<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
FORM 8-K/a
(Amendment No. 2)
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) of the
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): December 14, 1995
BT Financial Corporation
(Exact name of registrant as specified in its charter)
Pennsylvania 0-12377 25-1441348
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
551 Main Street, Johnstown, Pennsylvania 15901
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 814-532-3801
Page 1 of 32 pages.
Exhibit Index appears on page 32.
<PAGE>
This Form 8-K/a (Amendment No. 2) amends and restates Item 7 of
the Form 8-K dated December 14, 1995, in its entirety as follows:
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(a) Financial statements of businesses acquired.
Report of Independent Auditors
Balance Sheet as of December 31, 1994
Statement of Income for the year ended December 31, 1994
Statement of Changes in Shareholders' Equity for the year
ended December 31, 1994
Statement of Cash Flows for the year ended December 31, 1994
Notes to Financial Statements as of December 31, 1994
Unaudited Balance Sheet as of September 30, 1995
Unaudited Statement of Income for the nine months ended
September 30, 1995 and the nine months ended September 30,
1994
Unaudited Statement of Changes in Shareholders' Equity for
the nine months ended September 30, 1995 and the nine months
ended September 30, 1994
Unaudited Statement of Cash Flows for the nine months ended
September 30, 1995 and the nine months ended September 30,
1994
2
<PAGE>
Report of Independent Auditors
To the Board of Directors
The Huntington National Bank of Pennsylvania
We have audited the accompanying balance sheet of The Huntington National
Bank of Pennsylvania, a wholly-owned subsidiary of Huntington Bancshares
West Virginia, Inc., as of December 31, 1994, and the related statement of
income, changes in shareholders' equity, and cash flows for the year then
ended. These financial statements are the responsibility of the Bank's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audit 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 audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of The Huntington National
Bank of Pennsylvania at December 31, 1994, and the results of its
operations and its cash flows for the year then ended in conformity with
generally accepted accounting principles.
Columbus, Ohio
February 9, 1996 Ernst & Young LLP
3<PAGE>
The Huntington National Bank of Pennsylvania
Balance Sheet
December 31, 1994
(In thousands)
ASSETS
Cash and due from banks $ 2,370
Securities available-for-sale, at fair
value (amortized cost of $28,562) 28,020
Investment securities, at amortized cost
(fair value approximates $1,779) 1,772
Total loans 80,788
Allowance for possible loan losses (1,086)
_______
Net loans 79,702
Other assets 4,342
Total assets $116,206
========
4<PAGE>
LIABILITIES AND SHAREHOLDERS' EQUITY
Demand deposits:
Noninterest bearing $ 12,964
Interest bearing 17,382
Savings deposits 13,375
Certificates of deposit of $100,000 or more 1,723
Other time deposits 29,466
________
Total deposits 74,910
Short-term borrowings 23,862
Other liabilities 2,144
________
Total liabilities 100,916
Shareholders' equity:
Common stock, $5 par value (1,000,000 shares
authorized; 1,000,000 shares issued) 5,000
Capital surplus 6,500
Net unrealized losses on securities (353)
available-for-sale
Retained earnings 4,143
________
Total shareholders' equity 15,290
________
Total liabilities and shareholders' equity $116,206
========
See accompanying notes.
_______________________
5<PAGE>
The Huntington National Bank of Pennsylvania
Statement of Income
Year ended December 31, 1994
(In thousands)
Interest income:
Interest and fees on loans $6,358
Interest and dividends on:
Obligations of U.S. Government, its agencies
and other securities 2,025
Obligations of states and political subdivisions 80
______
Total interest income 8,463
______
Interest expense:
Interest on deposits 2,302
Interest on short-term borrowings 756
______
Total interest expense 3,058
______
Net interest income 5,405
Provision for loan losses 139
______
Net interest income after provision for loan losses 5,266
______
Other income:
Service charges on deposit accounts 338
Gain on sales of securities 56
Other 141
______
535
------
Other expense:
Salaries and employee benefits 1,398
Amortization of core deposit intangible 215
Data processing 213
FDIC insurance 185
Net occupancy expense of bank premises 153
Furniture and equipment expense 147
Other taxes 144
Other 592
______
3,047
______
Income before federal income taxes 2,754
Federal income taxes 962
______
Net income $1,792
======
See accompanying notes.
