<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 Filing Proxy Statement, if other than 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 North Hamilton Street
Georgetown, Kentucky 40324
----------------
NOTICE OF
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
JUNE 21, 2000
----------------
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 Street, Georgetown, Kentucky on Wednesday, June 21, 2000 at
10:30 a.m. (EDT) for the following purposes:
(1) To elect ten (10) directors to serve until the 2001 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 2000
fiscal year; and
(3) To transact such other business as may properly come before
the meeting.
The Board of Directors has set the close of business on May 5, 2000 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, SIGN
AND DATE THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED POSTAGE-PAID
ENVELOPE OR BY OTHER ACCEPTED MEANS OF EXECUTION (Internet, telephone).
SHAREHOLDERS ATTENDING THE MEETING IN PERSON MAY VOTE IN PERSON EVEN THOUGH YOU
HAVE PREVIOUSLY EXECUTED A PROXY.
By Order of the Board of Directors,
/s/ E. V. Holder, Jr.
---------------------
E. V. Holder, Jr.
Secretary
Georgetown, Kentucky
May 8, 2000
<PAGE>
PREMIER FINANCIAL BANCORP, INC.
115 North Hamilton Street
Georgetown, Kentucky 40324
----------------
PROXY STATEMENT
FOR
ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD
JUNE 21, 2000
----------------
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 May 5,
2000, for use at the Annual Meeting of Shareholders of the Company (the "Annual
Meeting") to be held on Wednesday, June 21, 2000 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 North Hamilton Street,
Georgetown, Kentucky. The date of this Proxy Statement is May 8, 2000.
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 ten directors of the Company who will
serve until the 2001 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
accountants for the fiscal year ending December 31,
2000; 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 ten nominees for election as
directors of the Company and "FOR" the ratification of the Board of Director's
<PAGE>
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 May 5, 2000 (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 ten (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 5,232,230 shares of Common Stock outstanding.
Those nominees for election to the Board of Directors receiving the ten
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 year 2000 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 ten 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 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
<PAGE>
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 1999 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 40324-6485.
PRINCIPAL SHAREHOLDERS
As of March 31, 2000, 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 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 307,272 5.9%
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.
<PAGE>
ELECTION OF DIRECTORS
(Item 1 on Proxy)
A board of ten 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 2001 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 who 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 3/31/2000(2) Shares
- ------------------------- --------------------------- -------- ---------------- ----------------- ------------------
<S> <C> <C> <C> <C> <C>
Toney K. Adkins Vice President, 50 7/12/91 6,180 less than 1%
Administration, Champion
Industries, Inc.
(commercial printing and
office supplies)(3)
Gardner E. Daniel Retired bank president(4) 64 4/11/95 30,819 less than 1%
E.V. Holder, Jr. Attorney-at-law 67 7/12/91 16,720 less than 1%
Wilbur M. Jenkins Retired business owner 72 4/11/95 120,340 2.3%
(cable manufacturing)
Jeanne D. Hubbard Director of Risk 51 10/28/99 526 Less than 1%
Management of the
Company; Chairwoman,
President and CEO,
Abigail Adams National
Bancorp(5)
J. Howell Kelly President and Chief 54 2/14/95 23,212(9) less than 1%
Executive Officer of the
Company(6)
Keith F. Molihan Executive Director, 57 9/14/99 3,502 Less than 1%
Ironton/Lawrence County
Area Community Action
Organization
Benjamin T. Pugh President and Chief 51 7/12/91 23,123(10) less than 1%
Executive Officer of
Citizens Deposit Bank and
Trust Company; Chairman
of Premier Data Services,
Inc.(7)
Marshall T. Reynolds Chairman and Chief 63 1/19/96 559,990 10.7%
Executive Officer,
Champion Industries, Inc.
(commercial printing and
office supplies)(8)
Neal Scaggs President of Logan Auto 64 9/8/98 9,345 Less than 1%
Parts, Inc.
All directors and
executive officers as 793,757 15.2%
a group (10 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.
<PAGE>
(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 retired as President of the Company's subsidiaries, Georgetown
Bank and Trust and Citizens Bank, on March 31, 1999.
(5) Mrs. Hubbard became Director of Risk Management of the Company on November
1, 1999. She also serves as Chairwoman, President and Chief Executive
Officer of Abigail Adams National Bancorp and has held this position since
1998.
(6) Mr. Kelly became Chief Executive Officer of the Company on January 19, 1996
and President of the Company on February 14, 1995. Mr. Kelly was a director
of Cambridge Financial Services, Inc., Iselin, New Jersey, a financial
advisory and management consulting firm, from 1992 to 1995. 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.
(7) Prior to January 19, 1996, Mr. Pugh was Chief Executive Officer of the
Company and prior to February 14, 1995, also its President.
(8) 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.).
(9) Includes 21,900 shares that the individual has the right to acquire
pursuant to a currently exercisable stock option for 18,900 shares at an
exercise price of $13 per share and 3,000 shares at an exercisable price of
$16.50 per share.
