<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended MARCH 31, 1995
--------------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ------- to ---------------------------
Commission file number 0-8234
----------------------------------------------
MAGNA GROUP, INC.
- ---------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 37-0996453
- ----------------------------- ------------------------------------
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or
organization)
One Magna Place
1401 South Brentwood Boulevard
St. Louis, Missouri 63144-1401
- ---------------------------------------------------------------------
(Address of principal executive offices)
(Zip Code)
(314) 963-2500
- ---------------------------------------------------------------------
(Registrant's telephone number, including area code)
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
----- -----
<TABLE>
<CAPTION>
Title of class of Number of shares
common stock outstanding as of May 10, 1995
- ----------------------------- ------------------------------
<S> <C>
Common stock, $2.00 par value 27,679,910
</TABLE>
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS (UNAUDITED)
Condensed Consolidated Balance Sheets 3
Condensed Consolidated Statements of Income 4
Condensed Consolidated Statements of Cash Flows 5
Notes to Condensed Consolidated Financial Statements 6
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL
CONDITION 7
PART II - OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS 15
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K 15
SIGNATURE PAGE 16
EXHIBIT INDEX 17
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
- ------------------------------
ITEM 1. FINANCIAL STATEMENTS
- ----------------------------
<TABLE>
MAGNA GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS, EXCEPT SHARE DATA)
<CAPTION>
MARCH 31 DECEMBER 31
1995 1994
---------- -----------
<S> <C> <C>
ASSETS
Cash and due from banks $ 208,357 $ 264,434
Federal funds sold 9,758 17,496
Securities:
Held-to-maturity 262,761 267,829
Available-for-sale 921,141 949,345
Loans 3,019,525 2,976,187
Unearned income (6,168) (7,986)
Reserve for loan losses (43,748) (43,991)
---------- ----------
Net Loans 2,969,609 2,924,210
Premises and equipment 76,014 72,986
Other assets 135,227 142,202
---------- ----------
TOTAL ASSETS $4,582,867 $4,638,502
========== ==========
LIABILITIES
Deposits:
Noninterest bearing $ 541,177 $ 595,224
Interest bearing 3,220,139 3,077,531
---------- ----------
Total Deposits 3,761,316 3,672,755
Federal funds purchased and
repurchase agreements 283,107 421,515
Other short-term borrowings 15,000 15,000
Long-term debt 69,399 104,453
Other liabilities 60,153 53,467
---------- ----------
TOTAL LIABILITIES 4,188,975 4,267,190
Commitments and contingent liabilities
STOCKHOLDERS' EQUITY
Preferred stock:
Class B, voting, $20 par value -
2,074 shares issued and outstanding 41 41
Common stock, $2 par value - 27,643,817
and 27,512,462 shares issued and
outstanding, respectively 55,288 55,025
Capital surplus 205,554 203,693
Retained earnings 154,527 148,417
Net unrealized losses on securities (21,518) (35,864)
---------- ----------
TOTAL STOCKHOLDERS' EQUITY 393,892 371,312
---------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $4,582,867 $4,638,502
========== ==========
See accompanying notes.
</TABLE>
3
<PAGE> 4
<TABLE>
MAGNA GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
THREE MONTHS ENDED
MARCH 31
----------------------
1995 1994
---- ----
<S> <C> <C>
Interest Income:
Interest and fees on loans $63,100 $49,654
Securities:
Taxable 17,140 13,927
Tax-exempt 1,810 2,027
------- -------
18,950 15,954
Other interest income 213 46
------- -------
TOTAL INTEREST INCOME 82,263 65,654
Interest Expense:
Deposits 30,058 23,582
Short-term borrowings 4,999 1,343
Long-term debt 1,520 1,381
------- -------
TOTAL INTEREST EXPENSE 36,577 26,306
------- -------
NET INTEREST INCOME 45,686 39,348
Provision for Loan Losses 1,667 1,100
------- -------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 44,019 38,248
Noninterest Income:
Service charges on deposits 5,461 5,037
Trust 2,319 2,247
Securities gains (losses), net 66 (34)
Other 3,235 4,060
------- -------
11,081 11,310
Noninterest Expense:
Employee compensation and
other benefits 18,583 17,927
Net occupancy 3,972 3,846
Equipment 2,202 2,186
FDIC insurance premiums 2,058 1,993
Other 10,474 11,005
------- -------
37,289 36,957
------- -------
INCOME BEFORE INCOME TAXES 17,811 12,601
Income Tax Expense 6,176 3,387
------- -------
NET INCOME $11,635 $ 9,214
======= =======
Average Shares Outstanding 27,694 25,877
Per Share Data:
Net income $ .42 $ .36
===== =====
Dividends declared $ .20 $ .19
===== =====
See accompanying notes.
