INTER REGIONAL FINANCIAL GROUP INC
10-Q, 1994-05-13
SECURITY BROKERS, DEALERS & FLOTATION COMPANIES
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                SECURITIES AND EXCHANGE COMMISSION

                     Washington, D.C.  20549

                          _____________


                           FORM 10-Q

 X       QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
- - ---          OF THE SECURITIES EXCHANGE ACT OF 1934

              For the quarter ended March 31, 1994

                               or

         TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
- - ---          OF THE SECURITIES EXCHANGE ACT OF 1934


                   Commission file number 1-8186

                Inter-Regional Financial Group, Inc.
        (Exact name of registrant as specified in its charter)


           DELAWARE                            41-1228350
   (State or other jurisdiction              (IRS Employer
 of incorporation of organization)           Identification
                                                 Number)

      Dain Bosworth Plaza, 60 South Sixth Street
            Minneapolis, Minnesota                   55402-4422
    (Address of principal executive offices)         (Zip Code)

Registrant's telephone number, including area code (612) 371-7750


Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                 Yes       X            No

As of  April 30, 1994, the Company had 8,192,608 shares of common
stock outstanding.

<PAGE>

          INTER-REGIONAL FINANCIAL GROUP, INC. AND SUBSIDIARIES
        REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1994

                             INDEX

                                                             Page

I.  FINANCIAL INFORMATION:

Item 1. Financial Statements

        Consolidated Balance Sheets............................ 1

        Consolidated Statements of Operations.................. 2

        Consolidated Statements of Cash Flows.................. 3

        Notes to Consolidated Financial Statements............. 4

Item 2. Management's Discussion and Analysis of Financial
        Condition and Results of Operations.................... 5

II.     OTHER INFORMATION:

Item 6. Exhibits and Reports on Form 8-K ...................... 7

        Signature.............................................. 8

        Index of Exhibits...................................... 9

        Exhibits...............................................10

<PAGE>
                 PART I - FINANCIAL INFORMATION
<TABLE>
ITEM 1.  FINANCIAL STATEMENTS

      INTER-REGIONAL FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   CONSOLIDATED BALANCE SHEETS
                         (In thousands)

<CAPTION>
                                           March 31, December 31,
                                              1994        1993
                                           _____________________
                                               (Unaudited)
   <S>                                         <C>          <C>
Assets:
   Cash and cash equivalents..............   $20,895      $14,047
   Cash and short-term investments
     segregated for regulatory purposes...   526,005      581,005
   Receivable from customers..............   598,579      531,636
   Receivable from brokers and dealers....   202,175      178,448
   Securities purchased under agreements
     to resell............................   163,544      111,887
   Trading securities owned, at market....   398,618      271,378
   Equipment, leasehold improvements and
     buildings, net.......................    26,616       24,720
   Other receivables......................    46,204       40,744
   Deferred income taxes..................    18,995       18,995
   Other assets...........................    13,045       13,162
                                           ---------    ---------
                                          $2,014,676   $1,786,022
                                           =========    =========
Liabilities and Shareholders' Equity:
Liabilities:
   Short-term borrowings..................  $127,037   $  123,973
   Drafts payable.........................    40,983       32,041
   Payable to customers...................   924,438      866,144
   Payable to brokers and dealers.........   211,281      250,594
   Securities sold under repurchase
     agreements...........................   144,027       83,978
   Trading securities sold, but not yet
     purchased, at market.................   234,643       72,218
   Accrued compensation...................    44,861       83,458
   Other accrued expenses and accounts
     payable..............................    64,817       63,776
   Accrued income taxes...................    13,266        9,991
   Subordinated and other debt............    21,829       22,166
                                           ---------    ---------
                                           1,827,182    1,608,339
                                           ---------    ---------
Shareholders' equity:
   Common stock...........................     1,023        1,016
   Additional paid-in capital.............    73,759       73,475
   Retained earnings......................   112,712      103,192
                                            --------     --------
                                             187,494      177,683
                                           ---------    ---------
                                          $2,014,676   $1,786,022
                                           =========    =========
<FN>
      See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
      INTER-REGIONAL FINANCIAL GROUP, INC. AND SUBSIDIARIES
              CONSOLIDATED STATEMENTS OF OPERATIONS
       (Unaudited, in thousands, except per-share amounts)
                                
<CAPTION>
                                      Three Months Ended March 31,
                                            1994       1993
                                       _________________________
<S>                                           <C>       <C>
Revenues:
   Commissions..........................   $39,128   $ 35,446
   Principal transactions...............    35,789     36,785
   Investment banking and underwriting..    27,878     24,547
   Interest.............................    15,255     12,413
   Asset management.....................     4,077      2,905
   Correspondent clearing...............     3,181      2,785
   Other................................     5,763      3,890
                                           -------    -------
Total revenues..........................   131,071    118,771

