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): July 20, 1999
FIRST SECURITY CORPORATION
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Exact name of registrant as specified in its charter
Delaware 1-6906 87-6118148
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State or other jurisdiction Commission File No. IRS Employer ID #
of incorporation
79 South Main, P.O. Box 30006, Salt Lake City, Utah 84130-0006
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Address and zip code of principal executive offices
801-246-5976
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Registrant's telephone number
<PAGE>
Item 5. Other Events
On July 18, 2000, First Security Corporation (FSCO) issued a press
release (a copy of which is attached to this report as Exhibit A) announcing its
earnings and results of operations for the second quarter of this year.
SIGNATURES
Pursuant to the requirements of the Securities and 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
(Registrant)
/s/ Brad D. Hardy July 20, 2000
--------------------------------- -----------------
Brad D. Hardy Date
Executive Vice President Corporate
Services, General Counsel, Chief Financial
Officer and Secretary of First Security Corporation
(Principal Financial and Accounting Officer)
<PAGE>
EXHIBIT A
FOR IMMEDIATE RELEASE Contact: Brad D. Hardy
July 18, 2000 (801) 246-5976
FIRST SECURITY CORPORATION ANNOUNCES SECOND QUARTER RESULTS
Highlights:
o Excluding the major unusual charges discussed below, net income for the
quarter was $56.5 million or $0.28 per share diluted, and year to date
net income was $114.9 million or $0.57 per share diluted
o Total assets of $22.5 billion
o Total equity of $1.7 billion
o Merger with Wells Fargo & Company expected to close by early October
SALT LAKE CITY -- First Security Corporation (Nasdaq: FSCO) today
reported that its second quarter 2000 earnings before certain unusual items were
$56.5 million or $0.28 per share, compared with $68.8 million or $0.35 per share
in the same quarter of 1999. For the year to date, net income before the unusual
items was $114.9 million or $0.57 per share, compared with $133.7 million or
$0.69 per share for the first half of 1999. Including the major unusual items
discussed below, there was a net loss for the quarter of $1.6 million or $0.01
per share but net income of $33.4 million or $0.17 per share for the year to
date.
Major Unusual Items
In the second quarter, First Security took actions to position the
Company and to address the remaining costs of the terminated merger with Zions
Bancorporation.
The following actions were taken as part of First Security's strategic
positioning resulting in certain unusual charges:
Asset Sales: First Security sold $2.0 billion of indirect auto loans
through securitization. These loans were fixed rate auto loans accumulated over
the last 12 to 18 months. First Security's historical practice has been to
securitize these loans every 4 to 6 months, but due to its pending merger
agreement with Zions, a securitization within the typical time frame did not
<PAGE>
occur. With rising interest rates over this time frame, it was appropriate to
sell the loans to address interest rate risk, reduce short-term funding
dependency, and free up capital. The sale of the $2.0 billion in automobile
loans resulted in a pre-tax loss of $49.7 million, $30.3 million after tax
(reported as a reduction of noninterest income).
Servicing Asset Adjustment: Based on changing market conditions, First
Security also charged off servicing assets associated with prior asset
securitizations, resulting in a pre-tax charge of $20.0 million, $12.2 million
after tax (also reflected in noninterest income).
Goodwill Adjustment: First Security charged off $8.4 million of
goodwill associated with its CrossLand Mortgage Corporation subsidiary.
Employee Expenses: First Security accrued $3.0 million as part of the
retention program to retain key personnel through the merger closing and $5.2
million to provide for other employee benefits.
Merger Termination Costs: First Security also incurred $2.9 million
pre-tax, $1.9 million after tax, as a result of the termination of its merger
agreement with Zions Bancorporation on March 31, 2000. This is in addition to
the $36.0 million pre-tax, $23.4 million after tax, reported in the first
quarter. First Security does not anticipate any material additional expenses
associated with the termination of the merger agreement with Zions.
Merger with Wells Fargo & Company
On April 10, 2000, First Security and Wells Fargo & Company (NYSE:WFC)
announced the signing of a definitive agreement to merge. Wells Fargo is a $222
billion diversified financial services company providing banking, insurance,
investments, mortgage and consumer finance from about 5,300 financial services
stores and the Internet (wellsfargo.com) across North America and elsewhere
internationally. The combined company will be the largest banking franchise in
deposits in Utah, Nevada, New Mexico, and Idaho, which comprise the nation's
fastest growing regional economy.
