1
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 EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1998
Commission File No. 1-14473
Sky Financial Group, Inc.
(Exact Name of Registrant as Specified in its Charter)
Ohio 34-1372535
(State of Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification Number)
221 South Church Street, Bowling Green, Ohio 43402
(Address of Principal Executive Office) (Zip Code)
(419) 327-6300
(Registrant's Telephone Number)
Securities registered pursuant to Section 12 (b) of the Act: None
Securities registered pursuant to Section 12 (g) of the Act:
Common Stock, without par value
(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 registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of the Form 10-K. [ X ]
Based on the closing sales price of February 28, 1999 the aggregate market
value of the voting stock held by non-affiliates of the Registrant was
approximately $1,040,043,000.
The number of shares outstanding of the Registrant's common stock, without par
value was 44,991,153 at February 28, 1999.
DOCUMENTS INCORPORATED BY REFERENCE* WHERE INCORPORATED
Annual Report Supplement to Shareholders
for year ended December 31, 1998 Parts I, II and IV
Definitive Proxy Statement for the Annual
Meeting of Shareholders to be held April 21,
1999, and filed with the Securities and Exchange
Commission on March 10, 1999 Part III
*As stated under various items of this report, only specified portions of such
documents are incorporated by reference herein.
1
2
INDEX
10-K
Page
PART I
Item 1. Business ........................................ 3
Item 2. Properties ...................................... 8
Item 3. Legal Proceedings ............................... 8
Item 4. Submission of Matters to a Vote of Security
Holders ......................................... 8
PART II
Item 5. Market for Registrant's Common Stock and Related
Shareholder Matters ............................. 9
Item 6. Selected Financial Data ......................... 9
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations ............. 9
Item 7A. Quantitative and Qualitative Disclosures About
Market Risk ..................................... 9
Item 8. Financial Statements and Supplementary Data ..... 9
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure ............. 9
PART III
Item 10. Directors and Executive Officers of Registrant .. 10
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 ............................................... 14
Exhibit Index ............................................ 16
2
3
PART I
Item 1. INFORMATION ABOUT SKY FINANCIAL GROUP, INC.
Sky Financial Group, Inc. (the Company), a financial services holding company,
has five bank subsidiaries with a total of 156 banking centers located in
Ohio, southern Michigan, western Pennsylvania and West Virginia. The Company
also owns nine financial services subsidiaries which engage in lines of
business which are closely related to banking. Based on total assets as of
December 31, 1998, the Company was the 7th largest bank holding company based
in Ohio. Through its banking subsidiaries, the Company offers a wide range of
lending, depository, trust, and related financial services to individual and
business customers. Through its financial services subsidiaries, the Company
offers specialty lending, investment, trust, collection and related financial
services to individual and business customers.
The Holding Company
Sky Financial Group, Inc., a registered bank holding company, is the
resulting company from the October 2, 1998 merger of equals between Citizens
Bancshares, Inc. (Bancshares) and Mid Am, Inc. (Mid Am). In conjunction with
the merger, Bancshares changed its name to Sky Financial Group, Inc. The
Company's corporate philosophy is to encourage its subsidiaries to operate as
locally-oriented, community-based financial service affiliates, augmented by
experienced, centralized support from the Company in selected critical areas.
This local market orientation is reflected in the bank subsidiaries' boards of
directors and branch banking centers, which generally have advisory boards
comprised of local business persons, professionals and other community
representatives, that assist the banking centers in responding to local
banking needs. The bank subsidiaries concentrate on customer service and
business development, while relying upon the support of the Company in
identifying operational areas that can be effectively centralized without
sacrificing the benefits of a local orientation. Primary candidates for
centralization are those functions which are not readily visible to customers
and those which are critical to risk management. Asset quality review, data
processing, loan and deposit processing, certain mortgage banking activities,
financial reporting, investment activities, internal audit, compliance and
funds management are among the functions which are managed at the holding
company level.
The Company's market area is economically diverse, with a base of
manufacturing, service industries, transportation and agriculture, and is not
dependent upon any single industry or employer. Similarly, the Company's
customer base is diverse, and the Company and its subsidiaries are not
dependent upon any single industry or upon any single customer.
