<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>
PREMIER FINANCIAL BANCORP, INC.
115 N. HAMILTON STREET
P.O. BOX 1485
GEORGETOWN, KENTUCKY 40324
J. HOWELL KELLY
PRESIDENT AND CHIEF
EXECUTIVE OFFICER
May 10, 1999
Dear Fellow Shareholder:
It is my pleasure to invite you to attend the Premier Financial Bancorp,
Inc. 1999 Annual Meeting of Shareholders. The meeting will be held on Tuesday,
June 8, 1999 at 10:30 a.m. (EDT) at Premier's principal office at 115 N.
Hamilton Street, Georgetown, Kentucky.
The Notice of Annual Meeting and Proxy Statement accompanying this letter
describe the business to be dealt with at the meeting. As part of the meeting,
we will present a brief report on the Company's business, and directors and
officers will be available to respond to your questions.
Whether or not you plan to attend the meeting, your vote is very important.
Please cast your vote regardless of the number of shares you hold. Many of you
will have the option to cast your proxy vote by telephone if your proxy card or
voting instruction form includes instructions and a toll-free telephone number
to do so. This is a quick and easy way for you to submit your proxy. I urge you
to take a moment to use the toll-free telephone number, or sign, date, and
promptly return the enclosed proxy card or voting form in the postage-paid
envelope provided, in order to be certain your shares are represented at the
meeting.
I look forward to seeing you on May 10.
Sincerely,
/s/ J. HOWELL KELLY
<PAGE>
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
OF
PREMIER FINANCIAL BANCORP, INC.
TO BE HELD ON
JUNE 8, 1999
NOTICE IS HEREBY GIVEN that the Annual Meeting of Shareholders of Premier
Financial Bancorp, Inc. will be held at its principal offices located at 115
North Hamilton, Georgetown, Kentucky on Tuesday, June 8, 1999 at 10:30 a.m,
Eastern Daylight Time, for the following purposes:
(1) To elect eight (8) directors to serve until the year 2000 Annual
Meeting of Shareholders and until their successors are elected
and qualified;
(2) To ratify the appointment of Crowe, Chizek and Company, LLP as
the Company's independent accountants for the 1999 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 27, 1999,
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.
/s/ E.V. HOLDER, JR.
E.V. Holder, Jr., Secretary
Georgetown, Kentucky
May 10, 1999
<PAGE>
PREMIER FINANCIAL BANCORP, INC.
115 N. HAMILTON STREET
GEORGETOWN, KENTUCKY 40324
----------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
JUNE 8, 1999
----------------
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, $1.00 par
value per share (the "Common Stock"), as of the close of business on April 27,
1999, for use at the Annual Meeting of Shareholders of the Company (the "Annual
Meeting") to be held on Tuesday, June 8, 1999 at 10:30 a.m (Eastern Daylight
Time) at the Company's principal office, and at any adjournment or postponement
thereof. The Company's principal office is located at 115 N. Hamilton Street,
Georgetown, Kentucky 40324. The date of this Proxy Statement is May 10, 1999.
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 eight directors of the Company who will serve
until the Year 2000 Annual Meeting and until their successors are elected
and qualified;
(2) The ratification of the appointment of Crowe, Chizek and Company,
LLP as the Company's independent
<PAGE>
accountants for the fiscal year ending December 31, 1999; 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 eight nominees for
election as directors of the Company, and "FOR" the ratification of the Board
of Director's appointment of Crowe, Chizek and Company, LLP 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.
VOTING RIGHTS AND PROXY INFORMATION
Only holders of record of shares of Common Stock as of the close of
business on April 27, 1999 (the "Record Date") 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 eight (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 Record Date there
were 5,232,257 shares of Common Stock outstanding.
