U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10 - QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1997
-----------------------------
Commission File Number 0-16587
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South Branch Valley Bancorp, Inc.
- -------------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
West Virginia 55-0672148
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
310 North Main Street
Moorefield, West Virginia 26836
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(Address of principal executive offices) (Zip Code)
(304) 538-2353
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(Issuer's telephone number, including area code)
Check whether the issuer: (1) filed all reports required by Section 13 or 15(d)
of the Exchange Act during the past 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
---- ----
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
378,510 common shares were outstanding as of April 29, 1997.
1
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SOUTH BRANCH VALLEY BANCORP, INC. AND SUBSIDIARY
INDEX
Page
I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed consolidated balance sheets
March 31, 1997 (unaudited) and
December 31, 1996 3
Condensed consolidated statements of
income for the three months ended
March 31, 1997 and 1996 (unaudited) 4
Condensed consolidated statements of
cash flows for the three months ended
March 31, 1997 and 1996 (unaudited) 5-6
Condensed consolidated statements of
shareholders' equity for the three
months ended March 31, 1997 and 1996 (unaudited) 7
Notes to condensed consolidated financial
statements (unaudited) 8-11
Item 2.
Management's Discussion and Analysis
of Financial Condition and Results of Operation 12-17
II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 18
Signatures 19
2
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<TABLE>
<CAPTION>
SOUTH BRANCH VALLEY BANCORP, INC., AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
March 31, December 31,
1997 1996
ASSETS (Unaudited) *
-------------- --------------
<S> <C> <C>
Cash and due from banks $3,443,963 $3,162,552
Interest bearing deposits with other banks 1,553,000 1,553,000
Federal funds sold 1,736,449 723,734
Securities available for sale 29,815,147 29,351,998
Marketable equity securities 512,500 --
Loans, net 86,183,134 82,414,205
Bank premises and equipment, net 3,106,858 3,121,892
Accrued interest receivable 972,935 928,642
Other assets 5,042,383 857,582
-------------- --------------
Total Assets $132,366,369 $122,113,605
============== ==============
LIABILITIES
Non-interest bearing deposits $9,245,358 $9,075,059
Interest bearing deposits 92,584,726 91,866,353
-------------- --------------
Total deposits 101,830,084 100,941,412
Short-term borrowings 6,773,348 4,377,397
Long-term borrowings 8,991,002 3,514,652
Contingent common stock subscribed 1,492,790 --
Other liabilities 806,286 976,351
-------------- --------------
Total Liabilities $119,893,510 109,809,812
============== ==============
SHAREHOLDERS' EQUITY
Common stock, $2.50 par value, authorized
600,000 shares, issued 382,625 shares $956,562 $956,562
Surplus 685,534 685,534
Net unrealized gain (loss) on securities (52,316) 117,199
Retained earnings 11,050,049 10,711,468
Less cost of shares acquired for the
treasury 1997, 4,115; and 1996, 4,115 (166,970) (166,970)
------------- -------------
Total Shareholders' Equity $12,472,859 $12,303,793
------------- -------------
Total Liabilities and Shareholders' Equity $132,366,369 $122,113,605
============= =============
* December 31, 1996 financial information has been extracted from audited
financial statements.
</TABLE>
See Notes to Condensed Consolidated Financial Statements
3
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<TABLE>
<CAPTION>
SOUTH BRANCH VALLEY BANCORP, INC., AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
For the Three Months ended March 31, 1997 and 1996
(Unaudited)
Three Months Ended
March 31, March 31,
1997 1996
------------- -------------
Interest income:
<S> <C> <C>
Interest and fees on loans $2,011,020 $1,797,817
Interest on securities:
Taxable 411,956 471,978
Tax-exempt 74,535 47,784
Interest on Federal funds sold 13,304 23,257
------------- ------------
Total interest income 2,510,815 2,340,836
------------- ------------
Interest expense:
Interest on deposits 1,100,403 1,140,623
Interest on short-term borrowings 42,168 307
Interest on long-term borrowings 103,247 20,918
------------- ------------
Total interest expense 1,245,818 1,161,848
------------- ------------
Net interest income 1,264,997 1,178,988
Provision for loan losses 30,000 10,000
------------- ------------
Net interest income after
provision for loan losses 1,234,997 1,168,988
------------- ------------
Non-interest income:
Insurance commissions 9,922 22,563
Trust department income 0 (8)
Service fee income 57,004 49,905
Securities gains (losses) 0 33,912
Other income 29,359 14,737
------------- ------------
Total other income 96,285 121,109
------------- ------------
Non-interest expense:
Salaries and employee benefits 447,877 443,697
Net occupancy expense 42,642 53,326
Equipment expense 67,903 62,806
FDIC insurance premiums 2,780 1,000
Other expenses 260,442 252,913
------------- -----------
Total other expense 821,644 813,742
------------- -----------
Income before income tax expense 509,638 476,355
Income tax expense 171,057 165,170
------------- -----------
Net Income $338,581 $311,185
============= ===========
Earnings per common share $0.89 $0.82
============= ===========
Dividends per common share $--- $---
============= ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
4
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<TABLE>
<CAPTION>
SOUTH BRANCH VALLEY BANCORP, INC., AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
Three Months Ended
March 31, March 31,
1997 1996
-------------- ------------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income $338,581 $311,185
Adjustments to reconcile net earnings to net
cash provided by operating activitites:
Depreciation 56,307 53,431
Provision for loan losses 30,000 10,000
Securities (gains) -- (33,911)
Provision for deferred income tax expense 41,150 9,237
(Increase) in accrued income receivable (44,293) (53,655)
Amortization of security premiums and
(accretion of discounts), net 4,985 15,748
Decrease in other assets 462,723 57,111
(Decrease) in other liabilities (96,696) (121,338)
(Gain) on sale of other assets (7,344) --
--------------- ------------
Net cash provided by (used in) operating activities 785,413 247,808
--------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of securities available for sale -- 2,209,305
Proceeds from maturities of securities available
for sale 250,000 2,500,000
Purchases of securities available for sale (1,416,430) (5,857,400)
Purchase of non-subsidiary bank stock (512,500) --
Amounts deposited into escrow for purchase of
non-subsidiary bank stock (4,671,480) --
Principal payments received on securities available
for sale 422,662 138,529
(Increase) decrease in Federal funds sold, net (1,012,715) 1,981,242
Principal collected on (loans to customers), net (3,798,929) (1,874,348)
Proceeds from interest bearing
deposits with other banks -- 89,943
Purchase of Bank premises and equipment (41,273) (33,058)
Proceeds sales of other assets 22,900 --
--------------- -----------
Net cash provided by (used in) investing
activities (10,757,765) (845,787)
--------------- -----------
Continued
</TABLE>
See Notes to Condensed Consolidated Financial Statements
5
<PAGE>
<TABLE>
<CAPTION>
SOUTH BRANCH VALLEY BANCORP, INC., AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - Continued
For the Three Months Ended March 31, 1997 and 1996
(Unaudited)
Three Months Ended
March 31, March 31,
1997 1996
CASH FLOWS FROM FINANCING ACTIVITIES --------------- ------------
<S> <C> <C>
Net (decrease) in demand deposits, NOW and savings
accounts 200,726 (766,959)
Proceeds from sales of time deposits, net 687,946 389,891
Net increase in short-term borrowings 2,395,951 --
Proceeds from long-term borrowings 5,500,000 1,000,000
Repayment of long-term borrowings (23,650) (6,109)
Proceeds common stock subscribed 1,492,790 --
---------------- -----------
Net cash provided by (used in) financing activities 10,253,763 616,823
---------------- -----------
Increase (decrease) in cash and due from banks 281,411 18,844
Cash and due from banks:
Beginning 3,162,552 2,191,647
---------------- -----------
Ending $3,443,963 $2,210,491
================ ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash payments for:
Interest paid to depositors $402,519 $1,140,402
================ ===========
Income taxes $4,600 $0
================ ===========
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING
AND FINANCING ACTIVITIES
Other real estate acquired in settlement of loans $0 $0
================ ===========
</TABLE>
See Notes to Condensed Consolidated Financial Statements
6
<PAGE>
<TABLE>
SOUTH BRANCH VALLEY BANCORP, INC., AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
For the Three Months ended March 31, 1997 and 1996
(Unaudited)
Three Months Ended
-------------------------------
March 31, March 31,
1997 1996
--------------- -------------
<S> <C> <C>
Balance, beginning of period $12,303,793 $11,328,660
Net income 338,581 311,185
Change in net unrealized gain (loss)
on securities (169,515) (238,640)
-------------- -------------
Balance, March 31 $12,472,859 $11,401,205
============== =============
</TABLE>
See Notes to Condensed Consolidated Financial Statements
7
<PAGE>
SOUTH BRANCH VALLEY BANCORP, INC. AND SUBSIDIARY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Basis of Presentation
The financial information included herein is unaudited; however,
such information reflects all adjustments (consisting solely of
normal recurring adjustments) which are, in the opinion of
management, necessary for a fair statement of results for the
interim periods.
The presentation of financial statements in conformity with
generally accepted accounting procedures requires management to make
estimates and assumptions that effect the reported amount of assets
and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Actual results
could differ from the estimates.
The results of operations for the three months March 31, 1997 are
not necessarily indicative of the results to be expected for the
full year. The Condensed Consolidated Financial Statements and notes
included herein should be read in conjunction with the Company's
1996 audited financial statements and Form 10-K.
Certain accounts in the consolidated financial statements for 1996
as previously presented have been reclassified to conform to current
year classifications.
Note 2. Earnings Per Share
Earnings per common share are computed based upon the weighted
average shares outstanding. The weighted average shares outstanding
were 378,510 at March 31, 1997 and 1996, respectively.
Note 3. Commitments and Contingencies
On February 7, 1997, the Company executed a Stock Purchase Agreement
to purchase 424,680 shares or approximately 35.4% of The Capital
State Bank, Inc.(Capital State), a state banking corporation.
Further, during the first quarter of 1997, the Company
8
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acquired 50,000 shares or approximately 4.2% of Capital State stock
from another party. This investment, which totaled $512,500, is
recorded as Marketable Equity Securities in the accompanying
condensed consolidated financial statements under the cost method of
accounting. Reference can be made to Forms 8-K filed by the Company
on January 15, 1997, February 7, 1997 and March 27, 1997 for further
information related to the Company's planned investment in Capital
State. These documents are incorporated herein by reference in their
entirety.
