<PAGE> 1
PROSPECTUS
1,500,000 SHARES
F&M BANCORPORATION, INC.
COMMON STOCK
This Prospectus (the "Prospectus") covers the offer and sale of up to
1,500,000 shares of Common Stock, par value $1.00 per share (the "F&M Common"),
of F&M Bancorporation, Inc. ("F&M" or the "Company"), which F&M may issue from
time to time in connection with future acquisitions of other businesses, or
securities of other businesses, in business combination transactions in
accordance with Rule 415(a)(1)(viii) of Regulation C under the Securities Act
of 1933, as amended (the "Securities Act") or as otherwise permitted under the
Securities Act.
The Company expects that the terms upon which it may issue the shares
in business combination transactions will be determined through negotiations
with the boards of directors, principal owners and/or other representatives of
the businesses to be acquired. It is expected that the shares of F&M Common
that are issuable will be valued at prices reasonably related to the market
prices for F&M Common prevailing at either the time an acquisition agreement is
executed or at the time an acquisition is consummated. On October 16, 1996,
the last reported sales price of F&M Common on The NASDAQ Stock Market
("NASDAQ") was $30.75 per share.
This Prospectus will be used only in connection with business
acquisitions. The Prospectus may be used in connection with business
combination transactions which would be exempt from registration but for the
issuance of F&M Common and the possibility of integration with other
transactions; in such case, no supplement may be required. If an acquisition
of a business or securities in a business combination transaction is not exempt
from registration even if integration is not taken into account, then the
offerees of F&M Common in such acquisition will be furnished with copies of
this Prospectus either (i) together with a Supplement, which will reflect the
registration statement as amended by a post-effective amendment to the
registration statement on Form S-4 which this Prospectus is a part or (ii) if
permitted, as supplemented by the incorporation by reference of information
contained in a current report on Form 8-K filed by F&M.
SEE "RISK FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF CERTAIN
FACTORS WHICH SHOULD BE CONSIDERED BY PROSPECTIVE ACQUIRORS OF THE F&M COMMON
OFFERED HEREBY.
The date of this Prospectus is October 17, 1996.
_____________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE> 2
AVAILABLE INFORMATION
F&M is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The reports, proxy
statements and other information filed by F&M with the Commission can be
inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Commission's Regional Offices at 7 World Trade Center, New York, New York
10048 and Citicorp Center, 500 West Madison Street, Chicago, Illinois 60661.
Copies of such material can also be obtained from the Public Reference Section
of the Commission, Washington, D.C. 20549 at prescribed rates. Also, the
Commission maintains a Web site (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding registrants
(such as F&M) that file electronically with the Commission. In addition,
because F&M Common is traded on the NASDAQ Stock Market, material filed by F&M
can be inspected at the offices of National Association of Securities Dealers,
Inc., 1735 K Street N.W., Washington, D.C. 20006.
F&M has filed with the Commission a Registration Statement on Form S-4
(together with any amendments thereto, the "Registration Statement") under the
Securities Act with respect to the securities to be issued pursuant to or as
contemplated by the Agreement. This Prospectus does not contain all the
information set forth in the Registration Statement. Such additional
information may be obtained at the addresses set forth above. Statements
contained in this Prospectus or in any document incorporated in this Prospectus
by reference as to the contents of any contract or other document referred to
herein or therein are not necessarily complete, and in each instance reference
is made to the copy of such contract or other document filed as an exhibit to
the Registration Statement or such other document, each such statement being
qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
This Prospectus incorporates by reference certain documents of F&M
that are not presented herein or delivered herewith. Such documents (other
than exhibits to such documents unless such exhibits are specifically
incorporated by reference) will be provided without charge to each person,
including any beneficial owner, to whom a Prospectus is delivered, upon written
or oral request of such person. Requests should be directed to F&M
Bancorporation, Inc., One Bank Avenue, Kaukauna, Wisconsin 54130 (telephone
414/766-1717), Attn: Corporate Secretary.
The following documents filed with the Commission by F&M pursuant to
the Exchange Act are incorporated by reference in this Prospectus:
(i) F&M's Annual Report on Form 10-K for the year ended December
31, 1995, as amended by Amendment No. 1 thereto;
(ii) F&M's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1996 and June 30, 1996;
(iii) F&M's Current Reports on Form 8-K dated February 5, 1996 and
June 28, 1996, and Reports on Form 10-C dated June 14, 1996
and June 28, 1996;
(iv) The financial statements of F&M Bank-Algoma (f/k/a Community
State Bank) located at pages F-27 through F-50 of the
Prospectus dated April 25, 1996, forming part of Registration
Statement No. 333-02207, as amended; and
(v) The description of F&M Common included in Item 11 to F&M's
Registration Statement on Form 10, as amended by
Post-Effective Amendment No. 2 thereto filed September 16,
1993.
