SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------
FORM 8-B
For Registration of Securities of
Certain Successor Issuers
Filed Pursuant to Section 12(b) or 12(g) of the
Securities Exchange Act of 1934
VIRGINIA FINANCIAL CORPORATION
(Exact Name of Registrant as Specified in Its Charter)
Virginia 54-1829288
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
24 South Augusta Street
Staunton, Virginia 24401
(Address of principal office)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which each class
to be so registered is to be registered
Not applicable. Not applicable.
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock, par value $5.00 per share
(Title of Class)
<PAGE>
Item 1. General Information
(a) The Registrant was organized on September 30, 1996, as a stock
corporation under the laws of the Commonwealth of Virginia.
(b) The Registrant's fiscal year ends on December 31.
Item 2. Transaction of Succession
(a) Planters Bank & Trust Company of Virginia, headquartered in
Staunton, Virginia (the "Bank"), was the predecessor issuer which had securities
registered pursuant to Section 12(g) of the Securities Exchange Act of 1934 (the
"1934 Act"). The Bank filed all of its 1934 Act reports with the Federal Deposit
Insurance Corporation.
(b) Pursuant to the Agreement and Plan of Reorganization, dated as of
July 30, 1996, and a related Plan of Share Exchange (collectively, the
"Agreement", a copy of which is attached as Appendix A to the Prospectus/Proxy
Statement, in the form as provided to shareholders, included as Exhibit 99.1
hereto), the Registrant acquired all of the issued and outstanding capital stock
of the Bank. The Agreement was approved by the shareholders of the Bank at a
special meeting of shareholders on November 14, 1996. The purpose of the
Agreement was to create a bank holding company structure for the Bank. The
reorganization of the Bank (the "Reorganization") was accomplished through the
Plan of Share Exchange upon the issuance of a Certificate of Share Exchange on
January 2, 1997 by the Virginia State Corporation Commission.
On the effective date of the Reorganization, each share of common
stock of the Bank, par value $10.00 per share, was converted into one share of
common stock of the Registrant, par value $5.00 per share. In order to effect
the Reorganization, the Registrant issued 2,000,000 shares of its common stock.
The Prospectus/Proxy Statement used in connection with the special
meeting of shareholders contains a more complete description of the terms of the
Reorganization.
Item 3. Securities to be Registered
With respect to the Registrant's Common Stock, there are: (1)
presently, 5,000,000 shares of Common Stock, $5.00 par value per share,
authorized; (2) presently, 2,000,000 shares of Common Stock outstanding; and (3)
presently, no shares issued which are held by or for the account of the
Registrant.
2
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Item 4. Description of Registrant's Securities to Be Registered
The Registrant is authorized to issue up to 5,000,000 shares
of its Common Stock, par value $5.00 per share. Presently, the Registrant has
2,000,000 shares of Common Stock outstanding. No shares of preferred stock are
authorized by the Registrant. The following summary description of the capital
stock of the Registrant is qualified in its entirety by reference to the
Articles of Incorporation, as amended, of the Registrant and the Registrant's
Bylaws, copies of which are attached hereto as exhibits.
All shares of Registrant Common Stock issued in the
Reorganization were fully paid and nonassessable. Holders of common stock are
not be entitled to cumulative voting rights. Therefore, the holders of a
majority of the shares voted in the election of directors can elect all of the
directors then standing for election. Holders of common stock have no preemptive
or other subscription rights, and there are no conversion rights or redemption
or sinking fund provisions with respect to the common stock..
The holders of Registrant Common Stock are entitled to one
vote per share on all matters submitted to a vote of shareholders. Subject to
certain limitations on the payment of dividends, holders of Registrant Common
Stock are entitled to share ratably in dividends when declared by the
Registrant's Board of Directors for which funds are legally available therefor.
The principal sources of income to Holding Company will be dividends from the
Bank.
The Registrant's primary subsidiary, the Bank, as a Virginia
chartered bank, is prohibited from paying a dividend that would impair its
paid-in-capital. In addition, the Virginia State Corporation Commission may
limit the payment by an Virginia chartered bank if it determines that the
limitation is in the public interest and is necessary to ensure a bank's
financial soundness.
Under current federal law, insured depository institutions,
such as the Bank, are prohibited from making capital distributions, including
the payment of dividends, if, after making such distribution, the institution
would become "undercapitalized" (as such term is defined in federal law). Based
on the Banks' current financial condition, the Registrant does not expect that
this provision will have any impact on its ability to obtain dividends from its
insured depository institution subsidiary.
As a result of these legal restrictions, there can be no
assurance that the dividends would be paid in the future by the Registrant's
bank subsidiary. The final determination of the timing, amount and payment of
dividends on the Registrant Common Stock is at the discretion of the
Registrant's Board of Directors and will depend upon the earnings of the
Registrant and the Bank, the financial condition of the Registrant and other
factors, including general economic conditions and applicable governmental
regulations and policies.
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The Registrant's Bylaws provide in Article III, Sections 16
and 17, certain requirements for nominations of directors by shareholders and
shareholder proposals, respectively. The Bylaws are included herewith as Exhibit
3.2 and cross-referenced herein related to the specific requirements for such
submissions by shareholders. The requirements of these sections must be followed
with particularity, and failure to do so may have an effect of delaying,
deferring or preventing a change in control of the Registrant.
Item 5. Financial Statements and Exhibits
(A) Financial Statements:
(1) Annual Report of Planters Bank & Trust Company of Virginia on
Form F-2 for the year ended December 31, 1995.
(2) Annual Report to Shareholders of Planters Bank & Trust of
Virginia for the year ended December 31, 1995
(3) Quarterly Report of Planters Bank & Trust Company of Virginia
on Form F-4 for the quarter ended March 31, 1996.
(4) Quarterly Report of Planters Bank & Trust Company of Virginia
on Form F-4 for the quarter ended June 30, 1996.
(5) Quarterly Report of Planters Bank & Trust Company of Virginia
on Form F-4 for the quarter ended September 30, 1996.
(B) Exhibits:
(1) Agreement and Plan of Reorganization and Plan of Share
Exchange (included as Appendix A to the Proxy
Statement/Prospectus included herewith as Exhibit 99.1).
(3.1) Articles of Incorporation of Virginia Financial Corporation.
(3.2) Bylaws of Virginia Financial Corporation.
(21) Subsidiaries of Virginia Financial Corporation.
(27) Financial Data Schedule.
(99.1) Proxy Statement/Prospectus of Planters Bank & Trust Company of
Virginia related to the Reorganization.
4
<PAGE>
SIGNATURE
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the Registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereto duly authorized.
VIRGINIA FINANCIAL CORPORATION
Date: March 24, 1997 By: /s/ Harry V. Boney, Jr.
-------------------------------
Harry V. Boney, Jr.
President and
Chief Executive Officer
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FINANCIAL STATEMENT 5(A)1
FORM F-2
ANNUAL REPORT
UNDER SECTION 13
OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1995
FDIC CERTIFICATE NUMBER 20786-1
* * *
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
STATE OF VIRGINIA
IRS EMPLOYEE IDENTIFICATION NUMBER 54-0913256
24 SOUTH AUGUSTA STREET
STAUNTON, VIRGINIA 24401
TELEPHONE: (540) 885-1232
SECURITIES REGISTERED PURSUANT TO SECTION
12 (b) OF THE ACT:
TITLE OF EACH CLASS
None
NAME OF EXCHANGE ON WHICH REGISTERED
None
SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT
TITLE OF CLASS
COMMON STOCK, PAR VALUE $10.00
Indicate by check mark if disclosure of delinquent filers pursuant to
item 10 is not contained herein, and will not be contained, to the best of
bank's knowledge, in definitive proxy or information statements incorporated by
reference in part III of this Form F-2 or any amendment of this Form F-2. [ X ]
Indicate by check mark whether the bank (1) has filed all reports
required to be filed by Section 13 of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the bank was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
YES X NO
---- -----
The aggregate market value of the voting stock held by nonaffiliates of
the registrant was $74,000,000 as of February 5, 1996.
The number of shares outstanding of the registrants' stock, which is
Common, was 2,000,000 shares as of February 5, 1996.
DOCUMENTS INCORPORATED BY REFERENCE
1995 Annual Report Part II and Part IV
Proxy Statement Part I and Part III
<PAGE>
PART I
ITEM I. BUSINESS
GENERAL
Planters Bank & Trust Company of Virginia (hereinafter referred to as "the
Bank") was incorporated under the laws of the Commonwealth of Virginia on
October 29, 1971. It opened for business on September 1, 1972, with its main
office located at U.S. Route 250 and State Route 640 in Augusta County,
Virginia. The name Augusta Bank & Trust Company was changed to Planters Bank &
Trust Company of Virginia as part of a merger of Planters Bank & Trust Company,
Staunton, Virginia, a bank organized under the laws of the Commonwealth of
Virginia, into Augusta Bank & Trust Company as of October 1, 1977.
Planters Bank & Trust Company, Staunton, Virginia, (Planters Bank) had been
incorporated under the laws of the Commonwealth of Virginia on September 13,
1911. It opened for business on November 21, 1911, with its main office located
at 24 South Augusta Street, Staunton, Virginia.
Securities of the Bank consist of one class -- Common Stock. There are
2,000,000 shares outstanding held of record by 1,067 stockholders as of December
31, 1995. The Bank is authorized to issue the aggregate number of five million
(5,000,000) shares of Common Stock of the par value of ten dollars ($10.00) per
share.
The Bank's main office is located at 24 South Augusta Street, Staunton,
Virginia. Branch offices are located in Staunton, Virginia, at (1) 2307 West
Beverley Street, (2) 2201 North Augusta Street, and (3) 1135 Richmond Road.
Branches are located in Augusta County at (1) 132 Greenville Road, Stuarts
Draft, (2) U.S. Route 11 in Verona, (3) 1480 Greenville Avenue, Staunton and (4)
the intersection of U. S. Route 250 and State Route 640 in Fishersville. A
branch is located in Waynesboro, Virginia, at the intersection of North Poplar
and Ohio Streets. A branch is located in Rockingham County at 106 Sixth Street,
Grottoes, Virginia. The Bank employs one hundred and fifty-five (155) full-time
employees and nineteen (19) part-time employees.
The Bank's trade area includes approximately 80% of Augusta County,
Virginia, and encompasses the independent cities of Staunton, Waynesboro
and the Grottoes, Virginia area in Rockingham County. The population of
the trade area is estimated to be 105,000.
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During the preceding five years, the Bank increased in total assets and in
the number of customers served. On April 1, 1984, Planters Bank & Trust Company
of Virginia purchased the Verona office of Bank of Virginia located on U.S.
Route 11, Verona, Virginia, and operates this facility as a branch of the Bank.
The Bank, on November 10, 1987, was authorized to establish a branch at 1480
Greenville Avenue, Staunton, Virginia. The Bank opened the branch at this
location May 8, 1989.
The Bank, on April 15, 1994, purchased the Grottoes, Virginia office of
First Union National Bank of Virginia, and operates this facility as a branch of
the Bank.
The Bank, on September 1, 1994, leased office space consisting of 263.556
square feet located at 2262 Bluestone Hills Drive, Harrisonburg, Virginia 22801.
This facility is used for the sole purpose of generating secondary mortgage
market real estate loans.
The Bank, in January 1996, formed Planters Insurance Agency, Inc., a
wholely-owned subsidiary of the Bank and is licensed to sell title insurance.
At the Annual Meeting of Stockholders held April 14, 1987, the stockholders
approved an amendment to the Articles of Incorporation to increase the
authorized shares of stock from 500,000 shares to 2,000,000 shares.
The Board of Directors declared a 100% stock dividend payable in December,
1990 and December, 1993.
At the Annual Meeting of Stockholders held April 12, 1994, the stockholders
approved an amendment to the Articles of Incorporation to increase the
authorized shares of stock from 2,000,000 shares to 5,000,000 shares.
2
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SERVICES
Principal services offered and rendered by the Bank include the following:
Savings Accounts Home Equity
- ------------------
Statement Savings:
Personal
Business
Passbook Savings:
Personal
Business
Individual Retirement Accounts
Certificates of Deposit:
7-31 Days
90 Days
182-Days
1 Year
1 1/2-Years
2 1/2-Years
4 Years
Christmas Clubs
Save-O-Matic
Checking Accounts
- -------------------
Personal
Negotiable Order of Withdrawal
Money Market
Zero Balance Checking
Business
Organizations and Clubs
Estate
Student
Personalized Checks
Quarterly or Monthly
Statements
Loans
- ------
Personal
Home Improvement
Automobile or Trailer
Business
Student
Mortgage
Agriculture
Vacation
Visa and MasterCard Accounts
3
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Customer Service Department
- ----------------------------
Stop Payments
Statements on Demand
Photocopies of Checks and Records
Assistance in Balancing Checkbooks
Computation of Interest
International Banking
- ----------------------
Letters of Credit
Foreign Collection
Bank Transfer Wire Service
Foreign Currency Available
Trust Department
- -----------------
Executor or Administrator of Estates
Testamentary Trustee
Inter Vivos Trustee
Guardian
Agent Under Agreement
Escrow Agreement
Power of Attorney
Trustee Under Employee Benefit
Agreements
Additional Services
- -------------------
Bank Transfer Wire Service
Bank by Mail
Drive-in Banking, all locations
Night Depositories
Bank Money Orders
Travelers Checks
Safe Deposit Boxes
Bank Drafts
Cashier's Checks
Savings Bonds
Utility Bill Payments
Applications for Visa and MasterCard
Notary Public
Certified Checks
Federal Tax Deposits
Electronic Direct Deposit and Payment of
Funds
Automatic Transfers of Funds Between
Accounts
Retail Repurchase Agreements
Automated Teller Machines
4
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In rendering these services, the Bank serves general retail businesses in the
cities of Staunton and Waynesboro, Augusta County and in Grottoes, Virginia.
Lumbering operations, paving facilities and quarrying concerns are
serviced as well as dairy and beef cattle operations and some sheep operations.
Also served are various manufacturing concerns employing from 10 to 2,000
persons.
COMPETITION
NationsBank, First Virginia Bank-Shenandoah Valley, Jefferson National Bank,
First Union National Bank of Virginia, Crestar Bank, Patrick Henry National
Bank, F&M Bank, Massanutten and Bank of Rockbridge maintain 27 offices within
the trade area of the Bank. These banks offer full banking services with the
exception of the Bank of Rockbridge and Patrick Henry National Bank which do not
offer trust services.
One savings bank has three offices within the Bank's trade area. It is
highly competitive with commercial banks in their quest for deposits and loans,
individual retirement accounts and time accounts.In the area of real estate
loans it is also a formidable competitor.
Other institutions compete effectively and aggressively for various types of
business within the Bank's trade area. The several credit unions in the Bank's
trade area aggressively offer commercial bank products. Automobile sales finance
companies compete for automobile financing and dealership floor plans. Sales
finance companies finance small appliances and furniture and personal loan
companies compete effectively. Direct lending by governmental agencies is done
primarily through Staunton Farm Credit, A.C.A. which maintains an office outside
the Staunton city limits. Farmers Home Administration operates within the Bank's
trade area also. Deposits and loans from medium-sized and larger business
organizations are successfully solicited by financial institutions located
outside the Bank's service area. There is also competition from the numerous
insurance companies represented in the area. In offering trust services there is
competition with attorneys as well as other banks.
No material part of the business of the Bank is dependent upon a single or
a few customers and the loss of one or more customers would not have a
materially adverse effect upon the business of the
5
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Bank. Management is not aware of any indications that the business of the Bank
or material portion thereof is, or may be, seasonal.
ITEM 2. PROPERTIES
The Bank owns ten (10) parcels of property. Nine (9) of these properties are
land and buildings used by the Bank in its operation and one (1) property is
held for future bank use. The properties are more fully described as follows:
1. The Bank owns the land and building at its main office located
at 24 South Augusta Street, Staunton, Virginia. The land with
buildings was purchased from various owners at various dates. The
Bank has completed an expansion and renovation program at this
location whereby 18 on-site parking spaces were provided, along
with entry and exit from Augusta Street, entry from Johnson Street
and exit onto Central Avenue. Also provided are appropriate entry
lanes for three drive-up windows. The renovated building has a
basement area of 6,415 sq. ft., a commercial and trust banking area
of 11,827 sq. ft., and a second floor was developed into a customer
service area and offices. The Bank purchased a piece of property,
December 1985, located at the corner of Central Avenue and Johnson
Streets. This parcel joins property presently owned by the Bank. The
building, which was gutted by fire, was torn down and the lot is
presently leased to the City of Staunton. The Bank purchased a piece
of property, May 12, 1989, located at 11 West Johnson Street.
During 1993, the building was removed and a new building was
incorporated into the present Bank building. This addition consisting
of three floors contain 3,476 square feet. This building and location
are considered ample to accommodate the Bank's needs for the immediate
future.
2. The Bank owns a 1-3/4 acre parcel of property at 1135 Richmond Road,
Staunton, Virginia. This property fronts 158 feet on U. S. Route 250.
The land was purchased in March 1964, and in March 1966, a 1,650 sq.
ft. one story brick bank building was completed. During 1987, the
drive-up facilities were expanded and the entrance was rerouted for
drive-in traffic. A portion of land on the northeast side consisting of
0.165 acres was sold in December 1981. The topography of this small
parcel was such as it would have been of no value for future
6
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expansion. This building and location are considered ample to
accommodate the Bank's needs for the immediate future.
3. The Bank owns a parcel of land in Staunton, Virginia, with 175 feet
of frontage on West Beverley Street known as 2307 West Beverley.
This parcel contains approximately 42,800 sq. ft. and was
purchased in 1966, and in 1968 a 2,112 sq. ft. one-story brick bank
building with full basement was constructed. The Bank purchased an
adjoining piece of property known as 2301 West Beverley Street on
June 25, 1987, which contains 0.914 acres and a one story brick
and block building containing approximately 1,200 sq. ft. at a cost
of $115,000. A portion of this property is used for a new and
expanded drive-in entrance which was completed at the end of 1987.
The building on the remaining portion of this property is rented on
a 5 year lease. The present branch site with the adjoining property
is considered ample to accommodate the Bank's needs for the immediate
future.
4. The Bank owns a parcel of property at 250 North Poplar Avenue,
Waynesboro, Virginia. This property fronts 202 feet on North Poplar
Avenue and 200 feet on Ohio Street. The land was purchased October
1977, and in November 1978 a one-story brick bank building consisting
of 3,832 sq. ft. was occupied. This building and location are
considered ample to accommodate the Bank's needs for the foreseeable
future.
5. In Augusta County, the Bank owns a parcel of land at the northeast
corner of the intersection of U. S. Route 250 and Virginia State Route
640 approximately 1.4 miles west of Waynesboro city limits. This
location consists of 3.47 acres of land, improved with a single-story
3,825 sq. ft. building designed for commercial banking functions with
ample ingress, egress and parking. The land was purchased July 18,
1972, and the building completed in December 1973. This building and
location are considered ample to accommodate the Bank's needs for the
foreseeable future.
6. The Bank purchased a parcel of land fronting on State Route 340,
Stuarts Draft, Virginia, in December 1981. This parcel of land
is 225 feet by 225 feet. A used preconstructed building
containing 1,440 sq. ft. was placed on the land in April 1982. The
construction of a new building consisting of 3,130 sq. ft. on the
ground floor and a basement consisting of 1,080 sq.
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ft. was completed in August of 1988 at a cost of approximately
$350,000. This building and location are considered ample to
accommodate the Bank's needs for the immediate future.
7. The Bank purchased a piece of property located on the west side
of U.S. Route 11 in Verona, Virginia, from the Bank of Virginia on
April 1, 1984. It contains 36,024 sq. ft. or 0.827 acres of land and
has 120 feet frontage on Route 11. Located on the property is a
two-story brick building containing 2,416 sq. ft. on the first floor
and 1,794 sq. ft. on the second floor. Due to the widening of U.S.
Route 11, it was necessary to relocate the drive-up windows and the
automated teller machine. An addition was added to the rear of the
building consisting of 441 square ft. for the drive-up facility. This
facility now has three drive-up lanes. This addition was completed in
August 1991 at a cost of $135,000.
8. The Bank purchased a parcel of land October 20, 1987, at 1480
Greenville Avenue in Augusta County, just south of the city of
Staunton at a cost of $259,337. The construction of a new
building consisting of 3,130 sq. ft. on the ground floor and a
basement consisting of 1,080 sq. ft. was completed and opened May 8,
1989 at a cost of approximately $400,000. This property contains
1.269 acres with a 200 foot road frontage on Greenville Avenue.
9. The Bank purchased a piece of property located at 106 Sixth Street,
Grottoes, Virginia from First Union National Bank of Virginia on April
15, 1994. It contains 52,000 square feet of land with twenty parking
spaces with ample ingress and egress from Sixth Street and from Seventh
Street as the property extends through the block. Located on the
property is a two-story brick building containing 6,000 square feet.
This facility has one drive-up lane. This building and location are
considered ample to accomodate the Bank's needs for the foreseeable
future.
10. The Bank owns a piece of property consisting of land and a two-story
building fronting 23 feet on Johnson Street, Staunton, Virginia. This
property is presently under lease and is held for future expansion.
LEASED PROPERTIES
8
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The Bank leases its Northside banking facility located in the Terry Court
Shopping Center on North Augusta Street, Staunton, Virginia. In 1986, the Bank
renegotiated its lease with Highway Properties, Inc. to expand the banking
facilities. The facilities at this location now consist of banking quarters of
approximately 1,800 sq. ft. and a two-window drive-up facility with ingress,
egress and right-of-way to and from these premises. The renegotiated lease was
for an initial term of five years, expiring April 30, 1991 with three 5-year
options to renew the lease. The Bank exercised the first option April 30, 1991,
to renew the lease for an additional five year period expiring April 30, 1996.
The base monthly rental for the first year is $1,425 per month with an increase
of 2 1/2% of the monthly rent each year for the remaining four years. Lease
expense for 1995 was $19,070. The Terry Court Shopping Center was sold, subject
to the lease, to W. J. Perry Corporation, trading as Terry Court Properties, and
subsequently sold to W. Thomas Eavers doing business as Terry Court Properties.
ITEM 3. LEGAL PROCEEDINGS
The Bank is party to various legal proceedings originating from the ordinary
course of business. Management and counsel are of the opinion that settlement of
these items should not have a material effect on the financial position of the
Bank.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
See proxy statement form F-5 items titled "Principal Shareholders and Stock
Beneficially Owned by Directors and Officers as a Group".
PART II
ITEM 5. MARKET FOR THE BANK'S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS
See Annual Report, "Comments by Management," page 3, for market and dividend
information. Management knows of no restrictions on the Bank's ability to pay
future dividends and management expects to continue to pay quarterly dividends
in the future.
The number of holders of the Bank's Common Stock (the only class of equity
security of the Bank) of record was 1,067 as of the end of the Bank's fiscal
year, December 31, 1995.
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ITEM 6. SELECTED FINANCIAL DATA
See Annual Report, page 1, item titled "Selected Financial Data" and Table 1
of Item 7 of "Management's Discussion and Analysis of Financial Condition and
Results of Operations".
10
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ITEM. 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Earnings Performance:
Net income for 1995 was $5,034,607 compared to $4,753,161 in 1994 for an
increase of 5.92 percent. On a per share basis 1995 earnings were $2.52 per
share. Net income for 1994 was $4,753,161 compared to net income of $4,637,428
in 1993 for an increase of 2.50 percent. On a per share basis 1994 earnings were
$2.38. All income generated is from commercial banking and trust activities.
TABLE 1 SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994 1993 1992 1991
-------- -------- -------- -------- ------
<S> <C>
For the Year
(In thousands, except per share data)
Interest Income $ 26,073 $ 22,902 $ 21,436 $ 21,310 $ 22,166
Interest Expense 12,343 9,748 9,209 10,547 12,605
Net Interest Income 13,730 13,154 12,227 10,763 9,561
Provision for Loan Losses 309 421 217 168 303
Non-Interest Income 2,127 2,207 2,235 2,170 1,817
Non-Interest Expense 8,235 8,082 7,511 7,251 6,792
Applicable Income Taxes 2,278 2,105 2,097 1,685 1,338
Net Income 5,035 4,753 4,637 3,829 2,946
Per Common Share:
Net Income* 2.52 2.38 2.32 1.91 1.47
Cash Dividends Paid* 0.83 0.71 0.60 0.54 0.49
Book Value* 17.08 15.02 13.67 11.95 10.58
Average Balances
(In thousands)
Assets $347,661 $332,397 $303,842 $271,896 $242,826
Earning Assets 330,534 315,005 287,389 256,992 228,743
Loans 204,564 181,684 169,688 162,135 159,255
Investment Securities 124,104 132,181 114,548 90,128 63,610
Deposits 306,100 296,369 274,848 245,823 217,831
Stockholders' Equity 32,524 29,159 25,718 22,521 20,222
End of Period Balance Sheet
(In thousands)
Assets $356,068 $344,473 $308,243 $297,189 $250,637
Earning Assets 337,612 325,961 293,347 281,094 234,520
Loans 212,327 196,579 171,068 167,325 158,983
Investment Securities 125,398 129,332 122,229 113,750 73,577
Deposits 319,578 297,006 279,290 269,355 226,683
Stockholders' Equity 34,154 30,046 27,335 23,898 21,149
Ratios
Return on Average Assets 1.45% 1.43% 1.53% 1.41% 1.21%
Return on Average Equity 15.48 16.30 18.03 17.00 14.57
Common Dividends to
Earnings Per Common Share* 32.97 29.87 25.88 28.20 33.22
Average Earning Assets
to Average Total Assets 95.07 94.77 94.59 94.52 94.20
Average Stockholders' Equity
to Average:
Assets 9.36 8.77 8.46 8.28 8.33
Loans 15.90 16.05 15.16 13.89 12.70
Deposits 10.63 9.84 9.36 9.16 9.28
Net Charge-Offs to Average Loans .02 .06 .08 .08 .13
Loan Loss Reserve to Period-End Loans 1.31 1.28 1.30 1.28 1.32
</TABLE>
*Adjusted for 100 percent stock dividend, December 1993.
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TABLE 2 COMPARATIVE OPERATING DATA
Fully Taxable-Equivalent Basis
(Dollars in thousands)
<TABLE>
<CAPTION>
Increase(Decrease)
Years Ended December 31, Years 1995 Over 1994 Years 1994 Over 1993
------------------------------- -------------------- ---------------------
1995 1994 1993 Amount Percent Amount Percent
-------- ------- ------- ------ ------- ------ -------
<S> <C>
Interest Income:
Loans $19,138 $15,513 $14,588 $ 3,625 23.37 $ 925 6.34
Investment Securities 7,203 7,716 7,102 (513) 6.65 614 8.65
Federal Funds Sold 107 41 99 66 160.98 (58) 58.59
-------- ------- -------- ------- ------ ------ -----
Total Interest Income 26,448 23,270 21,789 3,178 13.66 1,481 6.80
Interest Expense:
Deposits 11,901 9,499 9,169 2,402 25.29 330 3.60
Federal Funds Sold and
Securities Sold Under
Agreements to Repurchase 442 248 40 194 78.23 208 520.00
-------- ------- ------- ------- ------ ------- ------
Total Interest Expense 12,343 9,747 9,209 2,596 26.63 538 5.84
------- ------- ------- ------- ------ ------- ------
Net Interest Income 14,105 13,523 12,580 582 4.30 943 7.50
Provision for Loan Losses 309 421 217 (112) 26.60 204 94.01
-------- -------- -------- ------- ------ ------- -------
Net Interest Income After
Provision for Loan Losses 13,796 13,102 12,363 694 5.30 739 5.98
------- ------- ------- ------- ------ ------- -------
Non-Interest Income Excluding
Security Gains or (Losses) 2,125 2,206 2,192 (81) 3.67 14 0.64
Securities Gains or (Losses) 1 1 44 0 0.00 (43) 97.73
-------- ------- -------- -------- ------ ------ -------
Total Non-Interest Income 2,126 2,207 2,236 (81) 3.67 (29) 1.30
------- ------- ------- ------ ------ ------- --------
Non-Interest Expense 8,235 8,083 7,512 152 1.88 571 7.60
------- ------- ------- ------- ------ -------- --------
Income Before Income Taxes 7,687 7,226 7,087 461 6.38 139 1.96
Applicable Income Taxes 2,278 2,105 2,097 173 8.22 8 0.38
Tax Equivalent Adjustment:
Loans 19 11 50 8 72.73 (39) 78.00
Investment Securities 355 357 303 (2) 0.56 54 17.82
------- -------- -------- ------ ------ -------- -------
Net Income $ 5,035 $ 4,753 $ 4,637 $ 282 5.93 $ 116 2.50
======= ======= ======= ======= ===== ======== =====
</TABLE>
Interest Income:
Interest income in 1995 increased $3,178,000 compared to 1994
for an increase of 13.66%. This increase was due to average earning
assets increasing by $15,529,000 and the tax-equivalent yield
increasing from 7.39% in 1994 to 8.00% in 1995.
Interest income in 1994 increased $1,481,000 compared to 1993
due to an increase in average earning assets as the tax-equivalent
yield on average earning assets decreased to 7.39% during 1994.
Interest income in 1993 increased $151,000 compared to 1992 due to
a larger amount of interest earning assets than in 1992.
Interest Expense:
Interest expense during 1995 increased $2,596,000 compared to
1994. This represents an increase of 26.63% . This increase was due
to interest bearing liabilities increasing by $10,058,000 and the
average rate paid during 1995 increasing to 4.51% compared to 3.70%
in 1994.
Interest expense increased $538,000 in 1994 compared to 1993
due to increased interest bearing liabilities in 1994 compared to
1993. Lower interest rates during 1993 and 1992 had a greater
impact on interest expense than it had on interest income. Interest
expense decreased about $1,338,000 or 12.69% in 1993 compared to
1992. The average cost of interest bearing liabilities decreased to
3.70% in 1994 compared to 3.77% in 1993.
12
<PAGE>
Net interest income and the net interest margin along with the
average yield of the individual categories for the years 1993
through 1995 is shown on Table 3A. Table 3B summarizes the effect
on net interest income of changes in interest rates earned and paid
as well as changes in volume.
The presentation appears on a fully tax-equivalent basis to
adjust for the tax exempt status of income earned on certain loans
and investment securities using statutory rates of 34% in 1995,
1994 and 1993.
