<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
-------------------------------------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to _____________
Commission file number 0 - 1220
--------------------------------
MARSHALL & ILSLEY CORPORATION
-----------------------------
(Exact name of registrant as specified in its charter)
Wisconsin 39-0968604
--------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
770 North Water Street
Milwaukee, Wisconsin 53202
-------------------- -----
(Address of principal executive offices) (Zip Code)
(414) 765 - 7801
----------------
(Registrant's telephone number, including area code)
None
----
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Outstanding at
Class October 31, 1994
----- ----------------
Common Stock, $1.00 Par Value 93,118,497
Page 1
<PAGE>
PART 1 - FINANCIAL INFORMATION
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
($000's except share data)
<TABLE>
<CAPTION>
September 30 December 31 September 30
Assets 1994 1993 1993
- ------ ------------ ------------ -------------
<S> <C> <C> <C>
Cash and cash equivalents:
Cash and due from banks $600,896 $667,114 $588,001
Federal funds sold and
security resale agreements 164,961 49,336 54,552
Money market funds 54,219 68,184 50,075
------------ ------------ -------------
Total cash and cash equivalents 820,076 784,634 692,628
Trading securities 4,629 2,852 11,542
Other short-term investments 43,371 50,121 58,466
Investment securities held to maturity,
market value $409,498 ($341,877 December
31, and $1,022,243 September 30, 1993) 410,340 335,400 1,047,842
Investment securities available for sale at
market value September 30, 1994 (amortized
cost December 31 and September 30, 1993).
Market value $2,261,117 and $1,588,678 at
December 31 and September 30, 1993,
respectively. 2,035,786 2,237,158 1,563,729
------------ ------------ -------------
Total investment securities 2,446,126 2,572,558 2,611,571
Loans 8,910,135 8,617,372 8,374,457
Less: Allowance for loan losses 152,470 133,600 131,662
------------ ------------ -------------
Net loans 8,757,665 8,483,772 8,242,795
Premises and equipment, net 291,365 299,801 286,967
Accrued interest and other assets 310,260 292,199 287,870
------------ ------------ -------------
Total Assets $12,673,492 $12,485,937 $12,191,839
============ ============ =============
Liabilities and Shareholders' Equity
- ------------------------------------
Deposits:
Noninterest bearing $2,101,750 $2,290,233 $2,089,407
Interest bearing 7,522,848 7,881,576 7,662,074
------------ ------------ -------------
Total deposits 9,624,598 10,171,809 9,751,481
Funds purchased and security
repurchase agreements 977,194 515,028 706,063
Other short-term borrowings 215,455 201,688 106,098
Long-term borrowings 519,602 234,418 263,353
Accrued expenses and other liabilities 282,684 248,481 238,666
------------ ------------ -------------
Total liabilities 11,619,533 11,371,424 11,065,661
Shareholders' equity:
Series A convertible preferred stock,
$1.00 par value; 348,944 shares issued
(185,314 shares December 31 and September
30, 1993) 349 185 185
Common stock, $1.00 par value; 99,494,335
shares issued (102,073,005 December 31,
and 101,380,212 September 30, 1993) 99,494 102,073 101,380
Additional paid-in capital 199,269 238,130 226,758
Retained earnings 901,525 897,123 867,390
Less: Treasury common stock, at cost;
6,108,518 shares (5,821,786 December 31,
and 3,474,437 September 30, 1993) 126,588 121,106 67,394
Deferred compensation 1,329 1,892 2,141
Net unrealized losses on securities
available for sale, net of related taxes 18,761 - -
------------ ------------ -------------
Total shareholders' equity 1,053,959 1,114,513 1,126,178
------------ ------------ -------------
Total Liabilities and Shareholders' Equity $12,673,492 $12,485,937 $12,191,839
============ ============ =============
</TABLE>
See notes to financial statements. Page 2
<PAGE>
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
($000's except per share data)
Three Months Ended September 30
-------------------------------
1994 1993
Interest income: ------------ ------------
Loans $175,351 $161,152
Investment securities:
Taxable 28,689 30,056
Exempt from Federal income taxes 4,051 4,942
Trading securities 35 42
Short-term investments 2,354 1,247
------------ ------------
Total interest income 210,480 197,439
Interest expense:
Deposits 65,296 66,906
Short-term borrowings 10,981 4,306
Long-term borrowings 8,038 6,522
------------ ------------
Total interest expense 84,315 77,734
------------ ------------
Net interest income 126,165 119,705
Provision for loan losses 3,655 4,400
------------ ------------
Net interest income after provision for loan losses 122,510 115,305
Other income:
Data processing services 40,045 34,847
Trust services 14,881 15,229
Other customer services 29,470 31,113
Net securities gains 210 1,585
Other 6,757 11,288
------------ ------------
Total other income 91,363 94,062
Other expense:
Salaries and employee benefits 79,941 80,498
Net occupancy 9,294 9,260
Equipment 13,775 14,607
Payments to regulatory agencies 5,842 5,788
Processing charges 5,020 4,340
Supplies and printing 4,014 3,249
Professional services 2,872 3,427
Other 21,777 21,320
------------ ------------
Total other expense 142,535 142,489
------------ ------------
Income before income taxes and extraordinary items 71,338 66,878
Provision for income taxes 26,446 24,343
------------ ------------
Income before extraordinary items 44,892 42,535
Extraordinary items, net of tax ($1,087) 1,123 -
------------ ------------
Net income $46,015 $42,535
============ ============
Net income per common share:
Primary:
Income before extraordinary items $0.45 $0.42
Extraordinary items 0.01 -
------------ ------------
Net income $0.46 $0.42
============ ============
Fully Diluted:
Income before extraordinary items $0.44 $0.40
Extraordinary items 0.01 -
------------ ------------
Net income $0.45 $0.40
============ ============
Dividends paid per common share $0.15 $0.14
Weighted average common shares outstanding:
Primary 100,192 102,128
Fully diluted 104,037 108,182
Page 3
<PAGE>
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
($000's except per share data)
Nine Months Ended September 30
------------------------------
1994 1993
Interest income: ------------ ------------
