SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) May 31, 1994
CBT CORPORATION
(Exact name of registrant as specified in charter)
Kentucky 0-16878 61-1030727
(State or other (Commission (IRS Emplo
jurisdiction of File Number) Identification No.)
incorporation)
333 Broadway Paducah, Kentucky 42001
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (502) 575-5100
Former name or former address, if changed since last report Not
Applicable
ITEM 1. CHANGES IN CONTROL OF REGISTRANT
None
ITEM 2. ACQUISITION AND DISPOSITION OF ASSETS
On May 31, 1994, CBT Corporation (CBT) of Paducah,
Kentucky acquired 100% of the outstanding shares of
common stock of BMC Bankcorp, Inc. (BMC), in a
merger transaction in which CBT Acquisition
Corporation, a wholly-owned subsidiary of CBT, merged
with and into BMC. In the transaction, accounted for as a
pooling ofinterests, BMC shareholders received two
shares of CBT common stock for each one share of
BMC common stock held. BMC is the parent bank
holding company of Bank of Marshall County, Benton,
Kentucky, Graves County Bank, Mayfield, Kentucky, and United
Commonwealth Bank, Federal Savings Bank, Murray, Kentucky. As
a result of the share exchange, CBT issued an additional
1,195,560 shares of common stock with no long-term
debt being incurred. The physical assets of the
three banking subsidiaries of BMC will continue to be used
by them for general banking purposes. Total consoldiated
assets of BMC at March 31, 1994, were $209.8 million. Total
net loans and deposits as of this same date were
$147.5 million and $184.6 million, respectively.
ITEM 3. BANKRUPTCY AND RECEIVERSHIP
None
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING
ACCOUNTANTS
None
ITEM 5. OTHER EVENTS
None
ITEM 6. RESIGNATION OF REGISTRANT'S DIRECTORS
None
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS
A. Financial Statements of Business Acquired
The financial statements of BMC, notes related thereto
and report of independent auditors thereon listed on the index to
Financial Statements on page 4 are filed as a part of this Report.
B. Pro Forma Financial Statements
The Pro forma consolidated financial statements of CBT
Corporation and notes related thereto listed on the
Index to Financial Statements of page 4 are filed as a
part of this Report.
C. Exhibits
The exhibits listed on the Exhibit Index on page ?? are
filed as a part of this report.
ITEM 8. CHANGES IN FISCAL YEAR
None
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
CBT CORPORATION
Date______________________ _____________________
John E. Sircy
Chief Operating Officer
and Executive Vice
President
EXHIBITS
ITEM REFERENCE
Independent Auditor's Report,
manually signed. 7
Consolidated Balance Sheet for the years
ended December 31, 1992 and 1993. 8
Consolidated Statements of Income for the
years ended December 31, 1991, 1992,
and 1993. 9
Consolidated Statements of Changes in
Stockholders' Equity for the years ended
December 31, 1991, 1992, and 1993. 10
Consolidated Statements of Cash Flows for the years
ended December 31, 1991, 1992, and 1993. 11
Notes to Consolidated Financial Statements for the
years ended December 31, 1991, 1992, and 1993. 12-27
Consolidated Balance Sheets for the periods ended
March 31, 1993 and 1994 (unaudited). 28
Consolidated Statements of Income for the periods
ended March 31, 1993 and 1994 (unaudited). 29
Pro-Forma Financial Statements of CBT Corporation:
Pro Forma Consolidated Balance Sheet for the period
ended March 31, 1994 (unaudited). 30
Pro Forma Statements of Income for
the years ended December 31, 1993, 1992, and
1991, and for the periods ended March 31, 1993
and 1994. 31-35
INDEPENDENT AUDITOR'S REPORT
WILLIAMS, WILLIAMS, & LENTZ
CERTIFIED PUBLIC ACCOUNTANTS
601 JEFFERSON - P.O. Box 2500
PADUCAH,KY 42002-2500
Board of Directors and Stockholders
BMC Bankcorp, Inc.
Benton, Kentucky
We have audited the accompanying consoldiated balance sheets of
BMC Bankcorp, Inc. and subsidiaries as of December 31, 1993 and
1992, and the related consolidated statements of income, changes
in stockholder's equity, and cash flows for each of the years in
the three-year period ended December 31, 1993. 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 BMC Bankcorp, Inc. and subsidiaries at December 31,
1993 and 1992, and the results of their operations and their cash
flows for each of the years in the three-year period ended
December 31, 1993, in comformity with generally accepted
accounting principles. As discussed in Note 2 to the
consolidated financial statements, the Company changed its method
of accounting for income taxes.
Williams, Williams, & Lentz
January 7, 1994, except for
Note 20, the date of which
is January 10, 1994
<TABLE>
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CONSOLIDATED BALANCE SHEETS
BMC BANKCORP
December 31
ASSETS 1993 1992
Cash and due from banks - Note 3 $5,154,667 $6,192,563
Federal funds sold 8,345,000 5,250,000
Deposit with Federal Home Loan Bank - 1,300,000
Total cash and cash equivalents 13,499,667 12,742,563
Investment securities (approximate
market
value of $42,189,000 and
$48,094,000
respectively) - Note 4 41,049,251 46,636,287
Loans - Note 5 146,460,259 121,513,157
Allowance for loan losses - Note 5 2,514,720 2,364,250
Loans - net 143,945,539 119,148,907
Investment in Federal Home Loan Bank 760,500 581,600
Stock
Bank premises and equipment, net - 3,239,543 2,828,404
Note 6
Other assets, net - Note 7 2,484,349 2,528,266
TOTAL ASSETS $204,978,849 $184,466,027
LIABILITIES
Non-interest bearing demand deposits $16,907,444 $15,589,560
Interest bearing deposits:
Demand (N.O.W.) 34,253,901 29,145,174
Savings (including money fund 22,870,083 19,323,154
accounts)
Time - Note 8 106,318,511 99,443,638
Total deposits 180,349,939 163,501,526
Accrued expenses & other liabilities 1,315,023 1,262,699
Note 9
Advances from Federal Home Loan Bank 1,426,008 -
Note 10
Term debt - Note 11 115,000 -
TOTAL LIABILITIES 183,205,970 164,764,225
Commitments and contingencies - Notes
15 and 16
STOCKHOLDERS' EQUITY
Preferred stock, no par value,
authorized - -
1,000,000 shares, none issued - -
Common stock, no par value,
authorized - -
1,000,000 shares, issued and
outstanding-679,885 and
681,095 shares at Dec 31, 1993 & 1,359,770 1,362,190
1992, respectively - Note 1
Capital surplus 3,885,060 3,891,974
Retained earnings - Note 18 17,900,077 15,819,666
Cost of 82,105 shares of common stock (1,372,028) (1,372,028)
in treasury
Total stockholders' equity 21,772,879 19,701,802
TOTAL LIABILITIES AND STOCKHOLDERS' $204,978,849 $184,466,027
EQUITY
See notes to consolidated financial
statements
</TABLE>
<TABLE>
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CONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31
BMC BANKCORP 1993 1992 1991
INTEREST INCOME
Interest and fees on loans $11,169,154 $10,683,429 $11,461,256
Interest on investments:
Taxable interest 2,649,045 3,340,773 2,984,831
Non-taxable interest 446,193 639,991 937,204
Other interest income 222,161 214,015 446,457
Total interest income 14,486,553 14,878,208 15,829,748
INTEREST EXPENSE
