1
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 fiscal year ended December 31, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For transition period from to
-------------- --------------
Commission File Number 0-13655
SECURITY BANC CORPORATION
State of Incorporation: Ohio
I.R.S. Employer Identification Number: 31-1133284
40 South Limestone Street
Springfield, Ohio 45502 (513) 324-6800
Securities register pursuant to Section 12 (g) of the Act:
Common Stock, $1.5625 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,
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 (229.405 of this chapter) 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.
Yes X No
--- ---
The aggregate market value of the voting stock held by non-affiliates of the
Registrant was $559,655,550.00 as of January 10, 1999.
The number of shares outstanding of the Registrant's common stock, $1.5625 par
value per share as of January 21, 1999 was 12,166,425 shares.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Annual Shareholder's Report for the year ended December 31, 1998
are incorporated by reference into Parts I and II.
Portions of the Proxy Statement for the Annual Shareholder's Meeting to be held
April 20, 1999 are incorporated by reference into Part III.
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SECURITY BANC CORPORATION AND SUBSIDIARIES
INDEX
Page No.
--------
Part I
Item 1. Business.............................................. 3 thru 17
Item 2. Properties............................................ 18
Item 3. Legal Proceedings..................................... 19
Item 4. Submission of Matters to a Vote of Security Holders... 19
Part II
Item 5. Market for Registrant's Common Equity and Related
Shareholder Matters........................... 19
Item 6. Selected Financial Data............................... 19
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations........... 19
Item 8. Financial Statements and Supplementary Data........... 19
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure........... 19
Part III
Item 10. Directors and Executive Officers of The Registrant.... 20
Item 11. Executive Compensation................................ 20
Item 12. Security Ownership of Certain Beneficial Owners and
Management.................................... 21
Item 13. Certain Relationships and Related Transactions........ 21
Part IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K................................... 21 thru 22
Signatures........................................................... 23
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PART I
ITEM 1. BUSINESS
Security Banc Corp. (Registrant or Company) was organized in 1985 under
the laws of The State of Ohio. The Executive Office of the registrant is
located in Springfield, Ohio. It is a Bank Holding Company as defined in
the Bank Holding Company Act of 1956, as amended, and is registered as
such with the Board of Governors of the Federal Reserve System.
Registrant has three subsidiaries, The Security National Bank and Trust
Co. (Security), Citizens National Bank (Citizens), and Third Savings and
Loan Company, (Third).
The Security National Bank and Trust Co. was organized under the
statutes of The United States as the result of an agreement to merge The
Guardian Bank of Springfield, Ohio, with and into The New Carlisle
National Bank under the title of The Security National Bank. The
agreement to merge was finalized and given approval by the Office of The
Comptroller of the Currency on October 1, 1969. The Bank was granted the
authority to act as a fiduciary as of May 30, 1978, thereby, changing
the name of the Association to "The Security National Bank and Trust
Co." The Bank's main office is located at 40 South Limestone Street,
Springfield, Ohio.
On September 30, 1996, the Company merged with CitNat Bancorp, Inc., a
$140 million bank holding company headquartered in Ohio, in a
transaction accounted for as a pooling of interest.
On October 21, 1996, the Company acquired all of the outstanding shares
of Third Financial Corporation for $41 million. The acquisition was
accounted for using the purchase method of accounting.
Security and Citizens are subject to primary supervision, examination,
and regulation by The Comptroller of the Currency. Third is subject to
primary supervision, examination, and regulation by The Office of Thrift
Supervision. Security and Citizens are members of The Federal Reserve
System and are subject to the applicable provisions of The Federal
Reserve System and are subject to the applicable provisions of the
Federal Reserve Act and Regulations. Deposits of the Company are insured
by The Federal Deposit Insurance Corporation (FDIC) to the maximum
extent permitted by law.
Security was the parent of the Security Community Urban Redevelopment
Corporation. The subsidiary was an Ohio Corporation organized in 1975
and dissolved in 1997. It was organized solely to own Security's main
office building. Presently, Security owns the Main Office building.
All of the Company's banking centers are located in Champaign, Clark,
Fayette, Greene, Madison and Miami Counties in the state of Ohio.
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BUSINESS--CONTINUED
As of December 31, 1998, the Company's consolidated total assets rounded to the
nearest thousand, were $883,500,000 including total loans of $562,005,000. On
that date, total deposits were $708,853,000 and capital accounts totaled
$118,129,000.
The Company's subsidiaries provide full service banking to individuals as well
as to industry and governmental subdivisions through each of its twenty-four
banking centers.