Those nominees for election to the Board of Directors receiving the eight
highest number of votes in the election of directors will be elected to the
Board. The appointment of Crowe, Chizek and Company, LLP as the Company's
independent accountants for the 1999 year will be ratified if the votes cast in
favor of 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 eight nominees for election
as directors of the Company (or, if deemed appropriate by the individuals
appointed in the proxies,
2
<PAGE>
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 Crowe, Chizek and Company, LLP 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 meeting, mail, telephone, facsimile or other electronic
means.
ANNUAL REPORT
The Company's 1998 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.,P.O. Box 1485, Georgetown, Kentucky 40324-1485.
PRINCIPAL SHAREHOLDERS
As of March 31, 1999, the following individuals or entities reported
beneficial ownership of Common Stock in excess of 5% of the Company's
outstanding Common Stock:
3
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES PERCENTAGE OF
OF BENEFICIAL OWNER BENEFICIALLY OWNED(1) OUTSTANDING
SHARES
- ------------------- --------------------- --------------
<S> <C> <C>
Marshall T. Reynolds 559,990 10.7%
P.O. Box 4040
Huntington, West Virginia 25729
Joan C. Edwards 363,352 6.9%
2100 South Ocean Lane
Ft. Lauderdale, Florida 33316
Brinson Partners, Inc 345,066 6.6%
209 South LaSalle
Chicago, Illinois 60604
</TABLE>
(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.
ELECTION OF DIRECTORS
(ITEM 1 ON PROXY)
A board of eight directors of the Company is to be elected at the Annual
Meeting, each of whom is to serve, subject to the provisions of the Company's
bylaws, until the year 2000 Annual Meeting of Shareholders 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:
4
<PAGE>
<TABLE>
<CAPTION>
COMMON
DIRECTOR OF STOCK PERCENTAGE
COMPANY BENEFICIALLY OF
PRINCIPAL OCCUPATION CONTINUOUSLY OWNED AS OUTSTANDING
NOMINEE OR EMPLOYMENT(1) AGE SINCE OF 3/31/99 SHARES
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Toney K. Adkins Vice President - 49 7/12/91 6,180 less than 1%
Administration,
Champion Industries,
Inc. (commercial
printing and office
supplies)(3)
Gardner E. Daniel Senior Vice President 63 4/11/95 30,644 less than 1%
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(4)
E.V. Holder, Jr. Attorney 66 7/12/91 1,574 less than 1%
Wilbur M. Jenkins Retired business 71 4/11/95 120,340 2.3%
owner (cable
manufacturing)
J. Howell Kelly President and Chief 53 2/14/95 20,570(8) less than 1%
Executive Officer of
the Company(5)
Benjamin T. Pugh Executive Vice 50 7/12/91 22,644(9) less than 1%
President and
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. Chairman and Chief 62 1/19/96 559,990 10.7%
Reynolds Executive Officer,
Champion Industries,
Inc. (commercial
printing and office
supplies)(7)
Neal Scaggs President of Logan 63 9/8/98 9,345 less than 1%
Auto Parts, Inc.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
All directors and 761,942 14.6%
executive
officers as
a group (8 in
number including
the above-named
persons)
</TABLE>
- ---------------
(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 Bank One West
Virginia, N.A. (and 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 Bank One West Virginia, N.A. (and its predecessor, Key
Centurion Bancshares, Inc.).
(8) Includes 18,800 shares that the individual has the right to acquire
pursuant to a currently exercisable stock option for 16,800 shares at an
exercise price of $13 per share and 2,000 shares at an exercisable price of
$16.50 per share.
(9) Includes 18,000 shares that the individual has the right to acquire
pursuant to a currently exercisable stock option for 16,800 shares at an
exercise price of $13 per share and 1,200 shares at $16.50 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.
6
<PAGE>
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 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 1998, there were a total of four meetings of the Company's Board of
Directors. The Audit Committee of the Board consists of the following three
non-employee directors: Toney K. Adkins, E.V. Holder, Jr. and Wilbur M.
Jenkins. The Compensation Committee of the Board consists of Marshall T.
Reynolds and Wilbur M. Jenkins. The Board of Directors of the Company has not
established a Nominating 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,
7
<PAGE>
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, 1998, 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.