All reports and definitive proxy or information statements filed by
F&M pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus shall be deemed to be incorporated by
reference into this Prospectus from the date of the filings of such documents.
Any statement contained in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this Prospectus to
the extent that a statement contained herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
-2-
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page No.
<S> <C>
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
F&M MARKET INFORMATION AND DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
F&M SUMMARY FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
F&M BANCORPORATION, INC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
INFORMATION AS TO F&M COMMON . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
PLAN OF DISTRIBUTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
LEGAL OPINIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
PROCEDURE FOR SUBMITTING SHAREHOLDER PROPOSALS . . . . . . . . . . . . . . . . . . . . . . . . . 15
</TABLE>
________________
NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION
WITH THE SOLICITATIONS OF PROXIES OR THE OFFERING OF SECURITIES MADE HEREBY
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY F&M, OR ANY OTHER PERSON. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY DISTRIBUTION OF SECURITIES MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF F&M SINCE THE DATE HEREOF OR THAT THE INFORMATION
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
-3-
<PAGE> 4
SUMMARY
The following is a brief summary of certain information contained in
this Prospectus, including summaries of information believed by the parties to
be material. This summary is intended merely to supply pertinent facts and
highlights of the material contained in or accompanying this Prospectus. The
information contained in this summary is qualified by reference to more
detailed information contained elsewhere, or incorporated by reference, in this
Prospectus.
Unless otherwise indicated, all financial and other data per share of
F&M Common, and all data with respect to such shares, in this Prospectus have
been restated to give retroactive effect to F&M's 10% stock dividend which was
paid in June 1996.
F&M Bancorporation, Inc.
F&M, which has its principal executive offices at One Bank Avenue,
Kaukauna, Wisconsin 54130 (telephone: 414/766-1717), had total consolidated
assets of $1.1 billion at June 30, 1996. F&M has 15 Wisconsin state bank
subsidiaries, all of which are FDIC members and are subject to Wisconsin
Division of Banking supervision, with 48 offices, all in Wisconsin. All but
one of the F&M Banks is a member of the Federal Reserve System, and the
remaining bank is in the process of becoming a member. F&M, a Wisconsin
corporation, is a registered bank holding company subject to supervision and
regulation by the Federal Reserve Board ("FRB") under the federal Bank Holding
Company Act of 1956, as amended.
See "F&M Bancorporation, Inc."
Further information regarding F&M, including audited financial
statements, is included in the reports filed with the Securities and Exchange
Commission which are incorporated herein by reference. Offerees may obtain
copies of such documents from the Commission or by request to F&M. See
"Available Information" and "Incorporation of Certain Documents by Reference."
F&M Common
Shares of F&M Common are traded on The NASDAQ Stock Market under the
symbol "FMBK." See "F&M Market Information and Dividends."
F&M is organized under the Wisconsin Business Corporation Law
("WBCL"), which determines the rights of holders of F&M Common, except as
otherwise provided in F&M's Articles of Incorporation. Among other things,
F&M is subject to statutory anti-takeover provisions and its Articles of
Incorporation provide for the classification of its board of directors. In
addition, F&M (and all other corporations incorporated or qualified to do
business in Wisconsin), shareholders are subject to statutory personal
liability for certain employee compensation claims. See "Information as to
F&M Securities."
Method of Distribution
The shares of F&M Common to be offered hereunder will be offered in
business combination transactions. See "Plan of Distribution."
-4-
<PAGE> 5
RISK FACTORS
In evaluating a transaction with F&M, the shareholders of an entity
being acquired should consider carefully the following factors, along with the
other information contained, or incorporated by reference, in this Prospectus,
and any Supplement thereto.
Acquisitions
Since its inception, F&M has experienced substantial growth through
acquisitions of other financial institutions. F&M's strategy to continue to
make acquisitions is dependent upon its ability to identify potential targets
for acquisition and consummate transactions on terms acceptable to F&M.
Also, F&M's future success is dependent in part upon its ability to
integrate the operations of, and manage over time, acquired financial
institutions. F&M has acquired eight financial institutions or offices within
the past four years, including two acquisitions in 1994, one in 1995,
and four in the first half of 1996. The two 1994 acquisitions were the
largest acquisitions undertaken by F&M in terms of the consideration paid and
the size of the acquired institution, respectively. The 1995 acquisition was
F&M's second largest acquisition in both categories. To date in 1996, F&M has
consummated four acquisitions, and announced two others.
