1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) THE SECURITIES EXCHANGE ACT OF
1934 For quarter ended March 31, 1999
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934. For the transition period ..... to .....
Commission file number: 0-15624
SECOND BANCORP INCORPORATED
(exact name of registrant as specified in its charter)
Ohio 34-1547453
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(State or other jurisdiction of (I.R.S. Employer
in Company or organization) Identification No.)
108 Main Ave. Warren, Ohio 44482-1311
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(Address of principal executive offices) (Zip Code)
(216) 841-0123
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Registrant's telephone number, including area code
Not applicable
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Former name, former address and former fiscal year, if changed since last
report.
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 periods 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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date.
Common Stock, without par value - 10,698,200 shares outstanding as of April 30,
1999.
Page 1 of 14
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SECOND BANCORP INCORPORATED AND SUBSIDIARY
INDEX Page
Number
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PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated balance sheets -
March 31, 1999 and 1998 and December 31, 1998 ........................... 3
Consolidated statements of income -
Three months ended March 31, 1999 and 1998 ........................ 4
Consolidated statements of cash flows -
Three months ended March 31, 1999 and 1998 ........................ 5
Consolidated statement of shareholders' equity -
Three months ended March 31, 1999 and 1998 ........................ 6
Notes to consolidated financial statements - March 31, 1999 ............. 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations ............... 8-10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings ......................................... 11
Item 2. Changes in Securities ..................................... 11
Item 3. Defaults upon Senior Securities ........................... 11
Item 4. Submission of Matters to a Vote of Security
Holders ................................................... 11
Item 5. Other Information ......................................... 11
Item 6. Exhibits and Reports on Form 8-K .......................... 11
SIGNATURES ........................................................ 12
Statement 11 Re: Computation of Earnings Per Share ................ 13
Schedule 27 ....................................................... 14
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
Second Bancorp Incorporated and Subsidiary
March 31 December 31 March 31
---------------------------------------------------
(Dollars in thousands) 1999 1998 1998
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ASSETS
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Cash and due from banks $ 33,876 $ 45,478 $ 35,445
Federal funds sold 0 4,000 5,607
Securities:
Available-for-sale (at market value) 391,756 354,415 326,536
Held-to-maturity (market value of $163,142) 0 0 163,352
Loans 975,365 970,853 926,857
Less reserve for loan losses 11,546 10,739 9,013
----------- ----------- -----------
Net loans 963,819 960,114 917,844
Premises and equipment 18,088 17,119 14,955
Accrued interest receivable 8,991 8,709 10,013
Goodwill and intangible assets 5,696 5,749 6,821
Other assets 35,486 34,649 20,235
----------- ----------- -----------
Total assets $ 1,457,712 $ 1,430,233 $ 1,500,808
=========== =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
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Deposits:
Demand - non-interest bearing $ 100,554 $ 115,624 $ 96,505
Demand - interest bearing 92,136 101,080 90,127
Savings 279,169 274,728 263,024
Time deposits 600,606 611,158 639,652
----------- ----------- -----------
Total deposits 1,072,465 1,102,590 1,089,308
Federal funds purchased and securities sold under
agreements to repurchase 143,995 122,482 146,065
Other borrowed funds 1,349 861 3,103
Federal Home Loan Bank advances 107,659 72,782 127,242
Accrued expenses and other liabilities 8,053 8,245 11,628
----------- ----------- -----------
Total liabilities 1,333,521 1,306,960 1,377,346
Shareholders' equity:
Preferred stock, no par value;
Series A: 1,500,000 shares authorized in March 1998;
718,750 issued and 0 shares outstanding 0
Series B: 1,500,000 shares authorized in March 1998 0
Common stock, no par value; 20,000,000 shares
authorized; 10,738,850; 10,738,850 and 10,687,575
shares issued, respectively 36,864 36,901 36,045
Treasury stock, 50,400 shares (793) (793) (793)
Net unrealized holding gains on
available-for-sale securities, net of tax 1,434 3,097 2,155
Retained earnings 86,686 84,068 86,055
----------- ----------- -----------
Total shareholders' equity 124,191 123,273 123,462
----------- ----------- -----------
Total liabilities and shareholders' equity $ 1,457,712 $ 1,430,233 $ 1,500,808
=========== =========== ===========
See notes to consolidated financial statements.
