<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED
SEPTEMBER 30, 1996
COMMISSION FILE NUMBER 0-10161
FIRSTMERIT CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
OHIO 34-1339938
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) NUMBER)
III CASCADE PLAZA, 7TH FLOOR, AKRON, OHIO 44308
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(330) 996-6300
(TELEPHONE NUMBER)
OUTSTANDING SHARES OF COMMON STOCK,
AS OF SEPTEMBER 30, 1996
32,085,428
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
<PAGE> 2
FIRSTMERIT CORPORATION
PART I - FINANCIAL STATEMENTS
ITEM 1. FINANCIAL STATEMENTS
- - - -----------------------------
The following statements included in the quarterly unaudited report to
shareholders are incorporated by reference:
Consolidated Balance Sheets as of September 30, 1996, December 31,
1995 and September 30, 1995
Consolidated Statements of Income for the three-month and nine-month
periods ended September 30, 1996 and 1995
Consolidated Statements of Changes in Shareholders' Equity for the
year ended December 31, 1995 and for the nine months ended September
30, 1996
Consolidated Statements of Cash Flows for the nine months ended
September 30, 1996 and 1995
Notes to Consolidated Financial Statements as of September 30, 1996,
December 31, 1995, and September 30, 1995
Management's Discussion and Analysis of Financial Conditions as of
September 30, 1996, December 31, 1995 and September 30, 1995 and
Results of Operations for the quarter and nine months ended September
30, 1996 and 1995 and for the year ended December 31, 1995.
<PAGE> 3
FIRSTMERIT CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
- - - ---------------------------------------
<TABLE>
<CAPTION>
(In thousands)
---------------------------------------------------------
September 30, December 31, September 30,
---------------------------------------------------------
1996 1995 1995
- - - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investment securities $ 1,284,216 1,403,059 1,339,087
Federal funds sold 4,309 12,575 9,516
Loans less unearned income 3,872,175 3,770,366 3,883,579
Less allowance for possible loan losses 46,607 46,840 38,673
----------------------------------------------------------
Net loans 3,825,568 3,723,526 3,844,906
----------------------------------------------------------
Total earning assets 5,114,093 5,139,160 5,193,509
Cash and due from banks 242,794 287,671 240,879
Premises and equipment, net 104,725 94,158 92,689
Accrued interest receivable and other assets 88,161 75,532 93,676
----------------------------------------------------------
$ 5,549,773 5,596,521 5,620,753
==========================================================
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand-non-interest bearing $ 752,082 810,948 729,192
Demand-interest bearing 446,941 432,409 412,332
Savings 1,367,527 1,454,876 1,475,968
Certificates and other time deposits 1,797,767 1,803,692 1,809,685
----------------------------------------------------------
Total deposits 4,364,317 4,501,925 4,427,177
Securities sold under agreements to repurchase
and other borrowings 588,729 486,958 590,420
----------------------------------------------------------
Total funds 4,953,046 4,988,883 5,017,597
Accrued taxes, expenses, and other liabilities 77,042 64,757 59,468
----------------------------------------------------------
Total liabilities 5,030,088 5,053,640 5,077,065
Shareholders' equity:
Series preferred stock, without par value:
authorized and unissued 7,000,000 shares - - -
Common stock, without par value:
authorized 80,000,000 shares; issued 33,706,020
33,614,487 and 33,604,474 shares, respectively 105,324 103,861 103,640
Treasury stock, 1,620,592, 122,870 and 38,610 shares,
respectively (44,919) (2,963) (781)
Net unrealized holding gains (losses)
on available for sale securities (9,380) (1,292) (6,798)
Retained earnings 468,660 443,275 447,627
----------------------------------------------------------
Total shareholders' equity 519,685 542,881 543,688
----------------------------------------------------------
$ 5,549,773 5,596,521 5,620,753
==========================================================
</TABLE>
<PAGE> 4
FIRSTMERIT CORPORATION AND SUBSIDIARIES
AVERAGE CONSOLIDATED BALANCE SHEETS
- - - ---------------------------------------
(In thousands except ratios)
<TABLE>
<CAPTION>
Quarters
----------------------------------------------------------------------------
1996 1995
----------------------------------------------------------------------------
3rd 2nd 1st 4th 3rd
- - - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Investment securities $ 1,279,273 1,313,661 1,378,465 1,355,618 1,394,350
Federal funds sold 7,844 13,735 18,994 50,560 17,927
Loans less unearned income 3,858,654 3,829,106 3,772,550 3,814,172 3,864,206
Less allowance for possible
loan losses 47,476 48,151 47,428 39,199 38,228
--------------------------------------------------- ------------- -------------
Net loans 3,811,178 3,780,955 3,725,122 3,774,973 3,825,978
--------------------------------------------------- ------------- -------------
Total earning assets 5,098,295 5,108,351 5,122,581 5,181,151 5,238,255
Cash and due from banks 202,548 217,967 232,183 221,632 216,342
Premises and equipment, net 104,442 101,933 95,837 93,640 90,999
Accrued interest receivable
and other assets 83,146 78,603 68,467 82,342 88,309
--------------------------------------------------- ------------- -------------
$ 5,488,431 5,506,854 5,519,068 5,578,765 5,633,905
=================================================== ============= =============
LIABILITIES
Deposits:
Demand-non-interest bearing $ 747,318 768,507 737,626 755,008 725,235
Demand-interest bearing 448,771 453,118 434,377 421,000 415,810
Savings 1,388,472 1,423,458 1,432,303 1,462,460 1,485,227
