You certainly don't hav to stitch anything if your master is a 12mp or larger image. I have to downsize my master images for Premiere.
This could be another possibility to check, if his photo resolution doesn't fill up the entire output screen, perhaps that's causing the black banding on each side?
Sorry I wasn't more help with Premiere, I don't use it and I approach this with a different workflow. I use ProShow slideshow software to take advantage of all the latest special effects for photos, and then bring the rendered clip(s) into PowerDirector to combine with video if I'm adding it. Sometimes I just bring the video clips into ProShow to finish it up if the video editing is simple. Either way, I recommend using slideshow software for photos.
This seems like a good opportunity to share a couple YouTube slideshows with and without video mixed in:
Whitney Day Hike with my Daughter JMT Northern Section 2011 Quick edit to correct the software name.