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 JUNE 30, 1996 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) 765-5748
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 July 29, 1996, 75,178,457 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 7
Additional Financial Data 15
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 17
SIGNATURES 17
<TABLE>
<CAPTION>
FIRSTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
- ------------------------------------------------------------------------------------------------
June 30 December 31 June 30
(thousands of dollars) 1996 1995 1995
- ------------------------------------------------------ ------------ ------------ ------------
(unaudited) (unaudited)
<S> <C> <C> <C>
ASSETS
Cash and due from banks $ 1,066,838 $ 1,310,746 $ 953,824
Interest-bearing deposits with banks 10,402 5,467 6,342
Federal funds sold and resale agreements 89,879 109,945 258,943
Trading securities 9,347 10,029 17,929
Securities held to maturity (market value $2,313,276,
$2,492,346 and $4,052,234 on June 30, 1996,
December 31, 1995 and June 30, 1995) 2,303,223 2,427,030 3,988,223
Securities available for sale 2,013,629 2,047,848 214,906
Loans:
Commercial and industrial 3,245,776 3,078,148 3,169,201
Real estate 2,854,273 2,849,388 2,823,817
Other 873,139 1,038,677 957,295
------------ ------------ ------------
Commercial loans 6,973,188 6,966,213 6,950,313
Credit card 611,950 619,868 544,423
Real estate - mortgage 2,695,426 2,722,531 2,689,915
Home equity 988,537 935,907 885,511
Other 1,386,623 1,387,994 1,413,269
------------ ------------ ------------
Consumer loans 5,682,536 5,666,300 5,533,118
------------ ------------ ------------
Total loans 12,655,724 12,632,513 12,483,431
Reserve for loan losses (205,041) (195,283) (199,423)
------------ ------------ ------------
Loans - net 12,450,683 12,437,230 12,284,008
Bank premises and equipment 350,548 349,233 345,485
Customer acceptance liability 19,583 16,060 30,072
Other assets 498,248 454,712 472,114
------------ ------------ ------------
Total assets $ 18,812,380 $ 19,168,300 $ 18,571,846
============ ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand $ 3,120,027 $ 3,461,462 $ 2,893,599
Interest-bearing demand 1,513,355 1,602,350 1,556,554
Money market accounts 2,470,748 2,335,429 2,005,050
Savings passbook 1,598,782 1,634,430 1,750,815
Certificates of deposit 5,333,198 5,277,975 5,401,863
------------ ------------ ------------
Total deposits 14,036,110 14,311,646 13,607,881
Short-term borrowed funds 2,503,259 2,303,159 2,578,821
Other debt 589,074 734,021 547,346
Bank acceptances outstanding 19,583 16,060 30,072
Other liabilities 248,577 278,594 266,567
------------ ------------ ------------
Total liabilities 17,396,603 17,643,480 17,030,687
Stockholders' equity:
Preferred stock 12,359 15,344 19,110
Common stock 94,266 94,266 96,196
Issued: June 30, 1996, 75,413,098 shares
Issued: December 31, 1995, 75,413,098 shares
Issued: June 30, 1995, 76,956,450 shares
Capital surplus 142,007 147,502 215,199
Retained earnings 1,352,501 1,298,857 1,212,124
Treasury stock (187,890) (64,834) (2,600)
Held: June 30, 1996, 4,251,107 shares
Held: December 31, 1995, 2,186,834 shares
Held: June 30, 1995, 478,653 shares
Restricted stock (17) (442) (571)
Unrealized gains on securities available for sale 2,551 34,127 1,701
------------ ------------ ------------
Total stockholders' equity 1,415,777 1,524,820 1,541,159
------------ ------------ ------------
Total liabilities and stockholders' equity $ 18,812,380 $ 19,168,300 $ 18,571,846
============ ============ ============
-1-
</TABLE>
<TABLE>
<CAPTION>
FIRSTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
- --------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30 June 30
(thousands of dollars, except per share data) 1996 1995 1996 1995
- --------------------------------------------- ---------------------- ----------------------
(unaudited)
<S> <C> <C> <C> <C>
INTEREST REVENUE
Loans $ 272,842 $ 271,356 $ 548,255 $ 530,076
Securities 66,791 64,076 133,029 123,926
Interest-bearing deposits with banks 109 241 257 659
Federal funds sold and resale agreements 1,049 3,102 1,698 6,173
Trading securities 110 246 241 464
---------- ---------- ---------- ----------
Total interest revenue 340,901 339,021 683,480 661,298
INTEREST EXPENSE
Deposits 113,741 113,706 228,507 216,956
Short-term borrowed funds 31,914 36,123 62,458 66,744
Other debt 10,981 10,083 23,914 19,964
---------- ---------- ---------- ----------
Total interest expense 156,636 159,912 314,879 303,664
---------- ---------- ---------- ----------
NET INTEREST REVENUE 184,265 179,109 368,601 357,634
Provision for loan losses 10,846 9,987 20,055 23,123
---------- ---------- ---------- ----------
NET INTEREST REVENUE AFTER
LOAN LOSS PROVISION 173,419 169,122 348,546 334,511
OTHER OPERATING REVENUE
Trust and investment management fees 36,131 32,433 71,578 64,117
Service charges on deposit accounts 21,435 20,028 42,694 39,785
Credit card service revenue 17,869 14,817 33,437 28,772
Data processing fees 4,548 4,597 9,164 9,516
Securities gains (losses) 1 (378) 42 (6,061)
Other revenue 26,239 25,118 54,363 48,701
---------- ---------- ---------- ----------
Total other operating revenue 106,223 96,615 211,278 184,830
OTHER OPERATING EXPENSE
Salaries 76,534 82,203 158,674 163,296
Employee benefits 19,372 19,325 38,749 38,738
Equipment expense 14,930 14,950 31,605 28,820
Net occupancy expense 14,661 14,418 30,574 28,951
Net foreclosed assets expense (income) 428 195 536 (148)
Restructuring expense 0 3,155 50,237 23,151
Other expense 43,605 49,763 87,077 100,957
---------- ---------- ---------- ----------
Total other operating expense 169,530 184,009 397,452 383,765
INCOME BEFORE INCOME TAXES 110,112 81,728 162,372 135,576
Applicable income taxes 39,949 27,946 55,091 45,509
---------- ---------- ---------- ----------
NET INCOME $ 70,163 $ 53,782 $ 107,281 $ 90,067
========== ========== ========== ==========
Net income applicable to common stock $ 69,947 $ 53,383 $ 106,813 $ 89,120
========== ========== ========== ==========
PER COMMON SHARE
Net income $.96 $.70 $1.46 $1.17
Dividends .38 .34 .72 .64
-2-
</TABLE>
<TABLE>
<CAPTION>
FIRSTAR CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
- -------------------------------------------------------------------------------------------------------
Six Months Ended
June 30
(thousands of dollars) 1996 1995
- -------------------------------------------------------------------------------------------------------
(unaudited)
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $ 107,281 $ 90,067
Adjustments:
Provision for loan losses 20,055 23,123
