______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________________________________________________________
FORM 10-K
(mark one)
[X] Annual Report Pursuant To Section 13 or 15(d) of the Securities Exchange
Act of 1934
________________________________________
For the fiscal year ended December 31, 1993
Commission file number: 0-7931
[ ] Transition Report Pursuant To Section 13 or 15(d) of the Securities
Exchange Act of 1934
________________________________________
FIRST COMMERCE CORPORATION
(exact name of registrant as specified in its charter)
Louisiana 72-0701203
(State of incorporation) (I.R.S. Employer
Identification No.)
210 Baronne Street, New Orleans, Louisiana 70112
(address of principal executive offices and zip code)
Registrant's telephone number, including area code: (504) 561-1371
________________________________________
SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT:
Title of each class:
____________________
Common Stock, $5.00 par value
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
_____ _____
Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy
or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [ ]
____________________
State the aggregate market value of the voting stock held by nonaffiliate
of the Registrant as of February 18, 1994.
Approximately $634,734,320<FN1>
________________________________________
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock as of the latest practicable date.
Common Stock: $5.00 par value; 26,114,248 shares outstanding as of
February 18, 1994.
DOCUMENTS INCORPORATED BY REFERENCE
Part of Form 10-K
Documents Incorporated into which Incorporated
______________________ ______________________
Annual Report to Parts I, II and IV
Stockholders for the year
ended December 31, 1993,
to the extent indicated in
the Form 10-K Cross Reference Index.
Definitive Proxy Statement Part III
______________________________________________________________________________
<FN1> For the purposes of this computation, shares owned by directors and
executive officers have been excluded.
<PAGE>
Form 10-K (Continued)
Cross Reference Index
____________________________________________________________
PART I
Item 1: Business See below
Item 2: Properties See below
Item 3: Legal Proceedings See below
Item 4: Not Applicable -
____________________________________________________________
PART II
Item 5: Market for the Registrant's Common
Stock and Related Stockholder
Matters
Item 6: Selected Financial Data
Item 7: Management's Discussion and
Analysis of Financial Condition
and Results of Operations
Item 8: Financial Statements and
Supplementary Data
Item 9: Not Applicable
The information for items 5 through 8 are
included in First Commerce Corporation's
(FCC) 1993 Annual Report to stockholders
filed as Exhibit 13 herewith and
incorporated herein.
____________________________________________________________
PART III
Item 10: Directors and Executive
Officers of the
Registrant See below
The remaining information for Item 10 and the
information required by Items 11 through 13 is
incorporated by reference to the Registrant's
definitive Proxy Statement for the 1993 Annual
Meeting of Stockholders filed with the
Securities and Exchange Commission.
____________________________________________________________
PART IV
Item 14: Exhibits, Financial Statement
Schedules and Reports on
Form 8-K
(a) 1.Financial Statements - See Item 8.
2.Financial Statement Schedules - All
schedules are omitted, since they
are either not applicable or the
required information is shown in
the financial statements or notes
thereto.
3.Exhibits - Exhibits have been filed
separately with the Commission in
conjunction with this Form 10-K.
Stockholders may obtain copies from
the Registrant's Investor Relations
Department upon written request.
(b) Reports on Form 8-K - The Registrant was not
required to file any reports on Form 8-K during
the three-month period ended December 31, 1993.
<PAGE>
PART I
Item 1
Description of Business
General
First Commerce Corporation (FCC) is a multi-bank holding
company with five wholly-owned bank subsidiaries in Louisiana:
First National Bank of Commerce (FNBC) in New Orleans, City
National Bank of Baton Rouge (CNB), Rapides Bank & Trust Company
in Alexandria (RB&T), The First National Bank of Lafayette (FNBL)
and The First National Bank of Lake Charles (FNBLC).
Effective January 1, 1994, First Acadiana National
Bancshares, Inc. (FANB), the parent company of First Acadiana
National Bank was acquired by FCC for 1,290,145 shares of common
stock. First Acadiana National Bank was merged with FNBL. The
acquisition was accounted for as a pooling-of-interests.
The five banks accounted for 99.3% of the assets of FCC at
December 31, 1993 and substantially all of the net income for
1993. The banks offer customary services of banks of similar
size and similar markets, including numerous types of interest-
bearing and noninterest-bearing deposit accounts, commercial and
installment loans, trust services, correspondent banking services
and safe deposit facilities. For further discussion of FCC's
operations, see the Financial Review section of FCC's 1993 Annual
Report, which is incorporated by reference into Item 7 of this
Annual Report on Form 10-K.
During 1993, FCC or its bank subsidiaries owned seven bank-
related subsidiaries: First Commerce Investment Services, Inc.
(FCIS), Baronne Street Properties, Inc. (BSP), KNW, Ltd. (KNW),
DLC, Ltd. (DLC), First Commerce Community Development Corporation
(FCCDC), First Commerce Service Corporation (FCSC) and New
Orleans Bancshares, Inc. (NOBS). FCIS is a discount brokerage
subsidiary, which was organized under the rules of the Securities
and Exchange Commission in 1985 and is a member of the National
Association of Securities Dealers, Inc. (NASD). BSP is a 1%
general partner and FNBC is a 99% limited partner in DLC and KNW,
Louisiana Partnerships in Commendam, created to manage and sell
foreclosed property. FCIS and BSP are both subsidiaries of FNBC.
In 1992, FCCDC was organized as a Louisiana non-profit
organization under the policy guidelines established by the OCC
for community development corporations. First Commerce developed
this corporation to assist low-to-moderate income individuals to
buy homes. Each of the five subsidiary banks of FCC owns 20% of
FCCDC's outstanding common stock.
FCSC performs services such as audit, credit review, data
processing, accounting, financial reporting and other services
for all other subsidiaries of FCC. NOBS is an inactive company,
organized in 1983 to hold the name "New Orleans Bancshares."
Regulation
Like other bank holding companies in Louisiana, FCC is
subject to regulation by the Louisiana Commissioner of Financial
Institutions and the Federal Reserve Board. Under the terms of
the Bank Holding Company Act of 1956 (the "Act"), as amended, FCC
is restricted to only banking or bank-related activities
specifically allowed by the Act or the Federal Reserve Board.
The Act requires FCC to file required reports with the Federal
Reserve Board. Each of FCC's subsidiary banks is a member of the
Federal Reserve System and is subject to regulation by the
Federal Reserve Board and the FDIC. The four national bank
subsidiaries are also subject to regulation and supervision by
the Comptroller of the Currency, while the state-chartered bank
subsidiary is subject to regulation and supervision by the
Louisiana Commissioner of Financial Institutions.
Payment of Dividends
The primary source of funds for the dividends paid by FCC to
its stockholders and debt service obligations is the dividends it
receives from the bank subsidiaries. The payment of dividends by
FCC's national banks is regulated by the Comptroller of the
Currency. The payment of dividends by FCC's state bank is
regulated by the Louisiana Commissioner of Financial Institutions
and the Federal Reserve Board. Prior approval must be obtained
from the appropriate regulatory authorities before dividends can
be paid if the amount of defined capital, surplus and retained
earnings is below defined regulatory limits. Additionally, the
bank subsidiaries may not pay dividends in excess of their
retained net profits (net income less dividends for the current
and prior two years) without prior regulatory approval. Under
certain circumstances, regulatory authorities may prohibit the
payment of dividends by a bank or its parent holding company.
See Note 16 of Notes to Consolidated Financial Statements, which
is incorporated by reference into Item 8 of this Annual Report on
Form 10-K.
Borrowings by the Company
Federal law prohibits FCC from borrowing from its bank
subsidiaries, unless the borrowings are secured by specified
amounts and types of collateral. Additionally, such secured
loans are generally limited to 10% of each subsidiary bank's
capital and surplus and, in the aggregate with respect to FCC and
all of its subsidiaries, to 20% of each subsidiary bank's capital
and surplus. Further, a bank holding company and its
subsidiaries are prohibited from engaging in certain tie-in
arrangements in connection with any extension of credit, lease or
sale of property or furnishing of services.
Company Support of Bank Subsidiaries
The Financial Institutions Reform, Recovery and Enforcement
Act of 1989 ("FIRREA") contains a "cross-guarantee" provision
which could result in any insured depository institution owned by
FCC (i.e., any bank subsidiary) being assessed for losses
incurred by the FDIC in connection with assistance provided to,
or the failure of, any other depository institution owned by FCC.
In addition, under Federal Reserve Board policy, FCC is expected
to act as a source of financial strength to each of its bank
subsidiaries and to commit resources to support each such bank in
circumstances in which such bank might need such outside support.
The Federal Deposit Insurance Corporation Improvement Act of
1991 (the "1991 Act") provides, among other things, that
undercapitalized institutions, as defined by regulatory
authorities, must submit recapitalization plans, and a parent
company of such an institution must either (i) guarantee the
institution's compliance with the capital plan, up to an amount
equal to the lesser of five percent of the institution's assets
at the time it becomes undercapitalized or the amount of the
capital deficiency when the institution fails to comply with the
plan, or (ii) suffer certain adverse consequences such as a
prohibition of dividends by the parent company to its
shareholders.
Annual Insurance Assessment
FCC's bank subsidiaries are subject to deposit insurance
assessment by the FDIC. These assessments have been rising in
recent years and could increase still further in the future.
Prompt Corrective Action
The 1991 Act and implementing regulations classify banks
into five categories generally relating to their regulatory
capital ratios and institutes a system of supervisory actions
indexed to particular classification. Generally, banks that are
classified as "well capitalized" or "adequately capitalized" are
not subject to the supervisory actions specified in the 1991 Act
for prompt corrective action, but may be restricted from taking
certain actions that would lower their classification. Banks
classified as "undercapitalized", "significantly
undercapitalized" or "critically undercapitalized" are subject to
restrictions and supervisory actions of increasing stringency
based on the level of classification.
Under the present regulation, all five of FCC's Banks are
"well-capitalized". While such a classification would exclude
the Banks from the restrictions and actions envisioned by the
prompt corrective action provisions of the 1991 Act, the
regulatory agencies have broad powers under other provisions of
federal law that would permit them to place restrictions on the
Banks or take other supervisory action regardless of such
classification.
Other Provisions of 1991 Act
In general, the 1991 Act subjected banks and bank holding
companies to significantly increased regulation and supervision.
Other significant provisions of the 1991 Act require the federal
regulators to draft non-capital regulatory measures to assure
bank safety, including underwriting standards and minimum
earnings levels. The legislation further requires regulators to
perform annual on-site bank examinations, places limits on real
estate lending and tightens audit requirements. The 1991 Act and
implementing regulations also impose disclosure requirements
relating to fees charged and interest paid on checking and
deposit accounts.
Miscellaneous
Federal and Louisiana law provide for the enforcement of any
pro rata assessment of stockholders of a bank to cover impairment
of capital stock by sale, to the extent necessary, of the stock
of any assessed stockholder failing to pay the assessment. FCC,
as the stockholder of its bank subsidiaries, is subject to these
provisions.
FCIS is registered as a broker-dealer under the Securities
Exchange Act of 1934, as amended, and is subject to regulation by
the Securities and Exchange Commission and the Louisiana
Commissioner of Securities. FCIS is a member of the NASD and, as
such, is required to belong to the Securities Investor Protection
Corporation, to which FCIS must pay an annual assessment.
Item 2
Properties
FCC's executive offices are located in leased facilities in
the Central Business District of New Orleans. Through its
subsidiaries, FCC also owns or leases its principal banking
facilities and offices in New Orleans, Baton Rouge, Alexandria,
Lafayette and Lake Charles. Of the 108 banking offices open at
the end of 1993, 65 are owned and 43 are leased.
FCSC performs data processing services for FCC and each of
its subsidiaries in a facility in the Metropolitan New Orleans
area, which is owned by FCSC.
Management considers all properties owned or leased to be
suitable and adequate for their intended purposes and considers
the leases to be fair and reasonable. For additional information
concerning premises and information concerning FCC's obligations
under long-term leases, see Note 9 of Notes to Consolidated
Financial Statements, which is incorporated by reference into
Item 8 of this Annual Report on Form 10-K.
Item 3
Legal Proceedings
FCC and its subsidiaries have been named as defendants in
various legal actions arising from normal business activities in
which damages of various amounts are claimed. The amount, if
any, of ultimate liability with respect to such matters cannot be
determined. However, after consulting with legal counsel,
management believes any such liability will not have a material
effect on FCC's consolidated financial condition.
<PAGE>
Item 10.
Executive Officers of the Registrant
Ian Arnof, 54--President, Chief Executive Officer and
Director of FCC since 1983.
Amos T. Beason, 53--Executive Vice President and Chief
Investment Officer of FCC since 1988.
R. Jeffrey Brooks, 45--Executive Vice President and Director
of Strategic Support of FCC since 1993; President and Chief
Operating Officer of FNBL from 1992 to 1993; Senior Vice
President and Bankcard Group Manager of FNBC from 1986 to 1992.
Thomas L. Callicutt, Jr., 46--Senior Vice President,
Controller and Principal Accounting Officer of FCC since 1987.
Michael A. Flick, 45--Executive Vice President of FCC since
1985; Chief Credit Policy Officer of FCC since 1985; Chief
Financial Officer from 1988 to 1992; Secretary to the Board of
Directors since 1987.
Howard C. Gaines, 53--Chairman and Chief Executive Officer
of FNBC since 1988.
Thomas C. Jaeger, 43--Senior Vice President and Chief
Internal Auditor of FCC since 1989. Mr. Jaeger served as Senior
Vice President and Chief Financial Officer of FNBC from 1987 to
1989.
David B. Kelso, 41--Executive Vice President and Chief
Financial Officer of FCC since 1992. Prior to joining FCC, Mr.
Kelso was a consultant with the MAC Group in Washington, D.C. for
more than five years.
Ashton J. Ryan, Jr., 46--President and Chief Operating
Officer of FNBC since 1991. Senior Executive Vice President of
FCC since 1993. From 1981 to 1991, Mr. Ryan was a partner with
Arthur Andersen & Co., CPAs, New Orleans, Louisiana.
Joseph V. Wilson III, 44--Senior Executive Vice President of
FCC since 1993; Executive Vice President of FCC from 1989 to
1992; Executive Vice President--Retail Group of FNBC from 1984 to
1989.
Item 14. (a) 3. Exhibits
3.1 Amended and Restated Articles of
Incorporation of First Commerce
Corporation.
3.2 Amended By-laws of First Commerce
Corporation.
4.1 Indenture between First Commerce
Corporation and Republic
Bank Dallas, N.A., Trustee, including
the form of 12 3/4% Convertible Debenture
due 2000, Series A included as
Exhibit 4.1 to First Commerce Corporation's
Annual Report on Form 10-K for the year
ended December 31, 1985 and incorporated
herein by reference.
4.2 Indenture between First Commerce Corporation
and Republic Bank Dallas, N.A., Trustee,
including the form of 12 3/4% Convertible
Debenture due 2000, Series B included as
Exhibit 4.2 to First Commerce Corporation's
Annual Report on Form 10-K for the year
ended December 31, 1986 and incorporated
herein by reference.
10.1 Amendments numbered 8 and 9 to First
Commerce Corporation 1985 Stock
Option Plan and Form of Nonqualified
Stock Option Ageerement, included as
Exhibit 4-C and 4-D to First Commerce
Corporation's Registration Statement
(Registration No. 2-97152) on
Form S-8, and incorporated herein by
reference.
10.2 Amended First Commerce Corporation 1992
Stock Incentive Plan, Form of Nonqualified
Stock Option Agreement and Form of
Restricted Stock Agreement.
10.3 Amended First Commerce Corporation Supplemental
Tax-Deferred Savings Plan.
10.4 First Commerce Corporation's Sharemax Corporate
Incentive Plan.
10.5 First Commerce Corporation's Chief Executive
Officer Sharemax Plan.
11 Statement Re: Computation of Earnings Per Share.
13 First Commerce Corporation's 1993 Annual Report
to Stockholders.
21 Subsidiaries of First Commerce Corporation.
23 Consent of Arthur Andersen & Co.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 Commerce Corporation
(Registrant)
By /s/ Thomas L. Callicutt, Jr.
Thomas L. Callicutt, Jr.
Senior Vice President, Controller and
Principal Accounting Officer
Date March 24, 1994
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title
__________ _____
<S> <C> <C>
/s/Ian Arnof President and Chief Executive Officer
/s/Hermann Moyse, Jr. Chairman of the Board
/s/David B. Kelso Executive Vice President and Chief
Financial Officer
/s/James J. Bailey III Director
/s/John W. Barton Director
/s/Sydney J. Bsthoff III Director
/s/Robert H. Bolton Director
/s/Frances B. Davis Director By /s/Thomas L. Callicutt, Jr.
Thomas L. Callicutt, Jr.
/s/Laurance Eustis, Jr. Director Attorney-in-Fact
/s/William P. Fuller Director
/s/Arthur Hollins III Director Date: March 24, 1994
/s/F. Ben James, Jr. Director
/s/Erik F. Johnsen Director
/s/J. Merrick Jones, Jr. Director
/s/Edwin Lupberger Director
/s/O. Miles Pollard, Jr. Director
/s/G. Frank Purvis, Jr. Director
/s/Edward M. Simmons Director
/s/H. Leighton Steward Director
/s/J. B. Storey Director
/s/Robert A. Weigle Director
</TABLE>
EXHIBIT 3.1
COMPOSITE ARTICLES OF INCORPORATION
OF
FIRST COMMERCE CORPORATION
ARTICLE I
Name
The name of the Corporation is First Commerce Corporation.
ARTICLE II
Purpose
The purpose of the Corporation is to engage in any lawful
activity for which corporations may be formed under the Business
Corporation Law of Louisiana.
ARTICLE III
Capital
A. The Corporation has authority to issue one hundred
million (100,000,000) shares of $5.00 par value per share Common
Stock and five million (5,000,000) shares of no par value per
share Preferred Stock. (As amended on April 19, 1993.)
B. Shares of the Preferred Stock may be issued from time
to time in one or more classes or series, each of which shall
have such distinctive designation or title and such voting
rights, preferences and relative, optional or other special
rights, and qualifications, limitations or restrictions as shall
be fixed by the Board of Directors of the Corporation prior to
the issuance of any shares thereof by amendment to these Articles
of Incorporation adopted by the Board of Directors.
C. Of the 5,000,000 shares or authorized no par value per
share Preferred Stock, 2,400,000 shares shall constitute a
separate series of Preferred Stock with the voting powers and the
preferences and rights hereinafter set forth. (As amended on
January 15, 1992.)
(1) Designation. The series of Preferred Stock
created hereunder is designated "Cumulative
Convertible Preferred Stock, Series 1992" (the
"1992 Preferred Stock").
(2) Stated Value. The stated value of each share of
1992 Preferred Stock is $25.
(3) Dividend Rights.
(a) The holders of record of the shares of 1992
Preferred Stock are entitled to receive, but only when,
as and if declared by the Board of Directors, in their
discretion, and out of the funds of the Corporation
legally available for that purpose, cumulative cash
dividends at the rate of $1.8125 per annum, payable
quarterly on the first day of January, April, July, and
October in each year, or on such earlier dates as the
Board of Directors may from time to time fix as the
dates for payment of quarterly dividends on the Common
Stock, beginning with the first such date that is at
least 45 days after the date of the original issuance
of the shares. Dividends on each share of 1992
Preferred Stock shall be cumulative from the date of
original issuance thereof whether or not there shall be
funds legally available for the payment of such
dividends. Dividends payable on the 1992 Preferred
Stock (i) for any period other than a full year shall
be computed on the basis of a 360-day year consisting
of twelve 30-day months and (ii) for each full dividend
period shall be computed by dividing the annual
dividend rate by four.
(b) No dividends, in cash or property, may be
declared or paid or set apart for payment on the Common
Stock or on any series of Preferred Stock ranking, as
to dividends, junior to the 1992 Preferred Stock for
any period unless full cumulative dividends for each
previous quarterly dividend period, whether or not
earned or declared, have been or contemporaneously are
declared and paid or declared and a sum sufficient for
the payment thereof set apart for such payment on the
1992 Preferred Stock. If dividends are paid in part
and not in full upon the shares of 1992 Preferred Stock
and on any other Preferred Stock ranking on a parity,
as to dividends, with the 1992 Preferred Stock, such
dividends must be divided pro rata among such parity
shares in proportion to the respective dividends
accrued and unpaid thereon as of the dividend payment
date. Except as otherwise provided in this Section,
holders of shares of the 1992 Preferred Stock are not
entitled to any dividend, whether payable in cash,
property or stock, in excess of the full cumulative
dividend stipulated in Paragrah (a). No interest, or
sum of money in lieu of interest, is payable in respect
of any dividend payment or payments on 1992 Preferred
Stock which may be in arrears.
(4) Redemption.
(a) On or after January 1, 1997, the Corporation
may, at its option, redeem the whole or, from time to
time, any part of the 1992 Preferred Stock at a
redemption price per share equal to the sum of (i) $25
and (ii) all accrued and unpaid dividends thereon to
the date fixed for redemption, whether or not earned or
declared.
(b) If the Corporation redeems fewer than all of
the outstanding shares of 1992 Preferred Stock, it must
select the shares to be redeemed by lot or pro rata, in
such manner as the Board of Directors may determine to
be fair and appropriate. The Board of Directors has
full power and authority, subject to the limitations
and provisions herein contained, to prescribe the
manner in which and the terms and conditions upon which
shares of the 1992 Preferred Stock are to be redeemed.
(c) Notice of redemption must be given by first
class mail, postage prepaid, mailed not fewer than 60
nor more than 90 days before the redemption date, to
each holder of record of shares to be redeemed, at the
holder's address as it appears on the stock register of
the Corporation. Each notice must state: (i) the
redemption date; (ii) the total number of shares of
1992 Preferred Stock to be redeemed and, if fewer than
all the shares held by the holder are to be redeemed,
the number of shares to be redeemed from the holders;
(iii) the redemption price; (iv) the place or places
where certificates for the shares are to be surrendered
for payment of the redemption price; (v) that dividends
on the shares to be redeemed will cease to accrue on
the redemption date; and (vi) that the holder has the
right to convert the shares into Common Stock until the
close of business on the tenth day preceding the
redemption date at the Conversion Price then in effect
and the place where certificates for the shares of the
1992 Preferred Stock may be surrendered for conversion.
(d) Unless the Corporation fails to pay the
redemption price, the right to convert shares of the
1992 Preferred Stock called for redemption shall expire
at the close of business on the tenth day preceding the
date fixed for redemption of such shares, and, from and
after the redemption date, dividends on the shares of
1992 Preferred Stock called for redemption shall cease
to accrue, and such shares shall no longer be deemed to
be outstanding, and all rights of the holders of such
shares as shareholders of the Corporation (except the
right to receive from the Corporation the redemption
price) shall cease. Upon surrender of the certificates
for any shares so redeemed in accordance with the
requirement of the notice of redemption (properly
endorsed or assigned for transfer, if the Board of
Directors of the Corporation so require and the notice
so states), such shares shall be redeemed by the
Corporation at the redemption price. If fewer than all
the shares represented by any such certificates are
redeemed, the Corporation is obligated to issue without
cost to the holder a new certificate representing the
shares not redeemed.
(e) Any shares of 1992 Preferred Stock converted
under Subsection (5), or redeemed or otherwise acquired
by the Corporation, have the status of authorized but
unissued shares of Preferred Stock, without designation
as to series, preferences, limitations or relative
rights until the shares are once more designated as
part of a particular series by the Board of Directors
of the Corporation.
(f) The Corporation may, before the redemption
date specified in the notice of redemption, deposit in
trust for the account of the holders of shares of the
1992 Preferred Stock to be redeemed, with a bank or
trust company in good standing organized under the laws
of the United States of America or of the State of
Louisiana and having capital, surplus and undivided
profits aggregating at least $20,000,000, designated in
the notice of redemption, all funds necessary for the
redemption, together with irrevocable written
instructions authorizing the bank or trust company, on
behalf and at the expense of the Corporation, to have
the notice of redemption mailed as provided in
Paragraph (c) and to include in the notice of
redemption a statement that all funds necessary for the
redemption have been so deposited in trust and are
immediately available. Immediately upon the mailing of
such notice, notwithstanding that any certificate for
shares of 1992 Preferred Stock so called for redemption
has not been surrendered for cancellation, all shares
of 1992 Preferred Stock with respect to which the
deposit has been made shall cease to be outstanding and
all rights with respect to such shares of 1992
Preferred Stock shall terminate other than the right of
the holders thereof to receive from the bank or trust
company, at any time after the time of the deposit, the
redemption price of the shares so to be redeemed, and
the right, if any, to convert the shares into Common
Stock until the close of business on the tenth day
preceding the redemption date; provided, however, that
the Corporation may take any action under this
Paragraph (f) only on or after January 1, 1997. If the
holder of any shares of the 1992 Preferred Stock called
for redemption does not, within four years after the
redemption date, claim the amount deposited for the
redemption thereof, the depositary shall, upon the
request of the Corporation expressed in a resolution of
its board of directors, pay over to the Corporation the
unclaimed amount, which shall then escheat and revert
in full ownership to the Corporation.
(g) Notwithstanding the foregoing provisions of
this Subsection (4), so long as any dividends on the
1992 Preferred Stock are in arrears, the Corporation
may not redeem any shares of the 1992 Preferred Stock
unless all outstanding shares of the 1992 Preferred
Stock are simultaneously redeemed and may not purchase
or otherwise acquire any shares of 1992 Preferred
Stock. The foregoing shall not, however, prevent the
purchase or acquisition of shares of 1992 Preferred
Stock pursuant to a purchase or exchange offer made on
the same terms to holders of all outstanding shares of
1992 Preferred Stock.
(5) Conversion. The holders of shares of the 1992
Preferred Stock have the right, at their option, to convert
all or any part of such shares into shares of Common Stock
of the Corporation at any time before the close of business
on the tenth day preceding the date, if any, fixed for
redemption of those shares, subject to the following terms
and conditions:
(a) The number of shares of Common Stock issuable
upon the conversion of each share of Preferred Stock
shall be equal to $25 divided by the Conversion Price
in effect at the time of conversion determined as
provided below. The Conversion Price at which the
Company is required to deliver shares of Common Stock
upon conversion shall initially be $40.25 per share of
Common Stock. The initial Conversion Price shall be
subject to adjustment from time to time as provided in
Paragraph (e). The Corporation shall make no payment
or adjustment on account of any dividends accrued on
any shares of 1992 Preferred Stock surrendered for
conversion. If any shares of 1992 Preferred Stock are
called for redemption, the right of conversion shall
expire as to the shares designated for redemption at
the close of business on the tenth day immediately
preceding the date fixed for redemption, unless default
is made in the payment of the redemption price on such
shares.
(b) To convert any shares of 1992 Preferred Stock
into Common Stock, the holder must surrender the
certificate or certificates therefor, duly endorsed to
the Corporation or in blank, at the principal office of
the Corporation or at such other place or places as the
Board of Directors may designate and must give written
notice to the Corporation at that office or place that
the holder elects to convert all or a part of such
shares, setting forth the name or names (with the
address or addresses) in which the shares of Common
Stock are to be issued. The Corporation shall, as soon
as practicable thereafter, cause to be issued and
delivered at that office or place to the holder, or the
holder's designee or designees, a certificate or
certificates for the number of whole shares of Common
Stock to which such holder is entitled, together with a
certificate or certificates representing any shares of
1992 Preferred Stock which are not to be converted but
constitute part of the shares of 1992 Preferred Stock
represented by the certificate or certificates
surrendered and any cash to which such holder may be
entitled in lieu of the issuance of a fractional share.
A conversion shall be effective as of the close of
business on the date of the due surrender of the shares
to be converted, and the rights of the holder of such
shares shall, to the extent of such conversion, cease
at such time, and the person or persons entitled to
receive shares of the Common Stock upon conversion of
such shares of 1992 Preferred Stock shall be treated
for all purposes as having become the record holder or
holders of the Common Stock at that time.
(c) No fractional shares of Common Stock shall be
issued on conversion. In lieu of the issuance of
fractional shares of Common Stock, a holder of 1992
Preferred Stock otherwise entitled to receive a
fractional share is entitled to receive a cash payment
(without interest) equal to the fair market value of
any fraction of a share of Common Stock to which the
holder would be entitled but for this provision. The
fair market value of a fraction of a share of the
Common Stock shall be such fraction multiplied by the
current market price of a share of Common Stock as of
the close of business on the date such shares are duly
surrendered for conversion or, if such date is not a
trading date, on the next succeeding trading date.
(d) In the case of any shares of 1992 Preferred
Stock converted after any record date for payment of a
dividend on the 1992 Preferred Stock and on or before
the date for payment of the dividend, the dividend
declared and payable on the dividend payment date shall
continue to be payable on the dividend payment date to
the holder of record of the shares as of such preceding
record date notwithstanding their conversion. Shares
of the 1992 Preferred Stock surrendered for conversion
during the period from the close of business on any
such record date to the opening of business on the
dividend payment date shall be accompanied by payment
in funds acceptable to the Corporation of an amount
equal to the dividend payable on the dividend payment
date on the shares of the 1992 Preferred Stock
surrendered for conversion, except that no such payment
is required to be made with respect to shares so
converted which have been called for redemption on a
redemption date occurring during the period from the
close of business on any record date for the payment of
a dividend on the 1992 Preferred Stock to the opening
of business on the dividend payment date, and the
dividend payable on any such shares shall continue to
be payable on the dividend payment date to the holder
of record of such shares on such dividend record date
notwithstanding their conversion. Except as provided
in this subsection, no payment or adjustment shall be
made upon any conversion on account of any dividends
accrued on shares of the 1992 Preferred Stock
surrendered for conversion or on account of any
dividends on the shares of Common Stock issued upon
conversion.
(e) The Conversion Price shall be adjusted from
time to time as follows:
(i) If the Corporation at any time (A) pays
a dividend or makes a distribution to all holders
of its Common Stock in shares of its Common Stock,
(B) subdivides its outstanding shares of Common
Stock into a larger number of shares of Common
Stock, or (C) combines its outstanding shares of
Common Stock into a smaller number of shares of
Common Stock, then in each such case the
Conversion Price in effect immediately before that
event shall be adjusted so that the holder of any
shares of 1992 Preferred Stock thereafter
surrendered for conversion shall be entitled to
receive the number of whole shares of Common Stock
that the holder would have owned or been entitled
to receive immediately following such event if
those shares of 1992 Preferred Stock had been
converted into Common Stock immediately before
that event. An adjustment made under this
Subparagraph (i) becomes effective immediately
after the payment date in the case of a dividend
or distribution and immediately after the
effective date in the case of a subdivision or
combination. No adjustment in the Conversion
Price shall be made if, at the same time the
Corporation issues shares of Common Stock as a
dividend or distribution on the outstanding shares
of Common Stock which, as provided in this
Subparagraph (i), would otherwise call for an
adjustment in the Conversion Price, the
Corporation issues shares of Common Stock as a
dividend or distribution on the outstanding shares
of 1992 Preferred Stock equivalent to the number
of shares distributable on the shares of Common
Stock into which 1992 Preferred Stock is then
convertible.
(ii) If the Corporation issues rights or
warrants to all holders of its shares of Common
Stock entitling them to subscribe for or purchase
shares of Common Stock at a price per share less
than the current market price per share of Common
Stock on the date fixed for determination of
shareholders entitled to such rights (the "record
date"), then in each such case the Conversion
Price to be in effect after the record date shall
be reduced by multiplying the Conversion Price in
effect at the close of business on the date
immediately before the record date by a fraction,
the numerator of which shall be the number of
shares of Common Stock outstanding on the record
date plus the number of shares of Common Stock
which the aggregate exercise, subscription or
purchase price of the total number of shares so
offered would purchase at the current market price
and the denominator of which shall be the number
of shares of Common Stock outstanding at the close
of business on the record date plus the number of
additional shares of Common Stock offered for
subscription or purchase.
(iii)If the Corporation distributes to all
holders of shares of Common Stock evidence of its
indebtedness or assets (excluding cash dividends
or distributions payable out of consolidated
earnings or earned surplus or stock dividends
referred to in Subparagraph (i)(A) above) or
subscription rights or warrants (excluding those
referred to in Subparagraph (ii) above), then in
each such case the Conversion Price to be in
effect thereafter shall be determined by
multiplying the Conversion Price in effect
immediately before the record date for determining
shareholders entitled to received the distribution
(the "record date") by a fraction, the numerator
of which shall be the current market price per
share of Common Stock as of the close of business
on the record date less the then fair market value
(as determined by the Board of Directors of the
Corporation whose determination shall be
conclusive) of the portion of the assets or
evidences of indebtedness so distributed or of
such subscription rights or warrants applicable to
one share of Common Stock and the denominator of
which shall be the current market price per share
of Common Stock on the record date.
(iv) No adjustment in the Conversion Price
shall be required unless the adjustment would
require an increase or decrease in the Conversion
Price by more than one percent, but any
adjustments not required to be made by reason of
this subparagraph shall be carried forward
cumulatively and taken into account in any
subsequent adjustments. All calculations under
this Paragraph (e) shall be made to the nearest
one-tenth of one percent.
(v) In case of any reclassification of the
Common Stock (other than subdivision or
combination of outstanding shares of Common Stock
for which adjustment is provided in Subparagraph
(i) above), or a consolidation or merger of the
Corporation with or into any other corporation
(other than a consolidation or a merger in which
the Corporation is the continuing corporation and
the outstanding shares of the Corporation's Common
Stock are not changed into or exchanged for stock
or other securities of any other person or cash or
any other property as a result of or in connection
with such consolidation or merger) or a sale of
the properties and assets of the Corporation as,
or substantially as, an entirety to any other
business organization, or a statutory share
exchange in which all shares of Common Stock or
any series or class of Common Stock are exchanged
for shares of another corporation or other entity,
each share of 1992 Preferred Stock shall, after
such reclassification, consolidation, merger, sale
or exchange and upon the terms and conditions
specified in this Subsection (5), be convertible
into or represent the right to receive the number
of shares of stock or other securities or property
(including cash) to which the shares of Common
Stock deliverable (at the time of such
reclassification, consolidation, merger,sale or
exchange) upon conversion thereof would have been
entitled upon such reclassification of Common
Stock, consolidation, merger, sale or exchange, if
the conversion of the 1992 Preferred Stock into
Common Stock had taken place immediately before
that event; and in any case, if necessary, the
provisions set forth in this Subparagraph (v) with
respect to the rights and interests thereafter of
the holders of the shares of 1992 Preferred Stock
shall be appropriately adjusted so as to be
applicable, as nearly as may reasonably be, to any
shares of stock or other securities or property
(including cash) thereafter deliverable upon
conversion of shares of 1992 Preferred Stock.
(vi) Whenever the Conversion Price is
adjusted as provided in this Paragraph (e):
(A) The Corporation shall compute the
adjusted Conversion Price in accordance with
this Paragraph (e) and shall prepare a
certificate signed by the President or any
Vice President of the Corporation setting
forth the adjusted Conversion Price and
showing in reasonable detail the facts upon
which such adjustment is based, and the
certificate shall promptly be filed with the
transfer agent for the 1992 Preferred Stock,
but the transfer agent for 1992 Preferred
Stock has no duty with respect to any such
certificate filed with it except to keep the
same on file and available for inspection
during reasonable hours; and
(B) The Corporation shall cause to be
mailed to each holder of shares of 1992
Preferred Stock at his then registered
address by first-class mail, postage prepaid,
a notice stating that the Conversion Price
has been adjusted and setting forth the
adjusted Conversion Price.
(vii)Without limiting the obligation of the
Corporation to give the notices provided in
Subparagraph (vi), the failure of the Corporation
to give such notice shall not invalidate any
corporate action by the Corporation.
(f) For the purpose of any computation under
Paragraph (c) or (e), "current market price" means,
with respect to Common Stock on any date, the average
of the daily closing prices per share of Common Stock
for the 20 consecutive trading days immediately before
that date. The "closing price" for a day is the last
sale price, regular way, or in case no such sale takes
place on such day, the average of the closing bid and
asked prices, regular way, in either case on the New
York Stock Exchange, or, if the Common Stock is not
listed or admitted to trading on that exchange, on the
principal national securities exchange on which the
Common Stock is listed or admitted to trading or, if it
is not listed or admitted to trading on any national
securities exchange the mean of the closing bid and
asked prices as reported by National Association of
Securities Dealers Automated Quotation System or, if it
is not so listed or reported, as reported by NQB or any
successor thereof, or if not so reported, as determined
in good faith by the Board of Directors of the
Corporation.
(g) The Corporation shall at all times reserve
and keep available, free from preemptive rights for the
purpose of effecting the conversion of the shares of
1992 Preferred Stock, the full number of shares of
Common Stock then deliverable upon the conversion of
all shares of 1992 Preferred Stock then outstanding.
(h) The Corporation is not obligated to pay any
tax payable in respect of any transfer involved in the
issue and delivery of shares of Common Stock in a name
other than that in which the shares of 1992 Preferred
Stock so converted were registered, and the Corporation
is not obligated to make any such issue or delivery
unless and until the person requesting such issue has
paid to the Corporation the amount of any such tax, or
has established, to the satisfaction of the
Corporation, that such tax has been paid.
(i) The Corporation may make such reductions in
the Conversion Price, in addition to those required by
Paragraph (e), as it considers to be advisable in order
that any event treated for federal income tax purposes
as a dividend of stock or stock rights shall not be
taxable to the recipients.
(j) In the event that:
(i) the Corporation declares a dividend or
any other distribution on its Common Stock,
payable otherwise than in cash out of retained
earnings or earned surplus; or
(ii) the Corporation authorizes the granting
to the holders of its Common Stock of rights to
subscribe for or purchase any shares of capital
stock of any class or of any other rights; or
(iii)any capital reorganization of the
Corporation, reclassification of the capital stock
of the Corporation, consolidation or merger of the
Corporation with or into another corporation
(other than a member in which the Corporation is
the surviving corporation), or sale, lease or
conveyance of the assets of the Corporation as an
entirety or substantially as an entirety to
another corporation occurs; or
(iv) the voluntary or involuntary
dissolution, liquidation or winding up of the
Corporation occurs;
the Corporation shall cause to be mailed to the holders
of record of the 1992 Preferred Stock at least 20 days
before the applicable date hereinafter specified a
notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution or
rights or, if a record is not to be taken, the date as
of which the holders of Common Stock of record to be
entitled to such dividend, distribution or rights are
to be determined or (y) the date on which such
reorganization, reclassification, consolidation,
merger, sale, lease, conveyance, dissolution,
liquidation or winding up is expected to take place,
and the date, if any is to be fixed, as of which
holders of Common Stock of record shall be entitled to
exchange their shares of Common Stock for securities or
other property deliverable upon such reorganization,
reclassification, consolidation, merger, sale, lease,
conveyance, dissolution, liquidation or winding up.
Failure to give such notice, or any defect therein,
shall not affect the legality or validity of such
dividend, distribution, reorganization,
reclassification, consolidation, merger, sale, lease,
conveyance, dissolution, liquidation or winding up.
(6) Voting.
(a) Except as otherwise expressly required by
applicable law or by the terms of this Section C, the
holders of shares of the 1992 Preferred Stock are not
entitled to any vote on any matter, including but not
limited to any merger, consolidation or transfer of
assets, or statutory share exchange, and to no notice
of any meeting of shareholders of the Corporation.
(b) Whenever the vote, approval or other action
of holders of shares of the 1992 Preferred Stock is
required or permitted by applicable law or by the terms
of this Section C, each share is entitled to one vote
and the affirmative vote of a majority of shares of
1992 Preferred Stock present or represented at the
meeting at which a quorum is present is sufficient to
constitute such vote, approval or other action.
