<PAGE>
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 Quarter Ended............................................. June 30, 1995
Commission file number............................................ 0-13653
THE PEOPLES BANCTRUST COMPANY, INC.
(Exact name of registrant as specified in its charter)
Alabama....................................................... 63-0896239
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
310 Broad Street (Address of principal executive offices)
Selma, Alabama
36701
(334) 875-1000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or such shorter time 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
------- ------
As of the close of business on June 30, 1995, 1,743,838 shares of
registrant's Common Stock, par value $.10 per share, were outstanding.
<PAGE>
THE PEOPLES BANCTRUST COMPANY, INC. AND SUBSIDIARY
Notes to Consolidated Financial Statements (Unaudited)
Accounting Policies:
1. The accompanying unaudited consolidated financial statements of The Peoples
BancTrust Company, Inc. (the "Company") and its subsidiary, The Peoples Bank
and Trust Company, have been prepared in accordance with generally accepted
accounting principles for interim information and with the instructions to
Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include
all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals)
considered necessary for a fair presentation have been included. All 1995
interim amounts are subject to year-end audit, and the results of operations
for the interim periods herein are not necessarily indicative of the results
that may be expected for the year ended December 31, 1995. For further
information refer to the consolidated financial statements and footnotes
thereto included in the Company's Annual Report on Form 10-K for the year
ended December 31, 1994.
1
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
THE PEOPLES BANCTRUST COMPANY, INC., SELMA, ALABAMA
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
-------------- ----------
(Unaudited)
ASSETS: (In thousands)
<S> <C> <C>
Cash and due from banks....................... $ 15,889 $ 20,048
Federal funds sold and securities
purchased under agreements to resell........ 1,692 3,134
-------- --------
Total cash and cash equivalents............. 17,581 23,182
Investment securities (market value of
$26,886 and $26,143 respectively)........... 27,080 27,187
Securities available for sale................. 67,126 75,808
Loans, net of unearned income................. 177,198 162,979
Allowance for loan losses..................... (1,914) (2,040)
-------- --------
Net loans..................................... 175,284 160,939
Premises and equipment........................ 5,792 5,718
Other assets.................................. 7,551 8,852
-------- --------
Total assets................................ $300,414 $301,686
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Noninterest-bearing deposits.................. $ 40,534 $ 47,734
Interest-bearing deposits..................... 223,902 215,887
-------- --------
Total deposits.............................. 264,436 263,621
Federal funds purchased and securities
sold under agreement to repurchase.......... 1,471 6,855
Other borrowed funds.......................... 407 438
Other liabilities............................. 3,458 3,142
-------- --------
Total liabilities.......................... 269,772 274,056
Common stock.................................. 178 178 *
Additional paid-in capital.................... 7,060 7,060 *
Treasury stock................................ (480) (480)
Retained earnings............................. 24,542 23,500
Net unrealized loss on securities available
for sale.................................... (658) (2,628)
-------- --------
Total stockholders' equity.................. 30,642 27,630
-------- --------
Total liabilities and stockholders' equity.. $300,414 $301,686
======== ========
</TABLE>
* Restated to give retroactive recognition to a two-for-one stock split
effected in the form of a one hundred percent stock dividend declared January
28, 1995.
See Notes to the Unaudited Consolidated Financial Statements.
2
<PAGE>
THE PEOPLES BANCTRUST COMPANY, INC., SELMA, ALABAMA
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- ----------------------
1995 1994 1995 1994
---------- ----------- ---------- ----------
(In thousands, except share and per share data)
<S> <C> <C> <C> <C>
Interest and fees on loans...... $ 4,442 $ 3,146 $ 8,478 $ 6,149
Interest and dividends on
investment securities......... 1,441 1,597 2,865 2,959
Other interest income........... 278 15 123 94
---------- ----------- ---------- ----------
Total interest income......... 6,161 4,758 11,466 9,202
Interest on deposits............ 2,707 1,877 5,230 3,653
Interest on short-term borrowed
funds.......................... 31 32 85 53
---------- ----------- ---------- ----------
Total interest expense........ 2,738 1,909 5,315 3,706
---------- ----------- ---------- ----------
Net interest income............. 3,423 2,849 6,151 5,496
Provision for loan losses....... 214 87 307 172
---------- ----------- ---------- ----------
Net interest income after
provision for loan losses... 3,209 2,762 5,844 5,324
Net securities gains............ 22 3 22 76
Other income.................... 698 771 1,629 1,489
Other expense................... 2,776 2,693 5,494 5,314
---------- ----------- ---------- ----------
Income before income taxes.... 1,153 843 2,001 1,575
Provision for income taxes...... 344 233 539 470
---------- ----------- ---------- ----------
Net income...................... $ 809 $ 610 $ 1,462 $ 1,105
========== =========== ========== ==========
Weighted average number of
shares
outstanding................... 1,743,838 1,743,838* 1,743,838 1,743,838*
========== ========== ========== =========
Net income per share............ $ 0.46 $ 0.35* $ 0.84 $ 0.63*
========== ========= ========== =========
Dividends per share............. $ 0.12 $ 0.12* $ 0.24 $ 0.24*
========== ========== ========== =========
</TABLE>
* Restated to give retroactive recognition to a two-for-one stock split
effected in the form of a one hundred percent stock dividend declared January
28,1995.
See Notes to the Unaudited Condensed Consolidated Financial Statements.
3
<PAGE>
THE PEOPLES BANCTRUST COMPANY, INC., SELMA, ALABAMA
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
----------------------------
1995 1994
----------- ---------------
(In thousands)
<S> <C> <C>
Net cash provided by operating activities......... $ 3,946 $ 879
Cash flows from investing activities:
Proceeds from sales of investment securities.... 130 960
Proceeds from maturities and calls of investment
securities.................................... 3,000 6,659
Proceeds from sales of securities available for
sale........................................... 3,733 11,953
Proceeds from maturities and calls of securities
available for sale............................ 7,519 6,831
Purchases of investment securities.............. (2,999) (19,672)
Purchases of securities available for sale...... (818) (17,740)
Net increase in loans........................... (14,804) (8,048)
Purchases of bank premises and equipment........ (288) (662)
Proceeds from sale of other real estate......... 108
Payment for purchase of bank deposits........... (518)
-------- --------
Net cash used in investing activities......... (4,527) (20,129)
Cash flows from financing activities:
Net increase in deposits........................ 815 7,316
Net decrease in borrowed funds.................. (5,415) 2,291
Dividends paid.................................. (420) (419)
Net cash provided by (used in) financing
activities................................... (5,020) 9,188
-------- --------
Net decrease in cash and cash equivalents......... (5,601) (10,062)
Cash and cash equivalents at beginning of period.. 23,182 24,696
-------- --------
Cash and cash equivalents at end of period........ $ 17,581 $ 14,634
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest...................................... $ 5,067 $ 3,673
Taxes......................................... 225 780
</TABLE>
See Notes to the Unaudited Consolidated Financial Statements.