Competition
Banks, including the F&M's subsidiary banks (the "F&M Banks") and the
banks proposed to be acquired (together, the "Banks"), actively compete with
other financial institutions and businesses in both attracting and retaining
deposits and making loans. Financial institution competitors include banks,
savings banks, savings and loan associations and credit unions. Other business
competitors include insurance companies, securities brokerage firms, trust
companies and investment management firms. While F&M believes it has a
competitive advantage because 24 of its 48 bank office locations represent the
only commercial bank office in their community, competition with other
financial institutions and businesses can affect the Banks' ability to obtain
and retain customers as well as the pricing levels of their products and
services.
F&M also faces competition in seeking institutions to acquire.
Wisconsin has recently experienced a significant consolidation of its banking
industry, and many large holding companies with greater resources than F&M
(including several out-of-state holding companies) are actively pursuing
acquisitions in Wisconsin. This competition affects the available acquisition
opportunities for F&M and can affect the costs of such acquisitions.
Need for Technological Change
The banking industry is undergoing rapid technological changes with
frequent introductions of new technology-driven products and services. In
addition to better serving customers, the effective use of technology increases
efficiency and enables financial institutions to reduce costs. While F&M's
community banking strategy stresses "traditional" personal service, F&M's
future success will depend in part on its ability to address the needs of its
customers by using technology to provide products and services that will
satisfy customer demands for convenience as well as to create additional
efficiencies in F&M's Banks operations. Many of F&M's competitors have
substantially greater resources to invest in technological improvements.
Banking Industry
The banking industry is highly regulated by both federal and state
regulatory authorities. Regulation includes, among other things, capital
reserve requirements, dividend limitations, limitations on products and
-5-
<PAGE> 6
services offered, geographical limits, consumer credit regulations, community
investment requirements and restrictions on transactions with affiliated
parties. Financial institution regulation has been the subject of significant
legislation in recent years, may be the subject of further significant
legislation in the future, and is not within the control of F&M. This
regulation substantially affects the business and financial results of all
financial institutions and holding companies, including F&M and the Banks.
F&M, as a member of the banking industry, is affected by general
economic conditions, particularly as those conditions affect the Wisconsin
communities served by the F&M Banks. A financial institution's earnings also
depend to a large extent upon the relationship between the cost of funds
(primarily deposits) and the yield on earning assets (loans and investments).
This relationship, known as the interest rate margin, is subject to fluctuation
and is affected by regulatory, economic and competitive factors which influence
interest rates, the volume and rate of interest on interest-earning assets and
interest-bearing liabilities, and the level of non-performing assets.
Dependence on Chief Executive Officer
F&M has historically been highly dependent on the services of its
Chairman and Chief Executive Officer, Gail E. Janssen. F&M does not have an
employment agreement with Mr. Janssen or maintain "key person" life insurance
on Mr. Janssen. F&M has recently taken actions to reorganize operations on a
regional basis and to augment its corporate staff to help support F&M's
substantial growth, to place less dependence on any one individual, and to
anticipate management succession. As part of these actions, F&M employed Gary
A. Lichtenberg as its President and Chief Operating Officer in April 1996.
Cautionary Statement Regarding Forward-Looking Statements
The discussions in this Prospectus, and any Supplement thereto,
contain forward-looking statements that involve risks and uncertainties. F&M's
actual future results could materially differ from those discussed. Factors
that could cause or contribute to such differences include, but are not limited
to, those discussed above in "Risk Factors" and in F&M's Management's
Discussion and Analysis, as well as those discussed elsewhere in this
Prospectus and the documents incorporated herein by reference.
-6-
<PAGE> 7
F&M MARKET INFORMATION AND DIVIDENDS
F&M Common trades on The NASDAQ Stock Market ("NASDAQ") under the
symbol "FMBK". F&M had approximately 2,745 shareholders of record at September
30, 1996. The following table summarizes high and low prices and cash
dividends paid for F&M Common for the periods indicated. The high and low
prices represent actual trade prices as reported on NASDAQ.
<TABLE>
<CAPTION>
CALENDAR CASH DIVIDENDS
PERIOD HIGH LOW PAID PER SHARE
- ------------------------------ ---- --- --------------
<S> <C> <C> <C> <C>
1994 1st quarter 18.64 16.14 .109
2nd quarter 21.59 17.95 .109
3rd quarter 21.14 18.86 .109
4th quarter 20.91 19.09 .109
1995 1st quarter 20.00 18.64 .136
2nd quarter 20.00 17.95 .136
3rd quarter 22.73 18.53 .136
4th quarter 25.00 21.59 .136
1996 1st quarter 25.91 22.05 .164
2nd quarter 31.50 24.55 .164
3rd quarter 31.50 28.25 .17
4th quarter 31.50 30.75
(through October 16)
</TABLE>
According to information provided by NASDAQ (as adjusted for the
subsequent stock 10% dividend), the trading volume of F&M Common on NASDAQ was
874,903 shares during 1995, and 670,950 shares during 1994.
