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 September 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 October 16, 1995, Registrant had 15,193,810 shares of its $2.50
par value common stock issued and outstanding.
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
Jefferson Bankshares, Inc. and Subsidiaries
Consolidated Balance Sheets
($ in thousands)
September 30 Dec. 31
1995 1994 1994
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ASSETS
Cash and due from banks............................... $ 86,195 $ 94,832 $ 100,809
Federal funds sold and other money market investments. - 300 -
Investment securities:
Available for sale(cost on September 30 of 193,609 164,747 170,815
$191,586 in 1995 and $168,106 in 1994 and
$176,493 on December 31, 1994)
Held to maturity(fair value on September 30 481,522 507,652 467,733
of $483,383 in 1995 and $501,769 in 1994,
and $455,080 on December 31, 1994)
Total Investment Securities........................... 675,131 672,399 638,548
Loans................................................. 1,190,075 1,069,586 1,101,636
Less: Unearned income................................. (72) (154) (136)
Allowance for loan losses....................... (13,992) (13,678) (13,754)
Net loans............................................. 1,176,011 1,055,754 1,087,746
Premises and equipment................................ 51,862 51,530 51,185
Other assets.......................................... 47,035 47,231 47,662
Total Assets.......................................... $2,036,234 $1,922,046 $1,925,950
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand................................................ $ 286,360 $ 265,676 $ 271,447
Interest-bearing transaction accounts................. 799,743 839,343 831,855
Certificates of deposit $100,000 and over............. 89,132 70,307 72,511
Other time............................................ 608,353 514,012 513,059
Total deposits........................................ 1,783,588 1,689,338 1,688,872
Federal funds purchased and
securities sold under repurchase agreements......... 15,440 12,657 16,479
Other liabilities..................................... 16,356 14,513 14,027
Long-term debt........................................ 16 20 19
Total liabilities..................................... 1,815,400 1,716,528 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 15,193,554 shares
September 30, 1995; and 15,202,050 shares September
30,1994; and 15,170,250 shares December 31, 1994.. 37,984 38,005 37,926
Capital surplus....................................... 47,589 45,801 46,332
Retained earnings..................................... 133,946 123,895 125,986
Unrealized gains (losses) on securities
available for sale................................. 1,315 (2,183) (3,691)
Total shareholders' equity ........................... 220,834 205,518 206,553
Total Liabilities and Shareholders' Equity............ $2,036,234 $1,922,046 $1,925,950
See accompanying notes to consolidated financial statements.
</TABLE>
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<TABLE>
Jefferson Bankshares, Inc. and Subsidiaries
Consolidated Statements of Income
(in thousands except per share data)
Three months ended Nine months Ended
September 30 September 30
1995 1994 1995 1994
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INTEREST INCOME
Interest and fees on loans .................. $26,657 $21,621 $77,405 $61,364
Income on investment securities:
Available for sale........................... 2,908 2,594 8,419 8,815
Held to maturity............................. 7,581 8,164 22,214 24,639
Other interest income........................ 190 375 626 971
Total interest income........................ 37,336 32,754 108,664 95,789
INTEREST EXPENSE
Interest-bearing transaction accounts........ 5,896 5,509 17,383 16,055
Certificates of deposit $100,000 and over.... 1,245 710 3,345 2,083
Other time deposits.......................... 8,136 4,982 21,745 15,019
Short-term borrowings........................ 185 110 975 308
Long-term debt............................... - - 1 29
Total interest expense....................... 15,462 11,311 43,449 33,494
NET INTEREST INCOME.......................... 21,874 21,443 65,215 62,295
PROVISION FOR LOAN LOSSES.................... 480 375 1,440 1,225
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES.............................. 21,394 21,068 63,775 61,070
NON-INTEREST INCOME
Trust income................................. 1,125 950 3,375 3,150
Service charges on deposit accounts.......... 2,282 2,177 6,805 6,454
Investment securities gains (losses)......... - 2 (103) 1,166
Mortgage loan sales income................... 93 73 135 615
Other income................................. 837 719 2,357 2,422
Total non-interest income.................... 4,337 3,921 12,569 13,807
NON-INTEREST EXPENSE
Salaries and employee benefits............... 9,862 9,189 29,139 27,756
Occupancy expense, net....................... 1,295 1,317 3,797 3,831
Equipment expense............................ 1,586 1,589 4,579 4,433
F.D.I.C. assessments......................... (82) 961 1,798 2,831
Other expense................................ 3,801 3,429 10,520 10,717
Total non-interest expense................... 16,462 16,485 49,833 49,568
INCOME BEFORE INCOME TAXES................... 9,269 8,504 26,511 25,309
Provision for income taxes................... 3,122 2,892 8,913 8,484
NET INCOME................................... $ 6,147 $ 5,612 $17,598 $16,825
NET INCOME PER COMMON SHARE.................. $ 0.40 $ 0.37 $ 1.16 $ 1.11
AVERAGE SHARES OUTSTANDING................... 15,179 15,177 15,177 15,137
See accompanying notes to consolidated financial statements.
