<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 June 30, 1995
---------------------------------------------
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 July 31, 1995
----- ----------------
Common Stock, $1.00 Par Value 94,018,135
<PAGE>
PART 1 - FINANCIAL INFORMATION
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
($000's except share data)
June 30 December 31 June 30
Assets 1995 1994 1994
------ ------------ -------------- ----------
Cash and cash equivalents:
Cash and due from banks $630,157 $685,919 $728,451
Federal funds sold and
security resale agreements 43,250 205,248 61,208
Money market funds 122,494 76,724 106,675
------------ ------------ ------------
Total cash and cash equivalents 795,901 967,891 896,334
Trading securities 13,946 20,361 2,303
Other short-term investments 37,735 43,519 32,619
Investment securities held to maturity,
market value $453,617 ($419,521 December
31, and $389,441 June 30, 1994) 451,079 429,456 389,342
Investment securities available for sale at
market value 1,845,273 1,865,147 2,016,777
------------ ------------ ------------
Total investment securities 2,296,352 2,294,603 2,406,119
Loans 9,174,548 8,792,492 8,746,851
Less: Allowance for loan losses 160,565 153,961 149,371
------------ ------------ ------------
Net loans 9,013,983 8,638,531 8,597,480
Premises and equipment, net 291,396 286,435 287,827
Accrued interest and other assets 349,659 361,609 289,983
------------ ------------ ------------
Total Assets $12,798,972 $12,612,949 $12,512,665
============ ============ ============
Liabilities and Shareholders' Equity
------------------------------------
Deposits:
Noninterest bearing $2,062,817 $2,199,016 $2,063,092
Interest bearing 7,564,044 7,300,064 7,570,335
------------ ------------ ------------
Total deposits 9,626,861 9,499,080 9,633,427
Funds purchased and security
repurchase agreements 803,066 944,843 1,011,509
Other short-term borrowings 279,702 166,299 164,954
Long-term borrowings 642,413 653,777 383,562
Accrued expenses and other liabilities 279,890 287,654 251,524
------------ ------------ ------------
Total liabilities 11,631,932 11,551,653 11,444,976
Shareholders' equity:
Series A convertible preferred stock,
$1.00 par value; 348,944 shares issued 349 349 349
Common stock, $1.00 par value; 99,494,335
shares issued (99,494,335 December 31,
and 99,497,416 June 30, 1994) 99,494 99,494 99,497
Additional paid-in capital 188,136 194,697 200,295
Retained earnings 1,007,105 945,469 870,338
Less: Treasury common stock, at cost;
6,457,394 shares (6,964,920 December 31,
and 4,254,535 June 30, 1994) 134,037 143,438 88,224
Deferred compensation 1,132 1,203 1,511
Net unrealized gains (losses) on securities
available for sale, net of related taxes 7,125 (34,072) (13,055)
------------ ------------ ------------
Total shareholders' equity 1,167,040 1,061,296 1,067,689
------------ ------------ ------------
Total Liabilities and
Shareholders' Equity $12,798,972 $12,612,949 $12,512,665
============ ============ ============
See notes to financial statements.
