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 (FEE REQUIRED)
For the fiscal year ended December 31, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED)
For the transition period from _________ to ________
Commission file number: 0-13161
FIRST-KNOX BANC CORP.
Incorporated - Ohio I.R.S. Identification
Number-31-1121049
One South Main Street
P. O. Box 871
Mount Vernon, Ohio 43050
Telephone: (614) 393-5500
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $3.125 Per Share
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 [X].
The aggregate market value of the voting stock held by non-affiliates of the
registrant as of March 13, 1996: $71,876,973
Common Stock Par Value: $3.125 per share
Common shares outstanding at March 13, 1996: 3,560,262 shares
DOCUMENTS INCORPORATED BY REFERENCE:
Portions of Registrant's Annual Report to Shareholders for the fiscal year ended
December 31, 1995, and Definitive Proxy Statement dated March 1, 1996, are
incorporated by reference into Parts I, II and III.
Page 1 of 96 Pages
Exhibit Index Appears on Page 20
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PART I
ITEM 1. BUSINESS
Introduction
First-Knox Banc Corp. (the "Corporation") was incorporated under the laws of the
State of Ohio on July 27, 1984. Its principal business is to act as a bank
holding company for its wholly-owned subsidiaries, The First-Knox National Bank
of Mount Vernon ("First-Knox") and The Farmers & Savings Bank, Loudonville, Ohio
("Farmers" and collectively with First-Knox, the "Banks"). Reference is made to
the Statistical Disclosures included elsewhere herein and Item 8., of this Form
10-K for financial information about the Corporation's banking business.
Revenues from loans accounted for 71.7% in 1995, 71.4% in 1994 and 73.9% in 1993
of total consolidated revenues. Revenues from investments and mortgage-backed
securities accounted for 19.9% in 1995, 20.6% in 1994 and 18.1% in 1993 of total
consolidated revenues.
The business of the Corporation and its subsidiaries is not seasonal to any
significant degree, nor is it dependent upon a single or small group of
customers. The Corporation and its subsidiaries do not have any banking offices
located in a foreign country nor do they have any foreign assets, liabilities or
income. In the opinion of management, the Corporation does not have exposure to
material costs associated with environmental hazardous waste clean-up.
First-Knox Business
The First-Knox National Bank of Mount Vernon, a successor by various
reorganizations to Knox County Bank, which was chartered in Ohio in 1847, has
been a national banking association under its present name in Mount Vernon,
Ohio, since 1939.
In terms of total assets, loans and deposits within its primary market area of
Knox, Morrow, Richland and Holmes counties in Ohio, First-Knox is the largest of
fifteen banks and bank offices and six savings associations and credit unions.
At December 31, 1995, First-Knox had assets of $441.8 million, loans and leases
of $291.4 million, and deposits of $356.3 million.
First-Knox is a full service commercial bank providing checking accounts,
savings accounts, certificates of deposit, commercial loans, installment loans,
credit card loans, commercial and residential real estate mortgage loans,
vehicle and equipment leasing, corporate and personal trust services, discount
brokerage services, and safe deposit rental facilities. Services are provided
through walk-in offices, automated teller machines, and automobile drive-in
facilities.
Five of First-Knox's ten offices are located in Knox County, Ohio. First- Knox's
Main Office and one full service branch office are located in Mount Vernon, one
branch is located in Fredericktown, one branch is located in
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Danville, and one branch is located in Centerburg, each providing walk-in,
drive-through and automated teller machine facilities.
Full service branches providing walk-in, drive-through and automated teller
machine facilities are located in Millersburg (Holmes County), as well as the
Richland County communities of Lexington and Bellville.
Two branches are located in Mount Gilead (Morrow County), Ohio, one a full
service branch providing walk-in services and one a full service branch
providing walk-in, drive-through and automated teller machine facilities.
First-Knox faces strong competition from other banks, savings associations,
credit unions, insurance companies, securities brokers, and retailers offering
financial services.
At December 31, 1995, First-Knox had 182 full-time and 58 part-time employees.
First-Knox is not a party to any collective bargaining agreement. Management
considers its relationship with its employees to be good.
First-Knox accounts for approximately 89% of the Corporation's consolidated
assets.
Farmers Business
The Farmers & Savings Bank, Loudonville, Ohio, was chartered as an Ohio
corporation in 1905 and has operated under its present name in Loudonville,
Ohio, since 1930. At December 31, 1995, Farmers had assets of $54.9 million,
loans of $39.2 million, and deposits of $49.7 million. Within the Loudonville
banking market, Farmers faces competition from one commercial bank branch and
one savings and loan branch. Farmers is the largest of the three institutions in
terms of deposits.
