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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, 1995
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
Commission file number 0-09424
FIRST M & F CORPORATION
(exact name of Registrant as specified in its charter)
MISSISSIPPI 64-0636653
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification Number)
221 East Washington Street, Kosciusko, Mississippi 39090
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (601) 289-5121
Securities registered pursuant to section 12(g) of the Act: None
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 if
1934 during the preceding 12 months (or for such shorted 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 the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date.
Class Outstanding at February 15, 1996
Common stock ($5.00 par value) 3,390,900 Shares
Based on bid price for shares on February 15, 1996, the aggregate market value
of the voting stock held by nonaffiliates of the Registrant was $55,146,344
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the following documents are incorporated by reference to Part I,
II, and III of the Form 10-K report: (1) Registrant's 1995 Annual Report to
Shareholders (Parts I and II), and (2) Proxy Statement dated March 21, 1996
for Registrant's Annual Meeting of Shareholders to be held April 10, 1996
(Part III).
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FIRST M & F CORPORATION
FORM 10-K
INDEX
PART I
Item 1. Business 3
Item 2. Properties 13
Item 3. Legal Proceedings 13
Item 4. Submission of Matters to a Vote of
Security Holders 13
Part II
Item 5. Market for the Registrant's Common Stock
and Related Stockholder Matters 13
Item 6. Selected Financial Data 13
Item 7. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 13
Item 8. Financial Statements and Supplementary Data 13
Item 9. Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure 13
Part III
Item 10. Directors and Executive Officers of the
Registrant 14-15
Item 11. Executive Compensation 16-17
Item 12. Security Ownership of Certain Beneficial
Owners and Management 18-20
Item 13. Certain Relationships and Related Transactions 21
Part IV
Item 14. Exhibits, Financial Statement Schedules, and
Reports on Form 8-K 22
SIGNATURES 23-24
EXHIBIT INDEX 25
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FIRST M & F CORPORATION
FORM 10-K
PART I
ITEM 1. BUSINESS
GENERAL
First M & F Corporation (Company) is a one-bank holding company
chartered and organized under Mississippi laws in 1979. The company engages
exclusively in the banking business through its wholly-owned subsidiary,
Merchants and Farmers Bank of Kosciusko (The Bank).
The Bank was chartered and organized under the laws of the State of
Mississippi in 1890, and accounts for substantially all of the total assets and
revenues of the Company. The Bank is the ninth largest bank in the state,
having total assets of approximately $504 million at December 31, 1995. The
Bank offers a complete range of commercial and consumer services through its
main office and two branches in Kosciusko and its branches in fourteen other
markets within central Mississippi. These markets include Ackerman, Bruce,
Brandon, Canton, Durant, Lena, Madison, Oxford, Pearl, Philidelphia, Puckett,
Ridgeland, Starkville, Grenada and Weir, Mississippi.
The Bank has three wholly-owned subsidiary operations, M & F Financial
Services, Inc., which operates four finance company operations; First M & F
Insurance Company, Inc., a credit life insurance company; and, Merchants and
Farmers Bank Securities Corporation, a real estate property management company.
The Company's primary means of growth over the past several years has
been an aggressive lending program funded by exceptional deposit growth.
Additionally, the Company acquired the deposits of several locations from the
Resolution Trust Corporation in 1994. Effective with the close of business on
December 31, 1995, the Company also merged with Farmers and Merchants Bank of
Bruce, Mississippi. This merger involved the exchange of 450,000 shares of the
Company's common stock for all of the issued and outstanding shares of Farmers
and Merchant's Bank and has been accounted for as a pooling of interests.
Farmers and Merchants had total assets at December 31, 1995 of $32 million.
The banking system offers a variety of deposit, investment and credit
products to customers. The Bank provides these services to middle market and
professional businesses, ranging from payroll checking, business checking,
corporate savings and secured and unsecured lines of credit. Additional
services include direct deposit payroll, sweep accounts and letters of credit.
The Bank also offers credit card services to its customers, to include check
debit cards and automated teller machine cards through several networks. Trust
services are also offered in the Kosciusko main office.
As of January 31, 1996, the Company and its subsidiary employed 243
full-time equivalent employees.
COMPETITION
The Company competes generally with other banking institutions, savings
associations, credit unions, mortgage banking firms, consumer finance
companies, mutual funds, insurance companies, securities brokerage firms, and
other finance related institutions, many of which have greater resources than
those available to the Company. The competition is primarily related to areas
of interest rates, the availability and quality of services and products, and
the pricing of those services and products.
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SUPERVISION AND REGULATION
The Company is a registered bank holding company under the Bank Holding
Act of 1956, as amended. As such, the Company is required to file an annual
report and such other information as the Board of Governors of the Federal
Reserve System may require. The Bank Holding Company Act generally prohibits
the Company from engaging in activities other than banking or managing or
controlling banks or other permissible subsidiaries or from acquiring or
obtaining direct or indirect control of any company engaged in activities not
closely related to banking. The Board of Governors has by regulation determined
that a number of activities are closely related to banking within the meaning
of the Act. In addition, the Company is subject to regulation by the State of
Mississippi under its laws of incorporation.
