SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 15, 1997
MARK TWAIN BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
MISSOURI
(State or other jurisdiction of incorporation)
0-4543
----------------------
Commission file Number
43-0895344
----------------------------------
IRS Employer Identification Number
8820 Ladue Road, St. Louis, Missouri 63124
----------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(314) 727-1000
----------------------------------------------------
(Registrant's telephone number, including area code)
<PAGE>
ITEM 5. OTHER EVENTS
- --------------------
The earning release dated January 15, 1997 announcing earnings for
the fourth quarter and year ending December 31, 1996 is contained
in Exhibit 99 and is incorporated by reference herein.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
MARK TWAIN BANCSHARES, INC.
(Registrant)
Date: January 15, 1997 /s/ KEVIN J. CODY
-------------------------------
Kevin J. Cody
Vice President, Treasurer/
Assistant Secretary
(Principal Accounting Officer)
EXHIBIT INDEX
99. Earnings release for the fourth quarter and year
ending December 31, 1996.
EXHIBIT 99
CONTACT: Keith Miller
(314) 889-0799
FOR IMMEDIATE RELEASE
MARK TWAIN'S EARNINGS INCREASE 11.6% TO $53.3 MILLION,
FOURTH QUARTER AND YEARLY RESULTS SET NEW RECORDS
St. Louis, Mo., January 15, 1997 . . . Mark Twain Bancshares, Inc. today
announced an 11.6 % increase in earnings for 1996 over 1995. Net income for the
year totaled $53.3 million, and is a record high for the 33-year-old company.
This was Mark Twain's sixth consecutive year of record earnings. Fourth quarter
income was $14.3 million, achieving the 23rd consecutive quarter of record
earnings and a 14.4% increase from the prior year.
Primary earnings per share for the year grew 10.2% to $3.23, up from $2.93 for
1995. Fully diluted earnings per share for the year rose 11.6% to $3.18.
Return on average assets was 1.79% in 1996, compared to 1.72% in 1995. Return
on realized shareholders' equity was 18.66% for the year, up from 18.41% last
year.
"It's been another record-breaking year for Mark Twain. Our 1996 results are
outstanding," says John P. Dubinsky, president and chief executive officer of
Mark Twain Bancshares, Inc. "For six years in a row, Mark Twain has achieved
record results and set new standards of excellence."
The company's fourth quarter results also broke records. Income for the quarter
totaled $14.3 million, compared to $12.5 million for fourth quarter 1995.
Primary earnings per share grew 11.8% for the fourth quarter to total $.85, as
compared to $.76 for the fourth quarter of 1995. Fully diluted earnings per
share totaled $.84 for the quarter, an increase of 13.5% over $.74 for the
fourth quarter of 1995.
Return on average assets for the quarter was 1.86%, compared to 1.75% for the
fourth quarter of 1995. Return on realized shareholders' equity for the quarter
was 18.90%, compared to 18.31% for the same period in 1995.
As a result of these higher performance levels, the board of directors of Mark
Twain Bancshares, Inc. announced on January 7, 1997, a 12.9% increase in its
common stock cash dividend to a new annual rate of $1.40, effective with the
first quarter payment.
Dubinsky attributes Mark Twain's results to the company's continuing successful
implementation of key principles, which include maintaining high quality assets,
minimizing increases in overhead expenses, maximizing opportunities for
profitable growth, and aggressively soliciting new profitable business. He also
indicated that in 1996, Mark Twain again experienced very low loan losses and
a record level of efficiency and productivity.
-more-
Net interest income, on a fully tax equivalent basis, was $128.91 million for
1996, compared to $129.43 for 1995. Net interest margin for the year was 4.63%,
compared to 5.03% for 1995. Net interest margin for fourth quarter 1996 was
4.67%, compared to 4.85% for fourth quarter 1995.
