SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): APRIL 3, 2002
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NATIONAL BANCSHARES CORPORATION
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(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO 0-14773 34-1518564
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(STATE OR OTHER JURISDICTION (COMMISSION (I.R.S. EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
112 W. MARKET STREET, ORRVILLE, OHIO 44667
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(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (330) 682-1010
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N/A
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(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
This Current Report on Form 8-K/A amends Item 7 of the Current Report on
Form 8-K dated April 3, 2002, which was filed on April 12, 2002, to
include financial statements and pro forma financial information
required by Item 7 of Form 8-K. This Form 8-K/A relates to National
Bancshares Corporation's acquisition of Peoples Financial Corporation,
which became effective as of the close of business on April 3, 2002.
Item 2. Acquisition or Disposition of Assets
On April 3, 2002, pursuant to the terms and conditions of the Agreement
and Plan of Merger, dated as of October 2, 2001 (the "Merger Agreement"),
between National Bancshares Corporation and Peoples Financial Corporation,
Peoples Financial Corporation merged with and into National Bancshares
Corporation (the "Merger"). As a result of the Merger, each share of Peoples
Financial Corporation common stock was converted into the right to receive
$12.25 in cash. Peoples Financial Corporation's thrift subsidiary, Peoples
Federal Savings and Loan Association of Massillon, also merged with and into
First National Bank, National Bancshares Corporation's bank subsidiary.
A copy of the news release announcing the completion of the Merger is
attached hereto as Exhibit 99.1 and is incorporated into this Item 2 by
reference.
Item 7. Financial Statements, Pro Forma Financial Information
(a) Financial Statements of Business Acquired:
Audited consolidated statements of financial condition of Peoples
Financial Corporation as of September 30, 2001 and 2000, and the related
consolidated statements of earnings, comprehensive income, shareholders'
equity, and cash flows for each of the three years in the period ended
September 30, 2001, and notes to the audited consolidated financial
statements (incorporated by reference to Peoples Financial Corporation's
Form 10-KSB Annual Report for the Year Ended September 30, 2001, SEC
File No. 0-28838)
(b) Pro Forma Financial Information:
Unaudited pro forma statement of financial condition of National
Bancshares Corporation as of December 31, 2001, assuming the merger with
Peoples Financial Corporation was completed at that date, and the
unaudited pro forma statement of operations for the twelve months ended
December 31, 2001, assuming the merger with Peoples Financial
Corporation was completed at the beginning of the year then ended, and
notes to the unaudited pro forma financial information (filed herewith).
(c) Exhibits:
2.1 The Merger Agreement (incorporated by reference to Exhibit 2.1 to
National Bancshares Corporation's Form 8-K dated October 2, 2001,
SEC File No. 0-14773).
23.1 Consent of Crowe, Chizek and Company LLP (filed herewith)
23.2 Consent of Grant Thornton LLP (filed herewith)
99.1 Press release issued April 3, 2002 announcing completion of
the Merger. (previously filed)
2
NATIONAL BANCSHARES CORPORATION
PRO-FORMA STATEMENT OF FINANCIAL CONDITION
December 31, 2001
(dollars in thousands)
Historical
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National Peoples Pro-forma
ASSETS Bancshares Financial Adjustments Notes Consolidated
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Cash and due from banks $6,935 $267 ($1,793) (1) $5,206
(203) (1)
Interest-bearing deposits with other banks 11,522 11,522
Federal funds sold 3,325 --- (3,325) (1) ---
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Total cash and cash equivalents 10,260 11,789 (5,321) 16,728
Interest-bearing time deposits with other banks 1,994 --- 1,994
Investment securities:
Available for sale 47,509 4,792 (247) (2) 52,054
Held to maturity 13,334 2,437 15,771
Federal bank stock 1,027 1,135 2,162
Loans, net 116,881 84,084 1,497 (2) 202,462
Accrued interest receivable 1,219 342 1,561
Premises and equipment, net 2,975 1,521 260 (2) 4,801
45 (2)
Other assets 2,564 38 4,262 (1) 7,927
1,063 (2)
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TOTAL $197,763 $106,138 $1,559 $305,460
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LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits $159,519 $75,983 $1,186 (2) $236,688
Securities sold under repurchase agreements 3,423 --- 3,423
Federal reserve note account 111 --- 111
Federal Home Loan Bank advances 2,208 19,000 10,000 (1) (4) 31,619
411 (2)
Accrued expenses and other liabilities 1,580 770 347 (2) 2,697
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Total liabilities 166,841 95,753 11,944 274,538
Shareholders' Equity:
Common stock 11,448 --- 11,448
Additional paid-in-capital 4,690 7,360 (7,360) (1) 4,690
Accumulated other comprehensive income 784 179 (179) (1) 784
Retained earnings 15,621 6,224 (6,224) (1) 15,621
Less treasury shares (1,621) (3,378) 3,378 (1) (1,621)
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Total shareholders' equity 30,922 10,385 (10,385) 30,922