Demand (N.O.W.) 912,658 837,318 981,351
Savings (including money fund 572,217 548,468 723,835
accounts)
Time deposits 4,442,153 5,513,451 7,223,085
Advances from Federal Home Loan 15,437 - -
Bank
Term debt 3,705 - -
Total interest expense 5,946,170 6,899,237 8,928,271
Net interest income 8,540,383 7,978,971 6,901,477
Provision for loan losses - Note 5 109,740 242,438 266,945
Net income after provision for loan 8,430,643 7,736,533 6,634,532
losses
Other income - Note 12 1,107,764 939,573 588,737
Other expense - Note 12 5,868,747 5,229,515 4,668,902
Income before income taxes and
cumulative effect
of a change in accounting 3,669,660 3,446,591 2,554,367
principle
Income tax expense - Notes 2 and 13 1,134,000 938,000 606,000
Income before cumulative effect of
a change
in accounting principle 2,535,660 2,508,591 1,948,367
Cumulative effect of changing to a
different method
of accounting for income taxes - - 181,883 -
Note 2
NET INCOME $2,535,660 $2,690,474 $1,948,367
Income Per Common Share - Note 1
Before cumulative effect of a
change in
accounting principle $4.24 $4.19 $3.25
Cumulative effect of changing to
a different method
of accounting for income taxes - 0.30 -
NET INCOME PER COMMON SHARE $4.24 $4.49 $3.25
</TABLE>
<TABLE>
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CONSOLIDATED
STATEMENTS OF CHANGES
IN STOCKHOLDERS'
EQUITY
BMC BANKCORP
Years Ended December 31, 1993,1992, and 1991
Common Stock Capital Retained Treasury
Shares (1) Amount Surplus Earnings Stock
Balance, December 31, 608,215 $1,380,640 $3,944,686 $11,996,903 ($1,372,028)
1990
Net income - - 1,948,367 -
Cash dividends
declared and
paid - $.45 per - - (269,546) -
share
Cost of 9,225 shares 9,225 (18,450) (52,712) (187,138) -
acquired
Balance, December 31, 598,990 1,362,190 3,891,974 13,488,586 (1,372,028)
1991
Net income - - 2,690,474 -
Cash dividends
declared and
paid - $.60 per - - (359,394) -
share
Balance, December 31, 598,990 1,362,190 3,891,974 15,819,666 (1,372,028)
1992
Net income - - 2,535,660 -
Cash dividends
declared and
paid - $.68 per - - (406,878) -
share
Cost of 1,210 shares 1,210 (2,420) (6,914) (48,371) -
acquired
BALANCE, DECEMBER 597,780 $1,359,770 $3,885,060 $17,900,077 ($1,372,028)
31, 1993
</TABLE>
(1) Balance of shares outstanding have been adjusted for a
5 for 1 stock split that took place in March, 1993
See notes to consolidated financial statements
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'EQUITY
BMC BANKCORP
<TABLE>
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Years Ended December 31
Cash Flows From Operating 1993 1992 1991
Activities
Net income $2,535,660 $2,690,474 $1,948,367
Adjustments to reconcile net
income to
net cash provided by operating
activities:
Cumulative effect of a change
in accounting principle - (181,883) -
Provision for loan losses 109,740 242,438 266,945
Depreciation and amortization 297,765 261,180 251,169
Amortization of investments, (176,371) (36,636) (3,538)
net of accretion
Receipt of discounts 240,159 326,950 185,661
Loss (gain) on disposal of - (175) 1,902
equipment
Loss on sale of other asset 3,805 - -
Loss (gain) on investment - (1,000) 244,979
securities
Deferred income taxes (25,288) (81,544) -
Decrease (increase) in:
Accrued interest receivable 91,952 410,270 68,335
Other assets (24,739) 106,994 106,567
Increase (decrease) in:
Accrued interest payable (130,079) (270,245) (142,047)
Other liabilities 182,403 (4,823) 254,933
Net cash provided by operating 3,105,007 3,462,000 3,183,273
activities
Cash Flows From Investing
Activities
Net (increase) decrease in:
Interest bearing deposits with - 900,710 543,460
bank Loans (24,996,372) (14,002,971) (2,871,917)
Purchase of investment securities (13,541,254) (18,261,170) (21,058,280)
Proceeds from:
Sale of investment securities - - 2,778,318
Maturity of investment 13,116,570 17,745,463 11,083,805
securities
Mortgage-backed securities 5,947,932 4,041,216 1,868,916
Purchase of Federal Home Loan (178,900) (581,600) -
Bank stock
Proceeds from sale of equipment - 3,300 -
Proceeds from sale of other asset 67,432 - -
Purchase of premises and (688,151) (248,631) (117,030)
equipment
Net cash used by investing (20,272,743) (10,403,683) (7,772,728)
Cash Flows From Financing
Activities
Net increase (decrease) in:
Demand deposit and savings 9,973,542 13,333,994 7,000,040
accounts
Certificates of Deposits and 6,874,873 (2,241,893) 8,506
IRA's
Proceeds on Federal Home Loan 1,440,000 - -
Bank advances
Payments on Federa Home Loan Bank (13,992) - -
advances
Proceeds from term debt 115,000 - -
Acquisition of stock (57,705) - (258,300)
Dividends paid (406,878) (359,394) (269,546)
Net cash provided by financing 17,924,840 10,732,707 6,480,700
activities
Net increase in cash and cash 757,104 3,791,024 1,891,245
equivalents
Cash and cash equivalents at 12,742,563 8,951,539 7,060,294
beginining of year
CASH AND CASH EQUIVALENTS
AT END OF YEAR $13,499,667 $12,742,563 $8,951,539
See notes to consolidated financial statements
</TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
Principles of Consolidation
BMC Bankcorp, Inc. (Corporation) and its wholly-owned
subsidiaries, Bank of Marshall County, Inc. (Bank), Graves County
Bank (GCB), and United Commonwealth Bank, Federal Savings Bank
(UCB), provide banking services to the Western Kentucky market.
The subsidiaries are the operating members of the group. A
fourth wholly-owned subsidiary, BMC Bankcorp Realty & Investment,
Inc., is a primarily inactive company whose only asset is cash.
The consolidated financial statements include the accounts of the
parent company and its subsidiaries. All significant
intercompany balances and transactions have been eliminated.
Investments in the subsidiaries are carried at the parent
company's equity in the underlying net assets (Note 21).
Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents
include cash on hand, amounts due from banks, short-term deposits
with Federal Home Loan Bank, and federal funds sold. Generally,
federal funds are purchased and sold for one-day periods.
Investment Securities
Investment securities (i.e., securities which the Corporation has
the ability and intent to hold until maturity) are stated at cost
adjusted for amortization of premiums and accretion of discounts.
The decision to sell such securities is based on management's
assessment of changes in economic or financial market conditions,
interest rate risk, and the Corporation's financial position and
liquidity. The adjusted cost of the specific certificate sold is
used to compute gain or loss on the sale of investment
securities. No trading securities are held at December 31, 1993.
Loans and Interest Recognition
Loans are stated at the principal balance outstanding, net of
unearned income. Interest on commercial and real estate mortgage
loans is accrued and credited to operations based upon the
principal amount outstanding. Interest on consumer loans is
credited to operations based upon the sum-of-the-months-digits
method applied on the accrual basis, which method does not differ
materially from the interest method.
