ITEM 1. BUSINESS
National City Bancshares, Inc., (hereinafter referred to as the Corporation), is an Indiana Corporation organized in 1985 to engage in the business of a bank holding company. Based in Evansville, Indiana, the Corporation has eleven wholly owned subsidiaries, ten commercial banks serving twenty towns and cities with a total of thirty banking centers and an insurance agency. Each subsidiary, its locations, number of offices, year founded and date of merger is shown below. In addition to these mergers, Chandler State Bank was acquired by the Corporation in August 1986 and merged into The National City Bank of Evansville in June 1987.
The Corporation's subsidiary banks provide a wide range of financial services to the communities they serve in southwestern Indiana, western Kentucky and southeastern Illinois. These services include various types of deposit accounts; safe deposit boxes; safekeeping of securities; automated teller machines; consumer, mortgage and commercial loans; mortgage loan sales and servicing; letters of credit; accounts receivable management (financing, accounting, billing and collecting); and complete personal and corporate trust services. All banks are members of the Federal Deposit Insurance Corporation.
The Corporation's nonbank subsidiary, Ayer-Wagoner-Deal Insurance Agency, Inc., operates as an insurance agency offering various insurance products through several insurance companies or underwriters and sells the following types of insurance: life, casualty, property, homeowners, business, disability and automobile.
At December 31, 1993, the Corporation and its subsidiaries had 388 full-time equivalent employees. The subsidiaries provide a wide range of employee benefits and consider employee relations to be excellent.
COMPETITION
The Corporation has active competition in all areas in which it presently engages in business. Each subsidiary bank competes for commercial and individual deposits and loans with commercial banks, savings and loan associations, credit unions connected with local businesses and other non-banking institutions. The Corporation's insurance agency competes with several other insurance agencies in Rockport, Indiana, and neighboring communities.
FOREIGN OPERATIONS
The Corporation and its subsidiaries have no foreign branches or significant business with foreign obligers or depositors.
REGULATION AND SUPERVISION
The Corporation, as a bank holding company registered under the Bank Holding Company Act of 1956, as amended ("Act"), is subject to regulation by the Board of Governors of the Federal Reserve System ("Board"). Under the Act, the Corporation is required to obtain the prior approval of the Board before acquiring direct or indirect ownership or control of more than 5% of the voting shares of any bank which is not already majority owned. In addition, the Corporation is prohibited under the Act, with certain exceptions, from acquiring direct or indirect ownership or control of 5% or more of the voting shares of any company which is not a bank. The Corporation may engage in, and may own shares of companies engaged in, certain activities found by the Board to be so closely related to banking as to be a proper incident thereto. The Act prohibits the acquisition by a bank holding company of shares of a bank located outside the state in which the operations of its banking subsidiaries are principally conducted,
unless such an acquisition is specifically authorized by statute of the state in which the bank to be acquired is located. The Corporation is required by the Act to file annual reports of its operations with the Board and such additional information as they may require pursuant to the Act, and the Corporation and its subsidiaries are subject to examination by the Board. Further, under the Act and the regulations of the Board, the Corporation and its subsidiaries are prohibited from engaging in certain tie-in arrangements with respect to any extension of credit or provision of property or services. The Board has adopted "capital adequacy guidelines" for its use in examining and supervising bank holding companies. A bank holding company's ability to pay dividends and expand its business through the acquisition of additional subsidiaries can be restricted if its capital falls below levels established by these guidelines.
The primary supervisory authority of The National City Bank of Evansville and The Peoples National Bank of Grayville is the Comptroller of the Currency, who regularly examines such areas as reserves, loans, investments, management practices and other aspects of bank operations. The Comptroller of the Currency has the authority to prevent a national bank from engaging in an unsafe or an unsound practice in conducting its business. The payment of dividends, depending upon the financial condition of a bank, could be deemed such a practice. In addition, both banks are members of, and subject to regulation by, the Federal Deposit Insurance Corporation.
As state banks, Poole Deposit Bank and Farmers State Bank are supervised and regulated by the Commonwealth of Kentucky Department of Financial Institutions. The Farmers and Merchants Bank, Lincolnland Bank, The Bank of Mitchell, Pike County Bank, The Spurgeon State Bank and The State Bank of Washington are supervised and regulated by the State of Indiana Department of Financial Institutions. In addition, all eight banks are members of, and subject to regulation by, the Federal Deposit Insurance Corporation.
Federal and state banking laws and regulations govern, among other things, the scope of the bank's business, the investments it may make, the reserves against deposits it must maintain, loans the bank makes and collateral it takes, activities with respect to mergers and consolidations and the establishment of branches.
The Financial Institutions Reform, Recovery and Enforcement Act of 1989 ("FIRREA") was enacted on August 9, 1989, primarily in an attempt to address problems in the savings and loan industry. However, the Act has had a substantial effect on the environment in which commercial banks operate. The annual assessment rates for banks insured by the Federal Deposit Insurance Corporation were to increase from .083% of deposits to .12% in 1990, and to .15% in 1991. However, such rates were increased by the FDIC to .195% effective January 1, 1991 and .23% effective July 1, 1991.
