FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTERLY PERIOD ENDED SEPTEMBER 30, 1995 COMMISSION FILE NUMBER 1-2981
FIRSTAR CORPORATION
(Exact Name of Registrant as Specified in its Charter)
WISCONSIN 39-0711710
(State of Incorporation) (I.R.S. EMPLOYER
Identification No.)
777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202
Telephone Number (414) 765-4985
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 precedeing
12 months and (2) has been subject to such filing requirements for the
past 90 days.
As of October 30, 1995, 74,992,577 shares of common stock were outstanding.
FIRSTAR CORPORATION
CONTENTS
PAGE
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets 1
Consolidated Statements of Income 2
Consolidated Statements of Cash Flows 3
Supplemental Footnotes 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Additional Financial Data 16
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 18
SIGNATURES 18
<TABLE>
<CAPTION>
FIRSTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
- -------------------------------------------------------------------------------------------------
September 30 December 31 September 30
(thousands of dollars) 1995 1994 1994
- ------------------------------------------------------ ------------ ------------ -------------
(unaudited) (unaudited)
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ 1,087,667 $ 1,092,114 $ 1,038,820
Interest-bearing deposits with banks 5,906 33,532 23,126
Federal funds sold and resale agreements 118,099 351,304 337,778
Trading securities 7,931 29,050 31,956
Securities held to maturity (market value $4,240,932,
$3,636,897 and $3,367,181 on September 30, 1995,
December 31, 1994 and September 30, 1994) 4,176,649 3,750,897 3,414,894
Securities available for sale 85,700 222,719 173,276
Loans:
Commercial and industrial 3,270,594 2,944,565 2,827,065
Real estate 2,879,927 2,801,759 2,664,725
Other 993,710 963,883 925,763
------------ ------------ -------------
Commercial loans 7,144,231 6,710,207 6,417,553
Credit card 554,004 575,278 507,492
Real estate - mortgage 2,654,531 2,382,857 2,448,467
Home equity 913,899 767,540 733,262
Other 1,409,668 1,469,946 1,465,466
------------ ------------ -------------
Consumer loans 5,532,102 5,195,621 5,154,687
------------ ------------ -------------
Total loans 12,676,333 11,905,828 11,572,240
Reserve for loan losses (200,545) (190,552) (188,479)
------------ ------------ -------------
Loans - net 12,475,788 11,715,276 11,383,761
Bank premises and equipment 343,799 335,078 315,828
Customer acceptance liability 12,546 13,466 16,241
Other assets 469,931 450,770 452,750
------------ ------------ -------------
Total assets $ 18,784,016 $ 17,994,206 $ 17,188,430
============ ============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand $ 3,093,148 $ 3,113,103 $ 2,716,312
Interest-bearing demand 1,501,412 1,714,368 1,615,720
Money market accounts 2,161,537 2,086,665 2,018,055
Savings passbook 1,695,095 1,822,836 1,816,943
Certificates of deposit 5,361,374 4,672,243 4,640,431
------------ ------------ -------------
Total deposits 13,812,566 13,409,215 12,807,461
Short-term borrowed funds 2,397,399 2,196,478 2,138,811
Other debt 775,717 573,545 529,237
Bank acceptances outstanding 12,546 13,466 16,241
Other liabilities 271,221 288,817 245,220
------------ ------------ -------------
Total liabilities 17,269,449 16,481,521 15,736,970
Stockholders' equity:
Preferred stock 17,453 26,979 27,303
Common stock 96,441 96,465 94,483
Issued: September 30, 1995, 74,855,250 shares
Issued: December 31, 1994, 77,171,835 shares
Issued: September 30, 1994, 74,655,362 shares
Capital surplus 215,667 230,453 209,771
Retained earnings 1,252,859 1,172,062 1,137,709
Treasury stock (68,558) (10,669) (15,222)
Held: September 30, 1995, 2,297,615 shares
Held: December 31, 1994, 792,303 shares
Held: September 30, 1994, 931,811 shares
Restricted stock (609) (1,551) (1,589)
Unrealized losses on securities available for sale 1,314 (1,054) (995)
------------ ------------ -------------
Total stockholders' equity 1,514,567 1,512,685 1,451,460
------------ ------------ -------------
Total liabilities and stockholders' equity $ 18,784,016 $ 17,994,206 $ 17,188,430
============ ============ =============
-1-
</TABLE>
<TABLE>
<CAPTION>
FIRSTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
- --------------------------------------------------------------------------------------------
Three Months Ended Nine Months Ended
September 30 September 30
(thousands of dollars, except per share data) 1995 1994 1995 1994
- --------------------------------------------- ---------------------- ----------------------
(unaudited)
<S> <C> <C> <C> <C>
INTEREST REVENUE
Loans $ 275,384 $ 232,548 $ 805,350 $ 660,515
Securities 64,433 48,944 188,469 140,990
Interest-bearing deposits with banks 188 337 847 918
Federal funds sold and resale agreements 3,705 2,702 9,878 6,468
Trading securities 171 291 635 828
---------- ---------- ---------- ----------
Total interest revenue 343,881 284,822 1,005,179 809,719
INTEREST EXPENSE
Deposits 116,529 83,076 333,485 229,343
Short-term borrowed funds 34,298 19,168 100,104 43,492
Other debt 11,950 8,188 32,852 21,771
---------- ---------- ---------- ----------
Total interest expense 162,777 110,432 466,441 294,606
---------- ---------- ---------- ----------
NET INTEREST REVENUE 181,104 174,390 538,738 515,113
Provision for loan losses 5,778 3,789 28,901 10,341
---------- ---------- ---------- ----------
NET INTEREST REVENUE AFTER
LOAN LOSS PROVISION 175,326 170,601 509,837 504,772
OTHER OPERATING REVENUE
Trust and investment management fees 32,814 29,782 96,931 90,854
Service charges on deposit accounts 20,499 19,826 60,284 61,785
Credit card service revenue 16,376 14,032 45,148 39,976
Data processing fees 4,041 5,023 13,557 15,403
Securities (losses) gains 313 19 (5,748) 694
Other revenue 27,011 22,181 75,712 72,696
---------- ---------- ---------- ----------
Total other operating revenue 101,054 90,863 285,884 281,408
OTHER OPERATING EXPENSE
Salaries 80,805 77,859 244,101 232,558
Employee benefits 18,442 15,937 57,180 52,339
Equipment expense 14,805 13,594 43,625 40,020
Net occupancy expense 14,022 13,711 42,973 41,045
Net other real estate revenue (536) 188 (684) (234)
Restructuring expense 0 0 23,151 0
Processing loss 0 0 0 22,000
Other expense 46,952 47,943 147,909 142,741
---------- ---------- ---------- ----------
Total other operating expense 174,490 169,232 558,255 530,469
INCOME BEFORE INCOME TAXES 101,890 92,232 237,466 255,711
Applicable income taxes 34,813 31,759 80,322 85,544
---------- ---------- ---------- ----------
NET INCOME $ 67,077 $ 60,473 $ 157,144 $ 170,167
========== ========== ========== ==========
Net income applicable to common stock $ 66,771 $ 59,920 $ 155,891 $ 168,492
========== ========== ========== ==========
PER COMMON SHARE
Net income $.88 $.80 $2.05 $2.25
Dividends .34 .30 .98 .86
-2-
</TABLE>
<TABLE>
<CAPTION>
FIRSTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
- -------------------------------------------------------------------------------------------------------
Nine Months Ended
September 30
(thousands of dollars) 1995 1994
- -------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 157,144 $ 170,167
Adjustments:
Provision for loan losses 28,901 10,341
Depreciation, amortization, and accretion 33,308 31,843