The proposed merger is expected to be completed by early October and is
expected to be accounted for as a pooling of interests. It is expected to be a
tax-free transaction for First Security stockholders and requires approval from
banking regulators and First Security stockholders. A special meeting of First
Security stockholders has been scheduled for July 31, 2000 to vote on the
merger.
<PAGE>
"We are excited about the progress that has already been made toward
our planned merger with Wells Fargo," said Spencer F. Eccles, First Security's
chairman and CEO. "More than ever, I am confident that First Security has found
the right partner in Wells Fargo, and I personally look forward to providing to
our customers, through First Security's 110% commitment to service, the best
financial products and services available in the marketplace now and well into
the future. This combination will provide our customers with more convenience
and products than ever before across the United States, including being part of
the nation's best Internet banking company."
Mr. Eccles continued, "Like First Security, Wells Fargo is committed to
its employees, has a reputation for outstanding customer service and local
decision-making, and is committed to being an outstanding corporate citizen.
This merger will also provide our stockholders with an investment in a
highly-regarded company with significant growth potential. I am positive that as
our merger with Wells Fargo is completed and our two great companies come
together, our stakeholders will agree that this is the best financial services
company in the industry."
Net Income
Excluding the effects of the major unusual items discussed above, First
Security had net income of $56.5 million or $0.28 per share for the second
quarter of 2000, compared with $68.8 million or $0.35 per share for the second
quarter of 1999. For the year to date, First Security had net income excluding
the unusual items of $114.9 million or $0.57 per share, compared with $133.7
million or $0.69 per share for the prior year period.
Including the unusual items, First Security had a net loss of $1.6
million or $0.01 per share for the second quarter of 2000 and net income of
$33.4 million or $0.17 per share for the first half of 2000.
Earnings have shown an overall decline from prior periods due to the
impacts of the uncertainty caused by pending mergers for the past year, pressure
on net interest income due to rapidly increasing rates, a significant slowdown
in mortgage originations by First Security's
<PAGE>
mortgage-producing affiliates, and lower second quarter earnings by First
Security's securities subsidiary.
The return on average assets (ROAA) excluding the unusual items was
0.96% for the quarter, compared with 1.26% for the second quarter of 1999, and
was 0.99% for the year to date, compared with 1.24% for the first half of 1999.
The return on average equity (ROAE) excluding the unusual items was 13.01% for
the quarter, compared with 16.52% for the prior year quarter, and for the year
to date, the ROAE was 13.19%, compared with 16.58% for the prior year period.
Including the unusual items, the ROAA was a negative 0.03% and the ROAE
was a negative 0.37% for the quarter, and for the year to date the ROAA was
0.29% and the ROAE was 3.85%.
The Tangible EPS diluted (EPS excluding the effects of amortization of
goodwill and deposit intangibles, net of tax) before the unusual items discussed
above was $0.36 for the second quarter, compared with $0.37 for the second
quarter of 1999 and $0.67 for the year to date, compared with $0.73 for the
first half of the previous year. Tangible EPS diluted including the effects of
the unusual items were $0.07 for the quarter and $0.27 for the first half of
2000.
The Tangible ROAA excluding the unusual items was 1.22% for the second
quarter and 1.18% for the year to date, compared with 1.36% and 1.34% for the
prior year periods, respectively. Tangible ROAA including the unusual items was
0.21% and 0.46% for the quarter and year to date, respectively.
Tangible ROAE excluding the unusual items was 23.66% for the quarter
and 22.49% for the six months, compared with 24.94%, and 24.68%, respectively,
for the prior year periods. Tangible ROAE including the unusual items was 4.06%
for the three months and 8.78% for the year to date.
Net Interest Income
First Security's net interest income on a fully taxable equivalent
(FTE) basis was $203.9 million for the second quarter of 2000, compared with
$188.8 million for the 1999 second quarter. For the year to date, net interest
income on a fully taxable equivalent (FTE) basis was
<PAGE>
$404.4 million, compared with $373.2 million for the same six months in 1999.
