SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
_____________________________________
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to _________
Commission file number 1-7273
_____________________________________
FIRST MARYLAND BANCORP
(Exact name of registrant as specified in its charter)
Maryland 52-0981378
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
25 South Charles Street, Baltimore, Maryland 21201
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: 410-244-4000
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 the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
All voting stock (16,985,149 shares of Common Stock, $5.00 par
value) is owned by Allied Irish Banks, p.l.c., an Irish
Banking Corporation.
<PAGE>
PAGE 2
<TABLE>
FIRST MARYLAND BANCORP AND SUBSIDIARIES
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1995
<CAPTION>
Part I. Financial Information
Page
<S> <C>
Item 1. Financial Statements:
Consolidated Statements of Income....................... 3
Consolidated Statements of Condition.................... 4
Consolidated Statements of Changes in Stockholders'
Equity.................................................. 5
Consolidated Statements of Cash Flows................... 6
Notes to Consolidated Financial Statements.............. 7-15
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..................... 16-29
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K........................ 30
</TABLE>
<PAGE>
PAGE 3
Part I - Financial Information
Item 1. Financial Statements
<TABLE>
FIRST MARYLAND BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
---------------------
1995 1994
-------- --------
(in thousands)
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans........................................ $121,461 $99,978
Interest and dividends on investment securities held-to-maturity:
Taxable....................................................... 20,170 23,761
Interest on investment securities available-for-sale:
Taxable....................................................... 12,372 13,929
Tax-exempt.................................................... 3,716 3,975
Dividends..................................................... 290 231
Interest on loans held-for-sale................................... 1,021 2,750
Interest on money market investments.............................. 8,136 6,107
-------- --------
Total interest and dividend income.......................... 167,166 150,731
-------- --------
INTEREST EXPENSE
Interest on deposits.............................................. 47,006 40,357
Interest on Federal funds purchased and
other short-term borrowings..................................... 17,851 13,381
Interest on long-term debt........................................ 4,688 4,327
-------- --------
Total interest expense...................................... 69,545 58,065
-------- --------
NET INTEREST INCOME............................................... 97,621 92,666
Provision for credit losses (note 5).............................. 4,000 8,999
-------- --------
NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES............. 93,621 83,667
-------- --------
NONINTEREST INCOME
Service charges on deposit accounts............................... 17,446 18,253
Trust fees........................................................ 5,099 5,138
Bankcard charges and fees......................................... 4,246 4,378
Servicing income from securitized assets, net..................... 4,146 5,476
Mortgage banking income........................................... 4,010 3,313
Securities gains, net............................................. 314 11,200
Other income...................................................... 11,355 10,029
-------- --------
Total noninterest income.................................... 46,616 57,787
-------- --------
NONINTEREST EXPENSES
Salaries and wages................................................ 40,962 38,908
Other personnel costs............................................. 10,570 17,424
Equipment costs................................................... 8,132 6,960
Net occupancy costs............................................... 7,928 8,147
Other operating expenses.......................................... 28,850 30,186
-------- --------
Total noninterest expenses.................................. 96,442 101,625
-------- --------
INCOME BEFORE INCOME TAXES........................................ 43,795 39,829
Income tax expense................................................ 15,259 13,773
-------- --------
NET INCOME........................................................ $28,536 $26,056
======== ========
<FN>
See accompanying notes to consolidated financial statements
</TABLE>
<PAGE>
PAGE 4
<TABLE>
FIRST MARYLAND BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CONDITION
(Unaudited)
<CAPTION>
March 31, December 31, March 31,
1995 1994 1994
------------ ------------ ------------
(in thousands)
<S> <C> <C> <C>
ASSETS
Cash and due from banks .......................................... $523,747 $554,878 $624,204
Money market investments (note 2)................................. 247,081 374,799 1,067,111
Investment securities available-for-sale (note 3)................. 1,031,165 1,022,709 1,145,338
Investment securities held-to-maturity (note 3)................... 1,474,845 1,338,267 1,583,350
Loans held-for-sale (at cost which approximates fair value)....... 69,652 75,366 101,063
Loans, net of unearned income of $102,429, $84,809
and $69,649:
Commercial.................................................... 1,715,129 1,633,275 1,641,157
Real estate,construction...................................... 275,270 268,683 265,320
Real estate,mortgage:
Residential................................................ 645,086 593,642 537,696
Commercial................................................. 971,707 978,164 981,071
Retail........................................................ 997,499 984,403 875,258
Bankcard...................................................... 488,941 496,608 482,302
Leases receivable............................................. 287,971 259,633 214,101
Foreign....................................................... 275,713 244,483 258,939
--------- --------- ---------
Total loans, net of unearned income...................... 5,657,316 5,458,891 5,255,844
Allowance for credit losses (note 5).......................... (189,428) (191,024) (199,805)
--------- --------- ---------
Loans, net .............................................. 5,467,888 5,267,867 5,056,039
--------- --------- ---------
Premises and equipment............................................ 103,198 102,157 100,981
Due from customers on acceptances................................. 17,490 26,059 13,041
Other assets...................................................... 315,748 343,500 370,169
--------- --------- ---------
Total assets........................................ $9,250,814 $9,105,602 $10,061,296
========== ========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Domestic deposits:
Noninterest bearing deposits ................................. $1,704,917 $1,766,648 $1,803,723
Interest bearing deposits..................................... 4,808,156 4,786,592 4,826,047
Interest bearing deposits in foreign banking office............... 113,491 80,306 121,317
--------- --------- ---------
Total deposits........................................... 6,626,564 6,633,546 6,751,087
Federal funds purchased and securities sold under
repurchase agreements........................................... 627,710 519,772 1,059,576
Other borrowed funds, short-term (note 8)......................... 544,150 541,507 688,847
Bank acceptances outstanding...................................... 17,490 26,059 13,041
Accrued taxes and other liabilities............................... 155,130 146,062 382,300
Long-term debt (note 9)........................................... 214,646 214,632 189,590
--------- --------- ---------
Total liabilities................................... 8,185,690 8,081,578 9,084,441
--------- --------- ---------
Stockholders' equity:
7.875% Noncumulative preferred stock, Series A, $5 par
value per share, $25 liquidation preference per share;
authorized 9,000,000 shares; issued 6,000,000 shares....... 30,000 30,000 30,000
Common stock, $5 par value per share; authorized
41,000,000 shares; issued 16,985,149 shares................ 84,926 84,926 84,926
Capital surplus.............................................. 198,176 198,176 198,127
Retained earnings............................................ 763,272 737,891 659,071
Unrealized (losses) gains on investment securities available
-for-sale (net of income (tax) benefits of $6,572,
$16,024 and ($3,092))...................................... (11,250) (26,969) 4,731
--------- --------- ---------
Total stockholders' equity.......................... 1,065,124 1,024,024 976,855
--------- --------- ---------
Total liabilities and stockholders' equity.......... $9,250,814 $9,105,602 $10,061,296
========== ========== ==========
<FN>
See accompanying notes to consolidated financial statements
</TABLE>
<PAGE>
PAGE 5
<TABLE>
FIRST MARYLAND BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(Unaudited)
<CAPTION>
Unrealized
gains
(losses) on
investment
securities
available-
Preferred Common Capital Retained for-sale,
Stock Stock Surplus Earnings net of tax Total
------------ ----------- ----------- ----------- ----------- -----------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
Three Months Ended March 31, 1994
---------------------------------
Balance at beginning of year........... $30,000 $84,926 $198,127 $637,128 $26,613 $976,794
Net income............................. 26,056 26,056
Dividends declared on preferred
stock.................................. (2,955) (2,955)
Change in net cost not yet recognized
as periodic pension expense.......... (1,158) (1,158)
Adjustment of the unrealized gains on
investment securities available-
-for-sale, net of income tax
benefits............................. (21,882) (21,882)
--------- --------- --------- --------- --------- ---------
Balance at March 31, 1994.............. $30,000 $84,926 $198,127 $659,071 $4,731 $976,855
========== ========== ========== ========== ========== ==========
Three Months Ended March 31, 1995
---------------------------------
Balance at beginning of year........... $30,000 $84,926 $198,176 $737,891 ($26,969) $1,024,024
Net income............................. 28,536 28,536
Dividends declared on preferred
stock.................................. (2,955) (2,955)
Change in net cost not yet recognized
as periodic pension expense............ (200) (200)
Adjustment of the unrealized losses
on investment securities available-
for-sale, net of income tax.......... 15,719 15,719
--------- --------- --------- --------- --------- ---------
Balance at March 31, 1995.............. $30,000 $84,926 $198,176 $763,272 ($11,250) $1,065,124
