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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[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 0-10849
SOUTHSIDE BANCSHARES CORP.
--------------------------
(Exact Name of Registrant as Specified in Its Charter)
MISSOURI 43-1262037
-------- ----------
(State or Other Jurisdiction (I.R.S. Employer Identification No.)
of Incorporation or Organization)
3606 GRAVOIS AVENUE, ST. LOUIS, MISSOURI 63116
- ---------------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (314) 776-7000
Securities registered pursuant to Section 12(b) of the Act:
Name of Each Exchange
Title of Each Class on Which Registered
------------------- ---------------------
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $1.00 Par Value
(Title of Class)
-----------------------------
Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such short er 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 the Registrant's knowledge, in definitive proxy
or information statements incorporated by references in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
At March 25, 1996, the aggregate market value, computed by the average
bid and asked prices, of the voting stock held by non-affiliates of the
Registrant was approximately $61,267,475.
At March 25, 1996, the number of shares outstanding of the Registrant's
common stock, $1.00 par value, was 2,849,650.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the Registrant's Annual Report to Shareholders for the
fiscal year ended December 31, 1995 (Part I, Part II and Part IV); and
(2) Portions of the Registrant's Proxy Statement for the Annual Meeting of
Shareholders scheduled for April 25, 1996 (Part III). PART I
PART 1
------
ITEM 1. Business
- -----------------
(a) General
-------
Southside Bancshares Corp. (the "Registrant" or "Southside") was
incorporated under the laws of the State of Missouri on January 25, 1982.
Southside became a registered bank holding company on January 3, 1983 when
South Side National Bank in St. Louis and a wholly-owned subsidiary of the
Registrant were merged on that date. The wholly-owned subsidiary of the
Registrant now continues banking operations under the name "South Side
National Bank in St. Louis." Prior to such merger, the Registrant was not
actively involved in any banking operations. Southside's principal office
is located at 3606 Gravois Avenue, St. Louis, Missouri 63116.
Southside, through its subsidiary banks, is primarily engaged in
commercial banking and providing trust services. The Registrant and its
subsidiaries had, at December 31, 1995, consolidated total assets of
approximately $513 million. The following table shows the year of
acquisition, total assets, total loans and total deposits at December 31,
1995, of each of Southside's wholly-owned subsidiary banks, all of which
are located in Missouri.
(in thousands)
Year of --------------
Bank Acquisition Total Assets Total Loans Total Deposits
---- ----------- ------------ -------------- --------------
South Side National Bank
in St. Louis 1983 $329,025 $185,463 $293,416
State Bank of DeSoto 1983 $55,828 $36,302 $50,388
Bank of Ste. Genevieve 1985 $86,982 $52,505 $78,244
The Bank of St. Charles
County 1986 $40,798 $29,554 $36,675
On March 17, 1995, the Registrant sold all of the issued and outstanding
stock of its wholly-owned subsidiary, Bay-Hermann-Berger Bank to an
unaffiliated financial institution. The Registrant's subsidiary banks,
which operated 13 banking offices in Missouri during 1995, are engaged in
the general banking business of accepting funds for deposit, making loans,
renting safe deposit boxes and performing such other banking services as
are usual and customary in banks of similar size and character. All of the
subsidiary banks offer real estate, commercial and consumer loans.
Customers of all subsidiary banks are offered regular checking,
interest-bearing checking, money market, savings, certificates of deposit
and IRA accounts. South Side National Bank in St. Louis ("SSNB"), State
Bank of DeSoto and The Bank of St. Charles County also provide BankMate and
CIRRUS 24-hour automated teller machines. Bank of Ste. Genevieve has a
24-hour banking machine on the Shazam and Plus automated teller networks at
its Plaza Bank location. SSNB also provides a 24-hour automated teller
machine (ATM) at its Customer-Bank Communications Terminal branch in St.
Anthony's Medical Center located at 10010 Kennerly Road, St. Louis County,
Missouri 63128.
Customers of all of the subsidiary banks are also offered the services of
the trust department of SSNB. At December 31, 1995, the combined market
value of fiduciary and custodial assets under management of the trust
department was approximately $287,000,000, which are not included in the
consolidated assets of the Registrant as they do not represent assets of the
Registrant.
The responsibility for the management of the subsidiary banks remains
with the officers and directors of the respective banks. Southside
provides the subsidiary banks with assistance and service in auditing,
record keeping, tax planning, trust operations, new business development,
lending, regulatory compliance and human resources management.
Southside has eight officers. Southside utilizes, to the extent
necessary, the officers, employees and services of its banking subsidiaries.
The total number of full and part-time employees of the Registrant and its
wholly-owned subsidiaries was 232 and 33, respectively, on December 31, 1995.
The information on pages 4 and 5 of the Southside Bancshares Corp. 1995
Annual Report is incorporated herein by reference.