<PAGE>
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
($000's except per share data)
Three Months Ended June 30,
-----------------------------
1995 1994
Interest income: ------------ ------------
Loans $195,406 $165,668
Investment securities:
Taxable 28,065 26,653
Exempt from Federal income taxes 4,135 4,384
Trading securities 165 42
Short-term investments 3,021 1,792
------------ ------------
Total interest income 230,792 198,539
Interest expense:
Deposits 82,044 61,710
Short-term borrowings 12,717 10,138
Long-term borrowings 13,748 5,980
------------ ------------
Total interest expense 108,509 77,828
------------ ------------
Net interest income 122,283 120,711
Provision for loan losses 4,005 13,001
------------ ------------
Net interest income after provision for loan losses 118,278 107,710
Other income:
Data processing services 52,337 38,612
Trust services 16,058 14,564
Other customer services 26,078 29,949
Net securities losses (51) (7,470)
Other 7,821 7,959
------------ ------------
Total other income 102,243 83,614
Other expense:
Salaries and employee benefits 83,948 82,400
Net occupancy 8,787 9,291
Equipment 16,157 15,150
Payments to regulatory agencies 5,560 5,896
Processing charges 4,361 4,549
Supplies and printing 3,965 3,260
Professional services 4,713 3,729
Merger / Restructuring - 76,562
Other 21,996 30,123
------------ ------------
Total other expense 149,487 230,960
------------ ------------
Income (loss) before income taxes 71,034 (39,636)
Provision (benefit) for income taxes 24,797 (2,575)
------------ ------------
Net income (loss) $46,237 ($37,061)
============ ============
Net income (loss) per common share:
Primary $0.47 ($0.39)
Fully Diluted $0.46 ($0.39)
Dividends paid per common share $0.165 $0.150
Weighted average common shares outstanding:
Primary 98,315 95,480
Fully diluted 102,276 95,480
See notes to financial statements
<PAGE>
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
($000's except per share data)
Six Months Ended June 30,
-----------------------------
1995 1994
Interest income: ------------ ------------
Loans $381,069 $325,739
Investment securities:
Taxable 56,336 53,106
Exempt from Federal income taxes 8,201 8,498
Trading securities 290 86
Short-term investments 6,579 3,074
------------ ------------
Total interest income 452,475 390,503
Interest expense:
Deposits 155,542 123,306
Short-term borrowings 27,524 16,991
Long-term borrowings 26,182 11,960
------------ ------------
Total interest expense 209,248 152,257
------------ ------------
Net interest income 243,227 238,246
Provision for loan losses 7,988 16,953
------------ ------------
Net interest income after provision for loan losses 235,239 221,293
Other income:
Data processing services 100,186 76,211
Trust services 31,265 30,134
Other customer services 53,676 60,049
Net securities losses (33) (6,653)
Other 14,852 16,957
------------ ------------
Total other income 199,946 176,698
Other expense:
Salaries and employee benefits 164,812 166,552
Net occupancy 17,726 19,394
Equipment 31,004 31,019
Payments to regulatory agencies 11,042 11,830
Processing charges 8,854 9,423
Supplies and printing 7,394 6,622
Professional services 8,364 5,791
Merger / Restructuring - 76,562
Other 42,976 50,423
------------ ------------
Total other expense 292,172 377,616
------------ ------------
Income before income taxes 143,013 20,375
Provision for income taxes 50,641 18,923
------------ ------------
Net income $92,372 $1,452
============ ============
Net income per common share:
Primary $0.94 $0.01
Fully Diluted $0.91 $0.01
Dividends paid per common share $0.315 $0.290
Weighted average common shares outstanding:
Primary 98,402 99,707
Fully diluted 102,425 99,724
See notes to financial statements
<PAGE>
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
($000's)
Six Months Ended June 30,
-----------------------------
1995 1994
------------ ------------
Net Cash Provided by Operating Activities $99,369 $181,997
Cash Flows From Investing Activities:
Net decrease in securities with maturities of
three months or less 6,050 18,550
Proceeds from sales of securities available
for sale 103,827 567,963
Proceeds from maturities of longer term
securities 289,390 560,825
Purchases of longer term securities (289,007) (1,005,889)
Net increase in loans (267,799) (237,673)
Purchases of assets to be leased (59,611) (43,531)
Principal payments on lease receivables 68,192 57,347
Fixed asset purchases, net (16,434) (21,795)
Cash of banks acquired, net 11,400
-
Other 7,530 4,726
------------ ------------
Net cash used in investing activities (146,462) (99,477)
------------ ------------
Cash Flows From Financing Activities:
Net decrease in deposits (21,104) (538,209)
Proceeds from issuance of commercial paper 598,826 777,733
Payments for maturity of commercial paper (608,449) (800,562)
Net increase (decrease) in other short-term
borrowings (166,260) 488,149
Proceeds from issuance of long-term debt 207,394 173,330
Payments of long-term debt (78,079) (19,216)
Dividends paid (30,748) (28,227)
Purchases of treasury stock (31,301) (31,045)
Other 4,824 7,227
------------ ------------
Net cash provided by (used in)
financing activities (124,897) 29,180
------------ ------------
Net increase (decrease) in cash and cash
equivalents (171,990) 111,700
Cash and cash equivalents, beginning of year 967,891 784,634
------------ ------------
Cash and cash equivalents, end of period $795,901 $896,334
============ ============
Supplemental cash flow information:
Cash paid during the period for:
Interest $196,429 $148,493
Income taxes 56,172 51,054
See notes to financial statements
<PAGE>
MARSHALL & ILSLEY CORPORATION
Notes to Financial Statements
June 30, 1995 & 1994 (Unaudited)
1. The accompanying unaudited consolidated financial statements should be read
in conjunction with Marshall & Ilsley Corporation's ("Corporation") 1994
Annual Report on Form 10-K. 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 six months
ended June 30, 1995 and 1994. The results of operations for the three months
and six months ended June 30, 1995 and 1994 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 as Series A
convertible, with a $100 value per share for conversion and liquidation
purposes.