TABLE 3A NET INTEREST INCOME ANALYSIS
Fully Taxable-Equivalent Basis
(Average balance in thousands)
<TABLE>
<CAPTION>
Average Balance Average Yields/Rates
1995 1994 1993 1995 1994 1993
------ ------ ------ ------ ------ -----
<S> <C>
Earning Assets
Loans Net of Unearned Income
Commercial $ 62,069 $ 57,130 $ 52,143 9.67% 8.39% 8.03%
Real Estate 109,754 100,829 99,182 9.13 8.41 8.45
Consumer 31,831 23,218 16,646 9.61 9.53 11.25
Tax Exempt 910 507 1,717 6.21 6.78 8.63
-------- -------- --------
Total Loans 204,564 181,684 169,688 9.36 8.54 8.60
Investment Securities
United States Treasury 13,150 15,334 16,394 5.73 5.89 6.24
Federal Agencies 94,295 99,316 84,124 5.59 5.60 5.88
State and Political
Subdivisions 16,108 16,452 12,004 7.06 7.12 8.08
Other 551 1,079 2,026 6.88 7.64 7.88
-------- -------- --------
Total Investment
Securities 124,104 132,181 114,548 5.73 5.84 6.20
Federal Funds Sold 1,866 1,090 3,118 5.72 3.79 3.18
Other Assets 0 50 35 0.00 0.00 0.00
-------- -------- --------
Total Earning Assets
$330,534 $315,005 $287,389 8.00% 7.39% 7.58%
======== ======== ========
Interest-Bearing Liabilities
Interest-Bearing Deposits
Interest Checking $106,571 $142,994 $141,684 3.71% 3.46% 3.50%
Regular Savings 38,698 41,281 33,210 3.47 3.49 3.61
13
<PAGE>
Certificates of Deposit 103,356 66,647 62,186 5.43 4.20 4.50
Certificates of Deposit
$100,000 or More 17,842 7,246 5,072 5.58 4.27 4.21
-------- -------- --------
Total Interest Bearing
Deposits 266,467 258,168 242,152 4.47 3.68 3.79
Federal Funds Purchased and
Securities Sold Under
Agreements to Repurchase 7,341 5,582 2,070 6.02 4.44 1.95
-------- -------- --------
Total Interest-Bearing
Liabilities $273,808 $263,750 $244,222 4.51% 3.70% 3.77%
======== ======== ========
Net Interest Margin/Income 4.27% 4.29% 4.38%
</TABLE>
TABLE 3B NET INTEREST INCOME ANALYSIS
Fully Taxable-Equivalent Basis
(Income and Expense in thousands)
<TABLE>
<CAPTION>
From 1995 to 1994 From 1994 to 1993
Increase (Decrease) Increase (Decrease)
Income/Expense Due to Changes In: Due to Changes In:
1995 1994 1993 Volume Rate Net Volume Rate Net
------ ------ ------ ------ ---- --- ------ ---- ---
<S> <C>
Earning Assets
Loans Net of Unearned Income
Commercial $ 6,004 $ 4,791 $ 4,185 $ 478 $ 735 $ 1,213 $ 418 $ 188 $ 606
Real Estate 10,018 8,476 8,382 814 728 1,542 139 (45) 94
Consumer 3,059 2,212 1,873 828 19 847 626 (287) 339
Tax Exempt 57 34 148 25 (2) 23 (82) (32) (114)
Total Loans 19,138 15,513 14,588 2,141 1,484 3,625 1,024 (99) 925
Investment Securities
United States Treasury 754 903 1,022 (125) (24) (149) (62) (57) (119)
Federal Agencies 5,274 5,559 4,950 (281) (4) (285) 850 (241) 609
State and Political
Subdivisions 1,137 1,171 970 (24) (10) (34) 317 (116) 201
Other 38 83 160 (37) (8) (45) (72) (5) (77)
14
<PAGE>
Total Investment
Securities 7,203 7,716 7,102 (469) (44) (513) 1,029 (415) 614
Federal Funds Sold 107 41 99 45 21 66 (77) 19 (58)
Total Earning Assets $26,448 $23,270 $21,789 $ 1,242 $ 1,936 $ 3,178 $ 2,040 $ (559) $ 1,481
Interest-Bearing Liabilities
Interest-Bearing Deposits
Interest Checking $ 3,949 $ 4,955 $ 4,963 $(1,350) $ 344 $(1,006) $ 45 $ (53) $ (8)
Regular Savings 1,344 1,439 1,197 (89) (6) (95) 281 (39) 242
Certificates of Deposit 5,613 2,796 2,795 1,994 823 2,817 187 (186) 1
Certificates of Deposit
$100,000 or More 995 309 214 591 95 686 93 2 95
Total Interest Bearing
Deposits $11,901 $ 9,499 $ 9,169 $ 371 $ 2,031 $ 2,402 $ 589 $ (259) $ 330
Federal Funds Purchased and
Securities Sold Under
Agreements to Repurchase $ 442 $ 248 $ 40 $ 106 $ 88 $ 194 $ 156 $ 52 $ 208
Total Interest-Bearing
Liabilities $12,343 $ 9,747 $ 9,209 $ 454 $ 2,142 $ 2,596 $ 721 $ (183) $ 538
</TABLE>
15
<PAGE>
Allowance for Loan Losses:
The allowance for loan losses is an estimate of an amount, by management,
to provide for potential losses in the loan portfolio.
Various factors including charge-off experience, change in the mix and
volume of loans, the level of underperforming loans, the ratio of outstanding
loan balances to total loans and the perceived economic conditions in the Bank's
trade area are taken into consideration in determining the amount of the
provision for loan losses and the total amount of the loan loss reserve.
The allowance for loan losses was 1.31% of outstanding loans as of
December 31, 1995 compared to 1.28% December 31, 1994 and 1.30% December 31,
1993. Net charge-offs were $47,517 in 1995, $113,753 in 1994 and $143,229 in
1993. The percentage of net charge-offs to year-end loans was 0.02% for 1995,
0.06% for 1994 and 0.08% for 1993. The balance of the loan loss reserve was
$2,785,792 as of December 31, 1995, $2,524,309 as of December 31, 1994 and
$2,217,175 as of December 31, 1993.
TABLE 4 SUMMARY OF ALLOWANCE FOR LOAN LOSSES
AND SELECTED LOAN LOSS STATISTICS
<TABLE>
<CAPTION>
Years Ended December 31,
(Dollars in thousands) 1995 1994 1993 1992 1991
-------- ------- -------- -------- ------
<S> <C>
Allowance for Loan Losses at
Beginning of Year $ 2,524 $ 2,217 $ 2,143 $ 2,103 $ 2,003
Provision for Loan Losses 309 421 217 168 303
-------- -------- -------- -------- --------
Subtotal 2,833 2,638 2,360 2,271 2,306
-------- -------- -------- -------- --------
Loans Charged Off:
Commercial 22 61 112 132 133
Real Estate 2 0 31 9 14
Consumer 119 78 24 60 113
-------- -------- -------- -------- --------
Total Charge-Offs 143 139 167 201 260
-------- -------- -------- -------- --------
Recoveries of Loans Previously
Charged Off:
Commercial 73 6 9 42 35
Real Estate 0 0 0 3 0
Consumer 22 19 15 28 22
-------- -------- -------- -------- --------
Total Recoveries 95 25 24 73 57
-------- -------- -------- -------- --------
Net Loans Charged Off 48 114 143 128 203
-------- -------- -------- -------- --------
Allowance for Loan Losses at
Year-End $ 2,786 $ 2,524 $ 2,217 $ 2,143 $ 2,103
======== ======== ======== ======== ========
Loans Net of Unearned Income:
Outstanding at Year-End $212,327 $196,579 $171,068 $167,325 $158,983
Average 204,564 181,684 169,688 162,135 159,255
Ratios:
Allowance to Year-End Loans 1.31% 1.28% 1.30% 1.28% 1.32%
Recoveries to Charge-Offs 66.43 17.99 14.37 36.32 21.92
Net Charge-Offs to Average Loans 0.02 0.06 0.08 0.08 0.13
</TABLE>
14
<PAGE>
TABLE 5 ALLOCATION OF ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
(Dollars in thousands)
December 31,
% of % of % of % of % of
1995 Total 1994 Total 1993 Total 1992 Total 1991 Total
----- ----- ---- ----- ---- ----- ---- ----- ---- -----
<S> <C>
Loans Net of Unearned
Income:
Commercial $ 62,069 30.34% $ 60,675 30.86% $ 53,805 31.45% $ 51,864 31.00% $ 50,329 31.66%
Real Estate 109,754 53.65 107,206 54.54 100,041 58.48 96,440 57.64 90,407 56.86
Consumer 31,831 15.56 27,654 14.07 16,766 9.80 16,871 10.08 17,897 11.26
Tax Exempt 910 0.45 1,044 0.53 456 0.27 2,150 1.28 350 0.22
-------- ---- -------- ----- -------- ------- -------- -------- -------- -------
Total Loans $204,564 100.00% $196,579 100.00% $171,068 100.00% $167,325 100.00% $158,983 100.00%
======== ======= ======== ======= ======== ======= ======== ======= ======== =======
Allocation of Allowance
for Loan Losses:
Commercial $ 993 35.64 $ 1,010 40.02% $ 650 29.32% $ 733 34.20% $ 760 36.14%
Real Estate 725 26.02 600 23.77 766 34.55 572 26.70 565 26.87
Consumer 524 18.81 394 15.61 230 10.37 263 12.27 282 13.41
General Risk 544 19.53 520 20.60 571 25.76 575 26.83 496 23.58
-------- ----- -------- ------ -------- ------- -------- ------- -------- -------
Total Allowance $ 2,786 100.00% $ 2,524 100.00% $ 2,217 100.00% $ 2,143 100.00% $ 2,103 100.00%
======== ======= ======== ======= ======== ======= ======== ======= ======== =======
</TABLE>
15
<PAGE>
TABLE 6 NONPERFORMING ASSETS AND LOANS
CONTRACTUALLY PAST DUE
(Dollars in thousands)
<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C>
Nonperforming Assets:
Other Real Estate $ 0 $ 0 $ 44 $ 0 $ 44
Nonperforming Loans:
Loans Past Due as to
Principal or Interest
for 60 Days or More 685 618 164 271 183
Loans on Which Accrual of
Interest Has Been
Discontinued 140 219 170 112 211
---- ---- ---- ---- ----
Total Nonperforming Assets $825 $837 $378 $383 $438
==== ==== ==== ==== ====
Nonperforming Assets to:
Total Assets 0.23% 0.24% 0.12% 0.14% 0.18%
</TABLE>
Non-Interest Income:
Non-interest income decreased by $81,149 or 3.68% during 1995
compared to 1994. Trust department income decreased $119,440 or
12.69% during 1995 compared to 1994. This decrease was due to the
number of estates being closed and declining interest rates. As
interest rates decline the Trust department income is impacted due
to a segment of the income earned being based on income collected
in the individual accounts. Service charges on deposit accounts and
other non-interest income both experienced a modest increase due to
the volume of business.
Non-interest income during 1994 compared to 1993 increased
$13,937 or 0.64%. Trust department income increased by $150,768 or
19.08% compared to 1993 primarily due to estate settlement fees.
Service charges on deposit accounts increased by $36,486 or 6.49%
due to an increase in account numbers. Other non-interest income
decreased by $173,317 or 20.64% due primarily to decreased
fixed-rate real estate mortgage origination fees generated by the
secondary mortgage department. Non-interest income during 1993
compared to 1992 increased $24,957 or 1.15%. Trust department
income decreased by $44,443 or 5.32% due to declining interest
rates. Service charges on deposit accounts also decreased by
$16,573 or 2.86%. These decreases were off-set by an increase in
fixed-rate real estate mortgage origination fees of $88,771 or
22.10%.
TABLE 7 NON-INTEREST INCOME
(Dollars in thousands)
<TABLE>
<CAPTION>
Increase (Decrease)
Years Ended December 31 Yr 1995 Over 1994 Yr 1994 Over 1993
1995 1994 1993 Amount Percent Amount Percent
---- ---- ---- ------ ------- ------ -------
<S> <C>
Trust Income $ 822 $ 941 $ 790 $(119) 12.65% $ 151 19.11%
Service Charges on Deposit
Accounts 621 598 562 23 3.85 36 6.41
Other Service Charges:
Commissions and Fees 612 575 816 37 6.43 (241) 29.53
Other Operating Income 71 91 24 (20) 21.98 67 279.17
Security Gains (Losses) 1 1 44 0 0.00 (43) 97.73
------ ------ ------ ----- -----
Total Non-Interest Income $2,127 $2,206 $2,236 $ (79) 3.58% $ (30) 1.34%
====== ====== ====== ===== =====
</TABLE>
16
<PAGE>
Non-Interest Expense:
Non-interest expense increased $151,787 or 1.88% during 1995 compared to
1994. Salaries and employee benefits increased $319,377 or 7.29%. This
increase was due to increases in individual salaries, an increase in
personnel and increases in the cost of employee benefits. An educational
department was created during 1995 increasing educational expenses about
$32,000. Other operating expenses continue to increase due to increased
prices and increases in the total volume of business. Federal deposit
insurance expense decreased comparing 1995 to 1994 by about $300,000 due to
premium decreases.
Non-interest expense increased $571,542 or 7.61% during 1994 compared to
1993. Salaries and employee benefits increased by $213,470 or 5.13%. This
increase was due to increases in individual salaries and the addition of the
staff at the Grottoes branch which was purchased in April of 1994. Premise
and fixed asset expense increased $77,214 or 9.23% due to the purchase of
the Grottoes office and the installation expense of a network system linking
all branches to the main office for data input purposes. An additional
$62,000 was expensed in 1994 for Capital Stock Taxes due to an adjustment
for the years 1992 through 1994. For 1993, non-interest expense increased
$260,684 or 3.60% compared to 1992. This increase was primarily due to
$161,975 or 4.05% increase in salaries and employee benefits, and $33,901 or
4.22% increase in net occupancy expense. Other operating expenses increased
by $64,809 or 2.65% for 1993.
TABLE 8 NON-INTEREST EXPENSE
(Dollars in thousands)
<TABLE>
<CAPTION>
Increase (Decrease)
Yr 1995 Over 1994 Yr 1994 Over 1993
1995 1994 1993 Amount Percent Amount Percent
---- ---- ---- ------ ------- ------ -------
<S> <C>
Salaries and Employee
Benefits $4,698 $ 4,378 $ 4,165 $ 320 7.31% $ 213 5.11%
Net Occupancy Expense 434 430 338 4 0.93 92 27.22
Furniture and Fixture Expense 490 483 499 7 1.45 (16) 3.21
Advertising 159 153 123 6 3.92 30 24.39
Data Processing Expense 528 502 473 26 5.18 29 6.13
Deposit Insurance 347 647 601 (300) 46.37 46 7.65
Postage 229 203 189 26 12.81 14 7.41
Stationery and Supplies 238 205 186 33 16.10 19 10.22
Capital Stock Tax 216 217 143 (1) 0.46 74 51.75
Amortization of Intangible Assets 24 18 3 6 33.33 15 500.00
Other 871 847 790 24 2.83 57 7.22
Loss on Sale of Assets 1 0 1 1 100.00 (1) 100.00
------ ------- -------- ----- ------ ---- ------
Total Non-Interest Expense $8,235 $ 8,083 $ 7,511 $ 152 1.88% $ 572 7.62%
------ ------- -------- ----- -----
</TABLE>
TABLE 9 SALARY AND EMPLOYEE BENEFIT EXPENSE
(Dollars in thousands except per employee data)
<TABLE>
<CAPTION>
Increase (Decrease)
Yr 1995 Over 1994 Yr 1994 Over 1993
1995 1994 1993 Amount Percent Amount Percent
------- ------- ------- ------ ------- ------ -------
<S> <C>
Regular Salaries $ 3,417 $ 3,132 $ 2,939 $ 285 9.10% $ 193 6.57%
Incentive Compensation 339 324 314 15 4.63 10 3.18
------- ------- -------- ------ ------
Total Salaries 3,756 3,456 3,253 300 8.68 203 6.24
Employee Benefits 943 927 920 16 1.73 7 .76
------- ------- -------- ------ ------
Total Salaries and Benefits $ 4,699 $ 4,383 $ 4,173 $ 316 7.21% $ 210 5.03%
Cost Allocated to Mortgage
Activity (1) (5) (8) 4 80.00 3 37.50
------- ------- ------- ------ ------
Net Salaries and Benefits $4,698 $ 4,378 $ 4,165 $ 320 7.31% $ 213 5.11%
Average Annual Compensation
Per Employee $29,369 $28,647 $28,388 $ 722 2.52 $ 259 .91%
======= ======= =======
Number Full-Time Equivalent
Employees:
Year End 164 157 147 7 4.46 10 6.80
Average 160 153 147 7 4.58 6 4.08
</TABLE>
17
<PAGE>
Liquidity and Interest Sensitivity:
Liquidity is the ability to satisfy demands for withdrawal of deposits,
lending obligations and other corporate needs. Liquidity is provided from
sources such as readily marketable investments, principal and interest payments
on loans and through increases in deposits and borrowed funds. Planters' deposit
base has become more rate sensitive since deregulation; however, there remains a
strong base of core deposits. The investment portfolio of which 97.8% matures
within five years and the opportunity to purchase Federal Funds provides the
basic source of liquidity along with the principal and interest payments on the
loan portfolio. In the management of interest rate risk all loans except
consumer and mortgage are made on a demand basis, providing the opportunity to
reprice the interest. Mortgage loans are made with the opportunity to reprice
the interest on a one or three year basis. The Bank strives to maintain a
relationship between rate sensitive assets and rate sensitive liabilities which
will maximize profits under foreseeable or projected economic and competitive
conditions. Additional data regarding liquidity and interest sensitivity is
presented in Tables 10 through 14.
TABLE 10 INTEREST-SENSITIVITY ANALYSIS
(Dollars in thousands)
<TABLE>
<CAPTION>
December 31, 1995
Months
------
Over Over Over
One Three Six
Within Through Through Through Over
One Three Six Twelve Twelve Total
<S> <C> --------- --------- --------- -------- ------- ------
Earning Assets:
Loans $ 81,390 $ 13,777 $ 18,760 $33,125 $ 65,540 $212,592
Investment Securities 700 4,999 9,220 18,453 91,807 125,179
Other Assets 0 0 0 0 0 0
--------- -------- -------- ------- -------- --------
Total Earning Assets $ 82,090 $ 18,776 $ 27,980 $51,578 $157,347 $337,771
--------- -------- -------- ------- -------- --------
Interest-Bearing Liabilities:
Interest-Bearing Checking $ 106,271 $ 0 $ 0 $ 0 $ 0 $106,271
Savings 38,129 0 0 0 0 38,129
Large Denomination C/D's 200 1,074 1,500 11,013 5,426 19,213
Other Time Deposits 16,201 10,405 15,105 47,320 23,003 112,034
Federal Funds and
Securities Sold Under
Agreements to Repurchase 1,330 0 0 0 0 1,330
--------- -------- -------- ------- -------- --------
Total Interest-Bearing
Liabilities $ 162,131 $ 11,479 $ 16,605 $58,333 $ 28,429 $276,977
--------- -------- -------- ------- -------- --------
Interest-Sensitivity Gap $ (80,041) $ 7,297 $ 11,375 $(6,755) $128,918 $ 60,794
========== ======== ======== ======== ======== ========
</TABLE>
TABLE 11 REMAINING MATURITIES OF CERTIFICATES OF
(In thousands) DEPOSIT, $100,000 OR MORE
December 31, 1995
Three Months or Less $1,274
Over Three Through Six Months 1,500
Over Six Through Twelve Months 11,013
Over Twelve Months 5,426
-------
Total $19,213
=======
18
<PAGE>
TABLE 12
INVESTMENT SECURITIES
MATURITY DISTRIBUTION AND AVERAGE YIELD
<TABLE>
<CAPTION>
December 31, 1995
Weighted
Average Weighted
Book Market Maturity Average
(Dollars in thousands) Value Value In Yrs Mos TE Yield
------ ------ ------------- ---------
<S> <C>
U.S. Treasury Securities:
Within One Year $ 5,499 $ 5,522 0 6.9 5.90%
After One But Within Five Years 8,518 8,566 1 7.1 5.66
After Five But Within Ten Years 0 0 0 0 0
After Ten Years 0 0 0 0 0
-------- --------
Total U.S. Treasury Securities $ 14,017 $ 14,088 1 2.3 5.75%
-------- --------
Federal Agencies:
Within One Year $ 25,848 $ 25,853 0 6.0 5.51%
After One But Within Five Years 68,230 68,286 3 0 5.74
After Five But Within Ten Years 0 0 0 0 0
After Ten Years 0 0 0 0 0
-------- --------
Total Federal Agencies $ 94,078 $ 94,139 2 3.6 5.67%
-------- --------
Obligations of State and Political
Subdivisions:
Within One Year $ 3,272 $ 3,302 0 6.4 8.09%
After One But Within Five Years 10,669 10,698 3 2.2 6.56
After Five But Within Ten Years 2,405 2,415 6 2.8 6.72
After Ten Years 240 261 21 10.0 12.12
-------- --------
Total State and Political
Subdivisions $ 16,586 $ 16,676 3 4.4 6.97%
-------- --------
Other Securities:
Within One Year $ 250 $ 257 0 10.9 8.75%
After One But Within Five Years 250 252 1 6.5 5.95
After Five But Within Ten Years 0 0 0 0 0
After Ten Years 50 50 0 0 0
-------- --------
Total Other Securities $ 550 $ 559 1 2.7 7.35%
-------- --------
Total Securities $125,231 $125,462 2 3.7 5.86%
======== ========
</TABLE>
TABLE 13 RATINGS OF STATE AND POLITICAL
SUBDIVISIONS INVESTMENT SECURITIES
<TABLE>
<CAPTION>
(Dollars in thousands)
December 31, 1995
Moody's and/or S/P Ratings Book Value Percent of Total
-------------------------- ---------- ----------------
<S> <C>
Aaa $ 5,241 31.60%
Aa 3,667 22.11
A, A1, A- 7,189 43.34
Not Rated 489 2.95
------ -----
Total $16,586 100.00%
======= ======
</TABLE>
19
<PAGE>
TABLE 14 MATURITY SCHEDULE OF SELECTED
(Dollars in thousands) LOANS
<TABLE>
<CAPTION>
December 31, 1995
Over One
One Year Through Over
or Less Five Yrs Five Yrs Total
--------- -------- -------- --------
<S><C>
Commercial, Financial
and Agricultural $41,072 $3,505 $24,039 $68,616
Real Estate-
Construction 11,660 0 0 11,660
Tax-Exempt 3 792 0 795
------- ------ ------- -------
Total $52,735 $4,297 $24,039 $81,071
======= ====== ======= =======
Fixed Rates $11,056
Variable Rates 70,015
--------
Total $81,071
=========
</TABLE>
Stockholders' Equity:
Shareholders' equity, during 1995, increased $4,107,185 or 13.67%. This
increase reflects $732,578 unrealized net gain on securities placed in the
available for sale category. During 1994 shareholder equity increased $2,711,051
or 9.92% which reflects $622,110 unrealized net loss on securities placed in the
available for sale category. Shareholder equity increased $3,437,428 or 14.38%
in 1993. These increases represent retention of net income after the payment of
cash dividends. Cash dividends paid increased by 16.90% in 1995, 18.33% in 1994
and 11.11% in 1993. Book value per share at December 31, 1995 was $17.08, at
December 31, 1994 was $15.02 and at December 31, 1993 was $13.67. Table 15
presents selected stockholders' equity data.
TABLE 15 SELECTED STOCKHOLDERS' EQUITY DATA
(Dollars in thousands except per share data)
<TABLE>
<CAPTION>
Year Ended December 31,
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C>
Stockholders' Equity at Year-End $34,154 $30,046 $27,335 $23,898 $21,149
Book Value per Common Share* 17.08 15.02 13.67 11.95 10.58
Capital Growth Rate 13.67% 9.92% 14.38% 13.00% 10.24%
Total Dividends Paid as a
Percent of Net Income 32.97 29.87% 25.88% 28.21% 33.27%
Year-End Stockholders' Equity as
a Percent of Year-End:
Assets 9.59 8.72 8.87 8.04 8.44
Loans 16.09 15.28 15.98 14.28 13.30
Deposits 10.69 10.12 9.79 8.87 9.33
Return on Average Assets 1.45 1.43 1.53 1.41 1.21
Average Equity to Average Assets 9.36 8.77 8.46 8.28 8.33
</TABLE>
* Adjusted for 100 percent stock dividend, December 1993.
20
<PAGE>
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See Item 11 titled "Financial Statements and Exhibits" and Annual
Report, pages 10-27.
ITEM 9. DIRECTORS AND EXECUTIVE OFFICERS OF THE BANK
A. Directors of the Bank See proxy statement form F-5, Item 1, titled
"Candidates for Directors," "Election of Directors," pages 2, 3 and 4.
B.Executive Officers of the Bank The names and ages of all principal
officers of the Bank and of all persons chosen to become principal officers, the
nature of any family relationship between them, their positions and offices with
the Bank and terms of office and any arrangements or understandings between
officers and any other person pursuant to which that person was selected as an
officer is as follows:
Harry V. Boney, Jr., President and Director, Age 62
Mr. Boney was employed by Planters Bank & Trust Company, Staunton,
Virginia, on April 28, 1975, as Executive Vice President. In January 1976,
he became President and has served in that position to the present time.
William P. Heath, Jr., Executive Vice President, Age 51
Mr. Heath was employed by Planters Bank & Trust Company of Virginia
in January 1996 as Executive Vice President and he continues to serve in that
capacity. Mr. Heath had thirty-one years experience in banking, having served
as Executive Vice President and area President in a statewide banking
organization.
Fred D. Bowers, Senior Vice President and Cashier, Age 59
Mr. Bowers was employed as an Assistant Vice President of Planters Bank
& Trust Company, Staunton, Virginia, October 19, 1968, and was elected Cashier
on December 31, 1972, Vice President and Cashier January 1, 1974, Senior Vice
President and Cashier December 4, 1984, and has served in that position to the
present time.
21
<PAGE>
Joseph Shomo, Senior Vice President, Age 61
Mr. Shomo was employed by Planters Bank & Trust Company, Staunton,
Virginia, in July 1957. He was elected Assistant Cashier in 1963 and Vice
President in 1967. Mr. Shomo has been serving as Senior Vice President
since 1974.
Thomas A. Davis, Senior Trust Officer, Age 51
Mr. Davis was employed by Planters Bank & Trust Company of Virginia in
May of 1978 as Senior Trust Officer and head of the Trust Department. He
continues to serve in this capacity.
There is no family relationship among the principal officers of the
Bank. To the knowledge of the management of the Bank, there are no arrangements
or understandings between officers and any other person or persons pursuant to
which any person was selected as an officer of the Bank other than the usual
fiduciary relationship existing between the officers and stockholders and
depositors of the Bank.
ITEM 10. MANAGEMENT REMUNERATION AND TRANSACTIONS
See proxy statement form F-5 item titled "Executive Compensation" page 6
and item titled "Directors' Fees and Attendance" page 7.
22
<PAGE>
ITEM 11. FINANCIAL STATEMENTS AND EXHIBITS
Listed below are all financial statements and exhibits filed as part
of this annual report.
<TABLE>
<CAPTION>
<S> <C>
(a) (1)
PAGE
----
Report of Independent Auditors (See Annual Report, page 28)
Balance Sheets as of December 31, 1995, and
December 31, 1994 (See Annual Report, page 10)
Statements of Income for Years Ended December 31, 1995, December 31,
1994, and December 31, 1993 (See Annual Report, page 11 and 12).
Statements of Changes in Stockholders' Equity for Years Ended
December 31, 1995, December 31, 1994, and
December 31, 1993 (See Annual Report, page 15)
Statements of Cash Flows for Years Ended December 31,
1995, December 31, 1994, and December 31, 1993
(See Annual Report, pages 13 and 14).
Notes to Financial Statements for Years Ended December 31, 1995,
December 31, 1994 and December 31, 1993
(See Annual Report, pages 16-27)
(a) (2)
Schedule I to Balance Sheet as of December 31, 1995,
December 31, 1994, and December 31, 1993 F-1 thru F-3
Schedule II to Balance Sheet as of December 31, 1995,
December 31, 1994, and December 31, 1993 F-4
Schedule III to Balance Sheet as of December 31, 1995,
December 31, 1994, and December 31, 1993 (See Annual Report, page 10
and Notes to Financial Statements, Note 3, page 19)
Schedule IV to Balance Sheet as of December 31, 1995,
December 31, 1994, and December 31, 1993 (See Annual Report, page 10
and Notes to Financial Statements, Note 6, page 21)
Schedule VI to Balance Sheet as of December 31, 1995,
December 31, 1994 and December 31, 1993 F-5
Signatures F-6
</TABLE>
23
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
STAUNTON, VIRGINIA
FINANCIAL SCHEDULES
DECEMBER 31, 1995, 1994 and 1993
* * *
(WITH ACCOUNTANT'S REPORT THEREON)
24
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
SCHEDULE I. U.S. TREASURY SECURITIES, OBLIGATIONS OF
OTHER U.S. GOVERNMENT AGENCIES AND CORPORATIONS,
OBLIGATIONS OF STATES AND POLITICAL SUBDIVISIONS
<TABLE>
<CAPTION>
December 31, 1995 December 31, 1994 December 31, 1993
Book Value Market Value Book Value Market Value Book Value Market Value
---------- ------------ ---------- ------------ ------------ -------------
<S> <C>
U.S. Treasury securities
within one (1) year $ 5,498,612 $ 5,522,113 $ 499,700 $ 500,000 $ 4,519,842 $ 4,582,109
after one (1) but within
five (5) years 8,518,029 8,565,473 12,540,217 12,052,188 11,131,012 11,471,563
after five (5) but within
ten (10) years NONE NONE NONE NONE NONE NONE
after ten (10) years NONE NONE NONE NONE NONE NONE
----------- ----------- -------- -------- -------- --------
Total U.S. Treasury
Securities $14,016,641 $14,087,586 $ 13,039,917 $12,552,188 $15,650,854 $16,053,672
=========== =========== ============ =========== =========== ===========
Obligations of other U.S. government
agencies and corporations
within one (1) year $25,848,056 $25,852,838 $ 16,819,276 $16,656,559 $13,243,664 $13,450,839
after one (1) year but within
five (5) years 68,229,581 68,286,032 82,986,954 78,158,656 75,328,861 76,042,375
after five (5) years but within
ten (10) years NONE NONE 499,752 450,781 1,499,713 1,529,375
after ten (10) years NONE NONE NONE NONE NONE NONE
----------- ----------- ------------ ----------- -------- --------
Total securities of U.S.
Government agencies
and corporations $94,077,637 $94,138,870 $100,305,982 $95,265,996 $90,072,238 $91,022,589
=========== =========== ============ =========== =========== ===========
</TABLE>
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
SCHEDULE I. U.S. TREASURY SECURITIES, OBLIGATIONS OF
OTHER U.S. GOVERNMENT AGENCIES AND CORPORATIONS,
OBLIGATIONS OF STATES AND POLITICAL SUBDIVISIONS
(Continued)
<TABLE>
<CAPTION>
December 31, 1995 December 31, 1994 December 31, 1993
Book Value Market Value Book Value Market Value Book Value Market Value
---------- ------------ ---------- ------------ ---------- ------------
<S> <C>
Obligations of state and
political subdivisions
within one (1) year $ 3,271,969 $ 3,301,865 $ 1,780,871 $ 1,770,573 $ 1,200,457 $ 1,203,130
after one (1) but within
five (5) years 10,668,701 10,698,160 9,159,604 9,007,720 9,403,546 9,726,731
after five (5) but within
ten ( 10) years 2,405,571 2,415,245 5,248,304 4,844,129 4,162,762 4,159,583
after ten (10) years 240,000 260,935 240,000 252,456 240,000 273,145
----------- ----------- ----------- ---------- ----------- -----------
Total obligations of states
and political subdivisions $16,586,241 $16,676,205 $16,428,779 $15,874,878 $15,006,765 $15,362,589
=========== =========== =========== =========== =========== ===========
Other bonds
within one (1) year $ 250,000 $ 256,860 $ NONE $ NONE $ 999,719 $ 1,010,000
after one (1) but within
five (5) years 249,816 251,787 499,706 493,475 499,601 532,500
after five (5) but within
ten (10) years NONE NONE NONE NONE NONE NONE
after ten (10) years 50,544 50,544 NONE NONE NONE NONE
----------- ----------- ----------- ----------- ----------- -----------
Total other bonds $ 550,360 $ 559,191 $ 499,706 $ 493,475 $ 1,499,320 $ 1,542,500
=========== =========== =========== =========== =========== ===========
</TABLE>
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
SCHEDULE I. U.S. TREASURY SECURITIES, OBLIGATIONS OF
OTHER U.S. GOVERNMENT AGENCIES AND CORPORATIONS,
OBLIGATIONS OF STATES AND POLITICAL SUBDIVISIONS
(Continued)
Book value represents securities stated net of premium amortization and
discount accretion. Certain of the above securities with a book value of
$20,993,017 at December 31, 1995, $30,269,810 at December 31, 1994 and
$12,917,920 at December 31, 1993, have been pledged to secure deposits and for
other purposes. All securities are of investment grade.