Continuing strong loan demand and the use of asset/liability management
strategies has resulted in modest growth in net interest income despite the
rising interest rate environment and the reduction of the investment portfolio
over the past 10 months. First Security, like most financial institutions, is
taking actions to address margin compression in this rising interest rate
environment in which rates on deposits and short-term borrowings typically
change more quickly than rates on loans and investments.
First Security's net interest margin was 3.89% for the second quarter
of 2000, essentially identical to 3.90% for the year-ago quarter. For the year
to date, First Security's net interest margin was 3.92%, compared with 3.90% for
the year-ago period. As noted above, First Security is experiencing pressure on
its net interest margin, but is rigorously employing asset/liability management
strategies to mitigate interest rate risk.
Noninterest Income
For the second quarter of 2000, First Security's noninterest income
excluding unusual items was $106.3 million, compared with $146.2 million for the
1999 quarter. For the year to date, First Security's noninterest income
excluding unusual items was $231.7 million, compared with $270.4 million for the
first half of 1999. First Security's noninterest income including the unusual
items was $36.6 million, and for the year to date, $162.0 million. The decrease
excluding unusual items is indicative of slower loan origination rates in the
mortgage banking business, strategic decreases in trading account activities to
reduce market risks (First Security ceased its trading activities for its own
account), and decreased securities gains, offset by growth in commissions and
fees from securities and insurance transactions; collections, commissions, and
fees.
Noninterest Expenses
Excluding the unusual expenses discussed above, First Security's
noninterest expenses were $207.9 million, compared with $217.4 million for the
1999 second quarter. For the year to date, noninterest expenses were $422.1
million, compared with $409.8 million for the same 1999 period. Including $36.0
million in the first quarter and $19.5 million in the second quarter of 2000 of
unusual expenses, noninterest expenses were $227.4 million for the second
quarter of 2000 and $477.6 million for the year to date. The year-over-year
changes incorporate reductions in salary and benefit expense due to lower
staffing levels, decreased stationery and supplies, postage, professional
services, and telephone costs, offset in part by higher marketing, occupancy and
equipment, computer service, and fee expenses.
First Security's operating expense ratio (the ratio of noninterest
expenses to the sum of net interest income FTE and noninterest income)
calculated excluding the unusual items was 67.00% for the second quarter of
2000, compared with 64.89% for the year-ago quarter. For the year to date, First
Security's operating expense ratio calculated excluding the unusual items was
66.36%, compared with 63.67% for the year-ago period. Including the effect of
the unusual items, First Security's operating expense ratio was 94.53% for the
second quarter of 2000 and 84.32% for the year to date.
CrossLand Mortgage Corp., First Security's mortgage banking subsidiary,
and First Security Van Kasper, First Security's full-service investment banking
and brokerage subsidiary, have higher inherent operating expense ratios than
First Security's bank subsidiaries. Excluding CrossLand Mortgage, FS Van Kasper,
and the unusual items, First Security's operating expense ratio was 55.87% for
the second quarter of 2000, compared with 60.13% for the year-ago quarter. Year
to date, this adjusted operating expense ratio was 56.31%, compared with 59.31%
for 1999.
Assets, Interest-Earning Assets and Asset Quality
First Security's total assets were $22.5 billion at June 30, 2000,
compared with $23.0 billion at year-end 1999 and $22.1 billion one year ago.
Loans, net of unearned income but before the reserve for loan losses, were $14.1
billion at quarter end, compared with $14.6 billion at year end 1999 and $13.3
billion one year ago, in spite of $2.0 billion in vehicle loan securitizations
and sales during the second quarter of 2000 and ongoing mortgage loan sales
during the year. Available for sale securities were $5.3 billion at quarter end,
compared with $5.5 billion at year end and $5.9 billion one year ago, reflecting
merger-related strategic
<PAGE>
decisions to reduce First Security's position in these assets.
First Security's asset quality remained strong in 2000. The ratio of
nonperforming assets to total loans and other real estate was 0.57% at June 30,
2000, compared with 0.46% at year-end 1999 and 0.42% one year ago. Nonperforming
assets were $80.2 million at quarter end, compared with $67.3 million at year
end and $55.7 million one year ago, with the changes due primarily to one large
loan secured by timberland, increases in mortgage term loans, and several
smaller secured loans.
