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 March 31, 1996
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 March 31, 1996.
Common stock, $2 par value - 6,650,083 shares.
INDEX
Page
No.
Financial Information: Part I.
Item 1. Financial Statements
Consolidated Balance Sheets -
March 31, 1996 and December 31, 1995 3
Consolidated Statements of Income -
Three Months March 31, 1996 and 1995 4
Consolidated Statements of
Stockholders' Equity - Three Months
Ended March 31, 1996 and 1995 5
Consolidated Statements of Cash Flows
Three Months Ended March 31,
1996 and 1995 6
Notes to Consolidated Financial 7-10
Statements
Supplemental Financial Data (Tables I 11-13
- III)
Item 2. Management's Discussion and Analysis
of 14-15
Financial Condition and Results of
Operations
Other Information: Part II.
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. Other Information 16
Item 6. Exhibits and Reports on Form 8-K 16
ITEM 1. FINANCIAL INFORMATION:
PREMIER BANKSHARES CORPORATION AND AFFILIATES
CONSOLIDATED BALANCE SHEETS
(In Thousands of Dollars)
<TABLE>
March 31, December 31,
1996 1995
<S> <C> <C>
ASSETS:
Cash and Due From Banks $ 23,533 $ 28,957
Securities Held to Maturity
(Approximate Market Value $32,304 in
1996; $34,014 in 1995) 31,544 33,348
Securities Available for Sale
(Amortized Cost $231,912 in 1996
$233,545 in 1995) 230,301 234,183
Federal Funds Sold 15,204 24,105
Loans, Net of Unearned Income of
$4,936 in 1996, $5,386 in 1995 and
Allowance for Loan Losses of $5,276 in
1996 and $5,430 in 1995 420,982 400,569
Bank Premises and Equipment 17,150 17,242
Other Assets 23,763 23,631
TOTAL ASSETS $ 762,477 $ 762,035
LIABILITIES:
Deposits:
Demand $ 75,050 70,431
Interest-bearing Demand 84,442 89,558
Savings 141,150 141,142
Large Denomination Certificates
of Deposit 54,323 52,839
Other Time 310,134 307,943
TOTAL DEPOSITS $ 665,099 $ 661,913
Short-term Debt 16,904 17,407
Other Liabilities 7,043 9,492
Long-term Debt
TOTAL LIABILITIES $ 689,046 $ 688,812
SHAREHOLDERS' EQUITY:
Capital Stock-Common-$2 Par
10,000,000 Authorized; 6,650,083
Shares Issued in 1996 and 1995 $ 13,300 $ 13,300
Surplus 18,696 18,704
Undivided Profits 42,524 40,818
Net Unrealized Gain(Loss) on Securities (1,089) 401
TOTAL STOCKHOLDERS' EQUITY $ 73,431 $ 73,223
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 762,477 $ 762,035
</TABLE>
[FN]
Notes to financial statements are an integral part of these
statements.
PREMIER BANKSHARES CORPORATION AND AFFILIATES
CONSOLIDATED STATEMENTS OF INCOME
(In Thousands of Dollars)
<TABLE>
1996 1995
<S> <C> <C>
INTEREST INCOME:
Loans and Fees $ 10,160 $ 8,733
Federal Funds Sold 332 229
Securities Held to Maturity 1,008 911
Securities Held for Sale 2,692 2,326
Total Interest Income $ 14,192 $ 12,199
INTEREST EXPENSE:
Demand Deposits $ 514 $ 462
Savings Deposits 1,068 1,234
Large Denomination Certificates
of Deposit 738 590
Other Time Deposits 4,197 2,750
Short-term Debt 194 221
Long-term Debt 37
Total Interest Expense $ 6,711 $ 5,294
Net Interest Income $ 7,481 $ 6,905
ADDITION TO ALLOWANCE FOR LOAN AND LEASE
LOSSES 35 188
Net Interest Income After Addition
to Allowance for Loan and Lease Losses $ 7,446 $ 6,717
OTHER INCOME:
Service Charges on Deposit Accounts $ 688 $ 509
Trust Department Income 41 39
Other Service Charges, Commissions and Fees 510 386
Other Operating Income 110 117
Security Gains (Losses) (34) (40)
Total Other Income $ 1,315 $ 1,011
OTHER EXPENSES:
Salaries $ 2,268 $ 1,922
Employee Benefits 585 485
Occupancy Expenses 317 225
Furniture and Equipment Expenses 309 299
Other Operating Expenses 1,939 1,887
Total Other Expense $ 5,418 $ 4,818
Income Before Income Taxes $ 3,343 $ 2,910
Applicable Income Taxes 840 708
Net Income $ 2,503 $ 2,202
NET INCOME PER SHARE $ 0.38 $ 0.33
CASH DIVIDENDS PER SHARE $ 0.12 $ 0.105
</TABLE>
The notes to financial statements are an integral part of these statements.