Farmers is a full service commercial bank providing checking accounts, savings
accounts, certificates of deposit, commercial loans, installment loans,
commercial and residential mortgage loans, and safe deposit rental facilities.
Services are provided through walk-in offices, automobile drive through
facilities, and an automated teller machine.
At December 31, 1995, Farmers had 29 full-time and 15 part-time employees.
Farmers is not a party to any collective bargaining agreement. Management
considers its relationship with its employees to be good.
Farmers accounts for approximately 11% of the Corporation's assets. In addition
to the above information, a further description of First-Knox and Farmers is
contained in the Financial Review section (page 35) of the Annual Report to
Shareholders for the fiscal year ended December 31, 1995 ("the 1995 Annual
Report") included as Exhibit 13 hereto and incorporated herein by reference.
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Supervision and Regulation
The following is a summary of certain statutes and regulations affecting the
Corporation and its subsidiaries. The summary is qualified in its entirety by
reference to the statutes and regulations. Management is not aware of any
current recommendations by regulatory authorities which, if they were
implemented, would have a material effect on the Corporation.
The Corporation
The Corporation is a bank holding company under the Bank Holding Company Act of
1956, as amended, which restricts the activities of the Corporation and the
acquisition by the Corporation of voting stock or assets of any bank, savings
association or other company. The Corporation is also subject to the reporting
requirements of, and examination and regulation by, the Board of Governors of
the Federal Reserve system ("Federal Reserve Board"). Subsidiary banks of a bank
holding company are subject to certain restrictions imposed by the Federal
Reserve Act on transactions with affiliates, including any loans or extensions
of credit to the bank holding company or any of its subsidiaries, investments in
the stock or other securities thereof and the taking of such stock or securities
as collateral for loans to any borrower; the issuance of guarantees, acceptances
or letters of credit on behalf of the bank holding company and its subsidiaries;
purchases or sales of securities or other assets; and the payment of money or
furnishing of services to the bank holding company and other subsidiaries. A
bank holding company and its subsidiaries are prohibited from engaging in
certain tie-in arrangements in connection with extensions of credit or provision
of property or services.
Bank holding companies are prohibited from acquiring direct or indirect control
of more than 5% of any class of voting stock or substantially all of the assets
of any bank holding company without the prior approval of the Federal Reserve
Board. In addition, acquisitions across state lines are limited to acquiring
banks in those states specifically authorizing such interstate acquisitions.
However, since September 1995, federal law has permitted interstate acquisitions
of banks, if the bank acquired retains its separate charter.
Banks
As a national bank, First-Knox is supervised and regulated by the Comptroller of
the Currency ("Comptroller"). As an Ohio chartered bank, Farmers is supervised
and regulated by the Ohio Division of Financial Institutions and the Federal
Deposit Insurance Corporation ("FDIC"). The deposits of First- Knox and Farmers
are insured by the FDIC and both entities are subject to the applicable
provisions of the Federal Deposit Insurance Act. A subsidiary of a bank holding
company can be liable to reimburse the FDIC if the FDIC incurs or anticipates a
loss because of a default of another FDIC-insured subsidiary of the bank holding
company or in conjunction with FDIC assistance provided to such subsidiary in
danger of default. In addition, the holding company of any insured financial
institution that submits a capital plan under the federal banking agencies'
regulations on prompt corrective action guarantees a portion of the
institution's capital shortfall, as discussed below.
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Various requirements and restrictions under the laws of the United States and
the State of Ohio affect the operations of the Banks, including requirements to
maintain reserves against deposits, restrictions on the nature and amount of
loans which may be made and the interest which may be charged thereon,
restrictions relating to investments and other activities, limitation on credit
exposure to correspondent banks, limitations based on capital and surplus,
limitations on payment of dividends, and limitations on branching. Under current
law, the Banks may establish branch offices throughout the State of Ohio.
Pursuant to recent federal legislation, First-Knox may branch across state
lines, if permitted by the law of the other state. In addition, effective June
1997, such interstate branching will be authorized, unless the law of the other
state specifically prohibits the interstate branching authority granted by
federal law.