Loans $501,090 $481,100
Investment securities:
Taxable 81,795 94,502
Exempt from Federal income taxes 12,549 16,069
Trading securities 121 130
Short-term investments 5,428 4,521
------------ ------------
Total interest income 600,983 596,322
Interest expense:
Deposits 188,602 206,373
Short-term borrowings 27,972 14,221
Long-term borrowings 19,998 17,003
------------ ------------
Total interest expense 236,572 237,597
------------ ------------
Net interest income 364,411 358,725
Provision for loan losses 20,608 13,151
------------ ------------
Net interest income after provision for loan losses 343,803 345,574
Other income:
Data processing services 116,256 99,733
Trust services 45,015 45,921
Other customer services 89,519 90,472
Net securities gains (losses) (6,443) 4,145
Other 23,714 31,405
------------ ------------
Total other income 268,061 271,676
Other expense:
Salaries and employee benefits 246,493 236,639
Net occupancy 28,688 27,963
Equipment 44,794 42,715
Payments to regulatory agencies 17,672 17,399
Processing charges 14,443 12,682
Supplies and printing 10,636 9,819
Professional services 8,663 8,934
Merger / Restructuring 76,562 -
Other 72,200 64,608
------------ ------------
Total other expense 520,151 420,759
------------ ------------
Income before income taxes and extraordinary items 91,713 196,491
Provision for income taxes 45,369 68,610
------------ ------------
Income before extraordinary items 46,344 127,881
Extraordinary items, net of tax ($1,087) 1,123 -
------------ ------------
Net income $47,467 $127,881
============ ============
Net income per common share:
Primary:
Income before extraordinary items $0.46 $1.24
Extraordinary items 0.01 -
------------ ------------
Net income $0.47 $1.24
============ ============
Fully Diluted:
Income before extraordinary items $0.46 $1.19
Extraordinary items 0.01 -
------------ ------------
Net income $0.47 $1.19
============ ============
Dividends paid per common share $0.44 $0.40
Weighted average common shares outstanding:
Primary 99,871 102,917
Fully diluted 104,721 109,220
Page 4
<PAGE>
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
($000's)
Nine Months Ended September 30
-----------------------------
1994 1993
------------ ------------
Net Cash Provided by Operating Activities $217,164 $176,724
Cash Flows From Investing Activities:
Net decrease in securities with maturities of
three months or less 7,696 41,600
Proceeds from sales of securities available
for sale 569,264 19,737
Proceeds from maturities of longer term
securities 655,982 1,295,343
Purchases of longer term securities (1,144,368) (1,053,355)
Net increase in loans (406,575) (407,687)
Purchases of assets to be leased (65,868) (66,775)
Principal payments on lease receivables 85,043 78,047
Fixed asset purchases, net (17,190) (44,300)
Other 2,560 6,692
------------ ------------
Net cash provided by (used in) investing
activities (313,456) (130,698)
Cash Flows From Financing Activities:
Net decrease in deposits (547,038) (290,999)
Proceeds from issuance of commercial paper 1,316,256 740,437
Payments for maturity of commercial paper (1,265,722) (793,938)
Net increase in other short-term
borrowings 456,468 240,035
Proceeds from issuance of long-term debt 342,216 111,723
Payments of long-term debt (85,042) (44,066)
Dividends paid (43,040) (40,656)
Purchases of treasury stock (50,390) (59,646)
Other 8,026 617
------------ ------------
Net cash provided by (used in) financing
activities 131,734 (136,493)
------------ ------------
Net increase (decrease) in cash and cash
equivalents 35,442 (90,467)
Cash and cash equivalents, beginning of year 784,634 783,095
------------ ------------
Cash and cash equivalents, end of period $820,076 $692,628
============ ============
Supplemental cash flow information:
Cash paid during the period for:
Interest $231,874 $191,322
Income taxes 62,690 51,550
See notes to financial statements Page 5
<PAGE>
MARSHALL & ILSLEY CORPORATION
Notes to Financial Statements
September 30, 1994 & 1993 (Unaudited)
1.The accompanying unaudited consolidated financial statements should be read in
conjunction with Marshall & Ilsley Corporation's ("Corporation") 1993 Annual
Report on Form 10-K and the 1993 Consolidated Financial Statements restated
for the merger with Valley Bancorporation on Form 8-K filed September 27,
1994. The unaudited financial information included in this report reflects
all adjustments (consisting only of normal recurring accruals) which are
necessary for a fair statement of the financial position and results of
operations as of and for the three and nine months ended September 30, 1994
and 1993. The results of operations for the three and nine months ended
September 30, 1994 and 1993 are not necessarily indicative of results to be
expected for the entire year.
2.The Corporation has 5,000,000 shares of preferred stock authorized, of which,
the Board of Directors has designated 3,000,000 shares (500,000 shares in
1993) as Series A convertible, with a $100 value per share for conversion and
liquidation purposes.
3.The Corporation has 160,000,000 (80,000,000 in 1993) shares of its $1.00
par value common stock authorized.
4.The Corporation's loan portfolio consists of the following ($000's):
September 30 December 31 September 30
1994 1993 1993
------------ ------------ -------------
Commercial financial & agricultural $2,757,297 $2,584,719 $2,601,812
Real estate:
Construction 369,151 333,609 298,208
Residential Mortgage 2,237,621 2,223,857 2,162,864
Commercial Mortgage 2,085,258 2,000,052 1,902,850
------------ ------------ -------------
Total real estate 4,692,030 4,557,518 4,363,922
Personal 1,202,007 1,217,513 1,156,912
Lease financing 258,801 257,622 251,811
------------ ------------ -------------
$8,910,135 $8,617,372 $8,374,457
============ ============ =============
5.Effective January 1, 1994, the Corporation adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities." Accordingly, investment securites classified as available
for sale at September 30, 1994 are carried at fair value with fair value
adjustments, net of their related income tax effects, reported as a component
of shareholders' equity. Investment securities classifed as available for
sale at December 31 and September 30, 1993, are carried at amortized cost in
the accompanying consolidated balance sheets.
