<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): JANUARY 13, 1994
FIRST BANK SYSTEM, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 1-6880 41-0255900
(State or other jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification No.)
601 SECOND AVENUE SOUTH, MINNEAPOLIS, MINNESOTA 55402
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 612-973-1111
NOT APPLICABLE
(Former name or former address, if changed since last report)
<PAGE>
Item 5. OTHER EVENTS
On January 13, 1994, First Bank System, Inc. (the "Company") released
its year end 1993 earnings summary to the public. The Company is hereby
filing with the Securities and Exchange Commission a copy of its press
release dated January 13, 1994.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
c.) Exhibits
Exhibit 99.1 Press release of First Bank System, Inc. dated
January 13, 1994.
INDEX TO EXHIBITS
DOCUMENT PAGE NUMBER
99.1 Press release of First Bank System, Inc. dated 3 - 18
January 13, 1994
SIGNATURE
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.
FIRST BANK SYSTEM, INC.
By /s/ Susan E. Lester
----------------------------------
Susan E. Lester
Executive Vice President & Controller
January 18, 1994
2
<PAGE>
NEWS RELEASE
[LOGO]
FIRST BANK SYSTEM
Contact:
-------
601 Second Avenue South Wendy L. Raway John R. Danielson
Minneapolis, MN 55402-4302 Media Relations Investor Relations
(612) 973-2429 (612) 973-2261
FIRST BANK SYSTEM REPORTS STRONG FOURTH QUARTER 1993 EARNINGS
<TABLE>
<CAPTION>
4Q 4Q PERCENT PERCENT
EARNINGS SUMMARY 1993 1992 CHANGE 1993 1992 CHANGE
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
($ in millions, except per share data)
Before merger-related charges and
cumulative effect of accounting changes:
Income $95.9 $64.7 48.2 $348.0 $236.3 47.3
Earnings per common share 0.81 0.54 50.0 2.83 1.96 44.4
Net income 95.9 (17.1) nm 298.0 311.8 (4.4)
Primary earnings per share 0.81 (0.23) nm 2.39 2.67 (10.5)
Dividends paid per common share 0.25 0.225 11.1 1.00 0.88 13.6
Book value per common share (period-end) 18.09 17.09 5.9
Return on average common equity (%) * 18.3 12.7 16.4 12.0
Return on average assets (%) * 1.45 1.07 1.36 1.00
<FN>
* before merger-related charges and cumulative effect of accounting changes
</TABLE>
MINNEAPOLIS, January 13, 1994 -- First Bank System, Inc. (NYSE: FBS) today
reported fourth quarter earnings of $95.9 million, or $0.81 per share, compared
with $64.7 million, or $0.54 per share, before merger-related charges in the
fourth quarter of 1992. Return on assets and return on common equity in the
fourth quarter of 1993 were 1.45 percent and 18.3 percent, respectively,
compared with returns of 1.07 percent and 12.7 percent, before merger-related
charges in the fourth quarter of 1992.
The improvement in fourth quarter 1993 earnings over the same period in
1992 resulted principally from an increase in net interest income on a
taxable-equivalent basis of $30 million, or
(MORE)
<PAGE>
First Bank System Reports 1993 Results
January 13, 1994
Page 2
11.4 percent, and a decrease in provision for credit losses of $12.3 million, or
31.3 percent, excluding 1992 merger-related charges. Net interest margin on a
taxable-equivalent basis for the quarter was 5.00 percent, or 9 basis points
higher than in the fourth quarter of 1992.
Also contributing to the strong results for the fourth quarter of 1993 was
continuing progress on achieving cost savings from the integration of recent
acquisitions. Compared with noninterest expense for the fourth quarter of 1992,
including the operations of Bank Shares Incorporated (BSI) on a pro forma basis
and excluding merger-related charges, noninterest expense for the quarter
declined $28.3 million, or 10 percent. The efficiency ratio, or ratio of
expenses to revenues, for the fourth quarter of 1993 improved to 58.1 percent,
from 64.6 percent for the same quarter last year, excluding merger-related
costs.
Earnings per share in the fourth quarter of 1993 reflect the impact of the
repurchase of 2.3 million average shares in anticipation of the acquisition of
Boulevard Bancorp. As previously announced, First Bank System plans to
repurchase all of the shares to be issued in the transaction, which is expected
to close early in 1994; the repurchased shares will be reissued at the closing
of the Boulevard Bancorp transaction. If these shares had been outstanding
throughout the fourth quarter of 1993, earnings for the quarter would have been
lower by $0.01 per share.
Earnings for the year 1993 totaled $348 million before merger-related
charges, an increase of $111.7 million, or 47.3 percent, from the prior year
before merger-related charges and cumulative effect of accounting changes. On a
per share basis, earnings before merger-related charges were $2.83 per share in
1993, compared with earnings of $1.96 per share before merger-related charges
and cumulative effect of accounting changes in 1992, an increase of 44.4
percent. Return on average assets before merger-related charges was 1.36
percent in 1993, compared with 1.00 percent before merger-related charges and
cumulative effect of accounting changes in 1992. On the same basis, return on
average common equity was 16.4 percent in 1993, compared with 12.0 percent last
year.
