<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
PREMIER FINANCIAL BANCORP, INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF
PREMIER FINANCIAL BANCORP, INC.
TO BE HELD ON MAY 6, 1997
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Premier
Financial Bancorp, Inc. will be held at the Griffin Gate Clubhouse, Sugar Maple
Lane, Lexington, Kentucky*, on Tuesday, May 6, 1997 at 10:00 a.m., Eastern Time,
for the following purposes:
(1) To elect seven (7) directors to serve until the 1998 Annual
Meeting of Shareholders and until their successors are elected
and qualified;
(2) To ratify the appointment of Eskew & Gresham, P.S.C. as the
Company's independent accountants for the 1997 fiscal year; and
(3) To transact such other business as may properly come before the
meeting.
The Board of Directors has fixed the close of business on April 21, 1997 as
the record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting or any adjournment thereof. Only shareholders of
record at the close of business on the record date will be entitled to notice of
and to vote at the meeting.
EVEN IF YOU PLAN TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED STAMPED ENVELOPE.
SHAREHOLDERS ATTENDING THE MEETING IN PERSON MAY VOTE IN PERSON EVEN THOUGH THEY
HAVE PREVIOUSLY SENT IN A PROXY.
By Order of the Board of Directors.
E.V. Holder, Jr., Secretary
Georgetown, Kentucky
April 23, 1997
* Griffin Gate Clubhouse is located in the Griffin Gate Community, which
is one mile South on Newtown Pike (State Route 922) from Exit 115 on I-64 and
I-75 at the third traffic signal.
<PAGE>
PREMIER FINANCIAL BANCORP, INC.
120 N. HAMILTON STREET
GEORGETOWN, KENTUCKY 40324-1706
________________
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
MAY 6, 1997
________________
INTRODUCTION
This Proxy Statement is being furnished to shareholders of Premier
Financial Bancorp, Inc., a Kentucky corporation (the "Company"), in connection
with the solicitation of proxies by the Board of Directors of the Company from
holders of record of the Company's outstanding shares of common stock, without
par value per share (the "Common Stock"), as of the close of business on April
21, 1997, for use at the Annual Meeting of Shareholders of the Company (the
"Annual Meeting") to be held on Tuesday, May 6, 1997, at 10:00 a.m. (Eastern
Time) at the Griffin Gate Clubhouse, Sugar Maple Lane, Lexington, Kentucky, and
at any adjournment or postponement thereof. The date of this Proxy Statement is
April 23, 1997, which is the date this Proxy Statement is first being mailed to
the Company's shareholders.
PURPOSES OF THE ANNUAL MEETING
At the Annual Meeting, holders of shares of Common Stock will be asked to
consider and vote upon the following matters:
(1) The election of seven directors of the Company who will serve until
the 1998 Annual Meeting and until their successors are elected and qualified;
(2) The ratification of the appointment of Eskew & Gresham, P.S.C. as the
Company's independent accountants for the fiscal year ending December 31, 1997;
and
(3) The transaction of such other business as may properly come before the
Annual Meeting.
The Board of Directors has unanimously recommended that shareholders vote
"FOR" the election of the Board of Director's seven nominees for election as
directors of the Company, and "FOR" the ratification of the Board of Director's
appointment of Eskew & Gresham, P.S.C. as the Company's independent accountants.
As of the date of this Proxy Statement, the Board of Directors knows of no other
business to come before the Annual Meeting.
<PAGE>
VOTING RIGHTS AND PROXY INFORMATION
Only holders of record of shares of Common Stock as of the close of
business on April 21, 1997 will be entitled to notice of and to vote at the
Annual Meeting or any adjournment or postponement thereof. Such holders of
shares of Common Stock are entitled to one vote per share on any matter, other
than the election of directors, that may properly come before the Annual
Meeting. In the election of directors, holders of Common Stock have cumulative
voting rights whereby each holder is entitled to vote the number of shares of
Common Stock held multiplied by seven (the number of directors to be elected at
the Annual Meeting), and each holder may cast the whole number of votes for one
candidate or distribute such votes among two or more candidates. The presence,
either in person or by properly executed proxy, of the holders of a majority of
the outstanding shares of Common Stock as of the record date is necessary to
constitute a quorum at the Annual Meeting. As of April 21, 1997, there were
4,209,090 shares of Common Stock outstanding.