The Corporation has 160,000,000 shares of its $1.00 par value common stock
authorized.
3. The Corporation's loan portfolio consists of the following ($000's):
June 30 December 31 June 30
1995 1994 1994
------------ ------------ ------------
Commercial financial & agricultural $2,875,578 $2,676,724 $2,714,224
Real estate:
Construction 335,270 378,316 323,324
Residential Mortgage 2,384,246 2,240,287 2,197,178
Commercial Mortgage 2,153,805 2,062,022 2,041,005
------------ ------------ ------------
Total real estate 4,873,321 4,680,625 4,561,507
Personal 1,163,407 1,178,453 1,213,537
Lease financing 262,242 256,690 257,583
------------ ------------ ------------
$9,174,548 $8,792,492 $8,746,851
============ ============ ============
4. 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 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, by type, held by the Corporation are as follows
($000's):
June 30 December 31 June 30
1995 1994 1994
------------ ------------ ------------
Investment securities held to maturity:
U.S. treasury and
government agencies $134,332 $134,080 $61,320
State and political subdivisions 312,384 290,483 323,131
Other 4,363 4,893 4,891
------------ ------------ ------------
Investment securities held to maturity 451,079 429,456 389,342
------------ ------------ ------------
Investment securities available for sale:
U.S. treasury and
government agencies 1,748,042 1,772,883 1,921,242
Other 97,231 92,264 95,535
------------ ------------ ------------
Investment securities
available for sale 1,845,273 1,865,147 2,016,777
------------ ------------ ------------
Total Investment Securities $2,296,352 $2,294,603 $2,406,119
============ ============ ============
<PAGE>
MARSHALL & ILSLEY CORPORATION
Notes to Financial Statements - Continued
June 30, 1995 & 1994 (Unaudited)
5. Effective January 1, 1995, the Corporation adopted Statements of Financial
Accounting Standards No. 114, "Accounting by Creditors for Impairment of a
Loan" and No. 118, " Accounting by Creditors for Impairment of a Loan -
Income Recognition and Disclosures" (collectively SFAS 114). SFAS 114
requires that certain impaired loans be measured based on the present
value of expected future cash flows discounted at the loans effective
interest rate. As a practical matter, impairment may be measured based on
the loan's observable market price or the fair value of the collateral for
loans which are collateral dependent. When the measure of the impaired loan
is less than the recorded investment in the loan, the impairment is
recorded through a valuation allowance.
Prior to 1995, the allowance for loan losses attributable to impaired loans
was based on undiscounted cash flows without considering interest or the
fair value of the collateral for collateral dependent loans. As a result of
these new standards, no additional allowance for loan losses was required
as of January 1, 1995.
At June 30, 1995 the Corporation's recorded investment in impaired loans and
the related valuation allowance are as follows ($ in thousands):
Recorded Valuation
Investment Allowance
------------ ------------
Total Impaired Loans and Leases
(Nonaccrual and Renegotiated) $51,783
Loans and Leases Excluded from
Evaluation under SFAS 114 (19,788)
------------
Impaired Loans Evaluated $31,995
============
Valuation Allowance Required $5,019 $1,612
No Valuation Allowance Required 26,976
------------ ------------
Impaired Loans Evaluated $31,995 $1,612
============ ============
The recorded investment in impaired loans for which no allowance is required
is net of previous direct writedowns and applications of cash interest
payments against the loan balance outstanding. The required valuation
allowance is included in the allowance for loan losses in the consolidated
balance sheet at June 30, 1995.
The average recorded investment in total impaired loans and leases for the
six months ended June 30, 1995 was $49,833.