Certain reclassifications have been made to amounts previously reported in order
to conform with current year presentation.
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Consolidated Statements of Income
Second Bancorp Incorporated and Subsidiary
(Dollars in thousands, For the three months
except per share data) Ended March 31
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1999 1998
----------- -----------
INTEREST INCOME
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Loans (including fees):
Taxable $ 19,886 $ 19,307
Exempt from federal income taxes 191 122
Securities:
Taxable 4,315 6,772
Exempt from federal income taxes 925 790
Federal funds sold 195 122
----------- -----------
Total interest income 25,512 27,113
INTEREST EXPENSE
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Deposits 10,344 11,039
Federal funds purchased and securities
sold under agreements to repurchase 1,397 1,733
Other borrowed funds 31 33
Federal Home Loan Bank advances 1,225 1,419
----------- -----------
Total interest expense 12,997 14,224
----------- -----------
Net interest income 12,515 12,889
Provision for loan losses 829 859
----------- -----------
Net interest income after provision for loan losses 11,686 12,030
NON-INTEREST INCOME
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Service charges on deposit accounts 953 964
Trust fees 795 678
Security gains 111 128
Other operating income 1,466 844
----------- -----------
Total non-interest income 3,325 2,614
NON-INTEREST EXPENSE
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Salaries and employee benefits 4,694 4,679
Net occupancy 994 994
Equipment 854 800
Professional services 458 496
Assessment on deposits and other taxes 431 439
Amortization of goodwill and other intangibles 171 201
Other operating expenses 1,914 2,037
----------- -----------
Total non-interest expense 9,516 9,646
----------- -----------
Income before federal income taxes 5,495 4,998
Income tax expense 1,380 1,333
----------- -----------
Net income $ 4,115 $ 3,665
=========== ===========
NET INCOME PER COMMON SHARE:
Basic $ 0.38 $ 0.34
Diluted $ 0.38 $ 0.34
Weighted average common shares outstanding:
Basic 10,688,450 10,627,964
Diluted 10,735,749 10,723,345
See notes to consolidated financial statements.
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Consolidated Statements of Shareholders' Equity
Second Bancorp Incorporated and Subsidiary
Accumulated
Other
Preferred Common Treasury Comprehen- Retained Comprehen-
(Dollars in thousands) Stock Stock Stock sive Income Earnings Total sive Income
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Balance, January 1, 1998 $ -- $ 35,354 $(793) $ 2,832 $ 83,590 $ 120,983 --
Comprehensive income:
Net income -- -- -- -- 3,665 3,665 $ 3,665
Other comprehensive income, net of tax
Change in unrealized market value
adjustment on securities
available-for-sale, net of tax -- -- -- (677) -- (677) (677)
-------
Comprehensive income -- -- -- -- -- -- $ 2,988
=======
Cash dividends declared:
Common stock ($.11 per share) -- -- -- -- (1,200) (1,200)
Exercise of stock options -- 30 -- -- -- 30
Common stock issued - dividend
reinvestment plan -- 661 -- -- -- 661
------ -------- ----- ------- -------- ---------
Balance, March 31, 1998 $ -- $ 36,045 $(793) $ 2,155 $ 86,055 $ 123,462
====== ======== ===== ======= ======== =========
Balance, January 1, 1999 $ 36,901 $(793) $ 3,097 $ 84,068 $ 123,273
Comprehensive income:
Net income -- -- -- 4,115 4,115 $ 4,115
Other comprehensive income, net of tax
Change in unrealized market value
adjustment on securities
available-for-sale, net of tax -- -- (1,663) -- (1,663) (1,663)
-------
Comprehensive income -- -- -- -- -- $ 2,452
=======
Cash dividends declared: common
($.14 per share) -- -- -- (1,497) (1,497)
Common stock issued - dividend
reinvestment plan (37) -- -- -- (37)
======== ===== ======= ======== =========
Balance, March 31, 1999 $ 36,864 $(793) $ 1,434 $ 86,686 $ 124,191
======== ===== ======= ======== =========
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Consolidated Statements of Cash Flows
Second Bancorp Incorporated and Subsidiary
For the Three Months Ended
--------------------------
(Dollars in thousands) March 31 March 31
Operating Activities 1999 1998
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Net income $ 4,115 $ 3,665
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 829 859
Provision for depreciation 699 639
Provision for amortization of intangibles 171 202
Net (increase) decrease in servicing rights (118) 8
