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 September 30, 1996
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 October 31, 1996, the Company had 12,159,993 shares of
common stock outstanding.
<PAGE>
INTER-REGIONAL FINANCIAL GROUP, INC. AND SUBSIDIARIES
REPORT ON FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1996
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 1. Legal Proceedings.............................. 8
Item 6. Exhibits and Reports on Form 8-K............... 11
Signatures..................................... 12
Index of Exhibits.............................. 13
Exhibits....................................... 14
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
INTER-REGIONAL FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
<CAPTION>
September 30, December 31,
1996 1995
----------------------------
(Unaudited)
<S> <C> <C>
Assets:
Cash and cash equivalents.............. $29,558 $26,167
Cash and short-term investments
segregated for regulatory purposes.... 60,009 411,000
Receivable from customers.............. 972,487 763,793
Receivable from brokers and dealers.... 212,579 257,717
Securities purchased under agreements
to resell............................. 208,497 80,233
Trading securities owned, at market.... 387,415 322,892
Equipment, leasehold improvements
and buildings, at cost, net........... 33,137 31,108
Other receivables...................... 82,192 80,838
Deferred income taxes.................. 33,222 31,993
Other assets........................... 14,201 16,167
--------- ---------
$2,033,297 $2,021,908
========= =========
Liabilities and Shareholders' Equity:
Liabilities:
Short-term borrowings.................. $223,258 $97,000
Drafts payable......................... 39,309 50,431
Payable to customers................... 650,664 982,098
Payable to brokers and dealers......... 311,047 254,542
Securities sold under repurchase
agreements............................ 104,379 120,808
Trading securities sold, but not yet
purchased, at market.................. 206,560 61,050
Accrued compensation................... 99,028 95,988
Other accrued expenses and accounts
payable............................... 99,833 84,973
Accrued income taxes................... 8,538 11,114
Subordinated and other debt............ 30,476 41,410
--------- ---------
1,773,092 1,799,414
--------- ---------
Shareholders' equity:
Common stock........................... 1,520 1,508
Additional paid-in capital............. 79,527 76,623
Retained earnings...................... 179,158 144,363
--------- ---------
260,205 222,494
--------- ---------
$2,033,297 $2,021,908
========= =========
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
INTER-REGIONAL FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited, in thousands, except per-share amounts)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
--------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Commissions............. $50,808 $48,201 $163,993 $127,127
Principal transactions.. 40,353 44,608 129,280 135,084
Investment banking and
underwriting........... 30,226 23,059 80,244 59,935
Interest................ 27,514 28,622 80,470 81,031
Asset management........ 9,269 7,285 25,849 19,384
Correspondent clearing.. 3,447 3,525 11,954 9,048
Other................... 3,888 4,864 12,070 9,797
------- ------- ------- -------
Total revenues.......... 165,505 160,164 503,860 441,406
Interest expense........ (14,470) (17,058) (42,948) (49,086)
------- ------- ------- -------
Net revenues............ 151,035 143,106 460,912 392,320
------- ------- ------- -------
Expenses Excluding Interest:
Compensation and
benefits............... 94,051 91,956 286,914 253,342
Communications.......... 10,440 10,127 31,305 30,039
Occupancy and equipment. 8,947 8,186 26,275 24,341
Travel and promotional.. 5,913 4,890 17,305 14,188
Floor brokerage and
clearing fees.......... 2,870 2,713 8,174 7,734
Other................... 8,830 8,268 27,712 23,437
------- ------- ------- -------
Total expenses
excluding interest..... 131,051 126,140 397,685 353,081
------- ------- ------- -------
Earnings:
Earnings before income
taxes.................. 19,984 16,966 63,227 39,239
Income tax expense...... (6,994) (6,150) (22,129) (14.224)
------- ------- ------- -------
Net earnings............ $12,990 $10,816 $41,098 $25,015
======= ======= ======= =======
Earnings per common and
common equivalent share:
Primary................. $1.02 $0.86 $3.24 $2.00
======= ======= ======= =======
Fully diluted........... $1.01 $0.85 $3.19 $1.96
======= ======= ======= =======
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<TABLE>
INTER-REGIONAL FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
<CAPTION>
Nine Months Ended
September 30,
1996 1995
----------------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings............................. $41,098 $25,015
Adjustments to reconcile earnings to
cash provided (used) by operating
activities:
Depreciation and amortization........... 7,046 6,725
Deferred income taxes.................... (1,229) (1,005)
Other non-cash items..................... 6,507 6,558
Cash and short-term investments
segregated for regulatory purposes...... 350,991 (121,000)
Net receivable from/payable to brokers
and dealers............................. 101,643 10,965
Securities purchased under agreements
to resell............................... (128,264) (101,635)
Net trading securities owned and
trading securities sold, but not
yet purchased........................... 80,987 (24,762)
Short-term borrowings and drafts
payable of securities companies......... 115,136 50,252
Net receivable from/payable to customers. (540,128) 73,646
Securities sold under repurchase
agreements.............................. (16,429) 94,979
Accrued compensation..................... 3,040 8,030
Other.................................... 11,200 929
------ ------
Cash provided by operating activities.... 31,598 28,697
------ ------
Cash flows from financing activities:
Proceeds from:
Issuance of common stock................. 1,243 643
Payments for:
Subordinated and other debt.............. (10,934) (4,326)
Dividends on common stock................ (4,968) (3,882)
Purchase of common stock................. (1,341) (2,705)
Revolving credit agreement, net.......... - (15,000)
------ ------
Cash (used) by financing activities...... (16,000) (25,270)
------ ------
Cash flows from investing activities:
Proceeds from investment dividends
and sales............................... 126 1,776
Payments for equipment, leasehold
improvements and other.................. (12,333) (7,947)
------ ------
Cash (used) by investing activities...... (12,207) (6,171)
------ ------
Increase/(decrease) in cash and cash
equivalents............................. 3,391 (2,744)
Cash and cash equivalents:
At beginning of period................... 26,167 22,764
------ ------
At end of period......................... $29,558 $20,020
====== ======
Income tax payments totaled $25,332,000 and $13,967,000 and
interest payments totaled $38,503,000 and $47,620,000 during the
nine months ended September 30, 1996 and 1995, respectively.
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
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, 1995. 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 and nine-month
periods ended September 30, 1996, 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 1996 presentation.
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, 1995.
Summary
Consolidated net earnings increased $2.2 million and net
revenues increased $7.9 million during the 1996 third quarter
over the same quarter of 1995. Activity in the Company's private
client group business lines slowed during the 1996 third quarter
from record levels experienced during the second quarter.
However, the Company's equity capital markets business lines'
revenues surged during the third quarter, posting results 39
percent higher than the previous quarter and 36 percent higher
than the third quarter of 1995. The Company, along with the rest
of the securities industry, continued to benefit from relatively
strong equity markets. Fixed income markets, however, remained
difficult due to uncertainty caused by interest rate volatility.
Consolidated net earnings increased $16.1 million while net
revenues increased $68.6 million during the first nine months of
1996 versus the same period of 1995.
Results of Operations:
<TABLE>
<CAPTION>
Three Months ended September 30,
Nine Months ended September 30,
(Unaudited, in thousands) 1996 1995 1996 1995
----------------------------------
<S> <C> <C> <C> <C>
Net Revenues:
Dain Bosworth
Incorporated $99,705 $93,045 $301,210 $256,336
Rauscher Pierce
Refsnes, Inc. 50,454 49,020 156,741 133,805
Corporate, other and
eliminations 876 1,041 2,961 2,179
------- ------- ------- -------
$151,035 $143,106 $460,912 $392,320
======= ======= ======= =======
Earnings (Loss) before
income taxes:
Dain Bosworth
Incorporated $15,242 $13,501 $45,651 $29,355
Rauscher Pierce
Refsnes, Inc. 6,976 5,320 22,680 12,740
Corporate, other and
eliminations (2,234) (1,855) (5,104) (2,856)
------- ------- ------- -------
$19,984 $16,966 $63,227 $39,239
======= ======= ======= =======
</TABLE>
Commission revenues increased $2.6 million, or 5 percent,
from the 1995 third quarter as a result of increased sales to
individual and institutional investors of: (1) mutual funds; (2)
over-the-counter equity securities sold on an agency basis; and
(3) insurance and annuity products. These increases were
partially offset by a decrease in listed equity securities to
individual and institutional investors. For the first nine
months, revenues increased $36.9 million, or 29 percent, over
1995 due to increased sales to individual and institutional
investors of: (1) over-the-counter equity securities sold on an
agency basis; (2) mutual funds; (3) listed equity securities; and
(4) insurance and annuity products. Contributing to the revenue
increases were 11 percent and 20 percent increases, respectively,
in the New York Stock Exchange's average daily trading volumes
for the quarter and year-to-date over the comparable 1995
periods.
