SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark one)
[x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 [FEE REQUIRED]
For the fiscal year ended: December 31, 1997
OR
[ ] TRANSACTION REPORT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 [NO FEE REQUIRED]
For the transition period from ______________ to __________________
Commission file number ________________________________________
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
JEFFERSON BANK CASH OR DEFERRED SAVINGS PLAN
B. Name of the issuer of the securities held pursuant to the plan and the
address of its principal executive office:
JEFFBANKS, INC.
1845 WALNUT STREET
PHILADELPHIA, PA 19103
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
JEFFERSON BANK CASH OR DEFERRED SAVINGS PLAN
(Name of Plan)
Date July 10, 1998 /s/ Paul Frenkiel
(Signature)
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated June 12, 1998, accompanying the financial
statements and schedules included in the Annual Report of Jefferson Bank Cash or
Deferred Savings Plan on Form 11-K for the year ended December 31, 1997. We
consent to the inclusion of said report in the Registration Statement of
JeffBanks, Inc. (Formerly State Bancshares, Inc.) on Form S-8 (File No.
33-80654, effective June 23, 1994).
/s/GRANT THORNTON LLP
Philadelphia, Pennsylvania
July 13, 1998
FINANCIAL STATEMENTS AND REPORT OF
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
JEFFERSON BANK CASH OR DEFERRED SAVINGS PLAN
December 31, 1997 and 1996
<PAGE>
C O N T E N T S
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS 3
FINANCIAL STATEMENTS
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS 4
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS 6
NOTES TO FINANCIAL STATEMENTS 8
SUPPLEMENTAL INFORMATION
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES 13
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
WHICH WERE BOTH ACQUIRED AND DISPOSED OF WITHIN THE PLAN
YEAR ENDED DECEMBER 31, 1997 13
LINE 27d - SCHEDULE OF REPORTABLE (5%) TRANSACTIONS 14
<PAGE>
Report of Independent Certified Public Accountants
Trustees
Jefferson Bank Cash or Deferred Savings Plan
We have audited the accompanying statements of net assets available for
benefits of the Jefferson Bank Cash or Deferred Savings Plan as of December 31,
1997 and 1996, and the related statements of changes in net assets available for
benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for benefits of the
Jefferson Bank Cash or Deferred Savings Plan as of December 31, 1997 and 1996,
and the changes in net assets available for benefits for the years then ended in
conformity with generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the
basic financial statements taken as a whole. The supplemental schedules of
assets held for investment purposes and reportable (5%) transactions are
presented for the purpose of complying with the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974 and are not a required part of the basic financial
statements. The supplemental schedules have been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, are fairly stated, in all material respects, in relation to the basic
financial statements taken as a whole.
/s/GRANT THORNTON
Philadelphia, Pennsylvania
June 12, 1998
<PAGE>
<TABLE>
<CAPTION>
Jefferson Bank Cash or Deferred Savings Plan
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1997
Non-participant
Participant-directed directed
-------------------------------------------------------------------------- ------------
Money Vanguard Vanguard JeffBanks, Inc. Janus Oakmark JeffBanks,Inc.
Market Wellington Index Common Worldwide Kaufmann Select Common
Accounts Fund Trust Stock Fund Fund Fund Stock Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Investments at
fair value ................ $ 392,603 $ 719,255 $ 575,388 $2,175,268 $ 26,997 $ 23,717 $ 76,098 $ 447,535 $4,436,861
Transfer
receivable (payable) ........ (11,914) -- -- 11,914 -- -- -- -- --
Employer's
contribution receivable ..... -- -- -- -- -- -- -- 110,602 110,602
---------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS ... $ 380,689 $ 719,255 $ 575,388 $2,187,182 $ 26,997 $ 23,717 $ 76,098 $ 558,137 $4,547,463
========== ========== ========== ========== ========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
4
<PAGE>
<TABLE>
<CAPTION>
Jefferson Bank Cash or Deferred Savings Plan
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 1996
Non-participant
Participant-directed directed
Money Vanguard Vanguard JeffBanks,Inc. JeffBanks,Inc.