Investment securities, by type, held by the Corporation are as follows
($000's):
September 30 December 31 September 30
1994 1993 1993
------------- ------------ ------------
Investment securities held to maturity:
U.S. treasury and government agencies $111,571 - $625,463
State and Political Subdivisions 293,901 $326,154 358,607
Other 4,868 9,246 63,772
------------ ------------ -------------
Investment securities held to maturity 410,340 335,400 1,047,842
------------ ------------ -------------
Investment securities available for sale:
U.S. treasury and
government agencies 1,939,829 2,139,866 1,524,708
State and Political Subdivisions - - -
Other 95,957 97,292 39,021
------------ ------------ -------------
Investment securities
available for sale 2,035,786 2,237,158 1,563,729
------------ ------------ -------------
Total Investment Securities $2,446,126 $2,572,558 $2,611,571
============ ============ =============
Page 6
<PAGE>
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)
($000's)
Three Months Ended September 30
-------------------------------
1994 1993
------------ ------------
Assets
- ------
Cash and due from banks $603,810 $627,157
Short-term investments 220,637 158,890
Trading securities 2,828 5,142
Investment securities:
Taxable 2,082,981 2,214,332
Tax-exempt 350,436 395,816
------------ ------------
Total investment securities 2,433,417 2,610,148
Loans:
Commercial 2,740,144 2,566,571
Real estate 4,628,935 4,298,688
Personal 1,210,507 1,120,225
Lease financing 257,555 249,589
------------ ------------
8,837,141 8,235,073
Less: Allowance for loan losses 150,643 131,399
------------ ------------
Total loans 8,686,498 8,103,674
Premises and equipment, net 287,212 286,329
Accrued interest and other assets 287,868 269,290
------------ ------------
Total Assets $12,522,270 $12,060,630
============ ============
Liabilities and Shareholders' Equity
- ------------------------------------
Deposits:
Noninterest bearing $2,034,549 $2,034,993
Interest bearing 7,650,352 7,752,295
------------ ------------
Total deposits 9,684,901 9,787,288
Funds purchased and security repurchase
agreements 852,973 531,539
Other short-term borrowings 145,600 82,711
Long-term borrowings 491,488 308,070
Accrued expenses and other liabilities 267,578 225,011
------------ ------------
Total liabilities 11,442,540 10,934,619
Shareholders' equity 1,079,730 1,126,011
------------ ------------
Total Liabilities and Shareholders' Equity $12,522,270 $12,060,630
============ ============
Page 7
<PAGE>
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)
($000's)
Nine Months Ended September 30
------------------------------
1994 1993
------------ ------------
Assets
- ------
Cash and due from banks $617,865 $604,117
Short-term investments 186,770 187,087
Trading securities 3,516 4,640
Investment securities:
Taxable 2,142,275 2,233,922
Tax-exempt 356,618 414,095
------------ ------------
2,498,893 2,648,017
Total investment securities
Loans:
Commercial 2,691,077 2,578,100
Real estate 4,541,792 4,181,149
Personal 1,208,589 1,085,829
Lease financing 256,251 246,507
------------ ------------
8,697,709 8,091,585
Less: Allowance for loan losses 142,065 128,870
------------ ------------
Total loans 8,555,644 7,962,715
Premises and equipment, net 288,893 278,789
Accrued interest and other assets 291,371 267,959
------------ ------------
Total Assets $12,442,952 $11,953,324
============ ============
Liabilities and Shareholders' Equity
- ------------------------------------
Deposits:
Noninterest bearing $2,037,499 $1,939,455
Interest bearing 7,697,795 7,743,189
------------ ------------
Total deposits 9,735,294 9,682,644
Funds purchased and security repurchase
agreements 847,039 581,551
Other short-term borrowings 129,351 83,297
Long-term borrowings 379,273 262,016
Accrued expenses and other liabilities 241,415 222,452
------------ ------------
Total liabilities 11,332,372 10,831,960
Shareholders' equity 1,110,580 1,121,364
------------ ------------
Total Liabilities and Shareholders' Equity $12,442,952 $11,953,324
============ ============
Page 8
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
______________________________________________
For the third quarter of 1994 the Corporation reported income before
extraordinary items of $44.9 million compared to $42.5 million for the same
period last year, an increase of 5.5%. Fully diluted earnings per share
amounted to $.44, an increase of 10% when compared to the third quarter of 1993.
The Corporation's return on average assets and return on shareholders' equity
was 1.42% and 16.5% compared to 1.40% and 15.0% for the three months ended
September 30, 1993, respectively.
During the third quarter of 1994, the Corporation realized an extraordinary gain
of $3.7 million resulting from certain required branch divestitures with
deposits of $58.6 million. The Corporation also prepaid $53 million of long-
term debt. The prepayment premium paid amounted to $1.5 million and is included
in the net extraordinary gain for the quarter.
This net extraordinary gain after tax increased net income $1.1 million and
earnings per share by $.01.
PROVISION FOR LOAN LOSSES AND CREDIT QUALITY
____________________________________________
The provision for loan losses amounted to $3.7 million in the third quarter of
1994 compared to $4.4 million for the same period a year ago. The provision
level is slightly lower than that reported in the prior two quarters when
adjusted for the additional provision taken for certain Valley banks in the
second quarter of 1994.
Nonperforming assets at September 30, 1994 were $77.0 million an increase of
$7.2 million since the second quarter of 1994 and was relatively unchanged from
the third quarter of 1993.
All major categories of nonperforming assets reflected an increase when compared
to the second quarter of 1994. Nonaccrual loans, the largest component of
nonperforming assets, increased $4.6 million. All categories of nonaccrual
loans reflected a modest increase. Total nonperforming loans as a percent of
total loans outstanding amounted to .76% at September 30, 1994 compared to .70%
at June 30, 1994 and .74% September 30, 1993.
Other real estate owned (OREO) increased $1.2 million in the current quarter
when compared to the second quarter of 1994. The increase was primarily due to
the transfer of branch locations to be sold.
Net charge offs in the third quarter of 1994 amounted to $.6 million or .02% of
average loans annualized. The amount is below that reported in the second
quarter of 1994 and lower than any quarter reported in 1993. Year-to-date net
charge-offs amounted to $1.7 million compared to $5.3 million for the same
period in 1993.