In connection with the stock purchase agreement, approximately $4.7
million have been placed in a non-interest bearing escrow account to
fund the purchase of Capital State stock if certain conditions are
met as outlined in the agreement. These monies are included in Other
Assets on the accompanying condensed consolidated financial
statements.
Management does not foresee any delays in the approval of this
purchase and anticipates approval from regulatory authorities
during the third quarter of 1997. Upon approval management
anticipates this acquisition will be accounted for using the
purchase method of accounting.
Note 4. Long-term borrowings
On February 18, 1997 and March 14, 1997, the Company obtained two
long-term borrowings from two separate financial institutions in the
amounts of $3,000,000 and $500,000 respectively, to fund a stock
purchase agreement and to acquire approximately 4.2% of Capital
State (see Note 3). Each of these loans bear an interest rate of
prime minus .25%, adjusted annually, with interest payments due
quarterly. Annual principal payments in the amount of $600,000 will
be due on the $3,000,000 loan, while quarterly principal payments in
the amount of $20,833 will be due on the $500,000 loan.
The proceeds from the $3,000,000 loan were placed in a non-interest
bearing escrow account until consummation of the proposed purchase
of Capital State stock(see Note 3). Currently this escrow account
serves as collateral for this loan, until Capital State stock is
purchased, at which time the stock will be placed as collateral. The
Company's 50,000 shares of Capital State presently owned is pledged
as collateral for the $500,000 loan.
The subsidiary bank also had long-term borrowings of $5,491,000 and
$1,744,000 as of March 31, 1997 and March
9
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31, 1996, respectively, which consisted of advances from the
Federal Home Loan Bank of Pittsburgh. During the first quarter of
1997, a 6.08% long term fixed rate loan in the amount of
$2,400,000 was obtained to fund long-term mortgage loans.
Total long-term borrowings bear an average interest rate of 5.78%
and mature in varying amounts through the year 2010. A summary of
the maturities of all long term borrowings for the next five years
is as follows:
1998 $ 0
1999 0
2000 340,000
2001 0
2002 5,500,000
Thereafter 3,151,002
----------
Total $8,991,002
==========
Note 5. Stock Subscriptions
During February 1997, the Company executed stock subscription
agreements with seven directors of the Company in a limited stock
offering at $43.50 per share, the estimated current market value of
the Company's common stock based on sales transactions known to
management. As described in Note 3, the funds have been placed in an
escrow account to fund the proposed stock acquisition of Capital
State common stock. The directors who will purchase the Company
stock and the amount they will purchase is as follows:
Director's Name Number of Shares Dollar Amount
-------------------------------------------------------
John W. Crites 25,300 $1,100,550
Gary L. Hinkle 4,600 200,100
Jeffrey E. Hott 2,530 110,055
Oscar M. Bean 575 25,013
Donald W. Biller 506 22,011
Thomas J. Hawse, III 300 13,050
Mary Ann Ours 506 22,011
------- -------------
34,317 $1,492,790
The contemplated transaction is subject to various contingencies,
including but not limited to the Company's ability to obtain prior
regulatory approval. In the event that the contemplated transaction
is not consummated within twelve (12) months, the subscription
deposit will be promptly returned without interest unless
10
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otherwise agreed to by the parties. Accordingly, the above amount
has been recorded as contingent common stock in the liabilities
section of the accompanying condensed consolidated financial
statements.
The following represents certain proforma information as if the
34,317 shares of contingent common stock subscriptions had been
issued as of the beginning of each periods reported.
March 31, 1997
As Reported Proforma
Earnings per share $ .89 $ .82
Book value 32.95 33.83
ROA 1.10% 1.10%
March 31, 1996
As Reported Proforma
Earnings per share $ .82 $ .75
Book value 32.51 33.42
ROA 1.10% 1.10%
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION AND SUMMARY
The following is Management's discussion and analysis of the financial
condition and financial results of operations for South Branch Valley Bancorp,
Inc. and its wholly owned subsidiary, South Branch Valley National Bank,
(hereafter referred to as the Company) as of March 31, 1997. This discussion may
contain forward looking statements based on management's expectations and actual
results may differ materially. Since the primary business activities of South
Branch Valley Bancorp, Inc. are conducted through its wholly owned subsidiary
(the Bank), the following discussion focuses primarily on the financial
condition and operations of the Bank. All amounts and percentages have been
rounded for this discussion.
Earnings Summary
- -----------------------
Net income for the first quarter of 1997 totaled $339,000, a $28,000 or a
9.0% increase from the $311,000 earned during the same period of 1996. However,
this increase was affected by several expenses related to the proposed stock
purchase agreement of Capital State. Such expenses include legal and accounting
expenses related to this proposed acquisition of approximately $9,000, and
$32,000 in additional interest expense incurred as a result of long-term
borrowing proceeds used to fund this proposed acquisition. No income is
currently being earned on the long-term borrowing proceeds as such funds have
been placed in a non-interest bearing escrow account in accordance with the
stock purchase agreements.
Total direct costs associated with this acquisition are considered
immaterial and are being expensed as incurred. Management recognizes that these
expenses will continue throughout 1997 but does not believe net income will be
negatively impacted but will remain steady.
Annualized return on average assets at March 31, 1997 was 1.10% as
compared to 1.10% at March 31, 1996. Earnings per share totaled $.89 at March
31, 1997 compared to $.82 at March 31, 1996. Excluding the above acquisition
related costs, earnings per share would have been $.96 and annualized return on
average assets would have been 1.20% at March 31, 1997.
The Company's only subsidiary, South Branch Valley National Bank, had an
increase in net income of $63,000, or 19.8% to $381,000 as compared with
$318,000 for the same period ended March 31, 1996.
12
<PAGE>
RESULTS OF OPERATIONS
Net Interest Income
- --------------------
For purposes of this discussion, a "taxable equivalent basis" adjustment
has been included in interest income to reflect income earned on tax-exempt
state and municipal obligations as if they were taxable, assuming a Federal tax
rate of 34% in both 1997 and 1996. The tax equivalent adjustment approximated
$16,000 in 1997 and $12,000 in 1996.
For the three months ended March 31, 1997, the Company's net interest
income, as adjusted, increased $90,000 or 7.6% to $1,281,000 as compared with
$1,191,000 for the three months ended March 31, 1996. The Company's net interest
yield on earning assets (net interest margin) decreased 6 basis points from
4.46% for the three months ended March 31, 1996 to 4.40% for the three months
ended March 31, 1997. See Table I for an illustrative analysis of the changes in
net interest margin.
Provision for Loan Losses and Loan Quality
- -------------------------------------------
An allowance for loan losses is maintained by the Company to provide for
potential losses included in its loan portfolio. This allowance is funded
through the provision for loan losses as a charge to current earnings. The
allowance for loan losses is reviewed by management on a quarterly basis to
determine if it is being maintained at levels considered necessary to cover
potential losses associated with the Bank's current lending activities. For the
three months ended March 31, 1997, the Company's provision for loan losses
totaled $30,000, compared to $10,000 during the first three months of 1996. The
following table represents a summary of the Company's past due and
non-performing assets:
SUMMARY OF PAST DUE LOANS AND NON-PERFORMING ASSETS
March 3 December 31
1997 1996 1996
------------------------- ----------------
Loans contractually past due
90 days or more and still
accruing interest $272 $285 $324
====== ====== ======
Non-performing assets:
Non-accruing loans $125 $430 $343
Other real estate owned
and repossessed assets 67 40 29
------ ------ ------
$192 $470 $372
====== ====== ======
13
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<TABLE>
<CAPTION>
South Branch Valley Bancorp, Inc. and Subsidiary
- -------------------------------------------------------------------------------
Table I - Average Distribution of Assets, Liabilities and Shareholders'
Equity, Interest Earnings & Expenses, and Average Rates
March 31, 1997 March 31, 1996
------------------------------ -----------------------------
(In thousands of
dollars) Average Earnings/ Yield/ Average Earnings/ Yield/
Balances Expense Rate Balances Expense Rate
------------------------------ -----------------------------
ASSETS
Interest earning assets:
Loans, net of unearned
<S> <C> <C> <C> <C> <C> <C>
interest $84,607 $2,011 9.51% $72,125 $1,798 9.97%
Securities
Taxable 23,719 386 6.51% 27,312 436 6.39%
Tax-exempt 5,718 91 6.37% 3,486 59 6.77%
Interest bearing deposits
with other banks 1,553 26 6.70% 2,116 36 6.81%
Federal funds sold 833 13 6.24% 1,690 23 5.44%
------------ -------- ----- ---------- ------- -----
Total interest
earning assets 116,430 2,527 8.68% 106,729 2,352 8.81%
Noninterest earning assets:
Cash & due from
banks 2,882 2,405
Bank premises &
equipment 3,116 3,173
Other assets 2,755 1,316
Allowance for loan
losses (869) (863)
------------ ----------
Total assets $124,314 $112,760
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest bearing liabilities:
Interest bearing
demand deposits $19,201 $148 3.08% $18,989 $160 3.37%
Regular savings 13,799 108 3.13% 15,728 142 3.61%
Time savings 59,083 845 5.72% 56,588 839 5.93%
Federal funds purchased and
securities sold with
agreement to repurchase 4,054 42 4.14% -- -- --
Other borrowings 6,552 103 6.29% 1,430 21 5.87%
------------ -------- ----- ---------- ------- -----
102,689 1,246 4.85% 92,735 1,162 5.01%
Noninterest bearing liabilities:
Demand deposits 9,333 7,789
Other liabilities 933 946
---------- ---------
Total liabilities 112,955 101,470
Shareholders' equity 11,359 11,290
---------- ---------
Total liabilities
and shareholders'
equity $124,314 $112,760
========== =========
NET INTEREST EARNINGS $1,281 $1,190
========== =========
NET INTEREST YIELD ON EARNING ASSETS 4.40% 4.46%
====== =====
</TABLE>
14
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The level of non-performing assets has decreased during the past year due
to management's continuing efforts to improve the quality of the Company's
assets. Total loans past due 90 days or more plus non-performing assets have
decreased approximately $291,000 or 38.5% from the same period last year. Loans
contractually past due 90 days or more plus non-performing assets decreased
approximately 33.3% or $232,000 since December 31, 1996. While there may be some
loans or portions of loans identified as potential problem credits which are not
specifically identified as either non-accrual or accruing loans past due 90 or
more days, they are considered by management to be insignificant to the overall
disclosure and are therefore not specifically quantified within the Management's
Discussion and Analysis.
