FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-9101
JEFFERSON BANKSHARES, INC.
Incorporated in the I.R.S. Employer ID No.
State of Virginia 54-1104491
123 East Main Street
Post Office Box 711
Charlottesville, Virginia 22902
Telephone (804) 972-1100
Indicate by a check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months and (2) has been subject to
such filing requirements for the past 90 days. Yes X No _____
As of October 15, 1996, Registrant had 15,148,158 shares of its $2.50
par value common stock issued and outstanding.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Jefferson Bankshares, Inc. and Subsidiaries
Consolidated Balance Sheets
($ in thousands)
September 30 Dec. 31
1996 1995 1995
ASSETS
Cash and due from banks............................... $ 87,733 $ 86,195 $ 88,028
Federal funds sold and other money market investments. - - 15,000
Investment securities:
Available for sale (cost on September 30 of
in 1996 and $191,586 in 1995 and
$184,203 on December 31, 1995) 193,705 193,609 188,669
Held to maturity (fair value on September 30
of $403,878 in 1996 and $483,383 in 1995,
and $459,360 on December 31, 1995) 404,410 481,522 454,509
Total Investment Securities........................... 598,115 675,131 643,178
Loans................................................. 1,337,877 1,190,075 1,220,493
Less: Unearned income................................. (57) (72) (72)
Allowance for loan losses....................... (14,564) (13,992) (13,432)
Net loans............................................. 1,323,256 1,176,011 1,206,989
Premises and equipment................................ 52,622 51,862 52,310
Other assets.......................................... 46,419 47,035 45,683
Total Assets.......................................... $2,108,145 $2,036,234 $2,051,188
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand................................................ $ 312,172 $ 286,360 $ 287,489
Interest-bearing transaction accounts................. 808,752 799,743 806,859
Certificates of deposit $100,000 and over............. 98,062 89,132 93,720
Other time............................................ 609,024 608,353 605,131
Total Deposits........................................ 1,828,010 1,783,588 1,793,199
Federal funds purchased and
securities sold under repurchase agreements......... 29,763 15,440 16,118
Other liabilities..................................... 16,833 16,356 15,316
Long-term debt........................................ - 16 15
Total liabilities..................................... 1,874,606 1,815,400 1,824,648
Shareholders' Equity:
Preferred stock of $10.00 par value. Authorized
1,000,000 shares; issued none......................... - - -
Common stock of $2.50 par value. Authorized 32,000,000
shares; issued and outstanding 15,147,207 shares
September 30, 1996; 15,193,554 shares September
30,1995; and 15,182,235 shares December 31, 1995.. 37,868 37,984 37,956
Capital surplus....................................... 48,066 47,589 47,623
Retained earnings..................................... 147,503 133,946 138,058
Unrealized gains on securities
available for sale................................. 102 1,315 2,903
Total Shareholders' Equity ........................... 233,539 220,834 226,540
Total Liabilities and Shareholders' Equity............ $2,108,145 $2,036,234 $2,051,188
See accompanying notes to consolidated financial statements.
