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, 1995, 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, 1995: 6,524,217
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 4 pages)
Part I
Item 1. Financial Statements.
The following consolidated financial statements of the Company are
submitted herewith as an exhibit and are incorporated herein by
reference:
1. Consolidated Balance Sheets, March 31, 1995, March 31, 1994
and, December 31, 1994.
2. Consolidated Statements of Earnings, quarters ended March 31,
1995 and 1994.
3. Consolidated Statements of Cash Flows, three months ended March
31, 1995 and 1994.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Premier Financial Services, Inc. earned $1.30 million for the first
quarter of 1995 or $.15 earnings per share. Net earnings for the first
quarter of 1994 totaled $1.35 million, or $.16 earnings per share.
Return on average assets and common equity was .85% and 12.42%,
respectively for the three months ended March 31, 1995, compared to .92%
and 13.95% for the same period in 1994.
Net interest income for the first quarter of 1995 was $5.3 million, as
compared $5.2 million in 1994. The increase was essentially
attributable to growth in average earning assets. Average earning
assets totaled $545.4 million at March 31, 1995, an increase of $21.1
million from the $524.3 million reported in 1994. An analysis of first
quarter results reflects a 115 basis point increase in the average yield
on earning assets from 1994 to 1995, while the average cost of funds
increased 118 basis points, resulting in a slightly lower net interest
margin (4.21% in 1995 as compared to 4.24% in 1994).
Premier recorded a loan loss provision of $51,000 in the first quarter.
No provision for loan losses was made during the first three months of
1994. Nonperforming assets as a percentage of total assets decreased to
.76% as of March 31, 1995 as compared to 1.68% at March 31, 1994 and
1.14% at December 31, 1994. The adequacy of the allowance is consistent
with the composition of the portfolio and credit quality as of March 31,
1995. Assuming that anticipated loan growth materializes, it is likely
that additional provisions will be made in future periods.
Total noninterest income decreased $240,000, or 13.00% for the three
months ended March 31, 1995 as compared to the same period in 1994.
Contributing to the decrease was approximately $191,000 recorded in 1994
for fees and prior years' interest collected but not accrued on
nonperforming loans. In addition, the income on real estate loan
-2-
originations and sales to the secondary market, which enhanced earnings
before taxes in 1994 by $156,000, declined to $16,000 in 1995. Core fee
income from trust and service charges on deposit accounts increased
approximately $77,000 or 7.21%. Premier continues to exercise effective
control over noninterest expenses which were slightly less in the
quarter ended March 31, 1995 than in the first quarter of 1994.
At March 31, 1995, stockholders' equity totaled $56 million, up from
$52.5 million at December 31, 1994. This increase was due primarily to
earnings net of common and preferred dividends and a decrease in the
after tax unrealized loss recorded on securities available for sale in
accordance with Statement of Financial Accounting Standards No. 115,
Accounting for Certain Investments in Debt and Equity Securities.
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 for the
quarter ended March 31, 1995 as follows:
1. Consolidated Balance Sheets, March 31, 1995, March
31, 1994 and December 31, 1994.
2. Consolidated Statements of Earnings, quarters ended
March 31, 1995 and 1994.
3. Consolidated Statements of Cash Flows, three months
ended March 31, 1995 and 1994.
B. Exhibits as follows:
27. Financial Data Schedule, three months ended March
31, 1995.
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, 1995.
