate aggregated $1,289,000 .
The Financial Accounting Standards Board has issued FASB
Statement No. 114, "Accounting by Creditors for Impairment of a
Loan", as amended by FASB Statement No. 118, "Accounting by
Creditors for Impairment of a Loan-Income Recognition and
Disclosures", which is effective for the Company beginning in 1995.
FASB Statement No. 114 requires that the value of impaired loans be
measured at the present value of expected future cash flows
discounted at the loan's effective interest rate, or at the loan's
observable market price or the fair value of the collateral if the
loan is collateral dependent. Management does not expect the
adoption of this accounting standard to have a significant impact
on the Company's financial condition or results of operations.
<PAGE>
DEPOSITS
Total deposits increased approximately $3 million to
$732,620,000 on December 31, 1994, compared to $729,449,000 at
December 31, 1993. Deposits were relatively stable in the
aggregate on an average basis during the year, increasing
approximately $2 million compared to 1993, to $735,148,000.
Average interest bearing deposits for the year decreased slightly
from $644,467,000 to $639,573,000. Average non-interest bearing
deposits increased 7.6% to $95,575,000. Large certificates of
deposit increased approximately $22 million to $48,721,000 at
December 31, 1994, from $26,456,000 at December 31, 1993. On an
average basis there was an increase for 1994 compared to 1993 in
large certificates of deposit of approximately $8.0 million, to
$31,272,000. A portion of the increase relates to retail brokered
certificates of deposit of approximately $10 million issued in June
1994. The year-end balance of large certificates of deposit in
1994 includes $8.5 million of three year certificates of deposit
issued in late December 1994.
ADVANCES FROM THE FEDERAL HOME LOAN BANK
Federal Home Loan Bank advances increased slightly during 1994
from $80,106,000 to $81,504,000. The Company uses this source of
fixed rate funds to match its fixed rate mortgage and commercial
loan products.
MONEY ORDERS AND SIMILAR PAYMENT INSTRUMENTS OUTSTANDING
Money orders and similar payment instruments outstanding at
December 31, 1994 increased approximately $12 million compared to
1993. The money order subsidiary's expanded agent base and wider
acceptance of its gift certificate program contributed to the
increase in this stable source of non-interest bearing funds. On
an average basis, these items increased $9.5 million in 1994
compared to 1993.
INTEREST SENSITIVITY MANAGEMENT
Interest rate risk at any time interval may be measured in
absolute dollars by examining the gap position, or difference
between interest-sensitive assets and interest-sensitive
liabilities. A positive gap, which arises when interest-sensitive
assets exceed interest-sensitive liabilities in designated time
frames, will result in a greater proportion of assets than
liabilities repricing with changes in market interest rates. A
positive gap is normally advantageous when market rates are rising.
A negative gap is the converse, where interest-sensitive
liabilities exceed interest-sensitive assets, and is normally
advantageous when market interest rates are declining. Asset/
liability management strategies attempt to control exposure to
these interest rate risks.
The interest sensitivity of the Company's earning assets and
interest bearing liabilities is shown on the table on page 20. The
distribution in the Interest Rate Sensitivity Analysis is based on
a combination of maturities and repricing frequencies. Variable
rate assets and liabilities are distributed based on the repricing
frequency of the instrument. In measuring the Company's interest
sensitivity, management adjusts the timing of non-contractual
deposit repricing to more accurately reflect historical and
anticipated pricing behavior. In order to provide a more realistic
one-year gap position on the Interest Rate Sensitivity Analysis, 40
percent of interest bearing demand and savings deposits are
distributed in the 0 to 90 Days category with the remainder in the
over 5 Years category. The adjusted cumulative positive gap
position in the less than one year category of 15.92% indicates the
Company is well positioned for a rising rate environment. Absent
this adjustment to the repricing behavior of certain deposit types,
the one year cumulative positive gap would be .95%.
Gap alone does not accurately measure the magnitude of changes
in net interest income, since changes in interest rates do not
occur simultaneously or equally to all assets or liabilities in a
category. Management supplements traditional gap analyses with
computer simulation modeling to estimate the financial impact of
rate changes.
SHAREHOLDERS' EQUITY
Shareholders' equity increased $5,462,000 to $125,052,000 at
December 31, 1994. Average shareholders' equity increased
$5,989,000 to $121,705,000 and was 10.71% of average total assets
for 1994, which compares favorably to the Company's peer group.
The Company's primary source of capital is net income, net of
dividends paid.
Regulators monitor capital adequacy under risk based capital
guidelines which place assets and certain off-balance-sheet
activities in various categories of risk with varying weights.
Also, a minimum leverage ratio, based on shareholders' equity as a
percentage of total assets, is required. As of December 31, 1994
and 1993, the Company's capital ratios and the required minimums
are as follows:
<TABLE>
<CAPTION>
December 31 Minimum
1994 1993 Requirement
-----------------------------------
<S> <C> <C> <C>
Total risk-based capital ratio 18.75% 19.41% 8.00%
Tier I risk-based capital ratio 17.76% 18.40% 4.00%
Leverage ratio 10.45% 10.20% 3.00%
</TABLE>
LIQUIDITY MANAGEMENT
Liquidity management represents the Company's ability to
generate cash or otherwise obtain funds at a reasonable price to
satisfy commitments to borrowers as well as the demands of
depositors. Funds are available from a number of sources,
including the securities portfolio, the core deposit base and the
ability to attract large deposits and repurchase agreements. The
Company's temporary investments, which include federal funds sold,
securities purchased under agreements to resell and securities
maturing within one year, are approximately 20% of total assets.
Temporary investments are 93% of volatile liabilities, which
consist of federal funds purchased, securities sold under
agreements to repurchase and large certificates of deposit. The
Company's volatile liability dependence ratio, a measure of
volatile liabilities, net of temporary investments, supporting
loans and the securities portfolio has averaged less than 2% during
1994. In the opinion of management, incremental funding sources
are sufficient to meet known or reasonably anticipated funding
requirements.
The liquidity of the holding company is impacted primarily by
the ability of its principal subsidiary, the Bank, to pay
dividends. During 1994, the Bank paid $5.8 million in dividends to
the parent holding company. Certain regulatory restrictions limit
the amount of dividends the Bank may pay. Additional information
about these restrictions is in Note L to the consolidated financial
statements.
1993 COMPARED TO 1992
Net income for 1993 was $11,573,000 or $1.31 per share
compared to $9,521,000 or $1.10 per share for 1992. This increase
was primarily due to an increase in net interest income, and an
increase in certain sources of non-interest income. For 1993,
return on average total assets (ROA) was 1.11% and return on
average equity (ROE) was 10.00%, compared to 1992 when the ROA was
1.01% and ROE was 8.77%.
NET INTEREST INCOME
In 1993, net interest income on a tax equivalent basis
increased $5,118,000 to $41,426,000. Net interest income was
favorably impacted by increases in average earning assets and the
net interest spread. The average yield on earning assets declined
from 8.18% in 1992 to 7.45% in 1993, with an offsetting decline in
the average rate on interest bearing liabilities from 4.79% in 1992
to 3.82% in 1993 as market interest rates declined during the year.
The net interest spread was 3.63% in 1993 compared to 3.39% in
1992. The net yield on earning assets also increased in 1993 to
4.27% compared to 4.15% in 1992. The average prime rate in 1993
was 6.00% compared to 6.25% in 1992.
Average earning assets increased approximately $94 million or
10.8% in 1993 to $969,102,000. The increase was centered in loans,
which increased approximately $81 million or 15.1% to $615,070,000,
and in the securities portfolio, which increased approximately $56
million. These increases were partially offset by a $42 million
decrease in short-term lower yielding assets.
The growth in average earning assets was achieved despite a
minor increase in average deposits. Advances from the Federal Home
Loan Bank increased $43 million as management matched a portion of
the increased fixed rate loan volume with these advances.
Securities sold under agreements to repurchase increased $29
million. Non-interest bearing liabilities, which include
outstanding money orders, continued to increase in 1993 and provide
support for earning asset growth. Non-interest bearing deposits
and capital were 21.1% of earning assets in 1993 compared to 21.3%
in 1992.
The changes in interest income attributable to volume and rate
changes are summarized in the table on page 22.
PROVISION FOR LOAN LOSSES
The provision for loan losses was $390,000 in 1993 compared to
$650,000 for 1992. During 1993, the Company had net recoveries of
$168,000, a decline in the level of non-performing loans, and no
appreciable increase in the risk characteristics of its loan
portfolio. These and other factors were considered in determining
the lower provision for loan losses in 1993.