Jefferson Bankshares, Inc. and Subsidiaries
Consolidated Statements of Income
(in thousands except per share data)
Three months ended Nine months ended
September 30 September 30
1996 1995 1996 1995
INTEREST INCOME
Interest and fees on loans .................. $29,120 $26,657 $84,377 $77,405
Income on investment securities:
Available for sale........................... 3,024 2,908 8,900 8,419
Held to maturity............................. 6,320 7,581 20,088 22,214
Other interest income........................ 170 190 445 626
Total interest income........................ 38,634 37,336 113,810 108,664
INTEREST EXPENSE
Interest-bearing transaction accounts........ 5,679 5,896 16,638 17,383
Certificates of deposit $100,000 and over.... 1,235 1,245 3,639 3,345
Other time deposits.......................... 7,436 8,136 22,426 21,745
Short-term borrowings........................ 305 185 867 975
Long-term debt............................... - - - 1
Total interest expense....................... 14,655 15,462 43,570 43,449
NET INTEREST INCOME.......................... 23,979 21,874 70,240 65,215
PROVISION FOR LOAN LOSSES.................... 900 480 2,520 1,440
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES.............................. 23,079 21,394 67,720 63,775
NON-INTEREST INCOME
Trust income................................. 1,227 1,125 3,481 3,375
Service charges on deposit accounts.......... 2,499 2,282 7,420 6,805
Investment securities gains (losses)......... - - 3 (103)
Mortgage loan sales income................... 135 93 500 135
Other income................................. 1,014 837 3,071 2,357
Total non-interest income.................... 4,875 4,337 14,475 12,569
NON-INTEREST EXPENSE
Salaries and employee benefits............... 10,144 9,862 30,797 29,139
Occupancy expense, net....................... 1,292 1,295 4,337 3,797
Equipment expense............................ 1,604 1,586 4,727 4,579
Other expense................................ 3,824 3,719 10,625 12,318
Total non-interest expense................... 16,864 16,462 50,486 49,833
INCOME BEFORE INCOME TAXES................... 11,090 9,269 31,709 26,511
PROVISION FOR INCOME TAXES................... 3,848 3,122 10,954 8,913
NET INCOME................................... $ 7,242 $ 6,147 $20,755 $17,598
NET INCOME PER COMMON SHARE.................. $ .48 $ .40 $ 1.37 $ 1.16
AVERAGE SHARES OUTSTANDING................... 15,146 15,179 15,161 15,177
See accompanying notes to consolidated financial statements.
Jefferson Bankshares, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
($ in thousands)
Nine months ended
September 30
1996 1995
Cash flows from operating activities:
Net income.......................................... $ 20,755 $ 17,598
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization....................... 5,322 4,810
Accretion and amortization.......................... 2,782 3,143
Provision for loan losses........................... 2,520 1,440
Investment securities (gains)losses, net............ (3) 103
Gain on sale of premises and equipment.............. (65) (30)
Decrease (increase) in interest receivable.......... 1,169 (1,666)
Increase (decrease) in interest payable............. (87) 1,372
Decrease (increase) in loans held for resale, net... 496 (1,456)
Other, net.......................................... (1,478) 1,006
Total adjustments................................... 10,656 8,722
Net cash provided by
operating activities............................... 31,411 26,320
Cash flows from investing activities:
Proceeds from maturities of investment securities
held to maturity.................................. 100,712 96,254
Proceeds from calls of investment securities
held to maturity.................................. 385 148
Purchase of investment securities held to maturity.. (53,177) (112,668)
Proceeds from maturities of securities available
for sale.......................................... 13,700 30,500
Proceeds from sales of securities available
for sale.......................................... 979 11,347
Purchase of securities available for sale........... (24,624) (57,709)
Net increase in loans............................... (119,533) (88,454)
Business combinations, net of cash.................. - 31,369
Proceeds from sales of premises and equipment....... 793 319
Proceeds from sales of foreclosed properties........ 1,874 2,038
Purchases of premises and equipment................. (5,765) (5,252)
Net cash used in investing activities............... (84,656) (92,108)
Cash flows from financing activities:
Net increase in deposits............................ 34,811 60,204
Net increase (decrease) in short-term borrowings.... 13,645 (1,039)
Repayment of long-term debt......................... (15) (3)
Proceeds from issuance of common stock.............. 524 1,450
Payments to acquire common stock.................... (1,480) (1,121)
Dividends paid...................................... (9,535) (8,317)
Net cash provided by financing activities........... 37,950 51,174
Net decrease in cash
and cash equivalents.............................. (15,295) (14,614)
Cash and cash equivalents at beginning of period.... 103,028 100,809
Cash and cash equivalents at end of period.......... $ 87,733 $ 86,195
Supplemental disclosure of cash flow information
Cash payments for:
Interest.......................................... $ 43,657 $ 42,077
Income taxes...................................... 7,815 7,953
Non-cash investing and financing activities:
Loan balances transferred to foreclosed properties $ 265 $ 312
See accompanying notes to consolidated financial statements
Jefferson Bankshares, Inc. and Subsidiaries
Consolidated Statements of Changes in Shareholders' Equity
($ in thousands) Nine months ended
September 30
1996 1995
Balance, January 1.......................................$226,540 $206,553
Net income............................................... 20,755 17,598
Cash dividends declared.................................. (9,999) (8,652)
Change in unrealized gains (losses) on securities
available for sale..................................... (2,801) 5,006
Issuance of common stock for dividend reinvestment plan.. 20 149
Issuance of common stock for incentive stock plan........ 331 385
Issuance of common stock for deferred directors' stock plan 173 916
Acquisition of common stock.............................. (1,480) (1,121)
Balance, September 30....................................$233,539 $220,834
See accompanying notes to consolidated financial statements.
