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1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended December 31, 1996 [Fee required]
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [No Fee Required] For the transition period from
------------- to --------------
Commission File Number 0-18166
STATE FINANCIAL SERVICES CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
WISCONSIN 39-1489983
--------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
10708 WEST JANESVILLE ROAD, HALES CORNERS, WISCONSIN 53130
-----------------------------------------------------------
(Address and zip code of principal executive offices)
(414) 425-1600
--------------
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock,
$0.10 par value.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities and Exchange
Act of 1934 during the preceding 12 months (or for shorter periods that
the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
--- ---
The aggregate market value of the voting stock held by nonaffiliates of the
registrant as of March 12, 1997 was approximately $45,699,711, based on the
following assumptions: (1) the market value of the Common Stock of $19.25 per
share which was equal to the closing price on the Nasdaq Stock Market on March
12, 1997; and (2) 2,374,011 shares of Common Stock held by nonaffiliates as of
March 12, 1997.
Indicate the number of shares outstanding of the issuer's classes of common
stock as of the latest practicable date.
As of March 12, 1997, there were 3,204,445 shares of the Registrant's
$0.10 par value Common Stock issued and outstanding.
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DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II incorporate certain information by reference from
Registrant's Annual Report to Shareholders for the fiscal year ended
December 31, 1996, (the "Annual Report") which is filed as an Exhibit to
this Report.
Part III incorporates information by reference from Registrant's
definitive Proxy Statement relating to Registrant's 1997 Annual Meeting of
Shareholders (the "Proxy Statement") which is filed as an Exhibit to this
Report.
The Exhibits incorporate certain exhibits by reference from (1)
Registrant's Form S-1 Registration Statement filed under the Securities
Act of 1933, Registration No. 33-31517, dated October 11, 1989 and the
following amendments to said Registration Statement: Amendment No. 1
dated December 6, 1989 and Amendment No. 2 dated March 16, 1990; (2)
Amendment No. 3 to Registrant's S-4 Registration Statement filed under the
Securities Act of 1933, Registration No. 33-46280, dated May 3, 1992; (3)
Registrant's report on Form 8-K dated June 19, 1992 filed under the
Securities Exchange Act of 1934; (4) Amendment No. 2 to Registrant's S-4
Registration Statement filed under the Securities Act of 1933,
Registration No. 33-59665, dated July 18, 1995; and (6) Registrant's
Annual Report on Form 10-K filed under the Securities Exchange Act of
1934 for the years ended December 31, 1991, 1992, 1993, 1994, and 1995.
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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INDEX
PART I Page
------ ----
Item 1. BUSINESS 1
Item 2. PROPERTIES 5
Item 3. LEGAL PROCEEDINGS 6
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 6
PART II
-------
Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND 7
RELATED STOCKHOLDER MATTERS
Item 6. SELECTED FINANCIAL DATA 7
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 7
FINANCIAL CONDITION RESULTS OF OPERATIONS
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 7
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS 7
ON ACCOUNTING AND FINANCIAL DISCLOSURE
PART III
--------
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 8
Item 11. EXECUTIVE COMPENSATION 8
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS 8
AND MANAGEMENT
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 8
PART IV
-------
Item 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND 9
REPORTS ON FORM 8-K
SIGNATURES Signature Page
EXHIBITS FILED AS PART OF FORM 10-K Exhibit Index
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PART I
State Financial Services Corporation, together with its consolidated
subsidiaries is hereinafter referred to as the "Company", "SFSC", or
"Registrant". SFSC is a bank holding company which owns State Financial Bank
("SFB") and State Financial Bank - Waterford ("SFB - Waterford") (collectively
referred to as the "Banks"). SFB is the entity resulting from the merger in
June 1994 of the Company's previous four banks, State Bank, Hales Corners
("State Bank"); University National Bank ("University"); Edgewood Bank
("Edgewood"); and Eastbrook State Bank ("Eastbrook") into State Bank's charter.
In 1995, SFSC acquired all of the outstanding common stock of the former
Waterford Bancshares, Inc., the parent bank holding company of Waterford Bank,
in exchange for a combination of the Company's common stock, cash and
installment notes. Waterford Bancshares, Inc. was subsequently dissolved.
Waterford Bank was renamed State Financial Bank - Waterford and is operated as
a separate banking subsidiary of the Company.
