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
March 31, 1997 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 May 7, 1997
________________________________ ______________________________
Common Shares, Without Par Value 11,724,221
6% Cumulative Convertible Class B
Preferred Stock, Series 1 739,976
The exhibit index appears on page 15.
This report, including the cover page contains a total of 16 pages.
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<PAGE>
FORT WAYNE NATIONAL CORPORATION AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PART I FINANCIAL INFORMATION PAGE NO.
<S> <C> <C>
Item 1. Financial Statements
Consolidated balance sheet -- March 31, 1997
December 31, 1996 and March 31, 1996............. 3.
Consolidated statement of income -- three months
ended March 31, 1997 and 1996.................... 4.
Consolidated statement of cash flows -- three
months ended March 31, 1997 and 1996............. 5.
Notes to consolidated financial statements --
March 31, 1997................................... 6.
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Position.................. 7- 12.
</TABLE>
<TABLE>
<CAPTION>
PART II OTHER INFORMATION
<S> <C> <C>
Item 1. Legal Proceedings.................................. 13.
Item 2. Changes in Securities.............................. 13.
Item 3. Defaults on Senior Securities...................... 13.
Item 4. Submission of Matters to a Vote of Security
Holders........................................... 13.
Item 5. Other Information.................................. 13.
Item 6. Exhibits and Reports on Form 8-K................... 13.
</TABLE>
SIGNATURES................................................... 14.
- 2 -
<PAGE>
<TABLE>
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
FORT WAYNE NATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
<CAPTION>
March 31 Dec 31 March 31
1997 1996 1996
__________ __________ __________
(In thousands)
<S> <C> <C> <C>
ASSETS
Cash and due from banks.............. $ 177,720 $ 191,913 $ 145,190
Federal funds sold and securities
purchased under agreements to
resell............................. 3,925 56,075 11,000
Interest-bearing deposits with banks. 300 376 214
Investment securities................ 940,586 974,608 784,073
Loans................................ 1,881,685 1,875,965 1,265,639
Less: Unearned income............. (2,304) (2,220) (3,025)
Allowance for possible
loan losses............... (29,584) (30,307) (20,641)
__________ __________ __________
NET LOANS 1,849,797 1,843,438 1,241,973
Premises and equipment............... 55,304 55,234 34,900
Other assets......................... 103,019 99,653 42,079
__________ __________ __________
TOTAL ASSETS $3,130,651 $3,221,297 $2,259,429
========== ========== ==========
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C> <C>
Deposits:
Noninterest-bearing................ $ 358,851 $ 419,118 $ 272,642
Interest-bearing................... 2,021,407 2,002,773 1,514,583
__________ __________ __________
TOTAL DEPOSITS 2,380,258 2,421,891 1,787,225
Federal funds purchased and
securities sold under agreements
to repurchase...................... 314,203 387,357 188,644
Notes payable - U.S. Treasury and
other borrowings................... 61,758 37,628 22,431
Dividends payable.................... 3,953 3,602 2,747
Accrued liabilities.................. 22,948 19,360 18,059
Subordinated and other long-term
notes.............................. 53,517 58,341 6,400
__________ __________ __________
TOTAL LIABILITIES 2,836,637 2,928,179 2,025,506
Deferred gain on sale of premises.... 894 961 1,160
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:
Series 1 6% convertible issued
and outstanding shares:
March 31, 1997 and
December 31, 1996 - 739,976.. 36,999 36,999 --
Common stock, without par value:
Authorized shares: 20,000,000
Issued and outstanding shares:
March 31, 1997 - 11,722,530;
December 31, 1996 - 11,706,834;
March 31, 1996 - 11,447,454...... 19,538 19,511 19,079
Capital surplus...................... 49,653 49,367 31,704
Retained earnings.................... 184,421 179,052 175,134
Unrealized gain on securities
available-for-sale................. 2,509 7,228 6,846
__________ __________ __________
TOTAL SHAREHOLDERS' EQUITY 293,120 292,157 232,763
__________ __________ __________
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY $3,130,651 $3,221,297 $2,259,429
========== ========== ==========
</TABLE>
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<PAGE>
<TABLE>
FORT WAYNE NATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
<CAPTION>
Three Months
Ended March 31
1997 1996
_______ _______
(In thousands, except
per share data)
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans:
Taxable......................................... $40,748 $27,290