Net decrease (increase) in trading securities 21,119 (19,465)
Net (increase) decrease in loans held for resale (133,531) 250,469
Losses (gains) on sale of assets 7,009 (2,112)
Increase in other assets (25,718) (36,514)
(Decrease) increase in other liabilities (12,916) 15,430
Other, net 3,910 (1,836)
------------- --------------
Net cash provided by operating activities 79,226 418,323
Cash Flows from Investing Activities:
Net decrease (increase) in federal funds sold and resale agreements 233,205 (45,846)
Net decrease in interest-bearing deposits with banks 26,628 39,009
Purchase of securities available for sale (5,332) (5,502)
Sale of securities available for sale 238,370 25,015
Maturities of securities available for sale 93,608 13,402
Maturities of securities held to maturity 494,309 748,150
Purchase of securities held to maturity (1,049,417) (960,838)
Net increase in loans (652,836) (935,425)
Cash acquired in acquisitions 294 4,600
Proceeds from sale of other real estate 10,239 15,022
Purchase of bank premises and equipment (38,586) (32,894)
Proceeds from sale of bank premises and equipment 2,920 787
------------- --------------
Net cash used in investing activities (646,598) (1,134,520)
Cash Flows from Financing Activities:
Net increase (decrease) in deposits 329,423 (495,778)
Net increase in short-term borrowed funds 198,148 1,000,057
Issuance of long-term debt 224,869 30,959
Repayment of long-term debt (21,540) (20,658)
Redemption of preferred stock (8,350) 0
Common stock transactions (84,035) (13,706)
Cash dividends (75,590) (62,515)
------------- --------------
Net cash provided by financing activities 562,925 438,359
Net decrease in cash and due from banks (4,447) (277,838)
Cash and due from banks at beginning of period 1,092,114 1,316,658
------------- --------------
Cash and due from banks at end of period $ 1,087,667 $ 1,038,820
============= ==============
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 444,207 $ 294,304
Income taxes 79,702 84,999
Transfer to other real estate from loans $ 7,458 $ 7,599
-3-
</TABLE>
FIRSTAR CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL FOOTNOTES (unaudited)
- -----------------------------------------------------
(thousands of dollars except as otherwise indicated)
1. The financial data presented herein are unaudited, but in the opinion
of management, reflect all adjustments which are necessary for a fair
presentation of such information. Results for interim periods should
not be considered indicative of results for a full year. Reference
should be made to the financial statements contained in the
registrant's annual report on Form 10-K/A for the year ended December
31, 1994.
2. Mergers and Acquisitions
On January 31, 1995, Firstar Corporation completed its merger with
First Colonial Bankshares Corporation, a $1.8 billion bank holding
company operating in the Chicago metro area. The transaction was
accounted for as a pooling of interests. The total number of shares of
Firstar common stock issued was 7,700,767 shares. All financial
information has been restated to reflect this transaction.
On March 23, 1995, Firstar Corporation completed its acquisition of
First Moline Financial Corporation, an $86 million thrift holding
company operating in Moline, Illinois. The transaction was accounted
for as a purchase with the issuance of 313,650 shares of Firstar common
stock.
On April 28, 1995, Firstar Corporation completed the acquisition of
Investors Bank Corp., a $1.1 billion thrift company operating in the
Minneapolis/St. Paul metro area. The transaction was accounted for
as a pooling of interests through the issuance of 3,006,923 shares of
Firstar common stock. All financial information has been restated to
reflect this transaction.
On July 24, 1995, Firstar Corporation announced it had reached an
agreement to acquire Harvest Financial Corp., a $350 million thrift
based in Dubuque, Iowa. Firstar has purchased in the market and will
reissue approximately 895,000 shares of common stock in exchange for all
the outstanding shares of Harvest Financial Corp. for a total purchase
price of $33.2 million, based on the September 30, 1995 closing price of
Firstar common stock. Firstar expects to complete this transaction by
the end of 1995 subject to approval by regulators and Harvest
shareholders.
3. Securities
The amortized cost and approximate market values of securities held to
maturity are as follows:
<TABLE>
<CAPTION>
September 30, 1995
--------------------------------------------------
Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Securities held to maturity:
U.S. Treasury and federal agencies $ 1,784,135 $ 32,400 $ (12,618)$ 1,803,917
Mortgage backed obligations of federal agencies 1,135,662 32,129 (2,117) 1,165,674
State and political subdivisions 1,090,140 18,697 (4,203) 1,104,634
Corporate debt 28,844 97 (102) 28,839
Equity securities 89,617 0 0 89,617
Other 48,251 0 0 48,251
----------- ----------- ----------- -----------
Total $ 4,176,649 $ 83,323 $ (19,040)$ 4,240,932
=========== =========== =========== ===========
Securities available for sale:
U.S. Treasury and federal agencies $ 64,603 $ 2,201 $ (18)$ 66,786
Mortgage backed obligations of federal agencies 12,181 121 (294) 12,008
State and political subdivisions 6,808 76 (29) 6,855
Corporate debt 51 0 0 51
----------- ----------- ----------- -----------
Total $ 83,643 $ 2,398 $ (341)$ 85,700
=========== =========== =========== ===========
</TABLE>
-4-
FIRSTAR CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL FOOTNOTES (unaudited)
- ---------------------------- -----------------------
4. Nonperforming Assets and Past Due Loans
<TABLE>
<CAPTION>
September 30 December 31 September 30
1995 1994 1994
----------- ----------- -----------
<S> <C> <C> <C>
Nonaccrual loans:
Commercial $ 24,103 $ 29,710 $ 42,249
Commercial - real estate 42,837 28,993 28,302
Consumer 14,159 9,831 9,336
----------- ----------- -----------
81,099 68,534 79,887
Renegotiated loans:
Commercial 41 71 71
Commercial - real estate 1,579 674 710
----------- ----------- -----------
1,620 745 781
Other real estate 7,979 13,282 13,187
----------- ----------- -----------
Total $ 90,698 $ 82,561 $ 93,855
=========== =========== ===========
Nonperforming assets as a percent of:
Loans and other real estate 0.72 % 0.69 % 0.81 %
Total assets 0.48 0.46 0.55
Loans past due 90 days and still accruing
Commercial $ 20,199 $ 7,432 $ 7,310
Commercial - eeal estate 12,465 3,760 8,403
Consumer 20,919 15,709 14,914
----------- ----------- -----------
Total $ 53,583 $ 26,901 $ 30,627
=========== =========== ===========
</TABLE>
5. Reserve for Loan Losses
<TABLE>
<CAPTION>
Nine Months Ended
September 30
------------------------
1995 1994
----------- -----------
<S> <C> <C>
Balance - beginning of period
As previously reported $ 172,606 $ 174,873
Adjustments for pooling of interests 17,946 14,841
----------- -----------
Balance - as restated 190,552 189,714
Provision for loan losses 28,901 10,341
Loan recoveries 14,376 14,901
Loan charge-offs (34,149) (27,688)
Reserves of acquired banks 865 1,211
----------- -----------
Balance - end of period $ 200,545 $ 188,479
=========== ===========
Net charge-offs to average loans .22% .16%
Reserve to period-end loans 1.58 1.63
</TABLE>
Firstar adopted Financial Accounting Standards Board Statements Nos.
