PREMIER FINANCIAL BANCORP, INC.
VOTING RIGHTS AND PROXY INFORMATION
Only holders of record of shares of Common Stock as of the close of business on April 30, 2014May 3, 2017 (the "Record Date") will be entitled to notice of and to vote at the Annual Meeting or any adjournment or postponement thereof. Such holders of shares of Common Stock are entitled to one vote per share on any matter, other than the election of directors, which may properly come before the Annual Meeting. In the election of directors, holders of Common Stock have cumulative voting rights whereby each holder is entitled to vote the number of shares of Common Stock held multiplied by eightnine (the number of directors to be elected at the Annual Meeting), and each holder may cast the whole number of votes for one candidate or distribute such votes among two or more candidates. The presence, either in person or by properly executed proxy, of the holders of a majority of the outstanding shares of Common Stock as of the Record Date is necessary to constitute a quorum at the Annual Meeting. As of the Record Date it is anticipated that 8,046,84610,657,699 shares of Common Stock will be outstanding.
Those nominees for election to the Board of Directors receiving the eightnine highest number of votes in the election of directors will be elected to the Board. The appointment of Crowe Horwath LLP as the Company's independent accountants for 20142017 will be ratified if the votes cast in favor of ratification exceed the votes cast against ratification. The proposal on executive compensation will be approved in a non-binding advisory vote if the shares cast in favor exceed the votes cast against approval.
You can vote by (i) signing, dating and mailing the enclosed proxy card, (ii) by attending the annual meeting in person, or (iii) following the instructions on your notice for voting by telephone or on the internet.
All shares of Common Stock that are represented at the Annual Meeting by properly executed proxies received prior to or at the Annual Meeting and not revoked will be voted at the Annual Meeting in accordance with the instructions indicated in such proxies. If no instructions are indicated, such proxies will be voted forFOR the election of the Board of Directors’ eightnine nominees as directors of the Company (or, if deemed appropriate by the individuals appointed in the proxies, cumulatively voted for less than all of the Board's nominees to ensure the election of as many of the Board's nominees as possible), forFOR the ratification of the appointment of Crowe Horwath LLP as the Company's independent accountants, and forFOR approval of the proposal on executive compensation.
Any proxy given pursuant to this solicitation may be revoked by the person giving it at any time before it is voted. Proxies may be revoked by (i) filing with the Secretary of the Company, at or before the Annual Meeting, a written notice of revocation bearing a later date than the proxy, (ii) duly executing a subsequent proxy relating to the same shares of Common Stock and delivering it to the Secretary of the Company at or before the Annual Meeting, (iii) attending the Annual Meeting and voting in person (although attendance at the Annual Meeting will not in and of itself constitute a revocation of a proxy), or (iv) entering a later dated telephone call or internet vote (if initially able to vote in that manner) so long as the vote or voting direction is received by 3:00 a.m. eastern daylight time on June 18, 2014.21, 2017. Any written notice revoking a proxy should be sent to the Company, to the attention of Toney K. Adkins, Secretary.
The Company will bear the cost of this solicitation. In addition to solicitation by mail, the Company will request banks, brokers and other custodian nominees and fiduciaries to supply proxy material to the beneficial owners of Common Stock, and will reimburse them for their expenses in so doing. Certain directors, officers and other employees of the Company, not specially employed for this purpose, may solicit proxies, without additional remuneration therefor, by personal meeting, mail, telephone, facsimile or other electronic means.
EFFECT OF NOT CASTING YOUR VOTE
If you hold your shares in street name, it is critical that you cast your vote if you want it to count in the election of directors (Item 1 of this proxy statement), and the advisory proposal on executive compensation (Item 3 of this proxy statement). In the past, if you held your shares in street name and you did not indicate how you wanted your shares voted in the election of directors or on executive compensation, your bank or broker was allowed to vote those shares on your behalf in the election of directors and on executive compensation as they felt appropriate.
Current regulations take away the ability of your bank or broker to vote your uninstructed shares in the election of directors and on executive compensation on a discretionary basis. Thus, if you hold your shares in street name and you do not instruct your bank or broker how to vote in the election of directors or on executive compensation no votes will be cast on your behalf. Your bank or broker will, however, continue to have discretion to vote any uninstructed shares on the ratification of the appointment of the Company’s independent registered public accounting firm (Item 2 of this proxy statement).
If you are a shareholder of record and you do not cast your vote, no votes will be cast on your behalf on any of the items of business at the annual meeting.
ANNUAL REPORT
The Company's 20132016 Annual Report, which includes audited consolidated financial statements, accompanies this Proxy Statement. The Company will furnish without cost to any shareholder, upon request, a copy of the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission. Requests should be in writing and directed to the Company, to the attention of Brien M. Chase, Chief Financial Officer.
