SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended Commission File No.
March 31, 1996 1-10534
FIRST OF AMERICA BANK CORPORATION
(Exact name of Registrant as specified in its Charter)
Michigan 38-1971791
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
211 South Rose Street, Kalamazoo, Michigan 49007
(Address of principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code
616-376-9000
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.
Class Outstanding at
Common Stock, April 30, 1996
$10 Par Value 61,599,788<PAGE>
FIRST OF AMERICA BANK CORPORATION
INDEX
PART I. FINANCIAL INFORMATION Page
No.
Consolidated Balance Sheets (Unaudited),
March 31, 1996 and December 31, 1995 . . . 1
Consolidated Statements of Income
(Unaudited) - Three Months Ended March 31, 2
1996 and 1995. . . . . . . . . . . . . . .
Consolidated Statements of Cash Flows
(Unaudited) - Three Months Ended March 31,
1996 and 1995 . . . . . . . . . . . . . . 3
Notes to Consolidated Financial Statements
(Unaudited) . . . . . . . . . . . . . . . 4
Management's Discussion and Analysis of
Financial Condition and Results of
Operations . . . . . . . . . . . . . . . . 6
PART II. OTHER INFORMATION<PAGE>
<TABLE>
<CAPTION>
FIRST OF AMERICA BANK COPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
March 31 December 31
($ In thousands) 1996 1995
- ------------------------------- --------- ---------
<S> <C> <C>
ASSETS
Cash and due from banks $ 958,653 1,207,062
Money market investments 31,463 269,737
Securities:
Securities available for sale, amortized cost of $4,997,403 at
March 31, 1996 and $5,020,954 at December 31, 1995 5,003,079 5,060,746
Loans, net of unearned income:
Consumer 4,226,076 4,504,255
Commercial, financial and agricultural 2,628,261 2,589,038
Commercial real estate 3,863,232 3,812,001
Residential real estate 4,865,562 5,070,369
Loans held for sale, market value of $154,189 at March 31, 1996
and $104,132 at December 31, 1995 152,003 101,279
----------- -----------
Total loans 15,735,134 16,076,942
Less: Allowance for loan losses 245,207 241,182
----------- -----------
Net loans 15,489,927 15,835,760
Premises and equipment, net 462,585 465,498
Other assets 772,330 761,292
- ------------------------------------------------------------------- ------------- -----------
TOTAL ASSETS $22,718,037 23,600,095
=================================================================== ============= ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES
Deposits:
Non-interest bearing $ 2,758,149 2,925,679
Interest bearing 15,640,757 16,416,788
----------- -----------
Total deposits 18,398,906 19,342,467
Securities sold under repurchase agreements -- 429,483
Other short term borrowings 1,759,875 1,220,482
Long term debt 478,017 490,315
Other liabilities 278,346 289,367
----------- -----------
Total liabilities 20,915,144 21,772,114
----------- -----------
SHAREHOLDERS' EQUITY
Common stock-$10 par value 625,226 632,839
Capital surplus 256,163 283,409 <PAGE>
Net unrealized gain/(loss) on securities available for sale, net
of tax expense of $1,698 at March 31, 1996 and net of tax
expense of $13,853 at December 31, 1995 3,978 25,939
Retained earnings 917,526 885,794
----------- -----------
Total shareholders' equity 1,802,893 1,827,981
- ------------------------------------------------------------------- ----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $22,718,037 23,600,095
=================================================================== ============ ===========
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
FIRST OF AMERICA BANK COPORATION
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended,
March 31,
($ in thousands except per share data) 1996 1995
- ------------------------------- --------- ---------
<S> <C> <C>
INTEREST INCOME
Loans and fees on loans $ 349,226 370,925
Securities:
Taxable income 72,576 80,816
Tax exempt income 3,448 3,544
Money market investments 1,786 1,108
--------- ---------
Total interest income 427,036 456,393
--------- ---------
INTEREST EXPENSE
Deposits 167,273 176,571
Short term borrowings 23,787 29,047
Long term debt 9,552 12,635
--------- ---------
Total interest expense 200,612 218,253
--------- ---------
NET INTEREST INCOME 226,424 238,140
Provision for loan losses 24,601 20,510
--------- ---------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES 201,823 217,630
--------- ---------
NON-INTEREST REVENUE
Service charges on deposit accounts 26,137 24,310
Trust and financial services revenue 27,365 21,688
Investment securities transactions, net (287) (1,463)
Bank card revenue 17,157 9,864
Mortgage banking revenue 6,075 4,582
Other operating revenue 17,722 10,621
--------- ---------
Total non-interest revenue 94,169 69,602
--------- ---------
NON-INTEREST EXPENSE
Personnel 111,342 115,360
Occupancy, net 16,830 16,318
Equipment 14,727 14,699
Outside data processing 4,709 4,795
Amortization of intangibles 5,237 5,253
Other operating expenses 52,615 58,160
--------- ---------
Total non-interest expense 205,460 214,585 <PAGE>
--------- ---------
Income before income taxes 90,532 72,647
Income taxes 30,911 25,258
--------- ---------
NET INCOME 59,621 47,389
========= =========
EARNINGS PER SHARE 0.94 0.75
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
FIRST OF AMERICA BANK COPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended,
March 31,
-------------------
($ in thousands) 1996 1995
- ------------------------------- --------- ---------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $ 59,621 47,389
Adjustments to reconcile net income to cash
provided by operating activities:
Depreciation and amortization 11,861 11,860
Provision for loan losses 24,601 20,510
Provision for deferred taxes (2,244) (17,538)
Amortization of intangibles 5,237 5,253
(Gain) loss on sale of securities available for held for sale 287 26
(Gain) loss on sale of mortgage loans held for sale (3,961) (1,361)
(Gain) loss on sale of other assets (4,475) (243)
Proceeds from the sales of mortgage loans held for sale 309,389 59,435
Net other decrease (increase) in mortgage loans held for sale (356,152) (62,590)
Change in assets and liabilities net of acquisitions:
(Increase) decrease in interest and other income receivable 52,231 (15,905)
(Increase) decrease in other assets 174,604 4,010
Increase (decrease) in accrued expenses and other liabilities 928 32,256
--------- ---------
Net cash provided by operating activities 271,927 83,102
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from the maturities of securities (held to maturity) 0 71,359
Purchases of securities (held to maturity) 0 (78,047)
Proceeds from the sale of securities available for sale 158,403 85,851
Proceeds from the maturities of securities available for sale 227,373 132,124
Purchases of securities available for sale (362,493) (63,899)
Net other (increase) decrease in loans and leases 371,956 (84,569)
Premises and equipment purchased (6,419) (24,912)
Proceeds from the sale of premises and equipment 2,185 14,465
(Acquisition) sale of affiliates, net of cash acquired 944 746
--------- ---------
Net cash provided by investing activities 391,949 53,118
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITES:
Net increase (decrease) in short term deposits (269,271) (433,381)
Net increase (decrease) in time deposits (674,290) (99,238)
Net increase (decrease) in short term borrowings 109,910 480,394
Proceeds from issuance of long term debt 926 --
Repayments of long term debt (13,224) (33,175)
Proceeds from issuance of common stock 794 (1,053)
Dividends paid (27,844) (26,468)
Payments for purchase and retirement of common stock (39,286) 0
--------- ---------
Net cash provided by financing activities (912,285) (112,921)
--------- ---------
Net increase(decrease) in cash and cash equivalents (248,409) 23,299
Cash and cash equivalents at beginning of period 1,207,062 1,060,788
--------- ---------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 958,653 1,084,087
========= =========
See accompanying notes to consolidated financial statements.