ITEM 1. BUSINESS.
GENERAL
SFSC is a Wisconsin corporation headquartered in Hales Corners, Wisconsin.
The Company is a bank holding company which owns and operates State Financial
Bank with seven full-service locations and State Financial Bank - Waterford.
Four of SFB's offices, Hales Corners, Greenfield, Glendale, and Milwaukee are
located in Milwaukee County, Wisconsin, the most populous county in the state.
Three of SFB's offices; Brookfield, Muskego, and Waukesha are located in
Waukesha County, Wisconsin which is immediately west of Milwaukee County. In
addition, SFB also operates a loan production office providing lending outlets
to Milwaukee's central city. Waterford is located in northwestern Racine
County, Wisconsin which is immediately south of Milwaukee County. The Company
was organized in 1984 to become a holding company for the former State Bank.
In 1985, State Financial completed its first bank acquisition by purchasing the
former University, located on the northeast side of Milwaukee. The acquisition
of the former Edgewood in Greenfield, Wisconsin was completed in 1987. In
1988, the former University acquired the deposit liabilities and various fixed
assets of the branch facility of a competing savings institution located at
2650 North Downer Avenue in Milwaukee. This was the first acquisition of a
thrift facility by a bank in Wisconsin. In 1990, State Financial acquired 4.9%
of the former Eastbrook, a newly chartered bank located in Brookfield,
Wisconsin. State Financial acquired the remaining capital stock of the former
Eastbrook in 1992. In 1993, the former Eastbrook acquired the deposit
liabilities and various fixed assets of the branch facility of a competing
savings institution located at 400 E. Broadway in Waukesha, Wisconsin. SFB
also operates a limited service loan production office serving Milwaukee's
central city to provide easier access to the SFB's lending products. In 1995,
SFSC acquired all of the outstanding common stock of the former Waterford
Bancshares, Inc., the parent bank holding company of Waterford Bank, in
exchange for a combination of the Company's common stock, cash and installment
notes. The Company operates SFB - Waterford as a separate banking subsidiary.
When used in this report, the words "believes," "expects," and similar
expressions are intended to identify forward-looking statements. The Company's
actual results may differ materially from those described in the
forward-looking statements. Factors which could cause such a variance to occur
include, but are not limited to, changes in interest rates, levels of consumer
bankruptcies, customer loan and deposit preferences, and other general economic
conditions.
BUSINESS STRATEGY. SFSC is strongly committed to community banking and
places a high degree of emphasis on developing full service banking
relationships with its business and retail customers. To capitalize on
management's knowledge of its immediate market, each office is operated with
substantial independence, supported by centralized administrative and
operational functions to promote efficiency while permitting the management
responsible for each office the flexibility to concentrate on customer service
and business development in its own unique market area. To be an effective
community bank, SFSC believes the decision-making process must stem primarily
from the Banks in their credit decisions and array of products. SFSC believes
the empowerment of the day-to-day decision making to the individual office
locations remains critical to its success as an effective community banking
organization.
The Banks seeks to develop and enhance full-service banking relationships
through a systematic calling program directed at both existing customers and
referral sources from its customer base, attorneys, accountants and business
people. The officers and employees of the Banks are actively involved in a
variety of civic, charitable and community organizations both as an additional
referral source and as a service to their respective communities.
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PRODUCTS AND SERVICES. Through the Banks, SFSC provides a broad range of
services to individual and commercial customers. These services include
accepting demand, savings and time deposits, including regular checking
accounts, NOW accounts, money market account, certificates of deposit,
individual retirement accounts and club accounts. The Banks also offers a
variety of annuity and insurance products through its in-house securities
representative. The Banks's lending products include secured and unsecured
commercial, mortgage, construction and consumer term loans on both a fixed and
variable rate basis. Historically, the terms on these loans range from one
month to five years and are retained in the Banks's portfolio. The Banks also
provide lines of credit to commercial accounts and to individuals through home
equity and credit card plans. The Company also originates residential real
estate loans in the form of adjustable rate, fifteen and thirty year fixed rate
first mortgages, selling these originations in the secondary mortgage market
service released.