(c) If, at any time, the Corporation falls in
arrears in the payment of dividends on the 1992
Preferred Stock in an aggregate amount at least equal
to the accrued dividends for six full quarterly
dividend periods (which need not be consecutive), the
number of directors constituting the full board of
directors of the Corporation shall be automatically
increased by two and the holders of 1992 Preferred
Stock, voting separately as a single class, shall be
entitled to elect two directors of the Corporation to
fill the two newly created directorships, at a special
meeting called for that purpose in accordance with
Paragraph (f) and thereafter at each meeting of the
shareholders held for the purpose of electing
directors, so long as there continues to be any
arrearage in the payment of dividends on the 1992
Preferred Stock for any past quarterly dividend period.
(d) When all dividends on the 1992 Preferred
Stock for all past quarterly dividend periods have been
paid in full, the right of the holders of 1992
Preferred Stock to elect directors ceases (subject to
revesting from time to time as provided in Paragraph
(c)), the number of directors of the Corporation shall
be automatically reduced by two and the term of office
of all directors elected by the holders of the 1992
Preferred Stock terminates.
(e) A director elected by the holders of 1992
Preferred Stock shall hold office until the annual
meeting next succeeding his election of until his
successor, if any, is elected by such holders. A
director so elected may be removed at any time with or
without cause but only by the vote of holders of the
1992 Preferred Stock at a meeting duly called for that
purpose. So long as the holders of the 1992 Preferred
Stock have the right to elect two directors, any
vacancy in the office of a director elected by those
holders may be filled by the remaining director so
elected or by the vote of the holders of 1992 Preferred
Stock at any annual meeting or any special meeting
called for the purpose.
(f) At any time when the power to elect directors
vests in the holders of the 1992 Preferred Stock, a
proper officer of the Corporation shall, on the written
request of record holders of at least 10 percent of the
number of shares of 1992 Preferred Stock then
outstanding, addressed to the secretary of the
Corporation at its principal office, call a special
meeting of the holders of the 1992 Preferred Stock for
the purpose of electing directors. The meeting must be
called on the notice required for annual meetings of
shareholders and must be held at the earliest
practicable date, not later than 20 days after receipt
of the written request, in the city in which the last
preceding annual meeting of the shareholders of the
Corporation was held, but may be held at the time and
place of the annual meeting if the annual meeting is to
be held within 60 days after the power to elect
directors first vests in the holders of the 1992
Preferred Stock. If the proper office of the
Corporation does not call the meeting within the
required time, then the holders of record of 10 percent
of the number of shares of 1992 Preferred Stock then
outstanding may, by written notice to the secretary of
the Corporation at its principal office, designate any
person to call such meeting, and the person so
designated may call such meeting in the city above
provided upon not fewer than 10 nor more than 20 days
notice and for that purpose shall have access to the
stock books of the Corporation. At any meeting so
called for the election of directors by holders of the
1992 Preferred Stock or at any annual meeting held
while the holders of 1992 Preferred Stock have the
right to elect directors, holders of one-third of the
shares of 1992 Preferred Stock then outstanding is
sufficient to constitute a quorum for the purpose of
electing directors at such a meeting. If at any such
meeting a quorum of the 1992 Preferred Stock is not
present, the election of directors shall not take
place, and the meeting shall be adjourned from time to
time for periods not exceeding 30 days until a quorum
is obtained.
(g) Approval of the holders of the 1992 Preferred
Stock, voting separately as a single class, is required
to adopt any proposed amendment to the Articles of
Incorporation if the proposed amendment would affect
shares of the 1992 Preferred Stock in any one or more
of the following ways:
(i) Create or authorize any class of stock
ranking prior to such shares in respect of
dividends or distribution of assets on liquidation
or otherwise alter or abolish the liquidation
preferences or any other preferential right of
such shares.
(ii) Reduce the redemption price or otherwise
alter or abolish any right with respect to
redemption of such shares expressly provided by
this Section C.
(iii)Alter or abolish any right of such
shares expressly provided by this Section C to
receive dividends except as such right may be
affected by dividend rights of new shares being
authorized of another class or series of shares
ranking on a par with or junior to the Preferred
Stock.
(iv) Alter or abolish any right of holders of
shares of the 1992 Preferred Stock under this
Section C to convert such shares into shares of
Common Stock.
(v) Exclude or limit any voting rights of
such shares conferred by this Section C.
(7) Liquidation Rights.
(a) Upon the dissolution, liquidation or winding
up of the Corporation, the holders of the shares of
1992 Preferred Stock shall be entitled to receive upon
liquidation and to be paid out of the assets of the
Corporation available for distribution to its
shareholders, before any payment or distribution may be
made on the Common Stock or on any other class of stock
ranking junior to the 1992 Preferred Stock, the amount
of $25 per share, plus a sum equal to all dividends
(whether or not earned or declared) on such shares
accrued and unpaid thereon to the date of final
distribution.
(b) Neither the sale of all or substantially all
the property or business of the Corporation, nor the
merger or consolidation of the Corporation into or with
any other corporation or the merger or consolidation of
any other corporation into or with the Corporation,
shall be deemed to be a dissolution, liquidation or
winding up, voluntary or involuntary, for the purposes
of this Subsection (7). This Paragraph (b) does not
apply, however, to a merger of the Corporation into a
subsidiary pursuant to Section 112G of the LBCL if the
merger would cause the conversion of the 1992 Preferred
Stock into (i) an amount of cash per share less than
the liquidation preference per share of the 1992
Preferred Stock or (ii) a security with terms less
favorable than those contained in this Section C for
the 1992 Preferred Stock.
(c) Upon payment to the holders of the shares of
1992 Preferred Stock of the full preferential amounts
provided for in this Subsection (7), the holders of
1992 Preferred Stock as such have no right or claim to
any of the remaining assets of the Corporation.
(d) If the assets of the Corporation available
for distribution to the holders of shares of 1992
Preferred Stock upon any dissolution, liquidation or
winding up of the Corporation, whether voluntary or
involuntary, are insufficient to pay in full all
amounts to which such holders are entitled under
Paragraph (a) of this Subsection (7), no such
distribution may be made on account of any shares of
any other class or series of Preferred Stock ranking on
a parity with the shares of 1992 Preferred Stock upon
such dissolution, liquidation or winding up unless
proportionate distributive amounts are paid on account
of the shares of 1992 Preferred Stock, ratably, in
proportion to the full distributable amounts for which
holders of all such parity shares are respectively
entitled upon dissolution, liquidation or winding up.
(8) Ranking. For purposes of this Section C any stock
of any class or classes of the Corporation shall be deemed
to rank:
(a) prior to the shares of 1992 Preferred Stock,
either as to dividends or upon liquidation, if the
holders of such class or classes are entitled under the
Articles of Incorporation to the receipt of dividends
or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, as the
case may be, in preference or priority to the holders
of shares of 1992 Preferred Stock;
(b) on a parity with shares of 1992 Preferred
Stock, either as to dividends or upon liquidation,
whether or not the dividend rates, dividend payment
dates or redemption or liquidation prices per share or
sinking fund provisions, if any, are different from
those of 1992 Preferred Stock, if the holders of such
class or classes are entitled under the Articles of
Incorporation to the receipt of dividends or of amounts
distributable upon dissolution, liquidation or winding
up of the Corporation, as the case may be, in
proportion to their respective dividend rates or
liquidation prices, without preference or priority, one
over the other, as between the holders of such class or
classes and the holders of shares of 1992 Preferred
Stock; and
(c) junior to shares of 1992 Preferred Stock,
either as to dividends or upon liquidation, if such
class or classes are Common Stock or if the holders of
shares of 1992 Preferred Stock are entitled under the
Articles of Incorporation to the receipt of dividends
or of amounts distributable upon dissolution,
liquidation or winding up of the Corporation, as the
case may be, in preference or priority to the holders
of shares of such class or classes.
(9) No Preemptive Rights. Holders of shares of 1992
Preferred Stock have no preemptive rights.
ARTICLE IV
Directors
A. The Board of Directors shall consist of not less than
three nor more than thirty persons, the exact number of which
shall be as designated in the By-laws, or, if not so designated,
as shall be elected from time to time by the shareholders.
B. Any director absent from a meeting of the Board of
Directors or a committee thereof may be represented by any other
director, who may cast the vote of the absent director according
to the written instructions, general or special, of the absent
director.
ARTICLE V
Vote Required for Corporate Action
The affirmative vote of the holders of two-thirds of the
voting power present or represented by proxy at a meeting of
shareholders shall be required to amend these Articles of
Incorporation and shall be necessary to constitute shareholder
approval whenever such approval is required by law for a merger,
consolidation, sale of assets or dissolution.
ARTICLE VI
Indemnification
The Corporation shall have the power to indemnify its
present and former officers, directors, employees and agents, and
directors, officers, employees and agents of other corporations
or entities to the extent set forth in or contemplated or
authorized by the By-laws. No amendment limiting the right to
indemnification shall affect the entitlement of any person to
indemnification whose claim thereto results from conduct
occurring prior to the date of such amendment.
ARTICLE VII
Reversion
Cash, property or share dividends, shares issuable to
shareholders in connection with a reclassification of stock, and
the redemption price of redeemed shares, which are not claimed by
the shareholders entitled thereto within one year after the
dividend or redemption price became payable or the shares became
issuable, despite reasonable efforts by the Corporation to pay
the dividend or redemption price or deliver the certificates for
the shares to such shareholders within such time, shall, at the
expiration of such time, revert in full ownership to the
Corporation, and the Corporation's obligation to pay such
dividend or redemption price or issue such shares, as the case
may be, shall thereupon cease; provided that the Board of
Directors may, at any time, for any reason satisfactory to it,
but need not, authorize (1) payment of the amount of any cash or
property dividend or redemption price or (2) issuance of any
shares, ownership of which has reverted to the Corporation
pursuant to this Article VII, to the entity who or which would be
entitled thereto had such reversion not occurred.
ARTICLE VIII
Special Meetings of Shareholders
At any time, upon the written request of any shareholder or
shareholders holding in the aggregate a majority of the total
voting power, the Secretary of the Corporation shall call a
special meeting of shareholders to be held at the registered
office at such time as the Secretary may fix, not less than
fifteen nor more than sixty days after the actual receipt of the
request. Such requests must state the specific purpose or
purposes of the special meeting and the business to be conducted
thereat shall be limited to such purpose or purposes. Except as
provided in this Article VIII, no shareholder or shareholders
shall have power to call or cause to be called a special meeting
of shareholders.
ARTICLE IX
Limitation of Liability of Directors and Officers
A. No director or officer of the Corporation shall be
liable to the Corporation or its shareholders for monetary
damages for breach of his fiduciary duty as a director or
officer, provided that the foregoing provision shall not
eliminate or limit the liability of a director or officer for (a)
any breach of his duty of loyalty to the Corporation or its
shareholders; (b) acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law; (c)
liability for unlawful distributions of the Corporation's assets
to, or redemption or repurchase of the Corporation's shares from
shareholders of the Corporation, under and to the extent provided
in La. R.S. 12:92D; or (d) any transaction from which he derived
an improper personal benefit.
B. The Board of Directors may (a) cause the Corporation to
enter into contracts with directors and officers providing for
the limitation of liability set forth in this Article IX to the
fullest extent permitted by law, (b) adopt by-laws or
resolutions, or cause the Corporation to enter into contracts,
providing for indemnification of directors and officers of the
Corporation and other persons, and (c) cause the Corporation to
exercise the powers set forth in R.S. 12:83F, notwithstanding
that some or all of the members of the Board of Directors acting
with respect to the foregoing may be parties to such contracts,
or beneficiaries of such by-laws or resolutions of the exercise
of such powers.
C. Notwithstanding any other provisions of these Articles
of Incorporation, the affirmative vote of at least 80% of the
total voting power shall be required to amend or repeal this
Article IX, and any amendment or repeal of this Article IX shall
not adversely affect any elimination or limitation of liability
of a director or officer of the Corporation under this Article IX
with respect to any action or inaction occurring prior to the
time of such amendment or repeal.
EXHIBIT 3.2
BY-LAWS
OF
FIRST COMMERCE CORPORATION
As Amended Through December 20,1993
Section 1. OFFICES
1.1. Principal Office. The principal office shall be located at
210 Baronne Street, New Orleans, Louisiana.
1.2. Additional Offices. The Corporation may have such offices at
such other places as the Board of Directors may from time to time
determine or the business of the Corporation may require.
Section 2. SHAREHOLDERS' MEETINGS
2.1. Time and Place. Unless otherwise required by law or these
By-laws, all meetings of shareholders shall be held in the Board
Room at the Corporation's principal office or at such other
place, within or without the State of Louisiana, as may be
designated by the Board of Directors.
2.2. Annual Meeting. An annual meeting of the shareholders shall
be held on the third Monday of April in each year, or if such day
is a legal holiday, then on the next succeeding day not a legal
holiday, at 9:00 A.M., local time, or on such other date or at
such other time as the Board of Directors shall designate, for
the purpose of electing directors and for the transaction of such
other business as may properly be brought before the meeting. If
no annual shareholders' meeting is held for a period of eighteen
months, any shareholder may call such meeting to be held at the
registered office of the Corporation as shown on the records of
the Secretary of State of Louisiana.
2.3. Special Meetings. Special meetings of the shareholders, for
any purpose or purposes, unless otherwise prescribed by law or
the Articles of Incorporation, may be called by the President and
Chief Executive Officer. At any time, upon the written request of
a majority of the Board of Directors or of any shareholder or
shareholders holding in the aggregate a majority of the total
voting power, the Secretary shall call a special meeting of
shareholders to be held at the registered office of the
Corporation at such time as the Secretary may fix, not less than
fifteen nor more than sixty days after the actual receipt of the
request. Such request shall state the purposes of the proposed
special meeting, and the business conducted at such special
meeting shall be limited to the purposes stated in such request.
2.4. Notice of Meetings. Except as otherwise provided by law, the
authorized person or persons calling a shareholders' meeting
shall cause written notice of the time, place and purpose of the
meeting to be given to all shareholders entitled to vote at such
meeting at least ten days and not more than sixty days prior to
the day fixed for the meeting. Notice of the annual meeting need
not state the purpose thereof, unless action is to be taken at
the meeting as to which notice is required by law or these By-
laws. Notice of a special meeting shall state the purpose or
purposes thereof, and the business conducted at any special
meeting shall be limited to the purposes stated in the notice.
2.5. List of Shareholders. At every meeting of shareholders, a
list of shareholders entitled to vote, arranged alphabetically
and certified by the Secretary or by the agent of the Corporation
having charge of transfers of shares, showing the number and
class of shares held by each such shareholder on the record date
for the meeting, shall be produced on the request of any
shareholder.
2.6. Quorum. Except as otherwise provided by law or the Articles
of Incorporation, the presence, in person or by proxy, of the
holders of a majority of the total voting power shall constitute
a quorum at all meetings of the shareholders.
2.7. Withdrawal. The shareholders present or represented at a
duly organized meeting shall constitute a quorum and may continue
to do business until adjournment, notwithstanding the withdrawal
of enough shareholders to leave less than a quorum as fixed in
Section 2.6 hereof, or the refusal of any shareholders present to
vote.
2.8. Voting. Each shareholder shall have one vote for each share
of stock having voting power registered in his name on the books
of the Corporation on the record date for the determination of
shareholders entitled to vote. When a quorum is present at any
meeting, the vote of the holders of a majority of the voting
power present in person or represented by proxy shall decide any
question brought before such meeting, unless the question is one
upon which, by express provision of law or the Articles of
Incorporation, a different vote is required, in which case such
express provision shall govern and control the decision of such
question. Directors shall be elected by plurality vote.
2.9. Proxies. At any meeting of the shareholders, every
shareholder having the right to vote shall be entitled to vote in
person or by proxy appointed by an instrument in writing
subscribed by such shareholder and bearing a date not more than
eleven months prior to the meeting, unless such instrument
validly provides for some other definite period; provided,
however, that no proxy shall be valid for longer than three
years. The aforesaid proxy need not be a shareholder of the
Corporation.
2.10. Adjournments. Adjournments of any annual or special meeting
of shareholders may be taken without new notice being given
unless a new record date is fixed for the adjourned meeting, but
any meeting at which directors are to be elected shall be
adjourned only from day to day until such directors shall have
been elected.
2.11. Lack of Quorum. If a meeting cannot be organized because a
quorum has not attended, those present may adjourn the meeting to
such time and place as they may determine, subject, however, to
the provisions of Section 2.10 hereof. In the case of any meeting
called for the election of directors, those who attend the second
of such adjourned meetings, although less than a quorum as fixed
in Section 2.6 hereof shall nevertheless constitute a quorum for
the purpose of electing directors.
Section 3. DIRECTORS
3.1. Number. The number of authorized directors shall be twenty;
provided that if, after proxy materials for any annual meeting of
shareholders are mailed to shareholders any person named therein
to be nominated at the direction of the Board of Directors
becomes unable or unwilling to serve, the foregoing number of
authorized directors shall be automatically reduced by a number
equal to the number of such persons; and provided further that
upon the consummation of any transaction involving the
acquisition by the Corporation, directly or indirectly, of
another financial institution ("Target Company"), where the
acquisition agreement with respect thereto provides that
designees of the Target Company shall become members of the Board
of Directors, the number of authorized directors shall be
increased automatically by the number of such designees.
3.2. General Powers: Election All of the corporate powers shall
be vested in, and the business and affairs of the Corporation
shall be managed by the Board of Directors. The Board of
Directors may exercise all such powers of the Corporation and do
all such lawful acts and things which are not by law, the
Articles of Incorporation or these By-laws directed or required
to be done by the President and Chief Executive Officer or the
share-holders. Directors shall be elected at the annual meeting
of shareholders and shall hold office for one year or until their
successors are chosen and have qualified.
3.3. Vacancies. Except as otherwise provided in the Articles of
Incorporation or these By-laws (a) the office of a director shall
become vacant if he dies, resigns, or is removed from office, and
(b) the Board of Directors may declare vacant the office of a
director if (i) he is interdicted or adjudicated an incompetent,
(ii) an action is filed by or against him, or any entity of which
he is employed as his principal business activity, under the
bankruptcy laws of the United States, (iii) in the sole opinion
of the Board of Directors he becomes incapacitated by illness or
other infirmity so that he is unable to perform his duties for a
period of six months or longer, or (iv) he ceases at any time to
have the qualifications required by law, the Articles of
Incorporation or these By-laws. The remaining directors may, by a
majority vote, fill any vacancy on the Board of Directors
(including any vacancy resulting from an increase in the
authorized number of directors, or from the failure of the
shareholders to elect the full number of authorized directors)
for an unexpired term; provided that the shareholders shall have
the right at any special meeting called for such purpose prior to
action by the Board of Directors to fill the vacancy.
3.4. Eligibility for Nomination or Election. No person shall be
eligible for nomination or election as a director who:
(1) shall have attained the age of 72 years, provided that any
person who on April 16, 1990 was a director of the Corporation
may continue to be nominated and elected; or
(2) while a director of the Corporation was absent during his
annual term of office from more than one-third of the aggregate
number of meetings of the Board of Directors and Committees of
which he was a member, unless the failure to so attend resulted
from illness or other reason determined by the Executive
Committee of the Corporation to excuse such failure to attend,
provided that nothing herein shall be deemed to be in derogation
of the power of the Board of Directors to declare the office of a
director vacant on the ~rounds of prolonged illness or
disability.
Section 4. MEETINGS OF THE BOARD OF DIRECTORS
4.1. Place of Meetings. The meetings of the Board of Directors
shall be held in the Board Room at the Corporation's principal
office or at such other place within or without the State of
Louisiana as the Board of Directors may from time to time appoint
or as may be fixed in the notice of a special meeting given
pursuant to Section 4.4 hereof.
4.2. Annual Meeting. The first meeting of each newly- elected
Board of Directors shall be held following and on the same day as
the annual shareholders' meeting in the Board Room at the
Corporation's principal office or at such other place as the
Board of Directors may determine, and no notice of such first
meeting shall be necessary to the newly-elected directors in
order legally to constitute the meeting.
4.3. Regular Meeting: Notice. Regular meetings of the Board of
Directors shall be held at 1:00 P.M., New Orleans time, on the
third Monday of February, May, August, November and December, but
the Board may at any regular or special meeting change the date
of any next succeeding regular meeting. Notice of regular
meetings of the Board of Directors shall not be required.
4.4. Special Meetings: Notice. Special meetings of the Board of
Directors may be called by the Authorized Officer on two days
notice given to each director, either personally or by telephone,
mail or telegram. Special meetings shall be called by the
Authorized Officer in like manner and on like notice on the
written request of a majority of the Board of Directors and, if
the Authorized Officer fails or refuses or is unable to call a
special meeting within twenty-four hours of such request, then a
majority of the Board of Directors may call the special meeting
on two days notice given to each director. As used in this
Section 4.4, the term "Authorized Officer" shall mean the
President and Chief Executive Officer or, in the event of a
vacancy in the position of President and Chief Executive Officer
or the incapacity for an extended period of time, by reason of
illness or injury, of the person serving as President and Chief
Executive officer to perform the duties of his office for an
extended period, the Chairman of the Board.
4.5. Quorum: Adjournments. A majority of the Board of Directors
shall be necessary to constitute a quorum for the transaction of
business, and except as otherwise provided by law or these By-
laws, the acts of a majority of the directors present at a
meeting at which a quorum is present shall be the acts of the
Board of Directors. If a quorum is not present at any meeting of
the Board of Directors, the directors present may adjourn the
meeting from time to time, without notice other than announcement
at the meeting, until a quorum is present.
4.6. Withdrawal. If a quorum is present when a meeting of the
Board of Directors or a committee thereof is convened, the
directors present may continue to do business, taking action by
vote of a majority of a quorum, until adjournment,
notwithstanding the withdrawal of enough directors to leave less
than a quorum, or the refusal of any director present to vote.
4.7. Action by Consent. Any action which may be taken at a
meeting of the Board of Directors or any committee thereof may be
taken by a consent in writing signed by all of the directors or
by all members of the committee, as the case may be, and filed
with the records of proceedings of the Board of Directors or
committee.
4.8. Meeting by Telephone or Similar Communications. Members of
the Board of Directors may participate at and be present at any
meeting of the Board of Directors or any committee thereof by
means of conference telephone or similar communications equipment
if all persons participating in such meeting can hear and
communicate with each other. Participation in a meeting pursuant
to this Section 4.8 shall constitute presence in person at such
meeting, except where otherwise required by law.
4.9. Compensation. Directors who are not salaried officers of the
Corporation or any of its subsidiaries shall be entitled to such
compensation for their services as directors, and all directors
shall be entitled to such reimbursement for any reasonable
expenses incurred in attending meetings of the Board of Directors
or any committee thereof, as may from time to time be determined
by the Board of Directors.
Section 5. COMMITTEES OF THE BOARD OF DIRECTORS
5.1. Designation. The Board of Directors may designate one or
more committees, each committee to consist of not less than three
directors of the Corporation (and one or more directors may be
named as alternate members to replace any absent or disqualified
regular members), which, to the extent provided by resolution of
the Board of Directors or these By-laws, shall have and may
exercise the powers of the Board of Directors in the management
of the business and affairs of the Corporation, and may have the
power to authorize the seal of the Corporation to be affixed to
documents. The members of each committee shall be nominated by
the President and Chief Executive Officer and approved by the
Board of Directors, and, in a similar manner, one of the members
of each committee shall be selected as its Chairman, who shall be
authorized to call all meetings of such committee, to preside at
all such meetings and to appoint a Secretary (who may be an
officer of the Corporation or any of its subsidiaries) to keep
regular Minutes of its meetings and report the same to the Board
of Directors when required. Such committee or committees shall
have such name or names as may be stated in these By-laws, or as
may be determined, from time to time, by the Board of Directors.
Any vacancy occurring in any such committee shall be filled in
the same manner as appointments are made, but the President and
Chief Executive Officer may designate another director to serve
on the committee pending action by the Board of Directors. Each
such committee shall hold office during the term of the Board of
Directors constituting it, unless other~vise ordered by the Board
of Directors.
5.2. Executive Committee. The Executive Committee, one of the
members of which shall be the President and Chief Executive
Officer, shall meet as necessary in order to perform the duties
provided for in this Section 5.2. The functions of the Executive
Committee shall be to:
(a) Exercise any of the powers of the Board of Directors not
otherwise delegated to it under these By-laws or a resolution of
the Board of Directors, by the unanimous consent of its members,
when it is determined by such unanimous consent that because of
the nature of the particular situation it is not possible or
practical to convene the full Board of Directors.
(b) Make recommendations to the Board of Directors concerning
special projects or policies including, but not limited to,
acquisition situations, dividend policies and stock splits.
(c) Perform an initial evaluation of all candidates for
membership to the Boards of Directors of the Corporation and its
subsidiaries.
(d) (i) Adopt resolutions granting authority to appropriate
officers of the Corporation to enter into, perform and enforce
agreements on behalf of the Corporation to acquire failed or
failing financial institutions or affiliates thereof, and (ii)
approve proposals for the acquisition of failed or failing
financial institutions or affiliates thereof not included within
any general grant of authority pursuant to paragraph (d)(i) of
this Section.
(e) Review and approve any and all proposed employment or
employment related contracts between the Corporation or a
subsidiary of the Corporation and an employee of any corporation
or financial institution proposed to be acquired by the
Corporation or a subsidiary of the Corporation.
5.3. Audit Committee. The Audit Committee shall be chosen from
those directors who are not officers of the Corporation or any of
its subsidiaries. The functions of the Audit Committee shall be
to:
(a) Make recommendations to the Board of Directors concerning the
selection or retention of the Corporation's independent auditors.
(b) Consult with the chosen independent auditors with regard to
the plan of the audit.
(c) Consult with the chief internal auditor directly on any
matter the Committee or the chief internal auditor deems
appropriate in connection with carrying out their functions.
(d) Determine the compensation of the senior internal auditing
personnel and approve the termination of any member of the
internal auditing staff. (e) Review (i) the results of audits of
the Corporation by its independent auditors and the Federal
Reserve Board, and (ii) the report of the Examining Committees of
the subsidiaries of the Corporation regarding their reviews of
the scope and results of internal audits and the results of
regulatory examinations.
(f) Discuss with the Corporation's management its responses to
the reports and recommendations emanating from internal and
external audits.
(g) Report to the Board of Directors concerning the results of
its reviews.
5.4 Compensation Committee. The Compensation Committee shall be
chosen from those directors who are both (i) "disinterested
persons" within the meaning of Rule 16b-3 of the Securities and
Exchange Commission, as amended from time to time, and (ii)
"outside directors" of the Corporation within the meaning of
Section 162(m)(4)(c)(i) of the Internal Revenue Code, as amended
from time to time. The functions of the Compensation Committee
shall be to
(a) Determine from time to time the compensation of the President
and Chief Executive Officer.
(b) Review the evaluations of the Corporation's senior management
conducted by the President and Chief Executive Officer.
(c) Assure that plans for the succession of senior management
personnel have been developed by the President and Chief
Executive Officer.
(d) Except as provided in Section 5.2(e), review and approve any
and all proposed employment contracts between the Corporation or
a subsidiary of the Corporation and an employee or prospective
employee of the Corporation or a subsidiary of the Corporation.
(e) Administer the Corporation's stock option plan and 1992 Stock
Incentive Plan, with the powers and responsibilities provided for
in such plans.
Section 6. NOTICES
6.1. Form of Delivery. Whenever under the provisions of law, the
Articles of Incorporation or these By-laws, notice is required to
be given to any director or shareholder, it shall not be
construed to mean personal notice unless otherwise specifically
provided in the Articles of Incorporation or these By-laws, but
said notice may be given by mail, addressed to such director or
shareholder at his address as it appears on the records of the
Corporation, with postage thereon prepaid. Such notices shall be
deemed to be given at the time they are deposited in the United
States mail. Notice to a director pursuant to Section 4.4 hereof
may also be given personally or by telephone or telegram sent to
his address as it appears on the records of the Corporation.
6.2. Waiver. Whenever any notice is required to be given by law,
the Articles of Incorporation or these By-laws, a waiver thereof
in writing signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be
deemed equivalent thereto. In addition, notice shall be deemed to
have been given to, or waived by, any shareholder or director who
attends a meeting of shareholders or directors in person, or is
represented at such meeting by proxy, without protesting at the
commencement of the meeting the transaction of any business
because the meeting is not lawfully called or convened.
Section 7. OFFICERS
7.1. Designations. The officers of the Corporation shall be a
Chairman of the Board, a President and Chief Executive Officer, a
Secretary and a Treasurer, and may be one or more of the
following: Executive Vice President, Senior Vice President, Vice
President, Assistant Secretary and Assistant Treasurer. Any two
offices may be held by the same person, provided that no person
holding more than one office may sign, in more than one capacity,
any certificate or other instrument required by law to be signed
by two officers. No officer other than the Chairman of the Board
and the President and Chief Executive officer need be a director.
7.2. Appointment of Certain Officers. At the first meeting of
each newly-elected Board of Directors, or at such other time when
there shall be a vacancy, the Board of Directors shall elect one
of its members as Chairman of the Board, and shall select a
President and Chief Executive Officer, a Secretary and a
Treasurer, each of whom shall serve for one year or until his
successor is elected and has qualified.
7.3. Appointment of Other Officers. As soon as practicable after
his election, the President and Chief Executive Officer may
appoint one or more of each of the following officers: Executive
Vice President, Senior Vice President, Vice President, Assistant
Secretary and Assistant Treasurer. The President and Chief
Executive Officer shall, following such appointment or
appointments, cause to be filed with the minutes of the meeting
of the Board of Directors following such appointment or
appointments an instrument specifying the officers selected. The
President and Chief Executive Officer may also appoint such other
officers, employees and agents of the Corporation as he may deem
necessary; or he may vest the authority to appoint any such other
officers, employees and agents in such other of the officers of
the Corporation as he deems appropriate, subject in all cases to
his direction. Subject to these By-laws, all of the officers,
employees and agents of the Corporation shall hold their offices
or positions for such terms and shall exercise such powers and
perform such duties as shall be specified from time to time by
the Board of Directors or the President and Chief Executive
Officer.
7.4. Compensation. The salary and any bonus of the President and
Chief Executive Officer shall be fixed by the Executive
Committee. The salary of the Chairman of the Board, if any, shall
be fixed from time to time by the Board of Directors. The
salaries and bonuses of all other officers and employees of the
Corporation shall be fixed from time to time by the President and
Chief Executive Officer, except that no officer or employee may
be paid a salary in excess of 80~o of the salary of the President
and Chief Executive Officer without the approval of the Executive
Committee. No officer shall be prevented from receiving such
salary or bonus by reason of the fact that he is also a director
of the Corporation.
7.5. Employment Contracts. The Corporation is prohibited from
entering into any employment contracts without the prior review
and approval of such contracts by the Executive Committee.
7.6. Removal. Any officer or employee of the Corporation may be
removed, with or without cause, at any time by the action of the
Board of Directors or the President and Chief Executive Officer,
but such removal shall not prejudice the contract rights, if any,
of the person so removed. Any vacancy occurring in any office of
the Corporation other than his own may be filled by the President
and Chief Executive Officer until the next regular meeting of the
Board of Directors.
7.7. Duties and Powers of Officers. The duties and powers of the
officers of the Corporation shall be as provided in these By-
laws, or as provided for pursuant to these By-laws, or as shall
be specified from time to time by the President and Chief
Executive Officer, or (except to the extent inconsistent with
these By-laws, or with any provision made pursuant hereto) shall
be those customarily exercised by corporate officers holding such
offices.
7.8. Chairman of the Board. The Chairman of the Board shall, if
present, open and close all meetings of the shareholders and the
Board of Directors, shall preside at all meetings of the Board of
Directors in the absence of the President, and shall have such
other powers and duties as shall be prescribed by the Board of
Directors. The Board of Directors may allow a salary to the
Chairman of the Board.
7.9. The President and Chief Executive Officer. The President and
Chief Executive Officer shall be the chief executive officer of
the Corporation and, subject to the direction of the Board of
Directors, shall have general charge of the business, affairs and
property of the Corporation and general supervision over its
officers and agents. In general, he shall perform all duties
incident to the office of President, and shall see that all
orders and resolutions of the Board of Directors are carried into
effect. He or any other officer of the Corporation appointed or
designated by him (and such other officers as are authorized
thereunto by resolution of the Board of Directors) may execute
bonds, notes and other evidences of indebtedness, mortgages,
contracts, leases, agreements and other instruments requiring a
seal under the seal of the Corporation, and may execute such
documents where a seal is not required; except where such
documents are required by law to be otherwise signed and
executed, and except where the signing and execution thereof
shall be exclusively delegated to some other officer or employee
of the Corporation by the Board of Directors. He shall preside at
all meetings of shareholders and of the Board of Directors. He
shall have the authority to vote all shares owned by the
Corporation in any other corporation (including but not limited
to any subsidiary of the Corporation) and to otherwise exercise
all of the rights afforded shareholders of such other
corporations, in whatever manner he may, in his discretion, deem
in the best interest of the Corporation. He may give general
authority to any other officer to affix the seal of the
Corporation and to attest the affixing by his signature.
Whenever the consent of this Corporation is required for matters
of the type referred to in Sections 8.3 and 8.4 of the By-laws of
First National Bank of Commerce, such consent may be given by the
President and Chief Executive Officer or any officer of this
Corporation designated by him, and the giving of such consent
shall constitute the consent of this Corporation.
7.10. The Secretary. Except as otherwise provided by law or these
By-laws, the Secretary shall have such duties and powers as shall
be specified from time to time by the President and Chief
Executive Officer.
7.11. The Assistant Secretary. The Assistant Secretary, if any
(or, in the event there be more than one, the Assistant
Secretaries in the order determined by the President and Chief
Executive Officer, or in the absence of any designation, then in
the order of their appointment), shall, in the absence of the
Secretary or, in the event of his inability or refusal to act,
perform the duties and exercise the powers of the Secretary and
shall perform such other duties and have such other powers as
these By- laws or the President and Chief Executive Officer may
from time to time prescribe.
7.12. The Treasurer. Except as otherwise provided by law or these
By-laws, the Treasurer shall have such duties and powers as shall
be specified from time to time by the President and Chief
Executive Officer.
7.13. The Assistant Treasurer. The Assistant Treasurer, if any
(or, if there shall be more than one, the Assistant Treasurers in
the order determined by the President and Chief Executive
Officer, or in the absence of any designation, then in order of
their appointment), shall, in the absence of the Treasurer or, in
the event of his inability or refusal to act, perform the duties
and exercise the powers of the Treasurer, and shall perform such
other duties and have such other powers as the President and
Chief Executive Officer may from time to time prescribe.
7.14. Duties of Other Officers. Such Executive Vice Presidents,
Senior Vice Presidents, Vice Presidents and other officers of the
Corporation as may be designated by the President and Chief
Executive Officer shall have such powers and perform such duties
as may from time to time be prescribed by the President and Chief
Executive Officer.
Section 8. STOCK
8.1. Certificates. Every holder of stock in the Corporation shall
be entitled to have a certificate signed by the President and
Chief Executive Officer and the Treasurer or the Secretary or an
Assistant Secretary of the Corporation evidencing the number and
class (and series, if any) of shares owned by him, containing
such information as required by law and bearing the seal of the
Corporation. If any stock certificate is manually signed by a
transfer agent or registrar other than the Corporation itself or
an employee of the Corporation, the signature of any such officer
may be a facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been
placed upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if he
were such officer, transfer agent or registrar at the date of
issue.
8.2. Missing Certificates. The President and Chief Executive
Officer or the Board of Directors may direct a new certificate or
certificates to be issued in place of any certificate or
certificates theretofore issued by the Corporation alleged to
have been lost, stolen or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate of
stock to be lost, stolen or destroyed. When authorizing such
issue of a new certificate or certificates, the President and
Chief Executive Officer or the Board of Directors may, in their
discretion and as a condition precedent to the issuance thereof,
require the owner of such lost, stolen or destroyed certificate
or certificates, or his legal representative, to advertise the
same in such manner as he or it shall require and/or to give the
Corporation a bond in such sum as he or it may deem appropriate
as indemnity against any claim that may be made against the
Corporation with respect to the certificate claimed to have been
lost, stolen or destroyed.
8.3. Registration of Transfers. Upon surrender to the Corporation
or any transfer agent of the Corporation of a certificate for
shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it shall be the
duty of the Corporation to issue a new certificate to the person
entitled thereto, to cancel the old certificate and to record the
transaction upon its books.
Section 9. DETERMINATION OF SHAREHOLDERS
9.1. Record Date. In order that the Corporation may determine
shareholders entitled to notice of and to vote at a meeting of
shareholders or any adjournment thereof, or to receive payment of
any dividend or other distribution or allotment of any rights, or
to exercise any right in respect of any exchange, conversion or
exchange of shares, or to participate in a reclassification of
stock, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors may fix in
advance a record date for determination of shareholders for such
purpose, such date to be not more than sixty days and, if fixed
for the purpose of determining shareholders entitled to notice of
and to vote at a meeting, not less than ten days, prior to the
date on which the action requiring the determination of
shareholders is to be taken. Except as the Board of Directors may
provide otherwise, if no record date is fixed for the purpose of
determining shareholders (a) entitled to notice of and to vote at
a meeting, the close of business on the day before the notice of
the meeting is mailed, or, if notice is waived, the close of
business on the day before the meeting, shall be the record date
for such purpose, or (b) for any other purpose, the close of
business on the day on which the Board of Directors adopts the
resolution relating thereto shall be the record date for such
purpose. A determination of shareholders of record entitled to
notice of or to vote at a meeting of shareholders shall apply to
any adjournment of the meeting; provided, however, that the Board
of Directors may fix a new record date for the adjourned meeting.
9.2. Registered Shareholders. Except as otherwise required by
law, the Corporation and its directors, officers and agents,
shall be entitled to recognize and treat a person registered on
its books as the owner of shares, as the owner in fact thereof
for all purposes, and as the person exclusively entitled to have
and to exercise all rights and privileges incident to the
ownership of such shares, and the rights under this Section 9.2
shall not be affected by any actual or constructive notice which
the Corporation, or any of its directors, officers or agents, may
have to the contrary.
Section 10. MISCELLANEOUS
10.1. Checks. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such
other person or persons as the Board of Directors or the
President and Chief Executive Officer may from time to time
designate.
10.2. Investment Accounts. The President and Chief Executive
Officer and such officers as he may from time to time designate
are hereby authorized and empowered to open and close accounts
for the Corporation with any person, partnership, or other entity
for the purpose of the purchase and sale of securities of
whatever type.
10.3. Other Accounts. The President and Chief Executive Officer
and such officer or officers as he may from time to time
designate are authorized and empowered to open and close one or
more accounts of any type or types with any one or more banks,
savings and loan associations, or other institutions and to make
deposits to, transfers to or from, withdrawals from such accounts
and to take any and all other actions with respect thereto as
they in their sole discretion shall deem necessary or advisable.
10.4. Purchase and Sale of Investment Securities. The President
and Chief Executive Officer and such officer or officers as the
President and Chief Executive Officer may from time to time
designate are hereby authorized and empowered to purchase and
sell, for and on behalf of the Corporation, any securities issued
by any corporation, partnership or other entity, in such amounts
and for such consideration as the President and Chief Executive
Officer or other designated officer or officers shall determine,
except that the President and Chief Executive Officer and such
designated officer or officers shall have no authority to sell
any shares of the capital stock of any subsidiary of the
Corporation owned by the Corporation.
10.5 Lending and Borrowing Funds. The Chief Executive Officer and
such officers as he may from time to time designate shall have
the authority to loan and borrow funds on behalf of the
Corporation in such amounts and on such terms, including the
pledge of assets, as they shall deem appropriate in furtherance
of the business of the Corporation, and, in connection with the
foregoing and the investment of proceeds of borrowings shall have
the authority to sign, execute, acknowledge, verify, deliver or
accept on behalf of the Corporation all agreements, contracts,
loan agreements, indentures, mortgages, security instruments,
satisfactions, settlements, powers of attorney, undertakings and
other instruments or documents in connection with the extension
or repayment of any lines of credit and/or the making or
repayment of any loans and investments.
10.6. Fiscal Year. The fiscal year shall be as determined from
time to time by the Board of Directors.