/TABLE
<PAGE>
NOTE 1: GENERAL
The accompanying interim financial statements are unaudited. In
the opinion of management, all adjustments necessary for a fair
statement of the consolidated financial results have been
included and all such adjustments are of a normal recurring
nature. Certain amounts included in the prior period financial
statements have been reclassified to conform with the current
financial statement presentation.
NOTE 2: NON-PERFORMING ASSETS
<TABLE>
<CAPTION>
March 31,
-------------------------
(in thousands) 1996 1995
- ----------------------------- ----------- ---------
<S> <C> <C>
Non-accrual loans $ 92,442 94,314
Restructured loans 8,204 4,784
Other real estate owned 30,621 40,349
----------- ---------
Total non-performing assets $ 131,267 139,447
============ ==========
</TABLE>
NOTE 3: ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
(in thousands) 1996 1995
- ------------------- ------- -------
<S> <C> <C>
Balance, beginning of period $241,182 228,115
Provision charged against income 24,601 20,510
Recoveries 16,443 12,830
Loans charged off (37,019) (30,931)
--------- --------
Balance, end of period $245,207 230,524
========= ========
</TABLE>
First of America's non-performing loan policies, which
address nonaccrual and restructured loans, indicate that
such loans meet the definitions set forth for "impaired
loans" in Financial Accounting Standards Board Statement
No. 114, "Accounting by Creditors for Impairment of a
Loan," as amended by Statement No. 118, "Accounting by
Creditors for Impairment of a Loan -- Income Recognition
and Disclosures." Therefore, commercial loans and
commercial mortgage loans meeting the definition of
nonaccrual and restructured are reported as impaired loans
for disclosure purposes.<PAGE>
At March 31, 1996, the recorded investment in loans considered to
be impaired under Statement No. 114 was $79.5 million with an
average recorded investment during the quarter of approximately
$85.7 million. At March 31, 1995, the recorded investment was
$78.3 million with a quarterly average of approximately $80.6
million. At March 31, 1996 and 1995, the allowance for impaired
loans was $19.3 million and $17.4 million, respectively. At
March 31, 1996, the impaired allowance related to $43.2 million
of the impaired loans, while the remaining $36.3 million of
impaired loans did not require a specific allowance for loan
losses according to Statement No. 114.
NOTE 4: COMMON STOCK AND CALCULATION OF EARNINGS PER SHARE
At March 31, 1996 and 1995, there were 62,522,627 and 63,189,419
common shares outstanding, respectively. At the same dates,
there were 100,000,000 authorized shares of $10 par value common
stock. Common and common equivalent earnings per share amounts
were calculated by dividing net income applicable to common stock
by the weighted average number of common and common equivalent
shares outstanding during the respective periods adjusted for
outstanding stock options.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------------
1996 1995
------------- ----------
<S> <C> <C>
Average common and common
equivalents shares outstanding 63,547,901 63,326,582
</TABLE>
At its January 1996 meeting, the Board of Directors
authorized the repurchase of 2 million shares of
First of America Common Stock, which when added to
previously authorized shares, resulted in 2.6 million
shares authorized for repurchase. By March 31, 1996,
the company had repurchased 866,300 shares. Under
applicable Michigan law, any shares repurchased revert
to the status of authorized, unissued shares and will
be used for general corporate purposes and may be
available for reissuance in connection with the
company's stock option plan, dividend reinvestment
plan, and/or employee savings plan.
NOTE 5: MERGERS AND ACQUISITIONS
<TABLE>
<CAPTION>
Date of Total Assets Financial
($ in thousands) Acquisition Acquired Reporting Value
- --------------------------------- ---------------- ----------- --------------
<S> <C> <C> <C>
Huttenlockers Kerns Norvell, Inc. February 12, 1996 $ 3,994 3,912
West Suburban Financial Corp. August 4, 1995 12 --
Underwriting Consultants, Inc. February 1, 1995 1,255 1
New England Trust Company January 1, 1995 1,576 1,092
/TABLE
<PAGE>
Item 2. Managements' Discussion and Analysis of Financial Condition
and Results of Operations
<TABLE>
<CAPTION>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Summary: The following table sets forth the period to period
changes in the principal items included in the
consolidated statement of income for the three months
ended March 31, 1996, compared with the corresponding
1995 period. The bracketed amounts represent decreases.