The accrual of interest income is generally discontinued when a
loan becomes ninety days past due as to principal or interest.
When interest accruals are discontinued, interest credited to
income in the current year is reversed, and interest accrued in
the prior year is charged to the allowance for loan losses.
Management may elect to continue the accrual of interest when the
estimated net realizable value of collateral is sufficient to
cover the principal balance and accrued interest. Generally, any
payment received on non-accruing loans is applied first to
outstanding loan amounts and next to the recovery of charged-off
loan amounts. Any excess is treated as recovery of lost
interest.
Sale of Mortgage Loans
Mortgage loans originated and intended for sale in the secondary
market are carried at the lower of cost or estimated market value
in the aggregate. Net unrealized losses are recognized in a
valuation allowance by charges to income. Mortgage loans are
sold for cash proceeds equal to the principal amount of loans
sold but with yield rates which reflect the current market rate.
Gain or loss is at the time of sale in an amount reflecting the
difference between the contractual interest rates of the loans
sold and current market rate. These loans are sold without
recourse, with servicing rights retained.
Loan Origination Fees/Costs
The Corporation defers net loan origination fees/costs and
amortizes such net fees/costs over the expected life of the loan
using the interest method. The Corporation has net deferred loan
origination costs which are included in loans on the balance
sheets. The amortization of these net deferred costs is included
in interest and fee income on loans on the statements of income.
Allowance for Loan Losses
The allowance for loan losses has been established to provide for
estimated loan losses. Such losses arise primarily from the loan
portfolio but may also be derived from other sources, including
commitments to extend credit, guarantees, and standby letters of
credit.
The level of the allowance is determined using procedures which
include an evaluation of individual classified credits, as well
as all other significant credits, to determine estimates of loss
probability; the estimation of loss on various categories of the
remaining loans in the portfolio on the basis of historical loss
experience of the category; and the consideration of various
other factors, such as credit concentrations, off-balance-sheet
risk, and an assessment of the current and future economic
environment. The allowance for loan losses is maintained at a
level that in management's judgment is adequate to provide for
possible future losses on these relationships based on available
information.
The allowance for loan losses is increased by provisions for loan
losses charged to expense and reduced by loans charged off net of
recoveries on loans previously charged off. The provision for
loan losses charged to operating expense is based on management's
determination of the amount of the allowance necessary to provide
for estimated loan losses based on this evaluation of the loan
portfolio. The level of allowance and the amount of the
provision involve uncertainties and matters of judgment and
therefore cannot be determined with precision.
Premises and Equipment
Premises and equipment are stated at cost, less accumulated
depreciation and amortization. The provision for depreciation
and amortization is computed by the straight-line method over the
estimated useful lives of the assets.
Other Real Estate
Other real estate is comprised of properties acquired through a
foreclosure proceeding or acceptance of a deed in lieu of
foreclosure. These properties are carried at the lower of cost
or fair market value based on appraised value minus the estimated
cost to sell. Loan losses arising from the acquisition of such
property are charged against the allowance for loan losses.
Subsequent write downs are charged to other operating expense.
Start-up and Organizational Costs
Start-up and organizational costs were incurred in 1992 during
the creation of UCB which opened in September, 1992. These costs
are amortizing over a straight-line twenty year period and
reported net of amortization in other assets.
Income Taxes
In February, 1992, the Financial Accounting Standards Board
issued Statement of Financial Accounting Standards No. 109,
Accounting for Income Taxes. Under the asset and liability
method of SFAS 109, deferred tax assets and liabilities are
recognized for the future tax consequences attributable to
differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted
tax rates expected to apply to taxable income in the years in
which those temporary differences are expected to be recovered or
settled. Under SFAS 109, the effect on deferred tax assets and
liabilities of change in tax rates is recognized in income in the
period that includes the enactment date.
Effective January 1, 1992, the Corporation adopted SFAS 109 and
has reported the cumulative effect of that change in the method
of accounting for income taxes in the 1992 consolidated statement
of income.
The Corporation joins with its four subsidiaries in filing a
consolidated federal income tax return.
Income Per Common Share
Income per common share is calculated on the basis of the
weighted average number of common shares outstanding, net of
shares in treasury. Weighted common shares outstanding for 1993,
1992, and 1991, were 598,587, 598,990, and 599,210, respectively.
All per common share data has been restated to reflect the March,
1993, five-for-one stock split.
Trust Department
Revenues from trust and agency services are reported on a cash
basis, which does not differ materially from the accrual basis.
Securities and other properties, except cash deposits held by the
Bank's Trust Division in a fiduciary capacity, are reported
separately from the Bank's financial statements since such items
are not assets of the Bank.
Reclassification
Certain prior year amounts have been reclassified for purposes of
comparability.
2. Cumulative Effect of Changing to a New Method of Accounting
for Income Taxes
The early adoption of SFAS 109 created a net deferred tax
asset of $181,883 as of January 1, 1992. Such an asset was not
allowed under the prior method of accounting for income taxes
under SFAS 96. The cumulative effect of this change in
accounting for income taxes on the year ending December 31, 1992,
was to increase net income by $181,883 ($.30 per common share).
The pro-forma data (if the prior years had been restated) for the
effect of this change on the consolidated statements of income
presented are as follows:
<TABLE>
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1992 1991
Income before $3,446,591 $2,554,367
income taxes
Income tax
expense 938,000 699,000
Net Income 2,508,591 1,855,367
Net Income Per Common Share 4.19 $3.10
</TABLE>
3. Restrictions on Cash and Due from Banks
The subsidiary banks are required to maintain average reserve
balances for Federal Reserve purposes. The average amount of
those required reserve balances for the years ended December 31,
1993 and 1992, was approximately $1,093,000 and $938,000,
respectively.
4. Investment Securities
Carrying amounts and approximate market values of investment
securities are summarized as follows:
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December 31, 1993
Carrying Unrealized Unrealized Market
Amount Gains Losses Value
U. S. Treasury
securities $9,069,862 $181,515 $4,3770 $9,247,00
Obligations of other
U.S. government
agencies and
corporations 15,028,218 249,378 42,596 15,235,000
Obligations of states
and political
subdivisions:
Tax-exempt 5,408,208 435,027 1,235 5,842,000
Taxable 99,733 3,267 - 103,000
29,606,021 869,187 48,208 30,427,000
Mortgage-backed
securities:
Federal Home Loan
Mortgage Corporation 4,626,915 100,740 37,655 4,690,000
Federal National
Mortgage Association 5,941,506 208,638 1,144 6,149,000
Government National
Mortgage Association 783,899 45,101 - 829,000
Collateralized mortgage
obligations 90,910 3,090 - 94,000
$41,049,251 $1,226,756 $87,007 $42,189,000
December 31, 1992
Carrying Unrealized Unrealized Market
Amount Gains Losses Value
U. S. Treasury
securities $9,658,107 $271,006 $2,113 $9,927,000
Obligations of other
U.S. government
agencies and
corporations 15,812,650 529,947 27,597 16,315,000
Obligations of states
and political
subdivisions:
Tax-exempt 6,123,084 400,916 - 6,524,000
Taxable 99,475 5,525 - 105,000
31,693,316 1,207,39 29,710 32,871,000
Mortgage-backed
securities:
Federal Home Loan
Mortgage Corporation 9,732,818 137,560 104,378 9,766,000
Federal National
Mortgage Association 4,007,973 186,027 - 4,194,000
Government National
Mortgage Associations 1,070,283 59,717 - 1,130,000
Collateralized mortgage
obligations 131,897 1,103 - 133,000
$46,636,287 $1,591,801 $134,088 $48,094,000
</TABLE>
4. Investment Securities (Continued)
The amortized cost and approximate market value of investment
securities at December 31, 1993 and 1992, by contractual
maturity, are shown below. Expected maturities will differ from
contractual maturities because borrowers may have the right to
call or prepay obligations with or without penalties.
