ITEM 1. BUSINESS
CBT Corporation (the "Corporation"), a Kentucky corporation organized in March, 1983, is a registered bank holding company under the Bank Holding Company Act of 1956, as amended. The Corporation is the holding company parent of Citizens Bank & Trust Company of Paducah, Kentucky ("Citizens") and Pennyrile Bancshares, Inc. of Hopkinsville, Kentucky. The Corporation acquired 100% of the common stock of Pennyrile Bancshares, Inc. on November 30, 1993.
At December 31, 1993, the Corporation had total consolidated assets of $600.5 million, total net loans of $377.7 million and total stockholders' equity of $66.9 million.
CITIZENS BANK AND TRUST COMPANY
Citizens was authorized to commence business in the year 1888 and conducts a general banking business embracing most of the services, both consumer and commercial, which banks may lawfully provide, including the following principal services: acceptance of demand, savings, and time deposits; the making of commercial, consumer, mortgage, and credit card loans; personal and corporate trust services, safe deposit facilities, and correspondent banking services. While primarily serving customers in the Paducah, McCracken County area, Citizens' market area also includes several other counties in Western Kentucky and nearby Southern Illinois. On September 1,1993, the Citizens completed the purchase of all assets and assumption of all liabilities of three McCracken County locations of Security Trust Federal Savings and Loan Association. In the transaction the Corporation assumed approximately $62.2 million in deposits, acquired approximately $4.2 million in loans, premises and equipment and other assets and received approximately $58 million in cash. Upon consummation of the transaction one of the locations continued to operate as Citizens branches. The remaining two branches were consolidated with existing Citizens locations. Total assets of Citizens before intercompany eliminations at December 31, 1993 approximated $542.6 million.
Citizens conducts business in its principal office at 333 Broadway, Paducah, Kentucky, in 5 branch facilities located within the City of Paducah, Kentucky, and 2 branch facilities in nearby Lone Oak and Reidand, Kentucky, all within McCracken County. In addition five automated teller machines are installed in select locations throughout McCracken County, all at sites other than existing bank locations.
At the present time, Citizens, through outside consultants, is conducting a complete review of its existing branch locations; however, no specific plans, arrangements or commitments to open new branch offices or to change the location of or otherwise discontinue its use of the present locations have been finalized.
In July 1984, the Corporation acquired 100% of the outstanding common stock of Fidelity Credit Corporation ("FCC"), a consumer finance company. In April 1993, ownership of FCC was transferred to Citizens.
FCC, a Kentucky corporation, engages in the business of making consumer loans, both secured and unsecured. In addition to operating in Paducah, FCC is also licensed to conduct business in the following cities located in Kentucky: Berea, Somerset, Russell Springs, Campbellsville, Stanford, Danville, Whitley City, Mayfield, Princeton, Owensboro, Madisonville, Hopkinsville, Leitchfield, Russellville, and Central City. FCC operates under the Consumer Loan Act and Industrial Loan Act of Kentucky. In addition to the offices located in Kentucky, FCC, as of December 31, 1992, also operated in Tennessee with offices in Fayetteville, Murfreesboro, Columbia, Clarksville, Tullahoma, and Union City. On February 18, 1993, the Tennessee offices, representing assets of $6.1 million, were sold to a consumer finance company located in Dallas, Texas.
FCC operations are primarily financed by short and long-term borrowings from a regional institution. Total assets before intercompany eliminations at December 31, 1993 approximated $17.3 million.
PENNYRILE BANCSHARES, INC.
Pennyrile Bancshares, Inc. was organized in 1990 and is a registered bank holding company under the Bank Holding Company Act of 1956, as amended. Its principal asset is Pennyrile Citizens Bank and Trust Company ("Pennyrile"), a commercial bank located in Hopkinsville, Kentucky. Pennyrile has operated as a commercial bank since 1976 offering the same wide array of financial products and services as offered by Citizens Bank and Trust Company to individuals and businesses primarily located in Hopkinsville and Christian County, Kentucky. At December 31, 1993, Pennyrile had total assets of approximately $50 million.
Pennyrile's principal office is located at 2800 Fort Campbell Boulevard in Hopkinsville. In addition, Pennyrile has one branch located within Hopkinsville and another located in nearby Crofton, Kentucky.
COMPETITION
Competition for banking and related financial services is active in all geographical areas served by the Corporation's subsidiaries. The Corporation's subsidiaries compete with other financial institutions in all product lines which are presently offered. As a result of deregulation in the banking industry, local bank competition has intensified and, at present, both price and product range are critically important in maintaining and expanding financial relationships. While generally limited to Western Kentucky, the Bank's competitive marketplace does reach beyond state boundaries to Southern Illinois, and Northwest Tennessee.
Citizens competes in the McCracken County area with two commercial banks, a branch of a Louisville, Kentucky based savings association, and ten credit unions. Each of the commercial banks are locally owned with branches throughout McCracken County. According to recent studies, total deposits in McCracken County aggregated $ 1.1 billion. Citizens held approximately $428 million or 38.9% of the total. In assets, as of December 31, 1993, Citizens was the largest financial institution in McCracken County.
In its secondary market, Southern Illinois and Northwest Tennessee, the Bank actively competes with other commercial banks and financial institutions for all types of deposits, loans, trust accounts, and the provision of financial, trust and other services. The Bank also competes generally with insurance companies, savings and loan associations, credit unions, other financial institutions, and institutions which have expanded into the quasi-financial market.
Pennyrile competes in Christian County with two commercial banks, two savings and loan associations and three credit unions. One of the commercial banks is owned by a regional institution while the other is owned by an out-of-state institution. One of the savings and loan associations is affiliated with a regional commercial bank while the other is locally owned. According to recent research, total deposits in Christian County totaled approximately $521 million. Pennyrile held approximately 7% of this total.
SUPERVISION AND REGULATION
Bank holding companies and banks are extensively regulated under both federal and state law. Any change in applicable law or regulation may have a material effect on the business and prospects of the Corporation and its subsidiaries.
The Corporation, as a registered bank holding company, is subject to the supervision of and regulation by the Federal Reserve Board under the Bank Holding Company Act of 1956. In addition, the Corporation is subject to the provisions of Kentucky's banking laws regulating bank acquisitions and certain activities of controlling bank stockholders.
Citizens and Pennyrile are subject to the supervision of, and regular examination by, the FDIC and the Kentucky Department of Financial Institutions. The FDIC insures the deposits of the Banks to the current maximum of $100,000 per depositor.
