UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended
December 31, 1999 Commission File No. 0-10852
SOUTHERN BANCSHARES (N.C.), INC.
(Exact name of registrant as specified in its charter)
DELAWARE 56-1538087
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
121 East Main Street 28365
Mount Olive, North Carolina (Zip Code)
(Address of Principal Executive offices)
Registrant's Telephone Number,
including Area Code: (919) 658-7000
Securities registered pursuant to Section 12(b) of the Act:
8.25% Junior Subordinated Debentures
Securities registered pursuant to Section 12(g) of the Act:
Series B non-cumulative preferred stock, no par value
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 Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the voting stock held by nonaffiliates of the
Registrant as of March 17, 2000: The Registrant's voting stock has no readily
ascertainable market value as of any date within the last sixty days or
otherwise for the reason that such stock is not regularly traded and has no
quoted prices. Therefore, the aggregate market value of the voting stock held by
non-affiliates is not determinable.
The number of shares outstanding of the Registrant's common stock as of March
17, 2000: Common Stock, $5.00 par value - 118,626 shares
Documents Incorporated by Reference
1. Portions of the Registrant's 1999 Annual Report to Shareholders are
incorporated by reference into Parts I and II.
2. Portions of the Registrant's definitive Proxy Statement dated March 17,
2000 for the 2000 Annual Meeting of Shareholders are incorporated by
reference into Part III.
PART I
ITEM 1 - BUSINESS:
General
Southern BancShares (N.C.), Inc., a Delaware corporation (hereinafter, with
all of its subsidiaries, referred to as the "Registrant" or "BancShares"), is a
bank holding company pursuant to the provisions of the Bank Holding Company Act
of 1956, as amended. BancShares is the successor to Southern BancShares (N.C.),
Inc., a North Carolina corporation ("SBS") which was formed in 1982 to become
the parent company of Southern Bank and Trust Company ("Southern"), its
principal operating subsidiary, which it acquired in late 1982. BancShares was
formed in 1986 in order to effect the reincorporation in Delaware of the holding
company of Southern by the merger of SBS into BancShares, which was effective on
December 28, 1986. BancShares' second wholly-owned subsidiary, Southern Capital
Trust I, is a statutory business trust that issued $23.0 million of 8.25%
Capital Securities (the "Capital Securities") in June 1998 maturing in 2028. All
significant activities of the Registrant and its subsidiaries are banking
related so that the Registrant operates within one industry segment. Neither
BancShares nor its subsidiaries has any foreign operations.
Southern is BancShares principal operating subsidiary and is engaged in
commercial banking primarily in eastern North Carolina. In terms of total
assets, at December 31, 1999, Southern was the thirteenth largest bank in North
Carolina.
Business
Southern conducts a general banking business designed to meet the needs of
the people of its market area. These services, all of which are offered at its
46 offices, include, among other items: taking deposits; cashing checks and
providing for individual and commercial cash needs; and providing numerous
checking and savings plans, including automatic transfer services, direct
deposit, and banking by mail.
Southern also makes commercial, consumer and mortgage loans at its 33 full
service offices and provides individual retirement account service, safe deposit
box rental, travelers' check service, and Master Card and Visa credit card
programs. Southern does not operate in the international financing market.
Southern has a wholly-owned subsidiary, Goshen, Inc., which acts as agent
for credit life and credit accident and health insurance written in connection
with loans made by Southern.
Supervision and Regulation
The business and operations of BancShares and Southern are subject to
extensive federal and state governmental regulation and supervision.
BancShares is a bank holding company registered with the Board of Governors
of the Federal Reserve System (the "Federal Reserve") under the Bank Holding
Company Act of 1956 as amended (the "BHCA"), and is subject to supervision and
examination by and the regulations and reporting requirements of the Federal
Reserve. Under the BHCA, the activities of BancShares are limited to banking,
managing or controlling banks, furnishing services to or performing services for
its subsidiaries or engaging in any other activity which the Federal Reserve
determines to be so closely related to banking or managing or controlling banks
as to be a proper incident thereto.
There are a number of obligations and restrictions imposed by law on a bank
holding company and its insured depository institution subsidiaries that are
designed to minimize potential loss to depositors and the FDIC insurance funds.
For example, if a bank holding company's insured depository institution
subsidiary becomes "undercapitalized," the bank holding company is required to
guarantee (subject to certain limits) the subsidiary's compliance with the terms
of any capital restoration plan filed with its appropriate federal banking
agency. Also, a bank holding company is required to serve as a source of
financial strength to its depository institution subsidiaries and to commit
resources to support such institutions in circumstances where it might not do
so, absent such policy. Under the BHCA, the Federal Reserve has the authority to
require a bank holding company to terminate any activity or to relinquish
control of a nonbank subsidiary upon the Federal Reserve's determination that
such activity or control constitutes a serious risk to the financial soundness
and stability of a depository institution subsidiary of the bank holding
company.
As a result of its ownership of a North Carolina-chartered commercial bank,
BancShares also is registered with and subject to examination and regulation by
the North Carolina Commissioner of Banks under the state's bank holding company
laws.
Southern is a North Carolina commercial bank and its deposits are insured
by the FDIC. It is subject to supervision and examination by and the regulations
and reporting requirements of the North Carolina Commissioner of Banks (the
"Commissioner") and the FDIC.
Southern is subject to legal limitations on the amounts of dividends it is
permitted to pay. Prior approval of the Commissioner is required if the total of
all dividends declared by Southern in any calendar year exceeds its net profits
(as defined by statute) for that year combined with its retained net profits (as
defined by statute) for the preceding two calendar years, less any required
transfers to surplus. As an insured depository institution, Southern also is
prohibited from making capital distributions, including the payment of
dividends, if, after making such distribution, it would become
"undercapitalized" (as such term is defined in the Federal Deposit Insurance
Act).
