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, 1995
[ ] 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 15, 1995, Registrant had 15,171,843 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
1995 1994 1994
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ASSETS
Cash and due from banks............................... $ 97,200 $ 94,772 $ 100,809
Federal funds sold and other money market investments. 25,000 47,717 -
Investment securities:
Available for sale (cost on June 30 of $173,565 in 176,232 151,809 170,815
1995 and $153,733 in 1994 and $176,493 on
December 31, 1994)
Held to maturity (fair value on June 30 463,094 521,665 467,733
of $465,665 in 1995 and $519,632 in 1994,
and $455,080 on December 31, 1994)
Total Investment Securities........................... 639,326 673,474 638,548
Loans................................................. 1,170,375 1,039,080 1,101,636
Less: Unearned income................................. (91) (269) (136)
Allowance for loan losses....................... (13,885) (13,706) (13,754)
Net loans............................................. 1,156,399 1,025,105 1,087,746
Premises and equipment................................ 52,104 50,714 51,185
Other assets.......................................... 49,673 46,044 47,662
Total Assets.......................................... $2,019,702 $1,937,826 $1,925,950
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand................................................ $ 272,161 $ 263,350 $ 271,447
Interest-bearing transaction accounts................. 784,397 845,739 831,855
Certificates of deposit $100,000 and over............. 89,339 73,405 72,511
Other time............................................ 625,587 527,689 513,059
Total deposits........................................ 1,771,484 1,710,183 1,688,872
Federal funds purchased and
securities sold under repurchase agreements......... 12,257 11,303 16,479
Other liabilities..................................... 18,435 13,404 14,027
Long-term debt........................................ 17 471 19
Total liabilities..................................... 1,802,193 1,735,361 1,719,397
Shareholders' Equity:
Preferred stock of $10.00 par value. Authorized
1,000,000 shares; issued none..................... - - -
Common stock of $2.50 par value. Authorized 32,000,000
shares; issued and outstanding 15,171,764 shares
June 30, 1995; and 15,136,938 shares June
30,1994; and 15,170,250 shares December 31, 1994... 37,929 37,842 37,926
Capital surplus....................................... 47,160 45,007 46,332
Retained earnings..................................... 130,686 120,867 125,986
Unrealized gains (losses) on securities
available for sale, net............................ 1,734 (1,251) (3,691)
Total shareholders' equity ........................... 217,509 202,465 206,553
Total Liabilities and Shareholders' Equity............ $2,019,702 $1,937,826 $1,925,950
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<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
1995 1994 1995 1994
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INTEREST INCOME
Interest and fees on loans .................. $26,166 $20,428 $50,748 $39,743
Income on investment securities:
Available for sale........................... 2,849 2,861 5,511 6,221
Held to maturity............................. 7,461 8,339 14,633 16,475
Other interest income........................ 332 456 436 596
Total interest income........................ 36,808 32,084 71,328 63,035
INTEREST EXPENSE
Interest-bearing transaction accounts........ 5,700 5,297 11,487 10,546
Certificates of deposit $100,000 and over.... 1,184 696 2,100 1,373
Other time deposits.......................... 7,723 5,020 13,609 10,037
Short-term borrowings........................ 459 79 790 198
Long-term debt............................... - 12 1 29
Total interest expense....................... 15,066 11,104 27,987 22,183
NET INTEREST INCOME.......................... 21,742 20,980 43,341 40,852
PROVISION FOR LOAN LOSSES.................... 480 375 960 850
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES.............................. 21,262 20,605 42,381 40,002
NON-INTEREST INCOME
Trust income................................. 1,125 1,100 2,250 2,200
Service charges on deposit accounts.......... 2,321 2,206 4,523 4,277
Investment securities gains (losses)......... - 1,164 (103) 1,164
Mortgage loan sales income................... 12 199 42 542
Other income................................. 790 983 1,520 1,703
Total non-interest income.................... 4,248 5,652 8,232 9,886
NON-INTEREST EXPENSE
Salaries and employee benefits............... 9,539 9,360 19,277 18,567
Occupancy expense, net....................... 1,242 1,212 2,502 2,514
Equipment expense............................ 1,504 1,442 2,993 2,844
F.D.I.C. assessments......................... 943 938 1,880 1,870
Other expense................................ 3,402 4,190 6,719 7,288
Total non-interest expense................... 16,630 17,142 33,371 33,083
INCOME BEFORE INCOME TAXES................... 8,880 9,115 17,242 16,805
Provision for income taxes................... 2,979 3,033 5,791 5,592
NET INCOME................................... $ 5,901 $ 6,082 $11,451 $11,213
NET INCOME PER COMMON SHARE.................. $ .39 $ .40 $ .76 $ .74
AVERAGE SHARES OUTSTANDING................... 15,182 15,131 15,176 15,117