Sky Financial Group, Inc.'s strategic plan includes expansion, market
diversification and growth of its fee-based income through internal business
formations, internal growth and through acquisitions of financial
institutions, branches and financial service businesses. The Company seeks
acquisition partners with experienced management, which have significant
market presence or have potential for improved profitability through financial
management, economies of scale and expanded services.
3
4
There is significant competition in the financial services industry in the
Company's market area among commercial banks. As a result of the deregulation
of the financial services industry, the Company also competes with other
providers of financial services such as savings and loan associations, credit
unions, consumer finance companies, securities firms, insurance companies,
commercial finance and leasing companies, the mutual funds industry, full
service brokerage firms and discount brokerage firms. Some of the Company's
competitors, including certain regional bank holding companies which have made
acquisitions in the Company's market area, have substantially greater
resources than those of the Company, and as such, may have higher lending
limits and may offer other services not available through the bank and non-
bank subsidiaries. The bank and non-bank subsidiaries compete on the basis of
rates of interest charged on loans, the rates of interest paid for funds, the
availability of services and the responsiveness to the needs of its customers.
The Company's executive offices are located at 221 South Church Street,
Bowling Green, Ohio, and its telephone number is (419)327-6300.
The Bank Subsidiaries
Mid American National Bank and Trust Company (Mid Am Bank), headquartered in
Toledo, Ohio, was formed in 1952. With total assets of $1.025 billion at
December 31, 1998, it operates 36 banking centers in northwest Ohio.
First National Bank Northwest Ohio (First National), headquartered in Bryan,
Ohio, was founded in 1933 and joined the Company in 1988. First National had
total assets of $542 million at December 31, 1998, and operates through 18
banking centers in the northwest corner of Ohio.
Adrian State Bank (Adrian) is the Company's Adrian, Michigan headquartered
state-chartered bank, which was acquired by the Company in 1995. Adrian had
total assets of $171 million at December 31, 1998, and operates 6 banking
centers in southeastern Michigan.
The Citizens Banking Company (Citizens), headquartered in Salineville, Ohio
and owned by the Company since 1982, was organized and chartered in 1902.
Citizens had total assets of $1.809 billion at December 31, 1998, and operates
62 banking centers in eastern Ohio, western Pennsylvania and West Virginia.
The Ohio Bank (Ohio Bank), headquartered in Findlay, Ohio, was organized in
1897. At December 31, 1998, Ohio Bank had total assets of $1.223 billion and
34 banking centers in central western Ohio.
On January 24, 1999, First National and Adrian merged into Mid Am Bank which
converted to an Ohio chartered bank and changed its name to Mid Am Bank.
The Financial Services Subsidiaries
Sky Asset Management Services, Inc. (SAMSI) is the Company's Florida-based
professional recovery services firm, formed in 1996 as a result of the merger
of two of the Company's collection affiliates. SAMSI serves various
governmental agencies, retail, insurance and commercial clients primarily in
the Southeastern United States.
4
5
Sky Investments, Inc. (SII), Bryan, Ohio is the Company's broker/dealer
affiliate, which provides its customers investment services throughout the
United States through its 175 registered representatives. SII also provides
non-depository investment products to the customers of the Bank Subsidiaries.
Mid Am Credit Corp. (MACC) is the Company's specialized medical financing and
leasing unit based in Columbus, Ohio. Beginning with its formation in 1996,
MACC has offered medical equipment and practice acquisition financing to
medical professionals throughout the United States. MACC intends to sell
substantially all of its financing originations to funding sources in the
secondary market.
Mid Am Financial Services, Inc. (MAFSI) and its subsidiary Simplicity Mortgage
Consultants, Inc. (Simplicity) is the Company's consumer finance company
headquartered in Carmel, Indiana. MAFSI, formed by the Company in connection
with the Company's 1996 acquisition of Simplicity, engages in
non-conforming residential mortgage lending for customers with difficult
financing needs, and sells substantially all of its originations in the
secondary market.
Mid Am Private Trust, N.A. (MAPT), Cleveland, Ohio, was formed in 1997 as the
Company's specialty trust bank subsidiary. MAPT was created to provide
families with substantial financial resources and individual and corporate
trustees a unique approach to fiduciary services through "insourcing"
investment managers and estate planners. MAPT expects to conduct business on
a nationwide basis.