4
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
GENERAL
On January 28, 1995, the Board of Directors of The Peoples BancTrust Company,
Inc. (the "Company") declared a two-for-one stock split of its Common Stock
which was effected in the form of a 100% stock dividend to all stockholders of
record as of February 25, 1995. The split was distributed on March 15, 1995.
All share and per share amounts have been adjusted to reflect this split.
On July 27, 1995, the Company purchased 30,044 shares of its issued and
outstanding Common Stock at a price of $16.50 per share. The Common Stock will
be held as treasury stock.
FINANCIAL CONDITION
Total consolidated assets of the Company and its subsidiary, The Peoples Bank
and Trust Company ("the Bank"), totaled $300,414,000 at June 30, 1995, a
decrease of $1,272,000 from the December 31, 1994 total of $301,686,000.
Earning assets increased, however, during the first half of 1995 from
$269,108,000 at December 31, 1994 to $273,096,000 at June 30, 1995.
Investments
The Company's total securities portfolio decreased during the first half of
1995 from $102,995,000 at December 31, 1994 to $94,206,000. The total
securities portfolio at June 30, 1995 included securities with an aggregate
market value of $67,126,000 classified by management as "available for sale."
At December 31, 1994, securities available for sale totaled $75,808,000. The
write-down of securities available for sale to market value as required by SFAS
115 decreased from $3,699,000 at December 31, 1994 to $997,570 at June 30, 1995.
Securities classified as "held to maturity" totaled $27,080,000 at June 30,
1995, compared to $27,187,000 at December 31, 1994.
During the first half of 1995, the Company had purchases of securities
totaling $3,817,000 and sales totaling $3,863,000. The decrease in the total
securities portfolio since December 31, 1994 was due primarily to maturing
investments totaling $10,519,000. Proceeds from these maturing investments were
used primarily to fund growth in the loan portfolio.
Loans
Loans, net of unearned interest, increased $14,219,000 since December 31,
1994 to $177,198,000 at June 30, 1995. The greater loan demand was funded
primarily by the decrease in the investment securities portfolio.
Business loans reflected the largest growth during the first half of the
year, increasing $6,554,000, from $48,777,000 at December 31, 1994 to
$55,331,000 at June 30, 1995. The growth in the volume of business loans was
due primarily to an increase in loan demand from the timber industry and the
closing of a Montgomery, Alabama bank which enabled the Bank to extend its
lending area.
Personal loans increased $4,799,000, from $59,751,000 at December 31, 1994 to
$64,550,000 at June 30, 1995. The growth in the volume of personal loans was
due primarily to an increase in automobile financing. Automobile loans
increased $2,745,000 during the first half of 1995 and accounted for 57.0% of
the growth in personal loans.
5
<PAGE>
Real estate loans increased $2,879,000 since year end 1994 to $55,597,000 at
June 30, 1995. Since December 31, 1994, real estate construction loans
increased $617,000 to $3,073,000 at June 30, 1995, while residential loans
increased $1,982,000 to $28,536,000 at June 30, 1995. Credit line loans,
primarily home equity lines of credit, grew $190,000, from $1,137,000 at
December 31, 1994 to $1,327,000 at June 30, 1995.
Overdrafts on demand deposit accounts decreased $203,000 since December 31,
1994 to $393,000 at June 30, 1995.
Allowance for Loan Losses
In making loans, the Company recognizes the fact that credit losses will be
experienced and that the risk of loss will vary with, among other things, the
type of loan being made, the credit-worthiness of the borrower over the term of
the loan, and, in case of a secured loan, the quality of the security for the
loan. The allowance for loan losses is maintained at a level believed adequate
by management to absorb potential losses in the Company's loan portfolio.
Management's determination of the adequacy of the allowance is based, among
other things, on estimates of the historical loan loss experience, evaluation of
economic conditions in general and in various sectors of the Company's customer
base, and periodic reviews of loan portfolio quality by the Company's personnel,
and other relevant factors. General reserves will be provided for loans where
the ultimate collection is considered questionable by management after reviewing
the current status of loans which are contractually past due, structurally
deficient or economically depreciating, and considering the net realizable value
of the security of the loan or guarantees, if applicable. Management continues
to monitor the Company's asset quality and will charge off loans against the
allowance for loan losses when appropriate or provide specific loss reserves
when necessary. Although management believes it uses the best information
available to make determinations with respect to the allowance for loan losses,
future adjustments may be necessary if economic conditions differ substantially
from the economic conditions in the assumptions used to make the initial
determinations. In addition, there can be no assurance that regulators, in
reviewing the Company's loan portfolio, will not request the Company to increase
significantly its allowance for loan losses, thereby negatively impacting the
Company's financial condition and earnings.
The allowance for loan losses at June 30, 1995 was $1,914,000, compared to
$2,040,000 at December 31, 1994. The ratio of allowance to total loans at June
30, 1995 was 1.08% and was 1.25% at December 31, 1994. At its current level,
the allowance for loan losses exceeds the minimum required by regulatory
authorities. The amount of loans determined by management that require special
attention due to potential weaknesses decreased from $6,500,000 at December 31,
1994 to $5,849,000 at June 30, 1995. Non-accruing loans, however, increased
$1,626,000 from $1,348,000 at December 31, 1994 to $2,974,000 at June 30, 1995.
The increase was due primarily to one line of credit totaling approximately
$1,000,000 which was placed on non-accrual status during the first quarter of
1995 and a second line of credit totaling approximately $500,000 which was
placed on non-accrual status during the second quarter of 1995. The Small
Business Administration, however, guarantees approximately 80% of the first line
of credit. The resulting ratio of the allowance for loan losses to non-accruing
loans at June 30, 1995 was 64.4% compared to 151.3% at December 31, 1994.
Deposits
Total deposits of the Company increased $815,000 since December 31, 1994 to
$264,436,000 at June 30, 1995. Total interest-bearing deposits of the Company
increased $8,015,000 during the first half of 1995 to $223,902,000 at June 30,
1995. This increase appears to be primarily the result of a shift in funds as
the volume of non-interest bearing deposits decreased $7,200,000 since December
31, 1994 to $40,534,000 at June 30, 1995. Time deposits increased $14,442,000,
or 12.5%, during the first half of 1995 to $130,023,000 at June 30, 1995. The
volume of regular savings deposits decreased from $31,658,000 at year end 1994
to $30,506,000 at June 30, 1995. Interest-bearing demand accounts decreased
$5,960,000 during the first half of 1995 to $62,688,000 at June 30, 1995.
6
<PAGE>
Stockholders' Equity
Total stockholders' equity at June 30, 1995 was $30,642,000, compared to
$27,630,000 at December 31, 1994. Undistributed earnings of the Company through
June 30, 1995 contributed $1,042,000 to stockholders' equity. A decrease in the
unrealized loss on securities available for sale required by SFAS 115, net of
the income tax effect, from $2,628,000 at year end 1994 to $658,000 at June 30,
1995 added $1,970,000 back to stockholders' equity.
