SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ________ to ________
Commission file number 0-22536
-------
Taneytown Bank & Trust Company Retirement Savings Plan
------------------------------------------------------
Full title of the plan
222 East Baltimore Street
Taneytown, Maryland 21787
-------------------------
Address of the plan
Monocacy Bancshares, Inc.
----------------------------------------------------------
Name of issuer of the securities held pursuant to the plan
Maryland 52-1824297
--------------------------------- -------------------
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
222 E. Baltimore Street
Taneytown, Maryland 21787
------------------------------- -------------------
(Address of Principal Executive (Zip Code)
Offices)
(410) 756-2655
------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
<PAGE>
Item 4
(a) Financial Statements: Financial Statements of the Plan.
The information required to be set forth herein is included in the Plan
Financial Statements, which is attached hereto in exhibit(13)and is
incorporated herein by reference.
(b) Exhibits:
(13) Financial Statements of the Plan
(23) Consent of Independent Accountants
<PAGE>
SIGNATURES
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.
Taneytown Bank & Trust Company
Retirement Savings Plan
------------------------------
(Name of Plan)
By: Taneytown Bank and Trust
Company as Plan Administrator
June 30, 1997 /s/ Michael K. Walsch
------------- ------------------------------
Date Michael K. Walsch, Executive
Vice President and Chief
Operating Officer and Chief
Financial Officer, Taneytown
Bank and Trust Company
<PAGE>
Exhibit (13)
TANEYTOWN BANK & TRUST COMPANY
RETIREMENT & SAVINGS PLAN
REPORT ON AUDITS
OF FINANCIAL STATEMENTS
FOR THE YEARS ENDED
DECEMBER 31, 1996 AND 1995
<PAGE>
TABLE OF CONTENTS
Page
----
INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS
Statements of Net Assets Available
for Plan Benefits 2
Statement of Changes in Net Assets
Available for Plan Benefits 3 - 4
NOTES TO FINANCIAL STATEMENTS 5 - 9
SUPPLEMENTARY SCHEDULES RELATING TO
ERISA AND DOL REGULATIONS
Schedule of Assets Held for Investment
Purposes 10
Schedule of Reportable Transactions 11
<PAGE>
[Stegman & Company Logo]
INDEPENDENT AUDITORS' REPORT
To the Administrative Committee of
Taneytown Bank & Trust Company
Retirement & Savings Plan
We have audited the accompanying statements of net assets available for
benefits of the Taneytown Bank & Trust Company Retirement & Savings Bank as of
December 31, 1996 and 1995, and the related statement 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
Taneytown Bank & Trust Company Retirement & Savings Plan as of December 31, 1996
and 1995, and the changes in its net assets available for benefits for the years
then ended in conformity with generally accepted accounting principles.
Our audits were conducted 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 transactions are presented
for the purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. 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/ Stegman & Company
Baltimore, Maryland
June 11, 1997
1
<PAGE>
TANEYTOWN BANK & TRUST COMPANY
RETIREMENT & SAVINGS BANK
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
DECEMBER 31, 1996 AND 1995
1996 1995
---------- ----------
ASSETS:
Investments - at fair value:
Federated investors:
Federated Money Market Fund $ 523,440 $ 530,019
Federated Managed Income Fund 153,380 123,893
Federated Managed Growth & Income Fund 339,829 270,570
Federated Managed Growth Fund 326,216 309,752
Federated Managed Aggressive Growth Fund 278,288 231,266
---------- ----------
1,621,153 1,465,500
---------- ----------
Monocacy Bancshares stock 54,719 -
Participant Loans 42,071 13,223
---------- ----------
Total investments 1,717,943 1,478,723
---------- ----------
Receivables:
Employee salary reduction contribution 5,991 5,969
Employer matching contribution 12,864 13,251
---------- ----------
Total receivables 18,855 19,220
---------- ----------
TOTAL ASSETS 1,736,798 1,497,943
LIABILITIES - -
---------- ----------
NET ASSETS AVAILABLE FOR PLAN BENEFITS $1,736,798 $1,497,943
========== ==========
See accompanying notes.
