FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended Commission file number 1-6580
March 31, 1995
FIRST VIRGINIA BANKS, INC.
(Exact name of registrant as specified in its charter)
Virginia 54-0497561
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
6400 Arlington Boulevard
Falls Church, Virginia 22042-2336
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code
(703) 241-4000
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, and (2) has been subject to
such filing requirements for the past 90 days. Yes __X__ No_____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the latest practicable date.
On April 28, 1995, there were 33,962,461 shares of common
stock outstanding.
This report contains a total of 20 pages.
1
<PAGE>
INDEX
Page
---------
PART I - Financial Information
Item 1. Financial Statements.
Consolidated Balance Sheets - March 31,
1995 and 1994 and December 31, 1994 3/ 4
Consolidated Statements of Income - Three
months ended March 31, 1995 and 1994 5/ 6
Consolidated Statements of Cash Flows - Three
months ended March 31, 1995 and 1994 7
Consolidated Statements of Shareholders'
Equity - Three months ended March 31, 1995
and 1994 8
Notes to Consolidated Financial Statements 8/10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10/15
PART II - Other Information
Item 6. Exhibits and Reports on Form 8-K
Signature 16
Exhibit 11 - Statement re: Computation of
Per Share Earnings 17
Exhibit 15 - Independent Accountants' Review
Report from Ernst & Young LLP 18
Exhibit 15A - Letter of Acknowledgement from
Ernst & Young LLP, Independent Accountants 19
Exhibit 27 - Financial Data Schedule as of
March 31, 1995 and the Three months
ended March 31, 1995 20
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS (Unaudited)
March 31 December 31 March 31
1995 1994 1994
---------- ---------- ----------
(In thousands)
ASSETS
Cash and noninterest-bearing
deposits in banks $ 349,833 $ 420,742 $ 284,633
Federal funds sold and securities purchased
under agreements to resell 345,119 30,000 255,000
---------- ---------- ----------
Total cash and cash equivalents 694,952 450,742 539,633
---------- ---------- ----------
Mortgage loans held for sale 14,297 13,291 41,186
Investment securities - held to maturity:
U.S. Government & its agencies 1,656,527 1,785,837 1,897,625
State and municipal obligations 256,792 280,817 259,978
Other 3,282 19,376 2,779
---------- ---------- ----------
Total investment securities (market
values of $1,890,360, $2,032,148
and $2,164,184) 1,916,601 2,086,030 2,160,382
---------- ---------- ----------
Loans 5,272,499 5,352,504 4,486,188
Deduct: Unearned income (347,945) (355,310) (336,326)
Allowance for loan losses (57,289) (58,860) (50,312)
---------- ---------- ----------
Net loans 4,867,265 4,938,334 4,099,550
---------- ---------- ----------
Other interest-earning assets 9,187 8,987 6,263
Premises and equipment 155,914 156,051 139,948
Other assets 203,535 211,947 130,246
---------- ---------- ----------
Total Assets $7,861,751 $7,865,382 $7,117,208
========== ========== ==========
3
<PAGE>
CONSOLIDATED BALANCE SHEETS (Continued) (Unaudited)
March 31 December 31 March 31
1995 1994 1994
---------- ---------- ----------
(In thousands)
LIABILITIES
Deposits:
Noninterest-bearing $1,160,107 $1,234,060 $1,039,564
Interest-bearing:
Transaction accounts 1,327,856 1,391,978 1,302,273
Money market accounts 718,709 761,160 730,801
Savings deposits 1,289,754 1,402,889 1,357,558
Certificates of deposit:
Consumer 1,993,920 1,820,274 1,570,705
Large denomination 265,557 205,480 161,689
---------- ---------- ----------
Total deposits 6,755,903 6,815,841 6,162,590
Interest, taxes and other liabilities 72,592 59,430 70,808
Short-term borrowings and securities sold under
agreements to repurchase 206,603 179,409 169,981
Mortgage indebtedness 851 963 975
Other long-term indebtedness 2,633 2,851 3,477
---------- ---------- ----------
Total Liabilities 7,038,582 7,058,494 6,407,831
---------- ---------- ----------
