-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NuETq/oXVpPDyh9J+fhYqOqRs4kBmLnHRx6DfMb9lEtpTXkFALAFjnDX5gczW0x4 Rh2YD8OhT+fHtlURaZLFug== 0001047469-98-040675.txt : 19981116 0001047469-98-040675.hdr.sgml : 19981116 ACCESSION NUMBER: 0001047469-98-040675 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980930 FILED AS OF DATE: 19981113 FILER: COMPANY DATA: COMPANY CONFORMED NAME: PREMIER FINANCIAL BANCORP INC CENTRAL INDEX KEY: 0000887919 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 611206757 STATE OF INCORPORATION: KY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-20908 FILM NUMBER: 98747717 BUSINESS ADDRESS: STREET 1: 120 N HAMILTON ST STREET 2: P O BOX 9 CITY: GEORGETOWN STATE: KY ZIP: 40324 BUSINESS PHONE: 6067963001 10-Q 1 FORM 10-Q COVER SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1998 or [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission file number 0-20908 PREMIER FINANCIAL BANCORP, INC. (Exact name of registrant as specified in its charter) KENTUCKY 61-1206757 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 120 N. HAMILTON STREET GEORGETOWN, KENTUCKY 40324 (address of principal executive officer) (Zip Code) Registrant's telephone number (502) 863-7500 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to filing requirements for the past 90 days. Yes X No ------ ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date. Common stock - 5,234,525 shares outstanding at November 11, 1998. PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The accompanying information has not been audited by independent public accountants; however, in the opinion of management such information reflects all adjustments necessary for a fair presentation of the results for the interim period. All such adjustments are of a normal and recurring nature. The accompanying financial statements are presented in accordance with the requirements of Form 10-Q and consequently do not include all of the disclosures normally required by generally accepted accounting principles or those normally made in the registrant's annual Form 10-K filing. Accordingly, the reader of the Form 10-Q may wish to refer to the registrant's Form 10-K for the year ended December 31, 1997 for further information in this regard. Index to consolidated financial statements: Consolidated Balance Sheets . . . . . . . . . . . . . . 3 Consolidated Statements of Income . . . . . . . . . . . 4 Consolidated Statements of Cash Flows . . . . . . . . . 5 Notes to Consolidated Financial Statements. . . . . . . 6 PREMIER FINANCIAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (IN THOUSANDS) (UNAUDITED)
September 30 December 31 1998 1997 ---- ---- ASSETS Cash and due from banks $ 18,109 $ 11,610 Federal funds sold 11,228 40,771 Investment securities Available for sale 195,645 45,926 Held to maturity 20,002 20,362 Loans 364,905 285,798 Less: Unearned interest (2,489) (2,409) Allowance for loan losses (4,210) (3,144) --------- --------- Net loans 358,206 280,245 FHLB and Federal Reserve stock 3,265 2,923 Premises and equipment, net 11,550 6,895 Goodwill and other intangibles 21,799 7,262 Other assets 11,285 9,442 --------- --------- TOTAL ASSETS $651,089 $425,436 --------- --------- --------- --------- LIABILITIES AND STOCKHOLDERS' EQUITY Deposits Non-interest bearing $ 56,357 $ 37,702 Time deposits, $100,000 and over 57,495 47,105 Other interest bearing 400,560 239,747 --------- --------- Total deposits 514,412 324,554 Securities sold under agreements to repurchase and other short-term borrowings 8,203 5,634 Federal Home Loan Bank advances 33,518 15,263 Other borrowings 8,000 - Other liabilities 3,641 3,438 --------- --------- Total liabilities 567,774 348,889 Guaranteed preferred beneficial interests in Company's debentures 28,750 28,750 Stockholders' equity Preferred stock, no par value; 1,000,000 shares authorized; none issued or outstanding - - Common stock, no par value; 10,000,000 shares authorized; 5,234,525 shares at September 30, 1998 and 4,685,390 shares at December 31, 1997, issued and outstanding 1,103 982 Surplus 43,448 33,825 Retained earnings 9,543 13,055 Accumulated other comprehensive income 471 (65) --------- --------- Total stockholders' equity 54,565 47,797 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $651,089 $425,436 --------- --------- --------- ---------