114 and 118, Accounting by Creditors for Impairment of a Loan on
January 1, 1995. These statements establish procedures for determining
the appropriate reserve for loan losses for loans deemed impaired.
The calculation of reserve levels is based upon the discounted present
value of expected cash flows received from the debtor or other measures
of value such as market prices or collateral values. Firstar has
identified $66.9 million of loans considered to be impaired. Income
recognition for these loans is limited to actual cash receipts. These
statements did not have any impact on the current level of the reserve
for loan losses and is not expected to effect 1995 operating results.
-5-
FIRSTAR CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL FOOTNOTES (unaudited)
- ---------------------------- -----------------------
6. Firstar adopted Financial Accounting Standards Board Statement No. 122,
Accounting for Mortgage Servicing Rights. This statement requires that
separate assets be recognized for the rights to service mortgage loans
for others whether those servicing rights are purchased or related to
loans originated by the company. Changes in capitalized mortgage
servicing rights for the quarter and nine months ended September 30 were:
<TABLE>
<CAPTION>
Three Nine
Months Months
ended ended
9-30-95 9-30-95
----------- -----------
<S> <C> <C>
Balance - beginning of period $ 9,016 $ 6,324
Originated rights capitalized 2,440 4,150
Purchased rights capitalized 320 1,865
Amortization (712) (1,275)
Sales of servicing and loans (1,630) (1,630)
Allowance for impairment -- --
----------- -----------
Balance - end of period $ 9,434 $ 9,434
=========== ===========
</TABLE>
7. Changes in Stockholders' Equity
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
------------------------ ------------------------
1995 1994 1995 1994
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance - beginning of period $ 1,541,159 $ 1,424,507 1,512,685 1,359,314
Net income 67,077 60,473 157,144 170,167
Common stock issued 3,696 654 11,655 5,490
Common stock retired 0 (4,584) (24,688) (4,584)
Preferred stock converted (1,657) (138) (1,935) (1,613)
Preferred stock redemption 0 0 (8,350) 0
Treasury stock issued 0 0 9,276 0
Treasury stock purchased (68,940) (7,638) (68,940) (12,186)
Restricted stock transactions (38) 21 942 (388)
Change in unrealized gains(losses) on (387) (129) 2,368 (2,095)
securities available for sale
Dividends - common stock (26,038) (21,153) (74,338) (60,970)
- preferred stock (305) (553) (1,252) (1,675)
------------------------ ------------------------
Balance - end of period $ 1,514,567 $ 1,451,460 $ 1,514,567 $ 1,451,460
======================== ========================
</TABLE>
-6-
FIRSTAR CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL FOOTNOTES (unaudited)
- ---------------------------- -----------------------
8. Derivative Financial Instruments
The following table summarizes the various types of interest rate
contracts that Firstar uses for the purpose of managing interest
rate risk as of September 30, 1995.
<TABLE>
<CAPTION>
September 30, 1995
--------------------------------------------------------------
Market
12-31-94 Average Average Weighted Value
Notional Notional Receive Pay Average Asset
Amount Amount Rate Rate Maturity (Liability)
--------- --------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
(millions)
Interest rate swaps
Receive fixed rate
Index amortizing $ 290 $ 282 5.35 % 5.88 % 2.7 yr $ (3.9)
Other 75 65 6.97 7.47 .6 (0.1)
Receive variable 76 47 5.93 7.21 1.4 (1.6)
Periodic caps* 930 230 5.46 5.88 2.0 (0.5)
Interest rate floors** 301 551 5.88 5.7
Interest rate caps** 80 55 5.87 0.0
--------- --------- -----------
$ 1,752 $ 1,230 $ (0.4)
========= ========= ===========
* Periodic cap interest rate swaps with a notional value of
$700 million were terminated in June and July 1995.
**Interest rate floors and caps provide for the receipt of payments
when the index interest rate is below or above the predetermined
interest rate.
<\TABLE
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Firstar Corporation reported net income for the nine months ended September
30, 1995 of $157.1 million, or $2.05 per common share, down from $170.2
million, or $2.25 per common share, for the same period last year. Return on
common equity was 13.86% for the first nine months of the year, compared with
16.26% for the same period last year, while return on assets was 1.16%
compared to 1.40% during the same period last year.
Net income for the third quarter totaled $67.1 million, or $.88 per common
share, up from $60.5 million or $.80 per common share for the same quarter of
1994. Return on common equity was 17.45% in the third quarter of 1995
compared to 16.81% for the comparable 1994 period. Return on assets was
1.45% compared with 1.44% in the same period last year. Table 1 shows the
components of net interest revenue, net income and net interest margin.