Certificates and other time
deposits 1,759,320 1,746,516 1,800,514 1,802,822 1,811,975
--------------------------------------------------- ------------- -------------
Total deposits 4,343,881 4,391,599 4,404,820 4,441,290 4,438,247
Securities sold under agreements to
repurchase and other borrowings 553,743 520,575 500,221 522,680 588,133
--------------------------------------------------- ------------- -------------
Total funds 4,897,624 4,912,174 4,905,041 4,963,970 5,026,380
Accrued taxes, expenses and
other liabilities 65,973 65,567 76,894 74,314 70,054
--------------------------------------------------- ------------- -------------
Total liabilities 4,963,597 4,977,741 4,981,935 5,038,284 5,096,434
SHAREHOLDERS' EQUITY 524,834 529,113 537,133 540,481 537,471
--------------------------------------------------- ------------- -------------
$ 5,488,431 5,506,854 5,519,068 5,578,765 5,633,905
=================================================== ============= =============
RATIOS
Net income as a percentage of:
Average assets 0.97% 1.40% 1.40% 0.23% 1.17%
Average shareholders' equity 10.19% 14.61% 14.42% 2.34% 12.29%
</TABLE>
<PAGE> 5
FIRST MERIT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
- - - ----------------------------------------
<TABLE>
<CAPTION>
(In thousands except per share data)
-----------------------------------------------------------
Quarters Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
- - - ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest income:
Interest and fees on loans $ 84,463 83,102 247,761 243,329
Interest and dividends on securities:
Taxable 18,453 19,808 57,010 63,456
Exempt from Federal income taxes 1,297 1,596 3,962 4,882
Interest on Federal funds sold 149 295 641 793
--------------------------- --------------------------
Total interest income 104,362 104,801 309,374 312,460
--------------------------- --------------------------
Interest expense:
Interest on deposits:
Demand-interest bearing 1,956 2,194 5,933 6,957
Savings 8,030 9,294 24,592 29,557
Certificates and other time deposits 23,599 25,653 71,541 72,154
Interest on securities sold under agreements
to repurchase and other borrowings 6,849 8,375 19,485 28,291
--------------------------- --------------------------
Total interest expense 40,434 45,516 121,551 136,959
--------------------------- --------------------------
Net interest income 63,928 59,285 187,823 175,501
Provision for possible loan losses 3,485 2,820 9,612 8,118
--------------------------- --------------------------
Net interest income after provision
for possible loan losses 60,443 56,465 178,211 167,383
--------------------------- --------------------------
Other income:
Trust department income 2,875 2,597 9,066 7,915
Service charges on depositors' accounts 6,275 5,044 17,750 15,188
Credit card fees 3,011 2,412 8,498 6,871
Securities gains 24 126 236 566
Other operating income 5,633 7,873 19,585 22,278
--------------------------- --------------------------
Total other income 17,818 18,052 55,135 52,818
--------------------------- --------------------------
78,261 74,517 233,346 220,201
--------------------------- --------------------------
Other expenses:
Salaries, wages, pension and employee benefits 22,869 23,978 70,802 77,969
Net occupancy expense 4,387 4,318 13,009 12,438
Equipment expense 3,066 3,135 9,313 9,522
Other operating expense 28,104 18,170 62,891 58,230
--------------------------- --------------------------
Total other expenses 58,426 49,601 156,015 158,159
--------------------------- --------------------------
Income before Federal income taxes 19,835 24,916 77,331 62,042
Federal income taxes 6,388 8,267 25,410 33,913
--------------------------- --------------------------
Net income $ 13,447 16,649 51,921 28,129
=========================== ==========================
Per share data based on average number of
shares outstanding:
Net income $ 0.42 0.50 1.59 0.84
=========================== ==========================
Dividends paid $ 0.27 0.25 0.81 0.75
Weighted average number of shares
outstanding 32,365,409 33,563,711 32,807,050 33,447,352
</TABLE>
<PAGE> 6
FIRST MERIT CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
- - - ---------------------------------------------------------
Year Ended December 31, 1995 and
Nine Months Ended September 30, 1996
<TABLE>
<CAPTION>
(In Thousands)
---------------------------------------------------------------------------
Net unrealized
holding gains
(losses) on Total
Common Treasury available for Retained Shareholders'
Stock Stock sale securities Earnings Equity
--------- --------- ---------------- ---------- -------------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1994 $100,576 (694) (23,205) 446,642 523,319
Net Income -- -- -- 31,318 31,318
Cash dividends ($1.02 per share) -- -- -- (35,299) (35,299)
Stock options exercised 3,285 -- -- -- 3,285
Treasury shares purchased -- (2,269) -- -- (2,269)
Market adjustment investment securities -- -- 21,913 -- 21,913
Acquisition adjustment of fiscal year -- -- -- 614 614
--------- --------- ---------------- ---------- -------------
Balance at December 31, 1995 103,861 (2,963) (1,292) 443,275 542,881
Net Income -- -- -- 51,921 51,921
Cash dividends ($0.81 per share) -- -- -- (26,536) (26,536)
Stock options exercised 1,463 -- -- -- 1,463
Treasury shares purchased -- (41,956) -- -- (41,956)
Market adjustment investment securities -- -- (8,088) -- (8,088)
--------- --------- ---------------- ---------- -------------
Balance at September 30, 1996 $105,324 (44,919) (9,380) 468,660 519,685
========= ========= ================ ========== =============
</TABLE>
<PAGE> 7
FIRSTMERIT CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1996 and 1995
(in thousands)
<TABLE>
-------------------------
1996 1995
-------------------------
<S> <C> <C>
