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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [FEE REQUIRED]
December 31, 1997 0-6094
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(For the fiscal year ended) (Commission file number)
NATIONAL COMMERCE BANCORPORATION
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(Exact name of registrant as specified in its charter)
Tennessee 62-0784645
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(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
One Commerce Square, Memphis, Tennessee 38150 (901)523-3242
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(Address of principal executive offices) (Telephone number)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $2 par value
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(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 shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
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The aggregate market value of the voting stock held by non-affiliates of
the registrant as of March 6, 1998, was approximately $1,476,550,000.
The number of shares of common stock outstanding, as of March 6, 1998, was
49,137,390.
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 reference in Part III of this Form 10-K or any
amendment to this Form. X
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of the annual Proxy Statement relating to the 1998 Annual Meeting
of Shareholders of National Commerce Bancorporation are incorporated by
reference into Part III. Portions of the 1997 National Commerce Bancorporation
Annual Report are incorporated by reference into Parts I and II.
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PART I.
This Annual Report on Form 10-K may contain or incorporate by reference
statements which may constitute "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. Prospective investors are
cautioned that any such forward-looking statements are not guarantees for future
performance and involve risks and uncertainties, and that actual results may
differ materially from those contemplated by such forward-looking statements.
Important factors currently known to management that could cause actual results
to differ materially from those in forward-looking statements include
significant fluctuations in interest rates, inflation, economic recession,
significant changes in the federal and state legal and regulatory environment,
significant underperformance in the Company's portfolio of outstanding loans,
and competition in the Company's markets. The Company undertakes no obligation
to update or revise forward-looking statements to reflect changed assumptions,
the occurrence of unanticipated events or changes to future operating results
over time.
ITEM 1. BUSINESS.
NATIONAL COMMERCE BANCORPORATION:
National Commerce Bancorporation ("NCBC" or "the Company"), a Tennessee
corporation, is a bank holding company formed in February 1966 as Tennessee
Financial Corporation. The corporate name was changed to United Tennessee
Bancshares Corporation in 1970 and the present corporate name was adopted in
April 1978. The business of NCBC consists of owning all of the outstanding
capital stock of (1) National Bank of Commerce, Memphis, Tennessee ("NBC"), (2)
Nashville Bank of Commerce, Nashville, Tennessee ("Nashville" or "the Nashville
Bank"), (3) NBC Bank, FSB, Knoxville, Tennessee ("Knoxville" or "the Knoxville
Bank"), (4) NBC Bank, FSB, Roanoke, Virginia ("Roanoke"), (5) Commerce Capital
Management, Inc., Memphis, Tennessee ("Commerce Capital"), (6) Brooks, Montague
& Associates, Inc., Chattanooga, Tennessee ("Brooks Montague") (7) TransPlatinum
Service Corp., Nashville, Tennessee ("TransPlatinum") (8) U.S.I. Alliance Corp.
("USI"), Memphis, Tennessee (9) Monroe Properties, Inc. ("Monroe") Memphis,
Tennessee and National Commerce Capital Trust I ("Trust I"), Memphis, Tennessee.
NCBC provides NBC, Nashville, Knoxville, and Roanoke ("the Banks"), Commerce
Capital, Brooks Montague, TransPlatinum, USI, Monroe and Trust I with advice and
counsel relating to financial and employee benefit matters, performs certain
record-keeping functions relating to compliance with accounting and regulatory
requirements and provides assistance in obtaining additional financing.
NBC furnishes a full range of banking and trust services through 29 branch
and SUPER MONEY MARKET(R) facilities in Memphis and Shelby County, Tennessee,
two SUPER MONEY MARKET facilities located in Jackson, Tennessee, one SUPER MONEY
MARKET facility located in Cleveland, Tennessee and one branch facility in
Somerville, Tennessee. NBC has five active, wholly owned, non-banking
subsidiaries, Commerce General Corporation ("Commerce General"), Commerce
Finance Company ("Commerce Finance"), NBC Capital Markets Group, Inc. ("Capital
Markets") NBC Insurance Services, Inc. ("NBC Insurance") and National Commerce
Bank Services, Inc. ("NCBS"). Commerce General provides a variety of data
processing services to the Banks and other commercial enterprises. Commerce
Finance emphasizes second- and third-mortgage loans. Capital Markets was
chartered as Commerce Investment Corporation in September 1986 to serve the
needs of individual investors as a broker-dealer of investment products,
including stocks, bonds, municipal obligations, mutual funds and unit investment
trusts. The name was changed to NBC Capital Markets Group, Inc. effective
January 1, 1997. NBC Insurance provides life, property and casualty insurance
and annuities through NBC's in-store retail banking system. NCBS provides
supermarket banking services to other financial institutions.
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The Nashville Bank was organized in September 1985 to operate full-service
banking facilities in Kroger supermarkets within the Nashville area. The SUPER
MONEY MARKET branches offer a wide variety of personal banking services. The
Nashville Bank is a state chartered bank with 22 SUPER MONEY MARKET branch
locations and three traditional branches. The Nashville Bank also operates four
stand-alone automated teller machines ("ATMs") in the Nashville area.
The Knoxville Bank was organized in June 1986 as a state chartered bank to
operate full-service SUPER MONEY MARKET banking facilities within the Knoxville
area. During 1994, the Knoxville Bank was converted to a federally chartered
savings bank and expanded into North Carolina. The Knoxville Bank has 14 SUPER
MONEY MARKET branch locations and one traditional branch location in the
Knoxville area with one branch location in Pigeon Forge, Tennessee, 14 branch
locations in the Raleigh-Durham, North Carolina area, five branches in
Greensboro, North Carolina, one branch in Greenville, North Carolina, three
branches in Winston-Salem, North Carolina, one branch location in Olive Branch,
Mississippi, one branch in Southaven, Mississippi and one branch in Paris,
Tennessee. The Knoxville Bank has one branch each in the following Georgia
locations: Calhoun, Canton, Cumming, Dalton, Ft. Oglethorpe, Gainesville,
Moultrie, and Rome. The Knoxville Bank also operates one stand-alone ATM in the
Knoxville area. The Knoxville Bank also offers loans on an indirect basis
through area automobile dealers. The Knoxville Bank has two subsidiaries,
Kenesaw Leasing, Inc. and J & S Leasing, Inc., both equipment leasing firms.
On July 13, 1993, the Company acquired First Federal Savings Bank, a $4.8
million institution located in Belzoni, Mississippi. The name was changed to NBC
Bank, FSB, and its business expanded into Virginia. In early 1998, the Belzoni,
Mississippi branch was sold and Roanoke now has eight SUPER MONEY MARKET
branches in the Roanoke, Virginia area.
NCBC, through NCBS, has executed SUPER MONEY MARKET sublicense agreements
with other financial institutions. Currently, agreements have been executed
covering locations in over 48 states and foreign countries, including Peru,
Canada, Australia, Chile, Colombia, Guam and Portugal. As of year end, NCBS has
assisted various banks with over 1,068 locations through either a license or
consulting relationship. The Company has one major competitor in its
supermarket branch sublicensing activity. The competitor is a non-financial
institution with nationwide operations. On November 7, 1989, the service mark
Super Money Market (Stylized) was registered on the U.S. Patent and Trademark
Office Principal Register as Reg. No. 1,565,038. This registration presently
constitutes prima facie proof that NCBC owns the mark. If certain formalities
are observed, the registration will remain in force for 20 years from the date
of registration and may be renewed for successive terms of ten years each. On
April 2, 1991 the service mark Super Money Market (non-stylized) for banking
services was registered on the Supplemental Register under Reg. No. 1,640,085.
If certain formalities are observed, registration will remain in force for ten
years from the date of registration and may be renewed for successive periods.
Commerce Capital and Brooks Montague are registered as investment advisors
with the Securities and Exchange Commission. The primary function of Monroe
Properties, Inc. is to be used in connection with the acquisition of real estate
through foreclosure or deed in lieu of foreclosure.
In September of 1995, NCBC acquired 30% of TransPlatinum Service Corp.
which offers financial services to the trucking and petroleum industries and
bankcard services to merchants. TransPlatinum is located in Nashville,
Tennessee. On February 29, 1996, NCBC acquired the remaining 70% of
TransPlatinum.
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U.S.I. Alliance Corp. was organized in November 1995, and commenced
business in February, 1996. USI primarily leases personal lockboxes in long-term
care facilities.
National Commerce Capital Trust I was organized in March 1997 as a special
purpose company to offer floating rate capital trust pass-through securities.
Substantially all employees of the Company are also employees of one or
more of its direct or indirect subsidiaries.
NATIONAL BANK OF COMMERCE:
From its inception in 1873, and through the granting of its charter as a
national bank in 1933, NBC has operated a full-service commercial bank and trust
business in metropolitan Memphis, Tennessee. As of December 31, 1997, NBC
operated 13 traditional branches and 20 SUPER MONEY MARKET facilities, 17 in
metropolitan Memphis and one in Cleveland, Tennessee, two in Jackson, Tennessee
and one branch in Somerville, Tennessee. At December 31, 1997, NBC had
$2,075,787,000 in deposits and was the third largest bank in the Memphis service
area (population approximately 1,000,000) and the sixth largest bank in
Tennessee, measured by deposits. Memphis is the largest city in Tennessee and is
the center of a diversified distribution, commercial and agricultural area. NBC
provides complete banking facilities and services to the Mid-South area through
various divisions and departments, described below. The retail banking activity
is carried on through the Branch Banking Division, the Money Market Division,
the Executive Banking Division, and the Consumer Services Division. NBC's
Commercial Banking Group is composed of seven divisions: the Metropolitan
Lending Division, the Leasing Division, the Asset Based Lending Division, the
Real Estate Lending Division, the National Accounts Division, the Correspondent
Banking Division and the Mortgage Lending Division ("NBC Mortgage"). Trust
services are provided by the Trust Division. Staff support for NBC is provided
by its Human Resource, Marketing, Operations and Financial/Administrative
Divisions.
