FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1994
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 0-9101
JEFFERSON BANKSHARES, INC.
Incorporated in the I.R.S. Employer ID No.
State of Virginia 54-1104491
123 East Main Street
Post Office Box 711
Charlottesville, Virginia 22902
Telephone (804) 972-1100
Indicate by a check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months and
(2) has been subject to such filing requirements for the past 90
days. Yes [X] No [ ]
As of July 7, 1994, Registrant has 14,635,342 shares of its
$2.50 par value common stock issued and outstanding.
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
Jefferson Bankshares, Inc. and Subsidiaries
Consolidated Balance Sheets
($ in thousands)
June 30
Dec. 31
1994
1993 1993
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ASSETS
Cash and due from banks............................... $ 92,759 $
93,650 $ 111,493
Federal funds sold and other money market investments. 40,000
4,870 4,805
Investment securities:
Available for sale(cost of $152,723).............. 150,832
- - -
Held to maturity(market value on March 31......... 512,975
651,559 704,318
of $511,020 in 1994 and $680,119 in 1993,
and $725,332 on December 31, 1993)
Total Investment Securities........................... 663,807
651,559 704,318
Loans................................................. 1,003,391
977,600 987,283
Less: Unearned income................................. (269)
(524) (310)
Allowance for loan losses............................. (12,570)
(13,311) (12,735)
Net loans............................................. 990,552
963,765 974,238
Premises and equipment................................ 50,337
48,140 47,756
Other assets.......................................... 45,745
44,408 42,894
Total Assets.......................................... $1,883,200
$1,806,392 $1,885,504
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand................................................ $ 254,118 $
237,812 $ 247,107
Interest-bearing transaction accounts................. 819,404
766,624 799,612
Certificates of deposit $100,000 and over............. 69,676
62,318 64,407
Other time............................................ 517,409
526,960 515,174
Total deposits........................................ 1,660,607
1,593,714 1,626,300
Federal funds purchased and
securities sold under repurchase agreements......... 11,303
14,962 53,832
Other short-term borrowings........................... -
276 266
Other liabilities..................................... 13,330
11,629 12,243
Long-term debt........................................ 471
1,672 1,213
Total liabilities..................................... 1,685,711
1,622,253 1,693,854
Shareholders' Equity:
Preferred stock of $10.00 par value. Authorized
1,000,000 shares; issued none..................... -
- - -
Common stock of $2.50 par value. Authorized 32,000,000
shares; issued and outstanding 14,635,342 shares
June 30, 1994; and 14,566,522 shares June 30, 1993;
and 14,578,957 shares December 31, 1993........... 36,588
36,416 36,447
Capital surplus....................................... 41,244
39,103 40,215
Retained earnings..................................... 120,886
108,620 114,988
Unrealized losses on securities
available for sale................................. (1,229)
- - -
Total shareholders' equity ........................... 197,489
184,139 191,650
Total Liabilities and Shareholders' Equity............ $1,883,200
$1,806,392 $1,885,504
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
Jefferson Bankshares, Inc. and Subsidiaries
Consolidated Statements of Income
(in thousands except per share data)
Three months ended Six
Months Ended
June 30
June 30
1994 1993 1994
1993
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INTEREST INCOME
Interest and fees on loans .................. $19,628 $19,491 $38,171
$39,116
Income on investment securities:
Available for sale........................... 2,847 - 6,187
- -
Held to maturity............................. 8,230 11,683 16,262
23,521
Other interest income........................ 391 206 500
363
Total interest income........................ 31,096 31,380 61,120
63,000
INTEREST EXPENSE
Interest-bearing transaction accounts........ 5,098 5,464 10,158
10,949
Certificates of deposit $100,000 and over.... 651 662 1,283
1,365
Other time deposits.......................... 4,921 5,493 9,833
11,181
Short-term borrowings........................ 79 66 198
155
Long-term debt............................... 12 23 29
48
Total interest expense....................... 10,761 11,708 21,501
23,698
NET INTEREST INCOME.......................... 20,335 19,672 39,619
39,302
PROVISION FOR LOAN LOSSES.................... 375 375 810
750
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES.............................. 19,960 19,297 38,809
38,552
NON-INTEREST INCOME
Trust income................................. 1,100 1,000 2,200
2,000