COMPETITION AND MARKET ENVIRONMENT. SFB's' offices are located in the
Milwaukee and Waukesha metropolitan areas and experience substantial
competition from other financial institutions including savings banks, credit
unions, non-bank lenders, and consumer finance companies, many of which are
substantially larger than the SFB. Within a short distance of SFB, there are
numerous other financial institutions. SFB - Waterford's office is located in
the town of Waterford and experiences substantial competition from other
financial institutions including other banks, savings banks, and consumer
finance companies located in Waterford and surrounding communities. The Banks
compete for deposits principally by offering depositors a variety of deposit
programs, convenient office locations, banking hours, 24 hour account access
through telephone and personal computer delivery systems, and other services.
The Banks compete for loan originations primarily through the interest rates
and loan fees they charge, the efficiency and quality of services they provide
borrowers, and the variety of their products. Factors affecting competition
include the general and local economic conditions and current interest rate
levels. Management believes that recent changes in the local banking industry,
including mergers and consolidations involving both commercial and thrift
institutions, have resulted in a decrease in the level of competition for small
to medium sized business customers in the Banks' market areas.
EMPLOYEES. At December 31, 1996, the Company and the Banks employed 87
full-time and 60 part-time employees. The Company considers its relationships
with its employees to be excellent. Each employee who meets the eligibility
requirements is entitled to participate in the employee benefit plans of the
Company and the Banks, which include plans for group life, accidental death and
dismemberment, medical, dental, and long-term disability income insurances;
pension, 401(k), and an Employee Stock Ownership Plan ("ESOP"). Further
information regarding executive compensation and the Company's benefit plans is
incorporated by reference from the Company's definitive Proxy Statement. See
Item 11 of this Form 10-K.
THE BANKS AND OTHER SUBSIDIARIES
At December 31, 1996, the SFB (consolidated with its subsidiaries; see
"SFB - Other Subsidiaries") had total assets of $249.4 million, net loans of
$172.4 million, total deposits of $217.1 million, stockholders' equity of $22.4
million, net income of $3.9 million, and return on average assets of 1.61%. At
December 31, 1996, SFB Waterford (consolidated with its subsidiary; see "SFB -
Waterford - Other Subsidiaries") had total assets of $43.1 million, net loans
of $26.7 million, total deposits of $37.7 million, stockholders' equity of $5.2
million, net income of $0.4 million, and annualized return on average assets of
1.04%.
STATE FINANCIAL BANK. State Financial Bank was organized as a state
banking association under the laws of the State of Wisconsin in 1910 under the
name State Bank, Hales Corners. In June 1994, the bank's name was changed to
State Financial Bank in connection with the merger of the Company's banks into
State Bank's charter. SFB conducts business through seven full-service offices
located in Milwaukee and Waukesha Counties and a loan production office located
in Milwaukee's central city. SFB is engaged in the general commercial and
consumer banking business and provides full-service banking to individuals and
businesses including the acceptance of deposits to demand, time, and savings
accounts and the servicing of such accounts; commercial, consumer, and mortgage
lending; and such other banking services as are usual and customary for
commercial banks. SFB also sells annuities, insurance products, and other
investments through two in-house representatives. At December 31, 1996, SFB,
consolidated with its subsidiaries, comprised 82.8% of SFSC's consolidated
total assets. The following table sets forth SFB's full-service and loan
production office locations.
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STATE FINANCIAL BANK OFFICE LOCATIONS
Year Acquired by
Community Address Year Originated State Financial
--------- ------- --------------- ---------------
Hales Corners 10708 West Janesville Road 1910 (1)
Muskego S76 W17655 Janesville Road 1968 (1)
Milwaukee 2650 North Downer Avenue 1971 1985
Milwaukee (2) 2460 North 6th Street 1994 (1)
Greenfield 4811 South 76th Street 1978 1987
Glendale 7020 North Port Washington Road 1990 (1)
Brookfield 12600 West North Avenue 1990 1992
Waukesha 400 East Broadway 1977 1993
- -----------
(1) Organized de novo by SFB or a predecessor thereof.
(2) Loan Production Office
SFB Other Subsidiaries. SFB has two wholly owned subsidiary
corporations which are consolidated into its operations. Hales Corners
Investment Corporation is a subsidiary created to manage the majority of SFB's
investment portfolio to enhance the overall return on SFB's investment
securities. Hales Corners Development Corporation is a subsidiary which owns
the real estate related to the Hales Corners and Muskego offices, eight
commercial and residential rental properties located adjacent to the Hales
Corners office and vacant land in New Berlin held as a potential branch site.