Those nominees for election to the Board of Directors receiving the seven
highest number of votes in the election of directors will be elected to the
Board. The appointment of Eskew & Gresham, P.S.C. as the Company's independent
accountants for the 1997 year will be ratified, if the votes cast in favor the
ratification exceed the votes cast against ratification.
All shares of Common Stock that are represented at the Annual Meeting by
properly executed proxies received prior to or at the Annual Meeting and not
revoked will be voted at the Annual Meeting in accordance with the instructions
indicated in such proxies. If no instructions are indicated, such proxies will
be voted for the election of the Board of Director's seven nominees for election
as directors of the Company (or, if deemed appropriate by the individuals
appointed in the proxies, cumulatively voted for less than all of the Board's
nominees to ensure the election of as many of the Board's nominees as possible)
and for the ratification of the appointment of Eskew & Gresham, P.S.C. as the
Company's independent accountants.
Any proxy given pursuant to this solicitation may be revoked by the person
giving it at any time before it is voted. Proxies may be revoked by (i) filing
with the Secretary of the Company, at or before the Annual Meeting, a written
notice of revocation bearing a later date than the proxy, (ii) duly executing a
subsequent proxy relating to the same shares of Common Stock and delivering it
to the Secretary of the Company at or before the Annual Meeting or (iii)
attending the Annual Meeting and voting in person (although attendance at the
Annual Meeting will not in and of itself constitute a revocation of a proxy).
Any written notice revoking a proxy should be sent to the Company, to the
attention of E.V. Holder, Jr., Secretary.
The Company will bear the cost of this solicitation. In addition to
solicitation by mail, the Company will request banks, brokers and other
custodian nominees and fiduciaries to supply proxy material to the beneficial
owners of Common Stock, and will reimburse them for their expenses in so doing.
Certain directors, officers and other employees of the Company, not specially
employed for this purpose, may solicit proxies, without additional remuneration
therefor, by personal interview, mail, telephone, facsimile or other electronic
means.
2
<PAGE>
ANNUAL REPORT
The Company's 1996 Annual Report, which includes audited consolidated
financial statements, accompanies this Proxy Statement. The Company will
furnish without cost to any shareholder, upon request, a copy of the Company's
Annual Report on Form 10-K filed with the Securities and Exchange Commission.
Requests should be in writing and directed to J. Howell Kelly, President,
Premier Financial Bancorp, Inc., 120 N. Hamilton Street, Georgetown, Kentucky
40324-1706.
PRINCIPAL SHAREHOLDERS
As of the Annual Meeting's record date, the following individuals or
entities reported beneficial ownership of Common Stock in excess of 5% of the
Company's outstanding Common Stock:
NAME AND ADDRESS NUMBER OF SHARES PERCENTAGE OF
OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) OUTSTANDING SHARES
Marshall T. Reynolds 525,774 12.49%
P.O. Box 4040
Huntington, West Virginia 25729
Joan C. Edwards 346,050 8.22%
2100 South Ocean Lane
Ft. Lauderdale, Florida 33316
Brinson Partners, Inc. 270,100 6.42%
209 South LaSalle
Chicago, Illinois 60604
__________
(1) The information contained in this column is based upon information
furnished to the Company by the named individuals and the shareholder
records of the Company. Except where otherwise indicated, this column
represents the number of shares beneficially owned, which includes shares
as to which a person has sole or shared voting and/or investment power.