(b) Supervision and Regulation
--------------------------
Southside is a bank holding company within the meaning of the Bank Holding
Company Act of 1956, as amended (the "BHCA"), and, as such, is subject to
regulation, supervision and examination by the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board"). Registered bank
holding companies are required to file an annual report with the Federal
Reserve Board and to provide the Federal Reserve Board with such additional
information as the Federal Reserve Board may require pursuant to the BHCA.
The BHCA requires that bank holding companies obtain prior approval from
the Federal Reserve Board before (1) acquiring (except in certain limited
circumstances) direct or indirect ownership or control of more than 5% of
the voting shares of any bank or bank holding company, (2) acquiring all or
substantially all of the assets of any bank or bank holding company, or (3)
merging or consolidating with any other bank holding company. In
determining whether to approve a proposed acquisition, merger or
consolidation, the Federal Reserve Board is required to take into
consideration the financial and managerial resources and future prospects
of the company or companies and the banks concerned, and the convenience and
needs of the community to be served.
The BHCA also prohibits any bank holding company, or any subsidiary
thereof, from acquiring, directly or indirectly, more than 5% of the voting
shares of, interest in, or all or substantially all of the assets of any
additional bank located outside the state in which the operations of such
bank holding company's banking subsidiaries were principally conducted on
the date which such company became a bank holding company unless the
acquisition of such shares or assets of a state bank by an out-of-state
bank holding company is specifically authorized by the statutes of the
state in which the bank is located. Missouri law permits banks and bank
holding companies in states contiguous to Missouri to acquire banks and bank
holding companies located in Missouri, if such states have passed reciprocal
interstate banking laws. A bank or bank holding company having its principal
operations in Iowa, Illinois, Kentucky, Tennessee, Arkansas, Oklahoma,
Kansas or Nebraska is currently permitted to acquire control of Missouri
banks since all of the states listed above have adopted regional or national
interstate banking legislation reciprocal with that of Missouri.
Missouri law provides that a bank holding company may not obtain control
of any bank if as a result of the acquisition, the total deposits in such
bank together with the total deposits of all banks located in the State of
Missouri controlled by the bank holding company would exceed 13% of the
total deposits of all depository financial institutions in the state,
including banks, thrifts and credit unions. In computing the total
deposits in all banks controlled by the bank holding company and the bank
which the holding company seeks to acquire, certificates of deposit in the
face amount of $100,000 or more, deposits from sources outside the United
States and deposits of banks other than banks controlled by the bank
holding company are to be deducted.
The BHCA further prohibits a bank holding company, with certain
exceptions, from engaging in and from acquiring direct or indirect
ownership or control of more than 5% of the voting shares of any company
engaged in a business other than that of banking, managing and controlling
banks, or furnishing services to its affiliated banks. An exception to this
prohibition provides that a bank holding company may engage in, and may own
shares of companies engaged in, certain businesses which the Federal
Reserve Board has determined to be so closely related to banking as to be a
proper incident thereto. The Federal Reserve Board has adopted regulations
specifying areas of activity which it regards as so closely related to
banking or the managing of banks as to be permissible for bank holding
companies under the law, subject to Board approval in individual cases.
The Registrant is not engaged in any such non-banking activities.
In October 1994, the Interstate Banking and Branching Efficiency Act of
1994 was enacted. As of October 1995, bank holding companies are permitted
to acquire banks in any state subject to state deposit caps and a 10%
nationwide deposit cap. In addition, this law provides for full interstate
branching by bank merger commencing on June 1, 1997. States may "opt-out"
of this branching provision prior to the effective date, and alternatively,
states may "opt-in" earlier than June 1, 1997.
Subsidiary banks of a bank holding company are subject to certain
restrictions imposed by the Federal Reserve Act on any extensions of credit
to the bank holding company or any of its other subsidiaries, on
investments in the stock or other securities thereof, and on the taking of
such stock or securities as collateral for loans to any borrower. Further,
under the BHCA and regulations of the Federal Reserve Board, a bank holding
company and its subsidiaries are prohibited from engaging in certain tie-in
arrangements in connection with any extension of credit, lease or sale of
property, or furnishing of services.
The primary subsidiary of the Registrant, South Side National Bank in
St. Louis, is a national bank and, as such, its primary bank regulatory
authority is the Office of the Comptroller of the Currency. A national
bank is also regulated by the Federal Reserve Board and the Federal Deposit
Insurance Corporation. Banks organized under state law which are members
of the Federal Reserve System are regulated and examined primarily by the
Federal Reserve Board and state banking authorities, while banks organized
under state law which are not members of the Federal Reserve System are
regulated and examined primarily by the Federal Deposit Insurance
Corporation and state banking authorities. The Bank of Ste. Genevieve is a
state-chartered bank which is a member of the Federal Reserve System, while
State Bank of DeSoto and The Bank of St. Charles County are state-chartered
banks which are not members of the Federal Reserve System. Regulation by
the federal and state banking authorities is designed to protect depositors
rather than shareholders.