Risk-based capital regulations require all bank holding companies and banks
to achieve and maintain a minimum total capital to total risk-weighted assets
ratio of 8.00%, at least half of which must be in the form of Tier 1, or core,
capital (consisting of stockholders' equity less goodwill). The following table
indicates that the Company's Tier 1 capital ratio and total capital ratio at
June 30, 1995 were 14.80% and 15.42%, respectively. The Company maintained, at
June 30, 1995, a leverage ratio of Tier 1 capital to total assets of 9.84%,
compared to the minimum regulatory requirement of 3.00% required of the
strongest companies and banks. All other companies and banks are expected to
maintain a ratio of 1% to 2% above the state minimum of 3.00%. In addition, the
table indicates that the Bank's ratios also well-exceed the minimum requirements
of the regulations.
RISK-BASED CAPITAL RATIOS & LEVERAGE RATIOS AS OF JUNE 30, 1995
<TABLE>
<CAPTION>
The Company The Bank
---------------- ----------------
(Dollars in thousands)
<S> <C> <C> <C> <C>
RISK-BASED CAPITAL RATIOS
Tier 1 Capital..................... $ 29,410 14.80% $ 31,251 15.77%
Tier 1 Capital - Minimum Required.. 7,947 4.00 7,929 4.00
-------- ----- -------- -----
Excess............................. $ 21,463 10.80% $ 23,322 11.77%
======== ===== ======== =====
Total Capital...................... $ 30,642 15.42% $ 29,406 14.83%
Total Capital - Minimum Required... 15,893 8.00 15,858 8.00
-------- ----- -------- -----
Excess............................. $ 14,749 7.42% $ 13,548 6.83%
======== ===== ======== =====
Net risk-weighted assets........... $198,667 $198,224
======== ========
LEVERAGE RATIOS
Total Tier 1 Capital............... $ 29,410 9.84% $ 31,251 10.47%
Minimum Leverage Requirement....... 8,970 3.00 8,956 3.00
-------- ----- -------- -----
Excess............................. $ 20,440 6.84% $ 22,295 7.47%
======== ===== ======== =====
Average Total Assets,
net of all goodwill.............. $299,005 $298,521
======== ========
</TABLE>
7
<PAGE>
RESULTS OF OPERATIONS
Three Months Ended June 30, 1995 Compared to Three Months Ended June 30, 1994
The Company's profitability, like that of many financial institutions, is
dependent to a large extent upon its net interest income, which is the
difference between its interest income on interest-earning assets, such as loans
and investments, and its interest expense on interest-bearing liabilities, such
as deposits and borrowings. Interest sensitivity is one measure of the
vulnerability of earnings to changes in the general level of interest rates.
Whenever interest-earning assets reprice to market interest rates at a different
pace than interest-bearing liabilities, net interest income performance will be
affected favorably or unfavorably during periods of changes in general interest
rates. Management is unable to predict future changes in market rates of
interest and their impact on the Company's profitability. Management believes,
however, that the Company's current rate sensitivity position is well matched,
indicating the assumption of minimal interest rate risk.
Interest income for the second quarter of 1995 was $6,161,000, compared to
$4,758,000 for the same quarter of 1994. Average earning assets grew from
$260,763,000 for the second quarter of 1994 to $272,938,000 for the second
quarter of 1995.
The average volume of the Company's securities portfolio, including
securities classified as available for sale, decreased from $118,901,000 at June
30, 1994 to $99,314,000 at June 30, 1995. Funds from maturing investments were
reinvested primarily in higher yielding loans. Interest income on securities
reflected a decrease of $156,000, or 9.80%. Between the quarters, however,
average yields increased from 5.37% to 5.80%.
Interest income on loans for the second quarter of 1995 totaled $4,442,000,
compared to interest income on loans for the second quarter of 1994 of
$3,146,000. Stronger loan demand occurring between the quarters increased the
average volume of loans for the second quarter of 1995 to $169,299,000, an
18.38% growth from the 1994 second quarter average of $143,013,000. Average
yields on loans increased between the quarters from 8.80% to 10.50%.
Interest income from business loans totaled $1,261,000 for the quarter ended
June 30, 1995, compared to $908,000 for the quarter ended June 30, 1994. This
increase was the result of both an increase in volume and interest rates. The
average volume of business loans increased $10,459,000, or 20.05%, between the
quarters, while yields increased from 8.92% to 9.86%.
Personal loan interest income increased from $1,471,000 for the quarter ended
June 30, 1994 to $1,683,000 for the same quarter in 1995. Growth in automobile
financing was primarily responsible for an increase in the average volume of
personal loans from $47,321,000 for the second quarter of 1994 to $63,171,000
for the second quarter of 1995. Yields on personal loans decreased between the
quarters, from 12.44% to 10.66%.
An increase in the average volume of real estate loans from $41,238,000 for
the quarter ended June 30, 1994 to $52,334,000 for the quarter ended June 30,
1995, coupled with an increase in yields from 9.92% to 10.49% during the same
period, caused interest income on real estate loans to grow from $1,024,000 to
$1,372,000.
Interest expense on deposits for the second quarter of 1995 was $2,707,000,
compared to $1,877,000 for the same period in 1994. The average volume of
interest bearing deposits increased $36,015,000, or 16.0%, to $222,519,000
between the quarters. The increase appears to be primarily the result of a
shift in funds from non-interest bearing deposits into interest bearing deposit
accounts. An increase in the average cost of the deposits from 3.59% for the
second quarter of 1994 to 4.87% for the second quarter of 1995 also contributed
to the higher interest expense on deposits.
8
<PAGE>
The resulting net interest income for the quarter ended June 30, 1995 was
$3,423,000, compared to $2,849,000 for the same quarter in 1994, a 20.1%
increase.
The provision for loan losses replaces reductions to the allowance for loan
losses caused by actual charge-offs and to establish adequate reserves for the
growth of the loan portfolio. The Company's provision for loan losses for the
quarter ended June 30, 1995 was $214,000, compared to $87,000 for the same
quarter in 1994. See "--Financial Condition -- Allowance for Loan Losses"
above.
Non-interest income for the second quarter of 1995, excluding gains on the
sale of investment securities, totaled $698,000, compared to $771,000 in 1994.
Quarterly income from deposit service charges decreased $33,000 from $559,000
for the second quarter of 1994 to $526,000 for the same quarter of 1995. Credit
life commissions for the second quarter of 1995 declined $16,000 compared to the
second quarter of 1994, although loan volume increased. Credit life commissions
through June 30, 1995 totaled $16,000, compared to $32,000 through June 30,
1994.
During the quarter ended June 30, 1995, gains recognized on the sale of
investment securities were $22,000. For the quarter ended June 30, 1994, the
Company recorded gains on the sale of investment securities of $3,000.