Revenues from principal transactions declined $4.3 million,
or 10 percent, and $5.8 million, or 4 percent, during the third
quarter and first nine months, respectively, from the comparable
1995 periods. For the quarter the revenue declines were due
primarily to reduced over-the-counter equity trading results and,
to a lesser degree, poorer trading results in taxable fixed
income securities. The decline in over-the-counter equity
trading results was brought about by narrower spreads earned in
trading such products compared with the third quarter of 1995.
For the year-to-date period, the revenue declines were chiefly
the result of poorer trading results in taxable and tax-exempt
securities, which were precipitated by the development of an
increasing interest rate environment during the 1996 second
quarter, and were partially offset by increased trading revenues
from over-the-counter equity securities.
Investment banking and underwriting revenues increased $7.2
million, or 31 percent, in the third quarter and $20.3 million,
or 34 percent, year-to-date due primarily to higher levels of
equity underwriting and mergers and acquisitions services
performed for the Company's corporate clients, as well as
increases in syndicate participation revenues. Such revenue
increases were partially offset by decreases in underwriting and
fee revenues earned from the Company's municipal and governmental
clients. These declines resulted primarily from a continuation
of difficult fixed income security market conditions.
Net interest income increased $1.5 million, or 13 percent,
and $5.6 million, or 17 percent, for the quarter and year-to-
date, respectively, due principally to increases in customer
margin balances resulting from the third quarter transfer of
several large customer accounts from competitors to the Company's
broker-dealers, as well as continued growth in total margin
debits. Such increases in net interest income, however, were
partially offset by the effects of the third quarter transfer of
approximately $300 million in customer credit balances to
Company-sponsored money market funds as a result of the offering
of new cash management products to certain segments of its
customers. Management believes that implementation of new cash
management products and services will result in higher asset
management revenues, but will be offset by lower net interest
income and, accordingly, is not initially expected to have a
material effect on net earnings. As long as favorable interest
rate spreads are maintained and the level of interest-bearing
accounts remains significant, the Company expects net interest
income to continue to be a significant contributor to earnings
(see also "Liquidity and Capital Resources" below).
Asset management revenues increased $2.0 million, or 27
percent, for the quarter and $6.5 million, or 33 percent, for the
year-to-date period from higher levels of assets in fee-based
managed account programs at Dain Bosworth and Rauscher Pierce
Refsnes, as well as 34 percent and 23 percent increases in assets
under management at IFG Asset Management Services, Inc. ("AMS")
over the previous year's quarter and year-to-date periods,
respectively. The significant rise in assets under management at
AMS was the result of the aforementioned transfer of
approximately $300 million in customer credits from the Company's
balance sheet to money market funds managed by AMS (see also
"Liquidity and Capital Resources below).
Third quarter 1996 revenues from correspondent clearing
approximated those generated in the 1995 third quarter. Revenues
from correspondent clearing increased $2.9 million, or 32
percent, as the Company benefited from increased trade volumes,
primarily during the 1996 first half, for correspondent brokerage
firms served by RPR Correspondent Services, as well as an
increase in the number of correspondents.
Compensation and benefits expense increased $2.1 million,
or 2 percent, during the 1996 third quarter and $33.6 million, or
13 percent, over the first nine months of 1996 versus the
comparable periods of 1995. The increase for the quarter is due
primarily to increased incentive compensation accruals resulting
from higher levels of earnings and increased fixed compensation
expense related to increases in the salaried employee base and
salary rate increases. For the nine-month period, the expense
increase relates to increased commissions paid to revenue-
producing employees generating higher levels of operating
revenues and increased incentive compensation accruals due to
higher levels of earnings as well as increased fixed compensation
expense related to higher numbers of salaried employees and
salary increases.
Expenses other than compensation and benefits increased
$2.8 million, or 8 percent, over the third quarter of 1995
primarily as a result of: (1) increased travel and promotional
costs associated with the generation of new business; (2)
increased occupancy costs stemming from expansion of certain
operating office locations including increased operating costs
and real estate taxes associated with such locations; (3)
increased communications costs stemming from the 1996 rollout of
improved investment executive workstations; and (4) increased
litigation-related expenses. For the year-to-date period,
expenses other than compensation and benefits increased $11.0
million, or 11 percent, over 1995 as a result of: (1) increased
travel and promotional costs stemming from the generation of new
business; (2) increased litigation-related expenses; (3)
increased occupancy costs stemming from expansion of certain
operating office locations including increased operating costs
and real estate taxes associated with such locations; and (4)
increased communications costs stemming from the 1996 rollout of
improved investment executive workstations.
LIQUIDITY AND CAPITAL RESOURCES
Late in the 1996 second quarter, the Company began offering
new cash management products to certain segments of its customers
that resulted in the transfer of approximately $300 million of
customer credit balances to Company-sponsored money market funds
during the third quarter. Management anticipates additional
transfers of $50 million to $100 million in customer credits
during the fourth quarter. Additionally, the Company experienced
a $146.8 million increase in customer receivables during the
third quarter due largely to the transfer of several large
customer accounts from competitors to the Company's broker-
dealers during the quarter. As the result of these developments,
the Company's short-term borrowings increased, in part to support
the increase in margin debits and the reduction in customer
credits as a funding source. Management, however, believes that
its financing sources are sufficient to finance ongoing
operations.
As described in Note J to the Consolidated Financial
Statements of the Company's 1995 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
September 30, 1996, net capital was $75.3 million at Regional
Operations Group, which was 7.8 percent of aggregate debit
balances and $27.2 million in excess of the 5-percent
requirement. At September 30, 1996, Dain Bosworth and Rauscher
Pierce Refsnes had net capital of $32.0 million and $21.9
million, respectively, in excess of the $1 million requirement.
In April 1994 the Company's Board of Directors authorized a
plan to repurchase up to 600,000 shares of the Company's common
stock. As of July 31, 1996 the Company had repurchased the
entire 600,000 shares in accordance with this program at a cost
of $11.8 million. On August 7, 1996, the Company's Board of
Directors approved a 100,000 share extension of the common stock
repurchase plan. Purchases of the common stock may be made from
time to time at prevailing market 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 other corporate purposes.
Through October 31, 1996, no shares had been repurchased pursuant
to this extension.
In January 1996 the Company entered into a three-year, $4.6
million operating lease agreement to finance the acquisition of
state-of-the-art technology in the form of investment executive
workstations, which the Company believes will improve
productivity and client service of Dain Bosworth and Rauscher
Pierce Refsnes investment executives. In conjunction with this
project, the Company also purchased with cash an additional $2.5
million of workstation equipment during the first nine months of
1996.
On May 1, 1996, the Company's Board of Directors announced
that it would increase the regular quarterly cash dividend paid
on the Company's common stock from $.11 per share to $.15 per
share beginning with the dividend paid in the 1996 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.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company and/or its subsidiaries, Dain Bosworth and
Rauscher Pierce Refsnes, are defendants in various civil actions
and arbitrations incidental to their businesses involving alleged
violations of federal and state securities laws and other laws.
Some of these actions, including the actions described in more
detail below, claim substantial damages. Some of the actions
have also been brought on behalf of purported classes of
plaintiffs and relate to underwritings of securities.
Midwest Life Insurance Litigation
The Company and Dain Bosworth have been named as
defendants in ten actions brought by insurance guaranty
associations and certain individuals in connection with
losses suffered under single premium deferred annuities
issued by Midwest Life Insurance Company ("MWL"), a former
subsidiary acquired by the Company in 1980 and sold by it in
early 1986. Such annuities were sold primarily through the
private client sales force of Dain Bosworth. MWL, which was
sold two times subsequent to its sale by the Company in 1986
and was relocated from Nebraska to Louisiana by the final
owners, Southshore Holding Corp., was declared insolvent and
ordered liquidated by the State of Louisiana in August 1991.
Generally, MWL policyholders have been reimbursed for their
losses up to $100,000 per holder by the state guaranty
funds. The plaintiffs (or real parties in interest) in
these cases are certain individual policyholders and/or the
Life and Health Guaranty Associations of each of Colorado,
Iowa, Minnesota, Montana, Nebraska, North Dakota, Oregon,
South Dakota, Washington and Wyoming, which claim to have
succeeded to the rights of policyholders they reimbursed for
MWL losses. Plaintiffs in the aggregate seek to recover in
excess of $64 million in compensatory damages, as well as
punitive damages, interest, costs, attorneys' fees and other
relief.