Subsidiary bank dividends are the principal source of revenue to the
Registrant although management fees may be charged to cover services
rendered to such subsidiary banks. The ability of each subsidiary bank to
pay such dividends to Southside is subject to limitations established by
various state and federal laws and regulations. Banks organized under either
federal or state laws are limited in the amount of dividends they may
declare, depending upon the amount of their capital and surplus, and in
certain instances must obtain regulatory approval before declaring dividends.
Under the National Banking Act, until a national bank's surplus equals or
exceeds the amount of its capital, no dividend may be declared unless at
least one-tenth of the national bank's net profit earned since declaration
of the last dividend has been transferred to surplus. Under federal law,
regulatory approval is required for any dividend by a national bank or a
state-chartered bank which is a member of the Federal Reserve System if the
total of all dividends declared by the bank in any calendar year would exceed
the total of its net income for that year combined with its retained net
income for the preceding two years, less any required transfers to surplus.
Under Missouri law, a state-chartered bank which is not a member of the
Federal Reserve System whose surplus account for each dividend period does
not equal at least 40% of the amount of its capital stock is required to
transfer to its surplus account 10% of its net income for such dividend
period. Retained earnings in excess of any such required transfer to
surplus are available for dividends. In addition, sound banking practices
require the maintenance of adequate levels of capital. Federal regulatory
authorities have adopted standards for the maintenance of capital by banks,
and adherence to such standards may further limit the ability of banks to
pay dividends.
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), among other things, identifies the following capital standards
for depository institutions: well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized. A depository institution is well capitalized if it
significantly exceeds the minimum level required by regulation for each
relevant capital measure, adequately capitalized if it meets each such
measure, undercapitalized if it fails to meet any such measure,
significantly undercapitalized if it is significantly below any such
measure, and critically undercapitalized if it fails to meet any critical
capital level set forth in the regulations. FDICIA requires a bank that is
determined to be undercapitalized to submit a capital restoration plan, and
the bank's holding company must guarantee that the bank will meet its
capital plan, subject to certain limitations. FDICIA also prohibits banks
from making any capital distribution or paying any management fee if the
bank would thereafter be undercapitalized.
FDICIA grants the FDIC authority to impose special assessments on insured
depository institutions to repay FDIC borrowings from the United States
Treasury or other sources and to establish semiannual assessment rates on
Bank Insurance Fund ("BIF") member banks so as to maintain the BIF at the
designated reserve ratio defined in FDICIA. FDICIA also required the FDIC
to implement a risk-based insurance assessment system pursuant to which the
premiums paid by a depository institution are based on the probability that
the BIF will incur a loss in respect of such institution. The FDIC has
adopted a deposit insurance assessment system that places each insured
institution in one of nine risk categories based on the level of its capital,
evaluation of its risks by its primary state or federal supervisor,
statistical analysis and other information. The FDIC has recently adopted
an amendment to the BIF risk-based assessment schedule which effectively
eliminated deposit insurance assessments for most commercial banks and other
depository institutions with deposits insured by the BIF. Under the FDIC
amendment, the assessment rates for BIF-insured institutions range from
0.27% of insured deposits for the most financially troubled BIF members to
0% of deposits for most well-capitalized institutions, including over 90%
of BIF-insured institutions. The FDIC amendment became effective on
January 1, 1996 and will remain in effect at least through June 30, 1996.
The references in this section to various aspects of supervision and
regulation are brief summaries which do not purport to be complete and
which are qualified in their entirety by reference to applicable laws, rules
and regulations. Any change in applicable laws or regulations may have a
material effect on the business and prospects of Southside. The operations
of Southside may be affected by legislative changes and by the policies of
various regulatory authorities. Southside is unable to predict the nature
or the extent of the effects on its business and earnings that fiscal or
monetary policies, economic controls or new federal or state legislation
may have in the future.
The information contained in note 11 of the Notes to Consolidated Financial
Statements on page 44 of the Southside Bancshares Corp. 1995 Annual Report
is incorporated herein by reference.
(c) Competition
-----------
The Registrant and its subsidiaries encounter substantial competition in
all aspects of their banking activities. New banks may be established in
the market areas of the subsidiary banks, and the location of existing banks
may be moved on occasion. In addition, competing banks and competing bank
holding companies are continuing to establish separate banking facilities
or branches which have been permitted under Missouri law since 1972. Any
such new or relocated banks and facilities may have a tendency to increase
the competition faced by the subsidiary banks. Missouri law permits
unlimited, state-wide branching for both national and state-chartered banks,
subject to certain criteria.
As lenders, the subsidiary banks compete not only with other banks but
also with savings and loans associations, credit unions, finance companies,
insurance companies and other non-banking financial institutions that offer
credit. The subsidiary banks also compete for savings and time deposits
with other banks, savings and loan associations, credit unions, money market
and mutual funds, and issuers of commercial paper, securities and various
forms of fixed and variable income investments. The principal competitive
factors in the markets for deposits and loans are interest rates paid and
interest rates charged, along with related services; accessibility to
customers is also a substantial factor.
