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 March 31, 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 March 31, 1995 was:
Common Stock, $10.00 par value -- 17,409,250 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 three month period ended March 31, 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>
March 31 December 31 March 31
1995 1994 1994
<S> <C> <C> <C>
Assets
Cash and Due From Banks $136,845 $178,900 $133,732
Interest Bearing Deposits With Other Banks 12,884 4,297 3,880
Federal Funds Sold 15,850 24,875 38,359
---------- ---------- ----------
Cash and Cash Equivalents 165,579 208,072 175,971
Securities
Available-for-Sale, at fair value 553,018 541,201 589,258
Held-to-Maturity (Estimated Fair Value,
March 31, 1995 - $432,575; December 31, 1994 - $422,381;
March 31, 1994 - $457,032) 439,339 445,158 459,916
Loans
Total Loans 2,412,895 2,372,957 2,173,686
Less: Allowance For Loan Losses 38,412 37,438 37,111
---------- ---------- ----------
Net Loans 2,374,483 2,335,519 2,136,575
Bank Premises & Equipment - Net 82,741 82,853 82,317
Other Assets 64,112 60,438 56,274
---------- ---------- ----------
Total Assets $3,679,272 $3,673,241 $3,500,311
========== ========== ==========
Liabilities and Shareholders' Equity
Deposits
Non-interest Bearing $391,908 $378,512 $434,096
Interest Bearing 2,645,060 2,547,967 2,532,265
---------- ---------- ----------
Total Deposits 3,036,968 2,926,479 2,966,361
Short-term Borrowings
Federal Funds Purchased 11,055 53,145 9,306
Repurchase Agreements and Other Borrowings 234,054 322,194 163,206
---------- ---------- ----------
Total Short-term Borrowings 245,109 375,339 172,512
Long-term Borrowings 14,445 19,450 18,883
Other Liabilities 37,902 30,106 30,351
---------- ---------- ----------
Total Liabilities 3,334,424 3,351,374 3,188,107
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 17,959,750 shares at March 31, 1995;
17,538,368 shares at December 31, 1994;
17,525,688 shares at March 31, 1994; 179,598 175,384 175,257
Capital Surplus 34,107 25,954 25,880
Retained Earnings 144,351 137,437 114,350
Unrealized (Losses) on Securities Available-for-Sale,
net of deferred taxes; (2,337) (6,535) (154)
Treasury Stock - 550,500 shares at March 31, 1995,
533,500 shares at December 31, 1994;
270,000 shares at March 31, 1994; at cost (10,871) (10,373) (3,129)
---------- ---------- ----------
Total Shareholders' Equity 344,848 321,867 312,204
---------- ---------- ----------
Total Liabilities and Shareholders' Equity $3,679,272 $3,673,241 $3,500,311
========== ========== ==========
</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
Ended March 31
1995 1994
<S> <C> <C>
Interest Income
Interest and Fees on Loans
Taxable $52,030 $44,371
Tax-Exempt 628 572
-------- --------
Total 52,658 44,943
Interest on Investment Securities
Taxable 11,939 12,683
Tax-Exempt 2,504 2,156
-------- --------
Total 14,443 14,839
Other Interest Income 200 344
-------- --------
Total Interest Income 67,301 60,126
Interest Expense
Deposits 24,491 20,717
Short-term Borrowings 3,276 1,389
Long-term Borrowings 228 245
-------- --------
Total Interest Expense 27,995 22,351
-------- --------
Net Interest Income 39,306 37,775
Provision For Loan Losses 1,113 1,179
-------- --------
Net Interest Income
After Provision For Loan Losses 38,193 36,596
Other Income
Trust Department Income 1,904 2,012
Service Charges on Deposit Accounts 3,166 2,609
Real Estate Loan Processing & Servicing Fees 1,115 1,418
Other Service Charges and Fees 1,085 1,150
Other Operating Income 1,787 1,710
Securities Transactions 7 197
-------- --------
Total Other Income 9,064 9,096
Other Expenses
Salaries and Employee Benefits 16,443 15,928
Occupancy Expense - Net 1,528 1,561
Equipment Expenses 2,144 2,058
Federal Deposit Insurance 1,658 1,661
Outside Data Processing 1,069 908
Other Operating Expenses 7,783 7,488
-------- --------
Total Other Expenses 30,625 29,604
-------- --------
Income Before Taxes 16,632 16,088
Applicable Income Taxes 5,344 5,257
-------- --------
Net Income $11,288 $10,831