The allowance for loan losses was $152.5 million or 1.71% of total loans at
September 30, 1994 compared to $149.4 million at June 30, 1994 and $131.7
million at September 30, 1993. The allowance reflects the unusual charge of
$8.9 million reported in the second quarter of 1994. The allowance for loan
losses to total loans remains at 1.71% for the current quarter compared to the
second quarter of 1994 and is above 1.57% reported in the third quarter of 1993.
<PAGE>
The following tables present certain credit quality information and statistics
at September 30, 1994 as well as the previous four quarters.
CONSOLIDATED CREDIT QUALITY INFORMATION
($000's)
1994 1993
_____________________________________________
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
_____________________________________________
NONPERFORMING ASSETS
Nonaccrual $53,987 $49,384 $44,571 $44,186 $49,965
Renegotiated 4,748 4,328 4,019 4,263 5,024
Past Due 90 Days or More 8,551 7,613 8,028 7,906 7,013
________ ___________________________________
Total Nonperforming Loans 67,286 61,325 56,618 56,355 62,002
Other Real Estate Owned 9,697 8,494 12,813 12,928 14,533
________ ___________________________________
Total Nonperforming
Assets $76,983 $69,819 $69,431 $69,283 $76,535
======== ===================================
ALLOWANCE FOR
LOAN LOSSES $152,470 $149,371 $137,174 $133,600 $131,662
======== ====================================
NONACCRUAL LOANS BY TYPE
Commercial
Commercial, Financial &
Agricultural $ 11,944 $ 11,410 $ 9,856 $ 10,055 $ 14,404
Lease Financing
Receivables 2,883 2,106 2,756 2,868 3,524
________ ___________________________________
Total Commercial 14,827 13,516 12,612 12,923 17,928
Real Estate
Construction and Land
Development 3,862 3,135 493 538 169
Commercial Mortgage 21,769 20,188 19,357 18,433 18,656
Residential Mortgage 10,725 10,062 9,492 9,631 10,409
________ ___________________________________
Total Real Estate 36,356 33,385 29,342 28,602 29,234
Personal 2,804 2,483 2,617 2,661 2,803
________ ___________________________________
Total Nonaccrual Loans $ 53,987 $ 49,384 $ 44,571 $ 44,186 $ 49,965
======== ===================================
<PAGE>
1994 1993
_____________________________________________
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
_____________________________________________
NET LOAN AND LEASE
CHARGE-OFFS
Loan and Lease
Charge-offs $ 1,993 $ 3,543 $ 2,287 $ 6,404 $ 3,613
Loan and Lease Recoveries 1,437 2,739 1,909 2,292 1,540
________ _________________________________
Net Loan and Lease
Charge-offs $ 556 $ 804 $ 378 $ 4,112 $ 2,073
======== =================================
CONSOLIDATED STATISTICS
Net Charge-offs
to Average Loans
Annualized 0.02% 0.04% 0.02% 0.19% 0.10%
Total Nonperforming Loans
to Total Loans 0.76 0.70 0.66 0.65 0.74
Total Nonperforming Assets
to Total Loans and Other
Real Estate Owned 0.86 0.80 0.80 0.80 0.91
Allowance for Loan Losses
to Total Loans 1.71 1.71 1.59 1.55 1.57
Allowance for Loan Losses
to Nonperforming Loans 227 244 242 237 212
<PAGE>
INCOME STATEMENT COMPONENTS AS A PERCENT OF AVERAGE TOTAL ASSETS
________________________________________________________________
The following table presents a summarized view of each of the major elements of
the consolidated income statement for the comparative quarters. Each of the
elements is stated as a percent of the average total assets for the respective
quarter and, where appropriate, is converted to a fully taxable basis.
ROA
1994 1993 IMPACT
______ ______ ______
Interest Income 6.74% 6.61% 0.13%
Interest Expense (2.67) (2.56) (0.11)
______ ______ ______
Net Interest Income 4.07 4.05 0.02
Provision for
Loan Losses (0.12) (0.14) 0.02
Net Securities Gains 0.01 0.05 (0.04)
Other Income 2.89 3.04 (0.15)
Other Expense (4.52) (4.68) 0.16
______ ______ ______
Income Before
Income Taxes 2.33 2.32 0.01
Income Taxes (0.91) (0.92) 0.01
______ ______ ______
Return on Assets (ROA)
Before Net Extraordinary
Credit 1.42% 1.40% 0.02%
====== ====== ======
NET INTEREST INCOME
___________________
Net interest income in the third quarter of 1994 was $126.2 million compared to
$119.7 million for the same period one year ago, an increase of $6.5 million or
5.4%. This compares to net interest income of $120.7 million reported in the
second quarter of 1994 and $117.5 million for the first quarter of the year.
The benefit of the increase in the average volume of and yield on earning
assets, together with a slight decline in the cost of interest-bearing deposits
was partially offset by the increased volume of higher cost short-term and long-
term borrowings fueled in part by the slow growth in deposits.
In the third quarter of 1994, average earning assets increased $484.8 million
or 4.4% compared to the same period one year ago. Average loan growth of $602.1
million or 7.3% was offset, in part, by a decline in average securities of
$117.3 million.
