SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): November 19, 1999
FIRST SECURITY CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware 1-6906 87-6118148
(State or Other (Commission File (I.R.S. Employer
Jurisdiction of Number) Identification No.)
Incorporation)
79 South Main, P.O. Box 30006 84130-0006
Salt Lake City, Utah (Zip Code)
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (801) 246-5976
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
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Item 5. Other Events.
On November 19, 1999, First Security Corporation ("FSCO") announced
that following consultation with staff of the Office of the Comptroller of the
Currency (the "OCC"), FSCO has determined to modify the regulatory accounting
treatment of certain securitization transactions entered into by its
wholly-owned subsidiary, First Security Bank, N.A. (the "Bank") for purposes of
calculating the level of regulatory capital maintained by the Bank for the
period from April 1, 1998 to June 30, 1999 (the "Covered Period"). As a result,
the Bank will amend and refile with the OCC its consolidated reports of
condition and income ("call reports") for the Covered Period to show the
inclusion in the Bank's total risk-weighted assets of various assets previously
sold by the Bank in securitization transactions. The Bank plans to file the
amended call reports before year-end 1999.
FSCO expects that the effect of the change in the Bank's regulatory
reporting will be to reduce the Bank's ratio of total regulatory capital to
risk-weighted assets ("total capital ratio") for the Covered Period to levels
between 9.27 percent and 10 percent, such that the Bank will have been
"adequately capitalized" (i.e., with a total capital ratio within the range of 8
percent and 10 percent in addition to meeting certain other requirements) rather
than "well capitalized" (i.e., with a total capital ratio in excess of 10
percent in addition to meeting certain other requirements) for the Covered
Period as previously reported. The Bank's ratio of tier 1 capital to
risk-weighted assets will remain well above 6 percent during the Covered Period,
as well as before and since the Covered Period, and its regulatory leverage
ratio will remain well above 5 percent during the Covered Period, as well as
before and since the Covered Period, which levels are consistent with "well
capitalized" status. The Bank's call report for the third quarter 1999, for
which period the total capital ratio of the Bank was reported at 10.22 percent,
will not be amended, and the Bank expects to file call reports for periods
subsequent to the third quarter 1999 on a basis consistent with that of the
third quarter 1999. Moreover, accounting treatment of the securitization
transactions for purposes of FSCO's historical financial statements, including
statements covering the Covered Period, will not change, as the reporting of
these transactions has been in accordance with generally accepted accounting
principles.
The modifications that were made to the regulatory accounting
treatment for the Covered Period followed the OCC's review of certain of the
Bank's practices involving the repurchase of loans from the trusts to which the
loans had been sold. The Bank had repurchased a small number of loans following
changes to interest rates or repayment schedules for the particular loans, or in
response to the destruction of the collateral securing the loans, pursuant to
loan-administration decisions at the Bank. The relevant practices have been
discontinued. Approximately 811 loans (out of approximately 330,000 loans that
were originally securitized) were repurchased during the Covered Period in
exchange for approximately $3,383,486, and aggregate losses on the repurchased
loans were approximately $181,157.
For regulatory accounting and bank holding company capital purposes,
FSCO has remained "well capitalized" at all times during the Covered Period, as
well as before and since the Covered Period, with total capital ratios above 10
percent. It is FSCO's policy to maintain the "well capitalized" status at both
the consolidated and subsidiary bank levels.
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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 hereunto duly authorized.
FIRST SECURITY CORPORATION
By: /s/ Brad D. Hardy
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Name: Brad D. Hardy
Title: Executive Vice President Corporate
Services, General Counsel, Chief
Financial Officer and Secretary
Dated: November 19, 1999