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
Jefferson Bankshares, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
($ in thousands)
Six months ended
June 30
1995 1994
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Cash flows from operating activities:
Net income.......................................... $ 11,451 $ 11,213
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization....................... 3,156 3,118
Accretion and amortization.......................... 2,103 2,659
Provision for loan losses........................... 960 850
Investment securities (gains)losses, net............ 103 (1,164)
Gain on sale of premises and equipment.............. (27) (161)
Decrease in interest receivable..................... 443 496
Increase in interest payable........................ 1,261 268
Decrease(increase) in loans held for resale, net.... (321) 3,341
Other, net.......................................... (1,147) (1,242)
Total adjustments................................... 6,531 8,165
Net cash provided by
operating activities............................... 17,982 19,378
Cash flows from investing activities:
Proceeds from maturities of investment securities
held to maturity................................. 65,713 53,018
Proceeds from calls of investment securities
held to maturity.................................. 125 3,902
Purchases of investment securities held to maturity.. (62,828) (67,141)
Proceeds from maturities of securities available
for sale.......................................... 27,500 15,450
Proceeds from sales of securities available
for sale.......................................... 11,347 43,213
Purchases of securities available for sale.......... (36,497) (8,707)
Net increase in loans............................... (69,326) (20,616)
Business combination, net of cash................... 31,369 21,130
Proceeds from sales of premises and equipment....... 315 192
Proceeds from sales of foreclosed properties........ 1,446 1,325
Purchases of premises and equipment................. (4,036) (5,322)
Net cash provided by (used in) investing activities. (34,872) 36,444
Cash flows from financing activities:
Net increase in deposits............................ 48,100 9,236
Net decrease in short-term borrowings............... (4,222) (42,795)
Repayment of long-term debt......................... (2) (742)
Proceeds from issuance of common stock.............. 966 1,190
Payments to acquire common stock.................... (1,121) (149)
Dividends paid...................................... (5,440) (4,962)
Net cash provided by (used in) financing activities. 38,281 (38,222)
Net increase in cash
and cash equivalents.............................. 21,391 17,600
Cash and cash equivalents at beginning of period.... 100,809 124,889
Cash and cash equivalents at end of period.......... $122,200 $142,489
Supplemental disclosure of cash flow information
Cash payments for:
Interest.......................................... $ 26,726 $ 21,915
Income taxes...................................... 1,756 5,454
Non-cash investing and financing activities:
Loan balances transferred to foreclosed properties $ 122 $ 465
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
1995 1994
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Balance, January 1.......................................$206,553 $196,434
Net income............................................... 11,451 11,213
Cash dividends declared.................................. (5,765) (4,972)
Change in unrealized gains (losses) on securities
available for sale............................... 5,425 (1,251)
Issuance of common stock for dividend reinvestment plan.. - 1,190
Issuance of common stock for incentive stock option...... 966 -
Acquisition of common stock.............................. (1,121) (149)
Balance, June 30.. ......................................$217,509 $202,465
</TABLE>
See accompanying notes to consolidated financial statements.
Notes to Consolidated Financial Statements
($ in thousands)
Note 1 - General
The consolidated financial statements conform to generally accepted
accounting principles and to general industry practices. The accompanying
consolidated financial statements are unaudited. In the opinion of
management, all adjustments necessary for a fair presentation of the
consolidated financial statements have been included. All such
adjustments are of a normal and recurring nature. The notes included
herein should be read in conjunction with the notes to consolidated
financial statements included in the Corporation's 1994 Annual Report
to shareholders.
On January 1, 1995, the Corporation adopted Statement of Financial
Accounting Standards (SFAS) No. 114, Accounting by Creditors for
Impairment of a Loan, as amended by SFAS 118. The Statement requires
impaired loans to be measured at the present value of expected future
cash flows discounted at the loan's effective interest rate, except that
all collateral-dependent loans are measured for impairment based on the
fair value of the collateral. Management's evaluation of the adequacy of
the allowance is based on a review of the Corporation's historical loss
experience, known and inherent risks in the loan portfolio, charge-offs,
and the level and trend of interest rates. As a result, the allowance for
loan losses is adequate, and no additional provision results from the
implementation of Statement 114.
