On June 29, XYZ Corporation, a new computer manufacturer, was looking to purchase processors for its inventory.  XYZ borrowed $50,000 from Abbotville Bank to purchase 2,500 processors and granted Abbotville Bank a security interest in the processors; Abbotville Bank did not file a financing statement covering the processors.  Three weeks later, XYZ borrowed $25,000 from Bartlett Bank for working capital.  XYZ granted Bartlett Bank a security interest in the processors, and Bartlett promptly filed a financing statement on the processors. 

On December 17, XYZ Corporation, who had failed to sell any computers, defaulted on both loans.  Both Abbotville Bank and Bartlett Bank are attempting to repossess the processors.  Which statement is correct?

1. Abbotville Bank has priority because its PMSI gives it priority over Bartlett Bank.

2. Abbotville Bank has priority because its perfected security interest gives it priority over Bartlett Bank.

3.  Bartlett Bank has priority because its PMSI gives it priority over Abbotville Bank.

4.  Bartlett Bank has priority because its perfected security interest gives it priority over Abbotville Bank.