Tax-exempt...................................... 249 210
Interest and dividends on investment securities:
Taxable......................................... 12,264 9,185
Tax-exempt...................................... 2,883 2,647
Interest on federal funds sold and securities
purchased under agreements to resell............ 641 494
Interest on deposits with banks................... 1 3
_______ _______
TOTAL INTEREST INCOME 56,786 39,829
INTEREST EXPENSE
Interest on deposits.............................. 22,114 16,873
Interest on federal funds purchased and
securities sold under agreements to repurchase.. 4,469 2,564
Interest on notes payable -
U.S. Treasury and other borrowings.............. 499 349
Interest on subordinated and other long-term notes 950 207
_______ _______
TOTAL INTEREST EXPENSE 28,032 19,993
_______ _______
NET INTEREST INCOME BEFORE
PROVISION FOR POSSIBLE LOAN LOSSES 28,754 19,836
Provision for possible loan losses............... 1,070 880
_______ _______
NET INTEREST INCOME AFTER PROVISION
FOR POSSIBLE LOAN LOSSES 27,684 18,956
NONINTEREST INCOME
Fiduciary fees.................................... 3,676 2,901
Service charges on deposit accounts............... 1,813 1,267
Other service charges............................. 1,089 602
Net securities gains.............................. 37 378
Other income...................................... 973 618
_______ _______
TOTAL NONINTEREST INCOME 7,588 5,766
NONINTEREST EXPENSE
Salaries and wages................................ 9,227 6,804
Employee benefits................................. 2,285 1,541
Net Occupancy..................................... 1,970 1,364
Equipment expense................................. 1,640 1,173
FDIC assessment................................... 66 8
Amortization of goodwill and other intangibles.... 718 58
Other expense..................................... 5,284 3,826
_______ _______
TOTAL NONINTEREST EXPENSE 21,190 14,774
_______ _______
INCOME BEFORE INCOME TAXES 14,082 9,948
Applicable income taxes........................... 4,765 3,057
_______ _______
NET INCOME $ 9,317 $ 6,891
======= =======
Primary earnings per share........................ $ .74 $ .60
======= =======
Fully diluted earnings per share.................. $ .72 $ .60
======= =======
</TABLE>
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<PAGE>
<TABLE>
FORT WAYNE NATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Three Months
Ended March 31
1997 1996
________ ________
(In thousands)
<CAPTION>
<S> <C> <C>
OPERATING ACTIVITIES
Net income........................................ $ 9,317 $ 6,891
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for possible loan losses............ 1,070 880
Net accretion and amortization of
investment securities....................... 36 26
Net accretion and amortization of loans....... (5) (6)
Provision for depreciation and amortization
of premises and equipment................... 1,512 914
Deferred income taxes......................... 185 (434)
Capitalized originated mortgage
servicing rights............................ (15) (61)
Amortization of capitalized originated
mortgage servicing rights................... 8 1
Amortization of goodwill and Other intangibles 718 58
Amortization of deferred gain on sale
of premises................................. (67) (67)
Gain on sale of investment securities
available-for-sale.......................... (50) (407)
Loss on sale of investment securities
available-for-sale.......................... 13 29
Market value adjustment on investment
securities held for trading purposes........ -- 2,108
Net loss on sale of investment securities
held for trading............................ -- 199
Proceeds from sale of investment securities
held for trading............................ -- 15,242
Purchase of investment securities
held for trading............................ -- (35,236)
Loans originated for resale................... (1,535) (6 488)
Unrealized loss on loans held for sale........ 4 31
Proceeds from sales of loans.................. 8,366 6,365
Net (gain) loss on sale of loans.............. 98 (7)
Net (gain) loss on sale of premises
and equipment............................... (6) 1
(Increase)decrease in other assets............ (1,047) 1,569
Increase in other liabilities................. 3,588 1,207
________ ________
NET CASH PROVIDED BY (USED IN)OPERATING ACTIVITIES 22,190 (7,185)
INVESTING ACTIVITIES
Net decrease in federal funds sold and securities
purchased under agreements to resell............ 52,150 16,150
Net (increase) decrease in interest-bearing
deposits with banks............................. 76 (14)
Proceeds from sales of investment securities
available-for-sale.............................. 15,396 574
Proceeds from maturities of investment securities.