</TABLE>
<TABLE>
<CAPTION>
Table 1. Condensed income statements - taxable equivalent basis
Three Months Ended Nine Months Ended
September 30 September 30
------------------------------- ----------------------------------------
1995 1994 Change 1995 1994 Change
------- ----------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
(millions of dollars) (millions of dollars)
Interest revenue $ 343.9 $ 284.8 $ 59.1 $ 1,005.2 $ 809.7 $ 195.5
Taxable-equivalent adjustment 8.5 9.0 (0.5) 25.0 26.1 (1.1)
------- ----------- --------- ------------ ------------ ------------
Interest revenue - taxable-equiv. 352.4 293.8 58.6 1,030.2 835.8 194.4
Interest expense 162.8 110.4 52.4 466.5 294.6 171.9
------- ----------- --------- ------------ ------------ ------------
Net interest revenue - tax.-equiv. 189.6 183.4 6.2 563.7 541.2 22.5
Provision for loan losses 5.8 3.8 2.0 28.9 10.3 18.6
Other operating revenue 101.1 90.9 10.2 285.9 281.4 4.5
Other operating expense 174.5 169.2 5.3 558.3 530.5 27.8
------- ----------- --------- ------------ ------------ ------------
Income before income taxes 110.4 101.3 9.1 262.4 281.8 (19.4)
Provision for income taxes 34.8 31.8 3.0 80.3 85.5 (5.2)
Taxable-equivalent adjustment 8.5 9.0 (0.5) 25.0 26.1 (1.1)
------- ----------- --------- ------------ ------------ ------------
Net income $ 67.1 $ 60.5 $ 6.6 $ 157.1 $ 170.2 $ (13.1)
======= =========== ========= ============ ============ ============
Yield on earning assets 8.26 % 7.72 % 0.54 8.28 % 7.57 % 0.71 %
Cost of interest-bearing liabilities 4.70 3.59 1.11 4.61 3.34 1.27
------- ----------- --------- ------------ ------------ ------------
Interest spread 3.56 4.13 (0.57) 3.67 4.23 (0.56)
Impact of interest-free funds 0.89 0.69 0.20 0.86 0.67 0.19
------- ----------- --------- ------------ ------------ ------------
Net interest margin 4.45 % 4.82 % (0.37) 4.53 % 4.90 % (0.37)%
======= =========== ========= ============ ============ ============
</TABLE>
In the first nine months of 1995 certain merger and restructuring charges
were taken in connection with four completed acquisitions. These expenses
totaled $43.0 million pre-tax and reduced net income by $5.4 million, or 7
cents per share, in the second quarter and $22.2 million, or 29 cents per
share in the first quarter.
<TABLE>
<CAPTION>
Table 2. Acquisition related restructuring costs
Nine
Months
Ended
9-30-95
---------
<S> <C>
(thousands of dollars)
Additional loan loss provisions $ 13,612
Losses on sales of securities 6,263
Restructuring expenses:
Employee severence 11,899
Facilities and equipment 4,801
Professional fees 2,531
Other 3,920
---------
23,151
---------
Total pre-tax costs 43,026
Income tax benefit 15,393
---------
Total $ 27,633
=========
Per common share impact $ 0.36
</TABLE>
-8-
Additional loan loss provisions of $13.6 million were taken to increase the
new acquisitions' loan loss reserve levels to conform with Firstar's policy.
Also, securities not compatible with Firstar's investment policy were sold
with a resulting loss of $6.3 million. These funds, totaling $146 million,
were redeployed in the securities portfolio with a resulting increase in the
net yield which will recover the realized loss within one year.
Acquisition related restructuring charges totaling $23.2 million are
included in operating expenses. Included in these charges were $11.9
million of costs associated with the severance of approximately 500 employees,
$4.8 million related with office closings and write-off of unusable equipment,
$2.5 million of professional fees and $3.9 million of other costs associated
with the mergers. The restructuring charge of $23.2 million consists of $17.3
million in anticipated cash expenditures and $5.9 million of non-cash asset
write-downs. Substantially all of the cash expenditures associated with these
charges should be made by the end of 1995.
Net interest revenue during the first nine months of 1995, on a taxable
equivalent basis, was $563.7 million which was $22.5 million, or 4.2%, above
the level of the same period last year. The net interest margin was 4.53%
during the first nine months compared to 4.90% a year earlier. The increase
in net interest revenue was attributable to the higher average earning asset
balances, which increased 12.8% from a year earlier, partially offset by the
reduced net interest margin. The margin has been compressed by rising cost of
funds which has not been fully offset by increased yields on earning assets.
Table 3 shows the components of interest revenue and expense along with
changes related to volumes and rates. Total interest revenue on a
taxable-equivalent basis increased by 23.2% to $1.0 billion during the first
nine months of 1995 compared to the same period last year. This resulted from
a 12.8% increase in average earning assets, along with higher interest rates.
The rate received on earning assets increased from 7.57% in the first nine
months of 1994 to 8.28% in the same period in 1995. Loan revenue increased
$144.9 million, or 21.8%, in the first nine months of 1995 compared to the
same period last year. The increased loan balances, up 11.1% from the same
period last year, along with higher rates, accounted for the increase in
revenue. Interest revenue from commercial loans increased $86.2 million due
to both higher balances and rates. Interest revenue from consumer loans
increased $58.7 million due to both higher balances and rates.
Total interest expense was $466.4 million during the first nine months of
1995, an increase of $171.8 million, or nearly 60%, from the same period last
year. Interest rates on liabilities increased from 3.34% in 1994 to 4.61% in
1995, which was a major factor in the increase of expense. Interest expense
on total deposits increased $104.1 million, or 45.4%, in the first nine months
of 1995 compared to the same period last year, due primarily to higher
interest rates. Interest paid on short-term borrowed funds increased by $56.6
million, or 130.2%, due to both higher average balances and rates.
Net cash flows of off-balance sheet derivative instruments used to manage
interest rate risk reduced net interest revenue by $8.0 million and net
interest margin by .06% during the first nine months of 1995. This compares
to an increase in net interest revenue of $2.8 million and an increase in net
interest margin of .02% during the same period in 1994. Using a most likely
interest rate scenario, it is expected that derivative financial instruments
will result in a reduction of net interest margin of approximately .01% during
the next twelve months.
The objective of Firstar's asset liability management policy is to maintain
adequate capital and liquidity and manage interest rate risk to produce an
acceptable level of net interest revenue. The policy is to employ an asset
liability management strategy which limits the potential impact of projected
interest rate changes to 5% of net income over the subsequent four quarters.
Using the most recent simulation modeling, we were within these guidelines.
Our recently completed asset-liability forecast shows our consolidated net
interest revenue increasing under our most likely rate scenario.
-9-
Table 3. Analysis of interest revenue and expense
<TABLE>
<CAPTION>
Nine Months Ended September 30
----------------------------------------------------------------
Interest Total Due to
---------------------- --------------------------
1995 1994 Change Volume Rate
----------- --------- ------------ ------------ ------------
(thousands of dollars)
<S> <C> <C> <C> <C> <C>
Interest-bearing deposits
with banks $ 847 $ 918 $ (71)$ (219)$ 148
Federal funds sold and
resale agreements 9,878 6,468 3,410 148 3,262
Trading securities 762 1,064 (302) (306) 4
Securities 207,998 161,534 46,464 33,216 13,248
Commercial loans 455,694 369,481 86,213 42,112 44,101
Consumer loans 354,973 296,326 58,647 35,220 23,427
----------- --------- ------------
Total loans 810,667 665,807 144,860 77,375 67,485
----------- --------- ------------
Total interest revenue 1,030,152 835,791 194,361 112,780 81,581
Interest-bearing demand 19,097 15,463 3,634 (540) 4,174
Money market accounts 63,894 39,671 24,223 797 23,426
Savings passbook 35,319 32,366 2,953 (1,853) 4,806
Certificates of deposit 215,175 141,843 73,332 34,597 38,735
----------- --------- ------------
Total deposits 333,485 229,343 104,142 20,126 84,016
Short-term borrowed funds 100,104 43,492 56,612 28,289 28,323
Long-term debt 32,852 21,771 11,081 6,161 4,920
----------- --------- ------------
Total interest expense 466,441 294,606 171,835 47,762 124,073
----------- --------- ------------
Net interest revenue $ 563,711 $ 541,185 $ 22,526 71,387 (48,861)
=========== ========= ============
Calculations are computed on a taxable-equivalent basis using a tax rate of 35%. The change attributable
to both volume and rate has been allocated proportionately to the changes due to volume
and rate.
