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 September 30, 1995
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.)
29 College Drive
P. O. Box 1199, Bluefield, VA 24605
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number including area code (540)322-2242
___________________________________________________________________
(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 September 30, 1995.
Common stock, $2 par value - 4,987,802 shares.
<PAGE>
INDEX
Page
No.
Part 1. Financial Information:
Item 1. Financial Statements
Consolidated Balance Sheets -
September 30, 1995 and December 31, 1994 3
Consolidated Statements of Income -
Nine Months September 30, 1995 and 1994 4
Consolidated Statements of
Stockholders' Equity - Nine Months
Ended September 30, 1995 and 1994 5
Consolidated Statements of Cash Flows
Nine Months Ended September 30,
1995 and 1994 6
Notes to Consolidated Financial Statements 7-10
Supplemental Financial Data (Tables I - 11-13
III)
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 14-15
Part II. Other Information:
Item 1. Legal Proceedings 16
Item 2. Changes in Securities 16
Item 3. Defaults Upon Senior Securities 16
Item 4. Submission of Matters to a Vote of
Security Holders 16
Item 5. Security Holders Other Information 16
Item 6. Exhibits and Reports on Form 8-K 16
<PAGE>
ITEM 1. FINANCIAL INFORMATION:
PREMIER BANKSHARES CORPORATION AND AFFILIATES
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars)
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C>
ASSETS:
Cash and Due From Banks $ 25,086 $ 19,475
Securities Held to Maturity (Approximate
Market Value
$101,542 in 1995; $85,153 in 1994) 100,341 88,766
Securities Available for Sale (Amortized
Cost $160,085 in 1995 $151,980 in 1994) 157,986 142,682
Federal Funds Sold 38,430 17,240
Loans, Net of Unearned Income of $5,819 in
in 1995, $6,554 in 1994 and Allowance for
Loan Losses of $5,635 in 1995 and
$5,844 in 1994 392,960 360,860
Bank Premises and Equipment 16,194 14,259
Other Assets 23,263 11,911
TOTAL ASSETS $ 754,260 $ 655,193
LIABILITIES:
Deposits:
Demand $ 79,897 63,784
Interest-bearing Demand 82,032 67,518
Savings 144,531 160,323
Large Denomination Certificates
of Deposit 52,093 44,978
Other Time 306,910 232,807
TOTAL DEPOSITS $ 665,463 $ 569,410
Short-term Debt 11,813 21,377
Other Liabilities 5,726 2,213
Long-term Dept 1,600 1,900
TOTAL LIABILITIES $ 684,602 $ 594,900
SHAREHOLDERS' EQUITY:
Capital Stock-Common-$2 Par
10,000,000 Authorized; 4,4987,802
Shares Issued in 1994 -4,987,802 $ 9,975 $ 9,975
Surplus 22,029 22,029
Undivided Profits 39,063 34,501
Net Unrealized Loss on Securities (1,409) (6,212)
TOTAL STOCKHOLDERS' EQUITY $ 69,658 $ 60,293
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 754,260 $ 655,193
</TABLE>
[FN]
Notes to financial statements are an integral part of these
statements.