The Bank is subject to various requirements of federal and state
banking authorities including the Federal Deposit Insurance Corporation (FDIC)
and the Mississippi Department of Banking. Areas subject to regulation include
loans, reserves, investments, establishment of branches, loans to directors,
executive officers and their related interests, relationships with
correspondent banks, consumer and depositor protection, and others. In
addition, state banks such as the Bank are subject to state approval of the
amount of earnings that may be paid as dividends to shareholders.
In December 1991, the Federal Deposit Insurance Corporation Improvement
Act of 1991 (FDICIA) was inacted. This Act substantially revised the funding
provisions of the Federal Deposit Insurance Act and required regulators to take
prompt corrective action whenever financial institutions failed to meet minimum
capital requirements. Also the Act created restrictions on capital
distributions that would leave a depository institution undercapitalized.
In May 1993, the FDIC adopted the final rule implementing Section 112
of FDICIA. This regulation and new requirements mandated new audit and
reporting procedures, as well as required certain documentation on existing
internal controls. This regulation became effective for fiscal years ending
after December 31, 1992.
EXECUTIVE OFFICERS OF THE REGISTRANT
The executive officers of the Registrant including their positions with
the Registrant, their ages and their principal occupations for the last five
years are as follows:
Hugh S. Potts, Jr., 50, Director, Chairman of the Board and Chief
Executive Officer, First M & F Corporation and Merchants and Farmers
Bank, since 1994. Vice Chairman, First M & F Corporation, prior to 1994.
Scott M. Wiggers, 51, Director, President, First M & F Corporation and
Merchants and Farmers Bank of Kosciusko, since 1990.
STATISTICAL DISCLOSURES
The statistical disclosures for the Company are contained in Tables 1
through 12.
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FIRST M & F CORPORATION
STATISTICAL DISCLOSURES
TABLE 1 - COMPARATIVE AVERAGE BALANCES - YIELDS AND RATES
The table below shows the average balances for all assets and liabilities for
the Company at each year-end for the past three years, the interest income or
expense associated with these assets and liabilities and the computed yield or
rates for each.
DECEMBER 31,
----------------------------------------------------------------------------------------
1995 1994 1993
---- ---- ----
AVERAGE YIELD/ AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST RATE BALANCE INTEREST RATE BALANCE INTEREST RATE
-----------------------------------------------------------------------------------------
Average assets
Federal funds sold $9,846 $596 6.05% $6,813 $279 4.10% $8,917 $262 2.94%
Loans, net 275,422 27,347 9.93% 230,693 20,960 9.09% 193,943 17,660 9.11%
Bank balances 2,790 165 5.91% 2,376 82 3.45% 3,753 116 3.09%
Taxable securities 121,291 7,300 6.02% 122,003 6,983 5.72% 131,897 7,997 6.06%
Tax-exempt securities 40,472 3,221 7.96% 37,191 3,009 8.09% 32,210 2,814 8.74%
-----------------------------------------------------------------------------------------
Total interest earning 449,821 38,629 8.59% 399,076 31,313 7.85% 370,720 28,849 7.78%
Noninterest assets 30,800 30,774 28,271
-----------------------------------------------------------------------------------------
Total average assets $480,621 $38,629 8.04% $ 429,850 $31,313 7.28% $398,991 $28,849 7.23%
=========================================================================================
Liabilities and capital
DDA and savings $144,970 $4,578 3.16% $144,942 $3,772 2.60% $154,038 $4,164 2.70%
Time deposits 191,290 10,186 5.32% 160,288 6,985 4.36% 146,739 6,169 4.20%
Short-term funds 45,850 2,551 5.56% 36,213 1,448 4.00% 22,420 688 3.07%
FHLB advances 3,482 195 5.60% 4,868 259 5.32% 1,810 106 5.86%
-----------------------------------------------------------------------------------------
Total interest bearing 385,592 17,510 4.54% 346,311 12,464 3.60% 325,007 11,127 3.42%
Noninterest bearing
and capital 95,029 83,539 73,984
-----------------------------------------------------------------------------------------
Total average
Liabilities and
capital $480,621 $17,510 3.64% $ 429,850 $12,464 2.90% $398,991 $11,127 2.79%
========================================================================================
Net interest margin $21,119 4.69% $18,849 4.72% $17,722 4.78%
Less tax equiv adj
Investments 1,095 1,023 957
Loans 80 81 70
-----------------------------------------------------------------------------------------
Net interest margin
Per annual report $19,944 $17,745 $16,695
=========================================================================================
Nonaccruing loans have been included in the average loan balances and interest
collected prior to these laons being placed on nonaccrual has been included in
interest income. Yield and rates have been calculated on a fully tax
equivalent basis using a tax rate of 34% for all years. All years have been
restated for the acquisition of Farmers and Merchants Bank of Bruce at December
31, 1995.