Sky Technology Resources, Inc. (Sky Tech) is the Company's data processing and
operations affiliate which, through its Bowling Green, Ohio-based facility,
provides comprehensive back-room services and support to all of the Company's
affiliates.
Freedom Financial Life Insurance Company (Freedom), owned by the Company since
1985, was organized and chartered under the laws of the State of Arizona.
Freedom is a reinsurance company providing credit life and accident and health
insurance coverage to loan customers of the banks.
Freedom Express, Inc. (Express), owned by the Company since 1994, was
chartered in Ohio in 1984. Express is a courier company formed to transport
papers and documents between and among the states of Ohio, Pennsylvania and
West Virginia.
Supervision and Regulation
The Company is subject to the provisions of the Bank Holding Company Act of
1956, as amended (the Act), which requires a bank holding company to register
under the Act and to be subject to the regulations of the Board of Governors
of the Federal Reserve System (FRB). Pursuant to Federal Reserve policy, the
Company is expected to act as a source of financial strength to each
subsidiary bank and to commit resources to support such banks. As a bank
holding company, the Company is required to file with the Board of Governors
an annual report and such additional information as the Board of Governors may
require pursuant to the Act. The Act requires prior approval by the Board of
Governors of the acquisition by a bank holding company, or any subsidiary
thereof, of more than five percent (5%) of the voting stock or substantially
all the assets of any bank within the United States.
5
6
The Act also prohibits a bank holding company, with certain exceptions, from
acquiring more than five percent (5%) of the voting stock of any company that
is not a bank and from engaging in any business other than banking or managing
or controlling banks. The Board of Governors is also authorized to approve,
among other things, the ownership of shares by a bank holding company in any
company the activities of which the Board of Governors has determined to be so
closely related to banking or managing or controlling banks as to be a proper
incident thereto. The Board of Governors has, by regulation, determined that
certain activities, including mortgage banking, operating small loan
companies, factoring, furnishing certain data processing operations, holding
or operating properties used by banking subsidiaries or acquired for such
future use, providing certain investment and financial advice, leasing
(subject to certain conditions) real or personal property, providing
management consulting advice to certain depository institutions, providing
securities brokerage services, arranging commercial real estate equity
financing, underwriting and dealing in bank eligible securities, providing
consumer financial counseling, operating a collection agency, owning and
operating a savings association, operating a credit bureau and conducting
certain real estate investment activities and acting as insurance agent for
certain types of insurance, are closely related to banking within the
meaning of the Act. It also has determined that certain other activities,
including real estate brokerage and syndication, land development, and
property management, are not related to credit transactions and are not
permissible. Each of the non-banking activities conducted by the Company
through its financial services affiliates are activities which have been
deemed by the Board of Governors to be closely related to banking within the
meaning of the Act.
The Act and the regulations of the Board of Governors prohibit banks from
engaging in certain tie-in arrangements in connection with any extension of
credit, lease or sale of property, or furnishing of services. The Act also
imposes certain restrictions upon dealing by affiliated banks with the holding
company and among themselves including restrictions on interbank borrowing and
upon dealings in respect to the securities or obligations of the holding
company or other affiliates.
The Company is a legal entity separate and distinct from its banking and other
subsidiaries. Most of the Company's revenues result from dividends paid to it
by its bank subsidiaries. There are statutory and regulatory requirements
applicable to the payment of dividends by subsidiary banks as well as by the
Company to its shareholders.
With the completion of the bank consolidations in January, 1999, the Company's
three remaining bank subsidiaries, Mid Am Bank, Citizens and Ohio Bank are all
Ohio chartered banks and subject to supervision and regular examination by the
Ohio Divisions of Financial Institutions (DFI), and as members of the Federal
Reserve System, are subject to the applicable provisions of the Federal
Reserve Act. The Company's financial service subsidiaries are subject to
various state and federal regulatory bodies and licensing agencies. SII is
subject to regulations of the Federal Reserve Board, the Securities and
Exchange Commission and supervision by the National Association of Securities
Dealers as well as various state securities and insurance regulatory agencies.