Operating Activities
- - - ----------------------
Net Income $51,921 28,129
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for loan losses 9,612 8,118
Provision for depreciation and amortization 7,198 6,883
Amortization of investment securities premiums, net 2,566 2,106
Amortization of income for lease financing (9,565) (5,036)
Gains on sales of investment securities, net (236) (566)
Deferred federal income taxes 7,543 8,421
Increase in interest receivable (3,054) (37,940)
Decrease in interest payable (1,290) (10,339)
Amortization of values ascribed to acquired intangibles 2,409 2,459
Other increases (decreases) (1,598) 75,203
------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 65,506 77,438
------------------------
Investing Activities
- - - ----------------------
Dispositions of investment securities:
Available-for-sale-sales 42,654 96,627
Held-to-maturity-maturities - 373,069
Available-for-sale-maturities 223,926 103,089
Purchases of investment securities held-to-maturity - (49,519)
Purchases of investment securities available-for sale (162,509) (228,448)
Net decrease in federal funds sold 8,266 4,184
Net increase in loans and leases (102,089) (195,933)
Purchases of premises and equipment (19,347) (20,079)
Sales of premises and equipment 1,582 3,730
------------------------
NET CASH PROVIDED\(USED)BY INVESTING ACTIVITIES (7,517) 86,720
------------------------
Financing Activities
- - - ----------------------
Net decreae in demand, NOW and savings deposits (131,683) (223,967)
Net increase (decrease) in time deposits (5,925) 109,687
Net increase (decrease) in securities sold under repurchase
agreements and other borrowings 101,771 (22,204)
Cash dividends (26,536) (27,758)
Purchase of treasury shares (41,956) (87)
Proceeds from exercise of stock options 1,463 2,977
------------------------
NET CASH USED BY FINANCING ACTIVITIES (102,866) (161,352)
Increase (decrease) in cash and cash equivalents (44,877) 2,806
Cash and cash equivalents at beginning of year 287,671 238,073
------------------------
Cash and cash equivalents at end of year $242,794 240,879
========================
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
- - - ----------------------------------------------------
Cash paid during the year for:
Interest, net of amounts capitalized $69,250 72,396
Income taxes 15,462 12,562
========================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE> 8
FIRSTMERIT CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1996, December 31, 1995
and September 30, 1995
1. FirstMerit Corporation ("Corporation"), is a bank holding company whose
principal assets are the common stock of its wholly owned subsidiaries, First
National Bank of Ohio, The Old Phoenix National Bank of Medina, EST National
Bank, Citizens National Bank, Peoples National Bank, Peoples Bank, N.A. and
FirstMerit Bank, N.A. In addition FirstMerit Corporation owns all of the common
stock of Citizens Investment Corporation, Citizens Savings Corporation of Stark
County, FirstMerit Community Development Corporation, and FirstMerit Credit Life
Insurance Company.
2. In May 1993, the Financial Accounting Standards Board issued Statement No.
115, "Accounting for Certain Investments in Debt and Equity Securities." The
statement requires debt and equity securities to be classified as
held-to-maturity, available-for-sale, or trading. Securities classified as
held-to-maturity are measured at amortized or historical cost, securities
available-for-sale and trading at fair value. Adjustment to fair value of the
securities available-for-sale, in the form of unrealized holding gains and
losses, is excluded from earnings and reported as a net amount in a separate
component of shareholders' equity. This statement was adopted by the Corporation
during the first quarter of 1994. Effective December 31, 1995, the Corporation
transferred all held-to-maturity investments to available-for-sale. This
one-time reclassification was permitted by the Financial Accounting Standards
Board to allow institutions to reassess the appropriateness of their
designations of securities. The reclassification provides the Corporation with
more flexibility to respond, through the portfolio, to changes in market
interest rates, or to increases in loan demand or deposit withdrawals.
3. Effective December 31, 1995, the Corporation adopted Statement of Financial
Accounting Standard No. 114, "Accounting by Creditors for Impairment of a Loan,"
and Statement No. 118, an amendment of Statement No. 114, "Accounting by
Creditors for Impairment of a Loan - Income Recognition and Disclosures." These
statements prescribe how the allowance for loan losses related to impaired loans
should be determined and illustrate the required impaired loan disclosures.
Impaired loans are loans for which, based on current information or events, it
is probable that a creditor will be unable to collect all amounts due according
to the contractual terms of the loan agreement. Impaired loans must be valued
based on the present value of the loans' expected future cash flows at the
loans' effective interest rates, at the loans' observable market prices, or the
fair value of the underlying collateral. Under the Corporation's credit policies
and practices, and in conjunction with provisions within Statements No. 114 and
No. 118, all nonaccrual and restructured commercial, agricultural, construction,
and commercial real estate loans, meet the definition of impaired loans.
4. Management believes that the interim consolidated financial statements
reflect all adjustments consisting only of normal recurring accruals, necessary
for fair presentation of the September 30, 1996 statement of condition and the
results of operations for the quarter and nine months ended September 30, 1996
and 1995.