Market Wellington Index Common Common
Accounts Fund Trust Stock Stock Total
<S> <C> <C> <C> <C> <C> <C>
Investments at fair value ..... $ 544,121 $ 587,376 $ 356,419 $ 889,181 $ 170,191 $2,547,288
Transfer receivable (payable) . (115,170) (5,509) (4,668) 125,347 -- --
Receivables
Employer's contribution ... -- -- -- -- 85,276 85,276
Participants' contributions 6,030 4,258 3,214 -- -- 13,502
Interest income ........... -- -- -- 22,077 -- 22,077
---------- ---------- ---------- ---------- ---------- ----------
NET ASSETS AVAILABLE
FOR BENEFITS ..... $ 434,981 $ 586,125 $ 354,965 $1,036,605 $ 255,467 $2,668,143
========== ========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
5
<PAGE>
<TABLE>
<CAPTION>
Jefferson Bank Cash or Deferred Savings Plan
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 1997
Participant-directed
Money Vanguard Vanguard JeffBanks, Inc. Janus Oakmark
Market Wellington Index Common Worldwide Kaufmann Select
Accounts Fund Trust Stock Fund Fund Fund
Additions to net assets attributed to
Investment income
Net appreciation (depreciation) in
<S> <C> <C> <C> <C> <C> <C> <C>
fair value of investments ....... $ -- $ 81,606 $ 111,441 $ 882,530 $ (1,674) $ (717) $ 7,546
Interest and dividends ............. 28,278 61,663 11,243 27,000 1,760 553 540
---------- ---------- ---------- ---------- ---------- ---------- ----------
28,278 143,269 122,684 909,530 86 (164) 8,086
---------- ---------- ---------- ---------- ---------- ---------- ----------
Contributions
Employer ........................ -- -- -- -- -- -- --
Participants .................... 91,018 117,833 100,208 133,503 10,744 10,223 20,320
---------- ---------- ---------- ---------- ---------- ---------- ----------
91,018 117,833 100,208 133,503 10,744 10,223 20,320
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total additions .............. 119,296 261,102 222,892 1,043,033 10,830 10,059 28,406
Deductions from net assets attributed to
Benefits paid to participants ...... 36,678 35,625 26,805 18,368 -- -- --
---------- ---------- ---------- --------- ---------- ---------- ---------
NET INCREASE .................... 82,618 225,477 196,087 1,024,665 10,830 10,059 28,406
Net assets available for benefits
Beginning of year .................. 434,981 586,125 354,965 1,036,605 -- -- --
Fund transfers ..................... (136,910) (92,347) 24,336 125,912 16,167 13,658 47,692
---------- ---------- ---------- ---------- ---------- ---------- ---------
End of year ........................ $ 380,689 $ 719,255 $ 575,388 $2,187,182 $ 26,997 $ 23,717 $ 76,098
========== ========== ========== ========== ========== ========== ==========
</TABLE>
Non-participant
directed
JeffBanks,Inc.
Common
Stock Total
Additions to net assets attributed to
Investment income
Net appreciation (depreciation) in
fair value of investments ....... $ 193,319 $1,274,051
Interest and dividends ............. 6,339 137,376
---------- ----------
199,658 1,411,427
---------- ----------
Contributions
Employer ........................ 110,602 110,602
Participants .................... -- 483,849
---------- ----------
110,602 594,451
---------- ----------
Total additions .............. 310,260 2,005,878
Deductions from net assets attributed to
Benefits paid to participants ...... 9,082 126,558
---------- ----------
NET INCREASE .................... 301,178 1,879,320
Net assets available for benefits
Beginning of year .................. 255,467 2,668,143
Fund transfers ..................... 1,492 --
---------- ----------
End of year ........................ $ 558,137 $4,547,463
========== ==========
The accompanying notes are an integral part of this statement.
6
<PAGE>
<TABLE>
<CAPTION>
Jefferson Bank Cash or Deferred Savings Plan
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Year ended December 31, 1996
Non-participant
Participant-directed directed
Money Vanguard Vanguard JeffBanks, Inc. JeffBanks, Inc.