</TABLE>
4
<PAGE> 5
<TABLE>
MAGNA GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<CAPTION>
THREE MONTHS ENDED
MARCH 31
-----------------------
1995 1994
---- ----
<S> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 20,454 $ 17,946
INVESTING ACTIVITIES
Proceeds from maturities of held-to-maturity
securities 6,999 8,832
Proceeds from sales of held-to-maturity securities 199 -
Purchases of held-to-maturity securities (825) (7,528)
Proceeds from maturities of available-
for-sale securities 40,774 105,837
Proceeds from sales of available-for-
sale securities 15,641 111
Purchases of available-for-sale securities (5,665) (156,587)
Net increase in loans (48,890) (31,910)
Proceeds from sales of foreclosed property 1,475 1,988
Purchases of premises and equipment (5,336) (1,730)
-------- --------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 4,372 (80,987)
FINANCING ACTIVITIES
Net increase (decrease) in deposits 88,649 (4,334)
Cash dividends (5,525) (4,893)
Increase (decrease) in Federal funds
purchased and repurchase agreements (173,408) 16,538
Proceeds from long-term debt - 73,500
Net decrease in other short-term borrowings - (26,739)
Other 1,643 207
-------- --------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (88,641) 54,279
-------- --------
DECREASE IN CASH AND CASH EQUIVALENTS (63,815) (8,762)
Cash and cash equivalents at beginning of period 281,930 204,960
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $218,115 $196,198
======== ========
See accompanying notes.
</TABLE>
5
<PAGE> 6
MAGNA GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE A--BASIS OF PRESENTATION
The unaudited interim condensed consolidated financial
statements of Magna Group, Inc. and its affiliates ("Magna") have
been prepared in accordance with generally accepted accounting
principles for the banking industry 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. Reference is hereby made to the notes to
consolidated financial statements contained in Magna's Annual
Report on Form 10-K for the year ended December 31, 1994. In the
opinion of management, all adjustments considered necessary for a
fair presentation of the unaudited interim condensed consolidated
financial statements have been included therein and are of a
normal recurring nature. The results of operations for the
interim periods presented herein are not necessarily indicative
of the results to be expected for the full year.
NOTE B--CHANGES IN ACCOUNTING METHODS
Magna adopted the provisions of FAS No. 114, "Accounting by
Creditors for Impairment of a Loan," effective January 1, 1995.
Under the standard, a loan is impaired when, based on current
information and events, it is probable that a creditor will be
unable to collect all amounts due according to the contractual
terms of the loan agreement. The standard requires that an
impaired loan be measured based on the present value of expected
future cash flows discounted at the loan's effective interest
rate, or at the loan's observable market price, or, if the loan
is collateral dependent, based on the fair value of the
collateral.
At March 31, 1995, the recorded investment in impaired loans
was $18.5 million. Included in this amount was $8.9 million of
impaired loans for which the reserve for loan losses was $4.9
million and $9.6 million of impaired loans which did not have a
related reserve for loan losses because of adequate collaterali-
zation of the balance.
During the first quarter of 1995, the average balance of
impaired loans was $19.4 million. Interest income
recognized on such loans during the quarter was not
significant.
FAS No. 114 requires that upon adoption, all loans classified
as in-substance foreclosure be reclassified to an appropriate
loan category if the creditor does not have physical possession
of the collateral. In order to present information consistently
for all periods, in-substance foreclosed assets in the amount of
approximately $4 million at December 31, 1994 were reclassified
from other assets to loans.
NOTE C--RECLASSIFICATIONS
Certain amounts in the 1994 financial statements have been
reclassified to conform with the 1995 presentation. Such
reclassifications had no effect on net income.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
- -----------------------------------------------------------
OPERATIONS AND FINANCIAL CONDITION
- ----------------------------------
OVERVIEW
Net income for the first quarter of 1995 was $11.6 million,
or 42 cents per common share, compared with $9.2 million, or 36
cents, for the first quarter of 1994.
