- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
NOVEMBER 1, 1996
1ST UNITED BANCORP
------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA 0-20254 65-0178023
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(STATE OR OTHER (COMMISSION FILE (IRS EMPLOYER
JURISDICTION OF NUMBER) IDENTIFICATION
INCORPORATION) NUMBER)
980 N. FEDERAL HIGHWAY, BOCA RATON, FLORIDA 33432
- ------------------------------------------- --------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (407) 392-4000
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<PAGE>
ITEM 2 ACQUISITION
On July 29, 1996 1st United Bancorp ("Bancorp") executed an acquisition
agreement (the "Agreement") to acquire Park Bankshares, Inc. ("Bankshares") and
its wholly owned subsidiary First National Bank of Lake Park ("First National").
A Form 8-K dated July 29, 1996 was filed upon the signing of this Agreement.
On November 1, 1996, the transaction was consummated. Under the terms of
the Agreement, Bancorp issued approximately 818,000 shares of Bancorp Common
Stock to the shareholders of Bankshares. The acquisition is anticipated to be
accounted for as a "pooling of interest" under generally accepted accounting
principles.
First National operated out of four locations; its main office in Lake
Park and a branch in each of West Palm Beach, Riviera Beach and Jupiter,
Florida. At June 30, 1996, Bankshares had net loans, deposits, assets and
shareholders' equity of approximately $32.6 million, $62.1 million, $67.2
million and $4.2 million, respectively. In addition at June 30, 1996 Bankshares
had no non performing loans or Other Real Estate Owned.
<PAGE>
ITEM 7 FINANCIAL STATEMENTS AND EXHIBITS
Exhibit 28.1 (a) Financial Statements
1. Audited financial statements for Park
Bankshares, Inc. for the years ended December 31,
1995 and 1994.
2. Unaudited financial statements for Park Bankshares, Inc.
for the six month period ended June 30, 1996 and 1995.
Exhibit 28.2 (b) Pro Forma Financial Information
<PAGE>
SIGNATURE
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.
1ST UNITED BANCORP
DATE: NOVEMBER 1, 1996 By: /s/ WARREN S. ORLANDO
---------------------
WARREN S. ORLANDO
PRESIDENT & CEO
EXHIBIT 28.1
1
CONSOLIDATED FINANCIAL STATEMENTS
AND REPORT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
PARK BANKSHARES, INC.
AND SUBSIDIARY
DECEMBER 31, 1995 AND 1994
<PAGE>
CONTENTS
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 1
FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS 2
CONSOLIDATED STATEMENTS OF INCOME 3
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY 4
CONSOLIDATED STATEMENTS OF CASH FLOWS 5
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 6
<PAGE>
REPORT OF INDEPENDENT CERTIFIED GRANT
PUBLIC ACCOUNTANTS
Board of Directors
Park Bankshares, Inc.
We have audited the accompanying consolidated balance sheets of Park Bankshares,
Inc. and Subsidiary as of December 31, 1995 and 1994, and the related
consolidated statements of income, stockholders' equity, and cash flows for the
years then ended. These financial statements are the responsibility of the
Bank'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 audits 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, the financial statements referred to above present fairly, in
all material respects, the financial position of Park Bankshares, Inc. and
Subsidiary as of December 31, 1995 and 1994, and the consolidated results of
their operations and their consolidated cash flows for the years then ended, in
conformity with generally accepted accounting principles.
As discussed in Note 6 to the financial statements, Park Bankshares, Inc.
adopted the provisions of Statement of Financial Accounting Standards No. 107,
"Disclosures About Fair Values of Financial Instruments," on January 1, 1995.
/s/ GRANT THORNTON LLP
- ------------------
West Palm Beach, Florida
February 9, 1996
<PAGE>
<TABLE>
<CAPTION>
PARK BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
ASSETS
DECEMBER 31,
-----------------------------
1995 1994
----------- -----------
<S> <C> <C>
Cash and due from banks $ 2,954,948 $ 2,855,180
Federal funds sold 8,455,000 8,696,000
Securities available for sale, at market value 10,623,067 3,283,993
Securities held to maturity, at cost (market value of $7,950,464
and $16,412,701 at December 31, 1995 and 1994, respectively) 7,969,625 17,681,649
Federal Reserve Bank stock, at cost 77,350 77,350
Federal Home Loan Bank stock, at cost 178,600 -
Loans receivable, net 32,578,677 25,854,454
Premises and equipment, net 1,669,414 1,697,648
Other assets 1,211,471 689,742
----------- ----------
Total assets $65,718,152 $60,836,016
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Demand deposits, noninterest bearing $12,341,716 $12,657,323
NOW accounts 12,478,940 10,836,698
Money market accounts 14,519,416 15,177,767
Savings deposits 2,745,491 3,150,989
Certificates of deposit of under $100,000 14,405,325 11,008,380
Certificates of deposit of $100,000 or more 3,923,047 3,085,146
-------- ---------- -----------
Total deposits 60,413,935 55,916,303
Accounts payable and accrued expenses 935,790 1,117,800
---------- -----------
Total liabilities 61,349,725 57,034,103
Stockholders' equity
Common stock, $.Ol par value - 2,000,000 shares authorized;
248,000 shares issued and outstanding
at December 31, 1995 and 1994, respectively 2,480 2,480
Additional paid-in capital 2,470,646 2,470,646
Net unrealized gain (loss) on securities available for sale 63,054 (55,367)
Retained earnings 1,832,247 1,384,154
----------- -----------
Total stockholders' equity 4,368,427 3,801,913
----------- -----------
Total liabilities and stockholders' equity $65,718,152 $60,836,016
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
2
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
YEARS ENDED DECEMBER 31,
1995 1994
---------- -----------
Interest income
Loans $ 2,753,917 $ 2,059,190
Securities 1,332,331 1,236,315
Federal funds sold 267,403 44,750
------- ------
Total interest income 4,353,651 3,340,255
Interest expense
Deposits 1,750,812 1,114,830
Federal funds purchased 12 9,378
--------- ---------
Total interest expense 1,750,824 1,124,208
--------- ---------
Net interest income 2,602,827 2,216,047
Provision for loan losses 45,000 36,500
--------- ---------
Net interest income after
provision for loan losses 2,557,827 2,179,547
Noninterest income
Service fees and other income 538,058 427,499
Gain on sale of fixed assets 6,000 -
Gain (loss) on sale of securities (12,590) 13,886
Gain on sale of loans 78,977 86,827
Gain (loss) on sale of real estate
acquired through foreclosure (7,162) 32,340
------ ------
Total noninterest income 603,283 560,552
Noninterest expense
Salaries and employee benefits 1,285,780 1,101,214
Occupancy, furniture and equipment expense 436,726 425,901
Deposit insurance and supervisory costs 85,848 116,979
Other 627,032 689,926
--------- ---------
Total noninterest expense 2,435,386 2,334,020
--------- ---------
Income before income taxes 725,724 406,079
Income Taxes 203,231 89,490
--------- ---------
Net income 522,493 316,589
========= =========
The accompanying notes are an integral part of these statements.