In 1996, Mark Twain continued its focus on improving productivity, and ended the
year with a record-level efficiency ratio of 48.56%. Total overhead expenses
actually declined 5.4% compared to 1995. The efficiency ratio was 48.28% for
fourth quarter 1996, as compared to 53.05% for fourth quarter 1995.
Loan demand and loan outstandings continued to rise steadily. Loan outstandings
at year-end were $2.18 billion, an increase of 10.4% from year-end 1995.
Average loans for 1996 totaled $2.03 billion, an increase of 6.0% over the prior
year.
On December 27, 1996, Mark Twain acquired First City Bancshares, Incorporated,
of Springfield, Missouri, owner of First City National Bank. First City
National Bank operates three locations in Springfield and has total assets of
$89.7 million, total loans of $53.9 million and total deposits of $76.5 million.
The transaction was accounted for under the purchase method of accounting.
Accordingly, results of operations of First City National Bank are included in
the consolidated financial statements from the acquisition date.
Mark Twain's asset quality remained strong for the year, with non-performing
assets representing a low .58% of total loans plus foreclosed property, compared
to 1.00% at year-end 1995 and .95% at year-end 1994. The loan loss reserve at
year-end 1996 represents 1.55% of total loans, the same level at year-end 1995.
Net charge-offs for the year were .06% of average loans, down from .18% for
1995.
Total assets for the year averaged $2.97 billion, compared to $2.77 billion in
1995, an increase of 7.4%. Mark Twain's total assets, including newly acquired
First City Bancshares, Incorporated, totaled $3.1 billion, an increase of 5.6%
from 1995. Year-to-date average deposits were $2.38 billion, compared to $2.28
billion in 1995, an increase of 4.3%.
Combined revenues from the fee divisions increased 10.7% for 1996, compared to
last year. The Capital Markets Group, which includes bond and brokerage
operations, experienced increases in fee income of 9.7% for the year and 6.7%
for the fourth quarter, compared to the same periods last year. The Trust
Division showed increases in revenue of 13.2% for the year and 26.9% for the
fourth quarter, compared to the same periods last year.
Mark Twain has entered into a definitive agreement to merge with St. Louis-based
Mercantile Bancorporation Inc. (MTL). The merger is expected to be consummated
in the second quarter of 1997.
Mark Twain Bancshares, Inc. is a 33-year-old bank holding company with 42
banking locations in three states: 20 throughout St. Louis, St. Louis County,
and St. Charles County, as well as 15 in the Kansas City metropolitan area, four
in the Illinois communities of Belleville and Edwardsville, and three in
Springfield, Missouri. Related financial services include: Mark Twain Capital
Markets Group; Mark Twain Brokerage Services, Inc.; Mark Twain Commercial
Finance Division; Mark Twain International Division; Mark Twain Leasing
Division; and Mark Twain Trust Division. Mark Twain stock is traded on the New
York Stock Exchange under the symbol MTB. Mark Twain Banks' World Wide Web
address is at http://www.marktwain.com.