SAMSI, MAFSI and MACC are subject to various state licensing requirements and
are subject to the regulations of the Federal Reserve Board. The Company, as
a bank holding company, is subject to supervision and regular examination by
the Federal Reserve System. The deposits of all banking subsidiaries of the
Company are insured by the Federal Deposit Insurance Corporation, to the
extent provided by law, and as such are subject to the provisions of the
Federal Deposit Insurance Act.
6
7
Each Ohio chartered banking association is required by law to obtain the prior
approval of the DFI for the declaration and payment of dividends if the total
of all dividends declared by the board of directors of such bank in any year
will exceed the total of (i) such bank's net profits (as defined and
interpreted by regulation) for that year plus (ii) the retained net profits
(as defined and interpreted by regulation) for the preceding two years.
The payment of dividends by the Company and the Company's subsidiaries is also
affected by various regulatory requirements and policies, such as the
requirement to maintain capital at or above regulatory guidelines. In
addition, if, in the opinion of the applicable regulatory authority, a bank
under its jurisdiction is engaged in or is about to engage in an unsafe or
unsound practice (which, depending on the financial condition of the bank,
could include the payment of dividends), such authority may require, after
notice and hearing, that such bank cease and desist from such practice. The
FRB and the DFI have each indicated that paying dividends that deplete a
bank's capital base to an inadequate level should be an unsafe and unsound
banking practice. The FRB, the DFI and the FDIC have issued policy statements
which provide that bank holding companies and insured banks should generally
only pay dividends out of current operating earnings.
In addition, the information contained in Note 19 "Regulatory Matters" on
pages S-51 through S-53 of the Company's 1998 Annual Report Supplement is
incorporated by reference in response to this item.
Employees
As of December 31, 1998, the Company and its subsidiaries had approximately
2,271 full-time equivalent employees. The Company considers its and its
subsidiaries' employee relations to be good. None of the employees are
covered by a collective bargaining agreement.
Certain Statistical Information Regarding the Company
Certain financial and statistical information relative to the Company as
required under the Securities and Exchange Commission's Industry Guide 3,
"Statistical Disclosure By Bank Holding Companies," and related discussion is
incorporated by specific references to portions of the Company's 1998 Annual
Report Supplement as indicated below.
Page in 1998 Annual
Report Supplement*
Net Interest Income; Average Balance Sheets
and Related Yields and Rates; Volume and
Rate Variance Analysis ........................ S-8-10
Securities ...................................... S-17-18
Loan Portfolio; Risk Elements in Loan Portfolio.. S-13-15
Summary of Credit Loss Experience ............... S-16-17
Deposits ........................................ S-18
Financial Ratios ................................ S-6
* Incorporated by reference from the indicated pages of the Company's 1998
Annual Report Supplement.
7
8
Item 2. PROPERTIES
The Company's executive offices are located in Bowling Green, Ohio. The bank
subsidiaries operate 156 banking centers, the majority of which are owned,
with the remaining banking centers under lease agreements, including 13 leased
from Bancsites, Inc. (Bancsites) under long-term lease agreements. Bancsites
was a wholly-owned subsidiary of Mid Am Bank until 1977, when Mid Am Bank
distributed all shares of Bancsites to its shareholders. Certain senior
management officials of Bancsites also serve as senior management officials of
Mid Am Bank. Also, the information contained in Note 5 "Bank Premises and
Equipment" on page S-40 of the Company's 1998 Annual Report Supplement is
incorporated herein by reference in response to this item.
Item 3. LEGAL PROCEEDINGS
The information contained in Note 16 "Contingencies" on page S-50 of the
Company's 1998 Annual Report Supplement is incorporated herein by reference
in response to this item.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On October 1, 1998, at a Special Meeting of Shareholders of the Company,
shareholders took the following actions:
1. Approved and adopted the Amended and Restated Agreement and Plan of
Merger, dated as of August 5, 1998, between Bancshares and Mid Am,
pursuant to which Bancshares and Mid Am would be combined in a merger
of equals transaction: 13,924,707 votes cast for, 569,584 votes cast
against, 289,736 votes withheld.
2. Amended the Bancshares Articles of Incorporation to repeal the control
share acquisition provision set forth in Article Sixth thereof:
13,562,784 votes cast for, 755,152 votes cast against, 466,091 votes
withheld.
