U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________________ to _______________
Commission file number: 1-15513
PREMIER BANCORP, INC.
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(Exact name of small business issuer as specified in its charter)
Pennsylvania 23-2921058
------------------------------- ---------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
379 North Main Street, Doylestown, PA 18901
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(Address of principal executive offices)
(215) 345-5100
---------------------------
(Issuer's telephone number)
N/A
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No __
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date: 3,105,248 shares of $0.33
par value common stock issued and outstanding as of April 30, 2000.
Transitional Small Business Disclosure format (check one):
Yes __ No X
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1
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1 -- Financial Statements
PREMIER BANCORP, INC.
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(Unaudited)
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
-------------- -----------------
(Dollars in thousands, except share data)
<S> <C> <C>
Assets
Cash and due from banks $ 5,906 $ 4,646
Federal funds sold 12,244 3,436
Interest-bearing deposits 216 409
-------- --------
Cash and cash equivalents 18,366 8,491
Investment securities:
Held to maturity (fair value $6,644
in 2000 and $6,842 in 1999) 6,799 6,881
Available for sale (amortized cost
$103,636 in 2000 and $104,486 in 1999) 95,810 97,076
Loans receivable (net of allowance for loan
losses of $2,655 in 2000 and $2,511 in 1999) 204,567 196,121
Accrued interest receivable 2,664 2,174
Premises and equipment 4,119 3,807
Deferred taxes 3,484 3,342
Other assets 800 768
-------- --------
Total assets $336,609 $318,660
======== ========
Liabilities, minority interest in
subsidiaries and shareholders' equity
Deposits $262,901 $237,481
Borrowings 44,855 52,537
Accrued interest payable 2,834 2,364
Other liabilities 1,743 2,131
Subordinated debt 1,500 1,500
-------- --------
Total liabilities 313,833 296,013
Corporation-obligated mandatorily redeemable
capital securities of subsidiary trust
holding solely junior subordinated
debentures of the Corporation 10,000 10,000
Shareholders' equity
Common stock- $0.33 par value; 30,000,000
shares authorized; 3,078,914 shares
issued and outstanding at March 31, 2000
and December 31, 1999 1,016 1,016
Additional paid-in capital 11,662 11,662
Retained earnings 5,263 4,860
Accumulated other comprehensive loss (5,165) (4,891)
-------- --------
Total shareholders' equity 12,776 12,647
-------- --------
Total liabilities minority interest in
subsidiaries and shareholders' equity $336,609 $318,660
======== ========
</TABLE>
The accompanying notes are an integral part of
the consolidated financial statements.
2
<PAGE>
PREMIER BANCORP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended March 31, 2000 1999
- ------------------------------------ ---------- ----------
(Dollars in thousands,
except per share data)
<S> <C> <C>
Interest income:
Loans $ 4,343 $ 3,185
Federal funds sold and interest-bearing deposits 127 7
Investments:
Taxable 1,606 1,387
Tax-exempt 221 249
---------- ----------
Total interest income 6,297 4,828
Interest expense:
Deposits 2,647 1,991
Borrowings 833 458
---------- ----------
Total interest expense 3,480 2,449
---------- ----------
Net interest income 2,817 2,379
Provision for loan losses 150 167
---------- ----------
Net interest income after loan loss provision 2,667 2,212
Non-interest income:
Service charges and other fees 51 50
Loss, net, on sale of investment securities available for sale -- (47)
Gain on sale of loans held for sale 7 40
---------- ----------
Total non-interest income 58 43
Non-interest expense:
Salaries and employee benefits 1,045 683
Occupancy 148 107
Data processing 231 161
Professional services 106 46
Marketing 161 66
Minority interest in expense of subsidiaries 218 212
Other 305 221
---------- ----------
Total non-interest expense 2,214 1,496
---------- ----------
Income before income tax expense 511 759
Income tax expense 108 188
---------- ----------
Net income $ 403 $ 571
========== ==========
Earnings per share:
Basic $ 0.13 $ 0.20
Diluted $ 0.12 $ 0.18
Weighted average number of shares outstanding:
Basic 3,078,914 2,874,749
Diluted 3,447,761 3,200,144
</TABLE>
The accompanying notes are an integral part of
the consolidated financial statements.
3
<PAGE>
PREMIER BANCORP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the three months ended March 31, 2000 1999
- ------------------------------------ -------- ---------
(In thousands)
<S> <C> <C>
Operating activities:
Net income $ 403 $ 571
Adjustments to reconcile net income to cash provided
by operating activities:
Depreciation expense 108 79
Provision for loan losses 150 167
Amortization of premiums and discounts on
investment securities held to maturity 2 3
Amortization of premiums and discounts on
investment securities available for sale 28 36
Loss on sale of investment securities available for sale -- 47
Gain on sale of loans held for sale (7) (40)
Originations of loans held for sale (1,188) (2,928)
Proceeds from sale of loans held for sale 1,195 4,466
Increase in accrued interest receivable (490) (299)
Increase in other assets (33) (15)
Increase in deferred loan fees 37 44
Increase in accrued interest payable 470 383
Decrease in other liabilities (388) (375)
-------- --------
Net cash provided by operating activities 287 2,139
-------- --------
Investing activities:
Proceeds from sale of investment securities available for sale -- 5,003
Repayment of investment securities available for sale 872 1,166
Purchase of investment securities available for sale (50) (16,506)
Repayment of investment securities held to maturity 80 152
Net increase in loans receivable (8,632) (13,734)
Purchases of premises and equipment (420) (1,707)
-------- --------
Net cash used in investing activities (8,150) (25,626)
-------- --------
Financing activities:
Net increase in deposits 25,420 11,422
Net increase in borrowings less than 90 days 2,318 14,988
Repayment of borrowings greater than 90 days (10,000) --
Proceeds from common stock offering -- 2,839
-------- --------
Net cash provided by financing activities 17,738 29,249
-------- --------
Increase in cash and cash equivalents 9,875 5,762
Cash and cash equivalents:
Beginning of period 8,491 4,900
-------- --------
End of period $ 18,366 $ 10,662
======== ========
Supplemental disclosures:
Cash payments for:
Interest expense $ 3,010 $ 2,057
Taxes -- 250
Supplemental disclosure of noncash activities:
Change in the estimated fair value of investment securities
available for sale (416) (487)
Change in deferred tax asset related to investment securities
available for sale 142 166
</TABLE>
The accompanying notes are an integral part of
the consolidated financial statements.
