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 September 30, 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
September 30, 1995: 6,526,227
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 submitted herewith as an exhibit and are incorporated herein by
reference:
1. Consolidated Balance Sheets, September 30, 1995, September 30,
1994 and December 31, 1994.
2. Consolidated Statements of Earnings, quarters ended September 30,
1995 and 1994 and nine months ended September 30, 1995 and 1994.
3. Consolidated Statements of Cash Flows, nine months ended September
30, 1995 and 1994.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Premier Financial Services, Inc.'s earnings for the third quarter, 1995
totaled $1,953,000 or $.25 per share versus $1,615,000, or $.20 per share
for the same quarter in 1994. Year to date earnings increased to
$4,626,000 as compared to $4,360,000 in 1994. Return on average assets and
common equity was .98% and 11.68%, respectively, for the nine months ended
September 30, 1995, as compared to .97% and 11.43% for the same period in
1994.
Year-to-date net interest income totaled $16.6 million in 1995, as compared
to $16.1 million in 1994. Net interest income for the third quarter of
1995 increased by approximately $230,000 and $131,000 as compared to the
second quarter of 1995 and the third quarter of 1994. The slight period-
to-period increases continue to be primarily a result of earning asset
volume as opposed to rate or net interest margin improvement. Average
earning assets totaled $560.1 million at September 30, 1995, an increase
of $6.5 million from $553.6 million reported at June 30, 1995 and an
increase of $28.7 million from $531.4 million reported one year ago. Our
net interest margin at 4.19% as of September 30, 1995 remained unchanged
from June 30, 1995 and reflects a 12 basis point decrease from September
30, 1994.
Provision for possible loan losses in the third quarter of 1995 totaled
$334,000, decreasing earnings per share by $.03 as compared to $100,000
($.01 per share) in 1994. The increased provision is primarily a result
of loan portfolio growth. Since year end 1994 net loans have grown by more
than $32 million. Management believes that the current level of the
allowance for loan losses is adequate and remains consistent with the
composition of the portfolio and recent credit quality history.
Total noninterest income, excluding gains on investment securities,
increased by approximately $245,000 in the third quarter of 1995 as
compared to the same period in 1994. In addition to the increase in "core
noninterest income" (i.,e., service charges on deposits, trust fees and
-2-
other income) net investment security gains for the third quarter of 1995
totaled $300,000, or $.03 per share, as compared to $26,000 in the third
quarter of 1994. Total noninterest expenses in the third quarter of 1995
decreased by approximately $90,000 as compared to 1994. A decrease of
$309,000, or $.03 per share, in federal deposit insurance premiums was
partially offset by increases in salary and benefits, occupancy, furniture
and fixtures, and legal/professional fees.
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 September 30, 1995 as follows:
1. Consolidated Balance Sheets, September 30, 1995,
September 30, 1994 and December 31, 1994.
2. Consolidated Statements of Earnings, quarters ended
September 30, 1995 and 1994 and nine months ended
September 30, 1995 and 1994.
3. Consolidated Statements of Cash Flows, nine months
ended September 30, 1995 and 1994.
B. Exhibits as follows:
27. Financial Data Schedule, nine months ended September
30, 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 September 30, 1995.
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:
David L. Murray, Executive Vice President
& Chief Financial Officer
October 16, 1995
(Date)
-3-
<TABLE>
<CAPTION>
Consolidated Balance Sheets
- ------------------------------------------------------------------------------------------------------------------------------
September 30, September 30, December 31,
1995 1994 1994
- ------------------------------------------------------------------------------------------------------------------------------
Assets
<S> <C> <C> <C>
Cash & non-interest bearing deposits $27,713,803 $26,060,683 $31,186,418
Interest bearing deposits 208,121 8,490,214 14,683,941
Federal funds sold - 1,500,000 -
- ------------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents 27,921,924 36,050,897 45,870,359
- ------------------------------------------------------------------------------------------------------------------------------
Investments held to maturity (approximate market value):
September 30, 1995 - $43,752,000;
September 30, 1994 - $42,572,000;
December 31, 1994 - $40,516,000; 43,074,776 42,163,626 40,513,480
Securities available for sale 216,188,458 201,607,134 207,964,644
Trading account 992,813 - -
Loans 317,614,773 277,054,199 284,799,933
Less: Unearned discount ( 291,421) ( 374,989) ( 343,902)
Allowance for possible loan losses ( 3,888,324) ( 3,687,517) ( 3,688,386)
- ------------------------------------------------------------------------------------------------------------------------------
Net loans 313,435,028 272,991,693 280,767,645
- ------------------------------------------------------------------------------------------------------------------------------