<TABLE>
Note 2 - Allowance for Loan Losses
A summary of transactions in the consolidated allowance for loan losses
for the six months ended June 30 follows:
1995 1994
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Balance, January 1............................ $ 13,754 $ 13,864
Provision..................................... 960 850
Recoveries.................................... 306 299
Loan losses................................... (1,135) (1,307)
Balance, June 30.............. ............... $ 13,885 $ 13,706
</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% to income before income taxes. The reasons
for this difference are as follows:
1995 1994
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Tax expense at statutory rate......... $ 6,035 $ 5,882
Increase (reduction)in taxes
resulting from:
Tax exempt interest................... (388) (455)
Other, net............................ 144 165
Provision for income taxes............ $ 5,791 $ 5,592
</TABLE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Management's discussion and analysis of financial information is
presented to aid the reader in understanding and evaluating the financial
condition and results of operations of Jefferson Bankshares, Inc. The
analysis focuses on the Consolidated Financial Statements and their
accompanying notes. Highlighted in the discussion are material changes
from prior reporting periods and any identifiable trends affecting the
Corporation.
On January 1, 1995, the Corporation adopted Statement of Financial
Accounting Standard No. 114, Accounting by Creditors for Impairment of a
Loan, as amended by SFAS 118. Information concerning this statement and
its effects on the Consolidated Financial Statements is included in Note 1
of the Notes to Consolidated Financial Statements.
In June 1995, the Corporation completed the acquisition of deposits
from two other financial institutions. On June 9, 1995, the Corporation
acquired approximately $28 million in deposits from First Union National
Bank of Virginia at its Waynesboro office. On June 22, 1995 approximately
$7 million in deposits were acquired from a Richmond office of Virginia
First Savings Bank. The acquisitions which were not material, were
accounted for as purchases, and, accordingly, the accounts and
transactions for both acquisitions are included in the Corporation's
Consolidated Financial Statements subsequent to the respective acquisition
dates.
FINANCIAL CONDITION
Total assets on June 30, 1995 were $2.020 billion, or 4 percent
above the year earlier total of $1.938 billion. At December 31, 1994,
total assets were $1.926 billion. Average total assets in the second
quarter of 1995 were $1.989 billion, or 3 percent higher than the second
quarter 1994 average of $1.937 billion. In the first half, total assets
averaged $1.952 billion in 1995 compared with $1.919 billion in 1994.
Loan growth continued its strong performance in the second quarter
of 1995. Loans, net of unearned income increased to $1.170 billion on
June 30, 1995, 13 percent above the year earlier total of $1.039 billion.
Compared with the 1994 year-end total of $1.102 billion, the loan portfolio
has increased $68 million in 1995. The pattern of loan growth showed broad
based strength as indirect instalment lending, commercial loans, and mortgage
loans each recorded strong increases over prior year and prior quarter
totals. Average loans, net of unearned income, increased 12 percent in
the second quarter of 1995 to $1.157 billion from $1.035 billion in the
second quarter of 1994. In the first half of 1995, loans, net of
unearned income, averaged $1.140 billion compared with $1.031 billion in
the same period of 1994, an increase of 11 percent.
The investment securities portfolio on June 30, 1995 decreased 5
percent to $639 million compared with the year earlier total
of $673 million. Securities available for sale increased 16 percent
to $176 million on June 30, 1995 from $152 million one year ago.
Securities held to maturity decreased 11 percent to $463 million on
June 30, 1995 from the year earlier total of $522 million. At year-end
1994 investment securities totaled $639 million, of which $171 million
were classified as available for sale and $468 million were designated
as held to maturity. In the second quarter, investment securities
averaged $646 million in 1995 and $693 million in 1994. Investment
securities in the first half of 1995 averaged $632 million compared with
$702 million in the 1994 period.
