FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[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
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______.
Commission file number 010042
One Valley Bancorp of West Virginia, Inc.
(Exact name of registrant as specified in its charter)
West Virginia 55-0609408
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
One Valley Square, Charleston, West Virginia 25326
(Address of principal executive offices)
(Zip Code)
(304) 348-7000
(Registrant's telephone number, including area code)
Not applicable
(Former name, address, and fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities and Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.
YES XXX No
The number of shares outstanding of each of the issuer's classes of common stock
as of September 30, 1995 was:
Common Stock, $10.00 par value -- 17,133,964 shares
<PAGE>
One Valley Bancorp of West Virginia, Inc.
Part I. Financial Information
Item 1. Financial Statements.
The unaudited interim consolidated financial statements of One Valley Bancorp
of West Virginia, Inc. (One Valley) or (Registrant) are included on pages 3 - 7
of this report.
These consolidated financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial information and
with instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly,
they do not include all the information and footnotes required by generally
accepted accounting principles for annual year-end financial statements. In
the opinion of management, all adjustments considered necessary for a fair
presentation have been included and are of a normal recurring nature.
Operating results for the nine month period ended September 30, 1995 are not
necessarily indicative of the results that may be expected for the year ending
December 31, 1995. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Registrant's Annual
Report on Form 10-K for the year ended December 31, 1994.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Management's discussion and analysis of financial condition and results of
operations is included on pages 8 - 16 of this report.
<PAGE>
<TABLE>
ONE VALLEY BANCORP OF WEST VIRGINIA, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(unaudited in thousands)
<CAPTION>
September 30 December 31 September 30
1995 1994 1994
<S> <C> <C> <C>
Assets
Cash and Due From Banks $142,951 $178,900 $130,413
Interest Bearing Deposits With Other Banks 5,194 4,297 7,245
Federal Funds Sold 500 24,875 20,000
---------- ---------- ----------
Cash and Cash Equivalents 148,645 208,072 157,658
Securities
Available-for-Sale, at fair value 549,106 541,201 568,973
Held-to-Maturity (Estimated Fair Value,
Sept. 30, 1995 - $466,413; December 31, 1994 - $422,381;
Sept. 30, 1994 - $434,818) 464,453 445,158 448,964
Loans
Total Loans 2,469,786 2,372,957 2,317,995
Less: Allowance For Loan Losses 39,428 37,438 37,650
---------- ---------- ----------
Net Loans 2,430,358 2,335,519 2,280,345
Bank Premises & Equipment - Net 81,684 82,853 82,893
Other Assets 63,805 60,438 60,350
---------- ---------- ----------
Total Assets $3,738,051 $3,673,241 $3,599,183
========== ========== ==========
Liabilities and Shareholders' Equity
Deposits
Non-interest Bearing $390,661 $378,512 $428,181
Interest Bearing 2,650,137 2,547,967 2,490,065
---------- ---------- ----------
Total Deposits 3,040,798 2,926,479 2,918,246
Short-term Borrowings
Federal Funds Purchased 17,960 53,145 12,443
Repurchase Agreements and Other Borrowings 278,489 322,194 299,537
---------- ---------- ----------
Total Short-term Borrowings 296,449 375,339 311,980
Long-term Borrowings 8,434 19,450 24,472
Other Liabilities 36,580 30,106 26,971
---------- ---------- ----------
Total Liabilities 3,382,261 3,351,374 3,281,669
Shareholders' Equity:
Preferred Stock-$10 par value; 1,000,000 shares authorized
but none issued 0 0 0
Common Stock-$10 par value; 40,000,000 shares authorized,
Issued 17,994,164 shares at September 30, 1995;
17,538,368 shares at December 31, 1994;
17,533,778 shares at September 30, 1994; 179,942 175,384 175,338
Capital Surplus 34,340 25,954 25,935
Retained Earnings 160,043 137,437 130,138
Unrealized Gain (Loss) on Securities Available-for-Sale,
net of deferred taxes; 1,795 (6,535) (3,919)
Treasury Stock - 860,200 shares at September 30, 1995,
533,500 shares at December 31, 1994;
519,500 shares at September 30, 1994; at cost (20,330) (10,373) (9,978)
---------- ---------- ----------
Total Shareholders' Equity 355,790 321,867 317,514
---------- ---------- ----------
Total Liabilities and Shareholders' Equity $3,738,051 $3,673,241 $3,599,183
========== ========== ==========
</TABLE>
<PAGE>
<TABLE>
ONE VALLEY BANCORP OF WEST VIRGINIA, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(unaudited in thousands, except per share data)
<CAPTION>
For The Three Months For The Nine Months
Ended September 30 Ended September 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Interest Income
Interest and Fees on Loans
Taxable $55,265 $48,720 $161,285 $138,867
Tax-Exempt 609 603 1,863 1,728
-------- -------- -------- --------
Total 55,874 49,323 163,148 140,595
Interest on Investment Securities
Taxable 12,797 12,189 37,438 36,846
Tax-Exempt 2,655 2,572 7,661 7,569
-------- -------- -------- --------
Total 15,452 14,761 45,099 44,415
Other Interest Income 491 255 1,614 749
-------- -------- -------- --------
Total Interest Income 71,817 64,339 209,861 185,759
Interest Expense
Deposits 27,428 21,167 78,958 62,577
Short-term Borrowings 3,486 2,744 9,962 5,565
Long-term Borrowings 143 245 554 779
-------- -------- -------- --------
Total Interest Expense 31,057 24,156 89,474 68,921
-------- -------- -------- --------
Net Interest Income 40,760 40,183 120,387 116,838
Provision For Loan Losses 1,762 1,185 3,988 3,577
-------- -------- -------- --------
Net Interest Income
After Provision For Loan Losses 38,998 38,998 116,399 113,261
Other Income
Trust Department Income 2,036 1,891 6,063 5,968
Service Charges on Deposit Accounts 3,596 2,821 10,330 8,407
Real Estate Loan Processing & Servicing Fees 1,272 1,249 3,551 3,977
Other Service Charges and Fees 1,391 1,262 3,776 3,538
Other Operating Income 1,810 2,026 5,408 7,069
Securities Transactions (86) (410) (66) (717)
-------- -------- -------- --------
Total Other Income 10,019 8,839 29,062 28,242
Other Expenses
Salaries and Employee Benefits 15,261 15,521 47,142 47,312
Occupancy Expense - Net 1,556 1,507 4,656 4,461
Equipment Expenses 2,093 2,071 6,500 6,200
Federal Deposit Insurance 1,479 1,642 4,815 4,965
Outside Data Processing 1,180 1,242 3,396 3,483
Other Operating Expenses 8,931 8,331 25,368 23,569
-------- -------- -------- --------
Total Other Expenses 30,500 30,314 91,877 89,990
-------- -------- -------- --------
Income Before Taxes 18,517 17,523 53,584 51,513
Applicable Income Taxes 6,187 5,724 17,668 16,834
-------- -------- -------- --------
Net Income $12,330 $11,799 $35,916 $34,679
======== ======== ======== ========
Net Income Per Common Share $0.72 $0.69 $2.09 $2.02
======== ======== ======== ========
Based on Average Shares Outstanding of 17,159 17,105 17,198 17,173
</TABLE>
<PAGE>
<TABLE>
ONE VALLEY BANCORP OF WEST VIRGINIA, INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders' Equity
(unaudited in thousands)
<CAPTION>
Unrealized
Gain (Loss)
on Securities
Common Capital Retained Treasury Available
Stock Surplus Earnings Stock for Sale
<S> <C> <C> <C> <C> <C>
Balance December 31, 1994 $175,384 $25,954 $137,437 ($10,373) ($6,535)
Stock Issued for Acquisition 4,116 8,130 0 0 0
Nine Months Ended September 30, 1995
Net Income 0 0 35,916 0 0
Cash Dividends ($.77 per share) 0 0 (13,310) 0 0
Change in Fair Value of Securities
Available for Sale, net of deferred taxes 0 0 0 0 8,330
Treasury Shares Purchased 0 0 0 (9,957) 0
Stock Options Exercised 442 256 0 0 0
-------- -------- -------- -------- --------
Balance September 30, 1995 $179,942 $34,340 $160,043 ($20,330) $1,795
======== ======== ======== ======== ========
Balance December 31, 1993 $175,168 $25,830 $107,314 ($3,129) $0
Effect of adopting FAS 115 0 0 0 0 4,765
Nine Months Ended September 30, 1994
Net Income 0 0 34,679 0 0
Cash Dividends ($.69 per share) 0 0 (11,855) 0 0
Change in Fair Value of Securities
Available for Sale, net of deferred taxes 0 0 0 0 (8,684)
Treasury Shares Purchased 0 0 0 (6,849) 0
Stock Options Exercised 170 105 0 0 0
-------- -------- -------- -------- --------
Balance September 30, 1994 $175,338 $25,935 $130,138 ($9,978) ($3,919)
======== ======== ======== ======== ========
</TABLE>
<PAGE>
<TABLE>
ONE VALLEY BANCORP OF WEST VIRGINIA, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited in thousands)
<CAPTION>