Under current federal law, certain transactions between a depository
institution and its affiliates are governed by Sections 23A and 23B of the
Federal Reserve Act. An affiliate of a depository institution is any company or
entity that controls, is controlled by or is under common control with the
institution, and, in a holding company context, the parent holding company of a
depository institution and any companies which are controlled by such parent
holding company are affiliates of the depository institution. Generally,
Sections 23A and 23B (i) limit the extent to which a depository institution or
its subsidiaries may engage in covered transactions with any one affiliate, and
(ii) require that such transactions be on terms and under circumstances
substantially the same, or at least as favorable, to the institution or the
subsidiary as those provided to a nonaffiliate.
Southern is subject to various other state and federal laws and
regulations, including state usury laws, laws relating to fiduciaries, consumer
credit and equal credit, fair credit reporting laws and laws relating to branch
banking. As an insured institution, Southern is prohibited from engaging as a
principal in activities that are not permitted for national banks unless (i) the
FDIC determines that the activity would pose no significant risk to the
appropriate deposit insurance fund and (ii) the institution is, and continues to
be, in compliance with all applicable capital standards. Insured institutions
also are prohibited from directly acquiring or retaining any equity investment
of a type or in an amount not permitted for national banks.
The Federal Reserve, the FDIC and the Commissioner all have broad powers to
enforce laws and regulations applicable to BancShares and Southern and to
require corrective action of conditions affecting the safety and soundness of
Southern. Among others, these powers include cease and desist orders, the
imposition of civil penalties and the removal of officers and directors.
Capital Requirements
Bank holding companies are required to comply with the Federal Reserve's
risk-based capital guidelines which require a minimum ratio of total capital to
risk-weighted assets of 8%. At least half of the total capital is required to be
Tier I capital. In addition to the risk-based capital guidelines, the Federal
Reserve has adopted a minimum leverage capital ratio under which a bank holding
company must maintain a level of Tier I capital to average total consolidated
assets of at least 3 % in the case of a bank holding company which has the
highest regulatory examination rating and is not contemplating significant
growth or expansion. All other bank holding companies are expected to maintain a
leverage capital ratio of at least 1% to 2% above the stated minimum.
Southern is also subject to capital requirements imposed by the FDIC. Under
the FDIC's regulations, insured institutions that receive the highest rating
during the examination process and are not anticipating or experiencing any
significant growth are required to maintain a minimum leverage ratio of 3% of
Tier I capital to average total consolidated assets. All other insured
institutions are required to maintain a minimum ratio of 1% or 2% above the
stated minimum, with a minimum leverage ratio of not less than 4%.
Insurance Assessments
Southern is subject to insurance assessments imposed by the FDIC. One
assessment to be paid by each insured institution is based on the institution's
assessment risk classification, which is determined based on whether the
institution is considered "well capitalized", "adequately capitalized" or "under
capitalized", as such terms have been defined in applicable federal regulations,
and whether the institution is considered by its supervisory agency to be
financially sound or to have supervisory concerns.
A separate assessment is made for the Financing Corporation ("FICO") funding
requirements. The FICO rate is not tied to the FDIC risk classification and is
subject to change by the FDIC within certain limitations. The FICO rate for the
first quarter of 2000 is set at an annual rate of 2.12 basis points of deposits
as defined by the FDIC. At December 31, 1999 the FICO assessable deposit base
for Southern was $565.0 million.
If Southern's deposits remained at these levels and the FDIC maintained the same
rates, the expense for the FICO obligation for Southern would
be approximately $118 thousand for 2000.
The FDIC also is authorized to impose one or more special assessments in any
amount deemed necessary to enable repayment of amounts borrowed by the FDIC from
the United States Treasury Department.
Change in Control
State and federal law restricts the amount of voting stock of a bank
holding company, or a bank, that a person may acquire without the prior approval
of banking regulators.
Pursuant to North Carolina law, no person may, directly or indirectly,
purchase or acquire voting stock of any bank holding company or bank which would
result in the change of control of that entity unless the Commissioner first
shall have approved that proposed transaction. A person will be deemed to have
acquired "control" of a bank holding company or bank if that person, directly or
indirectly, (i) owns, controls or has the power to vote 10% or more of the
voting stock of the bank holding company or bank, or (ii) possesses the power to
direct or cause the direction of its management and policy. Federal law imposes
additional restrictions on acquisitions of stock in bank holding companies and
insured banks. Under the federal Change in Bank Control Act and regulations
thereunder, a person or group acting in concert must give advance notice to the
Federal Reserve or the FDIC before directly or indirectly acquiring the power to
direct the management or policies of, or to vote 25% or more of any class of
voting securities of, any bank holding company or insured bank. Upon receipt of
such notice, the federal regulator either may approve or disapprove the
acquisition.
Under the Act, a change in control is presumed to occur if, among other
things, a person or group acquires more than 10% of any class of voting stock of
a holding company or insured bank and, after such acquisition, the acquirer will
be the largest shareholder.
Interstate Banking and Branching
Federal law permits adequately capitalized and managed bank holding
companies to acquire control of the assets of banks in any state (the
"Interstate Banking Law"). Acquisitions are subject to anti-trust provisions
that cap at 10% the portion of the total deposits of insured depository
institutions in the United States that a single bank holding company may
control, and generally cap at 30% the portion of the total deposits of insured
depository institutions in a state that a single bank holding company may
control. Under certain circumstances, states have the authority to increase or
decrease the 30% cap, and states may set minimum age requirements of up to five
years on target banks within their borders.
Beginning June 1, 1997, and subject to certain conditions, the Interstate
Banking Law permitted interstate branching by allowing a bank to merge with a
bank located in a different state. The Interstate Banking Law also permits banks
to establish branches in other states, by opening new branches or acquiring
existing branches of other banks, if the laws of those other states specifically
permit that form of interstate branching. North Carolina has adopted statutes
which, subject to conditions contained therein, specifically authorize
out-of-state bank holding companies and banks to acquire or merge with North
Carolina banks and to establish or acquire branches in North Carolina.
Economic Considerations
As a bank holding company whose primary asset is the capital stock of a
commercial bank, BancShares is directly affected by regulatory measures
affecting the banking industry in general. Additionally, since BancShares'
banking business is centered in eastern North Carolina, the general state of the
economy of eastern North Carolina, especially the agricultural sector, has a
direct effect on its business and profitability.