Three Months Ended
March 31,
1996 vs 1995
--------------------
($ in thousands) Change Percent
- ----------------------------- --------- ---------
<S> <C> <C>
Interest and fee income on loans $ (21,699) (5.8)%
Interest income on investments (8,336) (9.9)
Interest income on federal funds sold and
other short term investments 678 61.2
---------
Total interest income (29,357) (6.4)
---------
Interest expense on deposits (9,298) (5.3)
Interest expense on borrowed funds (8,343) (20.0)
---------
Total interest expense (17,641) (8.1)
---------
Net interest income (11,716) (4.9)
Provision for loan losses 4,091 19.9
Non-interest income 24,567 35.3
Non-interest expense (9,125) (4.3)
---------
Income before tax expense 17,885 24.6
Applicable income tax expense 5,653 22.4
---------
Net income $ 12,232 25.8 %
=========
</TABLE>
OVERVIEW
Net income for the first quarter was $59.6 million, or $0.94 per
share, compared with $47.4 million, or $0.75 per share, last
year. A higher net interest margin and growing non-interest
revenue were the primary reasons for the improved 1996 quarter
results. The first quarter of 1996 also benefited from $4.4
million in branch sale gains. Last year's first quarter was
reduced by $6.0 million in severance charges.
Total assets were $22.7 billion, down 7.6 percent from $24.6
billion a year ago. While the securitization of $500 million in
credit card receivables in June 1995 accounted for a portion of
the decrease in average assets, the planned restructuring of the
balance sheet was the major reason for the decline as higher
priced deposits and selected loan portfolios with narrower net
interest spreads were allowed to run-off and sales efforts
focused on loans and deposits meeting specific target returns.
As a result, the average indirect installment loan portfolio was
down 23.7 percent from last year, and the average residential
mortgage loan portfolio was down 3.6 percent. For the same
comparable periods average commercial loans and commercial
mortgage loans were both up over 9 percent. Average negotiated
CD's declined 25 percent from 1995 and other CD's were down 9.3
percent. This shift in loan and deposit mixes contributed to
the improvement in the quarter's net interest margin.<PAGE>
The return on average assets for the quarter was 1.05 percent
compared with 0.79 percent a year ago. Return on average equity
was 12.97 percent for the 1996 quarter and 12.03 percent for the
1995 quarter.
CONSOLIDATED INCOME ANALYSIS
Net interest income was down 4.9 percent from the 1995 first
quarter. However, if 1995's net interest income was restated
for the impact of the securitization, 1996's net interest income
would be level with last year's as the higher net interest margin
offset the lower level of earning assets. As a result of the
balance sheet restructuring, the first quarter net interest margin
improved to 4.40 percent compared with 4.32 percent reported for
the fourth quarter of 1995 and 4.29 percent for the first quarter
of 1995 (4.17 percent restated for the impact of the credit card
securitization in June 1995). Table 3 provides detail on earning
asset yields and the average rates paid on interest-
bearing liabilities for the last six quarters. Table 4 presents
a summary of the changes in net interest income resulting from
changes in volumes and rates.
The provision for loan losses was up 19.9 percent over 1995's
first quarter. As a percent of average loans, net charge-offs
were 0.52 percent compared with 0.44 percent last year. As 1995
progressed, net charge-offs in consumer installment loans and
credit cards trended upward, and the provision for loan losses
was increased accordingly. The provision for the 1996 first
quarter covered net charge-offs by 120 percent compared with 113
percent a year ago. Charge-offs and recoveries by portfolio type
are detailed in Table 5.
Total non-interest revenue was up 35.3 percent from the first
quarter of 1995. The total for the 1996 first quarter included
servicing fees from the credit card securitization and $4.4
million in branch sale gains. Excluding these factors, non-
interest revenue increased 14.5 percent. Service charges on
deposit accounts were up 7.5 percent.
Trust and financial services revenue increased 26.2 percent over
last year's first quarter. Traditional trust fees, totalling
$17.4 million for the quarter, were up 8.0 percent as assets
under management grew with the rising securities market. At
quarter-end total assets under management were $18.3 billion
compared with $14.3 billion a year ago. Other financial services
revenue, generated by cash management, investment management,
brokerage and insurance services, was $10.0 million for the
quarter compared with $5.6 million a year ago, reflecting renewed
customer interest in these investment activities. Mutual funds
sales revenue for the quarter was $2.2 million versus $0.7
million last year, and annuities sales revenue was $1.4 million
versus $1.3 million.<PAGE>
Mortgage banking revenue was up 32.6 percent due to the higher
level of mortgage originations generated this year over last
year - $406 million compared with $326 million a year ago. Gains
on mortgage loan sales were $4.0 million versus $1.4 million
last year as a larger proportion of the new loans were sold in
the secondary market rather than being retained in portfolio.
Bank card fee revenue was 73.9 percent higher, mainly from the
credit card securitization. The securitization adds to non-
interest income but lowers interest income with no material
change to net income. Interchange income was slightly lower
for the quarter due to reduced customer activity even though
outstanding receivables remained relatively level.
Total non-interest expense for the quarter declined 4.3 percent
from last year's first quarter. Since a year ago, FDIC premiums
have been reduced significantly to $2.7 million for the 1996
quarter versus $11.4 million for the 1995 quarter, and last
year's first quarter included $6.0 million in severance charges
related to the company's restructuring. If these two items were
excluded from the comparison, non-interest expense for the
quarter increased 2.8 percent.
Excluding 1995's first quarter $6.0 million in severance costs,
total personnel costs increased 1.8 percent. At March 31, 1996,<PAGE>
full time equivalent employees (FTEs) were 12,757 compared with
13,023 a year ago. As a percent of average assets, total
personnel cost was 1.97 percent versus 1.80 percent a year ago,
excluding the 1995 severance charge. This increase was due, in
part, to incentive compensation from higher mortgage loan
originations and brokerage and insurance sales, and normal merit
increases the bulk of which are routinely instituted in the first
quarter.
The burden ratio, excluding branch sale gains and last year's
severance costs, was 2.04 percent for the 1996 first quarter and
2.31 percent for the 1995 first quarter. On the same basis, the
efficiency ratio was 64.17 percent compared with 66.88 percent.
LINE OF BUSINESS RESULTS
Line of business reporting requires certain assumptions and
allocations. Equity is allocated on the basis of required
regulatory levels, inherent operational risk or market-determined
factors as evidenced by similar independent single business line
companies. Centrally provided support services are allocated on
a per-unit cost basis or in proportion to the balances of assets
and liabilities associated with a particular business line.
