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
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
_____________________to____________________
For Quarter Ended
Commission
file number 0-15729
PREMIER BANKSHARES CORPORATION
(Exact name of registrant as specified in its charter)
VIRGINIA 54-1377250
State or other jurisdiction of
(I. R. S. Employer)
incorporation or organization
Identification No.)
201 West Main Street
P. O. Box 928, Tazewell, VA 24651
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number including area code (703) 988-7145
988-
7511
_______________________________________________________________
(Former name, former address and former
fiscal
year, if changed since last report).
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 ___.
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of June 30, 1994.
Common stock, $2 par value - 4,405,127 shares.
INDEX
Page No.
Part I. Financial Information:
Item 1. Financial Statements
Consolidated Balance Sheets -
June 30, 1994 and December 31, 1993 3
Consolidated Statements of Income -
Three Months Ended
June 30, 1994 and 1993 4
Consolidated Statements of
Stockholders' Equity - Six Months
Ended June 30, 1994 and 1993 5
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1994 and 1993 6
Notes to Consolidated Financial Statements 7-9
Supplemental Financial Data (Tables I - III) 10-12
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 13-14
Part II. Other Information:
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of
Security Holders 15
Item 5. Other Information 15
Item 6.Exhibits and Reports on Form 8K 15
<TABLE>
ITEM 1. FINANCIAL INFORMATION:
PREMIER BANKSHARES CORPORATION AND AFFILIATES
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars)
<CAPTION>
June 30 December 31,
1994 1993
<S> <C> <C>
ASSETS:
Cash and Due From Banks 16553 12003
Interest-bearing Deposits in Banks 200 350
Securities Held to Maturity
(Approximate Market Value $81,391
in 1994, $530 in 1993) 84386 530
Securities Available for Sale
(Amortized Cost $159,164 1994) 153013
Securities Held for Sale (Approximate
Market Value $215,155 in 1993) 211045
Federal Funds Sold 9560 34665
Loans, Net of Unearned Income of $4,352 in
in 1994, $5,088 in 1993 and Allowance
for Loan Losses of $4,626 in 1994 and
$4,481 in 1993 292899 278922
Bank Premises and Equipment 9954 9782
Accrued Income Receivable 4793 4061
Other Assets 6618 6611
TOTAL ASSETS 577976 557969
LIABILITIES:
Deposits:
Demand 54570 45898
Interest-bearing Demand 53372 49886
Savings 162259 162267
Large Denomination Certificates
of Deposit 32728 36647
Other Time 198314 189457
TOTAL DEPOSITS 501243 484155
Short-term Debt 20299 15331
Other Liabilities 2707 4144
TOTAL LIABILITIES 524249 503630
SHAREHOLDERS' EQUITY:
Capital Stock-Common-$2 Par
10,000,000 Authorized; 4,405,127
Shares Issued; 1993 8810 8810
Surplus 21693 21693
Undivided Profits 27071 23943
Net Unrealized Loss on Securities (3847) (107)
TOTAL STOCKHOLDERS' EQUITY 53727 54339
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY 577976 557969
<FN>
Notes to financial statements are an integral part of these
statements.