========== ========== ========== ========== ========== ==========
<FN>
See accompanying notes to consolidated financial statements
</TABLE>
<PAGE>
PAGE 6
<TABLE>
FIRST MARYLAND BANCORP AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Three Months Ended March 31,
--------------------------------
1995 1994
-------- --------
(in thousands)
<S> <C> <C>
OPERATING ACTIVITIES
Net income................................................................................ $28,536 $26,056
Adjustments to reconcile net income to net cash provided by
operating activities:
Provision for credit losses............................................................. 4,000 8,999
Depreciation and amortization........................................................... 7,790 7,992
Deferred income tax expense............................................................. 3,114 1,689
Net gain on the sale of assets.......................................................... (565) (11,290)
Net decrease in loans originated for sale............................................... 5,714 155,664
Decrease in trading account securities.................................................. 51 15,194
Decrease (increase) in accrued interest receivable...................................... 3,491 (1,991)
Increase in accrued interest payable.................................................... 3,091 2,029
Other, net.............................................................................. 16,553 20,831
--------- ---------
Net cash provided by operating activities............................................ 71,775 225,173
--------- ---------
INVESTING ACTIVITIES
Proceeds from sales of investment securities available-for-sale........................... 35,275 1,163,618
Proceeds from paydowns and maturities of investment securities available-for-sale......... 41,577 32,550
Proceeds from paydowns and maturities of investment securities held-to-maturity........... 66,860 131,961
Purchases of investment securities available-for-sale..................................... (59,884) (944,691)
Purchases of investment securities held-to-maturity....................................... (204,131) (7,191)
Net decrease (increase) in short-term investments......................................... 35,803 (860,989)
Net disbursements from lending activities of bank subsidiaries............................ (203,788) (50,586)
Principal collected on loans of nonbank subsidiaries...................................... 6,701 8,380
Loans originated by nonbank subsidiaries.................................................. (8,120) (6,020)
Principal payments received under leases.................................................. 1,657 896
Purchases of assets to be leased.......................................................... (1,777) (80)
Proceeds from other real estate transactions.............................................. 1,990 1,417
Proceeds from sales of premises and equipment............................................. 270 215
Purchases of premises and equipment....................................................... (6,350) (5,103)
Other, net................................................................................ (1,497) (1,477)
--------- ---------
Net cash used for investing activities............................................... (295,414) (537,100)
--------- ---------
FINANCING ACTIVITIES
Net decrease in deposits ................................................................. (6,982) (23,070)
Net increase in short-term borrowings..................................................... 110,581 354,788
Cash dividends paid....................................................................... (2,955) (1,575)
--------- ---------
Net cash provided by financing activities............................................ 100,644 330,143
--------- ---------
(Decrease) increase in cash and cash equivalents ........................................... (122,995) 18,216
Cash and cash equivalents at beginning of year.............................................. 692,123 631,137
--------- ---------
Cash and cash equivalents at March 31,...................................................... $569,128 $649,353
========= =========
SUPPLEMENTAL DISCLOSURES
Interest payments......................................................................... $66,453 $56,036
Income tax (credits) payments............................................................. (7,267) 4,961
NONCASH INVESTING AND FINANCING ACTIVITIES
Loan charge-offs.......................................................................... 7,957 11,957
Transfers to other real estate............................................................ 1,306 80
<FN>
See accompanying notes to consolidated financial statements
</TABLE>
<PAGE>
PAGE 7
FIRST MARYLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The accounting and reporting policies of First Maryland Bancorp
and subsidiaries (the "Corporation") conform to generally accepted
accounting principles.
The accompanying consolidated financial statements are unaudited.
In the opinion of management, all adjustments necessary for a fair
presentation of the results of operations for the periods presented have
been made, and all such adjustments are of a normal recurring nature.
Certain amounts in the 1994 consolidated financial statements have been
reclassified to conform with the 1995 presentation.
2. Money Market Investments
<TABLE>
Money market investments at March 31, 1995, December 31, 1994
and March 31, 1994 included the following:
<CAPTION>
March 31, December 31, March 31,
1995 1994 1994
---------- ------------- ----------
(in thousands)
<S> <C> <C> <C>
Interest bearing deposits in other banks............. $45,381 $137,245 $25,149
Trading account securities........................... 56,559 56,610 38,143
Federal funds sold................................... 127,225 154,800 550,000
Securities purchased under agreements
to resell.......................................... 17,916 26,144 453,819
-------- -------- --------
Total money market investments................. $247,081 $374,799 $1,067,111
======== ======== ==========
</TABLE>
3. Investment Securities
<TABLE>
The following is a comparison of the amortized cost and fair values of the
available-for-sale securities:
<CAPTION>
March 31, 1995 December 31, 1994 March 31, 1994
--------------------- --------------------- ----------------------
Amortized Fair Amortized Fair Amortized Fair
Cost Value Cost Value Cost Value
----------- ---------- ----------- ---------- --------- ----------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury and U.S. Government agencies........... $52,480 $50,830 $52,084 $48,716 $49,052 $48,499
Mortgage-backed obligations of
Federal agencies.................................. 760,260 732,436 773,388 723,752 825,588 811,549
Collateralized mortgage obligations:
Issued by Federal agencies........................ 13,630 13,478 14,345 14,507 19,969 20,011
Privately issued.................................. 1,043 1,052 1,344 1,364 8,423 8,478
Obligations of states and political
subdivisions...................................... 188,027 195,727 190,144 195,791 207,801 221,947
Other investment securities.......................... 33,547 37,642 34,397 38,579 26,682 34,854
---------- ---------- ---------- ---------- ---------- ----------
Total.......................................... $1,048,987 $1,031,165 $1,065,702 $1,022,709 $1,137,515 $1,145,338
========== ========== ========== ========== ========== ==========
</TABLE>
<PAGE>
PAGE 8
FIRST MARYLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
<TABLE>
The following is a comparison of the amortized cost and fair values
of the held-to-maturity securities:
<CAPTION>
March 31, 1995 December 31, 1994 March 31, 1994
------------------------ --------------------- ---------------------
Amortized Fair Amortized Fair Amortized Fair
Cost Value Cost Value Cost Value
---------- ---------- ---------- ---------- ---------- ----------
(in thousands)
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasury and U.S. Government agencies........... $745,162 $725,345 $793,517 $756,456 $940,176 $936,491
Mortgage-backed obligations of
Federal agencies.................................. 156,500 152,351 160,319 150,353 187,055 184,511
Collateralized mortgage obligations:
Issued by Federal agencies........................ 517,939 506,231 328,427 312,663 388,829 385,511
Privately issued.................................. 54,244 50,624 54,999 50,008 60,396 58,392
Other investment securities.......................... 1,000 1,000 1,005 1,005 6,894 6,894
---------- ---------- ---------- ---------- ---------- ----------
Total.......................................... $1,474,845 $1,435,551 $1,338,267 $1,270,485 $1,583,350 $1,571,799
========== ========== ========== ========== ========== ==========
</TABLE>
4. Impaired Loans
The Corporation adopted the provisions of Statements of Financial
Accounting Standards (SFAS) No. 114 and 118, "Accounting by Creditors
for Impairment of a Loan" on January 1, 1995. SFAS 114 and 118 apply to
loans for which it is probable that the creditor will not collect all
principal and interest payments according to the loan's contractual terms.
SFAS 114 and 118 do not apply to larger groups of homogeneous loans that
are collectively evaluated for impairment, leases, loans measured at fair
value or lower of cost or fair value, or debt securities. A loan which
meets the definition of impairment must be measured at the present value
of expected future cash flows using the loan's effective interest rate,
or as a practical expedient, at the loan's observable market price or
the fair value of the collateral if the loan is collateral dependent.
Interest income on impaired loans is recognized on a cash basis. The
following table presents impaired loans by loan type and any related
valuation allowance if the measure of the impaired loans is less than
the recorded investment at March 31, 1995.
<TABLE>
<CAPTION> Impaired Impaired Related
Total Loans with Loans with Valuation
Impaired No Valuation Valuation Allowance
Loans Allowance Allowance (1)
-------- ------------ ------------ ----------
(in thousands)
<S> <C> <C> <C> <C>
Commercial ........................................ $10,415 $9,006 $1,409 $577
Real estate, construction.......................... 1,669 690 979 285
Real estate mortgage, commercial................... 25,928 15,740 10,188 4,807
Foreign............................................ 1,500 1,500 - -
-------- -------- -------- --------
Total........................................ 39,512 26,936 12,576 5,669
======== ======== ======== ========
Average recorded investment in impaired loans during
the period........................................ 42,340
Interest income recognized during impairment......... 1,813
Interest income recorded on a cash basis during
impairment........................................ 1,813
<FN>
(1) Included in the allowance for credit losses discussed in Note 5.
