ITEM 1. BUSINESS
General USBANCORP, Inc. (the "Company") is a registered bank holding company organized under the Pennsylvania Business Corporation Law and is registered under the Bank Holding Company Act of 1956, as amended (the "BHCA.") The Company became a holding company upon acquiring all of the outstanding shares of United States National Bank in Johnstown ("U.S. Bank") on January 5, 1983. The Company also acquired all of the outstanding shares of Three Rivers Bank and Trust Company ("Three Rivers Bank") in June 1984, McKeesport National Bank ("McKeesport Bank") in December 1985 (which was subsequently merged into Three Rivers Bank), Community Bancorp, Inc. (whose sole direct subsidiary is Community Savings Bank) in March 1992, and Johnstown Savings Bank ("JSB") in June 1994 (which was immediately merged into U.S. Bank). Immediately following the acquisition of JSB, U.S. Bank caused the intracompany transfer by Standard Mortgage Corporation of Georgia, a wholly-owned subsidiary of JSB, of all its assets, subject to all of its liabilities, to SMC Acquisition Corporation, an indirect subsidiary of Community. SMC Acquisition Corporation was renamed Standard Mortgage Corporation of Georgia and is a mortgage banking company organized under the laws of the State of Georgia that originates, sells, and services residential mortgage loans. In addition, the Company formed United Bancorp Life Insurance Company ("United Life") in October 1987, USBANCORP Trust Company (the "Trust Company") in October 1992, and UBAN Associates, Inc. ("UBAN Associates"), in January 1997. UBAN Associates is a registered investment advisory firm that administers investment portfolios, offers operational support systems and provides asset and liability services to small and mid-sized community banks. The Company's principal activities consist of owning and operating its six wholly-owned subsidiary entities. At December 31, 1996, the Company had, on a consolidated basis, total assets, deposits, and shareholders' equity of $2.09 billion, $1.14 billion and $152 million, respectively. The Company and the subsidiary entities derive substantially all their income from banking and bank-related services. The Company functions primarily as a coordinating and servicing unit for its subsidiary entities in general management, credit policies and procedures, accounting and taxes, loan review, auditing, investment advisory, compliance, marketing, insurance risk management, general corporate services, and financial and strategic planning. The Company, as a bank holding company, is regulated under the BHCA, and is supervised by the Board of Governors of the Federal Reserve System (the "Board.") In general, the BHCA limits the business of bank holding companies to owning or controlling banks and engaging in such other activities as the Board may determine to be so closely related to banking or managing or controlling banks as to be a proper incident thereto.
USBANCORP Banking Subsidiaries: U.S. Bank U.S. Bank is a national banking association organized under the laws of the United States. Through 20 locations in Cambria, Clearfield, Somerset, and Westmoreland Counties, Pennsylvania, U.S. Bank conducts a general banking business.
It is a full-service bank offering (i) retail banking services, such as demand, savings and time deposits, money market accounts, secured and unsecured loans, mortgage loans, safe deposit boxes, holiday club accounts, collection services, money orders, and traveler's checks; (ii) lending, depository and related financial services to commercial, industrial, financial, and governmental customers, such as real estate-mortgage loans, short- and medium-term loans, revolving credit arrangements, lines of credit, inventory and accounts receivable financing, personal and commercial property lease financing, real estate-construction loans, business savings accounts, certificates of deposit, wire transfers, night depository, and lock box services; and (iii) credit card operations through MasterCard and VISA. U.S. Bank also operates 24 automated bank teller machines ("ATM"s) through its 24 Hour Banking Network which is linked with MAC, a regional ATM network and CIRRUS, a national ATM network. U.S. Bank's deposit base is such that loss of one depositor or a related group of depositors would not have a materially adverse effect on its business. In addition, the loan portfolio is also diversified so that one industry or group of related industries does not comprise a material portion of the loan portfolio. U.S. Bank's business is not seasonal nor does it have any risks attendant to foreign sources. Since U.S. Bank is federally chartered, it is subject to primary supervision of the Office of the Comptroller of the Currency. U.S. Bank is also subject to the regulations of the Board of Governors of the Federal Reserve Bank and the Federal Deposit Insurance Corporation. The following is a summary of key data (dollars in thousands) and ratios at December 31, 1996:
Headquarters Johnstown, PA Chartered 1933 Total Assets $1,212,670 (58.1% of the Company's total) Total Investment Securities $ 641,439 (64.0% of Company's total) Total Loans (net of unearned income) $ 489,439 (52.1% of the Company's total) Total Deposits $ 612,184 (53.8% of the Company's total) Total Net Income $ 12,978 (64.8% of the Company's total) Asset Leverage Ratio 6.91% 1996 Return on Average Assets 1.14% 1996 Return on Average Equity 13.20% Total Full-time Equivalent Employees 364 (48.0% of the Company's total) Number of Offices 20 (45.4% of the Company's total)
Three Rivers Bank Three Rivers Bank is a state bank chartered under the Pennsylvania Banking Code of 1965, as amended (the "Pennsylvania Banking Code.") Through 12 locations in Allegheny and Washington Counties, Pennsylvania, Three Rivers Bank conducts a general retail banking business consisting of granting commercial, consumer, construction, mortgage and student loans, and offering checking, interest bearing demand, savings and time deposit services.
It also operates 12 ATMs that are affiliated with MAC, a regional ATM network, and Plus System, a national ATM network. Three Rivers Bank also offers wholesale banking services to other banks, merchants, governmental units, and other large commercial accounts. Such services include balancing services, lock box accounts, and providing coin and currency. Three Rivers Bank has an arrangement with Statewide Security Transport, Inc. (which conducts business under the name of Landmark Security Transport) pursuant to which it also provides cash collection and deposit services to its customers. Three Rivers Bank's deposit base is such that loss of one depositor or a related group of depositors would not have a materially adverse effect on its business. In addition, the loan portfolio is also diversified so that one industry or group of related industries does not comprise a material portion of the loan portfolio. Three Rivers Bank's business is not seasonal nor does it have any risks attendant to foreign sources. As a state chartered, federally-insured bank and trust company which is not a member of the Federal Reserve System, Three Rivers Bank is subject to supervision and regular examination by the Pennsylvania Department of Banking and the Federal Deposit Insurance Corporation. Various federal and state laws and regulations govern many aspects of its banking operations. The following is a summary of key data (dollars in thousands) and ratios at December 31, 1996:
Headquarters McKeesport, PA Chartered 1965 Total Assets $476,164 (22.8% of the Company's total) Total Investment Securities $223,070 (22.3% of Company's total) Total Loans (net of unearned income) $223,904 (23.8% of the Company's total) Total Deposits $295,225 (25.9% of the Company's total) Total Net Income $ 5,815 (29.0% of the Company's total) Asset Leverage Ratio 6.44% 1996 Return on Average Assets 1.37% 1996 Return on Average Equity 20.21% Total Full-time Equivalent Employees 185 (24.4% of the Company's total) Number of Offices 12 (27.3% of the Company's total)
Community In March 1992, USBANCORP acquired Community Bancorp, Inc., which subsequently became a bank holding company regulated under the BHCA and supervised by the Federal Reserve Board, and its sole direct subsidiary, Community Savings Bank ("Community.") Community is a state savings bank chartered under the Pennsylvania Banking Code. Community currently conducts its banking operation through 12 locations in Allegheny, Washington, and Westmoreland counties, Pennsylvania. Traditionally, Community originated and held fixed-rate residential mortgage loans that were funded primarily by certificates of deposit and offered a few fee-based services.
Under the direction of personnel transferred to Community from U.S. Bank and Three Rivers Bank, Community expanded its product offerings through the introduction of commercial lending and expanded consumer lending and deposit gathering in order to position itself as a full-service community bank. As part of the Community acquisition, USBANCORP acquired Community's direct subsidiaries: Community First Capital Corporation (a special purpose finance subsidiary), Community First Financial Corporation (a subsidiary engaged in real estate joint ventures with assets totalling $1.1 million), and Frontier Consumer Discount Company (Frontier Consumer Discount Company was subsequently sold in March 1995). Additionally, as part of the JSB acquisition on June 30, 1994, Standard Mortgage Corporation became a direct subsidiary of Community as a result of the intra-company purchase of all its assets, subject to all its liabilities. Standard Mortgage Corporation is a mortgage banking company that originates, sells, and services residential mortgage loans. In accordance with Federal Reserve policy, USBANCORP has committed to divest its equity investment in Community First Financial Corporation by March 24, 1997, or such longer period as the Federal Reserve Board may approve. Community's deposit base is such that loss of one depositor or a related group of depositors would not have a materially adverse effect on its business. In addition, the loan portfolio contains a high portion of residential mortgage and consumer loans that have less credit risk associated with them. The loan portfolio is also diversified so that one industry or group of related industries does not comprise a material portion of the loan portfolio. Community's business is not seasonal nor does it have any risks attendant to foreign sources. As a Pennsylvania-chartered, federally-insured savings bank that is not a member of the Federal Reserve System, Community Savings Bank is subject to supervision and regular examination by the Pennsylvania Department of Banking and the FDIC. Various federal and state laws and regulations also govern many aspects of its banking and bank-related operations. The following is a summary of key data (dollars in thousands) and ratios at December 31, 1996:
Headquarters Monroeville, PA Chartered 1890 Total Assets $397,725 (19.1% of the Company's total) Total Investment Securities $134,690 (13.4% of Company's total) Total Loans (net of unearned income) $226,383 (24.1% of the Company's total) Total Deposits $234,112 (20.6% of the Company's total) Total Net Income $ 2,215 (11.1% of the Company's total) Asset Leverage Ratio 6.65% 1996 Return on Average Assets (excluding SAIF charge) 0.90% 1996 Return on Average Equity (excluding SAIF charge) 12.93% Total Full-time Equivalent Employees 156 (20.6% of the Company's total) Number of Offices 12 (27.3% of the Company's total)
USBANCORP Non-Banking Subsidiaries: United Life United Life is a captive insurance company organized under the laws of the State of Arizona. United Life engages in underwriting as reinsurer of credit life and disability insurance within the Company's six county market area. Operations of United Life are conducted in each office of the Company's banking subsidiaries. United Life is subject to supervision and regulation by the Arizona Department of Insurance, the Insurance Department of the Commonwealth of Pennsylvania, and the Board of Governors of the Federal Reserve Bank. At December 31, 1996, United Life had total assets of $1.7 million and total shareholder's equity of $865,000.