F&M has paid quarterly or annual cash dividends since its inception.
The holders of F&M Common are entitled to receive such dividends as are
declared by the board of directors of F&M, which considers (and may change)
payment of dividends quarterly. The ability of F&M to pay dividends is
dependent upon the receipt of dividends from the F&M Banks, payment of which is
subject to regulatory restrictions. In determining cash dividends, the board
of directors of F&M considers the earnings, capital requirements, debt
servicing requirements, financial ratio guidelines issued by the FRB and other
banking regulators, financial condition of F&M and the F&M Banks, and other
relevant factors. See Note 15 of Notes to F&M's Consolidated Financial
Statements and the discussion under "Management's Discussion and Analysis of
Results of Operations and Financial Condition--Financial Condition--Capital
Adequacy," incorporated herein by reference, for restrictions on the ability of
the F&M Banks to pay dividends.
-7-
<PAGE> 8
F&M SUMMARY FINANCIAL DATA
The summary financial data presented below for F&M Bancorporation,
Inc. for each of the years in the three year period ended December 31, 1995 are
derived from the Consolidated Financial Statements of F&M (restated as
described in the footnotes below) and should be read in conjunction with other
financial information incorporated by reference in this Prospectus, such as the
separate Consolidated Financial Statements and notes thereto of F&M, and
Management's Discussion and Analysis of Results of Operations and Financial
Condition.
<TABLE>
<CAPTION>
Six Months ended
June 30, Years ended December 31,
-------------------- -------------------------------------
1996 1995 1995 1994 1993
---- ---- -------- -------- --------
(unaudited; dollars in thousands, except per share data)
<S> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS (1)
Interest income $ 41,812 $ 36,479 $ 76,091 $ 63,942 $ 61,302
Interest expense 18,731 16,051 33,807 25,074 25,164
---------- -------- -------- -------- --------
Net interest income 23,081 20,428 42,284 38,868 36,138
Provision for loan losses 820 635 1,653 1,338 1,329
Non-interest income 2,641 2,227 4,649 4,112 5,286
Net income before cumulative
effect of change in
accounting principle (2) 6,978 5,428 11,987 8,425 8,827
Net income 6,978 5,428 11,987 8,425 8,899
Net income applicable to
common stock 6,978 5,428 11,987 8,403 8,713
PERIOD END BALANCE SHEET DATA(1)
Total assets $1,097,227 $962,068 $996,278 $921,384 $877,964
Net loans 789,514 684,704 691,123 642,136 553,291
Total deposits 946,362 822,790 866,712 805,431 768,144
Short-term borrowings 39,070 20,589 12,194 19,846 5,844
Other borrowings 2,333 20,866 10,833 6,366 13,941
Preferred stock 0 0 0 0 2,073
Total shareholders' equity 99,445 88,680 94,067 82,931 82,866
PER SHARE DATA (1)(3)
Net income per common share
before cumulative effect of
change in accounting principle (2) $1.00 $ .80 $1.76 $1.23 $1.33
Net income per common share 1.00 .80 1.76 1.23 1.35
Cash dividends (4) .327 .273 .546 .436 .327
- ------------------
</TABLE>
(1) Includes the results of operations of Bradley Bank from its
acquisition in May 1996. Except as indicated, the data have been
restated to reflect F&M's acquisition of F&M Bank-Portage County in
1993, F&M Bank-Northeast (including both the First National and Pulaski
acquisitions) in 1994, F&M Bank-Waushara County in 1995 and F&M
Bank-Algoma in 1996 using the pooling of interests method of
accounting. See Note 3 of Notes to F&M's Consolidated Financial
Statements incorporated herein by reference. The data prior to
January 1, 1996 have not been restated to reflect F&M's acquisition of
Monycor in February 1996 because that acquisition did not have a
material effect on F&M's results of operations or financial condition.
(2) Cumulative effect of change in accounting principle in 1993 represents
the adoption of SFAS No. 109 (Accounting for Income Taxes) by a bank
subsequently acquired by F&M.
(3) Per share information has been restated to reflect the 10% stock
dividend paid to stockholders on June 10, 1996.
(4) Cash dividends per share are not restated to reflect the acquisitions
accounted for using the pooling of interests method of accounting.