The Company's subsidiaries have made a strong impact on all the counties it
serves through a great variety of services, including personal checking accounts
and savings programs, certificates of deposit, the Money Market accounts, C/D's
and Individual Retirement Accounts.
A broad range of credit programs for all retail customers includes mortgage
loans, credit card banking under the VISA designation, installment loans, and
secured and unsecured personal loans.
The banking services provided to commercial customers and government include
maintenance of demand and time deposit accounts and certificates of deposit.
Available are all types of commercial loans, including loans under lines of
credit and revolving credit, term loans, real estate mortgage loans and other
specialized loans including accounts receivable financing. The Subsidiaries
further serve the requirements of large and small industrial and commercial
enterprises in the Springfield metropolitan area and elsewhere by providing
financial counseling, automated payroll programs, cash management, and other
automated services.
The subsidiaries' Commercial Banking Division is organized to serve the needs of
the corporate customers by handling business and commercial mortgages, corporate
deposits and other corporate financial services.
The Consumer Banking Divisions, which encompasses the Credit Card and
Installment Loan Departments, serves individual as well as corporate customers.
The Residential Mortgage Loan Departments provides conventional as well as
adjustable rate mortgage loans to individuals. Each Subsidiary manages the
investment of funds for their institution using U. S. Government and agency
securities, municipal (tax exempt) securities, as well as Federal Funds and
certificates of deposit of U. S. banks and savings and loans. Each Subsidiary,
in consultation with others, sets the rates on their liability products
including purchased federal funds.
Complete fiduciary services are available to individuals, charitable
institutions, commercial customers and government agencies through Security's
Trust Division. The Personal Trust Department serves as investment agent and
custodian for securities portfolios of individuals, as trustees for living and
testamentary trusts and as executor and administrator of probate estates. The
Corporate Trust Department serves as Trustee for corporate and municipal bond
issues, and as registrar for securities. The Institutional Services Department
provides employee benefit plan fund management for qualified retirement plans
and investment management and securities custody services for not-for-profit
institutions.
There are over a half dozen commercial banks in Springfield, Clark County and
adjoining counties, furnishing general banking services and thus providing
strong competition to the Company. The Company competes for deposits not only
with commercial banks in its area, but also with building and loan associations
and other non-bank competitors, such as brokerage houses. In addition to the
competition described above, the Company competes in various areas of service
offered to individuals, industry and government with Banks in Southwestern Ohio,
many of which possess greater financial resources than the Company.
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BUSINESS--CONTINUED
The earnings of the Company are affected by general economic conditions as well
as, by the monetary policies of the Federal Reserve Board. Such policies, which
have the effect of regulating the national supply of Bank reserves and Bank
credit, can have a major affect upon the source and cost of loanable and
investable funds and the rates of return earned on loans and investments. Among
the means available to the monetary authorities to influence the size and
distribution of Bank reserves are open market operations by the Board of
Governors of the Federal Reserve System, changes in cash reserve requirements
against member bank deposits, and limitations on interest rates which member
banks may pay on most time and savings deposits.
Material Changes and Developments
- ---------------------------------
There were no material changes or developments during 1998 in the business done
by the Company.
Regulation and Supervision
- --------------------------
Security and Citizens, as national banks, are subject to regulation by the
Comptroller of the Currency, The Board of Governors of the Federal Reserve
System and The Federal Deposit Insurance Corporation. Third, as a savings and
loan, is subject to regulation by the Office of Thrift Supervision and The
Savings Association Insurance Fund. The Company and any subsidiaries which it
may hereafter have will be affiliates of the Company within the meaning of the
Federal Reserve Act. As affiliates, the Company and any such subsidiaries are
subject to certain restrictions on loans by the subsidiaries, on investments by
the subsidiaries in their stock or securities or on its taking such stock and
securities as collateral for loans to any borrower. The Company and any such
subsidiaries, as affiliates of the Company are also subject to certain
restrictions with respect to engaging in the underwriting and public sale and
distribution of securities. Neither the Company nor any such subsidiaries may,
for example, engage in such transactions with respect to securities of the
company unless such securities are registered under the Securities Act of 1993
or any exemption from such registration is available. In addition, any such
affiliates of the Bank will be subject to examination at the discretion of
supervisory authorities.
