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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-KSB/A
AMENDMENT NO. 1
(Mark One)
[ X ] Annual report under Section 13 or 15(d) of the Securities Exchange Act
of 1934 (Fee required)
For the fiscal year ended December 31, 1995
[ ] Transition report under Section 13 or 15 (d) of the Securities Exchange
Act of 1934 (No fee required)
For the transition period from __________ to __________.
COMMISSION FILE NUMBER 0-13668
CORPUS CHRISTI BANCSHARES, INC.
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(Name of Small Business Issuer in Its Charter)
Texas 74-2351663
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2402 Leopard Street
Corpus Christi, Texas 78408
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(Address of Principal (Zip Code)
Executive Offices)
Issuer's Telephone Number, Including Area Code: (512) 887-3000
Securities registered under Section 12(b) of the Exchange Act: X
-
Name of Each Exchange
Title of Each Class on Which Registered
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COMMON STOCK, $5 PAR VALUE AMERICAN
Securities registered under Section 12(g) of the Exchange Act: None
Check whether the issuer: (1) filed all reports required to be filed
by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes
[ X ] No [ ]
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Check if there is no disclosure of delinquent filers in response to
Item 405 of Regulation S-B is not contained in this form, and no disclosure
will be contained, to the best of the registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-KSB/A or any amendment to this Form 10-KSB/A. [ ]
The Company had total revenue for fiscal year ended 1995 of $16,244,555.
The number of shares of Common Stock of the registrant outstanding as
of December 12, 1996, was 1,600,200.
Transitional Small Business Disclosure Format (check one): Yes No X
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT TO APPLICATION OR REPORT
FILED PURSUANT TO SECTION 12, 13, OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
CORPUS CHRISTI BANCSHARES, INC.
FORM 10-KSB/A
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items,
financial statements, exhibits or other portions of its Annual Report on Form
10-KSB for the fiscal year ended December 31, 1995 as set forth in the pages
attached hereto:
Item 13. Exhibits, Lists and Reports on Form 8-K
(a) Exhibits: See Index to Exhibits, Page 5.
The following paragraph should be added to the section entitled
"Provision for Loan Losses" as the last paragraphs on page 10 of Exhibit 13 to
the report on Form 10-KSB for Corpus Christi Bancshares, Inc. for the fiscal
year ended December 31, 1995:
"The Company adopted the provisions of Statement of Financial
Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for
Impairment of a Loan," as amended by SFAS No. 118, "Accounting by
Creditors for Impairment of a Loan -- Income Recognition and
Disclosure," on January 1, 1995. Management considers installment loans
to be a large group of smaller-balance homogenous loans that are
evaluated collectively for impairment, and are thereby excluded from
this statement. To determine when a loan is impaired, management
considers current information and events regarding the borrowers'
ability to repay their obligations, such as whether the loan is on
nonaccrual status, the adequacy of the underlying collateral, prior
payment patterns, the assigned risk rating, and whether a repayment
program has been established. Loans with risk ratings of "doubtful" or
"loss" are considered impaired. Management considers a loan to be
impaired when it is probable that the Company will be unable to collect
all amounts due according to the contractual terms of the loan
agreement. A delay or shortfall in the amount of payment is considered
insignificant by management if the Company expects to collect all
amounts due including interest accrued at the contractual interest rate
for the period of delay. Such a delay in payment would not, by itself,
cause the loan to be impaired.
When a loan is considered to be impaired, the amount of the impairment
is measured based on the present value of expected future cash flows
discounted at the loan's effective interest rate, or the fair value of
the collateral if the loan is collateral dependent. At December 31,
1995, impaired loans measured based on the present value of expected
future cash flows discounted at the loan's effective interest rate
totaled $634 thousand, and impaired loans measured based on the fair
value of the collateral totaled $1.4 million. Impairment losses are
charged against the allowance for loan losses. An impaired loan may
still be accruing interest if, for example, the payments are not 90
days past due yet there is a collateral shortfall. On the other hand,
not all nonaccrual loans are considered impaired because management may
expect to collect all amounts due according to the contractual terms of
the loan agreement including interest accrued at the contractual
interest rate for the period of delay. Cash receipts on nonaccrual
impaired loans are applied to reduce the principal amount of such
loans until the principal has been recovered and are recognized as
interest income thereafter. Prior periods have not been restated
for the adoption of these statements. The effect of adopting SFAS 114
and 118 does not have a significant impact on the Company's results of
operations or credit risk classifications presented herein and
therefore does not have a significant effect on the comparability of
such amounts."