available-for-sale.............................. 33,585 34,304
Purchases of investment securities
available-for-sale.............................. (22,892) (45,305)
Net (increase) decrease in loans.................. (14,357) 10,599
Proceeds from disposals of premises and equipment. 147 3
Purchase of premises and equipment................ (1,723) (2,154)
________ ________
NET CASH PROVIDED BY INVESTING ACTIVITIES 62,382 14,157
FINANCING ACTIVITIES
Net increase (decrease) in deposits............... (41,633) 19,695
Net decreasein short-term borrowings.............. (49,024) (56,569)
Principal payment on long-term debt............... (4,824) --
Issuance of common stock.......................... 8 --
Proceeds from exercise of stock options........... 305 233
Cash dividends paid on preferred stock............ (555) --
Cash dividends paid on common stock............... (3,042) (2,743)
________ ________
NET CASH USED IN FINANCING ACTIVITIES (98,765) (39,384)
________ ________
DECREASE IN CASH AND CASH EQUIVALENTS (14,193) (32,412)
Cash and cash equivalents at beginning of period.. 191,913 177,602
________ ________
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 177,720 $145,190
======== ========
</TABLE>
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<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 1996 Annual
Report to Shareholders.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principals for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary for
a fair presentation have been made. Operating results for the three-month
period ended March 31, 1997 are not necessarily indicative of the results that
may be expected for the year ending December 31, 1997.
2. Recently Adopted Accounting Standard
In February 1997, the Financial Accounting Standards Board issued Statement
128, "Earnings per Share," which is required to be adopted on December 31,
1997. At that time, the Company will be required to change the method
currently used to compute earnings per share and to restate all prior periods.
Under the new requirements for calculating primary earnings per share, the
dilutive effect of stock options will be excluded. The impact of Statement
128 on both primary and fully diluted earnings per share is not expected to be
material.
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<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
On June 1, 1996 the Company acquired, through merger of Valley Financial
Services, Inc. (VFS) with and into the Company, all of the issued and
outstanding stock of VFS's only banking subsidiary, Valley American Bank and
Trust Company (Valley). This acquisition has been accounted for as a purchase
for accounting purposes, and accordingly, the results of operations of Valley
have been included in the consolidated results of operations of the Company
from the date of acquisition. Therefore, the consolidated balance sheets as
March 31, 1997 and December 31, 1996 each include the financial position of
Valley, while the consolidated balance sheet as of March 31, 1996 does not
include Valley. In addition, Valley balance sheet amounts are included in
consolidated averages for the first quarter of 1997 and are not included in
the consolidated averages for the first quarter of 1996. Similarly, the
consolidated results of operations for the three-month period ended March 31,
1997 include the results of operations of Valley for that period while the
consolidated results of operations for the three-month period ended March 31,
1996 does not include the results of operations of Valley.
Results of Operations
Net income for the first quarter of 1997 amounted to $9.3 million resulting in
primary earnings per share of $.74. This represents an increase of $2.4
million or 35.2% over the net income of $6.9 million and primary earnings per
share of $.60 for the first quarter of 1996.