Funds transfer pricing is used to allocate a cost of funds used
or a credit for funds provided from market-determined indices.
Because of these assumptions and allocations, the financial
results of the individual business lines might vary from the
actual results if those lines were in fact separate operating
entities.
For the first quarter of 1996, Community Banking accounted for
63.2 percent of consolidated net income, Bank Card 12.9
percent, Mortgage Banking 10.7 percent and Trust and Financial
Services 8.8 percent. Branch sale gains accounted for 4.4
percent. Table 1 presents a summarized income statement for
the first quarter of 1996 and selected quarterly information for
the past five quarters for each of the business lines described
below.
Community Banking -- Community Banking includes deposit
management and commercial, home equity and installment lending,
as well as other general and international banking services.
This business line reported net income of $37.7 million for the
first quarter of 1996, up 5.9 percent from the first quarter of
1995, primarily as a result of higher fee revenue and lower non-
interest expense. Return on equity was 10.31 percent compared
with 11.47 percent as growth in equity outpaced net income
growth. The efficiency ratio improved to 68.43 percent from
70.91 percent a year ago.
Community Banking's fee revenue was up 19.1 percent to $38.2
million, reflecting the updating of fee structures. Non-
interest expense declined 3.2 percent primarily due to
efficiencies achieved in the company's restructuring efforts
in 1995. Net interest income (FTE) decreased 2.7 percent
largely due to a lower volume of earning assets. The business
line's provision for loan losses was increased 46.2 percent to
$13.1 million as a result of higher net charge-offs being
experienced in the installment loan portfolio.
Bank Card -- Bank Card is responsible for managing and servicing
First of America's $1.5 billion managed portfolio of credit card
and other revolving loans (which includes securitized credit
card receivables), as well as the merchant services operation.
Bank Card's net income for the first quarter decreased 14.7
percent from the 1995 first quarter, primarily as a result of
higher credit losses in the managed portfolio. Even though the
amount booked as provision for loan losses remained level with
a year ago, the flow of fee revenue from the securitization was
reduced by the net losses occurring in the securitized
portfolio. Net charge-offs for the total managed portfolio
were $13.1 million compared with $9.1 million a year ago.
Due to the lower level of net income for the quarter, Bank
Card's return on equity was 28.05 percent compared with 32.56
percent last year, and the efficiency ratio was 38.87 percent
versus 37.00 percent.
Mortgage Banking -- Mortgage Banking originates all residential
mortgages across First of America's four core states and in
separate origination offices in Arizona, North Carolina and South
Carolina. Also, the business line services a $7.5 billion<PAGE>
mortgage loan portfolio for both First of America and external
investors. The interest income and related funds transfer charge
of First of America's portfolio are included in Mortgage
Banking's results.
Mortgage Banking's net income for the quarter was $6.4 million
compared with $2.9 million a year ago, as a result of higher net
interest income, gains on loan sales and lower non-interest
expense. Net interest income (FTE) was up 16.4 percent to $17.0
million due to lower funding costs. As stated previously,
mortgage originations were up 24.5 percent from the 1995 first
quarter, and this fact combined with a higher proportion of new
loans being sold in the secondary market resulted in $2.6 million
more in gains on loan sales. Even though more mortgage
originators were compensated on a commission basis, this business
line's non-interest expense was down 12.4 percent from a year ago
due to efficiencies implemented during the company's 1995
restructuring.
Trust and Financial Services -- This business line provides
traditional trust services, as well as investment management,
cash management, securities brokerage and insurance services.
Trust and Financial Services' net income for the quarter grew
48.2 percent to $5.2 million, primarily due to increased customer
investment activity and the higher market value of the managed
assets upon which fees are assessed, $18.3 billion versus $14.3
billion a year ago.
As a result, Trust and Financial Services' non-interest revenue
was up 23.4 percent over a year ago, and its return on equity was
46.64 percent compared with 40.13 percent. The business line's
efficiency ratio improved to 70.72 percent from 75.19 percent
even with a 15.7 percent increase in non-interest expense. Non-
interest expense increased primarily due to higher incentive
compensation in correlation with higher sales activity.<PAGE>
<TABLE>
<CAPTION>
TABLE 1
LINE OF BUSINESS FINANCIAL PERFORMANCE
For quarter ended March 31, 1996 Trust &
Community Bank Mortgage Financial Consolidated
INCOME STATEMENT Banking Card Banking Services Results
--------- --------- --------- --------- ---------
- - - ($ in thousands) - - -
<S> <C> <C> <C> <C> <C>
Net interest income (FTE) $ 191,745 20,723 16,961 1,052 230,481
Provision for loan losses 13,086 11,452 63 -- 24,601
Non-interest income 38,168 17,994 6,246 27,307 89,715
Non-interest expense 157,366 15,049 13,027 20,022 205,464
Income tax expense (FTE) 21,981 4,516 3,740 3,082 33,319
--------- --------- --------- --------- ---------
Income before one-time gains and charges $ 37,480 7,700 6,377 5,255 56,812
---------
Gains from branch sales (net of tax) 2,809
=========
Net Income $ 59,621
=========
1996 1995
--------- -------------------------------------------------
1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr.
QUARTER RESULTS Mar. 31 Dec. 31 Sept. 30 June 30 Mar. 31
--------- --------- --------- --------- ---------
COMMUNITY BANKING
Net income $ 37,480 40,209 44,847 40,546 35,600
Return on equity 10.25 % 11.31 12.96 12.27 11.47
Efficiency ratio 68.45 65.88 64.49 67.62 70.91
BANK CARD
Net income $ 7,700 6,228 8,477 7,855 9,032
Return on equity 28.05 % 23.54 33.39 32.56 39.33
Efficiency ratio 38.87 39.59 38.92 37.00 34.64
MORTGAGE BANKING
Net income $ 6,377 5,877 7,051 7,218 2,939
Return on equity 11.52 % 9.95 12.03 12.96 5.68
Efficiency ratio 56.13 58.48 53.36 55.46 75.95
TRUST & FINANCIAL SERVICES
Net income $ 5,255 5,368 5,410 4,560 3,527
Return on equity 46.88 % 53.20 55.29 49.04 40.13
Efficiency ratio 70.60 67.40 65.90 69.79 75.19
/TABLE
<PAGE>
ASSET QUALITY AND CREDIT RISK PROFILE
First of America's loan portfolio has no significant
concentrations of credit to any specific borrower or within any
geographic region, thereby minimizing credit risk exposure. Also
minimizing credit risk are First of America's conservative
lending policies and loan review process. First of America's
loan customers are largely consumers, individual homeowners and
small to mid-sized businesses. At March 31, 1996, the loan
portfolio was comprised of residential mortgages (31.9 percent),
consumer loans (26.9 percent), commercial mortgages (24.6
percent) and commercial loans (16.7 percent).
