FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
_____________________to____________________
For Quarter Ended
Commission
file number 0-15729
PREMIER BANKSHARES CORPORATION
(Exact name of registrant as specified in its charter)
VIRGINIA 54-1377250
State or other jurisdiction of
(I. R. S. Employer)
incorporation or organization
Identification No.)
201 West Main Street
P. O. Box 928, Tazewell, VA 24651
(Address of Principal Executive Offices)
Registrant's telephone number including area code (703) 988-7145
988-7511
_______________________________________________________________
(Former name, former address and former
fiscal year, if changed since last report).
Indicate by 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
(or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing
requirements
for the past 90 days. Yes X . No ___.
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of September 30, 1994.
Common stock, $2 par value - 4,405,127 shares.
INDEX
Page No.
Part I. Financial Information:
Item 1. Financial Statements
Consolidated Balance Sheets -
September 30, 1994 and December 31, 1993 3
Consolidated Statements of Income -
Nine Months Ended
September 30, 1994 and 1993 4
Consolidated Statements of
Stockholders' Equity - Nine Months
Ended September 30, 1994 and 1993 5
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1994 and 1993 6
Notes to Consolidated Financial Statements 7-10
Supplemental Financial Data (Tables I - III) 11-13
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 14-15
Part II. Other Information:
Item 1. Legal Proceedings 16
Item 2. Changes in Securities 16
Item 3. Defaults Upon Senior Securities 16
Item 4. Submission of Matters to a Vote of
Security Holders 16
Item 5. Other Information 16
Item 6.Exhibits and Reports on Form 8K 16
ITEM 1. FINANCIAL INFORMATION:
PREMIER BANKSHARES CORPORATION AND AFFILIATES
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars)
September 30 December 31,
1994 1993
ASSETS:
Cash and Due From Banks 16101 12003
Interest-bearing Deposits in Banks 350
Securities Held to Maturity
(Approximate Market Value $80,678
in 1994, $530 in 1993) 83018 530
Securities Available for Sale
(Amortized Cost $145,985 1994) 138927
Securities Held for Sale (Approximate
Market Value $201687 in 1993) 211045
Federal Funds Sold 7090 34665
Loans, Net of Unearned Income of $4,074 in
in 1994, $5,462 in 1993 and Allowance
for Loan Losses of $4,839 in 1994 and
$4,558 in 1993 298460 278922
Bank Premises and Equipment 10154 9782
Accrued Income Receivable 4563 4061
Other Assets 6792 6611
TOTAL ASSETS 565105 557969
LIABILITIES:
Deposits:
Demand 53957 45898
Interest-bearing Demand 55386 49886
Savings 156782 162267
Large Denomination Certificates
of Deposit 30527 36647
Other Time 197456 189457
TOTAL DEPOSITS 494108 484155
Short-term Debt 13748 15331
Other Liabilities 3024 4144
TOTAL LIABILITIES 510880 503630
SHAREHOLDERS' EQUITY:
Capital Stock-Common-$2 Par
10,000,000 Authorized; 4,405,127
Shares Issued in 1994 and 1993 8810 8810
Surplus 21694 21693
Undivided Profits 28428 23943
Net Unrealized Loss on Securities (4707) (107)
TOTAL STOCKHOLDERS' EQUITY 54225 54339
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 565105 557969
<FN>
Notes to financial statements are an integral part of these
statements.