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
SCHEDULE II. LOANS TO OFFICERS, DIRECTORS, PRINCIPAL SECURITY
HOLDERS, AND ANY ASSOCIATES OF THE FOREGOING PERSONS
<TABLE>
<CAPTION>
Column A Column B Column C Column D Column E
Balance at
Beginning of Balance at
Name of Debtor Period Additions Deductions End of Period
(1) (2)
Amounts Amounts
Collected Charged Off
<S> <C>
1995*
0 Directors $ 0 $ 0 $ 0 $ 0 $ 0
1994*
0 Directors $ 0 $ 0 $ 0 $ 0 $ 0
1993*
0 Directors $ 0 $ 0 $ 0 $ 0 $ 0
</TABLE>
* The outstanding loans of any director or their related
interests were not 2.5% of capital or $500,000 at any time during
1995, 1994 or 1993.
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
SCHEDULE VI. ALLOWANCE FOR LOAN LOSSES
Transactions in the Allowance for Loan Losses account are summarized
below.
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C>
Balance Beginning $2,524,309 $2,217,175 $2,143,188
Recoveries 95,360 25,584 24,149
Provisions Charged to Operations 309,000 420,887 217,216
---------- ---------- ----------
TOTAL 2,928,669 2,663,646 2,384,553
Loans Charged Off (142,877) (139,337) (167,378)
---------- ---------- ----------
BALANCE ENDING $2,785,792 $2,524,309 $2,217,175
========== ========== ==========
</TABLE>
An analysis of the Allowance for Loan Losses for Federal Income Tax purposes
is shown below. Deductions taken for tax purposes were the maximum allowed by
applicable tax law.
<TABLE>
<CAPTION>
1995 1994 1993
---- ---- ----
<S> <C>
Balance Beginning $ 688,269 $ 688,269 $ 688,269
Recoveries 95,360 25,584 24,150
Provision Deducted for Tax
Purposes 47,517 113,753 143,228
--------- ---------- ----------
TOTAL 831,146 827,606 855,647
Loans Charged Off (142,877) (139,337) (167,378)
---------- --------- ---------
BALANCE ENDING $ 688,269 $ 688,269 $ 688,269
========== ========== ==========
</TABLE>
(b) Form F-3 was not required to be filed during the last quarter of 1995.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act
of 1934, the Bank has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
Date By
Harry V. Boney, Jr., President
Date By
Fred D. Bowers, Senior Vice President
and Cashier
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Date By
Lee S. Baker, Director
Date By
Benham M. Black, Chairman of the Board
Date By
Harry V. Boney, Jr., Director
Date By
H. C. Stuart Cochran, Director
Date By
Steven C. Corell, Director
Date By
G. Raymond Ergenbright, Director
Date By
Paul Flanagan, Director
Date By
Jan S. Hoover, Director
<PAGE>
Date By
Robert S. Landes, Vice Chairman of the Board
Date By
Martin F. Lightsey, Director
Date By
Lewis W. Moore, Director
Date By
James S. Quarforth, Director
<PAGE>
FINANCIAL STATEMENT 5(A)2
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
Staunton, Virginia
FINANCIAL REPORT
DECEMBER 31, 1995
<PAGE>
C O N T E N T S
INDEPENDENT AUDITOR'S REPORT 1
FINANCIAL STATEMENTS
Balance sheets 2
Statements of income 3 and 4
Statements of cash flows 5 and 6
Statements of changes in stockholders' equity 7
Notes to financial statements 8-18
<PAGE>
INDEPENDENT AUDITOR'S REPORT
To the Stockholders and Directors
Planters Bank & Trust Company of Virginia
Staunton, Virginia
We have audited the accompanying balance sheets of Planters Bank &
Trust Company of Virginia as of December 31, 1995 and 1994, and the related
statements of income, changes in stockholders' equity and cash flows for the
years ended December 31, 1995, 1994, and 1993. These financial statements are
the responsibility of the Bank's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Planters Bank &
Trust Company of Virginia as of December 31, 1995 and 1994, and the results of
its operations and cash flows for the years ended December 31, 1995, 1994, and
1993, in conformity with generally accepted accounting principles.
As discussed in Note 1, the Bank changed its method of accounting
for investments in debt and equity securities to adopt the provisions of
Statement of Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" in 1994.
Yount, Hyde & Barbour, P.C.
Winchester, Virginia
January 6, 1996
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
Balance Sheets
December 31, 1995 and 1994
<TABLE>
<CAPTION>
1995 1994
-------------- --------------
<S> <C>
Assets
Cash and due from banks (Note 2) $ 12 574 772 $ 12 243 725
Securities (fair value: 1995, $125,461,851;
1994, $124,186,540) (Note 3) 125 398 257 129 331 794
Loans, net (Notes 4, 5 and 8) 209 541 253 194 054 424
Bank premises and equipment, net (Note 6) 4 309 154 4 403 065
Accrued interest on loans and securities 3 083 104 2 897 562
Intangibles (Note 1) 313 465 337 115
Other assets (Note 7) 847 747 1 205 428
-------------- --------------
Total assets $ 356 067 752 $ 344 473 113
============== ==============
Liabilities and Stockholders' Equity
Demand deposits $ 43 648 387 $ 40 396 239
Negotiable orders of withdrawal 38 467 097 37 562 515
Money market deposit accounts 67 803 776 88 680 111
Regular savings 38 643 617 42 960 868
Time certificates of deposit of $100,000 or more 19 213 436 12 781 124
Time deposits 111 801 474 74 624 746
-------------- --------------
Total deposits $ 319 577 787 $ 297 005 603
Securities sold under agreements to repurchase 1 330 000 15 695 000
Federal funds purchased - - 1 000 000
Other liabilities 1 006 376 726 106
-------------- --------------
Total liabilities $ 321 914 163 $ 314 426 709
-------------- --------------
Commitments and contingencies (Notes 9 and 10)
Stockholders' Equity
Common stock, $10 par value; authorized, 5,000,000 shares;
issued and outstanding, 2,000,000 shares (Note 13) $ 20 000 000 $ 20 000 000
Surplus 3 554 034 3 554 034
Retained earnings (Notes 11 and 13) 10 489 087 7 114 480
Unrealized gain (loss) on securities available for sale, net 110 468 (622 110)
-------------- --------------
Total stockholders' equity $ 34 153 589 $ 30 046 404
-------------- --------------
Total liabilities and stockholders' equity $ 356 067 752 $ 344 473 113
============== ==============
</TABLE>
See Notes to Financial Statements.
2
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
Statements of Income
Years Ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C>
Interest Income Interest and fee income on loans:
Real estate loans $ 10 022 690 $ 8 388 988 $ 8 382 100
Installment loans 3 040 510 2 196 097 1 858 985
Commercial and all other loans 6 055 600 4 916 538 4 297 017
Interest on investment securities:
U.S. Treasury and U.S. Government
Agency securities 4 586 212 5 099 966 5 971 957
Corporate securities 37 906 82 457 159 649
Nontaxable interest income, state and municipal
securities 781 481 814 212 666 919
Interest on securities available for sale:
U.S. Treasury and U.S. Government
Agency securities 1 442 122 1 362 316 - -
Interest income on federal funds sold and
securities purchased under agreements to resell 106 690 41 335 99 173
-------------- -------------- --------------
Total interest income $ 26 073 211 $ 22 901 909 $ 21 435 800
-------------- -------------- --------------
Interest Expense
Interest on time certificates of deposit of $100,000
or more $ 995 031 $ 309 095 $ 213 689
Interest on other deposits 10 905 851 9 190 483 8 954 545
Interest on federal funds purchased and securities
sold under agreements to repurchase 442 171 247 876 40 341
-------------- -------------- --------------
Total interest expense $ 12 343 053 $ 9 747 454 $ 9 208 575
-------------- -------------- --------------
Net interest income $ 13 730 158 $ 13 154 455 $ 12 227 225
Provision for loan losses (Note 5) 309 000 420 887 217 216
-------------- -------------- --------------
Net interest income after provision for loan losses $ 13 421 158 $ 12 733 568 $ 12 010 009
-------------- -------------- --------------
Noninterest Income
Trust department income $ 821 644 $ 941 084 $ 790 316
Service charge on deposit accounts 620 520 598 422 561 936
Other noninterest income 682 551 666 358 839 675
-------------- -------------- --------------
Total noninterest income $ 2 124 715 $ 2 205 864 $ 2 191 927
-------------- -------------- --------------
Gains on securities $ 1 250 $ 1 219 $ 44 052
-------------- -------------- --------------
</TABLE>
See Notes to Financial Statements.
3
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
Statements of Income
(Continued)
Years Ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C>
Noninterest Expense
Salaries and employee benefits $ 4 697 809 $ 4 378 432 $ 4 164 962
Expense of premises and fixed assets 924 055 913 664 836 450
Other noninterest expense 2 612 744 2 790 725 2 509 867
-------------- -------------- --------------
Total noninterest expense $ 8 234 608 $ 8 082 821 $ 7 511 279
-------------- -------------- --------------
Income before income taxes $ 7 312 515 $ 6 857 830 $ 6 734 709
Applicable income taxes (Note 7) 2 277 908 2 104 669 2 097 280
-------------- -------------- --------------
Net income $ 5 034 607 $ 4 753 161 $ 4 637 429
============== ============== ==============
Earnings per share* $ 2.52 $ 2.38 $ 2.32
Book value per share* $ 17.08 $ 15.02 $ 13.67
Average shares outstanding* 2 000 000 2 000 000 2 000 000
</TABLE>
*Adjusted for 100 percent stock dividend, December 1993.
See Notes to Financial Statements.
4
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
Statements of Cash Flows
Years Ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>
1995 1994 1993
---------- --------- ----------
<S> <C>
Cash Flows from Operating Activities
Interest received $ 25 946 155 $ 22 726 115 $ 21 526 135
Fees and other noninterest income 2 124 715 2 205 864 2 191 927
Interest paid (11 988 598) (9 715 955) (9 300 032)
Cash paid to suppliers and employees (7 904 943) (7 545 696) (7 112 854)
Income taxes paid (2 327 327) (2 200 129) (2 124 427)
------------- ------------- -------------
Net cash provided by operating activities $ 5 850 002 $ 5 470 199 $ 5 180 749
------------- ------------- -------------
Cash Flows from Investing Activities
Proceeds from maturities of investment securities $ 24 049 524 $ 18 970 849 $ 59 553 872
Proceeds from sales and calls of investment
securities 251 250 - - 7 262 000
Proceeds from maturities of securities available
for sale 6 500 000 5 484 378 - -
Proceeds from sales and calls of securities
available for sale - - 2 006 960 - -
Purchases of investment securities (7 504 014) (26 130 220) (75 349 464)
Purchases of securities available for sale (18 246 520) (8 463 438) - -
Net (increase) in loans (15 795 828) (25 624 888) (3 929 478)
Proceeds from sale of equipment - - 4 200 - -
Capital expenditures (320 551) (694 003) (645 637)
Purchase of intangible assets - - (354 858) - -
Purchase of other assets - - - - (31 250)
Proceeds from sale of other real estate - - 63 000 - -
------------- ------------- -------------
Net cash (used in) investing activities $ (11 066 139) $ (34 738 020) $ (13 139 957)
------------- ------------- -------------
Cash Flows from Financing Activities
Net increase (decrease) in certificates of deposit $ 43 609 040 $ 22 283 039 $ (6 835 995)
Net increase (decrease) in demand deposits (21 036 856) (4 567 039) 16 770 754
Net increase (decrease) in federal funds purchased (1 000 000) 1 000 000 (2 500 000)
Net increase (decrease) in securities sold
under repurchase agreements (14 365 000) 14 670 000 260 000
Cash dividends paid (1 660 000) (1 420 000) (1 200 000)
------------- ------------- -------------
Net cash provided by financing activities $ 5 547 184 $ 31 966 000 $ 6 494 759
------------- ------------- -------------
Net increase (decrease) in cash and cash
equivalents $ 331 047 $ 2 698 179 $ (1 464 449)
Cash and cash equivalents at beginning of year 12 243 725 9 545 546 11 009 995
------------- ------------- -------------
Cash and cash equivalents at end of year $ 12 574 772 $ 12 243 725 $ 9 545 546
============= ============= =============
</TABLE>
See Notes to Financial Statements.
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
Statements of Cash Flows
(Continued)
Years Ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>
1995 1994 1993
------------- ----------- ------------
<S> <C>
Reconciliation of Net Income to Net Cash
Provided by Operating Activities
Net income $ 5 034 607 $ 4 753 161 $ 4 637 429
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 437 333 411 134 412 220
Provision for loan losses 309 000 420 887 217 216
Deferred taxes (72 864) (73 077) (15 970)
(Gain) on sale of securities (1 250) (1 219) (44 052)
(Gain) loss on sale of equipment 779 (3 997) 1 244
(Gain) on sale of other real estate - - (19 000) - -
Changes in assets and liabilities:
(Decrease) in taxes payable - - - - (7 477)
(Increase) in interest receivable (185 542) (259 757) (8 492)
Increase (decrease) in interest payable 354 455 31 499 (91 457)
(Increase) decrease in prepaid expenses 3 156 21 227 (42 290)
Increase (decrease) in accrued expenses (88 158) 105 378 20 472
Premium amortization on securities, net 44 514 87 483 101 453
Increase (decrease) in deferred income 13 972 (3 520) 453
------------- ------------- -------------
Net cash provided by operating activities $ 5 850 002 $ 5 470 199 $ 5 180 749
------------- ------------- -------------
Supplemental Schedule of Noncash
Investing Activities
Other real estate acquired in settlement of loans $ - - $ - - $ 44 000
============= ============= =============
Unrealized gain (loss) on securities available for sale $ 1 109 969 $ (942 591) $ - -
============= ============= =============
</TABLE>
See Notes to Financial Statements.
6
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
Statements of Changes in Stockholders' Equity
Years Ended December 31, 1995, 1994 and 1993
<TABLE>
<CAPTION>
Unrealized
Gain
(Loss) On
Securities
Available
Common Stock Retained For Sale,
Shares Par Value Surplus Earnings Net
---------- -------------- -------------- ------------- --------------
<S> <C>
Balances, December 31, 1992 1 000 000 $ 10 000 000 $ 3 554 034 $ 10 343 890 $ - -
Cash dividends ($0.60 per share) - - - - - - (1 200 000)
Net income - - - - - - 4 637 429
Stock split effected in the form of a
100% stock dividend at par (Note 13) 1 000 000 10 000 000 - - (10 000 000)
---------- -------------- -------------- ------------- --------------
Balances, December 31, 1993 2 000 000 $ 20 000 000 $ 3 554 034 $ 3 781 319 $ - -
Cash dividends ($0.71 per share) - - - - - - (1 420 000) - -
Net income - - - - - - 4 753 161 - -
Net change in unrealized (loss) on
securities available for sale, net of
deferred income taxes of $320,481 - - - - - - - - (622 110)
---------- -------------- -------------- ------------- --------------
Balances, December 31, 1994 2 000 000 $ 20 000 000 $ 3 554 034 $ 7 114 480 $ (622 110)
Cash dividends ($0.83 per share) - - - - - - (1 660 000) - -
Net income - - - - - - 5 034 607 - -
Net change in unrealized gain (loss)
on securities available for sale, net
of deferred income taxes of $377,391 - - - - - - - - 732 578
---------- -------------- -------------- ------------- --------------
Balances, December 31, 1995 2 000 000 $ 20 000 000 $ 3 554 034 $ 10 489 087 $ 110 468
========== ============== =============== ============= ==============
</TABLE>
See Notes to Financial Statements.
7
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
Notes to Financial Statements
Note 1. Nature of Banking Activities and Significant Accounting Policies
Planters Bank & Trust Company of Virginia grants consumer,
agribusiness, commercial and real estate loans to customers
located primarily in the Augusta County and Rockingham County,
Virginia area. The loan portfolio is well diversified and is not
concentrated with any one business sector or industry.
The accounting and reporting policies of Planters Bank & Trust
Company of Virginia conform to generally accepted accounting
principles and predominant practices within the banking industry.
The following is a description of the more significant of these
policies:
Cash and Due From Banks
For purposes of reporting cash flows, cash and due from banks
includes cash on hand, amounts due from banks and cash items in
process of collection. Cash flows from deposits, federal funds
purchased and renewals and extensions of loans are reported
net.
Securities
The Bank adopted FASB No. 115, "Accounting for Certain
Investment in Debt and Equity Securities" effective beginning
January 1, 1994. This statement addresses the accounting and
reporting for investments in equity securities that have
readily determinable fair values and for all investments in
debt securities. Those investments are classified in three
categories and accounted for as follows:
a. Securities Held to Maturity
Securities classified as held to maturity are those debt
securities the Bank has both the intent and ability to hold
to maturity regardless of changes in market conditions,
liquidity needs or changes in general economic conditions.
These securities are carried at cost adjusted for
amortization of premium and accretion of discount, computed
by the interest method over their contractual lives.
b. Securities Available for Sale
Securities classified as available for sale are those debt
and equity securities that the Bank intends to hold for an
indefinite period of time, but not necessarily to maturity.
Any decision to sell a security classified as available for
sale would be based on various factors, including significant
movements in interest rates, changes in the maturity mix of
the Bank's assets and liabilities, liquidity needs,
regulatory capital considerations, and other similar factors.
Securities available for sale are carried at fair value.
Unrealized gains or losses are reported as increases or
decreases in stockholders' equity, net of the related
deferred tax effect. Realized gains or losses, determined on
the basis of the cost of specific securities sold, are
included in earnings.
c. Trading Securities
Trading securities, which are generally held for the short
term in anticipation of market gains, are carried at fair
value. Realized and unrealized gains and losses on trading
account assets are included in interest income on trading
account securities. The Bank had no trading securities at
December 31, 1995 and 1994.
Prior to 1994, debt securities were stated at cost adjusted for
amortization of premiums and accretion of discounts. The amount
by which the market value was below the carrying value was
considered by management to be temporary and not indicative of
a permanent impairment in value. In addition, management did
not anticipate a requirement to sell, at a loss, any of the
securities for liquidity or other operating purposes. Net gains
or losses on the sale of investments were shown under other
operating income.
8
<PAGE>
Notes to Financial Statements
Loans
Loans are stated at the amount of unpaid principal, reduced by
unearned discount and fees and an allowance for loan losses.
Interest on installment loans, as well as on all other loans,
is accrued daily on the outstanding balances. Mortgage loan
origination and commitment fees and certain direct costs are
deferred and the net amount amortized, generally over the
contractual loan life, as an adjustment of yield. Commitment
fees related to standby letters of credit are recognized over
the commitment period.
On January 1, 1995, the Bank adopted FASB No. 114, "Accounting
by Creditors for Impairment of a Loan." This Statement has been
amended by FASB No. 118, "Accounting by Creditors for
Impairment of a Loan - Income Recognition and Disclosures."
Statement 114, as amended, requires that the impairment of
loans that have been separately identified for evaluation is to
be measured based on the present value of expected future cash
flows or, alternatively, the observable market price of the
loans or the fair value of the collateral. However, for those
loans that are collateral dependent (that is, if repayment of
those loans is expected to be provided solely by the underlying
collateral) and for which management has determined foreclosure
is probable, the measure of impairment of those loans is to be
based on the fair value of the collateral. Statement 114, as
amended, also requires certain disclosures about investments in
impaired loans and the allowance for credit losses and interest
income recognized on loans. The Bank has no loans to which
Statement 114 applies at December 31, 1995.
Loans are placed on nonaccrual when a loan is specifically
determined to be impaired or when principal or interest is
delinquent for 90 days or more. Any unpaid interest previously
accrued on those loans is reversed from income. Interest income
generally is not recognized on specific impaired loans unless
the likelihood of further loss is remote. Interest payments
received on such loans are applied as a reduction of the loan
principal balance. Interest income on other nonaccrual loans is
recognized only to the extent of interest payments received.
Allowance for Loan Losses
The allowance for loan losses is maintained at a level which,
in management's judgment, is adequate to absorb credit losses
inherent in the loan portfolio. The amount of the allowance is
based on management's evaluation of the collectibility of the
loan portfolio, including the nature of the portfolio, credit
concentrations, trends in historical loss experience, specific
impaired loans, and economic conditions. Allowances for
impaired loans are generally determined based on collateral
values or the present value of estimated cash flows. The
allowance is increased by a provision for loan losses, which is
charged to expense and reduced by charge-offs, net of
recoveries. Changes in the allowance relating to impaired loans
are charged or credited to the provision for loan losses.
Because of uncertainties inherent in the estimation process,
management's estimate of credit losses inherent in the loan
portfolio and the related allowance may change in the near
term.
Bank Premises and Equipment
Bank premises and equipment are stated at cost less accumulated
depreciation. Repairs and maintenance are expensed as incurred.
Gains and losses on routine dispositions are reflected in
current operations.
Depreciation is computed by the straight-line and declining
balance methods over the following estimated useful lives:
Buildings and improvements 10-50 years
Furniture and equipment 3-25 years
Trust Department Assets
Securities and other property held by the Trust Department
in a fiduciary or agency capacity are not assets of the Bank
and are not included in the accompanying financial
statements.
9
<PAGE>
Notes to Financial Statements
Deposit Intangibles
The cost of purchased deposit relationships and other
intangible assets, based on independent valuation, are being
amortized over estimated remaining lives ranging from nine to
fifteen years. Amortization expense charged to operations was
$23,650 in 1995, $17,743 in 1994, and $3,079 in 1993.
Income Taxes
Deferred taxes are provided on a liability method whereby
deferred tax assets are recognized for deductible temporary
differences, operating loss carryforwards and tax credit
carryforwards. Deferred tax liabilities are recognized for
taxable temporary differences. Temporary differences are the
differences between the reported amounts of assets and
liabilities and their tax bases. Deferred tax assets are
reduced by a valuation allowance when, in the opinion of
management, it is more likely than not that some portion or all
of the deferred tax assets will not be realized. Deferred tax
assets and liabilities are adjusted for the effects of changes
in tax laws and rates on the date of enactment.
Pension Plan
The Bank has a trusteed, noncontributory defined contribution
pension plan covering substantially all full-time employees.
Use of Estimates
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements, and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Note 2. Restrictions on Cash
To comply with Federal Reserve Regulations, the Bank is required
to maintain certain average reserve balances. The daily average
reserve requirement was $3,555,000 and $3,010,000 for the reserve
periods including December 31, 1995 and 1994, respectively.
Note 3. Securities
The amortized cost and fair value of the securities being held to
maturity as of December 31, 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
1995
--------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains (Losses) Value
---------- ---------- ---------- -----------
<S> <C>
U. S. Treasury $ 988 686 $ 5 840 $ - - $ 994 526
U. S. Government Agencies 70 822 956 292 241 (333 282) 70 781 915
State and Municipal 16 586 241 156 117 (66 153) 16 676 205
Corporate Securities 499 816 8 831 - - 508 647
----------- -------- --------- -----------
Total $88 897 699 $463 029 $(399 435) $88 961 293
=========== ======== ========= ===========
</TABLE>
10
<PAGE>
Notes to Financial Statements
<TABLE>
<CAPTION>
1994
-----------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains (Losses) Value
<S> <C> --------- ---------- ---------- --------------
U. S. Treasury $ 979 199 $ - - $ (37 168) $ 942 031
U. S. Government Agencies 87 808 393 14 420 (4 562 376) 83 260 437
State and Municipal 16 428 779 69 798 (623 698) 15 874 879
Corporate Securities 499 705 3 875 (10 105) 493 475
------------ ------- ----------- --------------
Total $105 716 076 $88 093 $(5 233 347) $ 100 570 822
============ ======= =========== ==============
</TABLE>
The amortized cost and fair value of the securities being held to
maturity as of December 31, 1995 and 1994 by contractual maturity,
are shown below. Expected maturities may differ from contractual
maturities because issuers may have the right to call or prepay
obligations without any penalties.
<TABLE>
<CAPTION>
1995 1994
---------------------------- -------------------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
----------- ----------- ------------ ------------
<S> <C>
Due in one year or less $25 373 704 $25 915 437 $ 13 599 867 $ 13 496 120
Due after one year through
five years 60 878 423 60 369 677 86 128 154 81 527 336
Due after five years through
ten years 2 405 572 2 415 245 5 748 055 5 294 910
Due after 10 years 240 000 260 934 240 000 252 456
----------- ----------- ------------ ------------
Total $88 897 699 $88 961 293 $105 716 076 $100 570 822
=========== =========== ============ ============
</TABLE>
The amortized cost and fair values of securities available for
sale as of December 31, 1995 and 1994, are as follows:
<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains (Losses) Value
-------------- -------------- ------------- ---------------
<S> <C>
U. S. Treasury $ 13 027 955 $ 81 131 $ (16 026) $ 13 093 060
U. S. Government Agencies 23 254 681 162 217 (59 944) 23 356 954
Other 50 544 - - - - 50 544
-------------- -------------- ------------- ---------------
Total $ 36 333 180 $ 243 348 $ (75 970) $ 36 500 558
============== ============== ============= ===============
</TABLE>
11
<PAGE>
Notes to Financial Statements
<TABLE>
<CAPTION>
1994
----------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains (Losses) Value
-------------- -------------- ------------- ---------------
<S> <C>
U. S. Treasury $ 12 060 719 $ 300 $ (450 863) $ 11 610 156
U. S. Government Agencies 12 497 590 - - (492 028) 12 005 562
-------------- -------------- ------------- ---------------
Total $ 24 558 309 $ 300 $ (942 891) $ 23 615 718
============== ============== ============= ===============
</TABLE>
The amortized cost and fair value of securities available for sale
as of December 31, 1995 and 1994, by contractual maturity are
shown below. Expected maturities may differ from contractual
maturities because issuers may have the right to call or prepay
obligations without any penalties.
<TABLE>
<CAPTION>
1995 1994
----------------------------------- ------------------------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
-------------- -------------- -------------- ---------------
<S> <C>
Due in one year or less $ 8 994 932 $ 9 018 239 $ 5 499 980 $ 5 431 013
Due after one year through
five years 27 287 704 27 431 775 19 058 329 18 184 705
Other 50 544 50 544 - - - -
-------------- -------------- -------------- ---------------
Total $ 36 333 180 $ 36 500 558 $ 24 558 309 $ 23 615 718
============== ============== ============== ===============
</TABLE>
Proceeds from the call of a security held to maturity during 1995
was $251,250. Gross gains of $1,250 were realized on this call.
Proceeds from the sale of securities held to maturity during 1993
were $7,262,000. Gross gains of $44,651, and gross losses of $599
were realized on those sales. There were no sales or calls of
securities held to maturity during 1994.
Proceeds from the sale of securities available for sale during
1994 were $2,006,960. Gross gains of $1,219 were realized on those
sales. No losses were realized on those sales. There were no sales
during 1995.
The book value of securities pledged to secure deposits and for
other purposes amounted to $20,993,017 and $30,269,810 at December
31, 1995 and 1994, respectively.
12
<PAGE>
Notes to Financial Statements
Note 4. Loans
Loans at December 31, 1995 and 1994, are summarized as follows:
<TABLE>
<CAPTION>
Book Value Rounded to Thousands
1995 1994
------------- -------------
<S> <C>
Real estate loans:
Construction $ 12 924 $ 8 993
Secured by farmland 1 056 649
Secured by 1-4 family residential 91 125 86 487
Other real estate loans 40 022 37 394
Loans to farmers (except those
secured by real estate) 2 988 3 116
Commercial and industrial loans
(except those secured by real estate) 34 626 33 930
Loans to individuals for household, family
and other consumer expenditures 29 056 25 221
All other loans (including overdrafts) 908 1 205
------------ ------------
Total loans $ 212 705 $ 196 995
Less: Unearned income 378 417
Allowance for loan losses 2 786 2 524
------------ ------------
Net loans $ 209 541 $ 194 054
============ ============
</TABLE>
Nonaccrual loans excluded from impaired loan disclosure under FASB
114 amounted to $140,326 , $219,116, and $169,804 at December 31,
1995, 1994 and 1993, respectively. If interest on these loans had
been accrued, such income would have approximated $3,689, $27,535,
and $17,283 for 1995, 1994, and 1993, respectively.
Note 5. Allowance for Loan Losses
Transactions in the allowance for loan losses for each of the
three years ended December 31 are as follows:
1995 1994 1993
------------- ------------- -------------
Balance, beginning $ 2 524 309 $ 2 217 175 $ 2 143 188
Recoveries 95 359 25 584 24 149
Provisions charged
to operations 309 000 420 887 217 216
------------- ------------- -------------
Total $ 2 928 668 $ 2 663 646 $ 2 384 553
Loans charged off 142 877 139 337 167 378
------------- ------------- -------------
Balance, ending $ 2 785 791 $ 2 524 309 $ 2 217 175
============= ============= =============
<PAGE>
Notes to Financial Statements
Note 6. Bank Premises and Equipment
The major classes of bank premises and equipment and the total
accumulated depreciation are as follows:
1995 1994
------------- -------------
Land $ 877 694 $ 877 694
Buildings and improvements 4 265 570 4 161 734
Furniture and equipment 3 597 700 3 390 030
Construction in progress - - 18 002
------------- -------------
$ 8 740 964 $ 8 447 460
Accumulated depreciation 4 431 810 4 044 395
------------- -------------
$ 4 309 154 $ 4 403 065
============= =============
Depreciation charged to operations was $413,683 in 1995, $393,391
in 1994 and $412,220 in 1993.
14
<PAGE>
Notes to Financial Statements
Note 7. Income Taxes
Effective January 1, 1993, the Bank adopted FASB Statement No.
109, "Accounting for Income Taxes." The adoption of Statement 109
changes the Bank's method of accounting for income taxes from the
deferred method to a liability method. Under the deferred method,
the Bank deferred the past tax effects of timing differences
between financial reporting and taxable income. As explained in
Note 1, the liability method requires the recognition of deferred
tax assets and liabilities for the expected future tax
consequences of temporary differences between the reported amounts
of assets and liabilities and their tax bases. The cumulative
effect of the change in accounting principle is deemed immaterial
in determining net income for the year ended December 31, 1993.