The allowance for loan losses was 1.56 percent of total loans at
March 31, 1996 compared with 1.36 percent a year ago and
allowance coverage of non-performing loans was 243.63 percent
compared with 232.62 percent a year ago. Non-performing loans
and loans 90 days past due are detailed by portfolio in Table 6.
FUNDING, LIQUIDITY AND INTEREST RATE RISK
First of America continues to monitor appropriate interest rate
risk, provide liquidity and moderate changes in the market value
of the investment securities portfolio through a centralized
funds management division.
Liquidity is measured by a financial institution's ability to
raise funds through deposits, borrowed funds, capital or the sale
of assets. First of America relies primarily upon core deposits
for its liquidity. At March 31, 1996, core deposits equalled
95.9 percent of total deposits. First of America does not issue
negotiated CD's in the national money markets, and the level of
purchased funds is limited by corporate policy to less than 10
percent of assets. The majority of negotiated CD's and purchased
funds originate from the core deposit customer base, including
downstream correspondents.
First of America's interest rate risk policy is to minimize the
effect on net income resulting from a change in interest rates
through asset/liability management at all levels in the company.
Each banking affiliate completes an interest rate analysis
monthly using an asset/liability model, and a consolidated
analysis is then completed using the affiliates' data.
The difference between rate sensitive assets and liabilities,
including the impact of off-balance sheet interest rate swaps, is
presented in Table 7. The GAP report's reliability in measuring
the risk to income from a change in interest rates is tested
through the use of simulation models. At March 31, 1996,
simulation models indicated that less than two percent of First of
America's net income was at risk if rates were to increase by one
percent in a parallel fashion. Net income would increase by
approximately three percent if rates were to decline by one
percent in a parallel fashion. Management has determined that
these simulation models provide a more meaningful measurement of
the company's interest rate risk positions than the GAP table.<PAGE>
TABLE 2
INTEREST RATE SWAPS
<TABLE>
<CAPTION>
($ in thousands) Net Interest Income
Impact for the
Weighted Average Average Three Months Ended
Notional Fair Market Average Rate Received Rate Paid March 31,
Hedged Asset/Liability Amount Value Maturity (Mos.) Variable/Fixed Variable/Fixed 1996 1995
- ------------------------ --------- ------------ -------------- --------------- --------------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Rising Rate CDs -- -- -- -- -- -- (1,177)
Market Rate CDs * 1,403 116 1.7 -- -- (47) (323)
FHLB Advance -- -- -- -- -- -- 19
FirstRate Fund deposits 12,000 (31) 4.5 5.38%/variable 6.03/fixed (15) --
Bank notes 10,000 (45) 4.8 5.44%variable 6.23/fixed (14) 11
Long term debt 50,000 (457) 22.4 5.60%/fixed 5.27/variable (6) (294)
- ------------------------ --------- ------------ -------------- --------------- --------------- --------- ----------
Total $ 73,403 (417) 16.7 $ (82) $(1,764)
========================= ========== ============= ============== ========= ==========
* This represents a basis swap.
</TABLE>
To assist in the management of interest rate sensitivity, First
of America and its subsidiaries have entered into interest rate
swaps as a hedge against certain debt and deposit liabilities.
The contracts represent an exchange of interest payments, and
the underlying principal balances of the assets or liabilities
are not affected. Net settlement amounts are reported as
adjustments to interest income or interest expense. Gains or
losses on the termination of interest rate swaps are deferred
and amortized over the remaining lives of the designated
balance sheet liability. When the swap becomes uncovered
during the swap agreement period, the swap is immediately
marked-to-market with a corresponding charge to current earnings.
Although the notional amounts are often used to express the
volume of these transactions, the amounts potentially subject to
credit risk are much smaller. The company minimizes this risk by
performing normal credit reviews of its counterparties and
collateralizing its exposure when it exceeds a predetermined
limit. Table 2 outlines First of America's
outstanding interest rate swaps at March 31, 1996.
At quarter-end, First of America had outstanding interest rate
swaps with a notional value of $73.4 million which included $50
million as a hedge against parent company debt and the remainder
as hedges against various deposit products and bank debt. The
outstanding swaps had a negative market value of $417 thousand.
At March 31, 1995, outstanding swaps totalled $194 million in
notional amounts and had a negative market value of $2.7 million.
First of America has also utilized interest rate caps to manage
its interest rate risk. Interest rate caps are agreements to
make/receive payments for interest rate differentials between an
index rate and a specified maximum rate, computed on notional
amounts. At March 31, 1996, First of America had no outstanding
interest rate caps compared with $125 million in interest rate
cap agreements at March 31, 1995.
At March 31, 1996, First of America had no securities classified
as held-to-maturity. At March 31, 1995, securities held-to-
maturity totalled $3.0 billion, with a market value of $2.9
billion and resulting net unrealized loss of $110.3 million.
In accordance with Financial Accounting Standards Board
Statement No. 115 "Accounting for Certain Investments in Debt
and Equity Securities," securities available-for-sale are
carried at market value which totalled $5.0 billion at March 31,
1996, compared with an amortized book value of $4.9 billion.
The $5.7 million net unrealized gain in securities available-
for-sale resulted in a corresponding, after-tax market value
adjustment to equity of $4.0 million. At December 31, 1995,
the market value adjustments to securities and equity from the
securities available-for-sale portfolio were $40.0 million and
$25.9 million, respectively.<PAGE>
CAPITAL STRENGTH
First of America began its share repurchase program during March
of 1996, continuing its capital management strategy. By quarter-
end, 866,300 shares of First of America Common Stock were
repurchased at a total cost of $39.6 million. The repurchase of
another 1.8 million shares is currently authorized.
