<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995.
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________ to _____________
Commission file number: 0-13585
NATIONAL CITY BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
INDIANA 35-1632155
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P.O. BOX 868, EVANSVILLE, INDIANA 47705-0868
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (812) 464-9800
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 shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days.
Yes (X) No ( )
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
CLASS OUTSTANDING AT NOVEMBER 10, 1995
(Common stock,
$1.00 Stated value) 4,701,046
<PAGE>
NATIONAL CITY BANCSHARES, INC.
INDEX
PAGE NO.
PART I - FINANCIAL INFORMATION
Condensed consolidated statements of
financial position-
September 30, 1995, December 31, 1994,
and September 30, 1994 1
Condensed consolidated statements of income-
three months and nine months ended
September 30, 1995 and 1994 2
Condensed consolidated statements of cash flows-
nine months ended September 30, 1995 and 1994 3
Notes to condensed consolidated financial statements 6
Management's discussion and analysis of financial
condition and results of operations 9
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K 14
SIGNATURES 14
<PAGE>
NATIONAL CITY BANCSHARES, INC. and Subsidiaries
Condensed Consolidated Statements of Financial Position
(Dollar Amounts Other Than Share Data in Thousands)
<TABLE>
<CAPTION>
September December September
30 31 30
1995 1994 1994
-------- -------- --------
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ 27,937 $ 40,170 $ 31,345
Short-term money market investments 1,701 982 882
Interest-bearing deposits in banks 6,904 13,008 16,479
Securities held to maturity 111,448 112,300 109,007
Securities available for sale 114,987 136,360 150,529
Federal funds sold 1,850 3,050 2,350
Loans 647,527 575,018 566,786
Less: Allowance for loan losses 5,274 4,899 4,855
-------- -------- --------
Loans, net 642,253 570,119 561,931
Premises and equipment 14,036 12,489 11,945
Other real estate owned 439 636 948
Other assets 18,304 17,392 16,325
-------- -------- --------
Total Assets $939,859 $906,506 $901,741
-------- -------- --------
-------- -------- --------
LIABILITIES
Deposits:
Noninterest-bearing demand $ 85,965 $ 94,329 $ 83,724
Interest-bearing savings and time 670,197 670,122 662,690
-------- -------- --------
Total deposits 756,162 764,451 746,414
Federal funds purchased and securities
sold under agreements to repurchase 34,730 25,128 37,685
Notes issued to the U.S. Treasury 3,510 2,675 3,365
Other borrowings 19,829 3,000 3,000
Other liabilities 8,839 6,617 6,215
-------- -------- --------
Total liabilities 823,070 801,871 796,679
-------- -------- --------
</TABLE>
<TABLE>
<CAPTION>
SHAREHOLDERS' EQUITY
<S> <C> <C> <C> <C> <C>
Common stock: 4,475 14,730 14,762
$1.00
Stated Value $3.33 1/3 Par Value
------------ --------------------
9/30/95 12/31/94 9/30/94
------------ --------- ---------
Authorized 10,000,000 5,000,000 5,000,000
Outstanding 4,474,990 4,419,012 4,428,583
Capital surplus 49,852 36,867 37,265
Retained earnings 62,565 55,633 54,664
Unrealized gain (loss) on securities
available for sale (103) (2,595) (1,629)
-------- -------- --------
Total shareholders' equity 116,789 104,635 105,062
-------- -------- --------
Total Liabilities and
Shareholders' Equity $939,859 $906,506 $901,741
-------- -------- --------
-------- -------- --------
</TABLE>
The accompanying notes are an integral part of these statements.