The effect of acquisitions consummated in the second and
third quarters of 1994 are reflected in Magna's results of
operations for 1995.
Table 1 summarizes Magna's statement of income and the
change in each category for the periods presented.
<TABLE>
TABLE 1 - - Comparative Statements of Income
(In thousands)
<CAPTION>
Three Months Ended
March 31 Change
------------------ -----------------
1995 1994 Amount Percent
------- ------- ------- -------
<S> <C> <C> <C> <C>
Total interest income
(fully tax-equivalent) . . . . . . . . . . . . . $83,492 $66,997 $16,495 24.6%
Total interest expense. . . . . . . . . . . . . . 36,577 26,306 10,271 39.0
------- ------- -------
Net interest income. . . . . . . . . . . . . . 46,915 40,691 6,224 15.3
Provision for loan losses . . . . . . . . . . . . 1,667 1,100 567 51.5
Noninterest income:
Service charges on deposits. . . . . . . . . . 5,461 5,037 424 8.4
Trust. . . . . . . . . . . . . . . . . . . . . 2,319 2,247 72 3.2
Other. . . . . . . . . . . . . . . . . . . . . 3,235 4,060 (825) (20.3)
------- ------- -------
11,015 11,344 (329) (2.9)
Securities gains(losses), net . . . . . . . . 66 (34) 100 NM
------- ------- -------
Total . . . . . . . . . . . . . . . . . . . 11,081 11,310 (229) (2.0)
------- ------- -------
Noninterest expense:
Employee compensation and
other benefits . . . . . . . . . . . . . . 18,583 17,927 656 3.7
Net occupancy. . . . . . . . . . . . . . . . . 3,972 3,846 126 3.3
Equipment. . . . . . . . . . . . . . . . . . . 2,202 2,186 16 .7
FDIC insurance premiums. . . . . . . . . . . . 2,058 1,993 65 3.3
Other. . . . . . . . . . . . . . . . . . . . . 10,407 10,471 (64) (.6)
------- ------- -------
Total operating expense . . . . . . . . . . . . . 37,222 36,423 799 2.2
Foreclosed property
expense . . . . . . . . . . . . . . . . . . 67 534 (467) (87.5)
------- ------- -------
Total. . . . . . . . . . . . . . . . . . . . . 37,289 36,957 332 .9
------- ------- -------
Income before income taxes. . . . . . . . . . . . 19,040 13,944 5,096 36.5
Less: tax-equivalent adjustment . . . . . . . . . 1,229 1,343 (114) (8.5)
Income tax expense . . . . . . . . . . . . . . . 6,176 3,387 2,789 82.3
------- ------- -------
Net income. . . . . . . . . . . . . . . . . . . . $11,635 $ 9,214 $2,421 26.3
======= ======= =======
<FN>
- -------------------
NM - not meaningful
</TABLE>
The following paragraphs discuss more fully significant changes
and trends as they relate to Magna's results of operations during
the three month period ended March 31, 1995 and its financial
condition, asset quality, capital resources and liquidity as of
March 31, 1995. This discussion should be read in conjunction with
Magna's condensed consolidated financial statements and notes
thereto. The results of operations for the interim periods
presented herein are not necessarily indicative of the results to be
expected for the full year.
7
<PAGE> 8
RESULTS OF OPERATIONS
NET INTEREST INCOME
Fully tax-equivalent net interest income increased 15.3% for the
first quarter of 1995 compared with 1994 and was positively impacted
in 1995 by the effect of acquisitions consummated in 1994, as well
as increased volume of earning assets and a higher interest rate
environment.
The net interest margin for the first quarter of 1995 was 4.54%
compared with 4.34% for the first quarter of 1994 and 4.59% for the
fourth quarter of 1994. The decline in the first quarter of 1995
compared with the fourth quarter of 1994 occurred as Magna's overall
yield on earning assets did not keep pace with the increase in its
cost of funds. Based on the current interest rate environment,
management anticipates continued pressure on the margin, consistent
with what is expected throughout much of the financial services
industry.