Interest expense........................    (7,392)    (6,427)
                                           -------    -------
Net revenues............................   123,679    112,344
                                           -------    -------
Expenses excluding interest:
   Compensation and benefits............    78,724     70,797
   Communications.......................     8,550      6,940
   Occupancy and equipment rental.......     6,698      5,957
   Travel and promotional...............     4,226      3,028
   Floor brokerage and clearing fees....     2,245      2,075
   Other................................     7,176      7,200
                                           -------    -------
Total expenses excluding interest.......   107,619     95,997
                                           -------    -------
Earnings:
   Earnings before income taxes.........    16,060     16,347
   Income tax expense...................    (5,889)    (6,212)
                                           -------    -------
Net earnings............................   $10,171   $ 10,135
                                           =======   ========

Earnings per common and common equivalent share:
Primary and fully diluted...............   $  1.20    $  1.22
                                           =======    =======
<FN>
   See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
         INTER-REGIONAL FINANCIAL GROUP, INC. AND SUBSIDIARIES
                CONSOLIDATED STATEMENTS OF CASH FLOWS
                      (Unaudited, in thousands)
                                          
<CAPTION>
                                     Three Months Ended March 31,
                                          1994          1993
                                     ____________________________

  <S>                                      <C>           <C>
Cash flows from operating activities:
  Net earnings.........................  $10,171       $10,135
  Adjustments to reconcile earnings
   to cash provided (used) by 
   operating activities:
    Depreciation and amortization......    1,778         1,191
    Deferred income taxes..............   (1,222)         (899)
    Other non-cash items...............    2,434         2,941
    Cash and short-term investments
     segregated for regulatory
     purposes..........................   55,000        17,910
    Net receivable from/payable to
     brokers and dealers...............  (63,040)      (42,386)
    Securities purchased under
     agreements to resell                (51,657)     (109,855)
    Net trading securities owned and
     trading securities sold, but
     not yet purchased.................   35,185      (217,565)
    Short-term borrowings and drafts
     payable of securities companies...   12,006        79,486
    Net payable to customers...........   (8,649)      (26,616)
    Securities sold under repurchase
     agreements........................   60,049       301,926
    Accrued compensation...............  (38,597)      (22,739)
    Other..............................   (3,123)         (968)
                                         -------       -------
    Cash provided (used) by operating
     activities........................   10,335        (7,439)
                                         -------       -------
Cash flows from financing activities:
  Proceeds from:
    Issuance of common stock...........      291           164
    Subordinated and other debt........      237         3,000
  Payments for:
    Dividends on common stock..........     (651)         (324)
    Subordinated and other debt........     (574)         (311)
    Revolving credit agreement, net....       __        (5,450)
                                         -------       -------
   Cash (used) by financing
    activities.........................     (697)       (2,921)
                                         -------       -------
Cash flows from investing activities:
  Proceeds from investment dividends
   and sales...........................      481         1,147
  Payments for equipment, leasehold
   improvements and other..............   (3,271)       (2,354)
                                         -------       -------
  Cash (used) for investing
   activities..........................   (2,790)       (1,207)
                                         -------       -------

Increase/(decrease) in cash and cash
 equivalents...........................    6,848       (11,567)
Cash and cash equivalents:
  At beginning of period...............   14,047        34,461
                                         -------       -------

  At end of period.....................  $20,895       $22,894
                                         =======       =======

Income tax  payments totaled $2,615,000 and $716,000 and interest
payments totaled  $7,664,000  and  $5,693,000  during  the  three
months ended March 31, 1994 and 1993, respectively.
<FN>
  See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>

      INTER-REGIONAL FINANCIAL GROUP, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                          (Unaudited)

A. Condensed Consolidated Financial Statements

The  accompanying  unaudited  interim  consolidated  financial
statements  have   been  prepared   in  accordance   with  the
instructions  for  Form  10-Q  and  do  not  include  all  the
information  and  footnotes  required  by  generally  accepted
accounting principles  for complete  financial statements  and
should be  read in conjunction with the consolidated financial
statements and  related notes included in the Company's Annual
Report on  Form 10-K for the year ended December 31, 1993.  In
the opinion  of management,  all adjustments  necessary for  a
fair  presentation  of  such  interim  consolidated  financial
statements have  been included.  All such adjustments are of a
normal recurring  nature.   The results  of operations for the
three-month period  ended March  31, 1994  are not necessarily
indicative of results expected for subsequent periods.