<TABLE>
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December 31
1993 1992
Approximate Approximate
Amortized Market Amortized Market
Cost Value Cost Value
Due in one
year or less $5,553,0322 $5,622,000 $6,364,581 $6,549,000
Due after
one year through
five years 20,132,405 20,632,000 20,403,052 21,163,000
Due after
five years through
ten years 3,309,049 3,465,000 4,557,411 4,729,000
Due after
ten years 611,535 708,000 368,272 430,000
9,606,021 30,427,000 31,693,316 32,871,000
Mortgage-backed
securities 11,443,230 11,762,000 14,942,971 15,223,000
$41,049,251 $42,189,000 $46,636,287 $48,094,000
</TABLE>
No investment securities were sold in 1993 or 1992; however, the
Corporation realized a $1,000 gain on an early call of one
security in 1992. Proceeds from sales of investment securities
during 1991 were $2,778,318. Gross gains of $15,127 and gross
losses of $260,106 were realized on those sales.
Investment securities with carrying amounts of $10,369,000 and
$8,777,000 at December 31, 1993 and 1992, respectively, were
pledged to secure public deposits and securities sold under
agreements to repurchase and for other purposes required or
permitted by law.
5. Loans
Major classifications of loans are as follows:
<TABLE>
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December 31
1993 1992
Commercial, financial, and agricultural 32,171,822 25,766,888
Real estate - residential mortage 79,690,769 63,260,480
Installment loans 17,845,443 17,676,384
Loans held for sale
(market value
approximates book value) 213,332 -
Other (includes single
payment and other personal
loans) 18,704,728 17,202,534
148,626,094 123,906,286
Less unearned income 2,165,835 2,393,129
$146,460,259 $121,513,157
</TABLE>
Loans serviced for the benefit of the Federal Home Loan Mortgage
Corporation at December 31, 1993 and 1992, were $5,955,000 and
$479,000, respectively. Service fees collected on these loans
during 1993 and 1992 were $2,230 and $0, respectively and are
included in interest and fees on loans. Loans committed to, but
not funded, in the secondary market were $289,000 and $0 at
December 31, 1993 and 1992, respectively.
Loans on which the accrual of interest has been discontinued
amounted to $91,000 and $130,500 at December 31, 1993 and 1992,
respectively. If interest on those loans had been accrued, such
income from date of non-accrual, net of collections recognized as
income would have approximated $3,000, $20,500, and $32,000 for
1993, 1992, and 1991, respectively. There were no material
commitments to lend additional funds to customers whose loans
were classified as nonaccrual at December 31, 1993. Loans
contractually past due 90 days or more amounted to $63,000 and
$352,000 at December 31, 1993 and 1992, respectively.
The Corporation's primary market is Western Kentucky. The
Corporation grants commercial and consumer loans to its
customers, most of whom are located within the Corporation's
primary market. Although the Corporation has a diversified loan
portfolio, a substantial portion of its debtor's ability to honor
their contracts is dependent upon the Corporation's primary
market's economic conditions.
Loans are either secured or unsecured based on the type of loan
and the financial condition of the borrower. The loans are
generally expected to be repaid from cash flow or proceeds from
the sale of selected assets of the borrower; however, the
Corporation is exposed to risk of loss on any or all loans due to
the borrower's difficulties, which can arise from any number of
factors including problems within the respective industry or
economic conditions within the Corporation's primary market.
Loans to directors and executive officers (including only those
loans which in the aggregate exceeded $60,000 per individual at
December 31), and to their affiliated (ten per cent or greater
interest) companies, amounted to $2,124,885 and $1,237,298 at
December 31, 1993 and 1992, respectively. These loans were
individually made in the ordinary course of business at
prevailing interest rates and under similar terms extended to
other bank customers.
Activity with respect to these loans are as follows (other
adjustments are new loans greater than $60,000 netted against
loans less than $60,000):
<TABLE>
<S> <C> <C>
December 31
1993 1992
Beginning balance $ 1,237,298 $ 533,796
New loans 1,525,418 403,181
Repayments (818,465) (496,919)
Other adjustments, net 180,634 797,240
ENDING BALANCE $ 2,124,885 $ 1,237,298
</TABLE>
Changes in the allowance for loan losses were as follow:
<TABLE>
<S> <C> <C> <C>
December 31
1993 1992 1991
Balance, beginning of year $ 2,364,250 $ 2,231,751 $ 2,215,526
Provision charged to
expense 109,740 242,438 266,945
Loans charged off (83,519) (178,297) (341,481)
Recoveries 124,249 68,358 90,761
BALANCE, AT END OF YEAR $ 2,514,720 $ 2,364,251 $ 2,231,751
</TABLE>
6. Bank Premises and Equipment
Major classifications of these assets are summarized as follows:
<TABLE>
<S> <C> <C>
December 31
1993 1992
Land $ 723,377 $ 346,368
Buildings 2,759,224 2,748,304
Furniture and
equipment 2,131,425 1,831,758
5,614,026 4,926,430
Accumulated
depreciation 2,374,483 2,098,026
3,239,543 2,828,404
</TABLE>
Depreciation expense on bank premises and equipment amounted to
$277,009 in 1993, $250,684 in 1992, and $246,076 in 1991.
Depreciation on rental property totaled $4,543 in 1993, $5,092 in
1992 and 1991.
7. Other Assets
Major classifications of other assets are summarized as follows:
<TABLE>
<S> <C> <C>
December 31
1993 1992
Accrued interest
receivable -investments 566,458 696,274
Accrued interest
receivable - loans 948,360 910,496
Prepaid federal income
taxes 108,880 61,961
Deferred start-up and
organizational
costs (net of
amortization of $21,616
and $5,404, respectively) 302,623 318,835
Other real estate (net of
reserve of $13,398 and
$11,679,respectively) 93,010 92,762
Prepaid expenses and other 176,303 184,511
Deferred income tax -
Notes 2 and 13 288,715 263,427
$2,484,349 $2,528,266
</TABLE>
Amortization expense of start-up and organizational costs
amounted to $16,212 in 1993, $5,404 in 1992, and $0 in 1991 and
is included in other expense.
8. Time Deposits
The aggregate amount of time certificates of deposit and other
time deposits in denominations of $100,000 or more was
$15,322,600 at December 31, 1993 and $13,714,098 at December 31,
1992. Interest expense on time certificates of deposit in
denominations of $100,000 or more was $521,828 in 1993, $641,161
in 1992, and $1,002,915 in 1991.