The Federal Reserve Board has adopted risk-based capital guidelines for bank
holding companies and for state member banks. The risk-based capital guidelines
include both a definition of capital and a framework for calculating
risk-weighted assets by assigning assets and off-balance sheet items to broad
risk categories. The required minimum ratio of capital to risk-weighted assets
(including certain off-balance sheet items, such as stand-by letters of credit)
was 8.0% at December 31, 1995, as disclosed in Note 14 (page 30) of the
Corporations's 1995 Annual Report (See Exhibit 13). At least half of the total
regulatory capital is to be comprised of common stockholders' equity, including
retained earnings, non-cumulative perpetual preferred stock, a limited amount of
cumulative perpetual preferred stock, and minority interests in equity accounts
of consolidated subsidiaries less goodwill ("Tier 1 capital"). The remainder
("Tier 2 capital") may consist of, among other things, mandatory convertible
debt securities, a limited amount of subordinated debt, other preferred stock
and a limited amount of allowance for loan and lease losses. The Federal Reserve
Board has also imposed a minimum leverage ratio (Tier 1 capital to total assets)
of 4% for bank holding companies and state member banks that meet certain
specified conditions, including no operational, financial or supervisory
deficiencies, and including those having the highest regulatory (CAMEL) rating.
The minimum leverage ratio is 1.0-2.0% higher for other holding companies and
state member banks based on their particular circumstances and risk profiles and
those experiencing or anticipating significant growth. National banks are
subject to similar capital requirements adopted by the Comptroller and state
non-member banks are subject to similar capital requirements adopted by the FDIC
and the Ohio Division of Financial Institutions.
The Corporation and its subsidiaries currently satisfy all regulatory capital
requirements. Failure to meet the capital guidelines could subject a banking
institution to a variety of enforcement remedies available to federal regulatory
authorities, including dividend restrictions and the termination of deposit
insurance by the FDIC.
Under an outstanding proposal of the Comptroller and the FDIC, the subsidiaries
may be required to have additional capital if their interest rate risk exposure
exceeds acceptable levels provided for in the regulation when adopted. In
addition, the federal banking regulators have established regulations governing
prompt corrective action to resolve capital deficient
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banks. Under these regulations, banks which become undercapitalized become
subject to mandatory regulatory scrutiny and limitations, which increase as
capital continues to decrease. Such banks are also required to file capital
plans with their primary federal regulator, and their holding companies must
guarantee the capital shortfall up to 5% of the assets of the capital deficient
bank at the time it becomes undercapitalized.
Dividend Regulation
The ability of the Corporation to obtain funds for the payment of dividends and
for other cash requirements is largely dependent on the amount of dividends
which may be declared by its subsidiary banks. However, the Federal Reserve
Board expects the Corporation to serve as a source of strength to the
subsidiaries, which may require it to retain capital for further investment in
the subsidiaries, rather than for dividends for shareholders of the Corporation.
Generally, First-Knox and Farmers must have the approval of their respective
regulatory authorities if a dividend in any year would cause the total dividends
for that year to exceed the sum of the current year's net profits and the
retained net profits for the preceding two years, less required transfers to
surplus. A national bank may not pay a dividend in an amount greater than its
net profits then on hand, after deducting its losses and bad debts. In addition,
if the surplus fund of the national bank is less than or equal to its common
capital, no dividends may be declared unless there has been carried to the
surplus fund not less than one-tenth part of the national bank's net profits of
the preceding half-year in the case of quarterly or semiannual dividends, or not
less than one-tenth part of its net profits of the preceding two consecutive
half-year periods in the case of an annual dividend. The Banks may not pay
dividends to the Corporation if, after such payment, they would fail to meet the
required minimum levels under the risk-based capital guidelines and the minimum
leverage ratio requirements. Payment of dividends by the Banks may be restricted
at any time at the discretion of the regulatory authorities, if they deem such
dividends to constitute an unsafe and/or unsound banking practice or if
necessary to maintain adequate capital for the Banks. See Exhibit 13, 1995
Annual Report page 2, Comparative Stock Data and page 30, Note 14 and Item 5.,
which are herein incorporated by reference.
Monetary Policy and Economic Conditions
The commercial banking business is affected not only by general economic
conditions, but also by the policies of various governmental regulatory
authorities and, in particular, the Federal Reserve Board. It regulates money
and credit conditions and interest rates in order to influence general economic
conditions primarily through open market operations in U.S. Government
securities, varying the discount rate on member bank borrowings and setting
reserve requirements against bank deposits. These policies and regulations
significantly affect the overall growth and distribution of bank loans,
investments and deposits, and the interest rates charged on loans, as well as
interest rates paid on deposits and accounts.
The monetary policies of the Federal Reserve Board are expected to continue
their substantial influence on the operating results of commercial banks.
