First Commercial Announces Third Quarter Earnings, Declares Increased Cash Dividend and Stock Dividend.LITTLE ROCK, Ark.--(BUSINESS WIRE)--Oct. 15, 1996--Barnett Grace, chairman and chief executive officer of First Commercial Corporation (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. ), the Arkansas-based bank holding company, announced today third quarter earnings for the company. FCC continued in the third quarter and first nine months of 1996 to achieve favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. results in terms of earnings growth, profitability, asset quality and capital strength. FCC also announced that the company will pay a 5% stock dividend and will increase the annual cash dividend on its common stock from 84 cents per share Cents per share The amount of a mutual fund's dividend or capital gains distributions that a shareholder will receive for each share owned. to 96 cents per share. The stock dividend in combination with the increased cash dividend will produce an aggregate cash dividend increase of 20% for FCC shareholders. The increased cash dividend will be payable on both shares currently outstanding and new shares issued through the stock dividend. The stock dividend will be payable on November November: see month. 15, 1996, to shareholders of record as of October October: see month. 31, 1996. The increased cash dividend will be payable on January January: see month. 2, 1997, to shareholders of record as of December December: see month. 16, 1996. The cash dividend increase and stock dividend, when combined with prior cash dividend increases and stock dividends, has generated a five year compound annual growth rate in cash dividends for FCC shareholders of over 19%. The stock dividend and increased cash dividend were unanimously approved by FCC's Board of Directors during the annual review of dividend related matters. This action reflects the Board's continued confidence in the earnings stream of FCC, and serves to further reward FCC shareholders with a strong cash dividend. "This represents the 10th consecutive year that FCC shareholders have received an increased dividend," noted Grace. "We are pleased to reward our shareholders as our organization continues to expand into new markets and increase penetration within existing markets. Our talented bankers are fortunate to have the support of our shareholders, without whom our success would not be possible." With regard to third quarter earnings, FCC announced that the company's return on average assets of 1.31% for the third quarter of 1996 compares with 1.29% for the same quarter of 1995, and 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. of 14.97% compares with 15.49% in the prior year's third quarter. The decrease in return on common equity was due primarily to increased capital levels from the 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., acquisition in the fourth quarter of 1995. FCC recorded a return on average assets of 1.28% and return on average common shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of 14.82% for the first nine months of 1996. These results compare with a 1.22% return on assets Return on assets (ROA) Indicator of profitability. Determined by dividing net income for the past 12 months by total average assets. Result is shown as a percentage. ROA can be decomposed into return on sales (net income/sales) multiplied by asset utilization (sales/assets). and a 14.83% return on common equity reported for the first nine months of 1995. Excluding non-recurring expenses related to litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. and data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a conversions, returns on average assets and common stockholders' equity for the first nine months of 1996 were 1.33% and 15.46%, respectively. For the nine months ended September September: see month. 30, 1996, FCC earned $1.82 per share compared with 1995's $1.58 per share, an increase of 15%. Earnings of $.63 per share were reported in 1996's third quarter, an increase of 11% from $.57 per share reported for the third quarter of 1995. Third quarter net income was up 16% from third quarter 1995, primarily as a result of higher net interest margins due to loan growth and repricing Repricing To change the price of an asset. In derivatives, it sometimes refers to the exchange of options of with different strike prices. repricing and a substantial increase in 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. income from acquisitions in late 1995. These income increases were mitigated mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. by a 24% increase in non-interest expenses, primarily due to the November 1995 purchase acquisition of FDH Bancshares, Inc., and increased amortization and other expenses associated with the acquired mortgage servicing. Total assets at September 30, 1996, were $5.3 billion, an increase of 13% 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 13% to $3.3 billion and total deposits increased 14% to $4.6 billion. Total stockholders' equity was $457 million on September 30, 1996, up 19% from a year earlier. Excluding the FDH Bancshares, Inc., acquisition, increases in loans and leases, deposits and stockholders' equity were 8%, 9% and 9%, respectively. FCC continues to maintain strong capital ratios while earning competitive returns for its shareholders. FCC's tier I leverage ratio was 7.96%, 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 minimum of 3%. 