3
<PAGE>
<TABLE>
<CAPTION>
PARK BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
NET UNREALIZED
GAIN (LOSS)
ADDITIONAL ON SECURITIES TOTAL
COMMON STOCK PAID-IN AVAILABLE RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL FOR SALE EARNINGS EQUITY
------- ------- --------- --------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at
January 1, 1994 252,450 $2,524 $2,516,926 $(29,104) $1,067,565 3,557,911
Retirement of common
stock (4,450) (44) (46,280) (46,324)
Change in valuation
allowance for net
unrealized loss on
securities available
for sale - - - (26,263) - (26,263)
Net income - - - - 316,582 316,589
------- ----- --------- -------- ------- -------
Balance at
December 31, 1994 248,000 2,480 2,470,646 (55,367) 1,384,154 3,801,913
Change in valuation
allowance for net
unrealized gain on
securities available - - - 118,421 - 118,421
for sale
Dividends paid - - - - (74,400) (74,400)
Net income - - - - 522,493 522,493
------- ------- --------- --------- ---------- ----------
Balance at
December 31, 1995 248,000 $ 2,480 $2,47,646 $ 63,054 $1,832,247 $4,368,427
======= ======= ========= ======== ========== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
4
<PAGE>
<TABLE>
<CAPTION>
PARK BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS END, DECEMBER 31,
---------------------------------
1995 1994
------------ --------
<S> <C> <C>
Cash flows from operating activities:
Net income 522,493 $316,589
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for loan losses 45,000 36,500
Depreciation of premises and equipment 157,776 151,534
Amortization of premiums on securities 29,031 26,893
Accretion of discounts on securities (64,040) (36,816)
Net (gain) loss on sale of securities 12,590 (13,886)
Net (gain) loss on sale of real estate acquired through foreclosure 7,162 (32,340)
Net gain on sale of fixed assets (6,000) -
Proceeds from the sale of loans, net of related fees 944,636 1,324,611
Loans originated for resale (850,923) (1,210,669)
Increase in other assets (521,729) (251,958)
Increase (decrease) in accounts payable and accrued expenses (182,010) 732,665
Net cash provided by operating activities 93,986 1,043,123
Cash flows from investing activities:
Net loan originations and principal collections on loans (7,089,831) (2,231,866)
Purchases of securities (7,331,545) (8,854,134)
Purchase of FHLB stock (178,600) -
Proceeds from sales, maturities, calls and principal repayments
on securities 9,917,363 3,083,958
Proceeds from sales of real estate acquired through foreclosure 154,538 97,000
Purchases of premises and equipment (130,375) (311,281)
Net cash used in investing activities (4,658,450) (8,216,323)
Cash flows from financing activities:
Net increase in deposits 4,497,632 15,183,764
Dividends paid (74,400) -
Retirement of common stock - (46,324)
Net cash provided by financing activities 4,423,232 15,137,440
Increase (decrease) in cash and cash equivalents (141,232) 7,964,240
Cash and cash equivalents, beginning of year 11,551,180 3,586,940
Cash and cash equivalents, end of year 11,409,948 $11,551,180
========== ===========
</TABLE>
Supplemental disclosures:
The Bank paid approximately $1,696,000 and $1,102,000 in interest during the
years ended December 31, 1995 and 1994, respectively.
The Bank transferred $161,700 from loans receivable to real estate owned during
the year ended December 31, 1995.
The Bank paid approximately $104,000 and $101,000 in income taxes during the
years ended December 31, 1995 and 1994, respectively.
The accompanying notes are an integral pan of these statements.
5
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
NOTE I - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
ORGANIZATION AND CONSOLIDATION
Park Bankshares, Inc. (the "Company") is a bank holding company
incorporated in the state of Florida. Effective August 31, 1993, under
a reorganization agreement, the stockholders of First National Bank of
Lake Park exchanged all of their shares of common stock for all of the
common stock of Park Bankshares, Inc. The transaction was treated in a
manner similar to a pooling of interests and accordingly the Bank's
consolidated financial statements include the accounts and operations
of First National Bank of Lake Park for all periods presented.
The consolidated financial statements include the accounts of Park
Bankshares, Inc. and its wholly-owned subsidiary, First National Bank
of Lake Park, a federally chartered independent community bank,
collectively referred to as "the Bank". All significant intercompany
balances and transactions have been eliminated in consolidation.
The financial statements have been prepared in conformity with
generally accepted accounting principles and general practices within
the banking industry. In preparing the financial statements, management
is required to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and
revenues and expenses during the reporting period. Actual results could
differ from those estimates. Material estimates that are particularly
susceptible to significant change in the near-term relate to the
determination of the allowance for loan losses. In addition, various
regulatory agencies, as an integral part of their examination process,
periodically review the Bank's allowance for losses on loans and real
estate owned. Such agencies may require the Bank to recognize additions
to the allowances based on their judgments about information available
to them at the time of their examination.
A summary of the significant accounting policies which were
consistently applied in the preparation of the consolidated financial
statements follows:
SECURITIES AVAILABLE FOR SALE
In accordance with Statement of Financial Accounting Standards No. 115,
("SFAS No. 115"), securities available for sale are carried at fair
value (market value), inclusive of realized gains and/or losses, and
net of discount accretion and premium amortization computed using the
level yield method. Net unrealized gains and losses are reflected as a
separate component to stockholders' equity, net of applicable deferred
taxes.
Securities are designated for the available for sale portfolio at the
time of purchase.
(continued)
6
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1995 AND 1994
NOTE I - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
CONTINUED
SECURITIES AVAILABLE FOR SALE - CONTINUED
Should any of these securities be sold, gains and losses will be
recognized in the consolidated statement of income based on the
specific-identification method, and the net unrealized gain or loss
included as a separate component of stockholders' equity will be
adjusted accordingly.
TRADING SECURITIES
The Bank held no trading securities as of December 31, 1995 and 1994,
and has no intention of entering into trading activities at this time.
SECURITIES HELD TO MATURITY
Securities held to maturity are carried at amortized cost. Under the
guidance of SFAS No. 115, securities which the Bank has the positive
intent and ability to hold to maturity, are designated as held to
maturity securities. Such securities may be sold or transferred to the
available for sale or trading securities classification, only as a
result of isolated, nonrecurring, or unusual changes in circumstances
which the Bank could not have reasonably anticipated, such as a change
in statutory or regulatory requirements regarding investment
limitations or a significant deterioration in the security issuer's
credit-worthiness.
In November 1995, the FASB issued a Special Report on implementation of
SFAS No.115. The Special Report included a transition provision which
permitted all entities to reassess the appropriateness of securities
classifications and permitted the transfer of securities between
classifications by December 31, 1995. However, in connection with a
routine examination of the Bank by the Office of the Comptroller of the
Currency, the Bank was requested to perform a reassessment of the
classification of securities in the held to maturity category. Pursuant
to the reassessment as of August 31, 1995, the Bank transferred
securities having a historical amortized cost of approximately
$8,455,000 from the held to maturity classification to the available
for sale classification and recorded an unrealized loss of
approximately $115,000 in connection therewith. This transfer resulted
in an improved liquidity position for the Bank and provided management
with greater flexibility to manage the size and composition of the
securities portfolio. No other transfers of securities were made by the
Bank during the year ended December 31, 1995.
LOANS RECEIVABLE
Loans receivable are stated at unpaid principal balances, less the
allowance for loan losses and deferred loan origination fees.
(continued)
7
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1995 AND 1994
NOTE I - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
Continued
LOANS RECEIVABLE - Continued
The allowance for loan losses is increased by charges to expense and
decreased by loan charge-offs (net of recoveries). Management's
periodic evaluation of the adequacy of the allowance is based on the
Bank's past loan loss experience, known and inherent risks in the loan
portfolio, adverse situations that may affect the borrower's ability to
repay, the estimated value of the underlying collateral, and current
and expected future economic conditions. While management believes that
the Bank's allowance for loan losses was adequate as of December 31,
1995 and 1994, future increases to the allowance may become necessary
if events or economic conditions differ from assumptions utilized by
management in evaluating the loan portfolio.
