SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1999
AMCORE Financial Security Plan
(Full title of the plan)
AMCORE FINANCIAL, INC.
(Name of issuer of the securities held pursuant to the plan)
501 Seventh Street, P.O. Box 1537
Rockford, Illinois 61110-0037
(address of principal executive office)
Index of Exhibits on Page 3 Page 1 of 18
<PAGE>
AMCORE FINANCIAL SECURITY PLAN
Item 1. Changes in the Plan
Forms S-8 Registration Statement under the Securities Act of 1933 filed with the
Securities and Exchange Commission on November 26, 1986, contained detailed
information concerning the AMCORE Financial Security Plan (Plan). On November
16, 1994, the Plan was amended to comply with certain provisions of the
Unemployment Compensation Act of 1992 and the Revenue Reconciliation Act of
1993. The Plan was also amended to eliminate the minimum hour requirement
necessary to share in employer contributions, update the hardship loan
provisions, and add the option for participants to invest their contributions in
AMCORE Financial, Inc. Common Stock, among other things. On August 23, 1996, the
Plan was amended to provide for: (a) the daily valuation of account balances
therein, and (b) full and immediate vesting for all participants terminating
employment on or after January 2, 1996.
Item 2. Changes in Investment Policy
There has been no change in the investment policy during 1999.
Item 3. Contributions under the Plan
Employer contributions made from 1995 through 1999 were $2,232,782, $3,234,114,
$2,482,430, $1,153,839, and $2,951,521 respectively.
Item 4. Participating Employees
There was a total of 1,508 employees participating in the Plan at December 31,
1999.
Item 5. Administration of the Plan
(a) The Plan is administered by AMCORE Financial, Inc. (Company). The Company's
duties as Plan Administrator are overseen by the Plan Administrative
Committee (Committee), which reports annually to the Company's Board of
Directors.
(b) Members of the Committee receive no compensation from the Plan.
Item 6. Custodian of Investments
(a) The amounts deposited by participants and contributed by the Company are
invested by AMCORE Investment Group, N.A. (AIG), f/k/a AMCORE Trust
Company, as Trustee of the Plan and, in that capacity, AIG has custody of
the Plan assets. AIG, a non-depository banking institution, is located at
501 Seventh Street, P.O. Box 1537, Rockford, Illinois 61110-0037.
(b) There was no compensation paid by the Plan to AIG as trustee during 1999.
(c) AIG is named insured under the Company's Financial Institution Bond in the
aggregate amount of $30,000,000 ($15,000,000 per occurrence), which covers,
among other things, loss through dishonest or fraudulent acts of employees
and loss of property through robbery, theft or forgery. It also maintains a
Fiduciary Responsibility Insurance Policy in the
2
<PAGE>
amount of $5,000,000, which specifically covers AIG's fiduciary
responsibility as Trustee and Custodian of the Plan.
Item 7. Reports to Participating Employees
Each of the Plan's participants receive a written report of the amount of their
deposit account and their respective company's contribution account as of the
close of each quarterly valuation period. These reports show the participant's
opening balance, their deposits, the Company's contribution on their behalf,
changes in value resulting from income, investment gains and losses, transfers,
withdrawls, and the balance as of the end of the period with respect to their
interest in each of the investment funds.
Item 8. Investment of Funds
(a) All of the securities and mutual fund units purchased by AIG, as trustee of
the Plan, are traded net of commissions. Consequently, total brokerage
commissions attributable to the Plan are not determinable.
(b) The Plan's trustee from time to time selects brokers and dealers to execute
transactions because of research services provided. Other factors, such as
obtaining the best price for a particular transaction and the overall
quality and reliability of the brokerage services made available, also
affect the selection of brokers and dealers. Since commissions paid by the
Plan trustee are individually negotiated in accordance with these several
variables, with only an indeterminate portion allocable to Plan securities,
the amount of transactions and related commissions attributable to research
services on behalf of the Plan are not determinable.
Item 9. Financial Statements and Exhibits
Page
----
INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statement 4
SCHEDULES
Schedule of Assets Held for Investment Purposes 10
ACCOUNTANT'S CONSENT
3
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
trustee (or other persons who administer the plan) have duly caused this annual
report to be signed by the undersigned thereunto duly authorized.