Service charges on deposit accounts.......... 2,174 2,113 4,214
4,142
Investment securities gains ................. 1,164 18 1,164
55
Mortgage loan sales income................... 195 515 533
782
Other income................................. 961 609 1,666
1,124
Total non-interest income.................... 5,594 4,255 9,777
8,103
NON-INTEREST EXPENSE
Salaries and employee benefits............... 9,135 8,362 18,121
16,774
Occupancy expense, net....................... 1,167 1,146 2,424
2,256
Equipment expense............................ 1,416 1,399 2,791
2,776
F.D.I.C. assessments......................... 903 890 1,805
1,774
Other expense................................ 4,014 3,025 6,961
5,664
Total non-interest expense................... 16,635 14,822 32,102
29,244
Income before income taxes................... 8,919 8,730 16,484
17,411
Provision for income taxes................... 2,969 2,800 5,485
5,559
NET INCOME................................... $ 5,950 $ 5,930 $10,999
$11,852
NET INCOME PER COMMON SHARE.................. 0.40 0.41 0.75
0.82
AVERAGE SHARES OUTSTANDING................... 14,629 14,558 14,615
14,531
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
Jefferson Bankshares, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
($ in thousands)
Six months ended
June 30
1994 1993
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Cash flows from operating activities:
Net income.......................................... $ 10,999 $ 11,852
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization....................... 2,979 2,803
Accretion and amortization.......................... 2,661 1,891
Provision for loan losses........................... 810 750
Investment securities gains, net.................... (1,164) (55)
Gain on sale of premises and equipment.............. (161) 6
Decrease in interest receivable..................... 1,784 (660)
Decrease in interest payable........................
Other, net.......................................... (1,911) 690
Total adjustments................................... 5,269 5,158
Net cash provided by
operating activities............................... 16,268 17,010
Cash flows from investing activities:
Proceeds from maturities of investment securities... 65,636 75,317
Proceeds from sales and calls
of investment securities.......................... 47,115 7,470
Purchase of investment securities................... (75,628) (77,047)
Net increase in loans............................... (17,491) (21,472)
Business combinations, net of cash.................. 21,130 1,212
Proceeds from sales of premises and equipment....... 192 35
Proceeds from sales of foreclosed properties........ 1,305 2,296
Purchases of premises and equipment................. (5,322) (1,274)
Net cash provided (used in) by investing activities. 36,937 (13,463)
Cash flows from financing activities:
Net increase (decrease) in deposits................. 10,714 (13,587)
Net increase (decrease) in short-term borrowings.... (42,795) 4,333
Repayment of long-term debt......................... (742) (459)
Proceeds from issuance of common stock.............. 1,190 818
Payments to acquire common stock.................... (149) (5)
Dividends paid...................................... (4,962) (4,132)
Net cash used in financing activities............... (36,744) (13,032)
Net increase (decrease) in cash
and cash equivalents.............................. 16,461 (9,485)
Cash and cash equivalents at beginning of period.... 116,298 108,005
Cash and cash equivalents at end of period.......... $132,759 $ 98,520
Supplemental disclosure of cash flow information
Cash payments for:
Interest.......................................... $ 21,230 $ 23,879
Income taxes 5,644 5,931
Non-cash investing and financing activities:
Loan balances transferred to foreclosed properties $ 465 $ 874
Issuance of common stock for acquisition.......... - 834
See accompanying notes to consolidated financial statements
</TABLE>
<TABLE>
Jefferson Bankshares, Inc. and Subsidiaries
Consolidated Statements of Changes in Shareholders' Equity
($ in thousands) Six Months Ended
June 30
1994 1993
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Balance, January 1.......................................$191,650 $175,006
Net income............................................... 10,999 11,852
Cash dividends declared.................................. (4,972) (4,366)
Unrealized losses on securities available for sale....... (1,229) -
Issuance of common stock for dividend reinvestment plan.. 1,190 807
Issuance of common stock for incentive stock plan........ - 11
Issuance of common stock for acquisition................. - 843
Cash paid in lieu of fractional shares................... - (9)
Acquisition of common stock.............................. (149) (5)
Balance, June 30.........................................$197,489 $184,139
</TABLE>
See accompanying notes to consolidated financial statements.