For The Nine Months
Ended September 30
1995 1994
<S> <C> <C>
Operating Activities
Net Income $35,916 $34,679
Adjustments To Reconcile Net Income To Net Cash
Provided by Operating Activities:
Provision For Loan Losses 3,988 3,577
Depreciation 6,061 5,605
Amortization and Accretion 2,643 3,134
Net (Gain) Loss From Sales of Assets 66 717
Increase (Decrease) Due to Changes In:
Accrued Interest Receivable (3,024) (1,568)
Accrued Interest Payable 3,088 283
Other Assets and Other Liabilities 552 (4,038)
-------- --------
Net Cash Provided by Operating Activities 49,290 42,389
Investing Activities
Proceeds From Sales of Securities Available for Sale 80,669 131,352
Proceeds From Maturities of Securities Available for Sale 177,181 180,881
Proceeds From Maturities of Securities Held to Maturity 25,191 52,830
Purchases of Securities Available for Sale (219,400) (246,270)
Purchases of Securities Held to Maturity (45,164) (88,033)
Net Increase In Loans (86,539) (145,920)
Acquisition of Subsidiary, Net of Cash Paid 4,454 0
Purchases of Premises and Equipment (4,309) (8,265)
-------- --------
Net Cash Used in Investing Activities (67,917) (123,425)
Financing Activities
Net Change in Interest Bearing and Non-interest Bearing Deposits 72,174 (18,489)
Net (Decrease) in Federal Funds Purchased (35,185) (1,569)
Net (Decrease) Increase in Other Short-term Borrowings (43,705) 95,129
Proceeds From Long-term Borrowings 0 14,699
Repayment of Long-term Debt (11,516) (13,015)
Proceeds From Issuance of Common Stock 699 275
Acquisition of Treasury Stock (9,957) (6,849)
Dividends Paid (13,310) (11,855)
-------- --------
Net Cash (Used in) Provided by Financing Activities (40,800) 58,326
-------- --------
Decrease in Cash and Cash Equivalents (59,427) (22,710)
Cash And Cash Equivalents at Beginning of Year 208,072 180,368
-------- --------
Cash And Cash Equivalents, September 30 $148,645 $157,658
======== ========
</TABLE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note A - Basis of Presentation
The accounting and reporting policies of One Valley conform to generally
accepted accounting principles and practices in the banking industry. All
significant intercompany accounts and transactions have been eliminated in
consolidation. The interim financial information included in this report is
unaudited. In the opinion of management, all adjustments necessary for a fair
presentation of the results of the interim periods have been made. These notes
are presented in conjunction with the Notes to Consolidated Financial
Statements included in the Annual Report of One Valley.
Note B - Accounting Change
Effective January 1, 1995, One Valley adopted the provisions of FASB Statement
114, "Accounting by Creditors for Impairment of a Loan" as amended by FASB
Statement 118. Under Statement 114 a loan is impaired when, based on current
information and events, it is probable that One Valley will be unable to
collect all amounts due according to the contractual terms of a loan agreement.
The effect of adopting this Statement was immaterial to One Valley's financial
statements.
Note C - Acquisitions
At the close of business on March 15, 1995, One Valley acquired all of the
outstanding stock of Point Bancorp, Inc., the parent company of a $57 million
Federal Savings Bank located in Point Pleasant, WV. Pursuant to the merger
agreement, One Valley exchanged 0.6 shares of its common stock and $7.10 cash
for each share of Point Bancorp common stock. A total of 411,602 shares were
issued in this transaction. This combination was accounted for under the
purchase method of accounting. Accordingly, consolidated results include the
operations of Point Bancorp only from the date of acquisition.
<PAGE>
One Valley Bancorp of West Virginia, Inc.
Management's Discussion and Analysis of Financial Condition and Results of
Operations
September 30, 1995
INTRODUCTION AND SUMMARY
Net income for the third quarter of 1995 totaled $12.3 million, an
increase of 4.5% over the $11.8 million earned in the same quarter of 1994. On
a per share basis, net income of $0.72 for the third quarter of 1995 increased
4.4% over the $0.69 earned during the same period in 1994. The improvement in
earnings during the quarter can be attributed, in large part, to an increase in
non-interest income while year-to-date earnings are up due to increased net
interest income.
Net income for the first nine months of 1995 totaled $35.9 million, a
3.6% increase over the first nine months of 1994. Earnings per share during
the nine month period were $2.09, up 3.5% over the $2.02 earned in the first
nine months of 1994.
Return on average assets (ROA) measures how effectively One Valley
utilizes its assets to produce net income. ROA was 1.30% in the first nine
months of 1995, a slight decrease from the 1.31% earned during the first nine
months of 1994. Return on average equity (ROE) also decreased, from 14.70% for
the first nine months of 1994 to 13.93% earned over the first nine months of
1995.
The following discussion is an analysis of the financial condition and
results of operations of One Valley for the first nine months of 1995. This
discussion should be read in conjunction with the 1994 Annual Report to
Shareholders and the other financial information included in this report.
RESULTS OF OPERATIONS
Net Interest Income
Net interest income for the nine months ended September 30, 1995, was
$125.5 million on a fully tax-equivalent basis, a 3.0% increase from the $121.8
million earned during the same period in 1994. This increase is largely due to
a $208.5 million, or 9.4% increase in average total loans during the first nine
months comparison. Average earning assets increased by 4.1% in the first nine
months of 1995 over the same period in 1994, while average interest bearing
liabilities increased by 5.1% in the same comparison. Both total interest
income and total interest expense increased from the prior year due to the
increases in volume and a higher interest rate environment. However, since the
growth in loans, One Valley's highest yielding asset, outpaced the growth in
average interest bearing liabilities, net interest income also increased.
As the interest rate environment rose during 1994 and into 1995, the
change in the cost of interest bearing liabilities has outpaced the change in
the yield on earning assets. As shown in the consolidated average balance
sheets (page 16), the yield on earning assets, increased 64 basis points to
8.44% in the first nine months of 1995 from 7.80% in the first nine months of
1994. During the same period, the cost of interest bearing liabilities
increased 78 basis points to 4.11% from last year's 3.33% level. Due to the
greater increase in the cost of interest bearing liabilities, the net interest
margin decreased slightly to 4.92% during the first nine months of 1995,
compared to 4.98% during the first nine months of 1994. At September 30, 1995,
One Valley's asset/liability structure was slightly asset sensitive in the six
month time frame. Thus, normal fluctuations in market interest rates should
not have a significant impact on One Valley's net interest margin.
Credit Experience
The provision for loan losses was $4.0 million for the nine months ended
September 30, 1995, a 11.5% increase from the $3.6 million provision during the
first nine months of 1994. The increase in the provision for loan losses was
based upon One Valley's continued evaluation process of the adequacy of the
allowance for loan losses and to provide for the loan growth described in the
asset discussion to follow. As a percentage of average total loans, the
provision for loan losses through the first nine months of 1995 was 0.22%
annualized which equaled the ratio for the first nine months of 1994. Net
charge-offs as a percentage of average total loans in the first nine months of
1995 decreased to 0.12% on an annualized basis, down from an annualized 0.15%
during the first nine months of 1994.
Total non-performing assets at September 30, 1995, were 0.35% of period-
end loans, a decline from the 0.41% at year-end 1994 and the 0.42% at September
30, 1994. At September 30, 1995, loans past due over 90 days were 0.18% of
outstanding loans, a slight increase over the 0.16% level at year-end 1994, and
September 30, 1994. The dollar amounts of both non-performing assets and loans
past due over 90 days are detailed in the analysis on page 15.
With the continued good credit quality of the loan portfolio, the
allowance for loan losses has remained relatively stable. At September 30,
1995, the allowance was 1.60% of outstanding loans, up slightly from the 1.58%
at year-end, but down from the 1.62% one year ago.
