2
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _____ TO _____
For the quarterly period ended September 30, 1997
Commission file number 0-24528
PREMIER BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
Georgia 58-1793778
- ------------------------------ ----------------
(State or other jurisdiction of (IRS employer
incorporation or organization) identification no.)
2180 Atlanta Plaza
950 East Paces Ferry Road
Atlanta, Georgia 30326
- --------------------------------------- ---------
(address of principal executive offices) (zip code)
Registrants telephone number, including area code 404-814-3090
------------
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 the latest practicable date.
Class Outstanding at September 30, 1997
- -------------------------- ---------------------------------
Common stock, $1 par value 7,923,298
PREMIER BANCSHARES, INC AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
Part I. FINANCIAL INFORMATION
Item 1. Consolidated condensed financial statements............3
Item 2. Management's discussion and analysis of financial
condition and results of operation.....................8
Part II. OTHER INFORMATION
Item 1. Legal proceedings.....................................14
Item 2. Changes in securities.................................14
Item 3. Defaults upon senior securities.......................14
Item 4. Submission of matters to a vote of security holders...14
Item 5. Other information.....................................14
Item 6. Exhibits and reports on Form 8-K......................14
PREMIER BANCSHARES, INC AND SUBSIDIARIES
----------------------------------------
CONSOLIDATED CONDENSED BALANCE SHEETS
-------------------------------------
<TABLE>
<CAPTION>
(unaudited)
Assets September 30, 1997 December 31, 1996
(dollar amounts in thousands)
<S> <C> <C>
Cash and due from banks........................ $23,097 $19,541
Interest-bearing deposits with other banks..... 1,629 2,697
Federal funds sold............................. 6,499 42,896
Securities available for sale.................. 91,579 99,732
Loans held for sale............................ 51,043 24,408
Loans.......................................... 394,704 313,289
Less: Allowance for loan losses................ (7,393) (6,568)
------- -------
Net loans................................ 387,311 306,721
Premises and equipment......................... 13,904 12,565
Other real estate owned........................ 677 950
Goodwill and other intangibles................. 2,507 2,827
Other assets................................... 8,793 7,607
------- -------
Total assets $587,039 $519,944
======== ========
Liabilities and Shareholders' Equity
Liabilities:
Deposits:
Noninterest-bearing....................... $57,502 $48,272
Interest-bearing.......................... 428,104 383,626
------- -------
Total deposits......................... 485,606 431,898
Securities sold under repurchase agreements.... 13,503 11,865
Federal Home Loan Bank advances................ 9,625 4,625
Other borrowings............................... 20,069 18,752
Other liabilities.............................. 5,703 5,610
------- -------
Total liabilities..................... 534,506 472,750
Minority interest in subsidiary --- 14
------- -------
Shareholders' Equity:
Common stock, $1 par value; authorized
20,000,000 shares authorized; issued 7,936,298
and 8,026,765 issued, respectively............ 7,936 8,027
Capital surplus................................ 23,974 25,046
Retained earnings.............................. 20,207 15,131
Unrealized gains on securities available-for-
sale, net of tax.............................. 417 109
------ -------
52,534 48,313
Treasury stock, at cost (123,494 shares)....... -- (1,133)
------- -------
Total shareholders' equity............ 52,534 47,180
------- -------
Total liabilities and shareholders' equity $587,039 $519,944
======== =======
See notes to consolidated financial statements.
</TABLE>
PREMIER BANCSHARES, INC AND SUBSIDIARIES
----------------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
---------------------------------------------
<TABLE>
<CAPTION>
(unaudited)
Three Months Ended September 30
(dollar amounts in thousands
except per share data)
1997 1996
---- ----
<S> <C> <C>
Interest income
Loans, including fees......................... $10,978 $7,695
Investment securities:
Tax-exempt............................. 127 158
Taxable................................ 1,400 1,485
Federal funds sold............................ 159 270
Other interest income......................... 43 134
----- -----
Total interest income.................. 12,707 9,742
----- -----
Interest Expense:
Deposits...................................... 5,516 4,406
Other borrowings.............................. 814 624
----- -----
Total interest expense................. 6,330 5,030
----- -----
Net interest income.................... 6,377 4,712
Provision for loan losses............................ 360 (138)
----- -----
Net interest income after provision for loan losses.. 6,017 4,850
----- -----
Noninterest Income:
Service charges on deposit accounts........... 935 749
Securities transactions, net.................. 12 --
Mortgage loan income.......................... 4,114 2,324
Gain on sale of subsidiary.................... -- --
Other noninterest income...................... 453 136
----- -----
Total noninterest income............... 5,514 3,209
----- -----
Noninterest Expense:
Salaries and employee benefits................ 4,646 3,835
Net occupancy and equipment expense........... 1,006 871
Merger related expenses....................... 261 216
Other noninterest expense..................... 1,589 2,013
----- -----
Total noninterest expense.............. 7,502 6,935
----- -----
Earnings before income taxes and
minority interest in net income of
subsidiary............................ 4,029 1,124
Income taxes......................................... 1,458 255
----- -----
Net income before minority interest in
net income of subsidiary.............. 2,571 869
Minority interest in net income of subsidiary........ -- 4
----- -----
Net income............................. $2,571 $865
======== ========
Per Share Information:
Net earnings...................................... $0.32 $0.11
Weighted average shares outstanding............... 8,108,530 7,889,299
See notes to consolidated financial statements.