Notes to Consolidated Financial Statements
($ in thousands)
Note 1 - General
The consolidated financial statements conform to generally accepted
accounting principles and to general industry practices. The accompanying
financial statements are unaudited. In the opinion of management, all
adjustments necessary for a fair presentation of the consolidated financial
statements have been included. All such adjustments are of a normal and
recurring nature. The notes included herein should be read in conjunction
with the notes to consolidated financial statements included in the
Corporation's 1993 annual report to shareholders.
On January 1, 1994, the Corporation adopted Statement of Financial
Accounting Standards No. 115, Accounting for Certain Investments in Debt and
Equity Securities. The Statement requires securities to be reported in one
of three categories: trading, available for sale, or held to maturity. Upon
adoption of this Statement, the U.S. Treasury securities portion of the
investment portfolio was classified as available for sale. In accordance
with Statement 115, these securities are reported in the Corporation's
consolidated financial statements at fair value. Unrealized gains and
losses, net of the related tax effect, are excluded from earnings and
reported as a separate component of shareholders' equity until realized.
The impact of adopting Statement 115 at June 30, 1994, is a decrease of
$1.9 million in investment securities available for sale and a net
unrealized loss, which is recorded as a separate component of shareholder's
equity, of $1.2 million. Held to maturity securities are recorded at
amortized cost. The Corporation has no trading account securities.
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Note 2 - Allowance for Loan Losses
A summary of transactions in the consolidated allowance for
the six months ended June 30 follows:
1994 1993
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Balance, January 1............................ $ 12,735 $ 12,698
Provision..................................... 810 750
Recoveries.................................... 299 158
Loan losses................................... (1,274) (418)
Increase from acquisition..................... - 123
Balance, June 30.............................. $ 12,570 $ 13,311
</TABLE>
<TABLE>
Note 3 - Income Taxes
Income tax expense for the six months ended June 30 is different
than the amount computed by applying the statutory corporate federal
income tax rate of 35% in 1994 and 34% in 1993 to income before
taxes. The reasons for this difference are as follows:
1994 1993
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Tax expense at statutory rate......... $ 5,769 $ 5,920
Increase (reduction)in taxes
resulting from:
Tax exempt interest................... (455) (570)
Other, net............................ 171 209
Provision for income taxes............ $ 5,485 $ 5,559
</TABLE>
Note 4 - Business Combinations
On January 11, 1994, the Corporation and Bank of Loudoun (Loudoun)
announced an agreement in principle under which Loudoun would be merged
into Jefferson National Bank. The agreement provides for Loudoun's
shareholders to receive one share of the Corporation's common stock for
each share of Loudoun's stock. Loudoun had approximately 502 thousand
shares outstanding on June 30, 1994. The merger is expected to be
consummated during August, subject to the shareholder vote scheduled for
July 28.
On March 25, 1994, Jefferson National Bank purchased the deposit
liabilities of Liberty Federal Savings Bank from the Resolution Trust
Corporation. The transaction was accounted for as a purchase, and,
accordingly, accounts and transactions for Liberty are included in the
Corporation's consolidated financial statements subsequent to the
acquisition date. Liberty had two banking offices in Warrenton, Virginia,
and total deposits of approximately $24 million.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Management's discussion and analysis of financial information is presented
to aid the reader in understanding and evaluating the financial condition
and results of operations of Jefferson Bankshares, Inc. The analysis
focuses on the Consolidated Financial Statements, their accompanying notes,
and the statistical data included in this report. Highlighted in the
discussion are material changes from prior reporting periods and any
identifiable trends affecting the Corporation.
On January 1, 1994, the Corporation adopted Statement of Financial
Accounting Standard No. 115, Accounting for Certain Investments in Debt
and Equity Securities. Information concerning this statement and its effects
on the consolidated financial statements is included in Note 1 of the Notes
to Consolidated Financial Statements.