On January 1, 1995, One Valley adopted the provisions of FASB Statement
114, "Accounting by Creditors for Impairment of a Loan" as amended by FASB
Statement 118. Under Statement 114 a loan is impaired when, based on current
information and events, it is probable that One Valley will be unable to
collect all amounts due according to the contractual terms of a loan agreement.
The effect of adopting this Statement was immaterial to One Valley's financial
statements.
Non-Interest Income and Expense
Total non-interest income was $29.1 million through the first nine
months of 1995, up 2.9% from the $28.2 million non-interest income earned
during the same period in 1994. Trust income increased by 1.6% from the first
nine months of last year. Service charges on deposit accounts increased by
22.9% in the first nine month comparisons due to new product fees introduced in
the fourth quarter of 1994. Real estate loan processing and service fees
declined by 10.7% when compared to the first nine months of 1994. The higher
interst rate environment in 1995 has reduced the volume of loan originations
and consequently fees from the origination and sale of loans in the secondary
market have decreased. Other service charges and fees increased by 6.7% over
the first nine months of 1994, primarily due to increases in credit life
commissions. Other operating income decreased by $1.7 million or 23.5% due to
a lower level of income recognized on the disposition of other real estate
owned and other loan payoffs.
Total non-interest expense was $91.9 million during the nine months
ended September 30, 1995, up 2.1% over the same period in 1994. Staff costs
were relatively unchanged when compared to 1994. Staffing levels have declined
by 3.8% from September 30, 1994, as operations are continually being
streamlined and staffing levels are reduced through normal attrition.
Occupancy expense increased by 4.4% and equipment expense increased by 4.8% in
the first nine months of 1995 primarily due to an increase in depreciation
resulting from facility renovations and losses on asset disposals. Outside
data processing expense was slightly less than the same period in 1994, while
other operating expenses increased 7.6% in the first nine months of 1995,
largely due to expenses related to the new deposit products introduced in the
fourth quarter of 1994. These expenses were more than offset by the increases
in new product fees discussed above.
During the third quarter, the Federal Deposit Insurance Corporation
(FDIC) lowered its insurance assessment rates as part of the nationwide funding
of the Bank Insurance Fund (BIF). However, to boost the Savings Association
Insurance Fund (SAIF), a one time assessment on thrift deposits has been
proposed. At September 30, 1995, One Valley had over $400 million of SAIF
assessable deposits resulting from prior acquisitions of Savings and Loan
institutions. Accordingly, One Valley began accruing for its portion of this
assessment during the third quarter. For the third and fouth quarters of 1995,
One Valley anticipates that the benefit of the lower FDIC premium rates will be
primarily offset by the increase in SAIF premium assessments.
The net overhead ratio (non-interest expense less non-interest income
excluding security transactions divided by average earning assets) is a measure
of the company's ability to control costs and equalizes the comparison of
differently sized operations. As this ratio decreases, more of the net
interest margin earned flows to net income. One Valley's net overhead ratio
for the first nine months of 1995 was 2.46%, down slightly from 2.52% during
all of 1994 and down slightly from the 2.49% during the first nine months of
1994. This decline is a result of the growth of average earning assets
exceeding the increase in net overhead costs. Average earning assets increased
4.1% in the first nine months of 1995 when compared with the same period in
1994. Net overhead, however, has been limited to a 2.8% increase during the
same period partially due to the streamlining of operations through a
reengineering process which began in early 1995.
Income tax expense increased by $834,000, or 5.0%, for the first nine
months of 1995 in comparison to 1994. The increase in taxes is a result of the
4.0% growth in pretax earnings. One Valley's effective income tax rate for the
first nine months of 1995 was 33.0% compared to 32.7% during the first nine
months of 1994.
FINANCIAL CONDITION
Asset Structure
Total loans continued to grow when compared to the first nine months of
1994. At September 30, 1995, total loans exceeded September 30, 1994, levels
by 6.5% or $151.8 million. The consolidated loan-to-deposit ratio has also
increased to 79.9% at September 30, 1995, compared to 78.1% at September 30,
1994. Since year-end 1994, total loans have increased by 4.1% or $96.8
million. This increase in total loans has resulted from balanced growth in the
three major loan categories; commercial, real estate, and consumer installment.
In May 1995, the FASB issued Statement 122, Accounting for Mortgage
Servicing Rights. Statement 122 requires financial institutions to recognize
rights to service mortgage loans for others as separate assets. Mortgage
Servicing Rights can be purchased from a third party or retained from loans
originated internally and sold to third party investors. This statement is to
be adopted for fiscal years beginning after December 15, 1995. The adoption of
this Statement is not anticipated to have a material effect on One Valley's
financial statements.
Investment portfolio assets increased $27.2 million or 2.8% from the
level at year-end but decreased by 0.4% or $4.4 million from the level one year
ago. Due to strong loan demand during 1994 and 1995, growth in the investment
portfolio has been relatively modest as One Valley has been able to place more
of its investable funds into the higher yielding loan portfolio.
At the time of purchase, management determines the appropriate
classification of securities. If management has the positive intent and One
Valley has the ability at the time of purchase to hold securities until
maturity, they are classified as held-for-investment and carried at amortized
historical cost adjusted for amortization of premiums and accretion of
discounts, which are recognized as adjustments to interest income. Securities
to be held for indefinite periods of time and not intended to be held to
maturity or on a long-term basis are classified as available-for-sale and
carried at fair value. The corresponding difference between the historical
cost and the current fair value of these securities, the unrealized gain or
loss, is an adjustment to shareholders' equity, net of deferred taxes.
Securities available-for-sale include securities that management intends to use
as part of its asset/liability management strategy and that may be sold in
response to changes in interest rates, resultant prepayment risk, and other
related risk factors.
Securities designated as available-for-sale at September 30, 1995, had
an historical cost of $546.1 million, with an unrealized gain of approximately
$3.0 million, which increased shareholders' equity by $1.8 million, net of $1.2
million in deferred income taxes. At year-end December 31, 1994, and September
30, 1994, securities available-for-sale had an historical cost of $552.1
million and $575.5 million, with an unrealized loss of approximately $10.9 and
$6.5 million, respectively. These unrealized losses decreased shareholders'
equity by $6.5 and $3.9 million, net of $4.4 and $2.6 million in deferred
taxes, respectively.
In order to improve its fully tax equivalent net interest income and to
hedge against higher income tax rates, One Valley increased its holdings of
tax-exempt securities that were offering attractive yields in 1994. As shown
on the consolidated average balance sheets (page 16), average tax-exempt
securities in the first nine months of 1995 increased by 5.0% over the average
during the first nine months of 1994. One Valley will continue to monitor its
investment opportunties and may purchase additional tax-exempt securities of
similar yield and quality.
Federal funds sold at September 30, 1995, were $500,000, down $24.4
million from year-end and $19.5 million below the level one year ago.
Fluctuations in federal funds sold are normal and largely due to planned
changes in the company's asset/liability structure in order to maximize the
return on investment in response to changes in the interest rate environment.
Liability Structure
Total deposits increased $114.3 million or 3.9% from the level at year-
end and increased $122.6 million or 4.2% since September 30, 1994. Non-
interest bearing deposits have increased by 3.2% from year-end, but have
decreased by 8.8% since September 30, 1994. Interest bearing deposits at
September 30, 1995, increased $102.2 million or 4.0% from year-end and $160.1
million or 6.4% from one year ago. The acquisition of Point Bancorp in the
first quarter of 1995 contributed $42.2 million to the increase in interest-
bearing deposits. Over the past few years growth in banking deposits has been
modest. Due to the low interest rate environment compared to the early 1990's,
deposit customers are shortening the maturities of their deposit reinvestments
and seeking higher yielding non-traditional investment alternatives. In an
effort to meet customer expectations for an integrated financial services
delivery system, One Valley operates a fully licensed NASD Broker Dealer
subsidiary and continues to expand other deposit product lines. In the fourth
quarter of 1994, One Valley introduced new checking products to attract new
customers and to provide investment alternatives for current customers.
Total short-term borrowings decreased $78.9 million or 21.0% from the
year-end level, and decreased $15.5 million or 5.0% from the level at September
30, 1994. Short-term borrowings, which consist of Federal funds purchased from
correspondent banks, repurchase agreements with large corporate and public
entities, and advances on credit lines available to the company can fluctuate
significantly depending upon loan demand and One Valley's asset/liablility
strategy.