STATISTICAL INFORMATION
Specific financial information required to be included under Item 1 of this Form 10-K is listed below along with a page reference where the information can be found in this Form 10-K.
Description of Financial Information Reference Page
A. Average Balance Sheets and Net Interest Analysis 5
B. Rate Volume Analysis of Year-to-Year Changes in Net Interest Income 6
C. Carrying Value of Investment Securities 28
D. Carrying Value of Securities Available for Sale 29
E. Maturity Distribution of Investment Securities 29
F. Maturity Distribution of Securities Available for Sale 30
G. Loans Outstanding 6
H. Loan Maturities and Interest Sensitivity 7
I. Nonperforming Assets 7
J. Impact of Nonaccural Loans and Interest Income 30
K. Summary of Loan Loss Experience 8
L. Allocation of Allowance for Loan Losses 8
M. Average Deposits and Rates Paid 5
N. Maturity of Time Deposits of $100,000 or More 9
O. Return on Equity and Assets 11
P. Federal Funds Purchased and Repurchase Agreements 22
A. Three Year Average Balance and Net Interest Analysis
The change in interest due to both rate and volume has been allocated to rate and volume changes in proportion to the relationship of the absolute dollar amounts of the change in each.
ITEM 2.
ITEM 2. PROPERTIES
The offices of the Corporation and the main office of Citizens, occupy six floors of the ten-story building known as the Citizens Bank Building located in downtown Paducah, Kentucky, 333 Broadway. Citizens owns the Citizens Bank building and the property on which all of the present branch banks are located, in addition to properties located at Fourth and Jefferson Streets and Third and Jefferson Streets in Paducah which are utilized as parking lots for customers and tenants occupying the top four floors of the main office.
The nature of FCC's business is such that investment in tangible property is not significant to its operations. No real estate is owned and FCC leases all of its facilities. These leases normally have terms of three years with aggregate annual rental of approximately $150,000.
Pennyrile owns the property on which its main office and Crofton branch is located. The Hopkinsville branch is located on property Pennyrile leases from a director of Pennyrile. This lease is for a term of 99 years at an annual lease payment amount of $ 11,000.00.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
In the ordinary course of operations, the Corporation's subsidiaries are defendants in various legal proceedings. In the opinion of management, there is no preceding pending, or to the knowledge of management, threatened in which an adverse decision could result in a material adverse change in the business or consolidated financial position of the Corporation and its subsidiaries.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
PART II
ITEM 5.
ITEM 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
The Corporation's Common Stock, no par value, is currently traded over the counter and is quoted on the NASDAQ Small-Cap Market under the symbol CBTC. The approximate number of record holders as of March 23, 1994 was 1,018. The high and low bid information along with dividend payments for each quarterly period during the last two fiscal years is as follows:
ITEM 7.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CBT Corporation (the Corporation) is a bank holding company located in Paducah, Kentucky. The Corporation provides banking services through its banking subsidiaries, Citizens Bank & Trust Company (Citizens) and Pennyrile Citizens Bank & Trust Company (Pennyrile) and consumer finance services through its subsidiary, Fidelity Credit Corporation (FCC).
On September 1, 1993, the Corporation completed the purchase of all assets and assumption of all liabilities of three branches of Security Trust Federal Savings and Loan Association (Security). In the transaction the Corporation assumed approximately $62.2 million in deposits, acquired approximately $4.2 million in loans, premises and equipment and other assets and received approximately $58 million in cash. This transaction was accounted for under the purchase method; therefore, 1993 amounts reflect four months of operations. Historical data was not affected by this transaction.
On November 30, 1993, the Corporation completed the acquisition of Pennyrile Bancshares, Inc. and its wholly owned subsidiary Pennyrile Citizens Bank and Trust Company (Pennyrile). At the time of the acquisition Pennyrile had consolidated assets of approximately $46.5 million, total deposits of approximately $38.5 million and total stockholders' equity of approximately $4.3 million. This transaction was accounted for under the pooling of interests method; therefore, 1993 and all historical data have been adjusted for the effects of this acquisition.
OVERVIEW
Net income in 1993 of $7,912,000 or $2.86 per common share was an increase of 3.9% over 1992 net income of $7,614,000 or $2.75 per common share. Total assets at December 31, 1993 were $600.5 million, an increase of 8.3% over assets at December 31, 1992 of $554.5 million.
NET INTEREST INCOME
Net interest income, on a tax equivalent basis, is the difference between interest earned on earning assets and interest expensed on interest bearing liabilities. The net interest rate spread is the difference between the average rate of interest earned on average earning assets and the average rate of interest expensed on average interest bearing liabilities. The net interest margin is net interest income divided by average earning assets. For computational purposes, non-accrual loans are included in earning assets. The following schedule presents the net interest spread and net interest margin for 1993 and 1992. A complete analysis of net interest income, with average balances and related interest rates for the past three years is shown in TABLE A of the Statistical Information and should be referred to in conjunction with reading this section. In addition, the effects to net interest income resulting from changes in interest rates and volumes is presented in TABLE B of the Statistical Information.
The Corporation's yield on earning assets declined 86 basis points to 8.53% as these average assets increased 4.3% to $533 million in 1993. As interest rates remained stable in 1993 the Corporation's yield on its loan portfolio dropped 100 basis points to 9.54% as average outstanding increased approximately 6.4%, most notably in residential real estate. This decline was primarily attributable to rate pressures, both local and regional, within the commercial loan portfolio, residential real estate refinancings and repricing of the mostly adjustable mobile home portfolio. Average investment and mortgage-backed securities (MBS) increased 3.9%. The Corporation's strategy of shortening the portfolio's maturity and taking advantage of adjustable rate MBS products combined with increased amortization of premiums resulting from accelerated principal payments on MBS continued to affect the portfolio's yield. In 1993 the yield on investment securities and MBS declined 81 basis points to 6.7%.
The Corporation's overall cost of funds continued to decline in 1993, dropping 81 basis points to 4.22%, while average interest bearing liabilities increased 3.2%. Interest bearing demand deposits and savings accounts recorded a slight increase as the Corporation was successful in reducing these interest costs to 2.6% in 1993, down from 3.2% in 1992. As interest rates remained low in 1993 and the Corporation capitalized on repricing opportunities, time deposits (certificates of deposit and individual retirement accounts) increased only slightly, less than 1%, offsetting the inflow of approximately $17 million (average) of these deposits from Security. Time deposits repriced downward 82 basis points in 1993. Borrowings of the Corporation, primarily securities sold under agreements to repurchase, federal funds and through the Federal Home Loan Bank increased $8.9 million, or 20.5%, in 1993 at an average interest cost of 3.6%, down from 4.7% in 1992.
