<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 March 31, 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 April 28, 1995, outstanding shares of Common Stock, par value $1.25 were
49,907,755 shares (net of 383,191 treasury shares).
<PAGE>
FIRST SECURITY CORPORATION
INDEX
Part I. Financial Information
Item 1. Financial Statements:
Condensed Consolidated Income Statements
Three Months Ended
March 31, 1995 and 1994
Condensed Consolidated Balance Sheets
March 31, 1995, December 31, 1994, and March 31, 1994
Condensed Consolidated Statements of Cash Flows
Year-To-Date Three Months Ended
March 31, 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 4. Submission of Matters to a Vote of Security Holders
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
For the Periods Ended March 31, 1995 and 1994 1995 1994 %Chg
<S> <C> <C> <C>
- ----------------------------------------------------------- ---------- ---------- ------
INTEREST INCOME:
Interest & fees on loans.................................... 178,462 136,003 31.2
Federal funds sold, securities purchased.................... 938 707 32.7
Interest-bearing deposits in other banks.................... 18 30 (40.0)
Trading account securities.................................. 8,135 9,526 (14.6)
Securities available for sale............................... 29,261 23,249 25.9
Securities held to maturity................................. 3,736 2,923 27.8
- ----------------------------------------------------------- ---------- ---------- ------
TOTAL INTEREST INCOME 220,550 172,438 27.9
- ----------------------------------------------------------- ---------- ---------- ------
INTEREST EXPENSE:
Deposits.................................................... 65,988 47,193 39.8
Short-term borrowings....................................... 33,378 10,666 212.9
Long-term debt.............................................. 12,122 4,312 181.1
- ----------------------------------------------------------- ---------- ---------- ------
TOTAL INTEREST EXPENSE 111,488 62,171 79.3
- ----------------------------------------------------------- ---------- ---------- ------
Net Interest Income:
NET INTEREST INCOME 109,062 110,267 (1.1)
Provision for loan losses................................... 2,848 (172) NA
- ----------------------------------------------------------- ---------- ---------- ------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 106,214 110,439 (3.8)
- ----------------------------------------------------------- ---------- ---------- ------
NONINTEREST INCOME:
Service charges on deposit accounts......................... 16,367 14,860 10.1
Other service charges, collections, commissions and fees.... 7,417 6,257 18.5
Bankcard servicing fees & third-party processing fees....... 5,982 8,711 (31.3)
Fiduciary (trust) commissions & fees........................ 5,030 4,853 3.6
Insurance commissions & fees................................ 3,695 2,601 42.1
Servicing fees on loans sold................................ 6,619 1,494 343.0
Gain on sales of loans & servicing rights................... 13,414 3,347 300.8
Securities gains (losses)................................... 903 249 262.7
Trading account securities gains (losses)................... 5,673 (3,310) NA
Other....................................................... 5,772 1,807 219.4
- ----------------------------------------------------------- ---------- ---------- ------
TOTAL NONINTEREST INCOME 70,872 40,869 73.4
- ----------------------------------------------------------- ---------- ---------- ------
TOTAL INCOME 177,086 151,308 17.0
- ----------------------------------------------------------- ---------- ---------- ------
NONINTEREST EXPENSES:
Salaries and employee benefits.............................. 62,188 49,311 26.1
Advertising................................................. 2,077 1,344 54.5
Amortization of intangibles................................. 5,051 761 563.7
Bankcard interbank interchange.............................. 4,471 3,671 21.8
Furniture and equipment..................................... 9,223 6,674 38.2
Insurance................................................... 5,988 5,346 12.0
Occupancy, net.............................................. 7,029 5,751 22.2
Other real estate expense & loss provision (recovery)....... (499) 28 (1,882.1)
Stationery and supplies..................................... 4,070 4,003 1.7
Telephone................................................... 3,100 2,450 26.5
Other....................................................... 18,033 20,243 (10.9)
- ----------------------------------------------------------- ---------- ---------- ------
TOTAL NONINTEREST EXPENSES 120,731 99,582 21.2
- ----------------------------------------------------------- ---------- ---------- ------
INCOME BEFORE INCOME TAX PROVISION 56,355 51,726 8.9
- ----------------------------------------------------------- ---------- ---------- ------
PROVISION FOR INCOME TAXES:
Operating earnings.......................................... 20,420 18,478 10.5
Investment securities gains (losses)........................ 335 86 289.5
- ----------------------------------------------------------- ---------- ---------- ------
TOTAL PROVISION FOR INCOME TAXES 20,755 18,564 11.8
- ----------------------------------------------------------- ---------- ---------- ------
Net Income:
NET INCOME 35,600 33,162 7.4
=========================================================== ========== ========== ======
Preferred stock dividend requirement........................ 9 10 (10.0)
- ----------------------------------------------------------- ---------- ---------- ------
NET INCOME APPLICABLE TO COMMON STOCK 35,591 33,152 7.4
=========================================================== ========== ========== ======
Earnings Per Common Share:
Earnings per common share: primary.......................... 0.70 0.67 4.5
Earnings per common share: fully diluted.................... 0.70 0.67 4.5
Common stock shares outstanding: average primary............ 50,566 49,316 2.5
Common stock shares outstanding: average fully diluted...... 50,709 49,478 2.5
=========================================================== ========== ========== ======
Cash Dividends Paid or Accrued Per Share:
Preferred Stock ($3.15 annual rate)......................... 0.79 0.79
Common stock................................................ 0.28 0.26 7.7
=========================================================== ========== ========== ======
<FN>
See "Notes to Condensed Consolidated Financial Statements".
</TABLE>
<PAGE>
<TABLE>
FIRST SECURITY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands; unaudited)
<CAPTION>
March 31 December 31 March 31 Mar/Mar
1995 1994 1994 % Chg
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------- ------------ ------------ ------------ ---------
ASSETS:
Cash and due from banks................................................. 605,218 678,353 622,042 (2.7)
Federal funds sold, securities purchased under resale agreements........ 209,114 43,551 112,997 85.1
- ----------------------------------------------------------------------- ------------ ------------ ------------ ---------
Total cash and cash equivalents 814,332 721,904 735,039 10.8
Interest-bearing deposits in other banks................................ 1,486 1,585 1,842 (19.3)
Trading account securities.............................................. 437,415 553,826 797,254 (45.1)
Securities available for sale, at fair value............................ 2,044,257 1,993,797 1,960,075 4.3
(Amortized cost: $2,080,988; $2,080,408; $1,972,781; respectively)
Securities held to maturity, at cost.................................... 243,915 252,622 270,039 (9.7)
(Fair value: $244,619; $249,971; $273,946; respectively)
- ----------------------------------------------------------------------- ------------ ------------ ------------ ---------
Loans, net of unearned income........................................... 8,183,306 8,173,678 6,674,067 22.6
(Unearned income: $6,018; $7,380; $10,964; respectively)
Reserve for loan losses................................................. (131,603) (133,855) (134,216) (1.9)
- ----------------------------------------------------------------------- ------------ ------------ ------------ ---------
Total loans, net 8,051,703 8,039,823 6,539,851 23.1
- ----------------------------------------------------------------------- ------------ ------------ ------------ ---------
Premises and equipment, net............................................. 194,112 188,418 151,099 28.5
Accrued income receivable............................................... 77,908 85,655 57,942 34.5
Other real estate and other foreclosed assets........................... 2,334 3,352 14,842 (84.3)
Other assets............................................................ 172,020 141,801 204,602 (15.9)
- ----------------------------------------------------------------------- ------------ ------------ ------------ ---------
Goodwill................................................................ 105,554 106,827 7,325 1,341.0
Mortgage servicing rights............................................... 41,401 56,147 809 5,017.6
Other intangible assets................................................. 2,873 3,225 4,564 (37.1)
- ----------------------------------------------------------------------- ------------ ------------ ------------ ---------
Total intangible assets............................................... 149,828 166,199 12,698 1,079.9
- ----------------------------------------------------------------------- ------------ ------------ ------------ ---------
TOTAL ASSETS 12,189,310 12,148,982 10,745,283 13.4
======================================================================= ============ ============ ============ =========
LIABILITIES AND STOCKHOLDERS' EQUITY:
Noninterest-bearing deposits............................................ 1,655,669 1,719,388 1,556,498 6.4
Interest-bearing deposits............................................... 6,617,045 6,333,956 5,953,168 11.2
- ----------------------------------------------------------------------- ------------ ------------ ------------ ---------
Total deposits 8,272,714 8,053,344 7,509,666 10.2
- ----------------------------------------------------------------------- ------------ ------------ ------------ ---------
Federal funds purchased, securities sold under repurchase agreements.... 1,906,256 2,160,587 1,804,986 5.6
U.S. Treasury demand notes.............................................. 20,632 33,552 22,467 (8.2)
Other short-term borrowings............................................. 150,036 151,000 20,647 626.7
Accrued income taxes.................................................... 120,832 81,710 96,680 25.0