Long-term borrowings declined $11.0 million or 56.6% since year-end 1994
and $16.0 million or 65.5% since September 30, 1994. The decline since year-
end 1994 was the result of $11.0 million in payments on long-term advances from
the FHLB. The $8.4 million of long-term borrowings at September 30, 1995,
principally consists of FHLB advances incurred prior to 1994 to fund
investments in mortgage backed securites. Approximately $5.5 million of these
advances mature in 1996 with the $2.9 million remainder maturing in periods
exceeding five years.
Acquisitions
On March 15, 1995, One Valley acquired all of the outstanding stock of
Point Bancorp, Inc., the parent company of a $57 million Federal Savings Bank
located in Point Pleasant, WV. Pursuant to the merger agreement, One Valley
exchanged 0.6 shares of its common stock and $7.10 for each share of Point
Bancorp common stock. A total of 411,602 shares were issued in this
transaction. The combination was accounted for under the purchase method of
accounting. Accordingly, consolidated results include the operations of Point
Bancorp only from the date of acquisition.
Capital Structure and Liquidity
One Valley's equity-to-asset ratio has increased since year-end. At
September 30, 1995, the ratio was 9.52% compared to 8.76% at December 31, 1994,
and 8.82% one year ago. This increase since year-end is primarily attributable
to the issuance of common stock in the acquisition of Point Bancorp in March,
1995, explained above.
One Valley's cash dividends, totaling $0.77 per share through the first
nine months of 1995, were up 11.6% over the $0.69 per share dividend during the
same period in 1994. One Valley's dividend policy coupled with the continued
growth in net income, demonstrates management's commitment to a strong equity-
to-asset ratio benefiting both the investor and the depositors of the local
community. One Valley's risk based capital ratio at September 30, 1995 was
15.81%, well above the 8.0% required, while its Tier I capital ratio was
14.56%. One Valley's strong capital position is demonstrated further by its
leverage ratio of 9.3% compared to regulatory guidance of 4.0% to 5.0%. The
capital ratios of the banking subsidiaries also remain strong and allow them to
effectively serve the communities in which they are located.
The capital positions of the banks, coupled with proper asset/liability
matching and the stable nature of the primarily consumer base of core deposits,
results in the maintenance of a strong liquidity position. The liquidity of
the parent company is dependent upon dividends from its banking subsidiaries
which, although restricted by banking regulations, are adequate to meet its
cash needs.
The Board of Directors has authorized management to repurchase shares of
One Valley Bancorp common stock in the open market. As of September 30, 1995,
One Valley held 860,200 shares of treasury stock, and is authorized to
repurchase up to 311,400 in additional treasury shares. The timing of
additional purchases, if any, will depend upon future market conditions.
Effects of Changing Prices
The results of operations and financial condition presented in this
report are based on historical cost, unadjusted for the effects of inflation.
Inflation affects One Valley in two ways. One is that inflation can result in
increased operating costs which must be absorbed or recovered through increased
prices for services. The second effect is on the purchasing power of the
corporation. Virtually all of a bank's assets and liabilities are monetary in
nature. Regardless of changes in prices, most assets and liabilities of the
banking subsidiaries will be converted into a fixed number of dollars. Non-
earning assets, such as premises and equipment, do not comprise a major portion
of One Valley's assets; therefore, most assets are subject to repricing on a
more frequent basis than in other industries. One Valley's ability to offset
the effects of inflation and potential reductions in future purchasing power
depends primarily on its ability to maintain capital levels by adjusting prices
for its services and to improve net interest income by maintaining an effective
asset/liability mix.
<PAGE>
<TABLE>
ONE VALLEY BANCORP OF WEST VIRGINIA, INC. AND SUBSIDIARIES
Analysis of Loan Losses and Non-Performing Assets
(unaudited in thousands)
<CAPTION>
For The Three Months For The Nine Months
Ended September 30 Ended September 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Allowance For Loan Losses
Balance, Beginning of Period $38,642 $37,572 $37,438 $36,484
Loan Losses 1,374 1,908 3,779 4,233
Loan Recoveries 398 801 1,546 1,822
------- ------- ------- -------
Net Charge-offs 976 1,107 2,233 2,411
Balance of Acquired Subsidiary 0 0 235 0
Provision For Loan Losses 1,762 1,185 3,988 3,577
------- ------- ------- -------
Balance, End of Period $39,428 $37,650 $39,428 $37,650
======= ======= ======= =======
Total Loans, End of Period $2,469,786 $2,317,995
Allowance For Loan Losses As a % of Total Loans 1.60 1.62
========== ==========
Non-Performing Assets at Quarter End
Non-Accrual Loans $7,325 $7,695
Foreclosed Properties 1,183 1,503
Restructured Loans 186 593
------- -------
Total Non-Performing Assets $8,694 $9,791
======= =======
Non-Performing Assets As a % of Total Loans 0.35 0.42
Loans Past Due Over 90 Days $4,449 $3,656
Loans Past Due Over 90 Days As a % of Total Loans 0.18 0.16
</TABLE>
<PAGE>
<TABLE>
ONE VALLEY BANCORP OF WEST VIRGINIA, INC. AND SUBSIDIARIES
Consolidated Average Balance Sheets
(unaudited in thousands)
<CAPTION>
Three Months Ended September 30 Nine Months Ended September 30
1995 1994 1995 1994
Amount Yield/Rate Amount Yield/Rate Amount Yield/Rate Amount Yield/Rate
(pct.) (pct.) (pct.) (pct.)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Assets
Loans
Taxable $2,415,281 9.08 $2,231,477 8.66 $2,381,271 9.06 $2,172,876 8.54
Tax-Exempt 33,338 11.15 35,011 10.51 34,241 11.19 34,102 10.42
---------- ---------- ---------- ----------
Total 2,448,619 9.11 2,266,488 8.69 2,415,512 9.09 2,206,978 8.57
Less: Allowance for Losses 38,848 37,982 38,470 37,347
---------- ---------- ---------- ----------
Net Loans 2,409,771 9.25 2,228,506 8.84 2,377,042 9.23 2,169,631 8.72
Securities
Taxable 807,878 6.34 870,093 5.60 804,169 6.21 890,871 5.51
Tax-Exempt 193,045 8.46 181,935 8.70 183,704 8.55 175,010 8.87
---------- ---------- ---------- ----------
Total 1,000,923 6.75 1,052,028 6.14 987,873 6.64 1,065,881 6.07
Federal Funds Sold & Other 34,419 5.66 29,299 3.45 36,894 5.85 32,179 3.11
---------- ---------- ---------- ----------
Total Earning Assets 3,445,113 8.49 3,309,833 7.93 3,401,809 8.44 3,267,691 7.80
Other Assets 274,153 264,338 267,981 261,921
---------- ---------- ---------- ----------
Total Assets $3,719,266 $3,574,171 $3,669,790 $3,529,612
========== ========== ========== ==========
Liabilities And Equity
Interest Bearing Liabilities
Deposits $2,646,008 4.11 $2,497,186 3.36 $2,619,924 4.03 $2,515,463 3.33
Short-term Borrowings 287,167 4.82 281,704 3.86 277,997 4.79 231,063 3.22
Long-term Borrowings 8,992 6.31 25,160 3.86 12,352 6.00 22,526 4.62
---------- ---------- ---------- ----------
Total Interest
Bearing Liabilities 2,942,167 4.19 2,804,050 3.42 2,910,273 4.11 2,769,052 3.33
Non-interest Bearing Deposits 390,120 423,161 382,813 417,408
Other Liabilities 32,814 29,272 32,832 28,508
---------- ---------- ---------- ----------
Total Liabilities 3,365,101 3,256,483 3,325,918 3,214,968
Shareholders' Equity 354,165 317,688 343,872 314,644
---------- ---------- ---------- ----------
Total Liabilities & Equity $3,719,266 $3,574,171 $3,669,790 $3,529,612
========== ========== ========== ==========
Interest Income To Earning Assets 8.49 7.93 8.44 7.80
Interest Expense To Earning Assets 3.58 2.90 3.52 2.82
------ ------ ------ ------
Net Interest Margin 4.91 5.03 4.92 4.98
====== ====== ====== ======
<FN> Note: Yields are computed on a fully taxable equivalent basis using the rate of 35%.
</TABLE>
<PAGE>
One Valley Bancorp of West Virginia, Inc.
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K
a.) Exhibits
3.(i) Bylaws of One Valley amended October 19, 1995.
11. Statement of Computation of Earnings per Share
27. Financial Data Schedule - electronic copy only.
b.) Reports on Form 8-K
None filed.
SIGNATURES
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.
One Valley Bancorp of West Virginia, Inc.