Retail Services: NBC provides its customers with a variety of retail
banking services. Among such services are checking accounts and savings
programs, night depository services, safe deposit facilities and several
consumer loan programs, including installment loans for the purchase of consumer
goods and revolving lines of credit. Customers are provided with current
information regarding these services through NBC's marketing program. NBC has
installed 48 ATMs (24-hour tellers), including ATMs located at Plough, Inc.,
Graceland, Methodist Hospital, Memphis International Airport, University of
Memphis campus, Southern College of Optometry, Sitel Corporation, an Amoco
Station and Rhodes College campus. At year end, consumer loans and leasing
activity accounted for approximately 36% of NBC's outstanding loans. NBC
participates in the MasterCard and Visa Card Programs, national consumer debit
and credit card plans, under which NBC discounts sales drafts (accounts
receivable arising from charges made with MasterCard and Visa Cards), without
recourse, for participating merchants. NBC also offers a Professional Services
Plan, Equity Credit Lines and other credit services for individuals. A monthly
revolving credit charge is levied on the purchaser depending on the credit plan
desired. At December 31, 1997, NBC had consumer lines of credit totaling
$76,091,000. NBC sold substantially all of its credit card portfolio in fourth
quarter 1997 and now offers various credit card plans through MBNA Corp.
Commercial Services: NBC provides a variety of services for commercial
enterprises, including checking accounts, certificates of deposit, cash
management services, short-term loans for seasonal or working capital purposes,
and term loans for fixed assets and expansion purposes. In addition to these
general services, NBC also provides accounts receivable and inventory
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financing, commodity loans and commercial loans tailored to an individual
customer's needs. Secured and unsecured commercial loans and commodity loans, at
December 31, 1997, accounted for approximately 31% of the loans made by NBC.
Real estate construction and long-term mortgage loans (including first mortgage
refinance loans) accounted for approximately 33% of NBC's outstanding loans at
December 31, 1997.
Correspondent Banking: NBC has correspondent relationships with
approximately 160 banks located in Tennessee, Arkansas, Missouri, Florida,
Mississippi, Kentucky, and Alabama to which it provides a range of financial
services as well as advice in various fields of banking policy and operations.
Aggregate balances of correspondent banks at NBC averaged approximately
$45,781,000 in 1997.
Trust Services: Through its Trust Division, NBC acts as trustee, executor,
administrator, guardian, custodian and depository for a number of individuals
and corporations. The Bank offers investment advisory services to its customers
in addition to portfolio management. At December 31, 1997, the Trust Division
administered assets valued at approximately $2,904,000,000.
International Services: NBC has established 11 accounts with foreign
banks, primarily in Europe, to handle international trade relationships. Two
foreign banks have accounts with NBC for the same purpose. NBC does not now,
nor does it intend to, engage in speculative trading of foreign currencies.
Non-Bank Subsidiaries: In addition to computer services for NBC, Commerce
General offers hospital processing. During the year ended December 31, 1997,
approximately 83% of the total revenues of Commerce General were derived from
services provided to NBC and 17% from services provided to other customers. NBC
Capital Markets Group, Inc. (formerly named Commerce Investment Corporation)
provides investment services to individual and institutional investors. In
1991, the institutional investor activity of NBC's Investment Division was
merged into Capital Markets. At December 31, 1997, Capital Market's capital
totaled $16,733,000. Capital Markets is registered as a broker-dealer with the
Securities and Exchange Commission and the National Association of Securities
Dealers, Inc., and is a member of the Security Investor Protection Corporation.
Commerce Finance Company was organized in September, 1992 and commenced business
in March, 1993 in the consumer finance segment of the retail credit industry as
a subsidiary of NCBC. In 1996, the store-front branches and most of the assets
of Commerce Finance were sold and Commerce Finance began operating on a more
centralized basis with emphasis on second- and third-mortgage loans which come
from bank referrals. At December 31, 1997 Commerce Finance had two offices and
employed 2 officers and 3 full-time employees. In February, 1997, Commerce
Finance became a subsidiary of NBC. NBC Insurance Services, Inc. was organized
in January, 1997 and commenced business in March, 1997 to provide life, property
and casualty insurance and annuities through NBC's in-store retail banking
system. National Commerce Bank Services, Inc. provides supermarket banking
services to other financial institutions
Territory Serviced and Competition: NBC actively competes with other
commercial banks in the Memphis trade area in providing a full range of banking
services, including demand deposits, time deposits, various types of loans,
trust services and other bank-related activities. At December 31, 1997, NBC had
$3,206,008,000 in assets. According to December 31, 1997 call reports, one of
the other banks in metropolitan Memphis is 4.4 times larger and another is
approximately 1.5 times larger than NBC as measured by deposits. However,
deposits for that bank include statewide branches, while NBC deposits are
primarily limited to the metropolitan Memphis area. The Memphis trade area
includes western Tennessee, northern Mississippi, and eastern Arkansas, and NBC
considers commercial banks in Little Rock, Arkansas and Jackson, Mississippi, as
competitors in addition to Memphis area banks.
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In addition, NBC competes with savings and loan associations, finance companies,
credit unions, insurance companies, real estate investment trusts, mortgage
companies, factoring companies, independent credit card companies and various
other financial institutions whose activities correspond with banking functions.
See "Supervision and Regulation."
Employees: As of December 31, 1997, NBC and its subsidiaries employed
approximately 193 officers, 514 other full-time employees, 74 part -time
employees and 46 peak-time employees. Relations with employees have been good.
No employees are covered by collective bargaining agreements. All full-time
employees are afforded the benefits of group life and health insurance plans. In
addition, the Company has a non-contributory qualified retirement plan and an
Employee Stock Ownership Plan ("ESOP"). All employees who have one full year of
service are eligible to become participants in the retirement plan. The Company
also has a taxable income reduction account ("TIRA") plan which allows employees
to defer payment of taxes on an elected percentage of salary up to $10,000 by
making contributions to this plan. The Company may also make contributions to
this plan for the benefit of participating employees. During 1996, the Company
approved a plan to merge the ESOP into the TIRA.
NASHVILLE BANK OF COMMERCE:
Nashville Bank of Commerce was organized to compete in retail banking in
the Nashville trade area. The Nashville Bank operates three traditional branches
and 22 SUPER MONEY MARKET facilities located within Kroger stores and four
stand-alone ATMs in the Nashville area. At December 31, 1997, the Nashville Bank
employed 38 officers, 95 other full-time employees, 18 part-time employees and
24 peak-time employees to provide banking services during the hours when most
grocery shopping occurs. Employees of the Nashville Bank are provided with the
same benefits that all Company employees have available to them. At December 31,
1997, the Nashville Bank had total consolidated assets of $505,836,000.
Nashville Bank of Commerce competes with a number of substantially larger
financial institutions, both banks and savings and loans, as well as various
other financial institutions whose activities correspond with banking functions.
NBC BANK, FSB (KNOXVILLE):
The Company organized NBC Bank, FSB (Knoxville) to become competitive in
retail banking in the Knoxville area. After its 1994 conversion from a state
chartered bank to a federally chartered savings bank, it expanded into North
Carolina. The Knoxville Bank has 14 SUPER MONEY MARKET branch locations and one
traditional branch location in the Knoxville area with one branch location in
Pigeon Forge, Tennessee, 14 branch locations in the Raleigh-Durham, North
Carolina area, five branches in Greensboro, North Carolina, one branch in
Greenville, North Carolina, three branches in Winston-Salem, North Carolina, one
branch location in Olive Branch, Mississippi, one branch in Southaven,
Mississippi and one branch in Paris, Tennessee. The Knoxville Bank has one
branch each in the following Georgia locations: Calhoun, Canton, Cumming,
Dalton, Ft. Oglethorpe, Gainesville, Moultrie, and Rome. Like Nashville, the
Knoxville Bank employees are provided with the same benefits that all Company
employees have available to them. At December 31, 1997, the Knoxville Bank
employed 44 officers, 122 other full-time employees, 16 part-time employees and
7 peak-time employees. At year-end 1997, the Knoxville Bank had total assets of
$756,076,000. The Knoxville Bank competes with a number of substantially larger
financial institutions, both banks and savings and loans, as well as various
other financial institutions whose activities correspond with banking functions.
Non-Bank Subsidiaries: Kenesaw Leasing, Inc, and J & S Leasing, Inc. are
both equipment leasing firms. At December 31, 1997 Kenesaw's capital
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totaled $1,604,000 and J & S's capital was $1,073,000.
NBC BANK, FSB (ROANOKE):
NBC Bank, FSB was acquired to expand its retail banking activities through
supermarket branches in other states. Eight SUPER MONEY MARKET branches are
located in Kroger supermarkets in Virginia. At December 31, 1997, Roanoke
employed 13 officers, 36 other full-time employees, and 2 part-time employees.
The same Company benefits are provided to these employees. At year-end 1997,
Roanoke had total assets of $254,236,000. Roanoke competes with a number of
substantially larger financial institutions, both banks and savings and loans,
as well as various other financial institutions whose activities correspond with
banking functions.