First Security's reserve for loan losses was $174.4 million at June 30,
2000, unchanged from year-end 1999 and one year ago. Based on its analysis of
reserve adequacy, First Security considered its reserve for loan losses at
quarter end to be adequate to absorb estimated loan losses in the current loan
portfolio. The ratio of the reserve to total loans was 1.23% at quarter end,
compared with 1.20% at year end and 1.31% one year ago. First Security's
coverage ratio of the reserve to nonaccruing loans was 248.31% at quarter end,
compared with 294.57% at year end and 346.10% one year ago.
Net loans charged off against the reserve and provision for loan losses
were $15.8 million for the second quarter of 2000, compared with $10.6 million
for the year-ago quarter. On a year-to-date basis, net loans charged off against
the reserve and provision for loan losses were $36.3 million, compared with
$27.5 million for the year-ago period. The annualized ratio of net loans charged
off to average loans was 0.20% and 0.48% for the second quarter and first half
of 2000, respectively, compared with 0.54% for the year-ago quarter and 0.49%
for all of 1999. First Security believes that it has properly addressed the
previously announced moderate increase in consumer loan losses.
Stockholders' Equity and Common Stock
First Security's total stockholders' equity was $1.7 billion at June
30, 2000, essentially unchanged from year-end 1999 and one year ago. Despite the
unusual items incurred in the first and second quarters of 2000 and a decrease
in accumulated other comprehensive income, which consists of unrealized net
gains and losses in the fair value of Available for sale securities, First
Security's earnings and new First Security common stock shares issued for
acquisitions resulted
<PAGE>
in flat capital levels. First Security's ratio of stockholders' equity to total
assets was 7.74% at quarter end, compared with 7.70% at year end and 7.84% one
year ago. The ratio of tangible common equity to tangible assets, which excludes
goodwill and deposit intangibles from the ratio calculations, was 6.28% at
quarter end, compared with 6.21% at year end and 6.23% one year ago, reflecting
balance sheet growth and various mergers.
National and Regional Economy
The second-quarter economic landscape and financial markets' activity
were significantly influenced by a tighter Federal Reserve monetary policy.
Short-term interest rates, which affect funding costs, were pushed higher with
the intent of moderating consumer and business demand, thereby avoiding renewed
inflationary forces throughout the economy. Long-term interest rates, which
affect our lending rates, did not move up consistently like short-term rates.
The jump in gasoline prices--primarily reflecting supply constraints by energy
producers--hopefully will not spread into other sectors of the economy.
By midyear, it was clear that the national pace of economic growth had
slowed. Reduced gains in consumer spending and new job creation suggested that
perhaps central bank monetary policy could remain on hold in the third quarter.
Curbing economic growth to avoid inflation without generating pockets of
noticeable economic weakness is not simple. Hopefully, the central bank will be
successful in this endeavor.
Business
First Security Corporation is the West's second largest independent
bank holding company, and is the nation's oldest multistate bank holding
company, having been incorporated on June 15, 1928. During the second quarter of
2000, First Security became a Financial Holding Company under the
Gramm-Leach-Bliley Act of 1999. This change enables First Security greater
opportunities to affiliate with companies that are "financial" in nature rather
than just those "related to banking" as required under the previous regulations.
At June 30, 2000, First Security's banks operated 336 full service
domestic bank offices in Utah, Idaho, Oregon, Wyoming, New Mexico, Nevada, and
California. Nonbank subsidiaries
<PAGE>
include a residential mortgage loan company, a leasing company, an insurance
subsidiary, an investment management company, a full-service retail securities
broker/dealer/investment banking company, 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 First Security'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. First Security cautions
readers not to place undue reliance on any forward-looking statements, which
speak only as of the date made.
First Security advises readers that various risks and uncertainties
could affect First Security's financial performance and could cause First
Security'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 First Security 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 First Security's operations and personnel.
