SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the fiscal year ended December 31, 2003 or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from __________ to __________
Commission file number 0-25033
A. Full title of the plan and the address of the plan, if
different from that of the issuer named below:
The Banc Corporation 401(k) Plan
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
The Banc Corporation
17 North Twentieth Street
Birmingham, Alabama 35203
The Banc Corporation 401(k) Plan
Audited Financial Statements and Supplemental Schedule
As of December 31, 2003 and 2002 and for the year ended December 31, 2003
CONTENTS
Report of Independent Registered Public Accounting Firm................................................. 1
Audited Financial Statements
Statements of Net Assets Available for Benefits......................................................... 2
Statement of Changes in Net Assets Available for Benefits............................................... 3
Notes to Financial Statements........................................................................... 4
Supplemental Schedule
Schedule H, Line 4i- Schedule of Assets (Held at End of Year)........................................... 9
Report of Independent Registered Public Accounting Firm
Plan Administrator
The Banc Corporation 401(k) Plan
We have audited the accompanying statements of net assets available for
benefits of The Banc Corporation 401(k) Plan as of December 31, 2003 and 2002,
and the related statement of changes in net assets available for benefits for
the year ended December 31, 2003. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. 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, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
December 31, 2003 and 2002, and the changes in its net assets available for
benefits for the year ended December 31, 2003, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the
financial statements taken as a whole. The accompanying supplemental schedule
of assets (held at end of year) as of December 31, 2003, is presented for
purpose of additional analysis and is not a required part of the financial
statements but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in our audits of the financial
statements and, in our opinion, is fairly stated in all material respects in
relation to the financial statements taken as a whole.
/s/ Ernst & Young LLP
Birmingham, Alabama
June 24, 2003
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The Banc Corporation 401(k) Plan
Statements of Net Assets Available for Benefits
DECEMBER 31
2003 2002
---------- ----------
ASSETS
Investments, at fair value $5,577,004 $5,205,654
Employer contributions receivable 277,950 298,159
---------- ----------
Net assets available for benefits $5,854,954 $5,503,813
========== ==========
See accompanying notes.
2
The Banc Corporation 401(k) Plan
Statement of Changes in Net Assets Available for Benefits
YEAR ENDED
DECEMBER 31,
2003
------------
ADDITIONS
Company contributions $ 312,542
Participant contributions 909,251
Interest and dividends 227,428
Transfer-in/rollover 49,098
----------
1,498,319
DEDUCTIONS
Benefits paid to participants 1,517,537
Administrative expenses 7,638
----------
1,525,175
Net appreciation in fair value of investments 377,997
----------
Net increase 351,141
Net assets available for benefits at beginning of year 5,503,813
----------
Net assets available for benefits at end of year $5,854,954
==========
See accompanying notes.
3
The Banc Corporation 401(k) Plan
Notes to Financial Statements
December 31, 2003
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION
The financial statements of The Banc Corporation 401(k) Plan (the Plan) have
been prepared in conformity with accounting principles generally accepted in
the United States.
INVESTMENT VALUATION
Investments in The Banc Corporation's (the Company's) common stock is traded on
the Nasdaq Stock Market under the trading symbol, "TBNC" and is valued using
the closing price on the last business day of the plan year. Cash and cash
equivalents are stated at fair value, which is approximated by cost.
Investments in the pooled separate accounts are stated at fair value based on
participation units owned by the Plan. Fair values of the participation units
owned by the Plan in the pooled separate accounts are based on quoted
redemption values on the last business day of the Plan year as determined by
Provident Financial Advisors (the Custodian).
USE OF ESTIMATES
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates that affect
the amounts reported in the financial statements and accompanying notes. Actual
results could differ from those estimates.
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2. DESCRIPTION OF THE PLAN
The following description of the Plan provides only general information.
Participants should refer to the Plan agreement for a more complete description
of the Plan's provisions.
GENERAL
The Plan is a defined contribution plan which covers employees of the Company
who have attained age 21. The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended (ERISA).
CONTRIBUTIONS
Each year, participants may contribute up to 15% of pretax annual compensation,
as defined in the Plan subject to Internal Revenue limits. Participants may also
contribute amounts representing distributions from other qualified defined
benefit or defined contribution plans. The Company may, at its discretion, match
participants' contributions each year up to a maximum of 6% of salary-deferred
contributions. The Company contributed $312,542 to the Plan in 2003.
VESTING
Participants are immediately vested in their contributions plus actual earnings
thereon. Vesting in the Company contribution portion of their accounts plus
actual earnings thereon is based on years of continuous service. A participant
is 100 percent vested after five years of credited service.
2. DESCRIPTION OF THE PLAN (CONTINUED)
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's contributions and
allocations of (a) the Company's contributions and (b) Plan earnings, and is
charged with an allocation of administrative expenses. Allocations are based on
participant earnings or account balances, as defined. Forfeited balances of
terminated participants' nonvested accounts are used to reduce the Company's
discretionary matching contributions in accordance with the Plan agreement.