(d) Monetary Policy and Economic Conditions
---------------------------------------
The principal sources of funds to banks and bank holding companies are
deposits, stockholders' equity and borrowed funds. Stockholders' equity is
represented by common stock, surplus and retained earnings, as well as
current net income. Borrowed funds include short-, intermediate- and
long-term debt, as well as Federal funds purchased and securities sold
under agreements to repurchase. The availability of these various sources
of funds and other potential sources, such as preferred stock, convertible
securities and commercial paper, and the extent to which they are utilized,
depends on many factors, the most important of which are the monetary
policies of the Federal Reserve Board and the relative costs of different
types of funds.
An important function of the Federal Reserve Board is to regulate the
national supply of bank credit. Among the instruments of monetary policy
used by the Federal Reserve Board to implement these objectives are open
market operations in United States Government Securities, changes in the
discount rate on bank borrowings and changes in reserve requirements
against bank deposits. The foregoing means are used in varying combinations
to influence overall growth of bank loans. Investments and deposits may
also affect interest rates charged on loans and paid for deposits. The
availability and cost of various sources of funds are also affected by
fiscal policies of the United States Government.
The monetary policies of the Federal Reserve Board and the fiscal policies
of the United States Government have had a significant effect on operating
results of commercial banks in the past and are expected to continue to do
so in the future. No prediction can be made as to future changes in
interest rates, credit availability, deposit levels, loan demand or the
overall performance of banks generally and the subsidiaries of Southside in
particular.
(e) Statistical Information
-----------------------
The following selected statistical information relative to Southside and
its subsidiaries should be read in conjunction with Management's Discussion
and Analysis of Financial Condition and Results of Operations, the
Consolidated Financial Statements and Notes to Consolidated Financial
Statements included in the Southside Bancshares Corp. 1995 Annual Report,
incorporated herein by reference.
SELECTED STATISTICAL INFORMATION
I. Loan Portfolio
--------------
A. Types of Loans
--------------
The following table shows the classification of loans by major category
at December 31 for the years shown.
(in thousands)
--------------
1995 1994 1993 1992 1991
---- ---- ---- ----- ----
Commercial, financial
and agricultural $ 62,214 $ 69,219 $ 73,566 $ 88,026 $103,638
Real estate-commercial 88,321 82,807 86,258 90,860 104,998
Real estate-construction 15,510 11,019 9,540 17,555 17,499
Real estate-residential 102,418 108,134 110,806 132,941 147,316
Consumer 17,626 18,334 18,849 19,797 26,649
Industrial revenue bonds 7,789 9,311 8,544 10,841 10,707
Other loans 9,946 2,573 668 839 1,222
-------- -------- -------- -------- --------
TOTAL LOANS $303,824 $301,397 $308,231 $360,859 $412,029
======== ======== ======== ======== ========
B. Maturities and Sensitivities of Loans to Changes in Interest Rates
------------------------------------------------------------------
The following table shows the remaining maturities of selected loan
categories at December 31, 1995.
(in thousands)
--------------
One year Over one up Over
or less* to 5 years 5 years Total
-------- ----------- ------- -----
Commercial, financial
and agricultural $41,219 $19,341 $1,654 $62,214
Real estate-construction 11,377 4,133 - 15,510
Other loans 4,513 5,433 - 9,946
------- ------- ------ -------
TOTAL $57,109 $28,907 $1,654 $87,670
======= ======= ====== =======
* Demand loans, loans having no stated schedule of repayments and no stated
maturity, and overdrafts are reported as due "One year or less."
The following table shows the amount of loans above having maturities over
one year which have predetermined interest rates, and the amount which have
floating or adjustable interest rates at December 31, 1995 (in thousands).
Loans with predetermined interest rates $27,707
Loans with floating or adjustable interest rates 2,854
-------
$30,561
=======
II. Summary of Loan Loss Experience
-------------------------------
The information under the caption Allowance for Possible Loan Losses and
Risk Elements on pages 8 through 11 of the Southside Bancshares Corp. 1995
Annual Report is incorporated herein by reference.