The first of these actions, Karsian, et al. v. Inter-
Regional Financial Group, Inc., and Dain Bosworth
Incorporated, is pending in the United States District Court
for the District of Colorado. This action was initially
brought in August 1993 as a purported class action and named
Rauscher Pierce Refsnes as an additional defendant. The
court has since held, however, that there are no proper
class claims and the claims against Rauscher have been
dismissed. The plaintiffs in this action seek approximately
$10.7 million in compensatory damages. They initially
alleged common law fraud, breach of fiduciary duty,
negligence and negligent misrepresentation, civil
conspiracy, RICO claims, breach of contract, and claims
under the Investment Advisors Act of 1940 and various state
laws. However, the RICO, breach of contract, and Investment
Advisors Act claims were dismissed by the trial court along
with the class claims in July 1995.
The other nine actions, which were brought in April and
May 1995, allege similar claims to the Colorado action. In
certain states, the plaintiffs also allege intentional
infliction of economic harm, interference with contractual
relations and/or aiding and abetting the breaches of duty by
the final sets of owners of MWL. Eight of such actions are
captioned and pending as follows, and the plaintiffs in each
action seek the amount of compensatory damages indicated in
parentheses:
Iowa Life and Health Insurance Guaranty Ass'n v. Inter-
Regional Financial Group, Inc. and Dain Bosworth
Incorporated (Iowa Dist. Ct., Polk County) ($5.7 million)
C. Randolph, L. Schnobrich, V. Troumbly, P. Dumke, E. Davis
and Minnesota Life and Health Insurance Guaranty Ass'n v.
Inter-Regional Financial Group, Inc. and Dain Bosworth
Incorporated (Hennepin County Dist. Ct.) ($32.2 million)
Montana Life and Health Insurance Guaranty Ass'n v. Inter-
Regional Financial Group, Inc. and Dain Bosworth
Incorporated, (Montana First Judicial Court, Lewis & Clark
County) ($3.4 million)
Nebraska Life and Health Insurance Guaranty Ass'n v. Inter-
Regional Financial Group, Inc. and Dain Bosworth
Incorporated, (Nebraska Dist. Ct., Lancaster County) ($2.8
million)
North Dakota Life and Health Insurance Guaranty Ass'n v.
Inter-Regional Financial Group, Inc. and Dain Bosworth
Incorporated, (District Court, Cass County, North Dakota)
($2.1 million)
South Dakota Life and Health Insurance Guaranty Ass'n v.
Inter-Regional Financial Group, Inc. and Dain Bosworth
Incorporated, (South Dakota Second Judicial Circuit,
Minnehaha County) ($1.7 million)
Washington Life and Health Insurance Guaranty Ass'n v.
Inter-Regional Financial Group, Inc. and Dain Bosworth
Incorporated, (Washington Superior Court for King County)
($2.1 million)
Wyoming Life and Health Insurance Guaranty Ass'n v. Inter-
Regional Financial Group, Inc. and Dain Bosworth
Incorporated, (Wyoming District Court for Laramie County)
($2.7 million)
The ninth such action, captioned Oregon Life and Health
Insurance Guaranty Ass'n v. Inter-Regional Financial Group,
Inc. and Dain Bosworth Incorporated, was filed in the Oregon
Circuit Court of Multnomah County and sought approximately
$.5 million in damages. Such action was dismissed in
October 1996 following a partial summary judgment ruling in
favor of the Company on statute of limitations grounds.
Plaintiff has indicated their intention to appeal such
ruling.
The Company and Dain Bosworth believe that they have
substantial and meritorious defenses available in all of the
foregoing actions and they are defending themselves
vigorously.
The Resolution Trust Corporation
Rauscher Pierce Refsnes and Robert H. Brown, Jr.,
Rauscher Pierce Refsnes' executive vice president of equity
capital markets, have been named as defendants in an action
captioned Federal Deposit Insurance Corporation, as receiver
for Western Savings & Loan Association, F.A. vs. Express
America Holdings Corporation; Smith Barney Harris Upham &
Co.; Rauscher Pierce Refsnes, Inc., et al. This action was
brought in the U.S. District Court in Phoenix, Arizona in
December 1995 by The Resolution Trust Corporation (the
"RTC") and arises out of the RTC's sale through an auction
process conducted in the fall of 1990 of the stock of WESAV
Mortgage Corporation ("WESAV"), a subsidiary of Western
Savings & Loan Association, F.A. Rauscher Pierce Refsnes
acted as broker for the sale and Smith Barney Harris Upham &
Co. ("Smith Barney") acted as the RTC's financial advisor.
WESAV was eventually sold to First Western Partners, the
predecessor to Express America Holdings Corporation
("Express America"), in May 1991 for a gross acquisition
price of approximately $45 million, including the assumption
of approximately $19 million in liabilities. The RTC alleges
that Rauscher, as broker, improperly favored Express America
over other allegedly higher bidders, and that Rauscher and
Smith Barney committed fraud in connection with the auction
and sale, were negligent in their analysis and communication
of bids to the RTC, and breached their contracts with and
fiduciary duties to the RTC. In addition to the corporate
defendants and Mr. Brown, the RTC also named as defendants
in the action Express America's chief executive officer and
chief financial officer, the former chief executive officer
and former chief financial officer of WESAV, and certain
other individuals. It alleges such officers of Express
America and WESAV were guilty of mismanagement between the
conclusion of the auction process and closing of the sale.
The RTC seeks from all parties compensatory damages in
excess of $20 million and punitive damages of $60 million,
along with interest, costs and other relief. Effective
January 1, 1996 the RTC was merged into the Federal Deposit
Insurance Corporation, which became the plaintiff in this
action.
Defendants' motions to dismiss the case on the face of
the complaint were denied in August 1996. Rauscher Pierce
Refsnes and Mr. Brown believe that they have substantial and
meritorious defenses available, and they are defending
themselves vigorously in this action.
Orange County v. RPR
Rauscher Pierce Refsnes was also named in an adversary
proceeding commenced by the County of Orange ("the County"),
captioned County of Orange, a political subdivision of the
State of California v. Rauscher Pierce Refsnes, Inc., a
corporation and filed in the Chapter 9 proceeding entitled
In re County of Orange, a political subdivision of the State
of California in the United States Bankruptcy Court for the
Central District of California. The case was filed in June
1996 simultaneously with the filing of adversary proceedings
against Morgan Stanley & Co., Inc., Student Loan Marketing
Association ("Sallie Mae"), LeBouef, Lamb, Greene & MacRae,
and McGraw-Hill Companies, Inc. d/b/a Standard & Poors.
Previously, the County had filed adversary proceedings
against Merrill Lynch & Co., Inc. and KPMG Peat Marwick, and
in September 1996 the county filed an adversary proceeding
against Fuji Securities Inc. In each of these proceedings,
the County seeks at least $500 million in losses allegedly
incurred in the Orange County Investment Pool ("OCIP")
except that it seeks a lesser amount (approximately $120
million) from Fuji. All of the foregoing proceedings have
been transferred from the bankruptcy court to the United
States District Court for the Central District of California
upon the request of Rauscher and other defendants. The
County has signed tolling agreements with at least 14 other
potential defendants in similar proceedings.
The County alleges that Rauscher was a financial
advisor on five note offerings by the County that took place
in June through August of 1994, including an offering of
$600 million in taxable one-year notes in July 1994. The
County alleges that by failing to apprise the County of the
risks involved in the OCIP and in the County's 1994 note
offering program, and by failing to prevent the issuance of
allegedly inaccurate official statements, Rauscher became
liable for breach of contract, professional negligence,
breach of fiduciary duty and aiding and abetting breaches of
fiduciary duty committed by the County Treasurer and
Assistant Treasurer. Rauscher denies these allegations,
including the allegation that it was a "financial advisor"
in connection with these transactions. In each of the five
transactions in question, Rauscher was retained solely to
determine whether the underwriter's spread (including the
portion to be received by the financial and marketing
specialist) and proposed interest rate were appropriate.
Rauscher believes it has substantial and meritorious
defenses available and is defending itself vigorously in
this action.
While the outcome of any litigation is uncertain,
management, based in part upon consultation with legal counsel as
to certain of the actions pending against the Company and/or its
subsidiaries, believes that the resolution of all such matters
will not have a material adverse effect on the consolidated
financial condition or results of operations of the Company as
set forth in the consolidated financial statements contained
herein.
<PAGE>
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibit 3.1 - Amended and Restated Bylaws of the Company
Exhibit 11 - Computation of Net Earnings Per Share
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
One report on Form 8-K was filed during the quarter ended
September 30, 1996.
Items reported:
Item 5 - Other Events (Press release regarding a 15 cent
regular quarterly cash dividend and extension of share
repurchase plan).
Date of Report - August 7, 1996
Financial Statements Filed - None
<PAGE>
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.
INTER-REGIONAL FINANCIAL GROUP, INC.