Among governmental regulators of primary importance is the Federal Reserve
which acts as the nation's central bank and can directly affect money supply and
thereby affect Southern's lending ability by increasing or decreasing its
interest costs and availability of funds. An important function of the Federal
Reserve is to regulate the national supply of bank credit in order to combat
recession and curb inflationary pressures. Among the instruments of monetary
policy used by the Federal Reserve to implement these objectives are open market
operations in U. S. Government securities, changes in the discount rate and
surcharge, if any, on member bank borrowings, and changes in reserve
requirements against bank deposits. These means are used in varying combinations
to influence overall growth of bank loans, investments and deposits and may also
affect interest rates charged on loans or paid for deposits.
Southern is not a member of the Federal Reserve System, but is subject to
reserve requirements imposed on non-member banks by the Federal Reserve. The
monetary policies of the Federal Reserve have had a significant effect on the
operating results of commercial banks in the past and are expected to continue
to do so in the future.
Competition
The banking laws of North Carolina allow statewide branching; therefore,
commercial banking in the state is highly competitive. Southern competes
directly in many of its markets with one or more of the largest banking
organizations in North Carolina. Such competitors range in size to over $571
billion in consolidated resources (including resources represented by banking
organizations in other states owned by or which control certain of such
competitors), have broader geographic markets and higher lending limits and
offer more services than Southern, and can, therefore, make more effective use
of media advertising, support services and electronic technology than can
BancShares or Southern.
Employees
At December 31, 1999, Southern employed 307 full-time employees and 35
part-time employees. It is not a party to any collective bargaining agreements
and considers relations with its employees to be good. BancShares and Goshen do
not have any separate employees.
Statistical Information
Certain additional statistical information with respect to BancShares'
business is included in the information incorporated herein under "Part II, Item
7" below.
Statistical Information
I. AVERAGE BALANCE SHEET ITEMS AND NET INTEREST DIFFERENTIAL AVERAGE BALANCES AND
AVERAGE RATES EARNED AND PAID
(Dollars in thousands)
DECEMBER 31, 1999 DECEMBER 31, 1998
---------------------------------- ----------------------------------------
AVERAGE AVERAGE AVERAGE AVERAGE
ASSETS BALANCE INTEREST RATE BALANCE INTEREST RATE
- ------ ------- -------- ---- ------- -------- ----
Interest earning assets:
Loans (1) (2) $ 380,877 $ 31,292 8.22% $ 362,298 $ 31,000 8.56%
Taxable investment securities 158,071 8,345 5.28% 141,193 8,085 5.73%
Nontaxable investment securities (3) 24,748 2,006 8.11% 22,842 1,982 8.68%
Federal funds sold 19,081 968 5.07% 18,321 972 5.31%
Other interest earning assets 4,003 204 5.10% 5,367 293 5.46%
--------- -------- ---- --------- -------- ----
Total interest earning assets 586,780 42,815 7.30% 550,021 42,332 7.70%
-------- ---------
Non-interest earning assets:
Cash and due from banks 22,012 19,250
Premises and equipment, net 19,781 18,304
Other 22,441 28,253
Total assets $ 651,014 $ 615,828
========= =========
LIABILITIES & EQUITY
Interest bearing liabilities:
Demand deposits $ 83,823 $ 799 0.95% $ 78,283 $ 1,073 1.37%
Savings deposits 98,137 2,170 2.21% 92,657 2,325 2.51%
Time deposits 298,744 14,685 4.92% 285,869 15,318 5.36%
Short-term borrowed funds 6,231 229 3.68% 6,531 292 4.47%
Long-term obligations 23,000 2,084 9.06% 15,056 1,320 8.77%
--------- -------- ---- --------- -------- ----
Total interest bearing liabilities 509,935 19,967 3.92% 478,396 20,328 4.25%
--------- ---------
Non-interest bearing liabilities:
Demand deposits 77,682 69,746
Other 7,923 11,263
Shareholders' equity 55,474 56,423
--------- ---------
Total liabilities and equity $ 651,014 $ 615,828
========= =========
Interest rate spread (4) 3.38% 3.45%
Net interest income and
Net interest margin (5) $ 22,848 3.89% $ 22,004 4.00%
========= ========
DECEMBER 31, 1997
----------------------------------------
AVERAGE AVERAGE
BALANCE INTEREST RATE
------- -------- ----
Interest earning assets:
Loans (1) (2) $ 340,195 $ 29,225 8.59%
Taxable investment securities 126,829 7,532 5.94%
Nontaxable investment securities (3) 24,581 2,130 8.66%
Federal funds sold 11,526 623 5.41%
Other interest earning assets 4,840 269 5.56%
--------- -------- ----
Total interest earning assets 507,971 39,779 7.83%
--------
Non-interest earning assets:
Cash and due from banks 17,730
Premises and equipment, net 17,457
Other 24,078
Total assets $ 567,236
=========
LIABILITIES & EQUITY
Interest bearing liabilities:
Demand deposits $ 76,080 $ 1,234 1.62%
Savings deposits 87,577 2,259 2.58%
Time deposits 270,863 14,736 5.44%
Short-term borrowed funds 6,295 303 4.81%
Long-term obligations 4,539 295 6.50%
--------- -------- ----
Total interest bearing liabilities 445,354 18,827 4.23%
--------
Non-interest bearing liabilities:
Demand deposits 63,783
Other 12,396
Shareholders' equity 45,703
---------
Total liabilities and equity $ 567,236
=========
Interest rate spread (4) 3.60%
Net interest income and
Net interest margin (5) $ 20,952 4.12%
========
(1) Includes non-accrual loans
(2) Interest income includes amortization of loan fees.
(3) The average rate on nontaxable investment securities has been adjusted to a
tax equivalent yield using a 34% tax rate. The taxable equivalent
adjustment was $682 in 1999, $543 in 1998 and $2,024 in 1997.
(4) Interest rate spread is the difference between earning asset yield and
interest bearing liability rate.
(5) Net interest margin is net interest income divided by average earning
assets.