USBANCORP Trust Company USBANCORP Trust Company is a trust company organized under Pennsylvania law in October 1992. USBANCORP Trust Company was formed to consolidate the trust functions of U.S. Bank and Three Rivers Bank and to increase market presence. As a result of this formation, the Trust Company now offers a complete range of trust services through each of the Company's subsidiary banks. At December 31, 1996, USBANCORP Trust Company had $1.16 billion in assets under management which included both discretionary and non-discretionary assets.
Executive Officers Information relative to current executive officers of the Company or its subsidiaries is listed in the following table:
Name Age Office with USBANCORP,Inc. and/or Subsidiary Terry K. Dunkle 55 Chairman, President & Chief Executive Officer of USBANCORP, Inc., and Chairman of U.S. Bank, Three Rivers Bank, Community Bancorp, Inc., and USBANCORP Trust Company
Orlando B. Hanselman 37 Executive Vice President of USBANCORP, Inc., and President & Chief Executive Officer of U.S. Bank
W. Harrison Vail 56 President & Chief Executive Officer of Three Rivers Bank, and President & Chief Executive Officer of Community Bancorp, Inc., and Community Savings Bank
Ronald W. Virag, CFTA 51 President & Chief Executive Officer, USBANCORP Trust Company
Kevin J. O'Neil 59 President & Chief Executive Officer, Standard Mortgage Corporation of Georgia
Mr. Dunkle succeeded Clifford A. Barton in February 1994, as Chairman, President and Chief Executive Officer of USBANCORP. In April 1988, Mr. Dunkle was appointed as President and Chief Executive Officer of U.S. Bank and Executive Vice President and Secretary of USBANCORP. Mr. Dunkle served the five previous years as Executive Vice President of Commonwealth National Bank in Harrisburg, Pennsylvania. Mr. Hanselman joined U.S. Bank in January 1987 as Vice President and Chief Financial Officer and was appointed Executive Vice President in February 1994. In May 1995, Mr. Hanselman was awarded the expanded responsibility of President and Chief Executive Officer of U.S. Bank. Mr. Vail has been President and Chief Executive Officer of Three Rivers Bank since January 1985. In May 1995, he was awarded the additional responsibility of President and Chief Executive Officer of Community Savings Bank. He joined Three Rivers Bank as President on August 1, 1984. Mr. Virag was appointed as President and Chief Executive Officer of USBANCORP Trust Company in November 1994.
Prior to joining the Trust Company, Mr. Virag served as Senior Vice President and head of the trust group for Bank One in Charleston, West Virginia. Mr. O'Neil is President and Chief Executive Officer of Standard Mortgage Corporation of Georgia, a wholly-owned mortgage banking subsidiary of Community Savings Bank. Mr. O'Neil joined the Company through the acquisition of JSB, and has 27 years of mortgage banking experience. Monetary Policies Commercial banks are affected by policies of various regulatory authorities including the Federal Reserve System. An important function of the Federal Reserve System is to regulate the national supply of bank credit. Among the instruments of monetary policy used by the Board of Governors are: open market operations in U.S. Government securities, changes in the discount rate on member bank borrowings, and changes in reserve requirements on bank deposits. These means are used in varying combinations to influence overall growth of bank loans, investments, and deposits, and may also affect interest rate charges on loans or interest paid for deposits. The monetary policies of the Board of Governors have had a significant effect on the operating results of commercial banks in the past and are expected to continue to do so in the future. In view of changing conditions in the national economy and the money markets (as well as the effect of actions by monetary and fiscal authorities including the Board of Governors), no prediction can be made as to possible future changes in interest rates, deposit levels or loan demand, or as to the impact of such changes on the business and earnings of the Company and its subsidiary entities.
Competition The subsidiary entities face strong competition from other commercial banks, savings banks, savings and loan associations, and several other financial or investment service institutions for business in the communities they serve. Several of these institutions are affiliated with major banking and financial institutions, such as Mellon Bank Corporation and PNC Financial Corporation, which are substantially larger and have greater financial resources than the subsidiary entities. As the financial services industry continues to consolidate, the scope of potential competition affecting the subsidiary entities will also increase. For most of the services that the subsidiary entities perform, there is also competition from credit unions and issuers of commercial paper and money market funds. Such institutions, as well as brokerage houses, consumer finance companies, factors, insurance companies, and pension trusts, are important competitors for various types of financial services. In addition, personal and corporate trust investment counseling services are offered by insurance companies, other firms, and individuals.
Market Area The Company, headquartered in Johnstown, Pennsylvania, operates through 44 branch offices in six southwestern Pennsylvania counties with a combined population of approximately 2.2 million: Allegheny, Cambria, Clearfield, Somerset, Washington, and Westmoreland. The Company's largest subsidiary, U.S. Bank has 20 offices and a $1.2 billion asset presence primarily in the Greater Johnstown marketplace. Community Savings Bank and Three Rivers Bank have a combined 24 offices and an $874 million asset presence in the western region, largely comprised of the suburban Pittsburgh marketplace.
National economic forecasts for 1997 suggest growth within the two to three percent range. None of the major economic forces, government, business, or consumer, appear to have sufficient strength to push the Gross Domestic Product upward much beyond 3%. The Pennsylvania economy tends to parallel the national economy, but at a slower pace. The seasonally adjusted unemployment rate in Pennsylvania at December 1996 was 4.9%, compared with the seasonally adjusted December 1995 unemployment rate of 6.3%. The Greater Johnstown economy generally trails Pennsylvania and the nation; however, the seasonally adjusted unemployment rate for December 1996 was 7.1% compared with 9.5% for December 1995. Recent economic activity in the Johnstown region includes: Attracting new businesses and people to Johnstown will be the focus of the next three year phase of the city's recovery plan. The draft plan includes hiring an economic development coordinator, increasing participation with economic development groups, improving recreational opportunities, and revitalizing neighborhoods.
Bestform Foundations, Inc. has begun a $4 million expansion of its existing distribution center in Sidman. The project entails the construction of a two-level, 160,000 square foot addition. Employment is expected to grow from 67 workers to over 300 once the expanded facility becomes fully operational.
A Wal-Mart store may be opened on a 32-acre parcel adjacent to the Hills Plaza along Route 22 near Ebensburg. If this possibility becomes fact, it could create 300 to 500 jobs. The Lowe's Home Improvement Warehouse in Richland opened recently with great success. Shoppers like the competitive prices, longer hours, and more than 40,000 items. Many of the store's 200 employees were hired locally.
The merger of two Johnstown hospitals, Conemaugh Hospital and Good Samaritan, should pave the way for more advanced medical programs and extended community service projects. The area could save $30 million in medical costs over the next five years through the elimination of duplicate services, streamlined operations, and other money- saving factors.
As evidenced by the above, Greater Johnstown continues to shift from an over-reliance on heavy industry to a more diversified economy including more light manufacturing and service related businesses.
The Greater Pittsburgh region, where Three Rivers Bank and Community operate, correlates closely with the national economy; the seasonally adjusted unemployment rate for December 1996 was 4.5% compared with 6.2% for December 1995. The Company expects Pittsburgh to follow the national economy in a slow expansion over the next 12 months. Recent economic activity in the Pittsburgh region includes:
The U.S. Army plans to build a $30 million, 200,000 square foot command center for reservists near Pittsburgh's old airport. Economic development officials predict the move will mean millions to the local economy with out-of-state reservists spending their per-diem allowances at local hotels and restaurants.
West Penn Power is eliminating 600 employees as part of the company's plans to reduce its work force of 6,000 to 4,800 by the end of 1997. Roughly 400 of the 1,200 jobs to be cut over the next 18 months will be eliminated through attrition.
Recently, the federal government approved $650 million in improvements to three locks and dams on the Monongahela River; this construction will position local waterways for new economic growth. Another $270 million of work on the Gray's Landing and Point Marion locks and dams is nearly completed. The changes will bolster an industry that supports more than 38,000 local jobs.
CityLink Airlines, Inc. a new low-fare carrier, plans to start passenger service from Pittsburgh to Dallas, Minneapolis, Newark, and Chicago. With government approval, CityLink could fill a void at Pittsburgh International Airport, where USAir accounts for 80% of passenger traffic. CityLink will use $15 million of private financing and employ 300 people.
The Pittsburgh economy is generally well diversified. The Company believes that the state and regional economies will continue this diversification throughout 1997 and remain in a slow positive expansion period. Consequently, the Company's marketplace should continue to display modest growth.