1
<PAGE>
NATIONAL CITY BANCSHARES, INC. and Subsidiaries
Condensed Consolidated Statements of Income
(Dollar Amounts Other Than Share Data in Thousands)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
September 30 September 30
----------------- -----------------
1995 1994 1995 1994
------- ------- ------- -------
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $14,650 $11,621 $40,974 $32,983
Interest and dividends on securities 3,464 3,634 10,607 10,608
Interest on federal funds sold 182 55 466 423
Interest on deposits in banks 108 229 356 744
Interest on short-term money market
investments 33 14 79 82
------- ------- ------- -------
Total interest income 18,437 15,553 52,482 44,840
------- ------- ------- -------
INTEREST EXPENSE
Interest on deposits 7,485 5,961 21,291 17,456
Interest on funds borrowed 669 243 1,424 719
------- ------- ------- -------
Total interest expense 8,154 6,204 22,715 18,175
------- ------- ------- -------
NET INTEREST INCOME 10,283 9,349 29,767 26,665
Provision for loan losses 68 22 115 (19)
------- ------- ------- -------
Net interest income after
provision for loan losses 10,215 9,327 29,652 26,684
------- ------- ------- -------
NONINTEREST INCOME
Trust income 387 296 1,147 893
Service charges on deposit accounts 748 544 2,002 1,634
Security gains (losses) 23 1 25 (176)
Other 622 613 1,855 1,602
------- ------- ------- -------
Total noninterest income 1,780 1,454 5,029 3,953
------- ------- ------- -------
NONINTEREST EXPENSE
Salaries and employee benefits 4,002 3,528 11,178 10,426
Premises and equipment 922 937 2,765 2,872
Assessments of the FDIC 3 425 885 1,317
Other 1,400 1,454 4,862 4,572
------- ------- ------- -------
Total noninterest expense 6,327 6,344 19,690 19,187
------- ------- ------- -------
Income before income taxes 5,668 4,437 14,991 11,450
Income taxes 2,024 1,548 5,266 3,856
------- ------- ------- -------
NET INCOME $ 3,644 $ 2,889 $ 9,725 $ 7,594
------- ------- ------- -------
------- ------- ------- -------
Earnings per common share $0.81 $0.65 $2.19 $1.70
Weighted average shares outstanding 4,475,089 4,434,991 4,439,425 4,465,982
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE>
NATIONAL CITY BANCSHARES, INC. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Dollar Amounts in Thousands)
<TABLE>
<CAPTION>
Nine Months
Ended
September 30
-------------------
1995 1994
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net Income $ 9,725 $ 7,594
Adjustments to reconcile net income to net
cash provided by operating activities:
Amortization 1,034 2,140
Depreciation 1,204 1,226
Provision for loan losses 115 (19)
Write-down of other real estate owned 61 30
Securities losses (gains) (25) 176
(Gain) on sale of premises and equipment (30) (125)
(Gain) loss on sale of other real estate owned 46 (26)
Gain (loss) on sale of subsidiary (206) (7)
Increase (decrease) in deferred taxes 95 (213)
Changes in assets and liabilities:
(Increase) decrease in income earned
but not collected (47) (212)
(Increase) decrease in other assets 38 (905)
Increase (decrease) in accrued interest payable 615 (63)
Increase (decrease) in other liabilities 420 1,002
-------- --------
Net cash flows provided by operating activities 13,045 10,598
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Net (increase) decrease in interest-bearing
deposits in banks 6,503 10,706
Proceeds from matured securities held to maturity 17,688 36,872
Proceeds from matured securities available for sale 33,130 47,796
Proceeds from sales of securities available for sale - 1,999
Purchases of securities held to maturity (14,019) (34,729)
Purchases of securities available for sale (7,609) (71,160)
(Increase) decrease in federal funds sold 3,175 44,874
(Increase) decrease in loans made to customers (61,457) (50,896)
Capital expenditures (2,521) (943)
Proceeds from sale of other real estate owned 376 482
Proceeds from sale of premises and equipment 59 167
Purchase of subsidiary, net of cash and due from banks (309) -
Cash transferred to buyer in sale of subsidiary (10,370) (57)
-------- --------
Net cash flows provided by (used in)
investing activities (35,354) (14,889)
-------- --------
</TABLE>
(Continued on next page)
The accompanying notes are an integral part of these statements.