</TABLE>
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<TABLE>
Jefferson Bankshares, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
($ in thousands)
Nine months ended
September 30
1995 1994
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Cash flows from operating activities:
Net income.......................................... $ 17,598 $ 16,825
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization....................... 4,810 4,442
Accretion and amortization.......................... 3,143 3,950
Provision for loan losses........................... 1,440 1,225
Investment securities (gains)losses, net............ 103 (1,166)
Gain on sale of premises and equipment.............. (30) (167)
(Increase) decrease in interest receivable.......... (1,666) 226
Increase in interest payable........................ 1,372 106
Decrease (increase) in loans held for resale, net... (1,456) 5,437
Other, net.......................................... 1,006 (451)
Total adjustments................................... 8,722 13,602
Net cash provided by
operating activities............................... 26,320 30,427
Cash flows from investing activities:
Proceeds from maturities of investment securities
held to maturity.................................. 96,254 90,210
Proceeds from calls of investment securities
held to maturity.................................. 148 4,228
Purchase of investment securities held to maturity.. (112,668) (96,417)
Proceeds from maturities of securities available
for sale.......................................... 30,500 19,450
Proceeds from sales of securities available
for sale.......................................... 11,347 44,197
Purchase of securities available for sale........... (57,709) (23,593)
Net increase in loans............................... (88,454) (54,615)
Business combinations, net of cash.................. 31,369 21,130
Proceeds from sales of premises and equipment....... 319 198
Proceeds from sales of foreclosed properties........ 2,038 2,372
Purchases of premises and equipment................. (5,252) (7,649)
Net cash used in investing activities............... (92,108) (489)
Cash flows from financing activities:
Net increase (decrease) in deposits................. 60,204 (11,546)
Net decrease in short-term borrowings............... (1,039) (41,441)
Repayment of long-term debt......................... (3) (1,193)
Proceeds from issuance of common stock.............. 1,450 2,147
Payments to acquire common stock.................... (1,121) (149)
Dividends paid...................................... (8,317) (7,450)
Net cash provided by (used in) financing activities. 51,174 (59,695)
Net decrease in cash
and cash equivalents.............................. (14,614) (29,757)
Cash and cash equivalents at beginning of period.... 100,809 124,889
Cash and cash equivalents at end of period.......... $ 86,195 $ 95,132
Supplemental disclosure of cash flow information
Cash payments for:
Interest.......................................... $ 42,077 $ 33,388
Income taxes...................................... 7,953 7,825
Non-cash investing and financing activities:
Loan balances transferred to foreclosed properties $ 312 $ 1,459
See accompanying notes to consolidated financial statements
</TABLE>
<TABLE>
Jefferson Bankshares, Inc. and Subsidiaries
Consolidated Statements of Changes in Shareholders' Equity
($ in thousands) Nine Months Ended
September 30
1995 1994
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Balance, January 1.......................................$206,553 $196,434
Net income............................................... 17,598 16,825
Cash dividends declared.................................. (8,652) (7,556)
Change in unrealized gains (losses) on securities
available for sale..................................... 5,006 (2,183)
Issuance of common stock for dividend reinvestment plan.. - 1,774
Issuance of common stock for incentive stock plan........ 1,450 -
Issuance of common stock for stock options............... - 373
Acquisition of common stock.............................. (1,121) (149)
Balance, September 30....................................$220,834 $205,518
</TABLE>
See accompanying notes to consolidated financial statements.