PROVISION FOR LOAN LOSSES
The provision for loan losses in 1993 declined $943,000 or 42.9% to $1,256,000. This decline will be included in further discussions on loan quality and the allowance for loan losses included later in this review under the caption "Non- Performing Loans and Assets and Allowance for Loan Losses." The provision in 1993 exceeded net charge-offs by 394.5% and was .36% of average loans as compared to .67% in 1992.
NON-INTEREST INCOME
Non-interest income in 1993 increased $684,000 or 13.1% as compared to 1992. Included in both periods were certain gains associated with the sale of assets and/or securities. Exclusive of such gains, non-interest income in 1993 increased 12.3% over 1992.
Trust and investment advisory fees include not only those fees generated through the subsidiaries' trust departments, but also fees generated by Invest, a full-service brokerage area of Citizens.
Trust income increased 5.6% in 1993 as assets under management increased to $237.1 million as compared to $213.4 million at December 31, 1992. The general economic environment continues to generate volume for Invest services, thus allowing fees in 1993 of $688,000 to approximate 1992 record earnings.
Service charges on deposits increased significantly in 1993, approximately 17.9%. In 1993 some specific account and maintenance fee enhancements were implemented. However, the assumption of approximately 5,000 transaction accounts from Security in 1993 provided the most notable effect on service charges.
Included in 1993 is approximately $553,000 in gains derived from FCC selling all of its branch offices in Tennessee. At the time of the sale, these offices were profitable; however, it was management's desire to concentrate FCC's focus to Kentucky service areas, both existing and future expansion. The 1993 and 1992 gains from the sale of investment securities are the result of management's repositioning of the investment portfolio in an attempt to take advantage of existing economic factors and better position the portfolio going forward.
The most significant non-interest income fluctuation included in the "Other" category involved Citizens' secondary mortgage market fees. Based on the continued residential real estate loan demand in 1993, these fees increased approximately 40.9% over 1992.
NON-INTEREST EXPENSE
The Corporation is keenly aware that effective management of operating costs is essential to the continued profitability of the organization. However, management is also sensitive to the fact that effective management of these costs must not be a burden to the customer.
Non-interest expenses increased approximately 8% in 1993 as compared to 1992.
Salaries and employee benefits increased 5.7% in 1993 as a result of normal merit/promotional increases and the addition of 22 full-time equivalent (FTE) employees in connection with the Security transaction. At December 31, 1993, the number of FTE employees was 311 as compared to 290 at December 31, 1992.
The 14.9% increase in depreciation of building and equipment and the amortization of intangibles in 1993 is primarily attributable to two factors. Depreciation expense increased approximately 8.9% as the Corporation continued to invest significant funds in technology and equipment for the purpose of providing our customers with the highest quality service. In addition, the Corporation acquired three facilities in the Security transaction. Amortization expense of approximately $85,000 was recognized in 1993 resulting from the Security transaction in which a core deposit intangible of $1,555,000 and other associated acquisition costs were recorded and are being amortized over ten and three years, respectively.
Other non-interest expense such as data processing, postage, telephone and supplies increased an aggregate of approximately 6% as a result of normal volume increases affected by the addition of approximately 10,500 accounts from Security. In addition, advertising expenses rose $214,000 or 95.5% over 1992 as Citizens' market plan and new image campaign was aggressively developed and initiated in 1993.
INCOME TAX EXPENSE
Effective tax rates were 23.5%, 23.2% and 22.1% in 1993, 1992 and 1991, respectively. The Corporation adopted SFAS No. 109, "Accounting for Income Taxes" in January 1993. There were no material effects on the consolidated financial statements as a result of this change. A further discussion of the Corporation's income taxes can be found under Note L to the Consolidated Financial Statements.
BALANCE SHEET ANALYSIS
Total assets of $600.5 million at year-end 1993 represents a $46 million or 8.3% increase from one year ago. Average earning assets increased $21.8 million or 4.3% in 1993 while interest bearing liabilities increased $13.9 million or 3.2%.
LOANS
Average loans, net of unearned interest, increased $20.8 million or 6.4% in 1993. As was the case in 1992, this increase was primarily concentrated in the residential real estate and mobile home loan portfolios. These portfolios increased $16.1 million and $6 million, respectively. Average consumer loans increased approximately $6 million as the Corporation continued to emphasize retail markets. Commercial loan demand was depressed during most of 1993; however, in the fourth quarter 1993 this loan demand did show signs of improvement. Average commercial loans outstanding during 1993 were $141.9 million, a decline of 1.5% from $144.1 million one year ago.
NON-PERFORMING LOANS AND ASSETS AND ALLOWANCE FOR LOAN LOSSES
Non-performing loans include non-accrual loans, loans past due over 90 days and other real estate owned. At December 31, 1993, non-performing loans were $938,000 or .25% of total loans and other real estate owned. This represents a $1,032,000 or 52.4% decline from one year ago when non performing loans were $1,970,000 or .58% of loans and other real estate owned.
A breakdown of the Corporation's non-performing loans is reflected in TABLE I of the Statistical Information. At December 31, 1993, 1992, 1991 and 1989 no loans were classified as restructured troubled debt. At year-end 1990, such troubled debt restructuring totaled $2,400,000.
Non-accrual loans declined $375,000 in 1993 through the systematic workout of specific commercial credits. The $716,000 decline from 1992 in other real estate owned is the result of properties connected with three commercial credits being liquidated and the proceeds applied to the asset balance.
The Corporation's internal credit review process is designed to identify potential problem credits in a timely manner. At December 31, 1993 and 1992, the Corporation had identified approximately $7.2 million and $7.8 million, respectively, of such credits. These credits are not included in nonperforming assets since the borrowers met all applicable loan agreement terms.
In keeping with management's firm commitment of maintaining high asset quality and above average peer group comparisons, the Corporation's allowance for loan losses increased approximately $825,000 or 10.8% even though the provision for loan losses declined 42.9%. At December 31, 1993, the allowance for loan losses as a percent of total loans was 2.25% as compared to 2.27% at December 31, 1992. This ratio declined slightly due to lower provisions and increased loan growth. The Corporation was able to achieve a higher allowance for loan losses despite a lower provision as net charge-offs to average loans declined to .07% at year-end 1993 as compared to .33% one year ago. The allowance for loan losses to non- performing loans, an indication of the relative ability to cover problem loans with existing reserves, increased to 904% at December 31, 1993 from 389% at December 31, 1992.