Employees The Company employed approximately 860 persons as of December 31, 1996, in full- and part-time positions. Approximately 265 non-supervisory employees of U.S. Bank are represented by a union. U.S. Bank and such employees are parties to a labor contract pursuant to which employees have agreed not to engage in any work stoppage during the term of the contract which will expire on October 15, 1999. U.S. Bank has not experienced a work stoppage since 1979. The Company successfully negotiated a four-year collective bargaining agreement with the local union which took effect October 16, 1995, see Other Matters-Collective Bargaining Agreement in the M.D.&A. for a complete discussion on that contract.
Commitments and Lines of Credit The Company's banking subsidiaries are obligated under commercial, standby, and trade-related irrevocable letters of credit aggregating $8.5 million at December 31, 1996. In addition, the subsidiary banks have issued lines of credit to customers generally for periods of up to one year. Borrowings under such lines of credit are usually for the working capital needs of the borrower. At December 31, 1996, the Company's banking subsidiaries had unused loan commitments of approximately $256.2 million.
Statistical Disclosures for Bank Holding Companies Certain information regarding statistical disclosure for bank holding companies pursuant to Guide 3 is provided in the 1996 Annual Report to Shareholders and such pages are incorporated herein by reference. The remaining Guide 3 information is included in this Form 10-K as listed below:
I. Distribution of Assets, Liabilities, and Stockholders' Equity; Interest Rates and Interest Differential Information. This section is presented on pages 57, 58, 67, 68, and 69.
II. Investment Portfolio Information required by this section is presented on pages 26, 27, 28, 82, and 83.
III. Loan Portfolio Information required by this section appears on pages 29, 30, 83, 84, and 85.
IV. Summary of Loan Loss Experience Information required by this section is presented on pages 29, 60, 61, and 62.
V. Deposits Information required by this section follows on pages 31 and 85.
VI. Return on Equity and Assets Information required by this section is presented on page 49.
VII. Short-Term Borrowings Information required by this section is presented on page 31.
Investment Portfolio Effective January 1, 1994, the Company adopted Statement of Financial Accounting Standards ("SFAS") 115, "Accounting for Certain Investments in Debt and Equity Securities." This statement addresses the accounting and reporting for investments in equity securities that have readily determinable fair values and for all investments in debt securities. Investment securities held to maturity are carried at amortized cost while investment securities classified as available for sale are reported at fair value. At December 31, 1996, approximately 55% of the portfolio was categorized as held to maturity and 45% as available for sale. The following table sets forth the book and market value of USBANCORP's investment portfolio as of the periods indicated:
Investment Securities Available for Sale at December 31 1996 1995 1994 (In thousands) Book Value: U.S. Treasury $ 10,934 $ 22,431 $ 23,411 U.S. Agency 4,224 12,408 31,372 State and municipal 21,772 58,698 1,479 Mortgage-backed securities 382,384 296,669 175,215 Other securities 35,880 30,869 37,087 Total book value of investment securities available for sale $455,194 $421,075 $268,564 Total market value of investment securities available for sale $455,890 $427,112 $259,462
Investment Securities Held to Maturity at December 31 1996 1995 1994 (In thousands) Book Value: U.S. Treasury $ 10,198 $ 796 $ 398 U.S. Agency 27,468 31,512 35,879 State and municipal 110,287 97,900 125,489 Mortgage-backed securities 395,199 330,312 360,146 Other securities 3,166 3,431 2,726 Total book value of investment securities held to maturity $546,318 $463,951 $524,638 Total market value of investment securities held to maturity $549,427 $471,191 $501,485
The total securities portfolio increased by approximately $111 million between December 31, 1995, and December 31, 1996, and by $107 million between year end 1994 and year-end 1995. This growth in both years resulted from increased balance sheet leveraging in an effort to improve return on equity performance. The securities portfolio growth occurred primarily in mortgage-backed securities and municipal securities. Adjustable-rate securities were also purchased to increase the repricing sensitivity of the Company's earning assets as part of ongoing asset/liability management strategies. The increased purchase of municipal securities over this period was a key factor contributing to the drop in the Company's effective tax rate from 34.4% in 1994 to 26.6% in 1996. At December 31, 1996, investment securities having a book value of $371.7million were pledged as collateral for public funds and other purposes as required by law. The Company and its subsidiaries, collectively, did not hold securities of any single issuer, excluding U.S. Treasury and U.S. Agencies, that exceeded 10% of shareholders' equity at December 31, 1996. Maintaining investment quality is a primary objective of the Company's investment policy which, subject to certain minor exceptions, prohibits the purchase of any investment security below a Moody's Investor Service or Standard & Poor's rating of "A." At December 31, 1996, 98.7% of the portfolio was rated "AAA" and 98.8% was rated at least "AA" as compared to 97.5% and 97.9%, respectively, at December 31, 1995. Only 1.0% was rated below "A" or unrated at December 31, 1996.
Loan Portfolio The following table sets forth the Company's loans by major category as of the dates set forth below:
Total loans, net of unearned income, increased by $95.5 million, or 11.5%, between December 31, 1995, and December 31, 1996. This growth occurred in commercial mortgage loans which increased by $86.9 million, or 48.3%, and commercial loans which grew by $34.5 million, or 33.3%. The higher loan totals in both commercial categories resulted from increased production from both middle market and small business lending (loans less than $250,000). This improved new loan production was due primarily to more effective sales efforts which have included an intensive customer calling program and canvassing of small commercial businesses. During 1996 in its first full year of operation, the Company's small business loan center approved 688 applications for $40 million and closed 401 loans for $27 million with an average approval time of 48 hours. Middle market loan originations exceeded $200 million in 1996.
Total residential mortgage loans were relatively flat between years as growth in adjustable-rate mortgage loans was more than offset by principal amortization in the existing fixed-rate mortgage loan portfolio. The Company is also selling all new 30 year fixed-rate mortgage product to assist in asset/liability positioning and to reduce the Company's overall dependence on residential mortgage loans. Total consumer loans declined by $22.8 million, or 17.0%, due to continued net run-off in the indirect auto loan portfolio. This indirect auto loan run-off has more than offset improved production of higher yielding direct consumer loans from the Company's branch offices which for 1996 were $14 million, or 40%, greater than 1995. Total loans, net of unearned income, declined by $20.5 million or 2.4% between December 31, 1994, and December 31, 1995. Total real estate mortgage loans increased by $7.8 million or 1.9% due to the generation of $44.5 million of adjustable-rate mortgage loans in the suburban Atlanta, Georgia market by SMC. These new adjustable-rate mortgage loans more than offset $34 million of fixed-rate mortgage loans sold in the first quarter of 1995 as part of a balance sheet repositioning strategy. Total commercial loans decreased by $13.2 million due to the maturity of $20 million of commercial loan tax anticipation notes which were not replaced. Consumer loans dropped by $27.8 million or 17.2% due to net loan run-off experienced in the indirect auto loan portfolio and a $5 million reduction resulting from the disposition of a business line. Total commercial mortgage loans grew by $11.6 million or 6.9% due primarily to a refocused emphasis on small business commercial lending (loans less than $250,000). During the last six months of 1995, the Company's small business loan center approved 219 applications for $14 million and closed 133 loans for $8.5 million. The amount of loans outstanding by category as of December 31, 1996, which are due in (i) one year or less, (ii) more than one year through five years, and(iii) over five years, are shown in the following table. Loan balances are also categorized according to their sensitivity to changes in interest rates.
The loan maturity information is based upon original loan terms and is not adjusted for principal paydowns and "rollovers." In the ordinary course of business, loans maturing within one year may be renewed, in whole or in part, as to principal amount at interest rates prevailing at the date of renewal.
At December 31, 1996, 64.1% of total loans were fixed-rate compared to 64.9% at December 31, 1995. This reduced dependence on fixed-rate loans reflects the success of several ongoing strategies which included: the generation of adjustable-rate mortgage loans in the suburban Atlanta, Georgia market and the ongoing sale of 30 year fixed-rate residential mortgage loans. As a result of these strategies, the percentage of the loan portfolio classified as floating rate grew to 35.9% at December 31, 1996. For additional information regarding interest rate sensitivity, see "Management's Discussion and Analysis of Consolidated Financial Condition and Results of Operations-Interest Rate Sensitivity."
Deposits The following table sets forth the average balance of the Company's deposits and the average rates paid thereon for the past three calendar years:
The Company's average deposits decreased by $37.2 million, or 3.1%, in 1996. This drop in deposits reflects management's application of a consistent pricing strategy which emphasizes profitable net interest margin management rather than increased deposit size. Customer movement toward mutual funds due to the strong returns offered by these products in a rising stock market also contributed to the deposit decline. The drop in deposits occurred in all major categories except non-interest bearing demand deposit accounts. The growth in this product reflects the success of new business generated in conjunction with the increased commercial lending activity. The following table indicates the maturities and amounts of certificates of deposit issued in denominations of $100,000 or more as of December 31, 1996:
Maturing in: (In thousands) Three months or less $23,261 Over three through six months 4,568 Over six through twelve months 4,140 Over twelve months 4,917 Total $36,886
ITEM 2.
ITEM 2. PROPERTIES The principal offices of the Company and U.S. Bank occupy a five-story building at the corner of Main and Franklin Streets in Johnstown plus several floors of the building adjacent thereto. The Company occupies the main office and its subsidiary entities have 34 other locations which are owned in fee. Fourteen additional locations are leased with terms expiring from March 31, 1998, to December 31, 2005.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS The Company is subject to a number of asserted and unasserted potential legal claims encountered in the normal course of business. In the opinion of both management and legal counsel, there is no present basis to conclude that the resolution of these claims will have a material adverse effect on the Company's consolidated financial position or results of operations.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matter was submitted by the Company to its shareholders through the solicitation of proxies or otherwise during the fourth quarter of the fiscal year covered by this report.