SHAREHOLDERS' EQUITY
Preferred stock, $10 par value 735 746 796
Common stock, $1 par value 34,067 34,050 32,424
Capital Surplus 111,516 111,184 67,559
Retained Earnings 676,851 660,908 608,598
---------- ---------- ----------
Total Shareholders' Equity 823,169 806,888 709,377
---------- ---------- ----------
Total Liabilities and Shareholders' Equity $7,861,751 $7,865,382 $7,117,208
========== ========== ==========
See notes to consolidated financial statements
4
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Three Months Ended
March 31
1995 1994
-------- -------
(In thousands, except per share data)
Interest income:
Interest and fees on loans $107,025 $87,765
Interest on mortgage loans
held for sale 256 834
Income on investment
securities - held to maturity:
U.S. Government & its agencies 24,904 29,044
State and municipal
obligations 3,302 3,149
Other 131 172
Income from federal funds sold
and securities purchased
under agreements to resell 2,633 1,870
Income on other interest-
earning assets 144 94
------- -------
Total interest income 138,395 122,928
------- -------
Interest expense:
Deposits:
Transaction accounts 7,252 7,172
Money market accounts 5,694 4,532
Savings deposits 9,056 9,006
Certificates of deposit:
Consumer 21,614 15,093
Large denomination 2,958 1,483
Short-term borrowings 2,339 1,031
Long-term indebtedness 89 129
------- -------
Total interest expense 49,002 38,446
------- -------
Net interest income 89,393 84,482
Provision for loan losses 332 461
------- -------
Net interest income after provision
for loan losses 89,061 84,021
------- -------
5
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME (Continued) (Unaudited)
Three Months Ended
March 31
1995 1994
------- -------
(In thousands, except per share data)
Net interest income after provision
for loan losses 89,061 84,021
------- -------
Other income:
Service charges on deposit
accounts 9,519 8,905
Insurance premiums and
commissions 1,830 1,632
Credit card service charges
and fees 2,657 2,548
Trust services 1,669 1,226
Income from other customer
services 4,184 3,947
Securities gains before
an income tax provision
of $341 in 1994 - 974
Other 579 1,793
------- -------
Total other income 20,438 21,025
------- -------
Other expenses:
Salaries and employee benefits 37,845 34,697
Occupancy 5,376 4,837
Equipment 5,075 4,856
FDIC assessment 3,802 3,397
Other 16,680 14,516
------- -------
Total other expenses 68,778 62,303
------- -------
Income before income taxes 40,721 42,743
Provision for income taxes 13,523 13,927
------- -------
NET INCOME $27,198 $28,816
======= =======
Net income per share of common stock $.80 $.89
Average primary shares of common
stock outstanding 34,136 32,537
See notes to consolidated financial statements
6
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three Months Ended
March 31
1995 1994
-------- --------
(In thousands)
Net cash provided by operating activities $ 40,667 $ 29,362
Investing activities:
Proceeds from the maturity of investment securities 238,300 164,635
Proceeds from the sale of investment securities - 1,806
Purchase of investment securities (69,967) (159,849)
Net (increase) decrease in loans 70,799 (132,746)
Net (increase) decrease in mortgages held for sale (1,006) 27,987
Net increase in other earning assets (200) -
Purchases of premises and equipment (3,302) (6,609)
Sales of premises and equipment 167 804
Other 11,556 16,286
-------- --------
Net cash (used for) provided by
investing activities 246,347 (87,686)
-------- --------
Financing activities:
Net increase (decrease) in deposits (59,939) 26,201
Net increase in short-term borrowings 27,194 18,122
Proceeds from long-term borrowing - 3,722
Principal payments on long-term borrowings (329) (278)
Cash dividends - common, $.33 and $.31 per share (10,051) (10,057)
Cash dividends - preferred (13) (13)
Stock purchased and retired - (1,093)
Proceeds from issuance of common stock 334 217
-------- --------
Net cash (used for) provided by