The following table analyzes the loan loss experience of the Registrant
for the periods indicated:
(dollars in thousands)
Years Ended December 31,
------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
Average loans outstanding, net of
unearned discount $297,480 $294,749 $330,869 $394,967 $414,853
======== ======== ======== ======== ========
Allowance at beginning of year $ 7,144 $ 8,334 $ 9,994 6,646 $ 6,229
-------- -------- -------- -------- --------
Loans charged off:
Commercial, financial and
agricultural 1,606 821 3,087 1,976 1,903
Real estate - construction - - - - -
Real estate - mortgage 294 1,302 1,884 1,290 385
Consumer 274 195 528 975 568
-------- -------- -------- -------- --------
Total loans charged off 2,174 2,318 5,499 4,241 2,856
-------- -------- -------- -------- --------
Recoveries:
Commercial, financial and
agricultural 661 276 615 278 88
Real estate - construction - - - - -
Real estate - mortgage 186 568 531 6 74
Consumer 75 91 85 63 92
-------- -------- -------- -------- --------
Total recoveries 922 935 1,231 347 254
-------- -------- -------- -------- --------
Net loans charged off 1,252 1,383 4,268 3,894 2,602
-------- -------- -------- -------- --------
Provisions charged to
operating expense 70 193 2,608 7,242 3,019
-------- -------- -------- -------- --------
Adjustment due to sale of
Bay-Hermann-Berger Bank (327) - - - -
-------- -------- -------- -------- --------
Allowance at end of year $ 5,635 $ 7,144 $ 8,334 $ 9,994 $ 6,646
======== ======== ======== ======== ========
Ratio of net charge-offs during
year to average loans outstanding 0.42% 0.47% 1.29% 0.99% 0.63%
======== ======== ======== ======== ========
The following table sets forth at the end of each reported period, a
breakdown of the allowance for possible loan losses by major categories of
loans and the percentage of loans in each category to total loans at the
dates indicated:
Years Ended December 31,
(dollars in thousands)
------------------------
1995 1994 1993 1992 1991
----------------- ---------------- ---------------- ---------------- ----------------
Percent Percent Percent Percent Percent
of Loans of Loans of Loans of Loans of Loans
in Each in Each in Each in Each in Each
Category Category Category Category Category
Allow- To Total Allow- To Total Allow- To Total Allow- To Total Allow- To Total
ance Loans ance Loans ance Loans ance Loans ance Loans
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
Commercial,
financial
and
agricultural $3,935 23.0% $5,094 26.0% $5,984 26.6% $6,644 27.4% $4,896 27.7%
Real estate -
construction 300 5.1% 300 3.7% 300 3.1% 300 4.9% 300 4.2%
Real estate -
mortgage 1,000 62.8% 1,500 63.4% 1,500 63.9% 2,000 62.0% 1,000 61.2%
Consumer
loans to
individuals 200 5.8% 200 6.1% 500 6.2% 1,000 5.5% 400 6.6%
Other loans
(Unallocated) 200 3.3% 50 0.8% 50 0.2% 50 0.2% 50 0.3%
------ ------ ------- ------ ------- ------ ------- ------ ------ ------
$5,635 100.0% $ 7,144 100.0% $ 8,334 100.0% $ 9,994 100.0% $6,646 100.0%
====== ====== ======= ====== ======= ====== ======= ====== ====== ======
III. Investment Portfolio
--------------------
The following table summarizes the carrying values and
weighted average yields of investments in debt securities by
contractual maturity. Actual maturities will differ from
contractual maturities because borrowers have the right to prepay
obligations with or without prepayment penalties. A maturity
distribution for mortgage-backed securities has not been prepared
due to their accelerated prepayment characteristics.
(dollars in thousands)
December 31, 1995
------------------------
Available for Sale Held to Maturity
--------------------- ---------------------
Carrying Average Carrying Average
Value Yield* Value Yield*
-------- ------- -------- -------
U.S. Treasury securities and obligations of U.S.
government agencies and corporations:
Within 1 year $2,307 5.05% $18,275 3.93%
After 1 but within 5 years 5,302 6.26 51,550 5.58
After 5 but within 10 years - - 13,261 5.55
After 10 years - - - -
------- --------
Total 7,609 5.92 83,086 5.36
======= ========
Obligations of states and political subdivisions:
Within 1 year 85 5.65 1,389 6.40
After 1 but within 5 years 458 7.98 7,494 6.17
After 5 but within 10 years - - 10,204 5.36
After 10 years - - 2,788 5.74
------- --------
Total 543 7.62 21,875 5.77
======= ========
Other debt securities:
Within 1 year - - 150 6.54
After 1 but within 5 years 1,160 6.85 321 6.06
After 5 but within 10 years - - - -
After 10 years 102 5.56 - -
------- --------
Total 1,262 6.74 471 6.21
======= ========
Total investment securities:
Within 1 year 2,392 5.07 19,814 4.12
After 1 but within 5 years 6,920 6.33 59,365 5.66
After 5 but within 10 years - - 23,465 5.46
After 10 years 102 5.56 2,788 5.74
------- --------
Total 9,414 5.99 105,432 5.33
======= ========
Mortgage-backed securities 40,738 6.31 4,190 6.49
------- --------
$50,152 6.23 $109,622 5.48
======= ==== ======== ====
* The weighted average yield for each maturity range was calculated using
the yield on each security within that range, weighted by the amortized
cost of each security at December 31, 1995. The yields for obligations
of states and political subdivisions exempt from federal income taxes have
been adjusted to a fully tax-equivalent basis at a maximum tax rate of 34%
for 1995, adjusted for the disallowance of interest cost to carry
nontaxable securities.
