SOUTHWEST NATIONAL CORPORATION
GREENSBURG, PENNSYLVANIA
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
APRIL 16, 1996
TO THE SHAREHOLDERS:
Notice is hereby given that the annual meeting of shareholders of
Southwest National Corporation will be held at its main office, 111
South Main Street, Greensburg, Pennsylvania, on Tuesday, April 16, 1996
at 1:00 p.m., for the purpose of considering and voting upon the
following:
1. ELECTION OF DIRECTORS: Fixing the number of Directors to be
elected at 11 and electing the 11 nominees listed in the Proxy Statement
accompanying the notice of the meeting.
2. OTHER BUSINESS: To consider and act upon any other matter
which may properly be brought before the meeting or any adjournment
thereof.
Only those shareholders of record at the close of business on March
8, 1996, will be entitled to notice of and to vote at the meeting.
There are enclosed herewith a Proxy Statement and form of proxy.
It will be appreciated if you will date and sign the proxy and return it
promptly in the enclosed envelope.
By Order of the Board of Directors
/s/ Donald A. Lawry
Donald A. Lawry
Secretary and Treasurer
March 15, 1996
<PAGE>
SOUTHWEST NATIONAL CORPORATION
111 SOUTH MAIN STREET, P.O. BOX 760
GREENSBURG, PENNSYLVANIA 15601
PROXY STATEMENT
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD APRIL 16, 1996
The enclosed proxy is being solicited by the Board of Directors of
Southwest National Corporation (the "Corporation") for use at the annual
meeting of shareholders of the Corporation to be held April 16, 1996 at
1:00 p.m. at the main office of the Corporation, 111 South Main Street,
Greensburg, Pennsylvania. This Proxy Statement and the enclosed form of
proxy are being sent to shareholders of the Corporation on March 15,
1996.
The proxy may be revoked by a shareholder at any time before it is
exercised by sending a written notice of revocation to the Secretary,
Southwest National Corporation, P. O. Box 760 Greensburg, Pennsylvania
15601 or by attending the meeting and voting in person. Solicitations
of proxies may be made by personal interviews and telephone by Directors
and officers of the Corporation. Brokerage houses and other custodians,
nominees and fiduciaries will be requested to forward solicitation
material to the beneficial owners of the stock held of record by such
persons. Expenses for such solicitation will be borne by the
Corporation.
The only class of stock of the Corporation presently outstanding is
common stock. The total number of outstanding shares of common stock at
the close of business on March 8, 1996, the record date for the
determination of the shareholders entitled to vote at the meeting, was
3,180,787. In electing Directors of the Corporation, every shareholder
entitled to vote has cumulative voting rights; that is, the shareholder
has the right to multiply the number of shares that he or she may be
entitled to vote by the total number of Directors to be elected and may
cast the entire number of such votes for one candidate or may distribute
them among any two or more candidates. For all other purposes each
share is entitled to one vote.
At the meeting, the shareholders will (i) act upon a proposal to
fix the number of Directors at 11; (ii) vote on the election of the 11
nominees listed in the Proxy Statement as Directors; and (iii) consider
and act upon any other business that may be properly brought before the
meeting. The Board of Directors of the Corporation recommends a vote
FOR the proposal to fix the number of Directors at 11 and the election
as Directors of the 11 nominees hereinafter named. The 11 nominees
receiving the highest number of votes cast, including votes cast
cumulatively, shall be elected Directors. To be adopted, all of the
proposals must be approved by a majority of the votes cast at the
meeting.
The Corporation's business is carried on primarily by its wholly-
owned subsidiary Southwest National Bank of Pennsylvania (the "Bank").
<PAGE> 1
ELECTION OF DIRECTORS
INFORMATION CONCERNING NOMINEES
The bylaws of the Corporation provide that the number of Directors
shall be not less than 5 nor more than 25, as from time to time shall be
determined by the shareholders at any meeting of the shareholders at
which Directors are elected or by a full majority of the Board of
Directors. Pursuant to the bylaws, the full Board of Directors may add
additional persons to the Board during the year if it, in its
discretion, believes that the best interests of the Corporation would be
served by so doing. The Board of Directors has proposed that the
shareholders fix the number to be elected at the annual meeting on April
16, 1996, at 11. Currently there are 11 Directors.