10.7. Seal. The corporate seal shall have inscribed thereon the
name of this Corporation, the year of its organization and the
words "Corporate Seal, Louisiana." The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or
otherwise reproduced. Failure to affix the corporate seal shall
not, however, affect the validity of any instrument
10.8. Gender. All pronouns and variations thereof used in these
By-laws shall be deemed to refer to the masculine, feminine or
neuter gender, singular or plural, as the identity of the person,
persons, entity or entities referred to require.
Section 11. INDEMNIFICATION
11.1. Definitions. As used in this Section the following terms
shall have the meanings set out below:
(a) "Board" - the Board of Directors of the Corporation.
(b) "Claim" - any threatened or pending or completed claim,
action, suit, or proceeding, whether civil, criminal,
administrative or investigative and whether made judicially or
extra-judicially, or any separate issue or matter therein, as the
context requires.
(c) "Determining Body" - (i) those members of the Board who are
not named as parties to the Claim for which indemnification is
being sought ("Impartial Directors"), if there are at least three
Impartial Directors, or (ii) a committee of at least three
directors appointed by the Board (regardless whether the members
of the Board of Directors voting on such appointment are
Impartial Directors) and composed of Impartial Directors or (iii)
if there are fewer than three Impartial Directors or if the Board
of Directors or the committee appointed pursuant to clause (ii)
of this paragraph so directs (regardless whether the members
thereof are Impartial Directors), independent legal counsel,
which may be the regular outside counsel of the Corporation.
(d) "Disbursing Officer" - the Chief Executive Officer of the
Corporation or, if the Chief Executive Officer is a party to the
Claim for which indemnification is being sought, any officer not
a party to such Claim who is designated by the Chief Executive
Officer to be the Disbursing Officer with respect to
indemnification requests related to the Claim, which designation
shall be made promptly after receipt of the initial request for
indemnification with respect to such Claim.
(e) "Expenses" - any expenses or costs (including, without
limitation, attorney's fees, judgments, punitive or exemplary
damages, fines and amounts paid in settlement).
(f) "Indemnitee" - each person who is or was a director or
officer of the Corporation.
11.2. Indemnity.
(a) To the extent such Expenses exceed the sum of amounts paid or
due under or pursuant to (i) policies of liability insurance
maintained by the Corporation, (ii) policies of liability
insurance maintained by or on behalf of the Indemnitee, and (iii)
provisions for indemnification in the by-laws, resolutions or
other instruments of any entity other than the Corporation, the
Corporation shall indemnify Indemnitee against any Expenses
actually and reasonably incurred by him (as they are incurred) in
connection with any Claim either against him or as to which he is
involved solely as a witness or person required to give evidence,
by reason of his position
(i) as a director or officer of the Corporation,
(ii) as a director or officer of any subsidiary of the
Corporation or as a fiduciary with respect to any employee
benefit plan of the Corporation, or
(iii) as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other for
profit or not for profit entity or enterprise, if such position
is or was held at the request of the Corporation, whether
relating to service in such position before or after the
effective date of this Section, if he (i) is successful in his
defense of the Claim on the merits or otherwise or (ii) has been
found by the Determining Body (acting in good faith) to have met
the Standard of Conduct; provided that (A) the amount otherwise
payable by the Corporation may be reduced by the Determining Body
to such amount as it deems proper if it determines that the Claim
involved the receipt of a personal benefit by Indemnitee, and (B)
no indemnification shall be made in respect of any Claim as to
which Indemnitee shall have been adjudged by a court of competent
jurisdiction, after exhaustion of all appeals therefrom, to be
liable for willful or intentional misconduct in the performance
of his duty to the Corporation or to have obtained an improper
personal benefit, unless, and only to the extent that, a court
shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case,
Indemnitee is fairly and reasonably entitled to indemnity for
such Expenses as the court deems proper.
(b) The Standard of Conduct is met when the conduct by an
Indemnitee with respect to which a Claim is asserted was conduct
that he reasonably believed to be in, or not opposed to, the best
interest of the Corporation, and, in the case of a criminal
action or proceeding, that he had no reasonable cause to believe
was unlawful. The termination of any Claim by judgment, order,
settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that
Indemnitee did not meet the Standard of Conduct.
(c) Promptly upon becoming aware of the existence of any Claim as
to which he may be indemnified hereunder, Indemnitee shall notify
the Chief Executive Officer of the Corporation of the Claim and
whether he intends to seek indemnification hereunder. If such
notice indicates that Indemnitee does so intend, the Chief
Executive Officer shall promptly advise the Board thereof and
notify the Board that the establishment of the Determining Body
with respect to the Claim will be a matter presented at the next
regularly scheduled meeting of the Board. After the Determining
Body has been established the Chief Executive Officer shall
inform the Indemnitee thereof and Indemnitee shall immediately
provide the Determining Body with all facts relevant to the Claim
known to him. Within 60 days of the receipt of such information,
together with such additional information as the Determining Body
may request of Indemnitee, the Determining Body shall determine,
and shall advise Indemnitee of its determination, whether
Indemnitee has met the Standard of Conduct. The Determining Body
may extend such sixty-day period by no more than an additional
sixty days.
(d) Indemnitee shall promptly inform the Determining Body upon
his becoming aware of any relevant facts not therefore provided
by him to the Determining Body, unless the Determining Body has
obtained such facts by other means. If, after determining that
the Standard of Conduct has been met, the Determining Body
obtains facts of which it was not aware at the time it made such
determination, the Determining Body on its own motion, after
notifying the Indemnitee and providing him an opportunity to be
heard, may, on the basis of such facts, revoke such
determination, provided that in the absence of actual fraud by
Indemnitee no such revocation may be made later than thirty days
after final disposition of the Claim.
(e) In the case of any Claim not involving a proposed, threatened
or pending criminal proceeding,
(i) If Indemnitee has, in the good faith judgment of the
Determining Body, met the Standard of Conduct, the Corporation
may, in its sole discretion after notice to Indemnitee, assume
all responsibility for the defense of the Claim, and, in any
event, the Corporation and the Indemnitee each shall keep the
other informed as to the progress of the defense, including
prompt disclosure of any proposals for settlement; provided that
if the Corporation is a party to the Claim and Indemnitee
reasonably determines that there is a conflict between the
positions of the Corporation and Indemnitee with respect to the
Claim, then Indemnitee shall be entitled to conduct his defense,
with counsel of his choice; and provided further that Indemnitee
shall in any event be entitled at his expense to employ counsel
chosen by him to participate in the defense of the Claim; and
(ii) The Corporation shall fairly consider any proposals by
Indemnitee for settlement of the Claim. If the Corporation (A)
proposes a settlement acceptable to the person asserting the
Claim, or (B) believes a settlement proposed by the person
asserting the Claim should be accepted, it shall inform
Indemnitee of the terms thereof and shall fix a reasonable date
by which Indemnitee shall respond. If Indemnitee agrees to such
terms, he shall execute such documents as shall be necessary to
effect the settlement. If he does not agree he may proceed with
the defense of the Claim in any manner he chooses, but if he is
not successful on the merits or otherwise, the Corporation's
obligation to indemnify him for any Expenses incurred following
his disagreement shall be limited to the lesser of (A) the total
Expenses incurred by him following his decision not to agree to
such proposed settlement or (B) the amount the Corporation would
have paid pursuant to the terms of the proposed settlement. If,
however, the proposed settlement would impose upon Indemnitee any
requirement to act or refrain from acting that would materially
interfere with the conduct of his affairs, Indemnitee may refuse
such settlement and proceed with the defense of the Claim, if he
so desires, at the Corporation's expense without regard to the
limitations imposed by the preceding sentence. In no event,
however, shall the Corporation be obligated to indemnify
Indemnitee for any amount paid in a settlement that the
Corporation has not approved.
(f) In the case of a Claim involving a proposed, threatened or
pending criminal proceeding, Indemnitee shall be entitled to
conduct the defense of the Claim, and to make all decisions with
respect thereto, with counsel of his choice; provided that the
Corporation shall not be obligated to indemnify Indemnitee for an
amount paid in settlement that the Corporation has not approved.
(g) After notifying the Corporation of the existence of a Claim,
Indemnitee may from time to time request the Corporation to pay
the Expenses (other than judgments, fines, penalties or amounts
paid in settlement) that he incurs in pursuing a defense of the
Claim prior to the time that the Determining Body determines
whether the Standard of Conduct has been met. If the Disbursing
Officer believes the amount requested to be reasonable, he shall
pay to Indemnitee the amount requested (regardless of
Indemnitee's apparent ability to repay such amount) upon receipt
of an undertaking by or on behalf of Indemnitee to repay such
amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation under the
circumstances. If the Disbursing Officer does not believe such
amount to be reasonable, the Corporation shall pay the amount
deemed by him to be reasonable and Indemnitee may apply directly
to the Determining Body for the remainder of the amount
requested.
(h) After it has been determined that the Standard of Conduct was
met, for so long as and to the extent that the Corporation is
required to indemnify Indemnitee under this Agreement, the
provisions of Paragraph (g) shall continue to apply with respect
to Expenses incurred after such time except that (i) no
undertaking shall be required of Indemnitee and (ii) the
Disbursing Officer shall pay to Indemnitee such amount of any
fines, penalties or judgments against him which have become final
as the Corporation is obligated to indemnify him.
(i) Any determination by the Corporation with respect to
settlements of a Claim shall be made by the Determining Body.
(j) The Corporation and Indemnitee shall keep confidential, to
the extent permitted by law and their fiduciary obligations, all
facts and determinations provided or made pursuant to or arising
out of the operation of this Agreement, and the Corporation and
Indemnitee shall instruct it or his agents and employees to do
likewise.
11.3. Enforcement.
(a) The rights provided by this Section shall be enforceable by
Indemnitee in any court of competent jurisdiction.
(b) If Indemnitee seeks a judicial adjudication of his rights
under this Section Indemnitee shall be entitled to recover from
the Corporation, and shall be indemnified by the Corporation
against, any and all Expenses actually and reasonably incurred by
him in connection with such proceeding but only if he prevails
therein. If it shall be determined that Indemnitee is entitled to
receive part but not all of the relief sought, then the
Indemnitee shall be entitled to be reimbursed for all Expenses
incurred by him in connection with such judicial adjudication if
the amount to which he is determined to be entitled exceeds 50%
of the amount of his claim. Otherwise, the Expenses incurred by
Indemnitee in connection with such judicial adjudication shall be
appropriately prorated.
(c) ln any judicial proceeding described in this subsection, the
Corporation shall bear the burden of proving that Indemnitee is
not entitled to any Expenses sought with respect to any Claim.
11.4. Saving Clause. If any provision of this Section is
determined by a court having jurisdiction over the matter to
require the Corporation to do or refrain from doing any act that
is in violation of applicable law, the court shall be empowered
to modify or reform such provision so that, as modified or
reformed, such provision provides the maximum indemnification
permitted by law, and such provision, as so modified or reformed,
and the balance of this Section, shall be applied in accordance
with their terms. Without limiting the generality of the
foregoing, if any portion of this Section shall be invalidated on
any ground, the Corporation shall nevertheless indemnify an
Indemnitee to the full extent permitted by any applicable portion
of this Section that shall not have been invalidated and to the
full extent permitted by law with respect to that portion that
has been invalidated.
11.5. Non-Exclusivity.
(a) The indemnification and advancement of Expenses provided by
or granted pursuant to this Section shall not be deemed exclusive
of any other rights to which Indemnitee is or may become entitled
under any statute, article of incorporation, by-law,
authorization of shareholders or directors, agreement, or
otherwise.
(b) It is the intent of the Corporation by this Section to
indemnify and hold harmless Indemnitee to the fullest extent
permitted by law, so that if applicable law would permit the
Corporation to provide broader indemnification rights than are
currently permitted, the Corporation shall indemnify and hold
harmless Indemnitee to the fullest extent permitted by applicable
law notwithstanding that the other terms of this Section would
provide for lesser indemnification.
11.6. Successors and Assigns. This Section shall be binding upon
the Corporation, its successors and assigns, and shall inure to
the benefit of the Indemnitee's heirs, personal representatives,
and assigns and to the benefit of the Corporation, its successors
and assigns.
11.7. Indemnification of Other Persons.
(a) The Corporation may indemnify any person not covered by
Sections 11.1 through 11.6 to the extent provided in a resolution
of the Board or a separate Section of these By-laws.
(b) Section 11 of these By-laws as in effect immediately prior to
the adoption of this Section 11.7 shall remain in effect with
respect to persons not covered by Section 11.1 through 11.6 to
the extent necessary to satisfy the Corporation's contractual
obligations entered into prior to such date to provide
indemnification to directors and officers of corporations or
banks acquired by the Corporation.
Section 12. AMENDMENTS
These By-laws may be altered, amended or repealed or new By-laws
may be adopted by the shareholders or by the Board of Directors
at any meeting of the shareholders or Board of Directors if
notice of such action is contained in the notice of such meeting;
provided, however, that no notice shall be necessary for any
proposed amendment adopted at any regular or special meeting of
the Board of Directors by a vote of more than three-fourths of
the directors then in office. By-laws adopted by the shareholders
may be altered, amended or repealed by the Board of Directors.
APPENDIX
Section 11 of the By-laws as in effect immediately prior to the
adoption of current Section 11:
The Corporation shall indemnify its officers and directors, and
may indemnify its former officers, former directors, present or
former employees and agents, and directors, officers, employees
and agents of other organizations, and may procure insurance on
behalf of such persons against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement to the
full extent permitted by Section 83 of the Louisiana Business
Corporation Law, as heretofore or hereafter amended.
For purposes of this Section, the "Corporation" shall include, in
addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent) absorbed
in a consolidation or merger which, if its separate existence had
continued, would have had power and authority to indemnify its
directors, officers, employees or agents, so that any person
entitled to be indemnified by the constituent corporation shall
stand in the same position with respect to the indemnification
from the resulting or surviving corporation as he would have with
respect to such constituent if its separate existence had
continued; provided, however,k that with respect to any such
constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which becomes
effective on or after October 1, 1987, this Section 11 shall
permit, but shall not require, the Corporation to indemnify the
officers and directors thereof for acts in their capacities as
such prior to such consolidation or merger to the full extent
permitted by Section 83 of the Louisiana Business Corporation
Law, as heretofore or hereafter amended.
EXHIBIT 10.1
AMENDMENT NO. 8
TO THE
FIRST COMMERCE CORPORATION
1985 STOCK OPTION PLAN
WHEREAS, the 1985 Stock Option Plan (the "Plan") was adopted
by the First Commerce Corporation (the "Company") Board of
Directors on February 25, 1985 and approved by the Company's
shareholders on March 18, 1985; and
WHEREAS, the Plan has been amended seven times in various
respects since its adoption; and
WHEREAS, the Board of Directors desires to amend the Plan at
this time to enable the Company to utilize treasury shares as
well as newly issued shares upon the exercise of stock options
granted under the Plan;
NOW THEREFORE, Paragraph 1 of Article V of the Plan is
hereby amended to read in its entirety as follows:
Subject to adjustments under Article XIV of the
Plan, the maximum number of shares of stock for which
Options may be granted and which may be issued as
shares of restricted stock pursuant to the Plan shall
be 1,500,000 shares of Common Stock (adjusted to
reflect a 50% stock dividend paid on January 11, 1993)
either from authorized but heretofore unissued stock,
from previously issued stock held as treasury stock or
from stock reacquired by the Company upon lapse or
cancellation of Options prior to their exercise in
full. However, non-qualified stock options that are
cancelled by the exercise of underlying stock
appreciation rights are not subject to reissuance under
the Plan.
Date adopted by the Board of Directors: _________________.
FIRST COMMERCE CORPORATION
Dated: _____________ By:
Title:
<PAGE>
AMENDMENT NO. 9 TO THE
FIRST COMMERCE CORPORATION
1985 STOCK OPTION PLAN
WHEREAS, the 1985 Stock Option Plan (the "Plan") was adopted
by the First Commerce Corporation (the "Company") Board of
Directors on February 25, 1985 and approved by the Company's
shareholders on March 18, 1985; and
WHEREAS, the Plan has been amended eight times in various
respects since its adoption; and
WHEREAS, the Board of Directors desires to amend the Plan at
this time to permit participants to deliver shares of First
Commerce Corporation Common Stock to satisfy tax liability that
may arise in connection with the exercise of stock options or the
vesting of restricted stock under the Plan and to provide that
the procedures specified in the Plan to be followed by a person
subject to Section 16 of the Securities Exchange Act of 1934 in
connection with an election to have shares withheld to satisfy a
tax withholding obligation must only be complied with if the
participant wishes the stock withholding transaction to be exempt
from Section 16 liability; and
WHEREAS, the Board of Directors desires to amend the Plan to
permit loans by the Company to participants in the Plan to assist
in the payment of the stock option exercise price and the tax
liability that arises in connection with an incentive granted
under the Plan;
NOW THEREFORE, the Plan is hereby amended as follows:
I.
The definition of "Committee" in Paragraph 1(c) of the Plan
is hereby amended in accordance with the amended By-laws of the
Company to read in its entirety as follows:
(c) "Committee" - the Compensation Committee as
established under the By-laws of the Company.
The term "Compensation Committee" shall be substituted for
the term "Stock Option Committee" wherever such term appears in
the Plan.
II.
Article XXI is hereby amended to read in its entirety as
follows:
ARTICLE XXI
Withholding
At any time that a participant is required to pay
to the Company an amount required to be withheld under
the applicable income tax laws in connection with the
issuance of shares of Common Stock under the Plan or
upon the lapse of restrictions on shares of restricted
stock, the participant may, subject to the Committee's
right of disapproval, satisfy this obligation in whole
or in part by electing (the "Election") to have the
Company withhold from the distribution shares of Common
Stock having a value equal to the amount required to be
withheld. The value of the shares withheld shall be
based on the Fair Market Value of the Common Stock on
the date that the amount of tax to be withheld shall be
determined (the "Tax Date").
Each Election must be made prior to the Tax Date. The
Committee may disapprove of any Election or may suspend or
terminate the right to make Elections. If a participant
makes an election under Section 83(b) of the Internal
Revenue Code with respect to shares of restricted stock, an
Election is not permitted to be made.
If a participant is an officer of the Company within
the meaning of Section 16 of the Exchange Act, then the
exemption provided by Rule 16b-3(e) under the Exchange Act
for the stock withholding transaction will only be available
if the Election meets the following additional provisions:
(a) No Election shall be effective for a Tax Date
that occurs within six months of the grant of the
option or restricted stock.
(b) The Election must be made either (i) six
months prior to the Tax Date or (ii) during a period
beginning on the third business day following the date
of release for publication of the Company's quarterly
or annual summary statements of earnings and ending on
the twelfth business day following such date (a "window
period"). If the Election is made under (b)(ii) hereof
and relates to the exercise of an option, the exercise
must also occur during a window period.
(c) The Election is irrevocable except upon six
months' advance written notice to the Company.
A participant may also satisfy his or her total
tax liability related to the Incentive by delivering
shares of Common Stock that have been owned by the
participant for at least six months. Satisfaction of
the tax obligation through the use of previously owned
shares does not require compliance with the procedures
described above applicable to an Election to have
shares withheld from the shares otherwise issuable
under the Incentive. The value of the shares delivered
shall be based on the Fair Market Value of the Common
Stock on the Tax Date.
III.
A new Article XXIII entitled "Loans" is hereby added to the
Plan to read in its entirety as follows:
ARTICLE XXIII
Loans
In order to assist a participant to acquire shares
of Common Stock pursuant to an Incentive granted under
the Plan and to assist a participant to satisfy his tax
liabilities arising in connection with such Incentive,
the Committee may authorize, at either the time of the
grant of the Incentive, at the time of the acquisition
of Common Stock pursuant to the Incentive, or at the
time of the lapse of restrictions on shares of
restricted stock granted under the Plan, the extension
of a loan to the participant by the Company. The terms
of any loans, including the interest rate, collateral
and terms of repayment, will be subject to the
discretion of the Committee. The maximum credit
available hereunder shall be the purchase price, if
any, of the Common Stock acquired pursuant to the
Incentive, plus the maximum tax liability that may be
incurred in connection with the acquisition.
Adopted by the Board of Directors: December 20, 1993.
FIRST COMMERCE CORPORATION
By:
Dated: ________________
EXHIBIT 10.2
FIRST COMMERCE CORPORATION
AMENDED AND RESTATED
1992 STOCK INCENTIVE PLAN
Section 1. Purpose. The purpose of the First Commerce
Corporation 1992 Stock Incentive Plan (the "Plan") is to increase
shareholder value and to advance the interests of First Commerce
Corporation ("FCC") and its subsidiaries (collectively, the
"Company") by granting stock options, stock appreciation rights,
stock awards, restricted stock and performance share awards (the
"Incentives") to key officers of the Company in order to attract,
retain and motivate these officers.
Section 2. Administration.
Section 2.1 Composition. The Plan shall be
administered by the Compensation Committee (the "Committee")
of the Board of Directors of FCC. The Committee shall
consist of not fewer than two members of the Board of
Directors, all of whom shall (a) to the extent required,
qualify to administer the Plan under Rule 16b-3 under the
Securities Exchange Act of 1934 (the "Exchange Act") as
currently in effect or any successor rule, and (b) beginning
on the date of the Company's 1995 annual meeting of
shareholders, qualify as "outside directors" under Section
162(m) of the Internal Revenue Code of 1986, as amended (the
"Code").
Section 2.2 Authority. The Committee shall have
plenary authority to award Incentives under the Plan, to set
the terms of such Incentives, to interpret the Plan, to
establish any rules or regulations relating to the Plan that
it determines to be appropriate, and to make any other
determination that it believes necessary or advisable for
the proper administration of the Plan. Its decisions in
matters relating to the Plan shall be final and conclusive
on the Company and participants. The Committee may delegate
its authority hereunder to the extent provided elsewhere
herein.
Section 3. Eligible Participants. Employees of the
Company holding the position of assistant vice-president or above
(including directors who also hold positions of assistant vice-
president or above) who, in the opinion of the Committee have
significant responsibility for the continued growth, development
and financial success of the Company shall become eligible to
receive Incentives under the Plan when designated by the
Committee. Participants may be designated individually or by
groups or categories as the Committee deems appropriate. With
respect to participants not subject to Section 16 of the Exchange
Act and not covered employees under Section 162(m) of the Code,
the Committee may delegate to the Chief Executive Officer of FCC
its authority to designate participants, to determine the size
and type of Incentive to be received by those participants and to
determine or modify performance objectives for those
participants, subject to ratification by the Committee.
Section 4. Types of Incentives. Incentives may be granted
under the Plan in any of the following forms, either individually
or in combination, (a) incentive stock options and non-qualified
stock options; (b) stock appreciation rights ("SARs"); (c) stock
awards; (d) restricted stock and (e) performance shares.
Section 5. Shares Subject to the Plan.
Section 5.1 Number of Shares. Subject to adjustment
as provided in Section 11.5, the total number of shares of
FCC common stock, $5.00 par value per share (the "Common
Stock"), with respect to which Incentives may be granted
under the Plan shall not exceed ten percent of the total
number of outstanding shares of Common Stock during the
effectiveness of the Plan. In addition, Incentives that may
be paid in shares of Common Stock granted in any one year
shall not exceed one percent of the total number of shares
outstanding and the aggregate of Incentives that may be paid
in shares of Common Stock and Incentives that must be paid
in cash granted in one year shall not exceed five percent of
the total number of shares outstanding. Incentives with
respect to no more than 100,000 shares of Common Stock may
be granted through the Plan to a single participant in one
calendar year. If and to the extent that an Incentive is
paid in cash rather than shares of Common Stock, the total
number of shares available for issuance during the
effectiveness of the Plan hereunder shall be credited with
the appropriate number of shares represented by the cash
payment of the Incentive, as determined in the sole
discretion of the Committee.
Section 5.2 Cancellation. If a stock option or stock
appreciation right granted hereunder expires or is
terminated or cancelled as to any shares of Common Stock,
such shares may again be issued under the Plan. If shares
of Common Stock are issued as restricted stock or as stock
awards and thereafter are forfeited or reacquired by the
Company pursuant to rights reserved upon issuance thereof,
such forfeited and reacquired shares may again be issued
under the Plan, if such issuance does not result in a
violation of Rule 16-3 under the Act or any successor rule.
The Committee may also determine to cancel, and agree to the
cancellation of, stock options and stock appreciation rights
in order to grant new stock options or stock appreciation
rights to the same participant at a lower price than the
options or stock appreciation rights to be cancelled.
Section 5.3 Type of Common Stock. Common Stock
issued under the Plan in connection with Incentives may be
authorized and unissued shares or issued shares held as
treasury shares.
Section 5.4 Reinvestment of Dividends. Shares of
Common Stock that are delivered to a participant in the Plan
as a result of the reinvestment of dividends in conjunction
with restricted stock shall be applied against the maximum
number of shares provided in Section 5.1.
Section 6. Stock Options. A stock option is a right to
purchase shares of Common Stock from the Company. Each stock
option granted by the Committee under the Plan shall be subject
to the following terms and conditions:
Section 6.1 Price. The option price per share shall
be equal to the Fair Market Value (as defined in Section
11.11) of a share of Common Stock on the date of grant,
subject to adjustment under Section 11.5.
Section 6.2 Number. The number of shares of Common
Stock subject to the option shall be determined by the
Committee, subject to adjustment as provided in Section
11.5.
Section 6.3 Duration and Time for Exercise. The term
of each option shall be determined by the Committee. Each
option shall become exercisable at such time or times during
its term as shall be determined by the Committee and as
provided in Section 11.10; provided, however, that, except
as provided in Section 11.10, no stock option shall be
exercisable within the six month period immediately
following the date of grant and, unless otherwise provided
in the stock option agreement, all stock options shall
expire (a) 12 months from the date of termination of
employment as the result of death or disability, (b) six
months and one day after termination of employment as a
result of retirement and (c) immediately if employment
terminates for any other reason, including resignation and
termination for cause. The Committee may in its discretion
extend the term of options which would otherwise expire as a
result of resignation or termination for cause. The
Committee may also impose such terms and conditions to the
exercise of each option as it deems advisable and may
accelerate the exercisability of any outstanding option at
any time in its sole discretion.
Section 6.4 Repurchase. Upon approval of the
Committee, the Company may repurchase a previously granted
stock option from a participant by mutual agreement before
such option has been exercised by payment to the participant
of the amount per share by which: (a) the Fair Market Value
of the Common Stock subject to the option on the date of
purchase exceeds (b) the option price.
Section 6.5 Manner of Exercise. A stock option may
be exercised, in whole or in part, by giving written notice
to the Company, specifying the number of shares of Common
Stock to be purchased. The exercise notice shall be
accompanied by the full purchase price for such shares. The
option price shall be payable in United States dollars and
may be paid (a) by cash, uncertified or certified check or
bank draft, (b) by delivery of shares of Common Stock held
by the optionee for at least six months in payment of all or
any part of the option price, which shares shall be valued
for this purpose at the Fair Market Value on the date such
option is exercised, (c) by delivering a properly executed
exercise notice together with irrevocable instructions to a
broker approved by the Company (with a copy to the Company)
to promptly deliver to the Company the amount of sale or
loan proceeds to pay the exercise price or (d) in such other
manner as may be authorized from time to time by the
Committee. Shares of Common Stock delivered in payment of
the exercise price that were acquired upon the exercise of a
stock option are deemed to have been held from the date of
grant of the stock option. In the case of delivery of an
uncertified check or bank draft upon exercise of a stock
option, no shares shall be issued until the check or draft
has been paid in full. Prior to the issuance of shares of
Common Stock upon the exercise of a stock option, a
participant shall have no rights as a stockholder.
Section 6.6 Incentive Stock Options. Notwithstanding
anything in the Plan to the contrary, the following
additional provisions shall apply to the grant of stock
options that are intended to qualify as incentive stock
options (as such term is defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"):
(a) Any incentive stock option authorized under
the Plan shall contain such other provisions as the
Committee shall deem advisable, but shall in all events
be consistent with and contain or be deemed to contain
all provisions required in order to qualify the options
as incentive stock options;
(b) All incentive stock options must be granted
within ten years from the date on which this Plan was
adopted by the Board of Directors;
(c) Unless sooner exercised, all incentive stock
options shall expire no later than ten years after the
date of grant;
(d) No incentive stock option shall be granted to
any participant who, at the time such option is
granted, would own (within the meaning of Section 422
of the Code) stock possessing more than 10% of the
total combined voting power of all classes of stock of
the employer corporation or of its parent or subsidiary
corporation; and
(e) The aggregate Fair Market Value (determined
with respect to each incentive stock option as of the
time such incentive stock option is granted) of the
Common Stock with respect to which incentive stock
options are exercisable for the first time by a
participant during any calendar year (under the Plan or
any other plan of the Company) shall not exceed
$100,000. To the extent that such limitation is
exceeded, such options shall not be treated, for
federal income tax purposes, as incentive stock
options.
Section 6.7 Non-Transferability of Options. Options
granted under the Plan shall not be transferable otherwise
than by will or by the laws of descent and distribution or
pursuant to a qualified domestic relations order, as defined
by the Code, and options may be exercised during the
lifetime of a participant only by the participant or by the
participant's guardian or legal representative. Any
attempted assignment, transfer, pledge, hypothecation or
other disposition of an option, or levy of attachment or
similar process upon the option not specifically permitted
herein shall be null and void and without effect.
Section 7. Restricted Stock
Section 7.1 Grant of Restricted Stock. The Committee
may award shares of restricted stock to such key employees
as the Committee determines to be eligible pursuant to the
terms of Section 3. An award of restricted stock may be
subject to the attainment of specified performance goals or
targets, restrictions on transfer, forfeitability provisions
and on such other terms and conditions as the Committee may
determine, subject to the provisions of the Plan. To the
extent restricted stock is intended to qualify as
performance based compensation under Section 162(m) of the
Code, it must meet the additional requirements imposed
thereby.
Section 7.2 Award and Delivery of Restricted Stock.
At the time an award of restricted stock is made, the
Committee shall establish a period of time (the "Restricted
Period") applicable to such an award. Each award of
restricted stock may have a different Restricted Period.
The Committee may, in its sole discretion, prescribe
conditions for the lapse of restrictions upon death,
disability, retirement or other termination of employment or
for the lapse or termination of restrictions upon the
satisfaction of other conditions in addition to or other
than the expiration of the Restricted Period with respect to
all or any portion of the shares of restricted stock. In
addition, any participant subject to Section 16 of the
Exchange Act shall be prohibited from selling shares of
restricted stock for a period of six months from the grant
thereof. The Committee shall have the power to accelerate
the expiration of the Restricted Period with respect to all
or any part of the shares awarded to a participant and the
expiration of the Restricted Period shall automatically
occur under the conditions described in Section 11.10
hereof.
Section 7.3 Escrow. In order to enforce the
restrictions imposed by the Committee pursuant to this
Section 7, the participant receiving restricted stock shall
enter into an agreement with the Company setting forth the
conditions of the grant. Certificates representing shares
of restricted stock shall be registered in the name of the
participant and deposited with the Company, together with a
stock power endorsed in blank by the participant. Each such
certificate shall bear a legend in substantially the
following form:
The transferability of this certificate and the
shares of Common Stock represented by it are
subject to the terms and conditions (including
conditions of forfeiture) contained in the First
Commerce Corporation 1992 Stock Incentive Plan
(the "Plan"), and an agreement entered into
between the registered owner and First Commerce
Corporation. Copies of the Plan and the agreement
are on file at the principal office of the
Company.
Section 7.4 Dividends on Restricted Stock. Any and
all cash and stock dividends paid with respect to the shares
of restricted stock shall be subject to any restrictions on
transfer, forfeitability provisions or reinvestment
requirements as the Committee may, in its discretion,
determine.
Section 7.5 Forfeiture. Upon the forfeiture of any
restricted stock (including any additional shares of
restricted stock that may result from the reinvestment of
cash and stock dividends in accordance with such rules as
the Committee may establish pursuant to Section 7.4), such
forfeited shares shall be surrendered. The participants
shall have the same rights and privileges, and be subject to
the same forfeiture provisions with respect to any
additional shares received pursuant to Section 11.5 due to a
recapitalization, merger or other change in capitalization.
Section 7.6 Expiration of Restricted Period. Upon the
expiration or termination of the Restricted Period and the
satisfaction of any other conditions prescribed by the
Committee or at such earlier time as provided for in Section
7.2 and in the restricted stock agreement, the restrictions
applicable to the restricted stock shall lapse and a stock
certificate for the number of shares of restricted stock
with respect to which the restrictions have lapsed shall be
delivered, free of all such restrictions, except any that
may be imposed by law, to the participant or the
participant's estate, as the case may be.
Section 7.7 Rights as a Stockholder. Subject to the
terms and conditions of the Plan and subject to any
restrictions on the receipt of dividends that may be imposed
by the Committee, each participant receiving restricted
stock shall have all the rights of a stockholder with
respect to shares of stock during any period in which such
shares are subject to forfeiture and restrictions on
transfer, including without limitation, the right to vote
such shares. Unless otherwise restricted by the Committee,
dividends paid in cash or property, other than Common Stock
with respect to shares of restricted stock, shall be paid to
the participant currently.
Section 8. Stock Appreciation Rights. A SAR is a right to
receive, without payment to the Company, a number of shares of
Common Stock, cash or any combination thereof, the amount of
which is determined pursuant to the formula set forth in Section
8.4. A SAR may be granted (a) with respect to any stock option
granted under the Plan, either concurrently with the grant of
such stock option or at such later time as determined by the
Committee (as to all or any portion of the shares of Common Stock
subject to the stock option), or (b) alone, without reference to
any related stock option. Each SAR granted by the Committee
under the Plan shall be subject to the following terms and
conditions:
Section 8.1 Number. Each SAR granted to any
participant shall relate to such number of shares of Common
Stock as shall be determined by the Committee, subject to
adjustment as provided in Section 11.5. In the case of a
SAR granted with respect to a stock option, the number of
shares of Common Stock to which the SAR pertains shall be
reduced in the same proportion that the holder of the option
exercises the related stock option.
Section 8.2 Duration. The term of each SAR shall be
determined by the Committee. Unless otherwise provided by
the Committee, each SAR shall become exercisable at such
time or times, to such extent and upon such conditions as
the stock option, if any, to which it relates is
exercisable. No SAR granted to an officer subject to
Section 16 of the Exchange Act may be exercised during the
first six months of its term. Notwithstanding the
foregoing, the Committee may in its discretion accelerate
the exercisability of any SAR.
Section 8.3 Exercise. A SAR may be exercised, in
whole or in part, by giving written notice to the Company,
specifying the number of SARs that the holder wishes to
exercise. The date that the Company receives such written
notice shall be referred to herein as the "Exercise Date."
The Company shall, within 30 days of an Exercise Date,
deliver to the exercising holder certificates for the shares
of Common Stock or cash or both, as determined by the
Committee, to which the holder is entitled pursuant to
Section 8.4.
Section 8.4 Payment. Subject to the right of the
Committee to deliver cash in lieu of shares of Common Stock,
the number of shares of Common Stock that shall be issuable
upon the exercise of an SAR shall be determined by dividing:
(a) the number of shares of Common Stock as to
which the SAR is exercised multiplied by the amount of
the appreciation in such shares (for this purpose, the
"appreciation" shall be the amount by which the Fair
Market Value of the shares of Common Stock subject to
the SAR on the Exercise Date exceeds (1) in the case of
a SAR related to a stock option, the purchase price of
the shares of Common Stock under the stock option or
(2) in the case of a SAR granted alone, without
reference to a related stock option, an amount equal to
the Fair Market Value of a share of Common Stock on the
date of grant, which shall be determined by the
Committee at the time of grant, subject to adjustment
under Section 11.5); by
(b) the Fair Market Value of a share of Common
Stock on the Exercise Date.
In lieu of issuing shares of Common Stock upon the
exercise of a SAR, the Committee may elect to pay the holder
of the SAR cash equal to the Fair Market Value on the
Exercise Date of any or all of the shares which would
otherwise be issuable. No fractional shares of Common Stock
shall be issued upon the exercise of a SAR; instead, the
holder of a SAR shall be entitled to receive a cash
adjustment equal to the same fraction of the Fair Market
Value of a share of Common Stock on the Exercise Date or to
purchase the portion necessary to make a whole share at its
Fair Market Value on the Exercise Date.
Section 9.Stock Awards. A stock award consists of the
transfer by the Company to a participant of shares of Common
Stock, without other payment therefor, as additional compensation
for services previously provided to the Company. The number of
shares to be transferred by the Company to a participant pursuant
to a stock award shall be determined by the Committee. To the
extent a stock award is intended to qualify as performance based
compensation under Section 162(m) it must meet the additional
requirements imposed thereby.
Section 10.Performance Shares. A performance share consists
of an award that may be paid in shares of Common Stock or in
cash, as described below. The award of performance shares shall
be subject to such terms and conditions as the Committee deems
appropriate, including the following:
Section 10.1 Performance Objectives. Each
performance share will be subject to performance objectives
for the Company or one of its subsidiaries or departments to
be achieved by the end of a specified period. The number of
performance shares awarded shall be determined by the
Committee and may be subject to such terms and conditions,
as the Committee shall determine. If the performance
objectives are achieved, each participant will be paid (a) a
number of shares of Common Stock equal to the number of
performance shares initially granted to that participant;
(b) a cash payment equal to the Fair Market Value of such
number of shares of Common Stock on the date the performance
objectives are met or such other date as may be provided by
the Committee or (c) a combination of shares of Common Stock
and cash, as may be provided by the Committee. If such
objectives are not met, each award of performance shares may
provide for lesser payments in accordance with the
established formula. To the extent a performance share is
intended to qualify as performance based compensation under
Section 162(m) of the Code, it must meet the additional
requirements imposed thereby.
Section 10.2 Not a Shareholder. The award of
performance shares to a participant shall not create any
rights in such participant as a shareholder of the Company,
until the payment of shares of Common Stock with respect to
an award.
Section 10.3 Dividend Equivalent Payments. A
performance share award may be granted by the Committee in
conjunction with dividend equivalent payment rights or other
such rights. If so granted, an adjustment shall be made in
performance shares awarded on account of cash dividends that
may be paid or other rights that may be issued to the
holders of Common Stock prior to the end of any period for
which performance objectives were established.
Section 10.4 Non-transferability of Performance
Shares. No performance share may be transferred, pledged or
assigned by the holder thereof (except, in the event of the
holder's death, by will or the laws of descent and
distribution) and the Company shall not be required to
recognize any attempted assignment of such performance share
by any participant.
Section 11. General.
Section 11.1 Duration. The Plan shall remain in
effect until all Incentives granted under the Plan have
either been satisfied by the issuance of shares of Common
Stock or the payment of cash or been terminated under the
terms of the Plan and all restrictions imposed on shares of
restricted stock in connection with their issuance under the
Plan have lapsed.
Section 11.2 Effect of Termination of Employment or
Death. If a participant ceases to be an employee of the
Company for any reason, including death, any Incentives may
be exercised or shall expire as provided herein or as may be
determined by the Committee in the Incentive Agreement.
Section 11.3 Legal and Other Requirements. The
obligation of the Company to sell and deliver Common Stock
under the Plan shall be subject to all applicable laws,
regulations, rules and approvals, including, but not by way
of limitation, the effectiveness of a registration statement
under the Securities Act of 1933 if deemed necessary or
appropriate by the Company.
Section 11.4 Non-transferability of Common Stock.
Any shares of Common Stock awarded to a participant subject
to Section 16 of the Exchange Act through a stock award, as
restricted stock or in payment of a performance share award
must be held for a period of six months from the date of
grant, unless otherwise permitted to be transferred and
still be in compliance with Rule 16b-3 under the Exchange
Act.
