<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the period ended: SEPTEMBER 30, 1996
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to
Commission file number 0-11401
SECURITY CHICAGO CORP.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified In Its Charter)
DELAWARE 36-3236203
- ------------------------------------------ ------------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
196 E. PEARSON, CHICAGO, ILLINOIS 60611
- ------------------------------------------ ------------------------
(Address of Principal Executive Offices) (Zip Code)
312/280-0360
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
--- ---
Indicate the number of shares outstanding of each the issuer's classes of common
stock, as of the latest practicable date:
Class Outstanding at October 1, 1996
- --------------------------------- ----------------------------------
Common Stock, par value $5.00 208,714 shares (excluding 31,286
shares held as treasury shares)
1
<PAGE>
SECURITY CHICAGO CORP.
AND SUBSIDIARY
INDEX
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of September 30, 1996
and December 31, 1995. . . . . . . . . . . . . . . . . . . . . . . . . . 3
Condensed Consolidated Statements of Income for the
nine months ended September 30, 1996 and 1995 and the
three months ended September 30, 1996 and 1995 . . . . . . . . . . . . . 4
Condensed Consolidated Statements of Cash Flows for the
nine months ended September 30, 1996 and 1995. . . . . . . . . . . . . . 5
Condensed Consolidated Statements of Changes in Stockholders' Equity
for the nine months ended September 30, 1996 and 1995. . . . . . . . . . 6
Notes to the Condensed Consolidated Financial Statements as of
September 30, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Item 2. Management's Discussion and Analysis of the Financial
Condition and Results of Operation . . . . . . . . . . . . . . . . . . . . . 9
Part II.
Item 4. Submission of Matters to a Vote of Security Holders. . . . . . . .14
Item 6. Other Information. . . . . . . . . . . . . . . . . . . . . . . . .14
2
<PAGE>
SECURITY CHICAGO CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
As of September 30, 1996 and December 31, 1995
(In thousands, except share data)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---- ----
<S> <C> <C>
ASSETS
Cash and due from banks $ 3,931 $ 3,923
Federal funds sold 11,175 19,900
-------- --------
Total cash and cash equivalents 15,106 23,823
Securities available-for-sale 2,872 2,836
Securities held-to-maturity (market value:
1996 - $22,933; 1995 - $14,551) 22,933 14,553
Loans, net of unearned discount and deferred loan fees 23,896 26,577
Less: Allowance for loan losses (346) (354)
-------- --------
23,550 26,223
Property, plant, and equipment, net 3,677 133
Due from broker for matured securities - 4,085
Accrued interest and other assets 441 534
-------- --------
$ 68,579 $ 72,187
-------- --------
-------- --------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing $ 11,143 $ 13,829
Interest-bearing 47,343 48,758
-------- --------
Total deposits 58,486 62,587
Accrued interest and other liabilities 1,348 1,140
-------- --------
59,834 63,727
Stockholders' equity
Common stock, $5 par value; 1,000,000 shares
authorized; 240,000 shares issued 1,200 1,200
Surplus 1,200 1,200
Retained earnings 7,104 6,842
Net unrealized loss on securities
available-for-sale, net of tax (71) (94)
Treasury stock, at cost - 31,286 shares (688) (688)
-------- --------
8,745 8,460
-------- --------
$ 68,579 $ 72,187
-------- --------
-------- --------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
SECURITY CHICAGO CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the nine months ended September 30, 1996 and 1995 and
the three months ended September 30, 1996 and 1995
(In thousands, except share and per share data)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
INTEREST AND DIVIDEND INCOME
Loans, including fee income $ 519 $ 640 $ 1,669 $ 1,920
Securities
Taxable 297 282 705 836
Tax-exempt 16 33 49 77
Federal funds sold 187 109 663 230
Dividends 23 22 69 80
-------- -------- -------- --------
1,042 1,086 3,155 3,143
INTEREST EXPENSE
Deposits 417 411 1,280 1,162
Notes payable - 14 - 54
-------- -------- -------- --------
417 425 1,280 1,216
-------- -------- -------- --------
NET INTEREST INCOME 625 661 1,875 1,927
Provision for loan losses - - - -
-------- -------- -------- --------
625 661 1,875 1,927
OTHER INCOME
