UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended Commission File
September 30, 1995 Number 0-10869
FORT WAYNE NATIONAL CORPORATION
(Exact name of registrant as specified in its charter.)
INDIANA 35-1502812
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
110 West Berry Street
Post Office Box 110, Fort Wayne, Indiana 46801
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (219) 426-0555
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, and (2) has been subject to such filing
requirements for the past 90 days.
YES [X] NO [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date:
Class Outstanding November 10, 1995
________________________________ _____________________________
Common Shares, Without Par Value 11,424,823
PAGE
<PAGE>
<TABLE>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
FORT WAYNE NATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
<CAPTION>
Sep 30 Dec 31
1995 1994
___________ ___________
(In thousands)
<S> <C> <C>
ASSETS
Cash and due from banks $ 135,619 $ 156,284
Federal funds sold and securities
purchased under agreements to resell 22,625 1,900
Interest-bearing deposits with banks 200 200
Investment securities 734,712 701,311
Loans 1,287,616 1,219,976
Less: Unearned income (2,973) (2,758)
Allowance for possible loan losses (19,836) (21,795)
__________ __________
NET LOANS 1,264,807 1,195,423
Premises and equipment 32,870 32,756
Other assets 39,741 48,087
__________ __________
TOTAL ASSETS $2,230,574 $2,135,961
========== ==========
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Deposits:
Noninterest-bearing $ 267,078 $ 259,451
Interest-bearing 1,452,672 1,372,891
__________ __________
TOTAL DEPOSITS 1,719,750 1,632,342
Federal funds purchased and securities sold
under agreements to repurchase 216,487 255,010
Notes payable - U.S. Treasury and
other borrowings 41,866 21,884
Dividends payable 2,742 2,529
Accrued liabilities 17,079 16,547
Subordinated and other long-term notes 6,400 7,160
__________ __________
TOTAL LIABILITIES 2,004,324 1,935,472
Deferred gain on sale of premises 1,293 1,493
Shareholders' equity:
Preferred stock, without par value:
Class A Voting - 1,000,000 shares
authorized but unissued
Class B Nonvoting - 1,000,000 shares
authorized but unissued
Common stock, without par value:
Authorized shares: 20,000,000
Issued and outstanding shares -
1995 - 11,424,073; 1994 - 11,493,968 19,040 19,157
Capital surplus 31,438 31,618
Retained earnings 166,724 157,189
Unrealized gain (loss) on securities
available-for-sale 7,755 (8,968)
__________ __________
TOTAL SHAREHOLDERS' EQUITY 224,957 198,996
__________ __________
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $2,230,574 $2,135,961
========== ==========
</TABLE>
PAGE
<PAGE>
<TABLE>
FORT WAYNE NATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
<CAPTION>
Three Months Nine Months
Ended Sep 30 Ended Sep 30
________________ ________________
1995 1994 1995 1994
_______ _______ _______ _______
(In thousands, except per share data)
<S> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans:
Taxable $28,771 $24,269 $83,540 $69,372
Tax-exempt 345 284 1,087 888
Interest and dividends on
investment securities:
Taxable 8,596 8,206 25,870 25,791
Tax-exempt 2,596 2,572 7,827 7,778
Interest on federal funds
sold and securities purchased
under agreements to resell 540 132 720 241
Interest on deposits with banks 3 8 5 21
_______ _______ _______ _______
TOTAL INTEREST INCOME 40,851 35,471 119,049 104,091
INTEREST EXPENSE
Interest on deposits 16,915 13,219 48,027 38,067
Interest on federal funds
purchased and securities sold
under agreements to repurchase 3,468 2,307 9,981 6,045
Interest on notes payable -
U.S. Treasury and other borrowings 443 151 1,013 549
Interest on subordinated and
other long-term notes 207 231 661 732
_______ _______ _______ _______
TOTAL INTEREST EXPENSE 21,033 15,908 59,700 45,393
_______ _______ _______ _______
NET INTEREST INCOME
BEFORE PROVISION FOR
POSSIBLE LOAN LOSSES 19,818 19,563 59,349 58,698
Provision for possible loan losses 715 410 1,710 2,113
_______ _______ _______ _______
NET INTEREST INCOME AFTER
