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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1993
COMMISSION FILE NUMBER 0-6159
FIRST ALABAMA BANCSHARES, INC.
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(Exact name of registrant as specified in its charter)
Delaware 63-0589368
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
417 North 20th Street, Birmingham, Alabama 35202-0247
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (205) 832-8450
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
COMMON STOCK - PAR VALUE $.625
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Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
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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/.
State the aggregate market value of the voting stock held by non-affiliates
of the registrant as of March 9, 1994.
Common Stock, $.625 Par Value--$1,245,152,851*
*Excludes as shares held by affiliates only shares held by the registrant's
Employee Stock Purchase Plan, Employees' Stock Ownership Plan, Directors' Stock
Investment Plan and executive officers who are directors without prejudice to a
determination of control.
Indicate the number of shares outstanding of each of the registrant's classes
of common stock as of March 9, 1994.
Common Stock, $.625 Par Value--42,538,040 shares issued and 41,063,461 shares
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the annual proxy statement dated March 16, 1994 are incorporated
by reference into Part III.
Portions of the annual report to stockholders for the year ended December 31,
1993, are incorporated by reference into Parts I and II.
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PART I
ITEM 1. Business
(a) The Registrant, First Alabama Bancshares, Inc. (hereinafter
called Registrant or First Alabama), is a bank holding company, incorporated
under the laws of the state of Delaware and with its principal office located
in Birmingham, Alabama. The Registrant became operational as a bank holding
company when the exchange offer for the stock of its original banks in
Montgomery, Birmingham and Huntsville became effective on July 13, 1971.
Subsequently, the Registrant acquired 29 additional banks located in Alabama.
From 1985 through 1988, Registrant merged these affiliate banks into First
Alabama Bank, the Registrant's lead bank. In 1990, Registrant purchased
certain assets and assumed the deposit liabilities of Baldwin County Federal
Savings Bank and City Federal Savings and Loan Association in transactions with
the Resolution Trust Corporation. These acquisitions added approximately $599
million in deposits at the acquisition dates. In 1992, Registrant acquired
certain assets and assumed the deposit liabilities of seven offices formerly of
Jefferson Federal Savings and Loan Association in a transaction with the
Resolution Trust Corporation. This acquisition added approximately $49 million
in deposits to First Alabama Bank. First Alabama Bank operates from 166 full-
service offices located throughout Alabama.
In 1987 Registrant made its first interstate bank acquisition by
acquiring Santa Rosa State Bank in Milton and Pensacola, Florida.
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Registrant expanded its northwest Florida operation in early 1988 through the
acquisition of Sunshine Bank of Fort Walton Beach. In November 1988,
Registrant's two Florida banks were merged into one bank and renamed Sunshine
Bank. In 1991, Registrant purchased five offices with deposits of $146 million
in Pensacola, Florida from Great Western Bank and merged these offices into
Sunshine Bank. In the fourth quarter of 1993, Registrant acquired First
Federal Savings Bank of DeFuniak Springs, Florida and First Federal Savings
Bank of Marianna, Florida. These thrifts, with eight offices and $190 million
in assets were merged into First Alabama's Florida bank, newly renamed Regions
Bank of Florida. Regions Bank of Florida operates from 23 full-service offices
in northwest Florida.
Registrant's Georgia bank, First Alabama Bank of Columbus, began
operations in July 1991, with the purchase from the Resolution Trust
Corporation of three banking offices, formerly of Fulton Federal Savings and
Loan Association, with deposits of $107 million. On March 14, 1994, this bank
was renamed Regions Bank of Georgia.
In December 1992, Registrant entered the Tennessee banking market for
the first time through the acquisition of Security Federal Savings and Loan
Association (Security Federal), a mutual association headquartered in
Nashville, Tennessee. Security Federal, with assets of $383 million,
subsequently converted to a Tennessee chartered state bank, First Security Bank
of Tennessee. In June 1993, Registrant acquired Franklin County Bank, of
Winchester, Tennessee adding four offices and $68 million in assets.
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These banks serve the middle Tennessee market from 24 full-service offices.
In December 1993, First Alabama purchased Secor Bank, Federal Savings
Bank, headquartered in Birmingham, Alabama, adding $1.8 billion in assets. With
the exception of one office in Centre, Alabama, which is expected to be sold,
Secor's 23 Alabama offices were merged into First Alabama Bank in January 1994
resulting in the addition of four Alabama offices after the consolidation of
18. Secor's three Florida offices, with deposits of approximately $183
million, are expected to be sold in 1994. Secor's 15 Louisiana offices, which
have $789 million in deposits, provide First Alabama with a retail banking
franchise in New Orleans and northern Louisiana.
In 1993, Registrant announced plans to change its name to Regions
Financial Corporation in 1994, subject to approval from stockholders. Some
subsidiaries of the Registrant have already been renamed to reflect the
Registrant's proposed name change.
All of Registrant's banking offices are engaged in the commercial
banking business with certain offices providing trust services. Information on
Registrant's bank and thrift subsidiaries as of December 31, 1993, is provided
as follows:
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Total Loans
Total (Net of Un- Total
Deposits earned Income) Assets
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(in thousands)
First Alabama Bank $6,470,696 $5,426,701 $7,587,231
Regions Bank of Florida 445,040 316,994 492,541
Regions Bank of Georgia 97,770 25,170 107,215
First Security
Bank of Tennessee 336,867 315,983 386,661
Franklin County Bank 61,152 38,277 69,127
Secor Bank, FSB 1,400,083 1,012,992 1,831,937
Registrant, as of December 31, 1993, had three (3) operating
bank-related subsidiaries. FAB Agency, Inc. acts as an insurance agent or
broker with respect to credit life and accident and health insurance and other
types of insurance which are related to extensions of credit by affiliate banks
or bank-related subsidiaries. First Alabama Life Insurance Company, renamed
Regions Life Insurance Company in January 1994, acts as a reinsurer of credit
life and accident and health insurance connected with the activities of certain
affiliates of Registrant. Regions Financial Building Corporation holds and
operates properties for use by the Registrant and its affiliates.
Regions Corporation, organized in 1993 as a subsidiary of the
registrant, acts as a second tier holding company for Secor Bank, FSB, and its
five subsidiaries - First Insurance Corporation, Secor Realty and Investment
Corporation, Secor Insurance Agency, Inc. Alabama, Secor
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Insurance Agency, Inc. Louisiana and Secor Credit Corporation. All of Secor's
subsidiaries are scheduled to be dissolved or disposed of within the next two
years.
Registrant's lead bank, First Alabama Bank, had three (3) operating
wholly-owned subsidiaries as of December 31, 1993. Real Estate Financing,
Inc., headquartered in Montgomery, Alabama, is engaged in mortgage banking with
its primary business and source of income being the origination and servicing
of mortgage loans for long-term investors. Real Estate Financing, Inc., at
December 31, 1993, serviced approximately $8.5 billion in real estate mortgages
and operates loan production offices in Alabama, Florida, Georgia, Mississippi,
Tennessee and South Carolina. Regions Title Company, a subsidiary of Real
Estate Financing, Inc., was acquired in connection with the acquisition of
Security Federal and acts as an agent with respect to issuance of title
insurance policies related to the extension of credit by an affiliate bank or
bank-related subsidiary. First Alabama Investments, Inc., which began
operation in 1986, engages in securities underwriting and brokerage activities.