<PAGE>
PREMIER BANKSHARES CORPORATION AND AFFILIATES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands of Dollars)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
INTEREST INCOME:
Loans and Fees $ 9,836 $ 8,357 $ 27,815 $ 24,222
Federal Funds Sold 719 80 1,449 546
Money Market Deposits 2 22
Securities Held to Maturity 434 550 2,935 2,924
Securities Held for Sale 3,292 3,128 7,319 7,947
Total Interest Income $14,281 $12,117 $ 39,518 $ 35,661
INTEREST EXPENSE:
Demand Deposits $ 552 $ 453 $ 1,503 $ 1,337
Savings Deposits 1,164 1,433 3,583 4,465
Large Denomination Certificates
of Deposit 759 489 2,021 1,578
Other Time Deposits 4,113 2,477 10,250 7,262
Short-term Debt 234 187 711 455
Long-term Debt 34 153
Total Interest Expense $ 6,856 $ 5,039 $ 18,221 $ 15,097
Net Interest Income $ 7,425 $ 7,078 $ 21,297 $ 20,564
ADDITION TO ALLOWANCE FOR LOAN
AND LEASE LOSSES 454 315 702
Net Interest Income After Addition to
Allowance for Loan and
Lease Losses $ 7,425 $ 6,624 $ 20,982 $ 19,862
OTHER INCOME:
Service Charges on Deposit Accounts$ 748 $ 508 $ 1,804 $ 1,466
Trust Department Income 61 107 178 177
Other Service Charges,
Commissions and Fees 402 402 1,184 1,132
Other Operating Income 44 48 255 188
Security Gains (Losses) 49 (15) (104) 667
Total Other Income $ 1,304 $ 1,050 $ 3,317 $ 3,630
OTHER EXPENSES:
Salaries $ 2,045 $ 1,926 $ 5,993 $ 5,645
Employee Benefits 547 601 1,532 1,648
Occupancy Expenses 258 209 678 653
Furniture and Equipment Expenses 300 286 891 825
Other Operating Expenses 2,254 1,790 6,305 5,378
Total Other Expense $ 5,404 $ 4,812 $15,399 $ 14,149
Income Before Income Taxes $ 3,325 $ 2,862 $ 8,900 $ 9,343
Applicable Income Taxes 857 669 2,242 2,318
Net Income $ 2,468 $ 2,193 $ 6,658 $ 7,025
NET INCOME PER SHARE $ 0.49 $ 0.44 $ 1.33 $ 1.41
CASH DIVIDENDS PER SHARE $ 0.14 $ 0.12 $ 0.42 $ 0.34
</TABLE>
[FN]
The notes to financial statements are an integral part of these statements.
<PAGE>
PREMIER BANKSHARES CORPORATION AND AFFILIATES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In Thousands of Dollars)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1995 1994
<S> <C> <C>
Balance at Beginning of Year $ 60,293 $ 59,769
Net Income 6,658 7,025
Cash Dividends Declared (2,094) (1,678)
Change in Valuation Allowance for
Securities 4,801 (4,640)
Balance at End of Period $ 69,658 $ 60,476
</TABLE>
[FN]
The notes to financial statements are an integral part of these
statements.
<PAGE>
PREMIER BANKSHARES CORPORATION AND AFFILIATES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
September 30, September 30,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 2,468 $ 2,193 $ 6,658 $ 7,025
Adjustments to Reconcile Net Income to
Cash Provided by Operating Activities:
Depreciation and Amortization of
Premises and Equipment 275 215 763 661
Provision for Loan Losses 454 315 702
Amortization of:
Goodwill and Intangibles 308 71 529 199
Premiums and Accretion of Discounts,Net 244 (618) 474 (362)
Security Gains(Losses) (49) 15 104 (667)
Increase in Other Assets (1,416) 109 (11,876) (868)
Increase in Other Liabilities 788 456 3,513 (1,379)
Net Cash Provided by
Operating Activities $ 2,618 $ 2,895 $ 480 $ 5,311
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (Increase) Decrease in
Temporary Investments $ 14,574 $ (1,873) $(24,190) $ 24,075
Sale of Securities Available for Sale 8,679 4,444 20,295 11,847
Maturities of Securities
Available for Sale 9,374 3,477 14,845 31,013
Purchases of Securities
Available for Sale (28,464) (8,844) (45,679) (56,930)
