As filed with the Securities and Exchange Commission on January 12, 2000
Registration No. 333-91035
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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AMENDMENT NO. 1
to
FORM S-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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BELMONT BANCORP
(Exact Name of Registrant as specified in charter)
OHIO 6021 34-1376776
(State or jurisdiction of (Primary Standard Industrial (IRS Employer
incorporation or organization) Classification Code Number) Identification No.)
325 Main Street
Bridgeport, OH 43912
(740) 695-3323
(Address and telephone number of principal executive offices
and principal place of business)
Wilbur R. Roat
President and Chief Executive Officer
Belmont Bancorp
325 Main Street
Bridgeport, OH 43912
(740) 695-3323
(Name, address, and telephone number of agent for service)
Copies to:
David G. Edwards, Esq.
Doepken Keevican & Weiss Professional Corporation
58th Floor, USX Tower
600 Grant Street
Pittsburgh, PA 15219
(412) 355-2600
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]
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If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this Form, check the following box. [_]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
Proposed
maximum aggregate
Title of each class of offering Amount of
securities to be registered price (1) registration fee
----------------- ----------------
Common Stock, $.25 par value $10,000,000 $2,780(2)
(1) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933, as amended.
(2) This amount was paid at the time the registrant filed the initial
Registration Statement on Form S-2 on November 16, 1999.
If this Form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [_]
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.
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We will amend and complete the information in this prospectus. Although we are
permitted by United States federal securities law to offer these securities
using this prospectus, we may not sell them or accept your offer to buy them
until the documentation filed with the SEC relating to these securities has been
declared effective by the SEC. This prospectus is not an offer to sell these
securities or our solicitation of your offer to buy these securities in any
jurisdiction where that would not be permitted or legal.
SUBJECT TO COMPLETION--January 12, 2000
Prospectus
, 2000
BELMONT BANCORP
________ COMMON SHARES $______ PER SHARE
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<CAPTION>
Belmont Bancorp
<S> <C>
o We are a bank holding company which o In order to evidence their
owns one bank, Belmont National confidence in Belmont and encourage
Bank, with 13 branches in eastern participation in the offering
Ohio and northern West Virginia through their example, in November
1999, 10 of our 12 directors agreed
o Belmont Bancorp to purchase $1.65 million of our
325 Main Street stock convertible into common stock
Bridgeport, Ohio 43912 at the same price as the shares
offered in this offering. All of
Trading this convertible stock will be
converted into common stock as part
o Our shares are listed on the Nasdaq of the offering unless all of the
SmallCap Market with the trading shares offered in the offering are
symbol BLMT. sold to other investors. In this
case, we may redeem for the
The Offering: original issuance price any shares
of convertible stock which are not
o We are offering shares of our converted.
common stock to our existing
shareholders on the basis of one o We plan to use the net proceeds
share for each [___] shares owned. from this offering to increase the
This rights offering will remain Bank's capitalization.
open for the 30-day period from
[____], 2000 to [_________] , 2000, o We are selling our common stock on
subject to extension for up to 30 a best efforts basis. This is not
additional days in our sole an underwritten offering.
discretion.
o There is no minimum offering
o We are also offering to our amount. However, all subscription
existing shareholders, depositors funds will be held in escrow. The
and other persons shares of our escrow agent will not be permitted
common stock, subject to shares to release these funds until the
remaining available for purchase conclusion of the offering.
upon completion of the rights
offering. This ancillary offering o We may elect to accept or reject
will remain open for the 45-day all of the subscriptions in the
period from [____], 2000 to rights offering and all or any part
[_______], 2000, subject to of the subscriptions in the
extension for up to an additional ancillary offering.
45 days in our sole discretion.
</TABLE>
Per Share Total Amount
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Public offering price:
[_______] $10,000,000
This investment involves risk. Investors should be able to afford the loss of
their investment. See "Risk Factors" beginning on page 7.
Neither the SEC nor any state securities commission has determined whether this
prospectus is truthful or complete. Nor have they made, nor will they make, any
determination as to whether anyone should buy these securities. Any
representation to the contrary is a criminal offense.
The shares offered hereby are not bank deposits and are not insured by the
Federal Deposit Insurance Corporation or any other agency or company. The
Federal Deposit Insurance Corporation has not passed, and does not pass, upon
the merits of these or any other securities nor do they pass upon the accuracy
or completeness of any prospectus or other selling literature.
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For Pennsylvania Residents: You have accepted an offer to purchase these
securities made pursuant to a prospectus which contains a notice explaining your
right to withdraw your acceptance pursuant to Section 207(m) of the Pennsylvania
Securities Act of 1972 (70 P.S. ss. 1-207(m)), you may elect, within two
business days after the first time you have received the notice and a prospectus
to withdraw from your purchase agreement and receive a full refund of all monies
paid by you. Your withdrawal will be without any further liability to any
person. To accomplish this withdrawal, you need only send a letter or telegram
to the issuer (or underwriter if one is listed on the front page of the
prospectus) indicating your intention to withdraw. Such letter or telegram
should be sent and postmarked prior to the end of the aforementioned second
business day. If you are sending a letter, it is prudent to send it by certified
mail, return receipt requested, to ensure that it is received and also to
evidence the time when it was mailed. Should you make the request orally, you
should ask for written confirmation that your request has been received.
Notice to Ohio Investors: a Registration Statement concerning the shares has
been filed with the Ohio Division of Securities pursuant to Sections
1707.06(a)(1) and 1707.05A of the Ohio Revised Code. These shares have not been
approved or disapproved as an investment for any Ohio resident by the Ohio
Division of Securities, nor has the Division passed upon the accuracy of this
prospectus.
You should rely only on the information contained in this document or
incorporated by reference. We have not authorized anyone to provide you
information that is different. This prospectus shall not constitute an offer to
sell or a solicitation of an offer to buy any securities in any jurisdiction in
which it would be unlawful to make such offer or solicitation.
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PROSPECTUS SUMMARY
The following summarizes information in other sections of our prospectus.
This summary is not complete and does not contain all of the information that
you should consider before increasing your investment in our common stock. You
should read the entire prospectus carefully.
Belmont
Belmont Bancorp, an Ohio corporation, is a registered bank holding company
headquartered in Bridgeport, Ohio. Our principal business is presently to
operate the Bank, which is a wholly owned subsidiary and our principal asset.
The Bank conducts a general commercial banking business through its 13 banking
offices in eastern Ohio and northern West Virginia. A second subsidiary, Belmont
Financial Network, Inc., invests in low income housing. Our mailing address is
P.O. Box 249, St. Clairsville, Ohio 43950 and our telephone number is (740)
695-3323.
As of October 31, 1999, we had consolidated total assets of approximately
$336 million, deposits of approximately $272 million and shareholders' equity of
approximately $12 million.
We provide a wide range of retail banking services to individuals and small
to medium-sized businesses. These services include various deposit products,
business and personal loans, credit cards, residential mortgage loans, home
equity loans, and other consumer oriented financial services including IRA and
Keogh accounts, safe deposit and night depository facilities.
The Offering
Securities Offered .................[_________] common shares, $0.25 par value
at a subscription price of $[___] per share,
or $10.0 million in the aggregate.
Shares Outstanding/Authorized ......We had 5,236,534 shares of common stock
issued and outstanding as of the record date
of this offering, [__________], 2000. If the
offering is fully subscribed, we will have
[__________] shares issued and outstanding.
We have 17,800,000 shares authorized.
Rights Offering ....................All current shareholders will be entitled to
purchase one share of common stock at
$[______] per share for every [___] shares
of stock held by them as of the record date.
We will not issue fractional shares. We will
round the rights upward to the nearest whole
share. Rights are generally nontransferable.
This rights offering will remain open during
the 30-day period from [________], 2000 to
[_________], 2000, subject to extension for
up to 30 additional days in our sole
discretion.
Ancillary Offering .................We are also offering to our existing
shareholders, depositors and other persons
shares of our common stock, subject to
shares remaining available for purchase upon
completion of the rights offering. We will
offer shares in the ancillary offering for
the
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45-day period from [_______], 2000 to
[__________], 2000, subject to extension for
up to 45 days in our sole discretion. A
minimum subscription of [__] shares is
required in this ancillary offering.
Purchase of Shares by Directors ....In order to evidence their confidence in
Belmont and encourage participation in the
offering through their example, in November
1999, 10 of our 12 directors agreed to
purchase $1.65 million of our stock
convertible into common stock at the same
price as the shares offered in this
offering. All of this convertible stock will
be converted into common stock as part of
the offering unless all of the shares
offered in the offering are sold to other
investors. In this case, we may redeem for
the original issuance price any shares of
convertible stock which are not converted.
Escrow and Acceptance of
Subscriptions ...................We will deposit all subscription funds
received in a non-interest bearing escrow
account with Firstar Trust Company, as
escrow agent. The escrow agent will hold in
the escrow account all subscription funds
until the conclusion of the offering. We may
elect to accept or reject all of the
subscriptions in the rights offering and any
or all of the subscriptions in the ancillary
offering. We will accept subscriptions in
the ancillary offering only if the rights
offering is not fully subscribed. If the
ancillary offering is over-subscribed, we
may allocate shares to subscribers in any
manner we decide.