DATE November 13, 1995
BY /s/J. Holmes Morrison
J. Holmes Morrison
President and
Chief Executive Officer
BY /s/Laurance G. Jones
Laurance G. Jones
Executive Vice President &
Treasurer
<TABLE>
Exhibit 11
Statement Re: Computation of Earnings per Share
<CAPTION>
For The Three Months For The Nine Months
Ended September 30 Ended September 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
PRIMARY:
Average Shares Outstanding 17,159,000 17,105,000 17,198,000 17,173,000
Net effect of the assumed exercise
of stock options - based on the
treasury stock method 114,000 112,000 110,000 118,000
------------ ------------ ------------ ------------
Total 17,273,000 17,217,000 17,308,000 17,291,000
============ ============ ============ ============
Net Income $12,330,000 $11,799,000 $35,916,000 $34,679,000
Per Share Amount $0.71 $0.69 $2.08 $2.01
============ ============ ============ ============
FULLY DILUTED:
Average Shares Outstanding 17,159,000 17,105,000 17,198,000 17,173,000
Net effect of the assumed exercise
of stock options - based on the
treasury stock method 136,000 114,000 153,000 105,000
------------ ------------ ------------ ------------
Total 17,295,000 17,219,000 17,351,000 17,278,000
============ ============ ============ ============
Net Income $12,330,000 $11,799,000 $35,916,000 $34,679,000
Per Share Amount $0.71 $0.69 $2.07 $2.01
============ ============ ============ ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheets and statements of income of One Valley Bancorp as
well as supplemental schedules of the analysis of loan losses and non-performing
assets and the consolidated average balance sheets and is qualified in its
entirety by reference to such financial statements and supplemental schedules.
</LEGEND>
<CIK> 0000351616
<NAME> ONE VALLEY BANCORP
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 142951
<INT-BEARING-DEPOSITS> 5194
<FED-FUNDS-SOLD> 500
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 549106
<INVESTMENTS-CARRYING> 464453
<INVESTMENTS-MARKET> 466413
<LOANS> 2469786
<ALLOWANCE> 39428
<TOTAL-ASSETS> 3738051
<DEPOSITS> 3040798
<SHORT-TERM> 296449
<LIABILITIES-OTHER> 36580
<LONG-TERM> 8434
<COMMON> 179942
0
0
<OTHER-SE> 175848
<TOTAL-LIABILITIES-AND-EQUITY> 3738051
<INTEREST-LOAN> 163148
<INTEREST-INVEST> 45099
<INTEREST-OTHER> 1614
<INTEREST-TOTAL> 209861
<INTEREST-DEPOSIT> 78958
<INTEREST-EXPENSE> 89474
<INTEREST-INCOME-NET> 120387
<LOAN-LOSSES> 3988
<SECURITIES-GAINS> (66)
<EXPENSE-OTHER> 91877
<INCOME-PRETAX> 53584
<INCOME-PRE-EXTRAORDINARY> 53584
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35916
<EPS-PRIMARY> 2.09
<EPS-DILUTED> 2.09
<YIELD-ACTUAL> 4.92
<LOANS-NON> 7325
<LOANS-PAST> 4449
<LOANS-TROUBLED> 186
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 37438
<CHARGE-OFFS> 3779
<RECOVERIES> 1546
<ALLOWANCE-CLOSE> 39428
<ALLOWANCE-DOMESTIC> 39428
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
(As Amended 10/19/95)
BYLAWS
OF
ONE VALLEY BANCORP OF WEST VIRGINIA, INC.
ARTICLE I. OFFICES
The principal offices of the Corporation shall be located in the City of
Charleston, County of Kanawha, State of West Virginia. The Corporation may
have such other offices, either within or without the State of West Virginia,
as the Board of Directors may designate or as the business of the Corporation
may require from time to time.
ARTICLE II. SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the shareholders
shall be held on the fourth Tuesday in the month of April in each year, at
the hour of 12:00 noon, local time, or at such other time on such other day
within such month as shall be fixed by the Board of Directors. If the day
fixed for the annual meeting shall be a legal holiday in the State of the
principal office of the Corporation, such meeting shall be held on the next
succeeding business day. At an annual meeting of the shareholders, only such
business shall be conducted as shall have been properly brought before the
meeting. To be properly brought before an annual meeting business must be
(a) specified in the notice of meeting (or any supplement thereto) given by
or at the direction of the Board of Directors, (b) otherwise properly brought
before the meeting by or at the direction of the Board of Directors, or (c)
otherwise properly brought before the meeting by a shareholder. For business
to be properly brought before an annual meeting by a shareholder, the
shareholder must have given timely notice thereof in writing to the Secretary
of the Corporation. To be timely, a shareholder's notice must be delivered
to or mailed and received at the principal executive offices of the
Corporation, not less than 40 days prior to the meeting; provided, however,
that in the event that less than 50 days' notice or prior public disclosure
of the date of the meeting is given or made to shareholders, notice by the
shareholder to be timely must be so received not later than the close of
business on the 8th day following the day on which such notice of the date of
the annual meeting was mailed or such public disclosure was made. A
shareholder's notice to the Secretary shall set forth as to each matter the
shareholder proposes to bring before the annual meeting (a) a brief
description of the business desired to be brought before the annual meeting
and the reasons for conducting such business at the annual meeting, (b) the
name and address, as they appear on the Corporation's books, of the
shareholder proposing such business, (c) the class and number of shares of
the Corporation which are beneficially owned by the shareholder, and (d) any
material interest of the shareholder in such business. Notwithstanding
anything in the Bylaws to the contrary, no business shall be conducted at an
annual meeting except in accordance with the procedures set forth in this
Section 1. The Chairman of an annual meeting shall, if the facts warrant,
determine and declare to the meeting that business was not properly brought
before the meeting and in accordance with the provisions of this Section 1,
and if he should so determine, he shall so declare to the meeting and any
such business not properly brought before the meeting shall not be
transacted.
Section 2. Special Meetings. Special meetings of the shareholders, for
any purpose or purposes, may be called by the Chairman of Board, if any,
President, Secretary, or by the Board of Directors, and shall be called by
the President at the request of the holders of not less than one-tenth of all
outstanding shares of the Corporation entitled to vote at the meeting.
Section 3. Place of Meeting. The Board of Directors may designate any
place, either within or without the State of West Virginia, as the place of
meeting for any annual meeting or for any special meeting called by the Board
of Directors. If no designation is made, or if a special meeting be
otherwise called, the place of meeting shall be the principal office of the
Corporation.
Section 4. Notice of Meeting. Written notice stating the place, day
and hour of the meeting and, the purpose or purposes for which the meeting is
called, shall be delivered not less than ten nor more than fifty days before
the date of the meeting, either personally or by mail, by or at the direction
of the Chairman of the Board, President, Secretary or the officer of other
persons calling the meeting, to each shareholder of record entitled to vote
at such meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail, addressed to the shareholder at his
address as it appears on the stock transfer books of the Corporation, with
postage thereon prepaid.
Section 5. Closing of Transfer Books or Fixing of Record Date. For the
purpose of determining shareholders entitled to notice of or vote at any
meeting of shareholders or any adjournment thereof, or shareholders entitled
to receive payment of any dividend, or in order to make a determination of
shareholders for any other proper purpose, the Board of Directors of the
Corporation may provide that the stock transfer books shall be closed for a
stated period but not to exceed, in any case, fifty days. If the stock
transfer books shall be closed for the purpose of determining shareholders
entitled to notice of or to vote at a meeting of shareholders, such books
shall be closed for at least ten days immediately preceding such meeting. In
lieu of closing the stock transfer books, the Board of Directors may fix in
advance a date as the record date for any such determination of shareholders,
such date in any case to be not more than fifty days and, in case of a
meeting of shareholders, not less than ten days prior to the date on which
the particular action, requiring such determination of shareholders, is to be
taken. If the stock transfer books are not closed and no record date is
fixed for the determination of shareholders entitled to notice of or to vote
at a meeting of shareholders, or shareholders entitled to received payment of
a dividend, the date on which notice of the meeting is mailed or the date on
which the resolution of the Board of Directors declaring such dividend is
adopted, as the case may be, shall be the record date for such determination
of shareholders. When a determination of shareholders entitled to vote at
any meeting of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof.
Section 6. Voting Record. The officer or agent having charge of the
stock transfer books for shares of the Corporation shall make a complete
record of the shareholders entitled to vote at each meeting of shareholders
or any adjournment thereof, arranged in alphabetical order, with the address
of and the number of shares held by each. Such record shall be produced and
kept open at the time and place of the meeting and shall be subject to the
inspection of any shareholder during the whole time of the meeting for the
purposes thereof.