financing activities (42,804) 36,821
-------- --------
Net increase (decrease) in cash and
cash equivalents 244,210 (21,503)
Cash and cash equivalents at beginning of year 450,742 561,136
-------- --------
Cash and cash equivalents at end of period $694,952 $539,633
======== ========
See notes to consolidated financial statements
7
<PAGE>
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)
Three Months Ended
March 31
1995 1994
-------- --------
(In thousands)
Balance at beginning of year $806,888 $691,501
Net income 27,198 28,816
Common stock purchased and retired - (1,093)
Issuance of common stock for the dividend reinvestment
plan, stock options and stock appreciation rights 337 217
-------- --------
834,423 719,441
-------- --------
Deduct dividends declared:
Preferred stock 12 13
Common stock, $.33 and $.31 per share 11,242 10,051
-------- --------
11,254 10,064
-------- --------
Balance at end of period $823,169 $709,377
======== ========
See notes to consolidated financial statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL
The foregoing unaudited consolidated financial statements include the
accounts of the Corporation and all of its subsidiaries. The Corporation's
subsidiaries are predominantly engaged in banking. Foreign banking activities
and operations other than banking are not significant. All material
intercompany transactions and accounts have been eliminated. The consolidated
financial statements include all adjustments (consisting only of normal
recurring accruals) which, in the opinion of management, are necessary for a
fair presentation of the results of operations for each of the periods. Certain
amounts previously reported in 1994 have been reclassified for comparative
purposes.
8
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. ALLOWANCE FOR LOAN LOSSES
Activity in the allowance for loan losses was (in thousands):
Three Months Ended
March 31
1995 1994
------- -------
Balance at beginning of period $58,860 $50,927
Provision charged to operating
expense 332 461
------- -------
59,192 51,388
Less:
Loans charged off, net of
recoveries of $914 and $988 1,903 1,076
------- -------
Balance at March 31 $57,289 $50,312
======= =======
Percentage of net charge-offs to
average loans .15% .11%
Percentage of allowance for loan
losses to period-end loans 1.16 1.21
Percentage of nonperforming assets
to period-end loans .60 .64
3. FEDERAL INCOME TAX
The reconciliation of income tax computed at the federal statutory tax
rates to provision for income tax is as follows (dollars in thousands):
Three Months Ended
March 31
1995 1994
------------- -------------
Amount Percent Amount Percent
------- ----- ------- -----
Statutory rate $14,252 35.0% $14,960 35.0%
Nontaxable interest on
municipal obligations (1,297)(3.2) (1,333)(3.1)
Other items 568 1.4 300 0.7
------- ---- ------- ----
Effective rate $13,523 33.2% $13,927 32.6%
======= ==== ======= ====
9
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
4. PREFERRED STOCK
There are 3,000,000 shares of preferred stock, par value $10.00 per
share, authorized. The following four series of cumulative convertible stock
were outstanding:
March 31 December 31 March 31
Series Dividends 1995 1994 1994
--------- --------- -------- ----------- --------
A 5% 23,434 23,721 24,482
B 7% 9,100 9,300 9,590
C 7% 10,484 10,484 13,964
D 8% 30,483 31,083 31,582
------ ------ ------
73,501 74,588 79,618
====== ====== ======
5. COMMON STOCK
There are 60,000,000 shares of common stock, par value $1.00 per share,
authorized and 34,067,000, 34,050,000 and 32,424,000 shares were outstanding
at March 31, 1995, December 31, 1994 and March 31, 1994, respectively.
Options to purchase 285,200 shares of common stock and 5,000 stock
appreciation rights were outstanding on March 31, 1995. A total of 678,808
shares of common stock were reserved at March 31, 1995: 107,108 shares for
the conversion of preferred stock and 571,700 shares for stock options and
stock appreciation rights.