State Financial Bank - Waterford. State Financial Bank - Waterford
was organized as a state banking association under the laws of the State of
Wisconsin in 1906 under the name Waterford Bank. SFSC acquired the common
stock of the former Waterford Bank's parent holding company, Waterford
Bancshares, Inc. in exchange for a combination of the Company's common stock,
cash, and installment notes. Waterford Bancshares, Inc. was subsequently
dissolved. Following the acquisition, the Company changed Waterford Bank's
name to State Financial Bank - Waterford to connect the bank's identity to
SFSC. SFB - Waterford operates as a separate banking subsidiary of SFSC from
its principal office located at 217 North Milwaukee Street, Waterford,
Wisconsin and has received regulatory approval to open a full-service branch
facilty at 1050 Milwaukee Avenue, Burlington, Wisconsin which is expected to
commence operation in May, 1997. SFB - Waterford is engaged in general
commercial and consumer banking, including the acceptance of deposits to
demand, time, and savings accounts and the servicing of such accounts;
commercial, consumer, and mortgage lending; and such other banking services as
are usual and customary for commercial banks. At December 31, 1996, SFB -
Waterford, consolidated with its subsidiary, comprised 14.3% of SFSC's
consolidated total assets.
SFB - Waterford Other Subsidiary. SFB - Waterford has a wholly owned
subsidiary, Waterford Investment Corporation, formed in 1995 to manage the
majority of SFB - Waterford's investment portfolio to enhance the overall
return on the bank's investment securities.
State Financial Mortgage Company. In December, 1996, the Company
formed a new wholly owned subsidiary corporation, State Financial Mortgage
Company ("SFMC"). SFMC was formed to expand the origination of secondary
market real estate mortgages on behalf of the Company and the Banks. SFMC
commenced operation effective January 1, 1997.
SUPERVISION AND REGULATION
Bank holding companies and financial institutions are highly regulated
at both the federal and state level. Numerous statutes affect the business of
SFSC and the Banks. As a bank holding company, SFSC's business activities are
regulated by the Federal Reserve Board ("FRB") under the Bank Holding Company
Act of 1956 (the "Act") which imposes various requirements and restrictions on
its operations. As part of the this supervision, SFSC files periodic reports
with and is subject to periodic examination by the FRB. The Act requires the
FRB's prior approval before SFSC may acquire direct or indirect ownership or
control of more than five percent of the voting shares of any bank or bank
holding company. The Act limits the activities of SFSC and its banking and
nonbanking subsidiaries to the business of banking and activities closely
related or incidental to banking.
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The Banks are state, non-member banks, and as such are supervised and
examined by the Wisconsin Department of Financial Institutions Division of
Banking and the Federal Deposit Insurance Corporation ("FDIC"). Additionally,
the Banks are insured by the FDIC and are subject to the provisions of the
Federal Deposit Insurance Act.
In recent years Congress has enacted significant legislation which has
substantially changed the federal deposit insurance system and the regulatory
environment in which depository institutions and their holding companies
operate. The enforcement powers of the federal regulatory agencies responsible
for supervisory authority over SFSC and the Banks have significantly increased
as a result of legislation such as the Financial Institutions Reform, Recovery
and Enforcement Act of 1989 ("FIRREA"), the Comprehensive Thrift and Bank Fraud
Prosecution and Taxpayer Recovery Act of 1990 and the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA"). Certain parts of such
legislation, most notably those which increase deposit insurance assessments,
authorize further increases to recapitalize the Bank Insurance Fund and the
Savings Association Insurance Funds which affect the cost of doing business for
depository institutions and their holding companies. FIRREA also provides that
all commonly controlled FDIC insured depository institutions may be held liable
for any loss incurred by the FDIC resulting from a failure of, or any
assistance given by the FDIC, to any commonly controlled institutions. Federal
regulatory agencies have implemented provisions of FDICIA with respect to
taking prompt corrective action when a depository institution's capital fails
to meet certain defined levels. FDICIA established five capital categories
ranging from "critically undercapitalized" to "well capitalized." A depository
institution's failure to maintain a capital level within the top two categories
will result in specific actions from the federal regulatory agencies. These
actions could include the inability to pay dividends, restriction of new
business activity, prohibiting bank acquisitions, asset growth limitations and
other restrictions on a case by case basis. Additionally, FDICIA implemented a
risk related assessment system for FDIC insurance premiums based, among other
things, on the depository institution's capital adequacy. At December 31,
1996, SFSC and the Banks each met the "well-capitalized" definition of capital
adequacy.