COMMERCE CAPITAL MANAGEMENT, INC.:
Commerce Capital was organized to provide specialized investment management
services to individuals, family groups, endowment funds and corporations.
Assets presently managed are approximately $690,000,000. At December 31, 1997,
Commerce Capital had 5 full-time employees. Commerce Capital's employees are
covered under the same Company benefits. Commerce Capital competes with a
number of other investment counselors, insurance companies, banks, and other
money managers, many of which are substantially larger.
BROOKS, MONTAGUE & ASSOCIATES, INC.:
The Company acquired all of the outstanding stock of Brooks, Montague &
Associates, Inc. on February 15, 1994. Brooks Montague provides specialized
investment management services primarily to individuals, charitable accounts and
corporate retirement plans. Assets presently managed are approximately
$164,000,000. At December 31, 1997, Brooks Montague had three full-time
employees. Brooks Montague's employees are covered under the same Company
benefits. Brooks Montague competes primarily with other regionally based
investment management firms, many of which are substantially larger.
TRANSPLATINUM SERVICE CORP.:
In September of 1995, NCBC acquired 30% of TransPlatinum Service Corp.
which offers financial services to the trucking and petroleum industries and
bankcard services to merchants. TransPlatinum is located in Nashville,
Tennessee. On February 29, 1996, NCBC acquired the remaining 70% of
TransPlatinum. As of December 31, 1997, TransPlatinum had 3 officers, 52 full-
time employees, and 10 part-time employees. TransPlatinum competes with larger
companies offering similar services on a nation-wide basis.
U.S.I. ALLIANCE CORP.:
U.S.I. Alliance Corp. commenced formal operations in February of 1996 as a
wholly owned subsidiary of NCBC. USI operates and administers a security
program in the long-term care industry. The program activities include leasing
personal lock boxes, education and training, risk management reduction, and the
administration of an 800-number tip line and reward payment system for long-term
care facilities. USI Alliance has filed federal and state trademarks in all 50
states for the name "Senior Crimestoppers" and currently does business in all
states. At December 31, 1997, USI had 2 officers and 1 other full-time
employee.
NATIONAL COMMERCE CAPITAL TRUST I:
National Commerce Capital Trust I was organized in March 1997 as a
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special purpose company to offer floating rate capital trust pass-through
securities. At December 31, 1997, Trust I had $49,883,827 in outstanding
securities issued.
SUPERVISION AND REGULATION
NCBC and its subsidiaries are subject to a number of federal and state laws
and regulations. As a bank holding company, NCBC is subject to regulation under
the Bank Holding Company Act of 1956, as amended (the "Act"), which is
administered by the Federal Reserve Board (the "Board"). Under the Act, the
Company is generally prohibited from directly engaging in any activities other
than banking, managing or controlling banks, and those activities that the Board
considers closely related and incidental to banking. Generally, bank holding
companies from any state can now acquire banks and bank holding companies
located in any other state, subject to certain conditions, including nationwide
and state imposed concentration limits. Effective January 1, 1991, Tennessee
amended its reciprocal interstate banking statute to allow a bank or bank
holding company in any other state to acquire a Tennessee bank or bank holding
company as long as a Tennessee bank or bank holding would have a similar
acquisition opportunity in that state. Effective June 1, 1997 banks also became
eligible to branch across state lines by acquisition, merger or de novo, (unless
state law would permit such interstate branching at an earlier date), providing
certain conditions are met including that applicable state law must expressly
permit de novo interstate branching.
The Act requires that a bank holding company obtain the prior approval of
the Board before merging or consolidating with another bank holding company.
Furthermore, unless a bank holding company already owns or controls a majority
of the shares of a bank or another bank holding company, Board approval is
required for any transaction, if following such transaction, the bank holding
company directly or indirectly owns or controls more than 5% of the shares of
such bank or bank holding company. A bank holding company and its non-bank
subsidiaries must also seek the prior approval of the Board to acquire all or
substantially all of the assets of a bank.
Under the Act, a bank holding company is required to file with the Board an
annual report and any additional information required by the Board. The Board
may examine the Company's and each of its direct subsidiaries' records,
including a review of capital adequacy in relation to guidelines issued by the
Board. If the level of capital is deemed to be inadequate, the Board may
restrict the future expansion and operations of the Company. The Board
possesses cease-and-desist powers over a bank holding company if its actions or
actions of any of its subsidiaries represent unsafe or unsound practices or
violations of law.
Federal law also regulates transactions among the Company and its
affiliates, including the amount of a banking affiliate's loans to, or
investments in, non-bank affiliates and the amount of advances to third parties
collateralized by securities of an affiliate. In addition, various requirements
and restrictions under federal and state law regulate the operations of the
Company's banking affiliates, including (1) requiring the maintenance of
reserves against deposits, (2) limiting the nature of loans and the interest
that may be charged thereon, and (3) restricting investments and other
activities. The amount of dividends that the Company's bank affiliates may
declare is also limited. Regulatory approval must be obtained before declaring
any dividends if the amount of capital, surplus and retained earnings is below
certain statutory limits. See Note N of the Notes to Consolidated Financial
Statements in the 1997 Annual Report, incorporated herein by reference.
There are a number of obligations and restrictions imposed on bank holding
companies and their depository institution subsidiaries by federal law
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and regulatory policy that are designed to reduce potential loss exposure to the
depositors of such depository institutions and to the Federal Deposit Insurance
Corporation ("FDIC") insurance fund in the event the depository institution
becomes in danger of default or is in default. For example, under a policy of
the Board with respect to bank holding company operations, a bank holding
company is required to serve as a source of financial strength to its subsidiary
depository institutions to commit resources to support such institutions in
circumstances where it might not do so absent such policy. In addition, the
"cross-guarantee" provisions of federal law require insured depository
institutions under common control to reimburse the FDIC for any loss suffered or
reasonably anticipated as a result of the default of a commonly controlled
insured depository institution or for any assistance provided by the FDIC to a
commonly controlled insured depository institution in danger of default.
The federal banking agencies have broad powers under current federal law to
take prompt corrective action to resolved problems of insured depository
institutions. The extent of these powers depends upon whether the institutions
in question are "well capitalized", "adequately capitalized" or "significantly
undercapitalized", as such terms are defined under uniform regulations defining
such capital levels issued by each of the federal banking agencies.
The Community Reinvestment Act ("CRA") requires banks to help meet the
credit needs of the community. Regulatory authorities are required to consider
the CRA performance of a bank or bank holding company when reviewing regulatory
applications.
In August 1989, the Financial Institutions Reform, Recovery and Enforcement
Act of 1989 ("FIRREA") was enacted. FIRREA contains major regulatory reforms,
stronger capital standards for savings and loans and stronger civil and criminal
enforcement provisions. FIRREA allows the acquisition of healthy and failed
savings and loan associations by bank holding companies, and it imposes no
interstate barriers on such acquisitions by bank holding companies. With
certain qualifications, FIRREA also allows bank holding companies to merge
acquired savings and loan associations into their existing commercial bank
subsidiaries. FIRREA also provides that a depository institution insured by the
FDIC can be held liable for any loss incurred by, or reasonably expected to be
incurred by, the FDIC after August 9, 1989 in connection with (i) the default of
a commonly controlled FDIC-insured depository institution or (ii) any assistance
provided by the FDIC to a commonly controlled FDIC-insured depository
institution in danger of default.
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") became effective in December 1991. FDICIA revises the bank
regulatory insurance coverage and funding provisions of the Federal Deposit
Insurance Act and makes changes to the regulatory structures found in several
other banking statutes. Various sections of FDICIA are designed to recapitalize
the Bank Insurance Fund and provide for increased funding of the Bank Insurance
Fund by insured banks. The FDIC's capacity to borrow from the United States
Treasury was increased. FDICIA requires the FDIC to develop and implement a
system of risk-based premiums for federal deposit insurance under which the
semiannual rates at which a depository institution is assessed are based on the
probability that the depository institution fund will incur a loss with respect
to the institution. Various sections of FDICIA impose substantial new audit and
reporting requirements on insured depository institutions. All insured banks
are generally subject to an annual on-site examination by their primary federal
regulatory agency. The role of independent public accountants is increased, and
there are additional reporting requirements imposed on depository institutions.
The federal regulatory agency must devise rules requiring banks and thrift
institutions to
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disclose the fair market value of their assets. The agencies must also devise
rules for banks and thrifts to report off-balance sheet items on financial
statements. Banks are rated according to a new scheme of capital adequacy.
Better-capitalized institutions are generally subject to less onerous regulation
and supervision than poorly-capitalized institutions. Under FDICIA, each federal
banking agency must prescribe standards for depository institutions and
depository institution holding companies relating to internal controls,
information systems, internal audit systems, loan documentation, credit
underwriting, interest rate exposure, asset growth, compensation, a maximum
ratio of classified assets to capital, minimum earnings sufficient to absorb
losses, a minimum ratio of market value to book value for publicly traded
shares, and other standards as the agency deems appropriate.
As a national bank, NBC operates under the rules and regulations of the
Comptroller of the Currency and is also a member of the Federal Reserve System,
subject to provisions of the Federal Reserve Act. The Nashville Bank is a state
non-member bank operating under the rules and regulations of the FDIC and the
Tennessee Department of Financial Institutions. NBC Bank, FSB (Knoxville) and
NBC Bank, FSB (Roanoke), are federally chartered savings banks that are
primarily regulated by the Office of Thrift Supervision. The FDIC insures the
domestic deposits of all the Banks.