Section 11.5 Adjustment. In the event of any merger,
consolidation or reorganization of the Company with any
other corporation or corporations, there shall be
substituted for each of the shares of Common Stock then
subject to the Plan, including shares subject to
restrictions, options, or achievement of performance share
objectives, the number and kind of shares of stock or other
securities to which the holders of the shares of Common
Stock will be entitled pursuant to the transaction. In the
event of any recapitalization, stock dividend, stock split,
combination of shares or other change in the Common Stock,
the number of shares of Common Stock then subject to the
Plan, including shares subject to restrictions, options or
achievement of performance share objectives, shall be
adjusted in proportion to the change in outstanding shares
of Common Stock. In the event of any such adjustments, the
purchase price of any option, the performance objectives of
any Incentive, and the shares of Common Stock issuable
pursuant to any Incentive shall be adjusted as and to the
extent appropriate, in the reasonable discretion of the
Committee, to provide participants with the same relative
rights before and after such adjustment.
Section 11.6 Incentive Agreements. The terms of each
Incentive shall be stated in an agreement approved by the
Committee. The Committee may also determine to enter into
agreements with holders of options to reclassify or convert
certain outstanding options, within the terms of the Plan,
as incentive stock options or as non-qualified stock options
with respect to all or part of such options and any other
previously issued options. Notwithstanding anything to the
contrary contained in the Plan, the Company is under no
obligation to grant an Incentive to a participant or
continue an Incentive in force unless the participant
executes all appropriate agreements with respect to such
Incentives in such form as the Committee may determine from
time to time.
Section 11.7 Withholding. At any time that a
participant is required to pay to the Company an amount
required to be withheld under the applicable income tax laws
in connection with the issuance of shares of Common Stock
under the Plan or upon the lapse of restrictions on shares
of restricted stock, the participant may, subject to the
Committee's right of disapproval, satisfy this obligation in
whole or in part by electing (the "Election") to have the
Company withhold from the distribution shares of Common
Stock having a value equal to the amount required to be
withheld. The value of the shares withheld shall be based
on the Fair Market Value of the Common Stock on the date
that the amount of tax to be withheld shall be determined
(the "Tax Date").
Each Election must be made prior to the Tax Date. The
Committee may disapprove of any Election or may suspend or
terminate the right to make Elections. If a participant
makes an election under Section 83(b) of the Internal
Revenue Code with respect to shares of restricted stock, an
Election is not permitted to be made.
If a participant is an officer of the Company within
the meaning of Section 16 of the Exchange Act, then the
exemption provided by Rule 16b-3(e) under the Exchange Act
for the stock withholding transaction will only be available
if the Election meets the following additional provisions:
(a) No Election shall be effective for a Tax Date
that occurs within six months of the grant of the
option or restricted stock.
(b) The Election must be made either (i) six
months prior to the Tax Date or (ii) during a period
beginning on the third business day following the date
of release for publication of the Company's quarterly
or annual summary statements of earnings and ending on
the twelfth business day following such date (a "window
period"). If the Election is made under (b)(ii) hereof
and relates to the exercise of an option, the exercise
must also occur during a window period.
(c) The Election is irrevocable except upon six
months' advance written notice to the Company.
A participant may also satisfy his or her total tax
liability related to the Incentive by delivering shares of
Common Stock that have been owned by the participant for at
least six months. Satisfaction of the tax obligation
through the use of previously owned shares does not require
compliance with the procedures described above applicable to
an Election to have shares withheld from the shares
otherwise issuable under the Incentive. The value of the
shares delivered shall be based on the Fair Market Value of
the Common Stock on the Tax Date.
Section 11.8 No Continued Employment. No participant
in the Plan shall have any right, because of his or her
participation, to continue in the employ of the Company for
any period of time or to any right to continue his or her
present or any other rate of compensation.
Section 11.9 Amendment of the Plan. The Board may
amend or discontinue the Plan at any time; provided,
however, that no such amendment or discontinuance shall
change or impair, without the consent of the recipient, an
Incentive previously granted and; further provided that if
any such amendment requires shareholder approval to meet the
requirements of Rule 16b-3 under the Exchange Act or any
successor rule such amendment shall be subject to the
approval of the shareholders of FCC.
Section 11.10 Immediate Acceleration of Incentives.
Notwithstanding any provision in this Plan or in any
Incentive Agreement to the contrary, except a provision in
an Incentive Agreement that provides that an Incentive will
in no case be earned unless the prescribed performance goals
are met and no acceleration of vesting will occur under the
terms of this provision, (a) the restrictions on all shares
of restricted stock awarded shall lapse immediately and (b)
all outstanding options and SARs shall become exercisable
immediately and (c) all performance goals established with
respect to any Incentives will be deemed to be met and
payment made immediately, if any of the following events
occur, unless otherwise determined by the Board of Directors
and a majority of the Continuing Directors (as defined
below):
(a) any person or group of persons, other than
any employee benefit plan of the Company, or related
trust, initially becomes the beneficial owner of
securities representing 40% or more of the total voting
power of FCC;
(b) a majority of the members of the Board of
Directors of FCC is replaced within any period of less
than two years by directors not nominated and approved
by the Board of Directors; or
(c) the stockholders of FCC approve a
reorganization, merger or consolidation, in each case,
with respect to which the individuals and entities who
were the respective beneficial owners of the Common
Stock and other voting securities of FCC immediately
prior to such reorganization, merger, or consolidation
do not, following such reorganization, merger or
consolidation, beneficially own, directly or
indirectly, more than 80% of, respectively, the then
outstanding shares of Common Stock and the combined
voting power of the then outstanding voting securities
entitled to vote generally in the election of
directors, as the case may be, of the corporation
resulting from such reorganization, merger or
consolidation, or a complete liquidation or dissolution
of FCC or the sale or other disposition of all or
substantially all of the assets of FCC;
provided that, if a participant directs the Committee
in writing prior to the occurrence of any such event
(an "Acceleration Notice") then the restrictions on
that participant's shares shall lapse and the stock
options held by that participant shall become
exercisable only to the extent specified in the
Acceleration Notice.
For the purposes of this Section 11.10, beneficial
ownership by a person or group of persons shall be
determined in accordance with Regulation 13D (or any similar
successor regulation) promulgated by the Securities and
Exchange Commission under the Exchange Act. Beneficial
ownership of securities representing more than 30% of the
total voting power may be established by any reasonable
method, but shall be presumed conclusively as to any person
who files a Schedule 13D report with the Securities and
Exchange Commission reporting such ownership. If the
restrictions and non-exercisability periods are eliminated
by reason of provision (a), the limitations of this Plan
shall not become applicable again should the person or group
cease to own securities representing 30% or more of the
voting power of FCC.
For purposes of this Section 11.10, "Continuing
Directors" are directors (i) who were in office prior to the
time any of provisions (a), (b) or (c) occurred or any
person publicly announced an intention to acquire securities
representing 20% or more of the voting power of FCC, (ii)
directors in office for a period of more than two years, and
(iii) directors nominated and approved by the Continuing
Directors.
Section 11.11 Definition of Fair Market Value. "Fair
Market Value" of the Common Stock on any date shall be
deemed to be the final closing sale price per share of
Common Stock on the trading day immediately prior to such
date. If the Common Stock is listed upon an established
stock exchange or exchanges or any automated quotation
system that provides sale quotations, such fair market value
shall be deemed to be the closing price of the Common Stock
on such exchange or quotation system, or if no sale of the
Common Stock shall have been made on that day, on the next
preceding day on which there was a sale of such stock. If
the Common Stock is not listed on any exchange or quotation
system, but bid and asked prices are quoted and published,
such fair market value shall be the mean between the quoted
bid and asked price on the day the option is granted, and if
bid and asked quotations are not available on such day, on
the latest preceding day. If the Common Stock is not
actively traded, or quoted, such fair market value shall be
established by the Committee based upon a good faith effort
to value the Common Stock.
Section 11.12 Deferral Permitted. Payment of cash or
distribution of any shares of Common Stock to which a
participant is entitled under any Incentive shall be made as
provided in the Incentive Agreement. Payment may be
deferred at the option of the participant if provided in the
Incentive Agreement.
Section 11.13 Loans. In order to assist a participant
to acquire shares of Common Stock pursuant to an Incentive
granted under the Plan and to assist a participant to
satisfy his tax liabilities arising in connection with such
Incentive, the Committee may authorize, at either the time
of the grant of the Incentive, at the time of the
acquisition of Common Stock pursuant to the Incentive, or at
the time of the lapse of restrictions on shares of
restricted stock granted under the Plan, the extension of a
loan to the participant by the Company. The terms of any
loans, including the interest rate, collateral and terms of
repayment, will be subject to the discretion of the
Committee. The maximum credit available hereunder shall be
the purchase price, if any, of the Common Stock acquired
pursuant to the Incentive, plus the maximum tax liability
that may be incurred in connection with the acquisition.
To be submitted to shareholders for approval on April 18, 1994.
EXHIBIT 10.3
FIRST COMMERCE CORPORATION
SUPPLEMENTAL TAX-DEFERRED SAVINGS PLAN
WHEREAS, First Commerce Corporation (the "Company")
maintains the First Commerce Corporation Tax-Deferred Savings
Plan (the "401(k) Plan") for the benefit of eligible employees of
the Company and of each of its subsidiaries and affiliates (each
such employer hereinafter included in the term "Employer"), under
which (1) eligible employees can agree to have contributions made
out of their compensation, up to a dollar limit (the "dollar
limit") set pursuant to Section 402(g)(1) and (5) of the Internal
Revenue Code of 1986 ("the Code"), and (2) the Employers make
"Matching Contributions" equal to 50% of the first 5% of
compensation contributed as Tax-Deferred Contributions;
WHEREAS, the Company in 1989 established the Supplemental
Tax-Deferred Savings Plan ("the Plan"), a non-qualified deferred
compensation plan, in order to (1) enable employees prevented by
the dollar limit from contributing a full 5% of compensation
under the 401(k) Plan to contribute the remainder on a tax-
deferred basis, (2) provide for such contributions to be matched
as if they were contributed under the 401(k) Plan, and (3) allow
additional unmatched contributions by such employees;
WHEREAS, the Plan was amended July 31, 1991, and February
25, 1992;
WHEREAS, Code Section 401(a)(17) has been amended, effective
January 1, 1994, to limit compensation that can be taken into
account under the 401(k) Plan to $150,000, as adjusted after 1994
to reflect increases in the cost of living; and
WHEREAS, the Company wishes to allow all employees whose
compensation exceeds the said $150,000 (as adjusted) limit to
defer up to 10% of that excess and to make matching contributions
with respect to such deferrals, and to allow eligible employees
also to defer some or all of any bonus awarded to them;
NOW, THEREFORE, First Commerce Corporation hereby amends and
restates the Plan, effective January 1, 1994, to read in its
entirety as follows:
I.
DEFINITIONS
1.1 The term "Compensation" shall mean all amounts treated as
"Base Compensation" under the 401(k) Plan (but without regard to
the dollar limit imposed by Code Section 401(a)(17), and without
deducting Supplemental Tax-Deferred Contributions under this
Plan), plus -- if a Participant in the 401(k) Plan was a
participant during the same calendar year in an unrelated
employer's plan qualified under Code Section 401(k) -- the amount
of such Participant's compensation with the unrelated employer
taken into account under the unrelated employer's plan.
1.2 The term "Compensation Base" shall mean $150,000, adjusted
after 1994 to reflect cost-of-living increases in the same way as
the compensation limit under Code Section 401(a)(17) is adjusted
after 1994.
II.
REGULAR PARTICIPATION
2.1 Eligibility. Every participant in the 401(k) Plan
("Participant") shall be eligible to participate in this Plan (an
"Eligible Employee") in a year as of the pay period in which his
Compensation for the year exceeds the Compensation Base.
2.2 Participation. Participation must be elected separately for
each calendar year. In order to participate in the Plan in a
year, an Eligible Employee must sign a Supplemental Tax-Deferral
Agreement-Regular ("Agreement"). The Agreement shall be
effective as of the later of (a) the first pay period in the
calendar quarter following the signing of the Agreement, or (b)
the first pay period in which he is an Eligible Employee for that
year.
2.3 Participation in Subsequent Calendar Quarters. An Eligible
Employee who has elected to participate can modify his
participation for the year by signing an Agreement effective the
first day of the calendar quarter beginning after the signing of
the new Agreement. Any Agreement that is not modified remains
in effect through the end of the calendar year.
2.4 Revocation. An Agreement can be revoked at any time,
effective as of the first day of the pay period following receipt
of the revocation by the Plan Administrator. An Employee who
revokes his Agreement during a year will not be allowed to resume
participation until the next year.
An Agreement shall be automatically revoked as of any date
on which its implementation would disqualify the 401(k) Plan.
III.
REGULAR CONTRIBUTIONS
3.1 Supplemental Tax-Deferred Contributions. In order to
contribute under the Plan in any calendar year, an Eligible
Employee must sign an Agreement by which he agrees to reduce his
Compensation by an amount, known as a "Supplemental Tax-Deferred
Contribution", which can be any percentage of the Eligible
Employee's Compensation paid to him in the pay periods affected
by the election, provided that the total of an Eligible
Employee's Supplemental Tax-Deferred Contributions under the Plan
as of any date during the year cannot exceed 10% of his
Compensation through that date in excess of the Compensation
Base. An Eligible Employee who has made Supplemental Tax-
Deferred Contributions shall be known as a "Participating
Employee".
3.2 Supplemental Matching Contributions. The Employer shall
make a Supplemental Matching Contribution equal to (a) 50% of the
portion of a Participating Employee's Supplemental Tax-Deferred
Contributions for a pay period that does not exceed 5% of
Compensation for the pay period, less (b) the amount of any
Matching Contributions under the 401(k) Plan for the same pay
period.
IV.
CONTRIBUTIONS OUT OF BONUSES
4.1 Eligibility. If a Participant's rate of pay as of January 1
of a calendar year is such that his total Compensation for the
year is projected to exceed the Compensation Base for that year,
the Participant shall be eligible to make a contribution under
this Plan out of any bonus paid for that year.
4.2 Participation. The election to make a contribution out of a
Participant's bonus shall be made separately for each calendar
year. In order to contribute, any eligible employee must elect
to do so on a Supplemental Tax-Deferred Agreement-Bonus ("Bonus
Agreement"), signed prior to the beginning of the calendar year
during which the bonus is earned. The Participant can elect to
defer any percentage, up to 100%, of the bonus. The election
shall apply whether the bonus is paid during the year it is
earned or is paid in the following year. No Supplemental
Matching Contributions shall be made with respect to a
Supplemental Tax-Deferred Contribution that comes out of a bonus.
4.3 Irrevocability of Election. A Bonus Agreement to defer a
bonus shall be irrevocable as of the first day of the year to
which the Bonus Agreement applies, unless the Employee elects to
revoke the Bonus Agreement and demonstrates to the satisfaction
of the Plan Administrator that he would suffer severe financial
hardship if the Bonus Agreement is not revoked. The Bonus
Agreement is also revoked by the death or termination of
employment of Employee prior to the payment of the bonus.
V. VESTING
5.1 Vesting. Supplemental Tax-Deferred Contributions shall be
100% vested at all times. Supplemental Matching Contributions
shall vest at the same rate as Matching Contributions under the
401(k) Plan. Even if vested, benefits are subject to claims of
Company creditors, as provided in Section 9.1, below.
VI.
PLAN ADMINISTRATION
6.1 Plan Administrator. The Plan Administrator shall be the
First Commerce Corporation Employee Benefits Committee, which
shall make all decisions in connection with the administration of
the Plan. including decisions concerning eligibility, amounts of
contributions, and payment of benefits. The Plan Administrator
shall have the sole authority to interpret the Plan and all of
its decisions shall be final and binding on all persons affected
thereby.
6.2 Accounting. The Plan Administrator shall establish and
maintain a separate Supplemental Tax-Deferred Savings Account and
Supplemental Matching Contribution Account for each Participating
Employee, to which shall be credited his Supplemental Tax-
Deferred Contributions and Supplemental Matching Contributions,
respectively. Corresponding accounts shall be established in the
Trust, as provided in Section 9.1, below, but the Participating
Employee shall have no secured or vested interest in any specific
asset of the Plan or Trust.
A Participating Employee's accounts shall be adjusted as of
each Valuation Date under the 401(k) Plan to reflect increases or
decreases in the value of the Participating Employees' accounts
in the Trust. To the greatest extent practical, the same
valuation and accounting methods shall be used as are used to
recalculate account balances under the 401(k) Plan.
In case of insolvency or bankruptcy of an Employer, any
payments required to be made for the Employer's creditors out of
the Trust shall not reduce Participating Employees' Plan
accounts, even though Participating Employees' Trust accounts are
reduced proportionately. If because of payments to Employer
creditors a Participating Employee's Trust account is less than
his Plan account, the difference between the two shall be
credited with interest at 10% per annum, compounded at each
annual Valuation Date.
6.3 Reporting. As soon as practicable after each calendar
quarter, the Plan Administrator shall furnish each Participating
Employee with a statement indicating the total amount allocated
to his accounts under the Plan.
6.4 Payment of Expenses. The Company shall pay, or reimburse
the Plan Administrator for, any expenses reasonably incurred in
the administration of the Plan.
VII.
DISTRIBUTIONS
7.1 Termination Benefit. Upon the termination of a
Participating Employee's employment with all Employers (other
than by death), the Participating Employee shall be entitled to
payment of his vested Plan account balances. Such payment shall
be made in one lump sum, as soon as administratively convenient
after the termination of employment. Any unvested portion shall
be forfeited and returned to the Participating Employee's
Employer.
7.2 Death Benefit. If a Participating Employee dies while
employed, his Plan accounts shall be 100% vested and shall be
distributed to his Beneficiary. He may designate a Beneficiary
on a form provided by the Plan Administrator. In the absence of
a designated Beneficiary the Beneficiary shall be the
Participating Employee's estate.
7.3 Form of Distribution. Distributions shall be made in the
form of Company Stock to the extent the Participating Employee's
Trust accounts are invested in Company Stock. The balance of the
benefit shall be in cash. If a Participating Employee's Trust
account is smaller than his corresponding Plan account (because
of a payment to Employer creditors), the difference between the
account balances under the Plan and the Trust shall be paid out
of his Employer's general assets.
VIII.
MISCELLANEOUS
8.1 Assignment. To the extent a Participating Employee or any
other person acquires a contractual right to receive payments
pursuant to the Plan, such right shall not be subject to
assignment, pledge (including collateral for a loan or security
for the performance of an obligation), encumbrance or transfer.
Any attempt to assign, pledge, encumber or transfer such right
shall not be recognized.
8.2 Amendment. The Company, through its board of directors,
shall have the right to amend the Plan, including discontinuing
contributions hereunder, provided that no such amendment shall
reduce a Participating Employee's account or reduce the vesting
of the account and provided that any such amendment requires
shareholder approval to meet the requirements of Rule 16b-3 under
the Securities Exchange Act of 1934 or any successor rule, such
amendment shall be subject to approval of the Company's
shareholders.
8.3 Governing Law. The Plan shall be governed by the laws of
the State of Louisiana.
IX.
FUNDING
9.1 Funding. Participating Employees have only an unsecured
right to receive benefits under the Plan from their Employer as a
general creditor of the Employer. An amount equal to all
Supplemental Tax-Deferred Contributions and Supplemental Matching
Contributions shall be deposited in the First Commerce
Corporation Supplemental Tax-Deferred Savings Trust (the "Trust")
established by the Company for the purpose of funding the
Employers' obligations under the Plan, and shall be held and
invested under the terms of the First Commerce Corporation
Supplemental Tax-Deferred Savings Trust document, as amended.
Participating Employees and their Beneficiaries, however, have no
secured interest or special claim to the assets of the Trust, and
the assets of the Trust relating to an Employer's Contributions
shall be subject to the payment of claims of general creditors of
the Employer upon its insolvency or bankruptcy.
X.
DEMAND FOR BENEFITS
10.1 Demand for Benefits. Benefits upon termination of
employment shall ordinarily be paid to a Participating Employee
without the need for demand, and to a Beneficiary upon receipt of
the Beneficiary's address and Social Security number.
Nevertheless, a Participating Employee or a person claiming to be
a Beneficiary who claims entitlement to a benefit under Paragraph
7.1 or 7.2 can file a claim for benefits with the Plan
Administrator. The Plan Administrator shall accept or reject the
claim within 30 days of its receipt. If the claim is denied, the
Plan Administrator shall give the reason for denial in a written
notice calculated to be understood by the claimant, referring to
the Plan provisions that form the basis of the denial. If any
additional information or material is necessary to perfect the
claim, the Plan Administrator will identify these items and
explain why such additional material is necessary. If the Plan
Administrator neither accepts nor rejects the claim within 30
days, the claim shall be deemed to be denied. Upon the denial of
a claim, the claim may file a written appeal of the denied claim
to the Plan Administrator within 60 days of the denial. The
claimant shall have the opportunity to be represented by counsel
and to be heard at a hearing. The claimant shall have the
opportunity to review pertinent documents and the opportunity to
submit issues and argue against the denial in writing. The
decision upon the appeal must be made no later than the later of
(a) 60 days after receipt of the request for review, or (b) 30
days after the hearing. The Plan Administrator must set a date
for such a hearing within 30 days after receipt of the appeal.
In no event shall the date of the hearing be set later than 60
days after receipt of the notice. If the appeal is denied, the
denial shall be in writing. If an initial claim is denied, all
subsequent reasonable attorney's fees and costs of the successful
claims, including the filing of the appeal with the Plan
Administrator, and any subsequent litigation, shall be paid by
the Employer unless the failure of the Employer to pay is caused
by reasons beyond its control, such as insolvency or bankruptcy.
THUS DONE AND SIGNED on this 20th day of December, 1993, in
the presence of the undersigned competent witnesses.
WITNESSES: FIRST COMMERCE CORPORATION
_______________________________ BY:____________________________
_______________________________ TITLE:_________________________
ACKNOWLEDGEMENT
STATE OF LOUISIANA
PARISH OF ORLEANS
BEFORE ME, the undersigned Notary Public, personally came
and appeared: Ian Arnof, who being by me duly sworn did depose and
state that he signed the foregoing First Commerce Corporation
Supplemental Tax-Deferred Savings Plan as a free act and deed on
behalf of First Commerce Corporation for the purposes therein set
forth.
/s/Ian Arnof
____________________________________
Sworn to and subscribed before me
this 20th day of December, 1993.
/s/Marsha N. Hebert
_________________________________
NOTARY PUBLIC
FIRST COMMERCE CORPORATION
$hareMax CORPORATE INCENTIVE PLAN
Effective January 1, 1994, First Commerce Corporation (which
is referred to elsewhere in this document as the "Employer"),
established a Corporate wide incentive plan, known as $hareMax,
based on meeting the goals of certain performance key indicators
to be determined for each plan year by the management of First
Commerce Corporation.
DEFINITIONS
1. Administration Committee means the committee appointed
by the Director of Human Resources to administer the Plan.
2. Allocation means the percentages of the incentive pool
to be set aside to pay incentives to the participants in the
Plan.
3. Base Compensation means an Employee's basic salary or
wages (excluding bonuses and overtime) paid by the Employer
during the Plan year.
4. Beneficiary means the person or persons to whom a
deceased Participant's accrued incentive awards are payable.
5. Chief Executive Officer means the President and Chief
Executive officer of First Commerce Corporation.
6. Deferred Account means the account maintained for a
Participant which is funded with Deferred awards made on his or
her behalf by the Employer.
7. Disabled or Disability means unable to engage in any
substantial gainful activity due to any medically determinable
physical or mental impairment which can be expected to result in
death or be of long-continued and indefinite duration.
8. Employee means any person employed by the Employer who
is scheduled to work or works more than one thousand hours of
service each Plan Year; provided, however, that the term
Employee shall not include leased employees.
9. Employer means First Commerce Corporation (or a
successor) and any subsidiary thereof which currently
participates in the Plan or subsequently adopts the Plan.
10. Initial Entry Date means the first day of the month
following the later of (a) an Employee's commencement of
employment with an Employer or (b) the effective date of the
Employer's adoption of the Plan.
11. Investment Committee means the committee appointed by
the Chief Executive Officer to review the investment performance
of the Trustee.
12. Leased Employee means an individual who is not employed
by the Employer, but who performs services for the Employer
pursuant to an oral or written agreement between the Employer and
any leasing organization, including such individual.
13. Participant means an Employee eligible to participate
in the Plan.
14. Plan means First Commerce Corporation's incentive plan
also known as $hareMax.
15. Plan Administrator means the Administration Committee
appointed by the Director of Human Resources.
16. Plan Year means the calendar year.
17. Re-Entry Date means the first day of any month
following the Participant's return to work after a bona fide
leave of absence or long term disability.
18. Trust means the assets comprising the deferred amounts
under the Plan.
19. Trust Agreement means the written agreement entered
into between First Commerce Corporation and the Trustee, which
agreement provides for the fiduciary administration of the Trust.
20. Trustee means First National Bank of Commerce, New
Orleans, Louisiana, or a successor appointed by the Board of
Directors.
<PAGE>
PARTICIPATION
1. Participation Standards. Each Employee shall be
eligible to participate in the Plan as of his or her Initial
Entry Date or any Re-Entry Date.
2. Participation After Reemployment. If an Employee
terminates his or her employment with all Employers after being
eligible to participate, and is later reemployed by an Employer,
he or she will be treated as a new Employee for purposes of
determining eligibility to participate in the Plan.
3. Participation After Leave of Absence or Disability. If
an Employee is qualified to return to active work, he or she
shall be entitled to participate in the Plan as of any Re-Entry
Date following the date on which such Participant first performs
an Hour of Service for the Employer after reemployment.
MISCELLANEOUS PROVISIONS
1. Deferment of all or part of the amounts accrued or
earned under the Plan will be determined, for each specified
group of Participants for a Plan Year, by the Plan Administrator.
2. Forfeitures of accrued or deferred amounts shall revert
to the Employer and be applied to reduce the expenses of First
Commerce Corporation.
3. Termination from the Plan and forfeiture of any accrued
or deferred amount will occur when termination from employment
takes place for cause or because of voluntary resignation.
INVESTMENTS
1. Trust Fund. First Commerce Corporation and the Trustee
have entered into a Trust Agreement, which agreement provides for
the establishment of a single Trust for the purpose of holding
and administering the assets comprising the deferred amounts
under the Plan.
2. Separate Accounts. The account of each Participant
shall be maintained separately by the Trustee or recordkeeping
agent appointed by the Plan Administrator.
3. Investment of Deferred Amounts. The Trustee shall
invest deferred amounts allocated to each Participant's account
in accordance with the instructions of the Investment Committee.
<PAGE>
ADMINISTRATION
1. Administration. The Director of Human Resources shall
appoint an Administration Committee comprised of not less than
three individuals to administer the Plan. The individuals
appointed to the Administration Committee shall serve at the
discretion of the Senior Vice President of Human Resources. Any
individual may resign from the Committee by delivering his or her
written resignation to the Director of Human Resources.
2. Powers. The Administration Committee (which is referred
to elsewhere in this document as the "Plan Administrator") shall
have the power to administer the Plan; such power shall include,
but is not limited to:
a. The power to interpret and construe the
provisions of the Plan.
b. The power to determine all questions of
eligibility to participate, eligibility for payment of Plan
payouts, the allocation of deferred amounts, and the status and
rights of Participants and their Beneficiaries.
c. The power to determine and decide any dispute
arising under the Plan.
d. The power to direct the Trustee concerning all
payments which shall be made out of the Trust in accordance with
the provisions of the Plan.
e. The power to establish procedures for the
withholding of federal income tax from distributions.
3. Investment Committee. The Chief Executive Officer shall
appoint an Investment Committee comprised of not less than three
individuals to review the performance of the Trustee and the
investment policies of the Plan. The individuals serving on the
Investment Committee shall serve at the discretion of the Chief
Executive Officer. Any such individual may resign from the
Committee by delivering his or her written resignation to the
Director of Human Resources.
<PAGE>
The powers of the Investment Committee shall include,
but are not limited to:
a. The power to direct the Trustee to acquire
investment instruments on behalf of the participants in the Plan.
b. The power to authorize additional investment
alternatives.
c. The power to review the investment performance
of the Trustee.
d. The power to direct the Trustee as to the
exercise of any conversion privilege or subscription right
available with respect to property held in the Trust.
4. Actions. Any action taken by the Plan Administrator or
the Investment Committee on matters within its discretion shall
be final and binding on the parties and on all Participants,
Beneficiaries or other persons claiming any right or benefit
under the Plan, in the Trust, or in the administration of the
Plan.
5. Compensation. No person employed by an Employer and
serving on the Administration Committee or the Investment
Committee shall receive compensation for the performance of his
or her duties as such.
7. Expenses. All expenses of administration shall be paid
from the Trust unless paid directly by the Employer. The
Employer may reimburse the Trust for any administrative expense
paid by the Trust.
AMENDMENT AND TERMINATION
1. Amendment. The Employer reserves the right at any time
to amend the Plan; provided, however, that no such amendment:
a. Shall authorize or permit any portion of the
Participants' accounts as established under the Plan to be used
for or diverted to purposes other than for the exclusive benefit
of the Employees or the Employees' Beneficiaries.
<PAGE>
b. Shall deprive a Participant of his or her
nonforfeitable right to benefits accrued as the date of such
amendment. If the vesting schedule of the Plan is amended in
such a way that a Participant might in any Plan Year have less
vesting credit under the new schedule than under the schedule
prior to the amendment, each Participant with at least four Plan
Years of Service may elect to have his or her nonforfeitable
percentage computed without regard to such amendment. The period
during which such election may be made shall commence with the
date the amendment is adopted and shall end sixty days after the
Employee or Participant is provided with written notice of the
amendment.
Each employee and the Trustee shall be notified in
writing of any amendment within a reasonable time.
2. Merger. The Plan may be merged or consolidated with, or
its assets and liabilities may be transferred to any other plan
only if the benefits which would be received by a Participant in
the event of a termination of the Plan immediately after such
transfer, merger or consolidation are at least equal to the
benefit such Participant would have received if the Plan had
terminated immediately prior to the transfer, merger or
consolidation.
3. Termination. The Employer shall have the right, at any
time, to terminate the Plan, in whole or in part, by delivering
written notice of such termination to the Participants and
Trustee. A complete discontinuance of the Employer's
contributions to the Plan shall be deemed to constitute a
termination.
Upon any termination (whether full or partial) or a
complete discontinuance of contributions, all amounts credited to
the affected Participants' accounts shall become fully vested and
nonforfeitable. Upon such termination, the Plan Administrator
shall direct the Trustee to distribute the assets held in the
Trust to the Participants.
EXHIBIT 10.5
FIRST COMMERCE CORPORATION
CHIEF EXECUTIVE OFFICER
$HAREMAX PLAN
1. Purpose. The purpose of the Chief Executive Officer
$haremax Plan (the "Plan") is to advance the interests of
First Commerce Corporation (the "Company") by providing an
annual incentive cash bonus to be paid to the Chief
Executive Officer of the Company based on the achievement of
pre established quantitative Company performance goals.
2. Shareholder Approval. The payment of any bonus hereunder is
subject to the approval of the Plan and the performance
goals by the shareholders of the Company at the 1994 Annual
Meeting.
3. Administration. The Compensation Committee of the Board of
Directors of the Company shall have authority to administer
the Plan in all respects including but not limited to the
following:
(a) Establish performance goals;
(b) Establish regulations for the administration of the
Plan and make all determinations deemed necessary for
the administration of the Plan; and
(c) Certify in writing prior to the payment of any
incentive bonus under the Plan that the performance
goals applicable to the bonus payment were met.
Approved minutes of a Committee meeting will satisfy
this requirement.
4. Incentive Bonus. The CEO shall be eligible to be paid a
cash bonus in an amount up to 200% of his annual salary.
The exact amount of the bonus shall be calculated according
to the formula established by the Committee based on the
achievement of annual performance goals. The Committee has
no discretion to increase the amount of the bonus from that
amount that is payable under the terms of the pre-
established formula for the applicable year. The formula
for 1994 is attached as Exhibit A hereto. The Committee may
in future years change the targets applicable to the
performance goals provided in Exhibit A hereto.
5. Payment of Incentive Bonus. As soon as practicable after
the Company's audited financial statements are available for
the year for which the incentive bonus will be paid, the
Committee shall apply the formula for that year and
determine the amount of the incentive bonus. Promptly
thereafter, the incentive bonus shall be paid to the CEO.
6. Termination of Employment. In the event the CEO's
employment with the Company is terminated as a result of
normal retirement, early retirement (with the Company's
permission), permanent disability or death, the CEO or his
heirs shall receive the incentive bonus as earned pursuant
to the applicable formula for that year in which the
retirement, permanent disability or death occurred. If the
employment of the CEO is terminated for any reason other
than normal retirement, early retirement (with the Company's
permission), permanent disability or death during a Plan
year, the CEO shall not receive an award for that Plan year.
7. Assignments and Transfers. The CEO may not assign, encumber
or transfer his rights and interests under the Plan.
8. Amendment and Termination. The Committee may amend, suspend
or terminate the Plan at any time. Any amendment or
termination of the Plan shall not, however, affect the right
of the CEO to receive an incentive bonus earned for the year
during which the Plan was amended or terminated or any
earned but unpaid incentive bonus.
9. Withholding of Taxes. The Company shall deduct from the
amount of any incentive bonus paid hereunder any federal or
state taxes required to be withheld.
10. Term of Plan. The Plan shall consist of individual calendar
year Plans, commencing effective January 1, 1994 and each
consecutive January 1 thereafter during the continuation of
the Plan. The Plan shall continue until terminated by the
Committee.
EXHIBIT 11
<TABLE>
<CAPTION>
FIRST COMMERCE CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
Years Ended
December 31
-----------------------------------
1993 1992 1991
----------- ----------- -----------
<S> <C> <C> <C>
Primary earnings per share
- -------------------------------------------
Weighted average number of common shares
outstanding 25,893,194 23,398,079 21,808,941
Shares from assumed exercise of options,
net of treasury stock method 239,017 330,461 -
----------- ----------- -----------
26,132,211 23,728,540 21,808,941
=========== =========== ===========
Net income (in thousands) $95,214 $72,475 $34,029
Preferred dividend requirements 4,348 4,076 -
----------- ----------- -----------
Income applicable to common shares $90,866 $68,399 $34,029
=========== =========== ===========
Per common share $3.48 $2.88 $1.56
=========== =========== ===========
Fully diluted earnings per share
- -------------------------------------------
Weighted average number of shares
outstanding, net of shares held
in treasury 25,893,194 23,398,079 21,808,941
Shares from assumed exercise of options,
net of treasury stock method 221,106 370,560 -
Shares from assumed conversion of dilutive
convertible notes and debentures:
Preferred stock 2,794,085 2,626,806 -
Convertible debentures 3,216,618 3,172,920 -
----------- ----------- -----------
32,125,003 29,568,365 21,808,941
=========== =========== ===========
Income applicable to common shares $90,866 $68,399 $34,029
Expenses that would not have been incurred
if assumed conversions occurred:
Preferred dividend requirements 4,348 4,076 -
Interest expense, net of tax 6,962 7,121 -
----------- ----------- -----------
Income applicable to common shares plus
expenses that would not have been incurred
if assumed conversions occurred $102,176 $79,596 $34,029
=========== =========== ===========
Per common share $3.18 $2.70 $1.56
=========== =========== ===========
Notes:
1. On December 30, 1993, First Commerce Corporation paid a stock split effected
in the form of a 25% stock dividend. Share and per share data have been adjusted
to reflect this stock split.
</TABLE>
EXHIBIT 13
<PAGE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
======================================================================================================
1993 1992 % Change
(dollars in thousands except per share data) (Restated)<FN4>
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCOME DATA
Net income $ 95,214 $ 72,475 31%
Net interest income (FTE)<FN1> 256,049 241,873 6%
======================================================================================================
PER COMMON SHARE DATA<FN2>
Net income - primary $ 3.48 $ 2.88 21%
Net income - fully diluted 3.18 2.70 18%
Book value (end of period) 17.28 14.57 19%
Tangible book value (end of period) 16.66 13.83 20%
Cash dividends .85 .70 21%
======================================================================================================
AVERAGE BALANCE SHEET DATA
Securities $3,110,544 $ 2,734,925 14%
Loans and leases<FN3> 2,407,231 2,184,584 10%
Earning assets 5,812,761 5,280,347 10%
Total assets 6,335,669 5,741,399 10%
Deposits 5,176,873 4,953,572 5%
Stockholders' equity 469,694 355,716 32%
======================================================================================================
RATIOS
Return on average assets 1.50 % 1.26 %
Return on average total equity 20.27 % 20.37 %
Return on average common equity 22.18 % 22.85 %
Net interest margin 4.40 % 4.58 %
Efficiency ratio 61.60 % 60.25 %
Overhead ratio 2.03 % 2.03 %
Allowance for loan losses to loans and leases<FN3> 2.55 % 3.44 %
Stockholders' equity to assets 7.65 % 6.79 %
Leverage ratio 7.63 % 6.76 %
======================================================================================================
<FN1> Based on a 34% tax rate for 1992 and 35% tax rate for 1993.
<FN2> On December 30, 1993, First Commerce Corporation paid a stock split effected in the
form of a 25% stock dividend. Per common share data have been adjusted to reflect
this stock split.
<FN3> Net of unearned income.
<FN4> First Commerce Corporation's financial information for 1993 has been
restated to include First Acadiana National Bancshares, Inc.
</TABLE>
Earnings Per Share
fully diluted
The graph inserted shows net income divided
by the weighted average number of common
shares and all contingently issuable shares
from 1989 to 1993. The plot points are:
GRAPH DENOMI- Years
TYPE NATIONS 1989 1990 1991 1992 1993
- ---------------------------------------------------------------
BAR $ 1.20 0.94 1.56 2.7 3.18
Return on Total Equity
The graph inserted shows net income divided
by average total equity from 1989 to 1993. The
plot points are:
GRAPH DENOMI- Years
TYPE NATIONS 1989 1990 1991 1992 1993
- ---------------------------------------------------------------
BAR % 12.20 9.22 14.46 20.37 20.27
Return on Assets
The graph inserted shows net income divided
by average total assets from 1989 to 1993. The
plot points are:
GRAPH DENOMI- Years
TYPE NATIONS 1989 1990 1991 1992 1993
- ---------------------------------------------------------------
BAR % 0.67 0.49 0.73 1.26 1.50
Return on Common Equity
The graph inserted shows net income divided
by average common equity from 1989 to 1993.
The plot points are:
GRAPH DENOMI- Years
TYPE NATIONS 1989 1990 1991 1992 1993
- ---------------------------------------------------------------
BAR % 12.37 9.11 14.46 22.85 22.18
<PAGE>
FINANCIAL REVIEW
1993 IN REVIEW
First Commerce Corporation's (FCC's) net income for 1993 was $95.21
million, a 31% increase from 1992's $72.48 million. Primary earnings per
common share was $3.48 in 1993 and $2.88 in 1992. Fully diluted earnings per
share was $3.18 and $2.70 in 1993 and 1992, respectively. Return on average
assets and return on average equity were 1.50% and 20.27% for 1993. For 1992,
return on average assets was 1.26%, and return on average equity was 20.37%.
The primary reason for the improvement in net income was the negative
provision for loan losses. Additionally, higher net interest income and the
settlement of tax issues with the Internal Revenue Service (IRS) contributed to
net income.
Improving loan quality and lower net charge-offs resulted in a significant
reduction in the provision for loan losses. For 1993, there was a negative
provision of $4.50 million, compared to a provision of $22.04 million for 1992.
Net interest income for 1993 was $250.01 million, 6% higher than 1992.
Throughout 1993, FCC's net interest margin narrowed, the result of yields on
securities and loans declining more than the cost of funds decreased. The
margin declined 18 basis points during the year to 4.40% from 4.58% in 1992.
During the year, a more favorable earning asset mix began to develop as loan
growth accelerated. Average loans and securities increased 10% and 14% from
the prior year, respectively.
A favorable settlement of tax issues, primarily related to the
deductibility of intangibles resulting from the 1985 acquisitions of two banks,
with the IRS increased 1993's net income by $3.5 million, or $.11 per common
share.