<TABLE>
<CAPTION>
Name Age Position
---- ---- --------
<S> <C> <C>
Gardner E. Daniel 63 Senior Vice President
and Assistant
Secretary of the
Company; President
and Chief Executive
Officer of
Georgetown Bank and
Trust Company,
Georgetown, Kentucky,
and Citizens Bank,
Sharpsburg, Kentucky
E.V. Holder, Jr. 66 Secretary
J. Howell Kelly 53 President and Chief
Executive Officer
Benjamin T. Pugh 50 Executive Vice
President and
Treasurer; President
and Chief Executive
Officer of Citizens
Bank and Trust
Company, Vanceburg,
Kentucky, and Bank of
Germantown,
Germantown, Kentucky,
and Chairman of
</TABLE>
8
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
Premier Data
Services, Inc.
Marshall T. Reynolds 62 Chairman of the Board
</TABLE>
For additional information about these executive officers, see "ELECTION OF
DIRECTORS."
- ----------------
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table summarizes compensation earned in 1998, 1997 and 1996
by the Company's Chief Executive Officer and certain of the Company's other
executive officers who earned a salary and/or bonus in 1998 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 1998 that exceeded $100,000.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM
COMPENSATION
------------------- ------------
OTHER ALL OTHER
ANNUAL SECURITIES COMPENSATION
NAME AND PRINCIPAL YEAR SALARY ($) BONUS COMPENSATION UNDERLYING ($)
POSITION ($) ($) OPTIONS(#) (1)
- ------------------------- ---- ---------- ------- ------------ ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
J. Howell Kelly 1998 140,362 75,000 14,633 5,000 5,716
President & 1997 124,793 50,000 17,287 ------- 2,129
CEO(2) 1996 110,807 36,000 16,116 21,000 9,105
Benjamin T. Pugh 1998 105,000 55,000 1,800 3,000 5,300
Executive 1997 100,115 40,000 1,700 ------ 1,923
President(3) 1996 90,536 36,000 3,450 21,000 7,901
Gardner E. Daniel 1998 100,00 45,000 5,763 3,000 6,577
Senior 1997 96,893 20,000 5,751 ------ 1,952
Vice President(4) 1996 87,715 15,000 3,600 ------ 6,414
</TABLE>
===============================================================================
9
<PAGE>
- ----------------
(1) Employer contributions to the Company's Profit Sharing Plan.
(2) Mr. Kelly became President and Chief Executive officer on February 14,
1995. Other annual compensation includes $13,500 in director's fees paid by
bank subsidiaries of the company and personal use of a Company automobile
valued at $1,133.
(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 Company, 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 and personal use of an automobile owned by a
bank subsidiary valued at $2,163.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF
# OF UNEXERCISED
SHARES SECURITIES IN-THE-
ACQUIRED UNDERLYING MONEY
ON VALUE UNEXERCISED OPTIONS AT
EXERCISE REALIZED OPTIONS FY- FY-END
NAME (#) ($) END (#)(1) ($)(4)
- ---- -------- --------- ---------- ----------
<S> <C> <C> <C> <C>
J. Howell Kelly (1) ----- ----- 26,000 73,500
Benjamin T. Pugh (2) ----- ----- 24,000 73,500
Gardner E. Daniel (3) ----- ----- 3,000 1,800
</TABLE>
- ------------
(1) Options covering 6,150 of these shares were unexercisable at fiscal
year-end.
(2) Options covering 4,950 of these shares were unexercisable at fiscal
year-end.
10
<PAGE>
(3) Options covering 1,800 of these shares were unexercisable at fiscal
year-end.
(4) The value of each unexercised in-the-money stock option is equal to the
difference between $16.50 (the closing price of the Common Stock on
December 31, 1998) and the exercise price of the stock option.
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
indices chosen were the SNL (under $500M) Bank Asset-Size Index and the SNL
($500M-$1B) Bank Asset-Size Index. The graph reflects historical performance
only, which is not indicative of possible future performance of the Common
Stock.