Service fees 90 123 386 495
Loss on sale of AMCORE stock - (22) - (22)
Other income 92 86 163 166
-------- -------- -------- --------
182 187 549 639
OTHER EXPENSES
Salaries and employee benefits 301 278 896 849
Occupancy and equipment expense 165 144 517 435
Professional fees 26 43 117 136
Computer service fees 45 50 143 157
Other operating expenses 103 100 255 352
-------- -------- -------- --------
640 615 1,928 1,929
-------- -------- -------- --------
Income before income taxes 167 233 496 637
Provision for income taxes 50 44 149 153
-------- -------- -------- --------
NET INCOME $ 117 $ 189 $ 347 $ 484
-------- -------- -------- --------
-------- -------- -------- --------
Earnings per share $ 0.56 $ 0.90 $ 1.66 $ 2.31
-------- -------- -------- --------
-------- -------- -------- --------
Weighted average shares outstanding 208,714 208,842 208,714 209,423
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
SECURITY CHICAGO CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended September 30, 1996 and 1995
(In thousands)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 347 $ 484
Adjustments to reconcile net income to net cash provided
by operating activities
Provision for depreciation and amortization 98 74
Net amortization of security premiums/discounts 15 4
Loss on sale of securities available-for-sale - 22
Decrease in deferred loan fees (27) (39)
(Increase) decrease in accrued interest receivable and
other assets 93 (238)
Increase in accrued interest payable and other liabilities 195 307
------- -------
Net cash provided by operating activities 721 614
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of securities available-for-sale - 1,015
Proceeds from maturities of securities available-for-sale - 2,000
Proceeds from maturities of securities held-to-maturity 6,621 7,352
Purchases of securities held-to-maturity (10,931) (5,948)
Net decrease in loans 2,700 1,710
Purchase of property, plant, and equipment, net (3,642) (20)
------- -------
Net cash provided by (used in) investing activities (5,252) 6,109
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in deposits (4,101) 729
Cash dividends paid (85) (192)
Payments on notes payable - (880)
Purchases of treasury stock - (283)
------- -------
Net cash used in financing activities (4,186) (626)
------- -------
Net increase (decrease) in cash and cash equivalents (8,717) 6,097
Cash and cash equivalents at beginning of period 23,823 11,256
------- -------
Cash and cash equivalents at end of period $15,106 $17,353
------- -------
------- -------
Supplemental disclosure of cash flow information
Cash paid during period for
Interest $ 1,291 $ 1,195
Income taxes 230 155
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
SECURITY CHICAGO CORP. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES
IN STOCKHOLDERS' EQUITY
For the nine months ended September 30, 1996 and 1995
(In thousands, except share data)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Net Unrealized
Gain (Loss)
on Securities
Available- Total
Common Retained for-Sale, Treasury Stockholders'
Stock Surplus Earnings Net of Tax Stock Equity
----- ------- -------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1994 $ 1,200 $ 1,200 $ 6,328 $ (329) $ (405) $ 7,994
Net income for nine months ended September 30, 1995 - - 484 - - 484
Purchase of 7,683 treasury shares - - - - (283) (283)
Cash dividends paid ($0.40 per share) - - (84) - - (84)
Change in unrealized gain (loss) on
securities available-for-sale, net of tax - - - 462 - 462
-------- -------- -------- ------ ------- --------
Balance at September 30, 1995 $ 1,200 $ 1,200 $ 6,728 $ 133 $ (688) $ 8,573
-------- -------- -------- ------ ------- --------
-------- -------- -------- ------ ------- --------
Balance at December 31, 1995 $ 1,200 $ 1,200 $ 6,842 $ (94) $ (688) $ 8,460
Net income for nine months ended September 30, 1996 - - 347 - - 347
Cash dividends paid ($0.41 per share) - - (85) - - (85)
Change in unrealized gain (loss) on
securities available-for-sale, net of tax - - - 23 - 23
-------- -------- -------- ------ ------- --------
Balance at September 30, 1996 $ 1,200 $ 1,200 $ 7,104 $ (71) $ (688) $ 8,745
-------- -------- -------- ------ ------- --------
-------- -------- -------- ------ ------- --------
</TABLE>
- --------------------------------------------------------------------------------
See accompanying notes to condensed consolidated financial statements.
