<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
Commission File Number 1-6906
FIRST SECURITY CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 87-6118148
(State of incorporation) (I.R.S. Employer Identification No.)
79 South Main, P.O. Box 30006
Salt Lake City, Utah 84130-0006
(Address of principal executive offices) (Zip Code)
(801) 246-5706
(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.
Yes [X] No
As of July 31, 1995, outstanding shares of Common Stock, par value $1.25 were
49,983,175 shares (net of 387,032 treasury shares).
<PAGE>
FIRST SECURITY CORPORATION
INDEX
Part I. Financial Information
Item 1. Financial Statements:
Condensed Consolidated Income Statements
Three Months and Year-To-Date Six Months Ended
June 30, 1995 and 1994
Condensed Consolidated Balance Sheets
June 30, 1995, December 31, 1994, and June 30, 1994
Condensed Consolidated Statements of Cash Flows
Year-To-Date Six Months Ended
June 30, 1995 and 1994
Notes to Condensed Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations:
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Supplemental Tables:
Financial Highlights, Risk-Based Capital Ratios
Rate / Volume Analysis
Loans
Mergers and Acquisitions
Part II. Other Information
Item 1. Legal Proceedings
Item 6. Exhibits and Reports on Form 8-K
Signatures
Exhibit 11. Computation of Earnings Per Share
Exhibit 27. Financial Data Schedule
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
FIRST SECURITY CORPORATION
CONDENSED CONSOLIDATED INCOME STATEMENTS
(in thousands, except per share data; unaudited)
<CAPTION>
Three Months Year-To-Date 6 Months
For the Periods Ended June 30, 1995 and 1994 1995 1994 %Chg 1995 1994 %Chg
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------- ---------- ---------- ------- ---------- ---------- -------
INTEREST INCOME:
Interest & fees on loans ................................... 191,075 146,781 30.2 369,537 282,784 30.7
Federal funds sold & securities purchased .................. 1,869 369 406.5 2,807 1,076 160.9
Interest-bearing deposits in other banks ................... 12 16 -25.0 30 46 -34.8
Trading account securities ................................. 5,317 11,427 -53.5 13,452 20,953 -35.8
Securities available for sale .............................. 31,221 27,019 15.6 60,482 50,268 20.3
Securities held to maturity ................................ 3,574 3,193 11.9 7,310 6,116 19.5
- ----------------------------------------------------------- ---------- ---------- ------- ---------- ---------- -------
TOTAL INTEREST INCOME 233,068 188,805 23.4 453,618 361,243 25.6
- ----------------------------------------------------------- ---------- ---------- ------- ---------- ---------- -------
INTEREST EXPENSE:
Deposits ................................................... 76,535 48,701 57.2 142,523 95,894 48.6
Short-term borrowings ...................................... 25,853 19,042 35.8 59,231 29,708 99.4
Long-term debt ............................................. 12,078 4,717 156.1 24,200 9,029 168.0
- ----------------------------------------------------------- ---------- ---------- ------- ---------- ---------- -------
TOTAL INTEREST EXPENSE 114,466 72,460 58.0 225,954 134,631 67.8
- ----------------------------------------------------------- ---------- ---------- ------- ---------- ---------- -------
NET INTEREST INCOME:
NET INTEREST INCOME 118,602 116,345 1.9 227,664 226,612 0.5
Provision for loan losses .................................. 3,742 343 991.0 6,590 171 NM
- ----------------------------------------------------------- ---------- ---------- ------- ---------- ---------- -------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 114,860 116,002 -1.0 221,074 226,441 -2.4
- ----------------------------------------------------------- ---------- ---------- ------- ---------- ---------- -------
NONINTEREST INCOME:
Service charges on deposit accounts ........................ 16,790 15,610 7.6 33,157 30,470 8.8
Other service charges, collections, commissions, & fees .... 8,645 6,859 26.0 16,062 13,116 22.5
Bankcard servicing fees & third-party processing fees ...... 5,998 8,467 -29.2 11,980 17,178 -30.3
Fiduciary (trust) commissions & fees ....................... 5,192 5,105 1.7 10,222 9,958 2.7
Insurance commissions & fees ............................... 3,466 3,161 9.6 7,161 5,762 24.3
Sales of loans & servicing rights gains (losses) ........... 12,906 5,789 122.9 26,320 9,136 188.1
Servicing fees on loans sold ............................... 6,021 5,262 14.4 12,640 6,756 87.1
Securities gains (losses) .................................. 29 (247) NM 932 2 NM
Trading account securities gains (losses) .................. (377) (3,188) 88.2 5,296 (6,498) NM
Other ...................................................... 5,608 1,658 238.2 11,380 3,465 228.4
- ----------------------------------------------------------- ---------- ---------- ------- ---------- ---------- -------
TOTAL NONINTEREST INCOME 64,278 48,476 32.6 135,150 89,345 51.3
- ----------------------------------------------------------- ---------- ---------- ------- ---------- ---------- -------
TOTAL INCOME 179,138 164,478 8.9 356,224 315,786 12.8
- ----------------------------------------------------------- ---------- ---------- ------- ---------- ---------- -------
NONINTEREST EXPENSES:
Salaries & employee benefits ............................... 63,624 54,246 17.3 125,812 103,557 21.5
Advertising ................................................ 1,937 2,573 -24.7 4,014 3,917 2.5
Amortization of intangibles ................................ 4,682 4,044 15.8 9,733 4,805 102.6
Bankcard interbank interchange ............................. 4,103 3,659 12.1 8,574 7,330 17.0
Furniture & equipment ...................................... 8,011 7,747 3.4 17,234 14,421 19.5
Insurance .................................................. 6,070 6,136 -1.1 12,058 11,482 5.0
Occupancy, net ............................................. 6,911 6,366 8.6 13,940 12,117 15.0
Other real estate expense & loss provision (recovery) ...... (522) (2,495) 79.1 (1,021) (2,467) 58.6
Stationery & supplies ...................................... 4,380 3,773 16.1 8,450 7,776 8.7
Telephone .................................................. 3,253 2,808 15.8 6,353 5,258 20.8
Other ...................................................... 18,913 20,187 -6.3 36,946 40,430 -8.6
- ----------------------------------------------------------- ---------- ---------- ------- ---------- ---------- -------
TOTAL NONINTEREST EXPENSES 121,362 109,044 11.3 242,093 208,626 16.0
- ----------------------------------------------------------- ---------- ---------- ------- ---------- ---------- -------
INCOME BEFORE INCOME TAX PROVISION 57,776 55,434 4.2 114,131 107,160 6.5
- ----------------------------------------------------------- ---------- ---------- ------- ---------- ---------- -------
PROVISION FOR INCOME TAXES:
Operating earnings ......................................... 21,533 20,304 6.1 41,953 38,782 8.2
Securities gains (losses) .................................. 10 (90) NM 345 (4) NM
- ----------------------------------------------------------- ---------- ---------- ------- ---------- ---------- -------
TOTAL PROVISION FOR INCOME TAXES 21,543 20,214 6.6 42,298 38,778 9.1
- ----------------------------------------------------------- ---------- ---------- ------- ---------- ---------- -------
NET INCOME 36,233 35,220 2.9 71,833 68,382 5.0
=========================================================== ========== ========== ======= ========== ========== =======
Preferred stock dividend requirement ....................... 9 10 -10.0 18 20 -10.0
- ----------------------------------------------------------- ---------- ---------- ------- ---------- ---------- -------
NET INCOME APPLICABLE TO COMMON STOCK 36,224 35,210 2.9 71,815 68,362 5.1
=========================================================== ========== ========== ======= ========== ========== =======
EARNINGS PER COMMON SHARE:
Earnings per common share: primary ......................... 0.72 0.71 1.4 1.42 1.38 2.9
Earnings per common share: fully diluted ................... 0.71 0.71 0.0 1.41 1.38 2.2
Common stock shares outstanding: average primary ........... 50,710 49,687 2.1 50,638 49,502 2.3
Common stock shares outstanding: average fully diluted ..... 50,850 49,845 2.0 50,780 49,662 2.3
=========================================================== ========== ========== ======= ========== ========== =======
CASH DIVIDENDS PAID OR ACCRUED PER SHARE:
Preferred Stock ($3.15 annual rate) ........................ 0.79 0.79 0.0 3.15 3.15 0.0
Common stock ............................................... 0.28 0.26 7.7 0.56 0.52 7.7
=========================================================== ========== ========== ======= ========== ========== =======
<FN>
See "Notes to Condensed Consolidated Financial Statements".