INVESTMENTS AND FEDERAL FUNDS SOLD
In 1992 and 1993, in anticipation of a new accounting standard, the Corporation revised its investment accounting policy by reclassifying investment securities having an amortized cost of $51.7 million and $21.1 million, respectively, to securities available for sale. In 1993, SFAS No. 115 "Accounting for Certain Investments and Debt and Equity Securities" was released. The specific details of this pronouncement are discussed later in this review under the caption "Accounting Pronouncements."
For purposes of discussion, investment securities and securities available for sale are reviewed in aggregate and ignore the effects of these reclassifications.
Average investment securities increased approximately $6.8 million or 3.9% in 1993 over 1992. This growth is primarily concentrated in the tax-exempt municipals and mortgage backed securities. Principal payments on mortgage-backed securities increased significantly in 1993 as loan pools began to prepay as loan rates remained low and refinancing continued. The Corporation, by virtue of deposit growth, a roll-off of approximately $5.8 million in federal funds and liquidity within the investment portfolio, was able to fund loan growth allowing funds obtained from Security and mortgage-backed securities' principal pay downs to be reinvested in shorter- term adjustable mortgage-backed instruments.
DEPOSITS AND BORROWED FUNDS
Average deposits were affected in 1993 by the assumption of approximately $62 million in deposits from Security. The vast majority of these deposits (approximately $49 million) was certificates of deposits; however, deposits of all types were assumed.
Total average deposits increased approximately $8.3 million or 1.9% in 1993. The typically shorter-term transaction accounts recorded the most notable gains. NOW accounts increased $4.8 million or 8.1% while savings accounts increased $6.3 million or 32.3%. Average money market accounts declined approximately $8.3 million or 14.2%, while overnight cash management repurchase agreements increased $6.8 million or 42.9%. Time deposits (certificates of deposits and individual retirement accounts) increased only slightly in 1993, $2.1 million, or less than one percent. As deposit rates remained low in 1993 and the Corporation aggressively repriced deposit products, customers continued to move out of certificates of deposit and into lower yielding, more liquid interest-bearing transaction accounts. This shifting of deposits offset the $49 million in certificates of deposit assumed from Security.
Asset growth in 1993 was primarily funded with borrowings from the Federal Home Loan Bank (FHLB) and the use of federal funds. Borrowings from the FHLB in 1993 averaged $7.3 million, an increase of $3.4 million from 1992. The Corporation has found that the FHLB offers a wide array of funding programs at very competitive pricing. By utilizing these various products, the Corporation has been better able to match fund asset growth. Average federal funds purchased increased $6.4 million over 1992 as the Corporation used these funds to support asset growth as well as take advantage of certain investment opportunities in anticipation of funds generated in the Security transaction.
STOCKHOLDERS' EQUITY
Total stockholders' equity increased 9.6% to $66.9 million at December 31, 1993. The ability to generate capital internally is principally determined by earnings performance. This earnings performance is typically measured by return on average equity which was 12.34% and 12.85% in 1993 and 1992, respectively. Book value per common share at December 31, 1993 was $24.19 as compared to $22.06 one year ago, a 9.7% increase.
In 1993, the stockholders of the Corporation approved the authorization of an additional 2,000,000 shares of common stock bringing total authorized shares to 6,000,000. Subsequent to the Pennyrile transaction, the Corporation had issued an outstanding 2,767,519 shares of common stock.
Management is currently not aware of any recommendations by regulatory authorities which, if implemented, would have a material effect on the Corporation's liquidity, capital resources or operations.
LIQUIDITY AND INTEREST RATE SENSITIVITY
Liquidity represents a bank's ability to generate cash or otherwise obtain funds at a reasonable price to satisfy commitments to borrowers as well as demands of depositors. Loan and investment portfolios are managed to provide liquidity through maturity and marketability of such assets. It is a major responsibility of management to maximize net interest income within prudent liquidity constraints. Internal corporate guidelines have been established to constantly measure liquid assets as well as relevant ratios concerning earning asset levels and purchased funds. Each subsidiary of the Corporation is also required to monitor these same indicators and report regularly to its own senior management and board of directors.
The liquidity of the Corporation depends primarily on the dividends paid to it as the sole shareholder of its subsidiaries. In addition to dividends, another primary source of liquidity for the Corporation includes unused credit lines with correspondent banks. In addition to maintaining a satisfactory level of liquidity, management must control the degree of interest rate risk assumed on the balance sheet. Managing this risk involves regular monitoring of the amount of interest sensitive assets relative to interest sensitive liabilities over specific time intervals. The Corporation's one year cumulative ratio, is almost perfectly matched at 99% at December 31, 1993, compared to 95% at December 31, 1992.
In January 1992, Citizens became a member of the FHLB of Cincinnati. Members, based on certain criteria, are required to purchase common stock in the FHLB. This stock is redeemable at par and Citizens receives quarterly dividends. Citizens' current investment in FHLB stock is $1.8 million. Based on Citizens' level of single family residence real estate loans and mortgage-backed securities, a credit line of $17.8 million is available. At December 31, 1993, Citizens had borrowed $15.5 million of this available credit at an average interest rate of 4.9% in 1993. The specific maturities of these borrowings are included in Note I to the Consolidated Financial Statements.
ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board (FASB) has issued the following SFAS which have been adopted by the Corporation.
SFAS No. 106 - Employers' Accounting for Post retirement Benefits Other Than Pensions
This Statement was effective for fiscal years beginning after December 15, 1992. After that date, post retirement benefits were no longer to be recognized on a cash "pay as you go" basis; rather, the accrual basis for expense recognition of the future value of these benefits was to be implemented. The corporation adopted this Statement in January 1993 with no material impact on the Consolidated Financial Statements.
SFAS No. 109 - Accounting for Income Taxes
This Statement is effective for fiscal years beginning December 15, 1992 and supersedes the provision of Accounting Principles Board (APB) Opinion No. 11. Under the new Statement, income taxes are calculated using an asset and liability approach that requires tax assets and liabilities to be recognized for future tax consequences attributed to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. The Corporation adopted this Statement in January 1993 with no material impact on the Corporation's consolidated financial statements.
The FASB has also issued the following SFAS which is applicable to the Corporation.