Market Wellington Index Common Common
Accounts Fund Trust Stock Stock Total
<S> <C> <C> <C> <C> <C> <C>
Additions to net assets attributed to
Investment income
Net appreciation in fair
value of investments ......... $ -- $ 32,628 $ 51,687 $ 191,327 $ 21,800 $ 297,442
Interest and dividends .......... 25,426 44,708 7,156 19,306 3,916 100,512
---------- ---------- ---------- ---------- ---------- ----------
25,426 77,336 58,843 210,633 25,716 397,954
---------- ---------- ---------- ---------- ---------- ----------
Contributions
Employer ........................ -- -- -- -- 85,276 85,276
Participants .................... 256,850 141,175 150,345 -- -- 548,370
---------- ---------- ---------- ---------- ---------- ----------
256,850 141,175 150,345 -- 85,276 633,646
---------- ---------- ---------- ---------- ---------- ----------
Total additions .............. 282,276 218,511 209,188 210,633 110,992 1,031,600
Deductions from net assets attributed to
Benefits paid to participants ...... 37,306 35,771 20,308 5,871 -- 99,256
---------- ---------- ---------- ---------- ---------- ----------
NET INCREASE ................. 244,970 182,740 188,880 204,762 110,992 932,344
Net assets available for benefits
Beginning of year .................. 317,684 405,941 204,140 657,897 150,137 1,735,799
Fund transfers ..................... (127,673) (2,556) (38,055) 173,946 (5,662) --
---------- ---------- ---------- ---------- ---------- ----------
End of year ........................ $ 434,981 $ 586,125 $ 354,965 $1,036,605 $ 255,467 $2,668,143
========== ========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of this statement.
7
<PAGE>
Jefferson Bank Cash or Deferred Savings Plan
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 and 1996
NOTE A - DESCRIPTION OF PLAN
The following description of the Jefferson Bank Cash or Deferred Savings
Plan (the Plan) provides only general information. Participants should refer
to the Plan agreement for a more complete description of the Plan's
provisions.
1. General
The Plan is a defined contribution plan covering substantially all full-time
employees of Jefferson Bank of Pennsylvania and affiliates, JeffBanks, Inc.
and Jefferson Bank of New Jersey (the Company), who have 90 days of service.
It is subject to the provisions of the Employee Retirement Income Security
Act of 1974 (ERISA).
Jefferson Bank of Pennsylvania and Jefferson Bank of New Jersey are
wholly-owned subsidiaries of JeffBanks, Inc.
2. Contributions
Each participant may make a pretax salary-reduction contribution deferral,
subject to Internal Revenue Service (IRS) regulations. The Company makes
matching contributions into JeffBank, Inc.'s common stock for each
participant equal to 25% of the participant's pretax salary-reduction
contribution limited to 25% of the participant's compensation.
3. Participant Accounts
Each participant's account is credited with the participant's contribution
and allocation of the Company's contributions, forfeitures of terminated
participants' nonvested accounts and Plan earnings. Allocations are based on
participant earnings or account balances, as defined. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
4. Vesting
Participants are 100% vested in their salary-reduction contributions.
Vesting in the remainder of their accounts is based on years of service.
Participants are vested at a rate of 20% for each year of service from years
3-7 (fully vested after seven years).
5. Investment Options
Upon enrollment in the Plan, a participant may direct employee contributions
in 25% increments in any of seven investment options.
o Money Market Accounts - This fund includes the money market accounts
of Jefferson Bank of Pennsylvania and Charles Schwab with a variable
interest rate money market account whose interest approximating rates
paid on certificates of deposit.
(Continued)
8
<PAGE>
Jefferson Bank Cash or Deferred Savings Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1997 and 1996
NOTE A - DESCRIPTION OF PLAN - Continued
o Vanguard Wellington Fund - The objective of the fund is to provide
stable investment returns. 60-70% of the fund's assets are invested in
"blue chip" common stocks, 30-40% in high-quality corporate bonds,
U.S. Government securities and preferred stocks.
o Vanguard Index Trust - The objective of the fund is to provide
long-term capital appreciation. The trust owns stock in companies
reported in Standard and Poor's 500 Index.
o JeffBanks, Inc. Common Stock - The option invests solely in the common
stock of JeffBanks, Inc.
o Janus Worldwide Fund - The objective of the fund is to provide
long-term growth of capital by investing primarily in common stocks.
o Kaufman Fund - The objective of the fund is to provide capital
appreciation by investing primarily in common stocks, convertible
preferred stocks and bonds.
o Oakmark Select Fund - The objective of the fund is to provide
long-term capital appreciation by investing primarily in a
non-diversified portfolio of equity securities.