Notes to Consolidated Financial Statements
($ in thousands)
Note 1 - General
The consolidated financial statements conform to generally accepted
accounting principles and to general industry practices. The accompanying
consolidated financial statements are unaudited. In the opinion of management,
all adjustments necessary for a fair presentation of the consolidated financial
statements have been included. All such adjustments are of a normal and
recurring nature. The notes included herein should be read in conjunction
with the notes to consolidated financial statements included in the
Corporation's 1995 Annual Report to shareholders.
Note 2 - Allowance for Loan Losses
A summary of transactions in the consolidated allowance for loan losses
the nine months ended September 30 follows:
1996 1995
Balance, January 1............................ $ 13,432 $ 13,754
Provision for loan losses..................... 2,520 1,440
Recoveries.................................... 553 594
Loan losses................................... (1,941) (1,796)
Balance, September 30......................... $ 14,564 $ 13,992
Note 3 - Income Taxes
Income tax expense for the nine months ended September 30 is different
than the amount computed by applying the statutory corporate federal
income tax rate of 35% to income before income taxes. The reasons
for this difference are as follows:
1996 1995
Tax expense at statutory rate......... $11,098 $ 9,279
Increase (reduction) in taxes
resulting from:
Tax exempt interest................... (436) (587)
Other, net............................ 292 221
Provision for income taxes............ $10,954 $ 8,913
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations
Management's discussion and analysis of financial information is
presented to aid the reader in understanding and evaluating the financial
condition and results of operations of Jefferson Bankshares, Inc. The
analysis focuses on the Consolidated Financial Statements and their
accompanying notes. Highlighted in the discussion are material changes
from prior reporting periods and any identifiable trends affecting the
Corporation.
FINANCIAL CONDITION
Total assets on September 30, 1996 were $2.108 billion compared
with $2.036 billion one year earlier. At December 31, 1995, total assets
were $2.051 billion. Average total assets in the third quarter of 1996
were $2.071 billion compared with the third quarter 1995 average of
$2.026 billion. After nine months, total assets averaged $2.048 billion
in 1996 compared with $1.977 billion in 1995.
Loans, net of unearned income increased 12 percent to $1.338 billion
on September 30, 1996 from the year earlier total of $1.190 billion. The
September 30, 1996 total represented a $117 million increase over the year-
end 1995 total of $1.220 billion and a $55 million increase over the June
30, 1996 total of $1.283 billion. Indirect instalment loans, which are
acquired from automobile dealers and through other referral sources, led
the third quarter 1996 loan growth. This segment of the loan portfolio
increased $23 million at September 30, 1996 compared with the total
on June 30, 1996. Commercial, construction and mortgage loans also
increased strongly in the third quarter of 1996.
On an average basis, the loan portfolio increased 11 percent in the
third quarter to $1.306 billion in 1996 compared with $1.175 billion in
1995. Average loans after nine months in 1996 increased 10 percent over
comparable 1995 averages to $1.264 billion from $1.152 billion.