PREMIER BANKSHARES CORPORATION AND AFFILIATES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In Thousands of Dollars)
<TABLE>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
Balance at Beginning of Year $ 73,223 $ 60,293
Net Income 2,503 2,202
Cash Dividends Declared (798) (698)
Other (7)
Change in Valuation Allowance for Securities (1,490) 2,122
Balance at End of Period $ 73,431 $ 63,919
</TABLE>
[FN]
The notes to financial statements are an integral part of these
statements.
PREMIER BANKSHARES CORPORATION AND AFFILIATES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands of Dollars)
<TABLE>
Three Months Ended
March 31,
1996 1995
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 2,503 $ 2,202
Adjustments to Reconcile Net Income to Cash
Provided by Operating Activities:
Depreciation and Amortization of Premises
and Equipment 299 241
Provision for Loan Losses 35 188
Amortization of:
Goodwill and Intangibles 249 72
Premiums and Accretion of Discounts,Net 264 115
Security Gains (Losses) 34 40
Increase in Other Assets (378) (497)
Increase in Other Liabilities (2,449) 2,241
Net Cash Provided by Operating Activities $ 557 $ 4,602
CASH FLOWS FROM INVESTING ACTIVITIES:
Net Decrease in Temporary Investments $ 8,901 $ 287
Sale of Securities Available for Sale 8,128 5,567
Maturities of Securities Available for Sale 16,584 3,687
Purchases of Securities Available for Sale (22,616) (1,485)
Maturities of Securities Held to Maturity 1,794 4,334
Purchase of Securities Held to Maturity
Sale of Foreclosed Properties (1,195)
Net Increase in Customer Loans (20,448) (3,971)
Premises and Equipment Expenditures (230) (289)
Sales of Premises and Equipment 20
Net Cash (Used) in Provided by Investing Activities $ (7,867) $ 6,935
CASH FLOWS FROM FINANCING ACTIVITIES:
Net Decrease in Demand Deposits,
Now and Savings Accounts $ (489) $ (15,739)
Net Increase in Time Deposits 3,675 8,530
Borrowings of Long-term Debt (100)
Payments on Long-term Debt (3,808)
Net Decrease in Short-term Debt (503) (698)
Cash Dividends Paid (797)
Net Cash Provided by (Used) in Financing Activities $ 1,886 $ (11,815)
Net Increase in Cash and Due from Banks $ (5,424) $ (278)
CASH AND DUE FROM BANKS:
Beginning 28,957 19,475
Ending $ 23,533 $ 19,197
Supplemental Disclosures of Cash Flow Information:
Cash Payments for Interest Paid:
To Depositors $ 7,070 $ 4,598
On Federal Funds Purchased and Securities Sold
Under Agreement to Repurchase $ 194 $ 224
Income Taxes $ 124 $
</TABLE>
[FN]
The notes to financial statements are an integral part of these
statements.
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 March 31, 1996, and December 31, 1995, and the
results of operations and cash flows for the three months
ended March 31, 1996 and 1995.