</TABLE>
<PAGE>
<TABLE>
FIRST SECURITY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands; unaudited)
<CAPTION>
June 30 December 31 June 30 Jun/Jun
1995 1994 1994 % Chg
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------- ----------- ----------- ----------- -------
ASSETS:
Cash & due from banks .................................................. 665,066 678,353 763,432 -12.9
Federal funds sold & securities purchased under resale agreements ...... 118,158 43,551 79,459 48.7
- ----------------------------------------------------------------------- ----------- ----------- ----------- -------
Total cash & cash equivalents 783,224 721,904 842,891 -7.1
Interest-bearing deposits in other banks ............................... 1,116 1,585 1,195 -6.6
Trading account securities ............................................. 477,560 553,826 725,211 -34.1
Securities available for sale, at fair value ........................... 2,086,509 1,993,797 2,127,690 -1.9
(Amortized Cost: $2,090,829; $2,080,408; $2,169,851; respectively)
Securities held to maturity, at cost ................................... 251,982 252,622 268,114 -6.0
(Fair value: $254,967; $249,971; $269,397; respectively)
- ----------------------------------------------------------------------- ----------- ----------- ----------- -------
Loans, net of unearned income .......................................... 8,356,657 8,173,678 7,282,550 14.7
(Unearned income: $6,030; $7,380; $11,987; respectively)
Reserve for loan losses ................................................ (130,388) (133,855) (132,714) -1.8
- ----------------------------------------------------------------------- ----------- ----------- ----------- -------
Total loans, net 8,226,269 8,039,823 7,149,836 15.1
- ----------------------------------------------------------------------- ----------- ----------- ----------- -------
Premises & equipment, net .............................................. 200,670 188,418 164,074 22.3
Accrued income receivable .............................................. 81,833 85,655 65,836 24.3
Other real estate & other foreclosed assets ............................ 4,340 3,352 8,387 -48.3
Other assets ........................................................... 167,307 141,801 220,946 -24.3
- ----------------------------------------------------------------------- ----------- ----------- ----------- -------
Goodwill ............................................................... 103,648 106,827 92,131 12.5
Mortgage servicing rights .............................................. 39,181 56,147 64,438 -39.2
Other intangible assets ................................................ 2,540 3,225 4,168 -39.1
- ----------------------------------------------------------------------- ----------- ----------- ----------- -------
Total intangible assets .............................................. 145,369 166,199 160,737 -9.6
- ----------------------------------------------------------------------- ----------- ----------- ----------- -------
TOTAL ASSETS 12,426,179 12,148,982 11,734,917 5.9
======================================================================= =========== =========== =========== =======
LIABILITIES:
Noninterest-bearing deposits ........................................... 1,748,031 1,719,388 1,843,559 -5.2
Interest-bearing deposits .............................................. 6,843,356 6,333,956 6,043,972 13.2
- ----------------------------------------------------------------------- ----------- ----------- ----------- -------
Total deposits 8,591,387 8,053,344 7,887,531 8.9
- ----------------------------------------------------------------------- ----------- ----------- ----------- -------
Federal funds purchased & securities sold under repurchase agreements .. 1,732,140 2,160,587 2,333,260 -25.8
U.S. Treasury demand notes ............................................. 32,959 33,552 23,022 43.2
Other short-term borrowings ............................................ 154,994 151,000 55,103 181.3
Accrued income taxes ................................................... 124,425 81,710 84,359 47.5
Accrued interest payable ............................................... 34,134 27,709 19,587 74.3
Other liabilities ...................................................... 98,790 65,911 161,025 -38.6
Long-term debt ......................................................... 666,858 685,426 312,005 113.7
Minority equity in subsidiaries ........................................ 298 269 259 15.1
- ----------------------------------------------------------------------- ----------- ----------- ----------- -------
TOTAL LIABILITIES 11,435,985 11,259,508 10,876,151 5.1
- ----------------------------------------------------------------------- ----------- ----------- ----------- -------
STOCKHOLDERS' EQUITY:
Preferred stockholders' equity: Series "A" $3.15 cumulative convertible 594 629 675 -12.0
(Shares outstanding: 11; 12; 13; respectively)
- ----------------------------------------------------------------------- ----------- ----------- ----------- -------
Common Stockholders' Equity:
Common stock: par value $1.25 ......................................... 62,949 62,446 62,323 1.0
(Shares outstanding: 50,324; 49,957; 49,859; respectively)
Paid-in surplus ........................................................ 148,520 142,928 136,928 8.5
Retained earnings ...................................................... 790,313 746,454 700,582 12.8
Net unrealized gain (loss) on securities available for sale ............ (2,884) (54,341) (26,548) -89.1
- ----------------------------------------------------------------------- ----------- ----------- ----------- -------
Subtotal 998,898 897,487 873,285 14.4
- ----------------------------------------------------------------------- ----------- ----------- ----------- -------
Common treasury stock, at cost ......................................... (9,298) (8,642) (15,194) -38.8
(Shares: 383; 362; 682; respectively)
- ----------------------------------------------------------------------- ----------- ----------- ----------- -------
Total common stockholders' equity 989,600 888,845 858,091 15.3
- ----------------------------------------------------------------------- ----------- ----------- ----------- -------
TOTAL STOCKHOLDERS' EQUITY 990,194 889,474 858,766 15.3
- ----------------------------------------------------------------------- ----------- ----------- ----------- -------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY 12,426,179 12,148,982 11,734,917 5.9
======================================================================= =========== =========== =========== =======
<FN>
See "Notes to Condensed Consolidated Financial Statements".
</TABLE>
<PAGE>
<TABLE>
FIRST SECURITY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands; unaudited)
<CAPTION>
Year-To-Date 6 Months
For the Periods Ended June 30, 1995 and 1994 1995 1994
<S> <C> <C>
- ----------------------------------------------------------------------- -------------- --------------
NET CASH PROVIDED BY (USED IN) BY OPERATING ACTIVITIES 444,421 349,513
- ----------------------------------------------------------------------- -------------- --------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities available for sale ................... 7,288 476,399
Redemption of matured securities available for sale .................... 507,171 288,157
Redemption of matured securities held to maturity ...................... 42,409 61,255
Purchases of securities available for sale ............................. (558,558) (1,403,514)
Purchases of securities held to maturity ............................... (7,016) (32,910)
Net (increase) decrease in interest-bearing deposits in other banks .... 694 15,266
Net (increase) decrease in loans ....................................... (418,067) (954,879)
Purchases of premises and equipment .................................... (19,134) (16,954)
Proceeds from sales of other real estate ............................... 4,450 19,807
Payments to improve other real estate .................................. (362) (1,275)
Net cash (paid for) received from acquisitions ......................... 603 (101,909)
- ----------------------------------------------------------------------- -------------- --------------
NET CASH USED IN INVESTING ACTIVITIES (440,522) (1,650,557)
- ----------------------------------------------------------------------- -------------- --------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits .................................... 538,043 290,677
Net increase (decrease) in Federal funds purchased, securities sold
under repurchase agreements, and U.S. Treasury demand notes .......... (429,040) 925,528
Proceeds from issuance of nonrecourse debt on leveraged leases ......... 0 0
Payments on nonrecourse debt on leveraged leases ....................... (13,564) (14,976)
Proceeds from issuance of long-term debt and short-term borrowings ..... 18 124,171
Payments on long-term debt and short-term borrowings ................... (14,826) (206,096)
Proceeds from issuance of common stock and sales of treasury stock ..... 8,170 5,202
Purchases of treasury stock ............................................ (3,405) (10,246)
Dividends paid ......................................................... (27,975) (25,356)
- ----------------------------------------------------------------------- -------------- --------------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 57,421 1,088,904
- ----------------------------------------------------------------------- -------------- --------------
NET CHANGE IN CASH AND CASH EQUIVALENTS 61,320 (212,140)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 721,904 1,055,031
- ----------------------------------------------------------------------- -------------- --------------
CASH AND CASH EQUIVALENTS, END OF PERIOD 783,224 842,891
======================================================================= ============== ==============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
- ----------------------------------------------------------------------- -------------- --------------
CASH PAID (RECEIVED) FOR:
Interest ............................................................. 219,529 132,473
Income taxes ......................................................... 29,038 32,122
======================================================================= ============== ==============
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Conversion of preferred shares to common shares:
Preferred shares converted ......................................... 298 544
Common shares issued ............................................... 3,615 6,597
Conversion value ................................................... 16 29
Transfer of loans to other real estate.................................. 3,887 7,257
Securities transferred from held to maturity to available for sale
in conjunction with adoption of SFAS No. 115 ......................... 0 1,417,217
Net unrealized gain (loss) on securities available for sale
(included in stockholders' equity) ................................... 51,497 26,548
Pooling-of-interests acquisitions:
Assets acquired ...................................................... 1,874 75,242
Liabilities assumed .................................................. 1,235 63,680
FSC shares issued .................................................... 134 842,118
Purchase acquisitions:
Fair value of assets acquired ........................................ 0 359,519
Liabilities assumed .................................................. 0 244,588
Cash paid for the capital stock ...................................... 0 116,233
======================================================================= ============== ==============
<FN>
See "Notes to Condensed Consolidated Financial Statements".
</TABLE>
<PAGE>
FIRST SECURITY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of management, the accompanying unaudited condensed
consolidated financial statements of First Security Corporation ("FSCO")
contain all adjustments (consisting of normal recurring accruals) necessary to
present fairly: FSCO's results of operations for the three months and the
year-to-date six months in the periods ended June 30, 1995 and 1994; FSCO's
financial position as of June 30, 1995, December 31, 1994, and June 30, 1994;
and cash flows for the year-to-date six months in the periods ended June 30,
1995 and 1994.
2. The results of operations for the three months and the year-to-date six
month periods ended June 30, 1995 and 1994 are not necessarily indicative of
the results to be expected for the full year.
3. FSCO's financial statements and commentary incorporate fair market values
for balances added from purchase transactions and historical values for
balances added from pooling-of-interests mergers, as well as earnings since
their acquisition, from 5 acquisitions completed in 1994 and 3 acquisitions
completed in year-to-date 1995 (see: Supplemental Tables "Mergers and
Acquisitions"). Under applicable accounting rules, those acquisitions
acquired as pooling-of-interests mergers were not material to FSCO's
consolidated operations, so historical amounts were not restated.
* On May 31, 1995, First Security Insurance, Inc. acquired CKC Insurance
(located in Salem, Oregon) with 1 office and $427 thousand in assets. This
acquisition was accounted for using the pooling-of-interests method of
accounting.
* The April 29, 1994 acquisition of CrossLand Mortgage Acquisition
Corporation ("CrossLand Mortgage") created $63.85 million in purchased
mortgage servicing rights and $85.05 million in goodwill carried as intangible
assets on FSCO's condensed consolidated balance sheets.
4. On July 17, 1995, FSCO issued $125 million of 7.00% Subordinated Notes due
July 15, 2005.
5. On July 31, 1995, FSCO securitized and sold $251 million of direct and
indirect auto loans and recognized a net after tax loss of $773 thousand.
FSCO will continue to service these loans for the investors.