PART II ITEM 5.
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS Information relating to the Company's Common Stock is presented on pages 37 and 48. As of January 31, 1997, the Company had 6,242 shareholders of its Common Stock.
ITEM 6.
ITEM 6. SELECTED CONSOLIDATED FINANCIAL DATA Information required by this section is presented on page 49.
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF CONSOLIDATED FINANCIAL CONDITION AND RESULTS OF OPERATIONS Information required by this section is presented on pages 51 to 71.
ITEM 8.
ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Information required by this section is presented on pages 17 to 44.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable for the years presented.
PART III ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT Information required by this section relative to Directors of the Registrant is presented in the Proxy Statement for the Annual Meeting of Shareholders. Executive officer information has been provided in Item 1.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION Information required by this section is presented in the Proxy Statement for the Annual Meeting of Shareholders.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT Information required by this section is presented in the Proxy Statement for the Annual Meeting of Shareholders.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS Information required by this section is presented in the Proxy Statement for the Annual Meeting of Shareholders.
PART IV ITEM 14.
ITEM 14. EXHIBITS, CONSOLIDATED FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K Consolidated Financial Statements Filed: The consolidated financial statements listed below are from the 1996 Annual Report to Shareholders and Part II - Item 8. Page references are to said Annual Report.
Consolidated Financial Statements: USBANCORP, Inc. and Subsidiaries Consolidated Balance Sheet, 17 Consolidated Statement of Income, 18 Consolidated Statement of Changes in Stockholders'Equity, 19 Consolidated Statement of Cash Flows, 20 Notes to Consolidated Financial Statements, 23 Statement of Management Responsibility, 45 Report of Independent Public Accountants, 46
Consolidated Financial Statement Schedules: These schedules are not required or are not applicable under Securities and Exchange Commission accounting regulations and therefore have been omitted.
Reports on Form 8-K: There were no reports on Form 8-K for the quarter ended December 31, 1996.
Exhibits: The exhibits listed below are filed herewith or to other filings.
Exhibit Prior Filing or Exhibit Number Description Page Number Herein
3.1 Articles of Incorporation, as amended on February 24, 1995. Exhibit III, Part II to Form S-14 File No. 2-79639 Exhibit 4.2 to Form S-2 File No. 33-685 Exhibit 4.3 to Form S-2 File No. 33-685 Exhibit 4.1 to Form S-3 File No. 33-56604
3.2 Bylaws, as amended and restated on February 24, 1995. Exhibit IV, Part II to Form S-14 File No. 2-79639 Exhibit 3.2
4.1 Rights Agreement, dated as of February 24, 1995, between USBANCORP, Inc. and USBANCORP Trust Company, as Rights Agent. Exhibit 1 to Form 8-A Dated March 1, 1995
10.2 Agreement, dated June 22, 1994, between USBANCORP, Inc. and Terry K. Dunkle. Exhibit 10.2 to 1994 Form 10-K Filed March 22, 1995
10.3 Agreement, dated October 25, 1994, between USBANCORP, Inc. and W. Harrison Vail. Exhibit 10.3 to 1994 Form 10-K Filed March 22, 1995
10.6 Loan Agreement, dated March 26, 1992, between USBANCORP, Inc. and Pittsburgh National Bank. Exhibit 10.6 to Form S-2 File No. 33-56684
10.7 Agreement, dated October 25, 1994, between USBANCORP, Inc. and Orlando B. Hanselman. Exhibit 10.7 to 1994 Form 10-K Filed March 22, 1995
10.8 1991 Stock Option Plan, dated August 23, 1991, as amended and restated on February 24, 1995. Exhibit 10.8 to 1994 Form 10-K Filed March 22, 1995
10.9 Agreement, dated December 1, 1994, between USBANCORP, Inc. and Ronald W. Virag. Exhibit 10.9 to 1994 Form 10-K Filed March 22, 1995
10.10 Agreement, dated July 15, 1994, between USBANCORP, Inc. and Kevin J. O'Neil. Exhibit 10.10 to 1994 Form 10-K Filed March 22, 1995
10.11 Collective Bargaining Agreement, dated October 16, 1995, between United States National Bank in Johnstown and Steel Workers of America, AFL-CIO-CLC Local Union 8204. Exhibit 10.1 to Form 8-K/A Dated March 1, 1996
13 1996 Annual Report to Shareholders. Page 1
22 Subsidiaries of the Registrant. Below
24.1 Consent of Arthur Andersen LLP.
EXHIBIT A
(22) Subsidiaries of the Registrant
Percent Jurisdiction Name of Ownership of Organization
United States National Bank in Johnstown Main and Franklin Streets P.O. Box 520 Johnstown, PA 15907 100% United States of America
Three Rivers Bank and Trust Company 633 State Route 51, South Jefferson Borough P.O. Box 10915 Pittsburgh, PA 15236 100% Commonwealth of Pennsylvania
Community Bancorp, Inc. 2681 Moss Side Boulevard Monroeville, PA 15146 100% Commonwealth of Pennsylvania
United Bancorp Life Insurance Company 1421 East Thomas Road Phoenix, AZ 85014 100% State of Arizona
USBANCORP Trust Company Main and Franklin Streets P.O. Box 520 Johnstown, PA 15907 100% Commonwealth of Pennsylvania
UBAN Associates, Inc. 110 Regent Court, Suite 104 State College, PA 16801 100% Commonwealth of Pennsylvania
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.
USBANCORP, Inc. (Registrant)
Date: February 28, 1997 By:/s/Terry K. Dunkle TERRY K. DUNKLE Chairman, President and Chief Executive Officer
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 indicated on February 28, 1997:
/s/Terry K. Dunkle TERRY K. DUNKLE Chairman, President and Chief Executive Officer; Director
/s/Orlando B. Hanselman ORLANDO B. HANSELMAN Executive Vice President, Chief Financial Officer Officer
/s/Jerome M. Adams JEROME M. ADAMS, Director
/s/Clifford A. Barton CLIFFORD A. BARTON, Director
/s/Michael F. Butler MICHAEL F. BUTLER, Director
/s/James C. Dewar JAMES C. DEWAR, Director
/s/James M. Edwards, Sr. JAMES M. EDWARDS, SR., Director
/s/Richard W. Kappel RICHARD W. KAPPEL, Director
JOHN H. KUNKLE, JR., Director
/s/James F. O'Malley JAMES F. O'MALLEY, Director
/s/Frank J. Pasquerilla FRANK J. PASQUERILLA, Director
/s/Jack Sevy JACK SEVY, Director
/s/Thomas C. Slater THOMAS C. SLATER, Director
/s/James C. Spangler JAMES C. SPANGLER, Director
/s/W. Harrison Vail W. HARRISON VAIL, Director
/s/Robert L. Wise ROBERT L. WISE, Director
USBANCORP, INC.
DIRECTORS, GENERAL OFFICERS, AND ADVISORY BOARD COMMUNITY OFFICES SHAREHOLDER INFORMATION Divider page
USBANCORP, INC. Board of Directors
Jerome M. Adams Senior Partner, Adams, Myers & Baczkowski Attorneys-at-Law
Clifford A. Barton Retired; Former Chairman, President & CEO, USBANCORP, Inc., and Chairman of the Board of United States National Bank, Three Rivers Bank & Trust Company, Community Bancorp, Inc., and USBANCORP Trust Company
Michael F. Butler Business Consultant & Attorney-at-Law
James C. Dewar President & Owner, Jim Dewar Oldsmobile, Inc.
Terry K. Dunkle Chairman, President & CEO, USBANCORP, Inc., and Chairman of the Board of United States National Bank, Three Rivers Bank & Trust Company, Community Bancorp, Inc., and USBANCORP Trust Company
James M. Edwards, Sr. President & CEO, WJAC, Inc.
Richard W. Kappel Retired CEO, Secretary & Treasurer, Wm. J. Kappel Wholesale Co.
John H. Kunkle, Jr. Retired; Former Vice-Chairman & Director, Commonwealth Land Title Insurance Co.
James F. O'Malley Senior Lawyer, Yost & O'Malley Attorneys-at-Law
Frank J. Pasquerilla Chairman of the Board & CEO, Crown American Realty Trust
Jack Sevy Retired; Former Owner & Operator, New Stanton West Auto/Truck Plaza
Thomas C. Slater Owner, President & Director, Slater Laboratories, Inc. Clinical Laboratory
James C. Spangler Retired; Former Owner, Somerset Auction and Transfer, Inc.
W. Harrison Vail President & CEO, Three Rivers Bank & Trust Company, Community Bancorp, Inc., and Community Savings Bank
Robert L. Wise President, GPU Generation, Inc.
General Officers
Terry K. Dunkle Chairman, President & Chief Executive Officer
Orlando B. Hanselman Executive Vice President
Gary M. McKeown Senior Vice President, Manager of Credit Policy and Administration & Assistant Secretary
Dan L. Hummel Senior Vice President & Marketing Director
Jeffrey A. Stopko, CPA Senior Vice President & Chief Financial Officer
John Suierveld, Jr. Senior Vice President & Chief Auditor
Ray M. Fisher Vice President & Chief Investment Officer
John H. Follansbee, III Vice President, Compliance
John J. Legath Vice President, CRA/Community Development
Leslie N. Morgenstern Vice President & Manager, Loan Review
James E. Vennebush Vice President & Manager, General Services
Betty L. Jakell Secretary
U.S. BANK
Board of Directors
Clifford A. Barton Retired; Former Chairman, President & CEO, USBANCORP, Inc., and Chairman of the Board of United States National Bank, Three Rivers Bank & Trust Company, Community Bancorp, Inc., and USBANCORP Trust Company
Michael F. Butler Business Consultant & Attorney-at-Law
William F. Casey CEO, Conemaugh Health Systems, Inc.