</TABLE>
PREMIER BANCSHARES, INC AND SUBSIDIARIES
----------------------------------------
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
---------------------------------------------
<TABLE>
<CAPTION>
(unaudited)
Nine Months Ended September 30
(dollar amounts in thousands
except per share data)
1997 1996
---- ----
<S> <C> <C>
Interest Income
Loans, including fees......................... $29,975 $23,322
Investment securities:
Tax-exempt............................. 407 465
Taxable................................ 4,472 4,482
Federal funds sold............................ 1,035 1,037
Other interest income......................... 124 339
----- -----
Total interest income.................. 36,013 29,645
----- -----
Interest Expense:
Deposits...................................... 15,608 12,773
Other borrowings.............................. 2,100 2,024
----- -----
Total interest expense................. 17,708 14,797
----- -----
Net interest income.................... 18,305 14,848
Provision for loan losses............................. 230 (366)
----- -----
Net interest income after provision for loan
losses....................................... 18,075 15,214
----- -----
Noninterest Income:
Service charges on deposit accounts........... 2,728 2,214
Securities transactions, net.................. (29) 135
Mortgage loan income.......................... 9,881 6,326
Gain on sale of subsidiary.................... 757 --
Other noninterest income...................... 437 418
----- -----
Total noninterest income............... 13,774 9,093
----- -----
Noninterest Expense:
Salaries and employee benefits................ 13,667 11,371
Net occupancy and equipment expense........... 2,882 2,361
Merger related expense........................ 655 450
Other noninterest expense..................... 4,949 5,029
----- -----
Total noninterest expense.............. 22,153 19,211
----- -----
Earnings before income taxes and
minority interest in net income of
subsidiary............................ 9,696 5,096
Income taxes.......................................... 3,030 1,264
----- -----
Net income before minority interest in
net income of subsidiary.............. 6,666 3,832
Minority interest in net income of subsidiary......... 8 6
----- -----
Net income............................. $6,658 $3,826
======== ========
Per Share Information:
Net earnings....................................... $0.82 $0.48
Weighted average shares outstanding................ 8,073,458 7,900,915
See notes to consolidated financial statements.
</TABLE>
PREMIER BANCSHARES, INC AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Nine Months Ended September 30, 1997 and 1996
<TABLE>
<CAPTION>
(unaudited)
1997 1996
---- ----
(in thousands)
<S> <C> <C>
OPERATING ACTIVITIES
Net income before minority interest
In income of subsidiary $6,666 $3,832
Adjustments to reconcile net income to net
Cash provided by (used in) operating activities:
Depreciation 1,166 880
Amortization of intangibles 114 250
Provision for loan losses 230 (366)
Net (increases) decreases in loans held for sale (26,635) 8,667
Net realized (gains) losses on securities
available-for-sale 29 (135)
Gain on sale of subsidiary (757) -
Gain on sale of Bank charter (297) -
Other operating activities, net 957 (2,176)
------- -----
Net cash provided by (used in) operating activities (18,527) 10,952
INVESTING ACTIVITIES
Purchases of securities available-for-sale (25,951) (25,038)
Proceeds from sales of securities
available-for-sale 17,851 12,978
Proceeds from maturities of securities
available-for-sale 16,220 17,416
Net (increase) decrease in federal funds sold 36,397 (9,066)
Net decrease in interest-bearing
deposits in banks 1,068 1,133
Net increase in loans (83,435) (48,724)
Purchase of premises and equipment (2,725) (4,148)
Net cash from sale of subsidiary 800 -
------- ------
Net cash used in investing activities (39,775) (55,449)
FINANCING ACTIVITIES
Net increase in deposits 53,708 49,390
Net increase in repurchase agreements 1,639 8,229
Net increase (decrease) in other borrowings 4,454 (4,442)
Net increase (decrease) in Federal Home
Loan Bank advances 5,000 (6,500)
Cash dividends paid (2,907) (1,706)
Dividends paid to minority shareholder (12) (15)
Proceeds from exercise of stock options 169 -
Purchase of treasury stock (193) (573)
------ ------
Net cash provided by financing activities 61,858 44,383
Net increase (decrease) in cash and due
from banks 3,556 (114)
Cash and due from banks at beginning of period 19,541 18,110
------ ------
Cash and due from banks at end of period 23,097 17,996
====== ======
SUPPLEMENTAL DISCLOSURES
Cash paid for:
Interest $16,988 $14,902
Income taxes $2,290 $1,907
See notes to consolidated financial statements.
</TABLE>
Premier Bancshares, Inc and Subsidiaries
Notes to Consolidated Condensed Financial Statements
Note 1. BASIS OF PRESENTATION
The consolidated financial information included herein is unaudited;
however, such information reflects all adjustments (consisting solely of
normal recurring adjustments) which are, in the opinion of management,
necessary for a fair statement of results for the interim periods.
