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FIRST BANK SYSTEM FIRST QUARTER EARNINGS UP 32 PERCENT

         FIRST BANK SYSTEM FIRST QUARTER EARNINGS UP 32 PERCENT
    EARNINGS SUMMARY                  1Q       1Q     Change   Percent
    ($ in Millions, except           1993     1992             Change
     per share data)
    Before cumulative effect
     of accounting changes:
      Income                        $63.7    $48.1     $15.6     32.4
      Earnings per common share       .60      .48       .12     25.0
    Net income                       63.7    200.0    (136.3)   (68.2)
    Earnings per share               $.60    $2.27    $(1.67)   (73.6)
    Dividends paid per common share 0.250    0.205     0.045     22.0
    Book value per common share
     (quarter-end)                  18.20    17.30      0.90      5.2
    Return on common equity (pct.)(a)13.5     11.3       2.2       --
    Return on assets (pct.)(a)       1.17     0.95      0.22       --
    (a) 1992 ratios before cumulative effect of accounting changes
    MINNEAPOLIS, April 15, 1993 -- First Bank System, Inc. (NYSE: FBS) today reported first quarter 1993 earnings of $63.7 million, an increase of $15.6 million, or 32.4 percent, from first quarter of 1992 income before cumulative effect of accounting changes.  On a per share basis, earnings were $0.60 in the first quarter of 1993, compared with earnings per share before cumulative effect of accounting changes of $0.48 per share in the first quarter of 1992.
    Reported net income for the first quarter of 1992 was $200.0 million ($2.27 per share), including income of $151.9 million ($1.79 per share) resulting from the adoption of Financial Accounting Standards (FAS) 109 and 106, relating to income taxes and certain post-retirement benefits, respectively.  Both standards were adopted in the fourth quarter of 1992, retroactive to the first quarter of 1992.  First Bank System results for 1992 have also been restated to give effect to the Dec. 18, 1992 acquisition of Western Capital Investment Corporation (WCIC), which was accounted for using the pooling-of-interests method. Results for 1993 include the results of Bank Shares Incorporated (BSI), which was acquired on Dec. 31, 1992.  The BSI acquisition was accounted for using the purchase method, and, therefore, had no effect on 1992 earnings.
    Return on average assets was 1.17 percent in the current period, compared with 0.95 percent before the effect of accounting changes in the first quarter of 1992.  Return on average common equity was 13.5 percent in the first quarter of 1993, compared with 11.3 percent before accounting changes in the first quarter of last year.
    The improvement in earnings, excluding the cumulative effect of adopting FAS 106 and 109, resulted from an increase in net interest income on a taxable-equivalent basis of $27.7 million, or 13.2 percent, combined with stronger noninterest income, which was up $11.9 million, or 12.0 percent, from the first quarter of last year.  The increase in revenues for the quarter, approximately two-thirds of which resulted from the inclusion of BSI income, was partially offset by higher noninterest expense, which exceeded expense from the first quarter of 1992 by $17.4 million, or 8.9 percent, due to costs attributable to BSI and other acquisitions made in 1992.
    Net interest margin on a taxable-equivalent basis rose 23 basis points from the first quarter of 1992, to 4.91 percent.  The efficiency ratio, the ratio of expenses to revenues, improved to 60.9 percent from 63.0 percent for the first quarter of last year as a result of revenue growth, continued cost control and progress in the integration of WCIC and BSI into First Bank System operations.  First quarter 1993 average full-time equivalent employees were 10.1 thousand, compared with the first quarter 1992 average of 10.8 thousand, pro forma for the BSI acquisition.
    Nonperforming assets dropped to $328.7 million at the end of the first quarter, a decline of $29.0 million, or 8.1 percent, from the end of 1992 and a decrease of $81.2 million, or 19.8 percent, from the first quarter of 1992.  The ratio of the allowance for credit losses to nonperforming loans continues to indicate strong reserve coverage, increasing to 182.2 percent, from 163.5 percent at the end of the first quarter of last year.  The coverage ratio of reserves to nonperforming assets in creased from 87.4 percent to 115.6 percent during the same period.
    First Bank System's chairman, president and chief executive officer, John F. Grundhofer said, "The strong first quarter results indicate that First Bank System is positioned for steady earnings growth.  We continue to experience increased net interest and noninterest income, while controlling costs.  We also continue to see improvements in credit quality, as evidenced by our lower provision for losses and declining level of nonperforming assets."  He added, "The process of integrating our recent acquisitions is on target and we expect to realize substantial cost savings during the remainder of the year."  First Bank System is anticipating a second-quarter closing on the acquisition of Colorado National Bank.