Accrued interest payable................................................ 34,330 27,709 15,105 127.3
Other liabilities....................................................... 53,779 65,911 136,287 (60.5)
Long-term debt.......................................................... 683,785 685,426 297,538 129.8
Minority equity in subsidiaries......................................... 285 269 260 9.6
- ----------------------------------------------------------------------- ------------ ------------ ------------ ---------
TOTAL LIABILITIES 11,242,649 11,259,508 9,903,636 13.5
- ----------------------------------------------------------------------- ------------ ------------ ------------ ---------
STOCKHOLDERS' EQUITY:
Preferred stockholders' equity: Series "A" $3.15 cumulative convertible. 610 629 685 (10.9)
(Shares outstanding: 12; 12; 13; respectively)
- ----------------------------------------------------------------------- ------------ ------------ ------------ ---------
Common Stockholders' Equity:
Common stock: par value $1.25.......................................... 62,850 62,446 61,120 2.8
(Shares outstanding: 50,280; 48,787; 48,896; respectively)
Paid-in surplus......................................................... 147,331 142,928 125,044 17.8
Retained earnings....................................................... 768,064 746,454 677,954 13.3
Net unrealized gain (loss) on securities available for sale ............ (23,158) (54,341) (8,001) 189.4
- ----------------------------------------------------------------------- ------------ ------------ ------------ ---------
Subtotal 955,087 897,487 856,117 11.6
- ----------------------------------------------------------------------- ------------ ------------ ------------ ---------
Common treasury stock, at cost (9,036) (8,642) (15,155) (40.4)
(Shares: 373; 350; 680; respectively)
- ----------------------------------------------------------------------- ------------ ------------ ------------ ---------
Total common stockholders' equity 946,051 888,845 840,962 12.5
- ----------------------------------------------------------------------- ------------ ------------ ------------ ---------
TOTAL STOCKHOLDERS' EQUITY 946,661 889,474 841,647 12.5
- ----------------------------------------------------------------------- ------------ ------------ ------------ ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 12,189,310 12,148,982 10,745,283 13.4
======================================================================= ============ ============ ============ =========
<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 3 Months
For the Periods Ended March 31, 1995 and 1994 1995 1994
<S> <C> <C>
- ----------------------------------------------------------------------- ----------- -----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 303,335 145,173
- ----------------------------------------------------------------------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of securities available for sale ................... 0 286,068
Redemption of matured securities available for sale .................... 312,707 205,901
Redemption of matured securities held to maturity ...................... 8,703 23,018
Purchases of securities available for sale ............................. (311,969) (962,547)
Purchases of securities held to maturity ............................... (943) (19,688)
Net (increase) decrease in interest-bearing deposits in other banks .... 324 14,619
Net (increase) decrease in loans ....................................... (138,038) (381,254)
Purchases of premises and equipment .................................... (8,895) (13,210)
Proceeds from sales of other real estate ............................... 2,636 6,282
Payments to improve other real estate .................................. (134) (593)
Net cash (paid for) received from acquisitions ......................... 354 1,869
- ----------------------------------------------------------------------- ----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (135,255) (839,535)
- ----------------------------------------------------------------------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase (decrease) in deposits .................................... 219,370 (24,586)
Net increase (decrease) in Federal funds purchased, securities sold
under repurchase agreements, and U.S. Treasury demand notes .......... (267,252) 396,699
Payments on nonrecourse debt on leveraged leases ....................... (15,080) (15,782)
Proceeds from issuance of long-term debt and short-term borrowings ..... 37 74,704
Payments on long-term debt and short-term borrowings ................... (2,856) (37,506)
Proceeds from issuance of common stock and sales of treasury stock ..... 7,020 3,119
Purchases of treasury stock ............................................ (2,901) (9,704)
Dividends paid ......................................................... (13,990) (12,574)
- ----------------------------------------------------------------------- ----------- -----------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (75,652) 374,370
- ----------------------------------------------------------------------- ----------- -----------
NET CHANGE IN CASH AND CASH EQUIVALENTS 92,428 (319,992)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 721,904 1,055,031
- ----------------------------------------------------------------------- ----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD 814,332 735,039
======================================================================= =========== ===========
<FN>
See "Notes to Condensed Consolidated Financial Statements".
</TABLE>
<TABLE>
FIRST SECURITY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)
(in thousands; unaudited)
<CAPTION>
Year-To-Date 3 Months
For the Periods Ended March 31, 1995 and 1994 1995 1994
<S> <C> <C>
- ----------------------------------------------------------------------- ----------- -----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for:
Interest ............................................................. 104,867 65,909
Income taxes ......................................................... 43 2,281
======================================================================= =========== ===========
Supplemental Schedule of Noncash Investing and Financing Activities:
Conversion of preferred shares to common shares:
Preferred shares converted ......................................... 352 346
Common shares issued ............................................... 4,272 3,277
Conversion value ................................................... 18 18
Transfer of loans to other real estate.................................. 935 3,777
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) ................................... 31,183 (8,001)
Pooling-of-interests acquisitions:
Assets acquired ...................................................... 1,447 0
Liabilities assumed .................................................. 1,173 0
FSC shares issued .................................................... 99 0
Purchase acquisitions:
Fair value of assets acquired ........................................ 0 29,363
Liabilities assumed .................................................. 0 30,596
Cash paid for the capital stock ...................................... 0 1,233
FSC shares issued .................................................... 0 0
======================================================================= =========== ===========
<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 in the
periods ended March 31, 1995 and 1994; FSCO's financial position as of March
31, 1995, December 31, 1994, and March 31, 1994; and cash flows for the year-
to-date three months in the periods ended March 31, 1995 and 1994.
2. The results of operations for the three months ended March 31, 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 2 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.
* 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.
* On February 13, 1995, First Security Insurance, Inc. acquired Gaskill
Insurance Agency, Inc. (located in Ogden, Utah) with 2 offices and $1.45
million in assets. This acquisition was accounted for using the pooling-of-
interests method of accounting.
* On March 17, 1995, CrossLand Mortgage acquired assets totaling $705
thousand of Performance Mortgage Corp. (headquartered in Santa Ann,
California), including 9 offices. This acquisition was accounted for using
the purchase method of accounting.
4. For purposes of reporting cash flows, cash and cash equivalents included
cash and due from banks, as well as Federal funds sold and securities
purchased under resale agreements.
5. At March 31, 1995, securities available for sale had a fair value of $2.04
billion and an amortized cost basis of $2.08 billion, which included gross
unrealized gains of $7.93 million and gross unrealized losses of $44.66
million that were recognized in stockholders' equity on a tax-effected basis
as a $23.16 million net unrealized loss on securities available for sale.
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.
At March 31, 1995, securities held to maturity had a fair value of $244.62
million and an amortized cost basis of $243.92 million, which included gross
unrealized gains of $3.47 million and gross unrealized losses of $2.76 million
or a $704 thousand net unrealized gain on securities held to maturity.
6. On January 1, 1995, FSCO adopted SFAS 114, "Accounting by Creditors for
Impairment of a Loan" as amended by SFAS 118 "Accounting by Creditors for
Impairment of a Loan - Income Recognition and Disclosures". A loan is
considered impaired under SFAS 114 and 118 when, based on current information,
it is probable that the lender will not be able to collect all of the
principal and interest due under the contractual terms of the loan. SFAS 114
and 118 require that impairment of a loan is measured based on: the present
value of expected future cash flows discounted at the loan's effective
interest rate; the loan's observable market price; or the fair value of the
loan's collateral if it is collateral dependent. SFAS 114 does not apply to:
large groups of smaller balance homogeneous loans that are collectively
evaluated for impairment; loans measured at fair value or at the lower of cost
or market; leases as defined in SFAS 13; nor to debt securities as defined in
SFAS 115. For FSCO, loans collectively reviewed for impairment include all
credit card, residential mortgage, and consumer instalment loans, plus
commercial, multi-family real estate, and commercial real estate loans under
$1 million. FSCO's policy for recognizing income and for recording cash
receipts on its impaired loans is the same as for its nonaccruing loans.