_______________________
6<PAGE>
<TABLE>
The Huntington National Bank of Pennsylvania
Statement of Changes in Shareholders' Equity
For the year ended December 31, 1994
(Dollars in thousands, except per share data)
<CAPTION>
Unrealized
Holding Gain
(Loss) on
Available
Common Stock Capital for-Sale Retained
Shares Amount Surplus Securities, Net Earnings Total
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1994 1,000,000 $5,000 $6,500 $ - $3,221 $14,721
Change in accounting method for
securities - - - 727 - 727
Net income - - - - 1,792 1,792
Cash dividends, at $.87 per share - - - - (870) (870)
Change in net unrealized losses on
securities available-for-sale - - - (1,080) - (1,080)
--------- ------ ------ ------- ------ -------
Balance, December 31, 1994 1,000,000 $5,000 $6,500 $ (353) $4,143 $15,290
========= ====== ====== ======= ====== =======
</TABLE>
See accompanying notes.
_______________________
7
<PAGE>
The Huntington National Bank of Pennsylvania
Statement of Cash Flows
Year ended December 31, 1994
(In thousands)
OPERATING ACTIVITIES
Net income $ 1,792
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 139
Provision for depreciation and amortization 379
Realized investment security gains (56)
Changes in assets and liabilities:
Increase in other assets (47)
Increase in other liabilities 221
_______
Net cash provided by operating activities 2,428
=======
INVESTING ACTIVITIES
Proceeds from sales of securities
available-for-sale 9,701
Proceeds from maturities and calls of
securities available-for-sale 4,343
Net increase in loans (17,703)
Purchases of premises and equipment, net (31)
_______
Net cash used for investing activities (3,690)
-------
FINANCING ACTIVITIES
Net decrease in deposits (3,177)
Net increase in short-term borrowings 2,569
Cash dividends paid (870)
_______
Net cash used for financing activities (1,478)
_______
Decrease in cash and cash equivalents (2,740)
Cash and cash equivalents at beginning of year 5,110
_______
Cash and cash equivalents at end of year $ 2,370
=======
See accompanying notes.
_______________________
8<PAGE>
The Huntington National Bank of Pennsylvania
Notes to Financial Statements
December 31, 1994
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION
The Huntington National Bank of Pennsylvania (the Bank) is a wholly-owned
subsidiary of Huntington Bancshares West Virginia, Inc. (HBWV). HBWV is a
wholly-owned subsidiary of Huntington Bancshares Incorporated (HBI). The
Bank is headquartered in Uniontown, Pennsylvania. The Bank is engaged in
general commercial banking, primarily in Western Pennsylvania. The Bank
also provides the following principal services: the acceptance of deposits
for demand, savings, and time accounts; commercial, industrial, consumer
and real estate lending, including installment loans, credit cards and home
equity lines of credit; cash management; safe deposit operations;
electronic funds transfers; and a variety of additional banking-related
services.
The following is a summary of significant accounting policies followed in
the preparation of the financial statements:
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
SECURITIES
Effective January 1, 1994, the Bank adopted Statement of Financial
Accounting Standards No. 115 (FAS 115), "Accounting for Certain Investments
in Debt and Equity Securities." Debt securities that the Bank has both the
positive intent and ability to hold to maturity are classified as
investments and are carried at amortized cost. Securities purchased with
the intention of recognizing short-term profits are placed in the trading
account and carried at fair value. Securities not classified as
investments or trading are designated available-for-sale and carried at
fair value. Unrealized gains and losses on securities classified as
available-for-sale are carried as a separate component of shareholders'
equity. Unrealized gains and losses on securities classified as trading
are reported in earnings. The amortized cost of specific securities sold
is used to compute the realized gains or losses.
9<PAGE>
The Huntington National Bank of Pennsylvania
Notes to Financial Statements (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PREMISES AND EQUIPMENT
Premises and equipment are stated at cost, less accumulated depreciation.
Depreciation is generally provided on the straight-line method over the
estimated useful lives of the related assets. Upon the sale or other
disposal of the assets, the cost and related accumulated depreciation are
removed from the accounts and the resulting gain or loss is recognized.
Maintenance and repairs are charged to expense as incurred while
improvements are capitalized.
CORE DEPOSIT INTANGIBLES
Amortization of core deposit intangibles is provided for on an accelerated
amortization method.
INCOME RECOGNITION ON LOANS
Income earned by the Bank is recognized principally on the accrual basis of
accounting. Significant loan origination fees are amortized over the life
of the loans using the interest method on a loan by loan basis, and
origination costs are deferred and amortized if material.
The Bank suspends the accrual of interest when, in management's opinion,
the collection of all or a portion of interest or principal has become
doubtful. When a loan is placed on nonaccrual, the Bank charges all
previously accrued and unpaid interest against income. In future periods,
interest will be included in income to the extent received only if complete
principal recovery is reasonably assured.