Amortization of investment discount and premium (19) (619)
Deferred income taxes 0 89
Securities gains (111) (128)
Other gains, net (400) (275)
Increase in interest receivable (282) (1,231)
Increase in interest payable 641 574
Originations of loans held-for-sale (22,227) (7,999)
Proceeds from sale of loans held-for-sale 22,627 8,274
Decrease in other assets 69 2,178
(Decrease) increase in other liabilities (833) 2,153
--------- --------
Net Cash provided by operating activities 5,161 8,389
Investing Activities
- --------------------------------------------------------
Proceeds from maturities of securities - 43,272 26,113
available-for-sale
Proceeds from maturities of securities - 0 18,272
held-to-maturity
Proceeds from sales of securities - available-for-sale 34,436 3,086
Purchases of securities - available-for-sale (117,488) (48,164)
Purchases of securities - held-to-maturity 0 (12,134)
Net decrease (increase) in revolving credit receivables 380 (135)
Net increase in loans (4,914) (42,401)
Net increase in premises and equipment (1,668) (672)
--------- --------
Net cash used by investing activities (45,982) (56,035)
Financing Activities
- --------------------------------------------------------
Net decrease in demand deposits, insured money market
And interest checking accounts and savings deposits (19,573) (20,031)
Net decrease in time deposits (10,552) (8,356)
Net increase in federal funds purchased
And securities sold under agreements to repurchase 21,513 23,988
Net increase (decrease) in borrowings 488 (454)
Net advances from Federal Home Loan Bank 34,877 51,136
Cash dividends (1,497) (1,200)
Common stock activity - options and dividend
reinvestment plan (37) 691
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Net cash provided by financing activities 25,219 45,774
--------- --------
Decrease in cash and cash equivalents (15,602) (1,872)
--------- --------
Cash and cash equivalents at beginning of year 49,478 42,924
--------- --------
Cash and cash equivalents at end of period $ 33,876 $ 41,052
========= ========
Supplementary Cash Flow Information:
Cash paid for 1) Federal Income taxes - $0 and $905,000 for the three months
ended March 31, 1999 and 1998, respectively and 2) Interest - $12,357,000 and
$10,981,000 for the three months ended March 31, 1999 and 1998, respectively.
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Notes to Consolidated Financial Statements (unaudited) Second Bancorp
Incorporated and Subsidiary
March 31, 1999
(Dollars in thousands)
NOTE A - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three-month periods ended March 31,
1999 are not necessarily indicative of the results that may be expected for the
year ended December 31, 1999. Certain reclassifications have been made to
amounts previously reported in order to conform to current period presentations.
For further information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Annual Report on Form 10-K for the
year ended December 31, 1998.
NOTE B - PER SHARE DATA
The per share data is based upon the weighted average number of shares,
including common stock equivalents, outstanding during the period.
NOTE C - ACQUISITIONS
On August 20, 1998, the Company completed the acquisition of Enfin, Inc. and its
subsidiary, Enterprise Bank. The acquisition was accounted on a
pooling-of-interest accounting basis and, therefore, all historical financial
presentations have been restated to reflect the pooling-of-interests accounting
method. On November 19, 1998, the Company completed the acquisition of Trumbull
Financial Corporation and its subsidiary, Trumbull Savings and Loan. The
acquisition was accounted on a pooling-of-interest accounting basis and,
therefore, all historical financial presentations have been restated to reflect
the pooling-of-interests accounting method.
NOTE D - COMPREHENSIVE INCOME
During the first three months of 1999 and 1998, total comprehensive income
amounted to $2,452 and $2,988. The components of comprehensive income, net of
tax, for the three-month periods ended March 31, 1999 and 1998 are as follows:
1999 1998
------ ------
Net income $4,115 $3,665
Unrealized losses on available-for-sale securities 1,663 677
------ ------
Comprehensive income $2,452 $2,988
====== ======
Accumulated other comprehensive income, net of related tax, at March 30, 1999,
December 31, 1998 and March 31, 1998 totaled $1,434, $3,097 and $2,155,
respectively and were comprised entirely of accumulated changes in unrealized
market value adjustments on securities available-for-sale, net of tax.