(MORE)
<PAGE>
First Bank System Reports 1993 Results
January 13, 1994
Page 3
The improvement in annual earnings reflected an increase in net interest
income on a taxable-equivalent basis of $132.8 million, or 13 percent, and a
decrease in provision for credit losses of $44.6 million, or 26.3 percent,
excluding 1992 merger-related charges. Net interest margin on a
taxable-equivalent basis rose 22 basis points from 1992, to 5.07 percent.
The successful integration of recent acquisitions also contributed to the
strong results for the year. Compared with noninterest expense for 1992,
including the operations of BSI on a pro forma basis and excluding
merger-related charges, noninterest expense for the year declined $76.7 million,
or 6.9 percent. The efficiency ratio, or ratio of expenses to revenues,
excluding merger-related costs, for 1993 improved to 59.8 percent, from 64.7
percent for last year. Average full-time equivalent employees in 1993 totaled
12,300, compared with the 1992 average of 13,503 (pro forma for the BSI
acquisition).
Nonperforming assets dropped to $226 million at December 31, 1993, a
decrease of $40.8 million, or 15.3 percent, from September 30, 1993, and $186.1
million, or 45.2 percent, from the end of 1992. The ratio of the allowance for
credit losses to nonperforming loans continues to indicate strong reserve
coverage, increasing to 269 percent, from 233 percent at the end of third
quarter and 179 percent at December 31, 1992.
First Bank System's Chairman, President and Chief Executive Officer, John
F. Grundhofer, said, "The year 1993 has been very good for First Bank System.
We substantially completed the integration of three major acquisitions, and our
noninterest expense level reflects significant cost take-outs relating to the
consolidation. We continue to make progress toward achieving our goal of an
efficiency ratio in the low-50's. We have reached the first milestone by
breaking through the 60 percent level, reducing our efficiency ratio to 58.1
percent for the fourth quarter and 59.8 percent for the year." Grundhofer
added, "We also continue to see significant improvements in credit quality, as
evidenced by our lower provision for losses, reduced net charge-offs and a
(MORE)
<PAGE>
First Bank System Reports 1993 Results
January 13, 1994
Page 4
declining level of nonperforming assets. With our integration efforts largely
behind us, we are now well positioned to leverage our technology with growth in
our core businesses."
Reported net income for 1993 was $298 million ($2.39 per share), after
merger-related charges of $50 million ($0.44 per share), on an after-tax basis,
recorded in the second quarter in connection with the acquisition of Colorado
National Bankshares (CNB). Reported net income for 1992 was $311.8 million
($2.67 per share), including income related to the cumulative effect of changes
in accounting principles of $157.3 million ($1.49 per share) and merger-related
charges of $81.8 million ($0.78 per share), on an after-tax basis.
Results for 1993 and 1992 have been restated to reflect the acquisition of
CNB on May 28, 1993, which was accounted for using the pooling-of-interests
method. Earnings for 1993 include the results of BSI, which was acquired on
December 31, 1992 and accounted for using the purchase method.
In September of 1993, First Bank System announced that it had agreed to
purchase Boulevard Bancorp, Inc. of Chicago, a commercial bank holding company
with $1.7 billion in assets and $1.2 billion in deposits. In December of 1993,
First Bank System announced agreements to purchase two additional institutions.
First Financial Investors, Inc. is the holding company of St. Louis Bank for
Savings, FSB, of Duluth, Minnesota, with $200 million in assets; and United Bank
of Bismarck is located in North Dakota, with $123 million in assets. The three
acquisitions are expected to close late in the first quarter or early in the
second quarter of 1994. In January of 1994, First Bank System announced that it
has agreed to purchase the domestic corporate trust business of J.P. Morgan &
Co., Inc.; this transaction is expected to close late in the second quarter of
1994.
(MORE)
<PAGE>
First Bank System Reports 1993 Results
January 13, 1994
Page 5
<TABLE>
<CAPTION>
INCOME STATEMENT HIGHLIGHTS
- ---------------------------------------------------------------------------------------------------------
(Taxable-equivalent basis, $ in millions) 4Q 4Q PERCENT PERCENT
1993 1992 CHANGE 1993 1992 CHANGE
------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net interest income $293.3 $263.3 11.4 $1,150.6 $1,017.8 13.0
Provision for credit losses* 27.0 39.3 (31.3) 125.2 169.8 (26.3)
Noninterest income 145.9 137.1 6.4 569.6 535.7 6.3
Noninterest expense* 255.3 258.6 (1.3) 1,028.3 1,003.9 2.4
------------------ ------------------
Income before taxes 156.9 102.5 53.1 566.7 379.8 49.2
Taxable-equivalent adjustment 3.7 4.4 (15.9) 17.7 22.7 (22.0)
Income taxes** 57.3 33.4 71.6 201.0 120.8 66.4
------------------ ------------------
Income before merger-related charges and
cumulative effect of accounting changes 95.9 64.7 48.2 348.0 236.3 47.3
Merger-related charges and cumulative effect
of accounting changes (after-tax) -- (81.8) nm (50.0) 75.5 nm
------------------ ------------------
Net income $95.9 ($17.1) nm $298.0 $311.8 (4.4)
------------------ ------------------
------------------ ------------------
Net interest margin (%) 5.00 4.91 5.07 4.85
Efficiency ratio (%) * 58.1 64.6 59.8 64.7
<FN>
* excluding merger-related charges
** excluding merger-related tax benefits
</TABLE>
Fourth quarter net interest income on a taxable-equivalent basis was $293.3
million, an increase of $30 million, or 11.4 percent, from the fourth quarter of
1992. The improvement in net interest income reflects increases in average
earning assets of $1.9 billion, or 9.1 percent, and average noninterest-bearing
deposits of $2.2 billion, or 41.8 percent. Average earning assets totaled
$23.27 billion in the fourth quarter of 1993, compared with $21.34 billion in
the fourth quarter of 1992. Average loans for the same periods totaled $18.8
billion and $16.3 billion, respectively. Approximately one-third of the
increase in loans and one-half of the increase in noninterest-bearing deposits
during the fourth quarter, as compared with the same period in 1992, were
attributable to cyclical activity in the Company's portfolio of secured loans to
mortgage banking firms and related escrow balances. In the last half of 1993,
this portfolio included a $700 million low margin extension of credit, which is
fully secured by short-term U.S. Treasury securities and is expected to be
outstanding until the third quarter of 1994.