3
<PAGE>
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY)
A board of seven directors of the Company is to be elected at the Annual
Meeting, each of whom is to serve, subject to the provisions of the Bylaws,
until the 1998 Annual Meeting and until his or her successor is duly elected and
qualified. The names of the nominees proposed for election as directors, all of
whom are presently directors of the Company, are set forth below and the
following information is furnished with respect to each:
<TABLE>
<CAPTION>
COMMON
DIRECTOR OF STOCK PERCENTAGE
COMPANY BENEFICIALLY OF
PRINCIPAL OCCUPATION CONTINUOUSLY OWNED AS OUTSTANDING
NOMINEE OR EMPLOYMENT(1) AGE SINCE OF 4/21/972 SHARES
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Toney Adkins Vice President - 47 7/12/91 5,586 less than 1%
Administration, Champion
Industries, Inc. (commercial
printing and office supplies)(3)
Gardner E. Daniel Senior Vice President and 61 4/11/95 28,872 less than 1%
Assistant Secretary of the
Company; President and Chief
Executive Officer of the
Company's subsidiaries,
Georgetown Bank and Trust
Company, Georgetown,
Kentucky, and Citizens Bank,
Sharpsburg, Kentucky(4)
E.V. Holder, Jr. Attorney at Law 64 7/12/91 1,500 less than 1%
Wilbur M. Jenkins Retired Business Owner (cable 69 4/11/95 114,610 2.7%
manufacturing)
J. Howell Kelly President and Chief Executive 50 2/14/95 15,250(8) less than 1%
Officer of the Company(5)
Benjamin T. Pugh Executive Vice President and 48 7/12/91 15,380(8) less than 1%
Treasurer of the Company;
President and Chief Executive
Officer of the Company's
subsidiaries, Citizens Deposit
Bank and Trust Company,
Vanceburg, Kentucky and
Bank of Germantown,
Germantown, Kentucky;
Chairman of Premier Data
Services, Inc.(6)
Marshall T. Reynolds Chairman and Chief Executive 60 1/19/96 525,774 12.5%
Officer, Champion Industries,
Inc. (commercial printing and
office supplies)(7)
All directors and 706,972 16.8%
executive officers as
a group (7 in number
including the above-
named persons)
</TABLE>
4
<PAGE>
_______________
(1) Except where otherwise indicated, this principal occupation or employment
has continued during the past five years.
(2) The information contained in this column is based upon information
furnished to the Company by the named individuals and the shareholder
records of the Company. Except where otherwise indicated, this column
represents the number of shares beneficially owned, which includes shares
as to which a person has sole or shared voting and/or investment power.
(3) Mr. Adkins has held this position since November 18, 1995. Prior to that
time he was President of KYOWVA Corrugated, Inc. (corrugated box
manufacturer).
(4) Mr. Daniel became Vice President of the Company April 11, 1995 and
Assistant Secretary on January 19, 1996. Mr. Daniel has served as
President of Georgetown Bank and Trust Company since April, 1992.
(5) Mr. Kelly became Chief Executive Officer of the Company on January 19, 1996
and President of the Company on February 14, 1995. Mr. Kelly has been a
director of Cambridge Financial Services, Inc., Iselin, New Jersey, a
financial advisory and management consulting firm, since 1992. Prior to
1992, Mr. Kelly was an independent consultant providing financial advice to
financial institutions, individuals and industrial corporations. From 1983
until December 1994, Mr. Kelly also served as a director of Banc One West
Virginia, Inc. (or its predecessor, Key Centurion Bancshares, Inc.) and
served as Chairman of that corporation's audit committee.
(6) Mr. Pugh assumed the positions of Executive Vice President and Treasurer on
January 19, 1996. Prior to January 19, 1996, Mr. Pugh was Chief Executive
Officer of the Company and prior to February 14, 1995, also its President.
(7) Mr. Reynolds serves as the Company's Chairman of the Board. From 1985 to
November, 1993 Mr. Reynolds also served as Chairman of the Board of
Directors of Banc One West Virginia, Inc. (or its predecessor, Key
Centurion Bancshares, Inc.).
(8) Includes 14,000 shares that the individual has the right to acquire
pursuant to a currently exercisable stock option at an exercise price of
$13 per share.
THE COMPANY BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH
OF THE COMPANY'S NOMINEES FOR ELECTION AS A DIRECTOR.
The Board of Directors does not contemplate that any of the nominees will
be unable to accept election as a director for any reason. However, in the
event that one or more of such nominees is unable or unwilling to serve, the
persons named in the proxies or their substitutes shall have authority,
according to their judgment, to vote or to refrain from voting for other
individuals as directors.