At December 31, 1993, the allowance for loan losses was 1.00%
of loans outstanding compared to 1.03% at the end of 1992.
NON-INTEREST INCOME
During 1993, all major sources of fee related income increased
over 1992. However, due to fluctuations in securities and trading
account gains (losses) between 1993 and 1992, non-interest income
in the aggregate was down 3.7% in 1993.
Trust Department income increased $174,000 to $1,158,000 in
1993. This increase results primarily from increased volume and
special services in the stock transfer area. Also contributing to
the increase was the effect of revising and increasing the trust
services fee structure. Service charges on deposit accounts
increased 2.4% in 1993 compared to 1992. Money order fees
increased from $1,767,000 in 1992 to $2,553,000 in 1993, an
increase of 44.5%. This increase was due to the increased sales
volume of the money order subsidiary. Securities and trading
account activity resulted in a net loss of $101,000 in 1993
compared to a gain of $1,438,000 in 1992. There were no
significant fluctuations between 1993 and 1992 in the several
components of other non-interest income.
OTHER OPERATING EXPENSES
Other operating expenses increased $2,024,000 or 6.3% to
$34,276,000 from $32,252,000 in 1992. This increase is primarily
associated with increases in personnel costs, and expenses related
to technology improvements and maintenance. In comparing 1993 to
1992, there is a shift in the composition of expenses associated
with data processing resulting from the Company's acquisition of
its data processing service bureau in May of 1992. This
contributed to the decrease in data processing expense of
$1,168,000 when comparing 1993 and 1992. This change also caused
increases in salaries and benefits, occupancy expense and furniture
and equipment expenses.
Salaries and benefits increased $2,090,000 or 12.8% to
$18,426,000. The increase is explained by salary increases, which
averaged approximately 5%, and an increase in the number of
employees. The full-time employee count was relatively stable
during 1993, despite the addition of several positions, as efforts
to shift certain functions to part-time personnel were successful.
During 1993, the Company added three new Executive Vice Presidents,
created and staffed a credit analysis function, upgraded the
management and staffing of its leasing operation, added a fixed-
income security specialist for managing Bank and Trust Department
investment activities, and added other appropriate personnel to
support the Company's activities, products and customer service
objectives. Furniture and equipment expenses increased $423,000 or
12%. Excluding the effect of the data processing service bureau
acquisition the increase would have been 8% and relates primarily
to money order equipment and maintenance expenses associated with
the increased level of activity. Professional fees increased in
1993, primarily as a result of fees for investment management
services for the Bank's securities portfolio, which services were
discontinued in the fourth quarter of 1993. Other categories of
other operating expenses included no significant unusual items or
significant variances between 1993 and 1992.
<PAGE>
INTEREST RATE SENSITIVITY ANALYSIS
<TABLE>
<CAPTION>
Dollars In Thousands Non-interest
December 31, 1994 0-90 91-180 181-365 1-5 Over 5 Bearing
Days Days Days Years Years Funds Total
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
Assets
Loans, net of unearned income $386,862 $12,231 $23,494 $142,716 $131,388 ($4,340) $692,351
Securities 75,522 37,462 57,678 153,395 21,738 345,795
Federal funds sold 5,300 5,300
Securities purchased under
agreements to resell 65,000 65,000
Other assets 105,544 105,544
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total assets 532,684 49,693 81,172 296,111 153,126 101,204 1,213,990
----------- ----------- ----------- ----------- ----------- ----------- -----------
Sources of Funds
Interest bearing deposits:
Demand deposits 88,833 133,246 96,590 318,669
Savings deposits 32,473 886 48,710 82,069
Time deposits 48,839 32,554 41,435 196,314 12,740 331,882
Securities sold under
agreements to repurchase 213,101 213,101
Federal funds purchased 5,800 5,800
Advances from the Federal Home
Loan Bank 1,594 1,616 3,185 26,119 48,990 81,504
Other liabilities 55,913 55,913
Shareholders' equity 125,052 125,052
----------- ----------- ----------- ----------- ----------- ----------- -----------
Total sources of funds 390,640 34,170 45,506 222,433 243,686 277,555 1,213,990
----------- ----------- ----------- ----------- ----------- ----------- -----------
Interest sensitivity gap 142,044 15,523 35,666 73,678 (90,560) (176,351)
----------- ----------- ----------- ----------- ----------- -----------
Cumulative interest sensitivity gap $142,044 $157,567 $193,233 $266,911 $176,351
=========== =========== =========== =========== ===========
Cumulative interest sensitivity gap
as a percent of total assets 11.70% 12.98% 15.92% 21.99% 14.53%
Rate-sensitive assets to rate-
sensitive liabilities 1.36X 1.45X 1.78X 1.33X 0.63X
</TABLE>
<PAGE>
AVERAGE BALANCES AND YIELDS/RATES TAX EQUIVALENT BASIS
<TABLE>
<CAPTION>
Dollars In Thousands 1994 1993 1992
----------------------------- ------------------------------ ----------------------------
Average Yields/ Average Yields/ Average Yields/
Balance Interest Rates Balance Interest Rates Balance Interest Rates
----------- -------- ------ ----------- --------- ------ --------- --------- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Earning Assets:
Securities:
U.S. Treasury and
government agencies $260,077 $11,301 4.32% $191,492 $8,131 4.25% $136,160 $9,154 6.72%
States and political
subdivisions 6,390 525 8.22 3,790 436 11.50 6,556 703 10.72
Corporate and other 47,713 2,808 5.87 52,828 3,338 6.32 48,902 3,926 8.03
Federal funds sold 32,155 1,409 4.38 22,479 692 3.08 30,549 1,096 3.59
Securities purchased under
agreements to resell 33,767 1,345 3.98 72,657 2,299 3.16 106,429 4,023 3.78
Trading account securities - - - 10,786 626 5.80 11,852 545 4.60
Loans, net of unearned income 679,100 63,260 9.32 615,070 56,656 9.21 534,525 52,160 9.76
----------- -------- ------ ----------- --------- ------ --------- --------- ------
Total earning assets 1,059,202 80,648 7.60% 969,102 72,178 7.45% 874,973 71,607 8.18%
Non-Earning Assets:
Allowance for loan losses (6,649) (6,023) (5,544)
Cash and due from banks 47,814 48,159 45,793
Other 36,198 32,468 30,584
----------- ----------- ---------
Total assets $1,136,565 $1,043,706 $945,806
=========== =========== =========
Interest Bearing Liabilities:
Deposits:
Demand deposits $240,828 6,166 2.56% $250,387 6,502 2.60% $241,530 8,545 3.54%
Savings deposits 85,852 2,161 2.52 81,060 2,107 2.60 75,685 2,594 3.43
Certificates of deposit
$100,000 and over 31,272 1,654 5.29 23,486 1,056 4.50 25,690 1,390 5.41
Other time deposits 281,621 13,515 4.80 289,534 14,720 5.08 304,463 19,374 6.36
----------- -------- ------ ----------- --------- ------ --------- --------- ------
Total interest
bearing deposits 639,573 23,496 3.67 644,467 24,385 3.78 647,368 31,903 4.93
Federal funds purchased and
securities sold under
agreements to repurchase 155,039 6,147 3.96 102,734 2,851 2.78 73,947 2,504 3.39
Advances from the Federal Home
Loan Bank 82,373 4,950 6.01 58,336 3,516 6.03 15,524 892 5.75
----------- -------- ------ ----------- --------- ------ --------- --------- ------
Total interest
bearing liabilities 876,985 34,593 3.94% 805,537 30,752 3.82% 736,839 35,299 4.79%
----------- -------- ------ ----------- --------- ------ --------- --------- ------
Non-Interest Bearing Liabilities:
Demand deposits 95,575 88,853 77,847
Other 42,300 33,600 22,548
----------- ----------- ---------
Total liabilities 1,014,860 927,990 837,234
Shareholders' Equity 121,705 115,716 108,572
Total liabilities and ----------- ----------- ---------
shareholders' equity $1,136,565 $1,043,706 $945,806
=========== =========== =========
Net Interest Income $46,055 $41,426 $36,308
======== ========= =========
Net Interest Spread 3.66% 3.63% 3.39%
Net Yield on Earning Assets 4.34% 4.27% 4.15%
====== ====== ======
</TABLE>
Tax exempt income is calculated on a tax equivalent basis using a tax rate
of 35% in 1994 and 1993 and 34% in 1992. The yields on securities are based
on amortized historical cost, excluding FASB Statement No.115 adjustments
to fair value. Non-accrual loans and loan fees are included in the
computation of loan yields. The Company has no deposits from foreign
depositors.
