<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM 10-Q
-----------
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
COMMISSION FILE NO. 0-2989
COMMERCE BANCSHARES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MISSOURI 43-0889454
(STATE OF INCORPORATION) (I.R.S. EMPLOYER IDENTIFICATION
NO.)
1000 WALNUT, KANSAS CITY, MO 64106
(ADDRESS OF PRINCIPAL EXECUTIVE (ZIP CODE)
OFFICES)
(816) 234-2000
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
X
Yes------- No -------
As of April 30, 1996, the registrant had outstanding 36,364,721 shares of its
$5 par value common stock, registrant's only class of common stock.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART I: FINANCIAL INFORMATION
In the opinion of management, the consolidated financial statements of
Commerce Bancshares, Inc. and Subsidiaries as of March 31, 1996 and December
31, 1995 and the related notes include all material adjustments which were
regularly recurring in nature and necessary for fair presentation of the
financial condition and the results of operations for the periods shown.
The consolidated financial statements of Commerce Bancshares, Inc. and
Subsidiaries and management's discussion and analysis of financial condition
and results of operations are presented in the schedules as follows:
Schedule 1: Consolidated Balance Sheets
Schedule 2: Consolidated Statements of Income
Schedule 3: Statements of Changes in Stockholders' Equity
Schedule 4: Consolidated Statements of Cash Flows
Schedule 5: Notes to Consolidated Financial Statements
Schedule 6: Management's Discussion and Analysis of Financial Condition
and Results of Operations
Schedule 7: Comparison of Key Ratios and Selected Market Data
PART II: OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
(27) Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter ended March 31,
1996.
The exhibit set forth above was filed as part of Form 10-Q with the
Securities and Exchange Commission but is not included 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.
Commerce Bancshares, Inc.
/s/ J. Daniel Stinnett
By___________________________________
J. Daniel Stinnett
Vice President & Secretary
Date: May 10, 1996
/s/ Jeffery D. Aberdeen
By___________________________________
Jeffery D. Aberdeen
Controller
(Chief Accounting Officer)
Date: May 10, 1996
1
<PAGE>
SCHEDULE 1
COMMERCE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31 DECEMBER
1996 31 1995
----------- ----------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Loans and lease financing, net of unearned............. $5,298,064 $5,317,813
Allowance for loan losses.............................. (98,666) (98,537)
---------- ----------
NET LOANS AND LEASE FINANCING...................... 5,199,398 5,219,276
---------- ----------
Investment securities:
Available for sale................................... 2,565,309 2,552,264
Trading account...................................... 11,494 9,369
Other non-marketable................................. 33,032 33,120
---------- ----------
TOTAL INVESTMENT SECURITIES........................ 2,609,835 2,594,753
---------- ----------
Federal funds sold and securities purchased under
agreements to resell.................................. 515,424 523,302
Cash and due from banks................................ 745,877 774,852
Land, buildings and equipment--net..................... 208,745 210,033
Customers' acceptance liability........................ 4,579 9,435
Other assets........................................... 221,793 242,300
---------- ----------
TOTAL ASSETS....................................... $9,505,651 $9,573,951
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand--non-interest bearing......................... $1,627,844 $1,828,950
Savings and interest bearing demand.................. 3,976,382 3,891,801
Time open and C.D.'s of less than $100,000........... 2,237,359 2,253,390
Time open and C.D.'s of $100,000 and over............ 235,589 218,951
---------- ----------
TOTAL DEPOSITS..................................... 8,077,174 8,193,092
Federal funds purchased and securities sold under
agreements to repurchase.............................. 448,806 362,903
Long-term debt and other borrowings.................... 14,455 14,562
Accrued interest, taxes and other liabilities.......... 76,515 110,176
Acceptances outstanding................................ 4,579 9,435
---------- ----------
TOTAL LIABILITIES.................................. 8,621,529 8,690,168
---------- ----------
Stockholders' equity:
Preferred stock, $1 par value.
Authorized and unissued 2,000,000 shares........... -- --
Common stock, $5 par value.
Authorized 60,000,000 shares; issued 37,565,369
shares............................................ 187,827 187,827
Capital surplus...................................... 81,517 84,415
Retained earnings.................................... 638,674 618,388
Treasury stock of 991,690 shares in 1996 and 861,951
shares in 1995, at cost............................. (37,313) (32,980)
Unearned employee benefits........................... (790) (716)
Unrealized securities gain--net of tax............... 14,207 26,849
---------- ----------
TOTAL STOCKHOLDERS' EQUITY......................... 884,122 883,783
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY......... $9,505,651 $9,573,951
========== ==========
</TABLE>
See accompanying notes to financial statements.
2
<PAGE>
SCHEDULE 2
COMMERCE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
FOR THE THREE
MONTHS ENDED
MARCH 31
-----------------
1996 1995
-------- --------
(UNAUDITED)
(IN THOUSANDS,
EXCEPT PER SHARE
DATA)
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans and leases........................ $115,516 $ 99,416
Interest on investment securities............................ 38,676 41,197
Interest on federal funds sold and securities purchased under
agreements to resell........................................ 7,882 983
-------- --------
TOTAL INTEREST INCOME.................................... 162,074 141,596
-------- --------
INTEREST EXPENSE
Interest on deposits:
Savings and interest bearing demand........................ 32,311 26,413
Time open and C.D.'s of less than $100,000................. 31,184 24,187
Time open and C.D.'s of $100,000 and over.................. 3,061 2,203
Interest on federal funds purchased and securities sold under
agreements to repurchase.................................... 5,781 5,274
Interest on long-term debt and other borrowings.............. 223 232
-------- --------
TOTAL INTEREST EXPENSE................................... 72,560 58,309
-------- --------
NET INTEREST INCOME...................................... 89,514 83,287
Provision for loan losses.................................... 5,553 2,833
-------- --------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES...... 83,961 80,454
-------- --------
NON-INTEREST INCOME
Trust income................................................. 9,093 7,774
Deposit account charges and other fees....................... 12,412 10,126
Trading account profits and commissions...................... 1,726 1,368
Net gains on securities transactions......................... 1,224 186
Miscellaneous credit card income............................. 5,767 4,799
Other income................................................. 6,574 6,335
-------- --------
TOTAL NON-INTEREST INCOME................................ 36,796 30,588
-------- --------
OTHER EXPENSE
Salaries and employee benefits............................... 41,157 37,146
Net occupancy expense on bank premises....................... 5,392 4,854
Equipment expense............................................ 3,553 3,250
Supplies and communication expense........................... 6,054 5,305
Data processing expense...................................... 4,931 4,891
Federal deposit insurance expense............................ 153 3,934
Marketing expense............................................ 3,596 1,993
Other operating expense...................................... 13,772 10,237
-------- --------
TOTAL OTHER EXPENSE...................................... 78,608 71,610
-------- --------
Income before income taxes................................... 42,149 39,432
Less income taxes............................................ 14,866 14,409
-------- --------
NET INCOME............................................... $ 27,283 $ 25,023
======== ========
Net income per common and common equivalent share............ $ .74 $ .68
======== ========
Weighted average common and common equivalent shares
outstanding................................................. 37,028 36,576
======== ========
Cash dividends per common share.............................. $ .190 $ .171
======== ========
</TABLE>
See accompanying notes to financial statements.