Depreciation, amortization, and accretion 35,988 21,931
Net (increase) decrease in trading securities 682 11,121
Net decrease in loans held for resale 183,230 (99,413)
Gain on sale of assets (148) 7,960
Decrease (increase) in other assets (24,686) (28,146)
Decrease in other liabilities (26,140) (19,130)
Other, net 4,299 3,038
------------- --------------
Net cash provided by operating activities 300,561 10,551
Cash Flows from Investing Activities:
Net decrease in federal funds sold and resale agreements 20,066 92,361
Net (increase) decrease in interest-bearing deposits with banks (4,935) 27,190
Purchase of securities available for sale (231,240) (4,801)
Sale of securities available for sale 38,430 238,370
Maturities of securities available for sale 208,521 91,738
Maturities of securities held to maturity 224,579 422,050
Purchase of securities held to maturity (95,548) (914,013)
Net decrease (increase) in loans 76,730 (485,782)
Cash acquired in acquisitions 4,901 294
Proceeds from sale of foreclosed assets 4,409 7,834
Purchase of bank premises and equipment (23,402) (28,338)
Proceeds from sale of bank premises and equipment 2,774 1,093
------------- --------------
Net cash provided by (used in) investing activities 225,285 (552,004)
Cash Flows from Financing Activities:
Net (decrease) increase in deposits (519,620) 124,738
Net increase in short-term borrowed funds 140,100 331,070
Issuance of long-term debt 0 35,260
Repayment of long-term debt (161,947) (11,802)
Common/treasury stock repurchases (189,893) (8,350)
Common/treasury stock transactions 15,329 (18,506)
Cash dividends (53,723) (49,247)
------------- --------------
Net cash provided by financing activities (769,754) 403,163
Net decrease in cash and due from banks (243,908) (138,290)
Cash and due from banks at beginning of period 1,310,746 1,092,114
------------- --------------
Cash and due from banks at end of period $ 1,066,838 $ 953,824
============= ==============
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $ 325,759 $ 290,253
Income taxes 73,793 56,372
Transfer to foreclosed assets from loans $ 5,815 $ 4,882
-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 for the year ended December
31, 1995.
2. Mergers and Acquisitions
On July 12, 1996, Firstar Corporation completed the acquisition of
American Bancorporation, Inc., and its parent, Jacob Schmidt Company,
a $1.2 billion bank holding company. The transaction was accounted
for as a purchase with the issuance of 4,000,000 shares of Firstar
treasury stock and payment of $38.6 million in cash.
3. Securities
The amortized cost and approximate market values of securities
are as follows:
<TABLE>
<CAPTION>
June 30, 1996
--------------------------------------------------
Estimated
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Securities held to maturity:
U.S. Treasury and federal agencies $ 1,893 $ 2 $ (3)$ 1,892
Mortgage backed obligations of federal agencies 1,186,848 19,933 (10,684) 1,196,097
State and political subdivisions 1,102,082 10,757 (9,971) 1,102,868
Corporate debt 12,367 53 (34) 12,386
Other 33 0 0 33
----------- ----------- ----------- -----------
Total $ 2,303,223 $ 30,745 $ (20,692)$ 2,313,276
=========== =========== =========== ===========
Securities available for sale:
U.S. Treasury and federal agencies $ 1,861,205 $ 17,969 $ (13,734)$ 1,865,440
Mortgage backed obligations of federal agencies 9,051 87 (285) 8,853
State and political subdivisions 9,197 41 (63) 9,175
Corporate debt 273 0 (1) 272
Equity securities 103,642 0 0 103,642
Money market mutual funds 26,247 0 0 26,247
----------- ----------- ----------- -----------
Total $ 2,009,615 $ 18,097 $ (14,083)$ 2,013,629
=========== =========== =========== ===========
</TABLE>
4. Nonperforming Assets and Past Due Loans
<TABLE>
<CAPTION>
June 30 December 31 June 30
1996 1995 1995
----------- ----------- -----------
<S> <C> <C> <C>
Nonaccrual loans:
Commercial $ 32,828 $ 26,239 $ 26,748
Commercial - real estate 36,363 46,959 44,070
Consumer 16,933 16,187 13,743
----------- ----------- -----------
86,124 89,385 84,561
Renegotiated loans:
Commercial 38 40 41
Commercial - real estate 1,331 1,336 1,610
----------- ----------- -----------
1,369 1,376 1,651
Foreclosed assets 9,905 7,141 7,526
----------- ----------- -----------
Total $ 97,398 $ 97,902 $ 93,738
=========== =========== ===========
Nonperforming assets as a percent of:
Loans and foreclosed assets .77 % .77 % .75 %
Total assets .52 .51 .50
Loans past due 90 days and still accruing
Commercial $ 18,446 $ 21,039 $ 8,733
Commercial - eeal estate 11,393 9,287 13,513
Consumer 21,125 19,084 16,861
----------- ----------- -----------
Total $ 50,964 $ 49,410 $ 39,107
=========== =========== ===========
-4-
</TABLE>
5. Reserve for Loan Losses
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
----------------------- ------------------------
1996 1995 1996 1995
--------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance - beginning of period $ 202,857 $ 196,215 $ 195,283 $ 190,552
Provision for loan losses 10,846 9,987 20,055 23,123
Loan recoveries 7,682 4,525 13,369 8,482
Loan charge-offs (16,344) (11,304) (28,123) (23,599)
Reserves of acquired banks 0 0 4,457 865
--------- ----------- ----------- -----------
Balance - end of period $ 205,041 $ 199,423 $ 205,041 $ 199,423
========= =========== =========== ===========
Net charge-offs to average loans .27 % .22 % .23 % .25 %
Reserve to period-end loans 1.62 1.60 1.62 1.60
</TABLE>
6. Changes in Stockholders' Equity
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
------------------------ ------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balance - beginning of period $ 1,494,388 $ 1,515,831 $ 1,524,820 $ 1,512,685
Net income 70,163 53,782 107,281 90,067
Common stock issued 0 4,089 0 7,959
Common stock retired 0 (281) (11) (24,688)
Preferred stock converted (1,419) (278) (2,934) (278)
Preferred stock redemption 0 (8,350) 0 (8,350)
Treasury stock issued 6,768 0 54,301 9,276
Treasury stock purchased (113,875) 0 (182,566) 0
Restricted stock transactions 8 898 102 980
Change in unrealized gains(losses) on 0 0 0 0
securities available for sale (12,124) 1,808 (31,576) 2,755
Dividends - common stock (27,916) (25,941) (53,168) (48,300)
- preferred stock (216) (399) (472) (947)
------------------------ ------------------------
Balance - end of period $ 1,415,777 $ 1,541,159 $ 1,415,777 $ 1,541,159
======================== ========================
</TABLE>
-5-
FIRSTAR CORPORATION AND SUBSIDIARIES
SUPPLEMENTAL FOOTNOTES (unaudited)
- ---------------------------- -----------------------
7. 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.
