Filed by Brenton Banks, Inc.
Pursuant to Rule 425 under the Securities Act of 1933 and deemed
filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: Brenton Banks, Inc.
Commission File No. 000-06216
On July 19, 2000, Brenton Banks Inc., an Iowa Corporation ("Brenton"),
released the following press release:
Brenton Banks, Inc.
400 Locust, Capital Square, Suite 200
P.O. Box 961
Des Moines, Iowa 50304-0961
(515) 237-5100 Fax: (515) 237-5221
--------------------------------------------------------------------------------
[BRENTON BANK LOGO]
NEWS RELEASE
FOR RELEASE: July 19, 2000
CONTACT: Steven T. Schuler
Chief Financial Officer/Treasurer/Secretary
(515) 237-5237
BRENTON REPORTS IMPROVED SECOND
QUARTER EARNINGS
DES MOINES, IOWA -- Brenton Banks, Inc. produced earnings of $4.7
million in the second quarter of 2000, an increase of 10.8 percent, compared to
$4.2 million for the same period a year ago. For the first half of 2000, net
income was $9.3 million, compared to $8.8 million for the first six months of
1999. Improvements were achieved in net interest income, service charges on
deposit accounts, investment brokerage commissions and a reduction in operating
expenses. Offsetting these improvements was a decline in mortgage banking
revenues.
The Company's annualized return on average equity (ROE) was 13.95
percent. During the 12 months ended June 30, 2000, total assets increased 2.3
percent from $1.940 billion to $1.984 billion. Year-to-date diluted earnings per
common share were $.45, compared to $.42 for the prior year.
On July 7, 2000, Brenton Banks, Inc. and Wells Fargo & Company
announced the signing of a definitive agreement for the acquisition of Brenton
Banks, Inc. by Wells Fargo & Company, pending regulatory and Brenton shareholder
approval. The merger is expected to be completed in the second half of 2000.
"Selecting a partner that shares our strong commitment to clients,
employees, shareholders and great communities is very important to us," said
Brenton Banks, Inc. President and CEO Robert L. DeMeulenaere. "We feel our
acquisition by Wells Fargo & Company will serve the best long-term interest of
our clients, our people, our shareholders and the communities we serve. Our
belief that local managers are best qualified to make the right decisions for
the communities where they live and work is an integral part of the way Wells
Fargo does business, too. With its outstanding reputation as a company that
values clients, staff, community support, an excellent track record of providing
value for shareholders and the broadest product line in the business, we're
confident that Wells Fargo is the right choice."
<PAGE>
During the first six months of 2000, net interest income rose to $32.0
million, compared to $30.6 million for the first half of 1999, primarily due to
favorable rate variances. The yield on earning assets rose 44 basis points,
while the rate paid on interest-bearing liabilities increased 33 basis points.
While average interest-earning assets grew 1.2 percent, net interest margin
improved 11 basis points from the first half of 1999 to 3.81 percent.
Total loans grew to $1.2 billion, up 10.2 percent from one year ago.
The growth was led by a $47.2 million (11 percent) increase in average
commercial/business/agricultural loans, a $43.9 million (22 percent) increase in
average indirect consumer loans and a $43.0 million (18 percent) increase in
average direct consumer loans. Nonperforming loans declined to $7.9 million. As
a percent of total loans, nonperforming loans improved to .65 percent from .97
percent at June 30, 1999. Asset quality remains strong with reserves standing at
194.83 percent of nonperforming loans and 1.27 percent of total loans.
Annualized year-to-date net charge-offs were .19 percent of total loans, down
from .38 percent for the first half of 1999.
For the first half of 2000, noninterest income (excluding securities
gains) declined 5.8 percent to $14.9 million, compared to $15.8 million for the
same period a year ago. Growth in traditional fee income and brokerage
commissions was exceeded by a decline in mortgage banking revenues. Service
charges on deposit accounts increased $0.5 million due to a larger deposit base
and increased account analysis income from business accounts. Investment
brokerage commissions rose 10.4 percent as per-broker revenue improved over the
prior year. Rising mortgage interest rates led to a 40 percent decline in
mortgage loan origination volume, causing mortgage banking revenue to decline to
$1.6 million for the first half of 2000.
Expense management continues to be an area of focus in 2000. Total
noninterest expenses declined 1.0 percent compared to the first half of 1999 and
totaled $32.1 million, compared to $32.4 million for the first six months of
1999. Compensation expense declined 5.5 percent due to a lower number of
employees and lower variable compensation costs related to lower mortgage loan
origination volume. Employee benefits declined $0.3 million, or 9.8 percent, as
a result of reduced compensation expense. Occupancy expense increased $0.4
million, partially due to the accelerated expensing of certain leasehold
improvements. Furniture and equipment expense increased $0.6 million, or 26.4
percent, due to higher depreciation on technology upgrades and increased costs
for software maintenance agreements. Marketing and supplies expense declined
39.7 percent and 16.9 percent, respectively. All other operating
<PAGE>
expenses for the first half of 2000 increased 4.5 percent. Increases in this
category included higher intangible amortization due to the 1999 acquisition of
banking offices in Pella and Knoxville and increased data processing expense.