On March 25, 1994, Jefferson National Bank, the Corporation's bank
subsidiary, acquired $23 million in deposits from the Resolution Trust C
orporation in its capacity as receiver for Liberty Federal Savings Bank
(Liberty) of Warrenton, Virginia. The transaction was accounted for as a
purchase, and accordingly, the balances and transactions of Liberty are
included in the Corporation's consolidated financial statements only for
the period following the merger date.
FINANCIAL CONDITION
Total assets on June 30, 1994, were $1.883 billion, or 4 percent above
the year earlier total of $1.806 billion. On December 31, 1993, total
assets were $1.886 billion. In the second quarter of 1994, total assets
averaged $1.881 billion compared with $1.797 billion in the second quarter
of 1993. In the first half, total assets averaged $1.864 billion in 1994
and $1.784 billion in 1993.
Loans, net of unearned income increased 3 percent to $1.003 billion on
June 30, 1994, from $977 billion one year earlier. At year-end 1993, loans,
net of unearned income totaled $987 million. In the second quarter of 1994,
loans, net of unearned income, averaged $1.000 billion compared with the
second quarter 1993 average of $972 million. In the first half, loans
averaged $995 million in 1994 and $967 million in 1993. In the second
quarter of 1994, a decrease in commercial loans was offset by growth in
indirect installment loans, real estate loans, and home equity loans.
Investment securities on June 30, 1994, totaled $664 million, or 2 percent
above the year earlier total of $652 million. At year-end 1993, investment
securities totaled $704 million. In the second quarter investment
securities averaged $682 million in 1994 and $651 million in 1993. After
six months the portfolio averaged $690 million in 1994 compared with $650
million in 1993. In the second quarter of 1994, $43 million of securities
available-for-sale were sold at a pre-tax gain of $1.2 million. The
decision to sell these securities was an action intended to assist in the
management of interest rate risk in an environment of rising interest rates.
Money market investments totaled $40 million on June 30, 1994, compared
with the year earlier total of $5 million. At year-end 1993, the total was
also $5 million. In the second quarter of 1994, money market investments
averaged $36 million compared with the second quarter 1993 average of $19
million. In the first half, these investments averaged $22 million in 1994
and $16 million in 1993. As the result of the securities sales noted above,
use of short-term investments was increased in the second quarter of 1994.
Total deposits on June 30, 1994, of $1.661 billion were 4 higher than the
year earlier total of $1.594 billion. At year-end 1993, total deposits were
$1.626 billion. In the second quarter, total deposits averaged $1.657
billion in 1994 and $1.587 billion in 1993. In the first half, deposit
averages were $1.638 billion in 1994 and $1.576 billion in 1993. At June
30, 1994, demand deposits were 7 percent higher and interest-bearing
deposits were 4 percent higher compared with one year ago. In the second
quarter of 1994, the previously strong growth trend in interest-bearing
transaction accounts was halted as balances in these accounts decreased
$22 million from the end of the first quarter of 1994.
Short-term borrowings on June 30 totaled $11 million in 1994 and $15
million in 1993. At year-end 1993, these borrowings totaled $54 million.
In the second quarter, short-term borrowings averaged $13 million in 1994
and 1993. In the first half, these borrowings averaged $16 million in 1994
and $14 million in 1993.
RESULTS OF OPERATIONS
Net income in the second quarter of 1994 was $6.0 million, or $.40 per
share. In the second quarter of 1993, net income was $5.9 million, or $.41
per share. A greater number of shares outstanding resulted in the lower
per share net income in the 1994 quarter.
In the first half of 1994, net income was $11.0 million compared with
$11.9 million in the first half of 1993. Net income per share in the first
half was $.75 in 1994 and $.82 in 1993.
In terms of profitability, the return on average assets in the second
quarter of 1994 was 1.27 percent compared with 1.32 percent in the same
period in 1993. In the first half this ratio was 1.18 percent in 1994 and
1.33 percent in 1993. The return on average shareholders' equity in the
second quarter was 12.01 percent in 1994 and 12.86 percent in 1993. In the
first half this ratio was 11.21 percent in 1994 and 13.04 percent in 1993.
Net interest income in the second quarter of 1994 of $20.3 million was 3
percent above the second quarter 1993 amount due to an increase in the
volume of average earning assets. The second quarter net interest margin
at 4.85 percent in 1994 was below the 1993 level of 4.89 percent. It was,
however, above the first quarter 1994 net interest margin of 4.66 percent.