<TABLE>
<CAPTION>
June 30, 1996
--------------------------------------------------------------
Market
12-31-95 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 $ 269 $ 156 5.21 % 5.54 % 1.7 yr $ (1.7)
Other 55 35 8.55 8.25 0.1
Receive variable 37 37 5.36 8.01 1.4 (0.9)
Interest rate floors* 601 601 4.88 3.1 2.3
Interest rate caps* 100 100 6.25 0.3
--------- --------- -----------
$ 1,062 $ 929 $ (0.3)
========= ========= ===========
*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.
8. New Accounting Rules
The Financial Accounting Standards Board issued Statement No. 121,
Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to be Disposed of", which Firstar adopted in 1996. The statement
requires that long-lived assets and certain identifiable intangibles to
be held and used by a company be reviewed for impairment whenever events
or circumstances indicate that the carrying amount of an asset may not be
recoverable. The adoption of this statement did not have any significant
impact on the results of operations.
-6-
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Firstar Corporation's net income for the first six months of 1996 was
$107.3 million, or $1.46 per common share, up from the $90.1 million, or
$1.17 per common share, for the same period last year. This represented
a 24.8% increase in earnings per share. Return on common equity was
14.32% for the first half of the year, compared with 12.01% for the same
period last year, while return on average assets was 1.14% compared to
1.01% during the first half of last year.
Net income for the second quarter totaled $70.2 million, or $.96 per
common share, up from $53.8 million, or $.70 per common for the same
quarter of 1995. This represented a 37.1% increase in earnings per
share. Return on common equity was 19.35% in the second quarter of 1996
compared to 14.19% in the same period of last year. Return on average
assets was 1.50% compared with 1.19% last year.
Table 1 shows the components of net income and net interest margin.
INSERT TABLE 1
</TABLE>
<TABLE>
<CAPTION>
Table 1. Condensed income statements - taxable equivalent basis
Three Months Ended Six Months Ended
June 30 June 30
----------------------------------- ----------------------------------------
1996 1995 Change 1996 1995 Change
----------- ----------- --------- ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
(millions of dollars) (millions of dollars)
Interest revenue $ 340.9 $ 339.1 $ 1.8 $ 683.5 $ 661.3 $ 22.2
Taxable-equivalent adjustment 8.4 8.0 0.4 17.0 16.5 0.5
----------- ----------- --------- ------------ ------------ ------------
Interest revenue - taxable-equivalent 349.3 347.1 2.2 700.5 677.8 22.7
Interest expense 156.6 160.0 (3.4) 314.9 303.7 11.2
----------- ----------- --------- ------------ ------------ ------------
Net interest revenue-taxable-equiv 192.7 187.1 5.6 385.6 374.1 11.5
Provision for loan losses 10.9 10.0 0.9 20.1 23.1 (3.0)
Other operating revenue 106.2 96.6 9.6 211.3 184.8 26.5
Other operating expense 169.5 184.0 (14.5) 397.4 383.8 13.6
----------- ----------- --------- ------------ ------------ ------------
Income before income taxes 118.5 89.7 28.8 179.4 152.0 27.4
Provision for income taxes 39.9 27.9 12.0 55.1 45.4 9.7
Taxable-equivalent adjustment 8.4 8.0 0.4 17.0 16.5 0.5
----------- ----------- --------- ------------ ------------ ------------
Net income $ 70.2 $ 53.8 $ 16.4 $ 107.3 $ 90.1 $ 17.2
=========== =========== ========= ============ ============ ============
Yield on earning assets 8.16 % 8.32 % (0.16) % 8.17 % 8.28 % (0.11)
Cost of interest-bearing liabilities 4.45 4.70 (0.25) 4.48 4.57 (0.09)
----------- ----------- --------- ------------ ------------ ------------
Interest spread 3.71 3.62 0.09 3.69 3.71 (0.02)
Impact of interest-free funds 0.79 0.86 (0.07) 0.80 0.86 (0.06)
----------- ----------- --------- ------------ ------------ ------------
Net interest margin 4.50 % 4.48 % 0.02 % 4.49 % 4.57 % (0.08)
=========== =========== ========= ============ ============ ============
</TABLE>
Both years' earnings included resructuring charges which reduced
reported net income. The current year's earnings include a $30.3
million, or $.41 per share, after-tax charge associated with a corporate
restructuring. The $27.6 million, or $.36 per share, after-tax charge
taken in the first and second quarters of 1995 was in connection with
several bank acquisitions. Excluding both years' restructuring charges,
earnings per share rose 22.2% over the first half of 1995 to $1.87 per
share from $1.53 per share. Return on equity, excluding these charges
would have been 18.39% in 1996 and 15.73% in 1995. Table 2 shows the
detail of these charges.