See accompanying notes to the consolidated financial statements 3. PREMIER FINANCIAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (IN THOUSANDS) (UNAUDITED)
Three Months Ended Nine Months Ended September 30 September 30 1998 1997 1998 1997 ---- ---- ---- ---- INTEREST INCOME Loans, including fees $ 8,602 $ 6,645 $24,516 $19,106 Investment securities Taxable 3,067 2,829 5,898 4,397 Tax-exempt 283 300 859 873 Federal funds sold and other 504 42 1,623 386 ------- ------- ------- ------- Total interest income 12,456 9,816 32,896 24,762 INTEREST EXPENSE Deposits 5,318 3,235 13,826 9,247 Debt and other borrowings 1,865 2,600 4,523 3,615 ------- ------- ------- ------- Total interest expense 7,183 5,835 18,349 12,862 Net interest income 5,273 3,981 14,547 11,900 Provision for possible loan losses 299 512 1,295 992 ------- ------- ------- ------- Net interest income after provision for possible loan losses 4,974 3,469 13,252 10,908 NON-INTEREST INCOME Service charges 486 316 1,122 879 Insurance commissions 124 105 324 340 Investment securities gains 8 1,164 151 1,172 Other 219 109 2,024 557 ------- ------- ------- ------- 837 1,694 3,621 2,948 NON-INTEREST EXPENSES Salaries and employee benefits 2,141 1,347 5,579 4,072 Occupancy and equipment expenses 651 431 1,615 1,120 Other expenses 1,223 1,466 3,840 3,162 ------- ------- ------- ------- 4,015 3,244 11,034 8,354 ------- ------- ------- ------- Income before income taxes 1,796 1,919 5,839 5,502 Provision for income taxes 505 596 1,526 1,646 ------- ------- ------- ------- NET INCOME $ 1,291 $ 1,323 $ 4,313 $ 3,856 ------- ------- ------- ------- ------- ------- ------- ------- Other comprehensive income (loss) net of tax: Change in unrealized losses on securities $ 395 $ 1,457 $ 679 $ 1,438 Reclassification of realized amount (8) (1,164) (151) (1,172) ------- ------- ------- ------- Net unrealized gain (loss) recognized in comprehensive income 387 293 528 266 ------- ------- ------- ------- COMPREHENSIVE INCOME $ 1,678 $ 1,616 $ 4,841 $ 4,122 ------- ------- ------- ------- ------- ------- ------- ------- Earnings per share $ .25 $ .27 $ .82 $ .78 Earnings per share assuming dilution $ .25 $ .27 $ .82 $ .78 Weighted average shares outstanding 5,232 4,934 5,232 4,934
See accompanying notes to the consolidated financial statements 4. PREMIER FINANCIAL BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (IN THOUSANDS) (UNAUDITED)
Nine Months Ended September 30 September 30 1998 1997 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 4,313 $ 3,856 Adjustments to reconcile net income to net cash from operating activities Depreciation and amortization 668 610 Provision for loan losses 1,295 992 Investment securities losses (gains), net (151) (1,172) Federal Home Loan Bank stock dividends (135) (91) Changes in Other assets (1,308) (5,795) Other liabilities (91) 4,323 --------- --------- Net cash from operating activities 4,591 2,723 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of investment securities available for sale (614,756) (288,982) Proceeds from sales of investment securities available for sale 109,284 141,483 Proceeds from maturities of investment securities available for sale 363,636 7,507 Purchases of investment securities held to maturity (3,993) (3,555) Proceeds from maturities of investment securities held to maturity 4,341 3,232 Purchase of FHLB and Federal Reserve stock (95) (1,073) Net change in federal funds sold 30,018 5,116 Net change in loans (41,613) (30,351) Purchases of bank premises and equipment (2,316) (1,591) Cash acquired in branch acquisitions 124,961 - Cash acquired through pooling (Note 2) 1,490 - --------- --------- Net cash used in investing activities (29,043) (168,214) CASH FLOWS FROM FINANCING ACTIVITIES Net change in deposits 5,355 17,897 Net change in agreements to repurchase securities 1,624 110,424 Advances from Federal Home Loan Bank, net 18,255 11,679 Proceeds from other borrowings 8,000 - Proceeds from issuance of Capital Trust preferred certificates - 28,750 Dividends paid (2,283) (1,768) --------- --------- Net cash from financing activities 30,951 166,982 --------- --------- Net change in cash and cash equivalents 6,499 1,491 Cash and cash equivalents at beginning of period 11,610 9,304 --------- --------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 18,109 $ 10,795 --------- --------- --------- ---------