Registrant
Date: November 13, 1996 By Daniel J. Reuss
--------------------------
Daniel J. Reuss
Senior Vice President,
Corporate Controller and
Treasurer (Principal
Accounting Officer)
<PAGE>
INTER-REGIONAL FINANCIAL GROUP, INC. AND SUBSIDIARIES
INDEX OF EXHIBITS TO QUARTERLY REPORT ON FORM 10-Q
FOR QUARTER ENDED SEPTEMBER 30, 1996
Exhibit 3.1 Amended and Restated Bylaws of the Company
Exhibit 11 Computation of Net Earnings Per Share
Exhibit 27 Financial Data Schedule
EXHIBIT 11
<TABLE>
INTER-REGIONAL FINANCIAL GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited, in thousands, except per-share amounts)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
--------------------------------------
<S> <C> <C> <C> <C>
Primary earnings per share:
Net earnings $12,990 $10,816 $41,098 $25,015
====== ====== ====== ======
Average number of common
and common equivalent
shares outstanding:
Average common shares
outstanding 12,155 12,134 12,121 12,123
Stock options 511 472 453 396
Shares credited to Wealth
Accumulation Plan participants 111 - 92 -
------ ------ ------ ------
12,777 12,606 12,666 12,519
====== ====== ====== ======
Primary earnings per share $ 1.02 $.86 $3.24 $2.00
====== ====== ====== ======
Earnings per share assuming
full dilution:
Net earnings $12,990 $10,816 $41,098 $25,015
====== ====== ====== ======
Average number of common and
common equivalent shares
outstanding:
Average common shares
outstanding 12,155 12,134 12,121 12,123
Stock options 654 586 676 609
Shares credited to Wealth
Accumulation Plan participants 111 - 92 -
------ ------ ------ ------
12,920 12,720 12,889 12,732
====== ====== ====== ======
Fully diluted earnings
per share $1.01 $.85 $3.19 $1.96
====== ====== ====== ======
</TABLE>
EXHIBIT 3.1
AMENDED AND RESTATED BYLAWS
OF
INTER-REGIONAL FINANCIAL GROUP, INC.
ARTICLE I
OFFICES
The registered office of Inter-Regional Financial Group, Inc.
(hereinafter referred to as the "Corporation") in the State of
Delaware shall be located in the City of Wilmington, County of
New Castle. The Corporation's principal place of business shall
be at Dain Bosworth Plaza, 60 South Sixth Street, Minneapolis,
Minnesota. The Corporation may establish or discontinue, from
time to time, such other offices and places of business within or
without the State of Delaware as may be deemed proper for the
conduct of the Corporation's business.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. Annual Meeting. The annual meeting of the holders
of shares of such classes of stock as are entitled to notice
thereof and to vote thereat pursuant to the provisions of the
Certificate of Incorporation (hereinafter called the "Annual
Meeting of Stockholders") for the purpose of electing directors
and transacting such other business as may come before it shall
be held on the last Friday in April each year (or if that day be
a legal holiday, then on the next succeeding day not a legal
holiday), at 2:00 p.m. at Dain Bosworth Plaza, 60 South Sixth
Street, in the City of Minneapolis, Minnesota, or at such other
date, time and place (within or without the State of Delaware) as
shall be designated by the Board of Directors.
SECTION 2. Special Meetings. In addition to such special
meetings as are provided for by law or by the Certificate of
Incorporation, special meetings of the holders of any class or of
all classes of the Corporation's stock may be called at any time
by the Board of Directors, the Executive Committee of the Board,
the Chairman of the Board, or the Chief Executive Officer, and
may be held at such time, on such day and at such place, within
or without the State of Delaware, as shall be designated by the
Board of Directors. Special meetings of the holders of the
Common Stock shall be called by the Secretary upon the written
request, stating the purpose or purposes of any such meeting, of
the holders of Common Stock who hold of record collectively at
least 25% of the outstanding shares of Common Stock of the
Corporation.
SECTION 3. Notice of Meetings. Notice of a stockholders'
meeting shall be given either personally or by mail or by other
means of written communication, addressed to the stockholder at
the address of such stockholder appearing on the books of the
Corporation or given by the stockholder to the Corporation for
the purpose of notice. Notice by mail shall be deemed to have
been given at the time a written notice is deposited in the
United States' mail, postage prepaid. Any other written notice
shall be deemed to have been given at the time it is personally
delivered to the recipient or is delivered to a common carrier
for transmission, or actually transmitted by the person giving
the notice by electronic means, to the recipient. Notices shall
be delivered personally or mailed not more than sixty (60) days
and not less than ten (10) days before the day of the meeting.
The business which may be transacted at any special meeting of
stockholders shall consist of and be limited to the purpose of
purposes stated in such notice. An authorized officer of the
Transfer Agent of the Corporation shall, after giving such
notice, make an affidavit stating that notice has been given.
Such affidavit shall be filed with the minutes of such meeting or
otherwise retained by the Corporation in such manner and place as
is determined by the Secretary or an Assistant Secretary of the
Corporation.
SECTION 4. Waiver of Notice. Whenever notice is required to
be given under any provision of law or of the Certificate of
Incorporation or the Bylaws, a waiver thereof in writing or by
telegraph, facsimile transmission, cable or other form of
recorded communication signed by the person entitled to notice,
whether before, at or after the time stated therein, shall be
deemed equivalent to notice. Attendance of a person at a meeting
of stockholders shall constitute a waiver of notice of such
meeting, except when the person attends such meeting for the
express purpose of objecting, at the beginning of the meeting, to
the transaction of any business because the meeting is not
lawfully called or convened. Neither the business to be
transacted at, nor the purpose of, any meeting of stockholders
need be specified in a waiver of notice unless so required by the
Certificate of Incorporation.
SECTION 5. Organization. The Chairman of the Board of
Directors shall act as Chairman at all meetings of stockholders
at which he or she is present, and as such Chairman shall call
such meetings of stockholders to order and preside thereat. If
the Chairman is absent from any meeting of stockholders, the
duties provided in this Section 5, Article II shall be performed
by the Chief Executive Officer of the Corporation or such other
officer as the Board of Directors shall determine. The
Secretary of the Corporation shall act as secretary at all
meetings of the stockholders, but in his or her absence the
chairman of the meeting may appoint any person present to act as
secretary of the meeting.
SECTION 6. Inspectors. All votes by ballot at any meeting of
stockholders shall be conducted by two inspectors, who need not
be stockholders, who shall, except as otherwise provided by law,
be appointed for the purpose by the Board of Directors or the
chairman of the meeting. The inspectors shall decide upon the
qualification of voters, count the votes and declare the result.
SECTION 7. Stockholders Entitled to Vote. The Board of
Directors may fix a date not more than sixty (60) days nor less
than ten (10) days prior to the date of any meeting of
stockholders, or prior to the last day on which the consent or
dissent of stockholders may be effectively expressed for any
purpose without a meeting, as a record date for the determination
of the stockholders entitled (i) to notice of and to vote at such
meeting and any adjournment thereof or (ii) to give such consent
or express such dissent, and in such case such stockholders and
only such stockholders as shall be stockholders of record on the
date so fixed shall be entitled to notice of, and to vote at,
such meeting and any adjournment thereof, or to give such consent
or express such dissent, as the case may be, notwithstanding any
transfer of any stock on the books of the Corporation after any
such record date fixed as aforesaid. The Secretary or any
Assistant Secretary shall prepare and make or cause to be
prepared and made, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to
vote at such meeting, arranged in alphabetical order and showing
the address of each such stockholder and the number of shares
registered in the name of each such stockholder. Such list shall
be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a
period of at least ten (10) days prior to the meeting, either at
a place, specified in the notice of the meeting, within the city
where the meeting is to be held, or, if not so specified, at the
place where the meeting is to be held. Such list shall be
produced and kept at the time and place of the meeting during the
whole time thereof, and subject to the inspection of any
stockholder who may be present.
SECTION 8. Quorum and Adjournment. Except as otherwise
provided by law or by the Certificate of Incorporation, the
holders of a majority of the shares of stock entitled to vote at
the meeting present in person or by proxy without regard to class
shall constitute a quorum at all meetings of the stockholders.
In the absence of a quorum, the holders of a majority of such
shares of stock present in person or by proxy may adjourn any
meeting, from time to time, until a quorum shall be present. At
any such adjourned meeting at which a quorum may be present, any
business may be transacted which might have been transacted at
the meeting as originally called. No notice of any adjourned
meeting need be given other than by announcement at the meeting
that is being adjourned, provided that if the adjournment is for
more than thirty (30) days, or if after the adjournment a new
record date is fixed for the adjourned meeting, then a notice of
the adjourned meeting shall be given to each stockholder of
record entitled to vote at the meeting.
SECTION 9. Order of Business. The order of business at all
meetings of stockholders shall be as determined by the chairman
of the meeting or as otherwise determined by the vote of the
holders of a majority of the shares of stock present in person or
by proxy and entitled to vote without regard to class at the
meeting.