Net deferred tax assets consist of the following components as of
December 31, 1995 and 1994:
<TABLE>
<CAPTION>
1995 1994
------------- -------------
<S> <C>
Deferred tax assets:
Allowance for loan losses $ 713 158 $ 624 254
Deferred loan fees 106 430 115 150
Securities available for sale - - 320 481
Other 11 782 18 500
------------- -------------
$ 831 370 $ 1 078 385
------------- -------------
Deferred tax liabilities:
Bank premises $ 112 112 $ 112 082
Securities available for sale 56 910 - -
Other 3 753 3 183
------------- -------------
$ 172 775 $ 115 265
------------- -------------
$ 658 595 $ 963 120
============= =============
</TABLE>
The provision for income taxes charged to operations for the years
ended December 31, 1995, 1994 and 1993, consists of the following:
<TABLE>
<CAPTION>
1995 1994 1993
----------- ------------ -----------
<S> <C>
Current tax expense $ 2 350 772 $ 2 177 746 $ 2 113 250
Deferred tax (benefit) (72 864) (73 077) (15 970)
------------ ------------ ------------
$ 2 277 908 $ 2 104 669 $ 2 097 280
============ ============ ============
</TABLE>
The income tax provision differs from the amount of income tax
determined by applying the U.S. federal income tax rate to pretax
income due to the following:
<TABLE>
<CAPTION>
1995 1994 1993
------------ ------------ ------------
<S> <C>
Computed "expected" tax expense $ 2 486 255 $ 2 331 662 $ 2 289 801
Increase (decrease) in income taxes
resulting from:
Tax exempt interest income (221 993) (235 323) (222 171)
Other 13 646 8 330 29 650
------------ ------------ ------------
$ 2 277 908 $ 2 104 669 $ 2 097 280
============ ============ ============
</TABLE>
15
<PAGE>
Notes to Financial Statements
Note 8. Related Party Transactions
The following transactions between the Bank and
stockholders/directors are reflected in the financial
statements:
1. Benham M. Black: Director
During 1995, the Bank paid $28,210 for legal services to the
firm of Black, Noland & Read of which Mr. Black is a member.
2. Robert S. Landes: Director
During 1995, the Bank paid $34,428 to J. B. Wine & Son,
Incorporated for various building renovations and building
construction. Mr. Landes was a director of the Bank and is a
stockholder in and serves as Chairman of the Board of J. B.
Wine & Son, Incorporated.
3. H. C. Stuart Cochran: Director
During 1995, the Bank paid $71,956 to Staunton Insurance
Agency, Incorporated, for various insurance coverages. Mr.
Cochran is Vice President and Treasurer of Staunton
Insurance Agency, Incorporated.
The Bank has also had, and may be expected to have in the
future, banking transactions in the ordinary course of business
with directors, their immediate families and affiliated
companies in which they are principal stockholders, all of
which have been, in the opinion of management, on the same
terms, including interest rates and collateral, as those
prevailing at the time for comparable transactions with others.
Aggregate loan transactions with related parties were as
follows:
1995 1994
------------ --------------
Beginning balance $ 1 212 416 $ 1 095 995
New loans 503 344 329 748
Repayments (555 817) (213 327)
Reduction due to board member (402 396) - -
------------- -------------
Ending balance $ 757 547 $ 1 212 416
============= =============
Maximum balance during the year $ 1 238 295 $ 1 222 404
============= =============
<PAGE>
Notes to Financial Statements
Note 9. Financial Instruments With Off-Balance Sheet Risk
The Bank is a party to financial instruments with
off-balance-sheet risk in the normal course of business to meet
the financing needs of its customers. These financial instruments
include commitments to extend credit and standby letters of
credit. These instruments involve, to varying degrees, elements
of credit risk in excess of the amount recognized in the balance
sheet. The Bank's exposure to credit loss in the event of
nonperformance by the other party to the financial instrument for
commitments to extend credit and standby letters of credit is
represented by the contractual amount of those instruments. The
Bank uses the same credit policies in making commitments as it
does for on-balance-sheet instruments.
A summary of the contract amount of the Bank's exposure to
off-balance-sheet risk as of December 31, 1995 and 1994 is as
follows:
1995 1994
-------- -------
(in thousands)
Financial instruments whose contract
amounts represent credit risk:
Commitments to extend credit $ 48 404 $ 51 830
Standby letters of credit 3 114 2 159
Commitments to extend credit are agreements to lend to a customer
as long as there is no violation of any condition established in
the contract and represent the undrawn portion of the total
commitment. Collateral held is, primarily, deeds of trust on real
estate.
Standby letters of credit are conditional commitments issued by
the Bank to guarantee the performance of a customer to a third
party. Most commitments are extended for less than one year with
the longest expiring in 1996. The credit risk involved in issuing
letters of credit is essentially the same as that involved in
extending loans to customers. The extent of collateral held for
those commitments at December 31, 1995, varies from 0% to 100%;
the average amount collateralized is 46.13%.
The securities portfolio includes U.S. Treasury and U.S.
Government agency securities which may, on occasions, be loaned
to securities dealers designated as "Primary Government Dealers"
by the Federal Reserve System. Such loans of securities are
secured by U.S. Treasury securities, U.S. Government agency
securities, or cash with a market value exceeding 102% of the
market value of securities lent. The loaned securities continue
to be reported in the consolidated financial statements, and the
loan transaction is not reflected therein. In the event loans are
secured by cash, the pledged cash is reported as an asset in the
Corporation's consolidated balance sheet and an offsetting
liability is reported as short-term borrowings. All such loans
are callable in one business day. Such transactions may involve
credit and interest rate risk. At December 31, 1995, securities
loaned totaled $7,554,043.
The Bank maintains cash accounts in other commercial banks. The
amount on deposit at December 31, 1995 exceeded the insurance
limits of the Federal Deposit Insurance Corporation by
approximately $7,953,768.
Note 10. Commitments and Contingencies
The Bank is party to various legal proceedings. Counsel is of the
opinion that settlement of these items should not have a material
effect on financial position.
17
<PAGE>
Notes to Financial Statements
Note 11. Regulatory Restrictions
The Federal Deposit Insurance Corporation has approved a
statement of policy on risk-based capital requirements by banks.
These capital requirements call for an 8% total risk-based
capital ratio, of which 4% must comprise core capital, determined
by weighing assets and off-balance-sheet instruments according to
their relative credit risks. As of December 31, 1995, the Bank's
capital exceeded these requirements. Under applicable laws of
Virginia, dividend payments are restricted to undivided profits
after set-aside of required surplus funds. Amounts available for
dividend distribution were $10,489,087 and $7,114,480 at December
31, 1995 and 1994, respectively.
Note 12. Employee Retirement Plan
The Bank has a defined contribution retirement plan which covers
substantially all full-time salaried employees of the Bank.
Contributions are at the discretion of the Board of Directors.
Contributions amounted to $292,346, $247,938 and $237,636 in
1995, 1994 and 1993, respectively.
Note 13. Stockholders' Equity
The Board of Directors declared a 100% common stock dividend in
1993. Earnings per share and book value per share have been
computed giving retroactive effect to the dividend declaration.
Note 14. Leases
The Bank leases its Terry Court banking facility located in the
Terry Court Shopping Center on North Augusta Street, Staunton,
Virginia. The lease provides for an original five (5) year term
ending April 30, 1991, with options for three (3) five (5) year
extensions. The first option for a five (5) year extension was
exercised April 30, 1991. The current minimum lease payment is
$18,722. Lease expense was $21,885, $19,583 and $17,820, for the
years ended December 31, 1995, 1994, and 1993, respectively.
Note 15. Disclosures about Fair Value of Financial Instruments
The following methods and assumptions were used to estimate the
fair value of each class of financial instruments for which it is
practicable to estimate that value:
Cash and Short-Term Investments
For those short-term instruments, the carrying amount is a
reasonable estimate of fair value.
Securities
For securities held for investment purposes, fair values are
based on quoted market prices or dealer quotes.
Loan Receivables
For certain homogeneous categories of loans, such as some
residential mortgages, and other consumer loans, fair value is
estimated using the quoted market prices for securities backed by
similar loans, adjusted for differences in loan characteristics.
The fair value of other types of loans is estimated by
discounting the future cash flows using the current rates at
which similar loans would be made to borrowers with similar
credit ratings and for the same remaining maturities.
18
<PAGE>
Notes to Financial Statements
Deposit Liabilities
The fair value of demand deposits, savings accounts, and certain
money market deposits is the amount payable on demand at the
reporting date. The fair value of fixed-maturity certificates of
deposit is estimated using the rates currently offered for
deposits of similar remaining maturities.
Off-Balance Sheet Financial Instruments
The fair value of commitments is estimated using the fees
currently charged to enter into similar agreements, taking into
account the remaining terms of the agreements and the present
creditworthiness of the counterparties. For fixed-rate loan
commitments, fair value also considers the difference between
current levels of interest rates and the committed rates. The
fair value of letters of credit is based on fees currently
charged for similar agreements or on the estimated cost to
terminate them or otherwise settle the obligations with the
counterparties at the reporting date. The carrying amount is a
reasonable estimate of the fair value of securities loaned.
At December 31, 1995 and 1994, the carrying amounts and fair
values of loan commitments, stand-by letters of credit, and
securities loaned were immaterial.
The estimated fair values of the Bank's financial instruments are
as follows:
<TABLE>
<CAPTION>
1995 1994
--------------------------- --------------------------
Carrying Fair Carrying Fair
Amount Value Amount Value
----------- ---------- ---------- ----------
(in thousands) (in thousands)
<S> <C>
Financial assets:
Cash and short-term investments $ 12 575 $ 12 575 $ 12 244 $ 12 244
Securities 125 398 125 462 129 332 124 187
Loans 212 327 215 369 196 579 192 902
Less: allowance for loan losses (2 786) - - (2 524) - -
----------- ---------- ---------- ----------
Total financial assets $ 347 514 $ 353 406 $ 335 631 $ 329 333
=========== ========== ========== ==========
Financial liabilities:
Deposits $ 319 578 $ 320 372 $ 297 006 $ 294 160
Securities sold under agreements
to repurchase 1 330 1 330 15 695 15 695
Federal funds purchased - - - - 1 000 1 000
----------- ---------- ---------- ----------
Total financial liabilities $ 320 908 $ 321 702 $ 313 701 $ 310 855
=========== ========== ========== ==========
</TABLE>
19
<PAGE>
Notes to Financial Statements
Note 16. New Accounting Pronouncements
Statement of Financial Accounting Standards No. 121, "Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets
to be Disposed of," establishes standards for the impairment of
long-lived assets, certain identifiable intangibles, and goodwill
related to those assets to be held and used and for long-lived
assets and certain identifiable intangibles to be disposed of.
This Statement requires that long-lived assets and certain
identifiable intangibles to be held and used by an entity be
reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may
not be recoverable. The Statement is effective for fiscal years
beginning after December 15, 1995. The Statement is not expected
to have a material impact on the Bank.
Statement of Financial Accounting Standards No. 122, "Accounting
for Mortgage Servicing Rights," amends FASB Statement No. 65,
"Accounting for Certain Mortgage Banking Activities," to require
that a mortgage banking enterprise recognize as separate assets
rights to service mortgage loans for others, however those
servicing rights are acquired. A mortgage banking enterprise that
acquires mortgage servicing rights through either the purchase or
origination of mortgage loans and sells or securitizes those
loans with servicing rights retained should allocate the total
cost of the mortgage loans to the mortgage servicing rights and
the loans (without the mortgage servicing rights) based on their
relative fair values if it is practicable to estimate those fair
values. If it is not practicable to estimate the fair values of
the mortgage servicing rights and the mortgage loans (without the
mortgage servicing rights), the entire cost of purchasing or
originating the loans should be allocated to the mortgage loans
(without the mortgage servicing rights) and no cost should be
allocated to the mortgage servicing rights. The Statement is
effective for transactions in fiscal years beginning after
December 15, 1995. The Statement is not expected to have a
material impact on the Bank.
Note 17. Unaudited Interim Financial Information
The results of operations for each of the quarters during the
two years ended December 31, 1995 and 1994
are summarized below (in thousands, except per share data):
<TABLE>
<CAPTION>
1995
Quarter Ended
March 31, June 30, September 30, December 31,
------------ ------------ -------------- ------------
<S> <C>
Interest income $ 6 298 $ 6 469 $ 6 538 $ 6 768
Net interest income 3 396 3 390 3 406 3 538
Income before
income taxes 1 841 1 717 1 862 1 893
Net income 1 272 1 189 1 284 1 290
Net income per share 0.64 0.59 0.64 0.65
</TABLE>
<TABLE>
<CAPTION>
1994
Quarter Ended
March 31, June 30, September 30, December 31,
------------ ----------- -------------- ------------
<S> <C>
Interest income $ 5 288 $ 5 641 $ 5 908 $ 6 065
Net interest income 3 077 3 224 3 389 3 464
Income before
income taxes 1 792 1 564 1 808 1 694
Net income 1 239 1 092 1 252 1 170
Net income per share 0.62 0.55 0.63 0.58
</TABLE>
20
<PAGE>
FINANCIAL STATEMENT 5(A)3
FORM F-4
QUARTERLY REPORT UNDER SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FIRST QUARTER ENDING MARCH 31, 1996
20786-1
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
VIRGINIA
54-0913256
24 SOUTH AUGUSTA STREET
STAUNTON, VIRGINIA
24401
540-885-1232
YES X NO __
The number of shares outstanding of the registrants' stock, which is common, was
2,000,000 as of March 31, 1996.
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
INDEX FOR FORM F-4
FOR THE FIRST QUARTER ENDING MARCH 31, 1996
Page No.
--------
Statement of Financial Condition 1
Statement of Income for Three Months
Ended March 31 2
Management's Discussion and Analysis of
Financial Condition and Results of Operation 3
Statement of Cash Flows for Three Months
Ended March 31 4 & 5
Statement of Change in Capital Stock, Surplus and
Undivided Profits 6
Signatures 7
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
STATEMENT OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
March 31 December 31
1996 1995
------------------- -----------------
<S> <C>
Assets:
Cash and Due From Depository
Institutions $ 13,107,392 $ 12,574,772
Interest Earning Bank Deposits 0 0
Federal Funds Sold 0 0
U.S. Treasury Securities 14,991,446 14,081,746
U.S. Agency Securities 94,286,609 94,179,910
State and Municipal Obligations 17,717,415 16,586,241
Corporate Securities 499,845 499,816
Other Securities 0 50,544
Loans Net of Unearned Income 215,246,617 212,327,045
Less Allowance for Loan Losses (2,750,025) (2,785,792)
----------------- -----------------
Net Loans 212,496,592 209,541,253
Bank Premises and Equipment Net
of Depreciation $ 4,320,807 $ 4,309,154
Accrued Interest on Loans and
Securities 3,243,411 3,083,104
Deposit Intangibles 307,552 313,465
Other Assets 1,198,243 847,747
------------------- -----------------
Total Assets $ 362,169,312 $ 356,067,752
=================== =================
Liability and Capital Accounts:
Demand Deposits $ 43,474,004 $ 43,648,387
Negotiable Orders of Withdrawal 38,558,047 38,467,097
Money Market Deposit Accounts 64,196,497 67,803,776
Passbook Savings 39,166,527 38,643,617
Time Deposits 135,638,589 131,014,910
Securities Sold Under Agreements
to Repurchase 4,230,000 1,330,000
Federal Funds Purchased 0 0
Other Liabilities 1,965,488 1,006,376
------------------- -----------------
Total Liabilities $ 327,229,152 $ 321,914,163
------------------- -----------------
Capital Accounts:
Common Stock - $10.00 Par
Authorized 5,000,000
Issued 2,000,000 $ 20,000,000 $ 20,000,000
Surplus 3,554,034 3,554,034
Unrealized Gain or (Loss) on Securities (182,222) 110,468
Undivided Profits 11,568,348 10,489,087
------------------- -----------------
Total Capital Accounts $ 34,940,160 $ 34,153,589
------------------- -----------------
Total Liabilities and
Capital Accounts $ 362,169,312 $ 356,067,752
=================== =================
</TABLE>
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
STATEMENT OF INCOME
FOR THREE MONTHS ENDED MARCH 31
<TABLE>
<CAPTION>
MARCH 31
-------------------------------------------------
1996 1995
---- ----
Unaudited Unaudited
<S> <C>
Interest Income:
Interest and Fee Income on Loans:
Secured by Real Estate $ 3,320,374 $ 2,984,731
To Finance Agriculture and Farmers 70,025 65,919
Commercial and Industrial 789,148 819,438
Individuals for Household and Personal 696,215 633,834
Obligations of State and Political Tax-Exempt 9,838 10,374
Interest and Dividend Income on Securities:
U. S. Treasury and U. S. Gov't Agencies 1,538,412 1,573,222
State and Political Taxable 18,752 29,925
State and Political Tax-Exempt 182,837 170,309
Other Domestic Debt Securities 9,185 9,183
Income on Federal Funds Sold 51,519 1,170
------------------- -----------------
Total Interest Income $ 6,686,305 $ 6,298,105
------------------- -----------------
Interest Expense:
Interest on Deposits:
NOW Accounts $ 263,943 $ 289,661
Money Market Accounts 646,260 699,181
Other Savings Deposits 284,343 342,394
C/D's of 100M or More 314,852 207,633
All Other Time Deposits 1,580,822 1,144,943
Interest on Federal Funds Purchased
and Repurchase Agreements 39,006 217,912
------------------- -----------------
Total Interest Expense $ 3,129,226 $ 2,901,724
------------------- -----------------
Net Interest Income $ 3,557,079 $ 3,396,381
------------------- -----------------
Provision for Loan Losses 0 40,000
------------------- -----------------
Non-Interest Income:
Fiduciary Income $ 395,337 $ 260,476
Service Charge on Deposit Accounts 161,368 152,533
Other Fee Income 236,881 165,769
All Other Non-Interest Income 17,244 19,481
------------------- -----------------
Total Non-Interest Income $ 810,830.00 $ 598,259.00
------------------- -----------------
Realized Gains (Losses) on Held to Maturity
Securities (Calls) 0 0
------------------- -----------------
Realized Gains (Losses) on Available for
Sale Securities 0 0
------------------- -----------------
Non-Interest Expense:
Salaries and Employee Benefits $ 1,301,276.00 $ 1,155,564.00
Expense of Premise and Fixed Assets 238,812 229,261
Other Non-Interest Expense 583,395 728,680
------------------- -----------------
Total Non-Interest Expense $ 2,123,483.00 $ 2,113,505
------------------- -----------------
Income Before Income Taxes $ 2,244,426.00 $ 1,841,135.00
Applicable Income Taxes 705,165 569,333
------------------- -----------------
Net Income $ 1,539,261.00 $ 1,271,802.00
=================== =================
Earnings Per Common Share $ 0.77 $ 0.64
Cash Dividends Declared Per Share
of Common Stock $ 0.23 $ 0.20
</TABLE>
2,000,000 shares outstanding as of March 31, 1996, and 2,000,000 shares
outstanding as of March 31, 1995, used as a basis to compute net income per
share and income is not on an annualized basis.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For Quarter Ended March 31, 1996
Financial Condition
During the first quarter of 1996, total deposits increased about $1.5
million compared to an increase of about $7.1 million the first quarter of 1995.
Securities sold under agreement to repurchase increased $2.9 million the first
quarter of 1996 compared to a decrease of $5.6 million the first quarter of
1995. The deposit growth and the increase in securities sold under agreement to
repurchase during the first quarter of 1996 funded an increase in the investment
portfolio of about $2.1 million and an increase in the loan portfolio of about
$3.0 million. During the first quarter of 1995 the $7.1 million growth in
deposits plus decrease of about $3.25 million in the investment portfolio funded
the loan portfolio growth of $6.5 million, the reduction of $1 million in
federal funds purchased and $5.6 million in securities sold under agreement to
repurchase.
Results of Operations:
Net income after taxes the first quarter of 1996 was $1,539,261
compared to $1,271,802 the first quarter of 1995. This is an increase of
$267,459 or 21.03% compared to an increase of $32,551 or 2.63% comparing the
first quarter of 1995 to the first quarter of 1994. Comparing the first quarter
of 1996 to the first quarter of 1995, net interest income increased $161,868,
fiduciary income increased $134,861 and service charges, other fees and
non-interest income increased $77,710. Non-interest expense for the same period
increased $9,978 , primarily due to the reduction in the FDIC insurance premium.
Comparing the first quarter of 1995 to the first quarter of 1994, net interest
income increased about $320,000, fiduciary income decreased about $62,000 and
other non-interest income decreased about $34,000. Non-interest expense for the
same period increased about $168,000.
Management does not anticipate any significant changes in the nature or
operations of the Bank's ongoing business in the second quarter of 1996.
3
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
STATEMENT OF CASH FLOWS
FOR THREE MONTHS ENDED MARCH 31
<TABLE>
<CAPTION>
1996 1995
------------------- -----------------
<S> <C>
Cash Flows From Operating Activities:
Interest Received $ 6,503,831 $ 6,118,105
Fees and Other Non-Interest Income 810,830 598,258
Interest Paid (3,105,180) (2,648,537)
Cash Paid to Suppliers and Employees (1,847,307) (2,157,348)
Income Taxes Paid 0 0
------------------- -----------------
Net Cash Provided by Operating Activities $ 2,362,174 $ 1,910,478
------------------- -----------------
Cash Flows From Investing Actitvities:
Maturities of Investment Securities 10,230,435 3,700,000
Proceeds From Calls of Investment
Securities 0 0
Purchases of Investment Securities (12,806,967) 0
Net Decrease in Interest-Bearing Deposits 0 0
Net Increase in Loans (2,955,339) (6,582,048)
Proceeds from Sale of Equipment 0 0
Capital Expenditures (190,710) (130,733)
Purchase of Other Assets (2,850) 0
Purchase of Other Real Estate 0 0
Proceeds From Sale of Other Real Estate 0 0
------------------- -----------------
Net Cash Used in Investing Activities $ (5,725,431) $ (3,012,781)
------------------- -----------------
Cash Flows From Financing Activities:
Net Increase in Certificates of Deposit 4,623,679 31,801,966
Net Decrease in Demand Deposits (3,167,802) (24,722,189)
Net Increase (Decrease) in Fed Funds Purchased 2,700,000 (1,000,000)
Net Increase (Decrease) in Securities Held
For Resale 200,000 (5,565,000)
Proceeds From Sale of Common Stock 0 0
Dividends Paid (460,000) (400,000)
------------------- -----------------
Net Cash Provided by Financing Activities $ 3,895,877 $ 114,777
------------------- -----------------
Net Increase (Decrease) in Cash and Cash Equivalents 532,620 (987,526)
Cash and Cash Equivalents at Beginning of Year 12,574,772 12,243,725
------------------- -----------------
Cash and Cash Equivalents at End of Quarter $ 13,107,392 $ 11,256,199
=================== =================
</TABLE>
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
STATEMENT OF CASH FLOWS (CONTINUED)
FOR THREE MONTHS ENDED MARCH 31
<TABLE>
<CAPTION>
1996 1995
------------------- -----------------
<S> <C>
Reconciliation of Net Income to Net Cash
Provided by Operating Activities:
Net Income $ 1,539,261 $ 1,271,802
------------------- -----------------
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 98,645 99,963
Provision for Loan Losses 0 40,000
Loss on sale of Equipment 0 675
Loss on sale of Other Real Estate 0 0
Provision for Deferred Taxes 0 0
Loss on Calls of Investment Securities 0 0
Increase in Taxes Payable 702,932 569,333
Increase in Interest Receivable (160,307) (191,362)
Increase in Interest Payable 24,046 253,187
Increase in Prepaid Expenses (73,940) (269,581)
Increase in Accrued Expenses 239,760 119,188
Amortization and Accretion (597) 18,810
Decrease in Deferred Interest (7,626) (1,537)
------------------- -----------------
Total Adjustments $ 822,913 $ 638,676
------------------- -----------------
Net Cash Provided by Operating Activities $ 2,362,174 $ 1,910,478
=================== =================
</TABLE>
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
STATEMENT OF CHANGE IN CAPITAL STOCK, SURPLUS AND UNDIVIDED PROFITS
For Three Months Ended March 31, 1996
<TABLE>
<CAPTION>
Number of Unrealized Gain
Shares Capital or (Loss) on Undivided
Outstanding Stock Surplus Securities Profits
--------------- --------------- -------------- ------------- ---------------
<S> <C>
Balance January 1, 1996 2,000,000 $ 20,000,000 $ 3,554,034 $ 110,468 $ 10,489,087
Cash Dividends (460,000)
Gain or Loss on Securities (292,690)
Net Earnings Year-To-Date 1,539,261
--------------- --------------- -------------- ------------- ---------------
Balances March 31, 1996 2,000,000 $ 20,000,000 $ 3,554,034 $ (182,222) $ 11,568,348
=============== =============== ============== ============= ===============
</TABLE>
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
STATEMENT OF CHANGE IN CAPITAL STOCK,
SURPLUS AND UNDIVIDED PROFITS
For Three Months Ended March 31, 1995
<TABLE>
<CAPTION>
Number of Unrealized Gain
Shares Capital or (Loss) on Undivided
Outstanding Stock Surplus Securities Profits
--------------- --------------- -------------- ------------- ---------------
<S> <C>
Balance January 1, 1995 2,000,000 $ 20,000,000 $ 3,554,034 $ (622,110) $ 7,114,480
Cash Dividends (400,000)
Gain or Loss on Securities 276,862
Net Earnings Year-To-Date $ 1,271,802
--------------- --------------- -------------- ---------------- ---------------
Balances March 31, 1995 2,000,000 $ 20,000,000 $ 3,554,034 $ (345,248) $ 7,986,282
=============== =============== ============== ================ ===============
</TABLE>
<PAGE>
Under the requirements of the Securities Exchange Act of 1934, the Bank
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
Date___________________ ________________________________
President
Date___________________ ________________________________
Senior Vice President & Cashier
<PAGE>
FINANCIAL STATEMENT 5(A)4
FORM F-4
QUARTERLY REPORT UNDER SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE SECOND QUARTER ENDING JUNE 30, 1996
20786-1
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
VIRGINIA
54-0913256
24 SOUTH AUGUSTA STREET
STAUNTON, VIRGINIA
24401
540-885-1232
YES X NO __
The number of shares outstanding of the registrants' stock, which is
common, was 2,000,000 as of June 30, 1996.
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
INDEX FOR FORM F-4
FOR THE SECOND QUARTER ENDING JUNE 30, 1996
Page No.
Statement of Financial Condition 1
Statement of Income for Quarter
Ended June 30 2
Statement of Income for Six Months
Ended June 30 3
Management's Discussion and Analysis of
Financial Condition and Results of Operation 4
Statement of Cash Flows for Six Months
Ended June 30 5 & 6
Statement of Change in Capital Stock, Surplus and
Undivided Profits 7
Signatures 8
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
STATEMENT OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
June 30, December 31
1996 1995
----------------- -----------------
<S> <C>
Assets:
Cash and Due From Depository
Institutions $ 13,561,534 $ 12,574,772
Interest Earning Bank Deposits 0 0
Federal Funds Sold 0 0
U.S. Treasury Securities 13,471,192 14,081,746
U.S. Agency Securities 93,707,518 94,179,910
State and Municipal Obligations 18,502,442 16,586,241
Corporate Securities 499,874 499,816
Other Securities 0 50,544
Loans Net of Unearned Income 221,564,772 212,327,045
Less Allowance for Loan Losses (2,838,380) (2,785,792)
----------------- -----------------
Net Loans 218,726,392 209,541,253
Bank Premises and Equipment Net
of Depreciation $ 4,278,239 $ 4,309,154
Accrued Interest on Loans and
Securities 3,169,284 3,083,104
Deposit Intangibles 301,639 313,465
Other Assets 1,392,462 847,747
----------------- -----------------
Total Assets $ 367,610,576 $ 356,067,752
================= =================
Liability and Capital Accounts:
Demand Deposits $ 44,246,505 $ 43,648,387
Negotiable Orders of Withdrawal 38,730,417 38,467,097
Money Market Deposit Accounts 60,307,641 67,803,776
Passbook Savings 39,434,669 38,643,617
Time Deposits 135,772,547 131,014,910
Securities Sold Under Agreements
to Repurchase 4,168,034 1,330,000
Federal Funds Purchased 8,000,000 0
Other Liabilities 1,371,192 1,006,376
----------------- -----------------
Total Liabilities $ 332,031,005 $ 321,914,163
----------------- -----------------
Capital Accounts:
Common Stock - $10.00 Par
Authorized 5,000,000
Issued 2,000,000 $ 20,000,000 $ 20,000,000
Surplus 3,554,034 3,554,034
Unrealized Gain or (Loss) on Securities (351,066) 110,468
Undivided Profits 12,376,603 10,489,087
----------------- -----------------
Total Capital Accounts $ 35,579,571 $ 34,153,589
----------------- -----------------
Total Liabilities and
Capital Accounts $ 367,610,576 $ 356,067,752
================= =================
</TABLE>
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
STATEMENT OF INCOME
<TABLE>
<CAPTION>
FOR QUARTER ENDED JUNE 30
June 30
----------------------------------------------
1996 1995
---- ----
Unaudited Unaudited
<S> <C>
Interest Income:
Interest and Fee Income on Loans:
Secured by Real Estate $ 3,305,856 $ 2,961,301
To Finance Agriculture and Farmers 70,862 72,453
Commercial and Industrial 834,975 1,052,460
Individuals for Household and Personal 737,103 672,029
Obligations of State and Political Tax-Exempt 4,777 9,680
Interest and Dividend Income on Securities:
U. S. Treasury and U. S. Gov't Agencies 1,564,388 1,493,484
State and Political Taxable 19,231 25,736
State and Political Tax-Exempt 194,819 171,912
Other Domestic Debt Securities 9,185 9,184
Equity Securities 0 0
Income on Federal Funds Sold 5,787 812
----------------- -----------------
Total Interest Income $ 6,746,983 $ 6,469,051
----------------- -----------------
Interest Expense:
Interest on Deposits:
NOW Accounts $ 277,156 $ 300,548
Money Market Accounts 575,890 666,681
Other Savings Deposits 290,605 332,386
C/D's of 100M or More 321,766 243,484
All Other Time Deposits 1,593,745 1,386,441
Interest on Federal Funds Purchased
and Repurchase Agreements 90,630 149,852
----------------- -----------------
Total Interest Expense $ 3,149,792 $ 3,079,392
----------------- -----------------
Net Interest Income $ 3,597,191 $ 3,389,659
----------------- -----------------
Provision for Loan Losses 156,000 28,000
----------------- -----------------
Non-Interest Income:
Fiduciary Income $ 170,302 $ 146,363
Service Charge on Deposit Accounts 161,642 141,387
Other Fee Income 177,106 137,251
All Other Non-Interest Income 18,027 16,195
----------------- -----------------
Total Non-Interest Income $ 527,077 $ 441,196
----------------- -----------------
Realized Gains (Losses) on Held to Maturity
Securities (Calls) 0 0
----------------- -----------------
Realized Gains (Losses) on Available for
Sale Securities 3,813 0
----------------- -----------------
Non-Interest Expense:
Salaries and Employee Benefits $ 1,302,829 $ 1,144,962
Expense of Premise and Fixed Assets 223,685 219,068
Other Non-Interest Expense 613,811 721,946
----------------- -----------------
Total Non-Interest Expense $ 2,140,325 $ 2,085,976
----------------- -----------------
Income Before Income Taxes $ 1,831,756 $ 1,716,879
Applicable Income Taxes 563,501 528,330
----------------- -----------------
Net Income $ 1,268,255 $ 1,188,549
================= =================
Earnings Per Common Share $ 0.63 $ 0.59
Cash Dividends Declared Per Share
of Common Stock $ 0.23 $ 0.20
</TABLE>
2,000,000 shares outstanding as of June 30, 1996, and 2,000,000 shares
outstanding as of June 30, 1995, used as a basis to compute net income per share
and income is not on an annualized basis.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For Quarter Ended June 30, 1996
Financial Condition
During the first six months of 1996, deposits decreased about $1.1
million compared to an increase the first six months of 1995 of $5.0 million.