4
<PAGE>
PREMIER BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Organization
Premier Bancorp, Inc. was incorporated under the laws of the Commonwealth
of Pennsylvania on July 15, 1997. We reorganized as the one-bank holding company
of Premier Bank on November 17, 1997. Premier Bancorp, Inc., through our
subsidiary bank, Premier Bank, provides a full range of banking services to
individual and corporate customers through our branch banking system located in
Bucks and Northampton Counties in Pennsylvania, all of which we manage as one
operating segment. Premier Bank is a Pennsylvania chartered commercial bank and
member of the Federal Reserve Bank of Philadelphia and the Federal Deposit
Insurance Corporation. The bank competes with other financial institutions and
other financial services companies with respect to services offered and
customers. We are regulated by certain federal and state agencies and are
periodically examined by them.
2. Basis of Financial Statement Presentation
The accompanying unaudited consolidated financial statements were prepared
in accordance with instructions for quarterly reports on Form 10-QSB and,
therefore, do not include information or footnotes necessary for a complete
presentation of financial condition, results of operations, shareholders' equity
and cash flows in conformity with generally accepted accounting principles. The
consolidated financial statements include the accounts of Premier Bancorp, Inc.
and our wholly owned subsidiaries, Premier Bank and PBI Capital Trust. All
significant intercompany accounts and transactions have been eliminated in the
consolidated financial statements. Certain previously reported amounts have been
reclassified to conform to current presentation standards. These
reclassifications had no effect on net income. The results of operations for the
three months ended March 31, 2000 and 1999 are not necessarily indicative of the
results that may be expected for the entire fiscal year. These quarterly
financial statements should be read in conjunction with the audited consolidated
financial statements and notes thereto for the year ended December 31, 1999.
3. Use of Estimates
In preparing the consolidated financial statements, management is required
to make estimates and assumptions that affect the reported amounts of 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 such estimates. Material estimates that are particularly susceptible to
significant change in the near term include the determination of the allowance
for loan losses and the carrying value of other real estate owned, if any.
4. Stock Dividend
On February 17, 2000, the company declared a 5% common stock dividend to
shareholders of record as of February 29, 2000 that was paid on March 10, 2000.
The number of shares and per share amounts have been restated to reflect this
event as of the earliest date presented in this Form 10-QSB.
5. Earnings Per Share
Basic earnings per share is calculated on the basis of the weighted average
number of shares outstanding after giving retroactive effect to the 5% common
stock dividend declared on February 17, 2000. Options to purchase 726,659 and
719,427 shares of common stock were outstanding at March 31, 2000 and 1999,
respectively. Earnings per diluted common share include dilutive common stock
equivalents as computed under the treasury stock method using average common
stock prices. Options to purchase 38,333 shares of common stock were
anti-dilutive and excluded from the calculation of earnings per diluted common
share for the three months ended March 31, 2000.
5
<PAGE>
PREMIER BANCORP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Earnings Per Share (continued)
The following is a reconciliation of the numerators and denominators of the
basic and diluted earnings per share calculations.
<TABLE>
<CAPTION>
For the three months ended March 31, 2000
------------------------------------------------------
(Dollars in thousands, except per share data)
Per share
Net income Shares Amount
---------- --------- ---------
<S> <C> <C> <C>
Basic earnings per share $ 403 3,078,914 $ 0.13
Effect of dilutive stock options -- 368,847 (0.01)
----- --------- ------
Earnings per diluted share $ 403 3,447,761 $ 0.12
===== ========= ======
</TABLE>
<TABLE>
<CAPTION>
For the three months ended March 31, 1999
------------------------------------------------------
(Dollars in thousands, except per share data)
Per share
Net income Shares Amount
---------- --------- ---------
<S> <C> <C> <C>
Basic earnings per share $ 571 2,874,749 $ 0.20
Effect of dilutive stock options -- 325,395 (0.02)
----- --------- ------
Earnings per diluted share $ 571 3,200,144 $ 0.18
===== ========= ======
</TABLE>
6. Comprehensive Income
The following table displays net income and the components of other
comprehensive income (loss) to arrive at total comprehensive income. For us, the
only component of other comprehensive income (loss) is the change in the
estimated fair value of investment securities available for sale.
<TABLE>
<CAPTION>
For the three months ended March 31, 2000 1999
- ------------------------------------ ----- -----
(Dollars in thousands)
<S> <C> <C>
Net income $ 403 $ 571
Other comprehensive loss, net of tax:
Unrealized losses on investment securities available for sale:
Unrealized holding losses during the period (274) (353)
Less: Reclassification adjustment for losses included in net income -- 31
----- -----
Other comprehensive loss, net of tax: (274) (322)
----- -----
Comprehensive income $ 129 $ 249
===== =====
</TABLE>
6
<PAGE>
Item 2 -- Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
We are a Pennsylvania business corporation and a registered bank holding
company headquartered in Doylestown, Bucks County, Pennsylvania. We were
incorporated on July 15, 1997 and reorganized on November 17, 1997 as the
one-bank holding company of Premier Bank. Each outstanding share of Premier Bank
common stock was converted into one share of Premier Bancorp, Inc. common stock
under the Plan of Reorganization approved by the bank's shareholders. Our
primary business is the operation of our wholly owned subsidiary, Premier Bank,
which we manage as a single business segment.
Premier Bank was organized in 1990 as a Pennsylvania chartered banking
institution and began operations on April 24, 1992. The bank is a
community-oriented financial services provider whose business primarily consists
of attracting retail deposits from the general public and small businesses and
originating commercial and consumer loans in its market area. The bank also
invests in securities such as mortgage-backed securities, obligations of U.S.
government agencies and government sponsored entities, corporate bonds and state
and municipal bonds.
The bank's revenues are derived principally from interest on its loan and
securities portfolios. The bank's primary sources of funds are deposits,
repayments, prepayments and maturities of loans, repayments, prepayments and
maturities of mortgage-backed and investment securities and borrowed funds.
Currently, the bank has five full-service Pennsylvania banking offices:
Doylestown, Easton, Southampton, Floral Vale and Bethlehem. The Bethlehem branch
opened on December 17, 1999. The bank plans to open its sixth branch in
Montgomeryville, Pennsylvania in the third quarter of 2000. The bank also has
two Pennsylvania loan production offices: Southampton and Colmar. The bank faces
significant competition from other financial services companies, many of which
are larger organizations with more resources and locations than the bank.
Our consolidated results of operations are dependent primarily on net
interest income, which is the difference between the interest income earned on
interest-earning assets, such as loans and securities, and the interest expense
paid on interest-bearing liabilities, such as deposits and borrowed money. We
also generate non-interest income such as service charges and other fees. Our
non-interest expenses primarily consist of employee compensation and benefits,
occupancy expenses, marketing, data processing costs and other operating
expenses. We are subject to losses from our loan portfolio if borrowers fail to
meet their obligations. Our results of operations are also significantly
affected by general economic and competitive conditions, particularly changes in
market interest rates, government policies and actions of regulatory agencies.
Our year 2000 performance will be challenged by the growth in overhead
expenses related to our franchise expansion into new markets and the increasing
competition for deposits and loans in our current interest rate environment.