###
<PAGE> 3
MARK TWAIN BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
December 31,
---------------------------
(in thousands of dollars) 1996 1995
- --------------------------------------------------------------------------------------------------- ------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 150,926 $ 156,207
Interest bearing deposits with banks 4,387 -
Federal funds sold and securities
purchased under resale agreements 23,500 7,900
Held to maturity securities 218,479 244,094
Available for sale securities 458,164 445,808
Trading securities 30,772 63,579
Loans, net of allowance for loan losses of
$33,745 and $30,508, respectively 2,144,170 1,941,431
Premises and equipment 24,977 20,764
Accrued income receivable 18,701 17,830
Other assets 59,189 70,618
- ------------------------------------------------------------------------------------------------- ----------
Total assets $3,133,265 $2,968,231
- --------------------------------------------------------------------------------------=========== ==========
LIABILITIES
Non-interest bearing deposits $ 498,431 $ 519,155
Interest bearing deposits 2,096,481 1,938,237
- ------------------------------------------------------------------------------------------------- ----------
Total deposits 2,594,912 2,457,392
- ------------------------------------------------------------------------------------------------- ----------
Short-term borrowings 193,591 165,731
Other liabilities 31,102 50,712
Long-term debt 2,036 18,490
- ------------------------------------------------------------------------------------------------- ----------
Total liabilities 2,821,641 2,692,325
- ------------------------------------------------------------------------------------------------- ----------
SHAREHOLDERS' EQUITY
Common stock, $1.25 par value, authorized
30,000,000 shares, issued 17,114,839,
and 16,508,220 shares respectively 21,394 20,635
Surplus 75,492 63,630
Undivided profits 229,149 194,888
Net unrealized gains (losses) on available
for sale securities (1,774) 1,026
- ------------------------------------------------------------------------------------------------- ----------
324,261 280,179
Less common treasury stock at cost, 432,333
and 362,685 shares, respectively 12,637 4,273
- ------------------------------------------------------------------------------------------------- ----------
Total shareholders' equity 311,624 275,906
- ------------------------------------------------------------------------------------------------- ----------
Total liabilities and shareholder's equity $3,133,265 $2,968,231
- --------------------------------------------------------------------------------------=========== ==========
</TABLE>
<PAGE> 4
MARK TWAIN BANCSHARES, INC.
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
For the Twelve Months For the Three Months
Ended December 31, Ended December 31,
(in thousands of dollars except per share data) 1996 1995 1996 1995
- ------------------------------------------------------------------------------------------------ ---------------------
<S> <C> <C> <C> <C>
INTEREST FROM EARNING ASSETS
Interest and fees on loans $182,201 $180,955 $47,299 $45,478
Interest on held to maturity securities:
Taxable 15,080 22,207 3,537 4,972
Non-taxable 132 173 31 31
Interest on available for sale securities 28,070 15,884 7,167 4,745
Interest on trading securities 3,425 3,003 1,024 890
Interest on deposits with banks 33 - 33 -
Interest on federal funds sold and securities
purchased under resale agreements 700 951 341 388
- ------------------------------------------------------------------------------------------------ --------------------
Total interest income 229,641 223,173 59,432 56,504
- ------------------------------------------------------------------------------------------------ --------------------
INTEREST EXPENSE
Interest on deposits 89,202 85,006 23,190 22,810
Interest on short-term borrowings 12,370 8,414 2,888 1,476
Interest on long-term debt 348 1,512 39 347
- ------------------------------------------------------------------------------------------------ --------------------
Total interest expense 101,920 94,932 26,117 24,633
- ------------------------------------------------------------------------------------------------ --------------------
Net interest income 127,721 128,241 33,315 31,871
Provision for loan losses 2,002 5,003 1 1,659
- ------------------------------------------------------------------------------------------------ --------------------
Net interest income after provision for loan losses 125,719 123,238 33,314 30,212
- ------------------------------------------------------------------------------------------------ --------------------
OTHER INCOME
Service charges on deposit accounts 8,256 7,051 2,195 1,831
Securities transactions 234 296 - 250
Other income 31,317 29,439 8,412 7,316
- ------------------------------------------------------------------------------------------------ --------------------
Total other income 39,807 36,786 10,607 9,397
- ------------------------------------------------------------------------------------------------ --------------------
OTHER EXPENSES
Salaries 42,977 41,011 11,285 9,913
Employee benefits 6,729 6,520 1,453 1,318
Net occupancy expense 8,948 9,339 2,232 2,299
Furniture and equipment expense 3,544 3,883 963 989
Other expenses 19,614 25,769 5,441 7,383
- ------------------------------------------------------------------------------------------------ --------------------
Total other expenses 81,812 86,522 21,374 21,902
- ------------------------------------------------------------------------------------------------ --------------------
Income before income taxes 83,714 73,502 22,547 17,707
Applicable income taxes 30,446 25,789 8,249 5,210
- ------------------------------------------------------------------------------------------------ --------------------
Net income $ 53,268 $ 47,713 $14,298 $12,497
- ---------------------------------------------------------------------------===================== ====================
NET INCOME PER SHARE
- ------------------------------------------------------------------------------------------------ --------------------
Primary $3.23 $2.93 $0.85 $0.76
- ---------------------------------------------------------------------------===================== ====================
Fully diluted $3.18 $2.85 $0.84 $0.74
- ---------------------------------------------------------------------------===================== ====================
COMMON DIVIDENDS PAID PER SHARE $1.24 $1.08 $0.31 $0.27
- ---------------------------------------------------------------------------===================== ====================
</TABLE>
<PAGE> 5
MARK TWAIN BANCSHARES, INC.