Use of Proceeds ....................We will use the net proceeds of the offering
to increase the capitalization of the Bank.
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RISK FACTORS
An investment in the shares involves risks, many of which are beyond our
control and represent contingencies that cannot be reliably estimated. You
should carefully consider the following factors and other information in this
prospectus before deciding to invest in shares of our common stock.
If We Do Not Raise Funds Sufficient to Maintain an Adequate Capital Position, We
Will Need to Take Steps Either to Sell the Bank or Seek Alternative Sources of
Financing
The Bank has entered into a consent order with the Office of the
Comptroller of the Currency which requires, among other things, that the Bank
achieve by March 31, 2000, and thereafter maintain, Tier 1 capital at least
equal to 6% of adjusted total assets, which is referred to as a 6% Tier 1
leverage ratio. Tier 1 capital consists principally of shareholders' equity less
goodwill and a portion of deferred tax assets. Belmont has also entered into a
written agreement with the Federal Reserve Bank of Cleveland that requires,
among other things, that it maintain an adequate capital position for the Bank.
In October 1999, the Bank sold approximately $38 million in investment
securities and used approximately $33 million of the proceeds to repay
borrowings from the Federal Home Loan Bank of Cincinnati. Although losses and
prepayment penalties associated with the transactions totaled $1.1 million, the
capital required to support the Bank's assets based on the terms of the consent
order was reduced by approximately $2.0 million.
While it is difficult to estimate what our capital requirements will be at
March 31, 2000, based upon our financial position at October 31, 1999, we would
need to receive at least $8.4 million in offering proceeds to achieve a Tier 1
leverage ratio equal to 6%, which is the level required for a bank to be
categorized as "well capitalized." If the Bank does not have Tier 1 capital of
6% by March 31, 2000, we will be in violation of the agreements with the
Comptroller of the Currency and the Federal Reserve Bank of Cleveland. In such
event, we expect to enter into discussions with the Comptroller of the Currency
and the Federal Reserve Bank of Cleveland to address various steps that we could
take. These steps could include the following or other actions:
o We could reject all subscriptions and refund all payments and seek to
sell the Bank or enter into a strategic partnership with another
financial institution.
o We could accept all subscriptions and seek additional financing
through other sources, including another financial institution.
o We could accept all subscriptions and further reduce the total assets
of the Bank through the sale of assets and repayment of a funding
source such as borrowings.
We cannot offer any assurance to you that we will be able to enter into a
strategic partnership, obtain additional financing or sell the Bank or any of
its assets on terms favorable to us. If, following this offering, the Bank is
sold or a strategic partner or other person invests in or provides financing to
us, any shares you purchase could have a market value less than the offering
price as a result of the terms of any such transaction. In this event, a single
investor could obtain control of the Bank and install a new management team
unknown to current shareholders. In addition, the sale of assets by the Bank
could potentially impair its ability to generate earnings in future periods.
Furthermore, we cannot offer any assurance to you what position the
Comptroller of the Currency and the Federal Reserve Bank of Cleveland will take
if the Bank does not have Tier 1 capital of 6% by March 31, 2000. The
Comptroller of the Currency and the Federal Reserve Bank of Cleveland could take
various actions or mandate that we take specified actions, including the
following:
o They could continue to monitor our operations as they are currently
doing and allow us more time to improve our capital position.
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o They could assume a more active supervisory role and require us to
implement changes in our business model or management.
o They could assume complete control of the management of Belmont and
the Bank and seek to identify a strategic buyer to purchase our assets
or liquidate our assets.
If the Comptroller of the Currency and Federal Reserve Bank of Cleveland
assume complete or significantly greater control of our operations or mandate a
sale of all of our assets, it is likely that such actions could have an adverse
effect on the value of our shares. If we receive subscriptions to purchase fewer
shares than are required to enable us to achieve a 6% Tier 1 leverage ratio, we
intend to seek to determine the steps the Comptroller of the Currency and
Federal Reserve Bank of Cleveland are likely to take before accepting any
subscriptions.
If We Continue to Incur Significant Loan Losses, Our Share Value Will Likely
Decline and We Will Need Additional Capital to Meet Capital Requirements
As discussed in our SEC filings and subsequent news releases, we have
recognized significant loan losses and have created significant reserves for
loan losses since the fourth quarter of 1998, principally as a result of a large
commercial borrower ceasing operations in April 1999 and certain irregularities
with regard to consumer loans to customers of that borrower. Belmont has
continued to experience losses in 1999 as it has established additional loan
loss provisions. As of October 31, 1999, we had loan loss reserves of $10
million. Based upon our extensive review of our loan portfolio, with the
assistance of the Durfee & Root, certified public accounts, and Crowe, Chizek
and Company LLP, the independent accountants we recently engaged to serve as our
auditors, we believe that we have appropriately reserved for loan losses.
However, we can offer no assurance that we will not incur loan losses in the
immediate future in excess of the amounts reserved. If we continue to incur
significant loan losses, it is likely that investor confidence in Belmont will
be diminished and that the market price of our shares will decline. In addition,
if these loan losses are significant, we will need to raise more capital than
presently anticipated in order to meet capital requirements of the Office of the
Comptroller of the Currency and the Federal Reserve Bank of Cleveland. See "Risk
Factors--If We Do Not Raise Funds Sufficient to Maintain an Adequate Capital
Position, We Will Need to Take Steps Either to Sell the Bank or Seek Alternative
Sources of Financing" and "Recent Developments."
We have made Significant Loans in Particular Industries, which Heightens our
Risk of Loan Losses
Banks and financial institutions that lend too heavily in a particular
industry are exposed to the risk of substantial loan losses if that industry
should suffer economic hardship. We have lent heavily in particular industries,
principally the amusement industry. The loans and credit facilities we have made
available to the amusement industry totaled $19.8 million, or 10.7% of our total
loans, at September 30, 1999. William Wallace, formerly the executive vice
president and chief operating officer of the Bank, directed the loans in this
industry due to his belief that this industry was under served by the banking
industry and that higher yields were available on loans made to borrowers in
this industry.
The table set forth below depicts, as of September 30, 1999, the Bank's
lending on an industry-by-industry basis where the loan balance and borrower's
available credit exceed 25% of our total capital. Our total capital consists
principally of shareholders' equity less goodwill, a portion of deferred tax
assets, debt instruments and a portion of the allowance for possible loan
losses. As of September 30, 1999, our total capital was $16.4 million. Except
for the amusement industry loans, we exceeded this 25% level as a result of the
recent reduction of our capital. We are taking steps to further diversify our
loan portfolio and otherwise lower these percentages by seeking to raise capital
in this offering, but we may not be successful in meeting these objectives. See
"Risk Factors--If We Do Not Raise Funds Sufficient to Maintain an Adequate
Capital Position, We Will Need to Take Steps Either to Sell the Bank or Seek
Alternative Sources of Financing."
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Loan Balance and Percent of
Industry Available Credit Total Capital
Amusement Industry 19,782,000 120.5%
Services - Hotel/Motel 7,071,000 43.1%
Commercial Office Buildings and
Rentals 6,729,000 41.0%
Commercial Apartments and Rentals 6,729,000 41.0%
Automobile Retailers 5,530,000 33.7%
General Building Contracting 5,426,000 33.1%
Commercial Construction Contracting 5,057,000 30.8%
We Face Intense Competition in Our Market Area Which May Reduce Our Customer
Base
Bank holding companies and their subsidiary banks are subject to vigorous
and intense competition from other banking institutions and from various
financial institutions and other "nonbank" or non-regulated companies or firms
that engage in similar activities. We compete for deposits with other commercial
banks, savings banks, savings and loan associations, insurance companies and
credit unions, as well as issuers of commercial paper and other securities,
including shares in mutual funds. In making loans, we compete with other
commercial banks, savings banks, savings and loan associations, consumer finance
companies, credit unions, insurance companies, leasing companies and other
nonbank lenders. Because of our current need to increase our capital we may be
unable to compete for some loans which we would normally like to make.
We compete not only with financial institutions in Eastern Ohio and
Northern West Virginia but also with a number of large out-of-state and foreign
banks, bank holding companies and other financial and nonbank institutions. Some
of these institutions are engaged in national and international operations and
have more assets and personnel than us. In addition, some of our competitors are
not subject to the extensive bank regulatory structure and restrictive policies
which apply to us.
The principal factors in successfully competing for deposits are convenient
office locations, flexible hours, competitive interest rates and services, while
those relating to loans are competitive interest rates, the range of lending
services offered and lending fees. We believe that the local character of our
business and our community bank management philosophy enables us to compete
successfully in our market area. We anticipate, however, that competition will
continue to increase in the years ahead.