Daniel R. DeVos President and CEO, Concurrent Technologies Corporation
James C. Dewar President & Owner, Jim Dewar Oldsmobile, Inc.
Bruce E. Duke III, M.D. Surgeon, Valley Surgeons
Terry K. Dunkle Chairman, President & CEO, USBANCORP, Inc., and Chairman of the Board of United States National Bank, Three Rivers Bank & Trust Company, Community Bancorp, Inc., and USBANCORP Trust Company
James M. Edwards, Sr. President & CEO, WJAC, Inc.
Orlando B. Hanselman President & CEO, United States National Bank, and Executive Vice President, USBANCORP, Inc.
Kim W. Kunkle President & CEO, Laurel Holding Company
Rev. Christian R. Oravec President, St. Francis College
Frank J. Pasquerilla Chairman of the Board & CEO, Crown American Realty Trust
Howard M. Picking, III President, Miller-Picking Corporation
Sara A. Sargent President, The Sargent's Group
Fred R. Shaffer Senior Pharmacist/Director, Findley's Pharmacy, Inc.
Thomas C. Slater Owner, President & Director, Slater Laboratories, Inc. Clinical Laboratory
James C. Spangler Retired; Former Owner, Somerset Auction and Transfer, Inc.
Robert L. Wise President, GPU Generation, Inc.
General Officers
Terry K. Dunkle Chairman of the Board
Orlando B. Hanselman President & Chief Executive Officer
Leo J. Fronczek Senior Vice President, Management Information Systems & Security Officer
Jeryl L. Graham Senior Vice President, Lending & Leasing
Robert S. Berezansky Vice President & Commercial Loan Officer
James S. Bubenko Vice President & Manager of Retail Credit Operations
Wayne A. Kessler Vice President, Community Banking
Michael F. Komara Vice President, Human Resources
Frank A. Krall Vice President, Mortgage Lending
Timothy D. McDonald Vice President, Life Insurance and Annuities
Mark D. Shelhammer Vice President, Community Banking
Victor L. Tatum Vice President & Commercial Equipment Leasing Manager
Directors Emeriti John N. Crichton John L. Williams
Advisory Board
Orlando B. Hanselman, Chairman
Dr. Frank H. Blackington, III Edward J. Cernic Teresa T. Chianese David N. Crichton John M. Kriak David J. Rizzo Carl R. Sax Fred R. Shaffer James C. Spangler John B. Stockton
THREE RIVERS BANK
Board of Directors
Jerome M. Adams Senior Partner, Adams, Myers, & Baczkowski Attorneys-at-Law
Clifford A. Barton Retired; Former Chairman, President & CEO, USBANCORP, Inc., and Chairman of the Board of United States National Bank, Three Rivers Bank & Trust Company, Community Bancorp, Inc., and USBANCORP Trust Company
Janey D. Barton Retired; Vice President, Three Rivers Bank & Trust Company
Terry K. Dunkle Chairman, President & CEO, USBANCORP, Inc., and Chairman of the Board of United States National Bank, Three Rivers Bank & Trust Company, Community Bancorp, Inc., and USBANCORP Trust Company
J. Terrence Farrell Attorney-at-Law
James R. Ferry President, Ferry Electric Company Electrical Contractor
Stephen I. Richman Senior Partner, Ceisler, Richman, Smith Law Firm
Jack Sevy Retired; Former Owner & Operator, New Stanton West Auto/Truck Plaza
W. Harrison Vail President & CEO, Three Rivers Bank & Trust Company
General Officers
Terry K. Dunkle Chairman of the Board
W. Harrison Vail President & Chief Executive Officer
Louis S. Klippa Executive Vice President, Chief Operating Officer & Secretary
Harry G. King Senior Vice President, Community Banking
Vincent W. Locher Senior Vice President & Chief Commercial Loan Officer
James F. Ackman Vice President, Consumer Loans
Robert J. DeGrazia Vice President, Information Systems
Patricia M. Smarra Vice President & Operations Officer
Robert J. Smerker Vice President, Operations, Bank Secrecy Act Officer & Assistant Secretary
Mary Pat Soltis Vice President, Sales & Business Development
Hudson Stoner Vice President, Small Business Center
Directors Emeriti J. Paul Farrell William R. Hoag
COMMUNITY BANCORP, INC.
Board of Directors
Clifford A. Barton Retired; Former Chairman, President & CEO, USBANCORP, Inc., and Chairman of the Board of United States National Bank, Three Rivers Bank & Trust Company, Community Bancorp, Inc., and USBANCORP Trust Company
Terry K. Dunkle Chairman, President & CEO, USBANCORP, Inc., and Chairman of the Board of United States National Bank, Three Rivers Bank & Trust Company, Community Bancorp, Inc., and USBANCORP Trust Company
Marylouise Fennell, RSM, Ed.D. Senior Consultant, Counsel of Independent Colleges
James R. Ferry President, Ferry Electric Company Electrical Contractor
Richard W. Kappel Retired; CEO, Secretary & Treasurer, Wm. J. Kappel Wholesale Co.
John H. Kunkle, Jr. Retired; Former Vice-Chairman & Director, Commonwealth Land Title Insurance Co.
Edward W. Seifert Attorney-at-Law, Partner, Reed, Smith, Shaw & McClay
W. Harrison Vail President & CEO, Community Bancorp, Inc. and Community Savings Bank
General Officers
Terry K. Dunkle Chairman of the Board W. Harrison Vail President & Chief Executive Officer
Thomas J. Chunchick Senior Vice President, Administrative, Secretary, Community Development Officer & Compliance Officer
Richard L. Barron Vice President, Human Resources
Fred Geisler Vice President, Mortgage Lending
USBANCORP TRUST COMPANY
Board of Directors
Jerome M. Adams Senior Partner, Adams, Myers & Baczkowski Attorneys-at-Law
Clifford A. Barton Retired; Former Chairman, President & CEO, USBANCORP, Inc., and Chairman of the Board of United States National Bank, Three Rivers Bank & Trust Company, Community Bancorp, Inc., and USBANCORP Trust Company
John N. Crichton Chairman, Concurrent Technologies Corporation
Terry K. Dunkle Chairman, President & CEO, USBANCORP, Inc., and Chairman of the Board of United States National Bank, Three Rivers Bank & Trust Company, Community Bancorp, Inc., and USBANCORP Trust Company
William M. George President, PA AFL-CIO
Orlando B. Hanselman Executive Vice President, USBANCORP, Inc., and President & CEO, United States National Bank
Richard W. Kappel CEO, Secretary & Treasurer, Wm. J. Kappel Wholesale Co.
John H. Kunkle, Jr. Retired; Former Vice Chairman & Director, Commonwealth Land Title Insurance Co.
Kim W. Kunkle President & CEO, Laurel Holding Company
Rev. Christian R. Oravec President, St. Francis College
W. Harrison Vail President & CEO, Three Rivers Bank & Trust Company, Community Bancorp, Inc., and Community Savings Bank
Ronald W. Virag, CTFA President & CEO, USBANCORP Trust Company
Robert L. Wise President, GPU Generation, Inc.
General Officers
Terry K. Dunkle Chairman of the Board
Ronald W. Virag, CTFA President & Chief Executive Officer
Jeffrey A. Stopko, CPA Treasurer
David L. Mordan, CPA Senior Vice President & Manager of Institutional Trust Services
Gerald R. Baxter, CPA, CTFA Vice President & Trust Officer
Richard F. Chimelewski Vice President & Trust Business Development Officer
Frank J. Lapinsky Vice President & Trust Investment Officer
Karen A. Sebring, CPA Vice President and Manager of Personal Trust Services
William S. Townsend Vice President & Trust Investment Officer
James T. Vaughan Vice President & Manager of Western Region
M. Randolph Westlund, CFA Vice President & Chief Investment Officer
Director Emeritus James F. O'Malley, Esq. Senior Lawyer, Yost & O'Malley Attorneys-at-Law
Trust Company Offices
Main and Franklin Streets, 11th Floor U.S. Bank Building P.O. Box 520 Johnstown, Pennsylvania 15907-0520
500 Fifth Avenue, 2nd Floor Three Rivers Bank and Trust Company Building McKeesport, Pennsylvania 15132-2500
UBAN ASSOCIATES, INC.