Maturities of Securities Held
to Maturity 2,747 18,796 10,114 22,295
Purchase of Securities Held
to Maturity (1,670) 5,343 (19,230) (16,247)
Sale of Foreclosed Properties (483)
Net Increase in Customer Loans (8,620) (6,777) (32,415) (24,016)
Premises and Equipment Expenditures (472) (347) (3,338) (930)
Sales of Premises and Equipment 15 16 635 20
Net Cash Used in
Investing Activities $ (3,837) $ 13,752 $ (78,963) $ (8,873)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net (Decrease) Increase in Demand
Deposits, Now and Savings Accounts 4,601 (4,990) 14,835 7,852
Net Increase in Time Deposits 4,925 (4,334) 81,218 2,775
Borrowings of Long-term Debt 7,000
Payments on Long-term Debt (7,300) (7,300)
Net Increase (Decrease) in
Short-term Debt (5,345) (6,551) (9,564) (1,583)
Cash Dividends Paid (699) (530) (2,095) (1,680)
Net Cash Provided by
Finanicing Activities $ (3,818) $(16,405) $ 84,094 $ 7,364
Net Increase in Cash and Due
from Banks $ (5,037) $ 242 $ 5,611 $ 3,802
CASH AND DUE FROM BANKS:
Beginning 30,123 18,619 19,475 15,059
Ending $ 25,086 $ 18,861 $ 25,086 $ 18,861
Supplemental Disclosures of
Cash Flow Information:
Cash Payments for Interest Paid:
To Depositors $ 4,598 $ 30,744 $ 16,543 $ 14,201
On Federal Funds Purchased and
Securities Sold Under Agreement
To Repurchase $ 224 $ 1,139 $ 714 $ 425
Income Taxes $ $ 3,827 $ 1,655 $ 2,172
</TABLE>
[FN]
The notes to financial statements are an integral part of these
statements.
<PAGE>
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 September 30, 1995, and December 31,
1994, and the results of operations and cash flows for the nine months
ended September 30, 1995 and 1994.
The results of operations for the nine months ended September 30, 1995,
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>
September 30, 1995
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
U.S. Government Agencies and
Corporations $ 11,495 $ 6 $ 101 $ 11,400
Obligations of States and
Political Subdivisions 76,136 1,584 77,720
Corporate Securities 1,755 2 1,757
Mortgabe-backed Securities 10,575 287 10,288
Other 380 3 377
$ 100,341 $ 1,592 $ 391 $ 101,542
</TABLE>
<TABLE>
<CAPTION>
December 31, 1994
Gross Gross Estimated
Amortize Unrealized Unrealized Market
Cost Gains Losses Value
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
U.S. Government Agencies and
Corporations $ 6,003 $ $ 613 $ 5,390
Obligations of States and
Political Subdivisions 70,712 798 2,698 68,812
Corporate Securities 449 23 426
Mortgage-backed Securities 11,602 8 1,085 10,525
$ 88,766 $ 806 $ 4,419 $ 85,153
</TABLE>
<PAGE>
2. Investment Securities (continued)
Amortized cost and carrying amount (estimated fair value) of securities
available for sale are summarized as follows:
<TABLE>
<CAPTION>
September 30, 1995
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
U.S. Treasury Securities $ 14,593 $ 49 $ 15 $ 14,627
U.S. Government Agencies and
Corporations 50,747 104 228 50,623
Obligations of States and
Political Subdivisions 4,857 2 4,859
Corporate Securities 12,527 84 4 12,607
Mortgage-backed Securities 69,350 1,824 67,526
Marketable Equity 1,596 163 1,433
Other Debt Securities 6,415 2 106 6,311
$ 160,085 $ 241 $ 2,340 $ 157,986
</TABLE>
<TABLE>
<CAPTION>
December 31, 1994
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Market Value
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
U.S. Treasury Securities $ 23,040 $ 29 $ 472 $ 22,597
U.S. Government Agencies and
Corporations 39,844 2 2,852 36,994
Obligation of States and
