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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 December 19, 1995
Commission File Number 1-6906
FIRST SECURITY CORPORATION
(Exact name of registrant as specified in its charter)
State of incorporation Delaware
I.R.S. Employer Identification No. 87-6118148
Address of principal executive offices 79 South Main, P.O. Box 30006
Salt Lake City, Utah
Zip Code 84130-0006
Registrant's telephone number, including area code (801) 246-5706
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Item 5. Other Information
On December 14, 1995, First Security Corporation ("FSCO") issued a press
release announcing the results of Project "VISION", its corporate redesign
effort, a copy of which is attached to this report as Exhibit A.
On December 18, 1995, FSCO issued a press release announcing a Common Stock
buy-back program, a copy of which is attached to this report as Exhibit B.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
FIRST SECURITY CORPORATION
(Registrant)
[SIGNED] December 18, 1995
_______________________________________________________ ____________________
Scott C. Ulbrich (Date)
Executive Vice President, Finance and Capital Markets
and Chief Financial Officer
(Principal Financial and Accounting Officer)
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EXHIBIT A
FIRST SECURITY NEWS
FOR RELEASE AT 2:00 P.M. MST CONTACT: Scott Ulbrich
December 14, 1995 Chief Financial Officer
(801) 246-5706
Kenny Thomas
Asst. VP Public Relations
(801)-246-5535
FIRST SECURITY ANNOUNCES
RESULT OF ITS CORPORATE REDESIGN
Company To Implement 2,800 Ideas From Employees
SALT LAKE CITY, UTAH -- First Security Corporation today announced the
results of a comprehensive six-month corporate redesign effort. According to
company officials, the redesign will improve customer service, create a more
efficient First Security by eliminating unnecessary duplicate efforts, and
equip employees with more decision-making authority. Combined, these changes
will lead to significantly increased shareholder value.
"We are creating a new corporation that will allow First Security to remain
a high performance, viable competitor within the current climate of mergers
and takeovers in the financial services industry," says Spencer F. Eccles,
chairman and chief executive officer of First Security Corporation. "These
changes will direct our energy toward meeting the increasingly sophisticated
needs of our customers."
To meet these needs, First Security will be reorganized around three
organizational business units: Community Banking Services, Retail Lending
Services and Business Banking Services. Each of the new units will benefit
from a major investment in state-of-the-art technology that will allow them to
better serve their customers.
To facilitate the redesigned company, a new corporate structure will be
created in which First Security will combine its Utah and Idaho bank charters
into a single national bank, and all banks and subsidiaries within First
Security's six-state market region will begin operating as a single unit.
First Security Vision and Values
To help bring focus to First Security's role in the rapidly-changing
banking industry, the company completed a corporate strategic plan based on an
examination of First Security's performance within the financial services
industry. The VISION redesign process emerged from the corporate strategic
plan in early 1995 as an important component necessary to achieve the goals of
the plan.
First Security began its Project VISION in July, and operated the program
within the framework of the company's corporate mission and values.
"This redesign was undertaken from a position of strength and is a natural
outgrowth of our strategic plan," says Eccles. "Not a one-time exercise,
VISION is consistent with the on-going self-examination that is a part of our
heritage as the oldest multi-state bank holding company in the United States."
To assist in the VISION redesign, First Security engaged Aston Limited
Partners of New York. Aston is recognized within the banking industry for its
expertise in corporate redesign."
"VISION was a unique redesign process in that every employee in the company
had the opportunity to participate," says Eccles. "Through brainstorming and
critical internal examination, employees submitted nearly 7,000 ideas for
consideration; 2,800 of which will be implemented."
Financial Impact
According to Eccles, VISION-redesign related changes will result in $51.4
million total process cost savings and $10.5 million total revenue
enhancements, a $61.9 million total positive pre-tax financial impact and a
$37.8 million after-tax financial impact. Its full-year per-share positive
financial impact is expected to be $0.74 by December 1996 following full
implementation of the redesign. In addition, First Security will take a $43.9
million pre-tax restructuring charge in the fourth quarter of 1995, related to
the redesign. This charge equates to $27.7 million on an after-tax basis, or
$0.54 per share.
"We believe these numbers are impressive and that our expected positive
financial impact is consistent with what we have set out to achieve through
our redesign," added Eccles. "This is good news for our shareholders and it
is good news for our customers because changes are focused on improved
customer service."
Process and Organizational Changes
To implement the results outlined in the VISION redesign, First Security
will undergo broad changes in the way it does business and its organizational
structure. Every idea for change and improvement was developed and approved
based upon enhancing, first, customer service and value; second, efficiency by
eliminating duplications and redundancies; third, local decision-making
responsibility and authority.
First Security will be reorganized into three organizational business units
around its customer segments: Community Banking Services, Retail Lending
Services and Business Banking Services. "In the past, our products had a
'one-size-fits-all' look," says Eccles. "The creation of these customer
driven units will allow us to develop and deliver products that are tailored
to each customer."
Community Banking Services, which consists of First Security's branch
system, will act as the bank's "front door" for consumers. Its branches will
undergo a basic redesign in which each location will be staffed and tailored
with specific products and services for the geographic area it serves. New
banking technologies and methods will supply employees with the tools
necessary to provide quicker service, as well as offer a full range of
products.
"We conducted an extensive review of our branches and received input from
front-line employees on ways to improve our services," says Eccles. "The
branch changes we are implementing reflect their great ideas."
