<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934
For Quarterly Period Ended March 31, 1995
-----------------------------------------------------
Commission file number 0-12120
---------------------------------------------------------
Bankers First Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-1529166
- ---------------------------------- -------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
One 10th Street, Augusta, Georgia 30901
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No .
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes
of common stock as of the latest practicable date.
CLASS Outstanding at April 26, 1995
------------------------------- -----------------------------
Common Stock, $.01 Par Value 4,727,153 Shares
<PAGE> 2
BANKERS FIRST CORPORATION AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1995
INDEX
<TABLE>
<CAPTION>
Page
<S> <C>
PART I. Financial Information
Item 1. Financial Statements
Consolidated Statements of Financial Condition at
March 31, 1995 and December 31, 1994 . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Operations -
Three Months ended March 31, 1995 and 1994 . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows -
Three Months ended March 31, 1995 and 1994. . . . . . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . 7-18
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . . . . . . . . . . 19
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20-36
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BANKERS FIRST CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Dollars in thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
----------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Cash and amounts due from depository institutions $ 23,566 26,017
Interest-bearing deposits in other financial institutions 5,898 3,178
Investment securities available for sale 55,332 44,816
Investment securities held to maturity (market value $48,987 in
1995 and $50,988 in 1994) 49,589 52,377
Federal Home Loan Bank stock 12,950 13,845
Loans receivable, net 910,396 878,892
Accrued interest receivable 6,474 6,334
Investment properties, net 14,578 14,846
Real estate owned, net 4,010 3,504
Premises and equipment, net 16,593 15,631
Cost in excess of net assets acquired 5,019 2,794
Other assets 2,533 1,613
---------- ----------
Total assets $1,106,938 1,063,847
========== ==========
LIABILITIES
Deposits $ 733,529 683,881
Retail repurchase agreements 15,118 18,588
Advance payments by borrowers for taxes and insurance 3,441 2,414
Other borrowings 253,090 257,295
Deferred income taxes 940 888
Other liabilities 11,987 16,320
---------- ----------
Total liabilities 1,018,105 979,386
---------- ----------
STOCKHOLDERS' EQUITY:
Serial preferred stock, $.01 par value;
authorized 7,500,000 shares; none outstanding - -
Common stock, $.01 par value; authorized 12,500,000 shares;
issued and outstanding 4,725,246 shares in 1995 and
4,500,442 shares in 1994 $ 47 45
Additional paid-in capital 56,586 55,222
Retained earnings (substantially restricted) 34,221 31,661
Loans to Employee Stock Ownership Plan and others (2,402) (2,286)
Net unrealized holding gains/(losses) on investment securities
available for sale 381 (181)
---------- ----------
Total stockholders' equity 88,833 84,461
---------- ----------
Total liabilities and stockholders' equity $1,106,938 1,063,847
========== ==========
Book value per share $ 18.80 $ 18.77
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
BANKERS FIRST CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
1995 1994
---------- --------
<S> <C> <C>
INTEREST INCOME:
Interest on loans $ 18,552 13,937
Interest on investment securities 1,818 2,235
Dividends on Federal Home Loan Bank stock 242 125
Other 124 62
-------- ------
Total interest income 20,736 16,359
INTEREST EXPENSE:
Interest on deposits 7,370 6,244
Interest on retail repurchase agreements 118 93
Interest on other borrowings 3,914 2,332
-------- ------
Total interest expense 11,402 8,669
-------- ------
Net interest income 9,334 7,690
PROVISION FOR LOAN LOSSES 300 250
-------- ------
Net interest income after provision for loan losses 9,034 7,440
PROVISION FOR REAL ESTATE LOSSES 100 350
OTHER INCOME:
Loan servicing fees 57 53
Loan fees and service charges 253 241
Service charges on deposit accounts 1,293 1,137
Gain (loss) on sale of loans 98 (162)
Gain (loss) on sale of investment securities (9) 1,862
Real estate operations 402 51
Other 46 61
-------- ------
Total other income 2,140 3,243
OPERATING EXPENSE:
Salaries and employee benefits 2,863 2,441
Net occupancy expense 1,149 994
Advertising and promotion 207 199
FDIC insurance premiums 461 453
Other 1,331 1,191
-------- ------
Total operating expense 6,011 5,278
Amortization of costs in excess of net assets acquired 233 148
-------- ------
Total noninterest expense 6,244 5,426
Net noninterest expense 4,204 2,533
-------- ------
Income before income tax and extraordinary item 4,830 4,907
INCOME TAX EXPENSE 1,568 1,639
-------- ------
Income before extraordinary item 3,262 3,268
Extraordinary item, net - (908)
-------- ------
NET INCOME $ 3,262 2,360
======== ======
PRIMARY EARNINGS PER SHARE:
Income before extraordinary item $ 0.65 0.66
Extraordinary item, net - (0.18)
-------- ------
Net income $ 0.65 0.48
======== ======
Weighted average common and common equivalent shares (in thousands) 5,024 4,921
======== ======
FULLY DILUTED EARNINGS PER SHARE:
Income before extraordinary item $ 0.65 0.66
Extraordinary item, net - (0.18)
-------- ------
Net income $ 0.65 0.48
======== ======
Weighted average common and common equivalent shares (in thousands) 5,044 4,923
======== ======
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
BANKERS FIRST CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Dollars in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------
1995 1994
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 3,262 2,360
Adjustments to reconcile net income to net cash provided (used) by operations:
Provision for loan and real estate losses 400 600
Depreciation and amortization 481 554
Amortization of cost in excess of net assets acquired 233 148
Amortization and accretion, net 28 105
(Gain) loss on sale of loans (98) 162
(Gain) loss on sale of investment securities 9 (1,862)
(Gain) loss on sale of real estate, premises, and equipment (519) (488)
FHLB stock purchases, net of redemptions and stock dividends 895 (846)
Net change in other assets and accrued interest receivable (1,060) 233
Net change in other liabilities, accrued interest on deposits,
and deferred income taxes (3,609) 5,488
--------- -------
Net cash provided (used) by operating activities 22 6,454
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investment securities available for sale (14,606) (2,000)
Proceeds from sale and redemption of investment securities available for sale 1,991 5,322
Proceeds from maturity and principal collections of investment securities
available for sale 2,946 7,742
Proceeds from maturity and principal collections of investment securities
held to maturity 2,758 4,227
Loan originations net of principal collections (21,710) (62,692)
Purchases of loans (21,000) (2,326)
Proceeds from sale of loans 10,785 19,716
Net additions to premises and equipment (458) (194)
Improvements and additions to real estate owned and investment property (664) (379)
Proceeds from sale of real estate and investment property 1,245 1,721
--------- -------
Net cash provided (used) by investment activities (38,713) (28,863)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net change in deposit accounts (7,174) 5,604
Net change in retail repurchase agreements (3,470) (56)
Proceeds from long-term borrowings - -
Repayments of long-term borrowings (220) (18,280)
Net change in short-term borrowings (3,900) 43,000
Net change in advance payments by borrowers for taxes and insurance 1,027 640
Dividends paid (702) (445)
Proceeds from exercise of stock options and dividend reinvestment 1,165 95
Cash received on purchase of branches 52,234 -
--------- -------
Net cash provided (used) by financing activities 38,960 30,558
--------- -------
Increase (decrease) in cash and cash equivalents 269 8,149
Cash and cash equivalents at beginning of year 29,195 26,814
--------- -------
Cash and cash equivalents at end of period $ 29,464 34,963
========= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 10,123 7,720
Income Taxes 329 35
NONCASH TRANSACTIONS-OTHER:
Transfer of loans to and write downs of repossessed assets 532 809
Financing provided on sales of real estate 258 344
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
The accompanying Consolidated Statement of Financial Condition as of
March 31, 1995, and the related Consolidated Statements of Operations for the
three month periods ended March 31, 1995 and 1994, and the Consolidated
Statements of Cash Flows for the three month periods ended March 31, 1995 and
1994 are unaudited. In the opinion of Management, all eliminations and
adjustments necessary for a fair presentation have been made; however, the
statements were prepared in accordance with the instructions for preparation of
Securities and Exchange Commission Form 10-Q and do not include all information
and disclosures necessary for fair presentation in accordance with generally
accepted accounting principles. These financial statements should, therefore,
be read in conjunction with management's discussion and analysis of the
complete Annual Report for the year ended December 31, 1994 which was filed
with the Company's most recent Form 10-K.
Operating results for the three month period ended March 31, 1995 are
not necessarily indicative of the results that may be expected for the year.
Adjustments to the balance sheet and income statement are typically of a
normal, recurring nature. Any adjustments not meeting this criteria are
disclosed in Management's Discussion and Analysis of Financial Condition and
Results of Operations or Notes to the Consolidated Financial Statements.
Certain amounts in the prior year Financial Statements have been
reclassified to conform with current year presentation.
2. Recent Accounting Pronouncements
In May 1993, the Financial Accounting Standards Board issued Statement
of Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for
Impairment of a Loan." SFAS 114 requires impaired loans to be measured based
on the present value of expected future cash flows, discounted at the loan's
effective interest rate, or at the loan's observable market price, or at the
fair value of the collateral if the loan is collateral dependent, beginning in
1995. Loans that are determined to be impaired require a valuation allowance
equivalent to the amount of impairment. The valuation allowance is to be
established by a charge to the provision for loan losses. In October 1994, the
Financial Accounting Standards Board issued Statement No. 118, "Accounting by
Creditors for Impairment of a Loan-Income Recognition and Disclosures," which
amends the requirements of SFAS 114 regarding interest income recognition and
related disclosure requirements. Initial adoption of SFAS 114 and SFAS 118
must be reflected prospectively.