Uncollectible interest on loans that are contractually past due 90 days
is charged-off, or an allowance is established based on management's
periodic evaluation. The allowance is established by a charge to
interest income equal to all accrued and unpaid interest. Income is
subsequently recognized only to the extent that cash payments are
received until, in management's judgment, the borrowers ability to make
periodic interest and principal payments is back to normal, in which
case the loan is returned to accrual status.
LOAN ORIGINATION FEES, COMMITMENT FEES AND RELATED COSTS
Loan origination fees and certain direct loan origination costs are
deferred, and the net fee or cost is recognized as an adjustment to
interest income using the interest method over the contractual life of
the loans. Commitment fees and costs relating to commitments, the
likelihood of exercise of which is remote, are recognized over the
commitment period on a straight-line basis. If the commitment is
subsequently exercised during the commitment period, the remaining
unamortized commitment fee at the time of exercise is recognized over
the life of the loan as an adjustment of yield.
PREMISES AND EQUIPMENT
Land is carried at cost. Premises, furniture, fixtures and equipment
are stated at cost, less accumulated depreciation. Depreciation is
computed using the straight-line method over the estimated useful lives
of the assets. Maintenance and repairs are charged to expense as
incurred.
REAL ESTATE ACQUIRED THROUGH FORECLOSURE
Real estate acquired foreclosure is initially recorded at the lower of
fair value at the date of foreclosure, less estimated disposal costs,
or the unpaid principal balance (cost). Costs related to development
and improvement of property are capitalized, whereas costs relating to
the holding of property are expensed. Valuations are periodically
obtained from independent appraisers, and an allowance for loss is
established by a charge to operations if the value of the property
declines below its original estimated fair value.
(continued)
8
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCLAL STATEMENTS - CONTINUED
DECEMBER 31, 1995 AND 1994
NOTE I - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -
CONTINUED
REAL ESTATE ACQUIRED THROUGH FORECLOSURE - Continued
If a sale of real estate acquired through foreclosure results in a
gain, the gain is accounted for in accordance with Statement of
Financial Accounting Standards No. 66 "Accounting for Sales of Real
Estate." Accordingly, gains may be deferred or recognized currently
depending on the terms of the sale. Losses are charged to operations as
incurred.
The Bank held no real estate acquired through foreclosure as of
December 31, 1995 and 1994.
INCOME TAXES
Deferred income taxes have been provided for elements of income and
expense which are recognized for financial reporting purposes in
periods different than such items are recognized for income tax
purposes. The Bank accounts for income taxes in accordance with
Statement of Financial Accounting Standards No.109 (SFAS No.109),
"Accounting for Income Taxes". SFAS No. 109 requires accounting for
deferred taxes utilizing the liability method, which applies the
enacted income tax rates in effect at the balance sheet date to
differences between the book and tax basis of assets and liabilities.
The resulting deferred tax liabilities and assets are adjusted to
reflect changes in tax laws.
CASH AND CASH EQUIVALENTS
For purposes of reporting cash flows, the Bank has defined cash
equivalents as highly liquid investments with original maturities of
three months or less; this includes cash on hand, amounts due from
banks, and federal funds sold.
FINANCIAL STATEMENT RECLASSIFICATIONS
Certain prior year amounts have been reclassified to conform to the
December 31, 1995 consolidated financial statement presentation.
9
<PAGE>
<TABLE>
<CAPTION>
PARK BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1995 AND 1994
NOTE 2 - SECURITIES
SECURITIES AVAILABLE FOR SALE
The market carrying value and historical cost of securities designated
as available for sale at December 31, 1995 and 1994 are summarized as
follows:
DECEMBER 31, 1995
----------------------------------------------------------
Historical Gross Gross Market
Amortized Unrealized Unrealized Carrying
Cost Gains Losses Value
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 748,226 $ 1,380 $ - $ 749,606
U.S. Government agency
securities 4,558,178 40,222 - 4,598,400
Obligations of states and
political subdivisions 1,049,700 5,080 (1,104) 1,053,676
Mortgage-backed securities 4,164,371 78,076 (21,062) 4,221,385
--------- ------ --------- ---------
Total securities available
for sale $10,520,475 $ 124,758 $ (22,166) $ 10,623,067
=========== ========= ========= ============
DECEMBER 31, 1994
---------------------------------------------------------
Historical Gross Gross Market
Amortized Unrealized Unrealized Carrying
Cost Gains Losses Value
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 1,988,885 $ - $ (14,334) $1,974,551
U.S. Government agency
securities 995,900 - (647) 995,253
Marketable equity securities 387,980 $ - $ (73,791) $ 314,189
---------- ---------- ---------- ----------
Total securities available
for sale $ 3,372,765 $ - $ (88,772) $3,283,923
=========== ========== ========== ==========
</TABLE>
Proceeds from the sales of securities available for sale and related
gross realized gains and losses for December 31, 1995 and 1994, are
summarized as follows:
Years Ended December 31,
------------------------
1995 1994
----------- ---------
Sales proceeds $ 4,628,302 $ 508,281
Gross realized gains $ 41,694 $ 13,886
Gross realized losses $ (54,284) $ -
10
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1995 AND 1994
NOTE 2 - SECURITIES - Continued
SECURITIES AVAILABLE FOR SALE - Continued
The historical amortized cost and market values of debt securities available for
sale at December 31, 1995, by contractual maturity, are shown below. Expected
maturities will differ from contractual maturities as borrowers often have the
right to call or prepay obligations with or without call or prepayment
penalties.
HISTORICAL CARRYING
AMORTIZED VALUE
COST (MARKET VALUE)
----------- --------------
Due in one year or less $ 748,227 $ 749,606
Due from one year to five years 3,858,177 3,885,494
Due from five years to ten years 700,000 712,906
Due after ten years 1,049,700 1,053,676
----------- -----------
6,356,104 6,401,682
Mortgage-backed securities 4,164,371 4,221,385
----------- -----------
Total securities available for sale $10,520,475 $10,623,067
=========== ===========
SECURITIES HELD TO MATURITY
The amortized cost and approximate market values of securities held to maturity
at December 31, 1995 and 1994 are summarized as follows:
DECEMBER 31, 1995
---------------------------------------------------
(CARRYING
VALUE) GROSS GROSS APPROXIMATE
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
---------- ---------- ---------- -----------
U.S. Treasury securities $2,014,413 $ 16,522 $ - $2,030,935
U.S. Government agency
securities 5,358,728 3,646 (77,249) 5,285,125
Obligations of states and
political subdivisions 204,309 38,122 - 242,431
Mortgage-backed securities 378,425 - (202) 378,223
Other securities 13,750 - - 13,750
---------- --------- --------- ----------
Total securities held to
maturity $7,969,625 $ 58,290 $ (77,451) $7,950,464
========== ========= ========= ==========
11
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1995 AND 1994
NOTE 2 - SECURITIES - Continued
SECURITIES HELD TO MATURITY - Continued
DECEMBER 31, 1994
-----------------------------------------------------
(CARRYING
VALUE) GROSS GROSS APPROXIMATE
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
----------- ---------- ----------- -----------
U.S. Treasury securities $ 2,019,658 $ - $ (134,818) $ 1,884,840
U.S. Government agency
securities 7,042,431 - (429,931) 6,612,500
Obligations of states and
political subdivisions 3,518,514 1,895 (384,709) 3,135,700
Mortgage-backed securities 5,087,296 - (321,395) 4,765,911
Other securities 13,750 - - 13,750
----------- ---------- ----------- -----------
Total securities held to
maturity $17,681,649 $ 1,895 $(1,270,843) $16,412,701
=========== ========== =========== ===========
The historical amortized cost and market values of debt securities held to
maturity at December 31, 1995, by contractual maturity, are shown below.