3
<PAGE>
SCHEDULE 3
COMMERCE BANCSHARES, INC. AND SUBSIDIARIES
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
NUMBER OF UNEARNED NET
SHARES COMMON CAPITAL RETAINED TREASURY EMPLOYEE UNREALIZED
ISSUED STOCK SURPLUS EARNINGS STOCK BENEFITS GAIN (LOSS) TOTAL
---------- -------- ------- -------- -------- -------- ----------- --------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE JANUARY 1, 1996. 37,565,369 $187,827 $84,415 $618,388 $(32,980) $(716) $ 26,849 $883,783
Net income............. 27,283 27,283
Year-to-date change in
fair value of
investment securities. (12,642) (12,642)
Purchase of treasury
stock................. (9,683) (9,683)
Exercise of stock
options............... (2,889) 5,216 2,327
Issuance of stock under
restricted stock award
plan.................. (9) 134 (125) --
Restricted stock award
amortization.......... 51 51
Cash dividends paid
($.190 per share)..... (6,997) (6,997)
---------- -------- ------- -------- -------- ----- -------- --------
BALANCE MARCH 31, 1996.. 37,565,369 $187,827 $81,517 $638,674 $(37,313) $(790) $ 14,207 $884,122
========== ======== ======= ======== ======== ===== ======== ========
Balance January 1, 1995. 33,970,106 $169,851 $54,575 $576,331 $(12,148) $(295) $(60,116) $728,198
Net income............. 25,023 25,023
Year-to-date change in
fair value of
investment securities. 35,401 35,401
Purchase of treasury
stock................. (7,230) (7,230)
Exercise of stock
options............... (1,765) 3,928 2,163
Purchase acquisition... (435) 5,315 4,880
Pooling acquisition,
net................... 2,674,299 13,371 (4,872) 32,360 7,625 38 48,522
Issuance of stock under
restricted stock award
plan.................. 2 604 (606) --
Restricted stock award
amortization.......... 31 31
Cash dividends paid
($.171 per share)..... (6,594) (6,594)
---------- -------- ------- -------- -------- ----- -------- --------
Balance March 31, 1995.. 36,644,405 $183,222 $47,505 $627,120 $ (1,906) $(870) $(24,677) $830,394
========== ======== ======= ======== ======== ===== ======== ========
</TABLE>
See accompanying notes to financial statements.
4
<PAGE>
SCHEDULE 4
COMMERCE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE THREE
MONTHS
ENDED MARCH 31
--------------------
1996 1995
--------- ---------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income.............................................. $ 27,283 $ 25,023
Adjustments to reconcile net income to net cash provided
by operating activities:
Provision for loan losses............................. 5,553 2,833
Provision for depreciation and amortization........... 7,560 6,398
Accretion of investment security discounts............ (1,348) (1,355)
Amortization of investment security premiums.......... 4,892 5,924
Net gains on sales of investment securities (A)....... (1,224) (186)
Net increase in trading account securities............ (1,746) (863)
Decrease in interest receivable....................... 6,695 7,960
Increase (decrease) in interest payable............... (1,720) 2,688
Other changes, net.................................... 19,182 43,821
--------- ---------
Net cash provided by operating activities........... 65,127 92,243
--------- ---------
INVESTING ACTIVITIES:
Net cash received in acquisitions....................... -- 33,389
Cash paid in sale of branch............................. (13,595) --
Proceeds from sales of investment securities (A)........ 192,048 209,844
Proceeds from maturities of investment securities (A)... 103,394 123,978
Purchases of investment securities (A).................. (334,278) (182,578)
Net decrease in federal funds sold and securities
purchased
under agreements to resell............................. 7,878 52,060
Net (increase) decrease in loans........................ 11,610 (161,164)
Purchases of premises and equipment..................... (4,179) (3,612)
Sales of premises and equipment......................... 477 287
--------- ---------
Net cash provided (used) by investing activities.... (36,645) 72,204
--------- ---------
FINANCING ACTIVITIES:
Net decrease in non-interest bearing demand, savings
and interest bearing demand deposits................... (106,464) (294,846)
Net increase in time open and C.D.'s.................... 8,724 30,085
Net increase in federal funds purchased and securities
sold
under agreements to repurchase......................... 85,903 122,214
Repayment of long-term debt............................. (120) (109)
Purchases of treasury stock............................. (40,438) (7,208)
Exercise of stock options by employees.................. 1,935 2,063
Cash dividends paid on common stock..................... (6,997) (6,594)
--------- ---------
Net cash used by financing activities............... (57,457) (154,395)
--------- ---------
Increase (decrease) in cash and cash equivalents.... (28,975) 10,052
Cash and cash equivalents at beginning of year.......... 774,852 565,805
--------- ---------
Cash and cash equivalents at March 31............... $ 745,877 $ 575,857
========= =========
</TABLE>
- --------
(A) Available for sale and other non-marketable securities, excluding trading
account securities.