The nominees named below are proposed to be elected to hold office
until the next annual meeting of shareholders and until the election and
qualification of their successors. The proxies solicited hereby, unless
directed to the contrary therein, will vote for the nominees named
below. All of the nominees have expressed their willingness to serve.
The Board of Directors has no reason to believe that any nominee will be
unavailable or unable to serve as a Director, but if for any reason any
of these nominees should not be available or able to serve, the
accompanying proxy will be voted by the persons acting under the proxy
according to the best judgment of the persons named in the proxy. The
names of the 11 nominees for election as Directors of the Corporation,
their principal occupations or present positions with the Corporation or
the Bank, if any, the year they first became Directors of the
Corporation or the Bank, their age and the number of shares of the
Corporation's common stock beneficially owned by them, as of February 2,
1996, are set forth in the following table:
<TABLE>
<CAPTION>
Name and principal Approximate
occupation or Beneficial percentage of
employment for the Director ownership outstanding
past five years (1)(2) since Age of shares(3) shares
<S> <C> <C> <C> <C>
Ray T. Charley 1989 44 13,560 .426%
President, Thomi Co.,
retail grocers
James A. Critchfield, Jr. 1983 70 384 .012
Attorney at Law
David S. Dahlmann 1990 46 720 .023
President and Chief
Executive Officer of the
Corporation and the Bank,
formerly Chief Operating
Officer and Executive Vice
President of the Bank
Charles E. Henry 1989 65 3,421 .108
President, Chas. M. Henry
Printing Co.
A. Richard Kacin 1994 55 1,460 .046
President, A. Richard Kacin,
Inc., real estate
construction and development
and President, Delmont
Builders Supply, Inc.
Alexander H. Lindsay, Jr. 1986 49 760 .024
President, Lindsay, Jackson,
and Martin, P.C., Attorneys
<PAGE> 2
Joseph V. Morford, Jr. 1983 66 1,225 .039
Retired, formerly President,
Moore and Morford, Inc.,
steel fabricators
James W. Newill 1978 61 77,800 2.446
Certified Public Accountant,
formerly President,
J. W. Newill Company,
public accounting firm
John A. Robertshaw, Jr. 1986 69 9,334 .293
Chairman, Laurel Vending,
Inc., vending and food
service
Laurie Stern Singer 1994 44 120 .004
President, Allegheny Valley
Chamber of Commerce and
President, Allegheny Valley
Development Corporation
William W. Thomson 1992 60 770 .024
Managing Partner, Thomson,
Tomsey & Co., Certified
Public Accountants
Directors, nominees and 110,564 3.476%
officers of the Corporation
as a group
(14 persons)(4)
<FN>
(1) All nominees held the position indicated or other senior executive
position with the same entity for the past five years.
(2) No Director of the Corporation is presently a Director of another
company filing reports with the Securities and Exchange Commission.
(3) The nominees identified in the table possess sole voting and
investment powers with respect to the shares shown opposite their names
except the following who hold shares jointly with their respective
wives: Mr. Charley, 480 shares; Mr. Dahlmann, 720 shares and Mr. Henry,
2,529 shares. The following Directors were beneficial owners of shares
held by their respective wives: Mr. Morford, 495 shares and Mr.
Robertshaw, 840 shares. The shares listed for Mr. Thomson include 90 of
the 120 shares listed in the name of a partnership of which he is
managing partner and has a 75% interest. The shares listed for Mr.
Kacin include 600 shares held in the name of an employees retirement
plan which he is a trustee. The total number of shares includes 700
shares owned by Irving A. Pratt, Vice President of the Corporation, 160
shares owned by Robert J. Stack, Vice President of the Corporation,
jointly with his wife and 150 shares owned by Donald A. Lawry, Secretary
and Treasurer of the Corporation, jointly with his wife.