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TOTAL $197,763 $106,138 $1,559 $305,460
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NATIONAL BANCSHARES CORPORATION
PRO-FORMA STATEMENT OF OPERATIONS
FOR THE TWELVE MONTHS ENDING DECEMBER 31, 2001
(dollars in thousands, except per share data)
Historical
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National Peoples Pro-forma
Bancshares Financial Adjustments Notes Consolidated
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INTEREST AND DIVIDEND INCOME:
Loans, including fees $9,037 $6,870 ($374) (3) $15,533
Federal funds sold 353 --- 353
Securities:
Taxable 3,161 666 55 (3) 3,882
Nontaxable 1,005 53 1,058
Interest-bearing deposits with other banks 55 55
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Total interest and dividend income 13,556 7,644 (319) 20,881
INTEREST EXPENSE:
Deposits 4,678 3,848 (791) (3) 7,735
Short-term borrowings 98 --- 98
Federal Home Loan Bank advances 178 1,122 (274) (3) 1,026
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Total interest expense 4,954 4,970 (1,065) 8,859
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NET INTEREST INCOME 8,602 2,674 746 12,022
PROVISION FOR LOAN LOSSES 40 12 52
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NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 8,562 2,662 746 11,970
NONINTEREST INCOME
Checking account fees 656 --- 656
Gain on sale of loans 44 10 54
Securities gains, net 97 346 443
Other 348 155 503
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Total noninterest income 1,145 511 0 1,656
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NONINTEREST EXPENSE
Salaries and employee benefits 3,517 1,195 4,712
Data processing fees 628 151 779
Net occupancy expense 217 185 16 (3) 418
Depreciation - furniture and fixtures 238 82 320
Franchise taxes 315 140 455
Maintenance and repairs 197 93 290
Amortization - core deposit intangible --- --- 128 (3) 128
Other 1,291 601 1,892
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Total noninterest expense 6,403 2,447 144 8,994
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INCOME BEFORE INCOME TAXES 3,304 726 602 4,632
INCOME TAX EXPENSE 777 257 205 1,239
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NET INCOME $2,527 $469 $397 $3,393
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WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 2,230 1,234 2,230
BASIC AND DILUTED EARNINGS PER COMMON SHARE $1.13 $0.38 $1.52
NATIONAL BANCSHARES CORPORATION
NOTES TO UNAUDITED PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands, except per share data)
BASIS OF PRESENTATION:
The following pro-forma adjustments are based on available information and
certain estimates and assumptions. Therefore, it is likely that the actual
adjustments will differ from the pro-forma adjustments. National Bancshares
believes that such assumptions provide a reasonable basis for presenting all of
the significant effects of the following transactions and that the pro-forma
adjustments give appropriate effect to those assumptions and are properly
applied in the unaudited pro-forma consolidated financial statements.
ADJUSTMENTS TO PRO-FORMA CONSOLIDATED FINANCIAL STATEMENTS
(1) Represents the acquisition for a total purchase price of $15,118. The
acquisition, which was paid in cash, is summarized as follows:
Total cash paid to Peoples Financial's shareholders $15,118
Peoples Financial shareholders' equity (10,385)
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Acquisition cost in excess of book value 4,733
Adjustments to reflect fair value (see (2) below) (674)
Merger related expenses 203
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Total goodwill 4,262
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(2) Represents adjustments to reflect fair values of assets and liabilities as
follows:
Buildings 260
Equipment 45
Loans, net 1,497
Securities (247)
Deposits (1,186)
Core deposit intangible 1,063
FHLB advances (411)
Deferred tax impact of purchase accounting adjustments (347)
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Total fair value adjustments 674
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(3) Represents the amortization of the purchase accounting adjustments over
the following periods:
Weighted
Average Amortization
Life Method
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Buildings 39 years straight line
Equipment 5 years straight line
Loans, net 7 years level yield
Securities 8 years level yield
Deposits 2 years level yield
Core deposit intangible 10 years accelerated
FHLB advances 2 years level yield
(4) FHLB advances of $10 million were borrowed for one day to help fund the
transaction, then repaid with interest-bearing deposits with other banks.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undesigned hereunto duly authorized.
NATIONAL BANCSHARES CORPORATION
Date: May 14, 2002 By: / s / Charles J. Dolezal
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Charles J. Dolezal
President and Chief Executive Officer
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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2.1 The Merger Agreement (incorporated by reference to Exhibit 2.1
of National Bancshares Corporation's Form 8-K dated October 2,
2001).
23.1 Consent of Crowe, Chizek and Company LLP (filed herewith)
23.2 Consent of Grant Thornton LLP (filed herewith)
99.1 Press Release dated April 3, 2002, announcing completion of the
Merger (contained in the Form 8-K filed on April 12, 2002).
4