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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1997 Commission File Number 0-16187
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GRANDBANC, INC.
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(Exact name of small business issuer as specified in its charter)
Maryland 52-1332050
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(State or other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
1800 Rockville Pike, Rockville, Maryland 20852
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(Address of principal executive offices)
(301) 770-1300
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(Issuer's telephone number, including area code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12
months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90
days.
YES X NO
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At July 30, 1997, there were 4,040,915 shares of Common Stock, par value
$.10 per share outstanding.
Transitional Small Business Disclosure Format
YES NO X
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TABLE OF CONTENTS
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<CAPTION>
PART I - FINANCIAL INFORMATION PAGE
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<S> <C>
Item 1 - Consolidated Financial Statements
Consolidated Balance Sheets...................................................... 1
Consolidated Statements of Income (Loss)......................................... 2
Consolidated Statements of Changes in Stockholders' Equity....................... 3
Consolidated Statements of Changes in Cash Flows................................. 4
Notes to Consolidated Financial Statements....................................... 5
Item 2 - Management's Discussion and Analysis
Financial Condition.............................................................. 6-9
Results of Operations............................................................ 9-11
PART II - OTHER INFORMATION
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Items 1-5................................................................................. 12
Item 6 - Exhibits and Reports on Form 8-K................................................. 12
SIGNATURES................................................................................ 13
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GRANDBANC, INC.
CONSOLIDATED BALANCE SHEET
(in thousands)
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
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Unaudited Audited
<S> <C> <C>
ASSETS
Cash and due from banks $ 3,667 $ 2,455
Federal funds sold 3,705 624
Time deposits with banks - 3,300
Investment securities:
Available for sale - at fair value 2,820 3,657
Held to maturity - at amortized cost 13,262 12,821
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Total Investment Securities 16,082 16,478
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Loans 74,309 73,724
Less allowance for loan losses (824) (1,016)
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Loans - net 73,485 72,708
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Bank premises and equipment 2,036 1,823
Foreclosed real estate 1,354 975
Accrued interest receivable 787 618
Intangible assets 1,417 1,479
Other assets 1,085 665
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TOTAL ASSETS $ 103,618 $ 101,125
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LIABILITIES
Non-interest bearing deposits $9,999 9,806
Interest bearing deposits 82,975 81,477
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Total deposits 92,974 91,283
Federal funds purchased and other short-term borrowings 2,000 2,000
Long-term debt 1,500 1,500
Accrued expenses and other liabilities 346 321
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Total liabilities 96,820 95,104
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STOCKHOLDERS' EQUITY
Common stock - $.10 par value; 7,500,000 shares
authorized; shares outstanding 4,040,915 and
3,925,499, respectively 404 393
Additional paid-in capital 10,928 10,405
Accumulated deficit (4,387) (4,597)
Net unrealized holding loss on investment securities (147) (180)
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Total stockholders' equity 6,798 6,021
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TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 103,618 $ 101,125
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</TABLE>
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GRANDBANC, INC
CONSOLIDATED STATEMENTS OF INCOME
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
For the Six Second Quarter
Months Ended Ended
June 30, June 30,
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1997 1996 1997 1996
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<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans $3,490 $1,527 $1,769 $755
Interest on investment securities:
U. S. Government, its agencies, and sponsored entities 474 188 239 95
Other investments 51 8 0 8
Interest on federal funds sold 85 22 59 19
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Total interest income 4,100 1,745 2,067 877
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INTEREST EXPENSE:
Interest on certificates of deposit of $100,000 or more 308 43 180 22
Interest on other deposits 1,580 488 767 249
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1,888 531 947 271
Interest on short-term borrowings 69 48 36 30
Interest on long term debt 83 8 39 1
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Total interest expense 2,040 587 1,022 302
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NET INTEREST INCOME 2,060 1,158 1,045 575
PROVISION FOR LOAN LOSSES 8 - 8 -
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NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 2,052 1,158 1,037 575
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NON-INTEREST INCOME:
Service charges on deposit accounts 147 175 65 101
Other income 88 65 48 35
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Total non-interest income 235 240 113 136
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NON-INTEREST EXPENSE:
Salaries and employee benefits 999 624 512 303
Occupancy and equipment expense 467 278 249 147
Data processing services 190 127 110 64
FDIC insurance 21 5 11 2
Insurance 27 35 15 19
Legal fees 25 88 12 45
Other real estate owned expense 11 17 7 11
Other expenses 337 189 168 101
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Total non-interest expense 2,077 1,363 1,084 692
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INCOME (LOSS) BEFORE INCOME TAXES 210 35 66 19
APPLICABLE INCOME TAX - 3 - 2
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NET INCOME (LOSS) $ 210 $ 32 $ 66 $ 17
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EARNINGS PER COMMON SHARE: $ 0.05 $ 0.01 $ 0.02 $ 0.01
</TABLE>
2
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GRANDBANC, INC.
CONSOLIDATED STATEMENTS OF CHANGES
IN STOCKHOLDERS' EQUITY
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Additional Unrealized Total
Common Paid-In Accumulated Holding (Loss) Stockholders'
Stock Capital (Deficit) on Securities Equity
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<S> <C> <C> <C> <C> <C>
Balance at December 31, 1995 $ 326 $ 8,476 $ (4,805) $ (257) $ 3,740
Net income for the six months
ended June 30, 1996 - - 32 - 32
Net change in unrealized loss on
investment securities - - - 17 17
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Balance at June 30, 1996 $ 326 $ 8,476 $ (4,773) $ (240) $ 3,789
============== ============== ============== ============== ==============
Balance at December 31, 1996 $ 393 $ 10,405 $ (4,597) $ (180) $ 6,021
Net income for the six months
ended June 30, 1997 - - 210 - 210
Issuance of common stock 11 523 - - 534
Net change in unrealized loss on
investment securities - - - 33 33
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Balance at June 30, 1997 $ 404 $ 10,928 $ (4,387) $ (147) $ 6,798
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</TABLE>
3
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GRANDBANC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
For Six Months Ended For Three Months Ended
June 30, June 30,
1997 1996 1997 1996
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<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 210 $ 32 $ 66 $ 17
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation 109 51 53 25
Accretion and amortization of securities (2) (7) (5) (4)
Amortization of intangibles 62 - 40 -
Net changes in:
Accrued interest receivable (170) (56) 23 (40)
Foreclosed real estate (379) - 76 -
Other assets (418) (90) (314) (92)
Accrued expenses and other liabilities 24 22 (127) 13
Other - net 64 196 40 44
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Net cash provided (used) by operating activities (500) 148 (148) (37)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturity of time deposit 1,300 95 1,300 -
Net (increase) decrease in federal funds sold (1,081) (705) 2,470 (219)
Purchases of available for sale securities (177) (407) - (80)
Purchases of held to maturity securities (2,600) (500) (1,000) -
Proceeds from maturities/principal payments on
available for sale securities 1,000 - - -
Proceeds from maturities/principal payments on
held to maturity securities 2,205 500 1,110 -
Proceeds from sale of available for sale securities - 250 - 250
Net increase in loans originated (838) (2,471) (433) (712)
Purchases of bank premises and equipment (322) (99) (192) (91)
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Net cash provided (used) by investing activities (513) (3,337) 3,255 (852)
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CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits 1,691 1,230 (1,693) 876
Net increase in federal funds purchased and
other short-term borrowings - (59) - -
Net increase in advances from Federal Home Loan Bank - 2,200 - -
Proceeds from issuance of common stock 534 - - -
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Net cash provided (used) by financing activities 2,225 3,371 (1,693) 876
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NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,212 182 1,414 (13)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,455 1,557 2,253 1,752
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CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 3,667 $ 1,739 $ 3,667 $ 1,739
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Supplemental disclosures:
Interest payments $ 1,948 $ 565 $ 1,122 $ 259
Income tax payments - 3 - 2
Noncash investing and financing activities:
Unrealized gain (loss) on investment securities available for sale 31 14 24 (3)
</TABLE>
4
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Management is responsible for the financial statements, which have been
prepared in accordance with generally accepted accounting principles. The
financial statements contained herein, except for the financial statements as
of December 31, 1996, are unaudited. In management's opinion, the financial
statements present fairly the financial condition of the Corporation and its
subsidiary at June 30, 1996 and June 30, 1997, and all adjustments necessary to
fairly state the results of operations and financial condition are reflected
and that such adjustments are of a normal recurring nature. The results of
operations presented for the three and six months ended June 30, 1997 are not
necessarily indicative of the results of operations to be expected for the
remainder of the year.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
This Management's Discussion and Analysis contains forward-looking
statements, including statements of goals, intentions and exceptions, regarding
or based upon general economic conditions, interest rates, developments in
national and local markets, and other matters, and which, by their nature, are
subject to significant uncertainties so that actual future results may differ
from those stated.