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 11.53% and total risk-based capital ratio was 12.32%. Prescribed regulatory minimums for these ratios are 4% and 8%, respectively. Although non-performing assets have increased from the unsustainably low levels reported in 1995, FCC's asset quality remains strong. On September 30, 1996, the allowance for possible loan and lease losses equaled 1.60% 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 .69% of total loans and leases, compared to .45% a year earlier. The allowance for possible loan and lease losses equaled 232.25% of non-performing loans at period-end as compared with 354.37% on September 30, 1995. The allowance for loan and lease losses and other real estate losses to non-performing assets was 275.62% on September 30, 1996, and 374.73% a year earlier. In commenting on third quarter earnings and recent events, Grace stated, "We were pleased to announce on October 4 that we had entered into a definitive agreement for the acquisition of W.B.T. Holding Company of Memphis 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. , United American American, river, 30 mi (48 km) long, rising in N central Calif. in the Sierra Nevada and flowing SW into the Sacramento River at Sacramento. The discovery of gold at Sutter's Mill (see Sutter, John Augustus) along the river in 1848 led to the California gold rush of Bank. With assets of approximately $267 million and six locations, United American Bank substantially enhances our Memphis franchise. Since entering that market in 1990, our Memphis affiliate, First Commercial Bank, has been hindered by its size and limited delivery network. This expansion will give us an opportunity to improve our distribution system by offering more locations to complement our broad line of products and exceptional level of service. We are particularly enthusiastic about the commercial line of business that United American Bank is bringing to the relationship. Once the merger is completed, First Commercial Bank of Memphis will be in a unique position to offer the Memphis market community bank values combined with an improved branch and ATM network. "We also announced during the third quarter that First Commercial Investments, Inc., had acquired Ahart & Bryan Bryan, city (1990 pop. 55,002), seat of Brazos co., E central Tex.; inc. 1872. Settled in the early 19th cent. in an area of large plantations, Bryan was long a cotton center. , Inc., an institutional sales firm specializing in the sale of government and municipal securities to institutional investors Institutional Investor A non-bank person or organization that trades securities in large enough share quantities or dollar amounts that they qualify for preferential treatment and lower commissions. . In addition to a seasoned institutional sales group, Ahart & Bryan brings a number of new customer relationships to First Commercial. "Congress recently passed into law a one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. 65.7 cent assessment on every $100 of thrift thrift: see leadwort. deposits in order to recapitalize re·cap·i·tal·ize tr.v. re·cap·i·tal·ized, re·cap·i·tal·iz·ing, re·cap·i·tal·iz·es To change the capital structure of (a corporation). re·cap the Savings Association Insurance Fund Savings Association Insurance Fund (SAIF) A government organization that replaced the Federal Savings and Loan Insurance Corporation as the provider of deposit insurance for thrift institutions. (SAIF). FCC had previously accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. for this expense, so there will be no impact to earnings. We view the eventual merger of the thrift fund into the Bank Insurance Fund and subsequent merging of charters as positive for the banking industry." First Commercial Corporation is a $5.4 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 50% interest in 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, 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., and Commercial Capital Funding, Inc., of Dallas. -0-
FIRST COMMERCIAL CORPORATION
Three Months Ended Nine Months Ended
September 30 September 30
Dollars in thousands 1996 1995 1996 1995
SELECTED AVERAGE BALANCES
Total assets $5,231,552 $4,570,173 $5,212,460 $4,522,357
Earning assets 4,701,468 4,129,543 4,675,972 4,085,105
Loans, net of
unearned income 3,222,216 2,824,878 3,207,175 2,732,902
Deposits 4,559,226 3,966,700 4,540,971 3,925,325
Interest bearing
liabilities 3,828,672 3,357,231 3,813,653 330,931
Common stockholders'
equity 456,215 379,844 449,331 371,771
FAS 115 equity
adjustment (2,006) (384) (1,396) (2,300)
SELECTED PERIOD END DATA
Investment securities,
market value $1,339,396 $1,208,455
Book value per share 16.80 14.69
Non-accrual loans 15,073 9,248
Loans past due 90
days + 6,566 3,659
Restructured loans 813 194
Gross charge-offs 2,258 1,665 6,959 4,182
Recoveries 1,079 823 2,891 2,506
PERFORMANCE RATIOS
Return on assets 1.31% 1.29% 1.28% 1.22%
Return on equity 14.97 15.49 14.82 14.83
Net interest margin 4.69 4.57 4.66 4.47
Net interest spread 3.93 3.79 3.90 3.73
Efficiency ratio 55.83 59.92 55.86 61.29
MISCELLANEOUS
Net interest income
(TE) $55,535 $47,573 $162,981 $136,709
Intangible assets
- Debt issue costs 54 73
- Goodwill 38,612 20,924
- Core deposit
intangibles 1,703 2,089
- Other intangibles 128 217
Purchased mortgage
servicing rights 49,606 58,417
Total trust assets (in millions)
- Discretionary 2,413 2,266
- Non-discretionary 4,530 3,880
- Bond issues 2,363 2,103
Mortgage servicing
portfolio (in millions) 7,547 7,527
Tier I capital 441,277 377,818
Tier I risk-based
capital ratio 11.53% 11.56%
Total risk-based
capital ratio 12.32% 12.33%
Common stock closing
price (NASDAQ) $34.50 $26.29
Note: The FAS 115 equity adjustment is not used in ratio
calculations.