SFAS No. 115 - Accounting for Certain Investments and Debt and Equity Securities
This Statement is effective for fiscal years beginning after December 15, 1993. According to this Statement, each entity, at acquisition, shall classify debt and equity securities into one of three categories: held to maturity, available for sale or trading. At each reporting date, the appropriateness of the classification shall be reassessed. This Statement also establishes standards of financial accounting and reporting for investments in equity securities that have readily determinable fair values. These standards include proper accounting treatment for the differences between amortized cost and fair market value.
At December 31, 1993, the Corporation had classified its investment portfolio as held to maturity and available for sale. The Corporation does not maintain any securities classified as trading. Beginning in 1994, the Corporation will, pursuant to this Statement, report the changes in fair value of securities available for sale as a net amount in stockholders' equity until realized.
PENDING ACQUISITIONS
On January 10, 1994, the Corporation entered into an Agreement and Plan of Reorganization (Agreement) with BMC Bankcorp, Inc. (BMC). The Agreement provides, among other things, for the merger of BMC into a wholly owned subsidiary of the Corporation. Terms of the Agreement call for BMC shareholders to receive two shares of the Corporation's common stock for each share of BMC common stock held. Consummation of the merger is subject to certain conditions, including approval of the shareholders of BMC and the appropriate regulatory authorities.
ITEM 8.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The following consolidated financial statements of the Corporation and report of independent auditors, Deloitte & Touche, are included in this Form 10-K at the pages indicated.
Description Reference Page
Report of Deloitte & Touche, Independent Auditors 21
Consolidated Balance Sheets - December 31, 1993 and 1992 22
Consolidated Statements of Income - Years ended December 31, 1993, 1992, and 1991 23
Consolidated Statements of Changes in Stockholders' Equity - Years ended December 31, 1993, 1992, and 1991 24
Consolidated Statements of Cash Flows - Years Ended December 31, 1993, 1992, and 1991 25
Notes to Consolidated Financial Statements 26
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None
PART III
ITEM 10.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information set out in the section entitled "Election of Directors" of Registrant's Proxy Statement at pages 2 through 4 is incorporated herein by reference. In addition the information set out in the section entitled "Election of Directors" of Registrant's Proxy Statement at page 5 dealing with Section 16 (a) filings under the Securities Exchange Act of 1934 is incorporated herein by reference.
ITEM 11.
ITEM 11. EXECUTIVE COMPENSATION
The information set out in the sections entitled "Executive Compensation", "Summary Compensation Table", "Options Granted In Last Fiscal Year", "Aggregate Option Exercises in Last Fiscal Year and Fiscal Year-End Option Values", "Compensation Committee Interlocks and Insider Participation", "Shareowner Return Performance Presentation", and "Employment Contracts and Termination of Employment and Changes-In-Control Arrangements" of Registrant's Proxy Statement at pages 8 through 16 is incorporated herein by reference.
INDEPENDENT AUDITORS' REPORT
Suite 2100 Telephone: (502) 562-2000 220 W Main Street Facsimile: (502) 562-2073 Louisville, Kentucky 40202-5313
To the Board of Directors and Stockholders CBT Corporation Paducah, Kentucky
We have audited the consolidated balance sheets of CBT Corporation and subsidiaries as of December 31,1993 and 1992, and the related consolidated statements of income, stockholders' equity and cash flows for each of the three years in the period ended December 31,1993. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of CBT Corporation and subsidiaries as of December 31,1993 and 1992, and the results of their operations and their cash flows for each of the three years in the period ended December 31,1993 in conformity with generally accepted accounting principles.
January 28, 1994
CBT Corporation and Subsidiaries CONSOLIDATED BALANCE SHEETS
CBT Corporation and Subsidiaries NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Years ended December 31, 1993, 1992, and 1991
A - Basis Of Presentation And Summary Of Significant Accounting Policies
BASIS OF PRESENTATION Included in the consolidated financial statements are CBT Corporation (the Parent Company) and its wholly-owned subsidiaries; Citizen's Bank and Trust Company (the Bank), Pennyrile Bancshares, Inc. (Pennyrile) and Fidelity Credit Corporation (FCC), collectively the "Corporation," which provide financial services primarily in Western Kentucky and surrounding communities. All significant intercompany accounts and transactions have been eliminated in consolidation.
CASH AND CASH EQUIVALENTS For purposes of reporting cash flows, cash and cash equivalents include cash and due from banks, federal funds sold and money market investments. Generally, federal funds are purchased and sold for one-day periods.
INVESTMENT SECURITIES AND SECURITIES AVAILABLE FOR SALE Prior to 1992, the Corporation accounted for all investments at cost adjusted for amortization of premiums and accretion of discounts. In 1992 and 1993, in anticipation of a new accounting standard, the Corporation revised its investment policy by reclassifying investment securities having an amortized cost of $51.7 million and $21 million, respectively, to securities available for sale. Investment securities are carried at amortized historical cost. Securities available for sale are carried at the aggregate of the lower of amortized cost or fair value. Amortization of premiums and accretion of discounts are recorded primarily on the interest method. Securities available for sale include securities that management intends to use as part of its asset/liability management strategy and that may be sold in response to changes in interest rates, resultant prepayment risk and other factors related to interest rate and resultant prepayment risk. Gains and losses on disposition of investment securities and securities available for sale are computed by the specific identification method. In May 1993, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 115 "Accounting for Certain Investments in Debt and Equity Securities" that addresses the accounting and reporting for investments in equity securities that have readily determinable fair values and for all investments in debt securities. Such investments are to be classified into three categories: held to maturity securities (reported at amortized cost), trading securities (reported at fair value, with unrealized gains and losses included in earnings) and available for sale securities (reported at fair value, with unrealized gains and losses excluded from earnings and reported as a separate component of equity). SFAS No. 115 is effective for fiscal years beginning after December 15, 1993. Upon adoption of SFAS No. 115, at January 1, 1994, the Corporation will record available for sale securities at fair value. The unrealized net gain of approximately $2.2 million, net of income taxes, will be included as a separate component of stockholders' equity.
LOANS AND INTEREST INCOME Loans are stated at the principal balance outstanding, net of unearned interest. Interest on loans is based upon the principal balance outstanding, except interest on some consumer installment loans, which is recognized on the sum-of-the-years-digits method, which does not differ materially from the interest method. The accrual of interest income is generally reviewed for discontinuance when a loan becomes 90 days past due as to principal or interest. Management may elect to continue the accrual of interest when the estimated net realizable value of collateral is sufficient to cover the principal balance and accrued interest or, in the opinion of management, the interest is collectible.