The impact of SFAS Nos. 114 and 118 on FSCO and its subsidiaries has not
been, and is not expected to be, material in relation to FSCO's consolidated
financial statements.
# # #
<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 $35.60
million for the first quarter of 1995, an increase of $2.44 million (7.4%)
from $33.16 million earned in the first quarter of 1994 (see: Financial
Statements "Condensed Consolidated Income Statements"; and Supplemental Tables
"Financial Highlights"). These earnings generated a 1.19% return on average
assets ("ROAA") and a 15.71% return on average equity ("ROAE") for the
quarter, compared with a 1.34% ROAA and a 15.74% ROAE for the year-ago
quarter. Fully-diluted earnings per share were $0.70 for the quarter, up
$0.03 (4.5%) from $0.67 for the year-ago quarter.
Since March 31, 1994, FSCO has completed 6 acquisitions, including
CrossLand Mortgage which was one of the largest cash purchases ever made by
FSCO (see: MDA "Mergers and Acquisitions"). The combined impact of these
acquisitions has substantially impacted FSCO's operations, particularly in the
areas of noninterest income and noninterest expenses.
Net Interest Income
Net interest income on a fully-taxable equivalent ("FTE") basis was $111.09
million for the first quarter of 1995, down $1.14 million (1.0%) from the
year-ago quarter (see: Supplemental Tables "Financial Highlights" and "Rate /
Volume Analysis"). The FTE net interest margin was 4.06% for the first
quarter of 1995, down from 4.92% for the year-ago quarter.
These decreases reflected FSCO's increased reliance on interest-bearing
liabilities to support the strong loan originations throughout FSCO's market
areas which generated a 24.2% growth in average loans and a 19.9% growth in
average earning assets from the first quarter of 1994 to the first quarter of
1995. This growth exceeded the 1.5% increase in average noninterest-bearing
deposits and the 8.0% increase in average total deposits that occurred during
the same period. During the first quarter of 1995, deposit costs increased as
transactional and savings account balances declined and were replaced with
certificates of deposit (CDs), and as FSCO took aggressive steps to add CDs to
its funding structure in order to extend maturities, moderate interest rate
risk, and increase general liquidity.
Provision for Loan Losses
The provision for loan losses was $2.85 million for the first quarter of
1995, up $3.02 million from a net recovery in 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"). This was primarily due to net loans charged off, which were
$5.10 million for the quarter, up $4.43 million (665.8%) from the year-ago
quarter. Although the provision increased, it remained near historically low
levels as FSCO continued to maintain very strong asset quality. The ratio of
net loan chargeoffs to average loans was 0.25% for the quarter, up from 0.04%
for the year-ago quarter.
Noninterest Income
FSCO's noninterest income and expenses have been impacted by recent
acquisitions (see: Financial Statements "Condensed Consolidated Income
Statements"; and MDA "Mergers and Acquisitions"). As a result, comparisons of
FSCO's noninterest income and noninterest expenses for the first quarter of
1995 with those of the first quarter of 1994 are not as indicative of FSCO's
true performance as are comparisons of the first quarter of 1995 with the
fourth quarter of 1994, which are included for that purpose.
Noninterest income was $70.87 million for the first quarter of 1995, up
$30.00 million (73.4%) from the year-ago quarter. The increases in most
noninterest income categories were due to volume-related growth and
acquisitions, plus the impact of CrossLand Mortgage on real estate lending
activities. The increase in gain on sales of loans and servicing rights
occurred as CrossLand Mortgage took advantage of an exceptionally strong loan
servicing market and sold loan servicing rights in a bulk sale, generating a
$7.50 million pre-tax gain. 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.
Noninterest income for the first quarter of 1995 was up $12.52 million
(21.4%) from the fourth quarter of 1994. After adjusting for the $7.50
million gain on the sale of loan servicing rights, noninterest income rose
quarter to quarter by $5.02 million (8.6%), with increases achieved in nearly
every category.
Noninterest Expenses
Noninterest expenses were $120.73 million for the first quarter of 1995, up
$21.15 million (21.2%) from the year-ago quarter (see: Financial Statements
"Condensed Consolidated Income Statements"; and MDA "Mergers and
Acquisitions"). These increases were due to volume-related growth and
acquisitions. After excluding the noninterest expenses of CrossLand Mortgage,
FSCO's noninterest expenses were $106.98 million for the first quarter of
1995, up $7.40 million (7.4%) from the year-ago quarter.
Noninterest expenses for the first quarter of 1995 were up only $3.40
million (2.9%) from the fourth quarter of 1994. Excluding other real estate
(ORE) expenses and ORE loss provisions, noninterest expenses increased by only
$493 thousand (0.4%) during this period.
FSCO's efficiency ratio was 66.35% for the first quarter of 1995, compared
with 65.04% for the year-ago quarter and down from 66.95% for the fourth
quarter of 1994.
CrossLand Mortgage has not yet achieved its objective of a neutral impact
on FSCO's 1995 pre-tax earnings. However, CrossLand Mortgage has not only
been successful in cutting its noninterest expenses, but has also made
significant adjustments to address changes in the mortgage production market
and toward integrating into FSCO's corporate structure.
ANALYSIS OF FINANCIAL CONDITION
In the first quarter of 1995, FSCO continued to increase its interest-
earning assets, strengthen its asset quality, improve its liquidity, and
maintain a well-capitalized position, as compared with March 31, 1994 and
December 31, 1994.
FSCO's assets totaled $12.19 billion at March 31, 1995, up $1.44 billion
(13.4%) from March 31, 1994, but remaining essentially unchanged from December
31, 1994. Total earning assets were $11.12 billion at quarter end, up $1.30
billion (13.3%) from one year ago, and up $100 million (0.9%) 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 $149.83 million at March 31,
1995, up $137.13 million (1,079.9%) from March 31, 1994, but down $16.37
million (9.9%) from December 31, 1994. The increase from one year ago was due
to the intangible assets created by the acquisition of CrossLand Mortgage,
while the decrease from the year end was due to the effects of ongoing
amortization plus the sale of mortgage servicing rights.
FSCO's liabilities totaled $11.24 billion at March 31, 1995, up $1.34
billion (13.5%) from March 31, 1994, but essentially unchanged from December
31, 1994. Total interest-bearing liabilities were $9.38 billion at quarter
end, up $1.28 billion (15.8%) from one year ago, also essentially unchanged
from the year end (see: MDA "Liquidity"). Interest-bearing liabilities were
increased to support loan growth.
Total stockholders' equity in FSCO increased to a record $946.66 million at
March 31, 1995, up $105.01 million (12.5%) from March 31, 1994, and up $57.19
million (6.4%) from December 31, 1994 (see: MDA "Stockholders' Equity and
Capital Adequacy"). This growth was due primarily to record earnings in 1994
combined with the effects of pooling-of-interests mergers.
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 $8.18 billion at March 31, 1995, up $1.51 billion (22.6%)
from March 31, 1994, but essentially unchanged 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 67.14% at March 31, 1995, compared with 62.11% one year
ago and 67.28% at year-end.
The components of FSCO's loan portfolio at March 31, 1995, compared with
March 31, 1994, and December 31, 1994, respectively, included:
* Commercial loans were $1.85 billion, up $315 million (20.5%) from one
year ago, and up $16 million (0.9%) from year end. This growth was due
primarily to increases in loans made to FSCO's small- and middle-market
customers.
* Real estate secured loans were $3.16 billion, up $611 million (23.9%)
from one year ago, and up $20 million (0.6%) from year end. This growth was
due in large part to increased retention of loans, which were primarily
adjustable-rate mortgages, combined with the CrossLand Mortgage acquisition
and the effects of other acquisitions. For balance sheet management purposes,
FSCO did not retain all newly-originated fixed-rate mortgage loans but sold
the majority to secondary markets.
