SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-Q
Quarterly Report Under Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the Quarter Ended March 31, 1994, Commission File Number 0-13425
PREMIER FINANCIAL SERVICES, INC.
(Exact name of registrant as specified in its Charter)
Delaware 36-2852290
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
27 W. Main Street, Suite 101 61032
Freeport, Illinois (Zip Code)
(Address of Principal executive
offices)
Registrant's telephone number, including area code (815) 233-3671
Number of Shares of Common Stock ($5 Par Value) outstanding as of
March 31, 1994: 2,163,107
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (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 X No
(This report contains 3 pages)
Part I
Item 1. Financial Statements.
The following consolidated financial statements of the Company, which
are included in the quarterly report of the registrant to its stockholders
for the quarter ended March 31, 1994, are submitted herewith as an exhibit
and are incorporated herein by reference:
1. Consolidated Balance Sheets, March 31, 1994, March 31, 1993 and,
December 31, 1993.
2. Consolidated Statements of Earnings, quarters ended March 31,
1994 and 1993.
3. Consolidated Statements of Cash Flows, three months ended March
31, 1994 and 1993.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Incorporated herein by reference to the Registrant's Quarterly Report
to its stockholders for the quarter ended March 31, 1994, which is included
as an exhibit to this report.
Part II
Item 6. Exhibits and Reports on Form 8-K.
1. The following documents are filed as a part of this report:
A. Consolidated Financial Statements of the Company which
are included in the quarterly report of the registrant
to its stockholders for the quarter ended March 31, 1994
as follows:
1. Consolidated Balance Sheets, March 31, 1994, March
31, 1993 and December 31, 1993.
2. Consolidated Statements of Earnings, quarters ended
March 31, 1994 and 1993.
B. Exhibits as follows:
20. Premier Financial Services, Inc. Quarterly Report
dated March 31, 1994.
28. Consolidated Statements of Cash Flows, three months
ended March 31, 1994 and 1993.
-2-
2. Reports on Form 8-K - The registrant has not filed any reports
on Form 8-K, nor has it been required to file such reports,
for the quarter ended March 31, 1994.
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.
PREMIER FINANCIAL SERVICES, INC.
By:
D. L. Murray, Executive Vice President
& Chief Financial Officer
April 19, 1994
(Date)
-3-
TO OUR STOCKHOLDERS:
Net Earnings for the first quarter of 1994 totaled $1,354,634, a
17.1% increase over the $1,157,291 earned in the first quarter of
1993. After paying dividends on preferred stock, income available
to common shareholders represented $.47 per share as compared to
$.59 per share for the first three months of 1993.
We've made substantial progress this quarter with respect to loan
portfolio quality. At year end, non-performing assets aggregated
$13.2 million, or 2.16% of total assets. As of March 31, 1994,
1.68%, or $10.0 million of our assets were non-performing.
Significantly, the improvement was the result of our collection
efforts rather than charges against earnings. Net charge offs for
the quarter totaled less than $7,000.
We're quite pleased with the progress we've made since our third
quarter 1993 merger with First Northbrook Bancorp, Inc. As 1994
unfolds, we'll continue to look for opportunities to maximize
efficiency while improving interest margins and asset quality.
With the implementation of FAS No. 115 ("Accounting for Certain
Investments in Debt and Equity Securities") this year, a new
caption titled "Unrealized loss on securities available for sale"
is included in the Stockholders' Equity section of our balance
sheet. Essentially, FAS No. 115 requires that securities available
for sale be reported at "fair value", and the unrecognized loss, if
any, be deducted from Stockholders' Equity. This "fair value" will
naturally fluctuate, perhaps significantly, as interest rates rise
and fall. Although it's unlikely that we would liquidate the
entire portfolio, we are required to designate investments which we
might sell for liquidity purposes and account for them as
indicated.
In January, 1994, your Board of Directors voted to increase the
quarterly cash dividend rate on our common stock by 8.3%, from $.12
per share to $.13. We're excited with the early results we've
experienced in our new markets, and remain optimistic about the
coming months. Thank you for your participation and continued
support.