Coupled with the changing conditions in the economy and the money market, the
impacts on the performance of the Corporation and the Banks are difficult to
predict.
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Growth Strategy
The Corporation's Board of Directors and management have identified various
corporate, business and financial objectives. One such objective is growth of
the organization through the acquisition of community banks and savings and loan
associations located within the State of Ohio. Benefits of this strategy include
increasing the opportunities for earning asset and core deposit growth,
enhancement of fee based income, and realization of operating economies of
scale. The Corporation intends to seek and pursue acquisition opportunities
which fit these strategic objectives.
STATISTICAL DISCLOSURES
The following section contains financial disclosures as required under Industry
Guide 3, "Statistical Disclosure by Bank Holding Companies." The information
provided should be read in conjunction with the narrative analysis presented in
the Financial Review and Consolidated Financial Statements of the Corporation
and its subsidiaries contained in the 1995 Annual Report.
I. Distribution of Assets, Liabilities and Stockholders' Equity; Interest
Rates and Interest Differential
The average balance sheet information and the related analysis of net
interest income for the years ended December 31, 1995, 1994 and 1993, as
required is included in Table II "Average Balances and Analysis of Net
Interest Income" on page 37 of the Corporation's 1995 Annual Report (See
Exhibit 13) which is herein incorporated by reference.
The analysis of the changes in interest income and expense from 1994 to
1995 and from 1993 to 1994 is included in Table III "Rate and Volume
Analysis of Changes in Interest Income and Interest Expense" on page 38 of
the Corporation's 1995 Annual Report (See Exhibit 13) which is herein
incorporated by reference.
II. Investment Portfolio
A schedule of the carrying value of investment and mortgage-backed
securities and related information on fair values, maturities and average
yields is included in Table IV "Investment and Mortgage-backed Securities"
on page 47 of the Corporation's 1995 Annual Report (See Exhibit 13) which
is herein incorporated by reference.
Excluding obligations of the U.S. Treasury and other agencies and
corporations of the U.S. government, there were no investment or
mortgage-backed securities of any one issuer which exceeded 10% of
consolidated shareholders' equity at December 31, 1995.
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VI. Return on Equity and Assets
The return on assets, return on equity, dividend payout ratio and equity
to assets ratio, for the years ended December 31, 1995, 1994 and 1993, as
required, are included in Table I "Financial Ratios For Five Years" on
page 35 of the Corporation's 1995 Annual Report (See Exhibit 13) which is
herein incorporated by reference.
VII. Short Term Borrowings
The information in item VII is not required to be given because the
average balance for any category of short-term borrowings for 1995, 1994
and 1993 did not exceed 30% of stockholders' equity at the end of those
respective years.
See the following pages for Item III, Loan Portfolio; Item IV, Summary of
Loan Loss Experience; and Item V, Deposits.
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III Loan Portfolio, December 31,
(in thousands) 1995 1994 1993 1992 1991
-------- -------- -------- -------- --------
% of % of % of % of % of
Year End Balances: Balance Total Balance Total Balance Total Balance Total Balance Total
- ------------------ -------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Commercial and Other $ 95,009 28.7% $ 85,971 28.3% $ 93,474 32.1% $ 90,189 32.6% $ 84,875 32.5%
Real Estate (1) 162,495 49.2% 149,018 49.0% 135,287 46.5% 116,861 42.3% 105,234 40.2%
Consumer and Credit Cards 73,137 22.1% 69,179 22.7% 62,147 21.4% 69,387 25.1% 71,445 27.3%
-------- ----- -------- ----- -------- ----- -------- ----- -------- -----
Total Loans & Leases $330,641 100.0% $304,168 100.0% $290,908 100.0% $276,437 100.0% $261,554 100.0%
======== ===== ======== ===== ======== ===== ======== ===== ======== =====
Non-Performing Loans
at December 31: (2),(3) 1995 1994 1993 1992 1991
- ----------------------- -------- -------- -------- -------- --------
Non-Accrual $ 197 $ 805 $ 474 $ 913 $ 1,542
90 Day and Over Past Due 862 457 1,214 884 974
Restructured 1,122 885 934
-------- -------- -------- -------- --------
Total $ 2,181 $ 2,147 $ 2,622 $ 1,797 $ 2,516
======== ======== ======== ======== ========
Maturity Schedule: Within 1 to 5 5 Years
December 31, 1995 1 year Years & Over Total
- ----------------- ------ ------- -------- -----
Commercial & Other-
Fixed Rate $ 5,368 $ 5,324 $ 1,773 $12,465
Adjustable Rate 27,445 16,708 38,391 $82,544
------ ------ ------ -------
Total $32,813 $22,032 $40,164 $95,009
======= ======= ======= =======
Predetermined Adjustable
Commercial & Other Loans Fixed Rates Rates
- ------------------------ ------------- ----------
Maturing After One Year $7,097 $55,099
====== =======
See page 11 for footnote explanations.