</TABLE>
The provision for loan losses of $28.9 million was $18.6 million higher than
last year. As discussed previously, $13.6 million of this increase was a
merger related adjustment to loan loss reserve levels. Net charge-offs for
the first nine months were at a level of .22% of average outstanding loans
compared to .16% a year earlier. Charge-off levels for the first nine months
of 1994 were unusually low and the current periods' level of .22% is
consistent with recent experience. The reserve for loan losses represented
1.58% of total loans at September 30, 1995, down from 1.60% at year-end 1994
and 1.63% a year earlier.
Comparing the charge-off experience for the first three quarters of 1995,
the percentage of charge-offs to loans has declined from .28% in the first
quarter to .15% in the third quarter. The biggest decrease is shown in the
commercial portfolio, down from .26% in the first quarter to zero in the
third quarter. Credit card charge-offs are at 1.54% in the third quarter,
down from 1.76% in the first quarter. Other consumer loan charge-offs have
increased from .15% in the first quarter to .20% in the third quarter.
Loans that are 90-days past due and still accruing were $53.6 million on
September 30, 1995, an increase of $14.2 million since the first quarter.
Consumer past due loans as a percent of consumer loans, excluding credit card,
increased from .27% in the first quarter to .42% in the third quarter.
Commercial past due loans have also increased from .39% in the first quarter
to .46% in the third quarter. Consumer delinquency rates have deteriorated
over the last several quarters as the economic cycle progresses. Firstar's
current level of charge-offs has been at very favorable levels, but the
deterioration of the delinquency rates could result in higher charge-offs.
In both the consumer and commercial portfolios, some of the loans classified
as past due could be charged off or placed in nonaccrual status. In addition,
some of these loans are past due pending completion of the credit renewal
process.
Table 4 shows the detail of net charge-offs and 90-day past due loans.
-10-
<TABLE>
<CAPTION>
Table 4. Net charge-offs and 90-day past due loans
Quarter ended
------------------------------------------
9-30-95 6-30-95 3-31-95
------------ ------------ ------------
(thousands of dollars)
<S> <C> <C> <C>
Credit card $ 2,121 $ 2,468 $ 2,387
Other consumer 2,464 1,425 1,768
------------ ------------ ------------
Total consumer 4,585 3,893 4,155
Commercial 71 2,886 4,183
------------ ------------ ------------
Total net charge-offs $ 4,656 $ 6,779 $ 8,338
============ ============ ============
Net charge-offs as a % of:
Credit card 1.54 % 1.83 % 1.76 %
Other consumer 0.20 0.12 0.15
Total consumer 0.33 0.29 0.32
Commercial -- 0.17 0.26
Total loans 0.15 0.22 0.28
Consumer $ 20,919 $ 16,861 $ 13,054
Commercial 32,664 22,246 26,366
------------ ------------ ------------
Loans 90 days past due $ 53,583 $ 39,107 $ 39,420
============ ============ ============
Loans 90 days past due as a % of:
Consumer * 0.42 % 0.34 % 0.27 %
Commerical 0.46 0.32 0.39
Total loans * 0.44 0.33 0.34
*All percentages exclude credit card loans
</TABLE>
Nonperforming assets were $90.7 million at September 30, 1995, which
amounted to .72% of total loans and other real estate. This was an $8.1
million increase from the December 31, 1994 level which was .69% of total
loans and other real estate. Nonperforming assets have gone up in part due to
the application of Firstar's credit review policies to the loan portfolios of
the recently acquired banks. Nonperforming real estate related assets
increased $9.4 million. Commercial nonperforming loans decreased $5.6 million
and consumer nonperforming loans increased $4.3 million. Real estate related
nonperforming assets represent the major portion of the nonperforming
portfolio, with the balance at September 30, 1995 of $52.4 million, or 57.8%,
of total nonperforming assets. Commercial nonperforming assets currently
represent $24.1 million, or 26.6% of the nonperforming portfolio.
Other operating revenue, excluding securities gains and losses, increased by
3.9% to a level of $291.6 million in the first nine months of 1995 compared to
the same period last year. Firstar continues to emphasize growth in
non-interest revenue although recent growth trends have been lower than
previously experienced. Firstar's broad customer base provides opportunities
for expanded revenues as the marketplace looks to financial institutions for
services beyond traditional lending and deposit activities. Table 5 shows the
composition of other operating revenue.
<TABLE>
<CAPTION>
Table 5. Other operating revenue
Nine Months Ended
September 30, 1995
----------------------------------------
1995 1994 Change
------------ ------------ ------------
(thousands of dollars)
<S> <C> <C> <C>
Trust and investment management fees $ 96,931 $ 90,854 6.7 %
Service charges on deposit accounts 60,284 61,785 (2.4)
Credit card service revenue 45,148 39,976 12.9
Mortgage loan servicing 17,790 14,036 26.7
Mortgage loan origination 10,341 14,697 (29.6)
Data processing fees 13,557 15,403 (12.0)
Insurance revenue 8,927 8,584 4.0
Brokerage revenue 7,921 7,601 4.2
International fees 4,464 4,342 2.8
Foreign exchange gains 1,839 1,459 26.0
ATM fees 3,873 3,818 1.4
Safe deposit fees 3,175 3,005 5.7
Trading securities gains 1,725 157
Other 15,657 14,997 4.4
------------ ------------
Subotal 291,632 280,714 3.9
Securities (losses) gains (5,748) 694
Total ------------ ------------
$ 285,884 $ 281,408 1.6 %
============ ============
</TABLE>
Other operating revenue represents 34% of total revenue. An industry
measure of fee revenue prominence is the ratio of this revenue stream to
average assets. During the first nine months of 1995, this ratio was 2.15%
compared to 2.31% during the same period last year. While fee revenue
increased, the effect of the larger 11.3% growth in average assets is shown in
the reduction of this ratio to 2.15% during the first nine months of 1995.
Trust and investment management fees are the single largest source of fee
revenue, contributing $96.9 million, or 33%, of other operating revenue. This
level represents a 6.7% growth in revenue during the first nine months of 1995
compared to the same period last year. Trust assets under management were
$17.0 billion on September 30, 1995, a 12.6% increase from the year-end
level and 1.3% since June 30, 1995. Additionally, assets held in custody rose
by 36.4% to a level of $52.4 million during the same time period and 10.7%
since June 30, 1995.