</TABLE
PREMIER BANKSHARES CORPORATION AND AFFILIATES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands of Dollars)
Three Months Ended Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
INTEREST INCOME:
Interest and Fees on Loans 6997 6627 20291 19509
Federal Funds Sold 69 260 439 649
Money Market Deposits 2 13 22 54
Interest on Investments Held to
Maturity, Taxable 411 1101
Interest on Investments Held to
Maturity, Non-taxable 811 2328
Interest on Securities Available for
Sale, Taxable 2029 6173
Interest on Securities Available for
Sale, Non-taxable 113 354
Interest on Investment Securities,
Taxable 2078 6075
Interest on Investment Securities,
Non-taxable 739 2182
Trading Account Income 1 16
Total Interest Income 10432 9718 30708 28485
INTEREST EXPENSE:
Demand Deposits 377 365 1102 1057
Savings Deposits 1318 1357 4122 3655
Large Denomination Certificates of
Deposit 349 381 1114 1162
Other Time Deposits 2121 2077 6209 6143
Short-term Debt 166 92 434 200
Long-term Debt 18
Total Interest Expense 4331 4272 12981 12235
Net Interest Income 6101 5446 17727 16250
ADDITION TO ALLOWANCE FOR LOAN AND
LEASE LOSSES 393 105 588 435
Net Interest Income After
Addition to Allowance for
Loan and Lease Losses 5708 5341 17139 15815
OTHER INCOME:
Service Charges on Deposit Accounts 459 443 1328 1209
Trust Department Income 110 43 186 182
Other Service Charges, Commissions
and Fees 331 410 995 1042
Other Operating Income 49 77 184 278
Security Gains (15) 213 667 1189
Trading Account Security Gains
(Losses) 9
Total Other Income 934 1186 3320 3909
OTHER EXPENSES:
Salaries 1690 1599 4946 4624
Employee Benefits 532 364 1454 1160
Occupancy Expenses 195 185 583 585
Furniture and Equipment Expenses 221 182 648 533
Other Operating Expenses 1577 1444 4794 4339
Total Other Expense 4215 3774 12425 11241
Income Before Income Taxes 2427 2753 8034 8483
Applicable Income Taxes 541 739 1964 1837
Net Income 1886 2014 6070 6646
NET INCOME PER SHARE .43 .46 1.38 1.51
CASH DIVIDENDS PER SHARE .12 .11 .36 .33
<FN>
The notes to financial statements are an integral part of these
statements.
PREMIER BANKSHARES CORPORATION AND AFFILIATES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In Thousands of Dollars)
Nine Months Ended
September June 30,
1994 1993
Balance at Beginning of Year 54339 47998
Net Income 6070 6646
Cash Dividends Declared (1584) (1454)
Change in Valuation Allowance for Securities (4600) 7
Other (6)
Balance at End of Period 54225 53191
<FN>
The notes to financial statements are an integral part of these
statements.
PREMIER BANKSHARES CORPORATION AND AFFILIATES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
Nine Months Ended
September 30,
1994 1993
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income 6070 6646
Adjustments to Reconcile Net Income to Cash
Provided by Operating Activities:
Depreciation and Amortization of Premises
and Equipment 537 489
Provision for Loan Losses 588 435
Amortization of:
Goodwill and Intangibles 199 283
Premiums and Accretion of Discounts, Net (362) (165)
Securities Gains (667) (1198)
Increase in Other Assets (588) (1428)
Increase in Other Liabilities (1120) 703
Net Cash Used In Operating Activities 4687 5765
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (Increase) Decrease in Temporary Investments 27925 (9445)
Sale of Securities Available for Sale 11847 75759
Maturities of Securities Availiable For Sale 28141
Purchase of Securities Availiable for Sale (54688)
Maturities of Securities Held to Maturity 17016 24570
Purchase of Securities Held to Maturity (16247) (126705)
Net Increase in Customer Loans (20452) (17971)
Premises and Equipment Expenditures (930) (748)
Sales of Premises and Equipment 15 15
Net Cash Used in Investing Activities 7373 (54525)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Increase in Demand Deposits,
Now and Savings Accounts 8074 45535
Net Decrease in Time Deposits 1879 5726
Payments on Long-term Debt (776)
Net Increase (Decrease) in Short-term Debt (1583) 3586
Cash Dividends Paid (1586) (1454)
Purchase of Capital Stock
Net Cash Provided by Financing Activities 6784 52617
Net Increase in Cash and Due from Banks 4098 3857
CASH AND DUE FROM BANKS:
Beginning 12003 13507
Ending 16101 17364
Supplemental Disclosures of Cash Flow Information:
Cash Payments for Interest Paid:
To Depositors 12150 11393
On Federal Funds Purchased and Securities Sold
Under Agreement to Repurchase 425 193
Income Taxes 1644 2497
<FN>
The notes to financial statements are an integral part of these
statements.