AMCORE FINANCIAL SECURITY PLAN
/s/ John R. Hecht
------------------------------------
John R. Hecht
Executive Vice President and Chief Financial Officer
for AMCORE Financial, Inc. Plan Administrator
Date: June 30, 2000
4
<PAGE>
AMCORE FINANCIAL SECURITY PLAN
Financial Statements
December 31, 1999 and 1998
(With Independent Auditors' Report Thereon)
<PAGE>
AMCORE FINANCIAL SECURITY PLAN
Table of Contents
Page
Independent Auditors' Report 1
Financial Statements:
Statements of Net Assets Available for Benefits 2
Statements of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4
Schedules
1 Schedule of Assets Held for Investment Purposes 10
2 Schedule of Reportable Transactions 11
<PAGE>
Independent Auditors' Report
To the Trustees and Participants
AMCORE Financial Security Plan:
We have audited the accompanying statements of net assets available for
benefits of the AMCORE Financial Security Plan (the Plan) as of December
31, 1999 and 1998, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements
are the responsibility of the Plan's trustees. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for benefits of the Plan
as of December 31, 1999 and 1998, and the changes in net assets available
for benefits for the years then ended in conformity with generally accepted
accounting principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The accompanying supplemental
schedules of assets held for investment purposes as of December 31, 1999
and reportable transactions for the year then ended are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements, but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. These
supplemental schedules are the responsibility of the Plan's trustees. The
supplemental schedules have been subjected to the auditing procedures
applied in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
/s/ KPMG LLP
Chicago, Illinois
May 19, 2000
<PAGE>
AMCORE FINANCIAL SECURITY PLAN
Statement of Net Assets Available for Benefits
December 31, 1999 and 1998
1999 1998
------------ ------------
Assets:
Investments at fair value (note 3) $106,431,013 89,526,891
Receivables:
Cash and cash equivalents 217,144 --
Employer contributions 93,033 100,932
Participant contributions 87,107 66,506
------------ ------------
Total receivables 397,284 167,438
------------ ------------
Net assets available for benefits $106,828,297 89,694,329
============ ============
See accompanying notes to financial statements.
2
<PAGE>
AMCORE FINANCIAL SECURITY PLAN
Statement of Changes in Net Assets Available for Benefits
For the Years ended December 31, 1999 and 1998
1999 1998
------------- ------------
Additions:
Additions to net assets attributed to:
Investment income:
Net appreciation in fair value
of investments (note 3) $ 5,765,467 4,887,847
Interest 288,946 297,647
Dividends 8,792,687 4,497,050
------------ ------------
14,847,100 9,682,544
------------ ------------
Contributions:
Employer 2,951,521 1,153,839
Participant:
Payroll withholding 2,660,014 3,422,038
Rollovers 1,192,456 161,870
------------ ------------
6,803,991 4,737,747
Transfer of assets from merged plans (note 9) 6,434,922 5,072,871
------------ ------------
Total additions 28,086,013 19,493,162
------------ ------------
Deductions:
Deductions from net assets attributed to:
Benefits paid to participants 10,792,006 6,347,967
Administrative expenses 160,039 19,178
------------ ------------
Total deductions 10,952,045 6,367,145
------------ ------------
Net increase 17,133,968 13,126,017
Net assets available for benefits:
Beginning of year 89,694,329 76,568,312
------------ ------------
End of year $106,828,297 89,694,329
============ ============
See accompanying notes to financial statements.
3
<PAGE>
AMCORE FINANCIAL SECURITY PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(1) Significant Accounting Policies
Financial Statement Presentation
Since the AMCORE Financial Security Plan (the Plan) is subject to
the Employee Retirement Income Security Act of 1974 (ERISA), the
Plan prepared its financial statements and schedules in accordance
with the financial reporting requirements of ERISA rather than in
accordance with Regulation S-X.
Valuation of Investments
If available, quoted market prices are used to value investments.
The Vintage funds are valued at quoted net asset values.
Participants' notes are valued at face value. Investment in AMCORE
Stable Asset Fund is valued at net asset value which is determined
based on the fair value of the underlying investments.
Security transactions are accounted for on a trade-date basis.
Dividend income is recorded on the ex-dividend date. Interest
income is accounted for on the accrual basis.
Payment of Benefits
Benefits are recorded when paid.
Accounting Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in
the financial statements and the accompanying notes. Actual
results could differ from those estimates.
New Accounting Standard
In 1999 the Plan adopted SOP 99-3 "Accounting for and Reporting of
Certain Defined Contribution Benefit Plan Investments and Other
Disclosure Matters," which revises the required financial
statement presentation and establishes new disclosure requirements
for defined contribution benefit plans. 1998 balances have been
reclassified in accordance with SOP 99-3.