======== ========
Net Income Per Common Share $0.66 $0.63
======== ========
Based on Average Shares Outstanding of 17,079 17,250
</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) ($6,535)
Stock Issued for Acquisition 4,116 8,130 0 0 0
Three Months Ended March 31, 1995
Net Income 0 0 11,288 0 0
Cash Dividends ($.25 per share) 0 0 (4,374) 0 0
Change in Fair Value of Securities
Available for Sale, net of deferred taxes 0 0 0 0 4,198
Treasury Shares Purchased 0 0 0 (498) 0
Stock Options Exercised 98 23 0 0 0
-------- -------- -------- -------- --------
Balance March 31, 1995 $179,598 $34,107 $144,351 ($10,871) ($2,337)
======== ======== ======== ======== ========
Balance December 31, 1993 $175,168 $25,830 $107,314 ($3,129) $0
Three Months Ended March 31, 1994
Net Income 0 0 10,831 0 0
Cash Dividends ($.22 per share) 0 0 (3,795) 0 0
Stock Options Exercised 89 50 0 0 0
-------- -------- -------- -------- --------
Balance March 31, 1994 $175,257 $25,880 $114,350 ($3,129) ($154)
======== ======== ======== ======== ========
</TABLE>
<PAGE>
<TABLE>
ONE VALLEY BANCORP OF WEST VIRGINIA, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(unaudited in thousands)
<CAPTION>
For The Three Months
Ended March 31
1995 1994
<S> <C> <C>
Operating Activities
Net Income $11,288 $10,831
Adjustments To Reconcile Net Income To Net Cash
Provided by Operating Activities:
Provision For Loan Losses 1,113 1,179
Depreciation 1,926 1,742
Amortization and Accretion 775 951
Net Gains From Sales of Assets (7) (197)
Increase (Decrease) Due to Changes In:
Accrued Interest Receivable (2,661) (345)
Accrued Interest Payable 1,123 (228)
Other Assets and Other Liabilities 6,117 5,000
-------- --------
Net Cash Provided by Operating Activities 19,674 18,933
Investing Activities
Proceeds From Sales of Securities Available for Sale 27,678 36,497
Proceeds From Sales of Securities Held to Maturity 0 0
Proceeds From Maturities of Securities Available for Sale 67,391 106,584
Proceeds From Maturities of Securities Held to Maturity 6,191 22,758
Purchases of Securities Available for Sale (66,225) (101,567)
Purchases of Securities Held to Maturity (593) (55,021)
Net Increase In Loans (27,691) (4,912)
Purchases of Premises and Equipment (1,231) (3,826)
-------- --------
Net Cash Provided by Investing Activities 9,974 513
Financing Activities
Net Change in Interest Bearing and Non-interest Bearing Deposits 68,344 29,626
Net Decrease in Federal Funds Purchased (42,090) (4,706)
Net Decrease in Other Short-term Borrowings (88,140) (41,202)
Proceeds From Long-term Borrowings 0 1,099
Repayment of Long-term Debt (5,505) (5,004)
Proceeds From Issuance of Common Stock 122 139
Dividends Paid (4,374) (3,795)
-------- --------
Net Cash Used in Financing Activities (72,141) (23,843)
-------- --------
Decrease in Cash and Cash Equivalents (42,493) (4,397)
Cash And Cash Equivalents at Beginning of Year 208,072 180,368
-------- --------
Cash And Cash Equivalents, March 31 $165,579 $175,971
======== ========
</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., a $57 million Federal Savings Bank
located in Point Pleasant, WV. Pursuant to the merger agreemnent, 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
March 31, 1995
INTRODUCTION AND SUMMARY
Net income for the first quarter of 1995 totaled $11.3 million, an
increase of 4.2% over the $10.8 million earned in the same quarter of 1994.
On a per share basis, net income of $0.66 for the first quarter of 1995
increased 4.8% over the $0.63 earned during the same period in 1994. The
improvement in earnings during the quarter can be attributed, in part, to an
increase in net interest income.
Return on average assets (ROA) measures how effectively One Valley
utilizes its assets to produce net income. ROA was 1.25% in the first three
months of 1995, a slight increase over the 1.24% earned during the first three
months of 1994. Return on average equity (ROE) decreased slightly, from
14.00% for the first three months of 1994 to 13.75% earned over the first
three months of 1995.