6. EARNINGS PER SHARE
Earnings per share of common stock for the three months ended March 31,
after giving effect to dividends on preferred stock of $12,000 in 1995 and
$13,000 in 1994, are based on 34,136,000 and 32,537,000 average shares
respectively.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
First quarter earnings of $27,198,000 declined 5.6% from the $28,816,000
earned in the first quarter of 1994. Due to a greater number of shares
outstanding as a result of two acquisitions in 1994, earnings per share
declined by 10.1% to $.80 compared to the $.89 earned in the first quarter of
1994. The assets of these two acquisitions represent approximately 11% of
total consolidated assets. Both of these acquisitions were accounted for as
purchases, and as a result, the prior year's quarterly figures have not been
restated to include any amounts in either the income statement or balance
sheet.
10
<PAGE>
Despite the decline in net income, First Virginia remains one of the most
profitable banking institutions in the country. Return on average assets of
1.41% in the first quarter equalled the average for First Virginia over the
past 10 years but was below the 1.64% earned in the first quarter of 1994.
Return on equity of 13.35% declined from the prior year's first quarter
return of 16.47% due in part to the lower earnings but also because of the
increase in the Corporation's capital. At March 31, 1995, the Corporation's
ratio of equity to assets was 10.47% compared to 9.97% in the prior year's
first quarter.
The first quarter is traditionally the Corporation's weakest quarter as
deposit volumes decline following the Christmas season and consumers repay
debt incurred during the holidays. In addition, automobile sales and home
equity lending are at their seasonal lows at this time. In 1995, this
traditionally weak period was exacerbated by increases in interest rates
engineered by the Federal Reserve in an attempt to slow down the growth in
the economy and control inflation. These efforts by the Federal Reserve
resulted in decreases in automobile and home sales and in loans made by First
Virginia to fund these sales. In addition, the increase in interest rates
increased competition for funds, particularly from nonbank users of funds,
and as a result, deposits declined by a greater than normal rate. In order to
maintain its deposit base, the Corporation increased the interest rate on
consumer certificates of deposit. This increased the Corporation's cost of
funds and had a negative impact on the net interest margin.
Average deposits increased 9.3% compared to the first quarter of 1994, but
if the deposits of the newly acquired banks are excluded, deposits declined
1.4%. By the end of the quarter however, deposits had begun to increase and
had regained most of their decline from December 31, 1994. There was a
pronounced shift in consumers' deposit preferences during the quarter out of
the more liquid and lower-cost areas and into higher-cost certificates of
deposit as consumers took advantage of the higher rates. Relatively higher-
cost certificates of deposit increased to 28.5% of all deposits from 25.9% in
the prior year's first quarter while lower-cost areas such as transaction
accounts, money market accounts and consumer savings, all posted declines as
a percentage of deposits. Consumer savings accounts had enjoyed a large
increase in the preceding four years as consumers showed a preference for
liquidity while rates were low. As rates have increased, consumers have begun
pulling funds out of these savings accounts and committing them for longer
periods in the higher-yielding certificates of deposit.
Loan volumes were also weak during the quarter as all categories of loans
declined compared to December 31, 1994. Average loans increased 21.8%
compared to the prior year's first quarter and were up 7.0% compared to the
fourth quarter of 1994. However, if the loans acquired from the merger with
Farmers National Bancorp are excluded, average loans declined .4% compared to
the fourth quarter of 1994. Consumer loan production declined to its lowest
quarterly level in five years due to the reduced volume of automobile sales
in the Corporation's market area and lower home refinance activity. By the
end of the quarter, however, commercial loan activity had begun to
strengthen, and the increased liquidity brought about by the renewal of
deposit growth, permitted the Corporation to become more aggressive in
pursuing high-quality consumer loans.
The net interest margin declined 16 basis points to 5.12% compared to the
prior year's first quarter as the cost of funds increased at a faster pace
than the yield on earning assets. Due to the shifting of deposits into
higher-cost areas such as certificates of deposit, the cost of funds
increased 51 basis points. The heightened competition for funds from
nonbanking sources and from banks in the Corporation's market area increased
11
the cost of certificates of deposit by 74 basis points to 4.61% and will most
likely increase in the next quarter as well. The yield on earning assets
increased by a lesser rate of 26 basis points as the yield on loans advanced
by a modest 7 basis points. The yield on investment securities declined
slightly as the Corporation continued to permit its investment portfolio to
mature without reinvestment in order to provide liquidity required by the
drop in deposits.