PROVISION FOR LOAN LOSSES
The increase in the provision for loan losses in 1995 was
primarily due to increased internal loan growth. Activity in the
reserve for loan losses and nonperforming loan data are presented
and discussed under "ASSET QUALITY."
NONINTEREST INCOME
Total noninterest income was $11.1 million for the first quarter
of 1995 compared with $11.3 million for the first quarter of 1994.
A reduced level of brokerage commissions and insurance-related
income was recorded in the first quarter of 1995 compared with 1994
as a result of slowing market conditions. In addition, higher
interest rates in 1995 resulted in lower volume of fixed rate
mortgage loans originated for resale in the secondary market and a
corresponding decline in fee income related to such activity.
Noninterest income for the first quarter of 1995 was positively
impacted by the effect of the 1994 acquisitions.
For the first quarter of 1995, noninterest income as a percentage
of average assets, on an annualized basis, was .99% compared with
1.11% for the first quarter of 1994.
NONINTEREST EXPENSE
Total noninterest expense was $37.3 million for the first quarter
of 1995 compared with $37.0 million for the first quarter of 1994.
For the first quarter of 1995, noninterest expense as a percentage
of average assets, on an annualized basis, was 3.34% compared with
3.64% for the first quarter of 1994.
8
<PAGE> 9
The increase in employee compensation and other benefits, as well
as in net occupancy, equipment and FDIC insurance premiums for the
first quarter of 1995 compared with 1994 was attributable to the
effect of the acquisitions consummated in 1994, partially offset by
staff reductions and other cost savings associated with
consolidation of certain back-office operations. Normal merit
increases and increases in other benefits also contributed to the
higher level of employee compensation and other benefits in 1995.
Foreclosed property expense for the first quarter of 1995 compared
with 1994 decreased $.5 million, or 87.5%, primarily as a result of
gains recorded on some property sales in 1995.
The increase in the effective tax rates during the first quarter
of 1995 was primarily the result of lower levels of tax-exempt
interest income as a percentage of total interest income.
FINANCIAL CONDITION
GENERAL
Certain components of Magna's consolidated balance sheet at March
31, 1995 compared with December 31, 1994 are presented in summary
form in Table 2 below.
<TABLE>
TABLE 2 -- Selected Comparative Balance Sheet Items
(In thousands)
<CAPTION>
March 31 December 31 Change
1995 1994 Amount Percent
---------- ----------- -------- -------
<S> <C> <C> <C> <C>
Total assets . . . . . . . . . . . . . .$4,582,867 $4,638,502 $(55,635) (1.2)%
Loans, net of
unearned income. . . . . . . . . . . . 3,013,357 2,968,201 45,156 1.5
Investments. . . . . . . . . . . . . . . 1,183,902 1,217,174 (33,272) (2.7)
Deposits . . . . . . . . . . . . . . . . 3,761,316 3,672,755 88,561 2.4
Borrowings . . . . . . . . . . . . . . . 367,506 540,968 (173,462) (32.1)
</TABLE>
LOANS
Loans, net of unearned income, increased 1.5%, or $45.2
million, from year-end 1994 to March 31, 1995 due to Magna's
competitive pricing structure, and strong loan demand in the
commercial, financial and agricultural sector during the first
quarter of 1995 and a seasonal increase in real estate
construction loans.
9
<PAGE> 10
Table 3 presents the composition of the loan portfolio by type
of borrower and major loan category and the percentage of each to
the total portfolio for the periods presented.