2
<PAGE>
TANEYTOWN BANK & TRUST COMPANY RETIREMENT & SAVINGS PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 1996
<TABLE>
<CAPTION> Federated Federated
Federated Federated Managed Federated Managed
Money Managed Growth & Managed Aggressive
Market Income Income Growth Growth
Fund Fund Fund Fund Fund
--------- -------- --------- --------- ----------
<S> <C>
ADDITIONS TO NET ASSETS
ATTRIBUTED TO:
Investment income:
Net realized and unrealized appreciation
in fair value of investments $ - $ (1,058) $ 2,420 $ 14,723 $ 15,177
Interest - - - - -
Dividends 24,891 9,063 18,002 19,833 15,085
--------- ---------- --------- --------- ---------
24,891 8,005 20,422 34,556 30,262
--------- ---------- --------- --------- ---------
Contributions:
Employer's contribution 2,450 1,618 4,758 5,816 4,462
Employer's matching contribution 4,072 3,599 20,654 18,943 12,994
Salary reduction contribution 16,382 11,718 50,541 45,071 29,693
Rollover contribution 2,636 2,636 1,315 345 1,463
---------- ---------- ---------- ---------- ----------
25,540 19,571 77,268 70,175 48,612
--------- --------- --------- --------- ---------
Total additions 50,431 27,576 97,690 104,731 78,874
DEDUCTIONS FROM NET ASSETS
ATTRIBUTED TO -
Participant payments and withdrawals 19,905 3,181 18,007 44,434 39,286
--------- ---------- --------- --------- ---------
NET INCREASE PRIOR TO INTERFUND
TRANSFERS 30,526 24,395 79,683 60,297 39,588
INTERFUND TRANSFERS (37,105) 5,092 (10,424) (43,833) 7,434
--------- ---------- --------- --------- ----------
NET (DECREASE) INCREASE IN
NET ASSETS AVAILABLE FOR
PLAN BENEFITS (6,579) 29,487 69,259 16,464 47,022
NET ASSETS AVAILABLE FOR PLAN
BENEFITS AT BEGINNING OF YEAR 530,019 123,893 270,570 309,752 231,266
--------- --------- --------- --------- ---------
NET ASSETS AVAILABLE FOR PLAN
BENEFITS AT END OF YEAR $523,440 $153,380 $339,829 $326,216 $278,288
======== ======== ======== ======== ========
</TABLE>
See accompanying notes.
3
<PAGE>
<TABLE>
<CAPTION>
Monocacy Partici- Total
Bancshares pant -------------------------------
Stock Loans Other 1996 1995
------------ --------- ------- ----------- -----------
<S> <C>
$ (32) $ - $ - $ 31,230 $ 95,450
- 2,232 - 2,232 858
- - - 86,874 78,403
----------- ---------- ---------- ----------- -----------
(32) 2,232 - 120,336 174,711
--------- -------- ---------- ----------- -----------
- - - 19,104 24,596
862 - - 61,124 58,994
1,462 - - 154,867 138,349
- - - 8,395 470
---------- ---------- ---------- ----------- -------------
2,324 - - 243,490 222,409
-------- ---------- ---------- ----------- -----------
2,292 2,232 - 363,826 397,120
- 158 - 124,971 84,122
---------- -------- ---------- ----------- ------------
2,292 2,074 - 238,855 312,998
52,427 26,774 (365) - -
-------- -------- --------- ----------- ------------
54,719 28,848 (365) 238,855 312,998
- 13,223 19,220 1,497,943 1,184,945
---------- -------- -------- ----------- -----------
$54,719 $42,071 $18,855 $1,736,798 $1,497,943
======= ======= ======= ========== ==========
</TABLE>
4
<PAGE>
TANEYTOWN BANK & TRUST COMPANY
RETIREMENT & SAVINGS PLAN
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1995
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following are the significant accounting policies followed by the
Taneytown Bank & Trust Company Retirement & Savings Plan (the Plan):
Method of Accounting
The financial statements are prepared on the accrual basis of
accounting.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires the plan administrator to make
estimates and assumptions that affect certain reported amounts and disclosures.
