<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________________________________
FORM 8
___________________________________________________
AMENDMENT TO APPLICATION OR REPORT
FILED PURSUANT TO SECTION 12, 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
PINNACLE BANC GROUP, INC.
(Exact name of registrant as specified in charter)
AMENDMENT NO. 1
The undersigned registrant hereby amends the following items, financial
statements, exhibits or other portions of its CURRENT REPORT on FORM 8-K as set
forth in the pages attached hereto:
Item 7. Financial Statements and Exhibits
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
PINNACLE BANC GROUP, INC.
By /s/ JOHN J. GLEASON, JR.
-------------------------------------------
John J. Gleason, Jr.
Vice Chairman and Chief Executive Officer
Dated: December 6, 1996
Page 1 of 8
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Pinnacle Banc Group, Inc. ("Pinnacle") is filing an amendment to its Form
8-K, dated September 30, 1996 and filed on October 15, 1996, which reported the
acquisition of Financial Security Corp. and its subsidiary, Security Federal
Savings and Loan Association of Chicago ("Security Federal"). At the time of
the filing, it was impractical to provide the financial information required by
Item 7 for the acquisition. As a result, Pinnacle is filing Form 8 to provide
the financial information as required.
2
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ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements of the Businesses Acquired.
Presented as Exhibit 1 are the unaudited interim income statements of
Financial Security for the nine months ended September 30, 1996 and 1995. The
audited consolidated financial statements for Financial Security have been
previously filed in Financial Security's Form 10-KSB for the year ended December
31, 1995, and are hereby incorporated by reference in this Form 8. At the date
of the acquisition, the total assets of Security Federal were 22% of total
consolidated assets of Pinnacle.
(b) Pro Forma Financial Information.
Presented on the following pages is pro forma financial information
for the purchase by Pinnacle on September 30, 1996 of all the 1,550,846 issued
and outstanding common shares of Financial Security. The total purchase price
was $44,325,712; common shares issued were 856,942 valued at $23,994,383; and
the remainder was paid in cash totalling $20,331,329.
At the date of the transaction, Financial Security was liquidated into
Pinnacle and Security Federal remained a separate subsidiary of Pinnacle. No
pro forma balance sheet as of September 30, 1996 is provided to reflect the
acquisition as the balances of Security Federal are included in the Consolidated
Balance Sheet of Pinnacle which are filed in Quarterly Report on Form 10-Q for
the period ended September 30, 1996. The unaudited pro forma condensed combined
statement of income for the nine months and twelve months ended September 30,
1996 and December 31, 1995, respectively, have been prepared to reflect the
acquisition as it had occurred on January 1, 1996 and 1995, respectively.
The pro forma financial information presented is not necessarily
indicative of the combined financial position or results of operations if the
acquisition had taken place on the date so indicated and may not necessarily be
indicative of future results subsequent to the acquisition.
3
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PRO FORMA CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
<TABLE>
<CAPTION>
PINNACLE
FINANCIAL PRO FORMA POST-FINANCIAL
(IN THOUSANDS; EXCEPT PER SHARE DATA) PINNACLE SECURITY ADJUSTMENTS SECURITY
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income . . . . . . . . . . . . . $38,923 $14,719 $ (92) [A] $52,894
(374) [C]
(282) [D]
Interest expense. . . . . . . . . . . . . 19,936 8,545 240 [B] 28,721
----------------------------------------------
Net interest income. . . . . . . . . . 18,987 6,174 (988) 24,173
Provision for loan losses . . . . . . . . 0 1,350 0 1,350
----------------------------------------------
Net interest income after provision
for loan losses . . . . . . . . . . 18,987 4,824 (988) 22,823
Other operating income. . . . . . . . . . 5,228 824 6,052
Net securities gains. . . . . . . . . . . 132 (1,191) (1,059)
Other operating expense . . . . . . . . . 18,291 7,292 428 [A] 25,974
(37) [A]
----------------------------------------------
Income before income taxes . . . . . . 6,056 (2,835) (1,379) 1,842
Provision (benefit) for income taxes. . . 1,078 (1,003) (323) [E] (248)
----------------------------------------------
Net Income . . . . . . . . . . . . . . $ 4,978 $(1,832) $(1,056) $ 2,090
----------------------------------------------
----------------------------------------------
Earnings per share:
Fully diluted. . . . . . . . . . . . . $ 1.14 $ (1.15) $ 0.40
Weighted average number of
shares outstanding:
Fully diluted. . . . . . . . . . . . . 4,350 1,587 5,207
</TABLE>
See notes to pro forma statements.