The first paragraph on page 11 of Exhibit 13 to the report on Form
10-KSB for Corpus Christi Bancshares, Inc. for the fiscal year ended December
31, 1995, is replaced in its entirety with the following paragraph:
"Net recoveries in 1995 were $894 thousand (or .89% of average loans),
compared to net recoveries of $497 thousand (or .59% of average loans)
in 1994 and net recoveries of $68 thousand (or .10% of average loans)
in 1993. The
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following is a summary of transactions in the allowance for loan losses
account for the past five years:"
The first paragraph on page 13 of Exhibit 13 to the report on Form
10-KSB for Corpus Christi Bancshares, Inc. for the fiscal year ended December
31, 1995, which beings "[n]on accrual loans at," is replaced in its entirety
with the following paragraph:
"Nonaccrual loans at year-end 1995 were $1.2 million, up $873 thousand,
compared to $313 thousand at year-end 1994. Nonaccrual loans at
year-end 1993 were $799 thousand. The increase in nonaccrual loans
during 1995 was primarily the results of two loan relationships
collateralized with real estate. Accrual of interest is discontinued on
a loan when management believes, after considering economic and
business conditions and collection efforts, that the borrower's
financial condition is such that the collection of interest is doubtful
whether or not the loan is 90 days or more past due. All loans 90 days
or more past due are classified as nonaccrual unless the loan is
considered to be well-secured and in the process of collection. At that
time, any uncollected interest receivable that was accrued during the
current period is reversed and any uncollected interest accrued in
prior periods is charged off. Interest income that would have been
recorded during 1995 on these loans had such loans performed in
accordance with their original term was $80 thousand, compared to $35
thousand and $48 thousand in 1994 and 1993, respectively."
The last paragraph on page 20 of Exhibit 13 to the report on Form
10-KSB for Corpus Christi Bancshares, Inc. for the fiscal year ended December
31, 1995, is replaced in its entirety with the following paragraph:
"Other sources of funding for the Company include federal funds
purchased and short-term borrowings. The Company had average short-term
borrowings in 1995 of $3.4 million with an average interest rate of
4.9%. The maximum outstanding at the end of any month during 1995 was
$7.2 million. During 1994 and 1993, the Company had average short-term
borrowings of $10 thousand and $1 thousand with an average interest
rate of 4.4% and 6.6%. The Company had no short-term borrowings
outstanding at the end of any month during 1994 and 1993."
The first paragraph under the section entitled "Other Matters" on page
25 of Exhibit 13 to the report on Form 10-KSB for Corpus Christi Bancshares,
Inc. for the fiscal year ended December 31, 1995, is deleted in its entirety.
The fourth paragraph in the section entitled "Loans and Allowance for
Loan Losses" on page 34 of Exhibit 13 to the report on Form 10-KSB for Corpus
Christi Bancshares, Inc. for the fiscal year ended December 31, 1995, is
replaced in its entirety with the following paragraph:
"Accrual of interest is discontinued on a loan when management
believes, after considering economic and business conditions and
collection efforts, that the borrower's financial condition is such
that the collection of interest is doubtful
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whether or not the loan is 90 days or more past due. All loans 90
days or more past due are classified as nonaccrual unless the loan is
well-secured and in the process of collection. At that time, any
uncollected interest receivable that was accrued during the current
period is reversed and any uncollected interest accrued in prior
periods is charged off. Interest income on nonaccrual loans is
recognized on the cash basis."
The fifth paragraph in the section entitled "Loans and Allowance for
Loan Losses" on page 34 of Exhibit 13 to the report on Form 10-KSB for Corpus
Christi Bancshares, Inc. for the fiscal year ended December 31, 1995, is
replaced in its entirety with the following paragraph:
"The Company adopted the provisions of SFAS No. 114, "Accounting by
Creditors for Impairment of a Loan," as amended by SFAS No. 118,
"Accounting by Creditors for Impairment of a Loan -- Income
Recognition and Disclosure," on January 1, 1995. Management,
considering current information and events regarding the borrowers'
ability to repay their obligations, considers a loan to be impaired
when it is probable that the Company will be unable to collect all
amounts due according to the contractual terms of the loan agreement.
Large groups of smaller-balance homogenous loans that are evaluated
collectively for impairment are excluded from this statement. When a
loan is considered to be impaired, the amount of the impairment is
measured based on the present value of expected future cash flows
discounted at the loan's effective interest rate. Impairment losses
are charged against the allowance for loan losses. Cash receipts on
nonaccrual impaired loans are applied to reduce the principal amount
of such loans until the principal has been recovered and are
recognized as interest income thereafter. Prior periods have not been
restated."