Political Subdivisions 7,285 47 137 7,195
Corporate Securities 3,885 27 146 3,766
Mortgage-backed Securities 74,643 8 5,519 69,132
Marketable Equity 1,596 222 1,374
Other Debt Securities 1,687 63 1,624
$ 151,980 $ 113 $9,411 $ 142,682
</TABLE>
<TABLE>
<CAPTION> Nine Months Ended
September 30,
1995 1994
(In Thousands of Dollars)
<S> <C> <C>
Gross proceeds from sales of securities $ 20,295 11,847
Gross Gains on Sale of Securities $ 107 $ 682
Gross Losses on Sale of Securities 211 15
Net Securities Gains (Losses) $ (104) $ 667
</TABLE>
<PAGE>
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:
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
(In Thousands of Dollars)
<S> <C> <C>
Commercial, Financial, and Agricultural $ 133,253 $ 116,506
Real Estate - Construction 10,411 8,654
Real Estate - Mortgage 157,021 151,972
Loans to Individuals 100,508 94,520
Others 3,221 1,606
404,414 373,258
Less Unearned Income (5,819) (6,554)
398,595 366,704
Less Allowance for Loan and Lease Losses (5,635) (5,844)
$ 392,960 $ 360,860
</TABLE>
The following schedule summarizes the changes in the allowance
for loan and lease losses:
<TABLE>
<CAPTION>
Septemeber 30, September 30, December 31,
1995 1994 1994
(In Thousands of Dollars)
<S> <C> <C> <C>
Balance, Beginning $ 5,844 $ 5,226 $ 5,226
Provision Charged
Against Income 315 704 1,144
Recoveries 274 290 446
Loans Charged Off (798) (587) (972)
Balance, Ending $ 5,635 $ 5,633 $ 5,844
</TABLE>
Nonperforming assets consist of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
(In Thousands of Dollars)
<S> <C> <C>
Nonaccrual Loans $ 2,737 $ 3,018
Restructured Loans 723 1,172
Nonperforming Loans 3,460 4,190
Foreclosed Properties 738 677
Nonperforming Assets $ 4,198 $ 4,867
Total loans past due 90 days or more and still accruing were
$520 on September 30, 1995 and $711 on December 31, 1994.
</TABLE>
PREMIER BANKSHARES CORPORATION AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
4. Short-term Debt
Short-term debt consists of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
(In Thousands of Dollars)
<S> <C> <C>
Federal Funds Purchased and Securities
Sold Under Agreements to Repurchase 11,813 19,877
Other Short-term Borrowing 1,500
Total Short-term Debt 11,813 21,377
</TABLE>
5. Long-term Debt
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
(In Thousands of Dollars)
<S> <C> <C>
Note Dated 9/16/94 @ 7.60%
Quarterly Installments - $100,000 $ 1,600 $ 1,900
Total Long-term Debt $ 1,600 $ 1,900
</TABLE>
6. Earnings Per Share
Earnings per share are computed on the weighted average common shares
outstanding of 4,987,802 for both the three and nine months ended
September 30, 1994 and 1995, respectively.
7. Capital Requirements
A comparison of the Company's capital as of September 30, 1995 with the
minimum requirements is presented below.
<TABLE>
Minimum
Actual Requirements
<S> <C> <C>
Tier I Risk-based Capital 12.10 % 4.00 %
Total Risk-based Capital 13.23 % 8.00 %
Leverage Ratio 8.00 % 4.00 %
</TABLE>
8. Branch Acquisitions
In June 1995, the Company acquired seven branches from NationsBank of
which six branches were settled in the second quarter of 1995, the seventh in
the third quarter, 1995. These acquisitions were accounted for under the
purchase method of accounting. The purchase prices were allocated to the
identifiable tangible and intangible assets acquired and liabilities assumed
based upon their estimated fair value at the date of consummation. The
intangibles are being amortized on a straight-line basis over their
respective lives.