(2) Plan Description
The following description of the Plan provides only general information.
Participants should refer to the Plan agreement for a more complete
description of the Plan's provisions.
General
The Plan is a defined contribution plan covering substantially all
employees of AMCORE Financial, Inc. (AFI) and participating
subsidiaries, who have completed one year of service and have
reached the age of 18. It is subject to the provisions of ERISA.
4 (Continued)
<PAGE>
AMCORE FINANCIAL SECURITY PLAN
Notes to Financial Statements
December 31, 1999 and 1998
Contributions
Participants may contribute up to 10% of their annual wages on a
pretax basis in 1999 and 5% in 1998. The employer will match the
participants' contributions up to 4% in 1999 and 1998,
respectively, of their wages with cash, which is used to purchase
AFI common stock. The maximum amount that an employee could
contribute in 1999 and 1998 was $10,000.
The employer contributes three percent of the participants' annual
wages each year to a basic retirement account; these funds are set
aside for retirement and, therefore, are not available for
participant loans.
Participant Accounts
Each participant's account is credited with the participant's
contributions and an allocation of the Employer's contribution and
Plan earnings. Allocations are based on participant earnings, as
defined. The benefit to which a participant is entitled is the
benefit that can be provided from the participant's vested
account. The Plan provides for a maximum contribution to a
participant's account in any plan year of the lesser of $30,000 or
25% of the participant's compensation.
Payment of Benefits
On termination of service, a participant may select one of several
payment options. Withdrawals by a participant are fully taxable,
except for the return of after tax contributions, if any.
Vesting
Participants are immediately vested in both their contributions
and that of the employer.
Investment Funds
The assets of the Plan are segregated and maintained in ten
separate fund accounts consisting of the Vintage U.S. Government
Obligation Fund, Vintage Limited Term Bond Fund, Vintage Equity
Fund, Vintage Balanced Fund, AMCORE Stable Asset Fund, Common
Stock Fund, Loan Fund, Vintage Aggressive Growth Stock Fund,
Employer Matching Contribution Stock Fund, and Contribution Fund.
Participants have the option to invest their account balance and
contributions to their respective account in all of these funds
except the Loan Fund, Employer Matching Contribution Stock Fund,
and Contribution Fund in increments of five percent of their
participating balance. Participants are limited to a maximum
contribution of ten percent to the Common Stock Fund. Participants
also have the option to change the allocation of their individual
participant's balance daily.
5 (Continued)
<PAGE>
AMCORE FINANCIAL SECURITY PLAN
Notes to Financial Statements
December 31, 1999 and 1998
The Plan provides that fund assets be invested as follows:
Vintage U.S. Government Obligation Fund investments consist of
U.S. government obligations, a money market mutual fund that
invests in U.S. government obligations, bonds, debentures,
commercial paper, bankers' acceptances, bank certificates of
deposit, and savings instruments.
Vintage Limited Term Bond Fund investments consist of a mutual
fund that invests in U.S. government obligations, bonds,
debentures, commercial paper, bankers' acceptances, mortgages,
and savings instruments which mature beyond one year.
Vintage Equity Fund investments consist of a mutual fund that
invests primarily in large capitalization equity securities.
Vintage Balanced Fund is a mutual fund that invests in a blend
of large capitalization equity and debt securities.
AMCORE Stable Asset Fund is a common trust fund comprising
primarily of investments in high quality fixed and variable
rate insurance company contracts, as well as short-term
investments. The Plan provides that a minimum of 50% of assets
of this fund can be liquidated in 30 days and the remainder
within 12 months.
AMCORE Common Stock Fund consists solely of AFI common stock,
which is traded in the over-the-counter market under the
symbol "AMFI". The employees have voting rights in all shares.
Temporarily, assets are held in a money market fund until the
AFI stock is purchased.
Participant loans are made to participants for hardship
reasons only such as: to prevent foreclosure, to pay college
tuition, to pay medical expenses not covered by insurance, and
for other unforeseeable hardships as approved by the
Committee.
Vintage Aggressive Growth Stock Fund consists of a mutual fund
that invests in relatively volatile small and
mid-capitalization equity securities that are poised for
above-average growth over the long term.