The Company adopted SFAS 114 and SFAS 118 on January 1, 1995, and the
impact to the consolidated financial statement was not material. At March 31,
1995, the recorded investment in loans that are considered to be impaired under
SFAS 114 was $4.2 million (of which $2.7 million were classified as
nonaccrual). Included in this amount is $1.8 million of impaired loans for
which the allowance for credit losses is $0.4 million.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS FOR THE QUARTERS ENDED MARCH 31, 1995 AND 1994
Net interest income increased $1.6 million compared to the 1994
quarter principally due to a $158.4 million increase in average earning assets,
a $146.7 million increase in average interest bearing liabilities and a 3 basis
point increase in the interest spread. For the 1994 and 1995 quarters
respectively, the yield on average earning assets increased from 7.67% to
8.20%; however, the increase in yield was partially offset by an increase in
the average rate paid on interest-bearing liabilities from 4.20% to 4.70%. As
a result of the above changes in earning assets and interest bearing
liabilities, the net interest margin increased to 3.64% in the 1995 quarter
from 3.56% in 1994.
The provision for loan losses was $300 thousand compared to $250
thousand in the 1994 quarter. Net loan charge offs were $162 thousand versus
$498 thousand in 1994. The provision for real estate losses was $100 thousand
compared to $350 thousand in 1994. At March 31, 1995 the allowance for loan
loses was $7.8 million or 0.86% of net loans and 0.71% of total assets. Loan
loss reserves to non-performing loans was 212.8%. The coverage ratio, loan
loss reserves to non-performing loans and real estate owned, was 102.0%.
Other income for the quarter was $2.1 million compared to $3.2 million
in the year earlier period. Service charges on deposit accounts were $156
thousand higher due to a $24.4 million increase in average checking account
balances. Real estate operations income increased $0.4 million from 1994
levels primarily due to $0.1 million of nonrecurring gains in the 1995 quarter
and $0.1 million of nonrecurring losses in the 1994 quarter. Other income in
the 1994 quarter included a $1.9 million nonrecurring gain on the sale of 317
thousand shares of Synovus Financial Corp. common stock. This gain was
partially offset by a $0.4 million nonrecurring charge for the write down of
the present value of loan servicing rights. The remaining balance at March 31,
1995 of excess loan servicing rights is $0.7 million.
Operating expenses were $6.0 million compared to $5.3 million for the
1994 quarter. The overhead ratio, general and administrative expense to
average assets, improved to 2.22% in 1995 from 2.28% in 1994. The efficiency
ratio, general and administrative recurring expense divided by net interest
income and other recurring income, was 52.90% in 1995 compared to 54.29% in
1994.
7
<PAGE> 8
Income tax expense for the 1995 quarter was $1.6 million or 32.5% of
income before tax compared to $1.6 million or 33.4% for the same 1994 period.
The corporate income tax rate for 1995 and 1994 differs from the Company's
actual effective tax rate principally due to the reduction of the tax valuation
allowance for deferred state income tax benefits.
In the 1994 quarter, $28.0 million of FHLB advances were prepaid and
an extraordinary charge of $908 thousand net of income tax benefit was
recognized.
SCHEDULE I
BANKERS FIRST CORPORATION AND SUBSIDIARIES
PROFITABILITY & OVERHEAD RATIOS
<TABLE>
<CAPTION>
1995 1994 1993
--------- ---------------------------- ------
3/31 12/31 9/30 6/30 3/31 12/31
--------- ------ ----- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
PROFITABILITY
Yield on Earning Assets 8.20 % 8.02 7.90 7.67 7.67 7.85
Cost of Funds 4.70 4.40 4.16 4.07 4.20 4.32
Interest Spread 3.50 3.62 3.74 3.60 3.47 3.53
Net Interest Margin 3.64 3.74 3.86 3.70 3.56 3.58
Net Non-Interest 1.55 1.34 1.77 1.63 0.94 1.65
Return on Assets 1.20 1.15 1.12 1.09 1.02 0.96
Return on Equity 15.05 14.52 13.92 13.23 12.20 11.64
OVERHEAD
G&A/Average Assets 2.22 % 2.20 2.33 2.30 2.28 2.32
Amortization of Goodwill/Average Assets 0.09 0.08 0.07 0.06 0.06 0.07
Compensation/Average Assets 1.06 1.06 1.05 1.05 1.05 1.02
Occupancy/Average Assets 0.42 0.46 0.46 0.45 0.43 0.44
Number of Employees (FTE's) 380 372 372 350 351 351
Dollars of Assets per Employee
(in millions) $ 2.85 2.83 2.77 2.74 2.63 2.59
GAP
One Year Gap 1.49 % 3.25 6.84 6.66 5.68 11.19
</TABLE>
8
<PAGE> 9
ASSET/LIABILITY MANAGEMENT
SUMMARY
The Company utilizes Sendero Asset/Liability modeling software to
measure and monitor its exposure to interest rate risk. Using this software,
the duration and repricing periods of earning assets and interest bearing
liabilities are projected and measured under various interest rate scenarios on
a quarterly basis. Based on this analysis, strategies are developed to achieve
returns that are within the guidelines of the Company's interest rate risk
policy. This model provides two primary measures of interest rate risk: rate
shock analysis and the Asset/Liability Gap ratio.
INTEREST RATE SENSITIVITY
Rate shock analysis provides a dynamic measurement of interest rate
sensitivity. The rate shock model assumes an immediate and sustained change in
the level of interest rates. Rate changes are computed in 100 basis point
increments ranging from a minus 400 basis point decline to a positive 400 basis
point increase in interest rate levels. It is unlikely that an immediate and
sustained change in interest rate of this magnitude would occur. Historically,
interest rates generally increase or decrease over a period of time in what is
categorized as a rate cycle. The hypothetical modeling of an instantaneous
rate shock provides insight as to the potential impact on the Company's equity
capital and its profitability under these circumstances.
For example, the results of the rate shock analysis at March 31, 1995
indicate that an immediate and sustained change caused by a 100 basis point
increase in interest rates would produce a decline in the projected annual net
interest margin of 9 basis points. A 100 basis point decrease in interest
rates would result in a 18 basis point increase in the projected net interest
margin for the same period. As measured by the interest rate shock analysis,
the Company has developed strategies to achieve targeted returns under various
interest rate scenarios. However, since all interest rates do not adjust
concurrently, this analysis is only an indicator of the sensitivity to changes
in interest rates.
ASSET/LIABILITY GAP RATIO
Another measure of interest rate risk is the Asset/Liability Gap
ratio. Over the past two years the one year Gap ratio has ranged between
11.19% and 1.49%. At March 31, 1995 the one year Gap ratio was 1.49% with
62.3% of total rate sensitive assets and 63.3% of total rate sensitive
liabilities scheduled to reprice within twelve months compared to 59.9% and
55.3%, respectively, a year earlier. Schedule I summarizes the one year Gap
ratio for the most recent six quarters. Schedule II shows the current Gap
position by type of rate sensitive assets and liabilities and by major
repricing period.
9
<PAGE> 10
SCHEDULE II
BANKERS FIRST CORPORATION AND SUBSIDIARIES
GAP ANALYSIS AT MARCH 31, 1995
(Dollars in thousands)
<TABLE>
<CAPTION>
----------------------------------------------------------------
Six Six Months One to Three to Over
Months to One Three Five Five
or Less Year Years Years Years Total
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
RATE SENSITIVE ASSETS
Loans $ 394,274 187,185 183,968 64,905 88,356 918,688
Investment securities 28,926 20,545 35,069 10,560 9,821 104,921
FHLB Stock 12,950 - - - - 12,950
Deposit funds 5,898 - - - - 5,898
--------- ------- ------- ------ ------ ---------
Total 442,048 207,730 219,037 75,465 98,177 1,042,457
RATE SENSITIVE LIABILITIES
Deposits 200,113 237,679 145,532 53,424 95,109 731,857
Borrowings 180,444 15,000 51,326 20,000 1,438 268,208
--------- ------- ------- ------ ------ ---------
Total 380,557 252,679 196,858 73,424 96,547 1,000,065
GAP POSITION
Asset (liability) Gap Position $ 61,491 (44,949) 22,179 2,041 1,630 42,392
========= ======= ======= ====== ====== =========
Cumulative Asset (liability) Gap $ 61,491 16,542 38,721 40,762 42,392 42,392
========= ======= ======= ====== ====== =========
Gap Position as a percentage
of total assets 5.56 % 1.49 3.50 3.68 3.83 3.83
========= ======= ======= ====== ====== =========
GAP POSITION AT DECEMBER 31, 1994:
Asset (liability) Gap Position $ 38,204 (3,621) 1,294 2,410 3,653 41,940
========= ======= ======= ====== ====== =========
Cumulative Asset (liability) Gap $ 38,204 34,583 35,877 38,287 41,940 41,940
========= ======= ======= ====== ====== =========
Gap Position as a percentage
of total assets 3.59 % 3.25 3.37 3.60 3.94 3.94
========= ======= ======= ====== ====== =========
</TABLE>
The difference between the amount of interest sensitive assets and
interest sensitive liabilities to be repriced during a specified time period is
referred to as the "asset(liability) gap position". The classification and
availability of interest sensitive assets and liabilities available for
repricing is determined as follows: (1) loans tied to the base lending rate or
other indices depend on the time the adjustments may occur; (2) loans with
stated call dates are amortized without any prepayment assumption with the
balance at the call date reflected in that period; (3) other loans are
amortized using market based prepayment assumptions; (4) investments are
categorized by stated maturity; (5) regular savings and regular NOW accounts
are considered to be interest sensitive and are amortized using projected
deposit repricing rates; (6) money market deposit accounts, Super NOW accounts,
and repurchase agreements are subject to rate change daily; and (7) other
deposits and borrowings are shown by stated maturity. Management believes that
the above prepayment and withdrawal assumptions are reasonable based upon the
Company's historical experience.