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is based on management's judgment as to the
level which is considered appropriate to absorb potential losses inherent
in the loan portfolio. This judgment encompasses an analysis of individual
loans, historical loss experience, portfolio trends, consideration of local
economic factors, changes in the composition and volume of the portfolio
and various other factors. The allowance is increased by provisions
charged to earnings and reduced by charge-offs, net of recoveries.
10<PAGE>
The Huntington National Bank of Pennsylvania
Notes to Financial Statements (continued)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
ALLOWANCE FOR LOAN LOSSES (CONTINUED)
In May 1993, the FASB issued Statement No. 114, "Accounting by Creditors
for Impairment of a Loan." This Statement applies to financial statements
for fiscal years beginning after December 15, 1994. It requires that
impaired loans be measured based upon the present value of expected future
cash flows discounted at the loan's effective interest rate or, as a
practical expedient, at the loan's observable market price or the fair
value of the collateral if the loan is collateral dependent. The adoption
of the Statement occurred in the first quarter of 1995 and did not have a
material effect on the Bank's financial statements.
CASH EQUIVALENTS
Cash and cash equivalents include cash, cash items and amounts due from
banks.
INCOME TAXES
The amounts provided for income taxes are based on the amount of current
and deferred taxes payable (or refundable) at the date of the financial
statements. A deferred tax liability (or asset) is recognized for
temporary differences that will result in net taxable or deductible amounts
in future years when the temporary differences reverse.
2. RESTRICTIONS ON CASH AND DUE FROM BANKS
The Bank is required to maintain a reserve balance with the Federal Reserve
Bank. The required reserve balance was approximately $496,000 at December
31, 1994. No other compensating balance arrangements were in existence at
year end.
11<PAGE>
The Huntington National Bank of Pennsylvania
Notes to Financial Statements (continued)
3. SECURITIES
The amortized cost and estimated fair values of securities at December 31
are as follows (in thousands):
Gross Gross
Unrealized Unrealized Estimated
Amortized Holding Holding Fair
Cost Gains Losses Value
Securities Available-
for-Sale
Obligations of U.S.
Treasury and other $18,827 $13 $462 $18,378
U.S. Government
agencies
U.S. Government agencies'
mortgage-backed 9,390 42 135 9,297
securities
Federal Reserve Bank stock 345 345
_______ ___ ____ _______
Total $28,562 $55 $597 $28,020
Investment Securities
Obligations of states and
political subdivisions $1,772 $11 $4 $1,779
The amortized cost and fair value of securities are shown below by
contractual maturity at December 31, 1994 (in thousands):
Investment Securities Securities Available
for Sale
Amortized Amortized
Cost Fair Value Cost Fair Value
Within one year $1,000 $995 $1,000 $1,007
One through five years 18,172 17,716
Five through ten years 258 266
Over ten years 514 518
Mortgage-backed securities 9,390 9,297
______ ______ _______ _______
$1,772 $1,779 $28,562 $28,020
12<PAGE>
The Huntington National Bank of Pennsylvania
Notes to Financial Statements (continued)
3. SECURITIES (CONTINUED)
Securities having a book value of $12,742,000 at December 31, 1994 were
pledged to collateralize government deposits in accordance with federal and
state requirements and to secure repurchase agreements sold.
Gross gains and losses of approximately $88,000 and $32,000, respectively,
were recognized during 1994 on sales of available-for-sale securities.
As discussed in Note 1, the Bank adopted SFAS No. 115 as of January 1,
1994, and investment securities were classified based on the Bank's current
intent. The impact of adopting the new standard resulted in an increase in
the carrying value of investments by $1,119,000 to reflect the unrealized
holding gain at January 1, 1994 for securities classified as
available-for-sale. Additionally, shareholders' equity was increased by
$727,000 to reflect the unrealized holding gain as a separate component of
shareholders' equity, net of taxes.
4. LOANS
The composition of the loan portfolio at December 31, 1994 (in thousands)
is as follows:
Commercial $24,348
Real estate - residential 12,893
Consumer 43,547
_______
Total loans $80,788
In the normal course of business, the Bank makes various commitments that
are not presented in the accompanying financial statements. As of December
31, 1994, the Bank had unfunded commitments to extend credit of $4,161,000.
These arrangements have credit risk essentially the same as that involved
in extending loans to customers and are subject to the Bank's normal credit
policies. Collateral may be required based upon management's assessment of
the credit worthiness of the customer. The Bank does not anticipate any
material losses as a result of these commitments.