FCC's results for 1993 have been restated to include earnings from First
Acadiana National Bancshares, Inc. (FANB), a $208 million asset bank
acquisition which was effective January 1, 1994. The FANB acquisition is being
accounted for as a pooling-of-interests. Financial information for the periods
prior to 1993 has not been restated, since FANB's results are not material to
FCC's. For the full year, FANB had net income of $1.30 million, which had the
effect of decreasing FCC's earnings per share by $.09 for the year. Discussion
of FANB's impact on 1993's earnings and financial condition is contained in
each section below. Note 2 contains selected information for FANB and its
effect on FCC.
FCC increased its common stock cash dividend 25% in the fourth quarter and
ended the year with a five-for-four stock split effected in the form of a 25%
stock dividend. Accordingly, all share and per share data have been restated
for the effect of the stock dividend.
A more detailed review of FCC's financial condition and earnings for 1993
follows, with comparisons to 1992 and 1991. This review should be read in
conjunction with the Consolidated Financial Statements which follow this
Financial Review.
EARNINGS ANALYSIS
Net Interest Income
Net interest income, fully taxable equivalent (FTE), for 1993 was $256.05
million, 6% higher than 1992's $241.87 million. The increase was caused by a
higher volume of earning assets and interest-free funds, partially offset by
lower earning asset yields. Of the $14.18 million increase in net interest
income (FTE) for the year, FANB contributed $9.89 million.
Average earning assets of $5.81 billion were 10% higher in 1993, compared
to 1992, with increases in both securities and loans. The growth in earning
assets was funded by increases in short-term borrowings and interest-free
funding sources. FANB had $197 million in average earning assets in 1993,
which contributed 4% of the total 10% increase.
Average interest-bearing liabilities increased 7% in 1993 to $4.68 billion
and funded 81% of earning assets, compared to 83% in 1992. Interest-free funds
increased $234.53 million, or 26%, from 1992, and short-term borrowings
increased $258.53 million, or 96%, from 1992. Management increased the
financial leverage of FCC, using short-term borrowings to purchase short-term
securities, contributing additional net interest income, but at a lower spread.
The net interest spread narrowed 14 basis points from 1992 to 3.81% in
1993. The net interest margin was 4.40% for 1993, compared to 4.58% for 1992,
a decline of 18 basis points. Excluding FANB, the net interest margin would
have been 4.38% and the net interest spread would have been 3.80% in 1993. The
margin and spread declined because yields on earning assets declined 81 basis
points, while the cost of interest-bearing liabilities decreased only 67 basis
points.
Net Income (millions)
The graph inserted shows net income from
1989 to 1993. The plot points are:
GRAPH DENOMI- Years
TYPE NATIONS 1989 1990 1991 1992 1993
- ---------------------------------------------------------------
BAR MILLIONS 28.197 22.038 34.029 72.475 95.214
Net Interest Income (FTE) (millions)
The graph inserted shows net interest income
(FTE) from 1989 to 1993. Net interest income (FTE)
is net income which has been adjusted by
increasing tax-exempt income to a level that
would yield the same after tax income had that
income been subject to taxation.
The plot points are:
GRAPH DENOMI- Years
TYPE NATIONS 1989 1990 1991 1992 1993
- ---------------------------------------------------------------
BAR MILLIONS 164.5 176.4 199.6 241.9 256.0
<PAGE>
<TABLE>
<CAPTION>
TABLE 1. SUMMARY OF AVERAGE BALANCE SHEETS, NET INTEREST INCOME(FTE)<FN1>
AND INTEREST RATES
============================================================================================================================
1993 1992
(Restated)
- ----------------------------------------------------------------------------------------------------------------------------
Average Average
(dollars in thousands) Balance Interest Rate Balance Interest Rate
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
ASSETS
EARNING ASSETS
Loans and leases<FN2> $ 2,407,231 $ 216,711 9.00 % $ 2,184,584 $ 214,405 9.81 %
Securities
Taxable 3,002,802 159,635 5.32 2,619,640 159,811 6.10
Tax-exempt 107,742 12,952 12.02 115,285 14,434 12.53
- ----------------------------------------------------------------------------------------------------------------------------
Total securities 3,110,544 172,587 5.55 2,734,925 174,245 6.37
- ----------------------------------------------------------------------------------------------------------------------------
Interest-bearing deposits in
Domestic banks 86,519 2,906 3.36 86,807 3,661 4.22
Foreign banks<FN3> 194,580 6,645 3.42 183,005 9,589 5.24
Federal funds sold and securities purchased
under resale agreements 11,001 377 3.42 86,182 3,090 3.59
Trading account securities 2,886 147 5.09 4,844 231 4.77
- ----------------------------------------------------------------------------------------------------------------------------
Total money market investments 294,986 10,075 3.42 360,838 16,571 4.59
- ----------------------------------------------------------------------------------------------------------------------------
Total earning assets 5,812,761 $ 399,373 6.87 % 5,280,347 $ 405,221 7.68 %
- ----------------------------------------------------------------------------------------------------------------------------
NONEARNING ASSETS
Other assets 598,382 538,397
Allowance for loan losses (75,474) (77,345)
- ----------------------------------------------------------------------------------------------------------------------------
Total assets $ 6,335,669 $ 5,741,399
============================================================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW account deposits $ 856,370 $ 11,771 1.37 % $ 734,667 $ 13,737 1.87 %
Money market investment deposits 787,003 16,996 2.16 831,610 22,922 2.76
Savings and other consumer time deposits 2,069,367 75,501 3.65 2,099,727 91,929 4.38
Time deposits $100,000 and over 335,649 12,018 3.58 342,670 14,729 4.30
Foreign branch time deposits 10,097 263 2.60 8,532 281 3.29
- ----------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits 4,058,486 116,549 2.87 4,017,206 143,598 3.57
- ----------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 527,838 15,047 2.85 269,313 7,897 2.93
Long-term debt 95,238 11,728 12.31 97,154 11,853 12.20
- ----------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 4,681,562 $ 143,324 3.06 % 4,383,673 $ 163,348 3.73 %
- ----------------------------------------------------------------------------------------------------------------------------
NONINTEREST-BEARING LIABILITIES
AND STOCKHOLDERS' EQUITY
Noninterest-bearing deposits 1,118,387 936,366
Other liabilities 66,026 65,644
Stockholders' equity 469,694 355,716
- ----------------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 6,335,669 $ 5,741,399
============================================================================================================================
Net interest income (FTE) and margin $ 256,049 4.40 % $ 241,873 4.58 %
============================================================================================================================
Net earning assets and spread $ 1,131,199 3.81 % $ 896,674 3.95 %
============================================================================================================================
<FN1> Based on a 35% tax rate for 1993 and a 34% tax rate for 1992 and 1991.
<FN2> Net of unearned income, prior to deduction of allowance for loan losses and including nonaccrual loans.
<FN3> Principally foreign branches of foreign and domestic banks; other foreign assets and revenues are
insignificant and have therefore not been separately disclosed in this schedule.
</TABLE>
<TABLE>
<CAPTION>
TABLE 1. SUMMARY OF AVERAGE BALANCE SHEETS, NET INTEREST INCOME(FTE)<FN1>
AND INTEREST RATES
=====================================================================================
1991
- -------------------------------------------------------------------------------------
Average
(dollars in thousands) Balance Interest Rate
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
EARNING ASSETS
Loans and leases<FN2> $ 2,323,018 $ 249,662 10.75 %
Securities
Taxable 1,383,112 107,325 7.76
Tax-exempt 132,187 16,298 12.32
- -------------------------------------------------------------------------------------
Total securities 1,515,299 123,623 8.16
- -------------------------------------------------------------------------------------
Interest-bearing deposits in
Domestic banks 87,639 5,473 6.24
Foreign banks<FN3> 244,887 17,885 7.30
Federal funds sold and securities purchased
under resale agreements 82,836 4,756 5.74
Trading account securities 3,709 235 6.34
- -------------------------------------------------------------------------------------
Total money market investments 419,071 28,349 6.76
- -------------------------------------------------------------------------------------
Total earning assets 4,257,388 $ 401,634 9.44 %
- -------------------------------------------------------------------------------------
NONEARNING ASSETS
Other assets 478,789
Allowance for loan losses (64,699)
- -------------------------------------------------------------------------------------
Total assets $ 4,671,478
=====================================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW account deposits $ 489,061 $ 16,226 3.32 %
Money market investment deposits 669,649 30,557 4.56
Savings and other consumer time deposits 1,508,036 93,602 6.21
Time deposits $100,000 and over 467,020 29,996 6.42
Foreign branch time deposits 12,823 746 5.82
- -------------------------------------------------------------------------------------
Total interest-bearing deposits 3,146,589 171,127 5.44
- -------------------------------------------------------------------------------------
Short-term borrowings 349,283 18,673 5.34
Long-term debt 101,246 12,260 12.11
- -------------------------------------------------------------------------------------
Total interest-bearing liabilities 3,597,118 $ 202,060 5.62 %
- -------------------------------------------------------------------------------------
NONINTEREST-BEARING LIABILITIES
AND STOCKHOLDERS' EQUITY
Noninterest-bearing deposits 785,023
Other liabilities 53,952
Stockholders' equity 235,385
- -------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 4,671,478
=====================================================================================
Net interest income (FTE) and margin $ 199,574 4.69 %
=====================================================================================
Net earning assets and spread $ 660,270 3.82 %
=====================================================================================
<FN1> Based on a 35% tax rate for 1993 and a 34% tax rate for 1992 and 1991.
<FN2> Net of unearned income, prior to deduction of allowance for loan losses and including nonaccrual loans.
<FN3> Principally foreign branches of foreign and domestic banks; other foreign assets and revenues are
insignificant and have therefore not been separately disclosed in this schedule.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
TABLE 2. SUMMARY OF CHANGES IN NET INTEREST INCOME (FTE)<FN1>
=============================================================================================================================
1993 Compared to 1992 1992 Compared to 1991
- -----------------------------------------------------------------------------------------------------------------------------
Total Due to Due to Total Due to Due to
Increase Change in Change in Increase Change in Change in
(dollars in thousands) (Decrease) Volume Rate (Decrease) Volume Rate
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
EARNING ASSETS
Loans and leases $ 2,306 $ 20,854 $ (18,548) $ (35,257) $ (14,352) $(20,905)
Securities
Taxable (176) 21,775 (21,951) 52,486 79,394 (26,908)
Tax-exempt (1,482) (921) (561) (1,864) (2,113) 249
- -----------------------------------------------------------------------------------------------------------------------------
Total securities (1,658) 20,854 (22,512) 50,622 77,281 (26,659)
- -----------------------------------------------------------------------------------------------------------------------------
Interest-bearing deposits in
Domestic banks (755) (12) (743) (1,812) (51) (1,761)
Foreign banks (2,944) 574 (3,518) (8,296) (3,917) (4,379)
Federal funds sold and securities purchased
under resale agreements (2,713) (2,582) (131) (1,666) 185 (1,851)
Trading account securities (84) (99) 15 (4) 62 (66)
- -----------------------------------------------------------------------------------------------------------------------------
Total money market investments (6,496) (2,119) (4,377) (11,778) (3,721) (8,057)
- -----------------------------------------------------------------------------------------------------------------------------
Total interest income $ (5,848) $ 39,589 $ (45,437) $ 3,587 $ 59,208 $(55,621)
=============================================================================================================================
INTEREST-BEARING LIABILITIES
Interest-bearing deposits
NOW account deposits $ (1,966) $ 2,044 $ (4,010) $ (2,489) $ 6,246 $ (8,735)
Money market investment deposits (5,926) (1,177) (4,749) (7,635) 6,281 (13,916)
Savings and other consumer time deposits (16,428) (1,312) (15,116) (1,673) 30,546 (32,219)
Time deposits $100,000 and over (2,711) (296) (2,415) (15,267) (6,809) (8,458)
Foreign branch time deposits (18) 47 (65) (465) (202) (263)
- -----------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits (27,049) (694) (26,355) (27,529) 36,062 (63,591)
- -----------------------------------------------------------------------------------------------------------------------------
Short-term borrowings 7,150 7,376 (226) (10,776) (3,626) (7,150)
Long-term debt (125) (235) 110 (407) (499) 92
- -----------------------------------------------------------------------------------------------------------------------------
Total interest expense $ (20,024) $ 6,447 $ (26,471) $ (38,712) $ 31,937 $(70,649)
- -----------------------------------------------------------------------------------------------------------------------------
Change in net interest income (FTE) $ 14,176 $ 33,142 $ (18,966) $ 42,299 $ 27,271 $ 15,028
=============================================================================================================================
<FN1> Based on a 35% tax rate for 1993 and a 34% tax rate for 1992 and 1991.
</TABLE>
The reinvestment of $662 million of maturing and prepaying securities in
similar short-term securities at lower yields was the primary cause of the
decline in the earning asset yield during 1993. Although loan volume increased
during the year, new loans had lower yields than maturing and prepaying loans,
which also contributed to the decline in the earning asset yield.
Recoveries of interest on nonaccrual loans totaled $3.56 million in 1993
and $2.02 million in 1992. These recoveries contributed 6 basis points to the
net interest margin in 1993 and 3 basis points in 1992.
Securities continue to be the largest component of earning assets.
Securities were 54% of earning assets in 1993, compared to 52% in the prior
year. Money market investments decreased from 7% of earning assets in 1992 to
5% in 1993. Loan demand increased during the last three quarters of 1993. For
the full year, average loans were 10% higher in 1993 than in 1992. Increasing
loan demand is a trend that is expected to continue into 1994 and contribute to
a more favorable earning asset mix. Loans and leases remained stable at 41% of
earning assets for both 1993 and 1992.
Table 1 presents the average balance sheets, net interest income (FTE) and
interest rates for 1993, 1992 and 1991.
The yield on earning assets and the cost of funds both declined due to the
combination of overall lower interest rates and the shifts in the mix of
earning assets and funding sources. FCC was able to acquire and retain funds
at lower interest rates. Table 2 provides the components of changes in net
interest income.
From 1991 to 1992, net interest income increased 21% due to growth of
earning assets, a favorable interest rate environment and a wider net interest
spread. FCC's cost of funds decreased 189 basis points to 3.73%, while the
yield on earning assets decreased 176 basis points to 7.68%. The resulting net
interest spread was 3.95%, a 13 basis point improvement over the prior year.
The yield on earning assets and the cost of funds both declined from 1991
to 1992 due to the combination of overall lower interest rates and the
acquisition of the deposits of the failed Pelican Homestead and Savings
Association in 1992. The lower cost core deposits acquired from Pelican
allowed higher cost funds to decline.
In 1992, average earning assets were $5.28 billion, 24% higher than the
prior year, and average interest-bearing liabilities were $4.38 billion, 22%
higher than 1991. The increase of interest-bearing liabilities was mainly due
to the acquisition of Pelican's deposits which were used to fund the purchase
of securities. Interest-bearing core deposits increased 37%, while time
deposits $100,000 and over decreased 27% and short-term borrowings declined
23%. The mix of earning assets shifted from loans to securities due to fewer
opportunities to make quality commercial loans.
Provision For Loan Losses
Fewer nonperforming assets and watch list loans and lower charge-offs
resulted in the negative provision for loan losses in 1993. The provision was
a negative $4.50 million in 1993, $22.04 million in 1992 and $43.73 million in
1991. FANB contributed an $800,000 provision for 1993. The decrease from 1991
to 1992 was also due to the lower levels of nonperforming assets, watch list
loans and net charge-offs.
A continuation of negative provisions in 1994 is unlikely if loan growth
continues or accelerates. However, any provision in 1994 is expected to be low
in comparison to historical levels.
For discussion of the allowance for loan losses, net charge-offs and
nonperforming assets, see the Credit Risk Management section of this Financial
Review.
Provision for Loan Losses (millions)
The graph inserted shows provision from 1989
to 1993. The plot points are:
GRAPH DENOMI- Years
TYPE NATIONS 1989 1990 1991 1992 1993
- ---------------------------------------------------------------
BAR MILLIONS 26.220 47.425 43.734 22.040 -4.504
Other Income
Other income was $102.42 million, a 6% increase over 1992's $96.63
million. FCC's largest noninterest income increases, excluding FANB, were in
deposit fees and service charges, trust fees and broker/dealer revenue. FANB's
other income was $2.07 million for the year, of which deposit fees and service
charges were $1.48 million.
Deposit fees and service charges, including FANB, increased 7%, from
$40.53 million in 1992 to $43.49 million in 1993, primarily due to higher
volumes of overdraft charges and commercial account fees. Credit card income
increased from $21.53 million in 1992 to $22.38 million, or 4%, primarily due
to higher merchant volumes. Trust fees increased 20%, from $9.44 million in
1992 to $11.37 million in 1993, because of higher fee income from bond
trusteeships and employee benefit plans. Broker/dealer revenue of $8.78
million was 21% higher in 1993 than in 1992 due to increased sales of mutual
funds, annuities and government securities.
Other operating revenue decreased from $17.65 million in 1992 to $16.83
million in 1993. This decrease was primarily due to a one-time payment in 1992
from the RTC related to the Pelican acquisition plus lower loan origination
fees in 1993. FCC began to defer loan origination fees in January of 1993 as a
result of retaining mortgage loans rather than reselling the loans originated.
This deferral resulted in lower loan origination fees in 1993, even though
there were more loans originated than in the prior year.
Other income increased 15% from 1991 to 1992. The largest increases were
in deposit fees and service charges, broker/dealer revenue and other operating
revenue. The 18% increase in deposit fees and service charges was related to
the new Pelican accounts acquired. Broker/dealer revenues were 51% higher than
the prior year due to increased trading activity as customers looked for higher
yielding investments. Other operating revenue increased 32%, with the largest
increases related to ATM network income, official items income and a one-time
payment from the RTC related to the Pelican acquisition.
Other Income (millions)
excluding securities transactions
The graph inserted shows other income
excluding securities transactions from 1989 to
1993. The plot points are:
GRAPH DENOMI- Years
TYPE NATIONS 1989 1990 1991 1992 1993
- ---------------------------------------------------------------
BAR MILLIONS 64.215 73.213 83.419 96.369 102.844
Operating Expense
Operating expense was $221.08 million in 1993, 8% higher than the prior
year. The primary factors in the increase were personnel expense and
professional fees, partially offset by an 82% decrease in nonperforming assets
expense and by deferrals of loan origination costs. FANB had operating
expenses for the year of $9.23 million, of which $3.89 million, or 42%, was
personnel expense.
Personnel expense, including FANB, increased 17% to $119.39 million from
1992, primarily due to an increase in staff of 374 and higher awards for
above-plan performance. Of the 374 increase, 110 related to the FANB
acquisition. The remainder of the staff increase was due to the hiring of new
employees to improve service levels in light of increased volumes.
Net occupancy expense was $15.67 million, an increase of 6% from the prior
year. Equipment expense was 4% higher than 1992, at $12.87 million for 1993.
The increases in both categories were due to increases in overall costs
associated with the 11 additional FANB branches.
Other operating expense decreased 4%, with an 82% decrease in
nonperforming assets expense and the initiation of deferral of loan origination
costs. These were offset by a 34% increase in professional fees and a 13%
increase in FDIC insurance assessments. Nonperforming assets expense was $1.15
million in 1993, versus $6.33 million in 1992. The decrease was due to lower
provisions for losses on foreclosed properties. FCC deferred loan origination
costs of $7.95 million in 1993. Loan origination costs deferred are charged
against interest income over the lives of the related loans. The effect of
deferring loan origination costs was not material after considering the
amortization of these costs in 1993. FDIC insurance assessments increased 13%,
or $1.32 million, due to deposit growth. Professional fees increased $2.96
million, primarily due to increased market research and consultant fees related
to corporate-wide revenue initiatives.
From 1991 to 1992, operating expense increased 10% primarily due to
increased personnel expense and FDIC insurance assessments, partially offset by
a 53% decrease in nonperforming assets expense. Personnel expense increased
17% from 1991, primarily due to increased staff related to the Pelican
acquisition, plus incentive compensation for above-plan performance. FDIC
insurance assessments increased 31%, or $2.46 million, due to deposit growth.
Nonperforming assets expense decreased due to lower provisions for losses and
operating expenses and higher gains on sales of other real estate.
Refer to Note 19 of the Notes to Consolidated Financial Statements for
additional details.
Personnel Expense (millions)
The graph inserted shows personnel expense
from 1989 to 1993. The plot points are:
GRAPH DENOMI- Years
TYPE NATIONS 1989 1990 1991 1992 1993
- ---------------------------------------------------------------
BAR MILLIONS 74.597 78.095 87.557 102.111 119.387
Operating Expense (millions)
other than personnel expense
The graph inserted shows operating expense
excluding personnel expense from 1989 to 1993. The
plot points are:
GRAPH DENOMI- Years
TYPE NATIONS 1989 1990 1991 1992 1993
- ---------------------------------------------------------------
BAR MILLIONS 80.800 87.230 98.406 101.670 101.693
Income Taxes
Income tax expense was $40.64 million in 1993, $32.77 million for 1992 and
$10.94 million for 1991. The increase from 1992 to 1993 was primarily due to
an increase in pretax income, the expense associated with adopting a new method
of accounting for income taxes and an increase in the marginal federal income
tax rate. These increases were partially offset by a favorable tax settlement
with the IRS. The increase from 1991 to 1992 was primarily due to an increase
in pretax income from 1991 to 1992 of $60.32 million.
FCC adopted a new standard for accounting for income taxes effective
January 1, 1993. The Financial Accounting Standards Board (FASB) issued the
new standard (SFAS 109) requiring the asset and liability method of accounting
for income taxes. The effect of adopting SFAS 109 was an additional one-time
expense of $590,000 in 1993.
On August 10, 1993 the marginal federal income tax rate was increased to
35% from 34%. This increase was made retroactive to January 1, 1993.
In connection with the acquisitions of two banks in 1985, FCC recorded
intangible assets called "depositor relationships" and "borrower
relationships". During 1993, FCC reached a final agreement with the IRS which
allowed the deductibility of the amortization of these intangibles. Following
a review of its tax liability position, FCC recognized a one-time adjustment of
$3.50 million, which reduced income tax expense for the year.
FCC's income tax expense as a percent of pretax income (30% for 1993, 31%
in 1992 and 24% in 1991) is lower than the respective federal statutory tax
rates (35% in 1993 and 34% in 1992 and 1991). In addition to the adjustment
previously discussed, FCC's income tax was reduced because a portion of FCC's
interest income is from the financing of state and local governments. Interest
income from government financing is generally exempt from federal income tax.
Louisiana does not assess income tax on commercial banks; rather, banks pay
property tax based on the value of their capital stock.
For additional information on FCC's effective tax rates and the
composition of changes in income tax expense for all periods, see Note 20.
FINANCIAL CONDITION ANALYSIS
Investments
Securities Held For Investment
Securities held for investment were $1.52 billion as of December 31, 1993,
including FANB's $104.62 million. Average securities held for investment were
$2.09 billion during 1993, compared to $2.73 billion in 1992. This decrease
from the prior year was due to the reclassification in the second quarter of
1993 of $466.17 million of securities to the held for sale category. These
reclassifications were due to the periodic review of all investments to ensure
that, given current conditions and asset/liability management considerations,
all securities are properly classified. Also, maturities and prepayments
during 1993 in the held for investment portfolio were used to purchase
securities held for sale. By having more securities held for sale, management
provided more flexibility in the portfolio to allow for portfolio restructuring
due to changes in the interest rate environment.
The most significant decreases in the held for investment portfolio were
in U.S. Treasury securities and U.S. government agencies securities. The
average expected maturity of the portfolio was 3.29 years at the end of 1993,
and the average yield was 5.48%. Table 3 presents detailed information on the
yields and maturities of securities held for investment.
At the end of 1993, there was a net unrealized gain of $23.45 million,
including gross gains of $24.67 million and gross losses of $1.22 million, in
the securities held for investment portfolio. As a result of calls, gross
realized gains were $102,000, and gross realized losses were $48,000 in 1993.
<TABLE>
<CAPTION>
TABLE 3. SECURITIES HELD FOR INVESTMENT--MATURITIES AND YIELDS<FN1>
=================================================================================================================================
December 31, 1993 (Restated)
- ---------------------------------------------------------------------------------------------------------------------------------
(dollars in thousands) Maturity
- ---------------------------------------------------------------------------------------------------------------------------------
Total Carrying
Within 1 Year 1-5 Years 5-10 Years After 10 Years Value
- ---------------------------------------------------------------------------------------------------------------------------------
FTE FTE FTE FTE FTE
Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. treasury securities $ 757,790 5.27 % $ 12,080 5.86 % $ 1,020 7.98 % $ 25 5.83 % $ 770,915 5.28 %
Obligations of U.S. agencies
and corporations 6,279 4.30 47,996 5.14 10,970 7.54 608,863 5.11 674,108 5.15
Obligations of states and
political subdivisions 11,493 6.16 12,818 12.85 6,829 12.42 32,591 12.43 63,731 11.39
Other bonds, notes,
debentures and stock - - 433 8.73 - - 14,451 5.03 14,884 5.13
- ----------------------------------------------------------------------------------------------------------------------------------
Total securities held
for investment $ 775,562 5.28 % $ 73,327 6.63 % $ 18,819 9.33 % $ 655,930 5.47 % $1,523,638 5.48 %
==================================================================================================================================
<FN1> Fully taxable equivalent based on a 35% tax rate. Maturities are based on the contractual maturities of the securities.
</TABLE>
Securities Held For Sale
Securities held for sale were $1.78 billion as of December 31, 1993, 284%
higher than the previous year-end. This increase was primarily due to the
reclassification of securities from the held for investment category, and the
reinvestment during 1993 of proceeds from the maturities and prepayments of
held for investment securities into held for sale securities.
The largest component of this category was $1.01 billion of
mortgage-backed securities, of which $574.95 million were fixed rate and
$431.41 million were floating rate. The average expected maturity of the
portfolio was 2.76 years, and the average yield was 4.78% at the end of 1993.
At year-end, the securities held for sale portfolio had a net unrealized gain
of $3.38 million, with gross gains of $9.90 million and gross losses of $6.52
million. Gross realized gains were $473,000, and gross realized losses were
$950,000 during 1993. Yields and contractual maturities of the held for sale
portfolio are included in Table 4.
<PAGE>
<TABLE>
<CAPTION>
TABLE 4. SECURITIES HELD FOR SALE--MATURITIES AND YIELDS<FN1>
==================================================================================================================================
December 31, 1993 (Restated)
- ----------------------------------------------------------------------------------------------------------------------------------
(dollars in thousands) Maturity
- ----------------------------------------------------------------------------------------------------------------------------------
Total Carrying
Within 1 Year 1-5 Years 5-10 Years After 10 Years Value
- ----------------------------------------------------------------------------------------------------------------------------------
FTE FTE FTE FTE FTE
Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. treasury securities $ 2,142 3.10 % $711,416 4.58 % $ - - % $ - - % $ 713,558 4.57 %
Obligations of U.S. agencies
and corporations - - 120,042 5.33 306,262 4.97 579,054 4.54 1,005,358 4.76
Obligations of states and
political subdivisions 3,775 7.11 8,603 8.39 5,191 8.46 23,442 10.38 41,011 9.42
Other bonds, notes,
debentures and stock - - - - - - 20,000 3.51 20,000 3.51
- ----------------------------------------------------------------------------------------------------------------------------------
Total securities held
for sale $ 5,917 5.66 % $840,061 4.73 % $311,453 5.03 % $622,496 4.73 % $1,779,927 4.78 %
==================================================================================================================================
<FN1> Fully taxable equivalent based on a 35% tax rate. Maturities are based on the contractual maturities of the securities.
</TABLE>
Accounting for Certain Investments in Debt and Equity Securities
In May, 1993, the FASB issued Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and Equity Securities".
This standard addresses the accounting and reporting for investments in equity
securities that have readily determinable fair values and for all investments
in debt securities. Those securities classified as Available for Sale will be
marked to market each reporting period, with the unrealized gain or loss
reflected in the equity section of the consolidated balance sheets, net of tax
effects. Adoption of the new standard is required for fiscal years beginning
after December 15, 1993. FCC adopted this statement effective January 1, 1994.
FCC's intention is to classify a substantial portion of its securities
portfolio in the Available for Sale category, which will have the effect of
increasing or decreasing stockholders' equity to the extent market value of the
securities exceeds or is lower than book value, net of tax effects. As of
December 31, 1993, such an adjustment would have resulted in a $13.65 million
increase in stockholders' equity.
Money Market Investments
Money market investments include interest-bearing deposits in other banks,
federal funds sold, securities purchased under resale agreements and trading
account securities. Money market investments are used to meet liquidity
requirements, and as a temporary investment until longer-term investments can
be made.
At the end of 1993, money market investments were $84.50 million. Average
money market investments were $294.99 million in 1993, compared to $360.84
million in the prior year. The reason for the decline from 1992 was the
opportunity to invest in higher-yielding securities and loans. As a percent of
average earning assets, money market investments declined from 7% in 1992 to 5%
in 1993.
Loans
Loans and leases, net of unearned income, were $2.67 billion as of
December 31, 1993, including $86.45 million from FANB. Loans were 19% higher
at the end of 1993 than at the end of 1992. Loans averaged $2.41 billion in
1993, versus $2.18 billion in 1992, a 10% increase. During the past several
years, economic conditions in the markets traditionally served by FCC's banks
have resulted in limited opportunities to make quality commercial loans.
However, opportunities improved in 1993. Commercial loans increased during the
fourth quarter. Residential mortgage loans and automobile loans grew
significantly throughout 1993. The broad-based loan growth experienced in the
fourth quarter is expected to continue in 1994.
As shown in Table 5, the largest segment of the loan portfolio continues
to be loans to individuals. All types of loans, except credit card, increased
from year-end 1992 to year-end 1993. Note 6 contains additional information on
loan concentrations.
<PAGE>
<TABLE>
<CAPTION>
TABLE 5. LOANS AND LEASES OUTSTANDING BY TYPE
================================================================================================================================
December 31
- --------------------------------------------------------------------------------------------------------------------------------
1993 1992 1991 1990 1989
(in thousands) (Restated)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Domestic
Loans to individuals $1,184,726 $ 817,109 $ 784,060 $ 803,142 $ 749,811
Commercial, financial and agricultural 482,677 473,411 590,780 631,890 661,844
Real estate-commercial mortgages 466,228 417,113 359,690 364,502 345,303
Real estate-other 55,055 62,258 72,795 101,223 107,588
Credit card loans 383,932 385,604 403,557 392,717 343,863
Other 106,465 95,463 85,130 97,448 143,882
- --------------------------------------------------------------------------------------------------------------------------------
Total domestic loans and leases 2,679,083 2,250,958 2,296,012 2,390,922 2,352,291
International
In domestic offices 7,436 4,912 3,780 3,975 1,187
- --------------------------------------------------------------------------------------------------------------------------------
Total loans and leases $2,686,519 $ 2,255,870 $ 2,299,792 $ 2,394,897 $ 2,353,478
================================================================================================================================
</TABLE>
The pie chart on this page presents data on the loan portfolio by
borrower's industry, excluding consumer loans. Table 6 provides information on
maturities and rate sensitivities by loan type.
Loans and Leases (billions)
This graph inserted shows average loans and
leases, net of unearned income, from 1989 to
1993. The plot points are:
GRAPH DENOMI- Years
TYPE NATIONS 1989 1990 1991 1992 1993
- ---------------------------------------------------------------
BAR BILLIONS 2.232 2.403 2.323 2.185 2.407
Loan Portfolio by Industry
(excluding consumer loans)
The pie chart inserted presents data on the
loan portfolio by borrowers' industry, excluding
consumer loans as of December 31, 1993. The
plot points are (in percentages):
Borrower's Industry Amount
- ------------------- ------
Health 12.1%
Other Services 14.9%
Finance 12.5%
Real Estate 8.7%
Construction 4.8%
Mining 5.2%
Manufacturing 6.0%
Retail 8.4%
Wholesale 7.7%
Transportation 8.7%
Other 1.7%
Professional 9.3%
<TABLE>
<CAPTION>
TABLE 6. LOAN MATURITIES AND RATE SENSITIVITIES BY TYPE
======================================================================================================
December 31, 1993 (Restated)
Maturing
- ------------------------------------------------------------------------------------------------------
Within One to After
(in thousands) One Year Five Years Five Years Total
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Fixed
Loans to individuals - other $ 71,632 $438,487 $ 6,986 $ 517,105
Loans to individuals - residential (1-4 family) 27,941 96,303 285,216 409,460
Commercial, financial and agricultural 80,013 71,824 10,986 162,823
Real estate-commercial mortgages 47,593 157,198 48,202 252,993
Real estate-other 23,076 11,943 3,770 38,789
Credit card loans 313,906 - - 313,906
Other 38,341 13,713 21,123 73,177
- ------------------------------------------------------------------------------------------------------
Total fixed loans and leases 602,502 789,468 376,283 1,768,253
- ------------------------------------------------------------------------------------------------------
Floating
Loans to individuals - other 165,980 17,181 661 183,822
Loans to individuals - residential (1-4 family) 47,589 8,938 17,812 74,339
Commercial, financial and agricultural 215,744 88,130 15,980 319,854
Real estate-commercial mortgages 93,408 85,924 33,903 213,235
Real estate-other 6,503 7,116 2,647 16,266
Credit card loans 70,026 - - 70,026
Other 38,511 1,961 252 40,724
- ------------------------------------------------------------------------------------------------------
Total floating loans and leases 637,761 209,250 71,255 918,266
- ------------------------------------------------------------------------------------------------------
Total loans and leases $1,240,263 $998,718 $447,538 $2,686,519
======================================================================================================
</TABLE>
Consumer loans include loans to individuals and credit card loans. Loans
to individuals were $1.18 billion at the end of 1993, including $48.63 million
for FANB, and were 45% higher than the prior year-end. There were increases in
all categories of consumer loans with the largest increases in residential
mortgage loans and automobile loans. These increases were directly related to
increased loan demand and refinancings in a lower interest rate environment.
Loans to individuals were 44% of total loans, a significant increase from 36%
at the end of 1992. As of December 31, 1993, credit card loans were $383.93
million, or 14% of total loans, including $1.85 million for FANB. Credit card
loans were $1.67 million lower than at 1992's year-end, when they were 17% of
total loans. Increased rate competition among credit card providers resulted
in this decrease.
Commercial loans were $482.68 million as of December 31, 1993, or 18% of
total loans, including $9.87 million for FANB. This compares to $473.41
million at December 31, 1992, or 21% of total loans. The three largest
industries were services, with $128.03 million, transportation, with $61.99
million, and wholesale trade, with $51.98 million. The remainder of commercial
loans were diversified among a wide array of industries. The service industry
had the largest increase during the year from $101.24 million to $128.03
million, or a 26% increase.
Real estate loans are comprised of loans secured by commercial properties,
construction and land development loans, loans secured by multi-family
properties and farmland loans. Commercial real estate loans are the most
significant type of real estate loans and were $466.23 million at year-end
1993, or 17% of total loans, including $23.42 million for FANB. This compares
to $417.11 million, or 18% of total loans, at year-end 1992. Approximately 31%
of these properties are owner-occupied, with the remainder held as investment
properties. The majority of commercial real estate loans (86%) were used to
finance the building or purchase of commercial property. Construction and land
development loans were $33.00 million at year-end, 1% of total loans.
Multi-family real estate loans and farmland loans were each less than 1% of
total loans at the end of 1993.
Deposits
At year-end, deposits were $5.31 billion. As shown in Table 7, average
deposits were $5.18 billion in 1993, a 5% increase over 1992. Core deposits
were 93% of average deposits for both 1993 and 1992. Since the Pelican
acquisition in 1992, core deposits have grown steadily, particularly
noninterest-bearing deposits. This trend was primarily responsible for the
shift in funding mix, which contributed to the decline in the cost of funds.
Table 8 shows the maturities of time deposits $100,000 and over.
<TABLE>
<CAPTION>
TABLE 7. AVERAGE DEPOSITS
===============================================================================================================
1993 1992 1991
(dollars in thousands) (Restated)
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Domestic
Noninterest-bearing demand deposits $1,099,471 21.24 % $ 922,519 18.62 % $ 770,784 19.60 %
NOW account deposits 856,370 16.54 734,667 14.83 489,061 12.44
Money market investment deposits 787,003 15.20 831,610 16.79 669,649 17.03
Savings deposits 598,964 11.57 523,927 10.58 356,012 9.06
Other consumer time deposits 1,488,508 28.75 1,588,597 32.07 1,165,666 29.65
- ---------------------------------------------------------------------------------------------------------------
Total core deposits 4,830,316 93.30 4,601,320 92.89 3,451,172 87.78
Time deposits $100,000 and over 336,460 6.50 343,720 6.94 467,617 11.89
- ---------------------------------------------------------------------------------------------------------------
5,166,776 99.80 4,945,040 99.83 3,918,789 99.67
International
Foreign branch time deposits 10,097 .20 8,532 .17 12,823 .33
- ---------------------------------------------------------------------------------------------------------------
Total average deposits $5,176,873 100.00 % $ 4,953,572 100.00 % $ 3,931,612 100.00 %
===============================================================================================================
</TABLE>
<TABLE>
<CAPTION>
TABLE 8. MATURITIES OF DOMESTIC TIME DEPOSITS
OF $100,000 AND OVER
=======================================================
December 31, 1993
(in thousands) (Restated)
- -------------------------------------------------------
<S> <C>
Within three months $ 209,812
Three to six months 94,223
Six to twelve months 47,668
After twelve months 42,258
- -------------------------------------------------------
Total $ 393,961
=======================================================
</TABLE>
Short-Term Borrowings
During 1993, short-term borrowings averaged $527.84 million, compared to
$269.31 million in 1992. As a percent of average interest-bearing liabilities,
short-term borrowings were 11% this year and 6% for 1992. Management increased
financial leverage using short-term borrowings to purchase short-term
securities, contributing additional net interest income. Table 9 presents the
detail of average short-term borrowings for 1993, 1992 and 1991.
<TABLE>
<CAPTION>
TABLE 9. AVERAGE SHORT-TERM BORROWINGS
=============================================================================================================
1993 1992 1991
(Restated)
- -------------------------------------------------------------------------------------------------------------
(dollars in thousands) Balance Rate Balance Rate Balance Rate
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Federal funds purchased and securities sold
under agreements to repurchase $516,058 2.84 % $265,873 2.93 % $ 340,877 5.33 %
Commercial paper 225 2.67 26 3.85 4,093 6.16
Other short-term borrowings 11,555 3.13 3,414 2.72 4,313 5.52
- -------------------------------------------------------------------------------------------------------------
Total $527,838 2.85 % $269,313 2.93 % $ 349,283 5.34 %
=============================================================================================================
</TABLE>
Asset/Liability Management
The objective of asset/liability management is to maximize net interest
income while balancing liquidity and capital needs and minimizing interest rate
risk. The Asset/Liability Management Committee (ALCO) develops and reviews
strategies which assist in the achievement of FCC's performance goals.
Strategies may include purchases and sales of securities to alter maturities
and yields, changes in the mix of earning assets and funding sources, and the
use of off-balance sheet interest rate risk products such as swaps, caps and
floors.
<PAGE>
Interest Rate Risk
Interest rate risk is created by changes in interest rates and maturities
and repricing of assets and liabilities. Interest rate risk is measured in
three ways. A net interest income simulation model determines the impact an
assumed change in interest rates will have on FCC's net interest income.
Another method measures the fair value of assets and liabilities. A third
method evaluates interest rate risk by measuring the interest rate sensitivity
gap. Table 10 demonstrates FCC's gap position. However, gap analysis cannot
be relied upon solely since conditions change on a daily basis, and gap is a
static measurement. These and other methods are used concurrently to manage
interest rate risk.
