SECURITIES AND EXCHANGE COMMISSION
450 5th Street, N.W.
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934
Date of Report (date of earliest event reported) December 16, 1995
1ST BANCORP
- --------------------------------------------------------------------------------
(Exact Name of Registrant, as specified in its charter)
INDIANA 33-24587 35-1775411
- --------------------------------------------------------------------------------
(State of Other Jurisdiction (Commission (IRS Employer
Of Incorporation) File Number) Identification No.)
101 N. Third Street, Vincennes, Indiana 47591
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code (812) 882-4528
N/A
- --------------------------------------------------------------------------------
(Former Name or Former Address, if changed since last report)
<PAGE>
Item 2. Disposition of Assets
On December 16, 1995, 1ST BANCORP completed the sale of certain assets subject
to certain liabilities of two retail branch offices of its thrift subsidiary,
First Federal Bank, A Federal Savings Bank (the "Bank"), to two of STAR
Financial Group, Inc.'s subsidiary banks (the "Purchasers"). STAR Financial
Bank, Marion, Indiana ("STAR Marion") purchased certain assets and assumed
certain liabilities of First Federal Bank's retail branch office located in
Kokomo, Indiana. STAR Financial Bank, Indianapolis, Indiana ("STAR
Indianapolis") purchased certain assets and assumed certain liabilities of First
Federal Bank's retail branch office located in Tipton, Indiana.
The sale of the branch offices included approximately $78.5 million in deposits
and $28.4 million in mortgage and consumer loans. The sale also included the
retail branch offices' premises and equipment. The Bank transferred cash
totaling approximately $41.4 million to the Purchasers in connection with the
branch sales. The sale contributed approximately $4.5 million after income taxes
to 1ST BANCORP's stockholders' equity.
First Federal Bank, A Federal Savings Bank continues to operate a full service
retail banking office in Vincennes, Indiana and loan origination offices in
Evansville, Indianapolis, and New Albany, Indiana and Loveland (suburb of
Cincinnati), Centerville (suburb of Dayton), and Independence (suburb of
Cleveland), Ohio.
1
<PAGE>
Item 7. Pro Forma Financial Statements and Exhibits
The following pro forma financial information and exhibits are filed as a part
of this report:
Unaudited Pro Forma Consolidated Condensed Statement of Financial Condition -
September 30, 1995
Unaudited Pro Forma Consolidated Condensed Statement of Operations - Three
Months Ended September 30, 1995
Unaudited Pro Forma Consolidated Condensed Statement of Operations - Year Ended
June 30, 1995
Exhibit 2a. - Purchase and Assumption Agreement dated as of August 11, 1995
between the Bank and STAR Indianapolis is incorporated by reference to Exhibit
2(b) to 1ST BANCORP's Form 8-K dated August 11, 1995.
Exhibit 2b. - Purchase and Assumption Agreement dated as of August 11, 1995
between the Bank and STAR Marion is incorporated by reference to Exhibit 2(c) to
1ST BANCORP's Form 8-K dated August 11, 1995.
Exhibit 99. - Press Release
2
<PAGE>
1ST BANCORP AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL CONDITION
September 30, 1995
(Unaudited and in Thousands)
<TABLE>
<CAPTION>
Pro Forma Pro Forma
1ST BANCORP Adjustments Note after
as of 09/30/95 Increase (Decrease) Reference Adjustments
-------------- ------------------- --------- -----------
<S> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents
Interest-bearing deposits $ 10,882 ($ 4,427) A $ 6,455
Non-interest bearing deposits 2,081 (570) B 1,511
Cash and cash equivalents 12,963 (4,997) 7,966
Investment securities held to maturity 72,723 (31,170) C 41,553
Loans receivable, net 201,423 (28,369) D 173,054
Loans held for sale 7,496 7,496
Accrued interest receivable
Investment securities 1,026 1,026
Mortgage backed securities and loans 1,195 (174) E 1,021
Stock in FHLB of Indianapolis, at cost 3,876 3,876
Office premises and equipment 3,920 (863) F 3,057
Real estate owned 179 179
Prepaid expenses and other assets 5,659 (71) G 5,588
--------- --------- ---------
TOTAL ASSETS $ 310,460 ($ 65,642) $ 244,818
========= ========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits $ 207,426 ($ 78,473) H $ 128,953
Advances from FHLB and other borrowings 79,338 6,074 I 85,412
Advance payments by borrowers for
taxes and insurance 1,833 1,833
Accrued interest payable on deposits 725 (570) J 155
Accrued expenses and other liabilities 3,896 2,647 K 6,543
Deferred income taxes 378 378
--------- --------- ---------
Total Liabilities 293,596 (70,322) 223,274