PROVISION FOR POSSIBLE LOAN LOSSES 19,103 19,153 57,639 56,585
NONINTEREST INCOME
Fiduciary fees 2,381 2,189 7,200 6,636
Service charges on deposit accounts 1,205 1,194 3,523 3,361
Other service charges 679 1,022 2,180 2,875
Net securities gains 58 1 69 1
Other income 494 446 1,550 1,134
_______ _______ _______ _______
TOTAL NONINTEREST INCOME 4,817 4,852 14,522 14,007
NONINTEREST EXPENSE
Salaries and wages 6,316 6,254 18,742 17,695
Employee benefits 1,445 1,365 4,518 4,492
Net Occupancy 1,257 1,165 3,916 3,735
Equipment expense 1,029 919 3,062 2,871
FDIC assessment (91) 916 1,769 2,733
Other expense 4,199 3,876 12,775 11,352
_______ _______ _______ _______
TOTAL NONINTEREST EXPENSE 14,155 14,495 44,782 42,878
_______ _______ _______ _______
INCOME BEFORE INCOME TAXES 9,765 9,510 27,379 27,714
Applicable income taxes 2,910 2,951 7,681 8,483
_______ _______ _______ _______
NET INCOME $ 6,855 $ 6,559 $19,698 $19,231
======= ======= ======= =======
Net income per share $ .60 $ .58 $ 1.72 $ 1.68
======= ======= ======= =======
</TABLE>
PAGE
<PAGE>
<TABLE>
FORT WAYNE NATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Nine Months
Ended September 30
1995 1994
________ ________
(In thousands)
<CAPTION>
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 19,698 $ 19,231
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for possible loan losses 1,710 2,113
Net accretion and amortization
of investment securities 144 357
Net accretion and amortization of loans (20) (3)
Provision for depreciation and amortization
of premises and equipment 2,614 2,534
Deferred income taxes 1,289 (268)
Amortization of deferred gain on sale
of premises (200) (200)
Gain on sale of investment securities (72) (49)
Loss on sale of investment securities 3 48
Loans originated for resale (6,869) (11,855)
Unrealized (gain)loss on loans held for sale (31) 9
Proceeds from sales of loans 6,748 28,750
Net (gain) loss on sale of loans (70) 368
Net loss on sale of premises and equipment 13 38
Increase in other assets (4,338) (472)
Increase (decrease) in other liabilities 532 (417)
________ ________
NET CASH PROVIDED BY OPERATING ACTIVITIES 21,151 40,184
INVESTING ACTIVITIES
Net decrease in federal funds sold and securities
purchased under agreements to resell (20,725) (15,000)
Net increase in interest-bearing deposits
with banks -- 400
Proceeds from sales of investment securities 1,650 7,466
Proceeds from maturities of investment securities 134,096 235,113
Purchases of investment securities (141,104) (173,439)
Net increase in loans (70,852) (81,174)
Proceeds from disposals of premises and equipment 32 3
Purchase of premises and equipment (2,773) (2,527)
________ ________
NET CASH USED IN INVESTING ACTIVITIES (99,676) (29,158)
FINANCING ACTIVITIES
Net increase in deposits 87,408 43,269
Net decrease in short-term borrowings (18,541) (63,269)
Principal payment on long-term debt (760) (760)
Cash dividends paid (7,802) (7,263)
Proceeds from exercise of stock options 381 501
Repurchase of common stock (2,826) --
________ ________
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 57,860 (27,465)
________ ________
DECREASE IN CASH AND CASH EQUIVALENTS (20,665) (16,439)
Cash and cash equivalents at beginning of period 156,284 134,446
________ ________
CASH AND CASH EQUIVALENTS AT END OF PERIOD $135,619 $118,007
======== ========
</TABLE>
PAGE
<PAGE>
FORT WAYNE NATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Principals of Consolidation
The financial statements are consolidated statements of Fort Wayne National
Corporation(the Company) and its wholly-owned subsidiaries. All significant
intercompany accounts and transactions have been eliminated. A description
of all significant accounting policies is included in the 1994 Annual Report
to Shareholders.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principals for
interim financial reporting. In the opinion of management, all adjustments
considered necessary for a fair presentation of the operating results for the
three-month and nine-month periods ended September 30, 1995 and 1994 have
been made.