* Consumer loans were $2.83 billion, up $523 million (22.7%) 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 FSCO's primary market area.
Problem Assets
Problem assets were reduced to $33.06 million at March 31, 1995, down
$19.87 million (37.5%) from March 31, 1994, and down $6.16 million (15.7%)
from December 31, 1994 (see: Supplemental Tables "Financial Highlights -
Problem Assets, - Selected Ratios"). The ratio of total problem assets to
total loans and ORE was 0.40% at quarter end, down from 0.79% one year ago and
0.48% at year end. These decreases were due to a healthy regional economy and
continued high loan underwriting standards. Despite a general downward trend
in problem assets over the past two years, it has been FSCO's experience that
economic cycles and loan-specific events beyond its control cause cyclical
fluctuations in problem assets, sometimes with little or no warning. This has
led FSCO to take a conservative approach in its analysis of the reserve for
loan losses.
The components of FSCO's problem assets at March 31, 1995, compared with
March 31, 1994, and December 31, 1994, respectively, included:
* Nonaccruing loans were $19.21 million, down $8.56 million (30.8%) from
one year ago, and down $4.66 million (19.5%) from year end. The ratio of
nonaccruing loans to total loans was 0.23%, down from 0.42% and 0.29%.
* ORE and other foreclosed assets were $2.33 million, down $12.51 million
(84.3%) from one year ago, and down $1.02 million (30.4%) from year end.
These decreases were due in part to the resolution of older problem assets.
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 $11.52 million, up $1.20
million (11.6%) from one year ago, but down $483 thousand (4.0%) from year
end.
Potential problem loans identified by FSCO were $18.26 million at March 31,
1995, down $5.05 million (21.7%) from $23.31 at March 31, 1994 due to the
liquidation of several loans that were previously classified as potential
problem loans, but up $6.24 million (51.9%) from $12.02 at December 31, 1994
due in part to a deterioration of agricultural and small commercial loans.
Potential problem loans consisted primarily of commercial loans and
agricultural loans.
Reserve for Loan Losses:
It is FSCO's philosophy to maintain a conservative balance sheet, including
its reserve for loan losses. 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".
The reserve for loan losses was $131.60 million at March 31, 1995, down
$2.61 million (1.9%) from March 31, 1994, and down $2.25 million (1.7%) from
December 31, 1994 (see: Supplemental Tables "Financial Highlights -
Reconciliation of the Reserve for Loan Losses, - Selected Ratios"). These
slight reductions in the reserve were made possible due to improved asset
quality, and the acquisition of CrossLand Mortgage which had loans held for
resale that did not require corresponding reserves for loan losses. The
resulting ratio of the reserve for loan losses to total loans was 1.61% at
quarter end, down from 2.01% 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 685.25% at quarter end, up from 483.35% one year ago and 560.81%
at year end. Merger transactions added reserves of $5.07 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 were $5.10 million for the first quarter of 1995, up $4.43 million
(665.8%) from the year-ago quarter. This was due primarily to increased
consumer loan losses. However, FSCO continued to maintain very 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 0.25% for the
quarter, up from 0.04% for the year-ago quarter.
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 remained essentially unchanged at
$2.04 billion at March 31, 1995, up $84 million (4.3%) from March 31, 1994,
and up $50 million (2.5%) from December 31, 1994. FSCO's securities held to
maturity were $244 million at March 31, 1995, down $26 million (9.7%) from
March 31, 1994, and down $9 million (3.4%) 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 $648.02 million at March 31, 1995, down $264.08 million
(29.0%) from March 31, 1994, but up $49.05 million (8.2%) 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 wide-spread 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 borrowings from the Federal Home Loan Bank of which
FSB Utah, FSB Idaho, and FSB Oregon are members, and from the Federal Reserve
System.
Deposits
* FSCO's deposits totaled $8.27 billion at March 31, 1995, up $763 million
(10.2%) from March 31, 1994, and up $219 million (2.7%) from December 31, 1994
(see: Financial Statements "Condensed Consolidated Balance Sheets" and
Supplemental Tables "Rate / Volume Analysis"). These increases were due to
deposits generated from FSCO's widespread branch network and the positive
impact of recent acquisitions. The mix of deposits at quarter end shifted
slightly as interest-bearing deposits increased to 80.0% of total deposits, up
from 79.3% one year ago and 78.7% at year end. This occurred as FSCO took
aggressive steps to add CDs to its funding structure in order to extend
maturities, moderate interest rate risk, and increase general liquidity.
Borrowed Funds
Borrowed funds totaled $2.76 billion at March 31, 1995, up $615 million
(28.7%) from March 31, 1994, but down $270 million (8.9%) 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 continued strong 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 March 31, 1995, compared with
March 31, 1994, and December 31, 1994, respectively, included:
* Federal funds purchased and securities sold under repurchase agreements
were $1.91 billion, up $101 million (5.6%) from one year ago, but down $254
million (11.8%) from year end.
* All other short-term borrowings were $171 million, up $128 million
(295.9%) from one year ago, but down $14 million (7.5%) from year end.
* Long-term debt was $684 million, up $386 million (129.8%) from one year
ago, but down $2 million (0.2%) from year end.
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 increased to a record $946.66 million at March
31, 1995, up $105.01 million (12.5%) from March 31, 1994, and up $57.19
million (6.4%) from December 31, 1994 (see: Financial Statements "Condensed
Consolidated Balance Sheets"). This growth was due primarily to record
earnings and pooling-of-interests mergers, combined with the impact of
fluctuations in SFAS 115. The ratio of stockholders' equity to total assets
was 7.77% at March 31, 1995, compared with 7.83% one year ago, and up from
7.32% at year end. At the same time, the ratio of tangible common equity to
tangible total assets was 6.61%, compared with 7.72% one year ago and 6.03% 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 fluctuations in SFAS 115.
FSCO's risk-based capital ratios (see: Supplemental Tables "Financial
Highlights - Risk-Based Capital Ratios") at March 31, 1995, compared with
March 31, 1994, and December 31, 1994, respectively, were:
* Tier 1 (well capitalized: 6.0% or above) at 10.00%, compared with 11.51%
one year ago, and 9.84% at year end.
* Total Capital (well capitalized: 10.0% or above) at 12.12%, compared with
13.79% one year ago, and 11.98% at year end.
* Leverage (well capitalized: 5.0% or above) at 7.11%, compared with 7.81%
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, plus fluctuations pursuant to
SFAS 115.
COMMON AND PREFERRED STOCK
On January 23, 1995, FSCO increased its regular quarterly cash dividend to
$0.28 a share, up $0.02 per share (7.7%) from the previous $0.26 per share
paid in each quarter of 1994 (see: Supplemental Tables "Financial
Highlights"). The higher quarterly cash dividend resulted in an indicated
annualized dividend rate of $1.12 per share. At the market closing price of
$23.25 per share on Friday, January 20, 1995 (the last market day before the
announcement of the dividend increase), the annualized dividend yield on
FSCO's Common Stock was 4.82%.
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 March 31, 1994, FSCO has completed 6 acquisitions, including
CrossLand Mortgage which was one of the largest cash purchases ever made by
FSCO. The year-to-year comparisons of FSCO's results of operations and
financial condition were substantially impacted by these acquisitions,
particularly in the areas of noninterest income and noninterest expenses.
On February 13, 1995, First Security Insurance, Inc. acquired Gaskill
Insurance Agency, Inc. (located in Ogden, Utah) with 2 offices and $1.45
million in assets. This acquisition was accounted for using the pooling-of-
interests method of accounting.
On March 17, 1995, CrossLand Mortgage acquired assets totaling $705
thousand of Performance Mortgage Corp. (headquartered in Santa Ann,
California), including 9 offices. This acquisition was accounted for using
the purchase method of accounting.
NATIONAL AND REGIONAL ECONOMY
Throughout the first quarter of 1995, indications of slower national
growth, combined with continued benign inflation reports, helped influence
Treasury note and bond yields to be significantly lower. This change in
market yields occurred despite an additional end-of-January increase in the
Fed funds rate to 6%. The economic softness was centered in residential
construction and consumer spending - particularly for automobiles and other
consumer durables. Additionally, the currency crisis in the Mexican peso will
likely reduce U.S. exports to Mexico substantially in 1995.