At March 31, 1997, the allowance for loan losses totaled $815,000 or .9%
of net loans compared to $849,000 or 1.2% of net loans at March 31, 1996, and
$858,000 or 1.0% of net loans at December 31, 1996. Based on managements
quarterly loan review procedures, management believes the recorded allowance
for loan losses is adequate to cover potential losses identified or inherent in
the loan portfolio as of each of the dates presented.
Non-interest Income
- -------------------------
Total non-interest income decreased approximately $25,000 or 20.7% to
$96,000 for the three months ended March 31, 1997 as compared to $121,000 for
the three months ended March 31, 1996. A discussion of the major components
of non-interest income which significantly fluctuated between these
periods follows:
Insurance commissions decreased approximately $13,000 to $10,000 or
56.5% for the three months ended March 31, 1997 compared to the three months
ended March 31, 1996. Management recognizes that this revenue can be sporadic
but does expect the remainder of the year's insurance earnings to be more
comparable to last years.
No sales of securities were originated during the three months ended March
31, 1997. For the three months ended March 31, 1996, certain securities were
sold to reinvest in similar securities with more favorable rates and terms,
which resulted in an approximate $34,000 gain on sales of investment securities.
Other income increased approximately $14,000 or 93.3% from $15,000 to
$29,000 for the three month period ended March 31, 1997 as compared with the
three month period ended March 31, 1996. This increase can be primarily
attributed to the sale of certain bank assets and other real estate owned. No
significant sales of this type are anticipated for the remainder of 1997.
15
<PAGE>
Non-interest expense
- --------------------------
Non-interest expense increased approximately $8,000 or 1.0% during the
first three months of 1997. A discussion of the major components of non-interest
expense which significantly fluctuated between the periods follows:
Net occupancy expense decreased from approximately $53,000 to $43,000 or
18.9%. The largest portion of this decrease was the loss of $4,000 rental income
from the temporary rental of part of one of the Company's facilities during
1996. This income ceased in January of 1997.
Other expenses increased approximately $7,000 or 2.8% from $253,000 to
$260,000 during the first three months of 1997 compared to the first three
months of 1996. The only major components of other expenses which significantly
fluctuated during this period were related to data processing and other
insurance expenses. Data processing expense decreased approximately $15,000 or
55.6% from $27,000 to $12,000. Data processing expense for 1996 was larger than
usual due to our mainframe software conversion. Other insurance expense
increased approximately $7,000 or 63.6% from $11,000 to $18,000. This increase
is due to revisions to existing policies and additional coverage purchased in
1997.
Liquidity
- -----------
Liquidity in commercial banking can be defined as the ability to satisfy
customer loan commitments and meet deposit withdrawals while maximizing net
interest income. The Company's primary sources of liquidity include cash and due
from banks coupled with Federal Funds sold which totaled $5,180,000 or 3.9% of
total assets. Additionally, securities and interest bearing deposits with other
banks maturing within one year, which are considered secondary sources of
liquidity, approximated $2,552,000 or 1.9% of total assets. Management believes
that the liquidity of the Company is adequate and foresees no demands or
conditions that would adversely affect it. The bank uses ratio analysis to
monitor the changes in its sources and uses of funds so that an adequate
liquidity position is maintained. At March 31, 1997 the loan to deposit ratio
was 84.6% compared to 81.7% at December 31,1996.
Financial Condition
- ------------------------
Assets
- --------
The overall composition of the Company's assets has not changed
significantly since year end 1996. Other assets increased approximately
$4,000,000, primarily due to the escrow account discussed in Note 3 to the
condensed consolidated financial statements.
16
<PAGE>
Liabilities
- ------------
Total deposits increased approximately .9% or $889,000 from December 31,
1996 with no significant fluctuation in the Company's deposit mix.
The Company's long term borrowings increased approximately $5,500,000
since December 31, 1996 to partially fund the purchase of Capital State stock
and to fund local mortgage loan growth. See Note 4 to the condensed consolidated
financial statements for additional information related to the Company's long
term borrowings.
Short term borrowings have increased approximately $2,400,000 and have
been used to fund additional loan growth. The average interest rate on the short
term borrowings has been 4.42% and has cost approximately $58,000 thus far in
1997.
Shareholders' Equity
- ---------------------
The Company's total shareholders' equity has increased approximately
$169,000 or 1.4% since December 31, 1996. This is the net result of an increase
in retained earnings of $338,000 from net income and a $169,000 decrease in net
unrealized gain (loss) on securities. The Company's equity to total assets ratio
was 9.4% at March 31, 1997 and 10.1% at December 31, 1996. The Company's
subsidiary bank's total risk weighted capital ratio was approximately 14.3% at
March 31, 1997 and is well within Federal regulatory guidelines. The Company is
not aware of any pending regulation which would have a material negative impact
on its operations or financial condition.
17
<PAGE>
PART II
Item 6 - Exhibits and Reports on Form 8-K
- ----------------------------------------------------
A. Exhibits
Page(s) in
Exhibit Description Form 10-QSB or
Number Prior Filing
- ---------- Reference
---------------
(10) Material Contracts
Stock Subscription Agreements with related parties:
a. Donald W. Biller 20 - 22
b. Gary L. Hinkle 23 - 25
c. Jeffrey E. Hott 26 - 28
d. John W. Crites 29 - 31
e. Mary Ann Ours 32 - 34
f. Oscar M. Bean 35 - 37
g. Thomas J. Hawse, III 38 - 40
(27) Financial Data Schedule 41
B. Reports on Form 8-K.
On January 15, 1997 and February 7, 1997, the Registrant filed Form 8-K
related to the execution of a stock purchase agreement to acquire
approximately 35.4% of the Capital State Bank, Inc., a state non-member
financial institution located in Charleston, West Virginia. On March 27,
1997, the Registrant filed Form 8-K related to the execution of a stock
purchase agreement to acquire approximately 50,000 shares of the Capital
State Bank, Inc. This will give the Registrant an ownership interest of
approximately 40% in Capital State Bank, Inc. These documents are
incorporated herein by reference in their entirety.
18
<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.
South Branch Valley Bancorp, Inc.
(registrant)
By: /s/ H. Charles Maddy, III
-------------------------------------------
H. Charles Maddy, III, President and
Chief Financial Officer
By: /s/ Russell Ratliff, Jr.
-------------------------------------------
Russell Ratliff, Jr., Treasurer
Date: May 14, 1997
-------------
19
<PAGE>
Exhibit 10(a)
- ------------------------------------------------------------------------------
SUBSCRIPTION AGREEMENT
FOR SHARES OF COMMON STOCK
OF SOUTH BRANCH VALLEY BANCORP, INC.
- ------------------------------------------------------------------------------
This Subscription Agreement is made by and between South Branch
Valley Bancorp, Inc., a West Virginia corporation (the "Company") and the
undersigned current investor and holder of common stock in the Company who is
subscribing hereby for share's of the Company common stock previously authorized
but not issued (the "Shares") and for which no offering materials are being
published.
In consideration of the Company's agreement to accept the
undersigned's offer to purchase Shares of the Company upon the terms and
conditions set forth herein, the undersigned agrees and represents as follows:
A. SUBSCRIPTION
1. The undersigned hereby subscribes to purchase Shares at $43.50 per
share in the amount indicated on the signature page of this Subscription
Agreement (page 6). Simultaneously with the execution of this Subscription
Agreement, the undersigned is paying and delivering to the Company the amount
set forth on the signature page, below, in the form of a check or wire transfer
(the "Subscription Deposit") payable to "South Branch Valley Bancorp-Stock
Subscription Account" to be deposited with the South Branch Valley National
Bank, a subsidiary of the Company.
2. The undersigned understands that the Subscription Deposit will not be
placed in an escrow account but will be segregated by the Company in its books
of account until used in connection with the Capital State Bank transaction
described below (the "Contemplated Transaction"). The Subscription Deposit will
be placed by the Company in an escrow account at Potomac Valley Bank in
fulfillment of Company's obligations to place the purchase price for the
Contemplated Transaction in escrow by February 18, 1997. The undersigned
understands that the escrow account was established for the benefit of the
Company and the sellers of the shares of Capital State Bank, Inc. (the "Escrow
Account") which are the subject of the Contemplated Transaction, and that the
undersigned has no right to or claim on the Escrow Account. The undersigned
acknowledges that the Contemplated Transaction is subject to various
contingencies, including but not limited to the Company's ability to obtain
prior regulatory approval. In the event the Contemplated Transaction is not
consummated within twelve (12) months, the Subscription Deposit will be promptly
returned without interest unless otherwise agreed to by the parties.
B. REPRESENTATION AND WARRANTIES
1. The undersigned hereby represents and warrants to, and agrees
with the Company, as follows:
(a) The Shares are being purchased for his own account, for
investment purposes only, and not for the account of any other person, and not
with a view to distribution, assignment or resale to others or to
fractionalization in whole or in part. In furtherance thereof, the undersigned
represents, warrants, and agrees that no other person has or will have a direct
or indirect beneficial interest in such Shares and the undersigned will not
sell, hypothecate or otherwise transfer his Shares except in accordance with
applicable securities laws as approved by counsel for the Company.
(b) In evaluating the suitability of an additional investment in the
Company, the undersigned has not relied upon any representations or other
information (whether oral or written) from the Company, other than publicly
available information and no oral or written representations have been made or
oral or written information furnished to the undersigned or his advisors, if
any, in connection with the offering of the Shares which is in any way
inconsistent with publicly available information.
20
<PAGE>
(c) The Company has made available to the undersigned all documents
and information that the undersigned has requested relating to an additional
investment in the Company.
(d) The undersigned has carefully considered and has, to the extent
he believes such discussion necessary, discussed with his professional legal,
tax and financial advisers the suitability of an additional investment in the
Company for his particular tax and financial situation and he has determined
that the Shares are a suitable investment for him.