13<PAGE>
The Huntington National Bank of Pennsylvania
Notes to Financial Statements (continued)
5. ALLOWANCE FOR POSSIBLE LOAN LOSSES
Activity in the allowance for possible loan losses in 1994 (in thousands)
is summarized as follows:
Balance, January 1 $1,122
Provision for loan losses 139
Losses charged to the reserve (240)
Recoveries 65
______
Balance, December 31 $1,086
6. PREMISES AND EQUIPMENT
The major categories of premises and equipment and accumulated depreciation
are summarized at December 31, 1994 (in thousands) as follows:
Land $ 110
Buildings 1,018
Equipment, furniture and fixtures 888
______
2,016
Less accumulated depreciation (915)
______
$1,101
Depreciation expense amounted to $164,000 for the year ended December 31,
1994.
7. SHORT-TERM BORROWINGS
Short-term borrowings at December 31, 1994 (in thousands) are as follows:
Federal funds purchased (from HBWV) $17,575
Securities sold under agreement to repurchase 6,287
_______
Total short-term borrowings $23,862
The weighted average interest rate for all short-term borrowings at
December 31, 1994 was 5.2%.
Interest paid on deposits and short-term borrowings during 1994 was
approximately $3,061,000.
14<PAGE>
The Huntington National Bank of Pennsylvania
Notes to Financial Statements (continued)
8. FEDERAL INCOME TAXES
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes.
Significant components of the Bank's deferred tax assets and liabilities at
December 31, 1994 (in thousands) are as follows:
Deferred tax assets:
Allowance for loan losses $ 380
Unrealized holding loss on securities 190
Other 48
_____
Total deferred tax assets 618
Deferred tax liabilities:
Net deferred loan fees 266
Fixed assets, principally due to 53
depreciation
Other 66
Total deferred tax liabilities 385
_____
Net deferred tax assets $ 233
The components of the provision for federal income taxes in 1994 (in
thousands) are shown below:
Currently payable $ 935
Deferred 27
_____
Total $ 962
The following is a reconcilement of income tax expense to the amount
computed at the statutory rate of 35% for the year ended December 31, 1994
(in thousands):
Pre-tax income computed at the statutory rate $ 964
Increase (decrease):
Tax-exempt interest income (34)
Core deposit intangible 30
Other - net 2
_____
Provision for income taxes $ 962
15<PAGE>
The Huntington National Bank of Pennsylvania
Notes to Financial Statements (continued)
8. FEDERAL INCOME TAXES (CONTINUED)
The Bank is included in the consolidated federal income tax return of HBI.
In accordance with an agreement with HBI, the Bank provides and remits
income taxes to or receives an income tax benefit from HBI. Income taxes
paid to HBI in 1994 were $938,000.
9. DIVIDEND RESTRICTIONS
Bank regulators limit the amount of dividends a subsidiary bank can declare
in any calendar year without obtaining prior approval. At December 31,
1994, approximately $1,675,000 of the total shareholders' equity of the
bank is available for the payment of dividends to HBWV, without approval by
the applicable regulatory authorities.
10. RELATED PARTY TRANSACTIONS
Employees of the Bank participate in the employee benefit programs of HBI.
The Bank was charged $135,000 during 1994 for these benefits. In addition,
HBI, HBWV and related entities provide certain operational and
administrative support to the Bank which includes investment and payroll
services. The Bank was charged $214,000 for these services during 1994.
11. SUBSEQUENT EVENT
As of September 1, 1995, HBWV entered into an agreement with BT Financial
Corporation for the sale of the Bank effective December 14, 1995.
16<PAGE>
The interim unaudited financial statements have been prepared in accordance
with generally accepted accounting principles. Certain financial information,
which is normally included in the financial statements prepared in accordance
with generally accepted accounting principles, but which is not required for
interim reporting purposes, has been condensed or omitted. In preparing the
interim financial statements, Management is required to make estimates and
assumptions that affect the reported amounts of assets and liabilities as of
the date of the balance sheet and revenues and expenses for the period.
Actual results could differ significantly from those estimates.
In the opinion of Management, the accompanying interim unaudited financial
statements contain all adjustments (consisting of normal recurring
adjustments) necessary to present fairly the Bank's financial position as of
September 30, 1995, and the results of operations and its cash flows for the
nine months then ended. The results of operations for the periods shown are
not necessarily indicative of the results expected for the year ending
December 31, 1995. The accompanying interim unaudited financial statements
should be read in conjunction with the financial statements and notes thereto
included in the Bank's 1994 Annual Report.