<PAGE>
INTEREST INCOME AND INTEREST EXPENSE
VOLUME AND RATE CHANGES FOR THE YEARS 1994 AND 1993 TAX EQUIVALENT BASIS
<TABLE>
<CAPTION>
In Thousands Net Change Due to Due to Net Change Due to Due to
1994/1993 Volume Rate 1993/1992 Volume Rate
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease)
Interest Income:
Securities $2,729 $2,952 ($223) ($1,878) $2,983 ($4,861)
Federal funds sold 717 362 355 (404) (263) (141)
Securities purchased under
agreements to resell (954) (1,445) 491 (1,724) (1,140) (584)
Trading account securities (626) (626) - 81 (52) 133
Loans, net of unearned income 6,604 5,958 646 4,496 7,539 (3,043)
--------------------------------------------------------------------------------------------
Total interest income 8,470 7,201 1,269 571 9,067 (8,496)
Interest Expense:
Deposits:
Demand deposits (336) (246) (90) (2,043) 303 (2,346)
Savings deposits 54 122 (68) (487) 174 (661)
Certificates of deposit
$100,000 and over 598 390 208 (334) (112) (222)
Other time deposits (1,205) (395) (810) (4,654) (913) (3,741)
Federal funds purchased and
securities sold under
agreements to repurchase 3,296 1,790 1,506 347 855 (508)
Advances from the Federal Home
Loan Bank 1,434 1,444 (10) 2,624 2,578 46
--------------------------------------------------------------------------------------------
Total interest expense 3,841 3,105 736 (4,547) 2,885 (7,432)
--------------------------------------------------------------------------------------------
Change in net interest income $4,629 $4,096 $533 $5,118 $6,182 ($1,064)
============================================================================================
</TABLE>
The volume/rate variance is allocated to the volume and rate categories based
on the relationship that the absolute volume or rate variance bears to the
total of the absolute variance for volume and rate before the allocation.
<PAGE>
Summary of Financial Data
<TABLE>
<CAPTION>
In Thousands, Except Per Share Amounts Years Ended December 31
-----------------------------------------------------------------
1994 1993 1992 1991 1990
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Total interest income $79,652 $71,302 $70,487 $78,347 $81,882
Total interest expense 34,593 30,752 35,299 44,854 47,113
-----------------------------------------------------------------
Net interest income 45,059 40,550 35,188 33,493 34,769
Provision for loan losses 712 390 650 725 4,607
-----------------------------------------------------------------
Net interest income after
provision for loan losses 44,347 40,160 34,538 32,768 30,162
Non-interest income 11,599 10,942 11,357 10,638 7,913
Other operating expenses 37,592 34,276 32,252 30,430 28,981
-----------------------------------------------------------------
Income before income taxes 18,354 16,826 13,643 12,976 9,094
Income tax expense 5,742 5,253 4,122 3,951 2,464
-----------------------------------------------------------------
Net income $12,612 $11,573 $9,521 $9,025 $6,630
=================================================================
Per common share:
Net income $1.42 $1.31 $1.10 $1.04 $0.76
Cash dividends declared 0.65 0.65 0.60 0.60 0.65
<CAPTION>
December 31
-----------------------------------------------------------------
1994 1993 1992 1991 1990
-----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Loans, net of unearned income $699,396 $657,568 $583,267 $493,373 $473,963
Total assets 1,213,990 1,169,023 1,041,649 981,703 982,764
Total deposits 732,620 729,449 689,377 672,926 674,567
Total shareholders' equity 125,052 119,590 112,629 107,444 102,505
</TABLE>
<PAGE>
QUARTERLY FINANCIAL DATA
<TABLE>
<CAPTION>
In Thousands, Except 1994 1993 1992
Per Share Amounts -------------------------------------------------------------------------------------------------------
First Second Third Fourth First Second Third Fourth First Second Third Fourth
-------------------------------- -------------------------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Total interest
income $18,310 $19,507 $20,325 $21,510 $17,421 $17,576 $17,656 $18,649 $17,903 $17,899 $17,296 $17,389
Total interest
expense 7,881 8,351 8,931 9,430 7,859 7,614 7,634 7,645 10,020 9,177 8,339 7,763
Provision for
loan losses 100 102 150 360 100 100 100 90 50 50 50 500
Net interest income ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
after provision for
loan losses 10,329 11,054 11,244 11,720 9,462 9,862 9,922 10,914 7,833 8,672 8,907 9,126
Non-interest income 2,691 2,707 2,829 3,372 2,544 2,698 2,862 2,838 1,979 2,760 3,219 3,399
Other operating
expenses 9,284 9,594 9,624 9,090 8,272 8,353 8,524 9,127 7,895 8,038 8,011 8,308
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Income before
income taxes 3,736 4,167 4,449 6,002 3,734 4,207 4,260 4,625 1,917 3,394 4,115 4,217
Income taxes 1,089 1,279 1,371 2,003 1,156 1,281 1,393 1,423 443 912 1,198 1,569
------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------ ------
Net income $2,647 $2,888 $3,078 $3,999 $2,578 $2,926 $2,867 $3,202 $1,474 $2,482 $2,917 $2,648
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
Per common share
Net income $0.30 $0.32 $0.35 $0.45 $0.29 $0.33 $0.32 $0.37 $0.18 $0.28 $0.34 $0.30
====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ====== ======
</TABLE>
<PAGE>
MARKET FOR MID-AMERICA BANCORP'S STOCK AND
RELATED SECURITY HOLDER MATTERS
Mid-America Bancorp's common stock is traded on the American Stock
Exchange (AMEX) under the symbol MAB. As of December 31, 1994, the total
number of holders of Mid-America Bancorp's common stock was 1,024 and the
market price of the Company's common stock was $ 17.00.
Mid-America Bank of Louisville and Trust Company is the stock transfer
agent, dividend disbursing agent, and registrar for the common stock of
Mid-America Bancorp.
The tables below represent the high and low market prices reported for
Mid-America Bancorp's common stock and the cash dividends declared
on common stock, in each quarter of the last two years. Market prices
have been adjusted to reflect the effect of stock dividends during the
years presented.
<TABLE>
<CAPTION>
Market Price
--------------------------
1994 Cash Dividends Declared High Low
----------------------------------------------------------------------------
<S> <C> <C> <C>
1st Quarter $ .15 $20.13 $17.00
2nd Quarter .15 18.88 17.50
3rd Quarter .15 18.00 17.13
4th Quarter .20 17.75 16.38
<CAPTION>
Market Price
--------------------------
1993 Cash Dividends Declared High Low
----------------------------------------------------------------------------
<S> <C> <C> <C>
1st Quarter $ .15 $16.25 $14.75
2nd Quarter .15 16.13 14.63
3rd Quarter .15 18.50 15.50
4th Quarter .20 19.63 17.00
----------------------------------------------------------------------------
</TABLE>
<PAGE>
Management's Statement on Financial Reporting
The Management of the Company is responsible for the integrity and
objectivity of the financial information presented in this Annual Report.
Management has prepared the financial statements according to generally
accepted accounting principles, which involve the use of estimates and
judgements where appropriate.
To meet its responsibility, Management maintains a comprehensive system of
internal control to assure proper authorization of transactions,
safeguarding of assets and reliability of financial records. This system
can provide only reasonable, not absolute, assurance that errors and
irregularities can be prevented or detected. The concept of reasonable
assurance is based on the recognition that the cost of a system of internal
control must be related to the benefits derived.
The Audit Committee of the Board of Directors reviews the systems of
internal control and financial reporting. The Committee meets and consults
regularly with Management, the internal auditors, and the independent
auditors to review the scope and results of their work.
The accounting firm of KPMG Peat Marwick LLP has performed an independent
audit of the Company's financial statements. The firm's report appears on
the following page.
/S/ Bertram W. Klein /s/ Steven A. Small
Bertram W. Klein Steven A. Small
Chairman and Chief Financial Officer and
Chief Executive Officer Executive Vice President
<PAGE>
Independent Auditors' Report
The Board of Directors and Shareholders
Mid-America Bancorp:
We have audited the accompanying consolidated balance sheets of Mid-America
Bancorp and subsidiaries as of December 31, 1994 and 1993, and the related
consolidated statements of income, changes in shareholders' equity, and cash
flows for each of the years in the three-year period ended December 31,
1994. These consolidated financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Mid-
America Bancorp and subsidiaries as of December 31, 1994 and 1993, and the
results of their operations and their cash flows for each of the years in
the three-year period ended December 31, 1994, in conformity with generally
accepted accounting principles.