Deposits the second quarter of 1996 decreased about $2.5 million compared to a
decrease of $2.1 million the second quarter of 1995. During the first six months
of 1996, securities sold under agreements to repurchase increased $2.8 million
and federal funds purchased increased $8.0 million. The increase in securities
sold under agreements to repurchase and federal funds purchased during the first
six months of 1996 funded an increase of $0.8 million growth in the investment
portfolio and an increase of $9.2 million in the loan portfolio. Loans increased
the second quarter of 1996 by $6.2 million and the investment portfolio
decreased by $1.3 million. During the second quarter of 1995, the loan portfolio
increased about $750 thousand and the investment portfolio decreased by $9.8
million and these funds were used to reduce securities sold under agreements to
repurchase and federal funds purchased.
Results of Operations:
Net income after taxes for the first six months of 1996 increased
$347,165 or 14.11 percent compared to the first six months of 1995. Net income
after taxes the second quarter of 1996 increased $79,676 or 6.70 percent
compared to the second quarter of 1995. Comparing the first six months of 1996
to 1995, net interest income increased due to the increase in volume of loans.
Non-interest income consisting of trust, service charges on deposit accounts and
other fee income have all increased due to increased volumes. Non-interest
expense has been positively impacted by the reduction of FDIC insurance
premiums. The net interest margin the first six months of 1996 has increased to
4.30 percent compared to 4.26 percent the first six months of 1995. Management
does not anticipate any significant changes in the nature or ongoing operations
of the Bank's ongoing business the third quarter of 1996.
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
FOR SIX MONTHS ENDED JUNE 30
1996 1995
----------------- -----------------
<S> <C>
Cash Flows From Operating Activities:
Interest Received $ 13,318,094 $ 12,866,397
Fees and Other Non-Interest Income 1,337,907 1,039,454
Interest Paid (6,259,020) (5,706,436)
Cash Paid to Suppliers and Employees (3,816,491) (4,063,287)
Income Taxes Paid (1,312,917) (1,136,254)
----------------- -----------------
Net Cash Provided by Operating Activities $ 3,267,573 $ 2,999,874
----------------- -----------------
Cash Flows From Investing Actitvities:
Maturities of Investment Securities 21,975,645 11,148,340
Proceeds From Calls of Investment
Securities 7,023,789 0
Purchases of Investment Securities (30,512,600) (604,073)
Net Decrease in Interest-Bearing Deposits 0 0
Net Increase in Loans (9,341,139) (7,360,332)
Proceeds from Sale of Equipment 0 0
Capital Expenditures (246,973) (244,501)
Purchase of Other Assets (11,559) 0
Purchase of Other Real Estate 0 0
Proceeds From Sale of Other Real Estate 0 0
----------------- -----------------
Net Cash Used in Investing Activities $ (11,112,837) $ 2,939,434
----------------- -----------------
Cash Flows From Financing Activities:
Net Increase in Certificates of Deposit 4,757,637 34,798,335
Net Decrease in Demand Deposits (5,843,645) (29,825,832)
Net Increase (Decrease) in Fed Funds Purchased 10,498,034 (9,790,737)
Net Increase (Decrease) in Securities Held
For Resale 340,000 0
Proceeds From Sale of Common Stock 0 0
Dividends Paid (920,000) (800,000)
----------------- -----------------
Net Cash Provided by Financing Activities $ 8,832,026 $ (5,618,234)
----------------- -----------------
Net Increase in Cash and Cash Equivalents 986,762 321,074
Cash and Cash Equivalents at Beginning of Year 12,574,772 12,243,725
----------------- -----------------
Cash and Cash Equivalents at End of Quarter $ 13,561,534 $ 12,564,799
================= =================
</TABLE>
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
STATEMENT OF CASH FLOWS (CONTINUED)
<TABLE>
<CAPTION>
For Six Months Ended June 30
1996 1995
----------------- -----------------
<S> <C>
Reconciliation of Net Income to Net Cash
Provided by Operating Activities:
Net Income $ 2,807,516 $ 2,460,351
----------------- -----------------
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 197,311 202,822
Provision for Loan Losses 156,000 68,000
Loss on sale of Equipment 165 675
Loss on sale of Other Real Estate 0 0
Provision for Deferred Taxes 0 0
Realized Gains on Available for Sale Securities (3,813) 0
Increase in Taxes Payable 0 0
(Increase) Decrease in Interest Receivable (86,180) 75,141
Increase in Interest Payable 19,998 274,680
Increase in Prepaid Expenses (180,975) (354,243)
Increase in Accrued Expenses 358,202 236,524
Amortization and Accretion 12,733 38,539
Decrease in Deferred Interest (13,384) (2,615)
----------------- -----------------
Total Adjustments $ 460,057 $ 539,523
----------------- -----------------
Net Cash Provided by Operating Activities $ 3,267,573 $ 2,999,874
================= =================
</TABLE>
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
STATEMENT OF CHANGE IN CAPITAL STOCK,
SURPLUS AND UNDIVIDED PROFITS
<TABLE>
<CAPTION>
For Six Months Ended June 30, 1996
Number of Unrealized Gain
Shares Capital or (Loss) on Undivided
Outstanding Stock Surplus Securities Profits
------------- ----------------- -------------- --------------- ---------------
<S> <C>
Balance January 1, 1996 2,000,000 $ 20,000,000 $ 3,554,034 $ 110,468 $ 10,489,087
Cash Dividends (920,000)
Gain or Loss on Securities (461,534)
Net Earnings Year-To-Date 2,807,516
------------ ---------------- -------------- --------------- -----------------
Balances June 30, 1996 2,000,000 $ 20,000,000 $ 3,554,034 $ (351,066) $ 12,376,603
============ ================ ============== =============== =================
</TABLE>
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
STATEMENT OF CHANGE IN CAPITAL STOCK,
SURPLUS AND UNDIVIDED PROFITS
For Six Months Ended June 30, 1995
<TABLE>
<CAPTION>
Number of Unrealized Gain
Shares Capital or (Loss) on Undivided
Outstanding Stock Surplus Securities Profits
------------- ----------------- -------------- --------------- ---------------
<S> <C>
Balance January 1, 1995 2,000,000 $ 20,000,000 $ 3,554,034 $ (622,110) $ 7,114,480
Cash Dividends (800,000)
Gain or Loss on Securities 500,678
Net Earnings Year-To-Date 2,460,351
------------ ---------------- -------------- --------------- ---------------
Balances June 30, 1995 2,000,000 $ 20,000,000 $ 3,554,034 $ (121,432) $ 8,774,831
============ ================ ============== =============== ===============
</TABLE>
<PAGE>
Under the requirements of the Securities Exchange Act of 1934, the Bank
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
Date________________ ________________________________
President
Date________________ ________________________________
Senior Vice President & Cashier
FINANCIAL STATEMENT 5(A)5
FORM F-4
QUARTERLY REPORT UNDER SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE THIRD QUARTER ENDING SEPTEMBER 30, 1996
20786-1
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
VIRGINIA
54-0913256
24 SOUTH AUGUSTA STREET
STAUNTON, VIRGINIA
24401
540-885-1232
YES X NO __
The number of shares outstanding of the registrants' stock, which is
common, was 2,000,000 as of September 30, 1996.
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
INDEX FOR FORM F-4
FOR THE THIRD QUARTER ENDING SEPTEMBER 30, 1996
Page No.
Consolidated Statement of Financial Condition 1
Consolidated Statement of Earnings for Quarter
Ended September 30 2
Consolidated Statement of Earnings for Nine Months
Ended September 30 3
Management's Discussion and Analysis of
Financial Condition and Results of Operations 4
Consolidated Statement of Cash Flows for Nine Months
Ended September 30 5 & 6
Consolidated Statement of Change in Capital Stock,
Surplus & Undivided Profits 7
Signatures 8
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
CONSOLIDATED STATEMENT OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
----------------- ------------------
<S> <C>
Assets:
Cash and Due From Depository
Institutions $ 15,245,496 $ 12,574,772
Interest Earning Bank Deposits 0 0
Federal Funds Sold 0 0
U.S. Treasury Securities 13,493,095 14,081,746
U.S. Agency Securities 88,917,898 94,179,910
State and Municipal Obligations 17,661,193 16,586,241
Corporate Securities 499,904 499,816
Other Securities 0 50,544
Loans Net of Unearned Income 232,720,502 212,327,045
Less Allowance for Loan Losses (2,999,207) (2,785,792)
----------------- ------------------
Net Loans 229,721,295 209,541,253
Bank Premises and Equipment Net
of Depreciation $ 4,388,731 $ 4,309,154
Accrued Interest on Loans and
Securities 3,208,141 3,083,104
Deposit Intangibles 295,726 313,465
Other Assets 1,361,197 847,747
----------------- ------------------
Total Assets $ 374,792,676 $ 356,067,752
================= ==================
Liability and Capital Accounts:
Demand Deposits $ 49,869,417 $ 43,648,387
Negotiable Orders of Withdrawal 38,560,287 38,467,097
Money Market Deposit Accounts 58,409,684 67,803,776
Passbook Savings 36,914,925 38,643,617
Time Deposits 149,595,547 131,014,910
Securities Sold Under Agreements
to Repurchase 3,425,034 1,330,000
Federal Funds Purchased 0 0
Other Liabilities 1,615,894 1,006,376
----------------- ------------------
Total Liabilities $ 338,390,788 $ 321,914,163
----------------- ------------------
Capital Accounts:
Common Stock - $10.00 Par
Authorized 5,000,000
Issued 2,000,000 $ 20,000,000 $ 20,000,000
Surplus 3,554,034 3,554,034
Unrealized Gain or (Loss) on Securities (292,726) 110,468
Undivided Profits 13,140,580 10,489,087
----------------- ------------------
Total Capital Accounts $ 36,401,888 $ 34,153,589
----------------- ------------------
Total Liabilities and
Capital Accounts $ 374,792,676 $ 356,067,752
================= ==================
</TABLE>
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
CONSOLIDATED STATEMENT OF INCOME
FOR QUARTER ENDED SEPTEMBER 30
<TABLE>
<CAPTION>
September 30, 1997
------------------------------------------------------------
1996 1995
---- ----
Unaudited Unaudited
<S> <C>
Interest Income:
Interest and Fee Income on Loans:
Secured by Real Estate $ 3,448,088 $ 3,225,649
To Finance Agriculture and Farmers 77,834 78,682
Commercial and Industrial 822,374 847,493
Individuals for Household and Personal 791,790 685,688
Obligations of State and Political Tax-Exempt 6,509 8,984
Interest and Dividend Income on Securities:
U. S. Treasury and U. S. Gov't Agencies 1,521,927 1,428,500
State and Political Taxable 20,847 22,360
State and Political Tax-Exempt 185,837 172,883
Other Domestic Debt Securities 9,186 9,184
Equity Securities 0 0
Income on Federal Funds Sold 16,048 58,255
----------------- ------------------
Total Interest Income $ 6,900,440 $ 6,537,678
----------------- ------------------
Interest Expense:
Interest on Deposits:
NOW Accounts 271,404 $ 304,522
Money Market Accounts 577,327 685,630
Other Savings Deposits 282,050 331,702
C/D's of 100M or More 311,712 265,654
All Other Time Deposits 1,684,670 1,504,903
Interest on Federal Funds Purchased
and Repurchase Agreements 84,496 39,432
----------------- -----------------
Total Interest Expense $ 3,211,659 $ 3,131,843
---------------- -----------------
Net Interest Income $ 3,688,781 $ 3,405,835
---------------- -----------------
Provision for Loan Losses 225,000 115,000
---------------- -----------------
Non-Interest Income:
Fiduciary Income $ 186,391 $ 201,507
Service Charge on Deposit Accounts 163,275 167,054
Other Fee Income 192,968 150,052
All Other Non-Interest Income 19,536 18,211
---------------- ------------------
Total Non-Interest Income $ 562,170 $ 536,824
----------------- ------------------
Realized Gains (Losses) on Held to Maturity
Securities (Calls) 0 0
----------------- ------------------
Realized Gains (Losses) on Available for
Sale Securities 0 0
----------------- ------------------
Non-Interest Expense:
Salaries and Employee Benefits $ 1,340,893 $ 1,187,552
Expense of Premise and Fixed Assets 227,145 250,322
Other Non-Interest Expense 630,671 528,137
----------------- ------------------
Total Non-Interest Expense $ 2,198,709 $ 1,966,011
----------------- ------------------
Income Before Income Taxes $ 1,827,242 $ 1,861,648
Applicable Income Taxes 563,263 577,949
----------------- ------------------
Net Income $ 1,263,979 $ 1,283,699
================= ==================
Earnings Per Common Share $ 0.63 $ 0.64
Cash Dividends Declared Per Share
of Common Stock $ 0.25 $ 0.20
</TABLE>
2,000,000 shares outstanding as of September 30, 1996, and 2,000,000 shares
outstanding as of September 30, 1995, used as a basis to compute net income per
share and income is not on an annualized basis.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For Quarter Ended September 30, 1996
Financial Condition
During the first nine months of 1996, deposits increased $13.4 million
compared to growth of $15.5 million the first nine months of 1995. The third
quarter of 1996 deposits increased $14.9 million compared to an increase of
$10.6 million the third quarter of 1995. The investment portfolio decreased
about $4.8 million the first nine months of 1996 compared to a decrease of 6.4
million the first nine months of 1995. During the third quarter of 1996 the
investment portfolio decreased $5.6 million compared to a decrease of $6.4
million the third quarter of 1995. Securities sold under agreements to
repurchase increased about $2.1 million during the first nine months of 1996
compared to an increase of about $2.0 million the first six months of 1995. The
increase in deposits, securities sold under agreements to repurchase and the
decrease in the investment portfolio funded an increase of $20.4 million growth
in the loan portfolio the first nine months of 1996 compared to an increase of
$9.7 million growth for the same period in 1995. Loans increased the third
quarter of 1996 by approximately $11.2 million compared to a $2.4 million growth
the third quarter of 1995. Management does not anticipate any material changes
in the financial condition during the fourth quarter of 1996.
Results of Operations:
Net income after taxes the first nine months of 1996 increased $327,444
or 8.75 percent compared to the first nine months of 1995. The third quarter of
1996, net income after taxes decreased $19,721 compared to the third quarter of
1995. Net interest income before provision for loan losses increased $651,176
during the first nine months of 1996 compared to the same period in 1995. During
the third quarter of 1996 net interest income before provision for loan losses
increased $282,946 compared to the third quarter of 1995. These increases were
due to increases in volume as the interest margin was 4.30 percent in 1996 and
4.28 percent in 1995. Due to the increase in loan volume the provision for loan
losses increased $198,000 the first nine months of 1996 and by $110,000 the
third quarter of 1996 compared to like periods in 1995. Non-interest income
increased the first nine months of 1996 by $323,798 or 20.54 percent in the
areas of fiduciary, service charge and fee income compared to the first nine
months of 1995, while non-interest expenses for the same period increased by
$297,025 or 4.82 percent.
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR NINE MONTHS ENDED SEPTEMBER 30
<TABLE>
<CAPTION>
1996 1995
----------------- ------------------
<S> <C>
Cash Flows From Operating Activities:
Interest Received $ 20,190,954 $ 19,210,061
Fees and Other Non-Interest Income 1,884,948 1,576,279
Interest Paid (9,407,576) (8,809,145)
Cash Paid to Suppliers and Employees (5,613,578) (5,517,007)
Income Taxes Paid (1,931,458) (1,708,827)
----------------- ------------------
Net Cash Provided by Operating Activities $ 5,123,290 $ 4,751,361
----------------- ------------------
Cash Flows From Investing Actitvities:
Maturities of Investment Securities 30,905,645 19,819,020
Proceeds From Calls of Investment
Securities 7,023,789 0
Purchases of Investment Securities (33,744,850) (12,597,468)
Net Decrease in Interest-Bearing Deposits 0 0
Net Increase in Loans (20,561,042) (9,903,644)
Proceeds from Sale of Equipment 0 0
Capital Expenditures (459,052) (261,635)
Purchase of Other Assets (64,162) 0
Purchase of Other Real Estate 0 0
Proceeds From Sale of Other Real Estate 0 0
----------------- ------------------
Net Cash Used in Investing Activities $ (16,899,672) $ (2,943,727)
----------------- ------------------
Cash Flows From Financing Activities:
Net Increase in Certificates of Deposit 18,580,637 40,016,081
Net Decrease in Demand Deposits (4,808,565) (24,480,731)
Net Increase (Decrease) in Fed Funds Purchased 1,715,034 (14,680,737)
Net Increase in Securities Held For Resale 380,000 0
Proceeds From Sale of Common Stock 0 0
Dividends Paid (1,420,000) (1,200,000)
----------------- ------------------
Net Cash Provided by Financing Activities $ 14,447,106 $ (345,387)
----------------- ------------------
Net Increase in Cash and Cash Equivalents 2,670,724 1,462,247
Cash and Cash Equivalents at Beginning of Year 12,574,772 12,243,725
----------------- ------------------
Cash and Cash Equivalents at End of Quarter $ 15,245,496 $ 13,705,972
================= ==================
</TABLE>
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
FOR NINE MONTHS ENDED SEPTEMBER 30
<TABLE>
<CAPTION>
1996 1995
----------------- ------------------
<S> <C>
Reconciliation of Net Income to Net Cash
Provided by Operating Activities:
Net Income $ 4,071,494 $ 3,744,050
----------------- ------------------
Adjustments to Reconcile Net Income to Net Cash
Provided by Operating Activities:
Depreciation 296,483 307,425
Provision for Loan Losses 381,000 183,000
Loss on sale of Equipment 2,579 778
Loss on sale of Other Real Estate 0 0
Provision for Deferred Taxes 0 0
Realized Gains on Available for Sale Securities (3,813) 0
Increase in Taxes Payable 0 0
Increase in Interest Receivable (125,036) (143,171)
Increase in Interest Payable 83,101 303,814
Increase in Prepaid Expenses (121,751) (93,995)
Increase in Accrued Expenses 528,106 383,324
Amortization and Accretion 27,943 56,531
(Decrease) Increase in Deferred Interest (1,688) 9,605
Increase in Fees Receivable (15,128) 0
----------------- ------------------
Total Adjustments $ 1,051,796 $ 1,007,311
----------------- ------------------
Net Cash Provided by Operating Activities $ 5,123,290 $ 4,751,361
================= ==================
</TABLE>
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
CONSOLIDATED STATEMENT OF INCOME
FOR NINE MONTHS ENDED SEPTEMBER 30
<TABLE>
<CAPTION>
September 30,
------------------------------------------------------------
1996 1995
---- ----
Unaudited Unaudited
<S> <C>
Interest Income:
Interest and Fee Income on Loans:
Secured by Real Estate $ 10,074,318 $ 9,171,680
To Finance Agriculture and Farmers 218,721 217,054
Commercial and Industrial 2,446,497 2,719,391
Individuals for Household and Personal 2,225,108 1,991,551
Obligations of State and Political Tax-Exempt 21,124 29,038
Interest and Dividend Income on Securities:
U. S. Treasury and U. S. Gov't Agencies 4,624,727 4,495,206
State and Political Taxable 58,830 78,023
State and Political Tax-Exempt 563,493 515,104
Other Domestic Debt Securities 27,556 27,551
Equity Securities 0 1,170
Income on Federal Funds Sold 73,354 59,066
----------------- ------------------
Total Interest Income $ 20,333,728 $ 19,304,834
----------------- ------------------
Interest Expense:
Interest on Deposits:
NOW Accounts $ 812,503 $ 894,731
Money Market Accounts 1,799,477 2,051,493
Other Savings Deposits 856,998 1,006,481
C/D's of 100M or More 948,330 716,771
All Other Time Deposits 4,859,237 4,036,288
Interest on Federal Funds Purchased
and Repurchase Agreements 214,132 407,195
----------------- ------------------
Total Interest Expense $ 9,490,677 $ 9,112,959
----------------- ------------------
Net Interest Income $ 10,843,051 $ 10,191,875
----------------- ------------------
Provision for Loan Losses 381,000 183,000
----------------- ------------------
Non-Interest Income:
Fiduciary Income $ 752,030 $ 608,347
Service Charge on Deposit Accounts 486,285 460,973
Other Fee Income 606,954 453,072
All Other Non-Interest Income 54,807 53,886
----------------- ------------------
Total Non-Interest Income $ 1,900,076 $ 1,576,278
----------------- ------------------
Realized Gains (Losses) on Held to Maturity
Securities (Calls) 0 0
----------------- ------------------
Realized Gains (Losses) on Available for
Sale Securities 3,813 0
----------------- ------------------
Non-Interest Expense:
Salaries and Employee Benefits $ 3,944,998 3,488,078
Expense of Premise and Fixed Assets 689,642 698,650
Other Non-Interest Expense 1,827,877 1,978,763
----------------- ------------------
Total Non-Interest Expense $ 6,462,517 $ 6,165,491
----------------- ------------------
Income Before Income Taxes $ 5,903,423 $ 5,419,662
Applicable Income Taxes 1,831,929 1,675,612
----------------- ------------------
Net Income $ 4,071,494 $ 3,744,050
================= ==================
Earnings Per Common Share $ 2.04 $ 1.87
Cash Dividends Declared Per Share
of Common Stock $ 0.71 $ 0.60
</TABLE>
2,000,000 shares outstanding as of September 30, 1996, and 2,000,000 shares
outstanding as of September 30, 1995, used as a basis to compute net income per
share and income is not on an annualized basis.
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
CONSOLIDATED STATEMENT OF CHANGE IN CAPITAL STOCK,
SURPLUS AND UNDIVIDED PROFITS
<TABLE>
<CAPTION>
For Nine Months Ended September 30, 1996
Number of Unrealized Gain
Shares Capital or (Loss) on Undivided
Outstanding Stock Surplus Securities Profits
-------------------------------- --------------- -------------------- ----------------
<S> <C>
Balance January 1, 1996 2,000,000 $ 20,000,000 $ 3,554,034 $ 110,468 $ 10,489,087
Cash Dividends (1,420,000)
Gain or Loss on Securities (403,194)
Net Earnings Year-To-Date 4,071,493
------------ ---------------- --------------- -------------------- ----------------
Balances September 30, 1996 2,000,000 $ 20,000,000 $ 3,554,034 $ (292,726) $ 13,140,580
============ ================ =============== ==================== ================
</TABLE>
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
CONSOLIDATED STATEMENT OF CHANGE IN CAPITAL STOCK,
SURPLUS AND UNDIVIDED PROFITS
For Nine Months Ended September 30, 1995
<TABLE>
<CAPTION>
Number of Unrealized Gain
Shares Capital or (Loss) on Undivided
Outstanding Stock Surplus Securities Profits
-------------------------------- --------------- -------------------- ----------------
<S> <C>
Balance January 1, 1995 2,000,000 $ 20,000,000 $ 3,554,034 $ (622,110) $ 7,114,480
Cash Dividends (1,200,000)
Gain or Loss on Securities 539,037
Net Earnings Year-To-Date 3,744,050
------------ ---------------- --------------- -------------------- ------------------
Balances September 30, 1995 2,000,000 $ 20,000,000 $ 3,554,034 $ (83,073) $ 9,658,530
============ ================ =============== ==================== ==================
</TABLE>
<PAGE>
Under the requirements of the Securities Exchange Act of 1934, the Bank
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
Date_______________ _________________________________________
President
Date_______________ _________________________________________
Senior Vice President & Cashier
EXHIBIT 3.1
Appendix II to
Reorganization Agreement
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
VIRGINIA FINANCIAL CORPORATION
I. NAME
The name of the Corporation is:
Virginia Financial Corporation
II. PURPOSE
The Corporation shall be organized for the purpose of engaging in any
lawful business for a corporation organized under the laws of Virginia.
III. CAPITAL STOCK
Section 1. Number. The Corporation shall have authority to issue five
million (5,000,000) shares of Common Stock, par value $5.00 per share.
Section 2. Voting. The holders of Common Stock shall be entitled to one
vote per share on all matters as to which a stockholder vote is taken.
Section 3. No Preemptive Rights. No holder of capital stock of the
corporation of any class shall have any preemptive right to subscribe to or
purchase (i) any shares of capital stock of the Corporation, (ii) any securities
convertible into such shares or (iii) any options, warrants or rights to
purchase such shares or securities convertible into any such shares.
2/25/97
BYLAWS
OF
VIRGINIA FINANCIAL CORPORATION
(Adopted: February 25, 1997)
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I - SHARES............................................................................... 1
Section 1. Certificates......................................................... 1
Section 2. Signatures........................................................... 1
Section 3. Duplicate Certificates............................................... 1
Section 4. Transfer of Shares................................................... 1
Section 5. Restrictions on Transfer............................................. 1
ARTICLE II - SHAREHOLDERS........................................................................ 1
Section 1. Holders of Shares.................................................... 1
Section 2. Meetings Generally................................................... 2
Section 3. Annual Meetings...................................................... 2
Section 4. Special Meetings..................................................... 2
Section 5. Notice............................................................... 2
Section 6. Waiver of Notice..................................................... 2
Section 7. Action Without Meeting............................................... 2
Section 8. Determination of Shareholders of Record.............................. 2
Section 9. Conduct of Meetings.................................................. 3
Section 10. Proxies.............................................................. 3
Section 11. Procedure at Meetings................................................ 3
Section 12. Quorum and Voting.................................................... 3
Section 13. Adjournments......................................................... 3
ARTICLE III - DIRECTORS.......................................................................... 3
Section 1. General Powers....................................................... 3
Section 2. Number and Qualifications............................................ 4
Section 3. Regular Meetings..................................................... 4
Section 4. Special Meetings..................................................... 4
Section 5. Notice............................................................... 4
Section 6. Waiver of Notice..................................................... 4
Section 7. Action Without Meeting............................................... 4
Section 8. Conduct of Meetings.................................................. 4
Section 9. Procedure at Meetings................................................ 4
Section 10. Participation by Conference Telephone................................ 4
Section 11. Quorum............................................................... 4
Section 12. Executive Committee.................................................. 5
Section 13. Other Committees..................................................... 5
Section 14. Removal.............................................................. 5
Section 15. Vacancies............................................................ 5
Section 16. Nominations of Director Candidates................................... 5
Section 17. Shareholder Proposals................................................ 6
Section 18. Resignation.......................................................... 6
Section 19. Conflicts of Interest................................................ 6
ARTICLE IV - OFFICERS............................................................................ 6
Section 1. Generally............................................................ 6
Section 2. Chairman of the Board of Directors................................... 7
Section 3 Vice Chairman of the Board of Directors.............................. 7
Section 4. President............................................................ 7
Section 5. Vice Presidents...................................................... 7
Section 6. Secretary............................................................ 7
Section 7. Treasurer............................................................ 7
- 1 -
<PAGE>
Page
Section 8. Delegation of Power.................................................. 8
Section 9. Term of Office....................................................... 8
Section 10. Resignation.......................................................... 8
Section 11. Removal.............................................................. 8
Section 12. Execution of Instruments............................................. 8
Section 13. Proxies.............................................................. 8
ARTICLE V - MISCELLANEOUS........................................................................ 8
Section 1. Seal................................................................. 8
Section 2. Amendments........................................................... 8
Section 3. Fiscal Year and Accounting........................................... 8
Section 4. Interpretative Matters............................................... 9
</TABLE>
- 2 -
<PAGE>
BYLAWS
OF
VIRGINIA FINANCIAL CORPORATION
ARTICLE I
SHARES
Section 1. Certificates. All shares issued by the Corporation shall,
when fully paid, be represented by certificates in such form as may be required
by law and approved by the Board of Directors. Share certificates shall, subject
to the provisions of Section 2 of this Article, be signed by the Chairman of the
Board of Directors, the Vice Chairman, the President or a Vice President and by
the Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary or any other officer authorized by resolution of the Board of
Directors. Each share certificate may, but need not, be sealed with the seal of
the Corporation or a facsimile thereof.
Section 2. Signatures. The signatures of the officers upon a share
certificate may be facsimiles if the certificate is countersigned by a transfer
agent, or registered by a registrar, other than the Corporation itself or an
employee of the Corporation. If any person who signed, either manually or by
facsimile, a share certificate no longer holds office when such certificate is
issued, the certificate is nevertheless valid.
Section 3. Duplicate Certificates. In case of the loss, mutilation or
destruction of a share certificate, a duplicate may be issued upon such terms,
and bearing such legend, if any, as the Board of Directors may lawfully
prescribe.
Section 4. Transfer of Shares. A transfer of shares shall be made on
the share transfer books of the Corporation only upon surrender of the
certificates representing the shares transferred, endorsed or accompanied by a
written assignment signed by the holder of record or by his duly authorized
attorney-in-fact. The Board of Directors may from time to time make such
reasonable regulations governing the transfer of shares as it may deem necessary
or proper.
Section 5. Restrictions on Transfer. A transfer of shares shall be
made only in accordance with any provision of the articles of incorporation or
these bylaws.
ARTICLE II
SHAREHOLDERS
Section 1. Holders of Shares. Only shareholders of record on the share
transfer books of the Corporation shall be entitled to be treated by the
Corporation as the holders of the shares standing in their respective names,
and, except to the extent, if any, required by law, the Corporation shall not be
obligated to recognize any equitable or other claim to or interest in any share
on the part of any other person, whether or not it shall have express or other
notice hereof.
Section 2. Meetings Generally. Meetings of shareholders shall be held
at the registered office or the principal office of the Corporation or at such
other place, within or without the Commonwealth of Virginia, as the Board of
Directors may designate from time to time. At least ten days before each
meeting, the officer or agent having charge of the share transfer books of the
Corporation shall prepare a complete list of the shareholders entitled to vote
at such meeting or any adjournment thereof, with the address and number of
shares held by each, arranged by voting group and within each voting group by
class or series of shares. For a period of ten days prior to the meeting the
list of shareholders kept on file at the registered
- 1 -
<PAGE>
office or the principal office of the Corporation or at the office of its
transfer agent or registrar shall be subject to inspection by any shareholders
at any time during usual business hours. Such list shall also be produced and
kept open at the time and place of the meeting and shall be subject to the
inspection of any shareholder during the whole time of the meeting for the
purposes thereof.
Section 3. Annual Meetings. An annual meeting of the shareholders shall
be held on the Monday before the last Tuesday in April of each year, or on such
other date set by the Board of Directors, for the purpose of electing directors
and transacting such other business as may properly come before the meeting.
At the annual meeting, no business shall be transacted and no corporate action
shall be taken other than standard annual corporate actions, actions stated in
the notice of the meeting, and actions which the chairman of the meeting has
accepted for action.
Section 4. Special Meetings. A special meeting of the shareholders
shall be held on the call of the Chairman of the Board of Directors, the
President, a majority of the Board of Directors or by the holders of twenty
percent (20%) of the outstanding shares of the Corporation. At a special
meeting, no business shall be transacted and no corporate action shall be taken
other than actions stated in the notice of the meeting, or actions accepted for
action by the chairman of the meeting.