Cash payments of income taxes for the three month period were $1,218,000 in
1996 and none in 1995. Interest paid on deposits and borrowings for the three
month period was $74,214,000 in 1996 and $55,621,000 in 1995.
See accompanying notes to financial statements.
5
<PAGE>
SCHEDULE 5
COMMERCE BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
(UNAUDITED)
1. PRINCIPLES OF CONSOLIDATION AND PRESENTATION
The accompanying consolidated financial statements include the accounts of
Commerce Bancshares, Inc. and all majority-owned subsidiaries (the Company).
All significant intercompany accounts and transactions have been eliminated.
Certain reclassifications were made to 1995 data to conform to current year
presentation.
The significant accounting policies followed in the preparation of the
quarterly financial statements are the same as those disclosed in the 1995
Annual Report to stockholders to which reference is made.
2. ALLOWANCE FOR LOAN LOSSES
The following is a summary of the allowance for loan losses for the three
months ended March 31, 1996 and 1995 (in thousands):
<TABLE>
<CAPTION>
1996 1995
------- -------
<S> <C> <C>
Balance, January 1....................................... $98,537 $87,179
------- -------
Additions:
Provision for loan losses.............................. 5,553 2,833
Allowance for loan losses of acquired banks............ -- 4,737
------- -------
Total additions...................................... 5,553 7,570
------- -------
Deductions:
Loan losses............................................ 7,317 4,204
Less recoveries on loans............................... 1,893 1,510
------- -------
Net loan losses...................................... 5,424 2,694
------- -------
Balance, March 31........................................ $98,666 $92,055
======= =======
</TABLE>
At March 31, 1996, interest income was not being recognized on an accrual
basis for loans with an outstanding balance of $16,161,000.
3. INVESTMENT SECURITIES
Investment securities, at fair value, consist of the following at March 31,
1996 and December 31, 1995 (in thousands):
<TABLE>
<CAPTION>
MARCH 31 DECEMBER 31
1996 1995
---------- -----------
<S> <C> <C>
Available for sale:
U.S. government and federal agency obligations... $1,770,411 $1,707,111
State and municipal obligations.................. 121,286 128,043
CMO's and asset-backed securities................ 626,949 670,522
Other debt securities............................ 5,090 10,982
Equity securities................................ 41,573 35,606
Trading account securities......................... 11,494 9,369
Other non-marketable securities.................... 33,032 33,120
---------- ----------
Total investment securities.................... $2,609,835 $2,594,753
========== ==========
</TABLE>
6
<PAGE>
4. SALES OF BRANCHES
In March 1996, the Company sold a branch in Delavan, Illinois, with loans of
$2.8 million and deposits of $18.2 million. Cash disbursed in the sale was
$13.6 million. The sale did not have a material effect on the financial
statements of the Company.
The Company has an agreement to sell a branch in Lexington, Missouri, with
loans and deposits of approximately $7.8 million and $35.2 million,
respectively. The sale is expected to close before the end of the third quarter
of 1996 and is not expected to have a material effect on the financial
statements of the Company.
7
<PAGE>
SCHEDULE 6
COMMERCE BANCSHARES, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
MARCH 31, 1996
(UNAUDITED)
The following discussion and analysis should be read in conjunction with the
consolidated financial statements and related notes and with the statistical
information and financial data appearing in this report as well as the
Company's 1995 Annual Report on Form 10-K. Results of operations for the three
month period ended March 31, 1996 are not necessarily indicative of results to
be attained for any other period.
SUMMARY
The Company's consolidated net income for the first three months of 1996
totaled $27.3 million; a $2.3 million or 9% increase over the same period in
1995. Earnings per share increased to $.74 in the first quarter of 1996
compared to $.68 in the first quarter of 1995. Net interest income increased
$6.2 million and non-interest income increased $6.2 million, partially offset
by increases of $7.0 million in other expense and $2.7 million in the
provision for loan losses. Four banks were acquired in March through May of
1995, the effects of which are discussed below.
Return on average assets for the first quarter of 1996 was 1.16% compared to
1.25% for the first quarter of 1995. Return on average stockholders' equity
for the first quarter of 1996 was 12.17% compared to 13.36% for the first
quarter of 1995. This decrease was partially due to an increase in the average
unrealized gain in fair value of available for sale investment securities in
the first quarter of 1996 compared to the first quarter of 1995. The Company's
efficiency ratio (other expense/net interest income plus non-interest income
excluding net gains on securities transactions) was 62.84% for the first
quarter of 1996 compared to 62.99% for the first quarter of 1995.
In the second quarter of 1996, several banks in Missouri, Kansas and
Illinois will be merged to form two banks, thus better serving those customers
at over 100 sites in Missouri/Kansas and over 20 sites in Illinois.
The Company sold a branch in Illinois in March 1996 and has an agreement to
sell a Missouri branch, subject to regulatory approvals. These sales are not
expected to have material effects on the financial statements of the Company.
INTEREST INCOME AND EARNING ASSETS
Total interest income increased $20.5 million, or 14.5%, compared to the
first three months of 1995 mainly due to an increase of $1.03 billion in
average earning asset balances, (which caused an increase of $20.7 million in
tax equivalent interest income). Excluding banks acquired in 1995, total
interest income increased 2.6% in the first three months of 1996 over the same
period in 1995. Compared to the fourth quarter of 1995, total interest income
decreased $2.6 million due to a decrease of 15 basis points in average tax
equivalent rates earned, partially offset by an increase of $133.4 million in
average earning asset balances. The average tax equivalent yield was 7.79% for
the first three months of 1996, 7.80% for the first three months of 1995 and
7.94% for the fourth quarter of 1995.
Loans, the highest yielding category of earning assets, were 63% of average
earning assets for the first three months of 1996. Loan and lease interest
income increased $16.1 million, or 16.2%, over the first three months of 1995
due to an increase of $693.8 million in average loan balances. Most of the
increase in average balances was attributable to bank acquisitions.