SECTION 10. Vote of Stockholders. Except as otherwise
permitted by law or by the Certificate of Incorporation or the
Bylaws, all action by stockholders shall be taken at a
stockholders' meeting. Every stockholder of record, as
determined pursuant to Section 7 of this Article II, and who is
entitled to vote, shall, except as otherwise expressly provided
in the Certificate of Incorporation with respect to any class of
the Corporation's capital stock, be entitled at every meeting of
the stockholders to one vote for every share of stock standing in
his name on the books of the Corporation. Election of directors
shall be by written ballot if requested by any stockholder, but,
unless otherwise provided by law, no vote on any question upon
which a vote of the stockholders may be taken need be by ballot
unless the chairman of the meeting shall determine that it shall
be by ballot or the holders of a majority of the shares of stock
present in person or by proxy and entitled to participate in such
vote shall so demand. In a vote by ballot each ballot shall
state the number of shares voted and the name of the stockholder
or proxy voting. Except as otherwise provided by law or by the
Certificate of Incorporation, all elections of directors and all
questions shall be decided by the vote of the holders of a
majority of the shares of stock present in person or by proxy at
the meeting and entitled to vote in the election or on the
question.
SECTION 11. Proxies. Every stockholder entitled to vote or to
express consent or dissent to corporate action in writing without
a meeting may authorize another person or persons to act for him
by proxy duly appointed by an instrument in writing, subscribed
by such stockholder and executed not more than three (3) years
prior to the meeting, unless the instrument provides for a longer
period. The attendance at any meeting of stockholders of a
stockholder who may theretofore have given a proxy shall not have
the effect of revoking such proxy unless such stockholder shall
in writing so notify the secretary of the meeting prior to the
voting of the proxy.
SECTION 12. Consent of Stockholders in Lieu of Meeting.
Except as otherwise provided by law or by the Certificate of
Incorporation, any action required to be taken, or which may be
taken, at any meeting of stockholders may be taken without a
meeting, without prior notice and without a vote, if a consent in
writing, setting forth the action so taken, shall be signed by
the holders of shares of outstanding stock having not less than
the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares of stock
entitled to vote thereon were present and voted; provided, that
prompt notice of the taking of corporate action without a meeting
by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
SECTION 13. Notice of Business. At any meeting of
stockholders, only such business shall be conducted as shall have
been brought before the meeting (a) by or at the direction of the
Board, (b) in accordance with Rule 14a-8 under the Securities
Exchange Act of 1934, or (c) by a stockholder of record entitled
to vote at such meeting who complies with the notice procedures
set forth in this Section. For business to be properly brought
before a meeting by such a stockholder, the stockholder shall
have given timely notice thereof in writing to the Secretary of
the Corporation. To be timely, such notice shall be delivered to
or mailed and received at the principal executive office of the
Corporation not less than thirty days prior to the meeting;
provided, however, that in the event that less than forty days'
notice of the date of the meeting is given by the Corporation,
notice by the stockholder to be timely must be so received not
later than the close of business on the fifth day following the
day on which such notice of the date of the meeting was mailed or
otherwise given. Such stockholder's notice to the Secretary
shall set forth as to each matter the stockholder proposes to
bring before the meeting (a) a brief description of the business
desired to be brought before the meeting, and in the event that
such business includes a proposal to amend either the Certificate
of Incorporation or the Bylaws of the Corporation, the language
of the proposed amendment, (b) the name and address of the
stockholder proposing such business, (c) the class and number of
shares of stock of the Corporation which are owned by such
stockholder, and (d) any material personal interest of such
stockholder in such business. If notice has not been given
pursuant to this Section, the Chairman of the meeting shall, if
the facts warrant, determine and declare to the meeting that the
proposed business was not properly brought before the meeting,
and such business may not be transacted at the meeting. The
foregoing provisions of this Section do not relieve any
stockholder of any obligation to comply with all applicable
requirements of the Securities Exchange Act of 1934 and the rules
and regulations promulgated thereunder.
SECTION 14. Notice of Board Candidate. At any meeting of
stockholders, a person may be a candidate for election to the
Board only if such person is nominated (a) by or at the direction
of the Board, (b) by any nominating committee or person appointed
by the Board, or (c) by a stockholder of record entitled to vote
at such meeting who complies with the notice procedures set forth
in this Section. To properly nominate a candidate, a stockholder
shall give timely notice of such nomination in writing to the
Secretary of the Corporation. To be timely, such notice shall be
delivered to or mailed and received at the principal executive
office of the Corporation not less than thirty days prior to the
meeting; provided, however, that in the event that less than
forty days' notice of the date of the meeting is given by the
Corporation, notice of such nomination to be timely must be so
received not later than the close of business on the fifth day
following the day on which such notice of the date of the meeting
was mailed or otherwise given. Such stockholder's notice to the
Secretary shall set forth (a) as to each person whom the
stockholder proposes to nominate (i) the name, age, business
address and residence address of the person, (ii) the principal
occupation or employment of the person, (iii) the class and
number of shares of stock of the Corporation which are owned by
the person, and (iv) any other information relating to the person
that would be required to be disclosed in a solicitation of
proxies for election of directors pursuant to Regulation 14A
under the Securities Exchange Act of 1934; and (b) as to the
stockholder giving the notice (i) the name and address of such
stockholder and (ii) the class and number of shares of stock of
the Corporation owned by such stockholder. The Corporation may
require such other information to be furnished respecting any
proposed nominee as may be reasonably necessary to determine the
eligibility of such proposed nominee to serve as a director of
the Corporation. No person shall be eligible for election by the
stockholders as a director at any meeting unless nominated in
accordance with this Section.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. Election and Term. Except as otherwise provided by
law, the Certificate of Incorporation, or by the provisions of
this Article III, directors shall be elected at the Annual
Meeting of Stockholders to serve until the next Annual Meeting of
Stockholders and until their successors are elected and qualify
or until their earlier resignation, removal, or disqualification.
SECTION 2. Number. The number of directors may be fixed from
time to time by resolution of the Board of Directors but shall
not be less than three (3) nor more than thirty (30).
SECTION 3. General Powers. The business, properties and
affairs of the Corporation shall be managed by the Board of
Directors, which, without limiting the generality of the
foregoing, shall have the power to elect and appoint officers of
the Corporation, to delegate to a committee of the Board the
ability to elect and appoint certain officers of the Corporation,
to appoint and direct or to delegate to a committee of the Board
or one or more officers of the Corporation the ability to appoint
and direct agents, to grant or to delegate to a committee of the
Board or one or more officers of the Corporation the ability to
grant general or limited authority to officers, employees and
agents of the Corporation to make, execute and deliver contracts
and other instruments and documents in the name and on behalf of
the Corporation and over its seal, without specific authority in
each case, and, by resolution adopted by a majority of the whole
Board of Directors, to appoint committees of the Board in
addition to those provided for in Article IV hereof, the
membership of which may consist of one or more directors, and
which may advise the Board of Directors with respect to any
matters relating to the conduct of the Corporation's business.
The membership of such committees of the Board shall consist of
such persons as are designated by the Board of Directors whether
or not any of such persons is then a director of the Corporation.
In addition, the Board of Directors may exercise all the powers
of the Corporation and do all lawful acts and things which are
not reserved to the stockholders by law or by the Certificate of
Incorporation.
SECTION 4. Place of Meetings. Meetings of the Board of
Directors may be held at any place, within or without the State
of Delaware, from time to time designated by the Board of
Directors.
SECTION 5. Regular Meetings. Regular meetings of the Board of
Directors shall be held at such times as may be determined by
resolution of the Board of Directors and no notice shall be
required for any regular meeting. Except as otherwise provided
by law, any business may be transacted at any regular meeting of
the Board of Directors.
SECTION 6. Special Meetings; Notice and Waiver of Notice.
Special meetings of the Board of Directors shall be called by the
Secretary on the request of the Chairman of the Board of
Directors, the Chief Executive Officer, or any three other
directors stating the purpose or purposes of such meeting.
Special meetings of the Board shall be held upon two (2) days'
written notice (or notice by other recorded means such as
facsimile transmission) or notice given personally or by
telephone not later than the day before such meeting. Any such
notice (other than any notice given personally or by telephone)
shall be addressed or delivered to each director at such
director's address as it is shown upon the records of the
Corporation or as may have been given to the Corporation by the
director for purposes of notice or, if such address is not shown
on such records or is not readily ascertainable, at the place in
which the meetings of the directors are regularly held. Notice
of any meeting of the Board of Directors need not be given to any
director if he or she shall sign a written waiver thereof either
before or after the time stated therein, or if he or she shall
attend a meeting, except when he or she attends such meeting for
the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting
is not lawfully called or convened. Unless limited by law, the
Certificate of Incorporation, the Bylaws, or by the terms of the
notice thereof, any and all business may be transacted at any
special meeting without the notice thereof having so specifically
enumerated the matters to be acted upon.