The Company manages its Asset/Liability position by selling all 30
year fixed rate loan production, originating and retaining adjustable rate
mortgages and shorter-term loans, and by
10
<PAGE> 11
using funding sources, such as core deposits, longer term certificates of
deposit and long-term borrowings, that provide durations similar to the assets
held in portfolio.
At March 31, 1995, the Company did not have any futures, swaps or
option contracts. The Company has commitments to originate, purchase and sell
loans. These commitments are in the normal course of business and in the
opinion of management do not involve more than the normal risk of loss.
LOAN PORTFOLIO
During the first quarter of 1995, net loans receivable grew by $31.5
million with residential real estate and residential construction loans
accounting for $19.6 million and $6.0 million, respectively, of the increase.
Residential loan originations were $39.5 million, down $3.7 million from prior
quarter levels due to the rise in interest rates. Purchases of residential
loans decreased $4.6 million to $21.1 million for the quarter. Residential
loan sales in the secondary market of 30 year fixed rate loans were $10.7
million compared to $15.2 million in the prior quarter. The consumer loan
portfolio increased $6.4 million over the prior quarter as consumer loan demand
remained strong. Schedule III provides detail of the loan portfolio mix at
March 31, 1995 and December 31, 1994. Schedule V provides a summary of loan
origination, sales, and payments for the last six quarters.
SCHEDULE III
BANKERS FIRST CORPORATION
LOAN PORTFOLIO
(Dollars in thousands)
<TABLE>
<CAPTION>
3/31/95 12/31/94
----------------- -----------------
Amount Percent Amount Percent
-------- ------- -------- -------
<S> <C> <C> <C> <C>
LOANS
Loans held for sale $ 2,882 0.32 % $ 1,353 0.15 %
Construction - Residential (Net) 52,838 5.80 46,830 5.33
Construction - Commercial (Net) 11,431 1.26 11,201 1.27
Residential real estate 485,206 53.30 465,560 52.97
Commercial real estate 168,365 18.49 170,504 19.40
Commercial and corporate 18,614 2.04 18,754 2.13
Consumer 180,154 19.79 173,789 19.77
--------- ------ --------- ------
Gross loans 919,490 101.00 887,991 101.04
LESS:
Unearned interest income and deferred loan fees 1,246 0.14 1,389 0.16
Allowance for losses 7,848 0.86 7,710 0.88
--------- ------ --------- ------
NET LOANS $ 910,396 100.00 % $ 878,892 100.00 %
========= ====== ========= ======
</TABLE>
11
<PAGE> 12
SCHEDULE IV
BANKERS FIRST CORPORATION AND SUBSIDIARIES
ALLOWANCE FOR LOAN LOSSES
(Dollars in thousands)
<TABLE>
<CAPTION>
1995 1994 1993
---------- ------------------------------------ -------
3/31 12/31 9/30 6/30 3/31 12/31
---------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Allowance for Losses Beginning of Period $ 7,710 8,782 8,863 8,527 8,775 9,000
Provision for Loan Losses 300 1,100 200 250 250 69
RECOVERIES
Real Estate Loans:
Residential 2 2 23 9 - -
Commercial - 3 16 321 5 65
Commercial & Industrial 13 12 - - - 7
Consumer 89 91 89 108 77 81
---------- ----- ----- ----- ----- -----
Total Recoveries 104 108 128 438 82 153
LOSSES CHARGED TO
Real Estate Loans:
Residential 27 370 68 30 36 132
Commercial 26 1,711 156 123 367 132
Commercial & Industrial 23 25 18 62 43 11
Consumer 190 174 167 137 134 172
---------- ----- ----- ----- ----- -----
Total Charge-Offs 266 2,280 409 352 580 447
---------- ----- ----- ----- ----- -----
Net Charge-Offs 162 2,172 281 (86) 498 294
---------- ----- ----- ----- ----- -----
Allowance for Losses End of Period $ 7,848 7,710 8,782 8,863 8,527 8,775
========== ===== ===== ===== ===== =====
Allowance for losses as a percentage of
non-performing assets 101.95 % 121.11 118.97 101.92 82.11 68.12
ALLOCATION OF ALLOWANCE FOR LOAN LOSSES
Real Estate Loans:
Residential $ 1,415 1,442 2,815 2,861 2,882 2,890
Commercial 2,796 2,610 3,150 3,290 3,091 3,422
Commercial & Industrial 1,641 1,650 756 774 836 879
Consumer 1,996 2,008 2,061 1,938 1,718 1,584
---------- ----- ----- ----- ----- -----
Allowance for Losses End of Period $ 7,848 7,710 8,782 8,863 8,527 8,775
========== ===== ===== ===== ===== =====
</TABLE>
12
<PAGE> 13
SCHEDULE V
BANKERS FIRST CORPORATION AND SUBSIDIARIES
LOAN ACTIVITIES
(Dollars in thousands)
<TABLE>
<CAPTION>
1995 1994 1993
---------- ------------------------------------- ---------
3/31 12/31 9/30 6/30 3/31 12/31
---------- ------- --------- ------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Gross Loans Outstanding
Beginning of Period $ 887,991 854,133 792,895 734,233 690,249 664,006
ORIGINATED
Residential Construction 11,200 11,744 11,854 13,461 19,165 14,672
Other Residential 28,274 31,401 39,163 48,039 48,399 67,254
Commercial Real Estate 7,494 6,267 9,153 10,117 6,536 9,062
Other 32,506 33,709 38,090 43,528 58,825 29,914
--------- ------- ------- ------- ------- -------
Total Originated 79,474 83,121 98,260 115,145 132,925 120,902
PURCHASED
Residential Construction 9,532 7,931 8,354 4,340 1,353 3,677
Other Residential 11,553 17,795 25,457 14,390 977 -
--------- ------- ------- ------- ------- -------
Total Purchased 21,085 25,726 33,811 18,730 2,330 3,677
SOLD
Residential Construction - - - - - -
Other Residential 10,687 15,174 10,080 12,052 19,716 33,597
Commercial Real Estate - 8,601 - - - -
Other - - - - - 4,952
--------- ------- ------- ------- ------- -------
Total Sold 10,687 23,775 10,080 12,052 19,716 38,549
Net Payments and Swaps (58,373) (51,214) (60,753) (63,161) (71,555) (59,787)
--------- ------- ------- ------- ------- -------
Gross Loans Outstanding
End of Period $ 919,490 887,991 854,133 792,895 734,233 690,249
========= ======= ======= ======= ======= =======
</TABLE>
ASSET QUALITY
Non-performing assets at March 31, 1995 were $7.7 million, a decrease
of $2.7 million or 25.9% from 1994 levels. As a percent of total assets,
non-performing assets were 0.70% in 1995 compared to 1.09% a year earlier.
Non-performing assets consist of non-accrual loans and real estate
acquired by foreclosure or by deed in lieu of foreclosure. Non-accrual loans
represent loans that are 90 days delinquent (120 days for credit card loans) on
which interest is not accrued. Real estate acquired by foreclosure or through
in substance foreclosure is stated at the lower of cost or fair value less
estimated disposal costs at foreclosure. A valuation allowance is established
for subsequent reductions to the carrying value of repossessed real estate.
Restructured loans at March 31, 1995 were $2.4 million down $7.7
million or 76.3% from a year earlier. Restructured loans as a percent of total
assets were 0.21%.
13
<PAGE> 14
Restructured loans consist of loans that are made with terms that are
concessions from the Company's normal lending policies.
Schedule VI provides additional information on changes in
non-performing assets, restructured loans and performing loans 90 days past due
for the last six quarters.
Loans that are 90 days delinquent as to principal or interest are
reviewed for nonaccrual status. Nonaccrual status refers to loans no longer
accruing interest. If collection of interest is less than probable or the
collection of principal is doubtful, accrual of interest income is discontinued
and previously accrued interest is reversed. Interest income on nonaccrual
loans is recognized on a cash basis. Loans that are not well secured and in
the process of collection are placed on nonaccrual.
Well secured refers to debt collateralized in the form of liens on or
pledges of real or personal property, including securities, that is secured to
the net realizable value of the recorded investment. Debt is also considered
to be well secured if guaranteed by a financially responsible party with the
capacity to repay the debt.
In process of collection refers to actions to collect the debt in due
course either through legal action, including judgment enforcement procedures
or, in appropriate circumstances, through collection efforts not involving
legal action which are reasonably expected to result in repayment of the debt
or in its restoration to a current status. A loan is considered to be in
process of collection when, based upon a probable specific event such as the
closing of a negotiated sales contract, it is expected that the loan will be
repaid or brought current. There must be evidence that collection in full of
amounts due and unpaid will occur shortly. The timing and amount of repayment
should be certain and should occur within 90 days from the date of review by
the Credit Policy Committee.
As illustrated in Schedule VII, of total non-performing assets, 61.7%
are located in major metropolitan areas of Georgia, South Carolina and
Tennessee. The diversified economic base of these areas and their proximity to
the Company's banking operations are expected to be strong factors in reducing
the level of non-performing assets. However, further declines in commercial
real estate and real estate construction markets or in other economic sectors
could potentially result in increased levels of charge-offs, non-performing
assets and provision for loan losses.
