<PAGE>
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 July 20, 1998
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
Item 5. Other Information
On July 20, 1998, First Security Corporation (FSCO) issued a press release
announcing its earnings and other financial data for the first six months of
1998, a copy of which is attached to this report as Exhibit A.
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] July 20, 1998
_______________________________________________________ ____________________
Scott C. Ulbrich (Date)
Executive Vice President, Finance and Capital Markets
and Chief Financial Officer
(Principal Financial and Accounting Officer)
<PAGE>
EXHIBIT A
FOR IMMEDIATE RELEASE Contact: Scott C. Ulbrich
July 20, 1998 (801) 246-5706
FIRST SECURITY EARNS $124.5 MILLION OR $0.64 PER SHARE
BEFORE ACQUISITION CHARGES FOR FIRST SIX MONTHS OF 1998
[NOTE: All prior period financial data in this report have been restated for
FSCO's pooling of interests acquisition of California State Bank, and all net
income and selected other data discussed below are reported BEFORE one-time
CSTB acquisition charges totaling $7.2 million after tax.]
Highlights for First Six Months of 1998 Compared with Year Ago Period:
* Net income, before acquisition charges, of $124.5 million, up $23.3 million
or 23.0%.
* Earnings per share diluted, before acquisition charges, of $0.64, up $0.10 or
18.5%.
* Noninterest income of $227.1 million, up $64.3 million or 39.5%.
* Total assets of $19.4 billion at June 30, 1998, up $2.9 billion or 18.0%.
* Stockholders' equity of $1.5 billion at June 30, 1998, up $0.2 billion or
14.9%.
* On May 29, 1998, FSCO acquired California State Bank (Nasdaq: CSTB).
SALT LAKE CITY -- First Security Corporation (Nasdaq: FSCO) earned net
income, before one-time CSTB acquisition charges of $7.2 million after tax,
totaling $124.5 million for the first six months of 1998, up $23.3 million or
23.0% from the corresponding 1997 period. This net income generated a 1.35%
return on average assets (ROAA) and a 17.12% return on average equity (ROAE)
for the year to date, essentially unchanged from a 1.35% ROAA and a 16.75% ROAE
for the year-ago period. Earnings per share diluted were $0.64 for year-to-
date 1998, up $0.10 or 18.5% from the year-ago period. The tangible ROAA was
1.56%, the tangible ROAE was 24.93%, and tangible earnings per share diluted
were $0.72 for the year to date, compared with a 1.48% tangible ROAA, a 21.51%
tangible ROAE, and tangible earnings per share diluted of $0.59 for the year-
ago period.
FSCO's net income, before acquisition charges, was $63.1 million for the
second quarter of 1998, up $11.9 million or 23.3% from the second quarter of
1997. This net income generated a 1.33% ROAA and a 16.66% ROAE for the
quarter, essentially unchanged from a 1.33% ROAA and a 16.91% ROAE for the
year-ago quarter. Earnings per share diluted were $0.32 for the second quarter
of 1998, up $0.04 or 14.3% from the year-ago quarter. The tangible ROAA was
1.55%, the tangible ROAE was 24.73%, and tangible earnings per share diluted
were $0.37 for the quarter, compared with a 1.46% tangible ROAA, a 21.83%
tangible ROAE, and tangible earnings per share diluted of $0.30 for the year-
ago quarter.
Net income, after acquisition charges, totaled $117.3 million for year-to-
date 1998, up $16.1 million or 15.9% from the year-ago period, and was $55.9
million for the second quarter of 1998, up $4.7 million or 9.2% from the year-
ago quarter. Earnings per share diluted were $0.60 for the year to date, up
$0.06 or 11.1% from the year-ago period, and were $0.29 for the second quarter,
up $0.01 or 3.6% from the year-ago quarter.
Spencer F. Eccles, FSCO chairman and chief executive officer, said, "We are
very pleased with First Security's performance for the first six months of
1998, which continues to build on our past achievements. Key factors for the
year-to-date results included a 22.3% growth in average loans, a 39.5% increase
in noninterest income, and the continued 110% efforts of our dedicated
employees. As a result, First Security continues to be a strong performer as
measured by growth in both our shareholder returns and customer base."
Discussing the CSTB acquisition, he said, "On May 29, 1998, we acquired
California State Bank in West Covina, California. Originally, we had expected
the ongoing operations of this newest subsidiary to be neutral to our earnings
by the end of 1998, but are pleased to report that this neutrality has been
achieved ahead of schedule."
Total Revenues
FSCO's total revenues (the sum of net interest income and noninterest
income) were $564.3 million for year-to-date 1998, up $104.5 million or 22.7%
from the year-ago period, and were $291.5 million for the second quarter of
1998, up $57.0 million or 24.3% from the year-ago quarter. On a linked quarter
basis, FSCO's total revenues for the second quarter of 1998 increased $18.7
million or 6.8% over the first quarter of 1998.
FSCO's net interest income on a fully taxable equivalent (FTE) basis was
$342.6 million for year-to-date 1998, up $41.7 million or 13.9% from the year-
ago period, and was $175.8 million for the second quarter of 1998, up $21.4
million or 13.9% from the year-ago quarter. These increases were due to a
combination of continued strong demand for loans, growth in the securities
portfolios, and the positive impact of three purchase accounting acquisitions
completed in the last twelve months including Harbourton Mortgage Co., L.P.
(HMC), American Bancorp of Nevada, and Rio Grande Bancshares, Inc. (RGB). On a
linked quarter basis, FSCO's net interest income FTE for the second quarter of
1998 increased $8.9 million or 5.3% over the first quarter of 1998.
FSCO's net interest margins for the year-to-date and second quarter of 1998
were identical at 4.15%, and each was down 33 basis points from 4.48% for the
year-to-date and second quarter of 1997. These decreases were due to a
combination of the following factors: strong volume growth in loans, especially
refinanced mortgages, which were originated at lower rates but funded by
additional short term borrowed funds and deposits at relatively constant rates;
and a small shift in the deposit mix from transaction accounts to time deposits
with higher rates. On a linked quarter basis from the first quarter of 1998 to
the second quarter of 1998, FSCO's net interest margin remained unchanged while
net interest income was increased through its mortgage and lending activities.
FSCO's noninterest income was $227.1 million for year-to-date 1998, up $64.3
million or 39.5% from the year-ago period, and was $118.5 million for the
second quarter of 1998, up $36.5 million or 44.5% from the year-ago quarter.