The U.S. dollar exchange value declined sharply against the Japanese yen in
the first quarter of 1995. Through mid-April, the U.S. stock and bond markets
had not been directly impacted by the dollar/yen exchange-rate weakness. In
the months ahead, an inflation rate of 3.0% to 3.5% appears probable. This,
together with some ongoing softness in economic growth, suggests that interest
rate stability near current levels appears most probable.
The strong economic growth that characterized the Intermountain West in
1994 has continued in the first quarter of 1995. Population and job gains in
Nevada, Utah, Idaho, and New Mexico remain among the highest in the nation.
Rapid expansion in commercial and industrial construction has helped sustain
overall health in the construction industry. The regional economic outlook
for 1995 remains generally favorable.
# # #
<PAGE>
<TABLE>
FIRST SECURITY CORPORATION
FINANCIAL HIGHLIGHTS
(in thousands, except per share data and ratios; unaudited)
<CAPTION>
1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr Year-To-Date 3 Months
1995 1994 1994 1994 1994 1995 1994 %Chg
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ------
Common Stock Data:
Earnings per common share: primary ............. 0.70 0.69 0.73 0.71 0.67 0.70 0.67 4.5
Earnings per common share: fully diluted ....... 0.70 0.69 0.73 0.71 0.67 0.70 0.67 4.5
Dividends paid per common share ................ 0.28 0.26 0.26 0.26 0.26 0.28 0.26 7.7
Book value EOP ................................. 18.96 17.92 17.88 17.45 17.44 18.96 17.44 8.7
Tangible book value EOP ........................ 15.95 14.57 14.42 14.18 17.18 15.95 17.18 (7.1)
Market price (bid) EOP ......................... 24.00 22.75 28.50 29.00 27.75 24.00 27.75 (13.5)
High bid for the period ...................... 25.63 28.50 32.00 31.00 29.00 25.63 29.00 (11.6)
Low bid for the period ....................... 22.00 21.50 27.75 27.25 25.25 22.00 25.25 (12.9)
Market capitalization EOP: mktprice x #shrs .... 1,197,768 1,128,286 1,411,691 1,426,133 1,337,994 1,197,768 1,337,994 (10.5)
Market price EOP / book value EOP (%) .......... 126.58 126.95 159.40 166.19 159.12 126.58 159.12
Dividend payout ratio: DPS / EPS (%) ........... 40.00 37.68 35.62 36.62 38.81 40.00 38.81
Dividend yield EOP: dividend / market price (%) 4.67 4.57 3.65 3.59 3.75 4.67 3.75
Price / earnings ratio: mktprice / 4 qtrs earn . 8.5 8.1 11.2 11.6 11.6 8.5 11.6
Common shares outstanding: EOP ................. 49,907 49,595 49,533 49,177 48,216 49,907 48,216 3.5
Common shares out: average primary ............. 50,566 50,341 50,350 49,687 49,316 50,566 49,316 2.5
Common shares out: average fully diluted ....... 50,709 50,491 50,505 49,845 49,478 50,709 49,478 2.5
Preferred shares outstanding: EOP .............. 12 12 13 13 13 12 13 (7.7)
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ------
Income Statement:
Interest income ................................ 220,550 211,909 200,365 188,805 172,438 220,550 172,438 27.9
Interest expense ............................... 111,488 96,955 83,829 72,460 62,171 111,488 62,171 79.3
Net interest income ............................ 109,062 114,954 116,536 116,345 110,267 109,062 110,267 (1.1)
Fully-taxable equivalent (FTE) adjustment ...... 2,025 1,944 2,002 1,966 1,963 2,025 1,963 3.2
Net interest income, FTE ....................... 111,087 116,898 118,538 118,311 112,230 111,087 112,230 (1.0)
Provision for loan losses ...................... 2,848 474 180 343 (172) 2,848 (172) NA
Noninterest income ............................. 70,872 58,357 58,919 48,476 40,869 70,872 40,869 73.4
Noninterest expenses ........................... 120,731 117,328 116,767 109,044 99,582 120,731 99,582 21.2
Provision for income taxes ..................... 20,755 20,541 21,724 20,214 18,564 20,755 18,564 11.8
Net income ..................................... 35,600 34,968 36,784 35,220 33,162 35,600 33,162 7.4
Preferred stock dividend requirement ........... 9 9 10 10 10 9 10 (10.0)
Common stock dividend .......................... 13,981 12,869 12,882 12,771 12,565 13,981 12,565 11.3
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ------
Balance Sheet - End of Period:
Trading account securities ..................... 437,415 553,826 398,087 725,211 797,254 437,415 797,254 (45.1)
Securities available for sale .................. 2,044,257 1,993,797 2,087,639 2,127,690 1,960,075 2,044,257 1,960,075 4.3
Securities held to maturity .................... 243,915 252,622 260,485 268,114 270,039 243,915 270,039 (9.7)
Loans, net of unearned income .................. 8,183,306 8,173,678 7,745,350 7,282,550 6,674,067 8,183,306 6,674,067 22.6
Reserve for loan losses ........................ (131,603) (133,855) (134,653) (132,714) (134,216) (131,603) (134,216) (1.9)
Total interest-earning assets ..................11,119,493 11,019,059 10,563,552 10,484,219 9,816,274 11,119,493 9,816,274 13.3
Intangible assets .............................. 149,828 166,199 171,583 160,737 12,698 149,828 12,698 1079.9
Other assets ................................... 1,051,592 1,097,579 1,004,407 1,222,675 1,050,527 1,051,592 1,050,527 0.1
Total assets ...................................12,189,310 12,148,982 11,604,889 11,734,917 10,745,283 12,189,310 10,745,283 13.4
Noninterest-bearing deposits ................... 1,655,669 1,719,388 1,734,255 1,843,559 1,556,498 1,655,669 1,556,498 6.4
Interest-bearing deposits ...................... 6,617,045 6,333,956 6,201,229 6,043,972 5,953,168 6,617,045 5,953,168 11.2
Total deposits ................................. 8,272,714 8,053,344 7,935,484 7,887,531 7,509,666 8,272,714 7,509,666 10.2
Short-term borrowed funds ...................... 2,076,923 2,345,139 2,298,101 2,411,385 1,848,100 2,076,923 1,848,100 12.4
Long-term debt ................................. 683,785 685,426 292,058 312,005 297,538 683,785 297,538 129.8
Total interest-bearing liabilities ............. 9,377,753 9,364,521 8,791,388 8,767,362 8,098,806 9,377,753 8,098,806 15.8
Other liabilities .............................. 208,942 175,330 192,587 264,971 248,072 208,942 248,072 (15.8)
Minority equity in subsidiaries ................ 285 269 270 259 260 285 260 9.6
Preferred stockholders' equity ................. 610 629 668 675 685 610 685 (10.9)
Common stockholders' equity .................... 946,051 888,845 885,721 858,091 840,962 946,051 840,962 12.5
Parent company investment in subsidiaries ...... 990,493 932,738 916,427 822,591 757,641 990,493 757,641 30.7
Off-balance sheet letters of credit ............ 178,191 202,694 194,657 194,120 182,200 178,191 182,200 (2.2)
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ------
Problem Assets - End of Period:
Nonaccruing loans:
Commercial.................................... 5,731 8,903 7,781 8,373 8,874 5,731 8,874 (35.4)
Real estate: term residential.. .............. 4,545 4,876 3,694 3,744 3,595 4,545 3,595 26.4
Real estate: term commercial.................. 6,867 7,370 7,326 9,806 11,413 6,867 11,413 (39.8)
Real estate: construction..................... 1,057 1,714 1,110 1,844 1,595 1,057 1,595 (33.7)
Consumer...................................... 97 168 173 203 139 97 139 (30.2)
Leases........................................ 908 837 148 640 895 908 895 1.5
Nonaccruing loans: renegotiated................. 0 0 0 0 1,257 0 1,257 (100.0)
Total nonaccruing loans......................... 19,205 23,868 20,232 24,610 27,768 19,205 27,768 (30.8)
ORE and other foreclosed assets................. 2,334 3,352 3,148 8,387 14,842 2,334 14,842 (84.3)
Total nonperforming assets...................... 21,539 27,220 23,380 32,997 42,610 21,539 42,610 (49.5)
Accruing loans past due 90 days or more......... 11,518 12,001 9,265 9,184 10,318 11,518 10,318 11.6
Total problem assets............................ 33,057 39,221 32,645 42,181 52,928 33,057 52,928 (37.5)
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ------
Other Data - End of Period (not rounded to thousands):
Full-time equivalent employees.................. 7,656 7,621 7,499 7,427 6,420 7,656 6,420 19.3
Domestic bank offices:
First Security Bank of Utah................... 120 119 118 118 114 120 114 5.3
First Security Bank of Idaho.................. 91 91 91 87 87 91 87 4.6
First Security Bank of New Mexico............. 27 27 26 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................. 5 5 5 5 5 5 5 0.0
First Security Bank of Wyoming................ 6 6 6 4 4 6 4 50.0
Total domestic bank offices..................... 262 261 259 253 249 262 249 5.2
=============================================== ========== ========== ========== ========== ========== ========== ========== ======
<FN>
EOP: End of period. EPS: Earnings Per Share. DPS: Dividends Per Share. NA: Not applicable.