PRINCIPAL SHAREHOLDERS
As of March 15, 2014,21, 2017, the following individuals or entities reported beneficial ownership of Common Stock in excess of 5% of the Company's outstanding Common Stock:
NAME AND ADDRESS OF BENEFICIAL OWNER | NUMBER OF SHARES BENEFICIALLY OWNED(1) | PERCENTAGE OF OUTSTANDING SHARES |
Marshall T. Reynolds P.O. Box 4040 Huntington, West Virginia 25729 | 830,990 | 10.3% |
John Sheldon Clark 1633 Broadway, 30th Floor New York, New York 10019 | 506,095 | 6.3% |
| NAME AND ADDRESS OF BENEFICIAL OWNER | NUMBER OF SHARES BENEFICIALLY OWNED(1) | PERCENTAGE OF OUTSTANDING SHARES |
| John Sheldon Clark (2) 505 Beachland Blvd PMB 320 Vero Beach, Florida 32963 | 942,249 | 8.8% |
| Marshall T. Reynolds P.O. Box 4040 Huntington, West Virginia 25729 | 904,609 | 8.5% |
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(1) | The information contained in this column is based upon information furnished to the Company by the named individuals and the shareholder records of the Company. Except where otherwise indicated, this column represents the number of shares beneficially owned, which includes shares as to which a person has sole or shared voting and/or investment power. |
(2) | Mr. Clark reported direct ownership of 793,749 shares and reported another 148,500 shares in family trusts whereby Mr. Clark exercises discretionary control but is not a principal beneficiary of the trusts. |
ELECTION OF DIRECTORS
(Item 1 on Proxy)
A board of eightnine directors of the Company is to be elected at the Annual Meeting, each of whom is to serve, subject to the provisions of the Company's bylaws, until the 20152018 Annual Meeting of Shareholders and until his or her successor is duly elected and qualified. The names of the nominees proposed for election as directors, all of whom are presently directors of the Company, are set forth below and the following information is furnished with respect to each:
Nominee | Age | Principal Occupation or Employment(1) | Director of Company Continuously Since |
| | | |
Toney K. Adkins | 6467 | Retired, President and Chief Operating Officer, Champion Industries, Inc. (commercial printing and office supplies). Prior to becoming President and Chief Operating Officer of Champion Industries in January 2005, Mr. Adkins served as its Vice President - Administration since 1996. | 7/12/91 |
Mr. Adkins’ long-term experience as President and Chief Operating Office of Champion Industries, Inc., a publicly traded company during his tenure, provides insight on operational issues and business management. Mr. Adkins is also a long-term director of one of the Company’s subsidiaries, Citizens Deposit Bank & Trust, and provides direct oversight at the local level. |
Philip E. Cline | 84 | Business Consultant, July 1999 to present; President, Alderson-Broaddus College – (Interim January 2011 to June 2011) and (Acting November 2010 to January 2011); President of River City Associates, Inc. and General Manager of Pullman Plaza Hotel (Formerly Radisson Hotel Huntington) from 2001 to May 2010; President and Chief Executive Officer, Broughton Foods Company from November 1996 to June 1999; Executive Vice Presi-dent (1995 to 1996), Vice President and Treasurer (1968 to 1995) of J. H. Fletcher & Co. (manufacturer of underground mining equipment); Director of Bank One West Virginia Corporation (formerly Key Centurion Bancshares, Inc.) from 1983 to 2000. | 9/17/14 |
Mr. Cline's financial and managerial background and experience complements the Board's strategic planning and operations management. In addition, Mr. Cline’s involvement as a member of the Marshall University Board of Governors and as a board member of the Huntington YMCA provide insight into the local business and educational climate. Mr. Cline also serves as a director of Premier Bank, providing direct oversight at the local level. |
Harry M. Hatfield | 6669 | Attorney-at-law, Hatfield & Hatfield since 1973 | 6/20/12 |
Mr. Hatfield’s long experience as an attorney, including former Chairman of the West Virginia State Bar Foundation and former West Virginia University College of Law planning committee member, provides insight to local lending as well as familiarity with the legal aspects of business. Mr. Hatfield resides in the local community of one the Company’s subsidiaries, Premier Bank, Inc.Bank. He has served as Chairman of the Board of Premier Bank (and its predecessor Boone County Bank) since its formation by the Company in 1998, providing direct oversight at the local level. |
Lloyd G. Jackson II | 6063 | President and CEO, Jackson Management Company (a natural gas production and operations management company) | 6/20/12 |
Mr. Jackson’s experience in the production of natural gas and operation of natural gas properties provides insight into one of West Virginia’s primary industries as well as the Company’s strategic and operational decisions. In addition, Mr. Jackson’s past and present involvement as a West Virginia Senator and as a director or trustee of many of West Virginia’s prominent non-profit and education organizations such as the Claude Worthington Benedum Foundation, the West Virginia Board of Education, the Clay Center for the Arts and Sciences of West Virginia, West Virginia Wesleyan College, Vision Shared West Virginia and the Discover the Real West Virginia Foundation provide insight into the business and educational climate of the state. Mr. Jackson has served as a director of the Company’s Premier Bank subsidiary (and its predecessor Boone County Bank) since its formation by the Company in 1998, providing direct oversight at the local level. |
Nominee | Age | Principal Occupation or Employment(1) | Director of Company Continuously Since |
| | | |
Keith F. Molihan | 7174 | Retired Executive Director, Ironton/Lawrence County Area Community Action Organization | 9/14/99 |
Mr. Molihan’s career in local community economic development provides insight on lending decisions as well as business management. As an extension of his economic development activities, Mr. Molihan helped to organize Ohio River Bank, headquartered in the Ironton, Ohio where he resides, and served as the bank’s only Chairman of the Board. Ohio River Bank became a subsidiary of the Company in March 1998 and was merged into Citizens Deposit Bank & Trust in August 2012. Mr. Molihan now serves as a director of Citizens Deposit Bank & Trust, providing direct oversight at the local level. |
Nominee
| Age
| Principal Occupation or Employment(1)
| Director of
Company
Continuously
Since
|
| | | |
Marshall T. Reynolds | 7780 | Chairman and Chief Executive Officer, Champion Industries, Inc. Mr. Reynolds serves as the Company's Chairman of the Board. From 1985 to November 1993, Mr. Reynolds also served as Chairman of the Board of Directors of Bank One West Virginia, N.A. (and its predecessor, Key Centurion Bancshares, Inc.). | 1/19/96 |
Mr. Reynolds is an entrepreneur in many industries in addition to the financial services industry. He owns stock in many banks both regionally and nationally. His banking experience as well as his other industry experience provide unique insight in setting the Board’s agenda as well as lending decisions, business management and expansion strategies for the Company. Mr. Reynolds serves as a director of one of the Company’s subsidiaries, Citizens Deposit Bank &Trust, providing direct oversight at the local level. Mr. Reynolds also served as a director of another of the Company’s subsidiaries, Adams National Bank, until that bank was merged into Premier Bank on April 8, 2011. |
Neal W. Scaggs | 7881 | President, Baisden Brothers, Inc. | 9/8/98 |
Mr. Scaggs is a retired entrepreneur in the retail auto parts industry. He has served and continues to serve on the Board of Directors of various publicly traded companies. His business acumen as well as his participation on the boards of other publicly traded companies provides insight on lending decisions and business management. Mr. Scaggs resides in the local community of one the Company’s subsidiaries, Boone CountyPremier Bank, and served as a director of that bank through March 2011, providing direct oversight at the local level. |
Robert W. Walker | 6770 | President and Chief Executive Officer of the Company. Prior to becoming the President and Chief Executive Officer of the Company, Mr. Walker was President of Boone County Bank, Inc.(now Premier Bank, Inc.)Bank) from September 1998 to October 2001. Prior to that, Mr. Walker was a regional president at Bank One West Virginia N.AN.A. .