The results of operations for the three-month and nine-month periods ended
September 30, 1997 are not necessarily indicative of the results to be
expected for the full year.
Note 2. BUSINESS COMBINATIONS
On June 23, 1997, Premier Bancshares, Inc. merged with Central and Southern
Holding Company ("Central and Southern") of Milledgeville, Georgia. Each
share of Central and Southern's common stock issued and outstanding was
converted into and exchanged for the one share of Premier Bancshares,
Inc.'s common stock. The merger was accounted for as a pooling of
interests. All financial information has been restated to reflect the
combined operations of Premier and Central and Southern.
On August 31, 1996, First Alliance Bancorp, Inc. merged with Premier
Bancshares, Inc. The merger was accounted for as a pooling of interests.
All financial information has been restated to reflect the combined
operations of First Alliance Bancorp, Inc. and Premier Bancshares, Inc.
On June 24, 1997, the Company executed a definitive agreement of
reorganization and plan of merger with Citizens Gwinnett Bancshares, Inc., a
Duluth, Georgia-based bank holding company. This transaction will be subject
to regulatory and shareholder approval. Premier will be the surviving
corporation. In the transaction each of Citizens Gwinnett Bancshares
outstanding common shares will be converted into eight (8) shares of the
Company's common stock.
Note 3. COMMON STOCK SPLIT
On February 24, 1997, Premier Bancshares, Inc. declared a 1.8055 stock
split for shares of record as of March 6, 1997. The number of shares to
effect the stock split times the par value of $1 was transferred from
capital surplus to common stock on March 20, 1997. All prior financial
information has been restated to reflect the stock split.
Note 4. PREFERRED SECURITIES
On November 10, 1997, the Securities and Exchange Commission declared the
Company's Form S-3 Registration Statement effective and through Premier
Capital Trust I, a Delaware statutory business trust and the Company's newly
formed subsidiary, the Company issued $28,750,000 of cumulative trust
preferred securities with a distribution rate of 9.00% and a liquidation
amount of $25.00 per preferred security (the "Preferred Securities").
Concurrently with the issuance of the Preferred Securities on November 13,
1997, Premier Capital Trust I invested the proceeds thereof, together with
the consideration paid by the Company of the Trust's common securities, in
9.00% Subordinated Debentures in the aggregate principal amount of
$29,639,175. The Company owns all of the Common Securities of Premier Capital
Trust I and as a result Premier Capital Trust I will be treated for financial
reporting purposes as a subsidiary of the Company and the accounts of Premier
Capital Trust I will be included in the consolidated financial statements of
the Company for periods following November 13, 1997. The Preferred Securities
will be presented as a separate line item in the consolidated balance sheet
under the caption "Guaranteed Preferred Beneficial Interests in the Company's
Subordinated Debentures." The sole assets of Premier Capital Trust I are the
9.00% Subordinated Debentures in the aggregate principal amount of
$29,639,175 which mature on December 31, 2027. The Company has fully and
unconditionally guaranteed Premier Capital Trust I's payment obligations with
respect to the Preferred Securities.
Note 5. CURRENT ACCOUNTING DEVELOPMENTS
The Financial Accounting Standards Board has issued SFAS No. 128, "Earnings
Per Share." SFAS No. 128 establishes standards for computing and
presenting earnings per share (EPS) and applies to entities with publicly
held common stock or potential common stock. This statement simplifies the
standards for computing earnings per share previously found in APB Opinion
No. 15, Earnings per Share, and makes them comparable to international EPS
standards. It replaces the presentation of primary EPS with a presentation
of basic EPS. It also requires dual presentation of basic and diluted EPS
on the face of the statement of income for all entities with complex
capital structures and requires a reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and denominator
of the diluted EPS computation. The effective date of this Statement is
for financial statements issued for the periods ending after December 15,
1997. The adoption of this Statement is not expected to have a material
effect on earnings per share.
The Financial Accounting Standards Board (FASB) has issued Statement of
Financial Accounting Standards (SFAS) No. 125, "Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities". SFAS No.
125 was amended by SFAS No. 127 which defers the effective date of certain
provisions of SFAS No. 125 until January 1, 1998. This statement provides
accounting and reporting standards for transfers and servicing of financial
assets and extinguishments of liabilities based on consistent application of
a financial-components approach that focuses on control. It distinguishes
transfers of financial assets that are sales from transfers that are secured
borrowings. The adoption of this statement is not expected to have a material
effect on the Company's financial statments.
The FASB has issued SFAS No. 130, "Reporting Comprehensive Income". This
statement establishes standards for reporting and display of comprehensive
income and its components in a full set of general purpose financial
statements. SFAS No. 130 requires all items that are required to be
recognized under accounting standards as components of comprehensive income
to be reported in a financial statement that is displayed in equal prominence
with the other financial statements. The term "comprehensive income" is used
in the SFAS to describe the total of all components of comprehensive income
including net income. "Other comprehensive income" refer to revenues,
expenses, gains and losses that are included in comprehensive income but
excluded from earnings under current accounting standards. Currently, "other
comprehensive income" for the Company consists of items previously recorded
directly in equity under SFAS No. 115, "Accounting for Certain Investments in
Debt and Equity Securities". SFAS No. 130 is effective for financial
statements beginning after December 15, 1997.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Financial Condition
At the end of the third quarter 1997, total assets had increased
$67,096,000 from December 31, 1996. Total loans (excluding mortgage
loans held for sale), increased $81,415,000 from December 31, 1996.