The Board of Directors considers nominations of candidates for election as
directors. The Company's Bylaws establish an advance notice procedure for
shareholders to make nominations of candidates for election as directors (the
"Shareholder Notice Procedure"). The Shareholder Notice Procedure provides that
only persons who are nominated by, or at the direction of, the Board of
Directors, or by a shareholder who has given timely written notice to the
Secretary of the Company prior to the meeting at which directors are to be
elected, will be eligible for election as directors of the Company. Under the
Shareholder Notice Procedure, to be timely, notice of shareholder nominations to
be made at an annual or special meeting must be received by the Company not less
than 14 days nor more than 50 days prior to the scheduled date of the meeting
(or, if less than 21 days' notice of the date of the meeting is given, the 7th
day following the day such notice was given).
Under the Shareholder Notice Procedure, a shareholder's notice to the
Company proposing to nominate a person for election as a director must contain
certain information, including, without
5
<PAGE>
limitation, the identity and address of the nominating shareholder, the
number of shares of Common Stock that are owned by such shareholder and the
name and address of the proposed nominee. If the Chairman of the Board or other
officer presiding at a meeting determines that a person was not nominated in
accordance with the Shareholder Notice Procedure, such person will not be
eligible for election as a director.
By requiring advance notice of nominations by shareholders, the Shareholder
Notice Procedure affords the Board an opportunity to consider the qualifications
of the proposed nominees and, to the extent deemed necessary or desirable by the
Board, to inform shareholders about such qualifications.
CERTAIN INFORMATION CONCERNING THE BOARD OF DIRECTORS
Directors of the Company who are not full time employees of the Company or
any subsidiary are paid $500 for each meeting of the Board attended. During
1996, there were a total of four meetings of the Company's Board of Directors.
The Executive Committee of the Board of Directors of the Company held two
meetings during 1996. On January 19, 1996, the Board established an Audit
Committee, of which the following three non-employee directors are members:
Toney Adkins, E.V. Holder, Jr. and Wilbur M. Jenkins. The Board of Directors of
the Company has not established a Nominating Committee or a Compensation
Committee.
The Company's Chairman of the Board, Marshall T. Reynolds, serves as a
director of the following publicly held companies or banks whose shares are
registered under the Exchange Act: Abigail Adams Bancorp, Inc., Washington,
D.C.; Champion Industries, Inc., Huntington, West Virginia; and First Guaranty
Bank, Hammond, Louisiana.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based solely on written representations that no reports were required, the
Company believes that during the fiscal year ended December 31, 1996, all filing
requirements under Section 16(a) of the Securities Exchange Act of 1934
applicable to its executive officers and directors were complied with.
EXECUTIVE OFFICERS OF THE COMPANY
The following table sets forth the names and ages of all executive officers
of the Company and their positions.
Name Age Position
---- --- --------
Gardner E. Daniel 61 Senior Vice President and
Assistant Secretary of the
Company; President and Chief
Executive Officer of the
Company's subsidiaries,
Georgetown Bank and Trust
Company, Georgetown, Kentucky,
and Citizens Bank, Sharpsburg,
Kentucky
E.V. Holder, Jr. 64 Secretary
6
<PAGE>
J. Howell Kelly 50 President and Chief Executive
Officer of the Company
Benjamin T. Pugh 48 Executive Vice President and
Treasurer of the Company;
President and Chief Executive
Officer of Citizens Bank and
Trust Company, Vanceburg,
Kentucky, President and Chief
Executive Officer of Bank of
Germantown, Germantown,
Kentucky and Chairman of
Premier Data Services, Inc.
Marshall T. Reynolds 60 Chairman of the Board
For additional information about these executive officers, see "ELECTION OF
DIRECTORS.'
________________
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes compensation earned in 1996, 1995 and 1994
by the Company's Chief Executive Officer and certain of the Company's other
executive officers who earned a salary and/or bonus in 1996 that exceeded
$100,000. In accordance with rules of the Securities and Exchange Commission,
the compensation of the Company's other executive officers is not required to be
disclosed because none of these executive officers earned a salary and/or bonus
in 1996 that exceeded $100,000.