Expected maturities will differ from contractual maturities as borrowers often
have the right to call or prepay obligations with or without call or prepayment
penalties.
HISTORICAL APPROXIMATE
AMORTIZED MARKET
COST VALUE
------------ -----------
Due in one year or less $ - $ -
Due from one year to five years 7,373,141 7,316,060
Due from five years to ten years - -
Due after ten years 204,309 242,431
------------ -----------
7,577,450 7,558,491
Mortgage-backed securities 378,425 378,223
Other securities 13,750 13,750
------------ -----------
Total securities held to maturity $ 7,969,625 $ 7,950,464
============ ===========
At December 31, 1995 and 1994, securities available for sale and held to
maturity with carrying values of approximately $10,773,000 and $7,288,000,
respectively, were pledged to secure public deposits and for other purposes
required or permitted by law.
12
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1995 AND 1994
NOTE 3 - LOANS RECEIVABLE
Loans representing whole loans originated or purchased consist of the following:
DECEMBER 31,
--------------------------------
1995 1994
----------- -----------
Real estate, mortgage $25,166,985 $18,578,308
Real estate, construction 2,306,289 -
Commercial and industrial 3,460,097 6,779,580
Installment 1,959,537 991,227
Municipal 346,691 -
Other 19,754 9,551
----------- -----------
33,259,353 26,358,666
Less:
Deferred loan origination fees 140,371 90,792
Allowance for loan losses 540,305 413,420
----------- -----------
Loans receivable, net $32,578,677 $25,854,454
=========== ===========
Activity in the allowance for loan losses is summarized as follows:
YEAR ENDED DECEMBER 31,
--------------------------------
1995 1994
----------- -----------
Balance at beginning of year $ 413,420 $ 404,612
Charge-offs (206,416) (99,290)
Recoveries 288,301 71,598
Provision for loan losses 45,000 36,500
----------- -----------
Balance at end of year $ 540,305 $ 413,420
=========== ===========
At December 31, 1995 and 1994, the Bank had no nonaccrual loans.
In 1994, the Bank incurred approximately $55,000 of legal expenses in connection
with the collection of certain defaulted loans. In 1995, the Bank received
insurance recoveries in connection with these loans and credited approximately
$55,000 to legal expenses as a reimbursement for the legal expenses incurred in
1994. The $55,000 legal expense in 1994 and legal expense credit in 1995 are
included in other noninterest expense in the consolidated statements of income
for the respective years.
(continued)
13
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1995 AND 1994
NOTE 3 - LOANS RECEIVABLE - Continued
Loans to executive officers, directors and principal shareholders of the Bank
were made on substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable transactions with
other customers and, in management's opinion, did not involve more than normal
credit risk of collectibility. At December 31, 1995 and 1994, these loans
aggregated approximately $407,000 and $660,000, respectively.
The Bank serviced approximately $3,913,000 and $3,297,000 of loans for others at
December 31, 1995 and 1994, respectively.
Unfunded portions of lines of credit and construction loans at December 31, 1995
approximately $1,266,000 and $254,000, respectively.
NOTE 4 - PREMISES AND EQUIPMENT
Premises and equipment are summarized as follows:
DECEMBER 31,
--------------------------------
1995 1994
----------- -----------
Land $ 359,160 $ 359,160
Premises 1,274,303 1,274,303
Furniture, fixtures and equipment 1,143,404 1,027,884
----------- -----------
2,776,867 2,661,347
Less accumulated depreciation 1,107,453 963,699
----------- -----------
Premises and equipment, net $ 1,669,414 $ 1,697,648
=========== ===========
NOTE 5 - DEPOSITS
At December 31, 1995, scheduled maturities of certificates of deposit with a
remaining term of more than one year are as follows:
1997 1998 1999 2000
---------- ---------- -------- ----------
3.63% - 4.99% $ 797,468 $ 80,786 $ 80,326 $ -
5.00% - 5.99% 1,488,208 1,479,346 21,674 312,754
6.00% - 6.99% 227,293 - 20,000 1,316,391
7.00% - 7.13% - - - 604,303
---------- ---------- -------- ----------
$2,512,969 $1,560,132 $122,000 $2,233,448
========== ========== ======== ==========
(continued)
14
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1995 AND 1994
NOTE 5 - DEPOSITS - Continued
Interest expense on deposit accounts is summarized as follows:
YEARS ENDED DECEMBER 31,
----------------------------------
1995 1994
---------- ----------
NOW accounts $ 306,240 $ 211,274
Money market accounts 424,925 250,861
Savings deposits 58,438 62,658
Certificates of deposit 961,209 590,037
---------- ----------
$1,750,812 $1,114,830
========== ==========
Deposits of governmental agencies amounted to approximately $11,506,000 and
$12,417,000 at December 31, 1995 and 1994, respectively.
NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards ("SFAS") No. 107, "Disclosures About
Fair Value of Financial Instruments", requires disclosure of estimated fair
values of financial instruments. These estimated fair values are to be disclosed
whether or not they are recognized in the balance sheet, provided it is
practical to estimate such values.
The fair values have been estimated by the Bank, using available market
information for marketable instruments and appropriate valuation methodologies
for other instruments. However, considerable judgment and subjectivity is
necessarily required in interpreting data to develop the estimates of fair
value. Accordingly, the estimates presented herein are not necessarily
indicative of the amounts the Bank could realize in a current market exchange.
The use of different market assumptions and/or estimation methodologies may have
a material effect on the estimated fair value amounts.
Fair values of financial instruments at December 31, 1995 are summarized as
follows:
CARRYING ESTIMATED
AMOUNT FAIR VALUE
------------ ------------
Assets:
Cash and cash equivalents $ 11,409,948 $ 11,409,498
Securities available for sale 10,623,067 10,623,067
Securities held to maturity 7,969,625 7,950,464
Federal Reserve Bank Stock 77,350 77,350
Federal Home Loan Bank Stock 178,600 178,600
Loans receivable, gross 33,259,353 32,179,728
(continued)
15
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1995 AND 1994
NOTE 6 - FAIR VALUE OF FINANCIAL INSTRUMENTS - Continued
CARRYING ESTIMATED
AMOUNT FAIR VALUE
------------ ------------
Liabilities:
Certificates of deposit $ 18,328,732 $ 18,593,016
Other deposits 42,085,203 42,085,203
Other off-balance sheet financial instruments have been reflected in Note 10.
These financial instruments consist of standby letters of credit and commitments
to extend credit. These are generally short-term in nature and reflective of the
current fee structure of the Bank in providing these services. While these
transactions are subject to credit risk, management believes that the credit
risk in the aggregate is reflected in the pricing structure of these
transactions and in the allowance for loan losses carried in the financial
statements. The face value of these off-balance sheet transactions is considered
to approximate fair value.