II. AVERAGE BALANCE SHEET ITEMS AND NET INTEREST DIFFERENTIAL ANALYSIS OF CHANGES iN
INTEREST DIFFERENTIAL
(Dollars in thousands) December 31, 1999 Increase (Decrease)
-----------------------------------------------------------
AMOUNT AMOUNT AMOUNT
TOTAL ATTRIBUTABLE ATTRIBUTABLE ATTRIBUTABLE
CHANGE TO CHANGE TO CHANGE TO CHANGE IN
1998-1999 IN VOLUME IN RATE RATE/VOLUME
ASSETS
Interest earning assets:
Loans $ 292 $ 1,590 (1,232) $ (66)
Taxable investment securities 171 967 (635) (161)
Non-taxable investment securities 24 165 (130) (11)
Federal funds sold (4) 40 (44) --
----- ------- ------- -----
Total interest income 483 2,762 (2,041) (238)
----- ------- ------- -----
LIABILITIES & EQUITY
Interest bearing liabilities:
Demand deposits (274) 76 (329) $ (21)
Savings deposits (155) 138 (278) (15)
Time deposits (633) 690 (1,258) (65)
Short-term borrowed funds (63) (13) (52) 2
Long-term obligations 764 697 44 23
----- ------- ------- -----
Total interest expense (361) 1,588 (1,873) (76)
----- ------- ------- -----
Net interest income $ 844 $ 1,174 $ (168) $(162)
===== ======= ======= =====
(Dollars in thousands) December 31, 1998 Increase (Decrease)
-------------------------------------------------------------------
AMOUNT AMOUNT AMOUNT
TOTAL ATTRIBUTABLE ATTRIBUTABLE ATTRIBUTABLE
CHANGE TO CHANGE TO CHANGE TO CHANGE IN
1997-1998 IN VOLUME IN RATE RATE/VOLUME
--------- --------- ------- -----------
ASSETS
Interest earning assets:
Loans $ 1,775 $ 1,836 $ (68) $ 7
Taxable investment securities 577 971 (355) (39)
Non-taxable investment securities (148) (151) 5 (2)
Federal funds sold 349 368 (12) (7)
------- ------- ----- -----
Total interest income 2,553 3,024 (430) (41)
------- ------- ----- -----
LIABILITIES & EQUITY
Interest bearing liabilities:
Demand deposits (161) 36 (190) (7)
Savings deposits 66 131 (61) (4)
Time deposits 582 728 (135) (11)
Short-term borrowed funds 22 45 (22) (1)
Long-term obligations 992 771 67 154
------- ------- ----- -----
Total interest expense 1,501 1,711 (341) 131
------- ------- ----- -----
Net interest income $ 1,052 $ 1,313 $ (89) $(172)
======= ======= ===== =====
Average loan balances include nonaccrual loans. BancShares earns tax-exempt
interest on certain loans and investment securities due to the borrower or
issuer being either a governmental agency or a quasi-governmental agency. Yields
related to loans and securities exempt from federal income taxes are stated on a
taxable-equivalent basis assuming a statutory federal income tax rate of 34% for
all periods. The taxable equivalent adjustment was $682 in 1999, $543 in 1998
and $2,024 in 1997.
III. INVESTMENT PORTFOLIO
The following table sets forth the carrying amount of investment securities
(dollars in thousands):
December 31,
----------------------------------------
(Dollars in thousands) 1999 1998 1997
-------- -------- --------
U.S. Treasury and other
U.S. Government agencies (1) $139,659 $143,350 $118,589
States and political subdivisions 33,203 29,281 31,150
Other (2) 21,359 28,936 30,394
-------- -------- --------
Total $194,221 $201,567 $180,133
======== ======== ========
The following table sets forth the maturities of investment securities at
December 31, 1999 (dollars in thousands) and the weighted average yields of such
securities. (Note that nontaxable investment securities have not been adjusted
to a tax equivalent basis and unrealized gain (loss) on available for sale
securities is not included.)
Maturing
----------------------------------------------------------------------------------
After One But After Five But
Within One Year Within Five Years Within Ten Years
Amount Yield Amount Yield Amount Yield
------ ----- ------ ----- ------ -----
U.S. Treasury and other
U.S. Government agencies (1) $ 62,825 4.94% $ 75,451 5.46% $ - -
States and political subdivisions 11,925 5.16% 7,945 6.56% 7,547 5.90%
Other (2) 10,262 3.23% - - 100 6.75%
-------- ---- -------- ---- -----
$ 85,012 4.77% $ 83,396 5.56% $ 7,647 5.91%
======== ======= =======
After Ten Years
Amount Yield
------ -----
U.S. Treasury and other
U.S. Government agencies (1) $ 1,382 6.45%
States and political subdivisions 5,787 5.41%
Other (2) - 6.75%
------- ----
$ 7,169 5.62%
=======
1) Mortgage-backed securities are included in the obligations of U.S. Government
agencies and spread within the columns according to their anticipated repayment
schedules.
(2) The "Within One Year" column of the "Other" category includes marketable
equity securities held by BancShares. Accordingly, the yield on these securities
represents anticipated dividend income rather than interest income.
IV. LOAN PORTFOLIO
Analysis of loans by type and maturity
The table below classifies loans by major category (dollars in thousands):
(Dollars in thousands) December 31,
------------------------------------------------------------------------
1999 1998 1997 1996 1995
-------- -------- -------- -------- --------
Commercial, financial and agricultural $101,128 $ 86,980 $ 84,281 $ 70,881 $ 57,398
Real estate:
Construction 8,647 5,276 5,209 2,470 1,533
Mortgage:
One to four family residential 111,793 113,984 106,444 113,915 111,372
Commercial 74,873 62,446 58,056 52,686 43,580
Equityline 30,152 28,698 27,759 18,654 13,828
Other 32,851 26,846 27,868 21,615 20,535
Consumer 34,309 36,775 35,643 35,512 37,548
Lease financing 4,307 3,484 3,956 2,022 2,166
-------- -------- -------- -------- --------
Total loans $398,060 $364,489 $349,216 $317,755 $287,960
======== ======== ======== ======== ========
The following table identifies the maturities of all loans as of December 31,
1999 and addresses the sensitivity of these loans to changes in interest rates.