7
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG TERM
COMPENSATION
-------------------------------------------------------
OTHER ALL OTHER
ANNUAL SECURITIES COMPEN-
NAME AND PRINCIPAL POSITION YEAR SALARY COMPENSA- UNDERLYING SATION ($)
($) BONUS ($) TION ($) OPTIONS(#) (1)
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J. HOWELL KELLY 1996 110,807 36,000 16,116 20,000 9,105
PRESIDENT & CEO(2) ---------------------------------------------------------------------------------
1995 82,385 36,000 5,325 ------ -------
- --------------------------------------------------------------------------------------------------------------
BENJAMIN T. PUGH
EXECUTIVE PRESIDENT(3) 1996 90,536 36,000 3,450 20,000 7,901
---------------------------------------------------------------------------------
1995 82,500 36,000 3,600 ------ 7,395
---------------------------------------------------------------------------------
1994 80,000 30,000 2,700 ------ 7,386
- --------------------------------------------------------------------------------------------------------------
GARDNER E. DANIEL
SENIOR VICE PRESIDENT(4) 1996 87,715 15,000 3,600 ------ 6,414
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
1995 83,178 15,000 2,100 ------ ------
---------------------------------------------------------------------------------
---------------------------------------------------------------------------------
1994 79,891 8,250 1,250 ------ ------
- --------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------
</TABLE>
________________
(1) EMPLOYER CONTRIBUTIONS TO THE COMPANY'S PROFIT SHARING PLAN.
(2) MR. KELLY BECAME PRESIDENT AND CHIEF EXECUTIVE OFFICER ON FEBRUARY 14,
1995. THE SALARY FOR 1995 INCLUDES $17,000 PAID BY CITIZENS DEPOSIT
BANK AND TRUST COMPANY DURING THE PERIOD OF JANUARY 1, 1995 THROUGH
APRIL 30, 1995 FOR SERVICES RENDERED TO THAT BANK SUBSIDIARY. OTHER
ANNUAL COMPENSATION INCLUDES $14,400 IN DIRECTOR'S FEES PAID BY BANK
SUBSIDIARIES OF THE COMPANY AND PERSONAL USE OF A COMPANY AUTOMOBILE
VALUED AT $1,716.
(3) SALARY AND BONUS AMOUNTS FOR ALL YEARS WERE PAID BY THE COMPANY'S
SUBSIDIARY, CITIZENS DEPOSIT BANK AND TRUST COMPANY, FOR SERVICES
RENDERED BY MR. PUGH AS PRESIDENT AND CHIEF EXECUTIVE OFFICER OF THAT
BANK SUBSIDIARY. OTHER ANNUAL COMPENSATION INCLUDES DIRECTOR'S FEES
PAID BY BANK SUBSIDIARIES OF THE COMPANY.
(4) SALARY AND BONUS AMOUNTS FOR ALL YEARS WERE PAID BY THE COMPANY'S
SUBSIDIARY, GEORGETOWN BANK & TRUST, FOR SERVICES RENDERED BY MR.
DANIEL AS PRESIDENT AND CHIEF EXECUTIVE OFFICER OF THAT BANK
SUBSIDIARY. OTHER ANNUAL COMPENSATION INCLUDES DIRECTOR'S FEES PAID
BY BANK SUBSIDIARIES OF THE COMPANY.
8
<PAGE>
STOCK OPTION GRANTS
The following table contains certain information with respect to stock
options granted in 1996 under the Company's 1996 Employee Stock Ownership
Incentive Plan to the named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
INDIVIDUAL GRANTS
- --------------------------------------------------------------------------------------------------------------
POTENTIAL REALIZABLE
VALUE AT ASSUMED
RATES OF STOCK PRICE
APPRECIATION FOR
OPTION TERM (10
YEARS)(4)
- --------------------------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS EMPLOYEES BASE PRICE EXPIRATION
NAME GRANT GRANTED IN FISCAL ($/SH) DATE(2) 5%(3) 10%(3)
DATE (#)(1) YEAR
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
J. HOWELL KELLY 5/15/96 20,000 50% 13.00 5/15/07 163,51`3 414,373
- --------------------------------------------------------------------------------------------------------------
BENJAMIN T. PUGH 5/15/96 20,000 50% 13.00 5/15/07 163,513 414,373
- --------------------------------------------------------------------------------------------------------------
</TABLE>
_______________
(1) Options for 7,000 shares became exercisable on November 15, 1996, options
for an additional 7,000 shares became exercisable on April 1, 1997 and
options for an additional 2,000 shares will become exercisable on April 1,
1998, April 1, 1999 and April 1, 2000 if on such vesting dates the
individual remains employed with the Company (subject to earlier vesting in
circumstances of death, disability or a change in control of the Company).