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FIRST M & F CORPORATION
STATISTICAL DISCLOSURES (CONTINUED)
TABLE 2 - VOLUME AND YIELD/RATE VARIANCE ANALYSIS
The Volume and Yield/Rate Table shown below reflects the change from year to
year for each component of the tax equivalent net interest margin classified
into those occurring as a result of changes in volume and those resulting from
yield/rate changes.
(Tax Equivalent Basis - $ in thousands)
1995 COMPARED TO 1994 1994 COMPARED TO 1993
INCREASE (DECREASE) DUE TO: INCREASE (DECREASE) DUE TO:
-------------------------------------------------------------
YIELD/ YIELD/
-------------------------------------------------------------
VOLUME RATE NET VOLUME RATE NET
-------------------------------------------------------------
Interest earned on:
Fed funds sold $124 $193 $317 ($62) $79 $17
Loans, net 4,064 2,323 $6,387 3,346 (46) $3,300
Bank balances 15 70 $85 (42) 8 ($34)
Taxable securities (41) 358 $317 (600) (414) ($1,014)
Tax-exempt securities 265 (53) $212 435 (241) $194
------------------------------------------------------------
Total interest-earning assets 4,427 2,891 $7,318 3,077 (614) $2,463
Interest paid on:
Demand deposits and savings 2 806 $808 (246) (146) ($392)
Time deposits 1,351 1,850 $3,201 570 246 $816
Short-term funds 385 718 $1,103 423 336 $759
FHLB advances (74) 10 ($64) 0 153 $153
-------------------------------------------------------------
Total interest-bearing liabilities 1,664 3,384 $5,048 747 589 $1,336
------------------------------------------------------------
Change in net income on a
tax equivalent basis $2,763 ($493) $2,270 $2,330 ($1,203) $1,127
============================================================
Tax-exempt income has been adjusted to a tax equivalent basis using a tax rate
of 34%. The balances of nonaccrual loans and related income recognized have
been included for purposes of these computations.
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FIRST M & F CORPORATION
STATISTICAL DISCLOSURES (CONTINUED)
TABLE 3 - SECURITIES AVAILABLE FOR SALE AND SECURITIES HELD TO MATURITY
The table below indicates amortized cost or carrying value of securities
available for sale and those held to maturity by type at year-end for each of
the last three years ($ in thousands).
December 31,
---------------------------
1995 1994 1993
---- ---- ----
Securities available for sale
- -----------------------------
U.S. Treasury $38,440 $25,991
Government agencies $39,028 $12,455
Obligations of states and political subdivisions 24,331 14,551
Other securities 26,391 21,202
---------------------------
Total securities available for sale $128,190 $74,199
===========================
December 31,
---------------------------
1995 1994 1993
---- ---- ----
Securities held to maturity
- ---------------------------
U.S. Treasury $1,051 $13,010 $42,125
Government agencies $14,152 $12,268 $23,780
Obligations of states and political subdivisions 18,321 27,402 34,898
Other securities 19,290 26,352 50,972
---------------------------
Total securities held to maturity $52,814 $79,032 $151,775
===========================
TABLE 4 - MATURITY DISTRIBUTION AND YIELDS OF SECURITIES AVAILABLE FOR SALE AND
SECURITIES HELD TO MATURITY
The following table details the maturities and weighted average yield for each
range of maturities of securities December 31, 1995
(tax equivalent yield - $ in thousands).
After One After Five
But Within But Within After
One Year Yield Five Years Yield Ten Years Yield Ten Years Yield
--------------------------------------------------------------------------------
Securities available for sale
- -----------------------------
U.S. Treasury $21,573 5.42% $16,867 5.54%
Government agencies 16,544 5.75% 22,484 6.00%
Obligations of states and
political subsdivisions 6,161 7.84% 11,421 7.01% 5,751 8.88% 998 9.12%
Other securities 5,055 6.66% 18,266 6.28% 1,067 9.30% 2,003 6.75%
---------------------------------------------------------------------------------
Total $49,333 5.95% $69,038 6.14% $6,818 8.91% $3,001 7.43%
=================================================================================
Securities held to maturity
- -----------------------------
U.S. Treasury $1,051 6.08%
Government agencies $1,803 7.60% 12,349 6.78%
Obligations of states and
political subdivisions 528 8.53% 8,911 6.73% 6,337 7.59% 2,545 8.46%
Other securities 2,909 5.57% 12,409 5.79% 2,467 6.29% 1,505 6.68%
---------------------------------------------------------------------------------
Total $5,240 6.23% $34,720 6.13% $8,804 7.27% $4,050 7.60%
=================================================================================
At December 31, 1995 the Company did not hold any securities of any issuer with
a carrying value exceeding ten percent of total stockholders' equity.