Certain prior  year amounts  in the  financial statements have
been reclassified to conform to the 1994 presentation.

B. Lease Commitment

During the  first quarter  of 1994,  Rauscher  Pierce  Refsnes
entered into  an operating lease for new headquarters space in
Dallas, Texas.   The lease commences during the fourth quarter
of 1995  and the  minimum rental  commitments are  as follows:
1995 -  $0; 1996  - $1,294,000;  1997  -  $1,340,000;  1998  -
$1,340,000; 1999 - $1,340,000; thereafter $9,892,000.

<PAGE>

 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS

     This discussion  should be  read in  conjunction with Item 7
(Management's Discussion  and Analysis)  of the  Company's Annual
Report on Form 10-K for the year ended December 31, 1993.

Summary

     Consolidated net  revenues (revenues  less interest expense)
increased  $11.3  million  over  first  quarter  of  1993.    The
Company's  commission,   principal  transaction   and  investment
banking  and  underwriting  businesses  benefited  early  in  the
quarter, along  with the  rest of  the securities  industry, from
relatively strong  financial markets,  low interest  rates,  high
securities prices and increased levels of municipal and corporate
underwritings.   In the  latter part  of  the  quarter,  however,
rising interest rates led to falling bond prices and as a result,
lower trading revenues and sales of fixed income products.

Results of Operations:
<TABLE>
<CAPTION>
                                     Three Months Ended March 31,
(Unaudited, in thousands)                  1994         1993
                                     __________________________
<S>                                        <C>          <C>
Net revenues:
  Dain Bosworth Incorporated.........    $80,641      $70,312
  Rauscher Pierce Refsnes, Inc.......     42,378       41,825
  Corporate, other and eliminations..        660          207
                                         -------      -------

                                        $123,679     $112,344
                                         =======      =======
Earnings (Loss) before income taxes:
  Dain Bosworth Incorporated.........    $11,412      $10,603
  Rauscher Pierce Refsnes, Inc.......      5,058        7,031
  Corporate, other and eliminations..       (410)      (1,287)
                                         -------      -------
                                         $16,060      $16,347
                                         =======      =======
</TABLE>
     Commission revenues  rose $3.7  million in the first quarter
of 1994  over the  first  quarter  of  1993  due  principally  to
increased sales  of mutual fund and exchange listed securities to
individual and institutional investors made through a sales force
that was 9 percent larger than in the prior year period.

     The $1.0  million decline  in principal transaction revenues
from the  1993 first  quarter primarily resulted from lower fixed
income trading  revenues at  Dain Bosworth  and  Rauscher  Pierce
Refsnes due  to volatile  bond market conditions late in the 1994
first quarter and decreased demand for fixed income products.  If
the  volatility   in  the   bond  markets   continues,  principal
transaction revenues  will likely  continue to  decline from 1993
levels.

     Investment banking  and underwriting revenues increased $3.3
million during  the quarter  over prior  year levels as corporate
clients of  Dain Bosworth  and  Rauscher  Pierce  Refsnes  issued
greater quantities  of  corporate  equity  and  debt  securities.
First quarter  1994 investment  banking and underwriting revenues
that were  generated from  municipal clients  approximated  those
generated  in   the  first  quarter  of  1993.    While  revenues
recognized  as  a  result  of  municipal  refunding  transactions
declined significantly  from levels  experienced in the third and
fourth quarters  of 1993, such revenues increased slightly during
the 1994  first quarter over the 1993 first quarter.  The Company
anticipates that  revenues derived from municipal refundings will
decline over the remainder of 1994.

     Net interest  income increased $1.9 million during the first
quarter over  prior year  levels chiefly as a result of increased
margin debit  and  credit  balances  with  net  interest  spreads
remaining basically  the same, larger volumes of stock borrow and
stock loan transactions and increased fixed income inventories.

<PAGE>
     Asset management  revenue increased  $1.2 million  from  the
1993 first  quarter due  primarily to increased assets in managed
account programs  at Dain Bosworth and Rauscher Pierce Refsnes as
well as  increased money  market fund balances managed by Insight
Investment Management.

     During first quarter 1994, compensation and benefits expense
increased $7.9  million due  largely  to  increased  commissions,
incentive  compensation   and  related   benefits  that  rose  in
conjunction with  increased operating  revenues.   Also, the 1994
increase was partially the result of a 10 percent increase in the
average number of employees.

     Expenses other than compensation and benefits increased $3.7
million for  the quarter  due primarily  to  increased  usage  of
communications and  market data  and clearing  services which are
partially volume  driven, increased  travel costs associated with
the generation  of new business, increased operating costs at the
Company's Minneapolis  headquarters  due  to  expansion  and  the
addition of  four operating  office locations  from first quarter
1993 levels.