Non-interest expenses increased $83,000, from $2,693,000 for the second
quarter of 1994 to $2,776,000 for the second quarter of 1995. During the second
quarter of 1994, the Company acquired the deposits of one branch of a failed
thrift institution. Amortization expense of the premium paid by the Company to
acquire these deposits totaled $26,000 for the second quarter of 1995, whereas
through June 30, 1994 an amortization expense of $9,000 had been recorded.
Computer expense increased from $57,000 for the quarter ended June 30, 1994 to
$79,000 for the same quarter in 1995. This increase was primarily due to lease
payments on new computer equipment installed during the third quarter of 1994.
In addition, the expense of automation hardware and software increased $15,000,
from $16,000 at June 30, 1994 to $31,000 at June 30, 1995.
Income before taxes for the quarter ended June 30, 1995 was $1,153,000,
compared to $843,000 for the quarter ended June 30, 1994. The income tax
provision for the second quarter of 1995 increased $111,000 to $344,000,
compared to $233,000 for the same quarter of 1994. The resulting net income for
the second quarter of 1995 totaled $809,000, compared to $610,000 for the same
quarter in 1994. Income per share for the three months ended June 30, 1995 was
$.46 compared to $.35 for the three months ended June 30, 1994.
Six Months Ended June 30, 1995 Compared to Six Months Ended June 30, 1994
Interest income for the first half of 1995 totaled $11,684,000, compared to
$9,202,000 for the first half of 1994. The increase of $2,482,000 was due to
increased loan volume, which was funded primarily through a decrease in
investment securities.
Interest income and dividends on the Company's investment securities for the
six months ended June 30, 1995 were $2,865,000, compared to $2,959,000 for the
same six month period in 1994. Average yields on investment securities
increased from 5.17% at June 30, 1994 to 5.70% at June 30, 1995.
Interest income on the Company's loans grew from $6,149,000 for the first
half of 1994 to $8,478,000 for the same period in 1995. Through June 30, 1995,
average volume of loans was $165,757,000. The average yields on loans increased
from 8.79% at June 30, 1994 to 10.23% at June 30, 1995.
Interest expense on deposits through June 30, 1995 totaled $5,232,000,
compared to $3,653,000 through June 30, 1994. The average volume of interest-
bearing deposits increased from $207,081,000 for the six months ended June 30,
1994 to $221,665,000 for the six months ended June 30, 1995. The average cost
of the Company's deposits increased from 3.53% through June 30, 1994 to 4.72%
through June 30, 1995.
9
<PAGE>
The resulting net interest income for the six months ended June 30, 1995 was
$6,367,000 compared to $5,496,000 in 1994.
For the six months ended June 30, 1995, the provision totaled $307,000,
compared to $172,000 for the same period in 1994. See "-- Financial Condition -
- Allowance for Loan Losses" above.
For the first half of 1995, non-interest income, excluding gains on the sale
of securities, increased $140,000 from $1,489,000 for the six months ended June
30, 1994 to $1,629,000 for the six months ended June 30, 1995. In 1995, an
increase of $108,000 was noted in deposit service charges. Also in 1995, the
Company recorded additional fee income of $27,000 from the accounts receivable
financing program and $49,000 from the recovery of principal and interest on
previously charged-off bonds, which were in default. Income from the Company's
insurance subsidiary and brokerage department declined $2,000 and $46,000,
respectively, in 1995 compared to the previous year's income.
Non-interest expense through June 30, 1995 totaled $5,494,000, an increase of
$180,000 from last year. For the first six months of 1995, amortization expense
for the premium paid by the Company to acquire the deposits of one branch of a
failed thrift institution totaled $51,000, as compared to $9,000 of amortization
expense recorded through June 30, 1994.
Income before taxes for the six months ended June 30, 1995 totaled
$2,001,000, compared to $1,575,000 for the same period in 1994. The 1995 income
tax provision was $539,000, compared to $470,000 in 1994 due to increased
income. The resulting net income through June 30, 1995 of $1,462,000 was
$357,000 more than the six months ended June 30, 1994 net income of $1,105,000.
Income per share increased from $.63 to $.84.
Recent Development
The Bank's deposits are insured by the Bank Insurance Fund ("BIF"), which is
administered by the Federal Deposit Insurance Corporation ("FDIC"). The
assessment rate currently ranges from 0.23% of deposits for well capitalized
institutions to 0.31% of deposits for undercapitalized institutions. On August
8, 1995, the FDIC adopted an amendment to the BIF risk-based assessment schedule
which lowered the deposit insurance assessment rate for most commercial banks
and other depository institutions with deposits insured by the BIF to a range of
from 0.31% of insured deposits for undercapitalized BIF-insured institutions to
0.04% of deposits for well-capitalized institutions, including the Bank. The
FDIC amendment becomes effective for the quarter ending September 30, 1995.
Approximately 4.0% of the Bank's deposits are insured by the Savings
Association Insurance Fund ("SAIF"), which also is administered by the FDIC and
has the same assessment rate as the current BIF assessment rate. The amendment
creates a substantial disparity in the deposit insurance premiums to be paid by
BIF and SAIF members.
A number of proposals are being considered to recapitalize the SAIF in order
to eliminate the premium disparity. Under one proposal, the BIF and SAIF would,
among other things, be merged into one fund as soon as practicable after they
both reach their designated reserve ratios, but no later than January 1, 1998.
It is unknown whether this particular proposal or any other proposal will be
implemented or that premiums for either BIF or SAIF members will be adjusted in
the future by the FDIC or by legislative action.
10
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
On April 11, 1995, the Company held its Annual Meeting of Shareholders at
which the following matters were considered and voted on:
Proposal I -- Election of Directors
<TABLE>
<CAPTION>
NOMINEES FOR WITHHELD
-------- --- --------
<S> <C> <C>
Julius R. Brown 735,629 803
Clyde B. Cox, Jr. 735,629 803
Harry W. Gamble, Jr. 735,629 803
Ted M. Henry 735,629 803
Elam P. Holley, Jr. 735,629 803
A. D. Lovelady 735,629 803
James A. Minter, III 735,629 803
Richard P. Morthland 735,609 823
C. Ernest Smith 735,629 803
Julius E. Talton 735,629 803
Clinton S. Wilkinson, Jr. 735,629 803
</TABLE>
There were no abstentions or broker non-votes.
Proposal II -- Approval of a proposed new Article VI of the Articles of
Incorporation
FOR AGAINST ABSTAIN
--- ------- -------
730,822 2,716 2,894
There were no broker non-votes.
Proposal III -- Approval of a proposed amendment to Article VIII of the
Articles of Incorporation
FOR AGAINST ABSTAIN
--- ------- -------
722,785 4,298 9,349
There were no broker non-votes.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 3(i) - Articles of Incorporation, as amended.
Exhibit 3(ii) - Bylaws, as amended.
Exhibit 27 - Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter for which this
report is filed.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
The Peoples BancTrust Company, Inc.