Notes to Consolidated Financial Statements
($ 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.
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Note 2 - Allowance for Loan Losses
A summary of transactions in the consolidated allowance for
the nine months ended September 30 follows:
1995 1994
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Balance, January 1............................ $ 13,754 $ 13,864
Provision..................................... 1,440 1,225
Recoveries.................................... 594 455
Loan losses................................... (1,796) (1,866)
Balance, September 30......................... $ 13,992 $ 13,678
</TABLE>
<TABLE>
Note 3 - Income Taxes
Income tax expense for the nine months ended September 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......... $ 9,279 $ 8,858
Increase (reduction)in taxes
resulting from:
Tax exempt interest................... (587) (705)
Other, net............................ 221 331
Provision for income taxes............ $ 8,913 $ 8,484
</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. 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 merger
dates.
FINANCIAL CONDITION
Total assets on September 30, 1995 were $2.036 billion, or 6
percent above the year earlier total of $1.922 billion. At December 31,
1994, total assets were $1.926 billion. Average total assets in the
third quarter of 1995 were $2.026 billion, or 5 percent higher than the
third quarter 1994 average of $1.924 billion. After nine months, total
assets averaged $1.977 billion in 1995 compared with $1.921 billion in
1994.
Loan totals rose to $1.190 billion on September 30, 1995, or 11
percent above the year earlier total of $1.069 billion. On December 31,
1994, loans, net of unearned income, totaled $1.102 billion. Loan growth
in the third quarter of 1995 principally occurred in the same segments of
the loan portfolio as in prior periods. Increases were recorded in
indirect instalment loans, commercial loans, and mortgage loans. Average
loans, net of unearned income, increased 12 percent in the third quarter of
1995 to $1.175 from $1.046 billion in the third quarter of 1994. After
nine months, loans, net of unearned income, averaged $1.152 billion in
1995, or 11 percent above $1.036 billion the same period in 1994.
The investment securities portfolio on September 30, 1995 totaled
$675 million, which was slightly above the year earlier total of $672
million. The investment securities available for sale portfolio
increased 18 percent to $194 million on September 30, 1995, from the year
earlier total of $165 million. Securities held to maturity decreased 5
percent to $481 million from the year earlier total of $507 million.
In the third quarter, investment securities averaged $667 million in 1995
and $675 million in 1994. After nine months, the portfolio averaged $644
million in 1995 and $693 million in 1994.
In accordance with 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 fair value and the
amortized cost of securities available for sale had an unrealized gain of
$2.0 million, or $1.3 million net of tax effects. At December 31, 1994,
the difference resulted in an unrealized loss of $5.7 million, or $3.7
million, net of tax effects. The unrealized gains at September 30, 1995
resulted from a decline in the level of interest rates and investment of
funds into securities at current market rates.
On September 30, 1995 the Corporation was not invested in short-term
money market investments. One year earlier the total was $300 thousand.
At December 31, 1994, the Corporation did not own any of these instruments.
Total deposits on September 30, 1995, were $1.784 billion, or 6 percent
above the year earlier total of $1.689 billion. At year-end 1994,
deposits totaled $1.689 billion. Near the end of the second quarter of
1995, two deposit acquisitions added approximately $35 million to deposit
totals. Compared with year earlier totals, demand deposits increased 8
percent to $286 million on September 30, 1995. Interest-bearing accounts,
however, decreased 5 percent to $800 million. Certificates of deposit
of $100 thousand and over increased 27 percent to $89 million. Other
time deposits increased 18 percent to $608 million on September 30, 1995.
The increase in other time deposits was partially attributable to a
promotional campaign conducted in the first and second quarters of 1995.
Average total deposits in the third quarter were $1.773 billion in 1995
and $1.693 billion in 1994. After nine months in 1995, total deposits
averaged $1.722 billion compared with $1.690 billion in the same period
in 1994.