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IV Summary of Loan Loss Experience
Loan Loss Experience: 1995 1994 1993 1992 1991
- --------------------- -------- -------- -------- -------- --------
Average Loans $314,259 $298,161 $283,550 $271,345 $254,812
======== ======== ======== ======== ========
Allowance for Loan
Losses, Jan. 1 $ 3,876 $ 3,597 $ 3,162 $ 2,905 $ 2,715
Losses Charged Off:
Commercial and Other 160 182 448 521 312
Real Estate (1) 12 62 53 69
Consumer and Credit Cards 379 447 372 744 593
-------- -------- -------- -------- --------
Total 539 641 882 1,318 974
-------- -------- -------- -------- --------
Recoveries:
Commercial and Other 31 64 38 26 20
Real Estate (1) 6 1 1
Consumer and Credit Cards 214 218 149 154 77
-------- -------- -------- -------- --------
Total 245 282 193 181 98
-------- -------- -------- -------- --------
Net Loan Charge-Offs 294 359 689 1,137 876
Additions Charged
to Operations 584 638 1,124 1,394 1,066
-------- -------- -------- -------- --------
Allowance for Loan Losses
at December 31: $ 4,166 $ 3,876 $ 3,597 $ 3,162 $ 2,905
======== ======== ======== ======== ========
Ratio of Net Charge-Offs
to Average Loan Balances 0.09% 0.12% 0.24% 0.42% 0.34%
======== ======== ======== ======== ========
See page 11 for footnote explanations.
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IV Loan Portfolio - Continued
(in thousands) 1995 1994 1993 1992 1991
------------------ ----------------- ----------------- ------------------ ------------------
% of % of % of % of % of
Loans in Loans in Loans in Loans in Loans in
Each Each Each Each Each
Category Category Category Category Category
Allocation of Allowance for To Total To Total To Total To Total To Total
Loan Losses as of Dec. 31: Balance Loans Balance Loans Balance Loans Balance Loans Balance Loans
- -------------------------- ------- -------- ------- -------- ------- -------- ------- -------- ------- --------
Commercial and Other $ 591 28.7% $ 667 28.3% $ 903 32.1% $1,287 32.6% $1,368 32.5%
Real Estate (1) 151 49.2% 156 49.0% 178 46.5% 261 42.3% 326 40.2%
Consumer and Credit Cards 393 22.1% 472 22.7% 711 21.4% 676 25.1% 773 27.3%
Unallocated 3,031 N/A 2,581 N/A 1,805 N/A 938 N/A 438 N/A
------ ----- ------ ----- ------ ----- ----- ----- ------ -----
Total $4,166 100.0% $3,876 100.0% $3,597 100.0% $3,162 100.0% $2,905 100.0%
====== ===== ====== ===== ====== ===== ====== ===== ====== =====
(1) Real estate construction loans are included in this amount and represent
less than 5% of total real estate loans and less than 3% of total loans and
leases for all years presented. These loans are principally to construct
residential housing.
(2) The accrual of interest on loans and leases is suspended when in
management's opinion, the collection of all or a portion of the interest has
become doubtful. When a loan is placed on nonaccrual status, accrued and unpaid
interest is charged against income. The accrual of interest on loans 90 days
past due will continue until it is determined that collection of all or a
portion of the interest has become doubtful. If all loans were current and
interest had been earned on non-accrual loans, interest income would have
increased approximately $20,000 in 1995.
(3) Restructured loans were less than one percent of non-performing loans at
December 31, 1992 and December 31, 1991.
(4) Potential Problem Loans - At December 31, 1995 there are approximately $8
million of loans which management doubts the borrowers' ability to completely
comply with the present payment terms which are not on non-accrual status as
described in note (2) above. These loans and their potential loss exposure have
been considered in management's analysis of the adequacy of the allowance for
loan losses. Also refer to Note 1 of the consolidated financial statements
regarding the allowance for loan and lease losses on page 16 of the
Corporation's 1995 Annual Report, (See Exhibit 13), which is herein incorporated
by reference.
(5) There were no foreign loans in any period presented.