The net interest margin, measured on a fully taxable equivalent basis,
increased by 12 basis points to 4.30% for the first quarter of 1997 from the
4.18% in the first quarter of 1996. Substantially all of the increase in the
net interest margin was attributable to increased yields on the Company's loan
and investment portfolios as the cost of interest-bearing liabilities remained
virtually unchanged for the first quarter of 1997 compared to the first
quarter of 1996.
The Company uses exchange traded financial futures and options as a part of
its overall interest rate risk management. At March 31, 1997, the Company had
790 Eurodollar contracts outstanding to hedge liability accounts as compared
to 704 contracts at December 31, 1996 and 633 contracts at March 31, 1996.
The net decrease to net interest income from Eurodollar futures contracts was
$153,000 and $158,000 for the three months ended March 31, 1997 and 1996,
respectively.
- 7 -
<PAGE>
As a result of management's quarterly review of the adequacy of the allowance
for possible loan losses, the Company provided $1,070,000 for possible loan
losses during the first quarter of 1997, a slight decrease from the $1,128,000
provided in the fourth quarter of 1996 yet $190,000 over the amount provided
in the first quarter of 1996.
The Company's noninterest income for the first quarter of 1997 reflected a
$1.8 million or 31.6% increase from the first quarter of 1996 with Valley
contributing $1.4 million to this increase. Fiduciary fees increased
$775,000, or 26.7%, of which $450,000 was earned by Valley and the remaining
11.2% increase was the result of increased assets under management. Service
charges on deposits increased $546,000 or 43.1%. Excluding the $515,000 in
services charges on deposits earned by Valley for the first quarter of 1997,
this category showed an increase of $31,000 or 2.5%. Other service charges
and other income increased by $487,000, or 80.9%, and $355,000, or 57.4%,
respectively. Of these increases, Valley contributed $313,000 and $138,000
respectively. The remaining increase in other service charges is attributable
to increases in general banking fees of $87,000 and data processing fees of
$82,000 while the remaining increase in other income is attributable to
increases in electronic banking income. During the first quarter of 1997, the
Company also recognized net securities gains of $37,000 as compared to net
securities gains of $378,000 during the first quarter of 1996.
Salaries and wages increased $2.4 million for the first three months of 1997
compared to the same period in 1996, substantially all of which represents
salaries and wages for Valley. Excluding Valley, salaries and wages were
relatively flat as the number of full-time equivalent employees (FTE's),
excluding the 354 FTE's at Valley, decreased from 984 at the end of the first
quarter of 1996 to 970 at the end of the first quarter of 1997 . Employee
benefit expense for the three months ended March 31, 1997, without Valley's
expenses of $596,000, increased by $148,000 or 9.6% from the three months
ended March 31, 1997 due to increased pension expense.
Net occupancy expense for the first quarter of 1997, after deducting Valley's
expenses of $564,000, was $42,000 or 3.1% above the first quarter of 1996.
Equipment expense, after deducting Valley's expenses of $334,000 increased by
$133,000 or 11.3% which reflects increased depreciation and service contract
costs on recent additions to the Company's wide area computer network and the
new loan/teller/platform system.
Amortization of goodwill and other intangibles increased from $58,000 for the
first quarter of 1996 to $718,000 for the first quarter of 1997. This
increase is the result of the amortization of goodwill and other intangibles
recorded in connection with the acquisition of Valley.
- 8 -
<PAGE>
FDIC insurance expense for the first quarter of 1997 increased by $58,000 from
the first quarter of 1996 of which $13,000 was expensed by Valley. This
increase is the result of the recent increase in the insurance premium rate.
Other expense of $5.3 million for the three months ended March 31, 1997
represents a $1.5 million increase over the $3.8 million for the same period
of 1996. However, Valley contributed $1.3 million to the 1997 total and
therefore, excluding Valley, this category increased by 3.4%.