<TABLE>
Consolidated Balance Sheets
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<CAPTION>
March 31, March 31, December 31,
1994 1993 1993
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Assets
<S> <C> <C> <C>
Cash & non-interest bearing deposits $22,246,528 $15,842,547 $26,151,048
Interest bearing deposits 23,375,556 651,580 20,227,486
Federal funds sold - - 9,977,000
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Cash and cash equivalents 45,622,084 16,494,127 56,355,534
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Investments held to maturity (approximate market value):
March 31, 1994 - $40,631,000;
March 31, 1993 - $31,453,000;
December 31, 1993 - $41,572,000; 39,564,753 29,812,787 39,787,245
Securities available for sale (approximate market value):
March 31, 1994 - $156,074,000;
March 31, 1993 - $75,105,000;
December 31, 1993 - $141,744,000; 156,074,015 73,220,152 140,699,066
Loans 309,802,970 225,778,303 331,905,335
Less: Unearned discount ( 451,713) ( 179,612) ( 517,932)
Allowance for possible loan losses ( 4,362,603) ( 2,722,393) ( 4,369,290)
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Net loans 304,988,654 222,876,298 327,018,113
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Bank premises & equipment 14,945,427 11,509,601 15,153,969
Excess cost over fair value of net assets acquired 22,794,908 2,961,402 23,193,016
Accrued interest receivable 5,193,134 3,578,637 5,070,332
Other assets 4,629,203 1,267,539 3,385,935
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Total assets $593,812,178 $361,720,543 $610,663,210
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Liabilities & stockholders' equity
Non-interest bearing deposits $90,294,703 $41,121,700 $104,976,862
Interest bearing deposits 406,669,874 254,560,586 413,042,081
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Deposits 496,964,577 295,682,286 518,018,943
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Short-term borrowings 15,925,000 17,425,000 12,410,000
Securities sold under agreements to repurchase 21,207,805 13,581,584 20,571,658
Accrued taxes & other expenses 3,538,541 2,064,712 3,667,295
Other liabilities 584,270 303,328 579,275
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Liabilities $538,220,193 $329,056,910 $555,247,171
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Stockholders' equity
Preferred stock - $1 par value, 1,000,000 shares authorized:
Series A perpetual, $1,000 stated value, 8.25%, 7,000 shares
authorized, 5,000 shares issued and outstanding; 5,000,000 - 5,000,000
Series B convertible, $1,000 stated value, 7.50%, 7,250 share
authorized, 5,950 shares issued and outstanding; 5,950,000 - 5,950,000
Series C perpetual, $1,000 stated value, 7.00%, 1,950 shares
authorized, issued and outstanding; 1,950,000 - 1,950,000
Series D perpetual, $1,000 stated value, 9.00%, 3,300 shares
authorized, issued and outstanding; 3,300,000 - 3,300,000
Common stock- $5.00 par value
March 31, March 31, December 31,
No. of Shares 1994 1993 1993
Authorized 2,500,000 2,500,000 2,500,000
Issued 2,172,863 1,993,146 2,172,863
Outstanding 2,163,107 1,927,536 2,163,107 10,864,315 9,965,730 10,864,315
Surplus 16,134,180 12,533,290 16,134,180
Retained earnings 13,176,692 10,915,136 12,426,322
Unrealized loss on securities available for sale (net of tax) ( 574,424)
Less: Treasury stock, (9,756 shares at cost,
March 31, 1994 and December 31, 1993
and 65,610 shares at cost, March 31, 1993) ( 208,778) ( 750,523) ( 208,778)
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Stockholders' equity $55,591,985 $32,663,633 $55,416,039
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Total liabilities & stockholders' equity $593,812,178 $361,720,543 $610,663,210
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</TABLE>
<TABLE>
Consolidated Statements of Earnings
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<CAPTION>
Three Months Ended
March 31,
Interest income 1994 1993
<S> <C> <C>
Interest & fees on loans $5,993,666 $4,601,763
Interest & dividends on investment securities:
Taxable 1,897,305 1,226,144
Exempt from federal income tax 527,415 391,458
Other interest income 126,129 22,771
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Interest income 8,544,515 6,242,136
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Interest expense
Interest on deposits 3,059,638 2,405,642
Interest on short-term borrowings 317,308 282,200
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Interest expense 3,376,946 2,687,842
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Net interest income 5,167,569 3,554,294
Provision for possible loan losses - 75,000
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Net interest income after provision for possible loan losses 5,167,569 3,479,294
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Other income
Trust fees 607,458 539,250
Service charges on deposits 463,943 242,953
Net gains on loans sold to secondary market 155,840 62,359
Investment securities gains, net - 20,394
Other operating income 620,483 216,923
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Other income 1,847,724 1,081,879
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Other expenses
Salaries 1,902,015 1,408,070
Pension, profit sharing, & other employee benefits 349,240 205,156
Net occupancy of bank premises 523,440 281,495
Furniture & equipment 284,523 187,522
Federal deposit insurance premiums 299,330 170,750
Amortization of excess cost over fair value of net assets acquired 398,108 48,549
Other 1,298,382 670,432
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Other expense 5,055,038 2,971,974
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Earnings before income taxes 1,960,255 1,589,199
Applicable income taxes 605,621 431,908
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Net earnings $1,354,634 $1,157,291
===================================================================================================================================
Earnings per share
(On weighted average outstanding common
shares of 2,205,595 in 1994 and
1,959,791 in 1993) $.47 $.59
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</TABLE>
<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Three months ended March 31, 1994 and 1993 (unaudited)
1994 1993
------ ------
Cash flows from operating activities:
<S> <C> <C>
Net earnings $1,354,634 $1,157,291
Adjustments to reconcile net earnings
to net cash from operating activities:
Amortization net, related to:
Investment securities 480,983 148,329
Excess of cost over net assets acquired 398,108 48,549
Other 171,820 ( 1,684)
Depreciation 299,320 211,941
Provision for possible loan losses - 75,000
Gain on sale related to:
Investment securities - ( 20,394)
Loans sold to secondary market ( 155,840) ( 62,359)
Change in:
Securities available for sale (15,791,810) 4,156,597
Accrued interest receivable ( 122,802) 117,601
Other assets ( 1,243,268) ( 555,340)
Accrued taxes & other expenses ( 128,754) ( 21,650)
Other liabilities 4,995 2,448
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Net cash from operating activities (14,732,614) 5,256,329
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Cash flows from investing activities:
Purchase of investment securities ( 2,511,785) ( 2,611,925)
Proceeds from:
Maturities of investment securities 2,095,731 1,129,463
Net (increase) decrease in loans 22,027,046 ( 5,637,426)
Purchase of bank premises & equipment ( 104,345) ( 80,958)
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Net cash from investing activities 21,506,647 ( 7,200,846)
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Cash flows from financing activities:
Net increase (decrease) in:
Deposits (21,054,366) ( 13,210,826)
Securities sold under agreements to repurchase 636,147 ( 1,272,826)
Short term borrowings 3,515,000 11,273,000
Cash dividends paid ( 604,264) ( 231,304)
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Net cash from financing activities (17,507,483) ( 3,441,956)
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Increase (decrease) in cash and cash equivalents (10,733,450) ( 5,386,473)
Cash and cash equivalents, beginning of year 56,355,534 21,880,600
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Cash and cash equivalents, end of year $45,622,084 $16,494,127
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</TABLE>