In accordance with the Statement of Financial Accounting Standards
No. 115, Accounting for Certain Investments in Debt and Equity
Securities, investment securities that are classified as available for
sale are reported at fair value. The difference between the fair value
and the amortized cost of securities available for sale on June 30, 1995
was an unrealized gain of $2.7 million, or $1.7 million net of tax
effects. At June 30, 1994 securities available for sale had an
unrealized loss of $1.9 million, or $1.3 million net of tax effects.
At year-end 1994 the difference resulted in an unrealized loss of $5.7
million, or $3.7 million net of tax effects. The unrealized gains at
June 30, 1995 resulted from a decrease in interest rates and the
investment of funds into securities at current market interest rates.
On June 30, 1995, federal funds sold and other money market
investments totaled $25 million compared with the year earlier total of
$48 million. At year-end 1994, the Corporation had no short-term money
market investments. In the second quarter of 1995, these investments
averaged $22 million compared with the second quarter 1994 average of $43
million. In the first half of 1995, short term investments averaged $15
million compared with $27 million in the same period of 1994.
Total deposits on June 30, 1995, were $1.771 million, or 4 percent
above the year earlier total of $1.710 billion. At year-end 1994,
deposits totaled $1.689 billion. Deposit totals on June 30, 1995 included
the effects of two acquisitions that occurred in June 1995 that initially
added $35 million to deposit totals. Compared with year earlier totals,
demand deposits increased 3 percent on June 30, 1995 to $272 million.
Interest-bearing transaction accounts, however, decreased 7 percent to
$784 million. Other time deposits increased 19 percent to $626 million
on June 30, 1995. The increase in other time deposits and a portion of
the decrease in interest bearing transaction accounts were attributable
to a promotional campaign to attract consumer certificates of
deposit. Average total deposits in the second quarter were $1.726
billion in 1995 and $1.708 billion in 1994. In the first half of 1995,
total deposits averaged $1.696 billion and $1.688 billion in the same
period of 1994.
Short-term borrowings totaled $12 million on June 30, 1995 compared
with $11 million one year earlier and $16 million at year-end 1994. In the
second quarter, short-term borrowings averaged $35 million in 1995 and
$13 million in 1994. In the first half, these borrowings averaged $30
million in 1995 and $16 million in 1994.
RESULTS OF OPERATIONS
Net income in the second quarter of 1995 was $5.9 million, or $.39
per share. In the second quarter of 1994, net income was $6.1 million,
or $.40 per share. Second quarter 1994 net income included $1.2 million
in securities gains and $653 in non-recurring expenses. Excluding the
effects of these items, second quarter 1994 net income would have been
$5.8 million, or $.38 per share.
In the first half of 1995, net income was $11.5 million, or $.76
per share. Net income in the first half of 1994 was $11.2 million, or
$.74 per share.
Profitability ratio comparisons for the second quarter and first
half of 1995 and 1994 were influenced by the additional income from the
1994 securities gains, net of non-recurring expenses. In the second
quarter of 1995 the return on average assets was 1.19 percent compared
with 1.26 percent in the second quarter of 1994. The return on average
assets in the first half was 1.17 percent in both 1995 and 1994.
The comparisons for return on average equity were additionally
influenced by growth of the equity base in 1995. In the second quarter,
this ratio was 10.96 percent in 1995 and 11.97 percent in 1994. In the
first half, net income produced a return on average shareholders' equity
of 10.76 percent in 1995 compared with 11.06 percent 1994.
Higher interest income in 1995, which was attributable to loan
growth and higher interest rates, was responsible for a 4 percent
increase in net interest income in the second quarter of 1995 and a 6
percent increase in the first half of 1995 over the respective periods in
1994. Increases in interest and fees on loans of 28 percent in the
second quarter and in the first half of 1995 led to increases of 15
percent and 13 percent in total interest income in the second quarter
and first half of 1995, respectively. Interest expense increased at
stronger rates of 36 percent in the second quarter and 26 percent in the
first half of 1995, thus reflecting competitive pressures.
The net interest margin was higher in the second quarter of 1995 at
4.84 percent compared with 4.82 percent in 1994. The effect of higher
deposit interest rates became evident, however, in the second quarter of
1995 as the net interest margin declined from its first quarter 1995 peak
level of 5.05 percent. In the first half of 1995, the net interest
margin was 4.94 percent compared with 4.73 percent in the first half of
1994.