As discussed in Note A to the consolidated financial statements, the Company
adopted the provisions of the Financial Accounting Standards Board's
Statements of Financial Accounting Standards No. 115, "Accounting For
Certain Investments in Debt and Equity Securities", and No. 109, "Accounting
for Income Taxes", in 1994 and 1993, respectively.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Louisville, Kentucky
January 20, 1995
<PAGE>
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
In Thousands, Except Share and Per Share Amounts December 31
-------------------------
1994 1993
--------- ---------
<S> <C> <C>
ASSETS
Cash and due from banks $64,215 $62,937
Federal funds sold 5,300 9,000
Securities purchased under agreements to resell 65,000 75,000
Securities available for sale, amortized cost of $134,656 (1994) and 131,482 109,202
market value of $109,477 (1993)
Securities held to maturity, market value of $209,374 (1994) and $225,503 (1993) 214,313 225,096
Loans, net of unearned income of $29,642 (1994) and $32,984 (1993) 699,396 657,568
Allowance for loan losses (7,045) (6,578)
--------- ---------
Loans, net 692,351 650,990
Premises and equipment 19,098 17,821
Other assets 22,231 18,977
--------- ---------
Total assets $1,213,990 $1,169,023
========= =========
LIABILITIES
Deposits:
Non-interest bearing $96,590 $118,591
Interest bearing 636,030 610,858
--------- ---------
Total deposits 732,620 729,449
Securities sold under agreements to repurchase 213,101 183,288
Federal funds purchased 5,800 12,500
Advances from the Federal Home Loan Bank 81,504 80,106
Money orders and similiar payment instruments outstanding 47,818 35,977
Accrued expenses and other liabilities 8,095 8,113
--------- ---------
Total liabilities 1,088,938 1,049,433
Commitments and contingencies
SHAREHOLDERS' EQUITY
Preferred stock, no par value; authorized-750,000 shares; none issued ---- ----
Common stock, no par value; stated value $2.77 per share;
authorized-12,000,000 shares (1994) and 10,000,000 shares (1993);
issued and outstanding - 8,803,759 shares (1994); 8,510,125 shares (1993) 24,421 23,607
Additional paid-in capital 95,608 91,535
Retained earnings 7,086 4,448
Net unrealized securities losses (2,063) ----
--------- ---------
Total shareholders' equity 125,052 119,590
--------- ---------
Total liabilities and shareholders' equity $1,213,990 $1,169,023
========= =========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
In Thousands, Except Per Share Amounts Years Ended December 31
----------------------------------------------
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $62,448 $55,928 $51,279
Interest on securities:
U.S. Treasury and agencies 11,301 8,131 9,154
States and political subdivisions 341 288 464
Corporate and other 2,808 3,338 3,926
Interest on federal funds sold 1,409 692 1,096
Interest on securities purchased under agreements to resell 1,345 2,299 4,023
Interest on trading account securities - 626 545
---------- ---------- ----------
Total interest income 79,652 71,302 70,487
INTEREST EXPENSE
Interest on deposits 23,496 24,385 31,903
Interest on federal funds purchased and
securities sold under agreements to repurchase 6,147 2,851 2,504
Interest on Federal Home Loan Bank advances 4,950 3,516 892
---------- ---------- ----------
Total interest expense 34,593 30,752 35,299
---------- ---------- ----------
NET INTEREST INCOME 45,059 40,550 35,188
Provision for loan losses 712 390 650
---------- ---------- ----------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 44,347 40,160 34,538
NON-INTEREST INCOME
Income from trust department 1,133 1,158 984
Service charges on deposit accounts 4,572 4,728 4,617
Money order fees 3,333 2,553 1,767
Securities gains (losses), net (4) 106 1,128
Trading account gains (losses), net - (207) 310
Other 2,565 2,604 2,551
---------- ---------- ----------
Total non-interest income 11,599 10,942 11,357
OTHER OPERATING EXPENSES
Salaries and employee benefits 20,538 18,426 16,336
Occupancy expense 2,622 2,413 2,305
Furniture and equipment expenses 4,226 3,955 3,532
Other 10,206 9,482 10,079
---------- ---------- ----------
Total other operating expenses 37,592 34,276 32,252
---------- ---------- ----------
INCOME BEFORE INCOME TAXES 18,354 16,826 13,643
Income tax expense 5,742 5,253 4,122
---------- ---------- ----------
NET INCOME $12,612 $11,573 $9,521
========== ========== ==========
Weighted average shares outstanding 8,901 8,814 8,678
========== ========== ==========
NET INCOME PER COMMON SHARE $ 1.42 $ 1.31 $ 1.10
========== ========== ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
Years Ended December 31, 1994, 1993 and 1992
---------------------------------------------------------------------------------
Common Stock Additional Net Unrealized Total
------------------------ Paid-in Retained Securities Shareholders'
In Thousands, Except Share and Per Share Amounts Shares Amount Capital Earnings Losses Equity
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1992 7,570,475 $21,005 $78,063 $8,376 $ $107,444
Net income 9,521 9,521
Cash dividends declared,
($0.60 per share) (4,554) (4,554)
Stock dividend declared 606,588 1,680 8,329 (10,009) ---
Stock options exercised 17,693 49 169 218
---------------------------------------------------------------------------------
Balance, December 31, 1992 8,194,756 22,734 86,561 3,334 112,629
Net income 11,573 11,573
Cash dividends declared,
($0.65 per share) (5,356) (5,356)
Stock dividend declared 247,415 685 4,418 (5,103) ---
Stock options exercised,
including related tax benefits 67,954 188 556 744
---------------------------------------------------------------------------------
Balance, December 31, 1993 8,510,125 23,607 91,535 4,448 119,590
Net income 12,612 12,612
Cash dividends declared,
($0.65 per share) (5,559) (5,559)
Stock dividend declared 255,960 709 3,706 (4,415) ---
Stock options exercised,
including related tax benefits 37,674 105 367 472
Net unrealized securities losses (2,063) (2,063)
---------------------------------------------------------------------------------
Balance, December 31, 1994 8,803,759 $24,421 $95,608 $7,086 ($2,063) $125,052
=================================================================================
</TABLE>
See notes to consolidated financial statements.
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
In Thousands Years Ended December 31
--------------------------------------------
1994 1993 1992
---------- ---------- ----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $12,612 $11,573 $9,521
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation, amortization and accretion, net 5,357 4,413 2,496
Provision for loan losses 712 390 650
Loss (gain) on sales of securities 4 (106) (1,128)
Loss (gain) on trading account securities - 207 (310)
Deferred taxes 485 (162) 98
Net decrease (increase) in trading account securities - (91,585) 5,334
Decrease (increase) in interest receivable (2,193) (1,288) 2,376
Decrease (increase) in other assets (446) (2,713) 1,422
Increase in money orders and similar payment
instruments outstanding 11,841 10,553 7,998
Increase in accrued expenses and other liabilities 643 1,838 3,018
---------- ---------- ----------
Net cash provided by (used in) operating activities 29,015 (66,880) 31,475
---------- ---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of securities available for sale (31,667) (68,897) (22,935)
Proceeds from maturities of securities available for sale 15,806 103,000 -
Proceeds from sales of securities available for sale 3,000 9,957 61,467
Purchases of securities held to maturity (72,621) (245,460) (106,339)
Proceeds from maturities of securities held to maturity 67,935 111,068 81,880
Proceeds from sales of securities held to maturity - 12,089 13,364
Net increase in customer loans (42,721) (75,340) (93,264)
Proceeds from sales of premises and equipment 136 106 178
Payments for purchases of premises and equipment (3,864) (2,472) (3,124)
---------- ---------- ----------
Net cash used in investing activities (63,996) (155,949) (68,773)
---------- ---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in deposits 3,171 40,072 16,451
Net increase (decrease) in securities sold
under agreements to repurchase 29,813 21,211 (2,877)
Net increase (decrease) in federal funds purchased (6,700) 1,525 (3,525)
Advances from the Federal Home Loan Bank 11,646 51,687 50,350
Repayment of advances from the Federal Home Loan Bank (10,248) (6,217) (15,714)
Stock options exercised 436 650 218
Dividends paid (5,559) (5,356) (5,592)
---------- ---------- ----------
Net cash provided by financing activities 22,559 103,572 39,311
---------- ---------- ----------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (12,422) (119,257) 2,013
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 146,937 266,194 264,181
---------- ---------- ----------
CASH AND CASH EQUIVALENTS AT END OF YEAR $134,515 $146,937 $266,194
========== ========== ==========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Mid-America Bancorp is a bank
holding company whose primary subsidiary is Mid-America Bank of Louisville
and Trust Company (the Bank). Other subsidiaries include Mid-America Bank,
FSB, and Mid-America Money Order Company.