The following discussion is an analysis of the financial condition and
results of operations of One Valley for the first three 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 three months ended March 31, 1995, was $41.0
million on a fully tax-equivalent basis, a 4.5% increase from the $39.2
million earned during the same period in 1994. This increase is largely due
to a $222.6 million, or 10.3% increase in average total loans during the first
quarter comparison. Average earning assets increased by 2.9% in the first
three months of 1995 over the same period in 1994, while average interest
bearing liabilities increased by 4.4% in the same comparison. Both total
interest income and total interest expense increased from the prior year due
to the increases in volume and the rising 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, the yield on earning
assets and the costs of interest bearing liabilities increased at similar
rates. As shown in the consolidated average balance sheets (page 16), the
yield on earning assets, increased 68 basis points to 8.36% in the first three
months of 1995 from 7.68% in the first three months of 1994. During the same
period, the cost of interest bearing liabilities increased 66 basis points to
3.96% from last year's 3.30% level. Due to the higher volume of earning
assets over interest bearing liabilities, the net interest margin increased to
4.96% during the first three months of 1995, compared to 4.88% during the
first three months of 1994. At March 31, 1995, One Valley's asset/liability
structure was somewhat asset sensitive in the six month time frame. Thus, an
increase in market interest rates would tend to increase One Valley's net
interest margin.
Credit Experience
The provision for loan losses was $1.1 million for the three months
ended March 31, 1995, a 5.6% decline from the $1.2 million provision during
the first three months of 1994. The decline in the provision for loan losses
is primarily due to the continued improvement in the quality of the loan
portfolio. As a percentage of average total loans, the provision for loan
losses through the first three months of 1995 was 0.19% annualized compared to
0.22% in the first three months of 1994. Net charge-offs as a percentage of
average total loans in the first three months of 1995 also decreased to 0.06%
on an annualized basis, down from an annualized 0.10% during the first three
months of 1994.
Total non-performing assets at March 31, 1995, were 0.44% of period-end
loans, a slight increase from the 0.41% at year-end 1994 but a decline from
the 0.53% at March 31, 1994. At March 31, 1995, loans past due over 90 days
were 0.13% of outstanding loans, a decrease from the 0.16% at year-end 1994,
but equal to the 0.13% level at March 31, 1994. The dollar amounts of both
non-performing assets and loans past due over 90 are detailed in the analysis
on page 15.
With the continued good credit quality of the loan portfolio, the
allowance for loan losses decreased in relationship to the loan portfolio
during 1994. At March 31, 1995, the allowance was 1.59% of outstanding loans,
relatively unchanged from the 1.58% at year-end, but down from the 1.71% 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 $9.1 million through the first three
months of 1995, consistent with non-interest income earned during the same
period in 1994. Trust income decreased by 5.4% from the first three months of
last year. Service charges on deposit accounts increased by 21.3% in the
first three month comparisons due to increases in the customer base and new
product fees introduced in the fourth quarter of 1994. Real estate loan
processing and service fees declined by 21.4% when compared to the first
quarter of 1994. Recent increases in interest rates have reduced the volume
of loan originations and consequently fees from the origination and sale of
loans in the secondary market have decreased.
Total non-interest expense was $30.6 million during the three months
ended March 31, 1995, up 3.4% over the same period in 1994. Staff costs rose
3.2% in 1995 when compared to 1994, reflecting salary and benefit increases.
Occupancy expense decreased by 2.1% in the first quarter of 1995 due to
synergies realized from branch closings in 1994 as part of the Mountaineer
Bankshares merger. Equipment expenses increased by 4.2%, due to an increase
in depreciation resulting from additional equipment. Outsourcing data
processing expense increased 17.7% over the same period in 1994, due to the
conversion costs related to banks acquired in 1994. Other operating expenses
increased 3.9% in the first quarter of 1995, largely due to expenses related
to the new deposit products introduced in the fourth quarter of 1994. These
expenses were partially offset by the increases in service charges discussed
above.
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 three months of 1995 was 2.59%, up slightly from 2.55% during
all of 1994 and up from the 2.56% during the first three months of 1994.
These increases in the first quarter of 1995 when compared to the first
quarter of 1994 are largely due to the declines in non-interest income
discussed above.
Income tax expense increased by $87,000, or 1.7%, for the first three
months of 1995 in comparison to 1994. The increase in taxes is a result of
the 3.4% growth in pretax earnings. One Valley's effective income tax rate
for the first three months of 1995 was 32.1% versus 32.7% for the same period
last year largely due to increases in tax-exempt investments.
FINANCIAL CONDITION
Asset Structure
Total loans continued to grow when compared to the first quarter of
1994. At March 31, 1995, total loans exceeded March 31, 1994, levels by 11.0%
or $239.2 million The consolidated loan-to-deposit ratio has also increased
to 78.2% at March 31, 1995, compared to 72.0% at March 31, 1994. Since year-
end 1994, total loans have increased by 1.7% or $39.9 million. This increase
in total loans has resulted from balanced growth in the three major loan
categories; commercial, real estate, and consumer installment.