3
<PAGE>
NATIONAL CITY BANCSHARES, INC. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Continued)
(Dollar Amounts in Thousands)
<TABLE>
<CAPTION>
Nine Months
Ended
September 30
-------------------
1995 1994
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
<S> <C> <C>
Net increase (decrease) in deposits $(14,133) $(14,315)
Net increase (decrease) in federal funds
purchased and securities sold under
agreements to repurchase 9,602 20,907
Net proceeds (payments) in notes issued to
the U.S. Treasury 835 (2,028)
Increase in other borrowings 16,836 -
Payments on other borrowings (7) (210)
Dividends paid (2,613) (2,652)
Repurchase of common stock (520) (3,388)
Sale of common stock 795 566
-------- --------
Net cash flows provided by (used in)
financing activities 10,795 (1,120)
-------- --------
Net increase (decrease) in cash and due from banks (11,514) (5,411)
Cash and cash equivalents at beginning of period 41,152 37,638
-------- --------
Cash and cash equivalents at end of period $ 29,638 $ 32,227
-------- --------
-------- --------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest $22,100 $18,238
Income taxes 4,517 3,900
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
AND FINANCIAL ACTIVITIES
Change in allowance for unrealized gain
(loss) on securities available for sale $4,037 $ 3,397
Increase (decrease) in deferred taxes
attributable to securities available for sale 1,545 1,300
Employee Stock Ownership Plan obligation
guaranty note payment - 541
Other real estate acquired in settlement of loans 252 375
Transfer from other real estate owned to other assets 7 -
Transfer from premises and equipment to other
real estate owned 41 -
Dividends declared not yet paid 985 807
</TABLE>
(Continued on next page)
The accompanying notes are an integral part of these statements
4
<PAGE>
NATIONAL CITY BANCSHARES, INC. and Subsidiaries
Condensed Consolidated Statements of Cash Flows (Continued)
(Dollar Amounts in Thousands)
<TABLE>
<CAPTION>
Nine Months
Ended
September 30
-------------------
1995 1994
-------- --------
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
AND FINANCIAL ACTIVITIES (Continued)
<S> <C> <C>
Sale of subsidiary:
Loan receivable $(300)
-----
-----
Assets disposed of, principally intangible
assets, premises and equipment, and cash (336)
Liabilities assumed by buyer, principally
accounts payable 43
Gain on sale of subsidiary (7)
-----
$(300)
-----
Purchase of subsidiary:
Purchase price $ 896
--------
--------
Assets acquired:
Cash and due from banks $ 587
Interest-bearing deposits in banks 399
Securities 3,753
Federal funds sold 1,975
Loans 11,069
Premises and equipment 354
Income earned but not collected 146
Other assets 1,963
Liabilities assumed:
Deposits (16,742)
Accrued interest payable (92)
Deferred taxes payable (25)
Other liabilities (49)
Common stock issued (2,442)
--------
Accounts payable $ 896
--------
--------
Sale of branch:
Cash paid $10,244
-------
-------
Assets disposed:
Cash (126)
Loans (25)
Premises and equipment (33)
Other assets (266)
Liabilities assumed by buyer:
Deposits 10,898
Other liabilities 2
Gain on sale of branch (206)
-------
$10,244
-------
-------
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
NATIONAL CITY BANCSHARES, INC. and Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
While the interim amounts are unaudited, they do reflect all
adjustments which, in the opinion of management, are necessary for a
fair statement of the results of operations for the interim periods.
All such adjustments are of a normal recurring nature. Year-end
balance sheet amounts are condensed from audited financial statements.
Because the results from commercial banking operations are so closely
related and responsive to changes in economic conditions, the results
for any interim period are not necessarily indicative of the results
that can be expected for the entire year.
NOTE 2
In the normal course of business, there are outstanding various other
commitments and contingent liabilities which are not reflected in the
accompanying financial statements. The Corporation uses the same
credit policies in making commitments and conditional obligations as
it does for other instruments.