Mortgage loans held for sale increased $26,635,000 for the same
period. The loan increases are attributable to increased demand for
loans in the markets the Company serves. Federal funds sold
decreased $36,397,000. Securites available for sale decreased
$8,153,000 due to maturities and calls. The proceeds from Federal
funds sold and securities were used to fund the increase in loans.
Total liabilities increased $61,756,000 from year-end 1996.
Noninterest-bearing deposits were up $9,230,000 and interest-bearing
deposits were up $44,478,000 due to the new markets being opened by
the Company. The increase in borrowings were also used to fund the increase
in loans.
The Company paid a $.09 dividend on its common stock on August 20,
1997. The financial strength of the Company continues to improve
along with the ability to pay quarterly dividends.
Results of Operations
For the three-month period ended September 30, the Company recorded
net income of $2,571,000 as compared to $865,000 for the same period
in 1996. This net increase is due primarily to the following:
Net interest income increased $1,665,000.
Provision for loan losses increased $498,000.
Total noninterest income increased $2,305,000.
Total noninterest expense increased $567,000.
Income taxes increased $1,204,000.
The reasons for these changes are discussed below.
For the nine-month period ended September 30, the Company recorded
net income of $6,658,000 as compared to $3,826,000 for the same
period in 1996. This net increase is due primarily to the
following:
Net interest income increased $3,457,000.
Provision for loan losses increased $596,000.
Total noninterest income increased $4,681,000.
Total noninterest expense increased $2,942,000.
Income taxes increased $1,766,000.
The reasons for these changes are discussed below.
Net Interest Income
- -------------------
Net interest income increased substantially in comparing the three month
periods. During the period average earning assets increased approximately
$96 million and average interest-bearing liabilities increased approximately
$89 million. Yields on earning assets increased by sixty-one (61) basis
points and costs of interest-bearing liabilities increased by ten (10)
basis points. The net interest margin increased from the comparable period
to 4.68% from 4.23%.
Net interest income increased substantially in comparing the nine month
periods. During the period average earning assets increased approximately
$83 million and average interest-bearing liabilities increased approximately
$83 million. Yields on earning assets increased by eighteen (18) basis
points and costs of interest-bearing liabilities decreased by ten (7)
basis points. The net interest margin increased from the comparable period
to 4.75% from 4.59%.
Provision for Loan Losses
- -------------------------
The Company recorded a provision of $360,000 for the third quarter
1997. The Company had net recoveries during the quarter of $63,000
from previous charge offs, the majority of recoveries being
sales finance loans. Management anticipates the net recovery trend
will continue due to the anticipated decline in charge offs and
continued recoveries of previous charge offs. Management will
monitor and adjust the level of the allowance for loan losses in
relation to this net recovery stream, as well as the overall level
of the allowance for loan losses to loans outstanding.
The Company recorded a provision of $230,000 for the nine-month
period ended September 30, 1997. Net recoveries for the period were
$669,000. Increased provisions were due to the significant increase in
loan volumes.
ASSET QUALITY (in thousands) 9/30/97 12/31/96 Change Percent
Loans past due 90 days or more $23 $0 23 N/A
Nonaccrual loans 1,070 1,425 (355) -24.9%
---- ---- ----
Total nonperforming loans 1,093 1,425 (332) -23.3%
Other real estate owned 683 949 (266) -28.0%
---- ---- ----
Total nonperforming assets $1,776 $2,374 (598) -25.2%
===== ===== =====
Nonperforming loans/Total loans 0.28% 0.45%
Nonperforming assets/Total assets 0.30% 0.46%
Nonperforming Assets
- --------------------
The table above illustrates the changes in the level of
nonperforming loans and assets from year end 1996. The level of nonperforming
assets has decreased significantly from year end 1996. Management
anticipates the levels of nonperforming loans and assets to remain at
relatively low levels.
Noninterest Income
- ------------------
The Company's main sources of noninterest income are gains on the
sale of mortgage loans and service charges on deposit accounts.
Noninterest income increased substantially in comparing the three
month periods. Gains on the sale of mortgage loans increased
$1,811,000 in comparison to the same period in 1996 due to increased
volume of mortgage loan originations.
Noninterest income increased $4,681,000 in the nine month period
compared to the same period in 1996. Again, gains on the sale of
mortgage loans made up the majority of the increase, or $3,138,000.
Noninterest Expense
- -------------------
Noninterest expense is up moderately for the three month period in
comparison to the same period in 1996. Salaries and occupancy
expense are up due to the Company's hiring of additional personnel
required to open two new branches of a subsidiary bank during the
third quarter 1997. Other noninterest expenses are down for the
three month period due to a one time SAIF assessment during the
third quarter of 1996.
Noninterest expense is up $2,942,000 for the nine month period in
comparison to the same period in 1996. Salaries and employee
benefits make up the majority of the increase due to significant growth
of the Company.