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FIRST M & F CORPORATION
STATISTICAL DISCLOSURES (CONTINUED)
TABLE 5 - COMPOSITION OF THE LOAN PORTFOLIO
The table below shows the carrying value of the loan portfolio at the end of
each of the last five years ($ in thousands).
December 31,
--------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
Commercial, financial and agricultural $94,906 $89,316 $75,685 $69,069 $63,396
Real estate-construction 27,194 18,749 8,328 5,996 5,472
Real estate-mortgage 85,497 77,568 67,092 56,246 49,337
Consumer loans 84,134 76,174 56,950 45,078 44,106
Lease financing 271 247 492 571 191
--------------------------------------------------
$292,002 $262,054 $208,547 $176,960 $162,502
==================================================
TABLE 6 - LOAN MATURITIES AND SENSITIVITY TO CHANGES IN INTEREST RATES
The table below shows the amounts of loans in several categories at December
31, 1995, along with the scheduled repayments of principal in the periods
indicated ($ in thousands).
Maturing
------------------------------------------
One Year
Within Through After
One Year Five Five
Or Less Years Years Total
------------------------------------------
Commercial and real estate $114,871 $64,792 $20,126 $199,789
Installment loans to individuals 32,312 55,877 4,024 $92,213
------------------------------------------
$147,183 $120,669 $24,150 $292,002
==========================================
The following table shows all loans due after one year according to their
sensitivity to changes in interest rates ($ in thousands)
Maturing
-------------------------------
One Year
Through After
Five Five
Years Years Total
-------------------------------
Above loans due after one year which have:
Predetermined interest rates $120,517 $24,150 $144,667
Floating interest rates 152 0 152
--------------------------------
Total $120,669 $24,150 $144,819
================================
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FIRST M & F CORPORATION
STATISTICAL DISCLOSURES (CONTINUED)
TABLE 7 - NONPERFORMING ASSETS AND PAST DUE LOANS
The table below shows the Company's nonperforming assets and past due loans at
the end of each of the last five years ($ In thousands)
December 31,
----------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
Loans accounted for on a nonaccrual basis $84 $253 $519 $730 $809
Restructured loans 0 0 0 0 0
----------------------------------------------
Total nonperforming loans 84 253 519 730 809
Other real estate owned 148 869 1,061 1,076 3,006
---------------------------------------------
Total nonperforming assets 232 1,122 1,580 1,806 3,815
Accruing loans past due 90 days or more 707 394 788 482 459
----------------------------------------------
Total nonperforming assets and loans $939 $1,516 $2,368 $2,288 $4,274
==============================================
Interest which would have been accrued on nonaccrual loans had they been in
compliance with their original terms and conditions is immaterial.
At December 31, 1995, the Company did not have any concentration of loans
greater than ten percent of total loans except those shown in Table 5.
It is the Company's policy that interest not be accrued on any loan for which
payment in full of interest and principal is not expected, on any loan which is
seriously delinquent unless the obligation is both well secured and in the
process of collection, or on any loan that is maintained on a cash basis. At
December 31, 1995, the Company has no loans about which Management has serious
doubts as to their collectibility other than those disclosed above.
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FIRST M & F CORPORATION
STATISTICAL DISCLOSURES (CONTINUED)
TABLE 8 - ANALYSIS OF THE ALLOWANCE FOR LOAN LOSSES
The table below summarizes the Company's loan loss experience for each of the
last five years ($ in thousands).
Year Ended December 31,
-----------------------------------------------------
1994 1994 1993 1992 1991
---- ---- ---- ---- ----
Amount of loan loss reserve at beginning of period $3,374 $2,866 $2,451 $2,131 $2,120
Loans charged off
Commercial, financial and agricultural (117) (22) (95) (205) (98)
Real estate (53) (124) (391) (572) (776)
Consumer (707) (478) (458) (421) (730)
-----------------------------------------------------
Total (877) (624) (944) (1,198) (1,604)
Recoveries
Commercial, financial and agricultural 14 12 31 38 112
Real estate 106 40 44 33 46
Consumer 124 198 214 173 138
-----------------------------------------------------
Total 244 250 289 244 296
Net charge offs (633) (374) (655) (954) (1,308)
Provision for loan losses charged to expense 1,509 882 1,070 1,274 1,319
-----------------------------------------------------
Amount of loan loss reserve at end of period $4,250 $3,374 $2,866 $2,451 $2,131
=====================================================
The allowance for loan losses is established through a provision charged to
expense. Loans are charged against the allowance when Management believes that
the collection of the principal is unlikely.
The allowance for loan losses is maintained at a level which Management and the
Board of Directors believe to be adequate to absorb estimated losses inherent
in the loan portfolio, and is reviewed quarterly using specific criteria
required by regulatory authority as well as various analytical devices which
incorporates historical loss experience, trends, and current economic
conditions.
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FIRST M & F CORPORATION
STATISTICAL DISCLOSURES (CONTINUED)
TABLE 9 - ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES
The table below is a summary of the allocation categories used by the Company
for its allowance for loan loss at December 31,1995. These allocations are
determined by internal formulas based upon an analysis of the various types of
risk associated portfolio ($ in thousands).
