First Commercial Announces First Quarter Earnings.LITTLE ROCK, Ark.--(BUSINESS WIRE)--April 16, 1996--Barnett Grace, chairman and chief executive officer of First Commercial Corporation, the Arkansas-based bank holding company, announced today that 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. experienced earnings of $0.58 per share in 1996's first quarter ended March 31, an increase of 18% from $0.49 per share reported for the first quarter of 1995. Earnings growth, profitability, asset quality and capital strength remained positive in the first quarter. FCC's net income for 1996's first quarter was $15.9 million compared to $12.7 million in 1995's first quarter, an increase of 25%. This increase was primarily due to a rise in net interest income as a result of loan growth and increasing asset yields. The Company also experienced an increase in non-interest income as a result of mortgage servicing Mortgage servicing The collection of monthly payments and penalties, record keeping, payment of insurance and taxes, and possible settlement of default , involved with a mortgage loan. acquisitions during 1995 and early 1996, higher mortgage production volumes, increased fee income, partially offset by related expenses, from the 1995 purchase of consumer credit card loan participations, and increased activity in the Company's broker-dealer Broker-Dealer A person or firm in the business of buying and selling securities operating as both a broker and dealer depending on the transaction. Notes: Technically, a broker is only an agent who executes orders on behalf of clients, whereas a dealer acts as a principal operations. During the first quarter of 1996, the Company recorded net non-recurring expenses of $1.8 million, or $0.04 per share after-tax af·ter-tax also af·ter·tax adj. Relating to or being that which remains after payment, especially of income taxes: after-tax profits. , relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc legal expenses. FCC's 1.24% return on average assets for the first quarter of 1996 compares with 1.15% during the same quarter of 1995 and the 14.59% return on average common stockholders' equity Stockholders' Equity The portion of the balance sheet that includes capital received from investors in exchange for stock (paid-in capital), donated capital, and retained earnings. This is equal to total assets minus liabilities, preferred stock and intangible assets. compares with 14.16% in the prior year's first quarter. Excluding the non-recurring items mentioned above, first quarter return on average assets was 1.32% and first quarter return on average common stockholders' equity was 15.59% in 1996. Total assets at March 31, 1996, were $5.2 billion, an increase of 16% from a year earlier, while loans and leases, net of unearned income Unearned Income Any income that comes from investments and other sources unrelated to employment services. Notes: Examples of unearned income include interest from a savings account, bond interest, tips, alimony, and dividends from stock. , increased 19% to $3.2 billion, and total deposits increased 15% to $4.5 billion. Excluding the fourth quarter 1995 acquisition of FDH FDH Friss Die Haelfte (German: Eat Half As Much) FDH Focal Dermal Hypoplasia FDH Furthest Drive Home (UK band) FDH Friedrichshafen, Germany - Friedrichshafen - Lowenthal (Airport Code) Bancshares, Inc., which was accounted for as a purchase transaction, total loans increased 11% and deposits increased 7%. Approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. $75 million of the increase in total loans relates to the increased mortgage production volume experienced by the Company's mortgage subsidiary. The remaining $225 million increase in the loan and lease portfolio reflects increased loan demand experienced throughout the Company. Total stockholders' equity was $441 million on March 31, 1996, up 22% from a year earlier. FCC's total equity position equaled 8.51% of total assets at the end of 1996's first quarter, up from 8.09% in 1995. On March 31, 1996, FCC had over $91 million in equity capital in excess of its target level of 6.75% of total assets. This excess equity capital will be utilized to help fund FCC's ongoing acquisition effort. FCC continues to maintain strong capital ratios while earning competitive returns for its shareholders. FCC's tier I leverage ratio was 7.64% compared to a prescribed pre·scribe v. pre·scribed, pre·scrib·ing, pre·scribes v.tr. 1. To set down as a rule or guide; enjoin. See Synonyms at dictate. 