Asset quality remains high as net charge-offs averaged .15% of loans
compared to .11% in the prior year's first quarter and the average of .26% in
the past five years. The reserve for loan losses was 1.16% at March 31, 1995.
and covered annualized net charge-offs 7.5 times. Nonperforming assets
increased $3.3 million compared to the prior year's first quarter; however,
this was due entirely to the acquisition of the two new banks since March 31
1994. As a percentage of outstanding loans, nonperforming assets declined 4
basis points from .64% to .60% as of March 31, 1995. Loan delinquencies also
remain at historic lows as loans past due 30 days or more declined 2 basis
points to .36% compared to a year ago while loans past due 90 days or more
increased by 1 basis point to .10%. Nonperforming assets and loans past due
90 days or more as of March 31, 1995 and 1994, were (in thousands):
1995 1994
------- -------
(Dollars in thousands)
Nonaccruing loans $17,681 $17,553
Restructured loans 4,202 2,268
Foreclosed real estate 7,880 6,661
------- -------
Total $29,763 $26,482
======= =======
Percentage of total loans .60% .64%
======= =======
Loans past due 90 days or more $ 4,803 $ 3,675
======= =======
Percentage of total loans .10% .09%
======= =======
The provision for loan losses decreased 28% to $332,000 compared to the
prior year's first quarter due to the decline in the volume of loans compared
to the end of the year.
Noninterest income declined 2.8% from the prior year's first quarter. In
1994, the Company recorded a gain of $974 thousand on the sale of securities.
All of the Company's investment portfolio is currently classified as held to
maturity. Other income declined $1.2 million due primarily to a decline in
mortgage loan origination fees as the volume of loans originated by the
Company's mortgage lending subsidiary slowed significantly from the record
volumes achieved in 1993 and early 1994. Due to the weakness in transaction
account activity, service charges on deposit accounts increased only 6.9%
despite the inclusion of balances from the newly acquired banks in 1995.
Noninterest expenses increased 10.4% in the first quarter but excluding the
expenses of the two newly acquired banks, were up only 1.5% which was less
than the rate of inflation. Amortization of intangibles increased $1.1
million due to the amortization of goodwill and core deposit premium in
connection with the two banks acquired in 1994. The Corporation's efficiency
ratio of 61% for the first three months of 1995 was down slightly compared to
1994.
The Corporation's provision for income taxes declined 2.9% compared to the
previous year's first quarter, which was less than the decline in net income
due to an increase in nondeductible goodwill and core deposit premium
12
amortization. The Corporation's effective tax rate was 33.21% in the first
quarter of 1995 compared to 32.58% in the 1994 first quarter.
Shareholders' equity grew 16% to $823 million compared to March 31, 1994,
and the ratio of equity to assets increased to 10.47% from 9.97%. A slowdown
in asset growth and continued high earnings were responsible for the growth
in capital. During 1994, the Corporation repurchased approximately 5%, or 1.7
million shares of its outstanding stock. There are approximately 1.0 million
shares currently authorized by the Board of Directors to be repurchased, and
it is the intention of the Company to purchase these shares as market
conditions permit. During the first quarter, no shares were repurchased under
this program. The Corporation remains one of the most well-capitalized banks
among the 100 largest banks in the country. Book value per share of common
stock increased 10.5% to $24.14 compared to its value on March 31, 1994.