</TABLE>
<PAGE>
PAGE 9
FIRST MARYLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
5. Allowance for Credit Losses
<TABLE>
The provision for credit losses is determined by analyzing
the status of individual loans, reviewing historical loss
experience and reviewing the delinquency of principal and
interest payments where pertinent. Management believes that
all uncollectible amounts have been charged off and that the
allowance is adequate to cover all losses inherent in the
portfolio at this time. The following is a summary of the
activity in the allowance for credit losses:
<CAPTION>
Three Months Ended March 31,
-------------------------------
1995 1994
-------- --------
(in thousands)
<S> <C> <C>
Balance at beginning of year...................................... $191,024 $200,006
Provision for credit losses....................................... 4,000 8,999
Less: charge-offs, net of recoveries of $2,361 and $2,757......... (5,596) (9,200)
-------- --------
Balance at March 31............................................... $189,428 $199,805
======== ========
</TABLE>
6. Intangible Assets
<TABLE>
Intangible assets at March 31, 1995, December 31, 1994 and
March 31, 1994 included the following:
<CAPTION>
March 31, December 31, March 31,
1995 1994 1994
------------ ------------- ------------
(in thousands)
<S> <C> <C> <C>
Goodwill............................................. $30,664 $31,316 $32,732
Premium on bankcard receivables...................... 13,839 14,627 17,242
Premium on deposits.................................. 8,514 8,799 1,212
Mortgage servicing rights............................ 1,386 1,269 779
Other................................................ 733 842 877
------- ------- -------
Total intangible assets........................ $55,136 $56,853 $52,842
======= ======= =======
</TABLE>
<PAGE>
PAGE 10
FIRST MARYLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
7. Valuation Allowance for Other Real Estate Owned
<TABLE>
A summary of the activity in the valuation allowance for other
real estate owned is provided below:
<CAPTION>
Three Months Ended March 31,
-------------------------------
1995 1994
-------- --------
(in thousands)
<S> <C> <C>
Balance at beginning of year...................................... $4,185 $4,412
Writedowns........................................................ (340) (87)
------ ------
Balance at March 31............................................... $3,845 $4,325
====== ======
</TABLE>
8. Other Borrowed Funds, Short-term
<TABLE>
Other borrowed funds, short-term at March 31, 1995, December 31,
1994 and March 31, 1994 included the following:
<CAPTION>
March 31, December 31, March 31,
1995 1994 1994
------------ ------------- ------------
(in thousands)
<S> <C> <C> <C>
Master demand note of the Corporation................ $378,019 $402,539 $445,081
Bank notes........................................... 55,000 130,000 240,000
Federal funds purchased-term......................... 90,000 - -
Other................................................ 21,131 8,968 3,766
-------- -------- --------
Total other borrowed funds, short-term......... $544,150 $541,507 $688,847
======== ======== ========
</TABLE>
9. Long-term Debt
<TABLE>
Following is a summary of the long-term debt of the Corporation
at March 31, 1995, December 31, 1994 and March 31, 1994 which
is all unsecured:
<CAPTION>
March 31, December 31, March 31,
1995 1994 1994
------------ ------------- ------------
(in thousands)
<S> <C> <C> <C>
5.77% Medium term bank notes due September 1, 1995... $25,000 $25,000 $ -
10.375% Subordinated Capital Notes due August 1,
1999............................................. 59,962 59,960 59,953
9.15% Notes due June 1, 1996......................... 10,000 10,000 10,000
8.68% Notes due January 31, 1997..................... 9,997 9,997 9,996
8.67% Notes due March 20, 1997....................... 9,997 9,997 9,996
8.375% Subordinated Notes due May 15, 2002........... 99,690 99,678 99,645
-------- -------- --------
Total long-term debt........................... $214,646 $214,632 $189,590
======== ======== ========
</TABLE>
<PAGE>
PAGE 11
FIRST MARYLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
10. Off-Balance Sheet Derivative Financial Instruments
Trading Instruments
The Corporation maintains active trading positions in a variety of
financial derivatives including foreign exchange and interest rate futures,
interest rate swaps, interest rate caps and floors, forward rate
agreements, and interest rate and foreign exchange options. Many of these
positions are a result of activity generated by corporate customers. The
balance of the positions represent strategic trading decisions of the
Corporation's derivative and foreign exchange traders. The managers and
traders involved in financial derivatives have the technical expertise to
trade these products. The active involvement of the Corporation's traders
in these markets allows the Corporation to offer competitive pricing to
customers and the expertise necessary to advise the Corporation's asset/
liability managers on the proper timing and execution of hedging strategies
for the Corporation's balance sheet.
All trading activity is conducted within the risk limits approved
by the Corporation's Board of Directors. Trading systems are in place
which measure risks and profitability associated with derivative trading
positions as market movements occur. An independent risk control unit
monitors these risks. The results are reported daily and reviewed by the
Corporation's Asset/Liability Committee and the Executive Committee of the
Board of Directors on a monthly basis.
<TABLE>
The following table presents the notional amounts and fair values
of the classes of trading instruments at March 31, 1995 as well as the
average fair values for the three months ended March 31, 1995.
<CAPTION>
Fair Values
---------------------------
Average
Notional Three Months
Amounts End-of-Period Ended
------------- ------------ -------------
(in thousands)
<S> <C> <C> <C>
Interest Rate Contracts
Interest Rate Swaps $489,967
In a receivable position $5,157 $6,254
In a payable position (2,619) (3,710)
Interest Rate Caps/Floors 397,695
Interest rate caps/floors held 1,989 2,287
Interest rate caps/floors written (2,001) (2,308)
Futures 172,500
In a favorable position 98 -
In an unfavorable position (107) -
Foreign Exchange Contracts
Options 163,656
Options held 1,269 258
Options written (1,269) (163)
Forwards 544,098
In a favorable position 1,839 1,182
In an unfavorable position (866) (852)
</TABLE>
<PAGE>
PAGE 12
FIRST MARYLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
Net Trading Income
<TABLE>
The following table summarizes the Corporation's net trading income
by category of instrument. Net trading income is included in the income
statement as a component of other noninterest income.
<CAPTION>
Three Months
Ended
March 31, 1995
--------------
(in thousands)
<S> <C>
Interest rate contracts:
Interest rate swaps................ $108
Futures............................ (683)
Interest rate caps & floors........ 32
Securities......................... 294
-------
(249)
-------
Foreign exchange contracts:
Spot and forward contracts.............. $1,794
Futures................................. (158)
Options................................. (651)
Miscellaneous........................... 4
-------
989
-------
Total net trading income.......... $740
=======
</TABLE>
Risk Management Instruments
Derivative financial instruments are an integral part of the
Corporation's risk management process. Derivatives allow the
Corporation to modify the repricing or maturity characteristics of
assets and liabilities in a cost-efficient manner. This flexibility
helps the Corporation to achieve liquidity, capital, and interest rate
risk objectives.
Derivatives fluctuate in value as interest rates rise or fall, just
as on-balance sheet assets and liabilities fluctuate in value.
Derivatives are used to modify the characteristics of assets or liabilities
to which they are designated as well as to provide basis risk protection.
For example, the Corporation utilizes interest rate swaps to convert
fixed rate assets to floating rate assets or vice versa. When the
Corporation uses swaps to match/fund fixed rate term loans to customers,
the Corporation is converting the fixed rate loans to floating rate loans
that better match the floating rate deposits received from core customers.
Interest rate swaps also are used to convert floating rate liabilities
to fixed rate liabilities or vice versa. Interest rate swaps designated
to certain liabilities are used to extend the period over which the
Corporation's short-term deposits reprice, thus locking in fixed rates.
This offers protection against liabilities repricing faster than assets
during periods of rising interest rates. Interest rate swaps sold as
liability hedges are used to adjust fixed rate long-term deposits to
floating rate deposits. The Corporation receives a fixed rate on this
type of swap that offsets the fixed rate paid on the term deposits thus
converting the deposits to a floating rate. By issuing long-term deposits,
the Corporation increases its overall liquidity. Customer demand for
long-term deposits is primarily fixed rate. Interest rate swaps allow the
Corporation to swap fixed rate liabilities for floating rate liabilities
when appropriate for interest rate sensitivity purposes.
The Corporation also utilizes interest rate swaps to extend the
period over which floating rate assets (e.g. prime rate loans) reprice
thus locking in a fixed rate. This strategy is used to reduce the asset
sensitivity of the balance sheet or to better match maturities of assets
or liabilities. Basis swaps are sometimes utilized to protect the interest
rate spread between assets and liabilities that are repriced based on
different indexes. Prime rate loans are often funded by liabilities that
reset off of a CD index, treasury index, or LIBOR. Basis swaps lock in
the spread between different indexes during the life of the swaps. These
swaps transfer the basis risk to third parties willing to assume the risk
and allow the Corporation to lock in interest rate spreads between certain
assets and liabilities.
<PAGE>
PAGE 13
FIRST MARYLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
<TABLE>
The following table presents the notional amounts and fair values
for the risk management instruments entered into by the Corporation at
March 31, 1995 as well as the weighted average maturity and weighted
average receive and pay rates for the instruments.