Commerce Finance Company is a consumer finance company organized under the
laws of the State of Tennessee and is primarily regulated by the Consumer
Finance Division of the Tennessee Department of Financial Institutions. The
Federal Trade Commission has primary federal regulatory authority. Commerce
Capital Management, Inc. and Brooks, Montague & Associates, Inc. are registered
with the Securities and Exchange Commission and are investment advisers pursuant
to the Investment Advisers Act of 1940, as amended. All regulatory agencies
require periodic audits and regularly scheduled reports of financial
information.
The federal Comprehensive Environmental Response Compensation and Liability
Act ("CERCLA") imposes a liability scheme for the remediation of property where
hazardous substances have been released. The liability extends to owners and
operators of such properties which could include banks. There is proposed or
pending federal legislation that would consolidate some of the federal agencies
that regulate financial institutions.
-10-
STATISTICAL AND OTHER DATA - The following tables set forth selected statistical
and other information.
- --------------------------------------------------------------------------------
DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY: Interest Rates
and Interest Differential
The following table sets forth the combined daily average condensed
(consolidated) balance sheets of NCBC and an analysis of net interest earnings
for each of the three years in the period ended December 31, 1995 through 1997.
Interest income and yields on non-taxable investment securities have been
calculated on a fully taxable-equivalent basis assuming a tax rate of 35%.
1997 1996 1995
---------------------------- ---------------------------- ---------------------------
Average Yield/ Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate Balance Interest Rate
---------- -------- -------- --------- ------- -------- --------- ------- -------
(In Thousands of Dollars)
ASSETS
Interest-earning assets:
Loans:(1)
Domestic(2)............................ 2,513,327 229,866 9.15% 2,130,810 191,860 9.00% 1,718,424 160,980 9.37%
Taxable securities including trading
account................................. 1,461,883 98,308 6.72 1,296,692 85,597 6.60 1,119,057 75,627 6.76
Non-taxable investment securities(2)..... 138,669 11,456 8.26 143,706 11,881 8.27 154,755 13,101 8.47
Federal funds sold and securities
purchased under agreements to resell.... 16,500 1,049 6.36 23,388 1,425 6.09 25,383 1,486 5.85
Time deposits in other banks............. 18,211 974 5.35 16,984 924 5.44 16,881 1,002 5.94
--------- ------- ---- --------- ------- ---- --------- ------- ----
Total interest-earning assets............ 4,148,590 341,653 8.24 3,611,580 291,687 8.08 3,034,500 252,196 8.31
--------- ------- ---- --------- ------- ---- --------- ------- ----
Non-interest earning assets:
Cash and due from banks.................. 137,251 119,604 112,304
Premises & equipment, net................ 24,306 19,160 17,869
Other assets............................. 132,827 94,020 75,448
Allowance for loan losses................ (38,122) (32,250) (25,830)
--------- --------- ---------
TOTAL ASSETS............................. 4,404,852 3,812,114 3,214,291
========= ========= =========
(1) For the purposes of these computations, non-accruing loans are included in
the daily average loan amounts outstanding and income on such loans is
recognized as received. There were no foreign loans outstanding.
(2) These items are affected by fully taxable-equivalent adjustments. Reference
is made to page 29 of the Annual Report to Shareholders for the corresponding
unadjusted amounts as presented in the financial statements.
-11-
1997 1996 1995
---------------------------- ----------------------------- ----------------------------
Average Yield/ Average Yield/ Average Yield/
Balance Interest Rate Balance Interest Rate Balance Interest Rate
------- -------- -------- ------- -------- -------- -------- -------- -------
(In Thousands of Dollars)
LIABILITIES AND STOCKHOLDERS'
EQUITY
Interest bearing liabilities:
Demand deposits..................... 261,931 3,239 1.24% 256,561 3,963 1.54% 247,002 4,843 1.96%
Savings deposits.................... 1,043,212 42,672 4.09 902,148 38,301 4.25 782,714 32,971 4.21
Time deposits....................... 1,321,247 73,248 5.54 1,187,861 65,701 5.53 1,025,093 58,877 5.74
Federal funds purchased and
securities sold under
agreements to repurchase........... 445,863 22,665 5.08 336,727 16,546 4.91 264,214 13,482 5.10
Federal Home Loan Bank advances..... 405,308 23,032 5.68 417,316 23,025 5.52 294,833 15,809 5.36
Long-term debt...................... 156,152 9,316 5.97 60,284 3,565 5.91 6,382 458 7.18
--------- ------- ---- --------- ------- ---- --------- ------- ----
Total interest bearing liabilities.. 3,633,713 174,172 4.79 3,160,897 151,101 4.78 2,620,238 126,440 4.83
--------- ------- ---- --------- ------- ---- --------- ------- ----
Non-interest bearing liabilities:
Domestic demand deposits............ 328,423 305,989 284,744
Other............................... 71,109 49,402 36,832
Capital Trust Preferred Securities.. 38,079
Stockholders' equity................ 333,528 295,826 272,477
--------- --------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY............... 4,404,852 3,812,114 3,214,291
========= ========= =========
Net interest earnings............... 167,481 140,586 125,756
======= ======= =======
Net yield on interest-earning
assets............................. 4.04% 3.89% 4.14%
==== ==== ====
-12-
INTEREST RATE SENSITIVITY TABLE BY REPRICING DATES
Within After 3 Mos. After 6 Mos. After 1 Yr. Non
December 31, 1997 0-30 31-90 But Within But Within But Within After Interest
(In Thousands of Dollars) Days Days 6 Mos. 1 Year 5 Years 5 Years Bearing Total
------- ------- ------------ ------------ ----------- ------- -------- ------
Funding uses:
Loans, net.................... 884,663 77,647 117,287 229,038 1,224,515 75,817 - 2,608,967
Securities.................... 688,432 110,268 227,026 135,267 245,638 211,523 - 1,618,154
Other earning assets.......... 139,634 - - - - - - 139,634
Other assets................. - - - - - - 325,256 325,256
--------- ------- ------- ------- --------- -------- -------- ---------
Total funding uses.......... 1,712,729 187,915 344,313 364,305 1,470,153 287,340 325,256 4,692,011
--------- ------- ------- ------- --------- -------- -------- ---------
Funding sources:
Interest-bearing deposits..... 608,607 278,791 339,206 432,710 787,521 386,659 - 2,833,494
Other borrowings.............. 830,354 3,346 4,058 7,928 167,718 6,189 - 1,019,593
Demand deposits............... - - - - - - 417,748 417,748
Other liabilities............ - - - - - - 69,028 69,028
Interest rate swaps........... (60,000) - - - 60,000 - - -
Stockholders' equity.......... - - - - - - 352,148 352,148
--------- ------- ------- ------- --------- -------- -------- ---------
Total funding sources......... 1,378,961 282,137 343,264 440,638 1,015,239 392,848 838,924 4,692,011
--------- ------- ------- ------- --------- -------- --------
Interest-rate
sensitivity GAP.............. 333,768 (94,222) 1,049 (76,333) 454,914 (105,508) (513,668)
--------- ------- ------- ------- --------- -------- --------
Cumulative interest-rate
sensitivity GAP.............. 333,768 239,456 240,595 164,262 619,176 513,668
GAP to total assets........... 7.11% ( 2.01%) .02% (1.63%) 9.70% (2.25%) (10.95%)
Cumulative GAP to total
assets....................... 7.11% 5.10% 5.13% 3.50% 13.20% 10.95%
The Company's Interest Rate Sensitivity Table was prepared using contractual
maturities and repricing dates when they exist and are enforceable. Management
adjustments have been applied to allow for prepayment or other variances from
stated maturities or repricing intervals. The management adjustments have been
formulated considering historical experience and market projections and will
change when appropriate to allow for current and projected interest rate
scenarios.
Due to the historical volatility of interest rates, the Company addresses the
problem with an Asset Liability Management Committee comprised of senior
management personnel from each key banking function. The committee's goal is to
stabilize earnings by limiting the gap position between assets and liabilities
repricing within one year to 15% of assets. The committee has determined by
historical experience and simulation modeling that a gap of 15% will not produce
excessive earnings variances in most rate environments. The committee meets
regularly to address the current gap position and evaluate the assumptions and
projections used to calculate interest rate risk. Company policy states that
the six-month cumulative gap shall be no more than 12 percent of total assets
and the one-year cumulative gap, no more than 15 percent. At year-end 1997,
both six-month and one-year gaps were within these parameters.
-13-
CHANGES IN INTEREST INCOME AND EXPENSE
- --------------------------------------
The following table sets forth for NCBC and its subsidiaries
(consolidated), for the periods indicated, a summary of the changes in interest
earned and interest paid resulting from changes in volume and changes in rates.
Interest on non-taxable investment securities has been calculated on a fully
taxable-equivalent basis assuming a tax rate of 35%.