<PAGE> 9
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
Average Consolidated Balance Sheet, Fully-tax Equivalent Interest Rates and
Interest Differential
(Dollars in thousands)
<TABLE>
<CAPTION>
Quarter ended September 30, Year ended December 31, Quarter ended September 30,
---------------------------- -------------------------- --------------------------
1996 1995 1995
---------------------------- -------------------------- --------------------------
Average Average Average Average Average Average
Balance Interest Rate Balance Interest Rate Balance Interest Rate
- - - --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investment securities $1,279,273 20,344 6.33% 1,447,024 92,205 6.37% 1,394,350 22,162 6.31%
Federal funds sold 7,844 149 7.56% 22,011 1,681 7.64% 17,927 295 6.53%
Loans, net of unearned income 3,858,654 84,625 8.72% 3,818,486 326,581 8.55% 3,864,206 83,297 8.55%
Less allowance for possible loan losses 47,476 37,923 38,228
---------- ------- --------- ------- --------- -------
Net loans 3,811,178 84,625 8.83% 3,780,563 326,581 8.64% 3,825,978 83,297 8.64%
Cash and due from banks 202,548 -- -- 220,787 -- -- 216,342 -- --
Other assets 187,588 -- -- 184,426 -- -- 179,308 -- --
---------- ------- --------- ------- --------- -------
Total assets $5,488,431 105,118 -- 5,654,811 420,467 -- 5,633,905 105,754 --
========== ======= ========= ======= ========= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand-
non-interest bearing $ 747,318 -- -- 725,287 -- -- 725,235 -- --
Demand-
interest bearing 448,771 1,956 1.73% 426,608 9,202 2.16% 415,810 2,194 2.09%
Savings 1,388,472 8,030 2.30% 1,514,374 38,438 2.54% 1,485,227 9,294 2.48%
Certificates and other time deposits 1,759,320 23,599 5.34% 1,782,817 97,518 5.47% 1,811,975 25,653 5.62%
---------- ------- --------- ------- --------- -------
Total deposits 4,343,881 33,585 3.08% 4,449,086 145,158 3.26% 4,438,247 37,141 3.32%
Federal funds purchased, securities sold
under agreements to repurchase and 553,743 6,849 4.92% 609,247 35,775 5.87% 588,133 8,375 5.65%
other borrowings
Other liabilities 65,973 -- 68,440 -- 70,054 --
Shareholders' equity 524,834 -- 528,038 -- 537,471 --
---------- ------- --------- ------- --------- -------
Total liabilities and shareholders' equity $5,488,431 40,434 -- 5,654,811 180,933 -- 5,633,905 45,516 --
========== ======= ========= ======= ==== ========= ======= ====
Total earning assets $5,098,295 105,118 8.20% 5,249,598 420,467 8.01% 5,238,255 105,754 8.01%
========== ======= ========= ======= ==== ========= =======
Total interest bearing liabilities $4,150,306 40,434 3.88% 4,333,046 180,933 4.18% 4,301,145 45,516 4.20%
========== ======= ========= ======= ==== ========= =======
Net yield on earning assets 64,684 5.05% 239,534 4.56% 60,238 4.56%
======= ==== ======= ==== ======= ====
Interest rate spread 4.33% 3.83% 3.81%
==== ==== ====
<FN>
*Interest income on tax-exempt securities and loans have been adjusted to a fully taxable equivalent basis.
*Non-accrual loans have been included in the average balances.
</TABLE>
<PAGE> 10
RESULTS OF OPERATIONS
FirstMerit Corporation's net income for the quarter ended September 30,
1996 was $13,447,000 compared to $16,649,000 for the same quarter one year ago.
Included in the 1996 third quarter results was a one-time after-tax charge of
$6,652,000 related to the recapitalization of the Savings Association Insurance
Fund ("SAIF"). Excluding the SAIF assessment, the Corporation had record
quarterly earnings of $20,099,000. For the third quarter of 1996, return on
average equity was 15.24%, while return on average assets was 1.46%, excluding
the SAIF assessment. The same profitability ratios for the third quarter last
year were 12.29% and 1.17%, respectively.
For the nine-month period ended September 30, 1996, net income was
$51,921,000, or $58,573,000 without the SAIF charge, compared to $28,129,000 a
year ago. Last year's nine-month earnings were impacted by an early retirement
charge of $2,198,000 and an expense of $16,200,000 associated with the
acquisition of The CIVISTA Corporation ("CIVISTA"). Return on average equity for
the nine months ended September 30,1996 was 14.77%, and return on average assets
was 1.42%, excluding the one-time SAIF assessment. The comparable ratios for the
same period last year were 7.15% and 0.66%, respectively.
Fully taxable equivalent ("FTE") net interest income for the third
quarter was $64,684,000, a 7.4% increase over the same quarter last year. FTE
net interest income for the current year-to-date period was $190,135,000
compared to $178,452,000 one year ago. The improvement in net interest income
was due to higher net interest margins of 5.05% for the quarter and 4.97% for
the year-to-date period. These ratios compare favorably to 4.56% for the third
quarter last year and 4.52% for the nine months ended September 30, 1995.
Other expenses totaled $58,426,000 for the quarter. When the SAIF
charge is not considered, other expenses were $48,191,000, a decline of over 6%
from last year's core operating expenses of $51,401,000. For comparative
purposes, prior year core operating expenses exclude the FDIC Premium refund of
$1,800,000 received in September 1995 . For the nine-month period, other
expenses were $156,015,000, or $145,780,000 without the SAIF recapitalization
expense, compared to 1995's year-to-date total of $158,159,000. Excluding the
SAIF charge, the efficiency ratios of 57.46% for the quarter ended September 30,
1996 and 58.55% for the current year nine-month period, compared to last year's
ratios of 62.58% and 67.29%, respectively, clearly demonstrate the Corporation's
improved containment of operating expenses.
Asset quality remained strong during the third quarter. Nonperforming
assets were 0.28% of total loans and Other Real Estate compared to 0.44% at
September 30, 1995. Net charge-offs to average loans, on an annualized basis,
were 0.48% for the quarter ended September 30, 1996 and 0.15% for the same
period last year. Although the quarter's net charge-off percentage remains low
by industry standards, the increase
<PAGE> 11
can be primarily attributed to certain consumer portfolios (i.e., auto loans,
auto leases, and credit card loans). The allowance for loan losses as a
percentage of outstanding loans totaled 1.20% at September 30, 1996 compared to
1.00% one year ago.
Earnings per share for the third quarter were $0.42, or $0.62 without
the SAIF assessment, compared to $0.50 for the same quarter in 1995. For the
nine months ended September 30, 1996, earnings per share were $1.59, or $1.79
excluding the SAIF charge, versus $0.84 for the prior year-to-date period. The
components of change in per share income for the quarters and nine months ended
September 30, 1996 and 1995 are summarized in the following table:
CHANGES IN EARNINGS PER SHARE
- - - -----------------------------
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1996/1995 1996/1995
-----------------------------------------------------------
<S> <C> <C>
Net income per share September 30,
1995 $0.50 0.84
Increases (decreases) due to:
Net interest income - taxable equivalent 0.14 0.37
Provision for possible loan losses (.02) (.04)
Other income - 0.07
Other expenses (excluding SAIF charge) 0.04 0.38
One-time SAIF assessment, net of tax (.20) (.20)
Federal income taxes - taxable
equivalent (.04) 0.17
-----------------------------------------------------------
Net change in net income per share $(0.08) 0.75
-----------------------------------------------------------
Net income per share September 30, 1996 $0.42 $1.59
===========================================================
Net income per share September 30, 1996
(excluding SAIF charge) $0.62 $1.79
===========================================================
</TABLE>
<PAGE> 12
NET INTEREST INCOME
Net interest income, the Corporation's principal source of earnings, is
the difference between the interest income generated by earning assets
(primarily loans and investment securities) and the total interest paid on
interest bearing funds (primarily deposits and other borrowings). For the
purpose of this discussion, net interest income is presented on a fully-taxable
equivalent ("FTE") basis, to provide a comparison among types of interest
earning assets. That is, interest on tax-free securities and tax-exempt loans
has been restated as if such interest were taxed at the statutory Federal income
tax rate of 35%, adjusted for the non-deductible portion of interest expense
incurred to acquire the tax-free assets.