14
<PAGE> 15
SCHEDULE VI
BANKERS FIRST CORPORATION AND SUBSIDIARIES
NON-PERFORMING ASSETS, RESTRUCTURED LOANS AND 90 DAY PAST DUE LOANS
(Dollars in thousands)
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------------------------------- -------
3/31 12/31 9/30 6/30 3/31 12/31
---------- ------- ------ -------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
NON-PERFORMING ASSETS
Nonaccrual Loans $ 3,688 2,862 2,581 3,143 3,186 5,416
Assets Acquired by Foreclosure 4,010 3,504 4,751 5,553 7,199 7,466
--------- ------ ------ ------ ------ ------
Total Non-Performing Assets 7,698 6,366 7,332 8,696 10,385 12,882
RESTRUCTURED LOANS 2,397 2,424 8,384 10,083 10,100 8,473
PERFORMING LOANS - 90 DAYS PAST DUE 1,749 2,188 1,607 1,166 2,050 1,994
--------- ------ ------ ------ ------ ------
Total NPA, Restructured & 90 Day Past Due $ 11,844 10,978 17,323 19,945 22,535 23,349
========= ====== ====== ====== ====== ======
AS A PERCENTAGE OF TOTAL ASSETS
Non-Performing Assets 0.70 % 0.60 0.70 0.89 1.09 1.42
Restructured Loans 0.21 0.23 0.81 1.02 1.07 0.93
Performing Loans - 90 Days Past Due 0.16 0.21 0.15 0.12 0.21 0.21
--------- ------ ------ ------ ------ ------
Total 1.07 % 1.04 1.66 2.03 2.37 2.56
========= ====== ====== ====== ====== ======
</TABLE>
SCHEDULE VII
BANKERS FIRST CORPORATION AND SUBSIDIARIES
NON-PERFORMING ASSETS BY GEOGRAPHIC LOCATION AND LOAN TYPES
MARCH 31, 1995
(Dollars in thousands)
<TABLE>
<CAPTION>
Residential Commercial Other
------------------- ------------ -------------
MSA/STATE A&D Const Perm Const Perm Corp Cons Total
----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Atlanta, GA $ - - 241 - 320 - - 561
Augusta, GA/SC 25 649 758 - 822 620 847 3,721
Chattanooga, TN/GA - 46 137 - - 39 - 222
Savannah, GA - 14 - - 75 153 - 242
Other - GA, SC, TN - - - 86 1,390 - - 1,476
----- --- ----- -- ----- --- ----- -----
Total GA, SC, TN 25 709 1,136 86 2,607 812 847 6,222
Other - - 604 - - - 872 1,476
----- --- ----- -- ----- --- ----- -----
Total $ 25 709 1,740 86 2,607 812 1,719 7,698
===== === ===== == ===== === ===== =====
</TABLE>
15
<PAGE> 16
SCHEDULE VIII
BANKERS FIRST CORPORATION AND SUBSIDIARIES
PERFORMING COMMERCIAL REAL ESTATE AND CONSTRUCTION LOANS BY GEOGRAPHIC
LOCATION
MARCH 31, 1995
(Dollars in thousands)
<TABLE>
<CAPTION>
MSA/STATE
<S> <C> <C>
Atlanta, GA $ 41,367 23.37 %
Augusta, GA/SC 74,098 41.86
Chattanooga, TN/GA 1,960 1.11
Savannah, GA/SC 15,314 8.65
Other - GA, SC, TN 35,493 20.05
----------- ------
Total GA, SC, TN 168,232 95.04
FL, NC, VA 8,779 4.96
----------- ------
Total $ 177,011 100.0 %
=========== =====
</TABLE>
LIQUIDITY
The Company's principal sources of funds are deposits, principal and
interest payments on loans and mortgage-backed securities, proceeds from the
sale of loans and securities, FHLB advances, other borrowings, and earnings on
investments.
The principal uses of funds are the origination and purchase of loans,
acquisition of investment and mortgage-backed securities, interest payments on
deposits and borrowings, payment for maturing certificates, repayments of
borrowings and other operating expenses. Schedule V summarizes loan
origination, sale, payment and swap activity for the past six quarters.
During the March 1995 quarter, Bankers First acquired branch
operations in Dublin and Chatsworth, Georgia totaling $55.9 million in deposits
and received $52.2 million in cash, $0.3 million in loans and $3.4 million of
other assets. The cash proceeds from the acquisition were used to pay down
FHLB advances.
At March 31, 1995, the Company maintained $23.6 million in cash and
$104.9 million in investments. Approximately 47.2% of the investment portfolio
matures or reprices within twelve months. The average balance sheets with
related yield and cost data presented in Schedule IX provide additional
liquidity information.
16
<PAGE> 17
SCHEDULE IX
BANKERS FIRST CORPORATION AND SUBSIDIARIES
AVERAGE BALANCES WITH YIELD/COST FOR PERIOD:
(Dollars in thousands)
<TABLE>
<CAPTION>
Quarter ending 12 Month Average
March 31, 1995 1994
---------------------- ----------------------
Avg. Bal. Rate Avg. Bal. Rate
--------------- ------ -------------- -------
<S> <C> <C> <C> <C>
EARNING ASSETS
Investment portfolio $ 30,654 7.45 36,173 6.42
FHLB Stock 13,553 7.14 11,342 6.23
Mortgage Backed Securities 78,207 7.05 92,815 6.48
Residential Construction 49,559 9.53 36,357 8.52
Commercial Construction 11,414 8.74 13,897 7.99
For Sale Residential 1,353 10.64 3,090 5.11
Residential Fixed Rate 235,921 7.66 202,956 7.73
Residential ARM/GPM/Balloon 239,185 7.14 200,890 6.93
Commercial Fixed Rate 11,544 10.74 12,927 10.85
Commercial Adj/Baln/Float 156,256 8.99 153,463 8.28
Corporate Loans 18,748 8.48 16,340 8.68
Consumer Credit Cards 12,910 13.94 11,858 13.05
Consumer Single Payment 3,172 9.46 2,816 8.06
Consumer Add-On 3,166 7.08 3,742 6.60
Consumer H.O.M.E. Loans 28,248 10.38 28,297 8.66
Consumer Other Loans 128,831 8.65 100,395 8.70
Deferred Loan Fees and Unearned Interest (1,394) N/A (1,692) N/A
Reserves for Losses (7,832) N/A (8,551) N/A
------------- ----- ------- -----
Total Earning Assets $ 1,013,495 8.20 917,115 7.82
============= ===== ======= =====
NON-INTEREST ASSETS:
Cash and Amounts Due from Depository Institutions $ 24,228 22,521
Cost in Excess of Net Assets Acquired 3,658 2,243
Other Assets 42,143 44,055
------------- -------
70,029 68,819
------------- -------
TOTAL ASSETS $ 1,083,524 985,934
============= =======
INTEREST BEARING LIABILITIES:
Overnight Money Markets $ 16,610 2.71 22,810 2.72
Certificates - 2 to 3 Month 2,317 2.98 4,180 2.94
Certificates - 6 Month 34,382 4.46 34,937 3.46
Certificates - 12 Month 71,084 4.78 62,593 3.74
Certificates - 13 to 29 Month 153,851 4.93 124,050 4.60
Certificates - 30 Month 45,225 4.96 49,184 5.06
Certificates - 31 to 59 Month 27,751 5.38 25,847 5.40
Certificates - 60 Month & Over 87,729 6.27 72,608 6.37
Jumbo Certificates 54,519 5.09 61,198 4.71
Savings Accts-Regular & Club 81,467 2.77 83,833 2.65
Super NOW Accounts 6,633 2.69 7,591 2.67
Checking Accounts 115,855 2.32 101,869 2.18
Commercial Investors Checking 17,019 2.81 17,637 2.51
Other Repurchase Agreements 26 - 61 3.28
Borrowed Money 267,115 5.98 221,843 5.14
Accrued Interest-Savings & Checking 2,794 N/A 3,723 N/A
------------- ----- ------- -----
Total Interest Bearing Liabilities $ 984,377 4.70 893,964 4.21
============= ===== ======= =====
NON-INTEREST LIABILITIES AND EQUITY:
Other Liabilities $ 12,443 11,744
Total Net Worth 86,704 80,226
------------- -------
Total Non-Interest Liabilities & Equity $ 1,083,524 985,934
============= =======
</TABLE>
17
<PAGE> 18
REGULATORY MATTERS
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") contained significant changes to the legal and regulatory
environment for insured depository institutions, including prompt corrective
action regulations, reductions in insurance coverage for certain kinds of
deposits, increased supervision by the Federal regulatory agencies, increased
reporting requirements for insured institutions, and new regulations concerning
internal controls, accounting, and operations.
The prompt corrective action regulations define specific capital
categories based on an institution's capital ratios. The capital categories,
in declining order, are "well capitalized", "adequately capitalized",
"undercapitalized", "significantly undercapitalized", and "critically
undercapitalized". Institutions categorized "undercapitalized" or worse are
subject to certain restrictions. To be considered "adequately capitalized", an
institution must generally have a leverage or core ratio greater than 4%, and a
total risk-based capital ratio greater than 8%.
Bankers First Savings Bank, FSB meets the regulatory definition of
well capitalized: a core capital ratio greater than 5% and a total risk-based
capital ratio greater than 10%. Schedule X summarizes the Bank's regulatory
capital at March 31, 1995.
