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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
FORM 11-K
Annual Report
Pursuant to Section 15(d) of the Securities Exchange Act of 1934. For the fiscal
year ended December 31, 1995.
A. First American Savings Bank, F.S.B. 401(k) Plan
(the "Plan")
(Full title of the Plan)
1215 Superior Avenue
Cleveland, Ohio 44114
B. Charter One Financial, Inc.
1215 Superior Avenue
Cleveland, Ohio 44114
(Name of issuer of securities held pursuant to the Plan
and the address of its principal executive office)
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SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the Pension Committee, by the undersigned Charter One Bank, F.S.B., as
administrator of the employee benefit plan, has duly caused this annual report
to be signed on its behalf by the undersigned duly authorized.
Pension Committee of
CHARTER ONE BANK, F.S.B.
Administrator for the First American Savings
Bank, F.S.B. 401(k) Plan
By: /s/ROBERT J. VANA
----------------------
Robert J. Vana
Secretary
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FIRST AMERICAN SAVINGS BANK, F.S.B.
401 (K) PLAN
Financial Statements
for the Years Ended
December 31, 1995 and 1994, Supplemental Schedules
for the Year Ended December 31, 1995
and Independent Auditors' Report
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FIRST AMERICAN SAVINGS BANK, F.S.B. 401(K) PLAN
TABLE OF CONTENTS
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Page
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INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits,
December 31, 1995 and 1994 2-3
Statements of Changes in Net Assets Available for Benefits
for the Years Ended December 31, 1995 and 1994 4-5
Notes to Financial Statements 6-8
SUPPLEMENTAL SCHEDULES:
Item 27a - Schedule of Assets Held for Investment Purposes,
December 31, 1995 9
Item 27d - Schedule of Reportable Transactions
for the Year Ended December 31, 1995 10
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[LOGO]
Telephone: (216) 589-1300
INDEPENDENT AUDITORS' REPORT
First American Savings Bank, F.S.B.
401(k) Plan:
We have audited the accompanying statements of net assets available for benefits
of the First American Savings Bank, F.S.B. 401(k) Plan (the "Plan") as of
December 31, 1995 and 1994, and the related statements of changes in net assets
available for benefits for the years then ended. These financial statements are
the responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan at December 31, 1995
and 1994 and the changes in its net assets available for benefits for the years
then ended in conformity with generally accepted accounting principles.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of (1) assets held for investment purposes as of December 31, 1995 and (2)
reportable transactions for the year ended December 31, 1995 are presented for
the purpose of additional analysis and are not a required part of the basic
financial statements, but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The supplemental
information by fund in the statements of net assets available for benefits and
the statements of changes in net assets available for benefits is presented for
the purpose of additional analysis rather than to present the net assets
available for benefits and changes in net assets available for benefits of the
individual funds. The supplemental schedules and supplemental information by
fund is the responsibility of the Plan's management. Such supplemental schedules
and supplemental information by fund have been subjected to the auditing
procedures applied in our audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects when considered in relation
to the basic financial statements taken as a whole.
/S/ Deloitte & Touche LLP
June 17, 1996
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FIRST AMERICAN SAVINGS BANK, F.S.B. 401(K) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31,1995
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Supplemental Information By Fund
--------------------------------
Special
Fixed Fixed Company
Income Income Stock
Fund Fund Fund Total
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ASSETS:
Investments, at fair value:
KeyCorp Investment Funds:
Employee Benefits Money Market Fund $ 1,054 467 $ 1,056 $ 2,577
Managed GTD Investment Contract Fund 319,561 319,561
Victory Government Mortgage Fund 214,538 214,538
Charter One Financial, Inc. common stock
(6,060 shares) 185,588 185,588
Cash 90 90
-------- -------- -------- --------
NET ASSETS AVAILABLE FOR BENEFITS $320,615 $215,095 $186,644 $722,354
======== ======== ======== ========
</TABLE>
See notes to financial statements.
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FIRST AMERICAN SAVINGS BANK, F.S.B. 401(K) PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
DECEMBER 31, 1994
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Supplemental Information By Fund
--------------------------------
Special
Fixed Fixed Company
Income Income Stock
Fund Fund Fund Total
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ASSETS:
Investments, at fair value:
Society National Bank Investment Funds:
Employee Benefits Money Market Fund $ 1,010 $ 1,012 $ 2,022
Managed GTD Investment Contract Fund 303,958 303,958
The Victory Portfolios:
Victory Government Mortgage Fund 199,241 199,241
Victory Prime Obligations Fund $ 1,021 1,021
Charter One Financial, Inc. common stock
(6,249 shares) 118,731 118,731
Cash 80 80
-------- -------- -------- --------
NET ASSETS AVAILABLE FOR BENEFITS $304,968 $200,333 $119,752 $625,053
======== ======== ======== ========
</TABLE>
See notes to financial statements.