| 10/17/01 |
Mr. Walker has a 30+ year banking career in West Virginia. He is a past Chairman of the West Virginia Bankers Association. He also serves as a director at each of the Company’s subsidiary banks. His broad banking experience and leadership skills provide lending insight as well as management skills for the Company. |
Thomas W. Wright | 6063 | Owner and Chairman, NexQuest, Inc. (management company) | 4/18/01 |
Mr. Wright is a business entrepreneur in many industries including restaurant ownership and waste management.ownership. He has also served as a director of other publicly traded companies. His business acumen as well as his participation on the board’sboards of other publicly traded companies provides insight on staff management and business management. |
(1) | Except where otherwise indicated, this principal occupation or employment has continued during the past five years. |
The Company’s Board of Directors recommends that shareholders vote "FOR" the election of each of the Company's nominees for election as a director.
The Board of Directors does not contemplate that any of the nominees will be unable to accept election as a director for any reason. However, in the event that one or more of such nominees is unable or unwilling to serve, the persons named in the proxies or their substitutes shall have authority, according to their judgment, to vote or to refrain from voting for other individuals as directors.
The Nominating Committee of the Board of Directors considers nominations of candidates for election as directors. The Company's bylaws establish an advance notice procedure for shareholders to make nominations of candidates for election as directors (the "Shareholder Notice Procedure"). The Shareholder Notice Procedure provides that only persons who are nominated by, or at the direction of, the Board of Directors, or by a shareholder who has given timely written notice to the Secretary of the Company prior to the meeting at which directors are to be elected, will be eligible for election as directors of the Company. Under the Shareholder Notice Procedure, to be timely, notice of shareholder nominations to be made at an annual or special meeting must be received by the Company not less than 14 days nor more than 50 days prior to the scheduled date of the meeting (or, if less than 21 days notice of the date of the meeting is given, the 7th day following the day such notice was given).
Under the Shareholder Notice Procedure, a shareholder's notice to the Company proposing to nominate a person for election as a director must contain certain information, including, without limitation, the identity and address of the nominating shareholder, the number of shares of Common Stock that are owned by such shareholder and the name and address of the proposed nominee. If the Chairman of the Board or other officer presiding at a meeting determines that a person was not nominated in accordance with the Shareholder Notice Procedure, such person will not be eligible for election as a director.
By requiring advance notice of nominations by shareholders, the Shareholder Notice Procedure affords the Nominating Committee of the Board of Directors an opportunity to consider the qualifications of the proposed nominees and, to the extent deemed necessary or desirable by the Nominating Committee, to inform shareholders about such qualifications.
CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS
Board Meetings and Committees
During 2013,2016, the full Board of Directors met fifteentwelve times, the Compensation Committee met fivefour times, the Information Technology Committee met threefour times, the Nominating Committee met once, and the Audit Committee met nine times. Each director attended seventy-five percent or more of all meetings of the Board of Directors and committees of the Board on which he serves. The Company strongly encourages all members of the Board of Directors to attend the annual meeting of shareholders each year. At the prior year's annual shareholder meeting all directors were in attendance.attendance except Director Molihan.
The Board of Directors consists of a majority of "independent directors" as such term is defined in the Nasdaq Stock Market Marketplace Rules. The Board of Directors has determined that Toney K. Adkins, Philip E. Cline, Harry M. Hatfield, Lloyd G. Jackson II, Keith F. Molihan, Neal W. Scaggs and Thomas W. Wright are independent directors. The independent directors met twice in executive session during 2013.2016.
The Board does not have a policy regarding the separation of the roles of Chief Executive Officer and Chairman of the Board as the Board believes it is in the best interests of the Company to make that determination based on the position and direction of the Company and the membership of the Board. Currently, the Board has determined that separating the roles of Chairman and Chief Executive Officer is in the best interest of the Company’s shareholders at this time. This structure permits the Chief Executive Officer to focus on the management of the company’s day-to-day operations and ensures a greater role for the Chairman in setting agendas, establishing priorities, and fulfilling the Board’s roles and responsibilities on behalf of the shareholders.
The Board of Directors has adopted a formal policy by which shareholders may communicate with members of the Board of Directors by mail addressed to an individual member of the Board, to the full Board, or to a particular committee of the Board, at the following address: c/o Premier Financial Bancorp, Inc., 2883 5th Avenue, Huntington, West Virginia 25702.
The Board of Directors has threefour standing committees: a Compensation Committee, a Nominating Committee, an Information Technology (“IT”) Committee and an Audit Committee.
Board Role in Risk Oversight
The Company faces a variety of risks including credit risk, liquidity risk, operational risk and reputational risk. An effective risk management system will identify the material risks the Company faces in a timely manner, communicate necessary information to senior executives and the Board related to those material risks, implement appropriate and responsive strategies to manage those risks, and integrate the process of risk management into regular decision-making. The Board has designated the Audit Committee to take the lead in overseeing risk management as the Committee regularly reviews the Company’s internal audit reports, independent compliance audit reports, regulatory examination reports and financial information of the Company. In addition to the Audit Committee, the Board encourages management to promote a corporate culture that incorporates risk management into the Company’s strategies and day-to-day operations. Certain Directors are also members of some of the subsidiary banks’ local Board of Directors to independently assess first handfirsthand the application of risk management processes at the subsidiary bank level.