Total shareholders' equity increased 9.1 percent from a year ago
to $1.8 billion at March 31, 1996. The increase in equity was
due to net earnings retention and the positive change in the
adjustment to equity for the market value of available-for sale
securities. Since year-end 1995, however, the adjustment in the
market value of such securities was negative and reduced total
equity by $22.0 million. The book value per share rose to
$28.84 from the $26.14 reported a year ago.
First of America continues to maintain, both on a consolidated
level and an affiliate basis, capital levels within the
parameters of "well capitalized" as defined by regulatory
guidelines. The consolidated total capital to risk adjusted
assets ratio at March 31, 1996 was 12.72 percent, the tier I
ratio was 9.29 percent and the tier I leverage ratio was 6.59
percent.<PAGE>
UPDATE
Pending legislation in Congress could assess a one-time
premium on thrift deposits insured by the Savings Association
Insurance Fund which could result in a one-time charge to
First of America of up to approximately $38 million pre-tax.
However, the timing of the passage of the proposed legislation
has become increasingly indefinite and may not take place
until late in 1996 or possibly even into 1997.
First of America's plans for 1996 include further
restructuring of the balance sheet in terms of earning assets
and deposit mix as well as appropriate changes to capital
through its share repurchase program. In emphasizing sales
growth and improved profitability, the company will continue
to review the efficiency of its branch network and other
delivery systems and to provide additional sales training and
incentives for frontline employees.<PAGE>
<TABLE>
<CAPTION>
TABLE 3
CONSOLIDATED YIELD ANALYSIS (a)
1996 1995 1994
-------- ---------------------------------------- --------
1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr.
Mar. 31 Dec. 31 Sept. 30 June 30 Mar. 31 Dec. 31
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Average Prime Rate (b) 8.3 % 8.7 8.8 9.0 8.9 8.1
EARNING ASSETS
Money Market Investments 7.30 % 4.46 6.74 5.96 5.18 3.77
U.S. Government and agencies 6.12 5.89 5.89 5.90 5.90 5.81
securities
State and municipal securities 8.35 8.32 8.55 8.94 8.71 8.57
Other securities 6.28 6.16 6.36 6.33 5.32 6.21
-------- -------- -------- -------- -------- --------
Total securities 6.18 6.06 6.07 6.06 6.08 5.98
-------- -------- -------- -------- -------- --------
Consumer loans 9.75 9.68 9.57 9.83 9.58 9.19
Commercial loans 8.87 9.16 9.17 9.33 9.25 8.70
Commercial real estate loans 9.18 9.35 9.30 9.40 9.35 8.99
Residential real estate loans 7.96 7.96 7.95 7.95 7.84 7.76
-------- -------- -------- -------- -------- --------
Total loans 8.90 8.96 8.92 9.06 8.95 8.65
-------- -------- -------- -------- -------- --------
Total earning assets 8.24 % 8.24 8.24 8.32 8.20 7.94
======== ======== ======== ======== ======== ========
INTEREST-BEARING LIABILITIES
Time deposits:
CD's - less than 12 months 5.12 % 5.34 5.45 5.19 4.79 4.46
CD's - 12 months or more 5.75 5.76 5.68 5.55 5.26 4.79
CD's - $100,000 or more 5.50 5.73 5.80 6.10 5.72 5.05
Other time deposits 5.59 5.70 5.67 5.71 5.46 5.27
Other core deposits:
Savings deposits and NOW 1.72 1.73 1.74 1.71 1.70 1.84
Money market savings and checking 3.71 3.80 3.91 3.98 4.01 3.39
-------- -------- -------- -------- -------- --------
Total deposits 4.23 4.35 4.40 4.35 4.16 3.81
-------- -------- -------- -------- -------- --------
Short term borrowings 5.66 6.09 6.38 6.09 5.96 5.32
Long term debt 7.83 7.80 7.36 7.53 7.66 7.15
-------- -------- -------- -------- -------- --------
Total borrowed funds 6.15 6.56 6.72 6.44 6.39 5.93
-------- -------- -------- -------- -------- --------
Total interest-bearing liabilities 4.46 % 4.57 4.64 4.65 4.45 4.06
======== ======== ======== ======== ======== ========
NET INTEREST MARGIN
Interest income to average earning 8.24 % 8.24 8.24 8.32 8.20 7.94
assets
Interest expense to average earning 3.84 3.92 4.01 4.06 3.91 3.55
assets
Net interest margin 4.40 4.32 4.23 4.26 4.29 4.39
(a) Fully taxable equivalent, based on a marginal federal income tax rate of 35%.
(b) The First National Bank of Chicago Corporate Base Rate.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
TABLE 4 FIRST OF AMERICA BANK CORPORATION
Analysis of Net Interest Income
First Quarter 1996 Versus First Quarter 1996 Versus
($ in thousands) First Quarter 1995 Fourth Quarter 1995
- ------------------------------ -------------------------------- --------------------------------
CHANGES IN RATE AND VOLUME Total Change Due To Total Change Due To
INCREASE (DECREASE): Change Volume Rate Change Volume Rate
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Loans (FTE) $ (22,203) (22,198) (5) (11,460) (5,478) (5,982)
Taxable securities (7,902) (9,509) 1,607 1,027 (358) 1,385
Tax exempt securities (FTE) (17) 197 (214) 133 120 13
Money market investments 678 151 527 (241) (1,169) 928
------- ------- ------- ------- ------- -------
Total Interest Income (29,444) (31,359) 1,915 (10,541) (6,885) (3,656)
------- ------- ------- ------- ------- -------
INTEREST EXPENSE
Interest-bearing deposits (9,298) (14,038) 4,740 (13,722) (6,531) (7,191)
Short term borrowings (5,260) (4,057) (1,203) 3,844 5,507 (1,663)
Long term borrowings (3,083) (3,461) 378 (90) (1) (89)
------- ------- ------- ------- ------- -------
Total Interest Expense (17,641) (21,556) 3,915 (9,968) (1,025) (8,943)
------- ------- ------- ------- ------- -------
Change in net interest income (FTE) $ (11,803) (9,803) (2,000) (573) (5,860) 5,287
======= ======= ======= ======= ======= =======
NOTE: The change in income attributable to volume is calculated by multiplying the change in volume times
the prior year's rate. The change in income attributable to rate is calculated by multiplying the change in rate
times the prior year's volume. Any variance attributable jointly to volume and rate changes is allocated to
volume and rate in proportion to the relationship of the absolute dollar amount of the change in each. Fully
taxable equivalent income on certain tax exempt loans and securities is calculated using a 35% tax rate.