(4) Mr. Dahlmann listed above; Irving A. Pratt, Vice President, Robert
J. Stack, Vice President and Donald A. Lawry, Secretary and Treasurer
are the only officers of the Corporation.
T. Timothy Reese resigned from the Board of Directors effective October
1995. Mr. Reese had no disagreement with management or the Board of
Directors. Mr. Reese owned 120 share or .004% of the total outstanding
shares of the Corporation.
</TABLE>
<PAGE> 3
OTHER NOMINATIONS
Other nominations may be made at the meeting only after at least 14
days notice has been given in writing according to the procedures set
forth in Article III Section 3.3 of the bylaws of the Corporation that
states:
"Nominations for election to the Board of Directors may be made by
the Board of Directors or by any shareholder of the Corporation entitled
to vote for the election of Directors. Nominations, other than those
made by or on behalf of the existing management of the Corporation,
shall be made in writing and shall be delivered or mailed to the
President of the Corporation not less than 14 nor more than 50 days
prior to any meeting of the shareholders called for the purpose of
electing Directors; provided, however, that if less than 21 days'
notice of the meeting is given to shareholders, such nomination shall be
mailed or delivered to the President of the Corporation not later than
the close of business on the seventh day following the day on which the
notice of meeting was mailed. Such notice shall contain the following
information to the extent known to the notifying shareholder: (a) the
name and address of each proposed nominee; (b) the principal occupation
of each proposed nominee; (c) the total number of shares of stock of the
Corporation that will be voted for each proposed nominee; (d) the name
and residence address of the notifying shareholder; and (e) the number
of shares of stock of the Corporation owned by the notifying
shareholder. Nominations not made in accordance herewith may, in the
discretion of the chairman of the meeting, be disregarded by him, and
upon his instructions the judges of election may disregard all votes
cast for each such nominee."
BOARDS AND COMMITTEES
It is the policy of the Corporation that its Directors also serve
as Directors of its wholly-owned subsidiary, the Bank. The Board of the
Corporation met 12 times in 1995 and the Board of the Bank met 12 times
in 1995.
The Board of the Corporation has the following standing committees:
Examining Committee and Executive Committee. The Board of the Bank has
the following standing committees: Examining Committee, Executive
Committee, Personnel Committee and Trust Committee. Neither Board has a
Nominating Committee.
Directors appointed to the Examining Committee of the Corporation
also serve as members of the Examining Committee of the Bank. Both
Examining Committees met concurrently 5 times in 1995. The Examining
Committees perform the functions of an audit committee and their
responsibilities include causing an examination of the affairs of the
Corporation and Bank to be made, reviewing reports of examinations of
the Corporation and the Bank made by the Federal Reserve Bank and the
Office of the Comptroller of the Currency and reporting the findings and
recommendations to the respective Board. Appointment of the independent
public accountants is made by the Board of Directors upon the
recommendation of the Examining Committees. The Examining Committees
presently have as members Directors Henry, Kacin, Morford, Robertshaw,
Singer and Thomson.
Directors appointed to the Executive Committee of the Corporation
also serve as members of the Executive Committee of the Bank. Both
Executive Committees met concurrently 12 times in 1995. Their
responsibilities include review of the loans and securities of the Bank
and the exercise of all the powers of the full Boards between regular
meetings of the Boards. The Executive Committees presently have as
members Directors Critchfield, Dahlmann, Henry, Lindsay, Morford,
Robertshaw and Thomson.
<PAGE> 4
The Personnel Committee of the Bank met 5 times in 1995. Its
responsibilities include reviewing and recommending to the Board the
salaries of certain senior officers of the Bank. The Personnel
Committee presently has as members Directors Charley, Dahlmann, Kacin,
Lindsay, Newill and Singer.
The Trust Committee of the Bank met 12 times in 1995. Its
responsibilities include the general review of the activities of the
trust department of the Bank in the administration of its fiduciary
relations. The Trust Committee presently has as members Directors
Charley, Critchfield, Dahlmann and Newill.
