UNITED STATES
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 20, 1998
DEPOSIT GUARANTY CORP.
(Exact Name Of Registrant As Specified In Charter)
Commission File Number 0-4518
Mississippi 64-0472169
- -------------------------------- --------------
(State or other Jurisdiction of (IRS Employer Identification
Incorporation or Organization) Number)
210 East Capitol Street, Jackson, MS 39201
(Address Of Principal Executive Offices)
(Zip Code)
(Registrant's Telephone Number): (601) 354-8564
N/A
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(Former name or former address, if changed since last report.)
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ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits.
The following exhibits are filed as part of this report:
Exhibit No. Description
- ------------ -------------------------------------------
99.1 Press Release dated January 20, 1998
99.2 Analyst information dated January 20, 1998
SIGNATURE
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.
DEPOSIT GUARANTY CORP.
-------------------------
(Registrant)
DATE: January 29, 1998 By: /s/Stephen E. Barker
------------------------
Stephen E. Barker
Controller and Principal
Accounting Officer and
Authorized Officer
CONTACT: Pam Kloha January 20, 1998
Assistant vice president
(601) 968-4759 FOR IMMEDIATE RELEASE
Deposit Guaranty Corp. (DEP) reports record earnings
JACKSON, Miss.--(DEP)--Deposit Guaranty Corp.'s net income for the fourth
quarter of 1997, was $24.5 million compared to $19.5 million for the same period
in 1996. Basic earnings per share for the fourth quarter of 1997 increased 20
percent to $.60 compared to $.50 for the fourth quarter of 1996. Net income for
the fourth quarter of 1996 included an after-tax accrual of $2.4 million for the
cost of a restructuring plan to consolidate the Company's four separately
chartered bank subsidiaries into one charter. The increase in fourth quarter
1997 earnings also resulted from increases in net interest income and
noninterest related sources of income. Net interest income increased as a result
of an 8 percent growth in average interest-earning assets, while noninterest
income increased $5.8 million, or 19 percent.
Deposit Guaranty Corp.'s net income for the year ended December 31, 1997, was
$92.3 million compared to $83.6 million for the same period in 1996. Basic
earnings per share for 1997 were $2.25 compared to $2.16 for 1996. On a cash
basis, excluding the effects of purchase accounting related intangible
amortization, earnings per share rose 8% from $2.31 for 1996 to $2.49 for 1997.
Deposit Guaranty's return on average assets for 1997 was 1.37 percent compared
to 1.39 percent for the same period in 1996. Return on average equity for 1997
was 15.10 percent compared to 15.15 percent for the same period in 1996.
Deposit Guaranty's total assets were $6.9 billion at December 31, 1997, up from
$6.4 billion at December 31, 1996. Stockholder's equity was $635 million at
December 31, 1997, compared to $581 million at December 31, 1996.
On December 7, 1997, the Company entered into a definitive agreement with First
American Corporation, a $10.9 billion asset financial services company,
providing for the merger of the Company with and into First American in a
tax-free exchange of common stock. The merger will be accounted for as a pooling
of interests transaction. First American, located in Nashville,
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Tennessee, will exchange 1.17 shares of its common stock for each of the issued
and outstanding shares of Company common stock. The merger is expected to be
consummated during the second quarter of 1998.
