UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
- --------- EXCHANGE ACT OF 1934 (FEE REQUIRED). FOR THE FISCAL YEAR ENDED
DECEMBER 31, 1995
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --------- EXCHANGE ACT OF 1934. FOR THE TRANSITION PERIOD FROM
TO
-------- --------
COMMISSION FILE NUMBER 0-16878
CBT CORPORATION
(Exact name of registrant as specified in charter)
KENTUCKY 61-1030727
(State or other jurisdiction of (IRS Employer
of incorporation or organization) Identification No.)
333 BROADWAY, PADUCAH, KY 42001
(Addresses of principal executive offices)
Registrant's telephone number, including area code: (502) 575-5100
Securities registered pursuant to Section 12(b) of the Act:
Name on each exchange
Title of each class on which registered
NONE NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, NO PAR VALUE PER SHARE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports ), and (2) has been subject to such
filing requirements for the past 90 days.
YES X NO .
------------ ------------
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
----
State the aggregate market value of the voting stock held by non affiliates of
the registrant - at March 15, 1996, $177,875,303. Indicate the number of shares
outstanding of each of the issuer's classes of common stock - as of March 15,
1996, 7,905,569 shares.
Documents incorporated by reference:
Portions of the Annual Report to Shareholders for the fiscal year ended December
31, 1995 are incorporated herein by reference to Parts I and II of this Report.
Portions of the registrant's Proxy Statement dated March 8, 1996 are
incorporated by reference to Part III of this Report.
Page 1
This filing contains 54 pages.
TABLE OF CONTENTS
PART I PAGE
Item 1. Business 3
Item 2. Properties 9
Item 3. Legal Proceedings 10
Item 4. Submission of Matters to a Vote of Security Holders 10
PART II
Item 5. Market for the Registrant's Common Stock
and Related Stockholder Matters 10
Item 6. Selected Financial Data 10
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Item 8. Financial Statements and Supplementary Data 11
Item 9. Changes In and Disagreements with Accountants
on Accounting and Financial Disclosure 11
PART III
Item 10. Directors and Executive Officers of the Registrant 11
Item 11. Executive Compensation 11
Item 12. Security Ownership of Certain Beneficial Owners and
Management 11
Item 13. Certain Relationships and Related Transactions 11
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K 12
SIGNATURES 13-14
EXHIBIT INDEX 15
Page 2
PART I
ITEM 1. BUSINESS
CBT Corporation ("CBT"), is a multi-bank and thrift holding corporation,
registered under the Bank Holding Company Act of 1956 ("the Act"), as amended,
and the Home Owners Loan Act ("HOLA"). It was organized under the laws of the
Commonwealth of Kentucky in March 1983. CBT maintains its principal
headquarters in Paducah, Kentucky. It is the parent company of four banks, the
Bank of Marshall County ("BMC"), Citizens Bank & Trust Company ("Citizens"),
Graves County Bank ("GCB"), and Pennyrile Citizens Bank and Trust Company
("PCB"), and one thrift, United Commonwealth Bank, FSB ("UCB"). Fidelity
Credit Corporation ("FCC"), a consumer finance company, is a wholly-owned
subsidiary of Citizens. United Commonwealth Services Corporation ("UCSC"),
which provides brokerage services to customers, is a wholly-owned subsidiary of
UCB. CBT provides financial services primarily in Western Kentucky through its
17 bank locations, with the consumer finance company having 25 locations
throughout Kentucky. At December 31, 1995, CBT had total consolidated assets
of $904.7 million, total loans net of unearned interest of $644.7 million and
total stockholders' equity of $104.4 million. CBT had 453 full-time equivalent
employees at December 31, 1995.
Beginning in 1995, many operational functions previously performed by bank
personnel are performed by holding company personnel on a centralized basis.
This occurred as part of a re-engineering effort by CBT to redesign its core
processes to better serve customers and improve operational efficiencies in
order to maintain a competitive posture in the industry. In the financial
services business, CBT faces competition from banks, savings and loan
associations, consumer finance companies, insurance companies, credit unions,
brokerage houses and other financial and quasi-financial institutions. Some of
the competing financial institutions have capital and resources in excess of the
capital and resources of CBT.