</TABLE
</TABLE>
<TABLE>
PREMIER BANKSHARES CORPORATION AND AFFILIATES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands of Dollars)
<CAPTION>
Three Months Ended Six Months Ended
March 31, June 30,
1994 1993 1994 1993
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and Fees on Loans 6678 6518 13294 12882
Federal Funds Sold 173 220 370 389
Money Market Deposits 9 21 20 41
Interest on Investments Held to
Maturity, Taxable 358 690
Interest on Investments Held to
Maturity, Non-taxable 797 1517
Interest on Securities Available for
Sale, Taxable 2145 4144
Interest on Securities Available for
Sale, Non-taxable 118 241
Interest on Investment Securities,
Taxable 1994 3997
Interest on Investment Securities,
Non-taxable 716 1443
Trading Account Income 15 15
Total Interest Income 10278 9484 20276 18767
9998
INTEREST EXPENSE:
Demand Deposits 366 352 725 692
Savings Deposits 1358 1223 2804 2298
Large Denomination Certificates of
Deposit 385 383 765 781
Other Time Deposits 2062 2033 4088 4066
Short-term Debt 154 52 268 108
Long-term Debt 7 18
Total Interest Expense 4325 4050 8650 7963
Net Interest Income 5953 5434 11626 10904
ADDITION TO ALLOWANCE FOR LOAN AND
LEASE LOSSES 95 160 195 330
Net Interest Income After
Addition to Allowance for
Loan and Lease Losses 5858 5274 11431 10474
OTHER INCOME:
Service Charges on Deposit Accounts 464 416 869 766
Trust Department Income 38 40 76 139
Other Service Charges, Commissions
and Fees 311 354 624 632
Other Operating Income 58 93 135 201
Security Gains 10 879 682 976
Trading Account Security Gains
(Losses) 8 9
Total Other Income 881 1790 2386 2723
OTHER EXPENSES:
Salaries 1633 1560 3256 3025
Employee Benefits 459 378 922 796
Occupancy Expenses 191 204 388 400
Furniture and Equipment Expenses 195 184 427 351
Other Operating Expenses 1646 1491 3217 2895
Total Other Expense 4124 3817 8210 7467
Income Before Income Taxes 2615 3247 5607 5730
Applicable Income Taxes 629 902 1423 1098
Net Income 1986 2345 4184 4632
NET INCOME PER SHARE .45 .53 .95 1.05
CASH DIVIDENDS PER SHARE .12 .11 .24 .22
<FN>
The notes to financial statements are an integral part of these
statements.
</TABLE>
<TABLE>
PREMIER BANKSHARES CORPORATION AND AFFILIATES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In Thousands of Dollars)
<CAPTION>
Six Months Ended
June 30,
1994 1993
<S> <C> <C>
Balance at Beginning of Year 54339 47998
Net Income 4184 4632
Cash Dividends Declared (1056) (969)
Change in Valuation Allowance for Securities (3740) 1
Other (6)
Balance at End of Period 53,727 51656
<FN>
The notes to financial statements are an integral part of these
statements.
</TABLE>
<TABLE>
PREMIER BANKSHARES CORPORATION AND AFFILIATES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
<CAPTION>
Three Months Ended
March 31,
1994 1993
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income 4184 4632
Adjustments to Reconcile Net Income to Cash
Provided by Operating Activities:
Depreciation and Amortization of Premises
and Equipment 364 322
Provision for Loan Losses 195 330
Amortization of:
Goodwill and Intangibles 128 189
Premiums and Accretion of Discounts, Net 271 (89)
Sales of Securities Available for Sale 7403
Maturities of Securities Available for Sale 24823
Purchases of Securities Available for Sale (42610)
Sales of Securities Held for Sale 60172
Maturities of Securities Held for Sale 15265
Purchases of Securities Held for Sale (86236)
Securities Gains (682) (976)
Increase in Other Assets (871) (605)
Increase in Other Liabilities (1437) (259)
Net Cash Used In Operating Activities (8232) (7255)
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (Increase) Decrease in Temporary Investments 25255 (5809)
Maturities of Securities Held to Maturity 2829
Purchase of Securities Held to Maturity (21590)
Net Increase in Customer Loans (14172) (12750)
Premises and Equipment Expenditures (544) (559)
Sales of Premises and Equipment 4 18
Net Cash Used in Investing Activities
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Increase in Demand Deposits,
Now and Savings Accounts 12150 28609
Net Decrease in Time Deposits 4938 1207
Payments on Long-term Debt (776)
Net Increase (Decrease) in Short-term Debt 4968 (259)
Cash Dividends Paid (1056) (970)
Purchase of Capital Stock
Net Cash Provided by Financing Activities 21000 27811
Net Increase in Cash and Due from Banks 4550 1456
CASH AND DUE FROM BANKS:
Beginning 12003 13507
Ending 16553 14963
Supplemental Disclosures of Cash Flow Information:
Cash Payments for Interest Paid:
To Depositors 8493 7867
On Federal Funds Purchased and Securities Sold
Under Agreement to Repurchase 266 108
Income Taxes 1060 1678
<FN>
The notes to financial statements are an integral part of these
statements.