Disclosure of reclassification amounts:
January 1 to January 1 to
March 31, 1999 March 31, 1998
-------------- --------------
Unrealized holding (losses) gains arising during the period $(1,774) $(805)
Less: reclassification for gains included in net income (111) (128)
------- -----
Net unrealized (losses) gains on available-for-sale securities $(1,663) $(677)
======= =====
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
Management's Discussion and Analysis of Financial Condition and Results of
Operations Second Bancorp Incorporated and Subsidiary
General
Second Bancorp Incorporated, (the "Company") is a one-bank holding company which
owns The Second National Bank of Warren (the "Bank"), a Warren, Ohio based
commercial bank. Operating through thirty- four branches and one loan production
office, the Bank offers a wide range of commercial and consumer banking and
trust services primarily to business and individual customers in various
communities in a nine county area in northeastern Ohio.
The Bank focuses its marketing efforts primarily on local independent and
professional firms and individuals that are the owners and principals of such
firms. The Bank has emphasized commercial lending and market area expansion.
Financial Condition
At March 31, 1999, the Company had consolidated total assets of $1.46 billion,
deposits of $1.07 billion and shareholders' equity of $124 million. Since March
31, 1998, total assets have decreased by 2.9%. Gross loans have grown by 5%
during the past year to $975 million. Within the loan totals, real estate loan
balances have increased by 9% to $374 million as of March 31, 1999 while
consumer lending has declined by $14 million to $220 million as of the same
date. The decline in consumer loan balances reflects the Bank's reduced focus on
indirect automobile lending and commitment to improved credit quality within
that portfolio. Commercial loan balances have increased by $29 million, or 8%
over the past year and now total $380 million.
Funding growth has primarily been generated through core deposits (DDA, NOW and
savings balances). Advances from the Federal Home Loan Bank ("FHLB") have
declined by approximately $20 million over the past year. Higher cost funding
via time deposits has also declined by $39 million over the same period.
Results of Operations
General. The Company achieved net income of $4,115,000 for the first quarter of
1999, 12% greater than the $3,665,000 earned during the same period last year.
All historical financial presentations have been restated to reflect the
pooling-of-interests accounting method used for both the Enfin Inc. and Trumbull
Financial Corporation acquisitions that occurred in 1998. On a per share basis,
diluted earnings for the quarter were $.38, 12% greater than the $.34 per share
reported for the first quarter of 1998. Return on average assets (ROA) and
return on average total shareholders' equity (ROE) were 1.14% and 13.25%,
respectively for the first quarter of 1999 compared to .99% and 11.94% for last
year's first quarter. Net interest income decreased by 2.9% to $12,515,000 for
the first quarter of 1999, reflecting the smaller asset size. Non-interest
income, excluding security gains, increased 29.3% from a year ago with increases
in income from trust services, sales of mutual funds and annuities, SBA and real
estate loans as well as increased income from bank owned life insurance.
Non-interest expenses declined 1.3% from the same period a year ago, indicating
the Company's continued successful efforts reduce costs and capitalize on
synergies from the acquisitions.
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Asset Quality. The reserve for loan losses was 1.18% of total loans at the end
of the first quarter of 1998. The reserve was .97% of total loans at March 31,
1998. Non-accrual loans have declined significantly over the past year and total
$4,125,000 as of March 31, 1999 versus $5,617,000 as of the same date last year.
Net charge-offs also declined significantly and averaged an annualized .01% of
average loans for the first quarter, which is a historically low level for the
Company. Net charge-offs averaged .30% of average loans for the first quarter of
1998.
Net Interest Income. Net interest income for the first quarter of 1999 decreased
by 2.98% from the same period last year to $12,515,000. The decrease was derived
from a decrease of 3.4% in average earning assets to $1.35 billion. The decline
was primarily related to shrinkage in FHLB borrowings and security balances from
Trumbull Financial Corporation prior to the November 19, 1998 acquisition. An
increase in the net interest margin from 3.82% to 3.88% helped to offset the
decline in average earning assets. An increase in the loan-to-asset ratio from
60.9% to 67.3% generated the improvement in the net interest margin.