The investment securities portfolio on September 30, 1996 totaled
$598 million, which represented an 11 percent decrease compared with the
year earlier total of $675 million. At year-end 1995, investment
securities totaled $643 million. Investment securities were reduced to
accommodate loan growth. In the third quarter, total investment securities
averaged $597 million in 1996, or 10 percent below the third quarter 1995
average of $667 million. After nine months, the portfolio averaged $619
million in 1996 and $644 million in 1995.
In accordance with Statement of Financial Accounting Standards No. 115,
Accounting for Certain Investments in Debt and Equity Securities,
investment securities that are classified as available for sale are
reported at fair value. The difference between fair value and amortized
cost of securities available for sale at September 30, was a gain of
$157 thousand in 1996 and $2.0 million in 1995. The reduction in the
unrealized gain was attributable to higher interest rates.
The Corporation was not invested in federal funds sold or other short-
term money market investments at September 30 in 1996 or 1995. At year-
end 1995, such investments totaled $15 million. In the third quarter
of 1996 and 1995 money market investments averaged $13 million. After
nine months, these investments averaged $11 million in 1996 and $14 million
in 1995.
Total deposits on September 30, 1996 were $1.828 billion, or 3
percent above the year earlier total of $1.784 billion. At year-end
1995, total deposits were $1.793 billion. Non interest-bearing deposits
increased 9 percent to $312 million on September 30, 1996 from $286
million one year ago. For the same period, interest-bearing deposits
increased to $1.516 billion from $1.497 billion. Deposit growth in 1996
was hampered by the continued strong flow of funds into mutual funds and
other investment vehicles. Average total deposits in the third quarter
were $1.797 billion in 1996 and $1.773 billion in 1995. After nine months
in 1996, total deposits averaged $1.777 billion compared with $1.722
billion in the same period in 1995.
Short-term borrowings totaled $30 million on September 30, 1996
compared with $15 million one year earlier. At year-end 1995, these
borrowings totaled $16 million. In the third quarter, short-term
borrowings averaged $26 million in 1996 and $17 million in 1995. After
nine months, these borrowings averaged $26 million in both 1996 and 1995.
RESULTS OF OPERATIONS
Net income increased 18 percent in the third quarter of 1996 to $7.2
million from $6.1 million in the third quarter of 1995. Net income per
share rose 20 percent in the third quarter to $.48 in 1996 from $.40 in
1995.
After nine months in 1996, net income totaled $20.8 million, or
18 percent above $17.6 million in the comparable period of 1995. Net
income per share also increased 18 percent to $1.37 after nine months
in 1996 from $1.16 in the 1995 period.
Net income in the third quarter of 1996 produced a return on average
assets of 1.40 percent compared with 1.21 percent in the third quarter
of 1995. After nine months, this ratio of profitability was 1.35 percent
in 1996 compared with 1.19 percent in 1995. In the third quarter of 1996,
the return on average shareholders' equity advanced to 12.44 percent from
11.18 percent in the same quarter of 1995. After nine months, this ratio
improved to 11.99 percent in 1996 from 10.90 percent in 1995.
Higher net interest income was a leading factor in the increase
in net income and the higher profitability ratios in both the third quarter
and nine month comparisons between 1996 and 1995. In the third quarter of
1996, interest income increased 4 percent to $38.6 million, and interest
expense decreased 5 percent to $14.7 million. Interest income increased
as the result of loan growth and the consequent higher proportion of
earning assets held in the loan portfolio. Interest expense decreased
as the result of lower interest rates in the third quarter of 1996 compared
with the third quarter of 1995. The result was a 10 percent increase in
net interest income in the third quarter of 1996. The increase in net
interest income was reflected in the net interest margin, which improved to
5.05 percent in the third quarter of 1996 compared with 4.78 percent in the
third quarter of 1995.
After nine months, net interest income was 8 percent higher in 1996 at
$70.2 million compared with $65.2 million in 1995. The factors affecting
the nine month comparison were similar to those influencing the third
quarter comparison. Interest income was 5 percent higher after nine
months in 1996 at $113.8 million compared with $108.7 million in the same
period in 1995. Interest expense, however, was nearly flat in the nine
month comparison between 1996 and 1995. The higher net interest income
after nine months in 1996 produced a net interest margin of 5.00 percent
compared with 4.88 percent in the same period in 1995.