9. Accrued Expenses and Other Liabilities
The major classifications of accrued expenses and other
liabilities are as follows:
<TABLE>
<S> <C> <C>
December 31
1993 1992
Accrued interest on
deposits $ 895,120 $ 1,025,199
Other 419,903 237,500
$ 1,315,023 $ 1,262,699
</TABLE>
10. Advances from Federal Home Loan Bank
The advances from the Federal Home Loan Bank at December 31,
1993, were as follows:
<TABLE>
<S> <C> <C> <C>
Maturity Terms Rate 1993
10/18/94 12 months 3.70% 1,000,000
10/01/2003 120 months 5.20% 255,008
09/01/2003 120 months 5.75% 171,000
$ 1,426,008
</TABLE>
The aggregate maturities of these advances at December 31, 1993,
for the following periods are as follows:
<TABLE>
<S> <C>
1994 $ 1,029,625
1995 39,723
1996 40,880
1997 42,098
1998 43,382
Thereafter 230,300
The advances are collateralized by Federal Home Loan Bank stock
and certain first mortgage loans and are subject to potential
prepayment fees.
11. Term Debt
At December 31, 1993, a promissory note exists between the
Corporation and an estate/trust in the amount of $115,000. This
note is payable in five equal installments of $23,000 commencing
July, 1994, with interest payable monthly at a rate not less than
8% per annum. This debt may not be prepaid without the prior
written consent of the executrix of the estate. There is no
collateral on this debt.
12. Other Income and Other Expense
The major classifications of other income and other expense are
as follows:
</TABLE>
<TABLE>
<S> <C> <C> <C>
December 31
Other Income 1993 1992 1991
Service charges on deposit
accounts $ 670,392 $ 639,706 $ 657,664
Other service charges,
commissions, and fees 158,692 162,981 139,991
Gain on sale of mortgage
loans 100,147 3,268 -
Other 178,533 132,618 36,061
Gain (loss) on investment
securities - 1,000 (244,979)
$ 1,107,764 $ 939,573 $ 588,737
December 31
Other Expense 1993 1992 1991
Salaries and wages $ 2,235,006 $ 1,955,285 $ 1,674,684
Employee benefits
Note 17 628,925 578,697 496,798
Data processing 332,609 307,091 287,233
Equipment and occupancy
expense - Note 6 744,752 677,225 640,268
Insurance and FDIC
assessment 482,031 442,440 471,614
Supplies 205,890 192,011 160,418
Committee and directors'
fees 178,950 120,100 97,700
Other 1,060,584 956,666 840,187
$ 5,868,747 $ 5,229,515 $ 4,668,902
</TABLE>
13. Income Tax Expense
The provisions for income taxes applicable to net income, as
reflected in the consolidated statements of income, consist of
the following components:
<TABLE>
<S> <C> <C> <C>
December 31
1993 1992 1991
Current $ 1,159,288 $ 1,019,544 $ 606,000
Deferred (25,288) (81,544) -
$ 1,134,000 $ 938,000 $ 606,000
</TABLE>
Temporary differences that give rise to deferred income taxes
consist of various items of income and expense, and credits
recognized for income tax purposes which differ from those
recognized in the consolidated financial statements. The tax
effects of temporary differences that give rise to deferred tax
assets and liabilities are as follows:
<TABLE>
<S> <C> <C>
December 31
Deferred Assets 1993 1992
Excess book allowance
for loan losses $ 506,178 $ 474,711
Market write-downs of
other real estate owned 3,671 3,971
Accrued interest payable 20,844 -
Other 1,209 -
531,902 478,682
Deferred Liabilities
Excess tax depreciation 173,344 174,788
Excess amortization on
start-up and
organizational costs 8,676 1,898
Accreted discounts on
securities 14,591 17,208
Net deferred book loan
origination costs 32,613 16,952
Stock dividends 10,641 -
Other 3,322 4,409
243,187 215,255
Net deferred asset 288,715 263,427
Deferred tax asset
valuation allowance - -
288,715 263,427
</TABLE>
The effective tax rate differs from the maximum statutory federal
tax rate of 34% primarily because of net tax-exempt interest
income.
14. Cash Flows Statement Disclosures
Supplemental disclosures for the consolidated statements of cash
flows follow:
<TABLE>
<S> <C> <C> <C>
December 31
Cash paid for: 1993 1992 1991
Interest $ 6,076,248 $ 7,169,482 $ 9,070,294
Income taxes 1,232,366 1,095,390 553,975
Supplemental schedule of noncash investing and financing
activities:
December31
1993 1992 1991
Property acquired
through foreclosure $ 90,000 $ 56,474 $ 178,138
</TABLE>
15. Financial Instruments with Off Balance Sheet Risk
In the normal course of business, there are outstanding various
commitments and contingent liabilities, such as guarantees,
commitments to extend credit, etc., which are not reflected in
the accompanying consolidated financial statements. Management
does not anticipate losses as a result of these transactions.
Outstanding standby letters of credit at December 31, 1993 and
1992, totaled $619,000 and $526,000, respectively. There were no
standby letters of credit to executive officers and directors in
1993 and 1992.
Undisbursed commitments to extend credit to customers totaled
$9,301,000 and $7,201,000 at December 31, 1993 and 1992,
including $181,000 and $246,000 in such commitments to executive
officers and directors. The Corporation's exposure to credit
loss in the event of nonperformance by the customer related to
commitments to extend credit and standby letter of credit
outstanding at December 31, 1993 and 1992, is represented by the
contractual amount of those agreements.
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. These commitments generally have
fixed expiration dates or other termination clauses. Since many
of the commitments are expected to expire without being fully
drawn, the total commitment amounts do not necessarily represent
future cash requirements. The Corporation evaluates each
customer's creditworthiness on a case-by-case basis. The amount
of collateral obtained upon extension of credit is based on
management's credit evaluation of the customer. Collateral held
varies but may include accounts receivable, inventory, property,
plant and equipment, and income-producing commercial properties.
16. Lease Commitments
Future minimum lease payments, and leased property receipts on
operating leases at December 31, 1993, are as follows:
<TABLE>
<S> <C> <C>
Operating Leased
Lease Property
Payments Receipts
1994 $ 471 $ 4,667
Thereafter - -
</TABLE>
In addition to the amounts set forth above, certain of the
operating leases require payments by the Corporation for taxes,
insurance, and maintenance. Rental expense for all operating
leases (including equipment rentals based on usage) amounted to
$47,737 in 1993, $54,053 in 1992, and $50,353 in 1991. Rental
income for all operating leases amounted to $9,878 in 1993,
$11,900 in 1992, and $12,700 in 1991.
17. Employees' Profit Sharing Plan
The subsidiary banks all have profit sharing retirement plans
covering substantially all their employees. The plans provide
for an annual contribution to a trust fund, established on behalf
of the employees, of an amount determined by management based on
current operating results. The banks may contribute any amount
at their discretion but, in any event, the total annual
contribution to the plans shall not exceed the maximum amount
allowable as a deduction under the Internal Revenue Code. Profit
sharing expense totaled $182,089 in 1993, $162,696 in 1992, and
$140,611 in 1991.
18. Restrictions on Subsidiary Dividends, Loans, or Advances
Banking regulations place certain restrictions on the transfer of
funds (loans and advances) and payment of dividends by the
subsidiary banks to the Corporation. At December 31, 1993, the
restricted net assets of the banks, included in the consolidated
balance sheet, approximated $18,814,000.