Additional Sales of Capital Stock in the Future Could Dilute Our Stockholders'
Ownership Interests
Our shares of capital stock eligible for future sale could have a dilutive
effect on the market for our common stock and could adversely affect the market
price. Our charter authorizes the issuance of up to 17,800,000 shares of common
stock, of which 5,236,534 shares were outstanding at October 31, 1999 and 90,000
shares of preferred stock, none of which were outstanding at October 31, 1999.
Assuming all [__________] shares offered in this offering are sold, [__________]
shares of common stock will be available for future issuance. In order to
improve our capital position we may have to attract new investors in the future
by the sale of stock at a lower price than the current offering price.
Our Charter Contains Anti-takeover Provisions which Could Discourage
Acquisitions and Adversely Affect the Price of Our Stock
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Our Articles of Incorporation contain provisions which may have the effect
of discouraging or impeding a tender offer, proxy contest or similar
transactions involving control of Belmont, including transactions in which our
stockholders might otherwise receive a premium for their shares above
then-current market prices or other transactions they may deem to be in their
best interest.
Ohio Statutory Law Contains Provisions which Could Discourage Acquisitions and
Adversely Affect the Price of our Stock
Certain provisions of the Ohio Revised Code which are applicable to us may
have the effect of discouraging or impeding a tender offer, proxy contest or
similar transactions involving control of Belmont, including transactions in
which our stockholders might otherwise receive a premium for their shares above
then-current market prices or other transactions they may deem to be in their
best interest. These provisions include permitting a company's board to consider
the interests of employees, suppliers, creditors and customers, general
community and societal factors and the long-term and short-term interests of the
company and its shareholders in deciding whether to accept or reject an offer to
purchase the company. Consequently, if we were to receive an offer to purchase
Belmont, our board could base its decision on whether to accept or reject the
offer based on factors other than maximizing shareholder value.
The Year 2000 Issue Could Hurt Our Operations and Our Profits and Could Lower
the Value of Your Stock
Like most financial institutions, we rely upon computers for conducting our
business and for information systems processing. There is concern among industry
experts that on January 1, 2000, computers may be unable to read or interpret
the new year properly and there may be widespread computer malfunctions. The
issue may also negatively affect the business of our customers and vendors.
Failure of any of our computers systems, those of the parties we do business
with or the public infrastructure, including the electric and telephone
companies, to process transactions after January 1, 2000, may disrupt our
ability to do routine business and to service our customers. This could hurt our
operations and profits. In addition, some depositors may withdraw deposits from
the Bank prior to year-end due to fears that year-2000-related malfunctions may
cause loss of records of, or otherwise impair, their deposits. If large numbers
of such withdrawals were to occur, the Bank could be forced to sell loans or
investments at unfavorable prices in order to maintain liquidity.
WHERE YOU CAN FIND MORE INFORMATION
Belmont Bancorp files annual, quarterly and current reports, proxy
statements and other information with the Securities and Exchange Commission.
You may read and copy any document that we file at the SEC public reference room
facility located at 450 Fifth Street, N.W., Washington, D.C. 20549 and at the
SEC's regional offices at 7 World Trade Center, 13th Floor, Suite 1300, New
York, New York 10048, Citicorp Center, 500 West Madison Street, Chicago,
Illinois 60661. Please call the SEC at 1-800-SEC-0330 for further information on
the public reference room. The SEC maintains an Internet site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding issuers, including Belmont Bancorp, that file
documents with the SEC electronically through the SEC's electronic data
gathering, analysis and retrieval system known as EDGAR. Our common stock is
traded on the Nasdaq SmallCap Market under the symbol "BLMT." Our reports, proxy
and information statements may also be reviewed at the offices of the National
Association of Securities Dealers, Inc., 1735 K Street, N.W., Washington, D.C.
20006.
This prospectus is part of a registration statement filed by us with the
SEC. Because the rules and regulations of the SEC allow us to omit certain
portions of the registration statement from this prospectus, this prospectus
does not contain all the information contained in the registration statement.
You may review the registration statement and the exhibits filed with the
registration statement for further information regarding us and the securities
being sold by this prospectus. The registration statement and its exhibits may
be inspected at the public reference facilities of the SEC at the addresses
mentioned above.
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INCORPORATION OF INFORMATION THAT WE FILE WITH THE SEC
The SEC allows us to "incorporate by reference" information we have filed
with the SEC. This means:
o incorporated documents are considered part of this prospectus;
o we can disclose important information to you by referring you to those
documents.
We incorporate by reference the documents listed below, all of which were
filed under SEC file number 0-12724 :
o Our Annual Report on Form 10-K for the year ended December 31, 1998
except for Items 6, 7, 7A and 8 and Exhibits 23 and 27 which were
amended by our Amended Annual Report on Form 10-K/A for the year ended
December 31, 1998.
o Our Amended Annual Report on Form 10-K/A for the year ended December
31, 1998.
o Our quarterly reports on Form 10-Q for the three month periods ended
March 31, 1999, June 30, 1999 and September 30, 1999.
o Our current Reports on Forms 8-K filed, March 22, 1999, April 28,
1999, May 21, 1999, June 14, 1999, August 11, 1999, October 14, 1999,
October 18, 1999 and October 20, 1999.
Copies of our annual report on Form 10-K as amended by Form 10-K/A for the
year ended December 31, 1998 and the quarterly report on Form 10-Q for the
quarter ended September 30, 1999 are being delivered to you with this
prospectus.
You may request a copy of any filings referred to above, including exhibits
which are specifically incorporated by reference in those filings, at no cost,
by contacting us orally or in writing at the following address:
Jane R. Marsh
Corporate Secretary
Belmont Bancorp
154 W. Main Street, P.O. Box 249
St. Clairsville, OH 43950
(740) 695-3323
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. We have not authorized anyone
else to provide you with different information. We are not making an offer of
securities in any state where the offer is not permitted. You should not assume
that the information in this prospectus or any supplement is accurate as of any
date other than the date on the front of those documents because our financial
condition and results may have changed since that date.
RECENT DEVELOPMENTS
Consent Order
In August 1999, the Bank received the written report of the recent
examination of the Bank by the Office of the Comptroller of the Currency, the
Bank's principal federal regulatory agency. At the same time, the Bank entered
into a consent order with the Comptroller of the Currency relating to the
results of the examination, which contains certain required actions and certain
restrictions.
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The consent order requires the Bank to formulate new plans, policies,
procedures and programs relating to long-term strategy, organizational
structure, management, loans, loan loss reserves, overdrafts, loan interest
accrual and non-accrual loans, loan diversification, internal audit and periodic
loan review by certain dates and then to implement and follow those plans,
policies, procedures and programs. The Bank is also required to review and
evaluate certain groups of loans and correct deficiencies, and going forward to
properly document commercial extensions of credit and comply with law and
regulations relating to lending. Management of the Bank believes it has taken
all appropriate steps to comply with those requirements.
The consent order specifies that the Bank must retain the services of a
qualified independent certified public accounting firm acceptable to the
Comptroller of the Currency. In October, 1999, with the approval of the
Comptroller of the Currency the Bank retained the services of Crowe, Chizek and
Company LLP.
In addition, the consent order mandates that the Bank must achieve a
specified minimum level of capital by March 31, 2000 and thereafter maintain it.
Management intends to take all appropriate steps, including this common stock
offering, to meet the minimum capital requirement. At October 31, 1999, the
Bank's Tier 1 capital of $11.7 million was $8.4 million less than the required
amount. See "Risk Factors--We Must Improve our Capital Position."
In addition to raising capital, we may improve the ratio of the Bank's Tier
1 capital to adjusted total assets through the sale of assets and repayment of a
funding source such as borrowings. In October 1999, the Bank sold approximately
$38 million in investment securities and used approximately $33 million of the
proceeds to repay borrowings from the Federal Home Loan Bank of Cincinnati.
Although losses and prepayment penalties associated with the transactions
totaled $1.1 million, the capital required to support the Bank's assets based on
the terms of the consent order was reduced by approximately $2.0 million. The
Bank's Tier 1 capital to adjusted total assets was 3.51% at October 31, 1999. We
are contemplating further asset reductions.
Under the terms of the consent order, the board of directors of the Bank is
responsible for the proper and sound management of the Bank, must appoint a
compliance committee from among their independent members, and report monthly to
the Comptroller of the Currency on progress in complying with the consent order.
The board has appointed a compliance committee and has filed its monthly reports
with the Comptroller of the Currency.
Federal Reserve Bank Agreement
In August 1999, we also entered into an agreement with the Federal Reserve
Bank of Cleveland, under authority given it by the Board of Governors of the
Federal Reserve System, the federal regulatory agency for Belmont. As with the
consent of the Comptroller of the Currency, the Federal Reserve agreement
necessitates certain actions and restrictions.
Without prior Federal Reserve approval, the agreement prohibits us from
paying dividends, incurring debt, redeeming stock, receiving dividends from the
Bank, imposing charges on the Bank, and engaging in any transaction with the
Bank in violation of federal law. We are required to submit to the Federal
Reserve an acceptable plan for maintaining adequate capital at the Bank and to
comply with the plan. We must also submit annual cash flow projections. We must
also ensure that the Bank complies fully with the consent order with the
Comptroller of the Currency and report quarterly on progress in complying with
the Federal Reserve agreement. We have taken to date, and intend to continue to
take, all appropriate steps to comply with the Federal Reserve requirements.