The provision for loan losses was increased significantly in both
third quarter and nine month period in 1996 principally as the result of
loan growth and to a lesser extent because of marginally higher loan losses
and industry trends in credit quality measures. In the third quarter of
1996, the provision for loan losses was increased to $900 thousand from
$480 thousand in the third quarter of 1995. After nine months the
provision for loan losses totaled $2.5 million in 1996 compared with $1.4
million in 1995. On September 30, 1996, the allowance for loan losses
totaled $14.6 million or 1.09 percent of loans, net of unearned income.
One year earlier, the allowance totaled $14.0 million, or 1.18 percent of
loans, net of unearned income.
Although net loan losses were higher in 1996 comparisons, the amounts
relative to the size of the loan portfolio were nearly constant and
remained at low levels compared with industry averages. In the third
quarter, net loan losses were $422 thousand in 1996 and $373 thousand
in 1995. In both quarters, the amount of net losses represented .13
percent of average loans net of unearned income. After nine months,
net loan losses amounted to $1.4 million in 1996 and $1.2 million in
1995. Those amounts represented .15 percent and .14 percent,
respectively, of average loans, net of unearned income.
In addition, non-performing assets continued to decrease in the
third quarter of 1996. Non-performing assets totaled $7.6 million at
September 30, 1996, or 36 percent below the year earlier total of $11.7
million. The September 30, 1996 total also represented a decrease from
the June 30, 1996 total of $8.7 million. Loans 90 days or more past due
decreased to $2.6 million on September 30, 1996 compared with the year
earlier $3.4 million.
Strong increases in non-interest income in the third quarter and nine
month period in 1996 also contributed to the increases in net income in
those periods. In the third quarter, non-interest income increased 12
percent, and after nine months it rose 15 percent in 1996 compared with
the respective periods in 1995. Trust income increased 9 percent in the
third quarter, but only 3 percent after nine months in 1996. Deposit
account fees were 10 percent higher in the third quarter and 9 percent
higher after nine months compared with the same periods in 1995. Higher
return check charges were principally responsible for these increases.
Income from selling mortgage loans in the secondary market rose
significantly both in the third quarter and nine month period in 1996
as the result of an increase in the volume of loan originations. The
$135 thousand recorded in the third quarter of 1996, however, was below
the $205 thousand recorded in the second quarter of 1996. As expected,
an upward movement in mortgage loan rates led borrowers to favor
adjustable rate mortgages, which were held in the loan portfolio rather
than sold in the secondary market. Other income rose 21 percent in the
third quarter and 30 percent after nine months in 1996 compared with
the same periods in 1995. Other income benefited from increases in
credit card fees, revenues from the sale of investment products and
services, and other miscellaneous income.
Modest increases in non-interest expense in both the third quarter
and the nine month period in 1996 were also positive factors in the
earnings performance. Non-interest expense increased only 2 percent in the
third quarter of 1996 compared with the third quarter of 1995. Salaries
and employee benefits and other expense both increased 3 percent in third
quarter comparisons between 1996 and 1995. In similar comparisons,
equipment expense increased only 1 percent, and occupancy expense showed
no increase. After nine months in 1996, salaries and employee benefits
were 6 percent above the amount recorded in the comparable period in 1995.
Occupancy expense after nine months in 1996 was 14 percent higher,
principally as the result of a $438 thousand charge recorded in the second
quarter of 1996 in accordance with Statement of Financial Accounting Standards
No. 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of. After nine months, equipment expense
was 3 percent higher in the 1996 period compared with the 1995 period.
Other expense decreased 14 percent after nine months in 1996 compared with
the same period in 1995. The largest factor in this decrease was a $1.8
million decrease in F.D.I.C. assessments. In addition, a recovery from
the sale of a foreclosed property in the second quarter of 1996 lowered
other expense $448 thousand.