Investment portfolio assets increased $6.0 million or 0.6% from the
level at year-end but decreased $56.8 million or 5.4% from the level one year
ago. Due to strong loan demand during 1994, 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
factors related to interest rate and resultant prepayment risk changes.
Securities designated as available-for-sale at March 31, 1995, had an
historical cost of $556 million, with an unrealized loss of approximately $3.9
million, which decreased shareholders' equity by $2.3 million, net of $1.6
million in deferred income taxes. At year-end December 31, 1994, and March
31, 1994, securities available-for-sale had an historical cost of $552 million
and $590 million, with an unrealized loss of approximately $10.9 and $0.3
million, respectively. These unrealized losses decreased shareholders' equity
by $6.5 and $0.2 million, net of $4.4 and $0.1 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 quarter of 1995 increased by 13.0% over the average
first quarter 1994 level. 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 March 31, 1995, were $15.9 million, down $9.0
million from year-end and down $22.5 from one year ago. The decline since
March 31, 1994, was partially in response to the strong loan demand
experienced in 1994. 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 $110.5 million or 3.8% from the level at year-
end and increased $70.6 million or 2.4% since March 31, 1994. Non-interest
deposits have increased by 3.5% from year-end, but have decreased by 9.7%
since March 31, 1994. Interest bearing deposits at March 31, 1995, increased
$97.1 million or 3.8% from year-end and $112.8 million or 4.5% 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. In
addition, 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 the fourth quarter of 1994, One Valley introduced new
checking products and continues to expand other products to attract new
customers and to provide alternatives for current customers.
Total short-term borrowings decreased $130.2 million or 34.7% from the
year-end level, but increased $72.6 million or 42.1% from the level at March
31, 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 the customers' cash needs and the
interest rate environment. The increase in short-term borrowings since the
first quarter of 1994 is largely due to advances on credit lines used to fund
the significant loan growth experienced during 1994.
Long-term borrowings declined $5.0 million or 25.7% since year-end 1994
and $4.4 million or 23.5% since March 31, 1994. The decline since year-end
1994 was the result of $5.0 million pay down in long-term advances from the
FHLB. The $14.4 million of long-term borrowings at March 31, 1995,
principally consists of FHLB advances incurred prior to 1994 to fund
investments in mortgage backed securites. Approximately $6.5 million of these
advances mature in 1995, and another $5.0 million mature in 1996.
Acquisitions
On March 15, 1995, One Valley acquired all of the outstanding stock of
Point Bancorp, Inc., 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 trasaction. 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
March 31, 1995, the ratio was 9.37% compared to 8.76% at December 31, 1994,
and 8.92% 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, further explained above.
One Valley's cash dividend, totaling $0.25 per share in the first
quarter of 1995, was up 13.6% over the $0.22 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 March 31, 1995 was
15.51%, well above the 8.0% required, while its Tier I capital ratio was
14.26%. One Valley's strong capital position is demonstrated further by its
leverage ratio of 8.9% 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 March 31, 1995, One
Valley held 550,500 shares of treasury stock, and is authorized to repurchase
up to 621,100 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
Ended March 31
1995 1994
<S> <C> <C>
Allowance For Loan Losses
Balance, Beginning of Period $37,438 $36,484
Loan Losses 1,040 1,136
Loan Recoveries 666 584
------- -------
Net Charge-offs 374 552
Provision For Loan Losses 1,113 1,179
------- -------
Balance, End of Period $38,412 $37,111
======= =======
Total Loans, End of Period $2,412,895 $2,173,686
Allowance For Loan Losses As a % of Total Loans 1.59 1.71
========== ==========
Non-Performing Assets at Quarter End
Non-Accrual Loans $8,891 $9,057
Foreclosed Properties 1,301 2,237
Restructured Loans 415 323
------- -------
Total Non-Performing Assets $10,607 $11,617
======= =======
Non-Performing Assets As a % of Total Loans 0.44 0.53
Loans Past Due Over 90 Days $3,236 $2,727
Loans Past Due Over 90 Days As a % of Total Loans 0.13 0.13
</TABLE>
<PAGE>
<TABLE>
ONE VALLEY BANCORP OF WEST VIRGINIA, INC. AND SUBSIDIARIES
Consolidated Average Balance Sheets
(unaudited in thousands)
<CAPTION>
Three Months Ended March 31
1995 1994
Amount Yield/Rate Amount Yield/Rate
(pct.) (pct.)