RECENT FINANCIAL PERFORMANCE
As of the date of this Prospectus, all of the financial statements and
related statistical information for F&M as of, and for the periods ended,
September 30, 1996 were not available. However, certain F&M financial data
have been released to the public.
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
1996 1995(1) 1996(1) 1995(1)
---- ---- ---- ----
(Unaudited; in thousands, except per share data)
<S> <C> <C> <C> <C>
Total interest income $22,087 $19,674 $63,899 $56,153
Total interest expense 10,051 8,839 28,781 24,890
Net interest income 12,036 10,835 35,118 31,263
Provision for loan losses 469 492 1,289 1,127
Net income 3,703 3,249 10,680 8,676
Net income per common share .53 .48 1.53 1.28
</TABLE>
<TABLE>
<CAPTION>
At September 30, 1996
---------------------
(Unaudited; in thousands,
except per share data)
<S> <C>
Total assets $1,130,742
Total loans 830,021
Allowance for loan losses 10,243
Net loans 819,778
Total deposits 971,279
Short-term borrowings 37,960
Other borrowings 9,217
Total stockholders' equity 101,977
Book value per common share $14.61
</TABLE>
- ------------------
(1) See footnotes (1) and (3) on previous page.
-8-
<PAGE> 9
F&M BANCORPORATION, INC.
F&M Bancorporation, Inc. was formed in 1980 to acquire the shares of
Farmers and Merchants Bank of Kaukauna, Wisconsin (now known as F&M
Bank-Kaukauna). F&M has grown internally and through acquisitions from a
one-bank holding company with total assets of $37 million at its inception to a
15-bank holding company with 48 banking offices, and total assets of $1.1
billion, at June 30, 1996.
At June 30, 1996, F&M's subsidiary banks (the "F&M Banks") ranged in
size from $28 million to $245 million in total assets. The F&M Banks are
community banks which provide a full range of services to consumers and
businesses in small and medium-sized communities throughout Wisconsin. F&M
provides the benefits of holding company affiliation while allowing the F&M
Banks to operate with considerable autonomy.
Pending Acquisitions
Brodhead Acquisition. In August 1996, F&M announced the proposed
acquisition of Green County Bank ("GCB"), with one office in Brodhead in
south-central Wisconsin. In the proposed acquisition, F&M has offered to
acquire GCB in exchange for shares of F&M Common. The total number of shares
of F&M Common would be in a formula amount to be set forth in the definitive
agreement to be executed pursuant to the letter of intent; the total value of
those shares is expected to be approximately $5.1 million. F&M intends to
account for the transaction using the pooling of interests method of
accounting. The acquisition remains subject to execution of a definitive
agreement, GCB shareholder approval, regulatory approvals, and other customary
conditions. While there can be no assurances, F&M expects that the GCB
transaction will be consummated in early 1997.
At June 30, 1996, GCB had total assets of $30.7 million, net loans of
$22.5 million, total deposits of $27.3 million and shareholders' equity of $3.2
million. For the year ended December 31, 1995, GCB had net income of $332,000,
and for the six months ended June 30, 1996, GCB had net income of $177,000.
East Troy Acquisition. In August 1996, F&M announced its pending
acquisition of East Troy Bancshares, Inc. ("ETB"). ETB owns all of the shares
of State Bank of East Troy, with one office in East Troy in south-east
Wisconsin. The agreement with ETB provides that the acquisition of ETB will be
made in exchange for 440,000 shares of F&M Common. F&M intends to account for
the transaction using the pooling of interests method of accounting. The
acquisition remains subject to ETB shareholder approval, regulatory approvals,
and other customary conditions. While there can be no assurances, F&M expects
that the ETB transaction will be consummated in early 1997.
At June 30, 1996, ETB had total assets of $54.1 million, net loans of
$42.4 million, total deposits of $44.7 million and shareholders' equity of $8.0
million. For the year ended December 31, 1995, ETB had net income of $693,000,
and for the six months ended June 30, 1996, ETB had net income of $371,000.
Prairie du Chien Acquisition. In October 1996, F&M announced the
proposed acquisition of Wisconsin Ban Corp. ("WBC"), the holding company of
Prairie City Bank ("PCB"). PCB, with its main office in Prairie du Chien, has
five offices in south-west Wisconsin. In the letter of intent relating to the
proposed acquisition, F&M has offered to acquire WBC in exchange for 535,000
shares of F&M Common. Also, outstanding WBC preferred stock will be redeemed
for approximately $320,000 in cash. F&M intends to account for the transaction
using the pooling of interests method of accounting. The acquisition remains
subject to execution of a definitive agreement, WBC shareholder approval,
regulatory approvals, and other customary conditions. While there can be no
assurances, F&M expects that the WBC transaction will be consummated in early
1997.