The efficiency ratio excludes the effect of amortization
of intangible assets and non-recurring income and
expenses.
FIRST COMMERCIAL CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
Dollars in thousands 1996 1995 1996 1995
Interest Income
Loans and leases,
including fees $72,770 $63,476 $215,587 $178,139
Short-term investments 1,763 995 4,788 3,177
Investment securities
- taxable 17,228 15,541 51,576 47,115
- non-taxable 2,114 1,827 6,150 5,588
Trading account
securities 10 5 11 5
TOTAL INTEREST INCOME 93,885 81,844 278,112 234,024
Interest Expense
Interest on deposits 37,129 32,320 110,996 91,492
Short-term borrowings 2,041 2,579 6,463 7,750
Long-term debt 96 210 316 624
TOTAL INTEREST
EXPENSE 39,266 35,109 117,775 99,866
Net Interest Income 54,619 46,735 160,337 134,158
Provision for possible
loan & lease losses 1,746 481 4,871 1,740
Net interest income
after provision for
possible loan &
lease losses 52,873 46,254 155,466 132,418
Other Income
Trust department income 2,887 2,739 8,929 8,172
Mortgage servicing
fee income 9,827 5,092 31,627 12,590
Broker-dealer
operations income 1,029 825 2,913 2,204
Service charges on
deposit accounts 6,526 5,499 18,695 16,289
Other service charges
and fees 3,158 2,459 9,225 6,488
Other 2,052 1,407 5,735 3,857
Investment securities
gains (losses), net (72) (42) 18 (47)
OREO gains (losses), net (173) (59) (490) (164)
TOTAL OTHER INCOME 25,234 17,920 76,652 49,389
Other Expense
Salaries, wages and
employee benefits 23,591 19,821 71,224 59,114
Net occupancy 3,259 2,900 9,377 8,321
Equipment 3,331 2,703 9,581 7,866
FDIC insurance 610 2,189 1,145 6,702
Amortization of
mortgage servicing
rights 4,958 1,037 15,122 3,111
Other 15,816 12,936 48,877 34,488
TOTAL OTHER EXPENSE 51,565 41,586 155,326 119,602
Income before income
taxes 26,542 22,588 76,792 62,205
Income tax provision 9,330 7,761 26,997 20,961
NET INCOME $17,212 $14,827 $49,795 $41,244
Weighted average number
of common shares
outstanding during
the period 27,219,914 26,086,017 27,301,882 26,122,811
Earnings per common
share $0.63 $0.57 $1.82 $1.58
FIRST COMMERCIAL CORPORATION
CONSOLIDATED BALANCE SHEET
(Unaudited)
September 30,
Dollars in thousands 1996 1995
Assets
Cash and due from banks $330,079 $301,642
Investment securities held-to-maturity 334,790 842,823
Investment securities available-for-sale 1,006,278 369,911
Trading account securities 307 320
Short-term investments 85,327 78,210
Loans and Leases, net of unearned income 3,263,267 2,885,840
Allowance for possible loan and lease losses (52,144) (46,426)
Loans and lease financing, net 3,211,123 2,839,414
Bank premises and equipment, net 103,259 93,354
Other real estate owned, net of allowance
for possible losses of $77 ($63 in 1995) 2,100 2,304
Other assets 231,291 186,394
TOTAL ASSETS $5,304,554 $4,714,372
Liabilities and Stockholders' Equity
Non-interest bearing transaction accounts $926,978 $836,389
Interest bearing transaction and savings
accounts 1,591,333 1,423,382
Time deposits 2,074,814 1,757,078
Total deposits 4,593,125 4,016,849
Short-term borrowings 185,558 259,463
Other liabilities 63,029 47,468
Long-term debt 6,097 7,246
Total liabilities 4,847,809 4,331,026
Stockholders' equity
Preferred stock, $1 par value, 400,000
shares authorized, none issued -- --
Common stockholders' equity, $3 par value,
50,000,000 shares authorized, 27,389,252
and 26,174,312 shares issued, respectively 82,168 73,390
Capital surplus 195,337 109,873
Retained earnings 186,941 202,188
Unrealized net losses on available-for-sale
securities, net of income tax (1,582) (90)
Less treasury stock at cost, 200,505 and
84,530 shares, respectively (6,119) (2,015)
Total stockholders' equity 456,745 383,346
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $5,304,554 $4,714,372
CONTACT: First Commercial Corp., Little Rock Lynn Wright, 501/371-7142 |
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