2. Shareholders' Equity and Per Share Data
Net income per share is based on weighted average shares outstanding of
11,424,044 and 11,485,680 for the three months ended September 30, 1995 and
1994, respectively and 11,457,088 and 11,476,411 for the nine months ended
September 30, 1995 and 1994, respectively.
3. Pending Acquisition
On November 6, 1995 the Company entered onto an agreement and Plan of Merger
with Valley Financial Services, Inc. (VFS). Under the terms of the
agreement, the Company has agreed to purchase the 51,197 outstanding shares
of preferred stock and the 204,788 outstanding shares of common stock of VFS
for a purchase price of $110,000,000.
The acquisition is expected to be accounted for underthe purchase method of
accounting. Subject to required approvals by regulators and the shareholders
of VFS, consummation of the merger is anticipated to occur during the second
quarter of 1996.
Total assets and total shareholders' equity of Valley Financial Services,
Inc. as of September 30, 1995 were approximatley $766,660,000 and
$57,253,000, respectively.
PAGE
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
FORT WAYNE NATIONAL CORPORATION
Management's Discussion and Analysis of Financial Condition and
Results of Operations Financial Condition
Pending Acquisition
On November 6, 1995 the Company entered onto an agreement and Plan of Merger
with Valley Financial Services, Inc. (VFS). Under the terms of the agreement,
the Company has agreed to purchase the 51,197 outstanding shares of preferred
stock and the 204,788 outstanding shares of common stock of VFS for a purchase
price of $110,000,000. The acquisition is expected to be accounted for under
the purchase method of accounting. Subject to required approvals by
regulators and the shareholders of VFS, consummation of the merger is
anticipated to occur during the second quarter of 1996.
Financial Condition
Total assets of the Company increased $95 million at September 30, 1995 when
compared to December 31, 1994. Average daily assets for the third quarter of
1995 of $2.206 billion were $53 million over the average for the second
quarter of 1995. For the first nine months of 1995, average daily assets were
$2.149 billion compared to $2.087 billion for the same period in 1994.
Loan growth slowed in the third quarter of 1995. Loans, net of unearned
income, as of September 30, 1995 were approximately $2 million below the
amount outstanding at June 30, 1995 yet exceeded the amount outstanding at
December 31, 1994 by $67 million. Commercial and industrial loans outstanding
were flat for the third quarter compared to the second quarter of 1995 yet $59
million above December 31, 1994. As mortgage rates continued to fall somewhat
during the third quarter, residential mortgages outstanding grew $8 million
from June 30, 1995. Other consumer loans, including home equity borrowings
and credit cards decreased $5 million in the third quarter of 1995 and are $5
million below the level outstanding at December 31, 1994.
Average loans outstanding continue to increase. For the third quarter of
1995, loans averaged $1.277 billion, a $12 million increase from the second
quarter of 1995. For the nine months ended September 30, 1995, loans
outstanding averaged $1.251 billion compared to $1.170 billion for the same
period in 1994.
Most of the Company's investment portfolio has been designated as available-
for-sale. The net unrealized gain, net of taxes, on securities available-for-
sale increased $17 million from December 31, 1994 to September 30, 1995.
During the third quarter of 1995, the Company purchased $20.6 million in U.S.
Treasury securities, which have been designated as held for trading purposes.
PAGE
<PAGE>
The investment portfolio, excluding the market valuation adjustment on
securities available-for-sale, increased $5 million from December 31, 1994.
On average for the first nine months of 1995, excluding the market valuation
adjustment, the investment portfolio was $26 million under the same period
last year.
Federal funds sold increased $21 million as of September 30, 1995 compared to
year-end 1994. Average federal funds sold for the first nine months of 1995
have exceeded the same period of the prior year by $11 million.
The Company's total deposits increased $87 million at September 30, 1995 when
compared to December 31, 1994. Average total deposits for the third quarter
of 1995 are up $29 million from the second quarter 1995, which is comparable
to the $29 million increase in the second quarter of 1995 from the first
quarter of 1995. For the nine months ended September 30, 1995, average
deposits totaled $1.638 billion compared to $1.617 billion for the same period
in 1994. Competition for deposits remains intense not just from other
commercial banks but also from other entities offering mutual funds,
annuities, and other investment alternatives. Unfortunately, these other
entities are not subject to the same regulations as financial institutions.
