First Commerce Announces Third Quarter Earnings.NEW ORLEANS--(BUSINESS WIRE)--Oct. 14, 1997--First Commerce Corporation (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :FCOM FCOM Facilities Capital Cost of Money FCOM Flight Crew Operating Manual FCOM Francesco WarCry Oscuro Martigen (The Elder Scrolls: Oblivion IV mod) ) announced today its third quarter results, including the following: -- Net income was $31.7 million, or $.77 per fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share. Net interest income (FTE FTE Full-Time Equivalent FTE Full-Time Employee FTE Full-Time Equivalency FTE Full Time Employment FTE Foundation for Teaching Economics FTE Full Time Enrollment FTE For the Enterprise (SQL) FTE Fund for Theological Education ) of $96.9 million and $52.1 million of noninterest income resulted in total revenue of $149.0 million for the quarter. The net interest margin was 4.51%. Operating expense Operating Expense The essential things that a company must purchase in order to maintain business. Notes: For example, the payment of employees wages are an operating expense. Also known as OPEX. in the third quarter of 1997 was $84.3 million. -- The provision for loan losses was $15.8 million in the third quarter which exceeded net charge-offs by $5.5 million. This reflects both strong loan growth and the impact on the experience factor of increasing charge-offs during the last twelve months. Net charge-offs were $10.4 million, or .65% of average loans. Managed credit card net charge-offs decreased for the second consecutive quarter to 3.95% of the quarter's average credit card loans. -- Nonperforming assets Nonperforming asset An asset that is not effectively producing income, such as an overdue loan. nonperforming asset An asset that produces no income. were $40.3 million at September September: see month. 30, 1997, or .64% of loans. The allowance for loan losses was $84.4 million, or 1.33% of loans, at the end of the quarter. Loans past due 90 days or more not on nonaccrual declined to $25.6 million as of September 30, 1997. -- Average loans outstanding were $6.4 billion and average deposits were $7.5 billion during 1997's third quarter. -- Total assets were $9.3 billion at September 30, 1997, and deposits were $7.4 billion. The leverage ratio was 8.07% at the end of the third quarter. In the past three years, loan growth has outpaced deposit growth, causing First Commerce to use wholesale funding sources since late 1996. On August 7, $300 million of credit card receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed were securitized securitized Of, related to, or being debt securities that are secured with assets. For example, mortgage purchase bonds are secured by mortgages that have been purchased with the bond issue's proceeds. for additional funding. The ongoing accounting effect of securitization Securitization The process of creating a financial instrument by combining other financial assets and then marketing them to investors. Notes: Mortgage backed securities are a perfect example of securitization. May also be spelled as "securitisation. is to reduce net interest income and provision while increasing noninterest income. The effect of securitization in the third quarter was to increase earnings per share by $.03. Included in the third quarter's noninterest income was $3.8 million of securitization revenue, including $1.8 million which would have been recorded as net interest income prior to the securitization. The new noninterest income line item, securitization revenue, represents the net effect of the securitized credit card receivables' net interest income, provision for loan losses, credit card fee income, and gains on sale. The effect of the net interest income shift was to reduce the net interest margin by 8 basis points. In addition, the efficiency ratio increased 21 basis points due to the shift of the provision to the securitization revenue line. First Commerce's venture capital business realized additional income this quarter from the sale of securities of companies in which it invested. Gains of $3.5 million were realized from sales of securities in the third quarter, compared to a $3.0 million gain in the second quarter and a $1.2 million loss in 1996's third quarter. As of September 30, 1997, remaining estimated unrealized gains Unrealized Gain A profit that results from holding on to an asset rather than cashing it in and using the funds. Notes: Let's say you own a stock that has doubled, but you haven't sold it yet. This is said to be an unrealized gain. were $5.6 million; the quarter's sales decreased the estimated unrealized gain only slightly from $6.1 million at June June: see month. 