(Dollars in thousands)
Within After One Year But After
One Year Within Five Years Five Years Total
-------- ----------------- ---------- -----
Commercial and Financial $ 88,792 $ 12,336 $ -- $101,128
Real Estate:
Construction 8,647 -- -- 8,647
One to four family residential 6,567 55,965 49,261 111,793
Commercial 4,378 37,310 33,185 74,873
Equityline 1,751 14,924 13,477 30,152
Other 1,897 16,168 14,786 32,851
Consumer 28,047 6,262 -- 34,309
Lease Financing -- 4,307 -- 4,307
-------- -------- -------- --------
Total $140,079 $147,272 $110,709 $398,060
======== ======== ======== ========
Fixed Rate $ 54,279 $116,251 $ 70,307 $240,837
Variable Rate 85,800 31,021 40,402 157,223
-------- -------- -------- --------
Total $140,079 $147,272 $110,709 $398,060
======== ======== ======== ========
Non-accrual, past-due, and restructured loans
The following analysis identifies other real estate owned and loans that were
either non-accruing, past-due or restructured. Accrual of interest is
discontinued on a loan when management believes the borrowers' financial
condition is such that collection of principal or interest is doubtful. Loans
are returned to the accrual status when the factors indicating doubtful
collectibility cease to exist.
December 31,
--------------------------------------------------------
(Dollars in thousands) 1999 1998 1997 1996 1995
------ ------ ---- ---- ----
Non-accrual loans $ 243 $ 166 $230 $147 $ 50
Restructured loans 42 42 -- 8 --
Accruing loans past-due 90 days or more 460 805 466 343 508
------ ------ ---- ---- ----
Total non-performing loans 745 1,013 696 498 558
Other real estate owned 414 84 48 -- 86
------ ------ ---- ---- ----
Total non-performing loans and assets $1,159 $1,097 $744 $498 $644
====== ====== ==== ==== ====
The amount of interest which would have been recorded in 1999 on non-accrual
loans, had they been in accordance with the original terms throughout the
period, was immaterial.
V. SUMMARY OF LOAN LOSS EXPERIENCE
Analysis of the allowance for loan losses
The table presented below summarizes activity in the allowance for loan losses
for the five years ended (dollars in thousands):
December 31,
------------------------------------------------------------------------
(Dollars in thousands) 1999 1998 1997 1996 1995
--------- --------- --------- --------- ---------
Allowance for loan losses - beginning of year $ 5,962 $ 5,971 $ 6,163 $ 6,321 $ 6,653
Charge - offs:
Commercial, financial and agricultural 183 158 47 5 --
Real estate:
Mortgage:
One to four family residential 77 41 86 106 34
Commercial 121 15 -- -- --
Equityline 10 32 -- -- --
Other -- -- 23 -- 209
Lease financing 16 -- -- -- --
Consumer 341 298 307 428 220
--------- --------- --------- --------- ---------
Total charge-offs 748 544 463 539 463
Recoveries:
Commercial, financial and agricultural 11 11 13 -- 54
Real estate:
Construction -- -- -- 19 --
Mortgage:
One to four family residential 25 20 59 131 19
Commercial 3 -- -- -- --
Equityline -- 8 -- -- --
Other -- 5 -- -- --
Consumer 105 67 139 91 58
--------- --------- --------- --------- ---------
Total recoveries 144 111 211 241 131
--------- --------- --------- --------- ---------
Net charge-offs 604 433 252 298 332
Provision for loan losses 830 155 60 140 --
Additions from bank acquisition -- 269 -- -- --
--------- --------- --------- --------- ---------
Allowance for loan losses - end of year $ 6,188 $ 5,962 $ 5,971 $ 6,163 $ 6,321
========= ========= ========= ========= ========
Average loans outstanding during the year $ 380,877 $ 362,298 $ 340,195 $ 310,389 $270,563
Ratio of net charge-offs to average loans outstanding 0.16% 0.12% 0.07% 0.10% 0.12%
The allowances for loan losses is increased by charges to the provision for loan
losses and reduced by loans charged off, net of recoveries. Southern's provision
is the amount necessary to maintain the allowance at a level considered adequate
to provide for possible loan losses based on management's internal evaluation of
the loan portfolio, as well as prevailing and anticipated economic conditions.
Allocation of the allowance for loan losses:
The composition of the allowance by loan category shown in the table below is
based upon management's evaluation of the loan portfolio, past history, and
prevailing economic conditions:
(Dollars in thousands) December 31,
----------------------------------------------------------------------
% of loans % of loans % of loans
in each in each in each
category to category to category to
1999 total loans 1998 total loans 1997 total loans
---- ----------- ---- ----------- ---- -----------
Commercial, financial and agricultural $2,450 25% $2,200 24% $2,149 24%
Real estate:
Construction 100 2% 100 2% 60 1%
Mortgage:
One to four family residential 1,100 28% 1,100 31% 1,194 30%
Commercial 550 19% 550 17% 537 17%
Equityline 200 8% 200 8% 239 8%
Other 188 8% 212 7% 239 8%
Consumer 1,500 9% 1,500 10% 1,493 10%
Lease financing 100 1% 100 1% 60 2%
------ ------ ------ ------ ------ ------
$6,188 100% $5,962 100% $5,971 100%
====== ====== ====== ====== ====== ======
% of loans % of loans
in each in each
category to category to
1996 total loans 1995 total loans
---- ----------- ---- -----------
Commercial, financial and agricultural $2,214 22% $1,264 20%
Real estate:
Construction 76 1% 63 1%
Mortgage:
One to four family residential 1,245 36% 2,188 39%
Commercial 566 17% 853 15%
Equityline 204 6% 260 5%
Other 248 6% 408 7%
Consumer 1,537 11% 1,222 13%
Lease financing 73 1% 63 --
------ ------ ------ ---
$6,163 100% $6,321 100%
====== ====== ====== ===
VI. DEPOSITS
The average monthly volume of deposits, which is considered representative of
BancShares' operations, and the average rates paid on such deposits are
presented below (dollars in thousands):
Year ended December 31,
---------------------------------------------------------------------------------------
1999 1998 1997
(Dollars in thousands)
Average Average Average Average Average Average