2. To order the use of (a medicine or other treatment). regulatory reg·u·late tr.v. reg·u·lat·ed, reg·u·lat·ing, reg·u·lates 1. To control or direct according to rule, principle, or law. 2. minimum of 3%. Our tier I risk-based capital ratio Risk-based capital ratio Bank requirement that there be a minimum ratio of estimated total capital to estimated risk-weighted asset. was 11.24%. The prescribed regulatory minimum is 4%. The total risk-based capital ratio was 12.04% compared with a prescribed regulatory minimum of 8%. On March 31, 1996, FCC's allowance for possible loan and lease losses equaled 1.62% of the loan and lease portfolio. Non-performing loans A non-performing loan is a loan that is in default or close to being in default. Many loans become non-performing after being in default for 3 months, but this can depend on the contract terms. amounted to 0.57% of total loans and leases, remaining relatively stable compared to last year's 0.53%. The allowance for possible loan and lease losses equaled 282.14% of non-performing loans at period-end as compared with 330.88% on March 31, 1995. The allowance for loan and lease losses and other real estate losses to non-performing assets was 352.14% on March 31, 1996, up from 349.12% a year earlier. During the quarter, First Commercial announced a definitive agreement for the purchase of Cedar Creek Cedar Creek, small tributary of the North Fork of the Shenandoah River, N of Strasburg, N Va. It was the scene of a Civil War battle (Oct. 19, 1864) in which Union general P. H. Sheridan defeated J. A. Early. Bancshares, Inc., and its wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. , Cedar Creek Bank. Headquartered in Seven Points, Texas, Cedar Creek Bank serves five cities in the Cedar Creek Lake Region of East Texas. The $100 million asset bank represents FCC's eighth affiliate Affiliate Relationship between two companies when one company owns substantial interest, but less than a majority of the voting stock of another company, or when two companies are both subsidiaries of a third company. See: Subsidiaries, parent company. bank in Texas. As previously reported, a jury in Pulaski County Pulaski County is the name of several counties in the United States:
When a person begins a civil lawsuit, the person enters into a process called litigation. is uncertain, management believes, based upon the opinion of its legal counsel, that any judgment entered on the verdict that is not in favor of upon the side of; favorable to; for the advantage of. See also: favor First Commercial Bank, N.A., will be reversed and dismissed dis·miss tr.v. dis·missed, dis·miss·ing, dis·miss·es 1. To end the employment or service of; discharge. 2. in whole or in part or a new trial ordered in whole or in part. Regardless of the outcome, the impact of the verdict on the strength of FCC and its future prospects is not material. In commenting on these results, Mr. Grace stated, "While First Commercial Corporation's affiliate banks continue to focus their efforts on improving levels of service, selling efficiency and relationship management, the impact of new technologies and alternative delivery options are being reviewed and considered from a strategic perspective at the holding company level. We believe that alternative delivery and associated technologies require thorough strategic consideration and research. Our goal is to find the appropriate delivery channels for our company and our customers without getting caught up in the race to be first, an approach that has served us well in the past. We have thoroughly reviewed the options available to us and will announce sometime in the middle of this year our intentions with regard to the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the , home banking and other delivery channels. Our announcement will be listed, along with other corporate news releases, on First Commercial Bank's Internet page at firstcommercial.com. "Service improvement was a key objective among our affiliate banks in 1995. Each bank was encouraged to develop new techniques for improving service levels, and results from our annual customer research indicate that their efforts were successful. Of the eighteen FCC banks whose retail customers were surveyed in the first quarter of 1996 and the first quarter of 1995, nearly three-fourths Noun 1. three-fourths - three of four equal parts; "three-fourths of a pound" three-quarters common fraction, simple fraction - the quotient of two integers showed improvement in service levels. Overall, among twenty-three FCC banks involved in the survey, mean scores were up in twenty-four of the twenty-six attributes measured, with two showing no change. These results affirm the good work being done in each of our markets and provide some insight as to why FCC affiliates are usually the dominant players in their markets. "This is sure to be an exciting year for FCC's management team and bankers, who remain dedicated to improving on past success. We intend to continue our focus on the importance of people, relationships and personal selling as we expand our delivery channels." First Commercial Corporation is a $5.2 billion bank holding company with twenty-four affiliate banks in Arkansas Arkansas, river, United States Arkansas (ärkăn`zəs, är`kənsô'), river, c.1,450 mi (2,330 km) long, rising in the Rocky Mts., central Colo. , Texas, Tennessee Tennessee, state, United States Tennessee (tĕn`əsē', tĕn'əsē`), state in the south-central United States. and Louisiana Louisiana (ləwē'zēăn`ə, l  ē'–), state in the S central United States. It is bounded by Mississippi, with the Mississippi R. and owns fifty percent of a twenty-fifth bank in Oklahoma Oklahoma (ōkləhō`mə), state in SW United States. It is bordered by Missouri and Arkansas (E); Texas, partially across the Red R. (S, W); New Mexico, across the narrow edge of the Oklahoma Panhandle (W); and Colorado and Kansas (N). .