Income tax expense increased to $3.8 million in the third quarter of
1996 from $3.1 million in the third quarter of 1995. After nine months,
income tax expense totaled $11.0 million in 1996 compared with $8.9 million
in 1995. Both increases were attributable principally to higher pre-tax
income.
LIQUIDITY
A financial institution's liquidity requirements are measured by its
need to meet deposit withdrawals, fund loans, maintain reserve
requirements, and operate the organization. To meet its liquidity needs,
the Corporation maintains cash reserves and has an adequate flow of
funds from maturing loans, investment securities, and short-term
investments. In addition, the Corporation's bank affiliate has the ability
to borrow from the Federal Reserve and from the Federal Home Loan Bank.
The Corporation considers its sources of liquidity to be ample to meet its
needs.
CAPITAL RESOURCES
On September 30, 1996, shareholders' equity totaled $234 million, or
11 percent of total assets. Included in shareholders' equity on September
30, 1996 were unrealized gains on securities available for sale, net of
tax effects, of $102 thousand. In the third quarter of 1996, shareholders'
equity averaged $233 million compared with $220 million in the third
quarter of 1995. After nine months, shareholders' equity averaged $231
million in 1996 and $215 million in 1995. On September 30, 1996 the book
value of a share of common stock was $15.42 or 6 percent above the year
earlier $14.53.
On September 26, 1996, the Corporation commenced a modified Dutch
Auction tender offer to acquire up to 1,250,000 shares of its common stock.
The tender offer expired on November 1, 1996 subsequent to the
conclusion of the third quarter and, thus, the financial effects of the
tender are not included in the accompanying financial statements. In the
tender, the Corporation purchased 1,235,690 shares at a price of $28.00
per share. Excluding costs of the transaction, the purchase of the
shares will have the effect of decreasing shareholders' equity $34.6 million.
After this reduction in shareholders' equity, the Corporation and its
bank subsidiary, Jefferson National Bank, will continue to meet all
applicable regulatory requirements and will continue to be classified as
"well capitalized" institutions, which is the highest regulatory
standard for capital under the prompt corrective action framework enacted
in the Federal Deposit Insurance Corporation Improvement Act of 1991.
The tender offer was undertaken to restructure the balance sheet and to
improve shareholder value by increasing earnings per share and improving
the return on average shareholders' equity.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The exhibits listed on the accompanying Index to Exhibits
immediately following the signature page are filed as part
of, or incorporated by reference into this report.
(b) Reports on Form 8-K
Jefferson filed no reports on Form 8-K during the quarter
ended September 30, 1996.
Pursuant to the requirements of the Securities Exchange Act of 1934
the Registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JEFFERSON BANKSHARES, INC.
November 13, 1996 By: _____________________________
O. Kenton McCartney
President and
Chief Executive Officer
And
By: _____________________________
Allen T. Nelson, Jr.
Senior Vice President,
Chief Financial Officer,
and Treasurer
EXHIBIT INDEX
Exhibit No. Page
3. Articles of Incorporation and Bylaws:
(a) Articles of Incorporation incorporated by
reference to Jefferson Bankshares' Annual
Report on Form 10-K for 1984.
(b) Articles of Amendment to Articles of
Incorporation dated May 7, 1987, incorporated
by reference to Jefferson Bankshares' report
on Form 10-Q for the quarter ended June 30,
1987.
(c) Articles of Amendment to Articles of
Incorporation dated March 23, 1993, incorporated
by reference to Jefferson Bankshares' report
on Form 10-Q for the quarter ended June 30, 1993.
(d) Amended and Restated Bylaws dated January 24, 1995,
incorporated by reference to Jefferson Bankshares'
Annual Report on Form 10-K for 1994.
(e) Amendment to Bylaws dated September 25, 1996, 15
is filed herewith.
4. Instruments defining the rights of security holders
including indentures:
(a) Articles of Incorporation, incorporated by reference
to Jefferson Bankshares' 1984 Annual Report on
Form 10-K.