Therefore, these items may impact our results of operations for 2000.
The following is management's discussion and analysis of the significant
changes in the results of operations for the three months ended March 31, 2000
as compared to the same period in 1999 and changes in financial condition from
December 31, 1999 to March 31, 2000. Current performance may not be indicative
of future performance. This discussion should be read in conjunction with the
1999 Annual Report on Form 10-KSB.
In addition to historical information, this management discussion and
analysis contains forward-looking statements. Forward-looking statements are
subject to certain risks and uncertainties that could cause actual results to
differ materially from those projected. We caution readers not to place undue
reliance on these forward-looking statements, which reflect management's
analysis only as of this date. We are not obligated to publicly revise or update
these forward-looking statements to reflect events or circumstances that arise
after this date. Readers should carefully review the risk factors described in
other documents we file from time to time with the Securities and Exchange
Commission, including annual reports on Form 10-KSB, quarterly reports on Form
10-QSB and any current reports on Form 8-K.
7
<PAGE>
Management Strategy
Our primary strategy is to increase loan and deposit market share in the
communities we serve and to expand our branch network to new markets as deemed
appropriate. We plan to accomplish this growth principally through pricing and
marketing. The bank opened its fourth branch office in Lower Makefield Township,
Bucks County, Pennsylvania (the Floral Vale branch) in February 1999 and its
fifth branch in Bethlehem, Northampton County, Pennsylvania on December 17,
1999. The Bank plans to open its sixth branch in Montgomeryville, Pennsylvania
in the third quarter of 2000.
We also try to maximize earnings, given our current level of capital and
interest rate sensitivity, by borrowing funds and purchasing investment
securities. Management continually monitors the quality of our loan and
investment portfolios. In addition, we use various asset/liability modeling
techniques to measure and manage the impact of interest rate changes on our net
interest income and capital.
We believe that a strong capital position is fundamental in order to
support the continued growth of the institution. Accordingly, management
continues to analyze capital raising alternatives.
8
<PAGE>
The following table sets forth, for the periods indicated, certain average
balance sheet amounts and their corresponding earnings/expenses and rates (which
have been annualized).
Average Balances, Rates and Interest Income and Expense Summary
<TABLE>
<CAPTION>
For the three months ended March 31, 2000 1999
- ------------------------------------ ------------------------------------ ------------------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
------------ ----------- ---------- ------------- ---------- ----------
Assets (Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest-bearing deposits $ 507 $ 7 5.55% $ 285 $ 2 2.85%
Federal funds sold 8,485 120 5.69% 430 5 4.72%
Investment securities available for sale
Taxable (1) 86,034 1,493 6.98% 76,997 1,298 6.84%
Tax-exempt (1) (2) 17,860 335 7.54% 19,743 377 7.74%
Investment securities held to maturity 6,999 113 6.49% 5,661 89 6.38%
------------- ----------- ---------- ------------- ---------- ----------
Total investment securities 110,893 1,941 7.04% 102,401 1,764 6.99%
Loans, net of unearned income (3) (4) 202,518 4,353 8.64% 146,535 3,196 8.85%
------------- ----------- ---------- ------------- ---------- ----------
Total earning assets 322,403 6,421 8.01% 249,651 4,967 8.07%
Cash and due from banks 5,411 4,042
Allowance for loan losses (2,577) (1,875)
Other assets (5) 7,702 6,537
------------- -------------
Total assets $332,939 $258,355
============= =============
Liabilities, minority interest in subsidiaries
and shareholders' equity
Interest checking $ 21,063 134 2.56% $ 15,907 103 2.63%
Money market deposit accounts 1,030 6 2.34% 1,882 12 2.59%
Savings accounts 52,303 453 3.48% 54,991 466 3.44%
Time deposits 148,261 2,054 5.57% 106,251 1,410 5.38%
------------- ----------- ---------- ------------- ---------- ----------
Total interest-bearing deposits 222,657 2,647 4.78% 179,031 1,991 4.51%
Short-term borrowings 55,309 801 5.82% 19,513 231 4.80%
Long-term borrowings -- -- -- 15,000 201 5.43%
------------- ----------- ---------- ------------- ---------- ----------
Total borrowings 55,309 801 5.82% 34,513 432 5.08%
Subordinated debt 1,500 32 8.58% 1,500 26 7.03%
------------- ----------- ---------- ------------- ---------- ----------
Total interest-bearing liabilities 279,466 3,480 5.01% 215,044 2,449 4.62%
Non interest-bearing deposits 21,205 16,720
Other liabilities 4,512 3,266
Capital securities 10,000 10,000
Shareholders' equity (6) 17,756 13,325
------------- -------------
Total liabilities, minority interest in
subsidiaries and shareholders' equity $332,939 $258,355
============= =============
Net interest income/rate spread $2,941 3.00% $2,518 3.45%
=========== ========== ========== ==========
Net interest margin (7) 3.67% 4.09%
Average interest-earning assets as a percentage
of average interest-bearing liabilities 115.36% 116.09%
</TABLE>
- -------------
(1) Excludes the SFAS 115 valuation allowance on investment securities
available for sale.
(2) Interest income on tax-exempt investment securities was presented on a
tax-equivalent basis. Tax-exempt yields were adjusted to a tax-equivalent
basis using a 34% rate.
(3) Includes non-accrual loans of $79,000 and $1,059,000 on average for the
three months ended March 31, 2000 and 1999, respectively.
(4) Includes tax-exempt loans of $1,128,000 and $1,258,000 on average for the
three months ended March 31, 2000 and 1999, respectively. Tax-exempt yields
were adjusted to a tax-equivalent basis using a 34% rate.
(5) Excludes the deferred tax asset related to the SFAS 115 valuation allowance
on investment securities available for sale.
(6) Excludes the SFAS 115 valuation allowance on investment securities
available for sale, net of tax.
(7) Net interest margin is calculated as net interest income divided by average
interest-earning assets.
9
<PAGE>
Results of Operations
We reported net income of $403,000 or $.12 per diluted share for the three
months ended March 31, 2000. This represents a decrease of $168,000 or 29% from
the net income of $571,000 or $.18 per diluted share reported for the same
period in 1999. Net income for the first quarter of 2000 was lower than the
first quarter of 1999 primarily due to an increase in overhead expenses despite
higher net interest income. Our overhead expenses increased $718,000 or 48%
during the first quarter of 2000 compared to the first quarter of 1999. In
connection with expanding our franchise we incurred expenses associated with a
new branch office in Bethlehem and a new loan production office in Colmar. Both
of these offices were opened during the fourth quarter of 1999. In addition, we
began to record costs related to our sixth branch that is expected to open in
Montgomeryville in the third quarter of 2000. The first quarter of 2000 also
included one-time charges of $115,000, before tax, related to two separate
discontinued internet banking initiatives, namely the elimination of a project
to develop a stand alone internet bank and the discontinuance of a marketing
program designed to generate deposits from communities outside our market area.