Balances Rates Balances Rates Balances Rates
-------- ----- -------- ----- -------- -----
Non-interest bearing demand $ 77,682 - $ 69,746 - $ 63,783 -
Interest bearing demand 83,823 0.95% 78,283 1.37% 76,080 1.62%
Savings 98,137 2.21% 92,657 2.51% 87,577 2.58%
Time deposits 298,744 4.94% 285,869 5.36% 270,863 5.44%
--------- --------- --------
Total deposits $ 558,386 $ 526,555 $498,303
========= ========= ========
Maturities of $100,000 or more time certificates of deposit at December
31, 1999 are summarized as follows (dollars in thousands):
Maturity Category
Three months or less $ 24,458
Over three through six months 16,602
Over six months through twelve months 16,393
Over one year through five years 2,931
Over five years -
--------
$ 60,384
========
VII. RETURN ON EQUITY AND ASSETS
The following table presents certain ratios of the Company:
December 31,
----------------------------------------
1999 1998 1997
---- ---- ----
Return on assets (net income divided by average total assets) 0.57% 0.91% 1.17%
Return on equity - including Series B and C preferred 6.63% 9.92% 14.47%
(net income divided by average total equity)
Dividend payout ratio (Dividends paid divided by net income) 15.57% 10.38% 8.85%
Equity to assets ratio - including Series B and C preferred 8.52% 9.16% 8.06%
(Average equity divided by average total assets)
VIII. CAPITAL ADEQUACY
The following table presents certain calculations of BancShares' capital and
related ratios:
December 31,
--------------------------------------------
1999 1998 1997
-------- ------- -------
(Dollars in thousands)
Total Shareholders' Equity $ 54,944 $56,033 $54,984
Tier 1 capital 55,398 51,240 34,380
Total capital (1) 62,967 65,666 38,449
Tier 1 capital ratio (2) 14.32% 16.01% 11.43%
Total capital ratio (2) 16.28% 20.52% 12.78%
(1) The Capital Securities issued in 1998 are considered part of Tier I Capital.
(2) The minimum ratio of qualifying total capital to risk weighted assets is 8%,
of which 4% must be Tier 1 capital, which is common equity, retained earnings,
and a limited amount of perpetual preferred stock, less certain intangibles.
IX. RATE OF INTERNAL CAPITAL GENERATION
December 31,
------------------------------------------
1999 1998 1997
---- ---- ----
Return on average assets (based on net income) 0.57% 0.91% 1.17%
Average equity as a percentage of total average assets 8.52% 9.16% 8.06%
Return on average equity 6.63% 9.92% 14.47%
Dividend payout ratio (Dividends paid divided by net income) 15.57% 10.38% 8.85%
Earnings retention 84.43% 89.62% 91.15%
(Net income less dividends divided by net income)
Rate of internal capital generation 5.60% 8.89% 13.19%
(Return on average equity times earnings retention ratio)
X. INTEREST RATE SENSITIVITY ANALYSIS
(Dollars in thousands)
December 31, 1999
-----------------------------------------------------------------------------
Non-Rate
1-30 31-90 91-180 181-365 Sensitive
Days Days Days Days & Over
Sensitive Sensitive Sensitive Sensitive 1 Year Total
--------- --------- --------- --------- ------ -----
Earning Assets:
Loans $ 75,184 $ 21,535 $ 26,235 $ 55,911 $219,195 $398,060
Investment Securities 11,120 11,091 12,416 46,704 95,976 177,307
Temporary Investments 20,370 -- -- -- -- 20,370
--------- -------- -------- -------- -------- --------
Total earning assets $ 106,674 $ 32,626 $ 38,651 $102,615 $315,171 $595,737
========= ======== ======== ======== ======== ========
Interest-Bearing Liabilities:
Savings and core time deposits $ 218,793 $ 40,920 $ 76,652 $ 72,598 $ 19,722 $428,685
Time deposits of $100,000 and more 11,124 13,334 16,602 16,393 2,931 60,384
Short-term borrowings 6,658 -- -- -- -- 6,658
Long-term obligations -- -- -- -- 23,000 23,000
--------- -------- -------- -------- -------- --------
Total interest bearing liabilites $ 236,575 $ 54,254 $ 93,254 $ 88,991 $ 45,653 $518,727
========= ======== ======== ======== ======== ========
Interest sensitive Gap $(129,901) $(21,628) $(54,603) $ 13,624 $269,518 $ 77,010
========= ======== ======== ======== ======== ========
Interest sensitivity is continually changing. The table above reflects
BancShares' gap position at December 31, 1999 and does not necessarily
represent its position on any other dates.
XI. SHORT-TERM BORROWINGS
(Dollars in thousands)
1999 1998 1997
------------------- -------------------- --------------------
Amount Rate Amount Rate Amount Rate
------ ---- ------ ---- ------ ----
Repurchase agreements
At December 31 $5,223 3.72% $4,953 3.35% $4,761 5.62%
Average during year 5,240 3.58% 5,655 4.09% 4,819 4.18%
Maximum month-end balance during year 6,313 6,459 5,929
U. S. Treasury tax and loan accounts
At December 31 $1,435 4.78% $ 171 4.11% $2,065 5.25%
Average during year 991 4.15% 861 5.97% 997 5.85%
Maximum month-end balance during year 2,035 2,206 2,215
ITEM 2 - PROPERTIES
BancShares does not own or lease any real property. Except for three tracts
of land that are leased and upon which are constructed leasehold improvements
for the conduct of its banking business, Southern owns all of the real property
utilized in its operations.
Southern's home office is located at 121 East Main Street, Mount Olive,
North Carolina. At December 31, 1999 there were 46 Southern offices in North
Carolina. These offices are listed on page 41 of BancShares' 1999 Annual Report.
ITEM 3 - LEGAL PROCEEDINGS:
There are no material legal proceedings to which BancShares or its
subsidiaries are a party or to which any of their property is subject, other
than ordinary, routine litigation incidental to the business of commercial
banking.
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITIES
HOLDERS:
None.
PART II
ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
SHAREHOLDER MATTERS:
Information required by this item is incorporated herein by reference
to the section captioned "Market for the Registrant's Common Stock and Related
Shareholder Matters" on page 15, and the Table captioned "Per Share of Stock" on
page 16 of the Registrant's 1999 Annual Report.