8
<PAGE>
Interest income on investment securities decreased $2.5 million from the
first three months of 1995 mainly due to a decrease of $101.5 million in
average balances invested in CMO's and asset-backed securities and a decrease
of $88.7 million invested in U.S. government and federal agency securities.
Interest income on federal funds sold and securities purchased under
agreements to resell increased $6.9 million over the first three months of
1995 mainly due to an increase of $514.4 million in average balances invested.
Summaries of average earning assets and liabilities and the corresponding
average rates earned/paid appear on pages 10 through 13.
RISK ELEMENTS OF LOAN PORTFOLIO
Impaired loans include all non-accrual loans and loans 90 days delinquent
and still accruing interest. The loan portfolio contained loans on non-accrual
status of $16.2 million at March 31, 1996, unchanged from December 31, 1995.
These loans were placed on non-accrual status because management does not
expect to collect payments consistent with acceptable and agreed upon terms of
repayment (generally, loans that are 90 days past due as to principal and/or
interest payments). Loans which were 90 days past due and still accruing
interest amounted to $20.8 million at March 31, 1996 compared to $15.7 million
at December 31, 1995. These loans were made primarily to borrowers in
Missouri, Kansas and Illinois. Foreclosed real estate amounted to
approximately $1.7 million at March 31, 1996 compared to $2.0 million at
December 31, 1995. Total non-performing assets (impaired loans and foreclosed
real estate) were .41% of total assets and .73% of total loans at March 31,
1996.
The subsidiary banks issue Visa and MasterCard credit cards, and the balance
of these consumer loans generated through credit card sales drafts and cash
advances was $491.0 million at March 31, 1996. Because credit card loans
traditionally have a higher than average ratio of net charge-offs to loans
outstanding, management requires that a specific allowance for losses on
credit card loans be maintained, which was $10.4 million, or 2.1% of credit
card loans at March 31, 1996. The risk presented by the above loans and
foreclosed real estate is not considered by management to be materially
adverse in relation to normal credit risks generally taken by lenders.
PROVISION FOR LOAN LOSSES
Management records the provision for loan losses, on an individual bank
basis, in amounts that result in an allowance for loan losses sufficient to
cover all potential net charge-offs and risks believed to be inherent in the
loan portfolio of each bank. Management's evaluation includes such factors as
past loan loss experience as related to current loan portfolio mix, evaluation
of actual and potential losses in the loan portfolio, prevailing regional and
national economic conditions that might have an impact on the portfolio,
regular reviews and examinations of the loan portfolio conducted by internal
loan reviewers supervised by the Parent, reviews and examinations by bank
regulatory authorities, and other factors that management believes deserve
current recognition. As a result of these factors, the provision for loan
losses increased $2.7 million compared to the first quarter of 1995 and
decreased $386 thousand compared to the fourth quarter of 1995. The allowance
for loan losses as a percentage of loans and leases outstanding was 1.86% at
March 31, 1996, compared to 1.85% at year-end 1995 and 1.90% at March 31,
1995. Management believes that the allowance for loan losses, which is a
general reserve, is adequate to cover actual and potential losses in the loan
portfolio under current conditions. Other than as previously noted, management
is not aware of any significant risks in the current loan portfolio due to
concentrations of loans within any particular industry, nor of any separate
types of loans within a particular category of non-performing loans that are
unusually significant as to possible loan losses when compared to the entire
loan portfolio. Net charge-offs on loans totaled $5.4 million for the first
quarter of 1996 compared to net charge-offs of $2.7 million for the first
quarter of 1995 and $5.7 million for the fourth quarter of 1995.
9
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT'D)
AVERAGE BALANCE SHEETS--AVERAGE RATES AND YIELDS
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
<TABLE>
<CAPTION>
FIRST QUARTER 1996 FIRST QUARTER 1995
------------------------------- -------------------------------
INTEREST AVG. RATES INTEREST AVG. RATES
AVERAGE INCOME/ EARNED/ AVERAGE INCOME/ EARNED/
BALANCE EXPENSE PAID BALANCE EXPENSE PAID
---------- -------- ---------- ---------- -------- ----------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Loans and leases:
Business (including
foreign) (A).......... $1,681,661 $ 33,342 7.97% $1,484,400 $ 30,446 8.32%
Construction and
development........... 171,320 3,788 8.89 129,493 3,078 9.64
Real estate--business.. 700,920 15,041 8.63 615,238 13,518 8.91
Real estate--personal.. 980,732 19,530 8.01 848,369 15,828 7.57
Personal banking....... 1,264,519 27,463 8.74 1,132,041 23,778 8.52
Credit card............ 494,270 16,708 13.60 390,074 13,117 13.64
---------- -------- ----- ---------- -------- -----
Total loans and
leases............. 5,293,422 115,872 8.80 4,599,615 99,765 8.80
---------- -------- ----- ---------- -------- -----
Investment securities:
U.S. government &
federal agency........ 1,713,686 26,233 6.16 1,802,431 27,211 6.12
State & municipal
obligations (A)....... 120,529 2,357 7.87 73,348 1,279 7.07
CMO's and asset-backed