See accompanying notes to the consolidated financial statements 5. PREMIER FINANCIAL BANCORP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1 - BASIS OF PRESENTATION The consolidated financial statements include the accounts of Premier Financial Bancorp, Inc. (the Company) and its wholly-owned subsidiaries, Georgetown Bancorp, Inc., Georgetown, Kentucky; Citizens Deposit Bank & Trust, Vanceburg, Kentucky; Bank of Germantown, Germantown, Kentucky; Citizens Bank, Sharpsburg, Kentucky; Farmers Deposit Bancorp, Eminence, Kentucky; The Sabina Bank, Sabina, Ohio; Ohio River Bank, Ironton, Ohio; The Bank of Philippi, Inc., Philippi, West Virginia (Philippi); and Boone County Bank, Inc., Madison, West Virginia (Boone). In addition, the Company has a data processing service subsidiary, Premier Data Services, Inc., Vanceburg, Kentucky and PFBI Capital Trust subsidiary discussed in Note 6. All material intercompany transactions and balances have been eliminated. NOTE 2 - BUSINESS COMBINATIONS On October 5, 1998, the Company entered into a definitive agreement to purchase Mt. Vernon Bancshares Inc., the holding company for The Bank of Mt. Vernon (Mt. Vernon), in a cash transaction. Mt. Vernon offers full service banking in Rockcastle and Pulaski counties and has two loan production offices in Madison County, Kentucky. The merger is subject to regulatory approval and is targeted for completion in the first quarter of 1999. Mt. Vernon had total assets of $130 million and year to date earnings of $716,000 at September 30, 1998. On June 26, 1998, the Company completed its acquisition of three branch offices of Banc One Corporation located in Philippi (chartered as the Bank of Philippi), and Madison and Van, West Virginia (chartered as Boone County Bank, Inc.). Included in the purchase were approximately $150 million in deposits, $9 million in loans and $1.5 million in facilities. The net premium paid for these branches was approximately $14.5 million. On March 20, 1998, the Company acquired Ohio River Bank (Ohio River) whereby the Company exchanged 297,840 shares of its common stock for all the issued and outstanding shares of Ohio River in a business combination accounted for as a pooling of interests. The financial statement presentation prior to January 1, 1998 has not been restated for this merger as the impact on those statements is not material. As of and for the year ended December 31, 1997, Ohio River reported net income of $176,000 and total assets of $39.5 million. On November 13, 1997, the Company acquired The Sabina Bank, Sabina, Ohio (Sabina), in a business combination accounted for as a pooling of interests. All of the outstanding shares of Sabina were exchanged for 476,300 shares of the Company's common stock. The accompanying consolidated financial statements for 1997 have been restated to give the effect of the combination, whereas the financial data released by the Company on October 21, 1998 for the three and nine month periods ended September 30, 1997 had not yet been restated for the combination. NOTE 3 - STOCK DIVIDEND The Company paid a 5% stock dividend on September 30, 1998. For comparability, prior per share information has been restated to reflect the 249,135 shares issued as a result. (Continued) 6. PREMIER FINANCIAL BANCORP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 4 - INVESTMENT SECURITIES Amortized cost and fair value of investment securities, by category, at September 30, 1998 are summarized as follows:
Amortized Unrealized Unrealized Fair Cost Gains Losses Value ---- ----- ------ ----- Available for sale U. S. Treasury securities $ 12,360 $ 70 $ - $ 12,430 U. S. agency securities 170,571 531 (11) 171,091 Obligations of states and political subdivisions 3,426 131 - 3,557 Asset-backed securities 5,674 54 - 5,728 Preferred stock 2,000 - - 2,000 Other equity securities 930 - (91) 839 --------- ----- ------ --------- Total available for sale $ 194,961 $ 786 $ (102) $ 195,645 --------- ----- ------ --------- --------- ----- ------ --------- Held to maturity U. S. Treasury securities $ 950 $ 17 $ - $ 967 U. S. agency securities 2,894 24 - 2,918 Obligations of states and political subdivisions 16,102 637 (3) 16,736 Asset-backed securities 56 - - 56 --------- ----- ------ --------- Total held to maturity $ 20,002 $ 678 $ (3) $ 20,677 --------- ----- ------ --------- --------- ----- ------ ---------
Amortized cost and fair value of investment securities, by category, at December 31, 1997 are summarized as follows:
Amortized Unrealized Unrealized Fair Cost Gains Losses Value ---- ----- ------ ----- Available for sale U. S. Treasury securities $ 10,071 $ 2 $ (11) $ 10,062 U. S. agency securities 25,966 29 (90) 25,905 Obligations of states and political subdivisions 3,458 110 (4) 3,564 Asset-backed securities 3,630 - (30) 3,600 Preferred stock 2,000 - - 2,000 Other equity securities 900 - (105) 795 --------- ----- ------ --------- Total available for sale $ 46,025 $ 141 $ (240) $ 45,926 --------- ----- ------ --------- --------- ----- ------ --------- Held to maturity U. S. Treasury securities $ 1,250 $ 6 $ (1) $ 1,255 U. S. agency securities 4,338 15 (5) 4,348 Obligations of states and political subdivisions 14,625 500 (15) 15,110 Asset-backed securities 149 1 (1) 149 --------- ----- ------ --------- Total held to maturity $ 20,362 $ 522 $ (22) $ 20,862 --------- ----- ------ --------- --------- ----- ------ ---------
(Continued) 7. PREMIER FINANCIAL BANCORP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 5 - LOANS Major classifications of loans at September 30, 1998 and December 31, 1997 are summarized as follows:
1998 1997 ---- ---- (In Thousands) Commercial, secured by real estate $ 79,723 $ 66,893 Commercial, other 57,204 45,024 Real estate construction 11,636 7,857 Real estate mortgage 119,035 93,789 Agricultural 16,680 13,208 Consumer 74,494 58,523 Other 6,133 504 -------- -------- $364,905 $285,798 -------- -------- -------- --------
NOTE 6 - ALLOWANCE FOR LOAN LOSSES Changes in the allowance for loan losses are as follows:
Three Months Ended Nine Months Ended September 30 September 30 1998 1997 1998 1997 ---- ---- ---- ---- Balance, beginning of period $4,208 $2,917 $3,144 $2,854 Acquired - - 450 - Net charge-offs (297) (296) (679) (713) Provision for loan losses 299 512 1,295 992 ------- ------- ------- ------- Balance, end of period $4,210 $3,133 $4,210 $3,133 ------- ------- ------- ------- ------- ------- ------- -------
NOTE 7 - CAPITAL SECURITIES OF SUBSIDIARY TRUST Guaranteed preferred beneficial interests in the Company's subordinated debentures (Preferred Securities) represent preferred beneficial interests in the assets of PFBI Capital Trust (Trust), a wholly-owned subsidiary of the Company. The Trust's sole assets are 9.75% junior subordinated debentures due June 30, 2027 issued by the Company on June 9, 1997. Distributions on the Preferred Securities will be payable at an annual rate of 9.75% of the stated liquidation amount of $25 per Preferred Security, payable quarterly. Cash distributions on the Preferred Securities are made to the extent interest on the debentures is received by the Trust. In the event of certain changes or amendments to regulatory requirements or federal tax rules, the Preferred Securities are redeemable in whole. Otherwise, the Preferred Securities are generally redeemable in whole or in part on or after June 30, 2002 at 100% of the liquidation amount. The Trust's obligations under the Preferred Securities are fully and unconditionally guaranteed by the Company. 8. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS A. Financial Condition and Results of Operations Net income for the nine months ended September 30, 1998 of $4,313,000 was 11.9% higher than the $3,856,000 recorded for the same period in 1997. For the same periods on a per share basis, net income increased to $.82 from $.78. The increase is primarily due to the second quarter recognition of a $1.3 million finder's fee included in other income relative to certain branch dispositions. Also contributing to the increase was a $2.6 million increase in net interest income. Offsetting these increases was a $303,000 increase in the provision for loan losses and a $2.7 million increase in non-interest expenses. Earning assets increased $199 million to $592 million at September 30, 1998 over December 31, 1997. The increase is the result of acquiring Ohio River Bank and three West Virginia branch offices from Banc One Corporation which combined provided an additional $180 million in earning assets. For the three months ended September 30, 1998, net income totaled $1,291,000 or $.25 per share compared to $1,323,000 or $.27 per share for the same period in 1997. This $32,000 decrease is the result of a $771,000 increase in noninterest expenses and a decrease in noninterest income of $857,000, which were essentially offset by a $1,292,000 increase in net interest income and a $213,000 decrease in the provision for loan losses. Net interest income increased $2,647,000 to $14,547,000 for the nine months ended September 30, 1998 compared to $11,900,000 for the same period in 1997 and increased $1,292,000 to $5,273,000 for the three months ended September 30, 1998 compared to the $3,981,000 reported in the three months ended September 30, 1997. The year to date and current quarter increases in net interest income is attributable to the current year acquisitions not reflected in prior periods and to overall growth in earning assets. The net interest margin on a tax-equivalent basis for the nine months ended September 30, 1998 was 3.88% compared to 4.35% for the first nine months of 1997 and 4.32% for all of 1997. The returns on average shareholders' equity and return on average assets were 10.8% and 1.05%, respectively, for the nine months ended September 30, 1998, compared to 11.2% and 1.28%, respectively for the same period in 1997. Non-interest income increased $673,000 to $3,621,000 for the first nine months of 1998 compared to $2,948,000 for the first nine months of 1997. The increase is primarily the attributable to a $1.3 million finder's fee recognized during the second quarter included in other income. Received in cash during the second quarter, the fee is the Company's portion of an agreement to assist another financial institution in connection with the acquisition of several offices of Banc One Corporation located in West Virginia. Non-interest income was $837,000 for the three months ended September 30, 1998 compared to $1,694,000 for the same period in 1997. The decrease is primarily due to security gains of $1,164,000 realized in 1997 compared to $8,000 in 1998. Exclusive of security gains, noninterest income increased$299,000, from $530,000 in the third quarter of 1997 to $829,000 in the third quarter of 1998. Non-interest expenses were $11,034,000 or 2.68% of average assets on an annualized basis during the first nine months of 1998 compared to $8,353,000 or 2.78% of average assets during the same period of 1997. Non-interest expenses increased $771,000 during the three months ended September 30, 1998 to $4,015,000 compared to $3,244,000 for the three months ended September 30, 1997. The increases in non-interest expenses are attributable to 1998 acquisitions, the results of operations for which are not included in the third quarter of 1997, and the general expansion of the Company's business. 9. Income tax expense was $1,526,000 for the first nine months of 1998 as compared to $1,646,000 for the first nine months of 1997. Income tax expense for 1998 was lower than 1997 even though income before taxes increased as a result of the reversal of a $234,000 valuation allowance for deferred tax assets of an acquired subsidiary bank. The valuation was recorded by the bank prior to its acquisition and was reversed by the Company during the first quarter because the valuation allowance was no longer considered necessary. The following table sets forth information with respect to the Company's non-performing assets at September 30, 1998 and December 31, 1997.