<CAPTION>
Weighted
Average Weighted Average Rate
Notional Maturity ---------------------------
Amount in Years Receive Pay Fair Value
------------ ------------ ----------- ----------- ------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
Designated to Assets
--------------------
Interest rate swaps sold
------------------------
Convert floating rate to fixed rate $175,000 1.19 6.11% 6.27% ($1,239)
--------
Carrying amount (2) 10,297
Unrealized gross gains -
Unrealized gross losses (11,536)
Interest rate swaps purchased
-----------------------------
Convert fixed rate to floating rate 40,450 5.23 6.23 6.32 1,246
--------
Carrying amount (2) (112)
Unrealized gross gains 1,358
Unrealized gross losses -
Interest rate swaps purchased forward
-------------------------------------
Convert fixed rate to floating rate 12,657 5.01 - 5.98 (1) 566
--------
Unrealized gross gains 566
Unrealized gross losses -
Designated to Liabilities
-------------------------
Interest rate swaps sold
------------------------
Convert fixed rate to floating rate 164,000 2.13 7.54 6.31 674
--------
Unrealized gross gains 1,430
Unrealized gross losses (756)
Interest rate swaps purchased
-----------------------------
Convert floating rate to fixed rate 335,500 0.41 6.32 5.71 1,023
--------
Unrealized gross gains 1,100
Unrealized gross losses (77)
Interest rate caps purchased
----------------------------
Cap floating rate at strike level 253,300 2.11 Cap - 13.50% (3) -
--------
Carrying amount (2) 65
Unrealized gross gains -
Unrealized gross losses (65)
Call options purchased 12,536 2.07 - - -
--------------------- --------
Carrying amount (2) 974
Unrealized gross gains -
Unrealized gross losses (974)
</TABLE>
<PAGE>
PAGE 14
FIRST MARYLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
<TABLE>
<CAPTION>
Weighted
Average Weighted Average Rate
Notional Maturity ---------------------------
Amount in Years Receive Pay Fair Value
------------ ------------ ----------- ----------- ------------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
Basis swap
----------
Convert floating rate to different
index $30,000 3.94 5.83% 6.11% ($1,776)
--------
Unrealized gross gains -
Unrealized gross losses (1,776)
<FN>
(1) Represents a forward pay rate.
(2) Carrying amounts represent deferred losses on the early termination
of interest rate swaps sold, $10,297,000; deferred fees on the
redesignation of an interest rate swap purchased, ($112,000);
deferred premiums on interest rate caps purchased, $65,000; and
deferred premiums on call options purchased, $974,000.
(3) Pays interest if interest rates exceed 13.50%.
</TABLE>
<PAGE>
PAGE 15
FIRST MARYLAND BANCORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS-(Continued)
(Unaudited)
<TABLE>
The following table summarizes the estimated maturities of the risk
management instruments entered into by the Corporation at March 31, 1995.
<CAPTION>
1 Year 1-5 5-10
or Less Years Years Total
------------ ------------ ----------- -----------
(dollars in thousands)
<S> <C> <C> <C> <C>
Designated to Assets
--------------------
Notional amount $ - $190,000 $38,107 $228,107
Weighted average receive rate - % 6.12% 6.19% 6.13%
Estimated fair value - (271) 844 573
Designated to Liabilities
-------------------------
Notional amount $402,944 $362,392 $ - $765,336
Weighted average receive rate 6.62% 7.13% - % 6.72%
Estimated fair value 1,326 371 - 1,697
Basis Swap
-----------
Notional amount $ - $30,000 $ - $30,000
Weighted average receive rate - % 5.83% - % 5.83%
Estimated fair value - (1,776) - (1,776)
</TABLE>
<TABLE>
The following table summarizes the activity of the risk management
instruments entered into by the Corporation, by notional amounts, for
the three months ended March 31, 1995.
<CAPTION>
Designated to Designated to Basis
Assets Liabilities Swap Total
------------- ------------ -------- -----
(in thousands)
<S> <C> <C> <C> <C>
Balance at beginning of year........... $228,107 $857,761 $30,000 $1,115,868
Additions.............................. - 25,275 - 25,275
Maturities/amortizations............... - (117,700) - (117,700)
-------- -------- -------- ----------
Balance at March 31.................... $228,107 $765,336 $30,000 $1,023,443
======== ======== ======== ==========
</TABLE>
Deferred losses on the early termination of interest rate swaps with
notional balances of $200.0 million designated to the Corporation's prime
based commercial loans were $10.3 million as of March 31, 1995. These
losses are scheduled to be amortized into income in the following periods:
$2.6 million in 1995, $3.4 million in 1996, $3.4 million in 1997, and
$858,000 in 1998.
As of March 31, 1995, the off-balance sheet derivative financial
instruments entered into for risk management purposes by the Corporation
had the following impact on the components of net interest income: gross
interest income decreased $940,000 and gross interest expense decreased
$955,000 which resulted in a $15,000 increase in net interest income.
<PAGE>
PAGE 16
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Earnings Summary
The net income of First Maryland Bancorp (the "Corporation") for
the three months ended March 31, 1995 was $28.5 million compared
to $26.1 million for the three months ended March 31, 1994. Return
on average assets and return on average total equity were 1.24%
and 11.02%, respectively, for the three months ended March 31, 1995
compared with 1.08% and 10.71% for the three months ended March 31,
1994.
<TABLE>
Table 1 Selected Quarterly Financial Information
<CAPTION>
1st Quarter 4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
1995 1994 1994 1994 1994
----------- ----------- ----------- ----------- -----------
(dollars in thousands)
<S> <C> <C> <C> <C> <C>
CONSOLIDATED SUMMARY OF OPERATIONS:
Net interest income (fully tax equivalent)........ $99,954 $99,461 $96,858 $97,191 $95,293
Tax equivalent adjustment......................... 2,333 2,393 2,519 2,617 2,627
-------- -------- -------- -------- --------
Net interest income............................... 97,621 97,068 94,339 94,574 92,666
Provision for credit losses....................... 4,000 2,000 5,998 5,999 8,999
-------- -------- -------- -------- --------
Net interest income after provision for credit
losses.......................................... 93,621 95,068 88,341 88,575 83,667
Noninterest income................................ 46,616 44,026 55,683 53,482 57,787
Noninterest expenses.............................. 96,442 95,640 100,677 98,259 101,625
-------- -------- -------- -------- --------
Income before income taxes........................ 43,795 43,454 43,347 43,798 39,829
Income tax expense................................ 15,259 14,967 14,820 15,728 13,773
-------- -------- -------- -------- --------
Net income........................................ $28,536 $28,487 $28,527 $28,070 $26,056
======== ======== ======== ======== ========
Dividends declared on preferred stock............. $2,955 $2,955 $2,955 $2,955 $2,955
CONSOLIDATED AVERAGE BALANCES:
Total assets...................................... 9,313,200 9,143,600 9,153,100 9,556,600 9,802,100
Loans, net of unearned income..................... 5,519,700 5,391,700 5,326,700 5,240,800 5,203,200
Deposits.......................................... 6,600,900 6,573,500 6,530,900 6,743,800 6,695,500
Long-term debt.................................... 214,600 214,600 197,800 189,600 189,600
Common stockholder's equity....................... 905,000 883,800 865,200 835,500 841,500
Stockholders' equity.............................. 1,049,800 1,028,600 1,010,000 980,300 986,300
CONSOLIDATED RATIOS:
Return on average assets.......................... 1.24% 1.24% 1.24% 1.18% 1.08%
Return on average total stockholders' equity...... 11.02 10.99 11.21 11.49 10.71
Return on average common stockholder's equity..... 11.46 11.46 11.73 12.06 11.13
Average stockholders' equity to average total
assets.......................................... 11.27 11.25 11.04 10.26 10.06
Capital to risk-adjusted assets:
Tier 1.......................................... 14.03 14.05 13.71 13.70 12.95
Total........................................... 17.53 17.68 17.35 17.38 16.59
Tier 1 leverage ratio............................. 11.15 11.05 10.75 10.12 9.60
Net interest margin............................... 4.74 4.70 4.60 4.43 4.32
Net charge-offs to average loans, net of average
unearned income (annualized).................... 0.41 0.70 0.45 0.36 0.72
Allowance for credit losses to period end loans,
net of unearned income.......................... 3.35 3.50 3.67 3.81 3.80
Nonperforming assets to period end loans, net of
unearned income plus other foreclosed assets
owned........................................... 1.10 1.35 1.59 1.88 2.28
</TABLE>
<PAGE>
PAGE 17
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations-(Continued)
Net Interest Income and Net Interest Margin
Net interest income on a fully tax equivalent basis for the three
months ended March 31, 1995 of $100.0 million increased $4.7 million
(4.9%) when compared to net interest income of $95.3 million for the
three months ended March 31, 1994. This increase was primarily due to
higher yields on average earning assets partially offset by an increase
in the interest rates paid on interest bearing liabilities. These
positive rate variances were partially offset by a decline in average
earning assets of $402.1 million, primarily resulting from a $446.4
million decrease in investment securities. In addition, interest
bearing liabilities declined $442.6 million, resulting in a smaller
average balance sheet relative to 1994. The net interest margin for
the three months ended March 31, 1995 was 4.74%, compared to 4.32%
for the three months ended March 31, 1994.
An analysis of fully tax equivalent net interest income, interest rate
spreads and net interest margins for the three months ended March 31, 1995
and 1994 is presented in the following table.