General Officers
Terry K. Dunkle Chairman of the Board
Ray M. Fisher President & Chief Executive Officer
Wendy L. Rager Vice President & Chief Operating Officer
UBAN Associates, Inc., Office 110 Regent Court, Suite 104 State College, PA 16801-7966
U.S. BANK OFFICE LOCATIONS X Main Office Downtown 216 Franklin Street P.O. Box 520 Johnstown, PA 15907-0520 (814) 533-5300
X Westmont Office 110 Plaza Drive Johnstown, PA 15905-1211 (814) 255-6836
X University Heights Office 1404 Eisenhower Boulevard Johnstown, PA 15904-3280 (814) 266-9691
X East Hills Office 1219 Scalp Avenue Johnstown, PA 15904-3182 (814) 266-3181
X Eighth Ward Office 1059 Franklin Street Johnstown, PA 15905-4303 (814) 535-8317
West End Office 163 Fairfield Avenue Johnstown, PA 15906-2392 (814) 533-5436
X Carrolltown Office 101 S. Main Street Carrolltown, PA 15722-0507 (814) 344-6501
Ebensburg Office 101 W. High Street Ebensburg, PA 15931-0209 (814) 472-8706
X Lovell Park Office 179 Lovell Ave. Ebensburg, PA 15931-0418 (814) 472-5200
Nanty Glo Office 928 Roberts Street Nanty Glo, PA 15943-1303 (814) 749-9227
Nanty Glo Drive-In 1383 Shoemaker Street Nanty Glo, PA 15943-1252 (814) 749-0955
Loretto Office 180 St. Mary's Street P.O. Box 116 Loretto, PA 15940-0116 (814) 472-8452
X Galleria Mall Office 500 Galleria Drive Suite 100 Johnstown, PA 15904-8911 (814) 266-5969
X St. Michael Office 900 Locust Street St. Michael, PA 15951-0393 (814) 495-5514
Coalport Office Main Street, P.O. Box 356 Coalport, PA 16627-0356 (814) 672-5303
X Seward Office 1, Roadway Plaza Seward, PA 15954-9501 (814) 446-5655
X Windber Office 1501 Somerset Avenue Windber, PA 15963-1745 (814) 467-4591
Central City Office 104 Sunshine Avenue Central City, PA 15926-1129 (814) 754-4141
X Somerset Office 108 W. Main Street Somerset, PA 15501-2035 (814) 445-4193
X Derry Office 112 South Chestnut Street Derry, PA 15627-1938 (412) 694-8887
THREE RIVERS BANK OFFICE LOCATIONS
X Boston Office 1701 Boston Hollow Road McKeesport, PA 15135-1217 (412) 754-2014
X Century III Office 269 Clairton Boulevard Pittsburgh, PA 15236-1499 (412) 653-7199
X Franklin Mall Office 1500 W. Chestnut Street Washington, PA 15301-5871 (412) 228-0065
X Glassport Office 600 Monongahela Avenue Glassport, PA 15045-1608 (412) 664-8760
X Jefferson Borough Office Route 51, South P.O. Box 10915 Pittsburgh, PA 15236-0915 (412) 382-1000
X Liberty Boro Office 3107 Liberty Way McKeesport, PA 15133-2198 (412) 664-8707
X McKeesport Office 500 Fifth Avenue McKeesport, PA 15132-2500 (412) 664-8715
X Motor Bank 1415 Fifth Avenue McKeesport, PA 15132-2427 (412) 664-8755
X Port Vue Office 1194 Romine Avenue McKeesport, PA 15133-3596 (412) 664-8975
X Rainbow Village Office 1 Rainbow Village Shopping Center White Oak, PA 15131-2415 (412) 664-8771
X South Strabane Office 590 Washington Road Washington, PA 15301-9621 (412) 225-9800
X University Office 2016 Eden Park Boulevard McKeesport, PA 15132-7619 (412) 664-8780
X Remote 24-Hour Banking Locations X Main Office, Main & Franklin Streets, Johnstown X Richland Mall, Elton Road, Johnstown X Lee Hospital, Main Street, Johnstown X The Galleria, Johnstown X BiLo Supermarket, Scalp Avenue, Johnstown X Derry BP-Pit Stop Quick Shop, Derry X Robyn's Shoppe, Nanty Glo X Gogas Service Station, Cairnbrook X Community College of Allegheny County, North Campus, Pittsburgh X Shop & Save, Ohio Avenue, Glassport X Wal-Mart, Oak Spring Road, Washington X Washington Mall, Oak Springs Road, Washington
COMMUNITY SAVINGS BANK OFFICE LOCATIONS
X Lawrenceville 4319 Butler Street Pittsburgh, PA 15201-3094 (412) 681-8390
X New Kensington 2 Feldarelli Square 2300 Freeport Road New Kensington, PA 15068-4669 (412) 335-9811
X North Side 401 East Ohio Street Pittsburgh, PA 15212-5588 (412) 231-4300
X Northway Mall 1002 Northway Mall Pittsburgh, PA 15237-3098 (412) 364-8692
X Moon Township 914 Narrows Run Road Coraopolis, PA 15108-2306 (412) 262-2210
X Monroeville 2681 Moss Side Boulevard Monroeville, PA 15146-3394 (412) 856-8410
X North Versailles Great Valley Shopping Center 500 Lincoln Highway North Versailles, PA 15137-1524 (412) 829-1360
X Baldwin Brownsville Plaza 5253 Brownsville Road Pittsburgh, PA 15236-2796 (412) 655-2217
X Carrick 1817 Brownsville Road Pittsburgh, PA 15210-3999 (412) 881-3500
X Bethel Park 2739 South Park Road Bethel Park, PA 15102-3805 (412) 835-2100
X Finleyville 3576 Sheridan Avenue Finleyville, PA 15332-1018 (412) 348-6626
X Jeannette 401 Clay Avenue Jeannette, PA 15644-2124 (412) 527-1501
X 24-Hour Banking Available
USBANCORP, INC.
SHAREHOLDER INFORMATION Securities Markets USBANCORP, Inc. Common Stock is publicly traded and quoted on the NASDAQ National Market System. The common stock is traded under the symbol of "UBAN." The listed market makers for the stock are:
Boenning & Scattergood, Inc. 200 Four Falls Corporate Center Suite 212 West Conshohocken, PA 19428 Telephone: (800) 883-8383
Ferris Baker Watts, Inc. 6 Bird Cage Walk Hollidaysburg, PA 16648 Telephone: (800) 343-5149
Herzog, Heine, Geduld, Inc. 525 Washington Boulevard Jersey City, NJ 07310 Telephone: (212) 908-4156
Janney Montgomery Scott, Inc. 1801 Market Street - 10th Floor Philadelphia, PA 19103 Telephone: (215) 665-6500
Legg Mason Wood Walker, Inc. 969 Eisenhower Boulevard Oak Ridge East Johnstown, PA 15904 Telephone: (814) 266-7900
Merrill Lynch Equity Markets Group North Tower World Financial Center New York, NY 10281-1305 Telephone: (212) 449-4162
F. J. Morrissey & Co., Inc. 1700 Market Street Suite 1420 Philadelphia, PA 19103-3913 Telephone: (215) 563-8500
Oppenheimer & Co., Inc. Oppenheimer Tower 200 Liberty Street One World Financial Center New York, NY 10281 Telephone: (212) 667-7000
Parker/Hunter, Inc. 416 Main Street Johnstown, PA 15901 Telephone: (814) 535-8403
Sandler O'Neill & Partners, L.P. 2 World Trade Center 104th Floor New York, NY 10048 Telephone: (800) 635-6860
Wheat First Butcher Singer 100 Pasquerilla Plaza P.O. Box 96 Johnstown, PA 15907 Telephone: (814) 535-1516
Form 10-K USBANCORP, Inc.'s Annual Report to the Securities and Exchange Commission on Form 10-K is integrated within this Annual Report. Corporate Offices The corporate offices of USBANCORP, Inc. are located in the United States National Bank Building at Main and Franklin Streets, Johnstown, PA 15901. Mailing address: P.O. Box 430 Johnstown, PA 15907-0430 (814) 533-5300
Agents The transfer agent and registrar for USBANCORP, Inc.'s common stock is: Boston EquiServe Investor Relations Department P.O. Box 644 Mail Stop 45-02-09 Boston, MA 02102-0644 (617) 575-3170
Shareholder Data As of January 31, 1997, there were 6,242 shareholders of common stock and 5,081,337 shares outstanding. Of the total shares outstanding, approximately 269,000 or 5% are held by insiders (directors and executive officers) while approximately 1,645,807 or 32% are held by institutional investors (mutual funds, employee benefit plans, etc.).
Dividend Reinvestment Shareholders seeking information about USBANCORP, Inc.'s dividend reinvestment plan should contact Betty L. Jakell, Executive Office, at (814) 533-5158.
Information Analysts, investors, shareholders, and others seeking financial data about USBANCORP, Inc. or any of its subsidiaries annual and quarterly reports, proxy statements, 10-K, 10-Q, 8-K, and call reports-are asked to contact Jeffrey A. Stopko, Senior Vice President & Chief Financial Officer at (814) 533-5310. Inside back cover
Exhibit 24.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our report dated January 23, 1997 included in this Form 10-K, into USBANCORP, Inc.'s previously filed Registration Statements on Form S-3 (Registration No. 33-56604); Form S-8 (Registration No. 33-53935); Form S-8 (Registration No. 33-55845); Form S-8 (Registration No. 33-55207) and Form S-8 (Registration No. 33-55211).
/s/Arthur Andersen LLP ARTHUR ANDERSEN LLP
Pittsburgh, Pennsylvania March 17, 1997
Annex A
USBANCORP, INC. 1996 ANNUAL REPORT & FORM 10-K
The following is a listing of the graphs presented in USBANCORP, Inc.'s 1996 Annual Report & Form 10-K.
Page 2: The following six graphs present Financial Highlights-At A Glance:
The top left graph is an area graph showing non- performing assets as a percentage of loans and OREO at December 31 for the periods presented:
1992 1993 1994 1995 1996 1.58% 0.89% 0.91% 1.13% 0.92%
Asset quality is critical to a bank's safety and ongoing earnings power. Non-performing assets are those loans and foreclosed properties that are not generating income and represent high collection risk. USBANCORP's non-performing assets are lower than peer.
The middle left graph is an bar graph showing the allowance for loan losses as a percentage of total non- accrual loans at December 31 for the periods presented:
1992 1993 1994 1995 1996 245.75% 287.71% 286.27% 198.40% 209.41%
The allowance for loan losses help protect a bank's future earnings from losses due to credit risk. USBANCORP's allowance reflects a reserve of $2.09 for each $1.00 of non-accrual loans.