Non-interest Income. Non-interest income showed significant improvement over the
past year. For the first quarter of 1999, fees from trust services increased by
$117,000, or 17%, over the first quarter of 1998. Other income totaled
$1,466,000 for the first quarter of 1999 versus $844,000 for the same period in
1998. Sales of SBA and real estate loans, sales of alternative investment
products and income from the increase in cash surrender value from bank owned
life insurance helped generate the increase in other income. Security sales for
the quarter generated $111,000 in income versus $128,000 in gains for the first
quarter of 1998. Deposit services charges declined by $11,000 compared to the
first quarter of 1998.
Non-interest Expense. Expenses for the first quarter of 1999 were 1.3% lower
than for the same period in 1998. Small increases in salaries and employee
benefits (.3%) along with equipment expense (6.7%) related to the companies
migration of data processing and information management systems to an in-house
environment and were the only expense categories to increase. Net occupancy
costs were unchanged from a year earlier, while all other cost categories
declined versus the previous year.
Shareholders' equity has increased by .6% over the past year, with retained
earnings also increasing by .7%. The slight rise in both balances is
attributable to the merger cost of $6.6 million incurred during the second half
of 1998 associated with the tow acquisitions. Accumulated other comprehensive
income, which consists of unrealized gains on available-for-sale securities,
totaled $1,434,000 as of March 31, 1999.
Forward-looking statements:
The section that follows contains certain forward-looking statements (as defined
in the Private Securities Litigation Reform Act of 1995). These forward-looking
statements may involve significant risks and uncertainties. Although the Company
believes that the expectations reflected in such forward-looking statements are
reasonable, actual results may differ materially from the expectations discussed
in these forward-looking statements.
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Year 2000:
Due to the approach of the Year 2000, the Company is exposed to risks that
equipment or software applications will not be able to distinguish the year 2000
from the year 1900 and will not function properly. To address the issue, the
Company has initiated the process of preparing its computer systems and
applications for the Year 2000. This process involves modifying or replacing
certain hardware and software used by the Company. The software utilized is
primarily originated and serviced by external providers. The Company is
communicating with those providers to ensure that appropriate steps are being
taken to remedy any Year 2000 issues. The Company has in place a steering
committee to oversee the Year 2000 readiness effort and has a formal plan in
place addressing the issue. Contingency planning efforts are part of the plan
are substantially completed for all major operations and functions of the
Company. Company-wide in-house testing has begun and is ongoing. The Company is
also in contact with its corporate customers, communicating the issues involved
with the Year 2000 issue and assessing their state of readiness. The total
anticipated capital expenditure associated with Year 2000 readiness is expected
to be approximately $1.4 million. Of this amount, approximately $900,000 has
been expended to date, with $72,000 being expended in 1999. Operating expenses
are estimated to be minimal, including two full time employees dedicated to the
project. Operating expenses incurred for the first three months of 1999 are
approximately $22,000 ($84,000 life to date) with an additional $56,000 expected
through completion of the project.
Market Risk Management:
Market risk is the risk of economic loss from adverse changes in the fair value
of financial instruments due to changes in (a) interest rates, (b) foreign
exchange rates, or (c) other factors that relate to market volatility of the
rate, index, or price underlying the financial instrument. The Corporation's
market risk is composed primarily of interest rate risk. The Corporation's
Asset/Liability Committee (ALCO) is responsible for reviewing the interest rate
sensitivity position of the Corporation and establishing policies to monitor and
limit the exposure to interest rate risk. Since nearly the Corporation's entire
interest rate risk exposure relates to the financial instrument activity of the
Bank, the Bank's Board of Directors review the policies and guidelines
established by ALCO.
The primary objective of asset/liability management is to provide an optimum and
stable net interest margin, after-tax return on assets and return on equity
capital, as well as adequate liquidity and capital. Interest rate risk is
monitored through the use of two complementary measures: dynamic gap analysis
and earnings simulation models. While each of the measurement techniques has
limitations, taken together they represent a reasonably comprehensive tool for
measuring the magnitude of interest rate risk inherent in the Corporation.