Return on average assets and return on average shareholders' equity were
.50% and 13.04%, respectively, for the three months ended March 31, 2000
compared to .90% and 18.06% for the same period in 1999. Return on average
shareholders' equity, exclusive of the unrealized loss on investment securities
available for sale was 9.13% for the three months ended March 31, 2000 compared
to 17.38% for the same period in 1999.
Net interest income
Net interest income is the most significant component of our operating
income. Net interest income depends upon the levels of interest-earning assets
and interest-bearing liabilities and the difference or "spread" between the
respective yields earned and rates paid. The interest rate spread is influenced
by the overall interest rate environment and by competition. During the past
year, the bank has aggressively grown its loan portfolio. Much of this growth
was funded by deposit generation. The bank continues to face strong competition
for both loans and deposits. This competition has and continues to put pressure
on our net interest margin.
For the three months ended March 31, 2000, net interest income, on a
tax-equivalent basis, was $423,000 higher than the same period in 1999. This
increase was primarily a function of asset growth which was offset in part by a
lower yield on average interest-earning assets, a higher rate on
interest-bearing liabilities and a lower ratio of average interest-earning
assets to average interest-bearing liabilities. Average interest-earning assets
grew $72,752,000 or 29% from $249,651,000 at March 31, 1999 to $322,403,000 at
March 31, 2000. Average investment and average loan balances increased
$8,492,000 and $55,983,000, respectively. The ratio of average interest-earning
assets to average interest-bearing liabilities decreased from 116.09% at March
31, 1999 to 115.36% at March 31, 2000. During 1999 and continuing through the
first quarter of 2000, overall interest rates moved higher. The average rate on
interest-bearing liabilities increased 39 basis points from 4.62% at March 31,
1999 to 5.01% at March 31, 2000. During the first quarter of 2000 the bank
raised $21,507,000 during a 23-month certificate of deposit promotion at 7%. The
increase in the average rate on interest-bearing liabilities is mostly related
to the aforementioned certificate of deposit promotion and the repricing of
short-term borrowings and variable rate subordinated debt. The net interest
margin decreased 42 basis points from 4.09% at March 31, 1999 to 3.67% at March
31, 2000. The net interest rate spread decreased 45 basis points from 3.45% at
March 31, 1999 to 3.00% at March 31, 2000.
During the first quarter of 1999, we used proceeds from our capital
securities issued in August 1998 to fund part of our asset growth. This had a
positive impact on the ratio of average interest-earning assets to average
interest-bearing liabilities ratio and net interest margin for the quarter ended
March 31, 1999. During the first quarter of 2000, most of our asset growth was
dependent on the growth in interest-bearing deposits.
10
<PAGE>
Non-interest income
Non-interest income consists primarily of service charges on deposits and
gains (losses) on the sale of investment securities available for sale and loans
held for sale. We continue to use an outside company to originate and sell
residential mortgages on our behalf.
Total non-interest income was $58,000 for the three months ended March 31,
2000 as compared to $43,000 for the same period in 1999. During the first
quarter of 1999 we recorded $47,000 in net losses on the sale of investment
securities available for sale while there were no security sales during the
first quarter of 2000. Gains on the sale of loans held for sale were $33,000
higher for the first quarter of 1999 compared to the first quarter of 2000. The
level of gains or losses on investment sales is primarily dependent upon the
volume of transactions, the types of securities sold, timing and the interest
rate environment among other factors.
Non-interest expense
For the three months ended March 31, 2000, non-interest expenses were
$2,214,000 or $718,000 higher than the $1,496,000 recorded during the same
period in 1999. Overhead expenses increased due to the continued growth of our
franchise, namely the opening of our Bethlehem branch and Colmar loan production
office in the fourth quarter of 1999. In addition we also began to incur
expenses related to our sixth branch which is expected to open in
Montgomeryville in the third quarter of 2000. The first quarter of 2000 also
included one-time charges of $115,000 before tax, related to two separate
discontinued internet banking initiatives.
Salaries and benefits were $362,000 higher in 2000, an increase of 53%, as
compared to 1999. This increase is principally due to an increase in the number
of employees and salary adjustments. The number of full-time equivalent
employees grew from 54 at March 31, 1999 to 69 at March 31, 2000. Data
processing costs increased $70,000 principally due to the growth of the
institution, variable costs associated with item processing and account volumes
and new services. Professional services were $60,000 higher due to the
outsourcing of our internal audit and loan review functions as well as
approximately $20,000 in expenses related to a discontinued internet project to
develop a stand alone internet bank apart from Premier Bank. Marketing expenses
were $95,000 higher in 2000 and included approximately $22,000 in expenses
related to a discontinued internet advertising program designed to generate
deposits from communities outside of our market area. Other expenses consist
primarily of furniture and equipment expense, employee travel, meals and
entertainment, stationery, supplies, postage and Board of Director fees. The
$84,000 increase in other expenses is principally attributed to the growth of
the institution and the accrual of cash compensation for members of the Board of
Directors. In prior years, Board members did not receive cash as compensation
for services. We expect overhead expenses to continue to trend higher in 2000 as
we continue to grow and expand our branch network.
Provision for loan losses
The provision for loan losses represents the amount necessary to be charged
to operations to bring the allowance for loan losses to a level that management
deems adequate to provide for known and inherent losses. The amount of the
provision for loan losses and the amount of the allowance for loan losses is
subject to ongoing analysis of the loan portfolio which considers current
economic conditions, actual loss experience, the current risk profile of the
portfolio, and the composition of loan types within the portfolio. Net
charge-offs were $6,000 and $13,000 for the three months ended March 31, 2000
and March 31, 1999, respectively. The bank's loan portfolio is relatively
immature given its recent growth rates. Therefore, charge-off and non-performing
trends may not be indicative of future performance.
The provision for loan losses was $150,000 and $167,000 for the three
months ended March 31, 2000 and March 31, 1999, respectively. The provision for
loan losses was lower during the first quarter of 2000 due to a smaller amount
of loan growth in 2000 as compared to the first quarter of 1999. The loan loss
allowance as a percentage of total loans was 1.28% at March 31, 2000 and 1.27%
at March 31, 1999.
11
<PAGE>
Income tax expense
We recorded a $108,000 or 21.1% tax provision for the three months ended
March 31, 2000 compared to $188,000 or 24.8% for the same period in 1999. The
effective tax rate for the three months ended March 31, 2000 was lower than the
comparable period in 1999 due principally to a higher ratio of tax-exempt
interest relative to total taxable income.