The effective tax rate for the first quarter of 1997 was 33.8% as compared to
30.7% for the first quarter of 1996. The increase in the effective rate is
attributable to a lower level of tax exempt income in 1997 and to the
increase in the amortization of goodwill and other intangibles which is not
deductible for tax purposes.
Financial Condition
Total assets of the Company decreased $91 million at March 31, 1997 when
compared to December 31, 1996 yet increased by $871 million from March 31,
1996. Average daily assets for the first quarter of 1997 of $3.114 billion
were 39.3% above the $2.236 billion for the first quarter of 1996. Total
assets of Valley were $880 million at March 31, 1997 while average total
assets of Valley for the first quarter of 1997 were $875 million.
Loans, net of unearned discount as of March 31, 1997 were $5.6 million above
the amount outstanding on December 31, 1996, including an increase of $4.4
million in the residential mortgage loan category. The overall loan growth
was achieved despite the sale of the Company's mobile home loan portfolio
which totaled $6.9 million and the sale of $1.6 million in fixed rate mortgage
loans. Loans, net of unearned discount as of March 31, 1997 were $616.8
million above March 31, 1996. Excluding the $539.2 million of loans
outstanding at Valley as of March 31, 1997, loans outstanding increased by
$77.6 million or 5.8% with residential mortgage loans increasing by $28.9
million or 8.9%, construction and land development loans increasing by $18.7
million or 66.9%, and commercial mortgage loans increasing by $12.6 million or
5.3%.
Average loans outstanding for the first quarter of 1997 were $1.870 billion,
an increase of $30.1 million from the fourth quarter of 1996 and $618.6
million over the first quarter of 1996. Average loans outstanding at Valley
amounted to $539.8 million and $530.9 million for the first quarter of 1997
and the fourth quarter of 1996, respectively.
The Company's investment portfolio at both March 31, 1997 and December 31,
1996 was comprised entirely of investment securities available-for-sale while
at March 31, 1996 the portfolio included $38.9 million of investment
securities held for trading purposes with the remainder of the portfolio
available-for-sale. The net unrealized gain, net of taxes, on securities
available-for-sale was $2.5 million at March 31, 1997, $7.2 million at
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<PAGE>
December 31, 1996 and $6.8 million at March 31, 1996.
Available-for-sale securities, excluding the market valuation adjustment,
decreased $26.1 million from December 31, 1996 as the result of the increased
loan demand noted above. On average for first quarter of 1997, investments
available-for-sale were $229.3 million above the same period last year with
average investments available-for-sale at Valley accounting for $188.7 million
of this increase.
Federal funds sold decreased by $52.5 million as of March 31, 1997 compared to
year-end 1996. Average federal funds sold also decreased $15.0 million for
the three months ended March 31, 1997 from the same period in 1996.
The allowance for possible loan losses, which is established through a
provision for possible loan losses charged against income, is maintained at a
level believed adequate by management to absorb estimated probable loan
losses. The allowance for possible loan losses amounted to $29.6 million at
March 31, 1997, $30.3 million at December 31, 1996 and $20.6 million at
March 31, 1996. This resulted in a ratio of the allowance to total loans
outstanding of 1.57% at March 31, 1997, 1.62% at December 31, 1996 and 1.63%
at March 31, 1996.
The Company's nonaccrual loans, accruing loans past due 90 days or more,
restructured loans and other real estate are summarized as follows (dollars in
thousands).
