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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 2)*
WHG Bancshares Corporation
(Name of Issuer)
Common Stock, par value $0.10 per share
(Title of Class of Securities)
928949106
(CUSIP Number)
Jerome H. Davis
c/o David M. Perlmutter, Esq.
200 Park Ave., Suite 4515, New York, NY 10166
(212) 986-4900
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
January 2, 1997
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following
box / /.
Check the following box if a fee is being paid with this statement / /.
(A fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five percent of
the class of securities described in Item 1; and (2) has filed no amendment
subsequent thereto reporting beneficial ownership of five percent or less of
such class). (See Rule 13d-7.)
Note: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are
to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing of this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
Page 1 of 10 Pages
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CUSIP No. 928949106
1. Name of Reporting Person Jerome H. Davis
S.S. or I.R.S. Identification ###-##-####
No. of Above Person
2. Check the Appropriate Box (a)
if a Member of a Group (b) X
(See Instructions)
3. SEC Use Only
4. Source of Funds (See Instructions)
PF
5. Check Box if Disclosure of Legal
Proceedings is Required / /
Pursuant to Items 2(d) or 2(e)
6. Citizenship or Place of
Organization United States
Number of 7. Sole Voting Power -0-
Shares 8. Shared Voting
Beneficially Power 161,133*<F1>
Owned by 9. Sole Dispositive
Each Report- Power -0-
ing Person 10. Shared Dispositive
with Power 161,133*<F1>
11. Aggregate Amount Beneficially
Owned by Each Reporting Person 161,133*<F1>
12. Check Box if the Aggregate Amount
in Row (11) Excludes Certain / /
Shares (See Instructions)
13. Percent of Class Represented
by amount in Row (11) 9.94%
14. Type of Reporting Person IN
(See Instructions)
<F1>
* See Items 5(a) and 5(b) of this Statement.
Page 2 of 10 Pages
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CUSIP No. 928949106
1. Name of Reporting Person Susan B. Davis
S.S. or I.R.S. Identification ###-##-####
No. of Above Person
2. Check the Appropriate Box (a)
if a Member of a Group (b) X
(See Instructions)
3. SEC Use Only
4. Source of Funds (See Instructions)
PF
5. Check Box if Disclosure of Legal
Proceedings is Required / /
Pursuant to Items 2(d) or 2(e)
6. Citizenship or Place of
Organization United States
Number of 7. Sole Voting Power -0-
Shares 8. Shared Voting
Beneficially Power 161,133*<F2>
Owned by 9. Sole Dispositive
Each Report- Power -0-
ing Person 10. Shared Dispositive
with Power 161,133*<F2>
11. Aggregate Amount Beneficially
Owned by Each Reporting Person 161,133*<F2>
12. Check Box if the Aggregate Amount
in Row (11) Excludes Certain / /
Shares (See Instructions)
13. Percent of Class Represented
by amount in Row (11) 9.94%
14. Type of Reporting Person IN
(See Instructions)
<F2>
* See Items 5(a) and 5(b) of this Statement.
Page 3 of 10 Pages
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The Statement on Schedule 13D (the "Statement") of Jerome
H. Davis, with respect to the Common Stock, par value $.10 per
share (the "Common Stock"), of WHG Bancshares Corporation, a
Maryland corporation ("WHG") is hereby amended as set forth below.
Item 4. Purpose of Transaction.
Item 4 of the Statement is hereby supplemented by the
addition of the following:
"Mr. and Mrs. Davis originally acquired the shares of
Common Stock for investment and without any purpose of changing or
influencing the control of WHG. Based on Mr. Davis' review of
WHG's financial results for the year ending September, 1996, Mr.
and Mrs. Davis now believe that WHG should consider several options
to enhance shareholder value. This view along with Mr. Davis'
several concerns regarding WHG's recent financial performance are
discussed in his January 2, 1997 letter to WHG's Board of
Directors, a copy of which is attached hereto as Exhibit No. 2.
In his letter, Mr. Davis sets forth the following
specific concerns and suggestions regarding WHG's year end
financial results:
1) Low Rate of Earnings. WHG earned only $224,000 net
for the September quarter, which corresponds to a quarterly
earnings rate of just $.14 and an annual earnings rate of only
$.56. Such a poor annualized earnings rate will not justify a
further increase in the price of the Common Stock which already
trades at a rich 22 times earnings.
2) Poor return on equity. WHG's current book value per
share is $14.34. Based on a $.56 annual earnings rate, its return
on equity is only 3.9% annualized for the quarter ending September,
1996. With this return on equity, the price of the Common Stock
will not rise.
3) Small dividends. WHG's quarterly dividend of only
$.05 per share provides a poor current yield of only 1.5% on an
annual basis. Such a low yield also precludes any increase in the
current price of the Common Stock.
4) Ratio of stock price to book value. The current
price of approximately $13.00 per share for the Common Stock
reflects 90% of WHG's book value. In as much as this is no longer
cheap, a further increase in the price of the Common Stock can not
be expected to occur without direct enhancements by WHG's
management.