On May 31, 1994, CBT acquired BMC Bankcorp, Inc. ("BMC Bankcorp"), the parent
company of BMC, GCB and UCB, by issuing 2,391,120 shares of its common stock in
exchange for all the shares of BMC Bankcorp stock. The exchange was accounted
for as a "pooling of interests". In 1994, BMC Bankcorp, Inc. was merged into
CBT.
On November 30, 1993, CBT acquired Pennyrile Bancshares, Inc., the parent
company of PCB, by issuing 492,070 shares of its common stock in exchange for
all the issued and outstanding shares of Pennyrile Bancshares, Inc. The
exchange was accounted for as a "pooling of interests". Pennyrile Bancshares,
Inc. was merged into CBT in 1994.
CITIZENS BANK AND TRUST COMPANY
Citizens was authorized to commence business in 1888 and conducts a general
banking business encompassing most of the services, both commercial and
consumer, which banks may lawfully provide, including the acceptance of demand,
savings, and time deposits; the making of commercial, consumer, mortgage and
credit card loans; personal and corporate trust services, safe deposit
facilities, and correspondent banking services. Additional services include
providing brokerage services through a strategic alliance with J C Bradford &
Co., a Nashville, Tennessee-based regional brokerage firm. While primarily
serving customers in the Paducah and McCracken County area, Citizens' market
area also includes several other counties in Western Kentucky and nearby
Southern Illinois. In September 1993, Citizens completed the purchase of all
the assets and the assumption of all the liabilities of three McCracken County
branches of Security Trust Federal Savings and Loan Association ("Security
Trust"). In the transaction, Citizens assumed approximately $62.2 million in
deposits, acquired approximately $4.2 million in loans, premises and equipment
and other assets and received approximately $58 million in cash. Of the three
branches, the business of two branches were consolidated with existing Citizens
branches with the premises being sold in the first quarter of 1994. The
remaining branch was converted into a full service branch of Citizens. At
December 31, 1995, before intercompany eliminations, Citizens had total assets
of approximately $596.0 million.
Citizens conducts business in its principal office at 333 Broadway, Paducah,
Kentucky and in 6 branch locations located within McCracken County. During
1995, Citizens remodeled three of its existing branch locations and upgraded
facilities to meet customer needs.
Page 3
Citizens is also the sole shareholder of Fidelity Credit Corporation, described
below.
FIDELITY CREDIT CORPORATION
FCC, a Kentucky corporation, engages in the business of making consumer loans,
both secured and unsecured. FCC operates under the Consumer Loan Act and
Industrial Loan Act of Kentucky. In addition to its corporate office in
Paducah, FCC operates 25 offices throughout Kentucky. FCC operated 6 offices in
Tennessee until February 18, 1993 when these offices, representing assets of
$6.1 million, were sold to a consumer finance company located in Dallas, Texas.
FCC's operations are primarily financed by short and long-term borrowings from
two regional institutions. In 1995, Citizens provided a portion of FCC's short
term funding. CBT guaranteed a portion of FCC's borrowings from the other
regional institutions. At December 31, 1995, before intercompany eliminations,
FCC had total assets of approximately $30.8 million.
PENNYRILE CITIZENS BANK AND TRUST COMPANY
PCB, organized in 1976, is a full-service commercial bank which provides
services similar to that of Citizens. PCB's principal office is located at 2800
Fort Campbell Boulevard in Hopkinsville and has three additional branches
located within Christian County. At December 31, 1995, before intercompany
eliminations, PCB had total assets of approximately $62.2 million.
BANK OF MARSHALL COUNTY
BMC, organized in 1903, is a full service commercial bank which provides
services similar to that of Citizens. BMC's principal office is located in
Benton, Kentucky and it has two branches located in Draffenville and
Gilbertsville, Kentucky. At December 31, 1995, before intercompany
eliminations, BMC had total assets of approximately $151.9 million.
GRAVES COUNTY BANK
GCB, organized in 1898, is a full service commercial bank which provides
services similar to that of Citizens. GCB has three locations in Graves County,
Kentucky and maintains its main office in Mayfield, Kentucky. At December 31,
1995, GCB had assets, before inter-company eliminations, of $42.3 million.