13
<PAGE>
AVERAGE BALANCES AND INTEREST RATES (Unaudited)
(Dollar amounts in thousands)
Three Months Ended March 31
1995
------------------------------
Interest
Average Income/
Balance Expense Rate
---------- --------- -------
Interest-earning assets:
Investment securities-held to maturity:
U.S. Government & its agencies $1,686,895 $ 24,904 5.98%
State and municipal obligations
(Fully taxable-equivalent basis) 263,758 4,695 7.12
Other (Fully taxable-equivalent basis) 8,337 131 6.29
---------- --------
Total investment securities 1,958,990 29,730 6.27
---------- --------
Loans, net of unearned income:
Installment 3,283,629 69,864 8.52
Real estate 908,376 20,187 7.89
Other (Fully taxable-equivalent basis) 744,246 17,568 9.54
---------- --------
Total loans 4,936,251 107,619 8.76
---------- --------
Mortgage loans held for sale 12,021 256 8.52
Federal funds sold and securities
purchased under agreements to resell 181,047 2,633 5.90
Other interest-earning assets 9,024 160 7.07
---------- --------
Total earning assets and income $7,097,333 140,398 7.93
========== --------
Interest-bearing liabilities:
Transaction accounts $1,340,525 7,253 2.19
Money-market accounts 740,364 5,694 3.12
Savings deposits 1,325,904 9,056 2.77
Certificates of deposit:
Consumer 1,901,997 21,613 4.61
Large denomination 246,302 2,958 4.87
---------- --------
Total interest-bearing deposits 5,555,092 46,574 3.40
Short-term borrowings 188,500 2,339 5.03
Notes and mortgages 3,658 89 9.72
---------- --------
Total interest-bearing liabilities
and interest expense $5,747,250 49,002 3.47
========== --------
Net interest income and net interest margin $ 91,396 5.12%
========
Other average balances:
Demand deposits $1,125,703
Common shareholders' equity 814,176
Total shareholders' equity 814,917
Total assets 7,742,540
14
<PAGE>
AVERAGE BALANCES AND INTEREST RATES (Unaudited)
(Dollar amounts in thousands)
Three Months Ended March 31
1994
------------------------------
Interest
Average Income/
Balance Expense Rate
---------- --------- -------
Interest-earning assets:
Investment securities-held to maturity:
U.S. Government & its agencies $1,911,790 $ 29,044 6.16%
State and municipal obligations
(Fully taxable-equivalent basis) 242,084 4,500 7.44
Other (Fully taxable-equivalent basis) 13,556 168 4.96
---------- --------
Total investment securities 2,167,430 33,712 6.29
---------- --------
Loans, net of unearned income:
Installment 2,855,558 62,769 8.80
Real estate 620,314 13,963 9.00
Other (Fully taxable-equivalent basis) 576,931 11,076 7.79
---------- --------
Total loans 4,052,803 87,808 8.69
---------- --------
Mortgage loans held for sale 52,099 834 6.40
Federal funds sold and securities
purchased under agreements to resell 236,454 1,870 3.21
Other interest-earning assets 6,263 94 6.00
---------- --------
Total earning assets and income $6,515,049 124,318 7.67
========== --------
Interest-bearing liabilities:
Transaction accounts $1,290,755 7,172 2.25
Money-market accounts 723,447 4,532 2.54
Savings deposits 1,334,699 9,006 2.74
Certificates of deposit:
Consumer 1,580,107 15,093 3.87
Large denomination 163,734 1,483 3.67
---------- --------
Total interest-bearing deposits 5,092,742 37,286 2.97
Short-term borrowings 163,424 1,031 2.56
Notes and mortgages 3,824 129 13.45
---------- --------
Total interest-bearing liabilities
and interest expense $5,259,990 38,446 2.96
========== --------
Net interest income and net interest margin $ 85,872 5.28%
========
Other average balances:
Demand deposits $1,018,954
Common shareholders' equity 699,056
Total shareholders' equity 699,858
Total assets 7,040,625
15
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8 - K
----------------------------------
a) Exhibit 11 - Statement re: Computation of Per Share
Earnings (Page 17)
Exhibit 15 - Independent Accountants' Review Report
from Ernst & Young LLP (Page 18)
Exhibit 15A - Letter of Acknowledgement from
Ernst & Young LLP, Independent Accountants (Page 19)
Exhibit 27 - Financial Data Schedule (Page 20)
b) A Form 8-K was not required to be filed during the quarter
ended March 31, 1995.
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 its
principal financial officer thereunto duly authorized.
FIRST VIRGINIA BANKS, INC.