    INCOME STATEMENT HIGHLIGHTS
    ($ in millions)
                                     1Q 1993    1Q 1992    Pct. Change
    Net interest income
     (taxable-equivalent basis)       $238.1     $210.4       13.2
    Provision for credit losses         35.2       37.8       (6.9)
    Noninterest income                 111.3       99.4       12.0
    Noninterest expense                212.6      195.2        8.9
    Income before taxes                101.6       76.8       32.3
    Taxable-equivalent adjustment        4.8        6.1      (21.3)
    Income taxes                        33.1       22.6       46.5
    Income before cumulative effect of
     changes in accounting principals   63.7       48.1       32.4
    Cumulative effect of
     accounting changes                   --      151.9        nm
    Net income                         $63.7     $200.0        nm
    Net interest margin
     (taxable-equivalent basis - pct.)  4.91       4.68        --
    Efficiency ratio (pct.)             60.9       63.0        --
    nm: not meaningful
    Net interest income on a taxable-equivalent basis was $238.1 million for the first quarter of 1993, an increase of $27.7 million, or 13.2 percent, from the first quarter of last year.  The improvement in net interest income reflects the addition of BSI.  Also contributing to the increase was an increase in average noninterest-bearing deposits of $850 million, or 22.8 percent.
     The net interest margin on a taxable-equivalent basis was 4.91 percent in the first quarter of 1993, an increase of 23 basis points from the 4.68 percent of the first quarter of 1992.  The improvement in net interest margin results from decreased funding costs and the continuing shift in the mix of the company's loan portfolio towards higher yielding consumer and small business loans.  Average earning assets totaled $19.7 billion in the first quarter of 1993, compared with $18.7 billion in the fourth quarter of 1992 and $18.1 billion in the first quarter of 1992.  The increase in average earning assets reflects the acquisition of BSI on Dec. 31, 1992.  Total deposits at March 31, 1993 were lower than at the end of 1992 because of seasonal factors which typically drive up deposit balances at year end.
    NONINTEREST INCOME
    ($ in millions)
                                     1Q 1993    1Q 1992    Pct. Change
    Trust fees                         $32.2      $28.6       12.6
    Service charges                     25.0       21.8       14.7
    Credit card fees                    15.4       12.4       24.2
    Insurance commissions                5.0        6.6      (24.2)
    Trading account profits              2.6        2.1       23.8
    Investment securities gains          0.2         --        nm
    Other                               30.9       27.9       10.8
    Total noninterest income           111.3       99.4       12.0
    nm: no meaningful
    Noninterest income in the first quarter of 1993 was $111.3 million, an increase of $11.9 million, or 12.0 percent, from the first quarter of 1992.  Trust fees, service charges and credit card fees increased $9.8 million, or 15.6 percent, from the same quarter last year.  Trust fees for 1993 include income generated by the First Trust California corporate trust business acquired in July of 1992.  Trust fees and service charges from BSI also contributed to the increase in noninterest income during the first quarter of 1993.  Insurance commissions were lower in 1993 than in 1992 because of the sale of the Montana and Twin Cities Metro insurance agencies in the third quarter of 1992 and first quarter of 1993, respectively.  Other noninterest income was higher by $3.0 million, or 10.8 percent,  than for the same period in 1992, due primarily to the BSI acquisition.
    NONINTEREST EXPENSE
    ($ in millions)
                                     1Q 1993    1Q 1992    Pct. Change
    Salaries                           $80.4      $75.4        6.6
    Employee benefits                   20.9       18.5       13.0
    Net occupancy                       21.6       18.9       14.3
    Furniture and equipment             14.1       13.2        6.8
    FDIC insurance                      10.1        9.3        8.6
    Professional services                6.5        6.5         --
    Other real estate                    0.3        2.3      (87.0)
    Amortization of goodwill
     and intangibles                     6.6        4.5       46.7
    Other                               52.1       46.6       11.8
    Total noninterest expense         $212.6     $195.2        8.9
    Noninterest expense in the first quarter of 1993 increased $17.4 million, or 8.9 percent, from the first quarter of 1992.  Compared with noninterest expense for the first quarter of 1992, including the operations of BSI and First Trust California on a pro forma basis, noninterest expense declined approximately $4 million, or 2 percent. Salaries and benefits expense for the quarter increased $7.4 million, or 7.9 percent, from the first quarter of 1992 and net occupancy and equipment expense increased $3.6 million, or 11.2 percent, over the same period.  While certain operating efficiencies already have been realized in connection with the 1992 acquisitions, additional cost savings from the integration of WCIC and BSI are anticipated following the completion of planned systems conversions and branch consolidations in the second and third quarters of 1993.
    The premium expense on FDIC insurance for the first quarter of 1993 was 8.6 percent higher than for the same period in 1992 because of generally higher deposit levels, including balances acquired through BSI.  Other noninterest expense, including data processing, training and other personnel expense and other miscellaneous expenses, increased by 11.8 percent over the first quarter of 1992, primarily because of the acquisition of BSI.