The Company, as a Bank Holding Company, is subject to the restrictions of the
Bank Holding Company Act of 1956 as amended. This Act first provides that the
acquisition of control of a bank is subject to the prior approval of the Board
of Governors of the Federal Reserve System. In the future, the Company will be
required to obtain the prior approval of the Federal Reserve Board before it may
acquire, for its individual account all, or substantially all, of the assets of
any bank, or acquire ownership or control of any voting securities of any Bank,
if after giving effect to such acquisition, the Company would own or control
more than 5% of the voting shares of such bank. The Act does not permit the
Federal Reserve Board to approve the acquisition by the Company or any
subsidiary for their own account, of any voting shares of, or interest in, or
all, or substantially all, of the assets, of any bank located in a state other
than Ohio, unless such acquisition is specifically authorized by the statutes of
the state in which such bank is located.
The Bank Holding Company Act limits the activities which may be engaged in by
the Company and its subsidiaries to ownership of banks and those activities
which the Federal Reserve Board has deemed or may in the future find, by order
of regulations, to be so closely related to the banking or managing or
controlling banks as to be a proper incident thereto.
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BUSINESS--CONTINUED
Those activities presently authorized by the Federal Reserve Board include the
following general activities: (1) the making or acquiring of loans or other
extensions of credit: (2) operating as an industrial bank, Morris Plan Bank, or
industrial loan company according to state law without the accepting of demand
deposits and without the making of commercial loans: (3) the servicing of loans
for any person: (4) performing certain trust functions: (5) acting with certain
limitations as investment or financial advisor: (6) leasing personal property
and equipment: (7) the making of equity and debt investments in projects or
corporations designated primarily to promote community welfare: (8) providing
bookkeeping and data processing services for the internal operations of the Bank
Holding Company and its Subsidiaries: and providing to others, data processing
and transmission services and facilities for banking, financial or related
economic data: (9) acting as insurance agent or broker under certain
circumstances and with respect to certain types of insurance: (10) acting as
underwriter for credit life insurance and credit accident and health insurance
which is directly related to extensions of credit by the Bank Holding Company
System: (11) providing limited courier services for the internal operations of
the Holding Company, for checks exchanged among banking institutions, and for
audit and accounting media of a banking or financial nature used in processing
such media: (12) providing management consulting advice to non-affiliated banks
under certain limitations; (13) the retail sale of money orders with a face
value of $1,000 or less, of travelers checks and of U. S. Savings Bonds: (14)
performing appraisals of real estate: (15) providing securities brokerage
services, (restricted to buying and selling securities solely as agent for
customers), related securities activities and incidental activities: (16)
underwriting and dealing in government obligations and money market instruments:
(17) foreign exchange advisory and transactional services: and (18) acting as
futures commission merchant. For details and limitations on these activities,
reference should be made to Regulation Y of the Federal Reserve Board, as
amended. Further, under the 1970 amendment of this Act and the regulations of
the Federal Reserve Board, the Company and its subsidiaries will be prohibited
from engaging in certain tie-in arrangements in connection with any extension of
credit or provisions of any property or service.
Employees
- ---------
As of December 31, 1998, there were no full time employees of the Registrant.
Affiliates of the Registrant had full time equivalent employees of 327 of whom
59 were officers.
Statistical Information
- -----------------------
Pages 7 through 17 contain statistical information on the Company and its
subsidiaries.
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BUSINESS--CONTINUED
Investment Portfolio
- --------------------
The following table sets forth the carrying amount of investment securities at
the dates indicated. (000s)
December 31
-----------
1998 1997 1996
-------- -------- --------
Available for Sale Investments:
U. S. Treasury $ 7,506 $116,011 $136,020
U. S. Government Agencies and Corporations 59,650 12,887 15,419
Corporate Bonds 0 250 1,464
Mortgage Backed Securities 67,425 135 2,387
Equity Securities 229 356 485
-------- -------- --------
Total Available for Sale Investments $134,810 $129,639 $155,775
Held to Maturity Investments:
State and Political Subdivisions 26,859 13,262 28,530
Mortgage Backed Securities 2,332 3,484 4,010
Federal Reserve Stock and Other 3,323 2,794 2,668
-------- -------- --------
Total Held to Maturity Investments $ 32,514 $ 19,540 $ 35,208
-------- -------- --------
Total Carrying Value of Investments $167,324 $149,179 $190,983