Employer Matching Contribution Stock Fund consists solely of
AFI common stock. The employees have voting rights in all
shares. Temporarily, assets are held in a money market fund
until the AFI stock is purchased. The employer contributes to
this fund in an amount equal to the pretax contributions made
each pay period since the preceding accounting date by
participants in the Plan.
Contribution Fund serves as a temporary account to accumulate
contributions to be allocated to the other funds. This fund
invests in money market instruments.
6 (Continued)
<PAGE>
AMCORE FINANCIAL SECURITY PLAN
Notes to Financial Statements
December 31, 1999 and 1998
(3) Investments
The following presents investments that represent five percent or more
of the Plan's net assets:
<TABLE>
<CAPTION>
December 31,
-------------------------
1999 1998
----------- -----------
<S> <C> <C>
Vintage Equity Fund, 2,041,854 and 1,786,538 shares, respectively $46,778,879 39,232,377
Employer Matching Contribution Stock Fund, AMCORE Financial, Inc. 16,937,670 13,430,115
common stock, 1,272,552 and 698,362 shares, respectively*
Vintage Aggressive Growth Stock Fund, 470,896 and 314,390
shares, respectively 8,730,411 5,593,002
Vintage Balanced Fund, 543,595 and 377,064 shares, respectively 8,637,723 5,980,233
AMCORE Stable Asset Common Trust Fund, 397,571 and 430,159 shares, 7,927,570 8,185,921
respectively
Vintage Limited Term Bond Fund, 747,041 and 767,712 shares, 7,208,949 7,746,217
respectively
Vintage U.S. Government Obligation Fund, 6,044,565 and 5,856,420
shares, respectively 6,044,565 5,856,420
=========== ===========
</TABLE>
*Nonparticipant directed
During 1999 and 1998, the Plan's investments (including gains and losses
on investments bought and sold, as well as held during the year)
appreciated in value by $5,765,467 and $4,887,847, respectively, as
follows:
1999 1998
---------- ----------
AMCORE Financial, Inc. common stock $ 859,022 (1,788,775)
Shares of mutual funds 3,976,052 6,305,431
Common Trust Fund 930,393 371,191
---------- ----------
$5,765,467 4,887,847
========== ==========
(4) Nonparticipant-Directed Investments
Information about the net assets and the significant components of the
change in net assets relating to the nonparticipant-directed investments
is as follows:
<TABLE>
<CAPTION>
December 31,
------------------------
1999 1998
----------- -----------
<S> <C> <C>
Net assets - Employer Matching Contribution Stock Fund,
AMCORE Financial, Inc. common stock $16,937,670 13,430,115
=========== ===========
</TABLE>
7 (Continued)
<PAGE>
AMCORE FINANCIAL SECURITY PLAN
Notes to Financial Statements
December 31, 1999 and 1998
<TABLE>
<CAPTION>
Years ended December 31,
---------------------------
1999 1998
----------- -----------
<S> <C> <C>
Changes in net assets:
Contributions $ 2,951,521 1,153,839
Net appreciation (depreciation) 1,755,953 (846,786)
Benefits paid to participants (1,181,429) (3,632)
Administrative expense (18,490) (819,876)
----------- -----------
$ 3,507,555 (516,455)
=========== ===========
</TABLE>
(5) Transactions with Related Party
All Plan investments are shares of mutual funds, a common trust fund,
and money market deposits which are managed by AMCORE Investment Group
N.A., Rockford, which is the trustee as defined by the Plan, and,
therefore, these transactions qualify as party-in-interest.
Certain costs of administering the Plan are paid by AMCORE Financial,
Inc. (Plan Sponsor), the sponsor. Administrative expenses totaled
$160,039 and $19,178 for the years ended December 31, 1999 and 1998.
(6) Plan Termination
Although it has not expressed any intent to do so, the employer has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
Plan termination, the net income or loss to the date of termination,
less any distribution expenses and liquidation costs, shall be
distributed proportionately to the participants' accounts and
participants will be entitled to receive the value of their accounts.
(7) Participant Loans
Participants are eligible to obtain loans from the Plan in the event of
financial hardship as defined by the Plan. The loans are limited to the
lesser of $50,000 or 50% of the accrued benefit of the participant under
the Plan, excluding the participant's accrued benefit attributable to
the basic retirement account. Participants' loans are charged interest
at a rate which is based on prime at the date of the loan and is fixed
for the life of the loan. The loans are collateralized by the
participants' vested interest in the Plan.