--------------------------------------
(Registrant)
/s/ Richard P. Morthland
---------------------------------------
Richard P. Morthland, President
/s/ Virginia L. Sellers
---------------------------------------
Virginia L. Sellers, Treasurer
DATE: August 14, 1995
12
<PAGE>
EXHIBIT 3(i)
ARTICLES OF INCORPORATION
OF
THE PEOPLES BANCTRUST COMPANY, INC.
_____________________________
For the purpose of forming a corporation under the Alabama Business
Corporation Act and any act amendatory thereof, supplementary thereto or
substituted therefor (hereinafter referred to as the "Act"), the undersigned do
hereby sign and adopt these Articles of Incorporation and, upon the filing for
record of these Articles of Incorporation in the Office of the Judge of Probate
of the county in which the initial registered office is established under
Article V hereof, the existence of a corporation (hereinafter referred to as the
"Corporation"), under the name set forth in Article I hereof, shall commence.
ARTICLE I
NAME
----
1.1 The name of the Corporation shall be The Peoples BancTrust Company, Inc.
ARTICLE II
PERIOD OF DURATION
------------------
2.1 The duration of the Corporation shall be perpetual.
ARTICLE III
PURPOSES, OBJECTS AND POWERS
----------------------------
3.1 The purposes and objects and powers of the Corporation are:
(a) To engage in any lawful business, act or activity for which a
corporation may be organized under the Act, it being the purpose and
intent of this Article III to invest the Corporation with the broadest
purposes, objects and powers lawfully permitted a corporation formed
under the Act.
(b) To carry on any and all aspects, ordinary or extraordinary, of any
lawful business and to enter into and carry out any transaction,
ordinary or extraordinary, permitted by law, having and exercising in
connection therewith all powers given to corporations by the laws of the
State of Alabama.
(c) Without limiting the scope and generality of the foregoing, the
Corporation shall have the following specific purposes, objects and
powers, to the fullest extent permitted by law:
(1) To acquire, own, manage, operate, improve; build; to sell, lease,
mortgage, pledge, distribute or otherwise deal in and dispose of, property of
every kind and wheresoever situated.
(2) To purchase, lease or otherwise acquire any interest in the
properties and rights of any person, firm, corporation or governmental unit;
to pay for the same in cash, in shares of stock, bonds, or other securities,
evidences of indebtedness or property of this Corporation or of any other
person, firm, corporation or governmental unit.
1
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(3) To be a promotor or incorporator, to subscribe for, purchase, deal
in and dispose of, any stock, bond, obligation or other security, of any
person, firm, corporation, or governmental unit, and while the owner and
holder thereof, to exercise all rights of possession and ownership.
(4) To purchase or otherwise acquire (including without limitation, to
purchase its own shares to the extent of unreserved and unrestricted capital
surplus available therefor), pledge or otherwise deal in or dispose of shares
of its own stock, bonds, obligations or other securities.
(5) To borrow money from any person, firm, corporation, or governmental
unit and to secure any debt by mortgage or pledge of any property of the
Corporation; to make contracts, guarantees, and indemnity agreements and
incur liabilities and issue its notes.
(6) To lend money, or aid or extend credit to or use its credit to
assist, any person, firm, corporation, or governmental unit, including,
without limitation, its employees and directors and those of any subsidiary.
(7) To guarantee any indebtedness and other obligations of, and to lend
its aid and credit to, any person, firm, corporation, or governmental unit,
and to secure the same by mortgage or pledge of, or security interest in, any
property of the Corporation.
(8) To consolidate, merge or otherwise reorganize in any manner
permitted by law; to engage in one or more partnerships and joint ventures as
general or limited partner.
(9) To carry on its business anywhere in the United States and in
foreign countries.
(10) To elect or appoint officers and agents and define their duties and
fix their compensation; to pay pensions and establish pension plans, pension
trusts, profit sharing plans, stock bonus plans, stock option plans, and
other incentive or deferred compensation plans for any or all of its
directors, officers and employees.
(11) To make donations for the public welfare or for charitable,
scientific, or educational purposes; to transact any lawful business which
the Board of Directors shall find to be in aid of governmental policy.
3.2 All words, phrases and provisions appearing in this Article III are used
in their broadest sense, are not limited by reference to or interference from
any other words, phrases or provisions and shall be so construed.
ARTICLE IV
CAPITAL STOCK
-------------
The total number of shares of capital stock of all classes which the
Corporation shall have authority to issue is five million (5,000,000), of which
four million (4,000,000) shares shall be common stock of the par value of $0.10
per share (hereinafter called "Common Stock"), and one million (1,000,000)
shares shall be preferred stock of the par value of $0.10 per share (hereinafter
called "Preferred Stock").
No holder of any shares of capital stock of the Corporation shall have any
preemptive right to purchase, subscribe for, or otherwise acquire any shares of
the Corporation of any class now or hereafter authorized, or any securities
exchangeable for or convertible into such shares, or any warrants or other
instruments, evidencing rights or options to subscribe for, purchase, or
otherwise acquire such shares.
2
<PAGE>
The Corporation may from time to time issue and dispose of any of the
authorized and unissued shares of Common Stock or of Preferred Stock for such
consideration, not less than its par value per share, as may be fixed from time
to time by the board of directors, without action by the shareholders. The
board of directors may provide for payment therefor to be received by the
Corporation in cash, property (real or personal), or services, actually
performed for the Corporation, or any combination of the foregoing, to the full
extent permitted under Alabama law. In the absence of actual fraud in the
transaction, the value of such property or services, as determined by the board
of directors of the Corporation, shall be conclusive. Any and all such shares
of the Common or Preferred Stock of the Corporation the issuance of which has
been so authorized, and for which consideration so fixed by the board of
directors has been paid or delivered, shall be deemed full-paid stock and shall
not be liable to any further call or assessment thereon.
The designations and the powers, preferences, and rights and the
qualifications, limitations or restrictions thereof of the shares of each class
are as follows:
4.1 Common Stock. (a) Except as provided in this Article IV (or in any
resolution or resolutions adopted by the board of directors of the Corporation
pursuant hereto), the holders of the Common Stock shall exclusively possess all
voting power. Each holder of shares of Common Stock shall be entitled to one
vote for each share held by such holder, including the election of directors.
There shall be no cumulative voting rights in the election of directors.
(b) Whenever there shall have been paid, or declared and set aside for
payment, to the holders of the outstanding shares of any class of stock having
preference over the Common Stock as to the payment of dividends, the full amount
of dividends and of sinking fund or retirement fund or other retirement
payments, if any, to which such holders are respectively entitled in preference
to the Common Stock, then dividends may be paid on the Common Stock and on any
class or series of stock entitled to participate therewith as to dividends, out
of any assets legally available for the payment of dividends; but only when and
as declared by the board of directors.