======== ======== ========
The following table sets forth the redemption/ maturities of debt securities at
December 31, 1998 and the weighted average yields of such securities (calculated
on the basis of the cost and effective yields weighted for the scheduled
redemption/maturity of each security). Callable securities are shown at their
earliest call date. Tax-equivalent adjustments (using a 35% rate) have been made
in calculating yields on obligations of state and political subdivisions. (000)s
Maturing
--------------------------------------------------------------------------------------------
After One After Five
Within Within But Within After
One Year Five Years Ten Years Ten Years
Amount Yield Amount Yield Amount Yield Amount Yield
------ ----- ------ ----- ------ ----- ------ -----
Available for Sale Investments:
U. S. Treasury $ 5,485 5.73% $2,021 5.40% $ 0 0% $ 0 0%
U. S. Govt. Agencies and Corp. 57,937 5.91% 1,713 6.10% 0 0% 0 0%
Mortgage Backed Securities 0 0% 0 0% 4,881 5.65% 62,544 6.40%
Held to Maturity Investments:
States and Political Subdivisions 2,294 6.43% 5,701 6.89% 17,180 7.05% 1684 6.93%
Mortgage-backed Securities 0 0% 501 6.75% 0 0% 1,831 6.48%
------- ---- ------ ---- ------- ---- ------- ----
$65,716 5.91% $9,936 6.44% $22,061 6.74% $66,059 6.42%
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BUSINESS--CONTINUED
Types of Loans
- --------------
The following table summarizes consolidated loans by major category for the five
years ending December 31. (000s)
December 31
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Commercial and Agriculture $285,958 $252,053 $212,046 $170,905 $166,116
Real Estate 252,609 225,791 234,935 132,402 130,753
Consumer 78,375 84,161 93,787 93,263 98,129
-------- -------- -------- -------- --------
TOTAL LOANS $616,942 $562,005 $540,768 $396,570 $394,998
======== ======== ======== ======== ========
Non-accrual loans totaled $2,154,000 and $3,417,000 as of December 31, 1998 and
1997 respectively.
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BUSINESS--CONTINUED
The following table shows the maturity of loans (excluding those in non accrual
status) outstanding as of December 31, 1998. Also provided are the amounts due
after one year classified according to the sensitivity to changes in interest
rates. (000s)
MATURING
--------------------------------------------------------
Within After One But After
One Year Within Five Years Five Years Total
-------- ----------------- ---------- -----
Commercial, Ag $ 82,013 $ 44,934 $107,436 $234,383
Real Estate-Construction 8,401 1,240 4,439 14,080
All Other Loans 28,880 82,650 254,795 366,325
-------- -------- -------- --------
Total Loans $119,294 $128,824 $366,670 $614,788
======== ======== ======== ========
Loans maturing after one year with:
Fixed Interest rate $106,222 $207,968
Variable Interest 22,602 158,702
-------- --------
$128,824 $366,670
======== ========
RISK ELEMENTS
- -------------
Interest on loans is normally accrued at the rate agreed upon at the time each
loan was negotiated. It is the Bank's policy to discontinue accrual of interest
on commercial and mortgage loans when there is a clear indication that the
borrower's cash flow may not be sufficient to meet payments as they become due.
When a consumer loan is uncollectable, the loan is charged off. If there is
collateral, it is secured and disposed of. In regards to paragraph 6i of SFAS
118, the amounts are immaterial and, therefore, not disclosed. The following
table presents data concerning loans at risk at the end of each period. (000s).
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Non-accrual loans $2,154 $3,417 $4,123 $2,772 $2,598
Accruing loans past
due 90 days or more $1,357 $1,537 $1,709 $1,543 $ 561
Restructured loans $ 322 $ 333 $ 0 $ 0 $ 0
Other Real Estate owned $1,531 $ 258 $ 256 $ 0 $ 0
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BUSINESS--CONTINUED
Summary of Loan Loss Experience
- -------------------------------
This table summarized the Company's loan loss experience for each of the five
years ended December 31 (000s)
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
Balance at Jan. 1: $6,254 $ 6,827 $ 5,336 $5,101 $4,364
Acquired Allowance 0 0 1285 0 0
Charge-offs
Commercial 705 1,000 1091 248 144
Real Estate 284 6 4 0 15
Consumer 1,117 1,182 868 829 573
------ ------- ------- ------ ------
2,106 2,188 1963 1,077 732
Recoveries
Commercial 834 64 55 97 411
Real Estate 66 19 0 0 0
Consumer 295 232 239 265 214
------ ------- ------- ------ ------
1,195 315 294 362 625
------ ------- ------- ------ ------
Net Charge-offs (911) (1,873) (1,669) (715) (107)
Provision for loan losses 1,540 1,300 1875 950 844
------ ------- ------- ------ ------
Balance at Dec. 31: 6,883 $ 6,254 $ 6,827 $5,336 $5,101
===== ======= ======= ====== ======
Net Charge offs
to average loans 0.16% 0.34% 0.39% 0.18% 0.03%
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BUSINESS--CONTINUED
Allowance for Loan Losses
- -------------------------
The allowance for loan losses is established through charges to operations by a
provision for loan losses. Loans which are determined to be uncollectible are
charged against the allowance and subsequent recoveries, if any, are credited to
the allowance. The amount charged to operations is based on several factors.