<TABLE>
<CAPTION>
TABLE 10. INTEREST RATE SENSITIVITY
===========================================================================================================================
By Repricing Dates at December 31, 1993 (Restated)
- ---------------------------------------------------------------------------------------------------------------------------
0-30 31-90 91-180 181-365 After Noninterest-
(dollars in millions) Days Days Days Days 1 Year Bearing Total
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Securities $ 574 $ 246 $ 491 $ 659 $ 1,333 $ - $ 3,303
Loans and leases, net of unearned income 930 108 137 179 1,320 - 2,674
Money market investments 59 25 1 - - - 85
Other assets - - - - - 598 598
- ---------------------------------------------------------------------------------------------------------------------------
Total assets $ 1,563 $ 379 $ 629 $ 838 $ 2,653 $ 598 $ 6,660
- ---------------------------------------------------------------------------------------------------------------------------
SOURCES OF FUNDS
Money market deposits $ 1,089 $ - $ - $ 541 $ 41 $ - $ 1,671
Consumer time deposits 435 235 344 214 814 - 2,042
Time deposits $100,000 and over 142 74 93 49 42 - 400
Short-term borrowings 678 - - - - - 678
Long-term debt - - - - 90 - 90
Noninterest-bearing deposits - - - - - 1,196 1,196
Other liabilities - - - - - 73 73
Stockholders' equity - - - - - 510 510
- ---------------------------------------------------------------------------------------------------------------------------
Total sources of funds $ 2,344 $ 309 $ 437 $ 804 $ 987 $ 1,779 $ 6,660
- ---------------------------------------------------------------------------------------------------------------------------
INTEREST RATE SWAPS $ - $ - $ 213 $ 50 $ (263) $ -
INTEREST RATE SENSITIVITY GAP $ (781) $ 70 $ 192 $ 34 $ 1,666 $(1,181)
CUMULATIVE INTEREST RATE SENSITIVITY GAP $ (781) $ (711) $(306) $ (222) $ 1,181 $ -
CUMULATIVE INTEREST RATE SENSITIVITY GAP
AS A PERCENT OF TOTAL ASSETS (11.7)% (10.7)% (4.6)% (3.3)% 17.7 %
===========================================================================================================================
</TABLE>
Off-Balance Sheet Instruments
FCC uses off-balance sheet instruments in order to manage various risks
and generate fee income. Loan commitments, letters of credit, foreign exchange
contracts and interest rate contracts are not carried on the balance sheet.
However, income and expenses related to these instruments are reflected in the
financial statements. Note 17 provides additional information on off-balance
sheet instruments.
FCC enters into interest rate contracts with the objective of mitigating
its interest rate risk. FCC does not use interest rate contracts for
speculative purposes. These interest rate contracts are intended to partially
insulate net interest income from changes in interest rates. As of December
31, 1993, FCC had $1.02 billion notional amount of interest rate contracts,
compared to $368 million as of December 31, 1992. The notional amount
represents an agreed upon amount on which calculations of interest payments to
be exchanged are based. The increase in the notional value of derivatives
indicates FCC's increased use of these instruments to minimize the effect of
interest rate fluctuation on net interest income. FCC will continue to use
various factors in deciding the appropriate mix of derivatives including
liquidity, capital requirements and yield. Table 11 summarizes the changes in
FCC's derivative products by type during 1993.
<TABLE>
<CAPTION>
TABLE 11. CHANGES IN DERIVATIVE PRODUCTS (NOTIONAL AMOUNTS)
==========================================================================
OPTION INTEREST AMORTIZING
BASED RATE INTEREST
INSTRUMENTS SWAPS RATE SWAPS TOTAL
- --------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Balance, December 31, 1992 $ 355,000 $ 13,000 $ - $ 368,000
Purchases 750,000 50,000 500,000 1,300,000
Sales - - (300,000) (300,000)
Maturities (350,000) - - (350,000)
- --------------------------------------------------------------------------
Balance, December 31, 1993 $ 755,000 $ 63,000 $ 200,000 $ 1,018,000
==========================================================================
</TABLE>
For 1993, derivative products increased net interest income by $1.64
million, compared to $3.11 million in 1992. Most of these interest rate
contracts hedge specific assets or liabilities and qualify for deferral
accounting. However, during 1993, FCC had amortizing interest rate swaps that
were used as overall net interest income hedges but did not qualify for
deferral accounting treatment; thus, they were marked to market at the end of
each financial reporting period. The sale of these contracts resulted in a net
realized gain of $252,000 for 1993. Table 12 summarizes the impact of FCC's
derivative products on net interest income for the year.
<TABLE>
<CAPTION>
TABLE 12. ANALYSIS OF DERIVATIVE PRODUCT INCOME (EXPENSE)
===========================================================================================
OPTION INTEREST AMORTIZING
Year Ended December 31, 1993 BASED RATE INTEREST
(in thousands) INSTRUMENTS SWAPS RATE SWAPS TOTAL
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Interest Income (expense) accrued $ 1,851 $ (366) $ 984 $ 2,469
Premium amortization (830) - - (830)
- -------------------------------------------------------------------------------------------
Net income (expense) $ 1,021 $ (366) $ 984 $ 1,639
===========================================================================================
</TABLE>
<PAGE>
Liquidity
Liquidity is needed to meet cash requirements for deposit withdrawals and
the funding of loans. A stable base of funding sources and an adequate level
of assets readily convertible into cash provide liquidity.
FCC's core deposits, a stable source of funding, increased 5% from the
prior year. An additional source of liquidity for FCC's Parent Company is
commercial paper; however during 1993, it was an insignificant funding source.
FCC also maintains lines of credit with major banks. These lines of credit
totaled $20 million at the end of 1993.
Credit Risk Management
FCC manages its credit risk by diversifying the loan portfolio,
maintaining high credit underwriting standards which emphasize cash flow and
repayment ability, providing an adequate allowance for loan losses and
continually reviewing loans through the independent loan review process.
Portfolio diversification reduces credit risk by minimizing the impact on the
portfolio if weaknesses develop in certain segments of the economy. Credit
underwriting standards ensure that loans are properly structured and
collateralized. An adequate allowance for loan losses provides for losses
inherent in the loan portfolio. The loan review process identifies and
monitors potentially weak or deteriorating credits.
Nonperforming Assets
Nonaccrual loans, restructured loans and foreclosed assets are included in
nonperforming assets. Nonperforming assets declined $31.14 million during the
year, to $32.71 million at December 31, 1993. As a percent of loans and
foreclosed assets, nonperforming assets were 1.22% at year-end and 2.82% at
December 31, 1992. Positive trends in nonperforming assets during 1992
continued into 1993, as shown in Table 13. Table 14 reconciles the changes in
nonperforming assets during 1993. All categories of nonperforming loans
decreased during the year. The largest decreases in nonperforming loans were
in the categories of nonaccrual real estate-commercial mortgage and commercial,
financial and agricultural loans, and were primarily due to repayments.
Nonperforming Assets (millions)
This graph inserted shows nonperforming
assets from 1989 to 1993. The plot points
are:
GRAPH DENOMI- Years
TYPE NATIONS 1989 1990 1991 1992 1993
- ---------------------------------------------------------------
BAR MILLIONS 65.153 102.509 90.432 63.848 32.709
<PAGE>
<TABLE>
<CAPTION>
TABLE 13. NONPERFORMING ASSETS
=================================================================================================================================
December 31
- ---------------------------------------------------------------------------------------------------------------------------------
1993 1992 1991 1990 1989
(dollars in thousands) (Restated)
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nonaccrual loans by type
Loans to individuals-residential mortgages $ 4,998 $ 8,826 $ 9,574 $ 8,972 $ 4,829
Loans to individuals-other 866 1,027 1,604 1,671 962
Commercial, financial and agricultural 3,761 8,305 14,634 16,198 9,282
Real estate-commercial mortgages 15,613 23,757 26,587 32,259 6,414
Real estate-other 223 585 2,992 8,314 5,913
Other - 608 1,163 427 96
Restructured loans - - 637 893 3,681
- ---------------------------------------------------------------------------------------------------------------------------------
25,461 43,108 57,191 68,734 31,177
- ---------------------------------------------------------------------------------------------------------------------------------
Foreclosed assets
Other real estate 12,667 29,258 37,129 36,464 34,727
Other foreclosed assets 96 93 367 122 373
Allowance for losses on foreclosed assets (5,515) (8,611) (4,255) (2,811) (1,124)
- ---------------------------------------------------------------------------------------------------------------------------------
7,248 20,740 33,241 33,775 33,976
- ---------------------------------------------------------------------------------------------------------------------------------
Total nonperforming assets $32,709 $ 63,848 $90,432 $ 102,509 $65,153
=================================================================================================================================
Loans past due 90 days or more and not on nonaccrual status $12,523 $ 13,499 $10,182 $ 8,716 $ 8,201
=================================================================================================================================
End of year ratios
Nonperforming assets as a percent of loans and leases<FN1>
plus foreclosed assets 1.22 % 2.82 % 3.91 % 4.26 % 2.76 %
Allowance for loan losses as a percent of nonperforming loans 268.26 % 178.56 % 123.83 % 84.10 % 142.45 %
Loans and leases past due 90 days or more and not on nonaccrual
status as a percent of loans and leases<FN1> .47 % .60 % .45 % .37 % .35 %
=================================================================================================================================
<FN1> Net of unearned income.
</TABLE>
<TABLE>
<CAPTION>
TABLE 14. CHANGES IN NONPERFORMING ASSETS
===============================================================
(in thousands) (Restated)
- ---------------------------------------------------------------
<S> <C>
Balance at January 1, 1993 $ 66,574
Additions 18,175
Payments and sales (40,314)
Writedowns, charge-offs and foreclosed
assets provisions (4,628)
Loans returned to accrual status (7,098)
- ---------------------------------------------------------------
Net change (33,865)
- ---------------------------------------------------------------
Balance at December 31, 1993 $ 32,709
===============================================================
</TABLE>
73% of nonperforming loans were contractually current or no more than 30
days past due at the end of 1993, compared to 70% at the end of 1992. During
the year, FCC recovered interest on nonaccrual loans of $3.56 million, which
were recorded as interest income.
Foreclosed assets, net of the allowance, were $7.25 million as of December
31, 1993, a decline of $13.49 million from a year ago. The allowance for
foreclosed assets was $5.52 million at year-end, a decline of $3.10 million
from 1992. Sales of properties caused the decrease in foreclosed assets and in
the allowance for foreclosed assets during the year.
Loans and leases past due 90 days or more and not on nonaccrual status
were $12.52 million at December 31, 1993, or .47% of loans. Included in this
category were $8.49 million of student loans which were government-guaranteed
and $3.67 million of credit card loans which are charged-off within 180 days of
becoming past due.
Accounting by Creditors for Impairment of a Loan
In May, 1993, the FASB issued Statement of Financial Accounting Standards
No. 114, "Accounting by Creditors for Impairment of a Loan". This standard
requires the measurement of certain impaired loans based on the present value
of expected future cash flows discounted at the loan's effective interest rate.
Adoption of this new standard is required for fiscal years beginning after
December 15, 1994. FCC will adopt this statement beginning January 1, 1995.
The effect of SFAS 114 on FCC's consolidated financial statements has not yet
been determined.
Watch List
FCC's watch list includes loans which, for management purposes, have been
identified as requiring a higher level of monitoring due to risk. FCC's watch
list includes both performing and nonperforming loans, as well as foreclosed
assets. The majority of watch list loans are classified as performing, because
they do not have characteristics resulting in uncertainty about the borrower's
ability to repay principal and interest in accordance with the original terms
of the loans.
The watch list consists of classifications, identified as Type 1 through
Type 4. Types 1, 2 and 3 generally parallel the regulatory classifications of
loss, doubtful and substandard, respectively. Type 4 generally parallels the
regulatory classification of Other Assets Especially Mentioned (OAEM). These
loans require monitoring due to conditions which, if not corrected, could
increase credit risk.
Watch list loans and foreclosed assets declined 28% during the year to
$157.08 million as of December 31, 1993. Table 15 presents the trends in watch
list loans and foreclosed assets for the past five years.
<PAGE>
<TABLE>
<CAPTION>
TABLE 15. WATCH LIST
==========================================================================================================
(dollars in thousands) Type 1 Type 2 Type 3 Type 4 Total
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 31, 1993<FN1> $ - $ 2,233 $ 97,377 $57,472 $157,082
December 31, 1992 $ - $ 6,489 $150,093 $62,096 $218,678
December 31, 1991 $ - $ 10,197 $212,286 $94,708 $317,191
December 31, 1990 $ - $ 15,474 $191,942 $52,585 $260,001
December 31, 1989 $ - $ 5,260 $149,251 $32,328 $186,839
As A Percent Of Total Loans And Foreclosed Assets Type 1 Type 2 Type 3 Type 4 Total
- ----------------------------------------------------------------------------------------------------------
December 31, 1993<FN1> - % .09 % 3.74 % 2.20 % 6.03 %
December 31, 1992 - % .29 % 6.59 % 2.73 % 9.61 %
December 31, 1991 - % .44 % 9.10 % 4.06 % 13.60 %
December 31, 1990 - % .64 % 7.90 % 2.17 % 10.71 %
December 31, 1989 - % .22 % 6.25 % 1.35 % 7.82 %
==========================================================================================================
<FN1> 1993 information has not been restated for the FANB acquisition.
</TABLE>
Allowance for Loan Losses
The allowance for loan losses was $68.30 million as of December 31, 1993,
an $8.67 million decline since December 31, 1992. As a percent of loans and
leases, the allowance was 2.55% as of year-end, compared to 3.44% as of
December 31, 1992. Management believes that the allowance is adequate to cover
possible losses in the loan portfolio. Table 16 presents the activity in the
allowance for loan losses for the past five years. The allocation of the
allowance for loan losses is included in Table 17.
Allowance for Loan Losses
as a % of year-end loans and leases
This graph inserted shows the allowance for
loan losses as a percentage of year-end loans
and leases from 1989 to 1993. The plot
points are:
GRAPH DENOMI- Years
TYPE NATIONS 1989 1990 1991 1992 1993
- ---------------------------------------------------------------
BAR % 1.91 2.44 3.11 3.44 2.55
Net Charge-offs (millions)
This graph inserted shows net charge-offs from
1989 to 1993. The plot points are:
GRAPH DENOMI- Years
TYPE NATIONS 1989 1990 1991 1992 1993
- ---------------------------------------------------------------
BAR MILLIONS 25.480 33.967 30.724 15.884 7.113
<TABLE>
<CAPTION>
TABLE 16. SUMMARY OF LOAN AND LEASE LOSS EXPERIENCE
========================================================================================================================
Years Ended December 31
- ------------------------------------------------------------------------------------------------------------------------
1993 1992 1991 1990 1989
(dollars in thousands) (Restated)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at beginning of year $ 79,919 $ 70,817 $ 57,807 $ 44,412 $ 43,254
Allowances of purchased loans - - - - 418
Adjustment to allowance of purchased loans - - - (63) -
Provision charged to expense (4,504) 22,040 43,734 47,425 26,220
Loans and leases charged to the allowance
Loans to individuals-residential mortgages 743 1,816 4,344 3,304 1,709
Loans to individuals-other 2,267 3,371 5,381 4,921 3,927
Commercial, financial and agricultural 3,027 4,829 11,310 12,865 10,435
Real estate-commercial mortgages 510 2,412 4,826 8,010 4,189
Real estate-other 115 137 400 231 2,611
Credit card loans 9,545 11,514 12,322 10,444 7,704
Other 26 21 444 168 19
- ------------------------------------------------------------------------------------------------------------------------
Total charge-offs 16,233 24,100 39,027 39,943 30,594
- ------------------------------------------------------------------------------------------------------------------------
Recoveries on loans and leases previously charged to the allowance
Loans to individuals-residential mortgages 1,024 1,011 662 119 105
Loans to individuals-other 1,528 1,543 1,620 1,221 1,294
Commercial, financial and agricultural 2,860 2,635 3,903 1,865 2,146
Real estate-commercial mortgages 881 1,005 553 1,552 474
Real estate-other 288 99 227 96 28
Credit card loans 2,144 1,748 1,305 1,105 1,065
Other 395 175 33 18 2
- ------------------------------------------------------------------------------------------------------------------------
Total recoveries 9,120 8,216 8,303 5,976 5,114
- ------------------------------------------------------------------------------------------------------------------------
Net charge-offs 7,113 15,884 30,724 33,967 25,480
- ------------------------------------------------------------------------------------------------------------------------
Balance at end of year $ 68,302 $ 76,973 $ 70,817 $ 57,807 $ 44,412
========================================================================================================================
Gross charge-offs as a percent of average loans and leases<FN1> .67 % 1.10 % 1.68 % 1.66 % 1.37 %
Recoveries as a percent of gross charge-offs 56.18 % 34.09 % 21.28 % 14.96 % 16.72 %
Net charge-offs as a percent of average loans and leases<FN1> .30 % .73 % 1.32 % 1.41 % 1.14 %
Allowance for loan losses as a percent of loans and leases<FN1>
at end of year 2.55 % 3.44 % 3.11 % 2.44 % 1.91 %
========================================================================================================================
<FN1> Net of unearned income.
</TABLE>
<TABLE>
<CAPTION>
TABLE 17. ALLOWANCE FOR LOAN LOSSES
==========================================================================================================================
December 31
- --------------------------------------------------------------------------------------------------------------------------
1993 1992 1991 1990 1989
(Restated)
- --------------------------------------------------------------------------------------------------------------------------
Allowance Loans Allowance Loans Allowance Loans Allowance Loans Allowance Loans
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans to individuals 22.92 % 44.10 % 18.03 % 36.22 % 27.36 % 34.09 % 17.15 % 33.53 % 16.33 % 31.86 %
Commercial, financial
and agricultural 18.50 17.97 24.71 20.99 15.34 24.63 24.20 26.38 42.08 28.12
Real estate 24.46 19.40 25.10 21.25 25.45 18.81 37.74 19.45 19.99 18.49
Credit card 18.57 14.29 16.27 17.09 14.35 17.55 12.21 16.40 10.68 14.61
Other 2.41 4.24 5.57 4.45 4.28 4.92 1.70 4.24 3.01 6.92
Unallocated 13.14 - 10.32 - 13.22 - 7.00 - 7.91 -
- --------------------------------------------------------------------------------------------------------------------------
Total 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 % 100.00 %
==========================================================================================================================
</TABLE>
Net charge-offs as a percent of average loans were .30% in 1993, compared
to .73% in the prior year. The decrease in net charge-offs from 1992 was
primarily in commercial loans.
Positive loan quality trends continued during 1993, and resulted in a
negative provision for loan losses. Improved asset quality also resulted in
higher coverage of nonperforming loans by the allowance for loan losses, which
rose to 268.26% of nonperforming loans. Any provision required in 1994 is
expected to be low in comparison to historical levels.
Capital and Dividends
As of December 31, 1993, total stockholders' equity was 7.65% of assets,
and the regulatory leverage ratio was 7.63%, compared to stockholders' equity
of 6.79% and a leverage ratio of 6.76% at December 31, 1992. Table 18 presents
FCC's risk-based and other capital ratios for the past five years.
Stockholders' Equity
as a % of year-end assets
This graph inserted shows stockholders' equity
as a percentage of year-end assets from 1989 to
1993. The plot points are:
GRAPH DENOMI- Years
TYPE NATIONS 1989 1990 1991 1992 1993
- ---------------------------------------------------------------
BAR % 5.15 5.03 5.01 6.79 7.65
Leverage Ratio
The graph inserted shows stockholders' equity
plus minority interest plus qualifying long-term
debt less intangible assets divided by the latest
quarter's average total assets less intangible
assets from 1989 to 1993. The plot points are:
GRAPH DENOMI- Years
TYPE NATIONS 1989 1990 1991 1992 1993
- ---------------------------------------------------------------
BAR % 5.06 4.66 4.87 6.76 7.63
<PAGE>
<TABLE>
<CAPTION>
TABLE 18. RISK-BASED CAPITAL AND CAPITAL RATIOS
===========================================================================================================================
December 31
- ---------------------------------------------------------------------------------------------------------------------------
1993 1992 1991 1990 1989
(dollars in thousands) (Restated)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Tier 1 capital $ 493,529 $ 397,700 $ 236,898 $ 208,188 $ 218,512
Tier 2 capital 121,921 122,823 125,218 127,527 135,078
- ---------------------------------------------------------------------------------------------------------------------------
Total capital $ 615,450 $ 520,523 $ 362,116 $ 335,715 $ 353,590
===========================================================================================================================
Risk-weighted assets $3,005,545 $ 2,588,546 $ 2,605,998 $ 2,745,070 $ 3,320,825
===========================================================================================================================
Ratios at end of year
Tier 1 capital 16.42 % 15.36 % 9.09 % 7.58 % 6.58 %
Total capital 20.48 % 20.11 % 13.90 % 12.23 % 10.65 %
Stockholders' equity 7.65 % 6.79 % 5.01 % 5.03 % 5.15 %
Tangible stockholders' equity 7.43 % 6.51 % 4.67 % 4.60 % 4.66 %
Leverage ratio 7.63 % 6.76 % 4.87 % 4.66 % 5.06 %
===========================================================================================================================
</TABLE>
All risk-based and other capital ratios improved from year-end 1992 and
remain well above regulatory minimums. At December 31, 1993, tier 1 capital
was 16.42% of risk-based assets and total capital was 20.48%, compared to the
regulatory minimums of 4.00% and 8.00%, respectively.
The FDIC Improvement Act of 1991 (FDICIA) has increased the importance of
the capital ratios. Under the present regulation, all five of FCC's Banks are
classified as "well-capitalized", and would have to pay more than $184.80
million of dividends to the Parent Company to no longer be classified as "well
capitalized". However, the Banks are subject to other dividend limitations.
The Parent Company's sources of funds to pay dividends are its net working
capital and the dividends it receives from the banks. At December 31, 1993,
the Parent Company had net working capital of $55.99 million. The Parent
Company could receive dividends, after December 31, 1993, without prior
regulatory approval, of $148.88 million from the banks, plus an amount equal to
the banks' adjusted net profits for 1994.
FCC increased the common stock cash dividend by 25% in the fourth quarter,
and declared a stock split effected in the form of a 25% stock dividend. The
stock dividend was paid on December 30, 1993. All share and per share data in
this Annual Report have been restated to reflect the stock dividend.
Fair Value of Financial Instruments
SFAS 107 requires that the fair values of certain financial assets and
liabilities as of December 31, 1993 and 1992 be disclosed. The disclosures are
contained in the Notes corresponding to the related assets and liabilities.
Fair values were determined based on market quotes where available or were
calculated using discounted cash flows. The differences between fair values
and book values were primarily caused by differences between contractual and
market interest rates at the respective year-ends.
Fluctuations in fair values occur as interest rates change. Since FCC's
assets and liabilities are carried at historical cost, with the exception of
securities held for sale and trading account securities, and FCC's policy is to
maintain the repricing and maturities of its assets and liabilities relatively
matched, changes in fair values are not expected to have a material impact on
FCC's financial condition, results of operation, liquidity or capital resources.
FOURTH QUARTER RESULTS
Lower income tax expense due to the settlement of a tax issue with the IRS
and a negative loan loss provision contributed to the 13% increase in net
income for the fourth quarter of 1993 when compared to the same period of 1992.
FCC's net income for the fourth quarter of 1993 was $22.83 million, compared
to $20.28 million in the same quarter of 1992. Primary earnings per common
share was $.83 in the fourth quarter, versus $.78 in 1992's fourth quarter. On
a fully diluted basis, earnings per share was $.76 this quarter and $.73 in the
fourth quarter of 1992. FANB recorded a loss of $1.21 million in the fourth
quarter, primarily related to certain increased provisions for losses.
Net interest income was $61.88 million for the fourth quarter of 1993,
less than 1% higher than the fourth quarter of 1992. This slight increase was
the result of the addition of FANB's $2.19 million of net interest income, plus
a favorable earning asset volume and mix, partially offset by lower earning
asset yields.
Earning assets increased 10% when comparing the fourth quarter 1993 to the
comparable period in 1992. FANB's average earning assets added $197 million,
or 3%, to FCC's consolidated average earning assets. A more favorable earning
asset mix began to develop in the second half of 1993, with a shift from money
market investments to higher-yielding loans. Average loans were 43% of earning
assets in 1993's fourth quarter, versus 40% in 1992's fourth quarter. The net
interest margin was 4.24%, and the net interest spread was 3.64% for the
current quarter. In the fourth quarter of 1992, the net interest margin was
4.64%, and the net interest spread was 4.05%. The net interest margin and
spread declines were primarily due to lower yields on securities and loans.
The provision for loan losses was a negative $600,000 in the fourth
quarter, compared to $1.78 million in 1992's fourth quarter. Fewer
nonperforming assets, net charge-offs and watch list loans resulted in the
lower provision. Nonperforming assets declined $5.40 million during the
quarter. Net charge-offs were $1.39 million in the fourth quarter, or .22% of
average loans, compared to .74% in the same quarter of 1992.
Other income remained stable at $25.25 million in the fourth quarter when
compared to 1992's fourth quarter. Fees and service charges rose 6% mainly due
to the additional FANB deposit accounts. Other income also increased due to
higher credit card income and trust fee income. Included in other income in
the fourth quarter of 1993 were losses on securities transactions of $926,000.
Operating expense was $59.37 million for the fourth quarter, 8% higher
than 1992's fourth quarter. Personnel expense increased 16%, or $4.43 million,
primarily due to additional employees related to increased business volumes,
plus awards for above-plan performance. FANB's personnel expense was $1.56
million for the quarter, a factor in the overall increase in FCC's personnel
expense. Nonperforming assets expense decreased 128% due to lower provisions
for losses on other real estate.
Selected Quarterly Data compares certain quarterly financial information
for 1993 and 1992.
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA (dollars in thousands except per share data)
Years Ended December 31
===================================================================================================================
1993 1992 1991 1990
(Restated)<FN1>
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AVERAGE BALANCE SHEET DATA
Total assets $ 6,335,669 $ 5,741,399 $ 4,671,478 $ 4,482,019
Earning assets 5,812,761 5,280,347 4,257,388 4,035,104
Loans and leases <FN3> 2,407,231 2,184,584 2,323,018 2,402,541
Securities 3,110,544 2,734,925 1,515,299 1,290,487
Deposits 5,176,873 4,953,572 3,931,612 3,552,578
Long-term debt 95,238 97,154 101,246 103,033
Stockholders' equity 469,694 355,716 235,385 239,011
- -------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT DATA
Total interest income $ 393,334 $ 398,701 $ 393,922 $ 408,996
Net interest income 250,010 235,353 191,862 168,021
Net interest income (FTE) 256,049 241,873 199,574 176,447
Provision for loan losses (4,504) 22,040 43,734 47,425
Other income (exclusive of securities transactions) 102,844 96,369 83,419 73,213
Securities transactions (423) 258 259 55
Operating expense 221,080 203,781 185,963 165,325
Net income 95,214 72,475 34,029 22,038
- -------------------------------------------------------------------------------------------------------------------
KEY RATIOS
Return on average assets 1.50 % 1.26 % .73 % .49 %
Return on average total equity 20.27 % 20.37 % 14.46 % 9.22 %
Return on average common equity 22.18 % 22.85 % 14.46 % 9.11 %
Net interest margin 4.40 % 4.58 % 4.69 % 4.37 %
Overhead ratio 2.03 % 2.03 % 2.41 % 2.28 %
Allowance for loan losses to loans and leases <FN3> 2.55 % 3.44 % 3.11 % 2.44 %
Nonperforming assets to loans and leases <FN3>
plus foreclosed assets 1.22 % 2.82 % 3.91 % 4.26 %
Allowance for loan losses to nonperforming loans 268.26 % 178.56 % 123.83 % 84.10 %
Stockholders' equity to assets 7.65 % 6.79 % 5.01 % 5.03 %
Leverage ratio 7.63 % 6.76 % 4.87 % 4.66 %
- -------------------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA <FN2>
EARNINGS PER SHARE
Net income-primary $ 3.48 $ 2.88 $ 1.56 $ .94
Operating income-primary $ 3.50 $ 2.87 $ 1.55 $ .94
Net income-fully diluted $ 3.18 $ 2.70 $ 1.56 $ .94
Operating income-fully diluted $ 3.20 $ 2.69 $ 1.55 $ .94
COMMON DIVIDENDS
Cash dividends $ .85 $ .70 $ .64 $ .64
Dividend payout ratio 24.27 % 25.78 % 41.03 % 68.09 %
BOOK VALUES (End of period)
Book value $ 17.28 $ 14.57 $ 11.38 $ 10.45
Tangible book value $ 16.66 $ 13.83 $ 10.57 $ 9.50
COMMON STOCK DATA
High stock price $ 32.20 $ 27.86 $ 18.14 $ 12.54
Low stock price $ 23.90 $ 16.94 $ 7.20 $ 6.66
Closing stock price $ 25.13 $ 25.60 $ 17.20 $ 7.46
Trading volume 19,562,420 26,741,915 10,667,309 5,968,360
Number of stockholders 7,604 6,714 6,970 7,216
AVERAGE COMMON SHARES OUTSTANDING (in thousands) <FN2>
Primary 26,132 23,729 21,809 21,539
Fully diluted 32,125 29,568 21,809 21,539
NUMBER OF EMPLOYEES 3,400 3,026 2,695 2,551
===================================================================================================================
<FN1> First Commerce Corporation's financial information for 1993 has been restated to include First Acadiana
National Bancshares, Inc.
<FN2> On December 30, 1993, First Commerce Corporation paid a stock split effected in the form of a 25% stock
dividend. Share and per share data have been adjusted to reflect this stock split.
<FN3> Net of unearned income.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA (dollars in thousands except per share data)
Years Ended December 31
=================================================================================================================
1989 1988 1987 1986
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AVERAGE BALANCE SHEET DATA
Total assets $ 4,202,912 $ 3,857,968 $ 3,511,491 $ 3,583,941
Earning assets 3,719,972 3,418,204 3,098,456 3,149,532
Loans and leases <FN3> 2,232,213 2,005,940 1,802,858 1,829,660
Securities 1,061,206 1,008,022 849,335 834,454
Deposits 3,343,223 3,052,002 2,722,593 2,752,672
Long-term debt 104,863 105,498 102,402 106,567
Stockholders' equity 231,097 220,254 215,459 222,656
- -----------------------------------------------------------------------------------------------------------------
INCOME STATEMENT DATA
Total interest income $ 392,769 $ 331,866 $ 286,020 $ 304,037
Net interest income 156,005 142,550 130,188 126,277
Net interest income (FTE) 164,495 151,294 142,090 144,100
Provision for loan losses 26,220 24,651 22,674 38,365
Other income (exclusive of securities transactions) 64,215 59,765 52,839 49,654
Securities transactions (866) (857) 1,386 609
Operating expense 155,397 145,506 137,388 145,347
Net income 28,197 24,056 19,732 4,089
- -----------------------------------------------------------------------------------------------------------------
KEY RATIOS
Return on average assets .67 % .62 % .56 % .11 %
Return on average total equity 12.20 % 10.92 % 9.16 % 1.84 %
Return on average common equity 12.37 % 10.94 % 8.94 % .57 %
Net interest margin 4.42 % 4.43 % 4.59 % 4.58 %
Overhead ratio 2.45 % 2.51 % 2.73 % 3.04 %
Allowance for loan losses to loans and leases <FN3> 1.91 % 2.07 % 2.12 % 2.10 %
Nonperforming assets to loans and leases <FN3>
plus foreclosed assets 2.76 % 3.50 % 4.06 % 4.83 %
Allowance for loan losses to nonperforming loans 142.45 % 80.98 % 63.23 % 48.27 %
Stockholders' equity to assets 5.15 % 5.35 % 5.73 % 5.84 %
Leverage ratio 5.06 % 5.11 % 5.37 % 5.25 %
- -----------------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA <FN2>
EARNINGS PER SHARE
Net income-primary $ 1.20 $ 1.02 $ .81 $ .06
Operating income-primary $ 1.23 $ 1.05 $ .77 $ .03
Net income-fully diluted $ 1.20 $ 1.02 $ .81 $ .06
Operating income-fully diluted $ 1.23 $ 1.05 $ .77 $ .03
COMMON DIVIDENDS
Cash dividends $ .64 $ .64 $ .64 $ .64
Dividend payout ratio 53.33 % 62.75 % 79.01 % 1,280.00 %
BOOK VALUES (End of period)
Book value $ 10.14 $ 9.54 $ 9.16 $ 9.02
Tangible book value $ 9.01 $ 8.41 $ 7.76 $ 7.34
COMMON STOCK DATA
High stock price $ 12.74 $ 10.54 $ 10.80 $ 13.60
Low stock price $ 9.27 $ 7.86 $ 7.40 $ 7.40
Closing stock price $ 12.40 $ 9.74 $ 8.00 $ 7.86
Trading volume 3,651,604 4,173,330 4,674,623 8,045,740
Number of stockholders 7,267 7,281 7,508 7,214
AVERAGE COMMON SHARES OUTSTANDING (in thousands) <FN2>
Primary 21,314 21,101 21,056 21,014
Fully diluted 21,314 21,101 21,056 21,014
NUMBER OF EMPLOYEES 2,553 2,341 2,314 2,358
=================================================================================================================
<FN1> First Commerce Corporation's financial information for 1993 has been restated to include First
Acadiana National Bancshares, Inc.
<FN2> On December 30, 1993, First Commerce Corporation paid a stock split effected in the form of a 25%
stock dividend. Share and per share data have been adjusted to reflect this stock split.
<FN3> Net of unearned income.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA (dollars in thousands except per share data)
Growth Rates
Years Ended December 31 ----------------------
============================================================================================ Five-Year Ten-Year
1985 1984 1983 Compound Compound
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AVERAGE BALANCE SHEET DATA
Total assets $ 2,887,281 $ 2,440,978 $ 2,471,516 10.43 % 9.87 %
Earning assets 2,509,433 2,087,143 2,125,410 11.20 % 10.58 %
Loans and leases <FN3> 1,449,411 1,058,611 920,344 3.71 % 10.09 %
Securities 674,358 606,137 731,127 25.28 % 15.58 %
Deposits 2,178,832 1,783,166 1,806,958 11.15 % 11.10 %
Long-term debt 58,741 22,199 19,444 (2.03)% 17.22 %
Stockholders' equity 204,919 180,603 165,953 16.35 % 10.96 %
- ---------------------------------------------------------------------------------------------------------------------------
INCOME STATEMENT DATA
Total interest income $ 273,863 $ 251,344 $ 236,973 3.46 % 5.20 %
Net interest income 112,647 97,792 95,242 11.89 % 10.13 %
Net interest income (FTE) 131,080 115,694 112,592 11.10 % 8.56 %
Provision for loan losses 16,699 9,244 8,087 N/A N/A
Other income (exclusive of securities transactions) 40,917 33,619 30,336 11.47 % 12.99 %
Securities transactions 1,287 (4,032) (2,654) N/A N/A
Operating expense 115,383 90,000 97,956 8.73 % 8.48 %
Net income 22,872 26,214 18,465 31.67 % 17.82 %
- ---------------------------------------------------------------------------------------------------------------------------
KEY RATIOS
Return on average assets .78 % 1.06 % .75 %
Return on average total equity 11.16 % 14.27 % 11.13 %
Return on average common equity 11.07 % 14.27 % 11.13 %
Net interest margin 5.22 % 5.54 % 5.30 %
Overhead ratio 2.97 % 2.70 % 3.18 %
Allowance for loan losses to loans and leases <FN3> 1.99 % 1.66 % 2.00 %
Nonperforming assets to loans and leases <FN3>
plus foreclosed assets 3.87 % 1.36 % 1.58 %
Allowance for loan losses to nonperforming loans 127.85 % 55.66 % 132.07 %
Stockholders' equity to assets 5.94 % 7.47 % 6.88 %
Leverage Ratio 6.22 % 7.95 % 7.17 %
- ---------------------------------------------------------------------------------------------------------------------------
SELECTED PER SHARE DATA <FN2>
EARNINGS PER SHARE
Net income-primary $ 1.03 $ 1.26 $ .94 27.82 % 13.98 %
Operating income-primary $ .99 $ 1.37 $ 1.02 27.23 % 13.12 %
Net income-fully diluted $ 1.03 $ 1.24 $ .91 25.54 % 13.33 %
Operating income-fully diluted $ .99 $ 1.34 $ .98 24.97 % 12.56 %
COMMON DIVIDENDS
Cash dividends $ .64 $ .58 $ .43 5.84 % 7.05 %
Dividend payout ratio 62.14 % 46.45 % 47.47 %
BOOK VALUES (End of period)
Book value $ 9.63 $ 9.26 $ 8.58
Tangible book value $ 8.99 $ 9.26 $ 8.58
COMMON STOCK DATA
High stock price $ 15.60 $ 14.26 $ 14.00
Low stock price $ 11.06 $ 10.87 $ 9.90
Closing stock price $ 11.74 $ 12.26 $ 12.80
Trading volume 4,676,329 2,413,604 2,712,348
Number of stockholders 7,443 7,626 7,379
AVERAGE COMMON SHARES OUTSTANDING (in thousands) <FN2>
Primary 20,991 20,704 19,570
Fully diluted 20,991 21,075 20,603
NUMBER OF EMPLOYEES 2,692 1,867 1,860
===========================================================================================================================
<FN1> First Commerce Corporation's financial information for 1993 has been restated to include First
Acadiana National Bancshares, Inc.
<FN2> On December 30, 1993, First Commerce Corporation paid a stock split effected in the form of a 25%
stock dividend. Share and per share data have been adjusted to reflect this stock split.
<FN3> Net of unearned income.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SELECTED QUARTERLY DATA (dollars in thousands except per share data)
1993 Quarters
==============================================================================================
(Restated)
-----------------------------------------------------
4th 3rd 2nd 1st
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net interest income $ 61,882 $ 62,102 $ 62,934 $ 63,092
Provision for loan losses (600) (2,233) (2,259) 588
Other income 25,245 25,316 27,070 24,790
Operating expense 59,370 54,589 54,585 52,536
Income tax expense 5,528 11,192 12,290 11,631
- ----------------------------------------------------------------------------------------------
Net income 22,829 23,870 25,388 23,127
Preferred dividend requirements 1,087 1,087 1,087 1,087
- ----------------------------------------------------------------------------------------------
Income applicable to common shares $ 21,742 $ 22,783 $ 24,301 $ 22,040
==============================================================================================
(Restated)
-----------------------------------------------------
Per common share data <FN1>
Primary $ .83 $ .87 $ .93 $ .85
Fully diluted $ .76 $ .80 $ .84 $ .78
Dividends $ .25 $ .20 $ .20 $ .20
Common stock data <FN1><FN2>
High stock price $ 31.80 $ 31.80 $ 32.20 $ 31.00
Low stock price $ 23.90 $ 28.40 $ 25.40 $ 25.33
Closing stock price $ 25.13 $ 30.00 $ 29.60 $ 30.00
Trading volume 8,516,265 2,935,716 4,424,135 3,686,304
==============================================================================================
1992 Quarters
==============================================================================================
4th 3rd 2nd 1st
- ----------------------------------------------------------------------------------------------
Net interest income $ 61,601 $ 59,121 $ 57,901 $ 56,730
Provision for loan losses 1,780 5,750 6,630 7,880
Other income 25,175 23,887 23,784 23,781
Operating expense 55,147 49,878 49,199 49,557
Income tax expense 9,567 8,343 7,879 6,977
Earnings of minority interest - 327 302 289
- ----------------------------------------------------------------------------------------------
Net income 20,282 18,710 17,675 15,808
Preferred dividend requirements 1,089 1,086 1,088 813
- ----------------------------------------------------------------------------------------------
Income applicable to common shares $ 19,193 $ 17,624 $ 16,587 $ 14,995
==============================================================================================
Per common share data <FN1>
Primary $ .78 $ .71 $ .73 $ .66
Fully diluted $ .73 $ .66 $ .67 $ .64
Dividends $ .20 $ .17 $ .17 $ .16
Common stock data <FN1><FN2>
High stock price $ 26.40 $ 27.86 $ 27.06 $ 21.60
Low stock price $ 22.66 $ 24.00 $ 20.94 $ 16.94
Closing stock price $ 25.60 $ 25.74 $ 25.34 $ 21.46
Trading volume 4,983,775 5,576,943 9,394,271 6,786,926
==============================================================================================
<FN1> On December 30, 1993, First Commerce Corporation paid a stock split effected in the
form of a 25% stock dividend. Share and per share data have been adjusted to reflect
this stock split.