<TABLE>
<CAPTION>
9/30/95 12/31/94
----------- -----------
<S> <C> <C>
Standby letters of credit $16,767,000 $16,839,000
Commitments to extend credit $81,552,000 $83,437,000
</TABLE>
NOTE 3
On September 9, 1994, the Corporation sold its wholly-owned
subsidiary, Ayer-Wagoner-Deal Insurance Agency, Inc., which was
acquired through the acquisition of Lincolnland Bancorp, Inc. on
December 17, 1993. The Corporation received approximately $300,000
for its interest in Ayer-Wagoner-Deal Insurance Agency, Inc., in the
form of a note. The sale of the subsidiary was not material, and
retention of this subsidiary was not a part of the goals of the
Corporation.
6
<PAGE>
NOTE 4
On June 29, 1995, the Corporation issued 55,509 shares of its common
stock in exchange for all of the outstanding preferred stock and
$847,000 in exchange for all of the common stock of First National
Bank of Paoli, an $18 million bank located in Paoli, Indiana. At
consummation of the merger, First National Bank of Paoli was merged
with and became a branch of The Bank of Mitchell, a wholly-owned
subsidiary of the Corporation. This acquisition was accounted for
using the purchase method, and the results of operations of First
National Bank of Paoli since the acquisition have been included in the
consolidated financial statements. The excess of the acquisition cost
over the fair value of net assets acquired in the amount of $1,969,000
will be amortized over 15 years using the straight-line method.
On June 30, 1995, the Corporation issued 263,996 shares of its common
stock in exchange for all of the outstanding common stock of White
County Bank, Carmi, Illinois. At consummation of the merger, White
County Bank became a wholly-owned subsidiary of the Corporation.
On August 31, 1995, the Corporation issued 496,874 shares of its
common stock in exchange for all of the outstanding common stock of
United Financial Bancorp, Inc., parent corporation of United Federal
Savings Bank located in Vincennes, Indiana and which was the parent of
UniFed, Inc., providing financial services and property and casualty
insurance. At consummation of the merger, United Financial Bancorp,
Inc. was merged with and into the Corporation. United Federal Savings
Bank is operated as a wholly-owned subsidiary of the Corporation.
UniFed, Inc. is operated as a wholly-owned subsidiary of Pike County
Bank, which is a wholly-owned subsidiary of the Corporation.
Both the White County Bank and the United Financial Bancorp, Inc.
acquisitions were accounted for using the pooling-of-interests method.
Accordingly, the Corporation's financial statements and financial data
have been retroactively restated to include the accounts and
operations of White County Bank and United Financial Bancorp, Inc.
for all periods presented. Certain reclassifications have been made
to White County Bank and United Financial Bancorp, Inc.'s historical
financial statements to conform to the Corporation's presentation.
Assets, loans, deposits, interest income, net interest income, and net
income of the Registrant (NCBE), White County Bank (WCB), and United
Financial Bancorp, Inc. (UFB) for the periods prior to the acquisition
are shown in the following table. Due to the elimination of
intercompany transactions, the historical data may not aggregate to
the combined amounts. Dollar amounts other than share data are shown
in thousands.