ITEM 6 - SELECTED FINANCIAL DATA:
Information required by this item is incorporated herein by reference
to Table 1, Five-Year Financial Summary, Selected Balances and Ratios, on page 4
of Registrant's 1999 Annual Report.
ITEM 7 - MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS:
Information required by this item is incorporated herein by reference
to the section captioned "Management Discussion and Analysis of Financial
Condition and Results of Operations" on pages 4 through 16 of the Registrant's
1999 Annual Report.
ITEM 7A - QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
Information required by this item is incorporated herein by reference
to the section captioned "Market Risk" on page 10 of Registrant's 1999 Annual
Report.
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA:
The information required by this item is incorporated herein by
reference to the following financial statements, supplementary data and
independent auditors' report on the indicated page numbers of the registrant's
1999 Annual Report:
Independent Auditors' Report 17
Consolidated Balance Sheets as of December 31, 1999 and 1998 18
Consolidated Statements of Income and Comprehensive Income
for the years ended December 31, 1999, 1998 and 1997 19
Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997 20
Consolidated Statements of Shareholders' Equity for the years
ended December 31, 1999, 1998 and 1997 21
Notes To Consolidated Financial Statements 22-38
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURES:
None
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT:
The information under the captions "PROPOSAL 1: ELECTION OF DIRECTORS",
"Section 16(a) Beneficial Ownership Reporting Compliance" and "Executive
Officers" on pages 4 through 6 and page 9 of Registrant's definitive Proxy
Statement dated March 17, 2000, is incorporated herein by reference.
ITEM 11 - EXECUTIVE COMPENSATION:
The information under the captions "Compensation of Directors",
"Compensation Committee Interlocks and Insider Participation", "Executive
Compensation" and "Pension Plan" on pages 6 through 10 of the Registrant's
definitive Proxy Statement dated March 17, 2000, is incorporated herein by
reference.
ITEM 12 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT:
The information under the caption "Beneficial Owenership of Voting
Securities" on pages 2 through 4 of the Registrant's definitive Proxy Statement
dated March 17, 2000, is incorporated herein by reference.
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS:
The information contained in Footnote (5) to the table under the caption
"PROPOSAL 1: ELECTION OF DIRECTORS," on page 6 and under the captions
"Compensation Committee Interlocks and Insider Participation" on pages 7 through
8 and "Transactions with Management" on pages 11 through 12 of the Registrant's
definitive Proxy Statement dated March 17, 2000, is incorporated herein by
reference.
PART IV
ITEM 14 - EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON
FORM 8-K:
(a) 1. Financial Statements
The following consolidated financial statements of Southern
BancShares (N.C.), Inc. and subsidiary, and Independent Auditors'
Report thereon, are incorporated herein by reference from
Registrant's 1999 Annual Report to Shareholders.
. Independent Auditors' Report
. Consolidated Balance Sheets at December 31, 1999 and 1998
. Consolidated Statements of Income and Comprehensive Income for
the years ended December 31, 1999, 1998 and 1997
. Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997
. Consolidated Statements of Shareholders' Equity for the years
ended December 31, 1999, 1998 and 1997
. Notes to Consolidated Financial Statements
2. Financial statement schedules are omitted because of the
absence of conditions under which they are required or
because the required information is contained in the
consolidated financial statements or related notes thereto
which are incorporated herein by reference from
Registrant's 1999 Annual Report to Shareholders.
3. Exhibits
The following exhibits are filed or incorporated herewith
as part of this report on Form 10-K:
Exhibit
Number Description of Exhibits
------ -----------------------
3.1 Certificate of Incorporation and Certificate of Amendment to the
Certificate of Incorporation of the Registrant (filed as exhibit
3.1 to the Registrant's Registration Statement on Form S-1 (No.
33-52107) filed May 7, 1998 and incorporated herein by reference)
3.2 Registrant's Bylaws (filed as exhibit 3.2 to the Registrant's
Registration Statement on Form S-1 (No. 33-52107) filed May 7,
1998 and incorporated herein by reference)
4 Southern Bank and Trust Company Indenture dated February 27, 1971
(filed as exhibit 4 to the Registrant's Registration Statement on
Form S-14 (No. 2-78327) filed July 7, 1982 and incorporated
herein by reference)
10.1* Non-Competition and Consulting Agreement between R. S. Williams
and Southern Bank and Trust Company (filed as exhibit 10.1 to the
Registrant's 1989 Annual Report on Form 10-K and incorporated
herein by reference)
10.2* Tenth Amendment to Noncompetition and Consulting Agreement
between R. S. Williams and Southern Bank and Trust Company dated
December 31, 1999 (filed herewith)
10.3* Assignment and Assumption Agreement and First Amendment of
Noncompetition and Consultation Agreement between First-Citizens
Bank & Trust Company, Southern Bank and Trust Company and M. J.
McSorley (filed as exhibit 10.3 to the Registrant's 1989 Annual
Report on Form 10-K and incorporated herein by reference)
10.4* Employment Agreement between Watson N. Sherrod, Jr. and Southern
Bank and Trust Company (filed as exhibit 10.4 to the Registrant's
1998 Annual Report on Form 10-K and incorporated herein by
reference)
10.5 Amended and Restated Trust Agreement of Southern Capital Trust I
(filed as Exhibit 4.3 to Amendment No. 1 to Registrant's
Registration Statement on Form S-1 (No. 333-52107) filed June 3,
1998 and incorporated herein by reference.)
10.6 Form of Guarantee Agreement (filed as Exhibit 4.5 to Amendment
No. 1 to Registrant's Registration Statement on Form S-4 (No.
333-52107) filed June 3, 1998 and incorporated herein by
reference).
10.7 Junior Subordinated Indenture between Registrant and Bankers
Trust Company, as Debenture Trustee (filed as Exhibit 4.6 to
Amendment No. 1 to Registrant's Registration Statement on Form
S-4 (No. 333-52107) filed June 3, 1998 and incorporated herein by
reference).