3. Approved and adopted the Amended and Restated 1998 Non-Statutory Stock
Option Plan for Non-Employee Directors: 12,479,795 votes cast for,
1,890,499 votes cast against, 413,733 votes withheld.
4. Approved and adopted the 1998 Stock Option Plan for Employees:
13,376,499 votes cast for, 988,102 votes cast against, 419,426 votes
withheld.
8
9
PART II
Item 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
SHAREHOLDER MATTERS
The information contained under the caption "SHAREHOLDER INFORMATION" on page
S-3 and the information contained in Note 19 "Regulatory Matters" on pages
S-51 through S-53 of the Company's 1998 Annual Report Supplement is
incorporated herein by reference in response to this item. The Company's
common stock is traded on the NASDAQ National Market System under the symbol
"SKYF." At February 28, 1999, there were approximately 17,993 holders of
record of the Company's common stock.
Item 6. SELECTED FINANCIAL DATA
The information contained under the caption "SKY FINANCIAL GROUP, INC. SUMMARY
OF FINANCIAL DATA" on page S-6 of the Company's 1998 Annual Report Supplement
is incorporated herein by reference in response to this item.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The information contained under the caption "MANAGEMENT'S DISCUSSION AND
ANALYSIS AND STATISTICAL INFORMATION" on pages S-7 through S-24 of the
Company's 1998 Annual Report Supplement is incorporated herein by reference in
response to this item.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The information contained under the caption " MANAGEMENT'S DISCUSSION AND
ANALYSIS AND STATISTICAL INFORMATION" on pages S-22 and S-23 of the
Company's 1998 Annual Report Supplement is incorporated herein by reference in
response to this item.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information contained under the caption "SKY FINANCIAL GROUP, INC.
SELECTED QUARTERLY DATA" on page S-5 and the audited financial statements
contained on pages S-25 through S-56 of the Company's 1998 Annual Report
Supplement is incorporated herein by reference in response to this item.
With the exception of the aforementioned information and the information
incorporated in Items 5, 6, 7 and 14, the Company's 1998 Annual Report
Supplement to Shareholders is not to be deemed filed as part of this report.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
Not applicable.
9
10
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
The information contained under the captions "ELECTION OF DIRECTORS" on pages
1 through 4 and "SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE" on
page 17 of the Company's 1999 Proxy Statement filed with the Securities and
Exchange Commission on March 10, 1999, is incorporated herein by reference in
response to this item.
The following table sets forth the names and ages and business experience of
each of the executive officers of the Company. Each executive officer of the
Company is appointed by the Board of Directors on an annual basis, and serves
at the pleasure of the Board.
Position With Company or Officer
Executive Officer Age Subsidiary and Experience Since*
David R. Francisco 52 Chairman and Chief Executive 1970
Officer of the Company;
formerly President and Chief
Operating Officer of Mid Am
Marty E. Adams 46 President and Chief Operating 1977
Officer of the Company;
formerly Vice Chairman of the
Board, President and Chief
Executive Officer of Bancshares
and Citizens
Frank J. Koch 45 Executive Vice President and 1988
Senior Credit Officer of the
Company; formerly Executive
Vice President of Bancshares
W. Granger Souder 38 Executive Vice President and 1989
General Counsel of the Company;
formerly Executive Vice President
and General Counsel of Mid Am;
formerly employed as a securities
attorney in private practice
Kevin T. Thompson 45 Executive Vice President and 1998
Chief Financial Officer of the
Company; formerly Senior Vice
President/Controller of First
of America Bank Corporation
James F. Burwell 48 Chief Operating Officer of Ohio 1980
Bank; formerly President and
Chief Executive Officer of First
National; formerly President and
Chief Operating Officer of First
National
10
11
Jack W. Donaldson 58 President and Chief Executive 1981
Officer of Ohio Bank; formerly
Executive Vice President and Chief
Operating Officer of Ohio Bank
Richard L. Hardgrove 60 President and Chief Executive 1998
Officer of Citizens; formerly
Deputy Superintendent of the
Ohio Division of Financial
Institutions; formerly Chief
Operating Officer of First
Bancorporation
Patrick A. Kennedy 52 President and Chief Executive 1981
Officer of Mid Am Bank; formerly
Executive Vice President/Lending
of Mid Am Bank; formerly Senior
Vice President/Lending of
First National
* Includes period in which executive officer was an officer of a subsidiary or
acquired company.