</TABLE>
PREMIER BANKSHARES CORPORATION AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. General
The consolidated statements include the accounts of Premier
and its
affiliates. All significant intercompany balances and
transactions have
been eliminated. In the opinion of management, the
accompanying unaudited
consolidated financial statements contain all adjustments
(consisting of
only normal recurring accruals) necessary to present fairly
the financial
positions as of June 30, 1994, and December 31, 1993, and
the results of
operations and cash flows for the six months ended June
30, 1994 and 1993.
The results of operations for the six months ended June
30, 1994, are not
necessarily indicative of the results to be expected for the
full year.
2. Investment Securities
Carrying amounts and fair values of securities being held to
maturity are
summarized as follows:
<TABLE>
<CAPTION>
June 30, 1994
Gross Gross Estimated
Amortized Unrealized UnrealizedMarket
Cost Gains Losses Value
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
U.S. Government Agencies
and Corporations 18385 1124 17261
Obligations of States
and Political
Subdivisions 64752 545 878 64419
Other Debt Securities 1249 19 1230
</TABLE>
<TABLE>
<CAPTION>
December 31, 1993
Gross Gross Estimated
Amortized Unrealized UnrealizedMarket
Unrealized Unrealized
Cost Gains Losses Value
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
Other Debt Securities 530 530
</TABLE>
<TABLE>
2. Investment Securities (continued)
Carrying amounts and fair value of securities available for sale
are summarized
as follows:
<CAPTION>
June 30, 1994
Gross Gross Estimated
Amoritized Unrealized Unrealized Market
Cost Gains Losses Value
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
U.S. Treasury Securities 12773 116 128 12761
U.S. Government Agencies
and Corporations 128073 58 5508 122623
Obligations of States and
Political Subdivisions 7919 65 7984
Corporate Securities 1096 42 1054
Morgage-backed
Securities 2376 64 2312
Marketable Equity 1596 156 1440
Other Debt Securities 4903 2 66 4839
158736 241 5964 153013
</TABLE>
<TABLE>
<CAPTION>
December 31, 1993
Gross Gross Estimated
Amoritized Unrealized Unrealized Market
Cost Gains Losses Value
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
U.S. Treasury Securities 5783 329 6112
U.S. Government Agencies and
Corporations 136288 1024 922 136390
Obligations of States and
Political Subdivisions 61406 3732 147 61390
Corporate Securities 302 4 3 303
Morgage-backed
Securities 2869 6 28 2847
Marketable Equity 1489 1489
Other Debt Securities 2908 115 3023
211045 5210 1100 215155
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended
June 30, 1994 June 30, 1993
(In Thousands of Dollars)
<S> <C> <C>
Proceeds From Sales 7403 60172
Gross Gains 682 991
Gross Losses 15
Net 682 976
</TABLE>
<TABLE>
PREMIER BANKSHARES CORPORATION AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
3. Loans
The following is a summary of loans outstanding at the end
of the periods indicated:
<CAPTION>
June 30 December 31,
1994 1993
<S> <C> <C>
Commercial, Financial, and Agricultural 58831 66654
Real Estate - Construction 6977 5178
Real Estate - Mortgage 161932 144709
Loans to Individuals 72742 70616
Others 1395 1334
301877 288491
Less Unearned Income (4352) (5088)
297525 283403
Less Allowance for Loan and Lease Losses (4626) (4481)
292899 278922
</TABLE>
<TABLE>
The following schedule summarizes the changes in the allowance
for loan and lease
losses:
<CAPTION>
June 30, June 30, December 31
1994 1993 1993
<S> <C> <C> <C>
Balance, Beginning 4481 4752 4752
Provision Charged Against Income 195 330 592
Recoveries 189 226 680
Loans Charged Off (239) (764) (1543)
Balance, Ending 4626 4544 4481
</TABLE>
<TABLE>
Nonperforming assets consist of the following:
<CAPTION>
June 30, December 31,
1994 1993
(In Thousands of Dollars)
<S> <C> <C>
Nonaccrual Loans 3123 3451
Restructured Loans 988 1128
Nonperforming Loans 4111 4579
Foreclosed Properties 728 1125
Nonperforming Assets 4839 5704
<FN>
Total loans past due 90 days or more and still accruing were
$1,114 on June 30, 1994 and $1,397 on December 31, 1993.