The Company continues to experience a shift among the various deposit
categories. For the nine months ended September 30, 1995, average short-term
deposits including interest-bearing checking and other money market deposits
decreased $17 million while other time deposits, excluding deposits of
$100,000 or more, increased $32 million over the same period in 1994. As
interest rates have stabilized somewhat, depositors are more willing to hold
their deposits in CD's as opposed to shorter term deposit categories.
Short-term borrowings, including federal funds purchased and securities sold
under agreements to repurchase, and notes payable, decreased $19 million at
September 30, 1995 from December 31, 1994. On average, short-term borrowings
for the first nine months of 1995 were $31 million over the same period in
1994 as commercial depositors increased their use of the Company's cash
management services.
Capital Resources
The Federal Reserve Board standards classify capital into two categories,
called Tier I and Tier II. The Company is required to maintain a certain
amount of capital in each category based on "risk-adjusted" assets. The
capital guidelines require a combined Tier I and Tier II ratio of 8.0% with at
least a 4.0% Tier I capital ratio. In addition, the Federal Reserve Board
requires a minimum Tier I leverage ratio of 4.0%. Tier I leverage ratio is
defined as Tier I capital divided by total assets less goodwill. The
Company's risk-based capital ratios continue to exceed minimum regulatory
requirements as shown in the following table (in thousands of dollars). This
performance is attributed to the low level of risk-weighted assets in both the
loan and investment portfolios.
PAGE
<PAGE>
<TABLE>
RISK-BASED CAPITAL
<CAPTION>
SEP 30, 1995 DEC 31, 1994 SEP 30, 1994
_____________ ____________ _____________
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Tier I Capital $ 215,083 $ 205,671 $ 201,040
Tier II Capital 18,062 16,036 16,074
____________ ____________ ____________
Total Tier I and Tier II Capital $ 233,145 $ 221,707 $ 217,114
============ ============ ============
Risk-weighted Assets $ 1,445,105 $ 1,283,057 $ 1,286,081
============ ============ ============
Tier I Capital Ratio 14.88% 16.03% 15.63%
Tier II Capital Ratio 1.25% 1.25% 1.25%
____________ ____________ ____________
Total Tier I and Tier II
Capital Ratio 16.13% 17.28% 16.88%
============ ============ ============
Tier I Leverage Ratio 9.65% 9.64% 9.66%
============ ============ ============
</TABLE>
Management has reviewed current recommendations by the regulatory
authorities, including pending requirements under the Federal Deposit
Insurance Corporation Improvement Act (FDICIA). It isthe opinion of
management that the adoption of these regulations would not have a material
effect on the liquidity, capital resources, or operations of the Company.
Results of Operations
Net income for the third quarter of 1995 amounted to $6.855 million or $.60
per share, an increase of $296,000 or 4.5% over the third quarter of 1994.
For the first nine months of 1995, net income was $19.698 million or $1.72
per share compared to $19.231 million of $1.68 per share for the same period
in 1994.
The net interest margin, measured on a fully taxable equivalent basis, was
4.24% for the third quarter of 1995, a decrease of 8 basis points from the
4.32% in the second quarter of 1995. For the year, the net interest margin
averaged 4.33% compared to 4.43% for 1994. The Company's yield on earning
assets decreased by 6 basis points for the quarter reflecting the general
decline in the level of interest rates during the quarter. The cost of
PAGE
<PAGE>
interest-bearing liabilities declined only 3 basis points however, due to a
shift in the mix of deposits during the quarter.
The Company has used interest rate futures contracts as a part of its overall
interest rate management for many years. These contracts represent
commitments to sell a specified instrument at a future date and at a specified
price. Late in the third quarter of 1995 the Company also began using a
program that combines a series of options and futures contracts wrapped around
a portfolio of trading securities as an additional tool to reduce the
Company's exposure to interest rate risk. The total notional amount of
futures contracts used for hedging deposit liability accounts under both of
these programs amounted to $710 million at September 30, 1995 compared to
$458 million at December 31, 1994. The notional amount of option contracts at
September 30, 1995 amounted to $18.5 million. The unrealized open position of
the interest rate futures contracts at September 30, 1995 was a $443,000 loss
indicating a decline in interest rates since the hedges were placed.