(10) Includes 20,700 shares that the individual has the right to acquire
pursuant to a currently exercisable stock option for 18,900 shares at an
exercise price of $13 per share and 1,800 shares at $16.50 per share.
The Company's 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).
<PAGE>
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
Board Meetings and Committees
During 1999, the Board of Directors met seven times, the Compliance
Committee met twice, and the Compensation Committee met once. The board as a
whole discussed the matters that would normally come before the Audit Committee.
Each director attended seventy-five percent or more of all meetings of the Board
of Directors and committees of the Board on which he or she serves.
Compensation of the Board of Directors
Directors who are not full time employees of the Company or any subsidiary
receive fees for their services of $500 for each meeting of the Board and are
reimbursed for expenses incurred in connection with their services as directors.
Directors receive no compensation for attending committee meetings.
Compensation Committee
The Compensation Committee (the "Committee") consists of Marshall T.
Reynolds and Wilbur Jenkins. The Committee reviews and determines salaries and
other benefits for executive and senior management of the Company and its
subsidiaries, reviews and determines the employees to whom stock options are to
be granted and the terms of such grants, and reviews the selection of officers
who participate in incentive and other compensation plans and arrangements. The
Committee establishes the management compensation policy and the general
compensation policies of the Company.
The objectives of the Company's management compensation policy are to
develop a policy that attract and retain the best available executive officers;
to motivate them to achieve the goals set forth in the Company's business plan;
to link executive and stockholder interest through incentive-based compensation;
and to provide the Company's performance, measured by both short-term and
long-term achievements.
Compensation of Executive Officers
The Committee believes that the compensation of the Chief Executive
Officer, J. Howell Kelly, should be based largely on corporate performance
relative to the Company's business plan. In setting Mr. Kelly's salary and
bonus, the Committee considered the role Mr. Kelly plays in the development and
expansion of the Company and its substantial growth.
Recommendations regarding the base salary of the Executive Officers, other
than the Chief Executive Officer, are made to the Committee by the Chief
Executive Officer and either approved or modified by the Committee. The
recommendation as to the bonus paid to each Executive Officer is based on a
<PAGE>
review of the performance of these officers during the prior year by the Chief
Executive Officer and includes the factors described in the preceding section on
compensation of the Chief Executive Officer.
Audit Committee
The Audit Committee of the Board of Directors consists of the following
three non-employee directors: E. V. Holder, Jr., Chairman; Keith F. Molihan; and
Neal Scaggs. The Committee recommends to the Board the selection of the
independent public accountants, reviews the financial statements with such
accountants, discusses with the accountants and management other results of the
audit, and oversees internal accounting procedures and controls. The Audit
Committee also reviews, considers and makes recommendations regarding proposed
related party transactions, if any.
Compliance Committee
The Compliance Committee of the Board of Directors consists of the
following three non-employee directors: Toney K. Adkins, Chairman; E. V. Holder,
Jr.; and Wilbur Jenkins. The Committee reviews and recommends to the Board any
written policies and procedures in place for the holding company and/or
subsidiaries to comply with regulatory agencies and recommendations.
Chairman of the Board
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, 1999, 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 Daniel 64 Assistant Secretary
E.V. Holder, Jr. 67 Secretary
J. Howell Kelly 54 President and Chief
Executive Officer
Marshall T. Reynolds 63 Chairman of the Board
For additional information about these executive officers,
see "ELECTION OF DIRECTORS."
<PAGE>
EXECUTIVE COMPENSATION
Summary Compensation Table
The following table summarizes compensation earned in 1999, 1998 and
1997 by the Company's Chief Executive Officer and certain of the Company's other
executive officers who earned a salary and/or bonus in 1999 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 1999 that exceeded $100,000.
<TABLE>
<CAPTION>
============================================================================================================================
Long Term
Annual Compensation Compensation
----------------------------------------------------------------------------------------------------------------------------
Other Securities
Annual Underlying All other
Name and principal position Year Salary Bonus Compensation Options Compensation
($) ($) ($) (#) ($)(1)
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
J. Howell Kelly 1999 165,000 50,000 20,653 ----- 5,841
President &
CEO(2)
------------------------------------------------------------------------------------------------
1998 140,362 75,000 14,633 5,000 5,716
------------------------------------------------------------------------------------------------
1997 124,793 50,000 17,287 ------ 2,129
----------------------------------------------------------------------------------------------------------------------------
Benjamin T. Pugh 1999 110,000 20,000 ------ ------ 4,915
President, Citizens
Deposit Bank & Trust(3)
------------------------------------------------------------------------------------------------
1998 105,000 55,000 1,800 3,000 5,300
------------------------------------------------------------------------------------------------
1997 100,115 40,000 1,700 ------ 1,923
----------------------------------------------------------------------------------------------------------------------------
Bill Covington 1999 107,700 40,000 3,757 ------ 3,299
President, Farmers
Deposit Bank(4)
------------------------------------------------------------------------------------------------
1998 95,000 25,000 3,763 ------ 3,200
------------------------------------------------------------------------------------------------
1997 80,108 15,000 3,763 ------ 1,333
============================================================================================================================
</TABLE>
- ------------------------
(1) Employer contributions to the Company's 401(k)/Profit Sharing Plan.