7
<PAGE>
<TABLE>
<CAPTION>
NCBE
NCBE WCB UFB Combined
---- --- --- --------
<S> <C> <C> <C> <C>
September 30, 1995:
- -------------------
Loans, net of
unearned income $548,295 $25,868 $ 73,364 $647,527
Deposits 613,222 54,835 88,950 756,162
Assets 771,547 63,823 108,717 939,859
December 31, 1994:
- ------------------
Loans, net of
unearned income $483,592 $22,551 $ 68,874 $575,018
Deposits 615,968 57,596 90,948 764,451
Assets 731,764 64,680 110,103 906,506
September 30, 1994:
- -------------------
Loans, net of
unearned income $478,673 $22,271 $ 65,842 $566,786
Deposits 595,312 59,370 91,794 746,414
Assets 724,010 66,637 111,202 901,764
Nine months ended
September 30, 1995:
-------------------
Interest income $43,299 $3,214 $6,039 $52,482
Interest expense 17,755 1,516 3,513 22,715
Net interest income 25,544 1,698 2,525 29,767
Provision for
loan loss 101 (4) 18 115
Net income 8,454 424 870 9,725
Earnings per share 2.30 44.24 1.90 2.19
Nine months ended
September 30, 1994:
-------------------
Interest income $36,241 $3,037 $5,562 $44,840
Interest expense 13,535 1,347 3,293 18,175
Net interest income 22,706 1,690 2,269 26,665
Provision for
loan loss (37) - 18 (19)
Net income 6,786 331 477 7,594
Earnings per share 1.83 34.48 1.09 1.70
</TABLE>
8
<PAGE>
NATIONAL CITY BANCSHARES, INC. and Subsidiaries
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
NET INCOME
Net income for the quarter ended September 30, 1995, was $3,644,000,
or $0.81 per share, compared to $2,889,000, or $0.65 per share, for
the third quarter of 1994. This is an increase of $755,000, or 26.1
percent, in net income. For the first nine months of 1995, net income
was $9,725,000, or $2.19 per share, compared to $7,594,000, or $1.70
per share, for the first nine months of 1994, an increase of
$2,131,000, or 28.1 percent in net income. The weighted average
number of shares outstanding was 4,475,089 and 4,439,425 for the three
and nine months, respectively, ended September 30, 1995, compared to
4,434,991 and 4,465,982 during the like periods last year. Stock has
been repurchased by the Corporation for the dividend reinvestment
program and during 1994 for the stock repurchase program approved
March 15, 1994.
NET INTEREST INCOME
Net interest income in the third quarter of 1995 increased $933,000,
or 9.6 percent, on a tax equivalent basis, from the year-ago quarter.
For the first nine months of 1995, net interest income increased
$3,150,000, or 11.4 percent, on a tax equivalent basis, from the same
period last year. Average earning assets were $891 million and $838
million, an increase of $53 million, or 6.3 percent, during the third
quarters of 1995 and 1994, respectively. For the first nine months of
1995 and 1994, average earning assets were $864 million and $835
million, respectively. Average federal funds sold increased $7
million, or 140.0 percent, for the quarter. Average interest-bearing
deposits in banks decreased $10 million or 50.0 percent for the
quarter. Loans increased an average of $87 million, or 15.8 percent,
for the quarter.
The increased net interest income was due to a change in the mix of
average earning assets. Total interest income increased $7,240,000,
or 15.8 percent, on a tax equivalent basis, during the first nine
months of 1995 from the same period of 1994, compared to a $4,540,000,
or 25.0 percent increase in total interest expense. The increase in
interest income resulted from higher rates of interest earned and a
change in the mix and total of average earning assets.
The net interest margin increased to 4.74 percent for the third
quarter of 1995, compared to 4.60 percent during the year-ago quarter
and to 4.78 percent for the first nine months of 1995 from 4.44
percent during the same period last year.
9
<PAGE>
UNDERPERFORMING ASSETS
Listed below is a two-year comparison of the underperforming assets.
<TABLE>
<CAPTION>
9/30/95 9/30/94
---------- ----------
<S> <C> <C>
Nonaccrual loans $1,273,000 $1,400,000
Restructured loans 146,000 233,000
90 days past due loans 622,000 727,000
---------- ----------
Total underperforming loans 2,041,000 2,360,000
Other real estate held 439,000 948,000
---------- ----------
Total underperforming assets $2,480,000 $3,308,000
---------- ----------
---------- ----------
</TABLE>
Past due 90 days or more, nonaccrual, and renegotiated loans have
decreased from 0.4 percent of total loans at September 30, 1994, to
0.3 percent as of September 30, 1995. Of the loans in this category,
60.5 and 70.3 percent were secured by real estate at September 30,
1995 and 1994, respectively. Potential problem loans, other than
underperforming loans, amounted to $26,326,000 at September 30, 1995
and $22,913,000 at September 30, 1994.