During 2003, no forfeitures were used to reduce the Company's discretionary
matching contributions. The benefit to which a participant is entitled is the
benefit that can be provided from the participant's account.
PARTICIPANT LOANS
Participants may borrow from their fund accounts up to a maximum equal to the
lesser of $50,000 or 50% of their vested account balance. Loan terms range from
1-5 years unless the loan is for the purchase of a primary residence. In such
case, the term of the loan shall be determined by the
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Company based on maturity dates for similar loans in the local area. The loans
are secured by the balance in the participant's account and bear interest at a
rate commensurate with local prevailing rates as determined by the Plan
administrator. Principal and interest are paid ratably through monthly payroll
deductions.
PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate
the Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100 percent vested in their accounts.
PAYMENT OF BENEFITS
Upon termination of service, death, disability, or retirement, a participant
may receive a lump-sum amount equal to the vested value of his or her account,
or periodic equal installments for a period not to exceed the joint and last
survivor life expectancy of the participant and the participant's beneficiary.
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2. DESCRIPTION OF THE PLAN (CONTINUED)
ADMINISTRATIVE EXPENSES
The Company pays all administrative expenses, other than custodial fees, on
behalf of the Plan. Custodial fees are paid by the Plan.
3. PARTIES-IN-INTEREST TRANSACTIONS
Provident Bank is the custodian for the plan's investments. Certain plan
investments are units of pooled separate accounts managed by Federated
Retirement Services, the recordkeeper. One of the investment vehicles in the
Plan is The Banc Corporation common stock. The Company pays for all legal,
accounting and other services on behalf of the Plan.
4. INCOME TAX STATUS
The Plan has not received an determination letter from the Internal Revenue
Service stating that the plan is qualified under Section 401 (a) of the
Internal Revenue Code (the "Code"). However, the plan administrator believes
that the Plan has been designed to comply with the requirement of the Code and
has indicated that it will take the necessary steps, if any, to bring the
Plan's operations and/or document into compliance with the Code.
5. INVESTMENTS
During 2003, the Plan's investments (including investments bought, sold, as
well as held during the year) appreciated in fair value as determined by quoted
market prices as follows:
The Banc Corporation common stock $180,018
Pooled separate accounts 197,979
--------
$377,997
========
6. RISK AND UNCERTAINTIES
The Plan invests in various investment securities. Investment securities are
exposed to various risks such as interest rate, market and credit risks. Due to
the level of risk associated with certain investment securities, it is at least
reasonably possible that changes in the values of investment securities will
occur in the near term and that such changes could materially affect
participants' account balances and the amounts reported in the statement of net
assets available for benefits.
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5. INVESTMENTS (CONTINUED)
The fair value of individual investments that represent 5% or more of the
Plan's net assets at December 31, 2003 is as follows:
Federated Capital Preservation $1,408,798
Federated Capital Appreciation 558,407
Federated Total Return 1,817,185
The Banc Corporation common stock 925,361
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Supplemental Schedule
(C) DESCRIPTION OF INVESTMENT
INCLUDING MATURITY DATE, RATE (D)
(B) IDENTITY OF ISSUE, OF INTEREST, COLLATERAL, PAR COST (E) CURRENT
(A) BORROWER, LESSOR, OR SIMILAR OR MATURITY VALUE VALUE
PARTY
--- ---------------------------- ----------------------------- -------- -----------
Cash and Cash Equivalents:
* Provident Bank Cash Account ** $ 4,426
* Federated Managed Growth & Income ** 10,238
Managed Growth ** 17,406
Company common stock:
* The Banc Corporation Common stock $783,891 925,361
Pooled Separate Accounts:
* Federated. Baron Growth Fund ** 110,053
Capital Preservation ** 1,408,798
Stock Trust ** 66,141
Equity FDS ** 134,644
Cap Appreciation ** 558,407
GNMA- Select Service ** 15,362
Mid-Cap Index Fund ** 83,472
Max-Cap FD ** 100,327
International Equity Fund ** 32,464
Total Return ** 1,817,185
International Small Co ** 32,851
Turner Small Cap ** 137,926
Janus Advisor Service Cap
Apprec. ** 11,974
American Century Equity Income ** 25,035
-------- ----------
5,492,070
Participant loans Interest rates range from
5.00% to 5.75%
** 84,934
Total investments $5,577,004
* Party-in-interest
** Column (d) has not been presented as this information is not
applicable.
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SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act
of 1934, the Administrator of The Banc Corporation 401(k) Plan has duly caused
this Annual Report to be signed on its behalf by the undersigned hereunto duly
authorized.
THE BANC CORPORATION 401(K) PLAN
/s/ Fred Rogan
-----------------------------------------------
Fred Rogan
Administrator
Dated: June 28, 2004
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EXHIBIT INDEX
Exhibit No. Exhibit
23 Consent of Ernst & Young LLP.
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