The earnings simulation model forecasts earnings for a one-year horizon frame
under a variety of interest rate scenarios. Management evaluates the impact of
the various rate simulations against earnings in a stable interest rate
environment. The most recent model projects net income would decrease by 1.6% if
interest rates would immediately rise by 200 basis points. It projects a
decrease in net income of 1.4% if interest rates would immediately fall by 200
basis points. Management believes this reflects a low level of risk from
interest rate movements and within management approved guideline levels for the
one-year time horizon. The earnings simulation model includes assumptions about
how the various components of the balance sheet and rate structure are likely to
react through time in different interest rate environments. These assumptions
are derived from historical analysis and management's outlook.
Interest rate sensitivity is managed through the use of security portfolio
management techniques, the use of fixed rate long-term borrowings from the FHLB,
the establishment of rate and term structures for time deposits and loans and
the sale of long-term fixed rate mortgages through the secondary mortgage
market. Although the Corporation has available to it the use of off-balance
sheet swap instruments to manage interest rate risk, these instruments are
historically rarely utilized. Management expects interest rates to be relatively
stable during 1999 and believes that the current modest level of interest rate
risk is appropriate.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings -
The Company is subject to various pending and threatened lawsuits in which
claims for monetary damages are asserted in the ordinary course of business.
While any litigation involves an element of uncertainty, in the opinion of
management, liabilities, if any, arising from such litigation or threat thereof
will not have a material impact on the financial position or results of
operations of the Company.
Item 2. Changes in Securities - Not Applicable
Item 3. Defaults upon Senior Securities - Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders (a) - (d) Second
Bancorp, Incorporated's Annual Shareholders Meeting was held on March 11, 1999.
The results of the votes on the matters presented to shareholders are as
follows: Of the 10,600,478 issued and outstanding shares eligible to vote,
9,514,400.529 were represented at the meeting. The shareholders approved
Proposal 1 regarding the amendment to the Articles of Incorporation to increase
the number of authorized shares from 20 million shares to 30 million shares with
votes "for" of 8,513,772.529, votes "against" of 888,689 and votes "abstained"
of 84,040. The shareholders did not approve Proposal 2 to amend the Regulations
of the Company that gives the Board of Directors greater discretion in changing
the number of directors and makes the Company's Regulations consistent with its
Articles of Incorporation with votes "for" of 7,495,042.529, votes "against" of
823,500 and votes "abstained" of 95,190. The shareholders did not approve
Proposal 3 to amend the Articles of Incorporation to increase the number of
classes of directors into which the Board of Directors in divided from two
classes to three classes with votes "for" of 7,031,076.529, votes "against" of
1,229,359 and votes "abstained" of 153,401. For Proposals 2 and 3, a "super
majority" favorable vote of 75% of eligible shares were required for passage.
The shareholders approved Proposal 4 to elect a Board of Directors consisting of
ten directors with votes as follows:
Share voted "FOR" Dr. David A. Allen 9,300,508.529
Share voted "FOR" John L. Pogue 9,301,259.529
Share voted "FOR" R. J. Wean, III 9,302,885.529
Share voted "FOR" Robert J. Webster 9,302,362.529
Share voted "FOR" Jack Gibson 9,303,452.529
Share voted "FOR" Norman C. Harbert 9,303,307.529
Share voted "FOR" James R. Izant 8,877,027.529
Share voted "FOR" John A. Anderson 9,301,607.529
Share voted "FOR" Alan G. Brant 9,300,916.529
Share voted "FOR" Phyllis J. Izant 9,206,048.529
The shareholders approved Proposal 5 to ratify the appointment of Ernst & Young
LLP as the independent Certified Public Accountants of the Company with votes
"for" of 9,268,393.529, votes "against" of 131,920 and votes "abstained" of
85,549.
Item 5. Other Information - Not Applicable
Item 6. Exhibits and Reports on Form 8-K:
The following exhibits are included herein:
(11) Statement re: computation of earnings per share
The Company did not file any reports on Form 8-K during the quarter ended March
31, 1999.
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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
undersigned thereunto duly authorized.
SECOND BANCORP INCORPORATED
Date: May 14, 1999 /s/ David L. Kellerman
-------------------------------------------------------------
David L. Kellerman, Treasurer
Signing on behalf of the registrant and as principal accounting officer and
principal financial officer.
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