</TABLE>
<TABLE>
PREMIER BANKSHARES CORPORATION AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
4. Short-term Debt
Short-term debt consists of the following:
<CAPTION>
June 30, December 31,
1994 1993
(In Thousands of Dollars)
<S> <C> <C>
Federal Funds Purchased and Securities Sold
Under Agreements to Repurchase 20299 15271
Line of Credit Borrowing 60
Total Short-term Debt 20299 15331
</TABLE>
5. Long-term Debt
Premier Bankshares had no long-term debt outstanding for the
periods ended
June 30, 1994 or December 31, 1993.
6. Earnings Per Share
Earnings per share are computed on the weighted average
common shares
outstanding of 4,405,127 for both the three and six months ended June 30,
1994; and 4,405,129 and 4,405,186
for the three months ended June 30, 1993, respectively.
7. Capital Requirements
A comparison of the Company's capital as of June 30, 1994
with the minimum
requirements is presented below.
Minimum
Actual Requirements
Tier I Risk-based Capital 15.35% 4.00%
Total Risk-based Capital 16.60% 8.00%
Leverage Ratio 9.67% 3.00%
<TABLE>
TABLE I
Consolidated Selected Financial Data
(Amounts in thousands, except per share data)
<CAPTION>
1994
Second First
Quarter Quarter
<S> <C> <C>
Interest Income 10278 9998
Interest Expense 4325 4325
Net Interest Income 5953 5673
Provision for Loan Losses 95 100
Net Income 1986 2198
Per Share Data:
Net Income .45 .50
Cash Dividends Paid .12 .12
Total Average Stockholders' Equity 53690 53368
Total Average Assets 582658 568763
Ratios:
Average Stockholders' Equity
to Total Average Assets 9.21 9.38
Return on Average Equity 14.80 16.48
Return on Average Assets 1.36 1.55
</TABLE>
<TABLE>
<CAPTION>
1993
Fourth Third Second First
Quarter Quarte Quarter Quarter
<S> <C> <C> <C> <C>
Interest Income 9842 9718 9484 9283
Interest Expense 4422 4272 4050 3913
Net Interest Income 5420 5446 5434 5370
Provision for Loan Losses 157 105 160 170
Net Income 1697 2014 2345 2287
Per Share Data: Net Income .38 .46 .53 .52
Cash Dividends Paid .11 .11 .11 .11
Total Average Stockholders'
Equity 53610 52452 51093 48760
Total Average Assets 556875 533016 508534 488699
Ratios: Average Stockholders'
Equity to Total
Average Assets 9.63 9.84 10.05 9.98
Return on Average Equity 12.66 15.36 18.32 18.76
Return on Average Assets 1.22 1.51 1.84 1.87
</TABLE>
[TEXT]
TABLE II
DISTRIBUTION OF ASSETS, LIABILITIES, STOCKHOLDERS' EQUITY,
INTEREST RATES AND INTEREST DIFFERENTIAL
The following schedule presents the condensed consolidated
average balance sheets
and the average rates earned and paid by Premier and its
affiliates on a fully
taxable equivalent basis assuming a 34% tax rate for the six
months ended June
30, 1994 and 1993. Nonaccruing loans are included in the total
loans.