The Federal Deposit Insurance Corporation Improvement Act of 1991 ("FDICIA") was enacted in 1991. Among other things, FDICIA, requires federal bank regulatory authorities to take "prompt corrective action" with respect to banks that do not meet minimum capital requirements. For these purposes, FDICIA established five capital tiers: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. The Corporation and each of the Corporation's Banks currently exceed the regulatory definition of a "well capitalized" financial institution.
The Ayer-Wagoner-Deal Insurance Agency, Inc. is regulated by the Indiana Department of Insurance.
STATISTICAL DISCLOSURE
The statistical disclosure on the Corporation and its subsidiaries, on a consolidated basis, included on pages 1, 3 through 13 and 33 of the Corporation's Annual Report to Shareholders for the fiscal year ended December 31, 1993, is hereby incorporated by reference herein.
ITEM 2.

ITEM 2. PROPERTIES
The net investment of the Corporation and its subsidiaries in real estate and equipment at December 31, 1993, was $10,439,166. The Corporation's offices are located in a building owned by The National City Bank of Evansville (hereinafter referred to as the Bank), in which the Bank's main office is located. The main office of the Bank is located at 227 Main Street in downtown Evansville, Indiana. This building is owned in fee by the Bank. The other subsidiary banks, all branches and the insurance agency are located on premises either owned or leased. None of the property is subject to any major encumbrance.
ITEM 3.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter of 1993, two matters were submitted to a vote of shareholders. On December 14, 1993, a special meeting of the shareholders was held to consider and take action on proposals to approve and adopt two Merger Agreements. The first Merger Agreement dated July 1, 1993, by and between the Corporation and Lincolnland Bancorp, Inc. ("Lincolnland") provided for, among other things, the merger of Lincolnland with and into the Corporation. This proposal was approved with 2,003,763.1085 shares voted affirmatively, 3,614.0000 negatively and 31,460.8022 abstaining. The second Merger Agreement dated June 25, 1993, by and between the Corporation and Sure Financial Corporation, ("Sure") provided for, among other things, the merger of Sure with and into the Corporation. This proposal was approved with 2,024,601.1085 shares voted affirmatively, 288,160.7531 negatively and 9,532.8022 abstaining. Both mergers were consummated December 17, 1993.
PART II
ITEM 5.

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER MATTERS
Pages 1 and 33 of the Corporation's Annual Report to Shareholders for the fiscal year ended December 31, 1993, is hereby incorporated by reference herein. Dividends are restricted by earnings and the need to maintain adequate capital. Management intends to continue its current dividend policy subject to these restrictions.
ITEM 6.

ITEM 6. SELECTED FINANCIAL DATA
Page 1 of the Corporation's Annual Report to Shareholders for the fiscal year ended December 31, 1993, is hereby incorporated by reference herein.
ITEM 7.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATION
Pages 1, 3 through 13 and 33 of the Corporation's Annual Report to Shareholders for the fiscal year ended December 31, 1993, are incorporated by reference herein.
ITEM 8.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Pages 15 through 30 of the Corporation's Annual Report to Shareholders for the fiscal year ended December 31, 1993, are incorporated by reference herein.
ITEM 9.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
The Board of Directors approved the appointment of McGladrey & Pullen, Certified Public Accountants and Consultants, as independent accountants to audit the financial statements of the Corporation and its subsidiaries for the year 1993. Gaither Rutherford & Co., formerly Gaither Koewler Rohlfer Luckett & Co., ("Gaither") audited the books and records of the Corporation and its subsidiaries from 1985 through 1992. The Board of Directors had determined it to be in the best interest of the Corporation to change independent accountants for 1993. This change was ratified by the Corporation's shareholders at the 1993 annual meeting.
The financial statements provided by Gaither in 1992 and 1991 did not contain any adverse opinions or any disclaimers of opinions, nor were they qualified or modified as to uncertainty, audit scope or accounting reasons. Further, there have been no disagreements between Gaither and the Corporation.
PART III
ITEM 10.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
(a) Directors of the Corporation
This information under the heading "Election of Directors and Information with Respect to Directors and Officers" on pages 3 to 6 of the Corporation's Proxy Statement for its Annual Meeting of Shareholders to be held April 19, 1994, is hereby incorporated by reference herein.
(b) Executive Officers of the Corporation
The Executive Officers of the Corporation, most of whom are also Executive Officers of The National City Bank of Evansville (hereinafter referred to as the Bank) are as follows:
ITEM 11.

ITEM 11. EXECUTIVE COMPENSATION
The information under the heading "Compensation of Executive Officers" on pages 7 through 11 of the Corporation's Proxy Statement for its Annual Meeting of Shareholders to be held April 19, 1994, is hereby incorporated by reference herein.
