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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission file number 0-13585
NATIONAL CITY BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Indiana 35-1632155
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
227 Main Street, P.O. Box 868, Evansville, Indiana 47705-0868
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 812-464-9800
Securities registered pursuant to Section 12(b) of the Act:
NONE
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $3.33 1/3 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 shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes (X) No ( )
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. (X)
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Based on the closing sales price of March 11, 1994, the aggregate market value
of the voting stock held by non-affiliates of the registrant was $123,330,215.
The number of shares outstanding of the registrant's common stock, $3.33 1/3
par value was 3,741,227 at March 11, 1994.
DOCUMENTS INCORPORATED BY REFERENCE
(1) Portions of the Registrant's Annual Report to Shareholders for
the year ended December 31, 1993. (Part I, Part II, and Part IV)
(2) Portions of the Registrant's Proxy Statement for the Annual
Shareholders' Meeting to be held April 19, 1994. (Part III)
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NATIONAL CITY BANCSHARES, INC.
1993 FORM 10-K ANNUAL REPORT
Table of contents
PAGE
NUMBER
PART I
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . 4
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . 8
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . 8
Item 4. Submission of Matters to a Vote of Security
Holders . . . . . . . . . . . . . . . . . . . . . . . 8
PART II
Item 5. Market for Registrant's Common Equity and Related
Shareholder Matters . . . . . . . . . . . . . . . . . 9
Item 6. Selected Financial Data . . . . . . . . . . . . . . . 9
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation . . . . . . . . . . 9
Item 8. Financial Statements and Supplementary Data . . . . . 9
Item 9. Changes in and Disagreements With Accountants on
Accounting and Financial Disclosure . . . . . . . . . 9
PART III
Item 10. Directors and Executive Officers of the Registrant . . 10
Item 11. Executive Compensation . . . . . . . . . . . . . . . . 11
Item 12. Security Ownership of Certain Beneficial Owners and
Management . . . . . . . . . . . . . . . . . . . . . . 11
Item 13. Certain Relationships and Related Transactions . . . . 11
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K . . . . . . . . . . . . . . . . . . . . . 12
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
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FORM 10-K
NATIONAL CITY BANCSHARES, INC.
December 31, 1993
PART I
ITEM 1. BUSINESS
National City Bancshares, Inc., (hereinafter referred to as the Corporation),
is an Indiana Corporation organized in 1985 to engage in the business of a bank
holding company. Based in Evansville, Indiana, the Corporation has eleven
wholly owned subsidiaries, ten commercial banks serving twenty towns and cities
with a total of thirty banking centers and an insurance agency. Each
subsidiary, its locations, number of offices, year founded and date of merger
is shown below. In addition to these mergers, Chandler State Bank was acquired
by the Corporation in August 1986 and merged into The National City Bank of
Evansville in June 1987.
Subsidiary Number of Year Date of
Principal and Other Cities Offices Founded Merger
The National City Bank of Evansville 11 1850 May 6, 1985
Evansville, Chandler and Newburgh,
Indiana
Poole Deposit Bank 1 1902 November 30, 1986
Poole, Kentucky
The Peoples National Bank of Grayville 1 1937 May 16, 1988
Grayville, Illinois
The Farmers and Merchants Bank 1 1896 January 30, 1989
Fort Branch, Indiana
Farmers State Bank 2 1916 November 30, 1990
Sturgis, Kentucky
Lincolnland Bank 6 1904 December 17, 1993
Dale, Chrisney, Grandview,
Hatfield, Reo and Rockport, Indiana
The Bank of Mitchell 3 1882 December 17, 1993
Mitchell and Bedford, Indiana
Pike County Bank 1 1900 December 17, 1993
Petersburg, Indiana
The Spurgeon State Bank 2 1921 December 17, 1993
Spurgeon and Arthur, Indiana
The State Bank of Washington 2 1910 December 17, 1993
Washington and Odon, Indiana
Ayer-Wagoner-Deal Insurance Agency, Inc. 1 1989 December 17, 1993
Rockport, Indiana
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The Corporation's subsidiary banks provide a wide range of financial services
to the communities they serve in southwestern Indiana, western Kentucky and
southeastern Illinois. These services include various types of deposit
accounts; safe deposit boxes; safekeeping of securities; automated teller
machines; consumer, mortgage and commercial loans; mortgage loan sales and
servicing; letters of credit; accounts receivable management (financing,
accounting, billing and collecting); and complete personal and corporate trust
services. All banks are members of the Federal Deposit Insurance Corporation.