Regions Agency, Inc., which was organized in 1985 and which is currently
inactive, is authorized to act as an insurance agent for sales of various types
of insurance policies. Regions Financial Leasing, Inc., which began operations
in January 1992, holds and services certain lease contracts.
Reference is made to pages 24 through 47 and 70 through 73 of the annual
report to stockholders for the year ended December 31, 1993,
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submitted as Exhibit 13 hereto, for certain statistical (Guide 3) and other
information.
(b) The primary business conducted by Registrant's banking
affiliates is banking, which includes provision of commercial and retail
banking services and, in some cases, trust services. Registrant's bank-related
subsidiaries perform services incidental to the field of banking.
Consequently, Registrant's only industry segment is the business of banking and
the information required for industry segments is not applicable.
Reference is made to pages 24 through 47 of the annual report to
stockholders for the year ended December 31, 1993, included as Exhibit 13
hereto, for information required by this item.
(c)(1) General. The Registrant is a bank holding company, registered
with the Board of Governors of the Federal Reserve System ("Federal Reserve")
under the Bank Holding Company Act of 1956, as amended ("BHC Act"). As such,
the Registrant and its subsidiaries are subject to the supervision,
examination, and reporting requirements of the BHC Act and the regulations of
the Federal Reserve.
The BHC Act requires every bank holding company to obtain the prior
approval of the Federal Reserve before (i) it may acquire direct or indirect
ownership or control of any voting shares of any bank if, after such
acquisition, the bank holding company will directly or indirectly own or
control more than 5% of the voting shares of the bank, (ii) it or any of its
subsidiaries, other than a bank, may acquire all or substantially all
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of the assets of the bank, or (iii) it may merge or consolidate with any other
bank holding company.
The BHC Act further provides that the Federal Reserve may not approve any
transaction that would result in a monopoly or would be in furtherance of any
combination or conspiracy to monopolize or attempt to monopolize the business
of banking in any section of the United States, or the effect of which may be
substantially to lessen competition or to tend to create a monopoly in any
section of the country, or that in any other manner would be in restraint of
trade, unless the anticompetitive effects of the proposed transaction are
clearly outweighed by the public interest in meeting the convenience and needs
of the community to be served. The Federal Reserve is also required to
consider the financial and managerial resources and future prospects of the
bank holding companies and banks concerned and the convenience and needs of the
community to be served. Consideration of financial resources generally focuses
on capital adequacy and consideration of convenience and needs issues includes
the parties' performance under the Community Reinvestment Act of 1977 (the
"CRA"), both of which are discussed below.
The BHC Act prohibits the Federal Reserve from approving a bank holding
company's application to acquire a bank or bank holding company located outside
the state in which the deposits of its banking subsidiaries were greatest on
the date the company became a bank holding company (Alabama in the case of the
Registrant), unless such acquisition is specifically
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authorized by statute of the state in which the bank or bank holding company to
be acquired is located. Alabama has adopted reciprocal interstate banking
legislation permitting Alabama-based bank holding companies to acquire banks
and bank holding companies in other states and allowing bank holding companies
located in Arkansas, the District of Columbia, Florida, Georgia, Kentucky,
Louisiana, Maryland, Mississippi, North Carolina, South Carolina, Tennessee,
Texas, Virginia, and West Virginia to acquire Alabama banks and bank holding
companies.
The BHC Act generally prohibits the Registrant from engaging in activities
other than banking or managing or controlling banks or other permissible
subsidiaries and from acquiring or retaining direct or indirect control of any
company engaged in any activities other than those activities determined by the
Federal Reserve to be so closely related to banking or managing or controlling
banks as to be a proper incident thereto. In determining whether a particular
activity is permissible, the Federal Reserve must consider whether the
performance of such an activity reasonably can be expected to produce benefits
to the public, such as greater convenience, increased competition, or gains in
efficiency, that outweigh possible adverse effects, such as undue concentration
of resources, decreased or unfair competition, conflicts of interest, or
unsound banking practices. For example, factoring accounts receivable,
acquiring or servicing loans, leasing personal property, conducting discount
securities brokerage activities, performing certain data
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processing services, acting as agent or broker in selling credit life insurance
and certain other types of insurance in connection with credit transactions,
and performing certain insurance underwriting activities all have been
determined by the Federal Reserve to be permissible activities of bank holding
companies. The BHC Act does not place territorial limitations on permissible
bank-related activities of bank holding companies. Despite prior approval,
the Federal Reserve has the power to order a holding company or its
subsidiaries to terminate any activity or to terminate its ownership or control
of any subsidiary when it has reasonable cause to believe that continuation of
such activity or such ownership or control constitutes a serious risk to the
financial safety, soundness, or stability of any bank subsidiary of that bank
holding company.
Each of the subsidiary banks and the one subsidiary savings bank
(collectively the "subsidiary institutions") of the Registrant is a member of
the Federal Deposit Insurance Corporation ("FDIC"), and as such, their deposits
are insured by the FDIC to the extent provided by law. Each subsidiary
institution is also subject to numerous state and federal statutes and
regulations that affect its business, activities, and operations, and each is
supervised and examined by one or more state or federal bank regulatory
agencies.
Because each of the Registrant's subsidiary banks is a state-chartered
bank that is not a member of the Federal Reserve System, such banks are subject
to supervision and examination by the FDIC. The Registrant's
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subsidiary savings bank is a federally-chartered savings bank that is a member
of the Federal Home Loan Bank System and is subject to supervision and
examination by the Office of Thrift Supervision ("OTS") and to the back-up
supervisory authority of the FDIC. Such agencies regularly examine the
operations of the subsidiary institutions and are given authority to approve or
disapprove mergers, consolidations, the establishment of branches, and similar
corporate actions. Such agencies also have the power to prevent the
continuance or development of unsafe or unsound banking practices or other
violations of law.
The subsidiary institutions are subject to the provisions of the CRA.
Under the terms of the CRA, the appropriate federal bank regulatory agency is
required, in connection with its examination of a subsidiary institution, to
assess such institution's record in meeting the credit needs of the community
served by that institution, including low and moderate-income neighborhoods.
The regulatory agency's assessment of the institution's record is made
available to the public. Further, such assessment is required of any
institution which has applied to (i) charter a national bank, (ii) obtain
deposit insurance coverage for a newly chartered institution, (iii) establish a
new branch office that will accept deposits, (iv) relocate an office, or (v)
merge or consolidate with, or acquire the assets or assume the liabilities of,
a federally regulated financial institution. In the case of a bank holding
company applying for approval to acquire a bank or other bank holding company,
the Federal
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Reserve will assess the records of each subsidiary institution of the applicant
bank holding company, and such records may be the basis for denying the
application.