securities............ 647,684 10,163 6.31 749,160 11,693 6.33
Trading account
securities (A)........ 6,917 88 5.09 3,236 45 5.65
Other marketable
securities (A)........ 36,799 665 7.27 89,330 1,390 6.31
Other non-marketable
securities............ 34,416 81 .95 21,591 111 2.08
---------- -------- ----- ---------- -------- -----
Total investment
securities......... 2,560,031 39,587 6.22 2,739,096 41,729 6.18
---------- -------- ----- ---------- -------- -----
Federal funds sold and
securities purchased
under agreements to
resell................. 579,395 7,882 5.47 64,971 983 6.14
---------- -------- ----- ---------- -------- -----
Total interest
earning assets..... 8,432,848 163,341 7.79 7,403,682 142,477 7.80
-------- ----- -------- -----
Less allowance for loan
losses................. (98,222) (88,461)
Unrealized gain (loss)
on investment
securities............. 52,388 (83,645)
Cash and due from banks. 657,504 554,738
Land, buildings and
equipment--net......... 209,980 193,801
Other assets............ 207,532 166,543
---------- ----------
Total assets........ $9,462,030 $8,146,658
========== ==========
LIABILITIES AND EQUITY:
Interest bearing
deposits:
Savings................ $ 305,825 1,834 2.41 $ 282,826 1,797 2.58
Interest bearing
demand................ 3,637,771 30,477 3.37 3,115,046 24,616 3.20
Time open & C.D.'s of
less than $100,000.... 2,245,800 31,184 5.58 1,992,560 24,187 4.92
Time open & C.D.'s of
$100,000 and over..... 232,420 3,061 5.30 184,454 2,203 4.84
---------- -------- ----- ---------- -------- -----
Total interest
bearing deposits... 6,421,816 66,556 4.17 5,574,886 52,803 3.84
---------- -------- ----- ---------- -------- -----
Borrowings:
Federal funds
purchased and
securities sold under
agreements to
repurchase............ 481,349 5,781 4.83 403,187 5,274 5.30
Long-term debt and
other borrowings...... 14,760 258 7.02 15,473 234 6.14
---------- -------- ----- ---------- -------- -----
Total borrowings.... 496,109 6,039 4.90 418,660 5,508 5.34
---------- -------- ----- ---------- -------- -----
Total interest
bearing
liabilities........ 6,917,925 72,595 4.22% 5,993,546 58,311 3.95%
-------- ----- -------- -----
Demand--non-interest
bearing deposits....... 1,545,844 1,365,096
Other liabilities....... 96,541 28,582
Stockholders' equity.... 901,720 759,434
---------- ----------
Total liabilities
and equity......... $9,462,030 $8,146,658
========== ==========
Net interest margin
(T/E).................. $ 90,746 $ 84,166
======== ========
Net yield on interest
earning assets......... 4.33% 4.61%
===== =====
</TABLE>
- --------
(A) Stated on a tax equivalent basis using a federal income tax rate of 35%.
10
<PAGE>
ANALYSIS OF VARIANCE IN NET INTEREST MARGIN (T/E) DUE TO VOLUMES AND RATES
THREE MONTHS ENDED MARCH 31, 1996 AND 1995
<TABLE>
<CAPTION>
1996 VS 1995
-------------------------------------
INCREASE OR (DECREASE)
DUE TO CHANGE IN
------------------------ TOTAL
AVERAGE AVERAGE INCREASE
VOLUME RATE (B) (DECREASE)
----------- ----------- ----------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
VARIANCE IN INTEREST INCOME ON:
Loans and leases:
Business (including foreign) (A)......... $ 4,026 $ (1,130) $ 2,896
Construction and development............. 1,003 (293) 710
Real estate--business.................... 1,898 (375) 1,523
Real estate--personal.................... 2,491 1,211 3,702
Personal banking......................... 2,806 879 3,685
Credit card.............................. 3,534 57 3,591
----------- ----------- -------
Total loans and leases................. 15,758 349 16,107
----------- ----------- -------
Investment securities:
U.S. government & federal agency......... (1,350) 372 (978)
State & municipal obligations (A)........ 830 248 1,078
CMO's and asset-backed securities........ (1,597) 67 (1,530)
Trading account securities (A)........... 52 (9) 43
Other marketable securities (A).......... (824) 99 (725)
Other non-marketable securities.......... 66 (96) (30)
----------- ----------- -------
Total investment securities............ (2,823) 681 (2,142)
----------- ----------- -------
Federal funds sold and securities
purchased under agreements to resell..... 7,786 (887) 6,899
----------- ----------- -------
Total interest income.................. 20,721 143 20,864
----------- ----------- -------
VARIANCE IN INTEREST EXPENSE ON:
Interest bearing deposits:
Savings.................................. 148 (111) 37
Interest bearing demand.................. 5,396 465 5,861
Time open & C.D.'s of less than
$100,000................................ 3,172 3,825 6,997
Time open & C.D.'s of $100,000 and over.. 587 271 858
----------- ----------- -------
Total interest bearing deposits........ 9,303 4,450 13,753
----------- ----------- -------
Borrowings:
Federal funds purchased and securities
sold under agreements to repurchase..... 837 (330) 507
Long-term debt and other borrowings...... (11) 35 24
----------- ----------- -------
Total borrowings....................... 826 (295) 531
----------- ----------- -------
Total interest expense................. 10,129 4,155 14,284
----------- ----------- -------
Change in net interest margin (T/E)....... $ 10,592 $ (4,012) $ 6,580
=========== =========== =======
Percentage increase in net interest margin (T/E) over the same
period of the prior year........................................ 7.82%
=======
</TABLE>
- --------
(A) Stated on a tax equivalent basis.
(B) Changes not solely due to volume or rate changes are allocated to rate.
Management believes this allocation method, applied on a consistent basis,
provides meaningful comparisons between the respective periods.