Stockholder's equity:
Preferred stock, no par value;
shares authorized of 2,000,000;
none outstanding - -
Common stock; $1 par value;
shares authorized of 5,000,000;
shares issued and outstanding
of 634,275 at June 30, 1995 640 640
Paid-in capital 2,914 2,914
Retained earnings, substantially restricted 13,488 4,502 L 17,990
Unrealized depreciation on securities (178) 178 M 0
--------- --------- ---------
Total Stockholders' Equity 16,864 4,680 21,544
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 310,460 ($ 65,642) $ 244,818
========= ========= =========
</TABLE>
3
<PAGE>
1ST BANCORP AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
Three Months Ended September 30, 1995
(Unaudited and in Thousands)
<TABLE>
<CAPTION>
1ST BANCORP Pro Forma Pro Forma
Three Months Adjustments Note after
Ended 09/30/95 Increase(Decrease) Reference Adjustments
-------------- ------------------ --------- -----------
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans and mortgage-backed securities $ 4,238 ($ 600) A $ 3,638
Investment securities 1,172 (655) B 517
Other short-term investments and
interest bearing deposits 217 217
------- ------- -------
Total Interest Income 5,627 (1,256) 4,371
INTEREST EXPENSE:
Deposits 2,772 (1,050) C 1,722
Short-term borrowings 24 24
FHLB advances and other borrowings 1,163 96 D 1,259
------- ------- -------
Total Interest Expense 3,959 (954) 3,005
NET INTEREST INCOME BEFORE PROVISION
FOR LOAN LOSSES 1,668 (302) 1,366
Provision for loan losses 25 25
------- ------- -------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 1,643 (302) 1,341
NON-INTEREST INCOME:
Fees and service charges 140 (11) E 129
Net gain on sales of investment
securities and trading
account securities 1 1
Net gain on sales of loans
and mortgage-backed securities 312 (11) F 301
Other 577 (49) G 528
------- ------- -------
Total Non-Interest Income 1,030 (71) 959
NON-INTEREST EXPENSE:
Compensation and employee benefits 1,034 (283) H 751
Net occupancy 205 (57) I 148
Federal deposit insurance premiums 136 (57) J 79
Other 515 (63) K 452
------- ------- -------
Total Non-Interest Expense 1,890 (460) 1,430
Earnings Before Income Taxes 783 87 870
Income Taxes 295 32 L 324
------- ------- -------
NET EARNINGS $ 488 $ 55 $ 546
======= ======= =======
EARNINGS PER SHARE:
Primary $0.76 $ 0.85
Fully-diluted $0.76 $ 0.85
</TABLE>
4
<PAGE>
1ST BANCORP AND SUBSIDIARIES
PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS
Twelve Months Ended June 30, 1995
(Unaudited and in Thousands)
<TABLE>
<CAPTION>
1ST BANCORP Pro Forma Pro Forma
12 Months Adjustments Note after
Ended 06/30/65 Increase (Decrease) Reference Adjustments
-------------- ------------------- --------- -----------
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans and mortgage-backed securities $15,146 ($2,402) A $12,744
Investment securities 4,084 (2,620) B 1,464
Trading account securities 8 8
Other short-term investments
and interest bearing deposits 665 665
------ ------ ------
Total Interest Income 19,903 (5,022) 14,881
INTEREST EXPENSE:
Deposits 8,977 (4,091) C 4,886
Short-term borrowings 379 379
FHLB advances and other borrowings 4,063 723 D 4,786
------ ------ ------
Total Interest Expense 13,419 (3,368) 10,051
NET INTEREST INCOME BEFORE PROVISION
FOR LOAN LOSSES 6,484 (1,654) 4,830
Provision for loan losses 100 100
------ ------ ------
NET INTEREST INCOME AFTER PROVISION 6,384 (1,654) 4,730
FOR LOAN LOSSES
NON-INTEREST INCOME:
Fees and service charges 1,466 (45) E 1,421
Net gain on sales of investment
securities and trading
account securities 18 18
Net gain on sales of loans and
mortgage-backed securities 580 (89) F 491
Other 3,806 (194) G 3,612
------ ------ ------
Total Non-Interest Income 5,870 (327) 5,543
NON-INTEREST EXPENSE:
Compensation and employee benefits 4,442 (869) H 3,573
Net occupancy 815 (222) I 593
Federal deposit insurance premiums 494 (238) J 256
Other 2,633 (205) K 2,428
------ ------ ------
Total Non-Interest Expense 8,384 (1,533) 6,851
Earnings Before Income Taxes 3,870 (448) 3,422
Income Taxes 1,440 (167) L 1,273
------ ------ ------
NET EARNINGS $ 2,430 ($ 282) $ 2,148
======= ======= =======
EARNINGS PER SHARE:
Primary $3.92 $ 3.47
Fully-diluted $3.90 $ 3.45
</TABLE>
5
<PAGE>
1ST BANCORP AND SUBSIDIARIES
Notes to Pro Forma Consolidated Condensed Financial Statements
(Unaudited and in Thousands)
1. Historical Data:
The historical data of 1ST BANCORP shown in the pro forma Consolidated Condensed
Statement of Operations for the year ended June 30, 1995, represents 1ST
BANCORP's results of operations for its fiscal year ended June 30, 1995 as
reported on Form 10-K.