SCHEDULE X
BANKERS FIRST SAVINGS BANK, FSB
ANALYSIS OF CAPITAL AND CAPITAL REQUIREMENTS
MARCH 31, 1995
(Dollars in thousands)
<TABLE>
<CAPTION>
Risk-
Tangible Core Risk- based
Tangible capital Core capital based captial
capital ratio capital ratio captial ratio
-------- -------- ---------- -------- ------- ---------
<S> <C> <C> <C> <C> <C> <C>
Equity capital $65,488 $65,488 $65,488
Qualifying subordinated debentures -- -- 3,520
Cost in excess of net assets acquired (5,019) (5,019) (5,019)
General valuation allowances -- -- 7,494
Excluded unrealized net
investment gains (325) (325) (325)
------- ------- -------
Regulatory capital 60,144 5.55 % 60,144 5.55 % 71,158 10.10 %
Capital requirement 16,243 1.50 % 43,315 4.00 % 56,346 8.00 %
------- ---- ------- ---- ------- -----
Capital exceeding requirement $43,901 4.05 % $16,829 1.55 % $14,812 2.10 %
======= ==== ======= ==== ======= =====
</TABLE>
The Bank may distribute as a dividend the higher of 100% of its net
income to date during the calendar year plus the amount that would reduce by
one-half its surplus capital ratio at the beginning of the calendar year or 75%
of its net income over the most recent four quarter period. At March 31, 1995
the amount available for distribution as a dividend by the Bank is $11.3
million. In addition, without the approval of OTS, capital distributions may
not be made if the effect thereof would be to cause the Bank's net worth to be
reduced below the regulatory capital requirements. No dividends were paid from
the Company's bank subsidiary in 1995 and 1994.
18
<PAGE> 19
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
(a) Exhibits
3.2 By-laws of Bankers First Corporation as amended
and restated on April 18, 1995
27 Financial Data Schedule (for SEC purposes only)
(b) Reports on Form 8-K - None
SIGNATURES
Pursuant to the requirement of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
BANKERS FIRST CORPORATION
By: /s/ H. M. Osteen, Jr.
---------------------------------
H. M. Osteen, Jr.
Chairman and Chief Executive Officer
By: /s/ Glenn W. Peters
---------------------------------
Glenn W. Peters
Corporate Vice President and
Chief Financial Officer
Date: April 27, 1995
------------------
19
<PAGE> 1
EXHIBIT 3.2
BYLAWS OF
BANKERS FIRST CORPORATION
ADOPTED
OCTOBER 17, 1983
AS AMENDED AND RESTATED ON APRIL 18, 1995
ARTICLE I
STOCKHOLDERS' MEETINGS
Section 1. Annual Meetings. The annual meeting of the
stockholders shall be held on the Tuesday following the third Monday in the
Month of April in each year commencing with the year 1987, or on such other
date as the Board of Directors shall determine, at such time and place as the
Board of Directors may determine, for the election of directors and the
transaction of such other business as may come before the meeting.
Section 2. Special Meetings. Special meetings of the
stockholders for any purpose may be held whenever called by the President, the
Chairman of the Board of Directors, stockholders holding an aggregate of
fifty-one percent (51%) of the voting stock of the corporation, or a majority
of the Board of Directors.
Section 3. Place of Meeting. All meetings of the
stockholders of the corporation for the election of directors, or for any other
purpose, shall be held at the place designated in the call and notice of the
meeting, whether within or without the State of Georgia.
Section 4. Notice of Meetings. Notice of each meeting of the
stockholders, whether annual or special, shall, at least ten, but not more than
sixty, days before the day set for the meeting, be given to each stockholder of
record entitled to vote, by delivering written notice thereof to him,
personally or by mailing such notice, postage prepaid, addressed to him at his
address registered on the stock transfer books of the corporation. Such notice
shall state the time and place of the meeting and, in the case of special
meetings, in general terms the purposes thereof. If mailed, such notice shall
be deemed delivered when deposited in the United States mail, addressed to the
stockholder at his address of record, with postage thereon prepaid.
<PAGE> 2
Section 5. Quorum. Except as otherwise required by statute,
at any meeting of the stockholders the holders of a majority of the stock of
the corporation having voting rights shall be present in person or represented
by proxy and shall constitute a quorum. In the absence of a quorum, the
holders of a majority of the stock represented may adjourn the meeting from
time to time, but not for a period of more than 30 days at any one time, until
a quorum shall attend. At any such adjourned meeting at which a quorum shall
be represented, any business may be transacted which might have been transacted
at the meeting originally called. No notice of an adjourned meeting need be
given.
Section 6. Voting. Except as otherwise provided by law, the
Articles of Incorporation, or these by-laws, every stockholder shall be
entitled to one vote for each share standing in his name on the records of the
corporation. Except as provided herein or in the Articles of Incorporation or
otherwise provided, all corporate action shall be determined by a vote of a
majority of the votes cast at a meeting of the stockholders entitled to vote
thereon.
Section 7. Proxy. At all meetings of stockholders, a
stockholder may vote by proxy executed in writing by the stockholder or by his
duly authorized attorney-in-fact. Such proxy shall be filed with the Secretary
of the corporation. No proxy shall be valid after eleven months from the date
of its execution, unless otherwise provided in the proxy.
Section 8. Organization. The Chairman of the Board of
Directors, if elected and present, or in his absence, a Vice Chairman, if
elected and present, or, if not, the President, or in his absence, the Vice
President, or in the absence of all of these, a Chairman selected by the
stockholders, shall preside. The Secretary shall act as Secretary at all
meetings when present, and in the absence of the Secretary, the presiding
officer shall appoint a Secretary.
Section 9. Inspectors of Election. The corporation shall, in
advance of any meeting of stockholders, appoint one or more inspectors of
election, who may be employees of the corporation, to act at the meeting or any
adjournment thereof and to make a written report thereof. The corporation may
designate one or more persons as alternate inspectors to replace any inspector
who fails to act. In the event that no inspector so appointed or designated is
able to act at a meeting of stockholders, the person presiding at the meeting
shall appoint one or more inspectors to act at the meeting. Each inspector,
before entering upon the discharge of his or her duties, shall take and sign an
oath to execute faithfully the duties of inspector with strict impartiality and
according to the best of his or her ability.
The inspector or inspectors so appointed or designated shall
(i) ascertain the number of shares of capital stock of the corporation
outstanding and the voting power of each such share, (ii) determine the shares
of capital stock of the corporation represented at the meeting and the validity
of proxies and ballots, (iii) count all votes and ballots, (iv) determine and
retain for a reasonable period a record of the disposition of any challenges
made to any determination by the inspectors, and (v) verify their determination
of the number of shares of capital stock of the corporation represented at the
meeting and such inspectors' count of all votes and ballots. Such
certification and report shall specify such other information as may be
required by law. In
2
<PAGE> 3
determining the validity and counting of proxies and ballots cast at any
meeting of stockholders of the corporation, the inspectors may consider such
information as is permitted by applicable law and any such determination by the
inspectors' shall be final and inding on all parties. No person who is a
candidate for an office at an election may serve as an inspector at such
election.
Section 10. Conduct of Meetings. The date and time of the
opening and the closing of the polls for each matter upon which the
stockholders will vote at a meeting shall be announced at the meeting by the
person presiding over the meeting. The Board of Directors of the corporation
may to the extent not prohibited by law adopt by resolution such rules and
regulations for the conduct of the meeting of stockholders as it shall deem
appropriate. Except to the extent inconsistent with such rules and regulations
as adopted by the Board of Directors, the chairman of any meeting of
stockholders shall have the right and authority to prescribe such rules,
regulations and procedures and to do all such acts as, in the judgment of such
chairman, are appropriate for the proper conduct of the meeting. Such rules,
regulations or procedures, whether adopted by the Board of Directors or
prescribed by the chairman of the meeting, may to the extent not prohibited by
law include, without limitation, the following: (i) the establishment of an
agenda or order of business for the meeting; (ii) rules and procedures for
maintaining order at the meeting and the safety of those present; (iii)
limitations on attendance at or participation in the meeting to stockholders of
record of the corporation, their duly authorized and constituted proxies or
such other persons as the chairman of the meeting shall determine; (iv)
restrictions on entry to the meeting after the time fixed for the commencement
thereof; and (v) limitations on the time allotted to questions or comments by
participants. Unless, and to the extent, determined by the Board of Directors
or the chairman of the meeting, meetings of stockholders shall not be required
to be held in accordance with the rules of parliamentary procedure.
ARTICLE II
DIRECTORS
Section 1. Number. The business and affairs of the
corporation shall be managed and controlled by a Board of Directors consisting
of not fewer than seven (7) nor more than fifteen (15) members, as shall be
fixed from time to time by the Board of Directors.
Section 2. Election and Term of Office. Except as provided
in the Articles of Incorporation, directors shall be elected at each annual
meeting of the stockholders to serve for the term of one (1) year and until
their successors shall be elected and shall qualify. A nominee receiving a
plurality of the votes cast shall be deemed elected. The stockholders, by a
vote of seventy-five percent (75%) of the votes entitled to be cast in the
election of directors, shall at any annual or special meeting be vested with
authority to remove any director elected by such stockholders, with or without
cause.
3
<PAGE> 4
Section 3. Vacancies. In case of any vacancies among the
directors by reason of an increase in the number of directors by an amendment
to these Bylaws, or through death, resignation, disqualification, removal, or
other cause, a new director or a successor director may be elected by the
members of the Board of Directors to serve until a successor director shall be
elected by the stockholders, but pending election by the stockholders, any such
new or successor director shall be fully qualified to act.
Section 4. Place of Meeting. The directors may hold their
meetings at such places, either within or without the State of Georgia as the
Board may from time to time determine.
Section 5. Annual Meetings. The Board of Directors shall
meet as soon as practicable after the annual election of directors at the place
of the annual meeting of the stockholders of the corporation for the purpose of
organization and the transaction of other business. No notice of such meeting
shall be required. Such meeting may, however, be held at some other time and
place which shall be specified in a notice given as hereinafter provided for
special meetings of the Board.
Section 6. Regular and Special Meetings. The Board of
Directors may hold regular meetings between the annual stockholders' meetings
at such times as they may determine, and may hold special meetings whenever
called by the Chairman of the Board, the President, any Vice President in the
absence of the President, the Secretary, or any two members of the Board.