# # #
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 2: Management's Discussion and Analysis of Results of Operations and
Financial Condition ("MDA")
ANALYSIS OF RESULTS OF OPERATIONS
First Security Corporation ("FSCO") earned net income totaling $71.83
million for the first six months of 1995, an increase of $3.45 million (5.0%)
from $68.38 million earned in the corresponding period in 1994 (see Financial
Statements: "Condensed Consolidated Income Statements"; and Supplemental
Tables "Financial Highlights"). Net income for year-to-date 1995 generated a
1.20% return on average assets ("ROAA") and a 15.29% return on average equity
("ROAE"), compared with a 1.31% ROAA and 16.12% ROAE for the year-ago period.
Fully-diluted earnings per share year to date were $1.41, up $0.03 (2.2%) from
$1.38 for the year-ago period.
Net income was $36.23 million for the second quarter of 1995, up $1.01
million (2.9%) from $35.22 million earned in the second quarter of 1994. Net
income for the quarter generated a 1.21% ROAA and a 14.91% ROAE, compared with
a 1.29% ROAA and 16.49% ROAE for the year-ago quarter. Fully-diluted earnings
per share for the quarter were $0.71, unchanged from the year-ago quarter.
FSCO's results of operations have been substantially impacted by recent
acquisitions (see: MDA "Mergers and Acquisitions"). As a result, FSCO's
results of operations for the year-to-date and second quarter of 1995 may not
be comparable with the corresponding periods for 1994.
Net Interest Income
Net interest income on a fully-taxable equivalent ("FTE") basis totaled
$231.56 million for year-to-date 1995, up $1.02 million (0.4%) from the year-
ago period, and was $120.48 million for the second quarter of 1995, up $2.17
million (1.8%) from the year-ago quarter (see: Supplemental Tables "Financial
Highlights" and "Rate / Volume Analysis"). Net interest income FTE for the
second quarter was up $9.39 million (8.5%) from the first quarter of 1995.
The net interest margin was 4.26% for the year to date, down from 4.85% for
the year-ago period, and was 4.45% for the second quarter, down from 4.79% for
the year-ago quarter. However, the 4.45% second quarter net interest margin
reversed the previous five-quarter downward trend, rising from a 4.06% low in
the first quarter of 1995. This first-to-second quarter increase was
primarily due to higher yields on interest-earning assets combined with lower
expenses associated with a 24.98% reduction in average short-term borrowed
funds, partially offset by higher overall deposit costs.
Provision for Loan Losses
The provision for loan losses totaled $6.59 million for year-to-date 1995,
up from $171 thousand for the year-ago period, and was $3.74 million for the
second quarter of 1995, up from $343 thousand for the year-ago quarter (see:
MDA "Interest-Earning Assets and Asset Quality - Reserve For Loan Losses"; and
Supplemental Tables "Financial Highlights - Reconciliation of the Reserve For
Loan Losses"). These increases were due to higher net loans charged off,
which totaled $10.06 million for year-to-date 1995, up $6.90 million (218.7%)
from the year-ago period, and were $4.96 million for the quarter, up $2.47
million (99.1%) from the year-ago quarter.
The ratio of net loan chargeoffs to average loans was near historical lows
at 0.25% for the year to date and 0.24% for the second quarter, although up
from 0.09% for the year-ago period and 0.14% for the year-ago quarter,
respectively, and 0.10% for all of 1994.
Noninterest Income
Noninterest income totaled $135.15 million for year-to-date 1995, up $45.81
million (51.3%) from the year-ago period, and was $64.28 million for the
second quarter of 1995, up $15.80 million (32.6%) from the year-ago quarter
(see: Financial Statements "Condensed Consolidated Income Statements"). This
increase was due in part to FSCO's continued emphasis on increasing and
diversifying its sources of noninterest income, plus the impact of CrossLand
Mortgage on real estate lending activities. During both the year to date and
second quarter, FSCO generated increases in every noninterest income category,
except in bankcard servicing fees & third-party processing fees where FSCO had
previously reduced its operations. The increases in the gains on investment
and trading account securities were due to FSCO's active securities management
strategies and improvements in the securities markets.
The acquisition of CrossLand Mortgage has further diversified FSCO's
noninterest income and increased the ratio of noninterest income to total
income for year-to-date 1995 to 37.25%, up from 28.28% for the year-ago
period.
Noninterest Expenses
Noninterest expenses totaled $242.09 million for year-to-date 1995, up
$33.47 million (16.0%) from the year-ago period, and were $121.36 million for
the second quarter of 1995, up $12.32 million (11.3%) from the year-ago
quarter (see: Financial Statements "Condensed Consolidated Income
Statements"). This increase was primarily due to volume-related growth and
acquisitions.
Noninterest expenses for the second quarter remained essentially unchanged
from the first quarter of 1995. This was a direct result of FSCO's commitment
to control costs.
FSCO's operating expense ratio (the ratio of noninterest expenses to the
sum of net interest income FTE and noninterest income) was 66.02% for year-to-
date 1995, compared with 65.22% for the year-ago period and 65.82% for all of
1994, and was 65.69% for the second quarter of 1995, compared with 65.38% for
the year-ago quarter.
FSCO has improved its operating expense ratio for two quarters in a row,
decreasing it by 126 basis points from 66.95% in the fourth quarter of 1994
and 66 basis points from 66.35% in the first quarter of 1995.
ANALYSIS OF FINANCIAL CONDITION
In the second quarter of 1995, FSCO continued to increase its interest-
earning assets, maintain strong asset quality, improve its liquidity, and
maintain a well-capitalized position, as compared with June 30, 1994 and
December 31, 1994.
FSCO's assets totaled $12.43 billion at June 30, 1995, up $691 million
(5.9%) from June 30, 1994, and up $277 million (2.3%) from December 31, 1994.
Total earning assets were $11.29 billion at quarter end, up $808 million
(7.7%) from one year ago, and up $273 million (2.5%) from the year end (see:
MDA "Interest-Earning Assets and Asset Quality"). Growth in the loan
portfolio was the primary factor for the increases. Fluctuations in other
assets and other liabilities were in part due to accounts receivable and
accounts payable related to unsettled transactions arising from the purchase
and sale of securities. Intangible assets were $145.37 million at June 30,
1995, down $15.37 million (9.6%) from June 30, 1994, and down $20.83 million
(12.5%) from December 31, 1994. These decreases were due to the effects of
ongoing amortization plus a reduction of the intangibles associated with the
sale of mortgage servicing rights.
FSCO's liabilities totaled $11.44 billion at June 30, 1995, up $560 million
(5.1%) from June 30, 1994, and up $176 million (1.6%) from December 31, 1994.
Total interest-bearing liabilities were $9.43 billion at quarter end, up $663
million (7.6%) from one year ago in support of loan growth, and essentially
unchanged from year end (see: MDA "Liquidity").
Stockholders' equity in FSCO increased to a record $990.19 million at June
30, 1995, up $131.43 million (15.3%) from June 30, 1994, and up $100.72
million (11.3%) from December 31, 1994 (see: MDA "Stockholders' Equity and
Capital Adequacy"). This growth was due to record earnings and an improvement
in the SFAS 115 net unrealized loss on securities available for sale (see:
Note 4. to Condensed Consolidated Financial Statements).
FSCO's financial condition is discussed in greater detail in the following
MDA sections "Interest-Earning Assets and Asset Quality", "Liquidity", and
"Stockholders' Equity and Capital Adequacy".
INTEREST-EARNING ASSETS and ASSET QUALITY
Loans
FSCO's borrowers reside primarily in states where FSCO has its banking
offices as well as in contiguous market areas. FSCO has policies and
procedures designed to maintain the quality of its loans. These include
setting underwriting standards for new credits and the continuous monitoring
and reporting of asset quality and adequacy of the reserve for loan losses.
These policies were discussed in greater detail in FSCO's 1994 Form 10-K:
"Interest-Earning Assets and Asset Quality - Loans".
FSCO's loan portfolio, net of unearned income but before the reserve for
loan losses, totaled $8.36 billion at June 30, 1995, up $1.07 billion (14.7%)
from June 30, 1994, and up $183 million (2.2%) from December 31, 1994 (see:
Supplemental Tables "Loans Outstanding"). The increase from one year ago was
due primarily to increased lending activity, especially in consumer loans and
residential mortgages, plus the positive impact of acquisitions.
The ratio of loans to assets was 67.25% at June 30, 1995, compared with
62.06% one year ago and 67.28% at year-end.
The components of FSCO's loan portfolio at June 30, 1995, compared with
June 30, 1994, and December 31, 1994, respectively, included:
* Commercial loans were $1.91 billion, up $269 million (16.4%) from one
year ago, and up $75 million (4.1%) from year end. This growth was due
primarily to a broad-based business expansion in FSCO's market areas with
increases in loans to customers of all sizes.
* Real estate secured loans were $3.29 billion, up $455 million (16.0%)
from one year ago, and up $151 million (4.8%) from year end. This growth was
due in large part to significant increases in residential construction loans
to builders and home equity loans. In addition, there was more modest
increases in commercial real estate and permanent residential real estate
loans. For balance sheet management purposes, FSCO did not retain all newly-
originated fixed-rate mortgage loans but continued to sell some of these loans
to secondary markets.
* Consumer loans were $2.78 billion, up $282 million (11.3%) from one year
ago, and remained essentially unchanged from year end. The increase from one
year ago was due primarily to growth in indirect auto loans, reflecting FSCO's
position as the leading consumer lender in the Corporation's FSCO's primary
market area.
Problem Assets
Problem assets were reduced to $34.12 million at June 30, 1995, down $8.06
million (19.1%) from June 30, 1994, and down $5.10 million (13.0%) from
December 31, 1994 (see: Supplemental Tables "Financial Highlights - Problem
Assets, - Selected Ratios"). These decreases were due to a healthy regional
economy and continued high loan underwriting standards. Despite a general
downward trend in problem assets since 1991, it has been FSCO's experience
that economic cycles and loan-specific events cause fluctuations in problem
assets, sometimes with little or no warning. FSCO carefully considers these
potential fluctuations in the analysis of its reserve for loan losses.