<TABLE>
TABLE 3 -- Loan Portfolio Composition
(In thousands)
<CAPTION>
March 31 December 31 March 31
1995 1994 1994
--------------- --------------- ---------------
Commercial borrowers: Amount Percent Amount Percent Amount Percent
- --------------------- ------ ------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Commercial, financial
and agricultural . . . . . . . . . . .$ 522,360 17.4% $ 492,538 16.6% $ 477,316 18.4%
Commercial real estate. . . . . . . . . 922,086 30.6 932,553 31.4 839,100 32.4
Real estate
construction . . . . . . . . . . . . . 148,469 4.9 130,734 4.4 104,598 4.0
---------- ----- ---------- ----- ---------- -----
Total commercial . . . . . . . . . . 1,592,915 52.9 1,555,825 52.4 1,421,014 54.8
---------- ----- ---------- ----- ---------- -----
Consumer borrowers:
- -------------------
1-4 family residential
real estate. . . . . . . . . . . . . . 906,338 30.1 903,082 30.4 767,307 29.6
Other consumer loans,
net of unearned income . . . . . . . . 514,104 17.0 509,294 17.2 404,881 15.6
---------- ----- ---------- ----- ---------- -----
Total consumer . . . . . . . . . . . 1,420,442 47.1 1,412,376 47.6 1,172,188 45.2
---------- ----- ---------- ----- ---------- -----
Total loans, net of
unearned income. . . . . . . . . . .$3,013,357 100.0% $2,968,201 100.0% $2,593,202 100.0%
========== ===== ========== ===== ========== =====
</TABLE>
INVESTMENTS
Total investments decreased 2.7%, or $33.3 million, at March
31, 1995 compared with year-end 1994. This decrease was
primarily the result of proceeds from principal paydowns and
maturities of securities being used to fund loan growth,
partially offset by an improvement in the market value of the
available-for-sale portfolio at March 31, 1995 compared with
year-end 1994.
Table 4 presents the composition of investments and the change
in each category for the periods presented.
<TABLE>
TABLE 4 -- Investment Securities Portfolio Composition
(In thousands)
<CAPTION>
Change
March 31 December 31 -----------------
1995 1994 Amount Percent
---------- ----------- -------- -------
<S> <C> <C> <C> <C>
Held-to-maturity securities . . $ 262,761 $ 267,829 $ (5,068) (1.9)%
Available-for-sale securities. . 921,141 949,345 (28,204) (3.0)
---------- ---------- --------
Total investments . . . . . . $1,183,902 $1,217,174 $(33,272) (2.7)
========== ========== ========
</TABLE>
10
<PAGE> 11
DEPOSITS
Total deposits increased $88.6 million to $3.8 billion at
March 31, 1995 from year-end 1994. The decline in noninterest
bearing deposits during the first quarter of 1995 was due to
seasonal factors which increase demand deposits at the end of a
calendar year. The increase in time deposits during the first
quarter of 1995 was primarily due to higher rates paid on such
deposits as a result of the overall upward shift in the interest
rate environment and Magna's decision to price competitively such
deposits. Management believes that these factors also led to
movement from more liquid savings and market rate deposits to
time deposits during the first quarter of 1995.
Table 5 sets forth the composition of deposits and the changes
in each category for the periods presented.
<TABLE>
TABLE 5 -- Deposit Liability Composition
(In thousands)
<CAPTION>
March 31 December 31
1995 1994 Change
---------------- ----------------- ---------------
Amount Percent Amount Percent Amount Percent
------ ------- ------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Noninterest bearing . . . . . . . . . .$ 541,177 14.4% $ 595,224 16.2% $(54,047) (9.1)%
NOW and other
transaction accounts . . . . . . . . 540,269 14.4 551,246 15.0 (10,977) (2.0)
Savings and market
rate deposits . . . . . . . . . . . 876,413 23.3 920,611 25.1 (44,198) (4.8)
Time deposits less than
$100,000 . . . . . . . . . . . . . . 1,572,427 41.8 1,396,027 38.0 176,400 12.6
Time deposits $100,000
or more. . . . . . . . . . . . . . . 231,030 6.1 209,647 5.7 21,383 10.2
---------- ----- ---------- ----- --------
Total deposits . . . . . . . . . .$3,761,316 100.0% $3,672,755 100.0% $ 88,561 2.4
========== ===== ========== ===== ========
</TABLE>
BORROWINGS
Total borrowings decreased 32.1%, or $173.5 million, from
year-end 1994 to March 31, 1995, primarily due to decreases in
federal funds purchased and repurchase agreements. Contributing
to the decrease in short-term borrowings for the periods compared
was the higher level of deposits and utilization of securities
proceeds to reduce borrowings during the first quarter of 1995.
Long-term debt decreased 33.6%, or $35.1 million, primarily due to
the reclassification of a $35 million repurchase agreement of a
banking subsidiary which had a remaining maturity of less than one
year as of March 31, 1995.
ASSET QUALITY
The credit quality of Magna's loan portfolio remained relatively
stable during the first quarter of 1995 as indicated in Table 6. Magna
does not anticipate any significant losses on the disposition of
other real estate owned at March 31, 1995.