1997 Compared to 1996 1996 Compared to 1995
Increase (decrease) Due to (1) Increase (decrease) Due to (1)
-------------------------------------------- ----------------------------------------------
Volume Rate Net Rate/Volume Volume Rate Net Rate/Volume
------ ---- --- ----------- ------- ---- --- -----------
(In Thousands of Dollars)
Interest earned on:
Loans:(2)
Domestic..................... 34,777 3,228 38,006 574 36,962 (6,082) 30,880 (1,526)
Taxable securities including
trading account............ 11,124 1,588 12,711 198 11,717 (1,747) 9,970 (284)
Non-taxable investment
securities.................. (411) (14) (425) 1 (917) (303) (1,220) 22
Federal funds sold and
securities purchased
under agreements to
resell.................... (437) 61 (376) (19) (128) 67 (61) (5)
Time deposits in other banks. 66 (16) 50 (1) 6 (84) (78) (1)
------ ------ ------ ---- ------ ------ ------ ------
Total interest earning
assets...................... 45,119 4,847 49,966 753 47,640 (8,149) 39,491 (1,794)
------ ------ ------ ---- ------ ------ ------ ------
Interest paid on:
Demand deposits.............. 79 (803) (724) (16) 194 (1,074) (880) (40)
Savings deposits............. 5,849 (1,478) 4,371 (227) 5,017 313 5,330 48
Time deposits................ 7,427 120 7,547 13 8,867 (2,043) 6,824 (342)
Federal funds purchased
and securities sold under
agreements to repurchase... 5,528 591 6,119 186 3,545 (481) 3,064 (138)
Federal Home Loan Bank
advances.................... (662) 669 7 (19) 6,732 484 7,216 196
Long-term debt............... 5,715 36 5,751 58 3,173 (66) 3,107 (685)
------ ------ ------ ---- ------ ------ ------ ------
Total interest bearing
liabilities................. 23,936 (865) 23,071 (5) 27,528 (2,867) 24,661 (961)
------ ------ ------ ---- ------ ------ ------ ------
Net interest earnings........ 21,183 5,712 26,895 758 20,112 (5,282) 14,830 833
====== ====== ====== ==== ====== ====== ====== ======
(1) The change in interest due to both rate and volume has been allocated
to change due to volume and change due to rate in proportion to the
relationship of the absolute dollar amounts to the change in each.
(2) There were no foreign loans outstanding.
-14-
SECURITIES PORTFOLIO
- --------------------
The following table sets forth the aggregate book value of investment securities
at the dates indicated.
December 31
-------------------------------
1997 1996 1995
--------- --------- ---------
(in thousands of dollars)
Securities:
U.S. Treasury...................... 38,589 30,234 18,582
U.S. Government agencies and
corporations..................... 1,270,297 1,190,922 1,027,932
States of the U.S. and political
subdivisions..................... 138,409 140,708 149,975
Other securities................... 170,859 156,035 82,157
--------- --------- ---------
Total................ 1,618,154 1,517,899 1,278,646
========= ========= =========
The following table sets forth the maturities at December 31, 1997, and the
weighted average yields of such securities, all of which are computed on a fully
taxable-equivalent basis assuming a tax rate of 35%.
Maturing
-------------------------------------------------------------------------
After 1 But After 5 But After
Within 1 Year Within 5 Years Within 10 Years 10 Years
--------------- ---------------- ----------------- -------------------
Amount Yield Amount Yield Amount Yield Amount Yield
------- ------ ------- ------- ------- -------- -------- ---------
Securities:
U.S. Treasury.............. 2,000 6.01% 36,589 6.53% -- -- -- --
U.S. Government agencies
and corporations.......... 640,195 6.55 162,050 6.59 439,238 7.27% 28,814 5.77%
States of the U.S. and
political subdivisions.... 4,718 10.17 48,615 7.74 48,984 8.12 36,092 9.07
Other...................... 70,837 6.84 19,098 6.64 30,842 6.64 50,082 6.64
------- ----- ------- ---- ------- ------- -------- --------
Total.................. 717,750 266,352 519,064 114,988
======= ======= ======= ========
-15-
LOAN PORTFOLIO
- --------------
The following table shows the Company's gross loan distribution at the end of
the last five years.
December 31
-----------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
(in thousands of dollars)
Commercial, financial,
and agricultural........... 512,534 466,830 399,580 356,035 350,539
Real estate - construction... 241,334 170,188 122,720 91,424 66,929
Real estate - mortgage....... 781,826 602,064 520,657 501,489 429,544
Consumer(1)(2)............... 1,045,420 1,086,104 871,407 630,927 535,417
Lease financing.............. 30,046 22,790 18,678 14,818 13,870
--------- --------- --------- --------- ---------
Total................... 2,611,160 2,347,976 1,933,042 1,594,693 1,396,299
========= ========= ========= ========= =========
(1)Included within "Consumer" loans are revolving lines of credit secured by
home equities.
(2)The Company sold approximately $63 million or substantially all of its credit
card receivables in fourth quarter 1997.
The following table shows the amounts of loans (excluding real estate mortgages,
consumer loans and lease financing) outstanding as of December 31, 1997, which,
based on remaining scheduled repayments of principal, are due in the periods
indicated.
Maturing
Within After 1 But After
1 Year Within 5 Yrs 5 Years Total
------- ------------ ------- -------
(in thousands of dollars)
Commercial, financial,
and agricultural........... 84,776 190,678 237,080 512,534
Real estate - construction... 21,362 148,070 71,902 241,334
------- ------------ ------- -------
Total................... 106,138 338,748 308,982 753,868
======= ============ ======= =======
The following table shows the amounts of loans (excluding real estate mortgages,
consumer loans and leasing financing) due after one year classified, according
to the sensitivity to changes in interest rates as of December 31, 1997.
After 1 but After
Within 5 Yrs 5 Years
-------------- ---------
(in thousands of dollars)
Predetermined interest rate................ 67,321 168,638
Floating or adjustable interest rates...... 271,427 140,344
------- -------
Total................................. 338,748 308,982
======= =======
-16-
NONACCRUAL, PAST DUE, AND RESTRUCTURED
- --------------------------------------
The following table summarizes the Company's nonaccrual, past due, and
restructured loans (all of which are domestic):
December 31
---------------------------------
1997 1996 1995 1994 1993
----- ----- ----- ----- -----
(in thousands of dollars)
Nonaccrual loans.......... -- -- -- -- --
Accruing loans past due
90 days or more......... 3,134 3,482 3,252 2,432 2,063
Non-performing
restructured loans...... -- -- -- -- --
Performing restructured... -- -- -- -- 1,984
Substantially all of the nonaccrual and restructured loans were collateralized,
and there were no significant commitments to lend any of these debtors
additional funds.
Loans and lease financing receivables are considered to be in nonaccrual status
if: (1) they are maintained on a cash basis because of deterioration in the
financial position of the borrower, (2) payment in full of interest or principal
is not expected, or (3) principal or interest has been in default for a period
of 90 days or more unless the obligation is both well secured and in the process
of collection. A nonaccrual asset may be restored to an accrual status when
none of its principal and interest is due and unpaid or when it otherwise
becomes well secured and in the process of collection.
Potential Problem Loans
- -----------------------
At December 31, 1997, the Company had no problem loans for which payments were
being made, but the borrowers currently were experiencing severe financial
difficulties. Any such loans would be subject to constant management attention
and their classification would be reviewed monthly.
-17-
SUMMARY OF LOAN LOSS EXPERIENCE
- -------------------------------
This table summarizes the Company's loan loss experience for each of the five
years ended December 31, 1997. There were no foreign loans.
Year Ended December 31
-------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------- -------
(in thousands of dollars)
Balance at beginning
of period..................... 35,514 29,010 24,310 21,467 17,356
Charge-offs:
Commercial, financial,
and agricultural............. 250 12 1 442 1,167
Real estate - construction.... 95 70 199 2122 652
Real estate - mortgage........ 222 74 97 232 207
Consumer...................... 10,850 8,270 5,366 4,088 3,783
Lease financing............... 1,382 1,912 1,586 1,500 1,0131
------ ------ ------ ------ ------
Total charge-offs............ 12,799 10,338 7,249 6,474 6,840
------ ------ ------ ------ ------
Recoveries of loans
previously charged-off:
Commercial, financial,
and agricultural............. 73 20 55 47 420
Real estate - construction.... 57 244 44 83 359
Real estate - mortgage........ 33 61 73 121 47
Consumer...................... 2,221 1,965 1,509 1,494 1,237
Lease financing............... 560 533 518 495 474
------ ------ ------ ------ ------
Total recoveries............. 2,944 2,823 2,199 2,240 2,537
------ ------ ------ ------ ------
Net charge-offs................ 9,855 7,515 5,050 4,234 4,303
Increase due to acquisition.... 625 288 - - 22
Decrease due to loan sale...... - (403) - - -
Provision for loan losses(1)... 17,013 14,134 9,750 7,077 8,392
------ ------ ------ ------ ------
Balance at end of period....... 43,297 35,514 29,010 24,310 21,467
====== ====== ====== ====== ======
Ratio of net-charge-offs to
average loans outstanding
during the period............. .39% .35% .29% .28% .34%
(1) The factors which influenced management's judgment in determining the
amount of the provision for loan losses charged to operating expense
included the results of a credit review of the loan portfolio, past loan
loss experience, current economic conditions and other factors, all of
which formed a basis for determining the adequacy of the allowance for loan
losses. The allowance for loan losses is maintained at a level believed
adequate by management to absorb potential losses in the loan portfolio.
-18-
ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
- -------------------------------------------
The allowance for loan losses has been allocated according to the amount deemed
to be reasonably necessary to provide for the possibility of losses incurred
within the following categories of loans for each for the five years indicated.