Section 7. Quorum. A majority of the outstanding shares of the
Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. If less than a majority of
the outstanding shares are represented at a meeting, a majority of the shares
so represented may adjourn the meeting from time to time without further
notice. At such adjourned meeting at which a quorum shall be present or
represented, any business may be transacted which might have been transacted
at the meeting as originally noticed. The shareholders present at a duly
organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough shareholders to leave less than a
quorum.
Section 8. Proxies. At all meetings of shareholders, a shareholder may
vote in person or by proxy executed in writing by the shareholder or by his
duly authorized attorney-in-fact. Such proxy shall be filed with the
Secretary of the Corporation before or at the time of the meeting. No proxy
shall be valid after eleven months from the date of its execution, unless
otherwise provided in the proxy.
Section 9. Voting of Shares. Subject to the provisions of Section 12
of this Article II, each outstanding share entitled to vote shall be entitled
to one vote upon each matter submitted to a vote at a meeting of
shareholders.
Section 10. Voting of Shares by Certain Holders. Shares standing in
the name of another corporation may be voted by such officer, agent or proxy
as the bylaws of such corporation may prescribe, or, in the absence of such
provision, as the Board of Directors of such other corporation may determine.
Shares held by an administrator, executor, guardian, committee, curator,
or conservator may be voted by him, either in person or by proxy, without a
transfer of such shares into his name. Shares standing in the name of a
trustee may be voted by him, either in person or by proxy, but no trustee
shall be entitled to vote shares held by him without a transfer of such
shares into his name.
Shares standing in the name of a receiver may be voted by such receiver,
and shares held by or under the control of a receiver may be voted by such
receiver without the transfer thereof into his name if authority to do so be
contained in an appropriate order of the court by which such receiver was
appointed.
A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee,
and thereafter the pledgee shall be entitled to vote the shares so
transferred.
Neither treasury shares of its own stock held by the Corporation nor
shares held by another corporation if a majority of the shares entitled to
vote for the election of directors of such other corporation are held by the
Corporation, shall be voted at any meeting or counted in determining the
total number of outstanding shares at any given time for purposes of any
meeting.
Section 11. Informal Action by Shareholders. Any action required or
permitted to be taken at a meeting of the shareholders may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the shareholders entitled to vote with respect to the
subject matter thereof.
Section 12. Cumulative Voting. At each election for directors every
shareholder entitled to vote at such election shall have the right to vote,
in person or by proxy, the number of shares owned by him for as many persons
as there are directors to be elected and for whose election he has a right to
vote, or to cumulate his votes by giving one candidate as many votes as the
number of such directors multiplied by the number of his shares shall equal,
or by distributing such votes on the same principle among any number of such
candidates.
Section 13. Nominations for election to the Board of Directors. The
nominations for election to the Board of Directors other than those made by
or on behalf of the existing management of the Corporation, shall be made by
a shareholder in writing delivered or mailed to the President not less than
14 days nor more than 50 days prior to the meeting called for the election of
directors; provided, however, that if less than 21 days' notice of the
meeting is given to shareholders, the nominations shall be mailed or
delivered to the President not later than the close of business on the 7th
day following the day on which the notice of meeting was mailed. the notice
of nomination shall include to the extent known: (a) name and address of
proposed nominee(s); (b) principal occupation of nominee(s); (c) total shares
to be voted for each nominee; (d) name and address of notifying shareholder;
and (e) number of shares owned by notifying shareholder. Nominations not
made in accordance with these requirements may be disregarded by the Chairman
of the meeting and in such case the votes cast for each such nominee shall
likewise be disregarded.
Section 14. Rules of Conduct at the Annual Meeting. The chairman of
the annual meeting of shareholders shall have the right and authority to
prescribe such rules, regulations and procedures and to do all such acts and
things as are necessary or desirable for the proper conduct of the meeting,
including, without limitation: maintenance of order; safety; limitations on
the time allotted to questions or comments on the affairs of the corporation;
ruling motions or comments out of order (i) as a matter of law or (ii) as
inappropriate as a personal grievance, in poor taste, unworkable, moot,
repetitious of another proposal on the agenda, or otherwise; restrictions on
entry to the meeting after the time prescribed for the commencement thereof;
and the opening and closing of the voting polls.
ARTICLE III. BOARD OF DIRECTORS
Section 1. General Powers. The business and affairs of the Corporation
shall be managed by its Board of Directors.
Section 2. Number, election and terms; nominations. Except as
otherwise fixed by or pursuant to the provisions of Article VI of the
Articles of Incorporation relating to the rights of the holders of any class
or series of stock having a preference over the Common Stock as to dividends
or upon liquidation to elect additional directors under specified
circumstances, the number of the directors of the Corporation shall be fixed
from time to time by resolution of the Board of Directors but shall not be
less than six nor more than thirty-three. The directors, other than those
who may be elected by the holders of any class or series of stock having a
preference over the Common Stock as to dividends or upon liquidation, shall
be classified, with respect to the time for which they severally hold office,
into three classes, as nearly equal in number as possible, as determined by
the board of Directors of the Corporation, one class to be originally elected
for a term expiring at the annual meeting of stockholders to be held in 1987,
another class to be originally elected for a term expiring at the annual
meeting of shareholders to be held in 1988, and another class to be
originally elected for a term expiring at the annual meeting of shareholders
to be held in 1989, with each class to hold office until its successor is
elected and qualified. At each annual meeting of the shareholders of the
Corporation, the successors of the class of directors whose term expires at
that meeting shall be elected to hold office for a term expiring at the
annual meeting of shareholders held in the third year following the year of
their election. Nominations for the election of directors shall be given in
the manner provided in Article II, Section 13, of these bylaws. Directors
need not be residents of the State of West Virginia, but shall hold not less
than one hundred shares of the capital stock of the Corporation in order to
be eligible to serve as a director of the Corporation.
Section 3. Regular Meetings. A regular meeting of the Board of
Directors shall be held without notice other than this bylaw, immediately
after, and at the same place as, the annual meeting of shareholders. The
Board of Directors may provide, by resolution, the time and place, either
within or without the State of West Virginia, for the holding of additional
regular meetings without other notice than such resolution.
Section 4. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the Chairman of the Board, if
any, the President or the majority of the directors. The person or persons
authorized to call special meetings of the Board of Directors may fix any
place, either within or without the State of West Virginia, as the place for
holding any special meeting of the Board of Directors called by them.
Section 5. Notice. Notice of any special meeting shall be given at
least three days previously thereto by written notice delivered personally or
mailed to each director at his business address, or by telegram. If mailed
at least five days prior to the date of meeting, such notice shall be deemed
to be delivered when deposited in the United States mail, so addressed, with
postage thereon prepaid. If notice be given by telegram, such notice shall
be deemed to be delivered when the telegram is delivered to the telegraph
company. Any director may waive notice of any meeting. The attendance of a
director at a meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting for the express purpose of
objecting to the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be transacted at, nor
the purpose of, any regular or special meeting of the Board of Directors need
be specified in the notice or waiver of notice of such meeting, except as
otherwise provided by statute.
Section 6. Quorum. A majority of the number of directors fixed by
Section 2 of this Article III shall constitute a quorum for the transaction
of business at any meeting of the Board of Directors, but if less than such
majority is present at the meeting a majority of the directors present may
adjourn the meeting from time to time without further notice.
Section 7. Manner of Acting. The act of the majority of the directors
present at a meeting at which a quorum is present shall be the act of the
Board of Directors.
Section 8. Action Without a Meeting. Any action required or permitted
to be taken by the Board of Directors at a meeting may be taken without a
meeting if a consent in writing, setting forth the action so taken, shall be
signed by all the directors.
Section 9. Newly created directorships and vacancies. Except as
otherwise provided for or fixed by or pursuant to the provisions of Article
VI of the Articles of Incorporation relating to the rights of the holders of
any class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation to elect directors under specified
circumstances, newly created directorships resulting from any increase in the
number of directors and any vacancies on the Board of Directors resulting
from death, resignation, disqualification, removal or other cause shall be
filled by the affirmative vote of a majority of the remaining Directors then
in office, even though less than a quorum of the Board of Directors. Any
director elected in accordance with the preceding sentence to fill a vacancy
resulting from the death, resignation, disqualification, removal or other
cause shall hold office for the remainder of the full term of the class of
directors in which the vacancy occurred and until such director's successor
shall have been elected and qualified, and any director elected in accordance
with the preceding sentence by reason of an increase in the number of
directors shall hold office only until the next election of directors by
shareholders and until his successor shall have been elected and qualified.