The allowance for possible loan losses represents management's estimate of
potential credit losses associated with the loan portfolio, including all
off-balance sheet lending commitments. While the balance is only an estimate,
management does perform a systematic analysis in determining the adequacy of
the allowance for possible loan losses and, consequently, the annual provision
charged to earnings. Factors considered by management to determine the
adequacy of the allowance for possible loan losses include: changes in
policies and procedures, including underwriting standards and collection,
charge-off and recovery practices; changes in national and local economic and
business conditions and developments, including the condition of various
market segments; changes in the experience, ability, and depth of the lending
management; the identification of any concentrations of credit, and changes in
the level of such concentrations; and the effect of external factors such as
competition and legal and regulatory requirements. Accordingly, the
possibility exists that changes may be required in future periods due to the
dynamic economic environment and its possible impact on the financial
stability of the Company's borrowers.
The allowance for possible loan losses amounted to $19.8 million at September
30, 1995 as compared to $21.8 million at December 31, 1994 and $22.7 million
at September 30, 1994. Much of this decrease occurred in the second quarter
of 1995 when the Company charged off $3 million, which had previously been
reserved for, of a nonaccrual loan. As a result, the ratio of the allowance
to total loans outstanding at September 30, 1995 of 1.54% showed a decrease
from the 1.79% as of December 31, 1994.
The Company's nonperforming loans, including nonaccrual, past due 90 days, and
restructured loans are summarized as follows (in thousands of dollars).
PAGE
<PAGE>
<TABLE>
NONPERFORMING ASSET TABLE
<CAPTION>
SEP 30, 1995 DEC 31, 1994 SEP 30, 1994
_____________ ____________ _____________
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Nonaccrual Loans $ 9,730 $ 11,282 $ 19,630
90 Days Past Due 1,763 944 2,191
Restructured -- 8,750 890
____________ ____________ ____________
Total Nonperforming Loans $ 11,493 $ 20,976 $ 22,712
============ ============ ============
Nonperforming Loans as a Percent
of Total Loans Outstanding .89% 1.72% 1.89%
============ ============ ============
Other Real Estate 324 631 425
____________ ____________ ____________
Total Nonperforming Assets $ 11,817 $ 21,607 $ 23,137
============ ============ ============
Nonperforming Assets as a
Percent of Total Assets .53% 1.01% 1.11%
============ ============ ============
</TABLE>
Total nonperforming loans decreased $9.5 million at September 30, 1995 when
compared to December 31, 1994 and $11.2 million from September 30, 1994.
During the fourth quarter of 1994 an $8 million loan was restructured and
included in the restructured classification as of December 31, 1994. This
loan demonstrated sufficient performance under the new terms to be classified
as performing at the end of the second quarter of 1995. Subsequent to
September 30, 1995, however, the borrower has voluntarily decided to
liquidate. As a conservative measure, the Company intends to place a total of
$8.5 million of loans to this borrower on nonaccrual status during the fourth
quarter of 1995.
As of December 31, 1994, the Company had reported an additional $5.9 million
of loans where management was closely monitoring the borrower's ability to
comply with payment terms. At September 30, 1995 $3.3 million of the $5.9
million were classified as nonaccrual. Management is still closely monitoring
the remaining $2.6 million.
PAGE
<PAGE>
As a result of management's quarterly review of the loan portfolio and the
allowance for possible loan losses, the Company provided $715,000 for possible
loan losses in the third quarter of 1995 as compared to the $410,000 provided
in the same quarter in 1994. This is an increase over the $260,000 provided
for in the second quarter of 1995. In connection with the charge-off of $3
million on the above mentioned nonaccrual loan, the Company agreed to fund
certain operating expenses related to the loan collateral on behalf of the
borrower. The payment of these expenses was required to be recognized as part
of the Company's operating expenses. However, such anticipated expenses had
previously been provided for through the allowance for possible loan losses.
Accordingly, the Company reduced the provision and related allowance for
possible loan losses in the second quarter by the amount of the expenses
($450,000) that were recognized as part of other operating expense. An
additional $80,000 was recognized as part of other operating expense in the
third quarter of 1995.
Net charge-offs for the third quarter of 1995 amounted to $183,000 as compared
to $246,000 (excluding the $3 million loan charge-off mentioned above) for the
second quarter of 1995 and $240,000 for the first quarter of 1995.