(2) The stock options are subject to termination prior to their expiration date
in the event of termination of employment.
(3) The potential realizable value reflected in the table represents the
difference between (i) the price the Common Stock would attain at the end
of the option's 10-year term if the price appreciated from the date of the
stock option grant at a rate of 5% or 10% per year (as the case may be),
and (ii) the option exercise price. The amounts shown in the table are the
result of multiplying the amount described above by the number of options
granted to the respective individual on the applicable grant date.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
- --------------------------------------------------------------------------------
VALUE OF
# OF SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
SHARES VALUE UNEXERCISED OPTIONS AT
ACQUIRED ON REALIZED OPTIONS FY- FY-END
NAME EXERCISE (#) ($) END (#)(1) ($)(1)(2)
- --------------------------------------------------------------------------------
J. HOWELL KELLY ----- ----- 20,000 20,000
- --------------------------------------------------------------------------------
BENJAMIN T. PUGH ----- ----- 20,000 20,000
- --------------------------------------------------------------------------------
____________
(1) Options covering 13,000 of these shares were unexercisable at fiscal year-
end.
(2) The value of each unexercised in-the-money stock option is equal to the
difference between $14 (the closing price of the Common Stock on December
31, 1996) and the exercise price of the stock option.
9
<PAGE>
STOCK PERFORMANCE GRAPH
The following graph shows a comparison of cumulative total stockholder
return on the Common Stock since May 16, 1996 (the date on which the Common
Stock began trading in an established market) with the cumulative total returns
of both a broad equity market index and a published industry index. The broad
equity market index chosen was Standard & Poors 500 and the published industry
index chosen was SNL Banks (under $500 m) Index. The graph reflects historical
performance only, which is not indicative of possible future performance of the
Common Stock.
PREMIER FINANCIAL BANCORP, INC.
TOTAL RETURN PERFORMANCE
[GRAPH]
<TABLE>
<CAPTION>
PERIOD ENDING
- ------------------------------------------------------------------------------------------
INDEX 5/17/96 6/30/96 8/15/96 9/30/96 11/15/96 12/31/96
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PREMIER FINANCIAL BANCORP, INC. 100.00 104.81 100.93 99.99 96.06 110.83
S&P 500 100.00 100.48 99.52 103.59 111.43 112.14
SNL BANKS (UNDER $500M) INDEX 100.00 101.56 101.21 106.74 112.71 118.07
</TABLE>
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company's subsidiaries have made, and expect to make in the future to
the extent permitted by applicable federal and state banking laws, bank loans in
the ordinary course of business to directors and officers of the Company and its
subsidiaries, and their affiliates and associates, on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with other persons. In the opinion of the Company,
such loans do not involve more than a normal risk of collectibility or present
other unfavorable features. In addition, the Company's banking subsidiaries
have engaged, and in the future may engage, in transactions with such persons
and their affiliates and associates as a depositary of funds, transfer agent,
registrar, fiduciary and provider of other similar services.
In June, 1995, the Company made a $1,000,000 investment in First Guaranty
Bank, Hammond, Louisiana ("First Guaranty"), a commercial bank in which the
Company's Chairman of the Board, Marshall T. Reynolds, beneficially owns 41.4%
of that bank's outstanding common stock.