The results of operations for the three months ended March 31,
1996, 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>
March 31, 1996
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
Obligations of States and
Political Subdivisions $ 31,544 $ 941 $ 181 $ 32,304
$ 31,544 $ 941 $ 181 $ 32,304
</TABLE>
<TABLE>
December 31, 1995
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
Obligations of States and
Political Subdivisions $ 33,282 $ 844 $ 178 $ 33,948
Other Debt Securities 66 66
$ 33,348 $ 844 $ 178 $ 34,014
</TABLE>
2. Investment Securities (continued)
Amortized cost and carrying amount (estimated fair value) of
securities available for sale are summarized as follows:
<TABLE>
March 31, 1996
Gross Gross Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
(In Thousands of Dollars)
<S> <C> <C> <C> <C>
U.S. Treasury Securities $ 8,931 $ 14 $ 3 $ 8,942
U.S. Government Agencies and
Corporations 77,886 32 559 77,359
Obligations of States and
Political Subdivisions 48,302 944 106 49,140
Corporate Securities 13,082 24 1 13,105
Mortgage-backed Securities 67,859 1,724 66,135
Marketable Equity 1,596 175 1,421
Other Debt Securities 14,256 2 59 14,199
$ 231,912 $ 1,016 $ 2,627 $ 230,301
</TABLE>
<TABLE>
December 31, 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 $ 10,492 $ 62 $ $ 10,554
U.S. Government Agencies and
Corporations 107,857 471 425 107,903
Obligations of States and
Political Subdivisions 52,022 1,355 128 53,249
Corporate Securities 13,700 97 5 13,792
Mortgage-backed Securities 46,084 46 693 45,437
Marketable Equity 1,596 1 131 1,466
Other Debt Securities 1,794 1 13 1,782
$ 233,545 $2,033 $ 1,395 $ 234,183
</TABLE>
<TABLE>
Three Months Ended
March 31,
1996 1995
(In Thousands of Dollars)
<S> <C> <C>
Gross proceeds from sales of Securities $ 8,128 5,567
Gross Gains on Sale of Securities $ 28 $ 62
Gross Losses on Sale of Securities (62) (102)
Net Securities Losses $ (34) $ (40)
</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:
<TABLE>
March 31, December 31,
1996 1995
(In Thousands of Dollars)
<S> <C> <C>
Commercial, Financial, and Agricultural $ 159,438 $ 132,601
Real Estate - Construction 13,226 12,393
Real Estate - Mortgage 159,301 165,900
Loans to Individuals 96,902 97,554
Others 2,327 2,937
431,194 411,385
Less Unearned Income (4,936) (5,386)
426,258 405,999
Less Allowance for Loan and Lease Losses (5,276) (5,430)
$ 420,982 $ 400,569
</TABLE>
The following schedule summarizes the changes in the allowance
for loan and lease losses:
<TABLE>
March 31, March 31, December 31,
1996 1995 1995
(In Thousands of Dollars)
<S> <C> <C> <C>
Balance, Beginning $ 5,430 $ 5,844 $ 58446
Provision Charged Against
Income 35 188 315
Recoveries 61 134 314
Loans Charged Off (250) (168) (1,043)
Balance, Ending $ 5,276 $ 5,998 $ 5,430
</TABLE>
Nonperforming assets consist of the following:
<TABLE>
March 31, December 31,
1996 1995
(In Thousands of Dollars)
<S> <C> <C>
Nonaccrual Loans $ 1,393 $ 1,925
Restructured Loans 744 714
Nonperforming Loans 2,137 2,639
Foreclosed Properties 926 881
Nonperforming Assets $ 3,063 $ 3,520
</TABLE>
Total loans past due 90 days or more and still accruing were
$1,609 on March 31, 1996 and $1,548 on December 31, 1995.