At June 30, 1996, WBC had total assets of $80.9 million, net loans of
$51.9 million, total deposits of $64.7 million and shareholders' equity of $7.9
million. For the year ended December 31, 1995, WBC had net income of $1.1
million, and for the six months ended June 30, 1996, WBC had net income of
$412,000.
Recent Developments
Algoma Acquisition. On June 28, 1996, F&M acquired Community State
Bank ("CSB") (which was subsequently renamed "F&M Bank-Algoma"). In the
transaction, CSB was merged with a wholly-owned subsidiary of F&M; the
outstanding shares of common stock of CSB were converted into 423,172 shares of
F&M Common ("F&M Common"), in a conversion ratio determined pursuant to a
formula set forth in the Agreement, and CSB became a wholly-owned subsidiary of
F&M.
-9-
<PAGE> 10
At December 31, 1995, CSB had total assets of $53.2 million, net loans
of $20.0 million, total deposits of $44.5 million, and shareholders' equity of
$8.2 million. For the fiscal year ended December 31, 1995, CSB had net income
of $629,000. F&M is accounting for the CSB acquisition using the pooling of
interests method of accounting.
Tomahawk Acquisition. On May 10, 1996, F&M acquired Bradley Bank
("Bradley") from its holding company and minority shareholders. Bradley had
two full service offices in Tomahawk, Wisconsin which became branches of F&M
Bank-Lakeland through a merger of Bradley into F&M Bank-Lakeland. The Bradley
acquisition was made for approximately $6.6 million in cash.
At December 31, 1995, Bradley had total assets of $36.1 million, net
loans of $25.5 million, total deposits of $32.6 million and shareholders'
equity of $3.3 million. For the year ended December 31, 1995, Bradley had net
income of $505,000. The Bradley acquisition has been accounted for using the
purchase method of accounting, which means that its assets, liabilities and
financial results are reflected only from and after the date of acquisition.
Little Chute Acquisition. On April 26, 1996, F&M acquired the Little
Chute branch office of TCF Bank Wisconsin. The acquisition included purchase
of fixed assets and assumption of deposit liabilities by F&M Bank-Kaukauna.
The acquisition was a cash transaction, in which F&M purchased the fixed assets
of the Little Chute branch, and was reimbursed in cash (reduced by an
agreed-upon premium) by TCF for the assumption of deposits. At April 26, 1996,
the TCF Little Chute branch office had total deposits of approximately $7.5
million.
Superior Acquisition. On February 5, 1996, F&M acquired Monycor
Bancshares, Inc. ("Monycor") which owned a 98.4% interest in Monycor Bank
(which was subsequently renamed "F&M Bank-Superior"). F&M Bank-Superior is a
Wisconsin state bank headquartered, with a single office, in Superior,
Wisconsin, in the northwestern corner of the state. In the Monycor
transaction, Monycor merged into a subsidiary of F&M, and outstanding shares of
Monycor Common Stock were converted into an aggregate of 157,563 shares of F&M
Common, valued for purposes of the transaction at $3.6 million. F&M
subsequently acquired the remaining minority interest in F&M Bank-Superior.
At December 31, 1995, Monycor had total assets of $29.5 million, net
loans of $18.4 million, total deposits of $26.4 million and shareholders'
equity of $1.7 million. For the fiscal year ended December 31, 1995, Monycor
had net income of $380,000. F&M is accounting for the Monycor transaction
using the pooling of interest method of accounting. However, because the
effect of the transaction on financial statements is not material, F&M is not
restating financial results prior to January 1, 1996 to reflect the Monycor
acquisition.
Additional Green Bay Location. In July 1996, F&M Bank-Northeast
opened a second full service Green Bay office as a de novo branch office.
-10-
<PAGE> 11
Subsidiary Banks
F&M owns 15 subsidiary banks (the "F&M Banks"), all of which are
Wisconsin state banks and members of the FDIC, and each of which (other than
F&M Bank-Algoma) is a member of the Federal Reserve System. The F&M Banks are
subject to the supervision and regulation of the FRB and the Division of
Banking of the Wisconsin Department of Financial Institutions. The F&M Banks
are community banks which provide a full range of services to consumers and
businesses in small and medium-sized communities throughout Wisconsin. F&M
provides the benefits of holding company affiliation while allowing the Banks
to operate with considerable autonomy.
The following table presents certain information as to the F&M Banks.
Each of the F&M Banks is wholly-owned by F&M.