The provision for loan losses was $480 thousand in the second
quarter and $960 thousand in the first half of 1995. The first half
increase of 13 percent over the 1994 amount recognized growth in the loan
portfolio. On June 30, 1995, the allowance for loan losses totaled $13.9
million, or 1.19 percent of loans, net of unearned income. One year
earlier, the allowance totaled $13.7 million, or 1.32 percent of loans,
net of unearned income.
Both net loan losses and non-performing assets declined from year
earlier levels. Net loan losses in the second quarter of 1995 amounted
to $622 thousand, or .21 percent (annualized) of average loans. In the
second quarter of 1994, net loan losses totaled $700 thousand, or .27
percent (annualized) of average loans. In the first half of 1995, net
loan losses were $829 thousand, or 18 percent less than $1 million in the
1994 period. On an annualized basis, those losses represented .15
percent in 1995 and .20 percent in 1994 of average loans.
On June 30, 1995 total nonperforming assets were $10.2 million, or
24 percent less than $13.5 million one year earlier. The 1995 total was
composed of $5.8 million in non-accrual loans and $4.4 million in
foreclosed properties. In 1994, the total contained $6.3 million in
non-accrual loans and $7.2 million in foreclosed properties. In
addition, on June 30, loans past due 90 days or more totaled $2.8
million in 1995 and $2.6 million in 1994.
Non-interest income in the second quarter of 1995 was $4.2 million
compared with $5.7 million in the second quarter of 1994. The comparison
of the two quarters was adversely affected by $1.2 million in securities
gains recorded in the 1994 quarter, a reduction of $186 thousand in
mortgage loans sales income, and a $194 thousand decrease in other
income. The decline in income from mortgage sales was attributable to a
reduced volume of mortgage lending and to a higher retention rate of
mortgages for the Corporation's loan portfolio. The retention rate was
raised as higher loan rates shifted emphasis to adjustable rate mortgages
from fixed rate. The lower amount of other income in the second quarter
of 1995 was largely attributable to a decrease of $181 thousand in gains
from miscellaneous asset sales.
In the first half of 1995, non-interest income totaled $8.2 million
compared with $9.9 million in the first half of 1994. The cause of this
decrease is related largely to the same items affecting the second
quarter decrease. In the first half of 1995, trust fees were 2 percent
higher and deposit account income rose 6 percent over the comparable
amounts in the first half of 1994.
Non-interest expense in the second quarter of 1995 was $16.6
million, or 3 percent below $17.1 million in the second quarter of 1994.
Contributing to this decrease were non-recurring expenses totaling $653
thousand related to foreclosed properties and to a merger. Excluding
these charges, non-interest expense in the second quarter of 1995
increased less than one percent over the 1994 amount.
In the first half of 1995, non-interest expense totaled $33.4
million, or less than one percent above $33.1 million in the first half
of 1994. Excluding the non-recurring charges noted above, the 1995
increase was approximately 3 percent. Compared with one year ago,
personnel expense increased 4 percent and equipment expense rose 5
percent in the first half of 1995. Occupancy expense and F.D.I.C.
insurance assessments were nearly level in the first half of 1995 and
1994. Because the Bank Insurance Fund has reached its federally mandated
level of 1.25 percent of insured deposits, it is expected that F.D.I.C.
insurance assessments will be lowered significantly. The amount and the
timing of such a reduction are uncertain. Other non-interest expense
decreased 8 percent in the first half of 1995 because of the
non-recurring expenses recorded in the second quarter of 1994. Excluding
these items, other expense increased only one percent in the first half
of 1995.
LIQUIDITY
A financial institution's liquidity requirements are measured by
its need to meet deposit withdrawals, fund loans, maintain reserve
requirements, and operate the organization. To meet its liquidity needs,
the Corporation maintains cash reserves and has an adequate flow of funds
from maturing loans, investment securities, and short-term investments.
In addition the Corporation's bank affiliate has the ability to borrow
from the Federal Reserve. The Corporation considers its sources of
liquidity to be ample to meet its estimated needs.
CAPITAL RESOURCES
On June 30, 1995, shareholders' equity totaled $218 million, or
10.8 percent of total assets. Included in shareholders' equity on June
30, 1995 were unrealized gains on securities available for sale, net of
the deferred tax effect, of $1.7 million. In the second quarter of
1995, shareholders' equity averaged $215 million, or 6 percent above the $203
million average in the second quarter of 1994. In the first half,
shareholders' equity averaged $213 million in 1995 and $203 million in 1994.