Principles of Consolidation--The consolidated financial statements include
the accounts of Mid-America Bancorp and its wholly-owned subsidiaries (the
Company). Significant intercompany items have been eliminated in
consolidation. Certain prior year amounts have been reclassified to conform
with current classifications.
Securities Purchased Under Agreements to Resell--The Company obtains
possession and/or control through third parties of underlying securities
held as collateral for securities purchased under agreements to resell.
Collateral for securities purchased under agreements to resell is priced
with accrued interest based on the bid price at the end of the day and must
exceed the face amount of the security purchased under agreements to resell
by a stated margin amount. The Company monitors the prices and margins on a
daily basis.
Securities--Effective January 1, 1994, the Company adopted Statement of
Financial Accounting Standards (FASB Statement) No. 115, "Accounting for
Certain Investments in Debt and Equity Securities." Debt securities are
classified as securities held to maturity and carried at amortized cost if
management has the positive intent and ability to hold the securities to
maturity. Securities purchased with the intention of recognizing short-term
profits are placed in a trading account and are carried at market value with
unrealized gains or losses reported in income. Securities not classified as
securities held to maturity or trading and which may be sold in response to
or in anticipation of changes in interest rates or based on other factors
are designated as securities available for sale and are carried at fair
value with unrealized gains and losses, net of tax effects, reflected in
shareholders' equity. Prior to the adoption of FASB Statement No. 115,
securities available for sale were carried at the lower of aggregate cost or
fair value. Amortization of premiums and accretion of discounts are
recorded on the interest method. The specific identification method is used
in determining gains and losses on the sale of securities.
Loans and Interest Income--Loans are reported at the principal balance
outstanding, net of unearned income and deferred loan fees. Interest on
loans and amortization of unearned income and deferred loan fees, are
computed by methods which generally result in level rates of return.
Generally, the accrual of interest on loans is discontinued when it is
determined that the collection of interest or principal is doubtful, or when
a default of interest or principal has existed for 90 days or more, unless
such loan is well secured and in the process of collection.
Allowance for Loan Losses--The allowance for loan losses is maintained at a
level adequate to absorb estimated potential credit losses. Management
determines the adequacy of the allowance based upon reviews of individual
credits, evaluation of the risk characteristics of the loan portfolio,
including the impact of current economic conditions on the borrowers'
ability to repay, past collection and loss experience and such other
factors, which, in management's judgement, deserve current recognition. The
allowance for loan losses is increased by charges to operating earnings and
reduced by charge-offs, net of recoveries.
Premises and Equipment--Premises and equipment are stated at cost less
accumulated depreciation and amortization. Depreciation is computed over the
estimated useful lives of the assets or lease term, if shorter, on the
straight line method.
Other Assets--Included in other assets is real estate acquired in settlement
of loans which is carried at the lower of cost or fair value minus estimated
disposition costs. Any write-downs at the date of acquisition are charged
to the allowance for loan losses. Expenses incurred in maintaining assets,
subsequent write-downs to reflect declines in value, and realized gains or
losses are reflected in income. The Company also holds real estate for
investment purposes. These income producing properties are carried at the
lower of cost or net realizable value. Income and expenses, including
depreciation, are reflected in other non-interest income.
Income Taxes--The Company accounts for income taxes in accordance with FASB
Statement No. 109, "Accounting for Income Taxes", which requires the use of
the asset and liability method of accounting for income taxes. The amounts
provided for income taxes are based upon the amounts of current and deferred
taxes payable or refundable at the date of the financial statements as
measured by the provisions of enacted laws and tax rates. The Company
previously followed FASB Statement No. 96, " Accounting for Income Taxes",
and adopted FASB Statement No. 109 on a prospective basis in the first
quarter of 1993. The implementation of this new accounting standard was not
significant to financial condition or results of operations.
Net Income Per Common Share--Net income per common share is determined by
dividing net income by the weighted average number of shares of common stock
outstanding, adjusted for the number of shares that would be issued assuming
the exercise of stock options.
B. CASH FLOWS
For purposes of the consolidated statements of cash flows, cash and cash
equivalents include cash on hand, amounts due from banks, federal funds
sold, and securities purchased under agreements to resell. Certain
activities of the Company, such as the acquisition of property in exchange
for release of indebtedness, do not result in cash receipts or payments and,
therefore, are not presented in the consolidated statements of cash flows.
During 1994, 1993 and 1992, cash paid for income taxes amounted to
$3,769,000, $5,577,000 and $4,107,000, respectively, and cash paid for
interest was $34,253,000, $31,002,000 and $36,168,000, respectively. Loans
transferred to other assets were $648,000 in 1994, $1,207,000 in 1993, and
$3,217,000 in 1992. Securities held to maturity transferred to securities
available for sale amounted to $39,468,000 and $60,478,000 in 1993 and 1992,
respectively. In 1993, trading account securities of $91,378,000 were
transferred to securities available for sale.
<PAGE>
C. SECURITIES
The amortized cost and market value of securities held to maturity follows:
<TABLE>
<CAPTION>
In Thousands December 31, 1994 December 31, 1993
---------------------------------------------------------------------------------------------
Amortized Unrealized Market Amortized Unrealized Market
Cost Gains Losses Value Cost Gains Losses Value
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury and
U.S. government agencies $189,223 $19 $4,377 $184,865 $174,395 $138 $325 $174,208
States and political subdivisions 7,877 26 238 7,665 2,956 127 -- 3,083
Corporate obligations 16,863 50 418 16,495 33,557 480 13 34,024
Equity securities and other 350 -- 1 349 14,188 -- -- 14,188
---------------------------------------------------------------------------------------------
$214,313 $95 $5,034 $209,374 $225,096 $745 $338 $225,503
=============================================================================================
</TABLE>
The amortized cost and market value of securities available for sale follows.
As a result of adopting FASB Statement No. 115, securities available for sale
are carried at market value at December 31, 1994 and at the lower of amortized
cost or market value at December 31, 1993.
<TABLE>
<CAPTION>
In Thousands December 31, 1994 December 31, 1993
---------------------------------------------------------------------------------------------
Amortized Unrealized Market Amortized Unrealized Market
Cost Gains Losses Value Cost Gains Losses Value
---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasury and
U.S. government agencies $110,213 $16 $3,190 $107,039 $109,202 $342 $67 $109,477
Corporate obligations 9,915 -- -- 9,915 -- -- -- --
Equity securities 14,528 -- -- 14,528 -- -- -- --
---------------------------------------------------------------------------------------------
$134,656 $16 $3,190 $131,482 $109,202 $342 $67 $109,477
=============================================================================================
</TABLE>
A summary of debt securities at December 31, 1994 based on contractual
maturities is shown in the table below. Actual maturities may differ from
contractual maturities because issuers may have the right to call or prepay
obligations with or without prepayment penalties. The weighted average
expected maturity of collateralized mortgage obligations was 2 years and 5
months.
In Thousands
<TABLE>
<CAPTION>
Securities Held to Maturity Securities Available for Sale
----------------------------------- ---------------------------------
Amortized Market Amortized Market
Cost Value Cost Value
----------------------------------- ---------------------------------
<S> <C> <C> <C> <C>
Due within one year $117,291 $116,019 $52,408 $52,079
Due after one year through five years 91,670 88,181 64,348 61,725
Due after five years through ten years 1,406 1,360 -- --
Due after ten years 3,946 3,814 -- --
Collateralized mortgage obligations -- -- 3,372 3,150
----------------------------------- ---------------------------------
$214,313 $209,374 $120,128 $116,954
=================================== =================================
</TABLE>
Gross realized gains and losses on the sales of securities were $9,000 and
$13,000, respectively, in 1994, $107,000 and $1,000, respectively, in 1993,
and $1,183,000 and $55,000, respectively in 1992.
Securities with a book value of $254,993,000 and $253,905,000 at December 31,
1994 and 1993, respectively, were pledged to secure public and trust deposits,
repurchase agreements and for other purposes.