5
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FINANCIAL CONDITION
GrandBanc, Inc.'s (the "Corporation") total assets at June 30, 1997 of
$103.6 million reflected an increase of $2.5 million or 2.47% from December 31,
1996.
The Corporation's Stockholders' Equity of $6.8 million at June 30, 1997
reflected an increase of $777 thousand or 12.9% from December 31, 1996. The
increase is attributable primarily to earnings from operations of $210 thousand
and the proceeds from the private placement of shares of common stock at an
aggregate price of $535 thousand.
Total loans of the Corporation's wholly owned financial institution
subsidiary, GrandBank, (the "Bank") at June 30, 1997 of $74.3 million
reflected an increase of $585 thousand from December 31, 1996.
Other assets increased primarily as a result of capitalization of costs
associated with data processing improvements that will be charged to operations
over future periods. Total deposits of the Bank at June 30, 1997 of $93 million
reflected an increase of $1.7 million or 1.85% from December 1996. During the
six months ended June 30, 1997, non-interest bearing deposits increased $193
thousand or 1.97% while interest bearing deposits increased $1.5 million or
1.84%. At June 30, 1997, non-interest bearing deposits are approximately 11% of
total deposits.
6
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Liquidity. The Bank's liquidity position, those assets invested in cash,
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federal funds, and obligations of the U.S. Government, its agencies, and
sponsored entities classified as available for sale, totaling $10.2 million,
reflected an increase of $156 thousand or 1.55% from December 31, 1996. Funds
available through the Bank's sources of short term borrowing, asset maturities,
and available-for-sale securities are considered adequate to meet current
needs. However, the Bank continues to evaluate the asset and liability mix to
ensure that adequate liquidity is maintained.
The Bank's loan to deposit ratio was 80% at June 30, 1997 compared to 81% at
December 31, 1996.
Investment Activity. The Corporation invests in various types of liquid
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assets, including United States Treasury obligations, securities of federal
government agencies and government sponsored entities, certain certificates of
deposit, federal funds, and other qualifying liquid investments. During the
first quarter of 1997, securities totaling $2 million matured or were called
and securities totaling $1.8 million were acquired. During the second quarter
of 1997, securities totaling $1 million matured or were called and securities
totaling $1 million were acquired.
Allowance for Loan Losses. The allowance for loan losses at June 30, 1997
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was $824 thousand or 1.11% of total loans outstanding, compared to $1 million
or 1.38% at December 31, 1996. Charge offs during the six months ended June
30, 1997 totaled $252 thousand consisting primarily of one foreclosed real
estate loan that was written
7
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down by $235 thousand to reflect its estimated fair value at foreclosure. At
June 30, 1997, the allowance for loan losses was 76% of non-performing loans
compared to 79% at December 31, 1996. In management's opinion the allowance for
loan losses as of June 30, 1997 was adequate to cover potential losses that can
be anticipated at this time based on current risks and knowledge of the
portfolio.
Non-performing Loans and Assets. The Bank's non-performing assets totaling
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$2.6 million consist of loans delinquent 90 days or more, non-accrual loans,
restructured loans and other real estate owned ("OREO"). The percentage of
non-performing assets to total assets increased to 2.50% at June 30, 1997 from
2.24% at December 31, 1996.
Non-performing loans totaled $1.1 million at June 30, 1997 compared to $1.3
million at December 31, 1996. Non-performing loans at June 30, 1997 consist of
loans delinquent 90 days or more totaling $557 thousand, two loans in
non-accrual status in the amount of $165 thousand and one restructured loan in
the amount of $356 thousand. This restructured loan has been renegotiated and
is currently performing within its new terms.
At June 30, 1997, OREO was $1.35 million compared to $975 thousand at
December 31, 1996. The increase is a result of the foreclosure of one property
in the first quarter of 1997. Generally, the Bank evaluates the fair value of
each property owned annually. These evaluations may be appraisals or other
market studies. At June 30, 1997,
8
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management believes the carrying amounts for OREO properties approximate fair
value.
Stockholders' Equity. Stockholders' equity of $6.8 million at June 30, 1997
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increased $777 thousand from December 31, 1996. The increase results
primarily from earnings of $210 thousand for the period and $535 thousand
proceeds from the sale of common stock in private transactions completed in
February 1997.
Capital Adequacy and Regulatory Requirements. At June 30, 1997, the Bank's
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ratio of Tier I capital to total average assets equaled 7.25%, which exceeded
the minimum leverage capital ratio of 4% by 3.25%. The Tier I capital to risk
weighted assets ratio was 9.44% which exceeded the minimum required ratio of 4%
by 5.44%. The Bank's total capital to risk-weighted assets ratio at June 30,
1997 was 10.49% which exceeded the minimum required ratio of 8% by 2.49%.
RESULTS OF OPERATIONS
For the six months ended June 30, 1997, the Corporation had net income of
$210 thousand compared to net income from the corresponding period in 1996 of
$32 thousand, an increase of $178 thousand.
The earnings per share were $0.05 for the six months ended June 30, 1997,
compared to $0.02 for the same period in 1996.
9
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Net Interest Income. Net interest income is the difference between interest
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income on earning assets and interest expense on interest bearing deposits and
borrowings. Net interest income for the six month period ended June 30, 1997
of $2.06 million reflected an increase of $902 thousand or 78% compared to the
corresponding period in 1996. Interest income for the six month period ended
June 30, 1997 was $4.1 million, an increase of $2.4 million or 135% from the
same period in 1996. Interest expense of $2 million for the period ended June
30, 1997 reflected an increase $1.4 million or 247%. Each of these increases
is due to increases in the average outstanding balances resulting from the
acquisition of certain assets and liabilities of First Commonwealth Savings
Bank of Alexandria Virginia in September 1996.