Financial Condition
Consolidated assets grew $17,949,000 or 5.6% during the three months ended
March 31, 2000. Federal funds sold and total loans grew $8,808,000 and
$8,627,000, respectively. Asset growth was primarily funded by a $25,420,000
increase in deposits. Most of this deposit growth was due to the promotion of a
23-month certificate of deposit product that totaled $21,507,000 at March 31,
2000. Borrowings decreased by $7,682,000 from $52,537,000 at December 31, 1999
to $44,855,000 at March 31, 2000. Shareholders' equity increased by $129,000
from $12,647,000 at December 31, 1999 to $12,776,000 at March 31, 2000. This
increase was attributable to $403,000 in earnings that were offset in part by
$274,000 in unrealized losses, net of tax, on investment securities available
for sale.
Investment securities
Investment securities are classified at the time of purchase by one of
three purposes: trading, available for sale (AFS) or held to maturity (HTM). To
date, we have not purchased any securities for trading purposes. We usually
classify securities, in particular mortgage-backed securities and corporate
bonds, as AFS to provide us the flexibility to sell certain securities and
adjust our balance sheet in response to capital levels, liquidity needs and/or
changes in market conditions. The carrying values for AFS and HTM securities
were $95,810,000 and $6,799,000, respectively, as of March 31, 2000. Total
investments decreased by $1,348,000 from $103,957,000 at December 31, 1999 to
$102,609,000 at March 31, 2000.
The estimated fair value of our investment securities available for sale
declined $416,000 from an unrealized loss of $7,410,000 at December 31, 1999 to
an unrealized loss of $7,826,000 at March 31, 2000. The estimated fair value of
fixed rate securities moved lower during the first quarter of 2000 principally
due to higher interest rates. At March 31, 2000, the majority of the unrealized
loss on investment securities available for sale related to our municipal and
corporate bond portfolios. At this time we plan to hold these investment
positions realizing it may be some time before market conditions improve.
Available for sale securities are recorded at fair value on the balance sheet
with an adjustment to equity, net of tax, and presented in the caption
"Accumulated other comprehensive income (loss)".
12
<PAGE>
Investment Portfolio
<TABLE>
<CAPTION>
March 31, 2000
-------------------------------------------------------------
Held to Maturity Available for Sale
--------------------------- ---------------------------
Amortized Estimated Amortized Estimated
Cost Fair Value Cost Fair Value
----------- ---------- --------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C>
U.S. government agency obligations $ 4,998 $ 4,861 $ 5,000 $ 4,987
Mortgage-backed securities 1,301 1,283 49,131 46,465
State and municipal securities -- -- 17,859 15,554
Equity securities -- -- 1,933 1,933
Corporate bonds -- -- 29,598 26,756
Other debt securities 500 500 115 115
-------- -------- -------- --------
Total $ 6,799 $ 6,644 $103,636 $ 95,810
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
December 31, 1999
-------------------------------------------------------------
Held to Maturity Available for Sale
--------------------------- ---------------------------
Amortized Estimated Amortized Estimated
Cost Fair Value Cost Fair Value
----------- ---------- --------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C>
U.S. government agency obligations $ 4,997 $ 4,976 $ 5,000 $ 4,998
Mortgage-backed securities 1,384 1,366 50,010 47,250
State and municipal securities -- -- 17,860 15,802
Equity securities -- -- 1,883 1,883
Corporate bonds -- -- 29,618 27,028
Other debt securities 500 500 115 115
-------- -------- -------- --------
Total $ 6,881 $ 6,842 $104,486 $ 97,076
======== ======== ======== ========
</TABLE>
Loans
Gross loans increased $8,627,000 from $199,224,000 at December 31, 1999 to
$207,851,000 at March 31, 2000. The majority of the loan portfolio is
collateralized, at least in part, by real estate in the greater Lehigh and
Delaware Valleys of Pennsylvania. Real estate values are typically subject to
risks associated with the general economy.
Inherent with the lending function is the evaluation and acceptance of
credit risk and interest rate risk. We manage credit risk through portfolio
diversification, underwriting policies and procedures, and loan monitoring
practices. We manage interest rate risk within our asset/liability framework
using various modeling techniques and analyses. Most of our loans are either
fixed rate for a period of five years or less or variable rate.
Our commercial lending activity is focused on small businesses and
professionals within the local community.
13
<PAGE>
Loan Portfolio
<TABLE>
<CAPTION>
March 31, 2000 % of Total December 31, 1999 % of Total
-------------- ---------- ----------------- ----------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Real estate-farmland $ 240 0.11% $ -- --
Real estate-construction 4,253 2.05% 3,850 1.93%
Real estate-residential 23,077 11.10% 30,330 15.22%
Real estate-multifamily 12,628 6.07% 9,738 4.89%
Real estate-commercial 138,819 66.79% 127,885 64.19%
Commercial 26,929 12.96% 25,260 12.69%
Consumer 1,905 0.92% 2,161 1.08%
--------- ------- --------- -------
Total loans 207,851 100.00% 199,224 100.00%
======= =======
Less:
Unearned income 629 592
Allowance for loan losses 2,655 2,511
--------- ---------
Total loans, net $ 204,567 $ 196,121
========= =========
</TABLE>
Allowance for loan losses
We maintain an allowance for loan losses and charge losses to this
allowance when such losses are considered probable. The allowance for loan
losses is maintained at a level that management considers adequate to provide
for known and inherent losses in the loan portfolio. Management's evaluation
includes such factors as current economic conditions, actual loss experience and
the current risk profile of the loan portfolio. Each commercial loan is assigned
a specific loan loss reserve using a scoring system. This scoring system takes
into consideration collateral type and value, loan to value ratios, the
borrower's risk rating, delinquency and other factors previously described.
Borrowers' risk ratings are determined by loan officers at the inception of each
loan and are subject to ongoing analysis and update by an independent loan
reviewer. Homogeneous loans, comprised primarily of home equity and non-real
estate secured consumer loans, are analyzed in the aggregate. Since the bank is
less than nine years old with a limited history for loan losses, management also
uses peer group analysis to gauge the overall reasonableness of its loan loss
allowance. While the allowance is determined and calculated based on specific
loans or loan categories, the total allowance is considered available for losses
in the entire loan portfolio. Changes in economic conditions and the financial
condition of borrowers can occur quickly and, as a result, impact our estimates.
Regulatory authorities, as an integral part of their examinations,
periodically review the allowance for loan losses. They may require additions to
the allowance based upon their judgment and information available to them at the
time of examination.
At March 31, 2000, the allowance for loan losses totaled $2,655,000,
representing 1.28% of outstanding loans receivable as compared to 1.26% and
1.27% at December 31, 1999 and March 31, 1999, respectively.
14
<PAGE>
The following table sets forth the activity in the allowance for loan
losses and certain key ratios for the periods indicated. The bank's loan
portfolio is relatively immature given its recent growth rates. Therefore,
current charge-off and non-performing asset trends may not be indicative of
future performance.