Allocation for pools of
risk-rated loans $2,900
Additional allocation for
risk-rated loans 214
General allocation for all
other loans 150
Discretionary 986
-------
$4,250
=======
The Company maintains the allowance at a level considered by Management and the
Board of Directors to be sufficient to absorb potential losses. Loss
percentages were uniformly applied to the various pools of risk that exist
within the loan portfolio based upon accepted analysis procedures and current
economic conditions. Additional allocations were made for particular areas based
upon recommendations of lending and asset review personnel.
The remaining $986,000 is discretionary and serves as added protection in the
event that any of the above specific components are determined to be
inadequate. Due to the imprecision in most estimates, Management continues to
take a prudent, yet conservative approach to the evaluation of the adequacy of
the allowance.
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FIRST M & F CORPORATION
STATISTICAL DISCLOSURES (CONTINUED)
TABLE 10 - TIME DEPOSITS OF $100,000 OR MORE
The table below shows maturities of outstanding time deposits of $100,000 or
more at December 31, 1995. ($ in thousands)
Certificates
of deposits
------------
Three months or less $15,869
Over three months through six months 6,422
Over six months through twelve months 8,502
Over twelve months 11,578
------------
Total $42,371
============
TABLE 11 - SELECTED RATIOS
The following table reflects ratios for the Company for the last three years.
1995 1994 1993
---- ---- ----
Return on average assets 1.32% 1.15% 1.12%
Return on average equity 15.79% 14.43% 13.80%
Dividend payout ratio 32.36% 31.47% 34.86%
Equity to assets ratio 8.35% 7.94% 8.11%
TABLE 12 - SHORT-TERM BORROWING
The table below presents certain information regarding the Company's short-term
borrowing for each of the last three years ($ in thousands).
1995 1994 1993
---- ---- ----
Outstanding at end of period $48,294 $44,822 $37,804
Maximum outstanding at any month-end
during the period 58,482 48,082 47,183
Average outstanding during the period 46,785 36,213 22,420
Interest paid $2,746 $1,448 $688
Weighted average rate during each period 4.96% 4.00% 3.07%
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ITEM 2. PROPERTIES
The Bank's main office, located at 221 East Jefferson Street,
Kosciusko, Mississippi, is a two story, brick building with drive-up
facilities. The Bank owns its main office building and nineteen of its branch
facilities. The remaining facilities are occupied under lease agreements,
terms of which range from month to month to five years. It is anticipated that
all leases will be renewed.
ITEM 3. LEGAL PROCEEDING
The Bank is involved in various legal matters and claims which are
being defended and handled in the ordinary course of business. None of these
matters are expected, in the opinion of Management, to have a material adverse
effect on the financial position or results of operations of the Bank or the
Company.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to the Company's shareholders during
the fourth quarter of 1995.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
At February 15, 1996, there were 496 shareholders of record of the
Company's common stock. The stock is traded on a limited basis and no firm is
presently acting as a market maker. Other information for this item can be
found in Note 16, "Dividends" and the table captioned "Principal Markets and
Prices of the Company's Stock" included in the Registrant's 1995 Annual Report
to Shareholders and is incorporated herein by reference. (pages 26 and 30)
ITEM 6. SELECTED FINANCIAL DATA
The information required by this item can be found in the table
captioned "Selected Financial Data" in the Registrant's 1995 Annual Report to
Shareholders and is incorporated herein by reference. (page 29)
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The information required by this item can be found in "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included in the Registrant's 1995 Annual Report to Shareholders and is
incorporated herein by reference. (pages 31-32)
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of the Registrant and the
accompanying notes to the financial statements along with the report of the
independent public accountants are contained in the Registrant's 1995 Annual
Report to Shareholders and are incorporated herein by reference. (pages 9-28)
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There has been no change in accountants within the two year period
ended December 31, 1995.
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PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table provides certain information concerning directors
and executive officers of the Company as of January 1, 1996.
Position Held in Company Term as
Principal Occupation Director
Name and age During Last Five Years Expires
- ------------ ------------------------ --------
Fred A. Bell, Jr., 54 Director since 1981; Manager, 1997
Mississippi Materials Corp.
Charles T. England, 59 Director since 1980; Manager 1997
Finance company subsidiaries of
bank
Toxey Hall, III, 56 Director since 1984; President 1997
Thomas-Walker-Lacy, Inc.
Barbara K. Hammond, Director since 1995; Specialist, 1998
Circuit Capacity Management,
Bell South
Joe Ivey, 37 Director since 1994; Chairman 1997
and CEO; Ivey Mechanical Corporation
*J. Marlin Ivey, 59 Director since 1979; President, 1997
Ivey National Corp.