The bottom left graph is a bar graph showing the Company's efficiency ratio excluding SAIF charge:
1992 1993 1994 1995 1996 67.63% 67.44% 67.53% 66.97% 61.06%
The efficiency ratio reflects the Company's ability to generate revenue and control its non-interest expenses. USBANCORP's significantly improved its performance in this key area of profitability in 1996 by generating increasing revenue from its core banking business.
The top right graph is a bar graph showing the Company's net income per employee for the periods presented:
1992 1993 1994 1995 1996 $13,983 $18,788 $15,429 $20,915 $26,604
USBANCORP has aggressively captured the financial benefits from each of its past acquisitions. Improved employee productivity is one such integral benefit from these acquisitions. USBANCORP has nearly doubled its net income per employee over the past five years.
The middle right graph is a bar graph showing the Company's return on equity for the periods presented:
1992 1993 1994 1995 1996 $11.41 $11.46 $8.92 $11.03 $13.36
The return on equity (ROE) is a standard measurement of a bank's profitability. USBANCORP exceeded its intermediate 13% ROE target by achieving a 13.36% ROE for the full year 1996, for the fourth quarter 1996 the Company's ROE improved to 14.38%.
The bottom right graph is a area graph showing net interest income (in thousands):
1992 1993 1994 1995 1996 $44,441 $49,485 $55,818 $56,147 $61,138
As a result of prudent acquisitions, balance sheet leveraging, and effective asset/liability management practices. USBANCORP has increased net interest income for each of the past five years.
Page 4: The following six graphs present Shareholder Information-At A Glance:
The top left graph is a bar graph showing net income (in thousands):
1992 1993 1994 1995 1996 $8,883 $12,488 $11,320 $15,803 $20,019
USBANCORP 1996 net income was $20 million which represented a 27% increase over the 1995 results. Such income is a key determinant of shareholder value and the Company's ongoing financial soundness.
The middle left graph is a bar graph showing dividends per common share:
1992 1993 1994 1995 1996 $0.75 $0.86 $0.97 $1.06 $1.37
Common dividends per share represent a payment by the company from its accumulated shareholder wealth. USBANCORP's dividends paid to shareholders have increased at an average annual rate of 16.5% over the past five years. The Company declared a special dividend of $0.20 per share in 1996 to further share its record success with its shareholders.
The bottom left graph is a bar graph showing common stock price per share at December 31:
1992 1993 1994 1995 1996 $22.00 $23.75 $21.00 $33.00 $41.75
A second key element of shareholder return is the price appreciation of each common share. USBANCORP's common stock price per share has appreciated 27% in 1996. The top right graph is a pie graph showing the distribution of 1996 net income:
Common dividend payout 35% Treasury stock repurchases 43% Retained for internal capital growth 22%
In 1996, USBANCORP distributed 78% of its net income back to its shareholders through treasury stock repurchases and common dividend payments.
The middle right graph is a bar graph showing book value per common share at December 31:
1992 1993 1994 1995 1996 $23.08 $24.67 $24.57 $28.34 $29.90
A company's book value per common share represents the accumulated and undistributed shareholder wealth. This wealth is used by the company to finance profitable growth and to fund shareholder dividends. USBANCORP has increased this shareholder wealth by 30% over the past five years to $29.90 at December 31, 1996.
The bottom left graph is an area graph showing asset leverage ratio compared to the management minimum target of 6% and the regulatory requirement of 5%:
1992 1993 1994 1995 1996 7.08% 9.18% 6.64% 6.63% 6.51%
Fundamental to shareholder and depositor safety is the capital strength of the financial institution. It is USBANCORP's intent to optimally leverage the capital base in order to enhance shareholder value while maintaining necessary regulatory requirements.
Page 5: Appearing in the margin is a "call out" reflecting the quote:
Your Company exceeded its 13% ROE target and grew EPS by 32.8%...
The graph at the bottom left is area graph graph showing market capitalization at December 31 (in thousands):
1992 1993 1994 1995 1996 $65,607 $101,559 $117,225 $175,246 $212,132
Page 6: Appearing in the margin is a "call out" reflecting the quote:
Timely response to customer needs encourages more customers to select us as their "Bank of Choice"...
The bottom left graph is a pie chart showing 1996 gross revenue contribution by product segment (percentage):
Investments 41%, Trust 2%, Commercial 20%, Wholesale 1%, Consumer 36%,
Page 7: The graph at the top left is a pie chart showing loan portfolio composition at December 31, 1996, by loan type:
Commercial 15% Commercial secured by real estate 29% Real estate - mortgage 44% Consumer 12%
Appearing in the margin is a "call out" reflecting the quote:
Alternative delivery systems provide customers with more banking options...
Page 8: The top left graph is a bar graph showing average loan to average deposit ratio for the periods presented:
1995 1Q96 2Q96 3Q96 4Q96 68.67% 70.78% 71.42% 73.76% 79.40%
Appearing in the margin is a "call out" reflecting the quote:
Technology brings new convenience and improves customer service...
Page 9: Appearing in the margin at the top of the page is a "call out" reflecting the quote:
Our Five Year Technology Plan introduces new technologies which complement our "high-touch" service...
Appearing in the margin at the bottom of the page is a "call out" reflecting the quote:
Preparing employees for the challenges ahead...
Page 10: The top left graph is a bar graph showing the Company's net income per employee for the periods presented:
1992 1993 1994 1995 1996 $13,983 $18,788 $15,429 $20,915 $26,604
The bottom left graph is a bar graph showing the Company's SMC residential mortgage loans originated (in thousands) for the periods presented:
1994 1995 1996 $85,469 $147,254 $211,198
Page 11: Appearing in the margin at the top of the page is a "call out" reflecting the quote:
Improving sales volume and fee income by adding new products and services...
Appearing in the margin at the bottom of the page is a "call out" reflecting the quote:
Three Rivers Mortgage Company begins operations in 1997...
Page 12: Appearing in the margin at the middle of the page is a "call out" reflecting the quote:
UBAN Associates, Inc., will leverage existing organizational strengths to attract an entirely new customer base...
Page 13: Appearing in the margin at the top of the page is a "call out" reflecting the quote:
Improving value for shareholders, customers, and employees remains our goal...
The graph at the bottom left is a bar graph showing net income per common share before SFAS #109 benefit, acquisition charge, and SAIF charge (fully diluted basis) for the periods presented:
1992 1993 1994 1995 1996 $2.53 $2.41 $2.54 $2.87 $4.07
Page 14: Shows a service area map of USBANCORP, Inc.'s six southwestern Pennsylvania counties. The map shows a closeup of the six counties identifying branch locations by subsidiary.
Page 48: The left graph is a bar graph showing dividends per common share:
1992 1993 1994 1995 1996 $0.75 $0.86 $0.97 $1.06 $1.37
The right graph is a bar graph showing common stock price per share at December 31:
1992 1993 1994 1995 1996 $22.00 $23.75 $21.00 $33.00 $41.75
Page 50: The top left graph is a bar graph showing pre- tax income (in thousands):
1992 1993 1994 1995 1996 $14,323 $16,520 $17,251 $21,848 $27,263
Page 51: The graph at the bottom of the page is a bar graph showing total assets at December 31 for the periods presented (in thousands):
1992 $1,139,855 1993 $1,241,521 1994 $1,788,890 1995 $1,885,372 1996 $2,087,112
The bottom left graph is a bar graph showing net income (in thousands):
1992 1993 1994 1995 1996 $8,883 $12,488 $13,320 $15,803 $20,019
Page 52: The top left graph is a bar graph showing the Company's return on equity before SFAS #109 benefit, acquisition charge, and SAIF charge for the periods presented:
1992 1993 1994 1995 1996 $11.41 $10.13 $10.41 $11.03 $14.28
The graph at the bottom left is an area graph showing total common shares outstanding at December 31:
1992 1993 1994 1995 2,982,124 4,726,181 5,582,155 5,310,489
5,081,004
Page 53: The graph at the top left is a bar graph showing tax equivalent net interest income (NII) in thousands and data points showing the net interest margin (NIM) percentage:
1992 1993 1994 1995 1996 NII $45,249 $50,225 $57,564 $58,954 $64,092 NIM 4.58% 4.34% 4.03% 3.45% 3.52%
The bottom left graph is a pie chart showing the liability funding mix at December 31, 1996:
Deposits 55% Borrowing 37% Equity 8%
Page 54: The top left graph is a bar graph showing average loans to average deposits for the periods presented:
1992 1993 1994 1995 1996 68.23% 69.01% 71.82% 68.67% 73.80%
The graph at the bottom left is a pie chart showing loan portfolio composition at December 31, 1996, by loan type:
Commercial 15% Commercial secured by real estate 29% Real estate - mortgage 44% Consumer 12%
Page 55: The graph at the top left is a pie chart showing the deposit composition as of December 31, 1996:
DDA 13%, CD's 50% Savings & NOW 24%, Money market 13%
The bottom left graph is a pie chart showing the investment portfolio liquidity(scheduled maturities) as of December 31, 1996:
Less than 1 year is 3% Greater than 1 year but less than 5 years is 23% Greater than 5 year but less than 10 years is 32% Greater than 10 years is 42%
Page 56: The top left graph is a pie chart showing the liability funding mix at December 31, 1995:
Deposits 63% Borrowing 29% Equity 8%
The graph at the bottom left is a pie chart showing the deposit composition as of December 31, 1995:
DDA 12%, CD's 50% Savings & NOW 27%, Money market 11%
Page 58: The bottom left graph is a area graph showing net interest income (in thousands):
1992 1993 1994 1995 1996 $44,441 $49,485 $55,818 $56,147 $61,138
The bottom right graph is a area graph showing net interest margin percentage:
1992 1993 1994 1995 1996 4.58% 4.34% 4.03% 3.45% 3.52%
Page 59: The top left graph is an bar graph showing non- performing assets as a percentage of loans and OREO at December 31 for the periods presented:
1992 1993 1994 1995 1996 1.58% 0.89% 0.91% 1.13% 0.92%
The bottom left graph is an bar graph showing the allowance for loan losses as a percentage of total non-accrual loans at December 31 for the periods presented:
1992 1993 1994 1995 1996 245.75% 287.71% 286.27% 198.40% 209.41%
The bottom right graph is a bar graph showing the allowance for loan losses as a percentage of loans at December 31 for the periods presented:
1992 1993 1994 1995 1996 2.12% 2.10% 1.80% 1.79% 1.42%
Page 61: The top left graph is a bar graph showing the loan loss provision as a percentage of average loans:
1992 1993 1994 1995 1996 0.36% 0.34% (0.34%) 0.03% 0.01%
Page 62: The top left graph is a bar graph showing the net charge-offs as a percentage of average loans:
1992 1993 1994 1995 1996 0.58% 0.13% 0.04% 0.08% 0.20%
The bottom left graph is an bar graph showing non-interest income excluding investment security gains and losses (in thousands):
1992 1993 1994 1995 1996 $7,953 $9,567 $12,159 $15,841 $18,051
Page 63: The top left graph is an bar graph showing the components of non-interest income (in thousands):
1992 1993 1994 1995 1996 All other $3,187 $3,520 $1,148 $9,057 $10,632 Deposit service charges $1,916 $2,771 $2,779 $2,937 $3,264 Cash pro- cessing fees $1,189 $1,281 $1,237 $1,154 $1,086 Trust fees $2,054 $2,578 $3,023 $3,395 $3,708
The bottom left graph is a bar graph showing trust fee income (in thousands):
1992 1993 1994 1995 1996 $2,054 $2,578 $3,023 $3,395 $3708
The average annual growth rate in trust fee income is 16.1%.