CONSOLIDATED BALANCE SHEET AND NET INTEREST MARGIN
<TABLE>
<CAPTION>
Year Ended December 31, 1996 Year Ended December 31, 1995
------------------------------------- -------------------------------------
Average Yield/ Average Yield/
(in thousands of dollars) Balance Interest Rate Balance Interest Rate
- ----------------------------------------------------------------------------- -------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest earning assets:
Loans <F1><F2> $2,031,127 $183,261 9.02% $1,916,374 $181,975 9.50%
Taxable held to maturity securities 233,145 15,080 6.47% 331,174 22,207 6.71%
Non-taxable held to maturity securities<F1> 2,528 203 8.03% 3,161 266 8.42%
Available for sale securities<F1> 451,222 28,128 6.23% 257,669 15,959 6.19%
Trading securities 53,099 3,425 6.45% 47,559 3,003 6.31%
Interest bearing deposits with banks 988 33 3.34% - - -
Federal funds sold and securities
purchased under resale agreements 12,113 700 5.78% 15,808 951 6.02%
- ------------------------------------------------------------------------------ ----------------------------------
Total interest earning assets 2,784,222 230,830 8.29% 2,571,745 224,361 8.72%
- ------------------------------------------------------------------------------ ----------------------------------
Cash and due from banks 107,362 107,551
Other assets 115,230 122,970
FASB No. 115 allowance (4,284) (5,938)
Allowance for loan losses (31,305) (29,694)
- ------------------------------------------------------ ----------
Total $2,971,225 $2,766,634
- --------------------------------------------========== ==========
LIABILITIES AND SHAREHOLDER'S EQUITY
Interest bearing demand deposits $ 225,781 4,470 1.98% $ 225,609 4,833 2.14%
Savings and money market deposits 692,856 25,282 3.65% 678,466 25,950 3.82%
Time deposits 1,052,659 59,450 5.65% 977,600 54,223 5.55%
Short-term borrowings 249,610 12,370 4.96% 155,939 8,414 5.40%
Long-term debt 5,175 348 6.72% 19,666 1,512 7.69%
- ------------------------------------------------------------------------------ ----------------------------------
Total interest bearing liabilities 2,226,081 101,920 4.58% 2,057,280 94,932 4.61%
- ------------------------------------------------------------------------------ ----------------------------------
Non-interest bearing deposits 410,237 401,096
Other liabilities 52,130 52,825
Shareholders' equity 282,777 255,433
- ------------------------------------------------------ ----------
Total $2,971,225 $2,766,634
- --------------------------------------------========== ==========
Net interest income $128,910 $129,429
- -----------------------------------------------------------======== ========
Net interest margin 4.63% 5.03%
- -------------------------------------------------------------------------===== =====
<FN>
<F1>Adjusted to a fully taxable basis using federal statutory rate of 35% in 1996 and 1995.
<F2>Includes non-accrual loans.
</FN>
</TABLE>
<PAGE> 6
MARK TWAIN BANCSHARES, INC.