30. The following discussion compares this quarter's results to 1997's second quarter and 1996's third quarter. To make the quarters' results comparable, the following items have been excluded: -- the effect of securitization was excluded from the third quarter; -- venture capital securities transactions and investment securities transactions have been excluded from all quarters; -- a large commercial loan recovery, which reduced the provision by $3.2 million and increased net interest income by $922,000, was excluded from the second quarter; -- the one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. SAIF recapitalization Recapitalization Restructuring a company's debt and equity mixture often with the aim of making a company's capital structure more stable. Notes: Companies often want to diversify their debt-to-equity ratio to improve liquidity. assessment of $5.3 million was excluded from 1996's third quarter. Total revenue (FTE) was $145.8 million in the third quarter, up 1.9% (7.4% annualized annualized Of or relating to a variable that has been mathematically converted to a yearly rate. Inflation and interest rates are generally annualized since it is on this basis that these two variables are ordinarily stated and compared. ) from the second quarter and 5.2% higher than last year's third quarter. Net interest income and noninterest income contributed to these improvements. The efficiency ratio was 57.82% for the third quarter, 57.45% in the second quarter, and 56.49% in last year's third quarter. Net interest income (FTE) was $98.7 million for the third quarter. The 1.4% (5.5% annualized) increase from the second quarter and the 3.9% growth from 1996's third quarter resulted from continued loan growth. Higher funding costs continue to offset the effect of loan growth on net interest income. Funding costs have been increasing for several quarters due to the wholesale funding begun in 1996's fourth quarter, the customer retention strategy of moving FCC's best clients into higher yielding accounts, and the attrition Attrition The reduction in staff and employees in a company through normal means, such as retirement and resignation. This is natural in any business and industry. Notes: of noninterest-bearing accounts. FCC (1) (Federal Communications Commission, Washington, DC, www.fcc.gov) The U.S. government agency that regulates interstate and international communications including wire, cable, radio, TV and satellite. The FCC was created under the U.S. continues to be successful with the strategy of retaining its most profitable clients as demonstrated by a 94% retention rate this year of its best retail clients. The net interest margin was 4.59% in the third quarter, compared to 4.62% in the second quarter and 4.82% in 1996's third quarter. Noninterest income was $47.1 million in the current quarter, up 2.9% (11.5% annualized) from the second quarter and 8.2% better than last year's third quarter. Growth of broker/dealer revenue and credit card fees were the most significant causes of the increase from the second quarter. Compared to the same quarter of 1996, the primary improvements were in credit card fees, broker/dealer revenue, and trust fees. The provision for loan losses was $18.6 million in the third quarter, $18.0 million for the second quarter, and $12.5 million in 1996's third quarter. Net charge-offs were $12.3 million in the third quarter, or .75% of average loans. For the second consecutive quarter, credit card net charge-offs declined. Net charge-offs of credit card loans totaled $8.6 million, or 3.95% of average credit card loans in the third quarter, compared to $8.7 million, or 4.16% of loans, in the second quarter and $9.0 million, or 4.40% of loans, in the first quarter. Credit card net charge-offs were $5.6 million in 1996's third quarter, or 3.20% of average credit card loans. On a one year lagged basis, credit card net charge-offs were 4.88% in 1997's third quarter, down from 5.40% in the second quarter. Consumer loan net charge-offs were $4.1 million for the third quarter, or .82% of average consumer loans, compared to .76% in both the second quarter and 1996's third quarter. Commercial loans continue to experience net recoveries. Operating expense was $84.3 million for the current quarter. Virtually all of the 2.5% (10.1% annualized) increase from the second quarter was related to stock-based incentive pay, which rose in conjunction with 28% common stock price appreciation. The principal causes of the 7.7% increase in operating expense from 1996's third quarter were stock-based incentive pay and pension expense, which together accounted for 53% of the increase. Average loans of $6.6 billion grew 17% from last year's third quarter and 4% (16% annualized) from the prior quarter. The average loan growth from the second quarter was strongest in commercial real estate and commercial loans. Average deposits of $7.5 billion were