The Schwartz Homes Loans and Resignation of Senior Management
Following the March 15, 1999, resignation of William Wallace as executive
vice president and chief operating officer of the Bank, the board of directors
became aware of irregularities in the Bank's loan
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portfolio relating to loans made to Schwartz Homes, Inc., a retailer of mobile
homes based in New Philadelphia, Ohio, Steven D. Schwartz, the president of
Schwartz Homes, and retail customers of Schwartz Homes. On April 12, 1999, Mr.
Wallace submitted his resignation as a director of Belmont and the Bank. The
board's concerns over this matter eventually led to the resignation on June 8,
1999 of J. Vincent Ciroli, Jr. as president and chief executive officer of
Belmont and Bank. In resigning, Mr. Ciroli maintained that he had no knowledge
of the Schwartz Homes matter or any other matters causing a loss to the Bank,
but, in light of the board's concerns, advised it that the bond between
management and the board had been broken. On July 12, 1999, the board removed
Mr. Ciroli as a director of the Bank.
At the direction of Mr. Wallace, commencing in November 1996, the Bank
began lending substantial amounts of money to Schwartz Homes and Steven D.
Schwartz and, commencing in February 1997, to retail customers of Schwartz Homes
under recourse agreements with Schwartz Homes. At March 31, 1999, the Bank had
$1.6 million in principal amount of loans outstanding to Schwartz Homes, $1.9
million in principal amount of a loan outstanding to Steven D. Schwartz and $6.7
million in principal amount of loans outstanding to retail customers of Schwartz
Homes.
On June 2, 1999 other creditors of Schwartz Homes placed it in involuntary
bankruptcy. On December 30, 1999, a commercial building partially securing the
Steven D. Schwartz loan was sold in a foreclosure sale for $1.2 million,
resulting in a loss to the Bank on this loan, including a loan loss provision
taken by the Bank in a prior period, of $700,000.
Under the recourse agreements with Schwartz Homes for loans ostensibly made
for the benefit of its customers, Schwartz Homes agreed to repay any loans not
repaid by retail customers. Schwartz Homes apparently used the funds advanced by
the Bank to fund its own operations or for other improper purposes, without the
knowledge of the Bank's board. In many instances, Schwartz Homes failed to
perform on the retail sales contracts it entered into with its customers even
though the Bank had provided the funds to Schwartz Homes for this purpose. In
addition, Schwartz Homes often failed to repay the floor-plan lenders on homes
purchased, which has further impacted the Bank's collateral position with
respect to the homes.
On October 12, 1999, the Bank filed cross claims and counterclaims in an
action pending in the Court of Common Pleas of Tuscarawas County, Ohio in a case
captioned Greentree Financial Servicing Corporation, et al. v. Schwartz Homes,
Inc. et al., 1999 CV 040170. The Bank alleged that it had been the victim of an
elaborate fraud that has resulted in more than $22 million in losses to the
Bank. The Bank believes that the fraud occurred because significant information
about the consumer loans and the financial condition of Schwartz Homes was not
disclosed to the Bank's board of directors and that affirmative
misrepresentations were made to its board of directors. In addition, the Bank
believes that Schwartz Homes entered into the recourse agreements without any
intention of repaying the loans and employees of Schwartz Homes deceived the
Bank with false documents and misrepresentations.
For the fourth quarter of 1998 and the first three quarters of 1999, the
Bank charged-off $18.9 million of indirect consumer loans and direct commercial
loans related to Schwartz Homes and the loan to Steven D. Schwartz, as detailed
in the following table, in addition to establishing loan loss reserves allocated
to these loans totaling $3.7 million through September 30, 1999:
Consumer Commercial
Net Charge Offs Net Charge Offs Total
--------------- --------------- -----
4th quarter-1998 $ 11,227,000 $ 0 $ 11,227,000
1st quarter-1999 2,460,000 1,955,000 4,415,000
2nd quarter-1999 (53,000) 643,000
696,000
3rd-quarter-1999 816,000 1,766,000 2,582,000
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As a result of the losses incurred by the Bank and Belmont related to the
commercial and consumer loans related to Schwartz Homes, we entered into a
consent order with the Office of the Comptroller of the Currency and agreement
with the Federal Reserve Bank of Cleveland, as described above under "--Consent
Order" and "--Federal Reserve Agreement" which require that we take specified
actions. We are seeking to raise additional capital through this offering,
principally to restore the capital lost through these charge-offs, and may be
required to take other actions if we do not raise sufficient capital. See "Risk
Factors--If We Do Not Raise Funds Sufficient to Maintain an Adequate Capital
Position, We Will Need to Take Steps Either to Sell the Bank or Seek Alternative
Sources of Financing."
We have Taken Measures to Address Operational and Financial Issues
In response to the developments in the Schwartz Homes matter, the board of
directors of Belmont and the Bank took the following measures:
o Appointed W. Quay Mull II as interim chief executive officer and
retained the services of FiCap Strategic Partners, LLC to provide
interim management services to Belmont and the Bank and assist the
board in employing a new president.
o Conducted a wide-ranging search to recruit a new president for the
Bank, identified and interviewed a series of candidates and recruited
Wilbur R. Roat to serve as the president and chief executive officer
of the Bank and Belmont. Mr. Roat joined the Bank in this capacity in
December 1999. See "--Appointment of Wilbur R. Roat as President and
Chief Executive Officer," below.
o Promoted Stephen K. Kilpatrick to senior vice president, with
responsibility for all lending operations of the Bank except retail
services. Mr. Kilpatrick joined the Bank in April 1999.
o Retained the law firm of Doepken Keevican & Weiss to pursue all
avenues of recovery against Steven D. Schwartz, William Wallace and
others to recover the losses incurred from the Schwartz Homes loan
relationship.
o Retained the services of Crowe, Chizek and Company LLP to provide
external audit, internal audit and loan review functions for the Bank
and Belmont and dismissed the Bank's and Belmont's previous auditors
and providers of loan review services.
o Undertook an extensive review of the Bank's loan portfolio, with the
assistance of the Durfee & Root, certified public accounts, and Crowe,
Chizek and Company LLP, the independent accountants we recently
engaged to serve as our auditors.
o Caused FiCap to initiate a thorough review and assessment of all of
the Bank's operations, personnel, policies and procedures, with
particular emphasis on the Bank's loan portfolio.
o Used the results of FiCap's review and assessment to strengthen
procedures and internal controls, reassign or terminate employees
where appropriate and strengthen the operational foundation of the
Bank.
o Implemented plans to protect the Bank's liquidity and to raise
additional capital, including through this offering.
o Reduced the total assets of the Bank through the sale of assets and
repayment of funding sources, as more fully described above under
"Recent Developments--Consent Order." We are contemplating further
asset reductions.
o Developed a strategic plan for the Bank for the next five years.
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o As described above under "--The Schwartz Homes Loans and Resignation
of Senior Management," removed Mr. Ciroli as a director of the Bank.
o Filed a claim under the Bank's fidelity bond insurance policy issued
by Progressive Insurance Company to recover the losses incurred in
connection with the Schwartz Homes loan relationship.
o As described above under "--The Schwartz Homes Loans and Resignation
of Senior Management," instituted legal proceedings against Steven D.
Schwartz, William Wallace and others to recover the losses incurred
from the irregular Schwartz Homes loan relationship.
o Prosecuted workout and collection actions against commercial borrowers
with troubled loan relationships.
o Assisted the Bank's and Belmont's regulators in understanding the
issues before the Bank and developed a collaborative relationship with
these regulators, the Federal Bureau of Investigation and other law
enforcement authorities in order to address the issues before the Bank
promptly and effectively.
Appointment of Wilbur R. Roat as President and Chief Executive Officer
In December 1999, each of the Bank and Belmont appointed Wilbur R. Roat to
serve as a director and president and chief executive officer. Prior to joining
the Bank, Mr. Roat, age 52, served as the president and chief executive officer
of First Lehigh Bank from September 1994 until February 1999. From March 1992 to
September 1994, he served as the president and chief executive officer of St.
Edmond's Savings and Loan.
The Bank and Belmont entered into an employment agreement with Mr. Roat
which provides for his engagement as the president and chief executive officer
for a term of three years, subject to renewal, at an annual base salary of
$160,000. The agreement contemplates that a bonus of from $20,000 to $25,000
will be paid in 2001 if Mr. Roat is successful in improving the Bank's loan
portfolio. The parties have also agreed to adopt a mutually acceptable bonus
plan which provides for the payment of an annual bonus to Mr. Roat in subsequent
years based on specified criteria. The agreement also provides that options to
purchase from between 50,000 and 75,000 shares of Belmont's common stock will be
issued to him at an exercise price equal to the market price of Belmont's stock
when granted with vesting over a four year period, subject to acceleration upon
a change of control. If, prior to a change of control, Belmont terminates or
fails to renew the agreement without cause, Mr. Roat will be entitled to
continuation of his compensation and benefits for the remaining term, if any,
and for a six month severance period. If Belmont terminates or fails to renew
the agreement without cause within two years following a change of control or if
Mr. Roat voluntarily terminates his employment within six month following a
change of control, he will be entitled to receive payment of an amount equal to
299% of his annualized base salary and most recent bonus.