PREMIER BANKSHARES CORPORATION AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. General
The consolidated statements include the accounts of Premier
and its
affiliates. All significant intercompany balances and
transactions have
been eliminated. In the opinion of management, the
accompanying unaudited
consolidated financial statements contain all adjustments
(consisting of
only normal recurring accruals) necessary to present fairly
the financial
positions as of September 30, 1994, and December 31, 1993, and
the results of
operations and cash flows for the nine months ended
September 30, 1994 and 1993.
The results of operations for the nine months ended
September 30, 1994, are not
necessarily indicative of the results to be expected for the
full year.
2. Investment Securities
Carrying amounts and fair values of securities being held to
maturity are
summarized as follows:
September 30, 1994
Gross Gross Estimated
Amortized Unrealized UnrealizedMarket
Cost Gains Losses Value
(In Thousands of Dollars)
U.S. Government Agencies
and Corporations 17933 1424 16509
Obligations of States
and Political
Subdivisions 64586 262 1159 63689
Other Debt Securities 499 19 4800
83018 262 2602 80678
December 31, 1993
Gross Gross Estimated
Amortized Unrealized UnrealizedMarket
Unrealized Unrealized
Cost Gains Losses Value
(In Thousands of Dollars)
Other Debt Securities 530 530
2. Investment Securities (continued)
Carrying amounts and fair value of securities available for sale
are summarized
as follows:
September 30, 1994
Gross Gross Estimated
Amoritized Unrealized Unrealized Market
Cost Gains Losses Value
(In Thousands of Dollars)
U.S. Treasury Securities 12301 81 164 12218
U.S. Government Agencies
and Corporations 26557 9 1054 25512
Obligations of States and
Political Subdivisions 7756 15 26 7745
Corporate Securities 1096 46 1050
Morgage-backed
Securities 91744 3 5579 86168
Marketable Equity 1719 197 1522
Other Debt Securities 4812 2 102 4712
145985 110 7168 138927
December 31, 1993
Gross Gross Estimated
Amoritized Unrealized Unrealized Market
Cost Gains Losses Value
(In Thousands of Dollars)
U.S. Treasury Securities 5783 329 6112
U.S. Government Agencies and
Corporations 136288 1024 922 136390
Obligations of States and
Political Subdivisions 61406 3732 147 61390
Corporate Securities 302 4 3 303
Morgage-backed
Securities 2869 6 28 2847
Marketable Equity 1489 1489
Other Debt Securities 2908 115 3023
211045 5210 1100 215155
Proceeds from sales of securities and resulting gross gains and losses are
follows:
Nine Months Ended
September 30, September 30,
1994 1993
(In Thousands of Dollars)
Proceeds From Sales 11847 75759
Gross Gains 667 1222
Gross Losses 24
Net 667 1198
PREMIER BANKSHARES CORPORATION AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
3. Loans
The following is a summary of loans outstanding at the end
of the periods indicated:
September 30, December 31,
1994 1993
Commercial, Financial, and Agricultural 59462 66654
Real Estate - Construction 8995 5178
Real Estate - Mortgage 163679 144709
Loans to Individuals 74055 70616
Others 1182 1334
307373 288491
Less Unearned Income (4074) (5088)
303299 283403
Less Allowance for Loan and Lease Losses (4839) (4481)
298460 278922
The following schedule summarizes the changes in the allowance
for loan and lease
losses:
September 30, September 30, December 31
1994 1993 1993
Balance, Beginning 4481 4752 4752
Provision Charged Against Income 588 435 592
Recoveries 228 405 680
Loans Charged Off (458) (1034) (1543)
Balance, Ending 4839 4558 4481
Nonperforming assets consist of the following:
September 30, December 31,
1994 1993
(In Thousands of Dollars)
Nonaccrual Loans 3589 3451
Restructured Loans 99 1128
Nonperforming Loans 3688 4579
Foreclosed Properties 694 1125
Nonperforming Assets 4382 5704
<FN>
Total loans past due 90 days or more and still accruing were
$430 on September 30, 1994 and $1,397 on December 31, 1993.