The Riegel-Neal Interstate Banking and Branching Efficiency Act of
1994 (the "Efficiency Act") contains provisions which amended the Bank Holding
Company Act to allow an adequately-capitalized and adequately-managed bank
holding company to acquire a bank located in another state. Effective June 1,
1997, the Efficiency Act will also allow interstate branching.
In addition to the impact of regulation, commercial banks are affected
significantly by the actions of the FRB as it attempts to control the money
supply and credit availability in order to influence economic activity.
Monetary policy changes have previously had a significant effect on operating
results of financial institutions and are expected to have such an effect in
the future. No prediction can be made as to possible future changes in
interest rates, deposit levels, and loan demand, or their effect on the
business and earnings of SFSC and the Banks.
CROSS REFERENCE TO ANNUAL REPORT
Certain information required by Industry Guide 3 is included in the
Management's Discussion and Analysis included with the Annual Report and is
incorporated herein by reference per the following schedule.
Annual Report
Guide 3 Heading Annual Report Heading Page Number
- ------------------------------------------------------------------------------------------------------------
I Distribution of Assets, Liabilities Income Statement Analysis 6
and Stockholders' Equity; Interest
Rates and Interest Differential
II Investment Portfolio Investment Activities 15
III Loan Portfolio Lending Activities 12
IV Summary of Loan Loss Experience Risk Elements in the Loan Portfolio 13
V Deposits Deposits 17
VI Return on Equity and Assets Income Statement Analysis and 11 and 19
Capital Resources
4
8
The following schedule of projected loan losses by category for the
period January 1, 1997 through December 31, 1997, required by Industry Guide 3
is not included in Management's Discussion and Analysis in the Annual Report
(dollars in thousands).
Charge-offs Recoveries Net
----------- ---------- ---------
Commercial $ 107 $ 7 $ 100
Installment 49 18 31
Real estate 95 32 63
Other 92 14 78
------------------------------------------
TOTAL $ 343 $ 71 $ 272
ITEM 2. PROPERTIES
The following table sets forth the locations of the Company's full-service
banking offices.
Office Address Sq. Feet Owned/Leased Lease Expires
------ ------- -------- ------------ -------------
Hales Corners (1) 10708 W. Janesville Road 37,000 Owned n/a
Muskego (1) S76 W17655 Janesville Road 2,680 Owned n/a
Milwaukee 2650 N. Downer Avenue 3,000 Leased 2000
Milwaukee (2) 2460 North 6th Street 100 Leased month to month
Greenfield (3) 4811 S. 76th Street 9,000 Leased 2007
Glendale (4) 7020 N. Port Washington Road 7,500 Leased 2010
Brookfield 12600 W. North Avenue 4,800 Owned n/a
Waukesha 400 E. Broadway 3,300 Owned n/a
Waterford 217 N. Milwaukee Street 10,100 Owned n/a
Burlington (5) 1050 Milwaukee Avenue 6,300 Leased 2006
1. Property is owned by SFB's wholly owned subsidiary, Hales Corners
Development Corporation.
2. Loan production office.
3. SFB leases this property from Edgewood Plaza Joint Venture. See "Item
1. Election of Directors--Certain Transactions and Other
Relationships with Management Principal Shareholders" in the Company's
Proxy Statement for further information. SFB subleases approximately
2,500 square feet of the floor space of Edgewood Plaza under a lease
which expires on December 27, 1997. In 1993, SFB executed an
extension of its lease with Edgewood Plaza which extends the SFB's
lease through December, 2007. Under the terms of this extension, SFB
will lease approximately 4,100 square feet of the floor space of
Edgewood Plaza.
4. SFB subleases approximately 1,200 square feet of its space in Glendale
to a third party.
5. Approved branch facility of SFB - Waterford expected to open in May,
1997.