ALLOWANCE FOR LOAN LOSSES The allowance for loan losses is maintained at a level considered adequate to provide for potential losses based on management's evaluation of the loan portfolio, including the financial strength of guarantors, valuation of collateral and the likelihood of further collection based upon the borrower's financial condition, as well as on prevailing and anticipated economic conditions. In May 1993, the FASB issued SFAS No. 114 "Accounting by Creditors for Impairment of a Loan" that requires impaired loans be measured based upon the present value of expected future cash flows discounted at the loan's effective interest rate or at the loan's market price or fair value of collateral, if the loan is collateral dependent. Adoption of SFAS No. 114 will be required by the Corporation no later than the year ended December 31, 1995, and is not expected to have a material impact on the consolidated financial statements.
PREMISES AND EQUIPMENT Premises and equipment are stated at cost, less accumulated depreciation. Depreciation of premises and equipment is computed using straight-line and accelerated methods over the estimated useful lives of the assets.
REPURCHASE AGREEMENTS Certain securities are sold under agreements to repurchase and are treated as refinancing. The obligation to repurchase such securities is reflected as a liability on the consolidated balance sheets. The dollar amounts of securities underlying the agreements are included in the respective asset accounts.
INCOME TAXES Pursuant to the deferred method under Accounting Principles Board (APB) Opinion 11, which was applied in 1992 and prior years, deferred income taxes are recognized for income and expense items that are reported in different years for financial reporting purposes and income tax purposes using the tax rate applied for the year of the calculation. Under the deferred method, deferred taxes are not adjusted for subsequent changes in tax rates. SFAS No. 109 "Accounting for Income Taxes", was issued by the FASB in February 1992. SFAS No. 109 requires a change from the deferred method under APB Opinion 11 to the asset and liability method of accounting for income taxes. Under the asset and liability method of SFAS No. 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under SFAS No. 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Effective January 1, 1993, the Corporation adopted SFAS No. 109. The cumulative effect of the change in the method of accounting for income taxes was not material.
TRUST FEES AND ASSETS Revenues from trust and agency services are reported on the cash basis in accordance with customary banking practice. Reporting such revenues on the accrual basis would not materially affect the accompanying consolidated financial statements. Assets held by the Bank's Trust Department in a fiduciary or agency capacity for its customers and beneficiaries are not included in the consolidated financial statements as such items are not assets of the Bank.
PER COMMON SHARE DATA Net income per common share data is based on 2,767,519 shares outstanding during each year. All per common share data has been restated to reflect the November 1993 acquisition of Pennyrile Bancshares, Inc. which was accounted for using the pooling of interests method. Common stock options are not included in net income per common share data since their effect is not significant.
B - Acquisitions In 1993, the Corporation purchased On November 30,1993, Pennyrile from Union Planters Corporation, Bancshares, Inc. ("Pennyrile") was Memphis, Tennessee, and Security Trust merged into the Corporation and Federal Savings and Loan Association 246,035 shares of the Corporation's ("Security"), Chattanooga, Tennessee, common stock were issued in exchange the assets and assumed the liabilities for all of the issued and outstanding of three locations of Security within shares of Pennyrile common stock. The McCracken County, Kentucky. These merger was accounted for as a pooling locations had total deposits of of interests, and accordingly, the approximately $62 million. accompanying financial statements have been restated to include the accounts and operations of Pennyrile for periods prior to the merger.
Separate results of the combining entities are as follows:
Pennyrile's net interest income and net income of $1,958,000 and $564,000 respectively, for the eleven months ended November 30, 1993 are included in the Consolidated Statement of Income for the year ended December 31, 1993.
C - Restrictions On Cash And Due From Banks Included in cash and due from banks reserve balances was approximately are certain non interest bearing $1,451,000 and $1,707,000 during 1993 deposits that are held at the Federal and 1992, respectively. At December Reserve in accordance with reserve 31,1993 and 1992, the Corporation was requirements specified by the Federal in compliance with all cash reserve Reserve Board o Governors. The requirements . average amount of those
D - Investment Securities Certain investment securities were securities had an estimated amortized pledged to secure public deposits, cost and estimated fair value of securities sold under agreements to approximately $17,222,555 and repurchase, and for other purposes as $18,564,611, respectively, as of required or permitted by law. These December 31,1993. pledged
Realized gains on sales of investment securities were $575,884 in 1992 and $497,947 in 1991. There were no realized losses on investment securities.
E-Securities Available For Sale Certain securities available $72,750,348 and an estimated fair for sale were pledged to secure value of $73,654,705, respectively, as deposits and securities sold under of December 31, 1993. agreements to repurchase. These pledged securities had an estimated amortized cost of
Realized gains on sales of securities available for sale were $134,010 in 1993. There were no realized losses on sales of securities available for sale.
At December 31,1993 and 1992, terms, interest income would have been non-accrual loans totaled $668,000 approximately $125,000 and $101,500 and $1,043,000, respectively, and greater in 1993 and 1992, respectively. loans contractually past due 90 Interest income recorded on these loans days or more totaled $235,000 and was $11,700 and $10,400 for 1993 and 1992, $176,000, respectively. If those respectively. At December 31,1993 and loans on a non-accrual status had 1992, there were no troubled debt been current and in accordance restructurings. with their original loan
The activity in the allowance for loan losses follows:
It is the policy of the Certain directors and executive Corporation to review each officers of the Corporation and prospective credit in order to their associates are customers of determine an adequate level of and have other transactions with security or collateral, prior to the Corporation in the normal making the loan. The type of course of business. Such collateral will vary and ranges transactions included payments of from liquid assets to real estate. $822,000 during 1991, to a company The Corporation has access to associated with a director of the collateral, in the event of Corporation for construction of borrower default, through adherence bank premises. No material to state lending laws and the payments were made in 1993 or Corporation's sound lending 1992. All loans are made on standards and credit monitoring substantially the same terms, procedures. including interest rates and The Corporation regularly collateral, as those prevailing at monitors its credit concentration the time for comparable for loan purposes, industry and transactions with other persons customer bases. At December and do not involve more than 31,1993 and 1992, there were no normal risk of collectibility or significant credit concentrations present other unfavorable features. within these categories. Total loans to officers, directors and associates of such persons follows:
I - BORROWINGS The Corporation has a loan agreement with a regional bank providing both revolving and term debt. The revolving credit agreement provides for two lines of credit, $2,500,000 and $7,500,000. Both are due June 30, 1994. Interest on the $2,500,000 line of credit is payable quarterly at a rate of one-quarter of one percent point less than the lender's prime rate (prime rate of 6% at December 31, 1993). Interest on the 7,500,000 line of credit is payable quarterly and the rate of each advance is chosen from two options available to the borrower. The options are either a rate of one-quarter of one percentage point less than a participating regional bank's base rate or a rate based on the thirty-day London Interbank Offered Rate (LIBOR)(4.69% actual rate at December 31, 1993). Additional funds available under these lines of credit totaled $9,760,000 at December 31, 1993.