Accordingly, actual results may differ from those estimates.
Valuation of Securities
Investments in mutual funds are presented at fair value as
determined by closing prices on national exchanges.
Investment in Monocacy Bancshares, Inc. stock is valued by the
Board of Directors. The per share estimated fair value is determined by
reviewing the bid and ask quotations for similar sized institutions.
2. DESCRIPTION OF PLAN
The following description of the Taneytown Bank & Trust Company
Retirement & Savings Plan (the "Plan") as amended July 1, 1991 provides only
general information. Participants should refer to the Plan agreement for a more
complete description of the Plan's provisions.
General
The Plan is a defined contribution plan covering substantially
all employees of Taneytown Bank & Trust Company and its affiliates credited with
at least six months of eligibility service as defined.
5
<PAGE>
Contributions
Participants may elect to have their salary reduced by a minimum
of 1% and a maximum of 15%.
The Plan sponsor will make contributions of 50% of the first 6%
of a participant's contribution. Additionally, the sponsor may make
discretionary contributions to be determined each year.
Investment Options
Upon enrollment in the Plan, participants may direct all
contributions, in 1% increments, in any of six investment options.
o Federated Money Market Fund
o Federated Managed Income Fund
o Federated Managed Growth & Income Fund
o Federated Managed Growth Fund
o Federated Managed Aggressive Growth Fund
o Monocacy Bancshares, Inc. stock
Participants may change their investment options four times per
year.
Retirement
Normal retirement age is 65. Upon retirement, a participant can
elect to receive the vested plan account balance in any of the various payment
forms provided in the Plan.
Death Benefits
Upon the death of an active participants, the participant's
beneficiary is entitled to receive a death benefit equal to the vested
undistributed balance of the participant's plan account.
Disability
In the event, an active participant becomes disabled, he is
entitled to the full vested amount of his undistributed plan account.
6
<PAGE>
Vesting
The Company's matching deposit account and the Company's basic
deposit account contain the following vesting provisions:
Completed Years Vested
of Service Percentage
--------------- ----------
1 20%
2 40%
3 60%
4 80%
5 100%
Notwithstanding the above, a participant shall be fully
vested upon death, attainment of normal retirement age, or disability.
A participant's elective contributions are always fully
vested.
Termination of the Plan
In the event of termination of the Plan, the value of the
interests of all affected participants is determined as soon as possible and
becomes fully vested. If the sponsor elects, a lump sum payment of each affected
participant's undistributed plan account is made.
Tax Status
The Plan is exempt from federal income tax under Sections 401
and 501 of the Internal Revenue Code. The Internal Revenue Service has
determined and informed the Plan by letter dated February 17, 1993 that the Plan
is designed in accordance with applicable sections of the Internal Revenue Code.
3. TRUSTEE AND PLAN ADMINISTRATION
Trustee
Taneytown Bank & Trust Company's Trust Department is the
trustee of the Plan's funds.
Plan Administration
A committee appointed by Taneytown Bank & Trust Company is
authorized to adopt rules and regulations necessary to carry out the terms and
intentions of the Plan.
7
<PAGE>
Plan Expenses
All expenses related to the administration of the Plan are
paid by Taneytown Bank & Trust Company.
Participant Loans
Participants may borrow up to the lesser of $50,000 or 50% of
their vested account balance. Interest is charged based on government published
indices. Loans to participants are carried at cost which approximates fair
value.
4. INVESTMENTS
The aggregate cost basis and estimated fair value of the Plan's
investments at December 31, 1996 and 1995, are as follows:
Each investment with federated investors is in excess of 5% of plan assets.