Net interest income FTE for the quarter ended September 30, 1996 was
$64,684,000 compared to $60,238,000 for the same period one year ago, an
increase of $4,446,000 or 7.4%. Even though deposits, borrowings and earning
asset outstandings all decreased during the quarter compared with the same
quarter last year, FTE net interest income rose because rates paid on customer
deposits and other borrowings fell while earning asset yields improved.
Specifically, the rate paid on interest bearing liabilities declined 32 basis
points from 4.20% during the third quarter last year to 3.88% this year.
Conversely, the yield recorded on earning assets increased 19 basis points from
8.01% in the prior year to the 1996 third quarter yield of 8.20%. In summary,
the combination of paying lower interest on deposits and borrowings and earning
a better return on invested assets had a very favorable effect on net interest
income and the net interest margin. The improvement in the earning asset yield
occurred because of an improved mix of higher yielding commercial and consumer
loans. In more detail, on the earning asset side, the largest balance decline
occurred in the investment security portfolio. The drop in investment balances,
which decreased net interest income by $1,830,000, was partially offset by
higher yields earned on loans that increased net interest income by $1,450,000.
With regard to interest bearing liabilities, the largest contributors to less
interest expense were lower rates paid on customer CDs and other borrowings
which decreased interest expense by $1,348,000 and $1,101,000, respectively.
For the nine months ended September 30, 1996, FTE net interest income
totaled $190,135,000, up 6.5% from the $178,452,000 reported during the same
period last year. Similar to the situation described for the quarterly periods,
year-to-date net interest income improved because the drop in interest expense,
caused almost equally by declining balances and lower cost of funds, outpaced
the drop in interest income caused by lower earning asset outstandings. Even
though there were fewer earning assets, the improvement in their yield offset
the decline in interest income by $3,767,000.
The following schedule illustrates in more detail the change in net
interest income FTE by rate and volume components for both interest earning
assets and interest bearing liabilities.
<PAGE> 13
CHANGES IN NET INTEREST DIFFERENTIAL -
FULLY-TAX EQUIVALENT RATE/VOLUME ANALYSIS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Quarters ended Nine Months Ended
Septmeber 30, September 30,
1996 and 1995 1996 and 1995
------------- -------------
Increase (Decrease) Increase (Decrease)
Interest Income/Expense Interest Income/Expense
Volume Yield Rate Total Volume Yield Rate Total
---------------------------------------------------------------------------
INTEREST INCOME
<S> <C> <C> <C> <C> <C> <C>
Investment Securities $(1,830) 12 (1,818) (7,330) (530) (7,860)
Loans (122) 1,450 1,328 (81) 4,378 4,297
Federal funds sold (192) 46 (146) (41) (81) (122)
---------------------------------------------------------------------------
Total interest income $(2,144) 1,508 (636) (7,452) 3,767 (3,685)
INTEREST EXPENSE
Interest on deposits:
Demand-interest bearing 144 (382) (238) 238 (1,262) (1,024)
Savings (560) (704) (1,264) (2,038) (2,927) (4,965)
Certificates and other
time deposits (706) (1,348) (2,054) (296) (317) (613)
Federal Funds Purchased,
REPOs & other borrowings (425) (1,101) (1,526) (4,301) (4,441) (8,742)
---------------------------------------------------------------------------
Total interest expense $(1,547) (3,535) (5,082) (6,397) (8,947) (15,344)
---------------------------------------------------------------------------
Net interest income $(597) 5,043 4,446 (1,055) 12,714 11,659
===========================================================================
</TABLE>
NET INTEREST MARGIN
The net interest margin, net interest income FTE divided by average
earning assets, is affected by changes in the level of earning assets, the
proportion of earning assets funded by non-interest bearing liabilities, the
interest rate spread, and changes in the corporate tax rates. A meaningful
comparison of the net interest margin requires an adjustment for the changes in
the statutory Federal income tax rate noted above. The schedule below shows the
relationship of the tax equivalent adjustment and the net interest margin.
<PAGE> 14
NET INTEREST MARGIN
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Quarters Ended NIne Months Ended
September 30, September 30,
------------------------------------------------------------------------
1996 1995 1996 1995
----------------------------------- -----------------------------------
<S> <C> <C> <C> <C>
Net interest income per
financial statements $63,928 59,285 187,823 175,501
Tax equivalent adjustment 756 953 2,312 2,951
----------------------------------- -----------------------------------
Net interest income - FTE $64,684 60,238 190,135 178,452
=================================== ===================================
Average earning assets $5,098,295 5,238,255 5,109,442 5,276,243
=================================== ===================================
Net interest margin 5.05% 4.56% 4.97% 4.52%
=================================== ===================================
</TABLE>
Average loans outstanding for the quarter ended September 30, 1996 were
$3,858,654,000 down slightly from $3,864,206,000 for the same quarter last year.
The minimal decline occurred because loan sales, securitizations, and repayments
over the last twelve months outpaced steady loan demand. Similarly, for the nine
months ended September 30, 1996, average loan outstandings totaled
$3,819,979,000 compared to $3,821,218,000 for the prior year. Average
outstanding loans for the quarter and nine-month periods equaled 75.7% and 74.8%
of average earning assets, respectively.