FORWARD-LOOKING STATEMENTS
We have made statements in this prospectus and in the documents
incorporated herein that are forward-looking statements. You can identify these
statements by forward-looking words such as "may," "will," "intend," "expect,"
"anticipate," "believe," "estimate," and "continue" or similar words.
Forward-looking statements may also use different phrases. Forward-looking
statements address, among other things, (1) our expectations; (2) projections of
our future results of operations or of our financial condition; or (3) other
"forward looking" information.
We believe it is important to communicate our expectations to our
investors. However, events may
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occur that we are not able to predict accurately or which we do not fully
control that could cause actual results to differ materially from those
expressed or implied by our forward-looking statements, including:
o our inability to raise or maintain adequate levels of capital, as
required by the Office of the Comptroller of the Currency or the
Federal Reserve Bank of Cleveland.
o our need to further reduce our total assets through the sale of assets
and the repayment of funding sources, which could impair our ability
to generate earnings in future periods.
o our need to recognize loan losses or create additional loan loss
reserves due to additional problem loans.
o unforeseen adverse conditions in our borrowers' businesses or
financial condition.
o changes in general economic and business conditions and in the banking
industry in particular.
o changes in banking regulations.
o other factors discussed under "Risk Factors."
USE OF PROCEEDS
We intend to use the net proceeds of the offering to increase the Bank's
capitalization. We have not entered into agreements with any selling agents, but
we may elect to do so and pay commissions at prevailing rates. In this event,
the net proceeds of the offering available for our use would be reduced by the
amount of any commissions paid to selling agents.
DETERMINATION OF OFFERING PRICE
We considered several factors in setting the per share offering price of
the shares. Our shares are traded on the Nasdaq SmallCap market. In determining
the per share offering price, we took into account the prices at which recent
trades have taken place in our shares. Additionally, we considered our
perception that there is an existing demand to purchase shares by existing and
prospective shareholders and the multiples of book value at which similarly
situated institutions are trading. As of [____________], 2000, the closing price
of the shares was $[_______].
DILUTION
Shareholders who do not purchase all of the shares offered to them in the
rights offering will experience dilution in ownership. Assuming the full
subscription of the offering had occurred on September 30, 1999, a purchaser of
shares in the offering would have paid a premium of $[_____] per share
[(_____)%] over the book value of such share of $2.61.
PLAN OF DISTRIBUTION
The Rights Offering
The Offering. We are offering to our shareholders of record, as of the
close of business on January 21, 2000, which is our record date, the right to
subscribe for [______] shares at a price of $[___]
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per share. Shareholders will have the right to purchase one share for each
[______] shares owned on the record date in this rights offering. We will not
issue fractional shares. We will round rights upward to the next whole share.
The Rights. The rights are not transferable, except that the assignment by
a record or nominee owner of shares to the beneficial owner will be permitted to
the extent allowable under applicable state securities laws. Each right
evidences the total number of shares to which the shareholder is entitled to
subscribe for in the rights offering. A shareholder who does not participate in
the rights offering will experience ownership dilution. See "Risk
Factors--Dilution." Officers and directors of Belmont, in their capacity as
shareholders, will have the same right to purchase shares in the rights offering
as other shareholders.
Dates of Offering. The rights offering will begin on [______________], 2000
and continue for 30 days until [_________________], 2000, subject to our right
to extend the rights offering for up to 30 additional days.
How to Subscribe. You may subscribe to purchase shares by completing and
signing the rights subscription agreement which accompanies this prospectus and
mailing or delivering it to the escrow agent, together with payment in full for
all shares subscribed for. To be accepted, we must receive your subscription
before the expiration of the rights offering. You must pay the full subscription
price when you return the rights subscription agreement. In the event that
payment is less than that required to purchase the number of shares subscribed
for, we will issue only the number of shares for which payment is received.
Rights subscription agreements should be mailed, and checks made payable, to:
Firstar Trust Company
425 Walnut Street
ML CN-WN-06CT
Cincinnati, Ohio 45202
Attention: Brian George
If you wish to subscribe for more shares than you are entitled to purchase
in the rights offering, you may do so by completing the subscription agreement
for the ancillary offering. See "Plan of Distribution--Ancillary Offering."
If you have any questions about this offering, please call (740) 699-4699
and leave a detailed message. Our representative will return your call within
one business day.
Ancillary Offering
The Offering. We are also offering to our existing shareholders, depositors
and other persons shares of our common stock, subject to shares remaining
available for purchase upon completion of the rights offering. We will allow all
shareholders who subscribe for shares in the rights offering to participate in
the ancillary offering except for shareholders who reside in states in which we
cannot register the shares for sale in the ancillary offering or obtain an
exemption from registration without unreasonable burden or expense. Generally,
it is our intention to accept subscriptions for shares in the ancillary offering
in the order received. Each subscriber must purchase a minimum of [__] shares is
required in this ancillary offering.
Dates of Offering. This follow-up offering will begin on [___________],
2000 and continue for 45 days until [______________], 2000, subject to our right
to extend the rights offering for up to 45 additional days.
How to Subscribe. You may subscribe to purchase shares by completing and
signing the subscription agreement for the ancillary offering which accompanies
this prospectus and mailing or
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delivering it to the escrow agent, together with payment in full for all shares
subscribed for. To be accepted, we must receive your subscription before the
expiration of the offering. You must pay the full subscription price when you
return the subscription agreement. In the event that payment is less than that
required to purchase the number of shares subscribed for, we will issue only the
number of shares for which payment is received. Subscription agreements should
be mailed, and checks made payable, to:
Firstar Trust Company
425 Walnut Street
ML CN-WN-06CT
Cincinnati, Ohio 45202
Attention: Brian George
If you have any questions about this offering, please call (740) 699-4699
and leave a detailed message. Our representative will return your call within
one business day.
Purchase of Shares by Directors
In order to evidence their confidence in Belmont and encourage
participation in the offering through their example, in November 1999, 10 of our
12 directors purchased a total of $1.65 million of our stock. This stock is
convertible into common stock at the same price as the shares offered in this
offering. All of this convertible stock will be converted into common stock as
part of the offering unless all of the shares offered in the offering are sold
to other investors. In this case, we may redeem for the original issuance price
any shares of convertible stock which are not converted.
Best Efforts Offering
We will offer the shares on a best efforts basis. We intend to offer and
sell shares directly. None of our directors, officers or employees who assist us
in this process will receive any additional compensation for their efforts. We
expect to promote the offering through word of mouth to our shareholders,
depositors and others with whom we do business or have relationships. Although
we have no present plans to do so, we may also enter into agreements with
selling agents to offer and sell our shares. If we do engage selling agents, we
expect to pay selling commissions to them at prevailing rates.
Delivery of Share Certificates
As soon as practicable following the successful completion of the offering,
we will mail certificates for shares to subscribers whose subscriptions have
been accepted.
Escrow of Funds and Acceptance of Subscriptions
We will deposit all subscription funds received in a non-interest bearing
escrow account with Firstar Trust Company, as escrow agent. All funds received
will be held in the escrow account until the offering is completed. We may elect
to accept or reject all of the subscriptions in the rights offering and any or
all of the subscriptions in the ancillary offering. We will accept subscriptions
in the ancillary offering only if the rights offering is not fully subscribed
for. If the ancillary offering is over-subscribed, generally, it is our
intention to accept subscriptions for shares in the ancillary offering in the
order received. If we decline to accept any subscriptions, the escrow agent will
promptly return the escrowed funds directly to the subscribers following the
termination of the offering.
Subscribers should understand that we filed a claim under the Bank's
fidelity bond insurance policy issued by Progressive Insurance Company to
recover the losses incurred in connection with the actions of our former chief
operating officer, William Wallace. If we obtain a significant recovery from
Progressive, we will
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not need to raise as much capital as presently anticipated. In this event, if
the offering is fully subscribed, we may decide not to accept all or a portion
of the subscriptions in the ancillary offering.
Federal Income Taxes
We believe that the following discussion addresses all material tax
consequences involved in an investment in the shares of common stock. You are
urged, however, to discuss your personal tax situation with your own tax
advisors. We have received an opinion of Doepken Keevican & Weiss Professional
Corporation, to the effect that, for federal income tax purposes:
(1) neither the receipt nor the exercise of the rights will result in
taxable income to the shareholders;
(2) no deductible loss will be realized if the rights are allowed to
expire without exercise;
(3) the tax basis of the shares of common stock acquired upon the exercise
of the rights or in the ancillary offering will be the subscription
price; and
(4) there is no allocation of an existing shareholder's tax basis in
current shares held by the shareholder to the right, whether or not
the rights are exercised, because (based upon the limited time period
in which shareholder has the option to exercise a right and the fact
that the purchase price per share paid upon the exercise of a right is
the same as the per share price of the shares sold in the ancillary
offering) we have determined that such value is zero.