In December 1993, the federal banking agencies proposed to revise their
CRA regulations in order to provide clearer guidance to depository institutions
on the nature and extent of their CRA obligations and the methods by which
those obligations will be assessed and enforced. The proposed regulations
substitute for the current process-based CRA assessment factors a new
evaluation system that would rate institutions based on their actual
performance in meeting community credit needs. Under the proposal, all
depository institutions would be subject to three CRA-related tests: a lending
test; an investment test; and a service test. The lending test, which would be
the primary test for all institutions other than wholesale and limited-purpose
banks, would evaluate an institution's lending activities by comparing the
institution's share of housing, small business, and consumer loans in low- and
moderate-income areas in its service area with its share of such loans in the
other parts of its service area. The agencies would also evaluate the
institution's performance independent of other lenders by examining the ratio
of such loans made by the institution to low- and moderate-income areas to all
such loans made by the institution. At the election of an institution, the
agencies would also consider "indirect" loans made by affiliates and
subsidiaries of the institution as well as lending consortia and other
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lenders in which the institution had made lawful investments.
The focus of the investment test, under which wholesale and
limited-purpose institutions would normally be evaluated, would be the amount
of assets (compared to its risk-based capital) that an institution has devoted
to "qualified investments" that benefit low- and moderate-income individuals
and areas in the institution's service area. The service test would evaluate
an institution based on the percentage of its branch offices that are located
in or are readily accessible to low- and moderate-income areas. Smaller
institutions, those having total assets of less than $250 million, would be
evaluated under more streamlined criteria.
The joint agency CRA proposal provides that an institution evaluated under
a given test would receive one of five ratings for that test: outstanding; high
satisfactory; low satisfactory; needs to improve; or substantial
non-compliance. The ratings for each test would then be combined to produce an
overall composite rating of either outstanding, satisfactory (including both
high and low satisfactory), needs to improve, or substantial non-compliance.
In the case of a retail-oriented institution, its lending test rating would
form the basis for its composite rating. That rating would then be increased
by up to two levels in the case of outstanding or high satisfactory investment
performance, increased by one level in the case of outstanding service, and
decreased by one level in the case of substantial non-compliance in service.
An institution found to have engaged in illegal lending discrimination would be
rebuttably
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presumed to have a less-than-satisfactory composite CRA rating.
Under the proposal, an institution's CRA rating will continue to be taken
into account by a regulator in considering various types of applications. In
addition, an institution receiving a rating of "substantial non-compliance"
would be subject to civil money penalties or a cease and desist order under
Section 8 of the Federal Deposit Insurance Act (the "FDIA").
It is uncertain at this time whether or when the CRA proposal will
ultimately be adopted by the federal banking agencies in its current form.
Payment of Dividends. The Registrant is a legal entity separate and
distinct from its banking and other subsidiaries. The principal source of cash
flow of the Registrant, including cash flow to pay dividends to its
shareholders, is dividends from the subsidiary institutions. There are
statutory and regulatory limitations on the payment of dividends by the
subsidiary institution to the Registrant as well as the Registrant to its
shareholders.
As state nonmember banks, the subsidiary banks are subject to the
respective laws and regulations of the States of Alabama, Florida, Georgia, and
Tennessee and to the regulations of the FDIC as to the payment of dividends.
The subsidiary savings bank is subject to the regulations of the OTS and the
FDIC as to payment of dividends.
If, in the opinion of a federal regulatory agency, an institution under
its jurisdiction is engaged in or is about to engage in an unsafe or
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unsound practice (which, depending on the financial condition of the
institution, could include the payment of dividends), such authority may
require, after notice and hearing, that such institution cease and desist from
such practice. The Federal Reserve, the FDIC, and the OTS have indicated that
paying dividends that deplete an institution's capital base to an inadequate
level would be an unsafe and unsound banking practice. Under the Federal
Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA"), an insured
institution may not pay any dividend if payment would cause it to become
undercapitalized or once it is undercapitalized. See "Prompt Corrective
Action." Moreover, the Federal Reserve and the FDIC have issued policy
statements which provide that bank holding companies and insured banks should
generally only pay dividends out of current operating earnings.
At December 31, 1993, under dividend restrictions imposed under federal
and state laws, the subsidiary institutions, without obtaining governmental
approvals, could declare aggregate dividends to the Registrant of approximately
$172 million.
The payment of dividends by the Registrant and the subsidiary institutions
may also be affected or limited by other factors, such as the requirement to
maintain adequate capital above regulatory guidelines.
Transactions With Affiliates. There are various restrictions on the
extent to which the Registrant and its nonbank subsidiaries can borrow or
otherwise obtain credit from the subsidiary institutions. Each subsidiary
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institution (and its subsidiaries) is limited in engaging in borrowing and
other "covered transactions" with nonbank or non-savings bank affiliates to the
following amounts: (i) in the case of any such affiliate, the aggregate amount
of covered transactions of the subsidiary institution and its subsidiaries may
not exceed 10% of the capital stock and surplus of such subsidiary institution;
and (ii) in the case of all affiliates, the aggregate amount of covered
transactions of the subsidiary institution and its subsidiaries may not exceed
20% of the capital stock and surplus of such subsidiary institution. "Covered
transactions" are defined by statute to include a loan or extension of credit,
as well as a purchase of securities issued by an affiliate, a purchase of
assets (unless otherwise exempted by the Federal Reserve), the acceptance of
securities issued by the affiliate as collateral for a loan and the issuance of
a guarantee, and the issuance of a guarantee, acceptance, or letter of credit
on behalf of an affiliate. Covered transactions are also subject to certain
collateralization requirements. Further, a bank holding company and its
subsidiaries are prohibited from engaging in certain tie-in arrangements in
connection with any extension of credit, lease, or sale of property or
furnishing of services.
Capital Adequacy. The Registrant and the subsidiary institutions are
required to comply with the capital adequacy standards established by the
Federal Reserve in the case of the Registrant, the FDIC in the case of the
subsidiary banks, and the OTS in the case of the subsidiary savings bank.
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There are two basic measures of capital adequacy for bank holding companies
that have been promulgated by the Federal Reserve: a risk-based measure and a
leverage measure. All applicable capital standards must be satisfied for a
bank holding company to be considered in compliance.
The risk-based capital standards are designed to make regulatory capital
requirements more sensitive to differences in risk profile among banks and bank
holding companies, to account for off-balance sheet exposure, and to minimize
disincentives for holding liquid assets. Assets and off-balance sheet items
are assigned to broad risk categories, each with appropriate weights. The
resulting capital ratios represent capital as a percentage of total
risk-weighted assets and off-balance sheet items.
The minimum guideline for the ratio of total capital ("Total Capital") to
risk-weighted assets (including certain off-balance-sheet items, such as
standby letters of credit) is 8.0%. At least half of the Total Capital must be
composed of common equity, undivided profits, minority interests in the equity
accounts of consolidated subsidiaries, noncumulative perpetual preferred stock,
and a limited amount of cumulative perpetual preferred stock, less goodwill and
certain other intangible assets ("Tier 1 Capital"). The remainder may consist
of qualifying subordinated debt, other preferred stock, and a limited amount of
the allowance for loan losses. At December 31, 1993, the Registrant's
consolidated Tier 1 Capital and Total Capital ratios were 11.13% and 13.48%,
respectively.