CONSOLIDATED BALANCE SHEET AND NET INTEREST MARGIN
<TABLE>
<CAPTION>
Three Months Ended December 31, 1996 Three Months Ended December 31, 1995
------------------------------------- -------------------------------------
Average Yield/ Average Yield/
(in thousands of dollars) Balance Interest Rate Balance Interest Rate
- ----------------------------------------------------------------------------- -------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Interest earning assets:
Loans <F1><F2> $2,100,623 $47,614 9.02% $1,938,724 $45,716 9.36%
Taxable held to maturity securities 218,942 3,537 6.43% 298,040 4,972 6.62%
Non-taxable held to maturity securities<F1> 2,369 48 8.06% 2,302 48 8.27%
Available for sale securities<F1> 457,258 7,180 6.25% 305,003 4,761 6.19%
Trading securities 61,102 1,024 6.67% 59,716 890 5.91%
Interest bearing deposits with banks 3,932 33 3.34% - - -
Federal funds sold and securities
purchased under resale agreements 25,180 341 5.39% 25,607 388 6.01%
- ------------------------------------------------------------------------------ ----------------------------------
Total interest earning assets 2,869,406 59,777 8.29% 2,629,392 56,775 8.57%
- ------------------------------------------------------------------------------ ----------------------------------
Cash and due from banks 101,309 107,952
Other assets 128,608 124,388
FASB No. 115 allowance (3,834) (1,354)
Allowance for loan losses (32,114) (30,095)
- ------------------------------------------------------ ----------
Total $3,063,375 $2,830,283
- --------------------------------------------========== ==========
LIABILITIES AND SHAREHOLDER'S EQUITY
Interest bearing demand deposits $ 224,932 1,120 1.98% $ 221,332 1,202 2.15%
Savings and money market deposits 712,140 6,567 3.67% 680,167 6,549 3.82%
Time deposits 1,094,165 15,503 5.64% 1,040,024 15,059 5.74%
Short-term borrowings 240,377 2,888 4.78% 118,939 1,476 4.92%
Long-term debt 2,324 39 6.68% 18,717 347 7.36%
- ------------------------------------------------------------------------------ ----------------------------------
Total interest bearing liabilities 2,273,938 26,117 4.57% 2,079,179 24,633 4.70%
- ------------------------------------------------------------------------------ ----------------------------------
Non-interest bearing deposits 423,585 419,193
Other liabilities 67,249 61,914
Shareholders' equity 298,603 269,997
- ------------------------------------------------------ ----------
Total $3,063,375 $2,830,283
- --------------------------------------------========== ==========
Net interest income $33,660 $32,142
- ------------------------------------------------------------======= =======
Net interest margin 4.67% 4.85%
- -------------------------------------------------------------------------===== =====
<FN>
<F1>Adjusted to a fully taxable basis using federal statutory rate of 35% in 1996 and 1995.
<F2>Includes non-accrual loans.
</FN>
</TABLE>
<PAGE> 7
MARK TWAIN BANCSHARES, INC.
SUMMARY OF ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
Twelve Months Ended Three Months Ended
December 31, December 31,
--------------------------- -----------------------------
(in thousands of dollars) 1996 1995 1996 1995
- ----------------------------------------------------------------------------------- -----------------------------
<S> <C> <C> <C> <C>
Allowance at beginning of period $30,508 $28,894 $32,068 $30,048
Allowance of acquired banks 2,424 - 1,838 -
Charge-offs (2,420) (4,342) (439) (1,385)
Recoveries 1,231 953 277 186
- ----------------------------------------------------------------------------------- ----------------------------
Net charge-offs (1,189) (3,389) (162) (1,199)
- ----------------------------------------------------------------------------------- ----------------------------
Additions to allowance charged to expense 2,002 5,003 1 1,659
- ----------------------------------------------------------------------------------- ----------------------------
Allowance at end of period $33,745 $30,508 $33,745 $30,508
- ----------------------------------------------------=============================== ============================
Loans, net of unearned income at end of period $2,177,915 $1,971,939
Average loan balance for the period $2,031,127 $1,916,374 $2,100,623 $1,938,724
Allowance as % of loans at end of period 1.55% 1.55%
Allowance as % of non-performing loans 349.65% 213.31%
Net charge-offs as % of average loans for the period 0.06% 0.18% 0.01% 0.06%
Annualized net charge-offs as % of average loans
for the period 0.03% 0.25%
</TABLE>
<PAGE> 8
MARK TWAIN BANCSHARES, INC.