Substantially all of the Corporation's undivided profits
available for payment of dividends to its stockholders result
from net earnings of the subsidiary banks. The subsidiary banks
are restricted in the amount of dividends they may pay the
Corporation, without regulatory approval, to the total of net
earnings for the current year combined with retained net earnings
of the preceding two years. At December 31, 1993, approximately
$3,463,000 of the subsidiary banks' undivided profits were not
subject to this restriction. Under such restrictions, the
subsidiary banks will have available, without seeking regulatory
approval for payments of dividends during 1994, retained net
profits of approximately $2,091,000 plus net profits for 1994.
19. Disclosures about Fair Value of Financial Instruments
The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of SFAS
No. 107, "Disclosures about Fair Value of Financial Instruments."
The estimated fair value amounts have been determined by the
Corporation using available market information and appropriate
valuation methodologies. However, considerable judgment is
necessarily required to interpret market data to develop the
estimates of fair value. Accordingly, the estimates presented
herein are not necessarily indicative of the amounts the
Corporation could realize in a current market exchange. The use
of different market assumptions and/or estimation methodologies
may have a material effect on the estimated fair value amounts.
The following methods and assumptions were used to estimate the
fair value of each class of financial instruments for which it is
practicable to estimate that value:
Cash and Short-Term Investments
For cash and short-term investments, the carrying amount is
a reasonable estimate of fair value.
Investment Securities
For marketable securities held for investment purposes, fair
values are based on quoted market prices or dealer quotes. If a
quoted market price is not available, fair value is estimated
using quoted market prices for similar securities.
Loan Receivables
For various homogeneous categories of loans, such as
residential mortgages - fixed and variable, commercial loans,
floor plans, and installment loans, the fair value 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 approximate remaining maturities.
The current rates used for the discounting were those charged as
of December 31, 1993, for the various local market area of the
Corporation's banking subsidiaries.
Deposit Liabilities
The fair value of demand deposits, savings accounts, and
certain money market deposits is the amount payable on demand at
the reporting date. The fair value of fixed maturity
certificates of deposits is estimated using the rates offered at
December 31, 1993, for deposits of similar remaining maturities
in the various local markets of the banking subsidiaries.
Commitments to Extend Credit and Letters of Credit
A fair value amount was not computed on commitments to
extend credit or for standby letters of credit. Standby letters
of credit are for a period not to exceed one year and the fee is
recorded as income as of the beginning of the commitment period.
Offered credit under these agreements are generally for a period
of one year or less based on terms and other conditions similar
to current creditors. Therefore, there is no premium or discount
value associated with such credit arrangements.
It was not cost effective to attempt to determine the fair
value of commitments to extend credit under lines of credit
arrangements. Fees charged, if any, are generally collected at
the time the credit is offered and thus carry no premium value.
The fair value of future executed lines of credit commitments is
expected to approximate that of outstanding loans of commercial
and certain residential mortgage loans, which carry a premium at
December 31, 1993. However, cost to quantify such a premium is
not justified; therefore, no fair value for commitments to extend
credit is disclosed.
The estimated fair values of the Corporation's financial
instruments at December 31, 1993, are as follows:
<TABLE>
<S> <C> <C>
Carrying Fair
Financial Assets: Amount Value
Cash and cash equivalents $ 3,499,667 $ 13,499,667
Investment securities -
Note 4 41,049,251 42,189,000
Loans, net of unearned
income 146,460,259 147,762,259
Financial Liabilities:
Demand deposits 74,031,428 74,031,428
Time deposits 106,318,511 106,404,511
Advances from Federal
Home Loan Bank 1,426,008 1,414,000
Term debt 115,000 120,000
</TABLE>
The fair value estimates presented herein are based on pertinent
information available to management as of December 31, 1993.
Although management is not aware of any factors that would
significantly affect the estimated fair value amounts, such
amounts have not been comprehensively revalued for purposes of
these financial statements since that date and, therefore,
current estimates of fair value may differ significantly from the
amounts presented herein.
20. Subsequent Event
On January 10, 1994, the Corporation entered into a definitive
agreement with CBT Corporation of Paducah, Kentucky (CBT), that
if consummated, would merge the Corporation into CBT. The
agreement is subject to the approval of the Corporation's and
CBT's shareholders and various state and federal regulatory
authorities. Corporation shareholders would receive two shares
of CBT stock for each share of the Corporation's stock. All of
the Corporation's senior management is expected to remain in
place and three directors will be immediately placed on the board
of CBT. The merger would be effected under the "pooling of
interest" method for accounting purposes.
21. BMC Bankcorp, Inc. (Parent Only) Condensed Financial
Information
<TABLE>
<S> <C> <C>
Balance Sheets
December 31
Assets 1993 1992
Cash on deposit with bank * $ 7,459 $ 38,754
Bank premises and equipment,
net 928,446 574,368
Investment in Bank of Marshall
County * 15,634,228 14,142,643
Investment in Graves County
Bank * 3,036,793 2,663,277
Investment in United
Commonwealth Bank, FSB * 2,233,570 2,219,095
Investment in BMC Bankcorp
Realty &Investments, Inc. * 69,413 71,282
Other assets 21,166 43,413
TOTAL ASSETS 21,931,075 19,752,832
Liabilities
Deferred income taxes * 43,196 51,030
Term debt 115,000 -
Total liabilities 158,196 51,030
Stockholders' equity 21,772,879 19,701,802
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $21,931,075 $19,752,832
</TABLE>
* Eliminated in consolidation
Statements of Income
<TABLE>
<S> <C> <C> <C>
Years Ended
December 31
Income 1993 1992 1991
Dividend income from
subsidiary banks * 691,583 2,469,394 549,400
Rent income from GCB* 66,000 66,750 75,000
757,583 2,536,144 624,400
Expense
Interest 3,705 - -
Other 105,668 37,380 34,557
Income before income
taxes and cumulative effect
of a change in accounting
principle 648,210 2,498,764 589,843
Income taxes expense
(benefit) (11,745) (5,000) 13,000
659,955 2,503,764 576,843
Equity in undistributed
income of subsidiaries * 1,875,705 210,989 1,371,524
Income before cumulative
effect of a change in
accounting principle 2,535,660 2,714,753 1,948,367