In addition, the Federal Reserve has established minimum leverage ratio
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guidelines for bank holding companies. These guidelines provide for a minimum
ratio of Tier 1 Capital to average assets, less goodwill and certain other
intangible assets (the "Leverage ratio"), of 3.0% for bank holding companies
that meet certain specified criteria, including having the highest regulatory
rating. All other bank holding companies generally are required to maintain a
Leverage ratio of at least 3.0% plus an additional cushion of 100 to 200 basis
points. The Registrant's Leverage ratio at December 31, 1993 was 10.11%. The
guidelines also provide that bank holding companies experiencing internal
growth or making acquisitions will be expected to maintain strong capital
positions substantially above the minimum supervisory levels without
significant reliance on intangible assets. Furthermore, the Federal Reserve
has indicated that it will consider a "tangible Tier 1 Capital leverage ratio"
(deducting all intangibles) and other indicia of capital strength in evaluating
proposals for expansion or new activities.
Each of the Registrant's subsidiary banks is subject to risk-based and
leverage capital requirements adopted by the FDIC and the Registrant's
subsidiary savings bank is subject to tangible, risk-based, and core capital
requirements adopted by the OTS. Each of the Registrant's subsidiary
institutions was in compliance with applicable minimum capital requirements as
of December 31, 1993. Neither the Registrant nor any of the subsidiary
institutions has been advised by any federal banking agency of any specific
minimum capital ratio requirement applicable to it.
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Failure to meet capital guidelines could subject a bank to a variety of
enforcement remedies, including the termination of deposit insurance by the
FDIC, and to certain restrictions on its business. See "Prompt Corrective
Action."
The federal bank regulators continue to indicate their desire to raise
capital requirements applicable to banking organizations beyond their current
levels. In this regard, the Federal Reserve, the FDIC, and the OTS have,
pursuant to FDICIA, proposed an amendment to the risk-based capital standards
which would calculate the change in an institution's net economic value
attributable to increases and decreases in market interest rates and would
require banks with excessive interest rate risk exposure to hold additional
amounts of capital against such exposures.
Support of Subsidiary Institutions. Under Federal Reserve policy, the
Registrant is expected to act as a source of financial strength to, and to
commit resources to support, each of the subsidiary institutions. This support
may be required at times when, absent such Federal Reserve policy, the
Registrant may not be inclined to provide it. In addition, any capital loans
by a bank holding company to any of the subsidiary institutions are subordinate
in right of payment to deposits and to certain other indebtedness of such
subsidiary institution. In the event of a bank holding company's bankruptcy,
any commitment by the bank holding company to a federal bank regulatory agency
to maintain the capital of a subsidiary institution will be assumed by the
bankruptcy trustee and entitled to a
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priority of payment.
Under the FDIA, a depository institution insured by the FDIC can be held
liable for any loss incurred by, or reasonably expected to be incurred by, the
FDIC after August 9, 1989 in connection with (i) the default of a commonly
controlled FDIC-insured depository institution or (ii) any assistance provided
by the FDIC to any commonly controlled FDIC-insured depository institution "in
danger of default." "Default" is defined generally as the appointment of a
conservator or receiver and "in danger of default" is defined generally as the
existence of certain conditions indicating that a default is likely to occur in
the absence of regulatory assistance.
Prompt Corrective Action. FDICIA establishes a system of prompt
corrective action to resolve the problems of undercapitalized institutions.
Under this system, which became effective on December 19, 1992, the federal
banking regulators are required to establish five capital categories
("well-capitalized," "adequately capitalized," "undercapitalized,"
"significantly undercapitalized," and "critically undercapitalized") and to
take certain mandatory supervisory actions, and are authorized to take other
discretionary actions, with respect to institutions in the three
undercapitalized categories, the severity of which will depend upon the capital
category in which the institution is placed. Generally, subject to a narrow
exception, the FDICIA requires the banking regulator to appoint a receiver or
conservator for an institution that is critically
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undercapitalized. The federal banking agencies have specified by regulation
the relevant capital level for each category.
Under the final agency rule implementing the prompt corrective action
provisions, an institution that (i) has a Total Capital ratio of 10.0% or
greater, a Tier I Capital ratio of 6.0% or greater, and a Leverage ratio of
5.0% or greater, and (ii) is not subject to any written agreement, order,
capital directive, or prompt corrective action directive issued by the
appropriate federal banking agency, is deemed to be "well-capitalized." An
institution with a Total Capital ratio of 8.0% or greater, a Tier I Capital
ratio of 4.0% or greater, and a Leverage ratio of 4.0% or greater is considered
to be "adequately capitalized." A depository institution that has a Total
Capital ratio of less than 8.0% or a Tier I Capital ratio of less than 4.0% or
a Leverage ratio that is less than 4.0% is considered to be "undercapitalized."
A depository institution that has a Total Capital ratio of less than 6.0%, a
Tier I Capital ratio of less than 3%, or a Leverage ratio that is less than
3.0% is considered to be "significantly undercapitalized" and an institution
that has a tangible equity capital to assets ratio equal to or less than 2.0%
is deemed to be "critically undercapitalized." For purposes of the regulation,
the term "tangible equity" includes core capital elements counted as Tier I
capital for purposes of the risk-based capital standards plus the amount of
outstanding cumulative perpetual preferred stock (including related surplus),
minus all intangible assets with certain exceptions. A depository institution
may be
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deemed to be in a capitalization category that is lower than is indicated by
its actual capital position if it receives an unsatisfactory examination
rating.
In the case of an institution that is categorized as undercapitalized,
significantly undercapitalized, or critically undercapitalized, the institution
is required to submit an acceptable capital restoration plan to its appropriate
federal banking agency. Under FDICIA, a bank holding company must guarantee
that a subsidiary depository institution meet its capital restoration plan,
subject to certain limitations. The obligation of a controlling bank holding
company under FDICIA to fund a capital restoration plan is limited to the
lesser of 5.0% of an undercapitalized subsidiary's assets or the amount
required to meet regulatory capital requirements. An undercapitalized
institution is also generally prohibited from increasing its average total
assets, making acquisitions, establishing any branches, or engaging in any new
line of business except in accordance with an accepted capital restoration plan
or with the approval of the FDIC. In addition, the appropriate federal banking
agency is given authority with respect to any undercapitalized depository
institution to take any of the designated actions it is required to or may take
with respect to a significantly undercapitalized institution if it determines
"that those actions are necessary to carry out the purpose" of FDICIA.
At December 31,1993, all of the Registrant's subsidiary institutions had
the requisite capital levels to qualify as well capitalized.
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Brokered Deposits. The FDIC has adopted regulations governing the receipt
of brokered deposits. Under the regulations, a depository institution cannot
accept, rollover, or renew brokered deposits unless (i) it is well capitalized
or (ii) it is adequately capitalized and receives a waiver from the FDIC. A
depository institution that cannot receive brokered deposits also cannot offer
"pass-through" insurance on certain employee benefit accounts. Whether or not
it has obtained such a waiver, an adequately capitalized depository institution
may not pay an interest rate on any deposits in excess of 75 basis points over
certain prevailing market rates specified by regulation. There are no such
restrictions on a depository institution that is well capitalized. Because all
of the subsidiary institutions of the Registrant had at December 31,1993, the
requisite capital levels to qualify as well capitalized, the Registrant
believes the brokered deposits regulation will have no material effect on the
funding or liquidity of any of the subsidiary institutions.