With respect to the announced merger with Wells Fargo, risks and
uncertainties in connection with First Security's merger into Wells Fargo
include, but are not limited to:
* conditions precedent to the close of the merger agreement may not be
satisfied;
* combining the business of First Security and Wells Fargo may cost more than
expected;
* the timing of the completion of the merger and new operations may be delayed
or prohibited;
<PAGE>
* there may be increases in competitive pressures among financial institutions;
* general economic conditions, either nationally or locally in areas in which
First Security conducts its operations, or conditions in securities markets may
be less favorable than currently anticipated;
* combining the businesses of First Security and Wells Fargo may require
divestiture of branches, deposits or loans as a result of the merger in an
amount greater than expected;
* legislation or regulatory changes may adversely affect the ability of the
combined company to conduct, or the accounting for, business combinations and
new operations;
* integrating the business of First Security and Wells Fargo and retaining key
personnel may be more difficult than expected;
* the combined company may lose more business or customers after the merger than
expected.
First Security 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>
FIRST SECURITY CORPORATION
SUMMARY FINANCIAL HIGHLIGHTS
($ in thousands, except per share data and ratios; unaudited) (A)
2nd Qtr 2nd Qtr
2000 1999 %Chg
SELECTED DATA EXCLUDING MAJOR UNUSUAL ITEMS (B):
Earnings per common share diluted 0.28 0.35 (19.1)
Tangible EPS diluted (C) 0.35 0.37 (5.0)
Noninterest income 106,315 146,235 (27.3)
Noninterest expenses 207,858 217,363 (4.4)
Net income 56,489 68,843 (17.9)
Return on average assets (ROAA) 0.96 1.26
Tangible ROAA (C) 1.22 1.36
Return on average stockholders' equity (ROAE) 13.01 16.52
Tangible ROAE (C) 23.66 24.94
Operating expense ratio 67.00 64.89
COMMON & PREFERRED STOCK DATA:
Earnings per common share diluted (0.01) 0.35 (102.9)
Tangible EPS diluted (C) 0.06 0.37 (83.7)
Dividends paid per common share 0.14 0.14 0.0
Book value per common share [EOP] 8.84 8.90 (0.7)
Market price (bid) [EOP] 13.563 27.188 (50.1)
Market price: high bid for the period 16.250 27.188 (40.2)
Market price: low bid for the period 11.938 17.875 (33.2)
Market capitalization (mktprice x #shrs) [EOP] 2,673,566 5,303,971 (49.6)
Market price / book value per com share [EOP] % 153.43 305.48
Dividend payout ratio (DPS / EPS basic) % NM 38.89
Dividend yield (DPS / mktprice) [EOP] % 4.13 2.06
Price / earnings ratio(mktprice/4qtrsEPSbasic) 15.2x 19.4x
Common shares basic [EOP] 197,122 195,085 1.0
Common shares diluted [Avg] 199,558 196,402 1.6
INCOME STATEMENT:
Net interest income 201,735 186,142 8.4
Net interest income, FTE 203,901 188,753 8.0
Provision for loan losses 15,804 10,596 49.2
Noninterest income 36,621 146,235 (75.0)
Noninterest expenses 227,358 217,363 4.6
Net income (1,599) 68,843 (102.3)
BALANCE SHEET - END OF PERIOD:
Available for sale (AFS) securities 5,308,882 5,923,169 (10.4)
Loans, net of unearned income 14,147,717 13,309,843 6.3
Reserve for loan losses (174,443) (174,443) 0.0
Loan servicing rights 181,994 197,476 (7.8)
Goodwill and other intangible assets 349,328 380,557 (8.2)
Total assets 22,509,064 22,134,994 1.7
Total deposits 13,236,091 12,982,950 1.9
Total stockholders' equity 1,742,421 1,736,062 0.4
PROBLEM ASSETS & POTENTIAL PROBLEM ASSETS - END OF PERIOD:
Total nonaccruing loans 70,251 50,402 39.4
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Other real estate 9,955 5,301 87.8
Total nonperforming assets 80,206 55,703 44.0
Accruing loans past due 90 days or more 27,080 23,567 14.9
Total problem assets 107,286 79,270 35.3
RECONCILIATION OF THE RESERVE FOR LOAN LOSSES:
Reserve for loan losses, beginning 174,443 173,350 0.6
Total loans charged off (23,276) (27,556) (15.5)
Total recoveries of loans charged off 7,472 9,630 (22.4)
Net loans (charged off) recovered (15,804) (17,926) (11.8)
Provision for loan losses 15,804 10,596 49.2
Acquisitions 0 8,423 (100.0)
Reserve for loan losses, ending 174,443 174,443 0.0
BALANCE SHEET - AVERAGE:
Available for sale (AFS) securities 5,235,878 5,862,259 (10.7)
Loans, net of unearned income 15,561,687 13,307,887 16.9
Reserve for loan losses (174,443) (174,686) (0.1)
Loan servicing rights 196,241 178,010 10.2
Goodwill and other intangible assets 357,310 319,904 11.7
Total assets 23,634,093 21,972,307 7.6
Total deposits 13,467,539 12,595,806 6.9
Total stockholders' equity 1,745,717 1,671,531 4.4
SELECTED RATIOS (%):
Return on average assets (ROAA) (0.01) 1.26
Tangible ROAA (C) 0.21 1.36
Return on average stockholders' equity (ROAE) (0.18) 16.52
Tangible ROAE (C) 4.06 24.94
Net interest margin, FTE 3.89 3.90
Net interest spread, FTE 3.44 3.39
Noninterest income/total revenue 15.36 44.00
Net interest margin, FTE 3.89 3.90
Noninterest income/total revenue 15.36 44.00
Operating expense ratio 94.53 64.89
Stockholders' equity/assets [EOP] 7.74 7.84
Stockholders' equity/assets [Avg] 7.39 7.61
Tangible common equity/tangible assets [EOP](C) 6.28 6.23
Loans/deposits [EOP] 106.89 102.52
Loans/assets [EOP] 62.85 60.13
Reserve for loan losses [EOP]/:
Total loans 1.23 1.31
Nonaccruing loans 248.31 346.10
Nonperforming assets/total loans+other real estate 0.57 0.42
Net loans charged off/average loans 0.20 0.54
NOTES:
EOP: End Of Period. Avg: Average. EPS: Earnings Per Common Share.
DPS: Dividends Per Common Share.
(A) Certain reclassifications of 1999 amounts have been made to conform to
2000 classifications.
(B) Major unusual items totaling $89.2 million before tax, $58.1 million after
tax for the quarter
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Major unusual items totaling $125.2 million before tax, $81.5 million after
tax for the year to date
(C) Tangible ratios are calculated excluding the effect of goodwill and
deposit intangibles, net of taxes
<PAGE>
FIRST SECURITY CORPORATION
SUMMARY FINANCIAL HIGHLIGHTS
($ in thousands, except per share data and ratios; unaudited) (A)
Year-To-Date Six Months
2000 1999 %Chg
SELECTED DATA EXCLUDING MAJOR UNUSUAL ITEMS (B):
Earnings per common share diluted 0.57 0.69 (16.7)
Tangible EPS diluted (C) 0.67 0.73 (7.8)
Noninterest income 231,733 270,401 (14.3)
Noninterest expenses 422,108 409,778 3.0
Net income 114,903 133,721 (14.1)
Return on average assets (ROAA) 0.99 1.24
Tangible ROAA (C) 1.18 1.34
Return on average stockholders' equity (ROAE) 13.19 16.49
Tangible ROAE (C) 22.49 24.68
Operating expense ratio 66.36 63.67
COMMON & PREFERRED STOCK DATA:
Earnings per common share diluted 0.17 0.69 (75.4)
Tangible EPS diluted (C) 0.26 0.73 (64.0)
Dividends paid per common share 0.28 0.28 0.0
Book value per common share [EOP] 8.84 8.90 (0.7)
Market price (bid) [EOP] 13.563 27.188 (50.1)
Market price: high bid for the period 26.063 27.188 (4.1)
Market price: low bid for the period 11.063 17.563 (37.0)
Market capitalization (mktprice x #shrs)[EOP] 2,673,566 5,303,971 (49.6)