/TABLE
<PAGE>
<TABLE>
<CAPTION>
TABLE 5
SUMMARY OF LOAN LOSS EXPERIENCE
($ in thousands) 1996 1995 1994
- ----------------------------- --------- ---------------------------------------------- ---------
1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr.
Mar. 31 Dec. 31 Sept. 30 June 30 Mar. 31 Dec. 31
ALLOWANCE FOR LOAN LOSSES --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Balance, at beginning of period $ 241,182 238,948 235,939 230,524 228,115 213,596
Provision charged against income 24,601 27,610 21,368 22,000 20,510 22,224
Allowance of acquired (sold) banks -- -- -- -- -- 9,200
Recoveries:
Commercial 1,012 831 1,925 1,375 1,626 2,243
Commercial mortgage 1,060 1,583 911 456 884 426
Residential mortgage 43 60 10 19 27 40
Consumer installment 12,508 10,604 10,510 10,043 8,093 4,891
Consumer revolving 1,820 1,745 1,853 2,183 2,200 2,153
--------- --------- --------- --------- --------- ---------
Total recoveries 16,443 14,823 15,209 14,076 12,830 9,753
--------- --------- --------- --------- --------- ---------
Charge-offs:
Commercial 988 2,919 1,792 1,177 1,119 2,621
Commercial mortgage 1,590 3,863 1,067 2,220 627 2,882
Residential mortgage 122 11 238 73 73 212
Consumer installment 22,785 23,178 20,386 15,133 16,554 7,778
Consumer revolving 11,534 10,228 10,085 12,058 12,558 13,165
--------- --------- --------- --------- --------- ---------
Total charge-offs 37,019 40,199 33,568 30,661 30,931 26,658
--------- --------- --------- --------- --------- ---------
Net charge-offs 20,576 25,376 18,359 16,585 18,101 16,905
--------- --------- --------- --------- --------- ---------
Balance, at end of period $ 245,207 241,182 238,948 235,939 230,524 228,115
========= ========= ========= ========= ========= =========
Average loans outstanding (net of
unearned income) $15,854,148 16,099,202 16,337,833 16,848,514 16,855,909 16,112,582
CHARGE-OFFS AND RECOVERIES RATIOS
Net charge-offs to average loans (a) 0.52 % 0.63 0.45 0.39 0.44 0.42
Net charge-offs to period end 33.75 41.74 30.48 28.19 31.84 29.40
allowance (a)
Earnings coverage of net charge-offs 5.60 x 5.09 6.73 6.57 5.15 5.89
Recoveries to total charge-offs 44.42 % 36.87 45.31 45.91 41.48 36.59
Provision to average loans (a) 0.62 0.68 0.52 0.52 0.49 0.55
Allowance to total period end loans 1.56 1.50 1.46 1.43 1.36 1.36
(a) Annualized
ALLOWANCE FOR LOAN LOSS SUMMARY
At December 31, 1995 1994 1993 1992 1991 1990
- ----------------------------- --------- --------- --------- --------- --------- ---------
Balance, at beginning of period $ 228,115 188,664 176,793 174,882 137,012 126,175
Provision charged against income 91,488 86,571 84,714 78,809 71,030 44,782
Allowance of acquired/(sold) banks -- 11,420 50 (372) 27,094 11,185
Recoveries 56,938 38,134 35,863 33,640 30,280 28,470
Less: Charge-offs 135,359 96,674 108,756 110,166 90,534 73,600
--------- --------- --------- --------- --------- ---------
Balance, at end of period $ 241,182 228,115 188,664 176,793 174,882 137,012
========= ========= ========= ========= ========= =========
/TABLE
<PAGE>
<TABLE>
<CAPTION>
TABLE 6
MEASUREMENT OF ASSET QUALITY
($ in thousands) 1996 1995 1994
- ----------------------------- --------- ------------------------------------------- ---------
1st Qtr. 4th Qtr. 3rd Qtr. 2nd Qtr. 1st Qtr. 4th Qtr.