FDIC Insurance Assessments. In July 1993, the FDIC adopted a new
risk-based assessment system for insured depository institutions that takes
into account the risks attributable to different categories and concentrations
of assets and liabilities. The new system, which went into effect on January
1, 1994 and replaces a transitional system that the FDIC had utilized for the
1993 calendar year, assigns an institution to one of three capital categories:
(i) well capitalized; (ii) adequately capitalized; and (iii) undercapitalized.
These three categories are substantially similar
22
24
to the prompt corrective action categories described above, with the
"undercapitalized" category including institutions that are undercapitalized,
significantly undercapitalized, and critically undercapitalized for prompt
corrective action purposes. An institution is also assigned by the FDIC to one
of three supervisory subgroups within each capital group. The supervisory
subgroup to which an institution is assigned is based on a supervisory
evaluation provided to the FDIC by the institution's primary federal regulator
and information which the FDIC determines to be relevant to the institution's
financial condition and the risk posed to the deposit insurance funds (which
may include, if applicable, information provided by the institution's state
supervisor). An institution's insurance assessment rate is then determined
based on the capital category and supervisory category to which it is assigned.
Under the final risk-based assessment system, as well as the prior transitional
system, there are nine assessment risk classifications (i.e., combinations of
capital groups and supervisory subgroups) to which different assessment rates
are applied. Assessment rates for 1994, as they had during 1993, will range
from .23% of deposits for an institution in the highest category (i.e.,
"well-capitalized" and "healthy" to .31% of deposits for an institution in the
lowest category (i.e., "undercapitalized" and "substantial supervisory
concern").
The FDIC is authorized to raise insurance premiums in certain
circumstances. Any increase in premiums would have an adverse effect on
23
25
the Registrant.
Under the FDIA, insurance of deposits may be terminated by the FDIC upon a
finding that the institution has engaged in unsafe and unsound practices, is in
an unsafe or unsound condition to continue operations, or has violated any
applicable law, regulation, rule, order or condition imposed by the FDIC.
New Safety and Soundness Standards. In November 1993, federal banking
agencies issued for comment proposed safety and soundness standards relating to
internal controls, information systems and internal audit systems, loan
documentation, credit underwriting, interest rate exposure, asset growth,
compensation, fees, and benefits. With respect to internal controls,
information systems, and internal audit systems, the standards describe the
functions that adequate internal controls and information systems must be able
to perform, including (i) monitoring adherence to prescribed policies, (ii)
effective risk management, (iii) timely and accurate financial, operational,
and regulatory reporting, (iv) safeguarding and managing assets, and (v)
compliance with applicable laws and regulations. The standards also include
requirements that (i) those performing internal audits be qualified and
independent, (ii) internal controls and information systems be tested and
reviewed, (iii) corrective actions be adequately documented, and (iv) that
results of an audit be made available for review of management actions.
As in the case of internal controls and information systems, the
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26
proposal establishes general principles and standards, rather than specific
requirements, that must be followed in other areas. For example, loan
documentation and credit underwriting practices must be such that they enable
the institution to make an informed lending decision and assess credit risk on
an ongoing basis. Similarly, an institution must manage interest rate risk "in
a manner that is appropriate to the size of (the institution) and the
complexity of its assets and liabilities" and must conduct any asset growth in
accordance with a plan that has taken a variety of factors such as deposit
volatility, capital, and interest rate risk into account. The proposal also
prohibits "excessive compensation," which is defined as amounts paid that are
unreasonable or disproportionate to the services performed by an officer,
employee, director, or principal shareholder in light of all circumstances. In
order to help alert institutions and their regulators to deteriorating
financial conditions, the proposed rule also would impose a maximum ratio of
classified assets to total capital of 1.0 and, in the case of an institution
that had incurred a net loss over the last four quarters, would require that
institution to have sufficient capital to absorb a similar loss over the next
four quarters and still remain in compliance with its minimum capital
requirements.
Depositor Preference. Legislation recently enacted by Congress
establishes a nationwide depositor preference rule in the event of a bank
failure. Under this arrangement, all deposits and certain other claims
25
27
against a bank, including the claim of the FDIC as subrogee of insured
depositors, would receive payment in full before any general creditor of the
bank would be entitled to any payment in the event of an insolvency or
liquidation of the bank.
Other. Because of concerns relating to the competitiveness and the safety
and soundness of the industry, the Congress is considering, even after the
enactment of FIRREA and FDICIA, a number of wide-ranging proposals for altering
the structure, regulation, and competitive relationships of the nation's
financial institutions. Among such bills are proposals to prohibit depository
institutions and bank holding companies from conducting certain types of
activities, to subject depository institutions to increased disclosure and
reporting requirements, to eliminate the present restriction on interstate
branching by banks, to eliminate the present restriction on the purchase of
banks and bank holding companies by banks and bank holding companies located in
other states, to alter the statutory separation of commercial and investment
banking and to further expand the powers of depository institutions, bank
holding companies, and competitors of depository institutions. It cannot be
predicted whether or in what form any of these proposals will be adopted or the
extent to which the business of First Alabama may be affected thereby.
Registrant's broker/dealer subsidiary is subject to regulation by the
Securities and Exchange Commission, the National Association of Securities
Dealers, and certain state securities commissions.
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28
(i) The following chart shows for the last three years the
percentage of total operating income contributed by each of the major
categories of income.
1993 1992 1991
----- ----- ------
Interest and fees on loans 61.3% 59.1% 63.0%
Interest on investment securities 16.9 19.6 19.1
Interest on mortgage loans held for sale 2.3 2.1 1.6
Interest on federal funds sold 0.2 1.0 0.8
Other interest income 0.1 0.0 0.1
Trust department income 2.7 2.6 2.2
Service charges on deposit accounts 6.2 6.4 5.9
Mortgage servicing and origination fees 6.4 5.7 4.3
Other non-interest income 3.9 3.5 3.0
------ ------ ------
Total Operating Income 100.0% 100.0% 100.0%
====== ====== ======
(ii) There has been no public announcement, and no information
otherwise has become public, about a material new product or line of business.
(iii) The monetary policies of the Board of Governors of the Federal
Reserve affect the operations of Registrant's subsidiary institutions. Through
changes in the reserve requirements against bank and thrift deposits, open
market operations in U.S. Government securities and changes in the discount
rate on borrowings, the Federal Reserve influences the cost and availability of
funds obtained for lending and investing.
The monetary policies of the Federal Reserve have had a significant
effect on the operating results of financial institutions in the past and are
expected to do so in the future. The impact of such policies on the
27
29
future business and earnings of the Registrant cannot be predicted.
(iv) The Registrant does not have any material patents, trademarks,
licenses, franchises, or concessions.
(v) No material portion of the Registrant's business is of a
seasonal nature.
(vi) The primary sources of funds for the subsidiary institutions
are deposits and borrowed funds. The Registrant's primary sources of operating
funds are service fees, dividends, and interest which it receives from bank and
bank-related subsidiaries.
(vii) No material part of the business of the Registrant is dependent
upon a single customer or a few customers. No single customer or affiliated
group of customers accounts for 10% or more of Registrant's consolidated
revenues.
(viii) Information concerning backlog orders is not relevant to an
understanding of the business of the Registrant.
(ix) No material portion of the business of the Registrant is
subject to renegotiation of profits or termination of contracts or subcontracts
by the Government.