Compensation of the Board of Directors
Directors who are not full time employees of the Company or any subsidiary receive fees of $1,000 a month for their services. Board members are also reimbursed for expenses incurred in connection with their services as directors. Directors receive no compensation for attending committee meetings.
Security Ownership by Directors and Officers
The following table sets forth certain information concerning ownership of Premier’s Common Stock as of March 31, 20142017 by (i) each of the directors, (ii) each nominee for director, (iii) each executive officer, and (iv) all directors and executive officers as a group. Except as otherwise noted, each beneficial owner listed below has sole voting and investment power with respect to the shares listed next to the owner’s name.
Name of Beneficial Owner | | Common Stock Beneficially Owned as of 3/31/2017(1)(2) | | | Exercisable Options to Acquire Additional Common Stock as of 3/31/2017(3)(4) | | | Percentage Of Outstanding Shares | |
| | | | | | | | | |
Toney K. Adkins, Director | | | 7,910 | | | | | | | * | |
Philip E. Cline, Director | | | 68,200 | | | | | | | * | |
Harry M. Hatfield, Director (5) | | | 17,600 | | | | | | | * | |
Lloyd G. Jackson, II, Director | | | 15,152 | | | | | | | * | |
Keith F. Molihan, Director | | | 6,408 | | | | | | | * | |
Marshall T. Reynolds, Chairman of the Board (6) | | | 904,609 | | | | | | | 8.5 | % |
Neal W. Scaggs, Director (7) | | | 124,553 | | | | | | | 1.2 | % |
Robert W. Walker, Director & Chief Executive Officer (8) | | | 97,148 | | | | | | | * | |
Thomas W. Wright, Director | | | 49,835 | | | | | | | * | |
Brien M. Chase, Chief Financial Officer | | | 21,249 | | | | 18,212 | | | | * | |
J. Mark Bias, Senior Vice President | | | 110 | | | | 1,100 | | | | * | |
Michael R. Mineer, Senior Vice President | | | 18,892 | | | | 37,401 | | | | * | |
Scot A. Kelley, Vice President, Credit Administration | | | 10,975 | | | | 3,006 | | | | * | |
Katrina Whitt, Vice President, Human Resources | | | 1,452 | | | | 16,533 | | | | * | |
All directors and executive officers as a group (14 in number) | | | 1,344,093 | | | | 76,252 | | | | 13.3 | % |
Name of Beneficial Owner | | Common Stock Beneficially Owned as of 3/31/2014(1) | | | Exercisable Options to Acquire Additional Common Stock as of 3/31/2014(2) | | | Percentage Of Outstanding Shares | |
| | | | | | | | | |
Toney K. Adkins, Director | | | 7,191 | | | | | | | * | |
Harry M. Hatfield, Director (3) | | | 15,266 | | | | | | | * | |
Lloyd G. Jackson, II, Director | | | 13,775 | | | | | | | * | |
Keith F. Molihan, Director | | | 5,826 | | | | | | | * | |
Marshall T. Reynolds, Chairman of the Board (4) | | | 830,990 | | | | | | | 10.3 | % |
Neal W. Scaggs, Director (5) | | | 113,230 | | | | | | | 1.4 | % |
Robert W. Walker, Director & Chief Executive Officer (6) | | | 59,513 | | | | 35,000 | | | | 1.2 | % |
Thomas W. Wright, Director | | | 45,305 | | | | | | | | * | |
Brien M. Chase, Chief Financial Officer (7) | | | 5,094 | | | | 37,934 | | | | * | |
Dennis J. Klingensmith, Senior Vice President | | | 10,759 | | | | 20,333 | | | | * | |
Michael R. Mineer, Senior Vice President (8) | | | 17,175 | | | | 30,901 | | | | * | |
Scot A. Kelley, Vice President, Credit Administration | | | 2,215 | | | | 14,168 | | | | * | |
Katrina Whitt, Vice President, Human Resources | | | 0 | | | | 16,117 | | | | * | |
All directors and executive officers as a group (13 in number) | | | 1,126,339 | | | | 154,453 | | | | 15.9 | % |
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* The percentage of outstanding shares beneficially owned is less than 1%.
(1) | The information contained in this column is based upon information furnished to the Company by the named individuals and the shareholder records of the Company. Except where otherwise indicated, this column represents the number of shares beneficially owned, which includes shares as to which a person has sole or shared voting and/or investment power. |
(2) | On December 9, 2016, the Company paid a 10% stock dividend (1 share for every 10 shares owned on record date) to shareholders of record on December 2, 2016. Reported shares in this column include the additional shares issued to the aboved named officers and directors as a result of the dividend. |
(2)(3) | Includes options that are exercisable or will become exercisable within 60 days of March 31, 20142017 |
(4) | On December 9, 2016, the Company paid a 10% stock dividend (1 share for every 10 shares owned on record date) to shareholders of record on December 2, 2016. Pursuant to the anti-dilution provisions of the stock option plans, the number of options awarded has been increased by 10% and the exercise price of the options awarded has been decreased by 10% to reflect the 10% stock dividend. |
(3)(5) | Includes 12,50013,750 shares joint voting and investment power shared with spouse. |
(4)(6) | Includes 67,83074,613 shares owned directly by spouse, with respect to which reporting person has no voting or investment power; 35,28638,814 shares owned by controlled organizations, and 100,836 jointly held with spouse. Mr. Reynolds hasThe total reported shares inlude 569,969 shares pledged 406,870 shares as collateral. |
(5)(7) | Includes 25,30127,831 shares owned by spouse, with respect to which reporting person has no voting or investment power. |
(6)(8) | Includes 9,40910,349 shares owned by spouse, with respect to which reporting person has no voting or investment power. |
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(1) | In accordance with Company policy, as an employee of the Company, Mr. Walker does not receive any director compensation. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
During 2013,2016, the Company's subsidiary banks have had, and expect to have in the future to the extent permitted by applicable federal and state banking laws, lending transactions with certain of the directors and officers of the Company and its subsidiaries and their affiliates and associates. The transactions, which at times involved loans in excess of $120,000, were in the ordinary course of business, were made on substantially the same terms, including interest rates, collateral and repayment terms, as those prevailing at the time for comparable transactions with persons not related to the Company or its subsidiaries, and did not involve more than the normal risk of collectability or present other unfavorable features. The Company's subsidiary banks are subject to federal laws and regulations governing loans to officers and directors. In addition, the Company’s banking subsidiaries have engaged, and in the future may engage, in transactions with such persons and their affiliates and associates as a depositary of funds, transfer agent, registrar, fiduciary and provider of other similar services.
