UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2005
_____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 0-18868
PREMIER COMMUNITY BANKSHARES, INC.
(Exact name of registrant as specified in its charter)
Virginia | 54-1560968 |
_______________________________ | ___________________________________ |
(State or other jurisdiction | (I.R.S. Employer Identification No.) |
of incorporation or organization) | |
4095 Valley Pike | |
Winchester, Virginia | 22602 |
________________________________ | __________ |
(Address of principal executive offices) | (Zip Code) |
(540) 869-6600 | |
(Registrant’s telephone number, including area code) | |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO______
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act.) YES X NO______
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 4,934,548, $1.00 par value, as of May 4, 2005.
PART I. FINANCIAL INFORMATION
Item 1.
Financial Statements
The following financial statements are provided at the page numbers indicated.
Consolidated Balance Sheets at March 31, 2005 and December 31, 2004
3
Consolidated Statements of Income for the Three Months Ended
March 31, 2005 and 2004
4
Consolidated Statements of Changes in Shareholders’ Equity for the
Three Months Ended March 31, 2005 and 2004
5
Consolidated Statements of Cash Flows for the Three Months Ended
March 31, 2005 and 2004
6
Notes to Consolidated Financial Statements
7-13
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results
of Operations
14-20
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
21-22
Item 4.
Controls and Procedures
22
Part II.
OTHER INFORMATION
23
Signatures
24
2
PART I. FINANCIAL INFORMATION | ||
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Item 1. FINANCIAL STATEMENTS | ||
PREMIER COMMUNITY BANKSHARES, INC. | ||
Consolidated Balance Sheets | ||
(In Thousands, Except for Share Data) | ||
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| March 31, | December 31, |
| 2005 | 2004 |
Assets: | (Unaudited) |
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Cash and due from banks | $16,733 | $21,459 |
Interest-bearing deposits in other banks | 173 | 115 |
Federal funds sold | 22,379 | 19,075 |
Securities available for sale, at fair value | 20,332 | 19,745 |
Securities held to maturity (fair value: March 31, 2005, |
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$7,496; December 31, 2004, $7,481) | 7,570 | 7,569 |
Loans, net of allowance for loan losses (allowance: $5,238 |
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March 31, 2005, $5,007 December 31, 2004) | 517,078 | 486,865 |
Bank premises and equipment, net | 13,453 | 12,158 |
Accrued interest receivable | 2,072 | 1,850 |
Other real estate | - | 151 |
Other assets | 10,018 | 7,163 |
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Total Assets | $609,808 | $576,150 |
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Liabilities and Shareholders' Equity: |
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Liabilities: |
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Deposits: |
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Non-interest bearing demand deposits | $84,800 | $88,229 |
Savings and interest-bearing demand deposits | 147,748 | 148,729 |
Time deposits | 282,346 | 246,975 |
Total deposits | 514,894 | 483,933 |
Federal Home Loan Bank advances | 31,000 | 30,000 |
Short-term borrowings | 510 | 513 |
Accounts payable and accrued expenses | 3,887 | 3,860 |
Capital lease payable | 176 | 179 |
Trust preferred capital notes | 13,403 | 13,403 |
Total Liabilities | $563,870 | $531,888 |
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Shareholders' Equity: |
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Preferred stock, Series A, 5% noncumulative, no par |
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value; 1,000,000 shares authorized and unissued | - | - |
Common stock, $1 par value, 20,000,000 shares authorized |
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March 31, 2005, 4,931,798 shares issued and outstanding; |
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December 31, 2004, 4,919,548 shares issued and outstanding | 4,932 | 4,920 |
Capital surplus | 19,565 | 19,502 |
Retained earnings | 21,371 | 19,710 |
Accumulated other comprehensive income | 70 | 130 |
Total Shareholders' Equity | 45,938 | 44,262 |
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Total Liabilities and Shareholders' Equity | $609,808 | $576,150 |
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See Accompanying Notes to Consolidated Financial Statements | ||
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3
PREMIER COMMUNITY BANKSHARES, INC. | ||
Consolidated Statements of Income | ||
(In Thousands, Except for Share Data) | ||
| (Unaudited) | |
| For the Three Months Ended | |
| March 31, | |
| 2005 | 2004 |
Interest and dividend income: |
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Interest and fees on loans | $ 8,549 | $ 6,822 |
Interest on investment securities: |
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Nontaxable | 44 | 47 |
Taxable | 67 | 70 |
Interest and dividends on securities available for sale: |
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Nontaxable | 66 | 66 |
Taxable | 98 | 80 |
Dividends | 25 | 14 |
Interest on deposits in banks | 1 | 1 |
Interest on federal funds sold | 81 | 50 |
Total interest and dividend income | $ 8,931 | $ 7,150 |
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Interest expense: |