RESULTS OF OPERATIONS
Net income increased 10 percent in the third quarter of 1995 to
$6.1 million from $5.6 million in the third quarter of 1994. Earnings
per share rose 8 percent in the third quarter to $.40 in 1995 from $.37
in 1994.
After nine months in 1995, net income totaled $17.6 million, or 5
percent above net income of $16.8 million in the comparable period of
1994. Net income per share also increased 5 percent to $1.16 after nine
months in 1995 from $1.11 in the 1994 period.
Net income in the third quarter of 1995 produced a return on
average assets of 1.21 percent compared with 1.17 percent in the third
quarter of 1994. After nine months this ratio of profitability was 1.19
percent in 1995 compared with 1.17 percent in 1994. In the third quarter
of 1995, the return on average shareholders' equity improved to 11.18
percent from 10.91 percent in the same quarter of 1994. After nine
months, this ratio was 10.90 percent in 1995 and 11.01 percent in 1994.
Interest income increased 14 percent in the third quarter of 1995
compared with the third quarter of 1994. Interest expense, however,
increased 37 percent in the third quarter of 1995. The result was a 2
percent increase in net interest income. Interest income rose 13 percent
after nine months of 1995 compared with the same period in 1994. For
those respective periods, interest expense increased 30 percent. Thus,
net interest income increased 5 percent after nine months in 1995. The
differential between the growth in interest income and interest expense
reflects the repricing of deposits at higher interest rate levels and
increased competition for both loans and deposits.
As the cost of funds increased relative to yield on earning assets,
the net interest margin came under pressure. In the third quarter of
1995 the net interest margin was 4.78 percent compared with 4.95 percent
in the third quarter of 1994. In the first two quarters of 1995 the net
interest margin was 5.05 percent and 4.84 percent, respectively. After
nine months, the net interest margin was high at 4.88 percent in 1995
compared with 4.80 percent in 1994.
The provision for loan losses was $480 thousand in the third
quarter of 1995 and $1.4 million after nine months in 1995. The amounts
in the comparable 1994 periods were $375 thousand and $1.2 million. The
18 percent increase in the provision for the nine month periods was
attributable principally to growth in the loan portfolio. On September
30, 1995, the allowance for loan losses totaled $14.0 million, or 1.18
percent of loans, net of unearned income. One year earlier, the
allowance totaled $13.7 million, or 1.28 percent of loans, net unearned
income.
Both net loan losses and non-performing assets declined from year
earlier levels. Net loan losses in the third quarter of 1995 amounted
to $373 thousand, or only .13 percent (annualized) of average loans, net
of unearned income. In the third quarter of 1994, net loan losses
totaled $403 thousand, or .15 percent (annualized) of average loans.
After nine months, net loan losses were $1.2 million in 1995, or 15
percent less than $1.4 million in 1994. Net loan losses represented .14
percent (annualized) of average loans after nine months in 1995 compared
with .18 percent in the comparable 1994 period.
On September 30, 1995, total nonperforming assets were $11.7
million, or 17 percent below the year earlier total of $14.1 million.
The 1995 total was composed of $7.7 million in nonaccrual loans and $4.0
million in foreclosed properties. In 1994, the total contained $7.1
million in nonaccrual loans and $7.0 million in foreclosed properties.
Although the September 30, 1995 total was less than the year earlier
total, it was above the June 30, 1995 total of $10.2 million. The
increase was attributable principally to a single credit. On September
30, 1995, loans 90 days or more past due totaled $3.4 million compared
with the year earlier total of $2.9 million.
Non-interest income in the third quarter of 1995 of $4.3 million
was 11 percent above $3.9 million recorded in the third quarter of 1994.
Contributing to the increase were trust fees, which rose 18 percent,
deposit account fees, which increased 5 percent, and other income, which
was 16 percent higher in the 1995 quarter. Mortgage loans sales income
also rose 27 percent, but represented only a $20 thousand increase.
After nine months, non-interest income totaled $12.6 million, or 9
percent below the year earlier total. This comparison was influenced by
$1.2 million in securities gains recorded in the 1994 period. Excluding
securities gains and losses, non-interest income after nine months was
approximately level with the 1994 amount. Comparing the nine month
periods in 1995 and 1994, trust income increased 7 percent, and deposit
account fees were 5 percent higher. Other income decreased 3 percent in
the 1995 period and income from mortgage loan sales declined
significantly from $615 thousand in 1994 to $135 thousand in 1995.