UNITED COMMONWEALTH BANK, F.S.B.
UCB is a federal savings bank chartered on September 8, 1992 and opened on
September 14, 1992. UCB's primary emphasis is on the traditional mortgage
lending activities typically associated with savings associations. UCB also
offers other traditional banking services through its main office in Murray,
Kentucky. As a Federal savings bank, UCB may open branches in any Kentucky
county. In the fourth quarter of 1995, UCB formed UCSC, a wholly-owned
subsidiary, for the purposes of providing brokerage services to customers
through the J. C. Bradford alliance. At December 31, 1995, UCB had assets,
before intercompany eliminations, of $40.6 million.
Page 4
SUPERVISION AND REGULATION
BANK HOLDING COMPANIES AND SAVINGS AND LOAN HOLDING COMPANIES
As a registered bank holding company, CBT is regulated under the Act and is
subject to supervision and regular inspection by the Board of Governors of the
Federal Reserve System ("Federal Reserve Board"). Also, as a registered savings
and loan holding company, CBT is registered under the HOLA and is subject to
supervision by the Office of Thrift Supervision ("OTS"). The Act requires,
among other things, the prior approval of the Federal Reserve Board in any case
where CBT proposes to (i) acquire all or substantially all of the assets of any
bank, (ii) acquire direct or indirect ownership or control of more than 5
percent of the voting shares of any bank or (iii) merge or consolidate with any
bank holding company.
Under the Act, CBT is prohibited, with certain exceptions, from acquiring direct
or indirect ownership or control of more than 5% of any class of voting shares
of any non-banking corporation. Further, CBT may not engage in any business
other than managing and controlling banks or furnishing certain specified
services to subsidiaries, and may not acquire voting control of non-banking
corporations except those corporations engaged in businesses or furnishing
services which the Federal Reserve Board deems to be so closely related to
banking as "to be a proper incident thereto". The Federal Reserve Board has
determined that a number of activities meet this standard including making and
servicing loans; performing certain fiduciary functions; leasing real and
personal property; underwriting and dealing in government obligations and
certain money market instruments; underwriting and dealing, to a limited
extent, in corporate debt obligations and other securities that banks may not
deal in; providing foreign exchange advisory and transactional services; and
owning, controlling or operating a savings association, if the savings
association engages only in deposit-taking activities and lending and other
activities that are permissible for bank holding companies. The Board, from
time to time, may revise the list of permitted activities.
Bank holding companies and their subsidiary banks are also subject to the
provisions of the Community Reinvestment Act of 1977, as amended ("CRA"). Under
the CRA, each subsidiary bank's record in meeting the credit needs of the
community served by the bank, including low- and moderate-income neighborhoods,
is annually assessed by that bank's primary regulatory authority. When a bank
holding company applies for approval to acquire a bank or other bank holding
company, the Federal Reserve Board will review the assessment of each subsidiary
bank of the applicant bank holding company, and such records may be the basis
for denying the application.
On September 29, 1994, President Clinton signed into law the Riegle-Neal
Interstate Banking and Branching Efficiency Act of 1994 ("the Interstate
Banking Act"). When fully phased in, the Interstate Banking Act will remove
state law barriers to interstate bank acquisitions and will permit the
consolidation of interstate banking operations. Under the Interstate Banking
Act, effective September 29, 1995, adequately capitalized and managed bank
holding companies are allowed to acquire banks in any state, subject to CRA
compliance, compliance with federal and state antitrust laws and deposit
concentration limits, and subject to any state laws restricting the acquisition
of a bank that has not been in existence for a minimum time period (up to five
years). Effective September 29, 1995, the Interstate Banking Act also permitted
any bank that is controlled by a bank holding company to act as agent for any
affiliated financial institution in deposit and loan transactions, regardless of
whether the institutions are located in the same or different states. The
Interstate Banking Act's interstate branching provisions will become operative
on June 1, 1997, although any state can, prior to that time, adopt legislation
to accelerate interstate branching or prohibit it completely. The Interstate
Banking Act's interstate branching provisions will permit banks to merge across
state lines and, if state laws permit DE NOVO branching, to establish a new
branch as its initial entry into a state.