The fair value of securities is estimated based upon the market prices quoted on
national or regional exchanges. The Bank obtains the market prices for these
securities from the broker/dealer from whom the securities were purchased or
from another broker/dealer who maintains cash flow models for the securities.
The fair value of loans is estimated on the current present values using
applicable discount factors based on the current rates of interest charged by
the Bank for similar transactions. For this purpose loans have been aggregated
into major categories based on pricing characteristics. No adjustment was made
to the discount factors for changes in the credit quality of loans. Management
believes that the risk factor embedded in the discount rates results in a fair
valuation of the gross loan portfolio.
The fair value of certificates of deposit is estimated based on present values
using discount factors based on the current rate of interest paid for
certificates of deposit of similar maturity. As required by SFAS No. 107, all
other categories of deposits, which have no stated maturities, are shown at
their face value.
The fair values presented herein are based on pertinent information available to
management as of the indicated date. Although management is not aware of any
factors that would significantly affect the estimated fair value amounts, such
amounts have not been comprehensively revalued for the purpose of these
financial statements and, therefore, current estimates of fair value may differ
significantly from the amounts presented herein.
16
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1995 AND 1994
NOTE 7 - STOCKHOLDERS' EQUITY AND REGULATORY REQUIREMENTS
At December 31, 1995, the Bank has reserved 62,000 shares of common stock to be
issued under a nonqualified stock option plan to Bank officers and employees.
60,000 shares are reserved for issuance to Bank employees and 2,000 shares are
reserved for issuance to Bank officers. At December 31, 1995 no options had been
granted to any officers or employees of the Bank.
On December 19, 1991, the Federal Deposit Insurance Corporation Improvement Act
of 1991 "FDICIA" became law. FDICIA requires Financial institutions to take
certain actions relating to their internal operations. FDICIA also imposes
certain operational and managerial standards on financial institutions relating
to internal controls, loan documentation, credit underwriting, interest rate
exposure, asset growth, employee compensation, fees and benefits.
FDICIA established five regulatory capital categories and specifies supervisory
actions to be taken with respect to less than adequately capitalized
institutions. The regulation also ties the capital categories to three capital
measures: Tier I risk-based capital, total risk-based capital and leverage
capital. The Bank's capital ratios at December 31, 1995 all exceed the highest
capital category which is deemed as "well capitalized". The ratios for each
category and the ratios for First National Bank of Lake Park at December 31,
1995 are summarized as follows:
<TABLE>
<CAPTION>
TIER I TOTAL
RISK-BASED RISK-BASED LEVERAGE
CAPITAL CATEGORY RATIO RATIO RATIO
- ---------------- ---------- ---------- --------
<S> <C> <C> <C>
First National Bank of Lake Park 10.52% 11.77% 6.55%
Well capitalized /greater than/6.00% /greater than/10.00% /greater than/5.00%
Adequately capitalized 4.00%-5.99% 8.00%-9.99% 4.00%-4.99%
Undercapitalized 3.00%-3.99% 6.00%-7.99% 3.00%-3.99%
Significantly undercapitalized /less than/3.00% /less than/6.00% 2.01%-2.99%
Critically undercapitalized - - /less than/2.00%
</TABLE>
The prompt corrective action framework created by FDICIA establishes a series of
increasingly severe mandatory and discretionary supervisory actions that would
be applied to institutions classified as undercapitalized, significantly
undercapitalized or critically undercapitalized. Generally, banks classified as
less than adequately capitalized must file a capital restoration plan with the
FDIC detailing how the bank intends to return to an adequately capitalized
classification.
The Bank, as a nationally-chartered, Federal Reserve member bank, is subject to
regulatory dividend restrictions. Under such restrictions, the Bank may not,
without prior regulatory approval, declare dividends in excess of the sum of the
current year's earnings (as defined) plus the retained earnings (as defined)
from the previous two years.
17
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1995 AND 1994
NOTE 8 - INCOME TAXES
The components of income taxes are as follows:
DECEMBER 31,
-------------------------
1995 1994
--------- --------
Current:
Federal $ 186,871 $103,491
State 35,360 22,962
--------- --------
Total current 222,231 126.453
--------- --------
Deferred:
Federal (17,287) (33,397)
State (1,713) (3,566)
--------- --------
Total deferred (19,000) (36,963)
--------- --------
$ 203,231 $ 89,490
========= ========
Applicable income taxes for financial reporting purposes differ from the amount
computed by applying the statutory federal income tax rate as follows:
YEARS ENDED DECEMBER 31,
-------------------------
1995 1994
--------- --------
Tax at statutory rate $ 246,74 $138,067
Increase (decrease) in tax resulting in:
Tax exempt income (56,196) (59,182)
State income tax, net of federal
tax benefit
19,713 12,801
Benefit of Surtax Exemption - (1,335)
Other (7,032) (861)
--------- --------
$ 203,231 $ 89,490
========= ========
At December 31, 1995 and 1994, the Company had a net deferred tax asset
(liability) of ($36,644) and $17,305, respectively, primarily relating to
temporary differences, SFAS No. 115 and a 1995 capital loss carryforward net of
a related valuation allowance. The realization of the tax benefits associated
with the utilization of the capital loss carryforward is dependent on taxable
income of the same character during the carryforward period. Accordingly, a
valuation allowance has been provided as it is more likely than not that the
carryforward will not be utilized. A valuation allowance of $20,275 has been
recorded as an offset to the deferred tax asset at December 31, 1995.
Pursuant to SFAS No. 115, the Company has included in the net deferred tax
assets (liabilities) a deferred tax asset (liability) of ($39,541) and $33,405
at December 31, 1995 and 1994, respectively, as a result of the net unrealized
loss (gain) on securities available for sale.
(continued)
18
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1995 AND 1994
NOTE 8 - INCOME TAXES - Continued
The Bank had the following significant (taxable) deductible temporary
differences:
1995 1994
--------- ---------
Allowance for loan losses $ 307,000 $ 262,000
Fixed assets (386,000) (415,000)
Deferred loan fees 25,000 53,000
Accretion on securities (45,000) (43,000)
Accrued legal settlement 100,000 100,000
--------- ---------
$ 1,000 $ (43,000)
========= =========
NOTE 9 - LEASES
The Bank leases office facilities and certain equipment under noncancelable
operating lease agreements. The Bank leases two branches of which one lease
expires on August 30, 1999 and the other expires on June 30, 2000. Both lease
agreements contain options for renewals.
Rent expense was approximately $93,000 and $85,000 for the years ended December
31, 1995 and 1994, respectively.
Future minimum lease payments under noncancelable operating leases at December
31, 1995 are as follows:
1996 $105,000
1997 105,000
1998 109,800
1999 98,800
2000 36,000
--------
Total minimum lease payments $454,600
NOTE 10 - COMMITMENTS AND CONTINGENCIES
The Bank is involved in litigation arising in the normal course of business,
none of which is deemed by management to be material to its financial position.
The Bank has a Federal Funds line of credit for $1,000,000 with a correspondent
Bank. The line of credit has no expiration date but is evaluated by the
correspondent Bank on a quarterly basis. At December 31, 1995, the Bank had no
outstanding balance due under the available line.
(continued)
19
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1995 AND 1994
NOTE 10 - COMMITMENTS AND CONTINGENCIES - Continued
The Bank is a party to financial instruments with off-balance sheet risk in the
normal course of business to meet the financing needs of its customers. These
financial instruments include commitments to extend credit and standby letters
of credit. These instruments involve, to varying degrees, elements of credit and
interest rate risk in excess of the amount recognized in the balance sheet. The
contract or notional amounts of these instruments reflect the extent of
involvement the Bank has in particular classes of financial instruments.