The average yield on interest earning assets for the six month period ended
June 30, 1997, was 8.68% compared to 8.74% for the six months ended June 30,
1996. The average cost of funds for the six months ended June 30, 1997, was
4.14% compared to 3.80% for the same period in 1996. Additionally, the net
interest margin was 4.67% for the period ended June 30, 1997 compared to 5.80%
for the corresponding period in 1996. The decline in net interest margin is
primarily the result of a higher cost of funds due to the acquisition
previously described. Deposits acquired were mostly certificates of deposit
that pay higher interest than demand deposits and money market accounts.
Provision for Loan Losses. There was a provision for loan losses in the
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amount of $8 thousand in the second quarter of 1997.
10
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Noninterest Income. Non-interest income for the six month period ended June
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30, 1997, was $235 thousand compared to $240 thousand for the six months ended
June 30, 1996, a decrease of $5 thousand or 2%.
Noninterest Expense. Noninterest expense for the period ended June 30, 1997
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of $2.08 million reflected an increase of $714 thousand or 52% compared to the
corresponding period of 1996. Salaries and benefits increased by $375 thousand
or 60%. Occupancy and equipment increased by $189 thousand or 68%. Data
processing services increased by $63 thousand or 50% and other expenses
increased by $148 thousand or 78%. Each of these increases is a direct result
of the acquisition previously described.
Applicable Income Tax. Net operating loss carryforwards offset current
- ---------------------
taxable income.
11
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PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS N/A
ITEM 2 - CHANGES IN SECURITIES
(a) Refer to Item 4, submission of matters to a vote of Security Holders.
(b) N/A
(c) N/A
ITEM 3 - DEFAULTS UPON SENIOR SECURITIES N/A
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The Annual Meeting of Shareholders was held on April 17, 1997.
(b) The following persons were elected as Directors of the Company to serve
for a period of one year:
Abbey J. Butler
Steven K. Colliatie
Melvyn J. Estrin
Nella C. Manes
Avis Y. Pointer
Joan H. Schonholtz
(c) The following items were also voted on at the Annual Meeting:
1) The amendment of Article SECOND of the Articles of Incorporation
of the Company (the "Articles of Incorporation") to change the
name of the Company to "GrandBanc, Inc.";
Affirmative votes: 3,508,440
Negative votes: 3,758
2) The amendment of Article SIXTH of the Articles of Incorporation
to increase the total number shares of capital stock that the
Company is authorized to issue; to increase the total number of
shares of Common Stock that the Company is authorized to issue
to twenty million (20,000,000); and to authorize the issuance of
up to two million five hundred thousand (2,500,000) shares of
preferred stock, the terms of which may be determined by the
Board of Directors at the time of issuance, and to eliminate the
existing class of preferred stock;
12
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Affirmative votes: 3,318,873
Negative votes: 28,881
3) The amendment of Article EIGHTH of the Articles of Incorporation to
require written notice of a stockholder's intent to make any nomination
for director or to seek action on any business matter at a meeting of
stockholders;
Affirmative votes: 3,089,150
Negative votes: 275,636
4) The amendment of Article EIGHTH to require the consideration of
noneconomic factors in respect of any proposed business combination
transaction;
Affirmative votes: 3,028,190
Negative votes: 60,580
ITEM 5 - OTHER INFORMATION N/A
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
3.1 (a) Articles of Incorporation, April 4, 1983
(b) Articles of Share Exchange, August 9, 1983
(c) Articles of Amendment, June 7, 1984
(d) Articles of Amendment, May 7, 1987
(e) Articles of Amendment, September 14, 1988
(f) Articles of Amendment, April 22, 1993
(g) Articles of Amendment, May 6, 1997
(11) Statement regarding computation of per share earnings: Earnings per
share have been computed based upon 3,998,822 shares, the weighted
average number of shares outstanding during the period ended June 30,
1997.
(27) Financial Data Schedule: Filed herewith.
13
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B. Reports on Form 8-K
None
SIGNATURES
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In accordance with the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
GRANDBANC, INC.
(Registrant)
Date: August 5, 1997 /s/ Steven K. Colliatie
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Steven K. Colliatie
President & CEO
Date: August 5, 1997 /s/ David L. Erickson
-------------- ----------------------------
David L. Erickson
Chief Financial Officer
14
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EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
FWB BANCORPORATION
approved and received for record by the State Department of Assessments and
Taxation of Maryland April 4, 1983 at 3:26 o'clock p.m. as in conformity with
law and ordered recorded.
--------------------------------
Recorded in Liber 2586, 00367, one of the Charter Records of the State
Department of Assessments and Taxation of Maryland.
--------------------------------
Bonus tax paid $490.00 Recording fee paid $20.00 Special Fee paid $
-------
--------------------------------
To the Clerk of the Court of Montgomery County
IT IS HEREBY CERTIFIED, that the within instrument, together with all
Indorsements thereon, has been received, approved and recorded by the State
Department of Assessments and Taxation of Maryland.
AS WITNESS my hand and seal of the said Department at Baltimore.
<PAGE>
FWB BANCORPORATION
ARTICLES OF INCORPORATION
FIRST: THE UNDERSIGNED, Leonard A. Sloan, whose address is 12500
Lincolnshire Drive, Potomac, Maryland 20854, being at least eighteen years of
age, acting as incorporator, does hereby form a corporation under the General
Laws of the State of Maryland.
SECOND: The name of the corporation (which is hereinafter called the
"Corporation") is:
FWB BANCORPORATION
THIRD: The purposes for which and any of which the Corporation is formed
and the business and objects to be carried on and promoted by it are:
(1) To acquire by purchase, subscription or otherwise, and to
receive, hold, own, guarantee, sell, assign, exchange, transfer, mortgage,
pledge or otherwise dispose of or deal in and with any and all securities,
as such term is hereinafter defined, issued or created by any corporation,
firm, organization, association or other entity, public or private, whether
formed under the laws of the United States of America or of any state,
commonwealth, territory, dependency or possession thereof, or of any
foreign country or of any political subdivision, territory, or issued or
created by the United States of America or any state or commonwealth
thereof of any foreign country, or by any agency, subdivision, territory,
dependency, possession or municipality of any of the foregoing, and as
owner thereof to posses and exercise all the rights, powers and privileges
of ownership, including the right to execute consents and vote thereon, and
to do any and all acts and things necessary or advisable for the
preservation, protection, improvement and enhancement in value thereof.
The term "securities" as used in this Article shall mean any and all
notes, stocks, treasury stocks, bonds, debentures, evidences of
indebtedness, certificates of interest or participation in any profit-
sharing agreement, collateral-trust certificates, preorganization
certificates or subscriptions, transferable shares, investment contracts,
voting trust certificates, certificates of deposit for a security,
fractional undivided interests in oil, gas or other mineral rights, or, in
general, any interests or instruments commonly known as "securities" or any
and all certificates of interest or participation in, temporary or interim
certificates for, receipts for, guaranties of, or warrants or rights to
subscribe to or purchase, any of the foregoing.