Under Federal Reserve Board policy, a bank holding company is expected to act as
a source of financial strength to each of its subsidiary banks and to commit
resources, including capital funds during periods of financial stress, to
support each such bank. Although this "source of strength" policy has been
challenged in litigation, the Federal Reserve Board continues to take the
position that it has the authority to enforce it. Consistent with its "source
of strength" policy for subsidiary banks, the Federal Reserve Board has stated
that, as a matter of prudent banking, a bank holding company generally should
not maintain a rate of cash dividends unless its net income available to common
shareholders has been sufficient to fund fully the dividends, and the
prospective rate of earnings retention appears to be consistent with the
company's capital needs, asset quality and overall financial condition.
Page 5
SUBSIDIARY BANKS
CBT's subsidiary banks are subject to supervision and examination by applicable
federal and state banking agencies. UCB is also subject to supervision and
examination by the Office of Thrift Supervision ("OTS"). All of the subsidiary
banks are insured by, and therefore subject to regulations of, the Federal
Deposit Insurance Corporation ("FDIC"), and are also subject to requirements and
restrictions under federal and state law, including requirements to maintain
reserves against deposits, restrictions on the types and amounts of loans that
may be granted and the interest that may be charged thereon, and limitations on
the types of investments that may be made and the types of services that may be
offered. Numerous consumer laws and regulations also affect the operations of
the bank subsidiaries including, among others, disclosure requirements, anti-
discrimination provisions, and substantive contractual limitations with respect
to deposit accounts. The banking agencies, together with the Departments of
Justice and Housing and Urban Development, have announced that they intend to
enforce more rigorously compliance with community reinvestment, anti-
discrimination and other fair lending laws and regulations. In addition to the
impact of regulation, commercial banks are affected significantly by the actions
of the Federal Reserve Board as it attempts to control money supply and credit
availability in order to influence the economy.
The FDIC, in the case of CBT's commercial bank subsidiaries, and the FDIC or
OTS, in the case of UCB, have the authority to prohibit any such institution
from engaging in an unsafe or unsound practice in conducting its business. The
payment of dividends, depending upon the financial condition of the institution
in question, could be deemed to constitute such an unsafe or unsound practice,
and the regulatory agencies have indicated their view that it generally would be
an unsafe and unsound practice to pay dividends except out of current operating
earnings. The ability of the institutions to pay dividends in the future is
presently, and could be further influenced, among other things, by applicable
capital guidelines or by bank regulatory and supervisory policies.
The ability of a banking institution to make funds available to its parent
company is also subject to restrictions imposed by federal law. Generally, no
bank subsidiary may extend credit to the parent company on terms and under
circumstances which are not substantially the same as comparable extensions of
credit to non-affiliates. No extension of credit may be made to the parent
company which is in excess of 10 percent of the capital stock and surplus of
such bank subsidiary or in excess of 20 percent of the capital and surplus of
such bank subsidiary as to aggregate extensions of credit to the parent company
and its subsidiaries. In certain circumstances, federal regulatory authorities
may impose more restrictive limitations. Such extensions of credit, with
limited exceptions, must be fully secured by collateral.
CBT's bank subsidiaries are also subject to the "cross-guarantee" provisions of
federal law which provide that if one depository institution subsidiary of a
multi-bank holding company fails or requires FDIC assistance, the FDIC may
assess a commonly controlled depository institution for the actual or estimated
losses suffered by the FDIC. Such liability could have a material adverse
effect upon the financial condition of any assessed bank and its parent company.
While the FDIC's claim is junior to the claims of depositors, holders of secured
liabilities, general creditors and subordinated creditors, it is superior to the
claims of shareholders and affiliates.
The amount of FDIC assessments paid by individual insured depository
institutions is based on their relative risk as measured by regulatory capital
ratios and certain other factors. Under this system, in establishing the
insurance premium assessment for each bank, the FDIC will take into
consideration, and will charge an institution with perceived inherent risks a
higher insurance premium. The FDIC will also consider the different categories
and concentrations of assets and liabilities of the institution, the revenue
needs of the deposit insurance fund, and any other factors the FDIC deems
relevant. During 1995, the FDIC reduced the assessment rate for commercial
banks where deposits are insured by the Bank Insurance Fund from 23 cents per
$100 of eligible deposits to 4 cents per $100 of eligible deposits.