PREMIER BANKSHARES CORPORATION AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
4. Short-term Debt
Short-term debt consists of the following:
September 30, December 31,
1994 1993
(In Thousands of Dollars)
Federal Funds Purchased and Securities Sold
Under Agreements to Repurchase 13748 15271
Line of Credit Borrowing 60
Total Short-term Debt 13748 15331
5. Long-term Debt
Premier Bankshares had no long-term debt outstanding for the
periods ended
September 30, 1994 or December 31, 1993.
6. Earnings Per Share
Earnings per share are computed on the weighted average
common shares
outstanding of 4,405,127 for both the three and nine months ended
September 30, 1994; and 4,405,128 and 4,405,166
for the three and nine months ended September 30, 1993, respectively.
7. Capital Requirements
A comparison of the Company's capital as of September 30, 1994
with the minimum
requirements is presented below.
Minimum
Actual Requirements
Tier I Risk-based Capital 12.72% 4.00%
Total Risk-based Capital 13.89% 8.00%
Leverage Ratio 9.31% 3.00%
8. Pending Affiliation
The Company on June 29, 1994, agreed to affiliate with Dickenson-Buchanan,
Haysi, Virginia (Dickenson) whereby the shareholders of Dickenson will receive
7.77 shares of Premier's stock in exchange for each share of Dickenson's common
stock. This tax-free exchange will be accounted for as a pooling-of-interests
and will be subject to Dickenson's shareholders and regulatroy approvals.
TABLE I
Consolidated Selected Financial Data
(Amounts in thousands, except per share data)
1994
Third Second First
Quarter Quarter Quarter
Interest Income 10432 10278 9998
Interest Expense 4331 4325 4325
Net Interest Income 6101 5953 5673
Provision for Loan Losses 393 95 100
Net Income 1886 1986 2198
Per Share Data:
Net Income .43 .45 .50
Cash Dividends Paid .12 .12 .12
Total Average Stockholders' Equity 54642 53690 53368
Total Average Assets 572934 582658 568763
Ratios:
Average Stockholders' Equity
to Total Average Assets 9.54 9.21 9.38
Return on Average Equity 13.84 14.80 16.48
Return on Average Assets 1.31 1.36 1.55
1993
Fourth Third Second First
Quarter Quarte Quarter Quarter
Interest Income 9842 9718 9484 9283
Interest Expense 4422 4272 4050 3913
Net Interest Income 5420 5446 5434 5370
Provision for Loan Losses 157 105 160 170
Net Income 1697 2014 2345 2287
Per Share Data: Net Income .38 .46 .53 .52
Cash Dividends Paid .11 .11 .11 .11
Total Average Stockholders'
Equity 53610 52452 51093 48760
Total Average Assets 556875 533016 508534 488699
Ratios: Average Stockholders'
Equity to Total
Average Assets 9.63 9.84 10.05 9.98
Return on Average Equity 12.66 15.36 18.32 18.76
Return on Average Assets 1.22 1.51 1.84 1.87
[TEXT]
TABLE II
DISTRIBUTION OF ASSETS, LIABILITIES, STOCKHOLDERS' EQUITY,
INTEREST RATES AND INTEREST DIFFERENTIAL
The following schedule presents the condensed consolidated
average balance sheets
and the average rates earned and paid by Premier and its
affiliates on a fully
taxable equivalent basis assuming a 34% tax rate for the nine
months ended September 30, 1994 and 1993.