(MORE)
<PAGE>
First Bank System Reports 1993 Results
January 13, 1994
Page 6
Net interest income on a taxable-equivalent basis was $1.15 billion for
1993, an increase of $132.8 million, or 13 percent, from last year. The
improvement in net interest income reflects increases in average earning assets
of $1.7 billion, or 8.2 percent, and average noninterest-bearing deposits of
$1.6 billion, or 33.4 percent. Average earning assets totaled $22.7 billion in
1993, compared with $21.0 billion in 1992. Average loans totaled $17.8 billion
in 1993, compared with $16.3 billion in 1992. About one-fourth of the increase
in loans and one-third of the increase in noninterest-bearing deposits during
the year were attributable to mortgage banking lending activities.
The net interest margin on a taxable-equivalent basis was 5.00 percent in
the fourth quarter of 1993, an increase of 9 basis points from 4.91 percent for
the fourth quarter of 1992. Net interest margin on a taxable-equivalent basis
for the year was 5.07 percent in 1993, an increase of 22 basis points from 4.85
percent for 1992. The improvements in net interest margin from 1992 resulted
generally from decreased funding costs.
<TABLE>
<CAPTION>
NONINTEREST INCOME
- ---------------------------------------------------------------------------------------------------------
($ in millions) 4Q 4Q PERCENT PERCENT
1993 1992 CHANGE 1993 1992 CHANGE
------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Trust fees $37.5 $32.2 16.5 $146.1 $127.8 14.3
Service charges 28.4 27.6 2.9 115.3 108.4 6.4
Credit card fees 37.5 31.9 17.6 137.1 116.9 17.3
Insurance commissions 5.3 6.6 (19.7) 20.9 27.3 (23.4)
Trading account profits 2.2 2.6 (15.4) 10.1 10.5 (3.8)
Investment securities gains -- 0.1 (100.0) 0.3 1.9 (84.2)
Other 35.0 36.1 (3.0) 139.8 142.9 (2.2)
------------------ ------------------
Total noninterest income $145.9 $137.1 6.4 $569.6 $535.7 6.3
------------------ ------------------
------------------ ------------------
</TABLE>
Fourth quarter noninterest income was $145.9 million, an increase of $8.8
million, or 6.4 percent, from the same quarter of 1992. For the year,
noninterest income was $569.6 million, an increase of $33.9 million, or 6.3
percent, from 1992. The increase for both periods resulted
(MORE)
<PAGE>
First Bank System Reports 1993 Results
January 13, 1994
Page 7
generally from higher credit card and trust fees. Trust fees, service charges
and credit card fees for the quarter increased $11.7 million, or 12.8 percent,
from the fourth quarter of 1992, and fees for the year increased $45.4 million,
or 12.9 percent, from 1992. Trust fees in 1993 reflect income from the
corporate trust business units purchased from Bankers Trust Company of
California in July of 1992 and U.S. Bancorp in March of 1993. Most of the
increase in credit card fees, for the quarter and the year, is attributable to
higher volumes for the Company's Corporate Card product. Insurance commissions
were lower in 1993 than in 1992 as a result of the sale of the Montana and Twin
Cities Metro insurance agencies in the fourth quarter of 1992 and first quarter
of 1993, respectively. The 2.2 percent decline in other noninterest income for
the year reflects approximately $28 million in net charges related to the
accelerated amortization of mortgage loan servicing rights due to prepayments in
the Company's mortgage servicing portfolio, partially offset by $11 million in
one-time gains from the sale of assets.