Bank premises & equipment 14,067,423 14,394,428 14,254,748
Excess cost over fair value of net assets acquired 20,406,257 21,998,691 21,600,583
Accrued interest receivable 8,007,130 6,463,862 5,835,006
Other assets 4,060,803 3,483,738 3,697,272
- ------------------------------------------------------------------------------------------------------------------------------
Total assets $648,154,612 $599,154,069 $620,503,737
- ------------------------------------------------------------------------------------------------------------------------------
Liabilities & stockholders' equity
Non-interest bearing deposits $73,687,721 $92,161,850 $86,018,604
Interest bearing deposits 459,497,665 414,473,622 437,674,799
- ------------------------------------------------------------------------------------------------------------------------------
Deposits 533,185,386 506,635,472 523,693,403
- ------------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 32,200,000 19,295,000 26,185,000
Securities sold under agreements to repurchase 18,107,448 17,227,174 16,085,872
Accrued taxes & other expenses 4,539,346 2,482,959 1,759,512
Other liabilities 336,368 244,073 303,118
- ------------------------------------------------------------------------------------------------------------------------------
Liabilities $588,368,548 $545,884,678 $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 7,250,000 7,250,000 7,250,000
Series C perpetual, $1,000 stated value, 7.00%, 1,950 shares
authorized, no shares issued and outstanding - - -
Series D perpetual, $1,000 stated value, 7.50%, 3,300 shares
authorized, 2,000 shares issued and outstanding 2,000,000 2,000,000 2,000,000
Common stock- $5.00 par value
September 30, September 30, December 31,
No. of Shares 1995 1994 1994
Authorized 15,000,000 15,000,000 15,000,000
Issued 6,526,227 6,526,227 6,526,227
Outstanding 6,526,227 6,496,959 6,504,876 32,631,135 32,631,135 32,631,135
Surplus - - -
Retained earnings 12,964,991 9,379,189 10,149,027
Unrealized loss on securities available for sale, net of tax ( 60,062) ( 2,782,155) ( 4,403,568)
Less: Treasury stock, (29,268 shares at cost,
September 30, 1994, and 21,351 shares
at cost, December 31, 1994) - ( 208,778) ( 149,762)
- ------------------------------------------------------------------------------------------------------------------------------
Stockholders' equity $59,786,064 $53,269,391 $52,476,832
- ------------------------------------------------------------------------------------------------------------------------------
Total liabilities & stockholders' equity $648,154,612 $599,154,069 $620,503,737
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Consolidated Statements of Earnings
- -----------------------------------------------------------------------------------------------------------------------------------
Nine Months Ended Three Months Ended
September 30, September 30,
1995 1994 1995 1994
Interest income
<S> <C> <C> <C> <C>
Interest & fees on loans $20,510,628 $17,620,563 $7,208,780 $5,794,600
Interest & dividends on investment securities:
Taxable 10,588,245 7,095,935 3,630,257 2,877,363
Exempt from federal income tax 1,697,520 1,714,937 584,631 619,049
Other interest income 208,081 452,912 56,846 135,054
- -----------------------------------------------------------------------------------------------------------------------------------
Interest income 33,004,474 26,884,347 11,480,514 9,426,066
- -----------------------------------------------------------------------------------------------------------------------------------
Interest expense
Interest on deposits 14,662,365 9,647,262 5,148,785 3,403,224
Interest on short-term borrowings 1,771,262 1,125,152 598,353 421,113
- -----------------------------------------------------------------------------------------------------------------------------------
Interest expense 16,433,627 10,772,414 5,747,138 3,824,337
- -----------------------------------------------------------------------------------------------------------------------------------
Net interest income 16,570,847 16,111,933 5,733,376 5,601,729
Provision for possible loan losses 436,000 125,000 334,000 100,000
- -----------------------------------------------------------------------------------------------------------------------------------
Net interest income after provision
for possible loan losses 16,134,847 15,986,933 5,399,376 5,501,729
- -----------------------------------------------------------------------------------------------------------------------------------
Other income
Trust fees 1,932,910 1,792,374 646,934 577,458
Service charges on deposits 1,492,086 1,392,951 490,525 455,483
Net gains on loans sold to secondary market 138,277 235,824 78,337 32,013
Investment securities gains, net 360,729 33,284 300,456 26,288
Other operating income 1,468,629 1,682,291 613,626 519,603
- -----------------------------------------------------------------------------------------------------------------------------------
Other income 5,392,631 5,136,724 2,129,878 1,610,845
- -----------------------------------------------------------------------------------------------------------------------------------
Other expenses
Salaries 6,120,699 5,778,809 2,076,910 1,956,218
Pension, profit sharing, & other employee benefits 921,251 1,015,025 261,171 328,139
Net occupancy of bank premises 1,602,978 1,506,809 551,291 499,748