17<PAGE>
The Huntington National Bank of Pennsylvania
Balance Sheet
September 30, 1995
(Unaudited)
(In thousands)
ASSETS
Cash and due from banks $ 2,526
Securities available-for-sale, at fair value
(amortized cost of $22,566 at September 30, 1995) 22,808
Investment securities, at amortized cost (fair
value approximates $271 at September 30, 1995) 258
Federal Funds Sold 3,220
Total loans 74,527
Allowance for possible loan losses (1,054)
________
Net loans 73,473
Other assets 3,894
Total assets $106,179
========
18<PAGE>
LIABILITIES AND SHAREHOLDERS' EQUITY
Demand deposits:
Noninterest bearing $ 13,138
Interest bearing 16,856
Savings deposits 12,050
Certificates of deposit of $100,000 or more 3,443
Other time deposits 35,095
________
Total deposits 80,582
Short-term borrowings 8,318
Other liabilities 1,014
________
Total liabilities 89,914
Shareholders' equity:
Common stock, $5 par value (1,000,000 shares
authorized; 1,000,000 shares issued) 5,000
Capital surplus 6,500
Net unrealized losses on securities 157
available-for-sale
Retained earnings 4,608
________
Total shareholders' equity 16,265
________
Total liabilities and shareholders' equity $106,179
========
19<PAGE>
The Huntington National Bank of Pennsylvania
Statement of Income
(Unaudited)
(In thousands)
Sept. 30 Sept. 30
1995 1994
-------- --------
Interest income:
Interest and fees on loans $5,365 $4,601
Interest and dividends on:
Obligations of U.S. Government, its
agencies and other securities 1,280 1,588
Obligations of states and political 40 60
subdivisions
Federal Funds Sold 41 -
______ ______
Total interest income 6,726 6,249
______ ______
Interest expense:
Interest on deposits 2,087 1,728
Interest on short-term borrowings 704 477
______ ______
Total interest expense 2,791 2,205
______ ______
Net interest income 3,935 4,044
Provision for loan losses 360 88
______ ______
Net interest income after provision
for loan losses 3,575 3,956
______ ______
Other income:
Service charges on deposit accounts 237 251
Gain on sales of securities (9) 56
Other 74 129
______ ______
302 436
______ ______
Other expense:
Salaries and employee benefits 908 1,061
Amortization of core deposit intangible 150 161
Data processing 125 62
FDIC insurance 81 142
Net occupancy expense of bank premises 112 119
Furniture and equipment expense 105 107
Other taxes 117 116
Other 418 516
______ ______
2,016 2,284
______ ______
Income before federal income taxes 1,861 2,108
Federal income taxes 646 736
______ ______
Net income $1,215 $1,372
====== ======
20<PAGE>
<TABLE>
The Huntington National Bank of Pennsylvania
Statement of Changes in Shareholders' Equity
(Unaudited)
(Dollars in thousands, except per share data)
<CAPTION>
Unrealized
Holding Gain
(Loss) on
Available
Common Stock Capital for-Sale Retained
Shares Amount Surplus Securities, Net Earnings Total
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1994 1,000,000 $5,000 $6,500 $ 0 $3,221 $14,721
Net income - - - - 1,372 1,372
Cash dividends, at $.64 per share - - - - (642) (642)
Change in net unrealized losses on
securities available-for-sale - - - (118) - (118)
_________ ______ ______ _______ ______ _______
Balance, September 30, 1994 1,000,000 $5,000 $6,500 $ (118) $3,951 $15,333
========= ====== ====== ======= ====== =======
</TABLE>
<TABLE>
<CAPTION>
Unrealized
Holding Gain
(Loss) on
Available
Common Stock Capital for-Sale Retained
Shares Amount Surplus Securities, Net Earnings Total
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1995 1,000,000 $5,000 $6,500 $ (353) $4,143 $15,290
Net income - - - - 1,215 1,215
Cash dividends, at $.87 per share - - - - (750) (750)
Change in net unrealized losses on
securities available-for-sale - - - 510 - 510
_________ ______ ______ _______ ______ _______
Balance, September 30, 1995 1,000,000 $5,000 $6,500 $ (157) $4,608 $16,265
========= ====== ====== ======= ====== =======
</TABLE>
21<PAGE>
The Huntington National Bank of Pennsylvania
Statement of Cash Flows
(Unaudited)
(In thousands)
Sept. 30 Sept. 30
1995 1994
-------- --------
OPERATING ACTIVITIES
Net income $ 1,215 $ 1,372
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 360 88
Provision for depreciation and amortization 307 329
Realized investment security losses (gains) 9 (56)
Changes in assets and liabilities:
Decrease in other assets 193 510
Increase (decrease) in other liabilities (1,404) 341
_______ _______
Net cash provided by operating activities 680 2,584
_______ _______
INVESTING ACTIVITIES
Proceeds from sales of securities available-for-sale 9,996 9,642
Proceeds from maturities and calls of securities
available-for-sale 5,937 3,568
Purchase of securities available for sale (9,989) -
Proceeds from maturities and calls of securities
held-to-maturity 1,510 -
Net increase in Federal Funds (3,220) -
Net decrease (increase) in loans 5,869 (14,532)
Purchases of premises and equipment, net (5) (33)
_______ _______
Net cash used for investing activities 10,098 (1,355)
_______ _______
FINANCING ACTIVITIES
Net increase (decrease) in deposits 5,672 (1,874)
Net decrease in short-term borrowings (15,544) (765)
Cash dividends paid (750) (642)
_______ _______
Net cash used for financing activities (10,622) (3,281)
_______ _______
Increase (decrease) in cash and cash equivalents 156 (2,052)
Cash and cash equivalents at beginning of year 2,370 5,110
_______ _______
Cash and cash equivalents at end of year $ 2,526 $ 3,058
======= =======
22
<PAGE>
(b) Pro forma financial information.