INSERT TABLE2
-7-
<TABLE>
<CAPTION>
Table 2. Restructuring costs
Three months ended June 30 Six months ended June 30
-------------------------- -------------------------------
1996 1995 1996 1995
-------------------------- -------------------------------
<S> <C> <C> <C> <C>
(thousands of dollars) (thousands of dollars)
Additional loan loss provisions $ 0 $ 4,818 $ 0 $ 13,612
Losses on sales of securities 0 554 0 6,263
Restructuring expenses:
Employee severence 0 1,501 22,457 11,899
Facilities and equipment 0 1,476 5,502 4,801
Other 0 178 22,278 6,451
----------- --------- ------------ ------------
0 3,155 50,237 23,151
----------- --------- ------------ ------------
Total pre-tax costs 0 8,527 50,237 43,026
Income tax benefit 0 3,083 19,926 15,393
----------- --------- ------------ ------------
Total $ 0 $ 5,444 $ 30,311 $ 27,633
=========== ========= ============ ============
Per common share impact $ 0.00 $ 0.07 $ 0.41 $ 0.36
</TABLE>
In the first quarter of 1996 Firstar recorded a $50.2 million pre-tax charge
in connection with Firstar Forward , the corporate wide restructuring program.
This program is expected to add $140 million to annualized pre-tax earnings
when fully implemented by mid-1997. The charge included severance accruals of
$22.4 million associated with staff reductions of approximately 1,450 people,
fixed asset write-downs of $5.5 million, and other project costs of $22.3
million. The total charge consists of $44.1 million in anticipated cash
expenditures and $6.1 million of non-cash asset writedowns. Approximately
two-thirds of these cash expenditures have been made as of June 30, 1996.
In the first half of 1995, certain merger and restructuring charges were
taken in connection with completed bank acquisitions. These expenses
totaled $43.0 million pre-tax. Additional loan loss provisions of $13.6
million were taken to increase the acquisition banks' 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 recovered the
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 closing and write-off of unusable
equipment, and $6.4 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 write-downs. Cash
payments have reduced this restructuring accrual to approximately $2.6 million
as of June 30, 1996.
Net interest revenue during the first half of 1996, on a taxable
equivalent basis, was $385.6 million which was $11.5 million, or 3.1%, above
the level of the same period last year. The net interest margin was 4.49%
during the first half compared to 4.57% a year earlier. The increase in
net interest revenue was attributable to the higher average earning asset
balances, which was partially offset by the reduced net interest margin.
-8-
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 3.4% to $700.5 million during the first
half of 1996 compared to the same period last year. This resulted from a
4.6% increase in average earning assets, partially offset by reductions in
the average interest rate earned. The rate received on earning assets
decreased from 8.28% in the first half of 1995 to 8.17% in the same period
of 1996. Loan revenue increased $18.0 million, or 3.4%, from the same period
last year. The increased loan revenue was the result of a 5.1% increase in
average loan balances from the same period last year which was partially
offset by lower rates. Included in the $18 million increase was a $2.2
million interest recovery on a loan which added .02% to the margin for the
first six months of 1996.
Total interest expense was $314.9 million during the first half of 1996, an
increase of $11.2 million, or 3.7%, from the same period last year. Interest
rates on liabilities decreased from 4.57% in 1995 to 4.48% in 1996. Interest
expense on total deposits increased $11.5 million, or 5.3%, in the first
half of 1996 compared to the same period last year, due to a change in mix to
higher costing certificates of deposits.
Net cash flows of off-balance sheet derivative instruments used to manage
interest rate risk reduced net interest revenue by $900 thousand and net
interest margin by .01% during the first half of 1996. This compares to a
decrease in net interest revenue of $6.7 million and a decrease in net
interest margin of .08% during the same period in 1995.
The objective of Firstar's asset liability management policy is to maintain
adequate capital and liquidity and to 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, Firstar was within these
guidelines. The recently completed asset-liability forecast shows
consolidated net interest revenue remaining stable under our most likely rate
scenario. This rate scenario assumes an average prime rate of 8.125% compared
with the current prime rate of 8.25%.
INSERT TABLE 3
Table 3. Analysis of interest revenue and expense
<TABLE>
<CAPTION>
Six Months Ended June 30
----------------------------------------------------------------
Interest Total Due to
---------------------- --------------------------
1996 1995 Change Volume Rate
----------- --------- ------------ ------------ ------------
(thousands of dollars)
<S> <C> <C> <C> <C> <C>
Interest-bearing deposits
with banks $ 257 $ 659 $ (402)$ (329)$ (73)
Federal funds sold and
resale agreements 1,698 6,173 (4,475) (3,929) (546)
Trading securities 268 565 (297) (223) (74)
Securities 146,728 136,766 9,962 10,308 (346)
Commercial loans 302,153 299,879 2,274 12,466 (10,192)
Consumer loans 249,410 233,709 15,701 14,343 1,358
----------- --------- ------------
Total loans 551,563 533,588 17,975 26,705 (8,730)
----------- --------- ------------
Total interest revenue 700,514 677,751 22,763 31,078 (8,315)
Interest-bearing demand 10,609 13,728 (3,119) (533) (2,586)
Money market accounts 48,566 41,492 7,074 8,745 (1,671)
Savings passbook 20,511 23,765 (3,254) (1,801) (1,453)
Certificates of deposit 148,821 137,971 10,850 5,932 4,918
----------- --------- ------------
Total deposits 228,507 216,956 11,551 9,511 2,040
Short-term borrowed funds 62,458 66,744 (4,286) 3,538 (7,824)
Long-term debt 23,914 19,964 3,950 5,392 (1,442)
----------- --------- ------------
Total interest expense 314,879 303,664 11,215 16,291 (5,076)
----------- --------- ------------
Net interest revenue $ 385,635 $ 374,087 $ 11,548 17,124 (5,576)
=========== ========= ============
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.