Interest Rate Sensitivity Management
- ------------------------------------
Interest rates play a major part in the net interest income of a
financial institution. The sensitivity to rate changes is known as
"interest rate risk." The repricing of interest-earning assets and
interest-bearing liabilities can influence the changes in net
interest income. As part of the Company's asset/liability
management program, the timing of repricing assets and liabilities
is referred to as Gap management. It is the policy of the Company
to maintain a Gap ratio in the one-year time horizon of .80 to 1.20.
The table below has two measures of Gap, regulatory and management
adjusted. The regulatory Gap considers only contractual maturities
or repricings. The management adjusted Gap considers such things as
prepayments on certain interest-rate sensitive assets and the
circumstances under which core deposits are repriced. Although
interest-bearing transaction accounts are available to reprice in
the three-month window, historical experience shows these deposits
to be more stable over the course of one year. This management-
adjusted Gap indicates the Company to be somewhat asset sensitive in
relation to changes in market interest rates.
GAP ANALYSIS (cumulative)
Regulatory Defined
3-month 6-month 1-year
(dollars in thousands)
Rate Sensitive Assets (RSA) 302,941 327,531 365,943
Rate Sensitive Liabilities(RSL) 223,732 304,618 393,168
------ ------ ------
RSA minus RSL (Gap) 79,209 22,913 (27,225)
======= ======= =======
Gap Ratio (RSA/RSL) 1.35 1.08 .93
Management Defined
3-month 6-month 1-year
(dollars in thousands)
Rate Sensitive Assets (RSA) 310,259 341,157 384,280
Rate Sensitive Liabilities (RSL) 162,028 255,255 356,145
------ ------ ------
RSA minus RSL (Gap) 148,231 85,902 28,135
====== ======= =======
Gap Ratio (RSA/RSL) 1.91 1.34 1.08
The Company uses simulation analysis to monitor changes in net
interest income due to changes in market interest rates. The
simulation of rising, declining, and a most likely interest rate
scenario allows management to monitor and adjust interest rate
sensitivity to minimize the impact of market interest rate swings.
Each month management updates all available data concerning cash
flows of assets and liabilities, changes in market interest rates,
and expectations as to new volumes of loans.
LIQUIDITY
- ---------
Liquidity is an important factor in the financial condition of
the Company and affects the Company's ability to meet the borrowing
needs and deposit withdrawal requirements of its customers. Assets,
consisting principally of loans and investment securities, are
funded by customer deposits, purchased funds, and borrowed funds. The
liquidity of the Company is considered adequate by regulatory standards.
The investment portfolio is one of the Company's primary
sources of liquidity. Maturities of securities provide a constant
flow of funds which are available for cash needs. Investment
securities that contractually mature within one year total $10
million. However, mortgage-backed securities and securities with
call provisions create cash flows earlier than the contractual
maturities. Estimates of prepayments on mortgage backs and call
provisions on other securities increase the forecasted cash flow
from the investment portfolio within one year to approximately $17
million. Maturities in the loan portfolio also provide a steady
flow of funds. The Company's liquidity also continues to be
enhanced by a relatively stable core deposit base. At September 30,
1997, the loan-to-deposit(excluding loans held for sale) ratio was
81%.
SHAREHOLDERS' EQUITY
The Company maintains a ratio of shareholders' equity to total
assets that is adequate relative to industry standards. The
Company's ratio of shareholders' equity to total assets was 8.95% at
September 30, 1997, compared to 9.07% at December 31, 1996. The slight
decrease can be attributed to the significant growth in assets of the
Company.
The Company and its subsidiary banks are required to comply
with capital adequacy standards established by the Federal Reserve
and the FDIC. Currently, there are two basic measures of capital
adequacy: risk-based measure and leverage measure.
The risk-based capital standards are designed to make
regulatory capital requirements more sensitive to differences in
risk profile among banks and bank holding companies, to account for
off-balance sheet exposure and to enhance the value of holding
liquid assets. The resulting capital ratios represent capital as a
percentage of total risk-weighted assets and off-balance sheet
items. Recently the Federal Reserve and the FDIC proposed that
interest rate risk be considered in computing risk-based capital
ratios.
The minimum standard for the ratio of total capital to risk-
weighted assets is 8%. At least 50% of that capital level must
consist of common equity, undivided profits and noncumulative
perpetual preferred stock, less goodwill and certain other
intangibles ("Tier I capital"). The remainder ("Tier II capital")
may consist of a limited amount of other preferred stock, mandatory
convertible securities, subordinated debt and a limited amount of
the allowance for loan losses. The sum of Tier I capital and Tier
II capital is "total risk-based capital."
The Federal Reserve and the FDIC also adopted regulations which
supplement the risk-based guidelines to include a minimum leverage
ratio of 3% of Tier I capital to total assets less goodwill (the
"leverage ratio"). Depending upon the risk profile of the
institution and other factors, the regulatory agencies may require a
leverage 1% to 2% higher than the minimum 3% level.