(x) All aspects of the Registrant's business are highly
competitive. The Registrant's subsidiaries compete with other financial
institutions located in Alabama; Columbus, Georgia; northwest Florida,
Louisiana, Tennessee, and other adjoining states, as well as large banks in
major financial centers and other financial intermediaries, such as savings
28
30
and loan associations, credit unions, consumer finance companies, brokerage
firms, insurance companies, investment companies, mutual funds, other mortgage
companies and financial service operations of major commercial and retail
corporations.
As of December 31, 1993, the Registrant was the third largest bank
holding company headquartered in Alabama based on both deposits and assets.
The Registrant has offices with deposits in excess of $800 million in each of
the three largest metropolitan areas in Alabama. The Registrant's banking
offices are located in markets primarily within the state of Alabama. In
addition, the Registrant operates 23 banking offices in northwest Florida with
approximately $445 million in deposits, three banking offices in Columbus,
Georgia, with approximately $98 million in deposits, 15 banking offices in
Louisiana with $789 million in deposits, and 24 banking offices in middle
Tennessee, with approximately $398 million in deposits.
Customers for banking services are generally influenced by
convenience, quality of service, personal contacts, price of services, and
availability of products. Although the ranking of Registrant's position varies
in different markets, Registrant believes that its affiliates effectively
compete with other banks and thrifts in their relevant market areas.
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31
On July 1, 1987, Alabama's regional reciprocal interstate banking
statute became effective. The statute provides for an interstate banking
region that includes Alabama, Arkansas, the District of Columbia, Florida,
Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, South
Carolina, Tennessee, Texas, Virginia, and West Virginia. All of these states
have passed some form of interstate banking legislation which is reciprocal
with Alabama. Institutions from outside this region could also enter Alabama
through the purchase of failed institutions from the Resolution Trust
Corporation or the FDIC. If other bank holding companies enter Alabama through
acquisition or otherwise, competition for banking services in Alabama could
increase. To date, there have been several relatively small acquisitions by
out-of-state firms, however the effect on Registrant has been insignificant.
Congress is considering legislation to eliminate the present
restrictions on interstate branching by banks and the present restrictions on
the purchase of banks and bank holding companies by banks and bank holding
companies located in other states. In addition, several states included in
Alabama's regional reciprocal interstate banking statue have passed or are
considering some form of legislation that would enable banks or bank holding
companies located in any other state in the nation to purchase banks or bank
holding companies in that state. Alternatively, the legislation would enable
banks or bank holding companies located in that state to purchase banks or bank
holding companies located in any other
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32
state in the nation. Although Alabama is not currently considering interstate
banking legislation, the enactment of some form of interstate banking by the
Congress or by other states in the Registrant's market areas, could further
intensify competition in the Registrant's business.
(xi) There were no material expenditures during the last three
fiscal years on research and development activities by the Registrant.
(xii) Regulations of any governmental authority concerning the
discharge of materials into the environment are expected to have no material
effect on the Registrant or any of its subsidiaries.
(xiii) As of December 31, 1993, Registrant, its affiliate banks and
other subsidiaries had a total of 5,439 full-time-equivalent employees.
(d) Registrant neither engages in foreign operations nor derives a
significant portion of its business from customers in foreign countries.
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33
ITEM 2. Properties
The corporate headquarters of the Registrant occupy several floors of the
downtown Birmingham main banking office facility. Certain administrative
offices of the Registrant are located in downtown Montgomery, in the First
Alabama Bancshares Building, a modern, eight-story building owned by Regions
Financial Building Corporation, a wholly-owned subsidiary of Registrant, and a
six story building owned by First Alabama Bank, also a wholly-owned subsidiary
of Registrant.
Registrant's largest banking offices, all of which are owned by
wholly-owned subsidiaries of the Registrant, are located in Birmingham, Mobile,
Montgomery and Huntsville, Alabama. The Birmingham offices are in a modern, 18
story office building in downtown Birmingham and an operations center outside
the downtown area. The Mobile offices operate from an 18 story office building
with an eight-story annex. The Montgomery offices are in a modernized and
enlarged, 12 story building, also owned by Regions Financial Building
Corporation. The Huntsville offices are in a historic main office building in
downtown Huntsville. Portions of the Birmingham, Mobile and Montgomery main
office buildings are leased to other tenants. In addition to the four main
offices, a total of 77 full-service branches were maintained at December 31,
1993, within the respective cities or counties in the four markets.
Registrant's other 85 Alabama banking offices at December 31, 1993,
operated in these Alabama counties: Autauga, Baldwin, Blount, Calhoun,
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34
Cherokee, Chilton, Choctaw, Clarke, Coffee, Conecuh, Covington, Cullman,
Dallas, Etowah, Houston, Lauderdale, Lee, Limestone, Macon, Marengo, Marshall,
Monroe, Morgan, Pike, Russell, Shelby, Sumter, Talladega, Tallapoosa,
Tuscaloosa and Walker. Registrant's 23 Florida banking offices operate in the
Florida counties of Calhoun, Escambia, Holmes, Jackson, Okaloosa, Santa Rosa,
Walton and Washington. Registrant operates three Georgia banking offices in
Muskogee County, Georgia, and 24 Tennessee banking offices in the counties of
Coffee, Cheatham, Davidson, Franklin, Macon, Montgomery, Overton, Putnam,
Robertson, Rutherford, Sumner and Williamson. Registrant's Louisiana affiliate
operates 15 offices located in the parishes of Clairborne, Jefferson,
Lafourche, Orleans, Ouachita, St. Bernard, St. Tammany and Webster.
Registrant's subsidiary, Real Estate Financing, Inc. has its main offices
located in Montgomery. As of December 31, 1993, it maintained 23 loan
production offices, located in Birmingham, Huntsville, Daphne, Dothan, Decatur,
Enterprise, Foley, Guntersville, Mobile, Montgomery, Prattville, Thomasville
and Tuscaloosa, Alabama; Destin, Pensacola and Tallahassee, Florida; Columbus,
Georgia; Jackson, Mississippi; Columbia and Greenville, South Carolina; and
Knoxville and Memphis, Tennessee.
Regions Life Insurance Company and FAB Agency, Inc. conduct business from
offices located in Montgomery. FAB Agency, Inc. is also authorized to do
business at the offices of Real Estate Financing, Inc. and at the offices of
bank affiliates.
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35
First Alabama Investments, Inc. has its main office located in Birmingham.
As of December 31, 1993, it maintained four other offices located in
Huntsville, Mobile and Montgomery, Alabama, and Pensacola, Florida.
The subsidiary depository institutions operated a total of 231
full-service offices at December 31, 1993. Of the 231 total full-service
offices, 67 are subject to a building or ground lease and 164 are wholly owned
by subsidiaries of the Registrant. For offices in leased premises, annual
rentals totaled approximately $3,686,000 as of December 31, 1993. During 1993,
banking affiliates received approximately $3,589,000 in rentals for space
leased to others. At December 31, 1993, encumbrances on the offices, equipment
and other operational facilities owned by the affiliates totaled approximately
$5,543,000 with a weighted average interest rate of 8.8%.
ITEM 3. Legal Proceedings
"Note L. Commitments and Contingencies" on page 62 of the annual report
to stockholders for the year ended December 31, 1993, is incorporated herein by
reference.