Cumulative effect of
changing to a different
method of accounting
for income taxes - (24,279) -
NET INCOME $2,535,660 $2,690,477 $1,948,367
</TABLE>
* Eliminated in consolidation
21. BMC Bankcorp, Inc. (Parent Only) Condensed Financial
Information
Statements of Cash
Flows
<TABLE>
<S> <C> <C> <C>
Years Ended
December 31
Cash Flows from operating 1993 1992 1991
Activities:
Net income $ 2,535,66 $ 2,690,47 $ 1,948,36
Adjustments to reconcile net
income to net cash provided
by operating activities:
Cumulative effect of a
change in accounting
principle - 24,279 -
Depreciation 27,950 27,950 27,949
Deferred income taxes (7,834) 26,751 -
Decrease (increase) in
other assets 22,248 143,972 154,637)
Increase (decrease) in
other liabilities - (13,388) 5,073
Equity in undistributed
income of subsidiaries * (1,875,705) (210,989) (1,371,524)
Net cash provided by
operating activities 702,319 2,689,049 455,228
Cash Flows from Investing
Activities
Purchase of premises
and equipment (382,031) - -
Contribution of
capital to subsidiary * (2,000) (2,291,647) (2,279)
Net cash used by
investing activities (384,031) (2,291,647) (2,279)
Cash Flows from Financing
Activities
Proceeds from term debt 115,000 - -
Acquisition of stock (57,705) - 258,300)
Dividends paid (406,878) (359,394) (269,546)
Net cash used by
financing activities (349,583) (359,394) (527,846)
Net increase (decrease) in
cash and cash equivalents (31,295) 38,008 (74,897)
Cash and cash equivalents at
beginning of year 38,754 746 75,643
CASH AND CASH EQUIVALENTS
AT END OF YEAR $ 7,459 $ 38,754 $ 746
* Eliminated in consolidation
</TABLE>
<TABLE>
<S> <C> <C>
CONSOLIDATED BALANCE SHEETS (unaudited)
BMC BANKCORP
(Dollars in thousands)
Period Ended
March 31
ASSETS 1994 1993
Cash and due from banks $3,750 $2,585
Federal funds sold 6,735 7,535
Total cash and cash equivalents 10,485 10,120
Investment securities 45,149 48,184
Loans 150,032 123,786
Allowance for loan losses (2,540) (2,372)
Loans - net 147,492 121,414
Investment in Federal Home Loan Bank 940 582
Stock
Bank premises and equipment, net 3,379 2,807
Accrued interest receivable 1,407 1,557
Other assets, net 947 1,074
TOTAL ASSETS $209,799 $185,738
LIABILITIES
Non-interest bearing demand deposits $16,524 $14,617
Interest bearing deposits 168,123 149,321
Accrued interest payable 982 1,074
Term debt 115 -
Advances from Federal Home Loan Bank 1,421 -
Accrued expenses & other liabilities 539 406
TOTAL LIABILITIES 187,704 165,418
STOCKHOLDERS' EQUITY
Preferred stock, no par value,
authorized - -
1,000,000 shares, none issued - -
Common stock, no par value, authorized
1,000,000 shares, issued and
outstanding - 679,885 and
681,095 shares at March 31, 1994 &
1993, respectively 1,360 1,362
Capital surplus 3,885 3,892
Retained earnings 18,276 16,438
Investments security valuation
allowance, net (54) -
Cost of 82,105 shares of common stock
in treasury (1,372) (1,372)
Total stockholders' equity 22,095 20,320
TOTAL LIABILITIES AND STOCKHOLDERS' $209,799 $185,738
EQUITY
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
BMC BANKCORP
(Dollars in thousands)
Period Ended
March 31
INTEREST INCOME 1994 1993
Interest and fees on loans $2,908 $2,688
Interest on investments 659 876
Other interest income 76 59
Total interest income 3,643 3,623
INTEREST EXPENSE 1,493 1,499
Net interest income 2,150 2,124
Provision for loan losses 27 21
Net income after provision for
loan losses 2,123 2,103
Other income 228 214
Other expense (1,579) (1,429)
Income before taxes 772 888
Income tax expense 276 270
NET INCOME $496 $618
NET INCOME PER COMMON SHARE $0.83 $1.03
Average number of shares outstanding 597,780 598,990
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
CBT CORPORATION
PRO FORMA CONSOLIDATED BALANCE
SHEETS (Unaudited)
For period ended MARCH 31, 1994
(Dollars in thousands) TOTAL
CBT BMC ADJUST- PRO FORMA
ASSETS CORP BANKCORP MENTS CONSOLIDATED
Cash and due from banks $20,802 $3,750 $24,552
Federal funds sold 1,671 6,735 8,406
Money market investments 1,894 - 1,894
Total cash and cash equivalents 24,367 10,485 34,852
Investment securities 182,924 45,149 228,073
Loans 386,063 150,032 536,095
Allowance for loan losses (8,770) (2,540) (11,310)
Loans - net 377,293 147,492 524,785
Investment in Federal Home Loan 1,915 940
Bank Stock
Bank premises and equipment, 11,660 3,379 15,039
net
Accrued interest receivable 3,896 1,407 5,303
Other assets, net 5,945 947 6,892
TOTAL ASSETS $608,000 $209,799 $0 $817,799
LIABILITIES
Non-interest bearing demand
deposits $43,561 $16,524 $60,085
Interest bearing deposits 421,536 168,123 589,659
Total deposits 465,097 184,647 649,744
Short-term borrowings:
Federal funds purchased and
securities sold under
agreements to repurchase 37,075 - 37,075
Notes payable-U.S. Treasury 2,000 - 2,000
Revolving lines of credit and
other short-term borrowings 5,100 - 5,100
Total short-term borrowings 44,175 - 44,175
Accrued interest payable 2,082 982 3,064
Term debt 5,000 115 5,115
Advances from Federal Home Loan 18,535 1,421 19,956
Bank Other liabilities 4,063 539 4,602
TOTAL LIABILITIES 538,952 187,704 726,656
STOCKHOLDERS' EQUITY
Common stock, no par value,
6,000,000 shares
authorized, 3,963,079 shares
issues 4,100 1,360 (1,360) (2) 4,100
Capital surplus 13,298 3,885 1,360 (2) 18,543
Retained earnings 51,104 18,276 (1,372) (3) 68,008
Cost of common stock in treasury - (1,372) 1,372 (3) -
Unrealized gain on securities
available for sale
net of deferred tax 546 (54) 492
Total stockholders' equity 69,048 22,095 91,143
TOTAL LIABILITIES AND $608,000 $209,799 $0 $817,799
STOCKHOLDERS' EQUITY
</TABLE>
(1) Accounted for as pooling of interest.
(2) Movement of common stock to Capital Surplus.
(3) Movement of Cost of common stock in treasury
to Retaine earnings.
<TABLE>
<S> <C> <C> <C>
CBT CORPORATION
PRO FORMA COMBINED CONSOLIDATED
STATEMENT OF INCOME
For Year Ended DECEMBER 31, 1993
(Dollars in thousands) CBT BMC PRO FORMA
CORP CORP COMBINED
INTEREST INCOME
Interest and fees on loans $33,071 $11,169 $44,240
Investment securities 10,874 3,095 13,969
Other interest income 126 222 348
Total interest income 44,071 14,486 58,557
INTEREST EXPENSE
Deposits 17,147 5,927 23,074
Short-term borrowings 1,539 15 1,554
Term debt 328 4 332
Total interest expense 19,014 5,946 24,960
Net Interest Income 25,057 8,540 33,597
Provision for Loan Losses 1,256 110 1,366
Net Interest Income After
Provision for
Loan Losses 23,801 8,430 32,231
Other income 5,909 1,108 7,017
Other expenses 19,367 5,868 25,235
Income before income taxes 10,343 3,670 14,013
Income tax expense 2,431 1,134 3,565
Net income $7,912 $2,536 $10,448
Net income per common share:
Primary $2.86 $2.12 $2.64
Fully diluted $2.86 $2.12 $2.64
Average common shares outstanding:
Primary 2,767,519 1,195,560 (1) 3,963,079
Fully diluted 2,767,519 1,195,560 (1) 3,963,079
(1) The adjustment of 1,195,560 shares of CBT Common Stock
reflects the number of shares to be issued in conjunction
with the acquisition of BMC. The exchange ratio of 2 shares
of CBT Common Stock to be issued for one share of BMC Common
Stock is provided for in the merger agreement relating to that
transaction.