The Company's noninterest income for the third quarter of 1995 decreased
$35,000 from the third quarter of 1994. For the period ended September 30,
1995, noninterest income of $14.5 million was $515,000 or 3.7% above the prior
year's results. Both fiduciary fees and service charges on deposit accounts
increased. Other service charges decreased as the Company has eliminated
intra company charges for data processing services. Other income, however,
increased $416,000 from 1994. For the period ended September 30, 1994, the
Company realized $368,000 of losses on sold loans while during the same period
in 1995, the Company realized gains of $70,000.
Noninterest expense also decreased $340,000 or approximately 2.3% during the
third quarter of 1995 compared to the third quarter of 1994. For the nine
months ended September 30, 1995, noninterest expense increased $1.9 million or
4.4%.
Salaries and wages increased $1,047,000 or 5.9% for the first nine months of
1995 compared to the same period in 1994. Staffing levels associated
primarily with the continued conversion of application software and the new
platform automation project have increased during the year. In addition,
deferred compensation relating to loan originations decreased $182,000 in 1995
from 1994. Employee benefit expense increased just $26,000 for the nine
months ended September 30, 1995 compared to the same period of 1994. However,
the 1995 amount was reduced by a $114,000 adjustment in the pension expense
accrual during the second quarter of 1995.
Net occupancy expense for the third quarter of 1995 was $92,000 or 7.9% higher
than the third quarter of 1994. For the nine months ended September 30, 1995,
net occupancy expense was $181,000 or 4.8% higher than the same period in
1994. Net occupancy expense is anticipated to continue to increase as the
Company will be assuming additional space in its main office headquarters
during the third quarter of 1995 to expand the loan and trust division.
PAGE
<PAGE>
The Company continues to invest in computer hardware and upgrade its software.
As a result, equipment expense for the nine months ended September 30, 1995
increased by $191,000 or 6.6% over the same period of 1994.
The most significant change to noninterest expense for the period ended
September 30, 1995 occurred in the FDIC insurance expense category which
decreased by $1,007,000 for the third quarter of 1995 compared to the third
quarter of 1994. The FDIC insurance fund met its mandated level of 1.25% of
insured deposits during the second quarter of 1995. Therefore, the Company's
FDIC insurance expense was reduced from the prior rate of $.23 per $100 of
insured deposits to $.04 per $100 of insured deposits. As a result the
Company's FDIC insurance expense decreased from $914,000 for the second
quarter of 1995 to $164,000 for the third quarter. In addition, during the
third quarter of 1995 the Company received a refund of $255,000 relating to
premiums paid during the second quarter of 1995, which when combined with the
$164,000 provision for the quarter resulted in a net negative expense amountof
$91,000 for the quarter.
Other noninterest expense grew $323,000 or approximately 8.3% during the third
quarter of 1995 compared to the third quarter of 1994. For the nine months
ended September 30, 1995, other expense increased $1.4 million or 12.5% from
the same period of a year ago. Over 50% of this increase is due to the loan
expenses discussed above and a teller loss incurred in the first quarter of
1995. In addition, the Company incurred expenses totaling $222,000 to upgrade
the trust management information software. Excluding these items, other
noninterest expense grew $426,000 or 3.8% for the nine months ended September
30, 1995 compared to the nine months ended September 30, 1994.
Applicable income taxes for the nine months ended September 30, 1995 decreased
$802,000 as a result of a decrease in taxable income along with a change in
estimate in connection with the calculation of the Company's overall income
tax accruals.
PAGE
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
This item is inapplicable or is omitted pursuant to
the instructions to Part II.
Item 2. Changes in Securities.
This item is inapplicable or is omitted pursuant to
the instructions to Part II.
Item 3. Defaults on Senior Securities.
This item is inapplicable or is omitted pursuant to
the instructions to Part II.
Item 4. Submission of Matters to a Vote of Security Holders.
This item is inapplicable or is omitted pursuant to
the instructions to Part II.
Item 5. Other Information.
This item is inapplicable or is omitted pursuant to
the instructions to Part II.
Item 6. Exhibits and Reports on Form 8-K
a.) Exhibits
Exhibit 11 - Statement Re Computation of Earnings
Per Share.