(2) Mr. Kelly became President of the Company on February 14, 1995 and its
Chief Executive Officer on January 19, 1996. Other annual compensation
includes $19,000 in director's fees paid by bank subsidiaries of the
Company and personal use of a Company automobile valued at $1,653.
(3) Salary and bonus amounts for all years were paid by the Company's
subsidiary, Citizens Deposit Bank and Trust Company, for services rendered
by Mr. Pugh as President and Chief Executive Officer of that bank
subsidiary.
(4) Salary and bonus amounts for all years were paid by the Company's
subsidiary, Farmers Deposit Bank, for services rendered by Mr. Covington as
President and Chief Executive Officer of that bank subsidiary. Other annual
compensation includes director's fees paid by Farmers Deposit to Mr.
Covington.
<PAGE>
<TABLE>
<CAPTION>
Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values
- --------------------------------- ------------------ ------------------ ---------------------- ----------------------
# of Securities
Underlying Value of Unexercised
Shares Acquired Unexercised Options In-the-Money Options
on Exercise Value Realized FY-End at FY-End
--------- -------- -------- ---------
Name (#) ($) (#)(1) (2) (3) ($)(4)
- --------------------------------- ------------------ ------------------ ---------------------- ----------------------
<S> <C> <C> <C> <C>
J. Howell Kelly(1) ----- ----- 26,000 -----
- --------------------------------- ------------------ ------------------ ---------------------- ----------------------
Benjamin T. Pugh(2) ----- ----- 24,000 -----
- --------------------------------- ------------------ ------------------ ---------------------- ----------------------
Bill Covington(3) ----- ----- 3,000 -----
- --------------------------------- ------------------ ------------------ ---------------------- ----------------------
</TABLE>
- ------------
(1) Options covering 4,100 of these shares were unexercisable at fiscal
year-end.
(2) Options covering 3,300 of these shares were unexercisable at fiscal
year-end.
(3) Options covering 1,200 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 $9.00 (the closing price of the Common Stock on December
31, 1999) and the exercise price of the stock option.
<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 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.
PREMIER FINANCIAL BANCORP, INC.
TOTAL RETURN PERFORMANCE
[GRAPH]
<TABLE>
<CAPTION>
Period Ending
------------------------------------------------------------------
Index 5/17/96 12/31/96 12/31/97 12/31/98 12/31/99
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Premier Financial Bancorp, Inc. 100.00 103.84 190.88 136.31 78.04
S&P 500 100.00 112.14 149.56 192.26 232.54
SNL $500M-$1B Bank Asset-Size Index 100.00 116.36 189.15 185.98 172.15
</TABLE>
<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
31.7% of that bank's outstanding common stock. Mr. Reynolds also serves as
Chairman 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, 1999, 1998 and 1997, the Company or
its subsidiaries have paid approximately $432,000, $369,000, and $211,000,
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
<PAGE>
Champion Industries, Inc. approximately $820,000, $649,000, and $339,000 in
1999, 1998 and 1997, respectively, to permit employees of the Company and its
subsidiaries to participate in that 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, 2000. Services provided to the Company and its
subsidiaries by Crowe Chizek with respect to the fiscal year ended December 31,
1999 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
2000 fiscal year.
SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be presented at the 2001 Annual
Meeting of Shareholders must be received by the Company by January 20, 2001 in
order to be considered for inclusion in the Proxy Statement for the 2001 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.
<PAGE>
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,
/s/ E. V. Holder, Jr.
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E.V. HOLDER, JR.
Secretary
Georgetown, Kentucky
May 8, 2000
<PAGE>
PREMIER FINANCIAL BANCORP, INC.
GEORGETOWN, KENTUCKY
PROXY FOR 2000 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
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 May 5, 2000, at the Annual Meeting of
Shareholders to be held at the offices of Premier Financial Bancorp, Inc., 115
North Hamilton Street, Georgetown, Kentucky, on June 21, 2000, at 10:30 a.m.
(eastern daylight 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 ten (10)
nominees:
Toney K. Adkins Gardner E. Daniel E. V. Holder, Jr.
Jeanne D. Hubbard Wilbur M. Jenkins J. Howell Kelly
Keith F. Molihan Benjamin T. Pugh Marshall T. Reynolds
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 in the space provided below.)
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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, 2000.
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 THEREOF, I have hereunder set my hand this _____ day of __________,
2000.
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(Signature of Shareholder(s))
Please sign above exactly as your
name(s) appear(s) 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.