ITEM 4. Submission of Matters to a Vote of Security Holders
Registrant did not submit any matters to a vote of security holders during the
fourth quarter of 1993.
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36
PART II
ITEM 5. Market for the Registrant's Common Stock
and Related Security Holder Matters
"Common Stock Market Prices and Dividends" on page 47 of the annual report
to stockholders for the year ended December 31, 1993, is incorporated herein by
reference.
ITEM 6. Selected Financial Data
"Historical Financial Summary" on pages 70 through 73 of the annual report
to stockholders for the year ended December 31, 1993, is incorporated herein by
reference.
ITEM 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" on pages 24 through 47 of the annual report to stockholders for
the year ended December 31, 1993, is incorporated herein by reference.
ITEM 8. Financial Statements and Supplementary Data
The report of independent auditors and the consolidated financial
statements of the Registrant and its subsidiaries, included in the annual
report to stockholders for the year ended December 31, 1993, are incorporated
herein by reference.
"Summary of Quarterly Results of Operations" on page 47 and "Effects of
Inflation" on page 46 of the annual report to stockholders for the year
35
37
ended December 31, 1993, are incorporated herein by reference.
ITEM 9. Changes in and Disagreements with Accountants
On Accounting and Financial Disclosure
There have been no disagreements on accounting and financial disclosure
between Registrant and Ernst & Young.
PART III
ITEM 10. Directors and Executive Officers of the Registrant
"Information on Directors" from pages 3 through 6 and "Section 16
Transactions" on page 6 of the Registrant's proxy statement dated March 16,
1994, are incorporated herein by reference.
Executive officers of the Registrant as of December 31, 1993, are as
follows:
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38
Position and
Offices Held with Officer
Executive Officer Age Registrant and Subsidiaries Since
- -------------------- --- ---------------------------- -------
J. Stanley Mackin 61 Chairman, Director and Chief Executive Officer, 1983*
Registrant and First Alabama Bank; Director,
Secor Bank, FSB, Real Estate Financing, Inc., FAB
Agency, Inc., Regions Agency, and Regions Life
Insurance Company.
Richard D. Horsley 51 Vice Chairman, Director and Executive Financial 1972
Officer, Registrant and First Alabama Bank;
Director and Vice President, Regions Agency,
Inc.; Director, FAB Agency, Inc., Secor Bank,
FSB, Regions Life Insurance Company, Regions
Financial Building Corp. and Real Estate
Financing, Inc.
Sam P. Faucett 59 President/Western Region and Florida Region; 1983*
Chairman and Chief Executive Officer, First
Alabama Bank - Tuscaloosa; Director, Regions Bank
of Florida and Real Estate Financing, Inc.
Joe M. Hinds, Jr. 56 President/Northern Region and Tennessee Region; 1983*
Chairman and Chief Executive Officer, First
Alabama Bank - Huntsville.
Wilbur B. Hufham 56 President/Southeastern Region; Chairman, 1983*
President and Chief Executive Officer, First
Alabama Bank - Montgomery.
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39
Position and
Offices Held with Officer
Executive Officer Age Registrant and Subsidiaries Since
- -------------------- --- ---------------------------- -------
Carl E. Jones, Jr. 53 President/Southern Region and Louisiana Region; 1983*
Chairman and Chief Executive Officer, First
Alabama Bank - Mobile.
William E. Jordan 59 President/Central Region; Chairman and Chief 1990*
Executive Officer, First Alabama Bank -
Birmingham.
William E. Askew 44 Executive Vice President - Retail Banking 1987
Division, Registrant and First Alabama Bank.
Delmar F. Epton 60 Executive Vice President - Operations Group, 1986*
Registrant and First Alabama Bank.
Robert P. Houston 49 Executive Vice President and Comptroller, 1974
Registrant and First Alabama Bank; Director and
Treasurer, Regions Financial Building Corp.;
Director, Secretary and Treasurer, FAB Agency,
Inc., Regions Life Insurance Company and Regions
Agency, Inc.; Director, Secor Bank, FSB.
Charles S. 57 Senior Vice President - Investments, Registrant 1993
Northen, III and First Alabama Bank; Director, First Alabama
Investments, Inc.
E. Cris Stone 51 Executive Vice President - Corporate Banking, 1988
Registrant and First Alabama Bank; Director and
Vice President, Regions Financial Leasing, Inc.
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40
Position and
Offices Held with Officer
Executive Officer Age Registrant and Subsidiaries Since
- -------------------- --- ---------------------------- -------
Richard E. Wambsganss 53 Executive Vice President - Trust Group, 1987
Registrant and First Alabama Bank.
L. Burton Barnes, III 45 General Counsel and Corporate Secretary, 1985
Registrant and First Alabama Bank; Director and
Secretary, Regions Financial Building Corp. and
First Alabama Investments, Inc.; Director, Secor
Bank, FSB, FAB Agency, Inc., Regions Agency and
Regions Life Insurance Company.
*The years indicated are those in which the individual was first deemed to be
an executive officer of Registrant, although in every case the individual had
been an executive officer of a subsidiary of Registrant for a number of years.
ITEM 11. Executive Compensation
"Executive Compensation and Other Transactions" on pages 7 through 9
and "Personnel Committee Interlocks and Insider Participation" on page 11 of
the Registrant's proxy statement dated March 16, 1994, are incorporated herein
by reference. All information on page 10 and all information on page 11,
except for the information under the sub-heading "Personnel Committee
Interlocks and Insider Participation," of the Registrant's proxy statement
dated March 16, 1994, are specifically not incorporated by reference herein.
39
41
ITEM 12. Security Ownership of Certain Beneficial Owners and Management
"Voting Securities and Principal Holders Thereof" on page 2 and
"Information on Directors" on pages 3 through 5 of the Registrant's proxy
statement dated March 16, 1994, are incorporated herein by reference.
ITEM 13. Certain Relationships and Related Transactions
"Other Transactions," on page 12 of the Registrant's proxy statement
dated March 16, 1994, are incorporated herein by reference.
PART IV
ITEM 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K
14(a)(1) and (2) The lists called for by this portion of Item 14 are
submitted as a separate part of this report.
14(a)(3) Listing of Exhibits:
SEC Assigned
Exhibit Number Description of Exhibit
- -------------- ----------------------
3. Bylaws as last amended on April 28, 1993, incorporated herein by reference from the Exhibits to the
Registration Statement filed with the Commission and assigned file number 33-50577.
Certificate of Incorporation as last amended on May 9, 1988, incorporated herein by reference from
the Exhibits to the Registration Statement filed with the Commission and assigned file number 33-
50577.
4. a. Debenture Purchase Agreement dated October 15, 1973, incorporated by reference from the Exhibits
to the Registration Statement filed with the Commission and assigned file number 2-49702.
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42
b. Subordinated Notes Indenture Agreement dated December 3, 1992, incorporated by reference from
the Exhibits to the Registration Statement filed with the Commission and assigned registration
number 33-45714.
10. a. Amended and Restated Agreement and Plan of Reorganization related to the acquisition of Secor
Bank, FSB, incorporated by reference from the Exhibits to the Registration Statement filed with
the Commission and assigned file number 33-69612.