<TABLE>
<CAPTION>
1994 1993
Average Interest Yield/ Average Interest Yield/
Balance And Fees Rate Balance And Fees Rate
(In Thousands of Dollars) (In Thousands of Dollars)
<S> <C> <C> <C> <C> <C> <C>
Assets
Interest-earning Assets:
Loans and Leases 287199 13307 9.27 269701 12899 9.57
Taxable Investment
Securities 168410 4834 5.74 122412 4011 6.55
Nontaxable
Investment
Securities 66250 2664 8.04 48524 2186 9.01
Interest-bearing
Deposits with Other
Banks 410 20 9.76 864 41 9.49
Federal Funds Sold
and Securities
Purchased Under
Agreements to
Resell 21670 370 3.41 26603 389 2.92
Total
Interest-earning
Assets 543939 21195 7.79 468104 19526 8.34
Noninterest-earning Assets:
Cash and Noninterest-bearing
Deposits 15867 15287
Premises and Equipment,
Net 9829 9619
Other Assets 10668 10414
Less Allowance for
Loan and Lease
Losses (4592) (4808)
Total Assets 575711 498616
Liabilities and Stockholders' Equity
Interest-bearing Liabilities:
Demand Deposits 52617 725 2.76 44279 692 3.13
Savings Deposits 165707 2804 3.38 124197 2298 3.70
Large Denomination Certificates
of Deposit 34210 765 4.47 35480 781 4.40
Other Time
Deposits 193733 4088 4.22 183068 4066 4.44
Short-term
Borrowings 18870 268 2.84 8250 108 2.62
Long-term Debt 588 18 6.12
Total Interest-bearing
Liabilities 465137 8650 3.72 395862 7963 4.02
Noninterest-bearing Liabilities:
Demand Deposits 52628 48235
Other Liabilities 4417 4592
Stockholders'
Equity 53529 49927
Total
Liabilities
and
Stockholders'
Equity 575711 498616
Net Interest
Differential 4.07 4.32
Net Interest
Earnings 12545 11563
Net Yield on
Interest-earning
Assets 4.61 4.94
</TABLE>
<TABLE>
PREMIER BANKSHARES CORPORATION AND AFFILIATES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands of Dollars)
<CAPTION>
Three Months Ended Six Months Ended
June 30, 1994 and 1993 June 30, 1994 and 1993
(In Thousands of Dollars)
Amount Percent Amount Percent
<S> <C> <C> <C> <C>
INTEREST INCOME:
Interest and Fees on Loans 160 2.45 412 3.20
Federal Funds Sold (47) (21.36) (19) (4.88)
Money Market Deposits (12) (57.14) (21) (51.22)
Interest on Investments Held to
Maturity, Taxable 358 100.00 690 100.00
Interest on Investments Held to
Maturity, Non-taxable 792 100.00 1517 100.00
Interest on Securities
Available for Sale, Taxable 2145 100.00 4144 100.00
Interest on Securities
Available for Sale,
Non-taxable 118 100.00 241 100.00
Interest on Investment
Securities, Taxable (1994) (100.00) (3997) (100.00)
Interest on Investment
Securities, Non-taxable (716) (100.00) (1443) (100.00)
Trading Account Income (15) (100.00) (15) (100.00)
Total Interest Income 794 8.37 1509 8.04
INTEREST EXPENSE:
Demand Deposits 14 3.98 33 4.77
Savings Deposits 135 11.04 506 22.02
Large Denomination Certificates
of Deposit 2 .52 (16) (2.05)
Other Time Deposits 29 1.43 22 .54
Short-term Debt 102 196.15 160 148.15
Long-term Debt (7) (100.00) (18) (100.00)
Total Interest Expense 275 6.79 687 8.63
Net Interest Income 519 9.55 822 7.61
PROVISION FOR LOAN LOSSES (65) (40.63) (135) (40.91)
Net Interest Income After
Provision for Loan Losses 584 11.07 957 9.14
OTHER INCOME:
Service Charges on Deposit
Accounts 48 11.54 103 13.45
Trust Department Income (2) (5.00) (63) (45.32)
Other Service Charges,
Commissions and Fees (43) (12.15) (8) (1.27)
Other Operating Income (35) (37.63) (66) (32.84)
Security Gains (869) (98.86) (294) (30.12)
Trading Account Security Gains
(Losses) (8) (100.00) (9) (100.00)
Total Other Income (909) (50.78) (337) (12.38)
OTHER EXPENSES:
Salaries 73 4.68 231 7.64
Employee Benefits 81 21.43 126 15.83
Occupancy Expenses (13) (6.37) (12) (3.00)
Furniture and Equipment
Expenses 11 5.98 76 21.65
Other Operating Expenses 155 10.40 322 11.12
Total Other Expense 307 8.04 743 9.95
Income Before Income Taxes (632) (19.46) (123) (2.15)
Applicable Income Taxes (273) (30.27) 325 (29.60)
305.10
NET INCOME (359) (15.31) (448) (9.67)
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION:
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Premier's active non-bank subsidiary, Premier Bank Services Corporation,
because of the low volume of activity, discontinued servicing certain consumer
loans for selected affiliate Banks during the second quarter of 1993.