    ALLOWANCE FOR CREDIT LOSSES
    ($ in millions)
                                      1Q 1993    4Q 1992    1Q 1992
    Balance, beginning of period       $387.5     $351.4     $365.1
    Net charge-offs (recoveries)
     Commercial and financial            9.9       7.3         3.7
     HLTs                                2.8      13.4         1.1
     Commercial real estate             12.8       8.7        15.3
     Total commercial loans             25.5      29.4        20.1
     Consumer                           17.1      25.3        24.4
     Total                              42.6      54.7        44.5
    Provision for credit losses         35.2      51.3        37.8
    Asset acquisition additions           --      39.5          --
    Balance, end of period            $380.1    $387.5      $358.4
    Net charge-offs to
     average loans (pct.)               1.15      1.48        1.24
    Allowance for credit losses
     to period-end loans (pct.)         2.48      2.51        2.43
    The provision for credit lossee?creased by $2.6 million, or 6.9 percent, from the first quarter of 1992, to $35.2 million.  Net charge-offs totaled $42.6 million during the first quarter of 1993, down from $44.5 million for the same period last year.  Commercial loan net charge-offs increased $5.4 million from the first quarter of 1992, and decreased $3.9 million from the fourth quarter of 1992.  Net charge-offs for consumer loans in the first quarter of 1993 were $7.3 million lower than for the same period of 1992 because of  improvements in the credit card portfolio and other consumer loans.  Net charge-offs for the fourth quarter of 1992 included $5.7 million resulting from a policy change which accelerated consumer loan charge-offs.
    The allowance for credit losses was $380.1 million at March 31, 1993, down from $387.5 million at Dec. 31, 1992 and up from $358.4 million at March 31, 1992.  The increase from March 31, 1992 reflects the addition of BSI reserves.  The ratio of allowance for credit losses to nonperforming loans continues to indicate strong reserve coverage, increasing to 182.2 percent at the end of the quarter, compared with 178.8 percent at year-end 1992, and 163.5 percent at the end of the first quarter of 1992.
    ASSET QUALITY
    ($ in millions)
                         3/31/93  12/31/92  9/30/92  6/30/92  3/31/92
    Nonperforming loans
     Commercial and
      financial            $70.2     $80.9    $93.5    $95.9    $75.1
     HLTs                   56.7      64.4     43.8     44.9     44.7
     Commercial real estate 49.9      46.1     37.7     46.7     70.3
     Consumer               31.8      25.3     25.4     26.4     29.1
     Total                 208.6     216.7    200.4    213.9    219.2
    Other real estate      116.9     137.6    154.1    157.7    174.8
    Other nonperforming
    assets                   3.2       3.4      9.1      9.9     15.9
    Total nonperforming
     assets               $328.7    $357.7   $363.6   $381.5   $409.9
    Allowance to nonperforming
     loans (pct.)          182.2     178.8    175.3    166.3    163.5
    Allowance to nonperforming
     assets (pct.)         115.6     108.3     96.6     93.3     87.4
    Nonperforming assets to
     loans plus ORE (pct.)  2.13      2.30     2.47     2.56     2.75
    Nonperforming assets at March 31, 1993 totaled $328.7 million, down by $81.2 million, or 19.8 percent, from the total at March 31, 1992, and down by $29.0 million, or 8.1 percent, from the level at Dec. 31, 1992. The balance is lower than a year ago despite the addition of $27.4 million of BSI nonperforming assets acquired in December of 1992. The ratio of nonperforming assets to loans and other real estate improved from 2.75 percent at March 31, 1992 to 2.13 percent at March 31, 1993.
    The most significant change in the balance of nonperforming assets at March 31, 1993, as compared with the end of the first quarter of 1992, occurred in other real estate, which was down $57.9 million, reflecting merger-related and other valuation write-downs and sales of properties.
    Capital ratios have improved from the end of the first quarter of 1992: at March 31, 1993, the common-equity-to-assets ratio reached 7.6 percent, which compares favorably to the bank peer group median level of 6.6 percent at Dec. 31, 1992.  Shareholders' equity-to-assets at March 31, 1993 was 9.3 percent, among the highest of the regional banks' ratios and comparing favorably to a peer group level of 7.3 percent in the fourth quarter of 1992.
    CAPITAL POSITION (pct.)
                            3/31/93  12/31/92  9/30/92  6/30/92  3/31/92
    Common equity to assets     7.6       7.2      7.4      7.4      7.0
    Tangible common
     equity to assets           6.9       6.6      6.8      6.8      6.5
    Total shareholders'
     equity to assets           9.3       8.8      9.2      9.2      8.9
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Date:Apr 15, 1993
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