These include the following:
1. Analytical reviews of the loan loss experience in relationship
to outstanding loans to determine an adequate allowance for loan
losses required for loans at risk.
2. A continuing review of problem or at risk loans and the overall
portfolio quality.
3. Regular examinations and appraisals of the loan portfolio
conducted by the Bank's examination staff and the banking
supervisory authorities.
4. Management's judgement with respect to the current and expected
economic conditions and their impact on the existing loan
portfolio.
The amount provided for loan losses exceeded actual net charge-offs by $629,000
in 1998 and $206,000 in 1996. Net charge-offs exceeded the amount provided for
loan losses by $573,000 in 1997.
It is management's practice to review the allowance on a quarterly basis to
determine whether additional provisions should be made after considering the
factors noted above. Based on these procedures, management is of the opinion
that the allowance at December 31, 1998 of $6,883,000 is adequate.
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BUSINESS--CONTINUED
This table shows allocation of the allowance for loan losses as of the end of
the last five years. (000s)
12-31-98 12-31-97 12-31-96 12-31-95 12-31-94
------------------- ------------------- ------------------- ------------------- -------------------
Percent of Percent of Percent of Percent of Percent of
Loans to Loans to Loans to Loans to Loans to
Amount Total Loans Amount Total Loans Amount Total Loans Amount Total Loans Amount Total Loans
------ ----------- ------ ----------- ------ ----------- ------ ----------- ------ -----------
Commercial and Agriculture $1,941 46% $1,757 45% $1,730 39% $1,075 43% $1,683 42%
Real Estate 1,233 41% 331 40% 24 44% 52 33% 52 33%
Consumer 778 13% 816 15% 826 17% 771 24% 588 25%
Additional Reserve Allocated
for current loans 835 757 2,057 1,178 1,280
Unallocated 2,096 2,593 2,190 2,260 1,498
------ ------ ------ ------ ------
$6,883 100% $6,254 100% $6,827 100% $5,336 100% $5,101 100%
====== === ====== === ====== === ====== === ====== ===
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BUSINESS--CONTINUED
Deposits
- --------
Maturities of time certificates of deposits and other time deposits of $100,000
or more, outstanding at December 31, are summarized as follows: (000s)
1998 1997
---- ----
Three months or less $11,370 $11,269
Over three months through twelve months 25,855 18,380
Over one year thru five years 7,569 12,096
------- -------
$44,794 $41,745
======= =======
Return on Equity and Assets
The following table shows consolidated operating and capital ratios of the
company for each of the last three years:
Year Ended December 31
For the Years 1998 1997 1996
- ------------- ---- ---- ----
Return on Assets (A) 1.85% 1.75% 1.92%
Return on Equity (B) 13.69% 13.92% 14.18%
Dividend Payout Ratio (C) 38.67% 37.24% 36.49%
Equity to Assets Ratio (D) 13.58% 12.55% 13.52%
- -------------------
(A) net income divided by average total assets
(B) net income divided by average equity
(C) dividends declared per share divided by net income per share
(D) average equity divided by average total assets
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BUSINESS--CONTINUED
Loan Commitments and Standby Letters of Credit
- ----------------------------------------------
Loan commitments are made to accommodate the financial needs of our customers.
Letters of credit commit the Company to make payments on behalf of customers
when specific future events occur.
Both arrangements have credit risk essentially the same as that involved in
extending loans to customers and are subject to the Company's normal credit
policies. Collateral (e.g., securities, receivables, inventory, equipment) is
obtained based on Management's credit assessment of the customer.