These increases were due to several factors including: strong growth in net
mortgage banking activities generated by lower interest rates plus the March
31, 1997 purchase of HMC; gains from ongoing asset securitizations / sales; and
FSCO's continued emphasis on improving its value pricing of all fee-based
services and on increasing and diversifying its sources of noninterest income.
FSCO's noninterest income amounted to 40.24% of total revenues for year-to-
date 1998, up from 35.39% for the year-ago period, and was 40.67% of total
revenues for the quarter, up from 34.97% for the year-ago quarter. On a linked
quarter basis, FSCO's noninterest income for the second quarter of 1998
increased $10.0 million or 9.2% from the first quarter of 1998.
Noninterest Expenses
FSCO's noninterest expenses, before one-time CSTB acquisition charges of
$6.9 million pre-tax, were $343.1 million for year-to-date 1998, up $69.0
million or 25.2% from the year-ago period, and were $177.3 million for the
second quarter of 1998, up $36.7 million or 26.1% from the year-ago quarter.
These increases were primarily due to the following: the impact of the three
purchase accounting acquisitions (discussed above) on ongoing operations;
additions of revenue-generating personnel; ongoing volume growth; the cost of
necessary technological advances and upgrades including "Year 2000"
expenditures; and one-time costs associated with the creation of a "Section 20"
full-service securities broker / dealer subsidiary. Mr. Eccles commented,
"First Security continues to strengthen its control of ongoing noninterest
expenses while expending funds required to support strong growth, multiple
acquisitions, and investments in technology appropriate for a high performance
financial services company."
FSCO's operating expense ratio (the ratio of noninterest expenses to the sum
of net interest income FTE and noninterest income), before acquisition charges,
was 60.23% for year-to-date 1998, up 111 basis points from the year-ago period,
and was 60.26% for the second quarter of 1998, up 74 basis from the year-ago
quarter.
FSCO's subsidiary, CrossLand Mortgage, has a higher operating expense ratio
than FSCO's bank subsidiaries due to its labor intensive business of
originating, selling, and servicing mortgage loans. Excluding both CrossLand
Mortgage and acquisition charges, FSCO's "core" efficiency ratio was 56.16% for
year-to-date 1998, up 78 basis points from the year-ago period, and was 56.13%
for the second quarter of 1998, up 58 basis points from the year-ago quarter.
Interest-Earning Assets and Asset Quality
FSCO's assets totaled $19.4 billion at June 30, 1998, up $1.2 billion or
6.7% from year-end 1997, and up $2.9 billion or 18.0% from one year ago. Loans
were $12.5 billion at quarter end, up $1.3 billion or 11.6% from year end, and
up $2.0 billion or 19.0% from one year ago.
The ratio of nonperforming assets to total loans and other real estate was
0.35% at June 30, 1998, down from 0.38% at year-end 1997 and 0.45% one year
ago. Nonperforming assets totaled $43.6 million at quarter end, up $0.7
million or 1.6% from year end, but down $3.7 million or 7.7% from one year ago.
FSCO's reserve for loan losses was increased to $166.7 million at June 30,
1998, up $9.1 million or 5.8% from year end 1997, and up $16.5 million or 11.0%
from one year ago. The ratio of the reserve to total loans was 1.33% at
quarter end, down from 1.40% at year end and 1.43% one year ago.
The annualized ratio of net loans charged off to average loans was 0.42% for
year-to-date 1998, down from 0.52% for the year-ago period, and was 0.49% for
the second quarter of 1998, compared with 0.50% for the year-ago quarter. Net
loans charged off against the reserve were $24.8 million for year-to-date 1998,
down $0.4 million or 1.6% from the year-ago period, and were $15.0 million for
the second quarter of 1998, up $2.4 million or 19.1% from the year-ago quarter.
FSCO's provision for loan losses was $31.0 million for year-to-date 1998, up
$2.8 million or 9.8% from the year-ago period, and was $18.4 million for the
second quarter of 1998, up $4.3 million or 30.7% from the year-ago quarter.
Stockholders' Equity and Common Stock
FSCO's stockholders' equity was increased to $1.5 billion at June 30, 1998,
up $0.1 billion or 10.1% from year-end 1997 and up $0.2 billion or 14.9% from
one year ago. This growth was due to the following: earnings retained;
issuances of new FSCO common stock shares for acquisitions; and the impact of
the SFAS 115 net unrealized gain on available for sale securities; partially
offset by repurchases of common stock in the public markets in 1997 and early
1998. FSCO's ratio of stockholders' equity to total assets was 7.97% at June
30, 1998, compared with 7.72% at year-end 1997 and 8.18% one year ago. The
ratio of tangible common equity to tangible assets was 6.26% at quarter end,
compared with 6.24% at year end and 6.68% one year ago, reflecting the goodwill
recognized with the RGB merger and the ongoing origination of mortgage
servicing rights.
Mergers and Acquisitions
On May 29, 1998, FSCO acquired California State Bank, headquartered in West
Covina, California. CSTB had year-end 1997 assets of $849.2 million and 17
branches serving small- and middle-market business customers and retail banking
clients in the San Gabriel Valley, as well as Orange, Riverside, and San
Bernardino counties of Southern California. This transaction was accounted for
as a pooling of interests, requiring the restatement of all prior period FSCO
financial statements. FSCO incurred one-time acquisition charges for this
transaction of $7.2 million or $0.037 per share after tax.
On July 1, 1998, FSCO merged and renamed its subsidiaries, First National
Bank of Dona Ana County and First National Bank of Chaves County, as First
Security Bank of Southern New Mexico.
National and Regional Economy
While consumer spending and other areas of financial demand remained solid
in the second quarter, evidences of Asia-related weaknesses in commodity prices
and in the manufacturing sector were clearly observable. Aided by the low
interest rates, housing and automobile sales were sustained at high levels.
With inflation near 1.5%, real incomes were pushed higher and declining import
prices provided incentives for aggressive buying. Job gains were steady in the
second quarter, but in June, the nation's jobless rate edged slightly higher to
4.5%.
By midyear, it had become evident that the Asian financial crisis was a huge
difficulty that would persist for an extended period of time. More than just a
recession, Asia (including Japan) is facing broad-based debt deflation, with
the banking sector burdened with a tremendous volume of bad loans.
Accordingly, the Japanese yen has weakened against the dollar, and the U.S.
international trade deficit has widened and will continue to do so. In the
second half of 1998, commodity prices likely will remain under pressure, and
corporate profit margins are expected to narrow. In this slower-growth
environment, it seems more probable that the Federal Reserve may lower rather
than increase interest rates.