TRANSACTIONS WITH DIRECTORS AND OFFICERS
Certain Directors and Executive Officers and their associates were
customers of and had transactions with the Bank in the ordinary course of the
Bank's business during 1998. From time to time the law firms of Phillips,
Gardill, Kaiser & Altmeyer, of which Charles J. Kaiser, Jr. is a partner,
Sommer, Liberati & Hoffman, of which Keith A. Sommer is a partner, and Doepken
Keevican & Weiss Professional Corporation, of which James F. Bauerle is a
member, have rendered legal services to the Corporation and the Bank. Messrs.
Kaiser and Sommer are directors of both Belmont and the Bank. Mr. Bauerle served
as a senior vice president of the Bank from June 1999 to December 1999. It is
contemplated that these firms will be retained to perform additional legal
services during the current year. Mr. Bauerle and David G. Brewick, who served
as interim president of Belmont and the Bank from June 1999 to December 1999,
are principals of FiCap Strategic Partners LLC, which has served as our advisor.
Since January 1, 1998 through September 30, 1999, we have paid advisory fees of
$817,275 plus expenses of $63,419 to FiCap. On June 9, 1999, we also agreed to
grant to FiCap, for its services, two year options to purchase 50,000 shares of
our Common Stock at $10.84, the average daily price for our shares during June
and July 1999. In addition, Doepken Keevican & Weiss received legal fees as
described under "Legal Opinions."
DESCRIPTION OF CAPITAL STOCK
General
We are authorized to issue 17,800,000 shares of common stock and 90,000
shares of preferred stock. As of October 31, 1999, 5,236,534 shares of common
stock and no shares of preferred stock were issued and outstanding.
Preferred Stock
In order to evidence their confidence in Belmont and encourage
participation in the offering through their example, in November 1999, 10 of our
12 directors purchased a total of $1.65 million of a new Series
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A Convertible Preferred Stock. The directors who purchased this stock are W.
Quay Mull II, Charles J. Kaiser, Jr., John H. Goodman III, Terrence Lee, Dana
Lewis, James Miller, Charles Wilson, Thomas Olszowy, Keith Sommer and Mary
Holloway Haning. This convertible stock has no preferential dividend rights or
other preferences except for a nominal liquidation preference of $.0001 per
share, representing less than $10.00 in the aggregate for all $1.65 million of
this convertible stock. The convertible stock also will have no special voting
rights. The holders of this convertible stock will have one vote per share and
the shares are voted not as a separate class but together with the common stock.
All of this convertible stock will be converted into common stock as part
of the offering unless all of the shares offered in the offering are sold to
other investors. In this case, we may redeem for the original issuance price any
shares of convertible stock which are not converted.
Our board of directors, without further action by the stockholders, is
authorized to issue an aggregate of 90,000 shares of preferred stock. We have no
plans to issue any other series of preferred stock. Our board of directors may
issue preferred stock with dividend rates, redemption prices, preferences on
liquidation or dissolution, conversion rights, voting rights and any other
preferences, which rights and preferences could adversely affect the voting
power of the holders of common stock. The issuance of preferred stock, while
providing desirable flexibility in connection with possible acquisitions or
other corporate purposes, could have the effect of making it more difficult for
a third party to acquire, or could discourage or delay a third party from
acquiring, control.
Common Stock
Holders of common stock are entitled to one vote for each share held of
record on all matters on which stockholders may vote. Holders of common stock
are entitled to receive, as, when and if declared by the board of directors from
time to time, such dividends and other distributions in cash, stock or property
from our assets or funds legally available for such purposes subject to any
dividend or liquidation preferences that may be attributable to any preferred
stock outstanding from time to time.
Classification of Board of Directors
Our board of directors has been classified by dividing the directors into
three classes. One class of directors is elected each year for a term of three
years, so that the term of office of one class of directors expires each year.
Cumulative Voting
Our shareholders have cumulative voting rights pursuant to Ohio law. We
may, as permitted by Section 1701.69 of the Ohio Revised Code, propose to
shareholders that our charter be amended to delete the right to vote
cumulatively in the election of directors. If we propose such an amendment to
shareholders, all shareholders would be entitled to notice of the proposed
amendment as provided by law and such an amendment would be subject to other
requirements as to the number of shares which could be voted against the
proposed amendment. The adoption of such amendment would require the affirmative
vote of the holders of a majority of the stock entitled to vote in the election
of directors.
A shareholder voting cumulatively may cast the number of shares he owns
times the number of directors to be elected in favor of one nominee or allocate
such votes among the nominees as he determines.
Transfer Agent and Registrar
The transfer agent and registrar for our shares is Registrar and Transfer
Company, 10 Commerce Drive, Crawford, New Jersey 07016.
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Liquidation Rights
In the event of liquidation, holders of our capital stock are entitled to
certain rights as to assets distributable to shareholders on a pro rata basis,
after satisfaction of our debts.
No Preemptive Rights
Holders of our capital stock have no preemptive right to subscribe for or
to purchase any additional securities which may be issued by us. Preemptive
rights permit a shareholder to subscribe to a sufficient number of shares so as
to maintain their relative pro rata ownership upon the issuance of additional
shares by a corporation, except in certain circumstances.
Dissenters Rights
Our shareholders have dissenters' rights in connection with certain mergers
and consolidations pursuant to Ohio law.
Right of Redemption
We are specifically empowered by our charter to buy our shares of
outstanding capital stock from our shareholders.
Dividend Rights
Dividends may be paid on our capital stock as declared by our board of
directors out of funds legally available therefor. Dividends may not exceed our
surplus, as defined by the Ohio Business Corporation Act, and may not be
declared if we are insolvent or would thereby be made insolvent. See "Risk
Factors, Dividends."
Assessability
When issued, our capital stock is fully paid and nonassessable.
Antitakeover Provisions
Some Important Charter Provisions
1. Our charter provides for a classified board of directors as described
above.
2. Our charter requires the approval of the holders at least 75% of our
voting stock to approve the merger or consolidation with or the sale of the
assets or business to, any other corporation unless the transaction receives the
prior approval of 60% of our board of directors.
3. Our charter provides that if an acquiring person becomes the owner of
more than 50% of our voting stock as a result of a lender offer, we shall be
obligated to offer to purchase the remaining shareholders' shares at the highest
price paid by the acquiring person.
These provisions may have the effect of deterring hostile takeovers or
delaying changes in our management. The availability of the authorized and
unissued shares of Belmont to be issued into friendly hands with the purpose of
diluting a potential acquiror's ownership of Belmont may also be determined to
have an antitakeover effect. Our charter and code of regulations currently
contain no other provisions that were intended to be or could fairly be
considered as antitakeover in nature or effect. Our board of directors has no
present intention to amend the charter to add any antitakeover provision.
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Some Important Ohio Statutory Provisions
We are subject to certain provisions of Ohio law that may discourage or
render more difficult an unsolicited takeover:
Chapter 1704 of the Ohio Revised Code prohibits certain mergers, sales of
assets, issuances or purchases of securities, liquidation or dissolution, or
reclassifications of the then-outstanding shares of an Ohio corporation
involving, or for the benefit of, certain beneficial holders of stock
representing 10% or more of the voting power of the corporation (a "10%
shareholder"), unless:
o the transaction is approved by the directors prior to the time that the 10%
shareholder became a 10% shareholder (a "shareholder acquisition date");
o the acquisition of 10% of the voting power is approved by the directors
prior to the shareholder acquisition date; or
o the transaction involves a 10% shareholder that has been such for at least
three years and the transaction is either approved by holders of two-thirds
of the voting power of the corporation and the holders of a majority of the
voting power not owned by 10% shareholders, or certain minimum price and
form of consideration requirements are met.
The Control Share Act provides that the acquisition of shares entitling the
holder to exercise voting power in certain ranges (one-fifth or more, one-third
or more, or a majority) can be made only with the prior authorization of:
o the holders of at least a majority of the total voting power; and
o the holders of at least a majority of the total voting power held by
shareholders other than the proposed acquirer, officers of the corporation
elected or appointed by the directors, and directors of the corporation who
are also employees and excluding certain shares that are transferred after
the announcement of the proposed acquisition and prior to the vote with
respect to the proposed acquisition. The Control Share Act does not specify
a remedy for violation of the Act. However, in at least one situation, a
court has set aside an acquisition made in violation of the Control Share
Act.
The Profit Disgorgement Act provides Ohio corporations, or in certain
circumstances the shareholders of an Ohio corporation, a cause of action to
recover profits realized under certain circumstances by persons who dispose of
securities of a corporation within 18 months of proposing to acquire such
corporation.