11
<PAGE> 12
Table 6 sets forth a summary of Magna's loan portfolio mix and
nonperforming assets.
<TABLE>
Table 6 - Loan Portfolio Mix and Nonperforming Assets
(In thousands)
<CAPTION>
March 31, 1995 December 31, 1994
------------------------ ------------------------
Loans and Non- Loans and Non-
Foreclosed performing Foreclosed performing
Property Assets Property Assets
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Commercial borrowers:
---------------------
Commercial, financial and
agricultural. . . . . . . . . . . . . . $ 522,360 $ 7,722 $ 492,538 $ 9,713
Commercial real estate . . . . . . . . . 922,086 14,281 932,553 13,365
Real estate construction . . . . . . . . 148,469 2,504 130,734 1,135
---------- ------- ---------- -------
Total commercial . . . . . . . . . . . 1,592,915 24,507 1,555,825 24,213
Consumer borrowers:
-------------------
1-4 family residential
real estate . . . . . . . . . . . . . . 906,338 9,616 903,082 9,534
Other consumer loans, net
of unearned income. . . . . . . . . . . 514,104 2,676 509,294 3,155
---------- ------- ---------- -------
Total consumer . . . . . . . . . . . . 1,420,442 12,292 1,412,376 12,689
---------- ------- ---------- -------
Total loans, net of
unearned income . . . . . . . . . . . . 3,013,357 36,799 2,968,201 36,902
Foreclosed property. . . . . . . . . . . . 7,128 7,128 7,206 7,206
---------- ------- ---------- -------
Total. . . . . . . . . . . . . . . . . . $3,020,485 $43,927 $2,975,407 $44,108
========== ======= ========== =======
Nonaccrual loans . . . . . . . . . . . . . $27,971 $27,184
Loans past due 90 days or more . . . . . . 7,191 8,060
Restructured loans . . . . . . . . . . . . 1,637 1,658
------- -------
Total nonperforming loans. . . . . . . . 36,799 36,902
Foreclosed property. . . . . . . . . . . . 7,128 7,206
------- -------
Total nonperforming assets . . . . . . . $43,927 $44,108
======= =======
Nonperforming loans to
total loans . . . . . . . . . . . . . . 1.22% 1.24%
Nonperforming assets to total
loans and foreclosed property . . . . . 1.45 1.48
</TABLE>
12
<PAGE> 13
Table 7 presents information pertaining to the activity in and
an analysis of Magna's reserve for loan losses for the periods
presented.
<TABLE>
Table 7 - Reserve For Loan Losses
(In thousands)
<CAPTION>
Three Months Ended
March 31
------------------
1995 1994
---- ----
<S> <C> <C>
Balance at beginning of period . . . . . . $43,991 $40,065
Loans charged off:
Commercial borrowers:
Commercial, financial and agricultural . (903) (951)
Commercial real estate . . . . . . . . . (1,330) (895)
Real estate construction . . . . . . . . 0 (104)
------- -------
Total commercial . . . . . . . . . . . (2,233) (1,950)
Consumer borrowers:
1-4 family residential real estate . . . (211) (486)
Other consumer loans . . . . . . . . . . (827) (798)
------- -------
Total consumer . . . . . . . . . . . . (1,038) (1,284)
------- -------
Total charge-offs . . . . . . . . . . (3,271) (3,234)
------- -------
Recoveries of loans previously charged off:
Commercial borrowers:
Commercial, financial and agricultural . 463 1,207
Commercial real estate . . . . . . . . . 453 339
Real estate construction . . . . . . . . 48 1
------- -------
Total commercial . . . . . . . . . . . 964 1,547
Consumer borrowers:
1-4 family residential real estate . . . 133 29
Other consumer loans . . . . . . . . . . 264 301
------- -------
Total consumer . . . . . . . . . . . . 397 330
------- -------
Total recoveries . . . . . . . . . . . 1,361 1,877
------- -------
Net loans charged off . . . . . . . . . . . (1,910) (1,357)
------- -------
Provision for loan losses charged
to operations . . . . . . . . . . . . . . 1,667 1,100
------- -------
Balance at end of period . . . . . . . . . $43,748 $39,808
======= =======
Net loan charge-offs (annualized) to
average loans . . . . . . . . . . . . . . .26% .21%
Reserve for loan losses to total loans . . 1.45 1.54
Reserve for loan losses to
nonperforming loans . . . . . . . . . . . 118.88 90.04
</TABLE>
13
<PAGE> 14
Management believes that the consolidated reserve for loan
losses is adequate to provide for possible losses inherent in the
loan portfolio. However, no assurance can be given that
subsequent changes in economic conditions, risk elements and
other factors will not require significant changes in the level
of the loan loss reserve.