Economic activity in the western United States recorded sustained growth in
the second quarter. Rates of expansion are somewhat below last year, but most
states' labor markets continue at or near full employment. The lower mortgage
and other lending rates have aided the residential and automobile sales
climate.
Business
With $19.4 billion in assets and $11.9 billion in deposits, First Security
Corporation is the largest financial services organization headquartered in the
Intermountain West, and is the nation's oldest multistate bank holding company.
Incorporated on June 15, 1928, FSCO celebrates its 70th anniversary this year.
FSCO's banks currently operate 315 full service domestic bank offices in Utah,
Idaho, Oregon, Wyoming, New Mexico, Nevada, and California. Nonbank
subsidiaries include a residential mortgage loan company, a leasing company,
two insurance subsidiaries, an investment management company, a full-service
retail securities broker / dealer, a "Section 20" full-service securities
broker / dealer, a bankcard transaction processing company, an information
technology subsidiary, and a small business investment corporation.
Internet Address: news, financial updates and information about products and
services can be found on FSCO's web site at www.firstsecuritybank.com.
Forward-Looking Statements
Except for the historical information in this document, the matters
described herein are forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. FSCO cautions readers not to
place undue reliance on any forward-looking statements, which speak only as of
the date made.
FSCO advises readers that various risks and uncertainties could affect
FSCO's financial performance and could cause FSCO's actual results for future
periods to differ materially from those anticipated or projected. These risks
and uncertainties include, but are not limited to, those related to: the
economic environment, particularly in the regions where FSCO operates;
competitive products and pricing; changes in prevailing interest rates; credit
and other risks of lending and investment activities; fiscal and monetary
policies of the U.S. and other governments; regulations affecting financial
institutions; acquisitions and the integration of acquired businesses;
technology and associated risks; and other risks and uncertainties affecting
FSCO's operations and personnel.
FSCO specifically disclaims any obligation to update any forward-looking
statements to reflect occurrences or unanticipated events or circumstances
after the date of such statements.
# # #
<PAGE>
<TABLE>
FIRST SECURITY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
($ in thousands, except per share data; unaudited) (A)
<CAPTION>
Three Months Year-To-Date Six Months
For the Periods Ended June 30, 1998 and 1997 1998 1997 $Chg %Chg 1998 1997 $Chg %Chg
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------- ---------- -------- -------- ------- ---------- -------- -------- -------
INTEREST INCOME:
Interest & fees on loans 274,737 230,188 44,549 19.4 534,192 446,474 87,718 19.6
Federal funds sold & securities purchased 1,897 887 1,010 113.9 2,865 2,213 652 29.5
Interest-bearing deposits in other banks 11 11 0 0.0 42 67 (25) (37.3)
Trading account securities 1,823 5,360 (3,537) (66.0) 6,049 7,758 (1,709) (22.0)
Available for sale securities 72,482 57,809 14,673 25.4 141,903 112,218 29,685 26.5
- ------------------------------------------------------- ---------- -------- -------- ------- ---------- -------- -------- -------
TOTAL INTEREST INCOME 350,950 294,255 56,695 19.3 685,051 568,730 116,321 20.5
- ------------------------------------------------------- ---------- -------- -------- ------- ---------- -------- -------- -------
INTEREST EXPENSE:
Deposits 102,016 84,575 17,441 20.6 202,525 166,304 36,221 21.8
Short-term borrowings 52,157 40,067 12,090 30.2 99,484 71,360 28,124 39.4
Long-term debt 23,839 17,133 6,706 39.1 45,813 34,015 11,798 34.7
- ------------------------------------------------------- ---------- -------- -------- ------- ---------- -------- -------- -------
TOTAL INTEREST EXPENSE 178,012 141,775 36,237 25.6 347,822 271,679 76,143 28.0
- ------------------------------------------------------- ---------- -------- -------- ------- ---------- -------- -------- -------
NET INTEREST INCOME 172,938 152,480 20,458 13.4 337,229 297,051 40,178 13.5
Provision for loan losses 18,396 14,074 4,322 30.7 30,994 28,222 2,772 9.8
- ------------------------------------------------------- ---------- -------- -------- ------- ---------- -------- -------- -------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 154,542 138,406 16,136 11.7 306,235 268,829 37,406 13.9
- ------------------------------------------------------- ---------- -------- -------- ------- ---------- -------- -------- -------
NONINTEREST INCOME:
Service charges on deposit accounts 22,612 22,730 (118) (0.5) 44,986 43,924 1,062 2.4
Other service charges, collections, commissions & fees 18,355 12,086 6,269 51.9 33,909 23,773 10,136 42.6
Asset securitization gains 13,901 1,864 12,037 645.8 16,449 7,816 8,633 110.5
Bankcard servicing fees & third-party processing fees 8,764 8,204 560 6.8 17,476 16,687 789 4.7
Insurance commissions & fees 4,088 4,056 32 0.8 8,009 8,606 (597) (6.9)
Mortgage banking activities 51,448 26,475 24,973 94.3 95,657 49,189 46,468 94.5
Mortgage banking activities MSR amortization (10,184) (4,227) (5,957) (140.9) (17,588) (8,091) (9,497) (117.4)
Trust (fiduciary) commissions & fees 7,163 6,293 870 13.8 13,747 12,037 1,710 14.2
Trading account securities gains (losses) 416 157 259 165.0 245 934 (689) (73.8)
Available for sale securities gains (losses) 1,603 2,276 (673) (29.6) 3,312 2,913 399 13.7