The growth and composition of the Corporation's quarterly average loan portfolio
for the current quarter and previous four quarters are reflected below (amounts
in millions):
<PAGE>
1994 1993
_____________________________________________________
Annual
Third Second First Fourth Third Growth
Quarter Quarter Quarter Quarter Quarter PCT
_____________________________________________________
Commercial Loans $ 2,740 $ 2,715 $ 2,616 $ 2,558 $ 2,566 6.8%
Real Estate Loans
Construction 343 321 331 321 282 22.0
Commercial
Mortgages 2,066 2,031 2,016 1,939 1,865 10.8
Residential
Mortgages 2,219 2,149 2,147 2,190 2,152 3.1
_______ _______ _______ _______ ____________
Total Real
Estate Loans 4,628 4,501 4,494 4,450 4,299 7.7
Personal Loans
Personal Loans 946 952 948 953 914 3.5
Student Loans 265 259 256 228 206 28.4
_______ _______ _______ _______ ____________
Total Personal
Loans 1,211 1,211 1,204 1,181 1,120 8.1
Lease Financing
Receivables 258 257 255 255 250 3.2
_______ _______ _______ _______ ____________
Total Consolidated
Average Loans $ 8,837 $ 8,684 $ 8,569 $ 8,444 $ 8,235 7.3%
======= ======= ======= ======= ============
<PAGE>
The composition of the Corporation's quarterly average deposits for the current
quarter and prior year's quarters are as follows (amounts in millions):
1994 1993
_______________________________________________________
Annual
Third Second First Fourth Third Growth
Quarter Quarter Quarter Quarter Quarter PCT
______________________________________________________
Noninterest
Bearing
Commercial $ 1,298 $ 1,271 $ 1,270 $ 1,352 $ 1,270 2.2%
Personal 432 444 426 424 405 6.7
Other 305 322 345 395 360 (15.3)
_______ _______ _______ _______ _____________
Total Noninterest
Bearing Deposits 2,035 2,037 2,041 2,171 2,035 --
Interest Bearing
Savings & NOW 2,484 2,477 2,455 2,454 2,377 4.4
Money Market 1,495 1,481 1,523 1,574 1,534 (2.5)
Other CDs & Time
Deposits 3,227 3,233 3,313 3,369 3,422 (5.7)
CDs Greater than
$100 444 481 478 480 419 5.8
_______ _______ _______ _______ _____________
Total Interest
Bearing Deposits 7,650 7,672 7,769 7,877 7,752 (1.3)
_______ _______ _______ _______ _____________
Total Consolidated
Average Deposits$ 9,685 $ 9,709 $ 9,810 $10,048 $ 9,787 (1.0%)
======= ======= ======= ======= ======= ======
The yield on average earning assets increased 11 basis points while the cost of
interest-bearing deposits decreased 3 basis points in the third quarter of 1994
compared to the same period last year. This benefit was partially offset by an
increase in short-term borrowing costs of 158 basis points. During the second
quarter of 1994, the Corporation's banking subsidiaries began offering Bank
Notes. The Bank Notes provide an additional funding source along with those
traditionally available to our banking affiliates. During the third quarter our
banking affiliates issued $124 million of Bank notes and as of September 30,
1994 the total outstanding amounted to $264 million. These notes were issued
for a two-year term and have floating interest rates. Management has also
developed new products such as a money market index account to attract new
deposits and has put into place a nationally marketed brokered CD program. The
lack of deposit growth to fund earning asset growth in the future may continue
to put pressure on the margins.
At September 30, 1994, the Corporation prepaid $23 million of long-term debt
that was due to mature in December, 1994 and $30 million due in December, 1995.
A prepayment premium of $1.5 million was paid. The debt was refinanced with
lower rate medium-term notes. This refinancing will have a positive impact on
the margin in the future.
In April, 1993 the Corporation's Board of Directors approved a common share
repurchase program which allowed for the buy back of 9 million common shares.
Since the announcement, the Corporation has cumulatively repurchased 8.3 million
common shares at an aggregate cost of approximately $186 million through
September 30, 1994. The estimated impact of the program in the third quarter
of 1994 compared to the same period last year was to increase interest expense
by approximately $1.3 million.
<PAGE>
At the present time, the Corporation is not involved in any significant or
complex derivative product arrangements.
Yield & Cost Analysis 1994 1993
($000's) _________________________________________________________
Average Average
Average Yield or Average Yield or
Balance Interest Cost Balance Interest Cost
_________________________________________________________
Loans $ 8,837,141 $175,864 7.90% $ 8,235,073 $161,626 7.79%
Investment
Securities:
Taxable 2,082,981 28,689 5.46 2,214,332 30,056 5.39
Tax Exempt 350,436 5,948 6.73 395,816 7,987 8.01
Other Short-term
Investments 223,465 2,397 4.26 164,032 1,296 3.13
____________________ _____ ____________________ _____
Total Interest
Earning Assets $11,494,023 $212,898 7.35% $11,009,253 $200,965 7.24%
==================== ===== ==================== =====
Money Market
Savings $ 1,495,494 $ 10,597 2.81% $ 1,533,690 $ 9,525 2.46%
Regular Savings
& NOW 2,484,315 11,708 1.87 2,377,475 13,613 2.27
Other CDs & Time
Deposits 3,226,718 38,006 4.67 3,421,799 39,294 4.56
CD's Greater than
$100 443,825 4,985 4.46 419,331 4,474 4.23
____________________ _____ ____________________ _____
Total Interest
Bearing Deposits 7,650,352 65,296 3.39 7,752,295 66,906 3.42
Short-term
Borrowings 998,573 10,981 4.36 614,250 4,306 2.78
Long-term
Borrowings 491,488 8,038 6.49 308,070 6,522 8.40
____________________ _____ ____________________ _____
Total Interest Bearing
Liabilities $ 9,140,413 $ 84,315 3.66% $ 8,674,615 $77,734 3.56%
==================== ===== ==================== =====
Net Interest Margin
(FTE) as a Percent
of Average Earning
Assets $128,583 4.44% $123,231 4.44%
======== ===== ======== =====
OTHER INCOME
____________
Total other income was $91.4 million for the third quarter of 1994, a decline of
$2.7 million or 2.9% when compared to $94.1 million earned in the third quarter
of 1993. Fees from data processing services grew $5.2 million or 14.9% and
amounted to $40.0 million this quarter compared to $34.8 million for the same
period last year. This increase was due primarily to processing revenue. Lower
security gains realized in the third quarter of 1994 compared to the same period
last year resulted in a decline of $1.4 million.
Trust fees declined $.3 million or 2.3% due to lack of continued growth. Fees
from other customer services declined 5.3% or $1.6 million primarily due to a
decrease in service charges on deposit accounts. Other income decreased $4.5
million or 40.1% this quarter compared to the same quarter last year. The
decline in revenue from the origination and sale of mortgage loans to the
secondary market continues to account for the majority of the decrease.