Exhibit 27 - Financial Data Schedule.
b.) Reports on Form 8-K
No Form 8-K was filed during the third quarter
of 1995.
PAGE
<PAGE>
FORT WAYNE NATIONAL CORPORATION
SIGNATURES
Pursuant to the requirement 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.
FORT WAYNE NATIONAL CORPORATION
REGISTRANT
November 10, 1995 Jackson R. Lehman
Date Jackson R. Lehman
Chairman of the Board and
Chief Executive Officer
November 10, 1995 Stephen R. Gillig
Date Stephen R. Gillig
Executive Vice President, Chief
Financial Officer and Secretary
/TEXT
<PAGE>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-11
<SEQUENCE>2
<DESCRIPTION>STATEMENT RE - COMPUTATION OF EARNINGS PER SHARE.
<TABLE>
EXHIBIT 11
FORT WAYNE NATIONAL CORPORATION AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF EARNINGS PER SHARE
(Unaudited)
<CAPTION>
Three Months Six Months
Ended Sep 30 Ended Sep 30
________________ ________________
1995 1994 1995 1994
_______ _______ _______ _______
(In thousands, except per share data)
<S> <C> <C> <C> <C>
PRIMARY
Average shares outstanding 11,424 11,486 11,457 11,476
Net effect of dilutive stock options
-- based on the treasury stock method
using average market price 91 74 45 46
_______ _______ _______ _______
TOTAL 11,515 11,560 11,502 11,522
======= ======= ======= =======
Net income $ 6,855 $ 6,559 $19,698 $19,231
======= ======= ======= =======
Earnings per share $ .60 $ .57 $ 1.71 $ 1.67
======= ======= ======= =======
FULLY DILUTED
Average shares outstanding 11,424 11,486 11,457 11,476
Net effect of dilutive stock options
-- based on the treasury stock method
using the higher of the end of the
period market price or average
market price 103 81 103 81
_______ _______ _______ _______
TOTAL 11,527 11,567 11,560 11,557
======= ======= ======= =======
Net income $ 6,855 $ 6,559 $19,698 $19,231
======= ======= ======= =======
Earnings per share $ .59 $ .57 $ 1.70 $ 1.66
======= ======= ======= =======
<FN>
Note - Average shares outstanding were used for earnings per share amounts
included in the Company's financial statements since the dilutive
effect of stock options granted were less than 3%.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FORT WAYNE NATIONAL CORPORATION AND SUBSIDIARIES CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED) AS OF SEPTEMBER 30, 1995 AND FOR THE THREE MONTH AND
NINE MONTH PERIODS THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> $ 135,619
<INT-BEARING-DEPOSITS> 200
<FED-FUNDS-SOLD> 22,625
<TRADING-ASSETS> 20,578
<INVESTMENTS-HELD-FOR-SALE> 714,285
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 734,712
<LOANS> 1,284,643
<ALLOWANCE> 19,836
<TOTAL-ASSETS> $2,230,574
<DEPOSITS> $1,719,750
<SHORT-TERM> 258,353
<LIABILITIES-OTHER> 17,079
<LONG-TERM> 6,400
<COMMON> 19,040
0
0
<OTHER-SE> 205,917
<TOTAL-LIABILITIES-AND-EQUITY> $2,230,574
<INTEREST-LOAN> $ 84,627
<INTEREST-INVEST> 33,697
<INTEREST-OTHER> 725
<INTEREST-TOTAL> 119,049
<INTEREST-DEPOSIT> 48,027
<INTEREST-EXPENSE> 59,700
<INTEREST-INCOME-NET> 59,349
<LOAN-LOSSES> 1,710
<SECURITIES-GAINS> 69
<EXPENSE-OTHER> 44,782
<INCOME-PRETAX> 27,379
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> $ 19,698
<EPS-PRIMARY> $ 1.72
<EPS-DILUTED> $ 1.72
<YIELD-ACTUAL> 4.33
<LOANS-NON> 9,730
<LOANS-PAST> 1,736
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 2,600
<ALLOWANCE-OPEN> 21,795
<CHARGE-OFFS> 4,303
<RECOVERIES> 634
<ALLOWANCE-CLOSE> 19,836
<ALLOWANCE-DOMESTIC> 19,836
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
