UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark one)
| x | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE |
| SECURITIES EXCHANGE ACT OF 1934 |
| For the fiscal year ended December 31, 2002 |
OR
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE |
| SECURITIES EXCHANGE ACT OF 1934 |
| For the transition period from to |
Commission file number 0-12724
A. Full title of the plan and the address of the plan, if different from that of the issuer named below:
Belmont National Bank 401(k) Profit Sharing Plan
B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:
Belmont Bancorp.
| Description |
Page Number | |
| 1. | ||
| Financial Statements: |
||
| 2. | ||
| 3. | ||
| 4. | ||
| Supplemental Schedule: |
||
| Schedule H, Line 4 Schedule of Assets (Held at End of Year) December 31, 2002 |
8. | |
| 9. | ||
| 10. | ||
(ii)
To the Board of Trustees
Belmont National Bank 401(k) Profit Sharing Plan
We have audited the accompanying statements of net assets available for benefits of Belmont National Bank 401(k) Profit Sharing Plan as of December 31, 2002 and 2001, and the related statements of changes in net assets available for benefits for the years then ended. 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 of America. 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 Belmont National Bank 401(k) Profit Sharing Plan as of December 31, 2002 and 2001, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as whole. The supplemental schedule of assets held at end of year is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employees Retirement Security Income 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 the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.
/s/ SEBER, DILLENBECK & CRAFT, P.C.
Seber, Dillenbeck & Craft, P.C.
Kalamazoo, Michigan
June 23, 2003
1
BELMONT NATIONAL BANK 401(K) PROFIT SHARING PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2002 and 2001
| 2002 |
2001 | |||||
| INVESTMENTS AT FAIR VALUE, Notes B and D |
||||||
| Common stock |
$ | 549,576 | $ | 453,394 | ||
| Mutual funds |
1,333,979 | 1,607,013 | ||||
| Participant notes receivable |
26,494 | 25,000 | ||||
| 1,910,049 | 2,085,407 | |||||
| RECEIVABLES |
||||||
| Employer’s contributions |
143,906 | — | ||||
| CASH EQUIVALENTS |
243,746 | 172,941 | ||||
| NET ASSETS AVAILABLE FOR BENEFITS |
$ | 2,297,701 | $ | 2,258,348 | ||
See Accompanying Notes to the Financial Statements
2
BELMONT NATIONAL BANK 401(K) PROFIT SHARING PLAN
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the Years Ended December 31, 2002 and 2001
| 2002 |
2001 | |||||
| ADDITIONS TO NET ASSETS ATTRIBUTED TO: |
||||||
| Interest and dividends |
$ | 17,543 | $ | 40,355 | ||
| Contributions: |
||||||
| Employer |
143,906 | 39,880 | ||||
| Participants |
175,441 | 129,509 | ||||
| 319,347 | 169,389 | |||||
| TOTAL ADDITIONS |
336,890 | 209,744 | ||||
| DEDUCTIONS FROM NET ASSETS ATTRIBUTED TO: |
||||||
| Net depreciation in fair value of investments |
207,044 | 28,390 | ||||
| Benefits paid to participants |
103,690 | 108,996 | ||||
| TOTAL DEDUCTIONS |
310,734 | 137,386 | ||||
| NET INCREASE PRIOR TO TRANSFERS |
26,156 | 72,358 | ||||
| Transfers into the plan |
13,197 | 62,140 | ||||
| NET INCREASE |
39,353 | 134,498 | ||||
| Net assets available for benefits at beginning of year |
2,258,348 | 2,123,850 | ||||
| NET ASSETS AVAILABLE FOR BENEFITS AT END OF YEAR |
$ | 2,297,701 | $ | 2,258,348 | ||
See Accompanying Notes to the Financial Statements
3
BELMONT NATIONAL BANK 401(K) PROFIT SHARING PLAN
For the Years Ended December 31, 2002 and 2001
NOTE A—Description of the Plan
The following description of the Belmont National Bank 401(k) Profit Sharing Plan (the plan) provides only general information. Belmont National Bank is a wholly-owned subsidiary of Belmont Bancorp. 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 covering all employees of Belmont National Bank (the Company) who are age 18 or older. It is subject to provisions of the Employee Retirement Income Security Act of 1974 (ERISA).