(6) As of December 31, 1995, there are no concentrations of loans greater than
10% of total loans which are not otherwise disclosed as a category of loans in
the above analysis. Also refer to Note 1 of the consolidated financial
statements regarding concentrations of credit risk on page 16 of the
Corporation's 1995 Annual Report, (Exhibit 13), which is herein incorporated by
reference.
(7) No material amount of loans that have been classified by the regulatory
examiners as loss, substandard, doubtful, or special mention have been excluded
from the amounts disclosed as non-accrual, past due 90 days or more,
restructured or potential problem loans.
(8) For the periods presented, there were no interest bearing assets other than
loans, that were restructured, past-due, placed on non-accrual status or which
management had doubts as to repayment.
(9) Impaired loans were not material at December 31, 1995. Also refer to Note 1
of the consolidated financial statements regarding allowance for loan and lease
losses on pages 16-17 of the Corporation's 1995 Annual Report (Exhibit 13),
which is herein incorporated by reference.
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V Deposits
Time Deposit Maturity Distribution as of December 31, 1995: (In thousands)
- -------------------------------------------------------------------------------
Under 3 - 6 6 - 12 Over 12
3 Mo. Months Months Months Total
------- ------ ------ ------ -------
Time Deposits of $100,000
or More $13,781 $5,387 $7,550 $9,699 $36,417
======= ====== ====== ====== =======
Average Deposits and Interest Expense Analysis: (In thousands)
- ----------------------------------------------------------------------
1995 1994 1993
------------------------- ------------------------- ------------------------
Average Average Average Average Average Average
Balance Rate Balance Rate Balance Rate
-------- ------- ------- ------- -------- -------
Non-Interest Bearing
Demand $ 47,023 $ 44,722 $ 39,877
Interest Bearing Demand 42,216 1.97% 43,249 1.98% 41,677 2.31%
Savings 107,879 2.97% 118,563 2.71% 116,875 2.86%
Time 193,554 5.75% 172,148 4.49% 167,420 4.61%
-------- ------- ------- ------- -------- --------
Total $390,672 $378,682 $365,849
======== ======== ========
There were no material foreign deposits in any period presented.
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ITEM 2. PROPERTIES
First-Knox owns and occupies its headquarters in Mount Vernon, Ohio. Farmers
owns and occupies its headquarters in Loudonville, Ohio. First-Knox owns a
free-standing operations center in Mount Vernon, Ohio. All branch office
locations for both Banks are owned with the exception of the Millersburg branch
of First-Knox where a portion is leased. The Corporation considers its
properties to be satisfactory for current operations. See information under the
heading "First-Knox National Bank Offices" and "Farmers and Savings Bank
Offices" on page 52 of the Corporation's 1995 Annual Report (Exhibit 13), which
is incorporated herein by reference.
ITEM 3. LEGAL PROCEEDINGS
The Corporation had various claims and lawsuits pending at December 31, 1995,
arising out of the ordinary course of its business. It is the opinion of
management that such litigation will not materially affect the Corporation's
financial position or earnings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
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PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS
See: 1995 Annual Report, page 2 - Comparative Stock Data, and page 30 - Note
14, which are incorporated herein by reference (See Exhibit 13).
ITEM 6. SELECTED FINANCIAL DATA
See: 1995 Annual Report, page 35 Table I, "Financial Ratios for Five Years,"
and page 49 Table VI, "Ten Years of Progress Statement Summary," which
is incorporated herein by reference (See Exhibit 13).
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
See: 1995 Annual Report, pages 35 through 49, "Financial Review," which are
incorporated herein by reference (See Exhibit 13).
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements included in the Corporation's 1995 Annual
Report to Shareholders for the fiscal year ended December 31, 1995, and the
report of Crowe, Chizek and Company LLP contained therein are incorporated
herein by reference. See Item 14, index to financial statements and schedules.
The supplementary financial information specified by item 302 of Regulation S-K
is not applicable.
ITEM 9. CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
DISCLOSURES
None
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
Information regarding directors and executive officers also serving as directors
is set forth in the Corporation's Definitive Proxy Statement dated March 1,
1996, pages 3 - 6, which is included as Exhibit 99 hereto and incorporated
herein by reference. No facts exist which would require disclosure under Item
405 for Regulation S-K.
EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth certain information with respect to executive
officers who do not serve as directors:
Position
-------------------------------
First-Knox First-Knox
Name Age Banc Corp. National Bank
---- --- ---------- -------------
Gordon Yance 48 Vice Pres. Vice President and
& Treasurer Chief Financial
Officer
Ian Watson 45 Vice Pres. Vice President of
& Secretary Operations, Deposits
and Investments
Mr. Yance has held these positions for more than five years. Mr. Watson has
held his position with First-Knox National Bank for more than five years. He
was elected Vice President and Secretary of the Corporation in 1991.