Revenue from service charges on deposit accounts at $60.3 million for the
first nine months of 1995 was 2.4% lower than last year. This reduction was
primarily due to higher rate credits given to business customers for
services, thus reducing the level of cash payments necessary.
Credit card service revenues are the third largest source of fee revenue,
totaling $45.1 million during the first nine months of 1995, which was a
12.9% increase over the same period last year. The introduction of new credit
card products, increased merchant fee revenue and the repricing of service
charges have all contributed to this revenue growth.
Revenue from mortgage loan origination activities decreased 29.6% to $10.3
million during the first nine months of 1995 compared to the same period last
year, due to substantially reduced refinancing activity resulting from higher
interest rates, as well as increased pricing pressure from the market.
Mortgage loan servicing revenues increased to a level of $17.8 million,
representing a 26.7% increase over the first nine months of 1994. Included
in servicing revenue were gains on the sale of servicing rights of $5.6
million in 1995 and $3.6 million in 1994.
Data processing fee income declined 12% in the first nine months of 1995
from the same period last year. A shrinking customer base due to continuing
bank consolidations through mergers or acquisitions and conversions by smaller
community banks to in-house data processing systems has acted to reduce
revenues.
The remaining sources of other operating revenue derive from a wide range of
services and collectively increased by $2.1 million, or 4.7%, exclusive of
trading and securities transactions, in the first nine months of 1995 compared
to the same period last year.
Other operating expense increased to a level of $558.3 million for the first
nine months of 1995. Excluding the acquisition related restructuring charges
taken in the first nine months of this year and the check kiting loss in 1994,
expenses increased 5.2%. Personnel costs rose by 5.8% to a level of $301.3
million due in part to a bank acquisition that occurred late in 1994.
Nonpersonnel costs, excluding the restructuring charges in 1995 and the check
kiting loss in 1994, increased 4.6%. The check kiting loss reduced earnings
per share by $.17 in 1994.
Net occupancy expense increased $1.9 million, or 4.7% in the first nine
months of 1995 compared to the same period last year. The increase was due to
a bank acquisition late in 1994. Equipment expense increased $3.6 million, or
9% during the first nine months of 1995 compared to the same period last year.
The increase in equipment expense is also partly due to a bank acquisition
late in 1994 as well as to the purchase of more personal computer equipment
and installation of more networks.
In the third quarter, the FDIC reduced the rate charged for deposit
insurance to all BIF insured banks and refunded excess premiums paid. The
current rate of four cents per $100 of deposits is a permanent reduction from
the 23 cents per $100 of deposits previously charged to financial
institutions. Firstar's rebate was $7.3 million and was shown as a reduction
to expense. Firstar also currently has deposits subject to SAIF insurance
totaling approximately $1.1 billion. The insurance rate on these deposits
remains at 23 cents per $100 of deposits, thus creating a blended rate at the
banks holding both types of deposits.
-12-
The efficiency ratio, which is the ratio of expense to revenue, was 62.56%
in the first nine months of 1995 compared to 61.87% a year earlier. Firstar
has announced a corporate-wide restructuring program with a goal of reaching a
55% efficiency ratio in 1997. To reach a 55% efficiency ratio would require,
on an annual basis, either a $100 million reduction in expenses or a $180
million increase in revenue or some combination of both expense reduction and
revenue increases. The restructuring program is expected to be implemented
over the next 18 months. Restructuring related expenses, which could be
substantial, are expected to be taken in the first quarter of 1996.
The detail of other expense is shown in table 6.
<TABLE>
<CAPTION>
Table 6. Other operating expense
Nine Months Ended
September 30, 1995
----------------------------------------
1995 1994 Change
------------ ------------ ------------
(thousands of dollars)
<S> <C> <C> <C>
Salaries $ 244,101 $ 232,558 5.0 %
Employee benefits 57,180 52,339 9.2
------------ ------------
Total personnel expense 301,281 284,897 5.8
Net occupancy expense 42,973 41,045 4.7
Equipment expense 43,625 40,020 9.0
Business development 21,182 18,663 13.5
F.D.I.C. insurance 14,352 21,215 (32.3)
Stationery and supplies 15,240 13,024 17.0
Delivery 14,052 11,084 26.8
Professional fees 13,912 12,781 8.8
Information processing expense 16,485 15,424 6.9
Amortization of intangibles 9,353 8,681 7.7
Employee education/recruiting 6,157 5,584 10.3
Federal Reserve processing fees 3,398 3,635 (6.5)
Commissions and service fees 4,335 4,463 (2.9)
Wire communication 5,530 4,906 12.7
Processing and other losses 3,497 2,814 24.3
Credit card assessment fees 3,584 3,057 17.2
Net other real estate income (684) (234) 192.3
Published information 1,734 1,881 (7.8)
Insurance 1,674 1,104 51.6
Other 13,424 14,425 (6.9)
Check Kiting Loss 22,000
Restructuring charges 23,151 0
------------ ------------
Total nonpersonnel expense 256,974 245,572 4.6
------------ ------------
Total other operating expense $ 558,255 $ 530,469 5.2 %
============ ============
</TABLE>
Total assets on September 30, 1995 were $18.8 billion, an increase of $1.6
billion, or 9.3%, from the same time last year. Without the effect of the
acquisitions, the year-to-year increase would be 6.5%.
Earning assets totaled $17.1 billion on September 30, 1995, an increase of
$1.9 billion, or 9.8%, over the total for September 30, 1994. Loans, the
largest category of earning assets, represented 74.3% of earning assets as
compared to 74.4% a year earlier. Total loans were $12.7 billion on September
30, 1995, an increase of $1.1 billion, or 9.5%, over the 1994 level, which
excludes loans which have been securitized and held in the investment
portfolio. Firstar securitized $330 million of residential mortgages near the
end of 1994.
Commercial loans, which account for 56% of the loan portfolio, increased by
$726.7 million, or 11.3%, to $7.1 billion on September 30, 1995. Consumer
loans totaled $5.5 billion, an increase of $707.4 million, or 13.7% as
compared to the same time last year, adjusted for the securitization. Credit
card loans increased $46.5 million, or 9.2% over September 30, 1994.
Residential mortgages increased $536.1 million, or 21.9% over the same period
last year adjusted for the effect of the securitization. Recent mortgage loan
originations have been retained in the loan portfolio rather than being sold
into the secondary market, contributing to this increase in balances. Total
loan growth slowed somewhat during the third quarter, increasing 6% from the
June level on an annualized basis. Firstar expects this trend to continue.
-13-
Short-term investments, which include interest-bearing deposits with banks,
trading account securities, and federal funds sold and resale agreements,
totaled $131.9 million on September 30, 1995, a decrease of $260.9 million
from a year earlier. These funds have been used to purchase longer term
investment securities and to fund loan growth.