<PAGE>
(2) To engage in any one or more businesses or transactions, or to
acquire all of any portion of any entity engaged in any one or more
businesses or transactions which the Board of Directors may from time to
time authorize or approve, whether or not related to the business described
elsewhere in this Article or to any other business at the time or
theretofore engaged in by the Corporation.
The forgoing enumerated purposes and objects shall be in no way limited or
restricted by reference to, or inference from, the terms of any other clause of
this or any other Article of the charter of the Corporation, and each shall be
regarded as independent; and they are intended to be and shall be construed as
powers as well as purposes and objects of the Corporation and shall be in
addition to and not in limitation of the general powers of corporations under
the General Laws of the State of Maryland.
FOURTH: The present address of the principal office of the Corporation in
this State is 1800 Rockville Pike, Rockville, Maryland 20852.
FIFTH: The name and address of the resident agent or the Corporation in
this State is First Women's Bank of Maryland, 1800 Rockville Pike, Rockville,
Maryland 20852. Said resident agent is a Maryland corporation.
SIXTH: The total number of shares of stock of all classes which the
corporation has authority to issue is 1,000,000 shares of Common Stock (par
value $10 per share), amounting to aggregate par value to $10,000,000.
SEVENTH: The number of directors of the Corporation shall be fifteen,
which number may be increased or decreased pursuant to the By-Laws of the
Corporation, but shall never be less than the minimum number permitted by the
General Laws of the State of Maryland now or hereafter in force. The names of
the directors who will serve until the first annual meeting and until their
successors are elected and qualify are as follows:
Sondra D. Bender Judith R. Cohen
Evelyn R. Coppersmith Melvyn J. Estrin
Angelo R. Giudice Eve R. Grover
Gloria G. Haft Lelia E. Imas
Anne S. Klein Walter H. Layman
Francine G. Levinson Nella C. Manes
Avis Y. Pointer Joan H. Schonholtz
Leonard A. Sloan Bruce C. Winston
EIGHTH: The following provisions are hereby adopted for the purpose of
defining, limiting, and regulating the powers of the Corporation and of the
directors and stockholders:
(1) The Board of Directors is hereby empowered to authorize the
issuance from time to time of shares of its stock of any class, whether now
or hereafter authorized, or
<PAGE>
securities convertible into shares of its stock of any class or classes,
whether now or hereafter authorized, for such consideration as may be
deemed advisable by the Board of Directors and without any action by the
stockholders.
(2) No holder of any stock or any other securities of the
Corporation, whether now or hereafter authorized, shall have any preemptive
right to subscribe for or purchase any stock or any other securities of the
Corporation other than such, if any, as the Board of Directors, in its sole
discretion, may determine and at such price or prices and upon such other
terms as the Board of Directors, in its sole discretion, may fix; and any
stock or other securities which the Board of Directors may determine to
offer for subscription may, as the Board of Directors in its sole
discretion shall determine, be offered to the holders of any class, series
or type of stock or other securities at the time outstanding to the
exclusion of the holders of any or all other classes, series or types of
stock or other securities at the time outstanding.
(3) The Board of Directors shall have power from time to time and in
its sole discretion to determine in accordance with sound accounting
practice, what constitutes annual or other net profits, earnings, surplus,
or net assets in excess of capital; to fix and vary from time to time the
amount to be reserved as working capital, or determine that retained
earnings shall remain in the hands of the Corporation; to set apart out of
any funds of the Corporation such reserve or reserves in such amount or
amounts and for such proper purpose or purposes as it shall determine and
to abolish any such reserve or any part thereof; to distribute and pay
distributions or dividends in stock, cash or other securities or property,
out of surplus or any other funds or amounts legally available therefor, at
such times and to the stockholders of record on such dates as it may, from
time to time, determine; and to determine whether and to what extent and to
what times and places and under what conditions and regulations the books,
accounts and documents of the Corporation, or any of them shall be open to
the inspection of stockholders, except as otherwise provided by statute or
by the By-Laws, and, except as so provided, no stockholder shall have any
right to inspect any book, account or document of the Corporation unless
authorized so to do by resolution of the Board of Directors.
(4) A contract or other transaction between the Corporation and any
of its directors or between the Corporation and any other corporation, firm
or other entity in which any of its directors is a director or has a
material financial interest is not void or voidable solely because of any
one or more of the following: the common directorship or interest; the
presence of the director at the meeting of the Board of Directors which
authorizes, approves or ratifies the contract or transaction; or the
counting of the vote of the director for the authorization, approval or
ratification of the contract or transaction. This section applies if:
<PAGE>
(a) the fact of the common directorship or interest is disclosed
or known to: the Board of Directors and the Board authorizes, approves
or ratifies the contract or transaction by the affirmative vote of a
majority of disinterested directors, even if the disinterested
directors constitute less than a quorum; or the stockholders entitled
to vote, and the contract or transaction is authorized, approved or
ratified by a majority of the votes cast by the stockholders entitled
to vote other than the votes of shares owned of record or beneficially
by the interested director or corporation, firm, or other entity; or
(b) the contract or transaction is fair and reasonable to the
Corporation.
Common or interested directors or the stock owned by them or by an
interested corporation, firm, or other entity may be counted in determining
the presence of a quorum at a meeting of the Board of Directors or at a
meeting of the stockholders, as the case may be, at which the contract or
transaction is authorized, approved or ratified. If a contract or
transaction is not authorized, approved or ratified in one of the ways
provided for in clause (a) of the second sentence of this Section, the
person asserting the validity of the contract or transaction bears the
burden of proving that the contract or transaction was fair and reasonable
to the Corporation at the time it was authorized, approved or ratified. The
procedures in this Section do not apply to the fixing by the Board of
Directors of reasonable compensation for a director, whether as a director
or in any other capacity.
(5) The Corporation shall indemnify (a) its directors to the full extent
provided by the general laws of the State of Maryland now or hereafter in
force, including the advance of expenses under the procedures provided by
such laws; (b) its officers to the same extent it shall indemnify its
directors; and (c) its officers who are not directors to such further
extent as shall be authorized by the Board of Directors and be consistent
with law. The foregoing shall not limit the authority of the Corporation to
indemnify other employees and agents consistent with law.
(6) The Corporation reserves the right from time to time to make any
amendments of its charter which may now or hereafter be authorized by law,
including any amendments changing the terms or contract rights, as
expressly set forth in its charter, of any of its outstanding stock by
classification, reclassification or otherwise; but no such amendment which
changes such terms or contract rights of any of its outstanding stock shall
be valid unless such amendment shall have been authorized by not less than
a majority of the aggregate number of the votes entitled to be cast
thereon, by a vote at a meeting or in writing with or without a meeting.
<PAGE>
The enumeration and definition of particular powers of the Board of
Directors included in the foregoing shall in no way be limited or restricted by
reference to or in reference from the terms of any other clause of this or any
other Article of the charter of the Corporation, or construed as or deemed by
inference or otherwise in any manner to exclude or limit any powers conferred
upon the Board of Directors under the General Laws of the State of Maryland now
or hereafter in force.