The historical data of 1ST BANCORP shown in the pro forma Consolidated Condensed
Statement of Financial Condition as of September 30, 1995, represents 1ST
BANCORP's financial condition as of September 30, 1995 as reported on Form 10-Q.
The historical data of 1ST BANCORP shown in the pro forma Consolidated Condensed
Statement of Operations for the three months ended September 30, 1995,
represents 1ST BANCORP's results of operations as reported in the September 30,
1995 Form 10-Q.
2. Pro Forma Consolidated Condensed Statement of Financial Condition:
The following are adjustments necessary to reflect the branch disposition
transaction on the Pro Forma Consolidated Condensed Statement of Financial
Condition as if it had occurred on September 30, 1995.
A. Net decrease in cash and interest-bearing deposits after funding the
deposits transferred during the transaction.
B. Vault cash transferred as part of this transaction.
C. Investment securities liquidated in the open market used to fund a portion
of the deposits transferred as part of branch disposition.
D. Net principal balance of mortgage and consumer loans sold to Purchasers to
fund a portion of the deposits transferred as part of the branch
disposition.
E. Mortgage and consumer loan accrued interest receivable transferred to
Purchasers for the loans sold in note 2D.
F. Book value of the two branch office buildings and land and the book value
of furniture, fixtures, and equipment of the two branch offices.
6
<PAGE>
G. Miscellaneous prepaid accounts primarily attributable to maintenance
agreements and deposit insurance premiums.
H. Net balance of savings and transaction account deposits transferred as part
of the branch disposition.
I. Additional borrowed funds necessary to fund a portion of the deposits
transferred as part of the branch disposition.
J. Accrued interest payable on deposits transferred as part of the branch
disposition.
K. Miscellaneous payable accounts primarily attributable to income taxes
payable.
L. Net gain from the sale of deposits, loans, investment securities, and
office premises net of estimated income taxes payable and miscellaneous
disposition costs.
M. Reduced unrealized depreciation on available for sale investment securities
as the securities were liquidated to fund a portion of the deposits
transferred during the branch disposition.
3. Pro Forma Consolidated Condensed Statement of Operations for the Three
Months Ended September 30, 1995:
The following are adjustments necessary to reflect the branch disposition
transaction on the Pro Forma Consolidated Condensed Statement of Operations as
if it had occurred on July 1, 1995.
A. Adjusted to reflect the reduced interest income for loans that were sold to
fund the deposits transferred as part of the branch disposition. The
weighted average yield for consumer and mortgage loans sold was used to
arrive at the adjustment.
B. Adjusted to reflect the reduced amount of interest income for investment
securities that were actually sold to fund the deposits transferred as part
of the branch disposition. An additional reduction was assumed as the
average balance for deposits during the quarter ended September 30, 1995
was greater than was actually transferred. Therefore, an additional $15.0
million of investment securities were assumed to be sold.
7
<PAGE>
C. Adjusted to reflect the deposit interest expense incurred for the deposits
transferred as part of the branch disposition.
D. Adjusted to reflect increased borrowed funds interest expense relating to
additional borrowed funds necessary to replace the deposits that were
transferred as part of the branch disposition.
E. Adjusted to reflect the amount of loan fees and service charges that the
two branches actually realized during the quarter ended September 30, 1995.
F. Adjusted to reflect the amount of gain on sale of loans that the two
branches actually realized during the quarter ended September 30, 1995.
G. Adjusted to reflect the amount of savings account and transaction account
fees and service charges that the two branches actually realized during the
quarter ended September 30, 1995.
H. Adjusted to reflect the amount of actual compensation and employee benefit
expense that the two branches actually incurred during the quarter ended
September 30, 1995.
I. Adjusted to reflect the amount of occupancy expense that the two branches
actually incurred during the quarter ended September 30, 1995.
J. Adjusted to reflect the portion of the deposit insurance premium that was
attributable to the average savings and transaction account balances for
the two branches during the quarter ended September 30, 1995.