</TABLE>
<PAGE>
<TABLE>
FIRST SECURITY CORPORATION
FINANCIAL HIGHLIGHTS - Continued
(in thousands, except per share data and ratios; unaudited)
<CAPTION>
1st Qtr 4th Qtr 3rd Qtr 2nd Qtr 1st Qtr Year-To-Date 3 Months
1995 1994 1994 1994 1994 1995 1994 %Chg
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ------
Balance Sheet - Average:
Trading account securities ..................... 677,507 570,726 669,955 712,980 563,039 677,507 563,039 20.3
Securities available for sale .................. 1,976,800 2,059,821 2,108,122 2,002,866 1,763,348 1,976,800 1,763,348 12.1
Securities held to maturity .................... 250,957 246,917 263,979 267,384 302,717 250,957 302,717 (17.1)
Loans, net of unearned income .................. 8,133,412 7,928,754 7,489,686 6,993,753 6,547,493 8,133,412 6,547,493 24.2
Reserve for loan losses ........................ (133,747) (135,325) (134,492) (134,270) (135,122) (133,747) (135,122) (1.0)
Deferred taxes on leases ....................... 157,360 153,585 147,368 141,901 138,007 157,360 138,007 14.0
Total interest-earning assets, net of
deferred taxes on leases .....................10,948,403 10,705,435 10,427,360 9,883,013 9,131,644 10,948,403 9,131,644 19.9
Intangible assets .............................. 164,105 169,375 169,246 117,508 12,104 164,105 12,104 1255.8
Other assets ................................... 984,449 1,034,843 980,263 948,086 914,282 984,449 914,282 7.7
Total assets ...................................12,120,570 11,927,913 11,589,745 10,956,238 10,060,915 12,120,570 10,060,915 20.5
Noninterest-bearing deposits ................... 1,545,225 1,684,321 1,641,041 1,616,036 1,522,496 1,545,225 1,522,496 1.5
Interest-bearing deposits ...................... 6,423,604 6,255,221 6,175,251 6,038,334 5,859,165 6,423,604 5,859,165 9.6
Total deposits ................................. 7,968,829 7,939,542 7,816,292 7,654,370 7,381,661 7,968,829 7,381,661 8.0
Short-term borrowed funds ...................... 2,348,062 2,310,480 2,388,601 1,955,541 1,360,105 2,348,062 1,360,105 72.6
Long-term debt ................................. 684,497 586,407 306,808 300,304 276,130 684,497 276,130 147.9
Total interest-bearing liabilities ............. 9,456,163 9,152,108 8,870,660 8,294,179 7,495,400 9,456,163 7,495,400 26.2
Other liabilities .............................. 199,827 200,059 205,775 189,092 188,076 199,827 188,076 6.2
Minority equity in subsidiaries ................ 276 270 265 259 266 276 266 3.8
Preferred stockholders' equity ................. 616 650 671 683 699 616 699 (11.9)
Common stockholders' equity .................... 918,463 890,505 871,333 855,989 853,978 918,463 853,978 7.6
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ------
Reconciliation of the Reserve for Loan Losses:
Balance, beginning of period ................... 133,855 134,653 132,714 134,216 134,848 133,855 134,848 (0.7)
Loans charged off:
Commercial ................................... 1,074 1,052 1,015 2,667 887 1,074 887 21.1
Real estate: term ............................ 694 274 267 447 730 694 730 (4.9)
Real estate: construction .................... 93 0 206 0 300 93 300 (69.0)
Consumer: instalment ......................... 9,425 8,098 5,719 4,304 4,759 9,425 4,759 98.0
Consumer: credit card ........................ 2,447 1,845 1,616 1,489 1,878 2,447 1,878 30.3
Leases ....................................... 0 104 12 86 37 0 37 (100.0)
Total loans charged off ........................ 13,733 11,373 8,835 8,993 8,591 13,733 8,591 59.9
Recoveries on loans charged off:
Commercial ................................... (2,412) (1,547) (3,291) (2,312) (3,988) (2,412) (3,988) (39.5)
Real estate: term ............................ (1,765) (2,394) (1,317) (851) (1,089) (1,765) (1,089) 62.1
Real estate: construction .................... (22) (121) (37) (19) (24) (22) (24) (8.3)
Consumer: instalment ......................... (3,930) (3,562) (2,624) (2,552) (2,363) (3,930) (2,363) 66.3
Consumer: credit card ........................ (504) (362) (476) (498) (454) (504) (454) 11.0
Leases ....................................... 0 (27) (514) (271) (7) 0 (7)(100.0)
Total recoveries of loans charged off .......... (8,633) (8,013) (8,259) (6,503) (7,925) (8,633) (7,925) 8.9
Net loans charged off (recovered) .............. 5,100 3,360 576 2,490 666 5,100 666 665.8
Provision for loan losses ...................... 2,848 474 180 343 (172) 2,848 (172) NA
Acquisitions & reclassifications ............... 0 2,088 2,335 645 206 0 206 (100.0)
Balance, end of period ......................... 131,603 133,855 134,653 132,714 134,216 131,603 134,216 (1.9)
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ------
Selected Ratios (%):
Return on average assets ....................... 1.19 1.16 1.26 1.29 1.34 1.19 1.34
Return on average stockholders' equity ......... 15.71 15.57 16.74 16.49 15.74 15.71 15.74
Net interest margin, FTE ....................... 4.06 4.37 4.55 4.79 4.92 4.06 4.92
Net interest spread, FTE ....................... 3.41 3.75 3.98 4.23 4.32 3.41 4.32
Efficiency ratio:
(nonint exp / (net int inc FTE + nonint inc)) 66.35 66.95 65.80 65.38 65.04 66.35 65.04
Productivity ratio: (nonint exp / avg assets) .. 4.04 3.90 4.00 3.99 4.01 4.04 4.01
Stockholders' equity / assets .................. 7.77 7.32 7.64 7.32 7.83 7.77 7.83
Avg stockholders' equity / avg assets .......... 7.58 7.47 7.52 7.82 8.50 7.58 8.50
Tangible common equity / tangible assets ....... 6.61 6.03 6.25 6.03 7.72 6.61 7.72
Loans / deposits ............................... 98.92 101.49 97.60 92.33 88.87 98.92 88.87
Loans / assets ................................. 67.14 67.28 66.74 62.06 62.11 67.14 62.11
Reserve for loan losses EOP to:
Total loans .................................. 1.61 1.64 1.74 1.82 2.01 1.61 2.01
Nonaccruing loans ............................ 685.25 560.81 665.54 539.27 483.35 685.25 483.35
Nonaccruing + accruing lns past due 90 days .. 428.35 373.18 456.50 392.71 352.40 428.35 352.40
Nonaccruing loans / total loans ................ 0.23 0.29 0.26 0.34 0.42 0.23 0.42
Nonaccrue + accrue loans past due / total lns .. 0.38 0.44 0.38 0.46 0.57 0.38 0.57
Nonperforming assets EOP to:
Total loans + ORE ............................ 0.26 0.33 0.30 0.45 0.64 0.26 0.64
Total assets ................................. 0.18 0.22 0.20 0.28 0.40 0.18 0.40
Total equity ................................. 2.28 3.06 2.64 3.84 5.06 2.28 5.06
Total equity + reserve for loan losses ....... 2.00 2.66 2.29 3.33 4.37 2.00 4.37
Problem assets EOP to:
Total loans + ORE ............................ 0.40 0.48 0.42 0.58 0.79 0.40 0.79
Total assets ................................. 0.27 0.32 0.28 0.36 0.49 0.27 0.49
Total equity ................................. 3.49 4.41 3.68 4.91 6.29 3.49 6.29
Total equity + reserve for loan losses ....... 3.07 3.83 3.20 4.25 5.42 3.07 5.42
Net loans charged off / average loans .......... 0.25 0.17 0.03 0.14 0.04 0.25 0.04
=============================================== ========== ========== ========== ========== ========== ========== ========== ======
Risk-Based Capital Ratios: FSC FSB FSB FSB FSB FSB FSB
As of March 31, 1995 Consolidate Utah Idaho New Mexico Oregon Nevada Wyoming
- ----------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- ------
Tier 1 risk-based capital ratio (%) ............ 10.00 9.93 8.82 11.33 9.51 10.69 10.48
Total (Tier 1+2) risk-based capital ratio (%) .. 12.12 11.56 11.09 12.59 10.77 11.95 11.74
Leverage Ratio (%) ............................. 7.11 7.12 7.01 5.66 8.58 8.35 6.44
Tier 1 equity .................................. 861,677 400,960 258,825 106,572 34,127 25,360 13,082
Total (Tier 1+2) equity ........................ 1,044,698 466,501 325,301 118,441 38,613 28,342 14,657
Total risk-based assets - reserve for ln losses 8,618,071 4,036,149 2,933,812 940,632 358,671 237,166 124,827
=============================================== ========== ========== ========== ========== ========== ========== ========== ======
<FN>
EOP: End of period. EPS: Earnings Per Share. DPS: Dividends Per Share. NA: Not applicable.