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<CAPTION>
Financial Highlights
Deposit Guaranty Corp. and Subsidiaries
- --------------------------------------------
(Dollars in Thousands Except Per Share Data) Fourth
Quarter
1997 1996 1997-1996
--------------------------------------------------- --------- ---------
Fourth Third Second First Fourth Percent
Quarter Quarter Quarter Quarter Quarter Variance
------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Earnings Summary
Net interest income $71,421 $71,448 $70,281 $71,446 $65,637 8.8 %
Provision for possible loan losses 1,875 1,875 1,875 1,875 1,335 40.4
Other operating income 36,134 35,076 31,742 30,651 30,314 19.2
Other operating expense 68,670 69,228 66,833 66,316 65,482 4.9
Net income 24,475 23,263 21,929 22,613 19,485 25.6
Net income per share - basic 0.60 0.57 0.54 0.54 0.50 20.0
- diluted 0.59 0.57 0.53 0.53 0.50 18.0
Cash earnings per share* 0.66 0.64 0.60 0.59 0.54 22.2
Balance Sheet Summary
Total assets $6,939,727 $6,839,432 $6,688,542 $6,774,465 $6,382,897 8.7 %
Earning assets 6,103,429 5,936,351 5,874,873 6,000,450 5,638,879 8.2
Loans 4,431,683 4,353,431 4,273,777 4,255,996 3,979,877 11.4
Total securities 1,599,479 1,526,020 1,558,144 1,680,895 1,607,125 (0.5)
Total deposits 5,373,962 5,283,351 5,315,801 5,432,432 5,025,749 6.9
Long-term debt 186,397 176,444 99,426 99,414 99,405 87.5
Stockholders' equity 635,238 624,086 600,745 577,026 581,266 9.3
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Average Balances:
Total assets $6,771,870 $6,720,388 $6,625,501 $6,761,934 $6,160,667 9.9 %
Earning assets 5,976,348 5,954,755 5,900,454 6,016,934 5,510,838 8.4
Loans 4,316,607 4,370,724 4,249,682 4,227,590 3,903,025 10.6
Total securities 1,616,797 1,547,722 1,610,348 1,714,237 1,442,534 12.1
Total deposits 5,284,912 5,284,382 5,298,652 5,358,507 4,865,635 8.6
Long-term debt 181,637 130,750 99,419 99,405 99,401 82.7
Stockholders' equity 625,419 612,775 575,924 630,521 581,960 7.5
Selected Ratios
Return on average assets 1.43 1.37 1.33 1.36 1.26
Return on average stockholders' 15.53 15.06 15.27 14.55 13.32
equity
Net interest margin - tax equivalent 4.91 4.90 4.90 4.91 4.89
Efficiency ratio* 59.75 61.08 61.73 61.20 64.92
Average loans to deposits 81.68 82.71 80.20 78.89 80.22
Leverage ratio 7.47 7.28 7.31 7.17 8.23
Allowance for possible loan losses
to loans 1.46 1.50 1.63 1.63 1.63
Nonperforming assets to loans plus
other real estate 0.59 0.65 0.74 0.62 0.56
Net charge-offs to average
loans 0.05 0.32 0.17 0.14 0.09
Common stock data
Cash dividends declared per share $0.23 $0.20 $0.20 $0.20 $0.20 15.0 %
Average shares outstanding 40,819,681 40,836,406 40,915,591 42,200,610 38,985,278 4.7
End of period shares outstanding 40,830,231 40,813,741 40,781,431 40,743,822 39,185,394 4.2
Book value per share $15.56 $15.29 $14.73 $14.16 $14.83 4.9
</TABLE>
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Twelve Months Ended
December 31,
----------------------------------
Percent
1997 1996 Variance
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Earnings Summary
Net interest income $284,596 $249,534 14.1%
Provision for possible loan losses 7,500 5,340 40.4
Other operating income 133,603 117,245 14.0
Other operating expense 271,047 237,208 14.3
Net income 92,280 83,610 10.4
Net income per share - basic 2.25 2.16 4.2
- diluted 2.23 2.14 4.2
Cash earnings per share* 2.49 2.31 7.8
Balance Sheet Summary
Total assets 6,939,727 6,382,897 8.7%
Earning assets 6,103,429 5,638,879 8.2
Loans 4,431,683 3,979,877 11.4
Total securities 1,599,479 1,607,125 (0.5)
Total deposits 5,373,962 5,025,749 6.9
Long-term debt 186,397 99,405 87.5
Stockholders' equity 635,238 581,266 9.3
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Average Balances:
Total assets 6,719,145 6,026,548 11.5%
Earning assets 5,961,991 5,395,343 10.5
Loans 4,291,612 3,774,490 13.7
Total securities 1,621,805 1,424,085 13.9
Total deposits 5,305,687 4,750,894 11.7
Long-term debt 128,036 67,888 88.6
Stockholders' equity 611,252 551,754 10.8
Selected Ratios
Return on average assets 1.37% 1.39%
Return on average stockholders'
equity 15.10 15.15
Net interest margin - tax equivalent 4.90 4.77
Efficiency ratio* 60.92 62.08
Average loans to deposits 80.89 79.45
Leverage ratio 7.47 8.23
Allowance for possible loan losses
to loans 1.46 1.63
Nonperforming assets to loans plus
other real estate 0.59 0.56
Net charge-offs to average
loans 0.29 0.10
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Common stock data
Cash dividends declared per share 0.83 0.72 15.4%
Average shares outstanding 41,082,356 38,760,192 6.0
End of period shares outstanding 40,830,231 39,185,394 4.2
Book value per share 15.56 14.83 4.9
* Excludes the effects of the amortization of goodwill and core deposit
intangibles.