SECTION 7. Organization. The Chairman of the Board shall
preside at all meetings of the Board of Directors at which he or
she is present. If the Chairman of the Board shall be absent
from any meeting of the Board of Directors, the duties otherwise
provided in this Section 7 to be performed by him or her at such
meeting shall be performed at such meeting by one of the
directors present. The Secretary of the Corporation shall act as
the secretary at all meetings of the Board of Directors and in
his or her absence a temporary secretary shall be appointed by
the chairman of the meeting.
SECTION 8. Quorum and Adjournment. Except as otherwise
provided by Section 13 of this Article III, at every meeting of
the Board of Directors a majority of the total number of
Directors shall constitute a quorum but in no event shall a
quorum be constituted by less than two directors. Except as
otherwise provided by law, or by Section 13 of this Article III,
or by Section 1 or Section 8 of Article IV, or by Section 3 of
Article VI, or by Article IX, the vote of a majority of the
directors present at any such meeting at which a quorum is
present shall be the act of the Board of Directors. In the
absence of a quorum, any meeting may be adjourned, from time to
time, until a quorum is present. No notice of any adjourned
meeting need be given other than by announcement at the meeting
that is being adjourned. Members of the Board of Directors or
any committee thereof may participate in a meeting of the Board
of Directors or of such committee by means of conference
telephone or similar communications by means of which all persons
participating in the meeting can hear each other, and
participation in such a meeting shall constitute presence in
person at such meeting.
SECTION 9. Voting. On any question on which the Board of
Directors shall vote, the names of those voting and their votes
shall be entered in the minutes of the meeting when any member of
the Board of Directors so requests.
SECTION 10. Action without a Meeting. Except as otherwise
provided by law or by the Certificate of Incorporation, any
action required or permitted to be taken at any meeting of the
Board of Directors or of any committee thereof may be taken
without a meeting, if prior to such action all members of the
Board of Directors or of such committee, as the case may be,
consent thereto in writing, and the writing or writings are filed
with the minutes of proceedings of the Board of Directors or the
committee.
SECTION 11. Resignations. Any director may resign at any time
either by oral tender of resignation at any meeting of the Board
of Directors or by written notice thereof to the Corporation.
Any resignation shall be effective immediately unless some other
time is specified for it to take effect. Acceptance of any
resignation shall not be necessary to make it effective unless
such resignation is tendered subject to such acceptance.
SECTION 12. Removal of Directors. Any director may be
removed, either for or without cause, at any time, by action of
the holders of record of a majority of the shares of Common Stock
of the Corporation present in person or by proxy at a meeting of
holders of such shares and entitled to vote thereon, and the
vacancy in the Board of Directors caused by any such removal may
be filled by action of such stockholders at such meeting or at
any subsequent meeting.
SECTION 13. Filling of Vacancies Not Caused by Removal.
Except as otherwise provided by law, in case of any increase in
the number of directors, or of any vacancy created by death,
resignation or disqualification, the additional director or
directors may be elected or the vacancy or vacancies may be
filled, as the case may be, by the Board of Directors at any
meeting by affirmative vote of a majority of the remaining
directors or by a sole remaining director though the remaining
director or directors be less than the quorum provided for in
Section 8 of this Article III. The directors so chosen shall
hold office until the next Annual Meeting of Stockholders and
until their successors are elected and qualify or until their
earlier death, resignation, removal or disqualification.
SECTION 14. Directors' Compensation. Directors shall receive
such reasonable compensation for their services as directors or
as members of committees of the Board of Directors, whether in
the form of salary, fixed fee for attendance at meetings, or
other fees, with expenses, if any, stock incentives, or
otherwise, as the Board of Directors or any committee of the
Board delegated such authority by the Board may from time to time
determine. Nothing herein contained shall be construed to
preclude any director from serving the Corporation in any other
capacity and receiving compensation therefor.
ARTICLE IV
EXECUTIVE COMMITTEE OF THE BOARD
SECTION 1. Constitution and Powers. The Board of Directors
may, by resolution adopted by affirmative vote of a majority of
the whole Board of Directors, appoint an Executive Committee of
the Board, which shall have and may exercise, during the
intervals between the meetings of the Board of Directors, all the
powers and authority of the Board of Directors in the management
of the business, properties and affairs of the Corporation,
including authority to issue stock of the Corporation and to take
all action provided in the Bylaws to be taken by the Board of
Directors; provided, however, that the foregoing is subject to
the applicable provisions of law and shall not be construed (a)
as authorizing action by the Executive Committee of the Board
with respect to any action which pursuant to Section 13 of
Article III, this Section 1 and Section 8 of this Article IV,
Section 3 of Article VI and Article IX is required to be taken by
vote of a specified proportion of the whole Board of Directors,
or with respect to action pursuant to Section 2 of the Article
III, or (b) as granting the Executive Committee of the Board the
power or authority to amend the Certificate of Incorporation,
adopt an agreement of merger or consolidation, recommend to the
stockholders the sale, lease or exchange of all or substantially
all of the Corporation's property in assets, recommend to the
stockholders a dissolution of the Corporation or a revocation of
a dissolution or declare a dividend. The Executive Committee of
the Board shall consist of such number of directors as may from
time to time be designated by the Board of Directors, but shall
not be less than two (2) nor more than twelve (12) directors.
The members of the Executive Committee shall be appointed by a
majority of the whole Board of Directors, and shall hold office
until they are removed from such committee membership or their
respective successor members of such committee are appointed by a
majority of the whole Board of Directors or until their earlier
death or resignation. All acts done and powers conferred by the
Executive Committee of the Board shall be deemed to be, and may
be certified as being, done or conferred under authority of the
Board of Directors.
SECTION 2. Place of Meetings. Meetings of the Executive
Committee of the Board may be held at any place, within or
without the State of Delaware, from time to time designated by
the Board of Directors or the Executive Committee of the Board.
SECTION 3. Meetings; Notice and Waiver of Notice. Regular
meetings of the Executive Committee of the Board shall be held at
such times as may be determined by resolution either of the Board
of Directors or the Executive Committee of the Board and no
notice shall be required for any regular meeting. Special
meetings of the Executive Committee of the Board shall be called
by the Chairman of the Board of Directors or the Secretary upon
the request of any two members thereof. Notices of special
meetings shall be mailed to each member, addressed to him or her
at his or her residence or usual place of business, not later
than two (2) days before the day on which the meeting is to be
held, or shall be sent to him or her at such place by telegraph,
facsimile transmission, cable or any other form of recorded
communication, or be delivered personally or by telephone, not
later than the day before the day of such meeting. Neither the
business to be transacted at, nor the purpose of, any special
meeting of the Executive Committee of the Board need be specified
in any notice or written waiver of notice unless so required by
the Certificate of Incorporation or the Bylaws. Notices of any
such meeting need not be given to any member of the Executive
Committee of the Board, however, if waived by him or her as
provided in Section 6 of Article III, the provisions of such
Section 6 with respect to waiver of notice of meetings of the
Board of Directors applying to meetings of the Executive
Committee of the Board as well.
SECTION 4. Organization. The Chairman of the Board of
Directors shall preside at all meetings of the Executive
Committee of the Board. In the absence of the Chairman, one of
the members shall be chosen to preside at such meeting. The
Secretary of the Corporation shall act as secretary at all
meetings of the Executive Committee of the Board and in his or
her absence a temporary secretary shall be appointed by the
chairman of the meeting.
SECTION 5. Quorum and Adjournment; Action Without a Meeting.
A majority of the members of the Executive Committee of the Board
shall constitute a quorum for the transaction of business, and
the act of a majority of those present at any meeting at which a
quorum is present shall be the act of the Executive Committee of
the Board. In the absence of a quorum, any meeting may be
adjourned from time to time until a quorum is present. No notice
of any adjourned meeting need be given other than by announcement
at the meeting that is being adjourned. The provisions of
Section 8 of Article III with respect to participation in a
meeting of a committee of the Board of Directors and the
provisions of Section 10 of Article III with respect to action
taken by a committee of the Board of Directors without a meeting
shall apply to participation in meetings of and action taken by
the Executive Committee of the Board.
SECTION 6. Voting. On any question on which the Executive
Committee of the Board shall vote, the names of those voting and
their votes shall be entered in the minutes of the meeting when
any member of the Executive Committee of the Board so requests.
SECTION 7. Records. The Executive Committee of the Board
shall keep minutes of its acts and proceedings, which shall be
submitted at the next regular meeting of the Board of Directors
unless sooner submitted at a special meeting of the Board of
Directors, and any action taken by the Board of Directors with
respect thereto shall be entered in the minutes of the Board of
Directors.