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FIRST AMERICAN SAVINGS BANK, F.S.B. 401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1995
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Supplemental Information by Fund
--------------------------------
Special
Fixed Fixed Company
Income Income Stock
Fund Fund Fund Total
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ADDITIONS:
Investment income:
Interest and dividends $ 83 $ 14,856 $ 4,835 19,774
Net appreciation in fair value of investments 20,980 15,979 72,473 109,432
-------- --------- -------- --------
Total investment income 21,063 30,835 77,308 129,206
DEDUCTIONS - Distributions 81183 13,306 10,416 31,905
INTERFUND TRANSFERS 2,767 (2,767)
-------- --------- -------- --------
INCREASE IN NET ASSETS AVAILABLE
FOR BENEFITS 15,647 14,762 66,892 97,301
NET ASSETS AVAILABLE FOR
BENEFITS, BEGINNING OF YEAR 304,968 200,333 119,752 625,053
-------- --------- -------- --------
NET ASSETS AVAILABLE FOR
BENEFITS, END OF YEAR $320,615 $ 215,095 $186,644 $722,354
======== ========= ======== ========
</TABLE>
See notes to financial statements.
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FIRST AMERICAN SAVINGS BANK, F.S.B. 401(K) PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED DECEMBER 31, 1994
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Supplemental Information by Fund
--------------------------------
Special
Fixed Fixed Company
Income Income Stock
Fund Fund Fund Total
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ADDITIONS:
Investment income:
Interest and dividends $ 49 $ 16,475 $ 3,669 $ 20,193
Net appreciation (depreciation)
in fair value of investments 17,571 (20,000) (4,844) (7,273)
-------- --------- --------- ---------
Total investment income 17,620 (3,525) (1,175) 12,920
DEDUCTIONS - Distributions 9,174 16,990 26,164
-------- --------- --------- ---------
INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 8,446 (20,515) (1,175) (13,244)
NET ASSETS AVAILABLE FOR
BENEFITS, BEGINNING OF YEAR 296,522 220,848 120,927 638,297
-------- --------- --------- ---------
NET ASSETS AVAILABLE FOR
BENEFITS, END OF YEAR $304,968 $ 200,333 $ 119,752 $ 625,053
======== ========= ========= =========
See notes to financial statements.
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FIRST AMERICAN SAVINGS BANK, F.S.B. 401(K) PLAN
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1995 AND 1994
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1. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The financial statements are prepared using the
accrual basis of accounting.
VALUATION OF INVESTMENTS - Investments in common stock are stated at fair
value as measured by quoted market prices in an active market. Investment
funds are stated at values determined by the trustee based upon the
market values of the underlying assets of the fund. Investments are
valued quarterly.
EXPENSES - Substantially all costs of administering the First American
Savings Bank, F.S.B. 401(k) Plan (the "Plan") are paid by Charter One
Bank, F.S.B. (the "Bank"). Such expenses are not material to the
accompanying financial statements.
2. DESCRIPTION OF THE PLAN
The following description of the Plan is provided for general information
purposes only. Participants should refer to the Plan agreement for more
complete information.
GENERAL - The Plan was established by First American Savings Bank, F.S.B.
("First American") effective January 1, 1989 and has been amended on
various dates. The Plan is a nonstandardized defined contribution
prototype plan through New England Mutual Life Insurance Company and is
provided for the exclusive benefit of eligible employees to encourage and
assist them in adopting a regular savings program and to provide those
employees with additional security upon retirement.
ADMINISTRATION - The Plan was administered by the Pension Committee (the
"Committee") through October 1995. At that time, the Committee was
dissolved and the Compensation Committee, appointed by the Board of
Directors of the Bank, assumed the responsibility for the administration
of the Plan. The Compensation Committee has the responsibility for
interpreting the Plan and authorizing disbursements. The assets of the
plan are held and administered by the trustee of the Plan, Key Trust
Company of Ohio, N.A. (Society National Bank prior to December 31, 1994).
ELIGIBILITY - Prior to January 1, 1993, employees of First American were
eligible to participate in the Plan if they had attained age 20-1/2 and
had earned six months of service. Effective January 1, 1993, no new
participants are accepted by the Plan (see Note 3).
CONTRIBUTIONS - Prior to January 1, 1993, the Plan provided for
contributions by employees and for matching contributions by the Bank
based on percentages of employee contributions. Each participating
employee elected to enter into a written salary reduction agreement with
the Bank, thereby contributing to his or her salary reduction account a
percentage of compensation, not to exceed twenty percent. Income taxes
are deferred on the amounts contributed and related earnings on these
amounts until they are withdrawn from the Plan.
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The Bank contributed to the participant's employer account an amount
equal to the sum of twenty-five percent of the first four percent of the
participant's compensation reduction pursuant to the participant's salary
reduction agreement with the Bank. Contributions were limited under
certain provisions of the 1986 Internal Revenue Code. Income taxes are
deferred on these amounts and their related earnings until they are
withdrawn from the Plan.
Effective January 1, 1993, contributions to the Plan by employees and the
Bank were terminated (see Note 3).