On December 14, 1995, the Company consummated the Acquisition of
100% of the outstanding shares of common stock of the Bank pursuant to the
Agreement dated as of September 1, 1995, by and among the Company, the Bank
and Huntington. The aggregate Purchase Price was $25,500,000.00, and was
determined on the basis of arms' length negotiations between
representatives of the Company and Huntington. Immediately thereafter, the
Bank was merged (the "Bank Merger") with and into Fayette, with Fayette as
the resulting institution, pursuant to the Agreement and Plan of Merger
made by and between Fayette and the Bank.
The unaudited pro forma condensed combined financial information
set forth below gives effect to the Acquisition and Bank Merger under the
purchase accounting method. The pro forma condensed summary statement of
income treats the Acquisition and Bank Merger as if they had been
consummated at January 1, 1994, and the pro forma condensed combined
summary balance sheet treats the Acquisition and Bank Merger as if they had
been consummated on September 30, 1995.
The unaudited pro forma combined condensed consolidated financial
statements should be read in conjunction with the accompanying notes and
the consolidated financial statements and notes thereto of The Huntington
National Bank of Pennsylvania as of December 31, 1994.
The pro forma financial statements may not be indicative of the
results that actually would have occurred if the Acquisition and Bank
Merger had been effective on the dates indicated or which may be obtained
in the future.
Pro Forma Balance Sheet as of September 30, 1995
Pro Forma Statement of Income for the nine months ended September
30, 1995
Pro Forma Statement of Income for the year ended December 31,
1994
23
<PAGE>
BT FINANCIAL CORPORATION
HUNTINGTON NATIONAL BANK
PRO FORMA BALANCE SHEET
(In Thousands)
BT HNB
9/30/95 9/30/95 ADJUSTMENTS CONSOLIDATED
_______ _______ ___________ ____________
ASSETS
Cash and Due from
Banks 41,098 2,526 (250) (1) 43,374
__________ ________ ________ __________
Investment Securities 252,079 23,066 (13,000) (2) 262,145
__________ _________ ________ __________
Money Market
Investments 1,628 3,220 0 4,848
__________ ________ ________ __________
Loans 776,412 74,527 505 (3) 851,444
Reserve for Loan
Losses (7,508) (1,054) 0 (8,562)
__________ _________ ________ __________
NET-LOANS 768,904 73,473 505 842,882
__________ _________ ________ __________
Fixed Assets 24,766 996 0 25,762
Other Assets 21,925 2,898 9,286 (4) 34,109
__________ ________ ________ __________
TOTAL ASSETS 1,110,400 106,179 (3,459) 1,213,120
__________ ________ ________ __________
LIABILITIES
Demand Deposits 123,979 13,138 0 137,117
Time Deposits 831,841 67,444 0 899,285
__________ ________ ________ __________
TOTAL DEPOSITS 955,820 80,582 0 1,036,402
__________ ________ ________ __________
Short-term Borrowings 42,174 8,318 0 50,492
Long Term Debt 7,480 0 12,500 (5) 19,980
Other Liabilities 6,240 1,014 306 (6) 7,560
__________ ________ ________ __________
24<PAGE>
TOTAL LIABILITIES 1,011,714 89,914 12,806 1,114,434
__________ ________ ________ __________
Common Stock 19,133 5,000 (5,000) 19,133
Surplus 33,320 6,500 (6,500) 33,320
Retained Earnings 46,474 4,608 (4,608) 46,474
Net Unrealized
Gains/Losses on
Securities Available
for Sale (241) 157 (157) (241)
__________ ________ ________ __________
TOTAL CAPITAL 98,686 16,265 (16,265) (7) 98,686
__________ ________ ________ __________
TOTAL LIABILITIES
AND CAPITAL 1,110,400 106,179 (3,459) 1,213,120
========== ======== ======== ==========
(1) To reflect legal, accounting and other acquisition costs.