Term debt (debt with original maturities of more than one year) at December 31 consisted of the following:
The loan agreement with the regional bank stipulates, among other things, maintenance of certain operating and equity ratios, and that the Corporation will not incur any secured debt, or sell or encumber investments in its subsidiaries without the lender's prior consent. As of December 31, 1993, the Corporation was in compliance with all covenants contained in the loan agreement. In 1993 the term note had an average interest rate of 6%. The Bank has an available credit line at the Federal Home Loan Bank (FHLB) of approximately $17,800,000. The average rate of interest paid on these borrowings during 1993 was 4.90%. These borrowings have varying maturity dates in 1995 and 1996; however, according to the funding programs of the FHLB, all or a portion of approximately $10,035,000 of these borrowings may be paid at specific intervals in 1994.
Maturities of term debt outstanding at December 31, 1993 are as follows:
J - DIVIDEND RESTRICTIONS
Regulatory banking laws restrict the amount of dividends that may by paid by the subsidiary banks without obtaining prior approval of the regulatory authority. Under such restrictions, the subsidiary banks will have available for payment of dividends during 1994, retained net profits, as defined by the regulatory authority, of approximately $11,695,000, plus net profits for 1994.
K - COMMON STOCK OPTIONS
Under the Corporation's 1986 Stock Option Plan, 105,000 shares of the Corporation's common stock had been reserved. At December 31, 1993, options for all of these shares had been granted. At December 31, 1993, options totaling 50,000 shares were exercisable at an average price of $17.94 per share.
At the Annual Meeting of Shareholders held in April 1993, an additional 200,000 shares of the Corporation's common stock were reserved for future grant. At December 31, 1993, 197,000 shares were available for future grant at the fair market value at the time of the grant; none of the options were exercisable at that date.
Activity with respect to outstanding common stock options:
L - INCOME TAXES
The tax effect of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at December 31, 1993 are as follows:
Income tax expense consisted of:
The tax expense relating to gains on sales of securities (exclusive of non-deductible net capital losses) approximated $45,600 in 1993, $195,000 in 1992, and $169,300 in 1991.
Deferred income taxes (benefits) resulting from timing differences in the recognition of revenues and expenses for tax and financial reporting purposes for 1992 and 1991 are as follows:
The reasons for the differences between income taxes on the consolidated financial statements and the amount computed by applying the statutory rate to income before income taxes are as follows:
A deferred tax asset of approximately $1,692,000 is included in other assets at December 31, 1992.
M - EMPLOYEE BENEFIT PLANS
Employees are covered by two defined contribution employee benefit plans (Plans). All employees are eligible to participate in the Plans after completing various lengths of employment. Participants are immediately vested in employee contributions, with 100% vesting in employer contributions after 5 years of service or upon attainment of normal retirement age. The annual cost of the Plans is based upon percentages of participant compensation and contributions to the Plans, plus any discretionary amounts as determined by the Board of Directors. Total costs charged to operations for the plans in 1993, 1992, and 1991 were $464,994, $457,400, and $417,000, respectively.
N - OFF-BALANCE SHEET RISK, COMMITMENTS AND CONTINGENT LIABILITIES
The Corporation has financial instruments which properly are not reflected in the consolidated financial statements. These include commitments to extend credit and standby letters of credit. These instruments involve elements of credit and interest rate risk. Nonperformance or default by the other party to loan commitments or standby letter of credit could result in a financial loss to the Corporation equal to the amount of the loan commitments and standby letters of credit. The same credit and collateral policies are used by the Corporation in issuing these financial instruments as are used for loans. Standby letter of credit are conditional commitments issued by the Corporation to guarantee the payment by a customer to a third party. The terms and risk of loss involved is issuing standby letters of credit are similar to those involved in issuing loan commitments and extending credit. As of December 31, 1993 and 1992, commitments outstanding under standby letters of credit totaled $5,000,000 and $5,155,000, respectively.
Commitments to extend credit are agreements to lend to a customer under a set of specified terms and conditions. Commitments generally have fixed expiration dates or termination clauses and may require payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Loan commitments may be secured or unsecured. In the case of secured commitments, collateral varies but may include commercial or residential properties; business assets such as inventory, equipment, accounts receivable, securities, or other business or personal assets or guarantees. As of December 31, 1993 and 1992, commitments to extend credit totaled $82,726,000 and $71,993,000, respectively.
O - FAIR VALUE OF FINANCIAL INSTRUMENTS
The following disclosure of the estimated fair value of financial instruments is made in accordance with the requirements of SFAS No. 107, "Disclosure about fair Value of Financial Instruments." The estimated fair value amounts have been determined by the Corporation using available market information and appropriate valuation methodologies. However, considerable judgment is necessarily required to interpret market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Corporation could realize in a current market exchange. The use of different market assumptions and / or estimation methodologies may have a material effect on the estimated fair value amounts.
The fair value of investment securities, and securities available for sale is based on quoted market prices, dealer quotes, and prices obtained from independent pricing services. The fair value of loans, deposit, various types of borrowings and term debt is estimated based on present values using entry- value interest rates applicable to each category of such financial instruments. The fair value of commitments to extend credit are not included as they are not material.
No adjustment was made to the entry-value interest rates for changes in credit of performing commercial loans for which there are no known credit concerns. Management segregates loans in appropriate risk categories. Management believes that the risk factor embedded in the entry-value interest rates along with the general reserves applicable to the performing commercial loan portfolio for which there are no known credit concerns result in a fair valuation of such loans on an entry-value basis. The fair value of nonperforming loans with a recorded book value of $938,000 and $1,970,000 at December 31, 1993 and 1992, respectively, was not estimated because it is not practicable to reasonably assess the credit adjustment that would be applied in the marketplace for such loans.