Additionally, CBT's commercial banks received a refund totaling $360,000 of
previously paid assessments in 1995. For 1996, the total annual FDIC assessment
for Citizens, BMC, GCB and PCB is $2,000 each, which reflects the minimum
assessment level.
The assessment for the Savings Association Insurance Fund members remains at the
current rate of 23 cents per $100 of eligible deposits. This assessment
includes UCB's deposits and a portion of Citizens' deposits that were assumed in
the purchase of the Security Trust offices. A significant increase in the
assessment rate or a special additional assessment with respect to insured
deposits could have an adverse impact on the results of operations and capital
levels of the subsidiaries of CBT.
Page 6
The federal banking agencies possess broad powers to take corrective action as
deemed appropriate for an insured depository institution and its holding
company. The extent of these powers depends upon whether the institution in
question is considered "well capitalized", "adequately capitalized",
"undercapitalized" or "critically undercapitalized". At December 31, 1995, all
of the subsidiaries exceeded the required ratios for classification as "well
capitalized". Generally, as an institution is deemed to be less well
capitalized, the scope and severity of the agencies' powers increase. The
agencies' corrective powers can include, among other things, requiring an
insured financial institution to adopt a capital restoration plan which cannot
be approved unless guaranteed by the institution's parent holding company;
placing limits on asset growth and restrictions on activities; placing
restrictions on transactions with affiliates; restricting the interest rate the
institution may pay on deposits; prohibiting the institution from accepting
deposits from correspondent banks; prohibiting the payment of principal or
interest on subordinated debt; prohibiting the holding company from making
capital distributions without prior regulatory approval; and, ultimately,
appointing a receiver for the institution. Business activities may also be
influenced by an institution's capital classification. For instance, only a
"well capitalized" depository institution may accept brokered deposits without
regulatory approval and an "adequately capitalized" depository institution may
accept brokered deposits only with prior regulatory approval.
NON-BANK SUBSIDIARIES
Fidelity Credit Corporation is subject to regulatory restrictions imposed by
federal and state regulatory agencies, with respect to consumer and other laws.
GOVERNMENTAL POLICIES
The operations of financial institutions may be affected by legislative changes.
For example, Congress is presently considering various administrative and
legislative proposals, including proposals to consolidate the bank regulatory
agencies and to amend various consumer protection laws. In addition, Congress
is considering various issues relating to the separation of banking and commerce
including, for example, the repeal of the Glass Sheagall Act.
Financial institutions' operations also may be affected by the policies of
various regulatory authorities. In particular, bank holding companies and their
subsidiaries are affected by the credit policies of the Federal Reserve Board.
An important function of the Federal Reserve Board is to regulate the national
supply of bank credit. Among instruments of monetary policy used by the Federal
Reserve Board to implement its objectives are: open market operations in U.S.
Government securities; changes in the discount rate on bank borrowings; and
changes in reserve requirements on bank deposits.
These instruments of monetary policy are used in varying combinations to
influence the overall level of bank loans, investments and deposits, the
interest rates charged on loans and paid for deposits, the price of the dollar
in foreign exchange markets, and the level of inflation. The monetary policies
of the Federal Reserve Board have had a significant effect on the operating
results of banking institutions in the past and are expected to continue to do
so in the future. It is not possible to predict the nature of future changes in
monetary and fiscal policies, or the effect that they may have on CBT's business
and earnings.
Page 7
COMPETITION
Bank holding companies and their subsidiaries are subject to intense competition
from various financial institutions and other companies or firms that engage in
similar activities. CBT's banking subsidiaries compete for deposits with other
commercial banks, savings banks, savings and loan institutions, insurance
companies, credit unions and issuers of commercial paper and other securities,
such as shares in money market funds. In making loans, the Banks compete with
other commercial banks, savings banks, savings and loan associations, consumer
finance companies, credit unions, leasing companies and other lenders. In
providing trust services, brokerage services and money management services, CBT
competes with other commercial banks, trust companies, brokerage houses, mutual
fund managers and insurance companies. Many such competitors have substantial
resources and operations which are national or international in scope.