The Board of Directors declared a quarterly cash dividend of $.087 per
share, which will be paid on July 28, 2000, to shareholders of record as of July
20, 2000. The cash dividend is equal to the prior quarter dividend.
Brenton Banks, Inc. has 43 locations in metropolitan markets and
regional economic centers across the state. The Company offers a complete range
of financial products and services -- including personal, commercial, small
business banking and agricultural; trust and investment management services;
investment, and insurance brokerage; mortgage banking; cash management and
international banking services; as well as proprietary mutual funds.
To help make banking more convenient for our clients, we deliver
banking, mortgage, insurance and investment products and services over the
telephone through Brenton Direct. Clients can review their accounts and perform
transactions 24 hours a day via our Anytime banking Internet system and Anytime
Line telephone system. Clients also enjoy the convenient advantages of our
Brenton Photo SmartCheck debit cards, ATMs, direct deposit and automatic payment
programs.
For more information about Brenton Bank's products and services, visit
our Internet web site at www.brentonbank.com.
The Company's stock, which trades on the NASDAQ stock market under the
symbol BRBK, closed at $12.00 on July 18, 2000.
###
Brenton Banks, Inc. and Wells Fargo & Company will be filing a proxy
statement/prospectus and other relevant documents concerning the merger with the
United States Securities and Exchange Commission (the "SEC"). WE URGE INVESTORS
TO READ THE PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS TO BE
FILED WITH THE SEC, BECAUSE THEY CONTAIN IMPORTANT INFORMATION. Investors will
be able to obtain the documents free of charge at the SEC's website,
www.sec.gov. In addition, documents filed with the SEC by Brenton will be
available free of charge from the Secretary of Brenton at Suite 200, Capital
Square, 400 Locust, Des Moines, Iowa 50309, Telephone (515) 237-5100.
READ THE PROXY STATEMENT/PROSPECTUS CAREFULLY BEFORE MAKING A DECISION
CONCERNING THE MERGER.
Brenton and its board of directors will be soliciting proxies from Brenton
stockholders in favor of the merger. Brenton's board of directors is comprised
of C. Robert Brenton, William H. Brenton, Junius C. Brenton, Robert L.
DeMeulenaere, Robert C. Carr, Gary M. Christensen and Robert J. Currey. Other
participants in the solicitation may include the executive officers of Brenton.
For information about these directors and executive officers, shareholders are
urged to refer to the most recent proxy statement issued by Brenton, which is
available free of charge at the SEC's website, www.sec.gov.
<PAGE>
<TABLE>
<CAPTION>
[BRENTON BANK LOGO] Six Months Ended June 30* Three Months Ended June 30*
PERFORMANCE HIGHLIGHTS 2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Return on average common stockholders' equity . . . . . . . . . 13.95 % 13.07 14.02 12.50
Return on average common stockholders' equity ** . . . . . . . . 13.32 13.32 13.32 12.66
Return on average assets, including minority interest . . . . . .99 .96 1.01 .92
Net interest margin . . . . . . . . . . . . . . . . . . . . . . 3.81 3.70 3.79 3.70
Net noninterest margin . . . . . . . . . . . . . . . . . . . . . (1.76) (1.74) (1.75) (1.80)
Efficiency ratio . . . . . . . . . . . . . . . . . . . . . . . . 65.81 67.09 65.51 68.43
Nonperforming loans as a percent of loans . . . . . . . . . . . .65 .97 -- --
Net charge-offs as a percent of average loans . . . . . . . . . .19 .38 -- --
Allowance for loan losses as a percent of loans . . . . . . . . 1.27 1.30 -- --
Allowance for loan losses as a percent of nonperforming loans . 194.83 133.81 -- --
Equity to assets** . . . . . . . . . . . . . . . . . . . . . . . 7.20 6.95 -- --
Risk-based capital ratio . . . . . . . . . . . . . . . . . . . . 10.67 10.79 -- --
Tier 1 leverage capital ratio** . . . . . . . . . . . . . . . . 7.25 7.17 -- --
CONSOLIDATED STATEMENTS OF OPERATIONS
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INTEREST INCOME
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50,793,931 45,119,310 25,664,464 22,776,986
Investment securities . . . . . . . . . . . . . . . . . . . . . 16,440,866 17,440,320 8,221,731 8,586,890
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259,827 137,188 152,222 61,546
-----------------------------------------------------------------
Total interest income . . . . . . . . . . . . . . . . . . . . . 67,494,624 62,696,818 34,038,417 31,425,422
-----------------------------------------------------------------