PREMIER BANKSHARES CORPORATION AND AFFILIATES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
4. Short-term Debt
Short-term debt consists of the following:
<TABLE>
March 31, December 31,
1996 1995
(In Thousands of Dollars)
<S> <C> <C>
Federal Funds Purchased and
Securities Sold
Under Agreements to Repurchase $ 16,904 $ 17,407
Total Short-term Debt $ 16,904 $ 17,407
</TABLE>
5. Long-term Debt
The long-term note dated 9/16/94 was paid off in December,
1995. As a result, there was no long-term debt outstanding as of
March 31, 1996.
6. Earnings Per Share
Earnings per share are computed on the weighted average
common shares outstanding of 6,650,083 for the three months ended
March 31, 1996 and 1995, respectively.
7. Capital Requirements
A comparison of the Company's capital as of March 31, 1996
with the minimum requirements is presented below.
Minimum
Actual Requirements
Tier I Risk-based Capital 12.17 % 4.00 %
Total Risk-based Capital 13.17 % 8.00 %
Leverage Ratio 8.39 % 4.00 %
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
Consolidated Selected Financial Data
(Amounts in thousands, except per share data)
<TABLE>
1996
First
Quarter
<S> <C>
Interest Income $ 14,192
Interest Expense 6,711
Net Interest Income 7,481
Provision for Loan Losses 35
Net Income 2,503
Per Share Data:
Net Income 0.38
Cash Dividends Paid 0.12
Total Average Stockholders' Equity $ 73,987
Total Average Assets $ 759,329
Ratios:
Average Stockholders' Equity
to Total Average Assets 9.74 %
Return on Average Equity 13.53 %
Return on Average Assets 1.32 %
</TABLE>
<TABLE>
1995
Fourth Third Second First
Quarter Quarter Quarter Quarter
<S> <C> <C> <C> <C>
Interest Income $ 14,125 $ 14,281 $ 13,038 $ 12,199
Interest Expense 6,802 6,856 6,071 5,294
Net Interest Income 7,323 7,425 6,967 6,905
Provision for Loan
Losses 127 188
Net Income 2,553 2,468 1,988 2,202
Per Share Data:
Net Income 0.39 0.37 0.30 0.33
Cash Dividends Paid 0.115 0.105 0.105 0.105
Total Average
Stockholders' Equity $ 70,387 $ 68,803 $ 62,968 $ 59,938
Total Average Assets $ 756,507 $ 755,186 $ 681,947 $ 653,074
Ratios:
Average Stockholders'
Equity to Total Average
Assets 9.30 % 9.11 % 9.23 % 9.18 %
Return on Average Equity 14.51 % 14.35 % 12.63 % 14.70 %
Return on Average Assets 1.35 % 1.31 % 1.17 % 1.35 %
</TABLE>
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 three
months ended March 31, 1996 and 1995. Nonaccruing loans are included in the
total loans.
<TABLE>
1996 1995
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 $ 413,270 $ 10,160 9.83% $ 369,497 $ 8,740 9.46 %
Taxable Investment
Securities 185,591 2,692 5.80 153,160 2,278 5.95
Nontaxable Investment
Securities 77,871 1,527 7.84 71,903 1,453 8.08
Interest-bearing Deposits
with Other Banks
Federal Funds Sold and Securities
Purchased Under
Agreements to Resell 23,868 332 5.56 15,804 229 5.80
Total Interest-earning
Assets $700,600 $ 14,711 8.40% $ 610,364 $12,700 8.32 %
Noninterest-earning Assets:
Cash and Noninterest-
bearing Deposits $ 23,343 $ 22,389
Premises and Equipment,
Net 17,194 14,304
Other Assets 23,597 11,925
Less Allowance for Loan
and Lease Losses (5,405) (5,908)
Total Assets $ 759,329 $ 653,074
Liabilities and Stockholders' Equity
Interest-bearing Liabilities:
Demand Deposits $ 83,140 $ 514 2.47% $ 66,342 $ 462 2.79 %