Capital Levels
9/30/97
Tier 1 Capital Leverage Ratio 8.55%
Tier 1 Risk-based Capital Ratio 10.74%
Tier 2 Risk-based Capital Ratio 1.25%
-------
Total Risk-based Capital Ratio 11.99%
=====
Part II. Other Information
Item 1. Legal Proceedings
(Not Applicable)
Item 2. Changes in Securities
(Not Applicable)
Item 3. Defaults Upon Senior Securities
(Not Applicable)
Item 4. Submissions of Matters to a Vote of Securities Holders
(Not Applicable)
Item 5. Other Information
(Not Applicable)
Item 6. Exhibits and Reports on Form 8-K
(a) The following are the Exhibits required by Item 601 and
Regulation S-K:
Exhibit
Number Description of Exhibits
- ------ -----------------------
3.1 Articles of Incorporation of the Registrant, as amended, through
February 6, 1997. (Incorporated by reference as Exhibit 3.1 to the
Registrant's Form 10-K for the fiscal year ended December 31, 1996).
3.2 Articles of Amendment dated February 6, 1997 (Incorporated by
reference as Exhibit 3.1 to the Registrant's Form 10-K for the
fiscal year ended December 31, 1996).
3.3 Bylaws of the Registrant (Incorporated by reference as Exhibit 3.2
from the Registrant's Form 10-QSB for the quarter ended September
30, 1996).
4.1 Form of Stock Certificate (Incorporated by reference as Exhibit 4.1
to the Registant's Form 10-K for the fiscal year ended December 31,
1996).
10.1 Individual Director's Defined Benefit Plan Agreements, dated January
1, 1994, between First Alliance Bank and each of its directors.
(Incorporated by reference as Exhibit 10.6 to the Registrant's Form
10-KSB for the year ended December 31, 1996).
10.2 Employment Agreement dated as of July 1, 1995 by and among Premier,
First Alliance Bank and J. Edward Mulkey, Jr. (Incorporated by
reference as Exhibit 10.5 to the Registrant's Form 10-KSB for the
fiscal year ended December 31, 1995).
10.3 First Alliance Bank 1995 Stock Option Plan, dated as of August 8,
1995 and amended as of March 12, 1996, and related form of employee
incentive stock option agreement. (Incorporated by reference as
Exhibit 10.5 to the Registrant's Form 10-KSB for the fiscal year
ended December 31, 1995).
10.4 Guaranty, dated March 25, 1996 by Premier relating to a $2,000,000
loan made by The Bankers Bank to Interim Alliance Corporation (d/b/a
Alliance Finance). (Incorporated by reference as Exhibit 10.5 to
the Registrant's Form 10-KSB for the fiscal year ended December 31,
1995).
10.5 Employment agreement dated as of January 1, 1997 by and between
Premier Lending Corporation and George S. Phelps. (Incorporated by
reference as Exhibit 10.4 to the Registrant's Form 10-K for the
fiscal year ended December 31, 1996).
10.6 Employment agreement dated as of January 1, 1997 by and between
Premier Lending Corporation and Michael W. Lane. (Incorporated by
reference as Exhibit 10.5 to the Registrant's Form 10-K for the
fiscal year ended December 31, 1996).
10.7 Employment agreement dated as of January 1, 1997 by and between
Premier Lending Corporation and Brian D. Schmitt. (Incorporated by
reference as Exhibit 10.6 to the Registrant's Form 10-K for the
fiscal year ended December 31, 1996).
10.8 Amendment to Employment Agreement dated as of January 1, 1997 by and
between First Alliance/Premier Bancshares, Inc. and Darrell D.
Pittard. (Incorporated by reference as Exhibit 10.7 to the
Registrant's Form 10-K for the fiscal year ended December 31, 1996).
10.9 Employment agreement by and among Premier Bancshares, Inc., Premier
Lending Corporation and Darrell D. Pittard. (Incorporated by
reference as Exhibit 10.8 to the Registrant's Form 10-K for the
fiscal year ended December 31, 1996).
10.10 Amended and Restated Stock Purchase Agreement by and between Premier
Bancshares, Inc. (formerly known as First Alliance/Premier
Bancshares, Inc.) and Net.B@nk, Inc. dated December 19, 1996.
(Incorporated by reference as Exhibit 10.9 to the Registrant's Form
10-K for the fiscal year ended December 31, 1996).
10.11 First amendment to the Amended and Restated Stock Purchase Agreement
by and between Premier Bancshares, Inc. and Net.B@nk, Inc. dated
December 19, 1996. (Incorporated by reference as Exhibit 10.10 to
the Registrant's Form 10-K for the fiscal year ended December 31,
1996).
10.12 Second amendment to the Amended and Restated Stock Purchase
Agreement by and between Premier Bancshares, Inc. and Net.B@nk, Inc.
dated May 31, 1997.
10.13 Purchase and Assumption Agreement by and between Premier Bank, FSB
and First Alliance Bank dated December 19, 1996. (Incorporated by
reference as Exhibit 10.11 to the Registrant's Form 10-K for the
fiscal year ended December 31, 1996).
10.14 First amendment to Purchase and Assumption Agreement by and between
Premier Bank, FSB and First Alliance Bank dated March 13, 1997.
(Incorporated by reference as Exhibit 10.12 to the Registrant's
Form 10-K for the fiscal year ended December 31, 1996).
