SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
DATE OF REPORT (Date of earliest event reported): January 14, 1997
FIRST COMMERCE CORPORATION
(Exact name of registrant as specified in its charter)
LOUISIANA 0-7931 72-0701203
(State of incorporation) (Commission File Number) (IRS Employer
Identification Number)
210 BARONNE ST., NEW ORLEANS, LOUISIANA 70112
(Address of principal executive offices - Zip Code)
Registrant's telephone number, including area code: (504) 623-1371
N/A
(Former name or former address, if changed since last report)
Item 5. Other Events.
On January 14, 1997, First Commerce Corporation issued the following
press release:
JANUARY 14, 1997
CONTACTS: MICHAEL A. FLICK (504) 623-1492
HOLLY E. HOBSON (504) 623-2917
FIRST COMMERCE ANNOUNCES FOURTH QUARTER EARNINGS
New Orleans - First Commerce Corporation (NASDAQ-FCOM) announced today
that its net income for the fourth quarter was $28.7 million, or $.72 per
share. Fully diluted earnings per share were $.66 in the third quarter of
1996 and $.15 for the fourth quarter of 1995.
The following key items impacted the fourth quarter's
results:
* Net interest income (FTE) rose 3% from the prior quarter
and 12% from 1995's fourth quarter to $97.8 million in 1996's
fourth quarter. Loan growth was again the most significant
cause of the net interest income improvement. The net
interest margin was 4.76% in the fourth quarter, compared to
4.82% in the third quarter and 4.54% in last year's fourth
quarter.
* Noninterest income was 4% higher than in the third
quarter and 18% higher than in 1995's fourth quarter, with
increases in most categories of fee income. Credit card fees,
which rose 17% from the previous quarter and 50% from last
year's fourth quarter, were the most significant contributor.
Trust and broker/dealer revenues also showed strong increases.
* Operating expense was $85.3 million for the fourth
quarter, compared to $83.6 million for the third quarter and
$95.6 million for 1995's fourth quarter. The fourth quarter
included an increase of $3.8 million for incentive
compensation tied to the 11% appreciation of the common stock
during the fourth quarter; this increase reduced fully diluted
earnings per share by $.06 from the third quarter. The third
quarter of 1996 included a $5.3 million charge for the SAIF
recapitalization, while 1995's fourth quarter contained $17.5
million in merger-related and other charges. The increase in
operating expense from 1995's fourth quarter was primarily
related to performance-based and stock-based incentive
compensation plans. Excluding the above-mentioned items,
operating expense rose 4% from the third quarter and 4% from
the last quarter of 1995.
* The provision for loan losses was $14.2 million in the
fourth quarter, up from $12.5 million in the third quarter,
but down from $19.8 million in 1995's fourth quarter. Higher
net charge-offs of loans in the consumer finance operation and
credit card loans caused the provision to increase. Included
in the provision for last year's fourth quarter was $10
million related to the closure of the land-based casino in New
Orleans.
Loan growth was strong again this quarter. Total loans
rose to $6.2 billion as of December 31, 1996, 21% higher than
one year ago and 7% higher than at September 30, 1996. Growth
was in all categories. Credit card loans grew 13% from
September 30, 1996, to $830 million, while commercial loans
were up 11% to end the year at $1.3 billion. At the end of
1996, 59% of total loans were consumer, including credit
cards, and 41% were commercial.
Total deposits were $7.3 billion at December 31, 1996, 5%
higher than one year earlier. Average deposits grew 2% from
the third quarter to the fourth quarter and were up 3% from
last year's fourth quarter.
Nonperforming assets were $31.9 million at December 31,
1996, or .51% of loans, improved from $33.5 million at
September 30 and $59.8 million at the end of 1995. Net charge-
offs were $11.9 million in the fourth quarter, $8.5 million in
the third quarter, and $18.7 million in 1995's fourth quarter.
As a percent of loans, net charge-offs were .79%, including
credit card charge-offs of 3.85% and consumer loan charge-offs
of 1.13%; commercial loans had a net recovery. Net charge-
offs in the company's consumer finance operation have
increased throughout the year, to $2.3 million in the fourth
quarter. The rise in credit card net charge-offs throughout
1996 at First Commerce, to $7.3 million in the fourth quarter,
has tracked national trends and is principally due to higher
bankruptcies; however, the company's charge-off rate remains
below national averages.
The efficiency ratio was 59.5% in the fourth quarter.
This was up from 56.5% for the third quarter, excluding the
SAIF charge. While revenues grew more than 3% from the third
to the fourth quarter, the rise in the common stock price
increased expenses for incentive compensation tied to the
stock price. Excluding the increased cost of stock-based
incentive compensation in the fourth quarter, the efficiency
ratio would have been 56.9%. The efficiency ratio was 61.7%
in 1995's fourth quarter, excluding nonrecurring items.