<S> <C> <C> <C> <C>
Assets
Loans
Taxable $2,345,268 9.00 $2,124,292 8.47
Tax-Exempt 35,052 11.18 33,381 10.69
---------- ----------
Total 2,380,320 9.03 2,157,673 8.51
Less: Allowance for Losses 37,810 36,737
---------- ----------
Net Loans 2,342,510 9.18 2,120,936 8.65
Securities
Taxable 799,511 5.97 913,767 5.55
Tax-Exempt 178,769 8.62 158,206 8.39
---------- ----------
Total 978,280 6.46 1,071,973 5.97
Federal Funds Sold & Other 15,233 5.32 47,621 2.93
---------- ----------
Total Earning Assets 3,336,023 8.36 3,240,530 7.68
Other Assets 265,948 256,377
---------- ----------
Total Assets $3,601,971 $3,496,907
========== ==========
Liabilities And Equity
Interest Bearing Liabilities
Deposits $2,570,233 3.86 $2,522,167 3.33
Short-term Borrowings 280,142 4.74 200,929 2.80
Long-term Borrowings 15,208 6.08 22,470 4.42
---------- ----------
Total Interest
Bearing Liabilities 2,865,583 3.96 2,745,566 3.30
Non-interest Bearing Deposits. 374,965 409,719
Other Liabilities 32,997 32,148
---------- ----------
Total Liabilities 3,273,545 3,187,433
Shareholders' Equity 328,426 309,474
---------- ----------
Total Liabilities & Equity $3,601,971 $3,496,907
========== ==========
Interest Income To Earning Assets 8.36 7.68
Interest Expense To Earning Assets 3.40 2.80
------ ------
Net Interest Margin 4.96 4.88
====== ======
<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
11. Statement of Computation of Earnings per Share - page 18
attached
b.) Reports on Form 8-K
March 15, 1995 - Acquisition of Point Bancorp, Inc.
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 May 12, 1995 I
BY /s/J. Holmes Morrison
J. Holmes Morrison
President and
Chief Executive Officer
BY /s/Laurance G. Jones
Laurance G. Jones
Senior Vice President & Treasurer
<PAGE>
<TABLE>
Exhibit 11
Statement Re: Computation of Earnings per Share
<CAPTION>
For The Three Months
Ended March 31
1995 1994
<S> <C> <C>
PRIMARY:
Average Shares Outstanding 17,079,381 17,250,000
Net effect of the assumed exercise
of stock options - based on the
treasury stock method 104,000 96,000
------------ ------------
Total 17,183,381 17,346,000
============ ============
Net Income $11,288,000 $10,831,000
Per Share Amount $0.66 $0.62
============ ============
FULLY DILUTED:
Average Shares Outstanding 17,079,381 17,250,000
Net effect of the assumed exercise
of stock options - based on the
treasury stock method 113,000 96,000
------------ ------------
Total 17,192,381 17,346,000
============ ============
Net Income $11,288,000 $10,831,000
Per Share Amount $0.66 $0.62
============ ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted form the
consolidated balance sheets and statements fo 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> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 136845
<INT-BEARING-DEPOSITS> 12884
<FED-FUNDS-SOLD> 15850
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 553018
<INVESTMENTS-CARRYING> 439339
<INVESTMENTS-MARKET> 432575
<LOANS> 2412895
<ALLOWANCE> 38412
<TOTAL-ASSETS> 3679272
<DEPOSITS> 3036968
<SHORT-TERM> 245109
<LIABILITIES-OTHER> 37902
<LONG-TERM> 14445
<COMMON> 179598
0
0
<OTHER-SE> 165250
<TOTAL-LIABILITIES-AND-EQUITY> 3679272
<INTEREST-LOAN> 52658
<INTEREST-INVEST> 14443
<INTEREST-OTHER> 200
<INTEREST-TOTAL> 67301
<INTEREST-DEPOSIT> 24491
<INTEREST-EXPENSE> 27995
<INTEREST-INCOME-NET> 39306
<LOAN-LOSSES> 1113
<SECURITIES-GAINS> 7
<EXPENSE-OTHER> 30625
<INCOME-PRETAX> 16632
<INCOME-PRE-EXTRAORDINARY> 16632
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11288
<EPS-PRIMARY> 0.66
<EPS-DILUTED> 0.66
<YIELD-ACTUAL> 4.96
<LOANS-NON> 8891
<LOANS-PAST> 3236
<LOANS-TROUBLED> 415
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 37438
<CHARGE-OFFS> 1040
<RECOVERIES> 666
<ALLOWANCE-CLOSE> 38412
<ALLOWANCE-DOMESTIC> 38412
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