<PAGE>
D. LOANS
The composition of loans follows:
In Thousands December 31
---------------------------
1994 1993
------------ ------------
Commercial and financial $285,316 $250,881
Real estate - construction and development 61,083 59,581
Real estate - mortgage 291,198 296,870
Consumer 61,799 50,236
------------ ------------
$699,396 $657,568
============ ============
Loans outstanding and unfunded commitments are primarily concentrated in the
Bank's market area which encompasses Jefferson County, Kentucky and
surrounding communities. The Bank's credit exposure is diversified, with
secured and unsecured loans to consumers, small businesses and large
corporations. Although the Bank has a diversified loan portfolio, the ability
of customers to honor loan commitments is based, in part, on the economic
stability of the geographic region and/or industry in which they do business.
Nonaccrual and restructured loan balances and income information were as
follows:
<TABLE>
<CAPTION>
In Thousands 1994 1993 1992
------------ ------------ ------------
<S> <C> <C> <C>
Recorded investment at year-end $2,705 $2,695 $4,453
Interest computed at original terms 208 259 429
Interest recognized 47 166 175
</TABLE>
The Company is required to adopt FASB Statement No. 114, "Accounting by
Creditors for Impairment of a Loan", as amended by FASB Statement No. 118
"Accounting by Creditors for Impairment of a Loan-Income Recognition and
Disclosures", on January 1, 1995. Management does not expect the adoption of
this standard to have a significant impact on the Company's financial
position or results of operations.
E. ALLOWANCE FOR LOAN LOSSES
Activity in the allowance for loan losses follows:
<TABLE>
<CAPTION>
In Thousands 1994 1993 1992
---------------------------------------------
<S> <C> <C> <C>
Balance, January 1 $6,578 $6,020 $5,523
Loans charged-off (493) (576) (504)
Recoveries 248 744 351
---------------------------------------------
Net (charge-offs) recoveries (245) 168 (153)
Provision for loan losses 712 390 650
---------------------------------------------
Balance, December 31 $7,045 $6,578 $6,020
=============================================
</TABLE>
F. PREMISES AND EQUIPMENT AND LEASE COMMITMENTS
A summary of premises and equipment follows:
In Thousands December 31
------------------------------
1994 1993
------------------------------
Land $4,352 $4,314
Buildings and leasehold improvements 11,744 10,796
Furniture and equipment 18,715 16,751
------------------------------
34,811 31,861
Less accumulated depreciation and amortization 15,713 14,040
------------------------------
$19,098 $17,821
==============================
At December 31, 1994, the Company was obligated under long-term noncancelable
operating leases covering various premises and equipment. The Company's main
office and most branch office lease agreements contain renewal options.
Computer equipment leases are cancelable generally within a short period of
time and without substantial penalties.
Rental expense, net of insignificant amounts of sublease rental income, was
$1,195,000, $1,042,000 and $1,003,000 for 1994, 1993 and 1992, respectively.
Minimum rental commitments under noncancelable leases in future years are as
follows:
Year Ended December 31
In Thousands
-----------------------------------------
1995 $1,020
1996 876
1997 870
1998 833
1999 782
Thereafter 5,150
=========================================
G. INCOME TAXES
The provision for income taxes consists of the following:
In Thousands 1994 1993 1992
------------ ------------ -------------
Current:
Federal $5,243 $5,373 $4,037
State 14 42 (13)
------------ ------------ -------------
5,257 5,415 4,024
Deferred 485 (162) 98
------------ ------------ -------------
$5,742 $5,253 $4,122
============ ============ =============
The provisions for income taxes in the consolidated statements of income are
reconciled to the federal statutory rate as follows:
1994 1993 1992
------------ ------------ -------------
Tax at federal statutory rate 35.0% 35.0% 34.0%
Tax exempt interest income (3.6) (3.8) (5.7)
Non-deductible expenses 1.4 1.1 1.9
Other, net (1.5) (1.1) --
------------ ------------ -------------
31.3% 31.2% 30.2%
============ ============ =============
Other liabilities include deferred income taxes of $ 486,000 and $131,000 at
December 31, 1994 and 1993, respectively. The principal types of basis
differences between assets and liabilities for financial reporting and tax
return purposes which give rise to deferred taxes relate to the following:
In Thousands 1994 1993
------------ -------------
Deferred tax liabilities:
Lease accounting $1,033 $497
Depreciation 1,725 1,722
Other 861 676
------------ -------------
Total deferred tax liabilities 3,619 2,895
------------ -------------
Deferred tax assets:
Allowance for loan losses 2,567 2,422
Mark-to-market adjustments 103 ---
Deferred compensation 201 203
Other 262 139
------------ -------------
Total deferred tax assets 3,133 2,764
------------ -------------
Net deferred tax liabilities $486 $131
============ =============
Based upon historical and projected levels of taxable income, management
believes it is more likely than not that the Company will realize the income
tax benefits of its deductible temporary differences. Accordingly, no
valuation allowance for deferred tax assets was recorded at December 31, 1994
and 1993.
H. DEPOSITS
Included in deposits are certificates of deposit and other time
deposits in denominations of $100,000 or more in the amounts of
$52,956,000 and $31,591,000 at December 31, 1994 and 1993,
respectively, including retail brokered certificates of deposit
aggregating approximately $10 million at December 31, 1994.
<PAGE>
I. SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE
The Company enters into sales of securities under agreements to
repurchase which are treated as financings. The obligation to
repurchase securities sold is reflected as a liability and the
assets underlying the agreements remain in the respective
securities account.
<TABLE>
<CAPTION>
December 31, 1994
-------------------------------------------------------
Asset Sold Repurchase Liability
----------------------------- -----------------------
Weighted
Average
Dollars In Thousands Carrying Market Interest
Maturity/Type of Asset Amount Value Amount Rate
------------- ------------- ------------- -------
<S> <C> <C> <C> <C>
Overnight to 30 Days
U.S. Treasury and
government agencies $210,152 $205,181 $203,975 5.78%
31 to 90 Days
U.S. Treasury and
government agencies 9,256 9,126 9,126 5.70
------------- ------------- ------------- -------
$219,408 $214,307 $213,101 5.77%
============= ============= ============= =======
</TABLE>
J. ADVANCES FROM THE FEDERAL HOME LOAN BANK
The Bank is a member of the Federal Home Loan Bank of Cincinnati (FHLB) and,
accordingly, is eligible to borrow from the FHLB. The Bank pledges certain
first mortgage loans as collateral for these advances. The aggregate balance
in these mortgages must equal 150% of the advances outstanding. Certain
information with respect to outstanding advances from the FHLB is summarized
below:
<TABLE>
<CAPTION>
Dollars In Thousands
December 31, 1994 December 31, 1993
--------------------------------------------------
Weighted Weighted
Average Average
Interest Interest
Year of Maturity Amount Rate Amount Rate
--------------------------------------------------
<S> <C> <C> <C> <C>
1995 $581 4.25 % $1,252 4.25 %
1996 962 4.55 1,454 4.55
1997 1,311 4.80 1,733 4.80
1998 2,963 5.94 3,419 5.94
2000 - 2004 24,340 5.70 27,445 5.72
2005 - 2009 45,119 6.24 42,207 6.08
2010 - 2014 6,228 7.06 2,596 6.98
------------ ----------- ----------- -----------
$81,504 6.07 % $80,106 5.89 %
============ =========== =========== ===========
</TABLE>
Scheduled principal repayments on advances from the FHLB are $6,395,000,
$6,067,000, $5,877,000, $8,178,000, and $5,997,000 for 1995 through 1999,
respectively, and $48,990,000 thereafter.
K. Employee Benefit Plans
The Company has a defined benefit pension plan covering substantially all of
its employees. The benefits are based on years of service and employee's
compensation during the ten years of employment prior to retirement. The
Company's funding policy is to contribute annually the amount greater than or
equal to the funding requirements of ERISA, but not in excess of the maximum
deductible limit. Employer contributions are intended to provide not only for
benefits attributed to service to date, but also for those expected to be
earned in the future.