<TABLE>
<CAPTION>
NONINTEREST EXPENSE
- ---------------------------------------------------------------------------------------------------------
($ in millions) 4Q 4Q PERCENT PERCENT
1993 1992 CHANGE 1993 1992 CHANGE
------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Salaries $95.0 $101.6 (6.5) $389.1 $388.7 0.1
Employee benefits 19.6 20.1 (2.5) 86.3 85.5 0.9
Net occupancy 22.8 21.8 4.6 93.4 87.9 6.3
Furniture and equipment 19.2 17.5 9.7 72.7 67.2 8.2
FDIC insurance 11.5 10.4 10.6 46.4 42.2 10.0
Professional services 10.7 10.5 1.9 36.7 38.7 (5.2)
Other real estate* (0.1) 27.3 nm 2.2 41.2 (94.7)
Amortization of goodwill and intangibles 7.7 6.0 28.3 30.6 25.2 21.4
Merger, integration and restructuring -- 84.0 (100.0) 72.2 84.0 (14.0)
Other 68.9 69.8 (1.3) 270.9 253.7 6.8
------------------ ------------------
Total noninterest expense $255.3 $369.0 (30.8) $1,100.5 $1,114.3 (1.2)
------------------ ------------------
------------------ ------------------
Total noninterest expense, excluding
merger-related charges $255.3 $258.6 (1.3) $1,028.3 $1,003.9 2.4
------------------ ------------------
------------------ ------------------
<FN>
* Includes merger-related charges of $26.4 million for the quarter and year ended December 31, 1992.
</TABLE>
(MORE)
<PAGE>
First Bank System Reports 1993 Results
January 13, 1994
Page 8
Fourth quarter noninterest expense was lower by $3.3 million, or 1.3
percent, than in the fourth quarter of 1992, excluding merger-related charges.
Compared with noninterest expense for the fourth quarter of 1992, including the
operations of BSI on a pro forma basis and excluding merger-related charges,
noninterest expense for the quarter declined by $28.3 million, or 10 percent.
Excluding merger-related charges, noninterest expense for 1993 was $1.03
billion, an increase of $24.4 million, or 2.4 percent, over the same period of
1992. Compared with noninterest expense for 1992, including the operations of
BSI on a pro forma basis and excluding merger-related charges, noninterest
expense for the year declined $76.7 million, or 6.9 percent. Generally, the
decrease in expenses for the year reflects success in integrating recent
acquisitions.
Total salaries and benefits expense for the fourth quarter decreased by
$7.1 million, or 5.8 percent, from that of the fourth quarter of 1992. Salaries
and benefits expense for the year was essentially unchanged from that of 1992.
Fourth quarter and full year net occupancy and equipment expense increased over
the same periods in 1992 by $2.7 million, or 6.9 percent, and $11 million, or
7.1 percent, respectively, because of costs associated with acquisitions and
recent investments in technology. The premium expense on FDIC insurance was
higher in both periods in 1993 than in 1992 because of generally higher deposit
levels. Amortization of goodwill and intangibles was higher in 1993 than in
1992 due to the acquisition, on a purchase basis, of BSI and the corporate trust
units.
Fourth quarter provision for credit losses was lower by $12.3 million than
in the fourth quarter of 1992, excluding $13.6 million in 1992 merger-related
charges. For the year, the provision for credit losses decreased by $44.6
million, or 26.3 percent, from 1992, excluding merger-related charges. Fourth
quarter net charge-offs totaled $31 million, compared with $58.3 million in the
fourth quarter of 1992. Commercial and consumer loans net charge-offs for the
quarter were lower than in the fourth quarter of 1992 by $21.8 million, or 73.6
percent, and $5.5 million, or 19.2 percent, respectively. For the year, net
charge-offs totaled $150 million during
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<PAGE>
First Bank System Reports 1993 Results
January 13, 1994
Page 9
1993, down from $203.1 million for 1992. Total commercial loan net charge-offs
for 1993 were lower by $25.7 million, or 28.7 percent, than for the same period
of 1992. Net charge-offs for consumer loans in 1993 were down by $27.4 million,
or 24.1 percent, from 1992. The lower provisions and net charge-offs for the
quarter and the year resulted from improved credit quality.
<TABLE>
<CAPTION>
ALLOWANCE FOR CREDIT LOSSES
- -------------------------------------------------------------------------------
($ in millions)
4Q 4Q
1993 1992 1993 1992
------------------- -------------------
<S> <C> <C> <C> <C>
Balance, beginning of period $427.2 $413.9 $448.0 $426.9
Net charge-offs (recoveries)
Commercial 7.8 29.6 63.9 89.6
Consumer 23.2 28.7 86.1 113.5
------------------- -------------------
Total 31.0 58.3 150.0 203.1
Provision for credit losses* 27.0 52.9 125.2 183.4
Asset acquisition additions -- 39.5 -- 40.8
------------------- -------------------
Balance, end of period $423.2 $448.0 $423.2 $448.0
------------------- -------------------
------------------- -------------------
Net charge-offs to average loans (%) 0.65 1.42 0.84 1.25
Allowance for credit losses to
period-end loans (%) 2.25 2.62
<FN>
* Includes merger-related charges of $13.6 million for the quarter and year
ended December 31, 1992.
</TABLE>
The allowance for credit losses was $423.2 million at December 31, 1993,
down from $427.2 million at September 30, 1993 and $448 million at December 31,
1992. The ratio of allowance for credit losses to nonperforming loans continues
to indicate strong reserve coverage, increasing to 269 percent at the end of the
year, compared with 233 percent at the end of third quarter and 179 percent at
the end of 1992.