TABLE I
<TABLE>
<CAPTION>
Consolidated Selected Financial Data
(Amounts in thousands, except per share data)
1995
Third Second First
Quarter Quarter Quarter
<S> <C> <C> <C>
Interest Income $ 14,281 $ 13,038 $ 12,199
Interest Expense 6,856 6,071 5,294
Net Interest Income 7,425 6,967 6,905
Provision for Loan Losses 127 188
Net Income 2,468 1,988 2,202
Per Share Data:
Net Income 0.49 0.40 0.44
Cash Dividends Paid 0.14 0.14 0.14
Total Average Stockholders' $ 68,803 $ 62,968 $ 59,938
Equity $ 755,186 $ 681,947 $ 653,074
Total Average Assets
Ratios:
Average Stockholders'Equity
to Total Average Assets 9.11 % 9.23 % 9.18 %
Return on Average Equity 14.35 % 12.63 % 14.70 %
Return on Average Assets 1.31 % 1.17 % 1.35 %
</TABLE>
<TABLE>
<CAPTION>
1994
Fourth Third Second First
Quarter Quarter Quarter Quarter
<S> <C> <C> <C> <C>
Interest Income 12,232 12,059 11,930 11,671
Interest Expense 5,210 5,042 5,056 4,999
Net Interest Income 7,022 7,017 6,874 6,672
Provision for Loan Losses 441 456 155 92
Net Income 1,974 2,197 2,255 2,580
Per Share Data:
Net Income 0.40 0.44 0.45 0.52
Cash Dividends Paid 0.14 0.12 0.11 0.11
Total Average
Stockholders' Equity 60,583 61,215 59,664 59,349
Total Average Assets 655,553 656,902 666,663 652,270
Ratios:
Average Stockholders' Equity
to Total Average Assets 9.24 % 9.32 % 8.95 % 9.10 %
Return on Average Equity 13.03 % 14.36 % 15.12 % 17.39 %
Return on Average Assets 1.20 % 1.34 % 1.35 % 1.58 %
</TABLE>
<PAGE>
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 nine
months ended September 30, 1995 and 1994. Nonaccruing loans are included in
the total loans.
<TABLE>
<CAPTION>
1995 1994
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 381,119 27,834 9.74 % 347,704 24,222 9.29 %
Taxable Investment
Securities 158,949 7,319 6.14 179,208 7,947 5.91
Nontaxable Investment
Securities 74,065 4,447 8.01 73,735 4,430 8.01
Interest-bearing Deposits
with Other Banks 322 22 9.11
Federal Funds Sold and
Securities Purchased Under
Agreements to Resell 33,612 1,449 5.75 20,780 546 3.50
Total Interest-earning
Assets 647,745 41,049 8.45 % 621,749 37,167 7.97 %
Noninterest-earning Assets:
Cash and Noninterest-
bearing Deposits 25,323 18,566
Premises and Equipment,
Net 15,042 11,316
Other Assets 14,923 11,871
Less Allowance for Loan and
Lease Losses (5,911) (5,408)
Total Assets 697,122 658,094
Liabilities and Stockholders' Equity
Interest-bearing Liabilities:
Demand Deposits 72,728 1,503 2.76 % 64,016 1,337 2.78 %
Savings Deposits 148,043 3,583 3.23 177,887 4,465 3.35
Large Denomination
Certificates of Deposit 51,470 2,021 5.24 46,455 1,578 4.53
Other Time Deposits 267,665 10,250 5.11 226,369 7,262 4.28
Short-term Borrowings 16,167 711 5.86 18,631 455 3.26
Long-term Debt 4,204 153 4.85
Total Interest-bearing
Liabilities 560,277 18,221 4.34 % 533,358 15,097 3.77 %
Noninterest-bearing
Liabilities: 73,302 61,662
Demand Deposits 458 4,399
Other Liabilities
Stockholders' Equity 63,085 58,675
Total Liabilities and
Stockholders' Equity 697,122 658,094
Net Interest Differential 4.11 % 4.20 %
Net Interest Earnings 22,828 22,070
Net Yield on Interest-earning
Assets 4.70 % 4.73 %
</TABLE>
<PAGE>
TABLE III
A summary of the increases and decreases of the items included in the
Consolidated Statements of Income are shown below:
<TABLE>
<CAPTION>
Net Increases (Decreases)
Three Months Ended Nine Months Ended
September 30, September 30,
1995 and 1994 1995 and 1994
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
INTEREST INCOME: Amount Percent Amount Percent
Interest and Fees on Loans 1,479 17.70 % 3,593 14.83 %
Federal Funds Sold 639 798.75 % 903 165.38 %
Money Market Deposits (2) N/A % (22) (100.00) %
Interest on Investments Held to
Maturity Nontaxable (116) (21.09) % 11 0.38 %
Interest on Securities Held for
Sale, Taxable 164 5.24 % (628) (7.90) %