(e) All information which the undersigned has provided to the
Company concerning himself and his financial position is correct and complete as
the date set forth below, and if there should be any change in such information
prior to the acceptance of this Subscription Agreement by the Company, he will
immediately provide such information to the Company and will promptly send
confirmation of such information to the Company.
2. The foregoing representations and warranties are true and accurate as
of the date hereof, shall be true and accurate as of the date of the acceptance
hereof by the Company and shall survive thereafter. If such representations and
warranties shall not be true and accurate in any respect, the undersigned will,
prior to such acceptance, give written notice of such fact to the Company
specifying which representations and warranties are not true and accurate and
the reasons therefor.
3. The undersigned shall indemnify and hold harmless the Company or any of
its officers, employees, directors of control persons of any such entity who was
or is a party or is threatened to be made a party to any threatened pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of or arising from any actual or alleged
misrepresentation or misstatement of facts or omission to represent or state
facts made by the undersigned to the Company concerning himself or his financial
position in connection with the offering or sale of the Shares which is not
remedied by timely notice to the Company as provided above, against losses,
liabilities and expenses for which the Company or any of its officers,
employees, directors or control persons of any such entity have not otherwise
been reimbursed (including attorneys' fees, judgments, fines and amounts paid in
settlement) as actually and reasonably incurred by such person or entity in
connection with such action, suit or proceeding.
4. I understand that the Company is issuing 34,317 shares of its common
stock to partially finance its purchase of not less than 424,680 shares of
common stock of Capital State Bank, a West Virginia banking corporation.
C. FINANCIAL POSITION AND EXPERIENCE OF INDIVIDUAL INVESTORS
I represent and warrant to the Company as follows:
(a) My occupation is (1) Farmer
---------------------------
(2)
---------------------------
(b) The proposed investment is financially suitable for me. I have the
financial means to make the investment giving due consideration to
its illiquidity and other risks associated with the investment.
After making the investment, I will continue to have sufficient
liquidity to meet my cash needs.
(c) I have an on-going relationship with an accountant and/or legal, tax
or business advisors with whom I review tax or financial matters
(even though I may not have reviewed this investment with them).
(1)
-----------
(Please initial if correct)
(d) In reviewing an additional investment in the Company I have
consulted with, or received information or advice from, the persons
listed below:
[Please name and indicate the professional or business
relationship of each person to you (e.g., attorney, accountant,
business advisor). Such persons need not complete any
certificates or make any representation to the Company merely
because they are named here as persons with whom you consulted.]
21
<PAGE>
(e) My educational background is as follows:
School: Mathias High School
------------------------------------------
Major:
------------------------------------------
Degree:
------------------------------------------
(f) My Occupation, Employer(s) for the last five years and positions
held are set forth below:
Farmer (self employed) and President of D.W. Biller, Inc.
--------------------------------------------------------------------
--------------------------------------------------------------------
(g) My experience with the Company includes being the current owner of
6,120 shares of common stock of the Company and serving as a
director since 1987. Additionally, I first became affiliated with
South Branch Valley National Bank in 1975 (prior to the formation of
the Company as the holding company of such institution) as a
director.
(h) My experience in investments is set forth below (indicate whether
public or private, partnerships in real estate, oil and gas,
equipment leasing, stocks, bonds, etc ):
Director of D. W. Biller, Inc.
-------------------------------------------------------------------
Real estate investments
-------------------------------------------------------------------
Stock in F&M Corp
-------------------------------------------------------------------
(i) Set forth below is additional information which reflects my
experience in financial and business matters which enables me to
evaluate the merits and risks of this investment.
-------------------------------------------------------------------
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement this 18th day of February, 1997.
506 $ 22,011.00
- -------------------------------- ----------------
Number of Shares Subscribed Total Purchase Price
for at $ 43.50 per Share.
Individual:
/s/ Donald W. Biller
- --------------------------------
Donald W. Biller
Accepted by:
South Branch Valley Bancorp, Inc.,
a West Virginia corporation
By: /s/ C. Maddy
- --------------------------------
Its: President
Date of Acceptance:
February 18, 1997
22
Exhibit 10(b)
- ------------------------------------------------------------------------------
SUBSCRIPTION AGREEMENT
FOR SHARES OF COMMON STOCK
OF SOUTH BRANCH VALLEY BANCORP, INC.
- ------------------------------------------------------------------------------
This Subscription Agreement is made by and between South Branch
Valley Bancorp, Inc., a West Virginia corporation (the "Company") and the
undersigned current investor and holder of common stock in the Company who is
subscribing hereby for share's of the Company common stock previously authorized
but not issued (the "Shares") and for which no offering materials are being
published.
In consideration of the Company's agreement to accept the
undersigned's offer to purchase Shares of the Company upon the terms and
conditions set forth herein, the undersigned agrees and represents as follows:
A. SUBSCRIPTION
1. The undersigned hereby subscribes to purchase Shares at $43.50 per
share in the amount indicated on the signature page of this Subscription
Agreement (page 6). Simultaneously with the execution of this Subscription
Agreement, the undersigned is paying and delivering to the Company the amount
set forth on the signature page, below, in the form of a check or wire transfer
(the "Subscription Deposit") payable to "South Branch Valley Bancorp-Stock
Subscription Account" to be deposited with the South Branch Valley National
Bank, a subsidiary of the Company.
2. The undersigned understands that the Subscription Deposit will not be
placed in an escrow account but will be segregated by the Company in its books
of account until used in connection with the Capital State Bank transaction
described below (the "Contemplated Transaction"). The Subscription Deposit will
be placed by the Company in an escrow account at Potomac Valley Bank in
fulfillment of Company's obligations to place the purchase price for the
Contemplated Transaction in escrow by February 18, 1997. The undersigned
understands that the escrow account was established for the benefit of the
Company and the sellers of the shares of Capital State Bank, Inc. (the "Escrow
Account") which are the subject of the Contemplated Transaction, and that the
undersigned has no right to or claim on the Escrow Account. The undersigned
acknowledges that the Contemplated Transaction is subject to various
contingencies, including but not limited to the Company's ability to obtain
prior regulatory approval. In the event the Contemplated Transaction is not
consummated within twelve (12) months, the Subscription Deposit will be promptly
returned without interest unless otherwise agreed to by the parties.
B. REPRESENTATION AND WARRANTIES
1. The undersigned hereby represents and warrants to, and agrees
with the Company, as follows:
(a) The Shares are being purchased for his own account, for
investment purposes only, and not for the account of any other person, and not
with a view to distribution, assignment or resale to others or to
fractionalization in whole or in part. In furtherance thereof, the undersigned
represents, warrants, and agrees that no other person has or will have a direct
or indirect beneficial interest in such Shares and the undersigned will not
sell, hypothecate or otherwise transfer his Shares except in accordance with
applicable securities laws as approved by counsel for the Company.
(b) In evaluating the suitability of an additional investment in the
Company, the undersigned has not relied upon any representations or other
information (whether oral or written) from the Company, other than publicly
available information and no oral or written representations have been made or
oral or written information furnished to the undersigned or his advisors, if
any, in connection with the offering of the Shares which is in any way
inconsistent with publicly available information.
(c) The Company has made available to the undersigned all documents
and information that the undersigned has requested relating to an additional
investment in the Company.
23
<PAGE>
(d) The undersigned has carefully considered and has, to the extent
he believes such discussion necessary, discussed with his professional legal,
tax and financial advisers the suitability of an additional investment in the
Company for his particular tax and financial situation and he has determined
that the Shares are a suitable investment for him.
(e) All information which the undersigned has provided to the
Company concerning himself and his financial position is correct and complete as
the date set forth below, and if there should be any change in such information
prior to the acceptance of this Subscription Agreement by the Company, he will
immediately provide such information to the Company and will promptly send
confirmation of such information to the Company.
2. The foregoing representations and warranties are true and accurate as
of the date hereof, shall be true and accurate as of the date of the acceptance
hereof by the Company and shall survive thereafter. If such representations and
warranties shall not be true and accurate in any respect, the undersigned will,
prior to such acceptance, give written notice of such fact to the Company
specifying which representations and warranties are not true and accurate and
the reasons therefor.
3. The undersigned shall indemnify and hold harmless the Company or any of
its officers, employees, directors of control persons of any such entity who was
or is a party or is threatened to be made a party to any threatened pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of or arising from any actual or alleged
misrepresentation or misstatement of facts or omission to represent or state
facts made by the undersigned to the Company concerning himself or his financial
position in connection with the offering or sale of the Shares which is not
remedied by timely notice to the Company as provided above, against losses,
liabilities and expenses for which the Company or any of its officers,
employees, directors or control persons of any such entity have not otherwise
been reimbursed (including attorneys' fees, judgments, fines and amounts paid in
settlement) as actually and reasonably incurred by such person or entity in
connection with such action, suit or proceeding.
4. I understand that the Company is issuing 34,317 shares of its common
stock to partially finance its purchase of not less than 424,680 shares of
common stock of Capital State Bank, a West Virginia banking corporation.
C. FINANCIAL POSITION AND EXPERIENCE OF INDIVIDUAL INVESTORS
I represent and warrant to the Company as follows:
(a) My occupation is (1) President of Hinkle Trucking Inc.
--------------------------------------------
(2) President of Dettinburn Transport,Inc.
--------------------------------------------
(3) President of Mt. Storm Fuel Corp.
--------------------------------------------
(b) The proposed investment is financially suitable for me. I have the
financial means to make the investment giving due consideration to
its illiquidity and other risks associated with the investment.
After making the investment, I will continue to have sufficient
liquidity to meet my cash needs.
(c) I have an on-going relationship with an accountant and/or legal, tax
or business advisors with whom I review tax or financial matters
(even though I may not have reviewed this investment with them).
(1)
---------
(Please initial if correct)
(d) In reviewing an additional investment in the Company I have
consulted with, or received information or advice from, the persons
listed below:
[Please name and indicate the professional or business relationship
of each person to you (e.g., attorney, accountant, business
advisor). Such persons need not complete any certificates or make
any representation to the Company merely because they are named here
as persons with whom you consulted.]