Interest payments received on impaired loans and leases are recorded as
interest income unless collection of the remaining recorded investment is
doubtful at which time payments received are recorded as reductions of
principal. For the six months ended June 30, 1995 interest income recognized
on total impaired loans amounted to $1,423. The gross income that would have
been recognized had such loans and leases been performing in accordance with
their original terms would have been $4,962 for the same period.
The activity in the allowance for loan losses for the six months ended
June 30, 1995 and 1994 is presented below ($ in thousands):
1995 1994
------------ ------------
Balance at beginning of year $153,961 $133,600
Allowance of Bank Acquired 1,747 -
Provision for Loan Losses 7,988 16,953
Charge-offs (5,773) (5,830)
Recoveries 2,642 4,648
------------ ------------
Balance at June 30, $160,565 $149,371
============ ============
<PAGE>
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)
($000's)
Three Months Ended June 30,
-----------------------------
1995 1994
------------ ------------
Assets
------
Cash and due from banks $565,458 $616,759
Short-term investments 209,041 184,303
Trading securities 13,821 3,814
Investment securities:
Taxable 1,927,107 2,131,093
Tax-exempt 334,911 358,442
------------ ------------
Total investment securities 2,262,018 2,489,535
Loans:
Commercial 2,828,144 2,715,109
Real estate 4,811,227 4,500,855
Personal 1,158,117 1,211,482
Lease financing 259,581 256,655
------------ ------------
9,057,069 8,684,101
Less: Allowance for loan losses 159,181 139,989
------------ ------------
Total loans 8,897,888 8,544,112
Premises and equipment, net 294,411 290,743
Accrued interest and other assets 340,767 297,445
------------ ------------
Total Assets $12,583,404 $12,426,711
============ ============
Liabilities and Shareholders' Equity
------------------------------------
Deposits:
Noninterest bearing $1,933,437 $2,036,599
Interest bearing 7,523,729 7,672,608
------------ ------------
Total deposits 9,457,166 9,709,207
Funds purchased and security repurchase
agreements 773,713 887,636
Other short-term borrowings 94,767 130,182
Long-term borrowings 814,073 348,715
Accrued expenses and other liabilities 287,261 234,113
------------ ------------
Total liabilities 11,426,980 11,309,853
Shareholders' equity 1,156,424 1,116,858
------------ ------------
Total Liabilities and Shareholders' Equity $12,583,404 $12,426,711
============ ============
<PAGE>
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)
($000's)
Six Months Ended June 30,
-----------------------------
1995 1994
------------ ------------
Assets
------
Cash and due from banks $572,643 $625,045
Short-term investments 223,696 170,034
Trading securities 12,285 3,866
Investment securities:
Taxable 1,947,086 2,172,571
Tax-exempt 332,425 359,591
------------ ------------
Total investment securities 2,279,511 2,532,162
Loans:
Commercial 2,762,796 2,666,138
Real estate 4,771,566 4,497,497
Personal 1,162,021 1,207,613
Lease financing 259,137 255,589
------------ ------------
8,955,520 8,626,837
Less: Allowance for loan losses 157,651 137,905
------------ ------------
Total loans 8,797,869 8,488,932
Premises and equipment, net 292,459 289,809
Accrued interest and other assets 342,446 291,514
------------ ------------
Total Assets $12,520,909 $12,401,362
============ ============
Liabilities and Shareholders' Equity
------------------------------------
Deposits:
Noninterest bearing $1,920,798 $2,038,855
Interest bearing 7,448,551 7,721,772
------------ ------------
Total deposits 9,369,349 9,760,627
Funds purchased and security repurchase
agreements 860,446 844,557
Other short-term borrowings 93,373 121,093
Long-term borrowings 778,351 322,235
Accrued expenses and other liabilities 287,706 226,590
------------ ------------
Total liabilities 11,389,225 11,275,102
Shareholders' equity 1,131,684 1,126,260
------------ ------------
Total Liabilities and Shareholders' Equity $12,520,909 $12,401,362
============ ============
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1995 AND 1994
__________________________________________
Net income for the second quarter of 1995 was $46.2 million compared to a net
loss of $37.1 million for the same period last year. Fully diluted earnings per
share was $.46 for the second quarter of 1995 compared to a net loss per share
of $.39.