Securities represented 25.8% of earning assets at September 30, 1995. They
totaled $4.3 billion on September 30, 1995, an increase of $344.2 million, or
9.6%, over last year, adjusted for securitization. The average maturity of the
portfolio was 3.9 years at the end of September. In October, the Financial
Accounting Standards Board has decided to modify Statement 115, "Accounting
for Certain Investments in Debt and Equity Securities" by allowing a one time
reclassification of portfolio securities as of the end of 1995. This decision
means companies will be able to reexamine their investments and determine if
they are properly classified between "held to maturity" and "available for
sale". Within the time allowed for change before December 31, 1995, companies
can move securities from held to maturity to available for sale without being
called into question as to their intent to hold securities to maturity in the
future or their past financial reporting. Firstar expects to examine its
securities portfolio and make any reclassifications deemed appropriate.
Fund sources, consisting of deposits and borrowed funds, increased by $1.5
billion, or 9.8%, to $17 billion on September 30, 1995. Total deposits were
$13.8 billion, an increase of $1.1 billion, or 7.8% over a year earlier.
Approximately one-half of the increase in deposits was due to a bank
acquisition that occurred late in 1994.
Core deposits, which include transaction accounts and other stable time
deposits, are Firstar's prime source of funding. These deposits equaled $12.9
billion on September 30, 1995, an increase of $836.4 million, or 6.9%, from
last year due mainly to bank acquisitions. Increased competition for consumer
deposits and heightened consumer sensitivity to interest rates have limited
Firstar's core deposit growth. Increased emphasis will be placed on
generating more core deposits through competitive pricing of deposit products.
More reliance was placed on purchased fund sources to support the growth in
loan balances during 1995. Other time deposits, primarily certificates of
deposit over $100,000, increased $168.7 million, or 23.7%, on September 30,
1995 from a year ago. Short-term borrowed funds increased $258.6 million, or
12.1%, to a level of $2.4 billion in the same period. In addition, Federal
Home Loan Bank Notes increased $140.3 million, or 38.4% to a level of $505.3
million in the same period. Although Firstar intends to generate more core
deposits, purchased fund balances will continue to increase in order to
support loan growth.
In August, Firstar issued $100 million of 7.15% notes that become due
September 1, 2000. Firstar has the option of calling these notes beginning in
September 1998. Additional indebtedness in the form of a revolving bank
credit line, which is currently available up to $125 million, may be incurred.
These borrowings are needed in the near future to fund certain commitments
for such items as stock repurchases, repayment of outstanding indebtedness,
extensions of credit to subsidiaries and other general corporate purposes.
Stockholders' equity totaled $1,514.6 million at the end of the third
quarter, an increase of $1.9 million from the level at year-end and $63.1
million over the total at September 30, 1994. Total equity as a percent of
total assets amounted to 8.06% at September 30, 1995. Under risk-based
capital rules, total capital at September 30, 1995 was 12.93% of risk-adjusted
assets. Firstar repurchased 1,969,000 shares of common stock in the third
quarter to be used to complete a bank acquisition, for issuance under employee
benefit plans and other corporate purposes. A summary of capital components
and ratios is shown in table 7.
-14-
<TABLE>
<CAPTION>
Table 7. Capital components and ratios
September 30 December 31 September 30
1995 1994 1994
------------ ------------ ------------
(thousands of dollars)
<S> <C> <C> <C>
Risk-based capital:
Stockholders' equity $ 1,514,567 $ 1,512,685 $ 1,451,460
Unrealized (gains) losses on securities available for sale (1,314) 1,054 995
Minority interest in subsidiaries 3,020 2,920 2,537
Less goodwill (108,381) (107,967) (108,044)
------------ ------------ ------------
Total Tier I capital 1,407,892 1,408,692 1,346,948
Allowable reserve for loan losses 165,563 156,426 150,153
Allowable long-term debt 134,336 79,705 79,974
------------ ------------ ------------
Total Tier II capital 299,899 236,131 230,127
------------ ------------ ------------
Total capital $ 1,707,791 $ 1,644,823 $ 1,577,075
============ ============ ============
Risk-adjusted assets $ 13,210,045 $ 12,479,987 $ 11,973,953
Tier I capital to risk-adjusted assets 10.66 % 11.29 % 11.25 %
Total capital to risk-adjusted assets 12.93 13.18 13.17
Tier I leverage ratio 7.71 8.15 8.15
</TABLE>
The Board of Directors declared a quarterly dividend to common stockholders
of 34 cents per share, which is payable November 15 to shareholders of record
on October 30, and a quarterly dividend of $8.75 per Series D preferred share,
payable December 31 to shareholders of record December 15.
-15-
<TABLE>
<CAPTION>
FIRSTAR CORPORATION AND SUBSIDIARIES
ADDITIONAL FINANCIAL DATA (unaudited)
- --------------------------------------------------------------------------------------------------
Selected Financial Data
(thousands of dollars, except per share)
Quarter ended Nine Months ended
September 30 September 30
--------------------- ------------------------------
1995 1994 1995 1994
--------------------- ------------------------------
<S> <C> <C> <C> <C>
Earnings and Dividends
Net income $ 67,077 $ 60,473 $ 157,144 $ 170,167
Per common share:
Net income 0.88 0.80 2.05 2.25
Dividends 0.34 0.30 0.98 0.86
Stockholders' equity 20.00 19.08
Performance Ratios
Return on average assets 1.45 % 1.44 1.16 % 1.40 %
Return on average common equity 17.45 16.81 13.86 16.26
Dividend payout ratio 38.64 37.50 47.80 38.22
Equity to assets 8.06 8.44
Net loan charge-offs as a percentage
of average loans 0.15 0.25 0.22 0.16
Nonperforming assets as a
percentage of loans and other
real estate 0.72 0.81
Net interest margin 4.45 4.82 4.53 4.90
Statistical Data
Full-time equivalent staff (at quarter end) 9,524 9,796
Average common shares
outstanding (000's) 75,891 74,886 76,087 74,910
Actual common shares
outstanding (000's at quarter end) 74,855 74,655
Stock Price Information