For the twelve months, net income was $118.4 million,
versus $76.0 million in 1995. The improvement from 1995 to
1996 was primarily caused by the 9% growth of revenues, and
the absence in 1996 of $19.1 million of one-time merger
expenses incurred in 1995 and $11.4 million of 1995 securities
losses. Fully diluted earnings per share were $2.89 in 1996
and $1.87 in 1995. Return on equity was 16.34% and return on
assets was 1.39%.
Net interest income (FTE) was $375.5 million in 1996, a
7% increase over 1995. Loan growth of 21% was the most
significant cause of this improvement. Noninterest income
rose 14% to $172.4 million. Operating expense was $326.8
million during 1996; excluding nonrecurring items, operating
expense increased only 3%.
On October 21, 1996, First Commerce called its 7.25%
Cumulative Convertible Preferred Stock for redemption. The
redemption date was January 2, 1997. As expected, all of the
preferred stock was converted into common stock during the
fourth quarter, except for a nominal amount of redemptions.
The common stock issued for the conversions had been
repurchased by the company earlier in the year specifically
for this purpose.
Total assets were $9.2 billion at December 31, 1996, and
deposits were $7.3 billion. The leverage ratio was 7.76% at
the end of the year.
First Commerce Corporation is a New Orleans-based bank
holding company operating six Louisiana banks in Alexandria,
Baton Rouge, Lafayette, Lake Charles, Monroe and New Orleans.
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FIRST COMMERCE CORPORATION AND SUBSIDIARIES
FINANCIAL HIGHLIGHTS
Fourth Fourth Twelve Months Ended
Quarter Quarter December 31
(dollars in thousands, except per share data) 1996 1995 1996 1995
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INCOME DATA
Net interest income $ 96,232 $ 86,086 $ 369,742 $ 343,344
Net interest income (tax equivalent) $ 97,776 $ 87,596 $ 375,500 $ 349,317
Provision for loan losses $ 14,168 $ 19,808 $ 37,983 $ 30,600
Other income (exclusive of securities
transactions $ 45,498 $ 38,674 $ 172,377 $ 151,279
Securities transactions $ 407 $ 1,868 $ 160 $ (11,413)
Operating expense $ 85,304 $ 95,635 $ 326,848 $ 337,204
Operating income $ 28,442 $ 5,703 $ 118,334 $ 83,369
Net income $ 28,707 $ 6,917 $ 118,438 $ 75,951
AVERAGE BALANCE SHEET DATA
Loans, net of unearned income $ 5,982,771 $ 4,935,576 $ 5,512,428 $ 4,542,678
Securities $ 2,157,419 $ 2,689,239 $ 2,253,065 $ 2,831,943
Earning assets $ 8,188,195 $ 7,677,557 $ 7,831,517 $ 7,464,065
Total assets $ 8,843,783 $ 8,367,588 $ 8,525,109 $ 8,141,194
Deposits $ 6,950,851 $ 6,741,690 $ 6,887,675 $ 6,703,077
Long-term debt $ 82,460 $ 88,950 $ 85,338 $ 89,739
Stockholders' equity $ 710,131 $ 726,349 $ 724,674 $ 687,533
PER COMMON SHARE DATA
Net income - fully diluted $ 0.72 $ 0.15 $ 2.89 $ 1.87
Net income - primary $ 0.76 $ 0.15 $ 3.02 $ 1.89
Operating income - fully diluted $ 0.71 $ 0.12 $ 2.88 $ 2.05
Operating income - primary $ 0.75 $ 0.12 $ 3.02 $ 2.09
Book value (end of period) $ 18.66 $ 17.86 $ 18.66 $ 17.86
Cash dividends $ 0.40 $ 0.35 $ 1.45 $ 1.25
RATIOS
Net income as a percent of:
Average assets 1.29% 0.33% 1.39% 0.93%
Average total equity 16.08% 3.78% 16.34% 11.05%
Average common equity 16.81% 3.48% 16.95% 11.41%
Operating income as a percent of:
Average assets 1.28% 0.27% 1.39% 1.02%
Average total equity 15.93% 3.12% 16.33% 12.13%
Average common equity 16.66% 2.76% 16.93% 12.59%
Net interest income (tax equivalent) as
a percent of average earning assets 4.76% 4.54% 4.79% 4.68%
Operating expense less other income
(excluding securities transactions) as a
percent of average earning assets 1.93% 2.94% 1.97% 2.49%
Operating expense as a percent of
total revenue (tax equivalent and excluding
securities transactions) 59.54% 75.74% 59.66% 67.36%
Allowance for loan losses as a percent of
net loans, at end of period 1.31% 1.48% 1.31% 1.48%
Nonperforming assets as a percent of
net loans plus foreclosed
assets, at end of period 0.51% 1.17% 0.51% 1.17%
Stockholders' equity as a percent
of total assets, at end of period 7.87% 8.59% 7.87% 8.59%
Leverage ratio at end of period 7.76% 8.16% 7.76% 8.16%
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
FIRST COMMERCE CORPORATION
By: /s/ Thomas L. Callicutt, Jr.
-------------------------------
Thomas L. Callicutt, Jr.
Executive Vice President,
Controller and
Principal Accounting Officer
Dated: January 24, 1997