<TABLE>
<CAPTION>
NO. OF FULL TOTAL
YEAR SERVICE OFFICES ASSETS
BANK ACQUIRED (1) AT 9/30/96 AT 6/30/96
---- ------------ -------------- ----------
(in millions)
<S> <C> <C> <C>
F&M Bank-Kaukauna 1980 4 $108.0
F&M Bank-Appleton 1981 3 55.2
F&M Bank-Hilbert 1983 3 28.0
F&M Bank-Winnebago County 1985 3 88.7
F&M Bank-New London 1987 1 31.0
F&M Bank-Portage County 1987 3 61.2
F&M Bank-Fennimore 1988 1 45.0
F&M Bank-Potosi 1988 2 30.6
F&M Bank-Lancaster 1990 1 40.0
F&M Bank-Lakeland 1991 7 137.0
F&M Bank-Kiel 1991 1 41.5
F&M Bank-Northeast 1994 11 244.8
F&M Bank-Waushara County 1995 5 98.7
F&M Bank-Superior 1996 1 30.3
F&M Bank-Algoma 1996 2 51.8
- ------------------
</TABLE>
(1) In the case of F&M Banks resulting from mergers, represents the date
F&M first acquired any of the constituent banks in those mergers.
F&M's network of community banks generally operates with significant
local autonomy, with general oversight and support from F&M. F&M believes this
autonomy allows the F&M Banks to better serve the customers in their respective
communities, and thus enhances the F&M Banks' business opportunities and
operations. After acquiring banks, F&M generally maintains local bank charters
and keeps intact existing management and boards of directors. Generally, F&M
Bank managements operate independently of F&M in selecting deposit products
developed by F&M and in making pricing and credit decisions. F&M maintains an
approval procedure for new loans above certain threshold amounts and provides
ongoing loan review and administration assistance and other services for the
F&M Banks. F&M encourages F&M Bank officers and employees to be active in
community groups and projects.
-11-
<PAGE> 12
INFORMATION AS TO F&M COMMON
The Restated Articles of Incorporation of F&M, as amended (the
"Articles"), provide that F&M has authority to issue 20,000,000 shares of
Common Stock, $1.00 par value ("F&M Common"). The outstanding shares of F&M
Common are, and the shares to be issued in the Merger will be, fully paid and
nonassessable, except for statutory liability of shareholders under Section
180.0622(2) (b) of the Wisconsin Business Corporation Law (the "WBCL"), as
judicially interpreted, for certain unpaid indebtedness to employees for
services rendered.
The holders of F&M Common are entitled to one vote for each share held
of record on each matter submitted to a vote of shareholders. Shareholders
have no cumulative voting rights, which means that the holders of shares
entitled to exercise more than 50% of the voting rights are able to elect all
of the directors. F&M's Articles and Bylaws provide for classification of the
board of directors into three classes, one class being subject to election in
each year, and directors serve three-year terms.
Dividends may be paid to holders of F&M Common when, as and if
declared by the board of directors out of funds legally available therefor,
subject to any contractual restrictions on the payment of dividends. In the
event of any liquidation, dissolution or winding-up of F&M, the holders of F&M
Common will be entitled to receive a pro rata share of the assets of F&M
remaining after payment or provision for payment of the debts and other
liabilities of F&M. The holders of F&M Common are not entitled to any
preemptive, subscription, redemption or conversion rights. See "Management's
Discussion and Analysis of Results of Operations and Financial
Condition--Financial Condition--Capital Adequacy" and Note 15 of Notes to F&M's
Consolidated Financial Statements (which are incorporated herein by reference)
for discussions of restrictions on F&M Banks' ability to pay dividends to F&M.
Certain Statutory Provisions
Except as may otherwise be provided by law, the requisite affirmative
vote of shareholders for certain corporate actions, including a merger or share
exchange with another corporation, sale of all or substantially all of the
corporate property and assets, or voluntary liquidation of F&M, is a majority
of all the votes entitled to be cast on the transaction by each voting group of
outstanding shares entitled to vote thereon. Sections 180.1130 through
180.1134 of the WBCL provide generally that, in addition to the vote otherwise
required by law or the articles of incorporation of an "issuing public
corporation" (defined to mean a corporation domiciled in Wisconsin with at
least 500 shareholders of record, including 100 shareholders of record who have
unlimited voting rights and are Wisconsin residents), certain "business
combinations" not meeting certain adequacy-of-price standards specified in the
statute must be approved by (a) the holders of at least 80% of the votes
entitled to be cast and (b) two-thirds of the votes entitled to be cast by the
corporation's outstanding voting shares owned by persons other than a
"significant shareholder" who is a party to the transaction or an affiliate or
associate thereof. Section 180.1130 defines "business combination" to include,
subject to certain exceptions, a merger or share exchange of the issuing public
corporation (or any subsidiary thereof) with or the sale or other disposition
of substantially all assets of the issuing public corporation to, any
significant shareholder or affiliate thereof. "Significant shareholder" is
defined generally to mean a person that is the beneficial owner of 10% or more
of the voting power of the outstanding voting shares of the issuing public
corporation. The statute also restricts the repurchase of shares and the sale
of corporate assets by an issuing public corporation in response to a take-over
offer. F&M presently meets the definition of "issuing public corporation."