K. Adjusted to reflect the amount of miscellaneous operating expenses that the
two branches actually incurred during the quarter ended September 30, 1995.
L. Adjusted to reflect increase in income tax liability, at the effective tax
rate for the corporation during fiscal year end 1995, attributable to
increase in net income after disposition of the two branch office
operations.
8
<PAGE>
4. Pro Forma Consolidated Condensed Statement of Operations for the Year Ended
June 30, 1995:
The following are adjustments necessary to reflect the branch disposition
transaction on the Pro Forma Consolidated Condensed Statement of Operations as
if it had occurred on July 1, 1994.
A. Adjusted to reflect the reduced interest income for loans that were sold to
fund the deposits transferred as part of the branch disposition. The
weighted average yield for consumer and mortgage loans sold was used to
arrive at the adjustment.
B. Adjusted to reflect the reduced amount of interest income for investment
securities that were actually sold to fund the deposits transferred as part
of the branch disposition. An additional reduction was assumed as the
average balance for deposits during the year ended June 30, 1995 was
greater than was actually transferred. Therefore, an additional $15.0
million of investment securities were assumed to be sold.
C. Adjusted to reflect the deposit interest expense incurred for the deposits
transferred as part of the branch disposition.
D. Adjusted to reflect increased borrowed funds interest expense relating to
additional borrowed funds necessary to replace the deposits that were
transferred as part of the branch disposition.
E. Adjusted to reflect the amount of loan fees and service charges that the
two branches actually realized during the year ended June 30, 1995.
F. Adjusted to reflect the amount of gain on sale of loans that the two
branches actually realized during the year ended June 30, 1995.
G. Adjusted to reflect the amount of savings account and transaction account
fees and service charges that the two branches actually realized during the
year ended June 30, 1995.
H. Adjusted to reflect the amount of actual compensation and employee benefit
expense that the two branches actually incurred during the year ended June
30, 1995.
I. Adjusted to reflect the amount of occupancy expense that the two branches
actually incurred during the year ended June 30, 1995.
J. Adjusted to reflect the portion of the deposit insurance premium that was
attributable to the average savings and transaction account balances for
the two branches during the year ended June 30, 1995.
K. Adjusted to reflect the amount of miscellaneous operating expenses that the
two branches actually incurred during the year ended June 30, 1995.
L. Adjusted to reflect increase in income tax liability, at the effective tax
rate for the corporation during fiscal year end 1995, attributable to
increase in net income after disposition of the two branch office
operations.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
1ST BANCORP
Date: December 28, 1995 By: /s/ C. James McCormick
C. James McCormick, Chairman and
Chief Executive Officer
Date: December 28, 1995 By: /s/ Frank D. Baracani
Frank D. Baracani, President
Date: December 28, 1995 By: /s/ Mary Lynn Stenftenagel
Mary Lynn Stenftenagel, Secretary-
Treasurer and Chief Accounting Officer
10
Exhibit 99. - Press Release
PRESS RELEASE
FOR IMMEDIATE RELEASE CONTACT: FRANK BARACANI
December 19, 1995 (812) 882-4528
1ST BANCORP ANNOUNCES SALE OF TWO INDIANA BRANCHES TO STAR FINANCIAL GROUP, INC.
Vincennes, Indiana - Vincennes-based 1ST BANCORP announced today that it closed
the previously announced sale of two branches of 1ST BANCORP's thrift
subsidiary, First Federal Bank, A Federal Savings Bank, located in Tipton and
Kokomo, Indiana to two of STAR Financial Group, Inc.'s subsidiary banks. The
Tipton office has become a branch of STAR Financial Bank, Indianapolis, Indiana,
based in Anderson, Indiana, and the Kokomo office has become a branch of STAR
Financial Bank, Marion, Indiana.
Deposits aggregating approximately $78.5 million and mortgage and consumer loans
with a principal balance of $28.4 million were transferred in the transaction.
"This transaction is expected to contribute approximately $4.5 million after tax
to our stockholders' equity and add in excess of $7.00 to our book value per
share," stated C. James McCormick, CEO and Chairman of the Board. "This is a
very favorable development for our shareholders and our institution."
David A. Noyes & company initiated this transaction and acted as financial
advisor to 1ST BANCORP.
1ST BANCORP (NASDAQ - FBCV) is a holding company whose principal subsidiary is
First Federal Bank, A Federal Savings Bank. The Bank will continue to operate a
retail banking office in Vincennes, Indiana and operates loan origination
offices in Indianapolis, New Albany, and Evansville, Indiana and Loveland
(suburb of Cincinnati) Centerville (suburb of Dayton), and Independence (suburb
of Cleveland), Ohio.