<TABLE>
<CAPTION>
1996 1995
--------------------------- ---------------------------
Estimated Estimated
Fair Fair
Cost Value Cost Value
--------- ----------- ---------- ----------
<S> <C>
Federated Investors:
Federated Money Market Fund $ 523,440 $ 523,440 $ 530,019 $ 530,019
Federated Managed Income Fund 154,988 153,380 118,907 123,893
Federated Growth & Income Fund 339,832 339,829 250,609 270,570
Federated Managed Growth Fund 324,261 326,216 281,864 309,752
Federated Managed Aggressive
Growth Fund 269,370 278,288 208,056 231,266
---------- ---------- ---------- ----------
1,611,891 1,621,153 1,389,455 1,465,500
---------- ---------- ---------- ----------
Monocacy Bancshares, Inc. stock 54,751 54,719 - -
Participant Loans - 42,071 - 13,223
---------- ---------- ---------- ----------
Total $1,666,642 $1,717,943 $1,389,455 $1,478,723
========== ========== ========== ==========
</TABLE>
5. COMMITMENTS AND LIABILITIES
At December 31, 1996, there were no lease or other commitments or
liabilities, fixed or contingent, not included in the financial statements or
notes thereto.
8
<PAGE>
6. PARTIES IN INTEREST
During 1996, there were no agreements or transactions with parties in
interest except as described in the financial statements or notes thereto.
7. RECONCILIATION TO FORM 5500
The financial statements at December 31, 1996 differ from Form 5500
filed with the IRS in that net gains (losses) and unrealized appreciation
(depreciation) of assets have been combined in the financial statements as net
realized and unrealized appreciation (depreciation) in aggregate fair value of
investments rather than shown separately as on lines 32b(4) and 32b(5) of Form
5500.
9
<PAGE>
SUPPLEMENTAL SCHEDULES RELATING TO
ERISA AND DOL REGULATIONS
<PAGE>
TANEYTOWN BANK & TRUST COMPANY
RETIREMENT & SAVINGS PLAN
ITEM 27a (FORM 5500) - SCHEDULE OF ASSETS
HELD FOR INVESTMENT PURPOSES
DECEMBER 31, 1996
EMPLOYER IDENTIFICATION #52-0247790
PLAN #003
<TABLE>
<CAPTION>
(c)
(a) (b) Description of Investment
Identity of Issue, Including Maturity Date, (e)
Borrower, Lessor, Rate of Interest, Collateral (d) Current
or Similar Party Par or Maturity Value Cost Value
------------------- ---------------------------- ---- -------
<S> <C>
Federated Money Market Fund Money Market $ 523,440 $ 523,440
Federated Managed Income Fund Mutual Fund 154,988 153,380
Federated Growth & Income Fund Mutual Fund 339,832 339,829
Federated Managed Growth Fund Mutual Fund 324,261 326,216
Federated Managed Aggressive
Growth Fund Mutual Fund 269,370 278,288
Monocacy Bancshares, Inc. Stock 54,751 54,719
Participant Loans AFR - 42,071
---------- ----------
$1,666,642 $1,717,943
</TABLE>
10
<PAGE>
TANEYTOWN BANK & TRUST COMPANY
RETIREMENT & SAVINGS PLAN
ITEM 27d (FORM 5500) - SCHEDULE OF REPORTABLE TRANSACTIONS
DECEMBER 31, 1996
EMPLOYER IDENTIFICATION #52-0247790
PLAN #003
<TABLE>
<CAPTION>
(h)
(f) Current
Expense Value of
(c) (d) Incurred (g) Asset on (i)
(a) (b) Purchase Selling with Cost of Transaction Net Gain
Description of Asset Price Price Transaction Asset Date or (Loss)
-------------------- --------- ------- ----------- ------- ----------- ---------
<S> <C>
NONE
</TABLE>
11
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration
Statement on Form S-8 (Registration No. 333-07865) filed on July 10, 1996 and
the related Prospectus for the Taneytown Bank & Trust Company Retirement &
Savings Plan sponsored by Monocacy Bancshares, Inc. of our report dated June 11,
1997, appearing on page 1 of this Annual Report on Form 11-K.
/s/ Stegman & Company
Towson, Maryland
June 27, 1997