1998 1997 ---- ---- (In Thousands) Non-accrual loans $ 1,685 $ 562 Accruing loans which are contractually past due 90 days or more 978 490 Restructured 300 356 -------- -------- Total non-performing loans 2,963 1,408 Other real estate acquired through foreclosure 1,071 836 -------- ------- Total non-performing assets $ 4,034 $ 2,244 Non-performing loans as a percentage of total net loans .82% .50% Non-performing assets as a percentage of total assets .62% .53%
The provision for possible loan losses increased from $992,000 to $1,295,000 for the first nine months of 1997 compared to 1998. The increase for possible loan losses are in line with the increase in loans outstanding from $283.4 million at December 31, 1997 to $362.4 million at September 30, 1998. The allowance for loan losses at September 30, 1998 of $4,210,000 represented 1.16% of total loans outstanding. B. Liquidity Liquidity for a financial institution can be expressed in terms of maintaining sufficient cash flows to meet both existing and unplanned obligations in a cost effective manner. Adequate liquidity allows the Company to meet the demands of both the borrower and the depositor on a timely basis, as well as pursuing other business opportunities as they arise. Thus, liquidity management embodies both an asset and liability aspect. In order to provide for funds on a current and long-term basis, the Company primarily relies on the following sources: 1. Core deposits consisting of both consumer and commercial deposits and certificates of deposit of $100,000 or more. 2. Cash flow generated by repayment of loans and interest. 10. 3. Arrangements with correspondent banks for purchase of unsecured federal funds. 4. The sale of securities under repurchase agreements and borrowing from the Federal Home Loan Bank. 5. Maintenance of an adequate available-for-sale security portfolio. The cash flow statements for the periods presented in the financial statements provide an indication of the Company's sources and uses of cash as well as an indication of the ability of the Company to maintain an adequate level of liquidity. C. Capital In June 1997, the Corporation issued $28.8 million of 9.75% Mandatorily Redeemable Capital Securities of Subsidiary Trust. These securities will qualify as Tier I capital up to an amount not to exceed 25% of Tier I capital and the portion that exceeds the 25% limitation will qualify as Tier 2 or supplementary capital of the Corporation. The issuance of these securities and resultant increase in capital has allowed the Corporation to target larger financial institutions as potential acquisitions. At September 30, 1998, total shareholders' equity of $54.6 million equaled 8.4% of total consolidated assets. Tier I capital totaled $50.2 million at September 30, 1998, which represents a Tier I leverage ratio of 8.0%. Dividends of the Company for 1998 were as follows:
Amount Date of Date Per Share Total Record Paid --------- ----- ------- ---- Cash $.15 $747,809 March 20 March 31 Cash $.15 $747,809 June 22 June 30 Stock 5% - September 21 September 30 Cash $.15 $787,000 September 21 September 30
D. Year 2000 Management has assessed the operational and financial implications of its Year 2000 needs and developed a plan to ensure that data processing systems can properly handle the change. Management has determined that if a business interruption as a result of the Year 2000 issue occurred, such an interruption could be material. The primary effort required to prevent a potential business interruption is the installation of the most current software release from the Company's third party provider and replacement of certain system hardware. The third party software provider has warranted that Year 2000 remediation and testing efforts to become compliant have been successfully completed. Non-compliant hardware has already been replaced through routine hardware upgrades. Management intends to locally install and test the current software release before the end of 1998 which will complete the Year 2000 plan for mission critical systems. Should mission critical system readiness not be achieved by March 31, 1999, the Company intends to seek alternative solutions from other vendors. Non-mission critical systems, 11. including systems other than data processing with embedded technology, will continue to be evaluated and if necessary, will be upgraded or replaced. Management projects that the cost of Year 2000 readiness will be in a range of $40,000 to $100,000, which will be expensed as incurred. Year 2000 expenses are subject to change and could vary from current estimates if the final requirements for Year 2000 readiness exceed management's expectations. 12. PART II - OTHER INFORMATION Item 1. Legal Proceedings None Item 2. Changes in Securities None Item 3. Defaults Upon Senior Securities None Item 4. Submission of Matters to a vote of Security Holders None Item 5. Other Information None Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit No. Description of Document ---------- ------------------------ 27 Financial Data Schedules (b) Reports on Form 8-K No reports on Form 8-K have been filed during the quarter for which the report is filed. 13. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Corporation has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PREMIER FINANCIAL BANCORP, INC. Date: November 11, 1998 /s/ Marshall T. Reynolds -------------------------------- Marshall T. Reynolds Chairman of the Board Date: November 11, 1998 /s/ J. Howell Kelly -------------------------------- J. Howell Kelly President & Chief Executive Officer 14. EX-27 2 EXHIBIT 27 FDS
9 1,000 9-MOS DEC-31-1998 JAN-01-1998 SEP-30-1998 18,109 0 11,228 0 195,645 20,002 20,677 362,416 4,210 651,089 514,412 8,203 3,641 70,268 0 0 1,103 53,462 651,089 24,516 6,757 1,623 32,896 13,826 18,349 14,547 1,295 151 11,034 5,839 4,313 0 0 4,313 .82 .82 3.88 1,685 978 300 0 3,144 847 168 4,210 4,210 0 0 Computed on a tax-equivalent basis Includes allowance acquired through merger
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