(e) My educational background is as follows:
School: West Virginia University
----------------------------------------------------------
Major: Management
----------------------------------------------------------
Degree: BS
----------------------------------------------------------
24
<PAGE>
(f) My Occupation, Employer(s) for the last five years and positions
held are set forth below:
President of Hinkle Trucking, Inc.
----------------------------------------------------------------
President of Dettinburn Transport, Inc.
----------------------------------------------------------------
(g) My experience with the Company includes being the current owner of
9,917 shares of common stock of the Company and serving as a
director since 1993.
(h) My experience in investments is set forth below (indicate whether
public or private, partnerships in real estate, oil and gas,
equipment leasing, stocks, bonds, etc ):
Private stock portfolio - past 15 years
-----------------------------------------------------------------
Company Stock Portfolio - past 10 years
-----------------------------------------------------------------
(i) Set forth below is additional information which reflects my
experience in financial and business matters which enables me to
evaluate the merits and risks of this investment.
-----------------------------------------------------------------
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement this 18th day of February, 1997.
4,600 $ 200,100.00
- ------------------------------ --------------------
Number of Shares Subscribed Total Purchase Price
for at $ 43.50 per Share.
Individual:
/s/ Gary L. Hinkle
- ------------------------------
Gary L. Hinkle
Accepted by:
South Branch Valley Bancorp, Inc.,
a West Virginia corporation
By: /s/ C. Maddy
- ------------------------------
Its: President
Date of Acceptance:
February 18, 1997
25
Exhibit 10(c)
- ------------------------------------------------------------------------------
SUBSCRIPTION AGREEMENT
FOR SHARES OF COMMON STOCK
OF SOUTH BRANCH VALLEY BANCORP, INC.
- ------------------------------------------------------------------------------
This Subscription Agreement is made by and between South Branch
Valley Bancorp, Inc., a West Virginia corporation (the "Company") and the
undersigned current investor and holder of common stock in the Company who is
subscribing hereby for share's of the Company common stock previously authorized
but not issued (the "Shares") and for which no offering materials are being
published.
In consideration of the Company's agreement to accept the
undersigned's offer to purchase Shares of the Company upon the terms and
conditions set forth herein, the undersigned agrees and represents as follows:
A. SUBSCRIPTION
1. The undersigned hereby subscribes to purchase Shares at $43.50 per
share in the amount indicated on the signature page of this Subscription
Agreement (page 6). Simultaneously with the execution of this Subscription
Agreement, the undersigned is paying and delivering to the Company the amount
set forth on the signature page, below, in the form of a check or wire transfer
(the "Subscription Deposit") payable to "South Branch Valley Bancorp-Stock
Subscription Account" to be deposited with the South Branch Valley National
Bank, a subsidiary of the Company.
2. The undersigned understands that the Subscription Deposit will not be
placed in an escrow account but will be segregated by the Company in its books
of account until used in connection with the Capital State Bank transaction
described below (the "Contemplated Transaction"). The Subscription Deposit will
be placed by the Company in an escrow account at Potomac Valley Bank in
fulfillment of Company's obligations to place the purchase price for the
Contemplated Transaction in escrow by February 18, 1997. The undersigned
understands that the escrow account was established for the benefit of the
Company and the sellers of the shares of Capital State Bank, Inc. (the "Escrow
Account") which are the subject of the Contemplated Transaction, and that the
undersigned has no right to or claim on the Escrow Account. The undersigned
acknowledges that the Contemplated Transaction is subject to various
contingencies, including but not limited to the Company's ability to obtain
prior regulatory approval. In the event the Contemplated Transaction is not
consummated within twelve (12) months, the Subscription Deposit will be promptly
returned without interest unless otherwise agreed to by the parties.
B. REPRESENTATION AND WARRANTIES
1. The undersigned hereby represents and warrants to, and agrees
with the Company, as follows:
(a) The Shares are being purchased for his own account, for
investment purposes only, and not for the account of any other person, and not
with a view to distribution, assignment or resale to others or to
fractionalization in whole or in part. In furtherance thereof, the undersigned
represents, warrants, and agrees that no other person has or will have a direct
or indirect beneficial interest in such Shares and the undersigned will not
sell, hypothecate or otherwise transfer his Shares except in accordance with
applicable securities laws as approved by counsel for the Company.
(b) In evaluating the suitability of an additional investment in the
Company, the undersigned has not relied upon any representations or other
information (whether oral or written) from the Company, other than publicly
available information and no oral or written representations have been made or
oral or written information furnished to the undersigned or his advisors, if
any, in connection with the offering of the Shares which is in any way
inconsistent with publicly available information.
(c) The Company has made available to the undersigned all documents
and information that the undersigned has requested relating to an additional
investment in the Company.
(d) The undersigned has carefully considered and has, to the extent
he believes such discussion necessary, discussed with his professional legal,
tax and financial advisers the suitability of an additional investment in the
Company for his particular tax and financial situation and he has determined
that the Shares are a suitable investment for him.
26
<PAGE>
(e) All information which the undersigned has provided to the
Company concerning himself and his financial position is correct and complete as
the date set forth below, and if there should be any change in such information
prior to the acceptance of this Subscription Agreement by the Company, he will
immediately provide such information to the Company and will promptly send
confirmation of such information to the Company.
2. The foregoing representations and warranties are true and accurate as
of the date hereof, shall be true and accurate as of the date of the acceptance
hereof by the Company and shall survive thereafter. If such representations and
warranties shall not be true and accurate in any respect, the undersigned will,
prior to such acceptance, give written notice of such fact to the Company
specifying which representations and warranties are not true and accurate and
the reasons therefor.
3. The undersigned shall indemnify and hold harmless the Company or any of
its officers, employees, directors of control persons of any such entity who was
or is a party or is threatened to be made a party to any threatened pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of or arising from any actual or alleged
misrepresentation or misstatement of facts or omission to represent or state
facts made by the undersigned to the Company concerning himself or his financial
position in connection with the offering or sale of the Shares which is not
remedied by timely notice to the Company as provided above, against losses,
liabilities and expenses for which the Company or any of its officers,
employees, directors or control persons of any such entity have not otherwise
been reimbursed (including attorneys' fees, judgments, fines and amounts paid in
settlement) as actually and reasonably incurred by such person or entity in
connection with such action, suit or proceeding.
4. I understand that the Company is issuing 34,317 shares of its common
stock to partially finance its purchase of not less than 424,680 shares of
common stock of Capital State Bank, a West Virginia banking corporation.
C. FINANCIAL POSITION AND EXPERIENCE OF INDIVIDUAL INVESTORS
I represent and warrant to the Company as follows:
(a) My occupation is (1) Agri-Business
-----------------------------------------------
(2) Director of family owned corporations,SBVB corp.
-----------------------------------------------
(b) The proposed investment is financially suitable for me. I have the
financial means to make the investment giving due consideration to
its illiquidity and other risks associated with the investment.
After making the investment, I will continue to have sufficient
liquidity to meet my cash needs.
(c) I have an on-going relationship with an accountant and/or legal, tax
or business advisors with whom I review tax or financial matters
(even though I may not have reviewed this investment with them).
(1)
--------
(Please initial if correct)
(d) In reviewing an additional investment in the Company I have
consulted with, or received information or advice from, the persons
listed below:
[Please name and indicate the professional or business relationship
of each person to you (e.g., attorney, accountant, business
advisor). Such persons need not complete any certificates or make
any representation to the Company merely because they are named here
as persons with whom you consulted.]
(e) My educational background is as follows:
School: West Virginia University (2 years), James Madison
-------------------------------------------------------
University (1 semester)
-------------------------------------------------------
Major: Agri-business
-------------------------------------------------------
Degree: None
-------------------------------------------------------
(f) My Occupation, Employer(s) for the last five years and positions
held are set forth below:
Hott's Ag Services, Inc. - Director, V. President(Fertilize &
-------------------------------------------------------------------
Chemicals)
-------------------------------------------------------------------
Commissioner of Pendleton County Commission
-------------------------------------------------------------------
Franklin Oil Company, Inc.-Director, V. President
-------------------------------------------------------------------
(g) My experience with the Company includes being the current owner of
18,975 shares of common stock of the Company and serving as a
director since 1990.
27
<PAGE>
(h) My experience in investments is set forth below (indicate whether
public or private, partnerships in real estate, oil and gas,
equipment leasing, stocks, bonds, etc ):
E. E. Hott, Inc. (Real estate, stocks) (private)
-----------------------------------------------------------------
Pendleton County Commissioner (1988-1994) Equipment Leasing,
-----------------------------------------------------------------
Bonds (Public)
-----------------------------------------------------------------
Franklin Oil Company, Inc. (Real estate, oil & gas distribution)
-----------------------------------------------------------------
(private)
-----------------------------------------------------------------
(i) Set forth below is additional information which reflects my
experience in financial and business matters which enables me to
evaluate the merits and risks of this investment.
Directing investments in self-directed IRA
-------------------------------------------------------------------
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement this 18th day of February, 1997.
2,530 $ 110,055.00
- ------------------------------ --------------
Number of Shares Subscribed Total Purchase Price
for at $ 43.50 per Share.
Individual:
/s/Jeffrey E. Hott
- -------------------------------
Jeffrey E. Hott
Accepted by:
South Branch Valley Bancorp, Inc.,
a West Virginia corporation
By: /s/ C. Maddy
- --------------------------------
Its: President
Date of Acceptance:
February 18, 1997
28
Exhibit 10(d)
- ------------------------------------------------------------------------------
SUBSCRIPTION AGREEMENT
FOR SHARES OF COMMON STOCK
OF SOUTH BRANCH VALLEY BANCORP, INC.
- ------------------------------------------------------------------------------
This Subscription Agreement is made by and between South Branch
Valley Bancorp, Inc., a West Virginia corporation (the "Company") and the
undersigned current investor and holder of common stock in the Company who is
subscribing hereby for share's of the Company common stock previously authorized
but not issued (the "Shares") and for which no offering materials are being
published.