NON-PERFORMING ASSETS
<TABLE>
<CAPTION>
December 31, September 30, June 30, March 31, December 31,
(in thousands of dollars) 1996 1996 1996 1996 1995
- ------------------------------ ------------ ------------- -------- --------- ------------
<S> <C> <C> <C> <C> <C>
Non-accrual loans $ 7,086 $ 5,596 $ 6,531 $ 7,764 $13,663
Restructured loans 2,244 2,275 2,100 109 109
Foreclosed property 3,424 3,515 4,436 6,105 6,099
------- ------- ------- ------- -------
Total non-performing assets $12,754 $11,386 $13,067 $13,978 $19,871
======= ======= ======= ======= =======
Percentage of non-performing assets
to loans plus foreclosed property 0.58% 0.53% 0.65% 0.69% 1.00%
Loans contractually past due ninety
days or more $321 $685 $691 $836 $530
Percentage of non-performing assets
plus ninety days past due to loans
plus foreclosed property 0.60% 0.56% 0.68% 0.73% 1.03%
Percentage of allowance to
non-performing loans 349.65% 374.80% 334.67% 358.23% 213.31%
Percentage of allowance to total
non-performing assets 264.58% 281.64% 238.75% 223.19% 153.53%
Percentage of allowance to
risk elements<F1> 258.09% 265.66% 226.76% 210.60% 149.54%
Percentage of risk elements<F1>
to total average assets 0.44% 0.41% 0.47% 0.50% 0.74%
<FN>
<F1> Risk elements include total non-performing assets plus loans contractually past due ninety days or more.
</FN>
</TABLE>
<PAGE> 9
MARK TWAIN BANCSHARES, INC.
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
For The Twelve Months Ended For The Three Months Ended
December 31, December 31,
(in thousands of dollars except per share data) 1996 1995 1996 1995
- ------------------------------------------------------------------------------------- ---------------------------
<S> <C> <C> <C> <C>
PRIMARY
Earnings:
Net income $53,268 $47,713 $14,298 $12,497
- ----------------------------------------------------------=========================== ===========================
Shares:
Weighted average number of common shares outstanding 16,168,262 16,056,927 16,395,748 16,114,786
Weighted average number of common share equivalents 304,928 231,912 389,469 295,030
- ------------------------------------------------------------------------------------- ---------------------------
16,473,190 16,288,839 16,785,217 16,409,816
- ----------------------------------------------------------=========================== ===========================
Primary earnings per common share $3.23 $2.93 $0.85 $0.76
- ----------------------------------------------------------=========================== ===========================
ASSUMING FULL DILUTION
Earnings:
Net income $53,268 $47,713 $14,298 $12,497
After tax interest applicable to convertible notes 120 343 25 66
After tax amortization of capital note fees 63 51 5 17
- ------------------------------------------------------------------------------------- ---------------------------
Fully diluted net income $53,451 $48,107 $14,328 $12,580
- ----------------------------------------------------------=========================== ===========================
Shares:
Weighted average number of common shares outstanding 16,168,262 16,056,927 16,395,748 16,114,786
Assuming conversion of Convertible Notes and dilutive
stock options 644,803 847,186 576,766 776,687
- ------------------------------------------------------------------------------------- ---------------------------
16,813,065 16,904,113 16,972,514 16,891,473
- ----------------------------------------------------------=========================== ===========================
Earnings per common share assuming full dilution $3.18 $2.85 $0.84 $0.74
- ----------------------------------------------------------=========================== ===========================
</TABLE>