-9-
</TABLE>
The provision for loan losses of $20.1 million was $3.0 million lower than
last year. As discussed previously, $13.6 million of 1995's provision related
to a merger adjustment to loan loss reserve levels. Net charge-offs for the
first six months were at a level of .23% of average outstanding loans compared
to .25% a year earlier. The reserve for loan losses represented 1.62% of total
loans at June 30, 1996, up from 1.60% a year earlier.
Consumer loan losses have shown increases over the past year with the charge
- -off rate rising from .32% of loans in the first quarter of 1995 to .60% in
the current quarter. This trend is more evident in the credit card area where
charge-off levels rose from 1.76% to 3.81% between the two periods. Increased
consumer debt loads and delinquency rates have been experienced throughout the
country. Firstar expects that credit card charge-offs will remain at or
increase modestly from the current levels. The commercial loan charge-off
rate for the second quarter of this year .02%. While commercial loan
charge-offs have fluctuated during the past five quarters, they remain at
an overall low level. Table 4 shows information on loan charge-offs.
Nonperforming assets were $97.4 million at June 30, 1996 which amounted to
.77% of total loans and foreclosed assets. This was an $5.3 million decrease
from the prior quarter which was .80% and an increase of $3.7 million from a
year earlier.
INSERT TABLE 4
<TABLE>
<CAPTION>
Table 4. Net loan charge-offs
Quarter ended
---------------------------------------------------------------------------------
6-30-96 3-31-96 12-31-95 9-30-95 6-30-95 3-31-95
----------- --------- ------------ ------------ ------------ ------------
(thousands of dollars) (thousands of dollars)
<S> <C> <C> <C> <C> <C> <C>
Credit card $ 5,674 $ 4,746 $ 4,215 $ 2,121 $ 2,468 $ 2,387
Other consumer 2,722 1,072 4,625 2,464 1,425 1,768
----------- --------- ------------ ------------ ------------ ------------
Total consumer 8,396 5,818 8,840 4,585 3,893 4,155
Commercial 266 274 4,277 71 2,886 4,183
----------- --------- ------------ ------------ ------------ ------------
Total net charge-offs $ 8,662 $ 6,092 $ 13,117 $ 4,656 $ 6,779 $ 8,338
=========== ========= ============ ============ ============ ============
Net charge-offs as a % of:
Credit card 3.81 % 3.19 % 2.43 % 1.95 % 1.81 % 1.76 %
Other consumer 0.22 0.08 0.42 0.15 0.09 0.15
Total consumer 0.60 0.41 0.63 0.33 0.26 0.32
Commercial 0.02 0.02 0.25 -- 0.19 0.26
Total loans 0.27 0.19 0.42 0.15 0.22 0.28
</TABLE>
-10-
Other operating revenue, excluding securities gain and losses, increased by
10.7% to a level of $211.2 million in the first half of 1996 compared to
the same period last year. Table 5 shows the composition of other operating
revenue.
INSERT TABLE 5
<TABLE>
<CAPTION>
Table 5. Other operating revenue
Three Months Ended Six Months Ended
June 30 June 30
----------------------------------- -----------------------------------------
1996 1995 Change 1996 1995 Change
----------- ----------- --------- ------------ ------------ ------------
(thousands of dollars) (thousands of dollars)
<S> <C> <C> <C> <C> <C> <C>
Trust and investment management fees $ 36,131 $ 32,433 11.4 % $ 71,578 $ 64,117 11.6 %
Service charges on deposit accounts 21,435 20,028 7.0 42,694 39,785 7.3
Credit card service revenue 17,869 14,817 20.6 33,437 28,772 16.2
Mortgage loan servicing 4,164 5,925 (29.7) 10,850 11,888 (8.7)
Mortgage loan origination 6,115 3,721 64.3 13,214 5,396 144.9
Data processing fees 4,548 4,597 (1.1) 9,164 9,516 (3.7)
Insurance revenue 2,109 2,886 (26.9) 4,508 5,615 (19.7)
Brokerage revenue 3,600 2,579 39.6 7,063 4,919 43.6
International fees 1,422 1,495 (4.9) 2,777 2,897 (4.1)
Foreign exchange gains 583 591 (1.4) 1,258 1,130 11.3
ATM fees 1,381 1,316 4.9 2,571 2,574 (0.1)
Safe deposit fees 1,013 999 1.4 2,109 2,136 (1.3)
Trading securities gains 423 531 (20.3) 914 1,220 (25.1)
Other 5,429 5,075 7.0 9,099 10,925 (16.7)
----------- ----------- ------------ ------------
Subotal 106,222 96,993 9.5 211,236 190,890 10.7
Securities (losses) gains 1 (378) 42 (6,061)
Total ----------- ----------- ------------ ------------
$ 106,223 $ 96,615 9.9 % $ 211,278 $ 184,829 14.3 %
=========== =========== ============ ============
</TABLE>
Other operating revenue represents 35% of total revenue. An industry
measure of fee revenue prominence is the ratio of this revenue stream to
average assets. During the first half of 1996 this ratio was 2.25%
compared to 2.14 % during the same period last year.
Trust and investment management fees are the single largest source of fee
revenue, contributing $71.6 million, or 34%, of other operating revenue. This
level represents an 11.6% growth in revenue during the first half of 1996
compared to the same period last year. Trust and investment assets under
management were $18.7 billion on June 30, 1996, an 11.6% increase from the
year earlier level primarily due to the result of general market value
appreciation. Additionally, assets held in custody rose by 33.4% to a level
of $63.2 billion during the same time period.
Revenue from service charges on deposit accounts at $42.7 million for the
first half of 1996 was 7.3% higher than last year.
Credit card service revenues are the third largest source of fee revenue,
totaling $33.4 million during the first half of 1996, which was an 16.2%
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 increased 145% from the
year earlier level. Origination revenue consists of both fees collected
and gains realized on the sale of loans. Fees rose $4.5 million to a level
of $7.8 million in the first half of 1996 while loan gains increased $3.4
million to $5.4 million. Mortgage interest rates have increased since the
first quarter and origination volumes have correspondingly declined. Mortgage
loan servicing revenues decreased 8.7% to a level of $10.9 million. Sales
of servicing rights contributed $3.1 million of revenue in the first half
of this year and $3.9 million in the same period of last year.