Total Interest Income 2,164 17.86 % 3,857 10.82 %
INTEREST EXPENSE:
Demand Deposits 99 21.85 % 166 12.42 %
Savings Deposits (269) (18.77) % (882) (19.75) %
Large Denomination Certificates
of Deposits 270 55.21 % 443 28.07 %
Other Time Deposits 1,636 66.05 % 2,988 41.15 %
Short-term Debt 47 25.13 % 256 56.26 %
Long-term Debt 34 N/A 153 N/A
Total Interest Expense 1,817 36.06 % 3,124 20.69 %
Net Interest Income 347 4.90 % 733 3.56 %
ADDITION TO ALLOWANCE FOR LOAN
LEASE LOSSES (454) (100.00) % (387) (55.13) %
Net Interest Income After
Addition to Allowance for
Loan and Lease Losses 801 12.09 % 1,120 5.64 %
OTHER INCOME:
Service Charges on Deposit
Accounts 240 47.24 % 338 23.06 %
Trust Department Income (46) (42.99) % 1 0.56 %
Other Service Charges,
Commissions and Fees 52 4.59 %
Other Operating Income (4) (8.33) % 67 35.64 %
Security Gains (Losses) 64 N/A % (771) N/A %
Total Other Income 254 24.19 % (313) (8.62) %
OTHER EXPENSES:
Salaries 119 6.18 % 348 6.16 %
Employees Benefits (54) (8.99) % (116) (7.04) %
Occupancy Expenses 49 23.44 % 25 3.83 %
Furniture and Equipment
Expenses 14 4.90 % 66 8.00 %
Other Operating Expenses 464 25.92 % 927 17.24 %
Total Other Expense 592 12.30 % 1,250 8.83 %
Income Before Income Taxes 463 16.18 % (443) (4.74) %
Applicable Income Taxes 188 28.10 % (76) (3.28) %
NET INCOME 275 12.54 % (367) (5.22) %
</TABLE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION:
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
Premier's non-bank subsidiaries, Premier Bank Services Corporation and
Professional Financial Services of Virginia, Inc. remain inactive.
Premier formed a new non-bank trust subsidiary, Premier Trust Company in
January 1995 which is now operating. In addition, Premier acquired the
former Dickenson-Buchanan Bank located in Clintwood, Virginia at year-
end 1994 using the pooling-of-interest method of accounting. Prior year
financial data reflects this acquisition. Premier recorded seven
branches purchased from Nationsbank, adding approximately $116,000,000
in assets during the first three quarters 1995.
EARNINGS PERFORMANCE
Net income for the first nine months of 1995 was $6,658,000, a
$367,000 or 5.22% decrease over the $7,025,000 earned for the same
period in 1994 due largely to a decrease in security gains of $771,000.
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. On a per
share basis, net income for the first nine months of 1995 decreased to
$1.33 compared to $1.41 for the same period in 1994, with 4,987,802
average shares outstanding for the three and nine months ending
September 30, 1995 and 1994, respectively.
NET INTEREST INCOME
Net interest income, before provision for loan losses for the nine
months ended September 30, 1995, was $21,297,000, a $733,000, or 3.56%
increase from $20,564,000 recorded for the same period of 1994. 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 9 basis points to 4.11%. The
tax-equivalent yield on earning assets increased from 7.97% in 1994 to
8.45%, or 48 basis points in 1995 while the rate paid on interest-
bearing liabilities increased 57 basis points to 4.34%.
The net yield (fully taxable equivalent) on earning assets
decreased 3 basis points in 1995 to 4.70% compared to 4.73% in 1994.
Yields on loans and fed funds sold increased 45 and 225 basis points
while the yield on taxable investment securities increased 23 basis
points and the yield on nontaxable remained the same. Average rates
paid on demand deposits decreased by only 2 basis points while savings
decreased 12 basis points. Rates on large denomination and other time
deposit rates increased 71 and 83 basis points, respectively. The rate
paid on short-term borrowings increased 260 basis points. Also, long-
term debt was outstanding in 1995 with and average rate of 4.85% that
did not exist in 1994.