ITEM 2. Properties
- -------------------
The Registrant owned the following physical properties as of December 31,
1995:
South Side National Bank in St. Louis, a subsidiary of the Registrant,
owns a nine-story banking and office building at 3606 Gravois Avenue in
St. Louis, Missouri 63116, and the adjacent drive-up facilities and three
parking lots. The Registrant and this subsidiary occupy all nine stories
in the building. This subsidiary of the Registrant owns the land and bank
building located at its branch facility at 3420 Iowa Street, St. Louis,
Missouri 63118. This subsidiary also owns the land and bank building at
9914 Kennerly Road in St. Louis County upon which its South County branch
is located. This is a two- story building and the second floor is leased to
tenants for an annual rental of approximately $85,000. This subsidiary also
owns the land and bank buildings at 10385 West Florissant, Ferguson,
Missouri 63136, 8440 Morganford Road, St. Louis County, Missouri 63123 and
10330 Gravois Road, St. Louis, Missouri 63126. This subsidiary leases a
branch facility at 4666 Lansdowne, St. Louis, Missouri 63116.
State Bank of DeSoto owns the land and a two-story building at its
main banking office at 224 S. Main Street, DeSoto, Missouri 63020. The
State Bank of DeSoto also owns the land and a one-story building housing
its facility located at 2000 Rock Road, DeSoto, Missouri 63020.
Bank of Ste. Genevieve owns the land, a one-story building and an adjacent
parking lot at its main banking office at Second and Market Streets, Ste.
Genevieve, Missouri 63670 and the land and one-story building at its
facility at 710 Parkwood Drive, Ste. Genevieve, Missouri 63670.
The Bank of St. Charles County owns the land and a two-story building at
its banking facility at 6004 Highway 94 South, St. Charles, Missouri 63304.
This subsidiary bank occupies one story in the building and leases
approximately 5,000 square feet for an annual rental of $17,000. This
subsidiary bank owns the land and a one-story building at its facility
located at 750 First Capitol Drive, St. Charles, Missouri 63301.
In the opinion of the Registrant's management, the physical properties of
the subsidiary banks are suitable and adequate and are being productively
utilized.
ITEM 3. Legal Proceedings
- --------------------------
The information contained in note 13 of the Notes to Consolidated
Financial Statements on page 45 of the Southside Bancshares Corp. 1995
Annual Report is incorporated herein by reference.
ITEM 4. Submission of Matters to a Vote of Security Holders
- ------------------------------------------------------------
None.
Executive Officers of the Registrant
- -------------------------------------
The following is a list of the names and ages of the executive officers
of the Registrant and their business history for the past five years:
Name, Age and Position with Principal Occupations or Employment Since
the Company January 1, 1990
- --------------------------- -------------------------------------------
Thomas M. Teschner (39) President and Chief Executive Officer,
President and Chief Southside Bancshares Corp. (Since June 1992);
Executive Officer President and Chief Executive Officer, South
Side National Bank in St. Louis (Since
October 1992); Senior Vice President and
Senior Loan Officer, South Side National
Bank in St. Louis and Southside Bancshares
Corp. (September 1986 - June 1992).
Joseph W. Pope (30) Chief Financial Officer and Senior Vice
Senior Vice President and President, Southside Bancshares Corp.
Chief Financial Officer (Since April 1995); Vice President, South
Side National Bank in St. Louis (Since
November 1992); Certified Public Accountant,
KPMG Peat Marwick LLP (August 1987 -
November 1992).
PART II
-------
ITEM 5. Market for the Registrant's Common Equity and Related Stockholder
Matters
- ---------------------------------------------------------------------------
The only class of the Registrant's common equity is common stock, $1.00
par value (the "Common Stock"). The number of shares of Common Stock of the
Registrant outstanding at March 25, 1996 was 2,849,650 shares, and the market
price for the Common Stock on March 25, 1996 was $19.00 bid; $24.00 asked.
The information on page 29 of the Southside Bancshares Corp. 1995 Annual
Report to Shareholders is incorporated herein by reference.
ITEM 6. Selected Financial Data
- -------------------------------
The information on page 5 of the Southside Bancshares Corp. 1995 Annual
Report to Shareholders is incorporated herein by reference.
ITEM 7. Management's Discussion and Analysis of Financial Condition and
Results of Operation
- ------------------------------------------------------------------------
The information on pages 6 through 30 of the Southside Bancshares Corp.
1995 Annual Report to Shareholders is incorporated herein by reference.
ITEM 8. Financial Statements and Supplementary Data
- ---------------------------------------------------
The information on pages 31 through 47 of the Southside Bancshares Corp.
1995 Annual Report to Shareholders is incorporated herein by reference.
ITEM 9. Changes in and Disagreements With Accountants on Accounting and
Financial Disclosure
- -----------------------------------------------------------------------
None.
PART III
--------
ITEM 10. Directors and Executive Officers of the Registrant
- ------------------------------------------------------------
The information on pages 6 and 7 of the Southside Bancshares Corp. Proxy
Statement for the Annual Meeting of Shareholders scheduled for April 25,
1996 is incorporated herein by reference. The information on page 15 of
the Southside Bancshares Corp. Proxy Statement for the Annual Meeting of
Shareholders scheduled for April 25, 1996, with respect to compliance by the
Registrant's officers and directors with Section 16(a) of the Securities
Exchange Act of 1934, is incorporated herein by reference. The required
information regarding Southside's executive officers is contained in PART I
in the item captioned "Executive Officers of the Registrant."