(MORE)
<PAGE>
First Bank System Reports 1993 Results
January 13, 1994
Page 10
<TABLE>
<CAPTION>
ASSET QUALITY
- ---------------------------------------------------------------------------------------------
($ in millions)
DEC 31 SEP 30 JUN 30 MAR 31 DEC 31
1993 1993 1993 1993 1992
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nonperforming loans
Commercial and financial $43.1 $52.2 $66.8 $74.3 $84.2
HLTs 20.1 27.4 67.2 56.7 64.4
Commercial real estate 39.1 41.6 55.2 68.3 67.8
Consumer 55.3 62.3 37.5 38.6 33.8
----------------------------------------------------
Total 157.6 183.5 226.7 237.9 250.2
Other real estate 67.4 81.1 99.4 133.1 158.2
Other nonperforming assets 1.0 2.2 2.4 3.4 3.7
----------------------------------------------------
Total nonperforming assets $226.0 $266.8 $328.5 $374.4 $412.1
----------------------------------------------------
----------------------------------------------------
Accruing loans 90 days past due $31.2 $32.1 $25.1 $28.4 $30.2
----------------------------------------------------
----------------------------------------------------
Allowance to nonperforming loans (%) 269 233 192 186 179
Allowance to nonperforming assets (%) 187 160 132 118 109
Nonperforming assets to loans
plus ORE (%) 1.20 1.43 1.82 2.20 2.39
</TABLE>
Nonperforming assets at December 31, 1993 totaled $226 million, down by
$40.8 million, or 15.3 percent, from the end of third quarter, and by $186.1
million, or 45.2 percent, from the total at December 31, 1992. The ratio of
nonperforming assets to loans and other real estate improved to 1.20 percent at
December 31, 1993, from 1.43 percent at September 30, 1993 and 2.39 percent at
December 31, 1992.
During the fourth quarter of 1993, nonperforming loans decreased $25.9
million, or 14.1 percent and other real estate decreased $13.7 million, or 16.9
percent, generally the result of repayments of loans and sales of properties.
A significant change in the balance of nonperforming assets at December 31,
1993, as compared with the end of 1992, occurred in other real estate, which was
down $90.8 million, or 57.4 percent, principally due to sales of properties.
Nonperforming HLT loans decreased primarily because one large loan, placed on
nonaccrual in December of 1992, was paid in full in the third quarter of 1993.
The increase in nonperforming consumer loans during the year resulted
(MORE)
<PAGE>
First Bank System Reports 1993 Results
January 13, 1994
Page 11
from the purchase in the third quarter of 1993 of $25.7 million of delinquent
residential mortgages in connection with a sale of mortgage loan servicing
rights. These loans are supported by government-sponsored mortgage insurance.
On December 31, 1993, First Bank System adopted Statement of Financial
Accounting Standards (SFAS) No. 115, "Accounting for Certain Investments in Debt
and Equity Securities," which requires that investments in debt and equity
securities be classified into one of three categories, trading,
held-to-maturity, or available-for-sale. At year-end 1993, the entire
investment portfolio was classified as available for sale, which requires that
the securities be accounted for at their current market value with unrealized
holding gains or losses reported as a component of shareholders' equity. The
related after-tax unrealized gain included in shareholders' equity at December
31, 1993 was $34 million; the adoption of SFAS 115 had no effect on 1993
earnings.
Capital ratios at December 31, 1993 reflect the impact of recent share
repurchases. At year-end 1993, the common-equity-to-assets ratio was 7.5
percent, slightly below the ratio of 7.7 percent at the end of third quarter,
but above the bank peer group average of 7.3 percent at September 30, 1993, as
well as the Company's ratio of 7.3 percent at December 31, 1992. Shareholders'
equity-to-assets at December 31, 1993 was 8.5 percent, compared with 8.8 percent
at the end of third quarter, 8.7 percent at the end of 1992 and a peer group
average of 7.9 percent at September 30, 1993.
(MORE)
<PAGE>
First Bank System Reports 1993 Results
January 13, 1994
Page 12
<TABLE>
<CAPTION>
CAPITAL POSITION
- ---------------------------------------------------------------------------------------------
(Percent)
DEC 31 SEP 30 JUN 30 MAR 31 DEC 31
1993 1993 1993 1993 1992
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Common equity to assets 7.5 7.7 7.6 7.7 7.3
Tangible common equity to assets 6.9 7.1 7.0 7.1 6.7
Total shareholders' equity to assets 8.5 8.8 9.1 9.2 8.7
Tier 1 capital ratio 9.2 9.5 9.5 9.8 9.5
Total capital ratio 13.3 13.9 13.0 12.9 12.6
Leverage ratio 7.6 8.0 8.1 8.2 7.8
</TABLE>
During 1993, First Bank System announced plans to repurchase up to $275
million of its common stock, including all of the approximately 6.5 million
shares to be issued in the acquisition of Boulevard Bancorp. At December 31,
1993, $187.1 million in common stock had been repurchased.
In September of 1993, First Bank System announced intentions to repurchase
$125 million of its preferred stock. During the fourth quarter of 1993, the
entire $100 million outstanding amount of the Adjustable Rate Cumulative
Preferred Stock, Series 1983A, was redeemed and an additional $15.2 million of
Preferred Stock Series 1991A and 1989B was repurchased. The remaining $9.8
million of preferred stock may be repurchased from time to time.
First Bank System is a regional bank holding company headquartered in
Minneapolis. The Company provides complete financial services to individuals
and institutions through 9 banks and other financial companies with more than
200 offices, primarily in Minnesota, Colorado, Montana, North Dakota, South
Dakota and Wisconsin.