<PAGE>
OTHER EXPENSE
_____________
Total other expense for the third quarter of 1994 remained relatively unchanged
from the same period a year ago. A majority of the expense categories reflected
a decrease or a modest increase when compared to the third quarter of 1993. As
noted in the prior quarter, a restructuring/merger charge related to the Valley
merger was recorded. This $76.6 million charge reflected the costs associated
with a reduction in work force, the write off of duplicate computer and software
costs and other one-time costs. The decline in salaries and benefits expense,
equipment and professional services expense reflects the cost savings achieved
through the merger. Processing charges and supplies expense were not
significantly affected by the merger. The other miscellaneous expense category
is affected by the capitalization of costs, net of amortization, associated with
software development and data processing conversions. During the third quarter
of 1994, the amount of cost capitalized, net of amortization, was greater than
the amount recorded in the third quarter of 1993 by approximately $.4 million.
As noted in prior discussions, M&I Data Services, the Corporation's data
processing subsidiary (DSI) has been a large contributor to the Corporation's
overall expense growth. As part of the Valley merger, Valley's data processing
and operations subsidiary, which performed data processing and operational
functions for their affiliated companies only, was merged into DSI. While DSI
continues to grow and expand, the merger efficiencies have resulted in DSI's
expenses remaining relatively unchanged for the third quarter of 1994 when
compared to the same period one year ago.
While no assurances can be made, the estimated annual Corporate cost savings to
be achieved by the combined companies budgeted in 1995 is estimated to be
approximately $36 million. Management estimates at this time that approximately
40% of the annual cost savings will be achieved in 1994.
INCOME TAXES
____________
The income tax provision for the three months ended September 30, 1994 amounted
to $26.4 million compared to $24.3 million for the three months ended September
30, 1993. The effective tax rate remained relatively unchanged.
NINE MONTHS ENDED SEPTEMBER 30, 1994 AND 1993
_____________________________________________
For the nine months ended September 30, 1994 the Corporation recorded net income
of $47.5 million compared to $127.9 million for the nine months ended September
30, 1993. Fully diluted net income per share amounted to $.47 compared to $1.19
for the prior year. Net income for the nine months ended September 30, 1994
would have been $122.5 million and fully diluted net income per share would have
amounted to $1.18 per share had the $76.1 million of unusual charges not been
recorded in the second quarter of 1994 and the net extraordinary credit of $1.1
million reported in the third quarter of 1994 not been realized. The decline in
operating earnings was due to lower realized net securities gains and higher net
noninterest expenses.
<PAGE>
The following table summarizes the unusual items reported in the second quarter
of 1994.
After-Tax
Charge
_____________
Recognition of $76.6 million
merger/restructuring charge $59.5 million
Additional loan loss
provisions of $8.9 million 5.8 million
Security losses of $7.3 million 4.6 million
Other miscellaneous charges
of $8.5 million 6.2 million
_____________
$76.1 million
=============
The table below summarizes the merger/restructuring charge recorded at June 30,
1994 (amounts in millions):
MERGER/RESTRUCTURING CHARGES
Executive Contracts $26.4
Employee Severance Costs 14.9
Computer and Software 12.7
System Conversion Costs 2.9
Facilities and Equipment 4.2
Investment Advisors 3.4
Accounting, Legal and
Other Professional Fees 3.9
Other 8.2
______
$76.6
======
The executive contract accrual of $26.4 million represents the present value of
the amounts due to certain Valley executives under their former employment
contracts. As of September 30, 1994, $10.3 million had been paid and the
remaining liability is expected to be paid beginning in 1997.
As part of the on-going merger and restructuring, the Corporation anticipates a
reduction in its work force. As of June 30, the Corporation accrued the
severance costs for all employees who have been formally notified of job loss
and the costs associated with other identified employees who have not been
notified. The severance policy, which has been distributed to all employees,
generally provides for a minimum of 2 weeks of severance payments up to a
maximum of 52 weeks depending upon years of service and job classification with
certain adjustments if subsequent employment is found during the severance
period.
The computer and software charge represents the write-off of Valley's
capitalized costs associated with its own internal data processing function.
The systems conversion cost estimate of $2.9 million is the cost associated
with the one time conversion and standardization of Valley's records to M&I's
data processing systems.
<PAGE>
As part of the merger, duplicative branch offices and other corporate facilities
will be sold or leases terminated. In addition, certain excess furniture and
equipment will also be disposed of. The estimated loss on lease terminations
and equipment disposals amounted to $4.2 million. The estimated net gain on
sale of excess facilities, which is not considered to be significant, will be
recorded when realized.
Investment advisor, accounting, legal and other professional fees present
amounts incurred to consummate the mergers.
Other miscellaneous charges amounted to $8.2 million and included a $3.2 million
charge associated with the curtailment of Valley's defined benefit pension plan
at May 31, 1994. Beginning in June, 1994 former Valley employees became
eligible to participate in M&I's defined contribution pension plan. Also
included were costs to eliminate duplicate customer accounts, unusable
capitalized inventory costs and write-offs of other costs not deemed to be
realizable due to the merger.
As part of the approval of the merger, certain branch divestitures were required
by the regulatory agencies. These required branch divestitures with deposits of
approximately $250 million along with the resulting approximate net gain of $24
million, will be recorded when realized. It is not anticipated that these sales
will have a material impact on the financial condition of the company.
The Corporation also increased the loan loss provision at several former Valley
banks in order to raise their reserve levels to be more in line with the M&I
Banks. The additional provision of $8.9 million increased Valley's allowance
for loan loss to nonperforming loan ratio from 164% to 195% at June 30. It is
not anticipated that this one-time increase in provision levels will result in
lower provision levels in the future.
Security losses of $7.3 million were realized in the second quarter of 1994 to
reposition our balance sheet in light of current interest rates. Approximately
$568 million of securities with a remaining average maturity of one year were
sold. The proceeds were reinvested in higher yielding securities with an
average maturity of less than two years. The securities sold were classified
as available for sale, therefore, the resulting realized loss has no impact on
shareholders' equity.