The Interest Rate Sensitivity analysis on page 24 of Exhibit 13 to the
report on Form 10-KSB for Corpus Christi Bancshares, Inc. for the fiscal year
ended December 31, 1995, is replaced in its entirety with Exhibit 13 attached
hereto.
(b) Reports on Form 8-K.
On November 15, 1995, the Company filed a report on Form 8-K in
connection with the acquisition of The First National Bank of Taft, Texas on
October 31, 1995.
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Item 13. Exhibits, Lists and Reports on Form 8-K
(a) Exhibits: See Index to Exhibits, Page 5.
The Interest Rate Sensitivity analysis on page 24 of Exhibit 13 to the
report on Form 10-KSB for Corpus Christi Banchares, Inc. for the fiscal year
ended December 31, 1995, is replaced in its entirety with Exhibit 13 attached
hereto.
(b) Reports on Form 8-K.
On November 15, 1995, the Company filed a report on Form 8-K in
connection with the acquisition of The First National Bank of Taft, Texas on
October 31, 1995.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Corpus Christi Bancshares, Inc. has duly caused this
Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CORPUS CHRISTI BANCSHARES, INC.
(Registrant)
By:
/s/ John T. Wright, III
----------------------------------------
John T. Wright, III,
Chairman of the Board
Date: December 19, 1996
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CORPUS CHRISTI BANCSHARES, INC.
INDEX TO EXHIBITS
3.1 *Articles of Incorporation of the Company, as amended (incorporated
herein by reference to Exhibit 3.1 of the Company's Form 10-KSB for
the fiscal year ended December 31, 1995. Filed with the Securities
and Exchange Commission on March 20, 1996.)
3.2 *Bylaws of the Company, as amended (incorporated herein by reference
to Exhibit 3.2 of the Company's Form 10-KSB for the fiscal year
ended December 31, 1994. Filed with the Securities and Exchange
Commission on March 30, 1995.)
4.1 *Form of Certificate for Company's Common Stock, $5.00 par value
(incorporated herein by reference to Exhibit 4.a of the Company's
Form 10-K for the fiscal year ended December 31, 1993. Filed with
the Securities and Exchange Commission on March 24, 1994.)
10.1 *Lease Agreement dated July 24, 1985, between Medical Plaza Associates
and Citizens State Bank of Corpus Christi (incorporated herein by
reference to Exhibit 10 of the Company's Form 10-K for the fiscal
year ended December 31, 1993. Filed with the Securities and Exchange
Commission on March 24, 1994.)
10.2 *Lease Agreement dated December 1, 1992 between Vestland Partnership
and Citizens State Bank of Corpus Christi (incorporated herein by
reference to Exhibit 10 to the Company's Form 10-K for the fiscal
year ended December 31, 1992. Filed with the Securities and Exchange
Commission on March 29, 1993.)
10.3 *Lease Agreement dated June 24, 1994, between Jerry J. Moore
Investments and Citizens State Bank of Corpus Christi (incorporated
herein by reference to Exhibit 10.3 to the Company's Form 10-KSB for
the fiscal year ended December 31, 1994. Filed with the Securities
and Exchange Commission on March 30, 1995.)
10.4 *Corpus Christi Bancshares, Inc. Nonqualified Stock Option Plan and
Stock Option Agreement under the Corpus Christi Bancshares, Inc.
Nonqualified Stock Option Plan (incorporated herein by reference to
Exhibit 10 to the Company's Amended Form 10-K for the fiscal year
ended December 31, 1993. Filed with the Securities and
Exchange Commission on April 25, 1994.)
10.5 *Form of Severance Agreement between Citizens State Bank of Corpus
Christi and certain executive officers (incorporated herein by
reference to Exhibit 10.5 of the Company's Form 10-KSB for the fiscal
year ended December 31, 1995. Filed with the Securities and Exchange
Commission on March 20, 1996.)
13. *Company's 1995 Annual Report to Shareholders (Page 24 of Exhibit
13, as amended is attached hereto. Except as amended hereby, the
remainder of Exhibit 13 is incorporated herein by reference to
Exhibit 13 of the Company's Form 10-KSB for the fiscal year ended
December 31, 1995. Filed with the Securities and Exchange Commission
on March 20, 1996.)