Other 368 2,092 (1,724) (82.4) 10,848 4,951 5,897 119.1
- ------------------------------------------------------- ---------- -------- -------- ------- ---------- -------- -------- -------
TOTAL NONINTEREST INCOME 118,534 82,006 36,528 44.5 227,050 162,739 64,311 39.5
- ------------------------------------------------------- ---------- -------- -------- ------- ---------- -------- -------- -------
NONINTEREST EXPENSES:
Salaries & employee benefits 95,557 73,673 21,884 29.7 184,923 143,114 41,809 29.2
Amortization of intangibles 2,882 2,487 395 15.9 5,502 4,836 666 13.8
Armored & messenger 1,658 1,465 193 13.2 3,280 2,998 282 9.4
Bankcard interbank interchange & fees 8,252 8,383 (131) (1.6) 17,387 16,539 848 5.1
Credit, appraisal & repossessions 7,711 2,075 5,636 271.6 12,644 5,676 6,968 122.8
Fees 3,400 3,222 178 5.5 5,879 5,221 658 12.6
Furniture & equipment 15,085 11,722 3,363 28.7 27,584 22,078 5,506 24.9
Insurance 2,329 1,805 524 29.0 4,109 3,145 964 30.7
Marketing 3,857 2,968 889 30.0 7,454 6,070 1,384 22.8
Occupancy, net 9,604 9,396 208 2.2 18,744 17,932 812 4.5
Other real estate expense & loss provision (recovery) 111 383 (272) (71.0) 392 1,143 (751) (65.7)
Postage 3,422 2,614 808 30.9 6,672 5,397 1,275 23.6
Professional 6,499 3,253 3,246 99.8 11,289 6,218 5,071 81.6
Stationery & supplies 5,449 4,144 1,305 31.5 10,800 8,278 2,522 30.5
Telephone 3,415 3,939 (524) (13.3) 7,724 8,179 (455) (5.6)
Travel 3,059 2,532 527 20.8 5,605 4,544 1,061 23.3
Other 11,987 6,597 5,390 81.7 20,095 12,762 7,333 57.5
- ------------------------------------------------------- ---------- -------- -------- ------- ---------- -------- -------- -------
TOTAL NONINTEREST EXPENSES 184,277 140,658 43,619 31.0 350,083 274,130 75,953 27.7
- ------------------------------------------------------- ---------- -------- -------- ------- ---------- -------- -------- -------
INCOME BEFORE PROVISION FOR INCOME TAXES 88,799 79,754 9,045 11.3 183,202 157,438 25,764 16.4
Provision for income taxes 32,892 28,550 4,342 15.2 65,926 56,231 9,695 17.2
- ------------------------------------------------------- ---------- -------- -------- ------- ---------- -------- -------- -------
NET INCOME 55,907 51,204 4,703 9.2 117,276 101,207 16,069 15.9
======================================================= ========== ======== ======== ======= ========== ======== ======== =======
MEMO: NET INCOME BEFORE CSTB ACQUISTION CHARGE (A) 63,133 51,204 11,929 23.3 124,502 101,207 23,295 23.0
======================================================= ========== ======== ======== ======= ========== ======== ======== =======
Dividend requirement of preferred stock 7 8 (1) (12.5) 14 16 (2) (12.5)
- ------------------------------------------------------- ---------- -------- -------- ------- ---------- -------- -------- -------
NET INCOME APPLICABLE TO COMMON STOCK 55,900 51,196 4,704 9.2 117,262 101,191 16,071 15.9
======================================================= ========== ======== ======== ======= ========== ======== ======== =======
Common stock dividend 22,943 19,569 3,374 17.2 46,529 37,329 9,200 24.6
======================================================= ========== ======== ======== ======= ========== ======== ======== =======
EARNINGS PER COMMON SHARE:
Earnings per common share basic 0.30 0.29 0.01 3.4 0.63 0.56 0.07 12.5
Earnings per common share diluted 0.29 0.28 0.01 3.6 0.60 0.54 0.06 11.1
Common shares basic [Avg] 187,623 179,359 8,264 4.6 186,983 179,789 7,194 4.0
Common shares diluted [Avg] 194,471 185,609 8,862 4.8 193,993 185,964 8,029 4.3
======================================================= ========== ======== ======== ======= ========== ======== ======== =======
CASH DIVIDENDS PAID OR ACCRUED PER SHARE:
Preferred stock dividend ($3.15 annual rate) 0.79 0.79 0.00 0.0 1.58 1.58 0.00 0.0
Common stock dividend 0.130 0.113 0.02 15.0 0.260 0.215 0.05 20.9
======================================================= ========== ======== ======== ======= ========== ======== ======== =======
<FN>
Notes:
(A) All FSCO financial statements have been restated to reflect the following:
- the May 29, 1998 acquisition of California State Bank in a pooling of interests merger.
FSCO incurred one-time acquisition charges of $7.2 million or $0.037 per share after tax.
- two separate 3-for-2 stock splits in the form of 50% stock dividends paid in May 1997 and February 1998.
</TABLE>
<PAGE>
<TABLE>
FIRST SECURITY CORPORATION
CONSOLIDATED BALANCE SHEETS
($ in thousands; unaudited) (A)
<CAPTION>
June 30 December 31 June 30 Jun/Jun Jun/Jun
1998 1997 1997 $ Chg % Chg
<S> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------- ----------- ----------- ----------- ----------- -------
ASSETS:
Cash & due from banks 908,605 1,219,435 872,726 35,879 4.1
Federal funds sold & securities purchased under resale agreements 26,323 206,266 283,959 (257,636) (90.7)
- --------------------------------------------------------------------------- ----------- ----------- ----------- ----------- -------
Total Cash & Cash Equivalents 934,928 1,425,701 1,156,685 (221,757) (19.2)
Interest-bearing deposits in other banks 605 600 600 5 0.8
Trading account securities 53,343 255,320 274,014 (220,671) (80.5)
Available for sale securities, at fair value 4,806,559 4,351,525 3,642,437 1,164,122 32.0
(Amortized cost: $4,767,405; $4,313,847; and $3,640,356; respectively)
- --------------------------------------------------------------------------- ----------- ----------- ----------- ----------- -------
Loans, net of unearned income 12,530,360 11,230,766 10,528,449 2,001,911 19.0
(Unearned income: $105,407; $106,369; and $98,888; respectively)
Reserve for loan losses (166,658) (157,525) (150,170) (16,488) 11.0