Furniture & equipment 821,645 808,529 262,191 252,142
Federal deposit insurance premiums 533,850 880,099 ( 27,698) 281,440
Amortization of excess cost over fair value
of net assets acquired 1,194,325 1,194,325 398,109 398,109
Other 3,724,359 3,670,913 1,188,152 1,084,246
- -----------------------------------------------------------------------------------------------------------------------------------
Other expense 14,919,107 14,854,509 4,710,126 4,800,042
- -----------------------------------------------------------------------------------------------------------------------------------
Earnings before income taxes 6,608,371 6,269,148 2,819,128 2,312,532
Applicable income taxes 1,982,214 1,908,828 866,197 697,635
- -----------------------------------------------------------------------------------------------------------------------------------
Net earnings $4,626,157 $4,360,320 $1,952,931 $1,614,897
===================================================================================================================================
Earnings per share:
Average weighted shares outstanding 6,688,306 6,633,096 6,688,037 6,636,783
Net earnings $.57 $.52 $.25 $.20
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
Nine months ended September 30, 1995 and 1994
1995 1994
------ ------
Cash flows from operating activities:
<S> <C> <C>
Net earnings $4,626,157 $4,360,320
Adjustments to reconcile net earnings
to net cash from operating activities:
Amortization net, related to:
Investment securities 984,950 1,443,407
Excess of cost over net assets acquired 1,194,325 1,194,325
Other 264,320 173,858
Depreciation 832,623 862,072
Provision for possible loan losses 436,000 125,000
Gain on sale related to:
Investment securities ( 360,729) ( 33,284)
Loans sold to secondary market ( 138,277) ( 235,824)
Change in:
Securities available for sale - ( 61,473,430)
Trading account ( 992,813) -
Accrued interest receivable ( 2,172,124) ( 1,393,530)
Other assets ( 365,304) ( 97,803)
Accrued taxes & other expenses 2,779,834 ( 1,184,336)
Other liabilities ( 2,204,314) ( 335,202)
- --------------------------------------------------------------------------------------------------------------------
Net cash from operating activities 4,884,648 ( 56,594,427)
- --------------------------------------------------------------------------------------------------------------------
Cash flows from investing activities:
Purchase of securities held-to-maturity ( 6,821,689) ( 9,439,020)
Purchase of securities available for sale (125,229,574) -
Proceeds from:
Maturities of securities held-to-maturity 4,271,117 3,435,722
Sales of securities available for sale 97,909,942 -
Maturities of securities available for sale 25,041,943 -
Net (increase) decrease in loans ( 33,188,726) 54,004,086
Purchase of bank premises & equipment ( 685,998) ( 143,231)
- --------------------------------------------------------------------------------------------------------------------
Net cash from investing activities ( 38,702,985) 47,857,557
- --------------------------------------------------------------------------------------------------------------------
Cash flows from financing activities:
Net increase (decrease) in:
Deposits 9,491,983 ( 10,346,971)
Securities sold under agreements to repurchase 2,021,576 ( 4,380,984)
Short term borrowings 6,015,000 6,885,000
Reissuance of treasury stock 149,762 -
Exercised stock options - 19,000
Redemption of Series C preferred stock - ( 1,950,000)
Cash dividends paid ( 1,808,419) ( 1,793,812)
- --------------------------------------------------------------------------------------------------------------------
Net cash from financing activities 15,869,902 ( 11,567,767)
- --------------------------------------------------------------------------------------------------------------------
Increase (decrease) in cash and cash equivalents ( 17,948,435) ( 20,304,637)
Cash and cash equivalents, beginning of year 45,870,359 56,355,534
- --------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, nine months
ended September 30, 1995 and 1994 $27,921,924 $36,050,897
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 27,713,803
<INT-BEARING-DEPOSITS> 208,121
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 992,813
<INVESTMENTS-HELD-FOR-SALE> 216,188,458
<INVESTMENTS-CARRYING> 43,074,776
<INVESTMENTS-MARKET> 43,752,000
<LOANS> 317,614,773
<ALLOWANCE> ( 3,888,324)
<TOTAL-ASSETS> 648,154,612
<DEPOSITS> 533,185,386
<SHORT-TERM> 32,200,000
<LIABILITIES-OTHER> 22,983,162
<LONG-TERM> 0
<COMMON> 32,631,135
0
14,250,000
<OTHER-SE> 12,904,929
<TOTAL-LIABILITIES-AND-EQUITY> 648,154,612
<INTEREST-LOAN> 20,510,628
<INTEREST-INVEST> 12,285,765
<INTEREST-OTHER> 208,081
<INTEREST-TOTAL> 33,004,474
<INTEREST-DEPOSIT> 14,662,365
<INTEREST-EXPENSE> 16,433,627
<INTEREST-INCOME-NET> 16,570,847
<LOAN-LOSSES> 436,000
<SECURITIES-GAINS> 360,729
<EXPENSE-OTHER> 14,919,107
<INCOME-PRETAX> 6,608,371
<INCOME-PRE-EXTRAORDINARY> 4,626,157
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,626,157
<EPS-PRIMARY> .57
<EPS-DILUTED> .57
<YIELD-ACTUAL> 4.19
<LOANS-NON> 2,957,122
<LOANS-PAST> 1,092,799
<LOANS-TROUBLED> 83,107
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,688,386
<CHARGE-OFFS> 977,951
<RECOVERIES> 741,889
<ALLOWANCE-CLOSE> 3,888,324
<ALLOWANCE-DOMESTIC> 2,837,324
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 1,051,000
</TABLE>