<TABLE>
Table 2 Net Interest Income, Interest Rate Spread and Net Interest Margin on Average Earning Assets
(Tax Equivalent Basis)
<CAPTION>
Three Months ended March 31,
-----------------------------------------------------------------------
1995 1994
----------------------------------- -------------------------------
Average Yield/ Average Yield/
balance Interest rate balance Interest rate
-------- -------- -------- -------- -------- --------
(dollars in millions)
<S> <C> <C> <C> <C> <C> <C>
Investment securities (1).............. $2,419.0 $38.3 6.42% $2,865.4 $44.0 6.23%
Loans held-for-sale.................... 48.4 1.0 8.56 152.6 2.8 7.49
Loans, net of unearned income.......... 5,519.7 122.0 8.97 5,203.2 100.5 7.84
Other earning assets................... 563.8 8.2 5.85 731.8 6.1 3.38
------- ------ ------- ------
Earning assets......................... $8,550.9 169.5 8.04 $8,953.0 153.4 6.95
======== ------ ======== ------
Interest bearing liabilities........... 6,405.9 69.5 4.40 6,848.5 58.1 3.44
Interest rate spread (2)............... 3.64 3.51
Interest free sources utilized
to fund earning assets............... 2,145.0 2,104.5
------- ------ ------- ------
Total sources of funds................. $8,550.9 69.5 3.30 $8,953.0 58.1 2.63
======== ------ ======== ------
Net interest income.................... $100.0 $95.3
====== ======
Net interest margin (3)................ 4.74% 4.32%
==== ====
<FN>
(1) Includes investment securities available-for-sale at amortized cost and investment securities held-to-maturity.
(2) Interest rate spread is the difference between the yield on average earning assets (tax equivalent basis)
and the rate paid on average interest bearing liabilities.
(3) Net interest margin is the difference between the ratio of interest income to average earning assets and the
ratio of interest expense to average earning assets.
</TABLE>
Provision for Credit Losses
The provision for credit losses for the first quarter of 1995
totaled $4.0 million compared to $9.0 million for the first quarter
of 1994, a decrease of $5.0 million (55.6%). This decrease is primarily
due to improved credit loss trends.
<PAGE>
PAGE 18
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations-(Continued)
Noninterest Income
<TABLE>
The following table presents the components of noninterest income
for the three months ended March 31, 1995 and 1994.
Table 3 Noninterest Income
<CAPTION>
Three months ended March 31,
----------------------------------
Percent
Change
1995 1994 1995/1994
------- ------- -----------
(dollars in thousands)
<S> <C> <C> <C>
Service charges on deposit accounts.... $17,446 $18,253 (4.4%)
Trust fees............................. 5,099 5,138 (0.8)
Bankcard charges and fees.............. 4,246 4,378 (3.0)
Servicing income from securitized
assets, net.......................... 4,146 5,476 (24.3)
Mortgage banking income................ 4,010 3,313 21.0
Securities gains, net.................. 314 11,200 (97.2)
Other income:
Security sales and fees.............. 1,885 1,631 15.6
Customer service fees................ 1,753 2,398 (26.9)
Other................................ 7,717 6,000 28.6
------- ------- -----
Total other income..................... 11,355 10,029 13.2
------- ------- -----
Total noninterest income........ $46,616 $57,787 (19.3)
======= ======= =======
</TABLE>
The Corporation's noninterest income for the first quarter of 1995
decreased $11.2 million (19.3%) when compared to the first quarter of 1994.
Service charges on deposits decreased $807,000 (4.4%) due to lower
service charges on business checking accounts, partially offset by higher
NSF fees on personal checking accounts. Servicing income from securitized
assets decreased $1.3 million (24.3%) as a result of lower levels of
excess servicing income due to an increase in the interest rates paid
to investors and the repricing of the Corporation's securitized bankcard
receivables portfolio, partially offset by lower credit losses on the
Corporation's securitized manufactured housing receivables portfolio.
Mortgage banking income increased $697,000 (21.0%) due to increased gains
on the sale of bulk servicing of $2.2 million partially offset by lower
gains on the sale of flow-through servicing of $1.6 million. Securities
gains of $314,000 were recorded in the first quarter of 1995 compared to
$11.2 million in securities gains in the first quarter of 1994.
Securities sales are discussed in detail under "Changes in Financial
Position." Total other income increased $1.3 million (13.2%) due to
$827,000 in nonaccrual fee and interest payments received on two loans
which were previously paid off and a $388,000 increase in leasing residual
gains.
<PAGE>
PAGE 19
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations-(Continued)
Noninterest Expenses
<TABLE>
The following table presents the components of noninterest expense
for the three months ended March 31, 1995 and 1994.
Table 4 Noninterest Expenses
<CAPTION>
Three months ended March 31,
----------------------------------
Percent
Change
1995 1994 1995/1994
------- ------- -----------
(dollars in thousands)
<S> <C> <C> <C>
Salaries and wages..................... $40,962 $38,908 5.3%
Other personnel costs.................. 10,570 17,424 (39.3)
Equipment costs........................ 8,132 6,960 16.8
Net occupancy costs.................... 7,928 8,147 (2.7)
Other operating expenses:
Advertising and public relations..... 4,795 3,612 32.8
External processing fees............. 4,569 3,536 29.2
Regulatory fees and insurance........ 3,937 4,109 (4.2)
Postage and communications........... 3,553 3,426 3.7
Professional fees.................... 1,922 3,555 (45.9)
Lending and collection............... 1,891 3,104 (39.1)
Other real estate expense............ 117 (17) -
Other................................ 8,066 8,861 (9.0)
------ ------ -----
Total other operating expenses..... 28,850 30,186 (4.4)
------ ------ -----
Total noninterest expenses..... $96,442 $101,625 (5.1)
======= ======= =======
</TABLE>
The Corporation's noninterest expenses for the first quarter of
1995 decreased $5.2 million (5.1%) when compared to the first quarter
of 1994. Salaries and wages increased $2.1 million (5.3%) primarily
due to a $1.9 million increase in regular salary expense. Other
personnel costs decreased $6.9 million (39.3%) primarily due to
a $4.5 million accrual for executive retirements in the first quarter
of 1994. In addition, pension costs declined $1.4 million due to
changes in actuarial assumptions and healthcare costs decreased $520,000.
Equipment costs increased $1.2 million (16.8%) as a result of increases
in depreciation expense and computer hardware and software maintenance
expenses. Advertising and public relations expense increased $1.2 million
(32.8%) primarily due to a first quarter 1995 bankcard solicitation.
External processing fees increased $1.0 million (29.2%) as a result of
increased transaction volumes. Professional fees decreased $1.6 million
(45.9%) primarily due to a decline in consulting expenses associated
with a trust system conversion and a corporate reengineering project of
$566,000 and $353,000, respectively and a $356,000 decrease in legal
fees. Lending and collection expenses decreased $1.2 million (39.1%)
due to the payment of performance incentives to the subservicer of the
Corporation's manufactured housing receivables in the first quarter of
1994 of $524,000 and a decline in legal fees for collection services of
$439,000.
<PAGE>
PAGE 20
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations-(Continued)
Changes in Financial Position
Investment Securities
Available-for-Sale Portfolio
Investment securities available-for-sale increased $8.5 million
from December 31, 1994 to March 31, 1995. In the first quarter of
1995, $35.0 million in U. S. Treasury securities were sold, resulting
in a gain of $312,000. Paydowns, maturities and/or calls on the
available-for-sale securities totaled $41.6 million in the first three
months of 1995. These decreases in the portfolio were partially offset
by $59.9 million in purchases which included the following: $38.2
million in U.S. Treasury securities, $9.2 million in mortgage-backed
obligations of Federal agencies, $2.0 million in obligations of state
and political subdivisions, $3.6 million in other debt securities and
$6.9 million in equity securities. The fair value of the available-for-
sale portfolio at March 31, 1995 was $17.8 million below the amortized
cost compared to a fair value at December 31, 1994 which was $43.0 million
below the amortized cost. This change in the fair value resulted in a
$15.7 million adjustment (net of income tax) to the unrealized losses
on available-for-sale securities which is included as a component of
stockholders' equity. Table 5 provides information on the gross
unrealized gains and losses of the available-for-sale portfolio at
March 31, 1995.
Investment securities available-for-sale decreased $114.2 million
from March 31, 1994 to March 31, 1995. Paydowns, maturities and/or
calls totaled $156.3 million during this period and $61.6 million in
securities were sold resulting in gains of $4.4 million. Partially
offsetting these declines were securities purchases of $120.8 million.
The fair value of the available-for-sale portfolio was $17.8 million
below the amortized cost at March 31, 1995 compared to a fair value
which was $7.8 million above the amortized cost at March 31, 1994.