(2) To reflect the sale of $13 million of securities to fund portion of
cash purchase.
(3) To reflect market value adjustment of Huntington loan portfolio.
(4) To reflect goodwill and acquisitions costs. Goodwill represents the
excess of the purchase price for Huntington over the value of the net
assets acquired. Composition of the $9,156 is as follows:
Increase in term debt (Note 5) 12,500
Acquisition costs (Note 1) 250
Sale of securities (Note 2) 13,000
Increase in other liabilities (Note 6) 306
______________
26,056
Increase in loan portfolio (Note 3) (505)
Decrease in shareholders' equity (Note 7) (16,265)
______________
9,286
==============
(5) To record term debt.
(6) To reflect $157 tax liability associated with loan portfolio purchase
adjustments and $200 liability and $70 tax credit associated with an
accounting adjustment for auto dealers' share of interest not accrued
properly at acquisition date.
(7) To eliminate Huntington capital due to all cash purchase.
25<PAGE>
BT FINANCIAL CORPORATION
HUNTINGTON NATIONAL BANK
PRO FORMA STATEMENT OF INCOME
(In thousands, except share and per share data)
BT HNB PRO FORMA
9/30/95 9/30/95 ADJUSTMENTS CONSOL.
_______ _______ ___________ _______
INTEREST INCOME
Loans 48,243 5,365 (15) (1) 53,593
Investment Securities 12,146 1,320 (654) (2) 12,812
Deposits with Banks 249 0 0 249
Federal Funds Sold 125 41 0 166
______ _____ ______ ______
TOTAL INTEREST INCOME 60,763 6,726 (669) 66,820
______ _____ ______ ______
INTEREST EXPENSE
Deposits 23,226 2,087 0 25,313
Fed Funds Purch/Repurch
Agree. 1,035 704 0 1,739
Short-term Borrowings 149 0 0 149
Long-term Debt 507 0 680 (3) 1,187
______ _____ _______ ______
TOTAL INTEREST EXPENSE 24,917 2,791 680 28,388
______ _____ _______ ______
NET INTEREST INCOME 35,846 3,935 (1,349) 38,432
Losses on Loans 1,159 360 0 1,519
______ _____ _______ ______
NET INTEREST INCOME AFTER
LOSSES ON LOANS 34,687 3,575 (1,349) 36,913
______ _____ _______ ______
NON-INTEREST INCOME
Service Charges and Fees 3,603 237 0 3,840
Other 1,810 74 0 1,884
Gain/Loss on Sale of
Securities 49 (9) 0 40
______ ______ _______ ______
TOTAL NON-INTEREST INCOME 5,462 302 0 5,764
______ ______ _______ ______
26<PAGE>
NON-INTEREST EXPENSE
Salaries and Employee Benefits 14,336 908 0 15,244
Net Occupancy Expense 2,614 112 0 2,726
Furniture & Equipment Expense 2,121 105 0 2,226
Amortization of Intangible
Assets 849 150 414 (4) 1,413
Other Expense 7,668 741 0 8,409
______ ______ _______ ______
TOTAL NON-INTEREST EXPENSE 27,588 2,016 414 30,018
______ ______ _______ ______
INCOME BEFORE INCOME TAXES 12,561 1,861 (1,763) 12,659
Provision for Income Taxes 4,073 646 (472) (5) 4,247
______ ______ _______ ______
NET INCOME 8,488 1,215 (1,291) (6) 8,412
====== ======= ======= =======
Net Income Per Share 2.22 1.22 2.20
Weighted average shares
outstanding 3,826,581 1,000,000 3,826,581
(1) Amortization of loan purchase adjustments.
(2) To reflect reduction in interest income due to sale of $13 million of
investment securities and amortization of securities purchase
adjustments.
(3) Interest expense on $12.5 million term debt at average estimated rate
of 7.25%.
(4) Amortization of goodwill over 15 years and organization costs over 5
years.