4
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PRO FORMA CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
FOR THE YEAR ENDED DECEMBER 31, 1995
<TABLE>
<CAPTION>
PINNACLE
FINANCIAL PRO FORMA POST-FINANCIAL
(IN THOUSANDS; EXCEPT PER SHARE DATA) PINNACLE SECURITY ADJUSTMENTS SECURITY
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income . . . . . . . . . . . . $53,297 $21,235 $ (123) [A] $73,533
(537) [C]
(339) [D]
Interest expense. . . . . . . . . . . . 25,739 12,657 387 [B] 38,783
----------------------------------------------
Net interest income. . . . . . . . . 27,558 8,578 (1,386) 34,750
Provision for loan losses. . . . . . . 0 100 0 100
----------------------------------------------
Net interest income after provision
for loan losses . . . . . . . . . 27,558 8,478 (1,386) 34,650
Other operating income. . . . . . . . . 7,225 989 8,214
Net securities gains. . . . . . . . . . 4,731 152 4,883
Other operating expense . . . . . . . . 23,882 7,039 571 [A] 31,443
(49) [A]
----------------------------------------------
Income before income taxes . . . . . 15,632 2,580 (1,908) 16,304
Provision (benefit) for income taxes. . 3,139 468 (455) [E] 3,152
----------------------------------------------
Net income . . . . . . . . . . . . . $12,493 $ 2,112 $(1,453) $13,152
----------------------------------------------
----------------------------------------------
Earnings per share:
Fully diluted. . . . . . . . . . . . $ 2.83 $ 1.33 $ 2.49
Weighted average number of
shares outstanding:
Fully diluted. . . . . . . . . . . . 4,419 1,587 5,276
</TABLE>
See notes to pro forma statements.
5
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NOTES TO PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The acquisition of Financial Security by Pinnacle has been accounted for as
a purchase and, as a result, certain adjustments have been made to the acquired
assets and liabilities and related income and expenses of Financial Security
based on estimated fair market values.
PRO FORMA ADJUSTMENTS
The following table sets forth the allocation of the purchase price to the
specific assets acquired:
<TABLE>
<CAPTION>
<S> <C>
Acquisition price. . . . . . . . . . . . . . . $ 44,325,712
Less net assets of Financial Security. . . . . (15,827,607)
------------
Adjusted purchase price. . . . . . . . . . . . 28,498,105
Security Federal equity at 9/30/96 . . . . . . (22,104,236)
------------
Excess of purchase price over adjusted equity . 6,393,869
Less adjustments to reflect assets and
liabilities at fair value:
Termination benefits. . . . . . . . . . . . 2,231,736
Land and buildings. . . . . . . . . . . . . 1,921,000
Real estate mortgages . . . . . . . . . . . (861,000)
------------
3,291,736
Deferred taxes . . . . . . . . . . . . . . . . (1,119,190)
------------
Net purchase accounting adjustments. . . . . . 2,172,546
Excess of cost over fair value of net assets
acquired (goodwill) . . . . . . . . . . . . $ 8,566,415
------------
------------
</TABLE>
The cash portion paid for the acquisition was incurred as follows:
1. Conversion of certain of Security Federal's securities to fund an
$8,000,000 special dividend to Pinnacle.