(8) Income Tax Status
The Internal Revenue Service has determined and informed the employer by
letter dated April 28, 1995 that the Plan and related trust are designed
in accordance with applicable sections of the Internal Revenue Code
(IRC). The Internal Revenue Service has also determined and informed the
Company by a letter dated April 28, 1995, that the Plan is qualified and
trust established under the Plan is tax-exempt, under applicable
sections of the Internal Revenue Code. The Plan administrator believes
that the Plan is designed and currently being operated in compliance
with the applicable requirements of the IRC.
8 (Continued)
<PAGE>
(9) Transfer of Assets from Merged Plan
On July 6, 1998 the assets of the First National Bancorp, Inc. Profit
Sharing and 401(k) plan were merged with and into the Plan. The First
National Bancorp, Inc. Profit Sharing and 401(k) plan was administered
by First National Bancorp, Inc., a company acquired by AFI during
1997.
On March 5, 1999 the assets of the IMG Money Purchase Plan and the IMG
Employee Stock Ownership Plan were merged with and into the Plan. The
IMG Money Purchase Plan and the IMG Employee Stock Ownership Plan were
administered by IMG, a company acquired by AFI during 1998.
On June 30, 1999 the assets of the Baraboo Federal Bank, FSB 401(k)
Profit Sharing Plan were merged with and into the Plan. The Baraboo
Federal Bank, FSB 401(k) Profit Sharing Plan was administered by Baraboo
Federal, FSB, a company acquired by AFI during 1998.
On September 8, 1999 the assets of the Country Bank Shares Corp.
401(k) Profit Sharing Plan were merged with and into the Plan. The
Country Bank Shares Corp. 401(k) Profit Sharing Plan was administered
by Country Bank Shares Corp., a company acquired by AFI during 1997.
9
<PAGE>
Schedule 1
AMCORE FINANCIAL SECURITY PLAN
Schedule of Assets Held for Investment Purposes
December 31, 1999
<TABLE>
<CAPTION>
Number of
shares or
principal Current
Employer matching contribution amount Cost value
---------------------------------- --------- ------------ ----------
<S> <C> <C> <C>
Common stock -
AMCORE Financial, Inc. * 1,571,052 $ 20,056,763 20,910,704
------------ ----------
Common trust fund -
Stable Asset Common Trust Fund * 397,571 7,251,720 7,927,570
------------ ----------
Money market deposits 217,144 217,144 217,144
Mutual funds:
Vintage Limited Term Bond Fund * 747,041 7,391,578 7,208,949
Vintage Balanced Fund * 543,595 8,145,854 8,637,723
Vintage Equity Fund * 2,041,854 41,342,315 46,778,879
Vintage Aggressive Growth Stock Fund * 470,896 7,730,626 8,730,411
Vintage U.S. Government
Obligations Fund * 6,044,565 6,044,565 6,044,565
------------ ----------
Mutual funds 70,654,938 77,400,527
Participants' loans 192,212 192,212 192,212
------------ ----------
Total investments $ 98,372,777 106,648,157
============ ==========
</TABLE>
* Asterisk denotes an investment in an entity which is a "party-in-interest" as
defined by ERICA.
See accompanying independent auditors' report.
10
<PAGE>
Schedule 2
AMCORE FINANCIAL SECURITY PLAN
Schedule of Reportable Transactions
Year ended December 31, 1999
Category (i) - Transaction in the same security in excess of 5% of the fair
value of Plan assets at the beginning of the Plan year.
<TABLE>
<CAPTION>
Current
value of
asset on
Identity of Purchase Selling Cost of transaction
party involved Description of asset price cost asset date Gain
-------------- -------------------- -------- ------- ------- ----------- ----
<S> <C> <C> <C> <C> <C>
Vintage Equity Fund Mutual fund $ 6,422,134 -- 6,422,134 6,422,134 --
</TABLE>
Category (iii) - Series of transactions in the same security in excess of 5% of
the fair value of Plan assets at the beginning of the Plan year.
<TABLE>
<CAPTION>
Current
value of
asset on
Identity of Purchase Selling Cost of transaction
party involved Description of asset price cost asset date Gain
-------------- -------------------- -------- ------- ------- ----------- ----
<S> <C> <C> <C> <C> <C> <C>
Vintage Equity Fund Mutual fund $ -- 4,884,616 4,648,889 4,884,616 235,727
</TABLE>
See accompanying independent auditors' report
11