(b) Articles of Amendment to Articles of
Incorporation dated May 7, 1987, incorporated
by reference to Jefferson Bankshares' report
on Form 10-Q for the quarter ended June 30,
1987.
(c) Articles of Amendment to Articles of
Incorporation dated March 23, 1993,
incorporated by reference to Jefferson
Bankshares' report on Form 10-Q for the
quarter ended June 30, 1993.
10. Material Contracts:
(a) Senior Officers Supplemental Pension Plan,
incorporated by reference to Jefferson
Bankshares' 1982 Annual Report on Form 10-K.
(b) Split Dollar Life Insurance Plan, incorporated
by reference to Jefferson Bankshares' Annual
Report on Form 10-K for 1984.
(c) 1995 Long Term Incentive Stock Plan, incorporated
by reference to Exhibit 99(a) to Form S-8 of
Jefferson Bankshares, File No. 33-60799.
(d) Amendment dated June 27, 1995 to Long Term Incentive
Stock Plan, incorporated by reference to Jefferson
Bankshares' report on Form 10-Q for the quarter ended
June 30, 1995.
(e) Deferred Compensation and Stock Purchase Plan for
Non-Employee Directors, incorporated by reference
to Exhibit 99(a) to Form S-8 of Jefferson Bankshares,
File No. 33-57461.
(f) Executive Severance Agreement dated October 25,
1993 between Jefferson Bankshares and O. Kenton
McCartney, incorporated by reference to Jefferson
Bankshares' Annual Report on Form 10-K for 1993.
(g) Executive Severance Agreement dated October 25,
1993 between Jefferson Bankshares and Robert H.
Campbell, Jr., incorporated by reference to Jefferson
Bankshares' Annual Report on Form 10-K for 1993.
(h) Executive Severance Agreement dated December 6, 1993
between Jefferson Bankshares, Inc. and Allen T.
Nelson, Jr., incorporated by reference to Jefferson
Bankshares' Annual Report on Form 10-K for 1994.
(i) Executive Severance Agreement dated October 25, 1993
between Jefferson Bankshares and William M. Watson, Jr.,
incorporated by reference to Jefferson Bankshares' Annual
Report on Form 10-K for 1995.
(j) Amended and Restated Split Dollar Life Insurance
Agreement dated October 29, 1993 between Jefferson
Bankshares and Robert H. Campbell, Jr., incorporated by
reference to Jefferson Bankshares' Annual Report on
Form 10-K for 1993.
(k) Amendment dated February 15, 1995, to the Amended
and Restated Split Dollar Life Insurance Agreement
dated October 29, 1993 between Jefferson Bankshares
and Robert H. Campbell, Jr., incorporated by reference
to Jefferson Bankshares' report on Form 10-Q for the
quarter ended March 31, 1995.
(l) Amended and Restated Split Dollar Life Insurance
Agreement dated October 29, 1993 between Jefferson
Bankshares and O. Kenton McCartney, incorporated by
reference to Jefferson Bankshares' Annual Report on
Form 10-K for 1993.
(m) Amendment dated as of May 19, 1994, to the Amended
and Restated Split Dollar Life Insurance Agreement
dated October 29, 1993 between Jefferson Bankshares
and O. Kenton McCartney, incorporated by reference
to Exhibit 10(p) to Form S-4 of Jefferson Bankshares,
File No. 33-53727.
(n) Split Dollar Life Insurance Agreement dated
January 6, 1995 between Jefferson Bankshares, Inc. and
Allen T. Nelson, Jr., incorporated by reference to
Jefferson Bankshares' Annual Report on Form 10-K for 1994.
(o) Amended and Restated Split Dollar Life Insurance
Agreement dated October 29, 1993 between Jefferson
Bankshares and William M. Watson, Jr., incorporated by
reference to Jefferson Bankshares' Annual Report on
Form 10-K for 1995.
27. Financial Data Schedule 16