Preparations made during the latter half of 1993 to offer investment advisory
services to Premier banks as well as other financial institutions and investing
groups through this service corporation were also discontinued, and, the
corporation is no longer active.
EARNINGS PERFORMANCE
Net income for the first six months of 1994 was $4,184,000, a $448,000 or 9.67%
decrease over the $4,632,000 earned for the same period in 1993. The six months
earnings for both 1994 and 1993 include non-recurring adjustments to income.
One affiliate bank during the first quarter of 1994 disposed of bonds backed by
the failed Executive Life Insurance Company, which were in default and had
previously been written down, adding approximately $513,000 in security gains;
$339,000, net of the tax effect. First quarter 1993 reflected an approximate
$439,000 decrease in federal incom tax expense due to the implementation of
FASB 109 and the realization of tax benefits on a net loss carryforward which
could be recaptured following the 1991 merger of Bank of Speedwell and Bank of
Shawsville. Also, due to restructing of the investment portfolio, one
affiliate bank booked security gains of $656,000 during the second quarter of
1993. As a result, on a per share basis, net income for the fist six months of
1994 decreased to $0.95 compared to $1.05 for the same period in 1993, with
4,405,127 average shares outstanding for both the three and six months
outstanding for 1994; and 4,405,129 and 4,405,186 average shares outstanding
for 1993, respectively.
NET INTEREST INCOME
Net interest income, before provision for loan losses for the six months ended
June 30, 1994, amounted to $11,626,000, a $822,000, or 7.61% increase from
$10,804,000 recorded for the same period of 1993. The net interest
differential
for this period (the difference between the tax-equivalent yield on interest
bearing assets and the rate paid on interest-bearing liabilities) decreased 25
basis points to 4.07%. The tax-equivalent yield on earning assets decreased
from 8.34% in 1993 to 7.79% in 1994 while the rate paid on interest-bearing
liabilities) decreaded 25 basic points to 4.07%. The tax-equivalent yield on
earning assets decreased from 8.34% in 1993 to 7.79% in 1994 while the rate
paid on interest-bearing liabilities decreased 30 basis points to 3.72%.
The net yield (fully taxable equivalent) on earning assets decreased 33 basis
points in 1994 to 4.61% compared to 4.94% in 1993. Yields on loans,
nontaxable, and taxable investment securities decreased 30, 97, 81 basis
points, respectively, while the yields on interest-bearing deposits with banks
increased 27 basis points, along with an increase in fed funds sold of 49 basis
points. Adjustments to rates paid on interest-bearing deposits, savings, and
other time deposit rates decreasing 37,32, and 22 basis points, respectively.
The rate paid on short-term borrowings increased 22 basis points. Premier's
long-term debt was paid off in 1993.