Also, Section 180.1150 of the WBCL provides that the voting power of
shares of an "issuing public corporation" which are held by any person in
excess of 20% of the voting power of the issuing public corporation's shares
shall be limited to 10% of the full voting power of such excess shares. This
statutory voting restriction is not applicable to shares acquired directly from
F&M, to shares acquired in a transaction
-12-
<PAGE> 13
incident to which shareholders of F&M vote to restore the full voting power of
such shares and under certain other circumstances.
Sections 180.1140 through 180.1144 of the WBCL prohibit certain
"business combinations" between a "resident domestic corporation" and a person
beneficially owning 10% or more of the outstanding voting stock of such
corporation (an "interested shareholder") within three years after the date
such person became a 10% beneficial owner (the "acquisition date"), unless the
business combination or the acquisition of such stock has been approved before
the acquisition date by the corporation's board of directors. After such
three-year period, a business combination with the interested shareholder may
be consummated only with the approval of the holders of a majority of the
voting stock not beneficially owned by the interested shareholder, unless the
combination satisfies certain adequacy-of-price standards intended to provide a
fair price for shares held by disinterested shareholders. F&M presently meets
the definition of a "resident domestic corporation."
The foregoing provisions of the WBCL, the classification of F&M's
board of directors and the ability to issue additional shares of F&M Common
without further shareholder approval (except as may be required under NASDAQ
Stock Market corporate governance standards), could have the effect, among
others, of discouraging take-over proposals for F&M or impeding a business
combination between F&M and a major shareholder.
PLAN OF DISTRIBUTION
This Prospectus covers the offer and sale by F&M of up to 1,500,000
shares of F&M Common, which F&M may issue from time to time in connection with
the future acquisitions of other businesses, or securities of other businesses,
in business combination transactions in accordance with Rule 415(a)(1)(viii) of
Regulation C under the Securities Act or as otherwise permitted under the
Securities Act.
F&M expects that the terms upon which it may issue the shares in
business combination transactions will be determined through negotiations with
the boards of directors, principal owners and/or other representatives of the
businesses to be acquired. It is expected that the shares of F&M Common that
are issued will be valued at prices reasonably related to the market prices for
F&M Common prevailing at either the time an acquisition agreement is executed
or at the time an acquisition is consummated.
All expenses to these offerings are expected to be borne by F&M,
although any business to be acquired is likely to be required to bear all of
its expenses in connection with any business combination transaction. Because
any supplement to this registration statement may also constitute a proxy
statement of such acquired business, the acquired business may bear certain of
the expenses relating thereto.
No underwriting discounts or commissions will be paid in connection
with the issuance of shares of F&M Common by F&M in any business combination
transactions, although F&M (or an acquired business) may engage investment
advisors in connection with the evaluation of any specific acquisition.
LEGAL OPINIONS
Quarles & Brady, Milwaukee, Wisconsin, special counsel for F&M, and
McCarty, Curry, Wydeven, Peeters & Haak, Kaukauna, Wisconsin, general counsel
for F&M, will render opinions on the legality of the shares being offered
hereby and as to certain other matters in connection with the business
combination transactions pursuant to which shares of F&M Common may be issued.
Two Quarles & Brady attorneys providing services with respect to the
Registration Statement own an aggregate of 7,810 shares of F&M Common.
-13-
<PAGE> 14
EXPERTS
The consolidated financial statements of F&M as of December 31, 1995
and 1994, and for the years ended December 31, 1995, 1994 and 1993, and the
financial statements of F&M Bank-Algoma (f/k/a Community State Bank) as of, and
for the year ended, December 31, 1995, incorporated by reference in this
Prospectus, have been audited by Wipfli Ullrich Bertelson LLP, independent
certified public accountants, as indicated in their reports with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said reports.
PROCEDURE FOR SUBMITTING SHAREHOLDER PROPOSALS
Pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, F&M
shareholders may present proper proposals for inclusion in F&M's proxy
statement and for consideration at its annual meeting of shareholders in a
timely manner. If F&M's 1997 annual meeting is held as scheduled, the date for
timely submission is December 1, 1996; if the meeting is materially delayed,
shareholders will be informed of a new date for submission.
-14-