The Bank's exposure to credit loss in the event of nonperformance by the other
party to the financial instrument for commitments to extend credit is
represented by the contractual notional amount of those instruments. The Bank
uses the same credit policies in making commitments as it does for on-balance
sheet instruments. The Bank controls the credit risk of these financial
instruments through credit approvals, lending limits and monitoring procedures.
Financial instruments whose contract amounts represent credit risk at December
31, 1995 are summarized as follows:
Commitments to extend credit $1,137,000
Standby letters of credit $339,995
The Bank was involved in litigation pertaining to a lease on one of its branch
facilities in which it was the lessee. While the Court ruled in favor of the
lessor, the Bank intends to vigorously appeal the ruling. An approximate
$100,000 expense relating to the Court's ruling was accrued for at December 31,
1995 and 1994 and included in other noninterest expense for the year ended
December 31, 1994.
Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination clauses and may
require payment of a fee. Since commitments may expire without being drawn upon,
the total commitment amounts do not necessarily represent future cash
requirements. The Bank evaluates each customer's credit worthiness on a
case-by-case basis. The amount of collateral obtained by the Bank upon extension
of credit is based on management's credit evaluation of the counterparty.
Standby letters of credit are conditional commitments issued by the Bank to
guarantee the performance of a customer to a third party. Those guarantees are
primarily issued to support borrowing arrangements. The credit risk involved in
issuing standby letters of credit is essentially the same as that involved in
extending loan facilities to customers.
The Bank does not have officer and director liability insurance. The Bank has
agreed to indemnify all officers and directors from any potential liability they
may have as a result of their actions in fulfilling their responsibilities as
officers and directors.
(continued)
20
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1995 AND 1994
NOTE 10 - COMMITMENTS AND CONTINGENCIES - Continued
The Bank maintains a Salary Savings Plan 401(k) for the benefit of employees.
The Plan provides for the Bank to make contributions pursuant to applicable
salary savings elections and discretionary sponsor contributions as may be
determined by the Board of Directors. The sponsor contribution for both of the
years ended December 31, 1995 and 1994 was approximately $6,000 each.
NOTE 11 - CONCENTRATIONS OF CREDIT RISK
First National Bank of Lake Park is a community commercial bank, operating in
the Greater West Palm Beach area, Palm Beach County, Florida. The Bank
principally extends credit for commercial business and commercial real estate
loans, substantially all of which are located in South Florida. Although the
Bank maintains a diversified loan portfolio, a substantial portion of its
borrowers' abilities to repay loans is dependent upon the economic condition of
the South Florida region.
NOTE 12 - PARENT COMPANY ONLY FINANCIAL INFORMATION
The following is a condensed summary of balance sheets, statements of income and
cash flows of Park Bankshares, Inc. (Parent Company only) as of and for the
years ended December 31, 1995 and 1994:
BALANCE SHEETS
1995 1994
---------- ----------
ASSETS
Cash $ 26,772 $ 24,271
Investment in subsidiary 4,319,708 3,742,925
Other assets 37,937 58,958
---------- ----------
Total assets $4,384,417 $3,826,154
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 15,990 $ 24,241
---------- ----------
Total liabilities 15,990 24,241
Stockholders' equity
Common stock 2,480 2,480
Additional paid-in capital 2,470,646 2,470,646
Net unrealized gains (losses) on
securities available for sale 63,054 (55,367)
Retained earnings 1,832,247 1,384,154
---------- ----------
Total stockholders' equity 4,368,427 3,801,913
---------- ----------
Total liabilities and
stockholders' equity $4,384,417 $3,826,154
========== ==========
21
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1995 AND 1994
NOTE 12 - PARENT COMPANY ONLY FINANCIAL INFORMATION - CONTINUED
STATEMENTS OF INCOME
1995 1994
-------- --------
Income $ - $ -
Expense
Other operating 21,429 13,167
-------- --------
Loss before undistributed earnings
of subsidiary and income taxes 21,429 13,167
Equity in undistributed earnings of
subsidiary 535,672 324,162
-------- --------
Income before income taxes 514,243 310,995
Income taxes (benefit) (8,250) (5,594)
-------- --------
Net income $ 522,493 $316,589
========= ========
(continued)
22
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1995 and 1994
NOTE 12 - PARENT COMPANY ONLY FINANCIAL INFORMATION - Continued
STATEMENTS OF CASH FLOWS
1995 1994
---------- ---------
Cash flows from operating activities:
Net income $ 522,493 $ 316,589
Adjustments to reconcile net income
to net cash provided by operating
activities:
Amortization 2,910 -
Equity in undistributed earnings
of subsidiary (535,672) (324,162)
Decrease in other assets 21,021 849
Increase (decrease) in accounts
payable and accrued expenses (8,251) 22,878
---------- ---------
Net cash provided by operating
activities 2,501 16,154
Cash flows from financing activities:
Retirement of common stock - (46,324)
Dividends from subsidiary 74,400 -
Dividends paid on common stock (74,400) -
---------- ---------
Net cash used in financing activities - (46,324)
---------- ---------
Increase (decrease) in cash 2,501 (30,170)
Cash at beginning of year 24,271 54,441
---------- ---------
Cash at end of year $ 26,772 $ 24,271
========== =========
23
<PAGE>
EXHIBIT 28.1
2
PARK BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
DECEMBER 31,
JUNE 30, 1996 1995
(UNAUDITED) (NOTE)
------------- ------------
Assets:
Cash and due from banks $ 4,398,607 $ 2,954,948
Federal Home Loan Bank-Interest
bearing account 2,058,919 -
Federal Funds Sold 6,713,000 8,455,000
Securities Available for sale, at
market value 10,892,341 10,623,067
Securities held to maturity, at
cost (market value of $7,268,000
and $7,950,464 at June 30, 1996
and 1995, respectively) 7,447,175 7,969,625
Federal Reserve Bank stock, at cost 77,350 77,350
Federal Home Loan Bank stock, at cost 197,200 178,600
Loans receivable, net 32,635,197 32,578,677
Premises and equipment, net 1,655,315 1,669,414
Other assets 1,130,555 1,211,471
----------- -----------
Total assets $67,205,659 $65,718,152
=========== ===========
Liabilities:
Deposits:
Demand deposits, noninterest bearing $14,583,582 $12,341,716
NOW accounts 12,708,964 12,478,940
Money market accounts 14,880,861 14,519,416
Savings deposits 2,679,114 2,745,491
Certificates of deposit under $100,000 14,834,459 14,405,325
Certificates of deposit of $100,000
or more 2,455,207 3,923,047
----------- -----------
Total deposit 62,142,187 60,413,935
Accounts payable and accrued expenses 849,386 935,790
----------- -----------
Total Liabilities 62,991,573 61,349,725
----------- -----------
Stockholders' equity:
Common stock, $.01 par value - Shares
authorized - 2,000,000. Shares
issued and outstanding - June 30,
1996 - 232,250; December 31, 1995 -
248,000. 2,322 2,480
Additional paid-in capital 2,203,053 2,470,646
Net unrealized gain (loss) on
securities available for sale (81,790) 63,054
Retained Earnings 2,090,501 1,832,247
----------- -----------
Total stockholders' equity 4,214,086 4,368,427
----------- -----------
Total liabilities and
stockholders' equity $67,205,659 $65,718,152
=========== ===========
NOTE: The balance sheet at December 31, 1995
has been derived from the audited
financial statements.