Contributions
Each year, participants may contribute a percentage of pretax annual compensation, as defined in the plan agreement. The plan also permits voluntary after-tax contributions by employees of up to 6% of compensation, as defined by the plan. The Company contributes a matching contribution equal to 50% of each participant’s salary reduction up to 4% of compensation. Additional discretionary employer amounts may be contributed as described by the plan document. Contributions are invested in common stocks, mutual funds, and money market accounts. Contributions are subject to certain limitations. Certain administrative expenses of the plan were paid by the plan sponsor.
Participant Accounts
Each participant’s account is credited with the participant’s contribution and allocation of (a) the Company’s contribution (b) plan earnings and (c) the reallocation of forfeited non-vested accounts. Allocations are made as defined in the plan agreement. The benefit to which a participant is entitled is the benefit that can be provided from the participant’s vested account.
Vesting
Participants are immediately vested in their contributions plus actual earnings thereon. Vesting in the Company’s contribution portion of their accounts plus actual earnings thereon is based on years of continuous service. A participant is 100% vested after five years of credited service (seven in 2001).
4
BELMONT NATIONAL BANK 401(K) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For the Years Ended December 31, 2002 and 2001
NOTE A—Description of the Plan (Continued)
Investment Options
Upon enrollment in the plan, each participant may direct contributions into any of the investment options available under the plan.
Participant Notes Receivable
Participants may borrow from their fund accounts a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. Loan terms range from one to five years, or longer for the purchase of a primary residence. The loans are secured by the balance in the participant’s account and bear interest at 1.5% above the prime rate (a rate equal to the US Treasury note of the same time duration during 2001). Principal and interest are required to be paid ratably through payroll deductions.
Payment of Benefits
Upon termination of service, a participant may elect to receive either a lump-sum amount equal to the value of the participant’s vested interest in his or her account, or periodic installments over a period not exceeding the life expectancy of the participant or the joint lives of the participant and spouse.
NOTE B—Summary of Significant Accounting Policies
Basis of Accounting
The financial statements of the plan are prepared under the accrual method of accounting.
Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires the plan’s management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results may differ from those estimates. It is at least reasonably possible that a significant change may occur in the near term for the estimates of investment valuation.
5
BELMONT NATIONAL BANK 401(K) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For the Years Ended December 31, 2002 and 2001
NOTE B—Summary of Significant Accounting Policies (Continued)
Investment Valuation
Investment securities are stated at fair value. Shares of registered investment companies are valued at quoted market prices which represent the net asset value of shares held by the plan at year-end. Belmont Bancorp stock is valued at its quoted market price. Participant notes receivable are valued at cost which approximates fair value. The realized gain or loss on securities is the difference between the proceeds received and the average cost of the investments sold.
Payment of Benefits
Benefits are recorded when paid.
NOTE C—Tax Status
The Internal Revenue Service has determined and informed the Company by letters dated March 4, 2003 and October 27, 1997, that the plan is designed in accordance with applicable sections of the Internal Revenue Code (IRC). Therefore, no provision for income taxes has been included in these financial statements.
NOTE D—Investments
The following table presents investments that represent 5 percent or more of the plan’s net assets as of December 31:
| 2002 |
2001 | |||||
| Investments at fair value determined by quoted market price: |
||||||
| Belmont Bancorp Stock |
$ | 549,576 | $ | 453,394 | ||
| Oppenheimer Main Street Fund N |
421,989 | — | ||||
| Oppenheimer Quest Balanced Value Fund N |
401,647 | — | ||||
| Oppenheimer Main Street Small Cap Fund N |
124,695 | — | ||||
| Oppenheimer Global Fund N |
121,493 | — | ||||
| Oppenheimer Capital Appreciation Fund N |
114,552 | — | ||||
| Federated Stock Trust |
— | 656,739 | ||||
| Federated Managed Moderate Growth Portfolio |
— | 347,945 | ||||
| Federated Auto Cash Management Fund |
— | 169,531 | ||||
| Federated Managed Conservative Growth Portfolio |
— | 162,571 | ||||
| Federated Managed Growth Portfolio |
— | 145,003 | ||||
6
BELMONT NATIONAL BANK 401(K) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
For the Years Ended December 31, 2002 and 2001
NOTE E—Party-In-Interest Transactions
Parties-in-interest are defined under DOL regulations as any fiduciary of the plan, any party rendering service to the plan, the employer, and certain others.
The plan held the following party-in-interest investments (at market value) at December 31:
| 2002 |
2001 | |||||
| Belmont Bancorp Stock |
$ | 549,576 | $ | 453,394 | ||
Plan administration is provided by a company that is wholly-owned by the majority stockholder of Belmont National Bank.