The Company has adopted a policy to conduct an appropriate review of all related party transactions on an ongoing basis, pursuant to which all material or related transactions with any director, officer or employee or other person or entity with which such director, officer, or employee is affiliated must be on terms no less favorable to the corporation than those that are generally available from unaffiliated third parties and must be approved and ratified by the audit committee by majority vote of its members who do not have an interest in the transaction.
During the years ended December 31, 2013, 2012,2016, 2015, and 2011,2014, the Company or its subsidiaries have paid approximately $339,000, $385,000,$448,000, $441,000, and $562,000,$543,000, respectively, for commercial printing services, statement rendering services and office supplies and furniture to Champion Industries, Inc., Huntington, West Virginia, of which the Company's Chairman of the Board, Marshall T. Reynolds, is Chief Executive Officer and a principal shareholder and the Company’s director Toney K. Adkins was Presidentdirectors Philip E. Cline and Chief Operating Officer through December 31, 2011.
Neal W. Scaggs are directors.
The Company or its subsidiaries have paid The Harrah and Reynolds Corporation, a corporation controlled by Marshall T. Reynolds, approximately $835,000, $797,000, and $863,000 in 2013, 2012, and 2011, respectively,$1,969,000 n 2014 to permit employees of the Company and its subsidiaries to participate in a medical benefit plan sponsored and administered by The Harrah and Reynolds Corporation. Participation in the medical benefit plan was terminated in 2014 and the Company now purchases employee medical insurance through a third-party vendor.
The Company leases its headquarters facility at 2883 Fifth Avenue, Huntington, West Virginia from River City Properties, LLC, an entity 12.5%20.0% owned by Chairman of the Board of Directors Marshall T. Reynolds.Reynolds and 20.0% owned by Director Phillip E. Cline. The lease, for 5,900 square feet, had a 5 year term commencing in September 2002 and has been subsequently renewed for additional five year terms ending in September 2017, with annual rent of $8.50 per square foot the first year and thereafter inflation adjusted. The Company believes that the terms of this lease, which were approved by the Board of Directors, are no less favorable to the Company than those available from unrelated third parties. Annual lease payments totaled approximately $52,000, $52,000 and $52,000 in 2013, 20122016, 2015 and 2011,2014, respectively.
On April 30, 2008,August 26, 2015, the Company executed and delivered to First Guaranty Bank of Hammond, Louisiana (“First Guaranty”) a Promissory Note and Business Loan Agreement dated April 30, 2008August 26, 2015 for the principal amount of $11,550,000$12,000,000 bearing interest floating daily at the “Wall Street Journal” primea fixed rate (the “Index”) minus 1.00%of 4.00% per annum and requiring 59 monthly principal payments of $50,000$143,000 plus accrued interest and one final principal and interest payment of $8,600,000$3,575,000 due at maturity on April 30, 2013. On April 25, 2013, the Company executed and delivered to First Guaranty Bank, a Change in Terms Agreement whereby the maturity date was extended to April 30, 2020, the required monthly principal payment was increased to $86,000 and the interest charged was modified to float daily at the Index plus 0.75%, initially 4.00%, with an interest rate floor of 4.00% per annum and an interest rate ceiling of 10.00% per annum. At the time of the Change in Terms Agreement, the principal balance on the note was approximately $7,222,000.August 26, 2020. The note continues to bePromissory Note is secured by athe pledge of 25% of Premier’s interest in Premier Bank, Inc. (a wholly owned subsidiary) under a Commercial Pledge Agreement modified on May 3, 2011.dated August 26, 2015. The initial proceeds of this note were used to fund the $9,000,000 of cash neededrefinance a $4,500,000 balance plus accrued interest due under Premier’s previous Promissory Note to purchase Traders Bankshares, Inc. and to refinanceFirst Guaranty; pay off the remaining $2,550,000$5,400,000 balance plus accrued interest due to The Bankers’ Bank of Kentucky, Inc. of Frankfort, Kentucky (“Bankers’ Bank”) under a Term Note dated September 8, 2010; and pay the remaining $2,000,000 balance plus accrued interest due on Premier’s outstanding note$5,000,000 Line of Credit with Bankers’ Bank. The sum of the disbursements totaled $11,946,000 and the final $54,000 on the Term Note was not borrowed. At the time of origination, Premier’s chairman owned approximately 23.8% of the voting stock of First Guaranty Bank dated JanuaryBancshares, parent company for First Guaranty. However, Premier’s board of directors, the chairman abstaining, and audit committee determined prior to its vote to authorize the company to enter into the loan transaction that the terms of the financing, including the interest rate and collateral, were no less favorable than those which could be obtained from other financial institutions. The outstanding principal balance on the borrowing at December 31, 2006.2016 was $8,600,000.