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21. *Subsidiaries of the Company (incorporated herein by reference to
Exhibit 21 of the Company's Form 10-KSB for the fiscal year ended
December 31, 1995. Filed with the Securities and Exchange Commission
on March 20, 1996.)
27. *Financial Data Schedule (incorporated herein by reference to Exhibit
27 of the Company's Form 10-KSB for the fiscal year ended December 31,
1995. Filed with the Securities and Exchange Commission on March 20,
1996.)
* Previously filed. Deemed filed only with respect to those portions
thereof expressly incorporated herein by reference.
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EXHIBIT 13
ASSET AND LIABILITY MANAGEMENT
Net interest income can be vulnerable to wide fluctuations arising from changes
in the general level of market interest rates because the average yield on
assets responds differently to such changes than does the average cost of
funds. In an effort to minimize the effects of changes in the general level of
market interest rates, the Company actively manages the repricing
characteristics of its assets and liabilities to control net interest rate
sensitivity.
INTEREST RATE SENSITIVITY
(In Thousands)
December 31, 1995
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<TABLE>
<CAPTION>
Non-Rate
Cumulative Volumes Subject to Repricing Within Sensitivity
---------------------------------------------------------- Over
30 Days 90 Days 180 Days 1 Year 5 Years 5 Years Total
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<S> <C> <C> <C> <C> <C> <C> <C>
INTEREST EARNING ASSETS:
Loans(1) $ 17,299 $24,104 $ 32,051 $43,780 $96,600 $ 7,934 $104,534
Securities available for
sale 4,607 9,523 15,847 28,989 76,812 4,457 81,269
Securities held to
maturity 30 30 131 802 4,537 1,326 5,863
Federal funds sold 6,000 6,000 6,000 6,000 6,000 --- 6,000
Interest bearing deposits
with Federal Home Loan
Bank 115 115 115 115 115 --- 115
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Total earning assets 28,051 39,772 54,144 79,686 184,064 13,717 197,781
INTEREST BEARING LIABILITIES:
Interest bearing
transaction
accounts:
NOW accounts 29,269 29,269 29,269 29,269 29,269 --- 29,269
Money Market accounts 43,226 43,226 43,226 43,226 43,226 --- 43,226
Savings accounts 15,600 15,600 15,600 15,600 15,600 --- 15,600
Certificates of Deposit 5,158 14,059 25,925 39,171 54,007 6 54,013
Securities sold with
agreements
to repurchase 5,459 5,459 5,459 5,459 5,469 --- 5,459
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Total earning
liabilities 98,712 107,613 119,479 132,725 147,561 6 147,567
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Interest sensitivity gap $(70,661) (67,841) $(65,335) (53,039) $36,503 $ 13,711 $ 50,214
====================================================================================
CUMULATIVE INTEREST
SENSITIVITY RATIOS:
December 31, 1995 .28X .37X .45X .60X 1.25X
</TABLE>
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(1) Loans are included net of unearned discount of $4.444 million.
At December 31, 1995, the Company had a negative gap position in the one month
period of $70.661 million. The negative gap decreases at 90 days, 180 days,
and one year, and turns
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positive at five years. If NOW and savings accounts were excluded, the
negative gap would be reduced to $25.792 million in the 30 day window.
The preceding static gap report reflects a cumulative liability sensitive
position through five years. A negative gap alone would suggest that earnings
would benefit from falling interest rates, while rising interest rates would
tend to hamper earnings. An inherent weakness of this report is that it
ignores the relative volatility of the various instruments on the balance
sheet, especially the limited volatility of interest bearing transaction and
savings accounts.
The Company's Asset Liability Committee reviews monthly the Company's rate
sensitive position. It looks at adjusted static gap numbers which eliminate
the relatively stable NOW and savings accounts, and a target range for the
adjusted one-year gap is set at .70X to 1.20X. The above figures indicate that
the one-year adjusted gap is well within the target range at .91X. More
importantly, the Asset Liability Committee concentrates on earnings simulations
produced under varied interest rate scenarios including sharply rising and
declining interest rates. In these simulations the pricing of each asset and
liability category is considered at each point in the interest rate scenario
and balance sheet growth assumptions are also included.
To measure the earnings exposure to an extreme upward or downward change in
interest rates, the Asset Liability Committee looks at the variance of net
interest income under adverse interest rate conditions. Such a variance shows
the potential change from the expected position if an unexpected move to
significantly higher or lower interest rates occurs. At December 31, 1995, all
projected variances were within the targeted 15 percent tolerance ranges set by
the Asset Liability Committee.