On June 30, 1995, the book value per share of common stock was $14.34, or 7
percent above the year earlier $13.38.
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 25, 1995, the Corporation held its annual meeting of
shareholders, at which time shareholders elected 14 directors to serve
until the next annual meeting of shareholders; approved the
Corporation's 1995 Long Term Incentive Stock Plan; approved the
Corporation's Deferred Compensation and Stock Purchase Plan for
Non-Employee Directors; and approved the selection of KPMG Peat Marwick
LLP as the Corporation's independent auditors for 1995. 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 12,643,917 295,009
Hovey S. Dabney 12,686,541 252,385
Lawrence S. Eagleburger 12,554,001 384,925
Hunter Faulconer 12,679,018 259,908
Fred L. Glaize, III 12,679,917 241,009
Henry H. Harrell 12,696,159 242,767
Alex J. Kay, Jr. 12,695,613 243,313
J. A. Kessler, Jr. 12,698,602 240,324
O. Kenton McCartney 12,699,346 239,580
W. A. Rinehart, III 12,686,985 251,941
Gilbert M. Rosenthal 12,698,436 240,490
Alson H. Smith, Jr. 12,698,951 239,975
Lee C. Tait 12,688,306 250,620
H. A. Williamson, Jr. 12,696,926 242,000
The number of votes cast for and against the approval of the 1995 Long
Term Incentive Stock Plan, as well as the number of abstentions in
connection with such vote, are set forth below:
For: 11,296,326 Against: 1,199,864 Abstain: 442,736
The number of votes cast for and against the approval of the Deferred
Compensation and Stock Purchase Plan for Non-Employee Directors, as well as
the number of abstentions in connection with such vote, are set forth below:
For: 11,361,065 Against: 951,943 Abstain: 625,918
The number of votes cast for and against KPMG Peat Marwick LLP as
independent auditors for 1995, as well as the number of abstentions
in connection with such vote, are set forth below:
For: 12,652,591 Against: 60,378 Abstain: 225,957
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The exhibits listed on the accompanying Index to Exhibits
immediately following the signature page are filed as part
of, or incorporated by reference into, this report.
(b) Reports on Form 8-K
Jefferson Bankshares, Inc. filed no reports on Form 8-K during the
quarter ended June 30, 1995.
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 9, 1995 By: O. Kenton McCartney
President and
Chief Executive Officer
and
By: Allen T. Nelson, Jr.
Senior Vice President,
Chief Financial Officer,
and Treasurer
<PAGE>
EXHIBIT INDEX
Exhibit No. Page
3. Articles of Incorporation and Bylaws:
(a) Articles of Incorporation incorporated by
reference to Jefferson Bankshares' Annual
Report on Form 10-K for 1984.
(b) Articles of Amendment to Articles of
Incorporation dated May 7, 1987, incorporated
by reference to Jefferson Bankshares' report
on Form 10-Q for the quarter ended June 30,
1987.
(c) Articles of Amendment to Articles of
Incorporation dated March 23, 1993, incorporated
by reference to Jefferson Bankshares' report
on Form 10-Q for the quarter ended June 30, 1993.
(d) Amended and Restated Bylaws dated January 24, 1995,
incorporated by reference to Jefferson
Bankshares' Annual Report on Form 10-K for 1994.
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.
10. Material Contracts:
(a) Senior Officers Supplemental Pension Plan,
incorporated by reference to Jefferson
Bankshares' Annual Report on Form 10-K for 1982.
(b) Split Dollar Life Insurance Plan, incorporated
by reference to Jefferson Bankshares' Annual
Report on Form 10-K for 1984.
(c) 1995 Long Term Incentive Stock Plan, incorporated
by reference to Exhibt 99(a) to Form S-8 of Jefferson
Bankshares, File No. 33-60799.
(d) Amendment dated June 27, 1995 to 1995 Long Term
Incentive Stock Plan, is filed herewith.
(e) Deferred Compensation and Stock Purchase Plan for
Non-Employee Directors, incorporated by reference
to Exhibit 99(a) to Form S-8 of Jefferson Bankshares,
file No. 33-57461.
(f) Executive Severance Agreement dated October 25,
1993 between Jefferson Bankshares and O. Kenton
McCartney, incorporated by reference to Jefferson
Bankshares' Annual Report on Form 10-K for 1993.