ITEM 11. EXECUTIVE COMPENSATION
See: The Corporation's Definitive Proxy Statement dated March 1, 1996, pages
7 - 12, which is included as Exhibit 99 hereto and incorporated herein
by reference. Neither the "Report of Stock Option Committee and
Personnel Committee on Executive Compensation" nor "Comparison of Five
Year Cumulative Total Return Among First-Knox Banc Corp., S&P 500 Index
and KBW 50 Index," on pages 10 - 13, in the Corporation's Definitive
Proxy Statement dated March 1, 1996, shall be deemed to be incorporated
herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
See: The Corporation's Definitive Proxy Statement dated March 1, 1996, pages
2 - 5, which is included as Exhibit 99 hereto and incorporated herein
by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See: The Corporation's 1995 Annual Report (Exhibit 13) page 30, Note 15,
which is incorporated herein by reference and the Corporation's
Definitive Proxy Statement (Exhibit 99) dated March 1, 1996, pages 10 &
14, which is incorporated herein by reference.
Page 15
16
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
First-Knox Banc Corp.
Index to Financial Statements and Schedules
For the Three Years Ended December 31, 1995
------------
(a) The following financial statements are incorporated herein by reference
from the Annual Report to Shareholders filed as Exhibit 13 to this
filing:
Annual Report
First-Knox Banc Corp. and Subsidiaries: Reference
- --------------------------------------- -------------
Report of Independent Auditors Page 34
Consolidated balance sheets - December 31, 1995 & 1994 Page 11
Consolidated statements of income for the years
ended December 31, 1995, 1994, and 1993. Page 12
Consolidated statements of changes in
shareholders' equity for the
years ended December 31, 1995, 1994 and 1993. Page 13
Consolidated statements of cash flows for the
years ended December 31, 1995, 1994 and 1993. Page 14
Notes to the consolidated financial statements Pages 15-33
First-Knox Banc Corp:
- ---------------------
Holding company only financial statements Pages 32-33
Schedules have been omitted since they are either not required or not
applicable, or since the required information is shown in the financial
statements or related notes.
Page 16
17
The following table provides certain information concerning the executive
compensation plans and arrangements required to be filed as exhibits to this
report:
Exhibit
Number Description Location
- ------- ----------- --------
10(a) Summary of Incentive Compensation Incorporated
Plan dated December 9, 1983. herein by
reference to
Exhibit 10(a) to
the Corporation's
Annual Report on
Form 10-K For the
period ending
December 31, 1992
(File No. 0-13161)
("1992 Form 10-K")
10(b) Employees Retirement Plan dated Incorporated
January 1, 1984 herein by
reference to
Exhibit 10(a) to
the Corporation's
Annual Report on
Form 10-K for the
period ending
December 31, 1986
(File No. 0-13161)
("1986 Form 10-K")
10(c) Supplemental Retirement Agreement Incorporated
dated August 11, 1987 herein by
Reference to
Exhibit 10(c) to
the 1992 Form 10-K
10(d) Non-qualified Stock Option and Incorporated
Stock Appreciation Rights Plan herein by
reference to
Exhibit 23 to
the Corporation's
Form 10-K for the
period ending
December 31, 1989
(File No. 0-13161)
(1989 Form 10-K)
Page 17
18
10(e) First-Knox Banc Corp. Savings Incorporated
Retirement Plan herein by
reference to
Exhibit 10(e)
to the
Corporation's
Annual Report on
Form 10-K for the
period ending
December 31, 1993
(File No. 0-13161)
("1993 Form 10-K")
10(g) First-Knox Banc Corp. Stock Option Incorporated
And Stock Appreciation Rights Plan herein by
reference to
exhibit 10(g) to
the March 31, 1995
Form 10-Q
(b) No reports on Form 8-K were filed during the last quarter of the period
covered by this report.
(c) Exhibit List and Index. Page 20
Page 18
19
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.
First-Knox Banc Corp.
(Registrant)
By Carlos E. Watkins March 28, 1996
---------------------------------
Carlos E. Watkins, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed on March 28, 1996, by the following persons on behalf of the
Registrant and in the capacities indicated.