PARTICIPANT ACCOUNT BALANCES - Contributions under the salary reduction
agreement were credited to a participant's salary reduction account. The
contributions along with any related investment gains or losses are fully
vested after three years of service.
Contributions by the Bank, which were credited to the participant's
employer account, and related investment gains and losses, vest
immediately.
FUNDS - The Plan provides for the establishment of investment funds under
which the Plan's assets, liabilities, and participant account balances
are segregated. The investment options offered under the Plan consist of
the following:
- Special Fixed Income Fund - The assets of this fund are invested
in the Managed GTD Investment Contract Fund, a collective
investment fund that invests primarily in insurance company
investment contracts and money market instruments. Assets may also
be invested on an interim basis in a Key Trust money market fund.
- Fixed Income Fund - The assets of this fund are invested in the
Victory Government Mortgage Fund, a collective investment fund
that invests primarily in U.S. government securities of maturities
between three and eight years and repurchase agreements
collateralized by these instruments. Assets may also be invested
on an interim basis in a Key Trust money market fund.
- Company Stock Fund - The assets of this fund are invested in
shares of common stock of Charter One Financial, Inc. ("Charter
One"), the Bank's parent company. Assets may also be invested on
an interim basis in a Key Trust money market fund.
Participants specify the desired allocation of their account balances to
the various funds. The allocations may be changed on certain prescribed
dates each year.
DISTRIBUTIONS - Payment of vested benefits is required to commence at age
70-1/2. However, participants may request distributions at anytime once
they attain age 59-1/2. Vested benefits are also payable upon a
participant's death, total and permanent disability, or other termination
of employment. Hardship withdrawals are available to in-service
participants during times of financial hardship. Amounts payable can be
paid by one of the following methods: (1) in a single lump-sum payment;
or (2) in a series of annuity payments as elected by the participant
subject to certain limitations. Distributions from the Plan are subject
to federal and state taxation guidelines.
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TAX STATUS - The Internal Revenue Service has determined and informed the
Bank by a letter dated October 25, 1995, that the Plan, as designed, is
qualified and the trust established under the Plan is tax-exempt, under
the appropriate sections of the Code. The Plan has not been amended since
receiving the determination letter. The Bank believes that the Plan is
currently designed and being operated in compliance with the applicable
requirements of the Internal Revenue Code. Therefore, no provisions for
income taxes have been made in the Plan's financial statements.
ESTIMATES - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures 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 may differ from
these estimates.
PLAN TERMINATION - The Company has the right to terminate the Plan at any
time subject to the provisions of ERISA.
3. MERGER
In September 1992, First American BanCorp and its wholly-owned
subsidiary, First American Savings Bank, F.S.B., merged into an Ohio
corporation newly formed as a wholly-owned subsidiary of Charter One
Financial, Inc. (Charter One) pursuant to which the outstanding shares of
First American BanCorp common stock were converted into shares of Charter
One common stock. As a result, on December 31, 1992, the Plan was frozen
and thereafter no further employee or company contributions were accepted
in the Plan. On January 1, 1993, all participants in the Plan were given
the option to begin contributing to the 401(k) plan in existence at
Charter One.
4. SECURITY TRANSACTIONS WITH PARTIES-IN-INTEREST
The Company Stock Fund invests in shares of common stock of Charter One
Financial, Inc. The Plan's purchases and sales of Charter One common
stock during 1995 and 1994 were not significant.
************
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FIRST AMERICAN SAVINGS BANK, F.S.B. 401(K) PLAN
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1995
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(a) (b) (c) (d) (e)
Identity of Issuer
Borrower, Lessor Description Current Current
or Similar Party of Investment Cost Value
<S> <C> <C> <C>
* Charter One Financial Inc. 6,060 shares of common stock $ 43,530 $185,588
* The Winsbury Company Victory Government Mortgage Fund 213,069 214,538
* Key Trust Company of Ohio Employee Benefits Money Market Fund 2,577 2,577
* Key Trust Company of Ohio Managed GTD Investment Contract Fund 295,796 319,561
-------- --------
Total $554,972 $722,264
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FIRST AMERICAN SAVINGS BANK, F.S.B. 401(K) PLAN
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1995
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(a) (b) (c) (d) (e) (f) (g) (h) (i)
Current
Value
Expense of Net
Incurred Cost Asset on Gain
Identity of Purchase Selling Lease With of Transaction or
Party Involved Description of Asset Price Price Rental Transaction Asset Date (Loss)
Series of Transactions:
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Key Trust Company of Ohio Victory Government Mortgage Fund $16,041 $16,041 $16,041 N/A
Key Trust Company of Ohio Victory Government Mortgage Fund $16,731 16,898 16,731 $(167)
Key Trust Company of Ohio Employee Benefits Money Market Fund 40,010 40,010 40,010 N/A
Key Trust Company of Ohio Employee Benefits Money Market Fund 39,453 39,453 39,453 None
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