Item 11. EXECUTIVE COMPENSATION
The information contained under the captions "COMPENSATION COMMITTEE REPORT
ON EXECUTIVE COMPENSATION" and "EXECUTIVE COMPENSATION" on pages 8 through 17
of the Company's 1999 Proxy Statement filed with the Securities and Exchange
Commission on March 10, 1999, is incorporated herein by reference in response
to this item.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
The information contained under the captions "ELECTION OF DIRECTORS" on pages
1 through 4, "BENEFICIAL OWNERSHIP OF THE COMPANY'S COMMON STOCK" on pages 6
through 8 and "EXECUTIVE COMPENSATION" on pages 12 through 17 of the Company's
1999 Proxy Statement filed with the Securities and Exchange Commission on
March 10, 1999, is incorporated herein by reference in response to this item.
The Company has no knowledge of any person or any group (as defined in Section
13.d.3 of the Securities Exchange Act of 1934) which owns in excess of five
percent of the outstanding common stock of the Company.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information contained under the caption "CERTAIN TRANSACTIONS" on page
17 of the Company's 1999 Proxy Statement filed with the Securities and
Exchange Commission on March 10, 1999, is incorporated herein by reference in
response to this item.
11
12
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
Page in 1998 Annual
Report Supplement*
(1) Financial Statements:
Report of Independent Auditors .................. S-25
Consolidated Balance Sheets at
December 31, 1998 and 1997 .................... S-26
Consolidated Statements of Income for
the three years ended December 31, 1998 ....... S-27
Consolidated Statements of Changes in
Shareholders' Equity for the three years
ended December 31, 1998 ....................... S-28
Consolidated Statements of Comprehensive Income
for the three years ended December 31, 1998 ... S-29
Consolidated Statements of Cash Flows for
the three years ended December 31, 1998 ....... S-30
Notes to Consolidated Financial Statements ...... S-31-56
* Incorporated by reference from the indicated pages of the 1998 Annual Report
Supplement. All schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.
The following Exhibits required by Item 601 of Regulation S-K are filed as part
of this report:
Exhibit
Number Exhibit
2.1 Agreement and Plan of Merger dated as of December 14, 1998 by and between
Sky Financial Group, Inc. and First Western Bancorp, Inc.
2.2 Agreement and Plan of Merger dated as of December 16, 1998 by and between
Sky Financial Group, Inc, and Wood Bancorp, Inc.
3.1 Company's Fifth Amended Articles of Incorporation
3.2 Amendment to the Fifth Amended Articles of Incorporation of the Company
3.3 Company's Code of Regulations, as amended
3.4 Amendment to the Code of Regulations of the Company
4.1 Shareholder Rights Agreement dated as of July 21, 1998, between the
Company and The Citizens Banking Company, as Rights Agent
10.1 The Company's Amended and Restated 1998 Stock Option Plan for Nonemployee
Directors
10.2 The Company's 1998 Stock Option Plan for Employees
10.3 Sky Financial Group, Inc. Non-Qualified Retirement Plan
10.4 Stock Option Agreement effective as of December 15, 1998, by and between
Sky Financial Group, Inc. and First Western Bancorp, Inc.
10.5 Stock Option Agreement dated as of December 16, 1998, by and between Sky
Financial Group, Inc. and Wood Bancorp, Inc.
10.6 Form of Indemnification Agreement between the Company and individual
directors, certain officers and representatives.
12
13
10.7 Employment Agreement between the Company and David R. Francisco
10.8 Employment Agreement between the Company and Marty E. Adams
10.9 Letter agreement between the Company and Jack W. Donaldson dated December
22, 1998.
10.10 Employment Agreement by and among the Company, The Citizens Banking
Company, Century National Bank and Trust Company and Joseph N. Tosh,
II
10.11 Agreement by and among the Company, The Citizens Banking Company and
Frank J. Koch.
10.12 Form of Change in Control Agreement between the Company and certain
officers of the Company.