The Corporation's nonbank subsidiary, Ayer-Wagoner-Deal Insurance Agency, Inc.,
operates as an insurance agency offering various insurance products through
several insurance companies or underwriters and sells the following types of
insurance: life, casualty, property, homeowners, business, disability and
automobile.
At December 31, 1993, the Corporation and its subsidiaries had 388 full-time
equivalent employees. The subsidiaries provide a wide range of employee
benefits and consider employee relations to be excellent.
COMPETITION
The Corporation has active competition in all areas in which it presently
engages in business. Each subsidiary bank competes for commercial and
individual deposits and loans with commercial banks, savings and loan
associations, credit unions connected with local businesses and other
non-banking institutions. The Corporation's insurance agency competes with
several other insurance agencies in Rockport, Indiana, and neighboring
communities.
FOREIGN OPERATIONS
The Corporation and its subsidiaries have no foreign branches or significant
business with foreign obligers or depositors.
REGULATION AND SUPERVISION
The Corporation, as a bank holding company registered under the Bank Holding
Company Act of 1956, as amended ("Act"), is subject to regulation by the Board
of Governors of the Federal Reserve System ("Board"). Under the Act, the
Corporation is required to obtain the prior approval of the Board before
acquiring direct or indirect ownership or control of more than 5% of the voting
shares of any bank which is not already majority owned. In addition, the
Corporation is prohibited under the Act, with certain exceptions, from
acquiring direct or indirect ownership or control of 5% or more of the voting
shares of any company which is not a bank. The Corporation may engage in, and
may own shares of companies engaged in, certain activities found by the Board
to be so closely related to banking as to be a proper incident thereto. The
Act prohibits the acquisition by a bank holding company of shares of a bank
located outside the state in which the operations of its banking subsidiaries
are principally conducted,
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unless such an acquisition is specifically authorized by statute of the state
in which the bank to be acquired is located. The Corporation is required by
the Act to file annual reports of its operations with the Board and such
additional information as they may require pursuant to the Act, and the
Corporation and its subsidiaries are subject to examination by the Board.
Further, under the Act and the regulations of the Board, the Corporation and
its subsidiaries are prohibited from engaging in certain tie-in arrangements
with respect to any extension of credit or provision of property or services.
The Board has adopted "capital adequacy guidelines" for its use in examining
and supervising bank holding companies. A bank holding company's ability to
pay dividends and expand its business through the acquisition of additional
subsidiaries can be restricted if its capital falls below levels established by
these guidelines.
The primary supervisory authority of The National City Bank of Evansville and
The Peoples National Bank of Grayville is the Comptroller of the Currency, who
regularly examines such areas as reserves, loans, investments, management
practices and other aspects of bank operations. The Comptroller of the
Currency has the authority to prevent a national bank from engaging in an
unsafe or an unsound practice in conducting its business. The payment of
dividends, depending upon the financial condition of a bank, could be deemed
such a practice. In addition, both banks are members of, and subject to
regulation by, the Federal Deposit Insurance Corporation.
As state banks, Poole Deposit Bank and Farmers State Bank are supervised and
regulated by the Commonwealth of Kentucky Department of Financial Institutions.
The Farmers and Merchants Bank, Lincolnland Bank, The Bank of Mitchell, Pike
County Bank, The Spurgeon State Bank and The State Bank of Washington are
supervised and regulated by the State of Indiana Department of Financial
Institutions. In addition, all eight banks are members of, and subject to
regulation by, the Federal Deposit Insurance Corporation.