Page 64: The top left graph is a bar graph showing non- interest expense excluding acquisition charge and SAIF charge (in thousands):
1992 1993 1994 1995 1996 $36,248 $40,715 $47,082 50,557 $50,549
The bottom left graph is an bar graph showing the components of non-interest expense (in thousands):
1992 1993 1994 1995 1996 All other $11,083 $12,605 $13,973 $16,017 $25,483 FDIC Ins. $ 2,040 $ 2,157 $ 2,576 $1,728 $639 Occupancy Equipment $ 5,087 $ 6,001 $ 7,222 $ 7,507 $7,574 Salaries & benefits $18,038 $19,952 $23,311 $25,305 $25,483
Page 65: The top left graph is a bar graph showing net overhead expense as a percentage of net interest income (excluding net security gains and losses):
1992 1993 1994 1995 1996 62.53% 62.02% 60.67% 60.58% 53.71%
The bottom left graph is a bar graph showing the Company's efficiency ratio excluding SAIF charge:
1992 1993 1994 1995 1996 67.63% 67.44% 67.53% 66.97% 61.06%
Page 66: The top left graph is a bar graph showing assets per full time equivalent employee at December 31 for the periods presented (in thousands):
1992 1993 1994 1995 1996 $1,641 $1,829 $2,070 $2,419 $2,588
The graph at the bottom left is a bar graph showing total assets at December 31 for the periods presented (in thousands):
1992 $1,139,855 1993 $1,241,521 1994 $1,788,890 1995 $1,885,372 1996 $2,087,112
Page 67: The top left graph is a pie chart showing the liability funding mix at December 31, 1996:
Deposits 55% Borrowing 37% Equity 8%
The bottom left graph is a pie chart showing the liability funding mix at December 31, 1995:
Deposits 63% Borrowing 29% Equity 8%
Page 68: The bottom left graph is an bar graph showing the Company's one year GAP ratio compared to a neutral one year GAP of 1.00x at December 31 for the periods presented:
1992 1993 1994 1995 1996 1.14x 1.10x 0.79x 0.86x 0.79x
Page 69: The top left graph is a pie chart showing the investment portfolio liquidity (scheduled maturities) as of December 31, 1996:
Less than 1 year is 3% Greater than 1 year but less than 5 years is 23% Greater than 5 year but less than 10 years is 32% Greater than 10 years is 42%
The bottom left graph is a pie chart showing the investment portfolio liquidity(scheduled maturities) as of December 31, 1995:
Less than 1 year is 5% Greater than 1 year but less than 5 years is 45% Greater than 5 year but less than 10 years is 26% Greater than 10 years is 24%
Page 70: The top left graph is a bar graph showing the Company's total risk based capital at December 31 compared to a regulatory requirement of 8.00%:
1992 1993 1994 1995 1996 12.54 15.97 13.70 14.88 14.16
The bottom left graph is an area graph showing asset leverage ratio compared to the management minimum target of 6% and the regulatory requirement of 5%:
1992 1993 1994 1995 1996 7.08% 9.18% 6.64% 6.63% 6.51%
Page 71: The top left graph is a bar graph showing the common dividend yield (based upon dividends declared and purchase at average market price each year) for the periods presented:
1992 1993 1994 1995 1996 3.70% 3.50% 4.20% 4.13% 3.88%
The graph at the bottom left is a pie chart showing the distribution of 1996 net income:
Common dividend payout 35% Treasury stock repurchases 43% Retained for internal capital 22% growth
The graph at the bottom left is a pie chart showing the distribution of 1995 net income:
Common dividend payout 37% Treasury stock repurchases 50% Retained for internal capital 13% growth
Page 74: The top left graph is a pie chart showing 1996 gross revenue contribution by product segment (in thousands):
Investments $63,538, Trust $3,708, Commercial $30,606, Wholesale $1,085, Consumer $57,085,
The bottom left graph is a pie chart showing 1996 gross revenue contribution by product segment (percentage):
Investments 41%, Trust 2%, Commercial 20%, Wholesale 1%, Consumer 36%,
Page 75: The top left graph is a pie chart showing 1995 gross revenue contribution by product segment (in thousands):
Investments $59,264, Trust $3,395, Commercial $27,583, Wholesale $1,154, Consumer $54,862,
The bottom left graph is a pie chart showing 1995 gross revenue contribution by product segment (percentage):
Investments 40%, Trust 2%, Commercial 19%, Wholesale 1%, Consumer 38%,
Page 76: The top left graph is a bar graph showing net income before SFAS #109 benefit, acquisition charge, and SAIF charge (in thousands):
1992 1993 1994 1995 1996 $8,883 $11,036 $13,202 $15,803 $21,387
The graph at the bottom left is an bar graph showing return on average assets before SFAS #109 benefit, acquisition charge, and SAIF charge:
1992 1993 1994 1995 1996 0.85% 0.91% 0.87% 0.87% $1.10
Page 77: The left graph is a bar graph showing the Company's SMC residential mortgage loans originated (in thousands) for the periods presented:
1994 1995 1996 $85,469 $147,254 $211,198
Page 78: The graph at the top left is a bar graph showing trust assets. The graph presents the book value of client assets which is discretionary and non- discretionary at December 31 (in millions):
1992 1993 1994 1995 1996 $650 $943 $1,027 $1,043 $1,157
Note: 78% growth rate from 1992 to 1996.
Page 79: The top left graph is a pie chart showing the composition of 1996 trust assets (dollars in thousands and percentages):
Corporate trust $321,229 28% Employee benefits $430,656 37% Personal trust $347,657 30% Pathroad $57,530 5%
Page 81: The left graph is a bar graph showing the Company's net income per employee for the periods presented:
1992 1993 1994 1995 1996 $13,983 $18,788 $15,429 $20,915 $26,604
Page 82: The top left graph is a pie chart showing the investment portfolio liquidity (scheduled maturities) as of December 31, 1996:
Less than 1 year is 3% Greater than 1 year but less than 5 years is 23% Greater than 5 year but less than 10 years is 32% Greater than 10 years is 42%
The bottom left graph is a pie chart showing the investment portfolio liquidity (scheduled maturities) as of December 31, 1995:
Less than 1 year is 5% Greater than 1 year but less than 5 years is 45% Greater than 5 year but less than 10 years is 26% Greater than 10 years is 24%
Page 83: The top left graph is a pie chart showing loan portfolio composition at December 31, 1996 by loan type:
Commercial 15% Commercial secured by real estate 29% Real estate - mortgage 44% Consumer 12%
Page 84: The top left graph is a pie chart showing loan portfolio composition at December 31, 1995 by loan type:
Commercial 12% Commercial secured by real estate 22% Real estate - mortgage 50% Consumer 16%
Page 85: The graph at the top left is a pie chart showing the deposit composition as of December 31, 1996:
DDA 13%, CD's 50% Savings & NOW 24%, Money market 13%
Inside back cover: The graph at the bottom right is a bar graph showing common stock price to book value at December 31:
1992 1993 1994 1995 1996 95.32% 96.27% 85.47% 116.44% 139.63%
The graph at the bottom right is a bar graph showing common stock price earnings ratio (calculated on a fully diluted basis before SFAS #109 benefit and acquisition charge). Based upon December 31 stock prices for the periods presented):
1992 1993 1994 1995 1996 8.70x 9.85x 8.27x 11.50x 10.96x