Average certificates and other time deposits totaled $1,759,320 for the
quarter ended September 30, 1996, down 2.9% from $1,811,975 at September 30,
1995. Overall, the ratio of each average deposit and borrowed fund category to
total interest bearing funds changed very little during the last twelve months.
Specifically, the following percentage changes in the deposit and borrowed funds
portfolios took place: average certificates and other time deposits decreased
from 36.0% of total interest bearing funds for the quarter ended September 30,
1995 to 35.9% for the 1996 third quarter; average savings deposits decreased
from 29.5% of interest bearing funds for the third quarter last year to 28.3%
for the same 1996 three-month period; average interest bearing deposits
decreased from 73.9% of interest bearing funds for the quarter ended September
30, 1995 to 73.4% for the 1996 third quarter; and other borrowings decreased
from 11.7% of total interest bearing funds for the 1995 third quarter to 11.3%
for the three months ended September 30, 1996.
During the third quarter 1996, interest bearing liabilities funded
81.4% of average earning assets compared to 82.1% one year ago. The decline in
use of interest bearing liabilities as a loan and investment security funding
source helped reduce the cost of funds thereby improving the net interest
margin.
<PAGE> 15
OTHER INCOME
Other income for the quarter ended September 30, 1996 was $17,818,000,
down slightly from $18,052,000 earned during the same period last year. The
decline was due to minimal mortgage loan sale activity during the 1996 third
quarter. For the nine-month period, other income totaled $55,135,000 compared to
$52,818,000 a year ago.
Trust department income for the third quarter was $2,875,000 or 10.7%
higher than the $2,597,000 earned one year ago. Service charges on depositors'
accounts increased 24.4% to $6,275,000 from $5,044,000 for last year's third
quarter. Credit card fees increased 24.8% to $3,011,000 for the quarter compared
to $2,412,000 for the three months ended September 30, 1995. In total, these
components of other income increased $2,108,000 or 21.0% compared to the same
quarter one year ago. Offsetting these increases was a decline in gains on sales
of securities of $102,000 and a drop in other operating income of $2,240,000.
The decline in other operating income was due to very little mortgage loan sale
activity during the 1996 third quarter. That is, gains on sales of mortgage
loans for the 1996 third quarter totaled $101,000 compared to $1,652,000 for the
same quarter last year, a drop of $1,551,000.
For the nine months ended September 30, 1996, compared to the same
period last year, trust department income increased 14.5% to $9,066,000, service
charges on depositors' accounts increased 16.9% to $17,750,000, and credit card
fees increased 23.7% to $8,498,000.
Excluding the decrease in gains on sales of loans and investment
securities, the Corporation's increase in other income for the current year
periods reflects the successful implementation of a comprehensive study began
last year to examine new sources of non-interest ("other") income as well as the
current pricing of existing products and services. Other income is especially
important to banks as it provides a source of revenues not sensitive to the
interest rate environment. Implementation of the study's remaining income
recommendations is continuing and expected to be materially completed by year
end 1996. The timing of loan and securities sales, and the related gains or
losses, is influenced by changes in market interest rates, loan demand, and
deposit withdrawals.
OTHER EXPENSES
Other expenses, excluding the pre-tax SAIF assessment of $10,235,000
were $48,191,000 for the third quarter, a decline of $3,210,000 or 6.2%, over
the $51,401,000 of core other expenses recorded last year. As stated in the
RESULTS OF OPERATIONS section, for comparative purposes, 1995 core other
expenses exclude the FDIC Premium refund of $1,800,000 received in September
1995. For the 1996 nine-month period, other expenses totaled $145,780,000
without the SAIF charge, versus $158,159,000 a year ago. Included in the prior
year-to-date other expenses
<PAGE> 16
were costs of $5,850,000 representing fees paid to financial advisors and
severance payments to certain individuals associated with the Corporation's
January 1995 acquisition of CIVISTA.
Excluding the one-time SAIF recapitalization expense, the efficiency
ratios for the third quarter and year-to-date periods were 57.46% and 58.55%,
respectively, compared to 62.58% for the 1995 third quarter and 67.29% for the
nine months ended September 30, 1995. The lower operating costs and related
improvement in the efficiency ratios are a continued result of the restructuring
program implemented last year. The Corporation is committed to keeping other
expenses under control and comparable to peer results.
Salaries, wages, pension and employee benefits, the largest component
of other expenses, decreased 4.6% to $22,869,000. For the nine-month period,
salaries, wages, pension and employee benefits dropped 9.2% to $70,802,000. The
decline in personnel costs was attributable to staff reductions implemented as
part of the previously mentioned restructuring program, as well as the CIVISTA
acquisition severance payments made in the first quarter last year.
FINANCIAL CONDITIONS
INVESTMENT SECURITIES
To comply with SFAS #115, in 1994, the Corporation placed its core
investment portfolio in held-to-maturity and its remaining investments into
available-for-sale. Effective December 31, 1995, the Corporation transferred all
held-to-maturity investments to available-for-sale. This one-time
reclassification was permitted by the Financial Accounting Standards Board to
allow institutions to reassess the appropriateness of their designations of
securities. The reclassification provides the Corporation with more flexibility
to respond, through the portfolio, to changes in market interest rates, or to
increases in loan demand or deposit withdrawals.