Off-balance sheet items at December 31 (000s)
1998 1997
---- ----
Unused Commitments
Open end consumer lines $47,958 $43,267
Other unused commitments 94,035 81,231
Letters of Credit $2,602 $2,072
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BUSINESS--CONTINUED
SECURITY NATIONAL "NEXT FOUR QUARTERS"
ASSET/LIABILITY MANAGEMENT
STATIC GAP ANALYSIS (000s)
Immediately
Adjustable End of 3/99 End of 6/99 End of 9/99 End of 12/99
Runoffs Rate Runoffs Rate Runoffs Rate Runoffs Rate Runoffs Rate
------- ---- ------- ---- ------- ---- ------- ---- ------- ----
Total Investment Securities 51 5.44% 20,000 5.89% 0 0.00% 20,000 5.81% 10,275 5.70%
Total Short Term Investment 17,850 4.40% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Net Loans 65,235 8.26% 34,426 8.91% 23,853 8.84% 19,457 8.91% 17,793 8.80%
Total Earning Assets 83,136 7.43% 54,426 7.80% 23,853 8.84% 39,457 7.34% 28,068 7.67%
Total Non-Earning Assets 1,285 9.17% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Assets 84,420 7.46% 54,426 7.80% 23,853 8.84% 39,457 7.34% 28,068 7.67%
Total Noninterest Bearing Deposits 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Interest Bearing Deposits 39,836 4.38% 40,519 4.60% 53,956 4.71% 26,246 4.43% 18,197 3.72%
Total Deposits 39,836 4.38% 40,519 4.60% 53,956 4.71% 26,246 4.43% 18,197 3.72%
Total Other Interest Bearing Liabilities 29,218 3.39% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Other Liabilities 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities 69,053 3.96% 40,519 4.60% 53,956 4.71% 26,246 4.43% 18,197 3.72%
Total Equity Capital 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities and Capital 69,053 3.96% 40,519 4.60% 53,956 4.71% 26,246 4.43% 18,197 3.72%
Interval GAP 15,367 13,906 (30,103) 13,212 9,871
Cumulative GAP 15,367 29,273 (830) 12,382 22,253
Interval GAP/Total Assets 2.71% 2.46% (5.32%) 2.33% 1.74%
Cumulative GAP/Total Assets 2.71% 5.17% (0.15%) 2.19% 3.93%
Interval GAP: Earning Assets 2.57% 2.65% (5.74%) 2.52% 1.88%
Cumulative GAP/Earning Assets 2.57% 5.22% (0.52%) 2.00% 3.88%
Interval Spread: Earning Assets 3.54% 3.20% 4.13% 2.91% 3.94%
Interval Spread: Total Assets 3.50% 3.20% 4.13% 2.91% 3.94%
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BUSINESS--CONTINUED
CITIZENS NATIONAL "NEXT FOUR QUARTERS"
ASSET/LIABILITY MANAGEMENT
STATIC GAP ANALYSIS (000s)
Immediately
Adjustable End of 3/99 End of 6/99 End of 9/99 End of 12/99
Runoffs Rate Runoffs Rate Runoffs Rate Runoffs Rate Runoffs Rate
------- ---- ------- ---- ------- ---- ------- ---- ------- ----
Total Investment Securities 0 0.00% 8,400 5.32% 3,500 5.78% 2,510 5.96% 1,107 5.03%
Total Short Term Investment 2,500 4.90% 2,200 5.92% 0 0.00% 0 0.00% 500 5.13%
Net Loans 17,439 8.73% 2,361 8.50% 2,275 8.44% 9,321 8.18% 4,828 10.22%
Total Earning Assets 19,939 8.25% 12,961 6.02% 5,775 6.83% 11,831 7.71% 6,435 8.93%
Total Non-Earning Assets 578 8.14% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Assets 20,518 8.24% 12,961 6.02% 5,775 6.83% 11,831 7.71% 6,435 8.93%
Total Noninterest Bearing Deposits 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Interest Bearing Deposits 120 5.18% 34,062 2.62% 8,690 4.77% 6,817 5.39% 33,344 3.07%
Total Deposits 120 5.18% 34,062 2.62% 8,690 4.77% 6,817 5.39% 33,344 3.07%
Total Other Interest Bearing Liabilities 17 4.52% 310 4.00% 0 0.00% 0 0.00% 0 0.00%
Total Other Liabilities 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities 137 5.10% 34,372 2.63% 8,690 4.77% 6,817 5.39% 33,344 3.07%
Total Equity Capital 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities and Capital 137 5.10% 34,372 2.63% 8,690 4.77% 6,817 5.39% 33,344 3.07%
Interval GAP 20,381 (21,411) (2,915) 5,014 (26,909)
Cumulative GAP 20,381 (1,030) (3,946) 1,068 (25,841)
Interval GAP/TotalAssets 14.19% (14.91%) (2.03%) 3.49% (18.74%)
Cumulative GAP/Total Assets 14.19% (0.72%) (2.75%) 0.74% (17.99%)
Interval GAP/Earning Assets 15.51% (16.80%) (2.29%) 0.36% (21.11%)
Cumulative GAP/Earning Assets 15.51% (1.29%) (3.57%) 2.32% (20.75%)
Interval Spread: Earning Assets 3.16% 3.39% 2.06% 0.36% 5.86%
Interval Spread: Total Assets 3.14% 3.39% 2.06% 2.32% 5.86%