13 Registrant's 1999 Annual Report to Shareholders (filed herewith)
22 Subsidiaries of the Registrant (filed herewith)
27 Financial Data Schedule (filed herewith)
99.1** Registrant's definitive Proxy Statement dated March 17, 2000 for
the 2000 Annual Shareholders' Meeting
(b) Reports on Form 8-K
No reports on Form 8-K were filed for the fourth quarter of the year
ended December 31, 1999.
* Denotes a Management Contract or compensatory plan or arrangement
in which an executive officer or director of the Company participates
** Not being refiled
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 its behalf by the undersigned, thereunto duly authorized.
DATED: MARCH 14, 2000 SOUTHERN BANCSHARES (N.C.), INC.
/s/ R. S. Williams
By: ------------------
R. S. Williams,
Chairman of the Board
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/R. S. Williams Chairman of the Board of March 14, 2000
- ----------------- Directors
R. S. Williams
/s/David A. Bean Treasurer (principal March 10, 2000
- ---------------- financial and accounting
David A. Bean officer)
/s/Bynum R. Brown Director March 14, 2000
- -----------------
Bynum R. Brown
/s/William H. Bryan Director March 14, 2000
- -------------------
William H. Bryan
/s/D. Hugh Carlton Director March 14, 2000
- ------------------
D. Hugh Carlton
/s/Robert J. Carroll Director March 13, 2000
- --------------------
Robert J. Carroll
/s/Hope H. Connell Director March 14, 2000
- ------------------
Hope H. Connell
/s/J. Edwin Drew Director March 13, 2000
- ----------------
J. Edwin Drew
/s/Sam E. Ewell, Jr. Director March 14, 2000
- --------------------
Sam E. Ewell, Jr.
/s/Moses B. Gillam, Jr. Director March 13, 2000
- -----------------------
Moses B. Gillam, Jr.
/s/Leroy C. Hand, Jr. Director March 14, 2000
- --------------------
LeRoy C. Hand, Jr.
/s/J. D. Hines Director March 14, 2000
- --------------
J. D. Hines
/s/Frank B. Holding Director March 15, 2000
- -------------------
Frank B. Holding
/s/George A. Hux Director March 15, 2000
- ----------------
George A. Hux
/s/M. J. McSorley Director March 14, 2000
- -----------------
M. J. McSorley
/s/W. B. Midyette, Jr. Director March 13, 2000
- ----------------------
W. B. Midyette, Jr.
/s/W. Hunter Morgan Director March 14, 2000
- -------------------
W. Hunter Morgan
/s/John C. Pegram, Jr. Director March 10, 2000
- ----------------------
John C. Pegram, Jr.
/s/Charles I. Pierce Director March 13, 2000
- --------------------
Charles I. Pierce, Sr.
/s/ W. A. Potts Director March 17, 2000
- ---------------
W. A. Potts
/s/Charles L. Revelle, Jr. Director March 14, 2000
- --------------------------
Charles L. Revelle, Jr.
/s/Watson N. Sherrod, Jr. Director March 15, 2000
- -------------------------
Watson N. Sherrod, Jr.
/s/ Charles O. Sykes Director March 17, 2000
- --------------------
Charles O. Sykes
/s/ Raymond M. Sykes Director March 16, 2000
- --------------------
Raymond M. Sykes
/s/John N. Walker Director March 14, 2000
- -----------------
John N. Walker
EXHIBIT INDEX
Exhibit
Number Exhibit
------ -------
3.1 Certificate of Incorporation and Certificate of Amendment to the
Certificate of Incorporation of the Registrant (filed as exhibit
3.1 to the Registrant's Registration Statement on Form S-1 (No.
33-52107) filed May 7, 1998 and incorporated herein by reference)
3.2 Registrant's Bylaws (filed as exhibit 3.2 to the Registrant's
Registration Statement on Form S-1 (No. 33-52107) filed May 7,
1998 and incorporated herein by reference)
4 Southern Bank and Trust Company Indenture dated February 27, 1971
(filed as exhibit 4 to the Registrant's Registration Statement on
Form S-14 (No. 2-78327) filed July 7, 1982 and incorporated
herein by reference)
10.1* Non-Competition and Consulting Agreement between R. S. Williams
and Southern Bank and Trust Company (filed as exhibit 10.1 to the
Registrant's 1989 Annual Report on Form 10-K and incorporated
herein by reference)
10.2* Tenth Amendment to Noncompetition and Consulting Agreement
between R. S. Williams and Southern Bank and Trust Company dated
December 31, 1999 (filed herewith)
10.3* Assignment and Assumption Agreement and First Amendment of
Noncompetition and Consultation Agreement between First-Citizens
Bank & Trust Company, Southern Bank and Trust Company and M. J.
McSorley (filed as exhibit 10.3 to the Registrant's 1989 Annual
Report on Form 10-K and incorporated herein by reference)
10.4* Employment Agreement between Watson N. Sherrod, Jr. and Southern
Bank and Trust Company (filed as exhibit 10.4 to the Registrant's
1998 Annual Report on Form 10-K and incorporated herein by
reference)
10.5 Amended and Restated Trust Agreement of Southern Capital Trust I
(filed as Exhibit 4.3 to Amendment No. 1 to Registrant's
Registration Statement on Form S-1 (No. 333-52107) filed June 3,
1998 and incorporated herein by reference.)
10.6 Form of Guarantee Agreement (filed as Exhibit 4.5 to Amendment
No. 1 to Registrant's Registration Statement on Form S-4 (No.
333-52107) filed June 3, 1998 and incorporated herein by
reference).
10.7 Junior Subordinated Indenture between Registrant and Bankers
Trust Company, as Debenture Trustee (filed as Exhibit 4.6 to
Amendment No. 1 to Registrant's Registration Statement on Form
S-4 (No. 333-52107) filed June 3, 1998 and incorporated herein by
reference).
13 Registrant's 1999 Annual Report to Shareholders (filed herewith)
22 Subsidiaries of the Registrant (filed herewith)
27 Financial Data Schedule (filed herewith)
99.1** Registrant's definitive Proxy Statement dated March 17, 2000 for
the 2000 Annual Shareholders' Meeting