December 31
---------------------------------------------------------------------------------------------
1997 1996 1995 1994 1993
------ ------ ------ ------ ------
Percent Percent Percent Percent Percent
of loans of loans of loans of loans of loans
Amount in each Amount in each Amount in each Amount in each Amount in each
of category of category of category of category of 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
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
(in thousands of dollars)
Commercial, financial,
and agricultural........... 8,659 20% 7,813 20% 7,264 21% 6,887 22% 6,622 25%
Real estate:
Construction............... 4,330 9 3,196 7 3,006 6 2,731 6 2,644 5
Mortgage................... 6,495 30 5,327 26 3,567 27 3,352 31 3,277 31
Consumer.................... 21,649 40 17,402 46 12,737 45 9,457 40 7,716 38
Lease financing............. 2,164 1 1,776 1 2,436 1 1,883 1 1,208 1
------ --- ------ --- ------ --- ------ --- ------ ---
Total..................... 43,297 100% 35,514 100% 29,010 100% 24,310 100% 21,467 100%
====== === ====== === ====== === ====== === ====== ===
-19-
DEPOSITS
- --------
The following table sets out the average amount of deposits and the average rate
paid on such deposits for the periods indicated. There were no material
deposits by foreign depositors in domestic offices. There were no material
deposits in foreign banking offices.
Year Ended December 31
----------------------------------------------------
1997 1996 1995
----- ---------------- -----
Amount Rate Amount Rate Amount Rate
--------- ----- --------- ----- --------- -----
(in thousands of dollars)
Non-interest bearing demand deposits... 328,423 - 305,989 - 284,744 -
Interest bearing demand deposits....... 261,931 1.24% 256,561 1.54% 247,002 1.96%
Savings deposits....................... 1,043,212 4.09 902,148 4.25 782,714 4.21
Time deposits.......................... 1,321,247 5.54 1,187,861 5.53 1,025,093 5.74
--------- ---- --------- ---- --------- ----
Total............................. 2,954,813 2,652,559 2,339,553
========= ========= =========
At December 31, 1997, outstanding maturities of time deposits of $100,000 or
more issued by domestic offices (which consist entirely of time certificates of
deposit) are summarized below (in thousands of dollars):
Time remaining until maturity Amount
- ----------------------------- ------
3 months or less................................................. 317,359
Over 3 through 6 months.......................................... 164,686
Over 6 through 12 months......................................... 135,535
Over 12 months................................................... 3,284
-------
Total......................................................... 620,864
=======
RETURN ON EQUITY AND ON TOTAL ASSETS
- ------------------------------------
The following table shows consolidated operating and capital ratios for the
Company for each of the last three years.
Year Ended December 31
-----------------------------
1997 1996 1995
------- ----- -----
Return on average total assets................................ 1.58% 1.51% 1.53%
Return on average equity*..................................... 20.92% 19.44% 18.00%
Dividend payout percent....................................... 33.33% 34.35% 36.08%
Average equity to assets percent.............................. 7.57% 7.76% 8.48%
Tier 1 capital to total assets (leverage ratio)............... 8.69% 7.66% 7.91%
Tier 1 capital to risk-weighted assets........................ 12.61% 11.05% 12.30%
Total capital to risk-weighted assets......................... 13.86% 12.30% 13.52%
* exclusive of mark-to-market adjustment.
See "Management's Discussion and Analysis of Financial Condition and Results of
Operations" of the Registrant's Annual Report for discussion of minimum capital
requirements.
-20-
SHORT-TERM BORROWINGS
- ---------------------
The following table shows the distribution of the Company's short-term
borrowings and the weighted average interest rates thereon at the end of the
last three years. Also provided are the maximum amounts of borrowings and the
average amounts of borrowings as well as weighted average interest rates for the
reported years.
Year Ended December 31
--------------------------------
1997 1996 1995
-------- -------- --------
(In Thousands of Dollars)
Federal funds purchased and securities
sold under agreements to repurchase:
Balance at year-end............................... 423,573 298,410 404,746
Weighted average interest rate
payable at year-end........................... 5.04% 5.09% 5.46%
Maximum amount outstanding
at any month end.............................. 540,622 398,898 404,746
Average outstanding balance
(total daily outstanding
principal balance divided
by 365)....................................... 445,863 336,727 264,214
Weighted average interest rate
(related interest expense
divided by the average
outstanding balance).......................... 5.08% 4.91% 5.10%
-21-
ITEM 2. PROPERTIES.
Main Office: NBC leases as its main office approximately 40% -- 187,500
rentable square feet -- of the Commerce Square Complex (the "Complex"), which
includes a thirty-two story office building known as Commerce Square Tower, a
nine-story parking garage and a building known as NBC's main office building.
NBC owns two parcels of land (approximately 74.25 feet by 148.5 feet) adjacent
to the Complex which house a building that is presently used by the Bank for
storage.
Other Offices: As of December 31, 1997, NBC operated 13 traditional
branches (including the main office branch) and 16 SUPER MONEY MARKET branch
facilities in Shelby County, Tennessee; one traditional branch in Somerville,
Tennessee; one Super Money Market in Cleveland, Tennessee; and two in Jackson,
Tennessee. NBC intends to continue opening branches at such time and places as
management deems prudent and feasible, subject to approval of regulatory
authorities.
Nine of the 14 traditional branches operated by NBC are leased. In
addition, the building housing one branch is owned by NBC but subject to a
ground lease. Leases on the 10 branches have remaining terms ranging from one
month to 21 years (excluding renewal options). The average unexpired portion of
the lease terms at December 31, 1996 is 7 years, including ground leases. The
remaining four branches are owned in fee. Aggregate annual rentals on the 9
leased branch properties including NBC space in Commerce Square Complex, the
SUPER MONEY MARKET branch facilities and the free-standing ATM locations
amounted to approximately $3,346,000 at December 31, 1997.
Commerce General occupies approximately 9,700 square feet of NBC's space
in the Complex and pays approximately $131,000 per year for this space. NBC
Capital Markets Group, Inc. occupies approximately 12,7000 square feet of NBC's
space in the Complex and pays approximately $167,000 per year for this space.
Additionally, Commerce Capital leases approximately 2,900 square feet in the
Complex totaling approximately $54,219 in annual rent in 1997. Brooks Montague
leases approximately 1,200 square feet in a Chattanooga building totaling
approximately $14,400 in annual rent in 1997.
Nashville Bank has been granted the right to operate branches in area
Kroger stores. Initial terms of the license agreements are for one year, with
multiple renewal options. In 1997, Nashville paid approximately $819,000 for
licensed space and administrative office space.
NBC Bank, FSB (Knoxville) also has been granted the right to operate
branches in area Kroger stores in the Knoxville, Tennessee; Raleigh/Durham,
North Carolina; Greensboro, North Carolina; Winston-Salem, North Carolina; and
North Georgia areas. Initial terms of the license agreements are for one year,
with multiple renewal options. In 1997, Knoxville paid approximately $1,143,000
for licensed space and administrative office space.
NBC Bank, FSB (Roanoke) has been granted the right to operate branches in
area Kroger stores in Roanoke, Virginia and Blacksburg, Virginia. Initial terms
of the license agreements are for one year, with multiple renewal options. In
1997, FSB paid approximately $249,000 for licensed and leased space.
NBC owns property at 1895 Union Avenue, 309 Monroe Avenue and 5049 Summer
Avenue in Memphis, and 7770 Poplar Avenue in Germantown, Tennessee and 6005
Stage Road in Bartlett, Tennessee, suburbs of Memphis in Shelby County. The
property at 1895 Union is the location of Union Avenue Branch operations. The
Cloverleaf Branch operation is located at 5049 Summer Avenue. The Consumer
Lending and Indirect Loan operations area is located at 309 Monroe, which is
also being used for parking for NBC employees. The Germantown Branch operation,
the operations of the residential and commercial construction lending, mortgage
lending, aircraft lending areas and satellite operations of one of the Bank's
subsidiaries and a Company affiliate are located at 7770 Poplar Avenue. The
Bartlett Branch operation is located at 6005 Stage Road.
-22-
ITEM 3. LEGAL PROCEEDINGS.
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not Applicable.
ITEM X. EXECUTIVE OFFICERS OF THE REGISTRANT.
Executive Officers
Name Age Office Held
---- --- ------------
Thomas M. Garrott 60 Chairman of the Board, President, Chief Executive
Officer and Director of the Company and Chairman of
the Board, Chief Executive Officer and Director of
NBC, Director of National Commerce Bank Services,
Inc., Commerce Capital, Commerce General, and Brooks
Montague
Lewis E. Holland 55 Vice Chairman, Treasurer and Chief Financial Officer
of the Company and President and Director of NBC,
Chairman of the Board of Commerce Capital Management,
Inc., Director of Brooks Montague, National Commerce
Bank Services, NBC Capital Markets and Kenesaw
Leasing, Inc. and J&S Leasing, Inc., USI Alliance
Corp., and TransPlatinum Service Corp.
William R. Reed, Jr. 51 Vice Chairman of the Company; Director of NBC,
Chairman and CEO of Nashville Bank of Commerce, NBC
Bank, FSB (Knoxville) and NBC Bank, FSB (Roanoke),
Chairman of NBC Insurance Services, Inc., Director of
Kenesaw Leasing
-23-
Gary L. Lazarini 56 Executive Vice President of NBC, Investments and
Chairman of NBC Capital Markets Group, Inc., Director
of Commerce Capital
Mackie H. Gober 51 Executive Vice President of NCBC, Director of NBC and
NCBS, Chairman and Director of Commerce Finance
Company and Commerce General Corporation
Gus B. Denton 57 Secretary of the Company and Executive Vice President
and Secretary of NBC, Director of Commerce General
Corporation
Tom W. Scott 54 President of Commerce General Corporation, Director
of TransPlatinum Service Corp.