Allowance for Loan Losses
<TABLE>
<CAPTION>
For the three For the For the three
months ended year ended months ended
March 31, 2000 December 31, 1999 March 31, 1999
-------------- ----------------- --------------
(Dollars in thousands)
<S> <C> <C> <C>
Balance at beginning of period $ 2,511 $ 1,805 $ 1,805
Charge-offs
Real estate-residential 6 -- --
Commercial -- 2 2
Consumer -- 11 11
--------- --------- ---------
Total charge-offs 6 13 13
Recoveries -- -- --
--------- --------- ---------
Net charge-offs 6 13 13
Provision for loan losses 150 719 167
--------- --------- ---------
Balance at end of period $ 2,655 $ 2,511 $ 1,959
========= ========= =========
Total gross loans:
Average $ 203,166 $ 168,363 $ 147,083
End of period $ 207,851 $ 199,224 $ 154,068
Ratios:
Net charge-offs to:
Average loans -- 0.01% 0.01%
Loans at end of period -- 0.01% 0.01%
Allowance for loan losses 0.23% 0.52% 0.66%
Provision for loan losses 4.00% 1.81% 7.78%
Allowance for loan losses to:
Total gross loans at end of period 1.28% 1.26% 1.27%
Non-performing loans (1) (1) 130.95%
</TABLE>
- ----------------
(1) Ratio is not meaningful since the allowance for loan losses exceeds 2,600X
and 10X the amount of non-performing loans at March 31, 2000 and December
31, 1999, respectively.
15
<PAGE>
Non-performing assets
Non-performing assets are defined as accruing loans past due 90 days or
more, non-accruing loans, restructured loans and other real estate owned.
Non-Performing Assets
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
-------------- -----------------
(Dollars in thousands)
<S> <C> <C>
Loans past due 90 days or more and accruing
Real estate-residential $ -- $ 55
Commercial 1 1
---- ----
Total loans past due 90 days or more and accruing 1 56
Loans accounted for on a non-accrual basis
Real estate-residential -- 136
---- ----
Total non-accrual loans -- 136
---- ----
Total non-performing assets $ 1 $192
==== ====
Ratio of non-performing loans to total loans -- 0.10%
Ratio of non-performing assets to total assets -- 0.06%
</TABLE>
Total loans past due 90 days and accruing decreased $55,000 from $56,000 at
December 31, 1999 to $1,000 at March 31, 2000 due to the repayment of one loan
secured by residential property.
We had no non-accrual loans at March 31, 2000 compared to $136,000 at
December 31, 1999. The decrease relates to the repayment of one loan secured by
residential property in February 2000.
Premises and equipment
Premises and equipment increased $312,000 from $3,807,000 at December 31,
1999 to $4,119,000 at March 31, 2000. The increase relates primarily to the
purchase of property adjacent to our Bethlehem branch for a parking lot and the
purchase of additional furniture and equipment to support our growth.
Deferred taxes
The $142,000 increase in deferred taxes from $3,342,000 at December 31,
1999 to $3,484,000 at March 31, 2000 relates to the change in the estimated fair
value of investment securities available for sale.
16
<PAGE>
Deposits
Premier Bank, a traditional community-based bank, is largely dependent upon
its base of competitively priced core deposits to provide a stable funding
source. The bank has retained and grown its customer base since inception
through a combination of price, quality service, convenience, and a stable and
experienced staff. During the three months ended March 31, 2000 total deposits
grew $25,420,000 or 10.7% to $262,901,000. Core deposits, which exclude time
deposits greater than $100,000 grew $28,433,000 or 14.1% during the three months
ended March 31, 2000 to $229,670,000. Most of our deposit growth occurred in
time deposits. During the first quarter of 2000 the bank aggressively promoted
its 23-month certificate of deposit. This product accounted for $21,507,000 of
our total time deposits at March 31, 2000. Total time deposits at March 31, 2000
were $163,654,000 or 62.3% of total deposits, of which $51,368,000 mature after
one year. Depending on market conditions, management generally prices its time
deposits to extend maturities beyond one year.
The growth of mutual funds over the past decade have made it increasingly
difficult for community-based financial institutions like Premier Bank to
attract deposits as many consumers in search of higher returns have shifted
their investment dollars into the stock market and away from traditional bank
deposit products.
We expect to continue to grow our deposits through promotions, business
development programs, maturation of existing branches and branch expansion. We
opened our fifth branch in Bethlehem, Pennsylvania in December 1999. We expect
to open our sixth branch in Montgomeryville, Pennsylvania in the third quarter
of 2000.
Deposits by Major Classification
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
--------------------------------- -------------------------------
Weighted Weighted
Average Average
Interest % of Interest % of
Rate Amount Total Rate Amount Total
-------- -------- ------- --------- ------- -------
(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest checking 2.57% $ 21,969 8.37% 2.56% $ 21,249 8.95%
Money market 2.57% 1,149 0.43% 2.55% 1,000 0.42%
Savings 3.51% 53,669 20.41% 3.41% 51,224 21.57%
Time 5.76% 163,654 62.25% 5.46% 144,532 60.86%
----- -------- ------- ----- -------- -------
Total interest bearing deposits 4.95% 240,441 91.46% 4.68% 218,005 91.80%
Non-interest bearing deposits -- 22,460 8.54% -- 19,476 8.20%
----- -------- ------- ----- -------- -------
Total deposits 4.53% $262,901 100.00% 4.30% $237,481 100.00%
===== ======== ======= ===== ======== =======
</TABLE>
Borrowings
Borrowings decreased $7,682,000 from $52,537,000 at December 31, 1999 to
$44,855,000 at March 31, 2000.
At March 31, 2000 borrowings consisted of securities sold under agreement to
repurchase as follows:
o $18,000,000 from the Federal Home Loan Bank maturing within 30 days;
o $14,493,000 from an investment bank maturing within 60 days;
o $12,362,000 from customers maturing overnight.
At December 31, 1999 borrowings consisted of securities sold under agreement to
repurchase as follows:
o $27,500,000 from the Federal Home Loan Bank maturing within 90 days;
o $18,734,000 from investment banks maturing within 60 days;
o $6,303,000 from customers maturing overnight.
17
<PAGE>
The weighted average interest rate on borrowings was 5.76% and 5.80% at
March 31, 2000 and December 31, 1999, respectively.
All borrowings from the FHLB are secured by a blanket lien against all of
the bank's assets. In addition, the FHLB requires that borrowers who exceed 50%
of their maximum borrowing capacity deliver certain securities to them as
collateral. As of March 31, 2000 the bank delivered $32,367,000 in investments
as collateral to the FHLB under this policy. Repurchase agreements with
investment banks were secured by $15,387,000 in investment securities at March
31, 2000. Customer repurchase agreements are collateralized by investment
securities in an amount equal to or exceeding such borrowings. The company
controls the securities pledged as collateral for customer repurchase
agreements.