<PAGE> 17
The book value and market value of investment securities classified as
available-for-sale are as follows:
<TABLE>
<CAPTION>
September 30, 1996
------------------
Gross Gross
Book Unrealized Unrealized Market
Value Gains Losses Value
---------------- ---------------- ---------------- ----------------
<S> <C> <C> <C> <C>
U.S. Treasury securities
and U.S. Government agency
obligations $775,860 903 12,405 764,360
Obligations of state and
political subdivisions 103,294 872 672 103,495
Mortgage-backed securities 331,109 2,060 5,468 327,699
Other securities 88,383 1,185 905 88,662
---------------- ---------------- ---------------- ----------------
$1,298,646 5,020 19,450 1,284,216
================ ================ ================ ================
</TABLE>
<TABLE>
<CAPTION>
Book Value Market Value
---------------- ----------------
<S> <C> <C>
Due in one year or less $150,345 150,556
Due after one year through five years 423,404 420,827
Due after five years through ten years 135,472 133,353
Due after ten years 589,425 579,480
---------------- ----------------
$1,298,646 1,284,216
================ ================
</TABLE>
The book value and market value of investment securities including
mortgage-backed securities and derivatives at September 30, 1996, by contractual
maturity, are shown above. Expected maturities will differ from contractual
maturities based on the issuers' right to call or prepay obligations with or
without call or prepayment penalties.
The carrying value of investment securities pledged to secure trust and
public deposits and for purposes required or permitted by law amounted to
approximately $702,121,000 at September 30, 1996, $741,185,000 at December 31,
1995 and $712,875,000 at September 30, 1995.
Securities with remaining maturities over five years reflected in the
foregoing schedule consist of mortgage and asset backed securities. These
securities are purchased within an overall strategy to maximize future earnings
taking into account an acceptable level of interest rate risk. While the
maturities of these mortgage and asset backed securities are beyond five years,
these instruments provide periodic principal payments and include securities
with adjustable interest rates, reducing the interest rate risk associated with
longer term investments.
<PAGE> 18
LOANS
Total loans outstanding at September 30, 1996 amounted to
$3,872,175,000 compared to $3,770,366,000 at December 31, 1995 and $3,883,579 at
September 30, 1995. Although loan demand has been steady, loan sales,
securitizations, and repayments have mitigated the growth. The loan to funds
ratio, a measure of the Corporation's liquidity, equaled 78.2% at September 30,
1996 compared to 75.6% at December 31, 1995 and 77.4% at September 30, 1995.
ASSET QUALITY
Total nonperforming assets (non-accrual and restructured loans and
other real estate loans) amounted to $10,751,000 at September 30, 1996 or 0.28%
of total loans outstanding. At December 31, 1995, nonperforming assets totaled
$13,898,000 or 0.37% of outstanding loans compared to $16,947,000 or 0.44% of
outstanding loans at September 30, 1995. Effective December 31, 1995, the
Corporation adopted Statement of Financial Accounting Standard No. 114,
"Accounting by Creditors for Impairment of a Loan," and Statement No. 118, an
amendment of Statement No. 114, "Accounting by Creditors for Impairment of a
Loan - Income Recognition and Disclosures." These statements prescribe how the
allowance for loan losses related to impaired loans should be determined and
illustrate the required impaired loan disclosures. Impaired loans are loans for
which, based on current information or events, it is probable that a creditor
will be unable to collect all amounts due according to the contractual terms of
the loan agreement. Impaired loans must be valued based on the present value of
the loans' expected future cash flows at the loans' effective interest rates, at
the loans' observable market prices, or the fair value of the underlying
collateral. Under the Corporation's credit policies and practices, and in
conjunction with provisions within Statements No. 114 and No. 118, all
nonaccrual and restructured commercial, agricultural, construction, and
commercial real estate loans, meet the definition of impaired loans.
<PAGE> 19
<TABLE>
<CAPTION>
(Dollars in thousands)
September 30, December 31, September 30,
1996 1995 1995
------------------ ---------------------- ------------------
<S> <C> <C>
Impaired Loans:
Non-accrual 9,363 7,373 N/A
Restructured 93 1,548 N/A
- - - ---------------------------------------------------------------------------------------------------------------
Total impaired loans 9,456 8,921 N/A
------------------ ---------------------- ------------------
Other Loans:
Non-accrual 916 3,918 N/A
Restructured --- --- N/A
- - - ---------------------------------------------------------------------------------------------------------------
Total other nonperforming loans 916 3,918 N/A
- - - ---------------------------------------------------------------------------------------------------------------
Total nonperforming loans 10,372 12,839 13,935
- - - ---------------------------------------------------------------------------------------------------------------
Other real estate owned 379 1,059 3,012
------------------ ---------------------- ------------------
Total nonperforming assets 10,751 13,898 16,947
===============================================================================================================
Loans past due 90 days or more
accruing interest 9,015 7,252 4,457
===============================================================================================================
Total nonperforming assets as a
percent of total loans 0.28% 0.37% 0.44%
===============================================================================================================
<FN>
N/A = Not Available
</TABLE>
There is no concentration of loans in any particular industry or group
of industries. Most of the Corporation's business activity is with customers
located within the State of Ohio.
ALLOWANCE FOR LOAN LOSSES
The allowance for possible loan losses at September 30, 1996 totaled
$46,607,000 or 1.20% of total loans outstanding compared to $46,840,000 or 1.24%
and $38,673,000 or 1.00% at December 31, 1995 and September 30, 1995,
respectively.
<PAGE> 20
<TABLE>
<CAPTION>
(Dollars in thousands)
September 30, December 31, September 30,
1996 1995 1995
--------------------- ----------------------- ---------------------
<S> <C> <C> <C>
Balance at beginning of year $46,840 35,834 35,834
Provision charged to
operating expenses 9,612 19,763 8,118
Loans charged off 14,232 12,925 8,436
Recoveries on loans
previously charged off 4,387 4,168 3,157
--------------------- ----------------------- ---------------------
$46,607 46,840 38,673
===================== ======================= =====================
Net charge offs as a percent
of average loans 0.34% 0.23% 0.18%
Allowance for possible loan losses:
As a percent of loans
outstanding at end of
period 1.20% 1.24% 1.00%
As a multiple of net
charge offs 3.54X 5.35X 5.48X
</TABLE>
The Corporation's Credit Policy Division manages credit risk by
establishing common credit policies for its subsidiary banks, participating in
approval of their largest loans, conducting reviews of their loan portfolios,
providing them with centralized consumer underwriting, collections and loan
operation services, and overseeing their loan workouts. The Corporation's
objective is to minimize losses from its commercial lending activities and to
maintain consumer losses at acceptable levels that are stable and consistent
with growth and profitability objectives.