The remaining sources of other operating revenue derive from a wide range of
services and aggregated $39.5 million, a reduction of $1.5 million from the
same period of 1995. Last year's revenue included some nonrecurring items
which accounted for this decline.
-11-
Other operating expense increased to a level of $397.5 million for the first
half of 1996. Excluding the restructuring charges taken in both periods ,
expenses declined by 3.7%. Personnel costs decreased by 2.3% to a level
of $197.4 million. Nonpersonnel expense , excluding the restructuring charges,
declined by 5.5%. The detail of other operating expense is shown in Table 6.
Net occupancy expense increased $1.6 million, or 5.6% in the first half
of 1996 compared to the same period last year. The increase was due in part
to a bank acquisition earlier this year. Equipment expense increased $2.7
million, or 9.7% during the first half of 1996 compared to the same period last
year. The increase in equipment expense was due to data processing system
upgrades resulting from investments in new technology and increased processing
volumes from bank acquisitions.
In the third quarter of 1995, the FDIC reduced the rate charged for deposit
insurance to all BIF insured banks and refunded excess premiums paid. The
current rate is $2,000 per year for each insured bank compared with the $.23
per $100 of deposits previously charged. Firstar also has deposits subject to
SAIF insurance totaling approximately $1.3 billion. The insurance rate on
these deposits remains at $.23 per $100 of deposits, thus creating a blended
rate. These new rates reduced FDIC expense from $14.7 million in the first
half of 1995 to $1.7 million this year.
The efficiency ratio, which is the ratio of expense to revenue, was 58.2% in
the first half of 1996 compared to 63.8% a year earlier. This was further
reduced to 56.7% during the second quarter of 1996. Firstar has initiated
a corporate-wide restructuring program with a goal of reaching a 55%
efficiency ratio in 1997.
INSERT TABLE 6
<TABLE>
<CAPTION>
Table 6. Other operating expense
Six Months Ended Six Months Ended
June 30 June 30
----------------------------------- -----------------------------------------
1996 1995 Change 1996 1995 Change
----------- ----------- --------- ------------ ------------ ------------
(thousands of dollars) (thousands of dollars)
<S> <C> <C> <C> <C> <C> <C>
Salaries $ 76,534 $ 82,203 (6.9)% $ 158,674 $ 163,296 (2.8)%
Employee benefits 19,372 19,325 0.2 38,749 38,738 0.0
----------- ----------- ------------ ------------
Total personnel expense 95,906 101,528 (5.5) 197,423 202,034 (2.3)
Net occupancy expense 14,661 14,418 1.7 30,574 28,951 5.6
Equipment expense 14,930 14,950 (0.1) 31,605 28,820 9.7
Business development 6,424 6,878 (6.6) 11,808 13,822 (14.6)
F.D.I.C. insurance 635 7,357 (91.4) 1,732 14,706 (88.2)
Stationery and supplies 6,080 5,266 15.5 12,045 9,869 22.0
Delivery 4,315 4,528 (4.7) 9,515 9,228 3.1
Professional fees 4,877 5,123 (4.8) 9,432 9,497 (0.7)
Information processing expense 5,274 5,343 (1.3) 9,821 10,877 (9.7)
Amortization of intangibles 3,767 2,797 34.7 7,389 5,845 26.4
Employee education/recruiting 1,303 2,188 (40.4) 2,834 4,448 (36.3)
Federal Reserve processing fees 948 1,333 (28.9) 1,873 2,420 (22.6)
Commissions and service fees 1,606 2,002 (19.8) 2,930 3,344 (12.4)
Wire communication 1,710 1,631 4.8 3,693 3,476 6.2
Processing and other losses 1,853 916 102.3 3,657 2,207 65.7
Credit card assessment fees 1,272 993 28.1 2,794 2,194 27.3
Net foreclosed assets expense(income) 428 195 536 (148)
Published information 598 301 98.7 1,241 1,184 4.8
Insurance 169 653 (74.1) 539 1,040 (48.2)
Other 2,774 2,454 13.0 5,774 6,800 (15.1)
----------- ----------- ------------ ------------
Total nonpersonnel expense 73,624 79,326 (7.2) 149,792 158,580 (5.5)
Restructuring charges 0 3,155 50,237 23,151
----------- ----------- ------------ ------------
Total other operating expense $ 169,530 $ 184,009 (7.9)% $ 397,452 $ 383,765 3.6 %
=========== =========== ============ ============
-12-
</TABLE>
Total assets on June 30, 1996 were $18.8 billion, down $356 million from
December 31, 1995 and up $240 million from a year earlier. Earning assets
totaled $17.1 billion, down $253 million, or 1.5% from year end. Earning
assets have increased $112 million, or less than 1%, from a year earlier.
Loans totaled $12.7 billion on June 30, 1996 a decrease of $218 million
from year end 1995 and an increase of $172 million from a year earlier. A
bank acquisition which occurred in the first quarter of 1996 added approximately
$300 million of loans. Exclusive of acquisition related impact, loans declined
by 3.6% from year end and 1.0% from a year ago.
Commercial loans were $7.0 billion on June 30, 1996, a decline of $51
million from year end and $35 million from a year earlier, exclusive of the
effect of the bank acquisition. Commercial loan growth has slowed during
the past several quarters, although loan trends have varied among the
geographic regions. Some regions have shown good growth, such as in Minnesota
where commercial loans have increased 23% during the past year. Illinois
loan levels have declined 19% in the past year due in part to a refocussing
of lending away from real estate related credits that were acquired through
acquisitions. Commercial loan levels are expected to rise somewhat during
the remainder of the year, increasing at an annualized rate of 2% to 3%.
Consumer loans were $5.7 billion on June 30, 1996, a decline of $272
million, or 4.7% from year end, excluding loans added from the bank
acquisition. Consumer loans decreased $130 million, or 2.3%, from a year
earlier. Good growth has been evident in charge card loans, which are up
12.4% from a year ago and home equity loans which increased by over 16%.
Residential mortgage loans, excluding loans from the bank acquisition and
mortgages held for sale have declined by over $178 million from June 30,1995
due to both loan repayments and consumer preference for longer term secondary
mortgages, and a decision by Firstar to price portfolio mortgages at higher
spreads to Treasury rates.