Federal and state banking laws and regulations govern, among other things, the
scope of the bank's business, the investments it may make, the reserves against
deposits it must maintain, loans the bank makes and collateral it takes,
activities with respect to mergers and consolidations and the establishment of
branches.
The Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA") was enacted on August 9, 1989, primarily in an attempt to address
problems in the savings and loan industry. However, the Act has had a
substantial effect on the environment in which commercial banks operate. The
annual assessment rates for banks insured by the Federal Deposit Insurance
Corporation were to increase from .083% of deposits to .12% in 1990, and to
.15% in 1991. However, such rates were increased by the FDIC to .195%
effective January 1, 1991 and .23% effective July 1, 1991.
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The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA")
was enacted in 1991. Among other things, FDICIA, requires federal bank
regulatory authorities to take "prompt corrective action" with respect to banks
that do not meet minimum capital requirements. For these purposes, FDICIA
established five capital tiers: well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized, and critically
undercapitalized. The Corporation and each of the Corporation's Banks
currently exceed the regulatory definition of a "well capitalized" financial
institution.
The Ayer-Wagoner-Deal Insurance Agency, Inc. is regulated by the Indiana
Department of Insurance.
STATISTICAL DISCLOSURE
The statistical disclosure on the Corporation and its subsidiaries, on a
consolidated basis, included on pages 1, 3 through 13 and 33 of the
Corporation's Annual Report to Shareholders for the fiscal year ended December
31, 1993, is hereby incorporated by reference herein.
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ITEM 2. PROPERTIES
The net investment of the Corporation and its subsidiaries in real estate and
equipment at December 31, 1993, was $10,439,166. The Corporation's offices are
located in a building owned by The National City Bank of Evansville
(hereinafter referred to as the Bank), in which the Bank's main office is
located. The main office of the Bank is located at 227 Main Street in downtown
Evansville, Indiana. This building is owned in fee by the Bank. The other
subsidiary banks, all branches and the insurance agency are located on premises
either owned or leased. None of the property is subject to any major
encumbrance.
ITEM 3. LEGAL PROCEEDINGS
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of 1993, two matters were submitted to a vote of
shareholders. On December 14, 1993, a special meeting of the shareholders was
held to consider and take action on proposals to approve and adopt two Merger
Agreements. The first Merger Agreement dated July 1, 1993, by and between the
Corporation and Lincolnland Bancorp, Inc. ("Lincolnland") provided for, among
other things, the merger of Lincolnland with and into the Corporation. This
proposal was approved with 2,003,763.1085 shares voted affirmatively,
3,614.0000 negatively and 31,460.8022 abstaining. The second Merger Agreement
dated June 25, 1993, by and between the Corporation and Sure Financial
Corporation, ("Sure") provided for, among other things, the merger of Sure with
and into the Corporation. This proposal was approved with 2,024,601.1085
shares voted affirmatively, 288,160.7531 negatively and 9,532.8022 abstaining.
Both mergers were consummated December 17, 1993.
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
AND RELATED SHAREHOLDER MATTERS
Pages 1 and 33 of the Corporation's Annual Report to Shareholders for the
fiscal year ended December 31, 1993, is hereby incorporated by reference
herein. Dividends are restricted by earnings and the need to maintain adequate
capital. Management intends to continue its current dividend policy subject to
these restrictions.
ITEM 6. SELECTED FINANCIAL DATA
Page 1 of the Corporation's Annual Report to Shareholders for the fiscal year
ended December 31, 1993, is hereby incorporated by reference herein.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
Pages 1, 3 through 13 and 33 of the Corporation's Annual Report to Shareholders
for the fiscal year ended December 31, 1993, are incorporated by reference
herein.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Pages 15 through 30 of the Corporation's Annual Report to Shareholders for the
fiscal year ended December 31, 1993, are incorporated by reference herein.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
The Board of Directors approved the appointment of McGladrey & Pullen,
Certified Public Accountants and Consultants, as independent accountants to
audit the financial statements of the Corporation and its subsidiaries for the
year 1993. Gaither Rutherford & Co., formerly Gaither Koewler Rohlfer Luckett
& Co., ("Gaither") audited the books and records of the Corporation and its
subsidiaries from 1985 through 1992. The Board of Directors had determined it
to be in the best interest of the Corporation to change independent accountants
for 1993. This change was ratified by the Corporation's shareholders at the
1993 annual meeting.