INTEREST EXPENSE
Deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,682,494 25,372,518 14,945,108 12,675,003
Borrowed funds . . . . . . . . . . . . . . . . . . . . . . . . . 6,824,387 6,741,929 3,181,855 3,418,976
-----------------------------------------------------------------
Total interest expense . . . . . . . . . . . . . . . . . . . . . 35,506,881 32,114,447 18,126,963 16,093,979
-----------------------------------------------------------------
NET INTEREST INCOME . . . . . . . . . . . . . . . . . . . . . . 31,987,743 30,582,371 15,911,454 15,331,443
Provision for loan losses . . . . . . . . . . . . . . . . . . . 2,100,000 2,100,000 1,050,000 1,050,000
-----------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES . . . . . . 29,887,743 28,482,371 14,861,454 14,281,443
-----------------------------------------------------------------
NONINTEREST INCOME
Service charges on deposit accounts . . . . . . . . . . . . . . 4,938,980 4,454,296 2,459,488 2,346,041
Investment brokerage commissions . . . . . . . . . . . . . . . . 2,437,464 2,208,159 1,176,066 1,183,343
Fiduciary income . . . . . . . . . . . . . . . . . . . . . . . . 2,021,567 1,938,384 1,047,341 872,466
Mortgage banking income . . . . . . . . . . . . . . . . . . . . 1,573,056 2,989,405 847,503 1,351,308
Insurance commissions and fees . . . . . . . . . . . . . . . . . 558,169 720,734 290,035 436,221
Other service charges, collection and exchange charges,
commissions and fees . . . . . . . . . . . . . . . . . . . . . 2,497,754 2,461,388 1,264,005 1,200,158
Net realized gains from securities available for sale . . 28,204 206,919 0 143,983
Other operating income . . . . . . . . . . . . . . . . . . . . . 889,337 1,062,291 331,746 713,079
-----------------------------------------------------------------
Total noninterest income . . . . . . . . . . . . . . . . . . . . 14,944,531 16,041,576 7,416,184 8,246,599
-----------------------------------------------------------------
NONINTEREST EXPENSE
Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . 14,304,273 15,130,432 7,277,478 7,886,086
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . 2,774,539 3,076,176 1,303,042 1,315,515
Occupancy expense of premises, net . . . . . . . . . . . . . . . 3,333,561 2,942,388 1,601,818 1,459,665
Furniture and equipment expense . . . . . . . . . . . . . . . . 2,865,530 2,267,131 1,464,900 1,160,479
Data processing expense . . . . . . . . . . . . . . . . . . . . 1,511,007 1,383,293 755,635 692,391
Marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . 563,871 935,789 257,964 518,394
Supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 620,869 747,029 334,969 433,432
Other operating expense . . . . . . . . . . . . . . . . . . . . 6,091,076 5,890,646 2,877,565 3,246,094
-----------------------------------------------------------------
Total noninterest expense . . . . . . . . . . . . . . . . . . . 32,064,726 32,372,884 15,873,371 16,712,056
-----------------------------------------------------------------
Income before income taxes and minority interest . . . . . . . . 12,767,548 12,151,063 6,404,267 5,815,986
Income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . 3,124,685 3,019,254 1,534,100 1,429,915
-----------------------------------------------------------------
Income before minority interest . . . . . . . . . . . . . . . . 9,642,863 9,131,809 4,870,167 4,386,071
Minority interest . . . . . . . . . . . . . . . . . . . . . . . 369,613 324,341 185,281 156,833
-----------------------------------------------------------------
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,273,250 8,807,468 4,684,886 4,229,238
-----------------------------------------------------------------
PER COMMON SHARE:
Net income-basic . . . . . . . . . . . . . . . . . . . . . . . $ .46 .43 .23 .21
Net income-diluted . . . . . . . . . . . . . . . . . . . . . . .45 .42 .23 .20
Cash dividends . . . . . . . . . . . . . . . . . . . . . . . . .174 .172 .087 .086
Book value, including unrealized gains (losses). . . . . . . . 6.72 6.46 -- --
Book value, excluding unrealized gains (losses). . . . . . . . 7.04 6.59 -- --
Closing price. . . . . . . . . . . . . . . . . . . . . . . . . 13.88 15.50 -- --
-----------------------------------------------------------------------------------------------------------------------------------
<FN>
* The financial information for the interim periods is unaudited. In the opinion of management, all adjustments necessary for a
fair presentation of the results of operations have been included. These adjustments were of a normal recurring nature.