6
<PAGE>
SECURITY CHICAGO CORP. AND SUBSIDIARY
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1996
- --------------------------------------------------------------------------------
NOTE 1
Security Chicago Corp. (Corporation) is a one bank holding company which owns
100% of the voting stock of First Security Bank of Chicago (Bank), a state
chartered commercial bank located in Chicago, Illinois. In the opinion of
management, the accompanying condensed consolidated financial statements contain
all adjustments (consisting of normally recurring items) necessary to present
fairly the Corporation's consolidated financial position as of September 30,
1996 and December 31, 1995, the results of its consolidated operations for the
nine months and three months ended September 30, 1996 and 1995, and its
consolidated cash flows and changes in stockholders' equity for the nine months
ended September 30, 1996 and 1995. The results of operations for the period
ended September 30, 1996 are not necessarily indicative of the results to be
expected for the full year.
The financial statements and notes are presented as permitted by Form 10-Q and
do not contain certain information included in the Corporation's annual
financial statements and notes thereto.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, disclosures related to
reported amounts and to contingent assets and liabilities at the date of the
financial statements, and the reported amount of revenues and expenses during
the reporting period. Future results could differ from those estimates.
NOTE 2
The Bank has the following contractual amounts of financial instruments
outstanding at September 30, 1996 (in 000s):
<TABLE>
<CAPTION>
<S> <C>
Commitments to originate loans $ 451
Standby letters of credit 80
</TABLE>
NOTE 3
On January 4, 1996, the Bank purchased a building for $2.8 million at 190 E.
Delaware, Chicago, Illinois to house its main office. Management has spent an
additional $800,000 for the remodeling and refurbishing of the building. The
accumulated costs through September 30, 1996 have resulted in building work-in-
process of $3.6 million. Management anticipates advancing an additional $1.6
million to complete its move to the new location.
- -------------------------------------------------------------------------------
(Continued)
7
<PAGE>
SECURITY CHICAGO CORP. AND SUBSIDIARY
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1996
- --------------------------------------------------------------------------------
NOTE 4
On May 28, 1996, the Corporation entered into an Agreement and Plan of Merger
(Agreement) with TDI Financial Corporation (TDI) and Alpha Acquisition Corp.
(Alpha), a wholly-owned subsidiary of TDI, pursuant to which Alpha will be
merged with and into the Corporation.
Under the terms of the Agreement, holders of the Corporation's common stock will
receive the right to $60.00 for each share. Any and all shares of the
Corporation held as treasury stock shall be canceled and retired without further
consideration.
The Agreement was approved by a majority of the Corporation's stockholders on
October 19, 1996 and requires the approval of the appropriate regulatory
authorities.
- -------------------------------------------------------------------------------
8
<PAGE>
SECURITY CHICAGO CORP. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
September 30, 1996
- --------------------------------------------------------------------------------
The following discussion focuses on the consolidated financial condition of
Security Chicago Corp. (Corporation) and Subsidiary at September 30, 1996 and
the consolidated results of operations for the nine months and three months
ended September 30, 1996, compared to the same periods in 1995. The purpose of
this discussion is to provide a better understanding of the condensed
consolidated financial statements and the operations of the Corporation and its
subsidiary, First Security Bank of Chicago (Bank). This discussion should be
read in conjunction with the interim condensed consolidated financial statements
and notes thereto included herein.
PROPOSED ACQUISITION
The Corporation entered into an Agreement and Plan of Merger (Agreement) with
TDI Financial Corporation (TDI) on May 28, 1996. TDI proposes to offer cash for
the common stock of the Corporation. The Agreement was approved by the
Corporation's stockholders on October 19, 1996 and is subject to regulatory
approval. The Agreement is more fully discussed in Note 4.