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Interest on deposits | $ 2,288 | $ 1,784 |
Interest on capital lease obligations | 4 | 4 |
Interest on borrowings | 391 | 248 |
Total interest expense | $ 2,683 | $ 2,036 |
Net interest income | $ 6,248 | $ 5,114 |
Provision for loan losses | 227 | 429 |
Net interest income after provision for loan losses | $ 6,021 | $ 4,685 |
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Noninterest income |
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Service charges on deposit accounts | $ 716 | $ 721 |
Commissions and fees | 230 | 147 |
Other | 106 | 167 |
Total noninterest income | $ 1,052 | $ 1,035 |
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Noninterest expense |
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Salaries and employees | $ 2,442 | $ 2,004 |
Net occupancy expense of premises | 259 | 209 |
Furniture and equipment | 270 | 235 |
Other | 1,623 | 1,333 |
Total noninterest expenses | $ 4,594 | $ 3,781 |
Income before income taxes | $ 2,479 | $ 1,939 |
Provision for income taxes | 818 | 618 |
Net income | $ 1,661 | $ 1,321 |
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Average shares: |
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Basic | 4,926,403 | 4,883,804 |
Assuming dilution | 5,071,086 | 5,045,687 |
Earnings per common per share: |
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Basic | $ 0.34 | $ 0.27 |
Assuming dilution | $ 0.33 | $ 0.26 |
See Accompanying Notes to Consolidated Financial Statements | ||
4
PREMIER COMMUNITY BANKSHARES, INC. | ||||||
Consolidated Statement of Changes in Shareholders' Equity | ||||||
For the Three Months Ended March 31, 2005 and 2004 | ||||||
(In Thousands, Except Shares Issued) | ||||||
(Unaudited) | ||||||
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| Accumulated |
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| Other |
| Total |
| Common | Capital | Retained | Comprehensive | Comprehensive | Shareholders' |
| Stock | Surplus | Earnings | Income | Income | Equity |
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Balance December 31, 2003 | $ 4,881 | $ 19,328 | $ 14,400 | $ 268 |
| $ 38,877 |
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Comprehensive Income |
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Net income |
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| 1,321 |
| $ 1,321 | 1,321 |
Other comprehensive income, |
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net of tax |
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| - |
| - | - |
Unrealized gain on available for |
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sale securities (net of tax $15) |
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| $29 | 29 | 29 | |
Total comprehensive income |
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| $ 1,350 |
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Issuance of common stock- |
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exercise of stock options |
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(5,400 shares) | 6 | 21 |
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| 27 |
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Balances - March 31, 2004 | $ 4,887 | $ 19,349 | $ 15,721 | $ 297 |
| $ 40,254 |
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| Accumulated |
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| Other |
| Total |
| Common | Capital | Retained | Comprehensive | Comprehensive | Shareholders' |
| Stock | Surplus | Earnings | Income | Income | Equity |
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Balance December 31, 2004 | $ 4,920 | $ 19,502 | $ 19,710 | $ 130 |
| $ 44,262 |
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Comprehensive Income |
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Net income |
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| 1,661 |
| $ 1,661 | 1,661 |
Other comprehensive income, |
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net of tax |
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| -- |
| -- | -- |
Unrealized loss on available for |
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sale securities (net of tax $32) |
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| (60) | (60) | (60) | |
Total comprehensive income |
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| $ 1,601 |
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Issuance of common stock- |
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exercise of stock options |
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(12,250 shares) | 12 | 63 |
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| 75 |
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Balances - March 31, 2005 | $ 4,932 | $ 19,565 | $ 21,371 | $ 70 |
| $ 45,938 |
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See Accompanying Notes to Consolidated Financial Statements | ||||||
5
PREMIER COMMUNITY BANKSHARES, INC. | ||
Consolidated Statements of Cash Flows | ||
For the Three Months Ended March 31, 2005 and 2004 | ||
(In Thousands) | ||
(Unaudited) | ||
| 2005 | 2004 |
CASH FLOWS FROM OPERATING ACTIVITIES |
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Net income | $ 1,661 | $ 1,321 |
Adjustments to reconcile net income |
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to net cash provided by operating activities: |
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Depreciation and amortization | 270 | |