Rising interest rates improved yields on earning assets, while rates paid
on interest-bearing liabilities were more stable. After six months in 1994,
the net interest margin was 4.76 percent, and net interest income of $39.6
million was one percent above the total in the first half of 1993.
The provision for loan losses was $375 thousand in the second quarter and
$810 thousand in the first half of 1994. In the comparable 1993 periods
the provisions were $375 thousand and $750 thousand, respectively. On June
30, 1994, the allowance for loan losses was $12.6 million, or 1.25 percent
of loans, net of unearned income. On June 30, 1993, the allowance was $13.3
million, or 1.36 percent of loans, net of unearned income.
The ratio of the allowance to loans was allowed to decline in 1994 in
consideration of a reduction in problem loans. Non-accrual loans on June
30 totaled $5.733 million in 1994 compared with $9.488 million in 1993.
The June 30, 1994, total also represented a decrease from the March 31,
1994 total of $7.801 million.
Loan charge-offs also affected the allowance for loan losses. In the
second quarter of 1994, net loan losses were $675 thousand, which brought
the first half 1994 total to $975 thousand. In 1993, net loan losses were
$37 thousand in the second quarter and $260 thousand in the first half.
On June 30, loans 90 days or more past due totaled $2.285 million in 1994
and $4.389 million in 1993. Foreclosed properties totaled $7.160 million
and $9.990 million on June 30, 1994 and 1993, respectively.
Non-interest income in the second quarter and the first half of 1994 was
influenced by investment securities gains totaling $1.2 million. Excluding
these gains, non-interest income increased 4 percent in the second quarter
and 6 percent in the first half of 1994 compared with the same 1993 periods.
Also affecting non-interest income significantly in the second quarter and
the first half was income from mortgage loan sales. Rising interest rates
led to a sharp decline in mortgage loan originations and, consequently, to
income derived from sales of such loans.
Non-interest expense in the second quarter of 1994 of $16.6 million was
12 percent higher than $14.8 million in the same 1993 period. Certain
non-recurring expenses, which totaled $653 thousand, contributed to this
increase. These expenses included, among other items, $433 thousand in
writedowns of foreclosed properties and $96 thousand in certain merger
related expenses.
LIQUIDITY
A financial institution's liquidity requirements are measured by its need to
meet deposit withdraws, fund loans, maintain reserve requirements, and
operate the organization. To meet its liquidity needs, the Corporation
maintains cash reserves and has an adequate flow of funds from maturing
loans, investment securities, and short-term investments. In addition, the
Corporation's affiliate bank has the ability to borrow from the Federal
Reserve. The Corporation considers its sources of liquidity to be ample to
meet its estimated needs.
CAPITAL RESOURCES
On June 30, 1994, shareholders' equity totaled $197 million, or 10.5
percent of total assets. Included in shareholders' equity on June 30,
1994, were unrealized losses, net of the tax effect, of $1.2 million, on
securities available for sale.
On April 4, 1994, the Corporation entered into a definitive agreement with
Bank of Loudoun under which that bank would merge into Jefferson National
Bank. The merger agreement provides for an exchange of one share of the
Corporation's common stock for each share of Bank of Loudoun common
stock outstanding. Regulatory approval of the merger has been received.
The merger is expected to be consummated in August 1994 pending
Bank of Loudoun shareholders' approval, which voting date is
scheduled for July 28, 1994.