No decrease in the number of directors constituting the Board of Directors
shall shorten the term of any incumbent director.
Section 10. Compensation. By resolution of the Board of Directors,
each director may be paid his expenses, if any, of attendance at each meeting
of the Board of Directors, or committee thereof, and may be paid a stated
salary as director or a fixed sum for attendance at each meeting of the Board
of Directors or committee thereof or both. No such payment shall preclude
any director from serving the Corporation in any other capacity and receiving
compensation therefor.
Section 11. Presumption of Assent. A director of the Corporation who
is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action
taken unless his dissent shall be entered in the minutes of the meeting or
unless he shall file his written dissent to such action with the person
acting as the Secretary of the meeting before the adjournment thereof or
shall forward such dissent by registered mail to the Secretary of the
Corporation immediately after the adjournment of the meeting. Such right to
dissent shall not apply to a director who voted in favor of such action.
Section 12. Committees.
(a) Appointment. The Board of Directors, by resolution adopted by a
majority of the full board, may establish an Executive Committee and such
other standing or special committees of the board as it may deem advisable,
each of which shall consist of two or more members of the Board of Directors.
The designation of a committee and the delegation thereto of authority shall
not operate to relieve the Board of Directors, or any member thereof, of any
responsibility imposed by law.
(b) Authority. The Executive committee, when the Board of Directors
is not in session shall have and may exercise all of the authority of the
Board of Directors except to the extent, if any, that such authority shall be
limited by the resolution appointing the Executive Committee and except also
that the Executive Committee shall not have the authority of the Board of
directors in reference to amending the Articles of Incorporation, adopting a
plan of merger or consolidation, recommending to the shareholders the sale,
lease or other disposition of all or substantially all of the property and
assets of the Corporation otherwise than in the usual and regular course of
its business, recommending to the shareholders a voluntary dissolution of the
Corporation or a revocation thereof, or amending the bylaws of the
Corporation. The authority of other committees of the board shall be set
forth in the resolutions, as amended from time to time, establishing the
same.
(c) Tenure and Qualifications. Committees of the board shall
consist only of members of the Board of Directors. Each member of the
Executive Committee shall hold office until the next regular annual meeting
of the Board of Directors following his designation and until his successor
is designated as a member of the Executive Committee and is elected and
qualified. The tenure of members of other committees of the board shall be
set forth in the resolutions, as amended from time to time, establishing the
same.
(d) Meetings. Regular meetings of the committees of the board may
be held without notice at such times and places as each committee may fix
from time to time by resolution. Special meetings of the committee may be
called by any member thereof upon not less than the one day's notice stating
the place, date and hour of the meeting, which notice may be written or oral,
and if mailed at least five days prior to the date of the meeting, shall be
deemed to be delivered when deposited in the United States mail addressed to
the member of the committee at his business address. Any member of a
committee may waive notice of any meeting and no notice of any meeting need
be given to any member thereof who attends in person. The notice of a
meeting of a committee need not state the business proposed to be transacted
at the meeting.
(e) Quorum. A majority of the members of a committee shall
constitute a quorum for the transaction of business at any meeting thereof,
and action of the committee must be authorized by the affirmative vote of a
majority of the members present at a meeting at which a quorum is present.
(f) Action Without a Meeting. Any action required or permitted to
be taken by a committee at a meeting may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be signed by all
of the members of the committee.
(g) Vacancies. Any vacancy in a committee may be filled by a
resolution adopted by a majority of the full Board of Directors.
(h) Resignations and Removal. Any member of a committee may be
removed at any time with or without cause by resolution adopted by a majority
of the full Board of Directors. Any member of a committee may resign from
the committee at any time by giving written notice to the President or
Secretary of the Corporation, and unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make it effective.
(i) Procedure. A committee shall elect a presiding officer from its
members and may fix its own rules of procedure which shall not be
inconsistent with these bylaws. It shall keep regular minutes of its
proceedings and report the same to the Board of Directors for its information
at the meeting thereof held next after the proceedings shall have been taken.
Section 13. Removal. Subject to the rights of any class or series of
stock having a preference over the Common Stock as to dividends or upon
liquidation to elect directors under the specified circumstances, any
director may be removed from office, with or without cause and only by the
affirmative vote of the holders of 80% of the combined voting power of the
then outstanding shares of stock entitled to vote generally in the election
of directors, voting together as a single class.
Section 14. Participation in Meetings by Means of Conference Telephone
or Similar Instrument. Any or all directors may participate in a meeting of
the Board of Directors or in a meeting of a committee of the Board of
Directors by means of a conference telephone or any similar electronic
communications equipment by which all persons participating in the meeting
can hear each other.
Section 15. Considerations in the Event of Merger, Consolidation, etc.
In acting upon any proposed merger, consolidation, sale or other disposition
of all or substantially all the assets of the Corporation, or any proposal by
any person or group to acquire a controlling interest in the Corporation,
whether by tender or exchange offer or otherwise, or any similar proposal
regarding a potential change in control of the Corporation, the Board of
Directors shall take into account the effects that the Corporation's actions
and any such transaction may have in the short-term and in the long-term upon
the following: (1) the prospects for potential growth, productivity and
profitability of the Corporation; (2) maximizing shareholder value; (3) the
Corporation's ability to offer a complete range of services and products to
its customers; (4) the Corporation's creditors; (5) the development and
general welfare of the Corporation's current employees; (6) the Corporation's
retired employees and other beneficiaries receiving or entitled to receive
retirement, welfare or similar benefits from or pursuant to any plan
sponsored, or agreement entered into, by the Corporation; and (7) the ability
of the Corporation to provide, as a going concern, services, employment
opportunities and benefits, and otherwise to contribute to the communities in
which it does business.
ARTICLE IV. OFFICERS
Section 1. Number. The officers of the Corporation shall be a
President, one or more Vice Presidents (the number thereof to be determined
by the Board of Directors), a Secretary, and a Treasurer, each of whom shall
be elected by the Board of Directors. A Chairman of the board of Directors
and such other officers and assistant officers as may be deemed necessary may
be elected or appointed by the Board of Directors. Any two or more offices
may be held by the same person, except the offices of President and
Secretary. The President and the Chairman of the Board, if any, shall be
elected from the membership of the Board of Directors.
Section 2. Election and Term of Office. The officers of the
Corporation to be elected by the Board of Directors shall be elected annually
by the Board of Directors at the first meeting of the Board of Directors held
after each annual meeting of the shareholders. If the election of officers
shall not be held at such meeting, such election shall be held as soon
thereafter as conveniently may be. Each officer shall hold office until his
successor shall have been duly elected and shall have qualified or until his
death or until he shall resign or shall have been removed in the manner
hereinafter provided.
Section 3. Removal. Any officer or agent may be removed by the Board
of Directors whenever in its judgment the best interests of the Corporation
will be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed. Election or appointment
of an officer or agent shall not of itself create contract rights.
Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal, disqualification or otherwise, may be filled by the
Board of Directors for the unexpired portion of the term.
Section 5. Chairman of the Board and President. The Chairman of the
Board or the President, as the Board of Directors may from time to time
determine, shall be the principal executive officer of the Corporation. If a
Chairman of the Board is not elected or appointed, the President shall be
chief executive officer and shall act as chairman of all meetings of the
Board of Directors and as chairman of all meetings of the Executive
Committee. The principal executive officer of the Corporation shall in
general supervise and control all of the business and affairs of the
Corporation, subject to the control of the Board of Directors. He shall,
when present, preside at all meetings of the shareholders. Whether the
Chairman of the Board or the President be designated as the principal
executive officer of the Corporation the other shall, in the absence or
incapacity of the principal executive officer or by his authority may,
exercise any of the powers of the principal executive officer. The Chairman
of the Board or the President may sign deeds, mortgages, bonds, contracts, or
other instruments which the Board of Directors has authorized to be executed,
except in cases where the signing and executing thereof shall be expressly
delegated by the Board or by these bylaws to some other officer or agent of
the Corporation, or shall be required by law to be otherwise signed or
executed. The Chairman of the board and the President shall each, in
general, perform all duties incident to their respective offices and shall
perform such other duties as may be prescribed by the Board of Directors from
time to time.