Held-to-Maturity Portfolio
Investment securities held-to-maturity increased $136.6 million from
December 31, 1994 to March 31, 1995. This increase is the result of
$204.1 million in purchases in the first quarter of 1995 which included
$200.6 million in collateralized mortgage obligations and $3.5 million
in U.S. Treasury securities. These purchases were partially offset by
$66.9 million in paydowns and/or maturities. The fair value of the
held-to-maturity portfolio at March 31, 1995 was $39.3 million below the
amortized cost. Table 6 provides information on the gross unrealized
gains and losses of the held-to-maturity portfolio at March 31, 1995.
Investment securities held-to-maturity decreased $108.5 million from
March 31, 1994 to March 31, 1995. Paydowns and/or maturities totaled
$295.3 million during this period. In addition, $20.4 million in
securities were sold in the third quarter of 1994 resulting in gains
of $28,000 due to the dissolution of a nonbanking subsidiary of the
Corporation. Partially offsetting these declines were $219.8 million
in purchases of securities.
<PAGE>
PAGE 21
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations-(Continued)
<TABLE>
The amortized cost and fair values of the available-for-sale securities at
March 31, 1995 are shown in the following table.
Table 5 Available-for-Sale Portfolio
<CAPTION>
March 31, 1995
-------------------------------------------------
Gross Gross
Amortized unrealized unrealized Fair
Cost gains losses Value
---------- ---------- ---------- ----------
(in thousands)
<S> <C> <C> <C> <C>
U.S. Treasury and U.S. Government agencies........... $52,480 $2 ($1,652) $50,830
Mortgage-backed obligations of
Federal agencies.................................. 760,260 1,006 (28,830) 732,436
Collateralized mortgage obligations:
Issued by Federal agencies........................ 13,630 - (152) 13,478
Privately issued.................................. 1,043 9 - 1,052
Obligations of states and political
subdivisions...................................... 188,027 8,790 (1,090) 195,727
Other debt securities................................ 4,749 - - 4,749
Equity securities.................................... 28,798 4,276 (181) 32,893
--------- --------- --------- ---------
Total.......................................... $1,048,987 $14,083 ($31,905) $1,031,165
========== ========== ========== ==========
</TABLE>
<TABLE>
The amortized cost and fair values of the held-to-maturity securities
at March 31, 1995 are shown in the following table.
Table 6 Held-to-Maturity Portfolio
<CAPTION>
March 31, 1995
-------------------------------------------------
Gross Gross
Amortized unrealized unrealized Fair
Cost gains losses Value
---------- ---------- ---------- ----------
(in thousands)
<S> <C> <C> <C> <C>
U.S. Treasury and U.S. Government agencies........... $745,162 $407 ($20,224) $725,345
Mortgage-backed obligations of
Federal agencies.................................. 156,500 333 (4,482) 152,351
Collateralized mortgage obligations:
Issued by Federal agencies........................ 517,939 760 (12,468) 506,231
Privately issued.................................. 54,244 - (3,620) 50,624
Other debt securities................................ 1,000 - - 1,000
--------- --------- --------- ---------
Total.......................................... $1,474,845 $1,500 ($40,794) $1,435,551
========== ========== ========== ==========
</TABLE>
<PAGE>
PAGE 22
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations-(Continued)
Loan Portfolio
Total loans, net of unearned income increased to $5.7 billion at
March 31, 1995 from $5.5 billion at December 31, 1994. This $198.4
million (3.6%) increase represents a positive change in corporate
lending, as well as a continuation of growth in the retail sector,
particularly residential mortgages.
Slightly more than 41% of the total increase in the loan portfolio
occurred in the Corporation's commercial loan portfolio which increased
$81.9 million (5.0%). Most of the growth for the period occurred in the
Multinational sector where demand has increased.
Total retail loan growth slowed down slightly this quarter,
increasing $13.1 million (1.3%). During most of 1994, the Corporation's
retail customers borrowed heavily in response to a well positioned second
mortgage product. In the first two months of 1995, this pattern continued
and most of the increase in retail loans was a result of second mortgage
loans funding from the backlog.
The growth of residential mortgages for the first quarter of 1995,
$51.4 million (8.7%), can be attributed to well positioned products and
strong marketing efforts. Bankcard receivables declined in the first
quarter of 1995 by $7.7 million (1.5%) reflecting normal borrowing
patterns of heavy purchasing for the holiday season followed by payment
activity in the first quarter.
The Corporation's commercial real estate loans, comprising 22.0% of
total loans, were flat for the first quarter of 1995. The commercial
mortgage portfolio, however, declined $6.5 million (0.7%) as a result of
payouts exceeding new business. The increase in construction mortgages
of $6.6 million (2.5%) was primarily the result of normal draw activity.
Market conditions in general continue to reflect gradual improvement.
The commercial real estate portfolio continues to be well-balanced by
property type and geographically centered in the Corporation's regional
marketplace as reflected in Tables 8 and 9.
The Corporation monitors exposure based on industry classifications
and establishes exposure limits that are reviewed by the Board of
Directors. Significant exposures by industry classification in the loan
portfolio are presented in following table.
<TABLE>
Table 7 Significant Exposures by Industry Classification
<CAPTION>
March 31, 1995
----------------------------------------------------
Outstanding Unfunded Total Nonperforming
Balance Commitments Exposure Loans
----------- ----------- ---------- ------------
(in thousands)
<S> <C> <C> <C> <C>
Communications Industries:
Cable............................................. $153,269 $43,079 $196,348 $2,949
Publishing & Newspapers........................... 56,735 26,662 83,397 -
Wireless.......................................... 50,879 25,897 76,776 -
Broadcast......................................... 21,064 10,672 31,736 -
-------- -------- -------- --------
$281,947 $106,310 $388,257 $2,949
-------- -------- -------- --------
Healthcare (1)....................................... $308,300 $75,412 $383,712 $10,110
Transportation (2)................................... $367,410 $37,220 $404,630 $ -
<FN>
----------------
(1) Includes exposure to hospitals and nursing care facilities, both commercial loans and
real estate loans.
(2) Includes loans and leases for vessel, commercial aircraft and railroad equipment financing.
</TABLE>
<PAGE>
PAGE 23
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations-(Continued)
<TABLE>
Table 8 Loans Secured by Real Estate and Other Real Estate Owned by Property Type
<CAPTION>
March 31, 1995
-------------------------------------------------
Total loans
------------------------ Other
Real estate Real estate Nonperforming real estate
construction mortgage loans owned
------------- ----------- ------------- -----------
(in thousands)
<S> <C> <C> <C> <C>
Office buildings..................................... $90,825 $255,074 $2,788 $ -
Industrial warehouse and other commercial
properties......................................... 42,418 174,090 4,019 -
Retail............................................... 75,844 134,016 7,946 88
Hospitals/nursing home medical centers............... 1,902 83,283 - -
Hotels/motels........................................ - 59,795 - 5,000
Commercial land...................................... 45,262 - 109 5,774
Churches, restaurants and other special purpose
properties........................................ 1,910 63,083 601 -
Apartments........................................... - 62,411 9,675 129
Mixed use............................................ 75 42,835 98 -
Residential land..................................... 11,042 - 1,548 1,343
Other land-farm recreational facilities.............. - 9,589 570 -
Residential properties held for resale............... 3,031 959 - -
Miscellaneous........................................ 2,961 86,572 243 -
--------- --------- --------- ---------
Total.......................................... $275,270 $971,707 $27,597 $12,334
========== ========== ========== ==========
</TABLE>
<TABLE>
Table 9 Loans Secured by Real Estate and Other Real Estate Owned by Geographic Region
<CAPTION>
March 31, 1995
-------------------------------------------------
Total loans
----------------------- Other
Real estate Real estate Nonperforming real estate
construction mortgage loans owned
------------- ----------- ------------- -----------
(in thousands)
<S> <C> <C> <C> <C>
Maryland............................................. $203,807 $640,271 $8,961 $8,239
Pennsylvania......................................... 17,563 166,251 9,423 1,499
Virginia............................................. 23,153 40,682 - 2,096
Washington, D.C...................................... 21,003 31,328 - -
Florida.............................................. 9,744 28,474 9,206 500
New Jersey........................................... - 17,188 - -
Delaware............................................. - 8,994 7 -
All other............................................ - 38,519 - -
--------- --------- --------- ---------
Total.......................................... $275,270 $971,707 $27,597 $12,334
========== ========== ========== ==========
</TABLE>
<PAGE>
PAGE 24
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations-(Continued)
Asset Quality
Nonperforming Assets
Nonperforming assets totaled $62.5 million at March 31, 1995,
a decrease of $11.6 million when compared to nonperforming assets of
$74.1 million at December 31, 1994. The most significant changes in
nonperforming assets in the three months ended March 31, 1995 were
paydowns of $6.9 million, loans reclassified to accrual status of
$6.5 million and other real estate owned sales of $1.9 million. These
decreases were partially offset by $3.7 million in additions to
nonperforming assets primarily due to the transfer of loans to nonaccrual
status. The most significant paydowns were on a variety of commercial
and real estate transactions in which cash payments were received on
nonaccrual loans. Loans reclassified to accrual status included a $4.5
million real estate loan which was upgraded from troubled debt
restructuring status and returned to accrual and $2.0 million in
commercial and real estate loans which met the regulatory tests for
return to accrual status.