- --------------------------------------------------------------------------- ----------- ----------- ----------- ----------- -------
Total Loans, Net 12,363,702 11,073,241 10,378,279 1,985,423 19.1
- --------------------------------------------------------------------------- ----------- ----------- ----------- ----------- -------
Premises & equipment, net 316,999 288,433 280,582 36,417 13.0
Accrued income receivable 112,510 106,974 95,361 17,149 18.0
Other real estate 3,908 7,981 8,449 (4,541) (53.7)
Other assets 415,905 356,852 313,592 102,313 32.6
- --------------------------------------------------------------------------- ----------- ----------- ----------- ----------- -------
Goodwill 208,657 174,928 173,298 35,359 20.4
Mortgage servicing rights 138,699 108,630 88,438 50,261 56.8
Other intangible assets 4,191 1,598 1,787 2,404 134.5
- --------------------------------------------------------------------------- ----------- ----------- ----------- ----------- -------
Total Intangible Assets 351,547 285,156 263,523 88,024 33.4
- --------------------------------------------------------------------------- ----------- ----------- ----------- ----------- -------
TOTAL ASSETS 19,360,006 18,151,783 16,413,522 2,946,484 18.0
=========================================================================== =========== =========== =========== =========== =======
LIABILITIES:
Deposits: noninterest-bearing 2,402,497 2,431,006 2,435,479 (32,982) (1.4)
Deposits: interest-bearing 9,514,706 8,986,628 8,039,087 1,475,619 18.4
- --------------------------------------------------------------------------- ----------- ----------- ----------- ----------- -------
Total Deposits 11,917,203 11,417,634 10,474,566 1,442,637 13.8
- --------------------------------------------------------------------------- ----------- ----------- ----------- ----------- -------
Federal funds purchased & securities sold under repurchase agreements 3,480,902 3,252,259 2,975,864 505,038 17.0
U.S. Treasury demand notes 37,562 21,050 20,440 17,122 83.8
Other short-term borrowings 386,786 331,890 288,939 97,847 33.9
Accrued income taxes 303,779 255,062 212,456 91,323 43.0
Accrued interest payable 46,147 51,928 38,600 7,547 19.6
Other liabilities 131,713 116,651 99,550 32,163 32.3
Long-term debt 1,513,044 1,304,463 959,897 553,147 57.6
- --------------------------------------------------------------------------- ----------- ----------- ----------- ----------- -------
TOTAL LIABILITIES 17,817,136 16,750,937 15,070,312 2,746,824 18.2
- --------------------------------------------------------------------------- ----------- ----------- ----------- ----------- -------
STOCKHOLDERS' EQUITY:
Preferred stock: Series "A" $3.15 cumulative convertible 493 501 532 (39) (7.3)
(Shares issued: 9; 10; and 10; respectively)
- --------------------------------------------------------------------------- ----------- ----------- ----------- ----------- -------
Common Stockholders' Equity:
Common stock: par value $1.25 236,416 232,595 236,010 406 0.2
(Shares issued: 189,133; 186,076; and 188,808; respectively)
Paid-in surplus 188,365 149,683 177,785 10,580 6.0
Retained earnings 1,117,921 1,047,366 978,340 139,581 14.3
Accumulated other comprehensive income 24,553 23,569 1,529 23,024 1505.8
- --------------------------------------------------------------------------- ----------- ----------- ----------- ----------- -------
Subtotal 1,567,255 1,453,213 1,393,664 173,591 12.5
- --------------------------------------------------------------------------- ----------- ----------- ----------- ----------- -------
Common treasury stock, at cost (24,878) (52,868) (50,986) 26,108 (51.2)
(Shares: 1,238; 1,654; and 3,993; respectively)
- --------------------------------------------------------------------------- ----------- ----------- ----------- ----------- -------
Total Common Stockholders' Equity 1,542,377 1,400,345 1,342,678 199,699 14.9
- --------------------------------------------------------------------------- ----------- ----------- ----------- ----------- -------
TOTAL STOCKHOLDERS' EQUITY 1,542,870 1,400,846 1,343,210 199,660 14.9
- --------------------------------------------------------------------------- ----------- ----------- ----------- ----------- -------
TOTAL LIABILITIES & STOCKHOLDERS' EQUITY 19,360,006 18,151,783 16,413,522 2,946,484 18.0
=========================================================================== =========== =========== =========== =========== =======
<FN>
Notes:
(A) All FSCO financial statements have been restated to reflect the following:
- the May 29, 1998 acquisition of California State Bank in a pooling of interests merger.
- two separate 3-for-2 stock splits in the form of 50% stock dividends paid in May 1997 and February 1998.
</TABLE>
<PAGE>
<TABLE>
FIRST SECURITY CORPORATION
FINANCIAL HIGHLIGHTS
(in thousands, except per share data and ratios; unaudited) (A)
<CAPTION>
2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr Year-To-Date Six Months
1998 1998 1997 1997 1997 1998 1997 %Chg
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Common & Preferred Stock Data (A):
Earnings per common share basic 0.30 0.33 0.31 0.30 0.29 0.63 0.56 12.5
Earnings per common share diluted 0.29 0.32 0.30 0.29 0.28 0.60 0.54 11.1
Tangible EPCS diluted 0.33 0.35 0.31 0.33 0.30 0.69 0.59 16.9
Dividends paid per common share 0.130 0.130 0.113 0.113 0.113 0.260 0.215 20.9
Book value per common share [EOP] 8.21 8.02 7.59 7.48 7.26 8.21 7.26 13.1
Tangible book value per common share [EOP] 6.34 6.21 6.05 6.04 5.84 6.34 5.84 8.6
Market price (bid) [EOP] 21.375 23.813 27.917 19.833 18.209 21.375 18.209 17.4
High bid for the period 24.750 26.167 27.917 21.333 19.000 26.167 19.000 37.7
Low bid for the period 21.000 21.833 19.083 17.583 14.445 21.000 14.222 47.7