EXECUTIVE OFFICERS
Information regarding the current executive officers of CBT, including their
names, ages, positions with CBT, and a brief description of their business
experience during the past five years, is presented below. Executive officers
are elected annually by the Board of Directors.
NAME AGE POSITION
WILLIAM J. JONES 40 President and Chief Executive Officer and a
director. Mr. Jones also serves as President and
Chief Executive Officer of Citizens. Mr. Jones
has been associated with the Corporation for the
past 11 years.
JOHN E. SIRCY 39 Executive Vice President and Chief Operating
Officer. Mr. Sircy also serves as Executive Vice
President and Chief Operating Officer of Citizens
and as a director of GCB and UCB. Mr. Sircy
joined the Corporation in his current role in
April 1994. Prior to that, he served as Vice
President and Chief Financial Officer of First
Illini Bancorp, Inc., Galesburg, Illinois, until
January 1991. At that time, Mr. Sircy became Vice
President and Controller of Norwest Bank Iowa,
N.A. in Des Moines, Iowa, until August 1992, when
he was named Senior Vice President and Chief
Financial Officer, a position he held until April
1994.
M. LEON JOHNSON 55 President and Chief Executive Officer, FCC. Mr.
Johnson serves as a director of Citizens and FCC
and has been associated with the Corporation for
11 years, serving in his current role.
C. THOMAS MURRELL, III 52 Executive Vice President-Commercial and Consumer
Banking, Citizens. Mr. Murrell joined the
Corporation in November 1991 as Senior Vice
President and Chief Credit Officer of Citizens.
Prior to that, he served as Executive Vice
President of the Corporate Banking Group at First
Security National Bank and Trust Company,
Lexington, Kentucky. Mr. Murrell assumed his
current role in March 1994.
J. RUSSELL OGDEN, III 48 Executive Vice President-Financial Services,
Citizens. Mr. Ogden served as Senior Vice
President of Trust and Investments until March
1994, when he assumed his current position. He has
been associated with the Corporation for 14 years.
Page 8
STATISTICAL INFORMATION
Specific financial information required to be included under Item I of this Form
10-K is incorporated herein by reference to the Annual Report to Shareholders
for the fiscal year ended December 31, 1995, and listed below along with a page
reference where the information can be found in the Annual Report to
Shareholders:
DESCRIPTION OF FINANCIAL INFORMATION REQUIRED REFERENCE PAGE
Three Year Average Balance and Net Interest
Analysis 24
Analysis of Changes in Net Interest Income 23
Carrying Value of Investment Securities 36
Carrying Value of Securities Available for Sale 37
Maturity Distribution of Securities Available
for Sale 37
Loan Portfolio 26
Contractual Loan Maturities and Interest
Sensitivity 28
Non-performing Assets 27
Impact of Non-accrual Loans on Interest Income 38
Allowance for Loan Losses 38
Average Deposits and Rates Paid 24
Maturity of Time Deposits of $100,000 or More 28
Return on Equity and Assets 22
Short-Term Borrowings 39
ITEM 2. PROPERTIES
The executive and administrative offices of CBT and the main office of Citizens
consists of six floors of the ten story building known as Citizens Bank
Building, which is located in downtown Paducah, Kentucky with a street address
of 333 Broadway. Citizens owns the Citizens Bank Building and properties on
which all its branches are located. PCB owns its main office and land, but has
net annual lease income and expense on its branches of approximately $5,000.
All other branch locations of Citizens and CBT subsidiaries, except the FCC
offices, are owned by CBT. BMC owns a building adjacent to its main office that
houses the deposit operations function for CBT. Because of the nature of FCC's
business, it generally maintains offices with a limited square footage, often in
strip shopping centers. For these reasons and to give it maximum flexibility,
FCC leases all of its locations under short term leases (generally three to five
years) with annual aggregate lease payments of approximately $310,000.