(g) Executive Severance Agreement dated October 25,
1993 between Jefferson Bankshares and Robert H.
Campbell, Jr., incorporated by reference to Jefferson
Bankshares' Annual Report on Form 10-K for 1993.
(h) Executive Severance Agreement dated December 6, 1993
between Jefferson Bankshares, Inc. and Allen T.
Nelson, Jr., incorporated by reference to Jefferson
Bankshares' Annual Report on Form 10-K for 1994.
(i) 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.
(j) Amendment dated February 15, 1995, to the
Amended and Restated Split Dollar Life Insurance
Agreement dated October 29, 1993 between
Jefferson Bankshares and Robert H. Campbell, Jr.,
incorporated by reference to Jefferson Bankshares'
report on Form 10-Q for the quarter ended March
31, 1995.
(k) Amended and Restated Split Dollar Life Insurance
Agreement dated October 29, 1993 between Jefferson
Bankshares and O. Kenton McCartney, incorporated by
reference to Jefferson Bankshares' Annual Report on
Form 10-K for 1993.
(l) 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.
(m) Split Dollar Life Insurance Agreement dated
January 6, 1994 between Jefferson Bankshares, Inc. and
Allen T. Nelson, Jr., incorporated by reference to
Jefferson Bankshares' Annual Report on Form 10-K for 1994.
27. Financial Data Schedule
<PAGE>
AMENDMENT TO
JEFFERSON BANKSHARES, INC.
1995 LONG TERM INCENTIVE STOCK PLAN
The Jefferson Bankshares, Inc. 1995 Long Term Incentive Stock Plan (the
"Plan") is hereby amended as follows:
1. Section 4.1 of Article IV is amended to provide as follows:
4.1 Number of Shares and Limitation on Certain Grants. Subject
to adjustment as provided in Section 4.4 herein:
(a) The maximum aggregate number of Shares that may be
issued pursuant to Awards made under the Plan shall not exceed
750,000. No more than one-third of the aggregate number of such
Shares shall be issued in connection with Restricted Stock Awards
or Other Stock Unit Awards and the maximum number of shares that
may be issued pursuant to Awards made under the Plan to any
Participant in a consecutive twelve month period shall not exceed
75,000.
(b) The maximum number of Shares with respect to which
Incentive Stock Options, Nonqualified Stock Options, Stock
Appreciation Rights or other Awards denominated in Shares may be
granted in any calendar year to a Participant in the Plan is
75,000.
(c) Except as provided in Section 4.2 and 4.3 herein, the
issuance of Shares in connection with the exercise of grants or as
payment for Awards under the Plan shall reduce the number of
Shares available for future grants or Awards under the Plan.
2. Section 6.6.(ii) of Article VI is amended to provide as follows:
(ii) deliver Shares of Stock that the participant has owned for
at least six months (valued at Fair Market Value on the date of
exercise), or cause to be withheld from the Option, Shares of Stock
(valued at their Fair Market Value on the date of exercise) in
satisfaction of all or any part of the Option Price.
3. Section 8.3 of Article VIII is amended to change the reference to
"twelve months" to "thirty-six months."
4. Article IX is deleted and not replaced and references in the Plan
to Performance Shares and Performance Units are hereby deleted.
5. The term "other securities" as used in Section 2.1(q) of Article
II, Article X, and elsewhere in the Plan is hereby deleted.
6. Section 13.2 of Article XIII is amended to provide as follows:
13.2 Stock Withholding or Delivery. As an alternative to
making a cash payment to the Corporation to satisfy tax withholding
obligations, the Committee may establish procedures permitting the
Participant to elect to (i) deliver shares of Shares of Stock owned by
the Participant for at least six months (valued at their Fair Market
Value on the date of delivery), or (ii) have the Corporation retain that
number of Shares of Stock (valued at their Fair Market Value as of the
date specified in the Committee's procedures) that would satisfy all or
a specified portion of the Participant's federal, state and local tax
withholding liabilities arising with respect to the Award in the year it
becomes subject to tax. Any such election shall be made only in
accordance with procedures established by the Committee.
This Amendment adopted June 27, 1995 is effective as though originally
incorporated in the Plan document as approved by the Board of Directors and
the shareholders of Jefferson Bankshares.
JEFFERSON BANKSHARES, INC.
By: /s/ O. Kenton McCartney
President and
Chief Executive Officer
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