LIQUIDITY AND CAPITAL RESOURCES

     As  described  in  Note  K  to  the  Consolidated  Financial
Statements of  the Company's  1993 Annual  Report on  Form  10-K,
Regional Operations  Group, Dain  Bosworth  and  Rauscher  Pierce
Refsnes must  comply with  certain regulations  of the Securities
and Exchange  Commission and  The New  York Stock Exchange, Inc.,
measuring capitalization  and liquidity.      All  three  broker-
dealers continue  to operate above minimum net capital standards.
At March  31, 1994,  net capital  was $43.9  million at  Regional
Operations Group,  which  was  6.7  percent  of  aggregate  debit
balances  and   $30.8  million   in  excess   of  the  5  percent
requirement.   At March  31, 1994,  Dain  Bosworth  and  Rauscher
Pierce Refsnes  had  net  capital  of  $27.2  million  and  $11.5
million, respectively, in excess of the $1 million requirement.

     On  April   27,  1994,  the  Company's  Board  of  Directors
announced  that  it  would  double  the  regular  quarterly  cash
dividend paid  on the  Company's common stock from $.08 per share
to $.16  per share  beginning with  the dividend  paid during the
1994 second quarter.  The determination of future cash dividends,
if any,  to be  declared and  paid will  depend on  the Company's
future financial condition, earnings and available funds.  On the
same date,  the Company's Board of Directors authorized a plan to
repurchase up  to 400,000  shares of  the Company's common stock.
Purchases of  the common  stock will be made from time to time at
prevailing prices  in the  open market, by block purchases, or in
privately negotiated  transactions.   The repurchased shares will
be used for the Company's employee stock option and other benefit
plans, or for corporate purposes.

<PAGE>
                   PART II - OTHER INFORMATION

Item 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)   Exhibits

      Exhibit 11 - Computation of Net Earnings Per Share

(b)   Reports on Form 8-K

      One report on Form 8-K was filed during the quarter ended
      March 31, 1994:

      Items Reported

      Item 5 - Other Events (Election of two additional outside
      directors and election of John C. Appel as President
      and Chief Operating Officer of Dain Bosworth Incorporated)
          
      Item 7 - Financial Statements & Exhibits

      Exhibit 4(a)  - First Amendment to Credit Agreement dated
      November 30, 1993.
      Exhibit 4(b)  - Third Amendment to Term Loan Agreement
      dated November 30, 1993.
      Exhibit 28  - Press release regarding the election of John
      C. Appel as President and Chief Operating Officer of Dain
      Bosworth Incorporated.

      Date of Report - February 1, 1994.

      Financial Statements Filed - None.

<PAGE>
                            SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.

                       INTER-REGIONAL  FINANCIAL   GROUP, INC.
                                     Registrant

Date:  May 6, 1994     By  Daniel J. Reuss
                           __________________________
                           Daniel J. Reuss
                           Senior Vice President, Controller
                           and Treasurer (Principal
                           Financial and Accounting Officer)
<PAGE>

       INTER-REGIONAL FINANCIAL GROUP, INC. AND SUBSIDIARIES
         INDEX OF EXHIBITS TO QUARTERLY REPORT ON FORM 10-Q
                   FOR QUARTER ENDED MARCH 31, 1994


Exhibit 11  -  Computation of Net Earnings Per Share

               Filed herewith.

<PAGE>
                                                       EXHIBIT 11
<TABLE>
               INTER-REGIONAL FINANCIAL GROUP, INC.
             COMPUTATION OF NET EARNINGS PER SHARE
     (Unaudited, amounts in thousands, except per-share data)
<CAPTION>
                                     Three Months Ended March 31,
                                           1994          1993
                                     ___________________________
  <S>                                       <C>         <C>
PRIMARY EARNINGS PER SHARE:
  Net earnings........................    $10,171     $10,135
                                          =======     =======
  Average number of common and
    common equivalent shares
    outstanding:
     Average common shares outstanding.     8,149       8,099
     Incentive stock options...........       356         235
                                          -------     -------
                                            8,505       8,334
                                          =======     =======
  Primary earnings per share........... . $  1.20     $  1.22
                                          =======     =======

EARNINGS PER SHARE ASSUMING FULL DILUTION:
  Net earnings..........................  $10,171     $10,135
                                          =======     =======

  Average number of common and common
   equivalent shares outstanding:
    Average common shares outstanding...    8,149       8,099
    Incentive stock options.............      356         241
                                          -------     -------
                                            8,505       8,340
                                          =======     =======
  Fully diluted earnings per share:.....  $  1.20     $  1.22
                                          =======     =======
</TABLE>


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