R. Dale McBride, 56 Director since 1979; President, 1996
Durant Branch, Merchants and
Farmers Bank
*Susan P. McCaffery, 56 Director since 1987; Professor, 1997
Wood Junior College
Dr. William M. Myers, 67 Director since 1979; Dentist 1998
Otho E. Pettit, Jr., 50 Director since 1993; Attorney 1996
*Hugh S. Potts, Jr., 50 Director since 1979; Chairman 1996
and CEO since 1994; Vice-President
1979-1983; Vice-Chairman through 1993
14
15
Position Held in Company Term as
Principal Occupation Director
Name and age During Last Five Years Expires
- ------------ ------------------------ --------
*Charles W. Ritter, Jr., 62 Director since 1979; President; 1996
The Attala Company
W. C. Shoemaker, 63 Director since 1979; Consultant 1998
IMC Webb Graphics
*Scott M. Wiggers, 51 Director since 1983; President since 1988 1998
Treasurer since 1979;
President & Treasurer, First M&F Corp
President, Merchants & Farmers Bank
*Edward G. Woodard, 40 Director since 1989; 1997
President, K&M Distributing, Inc.
*Member of the Executive and Administrative
Committee of the Bank
Hugh S. Potts, Jr. and Susan P. McCaffery are brother and sister. J. Marlin
Ivey is the father of Joe Ivey.
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ITEM 11. EXECUTIVE COMPENSATION
The following table shows the cash compensation for 1995, 1994 and 1993 for
the chief executive officer of the Company and all executive officers of the
Company and the Bank, whose cash compensation exceeded $100,000.
ANNUAL COMPENSATION
Name and
Principal Position Year Salary Bonus Other
Hugh S. Potts, Jr. 1995 $150,320 $21,300 $2,441 (1)
Chairman of the Board 1994 148,285 15,000 1,358 (1)
and CEO since 04/15/94: 1993 141,173 9,750 1,330 (1)
Vice Chairman until 04/15/94
Scott M. Wiggers 1995 110,260 15,620 1,613 (1)
President 1994 108,370 10,000 1,453 (1)
1993 101,686 12,000 636 (1)
Hugh S. Potts, Sr. 1995 74,658 10,585 2,482 (1)
Chairman of the Board 8,400 (2)
and CEO through 04/14/94: 4,230 (3)
Consultant to the Bank 1994 108,100 3,270 2,481 (1)
since 04/14/94 6,198 (2)
1993 148,171 11,000 2,482 (1)
(1) Cost of excess life insurance
(2) Automobile allowance
(3) Ermeritus director compensation
Hugh S. Potts, Sr. retired as Chairman of the Board and Chief Executive Officer
of the Company effective April 15, 1994. Mr. Potts' son, Hugh S. Potts, Jr.,
currently serves as the Company's Chief Executive Officer and Chairman of the
Company's Board of Directors.
Included in the salary disclosure for Hugh S. Potts, Sr., for the 1995 & 1994
is $75,000 which is paid in the capacity as a consultant to the Bank. There is
no written agreement covering the terms of this consulting and there is no
current plan to reduce the agreement to writing. Hugh S. Potts, Sr. served as
Chairman of the Board of Directors and Chief Executive Officer of the Bank for
approximately 24 years, during which time he developed numerous business
relationships on behalf of the Bank and gained knowledge in the day-to-day
management and operations of the Bank. Pursuant to the term of the Mr. Potts'
consulting agreement with the Bank, he is regularly (almost daily) at the Bank
where he advises management on a variety of topics, including business
development. With his years of experience in bank management, Mr. Potts acts as
an adviser on how to solve the various problems and issues that arise in the
Bank's operations, including customer relations, personnel matters, strategic
planning, and regulatory concerns. The Bank anticipates that this consulting
agreement with Mr. Potts will continue as long as Mr. Potts is Physically able
to be present at the Bank and contribute his experience and knowledge.
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Pension Plan
The following table indicates the estimated annual benefits payable to persons
in specified classification upon retirement at age 65.
Average Annual Credited Years of Service
Compensation 15 20 25 30 35
$25,000 $3,000 $4,000 $5,000 $6,000 $7,000
50,000 6,000 8,000 10,000 12,000 14,000
75,000 9,000 12,000 15,000 18,000 21,000
100,000 12,000 16,000 20,000 24,000 28,000
160,000 19,200 25,600 32,000 38,400 44,800
Credited years of service for the individuals named in the Summary Compensation
Table above are anticipated to be as follows: Hugh S. Potts, Sr. - 58 years;
Hugh S. Potts, Jr. - 37 years; Scott M. Wiggers - 34 years.
A participant in the Company's Pension Plan whose service is terminated on or
after the date on which he attains his normal retirement age and on or before
his normal retirement date is eligible to retire and receive a normal
retirement benefit. The amount of the normal benefit under the Plan is equal
to 1/12 of the sum of the amounts described below in (1) and (2) multiplied by
(3) where:
(1) = eight-tenths of one percent (0.8%) of the participant's average
earnings;
(2) = twenty-five hundredths percent (0.25%) of the participant's average
earnings in excess of Twenty-Four Thousand and no/100 dollars
($24,000.00); and
(3) = the participant's benefit service as of his normal retirement date.