Total securities, including both those designated as available for sale
and those held to maturity were $4.3 billion at June 30,1996 compared with
$4.5 billion at year end and $4.2 billion a year earlier.
Fund sources, consisting of deposits and borrowed funds, were $17.1 billion
on June 30, 1996. Total deposits were $14.0 billion, a decrease of $528
million from year end levels and an increase of $175 million, or 1.3% from
a year ago excluding the impact of the bank acquisition. The decline from
year end levels was for the most part attributable to the higher commercial
deposit balances typically maintained by Firstar's customers at year end
periods. Increased competition for consumer deposits and heightened consumer
sensitivity to interest rates have limited Firstar's deposit growth.
Borrowed funds were $3.1 billion on June 30, 1996, a decrease of $138
million from year end and $34 million from a year earlier. Borrowed funds
have remained somewhat level as deposit balances have been adequate to
fund the modest growth in earning assets.
-13-
Stockholders' equity totaled $1,416 million at the end of the second quarter,
a decrease of $109 million from the year end level and $125 million from the
total at June 30, 1995. Firstar has repurchased 7.8 million shares of its
common stock over the past twelve months. Of this total, 1.8 million were
permanently retired; .9 million were reissued in a bank acquisition; 1.1
million were reissued for stock options and conversions; and 4.0 million were
reserved for issuance in an acquisition which closed in July, 1996. Firstar's
capital management plan strives to match longer term capital needs while
maintaining sound capital levels and enhancing the return on equity. A summary
of capital components and ratios is shown in Table 7.
The board of directors declared a quarterly dividend to common stockholders
of $.38 per share payable August 15 to stockholders of record July 29. The
board also declared a quarterly dividend of $8.75 per Series D preferred
share payable September 30 to stockholders of record September 15.
INSERT TABLE 7
<TABLE>
<CAPTION>
Table 7. Capital components and ratios
June 30 December 31 June 30
1996 1995 1995
------------ ------------ ------------
(thousands of dollars)
<S> <C> <C> <C>
Risk-based capital:
Stockholders' equity $ 1,415,777 $ 1,524,820 $ 1,541,159
Unrealized (gains) losses on securities available for sale (2,551) (34,127) (1,710)
Minority interest in subsidiaries 2,112 3,171 2,868
Less goodwill (115,758) (107,298) (109,080)
------------ ------------ ------------
Total Tier I capital 1,299,580 1,386,566 1,433,237
Allowable reserve for loan losses 166,730 167,564 164,234
Allowable long-term debt 95,668 111,336 54,336
------------ ------------ ------------
Total Tier II capital 262,398 278,900 218,570
------------ ------------ ------------
Total capital $ 1,561,978 $ 1,665,466 $ 1,651,807
============ ============ ============
Risk-adjusted assets $ 13,300,110 $ 13,377,391 $ 13,103,508
Tier I capital to risk-adjusted assets 9.77 % 10.36 % 10.94 %
Total capital to risk-adjusted assets 11.74 12.45 12.61
Tier I leverage ratio 6.94 7.52 7.93
</TABLE>
The foregoing discussion under Item 2 included forecasts concerning
revenues, expenses and other business results which are based upon estimates.
There are numerous factors such as changes in economic conditions that could
adversely affect actual results. Therefore, there will be differences between
these forecasts and actual results and no assurance can be given that these
forecasts will be achieved.
-14-
<TABLE>
<CAPTION>
FIRSTAR CORPORATION AND SUBSIDIARIES
ADDITIONAL FINANCIAL DATA (unaudited)
- ----------------------------------------------------------------------------------------------------
Selected Financial Data
(thousands of dollars, except per share)
Quarter ended Six Months ended
June 30 June 30
---------------------- ------------------------------
1996 1995 1996 1995
---------------------- ------------------------------
<S> <C> <C> <C> <C>
Earnings and Dividends
Net income $ 70,163 $ 53,782 $ 107,281 $ 90,067
Per common share:
Net income 0.96 0.70 1.46 1.17
Dividends 0.38 0.34 0.72 0.64
Stockholders' equity 0.00 0.00 19.72 19.90
Performance Ratios
Return on average assets 1.50 % 1.19 % 1.14 % 1.01 %
Return on average common equity 19.35 14.19 14.32 12.01
Dividend payout ratio 39.58 48.57 49.32 54.70
Equity to assets 0.00 0.00 7.53 8.30
Net loan charge-offs as a percentage
of average loans 0.27 0.22 0.23 0.25
Nonperforming assets as a
percentage of loans and other
real estate 0.00 0.00 0.77 0.75
Net interest margin 4.50 4.49 4.49 4.57
Efficiency ratio* 56.72 63.66 58.17 63.83
Fee revenue as a percentage
of average assets 2.27 2.14 2.25 2.14
Statistical Data
Full-time equivalent staff (at quarter end) 0 0 8,367 9,708
Average common shares
outstanding (000's) 72,424 76,342 73,104 76,185
Actual common shares
outstanding (000's at quarter end) 0 0 71,162 76,474
Stock Price Information
High $ 49.750 $ 34.250 $ 49.750 $ 34.250
Low 42.125 28.250 36.625 26.250
Close 46.125 33.625 46.125 33.625
*Adjusted for restructuring costs
-15-
</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 June 30
-----------------------------------------------------------------------
1996 1995
------------------------------------- ---------------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
------------------------------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Interest-bearing deposits