Mar. 31 Dec. 31 Sept. 30 June 30 Mar. 31 Dec. 31
NON-PERFORMING ASSETS --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Non-accrual loans:
Commercial $ 30,636 28,943 26,231 21,880 21,203 22,156
Commercial mortgage 41,391 48,190 48,658 55,339 53,270 56,917
Residential mortgage 19,800 23,191 23,595 25,155 18,368 16,118
Revolving mortgage 615 606 622 426 492 482
Consumer installment -- 3,244 3,006 1,477 981 1,141
Consumer revolving -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Total non-accrual loans $ 92,442 104,174 102,112 104,277 94,314 96,814
--------- --------- --------- --------- --------- ---------
Renegotiated loans:
Commercial $ 6,521 10,481 6,643 3,306 3,310 411
Commercial mortgage 934 943 219 503 514 3,327
Residential mortgage 749 903 920 917 960 1,056
Revolving mortgage -- -- -- -- -- --
Consumer installment -- -- -- -- -- 58
Consumer revolving -- -- -- -- -- --
--------- --------- --------- --------- --------- ---------
Total renegotiated loans $ 8,204 12,327 7,782 4,726 4,784 4,852
--------- --------- --------- --------- --------- ---------
Total non-performing loans $ 100,646 116,501 109,894 109,003 99,098 101,666
--------- --------- --------- --------- --------- ---------
Other real estate owned $ 30,621 31,103 31,691 33,376 40,349 38,662
--------- --------- --------- --------- --------- ---------
Total non-performing assets $ 131,267 147,604 141,585 142,379 139,447 140,328
========= ========= ========= ========= ========= =========
Loans past due 90 days or more:
Commercial $ 1,387 1,406 1,589 1,360 674 1,709
Commercial mortgage 3,235 1,766 1,884 1,297 1,838 1,956
Residential mortgage 1,637 2,019 3,879 3,001 2,593 711
Revolving mortgage 1,123 940 610 390 395 370
Consumer installment 12,833 14,967 10,244 7,661 5,947 7,178
Consumer revolving 7,385 7,026 4,713 6,136 6,276 6,284
--------- --------- --------- --------- --------- ---------
Total loans past due 90 days or
more $ 27,600 28,124 22,919 19,845 17,723 18,208
========= ========= ========= ========= ========= =========
ASSET QUALITY RATIOS
Non-performing assets as a % of total 0.58 % 0.63 0.60 0.60 0.57 0.57
assets
Non-performing assets as a % of
total loans + OREO 0.83 % 0.92 0.87 0.86 0.82 0.83
Allowance coverage of non-performing 243.63 % 207.02 217.43 216.45 232.62 224.38
loans
NONPERFORMING ASSET SUMMARY
At December 31, 1995 1994 1993 1992 1991 1990
- ------------------------------ --------- --------- --------- --------- --------- ---------
Non-accrual loans $ 104,174 96,814 121,186 126,619 116,995 76,533
Renegotiated loans 12,327 4,852 10,879 20,669 16,837 12,234
Other real estate owned 31,103 38,662 50,595 48,699 34,601 17,620
--------- --------- --------- --------- --------- ---------
Total non-performing assets $ 147,604 140,328 182,660 195,987 168,433 106,387
========= ========= ========= ========= ========= =========
Loans past due 90 days or more $ 28,124 18,208 23,462 20,887 32,499 31,380
/TABLE
<PAGE>
<TABLE>
<CAPTION>
TABLE 7
INTEREST RATE SENSITIVITY
March 31, 1996
0 to 0 to 0 to 0 to 0 to
($ in millions) 30 Days 60 Days 90 Days 180 Days 365 Days
- ----------------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
Other earning assets $ 32 32 32 32 32
Investment securities 199 314 428 774 1,442
Loans, net of unearned discount 4,743 5,036 5,876 6,788 8,820
--------- --------- --------- --------- ---------
Total rate sensitive assets (RSA) $ 4,974 5,382 6,336 7,594 10,294
========= ========= ========= ========= =========
LIABILITIES
Money market type deposits $ 3,642 3,642 3,642 3,642 3,642
Other core savings and time deposits 1,135 2,004 2,839 4,289 6,316
Negotiated deposits 378 524 612 678 704
Borrowings 969 1,314 1,372 1,456 1,806
Interest rate swap agreements (12) 28 28 50 50
--------- --------- --------- --------- ---------
Total rate sensitive liabilities (RSL) $ 6,112 7,512 8,493 10,115 12,518
========= ========= ========= ========= =========
GAP (RSA - RSL) $ (1,138) (2,130) (2,157) (2,521) (2,224)
========= ========= ========= ========= =========
RSA divided by RSL 81.38 % 71.64% 74.60% 75.07% 82.23%
GAP divided by total assets -5.01 -9.38 -9.50 -11.10 -9.79
Assumptions:
(1) Maturities of rate sensitive securities are based on contractual maturities and estimated prepayments.
(2) Maturities of rate sensitive loans are based contractual maturities, esitmated prepayments and
estimated repricing impact.
(3) Maturities of rate sensitive liabilities, interest rate swaps and interest rate caps are based on contractual
maturities and estimated repricing.
/TABLE
<PAGE>
II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
(3) Articles of Incorporation and Bylaws.
A copy of the Bylaws of the Registrant as
amended April 17, 1996, is filed herewith
as an Exhibit.
(10) Material Contracts.
A copy of the First of America Bank
Corporation Director Deferred Compensation
Plan, effective April 1, 1996, is filed
herewith as an Exhibit.
(11) Statement regarding computation of per share
earnings.
The computation of common and common
equivalents per share is described in Note 4
to the Consolidated Financial Statements of
this report.
(27) Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the
Registrant during the three months ended March 31,
1996.<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, First of America has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
FIRST OF AMERICA BANK CORPORATION
REGISTRANT
Date: May 10, 1996 /s/ Thomas W. Lambert
Thomas W. Lambert
Executive Vice President
and Chief Financial Officer
(Principal Financial and Accounting
Officer)<PAGE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 958,653
<INT-BEARING-DEPOSITS> 31,463
<FED-FUNDS-SOLD> 0
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 0
<INVESTMENTS-CARRYING> 0
<INVESTMENTS-MARKET> 0
<LOANS> 15,735,134
<ALLOWANCE> 245,207
<TOTAL-ASSETS> 22,718,037
<DEPOSITS> 18,398,906
<SHORT-TERM> 1,759,875
<LIABILITIES-OTHER> 278,346
<LONG-TERM> 478,017
0
0
<COMMON> 625,226
<OTHER-SE> 1,177,667
<TOTAL-LIABILITIES-AND-EQUITY> 22,718,037
<INTEREST-LOAN> 349,226
<INTEREST-INVEST> 76,024
<INTEREST-OTHER> 1,786
<INTEREST-TOTAL> 427,036
<INTEREST-DEPOSIT> 167,273
<INTEREST-EXPENSE> 33,339
<INTEREST-INCOME-NET> 226,424
<LOAN-LOSSES> 24,601
<SECURITIES-GAINS> (287)
<EXPENSE-OTHER> 205,460
<INCOME-PRETAX> 90,532
<INCOME-PRE-EXTRAORDINARY> 59,621
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 59,621
<EPS-PRIMARY> .94
<EPS-DILUTED> .94
<YIELD-ACTUAL> 4.40
<LOANS-NON> 92,442
<LOANS-PAST> 27,600
<LOANS-TROUBLED> 8,204
<LOANS-PROBLEM> 28,032
<ALLOWANCE-OPEN> 241,182
<CHARGE-OFFS> 37,019
<RECOVERIES> 20,576
<ALLOWANCE-CLOSE> 245,207
<ALLOWANCE-DOMESTIC> 245,207
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