Page 9
ITEM 3. LEGAL PROCEEDINGS
In the ordinary course of operations, CBT's subsidiaries are defendants in
various legal proceedings. In the opinion of management, there is no proceeding
pending, or, to the knowledge of management, threatened in which an adverse
decision could result in a material adverse change in the business or
consolidated financial position of CBT or its subsidiaries.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
At March 15, 1996, CBT had issued and outstanding 7,905,569 shares of common
stock. The approximate number of record holders as of March 15, 1996 was 1,488.
Shareholders received quarterly cash dividends per share of common stock for
each quarter of 1994 and 1995.
CBT Corporation common stock is traded on the NASDAQ National Market under the
symbol CBTC.
The following table summarizes transactions in common stock and cash dividends
declared in 1995 and 1994. The trading price information reflects the range of
actual closing sales prices for CBT Corporation common stock as reported by
NASDAQ.
Market Value Cash
-------------------
Low High Dividends
----------------------------------
1st Quarter 1995 $21.00 $24.75 $ .11
2nd Quarter 1995 $19.75 $24.00 $ .11
3rd Quarter 1995 $19.25 $24.25 $ .12
4th Quarter 1995 $20.00 $23.00 $ .12
1st Quarter 1994 $18.50 $23.38 $ .10
2nd Quarter 1994 $19.50 $21.50 $ .11
3rd Quarter 1994 $20.75 $22.75 $ .11
4th Quarter 1994 $20.63 $23.00 $ .11
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item appears on page 22 of the Annual Report to
Shareholders for the fiscal year ended December 31, 1995, under the caption
"Selected Financial Data" and is incorporated herein by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information required by this item appears on pages 13-21 of the Annual
Report to Shareholders for the fiscal year ended December 31, 1995, under the
caption "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and is incorporated herein by reference.
Page 10
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item, Report of Independent Public Accountants,
Consolidated Financial Statements, and Selected Quarterly Financial Data appears
on pages 29, 30-44, and 43, respectively, of the Annual Report to Shareholders
for the fiscal year ended December 31, 1995, and is incorporated herein by
reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
On June 28, 1995, the Board of Directors of CBT Corporation determined to
discontinue the service of Deloitte & Touche, the independent public accounting
firm who was previously engaged as the principal accountant to audit CBT
Corporation's financial statements. On that same date, the Company engaged a
new independent public accounting firm, Arthur Andersen LLP, as its principal
accountant to audit CBT Corporation's financial statements. The decision to
change accountants was recommended by the audit committee of the Board of
Directors and approved by the Board of Directors.
A Form 8-K was filed with the Securities and Exchange Commission on July 5, 1995
and is incorporated herein by reference.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this Item 10 appears under the heading "PROPOSAL ONE
ELECTION OF DIRECTORS" on pages 3-5 of the Proxy Statement and under the heading
"BENEFICIAL OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS OF COMMON STOCK OF THE
CORPORATION" on pages 2-3 of the Proxy Statement and is incorporated herein by
reference.
Information regarding the Executive Officers of the Registrant is contained in
Part I of this Form 10-K.
ITEM 11. EXECUTIVE COMPENSATION
Information required by this item is contained on page 6 of the Proxy Statement
under the heading "Compensation of Directors" and on pages 6-11 under the
heading "EXECUTIVE COMPENSATION" of the Proxy Statement and is incorporated
herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Information required by this item is contained on pages 2-3 under the heading
"BENEFICIAL OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS OF COMMON STOCK OF THE
CORPORATION" of the Proxy Statement and is incorporated herein by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information required by this item is contained on page 8 under the heading
"Compensation Committee Interlocks and Insider Participations" and on pages 14-
15 under the heading "Transactions with Executive Officers and Directors" of the
Proxy Statement and is incorporated herein by reference.
Page 11
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) The following consolidated financial statements of the registrant and
report of independent public accountants are included in the Annual Report to
Shareholders for the fiscal year ended December 31, 1995, on the pages indicated
and are incorporated herein by reference.
(1) Financial Statements:
DESCRIPTION PAGE
Report of Independent Public Accountants 29
Consolidated Balance Sheet 30
Consolidated Statement of Income 31
Consolidated Statement of Stockholders' Equity 32
Consolidated Statement of Cash Flows 33
Notes to Consolidated Financial
Statements 34-44
(2) Financial Statements Schedules:
Schedules are omitted because the information is
not applicable.