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT'D)
AVERAGE BALANCE SHEETS--AVERAGE RATES AND YIELDS
THREE MONTHS ENDED MARCH 31, 1996 AND DECEMBER 31, 1995
<TABLE>
<CAPTION>
FIRST QUARTER 1996 FOURTH QUARTER 1995
------------------------------- -------------------------------
INTEREST AVG. RATES INTEREST AVG. RATES
AVERAGE INCOME/ EARNED/ AVERAGE INCOME/ EARNED/
BALANCE EXPENSE PAID BALANCE EXPENSE PAID
---------- -------- ---------- ---------- -------- ----------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Loans and leases:
Business (including
foreign) (A).......... $1,681,661 $ 33,342 7.97% $1,760,667 $ 36,586 8.24%
Construction and
development........... 171,320 3,788 8.89 138,631 3,212 9.19
Real estate--business.. 700,920 15,041 8.63 713,278 15,901 8.84
Real estate--personal.. 980,732 19,530 8.01 989,995 19,779 7.93
Personal banking....... 1,264,519 27,463 8.74 1,305,827 29,043 8.82
Credit card............ 494,270 16,708 13.60 457,429 15,873 13.77
---------- -------- ----- ---------- -------- -----
Total loans and
leases............. 5,293,422 115,872 8.80 5,365,827 120,394 8.90
---------- -------- ----- ---------- -------- -----
Investment securities:
U.S. government &
federal agency........ 1,713,686 26,233 6.16 1,668,808 25,950 6.17
State & municipal
obligations (A)....... 120,529 2,357 7.87 132,962 2,680 8.00
CMO's and asset-backed
securities............ 647,684 10,163 6.31 680,886 10,672 6.22
Trading account
securities (A)........ 6,917 88 5.09 5,239 77 5.83
Other marketable
securities (A)........ 36,799 665 7.27 46,674 795 6.76
Other non-marketable
securities............ 34,416 81 .95 32,876 115 1.39
---------- -------- ----- ---------- -------- -----
Total investment
securities......... 2,560,031 39,587 6.22 2,567,445 40,289 6.23
---------- -------- ----- ---------- -------- -----
Federal funds sold and
securities purchased
under agreements to
resell................. 579,395 7,882 5.47 366,166 5,364 5.81
---------- -------- ----- ---------- -------- -----
Total interest
earning assets..... 8,432,848 163,341 7.79 8,299,438 166,047 7.94
-------- ----- -------- -----
Less allowance for loan
losses................. (98,222) (97,908)
Unrealized gain on
investment securities.. 52,388 27,409
Cash and due from banks. 657,504 645,095
Land, buildings and
equipment--net......... 209,980 210,008
Other assets............ 207,532 224,008
---------- ----------
Total assets........ $9,462,030 $9,308,050
========== ==========
LIABILITIES AND EQUITY:
Interest bearing
deposits:
Savings................ $ 305,825 1,834 2.41 $ 311,844 1,984 2.52
Interest bearing
demand................ 3,637,771 30,477 3.37 3,505,037 30,618 3.47
Time open & C.D.'s of
less than $100,000.... 2,245,800 31,184 5.58 2,261,145 31,840 5.59
Time open & C.D.'s of
$100,000 and over..... 232,420 3,061 5.30 229,576 3,163 5.47
---------- -------- ----- ---------- -------- -----
Total interest
bearing deposits... 6,421,816 66,556 4.17 6,307,602 67,605 4.25
---------- -------- ----- ---------- -------- -----
Borrowings:
Federal funds
purchased and
securities sold under
agreements to
repurchase............ 481,349 5,781 4.83 430,618 5,753 5.30
Long-term debt and
other borrowings...... 14,760 258 7.02 14,714 275 7.41
---------- -------- ----- ---------- -------- -----
Total borrowings.... 496,109 6,039 4.90 445,332 6,028 5.37
---------- -------- ----- ---------- -------- -----
Total interest
bearing
liabilities........ 6,917,925 72,595 4.22% 6,752,934 73,633 4.33%
-------- ----- -------- -----
Demand--non-interest
bearing deposits....... 1,545,844 1,568,742
Other liabilities....... 96,541 93,212
Stockholders' equity.... 901,720 893,162
---------- ----------
Total liabilities
and equity......... $9,462,030 $9,308,050
========== ==========
Net interest margin
(T/E).................. $ 90,746 $ 92,414
======== ========
Net yield on interest
earning assets......... 4.33% 4.42%
===== =====
</TABLE>
- --------
(A) Stated on a tax equivalent basis using a federal income tax rate of 35%.
12
<PAGE>
ANALYSIS OF VARIANCE IN NET INTEREST MARGIN (T/E) DUE TO VOLUMES AND RATES
THREE MONTHS ENDED MARCH 31, 1996 AND DECEMBER 31, 1995
<TABLE>
<CAPTION>
CURRENT QUARTER VS PRIOR QUARTER
-------------------------------------
INCREASE OR (DECREASE)
DUE TO CHANGE IN
------------------------ TOTAL
AVERAGE AVERAGE INCREASE
VOLUME RATE (B) (DECREASE)
----------- ----------- ----------
(UNAUDITED)
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
VARIANCE IN INTEREST INCOME ON:
Loans and leases:
Business (including foreign) (A)......... $ (1,619) $ (1,625) $(3,244)
Construction and development............. 747 (171) 576
Real estate--business.................... (272) (588) (860)
Real estate--personal.................... (183) (66) (249)
Personal banking......................... (906) (674) (1,580)
Credit card.............................. 1,261 (426) 835
----------- ----------- -------
Total loans and leases................. (972) (3,550) (4,522)
----------- ----------- -------
Investment securities:
U.S. government & federal agency......... 688 (405) 283
State & municipal obligations (A)........ (247) (76) (323)
CMO's and asset-backed securities........ (513) 4 (509)
Trading account securities (A)........... 24 (13) 11
Other marketable securities (A).......... (166) 36 (130)
Other non-marketable securities.......... 5 (39) (34)
----------- ----------- -------
Total investment securities............ (209) (493) (702)
----------- ----------- -------
Federal funds sold and securities
purchased under agreements to resell..... 3,100 (582) 2,518
----------- ----------- -------
Total interest income.................. 1,919 (4,625) (2,706)
----------- ----------- -------
VARIANCE IN INTEREST EXPENSE ON:
Interest bearing deposits:
Savings.................................. (38) (112) (150)
Interest bearing demand.................. 1,162 (1,303) (141)
Time open & C.D.'s of less than
$100,000................................ (202) (454) (656)
Time open & C.D.'s of $100,000 and over.. 50 (152) (102)
----------- ----------- -------
Total interest bearing deposits........ 972 (2,021) (1,049)
----------- ----------- -------
Borrowings:
Federal funds purchased and securities
sold under agreements to repurchase..... 651 (623) 28
Long-term debt and other borrowings...... 1 (18) (17)
----------- ----------- -------
Total borrowings....................... 652 (641) 11
----------- ----------- -------
Total interest expense................. 1,624 (2,662) (1,038)
----------- ----------- -------
Change in net interest margin (T/E)....... $ 295 $ (1,963) $(1,668)
=========== =========== =======
Percentage decrease in net interest margin (T/E) from the prior
quarter......................................................... (1.80)%
=======
</TABLE>
- --------
(a) Stated on a tax equivalent basis.