Savings Deposits 140,507 1,068 3.04 152,251 1,234 3.24
Large Denomination Certificates
of Deposits 53,813 738 5.49 49,355 590 4.78
Other Time Deposits 310,963 4,197 5.40 235,871 2,750 4.66
Short-term Borrowings 16,290 194 4.76 18,645 221 4.74
Long Term Borrowings 1,977 37 7.49
Total Interest-bearing
Liabilities $ 604,713 $ 6,711 4.44% $ 524,441 $ 5,294 4.04 %
Noninterest-bearing Liabilities:
Demand Deposits 73,519 65,230
Other Liabilities 7,110 3,465
Stockholders' Equity 73,987 59,938
Total Liabilities and
Stockholders' Equity $ 759,329 $ 653,074
Net Interest Differential 3.96% 4.28 %
Net Interest Earnings $ 8,000 $ 7,406
Net Yield on Interest-earning
Assets 4.57% 4.85 %
</TABLE>
TABLE III
A summary of the increases and decreases of the items included in the
Consolidated Statements of Income are shown below:
<TABLE>
Net Increases (Decreases)
Three Months Ended
March 31,
1996 and 1995
(In Thousands of Dollars)
<S> <C> <C>
INTEREST INCOME:
Interest and Fees on Loans $ 1,427 16.34 %
Federal Funds Sold 103 44.98 %
Interest on Investments Held to Maturity
Nontaxable 97 10.65 %
Interest on Securities Held for Sale, Taxable 366 15.74 %
Total Interest Income 1,993 16.34 %
INTEREST EXPENSE:
Demand Deposits 52 11.26 %
Savings Deposits (166) (13.45) %
Large Denomination Certificates of Deposits 148 25.08 %
Other Time Deposits 1,447 52.62 %
Short-term Debt (27) (12.22) %
Long-term Debt (37) (100.00) %
Total Interest Expense 1,417 26.77 %
Net Interest Income 576 8.34 %
ADDITION TO ALLOWANCE FOR LOAN
LEASE LOSSES (153) (81.38) %
Net Interest Income After Addition to
Allowance for Loan and Lease Losses 729 10.85 %
OTHER INCOME:
Service Charges on Deposit Accounts 179 35.17 %
Trust Department Income 2 5.13 %
Other Service Charges, Commissions and Fees 124 32.12 %
Other Operating Income (7) (5.98) %
Security Gains (Losses) 6 N/A
Total Other Income 304 30.07 %
OTHER EXPENSES:
Salaries 346 18.00 %
Employees Benefits 100 20.62 %
Occupancy Expenses 92 40.89 %
Furniture and Equipment Expenses 10 3.34 %
Other Operating Expenses 52 2.76 %
Total Other Expense 600 12.45 %
Income Before Income Taxes 433 14.88 %
Applicable Income Taxes 132 18.64 %
NET INCOME $ 301 13.67 %
</TABLE>
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 three months of 1996 was $2,503,000, a
$301,000 or 13.67% increase over the $2,202,000 earned for the same
period in 1995. This increase was largly the result of an increase
in net interest income of $576,000. On a per share basis, net income
for the first three months of 1996 increase to $0.38 compared to
$0.33 for the same period in 1995, with 6,650,083 average shares
outstanding for both the three months ending March 31, 1996 and 1995,
respectively.
NET INTEREST INCOME
Net interest income, before provision for loan losses for the three
months ended March 31, 1996, was $7,481,000, a $576,000, or 8.34%
increase from $6,905,000 recorded for the same period of 1995. 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 31 basis points to 3.96%. The
tax-equivalent yield on earning assets increased from 8.32% in 1995 to
8.40%, or 8 basis points in 1996 while the rate paid on interest-
bearing liabilities increased 40 basis points to 4.44%.
The net yield (fully taxable equivalent) on earning assets
decreased 28 basis points in 1996 to 4.57% compared to 4.85% in 1995.