ITEM 11. Executive Compensation
- --------------------------------
The information on pages 8 through 14 of the Southside Bancshares Corp.
Proxy Statement for the Annual Meeting of Shareholders scheduled for April
25, 1996 is incorporated herein by reference.
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
- ------------------------------------------------------------------------
The information on pages 3 and 4 of the Southside Bancshares Corp. Proxy
Statement for the Annual Meeting of Shareholders scheduled for April 25,
1996, is incorporated herein by reference.
ITEM 13. Certain Relationships and Related Transactions
- --------------------------------------------------------
The information on page 14 of the Southside Bancshares Corp. Proxy
Statement for the Annual Meeting of Shareholders scheduled for April 25,
1996, is incorporated herein by reference.
PART IV
-------
ITEM 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
- --------------------------------------------------------------------------
(a) Documents filed as a part of this Report:
Report
Page Number*
------------
1. Financial Statements:
Independent Auditors' Report . . . . . . . . . . . . . . . 31
Consolidated Balance Sheets -
December 31, 1995 and 1994 . . . . . . . . . . . . . 32
Consolidated Statements of Income -
Years Ended December 31, 1995, 1994 and 1993 . . . . 33
Consolidated Statements of Shareholders' Equity -
Years Ended December 31, 1995, 1994 and 1993 . . . . 34
Consolidated Statements of Cash Flows -
Years Ended December 31, 1995, 1994 and 1993 . . . . 35
Notes to Consolidated Financial Statements . . . . . . . . 36
* Page number(s) refer to pages of statements incorporated herein by
reference to Southside Bancshares Corp. 1995 Annual Report filed as
Exhibit 13 hereto.
2. Financial Statement Schedules:
All other schedules are omitted because they are not applicable,
not required, or the information is included elsewhere in the Consolidated
Financial Statements.
3. Exhibits:*
3(i) Restated Articles of Incorporation of the Registrant filed as
Exhibit 4(a) to the Registrant's Registration Statement on
Form S-8 on May 2, 1994, incorporated herein by reference.
3(ii) Restated Bylaws of the Registrant with amendments through
December 28, 1995 filed as Exhibit 4(b) to the Registrant's
Registration Statement on Form S-8 on January 31, 1996,
incorporated herein by reference.
4(a) Instruments defining the rights of holders of the common stock,
$1 par value, of the Registrant incorporated herein by reference
from the Restated Articles of Incorporation of the Registrant
filed as Exhibit 4(a) to the Registrant's Registration Statement
on Form S-8 on May 2, 1994, and from the Restated Bylaws of the
Registrant with amendments through December 28, 1995 filed as
Exhibit 4(b) to the Registrant's Registration Statement on Form
S-8 on January 31, 1996, incorporated herein by reference.
4(b) Rights Agreement dated as of May 27, 1993 between the Registrant
and Boatmen's Trust Company filed as Exhibits 1 and 2 to the
Registrant's Registration Statement on Form 8-A on May 27,
1993, incorporated herein by reference.
10(a) Purchase and Assumption Agreement, Indemnity Agreement,
Consent to Assignment, Agreement to Purchase Assets and Assume
Liabilities and Guaranty to the Registrant all dated June 28,
1990 whereby South Side National Bank in St. Louis acquired
assets and assumed certain deposit liabilities of St. Louis
County Savings Association, F.A. from the Resolution Trust
Corporation, filed as Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5
to the Registrant's Form 8-K dated July 12, 1990, incorporated
herein by reference.
10(b) Employment Agreement Dated April 27, 1995 between the
Registrant, South Side National Bank in St. Louis and Thomas
M. Teschner.
10(c) Southside Bancshares Corp. 1993 Non-Qualified Stock Option
Plan, filed as Exhibit 10(e) to the Registrant's Report on
Form 10-K for the fiscal year ended December 31, 1994,
incorporated herein by reference.
13 Portions of the Annual Report to Shareholders of the
Registrant for the fiscal year ended December 31, 1995.
21 Subsidiaries of the Registrant incorporated herein by
reference from page 4 of the Annual Report to Shareholders of
the Registrant for the fiscal year ended December 31, 1995
filed as Exhibit 13 to this Report.
23 Independent Auditors' Consent of KPMG Peat Marwick LLP.
27 Financial Data Schedule.
99 Additional Exhibits - the Registrant's Proxy Statement for the
Annual Meeting of Shareholders on April 25, 1996, specifically
excluding information required by Item 402(k) and (l).
* The exhibits included under Exhibit 10 constitute all management
contracts, compensatory plans and arrangements required to be filed
as an exhibit to this form pursuant to Item 14(c) of this report.