Because new technologies and more efficient processes will increase the
profitability of most branches, only 17 of 271 branches will be consolidated
throughout the First Security system. However, Eccles notes some 13 new
outlets will also be opened during 1996.
"We will consolidate some branches, but also expect to create new branch
locations strategically with some located in shopping outlets such as
supermarkets," says Eccles. "However, because of our deep commitment to the
communities we serve, First Security will not abandon any rural communities
that do not have other banking services."
The company is also creating an expanded telephonic customer service center
which will provide consumers with one-stop shopping for all of their financial
service needs. Customers will now have user-friendly access to a wide range
of First Security products and services.
The Retail Lending Services unit will offer consumers a full range of
retail credit products and loans. This area incorporates First Security's
fully-integrated dealer, developer and homebuilder lending operations, ranging
from land or dealership acquisition to the individual home mortgage or auto
loans. Customers will enjoy a simplified loan procedure, and a labor-
intensive loan approval process will be replaced with a quicker response based
on local decision-making authority and automation.
A small business center will also be created to process loans under
$100,000 and increase cross-selling. The small business center will utilize a
highly streamlined, automated underwriting system to provide quicker
turnaround on loan applications.
First Security's mortgage banking subsidiary, CrossLand Mortgage Company,
will continue to operate independently of First Security's Bank mortgage, but
shared support functions will be consolidated into CrossLand Mortgage. This
will allow both CrossLand Mortgage and First Security Bank mortgage services
to improve their efficiencies and revenue generation potential.
Business Banking Services will bring all of First Security's business
products into one organization. It will focus on quicker answers to loan
applications by putting credit authority closer to customers, and simplifying
its entire loan process to increase customer responsiveness. First Security
will maintain its sound credit policies and superior asset quality throughout
all of these changes.
The Business Banking sales teams will also be restructured to take
advantage of First Security's broad product line and encourage cross-selling
of all products including corporate and institutional trust, leasing, cash
management and international banking.
Capital Markets & Finance, Technology & Processing Services and Corporate
Services are the three new functional units created by First Security.
Together, with the three customer-focused business units, these new units will
comprise the new First Security organizational structure.
Spencer F. Eccles is continuing as chairman/chief executive officer; Morgan
J. Evans is president/chief operating officer; and each of the organizational
units will be headed by an executive vice president. Together these eight
leaders will make up the new First Security Management Committee.
Charter Combinations
First Security will combine the charters of its Utah and Idaho banks into a
single national bank. Further, all banks and subsidiaries within First
Security's six-state market region will begin operating as though they were a
single bank.
This will allow the company to cross geographic barriers to standardize its
policy and administrative functions. The charter combination and one company
approach will help eliminate inefficiencies and duplications, and create an
empowering corporate culture with an emphasis on streamlined, local decision
making.
Impact on Staffing
First Security's redesign will have a direct impact on its current staffing
levels. Eccles notes the company has done everything possible to minimize the
number of involuntary staff reductions required for the results of VISION to
be implemented.
"We are saddened by the inevitable departure of some of our employees,"
says Eccles. "We did everything possible to keep involuntary departures to a
minimum. In fact, involuntary separations as a percentage of our full-time-
equivalent employee base represent just 8.4%. All of those leaving the
company have made significant contributions to our past success, and I wish to
thank each of them for all they have done."
To keep involuntary separations to a minimum, First Security instituted a
hiring freeze and a voluntary election out program. Company officials report
569 employees are leaving the company involuntarily, most of whom have work-
through dates scheduled into 1996, 249 employees chose to leave the company
voluntarily, 82 employees will be placed in a re-deployment pool, 211
positions were absorbed by the hiring freeze, and 466 positions will be
assimilated through attrition in 1996.
With $12.7 billion in assets and $8.7 billion in deposits, First Security
Corporation is the largest financial services organization headquartered in
the Intermountain West. Incorporated in 1928, it is the nation's oldest
multistate bank holding company. The Corporation's six banks currently
operate 271 full service domestic bank offices in Utah, Idaho, New Mexico,
Oregon, Nevada, and Wyoming. Subsidiaries include a residential mortgage loan
company, a leasing company, two insurance companies, an investment management
company, a full-service securities broker/dealer operation, a bankcard
transaction processing company, an information technology subsidiary, a small
business investment corporation and a foreign exchange trading subsidiary.
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EXHIBIT B
FIRST SECURITY NEWS
FOR IMMEDIATE RELEASE CONTACT: Scott Ulbrich
December 18, 1995 Chief Financial Officer
(801) 246-5706
FIRST SECURITY ANNOUNCES STOCK BUY-BACK PROGRAM
SALT LAKE CITY, UTAH -- First Security Corporation announced today that it
will begin to repurchase up to 2% of its outstanding Common Stock or
approximately one million shares. No time limit was set to complete the stock
buy-back program. The shares will be purchased at prevailing prices in the
open market as permitted by applicable rules.
With $12.7 billion in assets and $8.7 billion in deposits, First Security
Corporation is the largest financial services organization headquartered in
the Intermountain West. Incorporated in 1928, it is the nation's oldest
multistate bank holding company. The Corporation's six banks currently
operate 271 full service domestic bank offices in Utah, Idaho, New Mexico,
Oregon, Nevada, and Wyoming. Subsidiaries include a residential mortgage loan
company, a leasing company, two insurance companies, an investment management
company, a full-service securities broker/dealer operation, a bankcard
transaction processing company, an information technology subsidiary, a small
business investment corporation and a foreign exchange trading subsidiary.
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