(5) Tax effects of adjustments (1) through (3).
(6) Pro forma results do not include projected savings from the
centralization of various administrative functions and the closing of
the headquarters office.
27<PAGE>
BT FINANCIAL CORPORATION
HUNTINGTON NATIONAL BANK
PRO FORMA STATEMENT OF INCOME
(In thousands, except share and per share data)
BT HNB PRO FORMA
12/31/94 12/31/94 ADJUSTMENTS CONSOL.
________ ________ ___________ _______
INTEREST INCOME
Loans 55,984 6,358 (20) (1) 62,322
Investment Securities 16,020 2,105 (872) (2) 17,253
Deposits with Banks 698 0 0 698
Federal Funds Sold 537 0 0 537
______ ______ _______ _______
TOTAL INTEREST INCOME 73,239 8,463 (892) 80,810
______ ______ _______ _______
INTEREST EXPENSE
Deposits 24,817 2,302 0 27,119
Fed Funds Purch/Repurch
Agree. 636 756 0 1,392
Short-term Borrowings 130 0 0 130
Long-term Debt 629 0 906 1,535
______ ______ _______ _______
TOTAL INTEREST EXPENSE 26,212 3,058 906 (3) 30,176
______ ______ _______ _______
NET INTEREST INCOME 47,027 5,405 (1,798) 50,634
Losses on Loans 904 139 0 1,043
______ ______ _______ _______
NET INTEREST INCOME
AFTER LOSSES ON LOANS 46,123 5,266 (1,798) 49,591
______ ______ _______ _______
NON-INTEREST INCOME
Service Charges and Fees 4,550 338 0 4,888
Other 2,231 141 0 2,372
Gain/Loss on Sale of
Securities 193 56 0 249
______ ______ _______ _______
TOTAL NON-INTEREST INCOME 6,974 535 0 7,509
______ ______ _______ _______
28<PAGE>
NON-INTEREST EXPENSE
Salaries and Employee
Benefits 18,610 1,398 0 20,008
Net Occupancy Expense 3,433 153 0 3,586
Furniture & Equipment
Expense 2,641 147 0 2,788
Amortization of
Intangible Assets 1,275 215 552 (4) 2,042
Other Expense 11,560 1,134 0 12,694
______ ______ _______ _______
TOTAL NON-INTEREST
EXPENSE 37,519 3,047 552 41,118
______ ______ _______ _______
INCOME BEFORE INCOME
TAXES 15,578 2,754 (2,350) 15,982
Provision for Income
Taxes 4,672 962 (629) (5) 5,005
______ ______ _______ _______
NET INCOME 10,906 1,792 (1,721) (6) 10,977
====== ====== ======= =======
Net Income Per Share 2.85 1.79 2.87
Weighted average shares
outstanding 3,826,581 1,000,000 3,826,581
(1) Amortization of loan purchase adjustments.
(2) To reflect reduction in interest income due to sale of $13 million of
investment securities and amortization of securities purchase
adjustments.
(3) Interest expense on $12.5 million term debt at average estimated rate
of 7.25%.
(4) Amortization of goodwill over 15 years and organizational costs over 5
years.
(5) Tax effects of adjustments (1) through (3).
(6) Pro forma results do not include projected savings from the
centralization of various administrative functions and the closing of
the headquarters office.
29
<PAGE>
(c) Exhibits.
Exhibit No. Description
----------- -----------
2.1 Stock Purchase Agreement dated September 1, 1995
2.2 Agreement and Plan of Merger dated December 14,
1995
4.1 Loan Agreement dated December 14, 1995, between
Mellon Bank, N.A. and BT Financial Corporation
99.1 Press Release dated December 18, 1995
30
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this amendment to be signed on its
behalf by the undersigned hereunto duly authorized.
BT Financial Corporation
Date: February 27, 1996 By: /s/ John H. Anderson
-----------------------------
John H. Anderson
Chairman and Chief Executive Officer
31
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Sequential
- ----------- ----------- Page No.
----------
2.1 Stock Purchase Agreement Previously
dated September 1, 1995 Filed
2.2 Agreement and Plan of Previously
Merger dated December 14, 1995 Filed
4.1 Loan Agreement dated *
December 14, 1995, between
Mellon Bank, N.A. and BT
Financial Corporation
99.1 Press Release dated Previously
December 18, 1995 Filed
* Not filed. In accordance with paragraph (b)(4)(iii)(A) of Item 601 of
Regulation S-K, BT Financial Corporation hereby agrees to furnish a copy of
this instrument to the Commission upon request.
32