(B) Changes not solely due to volume or rate changes are allocated to rate.
Management believes this allocation method, applied on a consistent basis,
provides meaningful comparisons between the respective periods.
13
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONT'D)
INTEREST EXPENSE AND RELATED LIABILITIES
Total interest expense (net of capitalized interest) increased $14.3
million, or 24.4%, compared to the first three months of 1995 due to both
higher average interest bearing liabilities and higher rates paid on those
liabilities. The average cost of funds was 4.22% for the first three months of
1996, 3.95% for the first three months of 1995 and 4.33% for the fourth
quarter of 1995. Excluding banks acquired in 1995, total interest expense
increased 10.3% in the first three months of 1996 compared to the first three
months of 1995. Compared to the fourth quarter of 1995, total interest expense
decreased $1.0 million due to a decrease of 11 basis points in average rates
paid, partially offset by an increase of $165.0 million in interest bearing
liabilities.
Average core deposits (deposits excluding short-term certificates of deposit
over $100,000) for the first three months of 1996 were $7.89 billion, an
increase of 15.1% over the same period last year. Core deposits supported 94%
of average earning assets in 1996. Interest on deposits increased $13.8
million over the first three months of 1995. Interest expense on long-term
C.D.'s of less than $100,000 and the Company's Premium Money Market deposits
increased $5.1 million and $5.7 million, respectively, due to increases in
average balances and rates paid.
Interest expense on federal funds purchased and securities sold under
agreements to repurchase increased $507 thousand over the first three months
of 1995 due to an increase in average borrowings and rates paid.
NON-INTEREST INCOME
Non-interest income increased $6.2 million in the first three months of 1996
compared to the first three months of 1995. Deposit account charges and other
fees increased $2.3 million partially due to fee restructuring and added cash
management fees. In addition, trust income increased $1.3 million,
miscellaneous credit card income increased $968 thousand and gains on
securities transactions increased $1.0 million. During the first three months
of 1996 the affiliate banks sold securities from the available for sale
portfolio for proceeds of $191.5 million and realized net gains of $790
thousand. The Parent and a non-bank subsidiary sold equity securities for
proceeds of $509 thousand, realizing net gains of $435 thousand. During the
first three months of 1995, the affiliate banks sold securities from the
available for sale portfolio for proceeds of $208.8 million and realized net
losses of $20 thousand. The Parent sold equity securities for proceeds of $1.0
million, realizing a net gain of $206 thousand. Excluding banks acquired in
1995, total non-interest income (excluding securities gains) increased $3.0
million in the first three months of 1996 compared to the first three months
of 1995.
Non-interest income increased $327 thousand over the fourth quarter of 1995
due to increases of $997 thousand in gains on securities transactions and $807
thousand in deposit account charges and other fees, partially offset by a $1.6
million decrease in miscellaneous credit card income.
OTHER EXPENSE
Other expense increased $7.0 million in the first three months of 1996
compared to the first three months of 1995. Salaries and benefits increased
$4.0 million in this comparison mainly as a result of staff acquired through
bank purchases in 1995. Excluding employees at banks acquired in 1995, full-
time equivalent employees decreased slightly in the first three months of 1996
compared to the first three months of 1995. In addition, marketing expense
increased $1.6 million and amortization of goodwill and core deposit premium
increased $1.4 million. These effects were partially offset by a $3.8 million
decrease in F.D.I.C. insurance expense due to a decrease in the assessment
rate. Excluding the expenses of banks acquired in 1995, total other expense
decreased $2.0 million in the first three months of 1996 compared to the same
period in 1995.
Other expense increased $323 thousand over the fourth quarter of 1995 due to
an increase of $1.3 million in salaries and benefits and a $1.9 million
decrease in interest received on tax refunds related to prior years. These
effects were partially offset by decreases of $860 thousand in data processing
expense and $747 thousand in F.D.I.C. insurance expense.
14
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The liquid assets of the Parent company consist primarily of short-term
investments and equity securities, most of which are readily marketable. The
fair value of these investments was $58.2 million at March 31, 1996 compared
to $90.1 million at December 31, 1995. Included in the fair values were
unrealized net gains of $12.4 million at March 31, 1996 and $11.0 million at
December 31, 1995. The Parent company liabilities totaled $11.8 million at
March 31, 1996, compared to $44.3 million at December 31, 1995. The decreases
above occurred mainly because of the payment of a $31.0 million liability
recorded at year end 1995 for a significant treasury stock purchase settling
in 1996. The Parent company had no short-term borrowings from affiliate banks
or long-term debt during 1996. The Parent company's commercial paper, which
management believes is readily marketable, has a P1 rating from Moody's and an
A1 rating from Standard & Poor's. The Company is also rated A by Thomson
BankWatch with a corresponding short-term rating of TBW-1. This credit
availability should provide adequate funds to meet any outstanding or future
commitments of the Parent.
The liquid assets held by bank subsidiaries include federal funds sold and
securities purchased under agreements to resell and available for sale
securities, which consist mainly of U.S. government and federal agency
securities and CMO's and asset-backed securities. These liquid assets had a
fair value of $3.03 billion at March 31, 1996 and at December 31, 1995. The
available for sale bank portfolio included an unrealized net gain of $4.3
million at March 31, 1996 and $30.1 million at December 31, 1995.
In February 1996, the Board of Directors authorized the Company to purchase
up to 2,000,000 shares of common stock in either the open market or privately
negotiated transactions, to be used for employee benefit programs and stock
dividends. At March 31, 1996, the Company had acquired 249,244 shares under
this authorization.