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<TABLE>
<CAPTION>
Noninterest Income and Expense
Deposit Guaranty Corp. and Subsidiaries
(Dollars in Thousands Except Per Share Data)
Twelve Months Ended
1997 1996 December 31,
-------------------------------------------------- -------- ---------------------
Fourth Third Second First Fourth
Quarter Quarter Quarter Quarter Quarter 1997 1996
-------------------------------------------------- -------- ---------------------
Other operating income
<S> <C> <C> <C> <C> <C> <C> <C>
Service charges on deposit accounts $11,054 $10,961 $10,169 $9,959 $9,579 $42,143 $35,584
Fees for trust services 5,093 4,664 4,664 4,663 4,812 19,084 16,413
Securities available for sale gains 622 838 540 86 38 2,086 118
Other service charges, commissions
and fees 17,446 16,430 14,589 14,802 14,533 63,267 56,624
Other income 1,919 2,183 1,780 1,141 1,352 7,023 8,506
------- ------- ------- ------- ------- -------- --------
Total other operating income $36,134 $35,076 $31,742 $30,651 $30,314 $133,603 $117,245
======= ======= ======= ======= ======= ======== ========
Other operating expense
Salaries and employee benefits $33,808 $35,119 $35,738 $35,127 $35,224 $139,792 $129,660
Net occupancy expense 5,104 4,969 4,748 4,702 4,460 19,523 16,073
Equipment expense 5,171 5,049 4,793 5,070 4,791 20,083 17,618
Service fees 5,214 4,518 4,427 3,269 4,801 17,428 16,237
Communication 3,221 3,045 3,125 3,039 2,815 12,430 10,607
FDIC assessment 185 168 172 164 1 689 94
Advertising and public relations 2,945 2,830 2,590 2,486 2,095 10,851 9,484
Other expense 13,022 13,530 11,240 12,459 11,295 50,251 37,435
------- ------- ------- ------- ------- -------- --------
Total other operating expense $68,670 $69,228 $66,833 $66,316 $65,482 $271,047 $237,208
======= ======= ======= ======= ======= ======== ========
</TABLE>
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<TABLE>
<CAPTION>
Comparative Average Balances-Yields and Rates
Deposit Guaranty Corp. and Subsidiaries
(Dollars in Thousands-Tax Equivalent)
Three Months Ended Three Months Ended Three Months Ended
December 31, September 30, June 30, 1997
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Average Income/ Yield/ Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balance Expense Rate Balance Expense Rate
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Assets
Interest-earning assets:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans, net of unearned income $4,316,607 $94,199 8.66% $4,370,724 $96,178 8.73% $4,249,682 $92,650 8.74%
Investment securities:
Taxable 178,587 3,989 8.93 178,925 3,505 7.84 160,949 2,909 7.23
Exempt from Federal income tax 291 3 4.12 416 2 1.92 105 3 11.43
Securities available for sale:
Taxable 1,271,590 21,934 6.90 1,202,271 20,376 6.78 1,282,103 21,417 6.68
Exempt from Federal income tax 166,329 3,962 9.53 166,110 3,534 8.51 167,191 3,810 9.12
Trading account securities 5,149 85 6.55 4,239 66 6.18 4,566 80 7.02
Federal funds sold and securities
purchased under agreements to resell 30,041 449 5.98 28,805 427 5.93 33,263 560 6.66
Interest-bearing bank balances 7,754 104 5.38 3,265 46 5.65 2,595 36 5.49
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Total interest-earning assets 5,976,348 124,725 8.37 5,954,755 124,134 8.36 5,900,454 121,465 8.26
Noninterest-earning assets:
Cash and due from banks 366,737 353,389 334,815
<PAGE>
Bank premises and equipment 171,751 170,181 165,887
Other assets 317,770 311,225 309,905
Allowance for possible loan losses (64,230) (70,412) (70,147)
Market valuation for securities available 3,494 1,250 (15,413)
for sale
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Total assets $6,771,870 $6,720,388 $6,625,501
======================================================================================
Liabilities
Interest-bearing liabilities:
Interest-bearing deposits $4,050,231 $40,705 3.99 $4,102,866 $41,036 3.97 $4,133,845 $40,897 3.97
Federal funds purchased, securities sold
under agreements to repurchase and
other short-term borrowings 567,851 7,393 5.21 582,964 7,759 5.32 545,282 6,955 5.05
Long-term debt 181,637 3,038 6.64 130,750 2,215 6.72 99,419 1,580 6.37
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Total interest-bearing liabilities 4,799,719 51,136 4.27 4,816,580 51,010 4.25 4,778,546 49,432 4.15