Nonaccruing loans are included in the total loans.
1994 1993
Average Interest Yield/ Average Interest Yield/
Balance And Fees Rate Balance And Fees Rate
(In Thousands of Dollars) (In Thousands of Dollars)
Assets
Interest-earning Assets:
Loans and Leases 286593 20310 9.45 273219 19534 9.53
Taxable Investment
Securities 166680 7274 5.82 126126 6091 6.44
Nontaxable
Investment
Securities 67829 4064 7.99 49489 3306 8.91
Interest-bearing
Deposits with Other
Banks 322 22 9.11 776 54 9.28
Federal Funds Sold
and Securities
Purchased Under
Agreements to
Resell 16454 439 3.56 29475 649 2.94
Total
Interest-earning
Assets 537878 32109 7.96 479085 29634 8.25
Noninterest-earning Assets:
Cash and Noninterest-bearing
Deposits 16505 15538
Premises and Equipment,
Net 9913 9694
Other Assets 15040 10518
Less Allowance for
Loan and Lease
Losses (4634) (4752)
Total Assets 574702 510083
Liabilities and Stockholders' Equity
Interest-bearing Liabilities:
Demand Deposits 53202 1102 2.76 45240 1057 3.12
Savings Deposits 163499 41220 3.36 130459 3655 3.74
Large Denomination Certificates
of Deposit 33139 1114 4.48 34833 1162 4.45
Other Time
Deposits 194912 6209 4.25 184944 6143 4.43
Short-term
Borrowings 18154 434 3.19 9972 200 2.67
Long-term Debt 392 18 6.12
Total Interest-bearing
Liabilities 462906 12981 3.74 405840 12235 4.02
Noninterest-bearing Liabilities:
Demand Deposits 53873 48918
Other Liabilities 4106 4557
Stockholders'
Equity 53817 50768
Total
Liabilities
and
Stockholders'
Equity 574702 510083
Net Interest
Differential 4.22 4.23
Net Interest
Earnings 19128 17399
Net Yield on
Interest-earning
Assets 4.74 4.84
PREMIER BANKSHARES CORPORATION AND AFFILIATES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands of Dollars)
Three Months Ended Nine Months Ended
September 30, 1994 and 1993 September 30, 1994 and
1993
(In Thousands of Dollars)
Amount Percent Amount Percent
INTEREST INCOME:
Interest and Fees on Loans 370 5.58 782 4.01
Federal Funds Sold (191) (73.46) (210) (32.36)
Money Market Deposits (11) (84.62) (32) (59.26)
Interest on Investments Held to
Maturity, Taxable 411 1101
Interest on Investments Held to
Maturity, Non-taxable 811 2328
Interest on Securities
Available for Sale, Taxable 2029 6173
Interest on Securities
Available for Sale,
Non-taxable 113 354
Interest on Investment
Securities, Taxable (2078) (6075)
Interest on Investment
Securities, Non-taxable (739) (2182)
Trading Account Income (1) (16)
Total Interest Income 714 7.35 2223 7.80
INTEREST EXPENSE:
Demand Deposits 12 3.29 45 4.26
Savings Deposits (39) (2.87) 467 12.78
Large Denomination Certificates
of Deposit (32) (48) (4.13)
Other Time Deposits 44 (8.40) 66 1.07
Short-term Debt 74 2.12 234 117.00
Long-term Debt 84.43 (18)
Total Interest Expense 59 1.38 746 6.10
Net Interest Income 655 12.03 1477 9.09
PROVISION FOR LOAN LOSSES 288 274.29 153 35.17
Net Interest Income After
Provision for Loan Losses 367 6.87 1324 8.37
OTHER INCOME:
Service Charges on Deposit
Accounts 16 3.61 119 9.84
Trust Department Income 67 155.81 4 2.20
Other Service Charges,
Commissions and Fees (79) (19.27) (87) (8.35)
Other Operating Income (28) (36.36) (94) (33.81)
Security Gains (228) (107.04) (522) (43.90)
Trading Account Security Gains
(Losses) (9) (100.00)
Total Other Income (252) (21.25) (589) (15.07)
OTHER EXPENSES:
Salaries 91 5.69 322 6.96
Employee Benefits 168 46.15 294 25.34
Occupancy Expenses (10) (5.41) (2) (.34)
Furniture and Equipment
Expenses 39 21.43 115 21.58
Other Operating Expenses 133 9.21 455 10.49
Total Other Expense 441 11.69 1184 10.53
Income Before Income Taxes (326) (11.84) (449) (5.29)
Applicable Income Taxes (198) (26.79) 127 6.91
305.10
NET INCOME (128) (6.36) (576) (8.67)
ITEM 2. MANAGEMENT'S DISCUSSION:
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Premier's active non-bank subsidiary, Premier Bank Services Corporation,
because of the low volume of activity, discontinued servicing certain consumer
loans for selected affiliate Banks during the second quarter of 1993.