2. Use of excess cash in the form of interest-bearing deposits and
securities at Financial Security, in the amount of $7,085,000.
3. The remaining was incurred as debt to Pinnacle in the amount of
$5,055,000.
6
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NOTES TO PRO FORMA FINANCIAL INFORMATION (UNAUDITED) (continued)
[A] The amortization of goodwill and other purchase accounting adjustments
is as follows:
<TABLE>
<CAPTION>
Estimated
Annual Nine month
Estimated Amortization Amortization
Life (Years) (Income) Expense (Income) Expense
---------------------------------------------------
<S> <C> <C> <C>
Land and buildings. . . 39 $(49,000) $(37,000)
Real estate mortgages . 7 123,000 92,000
Goodwill. . . . . . . . 15 571,000 428,000
----------------------------------
$645,000 $483,000
----------------------------------
----------------------------------
</TABLE>
[B] Pro forma interest expense on the debt incurred has been calculated based
on the average rate on similar debt of Pinnacle of 6.33% for the first nine
months of 1996 and 7.65% for 1995.
[C] Reflects a reduction in interest income of $374,000 based on existing rates
for the first nine months of 1996 and $537,000 for 1995, on interest-bearing
deposits and securities on hand used to fund the cash portion of the
acquisition price.
[D] Reflects a reduction of interest income of $282,000 based on existing rates
for the first nine months of 1996 and $339,000 for 1995, on securities
converted to fund the cash portion of the acquisition price.
[E] Represents the tax effect at a rate of 34% of the purchase accounting
adjustments, the interest expense which would result from additional debt,
and reduction in interest income on interest-bearing deposits and
securities.
7
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(c) Exhibits.
Included as Exhibit 1 are the unaudited interim income statements of
Financial Security for the nine month periods ended September 30, 1996 and 1995.
All other applicable exhibits have been included in the Form 8-K,
dated September 30, 1996.
<PAGE>
___________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
EXHIBITS
TO
FORM 8
Annual Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
_________________________
PINNACLE BANC GROUP, INC.
(Exact name of registrant as specified in its charter)
___________________________________________________________________
<PAGE>
EXHIBIT 1
UNAUDITED INTERIM INCOME STATEMENTS
FINANCIAL SECURITY CORP.
<PAGE>
FINANCIAL SECURITY CORP.
STATEMENTS OF INCOME - INTERIM (UNAUDITED)
<TABLE>
<CAPTION>
For the nine months
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) ended September 30
-------------------
1996 1995
-------- -------
<S> <C> <C>
Interest Income:
Loans $11,635 $13,255
Securities 2,841 2,810
Interest-bearing deposits, Federal funds sold
and other 243 167
-------- -------
Interest income 14,719 16,232
-------- -------
Interest Expense:
Deposits 6,885 7,626
Borrowed funds 1,660 1,891
-------- -------
Interest expense 8,545 9,517
-------- -------
Net interest income 6,174 6,715
Provision for loan losses 1,350 100
-------- -------
Net interest income after provision for
loan losses 4,824 6,615
-------- -------
Other Income:
Banking services and other 824 840
Net securities gains (losses) (1,191) 31
-------- -------
Other income (367) 871
-------- -------
Other Expense:
Salaries, profit sharing and other
employee benefits 2,618 2,431
Occupancy and equipment 442 642
FDIC insurance 1,705 337
Other expenses 2,527 1,991
-------- -------
Other expense 7,292 5,401
-------- -------
Income before income taxes (2,835) 2,085
Provision (benefit) for income taxes (1,003) 580
-------- -------
Net income $(1,832) $ 1,505
-------- -------
-------- -------
Weighted average number of common and
common equivalent shares outstanding:
Primary 1,587 1,569
Fully diluted 1,587 1,581
Earnings per share:
Primary $ (1.15) $ 0.96
Fully diluted (1.15) 0.95
</TABLE>