Noninterest-bearing liabilities:
Deposits 1,234,681 1,181,516 1,164,807
Other liabilities 112,051 109,517 106,224
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Total liabilities 6,146,451 6,107,613 6,049,577
Stockholders' equity 625,419 612,775 575,924
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Total liabilities and stockholders' equity $6,771,870 $6,720,388 $6,625,501
======================================================================================
Net interest income/margin-tax equivalent 73,589 4.91% 73,124 4.90% 72,033 4.90%
======================================================================================
<PAGE>
Tax equivalent adjustment:
Loans 528 538 585
Investment securities 1 1 1
Securities available for sale 1,628 1,128 1,154
Other 11 9 12
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Total tax equivalent adjustment 2,168 1,676 1,752
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Net interest income $71,421 $71,448 $70,281
=======================================================================================
</TABLE>
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<TABLE>
<CAPTION>
Comparative Average Balances-Yields and Rates
Deposit Guaranty Corp. and Subsidiaries - (cont.)
(Dollars in Thousands-Tax Equivalent)
Three Months Ended Three Months Ended
March 31, 1997 December 31, 1996
---------------------------------------------------------------------
Average Income/ Yield/ Average Income/ Yield/
Balance Expense Rate Balanc Expense Rate
---------------------------------------------------------------------
Asset
Interest-earning assets:
<S> <C> <C> <C> <C> <C> <C>
Loans, net of unearned income $ 4,227,590 $ 91,208 8.75% $ 3,903,025 $ 85,995 8.77%
Investment securities:
Taxable 142,791 3,128 8.76 147,699 2,623 7.10
Exempt from Federal income tax 105 2 7.62 44 2 18.18
Securities available for sale:
Taxable 1,406,706 23,459 6.67 1,118,242 18,861 6.75
Exempt from Federal income tax 164,635 3,911 9.50 176,549 3,984 9.03
Trading account securities 4,069 35 3.46 5,432 138 10.11
Federal funds sold and securities purchased
under agreements to resell 69,773 914 5.24 158,460 2,122 5.36
Interest-bearing bank balances 1,265 7 2.34 1,387 22 6.34
--------------------------------------------------------------------
Total interest-earning assets 6,016,934 122,664 8.27 5,510,838 113,747 8.21
Noninterest-earning assets:
Cash and due from banks 348,373 305,406
<PAGE>
Bank premises and equipment 164,621 148,909
Other assets 297,956 246,614
Allowance for possible loan losses (69,095) (61,807)
Market valuation for securities available 3,145 10,707
for sale
--------------------------------------------------------------------
Total assets $ 6,761,934 $ 6,160,667
====================================================================
Liabilities
Interest-bearing liabilities:
Interest-bearing deposits $ 4,219,352 $ 41,140 3.95 $ 3,835,065 $ 38,653 4.01
Federal funds purchased, securities sold
under agreements to repurchase and
other
short-term borrowings 554,006 6,759 4964.89
Long-term debt 99,405 1,477 6.03 99,401 1,511 6.08
--------------------------------------------------------------------
Total interest-bearing liabilities 4,872,763 49,376 4.11 4,431,636 46,240 4.15
Noninterest-bearing liabilities:
Deposits 1,139,155 1,030,570
Other liabilities 119,495 116,501
--------------------------------------------------------------------
Total liabilities 6,131,413 5,578,707
Stockholders' equity 630,521 581,960
--------------------------------------------------------------------
Total liabilities and stockholders' equity $ 6,761,934 $ 6,160,667
====================================================================
Net interest income/margin-tax equivalent 73,288 4.91% 67,507 4.89%
=====================================================================
<PAGE>
Tax equivalent adjustment:
Loans 569 613
Investment securities 1 1
Securities available for sale 1,259 1,236
Other 13 20
---------------------------------------------------------------------
Total tax equivalent adjustment 1,842 1,870
---------------------------------------------------------------------
Net interest income $ 71,446 $ 65,637
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