/s/ Richard F. Bowman
May 8, 1995 __________________________
Richard F. Bowman,
Senior Vice President
and Treasurer
16
<PAGE>
EXHIBIT 11
FIRST VIRGINIA BANKS, INC.
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
(Unaudited)
Three Months Ended
March 31
1995 1994
------- -------
(In thousands, except per share data)
PRIMARY:
Average common shares outstanding 34,057 32,438
Dilutive effect of stock options 79 99
------- -------
Total average common shares 34,136 32,537
======= =======
Net income $27,198 $28,816
Provision for preferred dividends 12 13
------- -------
Net income applicable to common
stock $27,186 $28,803
======= =======
Net income per share of common
stock $.80 $.89
======= =======
FULLY DILUTED:
Average common shares outstanding 34,057 32,438
Dilutive effect of stock options 82 99
Conversion of preferred stock 107 115
------- -------
Total average common shares 34,246 32,652
======= =======
Net income $27,198 $28,816
======= =======
Net income per share of common
stock $.79 $.88
======= =======
17
<PAGE>
EXHIBIT 15
ERNST & YOUNG LLP
1225 Connecticut Avenue, N.W.
Washington, D.C. 20036
Independent Accountants' Review Report
Board of Directors
First Virginia Banks, Inc.
We have reviewed the accompanying consolidated balance sheets of First
Virginia Banks, Inc. and subsidiaries as of March 31, 1995 and 1994, and
the related consolidated statements of income, cash flows and shareholders'
equity for the three-month periods than ended March 31, 1995 and 1994.
These financial statements are the responsibility of the Corporation's
management.
We conducted our reviews in accordance with standards established by
the American Institute of Certified Public Accountants. A review of
interim financial information consists principally of applying
analytical procedures to financial data, and making inquiries of
persons responsible for financial and accounting matters. It is
substantially less in scope than an audit conducted in accordance with
generally accepted auditing standards, which will be performed for the
full year with the objective of expressing an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express
such an opinion.
Based on our reviews, we are not aware of any material modifications
that should be made to the accompanying consolidated financial
statements referred to above for them to be in conformity with
generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet of First Virginia
Banks, Inc. and subsidiaries as of December 31, 1994, and the related
consolidated statements of income, shareholders' equity, and cash flows
for the year then ended (not presented herein) and in our report dated
January 17, 1995, we expressed an unqualified opinion on those
consolidated financial statements. In our opinion, the information set
forth in the accompanying consolidated balance sheet as of December 31,
1994, is fairly stated, in all material respects, in relation to the
consolidated balance sheet from which it has been derived.
/s/ Ernst & Young LLP
Washington, D. C.
April 7, 1995
18
<PAGE>
EXHIBIT 15A
ERNST & YOUNG LLP
1225 Connecticut Avenue, N.W.
Washington, D.C. 20036
May 8, 1995
Board of Directors
First Virginia Banks, Inc.
We are aware of the incorporation by reference in the Post-effective
Amendment No. 1 to Registration Statement Number 33-38024 on Form S-8
dated January 10, 1994, Registration Statement Number 33-51587 on Form S-3
dated December 20, 1993, Registration Statement Number 33-54802 on Form
S-8 dated November 20, 1992, Registration Statement Number 33-31890 on
form S-3 dated November 1, 1989, Post-effective Amendment Number 3 to
Registration Statement Number 2-67507 on Form S-3 dated January 7, 1988,
Post-effective Amendment Number 2 to Registration Statement Number 2-77151
on Form S-8 dated October 30, 1987, Registration Statement Number 33-17358
on Form S-8 dated September 28, 1987 and Registration Statement Number 33-
15360 on Form S-3 dated June 26, 1987 of our report dated April 7, 1995
relating to the unaudited consolidated interim financial statements of
First Virginia Banks, Inc. and subsidiaries which are included in its Form
10-Q for the quarter ended March 31, 1995.
Pursuant to Rule 436 (c) of the Securities Act of 1933, our report
is not a part of the registration statement prepared or certified by
accountants within the meaning of Section 7 or 11 of the Securities Act of
1933.
/s/ Ernst & Young LLP
19
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