OTHER INCOME AND EXPENSES
Total other income decreased $313,000 or 8.62% to $3,317,000 due
largely to net security losses in 1995 of $104,000 compared to net
security gains of $667,000 in 1994. 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. Service charges on deposit accounts increased
by $338,000, or 23.06%, trust department income remained virtually the
same, and other service charges commissions and fees increased $52,000,
or 4.59%. Other operating income increased $67,000 largely due to an
increase in gains on sales of foreclosed properties of $23,000 and an
increase in safe deposit box income of $35,000.
OTHER INCOME AND EXPENSES (Continued)
Other expenses increased $1,250,000 or 8.83% over September 30,
1994. Salaries increased 6.16%, or $348,000 and employee benefits
decreased $116,000 or 7.04%. The most significant changes in other
operating expenses were an increases in data processing fees of
$257,000, increased stationary and supplies expense of $240,000, postage
of $94,000, accounting and auditing expense of $77,000, and an increase
in bank franchise tax of $143,000. There was a substantial decrease of
$307,000 in legal fees in the first nine months of 1995 compared to the
same period of 1994 following the settlement of a suit which had been
pending and accrued for in 1994. Also, because of the adjustment of
the FDIC rate, FDIC assessment decreased $290,000 over last year. Due
to the branch acquisitions, amortization of goodwill increased $230,000
for the first nine months of 1995 compared to 1994. Occupancy and
furniture and fixtures costs increased $91,000 or 6.16%. Less
significant increases and decreases account for the difference.
INVESTMENTS, LOANS, AND DEPOSITS
Largely due to the seven additional branches in 1995, net loans
increased $32,100,000 or 8.90%, investments increased $26,879,000 or
11.61%, fed funds sold increased $21,190,000 or 122.91%, with an
increase in total assets of $99,067,000 or 15.12% for the first nine
months of 1995. Demand deposits, interest-bearing demand deposits, large
denomination certificates and other time deposits increased 25.26%,
21.50%, 15.82%, and 31.83%, respectively. Savings decreased by 9.85%
from December 1994. Short-term debt which includes fed funds purchased,
repurchase agreements and short-term borrowings decreased $9,564,000
over year end 1994. Also, during the third quarter 1995, the parent
company paid off $7,200,000 borrowed during the second quarter 1995 to
provide additional capital to two of its affiliates.
ALLOWANCE FOR LOAN AND LEASE LOSSES
The allowance for loan and lease losses on September 30, 1995 was
$5,635,000 compared to $5,844,000 at December 31, 1994, and $5,633,000
at September 30, 1994. The ratio of allowance for loan and lease losses
to total loans net of unearned income was 1.41% at September 30, 1995.
Charge-offs were $798,000 for the first nine months of 1995 compared to
$587,000 for the same period in 1994. Recoveries of $274,000 were
booked in the first nine months of 1995; $290,000 in 1994. Management
believes the allowance is adequate at the September 30,1995 level with
year to date provisions made of $315,000.
CAPITAL RESOURCES
Total stockholders equity or capital amounted to $69,658,000 at
September 30, 1995. The leverage ratio at September 30, 1995 was 8.00%.
LIQUIDITY AND INTEREST SENSITIVITY
Almost the entire deposit base is made up of core deposits with
only 7.83% of total deposits composed of certificates of deposit of
$100,000 and over. At September 30, 1995, federal funds and investment
securities maturing within one year amounted to $57,783,000, or 8.68% of
total deposits. In addition, $111,057,000 of investment securities or
16.69% 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.
<PAGE>
PART II. OTHER INFORMATION
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
<PAGE>
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: November 13, 1995 BY /s/ James R.Wheeling
James R. Wheeling,President
Date: November 13, 1995 BY /s/ Ellen Simpson
Ellen Simpson, Secretary
(Accounting Officer)
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