ALLOWANCE FOR LOAN LOSSES
Net recoveries amounted to $26,000 during the third quarter of 1995
and $120,000 during the first nine months of 1995, compared to $23,000
and $117,000 in the year-earlier periods.
The provision for loan losses during the first nine months of 1995 was
$115,000, compared to a negative $19,000 from the comparable year-ago
period. The provision is based on the quarterly review of the
allowance for possible loan losses. Some of the factors used in this
review include current economic conditions and forecasts, risk by type
of loan, previous loan loss experience, and evaluation of specific
borrowers and collateral. As of September 30, 1995, management
considered the allowance for loan losses adequate to provide for
potential losses.
NONINTEREST INCOME
Noninterest income for the third quarter of 1995 increased $326,000,
or 22.4 percent, and for the first nine months of 1995 increased
$1,076,000, or 27.2 percent from the year-ago periods. Trust income
increased $254,000 or 28.4 percent, and service charges on deposit
accounts increased $368,000, or 22.5 percent, from the year ago period
due to changes in fee schedules. Net security gains were $25,000 for
the first nine months of 1995, compared to net security losses of
$176,000 for the same period 1994. The losses in 1994 were mainly due
to a permanent write-down on an interest-only bond. Other noninterest
income increased $253,000, or 15.8 percent, during 1995. This
increase was mainly due to a $206,000 gain on the sale of a branch of
The National City Bank of Evansville and a refund from prior years'
Indiana Franchise tax in the amount of $115,000.
10
<PAGE>
NONINTEREST EXPENSE
Noninterest expense decreased $17,000, or 0.3 percent and increased
$503,000 or 2.6 percent in the third quarter and the first nine months
of 1995, respectively. Salaries and employee benefits increased
$474,000, or 13.4 percent for the third quarter and $752,000, or 7.2
percent for the first nine months of 1995. Expenses of premises and
equipment decreased $15,000, or 1.6 percent for the third quarter and
$107,000, or 3.7 percent, during 1995. The cost of Federal Deposit
Insurance decreased $422,000, or 99.3 percent, for the quarter and
$432,000, or 32.8 percent for the first nine months of 1995. This is
due to a $431,000 refund from the FDIC. Other items in this category
increased $290,000, or 6.3 percent, primarily due to acquisition
expenses.
FINANCIAL POSITION ANALYSIS
Cash and due from banks decreased $3,408,000, or 10.9 percent, and
interest-bearing deposits in banks decreased $9,575,000, or 58.1
percent, during the past year. Short-term money market investments
increased $819,000, or 92.9 percent, and federal funds sold decreased
$500,000, or 21.3 percent.