CAPITAL RESOURCES AND LIQUIDITY
CAPITAL
Financial institutions are required to maintain ratios of
capital to assets in accordance with guidelines adopted in 1989
by the Board of Governors of the Federal Reserve System. The
guidelines are commonly known as "Risk-Based Guidelines" as they
define the capital level requirements of a financial institution
based upon the level of credit risk associated with holding
various categories of assets. The Risk-Based Guidelines require
minimum ratios of Tier 1 and Total Capital to risk-weighted
assets of 4% and 8%, respectively. At March 31, 1995, Magna's
Tier 1 and Total Capital ratios were 13.02% and 14.30%,
respectively. Magna's leverage ratio at March 31, 1995 was
8.60%.
DIVIDENDS AND RESOURCE COMMITMENTS
The primary source of funds to Magna on a parent company only
basis consists of dividends and management fees paid by its
banking affiliates. In general, the ability of Magna's banking
affiliates to pay dividends and management fees is subject to
limitations under various laws and regulations, and to prudent
and sound banking principles. Dividends available to Magna from
its banking affiliates without prior regulatory approval amounted
to approximately $156 million at March 31, 1995.
Magna believes that its banking subsidiaries' earnings will be
sufficient to provide capital to fund asset growth and to permit
the distribution of cash dividends to Magna sufficient to meet
Magna's operating and debt service requirements for the
foreseeable future.
14
<PAGE> 15
PART II - OTHER INFORMATION
- ---------------------------
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- ------------------------------------------------------------
(a) The annual meeting of the stockholders of Magna was held
on May 3, 1995.
(b) The following individuals were elected as Class I
directors of Magna to serve a three-year term or until their
successors shall have been duly elected and qualified: James A.
Auffenberg, Jr., C.E. Heiligenstein, Carl G. Hogan, Sr., Ralph
F. Korte and Frank R. Trulaske, III.
<TABLE>
The following sets forth the name of each director of Magna whose
term of office continued beyond the meeting:
<CAPTION>
Class II Directors Class III Directors
------------------ -------------------
<S> <C>
G. Thomas Andes William E. Cribbin
Donald P. Gallop Wayne T. Ewing
Wendell J. Kelley Franklin A. Jacobs
Robert E. McGlynn S. Lee Kling
George T. Wilkins, Jr.
</TABLE>
<TABLE>
(c)(i) The election of five individuals as Class I directors
of Magna was voted upon at the annual meeting. The number of
votes cast for or withheld, and the number of broker non-votes,
with respect to each of the nominees were as follows:
<CAPTION>
Votes Cast Votes Broker
Nominee For Withheld Non-votes
------- ---------- -------- ---------
<S> <C> <C> <C>
James A. Auffenberg, Jr. 24,012,889 603,869 2,227,344
C.E. Heiligenstein 24,010,937 605,821 2,227,344
Carl G. Hogan, Sr. 24,132,616 484,142 2,227,344
Ralph F. Korte 23,843,538 773,220 2,227,344
Frank R. Trulaske, III 24,055,336 561,422 2,227,344
</TABLE>
<TABLE>
(ii) The adoption of The Magna Group, Inc. Employee Stock
Purchase Plan was also voted upon at the annual meeting. The
number of votes cast for, against or abstaining, and the number
of broker non-votes, with respect to adoption of the plan were as
follows:
<CAPTION>
Votes Cast Votes Votes Broker
For Against Abstaining Non-votes
---------- ------- ---------- ---------
<S> <C> <C> <C>
20,875,987 735,286 760,606 4,471,983
</TABLE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(a) Exhibits: See Exhibit Index on page 17 hereof.
(b) Reports on Form 8-K: No reports on Form 8-K were filed by
Magna during the first quarter of 1995.
15
<PAGE> 16
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.
MAGNA GROUP, INC.
