ITEM 1. BUSINESS
Mark Twain Bancshares, Inc. ("Company") is a Missouri chartered multi-bank holding company which owns or controls substantially all the capital stock of three banks: Mark Twain Bank, which operates 20 separate banking locations in the metropolitan St. Louis areas; Mark Twain Kansas City Bank, which operates eleven separate locations in the metropolitan Kansas City bi-state area; and Mark Twain Illinois Bank, which operates four locations on the Illinois side of the St. Louis metropolitan area. The Company was organized in 1967.
The Company's subsidiaries encounter substantial competition in all of their banking and related financial service activities from other banking institutions and from an increasing number of non-banking financial institutions in its primary market areas.
Non-Banking Subsidiaries
The Company wholly owns the following: Mark Twain Properties, Inc., which owns, holds under lease, or manages properties occupied by present banking centers; Mark Twain Community Development Corporation, which provides services and housing opportunities for low- to moderate-income persons; Tarquad Corporation, which acts as trustee of deeds of trust of which Company subsidiaries are the lenders and beneficiaries; and Mark Twain Asset Recovery, Inc., which acts as purchaser of certain assets acquired by subsidiary banks in the collection of loans.
Mark Twain Bank wholly owns Mark Twain Brokerage Services, Inc., a member of the National Association of Securities Dealers, which provides customers with complete brokerage services on all exchanges and provides the sale of various insurance company products. Mark Twain Bank and Mark Twain Kansas City Bank each wholly own a Mark Twain Real Estate Development Corporation subsidiary and a Mark Twain Community Development Corporation subsidiary.
Supervision and Regulation
The Company is registered with and subject to regulation by the Board of Governors of the Federal Reserve System and is subject to the Missouri Bank Holding Company Act. All Company-owned non-bank subsidiaries are subject to regulation by the Board of Governors of the Federal Reserve System. The subsidiary state-chartered banks are subject to regulation and supervision by the banking regulators of the states in which the banking units are located and the states in which the bank is chartered. All subsidiary banks are subject to regulation by and are members of the Federal Deposit Insurance Corporation.
The earnings of the subsidiary banks are affected not only by competing financial institutions and general economic conditions, but also by the policies of various governmental regulatory authorities, and state and federal laws, particularly as they relate to powers authorized to banks and bank holding companies. The Company and all subsidiary banks are subject to the provisions of the Community Reinvestment Act. Mark Twain Brokerage Services, Inc., is subject to supervision and regulation by the National Association of Securities Dealers, Securities and Exchange Commission, Missouri Division of Securities, Missouri Division of Insurance, and Missouri Division of Finance, among others. The mortgage department is subject to supervision by Department of Housing and Urban Development, Federal Housing Authority, Veteran's Administration, Federal Home Loan Mortgage Corporation, Federal National Mortgage Association, and Government National Mortgage Association, among others, concerning mortgage lending.
Further information called for by this item is contained on pages 17 to 29 and Note 2 "Acquisitions" on page 36 of the Company's 1995 Annual Report to Shareholders and is incorporated by reference herein.
ITEM 2.
ITEM 2. PROPERTIES
The Company leases its principal executive office which is located at 8820 Ladue Road, Ladue, Missouri. As of December 31, 1995, the Company conducts its business and operations
out of 39 locations, which are either owned or leased, in the St. Louis bi-state, Kansas City bi-state and Chicago metropolitan areas. The Company's physical properties are in satisfactory condition and suitable and adequate for present operations.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
The Company and its subsidiaries are parties to a number of lawsuits, most of which are considered routine litigation incidental to doing business. The Company, after consultation with legal counsel, does not expect the outcome of any litigation to have a material effect on its consolidated financial position.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders during the fourth quarter of 1995.
No family relationship exists among any of the Executive Officers of Registrant.
Each officer of the Registrant is appointed to serve, at the pleasure of its Board of Directors, for the annual period next following the Annual Meeting of the Shareholders of the Registrant, and until his respective successor shall have been appointed and qualified. Certain officers were offered employment agreements; see Exhibit 10.9 below.
No officer of the Registrant was selected so to serve pursuant to any arrangement or understanding between him and any person other than the directors and one or more officers of Registrant acting solely in that capacity.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
At December 31, 1995, there were approximately 2,500 holders of record of Common Stock. The information in Note 14, "Restrictions of Subsidiary Dividends," on page 40 of the Company's 1995 Annual Report to Shareholders is incorporated by reference herein.
ITEM 6.
ITEM 6. SELECTED FINANCIAL DATA
Information called for by this item is contained on page 16 of the Company's 1995 Annual Report to Shareholders and is incorporated by reference herein.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Information called for by this item is contained on pages 17 to 29 of the Company's 1995 Annual Report to Shareholders and is incorporated by reference herein.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Information called for by this item is contained on pages 30 to 46 of the Company's 1995 Annual Report to Shareholders and is incorporated by reference herein.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
None.
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information concerning directors, some of whom are executive officers of the Registrant, required by this item is set forth on pages 4 to 6 of the Company's Proxy Statement for its Annual Meeting to be held April 23, 1996 and is incorporated by reference herein.