Jacques D. Driscoll 38 Senior Vice President of Marketing of the Company
Of the foregoing officers, Messrs. Garrott, Holland, and Reed are also a
directors of the Company.
The above officers have served in the capacities shown for
more than five years except for the following:
Mr. Garrott became Chairman of the Board, President, and
Chief Executive Officer of the Company and Chairman of the Board and Chief
Executive Officer of NBC in May 1993. Prior to that time, he served as
President and Chief Operating Officer of the Company and NBC.
Mr. Holland was elected Vice Chairman and Director of the Company in June
1997. He was Executive Vice President of the Company from August 1995 until June
1997. He was elected Treasurer of the Company in June 1995 and elected Vice
President and Chief Financial Officer of the Company and Director of NBC
effective July 1994. He was elected President of NBC effective January 1998 and
director of NBC effective July 1994. He has been director of Commerce Capital
since January 1995, Brooks Montague since July 1995, NCBS since January 1996,
USI since February 1996, TransPlatinum since March 1996, Kenesaw Leasing since
July 1997 and both J&S and NBC Insurance since January 1997. He was Vice
Chairman and Chief Financial Officer of NBC from July 1994 until June 1995 and
was Executive Vice President of NBC from June 1995 until August 1995. Prior to
that time, he was a partner with Ernst & Young LLP.
Mr. Reed was elected Vice Chairman and Director of the Company in June 1997
and was Executive Vice President of the Company from August 1995 until June
1997; was Chairman and President of Commerce Finance Company from January 1996
until January 1998. He was Vice Chairman of NBC from January, 1992 to August
1995 and prior to that he was Executive Vice President of NBC from May 1988. He
has been Chairman of the Board and Director of NBC Bank, FSB (Knoxville) since
July 1986, President since May 1988, and Chief Executive Officer from November
1994 to May 1995. Mr. Reed has been President and Director of Nashville Bank of
Commerce since September 1985, Chairman of the Board from May 1988 to May 1995
and Chief Executive Officer since November 1994. He has been Chairman and Chief
Executive Officer of NBC Bank, FSB (Roanoke) since July 1994. He was President
of NBC Bank, FSB (Roanoke) from July 1994 to January 1996.
-24-
Mr. Lazarini was elected Executive Vice President of NBC in January, 1992,
and prior to that time was Senior Vice President. He has served as Chairman of
the Board of NBC Capital Markets Group, Inc. since January 1991 and was
President since from 1995 until November 1996.
Mr. Gober was elected Executive Vice President of the Company in January
1998 and was President of NBC from August 1995 until January 1998. He was
Executive Vice President and Retail Credit Group Head of NBC from January 1992
until August 1995. He was elected Chairman of Commerce Finance Company in
January 1998 and was President of Commerce Finance Company from September 1992
until August 1995.
Mr. Denton was elected Secretary of the Company in June 1995.
Mr. Driscoll was elected Senior Vice President of Marketing of the Company
in September 1996. Prior to that time he was President of First Insurance from
1995 until 1996, Group Manager of First Bank System from 1994 to 1995, and Sales
and Marketing Manager of First Bank System from 1993 to 1994.
-25-
PART II.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Market quotations for the Company's common stock and cash dividends
per share, as restated to give retroactive recognition to all stock
dividends and stock splits, are as follows:
Fourth Third Second First
------ ------ ------ ------
1997:
High............. $35.75 $27.63 $23.63 $23.00
Low.............. 27.19 22.88 19.25 17.88
Cash dividends... .13 .11 .11 .11
1996:
High............. $19.19 $16.75 $15.88 $15.50
Low.............. 16.63 15.50 14.88 12.75
Cash dividends... .11 .10 .10 .10
The Company's stock is traded over-the-counter on the Nasdaq National
Market tier and is quoted under the trade symbol NCBC. The stock
prices listed in the table were obtained from Nasdaq and represent
the high and low closing sales prices. At December 31, 1997, there
were approximately 2,800 stockholders of record.
ITEM 6. SELECTED FINANCIAL DATA.
Not Covered by Auditors' Report
In Thousands of Dollars, Except Per Share and Ratio Data
1997 1996 1995 1994 1993
----------- ----------- ----------- ----------- -----------
Net interest income............ $ 162,821 $ 135,466 $ 120,025 $ 110,021 $ 100,393
Net income..................... 69,780 57,513 49,035 44,342 39,406
Per common share data:*
Basic earnings per share..... 1.42 1.17 .99 .91 .81
Diluted earnings per share... 1.38 1.15 .97 .89 .79
Cash dividends declared...... .46 .40 .35 .31 .28
Book value................... 7.21 6.43 5.98 4.57 4.82
Total average equity........... 333,528 295,826 272,477 239,903 211,007
Total average assets........... 4,404,852 3,812,114 3,214,291 2,845,135 2,387,210
Average debt:
Federal Home Loan
Bank advances.............. 405,308 417,316 294,833 262,125 139,533
Other borrowed funds
and long term debt......... 156,152 60,284 6,382 6,384 6,372
Capital trust pass-
through securities......... 38,079 - - - -
Ratios:
Average equity to
average assets.............. 7.57% 7.76% 8.48% 8.43% 8.84%
Return on average
equity...................... 20.92 19.44 18.00 18.48 18.68
Return on average
assets...................... 1.58 1.51 l.53 l.56 1.65
* After retroactive adjustment for all stock dividends and stock splits declared
through December 31, 1997. The earnings per share amounts prior to 1997 have
been restated as required to comply with Statement of Financial Accounting
Standards No. 128 "Earnings Per Share".
-26-
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The information under the caption "Management's Discussion and
Analysis of Financial Condition and Results of Operations" on pages
20 through 27 in the Registrant's 1997 Annual Report to Shareholders
is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The report of independent auditors and consolidated financial
statements on pages 28 through 44 in the Registrant's 1997 Annual
Report to Shareholders are incorporated herein by reference.
Quarterly Results of Operations on page 44 of the Registrant's 1997
Annual Report to Shareholders are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not Applicable.
PART III.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT.
Except for information contained in Item X above pertaining to
executive officers of the Registrant, the information required by
Item 10 is incorporated herein by reference from the Registrant's
Proxy Statement relating to the Registrant's 1998 Annual Meeting of
Shareholders under the caption "Management of the Company".
ITEM 11. EXECUTIVE COMPENSATION.
The information under the caption "Compensation of Management and
Other Information" in the Registrant's Proxy Statement for the 1998
Annual Meeting of Shareholders is incorporated herein by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information under the captions "Management of the Company" and
"Principal Shareholders" in the Registrant's Proxy Statement for the
1998 Annual Meeting of Shareholders is incorporated herein by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information under the caption "Certain Transactions with
Directors and Management" in the Registrant's Proxy Statement for the
1998 Annual Meeting of Shareholders is incorporated herein by
reference.
-27-
PART IV.
ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES AND REPORTS ON FORM 8-K.
(a)(1) and (2) The response to this portion of Item 14 is
and (c) submitted as a separate section of this report.
(a)(3) Listing of Exhibits:
Exhibit No. Description
----------- -----------
3.1 Charter of National Commerce Bancorporation as
amended and restated.
3.2 Bylaws of National Commerce Bancorporation as
amended filed as Exhibit 3.2 to the Registrant's
Form 10-K for the year ended December 31, 1995
(File No. 0-6094) and incorporated herein by
reference.
4.1 Specimen Stock Certificate filed as Exhibit 4.1
to the Registrant's Form 10-K for the year ended
December 31, 1996 (File No. 0-6094) and
incorporated herein by reference.
10.1 Form of Promissory Notes of NBC payable to The
Mallory Partners, filed as Exhibit 10.1 to the
Registrant's Form 10-K for the year ended
December 31, 1987 (File No. 0-6094) and
incorporated herein by reference.
10.2 Employment Agreement as of October 1, 1991, by
and between National Bank of Commerce and Bruce
E. Campbell, Jr., filed as Exhibit 10.5 to the
Registrant's Form 10-K for the year ended
December 31, 1987 (File No. 0-6094) and
incorporated herein by reference.
10.3 Employment Agreement dated as of January 1,
1992, by and between National Bank of Commerce
and John S. Evans, filed as Exhibit 10.6 to the
Registrant's Form 10-K for the year ended
December 31, 1992 (File No. 0-6094) and
incorporated herein by reference.
10.4 Employment Agreement dated as of January 1,
1992, by and between National Bank of Commerce
and William R. Reed, Jr., filed as Exhibit 10.8
to the Registrant's Form 10-K for the year ended
December 31, 1992 (File No. 0-6094) and
incorporated herein by reference.
10.5 Employment Agreement dated as of September 1,
1993, by and between National Bank of Commerce
and Thomas M. Garrott, filed as Exhibit 10.9 to
the Registrant's Form 10-K for the year ended
December 31, 1994 (File No. 0-6094) and
incorporated herein by reference.
10.6 Employment Agreement dated as of September 1,
1993, by and between National Bank of Commerce
and Gary L. Lazarini, filed as Exhibit 10.10 to
the Registrant's Form 10-K for the year ended
December 31, 1994 (File No. 0-6094) and
incorporated herein by reference.