See Accompanying Note.
1
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
SIX MONTHS ENDING JUNE 30,
1996 1995
----------- -----------
Interest Income
Loans $ 1,613,210 $ 1,252,496
Securities 545,888 687,981
Federal funds sold 243,599 117,996
Federal Home Loan Bank 48,447 0
----------- -----------
Total interest 2,451,144 2,058,473
Interest expense
Deposits 979,772 799,099
Federal funds purchased - 0
----------- -----------
Total interest expense 979,772 799,099
----------- -----------
Net interest income 1,471,372 1,259,374
Provision for loan losses 50,000 0
----------- -----------
Net interest income after
provision for loan losses 1,421,372 1,259,374
Noninterest income
Service fees and other income 307,594 210,749
Gain on sale of fixed assets 775 0
Gain (loss) on sale of securities (3,076) 533
Gain on sale of loans 22,046 49,658
Gain (loss) on sale of real
estate acquired through foreclosure - 0
----------- -----------
Total noninterest income 327,339 260,940
Noninterest expense
Salaries and employee benefits 697,306 645,472
Occupancy, furniture and equipment
expense 208,698 208,543
Deposit insurance and supervisory
costs 14,929 69,860
Other 315,434 282,434
----------- -----------
Total noninterest expense 1,236,367 1,206,309
----------- -----------
Income before income taxes 512,345 314,006
Income taxes 184,416 83,927
----------- -----------
Net income $ 327,929 $ 230,079
=========== ===========
2
<PAGE>
<TABLE>
<CAPTION>
PARK BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)
NET UNREALIZED
GAIN (LOSS)
COMMON STOCK ADDITIONAL ON SECURITIES TOTAL
------------------ PAID-IN AVAILABLE RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL FOR SALE EARNINGS EQUITY
------- ------- ---------- -------------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1995 248,000 2,480 2,470,646 (55,367) 1,384,154 3,801,913
Change in valuation allowance for
net unrealized gain (loss) on
securities available for sale - - - 118,421 - 118,421
Dividends Paid - - - - (74,400) (74,400)
Net income - - - - 522,493 522,493
------- ------ ---------- -------- ---------- ----------
Balance at December 31, 1995 248,000 2,480 2,470,646 63,054 1,832,247 4,368,427
Re-purchase of Common Stock (15,750) (158) (267,593) - - (267,751)
Change in valuation allowance for
net unrealized gain (loss) on
securities available for sale - - - (144,844) - (144,844)
Dividends Paid - - - - (69,675) (69,675)
Net income - - - - 327,929 327,929
------- ------ ---------- -------- ---------- ----------
Balance at June 30. 1996 232,250 $2,322 $2,203,053 $(81,790) $2,090,501 $4,214,086
======= ====== ========== ======== ========== ==========
</TABLE>
See Accompanying Note.
3
<PAGE>
PARK BANKSHARES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
SIX MONTHS ENDING JUNE 30,
--------------------------
1996 1995
---------- ----------
Cash flows from operating activities:
Net Income $ 327,929 $ 230,079
Adjustments to reconcile net income
to net cash provided by operating
activities:
Provision for loan losses 50,000 0
Depreciation of premises & equipment 79,487 79,076
Amortization of premiums on securities 24,054 12,899
Accretion of discounts on securities (18,015) (22,663)
Net gain (loss) on sale of fixed assets 775 0
Net gain (loss) on sale of securities (3,076) 533
Proceeds from the sale of loans, net
of related fees 313,696 612,074
Loans originated for resale (284,960) (553,765)
Increase in other assets 80,916 (80,163)
Increase (decrease) in accts payable
and accrued expenses (86,404) (473,184
------------ -----------
Net cash provided by operating
activities 484,402 (195,113)
------------ -----------
Cash flows from investing activities:
Net loan originations and principal
collections on loans (56,520) (1,917,114)
Purchases of securities (5,396,125) (2,267,485)
Proceeds from sales, maturities, calls
and repayments of securities 5,403,382 1,813,797
Purchases of premises and equipment (65,388) (101,734)
------------ -----------
Net cash used in investing activities (114,651) (2,472,536)
------------ -----------
Cash flows from financing activities:
Net increase in deposits 1,728,252 (171,052)
Dividends paid to stockholders (69,675) (74,400)
Retirement of common stock (267,750) 0
------------ -----------
Net cash provided by financing
activities 1,390,827 (245,452)
------------ -----------
Increase (decrease) in cash and cash
equivalents 1,760,578 (2,913,101)
Cash and cash equivalents, beginning of period 11,409,948 11,551,180
------------ -----------
Cash and cash equivalents, end of period $ 13,170,526 $ 8,638,079
============ ===========
See Accompanying Note.
4
<PAGE>
PARK BANKSHARES, INC., AND SUBSIDIARY
NOTE TO CONDENSED CONSOLIDATED FINANCIAL STATEMENT
(UNAUDITED)
JUNE 30, 1996
NOTE A--BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the six months ended June
30, 1996, are not necessarily indicative of the results that may be expected for
the year ending December 31, 1996. For further information, refer to the
consolidated financial statements and footnotes thereto included in Park
Bankshares, Inc's annual report for the years ended December 31, 1995 and 1994.
5
EXHIBIT 28.2
1ST UNITED BANCORP/PARK BANKSHARES, INC.
PRO FORMA FINANCIAL STATEMENTS
The following Pro Forma Condensed Consolidated Balance Sheet as of June 30,
1996 gives effect to the acquisition of Bankshares on such date. The Pro Forma
Condensed Consolidated Statements of Income for the six months ended June 30,
1996 and the years ended December 31, 1995 and 1994 give effect to the
acquisition of Bankshares at the beginning of such period.
The Pro Forma Condensed Consolidated Balance Sheet and Pro Forma Condensed
Statements of Income also give effect to the acquisition of Bankshares by the
issuance of approximately 818,000 shares of Bancorp common stock for all of the
issued and outstanding shares of Bankshares Common Stock.
The pro forma statements have been prepared by management of Bancorp based
upon the historical financial statements of Bancorp and Bankshares giving effect
to the transactions under the pooling method of accounting and the assumptions
and adjustments in the accompanying Notes to Pro Forma Condensed Consolidated
Financial Statements. These pro forma statements may not be indicative of the
results that actually would have occurred if the transactions had been in effect
on the dates indicated or which may be obtained in the future. The pro forma
financial statements should be read in conjunction with the financial statements
of Bancorp and Bankshares included elsewhere herein or incorporated by reference
herein.