Section 5. Notice. Written notice of the date, time and place of the
meeting and, in the case of a special meeting (or if required by law, the
articles of incorporation or these bylaws), the purpose or purposes for which
the meeting is called shall be given to each shareholder entitled to vote at the
meeting. Such notice shall be given either by personal delivery or by mail, by
or at the direction of the officer or persons calling the meeting, not more than
60 days nor less than ten days before the date of the meeting (except that such
notice shall be given to each shareholder, whether or not entitled to vote, not
less than 25 days before a meeting called to act on an amendment to the articles
of incorporation, a plan of merger or share exchange, a proposed sale, lease,
exchange or other disposition of all, or substantially all, of the property of
the Corporation other than in the usual and regular course of business, or the
dissolution of the Corporation, which notice shall be accompanied by a copy of
the proposed amendment, plan of merger or share exchange, agreement of sale or
plan of dissolution, as the case may be). Notice to a shareholder shall be
deemed given when mailed postage prepaid, correctly addressed, to the
shareholder at his address as shown in the current record of shareholders of the
Corporation.
A shareholder's attendance at a meeting waives objection to: (i) lack
of notice or defective notice of the meeting, unless at the beginning of the
meeting he objects to holding the meeting or transacting business at the
meeting; and (ii) consideration of a particular matter at the meeting that is
not within the purpose or purposes described in the notice of the meeting,
unless he objects to considering the matter when it is presented.
Section 6. Waiver of Notice. Notice of any meeting may be waived before
or after the date and time of the meeting in a writing signed by the shareholder
entitled to notice and delivered to the Secretary for inclusion in the minutes
of the meeting or filing with the corporate records.
Section 7. Action Without Meeting. Any action required or permitted by
law to be taken at a shareholders' meeting may be taken without a meeting if the
action is taken by all of the shareholders entitled to vote on the action. The
action shall be evidenced by one or more written consents describing the action
taken, signed by all the shareholders entitled to vote thereon and delivered to
the Secretary for inclusion in the minutes or filing with the corporate records.
Section 8. Determination of Shareholders of Record. The share transfer
books may be closed by order of the Board of Directors for not more than 70 days
for the purpose of determining shareholders entitled to notice of or to vote at
any meeting of the shareholders or any adjournment thereof (or entitled to
receive any distribution or in order to make a determination of shareholders for
any other purpose). In lieu of closing such books, the Board of Directors may
fix in advance as the record date for any such determination a date not more
than 70 days before the date on which such meeting is to be held (or such
distribution made or other action requiring such determination is to be taken).
If the books are not thus
- 2 -
<PAGE>
closed or the record date is not thus fixed, the record date shall be the close
of business on the day before the effective date of the notice to shareholders.
Section 9. Conduct of Meetings. The Chairman of the Board of Directors,
or in his absence, the Vice Chairman, shall act as chairman of and preside over
meetings of the shareholders. In the event both the Chairman and the Vice
Chairman are unavailable, the President shall act as chairman of and preside
over meetings of the shareholders. If no such officer is present, the meeting
shall elect a chairman. The Secretary, or in his absence the Assistant
Secretary, shall act as the secretary of such meetings. If no such officer is
present, the chairman shall appoint a secretary of the meeting. The order of
business at the annual meeting of shareholders and as far as is practicable at
any other meetings of the shareholders shall be determined by the chairman.
Section 10. Proxies. A shareholder may appoint a proxy to vote or
otherwise act for him by signing and dating an appointment form, either
personally or by his attorney-in-fact. No appointment of proxy shall be valid
after the expiration of 11 months from the date of its execution, unless
otherwise provided therein. Every appointment of proxy shall be revocable by the
shareholder executing it, unless the appointment form conspicuously states that
it is irrevocable and that it is coupled with an interest in ac cordance with
law.
Section 11. Procedure at Meetings. The procedure at meetings of the
shareholders shall be determined by the chairman, and (subject to the provisions
of Section 9 of this Article) the vote on all questions before any meeting shall
be taken in such manner as the chairman prescribes. However, upon the demand of
the holders in the aggregate of at least twenty percent of all the votes
entitled to be cast on any issue proposed to be considered at the meeting, such
vote shall be by ballot.
Section 12. Quorum and Voting. A quorum at any meeting of shareholders
shall be a majority of the votes entitled to be cast, represented in person or
by proxy. If a quorum exists, action on a matter is approved by a majority of
the votes cast within the voting group, unless a greater vote is required by law
or the articles of incorporation (except that in elections of directors those
receiving the greatest number of votes shall be elected even though less than a
majority).
Section 13. Adjournments. A majority of the votes entitled to be cast
at any meeting, represented in person or by proxy, even though less than a
quorum, may adjourn the meeting to a fixed time and place. If a meeting of the
shareholders is adjourned to a date more than 120 days after the date fixed for
the original meeting, notice of the adjourned meeting shall be given as in the
case of the original meeting. If a meeting is adjourned for less than 120 days,
no notice of the date, time or place of the adjourned meeting or, in the case of
a special meeting, the purpose or purposes for which the meeting is called, need
be given other than by announcement at the meeting at which the adjournment is
taken, prior to such adjournment. If a quorum shall be present at any adjourned
meeting, any business may be transacted which might have been transacted if a
quorum had been present at the meeting as originally called.
ARTICLE III
DIRECTORS
Section 1. General Powers. Except as expressly provided in the Articles
of Incorporation or these bylaws, all corporate powers shall be exercised by or
under the authority of, and the business and affairs of the Corporation managed
under the direction of, the Board of Directors.
Section 2. Number and Qualifications. The Board of Directors shall
consist of a minimum of 5 and a maximum of 15 individuals. Directors need not be
residents of Virginia or shareholders of the Corporation. Directors shall be
elected at each annual meeting of the shareholders and may be elected at any
special meeting of the shareholders.
- 3 -
<PAGE>
Section 3. Regular Meetings. Regular meetings of the Board of Directors
may be held without notice at the registered office or principal office of the
Corporation or at such other place, within or without the Commonwealth of
Virginia, as the Board of Directors may designate from time to time. A regular
meeting of the Board of Directors shall be held as soon as practicable after
each annual meeting of the shareholders for the purpose of appointing officers
and transacting such other business as may properly come before the meeting.
Section 4. Special Meetings. Special meetings of the Board of
Directors may be called at any time by the Chairman of the Board of Directors,
the Vice Chairman, the President, or by a majority of the Board of Directors.
Section 5. Notice. Written notice of the date, time and place of
special meetings shall be given to each director either by personal delivery or
by mail, by or at the direction of the officer or directors calling the meeting,
to the address of such director as it appears in the records of the Corporation
not less than ten days before the date of the meeting. Neither the business to
be transacted at, nor the purpose of, any meeting of the Board of Directors need
be specified in the notice or any waiver of notice of such meeting.
A director's attendance at or participation in a meeting waives any
required notice to him of the meeting unless he at the beginning of the meeting
or promptly upon his arrival objects to holding the meeting or transacting
business at the meeting and does not thereafter vote for or assent to the action
taken at the meeting.
Section 6. Waiver of Notice. Notice of any meeting may be waived before
or after the date and time of the meeting in a writing signed by the director
entitled to notice and delivered to the Secretary of the Corporation for
inclusion in the minutes of the meeting or filing with the corporate records.
Section 7. Action Without Meeting. Any action required or permitted by
law to be taken at a meeting of the Board of Directors may be taken without a
meeting if the action is taken by all of the members of the Board of Directors.
The action shall be evidenced by one or more written consents stating the action
taken, signed by each director either before or after the action taken, and
included in the minutes or filed with the corporate records reflecting the
action taken. Action taken under this section is effective when the last
director signs the consent unless the consent specifies a different effective
date, in which event the action taken is effective as of the date specified
therein provided the consent states the date of execution by each director. A
consent signed under this section has the effect of a meeting vote and may be
described as such in any document.
Section 8. Conduct of Meetings. The Chairman of the Board of Directors,
or in his absence the Vice Chairman, shall act as chairman of and preside over
meetings of the Board of Directors. In the event both the Chairman and the Vice
Chairman are unavailable, the President shall act as chairman of and preside
over meetings of the Board of Directors. Chairman shall appoint a clerk for the
meetings.
Section 9. Procedure at Meetings. The procedure at meetings of the
Board of Directors shall be determined by the chairman, and (subject to the
provisions of Section 19 of this Article) the vote on all matters before any
meeting shall be taken in such manner as the chairman may prescribe.
Section 10. Participation by Conference Telephone. The Board of
Directors may permit any or all directors to participate in a meeting of the
directors by, or conduct the meeting through the use of, conference telephone or
any other means of communication by which all directors participating may
simultaneously hear each other during the meeting. A director participating in a
meeting by such means shall be deemed to be present in person at the meeting.
Section 11. Quorum. A quorum at any meeting of the Board of Directors
shall be a majority of the number of directors fixed or prescribed by these
bylaws or, if no number is prescribed, the number of directors in office
immediately before the meeting begins. The affirmative vote of the majority of
the directors present at a meeting at which a quorum is present shall be the act
of the Board of Directors.
- 4 -
<PAGE>
Section 12. Executive Committee. The Board of Directors, by resolution
adopted by a majority of the number of directors fixed by these Bylaws, may
elect an Executive Committee which shall consist of not less than 3 directors,
including the Chairman of the Board and the Chief Executive Officer. When the
Board of Directors is not in session, the Executive Committee shall have all
power vested in the Board of Directors by law, by the Articles of Incorporation,
or by these Bylaws, provided that the Executive Committee shall not have power
to declare dividends, to approve an amendment to the Articles of Incorporation
or a plan of merger or consolidation, or to take any action prohibited by
express resolution of the Board of Directors. The Executive Committee shall
report at the next regular or special meeting of the Board of Directors all
action which the Executive Committee may have taken on behalf of the Board since
the last regular or special meeting of the Board of Directors.
Section 13. Other Committees. The Board of Directors may create one or
more committees and appoint two or more members of the board to serve on them at
the pleasure of the Board of Directors. Any such committee, to the extent
specified by the Board of Directors, may exercise the authority that may be
exercised by the Board of Directors except to the extent prohibited or
restricted by law, the articles of incorporation or these bylaws.
The provisions of Sections 3 through 12 of this Article, which provide
for, among other things, meetings, action without meetings, notice and waiver of
notice, quorum and voting requirements of the Board of Directors, shall apply to
committees and their members as well.
Section 14. Removal. Directors of the Corporation may be removed with
or without cause and with the affirmative vote of at least two-thirds of the
outstanding shares entitled to vote.
Section 15. Vacancies. If the office of any director shall become
vacant, the directors at the time in office, whether or not a quorum, may, by
majority vote of the directors then in office, choose a successor who shall hold
office until the next annual meeting of shareholders.
Section 16. Nominations of Director Candidates. The Board of Directors
may nominate directors by resolution at any time prior to solicitation of
proxies for the annual shareholders' meeting. Any shareholder entitled to vote
in the election of directors generally may nominate one or more persons for
election as directors at a meeting, but only if written notice of such
shareholder's intent to make such nomination(s) has been given, either by
personal delivery or by United States mail, postage prepaid, to the Secretary of
the Corporation not less than one hundred twenty (120) days prior to the first
anniversary date of the initial notice given to shareholders of record on the
record date for the previous annual meeting by or at the direction of the Board
of Directors, provided, however, that if the annual meeting has been changed by
more than 30 days from the date contemplated at the time of the previous year's
proxy statement, such notice shall be required to be given not less than ninety
(90) days nor more than one hundred twenty (120) days prior to the date set for
such annual meeting of shareholders. Each such notice of a shareholder's
intention to make nomination(s) shall set forth: (a) the name and address of the
shareholder who intends to make the nomination of the person(s) and of the
person(s) to be nominated; (b) a representation that the shareholder is the
owner of stock of the Corporation entitled to vote at such meeting and intends
to appear in person or by proxy at the meeting to nominate the person(s)
specified in the notice; (c) a description of all arrangements or understandings
between the shareholder and each nominee for director and any other person(s)
(naming such person(s)) pursuant to which the nomination(s) are to be made by
the shareholder; (d) such other information regarding such nominee proposed by
such shareholder as would be required to be included in a proxy statement filed
pursuant to the proxy rules of the Securities and Exchange Commission, had the
nominee been nominated, or intended to be nominated, by the Board of Directors,
including, but not limited to, the amount and nature of his beneficial ownership
of the Corporation's securities, his principal occupation for the past five
years and his age; and (e) the written consent of each nominee to serve as a
director of the Corporation if so elected. The presiding officer at any meeting
may refuse to acknowledge the nomination of any person not made in compliance
with the foregoing sentence.
- 5 -
<PAGE>
Section 17. Shareholder Proposals. (a) Eligible shareholders shall
submit proposals for inclusion in the proxy materials for consideration at
annual meetings of the Corporation in accordance with the rules and regulations
of the Securities and Exchange Commission as set forth in the Securities
Exchange Act of 1934 (the "1934 Act"). A proponent may submit no more than one
proposal that, with a supporting statement, shall not exceed in the aggregate
500 words. At the time of submitting any such proposal, the proponent shall set
forth his name and address and shall be a record or beneficial owner of the
lesser of 1% or $1,000 in market value of securities entitled to be voted at the
meeting. The proponent shall have held such securities for at least one year,
and he shall continue to own such securities through the date on which the
meeting is held. At the time of submission of the proposal, the Corporation
shall receive from the proponent documentary evidence which supports such
beneficial ownership in the form prescribed under Rule 14a-8 of the 1934 Act, as
amended, or any successor statute or regulation.
(b) Such proposal must be by written notice, either by personal
delivery or by United States mail, postage prepaid, to the Secretary of the
Corporation not less than one hundred twenty (120) days prior to the first
anniversary date of the initial notice given to shareholders of record on the
record date for the previous annual meeting by or at the direction of the Board
of Directors, provided, however, that if the annual meeting has been changed by
more than 30 days from the date contemplated at the time of the previous year's
proxy statement, such notice shall be required to be given not less than ninety
(90) days nor more than one hundred twenty (120) days prior to the date set for
such annual meeting of shareholders.
(c) The Corporation shall not be required to include the proposal in
its proxy statement or form of proxy unless the proponent has complied with the
requirements of the 1934 Act and this section. In addition, the presiding
officer at the meeting may refuse to acknowledge the proposal by any person that
is not made in compliance with the foregoing.
Section 18. Resignation. A director may resign at any time by
delivering written notice to the Board of Directors, the Chairman of the Board
of Directors, the Vice Chairman, the President or the Secretary. A resignation
shall be effective when delivered, unless the notice specifies a later effective
date.
Section 19. Conflicts of Interest. No transaction with the Corporation
in which a director has a direct or indirect personal interest shall be void or
voidable solely because of the director's interest in the transaction if: (i)
the material facts of the transaction and the director's interest are disclosed
or known to the Board of Directors or a committee of the Board of Directors, and
the transaction was authorized, approved or ratified by the affirmative vote of
a majority of the directors on the Board of Directors, or on the committee, who
have no direct or indirect personal interest in the transaction; provided,
however, that a transaction shall not be authorized, approved or ratified by a
single director; or (ii) the material facts of the transaction and the
director's interest are disclosed to the shareholders entitled to vote, and the
transaction is authorized, approved or ratified by the vote of a majority of the
shares other than shares owned by or voted under the control of a director who
has a direct or indirect interest in the transaction; or (iii) the transaction
is fair to the Corporation.
ARTICLE IV
OFFICERS
Section 1. Generally. The officers of the Corporation shall be a
Chairman of the Board of Directors, such Vice Chairmen of the Board of Directors
as the Board of Directors may appoint, a President, such Vice Presidents or
Assistant Vice Presidents as the Board of Directors may appoint, a Secretary and
a Treasurer, each of whom shall be appointed by the Board of Directors at a
regular meeting of the directors held as soon as may be practicable after each
annual meeting of the shareholders or, if a vacancy shall exist in any such
office, at a special meeting of the directors held as soon as may be practicable
after the resignation, death or removal of the officer theretofore holding the
same. The Board of Directors may from time to time, appoint other officers and
assistant officers and fill any vacancy that may exist in any such office as a
result of the resignation, death or removal of the officer theretofore holding
the
- 6 -
<PAGE>
same. Any officer may hold more than one office and may, but need not, be a
director. Each officer shall have the authority and shall perform the duties
which pertain to the office held by him, or as set forth in these bylaws or, to
the extent consistent with these bylaws, such duties as may be prescribed by the
Board of Directors, the Chairman of the Board of Directors, the Vice Chairman or
the President.
Section 2. Chairman of the Board of Directors. The Chairman of the
Board of Directors shall act as chairman of and preside over meetings of the
shareholders and directors. Except as otherwise provided in these Bylaws or in
the resolutions establishing such committees, he shall be ex officio a member of
all committees of the Board unless it is designated otherwise in the appointment
of the committee, entitled to vote on any matter before a committee as a member
thereof, and shall perform all such other duties as are incident to his office
or as he may be directed to perform by the Board of Directors. In the absence or
disability of the Chairman of the Board, the Vice Chairman shall perform such
duties including serve as ex officio member of the Company's committees.
Section 3. Vice Chairman of the Board of Directors. The Vice Chairman
of the Board of Directors shall act as chairman of and preside over meetings of
the shareholders and directors in the absence of the Chairman. In the absence or
disability of the Vice Chairman, the President shall perform such duties.
Section 4. President. The President shall be the chief executive
officer of the Corporation. The President shall have general supervision over,
responsibility for and control of the other officers, agents and employees of
the Corporation. The President shall, during the absence, disqualification or
inability to act of both the Chairman of the Board of Directors and the Vice
Chairman, exercise all the functions and perform all the duties of the Chairman
of the Board of Directors, or in his absence the Vice Chairman (except he may
not vote as a director if not elected or appointed as such).
Section 5. Vice Presidents. Each Vice President shall perform, to the
extent consistent with these bylaws, such duties as may be prescribed by the
Board of Directors or the President. In the event of and during the absence,
disqualification or inability to act of the President, the Vice Presidents, in
the order designated by the Board of Directors, shall have the authority and
perform the duties of the President.
Section 6. Secretary. The Secretary shall have the responsibility for
preparing and maintaining custody of minutes of meetings of the shareholders and
directors in a book or books kept for that purpose and the responsibility for
authenticating records of the Corporation. The Secretary shall maintain a record
of shareholders of the Corporation, giving the names and addresses of all
shareholders and the numbers, classes and series of the shares held by each and,
unless otherwise prescribed by the Board of Directors, shall maintain the share
transfer books of the Corporation.
Section 7. Treasurer. The Treasurer shall be the chief financial
officer of the Corporation. The Treasurer shall have the custody of all moneys
and securities of the Corporation and shall deposit the same in the name and to
the credit of the Corporation in such depositories as may be designated by the
Board of Directors and, unless otherwise prescribed by the Board of Directors or
the President, shall maintain the books of account and financial records.
Section 8. Delegation of Power. In the event of and during the absence,
disqualification or inability to act of any officer other than the President,
such other officers or employees as may be designated by the Board of Directors
or by the President shall have the authority and perform the duties of such
officer.
Section 9. Term of Office. Each officer shall be appointed to hold
office until the first regular meeting of the Board of Directors held after each
annual meeting of the shareholders, or for such longer or shorter term as the
Board of Directors may specify, and until his successor shall have been
appointed or such earlier time as he shall resign, die or be removed.
- 7 -
<PAGE>
Section 10. Resignation. An officer may resign at any time by
delivering written notice to the Board of Directors, the President or the
Secretary. A resignation shall be effective when delivered unless the notice
specifies a later effective date.
Section 11. Removal. Any officer may be removed, with or without cause,
at any time by the Board of Directors and any officer or assistant officer, if
appointed by another officer, may likewise be removed by such officer.
Section 12. Execution of Instruments. Checks, drafts, notes and orders
for the payment of money shall be signed by such officer or officers or such
other individual or individuals as the Board of Directors may from time to time
authorize, and any endorsement of such paper in the ordinary course of business
shall be similarly made, except that any officer or assistant officer of the
Corporation may endorse checks, drafts or notes for collection or deposit to the
credits of the Corporation. The signature of any such officer or other
individual may be a facsimile when authorized by the Board of Directors.
Section 13. Proxies. Unless otherwise prescribed by the Board of
Directors, the Chairman of the Board of Directors, the Vice Chairman or the
President may from time to time himself, by such proxy or proxies, attorney or
attorneys, agent or agents of the Corporation as he shall designate in the name
and on behalf of the Corporation, cast the votes to which the Corporation may be
entitled as a shareholder or otherwise in any other corporation, at meetings, or
consent in writing to any action by any such other corporation; and he may
instruct the individual or individuals so appointed as to the manner of casting
such votes or giving such consent, and execute or cause to be executed on behalf
of the Corporation such written proxies, consents, waivers or other instruments
as he may deem necessary or desirable.
ARTICLE V
MISCELLANEOUS
Section 1. Seal. The seal of the Bank shall be a flat-face circular
die, of which there may be any number of counterparts or facsimiles, in such
form as the Board of Directors shall from time to time adopt.
Section 2. Amendments. These Bylaws may be amended or repealed by the
Board of Directors except to the extent that: (i) this power is reserved
exclusively to the shareholders by law or the articles of incorporation; or (ii)
the shareholders in adopting or amending particular Bylaws provide expressly
that the Board of Directors may not amend or repeal the same. These Bylaws may
be amended or repealed by the shareholders even though the same also may be
amended or repealed by the Board of Directors.
Section 3. Fiscal Year and Accounting. The fiscal year of the
Corporation shall be the calendar year ending December 31. On an annual basis
the Board of Directors shall select a qualified, independent accounting and
audit firm to audit the books and records of the Corporation in accordance with
applicable laws and regulations. The Board will acknowledge the report of
examination in the minutes of the meeting of the Board of Directors.
Section 4. Interpretative Matters. Pronouns stated in either the masculine,
feminine or neuter gender shall include the masculine, feminine and neuter.
ADOPTED: February 25, 1997
- 8 -
EXHIBIT 21
SUBSIDIARIES OF REGISTANT
Planters Bank & Trust Company of Virginia
Subsidiary of Planters Bank of Virginia:
Planters Insurance Agency, Inc.
<TABLE> <S> <C>
<ARTICLE> 9
<CIK> 0001036070
<NAME> VIRGINIA FINANCIAL CORPORATION
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 16,287
<INT-BEARING-DEPOSITS> 279,115
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 50,658
<INVESTMENTS-CARRYING> 68,141
<INVESTMENTS-MARKET> 67,816
<LOANS> 232,913
<ALLOWANCE> 3,039
<TOTAL-ASSETS> 377,113
<DEPOSITS> 330,375
<SHORT-TERM> 8,110
<LIABILITIES-OTHER> 1,055
<LONG-TERM> 0
0
0
<COMMON> 20,000
<OTHER-SE> 17,574
<TOTAL-LIABILITIES-AND-EQUITY> 377,113
<INTEREST-LOAN> 20,250
<INTEREST-INVEST> 6,980
<INTEREST-OTHER> 91
<INTEREST-TOTAL> 27,321
<INTEREST-DEPOSIT> 12,406
<INTEREST-EXPENSE> 12,684
<INTEREST-INCOME-NET> 14,637
<LOAN-LOSSES> 450
<SECURITIES-GAINS> 6
<EXPENSE-OTHER> 8,679
<INCOME-PRETAX> 8,056
<INCOME-PRE-EXTRAORDINARY> 8,056
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,542
<EPS-PRIMARY> 2.77
<EPS-DILUTED> 2.77
<YIELD-ACTUAL> 7.41
<LOANS-NON> 194
<LOANS-PAST> 248
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 2,786
<CHARGE-OFFS> 268
<RECOVERIES> 71
<ALLOWANCE-CLOSE> 3,039
<ALLOWANCE-DOMESTIC> 2,625
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 414
</TABLE>
EXHIBIT 99.1
October 18, 1996
Dear Fellow Shareholders:
You are cordially invited to attend a Special Meeting of Shareholders
of your Bank on November 14, 1996, at 7:30 p.m. at the main office of Planters
Bank & Trust Company of Virginia, located at 24 South Augusta Street, Staunton,
Virginia. The accompanying Notice and Proxy Statement describe the proposed
formation of a holding company, which we will be considering at that meeting.
Please read this document carefully.
Specifically, at this meeting you will be asked to consider and approve
a proposal to adopt the formation of a bank holding company, to be called
Virginia Financial Corporation. Under the proposal, the Bank will conduct its
banking operations as a wholly-owned subsidiary of Virginia Financial
Corporation, a Virginia corporation organized for the purpose of serving as the
holding company for the Bank (the "Holding Company"). Each share of your stock
in the Bank will be converted, in a tax-free transaction, into one (1) share of
common stock in the Holding Company. Following the reorganization of the Bank
into a holding company structure, your equity ownership in the Holding Company
will be exactly the same as your present ownership in the Bank, and the Bank
will continue to operate from the same offices it currently occupies.
The financial services industry is one of the most rapidly changing
segments of Virginia's and the nation's economy. Historical distinctions between
various types of financial institutions are eroding rapidly, and banks are
subject to new and more aggressive competition from all sides. Your Board
believes that the greater flexibility and investment opportunities provided by
the establishment of a holding company will help your management operate more
efficiently and take advantage of opportunities as they arise in this rapidly
changing environment. The Board of Directors encourages you to read carefully
the enclosed Proxy Statement and to VOTE FOR the reorganization of the Bank.
We hope you can attend this Special Meeting. Whether or not you plan to
attend, please complete, sign, and date the enclosed Proxy and return it
promptly in the enclosed envelope. Your vote is important regardless of the
number of shares you own. We look forward to seeing you at this Special Meeting,
and we appreciate your continued loyalty and support.
Sincerely,
PLANTERS BANK & TRUST COMPANY
OF VIRGINIA
Harry V. Boney, Jr.
President and Chief Executive Officer
<PAGE>
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
To be Held November 14, 1996
To Our Shareholders:
The Special Meeting of Shareholders of Planters Bank & Trust Company of
Virginia (the "Bank") will be held at the main office of Planters Bank & Trust
Company of Virginia located at 24 South Augusta Street, Staunton, Virginia, on
November 14, 1996, at 7:30 p.m., for the following purposes:
1. To approve an Agreement and Plan of Reorganization dated as of
July 30, 1996, and a related Plan of Share Exchange
(collectively, the "Agreement"), a copy of which is attached to
the accompanying Proxy Statement as Exhibit A, providing for a
share exchange in which each shareholder of the Bank will receive
one (1) share of Virginia Financial Corporation, a bank holding
company formed to serve as the holding company for the Bank for
each share of Planters Bank & Trust Company of Virginia they now
own; and
2. To transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on October 7, 1996,
will be entitled to notice of and to vote at this Special Meeting and any
adjournments thereof.
By Order of the Board of Directors
__________________________________
Harry V. Boney, Jr.
Clerk of the Board
October 18, 1996
<PAGE>
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
24 South Augusta Street
P. O. Drawer 1309
Staunton, Virginia 24402-1309
PROXY STATEMENT AND OFFERING CIRCULAR
This Proxy Statement is furnished to the Shareholders of Planters Bank
& Trust Company of Virginia (the "Bank") in connection with the solicitation of
proxies by the Board of Directors of the Bank for use at the Special Meeting of
Shareholders to be held on November 14, 1996, at the time and place set forth in
the accompanying Notice of Special Meeting of Shareholders and at any
adjournment thereof (the "Special Meeting"). This Proxy Statement and the
enclosed Proxy are being mailed to the Shareholders of the Bank on or about
October 18, 1996.
At the Special Meeting, Shareholders will be asked to approve the
reorganization of the Bank into a holding company structure (the
"Reorganization") in accordance with the terms and conditions set forth in the
Agreement and Plan of Reorganization, dated as of July 30, 1996, and a related
Plan of Share Exchange (collectively, the "Agreement") between the Bank and
Virginia Financial Corporation, a copy of which is attached as Exhibit A to this
Proxy Statement. The Agreement provides for the reorganization of the Bank into
a wholly-owned subsidiary of Virginia Financial Corporation, a Virginia
corporation recently organized to serve as the holding company for the Bank (the
"Holding Company"). Under the terms of the Agreement, each Shareholder of the
Bank will receive one share of Holding Company Common Stock in exchange for each
share of Bank Common Stock which they hold, in a tax-free transaction. After
consummation of the Reorganization, the Bank will conduct its business as a
wholly-owned subsidiary of the Holding Company in substantially the same manner
and from the same offices as before the Reorganization. If an adjournment is
proposed, the persons named as proxies will vote in favor of such adjournment
those proxies which are entitled to be voted in favor of the Agreement and
against such adjournment those proxies containing instructions to vote against
approval of the Agreement, unless the Shareholder clearly writes on the face of
that Proxy specific instructions stating how that Proxy should be voted in the
case of an adjournment proposed prior to a vote on the Reorganization. See "The
Proposed Reorganization."
This Proxy Statement also describes 2,000,000 shares of Holding Company
Common Stock, par value $5.00 per share, to be issued to Shareholders of the
Bank in exchange for their shares of Bank Common Stock. The trading market for
Holding Company Common Stock, like Bank Common Stock, is not expected to vary
significantly from the Bank's current trading market, where trading is thin and
primarily in the local market.
- --------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS ANY
GOVERNMENT AGENCY PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
THE SHARES OF HOLDING COMPANY COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS
ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY BANK OR SAVINGS ASSOCIATION
AND ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENTAL AGENCY.
THE SECURITIES ARE SUBJECT TO INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF THE PRINCIPAL INVESTED.
The Date of this Proxy Statement and Offering Circular is October 18, 1996.
<PAGE>
AVAILABLE INFORMATION
The Bank is currently subject to the informational requirements of the
rules and regulations of the Federal Deposit Insurance Corporation (the "FDIC"),
as promulgated under the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), in accordance therewith files reports, proxy statements and
other information with the FDIC. In addition, the Holding Company that will
become the parent corporation of the Bank has filed proxy materials, including
this Proxy Statement and Offering Circular, with the FDIC relating to this
Reorganization and the shares of Holding Company Common Stock issuable in the
Reorganization. No registration statement filing with the FDIC is required. Such
reports, proxy statements and other information can be inspected and copied at
the offices of the FDIC, Registration and Disclosure Section, 1776 F Street,
N.W., Room F-643, Washington, D.C., and copies of such records may be requested
by calling (202) 898-8902.
Pursuant to the Reorganization, the Holding Company will assume
reporting responsibilities with the Securities and Exchange Commission under the
Exchange Act as a successor issuer to the Bank, and will undertake similar
responsibilities with the Commission as previously performed by the Bank under
the rules and regulations of the FDIC.
The Holding Company, as the successor of the Bank, hereby incorporates
the Bank's annual report on Form F-2 for the year ended December 31, 1995, and
the Bank's quarterly reports on Form F-4 for the periods ending March 31, 1996
and June 30, 1996, all as originally filed with the FDIC. Such reports and any
other document incorporated herein by reference will be delivered to any person
receiving a copy of this Proxy Statement without charge, upon written request
to: Fred D. Bowers, Senior Vice President & Cashier, Planters Bank & Trust
Company of Virginia, 24 South Augusta Street, P.O. Drawer 1309, Staunton,
Virginia 24402-1309; telephone number (540) 885-1232.
In addition, all documents filed by the Bank pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act and the rules and regulations of
the FDIC and all documents filed by the Holding Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act, in each case subsequent to the
date of this Proxy Statement and prior to the termination of the distribution of
Holding Company Common Stock described herein, shall be deemed to be
incorporated herein and to be a part hereof from the respective dates of filing
thereof (all such documents being hereinafter referred to as "Incorporated
Documents"). Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Proxy Statement to the extent that a statement contained
herein or in any supplement hereto modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed to constitute a
part hereof, except as so modified or superseded.