Preparations made during the latter half of 1993 to offer investment advisory
services to Premier banks as well as other financial institutions and investing
groups through this service corporation were also discontinued, and, the
corporation is no longer active.
EARNINGS PERFORMANCE
Net income for the first nine months of 1994 was $6,070,000, a $576,000 or 8.76%
decrease from the $6,646,000 earned for the same period in 1993. The nine
months earnings for both 1994 and 1993 include non-recurring adjustments to
income. One affiliate bank during the first quarter of 1994 disposed of bonds
backed by the failed Executive Life Insurance Company, which were in default and
had previously been written down, adding approximately $513,000 in security
gains; $339,000, net of the tax effect. First quarter 1993 reflected an
approximate $439,000 decrease in federal incom tax expense due to the
implementation of FASB 109 and the realization of tax benefits on a net loss
carryforward which could be recaptured following the 1991 merger of Bank of
Speedwell and Bank of Shawsville. Also, due to restructing of the investment
portfolio, one affiliate bank booked security gains of $656,000 during the
second quarter of 1993. As a result, on a per share basis, net income for the
fist nine months of 1994 was $1.38 compared to $1.51 for the same period in 1993
, with 4,405,127 average shares outstanding for both the three and nine months
outstanding for 1994; and 4,405,128 and 4,405,166 average shares outstanding
for 1993, respectively.
NET INTEREST INCOME
Net interest income, before provision for loan losses for the nine months ended
September 30, 1994, amounted to $17,727,000, a $1,477,000, or 9.09% increase
from $16,250,000 recorded for the same period of 1993. The net interest
differential
for this period (the difference between the tax-equivalent yield on interest
bearing assets and the rate paid on interest-bearing liabilities) remained
virtually the same, at 4.22%. The tax-equivalent yield on earning assets
decreased from 8.25% in 1993 to 7.96% in 1994 while the rate paid on interest-
bearing liabilities) decreaded 28 basis points to 3.74%.
The net yield (fully taxable equivalent) on earning assets decreased 10 basis
points in 1994 to 4.74% compared to 4.84% in 1993. Yields on loans, taxable
investment securities, nontaxable securities, and interest-bearing deposits
with banks decreased 8, 62, 92, and 17 basis
points, respectively, along with an increase in fed funds sold of 62 basis
points. Adjustments to rates paid on interest-bearing deposits reflected
decreases in all classes, (except for large denomination certificates which
increased only 3 basis points) with demand deposits, savings, and other time
deposit rates decreasing 36, 38, and 18 basis points, respectively.
The rate paid on short-term borrowings increased 52 basis points. Premier's
long-term debt was paid off in latter part 1993.
OTHER INCOME AND EXPENSES
Total other income decreased $589,000 or 15.07% to $3,320,000 due mostly to a
decrease in security gains during 1994 of $522,000 to $667,000 compared to
$1,189,000 in the first nine months of 1993. As mentioned previously, the
majority of
the 1994 security gains was from a $513,000 gain by one affiliate bank from
the sale of bonds which were in default and had been previously written down.