11.1 Statement Re: Computation of Per Share Earnings
13 The Company's 1998 Annual Report Supplement
18.0 Change in Accounting Principle
20.1 The Company's Proxy Statement dated March 19, 1999 for its 1999 Annual
Meeting
21.1 Subsidiaries of the Company
23.1 Consent of Independent Auditors
24.1 Power of Attorney
27.1 Financial Data Schedule (1998)
27.2 Financial Data Schedule (1997)
27.3 Financial Data Schedule (1996)
(b) Reports on Form 8-K
On October 15, 1998, the Company filed a current report on Form 8-K regarding
the October 2, 1998 consummation of the merger of Mid Am, Inc. into Citizens
Bancshares, Inc., the change of Bancshares' name to Sky Financial Group, Inc.
and the reporting of financial statements and related information giving
effect to the merger.
On October 16, 1998, the Company filed a current report on Form 8-K regarding
the October 2, 1998 consummation of the merger of Mid Am, Inc. into Citizens
Bancshares, Inc., and the reauthorization by the Board of Directors of the
Company's common stock repurchase plan.
On December 14, 1998, the Company filed a current report on Form 8-K regarding
the announcement of the Company and First Western Bancorp, Inc. signing a
definitive agreement to merge.
On December 21, 1998, the Company filed a current report on Form 8-K regarding
the December 4, 1998 completion of its affiliation of The Ohio Bank.
On December 28, 1998, the Company filed a current report on Form 8-K regarding
the December 17, 1998 announcement of the Company and Wood Bancorp, Inc.
signing a definitive agreement to merge.
13
14
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 its
behalf by the undersigned, thereunto duly authorized.
SKY FINANCIAL GROUP, INC.
BY: /s/ Kevin T. Thompson
Kevin T. Thompson
Executive Vice President and
Chief Financial Officer
March 15, 1999
Pursuant to the requirement 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 and on the date indicated.
Signatures
David R. Francisco Director/Chairman/C.E.O.
*
Marty E. Adams Director/President/C.O.O. March 1, 1999
Kevin T. Thompson Exec. Vice Pres./C.F.O.
*
Gerald D. Aller Director March 1, 1999
*
David A. Bryan Director March 1, 1999
*
Keith D. Burgett Director March 1, 1999
*
George N. Chandler, II Director March 1, 1999
*
Willard L. Davis Director March 1, 1999
*
Del E. Goedeker Director March 1, 1999
*
D. James Hilliker Director March 1, 1999
*
Richard R. Hollington, Jr. Director March 1, 1999
14
15
*
Fred H. Johnson, III Director March 1, 1999
*
H. Lee Kinney Director March 1, 1999
*
Marilyn O. McAlear Director March 1, 1999
*
James C. McBane Director March 1, 1999
*
Kenneth E. McConnell Director March 1, 1999
*
Gerard P. Mastroianni Director March 1, 1999
*
Thomas S. Noneman Director March 1, 1999
*
Edward J. Reiter Director March 1, 1999
*
Patrick W. Rooney Director March 1, 1999
*
Emerson J. Ross,Jr. Director March 1, 1999
*
Douglas J. Shierson Director March 1, 1999
*
C. Gregory Spangler Director March 1, 1999
*
Robert E. Stearns Director March 1, 1999
*
Glenn F. Thorne Director March 1, 1999
*
Joseph N. Tosh, II Director March 1, 1999
* The undersigned attorney-in-fact, by signing his name below, does hereby
sign this Report on Form 10-K on behalf of the above-named officers and
directors pursuant to a power of attorney executed by such persons and filed
with the Securities and Exchange Commission contemporaneously herewith.
BY: /s/ Kevin T. Thompson
Kevin T. Thompson
Attorney-In-Fact
15
16
FORM 10-K
EXHIBIT INDEX
Exhibit
Number Exhibit
2.1 Agreement and Plan of Merger dated as of December 14, 1998 by and
between Sky Financial Group, Inc. and First Western Bancorp, Inc.
(incorporated by reference to Exhibit 2 to the Form 8-K of the
Company filed with the Securities and Exchange Commission as of
December 14, 1998).
2.2 Agreement and Plan of Merger dated as of December 16, 1998 by and
between Sky Financial Group, Inc. and Wood Bancorp, Inc.
(incorporated by reference to Exhibit 2 to the Form 8-K of the
Company filed with the Securities and Exchange Commission as of
December 28, 1998).