The financial statements provided by Gaither in 1992 and 1991 did not contain
any adverse opinions or any disclaimers of opinions, nor were they qualified or
modified as to uncertainty, audit scope or accounting reasons. Further, there
have been no disagreements between Gaither and the Corporation.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) Directors of the Corporation
This information under the heading "Election of Directors and Information with
Respect to Directors and Officers" on pages 3 to 6 of the Corporation's Proxy
Statement for its Annual Meeting of Shareholders to be held April 19, 1994, is
hereby incorporated by reference herein.
(b) Executive Officers of the Corporation
The Executive Officers of the Corporation, most of whom are also Executive
Officers of The National City Bank of Evansville (hereinafter referred to as
the Bank) are as follows:
NAME AGE OFFICE AND BUSINESS EXPERIENCE
John D. Lippert 60 Chairman of the Board and Chief Executive Officer of the Corporation since 1992. President of the
Corporation from 1985 to June 1993. Director of the Corporation since 1985. Chairman of the Board
of the Bank since 1992 and Chief Executive Officer since 1989. President of the Bank from 1984 to
June 1993 and a Director since 1981.
Robert A. Keil 50 President of the Corporation since June 1993. Executive Vice President of the Corporation from
1991 to June 1993. Assistant Secretary and Assistant Treasurer of the Corporation from 1985 to
June 1993. Executive Vice President of the Bank from 1991 to June 1993 and Senior Vice President
from 1987 to 1991.
Benjamin W. Bloodworth 58 Executive Vice President and Assistant Secretary/Treasurer of the Corporation since June 1993.
Senior Vice President of the Corporation from 1989 to June 1993. Executive Vice President of the
Bank since 1991. Senior Vice President of the Bank from 1980 to 1991. Director of The Peoples
National Bank of Grayville from 1988 to January 1994. Director of The Farmers and Merchants Bank
from 1989 to January 1993. Director of Lincolnland Bank and The State Bank of Washington since
January 1994.
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NAME AGE OFFICE AND BUSINESS EXPERIENCE
Michael F. Elliott 42 Executive Vice President of the Corporation since December 1993. Chairman of the Board since 1989,
Chief Executive Officer and Director since 1982 of The State Bank of Washington. President of The
State Bank of Washington from 1982 to 1989. Chairman of the Board from 1990 to December 1993 and
President and Chief Executive Officer from 1988 to December 1993 of Sure Financial Corporation.
Harold A. Mann 55 Secretary and Treasurer of the Corporation since 1985. Senior Vice President and Controller of
the Bank since 1984. Director of Poole Deposit Bank from 1986 to 1990 and from January 1994 to
Present.
ITEM 11. EXECUTIVE COMPENSATION
The information under the heading "Compensation of Executive Officers" on pages
7 through 11 of the Corporation's Proxy Statement for its Annual Meeting of
Shareholders to be held April 19, 1994, is hereby incorporated by reference
herein.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The information under the heading "Voting Securities" on pages 1 through 3 of
the Corporation's Proxy Statement for its Annual Meeting of Shareholders to be
held April 19, 1994, is hereby incorporated by reference herein.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information under the heading "Transactions with Management" on page 11 of
the Corporation's Proxy Statement for its Annual Meeting of Shareholders to be
held April 19, 1994, is hereby incorporated by reference herein.
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
AND REPORTS ON FORM 8-K
FINANCIAL STATEMENTS
The following consolidated financial statements of the Corporation and its
subsidiaries, included on pages 15 through 30 of the Corporation's Annual
Report to Shareholders for the fiscal year ended December 31, 1993, are hereby
incorporated by reference:
Independent Auditor's Report
Consolidated Statements of Financial Position, at
December 31, 1993 and 1992
Consolidated Statements of Income, years ended
December 31, 1993, 1992 and 1991
Consolidated Statements of Shareholders' Equity,
years ended December 31, 1993, 1992 and 1991
Consolidated Statements of Cash Flows, years ended
December 31, 1993, 1992 and 1991
Notes to Consolidated Financial Statements
FINANCIAL STATEMENT SCHEDULES
All schedules are omitted because they are not applicable or not required or
because the required information is included in the consolidated financial
statements or related notes.