Market price / book value per com share [EOP] % 153.43 305.48
Dividend payout ratio (DPS / EPS basic) % 164.71 40.00
Dividend yield (DPS / mktprice) [EOP] % 4.13 2.06
Price / earnings ratio(mktprice/4qtrsEPSbasic) 15.2x 19.4x
Common shares basic [EOP] 197,122 195,085 1.0
Common shares diluted [Avg] 199,875 194,911 2.5
INCOME STATEMENT:
Net interest income 399,921 367,917 8.7
Net interest income, FTE 404,399 373,188 8.4
Provision for loan losses 36,349 27,473 32.3
Noninterest income 162,039 270,401 (40.1)
Noninterest expenses 477,643 409,778 16.6
Net income 33,392 133,721 (75.0)
BALANCE SHEET - END OF PERIOD:
Available for sale (AFS) securities 5,308,882 5,923,169 (10.4)
Loans, net of unearned income 14,147,717 13,309,843 6.3
Reserve for loan losses (174,443) (174,443) 0.0
Loan servicing rights 181,994 197,476 (7.8)
Goodwill and other intangible assets 349,328 380,557 (8.2)
Total assets 22,509,064 22,134,994 1.7
Total deposits 13,236,091 12,982,950 1.9
Total stockholders' equity 1,742,421 1,736,062 0.4
PROBLEM ASSETS & POTENTIAL PROBLEM ASSETS - END OF PERIOD:
Total nonaccruing loans 70,251 50,402 39.4
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Other real estate 9,955 5,301 87.8
Total nonperforming assets 80,206 55,703 44.0
Accruing loans past due 90 days or more 27,080 23,567 14.9
Total problem assets 107,286 79,270 35.3
RECONCILIATION OF THE RESERVE FOR LOAN LOSSES:
Reserve for loan losses, beginning 174,443 173,350 0.6
Total loans charged off (53,678) (55,929) (4.0)
Total recoveries of loans charged off 17,329 21,126 (18.0)
Net loans (charged off) recovered (36,349) (34,803) 4.4
Provision for loan losses 36,349 27,473 32.3
Acquisitions 0 8,423 (100.0)
Reserve for loan losses, ending 174,443 174,443 0.0
BALANCE SHEET - AVERAGE:
Available for sale (AFS) securities 5,309,601 5,455,351 (2.7)
Loans, net of unearned income 15,114,705 13,490,766 12.0
Reserve for loan losses (174,443) (174,621) (0.1)
Loan servicing rights 196,254 178,470 10.0
Goodwill and other intangible assets 359,817 291,767 23.3
Total assets 23,356,747 21,705,403 7.6
Total deposits 13,356,127 12,484,123 7.0
Total stockholders' equity 1,751,707 1,626,079 7.7
SELECTED RATIOS (%):
Return on average assets (ROAA) 0.29 1.24
Tangible ROAA (C) 0.46 1.34
Return on average stockholders' equity (ROAE) 3.83 16.49
Tangible ROAE (C) 8.78 24.68
Net interest margin, FTE 3.92 3.90
Net interest spread, FTE 3.48 3.38
Noninterest income/total revenue 28.83 42.36
Net interest margin, FTE 3.92 3.90
Noninterest income/total revenue 28.83 42.36
Operating expense ratio 84.32 63.67
Stockholders' equity/assets [EOP] 7.74 7.84
Stockholders' equity/assets [Avg] 7.50 7.49
Tangible common equity/tangible assets [EOP] (C) 6.28 6.23
Loans/deposits [EOP] 106.89 102.52
Loans/assets [EOP] 62.85 60.13
Reserve for loan losses [EOP]/:
Total loans 1.23 1.31
Nonaccruing loans 248.31 346.10
Nonperforming assets/total loans+other real estate 0.57 0.42
Net loans charged off/average loans 0.48 0.52
NOTES:
EOP: End Of Period. Avg: Average. EPS: Earnings Per Common Share.
DPS: Dividends Per Common Share.
(A) Certain reclassifications of 1999 amounts have been made to conform to
2000 classifications.
(B) Major unusual items totaling $89.2 million before tax, $58.1 million after
tax for the quarter
<PAGE>
Major unusual items totaling $125.2 million before tax, $81.5 million after
tax for the year to date
(C) Tangible ratios are calculated excluding the effect of goodwill and
deposit intangibles, net of taxes