-3-
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
D. L. Murray, Executive Vice President
& Chief Financial Officer
April 25, 1995
(Date)
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<TABLE>
<CAPTION>
Consolidated Balance Sheets
- -------------------------------------------------------------------------------------------------------------------------
March 31, March 31, December 31,
1995 1994 1994
- -------------------------------------------------------------------------------------------------------------------------
Assets
<S> <C> <C> <C>
Cash & non-interest bearing deposits $33,752,596 $22,246,528 $31,186,418
Interest bearing deposits 308,012 23,375,556 14,683,941
Federal funds sold - - -
- -------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents 34,060,608 45,622,084 45,870,359
- -------------------------------------------------------------------------------------------------------------------------
Investments held to maturity (approximate market value):
March 31, 1995 - $39,473,000;
March 31, 1994 - $40,631,000;
December 31, 1994 - $40,516,000; 39,167,317 39,564,753 40,513,480
Securities available for sale 218,484,899 156,074,015 207,964,644
Loans 285,861,308 309,802,970 284,799,933
Less: Unearned discount ( 317,757) ( 451,713) ( 343,902)
Allowance for possible loan losses ( 3,257,973) ( 4,362,603) ( 3,688,386)
- -------------------------------------------------------------------------------------------------------------------------
Net loans 282,285,578 304,988,654 280,767,645
- -------------------------------------------------------------------------------------------------------------------------
Bank premises & equipment 14,099,624 14,945,427 14,254,748
Excess cost over fair value of net assets acquired 21,202,475 22,794,908 21,600,583
Accrued interest receivable 6,378,192 5,193,134 5,835,006
Other assets 4,389,084 4,629,203 3,697,272
- -------------------------------------------------------------------------------------------------------------------------
Total assets $620,067,777 $593,812,178 $620,503,737
- -------------------------------------------------------------------------------------------------------------------------
Liabilities & stockholders' equity
Non-interest bearing deposits $74,604,945 $90,294,703 $86,018,604
Interest bearing deposits 446,769,918 406,669,874 437,674,799
- -------------------------------------------------------------------------------------------------------------------------
Deposits 521,374,863 496,964,577 523,693,403
- -------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 21,800,000 15,925,000 26,185,000
Securities sold under agreements to repurchase 17,175,262 21,207,805 16,085,872
Accrued taxes & other expenses 3,510,164 3,538,541 1,759,512
Other liabilities 205,668 584,270 303,118
- -------------------------------------------------------------------------------------------------------------------------
Total liabilities $564,065,957 $538,220,193 $568,026,905
- -------------------------------------------------------------------------------------------------------------------------
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 5,000,000
Series B convertible, $1,000 stated value, 7.50%, 7,250 shares
authorized 7,250 shares issued and outstanding at March 31, 1995,
and December 31, 1994, 5,950 issued and outstanding at March 31, 1994 7,250,000 5,950,000 7,250,000
Series C perpetual, $1,000 stated value, 7.00%, 1,950 shares
authorized, issued and outstanding at March 31, 1994 - 1,950,000 -
Series D perpetual, $1,000 stated value, 9.00%, 3,300 shares
authorized, 2,000 shares issued and outstanding, 7.50%,
at March 31, 1995 and December 31, 1994,
3,300 shares issued and outstanding, 9.00%, at December 31, 1993 2,000,000 3,300,000 2,000,000
Common stock- $5.00 par value
March 31, March 31, December 31,
No. of Shares 1995 1994 1994
Authorized 15,000,000 2,500,000 15,000,000
Issued 6,526,227 2,172,863 6,526,227
Outstanding 6,524,217 2,163,107 6,504,876 32,631,135 10,864,315 32,631,135
Surplus - 16,134,180 -
Retained earnings 10,845,158 13,176,692 10,149,027
Unrealized loss on securities available for sale (net of tax) ( 1,708,128) ( 574,424) ( 4,403,568)
Less: Treasury stock, (2,010 shares at cost, March 31, 1995,
21,351 shares at cost, December 31, 1994
and 9,756 shares at cost, March 31, 1994) ( 16,345) ( 208,778) ( 149,762)
- -------------------------------------------------------------------------------------------------------------------------
Stockholders' equity $56,001,820 $55,591,985 $52,476,832
- -------------------------------------------------------------------------------------------------------------------------
Total liabilities & stockholders' equity $620,067,777 $593,812,178 $620,503,737
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Consolidated Statements of Earnings
- -----------------------------------------------------------------------------------------------------------------------------------
Three Months Ended
March 31,
Interest income 1995 1994
<S> <C> <C>
Interest & fees on loans $6,443,026 $5,993,666
Interest & dividends on investment securities:
Taxable 3,333,761 1,897,305
Exempt from federal income tax 553,975 527,415
Other interest income 102,981 126,129
- -----------------------------------------------------------------------------------------------------------------------------------
Interest income 10,433,743 8,544,515
- -----------------------------------------------------------------------------------------------------------------------------------
Interest expense
Interest on deposits 4,535,318 3,059,638
Interest on short-term borrowings 563,787 317,308
- -----------------------------------------------------------------------------------------------------------------------------------
Interest expense 5,099,105 3,376,946