In consideration of the Company's agreement to accept the
undersigned's offer to purchase Shares of the Company upon the terms and
conditions set forth herein, the undersigned agrees and represents as follows:
A. SUBSCRIPTION
1. The undersigned hereby subscribes to purchase Shares at $43.50 per
share in the amount indicated on the signature page of this Subscription
Agreement (page 6). Simultaneously with the execution of this Subscription
Agreement, the undersigned is paying and delivering to the Company the amount
set forth on the signature page, below, in the form of a check or wire transfer
(the "Subscription Deposit") payable to "South Branch Valley Bancorp-Stock
Subscription Account" to be deposited with the South Branch Valley National
Bank, a subsidiary of the Company.
2. The undersigned understands that the Subscription Deposit will not be
placed in an escrow account but will be segregated by the Company in its books
of account until used in connection with the Capital State Bank transaction
described below (the "Contemplated Transaction"). The Subscription Deposit will
be placed by the Company in an escrow account at Potomac Valley Bank in
fulfillment of Company's obligations to place the purchase price for the
Contemplated Transaction in escrow by February 18, 1997. The undersigned
understands that the escrow account was established for the benefit of the
Company and the sellers of the shares of Capital State Bank, Inc. (the "Escrow
Account") which are the subject of the Contemplated Transaction, and that the
undersigned has no right to or claim on the Escrow Account. The undersigned
acknowledges that the Contemplated Transaction is subject to various
contingencies, including but not limited to the Company's ability to obtain
prior regulatory approval. In the event the Contemplated Transaction is not
consummated within twelve (12) months, the Subscription Deposit will be promptly
returned without interest unless otherwise agreed to by the parties.
B. REPRESENTATION AND WARRANTIES
1. The undersigned hereby represents and warrants to, and agrees
with the Company, as follows:
(a) The Shares are being purchased for his own account, for
investment purposes only, and not for the account of any other person, and not
with a view to distribution, assignment or resale to others or to
fractionalization in whole or in part. In furtherance thereof, the undersigned
represents, warrants, and agrees that no other person has or will have a direct
or indirect beneficial interest in such Shares and the undersigned will not
sell, hypothecate or otherwise transfer his Shares except in accordance with
applicable securities laws as approved by counsel for the Company.
(b) In evaluating the suitability of an additional investment in the
Company, the undersigned has not relied upon any representations or other
information (whether oral or written) from the Company, other than publicly
available information and no oral or written representations have been made or
oral or written information furnished to the undersigned or his advisors, if
any, in connection with the offering of the Shares which is in any way
inconsistent with publicly available information.
(c) The Company has made available to the undersigned all documents
and information that the undersigned has requested relating to an additional
investment in the Company.
(d) The undersigned has carefully considered and has, to the extent
he believes such discussion necessary, discussed with his professional legal,
tax and financial advisers the suitability of an additional investment in the
Company for his particular tax and financial situation and he has determined
that the Shares are a suitable investment for him.
29
<PAGE>
(e) All information which the undersigned has provided to the
Company concerning himself and his financial position is correct and complete as
the date set forth below, and if there should be any change in such information
prior to the acceptance of this Subscription Agreement by the Company, he will
immediately provide such information to the Company and will promptly send
confirmation of such information to the Company.
2. The foregoing representations and warranties are true and accurate as
of the date hereof, shall be true and accurate as of the date of the acceptance
hereof by the Company and shall survive thereafter. If such representations and
warranties shall not be true and accurate in any respect, the undersigned will,
prior to such acceptance, give written notice of such fact to the Company
specifying which representations and warranties are not true and accurate and
the reasons therefor.
3. The undersigned shall indemnify and hold harmless the Company or any of
its officers, employees, directors of control persons of any such entity who was
or is a party or is threatened to be made a party to any threatened pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of or arising from any actual or alleged
misrepresentation or misstatement of facts or omission to represent or state
facts made by the undersigned to the Company concerning himself or his financial
position in connection with the offering or sale of the Shares which is not
remedied by timely notice to the Company as provided above, against losses,
liabilities and expenses for which the Company or any of its officers,
employees, directors or control persons of any such entity have not otherwise
been reimbursed (including attorneys' fees, judgments, fines and amounts paid in
settlement) as actually and reasonably incurred by such person or entity in
connection with such action, suit or proceeding.
4. I understand that the Company is issuing 34,317 shares of its common
stock to partially finance its purchase of not less than 424,680 shares of
common stock of Capital State Bank, a West Virginia banking corporation.
C. FINANCIAL POSITION AND EXPERIENCE OF INDIVIDUAL INVESTORS
I represent and warrant to the Company as follows:
(a) My occupation is (1) Allegheny Wood Products, Inc., President
---------------------------------------------
(2)
---------------------------------------------
(b) The proposed investment is financially suitable for me. I have the
financial means to make the investment giving due consideration to
its illiquidity and other risks associated with the investment.
After making the investment, I will continue to have sufficient
liquidity to meet my cash needs.
(c) I have an on-going relationship with an accountant and/or legal, tax
or business advisors with whom I review tax or financial matters
(even though I may not have reviewed this investment with them).
(1)
--------
(Please initial if correct)
(d) In reviewing an additional investment in the Company I have
consulted with, or received information or advice from, the persons
listed below:
[Please name and indicate the professional or business relationship
of each person to you (e.g., attorney, accountant, business
advisor). Such persons need not complete any certificates or make
any representation to the Company merely because they are named here
as persons with whom you consulted.]
(e) My educational background is as follows:
School: West Virginia University; University of Montana
-----------------------------------------------------------
Major: Forestry Forestry
-----------------------------------------------------------
Degree: BS MS
-----------------------------------------------------------
30
<PAGE>
(f) My Occupation, Employer(s) for the last five years and positions
held are set forth below:
Allegheny Wood Products, Inc., President
-----------------------------------------------------------------
(g) My experience with the Company includes being the current owner of
25,905 shares of common stock of the Company and serving as a
director since 1989.
(h) My experience in investments is set forth below (indicate whether
public or private, partnerships in real estate, oil and gas,
equipment leasing, stocks, bonds, etc ):
Allegheny Wood Products, Inc - owner 89% stock which includes
-------------------------------------------------------------------
40,000 acres of land
-------------------------------------------------------------------
Municipal Bonds
-------------------------------------------------------------------
(i) Set forth below is additional information which reflects my
experience in financial and business matters which enables me to
evaluate the merits and risks of this investment.
-------------------------------------------------------------------
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement this 18th day of February, 1997.
25,300 $ 1,100,550.00
- ------------------------------- ----------------
Number of Shares Subscribed Total Purchase Price
for at $ 43.50 per Share.
Individual:
/s/John W. Crites
- -------------------------------
John W. Crites
Accepted by:
South Branch Valley Bancorp, Inc.,
a West Virginia corporation
By: /s/ C. Maddy
- --------------------------------
Its: President
Date of Acceptance:
February 18, 1997
31
Exhibit 10(e)
- ------------------------------------------------------------------------------
SUBSCRIPTION AGREEMENT
FOR SHARES OF COMMON STOCK
OF SOUTH BRANCH VALLEY BANCORP, INC.
- ------------------------------------------------------------------------------
This Subscription Agreement is made by and between South Branch
Valley Bancorp, Inc., a West Virginia corporation (the "Company") and the
undersigned current investor and holder of common stock in the Company who is
subscribing hereby for share's of the Company common stock previously authorized
but not issued (the "Shares") and for which no offering materials are being
published.
In consideration of the Company's agreement to accept the
undersigned's offer to purchase Shares of the Company upon the terms and
conditions set forth herein, the undersigned agrees and represents as follows:
A. SUBSCRIPTION
1. The undersigned hereby subscribes to purchase Shares at $43.50 per
share in the amount indicated on the signature page of this Subscription
Agreement (page 6). Simultaneously with the execution of this Subscription
Agreement, the undersigned is paying and delivering to the Company the amount
set forth on the signature page, below, in the form of a check or wire transfer
(the "Subscription Deposit") payable to "South Branch Valley Bancorp-Stock
Subscription Account" to be deposited with the South Branch Valley National
Bank, a subsidiary of the Company.
2. The undersigned understands that the Subscription Deposit will not be
placed in an escrow account but will be segregated by the Company in its books
of account until used in connection with the Capital State Bank transaction
described below (the "Contemplated Transaction"). The Subscription Deposit will
be placed by the Company in an escrow account at Potomac Valley Bank in
fulfillment of Company's obligations to place the purchase price for the
Contemplated Transaction in escrow by February 18, 1997. The undersigned
understands that the escrow account was established for the benefit of the
Company and the sellers of the shares of Capital State Bank, Inc. (the "Escrow
Account") which are the subject of the Contemplated Transaction, and that the
undersigned has no right to or claim on the Escrow Account. The undersigned
acknowledges that the Contemplated Transaction is subject to various
contingencies, including but not limited to the Company's ability to obtain
prior regulatory approval. In the event the Contemplated Transaction is not
consummated within twelve (12) months, the Subscription Deposit will be promptly
returned without interest unless otherwise agreed to by the parties.
B. REPRESENTATION AND WARRANTIES
1. The undersigned hereby represents and warrants to, and agrees
with the Company, as follows:
(a) The Shares are being purchased for his own account, for
investment purposes only, and not for the account of any other person, and not
with a view to distribution, assignment or resale to others or to
fractionalization in whole or in part. In furtherance thereof, the undersigned
represents, warrants, and agrees that no other person has or will have a direct
or indirect beneficial interest in such Shares and the undersigned will not
sell, hypothecate or otherwise transfer his Shares except in accordance with
applicable securities laws as approved by counsel for the Company.
(b) In evaluating the suitability of an additional investment in the
Company, the undersigned has not relied upon any representations or other
information (whether oral or written) from the Company, other than publicly
available information and no oral or written representations have been made or
oral or written information furnished to the undersigned or his advisors, if
any, in connection with the offering of the Shares which is in any way
inconsistent with publicly available information.
(c) The Company has made available to the undersigned all documents
and information that the undersigned has requested relating to an additional
investment in the Company.
(d) The undersigned has carefully considered and has, to the extent
he believes such discussion necessary, discussed with his professional legal,
tax and financial advisers the suitability of an additional investment in the
Company for his particular tax and financial situation and he has determined
that the Shares are a suitable investment for him.
32
<PAGE>
(e) All information which the undersigned has provided to the
Company concerning himself and his financial position is correct and complete as
the date set forth below, and if there should be any change in such information
prior to the acceptance of this Subscription Agreement by the Company, he will
immediately provide such information to the Company and will promptly send
confirmation of such information to the Company.