with banks $ 9,616 $ 109 4.56 % $ 19,484 $ 241 4.96 %
Federal funds sold and
resale agreements 76,472 1,049 5.52 200,933 3,102 6.19
Trading securities 7,904 123 6.26 17,731 295 6.67
Securities:
Taxable 3,293,197 53,099 6.47 3,144,190 50,954 6.49
Nontaxable 1,118,227 20,414 7.30 1,028,016 19,353 7.53
----------- ---------- ----------- ---------
Total securities 4,411,424 73,513 6.68 4,172,206 70,307 6.75
Loans:
Commercial 7,023,930 151,263 8.66 6,846,483 153,592 9.00
Consumer 5,652,587 123,223 8.75 5,450,651 119,457 8.78
----------- ---------- ----------- ---------
Total loans 12,676,517 274,486 8.70 12,297,134 273,049 8.90
----------- ---------- ----------- ---------
Interest earning assets 17,181,933 349,280 8.16 16,707,488 346,994 8.32
Reserve for loan losses (202,725) (196,447)
Cash and due from banks 1,010,777 847,560
Other assets 857,966 834,991
----------- -----------
Total assets $ 18,847,951 $ 18,193,592
=========== ===========
Liabilities and
Stockholders' Equity
Interest-bearing demand $ 1,515,589 $ 5,191 1.38 % $ 1,586,260 $ 6,758 1.71 %
Money market accounts 2,500,262 24,457 3.93 2,015,423 21,395 4.26
Savings passbook 1,610,509 10,024 2.50 1,754,570 12,082 2.76
Certificates of deposit 5,415,221 74,069 5.50 5,327,617 73,471 5.53
Short-term borrowed funds 2,456,253 31,914 5.23 2,423,096 36,123 5.98
Other debt 644,513 10,981 6.82 548,996 10,083 7.35
----------- ---------- ----------- ---------
Interest-bearing liabilities 14,142,347 156,636 4.45 13,655,962 159,912 4.70
Demand deposits 2,938,756 2,708,232
Other liabilities 299,840 298,800
Stockholders' equity 1,467,008 1,530,598
----------- -----------
Total liabilities and
stockholders' equity $ 18,847,951 $ 18,193,592
=========== ===========
Net interest
revenue/margin $ 192,644 4.50 % $ 187,082 4.49 %
========== =========
</TABLE>
<TABLE>
<CAPTION>
Six months ended June 30
------------------------------------- ---------------------------------
1996 1995
----------------------------------- ---------------------------------
Average Average Average Average
Balance Interest Rate Balance Interest Rate
------------------------------------- ---------------------------------
<S> <C> <C> <C> <C> <C> <C>
Assets
Interest-bearing deposits
with banks $ 10,503 $ 257 4.92 % $ 23,615 $ 659 5.63 %
Federal funds sold and
resale agreements 62,029 1,698 5.50 203,729 6,173 6.11
Trading securities 8,987 268 6.00 16,171 565 7.05
Securities:
Taxable 3,299,538 105,532 6.41 3,073,243 97,554 6.38
Nontaxable 1,128,055 41,196 7.30 1,043,325 39,212 7.52
----------- ---------- ----------- ---------
Total securities 4,427,593 146,728 6.64 4,116,568 136,766 6.67
Loans:
Commercial 7,006,417 302,153 8.67 6,721,680 299,879 8.99
Consumer 5,706,522 249,410 8.77 5,378,179 233,709 8.73
----------- ---------- ----------- ---------
Total loans 12,712,939 551,563 8.71 12,099,859 533,588 8.88
----------- ---------- ----------- ---------
Interest earning assets 17,222,051 700,514 8.17 16,459,942 677,751 8.28
Reserve for loan losses (201,049) (194,028)
Cash and due from banks 1,023,669 877,438
Other assets 838,022 818,144
----------- -----------
Total assets $ 18,882,693 $ 17,961,496
=========== ===========
Liabilities and
Stockholders' Equity
Interest-bearing demand $ 1,535,973 $ 10,609 1.39 % $ 1,598,807 $ 13,728 1.73 %
Money market accounts 2,471,781 48,566 3.95 2,029,942 41,492 4.12
Savings passbook 1,624,992 20,511 2.54 1,763,460 23,765 2.72
Certificates of deposit 5,395,849 148,821 5.55 5,176,612 137,971 5.37
Short-term borrowed funds 2,397,930 62,458 5.24 2,272,806 66,744 5.92
Other debt 691,023 23,914 6.92 548,363 19,964 7.28
----------- ---------- ----------- ---------
Interest-bearing liabilities 14,117,548 314,879 4.48 13,389,990 303,664 4.57
Demand deposits 2,968,768 2,753,242
Other liabilities 282,812 297,721
Stockholders' equity 1,513,565 1,520,543
----------- -----------
Total liabilities and
stockholders' equity $ 18,882,693 $ 17,961,496
=========== ===========
Net interest
revenue/margin $ 385,635 4.49 % $ 374,087 4.57 %
========== =========
-16-
</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/ Jeffrey B. Weeden
------------------
Jeffrey B. Weeden
Senior Vice President-Finance and
Accounting (Chief Financial Officer)
August 13, 1996
-17-
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1996
<CASH> 1,066,838
<INT-BEARING-DEPOSITS> 10,402
<FED-FUNDS-SOLD> 89,879
<TRADING-ASSETS> 9,347
<INVESTMENTS-HELD-FOR-SALE> 2,013,629
<INVESTMENTS-CARRYING> 2,303,223
<INVESTMENTS-MARKET> 2,313,276
<LOANS> 12,655,724
<ALLOWANCE> 205,041
<TOTAL-ASSETS> 18,812,380
<DEPOSITS> 14,036,110
<SHORT-TERM> 2,503,259
<LIABILITIES-OTHER> 268,160
<LONG-TERM> 589,074
<COMMON> 94,226
0
12,359
<OTHER-SE> 1,309,152
<TOTAL-LIABILITIES-AND-EQUITY> 18,812,380
<INTEREST-LOAN> 272,842
<INTEREST-INVEST> 66,791
<INTEREST-OTHER> 1,268
<INTEREST-TOTAL> 340,901
<INTEREST-DEPOSIT> 113,741
<INTEREST-EXPENSE> 156,636
<INTEREST-INCOME-NET> 184,265
<LOAN-LOSSES> 10,846
<SECURITIES-GAINS> 1
<EXPENSE-OTHER> 169,530
<INCOME-PRETAX> 110,112
<INCOME-PRE-EXTRAORDINARY> 70,163
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 70,163
<EPS-PRIMARY> 0.96
<EPS-DILUTED> 0.96
<YIELD-ACTUAL> 4.50
<LOANS-NON> 86,124
<LOANS-PAST> 50,964
<LOANS-TROUBLED> 1,369
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 195,283
<CHARGE-OFFS> 28,123
<RECOVERIES> 13,369
<ALLOWANCE-CLOSE> 205,041
<ALLOWANCE-DOMESTIC> 204,610
<ALLOWANCE-FOREIGN> 431
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