Securities decreased $33,101,000, or 12.8 percent, during the past
year. The largest decrease was in U.S. Government Agencies which
decreased $24,138,000, or 17.3 percent. U.S. Treasury securities
decreased $8,455,000, or 17.4 percent. Corporate and mortgage-backed
securities decreased $3,717,000, or 14.5 percent, and nontaxable
municipals decreased $376,000, or 0.9 percent. Increases were noted
in taxable municipals, of $470,000, or 18.5 percent, and in equity
securities of $669,000, or 18.2 percent. The increase in equity
securities was primarily due to the purchase of $653,000 of stock in
the Federal Home Loan Bank. The market value adjustment on securities
available for sale increased $2,446,000, or 93.5 percent. Amortized
cost and fair values of securities with dollar amounts in thousands
are on the following page:
11
<PAGE>
Securities held to maturity:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- --------
<S> <C> <C> <C> <C>
U. S. Government and
agency securities $ 30,909 $ 338 $162 $ 31,085
State and municipal
securities:
Taxable 3,015 86 20 3,081
Nontaxable 41,908 2,010 34 43,884
Corporate securities 15,955 172 102 16,025
Mortgage-backed
securities 19,661 217 81 19,797
-------- ------ ---- --------
$111,448 $2,823 $399 $113,872
-------- ------ ---- --------
-------- ------ ---- --------
</TABLE>
Securities available for sale:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- --------
<S> <C> <C> <C> <C>
U.S. Government and
agency securities $ 70,140 $553 $218 $ 70,475
Corporate securities 5,655 4 7 5,652
Mortgage-backed
securities 35,014 115 472 34,657
-------- ---- ---- --------
110,809 672 697 110,784
Equity securities 4,349 - 146 4,203
-------- ---- ---- --------
$115,158 $672 $843 $114,987
-------- ---- ---- --------
-------- ---- ---- --------
</TABLE>
At September 30, 1995, the security portfolio included $8,262,000 in
structured notes, which were comprised of $3,860,000 in multi-coupon
step-up notes that have a price volatility comparable to a callable
U.S. Government agency of like maturity; $3,502,000 in capped floating
rate notes; $600,000 in delevered floating notes; and a $300,000
ratchet capped floater. These securities have risk characteristics
which are well within the constraints of the non-structured securities
held in the security portfolio.
During the second quarter of 1995, the Corporation transferred
$635,000 of securities classified as held to maturity to the available
for sale category. These securities were rated as high-risk; and in
accordance with the Federal Financial Institutions Examination
Council, were redesignated as available for sale. The unrealized loss
on these securities at the time of transfer was $42,000. In
accordance with the requirements of Statement of Financial Accounting
Standards No. 115, these securities are now accounted for at fair
value, and any unrealized gain or loss net of deferred tax effect is
reflected as a separate component of shareholders' equity.
12
<PAGE>
As part of its strategic plan, the Corporation successfully increased
total loans while maintaining high credit standards and competitive
rates. Loans increased $80,741,000, or 14.2 percent, during the past
year. All types of loans increased with the largest increase being in
commercial loans which increased $34,793,000, or 32.9 percent. Loans
secured by real estate increased $27,606,000, or 8.9 percent; and
consumer loans increased $24,754,000, or 26.0 percent. Lease
financing increased to $6,447,000 up from $437,000 at September 30,
1994; and agricultural loans increased $1,495,000, or 5.1 percent.
All other loans, decreased $13,917,000, or 56.0 percent.
Other real estate owned decreased $509,000, or 53.7 percent, from
September 30, 1994.
Total deposits have increased $9,748,000, or 1.3 percent, since
September 30, 1994. Interest-bearing deposits increased $7,507,000,
or 1.1 percent, during the past year, while noninterest-bearing
deposits increased $2,241,000, or 2.7 percent.
SHAREHOLDERS' EQUITY
The Corporation and each subsidiary have capital ratios which
substantially exceed all regulatory requirements. The Corporation's
capital ratios are shown below.
<TABLE>
<CAPTION>
Minimum
Requirements 9/30/95 9/30/94
------------ ------- -------
<S> <C> <C> <C>
Tier I capital to
risk-based assets 4.00% 17.40% 16.74%
Total capital to
risk-based assets 8.00% 18.20% 17.56%
Tangible equity to
tangible assets 3.00% 12.17% 11.53%
</TABLE>
13
<PAGE>
NATIONAL CITY BANCSHARES, INC. and Subsidiaries
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits -
NONE
(b) Reports on Form 8-K -
CURRENT REPORT dated July 7, 1995, for events of
June 29, 1995, regarding the acquisition of First
National Bank of Paoli, in Paoli, Indiana and White
County Bank, Carmi, Illinois, on June 30, 1995.
CURRENT REPORT dated September 5, 1995, for event
of August 31, 1995, regarding the acquisition of
United Financial Bancorp, Inc., in Vincennes, Indiana.
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.