The ratio of total problem assets to total loans and ORE was 0.41% at
quarter end, down from 0.58% one year ago and 0.48% at year end.
The components of FSCO's problem assets at June 30, 1995, compared with
June 30, 1994, and December 31, 1994, respectively, included:
* Nonaccruing loans were $18.70 million, down $5.91 million (24.0%) from
one year ago, and down $5.17 million (21.6%) from year end. The ratio of
nonaccruing loans to total loans was 0.22%, down from 0.34% and 0.29%.
* ORE and other foreclosed assets were $4.34 million, down $4.05 million
(48.3%) from one year ago, but up $988 thousand (29.5%) from year end. The
decrease from one year ago was due in part to the resolution of older problem
assets, while the increase from year end was in part due to a decrease in the
ORE valuation reserve. ORE property values are reviewed at least annually,
and the portfolio is adjusted to the lower of cost or fair value less
estimated selling costs.
* Accruing loans past due 90 days or more were $11.08 million, up $1.89
million (20.6%) from one year ago, but down $925 thousand (7.7%) from year
end.
Potential problem loans identified by FSCO were $23.42 million at June 30,
1995, up $4.24 million (22.1%) from $19.18 at June 30, 1994, and up $10.32
million (76.7%) from $13.25 at December 31, 1994. The increase from one year
ago was due primarily to $3.77 million of potential problem loans identified
by CrossLand Mortgage, which was acquired by FSCO one year ago. The increase
from year end was due to a combination of agricultural and small commercial
loans plus the impact of CrossLand Mortgage. Potential problem loans
consisted primarily of small commercial loans, agricultural loans, and 1-4
residential term loans.
Reserve for Loan Losses
The reserve for loan losses was $130.39 million at June 30, 1995, down
$2.33 million (1.8%) from June 30, 1994, and down $3.47 million (2.6%) from
December 31, 1994 (see: Supplemental Tables "Financial Highlights -
Reconciliation of the Reserve for Loan Losses, - Selected Ratios"). These
slight reductions in the reserve reflected continued good asset quality.
The resulting ratio of the reserve for loan losses to total loans was 1.56%
at quarter end, down from 1.82% one year ago and 1.64% at year end. At the
same time, the "coverage" ratio of the reserve for loan losses to nonaccruing
loans increased to 697.19% at quarter end, up from 539.27% one year ago and
560.81% at year end. Merger transactions added reserves of $4.42 million
since one year ago but none since year end.
FSCO charges loan losses against the reserve for loan losses when such
losses become probable and subject to reasonable estimation. Net loans
charged off totaled $10.06 million for year-to-date 1995, up $6.90 million
(218.7%) from the year-ago period, and were $4.96 million for the second
quarter of 1995, up $2.47 million (99.1%) from the year-ago quarter. This was
due primarily to increased consumer loan losses. However, FSCO continued to
maintain strong asset quality and to benefit from the positive effects of a
healthy regional economy.
The ratio of net loan chargeoffs to average loans was near historical lows
at 0.25% for the year to date and 0.24% for the second quarter, although up
from 0.09% for the year-ago period and 0.14% for the year-ago quarter,
respectively, and 0.10% for all of 1994.
FSCO's philosophy regarding the adequacy and use of its reserve was
discussed in greater detail in FSCO's 1994 Form 10-K: "Interest-Earning Assets
and Asset Quality - Reserve for Loan Losses".
Investment Securities
FSCO manages its securities available for sale and securities held to
maturity portfolios within policies which are designed to achieve desired
liquidity levels, manage interest rate sensitivity risk, meet earnings
objectives, and fulfill requirements for collateral to support deposit and/or
repurchase agreement activities (see: Financial Statements "Condensed
Consolidated Balance Sheets"). FSCO's investment strategy remains flexible
and carefully reviewed by management, shifting periodically in response to
changing conditions. The average life of the investment securities portfolios
is relatively short, providing a constant cash flow from maturing assets.
FSCO's securities available for sale were $2.09 billion at June 30, 1995,
down $41 million (1.9%) from June 30, 1994, but up $93 million (4.7%) from
December 31, 1994. FSCO's securities held to maturity were $252 million at
June 30, 1995, down $16 million (6.0%) from June 30, 1994, and essentially
unchanged from December 31, 1994.
Other Interest-Earning Assets
The combined balance of Federal funds sold and securities purchased under
resale agreements, interest-bearing deposits in other banks, and trading
account securities was $596.83 million at June 30, 1995, down $209.03 million
(25.9%) from June 30, 1994, but essentially unchanged from December 31, 1994
(see: Financial Statements "Condensed Consolidated Balance Sheets").
Historically, these balances have fluctuated significantly in response to both
market conditions and FSCO's need for funds.
LIQUIDITY
FSCO has established specific policies and procedures governing liquidity
management through its asset/liability management committee ("ALCO") process.
These policies and processes were discussed in greater detail in FSCO's 1994
Form 10-K: "Asset/Liability Management"; and "Liquidity".
FSCO maintains an adequate liquidity position through stable core deposits
generated from its branch network, short-term securities portfolios, other
interest-earning assets, and the prudent usage of debt (see: MDA "Interest-
Earning Assets and Asset Quality", "Deposits", and Borrowed Funds"). Maturing
balances in the large loan portfolios also provide flexibility in managing
cash flows. The ability to redeploy these funds is an important source of
medium to long-term liquidity.
Backup sources of liquidity are provided by credit lines to FSCO and by
Federal funds lines carried by FSCO's subsidiary Banks. Additional liquidity
could be generated through: issuance of corporate debt; Bank Note issuance;
borrowings from the Federal Home Loan Bank of which FSB Utah, FSB Idaho, and
FSB Oregon are members; assets sales and securitization; and borrowings from
the Federal Reserve System.
Deposits
FSCO's deposits totaled $8.59 billion at June 30, 1995, up $704 million
(8.9%) from June 30, 1994, and up $538 million (6.7%) from December 31, 1994
(see: Financial Statements "Condensed Consolidated Balance Sheets" and
Supplemental Tables "Rate / Volume Analysis"). These increases were due to
successful deposit promotions and the positive impact of acquisitions in 1994.
The mix of deposits at quarter end shifted slightly as interest-bearing
deposits were 79.65% of total deposits, up from 76.63% one year ago and 78.65%
at year end.
Borrowed Funds
Borrowed funds totaled $2.59 billion at June 30, 1995, down $136 million
(5.0%) from June 30, 1994, and down $444 million (14.6%) from December 31,
1994 (see: Financial Statements "Condensed Consolidated Balance Sheets").
Borrowed funds were increased during 1994 to support strong loan growth that
exceeded deposit growth throughout FSCO's market areas. Since year end, loan
sales and repayments largely offset loan originations, so that deposit growth
exceeded net loan growth and supported a reduction of short-term borrowings.
The components of FSCO's borrowed funds at June 30, 1995, compared with
June 30, 1994, and December 31, 1994, respectively, included:
* Federal funds purchased and securities sold under repurchase agreements
were $1.73 billion, down $601 million (25.8%) from one year ago, and down $428
million (19.8%) from year end.
* All other short-term borrowings were $188 million, up $110 million
(140.6%) from one year ago, but essentially unchanged from year end.
* Long-term debt was $667 million, up $355 million (113.7%) from one year
ago, but down $19 million (2.7%) from year end.
On July 17, 1995, FSCO issued $125 million of 7.00% Subordinated Notes due
July 15, 2005.
STOCKHOLDERS' EQUITY and CAPITAL ADEQUACY
FSCO and its subsidiary Banks exceeded regulatory requirements for "well
capitalized" status throughout 1994 and year-to-date 1995. It is FSCO's
policy to maintain this status at both the consolidated and subsidiary Bank
levels.
Application of SFAS 115 has resulted in, and will continue to result in,
additions to or deductions from FSCO's total stockholders' equity as the
result of fluctuations in the fair value of securities available for sale.
Total stockholders' equity in FSCO increased to a record $990.19 million at
June 30, 1995, up $131.43 million (15.3%) from June 30, 1994, and up $100.72
million (11.3%) from December 31, 1994 (see: Financial Statements "Condensed
Consolidated Balance Sheets"). This growth was due in part to record earnings
and pooling-of-interests mergers. In addition, the SFAS 115 net unrealized
loss on securities available for sale was $2.88 million, improving by $23.66
million (89.1%) from June 30, 1994 and $51.46 million (94.7%) from December
31, 1994.
The ratio of stockholders' equity to total assets was 7.97% at quarter end,
up from 7.32% both one year ago and at year-end 1994. At the same time, the
ratio of tangible common equity to tangible total assets was 6.87%, up from
6.03% both one year ago and at year end (see: Supplemental Tables "Financial
Highlights - Selected Ratios"). Changes in these equity ratios were due in
part to FSCO's acquisition of CrossLand Mortgage and the resulting growth in
total assets and intangible assets, plus the fluctuations in SFAS 115.
FSCO's risk-based capital ratios (see: Supplemental Tables "Financial
Highlights - Risk-Based Capital Ratios") at June 30, 1995, compared with June
30, 1994, and December 31, 1994, respectively, were:
* Tier 1 (well capitalized: 6.0% or above) at 10.12%, compared with 9.92%
one year ago, and 9.84% at year end.
* Total Capital (well capitalized: 10.0% or above) at 12.22%, compared with
12.12% one year ago, and 11.98% at year end.
* Leverage (well capitalized: 5.0% or above) at 7.20%, compared with 6.78%
one year ago, and 6.88% at year end.
As with its equity ratios, the changes in FSCO's risk-based capital ratios
were due in part to FSCO's acquisition of CrossLand Mortgage and the resulting
growth in total assets and intangible assets.