CBT CORPORATION
PRO FORMA COMBINED CONSOLIDATED
STATEMENT OF INCOME
For Year Ended DECEMBER 31, 1992
(Dollars in thousands) CBT BMC PRO FORMA
CORP CORP COMBINED
INTEREST INCOME
Interest and fees on loans $34,339 $10,683 $45,022
Investment securities 12,110 3,981 16,091
Other interest income 373 214 587
Total interest income 46,822 14,878 61,700
INTEREST EXPENSE
Deposits 19,955 6,899 26,854
Short-term borrowings 1,616 - 1,616
Term debt 426 - 426
Total interest expense 21,997 6,899 28,896
Net Interest Income 24,825 7,979 32,804
Provision for Loan Losses 2,199 242 2,441
Net Interest Income After
Provision for Loan Losses 22,626 7,737 30,363
Other income 5,225 939 6,164
Other expenses 17,935 5,230 23,165
Income before income taxes 9,916 3,446 13,362
Income tax expense 2,302 938 3,240
Income before cumulative effect of
a change in accounting principle 7,614 2,508 10,122
Cumulative effect of changing to a
different method of accounting for
income taxes - 182 182
Net income $7,614 $2,690 $10,304
Net income per common share:
Primary $2.75 $2.25 $2.60
Fully diluted $2.75 $2.25 $2.60
Average common shares outstanding:
Primary 2,767,519 1,197,980 (1) 3,965,499
Fully diluted 2,767,519 1,197,980 (1) 3,965,499
</TABLE>
(1) The adjustment of 1,197,980 shares of CBT Common Stock
reflects the number of shares to be issued in conjunction
with the acquisition of BMC. The exchange ratio of 2
shares of CBT Common Stock to be issued for one share
of BMC Common Stock is provided for in the merger agreement
relating to that transaction.
<TABLE>
<S> <C> <C> <C>
CBT CORPORATION
PRO FORMA COMBINED CONSOLIDATED
STATEMENT OF INCOME
For Year Ended DECEMBER 31, 1993
(Dollars in thousands) CBT BMC PRO FORMA
CORP CORP COMBINED
INTEREST INCOME
Interest and fees on loans $37,306 $11,461 $48,767
Investment securities 13,241 3,922 17,163
Other interest income 1,324 446 1,770
Total interest income 51,871 15,829 67,700
INTEREST EXPENSE
Deposits 27,706 8,928 36,634
Short-term borrowings 1,381 - 1,381
Term debt 444 - 444
Total interest expense 29,531 8,928 38,459
Net Interest Income 22,340 6,901 29,241
Provision for Loan Losses 2,580 267 2,847
Net Interest Income After
Provision for
Loan Losses 19,760 6,634 26,394
Other income 4,944 589 5,533
Other expenses 16,718 4,669 21,387
Income before income taxes 7,986 2,554 10,540
Income tax expense 1,768 606 2,374
Net income $6,218 $1,948 $8,166
Net income per common share:
Primary $2.25 $1.63 $2.64
Fully diluted $2.25 $1.63 $2.64
Average common shares outstanding:
Primary 2,767,519 1,197,980 (1) 3,965,499
Fully diluted 2,767,519 1,197,980 (1) 3,965,499
</TABLE>
(1) The adjustment of 1,197,980 shares of CBT Common Stock
reflects the number of shares to be issued in conjuction
with the acquisition of BMC. The exchange ratio of 2
shares of CBT Common Stock to be issued for one share
of BMC Common Stock is provided for in the merger agreement
relating to that transaction.
<TABLE>
<S> <C> <C> <C>
CBT CORPORATION
PRO FORMA COMBINED CONSOLIDATED
STATEMENT OF INCOME (unaudited)
For period ending MARCH 31, 1994
(Dollars in thousands) CBT BMC PRO FORMA
CORP CORP COMBINED
INTEREST INCOME
Interest and fees on loans $8,705 $2,908 $11,613
Investment securities 2,628 659 3,287
Other interest income 46 76 122
Total interest income 11,379 3,643 15,022
INTEREST EXPENSE
Deposits 3,987 1,476 5,463
Short-term borrowings 490 15 505
Term debt 81 2 83
Total interest expense 4,558 1,493 6,051
Net Interest Income 6,821 2,150 8,971
Provision for Loan Losses 284 27 311
Net Interest Income After
Provision for Loan Losses 6,537 2,123 8,660
Other income 1,346 228 1,574
Other expenses 5,046 1,579 6,625
Income before income taxes 2,837 772 3,609
Income tax expense 703 276 979
Net income $2,134 $496 $2,630
Net income per common share:
Primary $0.77 $0.41 $0.66
Fully diluted $0.77 $0.41 $0.66
Average common shares outstanding:
Primary 2,767,519 1,195,560 (1) 3,963,079
Fully diluted 2,767,519 1,195,560 (1) 3,963,079
(1) The adjustment of 1,195,560 shares of CBT Common Stock
reflects the number of shares to be issued in conjunction
with the acquisition of BMC. The excange ratio of 2 shares
of CBT Common Stock to be issued for one share of BMC Common
Stock is provided for in the merger agreement relating to
that transaction.
</TABLE>
<TABLE>
<S> <C> <C> <C>
CBT CORPORATION
PRO FORMA COMBINED CONSOLIDATED
STATEMENT OF INCOME (unaudited)
For period ending MARCH 31, 1993
(Dollars in thousands) CBT BMC PRO FORMA
CORP CORP COMBINED
INTEREST INCOME
Interest and fees on loans $8,103 $2,688 $10,791
Investment securities 1,413 876 2,289
Other interest income 1,450 59 1,509
Total interest income 10,966 3,623 14,589
INTEREST EXPENSE
Deposits 4,303 1,499 5,802
Short-term borrowings 399 - 399
Term debt 81 - 81
Total interest expense 4,783 1,499 6,282
Net Interest Income 6,183 2,124 8,307
Provision for Loan Losses 355 21 376
Net Interest Income After Provision for
Loan Losses 5,828 2,103 7,931
Other income 1,819 214 2,033
Other expenses 4,558 1,429 5,987
Income before income taxes 3,089 888 3,977
Income tax expense 859 270 1,129
Net income $2,230 $618 $2,848
Net income per common share:
Primary $0.81 $0.52 $0.72
Fully diluted $0.81 $0.52 $0.72
Average common shares outstanding:
Primary 2,767,519 1,197,980 (1) 3,965,499
Fully diluted 2,767,519 1,197,980 (1) 3,965,499
</TABLE>
(1) The adjustment of 1,197,980 shares of CBT Common Stock
reflects the number of shares that would have been issued
in conjunction with the acuisition of BMC had the merger
taken place March 31, 1993. The exchange ratio of 2 shares
of CBT Common Stock to be issued for one share of BMC
Common Stock is provided for in the merger agreement
relating to that transaction.
EXHIBIT INDEX
Exhibit
2 (a) Agreement and Plan of Reorganization between CBT
Corporation, CBT Acquisition Corp., and BMC Bankcorp,
Inc. dated as of January 10, 1994, is incorporated
by reference to Exhibit (2) of the Registration
Statement on Form S-4 (File No. 33-52953) filed by CBT
Corporation with the Commission.
2 (b) Plan of Merger between CBT Corporation, CBT Acquisition
Corp., and BMC Bankcorp, Inc. dated as of January 10, 1994,
is incorporated by reference to Exhibit (2) of the
Registration Statement on Form S-4 (File No. 33-52953)
filed by CBT Corporation with the Commission.