<PAGE>
The following table sets forth the plan's funded status and amounts recognized
in the Company's consolidated balance sheet:
<TABLE>
<CAPTION>
In Thousands December 31
------------------------
1994 1993
------------------------
<S> <C> <C>
Actuarial present value of benefit obligations:
Accumulated benefit obligation, including vested benefits of
$6,284 (1994) and $6,629 (1993) $6,512 $6,832
========================
Plan assets at market value, primarily debt and equity mutual funds $10,584 $11,212
Projected benefit obligation for service rendered to date 8,548 9,608
------------------------
Plan assets in excess of projected benefit obligation 2,036 1,604
Unrecognized net (gain) loss from past experience different from that assumed (231) 212
Unrecognized prior service cost (60) 202
Unrecognized net asset at January 1, 1986 being recognized over
approximately 16 years (1,199) (1,380)
------------------------
Prepaid pension cost included in other assets $546 $638
========================
</TABLE>
Net pension benefit (expense) for 1994, 1993 and 1992 included the following
components:
<TABLE>
<CAPTION>
In Thousands Years ended December 31
-------------------------------------
1994 1993 1992
-------------------------------------
<S> <C> <C> <C>
Service cost-benefits earned during the period ($506) ($464) ($358)
Interest cost on projected benefit obligation (655) (653) (583)
Actual return on plan assets (297) 1,018 887
Amortization and deferral - net 1,366 18 94
-------------------------------------
Net pension income (expense) ($92) ($81) $40
=====================================
</TABLE>
Discount rates of 8.25 % in 1994 and 7.20 % in 1993 and rates of increases in
future compensation levels of 5.00 % in 1994 and 6.0 % in 1993 were used in
determining the actuarial present value of the projected benefit obligation.
The expected long-term rate of return on assets was 8.00 % in 1994 and 8.50 %
in 1993.
The Company does not have a significant commitment to pay post-retirement or
post-employment benefits other than pension benefits.
The Company also sponsors an unfunded non-qualified excess benefit plan
covering certain executive officers. The plan has an accrued unfunded
accumulated benefit obligation of $627,000 at December 31, 1994. Expenses of
the plan were approximately $176,000 in 1994, $135,000 in 1993 and $105,000 in
1992.
The Company also offers a defined contribution employee stock ownership plan.
The Company's contribution to this plan was $441,000, $375,000, and $312,000
for 1994, 1993 and 1992, respectively.
The Company has incentive stock option plans under which shares of common
stock have been reserved for the granting of stock options to certain key
employees of the Company. The plans provide that the option price shall not be
less than the fair market value of the stock at the effective date the options
are granted, and that the term of the options shall not be more than ten years
from the date of the grant. Options granted under the plans are exercisable
one year after date of the grant. Shares available for future grants were
216,617 at December 31, 1994.
<PAGE>
<TABLE>
<CAPTION>
Shares
Under
Option Price Range
-------------------------------------
<S> <C> <C> <C>
Balance at January 1, 1992 375,169 $10.31 to $13.79
Granted 162,318 $14.97 to $16.47
Cancelled (4,439)
Exercised (20,272) $10.31 to $12.53
--------
Balance at December 31, 1992 512,776 $10.31 to $16.47
Granted 210,223 $14.97 to $19.36
Cancelled (4,774)
Exercised (91,809) $10.31 to $14.97
--------
Balance at December 31, 1993 626,416 $10.31 to $19.36
Granted ----
Cancelled (2,118)
Exercised (47,077) $10.31 to $14.97
--------
Balance at December 31, 1994 577,221 $10.31 to $19.36
========
</TABLE>
Common stock received through the exercise of incentive stock options which
are sold by the optionee within two years of grant or one year of exercise
result in a tax deduction for the Company equivalent to the taxable gain
recognized by the optionee. For financial reporting purposes, the tax effect
of this deduction is accounted for as an increase in additional paid-in
capital rather than as a reduction of income tax expense. Such optionee sales
resulted in a tax benefit to the Company of approximately $ 36,000 in 1994 and
$94,000 in 1993.
L. Regulatory Restrictions on Dividends and Cash
Under the Federal Reserve Act, prior approval of the Federal banking
authorities is required if dividends declared by the Company's banking
subsidiary in any year exceed its net profits for that year, as defined,
combined with retained net profits, as defined, for the two preceding years.
As of January 1, 1995, the aggregate amount of retained earnings available for
distribution to the Company by all subsidiaries without prior approval was
approximately $14,200,000. In addition to restrictions on the payment of
dividends, the Federal Reserve and the Commonwealth of Kentucky place certain
cash reserve requirements on deposits. The reserve requirements, which were
$26,703,000 at December 31, 1994, are met by holding a percentage of deposits
in vault cash or maintaining a balance directly with the Federal Reserve. The
Company was in compliance with all cash reserve requirements at December 31,
1994.
<PAGE>
M. Common Stock Dividends
The following table sets forth the Company's stock dividends to common
shareholders:
<TABLE>
<CAPTION>
Declaration Record Payable Stock Dividend
Date Date Date Percentage
---------- ---------- ---------- ----------
<S> <S> <S> <C>
November 21, 1994 December 12, 1994 December 29, 1994 3.0 %
November 15, 1993 December 15, 1993 December 31, 1993 3.0
November 16, 1992 December 16, 1992 December 30, 1992 8.0
</TABLE>
Appropriate share and per share information in the consolidated financial
statements reflects the adjusted number of shares.
N. COMMITMENTS AND CONTINGENCIES
In the normal course of business, in order to meet the financing needs of
customers, the Company has outstanding commitments and contingent liabilities.
At December 31, 1994, the Company had $314,755,000 of commitments to extend
credit (of which $119,885,000 relates to home equity lines of credit),
including standby letters of credit of $ 8,362,000, which are not reflected in
the consolidated financial statements. The Company's exposure to credit loss
in the event of nonperformance by the other party to these commitments is
represented by the contractual amount of those instruments.
Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and may require payment of a fee. Since many of the commitments are expected
to expire without being drawn upon, the total commitment amounts do not
necessarily represent future cash requirements. The Company evalutes each
customers' creditworthiness on a case-by-case basis. The amount of collateral
obtained if deemed necessary by the Company upon extension of credit is based
on management's credit evaluation of the counterparty. Collateral held varies
but may include accounts receivable, inventory, plant, property and equipment,
real estate and income-producing commercial properties.
Standby letters of credit and financial guarantees written are conditional
commitments issued by the Company to guarantee the performance of a customer
to a third party. Those guarantees are primarily issued to support public and
private borrowing arrangements, including commercial paper, bond financing,
and similar transactions.
At December 31, 1994, there were various pending legal actions and proceedings
in which claims for damages were asserted. In one such matter, the Bank is one
of 13 defendants named in a lawsuit filed on December 10, 1993, by Kentucky
Central Life Insurance Company (in Rehabilitation) involving certain real
estate loans. Management, after discussion with legal counsel concerning the
adequacy of the Company's defenses, believes that this and other legal actions
will not have a material adverse effect upon the financial condition of the
Bank or the Company.
<PAGE>
O. OTHER OPERATING EXPENSES
<TABLE>
<CAPTION>
In Thousands 1994 1993 1992
-------------------------------------------
<S> <C> <C> <C>
Operating supplies $1,649 $1,319 $1,250
Data processing fees 272 200 1,368
Professional fees 899 1,048 974
Taxes-Bank shares, property and other 1,436 1,349 1,265
Deposit insurance 1,642 1,579 1,532
Other 4,308 3,987 3,690
-------------------------------------------
$10,206 $9,482 $10,079
===========================================
</TABLE>
<PAGE>
P. RELATED PARTY TRANSACTIONS
Loans to directors, executive officers and principal holders of the Company's
stock and associates of such persons are presented below:
<TABLE>
<CAPTION>
In Thousands
<S> <C>
Balance, January 1, 1994 $26,004
New loans 11,194
Repayments (12,613)
Additions for changes in related party group 1,668
Reductions for changes in related party group (18,400)
----------
Balance, December 31, 1994 $7,853
==========
</TABLE>
The above transactions were made on substantially the same terms, including
interest rates and collateral, as those prevailing at the time for other
customers in the ordinary course of business.
The Company leases certain office space and purchases services from companies
controlled by certain members of the Board of Directors. Amounts paid were
approximately $629,000, $936,000 and $947,000 for 1994, 1993 and 1992,
respectively.
<PAGE>
Q. DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS
The estimated fair values of the Company's financial instruments are as
follows:
<TABLE>
<CAPTION>
In Thousands December 31, 1994 December 31, 1993
---------------------------------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
---------------------------------------------------
<S> <C> <C> <C> <C>
Financial assets:
Cash and short-term investments $134,515 $134,515 $146,937 $146,937
Securities 345,795 340,856 334,298 334,980
Loans 692,351 686,720 650,990 670,935
Financial liabilities:
Deposits 732,620 728,942 729,449 735,843
Short-term borrowings 218,901 218,901 195,788 195,788
Advances from the Federal Home Loan Bank 81,504 72,517 80,106 80,239
</TABLE>
The following methods and assumptions were used to estimate the fair value of
each class of financial instruments:
Cash, Short-Term Investments, and Short-Term Borrowings--For those short-term
instruments, the carrying amount is a reasonable estimate of fair value.