COMMON STOCK
On April 24, 1995, FSCO's Board of Directors declared a regular quarterly
cash dividend of $0.28 per share of FSCO's Common Stock (see: Supplemental
Tables "Financial Highlights"). This dividend, payable June 5, 1995 to
shareholders of record on May 19, 1995, equals an annual rate of $1.12 per
share. At the market closing bid price of $23.625 per share on Friday, April
21, 1995, the annual dividend yield on FSCO's Common Stock was 4.74%.
On July 31, 1995, FSCO's Board of Directors declared a regular quarterly
cash dividend of $0.28 per share of FSCO's Common Stock. This dividend,
payable September 4, 1995 to shareholders of record on August 18, 1995, equals
an annual rate of $1.12 per share. At the market closing bid price of $28.13
per share on Friday, July 28, 1995, the annual dividend yield on FSCO's Common
Stock was 3.98%.
FSCO has paid cash dividends for 60 consecutive years. National and state
banking and insurance regulations impose restrictions on the ability of FSCO's
bank and insurance subsidiaries to transfer funds to FSCO in the form of loans
or dividends. Such restrictions have not had, nor are they expected to have,
any effect on FSCO's current ability to pay dividends. FSCO's current and
past record of dividend payments should not be construed as a guarantee of
similar dividend payments in the future.
MERGERS AND ACQUISITIONS
FSCO's merger and acquisition activity reflects management's strategy of
diversifying and enhancing FSCO's financial services delivery system through
the expansion and geographical diversification of its bank branch network and
nonbank activities (see: Supplemental Tables "Mergers and Acquisitions").
Management believes that long-term returns on the stockholders' investment
will benefit from these acquisitions, and will continue its strategy of
acquiring solid, well-managed financial services companies when suitable
opportunities arise in new and existing markets.
Since June 30, 1994, FSCO has acquired 5 financial institutions, 3 of which
were accounted for as purchase transactions and 2 of which were accounted for
as pooling-of-interests transactions. None of the pooling-of-interests
transactions were of sufficient size to require restatement of FSCO's
historical financial statements. On April 29, 1994, FSCO acquired CrossLand
Mortgage which was the largest cash purchase ever made by the Corporation.
PROJECT "VISION" - FIRST SECURITY'S CORPORATE REDESIGN PROGRAM
On July 11, FSCO announced the implementation of a corporate redesign
effort aimed at enhancing customer service and boosting the Corporation's
operating efficiency. Called "VISION", the five-month program will help FSCO
to improve customer service while at the same time identifying operational
changes that will help the Corporation become a more efficient provider of
banking and financial services.
VISION will focus on boosting revenue and improving operating processes,
not simply on cutting costs. This will be accomplished through eliminating
redundancies, inefficiencies, and outdated processes while identifying new
revenue sources and better operating procedures.
NATIONAL & REGIONAL ECONOMY
Several months of national economic weakness helped influence the Federal
Reserve to change the direction of monetary policy and lower interest rates.
The economic softness primarily reflected a drop in consumer buying, a
resulting buildup in inventories, and reduced production schedules in the
manufacturing sector. Recent retail sales and employment data suggest that
the excess inventories may be liquidated by the fourth quarter and that any
recessionary fears were premature and seemingly unwarranted.
Financial markets initially reacted favorably to the Federal Reserve's
action. Treasury security yields all along the maturity spectrum declined,
while the stock and dollar-exchange markets improved. By the latter part of
July, Treasury note and bond yields had risen by 50 basis points, reflecting
the improved economic outlook.
Economic growth in the Intermountain Area generally remains above the
national average. Salt Lake City's winning bid for the 2002 Winter Olympic
Games should accelerate winter tourist activity for the entire region.
Employment growth is favorable, but in several states, the pace of expansion
has moderated relative to last year. Commercial construction is very strong
and is helping maintain that industry at very high levels of activity.
# # #
<PAGE>
PART I. FINANCIAL INFORMATION
Item 2. Continued: Supplemental Tables
<TABLE>
FIRST SECURITY CORPORATION
FINANCIAL HIGHLIGHTS
(in thousands, except per share data and ratios; unaudited)
<CAPTION>
2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr Year-To-Date 6 Months
1995 1995 1994 1994 1994 1995 1994 %Chg
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Common Stock Data:
Earnings per common share: primary ............ 0.72 0.70 0.69 0.73 0.71 1.42 1.38 2.9
Earnings per common share: fully diluted ...... 0.71 0.70 0.69 0.73 0.71 1.41 1.38 2.2
Dividends paid per common share ............... 0.28 0.28 0.26 0.26 0.26 0.56 0.52 7.7
Book value EOP ................................ 19.82 18.96 17.92 17.88 17.45 19.82 17.45 13.6
Tangible book value EOP ....................... 16.90 15.95 14.57 14.42 14.18 16.90 14.18 19.2
Market price (bid) EOP ........................ 28.00 24.00 22.75 28.50 29.00 28.00 29.00 -3.4
High bid for the period ..................... 28.63 25.63 28.50 32.00 31.00 28.63 31.00 -7.6
Low bid for the period ...................... 23.00 22.00 21.50 27.75 27.25 22.00 25.25 -12.9
Market capitalization EOP: mktprice x #shrs ... 1,398,348 1,197,768 1,128,286 1,411,691 1,426,133 1,398,348 1,426,133 -1.9
Market price EOP / book value EOP (%) ......... 141.27 126.58 126.95 159.40 166.19 141.27 166.19
Dividend payout ratio: DPS / EPS (%) .......... 38.89 40.00 37.68 35.62 36.62 39.44 37.68
Dividend yield EOP: dividend / mktprice (%) ... 4.00 4.67 4.57 3.65 3.59 4.00 3.59
Price / earnings ratio: mktprice / 4 qtrs earn 9.9 8.5 8.1 11.2 11.6 9.9 11.6
Common shares outstanding: EOP ................ 49,941 49,907 49,595 49,533 49,177 49,941 49,177 1.6
Common shares out: average primary ............ 50,710 50,566 50,341 50,350 49,687 50,638 49,502 2.3
Common shares out: average fully diluted ...... 50,850 50,709 50,491 50,505 49,845 50,780 49,662 2.3
Preferred shares outstanding: EOP ............. 11 12 12 13 13 11 13 -15.4
- ---------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Income Statement:
Interest income ............................... 233,068 220,550 211,909 200,365 188,805 453,618 361,243 25.6
Interest expense .............................. 114,466 111,488 96,955 83,829 72,460 225,954 134,631 67.8
Net interest income ........................... 118,602 109,062 114,954 116,536 116,345 227,664 226,612 0.5
Fully-taxable equivalent (FTE) adjustment ..... 1,874 2,025 1,944 2,002 1,966 3,899 3,929 -0.8
Net interest income, FTE ...................... 120,476 111,087 116,898 118,538 118,311 231,563 230,541 0.4
Provision for loan losses ..................... 3,742 2,848 474 180 343 6,590 171 NM
Noninterest income ............................ 64,278 70,872 58,357 58,919 48,476 135,150 89,345 51.3
Noninterest expenses .......................... 121,362 120,731 117,328 116,767 109,044 242,093 208,626 16.0
Provision for income taxes .................... 21,543 20,755 20,541 21,724 20,214 42,298 38,778 9.1
Net income .................................... 36,233 35,600 34,968 36,784 35,220 71,833 68,382 5.0
Preferred stock dividend requirement .......... 9 9 9 10 10 18 20 -10.0
Common stock dividend ......................... 13,976 13,981 12,869 12,882 12,771 27,957 25,336 10.3
- ---------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Balance Sheet - End of Period:
Trading account securities .................... 477,560 437,415 553,826 398,087 725,211 477,560 725,211 -34.1
Securities available for sale ................. 2,086,509 2,044,257 1,993,797 2,087,639 2,127,690 2,086,509 2,127,690 -1.9
Securities held to maturity ................... 251,982 243,915 252,622 260,485 268,114 251,982 268,114 -6.0
Loans, net of unearned income ................. 8,356,657 8,183,306 8,173,678 7,745,350 7,282,550 8,356,657 7,282,550 14.7
Reserve for loan losses ....................... (130,388) (131,603) (133,855) (134,653) (132,714) (130,388) (132,714) -1.8
Total interest-earning assets .................11,291,982 11,119,493 11,019,059 10,563,552 10,484,219 11,291,982 10,484,219 7.7
Intangible assets ............................. 145,369 149,828 166,199 171,583 160,737 145,369 160,737 -9.6
Other assets .................................. 1,119,216 1,051,592 1,097,579 1,004,407 1,222,675 1,119,216 1,222,675 -8.5
Total assets ..................................12,426,179 12,189,310 12,148,982 11,604,889 11,734,917 12,426,179 11,734,917 5.9
Noninterest-bearing deposits .................. 1,748,031 1,655,669 1,719,388 1,734,255 1,843,559 1,748,031 1,843,559 -5.2
Interest-bearing deposits ..................... 6,843,356 6,617,045 6,333,956 6,201,229 6,043,972 6,843,356 6,043,972 13.2
Total deposits ................................ 8,591,387 8,272,714 8,053,344 7,935,484 7,887,531 8,591,387 7,887,531 8.9
Short-term borrowed funds ..................... 1,920,093 2,076,923 2,345,139 2,298,101 2,411,385 1,920,093 2,411,385 -20.4
Long-term debt ................................ 666,858 683,785 685,426 292,058 312,005 666,858 312,005 113.7
Total interest-bearing liabilities ............ 9,430,307 9,377,753 9,364,521 8,791,388 8,767,362 9,430,307 8,767,362 7.6
Other liabilities ............................. 257,349 208,942 175,330 192,587 264,971 257,349 264,971 -2.9
Minority equity in subsidiaries ............... 298 285 269 270 259 298 259 15.1
Preferred stockholders' equity ................ 594 610 629 668 675 594 675 -12.0
Common stockholders' equity ................... 989,600 946,051 888,845 885,721 858,091 989,600 858,091 15.3
Parent company investment in subsidiaries ..... 1,030,242 990,493 932,738 916,427 822,591 1,030,242 822,591 25.2
Off-balance sheet letters of credit ........... 191,692 178,191 202,694 194,657 194,120 191,692 194,120 -1.3
- ---------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Problem Assets - End of Period:
Nonaccruing loans:
Commercial .................................. 5,501 5,731 8,903 7,781 8,373 5,501 8,373 -34.3
Real estate: term residential ............... 5,151 4,545 4,876 3,694 3,744 5,151 3,744 37.6
Real estate: term commercial ................ 4,896 6,867 7,370 7,326 9,806 4,896 9,806 -50.1
Real estate: construction ................... 1,637 1,057 1,714 1,110 1,844 1,637 1,844 -11.2
Consumer .................................... 85 97 168 173 203 85 203 -58.1
Leases ...................................... 1,432 908 837 148 640 1,432 640 123.8
Nonaccruing loans: renegotiated ............... 0 0 0 0 0 0 0 NA
Total nonaccruing loans ....................... 18,702 19,205 23,868 20,232 24,610 18,702 24,610 -24.0
ORE and other foreclosed assets ............... 4,340 2,334 3,352 3,148 8,387 4,340 8,387 -48.3
Total nonperforming assets .................... 23,042 21,539 27,220 23,380 32,997 23,042 32,997 -30.2
Accruing loans past due 90 days or more ....... 11,076 11,518 12,001 9,265 9,184 11,076 9,184 20.6
Total problem assets .......................... 34,118 33,057 39,221 32,645 42,181 34,118 42,181 -19.1
- ---------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Other Data - End of Period (not rounded to thousands):
Full-time equivalent employees ................ 7,755 7,656 7,621 7,499 7,427 7,755 7,427 4.4
Domestic bank offices:
First Security Bank of Utah ................. 124 120 119 118 118 124 118 5.1
First Security Bank of Idaho ................ 91 91 91 91 87 91 87 4.6
First Security Bank of New Mexico ........... 27 27 27 26 26 27 26 3.8
First Security Bank of Oregon ............... 13 13 13 13 13 13 13 0.0
First Security Bank of Nevada ............... 6 5 5 5 5 6 5 20.0
First Security Bank of Wyoming .............. 6 6 6 6 4 6 4 50.0
Total domestic bank offices ................... 267 262 261 259 253 267 253 5.5
============================================== ========== ========== ========== ========== ========== ========== ========== =======
<FN>
EOP: End of period. EPS: Earnings Per Share. DPS: Dividends Per Share. NM: Not meaningful.