(c) In the event of any liquidation, dissolution or winding up of the
Corporation, after there shall have been paid to or set aside for the holders of
any class having preferences over the Common Stock in the event of liquidation,
dissolution or winding up of the full preferential amounts of which they are
respectively entitled, the holders of the Common Stock, and of any class or
series of stock entitled to participate therewith, in whole or in part, as to
distribution of assets, shall be entitled after payment or provision for payment
of all debts and liabilities of the Corporation, to receive the remaining assets
of the Corporation available for distribution, in cash or in kind.
(d) Each share of Common Stock shall have the same relative rights as and be
identical in all respects with all the other shares of Common Stock.
4.2 Preferred Stock. (a) The Preferred Stock may be issued from time to
time in one or more series, the shares of each series to have such voting
powers, full or limited, and such designations, preferences, and relative,
participating, optional, or other special rights and qualifications, limitations
or restrictions thereof as are stated and expressed herein or in the resolution
or resolutions providing for the issue of such series, adopted by the board of
directors as hereinafter provided.
(b) Authority is hereby granted to the board of directors of the
Corporation, subject to the provisions of this Article IV and to the limitations
prescribed by law, to authorize the issue of one or more series of Preferred
Stock and with respect to each such series to fix and state by resolution or
resolutions providing for the issue of each such series the voting powers, full
or limited, if any, of the shares of each such series and the designations,
preferences, and relative, participating, optional or other qualifications,
limitations, or restrictions thereof to the full extent now or hereafter
permitted by Alabama law. The authority of the board of directors with respect
to each series shall include, but not be limited to, the determination or fixing
of the following:
3
<PAGE>
(i) The distinctive serial designation and the number of shares
constituting such series.
(ii) The dividend rate of such series, the conditions and dates upon which
such dividends shall be payable, the relation which such dividends
shall bear to the dividends payable on any other class or classes of
stock, and whether such dividends shall be cumulative or
noncumulative.
(iii) Whether the shares of such series shall be subject to redemption by
the Corporation and, if made subject to such redemption, the times,
prices, and other terms and conditions of such redemption.
(iv) The terms and amount of any sinking fund provided for the purchase or
redemption of the shares of such series, and if so entitled, the
amount of such fund and the manner of its application, including the
price or prices at which such shares may be redeemed or purchased
through the application of such fund.
(v) Whether or not the shares of such series shall be convertible into, or
exchangeable for, shares of any other class or classes or of any other
series of the same or any other class or classes of stock of the
Corporation, and, if provision be made for conversion or exchange, the
times, prices, rates, adjustments, and other terms and conditions of
such conversion or exchange.
(vi) The extent, if any, to which the holders of the shares of such series
shall be entitled to vote with respect to the election of directors or
otherwise.
(vii) The restrictions, if any, on the issue or reissue of any additional
Preferred Stock.
(viii) The rights of the holders of the shares of such series upon the
dissolution of, or upon the distribution of assets of, the
Corporation.
(ix) Whether the shares of such series which are redeemed or converted
should have the status of authorized but unissued shares of Preferred
Stock and whether such shares may be reissued as shares of the same or
any other series of Preferred Stock.
(c) Dividends on outstanding shares of Preferred Stock shall be paid, or
declared and set apart for payment, before any dividends shall be paid or
declared and set apart for payment on the Common Stock with respect to the same
dividend period.
(d) If upon any voluntary or involuntary liquidation, dissolution or winding
up of the Corporation, the assets available for distribution to holders of
shares of Preferred Stock of all series shall be insufficient to pay such
holders the full preferential amount to which they are entitled, then such
assets shall be distributed ratably among the shares of all series of Preferred
Stock in accordance with the respective preferential amounts (including unpaid
cumulative dividends, if any) payable with respect thereto.
(e) Each share of each series of Preferred Stock shall have the same
relative rights as and be identical in all respects with all the other shares of
the same series.
(f) Except as otherwise required by law and except for such voting powers
with respect to the election of directors or other matters as may be stated in
the resolution or resolutions of the board of directors providing for the issue
of any series of Preferred Stock, the holders of any such series shall have no
voting power whatsoever. Subject to such restrictions as may be stated in the
resolution or resolutions of the board of directors providing for the issue of
any series of Preferred Stock, any amendment to the Articles of Incorporation
which shall increase or decrease the authorized stock of any class or classes
may be adopted by the affirmative vote of the holders of a majority of the
outstanding shares of the voting stock of the Corporation.
4
<PAGE>
ARTICLE V
REGISTERED OFFICE AND REGISTERED AGENT; PRINCIPAL OFFICE
--------------------------------------------------------
5.1 The location and mailing address of the initial registered office of the
Corporation shall be 310 Broad Street, Selma, Alabama 36702-0799.
5.2 The initial registered agent at such address shall be Richard P.
Morthland.
5.3 The principal office of the Corporation in the State of Alabama shall be
310 Broad Street, Selma, Alabama 36702-0799.
ARTICLE VI
BOARD OF DIRECTORS
------------------
6.1 The number of directors of the Corporation shall be a variable range
which is fixed at a minimum number of 3 and a maximum number of 18 (exclusive of
directors, if any, to be elected by holders of preferred stock of the
Corporation, voting separately as a class). The number of directors may be
fixed or changed from time to time, within the minimum and maximum, by the Board
of Directors; provided that no action shall be taken to decrease or increase the
number of directors unless at least two-thirds of the directors then in office,
whether or not a quorum, shall concur in said action. Vacancies in the Board of
Directors of the Corporation, however caused, and newly created directorships
shall be filled by a vote of two-thirds of the directors then in office, whether
or not a quorum.
6.2 Notwithstanding any other provision of these Articles of Incorporation
or the by-laws of the Corporation, any director or the entire Board of Directors
of the Corporation may be removed, at any time, but only for cause and only by
the affirmative vote of the shareholders at a meeting called for that purpose.
For purpose of this Section 6.2, "cause" is defined as a final conviction of a
felony, unsound mind, adjudication of bankruptcy, non-acceptance of office or
conduct prejudicial to the interests of the Corporation. A director may only be
removed by vote of the shareholders after service of specific charges, adequate
notice, and full opportunity to refute the charges.
ARTICLE VII
INCORPORATORS
-------------
7.1 The names and addresses of the incorporators are:
NAME ADDRESS
---- -------
Richard P. Morthland 310 Broad Street
Selma, AL 36702-0799
W. Henry Plant 310 Broad Street
Selma, AL 36702-0799
Elam P. Holley, Jr. 310 Broad Street
Selma, AL 36702-0799
5
<PAGE>
ARTICLE VIII
INTERNAL AFFAIRS
----------------
The following provisions for the regulation of the business and for the
conduct of the affairs of the Corporation, directors and the shareholders are
hereby adopted:
8.1 The initial by-laws of the Corporation shall be adopted by the
shareholders. The shareholders shall have the authority to amend, repeal or
alter the by-laws in whole or in part by vote of the holders of a majority of
the outstanding stock of the Corporation, represented either in person or by
proxy at any regular or special shareholders' meeting. The Board of Directors
may also amend, repeal or adopt by-laws, provided, however, that the Board of
Directors may not alter, amend or repeal any by-law establishing what
constitutes a quorum at shareholders' meetings, or which was adopted by the
shareholders and specifically provides that it cannot be altered, amended or
repealed by the Board of Directors. The by-laws may contain any provisions of
the affairs of the Corporation, the directors and shareholders not inconsistent
with the Act or these Articles of Incorporation.