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BUSINESS--CONTINUED
THIRD SAVINGS "NEXT FOUR QUARTERS"
ASSET/LIABILITY MANAGEMENT
STATIC GAP ANALYSIS (000s)
Immediately
Adjustable End of 3/99 End of 6/99 End of 9/99 End of 12/99
Runoffs Rate Runoffs Rate Runoffs Rate Runoffs Rate Runoffs Rate
------- ---- ------- ---- ------- ---- ------- ---- ------- ----
Total Investment Securities 1,346 6.83% 0 0.00% 1,001 6.11% 0 0.00% 0 0.00%
Total Short Term Investment 1,000 4.55% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Net Loans 18,554 8.78% 13,303 8.76% 12,465 8.08% 10,121 8.27% 8,771 7.98%
Total Earning Assets 20,900 8.45% 13,303 8.76% 13,466 7.94% 10,121 8.27% 8,771 7.98%
Total Non-Earning Assets 290 9.30% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Assets 21,190 8.47% 13,303 8.76% 13,466 7.94% 10,121 8.27% 8,771 7.98%
Total Noninterest Bearing Deposits 0 0.00% 2,919 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Interest Bearing Deposits 2,010 4.75% 11,496 5.37% 16,784 5.48% 18,845 5.43% 12,767 5.04%
Total Deposits 2,010 4.75% 14,415 4.29% 16,784 5.48% 18,845 5.43% 12,767 5.04%
Total Other Interest Bearing Liabilities 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Other Liabilities 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities 2,010 4.75% 14,415 4.29% 16,784 5.48% 18,845 5.43% 12,767 5.04%
Total Equity Capital 0 0.00% 0 0.00% 0 0.00% 0 0.00% 0 0.00%
Total Liabilities and Capital 2,010 4.75% 14,415 4.29% 16,784 5.48% 18,845 5.43% 12,767 5.04%
Interval GAP 19,181 (1,112) (3,318) (8,725) (3,997)
Cumulative GAP 19,181 18,068 14,750 6,026 2,029
Interval GAP/Total Assets 11.09% (0.64%) (1.92%) (5.04%) (2.31%)
Cumulative GAP/Total Assets 11.09% 10.45% 8.53% 3.48% 1.17%
Interval GAP/Earning Assets 12.29% 1.18% (2.16%) (5.68%) (2.60%)
Cumulative GAP/Earning Assets 12.29% 13.46% 11.31% 5.63% 3.03%
Interval Spread: Earning Assets 3.70% 3.39% 2.45% 2.84% 2.94%
Interval Spread: Total Assets 3.72% 4.48% 2.45% 2.84% 2.94%
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ITEM 2. PROPERTIES
The Security Banc Corporation is headquartered in Springfield, Ohio at
40 South Limestone Street. The subsidiaries of the Company have 24
banking offices located in Ohio. The Company owns 22 of the offices and
the other two are leased. Additional information is contained in the
Notes to Consolidated Financial Statements, Part IV, Item 14.
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ITEM 3. LEGAL PROCEEDINGS
Registrant and its subsidiaries are not a party to any material
legal proceedings.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
1. To elect four directors of Class II to serve until the Annual
Meeting of Shareholders in 2002 or in the case of each director
until his successor is duly elected and qualified.
2. To transact such other business as may properly come before the
Annual Meeting or any adjournments thereof.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
SHAREHOLDER MATTERS
The common stock of the Corporation is traded on the
over-the-counter market. Transfer agent and registrar is The
Registrar and Transfer Co., 10 Commerce Drive, Cranford, NJ 07016.
Common stock market prices and dividends are shown in the annual
shareholders' report for the year ended December 31, 1998 and
incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item is incorporated herein by
reference to the registrant's 1998 Annual Report to Shareholders
attached to this filing as Exhibit "13".
ITEM 7. MANAGEMENT'S DISCUSSION AN ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
The information required by this item is incorporated herein by
reference to the registrant's 1998 Annual Report to Shareholders
attached to this filing as Exhibit "13".
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information required by this item is incorporated herein by
reference to the registrant's 1998 Annual Report to Shareholders
attached to this filing as Exhibit "13".
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information required by this item concerning Directors is
incorporated herein by reference to the registrant's 1999 Proxy
Statement.