----------------------------
(Registrant)
DATE: May 11, 1995 By: /s/ G. Thomas Andes
- ----------------------------- ---------------------------
G. Thomas Andes
Chairman of the Board and
Chief Executive Officer
DATE: May 11, 1995 By: /s/ Luckett G. Maynard
- ----------------------------- ---------------------------
Luckett G. Maynard
Executive Vice President
and Chief Financial Officer
(Principal Financial and
Accounting Officer)
16
<PAGE> 17
<TABLE>
EXHIBIT INDEX
-------------
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
11.1 Computation of Earnings Per Common
Share, filed herewith.
27.1 Financial Data Schedule, filed herewith
</TABLE>
<PAGE> 1
<TABLE>
MAGNA GROUP, INC. Exhibit 11.1
COMPUTATION OF EARNINGS PER COMMON SHARE
(In thousands, except per share data)
<CAPTION>
Three Months Ended March 31
1995 1994
------- ------
<S> <C> <C>
Primary
- -------
Average common shares outstanding 27,583 25,739
Assumed exercise of employee stock options 111 138
------- ------
Total 27,694 25,877
======= ======
Net income $11,635 $9,214
Less preferred stock dividends:
Class B voting preferred (1) (1)
------- ------
Net income $11,634 $9,213
======= ======
Per common share:
Net income $0.42 $0.36
======= ======
Fully Diluted <FA>
- -------------------
Average common shares outstanding 27,583 25,739
Assumed exercise of employee stock options 129 141
Assumed conversion of:
7% convertible subordinated capital notes 932 995
8-3/4% convertible subordinated debentures -- --
------- ------
Average common shares and common
share equivalents 28,644 26,875
======= ======
Net income $11,635 $9,214
Less preferred stock dividends:
Class B voting preferred (1) (1)
Elimination of interest net of related tax effects on:
7% convertible subordinated capital notes 200 212
8-3/4% convertible subordinated debentures -- --
------- ------
Fully diluted net income $11,834 $9,425
======= ======
Per common share:
Net income $0.41 <FA> $0.35 <FA>
======= ======
<FN>
<FA> Inclusion of common share equivalents for the 8-3/4% convertible subordinated
debentures for the three month periods ended March 31, 1995 and 1994 in the
calculation of fully diluted net income per common share results in antidilution,
and therefore, these are excluded from the computation.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
MAGNA GROUP, INC. QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTERLY PERIOD
ENDED MARCH 31, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH REPORT.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 208,357
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 9,758
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 921,141
<INVESTMENTS-CARRYING> 262,761
<INVESTMENTS-MARKET> 263,668
<LOANS> 3,013,357
<ALLOWANCE> 43,748
<TOTAL-ASSETS> 4,582,867
<DEPOSITS> 3,761,316
<SHORT-TERM> 298,107
<LIABILITIES-OTHER> 60,153
<LONG-TERM> 69,399
0
41
<COMMON> 55,288
<OTHER-SE> 338,563
<TOTAL-LIABILITIES-AND-EQUITY> 4,582,867
<INTEREST-LOAN> 63,100
<INTEREST-INVEST> 18,950
<INTEREST-OTHER> 213
<INTEREST-TOTAL> 82,263
<INTEREST-DEPOSIT> 30,058
<INTEREST-EXPENSE> 36,577
<INTEREST-INCOME-NET> 45,686
<LOAN-LOSSES> 1,667
<SECURITIES-GAINS> 66
<EXPENSE-OTHER> 37,289
<INCOME-PRETAX> 17,811
<INCOME-PRE-EXTRAORDINARY> 17,811
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,635
<EPS-PRIMARY> .42
<EPS-DILUTED> .41
<YIELD-ACTUAL> 4.54
<LOANS-NON> 27,971
<LOANS-PAST> 7,191
<LOANS-TROUBLED> 1,637
<LOANS-PROBLEM> 0<F1>
<ALLOWANCE-OPEN> 43,991
<CHARGE-OFFS> 3,271
<RECOVERIES> 1,361
<ALLOWANCE-CLOSE> 43,748
<ALLOWANCE-DOMESTIC> 43,748
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> (0)<F1>
<FN>
<F1>Information not currently available; is reported on an annual basis only.
</FN>
</TABLE>