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ITEM 3. LEGAL PROCEEDINGS
From time to time, the Company and the Banks are party to legal
proceedings arising out of their general lending activities and other
operations. However, there are no pending legal proceedings to which the
Company or the Banks are a party, or to which their property is subject, which,
if determined adversely to the Company, would individually or in the aggregate
have a material adverse effect on its consolidated financial position.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during
the fourth quarter of the fiscal year covered by this report.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
The information contained under the caption "Investor Information"
beginning on the inside back cover of the Annual Report is incorporated herein
by reference.
ITEM 6. SELECTED FINANCIAL DATA
The information contained under the caption "Selected Consolidated
Financial Data" appearing on page 4 of the Annual Report is incorporated herein
by reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The information contained under this caption beginning on page 5 of
the Annual Report is incorporated herein by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Consolidated Financial Statements beginning on page 21 of the
Annual Report are incorporated herein by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
None.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICER OF THE REGISTRANT
The information contained under the captions "Item 1. Election of
Directors--Directors" and "Executive Officers" in the Proxy Statement is
incorporated herein by reference.
PART 11. EXECUTIVE COMPENSATION
The information contained under the caption "Item 1. Election of
Directors--Compensation of Executive Officers" in the Proxy Statement is
incorporated herein by reference.
PART 12. SECURITY OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS, AND
BENEFICIAL OWNERS
The information contained under the caption "Item 1. Election of
Directors--Security Ownership of Management and Certain Beneficial Owners" in
the Proxy Statement is incorporated herein by reference.
PART 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information contained under the caption "Item 1. Election of
Directors--Certain Transactions and Other Relationships with Management and
Principal Shareholders" in the Proxy Statement is incorporated herein by
reference.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
8-K
(a) Documents filed:
1. Financial Statements. The following Consolidated Financial
Statements of the Company and subsidiaries, included in the
Annual Report of the Registrant to its shareholders for the
year ended December 31, 1996, are incorporated by reference in
Item 8:
Annual Report
Page #
-------------
Report of independent auditors 20
Consolidated balance sheets --
December 31, 1996 and 1995 21
Consolidated statements of income --
Years ended December 31, 1996, 1995, and 1994 22
Consolidated statements of stockholders' equity --
Years ended December 31, 1996, 1995, and 1994 23
Consolidated statements of cash flows --
Years ended December 31, 1996, 1995, and 1994 24
Notes to Consolidated Financial Statements 25
2. Financial Statement Schedules. 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.
3. Exhibits. See Exhibit Index, included as the last pages of
this report, which is incorporated herein by reference.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed by the Company during the
fourth quarter of the fiscal year under this report.
(c) Exhibits:
See Exhibit Index, which is filed with this Form 10-K
following the signature page and is incorporated herein by
reference.
(d) Financial Statement Schedules:
None.
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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.
STATE FINANCIAL SERVICES CORPORATION
By: /s/ Michael J. Falbo
-------------------------------------------------------------
Michael J. Falbo, President and Chief Executive Officer
Date: March 13, 1997
Pursuant to the requirements of the Securities and 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. The
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PRINCIPAL EXECUTIVE OFFICERS
/s/ Jerome J. Holz
------------------------ Chairman of the Board and Vice March 13, 1997
Jerome J. Holz President
/s/ Michael J. Falbo
------------------------ President and Chief Executive Officer March 13, 1997
Michael J. Falbo
/s/ Michael A. Reindl Senior Vice President, Controller, and
------------------------ Chief Financial Officer March 13, 1997
Michael A. Reindl
DIRECTORS
/s/ Jerome J. Holz
------------------------ Director March 13, 1997
Jerome J. Holz
/s/ Michael J. Falbo
------------------------ Director March 13, 1997
Michael J. Falbo
/s/ Richard A. Horn
------------------------ Director March 13, 1997
Richard A. Horn
/s/ Barbara E. Holz-Weis
------------------------ Director March 13, 1997
Barbara E. Holz-Weis
/s/ Robert R. Spitzer
------------------------ Director March 13, 1997
Robert R. Spitzer
/s/ David M. Stamm
------------------------ Director March 13, 1997
David M. Stamm
signature page
14
STATE FINANCIAL SERVICES CORPORATION
-----------------------------------------------
EXHIBIT INDEX
TO
ANNUAL REPORT ON FORM 10-K
FOR YEAR ENDED December 31, 1996
NOTE: To maintain a set of exhibit reference numbers consistent with
Registrant's prior filings under the Securities Act of 1933 and the
Securities Act of 1934, Registrant has intentionally omitted exhibit
reference numbers which pertain to exhibits which are no applicable or
in effect. Except as specifically noted below, all of the exhibits
identified are filed herewith.