NINTH: The duration of the Corporation shall be perpetual.
IN WITNESS WHEREOF, I have signed these Articles of Incorporation,
acknowledging the same to be my act, on April 4, 1983.
WITNESS:
/s/ Fritz W. Davis /s/ Leonard A. Sloan
------------------ --------------------
Leonard A. Sloan
<PAGE>
ARTICLES OF SHARE EXCHANGE
BETWEEN
FIRST WOMEN'S BANK OF MARYLAND, INC. (MD Trust Co.)
Acquired Corp
AND
FWB BANCORPORATION (MD CORP) Acquiring Corp
Received for record August 9, 1983 at 12:05 p.m. and recorded on Film No. 2609
Frame No. 3093 one of the charter records of the State Department of Assessments
and Taxation of Maryland.
To the clerk of the Circuit Court of Montgomery County
AA No. 19245
Recording Fee Paid $20.00
<PAGE>
ARTICLES OF SHARE EXCHANGE
BETWEEN
FIRST WOMEN'S BANK OF MARYLAND
(a Maryland trust company)
AND
FWB BANCORPORATION
(a Maryland corporation)
FIRST WOMEN'S BANK OF MARYLAND, a trust company duly organized and existing
under the laws of the State of Maryland (the "Bank"), and FWB BANCORPORATION, a
corporation duly organized and existing under the laws of the State of Maryland
(the "Corporation"), do hereby certify that:
FIRST: The Corporation agrees to acquire all of the issued and outstanding
stock of the Bank, and the Bank agrees to have such stock acquired by the
Corporation, in a Statutory share exchange.
SECOND: The name and place of incorporation of each party to these Articles
are First Women's Bank of Maryland, a Maryland trust company, and FWB
Bancorporation, a Maryland corporation. The Corporation is acquiring the stock
of the Bank in the share exchange. THIRD: The bank has its principal office in
Montgomery County, Maryland. The Corporation has its principal office in
Montgomery County, Maryland.
FOURTH: The terms and conditions of the transaction set forth in these
Articles were advised, authorized, and approved by each corporation party to
these Articles in the manner and by the vote required by its Charter and the
laws of Maryland. The manner of approval was as follows:
(a) The Board of Directors of the Bank, at a meeting held on April 5,
1963, adopted a resolution which declared that the proposed share
exchange was advisable on substantially the terms and conditions set
forth or referred to in the resolution and directed that the proposed
share exchange be submitted for consideration at a special meeting of
the stockholders of the Bank.
(b) The Board of Directors of the Corporation at a meeting held on
April 5, 1983, adopted a resolution approving the proposed share
exchange on substantially the terms and conditions set forth or
referred to in the resolution.
<PAGE>
(c) Notice which stated that a purpose of the meeting was to act on
the proposed share exchange was given by the Bank as required by law
to each of its stockholders entitled to vote on the proposed share
exchange.
(d) The proposed share exchange was approved by the stockholders of
the Bank at a special meeting of stockholders held August 8, 1983, by
the affirmative vote of two-thirds of all votes entitled to be cast on
the matter.
FIFTH: The total number of shares which the Bank has authority to issue is
250,000 shares of Common Stock (par value $10.00 per share), the aggregate par
value of which shares if $2,500,000.
SIXTH: The manner and basis of exchanging the stock of the Bank to be
acquired for the stock to be issued by the Corporation, the successor, are as
follows :
(a) On the effective date of the share exchange, each stockholder of
the Bank shall cease to be a stockholder of the Bank, and the
ownership of all of the issued and outstanding Common Stock of the
Bank shall vest in the Corporation automatically without any physical
transfer or deposit or certificates representing such shares.
(b) Certificates representing issued and outstanding Common Stock of
the Bank shall on the effective date of the share exchange, represent
an equal number of issued and outstanding shares of Common Stock of
the Corporation.
SEVENTH: The share exchange shall become effective upon acceptance for
record by the Maryland State Department of Assessments and Taxation of these
Articles.
<PAGE>
IN WITNESS WHEREOF, the Bank and the Corporation have caused these Articles
of Share Exchange to be duly executed and their corporate seals to be hereunto
affixed and attested as of 8th day of August 1983.
ATTEST FIRST WOMEN'S BANK OF MARYLAND
- ------
/s/ Avis Y. Pointer By: /s/ Eve R. Grover
- -------------------------- ---------------------------
Avis Y. Pointer, Secretary Eve R. Grover, President
ATTEST FWB CORPORATION
- ------
/s/ Avis Y. Pointer By: /s/ Melvyn J. Estrin
- -------------------------- ---------------------------
Avis Y. Pointer, Secretary Melvyn J. Estrin, President
THE UNDERSIGNED, Eve R. Grover, the President of FIRST WOMEN'S BANK OF
MARYLAND, and Melvyn J. Estrin, the President of FWB BANCORPORATION, who
executed on behalf of said corporations the foregoing Articles of Share
Exchange, of which this certificate is made a part, hereby acknowledge in the
name and on behalf of said corporations, the foregoing Articles of Share
Exchange to be the corporate act of said corporations, and further certifies
that, to the best of their knowledge, information and belief, the matters and
facts set forth therein with respect to the approval thereof by such
corporations are true in all material respects under the penalties of perjury.
/s/ Eve R. Grover
---------------------------
Eve R. Grover
President of First Women's
Bank of Maryland
/s/ Melvyn J. Estrin
---------------------------
Melvyn J. Estrin
President of FWB
Bancorporation
<PAGE>
CERTIFICATE OF APPROVAL
The foregoing Articles of Share Exchange between FIRST WOMEN'S BANK OF
MARYLAND and FWB BANCORPORATION are hereby approved on August 9, 1983.
/s/ Charles R.Georgius
---------------------------
Deputy Bank Commissioner
<PAGE>
ARTICLES OF AMENDMENT
OF
FWB BANCORPORATION
approved and received for record by the State Department of Assessments and
Taxation of Maryland June 7, 1984 at 1:19 o'clock P.M. as in conformity with law
and ordered recorded
---------------------------
Recorded in Liber 2653, folio 000661, one of the Charter Records of the
State Department of Assessments and Taxation of Maryland.
---------------------------
Bonus tax paid $ Recording fee paid $20.00 Special Fee paid $
------ ------
---------------------------
To the clerk of the Circuit Court of Montgomery County
IT IS HEREBY CERTIFIED, that the within instrument, together with all
Indorsements thereon, has been received, approved and recorded by the State
Department of Assessments and Taxation of Maryland.
AS WITNESS my hand and seal of the said Department at Baltimore
<PAGE>
FWB BANCORPORATION
----------------
ARTICLES OF AMENDMENT
(Under Sections 2-602, 2-604, 2-607)
----------------
FWB BANCORPORATION, a Maryland corporation having its principal office in
Montgomery County, Maryland (hereinafter called the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation that:
FIRST: The Articles of Incorporation of the Corporation are hereby amended
-----
by changing ARTICLE SIXTH thereof to read as follows:
"SIXTH: The total number of shares of stock of all classes which the
Corporation has authority to issue is 1,250,000 shares of Common Stock (par
value $8.00 per share), amounting to aggregate par value of $10,000,000."