Securities--For securities, fair value equals quoted market price, if
available. If a quoted market price is not available, fair value is estimated
using quoted market prices for similar securities or dealer quotes.
Loans--The fair value of loans is estimated by discounting the future cash
flows using the current rates at which similar loans would be made to
borrowers with similar credit ratings and for the same remaining maturities.
Deposits--The fair value of demand deposits, savings accounts, and money
market deposits is the amount payable on demand at the reporting date. The
fair value of fixed-maturity certificates of deposit is estimated using the
rates currently offered for deposits of similar remaining maturities.
Advances from the Federal Home Loan Bank--Rates currently available to the
Company for debt with similar terms and remaining maturities are used to
estimate fair value of existing debt.
Commitments--The fair value of commitments to extend credit is estimated using
the fees currently charged to enter into similar agreements, taking into
account the remaining terms of the agreements and the present creditworthiness
of the counterparties. For fixed rate loan commitments, fair value also
considers the difference between current levels of interest rates and the
committed rates. There are no significant fair value adjustments for
commitments. Off-balance-sheet financial instruments are discussed further in
Note N.
Limitations--The fair value estimates are made at a discrete point in time
based on relevant market information about the financial instruments. Because
no market exists for a significant portion of the Company's financial
instruments, fair value estimates are based on judgements regarding future
expected loss experience, current economic conditions, risk characteristics of
various financial instruments, and other factors. These estimates are
subjective in nature and involve uncertainties and matters of significant
judgement and therefore cannot be determined with precision. Changes in
assumptions could significantly affect the estimates.
<PAGE>
R. Condensed Financial Information - Parent Company Only
Condensed Balance Sheets
<TABLE>
<CAPTION>
In Thousands December 31
------------------------------
1994 1993
------------------------------
<S> <C> <C>
Assets:
Cash on deposit with bank subsidiary $2,501 $1,140
Investment in bank and thrift subsidiaries 110,093 105,755
Investment in other subsidiaries 13,131 12,560
Other assets 69 182
------------------------------
Total assets $125,794 $119,637
==============================
Liabilities and shareholders' equity:
Other liabilities $742 $47
Shareholders' equity 125,052 119,590
------------------------------
Total liabilities and shareholders' equity $125,794 $119,637
==============================
</TABLE>
Condensed Statements of Income
<TABLE>
<CAPTION>
In Thousands Years Ended December 31
------------------------------------------
1994 1993 1992
------------ -------- -----------------
<S> <C> <C> <C>
Cash dividends from bank subsidiary $5,800 $4,800 $10,400
Other income 1 2 1
Other expenses (217) (219) (268)
------------ -------- -----------------
Income before income taxes and equity
in earnings of subsidiaries 5,584 4,583 10,133
Applicable income tax benefit 56 72 86
------------ -------- -----------------
Income before equity in earnings of
subsidiaries 5,640 4,655 10,219
Equity in earnings of subsidiaries 6,972 6,918 (698)
------------ -------- -----------------
Net income $12,612 $11,573 $9,521
============ ======== =================
</TABLE>
<PAGE>
R. Condensed Financial Information - Parent Company Only (Continued)
Condensed Statements of Cash Flows
<TABLE>
<CAPTION>
In Thousands Years Ended December 31
-----------------------------------------
1994 1993 1992
-----------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income $12,612 $11,573 $9,521
Adjustment to reconcile net income to net cash
from operating activities:
Equity in earnings of subsidiaries (6,972) (6,918) 698
(Increase) decrease in other assets 113 279 (362)
Increase (decrease) in other liabilities 731 (740) 708
-----------------------------------------
Net cash provided by operating activities 6,484 4,194 10,565
-----------------------------------------
Cash flows from investing activities:
Investment in subsidiaries -- (3,750) (450)
-----------------------------------------
Net cash used in investing activities -- (3,750) (450)
-----------------------------------------
Cash flows from financing activities:
Dividends paid (5,559) (5,356) (5,592)
Issuance of common stock 436 650 218
-----------------------------------------
Net cash used in financing activities (5,123) (4,706) (5,374)
-----------------------------------------
Net increase (decrease) in cash and cash equivalents 1,361 (4,262) 4,741
Cash and cash equivalents at beginning of year 1,140 5,402 661
-----------------------------------------
Cash and cash equivalents at end of year $2,501 $1,140 $5,402
=========================================
</TABLE>
<PAGE>
SUBSIDIARIES OF REGISTRANT Exhibit 21
The subsidiaries of Mid-America Bancorp are listed below. Each of the
companies with the exception of Mid-America Bank, F.S.B., which is a
Federal Savings Bank organized under laws of the United States, is
incorporated in the state of Kentucky.
Mid-America Bank of Louisville and Trust Co.
Mid-America Money Order Company
Eton Life Insurance Company
Mid-America Data Processing Inc.
Mid-America Property Management Company
MABC Leasing Company
Mid-America Bank, F.S.B.
<PAGE>
CONSENT OF INDEPENDENT AUDITORS Exhibit 23
The Board of Directors
Mid-America Bancorp:
We consent to incorporation by reference in the Registration
Statements No. 2-92270, No. 2-99495, and No. 33-42989 on Forms S-8
of Mid-America Bancorp of our report dated January 20, 1995,
relating to the consolidated balance sheets of Mid-America Bancorp
and subsidiaries as of December 31, 1994 and 1993, and the related
consolidated statements of income, changes in shareholders' equity,
and cash flows for each of the years in the three-year period ended
December 31, 1994, which report appears in the 1994 annual report
to shareholders, which is incorporated by reference in the December
31, 1994 Form 10-K of Mid-America Bancorp.
Our report refers to changes in the methods of accounting for
certain debt and equity securities in 1994 and income taxes in
1993.
Louisville, Kentucky /s/ KPMG Peat Marwick LLP
March 22, 1995
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1994
<PERIOD-END> DEC-31-1994
<PERIOD-TYPE> YEAR
<CASH> 64,215
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 70,300
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 131,482
<INVESTMENTS-CARRYING> 214,313
<INVESTMENTS-MARKET> 209,374
<LOANS> 699,396
<ALLOWANCE> 7,045
<TOTAL-ASSETS> 1,213,990
<DEPOSITS> 732,620
<SHORT-TERM> 218,901
<LIABILITIES-OTHER> 55,913
<LONG-TERM> 81,504
0
0
<COMMON> 24,421
<OTHER-SE> 100,631
<TOTAL-LIABILITIES-AND-EQUITY> 1,213,990
<INTEREST-LOAN> 62,448
<INTEREST-INVEST> 14,450
<INTEREST-OTHER> 2,754
<INTEREST-TOTAL> 79,652
<INTEREST-DEPOSIT> 23,496
<INTEREST-EXPENSE> 34,593
<INTEREST-INCOME-NET> 45,059
<LOAN-LOSSES> 712
<SECURITIES-GAINS> (4)
<EXPENSE-OTHER> 37,592
<INCOME-PRETAX> 18,354
<INCOME-PRE-EXTRAORDINARY> 18,354
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,612
<EPS-PRIMARY> 1.42
<EPS-DILUTED> 1.42
<YIELD-ACTUAL> 4.34
<LOANS-NON> 2,705
<LOANS-PAST> 806
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 11,597
<ALLOWANCE-OPEN> 6,578
<CHARGE-OFFS> 493
<RECOVERIES> 248
<ALLOWANCE-CLOSE> 7,045
<ALLOWANCE-DOMESTIC> 7,045
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
<PAGE>
ADDITIONAL EXHIBITS Exhibit 99
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
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from________to _______
Commission File Number 1-10602
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below.
The Bank of Louisville Employee Stock Ownership Plan
B. Name of the issuer of the securities held pursuant to
the plan and the address of its principal executive
office.
Mid-America Bancorp
500 West Broadway
Louisville, Kentucky 40202
REQUIRED INFORMATION
Financial statements and schedules prepared in accordance with the
financial reporting requirements of ERISA will be filed under cover of
Form SE within 180 days of the Plan's year-end (December 31, 1994).