As extensively discussed in previous reports, the 1994 second quarter loss was
attributable to the one-time merger/restructuring charge and increase in loan
loss provision associated with the acquisition of Valley Bancorporation
(Valley). In addition, security losses and other miscellaneous charges were
taken in that quarter.
The following table summarizes the unusual items reported in the second quarter
of 1994.
After-Tax Fully Diluted
Charge Per Share Decrease
_____________ __________________
Recognition of $76.6 million
merger/restructuring charge $59.5 million $.62
Additional loan loss
provisions of $8.9 million 5.8 million .06
Securities losses of $7.3 million 4.6 million .05
Other miscellaneous charges
of $8.5 million 6.2 million .07
_____________ ____
$76.1 million $.80
============= ====
Net income for the second quarter of 1994 would have been $39.0 million and
fully diluted earnings per share would have amounted to $.38 per share had the
above charges not been recorded.
The Corporation's return on average assets and return on average equity for the
second quarter of 1995 were 1.47% and 16.04%, respectively. Excluding the above
noted one-time charges recorded in the second quarter of 1994, the return on
average assets and return on average equity were 1.26% and 14.00%, respectively.
The increase in net income is attributable to an increase in net interest
income, higher noninterest revenue and lower operating expense growth due to the
cost savings achieved since the merger with Valley.
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 last five 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.
<PAGE>
The results for 1994 exclude the after-tax merger related charges of $76.1
million in the second quarter and the merger related gains of $1.1 million and
$11.0 million in the third and fourth quarters, respectively.
1995 1994
________________ _________________________
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
________________ _________________________
Interest Income 7.43% 7.29% 6.99% 6.74% 6.48%
Interest Expense (3.46) (3.28) (2.86) (2.67) (2.51)
______ ______ ______ ______ ______
Net Interest Income 3.97 4.01 4.13 4.07 3.97
Provision for Loan Losses (0.13) (0.13) (0.14) (0.12) (0.13)
Net Securities Gains (Losses) 0.00 0.00 0.02 0.01 (0.01)
Other Income 3.26 3.18 2.96 2.89 2.94
Other Expense (4.76) (4.64) (4.51) (4.52) (4.71)
______ _______ ______ ______ ______
Income Before Income Taxes 2.34 2.42 2.46 2.33 2.06
Income Taxes (0.86) (0.92) (0.94) (0.91) (0.80)
______ _______ ______ ______ ______
Return on Average Assets 1.47% 1.50% 1.52% 1.42% 1.26%
====== ====== ====== ====== ======
NET INTEREST INCOME
___________________
Net interest income for the second quarter of 1995 was $122.3 million compared
to $120.7 million for the same period one year ago, an increase of $1.6 million
or 1.3%. The benefit of the increase in rates earned and a slight increase in
the average volume of earning assets, primarily loans, offset the effects of the
increase in the rates paid on interest bearing liabilities and the negative
impact of the change in liability mix.
Average earning assets increased $180.2 million or 1.6% in the second quarter
of 1995 compared to the same period one year ago. Average loan growth of $373
million or 4.3% was offset, in part, by a decline in average other earning
assets (primarily investment securities) of $192.8 million.
Total average interest bearing liabilities increased $167.1 million or 1.85% in
the second quarter of 1995 compared to the same period last year. The
composition of average interest bearing liabilities reflects the liability mix
change that has been discussed in the past. Interest bearing deposits declined
$148.9 million and short-term borrowings declined $149.3 million in the second
quarter of 1995 compared to the same period a year ago. The decline in these
interest bearing liability categories resulted in long-term borrowings
increasing $465.4 million from $348.7 for the second quarter of 1994 to $814.1
million for the current quarter. Noninterest bearing deposit accounts declined
$103.2 million for the same period.
<PAGE>
As part of the 1994 acquisition of Valley, the Corporation completed certain
required branch divestitures along with a number of other branch sales. The
total amount of deposits sold were approximately $300 million and total loan
sales were approximately $200 million. The effect of these divestitures was
somewhat offset by the February 1, 1995 acquisition of the Bank of Burlington,
which was accounted for as a purchase. This bank had total loans of $113
million and total deposits of $149 million at the date of acquisition.