RESULTS OF OPERATIONS
Consolidated net income of the Corporation for the third quarter of 1996 totaled
$117,000, or $.56 per share, a 38% decrease compared to $189,000, or $0.90 per
share, earned for the third quarter of 1995. Net income was $347,000, or $1.66
per share, and $484,000, or $2.31 per share, for the nine months ended
September 30, 1996 and 1995, respectively. The primary factors that led to the
$137,000 decrease in 1996 nine-month net income were the decrease in service fee
income and increases in interest expense and occupancy and equipment expenses.
These expenses in 1996 were somewhat offset by a decrease in other operating
expenses. These factors are discussed more fully below.
NET INTEREST INCOME
Interest income increased $12,000 for the nine-month period ended September 30,
1996 compared with the comparable period for 1995, mainly due to a $433,000
increase in federal funds sold income as a result of increased volumes held over
the prior period. This is partially offset by a $251,000 decrease in loan
income and a $159,000 decrease in securities income, which is primarily due to a
decrease in the volume of assets held. The increase in interest income was
offset by an increase of $64,000 in interest expense, which is due to increased
interest rates and volumes of interest-bearing liabilities. The impact of
changes in volumes and rates for interest-earning assets and interest-bearing
liabilities is presented in Table 1 for the nine months ended September 30, 1996
and 1995. Table 1 analyzes the change in net interest income, excluding
dividend income, on a fully tax equivalent basis using a 34% tax rate.
- --------------------------------------------------------------------------------
(Continued)
9
<PAGE>
SECURITY CHICAGO CORP. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
September 30, 1996
- --------------------------------------------------------------------------------
Table 1
Favorable (Unfavorable) Changes In Net Interest Income
(In 000's)
Nine Months ended September 30, 1996 over 1995
----------------------------------------------
<TABLE>
<CAPTION>
Volume Rate Total
------ ---- -----
<S> <C> <C> <C>
Federal funds sold $ 457 $ (24) $ 433
Securities (241) 106 (135)
Loans (208) (43) (251)
------ ------ ------
Total earning assets 8 39 47
Deposits 88 30 118
Notes payable (54) - (54)
------ ------ ------
Total interest-bearing liabilities 34 30 64
------ ------ ------
Change in net interest income $ (26) $ (9) $ (17)
------ ------ ------
------ ------ ------
</TABLE>
In the above table, income from the Corporation's investment in AMCORE is
excluded from net interest income.
PROVISION FOR LOAN LOSSES
Credit quality and collection experience continued to be good in 1996, resulting
in no provision for loan losses during the first three quarters of 1996 or 1995.
CHANGES IN NON-INTEREST INCOME AND NON-INTEREST EXPENSE
Service fee income declined $109,000 (22%) and $33,000 (27%) in the 1996 nine-
month and three-month periods, respectively, compared to the year earlier
periods, principally as a result of a reduction in the minimum balance
requirement on deposits held at the Bank and the lost fee income on a single
depositor which has increased its balance and reduced its volume of transactions
to reduce its service fees. Other income has increased $6,000 for the three-
month period ended, compared to the year earlier period, due to an increase in
fees on ATM machines. The Bank began charging a fee to non-bank customers for
ATM transactions beginning in August 1996.
Operating expenses for the nine months ended September 30, 1996 were comparable
to the same nine-month period in 1995. Other operating expenses declined
$97,000 for the nine-month period ended September 30, 1996, which was due to the
decline in the Federal Deposit Insurance Corporation (FDIC) expense for the
period compared to the same nine-month period in 1995. This is due to the FDIC
reducing its assessments beginning in the third quarter of 1995 as the Bank
Insurance Fund became fully funded. These decreases were offset by increases in
salaries
- --------------------------------------------------------------------------------
(Continued)
10
<PAGE>
SECURITY CHICAGO CORP. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
September 30, 1996
- --------------------------------------------------------------------------------
and employee benefits of $47,000 and occupancy expense of $82,000 for
the nine months ended September 30, 1996 compared to the same period in 1995.