Non-interest expense in the third quarter of 1995 was $16.5 million,
which was approximately level with the year earlier amount. Non-interest
expense was favorably affected in the third quarter of 1995 by a
reduction in the F.D.I.C premium assessment rate to $.04 from $.23 per
$100 of insured deposits. Also, a rebate of $1.1 million was recorded
in the third quarter of 1995. The result was a net benefit of $82
thousand for these assessments in the third quarter of 1995 compared with
an expense of $961 thousand in the third quarter of 1994. The benefit of
the premium reduction was absorbed by increases in other expense
categories. Comparing the third quarter of 1995 and 1994, personnel
expense rose 7 percent and other expense increased 11 percent. Occupancy
expense and equipment expense were nearly unchanged in the third
quarters of 1995 and 1994.
After nine months in 1995, non-interest expense totaled $49.8
million, or only one half percent above the comparable 1994 amount.
Decreases in F.D.I.C. assessments and other expenses were the principal
factors for the consistent balance. For the nine month periods of 1995
and 1994, personnel expense increased 5 percent, equipment expense was 3
percent higher, and occupancy expense was approximately level.
Income tax expense increased to $3.1 million in the third quarter
of 1995 from $2.9 million in the third quarter of 1994. After nine
months, income tax expense totaled $8.9 million in 1995 compared with
$8.5 million in 1994. Both increases were attributable principally to
higher pre-tax income.
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 September 30, 1995, shareholders' equity totaled $221 million,
or 10.8 percent of total assets. Included in shareholders' equity on
September 30, 1995 were unrealized gains on securities available for
sale, net of tax effects, of $1.3 million. In the third quarter of 1995,
shareholders' equity averaged $220 million compared with the $206 million
average in the third quarter of 1994. After nine months, shareholders'
equity averaged $215 million in 1995 and $204 million in 1994. On
September 30, 1995, the book value per share of common stock was $14.53,
or 7 percent above the year earlier total of $13.54.
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
Not applicable.
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 filed no reports on Form 8-K during the quarter
ended September 30, 1995.
Pursuant to the requirements of the Securities Exchange Act of 1934
the Registrant has caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
JEFFERSON BANKSHARES, INC.
November 13, 1995 By: O. Kenton McCartney
President and
Chief Financial Officer
and
By: Allen T. Neslson, Jr.
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 Exhibit 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, incorporated by reference
to Jefferson Bankshares' report on Form 10-Q for
the quarter ended June 30, 1995.
(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 14
99. First Amendment dated September 26, 1995 to the 15
Employee Stock Purchase Plan, is filed herewith.
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<PAGE>
FIRST AMENDMENT TO
JEFFERSON BANKSHARES, INC.
EMPLOYEE STOCK PURCHASE PLAN
The Jefferson Bankshares, Inc. Employee Stock Purchase Plan
(the "Plan") is hereby amended as follows:
1. Section 2.k is amended to provide as follows:
k. Investment Account: The account established by
the Agent for each Participating Employee to record Common
Stock purchased under, or deposited into, the Plan.
2. Section 5 is amended to add the following as the fourth
paragraph in that section:
A Participating Employee may also deposit shares of
Common Stock, including shares of Common Stock held on
behalf of the Participating Employee in the Company's
Dividend Reinvestment Plan, into the Participating
Employee's Investment Account. Shares of Common Stock to be
deposited into a Participating Employee's Investment Account
must be registered solely in the name of the Participating
Employee or, if held on behalf of the Participating Employee
in the Company's Dividend Reinvestment Plan, held solely on
behalf of the Participating Employee. Participating
Employees who wish to deposit shares of Common Stock into
their Investment Account must mail their request and, if
applicable, the certificates representing their Common Stock
to the Agent.
This Amendment is adopted as of September 26, 1995.
Jefferson Bankshares, Inc.
By: /s/ O. Kenton McCartney
President and
Chief Executive Officer