Notice of regular and special meetings shall be given at least two (2) days in
advance of the meeting. Notice of any special or regular meeting of the Board
shall be given in person or by mail, telephone, or telegraph, and the purpose
need not be stated. Except as otherwise required by statute or by the notice
of the meeting, any and all business may be transacted at any regular or
special meeting of the Board.
Section 7. Quorum. A majority of the directors shall
constitute a quorum; and it shall be necessary for at least a majority of those
directors present at any meeting to agree upon any resolution or action of the
Board for it to be valid and effective.
Section 8. Compensation of Directors. The directors shall
not receive any stated salary for their services, but the Board may allow a
fixed sum and expenses of attendance, if any; but nothing herein contained
shall preclude any director from serving the corporation in any other capacity
and receiving compensation therefor.
Section 9. Chairman. At all meetings of the Board of
Directors, the Chairman of the Board, the President, or a Vice President shall
preside, in the order stated.
Section 10. Election of Officers. The Board of Directors
shall elect all officers and fix their compensation and may exercise all
powers of the corporation and do all such lawful acts and things as are not
by statute or by the Articles of Incorporation or by these Bylaws directed or
required to be exercised or done by the stockholders.
4
<PAGE> 5
Section 11. Committees. The Board of Directors may, from
time to time, appoint committees, including an Executive Committee, for any
purpose, and by majority vote of the entire Board, may delegate to any such
committee, or to any officer or officers, such powers as the Board may deem
expedient, except that no committee shall have the authority of the Board of
Directors in reference to:
(a) amending the Articles of Incorporation or the Bylaws
of the Corporation;
(b) adopting a plan of merger or consolidation;
(c) the sale, lease, exchange or other disposition of
all or substantially all of the property and assets of the
Corporation; or
(d) a voluntary dissolution of the Corporation or a
revocation thereof.
Each committee shall consist of at least two (2) directors.
Section 12. Informal Action. Any action required to be taken by
the Board of Directors or a Committee of the Board at a meeting may be taken
without a meeting if written consent, setting forth the action taken, shall be
signed by all the directors or committee members and filed with the minutes of
the proceedings of the Board or committee. Such consent shall have the same
effect as though the action had been taken at a regular meeting.
Section 13. Eligibility. In order to be eligible to be elected
to the Board of Directors, no individual, whether an insider or an outsider,
shall have reached his seventieth birthday as of the date of the Annual Meeting
of Shareholders in the year in which the election shall take place provided,
however, that any director presently serving an unexpired term shall not be
subject to this section if the individual is age sixty-five or older as of
January 1, 1985. The above notwithstanding, an inside director who retires,
resigns or for any other reason ceases his employment shall, at that time,
retire or resign from the Board.
Section 14. Honorary Director. The Board of Directors may
appoint any former member of the Board as an Honorary Director of the Company,
and any member so appointed shall hold such honorary title until the next
Annual Meeting of Shareholders after his appointment, and thereafter for such
additional periods not exceeding one year each, as the Board of Directors shall
determine. There shall be no limit to the number of persons who may be so
appointed. Only those persons who have rendered outstanding and unusually
significant and valuable service to the Company shall be so appointed. An
Honorary Director shall be entitled to attend all meetings of the Board of
Directors of the Company but shall not be entitled to vote at such meetings nor
shall he exercise any of the rights or powers of directors nor assume any of
their responsibilities under the law. Each Honorary Director shall receive
monthly an honorarium equal to one-half of the compensation payable to a member
of the Board of Directors.
5
<PAGE> 6
Section 15. Nominations of Directors. Nominations of candidates
for election as directors at any annual meeting of stockholders may be made (i)
by, or at the direction of, a majority of the Board of Directors or (ii) by any
stockholder of record entitled to vote at such annual meeting. Only persons
nominated in accordance with procedures set forth in this Section 15 shall be
eligible for election as directors at an annual meeting.
Nominations, other than those made by, or at the direction of, a
majority of the Board of Directors shall be made pursuant to timely notice in
writing to the Secretary of the corporation as set forth in this Section 15.
To be timely, a stockholder's notice shall be delivered to, or mailed and
received at, the principal executive offices of the corporation not less than
sixty (60) days nor more than ninety (90) days prior to the date of the
scheduled annual meeting, regardless of postponements, deferrals, or
adjournments of that meeting to a later date; provided, however, that if less
than seventy (70) days' notice or prior public disclosure of the date of the
scheduled annual meeting is given or made, notice by the stockholder to be
timely must be so delivered or received not later than the close of business on
the tenth (10th) day following the earlier of the day on which such notice of
the date of the scheduled annual meeting was mailed or the day on which such
public disclosure was made. Such stockholder's notice shall set forth (i) as
to each person whom the stockholder proposes to nominate for election as a
director (a) the name, age, business address and residence address of such
person, (b) the principal occupation or employment of such person, (c) the
class and number of shares of the corporation's equity securities which are
Beneficially Owned (as defined below) by such person on the date of such
stockholder notice and (d) any other information relating to such person that
would be required to be disclosed pursuant to Regulation 13D under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), in connection
with the acquisition of shares, and pursuant to Regulation 14A under the
Exchange Act, in connection with the solicitation of proxies with respect to
nominees for election as directors, regardless of whether such person is
subject to the provisions of such regulations, including, but not limited to,
information required to be disclosed by Items 4(b) and 6 of Schedule A of
Regulation 14A and information which would be required to be filed on Schedule
B of Regulation 14A with the Securities and Exchange Commission (as such Items
and Schedules are in effect on the date hereof and such additional information
required by those provisions or successor provisions adopted after the date
hereof); and (ii) as to the stockholder giving the notice (a) the name and
address, as they appear on the corporation's books, of such stockholder and any
other stockholder who is a record or Beneficial Owner of any equity securities
of the corporation and who is known by such stockholder to be supporting such
nominee(s) and (b) the class and number of shares of the corporation's equity
securities which are Beneficially Owned and owned of record by such stockholder
on the date of such stockholder notice and the number of shares of the
corporation's equity securities Beneficially Owned and owned of record by any
Person known by such stockholder to be supporting such nominee(s) on the date
of such stockholder notice. At the request of a majority of the Board of
Directors any person nominated by, or at the direction of, the Board of
Directors for election as a director at an annual meeting shall furnish to the
Secretary of the corporation that information required to be set forth in a
stockholder's notice of nomination which pertains to the nominee. Ballots
bearing the names of all the persons who have been nominated for election as
directors at an annual meeting in accordance with the procedures set forth in
this Section 15 shall be provided for use at the annual meeting.
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<PAGE> 7
A majority of the directors may reject any nomination by a
stockholder not timely made in accordance with the requirements of this Section
15. If a majority of the directors determines that the information provided in
a stockholder's notice does not satisfy the informational requirements of this
Section 15 in any material respect, the Secretary of the corporation shall
promptly notify such stockholder of the deficiency in the notice. The
stockholder shall have an opportunity to cure the deficiency by providing
additional information to the Secretary within such period of time, not to
exceed five (5) days, from the date such deficiency notice is given to the
stockholder, as a majority of the directors shall reasonably determine. If the
deficiency is not cured within such period, or if a majority of the directors
reasonably determine that the additional information provided by the
stockholder, together with the information previously provided, does not
satisfy the requirements of this Section 15 in any material respect, then a
majority of the directors may reject such stockholder's nomination. The
Secretary of the corporation shall notify a stockholder in writing whether his
nomination has been made in accordance with the time and informational
requirements of this Section 15. Notwithstanding the procedure set forth in
this Section 15, if the majority of the directors does not make a determination
as to the validity of any nominations by a stockholder, the presiding officer
of the annual meeting shall determine and declare at the annual meeting whether
a nomination was not made in accordance with the terms of this Section 15. If
the presiding officer determines that a nomination was not made in accordance
with the terms of this Section 15, he shall so declare at the annual meeting
and the defective nomination shall be disregarded.
For purposes of this Section 15 and Section 16, a person shall be
considered the "Beneficial Owner" of any security (whether or not owned of
record):
(a) with respect to which such person or any affiliate or
associate (as those terms are defined under Rule 12b-2 of the General Rules and
Regulations under the Exchange Act) if such person directly or indirectly has
or shares (i) voting power, including the power to vote or to direct the voting
of such securities and/or (ii) investment power, including the power to dispose
of or to direct the disposition of such security;
(b) which such person or any affiliate or associate of such
person has (i) the right or obligation to acquire (whether such right or
obligation is exercisable immediately or only after the passage of time)
pursuant to any agreement, arrangement or understanding (whether or not in
writing) or upon the exercise of conversion rights, exchange rights, warrants
or options, or otherwise, and/or (ii) the right to vote pursuant to any
agreement, arrangement or understanding (whether or not in writing and whether
or not such right is exercisable immediately or only after the passage of
time); or
(c) which is Beneficially Owned within the meaning of (a) or (b)
of this paragraph by any other person with which such first-mentioned person or
any of its affiliates or associates has any agreement, arrangement or
understanding (whether or not in writing), with respect to (x) acquiring,
holding, voting or disposing of such security or any security convertible into
or exchangeable or exercisable for such security, or (y) acquiring, holding or
disposing of all or substantially all of the assets or businesses of the
corporation or a subsidiary of the corporation.