A provision of the Ohio General Corporation Law provides that in addition
to the interests of the shareholders, our directors may consider:
1. the interests of the corporation's employees, suppliers, creditors and
customers;
2. the economy of the state and nation;
3. community and societal considerations; and
4. the long-term as well as short-term interests of the corporation and
its shareholders, including the possibility that these interests may
be best served by the continued independence of the corporation.
20
<PAGE>
Reports
Our common stock is registered under Section 12(g) of the Securities and
Exchange Act of 1934, and we file periodic reports with the SEC as required by
the Act. After the offering, we will continue to file periodic reports with the
SEC.
LEGAL OPINIONS
The validity of the shares offered hereby will be passed upon for us by
Doepken Keevican & Weiss Professional Corporation, Pittsburgh, Pennsylvania. In
addition, Doepken Keevican & Weiss has given its opinion that the statements
made under "Plan of Distribution - Federal Income Taxes" are correct as to
matters of law. James F. Bauerle, a member of Doepken Keevican & Weiss, formerly
served as a senior vice president of the Bank. From January 1, 1998 through
September 30, 1999, we have paid legal fees of $515,499 to Doepken Keevican &
Weiss. Mr. Bauerle is also a principal of FiCap Strategic Partners LLC, which
serves as an advisor to the Bank and us, and Doepken Keevican & Weiss holds an
equity interest in FiCap. Since January 1, 1998 through September 30, 1999, we
have paid advisory fees of $817,275 plus expenses of $63,419 to FiCap. On June
9, 1999, we also agreed to grant to FiCap, for its services, two year options to
purchase 50,000 shares of our Common Stock at $10.84, the average daily price
for our shares during June and July 1999.
21
<PAGE>
Annex A
SUBSCRIPTION AGREEMENT
for the Rights Offering of Belmont Bancorp
Use this Form if you are an existing shareholder of Belmont Bancorp and wish to
purchase all or any portion of the Shares you are entitled to purchase as shown
below. You may also subscribe to purchase additional shares in the Ancillary
Offering. If you wish to purchase more shares than the number you are eligible
to purchase in the Rights Offering, you must also fill out and return the
Subscription Agreement for the Ancillary Offering.
Firstar Trust Company
425 Walnut Street
ML CN-WN-06CT
Cincinnati, Ohio 45202
Attention: Brian George
Ladies and Gentlemen:
The undersigned hereby subscribes for and agrees to purchase the number of
shares of common stock, par value $0.25 (the "Shares"), of Belmont Bancorp, an
Ohio corporation ("Belmont") indicated below. The undersigned has executed and
delivered this Subscription Agreement in connection with Belmont's offering of
Shares described in the Prospectus dated _____________, 2000 which accompanies
this Subscription Agreement, as it may be supplemented.
The undersigned agrees to purchase the Shares subscribed for herein for the
purchase price of $[______] per share and has delivered to Belmont with this
Subscription Agreement a check made payable to "Firstar Trust f/b/o Belmont
Bancorp" in an amount equal to the aggregate purchase price of all Shares for
which the undersigned desires to subscribe.
The undersigned acknowledges receipt of a copy of (1) our Prospectus, (2)
our Amended Annual Report on Form 10-K/A for the year ended December 31, 1998
and (3) our Amended Quarterly Report on Form 10-Q/A for the three months ended
September 30, 1999.
The undersigned acknowledges that Belmont may accept or decline to accept
the undersigned's subscription. Belmont's decision to accept or decline the
subscription will be made at the time the Rights Offering and the Ancillary
Offering are completed.
- --------------------------------- ----------------------------------------
Number of Shares owned on record Please print name(s) of subscriber(s)
date, January 21, (See the mailing 2000.
label attached hereto.)
----------------------------------------
________ Shares ($____________) Signature
Number of Shares subscribed for (up
to [____] X number of Shares owned
on the record date) and total
subscription price at $[_____] per ----------------------------------------
Share) Signature of co-subscriber
- --------------------------------- ----------------------------------------
How Shares are to be held if this
is a co-investment, e.g., as joint
tenants (with right of ----------------------------------------
survivorship) or tenants-in-common Date
A-1
<PAGE>
Annex B
SUBSCRIPTION AGREEMENT
for the Ancillary Offering of Belmont Bancorp
Use this Form if: (1) you are an existing shareholder of Belmont Bancorp and
wish to purchase more shares of Belmont than you are permitted under the Rights
Offering, or (2) you are not an existing shareholder of Belmont.
Firstar Trust Company
425 Walnut Street
ML CN-WN-06CT
Cincinnati, Ohio 45202
Attention: Brian George
Ladies and Gentlemen:
The undersigned hereby subscribes for and agrees to purchase the number of
shares of common stock, par value $0.25 (the "Shares"), of Belmont Bancorp, an
Ohio corporation ("Belmont"), indicated below. The undersigned has executed and
delivered this Subscription Agreement in connection with Belmont's offering of
Shares described in the Prospectus dated _____________, 2000 which accompanies
this Subscription Agreement, as it may be supplemented.
The undersigned agrees to purchase the Shares subscribed for herein for the
purchase price of $______ per share and has delivered to Belmont with this
Subscription Agreement a check made payable to "Firstar Trust f/b/o Belmont
Bancorp" in an amount equal to the aggregate purchase price of all Shares for
which the undersigned desires to subscribe.
The undersigned acknowledges receipt of a copy of (1) our Prospectus, (2)
our Amended Annual Report on Form 10-K/A for the year ended December 31, 1998,
and (3) our Amended Quarterly Report on Form 10-Q/A for the three months ended
September 30, 1999.
The undersigned acknowledges that Belmont may accept or decline the
undersigned's subscription. Generally, it is our intention to accept
subscriptions for shares in the Ancillary Offering in the order received.
Belmont's decision to accept or decline the subscription will be made at the
time the Rights Offering and the Ancillary Offering are completed.
----------------------------------------
_________ Shares ($___________) Please print name(s) of subscriber(s)
Number of Shares subscribed for
(minimum of [______] Shares) and
total subscription price at
$[_____] per Share) ----------------------------------------
Signature
----------------------------------------
Signature of co-subscriber
- ----------------------------------
How Shares are to be held if this
is a co-investment, e.g., as joint
tenants (with right of
survivorship) or tenants-in-common ----------------------------------------
Date
B-1
<PAGE>
Belmont Bancorp
[_____] shares of Common Stock
TABLE OF CONTENTS
Prospectus Summary ................................................... 3
Risk Factors ......................................................... 5
Where You Can Find More Information .................................. 8
Incorporation of Information That We File With the SEC ............... 9
Recent Developments .................................................. 9
Forward-Looking Statements ........................................... 13
Use of Proceeds ...................................................... 14
Determination of Offering Price ...................................... 14
Dilution ............................................................. 14
Plan of Distribution ................................................. 14
Transactions With Directors and Officers ............................. 17
Description of Capital Stock ......................................... 17
Legal Opinions ....................................................... 21
Rights Offering Subscription Agreement ............................... A-1
Ancillary Offering Subscription Agreement ............................ B-1
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
SEC Filing Fee....................................................... $ 2,780
Printing and Mailing Fees and Expenses .............................. 50,000*
Legal Fees and Expenses ............................................. 75,000*
Accounting Fees and Expenses ........................................ 25,000*
Miscellaneous ....................................................... 22,220*
Total ...................................................... 175,000
-------
- ----------
* Estimate
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Ohio General Corporation Law ("OGCL") provides that Ohio corporations
may indemnify an individual made a party to any threatened, pending, or
completed action, suit or proceeding whether civil, criminal, administrative or
investigative, because the individual is or was a director, officer, employee or
agent of the corporation, against liability incurred in the proceeding if the
person: (i) acted in good faith and (ii) the individual believes his conduct was
in the corporation's best interest or was not opposed to the corporation's best
interest.
The OGCL further provides that a corporation shall indemnify an individual
who was fully successful on the merits or otherwise in any proceeding to which
the director, officer, employee or agent was a party because the individual was
or is a director, officer, employee or agent of the corporation, for reasonable
expenses incurred by the director in connection with the proceeding. The OGCL
also provides that a corporation may purchase and maintain insurance on behalf
of the individual who is or was a director, officer, employee or agent of the
corporation or who, while a director, officer, employee or agent of the
corporation is or was serving at the request of the corporation as a director,
officer, partner, trustee, employer or agent of another foreign or domestic
corporation, partnership, joint venture, trust, employee benefit plan or other
enterprises, against liability asserted against or incurred by the individual in
that capacity or arising from the individual's status as a director, officer,
employee, or agent.
The Bylaws of Belmont Bancorp (the "Registrant") provide that the
Registrant shall indemnify a director, office, employee or agent of the
Registrant to the extent permitted by the OGCL. Such indemnification, unless
ordered by a court, shall only be provided if the Registrant determines that
such indemnification is proper in the circumstances because the indemnified
person has met the applicable standard of conduct as set forth in the OGCL. Such
determination may be made by either:
(1) a majority of a quorum of directors not party to the proceedings; or
(2) if such quorum is not obtainable, or if the majority vote described in
(i) above so directs, in a written opinion by independent legal
counsel; or
(3) by the shareholders; or
(4) by the court in which such proceeding was brought.