###
<PAGE>
First Bank System, Inc. and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
Year Ended
--------------------------
(In Millions, Except Per-Share Data) December 31 December 31
(Unaudited) 1993 1992
- ----------------------------------------------------------------------------------------------------
<S> <C> <C>
INTEREST INCOME
Loans $1,398.6 $1,418.8
Investment securities:
Taxable 218.2 186.4
Exempt from federal income taxes 14.6 12.0
Trading account 4.6 6.4
Federal funds sold and resale agreements 23.7 46.2
Deposits with banks 2.1 11.5
- ----------------------------------------------------------------------------------------------------
Total Interest Income 1,661.8 1,681.3
INTEREST EXPENSE
Deposits 423.7 568.7
Federal funds purchased and repurchase agreements 31.8 37.1
Other short-term funds borrowed 19.0 14.3
Long-term debt 54.4 66.1
- ----------------------------------------------------------------------------------------------------
Total Interest Expense 528.9 686.2
- ----------------------------------------------------------------------------------------------------
NET INTEREST INCOME 1,132.9 995.1
Provision for credit losses (in 4Q 92, includes $13.6
merger-related) 125.2 183.4
- ----------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 1,007.7 811.7
NONINTEREST INCOME
Trust fees 146.1 127.8
Service charges on deposit accounts 115.3 108.4
Credit card fees 137.1 116.9
Insurance commissions 20.9 27.3
Trading account profits and commissions 10.1 10.5
Investment securities gains 0.3 1.9
Other 139.8 142.9
- ----------------------------------------------------------------------------------------------------
Total Noninterest Income 569.6 535.7
NONINTEREST EXPENSE
Salaries 389.1 388.7
Employee benefits 86.3 85.5
Net occupancy 93.4 87.9
Furniture and equipment 72.7 67.2
FDIC insurance 46.4 42.2
Professional services 36.7 38.7
Other real estate (in 4Q 92, includes $26.4 merger-related) 2.2 41.2
Data processing 27.0 28.3
Other personnel costs 27.5 20.2
Amortization of goodwill and other intangible assets 30.6 25.2
Merger, integration and restructuring 72.2 84.0
Other 216.4 205.2
- ----------------------------------------------------------------------------------------------------
Total Noninterest Expense 1,100.5 1,114.3
- ----------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT
OF CHANGES IN ACCOUNTING PRINCIPLES 476.8 233.1
Applicable income taxes (credit) 178.8 78.6
- ----------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES 298.0 154.5
Cumulative effect of changes in accounting principles -- 157.3
- ----------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $298.0 $311.8
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
NET INCOME (LOSS) APPLICABLE TO COMMON EQUITY $270.2 $281.6
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
EARNINGS (LOSS) PER COMMON SHARE:
Primary average common and common equivalent shares 113,075,429 105,361,022
Primary income (loss) before cumulative effect of
changes in accounting principles $2.39 $1.18
Cumulative effect of changes in accounting principles -- 1.49
- ----------------------------------------------------------------------------------------------------
Primary net income (loss) $2.39 $2.67
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
Fully diluted average common and common equivalent shares 116,794,358 109,671,248
Fully diluted income (loss) before cumulative effect of
changes in accounting principles $2.38 $1.21
Cumulative effect of changes in accounting principles -- 1.43
- ----------------------------------------------------------------------------------------------------
Fully diluted net income (loss) $2.38 $2.64
- ----------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------
</TABLE>
First Bank System, Inc. and Subsidiaries
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------------------------------------------------
(In Millions, Except Per-Share Data) December 31 September 30 June 30 March 31 December 31
(Unaudited) 1993 1993 1993 1993 1992
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INTEREST INCOME
Loans $352.6 $353.9 $348.6 $343.5 $342.0
Investment securities:
Taxable 46.9 52.9 58.4 60.0 48.7
Exempt from federal income taxes 4.7 3.2 3.3 3.4 2.2
Trading account 1.1 1.3 1.2 1.0 1.2
Federal funds sold and resale agreements 5.7 3.5 5.9 8.6 10.5
Deposits with banks -- 0.1 -- 2.0 2.8
- ----------------------------------------------------------------------------------------------------------------------------------
Total Interest Income 411.0 414.9 417.4 418.5 407.4
INTEREST EXPENSE
Deposits 94.0 102.1 107.0 120.6 116.2
Federal funds purchased and repurchase agreements 7.6 9.0 7.5 7.7 12.3
Other short-term funds borrowed 4.9 5.1 5.1 3.9 5.1
Long-term debt 14.9 13.4 13.0 13.1 14.9
- ----------------------------------------------------------------------------------------------------------------------------------
Total Interest Expense 121.4 129.6 132.6 145.3 148.5
- ----------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME 289.6 285.3 284.8 273.2 258.9
Provision for credit losses (in 4Q 92, includes $13.6
merger-related) 27.0 27.0 33.1 38.1 52.9
- ----------------------------------------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 262.6 258.3 251.7 235.1 206.0
NONINTEREST INCOME
Trust fees 37.5 36.6 36.5 35.5 32.2
Service charges on deposit accounts 28.4 28.6 28.0 30.3 27.6
Credit card fees 37.5 36.6 34.5 28.5 31.9
Insurance commissions 5.3 5.8 4.5 5.3 6.6
Trading account profits and commissions 2.2 2.4 2.9 2.6 2.6
Investment securities gains -- -- -- 0.3 0.1
Other 35.0 32.0 34.1 38.7 36.1
- ----------------------------------------------------------------------------------------------------------------------------------
Total Noninterest Income 145.9 142.0 140.5 141.2 137.1
NONINTEREST EXPENSE