COMPENSATION OF DIRECTORS
The Corporation paid for the year 1995 an annual retainer of $2,500
to Directors who are not officers. Directors who are not officers are
paid $400 by the Bank for each regularly scheduled Bank Board meeting
attended and $300 for attendance at each regularly scheduled Bank
Committee meeting. Officers of the Corporation or the Bank are not paid
for attendance at any meeting. Directors who are not officers will be
paid an additional $100 for attendance at special Bank Board meetings
and Bank Committee meetings.
All Directors of the Corporation and/or the Bank may defer all or a
portion of the receipt of their fees, according to the terms of a
Directors Deferred Compensation Plan, until they terminate their
election or cease to be a Director. Payment of interest on accumulated
balances under the Plan is at market rates, but balances are accrued
rather than funded by the Corporation or the Bank.
TRANSACTIONS WITH DIRECTORS, OFFICERS AND ASSOCIATES
Certain Directors, officers of the Corporation and the Bank and
their associates were customers of the Bank during 1995. Transactions
that involved loans or commitments by the Bank were made in the ordinary
course of business and on substantially the same terms, including
interest rates and collateral requirements, as those prevailing at the
time for comparable transactions with other persons and did not involve
more than normal risk of collectibility or present other unfavorable
features.
During 1995, the Bank paid $113,430 to Chas. M. Henry Printing Co.
for services that were in the normal course of business on substantially
the same terms as available from others. This firm has provided
printing services to the Bank for many years and is expected to continue
to do so in the future. Charles E. Henry is a Director and is President
of Chas. M. Henry Printing Co. Additionally, the Bank paid $750,373 to
A. Richard Kacin, Inc. as general contractor for the construction of a
new building and remodeling of an existing branch office. The awarding
of these contracts were in line with Bank policy and procedures. A
Richard Kacin is a Director and is President of A. Richard Kacin, Inc.
Under the securities laws of the United States, the Corporation's
Directors, executive officers and any persons holding more than ten
percent of the Corporation's stock are required to report their initial
ownership of the Corporation's common stock and any subsequent changes
in their ownership to the Securities and Exchange Commission. Specific
due dates for these reports have been established and the Corporation is
required to disclose in this Proxy Statement, any failure to file by
these dates during 1995. In making such disclosures, the Corporation
has relied solely on written representations of its Directors and
executive officers and copies of the reports they have filed with the
Securities and Exchange Commission. Based on such information, all of
such filings have been timely made except that A. Richard Kacin, a
Director of the
<PAGE> 5
Corporation, and a trustee of the A. Richard Kacin, Inc. and Delmont
Builders Supply, Inc. Employee Retirement Plan was delayed in the filing
of a Form 4 in connection with the Plan's purchase of certain of the
Corporation's shares in January of 1995.
PERSONNEL COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Decisions on compensation of the executive officers of the Bank are
made by a six-member Personnel Committee of the Bank's Board of
Directors. No compensation was paid to the executive officers by the
Corporation during 1995. All compensation was paid by the Bank. Five
of the members of the Personnel Committee are nonemployee Directors. The
sixth member of the Committee is Mr. Dahlmann. Although Mr. Dahlmann,
the President and Chief Executive Officer of the Corporation and Bank,
served on the Personnel Committee, he did not participate in any
decisions regarding his own compensation. All decisions by the Personnel
Committee relating to the compensation of the Bank's executive officers
are reviewed by the full Board and the Board votes on Mr. Dahlmann's
compensation. Pursuant to recently adopted rules designed to enhance
disclosure of the policies of the Corporation toward executive
compensation, set forth below is a report of the Board's Personnel
Committee, addressing the Bank's compensation policies for 1995 as they
affected Mr. Dahlmann and generally as to other executive officers.
The Personnel Committee's executive compensation policies are
designed to provide compensation to the executive officers based upon a
performance evaluation of each executive officer using a matrix provided
by a consultant to the Bank, Peter R. Johnson & Company, rating the
performance of each executive on a scale of 1 through 5. The Personnel
Committee applies this performance rating to all executive officers
including Mr. Dahlmann. Mr. Dahlmann does not participate in his own
performance evaluation, but does participate in the evaluation of other
executive officers. Levels of base salary paid by the Bank to both Mr.