unchanged from the second quarter and 10% higher than last year's third quarter. The growth from 1996's third quarter was principally related to brokered time deposits and public funds See Fund, 3. See also: Public . First Commerce Corporation is a New Orleans-based bank holding company operating six Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. banks in Alexandria Alexandria, city, EgyptAlexandria, Arabic Al Iskandariyah, city (1996 pop. 3,328,196), N Egypt, on the Mediterranean Sea. It is at the western extremity of the Nile River delta, situated on a narrow isthmus between the sea and Lake Mareotis (Maryut). , Baton Rouge Baton Rouge (băt`ən r zh) [Fr.,=red stick], city (1990 pop. 219,531), state capital and seat of East Baton Rouge parish, SE La. ,
Lafayette Lafayette (lä'fēĕt`, lăf'ēĕt`).1 City (1990 pop. 23,501), Contra Costa co., NW Calif., a residential suburb in the San Francisco–Oakland area; settled 1848, inc. 1968. , Lake Charles Lake Charles, city (1990 pop. 70,580), seat of Calcasieu parish, SW La.; inc. 1867. It is located on Lake Charles at the mouth of the Calcasieu River in a rice, timber, oil, and natural gas region. , Monroe Monroe. 1 Industrial city (1990 pop. 54,909), seat of Ouachita parish, SE La., on the Ouachita River; founded c.1785, inc. as a city 1900. The center of the great Monroe Natural Gas Field (discovered 1915), it has important chemical plants, as well as , and New Orleans New Orleans (ôr`lēənz –lənz, ôrlēnz`), city (2006 pop. 187,525), coextensive with Orleans parish, SE La., between the Mississippi River and Lake Pontchartrain, 107 mi (172 km) by water from the river mouth; founded . -0-
FIRST COMMERCE CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
Third Third Nine Months Ended
Quarter Quarter September 30
(dollars in thousands,
except per share data) 1997 1996 1997 1996
INCOME DATA
Net interest income $ 95,138 $ 93,617 $ 287,407 $ 273,510
Net interest income (tax
equivalent) $ 96,910 $ 95,051 $ 292,794 $ 277,724
Provision for loan
losses $ 15,806 $ 12,525 $ 43,806 $ 23,815
Other income (exclusive
of investment
securities
transactions) $ 51,875 $ 42,378 $ 144,244 $ 125,679
Investment securities
transactions $ 182 $ (170) $ 985 $ 953
Operating expense $ 84,333 $ 83,614 $ 249,344 $ 241,544
Operating income $ 31,580 $ 26,642 $ 92,937 $ 89,112
Net income $ 31,698 $ 26,531 $ 93,577 $ 89,731
AVERAGE BALANCE SHEET
DATA
Loans - reported $6,396,330 $5,612,251 $6,311,130 $5,354,500
Loans - managed(a) $6,575,678 $5,612,251 $6,371,570 $5,354,500
Securities $2,073,360 $2,201,775 $2,089,435 $2,285,178
Earning assets $8,540,522 $7,857,391 $8,462,284 $7,711,752
Total assets $9,244,475 $8,526,062 $9,145,904 $8,418,109
Deposits $7,470,495 $6,792,549 $7,435,569 $6,866,463
Long-term debt $ 374,356 $ 85,912 $ 324,375 $ 86,305
Stockholders' equity $ 772,416 $ 709,896 $ 744,416 $ 729,569
PER COMMON SHARE DATA
Net income - fully
diluted $ .77 $ .66 $ 2.31 $ 2.17
Net income - primary $ .79 $ .68 $ 2.36 $ 2.26
Operating income - fully
diluted $ .77 $ .66 $ 2.29 $ 2.16
Operating income -
primary $ .79 $ .69 $ 2.35 $ 2.25
Book value (end of
period) $ 20.29 $ 17.96 $ 20.29 $ 17.96
Closing stock price $ 56.13 $ 34.88 $ 56.13 $ 34.88
Cash dividends $ .40 $ .35 $ 1.20 $ 1.05
RATIOS
Net income as a percent
of:
Average assets 1.36% 1.24% 1.37% 1.42%
Average total equity 16.28% 14.87% 16.81% 16.43%
Average common equity 16.28% 15.31% 16.81% 16.99%
Net interest income (tax
equivalent) as a
percent of average
earning assets 4.51% 4.82% 4.62% 4.81%
Average loans as a
percent of average
deposits 85.62% 82.62% 84.88% 77.98%
Operating expense less
other income
(excluding investment
securities
transactions)
as a percent of average
earning assets 1.51% 2.09% 1.66% 2.01%
Operating expense as a
percent of total
revenue (tax equivalent
and excluding
investment securities
transactions) 56.68% 60.84% 57.05% 59.88%
Other income (excluding
investment securities
transactions) as a
percent of total
revenue 34.87% 30.84% 33.00% 31.15%
Allowance for loan
losses as a percent of
loans, at end of period 1.33% 1.36% 1.33% 1.36%
Nonperforming assets as
a percent of loans plus
foreclosed assets,
at end of period .64% .57% .64% .57%
Stockholders' equity as
a percent of total
assets, at end of
period 8.45% 8.03% 8.45% 8.03%
Leverage ratio at end of
period 8.07% 7.90% 8.07% 7.90%
(a) Managed portfolio represents the owned loan portfolio plus the
securitized credit card receivables.
CONTACT: First Commerce Corp., New Orleans Michael Michael, archangel Michael (mī`kəl) [Heb.,=who is like God?], archangel prominent in Christian, Jewish, and Muslim traditions. In the Bible and early Jewish literature, Michael is one of the angels of God's presence. A. Flick, 504/623-1492 Holly E. Hobson, 504/623-2917 |
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