** Excludes unrealized gains (losses) on securities available for sale.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
[BRENTON BANK LOGO] June 30, December 31, June 30,
CONSOLIDATED STATEMENTS OF CONDITION 2000* 1999 1999*
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 83,317,827 85,064,053 75,080,865
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,824,100 2,361,784 2,120,205
Investment securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . 563,827,196 581,393,231 616,675,960
Loans held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,486,654 26,201,221 56,715,648
Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,215,969,612 1,195,986,791 1,103,313,424
Allowance for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . (15,393,504) (14,413,104) (14,298,867)
--------------------------------------------------
Loans, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,200,576,108 1,181,573,687 1,089,014,557
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110,386,555 108,860,725 100,136,238
--------------------------------------------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,984,418,440 1,985,454,701 1,939,743,473
--------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Noninterest-bearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 206,439,609 189,333,019 201,845,814
Interest-bearing:
Demand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 135,242,894 145,131,184 141,826,104
Savings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 635,854,420 640,963,380 598,068,369
Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 590,617,527 554,655,720 531,129,090
--------------------------------------------------
Total deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,568,154,450 1,530,083,303 1,472,869,377
Federal funds purchased and securities sold under agreements to repurchase . . 163,401,235 166,806,442 129,225,413
Short-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58,340,000 110,423,584 147,070,000
Long-term borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,888,000 27,704,000 38,283,000
Other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,964,406 13,896,056 15,259,746
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,753,957 4,607,865 4,684,196
Realized stockholders' equity . . . . . . . . . . . . . . . . . . . . . . . . . 143,352,817 137,568,254 134,945,894
Unrealized losses on investment securities . . . . . . . . . . . . . . . . . . (6,436,425) (5,634,803) (2,594,153)
--------------------------------------------------
Total liabilities and stockholders' equity . . . . . . . . . . . . . . . . $ 1,984,418,440 1,985,454,701 1,939,743,473
--------------------------------------------------
NONPERFORMING ASSETS
------------------------------------------------------------------------------------------------------------------------------------
Nonaccrual loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,701,000 7,259,000 8,183,000
Restructured loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0 399,000 426,000
Past due 90 days or more and still accruing . . . . . . . . . . . . . . . . . . 1,200,000 1,794,000 2,077,000
--------------------------------------------------
Total nonperforming loans . . . . . . . . . . . . . . . . . . . . . . . . . . 7,901,000 9,452,000 10,686,000
Other real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 606,000 1,186,000 555,000
--------------------------------------------------
Total nonperforming assets . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,507,000 10,638,000 11,241,000
--------------------------------------------------
ALLOWANCE FOR LOAN LOSSES
------------------------------------------------------------------------------------------------------------------------------------
Balance at beginning of period . . . . . . . . . . . . . . . . . . . . . . . . $ 14,413,104 14,172,264 14,172,264
Provision for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,100,000 4,250,000 2,100,000
Charge-offs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,398,365) (6,404,068) (3,158,849)
Recoveries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,278,765 2,394,908 1,185,452
--------------------------------------------------
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 15,393,504 14,413,104 14,298,867
--------------------------------------------------
MARKET AND DIVIDEND INFORMATION High Low Dividends
------------------------------------------------------------------------------------------------------------------------------------
2000
1st quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12.00 8.19 .087
2nd quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14.63 7.44 .087
1999
1st quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.91 11.82 .086
2nd quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.25 12.55 .086
3rd quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17.00 11.63 .087
4th quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15.00 9.00 .087
<FN>
The above table sets forth the high and low sale prices and dividends for the Company's common stock, which is traded on the NASDAQ
Stock Market under the symbol BRBK. The market quotations, reported by NASDAQ, do not include retail markup, markdown or
commissions.
</FN>
</TABLE>
<TABLE>
<S> <C> <C>
MARKET MAKERS NASDAQ SYMBOL: BRBK FORM 10-Q
ABN AMRO Incorporated Copies of Brenton Banks, Inc. Quarterly Report to the
Herzog, Heine, Geduld, Inc. WALL STREET JOURNAL Securities and Exchange Commission Form 10-Q will be
Howe, Barnes Investments, Inc. AND OTHER NEWSPAPERS: BrentB mailed when available without charge to shareholders
Keefe, Bruyette & Woods, Inc. upon written request to Steven T. Schuler, Chief Financial
Sandler O'Neill & Partners, L.P. Officer/Treasurer/Secretary, at the corporate headquarters,
Stifel, Nicolaus & Company, Incorporated Suite 200, Capital Square, 400 Locust Street, Des Moines,
Iowa 50309. It is also available on the Securities and
VISIT OUR WEBSITE AT WWW.BRENTONBANK.COM Exchange Commission's Internet web site at http://www.
sec.gov/cgi-bin/srch-edgar.
</TABLE>