Section 6. The Vice Presidents. In the absence of the Chairman of the
Board and President or in the event of their death, inability or refusal to
act, the Vice President (or in the event there be more than one Vice
President, the Vice Presidents in the order designated at the time of their
election, or in the absence of any designation, then in the order of their
election) shall perform the duties of the Chairman of the Board and
President, and when so acting, shall have all the powers of and be subject to
all the restrictions upon the Chairman of the Board and President. Any Vice
President may sign, with the Secretary or an Assistant Secretary,
certificates for shares of the Corporation; and shall perform such other
duties as from time to time may be assigned to him by the principal executive
officer of the Corporation, the bylaws or the Board of Directors.
Section 7. The Secretary. The Secretary shall: (a) keep the minutes
of the proceedings of the shareholders and of the Board of Directors in one
or more books provided for that purpose; (b) see that all notices are duly
given in accordance with the provisions of these bylaws or as required by
law; (c) be custodian of the corporate records and of the seal of the
Corporation and see that the seal of the Corporation is affixed to all
documents the execution of which on behalf of the Corporation under its seal
is duly authorized; (d) keep a register of the post officer address of each
shareholder which shall be furnished to the Secretary by such shareholder;
(e) sign with the President, or a Vice President, certificates for shares of
the Corporation, the issuance of which shall have been authorized by
resolution of the Board of Directors; (f) have general charge of the stock
transfer books of the Corporation; and (g) in general perform all duties
incident to the office of Secretary and such other duties as from time to
time may be assigned to him by the principal executive officer of the
Corporation, the bylaws or by the Board of Directors.
Section 8. The Treasurer. The Treasurer shall: (a) have charge and
custody of and be responsible for all funds and securities of the
Corporation; (b) receive and give receipts for moneys due and payable to the
Corporation from any source whatsoever, and deposit all such moneys in the
name of the Corporation in such banks, trust companies or other depositaries
as shall be selected in accordance with the provisions of Article V of these
bylaws; and (c) in general perform all of the duties incident to the office
of Treasurer and such other duties as from time to time may be assigned to
him by the principal executive officer of the Corporation, the bylaws or by
the Board of Directors. If required by the Board of Directors, the Treasurer
shall give a bond for the faithful discharge of his duties in such sum and
with such surety or sureties as the Board of Directors shall determine.
Section 9. Assistant Secretaries and Assistant Treasurers. The
Assistant Secretaries, when authorized by the Board of Directors, may sign
with the President or a Vice President certificates for shares of the
Corporation the issuance of which shall have been authorized by a resolution
of the Board of Directors. The Assistant Treasurers shall respectively, if
required by the Board of Directors, give bonds for the faithful discharge of
their duties in such sums and with such sureties as the Board of Directors
shall determine. The Assistant Secretaries and Assistant Treasurers, in
general, shall perform such duties as shall be assigned to them by the
Secretary orthe Treasurer, respectively, or by the principal executive
officer of the Corporation, the bylaws or by the Board of Directors.
Section 10. Officers' Salaries. The salaries of the officers shall be
fixed from time to time by the Board of Directors and no officer shall be
prevented from receiving such salary by reason of the fact that he is also a
director of the Corporation.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS
Section 1. Contracts. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into any contract or execute and
deliver any instrument in the name of and on behalf of the Corporation, and
such authority may be general or confined to specific instances.
Section 2. Loans. No loans shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its name
unless authorized by a resolution of the Board of Directors. Such authority
may be general or confined to specific instances. The Board of Directors may
encumber and mortgage real estate and pledge, encumber and mortgage stocks,
bonds and other securities and other personal property of all types, tangible
and intangible, and convey any such property in trust to secure the payment
of corporate obligations.
Section 3. Checks, Drafts, etc.. All checks, drafts and other orders
for the payment of money, notes or other evidences of indebtedness issued in
the name of the Corporation shall be signed by such officer or officers,
agent or agents of the Corporation and in such manner as shall from time to
time be determined by resolution of the Board of Directors.
Section 4. Deposits. All funds of the Corporation not otherwise
employed shall be deposited from time to time to the credit of the
Corporation in such banks, trust companies or other depositories as the Board
of Directors may select.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates for Shares. Certificates representing shares
of the Corporation shall be in such form as shall be determined by the Board
of Directors. Such certificates shall be signed by the President or a Vice
President and by the Secretary or an Assistant Secretary and sealed with the
Corporate Seal or a facsimile thereof. The signatures of such officers upon
a certificate may be facsimiles if the certificate is manually signed on
behalf of a transfer agent or a registrar, other than the Corporation itself
or one of its employees. Each certificate for shares shall be consecutively
numbered or otherwise identified. The name and address of the person to whom
the shares represented thereby are issued, with the number of shares and date
of issue, shall be entered on the stock transfer books of the Corporation.
All certificates surrendered to the Corporation for transfer shall be
canceled and no new certificate shall be issued until the former certificate
for a like number of shares shall have been surrendered and canceled, except
that in case of a lost, destroyed or mutilated certificate a new one may be
issued therefor upon such terms and indemnity to the Corporation as the Board
of Directors may prescribe.
Section 2. Transfer of Shares. Transfer of shares of the Corporation
shall be made only on the stock transfer books of the Corporation by the
holder of record thereof or by his legal representative, who shall furnish
proper evidence of authority to transfer, or by his attorney thereunto
authorized by power of attorney duly executed and filed with the Secretary of
the Corporation, and on surrender for cancellation of the certificate for
such shares. The person in whose name shares stand on the books of the
Corporation shall be deemed by the Corporation to be the owner thereof for
all purposes.
Section 3. Lost Certificates. Any person claiming a certificate of
shares to be lost or destroyed shall make an affidavit or affirmation of that
fact, and if requested do so by the Board of Directors of the Corporation
shall advertise such fact in such manner as the Board of Directors may
require, and shall give the Corporation a bond of indemnity in such sum as
the Board of Directors may direct, but not less than double the value of
shares represented by such certificate, in form satisfactory to the Board of
Directors and with or without sureties as the Board of Directors may
prescribe; whereupon the President and the Secretary may cause to be issued a
new certificate of the same tenor and for the same number of shares as the
one alleged to have been lost or destroyed, but always subject to the
approval of the Board of Directors.
Section 4. Stock Transfer Books. The stock transfer books of the
Corporation shall be kept in the principal office of the Corporation and
shares shall be transferred under such regulations as may be prescribed by
the Board of Directors.
ARTICLE VII. FISCAL YEAR
The fiscal year of the Corporation may be fixed and may be changed from
time to time by resolution of the Board of Directors. Until the Board of
Directors has acted to fix such fiscal year, the fiscal year of the
Corporation shall begin on the first day of January and end on the thirty-
first day of December in each year.
ARTICLE VIII. DIVIDENDS
The Board of Directors may, from time to time, declare and the
Corporation may pay dividends on its outstanding shares in the manner and
upon the terms and conditions provided by law and its Articles of
Incorporation.
ARTICLE IX. CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be
circular in form and shall have inscribed thereon the name of the Corporation
and the state of incorporation and the words "Corporate Seal".
ARTICLE X. WAIVER OF NOTICE
Whenever any notice is required to be given to any shareholder or
director of the Corporation under the provisions of these bylaws or under the
provisions of the Articles of Incorporation or by law, a waiver thereof in
writing signed by the person or persons entitled to such notice, whether
before or after the time stated therein, shall be deemed equivalent to the
giving of such notice.
ARTICLE XI. AMENDMENTS
Subject to the provisions of the Articles of Incorporation, these Bylaws
may be altered, amended or repealed at any regular meeting of the
shareholders (or at any special meeting thereof duly called for that purpose)
by a majority vote of the shares represented and entitled to vote at such
meeting; provided that in the notice of such meeting notice of such purpose
shall be given. Subject to the laws of the State of West Virginia, the
Articles of Incorporation and these Bylaws, the Board of Directors may be
majority vote of those present at any meeting at which a quorum is present
amend these Bylaws, or enact such other bylaws as in their judgment may be
advisable for the regulation of the conduct of the affairs of the
Corporation; provided, however, that, without the affirmative vote of two-
thirds of all members
of the Board, the Board may not amend the Bylaws to (i) change the principal
office of the Corporation, (ii) change the number of directors, (iii) change
the number of directors on the Executive Committee, or (iv) make a
substantial change in the duties of the Chairman of the Board and the
President.
ARTICLE XII. VOTING SHARES OF OTHER CORPORATIONS
Unless otherwise ordered by the Board of Directors, shares in other
corporations held by this Corporation may be voted by the Chairman of the
Board or the President of this Corporation.