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<PAGE> 8
Section 16. New Business. At an annual meeting of stockholders,
only such new business shall be conducted, and only such proposals shall be
acted upon as shall have been brought before the annual meeting (a) by, or at
the direction of, the majority of the Board of Directors or (b) by any
stockholder of the corporation who complies with the notice procedures set
forth in this Section 16. For a proposal to be properly brought before an
annual meeting by a stockholder, the stockholder must have given timely notice
thereof in writing to the Secretary of the corporation. To be timely, a
stockholder's notice must be delivered to, or mailed and received at, the
principal executive offices of the Corporation not less than sixty (60) days
nor more than ninety (90) days prior to the scheduled annual meeting,
regardless of any postponement, deferrals or adjournments of that meeting to a
later date; provided, however, that if less than seventy (70) days' notice or
prior public disclosure of the date of the scheduled annual meeting is given or
made, notice by the stockholder, to be timely, must be so delivered or received
not later than the close of business on the tenth (10th) day following the
earlier of the day on which such notice of the date of the scheduled annual
meeting was mailed or the day on which such public disclosure was made. A
stockholder's notice to the Secretary shall set forth as to each matter the
stockholder proposes to bring before the annual meeting (a) a brief description
of the proposal desired to be brought before the annual meeting and the reasons
for conducting such business at the annual meeting, (b) the name and address,
as they appear on the corporation's books, of the stockholder proposing such
business and any other stockholder who is the record or Beneficial Owner of any
equity security of the corporation known by such stockholder to be supporting
such proposal, (c) the class and number of shares of the corporation's equity
securities which are Beneficially Owned and owned of record by the stockholder
giving the notice on the date of such stockholder notice and by any other
record or Beneficial Owners of the corporation's equity securities known by
such stockholder to be supporting such proposal on the date of such stockholder
notice, and (d) any financial or other interest of the stockholder in such
proposal.
A majority of the directors may reject any stockholder proposal
not timely made in accordance with the terms of this Section 16. If a majority
of the directors determine that the information provided in a stockholder's
notice does not satisfy the informational requirements of this Section 16 in
any material respect, the Secretary of the corporation shall promptly notify
such stockholder of the deficiency in the notice. The stockholder shall have
an opportunity to cure the deficiency by providing additional information to
the Secretary within such period of time, not to exceed five (5) days from the
date such deficiency notice is given to the stockholder, as the majority of the
directors shall reasonably determine. If the deficiency is not cured within
such period, or if the majority of the directors determines that the additional
information provided by the stockholder, together with information previously
provided, does not satisfy the requirements of this Section 16 in any material
respect, then a majority of the directors may reject such stockholder's
proposal. The Secretary of the corporation shall notify a stockholder in
writing whether his proposal has been made in accordance with the time and
information requirements of this Section 16. Notwithstanding the procedures
set forth in this paragraph, if the majority of the directors does not make a
determination as to the validity of any stockholder proposal, the presiding
officer of the annual meeting shall determine and declare at the annual meeting
whether the stockholder
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<PAGE> 9
proposal was made in accordance with the terms of this Section 16. If the
presiding officer determines that a stockholder proposal was not made in
accordance with the terms of this Section 16, he shall so declare at the annual
meeting and any such proposal shall not be acted upon at the annual meeting.
ARTICLE III
OFFICERS
Section 1. Executive Officers. The executive officers of the
corporation shall be a President (who shall be a director), one or more Vice
Presidents, a Secretary and a Treasurer, who shall be elected by the Board of
Directors. The Board of Directors may, if it is deemed desirable, elect a
Chairman of the Board of Directors, one or more Vice Chairmen of the Board of
Directors, one or more assistants to the President, one or more assistant
Secretaries and one or more assistant Treasurers. Any two of said offices may
be held by a single person, provided that the office of President and the
office of Secretary shall be held by separate persons.
Section 2. Subordinate Officers. The Board of Directors or the
President may appoint other officers or agents as shall be deemed necessary for
efficiently carrying on the business of the corporation, especially including
general and local managers and cashiers, and all other officers so appointed
shall hold their offices for such term and shall exercise such powers and
perform such duties and receive such compensation as shall be determined from
time to time by the Board of Directors, or, in the absence of such action by
the Board, as shall be determined by the President.
Section 3. Tenure of Officers. The officers of the corporation
shall hold office until their successors are chosen and qualify in their stead.
Any officer elected by the directors may be removed, either with or without
cause, at any time by a majority vote of the directors; and any officer
appointed by the President may be removed, either with or without cause, at any
time by the President. If the office of any official of the corporation
becomes vacant for any reason, the vacancy shall be filled by affirmative
action of like character to that which would have been required to remove such
official.
Section 4. Chairman of the Board. Should the Board of Directors
elect a Chairman, he shall preside at all meetings of the Board and at all
meetings of the stockholders. He shall, where authorized by the Board of
Directors, be the Chief Executive Officer of the corporation and have all
powers pertaining to the office of Chief Executive.
Section 4.1. Vice Chairman of the Board. Should the Board of
Directors elect a Vice Chairman, he shall do and perform all duties as may be
required of or assigned to him by the Board of Directors or the Chairman.
9
<PAGE> 10
Section 5. President. The President shall be the Chief
Executive and Administrative Officer of the corporation and shall have active
and general management of the affairs and business of the corporation, except
as provided in Section 4 of this Article; he shall preside at all meetings of
stockholders and directors, unless there is a Chairman of the Board who is
present, and shall see that all resolutions and orders of the stockholders and
directors are carried into effect; he shall do and perform all such duties as
may from time to time be assigned to him by the stockholders, directors or
Chairman of the Board if the Chairman has been designated Chief Executive
Officer; he shall preside at each annual meeting, and, when called for by vote
of the stockholders, at any special meeting of the stockholders, a full and
clear statement of the business and condition of the corporation, including a
report of operating results for the preceding period and such recommendations
as he may think proper for best promoting the interests of the corporation; he
shall be ex-officio a member of all standing committees; he, together with the
Secretary, shall sign all certificates of capital stock and shall perform such
other duties as are incidental to his office; he shall direct the activities
and business of the corporation and shall have all of the authority and general
powers of supervision and management usually vested in the office of the
President of a corporation and also those usually exercised by a general
manager in charge of plan and operations.
Section 6. Vice President. A Vice President shall do and
perform the usual duties incidental to such office and shall do and perform the
duties of the President in the absence or disability of the President. Should
there be several Vice Presidents, in the absence of designation by the
President or by the Board of Directors, they shall act in the place of the
president in the order in which they were elected at the last election as
recorded in the minutes. A Vice President shall also perform such additional
duties, if any, as may be required of him by the Board of Directors or the
President.
Section 7. Secretary. The Secretary shall attend all sessions
of the Board of Directors and all meetings of the stockholders and record all
votes and the minutes of the stockholders upon a book to be kept for that
purpose; and shall perform like services for any committees, if any, to which
may be delegated special duties to be performed on behalf of the corporation;
he shall send copies of such minutes to absent directors and committeemen. He
shall give, or cause to be given, notice of all meetings of the stockholders
and the Board of Directors, and shall perform such other duties as may be
prescribed by the Board of Directors or the President, under whose supervision
he shall be. He shall keep in safe custody the seal of the corporation, and
when authorized by the President or by the Board, shall affix the same to any
instruments requiring it. When so affixed, it shall be attested by his
signature or by the signature of the Treasurer. He shall have custody of the
stock books of the corporation, and be authorized to sign, and affix the seal
to, certificates of the capital stock of the corporation when executed by the
President. In the absence of the Secretary, an assistant Secretary, or
Secretary pro tempore, may perform all of his duties.
Section 8. Treasurer. The Treasurer shall have the custody of
the corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation, and shall
deposit all monies and other valuable effects in the name and to the credit of
the corporation in such depositories or savings and loan associations as may be
designated by the Board of Directors. In the absence of the Treasurer, the
assistant Treasurer may perform all of his duties.
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The Treasurer shall disburse the funds of the corporation subject
to the general supervision of the President and such regulations as the Board
of Directors may impose as may be ordered by the Board of Directors, with the
approval of the President, taking proper vouchers for all such disbursements,
and shall render to the President and directors at the regular meetings of the
Board, or whenever they may require it, an account of all his transactions as
Treasurer and of the financial condition of the corporation.
Section 9. Compensation. The compensation of all officers of
the corporation shall be fixed, from time to time, by the Board of Directors.
ARTICLE IV
CAPITAL STOCK
Section 1. Stock Certificates. The certificates of stock of the
corporation shall be numbered and shall be entered on the books of the
corporation as they are issued. They shall exhibit the holders' names and
number of shares and shall be signed by the President or Vice President and the
Secretary or Assistant Secretary, and shall be under the seal of the
corporation. The signatures of such officers upon a certificate may be
facsimiles if the certificate is countersigned by a transfer agent, or
registered by a registrar, other than the corporation itself or an employee of
the corporation.
Section 2. Transfer of Stock. Transfer of stock shall be made
on the books of the corporation only by the person named in the certificate, or
by attorney lawfully constituted in writing, and upon the surrender and
cancellation of the certificate for a like number of shares. Each certificate
surrendered upon the transfer of stock shall be at once cancelled and pasted on
the margin of the stub in the book from which it was taken when issued. The
Board of Directors may make such additional rules and regulations concerning
the issuance, transfer and registration of stock as it deems expedient.
Section 3. Closing of Transfer Books. The Board of Directors
may close the transfer books in their discretion, for a period of not exceeding
twenty days preceding the day appointed for the payment of dividends.
Section 4. Registered Stockholders. The corporation shall be
entitled to treat the holder of record of any shares of stock as the holder in
fact thereof, and, accordingly, shall not be bound to recognize any equitable
or other claim to or interest in such shares on the part of any other person,
whether or not it shall have express or other notice thereof, save as may be
expressly provided by the laws of the State of Georgia.
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ARTICLE V
NOTICE AND WAIVER OF NOTICE
Section 1. Any notice required to be given under these Bylaws to
any stockholder or director may be waived. Attendance at a meeting either in
person or by proxy shall constitute waiver of notice of that meeting.