<TABLE>
Jefferson Bankshares, Inc. and Subsidiaries
Interest Yield and Rate Analysis
(tax-equivalent basis)
Six Months Ended
June 30
YIELDS ON EARNING ASSETS 1994 1993
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Investment securities:
U.S. Treasury............................... 6.63 % 7.26 %
U.S. Government agencies.................... 6.85 7.63
States and political subdivisions........... 7.86 8.29
Corporate debt.............................. 6.17 7.10
Other securities............................ 7.74 8.31
Total investment securities................. 6.66 7.42
Money market investments.................... 4.68 4.67
Loans:
Instalment.................................. 9.14 9.73
Commercial.................................. 7.08 7.16
Real estate................................. 7.56 8.44
Total loans................................. 7.78 8.20
Total earning assets........................ 7.29 7.86
RATES ON INTEREST-BEARING LIABILITIES
Interest-bearing deposits:
Savings/Interest-checking accounts.......... 2.44 2.88
Money market deposit accounts............... 2.57 2.95
Money market certificates................... 3.75 4.09
Certificates of deposit
$100,000 and over........................... 3.89 4.04
All other time deposits..................... 3.95 4.87
Total interest-bearing deposits............. 3.03 3.48
Short-term borrowings....................... 2.47 2.19
Long-term debt.............................. 6.55 5.13
Total interest-bearing liabilities.......... 3.03 3.47
Interest spread............................. 4.26 4.39
Interest expense as a percent
of average earning assets................. 2.53 2.93
NET INTEREST MARGIN......................... 4.76 % 4.93 %
</TABLE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
On April 26, 1994, the Corporation held its annual meeting of
shareholders, at which time shareholders elected fourteen directors to serve
until the next annual meeting of shareholders and approved the selection of
KPMG Peat Marwick as the Corporation's independent auditors for 1994.
The number of votes cast for and the number of votes withheld for each
director are set forth below:
For Withhold Authority
John T. Casteen, III 12,363,349 247,461
Hovey S. Dabney 12,471,508 139,302
Lawrence S. Eagleburger 12,329,417 281,393
Hunter Faulconer 12,473,561 137,249
Fred L. Glaize, III 12,031,144 579,666
Henry H. Harrell 12,500,505 110,305
Alex J. Kay, Jr. 12,501,315 109,495
J. A. Kessler, Jr. 12,501,499 109,311
O. Kenton McCartney 12,499,426 111,384
W. A. Rinehart, III 12,485,194 125,616
Gilbert M. Rosenthal 12,501,595 109,215
Alson H. Smith, Jr. 12,501,687 109,123
Lee C. Tait 12,475,393 135,417
H. A. Williamson, Jr. 12,500,807 110,003
The number of votes cast for and against KPMG Peat Marwick as independent
auditors for 1994, as well as the number of abstentions in connection with
such vote, are set forth below:
For: 12,461,334 Against: 43,987 Abstain: 31,761
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The exhibits listed on the accompanying Index to Exhibits
immediately following the signature page are filed as part
of, or incorporated by reference into, this report.
(b) Reports on Form 8-K
The Corporation filed no reports on Form 8-K during the
quarter ended June 30, 1994.
Pursuant to the requirements of the Securities Exchange Act
of 1934 the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
JEFFERSON BANKSHARES, INC.
August 8, 1994 By: O. Kenton McCartney
President and
Chief Executive Officer
and
By: Allen T. Nelson, Jr.
Senior Vice President and
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Page
4. Instruments defining the rights of security holders including
indentures:
(a) Articles of Incorporation of Jefferson Bankshares',
incorporated by reference to Jefferson Bankshares'
1984 Annual Report on Form 10-K.
(b) Articles of Amendment to Articles of Incorporation dated
May 7, 1987, incorporated by reference to Jefferson
Bankshares' report on Form 10-Q for the quarter ended
June 30, 1987.
(c) Articles of Amendment to Articles of Incorporation
dated March 23, 1993, incorporated by reference to
Jefferson Bankshares' report on Form 10-Q for the quarter
ended June 30, 1993.
(d) Term Loan Agreement dated as of February 1, 1984,
between Jefferson Bankshares and Wachovia Bank and
Trust Company, N.A. incorporated by reference to
Jefferson Bankshares' quarterly report on Form 10-Q
for the quarter ended March 31, 1984.
(e) Amendments dated September 8, 1988 and September 21,
1989, to the Term Loan Agreement between Jefferson
Bankshares and Wachovia Bank and Trust Company, N.A.
incorporated by reference to Jefferson Bankshares'
quarterly report on Form 10-Q for the quarter ended
March 31, 1991.
(f) Amendment dated December 20, 1990, to Term Loan
Agreement between Jefferson Bankshares and Wachovia
Bank and Trust Company, N.A., incorporated by
reference to Jefferson Bankshares' Annual Report on
Form 10-K for 1990.