</TABLE>
<PAGE>
<TABLE>
FIRST SECURITY CORPORATION
FINANCIAL HIGHLIGHTS - Continued
(in thousands, except per share data and ratios; unaudited)
<CAPTION>
2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr Year-To-Date 6 Months
1995 1995 1994 1994 1994 1995 1994 %Chg
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Balance Sheet - Average:
Trading account securities .................... 345,158 677,507 570,726 669,955 712,980 510,415 638,423 -20.1
Securities available for sale ................. 2,042,127 1,976,800 2,059,821 2,108,122 2,002,866 2,011,377 1,886,149 6.6
Securities held to maturity ................... 238,637 250,957 246,917 263,979 267,384 243,030 282,573 -14.0
Loans, net of unearned income ................. 8,233,243 8,133,412 7,928,754 7,489,686 6,993,753 8,182,993 6,771,483 20.8
Reserve for loan losses ....................... (131,321) (133,747) (135,325) (134,492) (134,270) (132,528) (134,694) -1.6
Deferred taxes on leases ...................... (160,041) (157,360) (153,585) (147,368) (141,901) (161,520) (139,965) 15.4
Total int-earning assets - defer tax on leases 10,825,695 10,948,403 10,705,435 10,427,360 9,883,013 10,883,288 9,509,031 14.5
Intangible assets ............................. 148,187 164,105 169,375 169,246 117,508 156,102 65,097 139.8
Other assets .................................. 1,003,232 984,449 1,034,843 980,263 948,086 993,893 931,642 6.7
Total assets ..................................12,005,834 12,120,570 11,927,913 11,589,745 10,956,238 12,062,275 10,511,041 14.8
Noninterest-bearing deposits .................. 1,585,255 1,545,225 1,684,321 1,641,041 1,616,036 1,564,740 1,564,687 0.0
Interest-bearing deposits ..................... 6,766,077 6,423,604 6,255,221 6,175,251 6,038,334 6,595,786 5,949,245 10.9
Total deposits ................................ 8,351,332 7,968,829 7,939,542 7,816,292 7,654,370 8,160,526 7,513,932 8.6
Short-term borrowed funds ..................... 1,761,411 2,348,062 2,310,480 2,388,601 1,955,541 2,053,116 1,659,467 23.7
Long-term debt ................................ 682,382 684,497 586,407 306,808 300,304 683,434 288,284 137.1
Total interest-bearing liabilities ............ 9,209,870 9,456,163 9,152,108 8,870,660 8,294,179 9,332,336 7,896,996 18.2
Other liabilities ............................. 235,550 199,827 200,059 205,775 189,092 217,788 188,577 15.5
Minority equity in subsidiaries ............... 291 276 270 265 259 283 263 7.6
Preferred stockholders' equity ................ 603 616 650 671 683 610 691 -11.7
Common stockholders' equity ................... 974,265 918,463 890,505 871,333 855,989 946,518 854,989 10.7
- ---------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Reconciliation of the Reserve for Loan Losses:
Balance, beginning of period .................. 131,603 133,855 134,653 132,714 134,216 133,855 134,848 -0.7
Loans charged off:
Commercial .................................. 726 1,074 1,052 1,015 2,667 1,800 3,554 -49.4
Real estate: term ........................... 573 694 274 267 447 1,267 1,177 7.6
Real estate: construction ................... 1 93 0 206 0 94 300 -68.7
Consumer: instalment ........................ 8,008 9,425 8,098 5,719 4,304 17,433 9,063 92.4
Consumer: credit card ....................... 2,291 2,447 1,845 1,616 1,489 4,738 3,367 40.7
Leases ...................................... 600 0 104 12 86 600 123 387.8
Total loans charged off ....................... 12,199 13,733 11,373 8,835 8,993 25,932 17,584 47.5
Recoveries on loans charged off:
Commercial .................................. (2,216) (2,412) (1,547) (3,291) (2,312) (4,628) (6,300) -26.5
Real estate: term ........................... (560) (1,765) (2,394) (1,317) (851) (2,325) (1,940) 19.8
Real estate: construction ................... (30) (22) (121) (37) (19) (52) (43) 20.9
Consumer: instalment ........................ (3,843) (3,930) (3,562) (2,624) (2,552) (7,773) (4,915) 58.1
Consumer: credit card ....................... (553) (504) (362) (476) (498) (1,057) (952) 11.0
Leases ...................................... (40) 0 (27) (514) (271) (40) (278) -85.6
Total recoveries of loans charged off ......... (7,242) (8,633) (8,013) (8,259) (6,503) (15,875) (14,428) 10.0
Net loans charged off (recovered) ............. 4,957 5,100 3,360 576 2,490 10,057 3,156 218.7
Provision for loan losses ..................... 3,742 2,848 474 180 343 6,590 171 NM
Acquisitions & reclassifications .............. 0 0 2,088 2,335 645 0 851 -100.0
Balance, end of period ........................ 130,388 131,603 133,855 134,653 132,714 130,388 132,714 -1.8
- ---------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Selected Ratios (%):
Return on average assets ...................... 1.21 1.19 1.16 1.26 1.29 1.20 1.31
Return on average stockholders' equity ........ 14.91 15.71 15.57 16.74 16.49 15.29 16.12
Net interest margin, FTE ...................... 4.45 4.06 4.37 4.55 4.79 4.26 4.85
Net interest spread, FTE ...................... 3.71 3.41 3.75 3.98 4.23 3.57 4.27
Operating expense ratio:
(nonint exp / (net int inc FTE + nonint inc)) 65.69 66.35 66.95 65.80 65.38 66.02 65.22
Productivity ratio: (nonint exp / avg assets) . 4.05 4.04 3.90 4.00 3.99 4.05 4.00
Stockholders' equity / assets ................. 7.97 7.77 7.32 7.64 7.32 7.97 7.32
Avg stockholders' equity / avg assets ......... 8.12 7.58 7.47 7.52 7.82 7.85 8.14
Tangible common equity / tangible assets ...... 6.87 6.61 6.03 6.25 6.03 6.87 6.03
Loans / deposits .............................. 97.27 98.92 101.49 97.60 92.33 97.27 92.33
Loans / assets ................................ 67.25 67.14 67.28 66.74 62.06 67.25 62.06
Reserve for loan losses EOP to:
Total loans ................................. 1.56 1.61 1.64 1.74 1.82 1.56 1.82
Nonaccruing loans ........................... 697.19 685.25 560.81 665.54 539.27 697.19 539.27
Nonaccruing + accruing loans past due 90 days 437.87 428.35 373.18 456.50 392.71 437.87 392.71
Nonaccruing loans / total loans ............... 0.22 0.23 0.29 0.26 0.34 0.22 0.34
Nonaccrue + accrue loans past due / total loans 0.36 0.38 0.44 0.38 0.46 0.36 0.46
Nonperforming assets EOP to:
Total loans + ORE ........................... 0.28 0.26 0.33 0.30 0.45 0.28 0.45
Total assets ................................ 0.19 0.18 0.22 0.20 0.28 0.19 0.28
Total equity ................................ 2.33 2.28 3.06 2.64 3.84 2.33 3.84
Total equity + reserve for loan losses ...... 2.06 2.00 2.66 2.29 3.33 2.06 3.33
Problem assets EOP to:
Total loans + ORE ........................... 0.41 0.40 0.48 0.42 0.58 0.41 0.58
Total assets ................................ 0.27 0.27 0.32 0.28 0.36 0.27 0.36
Total equity ................................ 3.45 3.49 4.41 3.68 4.91 3.45 4.91
Total equity + reserve for loan losses ...... 3.04 3.07 3.83 3.20 4.25 3.04 4.25
Net loans charged off / average loans ......... 0.24 0.25 0.17 0.03 0.14 0.25 0.09
============================================== ========== ========== ========== ========== ========== ========== ========== =======
Risk-Based Capital Ratios: FSC FSB FSB FSB FSB FSB FSB
As of June 30, 1995 Consol. Utah Idaho New Mexico Oregon Nevada Wyoming
- ---------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Tier 1 risk-based capital ratio (%) ........... 10.12 10.03 8.89 11.68 10.31 9.84 10.34
Total (Tier 1+2) risk-based capital ratio (%) . 12.22 11.65 11.12 12.94 11.56 11.09 11.60
Leverage Ratio (%) ............................ 7.20 7.05 7.02 5.95 8.85 7.75 6.88
Tier 1 equity ................................. 887,189 414,462 264,678 104,833 35,843 26,117 13,732
Total (Tier 1+2) equity ....................... 1,072,074 481,167 331,154 116,153 40,193 29,449 15,405
Total risk-based assets - loan loss residual .. 8,770,258 4,130,589 2,976,943 897,284 347,575 265,542 132,822
============================================== ========== ========== ========== ========== ========== ========== ========== =======
<FN>
EOP: End of period. EPS: Earnings Per Share. DPS: Dividends Per Share. NM: Not meaningful.