DEPOSITS
The following schedule illustrates the change in composition of the
average balances of deposits and average rates paid for the noted periods.
<PAGE> 21
<TABLE>
<CAPTION>
(Dollars in Thousands)
Nine months and year ended
--------------------------------------------------------------------------------
September 30, 1996 December 31, 1995 September 30, 1995
Average Average Average Average Average Average
Balance Rate Balance Rate Balance Rate
------------------------- ------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C>
Demand Deposits -
non-interest bearing $742,724 - 725,287 - 710,560 -
Demand Deposits -
interest bearing 445,503 1.78% 426,608 2.16% 427,657 2.17%
Savings Deposits 1,414,649 2.32% 1,514,374 2.54% 1,531,868 2.58%
Certificates and other
time deposits 1,768,748 5.40% 1,782,817 5.47% 1,776,074 5.43%
--------------- -------------- --------------
$4,371,624 3.12% 4,449,086 3.26% 4,446,159 3.27%
=============== ============== ==============
</TABLE>
The following table summarizes the certificates and other time deposits
in amounts of $100,000 or more as of September 30, 1996 by time remaining until
maturity.
<TABLE>
<CAPTION>
Amount
<S> <C> <C>
Maturing in:
Under 3 months $134,342
3 to 12 months 93,799
Over 12 months 40,602
-------------
$268,743
=============
</TABLE>
<PAGE> 22
CAPITAL RESOURCES
Shareholders' equity at September 30, 1996 totaled $519,685,000
compared to $542,881,000 at December 31, 1995 and $543,688,000 at September 30,
1995.
The following table reflects the various measures of capital:
<TABLE>
<CAPTION>
As of As of As of
September 30, December 31, September 30,
1996 1995 1995
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
Total equity 519,685 9.36% 542,881 9.70% 543,688 9.67%
Common equity 519,685 9.36% 542,881 9.70% 543,688 9.67%
Tangible common equity (a) 515,078 9.29% 536,934 9.60% 528,275 9.42%
Tier 1 capital (b) 521,033 12.33% 538,032 14.53% 543,333 14.46%
Total risk-based capital (c) 567,640 13.44% 584,872 15.80% 582,006 15.48%
Leverage (d) 521,033 9.51% 538,032 9.66% 543,333 9.66%
<FN>
(a) Common equity less all intangibles; computed as a ratio to total assets
less intangible assets.
(b) Shareholders' equity minus net unrealized holding gains on equity
securities, plus or minus net unrealized holding losses or gains on
available for sale debt securities, less goodwill; computed as a ratio to
risk-adjusted assets, as defined in the 1992 risk-based capital guidelines.
(c) Tier 1 capital plus qualifying loan loss allowance, computed as a ratio to
risk-adjusted assets, as defined in the 1992 risk-based capital guidelines.
(d) Tier 1 capital; computed as a ratio to the latest quarter's average assets
less goodwill.
</TABLE>
The risk-based capital guidelines issued by the Federal Reserve Bank in
1988 require banks to maintain capital equal to 8% of risk-adjusted assets
effective December 31, 1993. At September 30, 1996 the Corporation's risk-based
capital equaled 13.44% of risk adjusted assets, far exceeding the minimum
guidelines.
The cash dividend of $.27 paid in the third quarter has an indicated
annual rate of $1.08 per share.
The Corporation cautions that any forward looking statements contained
in this report, in a report incorporated by reference to this report or made by
management of the Corporation, involve risks and uncertainties and are subject
to change based upon various factors. Actual results could differ materially
from those expressed or implied.
<PAGE> 23
PART II. - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
27 Financial Data Schedule
(B) FORM 8-K
On July 19, 1996, FirstMerit Corporation filed a Form 8-K to
report its Amended and Restated Shareholders Rights Plan.
<PAGE> 24
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.
FIRSTMERIT CORPORATION
By: /s/Jack R. Gravo
-------------------------------------------
Jack R. Gravo, Executive Vice President/Finance
& Administration
DATE: November 13, 1996
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 242,794
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 4,309
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,284,216
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 1,284,216
<LOANS> 3,872,175
<ALLOWANCE> 46,607
<TOTAL-ASSETS> 5,549,773
<DEPOSITS> 4,364,317
<SHORT-TERM> 588,729
<LIABILITIES-OTHER> 77,042
<LONG-TERM> 0
<COMMON> 60,405
0
0
<OTHER-SE> 459,280
<TOTAL-LIABILITIES-AND-EQUITY> 5,549,773
<INTEREST-LOAN> 84,463
<INTEREST-INVEST> 19,750
<INTEREST-OTHER> 149
<INTEREST-TOTAL> 104,362
<INTEREST-DEPOSIT> 33,585
<INTEREST-EXPENSE> 40,434
<INTEREST-INCOME-NET> 63,928
<LOAN-LOSSES> 3,485
<SECURITIES-GAINS> 24
<EXPENSE-OTHER> 58,426
<INCOME-PRETAX> 19,835
<INCOME-PRE-EXTRAORDINARY> 19,835
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 13,447
<EPS-PRIMARY> 0.42
<EPS-DILUTED> 0.42
<YIELD-ACTUAL> 5.05
<LOANS-NON> 10,279
<LOANS-PAST> 9,015
<LOANS-TROUBLED> 93
<LOANS-PROBLEM> 21,039
<ALLOWANCE-OPEN> 47,772
<CHARGE-OFFS> 6,267
<RECOVERIES> 1,617
<ALLOWANCE-CLOSE> 46,607
<ALLOWANCE-DOMESTIC> 46,607
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