10. Material Contracts:
(a) Senior Officers Supplemental Pension Plan incorporated
by reference to Jefferson Bankshares' 1982 Annual
Report on Form 10-K.
(b) Amended and Restated Employment Agreement dated August
26, 1987, with Hovey S. Dabney incorporated by reference
to Jefferson Bankshares' report on Form 10-Q for the quarter
ended September 30, 1987.
(c) Amendment dated September 26, 1989, to the Amended and
Restated Employment Agreement with Hovey S. Dabney
incorporated by reference to Jefferson Bankshares'
report on Form 10-Q for the quarter ended
September 30, 1989.
(d) Amendment dated September 26, 1990, to the Amended
and Restated Employment Agreement with Hovey S. Dabney,
incorporated by reference to Jefferson Bankshares'
report on Form 10-Q for the quarter ended September
30, 1990.
(e) Deferred Compensation Agreement dated December 18, 1979
with Hovey S. Dabney, incorporated by reference to
Jefferson Bankshares' 1984 Annual Report on Form 10-K.
(f) Amendment dated September 26, 1989, to the Deferred
Compensation Agreement with Hovey S. Dabney incorporated
by reference to Jefferson Bankshares' report on Form
10-Q for the quarter ended September 30, 1989.
(g) Incentive Stock Plan incorporated by reference to
Jefferson Bankshares' report on Form 10-Q for the
quarter ended June 30, 1985.
(h) Amendment dated April 28, 1992, to Incentive Stock
Plan incorporated by reference to Exhibit 10(f) to
Form S-4 of Jefferson Bankshares, File No. 33-47929.
(i) Amended and Restated Deferred Compensation Plan for
Directors incorporated by reference to Jefferson
Bankshares' Annual Report on Form 10-K for 1985.
(j) Split Dollar Life Insurance Plan, incorporated by
reference to Jefferson Bankshares' Annual Report on
Form 10-K for 1984.
(k) Executive Severance Agreement dated October 25, 1993
between Jefferson Bankshares and O. Kenton McCartney,
incorporated by reference to Jefferson Bankshares'
Annual Report on Form 10-K for 1993.
(l) Executive Severance Agreement dated October 25, 1993
between Jefferson Bankshares and Robert H. Campbell,
Jr., incorporated by reference to Jefferson Bankshares'
Annual Report on Form 10-K for 1993.
(m) Amended and Restated Split Dollar Life Insurance
Agreement dated October 29, 1993 between Jefferson
Bankshares and Hovey S. Dabney, incorporated by
reference to Jefferson Bankshares' Annual Report
on Form 10-K for 1993.
(n) Amended and Restated Split Dollar Life Insurance
Agreement dated October 29, 1993 between Jefferson
Bankshares and Robert H. Campbell, Jr., incorporated
by reference to Jefferson Bankshares' Annual Report
on Form 10-K for 1993.
(o) Amended and Restated Split Dollar Life Insurance
Agreement dated October 29, 1993 between Jefferson
Bankshares and Kenton McCartney, incorporated by
reference to Jefferson Bankshares' Annual Report on
Form 10-K for 1993.
(p) Amendment dated as of May 19, 1994, to the Amended
and Restated Split Dollar Life Insurance Agreement
dated October 29, 1993 between Jefferson Bankshares
and O. Kenton McCartney,incorporated by reference to
Exhibit 10(p) to Form S-4 of Jefferson Bankshares,
File No. 33-53727.
<PAGE>
August 8, 1994
Securities and Exchange Commission
450 5th Street, N.W.
Washington, D. C. 20549
Jefferson Bankshares, Inc./Form 10-Q
Gentlemen:
Enclosed is the report of Jefferson Bankshares, Inc. on Form
10-Q for the quarter ended June 30, 1994. If you have any questions,
please call me at 804 972-1113 or contact us through our CompuServe
mailbox, no. 72741,2356.
Very truly yours,
William M. Watson, Jr.
Vice President and Secretary
WMWJr/chf
Enclosures
cc: O. Kenton McCartney
Allen T. Nelson, Jr.
Robert E. Stroud, Esq.
Robert C. Best
NASDAQ, Inc.