Dahlmann and the other executive officers are intended to be comparable
with other companies in the banking industry. The Bank uses the
services of Peter R. Johnson & Company to compile the executive
compensation of appropriate groupings of the banks that closely resemble
the Bank. The sources of information relied on by the consultant were
Cole Surveys, Inc., Bank Administration Institute, L.R. Webber
Associates, SNL Executive Compensation Survey, William M. Mercer, Inc.
and Johnson Salary Survey. This information is reviewed against the job
descriptions of Mr. Dahlmann and the other executive officers and
adjusted by utilization of the performance evaluation referred to above.
The Personnel Committee does not consider corporate performance in its
determination but only compensation by comparable companies adjusted by
an evaluation of the officer's performance.
Personnel Committee Members
Ray T. Charley Alexander H. Lindsay, Jr.
David S. Dahlmann James W. Newill
A. Richard Kacin Laurie Stern Singer
<PAGE> 6
EXECUTIVE COMPENSATION
The Corporation paid no compensation to any of its officers during
1995. All compensation was paid by the Bank.
The annual compensation of the President and Chief Executive
Officer of the Bank consisted only of a base salary. "All other
compensation" listed in the table includes amounts established under the
401(k) Plan for eligible employees including the President and Chief
Executive Officer. Each year the Board of Directors of the Bank as a
whole determines the amount with which the Bank's 401(k) Plan should be
funded. The amount is allocated to all eligible employees in accordance
with Plan provisions. In 1995 the allocation was the equivalent of 8.0%
of total eligible salaries. The President and Chief Executive Officer
and other executive officers receive this compensation in the same
manner as other eligible employees of the Bank. Also, included in "All
other compensation" is the cost of life insurance premiums paid for the
President and Chief Executive Officer. The Bank carries such life
insurance for all employees based upon twice the annual compensation of
each full-time employee. The maximum amount of coverage provided is
$300,000.
The incremental cost of the 401(k) Plan and term life insurance
plan provided to Mr. Dahlmann equals approximately 7.66% of his salary.
The compensation shown in the following table is for the President
and Chief Executive Officer only, since no other executive officer
received salary and bonus of $100,000 or more for the last fiscal year.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
All other
Name and principal Year Salary compensation
position ($) ($)(1)
<S> <C> <C> <C>
David S. Dahlmann, 1995 185,000 14,162
President and Chief 1994 155,000 13,517
Executive Officer 1993 140,000 11,531
<FN>
(1) The amounts in the above table under "All other compensation"
include, for 1995, $13,118 contributed to the Bank's 401(k) Plan and
$1,044 as the cost of insurance premiums under the Bank's life insurance
plan. For 1994, such amounts are $12,543 and $974 respectively and for
1993 is $11,021 and $510 respectively.
</TABLE>
The Bank's 401(k) Plan is qualified under Section 401(a) of the
Internal Revenue Code. Each eligible employee of the Bank becomes
eligible to participate at the next available entry date following one
year of employment. The Plan is contributory on the part of employees.
The Bank may elect to match the employee contribution. The Board of
Directors determines the match amount annually. In addition, each year
the Bank has the discretion to make an annual contribution to eligible
Plan participants. This contribution is based on participants eligible
salary as defined under IRS Section 3401(a). All deferred amounts are
vested immediately and are payable to participants upon their
termination of employment.
<PAGE> 7
It is not possible to determine the extent of the benefits that any
participant may be entitled to receive under the Plan upon termination
of employment since the amount of such benefits will be dependent, among
other things, upon the future earnings of the Bank, the future
compensation of the participants and the future net earnings of the
investments selected by the participants.