Exhibit
Number Description
3.1 Articles of Incorporation of the Registrant as Amended and
Restated effective April 21, 1993. (7)
3.2 Bylaws of Registrant, as amended and restated effective
February 24, 1993. (1)
10.1 Lease between SFB (formerly State Bank, Hales Corners)
and Hales Corners Development Corporation (10708 West
Janesville Road, Hales Corners, Wisconsin). (2)
10.2 Lease between SFB (formerly State Bank, Hales Corners)
and Hales Corners Development Corporation (S76 W17655
Janesville Road, Muskego, Wisconsin). (3)
10.3 Lease between SFB (formerly Edgewood Bank) and Edgewood Plaza
Joint Venture (4811 South 76th Street, Greenfield, Wisconsin).
(3)
10.6 Lease between SFB (formerly University National Bank) and
Northeast Corporate Center (7020 North Port Washington Road,
Milwaukee, Wisconsin). (3)
10.7 Deferred Compensation Agreement between Registrant and
Jerome J. Holz dated December 6, 1980. (3)
10.10 Employee Stock Ownership Plan and Employee Stock Ownership Trust
Agreement. (4)
10.13 Lease between SFB (formerly University National Bank) and
Downer Investments (2650 North Downer Avenue, Milwaukee,
Wisconsin) (5)
10.14 Agreement and Plan of Reorganization between Registrant and
Eastbrook State Bank, dated January 22, 1992, as amended and
restated. (6)
10.15 Branch Purchase and Assumption Agreement between Eastbrook
State Bank and North Shore Bank, FSB, dated December 29, 1992.
(1)
10.16 Agreement and Plan of Merger By and Among Registrant, WBAC,
Inc., and Waterford Bancshares, Inc. dated April 12, 1995. (8)
10.17 Lease between SFB-Waterford and Mangold Investments, LLP
(1050 North Milwaukee Avenue, Burlington, Wisconsin)
13 Registrant's Annual Report to security holders for the fiscal
year ended December 31, 1996.
22 Subsidiaries of Registrant.
24 Consent of Ernst & Young LLP.
15
27 Financial Data Schedule
99.1 State Financial Services Corporation 1990 Stock
Option/Stock Appreciation Rights and Restricted Stock Plan
for Key Officers and Employees, as amended on March 10, 1993.
(1)
99.2 State Financial Services Corporation 1990 Director Stock
Option Plan, as amended March 10, 1993. (1)
99.3 State Financial Services Corporation Supplemental Executive
Retirement Plan for Michael J. Falbo effective November 22,
1994. (9)
99.4 Registrant's Proxy Statement relating to its Annual Meeting
of Shareholders to be held on April 23, 1997.
(1) Incorporated by reference from Registrant's annual report on
Form 10-K for the fiscal year ended December 31, 1992.
(2) Incorporated by reference from Registrant's registration
statement on Form S-1, Registration Number 33-31517 (the "Form
S-1") (dated October 11, 1989).
(3) Incorporated by reference from Amendment No. 1 to the Form S-1
(dated December 6, 1989).
(4) Incorporated by reference from Amendment No.2 to the Form S-1
(dated March 6, 1989).
(5) Incorporated by reference from Registrant's annual report on
Form 10-K for the fiscal year ended December 31, 1991.
(6) Incorporated by reference from Exhibit 2.1 to Amendment No. 3
to Registrant's registration statement on Form S-4,
Registration Number 33-46280, dated May 3, 1992.
(7) Incorporated by reference from Registrant's annual report on
Form 10-K for the fiscal year ended December 31, 1993.
(8) Incorporated by reference from Amendment No. 2 to the Form S-4
(dated July 18, 1995).
(9) Incorporated by reference from Registrant's annual report on
Form 10-K for the fiscal year ended December 31, 1994.
The issuer, State Financial Services Corporation, will furnish a copy
of any exhibit described above upon request and upon reimbursement to the
issuer of its reasonable expenses of furnishing such exhibit, which shall be
limited to a photocopying charge of $0.25 per page and, if mailed to the
requesting party, the cost of first-class postage.