<TABLE>
NONPERFORMING ASSET TABLE
<CAPTION>
MAR 31, 1997 DEC 31, 1996 MAR 31, 1996
_____________ ____________ _____________
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Nonaccrual Loans $ 7,601 $ 7,717 $ 20,454
90 Days Past Due 683 1,804 1,188
Restructured 2,488 2,534 --
____________ ____________ ____________
Total Nonperforming Loans 10,772 12,055 21,642
Other Real Estate 2,493 1,736 406
____________ ____________ ____________
Total Nonperforming Assets $ 13,265 $ 13,791 $ 22,048
============ ============ ============
Nonperforming Loans as a
Percent of Total Loans
Outstanding .57% .64% 1.71%
============ ============ ============
Nonperforming Assets as a
Percent of Total Assets .42% .43% .98%
============ ============ ============
</TABLE>
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<PAGE>
In addition to loans classified as nonperforming at December 31, 1996, the
Company had reported an additional $14.9 million of loans as of that date
where management was closely monitoring the borrower's ability to comply with
payment terms. Through March 31, 1997 this amount has been reduced by
$884,000 representing pay downs or pay-offs of these loans. Management
continues to closely monitor the remaining loans.
Total nonperforming loans decreased by $1.3 million at March 31, 1997 when
compared to December 31, 1996 and $10.9 million from March 31, 1996. The $2.5
million of restructured loans at March 31, 1997 and December 31, 1996
represent restructured loans outstanding at Valley on those dates. The ratio
of nonperforming loans to total loans outstanding stands at .57% as of March
31, 1997, the lowest ratio in the last five years.
The Company had net loan charge-offs of $1.8 million during the first quarter
of 1997. This compares to net charge-offs of $2.9 million during the fourth
quarter of 1996 and $286,000 during the same period in 1996. The increase in
net loan charge-offs from the first quarter of 1996 is due to charge-offs of
loans for which provisions had previously been made.
The Company's total deposits decreased $41.6 million at March 31, 1997 when
compared to December 31, 1996. It is normal for the Company to experience a
decrease in deposits during the first quarter of each year. Total deposits
increased by $593.0 million from the end of the first quarter of 1996 to the
end of the first quarter of 1997, with total deposits outstanding at Valley
accounting for $573.3 million of the increase. Average total deposits for
the first quarter of 1997 are $614.2 million over the same period last year
with average total deposits at Valley contributing $580.8 million to this
increase. Excluding average deposits outstanding at Valley, average
interest-bearing checking accounts decreased by $49.8 million or 26.1% and
average savings and money market accounts decreased by $45.5 million or 16.2%,
while average time deposits increased by $135.7 million or 13.2%. Included
in the time deposit category is the AnydayEveryday account which is priced to
yield a return which is above the average money market rate. Over 58% of the
increase in the time deposit category results from increases in the
AnydayEveryday account.
Short-term borrowings, consisting of federal funds purchased and securities
sold under agreements to repurchase, and notes payable, decreased $49.0
million at March 31, 1997 from December 31, 1996. On average, short-term
borrowings for the first quarter of 1997 were $153.3 million above the same
period in 1996, of which $145.8 was attributable to average short-term
borrowings outstanding at Valley for the first quarter of 1997.
- 11-
<PAGE>
Capital Resources
On June 1, 1996 in connection with the acquisition of Valley, the Company
issued 739,976 shares of 6% Cumulative Convertible Class B Preferred Stock
Series 1 at a stated value of $50 per share and 646,187 shares of common stock
at a price of $30.95 per share. The Series 1 preferred stock qualifies as
Tier 1 capital for purposes of risk-based capital calculations. However, such
shares are not considered common stock equivalents for purposes of the
calculation of primary earnings per share.
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 (dollars in thousands).
<TABLE>
RISK-BASED CAPITAL
<CAPTION>
MAR 31, 1997 DEC 31, 1996 MAR 31, 1996
_____________ _____________ _____________
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Tier I Capital $ 238,217 $ 231,818 $ 223,908
Tier II Capital 24,966 24,831 18,256
____________ ____________ ____________
Total Tier I and
Tier II Capital $ 263,183 $ 256,649 $ 242,164
============ ============ ============
Risk-weighted Assets $ 1,992,788 $ 1,981,147 $ 1,460,639
============ ============ ============
Tier I Capital Ratio 11.95% 11.70% 15.33%
Tier II Capital Ratio 1.26% 1.25% 1.25%
____________ ____________ ____________
Total Tier I and
Tier II Capital
Ratio 13.21% 12.95% 16.58%
============ ============ ============
Tier I Leverage Ratio 7.74% 7.32% 9.92%
============ ============ ============
</TABLE>
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<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 first quarter of 1997.