Market capitalization (mktprice x #shrs) [EOP] 4,016,256 4,457,936 5,148,509 3,664,543 3,365,296 4,016,256 3,365,296 19.3
Market price / book value per com share [EOP] % 260.35 296.92 367.81 265.15 250.81 260.35 250.81
Dividend payout ratio (DPCS / EPCS basic) % 43.33 39.39 36.45 37.67 38.97 41.27 38.39
Dividend yield (DPCS / mktprice) [EOP] % 2.43 2.18 1.62 2.28 2.48 2.43 2.48
Price / earnings ratio(mktprice/4qtrsEPCSbasic) 17.2x 19.4x 23.7x 17.0x 16.0x 17.2x 16.0x
Common shares basic [EOP] 187,895 187,206 184,422 184,770 184,815 187,895 184,815 1.7
Common shares basic [Avg] 187,623 186,336 184,583 184,717 179,359 186,983 179,789 4.0
Common shares diluted [Avg] 194,471 193,510 191,671 191,268 185,609 193,993 185,964 4.3
Preferred shares [EOP] 9 10 10 10 10 9 10 (10.0)
- ---------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Income Statement:
Interest income 350,950 334,101 328,965 315,683 294,255 685,051 568,730 20.5
Interest expense 178,012 169,810 163,388 152,372 141,775 347,822 271,679 28.0
Net interest income 172,938 164,292 165,577 163,310 152,480 337,229 297,051 13.5
Fully taxable equivalent (FTE) adjustment 2,827 2,579 4,176 2,336 1,851 5,406 3,858 40.1
Net interest income, FTE 175,765 166,871 169,753 165,646 154,331 342,635 300,909 13.9
Provision for loan losses 18,396 12,598 21,243 13,921 14,074 30,994 28,222 9.8
Noninterest income 118,534 108,516 106,876 87,543 82,006 227,050 162,739 39.5
Noninterest expenses 184,277 165,806 164,944 149,830 140,658 350,083 274,130 27.7
Provision for income taxes 32,892 33,034 28,235 31,066 28,550 65,926 56,231 17.2
Net income 55,907 61,369 58,031 56,036 51,204 117,276 101,207 15.9
Memo: Net income before CSTB Acquisition charges 63,133 61,369 58,031 56,036 51,204 124,502 101,207 23.0
Preferred stock dividend requirement 7 7 7 7 8 14 16 (12.5)
Common stock dividend 22,943 23,586 20,308 20,318 19,569 46,529 37,329 24.6
- ---------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Balance Sheet - End of Period:
Trading account securities 53,343 318,224 255,320 87,154 274,014 53,343 274,014 (80.5)
Available for sale (AFS) securities 4,806,559 4,386,629 4,351,525 4,109,176 3,642,437 4,806,559 3,642,437 32.0
Memo: fair value adjustment AFS securities 39,154 34,640 37,678 19,196 2,081 39,154 2,081 1781.5
Loans, net of unearned income 12,530,360 12,436,407 11,230,766 11,159,090 10,528,449 12,530,360 10,528,449 19.0
Reserve for loan losses (166,658) (163,256) (157,525) (152,951) (150,170) (166,658) (150,170) 11.0
Total interest-earning assets 17,417,190 17,219,384 16,044,477 15,374,616 14,729,459 17,417,190 14,729,459 18.2
Intangible assets 351,547 338,844 285,156 265,492 263,523 351,547 263,523 33.4
Total assets 19,360,006 19,132,896 18,151,783 17,145,647 16,413,522 19,360,006 16,413,522 18.0
Noninterest-bearing deposits 2,402,497 2,339,665 2,431,006 2,391,563 2,435,479 2,402,497 2,435,479 (1.4)
Interest-bearing deposits 9,514,706 9,483,289 8,986,628 8,531,915 8,039,087 9,514,706 8,039,087 18.4
Total deposits 11,917,203 11,822,954 11,417,634 10,923,478 10,474,566 11,917,203 10,474,566 13.8
Short-term borrowed funds 3,905,250 3,986,966 3,605,199 3,399,509 3,285,243 3,905,250 3,285,243 18.9
Long-term debt 1,513,044 1,339,892 1,304,463 954,463 959,897 1,513,044 959,897 57.6
Total interest-bearing liabilities 14,933,000 14,810,147 13,896,290 12,885,887 12,284,227 14,933,000 12,284,227 21.6
Preferred stockholders' equity 493 501 501 511 532 493 532 (7.3)
Common stockholders' equity 1,542,377 1,500,734 1,400,345 1,381,980 1,342,678 1,542,377 1,342,678 14.9
Parent company investment in subsidiaries 1,719,975 1,678,122 1,555,112 1,503,053 1,450,529 1,719,975 1,450,529 18.6
- ---------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Problem Assets & Potential Problem Assets - End of Period:
Total nonaccruing loans 39,713 36,553 34,960 38,088 38,829 39,713 38,829 2.3
Other real estate 3,908 4,342 7,981 6,789 8,449 3,908 8,449 (53.7)
Total nonperforming assets 43,621 40,895 42,941 44,877 47,278 43,621 47,278 (7.7)
Accruing loans past due 90 days or more 22,833 19,693 20,841 20,109 20,727 22,833 20,727 10.2
Total problem assets 66,454 60,588 63,782 64,986 68,005 66,454 68,005 (2.3)
Potential problem assets 8,209 11,493 7,423 11,654 9,742 8,209 9,742 (15.7)
- ---------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Other Data - End of Period (not rounded):
Full-time equivalent employees 8,659 8,214 7,996 7,826 7,665 8,659 7,665 13.0
Domestic bank offices:
FS Bank: Utah (B) 132 130 129 127 124 132 124 6.5
FS Bank: Idaho (B) 88 88 88 87 87 88 87 1.1
FS Bank: Oregon (B) 14 13 13 13 13 14 13 7.7
FS Bank: Wyoming (B) 8 8 8 7 7 8 7 14.3
FSB New Mexico 31 31 31 29 29 31 29 6.9
FSB Southern New Mexico (C) 11 0 0 0 11 0 NM
FSB Nevada 14 14 14 14 13 14 13 7.7
California State Bank (A) 17 17 17 18 18 17 18 (5.6)
Total domestic bank offices 315 312 300 295 291 315 291 8.2
============================================== ========== ========== ========== ========== ========== ========== ========== =======
<FN>
Notes:
EOP: End Of Period. EPCS: Earnings Per Common Share. DPCS: Dividends Per Common Share. AFS: Available For Sale. NM: Not Meaningful.
(A) All FSCO financial statements have been restated to reflect the following:
- the May 29, 1998 acquisition of California State Bank in a pooling of interests merger.
- two separate 3-for-2 stock splits in the form of 50% stock dividends paid in May 1997 and February 1998.
(B) FSCO created FS Bank from these mergers: FSB Utah and FSB Idaho (June 1996); FSB Oregon (May 1997); FSB Wyoming (November 1997).
(C) FSCO purchased Rio Grande Bancshares, Inc. and its two bank subsidiaries in February 1998, and merged and renamed them in July
1998.