SECOND: Prior to the aforesaid amendment, the authorized capital stock of
------
the Corporation was as follows:
Aggregate
Class Number Par Value Par Value
------ --------- --------- -----------
Common 1,000,000 $10.00 $10,000,000
THIRD: The Board of Directors of the Corporation, at a Special Meeting held
-----
on April 17, 1984, unanimously adopted the Resolution amending Article Sixth of
the Articles of Incorporation and deemed that the Resolution was advisable,
which was subsequently approved by the Stockholders at a meeting held on May 29,
1984.
<PAGE>
IN WITNESS WHEREOF, FWB BANCORPORATION, has caused these presents to be
signed in its name and on its behalf by its President and its corporate seal to
be hereunto affixed and attested by its Secretary, who do hereby certify under
penalties of perjury that the aforesaid Amendment is a duly authorized act of
the Corporation, this 4th day of June 1984.
ATTEST FWB BANCORPORATION
- ------ ------------------
/s/ Sharon Weedy By: /s/ Melvyn J. Estrin
- --------------------------------- ---------------------------
Sharon Weedy, Assistant Secretary Melvyn J. Estrin, President
<PAGE>
ARTICLES OF AMENDMENT
OF
FWB BANCORPORATION
APPROVED AND RECEIVED FOR RECORD BY THE STATE DEPARTMENT OF ASSESSMENTS AND
TAXATION OF MARYLAND May 7, 1987 at 9:02 O'CLOCK am. AS IN CONFORMITY WITH LAW
AND ORDERED RECORDED
-----------------------
ORGANIZATION AND RECORDING SPECIAL
CAPITALIZATION FEE PAID FEE PAID FEE PAID
$ $ 20 $
--------------- ------- -------
-----------------------
TO THE CLERK OF THE COURT OF Montgomery County
IT IS HEREBY CERTIFIED, THAT THE WITHIN INSTRUMENT TOGETHER WITH ALL
INDORSEMENTS THEREON, HAS BEEN RECEIVED, APPROVED AND RECORDED BY THE STATE
DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND.
<PAGE>
STATE DEPARTMENT OF ASSESSMENTS
AND TAXATION
APPROVED FOR RECORD
5/7/87 AT 9:02 a.m.
FWB BANCORPORATION
----------------
ARTICLES OF AMENDMENT
(Under Sections 2-602, 2-604, 2-607)
----------------
FWB BANCORPORATION, a Maryland corporation having its principal office in
Montgomery County, Maryland (hereinafter called the "Corporation"), hereby
certifies to the State Department of Assessments and Taxation that:
FIRST: The Articles of Incorporation of the Corporation are hereby amended
-----
by changing ARTICLE SIXTH thereof to read as follows:
"SIXTH: The total number of shares of stock of all classes which the
Corporation has authority to issue is 2,500,000 shares of Common Stock (par
value $4.00 per share), amounting to aggregate par value of $10,000,000."
SECOND: Prior to the aforesaid amendment, the authorized capital stock of
------
the Corporation was as follows:
Aggregate
Class Number Par Value Par Value
----- ------ --------- ---------
Common 1,250,000 $8.00 $10,000,000
THIRD: The Board of Directors of the Corporation, at a Special Meeting held
-----
on March 24, 1987, unanimously adopted the Resolution amending Article Sixth of
the Articles of Incorporation and deemed that the Resolution was advisable,
which was subsequently approved by the Stockholders at a meeting held on April
28, 1987.
<PAGE>
IN WITNESS WHEREOF, FWB BANCORPORATION, has caused these presents to be
signed in its name and on its behalf by its President and its corporate seal to
be hereunto affixed and attested by its Secretary, who do hereby certify under
penalties of perjury that the aforesaid Amendment is a duly authorized act of
the Corporation, this 5th day of May 1987.
ATTEST FWB BANCORPORATION
- ------ ------------------
/s/ Ellen M. Prete By: /s/ Leonard A. Sloan
- ----------------------------------- -------------------------------
Ellen M. Prete, Assistant Secretary Leonard A. Sloan, President
(Corporate Seal)
<PAGE>
ARTICLES OF AMENDMENT
OF
FWB BANCORPORATION
APPROVED AND RECEIVED FOR RECORD BY THE STATE DEPARTMENT OF ASSESSMENTS AND
TAXATION OF MARYLAND September 14, 1988 at 8:15 O'CLOCK a.m. AS IN CONFORMITY
WITH LAW AND ORDERED RECORDED.
----------------------
ORGANIZATION AND RECORDING SPECIAL
CAPITALIZATION FEE PAID FEE PAID FEE PAID
$ $ 20 $
------------- ------- -------
----------------------
TO THE CLERK OF THE COURT OF Montgomery County
IT IS HEREBY CERTIFIED, THAT THE WITHIN INSTRUMENT TOGETHER WITH ALL
INDORSEMENTS THEREON, HAS BEEN RECEIVED, APPROVED AND RECORDED BY THE STATE
DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND.
RETURN TO:
MARY C. FEATHERSTON
1101 17TH STREET, N.W.
SUITE 1205
WASHINGTON, DC 20036
<PAGE>
FWB BANCORPORATION
----------------
ARTICLES OF AMENDMENT
(Under Sections 2-602, 2-604, 2-607)
----------------
FWB BANCORPORATION, a Maryland corporation having its principal office in
Montgomery County, Maryland (hereinafter called the "Corporation"), hereby
certifies to the Maryland State Department of Assessments and Taxation that:
FIRST: The Articles of Incorporation of the Corporation are hereby amended
-----
to amend Article EIGHTH by repealing paragraph (5) of that Article, and
renumbering paragraph (6) of that Article to become paragraph (5); and
SECOND: The Articles of Incorporation of the Corporation are hereby further
------
amended by adding Article TENTH thereto, which Article is to read in its
entirety as follows:
TENTH: To the maximum extent that Maryland law in effect from time to
time permits limitation of the liability of directors and officers, no
director or officer of the Corporation shall be liable to the Corporation
or its stockholders for money damages. Neither the amendment nor repeal of
this Article, nor the adoption or amendment of any other provision of the
Articles of Incorporation or By-Laws inconsistent with this Article, shall
apply to or affect in any respect the applicability of the preceding
sentence with respect to any act or failure to act which occurred prior to
such amendment, repeal or adoption.
THIRD: The Articles of Incorporation of the Corporation are hereby further
-----
amended by adding Article ELEVENTH thereto, which Article is to read in its
entirety as follows:
ELEVENTH: To the maximum extent permitted by Maryland law in effect
from time to time, the Corporation shall indemnify and, without requiring a
preliminary determination as to the ultimate entitlement of the individual
to be indemnified, shall pay or reimburse reasonable expenses in advance of
final deposition of a proceeding to (i) any individual who is a present or
former director or officer of the Corporation, or (ii) any individual who
serves or has served another corporation, partnership, joint venture,
trust, employee benefit plan or any
<PAGE>
other enterprise as a director or officer of such corporation or as a
partner or trustee of such partnership, joint venture, trust or employee
benefit plan at the request of the Corporation. The Corporation may, with
the approval of its Board of Directors, provide such indemnification and
advancement of expenses to a person who served a predecessor of the
Corporation in any of the capacities described in (i) or (ii) above and to
any employee or agent of the Corporation or a predecessor of the
Corporation. Neither the amendment nor repeal of this Article, nor the
adoption or amendment of any other provisions of the By-Laws or Articles of
Incorporation of the Corporation inconsistent with this Article, shall
apply to or affect in any respect the applicability of this Article with
respect to any act or failure to act which occurred prior to such
amendment, repeal or adoption.