The Registrant will maintain a directors' and officers' liability insurance
policy, including bank reimbursement, for the purpose of providing
indemnification to its directors and officers in the event of such a threatened,
pending or completed action.
II-1
<PAGE>
The Registrant also has agreed to indemnify FiCap Strategic Partners, LLC
("FiCap") and Doepken Keevican & Weiss Professional Corporation ("DKW") against
claims arising out of FiCap's engagement by the Registrant. James F. Bauerle, a
member of DKW and formerly an officer of the Registrant, and David G. Brewick
and Gregory W. Doner, formerly officers of the Registrant, are principals of
FiCap.
ITEM 16. EXHIBITS
Exhibit
Number Description
- ------ -----------
4.1 -- Charter as amended to date(1)
4.2 -- Bylaws as currently in effect(1)
5 -- Opinion of Doepken Keevican & Weiss Professional Corporation(4)
8 -- Opinion of Doepken Keevican & Weiss Professional Corporation (Tax
Matters)(4)
10.1-- Letter Agreements with FiCap Strategic Partners, LLC(1)
10.2-- Deferred Compensation Plan and Trust for J. Vincent Ciroli, Jr., William
Wallace and Jane R. Marsh(1)
10.3-- Executive Incentive Cash Agreement for J. Vincent Ciroli, Jr., William
Wallace and Jane R. Marsh(1)
10.4-- Executive Phantom Stock Agreement for J. Vincent Ciroli, Jr., William
Wallace and Jane R. Marsh(1)
10.5-- Supplemental Retirement Plan for J. Vincent Ciroli, Jr., William Wallace
and Jane R. Marsh(1)
13.1-- Registrant's 1998 Annual Report on Form 10-K(3)
13.2-- Registrant's 1998 Annual Report (amended) on Form 10-K/A(3)
13.3-- Registrant's Quarterly Report on Form 10-Q for the period ended September
30, 1999(3)
23.1-- Consent of Doepken Keevican & Weiss Professional Corporation (included in
Exhibits 5 and 8)(4)
23.2-- Consent of S.R. Snodgrass A.C.(4)
99.1-- Form of letter to shareholders(2)
- ----------
(1) Filed as and exhibit to the original registration statement filed November
16, 1999.
(2) To be filed by amendment.
(3) Incorporated herein by reference.
(4) Filed herewith.
ITEM 17. UNDERTAKINGS.
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement;
II-2
<PAGE>
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement.
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed with or furnished
to the Commission by the Registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities Exchange Act
of 1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(4) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(5) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the Registrant of expenses incurred or paid by a director,
officer or controlling person of the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements of filing on Form S-2 and has duly caused this registration
statement to be signed on its behalf by the undersigned, in the City of St.
Clairsville, State of Ohio on January 12, 2000.
BELMONT BANCORP
-----------------------
By: Wilbur R. Roat
Title: President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities and
on the dates stated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
<S> <C> <C>
/s/ W. Quay Mull II
- -------------------------
W. Quay Mull II Chairman of the Board, December 20, 1999
and Director
/s/ Wilbur R. Roat
- -------------------------
Wilbur R. Roat President and Chief January 12, 2000
Executive Officer
(principal executive officer)
/s/ Jane R. Marsh
- -------------------------
Jane R. Marsh Secretary January 12, 2000
(principal financial
and accounting officer)
/s/ John A. Belot
- -------------------------
John A. Belot Director December 20, 1999
- -------------------------
J. Vincent Ciroli, Jr. Director
/s/ Mary L. Holloway Haning
- -------------------------
Mary L. Holloway Haning Director December 20, 1999
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
/s/ Charles J. Kaiser, Jr.
- -------------------------
Charles J. Kaiser, Jr. Director December 20, 1999
/s/ John H. Goodman II
- -------------------------
John H. Goodman II Director December 20, 1999
/s/ Dana J. Lewis
- ------------------------- Director December 20, 1999
/s/ James R. Miller
- -------------------------
James R. Miller Director December 20, 1999
/s/ Terrence A. Lee
- -------------------------
Terrence A. Lee Director December 20, 1999
/s/ Thomas P. Olszowy
- -------------------------
Thomas P. Olszowy Director December 20, 1999
/s/ Keith A. Sommer
- -------------------------
Keith A. Sommer Director December __, 1999
/s/ Charles A. Wilson, Jr.
- -------------------------
Charles A. Wilson, Jr. Director December 20, 1999
</TABLE>
EXHIBIT 5. OPINION OF DOEPKEN, KEEVICAN & WEISS PROFESSIONAL CORPORATION
January 11, 2000
Belmont Bancorp
325 Main Street
Bridgeport, Ohio 43912
RE: Belmont Bancorp
Registration Statement on Form S-2
Ladies and Gentlemen:
We have acted as counsel for Belmont Bancorp, an Ohio corporation (the
"Company"), in connection with the registration with the Securities and Exchange
Commission (the "SEC") by the Company of up to 2,000,000 shares of the Company's
common stock ("Common Stock") pursuant to the Securities Act of 1933, as amended
(the "Act"), for sale by the Company.
In connection with the registration, we have examined the following:
(a) The Certificate of Incorporation and By-laws of the Company, each as
amended to date;
(b) The Registration Statement on Form S-2 (the "Registration Statement"),
including the prospectus which is a part thereof (the "Prospectus"),
relating to the Common Stock, as filed with the SEC;
(c) Resolutions of the Board of Directors of the Company authorizing the
issuance of the Common Stock; and
(d) Such other agreements, documents, records, opinions, certificates and
papers as we have deemed necessary or appropriate in order to give the
opinions hereinafter set forth.
The opinions hereinafter expressed are subject to the following
qualifications and assumptions:
<PAGE>
Belmont Bancorp
January 11, 2000
Page 2
(i) In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as
originals and the conformity of all documents submitted to us as
copies to the originals thereof.
(ii) As to the accuracy of certain factual matters, we have relied on
the certificates of officers of the Company and certificates,
letters, telegrams or statements of public officials.
Based upon and subject to the foregoing, we are pleased to advise you that,
insofar as the laws of the State of Ohio are concerned, it is our opinion that
the shares of Common Stock being registered for sale under the Registration
Statement have been duly authorized and, when issued and paid for in accordance
with the terms described in the Prospectus, will be legally issued, fully paid
and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the use of our name in the Prospectus in
connection with the matters referred to under the caption "Legal Matters."
Very truly yours,
/s/ DOEPKEN KEEVICAN & WEISS
DOEPKEN KEEVICAN & WEISS
PROFESSIONAL CORPORATION
EXHIBIT 8. OPINION OF DOEPKEN, KEEVICAN & WEISS PROFESSIONAL CORPORATION
REGARDING TAX MATTERS
January 11, 2000
Belmont Bancorp
325 Main Street
Bridgeport, Ohio 43912
Ladies and Gentlemen:
You have asked that we furnish Belmont Bancorp (the "Company") an opinion
of our firm with respect to certain tax issues in connection with the Company's
proposed offering of shares of its common stock, as set forth in its
registration statement on Form S-2 and related prospectus (the "Prospectus")
filed with the Securities and Exchange Commission. We have reviewed the
Registration Statement and have made such investigation of laws and regulations
as we have deemed necessary under the circumstances. Based upon our review and
investigation, we are of the following opinion:
1. Neither the receipt nor the exercise of the rights to purchase the
Company's Common Stock in the rights offering described in the
Prospectus will result in taxable income to the shareholders of the
Company who receive such rights;
2. No deductible loss will be realized if such rights are allowed to
expire without exercise;
3. The tax basis of the shares of Common Stock acquired upon the exercise
of such rights or in the ancillary offering described in the
Prospectus will be the subscription price thereof; and
4. There is no allocation of an existing shareholder's tax basis in
current shares held by such shareholder to such rights, whether or not
such rights are exercised, because (based on the limited time period
in which the shareholder has the option to exercise a right and the
fact that the purchase price per share on the exercise of a right is
substantially equal to the per share price of the shares sold in the
ancillary offering) the Company has determined that such value is
zero.
We hereby consent to the filing of this opinion as an Exhibit to said
Registration Statement as amended, and to its reference under the caption, "Plan
of Distribution - Federal Income Taxes."
Very truly yours,
/s/ DOEPKEN KEEVICAN & WEISS
DOEPKEN, KEEVICAN & WEISS
PROFESSIONAL CORPORATION
EXHIBIT 23.2
CONSENT
SNODGRASS
Certified Public Accountants and Consultants
Board of Directors
Belmont Bancorp
We consent to the use of our report dated May 19, 1999, included in the 1998
Annual Report to Security Holders of the Company incorporated by reference in
the Amended Annual Report on Form 10-K/A incorporated herein by reference.
/s/ S. R. SNODGRASS, A.C.
Wheeling, West Virginia
January 11, 2000