10.15 Second amendment to Purchase and Assumption Agreement by and
between Premier Bank, FSB and First Alliance Bank dated March 25,
1997. (Incorporated by reference as Exhibit 10.13 to the
Registrant's Form 10-K for the fiscal year ended December 31, 1996).
10.16 Third amendment to Purchase and Assumption Agreement by and between
Premier Bank, FSB and First Alliance Bank dated May 31, 1997.
(Incorporated by reference as Exhibit 10.16 to the Registrant's Form
10-Q for the quarter ended June 30, 1997).
10.17 Premier Bancshares, Inc. 1997 Stock Option Plan. (Incorporated by
reference from Appendix D to the Joint Proxy Statement/Prospectus
contained in Premier's Form S-4 Registration Statement No. 333-
24537).
10.18 Premier Bancshares, Inc. Amended and Restated Directors' Stock
Option Plan. (Incorporated by reference from Appendix E to the
Joint Proxy Statement/Prospectus contained in Premier's Form S-4
Registration Statement No. 333-24537).
10.19 Agreement and Plan of Reorganization, dated February 3, 1997,
between Premier and Central and Southern Holding Company (included
as Appendix A to the Joint Proxy Statement/Prospectus contained in
Premier's Form S-4 Registration Statement No. 333-24537).
10.20 Amendment to Agreement and Plan of Reorganization dated March 26,
1997, between Premier and Central and Southern Holding Company
(included as Appendix "A" to the Joint Proxy Statement/Prospectus
contained in Premier's Form S-4 Registration Statement No. 333-
24537).
10.21 Agreement for Purchase of Certain Assets and Assumption of Certain
Liabilities by and between The Central and Southern Bank of North
Georgia, FSB and The Central and Southern Bank of Georgia dated
August 11, 1997. (Incorporated by reference as Exhibit 10.21 to the
Registrant's Form 10-Q for the quarter ended June 30, 1997).
10.22 Agreement and Plan of Merger by and among Premier Bancshares, Inc.,
Premier Bank and The Central and Southern Bank of North Georgia, FSB
dated August 11, 1997. (Incorporated by reference as Exhibit 10.22
to the Registrant's Form 10-Q for the quarter ended June 30, 1997).
10.23 Agreement and Plan of Reorganization by and among Premier
Bancshares, Inc. and Citizens Gwinnett Bancshares, Inc. as amended
(included as Appendix A to the Joint Proxy Statement/Prospectus
contained in Premier's Form S-4 Registration Statement No. 333-
36775).
10.24 Agreement and Plan of Merger by and among Premier Bancshares, Inc.,
Premier Bank and Traditional Mortgage.
27 Financial Data Schedule
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Corporation has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
PREMIER BANCSHARES, INC.
- ------------------------
Registrant
Date________________ Darrell D. Pittard
------------------
Darrell D. Pittard
Chief Executive Officer
Date________________ Michael E. Ricketson
--------------------
Michael E. Ricketson
Chief Accounting Officer
EXHIBIT INDEX
Exhibit
Number Description of Exhibits
- ------ -----------------------
3.1 Articles of Incorporation of the Registrant, as amended, through
February 6, 1997. (Incorporated by reference as Exhibit 3.1 to the
Registrant's Form 10-K for the fiscal year ended December 31, 1996).
3.2 Articles of Amendment dated February 6, 1997 (Incorporated by
reference as Exhibit 3.1 to the Registrant's Form 10-K for the
fiscal year ended December 31, 1996).
3.3 Bylaws of the Registrant (Incorporated by reference as Exhibit 3.2
from the Registrant's Form 10-QSB for the quarter ended September
30, 1996).
4.1 Form of Stock Certificate (Incorporated by reference as Exhibit 4.1
to the Registrant's Form 10-K for the fiscal year ended December 31,
1996).
10.1 Individual Director's Defined Benefit Plan Agreements, dated January
1, 1994, between First Alliance Bank and each of its directors.
(Incorporated by reference as Exhibit 10.6 to the Registrant's Form
10-KSB for the year ended December 31, 1996).
10.2 Employment agreement dated as of July 1, 1995 by and among Premier,
First Alliance Bank and J. Edward Mulkey, Jr. (Incorporated by
reference as Exhibit 10.5 to the Registrant's Form 10-KSB for the
fiscal year ended December 31, 1995).
10.3 First Alliance Bank 1995 Stock Option Plan, dated as of August 8,
1995 and amended as of March 12, 1996, and related form of employee
incentive stock option agreement. (Incorporated by reference as
Exhibit 10.5 to the Registrant's Form 10-KSB for the fiscal year
ended December 31, 1995).
10.4 Guaranty, dated March 25, 1996 by Premier relating to a $2,000,000
loan made by The Bankers Bank to Interim Alliance Corporation (d/b/a
Alliance Finance). (Incorporated by reference as Exhibit 10.5 to
the Registrant's Form 10-KSB for the fiscal year ended December 31,
1995).
10.5 Employment agreement dated as of January 1, 1997 by and between
Premier Lending Corporation and George S. Phelps. (Incorporated by
reference as Exhibit 10.4 to the Registrant's Form 10-K for the
fiscal year ended December 31, 1996).