The following table presents nonperforming assets and accruing
loans which are 90 days past due as to principal or interest on the
dates indicated.
<TABLE>
Table 10 Nonperforming Assets
<CAPTION>
March 31, December 31, March 31,
1995 1994 1994
---------- ------------ ----------
(dollars in thousands)
<S> <C> <C> <C>
Nonaccrual loans
Domestic:
Commercial......................................... $10,415 $13,326 $43,148
Real estate, construction.......................... 1,669 2,709 4,419
Real estate mortgage, commercial................... 25,928 27,633 41,001
Real estate mortgage, residential.................. 4,374 5,250 6,148
Leases receivable.................................. 85 85 846
Foreign.............................................. 5,300 5,300 3,800
-------- -------- --------
Total nonaccrual loans......................... 47,771 54,303 99,362
-------- -------- --------
Restructured loans................................... 444 4,974 172
Other assets owned:
Other real estate.................................. 17,945 18,920 25,033
Valuation reserves................................. (3,845) (4,185) (4,325)
Other assets....................................... 146 118 272
-------- -------- --------
Total other assets owned....................... 14,246 14,853 20,980
-------- -------- --------
Total nonperforming assets......................... $62,461 $74,130 $120,514
======== ======== ========
Nonperforming assets as a percentage of total
loans, net of unearned income plus other
foreclosed assets owned........................... 1.10% 1.35% 2.28%
==== ==== ====
Accruing loans contractually past due
90 days or more as to principal or interest:
Domestic.......................................... $15,006 $13,338 $13,196
======== ======== ========
</TABLE>
<PAGE>
PAGE 25
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations-(Continued)
The following table details certain information relating to the
allowance for credit losses of the Corporation for the three months ended
March 31, 1995 and March 31, 1994, respectively.
<TABLE>
Table 11 Analysis of the Allowance for Credit Losses
<CAPTION>
Three Months ended March 31,
-------------------------------
1995 1994
---------- ----------
(dollars in thousands)
<S> <C> <C>
Allowance at beginning of year....................... $191,024 $200,006
Provision for credit losses.......................... 4,000 8,999
Losses charged off:
Commercial loans................................. (94) (1,037)
Real estate loans, construction.................. - (60)
Real estate loans, mortgage:
Residential.................................... (16) (146)
Commercial..................................... (5) (1,787)
Retail........................................... (763) (1,982)
Bankcard receivables............................. (7,068) (6,896)
Leases receivable................................ (11) (49)
-------- --------
Total losses charged off....................... (7,957) (11,957)
Recoveries of losses previously charged off:
Commercial loans................................. 357 404
Real estate loans, construction.................. - 7
Real estate loans, mortgage:
Residential.................................... 22 15
Commercial..................................... 3 118
Retail........................................... 546 770
Bankcard receivables............................. 1,364 1,244
Leases receivable................................ 69 199
-------- --------
Total recoveries............................... 2,361 2,757
Net losses charged off............................... (5,596) (9,200)
-------- --------
Total allowance at March 31.......................... $189,428 $199,805
======== ========
Average loans, net of average unearned income........ $5,519,715 $5,203,221
========== ==========
Period end loans, net of unearned income............. $5,657,316 $5,255,844
========== ==========
Net charge-offs to average loans, net of average
unearned income (annualized)...................... 0.41% 0.72%
Allowance as a percentage of period end loans, net
of unearned income................................ 3.35 3.80
Allowance as a percentage of nonperforming loans..... 392.88 200.74
</TABLE>
<PAGE>
PAGE 26
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations-(Continued)
Deposits
Total deposits decreased $7.0 million from December 31, 1994 to
March 31, 1995. Core deposits totaled $5.9 billion at March 31, 1995
compared to $6.0 billion at December 31, 1994, reflecting a decrease
of $115.0 million. This decrease is primarily the result of a $63.1
million decrease in commercial noninterest bearing demand deposits,
a $33.3 million decrease in interest bearing demand deposits and a $35.6
million decrease in money market deposits. Purchased deposits, which
include large denomination time and foreign time deposits, increased
$108.1 million.
Total deposits decreased $124.5 million from March 31, 1994 to
March 31, 1995. Core deposits decreased $411.0 million primarily due
to the following declines: $113.5 million in commercial noninterest
bearing demand deposits, $187.2 million in money market deposits and
$87.5 million in other savings deposits. Purchased deposits
increased $286.5 million primarily as a result of a $294.3 million
increase in large denomination time deposits.
<PAGE>
PAGE 27
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations-(Continued)
Capital Resources
The following table details the Corporation's capital components
and ratios at March 31, 1995, December 31, 1994 and March 31, 1994,
based upon the capital requirements of the Federal Reserve Board.
<TABLE>
Table 12 Capital Components
<CAPTION>
March 31, December 31, March 31,
1995 1994 1994
---------- ------------- ----------
(dollars in thousands)
<S> <C> <C> <C>
Preferred stockholders' equity.................................... $144,852 $144,852 $144,803
Common stockholder's equity....................................... 920,272 879,172 832,052
Disallowed intangibles............................................ (39,911) (40,956) (34,820)
Unrealized losses (gains) on investment securities available-
for-sale (1)................................................... 11,250 26,969 (4,731)
-------- -------- --------
Tier 1 capital.................................................... 1,036,463 1,010,037 937,304
-------- -------- --------
Qualifying long-term debt......................................... 105,688 109,676 111,642
Allowance for credit losses (2)................................... 93,567 91,105 91,836
Mandatory convertible securities.................................. 59,962 59,960 59,953
-------- -------- --------
Tier 2 capital.................................................... 259,217 260,741 263,431
-------- -------- --------
Total capital..................................................... $1,295,680 $1,270,778 $1,200,735
========== ========== ==========
Risk-adjusted assets.............................................. $7,389,540 $7,188,442 $7,238,880
========== ========== ==========
Average quarterly assets (regulatory guidelines).................. $9,337,935 $9,180,622 $9,802,098
========== ========== ==========
Risk-based capital ratios:
Tier 1 to risk adjusted assets.................................. 14.03% 14.05% 12.95%
Regulatory minimum.............................................. 4.00 4.00 4.00
Total capital to risk-adjusted assets........................... 17.53 17.68 16.59
Regulatory minimum.............................................. 8.00 8.00 8.00
Leverage ratio.................................................... 11.15 11.05 9.60
<FN>
(1) Not included as Tier 1 capital under current regulatory capital guidelines.
(2) The amount of the allowance for credit losses which is includable as Tier 2 capital is limited
to 1.25% of the risk-adjusted assets less disallowed intangibles.
</TABLE>
Tier 1 and total capital increased $26.4 million and $24.9 million,
respectively, when March 31, 1995 is compared to December 31, 1994
primarily due to $28.5 million in net income partially offset by $3.0
million in dividends declared on preferred stock in the first three months
of 1995. Tier 1 and total capital increased $99.2 million and $94.9
million, respectively, when March 31, 1995 is compared to March 31, 1994
as a result of $113.6 million in net income during this period partially
offset by $11.8 million in dividends declared on preferred stock.
Additional information regarding the Corporation's capital is presented
in the Consolidated Statements of Changes in Stockholders' Equity.