10
<PAGE>
Mr. Reynolds also serves as a director of First Guaranty. The Company's
investment in First Guaranty was made through the purchase of 1,000 shares of
Series B Preferred Stock (the "Series B Stock"), which is non-voting, is not
convertible into common stock of First Guaranty, and has a non-cumulative
quarterly dividend preference (on a parity with Series A Preferred Stock) in a
per annum amount equal to two percent in excess of "prime rate" (as published in
THE WALL STREET JOURNAL during the quarter for which any dividend on common
stock of First Guaranty is paid). The Company has received a quarterly dividend
in the full amount of the dividend preference for each quarter during which the
Series B Stock has been held by it. The Company's purchase of the Series B
Stock was funded through a credit facility with an unaffiliated commercial bank
lender. Under that credit facility, the Company pays interest on the
outstanding principal balance at an annual rate equal to that lender's prime
rate. In January, 1996, the Company acquired an additional 1,000 shares of
Series B Stock (and in connection therewith received a $50,000 cash payment from
First Guaranty) in consideration of its exchanging 1,000 shares of Series A
Preferred Stock of First Guaranty purchased by the Company at an aggregate cost
of $1,000,000 in September, 1994. The purchase of the Series A Preferred Stock
was financed under the same credit facility described above that was used to
purchase the Series B Stock in 1995. The Company determined that it was in its
best interests to exchange its Series A Preferred Stock for additional Series B
Stock because (i) it no longer viewed any conversion of the Series A Preferred
Stock for common stock of First Guaranty as a viable opportunity in view of the
Company's strategic growth plans, and it regarded as attractive the $50,000
payment offered by First Guaranty to encourage the Company to exchange the
Series A Preferred Stock, thereby eliminating the Company's ability to convert
such stock into common stock, and (ii) it determined that an increase in the
dividend preference to two percent in excess of prime rate (which preference the
Series B Stock has), as opposed to one percent in excess of prime rate (which
preference the series A Preferred Stock has), provided a more favorable yield on
a tax equivalent basis in view of the Company's strategic growth plans and its
determination that any conversion of Series A Preferred Stock was not a likely
event in the foreseeable future. Mr. Reynolds was not Chairman of the Board or
a director of the Company at the times when the Company's Board of Directors
determined to purchase the Series B Stock or acquire additional Series B Stock
in exchange for its Series A Preferred Stock in First Guaranty.
During the years ended December 31, 1996, 1995 and 1994, the Company or its
subsidiaries have paid approximately $234,000, $65,000 and $53,000,
respectively, for commercial printing services and office supplies from Champion
Industries, Inc., Huntington, West Virginia, of which the Company's Chairman of
the Board, Marshall T. Reynolds, is its President and Chief Executive Officer
and a principal shareholder. The Company or its subsidiaries have also paid to
Champion Industries, Inc. approximately $322,000, $223,000, and $185,000 in
1996, 1995 and 1994, respectively, to permit employees of the Company and its
subsidiaries to participate in that other corporation's medical benefit plan.
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
(ITEM 2 ON PROXY)
The Company has appointed Eskew & Gresham, P.S.C., Lexington, Kentucky, as
the Company's independent accountants for the fiscal year ending December 31,
1997. Eskew & Gresham, P.S.C. has served as the Company's independent
accountants since 1995. Services provided to the Company and its subsidiaries
by Eskew & Gresham, P.S.C. with respect to the fiscal year ended December 31,
1996 included the examination of the Company's consolidated financial statements
and consultations on various tax matters. Representatives of Eskew & Gresham,
P.S.C. will be present at the Annual Meeting to respond to appropriate questions
and to make such statements as they may desire.
In the event shareholders do not ratify the selection of Eskew & Gresham,
P.S.C. as the Company's independent accountants for the forthcoming fiscal year,
such appointment will be reconsidered by the Board.
THE BOARD RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" RATIFICATION OF THE
APPOINTMENT OF ESKEW & GRESHAM, P.S.C. AS THE COMPANY'S INDEPENDENT ACCOUNTANTS
FOR THE 1997 FISCAL YEAR.
11
<PAGE>
SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be presented at the 1998 Annual
Meeting of Shareholders must be received by the Company by December 24, 1997 in
order to be considered for inclusion in the Proxy Statement for the 1998 Annual
Meeting.