Salaries 95.0 97.3 97.3 99.5 101.6
Employee benefits 19.6 20.0 21.9 24.8 20.1
Net occupancy 22.8 22.8 23.2 24.6 21.8
Furniture and equipment 19.2 17.8 18.5 17.2 17.5
FDIC insurance 11.5 11.4 11.7 11.8 10.4
Professional services 10.7 9.1 8.6 8.3 10.5
Other real estate (in 4Q 92, includes $26.4 merger-related) (0.1) 2.2 0.9 (0.8) 27.3
Data processing 4.7 5.8 8.4 8.1 6.5
Other personnel costs 8.5 7.2 6.6 5.2 5.6
Amortization of goodwill and other intangible assets 7.7 7.7 7.7 7.5 6.0
Merger, integration and restructuring -- -- 72.2 -- 84.0
Other 55.7 54.4 55.0 51.3 57.7
- ----------------------------------------------------------------------------------------------------------------------------------
Total Noninterest Expense 255.3 255.7 332.0 257.5 369.0
- ----------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT
OF CHANGES IN ACCOUNTING PRINCIPLES 153.2 144.6 60.2 118.8 (25.9)
Applicable income taxes (credit) 57.3 53.5 26.7 41.3 (8.8)
- ----------------------------------------------------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF CHANGES IN
ACCOUNTING PRINCIPLES 95.9 91.1 33.5 77.5 (17.1)
Cumulative effect of changes in accounting principles -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) $95.9 $91.1 $33.5 $77.5 ($17.1)
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
NET INCOME (LOSS) APPLICABLE TO COMMON EQUITY $90.4 $83.7 $26.1 $70.0 ($24.5)
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
EARNINGS (LOSS) PER COMMON SHARE:
Primary average common and common equivalent shares 111,278,886 113,721,471 113,392,157 113,982,746 106,169,880
Primary income (loss) before cumulative effect of
changes in accounting principles $0.81 $0.74 $0.23 $0.61 ($0.23)
Cumulative effect of changes in accounting principles -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Primary net income (loss) $0.81 $0.74 $0.23 $0.61 ($0.23)
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
Fully diluted average common and common equivalent shares 114,983,271 117,818,585 113,471,564 118,084,115 106,810,042
Fully diluted income (loss) before cumulative effect of
changes in accounting principles $0.80 $0.73 $0.23 $0.61 ($0.23)
Cumulative effect of changes in accounting principles -- -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------------------
Fully diluted net income (loss) $0.80 $0.73 $0.23 $0.61 ($0.23)
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
First Bank System, Inc. and Subsidiaries
CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEET
<TABLE>
<CAPTION>
December 31 September 30 June 30 March 31 December 31
(In Millions, Unaudited) 1993 1993 1993 1993 1992
- -----------------------------------------------------------------------------------------------------------------------
ASSETS
<S> <C> <C> <C> <C> <C>
Investment securities:
U.S. Treasury $ 1,664 $ 1,754 $ 1,849 $ 1,820 $ 1,689
State & political subdivisions 170 179 186 186 146
Mortgage-backed securities, U.S. agencies and other 1,686 1,829 1,980 1,953 1,363
- -----------------------------------------------------------------------------------------------------------------------
Total Investment Securities 3,520 3,762 4,015 3,959 3,198
Securities held for sale 47 176 243 164 24
Trading account securities 125 139 108 97 106
Deposits with banks -- 1 -- 229 300
Federal funds sold and
resale agreements 759 444 797 1,133 1,400
Loans:
Commercial 5,874 5,611 5,600 5,516 5,285
Financial institutions 2,131 1,893 1,191 906 1,166
Agricultural 157 223 200 212 190
Real Estate:
Commercial mortgage 1,501 1,495 1,535 1,509 1,505
Construction 205 199 199 224 224
Consumer:
Residential 3,710 3,538 3,445 3,231 2,957
Credit card 1,707 1,763 1,727 1,738 1,726
Other 3,343 3,261 3,157 3,103 3,062
Lease financing 191 205 238 246 194
- -----------------------------------------------------------------------------------------------------------------------
Total Loans 18,819 18,188 17,292 16,685 16,309
Allowance for credit losses 437 442 448 460 455
- -----------------------------------------------------------------------------------------------------------------------
Net Loans 18,382 17,746 16,844 16,225 15,854
- -----------------------------------------------------------------------------------------------------------------------
TOTAL EARNING ASSETS* 23,270 22,710 22,455 22,267 21,337
Cash and due from banks 1,889 1,710 1,701 1,570 1,568
Other assets 1,544 1,576 1,639 1,676 1,569
- -----------------------------------------------------------------------------------------------------------------------
Total Assets $26,266 $25,554 $25,347 $25,053 $24,019
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Noninterest-bearing deposits $ 7,505 $ 6,585 $ 6,272 $ 5,277 $ 5,291
Interest-bearing deposits:
Interest checking 2,517 2,438 2,428 2,410 2,248
Money market accounts 3,948 3,949 3,874 3,944 3,862
Other savings accounts 1,357 1,365 1,447 1,479 1,172
Savings certificates 4,488 4,744 5,049 5,567 5,114
Certificates over $100,000 1,115 1,167 1,214 1,239 1,312
- -----------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST-BEARING DEPOSITS 13,425 13,663 14,012 14,639 13,708
Short-term borrowings 1,270 1,367 1,192 1,206 1,229
Long-term debt 1,072 916 847 817 881
- -----------------------------------------------------------------------------------------------------------------------
TOTAL INTEREST-BEARING LIABILITIES 15,767 15,946 16,051 16,662 15,818
Other liabilities 769 682 696 799 739
Preferred equity 268 367 379 379 379
Common equity 1,957 1,974 1,949 1,936 1,792
- -----------------------------------------------------------------------------------------------------------------------
Total Liabilities and
Shareholders' Equity $26,266 $25,554 $25,347 $25,053 $24,019
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
<FN>
* Before deducting the allowance for credit losses.