Other service charges, commissions and fees decreased $87,000 in 1994, the most
significant changes being a decrease in loan extension/other fees of $130,000
from 1993, and increase in loan collection fees and credit life and A & H sales
of $20,000 and $29,000, respecitvely, over 1993. Total service charges on
deposit accounts increased $119,000 with the majority of the increase in NSF and
returned check charges, attributable mostly to increased per-item fees.
Other expenses increased $1,184,000 or 10.53% over September 30, 1993.
Salaries
increased 6.96%, and employee benefits 25.34%, due in part to staffing of an
additional branch in mid-summer 1993, the employement of additional personnel
at the individual bank and holding company levels, and normal salary increases.
Occupancy decreased $2,000, while furniture and equipment expenses increased
$115,000 or 21.58%, due largely to the purchase of data processing equipment.
Other operating expenses increased $445,000 in 1994 or 10.49% with the most
significant changes being an increase in legal fees of $273,000, increased FDIC
assessment fees of $119,000 over the same period in 1993, and additional audit
and tax expense of $120,000. Data processing fees decreased $240,000 due
largely to the expiration and renegotiation of the independent service bureau
contract in the latter half of 1993. Less significant increases and decreases
account for the difference.
INVESTMENTS, LOANS, AND DEPOSITS
Net loans increased $19,583,000 or 7.00%, investments increased $10,370,000
or 4.90%, fed funds sold decreased $27,575,000 or 79.55%, with an increase
in total assets of $7,136,000 or 1.28% over December 31, 1993. One affiliate
bank purchased $13,000,000 in local branch deposits of one of its competitors
during the second quarter of 1994. Demand deposits,
interest-bearing demand deposits, and other time deposits increased 17.56%,
11.03%, and 4.22%, respectively. Savings and large denomination certificates
of deposit decreased by $5,485,000 or 3.38% and $ 6,120,000 or 16.70%,
respectively. Fed funds purchased and repurchase agreements decreased
$1,583,000, or 10.33% over year end 1993.
Allowance for Loan and Lease Losses
The allowance for loan and lease losses on September 30, 1994, was $4,839,000
compared to $4,481,000 at December 31, 1993, and $4,558,000 at September 30,
1994. The ratio of allowance for loan and lease losses to total loans net of
unearned income was 1.60% at September 30, 1994. Charge-offs were $458,000
for the first nine months of 1994 compared to
$1,034,000 for the same period in 1993. Recoveries of $228,000 were booked
in the first nine months of 1994; $405,000 in 1993. Management believes
the allowance is adequate at the September 30, 1994 level, after making
provisions during the year of $588,000.
Capital Resources
Total stockholders equity or capital amounted to $54,225,000 at September 30,
1994. The leverage ratio at September 30, 1994 at 9.31%.
Liquidity and interest Sensitivity
Almost the entire deposit base is made up of core deposits with only 6.18% of
total deposits compose of Certificates of deposit of $100,000 and over.
At September 30, 1994, federal funds and investment securities maturing within
one year amounted to $11,782,000, or 2.38% of total deposits. In addition,
$70,102,000 of investment securities or 14.19% of deposits, mature within the
1-5 year range.
The policy of Premier is to maintain the relationship between rate-sensitive
assets and rate-sensitive liabilities which will maximize future profit
levels, given existing expectations of interest rate movements.
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders -
None
Item 5. Other Information - None
Item 6. Exhibits and reports on Form 8-K
a) Exhibits - None
b) Form 8-K - None
SIGNATURES
Pursuant to the requirements 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.
PREMIER BANKSHARES
CORPORATION
Date: November 10, 1994 BY /s/ James R.Wheeling, President
Date: November 10, 1994 BY /s/ Ellen Simpson, Secretary
(Chief Accounting Officer)