SECTION 8. Vacancies; Alternate Members; Absences. Any
vacancy among the appointed members of the Executive Committee of
the Board may be filled by affirmative vote of a majority of the
whole Board of Directors. The Board of Directors may designate
one or more directors as alternate members of the Executive
Committee of the Board who may replace any absent or disqualified
member at any meeting of the Executive Committee of the Board.
In the absence or disqualification of any member or alternate
member of the Executive Committee of the Board, the member or
members (including alternate members) thereof present at any
meeting and not disqualified from voting, whether or not
constituting a quorum, may unanimously appoint another member of
the Board of Directors to act at the meeting in the place of any
such absent or disqualified member.
ARTICLE V
OTHER BOARD COMMITTEES
SECTION 1. Appointing Other Board Committees. The Board of
Directors may from time to time, by resolution adopted by
affirmative vote of a majority of the whole Board of Directors,
appoint other committees of the Board of Directors which shall
have such powers and duties as the Board of Directors may
properly determine from time to time. No such other committee of
the Board of Directors shall be composed of fewer than two (2)
directors. The members of any such committee shall be appointed
by a majority of the whole Board of Directors and shall hold
office until they are removed from such committee membership or
their respective successor members of such committee are
appointed by a majority of the whole Board of Directors or until
their earlier death or resignation. The provisions of Section 11
of Article III shall also apply to any resignation of a member of
any other committee of the Board from such committee membership,
whether or not such director also resigns from the Board of
Directors. The Board of Directors may designate one or more
directors as alternate members of any such committee who may
replace any absent or disqualified member at any meeting of such
committee. In the absence or disqualification of any member of
such committee, the member or members thereof present at any
meeting and not disqualified from voting, whether or not he, she
or they constitute a quorum, may unanimously appoint another
member of the Board of Directors to act at the meeting in the
place of any such absent or disqualified member.
SECTION 2. Place and Time of Meetings; Notice and Waiver of
Notice; Records. Meetings of such committees of the Board of
Directors may be held at any place, within or without the State
of Delaware, from time to time designated by the Board of
Directors or such committee of the Board. Regular meetings of
any such committee of the Board shall be held at such times as
may be determined by resolution of the Board of Directors or such
committee, and no notice shall be required for any regular
meeting. A special meeting of any such committee of the Board
shall be called by resolution of the Board of Directors, or by
the Chairman of the Board of Directors or the Secretary upon the
request of any member of the committee. The provisions of
Section 3 of Article IV with respect to notice and waiver of
notice of special meetings of the Executive Committee shall also
apply to all special meetings of other committees of the Board of
Directors. Any such committee may make rules for holding and
conducting its meetings and shall keep minutes of all meetings.
SECTION 3. Quorum and Adjournment. One-third of the members
of any such committee shall constitute a quorum for the
transaction of business, and the act of a majority of those
present at any meeting at which a quorum is present shall be the
act of such committee. In the absence of a quorum, any meeting
may be adjourned from time to time until a quorum is present. No
notice of any adjourned meeting need be given other than by
announcement at the meeting that is being adjourned. The
provisions of Section 8 of Article III with respect to
participation in a meeting of a committee of the Board of
Directors and the provisions of Section 10 of Article III with
respect to action taken by a committee of the Board of Directors
without a meeting shall apply to participation in meetings of and
action taken by any such committee.
SECTION 4. Voting. On any question on which such other
committee of the Board shall vote, the names of those voting and
their votes shall be entered in the minutes of the meeting when
any member of such committee so requests.
ARTICLE VI
THE OFFICERS
SECTION 1. Officers. The officers of the Corporation may
include a Chairman of the Board of Directors, one or more Vice
Chairmen of the Board of Directors, a Chief Executive Officer, a
President, one or more Vice Presidents (which may be designated
as Assistant Vice Presidents, Senior Vice Presidents, Executive
Vice Presidents, or with such other modifier as may be determined
from time to time by the Corporation), a Secretary, one or more
Assistant Secretaries, a Chief Financial Officer, a Treasurer,
one or more Assistant Treasurers, a Controller and one or more
Assistant Controllers. The officers shall be appointed by the
Board of Directors or, to the extent so authorized by the Board
of Directors, any committee of the Board of Directors, provided,
however, that no committee of the Board of Directors shall be
authorized to appoint the Chairman of the Board of Directors, any
Vice Chairman of the Board of Directors, the Chief Executive
Officer, President, Chief Financial Officer, Treasurer, Secretary
or Controller or any Vice President designated as a Senior Vice
President or Executive Vice President. The officers of the
Corporation may also include such other officers and agents as in
the judgment of the Board of Directors or such committee of the
Board of Directors may be necessary or desirable. The Chairman of
the Board, any Vice Chairmen of the Board of Directors and the
Chief Executive Officer shall be selected from among the
Directors. The Chief Executive Officer of the Corporation may
also appoint from time to time management or other committees
consisting of such officers of the Corporation or its
subsidiaries and having such duties as he or she shall then
determine consistent with the provisions of these Bylaws, the
Certificate of Incorporation and all applicable laws.
SECTION 2. Terms of Office; Vacancies. Except as otherwise
provided in Sections 3 and 4 of this Article VI, all officers
appointed as set forth in Section 1 of this Article VI shall hold
office until their respective successors are elected and qualify,
or until they sooner die, retire, resign or are removed.
SECTION 3. Removal of Officers. Any officer may be removed at
any time, either for or without cause, by affirmative vote of a
majority of the whole Board of Directors or any committee of the
Board of Directors to which the Board of Directors delegates such
authority (as set forth in Section 1 of this Article VI). In the
event the employment of any officer who is employed by the
Corporation is terminated, such individual shall no longer be an
officer of the Corporation unless the Board of Directors or any
Board Committee to which the Board delegates such authority
expressly determines otherwise.
SECTION 4. Resignations. Any officer may resign at any time,
upon written notice of resignation to the Corporation. Any
resignation shall be effective immediately unless some other date
is specified for it to take effect, and acceptance of any
resignation shall not be necessary to make it effective unless
such resignation is tendered subject to such acceptance.
SECTION 5. Officers Holding More Than One Office. Any officer
may hold two or more offices, the duties of which can be
consistently performed by the same person.
SECTION 6. Chairman of the Board. The Chairman of the Board
shall preside at all meetings of the stockholders and at all
meetings of the Board and shall have such other powers and duties
as may from time to time be assigned by the Board or as set forth
in these Bylaws.
SECTION 7. Chief Executive Officer. The Chief Executive
Officer, subject to the control of the Board and the committees
of the Board, is the general manager of the Corporation. The
Chief Executive Officer shall have supervising authority over and
may exercise general executive power concerning the supervision,
direction and control of the business and officers of the
Corporation, with the authority from time to time to delegate to
the President and other officers such executive powers and duties
as the Chief Executive Officer may deem advisable. In the
absence of the Chairman of the Board, the Chief Executive Officer
shall preside at all meetings of the Board and the stockholders.
SECTION 8. President. The President is the chief operating
officer of the Corporation and, subject to the control of the
Board, the committees of the Board and the Chief Executive
Officer, has supervisory authority over and may exercise general
executive powers concerning the operations, business and
subordinate officers of the Corporation, with the authority from
time to time to delegate to other officers such executive powers
and duties as the President may deem advisable. In the absence
of the Chairman of the Board and the Chief Executive Officer, the
President shall preside at all meetings of the stockholders.
SECTION 9. Vice Presidents. In the absence or disability of
the President, the Vice Presidents in order of their rank as
fixed by the Board or any committee of the Board to which the
Board has delegated such authority or, if not ranked, the Vice
President designated by the Board, shall perform all duties of
the President and, when so acting, shall have all the powers of,
and be subject to all the restrictions upon, the President. The
Vice Presidents shall have such other powers and perform such
other duties as from time to time may be prescribed for them
respectively by the Board or, in the case of Vice Presidents
other than Senior Vice Presidents or Executive Vice Presidents,
any committee of the Board to which the Board has delegated such
authority. The Board of Directors may from time to time
designate one or more Vice Presidents as Senior Vice Presidents,
Executive Vice Presidents or such other modifiers as shall be
determined from time to time by the Corporation and the Board of
Directors or any committee of the Board to which the Board has
delegated such authoritymay designate one or more Vice Presidents
as Assistant Vice Presidents or such other similar modifiers as
shall be determined from time to time by the Corporation.