</TABLE>
<PAGE>
<TABLE>
FIRST SECURITY CORPORATION
RATE / VOLUME ANALYSIS
(Fully Taxable Equivalent; in thousands; unaudited)
<CAPTION>
For the 3 Months Ended June 30, 1995 and 1994
Average Balance Yield/Rate % Interest Inc/Exp (A) Change Changes Due To:
1995 1994 1995 1994 1995 1994 1995-94 Volume Rate(B)
<C> <C> <C> <C> <S> <C> <C> <C> <C> <C>
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
INTEREST-EARNING ASSETS / INCOME:
Loans, net of unearned income and
8,073,202 6,851,853 9.50 8.62 .. deferred taxes on leases (C) .............. 191,788 147,622 44,166 26,314 17,852
125,195 46,372 5.97 3.18 ..Federal funds sold & securities purchased ... 1,869 369 1,500 627 873
1,376 1,558 3.49 4.11 ..Interest-bearing deposits in other banks..... 12 16 (4) (2) (2)
345,158 712,980 6.17 6.41 ..Trading account securities .................. 5,324 11,432 (6,108) (5,898) (210)
2,042,127 2,002,866 6.12 5.40 ..Securities available for sale ............... 31,226 27,039 4,187 530 3,657
238,637 267,384 7.92 6.42 ..Securities held to maturity ................. 4,723 4,293 430 (462) 892
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
10,825,695 9,883,013 8.68 7.72 TOTAL INTEREST-EARNING ASSETS / INCOME 234,942 190,771 44,171 21,109 23,062
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
INTEREST-BEARING LIABILITIES / EXPENSE:
Interest-bearing deposits:
1,063,570 1,096,922 1.97 1.68 .. NOW accounts .............................. 5,238 4,608 630 (140) 770
2,294,050 2,574,893 3.83 2.93 .. Savings accounts .......................... 21,940 18,881 3,059 (2,059) 5,118
765,741 422,439 6.11 4.09 .. Time deposits $100,000 & over ............. 11,689 4,316 7,373 3,507 3,866
2,642,716 1,944,080 5.70 4.30 .. Other time deposits ....................... 37,668 20,896 16,772 7,509 9,263
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
6,766,077 6,038,334 4.52 3.23 TOTAL INTEREST-BEARING DEPOSITS 76,535 48,701 27,834 8,817 19,017
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
1,579,470 1,903,429 5.80 3.85 ..Federal funds purchased & securities sold ... 22,885 18,308 4,577 (3,116) 7,693
181,941 52,112 6.53 5.63 ..Other short-term borrowings ................. 2,968 734 2,234 1,829 405
682,382 300,304 7.08 6.28 ..Long-term debt .............................. 12,078 4,717 7,361 6,001 1,360
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
9,209,870 8,294,179 4.97 3.49 TOTAL INTEREST-BEARING LIABILITIES / EXPENSE 114,466 72,460 42,006 4,714 9,458
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
8.68 7.72 ..Interest income / earning assets
4.23 2.93 ..Interest expense / earning assets
------ ------ --------------------------------------------
4.45 4.79 ..Net interest income / earning assets ........ 120,476 118,311 2,165 16,395 13,604
Less fully taxable equivalent adjustment .... 1,874 1,966 (92)
------ ------ -------------------------------------------- --------- --------- -------- -------- --------
NET INTEREST INCOME, PER CONDENSED
CONSOLIDATED INCOME STATEMENTS 118,602 116,345 2,257
=========== =========== ====== ====== ============================================ ========= ========= ======== ======== ========
<CAPTION>
For the Year-To-Date 6 Months Ended June 30, 1995 and 1994
Average Balance Yield/Rate % Interest Inc/Exp (A) Change Changes Due To:
1995 1994 1995 1994 1995 1994 1995-94 Volume Rate(B)
<C> <C> <C> <C> <S> <C> <C> <C> <C> <C>
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
INTEREST-EARNING ASSETS / INCOME:
Loans, net of unearned income and
8,021,473 6,631,518 9.25 8.58 .. deferred taxes on leases (C) .............. 371,063 284,396 86,667 59,609 27,058
95,537 67,930 5.88 3.17 ..Federal funds sold & securities purchased ... 2,807 1,076 1,731 437 1,294
1,456 2,438 4.12 3.77 ..Interest-bearing deposits in other banks..... 30 46 (16) (19) 3
510,415 638,423 5.28 6.57 ..Trading account securities .................. 13,463 20,972 (7,509) (4,205) (3,304)
2,011,377 1,886,149 6.02 5.33 ..Securities available for sale ............... 60,494 50,312 10,182 3,340 6,842
243,030 282,573 7.95 5.92 ..Securities held to maturity ................. 9,660 8,370 1,290 (1,171) 2,461
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
10,883,288 9,509,031 8.41 7.68 TOTAL INTEREST-EARNING ASSETS / INCOME 457,517 365,172 92,345 57,991 34,354
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
INTEREST-BEARING LIABILITIES / EXPENSE:
Interest-bearing deposits:
1,071,188 1,076,344 1.96 1.69 .. NOW accounts .............................. 10,521 9,091 1,430 (44) 1,474
2,324,980 2,529,756 3.70 2.92 .. Savings accounts .......................... 43,070 36,983 6,087 (2,994) 9,081
675,516 405,653 5.91 4.05 .. Time deposits $100,000 & over ............. 19,964 8,219 11,745 5,468 6,277
2,524,102 1,937,492 5.46 4.29 .. Other time deposits ....................... 68,968 41,601 27,367 12,595 14,772
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
6,595,786 5,949,245 4.32 3.22 TOTAL INTEREST-BEARING DEPOSITS 142,523 95,894 46,629 15,025 31,604
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
1,874,812 1,608,370 5.69 3.53 ..Federal funds purchased & securities sold ... 53,385 28,382 25,003 4,702 20,301
178,304 51,097 6.56 5.19 ..Other short-term borrowings ................. 5,846 1,326 4,520 3,301 1,219
683,434 288,284 7.08 6.26 ..Long-term debt .............................. 24,200 9,029 15,171 12,376 2,795
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
9,332,336 7,896,996 4.84 3.41 TOTAL INTEREST-BEARING LIABILITIES / EXPENSE 225,954 134,631 91,323 20,379 24,315
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
8.41 7.68 ..Interest income / earning assets
4.15 2.83 ..Interest expense / earning assets
------ ------ --------------------------------------------
4.26 4.85 ..Net interest income / earning assets ........ 231,563 230,541 1,022 37,612 10,039
Less fully taxable equivalent adjustment .... 3,899 3,929 (30)
------ ------ -------------------------------------------- --------- --------- -------- -------- --------
NET INTEREST INCOME, PER CONDENSED
CONSOLIDATED INCOME STATEMENTS 227,664 226,612 1,052
=========== =========== ====== ====== ============================================ ========= ========= ======== ======== ========
<FN>
(A) Interest and rates are presented on a fully taxable equivalent (FTE) basis, calculated on federal and state taxes applicable
to the subsidiary carrying the asset. The combined tax rate was approximately 39% in 1995 and 1994.
(B) Changes not due entirely to changes in volume or rate have been allocated to rate.
(C) Loans include nonaccruing and renegotiated loans. Interest on loans includes fees of $5,671 and $4,951 for the 1995 and 1994
quarters respectively, and $10,174 and $9,007 for the 1995 and 1994 year-to-date periods, respectively.