6. Payment of Benefits
On termination of service due to death, disability or retirement, a
participant may elect to receive either a lump-sum amount equal to the value
of the participant's vested interest in his or her account, or annual
installments over his or her life expectancy. For termination of service due
to other reasons, a participant may receive the value of the vested interest
in his or her account as a lump-sum distribution. Benefits are recorded when
paid.
7. Income Tax Status
The Plan has received a determination letter from the IRS stating that it
is qualified under Section 401(a) of the Internal Revenue Code (the Code)
and, therefore, is exempt from federal income taxes under Section 501(a) of
the Code.
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Plan are prepared under the accrual method
of accounting. A summary of the Plan's significant accounting policies
consistently applied in the preparation of the accompanying financial
statements follows.
(Continued)
9
<PAGE>
Jefferson Bank Cash or Deferred Savings Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1997 and 1996
NOTE B - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
1. Use of Estimates
In preparing the financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and
assumptions that affect the reported amounts of assets and disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of additions and deletions during the reporting
period. Actual results could differ from those estimates.
2. Concentration of Credit Risk
The Plan maintains its cash balances at Jefferson Bank of Pennsylvania.
These accounts are insured by the Federal Deposit Insurance Corporation up
to $100,000. At December 31, 1997, uninsured amounts held at this
institution were $264,725.
3. Investment Valuation and Income Recognition
Quoted market prices are used to value investments. The change in fair value
of assets during the year is measured by the difference between the fair
value at year-end and the fair value at the beginning of the year or costs
of purchases during the year and is reflected in the statement of changes in
net assets available for benefits as net appreciation (depreciation) in fair
value of investments.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis. Dividends are recorded on
the ex-dividend date.
NOTE C - INVESTMENTS
The following table presents the fair value of investments. Investments
that represent 5% or more of the Plan's net assets are separately
identified.
December 31, 1997
Number of Fair
shares value
Investments at fair value as
determined by quoted market price
Money Market Accounts ...... -- $ 392,603
Vanguard Wellington Fund ... 24,423 719,255
Vanguard Index Trust ....... 6,388 575,388
JeffBanks, Inc. Common Stock 57,644 2,622,803
Janus Worldwide Fund ....... 715 26,997
Kaufman Fund ............... 3,723 23,717
Oakmark Select Fund ........ 4,344 76,098
----------
$4,436,861
==========
(Continued)
10
<PAGE>
Jefferson Bank Cash or Deferred Savings Plan
NOTES TO FINANCIAL STATEMENTS - CONTINUED
December 31, 1997 and 1996
NOTE C - INVESTMENTS - Continued
December 31, 1996
Number of Fair
shares value
Investments at fair value as
determined by quoted market price
Money Market Accounts ...... -- $ 544,121
Vanguard Wellington Fund ... 22,462 587,376
Vanguard Index Trust ....... 5,145 356,419
JeffBanks, Inc. Common Stock 39,236 1,059,372
----------
$ 2,547,288
===========
The Plan's investments (including investments bought, sold and held during
the year) appreciated in value by $1,274,051 and $297,442 for December 31,
1997 and 1996.
On April 1, 1997, JeffBanks, Inc. declared a 5% stock dividend, payable on
May 13, 1997.
On January 17, 1996, JeffBanks, Inc. declared a 5% stock dividend, payable
on March 15, 1996.
NOTE D - PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate
the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants will become 100% vested in their accounts.