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<PAGE>
TABLE OF CONTENTS
Page
PROXY STATEMENT............................................................ 1
AVAILABLE INFORMATION...................................................... 2
SUMMARY OF THE PROXY STATEMENT............................................. 4
SELECTED HISTORICAL FINANCIAL INFORMATION.................................. 6
GENERAL INFORMATION........................................................ 7
Use and Revocation of Proxies...................................... 7
Shareholders Entitled to Vote and Vote Required.................... 7
Solicitation of Proxies............................................ 8
Financial Statements............................................... 8
THE PROPOSED REORGANIZATION................................................ 8
Description of the Reorganization.................................. 8
Reasons for the Reorganization..................................... 9
Management of the Holding Company.................................. 9
Principal Shareholders............................................. 10
Anticipated Effective Date of Reorganization....................... 10
Conversion and Exchange of Stock................................... 10
Federal Income Tax Consequences.................................... 11
Required Regulatory Approvals...................................... 11
Possible Abandonment of the Reorganization......................... 11
Rights of Dissenting Shareholders.................................. 12
Historical and Pro Forma Capitalization............................ 13
Prior to the Reorganization................................. 13
After the Reorganization.................................... 14
Future Plans for the Holding Company............................... 14
PLANTERS BANK & TRUST COMPANY OF VIRGINIA.................................. 15
The Bank........................................................... 15
General............................................................ 15
Competition........................................................ 15
Description of Common Stock........................................ 16
Market for Bank Common Stock....................................... 16
DESCRIPTION OF HOLDING COMPANY CAPITAL STOCK............................... 17
Authorized and Outstanding Capital Stock........................... 17
Common Stock....................................................... 17
Dividends.......................................................... 17
COMPARATIVE RIGHTS OF SHAREHOLDERS......................................... 18
General............................................................ 18
REGULATION AND SUPERVISION................................................. 19
The Bank........................................................... 19
The Holding Company................................................ 19
LEGAL MATTERS ............................................................ 21
SHAREHOLDER PROPOSALS...................................................... 21
APPENDIX A
Agreement and Plan of Reorganization and Plan of Share Exchange
APPENDIX B
Article 15 of Title 13.1 of the Virginia Code
-3-
<PAGE>
EXHIBIT 99.1
SUMMARY OF THE PROXY STATEMENT
The following material is qualified in its entirety by the information appearing
elsewhere in this Proxy Statement and the Exhibits hereto.
Special Meeting
Date, Time and Place. November 14, 1996 at 7:30 p.m. at the main office
of Planters Bank and Trust Company of Virginia, 24 South Augusta Street,
Staunton, Virginia.
Purpose. Shareholders will be asked to vote on the proposed Agreement
and formation of a bank holding company for the Bank. The affirmative vote of
persons holding more than two-thirds of the outstanding shares of Bank Common
Stock will be required to approve this matter. The Bank's Board of Directors
recommends that shareholders vote for the Reorganization.
The Reorganization
At the direction of the Board of Directors of the Bank, Virginia
Financial Corporation was incorporated under the laws of Virginia to serve as a
holding company for the Bank. The Bank and the Holding Company have entered into
an agreement by which the Bank will become a wholly-owned subsidiary of the
Holding Company in a tax-free share exchange transaction. At the effective date
of the Reorganization, shareholders of the Bank will automatically become
shareholders of the Holding Company and will receive one share of Holding
Company common stock in exchange for each share of Bank Common Stock they hold.
See "The Proposed Reorganization."
Reasons for the Reorganization
The Board of Directors believes that the establishment of a holding
company structure for the Bank will provide greater flexibility in responding to
the expanding financial needs of the Bank's customers and in meeting increasing
and ever-changing forms of competition for financial services. In particular,
the Holding Company will provide the Bank greater flexibility in repurchasing
common stock from shareholders, may facilitate affiliations with other financial
institutions, and in the future, may provide more defenses against an unwanted
attempt by another party to gain control of the Bank. The holding company
structure also may afford certain investment opportunities that otherwise would
not be available to the Bank. See "The Proposed Reorganization."
Management of the Holding Company
Management of the Bank will not change as a result of the
Reorganization. The executive officers of the Holding Company will be Harry V.
Boney, Jr. - President; William P. Heath, Jr. - Vice President; and Fred D.
Bowers - Secretary/Treasurer. The six individuals currently slated to serve as
directors of the Holding Company include Benham M. Black (Chairman), Lee S.
Baker, Mr. Boney, Jan S. Hoover, Martin F. Lightsey, and James S. Quarforth, all
currently serving also as directors of the Bank. See "The Proposed
Reorganization."
<PAGE>
Market for Common Stock
Bank Common Stock is traded thinly on the local market. While there are
no "market makers," local brokerage offices will match or pair "buy" and "sell"
orders. Accordingly, since there is no established market, the prices quoted do
not necessarily reflect the price that would be paid in an active and liquid
market. Trades in Bank Common Stock since year end have been in the range of
$37.00 to $43.00 per share, with the most recent trade occurring on September
19, 1996, for 50 shares at a sales price of $43.00 per share. The trading range
may or may not reflect the price a shareholder would receive if the stock were
traded more widely. Holding Company Common Stock similarly is expected to trade
thinly on the local market. The formation of a holding company should have
little or no effect on the market or market price of Common Stock.
There can be no assurance as to the market or trading value of Holding
Company Common Stock at the Effective Date or at any time thereafter.
Federal Income Tax Consequences
The Reorganization is intended to qualify for federal income tax
purposes as a tax-free "reorganization" under Sections 368(a)(1)(B) of the
Internal Revenue Code in which no gain or loss will be recognized by a Bank
shareholder upon receipt of Holding Company Common Stock in exchange for Bank
Common Stock. See "The Proposed Reorganization."
Comparison in the Rights of Shareholders
The Holding Company, like the Bank, is organized as a Virginia
corporation, subject to the provisions of the Virginia Stock Corporation Act.
The articles of incorporation and bylaws of the Holding Company, at least
initially, will be virtually identical to those of the Bank. Accordingly, there
will be no material differences between the rights of the Bank's present
shareholders and the rights of shareholders receiving Holding Company Common
Stock in the Reorganization. However, management of the Holding Company has
discussed and may at some point in the future consider amending the articles of
incorporation and bylaws of the Holding Company, although no such specific
amendment is contemplated at this time. Future amendments are likely to contain
certain provisions designed to enhance the ability of the Board of Directors to
deal with attempts to acquire control of the Holding Company. These provisions
may be deemed to have an anti-takeover effect and may discourage takeover
attempts that have not been approved by the Board of Directors. Such amendments
might be considered by some shareholders not to be in their interests. As
required by Virginia law, any such amendments to the articles of incorporation
must be submitted to and approved by holders of more than two-thirds of the
Holding Company Common Stock outstanding. See "The Proposed Reorganization."
Government Regulation and Supervision
After the effective date, the Holding Company will be subject to the
Bank Holding Company Act of 1956, as amended (the "BHCA"), and will be subject
to regulation by the Board of Governors of the Federal Reserve System (the
"Federal Reserve") with respect to its operations as a bank holding company. The
Bank will continue to be subject to regulation by the FDIC and the Virginia
State Corporation Commission (the "SCC"). See "Regulation and Supervision."
5
<PAGE>
Rights of Dissenting Shareholders
Those shareholders of the Bank who object to the Reorganization will be
entitled to dissenters rights as provided in the Virginia Stock Corporation Act
(the "Virginia SCA"). See "The Proposed Reorganization-Rights of Dissenting
Shareholders."
Conditions for Consummation, Anticipated Effective Date, and Termination
Consummation of the Reorganization is subject to, among other things,
(i) the affirmative vote of more than two-thirds of the outstanding shares of
Bank Common Stock, and (ii) the approval by the FDIC, the SCC, and the Federal
Reserve. Applications for approval of the Reorganization have been filed, and
the Reorganization is expected to be consummated on or about January 1, 1997.
The Reorganization may be terminated by either the Holding Company or the Bank
prior to the approval of the Agreement by the shareholders or by the mutual
consent of the Board of Directors of the Holding Company and the Bank after any
required shareholder approval are received. See "The Proposed Reorganization."
SELECTED HISTORICAL FINANCIAL INFORMATION
The following table sets forth certain selected financial information
for the Bank. The selected financial information should be read in conjunction
with the financial statements of the Bank and the related notes thereto in
documents incorporated herein by reference. See "Available Information."
<TABLE>
<CAPTION>
Six Months Year Ended December 31,
Ended June 30, (1)
-------------------------- ---------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
(In thousands, except ratios and per share amounts)
<S> <C>
Income Statement Data:
Interest income $ $12,767 $26,073 $22,902 $21,436 $21,310 $22,167
13,433
Interest Expense 6,279 5,981 12,343 9,748 9,209 10,547 12,606
Net Interest Income 7,154 6,786 13,730 13,154 12,227 10,763 9,561
Provision for Loan Losses 156 68 309 421 217 168 303
Other Income 1,342 1,039 2,126 2,207 2,235 2,170 1,818
Other Expense 4,264 4,199 8,234 8,082 7,511 7,251 6,792
Income Tax Expense 1,268 1,098 2,278 2,105 2,097 1,685 1,338
------------ ------------ ------------ ----------- ---------- ---------- ----------
Net Income 2,808 2,460 5,035 4,753 4,637 3,829 2,946
============ ============ ============ =========== ========== ========== ==========
Per Share Data: (3)
Net Income $1.40 $1.23 $2.52 $2.38 $2.32 $1.91 $1.47
Cash Dividend 0.46 0.40 0.83 0.71 0.60 0.54 0.49
Book Value 17.79 16.10 17.08 15.02 13.67 11.95 10.58
Balance Sheet Data
Assets $367,611 $342,324 $356,068 $344,473 $308,243 $297,189 $250,637
Loans Net of Unearned Income 221,565 203,993 209,541 194,054 168,850 165,182 156,880
Securities 126,181 119,569 125,398 129,332 122,229 113,750 73,577
Deposits 318,492 301,978 319,578 297,006 279,290 269,355 226,683
Shareholders' Equity 35,580 32,207 34,154 30,046 27,335 23,898 21,149
Average Shares Outstanding (3) 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000 2,000,000
Performance Ratios: (2)
6
<PAGE>
Return on Average Assets 1.40% 1.42% 1.45% 1.43% 1.53% 1.41% 1.21%
Return on Average Equity 15.92% 15.52% 15.48% 16.30% 18.03% 17.00% 14.57%
Dividend Payout 32.76% 32.52% 32.97% 29.87% 25.88% 28.21% 33.27%
</TABLE>
7
<PAGE>
<TABLE>
<CAPTION>
Six Months Year Ended December 31,
Ended June 30, (1)
-------------------------- ---------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---- ---- ---- ---- ---- ---- ----
(In thousands, except ratios and per share amounts)
<S> <C>
Asset Quality Ratios:
Allowance for Loan Losses 1.28 1.30 1.31 1.28 1.30 1.28 1.32
to Period end loans
Allowance for Loan Losses 320.58 715.13 296.15 301.59 663.82 559.58 533.82
to non-performing loans
Non-performing assets and
foreclosed
property to period end loans 0.40 0.18 0.39 0.43 0.22 0.23 0.28
Net Charge-offs to average loans 0.10 0.02 0.06 0.08 0.08 0.13
(0.05)
Capital Ratios:
Leverage 9.79 9.22 9.53 8.91 8.83 8.20 8.46
Risk-based
Tier I Capital 16.98 16.44 16.74 16.10 16.45 14.61 14.18
Total Capital 18.23 17.69 17.99 17.35 17.70 15.92 15.59
</TABLE>
(1) The financial information for the six months ended June 30, 1996 and 1995
are unaudited.
(2) Annualized for the six months ended June 30, 1996 and 1995.
(3) Adjusted for 100 percent stock dividend, December 1993.
GENERAL INFORMATION
Use and Revocation of Proxies
If the enclosed Proxy is properly executed and returned in time for
voting at the Special Meeting, the shares represented thereby will be voted in
accordance with such instructions. If no instructions are given in a returned,
executed Proxy, the Proxy will be voted in favor of the Reorganization, and in
the discretion of the proxyholders as to any other matters which may properly
come before the meeting. Proxies will extend to, and will be voted at, any
properly adjourned session of the Special Meeting, unless otherwise revoked. If
an adjournment is proposed, the persons named as proxies will vote in favor of
such adjournment those Proxies which are entitled to be voted in favor of the
Reorganization and against such adjournment those Proxies containing
instructions to vote against the Reorganization unless the Shareholder clearly
writes on the face of that Proxy specific instructions stating how the Proxy
should be voted in the case of an adjournment proposed prior to a vote on the
Reorganization.
Execution of a Proxy will not affect a Shareholder's right to attend
the Special Meeting and to vote in person. Any Shareholder who has executed and
returned a Proxy for any reason desires to revoke it may do so at any time
before the Proxy is exercised by filing with the Cashier of the Bank an
instrument revoking it or a duly exercised Proxy bearing a later date, or by
attending the Special Meeting and voting in person.
Shareholders Entitled to Vote and Vote Required
8
<PAGE>
Only holders of record of Bank Common Stock at the close of business on
October 7, 1996 (the "Record Date") are entitled to vote at the Special Meeting.
On the Record Date, there were 2,000,000 shares of Bank Common Stock, par value
$10.00 per share, outstanding and entitled to vote. Each share of outstanding
Bank Common Stock is entitled to one vote on all matters presented at the
Special Meeting. In order for the Reorganization to become effective, more than
two-thirds of the outstanding shares of Bank Common Stock must be voted in favor
of the Reorganization.
With regard to approval of the Reorganization, votes may be cast for or
against the proposal or abstain from voting on the matter. Abstentions and
broker non-votes (shares held by customers which may not be voted on certain
matters because the broker has not received specific instructions from the
customer) have the effect of a vote against the proposal. Therefore, all
shareholders, whether holding shares that are recorded under their name or in
the name of a broker nominee, are encouraged to return a proxy card related to
the Reorganization in a timely manner.
Directors, Executive Officers and their affiliates beneficially own and
may vote 108,506 of the outstanding shares of the Bank's Common Stock entitled
to vote on the Reorganization, which shares represent 5.43% of the votes
required to approve the Reorganization. The Bank believes that all of these
shares will be voted FOR the Reorganization.
Solicitation of Proxies
The Bank will bear its own expenses incident to soliciting proxies.
Directors, Officers, and employees of the Bank acting without commission or
other special compensation may solicit proxies in person, by telephone or by
mail.
Financial Statements
The consolidated financial statements for the year ended December 31,
1995 and summary financial information for the quarters ended March 31 and June
30, 1996, have previously been provided to Shareholders and are available upon
request. Additional copies of the reports will be furnished without charge to
Shareholders upon written request directed to the Bank's Cashier at the address
set forth in "Available Information." The above-referenced financial statements
and interim call reports will be available at the Special Meeting for inspection
by Shareholders. Additional financial information will be provided upon request
(see "Additional Information," above).
THE PROPOSED REORGANIZATION
Description of the Reorganization
The Board of Directors of the Bank has unanimously approved the
proposed Reorganization whereby the business of the Bank will be conducted under
a Holding Company structure. The Holding Company will be organized under the
laws of Virginia. The affirmative vote of persons holding more than two-thirds
of the outstanding shares of Bank Common Stock will be required to approve the
Reorganization.
9
<PAGE>
The Bank and the Holding Company have entered into the Agreement under
the terms of which the Bank will become a wholly-owned subsidiary of the Holding
Company in a share exchange transaction. The material terms of the Agreement are
provided below. Pursuant to the Reorganization, each share of Bank Common Stock
will be exchanged for one share of Holding Company Common Stock in a tax free
transaction. The Articles of Incorporation and Bylaws of the Holding Company
will be substantially identical to the Articles of Incorporation and Bylaws of
the Bank. Upon consummation of the Reorganization, shareholders of the Bank
automatically will become shareholders of the Holding Company and will receive
one share of Holding Company Common Stock for each share of Bank Common Stock
they hold immediately prior to the Effective Date.
The Bank will conduct its business under the same name and in the same
manner as it did prior to the Reorganization. The officers and personnel of the
Bank will continue in their same capacity after the Reorganization. The Bank
will pay all expenses incurred in connection with the Reorganization, including
the costs of organizing the Holding Company.
Reasons for the Reorganization
The financial services industry is one of the most rapidly changing
segments of our nation's economy. Historical distinctions between different
types of financial institutions are eroding rapidly as a result of new
technology, legislative changes, and changing regulatory philosophies. In
addition, traditional restrictions on branch banking have given way to
multi-state banking and multi-bank holding companies. Accordingly, banks are
subject to aggressive competition from a wide variety of institutions offering
an expanding array of financial products and services. Current laws and
regulations applicable to banks limit their ability to supplement traditional
financial services and products and to diversify into other banking-related
ventures in response to increasing competition and changing customer needs. The
laws and regulations applicable to bank holding companies allow holding
companies greater flexibility in expanding their markets and in increasing the
variety of services they and their subsidiaries provide to customers. In
addition, a holding company can buy back up to ten percent of its common stock
outstanding without approval of any regulatory agency, as opposed to a state
bank which can only buy back up to five percent of its outstanding common stock.
The Bank has a number of large shareholders, and this flexibility may be
particularly useful to respond to an improving equity position at the Bank or to
react to the needs of a large shareholder to liquidate stock quickly. The Board
of Directors of the Bank believes that the new corporate structure will enhance
the institution's ability to compete and to respond effectively to changing
market conditions.
A holding company structure also might facilitate future affiliations
between the Bank and other financial institutions. Although neither the Bank nor
the Holding Company has made any commitment to expand significantly its market
through acquisition of existing banks or to engage in activities other than
those currently conducted by the Bank, the Board anticipates that the holding
company structure will facilitate future combinations with other financial
institutions, if suitable opportunities arise for acquisition, expansion, or
affiliation. The holding company structure also may provide opportunities to
engage in new activities related to banking. Finally, the Holding Company may
provide more defenses against an unwanted attempt by another party to acquire or
gain control of the Bank, although the Bank is not presently aware of anyone who
has such plans.
10
<PAGE>
While the Holding Company will continue to evaluate various actions and
strategies, management currently does not have any plans to take any specific
actions following consummation of the Reorganization.
Management of the Holding Company
At the Effective Date, the Board of Directors, officers and employees
of the Bank will not change as a result of the Reorganization. Following the
Reorganization, the Bank will keep its existing name and office locations and
will continue to carry on its banking businesses in the same manner as before
the Share Exchange. The Board of Directors of the Holding Company will consist
of six individuals currently serving as directors of the Bank, Benham M. Black
(Chairman), Lee S. Baker, Harry V. Boney, Jr., Jan S. Hoover, Martin F.
Lightsey, and James S. Quarforth. Approval of the Reorganization by the
shareholders of the Bank at the Special Meeting will be deemed to ratify the six
designees as directors of the Holding Company. The executive officers of the
Holding Company will be Harry V. Boney, Jr. - President; William P. Heath, Jr. -
Vice President; and Fred D. Bowers - Secretary/Treasurer. The Board of Directors
and executive officers of the Bank (and their affiliates) currently control
approximately 5.43 percent of Bank Common Stock outstanding, and all of those
individuals have indicated that they intend to vote for the Reorganization.
Principal Shareholders
To the best of management's knowledge, as of the record date, the
following individuals own either beneficially or of record more than 5% of the
Bank's outstanding shares of common stock
Title of Name and Address of Amount and Nature of Percent of
Class Beneficial Owner Beneficial Ownership Class
Common Carlyle Van d. Cochran 125,799 6.3
Chevy Chase, Maryland
Common Mocomp, Inc. 146,836(1) 7.3
Verona, Virginia
Common John M. Moore 101,054 (2) 5.0
Staunton, Virginia
(1) Held by a Trust Under Agreement dated January 10, 1992; P. W. Moore,
Trustor and P. W. Moore, Jr., Dorothy B. Moore and Benham M. Black,
Trustees.
(2) Include 4,678 shares registered in the name of spouse. The reporting of
such shares is not to be construed as an admission of beneficial ownership.
Anticipated Effective Date of Reorganization
If the holders of more than two-thirds of the outstanding shares of
Bank Common Stock approve the Reorganization, the Reorganization will become
effective upon satisfaction of certain conditions and the receipt of required
regulatory approvals, including approvals by the FDIC and the Federal Reserve.
Applications for approval of the Reorganization have been filed with the Federal
Reserve, FDIC and the
11
<PAGE>
Bureau of Financial Institutions of the SCC. Subject to receipt of all requisite
regulatory approvals and the satisfaction of all other conditions to the
Reorganization, the objective is to have the Reorganization declared effective
on or about January 1, 1997 (the "Effective Date").
Conversion and Exchange of Stock
On the Effective Date, shareholders of the Bank will become
shareholders of the Holding Company. Each share of Bank Common Stock, par value
$10.00 per share, will be exchanged and converted into one share of Holding
Company Common Stock, par value $5.00 per share (the "Exchange Ratio").
Outstanding certificates representing shares of Bank Common Stock will
thereafter represent the same number of shares of Holding Company Common Stock.
Upon consummation of the Reorganization, promptly after the Effective Date, the
Bank, as exchange agent, will mail to Bank Common Stock shareholders who hold
stock immediately prior to the Effective Date a letter of transmittal and
instructions relating to the exchange of their Bank Common Stock certificates
representing the number of shares of Holding Company Common Stock into which
their Bank Common Stock has been converted as a result of the Reorganization.
BANK SHAREHOLDERS SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL THEY RECEIVE SUCH
INSTRUCTIONS.
Federal Income Tax Consequences
The Reorganization is intended to qualify as a "reorganization" under
Section 368(a)(1)(B) of the Internal Revenue Code, and the material federal
income tax consequences summarized below are based on that assumption. One
condition to consummation of the Reorganization is the Bank's receipt of an
opinion of Mays & Valentine, counsel to the Bank and Holding Company, that the
Reorganization will qualify as a reorganization under Section 368(a)(1)(B) and
that, for the Bank's shareholders who receive Holding Company Common Stock for
their Bank Common Stock, the exchange will result in the non-recognition of gain
or loss. A copy of that opinion is available for inspection as an exhibit to the
Registration Statement and upon request from Fred D. Bowers, Senior Vice
President & Cashier, Planters Bank & Trust Company of Virginia, 24 South Augusta
Street, P. O. Drawer 1309, Staunton, Virginia 24402-1309.
The Bank's shareholders will not recognize any gain or loss on the
exchange of Bank Common Stock solely for Holding Company Common Stock. A
shareholder's tax basis in the shares of Holding Company Common Stock received
in exchange for his Bank Common Stock will equal his tax basis in the shares of
Bank Common Stock exchanged therefor. The holding period for those shares of
Holding Company Common Stock will include the shareholder's holding period for
the shares of Bank Common Stock exchanged therefor, if they are held as a
capital asset at the time of the exchange.
Upon consummation of the Reorganization, no gain or loss will be
recognized by the Holding Company or Bank.
It is intended that the Reorganization will receive accounting
treatment similar to that for a pooling of interests.
The foregoing discussion of federal income tax consequences is a
summary of general information material to most shareholders. Due to the
individual nature of the tax consequences of
12
<PAGE>
a Reorganization, each Bank shareholder is urged to consult his or her own tax
advisor with regard to federal, state and local tax consequences of the
Reorganization.
Required Regulatory Approvals
The Reorganization must be approved by the Federal Reserve, FDIC and
the SCC. Management of the Bank has filed the required applications for approval
of the Reorganization with the appropriate regulatory authorities. Subject to
the approval of the Federal Reserve, FDIC and the SCC and the satisfaction of
all other conditions to the Reorganization, Management believes that the
Reorganization will be declared effective on or about January 1, 1997.
Possible Abandonment of the Reorganization
Consummation of the Reorganization is subject to obtaining the required
shareholder approval and various regulatory approvals. The Agreement may be
terminated by the unilateral action of the Boards of Directors of the Bank or
the Holding Company prior to the approval of the Reorganization by the
shareholders or by mutual consent of the respective Boards of Directors of the
Bank and the Holding Company after any required shareholder approval has been
obtained.
Rights of Dissenting Shareholders
A shareholder of Bank Common Stock who objects to the Reorganization (a
"Dissenting Shareholder") and who complies with provisions of Article 15 of
Title 13.1 of the Virginia SCA (specifically "Article 15") may demand the right
to receive a cash payment, if the Reorganization is consummated, for the fair
value of his or her stock immediately before the Effective Date, exclusive of
any appreciation or depreciation in anticipation of the Reorganization unless
such exclusion would be inequitable. In order to receive payment, a Dissenting
Shareholder must deliver to the Bank prior to the Special Meeting a written
notice of intent to demand payment for his or her shares if the Reorganization
is consummated (an "Intent to Demand Payment") and must not vote his or her
shares in favor of the Reorganization. The Intent to Demand Payment should be
addressed to Fred D. Bowers, Senior Vice President & Cashier, Planters Bank &
Trust Company of Virginia, 24 South Augusta Street, P. O. Drawer 1309, Staunton,
Virginia 24402-1309. A VOTE AGAINST THE REORGANIZATION WILL NOT ITSELF
CONSTITUTE SUCH WRITTEN NOTICE AND A FAILURE TO VOTE WILL NOT CONSTITUTE A
TIMELY WRITTEN NOTICE OF INTENT TO DEMAND PAYMENT.
A shareholder of record of Bank Common Stock may assert dissenters'
rights as to fewer than all the shares registered in his or her name only if the
shareholder dissents with respect to all shares beneficially owned by any one
person and notifies the Bank in writing of the name and address of each person
on whose behalf he/she asserts dissenters' rights. The rights of such a partial
dissenter are determined as if the shares to which he/she dissents and his/her
other shares were registered in the names of different shareholders. A
beneficial shareholder of Bank Common Stock may assert dissenters' rights as to
shares held on his/her behalf by a shareholder of record only if (i) he/she
submits to the Bank the record shareholder's written consent to the dissent not
later than the time when the beneficial shareholder asserts dissenters' rights,
and (ii) he/she dissents with respect to all shares of which he/she is the
beneficial shareholder or over which he/she has power to direct the vote.
13
<PAGE>
Within 10 days after the Effective Date, the Bank is required to
deliver a notice in writing (a "Dissenter's Notice") to each Dissenting
Shareholder who has filed an Intent to Demand Payment and who has not voted such
shares in favor of the Reorganization. The Dissenter's Notice shall (i) state
where the demand for payment (the "Payment Demand") shall be sent and where and
when stock certificates shall be deposited; (ii) supply a form for demanding
payment; (iii) set a date by which the Bank must receive the Payment Demand; and
(iv) be accompanied by a copy of Article 15. A Dissenting Shareholder who is
sent a Dissenter's Notice must submit the Payment Demand and deposit his or her
stock certificates in accordance with the terms of, and within the time frames
set forth in, the Dissenter's Notice. As a part of the Payment Demand, the
Dissenting Shareholder must certify whether he or she acquired beneficial
ownership of the shares before or after the date of the first public
announcement of the terms of the proposed Reorganization (the "Announcement
Date"), which was October 18, 1996. The Bank will specify the Announcement Date
in the Dissenter's Notice.
Except with respect to shares acquired after the Announcement Date, the
Bank shall pay a Dissenting Shareholder the amount the Bank estimates to be the
fair value of his or her shares, plus accrued interest. Such payment shall be
made within 30 days of receipt of the Dissenting Shareholder's Payment Demand.
As to shares acquired after the Announcement Date, the Bank is only obligated to
estimate the fair value of the shares, plus accrued interest, and to offer to
pay this amount to the Dissenting Shareholder conditioned upon the Dissenting
Shareholder's agreement to accept it in full satisfaction of his or her claim.
If a Dissenting Shareholder believes that the amount paid or offered by
the Bank is less than the fair value of his or her shares, or that the interest
due is incorrectly calculated, that Dissenting Shareholder may notify the Bank
of his or her own estimate of the fair value of his shares and amount of
interest due and demand payment of such estimate (less any amount already
received by the Dissenting Shareholder) (the "Estimate and Demand"). The
Dissenting Shareholder must notify the Bank of the Estimate and Demand within 30
days after the date the Bank makes or offers to make payment to the Dissenting
Shareholder.
Within 60 days after receiving the Estimate and Demand, the Bank must
either commence a proceeding in the appropriate circuit court to determine the
fair value of the Dissenting Shareholder's shares and accrued interest, or the
Bank must pay each Dissenting Shareholder whose demand remains unsettled the
amount demanded. If a proceeding is commenced, the court must determine all
costs of the proceeding and must assess those costs against the Bank, except
that the court may assess costs against all or some of the Dissenting
Shareholders to the extent the court finds that the Dissenting Shareholders did
not act in good faith related to the Estimate and Demand.
The foregoing discussion is a summary of the material provisions of
Article 15. Shareholders are strongly encouraged to review carefully the full
text of Article 15, which is included as Appendix B to this Proxy Statement. The
provisions of Article 15 are technical and complex, and a shareholder failing to
comply strictly with them may forfeit his or her Dissenting Shareholder's
rights. Any shareholder who intends to dissent from the Reorganization should
review the text of those provisions carefully and also should consult with his
attorney. No further notice of the events giving rise to dissenters' rights or
any steps associated therewith will be furnished to Bank shareholders, except as
indicated above or otherwise required by law.
Any Dissenting Shareholder who perfects his/her right to be paid the
fair value of his/her shares will recognize gain or loss, if any, for federal
income tax purposes upon the receipt of cash for his/her shares. The amount of
gain or loss and its character as ordinary or capital gain or loss will be
determined in
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<PAGE>
accordance with applicable provisions of the Internal Revenue Code. See "The
Reorganization-Certain Federal Income Tax Consequences."
Historical and Pro Forma Capitalization
The table below sets forth the capitalization of the Bank as of June
30, 1996, and the pro forma capitalization of the Bank and Holding Company as
adjusted to reflect the consummation of the Reorganization.
Holding
Prior to the Reorganization Bank Company
---------- -------
Number of shares of Capital Stock
Authorized Common Stock ..................... 5,000,000 0
Issued and Outstanding Common Stock ......... 2,000,000 0
Shareholders' Equity
Common Stock ................................ $20,000,000 $ 0
Surplus ..................................... 3,554,034 0
Undivided Profits ........................... 12,376,603 0
Net Unrealized Gains on Securities Available-
for-Sale, Net of Tax Effect ............. (351,066) 0
----------- ---
Total Shareholders' Equity ....................... $35,579,571 0
=========== ===
Pro Forma
---------
Holding
After the Reorganization (1) Bank Company
---- -------
Number of shares of Common Stock
Authorized Common Stock...................... 5,000,000 5,000,000
Issued and Outstanding Common Stock ......... 2,000,000 2,000,000
Shareholders' Equity (2)
Common Stock................................. $20,000,000 $10,000,000
Surplus...................................... 3,554,034 25,579,571
Undivided Profits............................ 12,376,603
Net Unrealized Gains on Securities Available-
for-Sale, Net of Tax Effect.............. (351,066)
-----------
Total Shareholders' Equity $35,579,571 $35,579,571
=========== ===========
- -----------------
(1) It is intended that the Reorganization will receive accounting treatment
similar to that for a pooling of interests.
(2) At the Effective Date, each of the issued and outstanding shares of Bank
common stock, par value $10.00 will be converted into and become one share
of Holding Company common stock, par value $5.00, and the shareholders of
the Bank will thereupon become shareholders of the Holding Company. The
Holding Company will then own all the outstanding shares of Bank common
stock.