Executive Officers
- ------------------
The name, age, and position of the Executive Officers of the Registrant as of
March, 1999 is listed below along with their business experience during the past
five years. Officers are appointed annually by the Board of Directors at the
meeting of Directors immediately following the Annual Meeting of Stockholders.
Name, Age, Position Business Experience During Past Five Years
- ------------------- ------------------------------------------
Executive Officers
------------------
Harry O. Egger, 59 Security National Bank and Trust Co.
Chairman, President, CEO President 1981 - 1996
Chairman, CEO since 1-1-97
J. William Stapleton, 46 Security National Bank and Trust Co.
Executive Vice President/CFO Vice President since 9-18-84
Executive Vice President since 1-1-97
William C. Fralick, 44 Security National Bank and Trust Co.
Vice President Vice President since 12-31-84
President since 1-1-97
Glenda S. Greenwood, 43 Security National Bank and Trust Co.
Vice President Director of Marketing since 12-29-80
Vice President since 1-1-97
Daniel M. O'Keefe, 54 Security National Bank and Trust Co.
Vice President Vice President/Trust Officer since 1-80
ITEM 11. EXECUTIVE COMPENSATION
The information required by this item is incorporated herein by
reference to the registrant's 1999 Proxy Statement.
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PART III
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS ANDMANAGEMENT
The information required by this item is incorporated herein by
reference to the Registrant's 1999 Proxy Statement.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information required by this item is incorporated herein by
reference to the Registrant's 1999 Proxy Statement.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
a) Document filed as part of the report
1. FINANCIAL STATEMENTS
The following consolidated financial statements and report
of independent auditors of Security Banc Corporation,
included in the 1998 Annual Report to its shareholders for
the year ended December 31, 1998 are incorporated by
reference in Item 8.
Report of Independent Auditors
Consolidated Statement of Condition, December 31, 1998 and
1997
Consolidated Statement of Income for the Years Ending
December 31, 1998, 1997, and 1996
Consolidated Statement of Shareholders' Equity for the
Years Ending December 31, 1998, 1997, and 1996
Consolidated Statement of Cash Flows for the Years Ending
December 31, 1998, 1997, and 1996
Notes to Consolidated Financial Statements
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(CONT'D)
a) Document filed as part of the report
2. Schedules to the consolidated financial statements
required by Article 9 of Regulation S-X are not required
under the related instructions or are inapplicable, and
therefore have been omitted.
(b) Reports on Form 8-K - None
(c) Exhibits
13 - Security Banc Corporation 1998 Annual Report
23 - Consent of Independent Auditors
27 - Financial Data Schedule
(d) Financial Statement Schedules - None
Security Banc Corp. has the following subsidiaries:
1. Security National Bank and Trust Co.
2. Citizens National Bank
3. Third Savings and Loan Company
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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.
SECURITY BANC
---------------------------------------------------------
CORPORATION (Registrant)
By /s/ Harry O. Egger
-----------------------------------------
Harry O. Egger, Chairman of the Board and Director
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated.
/s/ Larry E. Kaffenbarger /s/ Vincent J. Demana
- ---------------------------------------- ----------------------------------------
Director, Larry E. Kaffenbarger, 3-16-99 Director, Vincent J. Demana, 3-16-99
/s/ Chet L. Walthall /s/ Robert A. Warren
- ---------------------------------------- ----------------------------------------
Director, Chet L. Walthall, 3-16-99 Director, Robert A. Warren, 3-16-99
/s/ Larry D. Ewald /s/ Richard E. Kramer
- ---------------------------------------- ----------------------------------------
Director, Larry D. Ewald, 3-16-99 Director, Richard E. Kramer, 3-16-99
/s/ Karen E. Nagle /s/ James R. Wilson
- ---------------------------------------- ----------------------------------------
Director, Karen E. Nagle, 3-16-99 Director, James R. Wilson, 3-16-99
/s/ Thomas J. Veskauf /s/ Scott A. Gabriel
- ---------------------------------------- ----------------------------------------
Director, Thomas J. Veskauf, 3-16-99 Director, Scott A. Gabriel, 3-16-99
/s/ Harry O. Egger /s/ J. William Stapleton
- ---------------------------------------- ----------------------------------------
Chairman of the Board, President and CEO Executive Vice President and
Harry O. Egger, 3-16-99 Chief Financial Officer
(Principal Financial Officer)
J. William Stapleton, 3-16-99
/s/ Thomas L. Miller
- ----------------------------------------
Vice President/Controller Security
National Bank
Thomas L. Miller, 3-16-99
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