11
<PAGE>
SUPPLEMENTAL INFORMATION
<PAGE>
<TABLE>
<CAPTION>
Jefferson Bank Cash or Deferred Savings Plan
EIN 22-1925021
Plan #003
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
December 31, 1997
(c) Description of investment,
(b) Identity of including maturity date,
issue, borrower, rate of interest, collateral,
(a) lessor or similar party par or maturity value (d) Cost (e) Current value
- ---------------- ----------------------- ----------------------------- --------------- ----------------
<S> <C> <C>
* Jefferson Bank of Money Market Accounts $ 392,603 $ 392,603
Pennsylvania/
Charles Schwab
Vanguard Wellington 24,423 shares 529,186 719,255
Fund
Vanguard Index Trust 6,388 shares 257,713 575,388
* JeffBanks, Inc. 57,644 shares 1,184,510 2,622,803
Common Stock
Janus Worldwide Fund 715 shares 28,672 26,997
Kaufmann Fund 3,723 shares 24,434 23,717
Oakmark Select Fund 4,344 shares 68,521 76,098
------------ -----------
$ 2,485,639 $ 4,436,861
========== ==========
</TABLE>
*Party-in-interest.
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES WHICH WERE BOTH
ACQUIRED AND DISPOSED OF WITHIN THE PLAN YEAR ENDED DECEMBER 31, 1997
(b) Description of investment,
(a) Identity of including maturity date, (d)Proceeds
issue, borrower, rate of interest, collateral, (c) Costs of of
lessor or similar party par or maturity value acquisitions dispositions
No additional transactions require disclosure.
,
13
<PAGE>
<TABLE>
<CAPTION>
Jefferson Bank Cash or Deferred Savings Plan
EIN 22-1925021
Plan #003
LINE 27d - SCHEDULE OF REPORTABLE (5%) TRANSACTIONS
Year ended December 31, 1997
(f) Expense (h) Current value
incurred of asset on (i) Net
(a) Identity of c)Purchase (d)Selling (e)Lease with (g) Cost transaction gain or
party involved (b)Description of asset price price rental transaction of asset date (loss)
Category (iii) - series of security transactions.
<S> <C> <C> <C> <C> <C> <C> <C>
Jefferson Bank of Jefferson Bank of Pennsylvania/
Pennsylvania Charles Schwab Money
Market Account; purchased
in 155 transactions $ 729,243 $ -- $ -- $ -- $ -- $ -- $ --
Jefferson Bank of Jefferson Bank of Pennsylvania
Pennsylvania Money Market Account;
sold in 100 transactions -- 905,438 -- -- 905,438 905,438 --
* Vanguard Wellington Fund;
Fund; purchased in 17
transactions 147,210 -- -- -- -- -- --
* Vanguard Wellington Fund;
sold in 18 transactions -- 158,601 -- -- 158,601 158,601 --
* Vanguard Index Trust;
purchased in 14 transactions 156,433 -- -- -- -- -- --
* Vanguard Index Trust;
sold in 11 transactions -- 60,149 -- -- 60,149 60,149 --
* JeffBanks, Inc. Common Stock;
purchased in 19 transactions 492,707 -- -- -- -- -- --
* JeffBanks, Inc. Common Stock;
sold in 4 transactions -- 35,884 -- -- 35,884 35,884 --
</TABLE>
(Continued)
14
<PAGE>
<TABLE>
<CAPTION>
Jefferson Bank Cash or Deferred Savings Plan
EIN 22-1925021
Plan #003
LINE 27d - SCHEDULE OF REPORTABLE (5%) TRANSACTIONS - CONTINUED
Year ended December 31, 1997
(f) Expense (h) Current value
incurred of asset on (i) Net
(a) Identity of c)Purchase (d)Selling (e)Lease with (g) Cost transaction gain or
party involved (b)Description of asset price price rental transaction of asset date (loss)
<S> <C> <C> <C> <C> <C> <C> <C>
* Jefferson Bank of Pennsylvania/
Charles Schwab Money
Market Account; purchased
in 34 transactions $ 477,886 $ - $ - $ - $ - $ - $ -
* Jefferson Bank of Pennsylvania/
Charles Schwab Money
Market Account; sold in
17 transactions - 451,182 - - 451,182 451,182 -
</TABLE>
*Identity of party involved not required.
There were no category (i), (ii) or (iv) reportable transactions during 1997.
15
<PAGE>