Page 4 of 10 Pages
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5) High efficiency ratio. WHG's efficiency ratio when
annualized for the September quarter is on the high side at 62%.
Therefore, a reduction of expenses is warranted, which will also
improve earnings.
All references to financial performance valuations and
ratios discussed above have been adjusted to take into account
WHG's one-time SAIF charge.
In view of WHG's recent financial performance, Mr. Davis
offers the following suggestions to WHG to increase shareholder
value: (i) conduct a share repurchase (to the maximum extent
allowable), up to $14 3/8 per share (100% of book); (ii) increase
its quarterly dividend by $.01 per quarter for the next 3 quarters;
and (iii) pay a special dividend of up to $7.00 per share (even if
on a taxable basis), which would still leave WHG with a generous
12.3% capital ratio.
Mr. Davis believes that the above listed suggestions, in
particular the special dividend, if implemented would measurably
improve WHG's ROE, provide shareholders with substantial cash for
reinvestment, and lower WHG's PE ratio. Mr. Davis further believes
that his suggestions will also make WHG more attractive to a
potential acquiror, in addition to considerably enhancing
shareholder value and materially improving WHG's balance sheet.
Mr. Davis concludes his letter by expressing his hope
that his recommendations will be put into effect by WHG's board of
directors at the earliest opportunity.
Other than as described above, Mr. and Mrs. Davis do not
have any plan or proposal which relates to or would result in any
of the actions enumerated in Item 4 of Schedule 13D, except that
Mr. and Mrs. Davis may dispose of some or all of the Common Stock
or may acquire additional shares of Common Stock, from time to
time, depending upon price and market conditions, evaluation of
alternative investments, and other factors."
Item 7. Materials to be filed as Exhibits.
Item 7 of the Statement is hereby supplemented by the
addition of the following:
"2. Letter dated January 2, 1997 from Jerome H. Davis to
the Board of Directors of WHG Bancshares Corporation."
Page 5 of 10 Pages
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Signature.
After reasonable inquiry and to the best knowledge and
belief of the undersigned, the undersigned certify that the
information set forth in this amendment is true, complete and
correct.
1/02/97 Jerome H. Davis
Date (Signature)
1/02/97 Susan B. Davis
Date (Signature)
Page 6 of 10 Pages
The Board of Directors January 2, 1997
c/o Mr. John Lufburrow, Chairman
WHG Bancshares
Re: Year End (9/96) posted results
I have examined the annual report and related financials which
arrived with your proxy materials. Steps need to be taken now to
enhance share value.
You have asked for my vote in support of re-election of directors.
I ask that you implement certain enhancements.
First, my comments re: the financial results take the one-time SAIF
charge into account. I have backed-out the charge.
I. Earnings. Our company earned only $224,000 net, for the Sept.
Q. Although you've had the conversion proceeds since April,
earnings are poor, at only 14 cents (Q). This annual rate of only
$.56 means our stock trades "rich" now, at 22 times earnings. By
this measure, our stock cannot rise!
Page 7 of 10 Pages
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II. With book of $14.34, ROE annualized is a paltry 3.9 per cent
by this measure, stock cannot rise.
III. Dividend annualized of only $.20 provides for a poor current
yield of only 1 1/2 percent. Stock won't rise.
IV. At $13.00 currently, our stock trades "rich" at 90 per cent of
book. By this measure as well, stock is fully priced.
V. Efficiency ratio is too high at 62 per cent (annualized for
the Sept. Q.). With an average of only $14.4 million in deposits
per branch, perhaps the value of WHG is greater to an acquiror.
Page 8 of 10 Pages
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Recommended steps to be taken now:
I. Share re-purchase plan, as large as regulators will allow.
Buy the stock, aggressively, even up to $14 3/8 per share (100% of
book).
II. Increase the regular dividend by .01 per quarter, for the next
3 quarters only. Send a signal to investors! "Watch WHG!"
II. Pay a large "special dividend," even taxable, IF it cannot be
done tax-free in April. Your present 24.1% capital ratio easily
allows for $7.00 per share special dividend. This would still
leave our company with a generous 12.3% capital ratio. Payment of
a large special dividend would A) improve the company ROE
measurably, B) make WHG for more desirable to a prospective
acquiror, C) provide shareholders with substantial cash
Page 9 of 10 Pages
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for reinvestment, in any area, and D) lower the PE ratio
considerably, from 22 times earnings currently, to about 16 times
($7.00 stock dividend by reduced earnings of about .44/year).
Taken together, implementation of my suggestions I, II, & III above
will have a material effect on the balance sheet and a considerable
enhancement to the stock value for all shareholders.
I know you're aware of these measures - they're not new. I hope to
see them all take place. For now, enclosed is my proxy vote FOR
re-election of all directors.
Sincerely,
Jerome Davis
(Signature)
Page 10 of 10 Pages