DEFINED BENEFIT PENSION PLAN OF THE BANK
The Bank made a contribution of $317,409 to the Defined Benefit
Pension Plan for the Plan year ending June 30, 1995. Benefits are not
vested until the completion of five years of credited service when they
become fully vested. Retirement benefits are based upon the average of
the annual compensation for the highest five consecutive years during
the last ten years of credited service, and are 1% of average
compensation multiplied by the number of years of credited service
(subject to a maximum of 44 years), plus 1/2 of 1% of average
compensation in excess of covered compensation, multiplied by the number
of years of credited service (subject to a maximum of 40 years). The
Plan is noncontributory on the part of employees. The Bank contributes
the entire actuarially determined amount necessary to fund total
benefits. The following table sets forth an estimate of the annual
benefits payable under the Plan for employees, including officers,
reaching the normal retirement date (age 65):
<TABLE>
<CAPTION>
Estimated annual pension for years of credited service (1)
Annual basic
compensation 10 years 20 years 30 years 40 years
<S> <C> <C> <C> <C>
$ 25,000 $ 2,500 $ 5,000 $ 7,500 $ 10,000
50,000 6,150 12,300 18,450 24,600
75,000 9,900 19,800 29,700 39,600
100,000 13,650 27,300 40,950 54,600
125,000 17,400 34,800 52,200 69,600
150,000 21,150 42,300 63,450 84,600
<FN>
(1) The credited years of service for Mr. Dahlmann are 24.
</TABLE>
The amounts in the above table represent the estimated annual
benefits payable to an employee for life. Other available optional forms
of payment of benefits would reduce the amount shown in the table. The
benefit amounts shown are not subject to any deduction for social
security or other amounts. Effective for retirements on or after January
1, 1994, annual basic compensation for Plan purposes may not exceed
$150,000.
<PAGE> 8
PERFORMANCE REPORT
(Graphic material has been omitted from this section. The information
is being presented in tabular form.)
The following is a graph comparing the Corporation's cumulative
total shareholder returns with the performance of the NASDAQ Stock
Market index (US Companies) and with the NASDAQ Financial Stocks index
in which group the Corporation is included.
<TABLE>
<CAPTION>
Comparison of Five Year Cumulative Total Returns
Performance Graph for
SOUTHWEST NATIONAL CORPORATION
Company Index: CUSIP Ticker Class Sic Exchange
84518610 SWPA 6710 NASDAQ
Fiscal Year-end is 12/31/95
Market Index: Nasdaq Stock Market (US Companies)
Peer Index: Nasdaq Financial Stocks
SIC 6000-6799 US & Foreign
Date Company Index Market Index Peer Index
<S> <C> <C> <C>
12/31/90 100.000 100.000 100.000
01/31/91 104.545 111.085 105.447
02/28/91 109.010 121.770 116.522
03/28/91 105.939 129.918 122.822
04/30/91 118.990 130.741 128.248
05/31/91 138.468 136.742 133.057
06/28/91 135.357 128.414 130.383
07/31/91 138.468 136.016 137.589
08/30/91 136.754 142.778 144.014
09/30/91 143.042 143.303 141.819
10/31/91 139.898 148.057 145.657
11/29/91 144.676 143.093 142.723
12/31/91 136.727 160.564 154.738
01/31/92 143.086 169.953 163.107
02/28/92 143.891 173.805 169.825
03/31/92 152.734 165.601 170.804
04/30/92 159.165 158.500 175.404
05/29/92 159.179 160.559 181.603
06/30/92 155.931 154.282 181.058
07/31/92 177.046 159.746 188.332
08/31/92 168.942 154.865 185.604
09/30/92 175.503 160.622 191.437
10/30/92 180.424 166.948 196.475
11/30/92 177.451 180.230 208.194
12/31/92 177.451 186.866 221.318
01/29/93 205.644 192.185 230.272
02/26/93 202.531 185.016 233.541
03/31/93 237.681 190.371 243.055
04/30/93 234.334 182.247 234.376
05/28/93 221.086 193.134 231.685
06/30/93 209.272 194.026 237.965
07/30/93 216.867 194.256 247.530
08/31/93 245.211 204.297 254.524
09/30/93 252.023 210.382 262.477
10/29/93 255.429 215.110 260.345
11/30/93 250.700 208.695 249.915