2. The foregoing representations and warranties are true and accurate as
of the date hereof, shall be true and accurate as of the date of the acceptance
hereof by the Company and shall survive thereafter. If such representations and
warranties shall not be true and accurate in any respect, the undersigned will,
prior to such acceptance, give written notice of such fact to the Company
specifying which representations and warranties are not true and accurate and
the reasons therefor.
3. The undersigned shall indemnify and hold harmless the Company or any of
its officers, employees, directors of control persons of any such entity who was
or is a party or is threatened to be made a party to any threatened pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of or arising from any actual or alleged
misrepresentation or misstatement of facts or omission to represent or state
facts made by the undersigned to the Company concerning himself or his financial
position in connection with the offering or sale of the Shares which is not
remedied by timely notice to the Company as provided above, against losses,
liabilities and expenses for which the Company or any of its officers,
employees, directors or control persons of any such entity have not otherwise
been reimbursed (including attorneys' fees, judgments, fines and amounts paid in
settlement) as actually and reasonably incurred by such person or entity in
connection with such action, suit or proceeding.
4. I understand that the Company is issuing 34,317 shares of its common
stock to partially finance its purchase of not less than 424,680 shares of
common stock of Capital State Bank, a West Virginia banking corporation.
C. FINANCIAL POSITION AND EXPERIENCE OF INDIVIDUAL INVESTORS
I represent and warrant to the Company as follows:
(a) My occupation is (1) President - Ours Valley View Poultry
--------------------------------------------
Farm, Inc.
--------------------------------------------
(2)
--------------------------------------------
(b) The proposed investment is financially suitable for me. I have the
financial means to make the investment giving due consideration to
its illiquidity and other risks associated with the investment.
After making the investment, I will continue to have sufficient
liquidity to meet my cash needs.
(c) I have an on-going relationship with an accountant and/or legal, tax
or business advisors with whom I review tax or financial matters
(even though I may not have reviewed this investment with them).
(1)
(Please initial if correct)
(d) In reviewing an additional investment in the Company I have
consulted with, or received information or advice from, the persons
listed below:
[Please name and indicate the professional or business relationship
of each person to you (e.g., attorney, accountant, business
advisor). Such persons need not complete any certificates or make
any representation to the Company merely because they are named here
as persons with whom you consulted.]
(e) My educational background is as follows:
School: Potomac State 2 years
------------------------------------------------------------
Major: Secretarial
------------------------------------------------------------
Degree:
-----------------------------------------------------------
(f) My Occupation, Employer(s) for the last five years and positions
held are set forth below:
Retired - Working on family farm
-----------------------------------------------------------------
33
<PAGE>
(g) My experience with the Company includes being the current owner of
4,615 shares of common stock of the Company and serving as a
director since October 1994.
(h) My experience in investments is set forth below (indicate whether
public or private, partnerships in real estate, oil and gas,
equipment leasing, stocks, bonds, etc ):
WLR Stock - Own about $1,000,000.00 in corporate stocks
-------------------------------------------------------------------
(i) Set forth below is additional information which reflects my
experience in financial and business matters which enables me to
evaluate the merits and risks of this investment.
-------------------------------------------------------------------
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement this 18th day of February, 1997.
506 $ 22,011.00
- -------------------------------- ----------------
Number of Shares Subscribed Total Purchase Price
for at $ 43.50 per Share.
Individual:
/s/ Mary Ann Ours
- --------------------------------
Mary Ann Ours
Accepted by:
South Branch Valley Bancorp, Inc.,
a West Virginia corporation
By: /s/ C. Maddy
- --------------------------------
Its: President
Date of Acceptance:
February 18, 1997
34
Exhibit 10(f)
- ------------------------------------------------------------------------------
SUBSCRIPTION AGREEMENT
FOR SHARES OF COMMON STOCK
OF SOUTH BRANCH VALLEY BANCORP, INC.
- ------------------------------------------------------------------------------
This Subscription Agreement is made by and between South Branch
Valley Bancorp, Inc., a West Virginia corporation (the "Company") and the
undersigned current investor and holder of common stock in the Company who is
subscribing hereby for share's of the Company common stock previously authorized
but not issued (the "Shares") and for which no offering materials are being
published.
In consideration of the Company's agreement to accept the
undersigned's offer to purchase Shares of the Company upon the terms and
conditions set forth herein, the undersigned agrees and represents as follows:
A. SUBSCRIPTION
1. The undersigned hereby subscribes to purchase Shares at $43.50 per
share in the amount indicated on the signature page of this Subscription
Agreement (page 6). Simultaneously with the execution of this Subscription
Agreement, the undersigned is paying and delivering to the Company the amount
set forth on the signature page, below, in the form of a check or wire transfer
(the "Subscription Deposit") payable to "South Branch Valley Bancorp-Stock
Subscription Account" to be deposited with the South Branch Valley National
Bank, a subsidiary of the Company.
2. The undersigned understands that the Subscription Deposit will not be
placed in an escrow account but will be segregated by the Company in its books
of account until used in connection with the Capital State Bank transaction
described below (the "Contemplated Transaction"). The Subscription Deposit will
be placed by the Company in an escrow account at Potomac Valley Bank in
fulfillment of Company's obligations to place the purchase price for the
Contemplated Transaction in escrow by February 18, 1997. The undersigned
understands that the escrow account was established for the benefit of the
Company and the sellers of the shares of Capital State Bank, Inc. (the "Escrow
Account") which are the subject of the Contemplated Transaction, and that the
undersigned has no right to or claim on the Escrow Account. The undersigned
acknowledges that the Contemplated Transaction is subject to various
contingencies, including but not limited to the Company's ability to obtain
prior regulatory approval. In the event the Contemplated Transaction is not
consummated within twelve (12) months, the Subscription Deposit will be promptly
returned without interest unless otherwise agreed to by the parties.
B. REPRESENTATION AND WARRANTIES
1. The undersigned hereby represents and warrants to, and agrees
with the Company, as follows:
(a) The Shares are being purchased for his own account, for
investment purposes only, and not for the account of any other person, and not
with a view to distribution, assignment or resale to others or to
fractionalization in whole or in part. In furtherance thereof, the undersigned
represents, warrants, and agrees that no other person has or will have a direct
or indirect beneficial interest in such Shares and the undersigned will not
sell, hypothecate or otherwise transfer his Shares except in accordance with
applicable securities laws as approved by counsel for the Company.
(b) In evaluating the suitability of an additional investment in the
Company, the undersigned has not relied upon any representations or other
information (whether oral or written) from the Company, other than publicly
available information and no oral or written representations have been made or
oral or written information furnished to the undersigned or his advisors, if
any, in connection with the offering of the Shares which is in any way
inconsistent with publicly available information.
(c) The Company has made available to the undersigned all documents
and information that the undersigned has requested relating to an additional
investment in the Company.
35
<PAGE>
(d) The undersigned has carefully considered and has, to the extent
he believes such discussion necessary, discussed with his professional legal,
tax and financial advisers the suitability of an additional investment in the
Company for his particular tax and financial situation and he has determined
that the Shares are a suitable investment for him.
(e) All information which the undersigned has provided to the
Company concerning himself and his financial position is correct and complete as
the date set forth below, and if there should be any change in such information
prior to the acceptance of this Subscription Agreement by the Company, he will
immediately provide such information to the Company and will promptly send
confirmation of such information to the Company.
2. The foregoing representations and warranties are true and accurate as
of the date hereof, shall be true and accurate as of the date of the acceptance
hereof by the Company and shall survive thereafter. If such representations and
warranties shall not be true and accurate in any respect, the undersigned will,
prior to such acceptance, give written notice of such fact to the Company
specifying which representations and warranties are not true and accurate and
the reasons therefor.
3. The undersigned shall indemnify and hold harmless the Company or any of
its officers, employees, directors of control persons of any such entity who was
or is a party or is threatened to be made a party to any threatened pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of or arising from any actual or alleged
misrepresentation or misstatement of facts or omission to represent or state
facts made by the undersigned to the Company concerning himself or his financial
position in connection with the offering or sale of the Shares which is not
remedied by timely notice to the Company as provided above, against losses,
liabilities and expenses for which the Company or any of its officers,
employees, directors or control persons of any such entity have not otherwise
been reimbursed (including attorneys' fees, judgments, fines and amounts paid in
settlement) as actually and reasonably incurred by such person or entity in
connection with such action, suit or proceeding.
4. I understand that the Company is issuing 34,317 shares of its common
stock to partially finance its purchase of not less than 424,680 shares of
common stock of Capital State Bank, a West Virginia banking corporation.
C. FINANCIAL POSITION AND EXPERIENCE OF INDIVIDUAL INVESTORS
I represent and warrant to the Company as follows:
(a) My occupation is (1) Attorney
---------------------------------------------
(2) Chairperson Bd of Directors S.B.V. Bancorp
---------------------------------------------
Inc.
---------------------------------------------
(b) The proposed investment is financially suitable for me. I have the
financial means to make the investment giving due consideration to
its illiquidity and other risks associated with the investment.
After making the investment, I will continue to have sufficient
liquidity to meet my cash needs.
(c) I have an on-going relationship with an accountant and/or legal, tax
or business advisors with whom I review tax or financial matters
(even though I may not have reviewed this investment with them).
(1)
---------
(Please initial if correct)
(d) In reviewing an additional investment in the Company I have
consulted with, or received information or advice from, the persons
listed below:
[Please name and indicate the professional or business relationship
of each person to you (e.g., attorney, accountant, business
advisor). Such persons need not complete any certificates or make
any representation to the Company merely because they are named here
as persons with whom you consulted.]
(e) My educational background is as follows:
School: WVU
-----------------------------------------------------------
Major: Political Science; Law
-----------------------------------------------------------
Degree: B.A J.D.
-----------------------------------------------------------
36
<PAGE>
(f) My Occupation, Employer(s) for the last five years and positions
held are set forth below:
1975 - present - Bean & Bean Attys.: Lawyer
------------------------------------------------------------------
1995 - present - South Branch Valley Bancorp, Inc. Chairperson
------------------------------------------------------------------
(g) My experience with the Company includes being the current owner of
4,615 shares of common stock of the Company and serving as a
director since October 1994.