High $ 38.375 $ 35.125 $ 38.375 $ 35.375
Low 32.500 29.625 26.250 29.625
Close 37.125 31.000 37.125 31.000
-16-
</TABLE>
<TABLE>
<CAPTION>
FIRSTAR CORPORATION AND SUBSIDIARIES
ADDITIONAL FINANCIAL DATA (Unaudited)
- ------------------------------------------------------------------------------------------------------
Consolidated Average Balance Sheets, Net Interest Revenue and Rate Analysis
(Thousands of Dollars)
Quarter ended September 30
----------------------------------------------------------------------
1995 1994
------------------------------------ ---------------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
------------------------------------ ---------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Interest-bearing deposits
with banks $ 9,199 $ 188 8.11 % $ 22,704 $ 337 5.89 %
Federal funds sold and
resale agreements 243,729 3,705 6.03 230,406 2,702 4.65
Trading securities 11,892 197 6.57 20,761 378 7.22
Securities:
Taxable 3,159,348 51,281 6.46 2,448,910 36,576 5.94
Nontaxable 1,076,690 19,841 7.37 1,113,880 19,417 6.97
----------- --------- ----------- ---------
Total securities 4,236,038 71,122 6.69 3,562,790 55,993 6.26
Loans:
Commercial 6,961,988 155,925 8.89 6,272,509 130,956 8.29
Consumer 5,498,765 121,264 8.78 5,030,932 103,471 8.19
----------- --------- ----------- ---------
Total loans 12,460,753 277,189 8.84 11,303,441 234,427 8.24
----------- --------- ----------- ---------
Interest earning assets 16,961,611 352,401 8.26 15,140,102 293,837 7.72
Reserve for loan losses (200,960) (191,744)
Cash and due from banks 782,588 909,545
Other assets 835,638 787,122
----------- -----------
Total assets $ 18,378,877 $ 16,645,025
=========== ===========
Liabilities and
Stockholders' Equity
Interest-bearing demand $ 1,550,721 $ 5,369 1.37 % $ 1,623,560 $ 5,107 1.25 %
Money market accounts 2,121,584 22,402 4.19 2,043,828 15,245 2.96
Savings passbook 1,724,086 11,554 2.66 1,854,251 10,955 2.34
Certificates of deposit 5,386,854 77,204 5.69 4,478,452 51,769 4.59
Short-term borrowed funds 2,311,497 34,298 5.89 1,709,076 19,168 4.45
Other debt 657,338 11,950 7.27 491,954 8,188 6.66
----------- --------- ----------- ---------
Interest-bearing liabilities 13,752,080 162,777 4.70 12,201,121 110,432 3.59
Demand deposits 2,796,011 2,746,068
Other liabilities 294,626 256,144
Stockholders' equity 1,536,160 1,441,692
----------- -----------
Total liabilities and
stockholders' equity $ 18,378,877 $ 16,645,025
=========== ===========
Net interest
revenue/margin $ 189,624 4.45 % $ 183,405 4.82 %
========= =========
</TABLE>
:
<TABLE>
<CAPTION>
Nine months ended September 30
------------------------------------ ---------------------------------
1995 1994
---------------------------------- ---------------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
------------------------------------ ---------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Interest-bearing deposits
with banks $ 18,757 $ 847 6.04 % $ 23,951 $ 918 5.12 %
Federal funds sold and
resale agreements 217,209 9,878 6.08 212,456 6,468 4.07
Trading securities 14,729 762 6.92 20,647 1,064 6.89
Securities:
Taxable 3,107,132 149,044 6.41 2,389,052 105,225 5.88
Nontaxable 1,049,697 58,954 7.49 1,090,027 56,309 6.89
----------- --------- ----------- ---------
Total securities 4,156,829 207,998 6.68 3,479,079 161,534 6.20
Loans:
Commercial 6,802,663 455,694 8.96 6,139,535 369,481 8.05
Consumer 5,418,816 354,973 8.75 4,865,638 296,326 8.13
----------- --------- ----------- ---------
Total loans 12,221,479 810,667 8.86 11,005,173 665,807 8.08
----------- --------- ----------- ---------
Interest earning assets 16,629,003 1,030,152 8.28 14,741,306 835,791 7.57
Reserve for loan losses (196,364) (191,327)
Cash and due from banks 845,474 945,910
Other assets 824,039 766,413
----------- -----------
Total assets $ 18,102,152 $ 16,262,302
=========== ===========
Liabilities and
Stockholders' Equity
Interest-bearing demand $ 1,582,602 $ 19,097 1.61 % $ 1,644,739 $ 15,463 1.26 %
Money market accounts 2,060,825 63,894 4.15 2,021,228 39,671 2.62
Savings passbook 1,750,191 35,319 2.70 1,852,091 32,366 2.34
Certificates of deposit 5,247,463 215,175 5.48 4,313,914 141,843 4.40
Short-term borrowed funds 2,267,014 100,104 5.90 1,494,589 43,492 3.89
Other debt 603,918 32,852 7.25 457,816 21,771 6.34
----------- --------- ----------- ---------
Interest-bearing liabilities 13,512,013 466,441 4.61 11,784,377 294,606 3.34
Demand deposits 2,767,655 2,799,266
Other liabilities 296,678 265,327
Stockholders' equity 1,525,806 1,413,332
----------- -----------
Total liabilities and
stockholders' equity $ 18,102,152 $ 16,262,302
=========== ===========
Net interest
revenue/margin $ 563,711 4.53 % $ 541,185 4.90 %
========= =========
-17-
</TABLE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits to Part 1 of Form 10-Q
27. Financial Data Schedule
(b) No reports on Form 8-K were filed during the quarter
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.
FIRSTAR CORPORATION
/s/ William H. Risch
________________
William H. Risch
Senior Vice President-Finance and
Treasurer (Chief Financial Officer)
November 10, 1995
-18-
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<CASH> 1,087,667
<INT-BEARING-DEPOSITS> 5,906
<FED-FUNDS-SOLD> 118,099
<TRADING-ASSETS> 7,931
<INVESTMENTS-HELD-FOR-SALE> 85,700
<INVESTMENTS-CARRYING> 4,176,649
<INVESTMENTS-MARKET> 4,240,932
<LOANS> 12,676,333
<ALLOWANCE> 200,545
<TOTAL-ASSETS> 18,784,016
<DEPOSITS> 13,812,566
<SHORT-TERM> 2,397,399
<LIABILITIES-OTHER> 283,767
<LONG-TERM> 775,717
<COMMON> 96,441
0
17,453
<OTHER-SE> 1,400,673
<TOTAL-LIABILITIES-AND-EQUITY> 18,784,016
<INTEREST-LOAN> 805,350
<INTEREST-INVEST> 188,469
<INTEREST-OTHER> 11,360
<INTEREST-TOTAL> 1,005,179
<INTEREST-DEPOSIT> 333,485
<INTEREST-EXPENSE> 466,441
<INTEREST-INCOME-NET> 538,738
<LOAN-LOSSES> 28,901
<SECURITIES-GAINS> (5,748)
<EXPENSE-OTHER> 558,255
<INCOME-PRETAX> 237,466
<INCOME-PRE-EXTRAORDINARY> 157,144
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 157,144
<EPS-PRIMARY> 2.05
<EPS-DILUTED> 2.05
<YIELD-ACTUAL> 4.53
<LOANS-NON> 81,099
<LOANS-PAST> 53,583
<LOANS-TROUBLED> 1,620
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 190,552
<CHARGE-OFFS> 34,149
<RECOVERIES> 14,376
<ALLOWANCE-CLOSE> 200,545
<ALLOWANCE-DOMESTIC> 199,890
<ALLOWANCE-FOREIGN> 655
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