3.1 Company's Fifth Amended Articles of Incorporation
(incorporated by reference to Exhibit 3.1 of Form S-4 Registration
Statement No. 333-60741 of the Company).
3.2 Amendment to the Fifth Amended Articles of Incorporation of the
Company (incorporated by reference to Appendix B of the Joint
Proxy Statement/Prospectus in Form S-4 Registration Statement
No. 333-60741 of the Company).
3.3 Company's Code of Regulations, as amended
(incorporated by reference to Exhibit 3(2) of Form S-4 Registration
Statement No. 0-18209 of the Company).
3.4 Amendment to the Code of Regulations of the Company
(incorporated by reference to Appendix C of the Joint Proxy
Statement/Prospectus in Form S-4 Registration Statement
No. 333-60741 of the Company).
4.1 Shareholder Rights Agreement dated as of July 21, 1998, between the
Company and The Citizens Banking Company, as Rights Agent
(incorporated by reference to Exhibit 4 of Form S-4 Registration
Statement No. 333-60741 of the Company).
10.1 The Company's Amended and Restated 1998 Stock Option Plan for
Nonemployee Directors
(incorporated by reference to Appendix G of the Joint Proxy
Statement/Prospectus in Form S-4 Registration Statement
No. 333-60741 of the Company).
10.2 The Company's 1998 Stock Option Plan for Employees
(incorporated by reference to Appendix H of the Joint Proxy
Statement/Prospectus in Form S-4 Registration Statement
No. 333-60741 of the Company).
10.3 Sky Financial Group, Inc. Non-Qualified Retirement Plan
(As Amended and Restated Effective January 1, 1999).
10.4 Stock Option Agreement effective as of December 15, 1998, by and
between Sky Financial Group, Inc. and First Western Bancorp, Inc.
(incorporated by reference to Exhibit 99 of Schedule 13D filed
by the Company as of December 24, 1998).
10.5 Stock Option Agreement dated as of December 16, 1998, by and
between Sky Financial Group, Inc. and Wood Bancorp, Inc.
(incorporated by reference to Exhibit B of Schedule 13D filed
by the Company as of December 28, 1998).
16
17
Exhibit Index (continued)
10.6 Form of Indemnification Agreement between the Company and
individual directors, certain officers and representatives.
10.7 Employment Agreement between the Company and David R. Francisco
(incorporated by reference to Exhibit 10.2 of Form S-4
Registration Statement No. 333-60741 of the Company).
10.8 Employment Agreement between the Company and Marty E. Adams
(incorporated by reference to Exhibit 10.3 of Form S-4
Registration Statement No. 333-60741 of the Company).
10.9 Letter agreement between the Company and Jack W. Donaldson dated
December 22, 1998.
10.10 Employment Agreement by and among the Company, The Citizens Banking
Company, Century National Bank and Trust Company and
Joseph N. Tosh, II
(incorporated by reference to Exhibit 10(18) of the Form 10-Q
of the Company for the quarter ended June 30, 1998).
10.11 Agreement by and among the Company, The Citizens Banking Company
and Frank J. Koch.
10.12 Form of Change in Control Agreement between the Company and certain
officers of the Company.
11.1 Statement Re: Computation of Per Share Earnings
(incorporated by reference from the information contained in
Note 10 "Earnings Per Share" on page S-44 of the Company's
1998 Annual Report Supplement). See Exhibit 13.1
13 The Company's 1998 Annual Report Supplement
(except for the portions of the report expressly incorporated
by reference, the report is furnished solely for the information
of the Commission and is not deemed "filed" as part hereof).
18.0 Change in Accounting Principle
(incorporated by reference from the information contained in
Note 1 "Summary of Significant Accounting Policies" on
pages S-31 through S-35 of the Company's 1998 Annual Report
Supplement). See Exhibit 13.1
20.1 The Company's Proxy Statement for its 1999 Annual Meeting
(incorporated by reference from the information contained in
the Company's 1999 Proxy Statement filed with the Securities
and Exchange Commission on March 10, 1999).
21.1 Subsidiaries of the Company
23.1 Consent of Independent Accountants
24.1 Power of Attorney
27.1 Financial Data Schedule (1998)
27.2 Financial Data Schedule (1997)
27.3 Financial Data Schedule (1996)
17