</TABLE>
<PAGE>
<TABLE>
FIRST SECURITY CORPORATION
FINANCIAL HIGHLIGHTS - Continued
(in thousands, except per share data and ratios; unaudited) (A)
<CAPTION>
2nd Qtr 1st Qtr 4th Qtr 3rd Qtr 2nd Qtr Year-To-Date Six Months
1998 1998 1997 1997 1997 1998 1997 %Chg
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Balance Sheet - Average:
Trading account securities 138,157 295,414 163,330 178,070 360,339 216,351 264,748 (18.3)
Available for sale (AFS) securities 4,524,500 4,310,715 4,190,292 3,728,035 3,521,411 4,418,198 3,443,416 28.3
Memo: fair value adjustment AFS securities 33,956 41,342 28,511 13,808 (17,755) 37,629 (7,272) (617.5)
Loans, net of unearned income 12,374,882 11,656,881 11,214,784 10,829,751 10,006,397 12,017,865 9,823,971 22.3
Reserve for loan losses (164,256) (160,269) (153,922) (151,204) (144,385) (162,274) (143,472) 13.1
Deferred taxes on leases (198,673) (196,556) (192,903) (186,212) (187,553) (197,620) (185,586) 6.5
Total interest-earning assets, excluding
fair value adjustment AFS securities
& deferred taxes on leases 16,939,894 16,091,448 15,415,241 14,612,051 13,785,315 16,518,015 13,442,052 22.9
Intangible assets 349,850 308,452 271,770 262,789 195,413 329,266 191,890 71.6
Total assets 18,998,533 18,085,153 17,295,476 16,394,898 15,433,778 18,544,366 15,108,031 22.7
Noninterest-bearing deposits 2,252,282 2,181,985 2,231,130 2,260,560 2,215,276 2,217,328 2,159,506 2.7
Interest-bearing deposits 9,459,908 9,207,647 8,658,839 8,223,536 7,781,168 9,334,474 7,761,142 20.3
Total deposits 11,712,190 11,389,632 10,889,970 10,484,096 9,996,444 11,551,802 9,920,648 16.4
Short-term borrowed funds 3,851,257 3,522,497 3,350,840 3,210,660 2,889,451 3,687,785 2,653,587 39.0
Long-term debt 1,433,195 1,314,965 1,246,482 971,356 989,408 1,374,407 970,236 41.7
Total interest-bearing liabilities 14,744,360 14,045,109 13,256,161 12,405,553 11,660,027 14,396,666 11,384,965 26.5
Preferred stockholders' equity 497 501 506 524 532 499 534 (6.6)
Common stockholders' equity 1,519,335 1,411,739 1,384,287 1,362,645 1,214,361 1,465,834 1,217,636 20.4
- ---------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Reconciliation of the Reserve for Loan Losses:
Reserve for loan losses, beginning 163,256 157,525 152,951 150,170 144,225 157,525 142,693 10.4
Total loans charged off (23,011) (18,885) (24,363) (18,976) (22,520) (41,896) (42,854) (2.2)
Total recoveries of loans charged off 8,017 9,091 7,694 7,836 9,932 17,108 17,650 (3.1)
Net loans (charged off) recovered (14,994) (9,794) (16,669) (11,140) (12,588) (24,788) (25,204) (1.7)
Provision for loan losses 18,396 12,598 21,243 13,921 14,074 30,994 28,222 9.8
Acquisitions 0 2,927 0 0 4,459 2,927 (34.4)
Reserve for loan losses, ending 166,658 163,256 157,525 152,951 150,170 166,658 150,170 11.0
- ---------------------------------------------- ---------- ---------- ---------- ---------- ---------- ---------- ---------- -------
Selected Ratios (%):
Return on average assets (ROAA) 1.18 1.38 1.33 1.36 1.33 1.28 1.35
Tangible ROAA 1.40 1.56 1.39 1.56 1.46 1.48 1.48
Return on average stockholders' equity (ROAE) 14.75 17.62 16.63 16.31 16.91 16.13 16.75
Tangible ROAE 22.26 25.14 21.31 22.85 21.83 23.65 21.51
Net interest margin, FTE 4.15 4.15 4.40 4.53 4.48 4.15 4.48
Net interest spread, FTE 3.52 3.53 3.71 3.79 3.73 3.53 3.75
Operating expense ratio
(nonint exp / (net int inc FTE + nonint inc)) 62.62 60.21 59.63 59.18 59.52 61.45 59.12
Tangible operating expense ratio 59.57 57.71 59.04 56.91 57.44 58.67 57.09
Productivity ratio (nonint exp / avg assets) 3.89 3.72 3.78 3.63 3.66 3.81 3.66
Stockholders' equity / assets [EOP] 7.97 7.85 7.72 8.06 8.18 7.97 8.18
Stockholders' equity / assets [Avg] 8.00 7.81 8.01 8.31 7.87 7.91 8.06
Tangible common equity / tangible assets [EOP] 6.26 6.18 6.24 6.61 6.68 6.26 6.68
Loans / deposits [EOP] 105.15 105.19 98.36 102.16 100.51 105.15 100.51
Loans / assets [EOP] 64.72 65.00 61.87 65.08 64.14 64.72 64.14
Reserve for loan losses [EOP] /:
Total loans 1.33 1.31 1.40 1.37 1.43 1.33 1.43
Nonaccruing loans 419.66 446.63 450.59 401.57 386.75 419.66 386.75
Nonaccruing + accruing loans past due 90 days 266.46 290.25 282.30 262.82 252.15 266.46 252.15
Nonaccruing loans / total loans 0.32 0.29 0.31 0.34 0.37 0.32 0.37
Accruing loans past due 90 days / total loans 0.18 0.16 0.19 0.18 0.20 0.18 0.20
Nonaccruing + accr loans past due / total loans 0.50 0.45 0.50 0.52 0.57 0.50 0.57
Nonperforming assets /:
Total loans + other real estate 0.35 0.33 0.38 0.40 0.45 0.35 0.45
Total assets 0.23 0.21 0.24 0.26 0.29 0.23 0.29
Total equity 2.83 2.72 3.07 3.25 3.52 2.83 3.52
Total equity + reserve for loan losses 2.55 2.46 2.76 2.92 3.17 2.55 3.17
Problem assets /:
Total loans + other real estate 0.53 0.49 0.57 0.58 0.65 0.53 0.65
Total assets 0.34 0.32 0.35 0.38 0.41 0.34 0.41
Total equity 4.31 4.04 4.55 4.70 5.06 4.31 5.06
Total equity + reserve for loan losses 3.89 3.64 4.09 4.23 4.55 3.89 4.55
Net loans charged off / average loans 0.49 0.34 0.59 0.41 0.50 0.42 0.52
============================================== ========== ========== ========== ========== ========== ========== ========== =======
<FN>
Notes:
EOP: End Of Period. EPCS: Earnings Per Common Share. DPCS: Dividends Per Common Share. AFS: Available For Sale. NM: Not Meaningful.
(A) All FSCO financial statements have been restated to reflect the following:
- the May 29, 1998 acquisition of California State Bank in a pooling of interests merger.
- two separate 3-for-2 stock splits in the form of 50% stock dividends paid in May 1997 and February 1998.
(B) FSCO created FS Bank from these mergers: FSB Utah and FSB Idaho (June 1996); FSB Oregon (May 1997); FSB Wyoming (November 1997).
(C) FSCO purchased Rio Grande Bancshares, Inc. and its two bank subsidiaries in February 1998, and merged and renamed them in July
1998.