FOURTH: The Board of Directors of the Corporation, by a Unanimous Consent
------
in Lieu of Special Meeting held on May 5, 1988, unanimously adopted the
Resolution amending Article EIGHTH and adding Articles TENTH and ELEVENTH of the
Articles of Incorporation and deemed that the Resolution was advisable, which
was subsequently approved by the Stockholders at a meting held on May 24, 1987.
IN WITNESS WHEREOF, the Corporation has caused these presents to be signed
in its name and on its behalf by its president and its corporate seal to be
hereunto affixed and attested by its Secretary, who do hereby certify under
penalties of perjury that the aforesaid Amendment is a duly authorized act of
the Corporation, this 25th day of May, 1988.
ATTEST FWB BANCORPORATION
- ------ ------------------
/s/ Ellen M. Prete By: /s/ Leonard A. Sloan
- ----------------------------------- ---------------------------
Ellen M. Prete, Assistant Secretary Leonard A. Sloan, President
(Corporate Seal)
<PAGE>
ARTICLES OF AMENDMENT
OF
FWB BANCORPORATION
APPROVED AND RECEIVED FOR RECORD BY THE STATE DEPARTMENT OF ASSESSMENTS AND
TAXATION OF MARYLAND April 22, 1993 at 8:53 O'CLOCK a.m. AS IN CONFORMITY WITH
LAW AND ORDERED RECORDED.
----------------------
ORGANIZATION AND RECORDING SPECIAL
CAPITALIZATION FEE PAID FEE PAID FEE PAID
$ $ 20 $
-------------- ------- -------
---------------------------
D1541101
TO THE CLERK OF THE COURT OF MONTGOMERY COUNTY
IT IS HEREBY CERTIFIED, THAT THE WITHIN INSTRUMENT TOGETHER WITH
ALL INDORSEMENTS THEREON, HAS BEEN RECEIVED, APPROVED AND RECORDED
BY THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND.
RETURN TO:
FWB Bank
ATTN Kimperly Yashek
P.O. Box 2022
Rockville, MD 20852-1624
<PAGE>
FWB BANCORPORATION
ARTICLES OF AMENDMENT
FWB BANCORPORATION, a Maryland corporation having its principal office in
Montgomery County, Maryland (hereinafter called the "Corporation") hereby
certifies to the Maryland State Department of Assessments and Taxation that:
FIRST: The Articles of Incorporation of the Corporation are hereby amended
-----
to amend Article SIXTH by replacing it to read in its entirety as follows:
SIXTH: The total number of shares of stock of all classes which the
corporation has authority to issue its 2,000,000 shares of Convertible
Cumulative Participating Preferred Stock, and 7,500,000 shares of
Common Stock (par value $.10 per share), amounting to aggregated par
value to $750,000.
IN WITNESS WHEREOF, the Bank has caused these presents to be signed in its name
and on its behalf by its President and its corporate seal to be hereunto affixed
and attested by its chairman, who do hereby certify under penalties of perjury
that the aforesaid Amendment is a duly authorized act of the Bank as of May 19,
1992.
ATTEST FWB BANCORPORATION
- ------ ------------------
/s/ Joan H. Schonholtz By: /s/ Steven K. Colliatie
- ---------------------- ----------------------------
Joan H. Schonholtz Steven K. Colliatie
Chairman of the Board President & CEO
<PAGE>
FWB BANCORPORATION
ARTICLES OF AMENDMENT
FWB Bancorporation, a Maryland corporation having its principal office in
the City of Rockville, Montgomery County, Maryland (the "Corporation"), hereby
certifies to the State Department of Taxation and Assessments that:
FIRST: The Charter of the Corporation is hereby amended as follows:
(1) Article SECOND of the Charter is amended to read in its entirety as
follows:
SECOND: The name of the corporation (hereinafter referred to as the
"Corporation") is: "GrandBanc, Inc.".
(2) Article SIXTH of the Charter is amended to read in its entirety as
follows:
SIXTH: The total number of shares of stock of all classes that the
Corporation has authority to issue is twenty two million five hundred thousand
shares (22,500,000), consisting of twenty million (20,000,000) shares of common
stock, par value $.10 per share, and two million five hundred thousand
(2,500,000) shares of preferred stock, par value $.01 per share, amounting in
aggregate par value to two million twenty five thousand dollars ($2,025,000).
The shares of authorized common stock of the Corporation shall be identical
in all respects and shall have equal rights and privileges.
The Board of Directors, by action of a majority of the full Board of
Directors, shall have the authority to issue the shares of preferred stock from
time to time on such terms as it may determine, and to divide the preferred
stock into one or more classes or series, and, in connection with the creation
of such classes or series to fix by resolution or resolutions the designations,
voting powers, preferences, participation, redemption, sinking fund, conversion,
dividend, and other optional or special rights of such classes or series, and
the qualifications, limitations or restrictions thereof.
(3) Article EIGHTH of the Charter is amended to add a new Section 6,
reading in its entirety as follows:
(6) A. Nominations for the election of directors to be taken up at any
annual meeting of stockholders may be made by the board of directors of the
Corporation or by any stockholder of the Corporation entitled to vote generally
in the election of directors. In order for a stockholder of the Corporation to
make any such nomination where such stockholder does not seek to have such
nomination included in the proxy materials prepared by the Corporation, such
stockholder shall give notice thereof in writing, delivered or mailed by first
class United States mail, postage prepaid, to the Secretary of the Corporation
not less than ninety (90) days before the first
<PAGE>
anniversary of the prior year's annual meeting, provided, however, that if the
meeting is advanced by more than thirty (30) days from the anniversary of the
prior year's meeting, then said stockholder shall give notice in the aforesaid
manner by the later of sixty (60) days prior to the date of the annual meeting
or ten (10) days after the date on which notice of the meeting is first given to
stockholders. Where directors are to be elected at a special meeting of
stockholders, stockholder nominations must be received not later than ten (10)
days after notice of the meeting is first given to stockholders.
Each such notice given by a stockholder with respect to nominations for
election of directors shall set forth (i) the name, age, business address and,
if known, residence address of each nominee proposed in such notice; (ii) the
principal occupation or employment of each such nominee; (iii) the number of
shares of stock of the Corporation that are beneficially owned by each such
nominee; (iv) such other information as would be required to be included in a
proxy statement soliciting proxies for the election of the proposed nominee
pursuant to Regulation 14A under the Securities and Exchange Act of 1934, as
amended, including, without limitation, such person's written consent to being
named in the proxy statement as a nominee and to serving as a director, if
elected, and a description of any arrangements, understandings or agreements
between the stockholder and any proposed nominee or other person with respect to
the nomination or election of any nominee; and (v) as to the stockholder giving
such notice (a) his name and address as they appear on the Corporation's books;
and (b) the class and number of shares of the Corporation that are beneficially
owned by the stockholder. In addition, the stockholder making such nomination
shall promptly provide any other information reasonably requested by the
Corporation.