If a participant's annual benefit commences before the participant's social
security retirement age, but on or after age 62, the amount of the benefit is
reduced. If the annual benefit of a participant commences prior to age 62,
the amount of the benefit shall be the actuarial equivalent of an annual
benefit beginning at age 62 reduced for each month by which benefits commence
before the month in which the participant attains age 62. If the annual
benefit of a participant commences after the participant's social security
retirement age, the benefit amount is adjusted so that it is the actuarial
equivalent of an annual benefit beginning at the participant's social security
retirement age.
Director Compensation
Directors receive compensation in the amount of $700 per Board meeting attended
payable at the end of the year, plus an additional $20 for each committee
meeting attended.
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ITEM 12. EQUITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
Management of the Company knows of no person who owns of record or
beneficially, directly or indirectly, more than 5% of the outstanding common
stock of the Company except as set forth below:
Name and Address Amount and Nature of Beneficial Percent of
of Beneficial Owner Ownership of Common Stock Class
Hugh S. Potts, Jr. 339,651 shares (1) 10.02%
1104 Walnut Grove Road
Kosciusko, MS 39090
(1) Mr. Potts shares voting and investment power with respect to 41,500 of
these shares, which are held in two trusts.
The following table shows the number and percentage of shares of the Company's
common stock beneficially owned by each director and by all directors and
executive officers as a group, as of December 31, 1995. Except as otherwise
indicated, each director has sole voting and investment power with respect to
the shares shown on the table.
Name and Address Amount and Nature of Beneficial Percent of
of Beneficial Owner Ownership of Common Stock Class
- ------------------- ------------------------- -----
Fred A. Bell, Jr. 15,000 shares 0.44%
603 Hickory Hill Drive
P. O. Box 694
Kosciusko, MS 39090
Charles T. England 15,000 shares 0.44%
608 Smythe Street
P. O. Box 414
Kosciusko, MS 39090
Toxey Hall, III 2,112 shares 0.06%
1498 Sunset Drive
Canton, MS 39046
Barbara K. Hammond 2,000 shares 0.06%
1468 Roxbury Court
Jackson, Ms 39211
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Name and Address Amount and Nature of Beneficial Percent of
of Beneficial Owner Ownership of Common Stock Class
- ------------------- ------------------------- -----
J. Marlin Ivey (4) 112,000 shares 3.30%
309 East Jefferson St.
P. O. Box 610
Kosciusko, MS 39090
Joseph M. Ivey (4) 8,662 shares 0.26%
211 South Madison Street
P. O. Box 610
Kosciusko, MS 39090
R. Dale McBride 17,364 shares (6) 0.51%
Route 1, Box 179
Durant, MS 39063
Susan P. McCaffery (7) 113,822 shares (8) 3.36%
327 East Jefferson St.
Kosciusko, MS 39090
William M. Myers, DDS 21,520 shares (9) 0.63%
308 East Jefferson St.
Kosciusko, MS 39090
Otho E. Pettit, Jr. 10,754 shares (10) 0.32%
212 Oakland
Kosciusko, MS 39090
Hugh S. Potts, Jr. (7) 339,651 shares (11) 10.02%
1104 Walnut Grove Road
Kosciusko, MS 39090
Charles W. Ritter, Jr. 152,000 shares (12) 4.48%
Woodbrier Subdivision
P. O. Box 528
Kosciusko, MS 39090
W. C. Shoemaker 40,266 shares 1.19%
P. O. Box 550
Kosciusko, MS 39090
Scott M. Wiggers 11,908 shares (13) 0.35%
1204 Shady Oak Drive
Kosciusko, MS 39090
Edward G. Woodard 8,306 shares (2) 0.24%
P. O. Box 488
Kosciusko, MS 39090
Executive Officers of the Bank 5,298 shares 0.16%
Named Executive Officers 875,663 shares 25.82%
(including Executive Officers of the Bank
and Directors as a Group)
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(1) Mr. England shares voting and investment power with respect to these
shares with his wife.
(2) Mr. Woodard shares voting and investment power with respect to 880 of
these shares with his wife.
(3) Left blank intentionally.
(4) Director J. Marlin Ivey is the father of director Joseph M. Ivey.
(5) Of these shares, 92,000 are registered in the name of Ivey National
Corp., of which Mr. Ivey is the President.
(6) Mr. McBride shares voting and investment power with respect to 12,780 of
these shares with his wife and children.
(7) Mrs. McCaffery and Hugh S. Potts, Jr. are brother and sister. Their
father is the Company's former Chief Executive Officer and Chairman of
the Board Hugh S. Potts, Sr.
(8) Mrs. McCaffery shares voting and investment power with respect to 19,785
of these shares with her husband and children.
(9) Dr. Myers shares voting and investment power with respect to 13,200 of
these shares with his children.