</TABLE>
<PAGE>
<TABLE>
FIRST SECURITY CORPORATION
VOLUME / RATE ANALYSIS
(in thousands; fully taxable equivalent; unaudited) (A, B)
<CAPTION>
For the Three Months Ended June 30, 1998 and 1997
Average Balance Yield/Rate % Interest Inc/Exp Change Changes Due To:
1998 1997 1998 1997 1998 1997 1998-97 Volume Rate
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
INTEREST-EARNING ASSETS / INCOME:
133,868 66,465 5.67 5.34 Federal funds sold & securities purchased 1,897 887 1,010 900 110
1,116 501 3.94 8.78 Interest-bearing deposits in other banks 11 11 0 14 (14)
138,157 360,339 5.28 5.94 Trading account securities 1,822 5,355 (3,533) (3,302) (231)
4,490,544 3,539,166 6.62 6.71 Available for sale securities, amortized cost 74,351 59,397 14,954 15,967 (1,013)
Loans, net of unearned income &
12,176,209 9,818,844 9.06 9.39 deferred taxes on leases (C) 275,696 230,456 45,240 55,329 (10,089)
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
16,939,894 13,785,315 8.35 8.59 TOTAL INTEREST-EARNING ASSETS / INCOME 353,777 296,106 57,671 68,908 (11,237)
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
INTEREST-BEARING LIABILITIES / EXPENSE:
Interest-Bearing Deposits:
339,386 582,317 1.69 1.69 Interest-bearing demand accounts 1,437 2,454 (1,017) (1,024) 7
4,245,292 3,297,333 2.93 3.23 Savings & money market accounts 31,114 26,654 4,460 7,663 (3,203)
1,373,212 867,652 5.74 5.73 Time deposits of $100,000 or more 19,716 12,436 7,280 7,246 34
3,502,018 3,033,866 5.68 5.67 Other time deposits 49,749 43,031 6,718 6,640 78
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
9,459,908 7,781,168 4.31 4.35 TOTAL INTEREST-BEARING DEPOSITS 102,016 84,575 17,441 20,525 (3,084)
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
3,406,527 2,609,783 5.37 5.38 Federal funds purchased & securities sold 45,710 35,122 10,588 10,722 (134)
444,730 279,668 5.80 7.07 Other short-term borrowings 6,447 4,945 1,502 2,919 (1,417)
1,433,195 989,408 6.65 6.93 Long-term debt 23,839 17,133 6,706 7,685 (979)
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
14,744,360 11,660,027 4.83 4.86 TOTAL INTEREST-BEARING LIABILITIES / EXPENSE 178,012 141,775 36,237 41,851 (5,614)
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
8.35 8.59 Interest income / earning assets
4.20 4.11 Interest expense / earning assets
------ ------ --------------------------------------------
4.15 4.48 Net interest income / earning assets 175,765 154,331 21,434 27,057 (5,623)
Less fully taxable equivalent adjustment 2,827 1,851 976
------ ------ -------------------------------------------- --------- --------- -------- -------- --------
NET INTEREST INCOME, PER CONSOLIDATED
STATEMENTS OF INCOME 172,938 152,480 20,458
=========== =========== ====== ====== ============================================ ========= ========= ======== ======== ========
<CAPTION>
For the Six Months Ended June 30, 1998 and 1997
Average Balance Yield/Rate % Interest Inc/Exp Change Changes Due To:
1998 1997 1998 1997 1998 1997 1998-97 Volume Rate
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
INTEREST-EARNING ASSETS / INCOME:
99,502 85,866 5.76 5.15 Federal funds sold & securities purchased 2,865 2,213 652 351 301
1,348 2,365 6.23 5.67 Interest-bearing deposits in other banks 42 67 (25) (29) 4
216,351 264,748 5.60 5.87 Trading account securities 6,060 7,770 (1,710) (1,420) (290)
4,380,569 3,450,688 6.65 6.68 Available for sale securities, amortized cost 145,707 115,241 30,466 31,055 (589)
Loans, net of unearned income &
11,820,245 9,638,385 9.07 9.28 deferred taxes on leases (C) 535,783 447,297 88,486 101,255 (12,769)
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
16,518,015 13,442,052 8.36 8.52 TOTAL INTEREST-EARNING ASSETS / INCOME 690,457 572,588 117,869 131,212 (13,343)
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
INTEREST-BEARING LIABILITIES / EXPENSE:
Interest-Bearing Deposits:
323,932 649,441 1.73 2.23 Interest-bearing demand accounts 2,800 7,247 (4,447) (3,632) (815)
4,151,106 3,260,814 2.95 3.14 Savings & money market accounts 61,307 51,132 10,175 13,960 (3,785)
1,366,514 864,969 5.80 5.60 Time deposits of $100,000 or more 39,628 24,223 15,405 14,046 1,359
3,492,922 2,985,918 5.66 5.61 Other time deposits 98,790 83,702 15,088 14,212 876
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
9,334,474 7,761,142 4.34 4.29 TOTAL INTEREST-BEARING DEPOSITS 202,525 166,304 36,221 38,586 (2,365)
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
3,270,058 2,373,688 5.34 5.22 Federal funds purchased & securities sold 87,304 61,946 25,358 23,393 1,965
417,727 279,899 5.83 6.73 Other short-term borrowings 12,180 9,414 2,766 4,636 (1,870)
1,374,407 970,236 6.67 7.01 Long-term debt 45,813 34,015 11,798 14,170 (2,372)
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
14,396,666 11,384,965 4.83 4.77 TOTAL INTEREST-BEARING LIABILITIES / EXPENSE 347,822 271,679 76,143 80,785 (4,642)
- ----------- ----------- ------ ------ -------------------------------------------- --------- --------- -------- -------- --------
8.36 8.52 Interest income / earning assets
4.21 4.04 Interest expense / earning assets
------ ------ --------------------------------------------
4.15 4.48 Net interest income / earning assets 342,635 300,909 41,726 50,427 (8,701)
Less fully taxable equivalent adjustment 5,406 3,858 1,548
------ ------ -------------------------------------------- --------- --------- -------- -------- --------
NET INTEREST INCOME, PER CONSOLIDATED
STATEMENTS OF INCOME 337,229 297,051 40,178
=========== =========== ====== ====== ============================================ ========= ========= ======== ======== ========
<FN>
Notes:
(A) All FSCO financial statements have been restated to reflect the following:
- the May 29, 1998 acquisition of California State Bank in a pooling of interests merger.
- two separate 3-for-2 stock splits in the form of 50% stock dividends paid in May 1997 and February 1998.
(B) Changes not due entirely to changes in volume or rate have been allocated to rate.
Interest is 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% for 1998 and 1997.
(C) Loans include nonaccruing loans.
Interest on loans includes fees of $11,300 and $9,544 for the 1998 and 1997 quarters, respectively.
Interest on loans includes fees of $21,155 and $17,649 for the 1998 and 1997 year-to-date periods, respectively.
</TABLE>