8.2 The business and affairs of the Corporation shall be managed by the
Board of Directors. The number of directors comprising the initial Board of
Directors shall be the number of persons listed as directors in Article VI
hereof. Thereafter, the number of directors of the Corporation shall be fixed
from time to time by the by-laws, or, in the absence of a by-law fixing the
number of directors, the number of directors shall be the same as the number
comprising the initial Board of Directors. The number of directors may be
increased or decreased from time to time by amendment to the by-laws, provided
that the Board of Directors shall consist of not less than one natural person,
and that no decrease shall have the effect of shortening the term of any
incumbent director.
8.3 There shall be no cumulative voting rights with respect to the election
of Directors or for any purpose relating to the voting of shares.
8.4 The Board of Directors shall have the following authority with respect
to an offer for the Corporation's stock or other securities:
(a) The Board of Directors may, if it deems it advisable, oppose a tender or
other offer for the Corporation's securities, whether the offer is in cash or in
the securities of a corporation or otherwise. When considering whether to
oppose an offer, the Board of Directors may, but it is not legally obligated to,
consider any pertinent issue; by way of illustration, but not of limitation, the
Board of Directors may, but shall not be legally obligated to, consider any or
all of the following:
(i) Whether the offer price is acceptable based on the historical and
present operating results or financial condition of the corporation;
(ii) Whether a more favorable price could be obtained for the
corporation's securities in the future;
(iii) The impact which an acquisition of the corporation would have on
the employees, depositors and customers of the corporation and its
subsidiaries and the communities which they serve;
(iv) The reputation and business practices of the offeror and its
management and affiliates as they would effect the employees, depositors and
customers of the Corporation and its subsidiaries and the future value of the
corporation's stock;
6
<PAGE>
(v) The value of the securities (if any) which the offeror is
offering in exchange for the corporation's securities, based on an analysis
of the worth of the corporation as compared to the corporation or other
entity whose securities are being offered; and
(vi) Any antitrust or other legal and regulatory issues that are
raised by the offer.
(b) If the Board of Directors determines that an offer should be
rejected, it may take any lawful action to accomplish its purpose, including,
but not limited to, any or all of the following: Advising shareholders not to
accept the offer; litigation against the offeror; filing complaints with all
governmental and regulatory authorities; acquiring the corporation's securities;
selling or otherwise issuing authorized but unissued securities or treasury
stock or granting options with respect thereto; acquiring a company to create an
antitrust or other regulatory problem for the offeror; and soliciting a more
favorable offer from another individual or entity.
8.5(a) The Corporation, acting through its Board of Directors, shall have
the authority to indemnify any person who was or is a party or threatened to be
made a party to any threatened, pending or completed claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative, including
appeals, including an action by or in the right of the Corporation, by reason of
the fact that he is or was a director, officer, employee or agent of the
Corporation, or is or was serving at the request of the Corporation as an
officer, director, partner, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such claim, action,
suit or proceeding, to the full extent authorized under Alabama law or any other
relevant laws.
(b) The Corporation, acting through its Board of Directors, shall have
the authority to 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, partner,
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 the laws of Alabama or any other relevant laws.
(c) A director of the Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages for any action taken, or
any failure to take any action, as a director, except liability for (i) the
amount of a financial benefit received by a director to which he or she is not
entitled; (ii) an intentional infliction of harm on the Corporation or the
shareholders; (iii) a violation of Section 10-2B-8.33 of the 1994 Alabama
Business Corporation Act ("Liability for Unlawful Distributions"); (iv) an
intentional violation of criminal law; or (v) a breach of the director's duty of
loyalty to the Corporation or its shareholders. If the 1994 Alabama Business
Corporation Act or other Alabama law is amended or enacted after the date of
filing of this Paragraph 8.5(c) to further eliminate or limit the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the 1994
Alabama Business Corporation Act, as so amended, or such other Alabama law. Any
repeal or modification of this Paragraph 8.5(c) by the shareholders of the
Corporation shall not adversely affect any right or protection of a director of
the Corporation existing at the time of such repeal or modification.
8.6 The Corporation reserves the right from time to time to amend, alter
or repeal each and every provision contained in these Articles of Incorporation,
or to add one or more additional provisions, in the manner now or hereafter
prescribed or permitted by the Act, and all rights conferred upon shareholders
at any time are granted subject to this reservation.
7
<PAGE>
EXHIBIT 3(ii)
-------------
BYLAWS OF
THE PEOPLES BANCTRUST COMPANY, INC.
-----------------------------
ARTICLE I
MEETING OF SHAREHOLDERS
-----------------------
Section 1.1 Annual Meeting. The regular annual meeting of the shareholders
--------------
for the election of directors, and the transaction of whatever other business
may properly come before the meeting, shall be held at the Main Office of the
Corporation, or such other places as the Board of Directors may designate, on
the second Tuesday of April of each year. If from any cause the annual meeting
is not held on the above day or an election of directors is not made on the day
of the annual meeting, the Board of Directors shall order the annual meeting or
meeting for the election of directors to be held on some subsequent day, as soon
thereafter as practicable, and notice thereof shall be given in the manner
provided for herein.
Section 1.2 Special Meetings. Except as otherwise specifically provided by
----------------
statute, special meetings of the shareholders may be called for any purpose at
any time by the Board of Directors, the Chairman of the Board, the President, or
any shareholder or shareholders owning, in the aggregate, not less than thirty-
three and one-third percent of all of the shares of the Corporation entitled to
vote at the meeting.
Section 1.3 Notice of Shareholders' Meetings. Written notice stating the
--------------------------------
place, day and hour of the meeting and, in case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered not less
than ten nor more than fifty days before the date of the meeting, either
personally or by mail, by or at the discretion of the President, the Secretary,
or the officer or persons calling the meeting, to each shareholder of record
entitled to vote at such meeting. If mailed, such notice shall be deemed to be
delivered when deposited in the United States mail addressed to the shareholder
at his address as it appears on the stock transfer books of the Corporation,
with postage thereon prepaid. Notice may be waived in writing, whether before
or after the time stated therein.
Section 1.4 Proxies. Shareholders may vote at any meeting of the
-------
shareholders by proxies executed in writing by the shareholder or by his duly
authorized attorney-in-fact. Proxies shall be dated and shall be filed with the
records of the meeting.
Section 1.5 Voting of Shares. In all elections of directors, each holder of
----------------
common stock shall be entitled to one vote for each share of such stock owned by
him, and may vote either in person or by proxy. In the election of directors,
no shareholder shall have the right of cumulative voting of his shares.