<FN2> Common and preferred stocks are traded in the over-the-counter market and are listed
on the NASDAQ National Market System. All closing stock prices represent closing sales
prices as reported on the NASDAQ National Market System.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS (dollars in thousands)
December 31
=================================================================================================================
1993 1992
(Restated)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and due from banks $ 387,548 $ 355,491
Interest-bearing deposits in other banks 55,422 383,258
Securities held for investment (market value $1,547,086,
and $2,515,866, respectively) 1,523,638 2,492,395
Securities held for sale, at lower of aggregate amortized cost or market 1,779,927 463,357
Trading account securities 482 2,376
Federal funds sold and securities purchased under resale agreements 28,600 15,326
Loans and leases, net of unearned income of $11,822
and $16,391, respectively 2,674,697 2,239,479
Allowance for loan losses (68,302) (76,973)
- -----------------------------------------------------------------------------------------------------------------
Net loans and leases 2,606,395 2,162,506
=================================================================================================================
Premises and equipment 102,230 91,474
Accrued interest receivable 55,197 54,913
Other real estate 7,177 20,672
Goodwill and other intangibles 16,143 18,024
Other assets 97,526 64,230
- -----------------------------------------------------------------------------------------------------------------
Total assets $ 6,660,285 $ 6,124,022
=================================================================================================================
LIABILITIES
Domestic deposits
Noninterest-bearing deposits $ 1,196,259 $ 1,083,011
Interest-bearing deposits 4,107,813 3,981,746
Foreign branch interest-bearing deposits 5,787 14,119
- -----------------------------------------------------------------------------------------------------------------
Total deposits 5,309,859 5,078,876
=================================================================================================================
Short-term borrowings 678,316 479,637
Accrued interest payable 16,844 14,989
Accounts payable and other accrued liabilities 55,890 39,122
Long-term debt 89,704 95,674
- -----------------------------------------------------------------------------------------------------------------
Total liabilities 6,150,613 5,708,298
=================================================================================================================
STOCKHOLDERS' EQUITY<FN1>
Preferred stock, 5,000,000 shares authorized
Series 1992, 7.25% cumulative convertible, $25 stated value
Issued--2,399,170 and 2,399,640 shares, respectively 59,979 59,991
Common stock, $5 par value
Authorized--100,000,000 and 30,000,000 shares, respectively
Issued--26,062,067 and 19,551,398 shares, respectively 130,311 97,758
Capital surplus 135,911 126,358
Retained earnings 184,288 132,223
Unearned restricted stock compensation (817) (606)
- -----------------------------------------------------------------------------------------------------------------
Total stockholders' equity 509,672 415,724
=================================================================================================================
Total liabilities and stockholders' equity $ 6,660,285 $ 6,124,022
=================================================================================================================
The accompanying Notes to Consolidated Financial Statements are an integral
part of these Consolidated Balance Sheets.
<FN1> On December 30, 1993, First Commerce Corporation paid a stock split
effected in the form of a 25% stock dividend. Share data and stockholders'
equity as of December 31, 1993 have been adjusted to reflect this stock
split.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF INCOME (dollars in thousands except per share data)
Years Ended December 31
==================================================================================================
1993 1992 1991
(Restated)
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans and leases $ 214,670 $ 212,294 $ 247,018
Interest on tax-exempt securities 9,067 10,066 11,263
Interest and dividends on other taxable securities 159,533 159,776 107,299
Interest on money market investments 10,064 16,565 28,342
- --------------------------------------------------------------------------------------------------
Total interest income 393,334 398,701 393,922
==================================================================================================
INTEREST EXPENSE
Interest on deposits 116,549 143,598 171,127
Interest on short-term borrowings 15,047 7,897 18,673
Interest on long-term debt 11,728 11,853 12,260
- --------------------------------------------------------------------------------------------------
Total interest expense 143,324 163,348 202,060
==================================================================================================
NET INTEREST INCOME 250,010 235,353 191,862
PROVISION FOR LOAN LOSSES (4,504) 22,040 43,734
- --------------------------------------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 254,514 213,313 148,128
==================================================================================================
OTHER INCOME
Deposit fees and service charges 43,492 40,528 34,473
Credit card income 22,380 21,529 22,340
Trust fee income 11,371 9,439 8,413
Broker/dealer revenue 8,775 7,225 4,800
Other operating revenue 16,826 17,648 13,393
Securities transactions (423) 258 259
- --------------------------------------------------------------------------------------------------
Total other income 102,421 96,627 83,678
==================================================================================================
356,935 309,940 231,806
OPERATING EXPENSE
Salary expense 97,651 85,065 71,818
Employee benefits 21,736 17,046 15,739
- --------------------------------------------------------------------------------------------------
Total personnel expense 119,387 102,111 87,557
Net occupancy expense 15,673 14,775 13,503
Equipment expense 12,867 12,406 10,853
FDIC insurance expense 11,706 10,384 7,923
Other operating expense 61,447 64,105 66,127
- --------------------------------------------------------------------------------------------------
Total operating expense 221,080 203,781 185,963
==================================================================================================
INCOME BEFORE INCOME TAX EXPENSE
AND MINORITY INTEREST 135,855 106,159 45,843
INCOME TAX EXPENSE 40,641 32,766 10,936
==================================================================================================
INCOME BEFORE MINORITY INTEREST 95,214 73,393 34,907
EARNINGS OF MINORITY INTEREST - 918 878
==================================================================================================
NET INCOME 95,214 72,475 34,029
PREFERRED DIVIDEND REQUIREMENTS 4,348 4,076 -
==================================================================================================
INCOME APPLICABLE TO COMMON SHARES $ 90,866 $ 68,399 $ 34,029
==================================================================================================
EARNINGS PER SHARE <FN1>
Primary $ 3.48 $ 2.88 $ 1.56
Fully diluted $ 3.18 $ 2.70 $ 1.56
WEIGHTED AVERAGE SHARES OUTSTANDING <FN1>
Primary 26,132,211 23,728,540 21,808,941
Fully diluted 32,125,003 29,568,365 21,808,941
==================================================================================================
The accompanying Notes to Consolidated Financial Statements are an integral
part of these Consolidated Financial Statements.
<FN1> On December 30, 1993, First Commerce Corporation paid a stock split
effected in the form of a 25% stock dividend. Share and per share data have
been adjusted to reflect this stock split.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (dollars in thousands except per share data)
Unearned
Preferred Restricted
Stock Common Capital Retained Stock
Series 1992 Stock Surplus Earnings Compensation Total
===============================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1990 $ - $ 57,528 $ 74,670 $ 92,664 $ - $224,862
Net income - - - 34,029 - 34,029
Cash dividends:
Common stock ($.64 per share)<FN1> - - - (13,986) - (13,986)
Common stock issuances:
Tax-Deferred Savings Plan - 36,613 shares - 183 792 - - 975
Dividend and Interest Reinvestment and
Stock Purchase Plan - 37,713 shares - 188 695 (22) - 861
Stock options exercised, net of shares surrendered
in payment - 141,409 shares - 707 1,763 - - 2,470
Restricted stock issued - 53,307 shares - 267 993 - (1,260) -
Amortization of unearned restricted stock compensation - - - - 1,196 1,196
Change in estimated restricted stock value - - 1,082 - (1,082) -
- -------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1991 - 58,873 79,995 112,685 (1,146) 250,407
===============================================================================================================================
Net income - - - 72,475 - 72,475
Cash dividends:
Series 1992 preferred stock ($1.6986 per share) - - - (4,076) - (4,076)
Common stock ($.70 per share)<FN1> - - - (16,251) - (16,251)
Stock split effected in the form of a 50% dividend - 32,568 - (32,610) - (42)
Series 1992 preferred stock issued in public
offering - 2,400,000 shares 60,000 - (2,403) - - 57,597
Conversion of 360 shares of preferred stock
into 223 shares of common stock (9) 1 8 - - -
Common stock issuances:
Public offering - 1,000,000 shares - 5,000 40,852 - - 45,852
Tax-Deferred Savings Plan - 24,393 shares - 122 976 - - 1,098
Dividend and Interest Reinvestment and
Stock Purchase Plan - 38,036 shares - 190 1,285 - - 1,475
Stock options exercised, net of shares surrendered
in payment - 233,679 shares - 1,168 2,426 - - 3,594
Tax benefit of stock options - - 2,443 - - 2,443
Restricted stock issued- 3,000 shares - 15 134 - (149) -
Restricted stock retired- 35,950 shares - (179) (259) - 438 -
Amortization of unearned restricted stock compensation - - - - 1,152 1,152
Change in estimated restricted stock value - - 901 - (901) -
- -------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1992 59,991 97,758 126,358 132,223 (606) 415,724
===============================================================================================================================
Pooling of interests with FANB - 6,124 3,400 8,092 - 17,616
- -------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1992 (Restated) 59,991 103,882 129,758 140,315 (606) 433,340
Net income - - - 95,214 - 95,214
Cash dividends:
Series 1992 preferred stock ($1.8125 per share) - - - (4,348) - (4,348)
Common stock ($.85 per share)<FN1> - - - (20,985) - (20,985)
FANB common stock - - - (1,064) - (1,064)
Stock split effected in the form of a 25% dividend<FN1> - 24,780 - (24,844) - (64)
Conversion of 470 shares of preferred stock
into 437 shares of common stock (12) 2 10 - - -
Common stock issuances:
FANB convertible debt - 65,877 shares - 329 301 - - 630
Tax-Deferred Savings Plan- 92,009 shares - 460 2,741 - - 3,201
Dividend and Interest Reinvestment and
Stock Purchase Plan- 53,476 shares - 267 1,571 - - 1,838
Stock options exercised, net of shares surrendered
in payment and tax benefit- 98,565 shares - 493 942 - - 1,435
Restricted stock issued- 38,255 shares - 191 1,157 - (1,348) -
Restricted stock retired - 16,375 shares - (82) (330) - - (412)
Common stock retired - 2,280 shares - (11) (46) - - (57)
Amortization of unearned restricted stock compensation - - - - 944 944
Change in estimated restricted stock value - - (193) - 193 -
- -------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1993 $ 59,979 $130,311 $135,911 $ 184,288 $ (817) $509,672
===============================================================================================================================
The accompanying Notes to Consolidated Financial Statements are an integral
part of these Consolidated Financial Statements.
<FN1> On December 30, 1993, First Commerce Corporation paid a stock split
effected in the form of a 25% stock dividend. Per share data
has been adjusted to reflect this stock split.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands)
Years Ended December 31
========================================================================================================================
1993 1992 1991
(Restated)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net Income $ 95,214 $ 72,475 $ 34,029
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for loan losses (4,504) 22,040 43,734
Depreciation and amortization 11,145 9,963 9,360
Amortization of intangibles 2,829 2,445 2,677
Deferred income taxes (8,626) (2,416) (10,837)
(Gains) losses on securities transactions 423 (258) (259)
(Increase) decrease in trading account securities 1,894 (1,736) 3,119
(Increase) decrease in accrued interest receivable 1,898 (9,672) 4,992
(Increase) in other assets (22,914) (16,536) (7,031)
Increase (decrease) in accrued interest payable 1,002 (6,611) (2,946)
Increase in accounts payable and other accrued liabilities 15,775 3,435 13,503
Other, net 875 11,350 13,042
- ------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 95,011 84,479 103,383
========================================================================================================================
INVESTING ACTIVITIES
Net (increase) decrease in interest-bearing deposits in other banks 328,264 (84,449) (58,853)
Proceeds from sales and calls of securities 469,616 229,872 12,435
Proceeds from maturities of securities 1,029,403 1,048,500 532,997
Purchases of securities (1,743,533) (2,410,087) (1,049,717)
Net (increase) decrease in federal funds sold and securities
purchased under resale agreements (7,774) 74,674 (39,938)
Net (increase) decrease in loans (352,158) 21,809 27,526
Purchase of minority interest - (8,288) -
Proceeds provided (used) by acquisition of Pelican deposits
and selected marketable assets:
Purchases of assets, net of cash acquired - (213,780) -
Proceeds from sale of selected acquired assets - 204,222 -
Assumption of deposits and other liabilities - 1,416,415 -
Repayment of deposits in branches not reopened - (275,434) -
Purchases of premises and equipment (19,278) (14,808) (11,743)
Proceeds from sales of foreclosed assets 15,920 18,265 24,187
Other, net 1,818 564 (378)
- ------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES (277,722) 7,475 (563,484)
========================================================================================================================
FINANCING ACTIVITIES
Net increase in demand deposits, NOW accounts,
money market accounts and savings accounts 108,767 225,661 556,914
Net increase (decrease) in domestic and foreign time deposits (75,784) (636,219) 91,057
Net increase (decrease) in short-term borrowings 198,679 248,029 (154,850)
Payments on long-term debt (5,970) (4,399) (1,888)
Proceeds from common stock issued in public offering - 45,852 -
Proceeds from sales of common stock 5,385 6,167 4,306
Proceeds from Series 1992 preferred stock sold in public offering - 57,597 -
Cash dividends (24,995) (17,872) (13,986)
- ------------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED (USED) BY FINANCING ACTIVITIES 206,082 (75,184) 481,553
========================================================================================================================
INCREASE IN CASH AND CASH EQUIVALENTS 23,371 16,770 21,452
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 364,177 338,721 317,269
========================================================================================================================
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 387,548 $ 355,491 $ 338,721
========================================================================================================================
The accompanying Notes to Consolidated Financial Statements are an integral part of these Consolidated Financial Statements.
</TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1
Summary of Significant Accounting Policies
The accounting and reporting policies of First Commerce Corporation (FCC)
and its subsidiaries conform with generally accepted accounting principles and
with general practices within the financial services industry. The principles
and policies followed by FCC and its subsidiaries and the methods of applying
those principles and policies which materially affect the determination of the
consolidated financial position, results of operations or cash flows are
summarized below and in the following notes.
BASIS OF CONSOLIDATION
The consolidated financial statements include the accounts of FCC and all
of its subsidiaries, of which the banking subsidiaries are collectively "the
Banks". All significant intercompany accounts and transactions have been
eliminated.
BASIS OF PRESENTATION
Certain prior years' amounts have been reclassified to conform with
current year financial statement presentation.
SECURITIES HELD FOR INVESTMENT
Securities which FCC has the intent and ability to hold for the long-term
or until maturity are classified as held for investment. These securities are
stated at cost, adjusted for amortization of premiums and accretion of
discounts using either the interest method or the straight-line method, which
produces approximately the same results. Realized gains or losses are
recognized at the time of sale or call of a security and are shown as a
separate component of other income in the consolidated statements of income.
SECURITIES HELD FOR SALE
Securities which may be sold in response to changes in interest rates,
liquidity needs or asset/liability management strategies are classified as held
for sale. These securities are stated at the lower of aggregate cost or
market. Adjustments to market and realized gains or losses are shown as a
separate component of other income in the consolidated statements of income.
MONEY MARKET INVESTMENTS
Money market investments include interest-bearing deposits in other banks,
federal funds sold, securities purchased under resale agreements and trading
account securities. They are stated at cost, which approximates market value,
with the exception of trading account securities, which are carried at market
value. Adjustments to market value and trading account gains and losses are
included in other operating revenue in the consolidated statements of income.
Interest and dividend income on trading account securities is included in
interest income on money market investments.
LOANS AND LEASES
Interest income on most loans is accrued based on the principal amounts
outstanding. Unearned income on loans made on a discounted basis is recognized
as interest income using either the rule of 78s (sum-of-the-month's digits) or
the interest method, which result in approximately level rates of return over
the terms of the loans.
Loan origination fees and costs are deferred and amortized as an
adjustment of the yield according to the interest method for commercial loans
and the straight-line method for consumer and residential mortgage loans. The
amortization period for commercial and consumer loans is the actual life of the
loans; for residential mortgage loans the amortization period is the average
life of the loan. Loan origination costs on credit card loans are not deferred
due to the immaterial effect on FCC's financial statements. Annual credit card
fees are recognized on a straight-line basis over the twelve-month period that
cardholders may use the card.
NONPERFORMING LOANS
Nonperforming loans and leases consist of nonaccrual loans and
restructured loans. Loans and leases past due 90 days or more are considered
to be performing loans and leases until placed on nonaccrual status. Loans and
leases are placed on nonaccrual status when, in the opinion of management,
there is sufficient uncertainty as to timely collection of interest or
principal so as to preclude the recognition in reported earnings of some or all
of the contractual interest. When a loan is placed on nonaccrual status,
interest accrued but not collected is usually reversed against interest income.
Generally, any payments received on nonaccrual loans and leases are first
applied to reduce outstanding principal amounts. Loans are not reclassified as
accruing until interest and principal payments are brought current and future
payments are reasonably assured. Delinquent credit card loans are charged-off
within 180 days. Student loans, which are 100% government guaranteed, are not
placed on nonaccrual status.
ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses represents management's best estimate of
potential losses in the loan and lease portfolios. This estimate is based on
an ongoing assessment of the portfolios. Factors which are considered include
significant changes in the character of the portfolios, loan concentrations,
current year charge-offs, historical ratios of charge-offs to average loans and
leases, trends in portfolio volumes, delinquencies, nonaccruals and economic
conditions. Ultimate losses may vary from the current estimates. These
estimates are reviewed periodically and, as adjustments become necessary, they
are reported in earnings in the periods in which they become known.
<PAGE>
FORECLOSED ASSETS
Property transferred to foreclosed assets is recorded at fair value at the
time of transfer. Fair value is the anticipated sales price of the assets,
based upon independent appraisals and other relevant factors. When a loan is
reclassified as a foreclosed asset, the reduction of the carrying value to the
fair value is charged to the allowance for loan losses. Subsequent to
foreclosure, foreclosed assets are reflected at the lower of current fair value
or the fair value at the date of transfer to foreclosed assets. Any subsequent
reductions are charged to nonperforming assets expense. Revenues and expenses
associated with operating or disposing of foreclosed assets are recorded during
the period in which they are incurred.
PREMISES AND EQUIPMENT
Premises and equipment are stated at cost less accumulated depreciation
and amortization. Depreciation is computed using various methods, principally
straight-line, over the estimated useful lives of each type of asset.
Leasehold improvements are amortized using the straight-line method over the
periods of the leases or the estimated useful lives, whichever is shorter.
Additions to premises and equipment and major replacements or improvements are
capitalized. Gains and losses on dispositions, maintenance, repairs and minor
replacements are reflected in current operations.
INCOME TAXES
FCC and its subsidiaries file a consolidated federal income tax return.
Income tax expense or benefit is based on income reported for financial
accounting purposes. Effective January 1, 1993, FCC changed its method of
accounting for income taxes from the deferred method to the asset and liability
method required by Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes". Under the asset and liability method, deferred
assets and liabilities are established for the temporary differences between
the financial reporting basis and the tax basis of FCC's assets and liabilities
at enacted tax rates expected to be in effect when such amounts are realized or
settled.
Prior to 1993, FCC accounted for income taxes using APB 11. Using this
standard, deferred taxes, which result from recognition of certain income and
expense items in one period for financial accounting purposes and another
period for income tax purposes, are a component of income tax expense.
FOREIGN EXCHANGE CONTRACTS
Generally, sales or purchases of foreign exchange contracts are covered
with offsetting transactions. FCC uses foreign exchange contracts as
commercial service products and does not intend to speculate with open
positions in the foreign exchange market. Unrealized gains or losses in the
foreign exchange portfolio are recognized upon the maturity of the contracts.
INTEREST RATE CONTRACTS
FCC enters into a variety of interest rate contracts such as caps, collars
and floors in the management of its interest rate exposure. These instruments
are typically entered into as hedges against interest rate risk on specific
assets and liabilities. The premium paid or received for any of these
instruments is amortized over the expected remaining term of the agreement.
Cash flows relative to these instruments are recorded as adjustments to
interest income or expense. Gains and losses on any contracts sold are
deferred and amortized over the expected remaining term of the hedged asset or
liability. If the asset or liability is disposed of, any unamortized gain or
loss on the hedging instrument is included in the determination of the gain or
loss from the disposition.
INTEREST RATE SWAP AGREEMENTS
FCC enters into interest rate swap agreements primarily as a means to
manage its interest rate exposure. Adjusted revenues or expenses related to
interest rate swaps are recognized over the lives of the agreements. Fees
related to swap agreements are amortized using the interest method over the
life of the swap. If an interest rate swap which qualifies for deferral
accounting is terminated, the gain or loss is deferred and amortized over the
remaining life of the specific asset or liability it was hedging. If the
instrument being hedged by a swap is disposed of, the swap agreement is marked
to market with any resulting gain or loss included in the determination of the
gain or loss from the disposition. Interest rate swap agreements not
qualifying for deferral accounting are recorded at market value. Any changes
in the market value are recognized in other income.
RETIREMENT PLAN
FCC and its subsidiaries have established a retirement plan covering
substantially all employees. Pension expense is charged to current operations
and consists of service costs and interest costs reduced by the expected return
on plan assets and amortization of initial unrecognized net assets. Current
policy is to pay into the trust fund only that portion of the accrued liability
which is currently tax deductible.
POSTRETIREMENT BENEFITS
FCC accrues the expected costs of postretirement benefits during the years
that an eligible employee renders service to the employer.
<PAGE>
INTANGIBLE ASSETS
Unamortized costs of purchased subsidiaries in excess of the fair value of
the acquired net tangible assets are included in goodwill and other intangibles
in the consolidated balance sheets. Also included in goodwill and other
intangibles are premiums paid on the purchase of loan portfolios and deposit
assumptions. Identifiable intangible assets, principally related to "depositor
and borrower relationships," are being amortized using the straight-line method
over the estimated periods benefited. The remaining costs (goodwill) are being
amortized on the straight-line method ranging from 5 to 20 years.
EARNINGS PER COMMON SHARE
Income for primary earnings per share is adjusted for preferred stock
dividends. Primary earnings per share are computed based on the weighted
average number of common shares outstanding and common stock equivalents
arising from the assumed exercise of outstanding stock options, unless their
effect would be antidilutive. Fully diluted earnings per share are computed
using average common shares and equivalents. Common stock equivalents are
increased by the assumed conversion of convertible debentures and preferred
stock into common stock as if converted at the beginning of the period, unless
their effect would be antidilutive. Income for fully diluted earnings per
share is adjusted for interest expense related to the debentures, net of the
related income tax effect, and preferred stock dividends.
STATEMENTS OF CASH FLOWS
For purposes of reporting cash flows, cash and cash equivalents include
cash on hand and noninterest-bearing amounts due from banks.
FAIR VALUE DISCLOSURE
Statement of Financial Accounting Standards No. 107 (SFAS No. 107),
"Disclosures about Fair Value of Financial Instruments," requires all entities
to disclose the estimated fair value of their financial assets and liabilities.
Approximately 97% of FCC's assets and liabilities are considered financial
instruments as defined in SFAS No. 107. Many of FCC's financial instruments,
however, lack a readily available trading market as characterized by a willing
buyer and willing seller engaging in an exchange transaction. Therefore,
significant estimations and present value calculations were used by FCC for the
purposes of this disclosure.
Estimated fair values have been determined by FCC using the best available
data, and an estimation methodology suitable for each category of financial
instruments. The estimation methodologies used as well as the estimated fair
values, and recorded book balances at December 31, 1993 and 1992 are included
in the appropriate footnote.
Fair value estimates are based on existing on and off-balance sheet
financial instruments without considering the value of future business and the
value of assets and liabilities that are not considered financial instruments.
Also, the tax ramifications related to unrealized gains and losses have not
been considered in any of the estimates.
Reasonable comparability between financial institutions may not be likely
due to the wide range of permitted valuation techniques and numerous estimates
which must be made given the absence of active secondary markets for many of
the financial instruments. This lack of uniform valuation methodologies also
introduces a greater degree of subjectivity to these estimated fair values.
OTHER
Assets held by the Banks in fiduciary capacities (assets under trust
agreements) are not assets of the Banks and are not included in the
consolidated balance sheets. Generally, certain minor sources of income are
recorded when payment is received. Results of these activities on the cash
basis do not differ materially from those that would be reported using the
accrual basis of accounting.
NOTE 2
Aquisitions
Effective January 1, 1994, First Acadiana National Bancshares, Inc. (FANB),
the parent company of First Acadiana National Bank, was acquired by FCC for
1,290,145 shares of common stock. First Acadiana National Bank was merged with
The First National Bank of Lafayette, a wholly owned subsidiary of FCC.
The acquisition was accounted for as a pooling-of-interests.
All 1993 financial information reported reflects the pooling-of-interests
with FANB. Financial information prior to 1993 was not restated, since the
effect would be immaterial Selected separate company and combined financial
information of FCC and FANB for the year ended December 31, 1993 are presented
below (in thousands, except for per share amounts).
<TABLE>
<CAPTION>
FCC FANB Combined
===============================================================
<S> <C> <C> <C>
Year Ended December 31, 1993
Net interest income $ 240,173 $ 9,837 $ 250,010
Provision for loan losses $ (5,304) $ 800 $ (4,504)
Other income $ 100,352 $ 2,069 $ 102,421
Operating expense $ 211,852 $ 9,228 $ 221,080
Net income $ 93,911 $ 1,303 $ 95,214
Earnings per common share
Primary $ 3.59 $ 4.22 $ 3.48
Fully diluted $ 3.27 $ 4.22 $ 3.18
===============================================================
</TABLE>
On January 13, 1992, FCC's banks in New Orleans, Baton Rouge, and Alexandria
acquired from the Resolution Trust Corporation approximately $1.5 billion of
insured deposits and other marketable securities of Pelican Homestead and
Savings Association ("Pelican"). $275 million of these deposits were
immediately paid out.
<PAGE>
NOTE 3
Restrictions on Cash and Due from Banks
The Banks are required to maintain average reserve balances with the
Federal Reserve bank based on a percentage of deposits. Average balances
maintaind for such purposes were $93,470,000 and $81,324,000 during 1993 and
1992, respectively.
For cash and due from banks and money market investments, the carrying
amount is a reasonable estimate of fair value. The book value of cash and due
from banks and money market investments was $472,052,000 as of December 31,
1993 and $756,451,000 at December 31, 1992.
<TABLE>
<CAPTION>
NOTE 4
Securities Held for Investment
An analysis of securities held for investment follows (in thousands):
Carrying Market
Value Value Gains (Losses)
=======================================================================================
December 31, 1993 (Restated)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S Treasury
securities $ 770,915 $ 776,601 $ 5,688 $ (2)
Obligations of U.S.
agencies and
corporations 674,108 679,204 6,300 (1,204)
Obligations of states
and political
subdivisions 63,731 76,376 12,645 -
Other bonds,
notes, debentures
and stock 14,884 14,905 33 (12)
- ---------------------------------------------------------------------------------------
Total securities held
for investment $ 1,523,638 $ 1,547,086 $ 24,666 $ (1,218)
=======================================================================================
December 31, 1992
- ---------------------------------------------------------------------------------------
U.S Treasury
securities $ 1,334,406 $ 1,352,866 $ 18,683 $ (223)
Obligations of U.S.
agencies and
corporations 1,053,050 1,046,905 2,781 (8,926)
Obligations of states
and political
subdivisions 68,119 79,858 11,778 (39)
Other bonds,
notes, debentures
and stock 36,820 36,237 3 (586)
- ---------------------------------------------------------------------------------------
Total securities held
for investment $ 2,492,395 $ 2,515,866 $ 33,245 $ (9,774)
=======================================================================================
December 31, 1991
- ---------------------------------------------------------------------------------------
U.S Treasury
securities $ 851,354 $ 881,546 $ 30,192 $ -
Obligations of U.S.
agencies and
corporations 825,217 843,643 18,467 (41)
Obligations of states
and political
subdivisions 125,944 140,717 14,880 (107)
Other bonds,
notes, debentures
and stock 24,051 22,140 81 (1,992)
- ---------------------------------------------------------------------------------------
Total securities held
for investment $ 1,826,566 $ 1,888,046 $ 63,620 $ (2,140)
=======================================================================================
</TABLE>
During 1993, proceeds from the calls of securities were $34,914,000,
resulting in gross realized gains of $102,000 and gross realized losses $48,000.
An analysis of the carrying and the market values of securities held for
investment by maturity periods follows (in thousands):
<TABLE>
<CAPTION>
Carrying Market
Value Value Gains (Losses)
=======================================================================================
December 31, 1993 (Restated)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Within one year $ 775,562 $ 780,886 $ 5,324 $ -
One to five years 73,327 75,369 2,065 (23)
Five to ten years 18,819 20,212 1,393 -
After ten years 655,930 670,619 15,884 (1,195)
- ---------------------------------------------------------------------------------------
Total securities held
for investment $ 1,523,638 $ 1,547,086 $ 24,666 $ (1,218)
=======================================================================================
</TABLE>
Maturities of mortgage-backed securities are classified by contractual
(stated) maturity dates. Expected maturities may differ from contractual
maturities because borrowers may have the right to call or prepay obligations
with or without penalties. During 1993, $103 million of mortgage-backed
securities were paid out prior to maturity.
Securities with carrying values of approximately $823,574,000,
$584,573,000, and $433,088,000 at December 31, 1993, 1992 and 1991,
respectively, were pledged to secure public and trust deposits, and for other
purposes as required by law.
Excluding securities issued by the U.S. government or by U.S. government
agencies or corporations, no securities of any issuer exceeded 10 percent of
consolidated stockholders' equity as of December 31, 1993 or 1992, when both
securities held for investment and held for sale were combined.
The fair value of securities held for investment is the market value.
The market value was determined from quoted prices or quoted prices of similar
securities of comparable risk and maturity where no quoted market price exists.
<PAGE>
<TABLE>
<CAPTION>
NOTE 5
Securities Held for Sale
An analysis of securities held for sale are as follows (in thousands):
Carrying Market
Value Value Gains (Losses)
============================================================================
December 31, 1993 (Restated)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S Treasury
securities $ 713,558 $ 718,560 $ 5,019 $ (17)
Obligations of U.S.
agencies and
corporations 1,005,358 1,000,761 1,852 (6,449)
Obligations of states
and political
subdivisions 41,011 43,985 3,024 (50)
Other bonds,
notes, debentures
and stock 20,000 20,000 - -
- ----------------------------------------------------------------------------
Total securities held
for sale $1,779,927 $1,783,306 $ 9,895 $ (6,516)
============================================================================
December 31, 1992
- ----------------------------------------------------------------------------
U.S Treasury
securities $ 131,458 $ 135,088 $ 4,415 $ (785)
Obligations of U.S.
agencies and
corporations 274,611 277,890 3,813 (534)
Obligations of states
and political
subdivisions 38,688 40,791 2,123 (20)
Other bonds,
notes, debentures
and stock 18,600 18,600 - -
- ----------------------------------------------------------------------------
Total securities held
for sale $ 463,357 $ 472,369 $ 10,351 $ (1,339)
============================================================================
</TABLE>
During 1993, proceeds from the sales and calls of securities held for sale
were $434,702,000, resulting in gross realized gains of $473,000 and gross
realized losses of $950,000.
An analysis of the carrying and market values of the securities held for
sale by contractual maturity periods follows (in thousands):
<TABLE>
<CAPTION>
Carrying Market
Value Value Gains (Losses)
============================================================================
December 31, 1993 (Restated)
- ----------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Within one year $ 5,917 $ 5,944 $ 27 $ -
One to five years 840,061 845,115 5,839 (785)
Five to ten years 311,453 309,501 177 (2,129)
After ten years 622,496 622,746 3,852 (3,602)
- ----------------------------------------------------------------------------
Total securities held
for sale $1,779,927 $1,783,306 $ 9,895 $ (6,516)
============================================================================
</TABLE>
Maturities of mortgage-backed securities are classified by contractual
(stated) maturity dates. Expected maturities may differ from contractual
maturities because borrowers may have the right to call or prepay obligations
with or without penalties. During 1993, $248 million of mortgage-backed
securities were paid out prior to maturity.
Excluding securities issued by the U.S. government or by U.S. government
agencies and corporations, no securities of any issuer exceeded 10 percent of
consolidated stockholders' equity as of December 31, 1993, when securities
both held for investment and held for sale were combined.
The fair value of securities held for sale is the market value. The
market value was determined from quoted prices or quoted prices of similar
securities of comparable risk and maturity where no quoted market price exists.
In May, 1993, the Financial Accounting Standards Board issued Statement
No. 115, "Accounting for Certain Investments in Debt and Equity Securities."
This standard addresses the accounting and reporting for investments in equity
securities that have readily determinable fair values and for all investments
in debt securities. Adoption of the new standard is required for fiscal years
beginning after December 15, 1993. FCC will adopt this statement effective
January 1, 1994. FCC's intention is to classify a substantial portion of its
investment portfolio in the Available for Sale category, which have the effect
of increasing stockholders' equity to the extent market value of the securities
exceeds book value on January 1, 1994, net of tax effects. As of December 31,
1993, such an adjustment would have resulted in a $13.65 million increase in
stockholders' equity.
<TABLE>
<CAPTION>
NOTE 6
Loans and Leases
The composition of loans and leases was as follows (in thousands):
December 31
===========================================================================
1993 1992
(Restated)
- ---------------------------------------------------------------------------
<S> <C> <C>
Domestic
Loans to individuals $1,184,726 $ 817,109
Commercial, financial and
agricultural 482,677 473,411
Real estate 521,283 479,371
Credit card loans 383,932 385,604
Other loans 106,465 95,463
- ---------------------------------------------------------------------------
Total domestic loans
and leases 2,679,083 2,250,958
International
In domestic offices 7,436 4,912
- ---------------------------------------------------------------------------
Total loans and leases 2,686,519 2,255,870
Unearned income (11,822) (16,391)
- ---------------------------------------------------------------------------
Loans and leases, net
of unearned income $2,674,697 $ 2,239,479
===========================================================================
The following tables provide a further classification of certain
categories of loans and leases as of December 31, 1993 (dollars in thousands):
===========================================================================
Loans to Individuals by Type as a
Percent of Total Loans and Leases
- ---------------------------------------------------------------------------
Residential (1-4 family) - first lien $ 448,054 16.68 %
Residential (1-4 family) - junior lien 73,308 2.73
Automobile 352,744 13.13
Education 146,516 5.45
Personal expenditures 110,474 4.11
Other 53,630 2.00
- ---------------------------------------------------------------------------
$1,184,726 44.10 %
===========================================================================
Commercial, Financial and Agricultural Loans by Industry
as a Percent of Total Loans and Leases
- ---------------------------------------------------------------------------
Services $ 128,026 4.77 %
Transportation 61,993 2.31
Wholesale trade 51,979 1.93
Financial 45,679 1.70
Manfacturing 43,925 1.64
Retail trade 40,030 1.49
Mining 28,486 1.06
Construction 27,317 1.02
Communications 18,859 .70
Other 36,383 1.35
- ---------------------------------------------------------------------------
$ 482,677 17.97 %
===========================================================================
===========================================================================
Real Estate Loans by Type as a Percent
of Total Loans and Leases
- ---------------------------------------------------------------------------
Commercial $ 466,228 17.35 %
Construction and land development 33,000 1.23
Multi-family 19,099 .71
Farmland 2,956 .11
- ---------------------------------------------------------------------------
$ 521,283 19.40 %
===========================================================================
</TABLE>
In the ordinary course of business, the Banks make loans to directors and
executive officers of FCC and its subsidiaries and to their associates. In the
opinion of management, related party loans are made on substantially the same
terms, including interest rates and collateral, as those prevailing at the
time for comparable transactions with unrelated parties and do not involve more
than normal risks of collectibility. The amount of such related party loans was
$47,736,000 and $77,548,000 at December 31, 1993 and 1992, respectively. An
analysis of 1993 activity with respect to these loans follows (in thousands):
<TABLE>
<CAPTION> 1993
===========================================================================
<S> <C>
Beginning balance $ 77,548
Additions 135,521
Repayments (140,211)
Decrease due to change in related parties (25,122)
- ---------------------------------------------------------------------------
Ending balance $ 47,736
===========================================================================
</TABLE>
The fair value of loans, except for credit card loans, was calculated by
discounting scheduled principal and interest payments to maturity using
estimates of December 31, 1993 and 1992 rates. For credit card loans, cash
flows and maturities were estimated based on historical experience and
discounted using an average yield adjusted for servicing costs and credit
losses.
The estimated fair value of the loan portfolio at December 31, 1993 was
$2,601,299,000 and the book value, net of the allowance for loan losses and
unearned income, was $2,606,395,000. The estimated fair value of the loan
portfolio at December 31, 1992 was $2,195,766,000 and the book value, net of
the allowance for loan losses and unearned income, was $2,162,506,000.
<PAGE>
<TABLE>
<CAPTION>
NOTE 7
Allowance for Loan Losses
A summary analysis of the transactions in the allowance for loan losses
follows (dollars in thousands):
Years Ended December 31
==================================================================================
1993 1992 1991
(Restated)
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Balance at beginning of year $ 79,919 $ 70,817 $ 57,807
Provision charged to expense (4,504) 22,040 43,734
Loans and leases charged to the allowance (16,233) (24,100) (39,027)
Recoveries on loans and leases previously
charged to the allowance 9,120 8,216 8,303
- ----------------------------------------------------------------------------------
Net charge-offs (7,113) (15,884) (30,724)
- ----------------------------------------------------------------------------------
Balance at end of year $ 68,302 $ 76,973 $ 70,817
==================================================================================
Net charge-offs as a percent of
average loans and leases<FN1> .30 % .73 % 1.32 %
Allowance for loan losses as a percent of
loans and leases<FN1> at end of year 2.55 % 3.44 % 3.11 %
==================================================================================
<FN1> Net of unearned income.
</TABLE>
<PAGE>
NOTE 8
Nonperforming Assets
Nonperforming assets include loans and leases on nonaccrual status, loans
and leases that have been restructured with borrowers as to interest rates or
repayment terms for credit reasons, real estate acquired through foreclosures,
loans classified as in-substance foreclosures, unused bank premises and other
foreclosed assets. Loans past due 90 days or more are considered to be
performing assets until placed on nonaccrual status. Nonperforming assets
included in the consolidated balance sheets were as follows (dollars in
thousands):
<TABLE>
<CAPTION>
December 31
=====================================================
1993 1992
(Restated)
- -----------------------------------------------------
<S> <C> <C>
Nonaccrual loans $25,461 $43,108
Foreclosed assets
Other real estate 12,667 29,258
Other foreclosed assets 96 93
Allowance for losses
on foreclosed assets (5,515) (8,611)
- -----------------------------------------------------
7,248 20,740
- -----------------------------------------------------
Total nonperforming
assets $32,709 $63,848
=====================================================
Loans past due 90 days
or more and not
on nonaccrual status $12,523 $13,499
=====================================================
Ratios at end of year
Nonperforming assets
as a percent of loans
and leases<FN1> plus
foreclosed assets 1.22 % 2.82 %
Allowance for loan losses
as a percent of non-
performing loans 268.26 % 178.56 %
Loans and leases past
due 90 days or more
and not on nonaccrual
status as a percent of
loans and leases<FN1> .47 % .60 %
=====================================================
<FN1>Net of unearned income.