OTHER MATTERS
The only matters to be considered at the meeting or any adjournment
thereof, so far as known to the Board of Directors, are those set forth in the
Notice of Annual Meeting of Shareholders and routine matters incident to the
conduct of the meeting. However, if any other matters should properly come
before the meeting or any adjournment thereof, the Board of Directors intends
that the persons named in the accompanying proxy form, or their substitutes,
will vote the shares represented by such proxy form in accordance with their
best judgment on such matters.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
All reports and definitive proxy or information statements filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934 subsequent to the date of this Proxy Statement and prior to
the date of the Annual Meeting will be deemed to be incorporated by reference
into this Proxy Statement from the dates of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated in
this Proxy Statement shall be deemed to be modified or superseded for purposes
of this Proxy Statement to the extent that a statement contained herein or in
any other subsequently filed document that also is or is deemed to be
incorporated by reference modifies or supersedes such statement.
By order of the Board of Directors,
E.V. HOLDER, JR.
Secretary
Georgetown, Kentucky
April 23, 1997
12
<PAGE>
PREMIER FINANCIAL BANCORP, INC.
GEORGETOWN, KENTUCKY
PROXY FOR 1997 ANNUAL MEETING OF SHAREHOLDERS
(PLEASE COMPLETE, SIGN, DATE AND RETURN PROMPTLY)
KNOW ALL MEN BY THESE PRESENTS, the undersigned shareholder of PREMIER FINANCIAL
BANCORP, INC. ("Company"), Georgetown, Kentucky, does hereby nominate,
constitute and appoint
GARDNER E. DANIEL, J. HOWELL KELLY AND BENJAMIN T. PUGH
or any of them (with full power to act alone), my true and lawful attorney(s)
and proxy(ies) with full power of substitution, for me and in my name, place and
stead, to vote all of the Common Stock of the Company standing in my name on its
books at the close of business on April 21, 1997 at the Annual Meeting of
Shareholders to be held at the Griffin Gate Clubhouse, Sugar Maple Lane,
Lexington, Kentucky, on May 6, 1997 at 10:00 a.m. (Eastern Time), and at any
adjournment thereof, with all the powers the undersigned would possess if
personally present, as follows:
1. ELECTION OF DIRECTORS. To elect as directors the following seven (7)
nominees:
Toney K. Adkins, Gardner E. Daniel, E.V. Holder, Jr., Wilbur M.
Jenkins, J. Howell Kelly, Benjamin T. Pugh and Marshall T. Reynolds
FOR all nominees except as otherwise indicated below / /
(INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL
NOMINEE, WRITE THE NOMINEE'S NAME ON THE LINES BELOW.)
----------------------------------------------------------------------
----------------------------------------------------------------------
WITHHOLD AUTHORITY to vote for all nominees / /
2. RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS. To ratify the
appointment of Eskew & Gresham, P.S.C. as the Company's independent
auditors for the fiscal year ending December 31, 1997.
FOR / / AGAINST / / ABSTAIN / /
3. OTHER BUSINESS. To transact such other matters as may properly be
brought before the Annual Meeting or any adjournment thereof. (The
Board of Directors does not know of any such other matters.)
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ALL OF THE NOMINEES LISTED IN
ITEM 1 AND A VOTE "FOR" ITEM 2.
Information regarding the matters to be acted upon at the meeting is contained
in the Notice of Annual Meeting of Shareholders and the Proxy Statement
accompanying this proxy.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE VOTED AS SPECIFIED
AND IN ACCORDANCE WITH THE ACCOMPANYING PROXY STATEMENT. IF NO INSTRUCTION IS
INDICATED, THEN THE ABOVE-NAMED PROXIES, OR ANY ONE OF THEM, WILL VOTE THE
SHARES REPRESENTED "FOR" ALL OF THE NOMINEES LISTED IN ITEM 1 AND "FOR" ITEM 2
AND IN ACCORDANCE WITH THEIR DISCRETION ON ANY OTHER BUSINESS THAT MAY PROPERLY
COME BEFORE THE MEETING.
IN WITNESS WHEREOF, I have hereunder set my hand this ____ day of _____________,
1997.
__________________________________
__________________________________
(Signature of Shareholder(s))
Please sign above exactly as your
name(s) appears on your stock
certificate(s). When signing as
attorney, executor, administrator,
trustee or guardian, please give
full title. If more than one
trustee, all should sign. All joint
owners must sign.
______________________
An addressed, postage prepaid envelope is enclosed for your convenience in
promptly returning your proxy to the Company. The prompt return of your proxy
will help the Company avoid additional costs in soliciting proxies.
______________________
2