ARTICLE VI
BANK ACCOUNTS, CHECKS, SECURITIES,
AND SEALING DOCUMENTS
Section 1. Company Funds. Bank accounts for the deposit of
funds of the corporation may be opened in such banks as may be selected and
designated from time to time by the Board of Directors. Funds of the
corporation may also be invested in such savings and loan associations as may
be designated from time to time by the Board of Directors.
Section 2. Checks. Said banks and savings and loan associations
are authorized to make payments from the funds of the corporation on deposit or
invested with them, such payments to be made upon presentation of checks or
withdrawal orders signed by such official or officials as may be designated
from time to time by the Board of Directors. The use of facsimile signatures
of such officials may be authorized by the Board of Directors.
Section 3. Bonds. The officers and employees shall furnish such
bonds, if any, for the faithful performance of their duties as may be required
by the Board of Directors.
Section 4. Sealed Instruments. The President, a Vice President,
the Secretary or Assistant Secretary, and Treasurer, when two of them shall act
jointly, are empowered to use the corporate seal of the corporation whenever
required on contracts and other instruments.
ARTICLE VII
INDEMNIFICATION
Section 1. Authority to Indemnify. The corporation shall
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending, or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the corporation) by reason of the fact that he or she is or was a
director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including
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<PAGE> 13
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by the individual in connection with such action, suit or
proceeding if he or she acted in a manner he or she reasonably believed to be
in or not opposed to the best interests of the corporation, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe his or
her conduct was unlawful. The termination of any action, suit or proceeding by
judgment, order, settlement, conviction, or upon a plea of nolo contendere or
its equivalent, shall not, of itself, create a presumption that the individual
did not act in a manner which he or she reasonably believed to be in or not
opposed to the best interests of the corporation, and with respect to any
criminal action or proceeding, had reasonable cause to believe that his or her
conduct was unlawful.
Section 2. Under the circumstances prescribed in Section 3, the
corporation shall indemnify any person who was or is a party or is threatened
to be made a party to any threatened, pending or completed action or suit by or
in the right of the corporation to procure a judgment in its favor by reason of
the fact he or she is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust, or other enterprise, against expenses (including attorneys'
fees) actually and reasonably incurred by the individual in connection with the
defense or settlement of such action or suit, if he or she acted in good faith
and in a manner he or she reasonably believed to be in or not opposed to the
best interests of the corporation; except that no indemnification shall be made
in respect of any claim, issue or matter as to which such individual shall have
been adjudged to be liable to the corporation, unless and only to the extent
that the court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all the
circumstances of the case, such individual is fairly and reasonably entitled to
indemnity for such expenses which the court shall deem proper.
Section 3. Mandatory Indemnification. To the extent that a
director, officer, employee or agent of the corporation has been successful, on
the merits or otherwise, in defense of any proceeding to which he or she was a
party, or in defense of any claim, issue or matter therein, because he or she
is or was a director, officer, employee or agent of the corporation, the
corporation shall indemnify the director, officer, employee or agent against
reasonable expenses incurred by him or her in connection therewith.
Section 4. Determination of Indemnification. Except as provided
in Section 3 and except as may be ordered by the Court, the corporation may not
indemnify a director, officer, employee or agent under Section 1 unless
authorized thereunder and a determination has been made in the specific case
that indemnification of the director, officer, employee or agent is permissible
in the circumstances because he or she has met the standard of conduct set
forth in Section 1. The determination shall be made:
(a) by the Board of Directors by majority vote of a
quorum consisting of directors not at the time parties to the proceedings;
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(b) if a quorum cannot be obtained under Paragraph (a)
of this Section, by majority vote of a committee duly designated by the Board
of Directors (in which designation directors who are parties may participate),
consisting solely of two or more directors not at the time parties to the
proceeding;
(c) by special legal counsel
(i) selected by the Board of Directors or its
committee in the manner prescribed in Paragraph (a) or (b) of this Section; or
(ii) if a quorum of the Board of Directors
cannot be obtained under Paragraph (a) of this Section and a committee cannot
be designated under Paragraph (b) of this Section, selected by majority vote of
the full Board of Directors (in which selection directors who are parties may
participate); or
(d) by the shareholders, but shares owned by or voted
under the control of directors, who are at the time parties to the proceeding,
may not be voted on the determination.
Section 5. Expenses. The corporation shall pay for or
reimburse the reasonable expenses incurred by a director, officer, employee or
agent of the corporation who is a party to a proceeding in advance of final
disposition of the proceeding if a) he or she furnishes the corporation written
affirmation of his or her good faith belief that he or she has met the standard
of conduct set forth in Section 1 of this Article, and b) he or she furnishes
the corporation a written undertaking, executed personally or own his or her
behalf, to repay any advances if it is ultimately determined that he or she is
not entitled to indemnification. The undertaking required by this Section must
be an unlimited general obligation that need not be secured and may be accepted
without reference to financial ability to make repayment.
Section 6. Court Ordered Indemnification and Advances for
Expenses. A director, officer, employee or agent of the corporation who is a
party to a proceeding may apply for indemnification or advances or expenses to
the court conducting the proceeding or to another court of competent
jurisdiction.
Section 7. Authorization of Indemnification. Authorization of
indemnification an obligation to indemnify and evaluation as to the
reasonableness of expenses shall be made in the same manner as the
determination that indemnification is permissible, except that if the
determination is made by special legal counsel, authorization of
indemnification and evaluation as to reasonableness of expenses shall be made
by those entitled under Paragraph (c) of Section 4 to select counsel.
Section 8. Other Rights. The indemnification and advancement of
expenses provided by or granted pursuant to this Article shall not be deemed
exclusive of any other rights, in respect of indemnification of or otherwise,
to which those seeking indemnification or advancement of expenses may be
entitled under any bylaw, resolution or agreement, either
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<PAGE> 15
specifically or in general terms, approved by the affirmative vote of the
holders of a majority of the shares entitled to vote thereon taken at a meeting
the notice of which specified that such bylaw, resolution or agreement would be
placed before the shareholders, both as to action by a director, officer,
employee or agent in his official capacity and as to action in another capacity
while holding such office or position; except that no such other rights in
respect to indemnification or otherwise, may be provided or granted to a
director, trustee, officer, employee or agent pursuant to this Section 8 by the
corporation for liability for a) any appropriation, in violation of his or her
duties, of any business opportunity of the corporation; b) acts or omissions
not in good faith or which involve intentional misconduct or a knowing
violation of loss; c) the types of liabilities set forth in Section 14-2-832 of
the Georgia Business Corporation Code dealing with illegal or unauthorized
distributions of corporate assets, whether its dividends or in liquidation of
the corporation otherwise; or d) any transaction from which the director
derived an improper material tangible personal benefit.
Section 9. Insurance. The corporation may purchase and maintain
insurance on behalf of any person who is or was a director, officer, employee
or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out
of his status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this Article.
Section 10. For purposes of this Article, reference to "the
corporation" shall include, in addition to the surviving or new corporation,
any merging or consolidated corporation (including any merging or consolidating
corporation of a merging or consolidating corporation) absorbed in a merger or
consolidation so that any person who is or was a director, officer, employee or
agent of such merging or consolidating corporation, or who is or was serving at
the request of such merging or consolidating corporation as a director,
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, shall stand in the same position under the provision
of this Article with respect to the resulting or surviving corporation as he or
she would if he or she had served the resulting or surviving corporation in the
same capacity; provided no indemnification under Sections 1 and 2 of this
Article permitted by this subsection shall be mandatory under this subsection
or any bylaw of the surviving or new corporation without the approval of such
indemnification by the board of directors or shareholders of the surviving or
new corporation in the manner provided in Sections (a) and (d) of subsection 4
of this Article.
Section 11. Savings Clause and Subsequent Legislation. If this
Article VII or any portion hereof shall be invalidated on any ground by any
court of competent jurisdiction, then the corporation shall nevertheless
indemnify each person referred to in Sections 1 and 2 of this Article as to any
cost, charge and expense (including attorneys' fees and related disbursements),
judgment, fine (including, without limitation, ERISA excise taxes and
penalties) and amount paid in settlement with respect to any action, suit or
proceeding, whether civil, criminal, administrative or investigative, including
an action by or in the right of the corporation, to the full extent permitted
by any applicable portion of this Article VII that
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shall not have been invalidated and to the full extent permitted by applicable
law. The corporation shall indemnify the persons referred to in Sections 1 and
2 of this Article to the fullest extent permitted by the Georgia Business
Corporation Code, as amended from time to time.
ARTICLE VIII
AMENDMENTS OF BYLAWS
Section 1. Directors. These Bylaws may be altered, amended or
repealed by the affirmative vote of a majority of all the directors then
holding office at any regular meeting or at any special meeting of the Board,
if notice of the proposed alteration, amendment or repeal be contained in the
notice of the meeting. However, any bylaws adopted by the Board of Directors
may be altered, amended or repealed, and new bylaws may be adopted by the
stockholders.
Section 2. Stockholders. The stockholders, by the affirmative
vote of the holders of seventy-five percent (75%) of the votes entitled to be
cast in the election of directors, may alter, amend or repeal these Bylaws and
adopt new bylaws at any regular meeting or at any special meeting of the
stockholders, if notice of the proposed alteration, amendment or repeal be
contained in the notice of the meeting. The stockholders may prescribe that
any bylaw or bylaws adopted by them shall not be altered, amended or repealed
by the Board of Directors.
ARTICLE IX
All of the requirements of the Georgia Business Corporation Code
(the "GBCC") pertaining to business combinations with interested shareholders,
including Sections 14-2-1110 through 14-2-1113 of the GBCC, shall be applicable
to the corporation.
16
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF BANKERS FIRST CORPORATION FOR THE THREE MONTHS ENDED
MARCH 31, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 23,566
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0
0
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</TABLE>