In conjunction with the Change in Terms Agreement with First Guaranty Bank,On August 12, 2016 the Company executed and delivered anotherto First Guaranty a Change in Terms Agreement modifying its Promissory Note and Business Loan Agreement dated June 30, 20112012 that established a Line of Credit with the bank extending the right to request and receive monies from First Guaranty on the line of credit until June 30, 2019. The Change in Terms Agreement maintained the principal amount of $3,000,000 bearing interest floating daily at the “Wall Street Journal” prime rate (currently 3.25%4.00%), with a floor of 4.50%. through the modified June 30, 2019 maturity date. Under the terms of the Promissory Note, the Company may request and receive advances from First Guaranty Bank from time to time. Accrued interest on any amounts outstanding is payable monthly, and any amounts outstanding are payable on demand or at maturity. The Promissory Note is also secured by the pledge of 25% of Premier’s interest in Premier Bank (a wholly owned subsidiary) under a Commercial Pledge Agreement modified on June 30, 2012. The Change in Terms Agreement increased the principal amount available to $3,000,000 and extended the right to request and receive monies on the Line of Credit from June 30, 2013 to June 30, 2016. The interest rate on the Line of Credit will remain floating daily at the “Wall Street Journal” prime rate (currently 3.25%), with a floor of 4.50% through the modified June 30, 2016 maturity date. At December 31, 2013,2016, the Company had no outstanding debt on this line of credit from First Guaranty Bank.
Premier’s Chairman owns approximately 26.1% of the voting stock of First Guaranty Bancshares, Inc. the parent company of First Guaranty Bank. However, Premier’s board of directors determined during its vote to authorize the company to enter into the loan transaction that the terms of the financing, including the interest rate and collateral, were no less favorable than those which could be obtained from other financial institutions.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based upon a review of filings with the SEC and representations that no other reports were required, the Company believes that all of the Company’s directors and executive officers complied during fiscal 20132016 with the reporting requirements of Section 16(a) of the Securities Exchange Act of 1934 except that Director Harry M. HatfieldChairman Marshall T. Reynolds filed one report 35 days late with respect to the reporting of his shares owned in First National Bankshares Corporation that were converted to shares of the Company upon its acquisition of First National Bankshares Corporation on January 15, 2016 and excutive officer Scot A. Kelley filed one report 2 days late with respect to one transaction reporting his shares acquired on November 25, 2013.March 21, 2016.
INDEPENDENT PUBLIC ACCOUNTANTS
(Item 2 on Proxy)
At its meeting held on April 16, 2014,19, 2017, the Audit Committee appointed Crowe Horwath LLP to serve as the Company’s independent public accountants and auditors for the fiscal year ending December 31, 2014.2017. Crowe Horwath LLP has served as the Company’s independent public accountants and auditors since the 1995 fiscal year.
Representatives of Crowe Horwath LLP are expected to be present at the annual meeting and will be available to respond to appropriate questions and will have the opportunity to make a statement if they desire to do so.
Audit fees and expenses billed to the Company by Crowe Horwath LLP for the audit of the Company's financial statements for the fiscal years ended December 31, 20132016 and December 31, 2012,2015, and for review of the Company's financial statements included in the Company's quarterly reports on Form 10-Q, are as follows:
Fiscal 2013 | Fiscal 2012 |
$ 258,500 | $ 185,000 |
Fiscal 2016 | Fiscal 2015 |
| $306,000 | $ 276,750 | |
Audit Related Fees
Audit related fees and expenses billed to the Company by Crowe Horwath LLP for years 20132016 and 20122015 for services related to the performance of the audit or review of the Company's financial statements that were not included under the heading "Audit Fees", are as follows:
Fiscal 2013 | Fiscal 2012 |
$ 0 | $ 48,250 |
Fiscal 2016 | Fiscal 2015 |
| $ 0 | $ 0 | |
Tax Fees
Tax fees and expenses billed to the Company by Crowe Horwath LLP for fiscal years 20132016 and 20122015 for services related to tax compliance, tax advice and tax planning, consisting primarily of preparing the Company's federal and state income tax returns for the previous fiscal periods and inclusive of expenses are as follows
Fiscal 2013 | Fiscal 2012 |
$ 54,195 | $ 75,035 |
Fiscal 2016 | Fiscal 2015 |
| $ 60,370 | $ 55,730 | |
All Other Fees
Fees and expenses billed to the Company by Crowe Horwath LLP for all other services provided during fiscal years 20132016 and 20122015 are as follows:
Fiscal 2016 | Fiscal 2015 |
| $ 0 | $ 8,068 | |
Fiscal 2013 | Fiscal 2012 |
$ 0 | $ 7,650 |
In 2004, the Audit Committee established a policy whereby the independent auditor is required to seek pre-approval by the Committee of all audit and permitted non-audit services by providing a prior description of the services to be performed and specific estimates for each such service.
The Audit Committee approved all of the services performed by Crowe Horwath LLP during fiscal 2013.2016.
The Audit Committee of the Board of Directors has considered whether the provision of non-audit services described above is compatible with maintaining the independent accountant’s independence.
The Company’s Board of Directors recommends that shareholders vote "FOR" ratification of the appointment of Crowe Horwath LLP as the Company's independent accountants for the 20142017 fiscal year.
The appointment of Crowe Horwath LLP will be deemed ratified if votes cast in favor of the proposal exceed votes cast against it. Abstentions will not be counted as votes cast either for or against the proposal.
ADVISORY (NON-BINDING) VOTE ON EXECUTIVE COMPENSATION
(Item 3 on Proxy)
As described above in the “Compensation Discussion and Analysis” section beginning on page 1412 and in the compensation tables beginning on page 2117 of this proxy statement, the Company’s compensation programs are designed to:
· | attract and retain qualified individuals of high integrity;integrity; |
· | motivate them to achieve the goals set forth in the Company’s business plan |
· | link executive and stockholder interests through incentive-based compensation |
· | enhance the Company’s performance, measured by both short-term and long-term achievements.achievements, and |
· | discourage excessive risk taking on the part of named executive officers. |
We believe that our compensation policies and procedures are competitive, are focused on pay for performance principles and are strongly aligned with the long-term interests of our shareholders. We also believe that both the Company and shareholders benefit from responsive corporate governance policies and constructive and consistent dialogue. Under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) we are submitting a proposal allowing our shareholders to cast an advisory vote on our compensation program at the annual meeting of shareholders. This proposal, commonly known as a “Say-on-Pay” proposal, gives you, as a shareholder of Premier Financial Bancorp, Inc., an opportunity to endorse or not endorse the compensation we pay to our named executive officers through the following resolution:
“RESOLVED, that the shareholders of Premier Financial Bancorp, Inc. approve the compensation of its executive officers included in the Summary Compensation Table in this Proxy Statement, as described in the Compensation Discussion and Analysis and the tabular disclosure regarding the compensation of the named executive officers (together with the accompanying narrative disclosure) contained in this Proxy Statement.”