OTHER INCOME AND EXPENSES
Total other income decreased $337,000 or 12.38% to $2,386,000 due mostly to a
decrease in security gains during 1994 of $294,000 to $682,000 compared to
$976,000 in the first half of 1993. As mentioned previously, the majority of
the 1994 security gains was from a $513,000 gain by one affiliate bank from
the sale of bonds which were in default and had been previously written down.
Other service charges, commissions and fees decreased $8,000 in 1994, the most
significant changes being a decrease in loan extension/other fees of $65,000
from 1993, and increase in loan collection fees and credit life and A & H sales
of $14,000 and $23,000, respecitvely, over 1993. Total service charges on
deposit accounts increased $103,000 with the majority of the increase in NSF and
returned check charges, attributable mostly to increased per-item fees. Fee
income from estate settlements account for the decrease of $63,000 in trust
department income in 1994.
OTHER INCOME AND EXPENSES (Continued)
Other expenses increased $743,000 or 9.95% over June 30, 1993. Salaries
increased 7.64%, and employee benefits 15.83%, due in part to staffing of an
additional branch in mid-summer 1993, the employement of additional personnel
at the individual bank and holding company levels, and normal salary increases.
Occupancy decreased $12,000, while furniture and equipment expenses increased
$76,000 or 21.65%, due largely to the purchase of data processing equipment.
Other operating expenses increased $322,000 in 1994 or 11.12% with the most
significant changes being an increase in legal fees of $230,000, increased FDIC
assessment fees of $69,000 over the same period in 1993, and additional audit
and tax expense of $64,000. Data processing fees decreased $144,000 due
largely to the expiration and renegotiation of the independent service bureau
contract in the latter half of 1993. Less significant increases and decreases
account for the difference.
INVESTMENTS, LOANS, AND DEPOSITS
Net loans increased $13,977,000 or 5.01%, investments increased $25,824,000
or 12.21%, fed funds sold decreased $25,105,000 or 72.42%, with an increase
in total assets of $20,007,000 or 3.59% over December 31, 1993. One affiliate
bank purchased $13,000,000 in local branch deposits of one of its competitors
during the second quarter of 1994, accounting for a large portion of the
$17,088,000 increase in deposits over December 31, 1993. Deman deposits,
interest-bearing demand deposits, and other time deposits increased 18.89%,
6.99%, and 4.67%, respectively. Large denomination certificates of
deposit decreased by $3,919,000 or 10.69% while savings held at the same
level. Fed funds purchased and repurchase agreements increased $4,968,000
over year end 1993.
Allowance for Loan and Lease Losses
The allowance for loan and lease losses on June 30, 1994, was $4,626,000
compared to $4,481,000 at December 31, 1993, and $4,544,000 at June 30, 1994.
Charge-offs were $239,000 for the first six months of 1994 compared to
$764,000 for the same period in 1993. Recoveries of $189,000 were booked
in the first six months of 1994; $226,000 in 1993. Management believes
the allowance is adequate at the June 30, 1994 level, after making provisions
during the year of $195,000.
Capital Resources
Total stockholders equity or capital amounted to $53,727,000 at June 30, 1994.
The leverage ratio at June 30, 1994 at 9.67%.
Liquidity and interest Sensitivity
Almost the entire deposit base is made up of core deposits with only 6.53% of
toal deposits compose of Certificates of deposit of $100,000 and over.
At June 30, 1994, federal funds and investment securities maturing within
one year amounted to $16,300,000, or 3.25% of total deposits. In addition,
$71,000,000 of investment securities or 14.21% of deposits, mature within the
1-5 year range.
The policy of Premier is to maintain the relationship between rate-sensitive
assets and rate-sensitive liabilities which will maximize future profit
levels, given existing expectations of interest rate movements.
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders -
None
Item 5. Other Information - None
Item 6. Exhibits and reports on Form 8-K
a) Exhibits - None
b) Form 8-K - None
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 BANKSHARES
CORPORATION
Date: August 12, 1994 BY /s/ James R.Wheeling, President
Date: August 12, 1994 BY /s/ Ellen Simpson, Secretary
(Chief Accounting Officer)