Other liabilities
Other liabilities decreased $388,000 from $2,131,000 at December 31, 1999
to $1,743,000 at March 31, 2000. This decrease relates principally to the timing
difference between the accrual and payment of normal recurring operating expense
and the expense associated with our capital securities.
Capital Adequacy
At March 31, 2000, we believe that the company is in compliance with all
applicable regulatory requirements to be classified as "well capitalized"
pursuant to FDIC regulations. We plan to remain well capitalized and manage the
bank accordingly.
The tables below depict our capital components and ratios along with the
"adequately" and "well" capitalized criteria as defined by FDIC regulations. At
March 31, 2000, we exceeded all regulatory requirements and are classified as
"well capitalized".
Capital Components
<TABLE>
<CAPTION>
March 31, 2000 December 31, 1999
-------------- -----------------
(Dollars in thousands)
<S> <C> <C>
Tier I
Shareholders' equity $ 12,776 $ 12,647
Allowable portion of minority interest in equity
of subsidiaries 5,981 5,846
Net unrealized security losses 5,165 4,891
-------- --------
Total Tier I Capital $ 23,922 $ 23,384
======== ========
Tier II
Allowable portion of minority interest in equity
of subsidiaries $ 4,019 $ 4,154
Allowable portion of the allowance for loan losses 2,655 2,511
Allowable portion of subordinated debt 1,500 1,500
-------- --------
Total Tier II Capital $ 8,174 $ 8,165
======== ========
Total Capital $ 32,096 $ 31,549
Risk-weighted assets 252,547 241,357
</TABLE>
18
<PAGE>
Capital Ratios
<TABLE>
<CAPTION>
"Adequately" "Well"
Capitalized Capitalized
March 31, 2000 December 31, 1999 Ratios Ratios
-------------- ----------------- ------------ -----------
<S> <C> <C> <C> <C>
Total risk-based capital/risk-weighted assets 12.71% 13.07% 8.00% 10.00%
Tier I capital/risk-weighted assets 9.47% 9.69% 4.00% 6.00%
Tier I capital/average assets (leverage ratio) 7.30% 7.33% 4.00% 5.00%
</TABLE>
Liquidity
Liquidity represents an institution's ability to generate cash or otherwise
obtain funds at reasonable rates to satisfy commitments to borrowers and demands
of depositors. Our primary sources of funds are deposits, proceeds from
principal and interest payments on loans, mortgage-backed securities and
investments, and borrowings. While maturities and scheduled amortization of
loans and investments are a predictable source of funds, deposit flows, loan
prepayments and mortgage-backed securities prepayments are influenced by
interest rates, economic conditions and competition.
For the three months ended March 31, 2000, operating and financing
activities provided cash and cash equivalents of $287,000 and $17,738,000,
respectively, while investing activities used $8,150,000. The cash provided by
financing activities resulted primarily from an increase in deposits. The
$25,420,000 increase in deposits was mostly due to the promotion of 23-month
certificates of deposit. This cash was primarily used for loan originations and
the repayment of borrowings. For the three months ended March 31, 2000 loans
grew $8,632,000 while investments decreased $902,000, exclusive of the change in
unrealized losses on securities available for sale.
For the three months ended March 31, 1999, operating and financing
activities provided cash and cash equivalents of $2,139,000 and $29,249,000,
respectively, while investing activities used $25,626,000. The cash provided by
financing activities resulted from an increase in deposits and borrowings and
the issuance of common stock. Deposits and borrowings grew $11,422,000 and
$14,988,000, respectively, while net proceeds from the common stock offering
totaled $2,839,000. This cash was primarily used for loan originations and the
purchase of mortgage-backed and other securities. For the three months ended
March 31, 1999, loans and investments grew $13,734,000 and $10,185,000,
respectively.
The bank monitors it liquidity position on a daily basis. The bank uses
overnight federal funds and interest-bearing deposits in other banks to absorb
daily excess liquidity. Conversely, overnight federal funds may be purchased to
satisfy daily liquidity needs. Federal funds are sold or purchased through a
correspondent bank, which diversifies the holdings to an approved group of
commercial banks throughout the country. If the bank requires funds beyond its
ability to generate them internally, additional sources of funds are available
through use of one of the following: $4,000,000 unsecured federal funds line of
credit with its correspondent bank, the bank's $35,474,000 borrowing limit at
the Federal Home Loan Bank of Pittsburgh or the bank's $28,344,000 secured line
of credit with the Federal Reserve Bank of Philadelphia. The bank could also
sell or borrow against certain investment securities. At March 31, 2000, the
bank had $18,000,000 in borrowings outstanding at the Federal Home Loan Bank and
$14,493,000 in reverse repurchase agreements with investment banks.
19
<PAGE>
Recent Accounting Pronouncements
Derivative instruments and hedging activities
In June 1998 the FASB issued Statement No. 133, "Accounting for Derivative
Instruments and Hedging Activities". This Statement standardizes the accounting
for derivative instruments, including certain derivative instruments imbedded in
other contracts, and those used for hedging activities, by requiring that an
entity recognize those items as assets or liabilities in the statement of
financial position and measure them at fair value. The Statement generally
provides for matching of gain or loss recognition on the hedging instrument with
the recognition of the changes in the fair value of the hedged asset or
liability that are attributable to the hedged risk, so long as the hedge is
effective. Prospective application of Statement No. 133 is required for all
fiscal quarters of fiscal years beginning after June 15, 2000, with earlier
adoption permitted. We have not yet determined the impact, if any, of this
Statement, including its provisions for the potential reclassifications of
investment securities, on earnings, financial condition or equity. However, we
currently have no derivatives covered by the Statement and conduct no hedging
activities.
Year 2000 Issues
We have experienced no material disruption in the operation of our business
as a result of the transition from 1999 to 2000. No future costs are anticipated
with respect to Year 2000 compliance. The bank continues to monitor its
information technology and non-information technology systems, as well as its
vendors, and suppliers to ensure continued Year 2000 compliance. Although we
will take all practical measures to prevent future problems related with the
Year 2000 issue, such problems and failures may occur which could seriously
affect the bank's operation. Because of the unprecedented nature of such
problems, the extent of the effect on the bank's operations, if any, cannot be
determined.
In total, we spent approximately $72,000 in external costs on this program
through March 31, 2000 and do not expect to incur any significant additional
costs related to Year 2000 compliance. While there can be no assurance that no
legal claims will arise due to perceived or real Year 2000 issues, the company
does not expect a material impact on its liquidity, financial position or
results of operations caused by internal Year 2000 issues or by possible claims
asserted by third parties.
We funded the costs related to our Year 2000 plan through cash flows from
operations.