SECTION 10. Secretary. The Secretary shall keep or cause to
be kept, at the principal office and such other place as the
Board may order, a book of minutes of all meetings of
stockholders, the Board and its committees, with the time and
place of holding, whether regular or special, and if special, how
authorized, the notice thereof given, the names of those present
at Board and committee meetings, and the number of shares present
or represented at stockholders' meetings, and the proceedings
thereof. The Secretary shall keep, or cause to be kept, a copy
of the Bylaws of the Corporation at the principal office or
business office. The Secretary shall keep at the principal
office or cause to be kept at the principal office of any
transfer agent and registrar appointed by the Board of Directors
for each class of the Corporation's common stock a share
register, or a duplicate share register, showing the name of the
stockholders and their addresses, the number and classes of
shares held by each, the number and date of certificates issued
for the same, and the number and date of cancellation of every
certificate surrendered for cancellation. The Secretary shall
give, or cause to be given, notice of all meetings of the
stockholders and of the Board and of any committees thereof
required by these Bylaws or by law to be given, shall keep the
seal of the Corporation in safe custody, and shall have such
other powers and perform such other duties as may be prescribed
by the Board.
SECTION 11. Chief Financial Officer. The Chief Financial
Officer shall keep and maintain, or cause to be kept and
maintained, adequate and correct accounts of the properties and
business transactions of the Corporation. The books of account
shall at all times be open to inspection by any director. The
Chief Financial Officer shall deposit or cause to be deposited
all moneys and other valuables in the name and to the credit of
the Corporation with such depositories as may be designated by
the Board. The Chief Financial Officer shall disburse or cause
to be disbursed the funds of the Corporation as may be ordered by
the Board, shall render to the Chief Executive Officer and
directors, whenever they request it, an account of all
transactions as Chief Financial Officer and of the financial
condition of the Corporation, and shall have such other powers
and perform such other duties as may be prescribed by the Board.
The financial officer or officers who are subordinate to the
Chief Financial Officer (including a Controller and/or Treasurer,
if appointed), if any, shall, in the absence or disability of the
Chief Financial Officer, or at his or her request, or if a
vacancy shall exist perform his or her duties and exercise his or
her powers and authority, and shall perform such other duties and
have such other powers as the Board of Directors may from time to
time prescribe.
SECTION 12. Treasurer. Subject to the direction of the Board,
the Chief Executive Officer, the President and the Chief
Financial Officer, the Treasurer shall have the care and custody
of all the funds of the Corporation and shall deposit or cause to
be deposited the same in such banks or other depositories as the
Board of Directors, or any officer or officers thereunto duly
authorized by the Board of Directors, shall, from time to time,
direct or approve. He or she shall generally perform all the
duties usually appertaining to the affairs of the treasurer of a
corporation. When required by the Board of Directors, he or she
shall give bonds for the faithful discharge of his or her duties
in such sums and with such sureties as the Board of Directors
shall approve.
SECTION 13. Controller. he Controller is the Chief Accounting
Officer of the Corporation. The Controller shall keep and
maintain, or cause to be kept and maintained, adequate and
correct accounts of the properties and business transactions of
the Corporation, including accounts of its assets, liabilities,
receipts, disbursements, gains, losses, capital, surplus and
surplus shares. The Controller is responsible for the
formulation of the Corporation's accounting policies, procedures
and practices, and the preparation of the Corporation's financial
reports. The Controller shall establish and administer a plan
for the financial control of the Corporation and compare
performance with that plan. The Controller shall have such other
powers and duties as the Board of Directors may from time to time
prescribe.
SECTION 14. Additional Powers and Duties. In addition to the
foregoing especially enumerated duties and powers, the several
officers of the Corporation shall perform such other duties and
exercise such further powers as the Board of Directors may, from
time to time, determine, or as may be assigned to them by any
superior officer.
ARTICLE VII
STOCK AND TRANSFERS OF STOCK
SECTION 1. Stock Certificates. The capital stock of the
Corporation shall be represented by certificates signed by the
Chairman of the Board, the Chief Executive Officer, the President
or a Vice President and also by any one of the Secretary, any
Assistant Secretary, the Chief Financial Officer or the
Treasurer, and shall be sealed with the seal of the Corporation.
Any or all of the signatures of such officers may be a facsimile.
The seal may be a facsimile, engraved or printed. In case any
such officer who has signed any such certificate shall have
ceased to be such officer before such certificate is issued, it
may nevertheless be issued by the Corporation with the same
effect as if he were such officer at the date of issue. The
certificates representing the Common Stock of the Corporation
shall be in such form as shall be approved by the Board of
Directors.
SECTION 2. Registration of Transfers of Stock. Registration
of a transfer of stock shall be made on the books of the
Corporation only upon presentation by the person named in the
certificate evidencing such stock, or by an attorney lawfully
constituted in writing, and upon surrender and cancellation of
such certificate, with duly executed assignment and power of
transfer endorsed thereon or attached thereto, and with such
proof of the authenticity of the signature thereon as the
Corporation or its agents may reasonably require.
SECTION 3. Lost Certificates. In case any certificate of
stock shall be lost, stolen or destroyed, the Board of Directors,
in its discretion, or any officer or officers thereunto duly
authorized by the Board of Directors, may authorize the issuance
of a substitute certificate in the place of the certificate so
lost, stolen or destroyed; provided, however, that, in each such
case, the Corporation may require the owner of the lost, stolen
or destroyed certificate, or his, her or its legal
representative, to give the Corporation evidence which the
Corporation determines in its discretion is satisfactory of the
loss, theft, or destruction of such certificate and of the
ownership thereof, and may also require a bond sufficient to
indemnify it against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such
certificate or the issuance of such new certificate.
SECTION 4. Determination of Stockholders of Record for Certain
Purposes.
In order that the Corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution
or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the
purpose of any other lawful action, the Board of Directors may
fix, in advance, a record date, which shall not be more than
sixty (60) days prior to any such action.
SECTION 5. Registered Stockholders. The Corporation shall be
entitled to treat the holder of record of any share or shares of
stock of the Corporation as the holder in fact thereof and shall
not be bound to recognize any equitable or other claim to or
interest in such share on the part of any other person, whether
or not it shall have express or other notice thereof, except as
expressly provided by applicable law.
ARTICLE VIII
MISCELLANEOUS
SECTION 1. Seal. The seal of the Corporation shall have
inscribed thereon the name of the Corporation and the words
"Corporate Seal, Delaware."
SECTION 2. Fiscal Year. The fiscal year of the Corporation
shall be determined by the Board of Directors.
SECTION 3. References to Article and Section Numbers and to
the Bylaws and the Certificate of Incorporation. Whenever in the
Bylaws reference is made to an Article or Section number, such
reference is to the number of an Article or Section of the
Bylaws. Whenever in the Bylaws reference is made to the Bylaws,
such reference is to these Bylaws of the Corporation, as the same
may from time to time be amended, and whenever reference is made
to the Certificate of Incorporation, such reference is to the
Certificate of Incorporation of the Corporation, as the same may
from time to time be amended.
SECTION 4. Books of the Corporation. Except as otherwise
provided by law, the books of the Corporation shall be kept at
the principal place of business of the Corporation.
ARTICLE IX
AMENDMENTS
The Bylaws may be altered, amended or repealed at any annual
meeting of stockholders, or at any special meeting of holders of
shares of stock entitled to vote thereon, provided that in the
case of a special meeting notice of such proposed alteration,
amendment or repeal be included in the notice of meeting, by a
vote of the holders of a majority of the shares of stock present
in person or by proxy at the meeting and entitled to vote
thereon, or (except as otherwise expressly provided in any Bylaws
adopted by the stockholders) by the Board of Directors at any
valid meeting by affirmative vote of a majority of the whole
Board of Directors.
<TABLE> <S> <C>
<ARTICLE> BD
<LEGEND>
This schedule contains summary financial information extracted from
Inter-Regional Financial Group, Inc.'s September 30, 1996 Form 10-Q and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 89,567
<RECEIVABLES> 1,267,258
<SECURITIES-RESALE> 208,497
<SECURITIES-BORROWED> 0<F1>
<INSTRUMENTS-OWNED> 387,415
<PP&E> 33,137
<TOTAL-ASSETS> 2,033,297
<SHORT-TERM> 223,258
<PAYABLES> 1,100,853
<REPOS-SOLD> 104,379
<SECURITIES-LOANED> 0<F2>
<INSTRUMENTS-SOLD> 206,560
<LONG-TERM> 30,476
<COMMON> 1,520
0
0
<OTHER-SE> 258,685
<TOTAL-LIABILITY-AND-EQUITY> 2,033,297
<TRADING-REVENUE> 129,280
<INTEREST-DIVIDENDS> 80,470
<COMMISSIONS> 163,993
<INVESTMENT-BANKING-REVENUES> 80,244
<FEE-REVENUE> 25,849<F3>
<INTEREST-EXPENSE> 42,948
<COMPENSATION> 286,914
<INCOME-PRETAX> 63,227
<INCOME-PRE-EXTRAORDINARY> 41,098
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 41,098
<EPS-PRIMARY> $3.24
<EPS-DILUTED> $3.19
<FN>
<F1>Included in receivables
<F2>Included in payables
<F3>Includes fees from Asset Management only
</FN>
</TABLE>