10.6 Employment agreement dated as of January 1, 1997 by and between
Premier Lending Corporation and Michael W. Lane. (Incorporated by
reference as Exhibit 10.5 to the Registrant's Form 10-K for the
fiscal year ended December 31, 1996).
10.7 Employment agreement dated as of January 1, 1997 by and between
Premier Lending Corporation and Brian D. Schmitt. (Incorporated by
reference as Exhibit 10.6 to the Registrant's Form 10-K for the
fiscal year ended December 31, 1996).
10.8 Amendment to Employment Agreement dated as of January 1, 1997 by and
between First Alliance/Premier Bancshares, Inc. and Darrell D.
Pittard. (Incorporated by reference as Exhibit 10.7 to the
Registrant's Form 10-K for the fiscal year ended December 31, 1996).
10.9 Employment agreement by and among Premier Bancshares, Inc., Premier
Lending Corporation and Darrell D. Pittard. (Incorporated by
reference as Exhibit 10.8 to the Registrant's Form 10-K for the
fiscal year ended December 31, 1996).
10.10 Amended and Restated Stock Purchase Agreement by and between Premier
Bancshares, Inc. (formerly known as First Alliance/Premier
Bancshares, Inc.) and Net.B@nk, Inc. dated December 19, 1996.
(Incorporated by reference as Exhibit 10.9 to the Registrant's Form
10-K for the fiscal year ended December 31, 1996).
10.11 First amendment to the Amended and Restated Stock Purchase Agreement
by and between Premier Bancshares, Inc. and Net.B@nk, Inc. dated
December 19, 1996. (Incorporated by reference as Exhibit 10.10 to
the Registrant's Form 10-K for the fiscal year ended December 31,
1996).
10.12 Second amendment to the Amended and Restated Stock Purchase
Agreement by and between Premier Bancshares, Inc. and Net.B@nk, Inc.
dated May 31, 1997.
10.13 Purchase and Assumption Agreement by and between Premier Bank, FSB
and First Alliance Bank dated December 19, 1996. (Incorporated by
reference as Exhibit 10.11 to the Registrant's Form 10-K for the
fiscal year ended December 31, 1996).
10.14 First amendment to Purchase and Assumption Agreement by and between
Premier Bank, FSB and First Alliance Bank dated March 13, 1997.
(Incorporated by reference as Exhibit 10.12 to the Registrant's
Form 10-K for the fiscal year ended December 31, 1996).
10.15 Second amendment to Purchase and Assumption Agreement by and
between Premier Bank, FSB and First Alliance Bank dated March 25,
1997. (Incorporated by reference as Exhibit 10.13 to the
Registrant's Form 10-K for the fiscal year ended December 31, 1996).
10.16 Third amendment to Purchase and Assumption Agreement by and between
Premier Bank, FSB and First Alliance Bank dated May 31, 1997.
(Incorporated by reference as Exhibit 10.16 to the Registrant's Form
10-Q for the quarter ended June 30, 1997).
10.17 Premier Bancshares, Inc. 1997 Stock Option Plan. (Incorporated by
reference from Appendix D to the Joint Proxy Statement/Prospectus
contained in Premier's Form S-4 Registration Statement No. 333-
24537).
10.18 Premier Bancshares, Inc. Amended and Restated Directors' Stock
Option Plan. (Incorporated by reference from Appendix E to the
Joint Proxy Statement/Prospectus contained in Premier's Form S-4
Registration Statement No. 333-24537).
10.19 Agreement and Plan of Reorganization, dated February 3, 1997,
between Premier and Central and Southern Holding Company (included
as Appendix A to the Joint Proxy Statement/Prospectus contained in
Premier's Form S-4 Registration Statement No. 333-24537).
10.20 Amendment to Agreement and Plan of Reorganization dated March 26,
1997, between Premier and Central and Southern Holding Company
(included as Appendix "A" to the Joint Proxy Statement/Prospectus
contained in Premier's Form S-4 Registration Statement No. 333-
24537).
10.21 Agreement for Purchase of Certain Assets and Assumption of Certain
Liabilities by and between The Central and Southern Bank of North
Georgia, FSB and The Central and Southern Bank of Georgia dated
August 11, 1997. (Incorporated by reference as Exhibit 10.21 to the
Registrant's Form 10-Q for the quarter ended June 30, 1997).
10.22 Agreement and Plan of Merger by and among Premier Bancshares, Inc.,
Premier Bank and The Central and Southern Bank of North Georgia, FSB
dated August 11, 1997. (Incorporated by reference as Exhibit 10.22
to the Registrant's Form 10-Q for the quarter ended June 30, 1997).
10.23 Agreement and Plan of Reorganization by and among Premier
Bancshares, Inc. and Citizens Gwinnett Bankshares, Inc. as amended
(included as Appendix A to the Joint Proxy Statement/Prospectus
contained in Premier's Form S-4 Registration Statement No. 333-
36775).
10.24 Agreement and Plan of Merger by and among Premier Bancshares, Inc.,
Premier Bank and Traditional Mortgage.
27 Financial Data Schedule.
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