(b) Reports filed on Form 8-K:
The following reports on Form 8-K were filed for the three months
ended December 31, 1995:
On December 6, 1995, the Registrant filed a Current Report on Form
8-K reporting press releases announcing record earnings, a fourth
quarter 1995 cash dividend and a 10 for 1 stock split.
On December 15, 1995, the Registrant filed a Current Report on Form
8-K reporting the third quarter 1995 results.
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.
SOUTHSIDE BANCSHARES CORP.
By /s/ Thomas M. Teschner
----------------------
Thomas M. Teschner
President and Chief Executive Officer
(Principal Executive Officer)
March 28 , 1996
-----------------
By /s/ Joseph W. Pope
------------------
Joseph W. Pope
Senior Vice President and Chief Financial
Officer (Principal Financial Officer,
Controller and Principal Accounting Officer)
March 28 , 1996
-----------------
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/ Howard F. Etling /s/ Thomas M. Teschner
-------------------- ----------------------
Howard F. Etling Thomas M. Teschner
Chairman of the Board President, Chief Executive Officer
and Director
Date: March 28 , 1996 Date: March 28 , 1996
---------------- ----------------
/s/ Richard F. Baalmann /s/ Joseph W. Beetz
----------------------- -------------------
Richard F. Baalmann Joseph W. Beetz
Director Director
Date: March 28 , 1996 Date: March 28 , 1996
---------------- ----------------
/s/ Ralph Crancer, Jr. /s/ Douglas P. Helein
---------------- ----------------
Ralph Crancer, Jr. Douglas P. Helein
Director Director
Date: March 28 , 1996 Date: March 28 , 1996
---------------- ----------------
/s/ Earle J. Kennedy, Jr. /s/ Daniel J. Queen
------------------------- -------------------
Earle J. Kennedy, Jr. Daniel J. Queen
Director Director
Date: March 28 , 1996 Date: March 28 , 1996
---------------- ----------------
/s/ Norville K. McClain /s/ Richard G. Schroeder, Sr.
----------------------- -----------------------------
Norville K. McClain Richard G. Schroeder, Sr.
Director Director
Date: March 28 , 1996 Date: March 28 , 1996
---------------- ----------------
EXHIBIT INDEX
-------------
REGULATION S-K REPORT
EXHIBIT PAGE
NO. DESCRIPTION NO.
- -------------- ----------- ------
3(i) Restated Articles of Incorporation of the Registrant *
filed as Exhibit 4(a) to the Registrant's Registration
Statement on Form S-8 on May 2, 1994, incorporated
herein by reference.
3(ii) Restated Bylaws of the Registrant with amendments *
through December 28, 1995 filed as Exhibit 4(b) to the
Registrant's Registration Statement on Form S-8 on
January 31, 1996, incorporated herein by reference.
4(a) Instruments defining the rights of holders of the *
common stock, $1 par value, of the Registrant
incorporated herein by reference from the Restated
Articles of Incorporation of the Registrant filed as
Exhibit 4(a) to the Registrant's Registration Statement
on Form S-8 on May 2, 1994, and from the Restated
Bylaws of the Registrant with amendments through
December 28, 1995 filed as Exhibit 4(b) to the
Registrant's Registration Statement on Form S-8 on
January 31, 1996, incorporated herein by reference.
4(b) Rights Agreement dated as of May 27, 1993 between *
Registrant and Boatmen's Trust Company filed as
Exhibits 1 and 2 to Registrant's Registration Statement
on Form 8-A on May 27, 1993, incorporated herein by
reference.
10(a) Purchase and Assumption Agreement, Indemnity Agreement, *
Consent to Assignment, Agreement to Purchase Assets and
Assume Liabilities and Guaranty to Registrant all dated
June 28, 1990 whereby South Side National Bank in St.
Louis acquired assets and assumed certain deposit
liabilities of St. Louis County Savings Association,
F.A. from the Resolution Trust Corporation, filed as
Exhibits 10.1, 10.2, 10.3, 10.4 and 10.5 to Registrant's
Form 8-K dated July 12, 1990, incorporated herein by
reference.
10(b) Employment Agreement Dated April 27, 1995 between
Registrant, South Side National Bank in St. Louis and
Thomas M. Teschner.
10(c) Southside Bancshares Corp. 1993 Non-Qualified Stock *
Option Plan, filed as Exhibit 10(e) to the Registrant's
Report on Form 10-K for the fiscal year ended December
31, 1994, incorporated herein by reference.
13 Portions of the Annual Report to Shareholders of the
Registrant for the fiscal year ended December 31, 1995.
21 Subsidiaries of the Registrant incorporated herein by
reference from page 4 of the Annual Report to
Shareholders of the Registrant for the fiscal year
ended December 31, 1995 filed as Exhibit 13 to this
Report.
23 Independent Auditors' Consent of KPMG Peat Marwick LLP.
27 Financial Data Schedule.
99 Additional Exhibits - the Registrant's Proxy Statement
for the Annual Meeting of Shareholders on April 25,
1996, specifically excluding information required by
Item 402(k) and (l).
* Incorporated by reference.