</TABLE>
<PAGE>
First Bank System, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
December 31 (In Millions, Except Shares) 1993 1992
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and due from banks $1,682 $1,916
Federal funds sold 1,032 1,498
Securities purchased under agreements to resell 306 212
Interest-bearing deposits with banks -- 327
Trading account securities 55 94
Available-for-sale securities 3,319 284
Held-to-maturity securities (market value: $3,955) -- 3,912
Loans 18,779 17,076
Less: allowance for credit losses 423 448
- -----------------------------------------------------------------------------------------------------------------------
Net Loans 18,356 16,628
Bank premises and equipment 382 414
Interest receivable 129 148
Customers' liability on acceptances 186 183
Other assets 938 1,009
- -----------------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $26,385 $26,625
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Noninterest-bearing $7,489 $6,011
Interest-bearing 13,542 15,177
- -----------------------------------------------------------------------------------------------------------------------
Total Deposits 21,031 21,188
Federal funds purchased 553 674
Securities sold under agreements to repurchase 369 448
Other short-term funds borrowed 412 328
Long-term debt 1,015 822
Acceptances outstanding 186 183
Other liabilities 574 664
- -----------------------------------------------------------------------------------------------------------------------
Total Liabilities 24,140 24,307
Shareholders' Equity
Preferred stock 266 379
Common stock, par value $1.25 a share-authorized 150,000,000 shares;
issued: 1993-114,793,547 shares; 1992-113,450,425 shares 144 141
Capital surplus 676 658
Retained earnings 1,328 1,140
Less cost of common stock in treasury: 1993-5,391,883 shares (169) --
- -----------------------------------------------------------------------------------------------------------------------
Total Shareholders' Equity 2,245 2,318
- -----------------------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $26,385 $26,625
- -----------------------------------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
First Bank System, Inc. and Subsidiaries
SUPPLEMENTAL FINANCIAL DATA
(Dollars in Millions, Except Per Share Data)
<TABLE>
<CAPTION>
December 31 September 30 June 30 March 31 December 31
1993 1993 1993 1993 1992
----------- ------------ ------- -------- -----------
<S> <C> <C> <C> <C> <C>
Loan Portfolio:
Commercial and Financial $ 8,180 $ 8,057 $ 7,437 $ 6,905 $ 6,807
HLTs 183 134 209 230 284
Commercial Real Estate 1,726 1,731 1,699 1,741 1,773
Consumer 8,690 8,646 8,619 8,042 8,212
------ ------ ------ ------ ------
Total Loans $18,779 $18,568 $17,964 $16,918 $17,076
Ending Common Shares Outstanding 109,401,664 113,233,763 113,054,767 112,242,896 113,450,425
Book Value per Common Share $18.09 $17.72 $17.25 $17.29 $17.09
Intangibles:
Goodwill $168 $170 $173 $174 $175
Other Intangibles 156 153 181 185 188
------ ------ ------ ------ ------
Total Intangibles $324 $323 $354 $359 $363
<CAPTION> Three Months Ended
-----------------------------------------------------------------------
December 31 September 30 June 30 March 31 December 31
1993 1993 1993 1993 1992
----------- ------------ ------- -------- -----------
Net Interest Income* $293.3 $289.6 $289.5 $278.2 $263.3
Net Interest Margin* 5.00% 5.06% 5.17% 5.07% 4.91%
Efficiency Ratio 58.1% 59.2% 60.4%** 61.4% 64.6%**
Interest Yield on Average Loans 7.48% 7.78% 8.16% 8.43% 8.42%
Rate Paid on Average Interest Bearing Lia 3.05% 3.22% 3.31% 3.54% 3.73%
Return on Average Assets 1.45% 1.41% 1.32%** 1.25% 1.07%**
Return on Average Common Equity 18.3% 16.8% 15.7%** 14.7% 12.7%**
Preferred Dividends $5.5 $7.4 $7.4 $7.5 $7.4
<FN>
* On a taxable-equivalent basis
** Excluding merger-related charges
</TABLE>