EXHIBITS
The following exhibits are submitted herewith:
3 - Articles of Incorporation, as amended
13 - Annual Report to Shareholders for the year ended
December 31, 1993 (Incorporated by Reference)
22 - Subsidiaries of the Registrant
28 - Proxy Statement for the Annual Meeting of
Shareholders to be held on April 19, 1994
(Incorporated by Reference)
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REPORTS ON FORM 8-K
Form 8-K dated December 29, 1993, reported that on December 17, 1993, the
Registrant completed its acquisition of Sure Financial Corporation ("Sure") and
Lincolnland Bancorp, Inc. ("Lincolnland"). The transactions were structured as
statutory mergers, pursuant to which each of Sure and Lincolnland were merged
with and into National City Bancshares, Inc. Sure was a multibank holding
company with approximately $130 million in assets and Lincolnland was a
one-bank holding company with approximately $108 million in total assets.
Shareholders of Lincolnland received shares of Registrant valued at $23.5
million and shareholders of Sure received shares of Registrant valued at $16
million in the transactions. The former subsidiaries of Lincolnland and Sure
will be operated as wholly owned subsidiaries of Registrant. The consolidated
entity will have approximately $711 million in total assets.
In other matters, Michael F. Elliott was appointed Executive Vice President of
the Registrant on December 21, 1993. Mr. Elliott was President of Sure.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, on the dates indicated.
NATIONAL CITY BANCSHARES, INC.
By /s/ JOHN D. LIPPERT 3/15/94
John D. Lippert Date
Chairman of the Board and
Chief Executive Officer
By /s/ ROBERT A. KEIL 3/15/94
Robert A. Keil Date
President and
Chief Financial Officer
By /s/ HAROLD A. MANN 3/15/94
Harold A. Mann Date
Secretary and Treasurer
(Chief Accounting Officer)
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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.
Donald B. Cox Date
Director
/s/ SUSANNE R. EMGE 3/15/94
Mrs. N. Keith Emge Date
Director
/s/ MICHAEL D. GALLAGHER 3/15/94
Michael D. Gallagher Date
Director
/s/ DONALD G. HARRIS 3/15/94
Donald G. Harris Date
Director
/s/ ROBERT H. HARTMANN 3/15/94
Robert H. Hartmann Date
Director
/s/ C. MARK HUBBARD 3/15/94
C. Mark Hubbard Date
Director
/s/ EDGAR P. HUGHES 3/15/94
Edgar P. Hughes Date
Director
/s/ R. EUGENE JOHNSON 3/15/94
R. Eugene Johnson Date
Director
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/s/ EDWIN F. KARGES, JR. 3/15/94
Edwin F. Karges, Jr. Date
Director
/s/ ROBERT A. KEIL 3/15/94
Robert A. Keil Date
Director
/s/ JOHN D. LIPPERT 3/15/94
John D. Lippert Date
Director
/s/ JOHN LEE NEWMAN 3/15/94
John Lee Newman Date
Director
/s/ RONALD G. REHERMAN 3/15/94
Ronald G. Reherman Date
Director
Laurence R. Steenberg Date
Director
/s/ C. WAYNE WORTHINGTON 3/15/94
C. Wayne Worthington Date
Director
/s/ GEORGE A. WRIGHT 3/15/94
George A. Wright Date
Director
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EXHIBIT INDEX
Reg. S-K
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
3 Articles of Incorporation, as
amended
13 Annual Report to Shareholders for
the year ended December 31, 1993
22 Subisdiaries of the Registrant
28 Proxy Statement for the Annual
Meeting of Shareholders to be
held on April 19, 1994
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