Other miscellaneous charges included a goodwill asset adjustment of $2.7
million, other real estate write-downs of $1.8 million and other accrual
related adjustments such as professional fees not resulting from the
merger/restructuring.
CAPITAL RESOURCES
_________________
During the third quarter, the Board of Directors approved an increase in the
number of common shares that can be repurchased for the common share buy back
program originally announced in 1993. The number of shares authorized increased
from 9 million to 15.1 million. The cost of the common shares to be purchased
in 1995 is expected to be funded primarily through operations.
Shareholders' equity to total assets was 8.32% at September 30, 1994. The
Corporation continues to have a strong capital base and its regulatory capital
ratios remain significantly above the defined minimum regulatory ratios as shown
in the following tables as of September 30, 1994.
<PAGE>
RISK-BASED CAPITAL RATIOS
($ in thousands)
Amount Ratio
__________ ______
Tier 1 capital $1,024,010 10.83%
Tier 1 capital
minimum requirement 378,062 4.00
__________ ______
Excess $ 645,948 6.83%
========== ======
Total capital $1,262,809 13.36%
Total capital
minimum requirement 756,125 8.00
__________ ______
Excess $ 506,684 5.36%
========== ======
Risk-adjusted assets $9,451,561
LEVERAGE RATIO
($ in millions)
Amount Ratio
___________________ ____________
Tier 1 capital to
adjusted total assets $ 1,024,010 8.20%
Minimum leverage
requirement (1) 374,660 - 624,433 3.00 - 5.00
___________________ ____________
Excess $ 649,350 - 399,577 5.20 - 3.20%
=================== ============
Adjusted average total assets $12,488,654
(1) The 3% Ratio Shown is effective for banking organizations which have
received the top bank rating from their principal federal banking
regulator. Organizations receiving lower ratings are required to meet
a higher minimum Leverage Ratio of between 4% and 5%.
<PAGE>
PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
____________________________________________________________
A. The Corporation held its Annual Meeting of Shareholders on August 23,
1994.
B. Votes cast for items presented for consideration and approval are as
follows:
1) To approve the Marshall & Ilsley Corporation 1994 Long-Term
Incentive Plan.
For 72,889,061
Against 6,217,333
Abstain 2,734,695
Withheld 0
Broker Non-Vote 0
2) To elect seven Directors to serve until the 1997 Annual Meeting of
Shareholders.
For Withheld
Richard A. Abdoo 80,616,925 1,224,164
Wendell F. Bueche 80,724,434 1,116,655
G. H. Gunnlaugsson 80,704,033 1,137,056
Peter M. Platten III 79,789,954 2,051,135
J. B. Wigdale 80,721,043 1,120,046
James O. Wright 80,581,008 1,260,081
Jack F. Kellner 80,465,761 1,375,328
There were no votes against, abstentions, or broker non-votes for
any of the individual Candidates.
The continuing directors of the Corporation are:
Mr. Chait Mr. Francke
Mr. Kuester Mr. Zuehlke
Mr. Bolduc Mr. Puelicher
Mr. Kress Mr. Tisdale
Mr. Meyer, Jr. Mr. Boldt
Mr. O'Hare Mr. Jacobs
Mr. Orr
Item 6 - Exhibits and Reports on Form 8-K
_________________________________________
A. Exhibits
Exhibit 11 - Statements - Computation of Earnings Per Share
Exhibit 12 - Computation of Ratio of Earnings to Fixed Charges
Exhibit 27 - Financial Data Schedule
B. Reports on Form 8-K
The Corporation filed the 1993 restated Consolidated Financial Statements
reflecting the merger with Valley Bancorporation on Form 8-K, filed
September 27, 1994.
<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.
MARSHALL & ILSLEY CORPORATION
(Registrant)
/s/ P. R. Justiliano
____________________________________
P. R. Justiliano
Senior Vice President and
Corporate Controller
(Chief Accounting Officer)
/s/ J. E. Sandy
___________________________________
J. E. Sandy
Vice President
November 14, 1994
<PAGE>
MARSHALL & ILSLEY CORPORATION EXHIBIT 11
CALCULATION OF EARNINGS PER SHARE
($000's except per share data)
Three Months Ended September 30
-------------------------------
PRIMARY 1994 1993
- ------- ------------ ------------
Earnings:
Income before extraordinary items $44,892 $42,535
Extraordinary items 1,123 -
------------ ------------
Net income $46,015 $42,535
============ ============
Shares:
Weighted average number of common shares
outstanding 94,923 98,279
Additional shares relating to:
Convertible preferred stock 3,833 1,963
Stock options outstanding (a) 1,401 1,886
Stock options exercised (c) 35 -
------------ ------------
Total average primary shares outstanding 100,192 102,128
============ ============
PRIMARY EARNINGS PER SHARE:
Income before extraordinary items $0.45 $0.42
Extraordinary items 0.01 -
------------ ------------
Net income $0.46 $0.42
============ ============
FULLY DILUTED
- -------------
Earnings:
Income before extraordinary items $44,892 $42,535
Add: Interest on convertible notes,
net of income tax effect 465 697
------------ ------------
Earnings before extraordinary items, as adjusted 45,357 43,232
Extraordinary items 1,123 -
------------ ------------
Total earnings as adjusted $46,480 $43,232
============ ============
Shares:
Weighted average number of common shares
outstanding 94,923 98,279
Additional shares relating to:
Convertible preferred stock 3,833 1,963
Stock options outstanding (b) 1,401 2,146
Stock options exercised (c) 35 -
Assumed conversion of convertible notes 3,845 5,794
------------ ------------
Total average fully diluted shares outstanding 104,037 108,182
============ ============
FULLY DILUTED EARNINGS PER SHARE:
Income before extraordinary items $0.44 $0.40
Extraordinary items 0.01 -
------------ ------------
Net income $0.45 $0.40
============ ============
Notes:
- ------
(a) Based on the treasury stock method using average market price.
(b) Based on the treasury stock method using period-end market price or
average market price, whichever is higher.
(c) Based on the treasury stock method using market price at date of exercise.