(h) My experience in investments is set forth below (indicate whether
public or private, partnerships in real estate, oil and gas,
equipment leasing, stocks, bonds, etc ):
Trustee - Bean & Bean Profit Sharing Plan
-----------------------------------------------------------------
Self direct own investments
-----------------------------------------------------------------
(i) Set forth below is additional information which reflects my
experience in financial and business matters which enables me to
evaluate the merits and risks of this investment.
--------------------------------------------------------------------
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement this 18th day of February, 1997.
575 $ 25,012.50
- -------------------------------- ----------------
Number of Shares Subscribed Total Purchase Price
for at $ 43.50 per Share.
Individual:
/s/ Oscar M. Bean
- --------------------------------
Oscar M. Bean
Accepted by:
South Branch Valley Bancorp, Inc.,
a West Virginia corporation
By: /s/ C. Maddy
- ---------------------------------
Its: President
Date of Acceptance:
February 18, 1997
37
Exhibit 10(g)
- ------------------------------------------------------------------------------
SUBSCRIPTION AGREEMENT
FOR SHARES OF COMMON STOCK
OF SOUTH BRANCH VALLEY BANCORP, INC.
- ------------------------------------------------------------------------------
This Subscription Agreement is made by and between South Branch
Valley Bancorp, Inc., a West Virginia corporation (the "Company") and the
undersigned current investor and holder of common stock in the Company who is
subscribing hereby for share's of the Company common stock previously authorized
but not issued (the "Shares") and for which no offering materials are being
published.
In consideration of the Company's agreement to accept the
undersigned's offer to purchase Shares of the Company upon the terms and
conditions set forth herein, the undersigned agrees and represents as follows:
A. SUBSCRIPTION
1. The undersigned hereby subscribes to purchase Shares at $43.50 per
share in the amount indicated on the signature page of this Subscription
Agreement (page 6). Simultaneously with the execution of this Subscription
Agreement, the undersigned is paying and delivering to the Company the amount
set forth on the signature page, below, in the form of a check or wire transfer
(the "Subscription Deposit") payable to "South Branch Valley Bancorp-Stock
Subscription Account" to be deposited with the South Branch Valley National
Bank, a subsidiary of the Company.
2. The undersigned understands that the Subscription Deposit will not be
placed in an escrow account but will be segregated by the Company in its books
of account until used in connection with the Capital State Bank transaction
described below (the "Contemplated Transaction"). The Subscription Deposit will
be placed by the Company in an escrow account at Potomac Valley Bank in
fulfillment of Company's obligations to place the purchase price for the
Contemplated Transaction in escrow by February 18, 1997. The undersigned
understands that the escrow account was established for the benefit of the
Company and the sellers of the shares of Capital State Bank, Inc. (the "Escrow
Account") which are the subject of the Contemplated Transaction, and that the
undersigned has no right to or claim on the Escrow Account. The undersigned
acknowledges that the Contemplated Transaction is subject to various
contingencies, including but not limited to the Company's ability to obtain
prior regulatory approval. In the event the Contemplated Transaction is not
consummated within twelve (12) months, the Subscription Deposit will be promptly
returned without interest unless otherwise agreed to by the parties.
B. REPRESENTATION AND WARRANTIES
1. The undersigned hereby represents and warrants to, and agrees
with the Company, as follows:
(a) The Shares are being purchased for his own account, for
investment purposes only, and not for the account of any other person, and not
with a view to distribution, assignment or resale to others or to
fractionalization in whole or in part. In furtherance thereof, the undersigned
represents, warrants, and agrees that no other person has or will have a direct
or indirect beneficial interest in such Shares and the undersigned will not
sell, hypothecate or otherwise transfer his Shares except in accordance with
applicable securities laws as approved by counsel for the Company.
(b) In evaluating the suitability of an additional investment in the
Company, the undersigned has not relied upon any representations or other
information (whether oral or written) from the Company, other than publicly
available information and no oral or written representations have been made or
oral or written information furnished to the undersigned or his advisors, if
any, in connection with the offering of the Shares which is in any way
inconsistent with publicly available information.
(c) The Company has made available to the undersigned all documents
and information that the undersigned has requested relating to an additional
investment in the Company.
(d) The undersigned has carefully considered and has, to the extent
he believes such discussion necessary, discussed with his professional legal,
tax and financial advisers the suitability of an additional investment in the
Company for his particular tax and financial situation and he has determined
that the Shares are a suitable investment for him.
38
<PAGE>
(e) All information which the undersigned has provided to the
Company concerning himself and his financial position is correct and complete as
the date set forth below, and if there should be any change in such information
prior to the acceptance of this Subscription Agreement by the Company, he will
immediately provide such information to the Company and will promptly send
confirmation of such information to the Company.
2. The foregoing representations and warranties are true and accurate as
of the date hereof, shall be true and accurate as of the date of the acceptance
hereof by the Company and shall survive thereafter. If such representations and
warranties shall not be true and accurate in any respect, the undersigned will,
prior to such acceptance, give written notice of such fact to the Company
specifying which representations and warranties are not true and accurate and
the reasons therefor.
3. The undersigned shall indemnify and hold harmless the Company or any of
its officers, employees, directors of control persons of any such entity who was
or is a party or is threatened to be made a party to any threatened pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of or arising from any actual or alleged
misrepresentation or misstatement of facts or omission to represent or state
facts made by the undersigned to the Company concerning himself or his financial
position in connection with the offering or sale of the Shares which is not
remedied by timely notice to the Company as provided above, against losses,
liabilities and expenses for which the Company or any of its officers,
employees, directors or control persons of any such entity have not otherwise
been reimbursed (including attorneys' fees, judgments, fines and amounts paid in
settlement) as actually and reasonably incurred by such person or entity in
connection with such action, suit or proceeding.
4. I understand that the Company is issuing 34,317 shares of its common
stock to partially finance its purchase of not less than 424,680 shares of
common stock of Capital State Bank, a West Virginia banking corporation.
C. FINANCIAL POSITION AND EXPERIENCE OF INDIVIDUAL INVESTORS
I represent and warrant to the Company as follows:
(a) My occupation is (1) Merchant
--------------------------------------------
(2)
--------------------------------------------
(b) The proposed investment is financially suitable for me. I have the
financial means to make the investment giving due consideration to
its illiquidity and other risks associated with the investment.
After making the investment, I will continue to have sufficient
liquidity to meet my cash needs.
(c) I have an on-going relationship with an accountant and/or legal, tax
or business advisors with whom I review tax or financial matters
(even though I may not have reviewed this investment with them).
(1)
--------
(Please initial if correct)
(d) In reviewing an additional investment in the Company I have
consulted with, or received information or advice from, the persons
listed below:
[Please name and indicate the professional or business relationship
of each person to you (e.g., attorney, accountant, business
advisor). Such persons need not complete any certificates or make
any representation to the Company merely because they are named here
as persons with whom you consulted.]
(e) My educational background is as follows:
School: West Virginia University
----------------------------------------------------------
Major: Accounting - Finance
----------------------------------------------------------
Degree: B. S.
----------------------------------------------------------
39
<PAGE>
(f) My Occupation, Employer(s) for the last five years and positions
held are set forth below:
President Hawse Food Market, Inc.
-------------------------------------------------------------------
-------------------------------------------------------------------
(g) My experience with the Company includes being the current owner of
2,800 shares of common stock of the Company and serving as a
director since 1988.
(h) My experience in investments is set forth below (indicate whether
public or private, partnerships in real estate, oil and gas,
equipment leasing, stocks, bonds, etc ):
Stock (public/private), Bonds (public), Real Estate(private), etc.
-------------------------------------------------------------------
(I) Set forth below is additional information which reflects my
experience in financial and business matters which enables me to
evaluate the merits and risks of this investment.
Too many to answer here. I have adequate knowledge to
-------------------------------------------------------------------
properly evaluate this investment.
------------------------------------------------------------------
IN WITNESS WHEREOF, the undersigned has executed this Subscription
Agreement this 18th day of February, 1997.
300 $ 13,050.00
- ------------------------------- ----------------
Number of Shares Subscribed Total Purchase Price
for at $ 43.50 per Share.
Individual:
/s/ Thomas J. Hawse III
- -------------------------------
Thomas J. Hawse, III
Accepted by:
South Branch Valley Bancorp, Inc.,
a West Virginia corporation
By: /s/C. Maddy
- -------------------------------
Its: President
Date of Acceptance:
February 18, 1997
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0000811808
<NAME> SOUTH BRANCH VALLEY NATIONAL BANK
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 3,443,963
<INT-BEARING-DEPOSITS> 1,553,000
<FED-FUNDS-SOLD> 1,736,449
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 30,627,647
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 86,998,223
<ALLOWANCE> (815,089)
<TOTAL-ASSETS> 132,366,369
<DEPOSITS> 101,830,084
<SHORT-TERM> 6,773,348
<LIABILITIES-OTHER> 806,286
<LONG-TERM> 8,991,002
0
0
<COMMON> 956,562
<OTHER-SE> 11,516,297
<TOTAL-LIABILITIES-AND-EQUITY> 132,366,369
<INTEREST-LOAN> 2,011,020
<INTEREST-INVEST> 486,491
<INTEREST-OTHER> 13,304
<INTEREST-TOTAL> 2,510,815
<INTEREST-DEPOSIT> 1,100,403
<INTEREST-EXPENSE> 1,245,818
<INTEREST-INCOME-NET> 1,264,997
<LOAN-LOSSES> 30,000
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 821,644
<INCOME-PRETAX> 509,638
<INCOME-PRE-EXTRAORDINARY> 509,638
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 338,581
<EPS-PRIMARY> .89
<EPS-DILUTED> .89
<YIELD-ACTUAL> 4.40
<LOANS-NON> 125,114
<LOANS-PAST> 271,615
<LOANS-TROUBLED> 54,647
<LOANS-PROBLEM> 1,826,236
<ALLOWANCE-OPEN> 858,423
<CHARGE-OFFS> 84,822
<RECOVERIES> 11,488
<ALLOWANCE-CLOSE> 815,089
<ALLOWANCE-DOMESTIC> 815,089
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