- -s- Russell E. Ramser, Jr. -s- John B. Minor
Chairman of the Board of Director
Directors, and Director
- -s- Carlos E. Watkins -s- James A. McElroy
President & Director Director
- -s- Robert S. Gregg -s- Noel C. Parrish
Director Director
- -s- James J. Cullers -s- George T. Culbertson, Jr.
Director Director
- -s- Kenneth W. Stevenson -s- Maureen Buchwald
Director Director
- -s- Alan E. Riedel -s- Philip H. Jordan, Jr.
Director Director
-s- Gordon E. Yance
Vice President, Treasurer
(chief financial officer
and chief accounting officer)
Page 19
20
EXHIBIT LIST AND INDEX
FIRST-KNOX BANC CORP. FORM 10-K
for the Year Ended December 31, 1995
Exhibit
Number Description Location
- ------- ----------- --------
3(a)(1) Articles of Incorporation, as amended Incorporated herein by
on March 15, 1988. reference to Exhibit
3 to the Corporation's
Annual Report on Form
10-K for the period
ending December 31, 1988
(File No. 0-13161)
("1988 Form 10-K")
3(a)(2) Amendment to Articles of Incorpora- Incorporated herein by
tion, April 10, 1990. reference to Exhibit 3
to the Corporation's
Form 10-K for the period
ending December 31, 1990
(File No. 0-13161)
("1990 Form 10-K")
3(a)(3) Amendment to Articles of Incorpora- Incorporated herein by
tion, March 25, 1992. reference to Exhibit 3
to the Corporation's
Form 10-K for the period
ending December 31, 1991
("1991 Form 10-K")
3(a)(4) Amendment to Articles of Incorpora- Incorporated herein by
tion, March 29, 1994. reference to Exhibit 3
to the Corporation's
Form 10-Q for the period
ending March 31, 1994
3(a)(5) Amendment to the Articles of Incorpora- Incorporated herein by
tion, March 28, 1995. reference to Exhibit 3
to the Corporation's
Form 10-Q for the period
ending March 31, 1995
3(b)(1) Amendment to Code of Regulations Incorporated herein by
March 15, 1988 reference to Exhibit 3
to the 1987 Form 10-K
3(b)(2) Amendment to Code of Regulations Incorporated herein by
March 26, 1991 reference to Exhibit 3 to the
1990 Form 10-K
3(b)(3) Amendment to Code of Regulations Incorporated herein
March 23, 1993 reference to Exhibit 3 to the
1992 Form 10-K
Page 20
21
EXHIBIT LIST AND INDEX
FIRST-KNOX BANC CORP. FORM 10-K
For the Year Ended December 31, 1995
(Continued)
4(b) First-Knox Banc Corp. Dividend Incorporated herein by
Reinvestment Plan the Corporation's
Registration Statement
on Form S-3 (Registration
No. 33-52590)
4(b)1 Amendment to the First-Knox Banc Incorporated herein by
Corp. Dividend Reinvestment Plan reference to exhibit
4(b)1 to the March 31, 1995
Form 10-Q
10(a) Summary of Incentive Compensation Incorporated herein by
Plan dated December 9, 1983. reference to Exhibit 10(a) to
the 1992 Form 10-K
10(b) Employees Retirement Plan dated Incorporated herein by
January 1, 1984. reference to Exhibit 10(a) to
the 1986 Form 10-K
10(c) Supplemental Retirement Agreement Incorporated herein by
dated August 11, 1987. reference to Exhibit 10(C) to
the 1992 Form 10-K
10(d) Non-qualified Stock Option and Incorporated herein by
Stock Appreciation Rights Plan. reference to Exhibit 23 to
the 1989 Form 10-K
10(e) First-Knox Banc Corp. Savings Incorporated herein by
Retirement Plan reference to Exhibit 10(e) to
the 1993 Form 10-K
10(f) Project Services Agreement between Incorporated herein by
First-Knox National Bank and reference to Exhibit 10(f)
Sverdrup Building Corporation to the 1993 Form 10-K
11 Statement regarding computation Page 40 - Note 1 to
of per share earnings. consolidated financial
statements
13 First-Knox Banc Corp. Annual Report Page 23
to Shareholders for the Year Ended
December 31, 1995.
21 Subsidiaries of First-Knox Banc Corp. Page 94
Page 21
22
EXHIBIT LIST AND INDEX
FIRST-KNOX BANC CORP. FORM 10-K
For the Year Ended December 31, 1995
(Continued)
23 Consent of Independent Accountants Page 95
27 Financial Data Schedule Page 96
99 First-Knox Banc Corp. Definitive Proxy Page 77
Statement dated March 1, 1996.
Page 22