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<PAGE>
<TABLE>
<CAPTION>
1ST UNITED BANCORP AND SUBSIDIARIES/
PARK BANKSHARES, INC. AND SUBSIDIARY
PRO FORMA COMBINED CONDENSED BALANCE SHEET
June 30, 1996
(in thousands)
(unaudited)
PARK
1ST UNITED BANKSHARES, PROFORMA
BANCORP INC. ADJUSTMENTS TOTAL
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Cash and Due from Banks $ 22,064 $ 6,458 $ $ 28,522
Federal Funds Sold 14,257 6,713 0 20,970
---------- ---------- ------- ---------
Cash and Cash Equivalents 36,321 13,171 0 49,492
Investment Securities held to maturity 36,003 7,447 43,450
Investment Securities available for sale 17,492 11,167 28,659
Gross Loans 328,654 33,230 361,884
Allowance for Loan Losses 8,908 595 $ 9,503
---------- ---------- ------- ---------
Net Loans 319,746 32,635 352,381
Bank Premises and Equipment 14,049 1,655 15,704
Other Real Estate 6,258 0 6,258
Intangible Assets 7,756 0 7,756
Other Assets 8,510 1,131 9,641
---------- ---------- ------- ---------
$ 446,135 $ 67,206 $ 0 $ 513,341
========== ========== ======= =========
Deposits:
Demand Deposits $ 114,486 $ 14,583 $ $ 129,069
Now and Money Market Accounts 147,839 27,590 175,429
Savings Deposits 47,026 2,679 49,705
Time Deposits 89,095 17,290 106,385
---------- ---------- ------- ---------
Total Deposits 398,446 62,142 0 460,588
Other Liabilities 4,375 850 0 5,225
---------- ---------- ------- ---------
Total Liabilities 402,821 62,992 0 465,813
Shareholders Equity:
Common Stock 74 2 (2)B 82
8 B
Additional Paid-In Capital 30,680 2,203 (2,203)B 34,986
4,206 B
Retained Earnings 12,635 2,091 (2,091)B 12,635
Unrealized Loss on Available for Sale
Securities (75) (82) 82 B (75)
---------- ---------- ------- ---------
43,314 4,214 0 47,528
---------- ---------- ------- ---------
$ 446,135 $ 67,206 $ 0 $ 513,341
========== ========== ======= =========
</TABLE>
SEE ACCOMPANYING NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS.
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<PAGE>
<TABLE>
<CAPTION>
1ST UNITED BANCORP AND SUBSIDIARIES/
PARK BANKSHARES, INC. AND SUBSIDIARY
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1996
(in thousands, except per share data)
(unaudited)
PARK BANCORP
1ST UNITED BANKSHARES, AND
BANCORP INC. BANKSHARES
ACTUAL ACTUAL ADJUSTMENTS COMBINED
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Loans, including fees $ 14,452 $ 1,613 $ 0 $ 16,065
Investment Securities 1,880 546 2,426
Other 1,031 292 1,323
---------- ----------- ----------- ----------
17,363 2,451 19,814
Interest on Deposits 4,370 980 5,350
Other 107 0 107
---------- ----------- ----------- ----------
4,477 980 5,457
Net Interest Income 12,886 1,471 14,357
Provision For Loan Losses 60 50 110
---------- ----------- ----------- ----------
12,826 1,421 14,247
Other Income:
Service Charges on Deposits 1,861 308 2,169
Net Gains (Losses) on Securities 0 (3) (3)
Other 1,938 22 1,960
---------- ----------- ---------- ----------
3,799 327 4,126
Other Expense:
Salaries & Benefits 5,230 697 5,927
Occupancy, Furniture and Equipment 2,180 209 2,389
Other Real Estate Expenses 260 0 260
Other 3,408 330 3,738
---------- ----------- ---------- ----------
11,078 1,236 12,314
Income Before Income Taxes 5,547 512 6,059
Income Taxes 2,050 184 2,234
---------- ----------- ---------- ----------
Net Income $ 3,497 $ 328 $ 0 $ 3,825
========== =========== ========== ==========
Earnings Per Share:
Net Income $ 0.45 $ 1.41 $ 0.45
========== =========== ========== ==========
Average Common Shares &
Common Stock Equivalent 7,729 232 8,547
========== =========== ========== ==========
</TABLE>
SEE ACCOMPANYING NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS.
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<PAGE>
<TABLE>
<CAPTION>
1ST UNITED BANCORP AND SUBSIDIARIES/
PARK BANKSHARES, INC. AND SUBSIDIARY
PRO FORMA COMBINED CONDENSED STATEMENTS OF OPERATIONS
For the Year Ended December 31, 1995
(in thousands, except per share data)
(unaudited)
PARK BANCORP
1ST UNITED BANKSHARES, AND
BANCORP INC. BANKSHARES
ACTUAL ACTUAL ADJUSTMENTS COMBINED
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Loans, including fees $ 22,248 $ 2,754 $ $ 25,002
Investment Securities 2,456 1,332 3,788
Other 232 267 499
---------- ----------- ----------
24,936 4,353 29,289
Interest on Deposits 5,928 1,751 7,679
Other 339 0 339
---------- ----------- ---------- ----------
6,267 1,751 8,018
Net Interest Income 18,669 2,602 21,271
Provision for Loan Losses 162 45 207
---------- ----------- ---------- ----------
18,507 2,557 21,064
Other Income:
Service Charges on Deposits 1,607 538 2,145
Net Gains (Losses) on Securities 0 (13) (13)
Other 1,765 78 1,843
---------- ----------- ---------- ----------
3,372 603 3,975
Other Expenses:
Salaries and Benefits 6,595 1,286 7,881
Occupancy, Furniture and Equipment 3,071 437 3,508
Other Real Estate Expenses 515 0 515
Other 4,606 712 5,318
---------- ----------- ---------- ----------
14,787 2,435 17,222
Income Before Income Taxes 7,092 725 7,817
Income Taxes 2,590 203 2,793
---------- ----------- ---------- ----------
Net Income $ 4,502 $ 522 $ 5,024
========== =========== ========== ==========
Earnings Per Share:
Net Income $ 0.67 $ 2.10 $ 0.66
========== =========== ========== ==========
Average Common Shares &
Common Stock Equivalent 6,760 248 7,578
========== =========== ========== ==========
</TABLE>
SEE ACCOMPANYING NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS.
-4-
<PAGE>
1ST UNITED BANCORP AND SUBSIDIARY
PARK BANKSHARES, INC. AND SUBSIDIARY
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(Dollars in thousands)
(unaudited)
A. Bancorp will issue 818,000 shares of its common stock to acquire all the
outstanding shares of Bankshares Common Stock.
The assets and liabilities of Bankshares will be recorded by Bancorp at
their book value in accordance with a "pooling of interest" as defined in
Accounting Principles Board Statement 16 "Business Combination"
("APB16").
B. To record the shareholders' equity of Bankshares by Bancorp for the
issuance of 816,000 shares of Bancorp common stock.
Bankshares Shareholder's Equity (June 30, 1996):
Common Stock 2
Additional Paid in Capital 2,203
Retained Earnings 2,091
Unrealized Loss on Securities (82)
------
Book Value of Park $4,214
Consideration Paid to Bankshares Shareholders:
Common Stock (818,000 shares x $.01 par) $ 8
Additional Paid in Capital 4,206
------
Total Equity $4,214
======
C. Net income per share is calculated using the weighted average number of
Bancorp common stock and stock equivalents for the periods adjusted as
follows:
Year Ended
December 31,
Period Ended ------------
June 30, 1996 1995
------------- ----
Bancorp historical 7,729 6,760
Estimate shares issued to Bankshares 818 818
shareholders as of beginning of period ----- -----
Proforma weighted average common shares 8,547 7,578
and common stock equivalents ===== =====
D. The following reconciles the outstanding Bancorp common stock at June 30,
1996 to Proforma outstanding Bancorp common stock:
Bancorp shares at June 30, 1996 7,450
Estimate shares issued to Bankshares shareholders 818
-----
8,268
=====
E. The Pro forma combined condensed statement of operations for each period
excludes the following non-recurring charges directly attributable to the
transactions:
Severance/stay bonuses $500,000
Merger Costs 200,000
Other 65,000
--------
765,000
Tax effect (33%) 260,000
--------
$505,000
========
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