The information concerning executive officers who are not directors of the Registrant required by this item is reported in Part I of this Form 10-K.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
Information called for by this item is contained on pages 9 to 16 and pages 18 to 19 of the Company's Proxy Statement for its Annual Meeting to be held April 23, 1996 and is incorporated by reference herein.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security Ownership of Certain Beneficial Owners - Information concerning persons who are known to own beneficially more than 5% of any class of the Company's voting shares on March 6, 1996 is contained on page 3 of the Company's Proxy Statement for its Annual Meeting to be held April 23, 1996, which is incorporated by reference herein.
(b) Security Ownership of Management - Information called for by this item is contained on pages 7 to 9 of the Company's Proxy Statement for its Annual Meeting to be held April 23, 1996, and is incorporated by reference herein.
(c) Changes in Control - The Company knows of no contractual arrangements which may at a subsequent date result in a change in control of the Company.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information called for by this item is contained on page 19 of the Company's Proxy Statement for its Annual Meeting to be held April 23, 1996, which is incorporated by reference herein.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) Financial Statements - The following consolidated financial statements of Mark Twain Bancshares, Inc. and Subsidiaries and the accountants' report thereon are incorporated by reference from the 1995 Annual Report to Shareholders of Mark Twain Bancshares, Inc.:
Consolidated Balance Sheet - December 31, 1995 and 1994
Consolidated Statement of Income - Years ended December 31, 1995, 1994 and 1993
Consolidated Statement of Changes in Shareholders' Equity - Years ended December 31, 1995, 1994 and 1993
Consolidated Statement of Cash Flows - Years ended December 31, 1995, 1994 and 1993
Notes to Consolidated Financial Statements
(a) (2) Financial Statement Schedules - All schedules are omitted because they are not applicable, or not required, or because the required information is included in the financial statements or the notes thereto.
(a) (3) Exhibits
Exhibit 10 Material contracts:
Exhibit 10.1 - Mark Twain Bancshares, Inc. 1983 Incentive Stock Option Plan, as amended 4/4/84, 2/11/87, 3/1/90 and 2/28/95 (incorporated by reference from exhibit 10 of the Registrant's Form 10-K for the year ended December 31, 1994).
Exhibit 10.2 - Mark Twain Bancshares, Inc. 1992 Stock Option Plan, as amended 2/28/95 (restated electronically herewith pursuant to Regulation S-T, Item 102).
Exhibit 10.3 - Mark Twain Bancshares, Inc. 1995 Stock Option Plan, as amended 1/12/96.
Exhibit 10.4 - Mark Twain Bancshares, Inc. Executive Benefit Plan, as amended and restated 7/1/83 (incorporated by reference from exhibit 10 of the Registrant's Form 10-K for the year ended December 31, 1994).
Exhibit 10.5 - First Amendment to Mark Twain Bancshares, Inc. Executive Benefit Plan dated 8/4/92 (incorporated by reference from exhibit 10 of the Registrant's Form 10-K for the year ended December 31, 1994).
Exhibit 10.6 - Second Amendment to Mark Twain Bancshares, Inc. Executive Benefit Plan dated 10/15/93 (incorporated by reference from exhibit 10 of the Registrant's Form 10-K for the year ended December 31, 1994).
Exhibit 10.7 - Third Amendment to Mark Twain Bancshares, Inc. Executive Benefit Plan dated 10/15/93 (incorporated by reference from exhibit 10 of the Registrant's Form 10-K for the year ended December 31, 1994).
Exhibit 10.8 - Supplemental Executive Retirement Plan for Joseph N. Millard (incorporated by reference from exhibit 10 of the Registrant's Form 10-K for the year ended December 31, 1994).
Exhibit 10.9 - Form of Employment Agreements (incorporated by reference from exhibit 10 of the Registrant's Form 10-K for the year ended December 31, 1994):
The initial term of the Employment Agreements offered was for either 12, 18, or 24 months. The initial terms of the Employment Agreements offered to Executive Officers named in Part I of this Form were as follows:
Initial Term of 24 months - Alvin Siteman, John P. Dubinsky, Peter F. Benoist, Keith Miller, W. Thomas Reeves and Frederick E. Zimmer.
Initial Term of 18 months - Sandra Friedman Burnham, Nancy E. Graves, Timothy C. Peterson, Carl A. Wattenberg, Jr. and Thomas R. Wickenhauser.
Initial Term of 12 months - Kevin J. Cody.
Exhibit 11 - Computation of Earnings Per Share.
Exhibit 13 - Portions of Mark Twain Bancshares, Inc.'s Annual Report to Shareholders for the year ended December 31, 1995.
Exhibit 21 - Subsidiaries of Mark Twain Bancshares, Inc.
Exhibit 23 - Consent of Independent Auditors.
Exhibit 27 - Financial Data Schedule.
Exhibit 99 - The Company's Proxy Statement dated March 18, 1996 for the Annual Meeting to be held April 23, 1996.
(b) Reports on Form 8-K:
The Company filed a Form 8-K dated October 12, 1995 announcing earnings for the three and nine month periods ending September 30, 1995. The Company filed a Form 8-K dated January 16, 1996 announcing earnings for the three and twelve month periods ended December 31, 1995.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Bancshares has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized, in the County of St. Louis, and the State of Missouri, on the 20th day of March, 1996.
MARK TWAIN BANCSHARES, INC.
/s/ JOHN P. DUBINSKY ------------------------------------- John P. Dubinsky President and Chief Executive Officer (Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1934, this report has been signed below by the following persons in the capacities and on the date indicated.