Section 1.6 Quorum. A majority of the outstanding capital stock,
------
represented in person or by proxy, shall constitute a quorum at any meeting of
shareholders, unless otherwise provided by law; but less than a quorum may
adjourn any meeting, from time to time, and the meeting may be held, as
adjourned, without further notice. A majority of the votes cast shall decide
every question or matter submitted to the shareholders at any meeting, unless
otherwise provided by law or by the Articles of Incorporation.
Section 1.7 Nominations for Directors. Nominations for directors to be
-------------------------
elected at the annual meeting shall be made in writing and submitted to the
Secretary or President of the Corporation at least three days prior to the
annual meeting date. No further nominations shall be accepted, unless the
shareholders, by majority vote, determine that additional nominations are to be
accepted, in which event further nominations as so determined by the
shareholders may be made at the annual meeting.
Section 1.8 Action Without a Meeting. Notwithstanding other
------------------------
provisions of these bylaws, any action which may be taken at a meeting of the
shareholders, including the election of directors, may be taken without a
meeting if a consent in writing of all shareholders entitled to vote is obtained
pursuant to Alabama law.
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SECTION II
DIRECTORS
---------
Section 2.1 Board of Directors. The Board of Directors (hereinafter
------------------
referred to as the "Board") shall have the power to manage and administer the
business and affairs of the Corporation. Except as expressly limited by law,
all corporate powers of the Corporation shall be vested in and may be exercised
by said Board.
Section 2.2 Number. The number of directors of the Corporation shall be a
------
variable range which is fixed at a minimum number of three and a maximum number
of eighteen (exclusive of directors, if any, to be elected by holders of
preferred stock of the Corporation, voting separately as a class). The number
of directors may be fixed or changed from time to time, within the minimum and
maximum, by the Board of Directors; provided that no action shall be taken to
decrease or increase the number of directors unless at least two-thirds of the
directors then in office, whether or not a quorum, shall concur in said action.
Section 2.3 Regular Meetings. The regular meetings of the Board of
----------------
Directors shall be held at least semi-annually on such dates and at such places
as the President or Secretary may designate.
Section 2.4 Special Meetings. Special meetings of the Board of Directors
----------------
may be called by the President, Secretary, or at the request of one-third or
more of the directors. Each member of the Board of Directors shall be given
notice either in writing, or in person, or by telephone, stating the time and
place of such special meeting.
Section 2.5 Quorum. A majority of the directors shall constitute a quorum
------
at any meeting, except when otherwise provided by law; but a less number may
adjourn any meeting, from time to time, and the meeting may be held, as
adjourned, without further notice.
Section 2.6 Vacancies in Board of Directors. Vacancies in the Board of
-------------------------------
Directors of the Corporation, however caused, and newly created directorships
shall be filled by a vote of two-thirds of the directors then in office, whether
or not a quorum.
Section 2.7 Removal of Director. A director, or the entire Board of
-------------------
Directors, may be removed only in accordance with Section 6.2 of the Articles of
Incorporation.
Section 2.8 Directors Emeritus. There is created a status known as Director
------------------
Emeritus, which shall be an honorary position for those directors who have
reached the age of 70 years or who have become incapacitated while in office.
These positions may be filled by the Board or by the shareholders. The persons
elected to this position shall not be voting members of the Board and shall not
have any of the duties or responsibilities of a director, but shall have the
right to attend meetings and be compensated for their services. No such
director emeritus shall be counted as a member of the Board for the purposes set
forth under this Article II of these bylaws, or for any other purpose.
Section 2.9 Incapacity of Director. In the event a director shall become
----------------------
physically or mentally incapacitated, the remaining members of the Board shall
have the authority to so declare that person incapacitated and remove that
person from the office of director.
Section 2.10 Action Without a Meeting. Notwithstanding other provisions of
------------------------
these bylaws, any action which may be taken at a meeting of the Board of
Directors may be taken without a meeting if a consent in writing of all
directors entitled to vote is obtained pursuant to Alabama law.
ARTICLE III
COMMITTEES OF THE BOARD
-----------------------
Section 3.1 Committees. The Board of Directors may appoint, from time to
----------
time, from its own members, committees of one or more persons, for such purposes
and with such powers as the Board may determine.
2
<PAGE>
ARTICLE IV
OFFICERS
--------
Section 4.1 President. The Board of Directors shall appoint one of its
---------
members to be President of the Corporation. The President shall preside at any
meeting of the Board, unless a Chairman of the Board has been appointed and is
present to so preside. The President shall have general executive powers and
shall have and may exercise any and all other powers and duties pertaining by
law, regulation, or practice, to the Office of President, or imposed by these
bylaws. The President shall also have and may exercise such further powers and
duties as from time to time may be conferred or assigned by the Board of
Directors.
Section 4.2 Secretary. The Board of Directors shall appoint a Secretary of
---------
the Corporation. The Secretary shall attend to the giving of all notices
required by these bylaws to be given; shall be custodian of the corporate seal,
records, documents and papers of the Corporation; shall provide for the keeping
of proper records of all transactions of the Corporation; shall have and may
exercise any and all other powers and duties pertaining by law, regulation or
practice, to the Office of Secretary, or imposed by these bylaws; and shall also
perform such other duties as may be assigned from time to time by the Board of
Directors.
Section 4.3 Other Officers. The Board of Directors may also appoint a
--------------
Chairman of the Board and such other officers as from time to time may appear to
the Board of Directors to be required or desirable to transact the business of
the Corporation. Such officers shall respectively exercise such powers and
perform such duties as pertain to their several offices, or as may be conferred
upon, or assigned to, them by the Board of Directors, the Chairman of the Board
of Directors, or the President.
Section 4.4 Tenure of Office. The President and all other officers shall
----------------
hold office for the current year for which the Board was elected, unless they
shall resign, become disqualified, or be removed.
ARTICLE V
STOCK AND STOCK CERTIFICATES
----------------------------
Section 5.1 Transfers. Shares of stock shall be transferable on the books
---------
of the Corporation, and a transfer book shall be kept in which all transfers of
stock shall be recorded. Every person becoming a shareholder by such transfer
shall, in proportion to his shares, succeed to all rights of the prior holder of
such shares.
Section 5.2 Stock Certificates. The shares of the Corporation shall be
------------------
represented by certificates signed by either the President or a Vice-President
and countersigned either by the Secretary or an Assistant Vice-President and may
be sealed with the seal of the Corporation or a facsimile thereof.
ARTICLE VI
BYLAWS
------
Section 6.1 Inspection. A copy of the bylaws, with all amendments thereto,
----------
shall at all times be kept in a convenient place at the Main Office of the
Corporation and shall be open for inspection to all shareholders.
Section 6.2 Amendments. Except as may be otherwise limited by the Articles
----------
of Incorporation or by the shareholders, the bylaws may be amended, altered or
repealed at any regular or special meeting of the Board of Directors by a vote
of a majority of the total number of directors.
3
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