Your vote is advisory and will not be binding upon our Board of Directors. However, the Compensation Committee will take into account the outcome of the vote when considering future executive compensation arrangements. We believe that both the Company and its shareholders benefit from maintaining a constructive dialogue with its shareholders. This proposal is only one part of our corporate governance program and practices that maintain this dialogue with our shareholders and our commitment to the creation of long-term shareholder value.
The Company’s Board of Directors recommends that shareholders vote "FOR" the resolution to approve the compensation of named executive officers employed by the Company as described in the Compensation Discussion and Analysis and accompanying tables beginning on page 14.12.
The Company’s executive compensation disclosed in this proxy statement will be approved if votes cast in its favor of the proposal exceed votes cast against it. Abstentions will not be counted as votes cast either for or against the proposal.
At the 20132016 annual meeting of shareholders, we provided our shareholders with the opportunity to cast an advisory vote on the compensation of our named executive officers as disclosed in the proxy statement for the 20132016 annual meeting, and our shareholders approved the proposal, with more than 98%96% of the votes cast in favor.
CODE OF ETHICS
The Board of Directors adopted a Code of Business Conduct and Ethics on November 19, 2003 that applies to all of the Company's officers, directors and employees and a Code of Ethics for the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer and Chief Accounting Officer which supplements our Code of Business Conduct and Ethics (collectively the "Codes") which are intended to promote honest and ethical conduct, full and accurate reporting and compliance with laws. We have filed copies of the Codes with the SEC as an exhibit to our December 31, 2003 annual report on Form 10-K.
SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be presented at the 20152018 Annual Meeting of Shareholders must be received by the Company by January 15, 201517, 2018 in order to be considered for inclusion in the Proxy Statement for the 20152018 Annual Meeting of Shareholders. In addition, the proxy solicited by the Board of Directors for the next annual meeting of shareholders will confer discretionary authority to vote on any shareholder proposal presented at the meeting, unless the Company is provided with notice of such proposal no later than March 31, 2015.April 3, 2018. However, even if notice is timely received, the proxies may nevertheless be entitled to exercise discretionary authority on the matter to the extent permitted by Securities and Exchange Commission regulations.
OTHER MATTERS
The only matters to be considered at the meeting or any adjournment thereof, so far as known to the Board of Directors, are those set forth in the Notice of Annual Meeting of Shareholders and routine matters incident to the conduct of the meeting. However, if any other matters should properly come before the meeting or any adjournment thereof, the Board of Directors intends that the persons named in the accompanying proxy form, or their substitutes, will vote the shares represented by such proxy form in accordance with their best judgment on such matters.
By Order of the Board of Directors,
/s/ Toney K. Adkins
Toney K. Adkins
Secretary
Huntington, West Virginia
May 15, 2014
18, 2017
REVOCABLE PROXY
PREMIER FINANCIAL BANCORP, INC.
IMPORTANT ANNUAL MEETING INFORMATION
| YOUR VOTE IS IMPORTANT!
PROXY VOTING INSTRUCTIONS
Shareholders of record have three ways to vote:
1. By Telephone (using a Touch-Tone Phone); or
2. By Internet; or
3. By Mail.
To Vote by Telephone:
Call 1-888-296-0156 Toll-Free on a Touch-Tone
Phone anytime prior to 3 a.m., June 18, 2014.
To Vote by Internet:
Go to http://www.rtcoproxy.com/pfbi prior to 3 a.m., June 18, 2014.
|
| Please note that the last vote received from a shareholder, whether by telephone, by Internet or by mail, will be the vote counted.
|
| Mark here if you plan to attend the meeting. | £ |
| Mark here for address change. | £ |
| |
| | | Electronic Voting Instructions |
| |
Annual Meeting Materials are available at: | Comments:Available 24 hours a day, 7 days a week!
|
http://www.cfpproxy.com/4881
| | | Instead of mailing your proxy, you may choose one of the voting methods outlined below to vote your proxy. |
| | | VALIDATION DETAILS ARE LOCATED BELOW IN THE TITLE BAR. |
| | | Proxies submitted by the Internet or telephone must be received by 3:00 a.m., EDT, on June 21, 2017. |
| | | | Vote by Internet |
| | | | • Go to www.investorvote.com/PFBI |
| | | | • Or scan the QR code with your smartphone |
| | | | • Follow the steps outlined on the secure website |
| | | | |
| |
| Vote by telephone | |
| | | FOLD HERE IF YOU ARE VOTING BY MAIL• Call toll free 1-800-652-VOTE (8683) within the USA, US territories &
PLEASE DO NOT DETACH Canada on a touch tone telephone
|
| | | • Follow the instructions provided by the recorded message |
Using a black inkpen, mark your votes with an Xas shown in this example. Please do not write outside the designated areas. | ☒ | | | |
Annual Meeting Proxy Card
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
A Proposals — | THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL OF THE NOMINEES LISTED IN ITEM 1, A VOTE “FOR” ITEM 2, AND A VOTE “FOR” ITEM 3. |
1. Election of Directors: | For Withhold | | | For Withhold | | | For Withhold | | |
01 - Toney K. Adkins | ¨ ¨ | | 02 - Philip E. Cline | ¨ ¨ | | 03 - Harry M. Hatfield | ¨ ¨ | | |
04 - Lloyd G. Jackson II | ¨ ¨ | | 05 - Keith F. Molihan | ¨ ¨ | | 06 - Marshall T. Reynolds | ¨ ¨ | | |
07 - Neal W. Scaggs | ¨ ¨ | | 08 - Robert W. Walker | ¨ ¨ | | 09 - Thomas W. Wright | ¨ ¨ | | |
| T | PLEASE MARK VOTES
AS IN THIS EXAMPLE
| With- For All
For hold Except
| | | | | | |
| 1. ELECTION OF DIRECTORS:
To elect as directors the following eight (8) nominees:
Nominees:
| ¨¨¨
| | For Against Abstain | | | | | For Against Abstain |
2. 2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS.AUDITORS. To ratify the appointment of Crowe Horwath, LLP as the Company'sCompany’s independent auditors for the fiscal year ending December 31, 2014.2017. | For Against Abstain
| 3. ADVISOR |
| (01) Toney K. Adkins
(04) Keith F. Molihan
(07) Robert W. Walker
| (02) Harry M. Hatfield
(05) Marshall T. Reynolds
(08) Thomas W. Wright
| (03) Lloyd G. Jackson II
(06) Neal W. Scaggs
| | 3. 3. ADVISORYY (Non-Binding) PROPOSAL ON EXECUTIVE COMPENSATION. To consider and approve the Company'sCompany’s executive compensation in an advisory vote.