20
<PAGE>
PART II -- OTHER INFORMATION
Item 1 -- Legal Proceedings
At March 31, 2000, there were no material legal proceedings pending against
the company.
Item 2 -- Changes in Securities and Use of Proceeds
None.
Item 3 -- Defaults Upon Senior Securities
None.
Item 4 -- Submission of Matters to a Vote of Security Holders
None.
Item 5 -- Other Information
None.
Item 6 -- Exhibits and Reports on Form 8-K
(a) The following exhibits are incorporated by reference herein or attached to
this Form 10-QSB:
3.1 Articles of Incorporation (Incorporated by reference to Exhibit 3i
to the Company's Registration Statement No. 333-34243 on Form S-4
filed with the SEC on August 22,1997 and as amended on September
9, 1997).
3.2 By-Laws (Incorporated by reference to Exhibit 3ii to the Company's
Registration Statement No. 333-34243 on Form S-4 filed with the
SEC on August 22,1997 and as amended on September 9, 1997).
10.1 Premier Bank's 1995 Incentive Stock Option Plan (Incorporated by
reference to Exhibit 99.6 to the Company's Registration Statement
No. 333-34243 on Form S-4 filed with the SEC on August 22,1997
and as amended on September 9, 1997).
10.2 Change of Control Agreement between Premier Bank and John C.
Soffronoff (Incorporated by reference to Exhibit 10.2 to the
Company's Quarterly Report on Form 10-QSB filed with the SEC on
November 13, 1998).
10.3 Change of Control Agreement between Premier Bank and John J.
Ginley (Incorporated by reference to Exhibit 10.3 to the Company's
Quarterly Report on Form 10-QSB filed with the SEC on November 13,
1998).
10.4 Change of Control Agreement between Premier Bank and Bruce E.
Sickel (Incorporated by reference to Exhibit 10.4 to the Company's
Quarterly Report on Form 10-QSB filed with the SEC on November 13,
1998).
11.1 Statement re: Computation of per share earnings (Included at
Note 5 of this Form 10-QSB).
27.1 Financial Data Schedule (Exhibit 27.1).
27.2 Restated Financial Data Schedule (Exhibit 27.2).
21
<PAGE>
Item 6 -- Exhibits and Reports on Form 8-K (continued)
(b) Form 8-K filed with the SEC on January 10, 2000 reported that, effective
December 30, 1999, Premier Bancorp, Inc.'s common stock began trading on
the American Stock Exchange under the trading symbol "PPA." A press release
and letter to shareholders concerning the same were filed as exhibits to
this current report.
22
<PAGE>
Signatures
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Premier Bancorp, Inc.
Date Signature
- ---- ---------
May 10, 2000 /s/ John C. Soffronoff
----------------------
John C. Soffronoff
President, Chief Executive Officer, Director
(Principal Executive Officer)
May 10, 2000 /s/ Bruce E. Sickel
-------------------
Bruce E. Sickel
Chief Financial Officer, Director
(Principal Financial Officer)
23
<PAGE>
<TABLE>
<CAPTION>
Index of Exhibits
Page
----
<S> <C> <C>
3.1 Articles of Incorporation (Incorporated by reference to Exhibit 3i to the *
Company's Registration Statement No. 333-34243 on Form S-4 filed with
the Securities and Exchange Commission on August 22,1997 and as amended
on September 9, 1997).
3.2 By-Laws (Incorporated by reference to Exhibit 3ii to the Company's Registration *
Statement No. 333-34243 on Form S-4 filed with the Securities and Exchange
Commission on August 22,1997 and as amended on September 9, 1997).
10.1 Premier Bank's 1995 Incentive Stock Option Plan (Incorporated by reference to *
Exhibit 99.6 to the Company's Registration Statement No. 333-34243 on Form S-4
filed with the Securities and Exchange Commission on August 22,1997 and as
amended on September 9, 1997).
10.2 Change of Control Agreement between Premier Bank and John C. Soffronoff *
(Incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form
10-QSB filed with the Securities Exchange Commission on November 13, 1998).
10.3 Change of Control Agreement between Premier Bank and John J. Ginley *
(Incorporated by reference to Exhibit 10.3 to the Company's Quarterly
Report on Form 10-QSB filed with the Securities Exchange Commission on
November 13, 1998).
10.4 Change of Control Agreement between Premier Bank and Bruce E. Sickel *
(Incorporated by reference to Exhibit 10.4 to the Company's Quarterly
Report on Form 10-QSB filed with the Securities Exchange Commission on
November 13, 1998).
11.1 Statement re: Computation of per share earnings (Included at Note 5 of this Form 10-QSB). 5
27.1 Financial Data Schedule (Exhibit 27.1). 32
27.2 Restated Financial Data Schedule (Exhibit 27.2) 33
</TABLE>
* Incorporated by reference.
24
<PAGE>
Exhibit 3.1
Articles of Incorporation (Incorporated by reference to Exhibit 3i to the
Company's Registration Statement No. 333-34243 on Form S-4 filed with the
Securities and Exchange Commission on August 22, 1997 and as amended on
September 9, 1997).
25
<PAGE>
Exhibit 3.2
By-Laws (Incorporated by reference to Exhibit 3ii to the Company's Registration
Statement No. 333-34243 on Form S-4 filed with the Securities and Exchange
Commission on August 22,1997 and as amended on September 9, 1997).
26
<PAGE>
Exhibit 10.1
Premier Bank's 1995 Incentive Stock Option Plan (Incorporated by reference to
Exhibit 99.6 to the Company's Registration Statement No. 333-34243 on Form S-4
filed with the Securities and Exchange Commission on August 22,1997 and as
amended on September 9, 1997).
27
<PAGE>
Exhibit 10.2
Change of Control Agreement between Premier Bank and John C. Soffronoff
(Incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on
Form 10-QSB filed with the Securities Exchange Commission on November 13, 1998).
28
<PAGE>
Exhibit 10.3
Change of Control Agreement between Premier Bank and John J. Ginley
(Incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on
Form 10-QSB filed with the Securities Exchange Commission on November 13, 1998).
29
<PAGE>
Exhibit 10.4
Change of Control Agreement between Premier Bank and Bruce E. Sickel
(Incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on
Form 10-QSB filed with the Securities Exchange Commission on November 13, 1998).
30
<PAGE>
Exhibit 11.1
Statement re: Computation of per share earnings (Included at Note 5
of this Form 10-QSB).
31
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<PERIOD-END> MAR-31-2000
<FISCAL-YEAR-END> MAR-31-2000
<CASH> 5,906
<INT-BEARING-DEPOSITS> 216
<FED-FUNDS-SOLD> 12,244
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 95,810
<INVESTMENTS-CARRYING> 6,799
<INVESTMENTS-MARKET> 6,644
<LOANS> 207,222
<ALLOWANCE> 2,655
<TOTAL-ASSETS> 336,609
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