</TABLE>
<PAGE>
<TABLE>
FIRST SECURITY CORPORATION
LOANS OUTSTANDING, NET OF UNEARNED INCOME
(in thousands; unaudited)
<CAPTION>
June 30, 1995 December 31, 1994 June 30, 1994
%Total %Total %Total Jun/Jun
Balance Loans Balance Loans Balance Loans %Chg
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
COMMERCIAL LOANS:
Commercial / Industrial .................. 1,548,072 18.5 1,390,620 17.0 1,220,464 16.7 26.8
Agricultural ............................. 290,559 3.5 291,807 3.6 288,789 4.0 0.6
Other Commercial ......................... 72,623 0.9 153,365 1.9 132,646 1.8 -45.3
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
TOTAL COMMERCIAL LOANS 1,911,254 22.9 1,835,792 22.5 1,641,899 22.5 16.4
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
REAL ESTATE SECURED LOANS:
Residential Real Estate Loans:
Term ................................... 1,565,960 18.7 1,560,700 19.1 1,383,575 19.0 13.2
Home equity ............................ 404,438 4.8 358,858 4.4 313,059 4.3 29.2
Construction ........................... 212,380 2.6 180,544 2.2 165,052 2.2 28.7
Construction Land ...................... 4,998 0.1 5,798 0.1 12,444 0.2 -59.8
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
Total Residential Real Estate Loans 2,187,776 26.2 2,105,900 25.8 1,874,130 25.7 16.7
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
Commercial Real Estate (CRE) Loans:
Term: owner occupied ................... 335,084 4.0 367,990 4.5 357,375 4.9 -6.2
Term: nonowner occupied ................ 515,885 6.2 479,100 5.9 453,144 6.2 13.8
Construction: owner occupied ........... 84,180 1.0 53,989 0.7 38,466 0.6 118.8
Construction: nonowner occupied ........ 113,470 1.4 78,145 0.9 58,722 0.8 93.2
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
Subtotal: CRE Owner Occupied 419,264 5.0 421,979 5.2 395,841 5.5 5.9
Subtotal: CRE Nonowner Occupied 629,355 7.6 557,245 6.8 511,866 7.0 23.0
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
Commercial Land ........................ 43,109 0.5 43,331 0.5 41,737 0.6 3.3
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
Total Commercial Real Estate Loans 1,091,728 13.1 1,022,555 12.5 949,444 13.1 15.0
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
Farm Land ................................ 14,008 0.1 13,966 0.1 15,429 0.2 -9.2
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
TOTAL REAL ESTATE SECURED LOANS 3,293,512 39.4 3,142,421 38.4 2,839,003 39.0 16.0
Memo: Total RE Term Loans .............. 2,870,710 34.3 2,819,051 34.5 2,559,805 35.2 12.1
Memo: Total RE Construction Loans ...... 422,802 5.1 323,370 3.9 279,198 3.8 51.4
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
Consumer Loans:
Auto ..................................... 2,070,715 24.8 2,129,128 26.0 1,890,488 26.0 9.5
Student .................................. 47,384 0.6 130,158 1.6 111,952 1.5 -57.7
Credit Card Receivables .................. 301,581 3.6 306,270 3.7 272,788 3.7 10.6
Other Consumer ........................... 359,909 4.3 288,392 3.5 222,661 3.1 61.6
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
TOTAL CONSUMER LOANS 2,779,589 33.3 2,853,948 34.9 2,497,889 34.3 11.3
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
Leases:
TOTAL LEASES ............................. 372,302 4.4 341,517 4.2 303,759 4.2 22.6
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
LOANS, NET OF UNEARNED INCOME 8,356,657 100.0 8,173,678 100.0 7,282,550 100.0 14.7
Memo: Unearned Income .................. (6,030) (7,380) (11,696) -48.4
Reserve for Loan Losses .................. (130,388) (133,855) (132,714) -1.8
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
TOTAL LOANS, NET 8,226,269 8,039,823 7,149,836 15.1
========================================= =========== ====== =========== ====== =========== ====== ========
<FN>
</TABLE>
<PAGE>
<TABLE>
FIRST SECURITY CORPORATION
MERGERS AND ACQUISITIONS
(unaudited)
<CAPTION>
Acquisition Offices Assets Deposits
Date: Type: Acquired Institution: Home Office: Acquired: $ 000 $ 000
<S> <C> <C> <C> <C> <C> <C>
- ------ ------------------ ------------------------------------- ----------------------- -------- ----------- -----------
1994:
18-Feb Purchase Equality State Bank 2 branches only, WY 2 31,399 30,545
29-Apr Purchase CrossLand Mortgage Acquisition Corp. Salt Lake City, UT 60 328,068 -
20-May Pool-of-interests Community First Bank Clearfield, UT 5 75,242 62,602
18-Jul Purchase American Ban Corporation Boise, ID 4 75,816 50,914
23-Aug Purchase Star Valley State Bank Afton, WY 2 73,578 57,930
1995:
13-Feb Pool-of-interests Gaskill Insurance Agency, Inc. Ogden, Utah 2 1,447 -
17-Mar Purchase Performance Mortgage Corp. Certain assets only 9 705 -
31-May Pool-of-interests CKC Insurance Salem, OR 1 427 -
- ------ ------------------ ------------------------------------- ----------------------- -------- ----------- -----------
TOTALS 85 586,682 201,991
====== ================== ===================================== ======================= ======== =========== ===========
<FN>
</TABLE>
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
FSCO and its subsidiaries are subject to various claims and legal actions
filed or threatened by customers and others in connection with FSCO's regular
business activities. In all litigation filed against it, FSCO vigorously
defends itself against unfounded claims, with a concomitant cost in legal fees
and expenses. Some legal actions filed against FSCO seek inflated damages,
often in an effort to force compromise of a troubled loan transaction, and are
disclosed in required filings with the SEC. Since the filing of FSCO's 1994
Annual Report on Form 10-K, there have been no material developments in
connection with pending legal proceedings not already disclosed in previous
filings with the SEC.
Item 6. Exhibits, and Reports on Form 8-K
(a). Exhibits:
Exhibit 11. Computation of Earnings Per Share
Exhibit 27. Financial Data Schedule
(b). Reports on Form 8-K:
FSCO filed no reports on Form 8-K during the second quarter of 1995.
# # #
<PAGE>
SIGNATURES
Pursuant to the requirements of the Security Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIRST SECURITY CORPORATION
DATE: August 09, 1995 BY__[SIGNED]________________________________________
Scott C. Ulbrich
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
# # #
EXHIBIT 11. COMPUTATION OF EARNINGS PER SHARE
<TABLE>
FIRST SECURITY CORPORATION
COMPUTATION OF EARNINGS PER SHARE
(in thousands, except per share amounts; unaudited)
<CAPTION>
Three Months Year-To-Date 6 Months
For the Periods Ended June 30, 1995 and 1994 1995 1994 1995 1994
<S> <C> <C> <C> <C>
- ----------------------------------------------------------- ---------- ---------- ---------- ----------
Net Income:
Net income per condensed consoldidated income statements ... 36,233 35,220 71,833 68,382
Deduct dividend requirement of preferred stock ............. 9 10 18 20
- ----------------------------------------------------------- ---------- ---------- ---------- ----------
NET INCOME APPLICABLE TO COMMON STOCK (PRIMARY) 36,224 35,210 71,815 68,362
Add dividend requirement of preferred stock ................ 9 10 18 20
- ----------------------------------------------------------- ---------- ---------- ---------- ----------
NET INCOME FULLY DILUTED 36,233 35,220 71,833 68,382
=========================================================== ========== ========== ========== ==========
Earnings Per Common Share:
EARNINGS PER COMMON SHARE: PRIMARY 0.72 0.71 1.42 1.38
EARNINGS PER COMMON SHARE: FULLY DILUTED 0.71 0.71 1.41 1.38
=========================================================== ========== ========== ========== ==========
Average Common Shares Outstanding:
Common stock ............................................... 50,298 49,344 50,241 49,095
Common stock equivalents (options) ......................... 791 1,025 750 1,022
Treasury shares ............................................ (379) (682) (353) (615)
- ----------------------------------------------------------- ---------- ---------- ---------- ----------
COMMON STOCK SHARES OUTSTANDING: AVERAGE PRIMARY 50,710 49,687 50,638 49,502
Preferred stock: average common equivalents ................ 140 158 142 160
- ----------------------------------------------------------- ---------- ---------- ---------- ----------
COMMON STOCK SHARES OUTSTANDING: AVERAGE FULLY DILUTED 50,850 49,845 50,780 49,662
=========================================================== ========== ========== ========== ==========
<FN>
Note: Earnings Per Common Share Fully Diluted were computed assuming that all outstanding shares of
preferred stock were converted into common stock on the basis of 12.15 shares of common for each share
of preferred, with the elimination of dividends on the preferred stock. Common stock equivalents are
common stock options outstanding accounted for on the treasury stock method for purposes of these
computations.
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<PERIOD-TYPE> QTR-2
<CASH> 665,066
<INT-BEARING-DEPOSITS> 1,116
<FED-FUNDS-SOLD> 118,158
<TRADING-ASSETS> 477,560
<INVESTMENTS-HELD-FOR-SALE> 2,086,509
<INVESTMENTS-CARRYING> 251,982
<INVESTMENTS-MARKET> 254,967
<LOANS> 8,356,657
<ALLOWANCE> (130,388)
<TOTAL-ASSETS> 12,426,179
<DEPOSITS> 8,591,387
<SHORT-TERM> 1,920,093
<LIABILITIES-OTHER> 257,647
<LONG-TERM> 666,858
0
594
<COMMON> 989,600
<OTHER-SE> 0
<TOTAL-LIABILITIES-AND-EQUITY> 12,426,179
<INTEREST-LOAN> 191,075
<INTEREST-INVEST> 34,795
<INTEREST-OTHER> 7,198
<INTEREST-TOTAL> 233,068
<INTEREST-DEPOSIT> 76,535
<INTEREST-EXPENSE> 114,466
<INTEREST-INCOME-NET> 118,602
<LOAN-LOSSES> 3,742
<SECURITIES-GAINS> 29
<EXPENSE-OTHER> 121,362
<INCOME-PRETAX> 57,776
<INCOME-PRE-EXTRAORDINARY> 57,776
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 36,233
<EPS-PRIMARY> 0.72
<EPS-DILUTED> 0.71
<YIELD-ACTUAL> 4.45
<LOANS-NON> 18,702
<LOANS-PAST> 11,076
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 34,118
<ALLOWANCE-OPEN> 131,603
<CHARGE-OFFS> 12,199
<RECOVERIES> (7,242)
<ALLOWANCE-CLOSE> 130,388
<ALLOWANCE-DOMESTIC> 130,388
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