</TABLE>
The loss of income associated with nonperforming loans and leases and the
cost of carrying foreclosed assets were (in thousands except per share amounts):
<TABLE>
<CAPTION>
Years Ended December 31
===============================================================================
1993 1992 1991
(Restated)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Effect on pretax income
Nonperforming loans
Contractual interest income $ 4,156 $ 5,599 $ 9,969
Interest reversed on new
nonaccrual loans 216 337 1,019
Income actually received and recorded
on loans on nonaccrual status
during the year (242) (62) (724)
- -------------------------------------------------------------------------------
Loss of interest income on loans 4,130 5,874 10,264
- -------------------------------------------------------------------------------
Foreclosed assets
Cost of operations 1,429 1,616 2,620
Interest cost (average purchased
funds rate) 477 783 1,704
Net (gains) losses on foreclosed assets (1,933) (1,736) 9,458
Provision for losses on foreclosed assets 1,656 6,449 1,444
- -------------------------------------------------------------------------------
Cost to carry foreclosed assets 1,629 7,112 15,226
- -------------------------------------------------------------------------------
Total effect on pretax income $ 5,759 $12,986 $ 25,490
===============================================================================
Cost per common share after tax $ .12 $ .36 $ .78
===============================================================================
Interest payments applied to principal $ 3,232 $ 4,864 $ 6,737
===============================================================================
</TABLE>
Additionally, interest of $3,321,000 was recovered on loans previously on
nonaccrual, but not on nonaccrual status in 1993.
The activity in the allowance for foreclosed assets was as follows (in
thousands):
<TABLE>
<CAPTION>
Year Ended December 31
===============================================================================
1993 1992
(Restated)
- -------------------------------------------------------------------------------
<S> <C> <C>
Balance at beginning
of year $ 8,611 $ 4,255
Allowance provisions 1,656 6,449
Sales and dispositions (4,752) (2,093)
- -------------------------------------------------------------------------------
Net change (3,096) 4,356
- -------------------------------------------------------------------------------
Balance at end of year $ 5,515 $ 8,611
===============================================================================
</TABLE>
In May 1993, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 114, "Accounting by Creditors for Impairment
of a Loan". This standard refines the measurement of certain impaired loans
based on the present value of expected future cash flows discounted at the
loan's effective interest rate. Adoption of this new standard is required for
fiscal years beginning after December 15, 1994. FCC will adopt this statement
beginning January 1, 1995. The effect of SFAS 114 on FCC's consolidated
financial statements has not yet been determined.
<PAGE>
<TABLE>
<CAPTION>
NOTE 9
Premises and Equipment
An analysis of premises and equipment by asset classification follows (in
thousands):
December 31
=========================================================
1993 1992
(Restated)
- ---------------------------------------------------------
<S> <C> <C>
Land $ 20,687 $ 18,276
Buildings 64,636 59,254
Leasehold Improvements 18,765 17,720
Furniture, fixtures and equipment 76,045 63,877
Capitalized leased equipment 390 390
Construction in progress 7,746 6,280
- ---------------------------------------------------------
188,269 165,797
Accumulated depreciation
and amortization (86,039) (74,323)
- ---------------------------------------------------------
$102,230 $ 91,474
=========================================================
</TABLE>
Provisions for depreciation and amortization charged to operating expense
were $11,146,000, $9,963,000 and $9,360,000 for 1993, 1992 and 1991,
respectively.
At December 31, 1993, the Banks and a service subsidiary were obligated
under a number of noncancelable leases for land and buildings used for
continuing operations and for equipment, primarily computer equipment, on a
short-term basis. Future minimum rental payments under operating leases having
an initial or remaining noncancelable lease term in excess of one year were as
follows (in thousands):
<TABLE>
<CAPTION>
Premises Equipment Total
=========================================================
<S> <C> <C> <C>
1994 $ 6,395 $ 97 $ 6,492
1995 6,237 61 6,298
1996 3,936 60 3,996
1997 2,188 7 2,195
1998 1,884 - 1,884
Later years 16,942 - 16,942
- ---------------------------------------------------------
$ 37,582 $ 225 $ 37,807
=========================================================
</TABLE>
Generally, operating leases contain renewal options on essentially the
same basis as current rental terms. Total rental expense, net of immaterial
sublease rentals, was $6,080,000, $5,858,000 and $5,544,000 for 1993, 1992 and
1991, respectively.
NOTE 10
Goodwill and Other Intangibles
Tangible and identifiable intangible assets and liabilities of
acquisitions accounted for as purchases were recorded at their fair values at
the dates of acquisition. The excess of purchase price over the fair value of
net tangible and identifiable intangible assets acquired was recorded as
goodwill. Also included in goodwill and other intangibles are premiums which
were paid on the purchase of loan portfolios and deposits from the Federal
Deposit Insurance Corporation and the Resolution Trust Corporation. Selected
information concerning intangibles follows (in thousands):
<TABLE>
<CAPTION>
December 31
================================================================================
1993 1992
(Restated)
- --------------------------------------------------------------------------------
<S> <C> <C>
Favorable leasehold interests $ 737 $ 771
Borrower relationships 415 735
Depositor relationships 3,724 4,535
Goodwill 11,267 11,983
- --------------------------------------------------------------------------------
Total $16,143 $18,024
================================================================================
</TABLE>
<TABLE>
<CAPTION>
Pretax Amortization
Years Ended December 31
================================================================================
1993 1992 1991
(Restated)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Favorable leasehold interests $ 34 $ 40 $ 45
Borrower relationships 389 581 859
Depositor relationships 1,386 961 902
Other identifiable intangibles - - 12
Goodwill 1,020 863 859
- --------------------------------------------------------------------------------
Total $ 2,829 $ 2,445 $ 2,677
================================================================================
</TABLE>
<TABLE>
<CAPTION>
NOTE 11
Deposits
The composition of deposits follows (in thousands):
December 31
==================================================================================
1993 1992
(Restated)
- ----------------------------------------------------------------------------------
<S> <C> <C>
Demand deposits $ 1,182,557 $ 1,060,575
NOW account deposits 911,268 834,746
Money market investment deposits 760,998 794,458
Savings deposits 615,239 562,233
Other consumer time deposits 1,440,049 1,500,939
- ----------------------------------------------------------------------------------
Total core deposits 4,910,111 4,752,951
Time deposits $100,000 and over 393,961 311,806
Foreign branch time deposits<FN1> 5,787 14,119
- ----------------------------------------------------------------------------------
Total $ 5,309,859 $ 5,078,876
==================================================================================
<FN1> Primarily deposits of $100,000 and over.
</TABLE>
<PAGE>
Deposits with stated maturities were valued using a present value of
contractual cash flows with a discount rate approximating current market rates
for deposits of similar remaining maturities. The estimated fair value of such
deposits at December 31, 1993 was $1,855,680,000 and the book value was
$1,839,797,000. The estimated fair value at December 31, 1992 was
$1,813,468,000 and the book value was $1,804,428,000.
SFAS No. 107 requires that deposits without stated maturities have a fair
value equal to book value. The book value of such deposits was $3,470,062,000
and $3,274,448,000 at December 31, 1993 and 1992, respectively. However, these
deposits do have an inherent value due to the nature of the relationships with
these long-term depositors, which are reflected by the premiums that purchasers
of deposits have been willing to pay to sellers historically.
<TABLE>
<CAPTION>
NOTE 12
Short-Term Borrowings
An analysis of short-term borrowings follows (in thousands):
December 31
=======================================================================
1993 1992 1991
(Restated)
- -----------------------------------------------------------------------
<S> <C> <C> <C>
Federal funds purchased
and securities sold under
agreements to repurchase $ 636,145 $ 467,433 $ 226,946
Commercial paper - 500 -
Other short-term
borrowings 42,171 11,704 4,662
- -----------------------------------------------------------------------
Total $ 678,316 $ 479,637 $ 231,608
=======================================================================
</TABLE>
<TABLE>
<CAPTION>
Information regarding federal funds purchased and securities sold
under agreements to repurchase follows (dollars in thousands):
=======================================================================
1993 1992 1991
(Restated)
- -----------------------------------------------------------------------
<S> <C> <C> <C>
Average interest rate
on December 31 2.66 % 2.51 % 3.67 %
- -----------------------------------------------------------------------
Year-to-date averages
Interest rate 2.85 % 2.93 % 5.33 %
Balance $ 516,058 $ 265,873 $ 340,877
- -----------------------------------------------------------------------
Maximum amount
outstanding at any
month-end during
the year $ 775,178 $ 467,433 $ 455,640
=======================================================================
</TABLE>
Federal funds purchased arise principally from transactions with other
banks, generally with 3 to 10 day maturities. Securities sold under
agreements to repurchase had maturities ranging from
3 to 20 days at December 31, 1993, and were investment transactions
with other national banks, public entities, corporate
customers and securities dealers. To the extent that the proceeds
of these transactions exceed funding requirements of the Banks,
the excess funds are sold in the money markets.
FCC had no commercial paper at December 31, 1993. FCC maintains
lines of credit totaling $20 million with various large banks to
support the issuance of commercial paper and pays fees to maintain
these lines. No lines of credit were in use at December 31, 1993, 1992 or
1991.
The fair value of short-term borrowings is the book value.
<TABLE>
<CAPTION>
NOTE 13
Long-Term Debt
Long-term debt consisted of (in thousands):
December 31
====================================================================
1993 1992
(Restated)
- --------------------------------------------------------------------
<S> <C> <C>
First Commerce Corporation
8% debentures $ - $ 5,695
12 3/4% convertible debentures,
due in December, 2000;
unsecured <FN1>
Series A 26,846 26,853
Series B 57,122 57,262
- --------------------------------------------------------------------
83,968 89,810
- --------------------------------------------------------------------
Subsidiaries
9% mortgage note payable on
other real estate - 38
9% mortgage note payable,
due in installments, balance
due in November, 1996 5,370 5,439
10% mortgage note payable,
due in installments through
July, 2003 49 52
Obligations under capitalized
leases, due in installments
through August, 2003 317 335
- --------------------------------------------------------------------
Total long-term debt $89,704 $95,674
====================================================================
<FN1> Approximately $15,514,000 held by directors and executive officers of FCC.
</TABLE>
Annual principal repayment requirements for the years 1994 through 1998
are as follows (in thousands):
<TABLE>
<CAPTION>
Subsidiaries
====================================================================
<S> <C>
1994 $ 98
- --------------------------------------------------------------------
1995 109
- --------------------------------------------------------------------
1996 5,233
- --------------------------------------------------------------------
1997 31
- --------------------------------------------------------------------
1998 35
- --------------------------------------------------------------------
</TABLE>
The 12 3/4% Convertible Debentures due 2000, Series A and B, were issued
in exchange for all of the capital stock held by stockholders of The First
National Bank of Lake Charles and Rapides Bank & Trust Company in Alexandria,
respectively. FCC is required to redeem Series B Debentures at the principal
amount upon the death of the original holder; Series A Debentures allow
redemption upon the death of the original holder at the option of the holder's
estate. At the option of the holder, each of the Series A or B Debentures may
be converted into FCC common stock at the conversion price of $26.66 principal
amount for one share of stock.
<PAGE>
Total cash payments for interest expense on long-term debt, short-term
borrowings and deposits were $142,322,000, $164,244,000 and $205,006,000 for
1993, 1992 and 1991, respectively.
The fair value of the long-term debt was estimated by dealer quotes. The
fair value at December 31, 1993 was $140,736,000, compared to the $89,704,000
book value. The fair value at December 31, 1992 was $127,559,000, compared to
the $95,674,000 book value.
FANB had $630,000 mandatory convertible capital notes outstanding during
1993. These notes were converted into FANB common stock immediately preceding
the completion of the acquisition.
NOTE 14
Employee Benefit Plans
Retirement Plans--FCC has a defined benefit plan covering substantially
all employees who have attained age 21 and completed one year of employment.
Benefits are based on years of service and the employees' highest average
monthly compensation for any 60-month period during the last 120-month period
of service. FCC's funding policy is to contribute annually the maximum that
can be deducted for federal income tax purposes.
The following table sets forth the plan's funded status at December 31,
1993 and 1992 (in thousands):
<TABLE>
<CAPTION>
December 31
=================================================================
1993 1992
- -----------------------------------------------------------------
<S> <C> <C>
Projected benefit obligation
Vested benefits $(52,031) $(46,493)
Nonvested benefits (1,021) (806)
- -----------------------------------------------------------------
Accumulated benefit obligation (53,052) (47,299)
Effect of projected future
compensation levels (16,005) (12,543)
- -----------------------------------------------------------------
Projected benefit obligation (69,057) (59,842)
Plan assets at fair value 68,233 65,657
- -----------------------------------------------------------------
Plan assets in excess of projected benefit
obligation (824) 5,815
Unrecognized net (gain) loss due to
past experience different from
assumptions made 841 (3,928)
Unrecognized prior service cost (1,082) (1,617)
Unrecognized net assets being recognized
over 15 years (4,511) (5,155)
- -----------------------------------------------------------------
Unfunded accrued pension cost included
in other accrued liabilities $ (5,576) $ (4,885)
=================================================================
</TABLE>
The plan's assets consist primarily of U.S. government securities,
corporate bonds, common stocks and mutual funds. At December 31, 1993 and
1992, the plan's assets included $201,157 and $1,197,000 of FCC common stock,
at market value.
Net periodic pension cost for 1993, 1992 and 1991 included the following
(in thousands):
<TABLE>
<CAPTION>
Years Ended December 31
==========================================================================
1993 1992 1991
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost-benefits earned during
the period $ 2,524 $ 2,289 $ 1,889
Interest cost on projected benefit
obligation 4,380 4,093 3,856
Return on plan assets (5,657) (2,937) (11,660)
Net total of other components (556) (3,296) 6,170
- --------------------------------------------------------------------------
Net periodic pension cost $ 691 $ 149 $ 255
==========================================================================
</TABLE>
In determining the plan's funded status, the weighted average discount
rate assumed was 7% in 1993 and 7 1/2% in 1992 and 1991. The rate of increase
in future salary levels was 5 1/2% in each of the three years. The expected
long-term rate of return on assets was 8 1/2% in 1993, 1992 and 1991.
Tax-Deferred Savings Plan--FCC has a Tax-Deferred Savings Plan covering
substantially all full-time employees. Employees may voluntarily contribute up
to maximum of 15%, with the limit depending on the salary level. Employees
receive matching contributions of 50% of voluntary contributions up to a
maximum of 2 1/2% of gross pay. Vesting in matching employer contributions
occurs at 25% per year after one year's participation with full vesting after
four years. Employer contribution $1,637,000, $1,198,000 and $1,054,000 in
1993, 1992 and 1991, respectively, on a restated basis. FANB had an Employee
Stock Ownership Plan (ESOP) and a 401(k) Plan during all of 1993. The plans
will be merged into FCC's Tax-Deferred Savings Plan in 1994. FANB's
contributions to these two plans were included in FCC's contribution.
Postretirement Benefits--Certain of FCC's subsidiaries provide
postretirement medical and life insurance coverage for specified groups of
employees who retired in prior years. The expected costs of postretirement
benefits are accrued during the years that an eligible employee renders service
to the employer, including a portion of the accumulated postretirement benefit
at January 1, 1993, amortized over a 20 year period. The total present value of
FCC's future obligation (EPBO) was $3,227,000 as of December 31, 1993. The
estimated current accumulated postretirement benefit obligation (APBO) was
$1,972,000. The APBO and annual expense calculations assume a 7.5% discount
rate. The health care cost trend rate assumed in the current calculation begins
at 11.0% and declines in future periods, with an underlying inflation rate of
4.0%. An increase in the health care cost trend rate of 1% would result in an
increase in the APBO of approximately 10.1% from $1,972,000 to $2,171,000.
FCC's accumulated postretirement benefit expense was $371,000 in 1993,
including the 20 year amortization of the transition obligation. Retiree
medical insurance and life insurance expense was $47,000, $13,000, and $50,000
in 1993, 1992, and 1991, respectively.
<PAGE>
Postemployment Benefits--In November, 1992, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards No. 112,
"Employers' Accounting for Postemployment Benefits." The Statement, which will
become effective in 1994, requires the accrual of expected costs of
postemployment benefits during the years that an eligible employee renders
services to an employer. Based on preliminary reviews of FCC's postemployment
plans, the effect of SFAS 112 on FCC's consolidated financial statements is not
expected to be material. FCC will adopt this standard on January 1, 1994, and
estimates that its current accumulated postemployment benefit obligation is
approximately $1,660,000, which will be expensed over a 20-year period beginning
January 1, 1994.
NOTE 15
Stockholders' Equity
FCC issued 1,290,145 shares of common stock in connection with the
acquisition of First Acadiana National Bancshares, Inc. on January 1, 1994.
On December 30, 1993, FCC paid a five-for-four stock split effected in the
form of a 25% stock dividend to stockholders of record on December 17, 1993.
On January 11, 1993, FCC paid a three-for-two stock split effected in the form
of a 50% stock dividend to stockholders of record on December 11, 1992.
Fractional shares were paid in cash based on the closing price on the payment
date adjusted for the stock split. All average number of shares outstanding
and per share amounts have been restated to reflect both stock splits.
On January 23, 1992, FCC issued 2,400,000 shares of 7.25% preferred stock,
$25 stated value in a public offering. The preferred stock is non-voting and
cummulative as to dividends. Each share of preferred stock is convertible into
1.1646 shares of common stock.
On June 23, 1992, FCC issued an additional one million common shares which
were sold in a public offering.
FCC's 1985 Stock Option Plan (the 1985 Plan) and Tandem Stock Appreciation
Rights Plan (the SAR Plan) were replaced with a new plan in 1992. The FCC
1992 Stock Incentive Plan (the 1992 Plan) covers up to 10% of the outstanding
shares of common stock. During 1993, 76,736 options were granted in a price
range of $28.20 to $30.80 per share under the 1992 Plan. The exercise price of
the shares subject to each option granted under the 1985 Plan is the higher of
the fair market value of the stock on the date of grant or the book value.
Under the 1992 Plan the exercise price may not be less than the fair market
value of the common stock on the date of grant.
Options are exercisable in 25% increments beginning one year after the
date of grant and each year thereafter on a cumulative basis under the 1985
Plan. Under the 1992 Plan, no option may be exercised during the six-month
period immediately following the date of grant. The Stock Option Committee
has the discretion to determine the term of each option and the time or times
during its term when such option becomes exercisable. The income tax effect
of any difference between the market price at the exercise date and the option
price is credited to additional paid-in capital as the options are exercised.
Both plans allow the issuance of restricted stock; restriction terms are
determined at the the time of grant. Under the SAR plan, rights may be
granted in conjunction with options granted under the option plan. There are
no rights outstanding at this time. A summary of changes in stock options
follows (dollars in thousands):
<TABLE>
<CAPTION>
========================================================================
Option Price
- ------------------------------------------------------------------------
Number of
Shares Per Share Aggregate
- ------------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding
January 1, 1991 1,087,219 $9.13-$11.74 $ 10,617
Granted 125,190 $10.44 1,308
Exercised (265,142) $9.13-$11.74 (2,470)
Canceled (6,653) $9.13-$10.40 (63)
- ------------------------------------------------------------------------
Outstanding
December 31, 1991 940,614 $9.13-$11.74 $ 9,392
Granted 122,607 $21.07 2,583
Exercised (475,231) $9.13-$11.74 (4,553)
Canceled (11,876) $10.40-$21.07 (174)
- ------------------------------------------------------------------------
Outstanding
December 31, 1992 576,114 $ 9.13-$21.07 $ 7,248
Granted 76,736 $28.20-$30.80 2,184
Exercised (168,555) $ 9.13-$21.07 (1,684)
Canceled (4,245) $10.44-$28.20 (64)
- ------------------------------------------------------------------------
Outstanding
December 31, 1993 480,050 $ 9.27-$30.80 $ 7,684
========================================================================
</TABLE>
Options for 215,553 shares were exercisable at December 31, 1993.
On December 31, 1988, restricted stock was issued to those officers with
stock options granted in 1986. Options covering 114,136 shares of common stock
were canceled and exchanged for 28,191 shares of restricted common stock.
Restricted stock was also issued on February 20, 1989. Restrictions on the
1988 and 1989 resticted stock lapsed on Januray 31, 1992, based upon the level
of cumulative earnings per share for the years 1989 to 1991. On February 19,
1991, restricted stock was issued; the restrictions on 100% of these shares
lapsed on December 31, 1993, based upon the level of cumulative earnings per
share for the years 1991 through 1993. On February 16, 1993, restricted stock
was issued; the restrictions will lapse in full or in part in 1996, depending
on the level of cumulative earnings per share for the years 1993 through 1995.
Those officers holding restricted stock receive dividends and have the right to
vote the shares based on the assumption that all restrictions will lapse. A
summary of changes in restricted stock follows:
<PAGE>
<TABLE>
<CAPTION>
================================================================
Number of Shares
================================================================
<S> <C>
Outstanding, January 1, 1991 134,468
Granted 99,946
- ----------------------------------------------------------------
Outstanding, December 31, 1991 234,414
Granted 5,625
Earned and issued unrestricted (73,963)
Retired (60,507)
Canceled (6,901)
- ----------------------------------------------------------------
Outstanding, December 31, 1992 98,668
Granted 47,814
Earned and issued unrestricted (82,293)
Retired (16,375)
- ----------------------------------------------------------------
Outstanding, December 31, 1993 47,814
================================================================
</TABLE>
FCC recorded $944,000, $1,152,000 and $1,196,000 of amortization expense
in 1993, 1992, and 1991, respectively, related to these resticted shares.
At December 31, 1993, 216,985 shares of common stock were reserved for
issuance under the FCC Tax-Deferred and Supplemental Tax-Deferred Savings
Plans, in which participants can choose to invest in FCC common stock. FCC's
contributions to the plan are made in either cash or FCC common stock, with
cash contributions used to purchase FCC common stock. The plan trustee
purchased 115,011 shares in 1993, 45,736 shares in 1992, and 68,648 shares in
1991 of FCC common stock directly from FCC.
At December 31, 1993, 1,487,902 shares of common stock were reserved for
issuance under the FCC Dividend and Interest Reinvestment and Stock Purchase
Plan, which allows participants to reinvest their dividends (from both common
and preferred stock), interest (on the 12 3/4% Debentures, Series A and B) and
certain optional cash contributions in FCC common stock. The plan allows FCC,
at its discretion, to either issue new shares or purchase shares in the open
market on the reinvestment dates for the plan's participants. FCC issued
66,845 shares in 1993, 71,318 shares in 1992 and 70,711 shares in 1991 of
common stock directly to the plan for participants.
NOTE 16
Dividend and Loan Restrictions
The primary source of funds for the dividends paid by FCC to its
stockholders is dividends from the Banks. The payment of dividends by national
banks is regulated by the Comptroller of the Currency. The payment of
dividends by state banks in Louisiana that are members of the Federal Reserve
system is regulated by the Louisiana Commissioner of Financial
Institutions and the Federal Reserve Board. All banking subsidiaries can pay
dividends to FCC without prior approval. The amount of retained earnings that
could be paid to FCC after December 31, 1993 without prior approval was
approximately $148,881,000 plus an amount equal to the Banks' net income for
1994. The parent company's net working capital is another source for the
payment of dividends. Net working capital was $55,993,000 as of December 31,
1993.
Under current Federal Reserve regulations, the Banks are limited to the
amounts they may loan to their affiliates, including FCC. Loans to a single
affiliate may not exceed 10% and loans to all affiliates may not exceed 20% of
an individual bank's net assets plus its allowance for loan losses. Such loans
must be collateralized by assets with market values of 100% to 130% of loan
amounts, depending upon the nature of the collateral.
NOTE 17
Off-Balance Sheet Instruments
In the normal course of business, FCC is a party to financial instruments
which are not recorded in the consolidated financial statements. These
financial instruments include commitments to extend credit, letters of credit,
interest rate contracts and foreign exchange contracts.
Loan commitments and lines of credit represent commitments to lend funds
at specific rates, with fixed expiration or review dates and for specific
purposes. These commitments are agreements to fund loans if the conditions in
the agreements are met. For their credit card customers, the Banks have the
right to change or terminate any terms or conditions of the credit card
accounts at any time. Since many commitments and unused credit card lines are
never actually drawn upon, the unfunded amounts do not necessarily represent
future funding requirements. The Banks evaluate each customer's
creditworthiness on an individual basis. The amount of collateral obtained, if
any, upon extension of credit is based on the creditworthiness of the customer.
Standby letters of credit obligate the Banks to pay third parties if the
Banks' customers fail to perform under the agreements with those third parties.
Commercial letters of credit are used to finance contracts for the shipment of
goods from seller to buyer. Letters of credit are subject to credit review,
collateral requirements and debt covenants similar to those in loan agreements.
The credit risk involved in issuing letters of credit is essentially the same
as that involved in extending loans to customers.
Foreign exchange contracts are commitments to purchase or deliver foreign
currency at a specified exchange rate. These contracts are used as commercial
service products and guarantee that at a future date, the customer will receive
the foreign currency at a specified rate. The market risk from unfavorable
movements in currency exchange rates is minimized by offsetting transactions.
<PAGE>
In order to manage interest rate risk on certain assets and liabilities,
the Banks may enter into interest rate contracts, including swaps, cap
corridors, caps, swaptions and floors. These agreements obligate one or both
parties to make interest rate payments based on designated or calculated
interest rates times the notional amounts of the contracts. The notional
amounts do not represent an amount at risk because they are only used as the
basis for determining the actual cash flows related to the interest rate
contracts. Normal credit reviews of the parties to these agreements are
performed to minimize the risk of default. A swaption is an option to either
enter into an interest rate swap at some future date or cancel an existing
swap. A cap corridor is the simultaneous purchase and sale of a cap; the cap
sold is for a higher rate than the one purchased.
There are no financial instruments which present an unusual risk to the
Banks, and no material losses are anticipated as a result of these transactions.
A summary of obligations under financial instruments which are not
reflected in the consolidated financial statements follows (in thousands):
<TABLE>
<CAPTION>
December 31
=======================================================================================
1993 1992
(Restated)
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Commitments to extend credit for loans and
leases (excluding credit card plans) $ 627,540 $ 604,117
Commitments to extend credit for credit
card plans $ 983,711 $ 904,990
Commercial letters of credit $ 2,140 $ 4,261
Financial letters of credit $ 46,268 $ 45,316
Performance letters of credit $ 16,681 $ 12,490
Foreign exchange contracts
Commitments to purchase $ 1,228 $ 270
Commitments to sell $ 1,326 $ 7,872
When-issued securities
Commitments to purchase $ 470 $ 1,755
Commitments to sell $ 470 $ 1,420
Interest rate contracts<FN1>
Swaps, including amortizing interest rate swaps $ 263,000 $ 13,000
Swaptions $ 200,000 $ 50,000
Caps $ 5,000 $ 5,000
Floors $ - $ 300,000
Cap corridors $ 550,000 $ -
=======================================================================================
<FN1> Notional principal amounts.
</TABLE>
The fair values of interest rate contracts were obtained from dealer
quotes. The notional amount of interest rate contracts and the fair values are
not related. The fair value is related to the potential cash flows on these
contracts and will fluctuate based on the level of interest rates. The
aggregate fair value of interest rate contracts was $(1,109,000) and $(277,000)
at December 31, 1993 and 1992, respectively. The negative fair values were
related to the swaps and were due to low interest rates.
The fair value of the foreign exchange contracts is related to the cash
flows arising from these contracts and will fluctuate based on currency values.
The fair values were $98,000 and $562,000 December 31, 1993 and 1992,
respectively.
The fair values of commitments to extend credit and all types of letters
of credit were established using the fees currently charged to enter into
similar agreements. The aggregate fair value of these commitments and letters
of credit was immaterial.
The fair value of when-issued securities is the par value.
NOTE 18
Contingencies
FCC and its subsidiaries have been named as defendants in various legal
actions arising from normal business activities in which damages in various
amounts are claimed. The amount, if any, of ultimate liability with respect to
such matters cannot be determined. However, after consulting with legal
counsel, management believes any such liability will not have a material effect
on FCC's consolidated financial condition or results of operations.
<TABLE>
<CAPTION>
NOTE 19
Other Operating Expense
The composition of other operating expense follows (in thousands):
December 31
==========================================================================
1993 1992 1991
(Restated)
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Professional fees $ 11,532 $ 8,574 $ 7,260
Advertising and marketing 8,203 7,482 5,881
Stationery and supplies 6,439 5,798 5,020
Computer-related services 5,886 5,300 4,439
Taxes, licenses and other fees 5,462 4,048 4,623
Postage 5,000 5,071 4,660
Communications 3,865 3,370 3,018
Amortization of intangibles 2,829 2,445 2,677
Credit card expense 2,714 1,806 1,700
Travel and entertainment 2,507 1,938 1,643
Armored car, courier and freight 2,250 2,223 2,056
Federal Reserve Bank service charges 1,713 1,481 1,372
Branch, excess facilites and
other loses 1,158 2,073 2,941
Nonperforming assets expense 1,152 6,329 13,522
Other 737 6,167 5,315
- --------------------------------------------------------------------------
Total $ 61,447 $ 64,105 $ 66,127
==========================================================================
</TABLE>
<PAGE>
NOTE 20
Income Taxes
The effect of adopting SFAS 109 was an additional expense of $590,000 in
1993.
On August 10, 1993 the marginal federal income tax rate was increased to 35%
from 34%. This increase was made retroactive to January 1, 1993.
During 1993, FCC reached a final agreement with the Internal Revenue Service
for federal income tax returns filed for the years through 1990. The
principal issue related to the deductibility of intangible assets resulting
from the 1985 acquisitions of two banks. Following a review of its tax
liability position, FCC recognized a one-time adjustment of $3.50 million,
which reduced income tax expense.
The current income tax payable was $9.95 million on December 31, 1993.
Deferred income taxes reflect the tax effects of temporary differences between
the carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for income tax purposes. There was a net deferred tax
asset of $24.23 million on December 31, 1993. The major temporary differences
which created deferred tax assets and liabilities as of December 31, 1993 were
as follows (in thousands, restated):
<TABLE>
<CAPTION>
Deferred Tax Deferred Tax
Assets Liabilities
- ----------------------------------------------------------------------------------
<S> <C> <C>
Allowance for loan losses $ 24,508 $ -
Amortization of intangibles 3,703 -
Allowance for losses on forclosed assets 2,705 -
Interest on nonaccrual loans 2,431 -
Employee benefits 1,731 -
Accumulated depreciation - 4,242
Bond accretion - 3,968
Accrued liabilities - 3,943
Other 3,430 2,128
- ----------------------------------------------------------------------------------
Total deferred taxes $ 38,508 $ 14,281
==================================================================================
</TABLE>
The components of income tax expense in the consolidated statements of
income for the years ended December 31, 1993, 1992 and 1991 were as follows (in
thousands):
<TABLE>
<CAPTION>
Liability Deferred
Method Method
================================================================================================
1993 1992 1991
(Restated)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Current $ 49,267 $ 35,182 $ 21,773
Deferred (8,626) (2,416) (10,837)
- ------------------------------------------------------------------------------------------------
Total $ 40,641 $ 32,766 $ 10,936
================================================================================================
</TABLE>
State and foreign income taxes are included above and were insignificant
in all years presented. Income tax expense (benefit) related to securities
transactions was $(148,000) in 1993, $87,000 in 1992 and $88,000 in 1991.
Deferred income tax benefit under the deferred method included the
following components (in thousands):
<TABLE>
<CAPTION>
Years ended December 31
===========================================================================================
1992 1991
- -------------------------------------------------------------------------------------------
<S> <C> <C>
Provision for loan losses $ (1,818) $ (4,079)
Provision for other losses (566) (4,525)
Interest on nonaccrual loans (1,303) (1,848)
Depreciation (546) (587)
Direct lease financing income (1) (264)
Bond accretion (45) 243
Other items, net 1,863 223
- -------------------------------------------------------------------------------------------
Total deferred tax benefit $ (2,416) $ (10,837)
===========================================================================================
Total income tax expense for 1993, 1992 and 1991 was different from the
amount computed by applying the statutory federal income tax rates to pretax
income as follows (in percentages):
</TABLE>
<TABLE>
<CAPTION>
Years ended December 31
=============================================================================================
Liability Deferred
Method Method
- ---------------------------------------------------------------------------------------------
1993 1992 1991
(Restated)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Federal income tax expense 35.00 % 34.00 % 34.00 %
Increase (decrease) resulting from:
Benefits attributable to
tax-exempt interest (2.85) (4.03) (11.07)
Deferred taxes no longer needed (2.86) - -
Nondeductible expenses .46 .71 .70
Effect of adopting SFAS 109 .43 - -
Effect of change in tax rate
on beginning deferred items (.33) - -
Other items, net .06 .18 .22
- ---------------------------------------------------------------------------------------------
Actual income tax expense 29.91 % 30.86 % 23.85 %
=============================================================================================
</TABLE>
FCC's cash payments for federal income tax liabilities were $37.73
million, $31.20 million and $14.50 million in 1993, 1992 and 1991, respectively.
<PAGE>
<TABLE>
<CAPTION>
NOTE 21
Condensed Parent Company Only - Financial Information
Condensed Balance Sheets (in thousands)
December 31
=============================================================================
1993 1992
(Restated)
- -----------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Interest-bearing deposits in
subsidiary banks<FN1>
Cash and due from banks $ 43,412 $ 46,756
Time deposits 618 931
Investments in subsidiaries at equity<FN1>
Banks 530,581 444,960
Nonbanks 4,388 5,044
- -----------------------------------------------------------------------------
534,969 450,004
Other assets 31,982 29,819
- -----------------------------------------------------------------------------
Total assets $ 610,981 $ 527,510
=============================================================================
LIABILITIES
Commercial paper $ - $ 500
Payable to subsidiaries<FN1> 7,583 2,401
Long-term debt 83,968 89,810
Other liabilities 9,758 19,075
- -----------------------------------------------------------------------------
Total liabilities 101,309 111,786
STOCKHOLDERS' EQUITY 509,672 415,724
- -----------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 610,981 $ 527,510
=============================================================================
<FN1> Eliminated in consolidation, except for goodwill and other intangibles.
</TABLE>
<TABLE>
<CAPTION>
Condensed Statements of Income (in thousands)
Years Ended December 31
====================================================================================
1993 1992 1991
(Restated)
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
INCOME
Interest and dividends on
securities $ 274 $ 104 $ 47
Interest on receivables from
subsidiaries<FN1> 1,798 2,546 1,410
Dividends from subsidiaries<FN1> 22,123 3,386 23,211
Other income 234 5 13
- ------------------------------------------------------------------------------------
24,429 6,041 24,681
- ------------------------------------------------------------------------------------
EXPENSES
Interest on debt to nonbank subsidiaries 183 - -
Interest on debt to nonaffiliates 11,204 11,313 11,963
Other 1,074 1,624 1,424
- ------------------------------------------------------------------------------------
12,461 12,937 13,387
- ------------------------------------------------------------------------------------
Income before income taxes and
equity in undistributed earnings
of subsidiaries 11,968 (6,896) 11,294
Income tax benefit (13,514) (3,062) (3,928)
- ------------------------------------------------------------------------------------
25,482 (3,834) 15,222
Equity in undistributed earnings
of subsidiaries<FN1> 69,732 76,309 18,807
- ------------------------------------------------------------------------------------
NET INCOME 95,214 72,475 34,029
PREFERRED DIVIDEND
REQUIREMENTS 4,348 4,076 -
- ------------------------------------------------------------------------------------
INCOME APPLICABLE TO
COMMON SHARES $ 90,866 $ 68,399 $ 34,029
====================================================================================
<FN1> Eliminated in consolidation.
</TABLE>
<TABLE>
<CAPTION>
Statements of Cash Flows (in thousands)
Years Ended December 31
===========================================================================================
1993 1992 1991
(Restated)
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 95,214 $ 72,475 $ 34,029
Adjustments to reconcile net income to
net cash provided by operating activities
Equity in undistributed earnings
of subsidiaries<FN1> (69,732) (76,309) (18,807)
Deferred income taxes (13,394) 304 829
(Decrease) in interest payable (21) (33) (20)
(Increase) decrease in other assets 1,682 106 (44)
Increase (decrease) in other liabilities 27 (9,688) 990
Other 944 1,277 454
- -------------------------------------------------------------------------------------------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES 14,720 (11,868) 17,431
- -------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Investment in subsidiaries<FN1> 3,000 (38,288) (289)
Purchase of interest-bearing
time deposits<FN1> - (2,020) (2,656)
Proceeds from maturity of interest-
bearing time deposits<FN1> 313 2,335 1,410
Purchase of securities (85,000) (22,300) -
Proceeds from sales of securities 83,975 3,700 -
Principal collected on advances<FN1> 86,002 73,161 63,382
Advances originated or acquired<FN1> (81,289) (73,366) (61,443)
- -------------------------------------------------------------------------------------------
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES 7,001 (56,778) 404
- -------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Net increase (decrease) in commercial paper (500) 500 (17,086)
Payments on long-term debt (5,842) (4,308) (1,806)
Proceeds from issuance of stock:
Common 5,385 52,019 4,306
Preferred - 57,597 -
Cash dividends (24,995) (17,872) (13,986)
- -------------------------------------------------------------------------------------------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES (25,952) 87,936 (28,572)
- -------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS (4,231) 19,290 (10,737)
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR 47,643 27,466 38,203
- -------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS
AT END OF YEAR $ 43,412 $ 46,756 $ 27,466
===========================================================================================
<FN1> Eliminated in consolidation.
</TABLE>
<PAGE>
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
The management of First Commerce Corporation is responsible for the
preparation of the financial statements, related financial data and other
information in this annual report. The financial statements are prepared in
accordance with generally accepted accounting principles and include some
amounts that are necessarily based on management's informed estimates and
judgements, with consideration given to materiality. All financial information
contained in this annual report is consistent with that in the financial
statements.
Management fulfills its responsibility for the integrity, objectivity,
consistency and fair presentation of the financial statements and financial
information through an accounting system and related internal accounting
controls that are designed to provide reasonable assurance that assets are
safeguarded and that transactions are authorized and recorded in accordance
with established policies and procedures. The concept of reasonable assurance
is based on the recognition that the cost of a system of internal accounting
controls should not exceed the related benefits. As an integral part of the
system of internal accounting controls, First Commerce Corporation has a
professional staff of internal auditors who monitor compliance with and assess
the effectiveness of the system of internal accounting controls and coordinate
audit coverage with the independent public accountants.
The Audit Committee of the Board of Directors, composed solely of outside
directors, meets periodically with management, the internal auditors and the
independent public accountants to review matters relating to financial
reporting, internal accounting control and the nature, extent and results of
the audit effort. The independent public accountants and internal auditors have
direct access to the Audit Committee with or without management present.
The financial statements have been examined by Arthur Andersen & Co.,
independent public accountants, who render an independent professional opinion
on the financial statements prepared by management. Their appointment was
recommended by the Audit Committee and approved by the Board of Directors.
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Stockholders
and Board of Directors of
First Commerce Corporation:
We have audited the consolidated balance sheets of FIRST COMMERCE
CORPORATION (a Louisiana corporation) and subsidiaries as of December 31, 1993
and 1992, and the related consolidated statements of income, changes in
stockholders' equity and cash flows for each of the three years in the period
ended December 31, 1993. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of First Commerce Corporation
and subsidiaries as of December 31, 1993 and 1992, and the consolidated results
of their operations and their cash flows for each of the three years in the
period ended December 31, 1993, in conformity with generally accepted
accounting principles.
ARTHUR ANDERSEN & CO.
New Orleans, Louisiana,
January 12, 1994
EXHIBIT 21
SUBSIDIARIES <FN1> OF FIRST COMMERCE CORPORATION
- First National Bank of Commerce
- First Commerce Investment Services, Inc.
- Baronne Street Properties, Inc.
- City National Bank of Baton Rouge
- Rapides Bank & Trust Company in Alexandria
- The First National Bank of Lafayette
- The First National Bank of Lake Charles
- First Commerce Service Corporation
(formerly MSDI Company)
- New Orleans Bancshares, Inc.
- First Commerce Community Development Corporation
_____________________
<FN1> Incorporated or organized in Louisiana.
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report incorporated by reference in this
Form 10-K into First Commerce Corporation's previously filed
Registration Statement File No. 2-97152 on Form S-8,
Registration Statement File No. 33-925 on Form S-8, Registration
Statement File No. 33-28002 on Form S-8 and Registration Statement
File No. 33-50150 on Form S-8.
New Orleans, Louisiana, ARTHUR ANDERSEN & CO.
March 24, 1994