</TABLE>
<PAGE>
<TABLE>
FIRST SECURITY CORPORATION
RATE / VOLUME ANALYSIS
(Fully Taxable Equivalent; in thousands; unaudited)
<CAPTION>
For the Three Months Ended March 31, 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
7,976,052 6,409,485 8.99 8.54 deferred taxes on leases (C) 179,275 136,774 42,501 33,429 9,072
65,550 89,728 5.72 3.15 Federal funds sold & RP's purchased 938 707 231 (191) 422
1,537 3,327 4.68 3.61 Interest-bearing deposits other banks 18 30 (12) (16) 4
677,507 563,039 4.81 6.78 Trading account securities 8,139 9,540 (1,401) 1,940 (3,341)
1,980,286 1,763,348 5.91 5.28 Securities available for sale 29,268 23,273 5,995 2,863 3,132
247,471 302,717 7.98 5.39 Securities held to maturity 4,937 4,077 860 (744) 1,604
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
10,948,403 9,131,644 8.13 7.64 TOTAL INTEREST-EARNING ASSETS / INCOME 222,575 174,401 48,174 37,281 10,893
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
INTEREST-BEARING LIABILITIES / EXPENSES:
Interest-bearing deposits:
1,078,892 1,055,537 1.96 1.70 NOW accounts 5,283 4,483 800 99 701
2,356,254 2,484,118 3.59 2.91 Savings accounts 21,130 18,102 3,028 (932) 3,960
584,290 383,411 5.66 4.07 Time deposits $100,000 & over 8,275 3,903 4,372 2,045 2,327
2,404,168 1,936,099 5.21 4.28 Other time deposits 31,300 20,705 10,595 5,006 5,589
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
6,423,604 5,859,165 4.11 3.22 TOTAL INTEREST-BEARING DEPOSITS 65,988 47,193 18,795 6,218 12,577
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
2,173,435 1,310,034 5.61 3.08 Federal funds purchased & RP's sold 30,500 10,074 20,426 6,639 13,787
174,627 50,071 6.59 4.73 Other short-term borrowings 2,878 592 2,286 1,473 813
684,497 276,130 7.08 6.25 Long-term debt 12,122 4,312 7,810 6,377 1,433
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
9,456,163 7,495,400 4.72 3.32 TOTAL INTEREST-BEARING LIABILITIES / EXPENSES 111,488 62,171 49,317 14,489 16,033
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
8.13 7.64 Interest income / earning assets
4.07 2.72 Interest expense / earning assets
------ ------ --------------------------------------------
4.06 4.92 Net interest income / earning assets 111,087 112,230 (1,143) 22,792 (5,140)
Less fully taxable equivalent adjust 2,025 1,963 62
------ ------ -------------------------------------------- --------- --------- -------- -------- --------
NET INTEREST INCOME, PER CONDENSED
CONSOLIDATED INCOME STATEMENTS 109,062 110,267 (1,205)
=========== =========== ====== ====== ============================================ ========= ========= ======== ======== ========
<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 $4,503 and $4,056 for the 1995 and 1994
quarters, respectively.
</TABLE>
<PAGE>
<TABLE>
FIRST SECURITY CORPORATION
LOANS
(in thousands; unaudited)
<CAPTION>
March 31, 1995 December 31, 1994 March 31, 1994
%Total %Total %Total Mar/Mar
Balance Loans Balance Loans Balance Loans %Chg
<S> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
COMMERCIAL LOANS:
Commercial / Industrial .................. 1,425,606 17.4 1,390,620 17.0 1,183,692 17.7 20.4
Agricultural ............................. 246,327 3.0 291,807 3.6 231,352 3.5 6.5
Other Commercial ......................... 179,466 2.2 153,365 1.9 121,299 1.8 48.0
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
TOTAL COMMERCIAL LOANS 1,851,399 22.6 1,835,792 22.5 1,536,343 23.0 20.5
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
REAL ESTATE SECURED LOANS:
Residential Real Estate Loans:
Term ................................... 1,504,804 18.4 1,560,700 19.1 1,155,522 17.3 30.2
Home equity ............................ 374,055 4.6 358,858 4.4 288,739 4.3 29.5
Construction ........................... 200,961 2.5 180,544 2.2 152,279 2.3 32.0
Construction Land ...................... 3,326 0.0 5,798 0.1 8,523 0.1 (61.0)
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
Total Residential Real Estate Loans 2,083,146 25.5 2,105,900 25.8 1,605,063 24.0 29.8
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
Commercial Real Estate (CRE) Loans:
Term: owner occupied ................... 366,930 4.5 367,990 4.5 366,711 5.5 0.1
Term: nonowner occupied ................ 498,562 6.1 479,100 5.9 419,777 6.3 18.8
Construction: owner occupied ........... 78,179 0.9 53,989 0.7 42,816 0.7 82.6
Construction: nonowner occupied ........ 82,504 1.0 78,145 0.9 48,860 0.7 68.9
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
Subtotal: CRE Owner Occupied 445,109 5.4 421,979 5.2 409,527 6.2 8.7
Subtotal: CRE Nonowner Occupied 581,066 7.1 557,245 6.8 468,637 7.0 24.0
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
Commercial Land ........................ 40,930 0.5 43,331 0.5 55,075 0.8 (25.7)
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
Total Commercial Real Estate Loans 1,067,105 13.0 1,022,555 12.5 933,239 14.0 14.3
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
Farm Land ................................ 11,871 0.1 13,966 0.1 13,077 0.2 (9.2)
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
TOTAL REAL ESTATE SECURED LOANS 3,162,122 38.6 3,142,421 38.4 2,551,379 38.2 23.9
Memo: Total RE Term Loans .............. 2,790,662 34.1 2,819,051 34.5 2,292,692 34.3 21.7
Memo: Total RE Construction Loans ...... 371,460 4.5 323,370 3.9 258,687 3.9 43.6
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
Consumer Loans:
Auto ..................................... 2,136,836 26.1 2,129,128 26.0 1,660,977 24.9 28.6
Student .................................. 88,896 1.1 130,158 1.6 115,935 1.8 (23.3)
Credit Card Receivables .................. 296,940 3.6 306,270 3.7 274,054 4.1 8.4
Other Consumer ........................... 306,414 3.8 288,392 3.5 255,144 3.8 20.1
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
TOTAL CONSUMER LOANS 2,829,086 34.6 2,853,948 34.9 2,306,110 34.6 22.7
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
Leases:
TOTAL LEASES ............................. 340,699 4.2 341,517 4.2 280,235 4.2 21.6
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
LOANS, NET OF UNEARNED INCOME 8,183,306 100.0 8,173,678 100.0 6,674,067 100.0 22.6
Memo: Unearned Income .................. (6,018) (7,380) (10,964) (45.1)
Reserve for Loan Losses .................. (131,603) (133,855) (134,216) (1.9)
- ----------------------------------------- ----------- ------ ----------- ------ ----------- ------ --------
TOTAL LOANS, NET 8,051,703 8,039,823 6,539,851 23.1
========================================= =========== ====== =========== ====== =========== ====== ========
<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 -
- ------ ------------------ ------------------------------------- ----------------------- -------- ----------- -----------
TOTALS 84 586,255 201,991