12/31/93 254.993 214.511 257.227
01/31/94 264.437 221.022 263.656
02/28/94 245.903 218.957 260.267
03/31/94 238.976 205.488 253.150
04/29/94 245.210 202.821 260.116
05/31/94 239.040 203.317 269.544
06/30/94 254.766 195.885 268.633
07/29/94 243.234 199.907 272.450
08/31/94 228.562 212.649 281.460
09/30/94 234.911 212.104 276.629
10/31/94 228.562 216.271 268.665
11/30/94 219.425 209.096 256.572
12/30/94 201.229 209.686 257.828
01/31/95 211.933 210.786 266.429
02/28/95 222.990 221.922 279.659
03/31/95 235.980 228.493 283.565
04/28/95 233.815 235.677 288.502
05/31/95 234.075 241.778 297.794
06/30/95 234.075 261.361 307.119
07/31/95 240.637 280.535 321.794
08/31/95 280.556 286.237 338.555
09/29/95 287.184 292.820 350.034
10/31/95 300.438 290.996 351.476
11/30/95 307.671 297.839 367.743
12/29/95 298.753 296.304 375.641
<FN>
The index level for all series was set to 100.0 on 12/31/90
NOTES
A. The lines represent monthly index levels derived from compounded
daily returns that include all dividends.
B. The indexes are reweighted daily, using the market capitalization on
the previous trading day.
C. If the monthly interval, based on the fiscal year-end, is not a
trading day, the preceding trading day is used.
D. The index level for all series was set to $100.00 on 12/31/90.
</TABLE>
<PAGE> 9
PRINCIPAL SHAREHOLDERS
The following table lists any beneficial owner of more than 5% of
the outstanding common stock of the Corporation as of February 2, 1996:
<TABLE>
<CAPTION>
Amount and nature
Title of Name and address of beneficial Percent
class of beneficial owner ownership (1) of class
<S> <C> <C> <C>
Common stock Thomas, Heasley & Co., 373,207 11.73%
nominee of Southwest
National Bank
of Pennsylvania,
Greensburg, Pennsylvania
<FN>
(1) The shares are listed of record in the name of the Bank's nominee
and are held by the Bank in its fiduciary capacity in 66 separate trust
accounts. The Bank has the power to dispose or direct the disposition
of a portion of the shares as follows: Sole - 184,699; Shared -
165,251. The Bank has the power to vote or direct the voting of a
portion of these shares as follows: Sole - 285,973; Shared - 87,234. In
every instance, another entity is entitled to the dividends or proceeds
of sale. No individual account holds an interest of 5% or more.
</TABLE>
AUDITORS
The Board of Directors of the Bank approved the reappointment of
KPMG Peat Marwick LLP to audit its books and accounts for the year 1996.
The Board of Directors of the Corporation also approved the
reappointment of KPMG Peat Marwick LLP to audit its books and accounts
for the year 1996.
Audit services performed by KPMG Peat Marwick LLP during 1995
included examination of and reporting on the Corporation's consolidated
financial statements, review and consultation connected with filing
annual and periodic reports for the Bank and Corporation and auditing
the Bank's Defined Benefit Pension Plan and Deferred Compensation Plan
(which was converted to the Bank s 401(k) Plan on April 1, 1995).
Representatives of the auditors will be present at the annual
meeting to make a statement, if they desire, and to respond to
appropriate questions.
PROPOSALS OF SHAREHOLDERS
Any proposal that a shareholder wishes to have included in the
proxy material relating to the annual meeting to be held in 1997 must be
received by the Secretary no later than November 15, 1996.
OTHER MATTERS
The Board of Directors knows of no other business to be presented
at the meeting. If, however, any other business should properly come
before the meeting, or any adjournment of it, it is intended that the
proxy will be voted with respect thereto in accordance with the best
judgment of the persons named in the proxy.
By Order of the Board of Directors
/s/ Donald A. Lawry
Donald A. Lawry
Secretary and Treasurer
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