ITEM 12.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The information under the heading "Voting Securities" on pages 1 through 3 of the Corporation's Proxy Statement for its Annual Meeting of Shareholders to be held April 19, 1994, is hereby incorporated by reference herein.
ITEM 13.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information under the heading "Transactions with Management" on page 11 of the Corporation's Proxy Statement for its Annual Meeting of Shareholders to be held April 19, 1994, is hereby incorporated by reference herein.
PART IV
ITEM 14.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
FINANCIAL STATEMENTS
The following consolidated financial statements of the Corporation and its subsidiaries, included on pages 15 through 30 of the Corporation's Annual Report to Shareholders for the fiscal year ended December 31, 1993, are hereby incorporated by reference:
Independent Auditor's Report Consolidated Statements of Financial Position, at December 31, 1993 and 1992 Consolidated Statements of Income, years ended December 31, 1993, 1992 and 1991 Consolidated Statements of Shareholders' Equity, years ended December 31, 1993, 1992 and 1991 Consolidated Statements of Cash Flows, years ended December 31, 1993, 1992 and 1991 Notes to Consolidated Financial Statements
FINANCIAL STATEMENT SCHEDULES
All schedules are omitted because they are not applicable or not required or because the required information is included in the consolidated financial statements or related notes.
EXHIBITS
The following exhibits are submitted herewith:
3 - Articles of Incorporation, as amended 13 - Annual Report to Shareholders for the year ended December 31, 1993 (Incorporated by Reference) 22 - Subsidiaries of the Registrant 28 - Proxy Statement for the Annual Meeting of Shareholders to be held on April 19, 1994 (Incorporated by Reference)
REPORTS ON FORM 8-K
Form 8-K dated December 29, 1993, reported that on December 17, 1993, the Registrant completed its acquisition of Sure Financial Corporation ("Sure") and Lincolnland Bancorp, Inc. ("Lincolnland"). The transactions were structured as statutory mergers, pursuant to which each of Sure and Lincolnland were merged with and into National City Bancshares, Inc. Sure was a multibank holding company with approximately $130 million in assets and Lincolnland was a one-bank holding company with approximately $108 million in total assets. Shareholders of Lincolnland received shares of Registrant valued at $23.5 million and shareholders of Sure received shares of Registrant valued at $16 million in the transactions. The former subsidiaries of Lincolnland and Sure will be operated as wholly owned subsidiaries of Registrant. The consolidated entity will have approximately $711 million in total assets.
In other matters, Michael F. Elliott was appointed Executive Vice President of the Registrant on December 21, 1993. Mr. Elliott was President of Sure.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the dates indicated.
NATIONAL CITY BANCSHARES, INC.
By /s/ JOHN D. LIPPERT 3/15/94 John D. Lippert Date Chairman of the Board and Chief Executive Officer
By /s/ ROBERT A. KEIL 3/15/94 Robert A. Keil Date President and Chief Financial Officer
By /s/ HAROLD A. MANN 3/15/94 Harold A. Mann Date Secretary and Treasurer (Chief Accounting Officer)
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Donald B. Cox Date Director
/s/ SUSANNE R. EMGE 3/15/94 Mrs. N. Keith Emge Date Director
/s/ MICHAEL D. GALLAGHER 3/15/94 Michael D. Gallagher Date Director
/s/ DONALD G. HARRIS 3/15/94 Donald G. Harris Date Director
/s/ ROBERT H. HARTMANN 3/15/94 Robert H. Hartmann Date Director
/s/ C. MARK HUBBARD 3/15/94 C. Mark Hubbard Date Director
/s/ EDGAR P. HUGHES 3/15/94 Edgar P. Hughes Date Director
/s/ R. EUGENE JOHNSON 3/15/94 R. Eugene Johnson Date Director
/s/ EDWIN F. KARGES, JR. 3/15/94 Edwin F. Karges, Jr. Date Director
/s/ ROBERT A. KEIL 3/15/94 Robert A. Keil Date Director
/s/ JOHN D. LIPPERT 3/15/94 John D. Lippert Date Director
/s/ JOHN LEE NEWMAN 3/15/94 John Lee Newman Date Director
/s/ RONALD G. REHERMAN 3/15/94 Ronald G. Reherman Date Director
Laurence R. Steenberg Date Director
/s/ C. WAYNE WORTHINGTON 3/15/94 C. Wayne Worthington Date Director
/s/ GEORGE A. WRIGHT 3/15/94 George A. Wright Date Director
EXHIBIT INDEX
Reg. S-K
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT
3 Articles of Incorporation, as amended
13 Annual Report to Shareholders for the year ended December 31, 1993
22 Subisdiaries of the Registrant
28 Proxy Statement for the Annual Meeting of Shareholders to be held on April 19, 1994