<PAGE>
MARSHALL & ILSLEY CORPORATION EXHIBIT 11
CALCULATION OF EARNINGS PER SHARE
($000's except per share data)
Nine Months Ended September 30
------------------------------
PRIMARY 1994 1993
- ------- ------------ ------------
Earnings:
Income before extraordinary items $46,344 $127,881
Extraordinary items 1,123 -
------------ ------------
Net income $47,467 $127,881
============ ============
Shares:
Weighted average number of common shares
outstanding 95,485 98,953
Additional shares relating to:
Convertible preferred stock 2,847 1,963
Stock options outstanding (a) 1,421 2,001
Stock options exercised (c) 118 -
------------ ------------
Total average primary shares outstanding 99,871 102,917
============ ============
PRIMARY EARNINGS PER SHARE:
Income before extraordinary items $0.46 $1.24
Extraordinary items 0.01 -
------------ ------------
Net income $0.47 $1.24
============ ============
FULLY DILUTED
- -------------
Earnings:
Income before extraordinary items $46,344 $127,881
Add: Interest on convertible notes,
net of income tax effect 1,582 2,099
------------ ------------
Earnings before extraordinary items, as adjusted 47,926 129,980
Extraordinary items 1,123 -
------------ ------------
Total earnings as adjusted $49,049 $129,980
============ ============
Shares:
Weighted average number of common shares
outstanding 95,485 98,953
Additional shares relating to:
Convertible preferred stock 2,847 1,963
Stock options outstanding (b) 1,441 2,472
Stock options exercised (c) 118 -
Assumed conversion of convertible notes 4,830 5,832
------------ ------------
Total average fully diluted shares outstanding 104,721 109,220
============ ============
FULLY DILUTED EARNINGS PER SHARE:
Income before extraordinary items $0.46 $1.19
Extraordinary items 0.01 -
------------ ------------
Net income $0.47 $1.19
============ ============
Notes:
- ------
(a) Based on the treasury stock method using average market price.
(b) Based on the treasury stock method using period-end market price or
average market price, whichever is higher.
(c) Based on the treasury stock method using market price at date of exercise.
<PAGE>
EXHIBIT 12
MARSHALL & ILSLEY CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
($OOO's)
9 Months
Sept 30
EARNINGS 1994 1993 1992 1991 1990 1989
--------- --------- --------- --------- --------- ---------
Earnings before
income taxes,
extraordinary
items and
cumulative effect
of changes in
principles $91,713 $264,584 $231,792 $186,738 $143,192 $161,140
Fixed charges,
excluding interest
on deposits 53,175 47,905 50,687 66,641 85,234 102,398
--------- --------- --------- --------- --------- ---------
Earnings including
fixed charges but
excluding interest
on deposits 144,888 312,489 282,479 253,379 228,426 263,538
Interest on deposits 188,602 272,100 334,443 448,757 466,537 426,008
--------- --------- --------- --------- --------- ---------
Earnings including
fixed charges and
interest on
deposits $333,490 $584,589 $616,922 $702,136 $694,963 $689,546
========= ========= ========= ========= ========= =========
FIXED CHARGES:
Interest Expense:
Borrowings:
Short-term $27,972 $18,010 $17,606 $32,065 $56,849 $74,831
Long-term 19,998 23,088 26,439 27,770 22,524 22,057
One-third of rental
expense for all
operating leases
(the amount deemed
representative of
the interest factor) 5,205 6,807 6,642 6,806 5,861 5,510
--------- --------- --------- --------- --------- ---------
Fixed charges
excluding interest
on deposits 53,175 47,905 50,687 66,641 85,234 102,398
Interest on Deposits 188,602 272,100 334,443 448,757 466,537 426,008
--------- --------- --------- --------- --------- ---------
Fixed charges
including interest
on deposits $241,777 $320,005 $385,130 $515,398 $551,771 $528,406
========= ========= ========= ========= ========= =========
RATIO OF EARNINGS TO FIXED CHARGES
Excluding interest
on deposits 2.72 x 6.52 x 5.57 x 3.80 x 2.68 x 2.57 x
Including interest
on deposits 1.38 x 1.83 x 1.60 x 1.36 x 1.26 x 1.30 x
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 600,896
<INT-BEARING-DEPOSITS> 7,522,848
<FED-FUNDS-SOLD> 164,961
<TRADING-ASSETS> 4,629
<INVESTMENTS-HELD-FOR-SALE> 2,035,786
<INVESTMENTS-CARRYING> 410,340
<INVESTMENTS-MARKET> 409,498
<LOANS> 8,910,135
<ALLOWANCE> 152,470
<TOTAL-ASSETS> 12,673,492
<DEPOSITS> 9,624,598
<SHORT-TERM> 1,192,649
<LIABILITIES-OTHER> 282,684
<LONG-TERM> 519,602
0
349
<COMMON> 99,494
<OTHER-SE> 954,116
<TOTAL-LIABILITIES-AND-EQUITY> 12,673,492
<INTEREST-LOAN> 501,090
<INTEREST-INVEST> 94,344
<INTEREST-OTHER> 5,549
<INTEREST-TOTAL> 600,983
<INTEREST-DEPOSIT> 188,602
<INTEREST-EXPENSE> 236,572
<INTEREST-INCOME-NET> 364,411
<LOAN-LOSSES> 20,608
<SECURITIES-GAINS> (6,443)
<EXPENSE-OTHER> 520,151
<INCOME-PRETAX> 91,713
<INCOME-PRE-EXTRAORDINARY> 46,344
<EXTRAORDINARY> 1,123
<CHANGES> 0
<NET-INCOME> 47,467
<EPS-PRIMARY> 0.47
<EPS-DILUTED> 0.47
<YIELD-ACTUAL> 4.36
<LOANS-NON> 53,987
<LOANS-PAST> 8,551
<LOANS-TROUBLED> 4,748
<LOANS-PROBLEM> 67,286
<ALLOWANCE-OPEN> 133,600
<CHARGE-OFFS> 7,823
<RECOVERIES> 6,085
<ALLOWANCE-CLOSE> 152,470
<ALLOWANCE-DOMESTIC> 152,470
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