The increase in salaries and employee benefits was due to higher salaries in
1996 compared to the same period for 1995. The increase in occupancy expense
for the period was due to $76,000 of expenses related to the upcoming move to
the new location.
PROVISION FOR INCOME TAXES
The provision for income taxes for the nine-month period and three-month period
ended September 30, 1996 was $149,000 and $50,000, respectively. This is
comparable with the same period for 1995.
FINANCIAL CONDITION
Consolidated total assets aggregated $69 million and $72 million at
September 30, 1996 and December 31, 1995, respectively. The decrease in total
assets is a direct result of the decrease in deposits. Business demand deposits
decreased primarily due to the seasonal nature of the depositors' operations.
The purchase of the bank building described in Note 3 of the attached condensed
consolidated financial statements caused property, plant, and equipment to
increase by $3.5 million. This was primarily funded with the payments received
from the due from broker receivable of $4.1 million at December 31, 1995 which
was received in 1996. During the nine months ended September 30, 1996,
securities held-to-maturity increased by $8.4 million as a result of purchases
exceeding maturities. Cash and cash equivalents amounted to $15.1 million at
September 30, 1996, which is a strong level of liquidity.
The Corporation's allowance for loan losses was relatively unchanged at $346,000
at September 30, 1996. The allowance represented 1.4% and 1.3% of outstanding
loans at September 30, 1996 and December 31, 1995, respectively.
Statement of Financial Accounting Standards (SFAS) No. 114 was adopted on
January 1, 1995. Under SFAS 114, as amended by SFAS 118, the carrying value of
impaired loans is periodically adjusted to reflect cash payments, revised
estimates of future cash flows, and increases in the present value of expected
cash flows due to the passage of time. Cash payments representing interest
income are reported as such and other cash payments are reported as reductions
in carrying value. Increases or decreases in carrying value due to changes in
estimates of future payments or the passage of time are reported as reductions
or increases in the provision for loan losses. The adoption of SFAS 114 did not
have a material impact on the Bank's financial position or results of
operations.
- --------------------------------------------------------------------------------
(Contined)
11
<PAGE>
SECURITY CHICAGO CORP. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
September 30, 1996
- --------------------------------------------------------------------------------
CAPITAL RESOURCES
Bank regulatory agencies have adopted capital standards by which all banks and
bank holding companies will be evaluated. Under the risk-based method of
measurement, the resulting ratio is dependent upon not only the level of capital
and assets, but the composition of assets and capital and the amount of off-
balance-sheet commitments. Since the Corporation has consolidated assets of
less than $150 million, regulatory minimum capital tests are applied primarily
to the subsidiary Bank. In accordance with the guidelines of the Federal
Reserve, unrealized net gains and losses, net of deferred income taxes, which
are recorded as an adjustment to equity capital on the financial statements, are
not included in the calculation of these ratios.
The Corporation's equity capital was $8,745,000 at September 30, 1996 compared
to $8,460,000 at December 31, 1995. The slight increase was primarily
attributable to net income of $347,000 exceeding dividends paid of $85,000. In
addition, the Corporation had a net unrealized loss on securities available-for-
sale of $71,000 at September 30, 1996 compared to a net unrealized loss of
$94,000 at December 31, 1995.
The Bank's regulatory capital position was as follows:
<TABLE>
<CAPTION>
Regulatory
Requirement 9/30/96 12/31/95
----------- ------- --------
<S> <C> <C> <C>
Risk-based total capital 8.0% 21.87% 22.34%
Risk-based tier 1 capital 4.0 20.77 21.15
Tier 1 leveraged capital 4.0 - 5.0 9.95 9.10
</TABLE>
LIQUIDITY
Liquidity measures the ability of the Corporation to meet maturing obligations
and its existing commitments, to withstand fluctuations in deposit levels, to
fund operations, and to provide for customers' credit needs. The liquidity of
the Corporation principally depends on cash flows from operating activities,
investment in and maturity of assets, changes in balances of deposits and
borrowings, and its ability to borrow funds in the money or capital markets.