-28-
10.7 Employment Agreement dated as of September 1,
1993, by and between National Bank of Commerce
and Mackie H. Gober, filed as Exhibit 10.11 to
the Registrant's Form 10-K for the year ended
December 31, 1994 (File No. 0-6094) and
incorporated herein by reference.
10.8 Deferred Compensation Agreement for Thomas M.
Garrott, filed as Exhibit 10c(2) to the
Registrant's Form 10-K for the year ended
December 31, 1984 (File No. 0-6094) and
incorporated herein by reference.
10.9 Employment Agreement dated as of July 1, 1994,
by and between National Bank of Commerce and
Lewis E. Holland filed as Exhibit 10.14 to the
Registrant's Form 10-K for the year ended
December 31, 1994 (File No. 0-6094) and
incorporated herein by reference.
10.10 Split Dollar Insurance Plan filed as Exhibit
10c(3) to the Registrant's Form 10-K for the
year ended December 31, 1984 (File No. 0-6094)
and incorporated herein by reference.
10.11 Bonus Incentive Plan, filed as Exhibit 10c(1) to
the Registrant's Form 10-K for the year ended
December 31, 1980 (File No. 0-6094) and
incorporated herein by reference.
10.12 1982 Incentive Stock Option Plan, as amended.
(filed as Exhibit 10.8 to the Registrant's Form
10-K for the year ended December 31, 1988 (File
No. 0-6094)) and incorporated herein by
reference.
10.13 1986 Stock Option Plan, filed as Exhibit A to
the Registrant's Proxy Statement for the 1987
Annual Meeting of Shareholders and incorporated
herein by reference.
10.14 1990 Stock Plan, filed as Exhibit A to the
Registrant's Proxy Statement for the 1990 Annual
Meeting of Shareholders and incorporated herein
by reference.
10.15 Form of Amendment to 1986 Stock Option Plan,
filed as Exhibit 10.10 to the Registrant's Form
10-K for the year ended December 31, 1988 (File
No. 0-6094) and incorporated herein by
reference.
10.16 1994 Stock Plan, filed as Exhibit A to the
Registrant's Proxy Statement for the 1994 Annual
Meeting of Shareholders and incorporated herein
by reference.
10.17 Resolution authorizing Pension Restoration Plan,
filed as Exhibit 10(c)(7) to the Registrant's
Form 10-K for the year ended December 31, 1986
(File No. 0-6094) and incorporated herein by
reference.
-29-
10.18 Employment Agreement dated as of August 19,
1996, by and between National Commerce
Bancorporation and Jacques Driscoll.
13 Registrant's 1997 Annual Report to Shareholders.
21 Subsidiaries of the Registrant.
23 Consent of Independent Auditors.
27 Financial Data Schedule.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the Registrant during the last
quarter of the period covered by this report.
(d) Financial Statement Schedules:
None
-30-
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.
NATIONAL COMMERCE BANCORPORATION
--------------------------------
(Registrant)
/s/ Thomas M. Garrott
----------------------------
Thomas M. Garrott
Chairman of the Board
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 date indicated.
March 12, 1998 /s/ Thomas M. Garrott
- -------------- ----------------------------
Dated Thomas M. Garrott
Chairman of the Board
(Principal Executive Officer)
March 12, 1998 /s/ Lewis E. Holland
- -------------- ----------------------------
Dated Lewis E. Holland
Vice Chairman, Treasurer, and Chief
Financial Officer
(Principal Financial Officer and
Principal Accounting Officer)
/s/ G. Mark Thompson /s/ Lewis E. Holland
- ----------------------------- -----------------------------
Director Director
/s/ R. Grattan Brown, Jr.
- -----------------------------
Director
/s/ James E. McGehee, Jr.
- -----------------------------
Director
/s/ William R. Reed, Jr.
- -----------------------------
Director
/s/ Harry J. Phillips, Sr.
- -----------------------------
Director
/s/ Bruce E. Campbell, Jr.
- -----------------------------
Director
/s/ Thomas C. Farnsworth, Jr.
- -----------------------------
Director
Dated: March 12, 1998
--------------
-31-
ANNUAL REPORT ON FORM 10-K
ITEM 14(a)(1) and (2), and (c)
LIST OF FINANCIAL STATEMENTS
CERTAIN EXHIBITS
YEAR ENDED DECEMBER 31, 1997
NATIONAL COMMERCE BANCORPORATION
MEMPHIS, TENNESSEE
-32-
FORM 10-K -- ITEMS 14(a)(1) and (2)
NATIONAL COMMERCE BANCORPORATION AND SUBSIDIARIES
LIST OF FINANCIAL STATEMENTS
The following consolidated financial statements and report of independent
auditors of National Commerce Bancorporation and Subsidiaries, included in the
annual report of the registrant to its shareholders for the year ended December
31, 1997, are incorporated by reference in Item 8:
Report of Independent Auditors
Consolidated Balance Sheets--December 31, 1997 and 1996
Consolidated Statements of Income--Years ended December 31, 1997, 1996 and
1995
Consolidated Statements of Cash Flows--Years ended December 31, 1997, 1996
and 1995
Consolidated Statements of Stockholders' Equity--Years ended December 31,
1997, 1996 and 1995
Notes to Consolidated Financial Statements--December 31, 1997
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.
-33-
EXHIBIT INDEX
Exhibit Description of Exhibit
- ------- -------------------------
3.1 Charter of National Commerce
Bancorporation as amended and
restated.
3.2 Bylaws of National Commerce
Bancorporation as amended filed as
Exhibit 3.2 to the Registrant's
Form 10-K for the year ended
December 31, 1995 (File No. 0-6094).
4.1 Specimen Stock Certificate filed as
Exhibit 4.1 to the Registrant's
Form 10-K for the year ended
December 31, 1996 (File No. 0-6094).
10.1 Form of Promissory Notes of National
Bank of Commerce payable to The Mallory
Partners filed as Exhibit 10.1 to
the Registrant's Form 10-K for the
year ended December 31, 1987
(File No. 0-6094).
10.2 Employment Agreement dated as of
October 1, 1991, by and between
National Bank of Commerce and
Bruce E. Campbell, Jr. filed as
Exhibit 10.5 to the Registrant's Form
10-K for the year ended December 31, 1992
(File No. 0-6094).
10.3 Employment Agreement dated as of
January 1, 1992, by and between
National Bank of Commerce and
John S. Evans filed as Exhibit 10.6
to the Registrant's Form 10-K for the
year ended December 31, 1992
(File No. 0-6094).
10.4 Employment Agreement dated as of
January 1, 1992, by and between
National Bank of Commerce and
William R. Reed, Jr. filed as
Exhibit 10.8 to the Registrant's Form 10-K
for the year ended December 31, 1992 (File No. 0-6094).
10.5 Employment Agreement dated as of
September 1, 1993, by and between
National Bank of Commerce and
Thomas M. Garrott filed as Exhibit 10.9
to the Registrant's Form 10-K for the
year ended December 31, 1994
(File No. 0-6094).
-1-
10.6 Employment Agreement dated as of
September 1, 1993, by and between
National Bank of Commerce and
Gary L. Lazarini filed as Exhibit 10.10
to the Registrant's Form 10-K for the
year ended December 31, 1994
(File No. 0-6094).
10.7 Employment Agreement dated as of
September 1, 1993, by and between
National Bank of Commerce and
Mackie H. Gober filed as Exhibit 10.11
to the Registrant's Form 10-K for the
year ended December 31, 1994
(File No. 0-6094).
10.8 Deferred Compensation Agreement
for Thomas M. Garrott, filed as
Exhibit 10c(2) to the Registrant's
Form 10-K for the year ended
December 31, 1984 (File No. 0-6094).
10.9 Lewis E. Holland, filed as
Exhibit 10.14 to the Registrant's
Form 10-K for the year ended
December 31, 1994 (File No. 0-6094).
10.10 Split Dollar Insurance Plan filed
as Exhibit 10c(3) to the Registrant's
Form 10-K for the year ended
December 31, 1984 (File No. 0-6094).
10.11 Bonus Incentive Plan, filed as
Exhibit 10c(1) to the Registrant's
Form 10-K for the year ended
December 31, 1980 (File No. 0-6094).
10.12 1982 Incentive Stock Option Plan, as
amended, filed as Exhibit 10.8 to the
Registrant's Form 10-K for the year
ended December 31, 1988
(File No. 0-6094).
10.13 1986 Stock Option Plan, filed as
Exhibit A to the Registrant's Proxy
Statement for the 1987 Annual Meeting
of Shareholders.
10.14 1990 Stock Plan, filed as Exhibit A
to the Registrant's Proxy Statement
for the 1990 Annual Meeting of
Shareholders.
10.15 Form of Amendment to 1986 Stock Option
Plan, filed as Exhibit 10.10 to the
Registrant's Form 10-K for the year
ended December 31, 1988 (File No. 0-6094).
10.16 1994 Stock Plan, filed as Exhibit A to the
Registrant's Proxy Statement for the 1994
Annual Meeting of Shareholders.
-2-
10.17 Resolution authorizing Pension Restoration
Plan, filed as Exhibit 10(c)(7) to the
Registrant's Form 10-K for the year
ended December 31, 1986 (File No. 0-6094).
10.18 Employment Agreement dated as of
August 19, 1996, by and between
National Commerce Bancorporation and
Jacques Driscoll.
13 Registrant's 1997 Annual Report to
Shareholders.
21 Subsidiaries of the Registrant.
23 Consent of Independent Auditors.
27 Financial Data Schedule
* incorporated herein by reference
-3-