<PAGE>
PAGE 28
<TABLE>
Table 13
First Maryland Bancorp and Subsidiaries
Average Balances, Interest Rates and Yields and Net Interest Margin
(Tax Equivalent Basis)
<CAPTION>
Three Months ended March 31, 1995
-------------------------------------
Average
Average rate/
Balance Interest yield
------- ----------- -----------
(dollars in millions)
<S> <C> <C> <C>
ASSETS
Cash and due from banks.............................. $552.9 $ - - %
Money market investments:
Interest bearing deposits in other banks........... 23.2 0.4 6.62
Trading account securities......................... 56.3 0.9 6.21
Funds sold......................................... 484.3 6.9 5.77
Investment securities available-for-sale:
Taxable securities................................. 842.4 12.3 5.96
Tax-exempt securities(1)........................... 188.3 5.5 11.80
Equity investments................................. 27.6 0.3 4.26
--------- ---------
Total securities available-for-sale (2)......... 1,058.3 18.1 6.95
Investment securities held-to-maturity:
Taxable securities................................. 1,360.7 20.2 6.01
Loans held-for-sale.................................. 48.4 1.0 8.56
Loans, net of unearned income (1,3):
Commercial......................................... 1,647.1 34.8 8.58
Real estate, construction.......................... 267.9 6.0 9.12
Real estate mortgage, commercial................... 984.8 21.2 8.72
Real estate mortgage, residential.................. 623.3 11.1 7.20
Retail............................................. 993.6 21.4 8.73
Bankcard........................................... 489.6 19.2 15.87
Leases receivable.................................. 258.8 3.5 5.57
Foreign............................................ 254.6 4.8 7.69
--------- ---------
Total loans, net of unearned income........... 5,519.7 122.0 8.97
Allowance for credit losses....................... (189.7) - -
---------
Loans, net...................................... 5,330.0 - -
Other assets (4)..................................... 399.1 - -
--------- ---------
Total assets/interest income.................... $9,313.2 $169.5
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits in domestic offices:
Noninterest bearing demand......................... $1,703.2 $ - - %
---------
Interest bearing demand............................ 521.3 3.0 2.31
Money market accounts.............................. 1,217.6 10.4 3.02
Savings........................................... 1,075.5 7.2 2.71
Other consumer time................................ 1,424.9 16.8 4.18
Large denomination time............................ 543.9 8.0 4.58
Deposits in foreign banking offices.................. 114.5 1.6 6.07
--------- ---------
Total interest bearing deposits................. 4,897.7 47.0 3.39
--------- ---------
Total deposits.................................. 6,600.9 - -
Funds purchased...................................... 724.6 10.0 3.44
Other borrowed funds, short-term..................... 569.0 7.8 4.92
Other liabilities.................................... 154.2 - -
Long-term debt (5)................................... 214.6 4.7 8.93
Stockholders' equity................................. 1,049.9 - -
--------- ---------
Total liabilities and stockholders'
equity/interest expense...................... $9,313.2 $69.5
======== ========
Earning assets/interest income....................... $8,550.9 $169.5 8.04%
Interest bearing liabilities/interest expense........ 6,405.9 69.5 4.40
Earning assets/interest expense...................... 8,550.9 69.5 3.30
Net interest spread (6).............................. 3.64%
=====
Net interest margin (7).............................. 4.74%
=====
<FN>
----------------
(1) Interest on loans to and obligations of public entities is not subject to Federal income tax.
In order to make pre-tax yields comparable to taxable loans and investments, a tax equivalent
adjustment is used based on a 35% Federal tax rate.
(2) Yields on investment securities available-for-sale are calculated based upon average amortized cost.
(3) Nonaccrual loans are included under the appropriate loan categories as earning assets.
(4) Includes overdrafts excluded from average loan balances for yield purposes.
(5) Includes current portion of long-term debt.
(6) Net interest spread is the difference between the yield on average earning assets (tax equivalent
basis) and the rate paid on average interest bearing liabilities.
(7) Net interest margin is the difference between the ratio of interest income to average earning assets
and the ratio of interest expense to average earning assets.
</TABLE>
<PAGE>
PAGE 29
<TABLE>
Table 14
First Maryland Bancorp and Subsidiaries
Average Balances, Interest Rates and Yields and Net Interest Margin
(Tax Equivalent Basis)
<CAPTION>
Three Months ended December 31, 1994
------------------------------------
Average
Average rate/
Balance Interest yield
------- ----------- -----------
(dollars in millions)
<S> <C> <C> <C>
ASSETS
Cash and due from banks.............................. $567.4 $ - - %
Money market investments:
Interest bearing deposits in other banks........... 13.5 0.2 6.60
Trading account securities......................... 46.0 0.7 6.13
Funds sold......................................... 429.0 5.6 5.16
Investment securities available-for-sale:
Taxable securities................................. 858.4 11.0 5.10
Tax-exempt securities(1)........................... 184.7 5.4 11.55
Equity investments................................. 24.0 0.2 3.40
--------- ---------
Total securities available-for-sale (2)......... 1,067.1 16.6 6.18
Investment securities held-to-maturity:
Taxable securities................................. 1,364.8 20.3 5.89
Loans held-for-sale.................................. 79.6 1.6 8.03
Loans, net of unearned income (1,3):
Commercial......................................... 1,641.2 35.5 8.59
Real estate, construction.......................... 270.2 6.0 8.75
Real estate mortgage, commercial................... 963.1 21.0 8.64
Real estate mortgage, residential.................. 577.3 10.0 6.88
Retail............................................. 963.2 20.3 8.36
Bankcard........................................... 477.5 18.5 15.33
Leases receivable.................................. 244.2 3.6 5.89
Foreign............................................ 255.0 4.4 6.82
--------- ---------
Total loans, net of unearned income........... 5,391.7 119.3 8.77
Allowance for credit losses....................... (193.9) - -
---------
Loans, net...................................... 5,197.8 - -
Other assets (4)..................................... 378.4 - -
--------- ---------
Total assets/interest income.................... $9,143.6 $164.3
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits in domestic offices:
Noninterest bearing demand......................... $1,687.5 $ - - %
---------
Interest bearing demand............................ 529.4 3.1 2.30
Money market accounts.............................. 1,252.5 10.1 3.22
Savings........................................... 1,100.9 7.6 2.73
Other consumer time................................ 1,430.7 16.0 4.43
Large denomination time............................ 487.4 8.1 6.60
Deposits in foreign banking offices.................. 85.1 1.3 5.96
--------- ---------
Total interest bearing deposits................. 4,886.0 46.2 3.75
--------- ---------
Total deposits.................................. 6,573.5 - -
Funds purchased...................................... 552.5 7.0 5.07
Other borrowed funds, short-term..................... 615.2 6.9 4.45
Other liabilities.................................... 159.2 - -
Long-term debt (5)................................... 214.6 4.7 8.68
Stockholders' equity................................. 1,028.6 - -
--------- ---------
Total liabilities and stockholders'
equity/interest expense...................... $9,143.6 $64.8
======== ========
Earning assets/interest income....................... $8,391.7 $164.3 7.77%
Interest bearing liabilities/interest expense........ 6,268.3 64.8 4.10
Earning assets/interest expense...................... 8,391.7 64.8 3.07
Net interest spread (6).............................. 3.67%
=====
Net interest margin (7).............................. 4.70%
=====
<FN>
----------------
(1) Interest on loans to and obligations of public entities is not subject to Federal income tax.
In order to make pre-tax yields comparable to taxable loans and investments, a tax equivalent
adjustment is used based on a 35% Federal tax rate.
(2) Yields on investment securities available-for-sale are calculated based upon average amortized cost.
(3) Nonaccrual loans are included under the appropriate loan categories as earning assets.
(4) Includes overdrafts excluded from average loan balances for yield purposes.
(5) Includes current portion of long-term debt.
(6) Net interest spread is the difference between the yield on average earning assets (tax equivalent
basis) and the rate paid on average interest bearing liabilities.
(7) Net interest margin is the difference between the ratio of interest income to average earning assets
and the ratio of interest expense to average earning assets.
</TABLE>
<PAGE>
PAGE 30
Part II - Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The following exhibit is furnished to this Form 10-Q:
(27) Financial Data Schedule
(b) Reports on Form 8-K
There were no Current Reports on Form 8-K filed during the
the quarter ended March 31, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
First Maryland Bancorp
May 12, 1995 BY /s/ Robert W. Schaefer
----------------------------
Robert W. Schaefer
Executive Vice President and
Chief Financial Officer
May 12, 1995 BY /s/ James A. Smith
----------------------------
James A. Smith
Senior Vice President and
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FIRST MARYLAND BANCORP MARCH 31, 1995 FINANCIAL STATEMENTS AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 523,747
<INT-BEARING-DEPOSITS> 45,381
<FED-FUNDS-SOLD> 145,141
<TRADING-ASSETS> 56,559
<INVESTMENTS-HELD-FOR-SALE> 1,031,165
<INVESTMENTS-CARRYING> 1,474,845
<INVESTMENTS-MARKET> 1,435,551
<LOANS> 5,657,316
<ALLOWANCE> 189,428
<TOTAL-ASSETS> 9,250,814
<DEPOSITS> 6,626,564
<SHORT-TERM> 1,171,860
<LIABILITIES-OTHER> 155,130
<LONG-TERM> 214,646
<COMMON> 84,926
0
30,000
<OTHER-SE> 950,198
<TOTAL-LIABILITIES-AND-EQUITY> 9,250,814
<INTEREST-LOAN> 121,461
<INTEREST-INVEST> 36,548
<INTEREST-OTHER> 9,157
<INTEREST-TOTAL> 167,166
<INTEREST-DEPOSIT> 47,006
<INTEREST-EXPENSE> 69,545
<INTEREST-INCOME-NET> 97,621
<LOAN-LOSSES> 4,000
<SECURITIES-GAINS> 314
<EXPENSE-OTHER> 96,442
<INCOME-PRETAX> 43,795
<INCOME-PRE-EXTRAORDINARY> 43,795
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 28,536
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<YIELD-ACTUAL> 4.74
<LOANS-NON> 47,771
<LOANS-PAST> 15,006
<LOANS-TROUBLED> 444
<LOANS-PROBLEM> 41,960
<ALLOWANCE-OPEN> 191,024
<CHARGE-OFFS> 7,957
<RECOVERIES> 2,361
<ALLOWANCE-CLOSE> 189,428
<ALLOWANCE-DOMESTIC> 92,427
<ALLOWANCE-FOREIGN> 13,420
<ALLOWANCE-UNALLOCATED> 83,581
</TABLE>