Yields on loans increased 37 basis points from 9.46% to 9.83% with the
average balance increasing $43,773,000 over 1995. The average yield on
taxable and nontaxable investment securities decreased 15 and 24 basis
points, while the average balances increased $32,431,000 and $5,968,000,
respectively. The average rate earned on fed funds dropped 24 basis points
in 1996 when compared to 1995, while the average balance increased
$8,064,000. The average rates paid on demand deposits and savings decreased
by 32 and 20 basis points, respectively. Rates on large denomination and
other time deposit rates increased 71 and 74 basis points, respectively. The
rate paid on short-term borrowings remained almost the same with an increase
of only 2 basis points. The long-term debt outstanding in as of March 1995
was paid off in December 1995 and no other long-term debt existed. The
average balance of interest-bearing liabilities increased $80,272,000 over
March 1995. The increased volume of earning assets and liabilities in 1996
over 1995 was largely due to the purchase of the seven NationsBank branches.
OTHER INCOME AND EXPENSES
Total other income increased $304,000 or 30.07% to $1,315,000 almost
entirely due to an increase in service charges on deposit accounts of
$179,000 and an increase in other service charges, commissions and fess of
$124,000. These increases weree due in part to the increased volume of loans
and deposits and the restructuring and standardization in 1995 of deposit
accounts and service charges. Net security losses in 1996 were $34,000
compared to net losses of $40,000 in 1995. Trust department income
remained virtually the same, a $2,000 increase, and other operating income
decreased by $7,000.
OTHER INCOME AND EXPENSES (Continued)
Other expenses increased $600,000 or 12.45% over March 31, 1995.
Of this increase, salaries and employee benefits accounted for $346,000
and $100,000 respectively; occupancy and furniture and equipment expenses for
$92,000 and $10,000, respectively, -- again, these increased expenses were
impacted by the purchase of the seven additional branches. The most
significant changes in other operating expenses were a decrease in FDIC
assessments of $320,000 and an increase in the amortization of goodwill of
$146,000, as a result of the branch acquisitions. Less significant
increases and decreases account for the difference.
INVESTMENTS, LOANS, AND DEPOSITS
Net loans increased $20,413,000 or 5.10%, while investments decreased
$5,686,000 (2.13%), fed funds sold decreased $8,901,000 and cash and due from
banks decreased $5,424,000. Total assets increased only $442,000 for the first
three months of 1996. Demand deposits, large denomination certificates and
other time deposits increased by $4,619,000, $1,484,000 and $2,191,000,
respectively. Savings remained at the same level while interest-bearing
demand deposits decreased $5,116,000 from March 1995. Short-term debt,
which includes fed funds purchased and repurchase agreements, decreased
$503,000 over year end 1995.
ALLOWANCE FOR LOAN AND LEASE LOSSES
The allowance for loan and lease losses on March 31, 1996 was
$5,276,000 compared to $5,430,000 at December 31, 1995, and $5,998,000
at March 31, 1995. The ratio of allowance for loan and lease losses
to total loans net of unearned income was 1.24% at March 31, 1996.
Charge-offs were $250,000 for the first three months of 1996 compared to
$168,000 for the same period in 1995. Recoveries of $61,000 were
booked in the first three months of 1996; $134,000 in 1995. Management
believes the allowance is adequate at the March 31, 1996 level with
year to date provisions made of $35,000.
CAPITAL RESOURCES
Total stockholders equity or capital amounted to $73,431,000 at
March 31, 1996. The leverage ratio at March 31, 1996 was 8.39%.
LIQUIDITY AND INTEREST SENSITIVITY
Almost the entire deposit base is made up of core deposits with
only 8.17% of total deposits composed of certificates of deposit of
$100,000 and over. At March 31, 1996, federal funds and investment
securities maturing within one year amounted to $44,115,000, or 6.63% of
total deposits. In addition, $97,985,000 of investment securities or
14.73% 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.
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
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: May 15, 1996 BY /s/ James R. Wheeling
James R. Wheeling, President
Date: March 15, 1996 BY/s/ Ellen Simpson
Ellen Simpson, Secretary
(Accounting Officer)
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