- -----------------------------------------------------------------------------------------------------------------------------------
Net interest income 5,334,638 5,167,569
Provision for possible loan losses 51,000 -
- -----------------------------------------------------------------------------------------------------------------------------------
Net interest income after provision for possible loan losses 5,283,638 5,167,569
- -----------------------------------------------------------------------------------------------------------------------------------
Other income
Trust fees 648,939 607,458
Service charges on deposits 499,677 463,943
Net gains on loans sold to secondary market 16,547 155,840
Investment securities gains, net 22,518 -
Other operating income 419,862 620,483
- -----------------------------------------------------------------------------------------------------------------------------------
Other income 1,607,543 1,847,724
- -----------------------------------------------------------------------------------------------------------------------------------
Other expenses
Salaries 2,007,503 1,902,015
Pension, profit sharing, & other employee benefits 320,017 349,240
Net occupancy of bank premises 538,409 523,440
Furniture & equipment 295,782 284,523
Federal deposit insurance premiums 280,774 299,330
Amortization of excess cost over fair value of net assets acquired 398,108 398,108
Other 1,212,479 1,298,382
- -----------------------------------------------------------------------------------------------------------------------------------
Other expense 5,053,072 5,055,038
- -----------------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes 1,838,109 1,960,255
Applicable income taxes 539,306 605,621
- -----------------------------------------------------------------------------------------------------------------------------------
Net earnings $1,298,803 $1,354,634
===================================================================================================================================
Earnings per share
(On weighted average outstanding common
shares of 6,676,422 in 1995 and
6,616,785 in 1994) $.15 $.16
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three months ended March 31, 1995 and 1994 (unaudited)
1995 1994
------ ------
Cash flows from operating activities:
<S> <C> <C>
Net earnings $1,298,803 $1,354,634
Adjustments to reconcile net earnings
to net cash from operating activities:
Amortization net, related to:
Investment securities 354,946 480,983
Excess of cost over net assets acquired 398,108 398,108
Other 79,456 171,820
Depreciation 278,242 299,320
Provision for possible loan losses 51,000 -
Gain on sale related to:
Investment securities ( 22,518) -
Loans sold to secondary market ( 16,547) ( 155,840)
Change in:
Securities available for sale - ( 15,791,810)
Accrued interest receivable ( 543,186) ( 122,802)
Other assets ( 691,812) ( 1,243,268)
Accrued taxes & other expenses 1,750,652 ( 128,754)
Other liabilities ( 97,450) 4,995
- -------------------------------------------------------------------------------------------------------
Net cash from operating activities 2,839,694 ( 14,732,614)
- -------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Purchase of securities held-to-maturity ( 910,701) ( 2,511,785)
Purchase of securities available for sale (29,281,919) -
Proceeds from:
Maturities of securities held-to-maturity 2,262,303 2,095,731
Sales of securities available for sale 12,044,237 -
Maturities of securities available for sale 9,075,000 -
Net (increase) decrease in loans ( 1,618,275) 22,027,046
Purchase of bank premises & equipment ( 136,685) ( 104,345)
- -------------------------------------------------------------------------------------------------------
Net cash from investing activities ( 8,566,040) 21,506,647
- -------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Net increase (decrease) in:
Deposits ( 2,318,540) ( 21,054,366)
Securities sold under agreements to repurchase 1,089,390 636,147
Short term borrowings ( 4,385,000) 3,515,000
Reissuance of treasury stock 133,417 -
Cash dividends paid ( 602,672) ( 604,264)
- -------------------------------------------------------------------------------------------------------
Net cash from financing activities ( 6,083,405) ( 17,507,483)
- -------------------------------------------------------------------------------------------------------
Decrease in cash and cash equivalents (11,809,751) ( 10,733,450)
Cash and cash equivalents, beginning of year 45,870,359 56,355,534
- -------------------------------------------------------------------------------------------------------
Cash and cash equivalents, end of year $34,060,608 $45,622,084
- -------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 33,752,596
<INT-BEARING-DEPOSITS> 308,012
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 218,484,899
<INVESTMENTS-CARRYING> 39,167,317
<INVESTMENTS-MARKET> 39,473,000
<LOANS> 285,861,308
<ALLOWANCE> 3,257,973
<TOTAL-ASSETS> 620,067,777
<DEPOSITS> 521,374,863
<SHORT-TERM> 21,800,000
<LIABILITIES-OTHER> 20,891,094
<LONG-TERM> 0
<COMMON> 32,631,135
0
14,250,000
<OTHER-SE> 9,120,685
<TOTAL-LIABILITIES-AND-EQUITY> 620,067,777
<INTEREST-LOAN> 6,443,026
<INTEREST-INVEST> 3,887,736
<INTEREST-OTHER> 102,981
<INTEREST-TOTAL> 10,433,743
<INTEREST-DEPOSIT> 4,535,318
<INTEREST-EXPENSE> 5,099,105
<INTEREST-INCOME-NET> 5,334,638
<LOAN-LOSSES> 51,000
<SECURITIES-GAINS> 22,518
<EXPENSE-OTHER> 5,053,072
<INCOME-PRETAX> 1,838,109
<INCOME-PRE-EXTRAORDINARY> 1,298,803
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,298,803
<EPS-PRIMARY> .15
<EPS-DILUTED> .15
<YIELD-ACTUAL> 4.21
<LOANS-NON> 3,005,114
<LOANS-PAST> 238,905
<LOANS-TROUBLED> 92,571
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,688,386
<CHARGE-OFFS> 569,725
<RECOVERIES> 88,312
<ALLOWANCE-CLOSE> 3,257,973
<ALLOWANCE-DOMESTIC> 2,206,973
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,051,000
</TABLE>