The fair value estimates presented herein are based on pertinent information available to management as of December 31, 1993 and 1992. Loan and deposit information for Pennyrile Bancshares, Inc. was not available at December 31, 1992; therefore, no attempt was made to estimate the fair value of these assets or liabilities. Although management is not aware of any factors that would significantly affect the estimated fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since that date and, therefore, current estimates of fair value may differ significantly from the amounts presented herein.
R - Subsequent Event
On January 10, 1994, the Corporation entered into an Agreement and Plan of Reorganization (Agreement) with BMC Bankcorp, Inc. (BMC). The Agreement provides,among other things, for the merger of BMC into a wholly owned subsidiary of the Corporation. Terms of Agreement call for BMC shareholders to receive two shares ofthe Corporation's common stock for each share of BMC common stock held.Consummation of the merger is subject to certain conditions including approval of the shareholders of BMC and the appropriate regulatory agencies. The merger is also subject to termination by the parties by mutual consent or upon the occurrence of certain specified events.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information set out at page 2 of the Registrant's Proxy Statement in the section entitled "Election of Directors" with respect to security ownership of certain beneficial owners and management is incorporated herein by reference.
ITEM 13.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information set out in the section entitled "Transactions with Management" of Registrant's Proxy Statement at page 16 is incorporated herein by reference.
PART IV
ITEM 14.
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8 - K
(a) (1) Financial Statements filed The consolidated financial 									 statements together withthe report thereon of 									 Deloitte & Touche, are included in this Form 10-K under Item 8 of Part II.
(2) Financial Statement Schedules
Schedules to the consolidated financial statements 										are omitted, as the required information is not applicable or the 										information is presented in the consolidated financial statements 										or related notes.
(3) List of Exhibits Filed
The exhibits listed in the Exhibit Index on pages through of this Form 10-K are filed herewith or are incorporated herein by reference. Management contracts and compensatory 										plans and arrangements required to be filed as exhibits to 										this Form 10-K pursuant to Item 14(c) thereon by a double asterisk (**).
(b) Reports on Form 8 - K
None.
(c) Exhibits
The exhibits listed on the Exhibit Index on pages through of this Form 10 - K are filed or are incorporated 		 herein by reference.
(d) Financial Statement Schedules
None.
SIGNATURES Pursuant to the requirement 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.
CBT CORPORATION (REGISTRANT)
By /s/ William J. Jones By /s/ Eddie L. Holman William J. Jones Eddie L. Holman President, Chief Executive Vice President and Principal Officer and Director Financial and Accounting Officer Date: March 28, 1994 Date: March 28, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the date indicated.
By /s/Irving P. Bright, Jr. By /s/John Burman Irving P. Bright, Jr., Director John Burman, Director Date: March 28, 1994 Date: March 28, 1994
By /s/Patrick J. Cvengros By /s/William H. Dyer Patrick J. Cvengros, Director William H. Dyer, Director Date: March 28, 1994 Date: March 28, 1994
By /s/Louis A. Haas By /s/F. Donald Higdon Louis A. Haas, Director F. Donald Higdon, Director Date: March 28, 1994 Date: March 28, 1994
By /s/M. Leon Johnson By /s/Louis M. Michelson M. Leon Johnson, Director Louis M. Michelson, Director Date: March 28, 1994 Date: March 28, 1994
By /s/Louis D. Myre By /s/David M. Paxton Louis D. Myre, Director David M. Paxton, Director Date: March 28, 1994 Date: March 28, 1994
By /s/Robert P. Petter By /s/Joseph A. Powell Robert P. Petter, Director Joseph A. Powell, Director Date: March 28, 1994 Date: March 28, 1994
By /s/Allan R. Rhodes By /s/William A. Usher Allan R. Rhodes, Director William A. Usher, Director Date: March 28, 1994 Date: March 28, 1994
By /s/William J. Jones William J. Jones, Director Date: March 28, 1994 EXHIBIT INDEX
SEQUENTIALLY NUMBERED NUMBER DESCRIPTION PAGE
3(a) Articles of Incorporation of CBT Corporation are incorporated by reference to Exhibit 3 of the Registration Statement on Form S-14 of CBT Corporation (File No. 2-83583).
3(b) Articles of Amendment to Articles of Incorporation of CBT Corporation are incorporated by reference to Exhibit 3(b) of the Form 10-K of CBT Corporation for the year ended December 31, 1987.
3(c) Articles of Amendment to Articles of Incorporation of CBT Corporation are incorporated by reference to Exhibit 3(c) of the Form 10-K of CBT Corporation for the year ended December 31, 1989.
3(d) Articles of Amendment to Articles of Incorporation of CBT Corporation are incorporated by reference to Exhibit 3(d) of the Form 10-K of CBT Corporation for the year ended December 31, 1992.
3(e) Bylaws of CBT Corporation are incorporated by reference to Exhibit 3 to the Registration Statement on Form S-14 of CBT Corporation (File No. 2-83583).
10(a) **CBT Corporation 1986 Stock Option Plan is incorporated by reference to Exhibit 4 of Registration Statement on Form S-8 of CBT Corporation (Registration No. 33-28512).
10(b) **CBT Corporation 1993 Stock Option Plan incorporated by reference to Form 10-Q of CBT Corporation dated March 31, 1993.
10(c) **Salary Continuance Agreement is incorporated by reference to Exhibit 10(c) of the Form 10-K of CBT Corporation for the year ended December 31, 1990.
10(d) **Incentive Compensation Plans are incorporated by reference to Exhibit 10(d) of the Form 10-K of CBT Corporation for the year ended December 31, 1990.
10(e) Agreement to Purchase Assets and Assume Liabilities among Union Planters Corporation and Security Trust Savings and Loan Association and CBT Corporation is incorporated by reference to Exhibit 10(e) of the Form 10-K of CBT Corporation for the year ended December 31, 1992.
10(f) Plan of Exchange and Share Exchange Agreement between CBT Corporation and Pennyrile Bancshares, Inc. are incorporated by reference to Exhibit 2, respectively, of the Registration Statement on Form S-4 of CBT Corporation dated September 30, 1993.[File No. 33-69644].
10(g) Plan of Exchange and Share Exchange Agreements between CBT Corporation, CBT Acquisition Corporation and BMC Bankcorp, Inc. are incorporated by reference to Exhibits 2(a) and 2(b) of Form 8-K of CBT Corporation dated January 10, 1994.
21 Subsidiaries of CBT Corporation
23 Consent of Independent Auditors.
**Denotes management contracts or compensatory plans or arrangements required to be filed as exhibits to this Form 10-K pursuant to Item 14(c).