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Future Plans for the Holding Company
Although the determination has not yet been made, the Board of
Directors of the Holding Company expect to review the Holding Company's Articles
of Incorporation and Bylaws soon after the Reorganization is consummated.
Specifically, the Board of Directors intends to consider restating the Articles
of Incorporation and the Bylaws to provide for greater indemnification of
officers and directors, limitation of liability for officer and directors,
authorization of preferred stock, and certain changes which may make a takeover
of the Holding Company without Board of Directors approval more difficult to
accomplish. Any such changes would have to be submitted to the shareholders for
review and approval before they could become effective.
THE BOARD OF DIRECTORS OF PLANTERS BANK & TRUST COMPANY OF VIRGINIA
RECOMMENDS THAT SHAREHOLDERS VOTE TO APPROVE THE AGREEMENT
16
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PLANTERS BANK & TRUST COMPANY OF VIRGINIA
The Bank
General
On October 1, 1977 Augusta Bank & Trust Company and Planters Bank &
Trust Company merged under the charter of Augusta Bank & Trust Company with the
name changed to Planters Bank & Trust Company of Virginia and its main office
located at the intersection of U.S. Route 250 and State Route 640. In May 1987,
the main office was moved to 24 South Augusta Street, Staunton, Virginia. Prior
to the merger, Augusta Bank & Trust Company was a bank organized under the laws
of the Commonwealth of Virginia on October 29, 1971, and began business
September 1, 1972 with its main office located on U.S. Route 250 and State Route
640, Fishersville, Virginia. Planters Bank & Trust Company, before the merger,
was a bank organized under the laws of the Commonwealth of Virginia on September
13, 1911, opened for business November 21, 1911 with its main office at 24 South
Augusta Street, Staunton, Virginia,
Securities of the Bank consist of one class -- Common Stock. There are
2,000,000 shares outstanding held of record by 1,083 stockholders as of June 30,
1996. The Bank is authorized to issue the aggregate number of five million
(5,000,000) shares of Common Stock of the par value of ten dollars ($10.00) per
share.
The Bank's main office is located at 24 South Augusta Street, Staunton,
Virginia. Branch offices are located in Staunton, Virginia, at (1) 2307 West
Beverley Street, (2) 2201 North Augusta Street, and (3) 1135 Richmond Road.
Branches are located in Augusta County at (1) 132 Greenville Road, Stuarts
Draft, (2) U.S. Route 11 in Verona, (3) 1480 Greenville Avenue, Staunton and (4)
the intersection of U.S. Route 250 and State Route 640 in Fishersville. A branch
is located in Waynesboro, Virginia, at the intersection of North Poplar and Ohio
Streets. A branch is located in Rockingham County at 106 Sixth Street, Grottoes,
Virginia. The Bank employs one hundred and fifty-five (155) full-time employees
and nineteen (19) part-time employees.
The Bank's trade area includes approximately 80% of Augusta county,
Virginia, and encompasses the independent cities of Staunton, Waynesboro and the
Grottoes, Virginia area in Rockingham County. The population of the trade area
is estimated to be approximately 105,000.
During the preceding three years, the Bank increased in total assets
and in the number of customers served by both acquisition and expansion.
The Bank, on April 15, 1994, purchased the Grottoes, Virginia office of
First Union National Bank of Virginia, and operates this facility as a branch of
the Bank.
The Bank, in January 1996, formed Planters Insurance Agency, Inc., a
wholly-owned subsidiary of the Bank, which is licensed to sell title insurance.
17
<PAGE>
Competition
Based upon total assets at December 31,1995, the Bank is the largest
community-based bank or thrift institution among those institutions with its
parent company headquartered in Staunton. However, the Bank continues to face
significant competition both in making loans and in attracting deposits. The
Bank's competition comes not only from commercial banks and savings banks, but
also from savings and loan associations, mortgage banking subsidiaries of
regional commercial banks, subsidiaries of national mortgage bankers, insurance
companies, and other institutional lenders. Specifically, NationsBank, First
Virginia Bank-Shenandoah Valley, Jefferson National Bank, First Union National
Bank of Virginia, Crestar Bank, Shenandoah National Bank, F&M Bank-Massanutten,
Bank of Rockbridge, and Community Federal Savings Bank operate a total of 30
offices within the trade area of the Bank. Many of these larger institutions
offer a wide array of banking products at competitive prices based upon a larger
customer base than the Bank's. Also, management of the Bank believes competition
will continue to increase as a result of the reduction in the restrictions on
interstate operations of financial institutions. In addition, the Bank competes
for deposits from short-term money market mutual funds and other corporate and
government securities funds.
Description of Common Stock
The only capital stock of the Bank is its common stock, par value
$10.00 per share, of which 5,000,000 shares are authorized and 2,000,000 shares
were issued and outstanding as of June 30, 1996.
The holders of Bank common stock are entitled to dividends, out of
funds legally available therefor, when and as declared by the Board of
Directors. Holders of Bank common stock are entitled to one vote for each share
held. Holders do not possess cumulative voting rights in the election of
directors or preemptive rights to purchase additional shares of Bank common
stock.
In the event of liquidation of the Bank, after payment of all debts and
expenses, the remaining assets of the Bank would be distributed to the holders
of Bank common stock ratably according to the number of shares held by each of
them.
The outstanding shares of Bank common stock are fully paid and
nonassessable.
The Bank acts as its own transfer agent for its common stock.
The Bank furnishes its shareholders with annual reports which contain
audited consolidated financial statements for the Bank for the prior three years
and summary financial information for the prior five-year period.
Market for Bank Common Stock
The Bank's stock is not listed for trading on a registered exchange or
quoted on the National Association of Securities Dealers Automated Quotation
(NASDAQ) System, and trades in the Bank's stock occur infrequently on a local
basis. Accordingly, there is no established public trading market for shares of
the Bank's stock, and quotations set forth below do not necessarily reflect the
price that would be
18
<PAGE>
paid in an active and liquid market. While there are no "market makers," local
brokerage offices will match or pair "buy" and "sell" orders. As of June 30,
1996, the Bank had 1,083 shareholders of record.
Management understands that several transfers have occurred since
year-end in which the price per share ranged from $37.00 to $43.00. To the best
knowledge of management, the most recent trade in Bank stock was on September
19, 1996, in the amount of 50 shares at a sales price of $43.00 per share.
It is expected that, at least initially, Holding Company common stock
will be traded in a manner essentially similar to Bank common stock.
There can be no assurance as to the market or trading value of Holding
Company Common Stock at the Effective Date or at any time thereafter.
DESCRIPTION OF HOLDING COMPANY CAPITAL STOCK
Authorized and Outstanding Capital Stock
The Holding Company is authorized to issue up to 5,000,000 shares of
its common stock, par value $5.00 per share. As of June 30, 1996, the Bank had
2,000,000 shares of Common Stock outstanding held by 1,083 shareholders of
record. No shares of preferred stock were issued or authorized by the Bank. The
following summary description of the capital stock of the Holding Company is
qualified in its entirety by reference to the Articles of Incorporation of the
Holding Company (the "Holding Company's Articles") and the Holding Company's
Bylaws, copies of which are available upon written request to the Cashier of the
Bank at its principal office.
Common Stock
The holders of Holding Company Common Stock are entitled to one vote
per share on all matters submitted to a vote of shareholders. Subject to certain
limitations on the payment of dividends, holders of Holding Company Common Stock
are entitled to receive dividends when declared by the Holding Company's Board
of Directors for which funds are legally available.
All shares of Holding Company Common Stock to be issued in the
Reorganization are fully paid (or will be fully paid) and nonassessable. Holders
of common stock will not be entitled to cumulative voting rights. Therefore, the
holders of a majority of the shares voted in the election of directors can elect
all of the directors then standing for election, subject to the rights of
holders of preferred stock, if and when authorized and issued. Holders of common
stock have no preemptive or other subscription rights, and there are no
conversion rights or redemption or sinking fund provisions with respect to the
common stock.
Dividends
19
<PAGE>
The holders of Holding Company Common Stock will be entitled to share
ratably in dividends when and as declared by the Holding Company Board of
Directors out of funds legally available therefor. The principal sources of
income to Holding Company will be dividends from the Bank.
The Bank, as a Virginia chartered bank, is prohibited from paying a
dividend that would impair its paid-in-capital. In addition, the Virginia SCC
may limit the payment by an Virginia chartered bank if it determines that the
limitation is in the public interest and is necessary to ensure a bank's
financial soundness.
Under current federal law, insured depository institutions, such as the
Bank, are prohibited from making capital distributions, including the payment of
dividends, if, after making such distribution, the institution would become
"undercapitalized" (as such term is defined in federal law). Based on the Banks'
current financial condition, the Holding Company does not expect that this
provision will have any impact on its ability to obtain dividends from its
insured depository institution subsidiary.
As a result of these legal restrictions, there can be no assurance that
the dividends would be paid in the future by the Holding Company's bank
subsidiary. The final determination of the timing, amount and payment of
dividends on the Holding Company Common Stock is at the discretion of the
Holding Company's Board of Directors and will depend upon the earnings of the
Holding Company and the Bank, the financial condition of the Holding Company and
other factors, including general economic conditions and applicable governmental
regulations and policies.
COMPARATIVE RIGHTS OF SHAREHOLDERS
General
The Bank is a state bank organized as a Virginia corporation and,
therefore, subject to the provisions of the Virginia SCA. Shareholders of the
Bank, whose rights are governed by the Bank's Articles of Incorporation and
Bylaws, will become shareholders of the Holding Company upon consummation of the
Reorganization. Upon consummation of the Reorganization, the rights of
shareholders of the Holding Company will be governed by the Holding Company's
Articles and Bylaws and by the Virginia SCA.
Except as otherwise discussed below, there are no material differences
between the rights of the Bank's shareholders and the rights of shareholders
receiving Holding Company Common Stock in the Reorganization. The Articles of
Incorporation and the Bylaws of the Bank and the Holding Company are
substantially identical in all respects. However, management may at some point
consider amendment of the Articles of Incorporation or Bylaws of the Holding
Company subsequent to consummation of the Reorganization, but no such specific
amendments are contemplated at this time. As required by Virginia law, the
shareholders of the Bank and its successor will be solicited separately related
to such proposals and will have an opportunity to vote on matters requiring such
vote.
The rights of the shareholders of the Bank and the Holding Company are
virtually identical in all respects. Neither group has preemptive rights to
subscribe for and purchase additional shares of stock or cumulative voting
rights with respect to the election of directors. In addition, there will be no
increase in
20
<PAGE>
the number of authorized shares of common stock for issuance by the Holding
Company. The Holding Company's Articles of Incorporation do not at this time
authorize the issuance of any preferred class of stock, significantly change the
maximum or minimum number of directors permitted to serve on the Board of
Directors, affect the terms for removal of directors, vary the vote required to
approve certain significant corporate actions, nor change the limitation of
liability and indemnification provisions applicable to officers and directors,
in any respect from that currently applicable under the Bank's Articles of
Incorporation and Bylaws.
In transactions involving mergers of Virginia banks which are governed
by Article 5 of the Virginia Banking Act, shareholders of state banks do not
have any dissenters' rights under the Virginia SCA. Therefore, if the Bank were
to engage in a merger transaction with another Virginia bank or national bank
doing business in the state, the shareholders of the Bank would not have the
right to dissent under Article 15 of the Virginia SCA. Conversely, if the
Holding Company were to merge with another entity, the shareholders of the
Holding Company would have the right to dissent from the transaction.
REGULATION AND SUPERVISION
The Bank
The Bank operates, and upon consummation of the Reorganization will
continue to operate, as a state banking association subject to supervision and
regulation by the Bureau of Financial Institutions of the SCC. The Bureau of
Financial Institutions regulates all areas of a state bank's commercial banking
and trust operations including reserves, loans, mergers, payment of dividends,
establishment of branches and other aspects of operations.
Additionally, the Bank is and will be insured by and continue to be
subject to the regulations of the FDIC. The Bank is currently not a member of
the Federal Reserve System. A major function of the FDIC with respect to insured
member banks is to pay depositors to the extent provided by law in the event an
insured bank is closed without adequately providing for the claims of
depositors.
The earnings and growth of the banking industry are affected by the
general conditions of the economy and by the fiscal and monetary policies of the
Federal Government and its agencies, including the Federal Reserve Bank. The
Board of Governors regulates money and credit conditions and, as a result, has a
strong influence on interest rates and on general economic conditions. The
effect of such policies in the future on the business an earnings of the Bank
cannot be predicted with certainty.
The Holding Company
At the time the Holding Company acquires the shares of the Bank, and
thereby becomes a bank holding company within the meaning of the BHCA, it will
be registered as a bank holding company with the Federal Reserve Bank, and will
then be subject to ongoing regulation, supervision and examination by the
Federal Reserve Bank. The Holding Company will be required to file with the
Federal Reserve Bank periodic and annual reports and other information
concerning its own business operations and those of its subsidiaries. In
addition, the BHCA requires a bank holding company to obtain Federal Reserve
Bank approval before it acquires, directly or indirectly, ownership or control
of any voting shares of a second or subsequent bank if, after such acquisition,
it would own or control more than 5% of such shares, unless it
21
<PAGE>
already owns or controls a majority of such voting shares. Federal Reserve Bank
approval must also be obtained before a bank holding company acquires all or
substantially all of the assets of another bank or merges or consolidates with
another bank holding company. Any acquisition by a bank holding company of more
than 5% of the voting shares, or of all or substantially all of the assets, of a
bank located in another state may not be approved by the Federal Reserve Bank
unless such acquisition is specifically authorized by the laws of that second
state.
A bank holding company is prohibited under the BHCA, with limited
exceptions, from acquiring or obtaining direct or indirect ownership or control
of more than 5% of the voting shares of any company which is not a bank, or from
engaging in any activities other than those of banking or of managing or
controlling banks or furnishing services to or performing services for its
subsidiaries. One of the exceptions to these prohibitions permits a bank holding
company to engage in, or acquire an interest in a company which engages in
activities which, after due notice and opportunity for hearing, the Federal
Reserve Bank by regulation or order has determined is so closely related to
banking or of managing or controlling banks as to be a proper incident thereto.
Specific non-banking activities which current regulations of the Federal Reserve
Bank state are sufficiently closely related to banking include, among others:
(1) making or acquiring loans and other extensions of credit such as would be
made by mortgage, finance, credit card or factoring companies; (2) operating as
an industrial bank; (3) performing the functions of a trust company; (4) acting
as an investment or financial advisor; (5) leasing real or personal property or
acting as agent, broker, or adviser in leasing such property; (6) making
investments to promote community welfare; (7) providing bookkeeping or data
processing services; (8) acting as an insurance agent or broker with respect to
insurance that is directly related to the extension of credit or other financial
services; (9) providing certain types of courier services; (10) providing
certain kinds of management consulting advice to nonaffiliated banks; (11)
selling at retail money orders having a face value of not more than $1,000,
travelers' checks, and U.S. savings bonds; (12) performing appraisals of real
estate and personal property; (13) providing securities brokerage services; (14)
underwriting and dealing in obligations of the United States, general
obligations of state and political subdivisions, and certain other bank-eligible
securities; (15) providing information regarding foreign exchange markets; (16)
performing certain services in connection with the execution and performance of
certain futures contracts; (17) providing consumer financial counseling; (18)
providing check guaranty services; and (19) operating a collection agency or
credit bureau. Other financially related activities have been permitted by the
Federal Reserve Bank by order on a case-by-case basis. At the present time, the
Holding Company has no plans to engage in any nonbanking activities permissible
for bank holding companies, but it may at some future date choose to do so.
A bank holding company and its subsidiaries are prohibited from
engaging in certain tie-in arrangements in connection with the provision of any
credit, property or services. Thus, the subsidiary of a bank holding company may
not extend credit, lease or sell property, furnish any services or fix or vary
the consideration for these activities on the condition that (1) the customer
must obtain some additional credit, property or services from, or provide
additional property or services to, the bank holding company or any subsidiary
thereof, or (2) the customer may not obtain some other credit property or
services from a competitor, except to the extent reasonable conditions are
imposed to insure the soundness of credit extended.
A bank holding company may not, without providing prior notice to the
Federal Reserve Bank, purchase or redeem its own stock if the gross
consideration to be paid, when added to the net consideration paid by the
company for all purchases or redemptions by the company of its equity securities
within the preceding 12 months, will equal 10% or more of the company's
consolidated net worth.
22
<PAGE>
Under certain amendments to the Virginia Financial Institutions Holding
Company Act that became effective July 1, 1983, no corporation, partnership or
other business entity may acquire, or make any public offer to acquire, more
than 5% of the stock of any Virginia financial institution, or any Virginia
financial institution holding company, unless it first files an application with
the SCC. The SCC is directed by the statute to solicit the views of the affected
financial institution, or financial institution holding company, with respect to
such stock acquisition, and is empowered to conduct an investigation during the
60 days following receipt of such an application. If the SCC takes no action
within the prescribed period, or if during the prescribed period it issues
notice of its intent not to disapprove an application, the acquisition may be
completed. The BHCA may disapprove an application or approve an application
subject to such conditions as it may deem advisable.
In addition to the filings required by the Federal Reserve Bank as
discussed above, the Holding Company, upon consummation of the Reorganization
and on a continuing basis thereafter, will be required to make certain periodic
filings with the Securities and Exchange Commission (the "SEC") as well as file
certain reports on the occurrence of certain material events specified in the
Securities and Exchange Act of 1934, as amended (the "1934 Act"). The Holding
Company will be required to file quarterly and annual reports with the SEC under
Section 13 of the 1934 Act, furnish annual reports to shareholders prior to
annual meetings of shareholders, and send proxy statements to shareholders prior
to any shareholders' meeting, all of which must comply with the provisions of
the 1934 Act. In addition, directors, officers and certain shareholders must
make some detailed disclosures under the 1934 Act.
LEGAL MATTERS
The legality of Holding Company common stock to be issued pursuant to
the Reorganization will be passed upon for the Holding Company by the law firm
of Mays & Valentine, Richmond, Virginia, which has acted as counsel to the Bank
and the Holding Company in connection with the Reorganization.
SHAREHOLDER PROPOSALS
In the event the Reorganization is consummated prior to the scheduled
1997 Annual Meeting of Shareholders of the Bank, the Holding Company will be
conducting such annual meeting of shareholders. Shareholder proposals intended
to be presented at the Bank's 1997 Annual Meeting, or, in lieu thereof, the
Holding Company's 1997 Annual Meeting, must be submitted to the Bank by December
1, 1996 in order to be considered for inclusion in the proxy materials for such
meeting.
<PAGE>
APPENDIX A
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION is made and entered into as of
July 30, 1996, by and among Virginia Financial Corporation a proposed bank
holding company organized under the laws of Virginia, with its principal office
in Staunton, Virginia (the "Holding Company"), and Planters Bank & Trust Company
of Virginia, a banking corporation organized under the laws of the Commonwealth
of Virginia, with its Main Office in Staunton, Virginia (the "Bank").
WITNESSETH:
The respective Boards of Directors of the Holding Company and the Bank
have resolved that the reorganization of the Bank under a holding company
structure pursuant to a statutory share exchange transaction under The Virginia
Stock Corporation Act (the "Share Exchange") so that the Bank will become a
wholly-owned subsidiary of the Holding Company, is in the respective best
interests of the constituent corporations and their shareholders. To that end,
each such Board has approved this Agreement and Plan of Reorganization.
NOW THEREFORE, in consideration of the mutual agreements set forth
herein, the constituent corporations agree as follows:
1. The Share Exchange. At the Effective Date of the Share Exchange, the
Bank shall become a banking subsidiary of the Holding Company. The Share
Exchange shall be effective upon the issuance of a Certificate of Share Exchange
by The Virginia State Corporation Commission upon filing of a Plan of Share
Exchange by the Constituent Corporations, substantially in the form attached
hereto as Appendix I.
2. Name; Articles of Incorporation; Bylaws; Offices. At the Effective
Date, the name, articles and bylaws of the Bank will not change. The main office
and branches of the Bank immediately prior to the Share Exchange shall not
change as a result of the Share Exchange.
3. Conversion of Shares. Upon, and by reason of, the Share Exchange
becoming effective pursuant to the issuance of a Certificate of Share Exchange
by the Virginia State Corporation Commission (the "Effective Date"), no cash
shall be allocated to the shareholders of the Bank, and stock shall be issued
and allocated as follows:
(a) Each of the issued and outstanding shares of common stock of
the Bank ("Bank Common Stock") shall be automatically exchanged for one share of
common stock of the Holding Company ("Holding Company Common Stock").
Outstanding certificates representing shares of Bank Common Stock will
thereafter represent an equal number of shares of Holding Company Common Stock.
As soon a practicable thereafter, the Holding Company will issue new stock
certificates representing the additional shares of Holding Company Common Stock
received in the Share Exchange. Each holder of Bank Common Stock, upon the
surrender of his Bank stock
<PAGE>
certificates to the Holding Company duly endorsed for transfer, will be entitled
to receive in exchange therefor a certificate or certificates representing an
equivalent number of shares of Holding Company Common Stock, but shareholders
will not be required to surrender their Bank stock certificates.
(b) Shares of Bank Common Stock issued and outstanding shall, by
virtue of the Share Exchange, continue to be issued and outstanding shares held
by the Holding Company.
4. Capital of the Bank. The capital, surplus and undivided profits of
the Bank at the Effective Date will be equal to the capital structure of the
Bank at June 30, 1996, adjusted, however, for capital contributions, normal
earnings and expenses, and other capital changes between June 30, 1996, and the
Effective Date.
5. Board of Directors; Officers. (a) At the Effective Date, the boards
of directors of the Bank and the Holding Company shall continue to serve as the
directors of the Bank and the Holding Company, respectively, except as otherwise
determined in the discretion of the Boards prior to the Effective Date, until
the next annual meeting or until such time as their successors have been elected
and qualified.
(b) At the Effective Date, the respective officers of the Bank
and the Holding Company shall continue to serve in their then current positions
until such time as their successors have been elected or appointed.
6. Rights of Dissenting Shareholders. Shareholders of the Bank who
dissent from the Share Exchange will not be entitled to the dissenters' rights
and remedies set forth in the provisions of Sections 13.1-729 et seq. of The
Virginia Stock Corporation Act.
7. Conditions to the Share Exchange. Consummation of the Share Exchange
is conditioned upon (i) the approval of this Agreement by the affirmative vote
of the shareholders owning more than two-thirds of the outstanding shares of
common stock of the Bank at a meeting to be held on the call of its board of
directors, (ii) the receipt of the required regulatory approvals, and (iii) the
receipt of an opinion of counsel as to the tax-free nature of the transaction.
Upon the satisfaction of the foregoing conditions, the Share Exchange shall
become effective at the time specified in a Certificate of Share Exchange to be
issued by the Virginia State Corporation Commission approving the Share
Exchange.
8. Termination. This Agreement may be terminated by the unilateral
action of either of the boards of directors of the Bank or the Holding Company
prior to the approval of the Agreement by the Bank's shareholders or by the
mutual consent of the respective boards of directors of the Bank and the Holding
Company after the Bank's shareholders approve the transaction. Upon termination
for any reason, this Agreement shall be void and of no further effect, and there
shall be no liability by reason of this Agreement or the termination thereof on
the part of the Bank or the Holding Company or any of their directors, officers,
employees, agents or shareholders.
<PAGE>
WITNESS, the following signatures and seals for the parties, each
hereunto set by its President and attested by its Cashier or Secretary, pursuant
to duly authorized resolutions of its board of Directors.
[Signatures Omitted]
<PAGE>
APPENDIX I
PLAN OF SHARE EXCHANGE
BETWEEN
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
AND
VIRGINIA FINANCIAL CORPORATION
Pursuant to this Plan of Share Exchange ("Plan of Share Exchange"),
PLANTERS BANK & TRUST COMPANY OF VIRGINIA, a Virginia corporation (the "Bank"),
shall become a wholly owned subsidiary of VIRGINIA FINANCIAL CORPORATION (the
"Holding Company"), a Virginia corporation pursuant to a share exchange under
Section 13.1-717 of the Virginia Stock Corporation Act.
ARTICLE 1
Terms and Conditions of the Share Exchange
1.1 The Share Exchange. Pursuant to the Agreement and Plan of
Reorganization made and entered into as of July 30, 1996 (the "Reorganization
Agreement"), at the Effective Date, the Bank shall become a wholly owned
subsidiary of the Holding Company through the exchange of each outstanding share
of common stock of the Bank for shares of the common stock of the Holding
Company in accordance with Section 2.1 of this Plan of Share Exchange and
pursuant to a share exchange under Section 13.1-717 of the Virginia Stock
Corporation Act (the "Share Exchange"). At the Effective Date, the Share
Exchange shall have the effect as provide in Section 13.1-721 of the Virginia
Stock Corporation Act.
1.2 Name. When the Share Exchange is effected, the name of the Bank as
set forth in the Bank's Articles of Incorporation shall not change.
1.3 Articles of Incorporation and Bylaws. The Articles of Incorporation
and Bylaws of the Bank in effect immediately prior to the consummation of the
Share Exchange shall remain in effect following the Effective Date until
otherwise amended or repealed. The Articles of Incorporation and Bylaws of the
Holding Company in effect immediately prior to the consummation of the Share
Exchange shall remain in effect following the Effective Date until otherwise
amended or repealed.
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ARTICLE 2
Manner of Exchanging Shares
2.1 Exchange of Shares. Upon, and by reason of, the Share Exchange
becoming effective pursuant to the issuance of a Certificate of Share Exchange
by the Virginia State Corporation Commission, no cash, except as set forth in
section 2.3 below, shall be allocated to the shareholders of the Bank, and stock
shall be issued and allocated as follows:
(a) Each share of common stock, par value $10.00 per share, of
the Bank ("Bank Common Stock") issued and outstanding immediately prior to the
Effective Date shall be entitled to the exchange rights set forth in this
Section 2.1 or to their rights under Article 15 of the Virginia Stock
Corporation Act as set forth in Section 2.5 below. On the Effective Date, each
shareholder of the Bank immediately prior to the Effective Date shall be
entitled to exchange each such share of Bank Common Stock held for one share of
Holding Company Common Stock (the "Exchange Ratio"). Each holder of a
certificate which immediately prior to the Effective Date represented shares of
Bank Common Stock, upon the surrender of his Bank stock certificates to the
Holding Company, duly endorsed for transfer in accordance with Section 2.2
below, will be entitled to receive in exchange therefor a certificate or
certificates representing the number of shares of Holding Company Common Stock
that such Bank stock certificates shall entitle him to pursuant to the Exchange
Ratio. After the Effective Date, each such former holder of Bank Common Stock
shall have the right to receive (i) any dividend or other distribution payable
at or as of any time after the Effective Date to holders of record of Holding
Company Common Stock at or as of any time after the Effective Date, and (ii) the
consideration described in Sections 2.1 and 2.3 upon the surrender of such
certificate in accordance with Section 2.2.
(b) Shares of Bank Common Stock issued and outstanding shall,
by virtue of the Share Exchange, continue to be issued and outstanding shares
and shall be denoted on the books and records of the Bank as held of record by
the Holding Company.
2.2 Manner of Exchange. As promptly as practicable after the Effective
Date, the Holding Company shall cause Planters Bank & Trust Company of Virginia,
or its duly appointed agent, acting as the exchange agent ("Exchange Agent") to
send to each former shareholder of record of the Bank immediately prior to the
Effective Date transmittal materials for use in exchanging such shareholder's
certificates of Bank Common Stock (other than shares held by shareholders who
perfect their dissenters' rights as provided under Section 2.5 hereof) for the
consideration set forth in Section 2.1 above and Section 2.3 below. Any
fractional share checks which a Bank shareholder shall be entitled to receive in
exchange for such shareholder's shares of Bank Common Stock, and any dividends
paid on any shares of Holding Company Common Stock that such shareholder shall
be entitled to receive prior to the delivery to the Exchange Agent of such
shareholder's certificates representing all of such shareholder's shares of Bank
Common Stock will be delivered to such shareholder only upon delivery to the
Exchange Agent of the certificates representing all of such shares (or indemnity
satisfactory to the Holding Company and the Exchange Agent, in their judgment,
if any of such certificates are lost, stolen or destroyed). No interest will be
paid on any such fractional share checks or dividends to which the holder of
such shares shall be entitled to receive upon such delivery.
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2.3 Fractional Shares. No fractional shares of Holding Company Common
Stock or scrip evidencing such fractional shares shall be issued, but in lieu
thereof, cash (without interest) in an amount equal to such fractional part of a
share of Holding Company Common Stock multiplied by market value of Bank Common
Stock as of the Effective Date will be paid by the Holding Company.
2.4 Voting and Dividends. Former shareholders of the Bank shall be
entitled to vote after the Effective Date at any meeting of Holding Company
shareholders the number of whole shares of Holding Company Common Stock for
which their shares of the Bank Common Stock are exchanged, regardless of whether
such holders have exchanged their certificates representing shares of the Bank
Common Stock. No dividend or other distribution payable to the holders of record
of Holding Company Common Stock at or as of any time after the Effective Date
shall be paid to the holder of any certificate representing shares of the Bank
Common Stock issued and outstanding at the Effective Date until such holder
physically surrenders such certificate for exchange as provided in Section 2.2
hereof, promptly after which time all such dividends or distributions shall be
paid (without interest).
2.5 Rights of Dissenting Shareholders. Shareholders of the Bank who
object to the Share Exchange will be entitled to the dissenters' rights and
remedies set forth in sections 13.1-729 through 13.1-741 of the Virginia Stock
Corporation Act.
ARTICLE 3
Termination
This Plan of Share Exchange may be terminated at any time prior to the
Effective Date by the parties hereto as provided in Article 8 of the
Reorganization Agreement.
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PROXY
PLANTERS BANK & TRUST COMPANY OF VIRGINIA
Solicited on Behalf of the Board of Directors
Martin F. Lightsey and Steven C. Corell or either of them, with power
of substitution to each, are hereby authorized to represent the undersigned and
vote all shares of Planters Bank & Trust Company of Virginia (the "Bank")
standing in the name of the undersigned at the Special Meeting of Shareholders
of the Bank to be held at 24 South Augusta Street, Staunton, Virginia, on
Thursday, November 14, 1996 at 7:30 p.m., or any adjournment thereof, on each of
the following matters.
1. Proposal to approve the Agreement and Plan of Reorganization dated as of
July 30, 1996, a copy of which is attached to the accompanying Proxy
Statement as Exhibit A, providing for the reorganization by share exchange
of the Bank into a wholly-owned subsidiary of Virginia Financial
Corporation, a Virginia corporation formed to serve as the holding company
for the Bank.
______FOR ______AGAINST ______ABSTAIN
2. The transaction of any other business which may properly come before the
Meeting. Management at present knows of no other business to be presented
at the Meeting.
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Abstentions and broker non-votes (shares held by customers which may
not be voted on certain matters because the broker has not received specific
instructions from the customer) have the effect of a vote against the proposal.
This proxy, when properly executed, will be voted in the manner
directed by the undersigned shareholder. If no direction is made, this proxy
will be voted FOR the proposal in Item 1.
When signing as attorney, executor, administrator, trustee or guardian,
please give full title. If more than one fiduciary, all should sign. All joint
owners MUST sign.
Date:__________________________
_______________________________
Signature
_______________________________
Signature if held jointly
PLEASE MARK, DATE, SIGN AND PROMPTLY RETURN