- 13 -
<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
May 14, 1997 /s/ M. James Johnston
Date M. James Johnston
Chairman of the Board
May 14, 1997 /s/ Karen M. Kasper
Date Karen M. Kasper
Senior Vice President and Treasurer
- 14 -
<PAGE>
FORT WAYNE NATIONAL CORPORATION AND SUBSIDIARIES
FORM 10-Q
EXHIBIT INDEX
<TABLE>
<CAPTION>
Number
Assigned Per
Regulation Sequential
S-K Item 601 Description Page No.
____________ _____________________________________________ _______
<S> <C> <C>
11. Statement RE Computation of Earnings Per Share. 16.
27. Financial Data Schedule. 17.
- 15 -
<PAGE>
</TABLE>
<TABLE>
EXHIBIT 11
FORT WAYNE NATIONAL CORPORATION AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF EARNINGS PER SHARE
(Unaudited)
<CAPTION>
Three Months
Ended Mar 31
________________
1997 1996
_______ _______
(In thousands, except
per share data)
<S> <C> <C>
PRIMARY
Average shares outstanding................... 11,713 11,442
Net effect of dilutive stock options --
based on the treasury stock method using
average market price....................... 158 66
_______ _______
TOTAL 11,871 11,508
======= =======
Net income................................... $ 9,317 $ 6,891
Preferred stock dividends.................... 555 --
_______ _______
Net income applicable to common stock........ $ 8,762 $ 6,591
======= =======
Earnings per common and common share
equivalents................................ $ .74 $ .60
======= =======
FULLY DILUTED
Average shares outstanding................... 11,713 11,442
Net effect of conversion of preferred stock.. 996 --
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.............. 177 66
_______ _______
TOTAL 12,886 11,508
======= =======
Net income................................... $ 9,317 $ 6,891
======= =======
Earnings per common and common share
equivalents................................ $ .72 $ .60
======= =======
</TABLE>
- 16 -
<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 MARCH 31, 1997 AND FOR THE THREE MONTH PERIOD
THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 177,720
<INT-BEARING-DEPOSITS> 300
<FED-FUNDS-SOLD> 39250
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 940,586
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 1,879,381
<ALLOWANCE> 29,584
<TOTAL-ASSETS> 3,130,651
<DEPOSITS> 2,380,258
<SHORT-TERM> 375,961
<LIABILITIES-OTHER> 27,795
<LONG-TERM> 56,517
<COMMON> 19,538
0
36,999
<OTHER-SE> 236,583
<TOTAL-LIABILITIES-AND-EQUITY> 3,130,651
<INTEREST-LOAN> 40,997
<INTEREST-INVEST> 15,147
<INTEREST-OTHER> 642
<INTEREST-TOTAL> 56,728
<INTEREST-DEPOSIT> 57,786
<INTEREST-EXPENSE> 28,032
<INTEREST-INCOME-NET> 28,754
<LOAN-LOSSES> 1,070
<SECURITIES-GAINS> 37
<EXPENSE-OTHER> 21,190
<INCOME-PRETAX> 14,082
<INCOME-PRE-EXTRAORDINARY> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,317
<EPS-PRIMARY> .74
<EPS-DILUTED> .72
<YIELD-ACTUAL> 4.30
<LOANS-NON> 7,601
<LOANS-PAST> 683
<LOANS-TROUBLED> 2,488
<LOANS-PROBLEM> 13,992
<ALLOWANCE-OPEN> 30,307
<CHARGE-OFFS> 2,038
<RECOVERIES> 245
<ALLOWANCE-CLOSE> 29,584
<ALLOWANCE-DOMESTIC> 29,584
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 29,584
</TABLE>