NATIONAL CITY BANCSHARES, INC
(Registrant)
By /S/ HAROLD A. MANN
Harold A. Mann
Secretary and Treasurer
(On behalf of the registrant
and in his capacity as Chief
Accounting Officer.)
November 14, 1995
14
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 29638
<INT-BEARING-DEPOSITS> 6904
<FED-FUNDS-SOLD> 1850
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 114987
<INVESTMENTS-CARRYING> 111448
<INVESTMENTS-MARKET> 113872
<LOANS> 647527
<ALLOWANCE> 5274
<TOTAL-ASSETS> 939859
<DEPOSITS> 756162
<SHORT-TERM> 38240
<LIABILITIES-OTHER> 8839
<LONG-TERM> 19829
<COMMON> 4475
0
0
<OTHER-SE> 112314
<TOTAL-LIABILITIES-AND-EQUITY> 939859
<INTEREST-LOAN> 40974
<INTEREST-INVEST> 10607
<INTEREST-OTHER> 901
<INTEREST-TOTAL> 52482
<INTEREST-DEPOSIT> 21291
<INTEREST-EXPENSE> 1424
<INTEREST-INCOME-NET> 29767
<LOAN-LOSSES> 115
<SECURITIES-GAINS> 25
<EXPENSE-OTHER> 19690
<INCOME-PRETAX> 14991
<INCOME-PRE-EXTRAORDINARY> 14991
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9725
<EPS-PRIMARY> 2.19
<EPS-DILUTED> 2.19
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<RESTATED>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 41152
<INT-BEARING-DEPOSITS> 13008
<FED-FUNDS-SOLD> 3050
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 136360
<INVESTMENTS-CARRYING> 112300
<INVESTMENTS-MARKET> 96916
<LOANS> 575018
<ALLOWANCE> 4899
<TOTAL-ASSETS> 906506
<DEPOSITS> 764451
<SHORT-TERM> 27803
<LIABILITIES-OTHER> 6617
<LONG-TERM> 3000
<COMMON> 14730
0
0
<OTHER-SE> 89905
<TOTAL-LIABILITIES-AND-EQUITY> 906506
<INTEREST-LOAN> 45083
<INTEREST-INVEST> 14169
<INTEREST-OTHER> 1516
<INTEREST-TOTAL> 60768
<INTEREST-DEPOSIT> 23650
<INTEREST-EXPENSE> 1110
<INTEREST-INCOME-NET> 36008
<LOAN-LOSSES> 18
<SECURITIES-GAINS> (470)
<EXPENSE-OTHER> 26101
<INCOME-PRETAX> 14834
<INCOME-PRE-EXTRAORDINARY> 14834
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9679
<EPS-PRIMARY> 2.17
<EPS-DILUTED> 2.17
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
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<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<RESTATED>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 32227
<INT-BEARING-DEPOSITS> 16479
<FED-FUNDS-SOLD> 2350
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 150529
<INVESTMENTS-CARRYING> 109007
<INVESTMENTS-MARKET> 94761
<LOANS> 566786
<ALLOWANCE> 4855
<TOTAL-ASSETS> 901741
<DEPOSITS> 746414
<SHORT-TERM> 41050
<LIABILITIES-OTHER> 6215
<LONG-TERM> 3000
<COMMON> 14762
0
0
<OTHER-SE> 90300
<TOTAL-LIABILITIES-AND-EQUITY> 901741
<INTEREST-LOAN> 32983
<INTEREST-INVEST> 10608
<INTEREST-OTHER> 1249
<INTEREST-TOTAL> 44840
<INTEREST-DEPOSIT> 17456
<INTEREST-EXPENSE> 719
<INTEREST-INCOME-NET> 26665
<LOAN-LOSSES> (19)
<SECURITIES-GAINS> (176)
<EXPENSE-OTHER> 19187
<INCOME-PRETAX> 11450
<INCOME-PRE-EXTRAORDINARY> 11450
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7594
<EPS-PRIMARY> 1.70
<EPS-DILUTED> 1.70
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
