Through the Banks the Company focuses on providing quality community banking
services to individuals and small-to-medium sized businesses. By seeking to
provide such banking services in non-urban areas, the Company believes that
it can minimize the competitive effect of larger financial institutions that
typically are focused on large metropolitan areas. Where the Company owns branches
in urban areas, such as the Washington, DC Metro Area, the Company believes
the nimble nature of its operations and local decision making process allows
it to compete effectively with larger financial institution. Each Bank retains
its local management structure which offers customers direct access to the Banks
president or regional president and other officers in an environment conducive
to friendly, informed and courteous service.
Each Bank maintains its community orientation by, among other things, having
selected members of its community as members of its board of directors, who
assist in the introduction of prospective customers to the Bank and in the development
or modification of products and services to meet customer needs. As a result
of the development of personal banking relationships with its customers and
the convenience and service offered by the Banks, the Banks lending and investing
activities are funded primarily by core deposits.
When appropriate and economically advantageous, the Company centralizes certain
of the Banks back office, support and investment functions in order to achieve
consistency and cost efficiency in the delivery of products and services. The
Company centrally provides services such as accounting, loan review, operations
and network support, human resources, compliance and internal auditing to the
Banks to enhance their ability to compete effectively. The Company also provides
overall direction in the areas of credit policy and administration, strategic
planning, marketing, investment portfolio management and other financial and
administrative services. Each Bank participates in product development by advising
management of new products and services needed by its customers and desirable
changes to existing products and services. Company senior management along with
each Banks management periodically review and standardize their offering of
products and services, although pricing decisions remain at the local level.
The Company utilizes an external third party provider for its core data processing
systems. As a result, the Company through the Banks is able offer more modern
products, such as internet banking and check imaging, and is able to take advantage
of emerging technologies such as image exchange to remit and clear items with
its exchange agents. With the conversion to FIS in 2011, all of these benefits
remain plus the Company has integrated its automated teller machine network,
improved its management reporting systems, adopted an integrated image-based
document storage system, and offers mobile banking via smart phones and other
hand held computing devices.
The Banks residential mortgage lending activities consist primarily of loans
for purchasing personal residences or loans for commercial or consumer purposes
secured by residential mortgages. The Banks typically only retain mortgage loans
with variable interest rate terms due to the longer amortization periods associated
with mortgage lending. For customers who desire fixed rate mortgage terms, the
Banks assist customers in originating residential mortgage loans that are sold
in the secondary mortgage market. The Banks’ mortgage originators are
salaried employees who do not receive a commission or other incentive compensation
for the number or type of mortgages they originate. Consumer lending activities
consist of traditional forms of financing for automobile and personal loans
including unsecured lines of credit. Commercial lending activities include loans
to small to medium-sized businesses located primarily in the communities in
which the Banks have branch locations and surrounding areas. Commercial loans
are secured by business assets including real estate, equipment, inventory,
and accounts receivable. Some commercial loans are unsecured. Through the acquisition
of Abigail Adams, the Company inherited a concentration in commercial real estate
development loans. Many of these loans were for the revitalization of apartment
buildings in and around the Washington, DC metro area, some of which would result
in the apartment complex converting into individually owned condominiums. Since
the acquisition of Abigail Adams, Premier has worked to reduce these concentrations
by providing funding only during the construction phase. The Washington, DC
metro area also offers opportunities for larger commercial and commercial real
estate loans. These opportunities are subject to Premier’s strict credit
underwriting policies and procedures.
The Banks range of deposit services includes checking accounts, NOW accounts,
savings accounts, money market accounts, club accounts, individual retirement
accounts, certificates of deposit and overdraft protection. Customers can access
their accounts via traditional bank branch locations as well as Automated Teller
Machines (ATM’s) and the internet either via personal computers or mobile
computing devices such as smart phones. The Banks also offer bill payment, remote
deposits via image capture devices and telephone banking services. Deposits
of the Banks are insured by the Deposit Insurance Fund administered by the FDIC
to the maximum amounts offered by the FDIC.
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