FCC's non-bank subsidiaries Non-bank subsidiaries, are firms owned by bank holding companies which offer non-bank products and services, such as insurance and investment advice, and do not offer FDIC insured banking products, such as checking and savings accounts. include First Commercial Mortgage
Company, First Commercial Trust Company, N.A., First Commercial
Investments, Inc., First Commercial Capital Management, Commercial
Capital Funding, Inc. and Financial Fleet Services Fleet is a motorway service station on the M3 near Basingstoke. It is owned by Welcome Break. It was originally built in a Scandinavian style and in 1992 won "Loo of the Year". , Inc. -0-
FIRST COMMERCIAL CORPORATION
Three Months Ended
March 31,
Dollars in thousands 1996 1995
SELECTED AVERAGE BALANCES
Total assets $5,202,018 $4,482,374
Earning assets 4,648,429 4,037,922
Loans, net of unearned income 3,195,456 2,644,521
Deposits 4,510,956 3,890,076
Interest bearing liabilities 3,811,972 3,306,039
Common stockholders' equity 441,886 363,507
FAS 115 equity adjustment 1,058 (5,816)
SELECTED PERIOD END DATA
Investment securities, market value $1,354,071 $1,265,492
Book value per share 16.11 13.87
Non-accrual loans 11,267 9,714
Loans past due 90 days + 6,840 3,999
Restructured loans 223 415
Gross charge-offs 2,269 1,309
Recoveries 1,072 869
PERFORMANCE RATIOS
Return on assets 1.24% 1.15%
Return on equity 14.59 14.16
Net interest margin 4.61 4.38
Net interest spread 3.84 3.69
Efficiency ratio 56.95 63.14
MISCELLANEOUS
Net interest income (TE) $52,805 $43,569
Intangible assets
- Debt issue costs 64 82
- Goodwill 40,069 21,749
- Core deposit intangibles 1,892 2,291
- Other intangibles 171 48
Purchased mortgage servicing rights 58,329 8,218
Total trust assets (in millions)
- Discretionary 2,397 2,262
- Non-discretionary 4,289 3,483
- Bond issues 2,237 1,748
Mortgage servicing portfolio (in millions) 8,033 2,722
Tier I capital 393,906 341,418
Tier I capital to risk-adjusted assets 11.24% 12.09%
Total capital to risk-adjusted assets 12.04% 12.87%
Common stock closing price (NASDAQ) $31.25 $22.79
Note: The FAS 115 equity adjustment is not used in ratio
calculations.
FIRST COMMERCIAL CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
Three Months Ended
March 31,
Dollars in thousands 1996 1995
Interest Income
Loans and leases, including fees $71,212 $54,870
Short-term investments 1,467 982
Investment securities - taxable 16,888 15,659
- non-taxable 2,012 1,995
Trading account securities (8) 2
TOTAL INTEREST INCOME 91,571 73,508
Interest Expense
Interest on deposits 37,039 28,064
Short-term borrowings 2,464 2,619
Long-term debt 121 192
TOTAL INTEREST EXPENSE 39,624 30,875
Net Interest Income 51,947 42,633
Provision for possible loan & lease losses 1,572 825
Net interest income after provision
for possible loan & lease losses 50,375 41,808
Other Income
Trust department income 3,068 2,811
Mortgage servicing fee income 11,001 3,680
Broker-dealer operations income 905 651
Service charges on deposit accounts 5,922 5,325
Other service charges and fees 2,919 2,080
Other 1,715 1,290
Investment securities gains (losses), net 65 (27)
OREO gains (losses), net 13 (233)
TOTAL OTHER INCOME 25,608 15,577
Other Expense
Salaries, wages and employee benefits 23,770 19,508
Net occupancy 2,972 2,732
Equipment 3,055 2,563
FDIC insurance 326 2,250
Amort. of purchased mort. servicing. rights 5,064 988
Other 16,289 10,456
TOTAL OTHER EXPENSE 51,476 38,497
Income before income taxes 24,507 18,888
Income tax provision 8,606 6,196
NET INCOME $15,901 $12,692
Weighted average number of common shares outstanding during the period 27,351,106 26,138,470 Earnings per common share $0.58 $0.49
FIRST COMMERCIAL CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited)
March 31,
Dollars in thousands 1996 1995
Assets
Cash and due from banks $259,074 $238,355
Investment securities held-to-maturity 346,305 886,077
Investment securities available-for-sale 1,011,396 399,331
Trading account securities 615 210
Short-term investments 98,661 104,027
Loans and Leases, net of unearned income 3,189,954 2,680,474
Allowance for possible loan and lease
losses (51,716) (46,747)
Loans and lease financing, net 3,138,238 2,633,727
Bank premises and equipment, net 104,385 91,948
Other real estate owned, net of allowance for
possible losses of $49 ($67 in 1995) 2,229 2,521
Other assets 218,925 127,729
TOTAL ASSETS $5,179,828 $4,483,925
Liabilities and Stockholders' Equity
Non-interest bearing transaction accounts $871,029 $746,834
Interest bearing transaction and savings
accounts 1,583,265 1,517,260
Time deposits 2,042,352 1,636,130
Total deposits 4,496,646 3,900,224
Short-term borrowings 170,610 172,493
Other liabilities 64,666 40,166
Long-term debt 7,170 8,318
Total liabilities 4,739,092 4,121,201
Stockholders' equity
Preferred stock, $1 par value, 400,000 shares
authorized, none issued
Common stockholders' equity, 34,000,000 shares
authorized, $3 par value, 27,356,227 and
26,149,351 shares issued, respectively 82,069 73,320
Capital surplus 195,176 109,688
Retained earnings 164,506 183,402
Unrealized net losses on available-for-sale
securities, net of income tax (1,015) (3,686)
Less treasury stock at cost, 0 shares -- --
Total common stockholders' equity 440,736 362,724
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $5,179,828 $4,483,925
CONTACT: First Commercial Corporation, Little Rock Lynn Lynn, city (1990 pop. 81,245), Essex co., E Mass.; inc. as a town 1631, as a city 1850. Lynn is an old industrial center. The first ironworks (1643) and the first fire engine (1654) in the country were built there. Wright, Chief Financial Officer, 501/371-7142 |
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