NOTE F—Administration of the Plan
Certain administrative functions are performed by employees of the Company. No such employee receives compensation from the plan for these services. Administrative expenses for the plan’s fees are paid by the Company.
NOTE G—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% vested in their accounts.
NOTE H—Regulatory Matters
Belmont National Bank (Bank) and its parent, Belmont Bancorp (Company), had been operating under an Agreement dated August 1999 with the Federal Reserve Bank of Cleveland, the Company’s primary regulator, and a Consent Order with the Office of the Comptroller of the Currency, the Bank’s primary regulator. The Agreement and Consent Order were terminated December 17, 2002 and October 3, 2002, respectively.
7
BELMONT NATIONAL BANK 401(K) PROFIT SHARING PLAN
SCHEDULE H, LINE 4i—SCHEDULE OF ASSETS HELD AT END OF YEA R
December 31, 2002
Plan Sponsor: Belmont National Bank
Plan EIN: 38-1895472
Plan Number: 002
| (a) |
(b) Identity of issue or borrower |
(c) Description of investment |
(d) Cost # |
(e) Current | ||||
| * |
Belmont Bancorp Stock | Common Stock, 122,128 shares | $ — | $ 549,576 | ||||
| Oppenheimer Main Street Fund N | Mutual Fund | — | 421,989 | |||||
| Oppenheimer Quest Balanced Value Fund N | Mutual Fund | — | 401,647 | |||||
| Oppenheimer Cash Reserve Fund N | Money Market | — | 242,706 | |||||
| Oppenheimer Main Street Small Cap Fund N | Mutual Fund | — | 124,695 | |||||
| Oppenheimer Global Fund N | Mutual Fund | — | 121,493 | |||||
| Oppenheimer Capital Appreciation Fund N | Mutual Fund | — | 114,552 | |||||
| Oppenheimer Limited Term Government Fund N | Mutual Fund | — | 99,937 | |||||
| Participant Loans | Interest ranging from 4.75% to 5.75% | — | 26,494 | |||||
| Oppenheimer Strategic Income Fund N | Mutual Fund | — | 16,955 | |||||
| Oppenheimer High Yield Fund N | Mutual Fund | — | 5,746 | |||||
| Oppenheimer Champion Income Fund N | Mutual Fund | — | 3,861 | |||||
| Oppenheimer US Government Trust N | Mutual Fund | — | 3,452 | |||||
| Oppenheimer Bond Fund N | Mutual Fund | — | 3,358 | |||||
| Oppenheimer Main Street Opportunity Fund N | Mutual Fund | — | 2,867 | |||||
| Oppenheimer Growth Fund N | Mutual Fund | — | 2,696 | |||||
| Oppenheimer Trinity Large Cap Growth Fund N | Mutual Fund | — | 2,489 | |||||
| Oppenheimer Enterprise Fund N | Mutual Fund | — | 1,728 | |||||
| Oppenheimer Global Opportunities Fund N | Mutual Fund | — | 1,414 | |||||
| Oppenheimer Capital Income Fund N | Mutual Fund | — | 1,042 | |||||
| Money Market Account | Money Market | — | 1,041 | |||||
| Oppenheimer Quest Global Value Fund, Inc. N | Mutual Fund | — | 891 | |||||
| Oppenheimer Trinity Core Fund N | Mutual Fund | — | 861 | |||||
| Oppenheimer MidCap Fund N | Mutual Fund | — | 737 | |||||
| Oppenheimer Convertible Securities Fund N | Mutual Fund | — | 610 | |||||
| Oppenheimer Quest Capital Value Fund, Inc. N | Mutual Fund | — | 560 | |||||
| Oppenheimer Small Cap Value Fund N | Mutual Fund | — | 201 | |||||
| Oppenheimer Quest Value Fund, Inc. N | Mutual Fund | — | 197 | |||||
| $ — | $2,153,795 | |||||||
| * | Indicates party-in-interest. |
| # | Investments are participant directed; therefore, historical cost is not required. |
See Independent Auditors’ Report
8
The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.
| BELMONT NATIONAL BANK 401(K) PROFIT SHARING PLAN | ||||||
| Date: June 23, 2003 |
By: | /s/ NELL L. MURRELL | ||||
| Nell L. Murrell | ||||||
| Assistant Vice President, | ||||||
| Human Resources Officer | ||||||
9
| Exhibit No. |
Description | |
| 23.1 |
Consent of Independent Public Accountants | |
10