| For Against Abstain
| ¨ ¨¨ ¨ |
| INSTRUCTION: To withhold authority to vote for any nominee (s), mark “For All Except” and write that nominee(s’) name(s) or number(s) in the space provided below. | | 5.
| | | | | | |
| | | | 4. OTHER BUSINESS. To transact such other matters as may properly be brought before the Annual Meeting or any adjournment thereof.thereof. (The Board of Directors does not know of any such other matters). |
B Non-Voting Items
Change of Address — Please print new address below.
C Authorized Signatures — This section must be completed for your vote to be counted. — Date and Sign Below
Please sign exactly as your name(s) appear(s) on your stock certificate(s). When signing as attorney, executor, administrator, trustee or guardian, please give full title. If more than one trustee, all should sign. All joint owners must sign.
Date (mm/dd/yyyy) — Please print date below. | | Signature 1 — Please keep signature within the box. | | Signature 2 — Please keep signature within the box. |
| | | | | | |
| | | | | | THE BOARD OF DIRECTORS RECOMMENDS A VOTE “FOR” ALL OF THE NOMINEES LISTED IN ITEM 1, A VOTE “FOR” ITEM 2, AND A VOTE “FOR” ITEM 3.
|
| | | | | | Information regarding the matters to be acted upon at the meeting is contained in the Notice of Annual Meeting of Shareholders and the Proxy Statement accompanying this proxy. |
| Please be sure to date and sign
this proxy card in the box below.
| Date | | |
| | | |
| Sign above Co-holder (if any) sign above | | | | | | |
| Please sign exactly as your name(s) appear(s) on your stock certificate(s). When signing as attorney, executor, administrator, trustee or guardian, please give full title. If more than one trustee, all should sign. All joint owners must sign. | | | | | | |
PREMIER FINANCIAL BANCORP, INC. — ANNUAL MEETING, JUNE 18, 2014
YOUR VOTE IS IMPORTANT!
Annual Meeting Materials are available on-line at:
http://www.cfpproxy.com/4881www.edocumentview.com/PFBI
IF YOU HAVE NOT VOTED VIA THE INTERNET OR TELEPHONE, FOLD ALONG THE PERFORATION, DETACH AND RETURN THE BOTTOM PORTION IN THE ENCLOSED ENVELOPE.
You can vote in one of three ways:
1. |
Call toll free 1-888-296-0156 on a Touch-Tone Phone. There is NO CHARGE to you for this call. |
or
2. | Via the Internet at http://www.rtcoproxy.com/pfbi and follow the instructions.
|
or
3. | Mark, sign and date your proxy card and return it promptly in the enclosed envelope. |
PLEASE SEE REVERSE SIDE FOR VOTING INSTRUCTIONS
(Continued, and to be marked, dated and signed, on the other side)
REVOCABLE PROXY
— PREMIER FINANCIAL BANCORP, INC.
ANNUAL MEETING OF SHAREHOLDERS
June 18, 201421, 2017
10:30 a.m. local time
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
KNOWKNOW ALL MEN BY THESE PRESENTS, the undersigned shareholder of PREMIER FINANCIAL BANCORP, INC. (“Company”), Huntington, West Virginia, does hereby nominate, constitute and appoint
TONEY K. ADKINS and KEITH F.F. MOLIHAN
or anyeither of them (with full power to act alone), my true and lawful attorney(s) and proxy(ies) with full power of substitution, for me and in my name, place and stead, to vote all of the Common Stock of the Company standing in my name on its books at the close of business on April 30, 2014,May 3, 2017, at the Annual Meeting of Shareholders to be held at the Pullman Plaza Hotel, 1001 3rd Avenue, Huntington, West Virginia, on June 18, 2014,21, 2017, at 10:30 a.m. (eastern daylight time), and at any adjournment thereof, with all the powers the undersigned would possess if personally present as follows:
This proxy is solicited by the Board of Directors and will be voted as specified and in accordance with the accompanying proxy statement. If no instruction is indicated, then the above named proxies, or any one of them, will vote the shares represented “FOR” all of the nominees listed in Item #1, “FOR” Item #2, and “FOR” Item #3 and in accordance with their discretion on any other business that may properly come before the meeting.
Information regarding the matters to be acted upon at the meeting is contained in the Notice of Annual Meeting of Shareholders and the Proxy Statement accompanying this proxy.
PLEASE PROVIDE YOUR INSTRUCTIONS TO VOTE BY TELEPHONE OR THE INTERNET OR
COMPLETE, DATE, SIGN, AND MAIL THIS PROXY CARD PROMPTLY
IN THE ENCLOSED POSTAGE-PAID ENVELOPE.ENVELOPE OR PROVIDE YOUR INSTRUCTIONS TO VOTE VIA THE INTERNET OR BY TELEPHONE.
(Continued, and to be marked, dated and signed, on the other side)