(3) Exhibits:
The exhibits listed on the Exhibit Index on page 15 of
this Form 10-K are filed herewith or incorporated herein
by reference. The management contracts and compensatory
plans or arrangements required to be filed as exhibits to this
Form 10-K pursuant to Item 14(c) are noted by asterisk in the
Exhibit Index.
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the fourth quarter of 1995.
(c) Exhibits.
The exhibits listed on the Exhibit Index on page 15 of
this report are filed herewith or incorporated herein
by reference.
(d) Financial Statement Schedules.
The financial statement schedules are omitted because
the information is not applicable.
Page 12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on behalf
by the undersigned, thereunto duly authorized on March 27, 1996.
CBT CORPORATION
/s/ William J. Jones
William J. Jones
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities indicated on March 27, 1996.
/s/ William J. Jones President and Chief Executive Officer
William J. Jones (Principal Executive Officer)
/s/ Jeffrey R. Nieder Senior Vice President and
Jeffrey R. Nieder Chief Financial Officer
(Principal Financial and Accounting Officer)
/s/ Irving P. Bright, Jr.
Irving P. Bright, Jr. Director
/s/ John L. Burman
John L. Burman Director
/s/ Patrick J. Cvengros
Patrick J. Cvengros Director
/s/ William H. Dyer
William H. Dyer Director
/s/ Louis A. Haas
Louis A. Haas Director
/s/ Joe Tom Haltom
Joe Tom Haltom Director
/s/ Kerry B. Harvey
Kerry B. Harvey Director
/s/ F. Donald Higdon
F. Donald Higdon Director
Page 13
/s/ Ted S. Kinsey
Ted S. Kinsey Director
/s/ Louis M. Michelson
Louis M. Michelson Director
/s/ Bill B. Morgan
Bill B. Morgan Director
_________________________
Louis D. Myre, M.D. Director
/s/ David M. Paxton
David M. Paxton Director
_________________________
Robert P. Petter Director
/s/ Joseph A. Powell
Joseph A. Powell Director
/s/ William A. Usher
William A. Usher Director
Page 14
EXHIBIT INDEX
NUMBER DESCRIPTION PAGE
3(a) Articles of Incorporation of CBT Corporation,
as amended are incorporated by reference to
Exhibit 4(a), of Amended Form 10-Q of CBT
Corporation dated September 6, 1994.
3(b) Articles of Amendment to the Articles of Incorporation
of CBT Corporation are incorporated by reference to
Exhibit 4(b) of Form 10-Q of CBT Corporation
dated June 30, 1995.
3(c) By-Laws of CBT Corporation are incorporated
by reference to Exhibit 3, to the Registration
Statement of Form S-14 of CBT Corporation
(Registration No. 2-83583).
10(a) **Form of Severance Protection Agreement
between CBT Corporation and certain executive
officers is incorporated by reference to Exhibit 10 of
Form 10-Q of CBT Corporation dated September 30, 1995.
10(b) **CBT Corporation 1986 Stock Option Plan is
incorporated by reference to Exhibit 4 of
Registration Statement on Form S-8 of CBT
Corporation (Registration No. 33-28512).
10(c) **CBT Corporation 1993 Stock Option Plan
is incorporated by reference to Form 10-Q
of CBT Corporation dated March 31, 1993.
10(d) **Salary Continuance Agreement is incorporated
by reference to Exhibit 10(c) of the Form 10-K
of CBT Corporation for the year ended December
31, 1990.
10(e) **Description of Incentive Compensation Plan is
incorporated by reference to Exhibit 10(d) of the
Form 10-K of CBT Corporation for the year ended
December 31, 1990.
13 Portions of the Annual Report to Security Holders 16-48
23 Consent of Independent Public Accountants 49-50
27 Financial Data Schedule 51-52
99 Independent Auditors' Report 53-54
** Denotes management contracts or compensatory plans or arrangements required
to be filed as exhibits to this Form 10-K.
Page 15