====== ================== ===================================== ======================= ======== =========== ===========
<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 4. Submission of Matters to a Vote of Security Holders
At the regularly scheduled annual meeting of shareholders held on April 24,
1995, there were 41,300,710.7 voting shares present or represented by proxy,
which was equal to 82.66% of all voting shares outstanding. Votes were taken
on the following Shareholder Proposals:
* Shareholder Proposal #1 "To elect a Board of Directors to serve for the
ensuing year". All current members of the Board of Directors were nominated
for re-election by Management, and all nominees listed in the proxy statement
were elected by the margins noted:
Votes Votes
Nominee: For: Against: Abstain: %
James C. Beardall 41,114,062.7 117,882.0 65,241.0 99.6
Rodney H. Brady 41,166,977.0 80,248.7 52,365.0 99.7
James E. Bruce 41,151,846.6 89,638.1 58,126.0 99.7
Thomas D. Dee II 38,659,986.6 2,581,109.2 58,515.0 93.6
Spencer F. Eccles 41,183,846.6 64,703.2 51,061.0 99.7
Morgan J. Evans 41,184,243.2 65,181.6 50,186.0 99.7
Dr. David P. Gardner 41,155,839.5 83,448.2 60,323.0 99.7
Robert H. Garff 41,110,927.0 122,516.7 66,167.0 99.6
U. Edwin Garrison 41,147,349.1 100,324.6 50,837.0 99.7
David B. Haight 41,090,154.7 137,840.1 72,716.0 99.5
Jay Dee Harris 41,122,141.2 107,002.5 70,467.0 99.6
Robert T. Heiner 41,051,502.2 146,256.5 50,752.0 99.4
Karen H. Huntsman 41,140,982.6 105,830.1 52,798.0 99.7
G. Frank Joklik 40,982,990.2 243,280.5 73,340.0 99.3
B. Z. Kastler 41,089,419.6 123,241.1 85,950.0 99.5
Joseph G. Maloof 40,802,455.1 444,244.6 52,911.0 98.8
Scott S. Parker 41,179,148.3 68,845.4 51,617.0 99.7
Dr. Arthur K. Smith 41,050,252.3 134,277.4 64,281.0 99.4
James L. Sorenson 40,892,205.0 290,181.7 117,224.0 99.1
Harold J. Steele 41,121,365.2 118,840.5 59,405.0 99.6
Howard W. Hunter, President of The Church of Jesus Christ of Latter-day
Saints and a member of FSCO's Board of Directors for 24 years, passed away on
March 3, 1995.
* Shareholder Proposal #2 "To consider and vote on the proposed 1994
Employee Stock Purchase Plan, which will provide management with the authority
to grant employees the right to purchase up to an aggregate of 1,000,000
shares of the Company's common stock through general offerings at fair market
value made from time to time during the term of the Plan."
Votes Votes
For: Against: Abstain: %
40,042,867.3 868,306.7 99,205.0 97.0
* Shareholder Proposal #3 "To consider and vote on the proposed 1995 Non-
Employee Director Stock Option Plan, which establishes a mechanism for the
automatic grant of stock options, with exercise prices at fair market value as
of the date of grant, to non-employee Directors of the Company on a periodic
basis, and which reserves an aggregate of 500,000 shares of the Company's
common stock for option exercises by non-employee Directors under the terms of
the Plan."
Votes Votes
For: Against: Abstain: %
38,585,899.3 2,321,870.3 104,455.0 93.5
* Shareholder Proposal #4 "To consider and vote on amendments to the
Incentive Savings Plan, including an amendment which will create an Employee
Stock Ownership Plan (ESOP) within the Plan, and amendments to expand the
available choices for employee-directed investment under the Plan."
Votes Votes
For: Against: Abstain: %
38,981,739.4 1,270,724.3 105,995.0 94.4
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:
On January 31, 1995, FSCO reported on Form 8-K a press release relating
to an increase in its regular quarterly cash dividend.
On February 2, 1995, FSCO reported on Form 8-K/A an amendment to correct
the record date reported in the Form 8-K filed on January 31, 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: May 11, 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
For the Periods Ended March 31, 1995 and 1994 1995 1994
<S> <C> <C>
- ----------------------------------------------------------- ----------- -----------
Net Income:
Per statement of consolidated income........................ 35,600 33,162
Deduct dividend requirements of preferred stock............. 9 10
- ----------------------------------------------------------- ----------- -----------
Net income applicable to common stock 35,591 33,152
Add dividend requirements of preferred stock................ 9 10
- ----------------------------------------------------------- ----------- -----------
Net income assuming full dilution 35,600 33,162
=========================================================== =========== ===========
Net Income Per Share:
Assuming no dilution........................................ $0.70 $0.67
Assuming full dilution...................................... $0.70 $0.67
=========================================================== =========== ===========
Shares:
Average common shares outstanding:
Average common shares outstanding........................... 50,184 48,842
Common stock equivalents (options).......................... 710 1,020
Treasury shares............................................. (328) (546)
- ----------------------------------------------------------- ----------- -----------
Assuming no dilution 50,566 49,316
Issuable assuming conversion of preferred stock 143 162
- ----------------------------------------------------------- ----------- -----------
Assuming full dilution 50,709 49,478
=========================================================== =========== ===========
<FN>
Note: Per share amounts assuming full dilution were computed assuming all outstanding shares of preferred
stock were converted into common shares 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 calculations.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 605,218
<INT-BEARING-DEPOSITS> 1,486
<FED-FUNDS-SOLD> 209,114
<TRADING-ASSETS> 437,415
<INVESTMENTS-HELD-FOR-SALE> 2,044,257
<INVESTMENTS-CARRYING> 243,915
<INVESTMENTS-MARKET> 2,288,172
<LOANS> 8,183,306
<ALLOWANCE> (131,603)
<TOTAL-ASSETS> 12,189,310
<DEPOSITS> 8,272,714
<SHORT-TERM> 2,076,924
<LIABILITIES-OTHER> 209,226
<LONG-TERM> 683,785
<COMMON> 946,051
0
610
<OTHER-SE> 0
<TOTAL-LIABILITIES-AND-EQUITY> 12,189,310
<INTEREST-LOAN> 178,462
<INTEREST-INVEST> 32,997
<INTEREST-OTHER> 9,091
<INTEREST-TOTAL> 220,550
<INTEREST-DEPOSIT> 65,988
<INTEREST-EXPENSE> 111,488
<INTEREST-INCOME-NET> 109,062
<LOAN-LOSSES> 2,848
<SECURITIES-GAINS> 5,673
<EXPENSE-OTHER> 120,731
<INCOME-PRETAX> 56,355
<INCOME-PRE-EXTRAORDINARY> 35,600
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,600
<EPS-PRIMARY> 0.70
<EPS-DILUTED> 0.70
<YIELD-ACTUAL> 4.06
<LOANS-NON> 19,205
<LOANS-PAST> 11,518
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 33,057
<ALLOWANCE-OPEN> (133,855)
<CHARGE-OFFS> (13,733)
<RECOVERIES> 8,633
<ALLOWANCE-CLOSE> (131,603)
<ALLOWANCE-DOMESTIC> (131,603)
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