B. Proposals for any new business to be taken up at any annual meeting of
stockholders may be made by the board of directors of the Corporation or by any
stockholder of the Corporation entitled to vote generally in the election of
directors. In order for a stockholder of the Corporation to make any such
proposal where such stockholder does not seek to have such proposal included in
the proxy materials prepared by the Corporation, such stockholder shall give
notice thereof in writing, delivered or mailed by first class United States
mail, postage prepaid, to the Secretary of the Corporation not less than ninety
(90) days before the first anniversary of the prior year's annual meeting,
provided, however, that if the meeting is advanced by more than thirty (30) days
or delayed by more than sixty (60) days from the anniversary of the prior year's
meeting, then said stockholder shall give notice in the aforesaid manner by the
later of sixty (60) days prior to the date of the annual meeting or ten (10)
days after the date on which notice of the meeting is first given to
stockholders. No business shall be taken up at any special meeting of
stockholders other than that set forth in the notice of meeting.
Each such notice given by a stockholder to the Secretary with respect to
business proposals to bring before a meeting shall set forth in writing as to
each matter: (i) a brief description of the business desired to be brought
before the meeting and the reasons for conducting such business at the meeting;
(ii) the name and address, as they appear on the Corporation's books, of the
stockholder proposing such business; (iii) the class and number of shares of the
Corporation that are beneficially owned by such stockholder; (iv) a description
of
<PAGE>
any arrangements, understandings, or agreements between the stockholder and
any other person with respect to the proposal; and (v) any material interest of
the stockholder in such business. Notwithstanding anything in these Articles to
the contrary, no business proposed by a stockholder shall be conducted at the
meeting except in accordance with the procedures set forth in this paragraph (6)
of Article EIGHTH.
C. The Chairman of the annual or special meeting of stockholders may, if
the facts warrant, determine and declare that a nomination or proposal was not
made in accordance with the foregoing procedure, and, if he should so determine,
he shall so declare to the meeting and the defective nomination or proposal
shall be disregarded and laid over for action at the next succeeding adjourned,
special or annual meeting of the stockholders taking place thirty days or more
thereafter. This provision shall not require the holding of any adjourned or
special meeting of stockholders for the purpose of considering such defective
nomination or proposal.
D. For purposes of this Section (6), notice is deemed to be first given to
stockholders as of the earlier of the date definitive proxy materials with
respect to the meeting are filed with the Securities and Exchange Commission,
and the date on which the date of the meeting is first made public by press
release or letter to stockholders.
(4) Article Eighth of the Charter is amended to add a new Section 7,
reading in its entirety as follows:
(8) In the event the board of directors shall evaluate a business
combination, the directors shall consider, among other things, the following
factors: the effect of the business combination on the Corporation and its
subsidiaries, and their respective stockholders, employees, customers and the
communities which they serve; the timing of the proposed business combination;
the risk that the proposed business combination will not be consummated; the
reputation, management capability and performance history of the person
proposing the business combination; the current market price of the
Corporation's capital stock; the relation of the price offered to the current
value of the Corporation in a freely negotiated transaction and in relation to
the directors' estimate of the future value of the Corporation and its
subsidiaries as an independent entity or entities; tax consequences of the
business combination to the Corporation and its stockholders; and such other
factors deemed by the directors to be relevant. In such considerations, the
board of directors may consider all or certain of such factors as a whole and
may or may not assign relative weights to any of them. The foregoing is not
intended as a definitive list of factors to be considered by the board of
directors in the discharge of their fiduciary responsibility to the Corporation
and its stockholders, but rather to guide such consideration and to provide
specific authority for the consideration by the board of directors of factors
which are not purely economic in nature in light of the circumstances of the
Corporation and its subsidiaries at the time of such proposed business
combination.
SECOND: The foregoing amendments were advised by the Board of Directors
of the corporation and approved by the stockholders of the corporation.
<PAGE>
THIRD: Immediately prior to the adoption of the foregoing amendments,
the Corporation was authorized to issue nine million five hundred thousand
(9,500,000) shares of stock, seven million five hundred thousand (7,500,000) of
which are common stock, par value $.10 per share, and two million (2,000,000) of
which are convertible cumulative participating preferred stock, without par
value, having an aggregate par value of seven hundred and fifty thousand dollars
($750,000).
Following such amendments, the Corporation is authorized to issue twenty
two million five hundred thousand shares (22,500,000), consisting of twenty
million (20,000,000) shares of common stock, par value $.10 per share, and two
million five hundred thousand (2,500,000) shares of preferred stock, par value
$.01 per share. having an aggregate par value of two million twenty five
thousand dollars ($2,025,000).
The convertible cumulative participating preferred stock was eliminated
from the Charter. The preferred stock is issuable in one or more classes or
series, with such designations, voting powers, preferences, participation,
redemption, sinking fund, conversion, dividend, and other optional or special
rights, and such qualifications, limitations or restrictions as the Board of
Directors may fix in the resolution creating such class or series.
The undersigned officers of FWB Bancorporation hereby acknowledge under
penalties of perjury that the foregoing Articles of Amendment constitute the
corporate act of said corporation.
ATTEST: [SEAL]
/s/ David L. Erickson /s/ Steven K. Colliatie
- ---------------------------- -----------------------
David L. Erickson, Secretary Steven K. Colliatie,
President and CEO
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the Form
10-Q and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000719488
<NAME> FWB BANCORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 3,667
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 3,705
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 2,820
<INVESTMENTS-CARRYING> 13,262
<INVESTMENTS-MARKET> 0<F1>
<LOANS> 74,309
<ALLOWANCE> 824
<TOTAL-ASSETS> 103,618
<DEPOSITS> 92,974
<SHORT-TERM> 2,000
<LIABILITIES-OTHER> 346
<LONG-TERM> 1,500
0
0
<COMMON> 404
<OTHER-SE> 6,394
<TOTAL-LIABILITIES-AND-EQUITY> 103,618
<INTEREST-LOAN> 3,490
<INTEREST-INVEST> 474
<INTEREST-OTHER> 136
<INTEREST-TOTAL> 4,100
<INTEREST-DEPOSIT> 1,888
<INTEREST-EXPENSE> 2,040
<INTEREST-INCOME-NET> 2,060
<LOAN-LOSSES> 8
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 2,077
<INCOME-PRETAX> 210
<INCOME-PRE-EXTRAORDINARY> 210
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 210
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
<YIELD-ACTUAL> 4.67
<LOANS-NON> 165
<LOANS-PAST> 557
<LOANS-TROUBLED> 356
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 1,016
<CHARGE-OFFS> 252
<RECOVERIES> 37
<ALLOWANCE-CLOSE> 824
<ALLOWANCE-DOMESTIC> 365
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 459<F2>
<FN>
<F1>Not broken out in QSB
<F2>All unallocated is for domestic loans.
</FN>
</TABLE>