Net cash outflows resulted primarily from a net decrease in deposits of $4.1
million and purchases of the building for $3.5 million and securities for $ 10.9
million. These were offset by cash inflows resulting primarily from a net
decrease in loans of $2.7 million and securities maturities of $6.6 million.
- --------------------------------------------------------------------------------
(Continued)
12
<PAGE>
SECURITY CHICAGO CORP. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
September 30, 1996
- --------------------------------------------------------------------------------
NEW ACCOUNTING PRONOUNCEMENTS
SFAS 122
Statement of Financial Accounting Standards No. 122, "Accounting for Mortgage
Servicing Rights", became effective for financial statements issued for fiscal
years beginning after December 15, 1995. The pronouncement requires that the
fair value of the retained mortgage servicing rights on loans that are sold be
recorded as an asset with a corresponding credit to income. The asset will then
be amortized over the estimated remaining life of the loan servicing portfolio.
The Corporation adopted the standard in 1996, and the impact is not expected to
be material as the Corporation currently does not sell loans into the secondary
market.
SFAS 123
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation", became effective for financial statements issued for fiscal years
beginning after December 15, 1995. This pronouncement gives entities a choice
of either adopting a new fair value method of accounting for employee stock
options and expensing any related compensation costs in the income statement, or
continuing to apply Accounting Principles Board Opinion No. 25 and providing
proforma disclosure of the effect of the fair value method within the financial
statements. The adoption of this statement will not have an effect on the
Corporation's financial statements as the Corporation does not issue stock
options.
- --------------------------------------------------------------------------------
13
<PAGE>
SECURITY CHICAGO CORP. AND SUBSIDIARY
- --------------------------------------------------------------------------------
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
a. A special meeting of the Security Holders of registrant was held on
Saturday, October 19, 1996. At that meeting, the Security Holders
considered and voted upon the adoption of an Agreement and Plan of
Merger providing for the merger of Alpha Acquisition Corp., which is a
Delaware corporation and a wholly-owned subsidiary of TDI Financial
Corporation, a Delaware corporation, with and into Security Chicago
Corp., a Delaware corporation.
c. The results of the vote were as follows:
For 176,238
Against 670
Absent 31,806
Item 6. Exhibits and Reports on Form 8-K.
a. Exhibits - none
b. Reports on Form 8-K - none
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
SECURITY CHICAGO CORP.
(Registrant)
Thomas R. Beverlin
-----------------------
Thomas R. Beverlin
Executive Vice President
November 14, 1996
Sarah G. O'Sullivan
-----------------------
Sarah G. O'Sullivan
Chief Financial Officer
November 14, 1996
- --------------------------------------------------------------------------------
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 3,931
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 11,175
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 2,872
<INVESTMENTS-CARRYING> 22,733
<INVESTMENTS-MARKET> 0
<LOANS> 23,896
<ALLOWANCE> (346)
<TOTAL-ASSETS> 68,579
<DEPOSITS> 58,486
<SHORT-TERM> 0
<LIABILITIES-OTHER> 1,348
<LONG-TERM> 0
1,200
0
<COMMON> 0
<OTHER-SE> 7,545
<TOTAL-LIABILITIES-AND-EQUITY> 68,579
<INTEREST-LOAN> 1,669
<INTEREST-INVEST> 754
<INTEREST-OTHER> 732
<INTEREST-TOTAL> 3,115
<INTEREST-DEPOSIT> 1,280
<INTEREST-EXPENSE> 1,280
<INTEREST-INCOME-NET> 1,875
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,928
<INCOME-PRETAX> 496
<INCOME-PRE-EXTRAORDINARY> 347
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 347
<EPS-PRIMARY> 1.66
<EPS-DILUTED> 1.66
<YIELD-ACTUAL> 8.98
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 354
<CHARGE-OFFS> 8
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 346
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 346
</TABLE>