The Company (on a consolidated basis) had an equity to asset ratio of 9.53%
based on 1996 average balances. As shown in the following table, the Company's
capital exceeded the minimum risk-based capital and leverage requirements of
the regulatory agencies:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
---------- ------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Risk-Adjusted Assets............................. $5,984,581 $6,045,112
Tier I Capital................................... 776,297 756,452
Total Capital.................................... 846,681 829,784
Tier I Capital Ratio............................. 12.97% 12.51%
Total Capital Ratio.............................. 14.15% 13.73%
Leverage Ratio................................... 8.33% 8.27%
</TABLE>
The Company's cash and cash equivalents (defined as "Cash and due from
banks") were $745.9 million at March 31, 1996, a decrease of $29.0 million
from December 31, 1995. Contributing to the net cash outflow were a net
decrease of $106.5 million in demand deposits and $40.4 million in purchases
of treasury stock. In addition, purchases of investment securities were $334.3
million, partially offset by $295.4 million in proceeds realized from sales
and maturities. Partially offsetting these net outflows were an $85.9 million
net increase in borrowings of federal funds purchased and repurchase
agreements and $65.1 million generated from operating activities. Total assets
and core deposits decreased slightly, $68.3 million and $123.5 million,
respectively, compared to December 31, 1995 balances.
The Company has various commitments and contingent liabilities which are
properly not reflected on the balance sheet. Loan commitments (excluding lines
of credit related to credit card loan agreements) totaled approximately $2.07
billion, standby letters of credit totaled $130.4 million, and commercial
letters of credit totaled $27.1 million at March 31, 1996. The Company has
little risk exposure in off-balance-sheet derivative contracts. The notional
value of these contracts (interest rate and foreign exchange rate contracts)
was $163.3 million at March 31, 1996. The current credit exposure (or
replacement cost) across all off-balance-sheet derivative contracts covered by
the risk-based capital standards was $3.8 million at March 31, 1996.
Management does not anticipate any material losses to arise from these
contingent items and believes there are no material commitments to extend
credit that represent risks of an unusual nature.
15
<PAGE>
SCHEDULE 7
COMMERCE BANCSHARES, INC. AND SUBSIDIARIES
COMPARISON OF KEY RATIOS AND SELECTED MARKET DATA
(UNAUDITED)
COMPARISON OF KEY RATIOS
<TABLE>
<CAPTION>
1996 1995
----- -----
<S> <C> <C>
RATIOS--THREE MONTHS ENDED MARCH 31:
(Based on average balance sheets):
Loans and leases to deposits...................................... 66.44% 66.28%
Non-interest bearing deposits to total deposits................... 19.40 19.67
Equity to loans and leases........................................ 17.03 16.51
Equity to deposits................................................ 11.32 10.94
Equity to total assets............................................ 9.53 9.32
Return on total assets............................................ 1.16 1.25
Return on realized stockholders' equity........................... 12.63 12.50
Return on total stockholders' equity.............................. 12.17 13.36
(Based on end-of-period data):
Tier I capital ratio.............................................. 12.97 14.61
Total capital ratio............................................... 14.15 15.83
Leverage ratio.................................................... 8.33 9.90
Efficiency ratio.................................................. 62.84 62.99
</TABLE>
SELECTED MARKET DATA*
MARCH 31, 1996
<TABLE>
<CAPTION>
LOANS
COMMERCE BANK PRIMARY MARKET LOCATIONS SITES ASSETS DEPOSITS AND LEASES
- -------------------------------------- ----- ---------- ---------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
St. Louis Region........................ 73 $3,224,709 $2,778,272 $1,851,322
Kansas City Region...................... 59 2,980,688 2,194,734 1,398,494
Springfield/Joplin...................... 34 1,050,146 953,170 647,770
Peoria/Bloomington...................... 22 923,887 741,567 433,044
Wichita................................. 21 738,565 609,164 379,485
Columbia................................ 17 371,523 342,919 281,089
St. Joseph.............................. 3 317,460 275,374 186,085
Manhattan/Hays.......................... 8 259,150 221,320 103,746
</TABLE>
- --------
*Balances have not been reduced for inter-company activity.
16
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from
Commerce Bancshares, Inc. 3/31/96 Form 10-Q and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 745,877
<INT-BEARING-DEPOSITS> 0<F1>
<FED-FUNDS-SOLD> 515,424
<TRADING-ASSETS> 11,494
<INVESTMENTS-HELD-FOR-SALE> 2,565,309<F2>
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 5,298,064<F3>
<ALLOWANCE> 98,666
<TOTAL-ASSETS> 9,505,651
<DEPOSITS> 8,077,174
<SHORT-TERM> 448,806
<LIABILITIES-OTHER> 81,094
<LONG-TERM> 14,455
0
0
<COMMON> 187,827
<OTHER-SE> 696,295
<TOTAL-LIABILITIES-AND-EQUITY> 9,505,651
<INTEREST-LOAN> 115,516
<INTEREST-INVEST> 38,588<F4>
<INTEREST-OTHER> 7,882
<INTEREST-TOTAL> 162,074
<INTEREST-DEPOSIT> 66,556
<INTEREST-EXPENSE> 72,560
<INTEREST-INCOME-NET> 89,514
<LOAN-LOSSES> 5,553
<SECURITIES-GAINS> 1,224
<EXPENSE-OTHER> 78,608
<INCOME-PRETAX> 42,149
<INCOME-PRE-EXTRAORDINARY> 27,283
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,283
<EPS-PRIMARY> .74
<EPS-DILUTED> 0
<YIELD-ACTUAL> 4.33<F5>
<LOANS-NON> 16,161
<LOANS-PAST> 20,826
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 98,537
<CHARGE-OFFS> 7,317
<RECOVERIES> 1,893
<ALLOWANCE-CLOSE> 98,666
<ALLOWANCE-DOMESTIC> 98,666
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
<FN>
<F1>Certificates of deposit of $348,000 are included in Investments-Held-
For-Sale.
<F2>Excludes non-marketable investment securities of $33,032,000.
<F3>Gross of allowance for loan losses.
<F4>Excludes interest of $88,000 on trading account securities.
<F5>Yield is computed on a tax equivalent basis.
</FN>
</TABLE>