*b. First Alabama Bancshares 1991 Long-Term Incentive Plan incorporated by reference from the
Exhibit to the Registrant's proxy statement filed with the Commission and dated March 22, 1991.
13. Annual Report to Stockholders for the year ended December 31, 1993.
21. List of Subsidiaries of the Registrant.
23. Consent of Independent Auditors.
99. a. Form 11-K, Annual Report of Employee Stock Purchase Plan of First Alabama Bancshares, Inc. for
the year ended December 31, 1993.
b. Form 11-K, Annual Report of Directors' Stock Investment Plan of First Alabama Bancshares, Inc.
for the year ended December 31, 1993.
*- Represents a compensatory plan agreement that is required to be filed under this item.
14(b) Reports on Form 8-K filed in the fourth quarter of 1993:
In a report filed on Form 8-K, under item 5, dated November 19, 1993, the Registrant reported the Office of
Thrift Supervision approved the acquisition of Secor Bank, FSB.
In a report filed on Form 8-K, under items 2 and 7, dated December 31, 1993, the Registrant reported the
consummation of the acquisition of Secor Bank, FSB,
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43
headquartered in Birmingham, Alabama. The following financial statements were filed under item 7:
a)Financial Statements of the business acquired. The Consolidated Statements of Condition at December
31, 1992 and 1991, Consolidated Statements of Operations, Consolidated Statements of Stockholders' Equity,
Consolidated Statements of Cash Flows, and Notes to Consolidated Statements for the years ended December 31,
1992, 1991, and 1990 of Secor Bank, FSB.
The unaudited Consolidated Statements of Financial Condition at September 30, 1993, unaudited
Consolidated Statements of Operations, unaudited Statements of Cash Flows, and unaudited Notes to
Consolidated Statements for the nine months ended September 30, 1993 and 1992, of Secor Bank, FSB.
b)Pro Forma Financial Information. The pro forma combined condensed Statement of Condition
(unaudited) at September 30, 1993, and the pro forma combined condensed Statements of Income (unaudited) for
the nine months ended September 30, 1993 and for the year ended December 31, 1992.
14(c) The Exhibits not incorporated herein by reference are submitted as a separate part of this report.
NOTE: Copies of the aforementioned exhibits are available to stockholders upon request to:
Stockholder Assistance
44 First Alabama Plaza
P. O. Box 1448
Montgomery, Alabama 36102-1448
14(d) Financial statement schedules: None.
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44
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 ALABAMA BANCSHARES, INC.
/s/ L. Burton Barnes, III 3/16/94
----------------------------------
L. Burton Barnes, III Date
General Counsel
and Corporate Secretary
/s/Robert P. Houston 3/16/94
----------------------------------
Robert P. Houston Date
Executive Vice President
and Comptroller
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ J. Stanley Mackin 3/16/94 /s/ Albert P. Brewer 3/16/94
- ------------------------------------ ----------------------------------
J. Stanley Mackin Date Albert P. Brewer Date
Chairman, Chief Executive Director
Officer and Director
/s/ Richard D. Horsley 3/16/94 /s/ James S. M. French 3/16/94
- ------------------------------------ ----------------------------------
Richard D. Horsley Date James S. M. French Date
Vice Chairman, Executive Director
Financial Officer and Director
/s/ Sheila S. Blair 3/16/94 /s/ Catesby ap C. Jones 3/16/94
- ------------------------------------ ----------------------------------
Sheila S. Blair Date Catesby ap C. Jones Date
Director Director
/s/ James B. Boone, Jr. 3/16/94 /s/ Olin B. King 3/16/94
- ------------------------------------ ----------------------------------
James B. Boone, Jr. Date Olin B. King Date
Director Director
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45
/s/ Norman F. McGowin, Jr. 3/16/94 /s/ Henry E. Simpson 3/16/94
- ------------------------------------ ----------------------------------
Norman F. McGowin, Jr. Date Henry E. Simpson Date
Director Director
/s/ H. M. McPhillips, Jr. 3/16/94 /s/ Robert E. Steiner, III 3/16/94
- ------------------------------------ ----------------------------------
H. Manning McPhillips, Jr. Date Robert E. Steiner, III Date
Director Director
/s/ W. Wyatt Shorter 3/16/94 /s/ Lee J. Styslinger, Jr. 3/16/94
- ------------------------------------ ----------------------------------
W. Wyatt Shorter Date Lee J. Styslinger, Jr. Date
Director Director
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46
ANNUAL REPORT ON FORM 10-K
ITEM 14(a)(1) AND (2)
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
CERTAIN EXHIBITS
YEAR ENDED DECEMBER 31, 1993
FIRST ALABAMA BANCSHARES, INC.
BIRMINGHAM, ALABAMA
47
FORM 10-K - ITEM 14(a)(1) AND (2)
FIRST ALABAMA BANCSHARES, INC. AND SUBSIDIARIES
LIST OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements and report of
independent auditors of First Alabama Bancshares, Inc. and subsidiaries,
included in the annual report of the registrant to its stockholders for the
year ended December 31, 1993, are incorporated by reference in Item 8:
Report of Independent Auditors
Consolidated Statement of Condition - December 31, 1993 and
1992
Consolidated Statement of Income - Years ended December 31,
1993, 1992 and 1991
Consolidated Statement of Cash Flows - Years ended December
31, 1993, 1992 and 1991
Consolidated Statement of Changes in Stockholders' Equity -
Years ended December 31, 1993, 1992 and 1991
Notes to Consolidated Financial Statements - December 31,
1993
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.
48
ANNUAL REPORT ON FORM 10-K
ITEM 14(c)
EXHIBITS
49
EXHIBITS INDEX
SEC Assigned
Exhibit Number Description of Exhibit
- -------------- ----------------------
3. Bylaws as last amended on April 28, 1993, incorporated herein by reference from the Exhibits to the
Registration Statement filed with the Commission and assigned file number 33-50577.
Certificate of Incorporation as last amended on May 9, 1988, incorporated herein by reference from the
Exhibits to the Registration Statement filed with the Commission and assigned file number 33-50577.
4. a. Debenture Purchase Agreement dated October 15, 1973, incorporated by reference from the Exhibits
to the Registration Statement filed with the Commission and assigned file number 2-49702.
b. Subordinated Notes Indenture Agreement dated December 3, 1992, incorporated by reference from the
Exhibits to the Registration Statement filed with the Commission and assigned registration number
33-45714.
10. a. Amended and Restated Agreement and Plan of Reorganization related to the acquisition of Secor
Bank, FSB, incorporated by reference from the Exhibits to the Registration Statement filed with
the Commission and assigned file number 33-69612.
b. First Alabama Bancshares 1991 Long-Term Incentive Plan incorporated by reference from the Exhibit
to the Registrant's proxy statement filed with the Commission and dated March 22, 1991.
13. Annual Report to Stockholders for the year ended December 31, 1993.
21. List of Subsidiaries of the Registrant.
23. Consent of Independent Auditors.
99. a. Form 11-K, Annual Report of Employee Stock Purchase Plan of First Alabama Bancshares, Inc. for the
year ended December 31, 1993.
b. Form 11-K, Annual Report of Directors' Stock Investment Plan of First Alabama Bancshares, Inc. for
the year ended December 31, 1993.