(10) Mr. Pettit shares voting and investment powers with respect to 3,726 of
these shares.
(11) Mr. Potts shares voting and investment power with respect to 41,500 of
these shares, which are held in two trusts.
(12) Mr. Ritter shares investment power with respect to 60,000 of these shares
with his wife and two children.
(13) Mr. Wiggers shares voting and investment power with respect to 1,134 of
these shares with his wife.
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As discussed in Note 4 of the consolidated financial statements, through the
Bank, the Company makes loans to its directors and executive officers and their
associates. All such loans were made in the ordinary course of business, were
made on substantially the same terms, including interest rates and collateral,
as those prevailing at the time for comparable transactions with other persons,
and did not involve more than the normal risk of collectibility or present
other unfavorable features.
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ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K
A-1. Financial Statements
The report of Shearer, Taylor & Co., independent auditors, and the
following consolidated financial statements of First M & F Corporation and
Subsidiary are included in the Registrant's 1995 Annual Report to
Shareholders and are incorporated into Part II, Item 8, herein by reference.
Report of Independent Certified Public Accountants
Consolidated Statements of Condition as of December 31, 1995 and 1994
Consolidated Statements of Income for the Years ended December 31,
1995, 1994, and 1993
Consolidated Statements of Stockholders' Equity for the Years ended
December 31, 1995, 1994 and 1993
Consolidated Statements of Cash Flows for the Years ended December
31, 1995, 1994 and 1993
Notes to the Consolidated Financial Statements
Selected Financial Data and Principal Markets and Prices of the
Company's Stock
A-2. Financial Statement Schedules
The schedules to the consolidated financial statements set forth by
Article 9 of Regulation S-X are not required under the related instructions or
are inapplicable and therefore have been omitted.
A-3. Exhibits
The exhibits listed in the Exhibit Index are filed herewith or are
incorporated herein by reference.
B. Reports on Form 8-K
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.
FIRST M & F CORPORATION
BY: /S/ HUGH S. POTTS, JR. BY: /S/ SCOTT M. WIGGERS
-------------------------------- ----------------------------------
HUGH S. POTTS, JR SCOTT M. WIGGERS
CHAIRMAN OF THE BOARD AND PRESIDENT
CHIEF EXECUTIVE OFFICER
DATE: MARCH 21, 1996 DATE: MARCH 21, 1996
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed by the following persons on behalf of the Registrant and
in the capacities and on the dates indicated:
DATE: March 21, 1996 BY: /S/
----------------------------------------------
HUGH S. POTTS, JR., DIRECTOR
DATE: March 21, 1996 BY: /S/
----------------------------------------------
SCOTT M. WIGGERS, DIRECTOR
DATE: March 21, 1996 BY /S/
----------------------------------------------
FRED A. BELL, JR., DIRECTOR
DATE: March 21, 1996 BY: /S/
----------------------------------------------
CHARLES T. ENGLAND, DIRECTOR
DATE: March 21, 1996 BY: /S/
----------------------------------------------
TOXEY HALL III, DIRECTOR
DATE: March 21, 1996 BY: /S/
----------------------------------------------
BARBARA K. HAMMOND, DIRECTOR
DATE: March 21, 1996 BY: /S/
----------------------------------------------
J. MARLIN IVEY, DIRECTOR
DATE: March 21, 1996 BY: /S/
----------------------------------------------
JOE IVEY, DIRECTOR
DATE: March 21, 1996 BY: /S/
----------------------------------------------
R. DALE McBRIDE, DIRECTOR
DATE: March 21, 1996 BY: /S/
----------------------------------------------
SUSAN P. McCAFFERY, DIRECTOR
DATE: March 21, 1996 BY: /S/
----------------------------------------------
WILLIAM M. MYERS, DIRECTOR
DATE: March 21, 1996 BY: /S/
----------------------------------------------
OTHO E. PETIT, JR., DIRECTOR
DATE: March 21, 1996 BY: /S/
----------------------------------------------
CHARLES W. RITTER, JR., DIRECTOR
DATE: March 21, 1996 BY: /S/
----------------------------------------------
W.C. SHOEMAKER, DIRECTOR
DATE: March 21, 1996 BY: /S/
----------------------------------------------
EDWARD G. WOODARD, DIRECTOR
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EXHIBIT INDEX
3(A) Articles of Incorporation, as amended. Filed as Exhibit 3
to the Company's Form S-1(File no. 33-08751) September 15,
1986, incorporated herein by reference.
3(B) Bylaws, as amended. Filed as Exhibit 3-b to the Company's
Form S-1(File no. 33-08751) September 15, 1986, incorporated
herein by reference.
13 Only those portions of the Registrant's Annual Report to
Shareholders expressly incorporated by reference herein are
included in this exhibit and, therefore, are filed as a part
of this report of Form 10-K.
27 Financial Data Schedule.
All other exhibits are omitted as they are inapplicable or are
not required by the related instructions.
25