[GRAPH]
- -----------------------------------------------------------------------------
PREMIER FINANCIAL BANCORP, INC.
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
Index TOTAL RETURN PERFORMANCE
Value
225 -----------------------------------------------------------------
- - Premier Financial Bancorp, Inc.
- - S&P 500
200 -----------------------------------------------------------------
- - SNL LESS THAN $500M Bank Asset-Size Index
- - SNL LESS THAN $500M- $1B Bank Asset-Size Index
175 -----------------------------------------------------------------
150 -----------------------------------------------------------------
125 -----------------------------------------------------------------
100 -----------------------------------------------------------------
75 -----------------------------------------------------------------
5/17/96 6/30/96 12/31/96 6/30/97 12/31/97 6/30/98 12/31/98
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
PERIOD ENDING
-----------------------------------------------------------------
INDEX 5/17/96 6/30/96 12/31/96 6/30/97 12/31/97 6/30/98 12/31/98
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Premier Financial Bancorp, Inc. 100.00 98.20 103.84 129.97 190.88 157.76 136.31
S&P 500 100.00 100.48 112.14 135.25 149.56 176.06 192.30
SNL LESS THAN $500M Bank Asset-Size Index 100.00 101.56 118.07 146.56 201.28 215.48 183.78
SNL $500M-$1B Bank Asset-Size Index 100.00 98.77 116.36 141.73 189.15 209.44 185.98
</TABLE>
11
<PAGE>
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. 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
12
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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, 1998, 1997 and 1996, the Company or
its subsidiaries have paid approximately $369,000, $211,000 and $241,000,
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
$649,000, $339,000 and $317,000 in 1998, 1997 and 1996, 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 Crowe, Chizek and Company, LLP ("Crowe
Chizek"), Lexington, Kentucky, as the Company's independent accountants for
the fiscal year ending December 31, 1999. Services provided to the Company
and its subsidiaries by Crowe Chizek with respect to the fiscal year ended
December 31, 1998 included the examination of the Company's consolidated
financial statements and consultations on various tax matters. Representatives
of Crowe Chizek 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 Crowe Chizek 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 CROWE CHIZEK AS THE COMPANY'S INDEPENDENT ACCOUNTANTS FOR THE
1999 FISCAL YEAR.
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SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be presented at the Year 2000 Annual
Meeting of Shareholders must be received by the Company by January 11, 2000 in
order to be considered for inclusion in the Proxy Statement for the year 2000
Annual Meeting of Shareholders.
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
May 10, 1999
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PREMIER FINANCIAL BANCORP, INC.
GEORGETOWN, KENTUCKY
PROXY FOR 1999 ANNUAL MEETING OF SHAREHOLDERS
(PLEASE COMPLETE, SIGN, DATE AND RETURN PROMPTLY)
The undersigned shareholder of PREMIER FINANCIAL BANCORP, INC. ("Company"),
Georgetown, Kentucky, does hereby nominate, constitute and appoint
J. HOWELL KELLY AND BENJAMIN T. PUGH
or either 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 27, 1999 at the Annual Meeting of
Shareholders to be held at the Company's principal office on June 8, 1999 at
10:30 a.m. (EDT), 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
eight (8) nominees:
Toney K. Adkins, Gardner E. Daniel, E.V. Holder,
Jr., Wilbur M. Jenkins, J. Howell Kelly, Benjamin
T. Pugh, Marshall T. Reynolds and Neal Scaggs
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 Crowe, Chizek and Company, LLP.
as the Company's independent auditors for the fiscal year
ending December 31, 1999.
FOR /__ / AGAINST /__ / ABSTAIN /__ /
3. OTHER BUSINESS. To transact such other matters as may
properly be brought before the Annual Meeting or any
<PAGE>
adjournment thereof. (The Board of Directors does not know
of any such other matters.)
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
______________________, 1999.
---------------------------------------
---------------------------------------
(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.
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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.
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