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):
1995 1994
________________ _______________________________
Annual
Second First Fourth Third Second Growth
Quarter Quarter Quarter Quarter Quarter PCT
________________ _______________________________
Commercial Loans $ 2,828 $2,697 $2,643 $ 2,740 $2,715 4.2%
Real Estate Loans
Construction 354 367 385 343 321 10.3
Commercial
Mortgages 2,102 2,072 2,058 2,066 2,031 3.5
Residential
Mortgages 2,355 2,292 2,227 2,219 2,149 9.6
_______ _______ _______ _______ _______ _____
Total Real Estate Loans 4,811 4,731 4,670 4,628 4,501 6.9
Personal Loans
Personal Loans 873 872 901 946 952 (8.4)
Student Loans 285 294 278 265 259 10.2
_______ _______ _______ _______ _______ _____
Total Personal Loans 1,158 1,166 1,179 1,211 1,211 (4.4)
Lease Financing
Receivables 260 259 257 258 257 1.1
_______ _______ _______ _______ ________ ____
Total Consolidated
Average Loans $ 9,057 $8,853 $8,749 $ 8,837 $8,684 4.3%
======= ======= ======= ======= ======= =====
<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):
1995 1994
________________ _______________________________
Annual
Second First Fourth Third Second Growth
Quarter Quarter Quarter Quarter Quarter PCT
________________ _______________________________
Noninterest
Bearing
Commercial $ 1,248 $1,248 $1,363 $ 1,298 $1,271 (1.8)%
Personal 410 400 413 432 444 (7.7)
Other 275 260 318 305 322 (14.4)
_______ _______ _______ ________ _______ _____
Total Noninterest
Bearing Deposits 1,933 1,908 2,094 2,035 2,037 (5.1)
Interest Bearing
Savings & NOW 1,973 2,084 2,290 2,484 2,477 (20.3)
Money Market 1,875 1,767 1,606 1,495 1,481 26.6
Other CDs & Time
Deposits 3,135 3,037 3,135 3,227 3,233 (3.1)
CDs Greater than
$100 541 485 350 444 481 12.5
_______ _______ _______ _______ _______ _____
Total Interest
Bearing Deposits 7,524 7,373 7,381 7,650 7,672 (1.9)
_______ _______ _______ _______ _______ _____
Total Consolidated
Average Deposits $ 9,457 $9,281 $9,475 $ 9,685 $9,709 (2.6)%
======= ======= ======= ======= ======= ======
The yield on average earning assets increased 101 basis points while the cost
of interest-bearing deposits increased 114 basis points in the second quarter
of 1995 compared to the same period last year. During the third quarter of
1994, the Corporation began offering a money market index account to attract new
deposits. For the second quarter of 1995, the average money market index
account amounted to approximately $870 million. Since inception this new
product resulted in approximately $365 million of new deposit growth. The
remaining balances were the result of disintermediation from other M&I deposit
accounts. The average rate paid on this index account amounted to 5.52%
compared to 3.25% for the tier equivalent nonindexed money market account for
the three months ended June 30, 1995. The increase in short-term borrowing
costs of 187 basis points also negatively impacted net interest income. The
average cost of long-term borrowings decreased 11 basis points due, in part, to
the conversion of $16.4 million of 8.5% convertible debt and refinancing of $53
million of Valley senior debt (with an average cost of approximately 9.9%)
during the second and third quarters of 1994, respectively. As previously
stated, the average volume of long-term borrowings increased $465.4 million.
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. For the second
quarter of 1995 average Bank Notes amounted to $423.5 million. These notes were
issued for a two-year term and have floating interest rates.
The possible continuing lack of deposit and earning asset growth, and shift of
deposit mix into the higher cost categories, may continue to put pressure on the
margins.
<PAGE>
At the present time, the Corporation is not involved in derivatives, other than
normal foreign exchange trading.
Yield & Cost Analysis FTE 1995 1994
($000's) ____________________________ _____________________________
Average Average
Average Yield or Average Yield or
Balance Interest Cost Balance Interest Cost
____________________________ _____________________________
Loans $ 9,057,069 $195,922 8.68% $ 8,684,101 $166,215 7.68%
Investment
Securities:
Taxable 1,927,107 28,065 5.84 2,131,093 26,653 5.02
Tax Exempt 334,911 5,859 7.02 358,442 6,144 6.88
Other Short-term
Investments 222,862 3,201 5.76 188,117 1,840 3.92
___________ ________ _____ ____________ _______ _____
Total Interest
Earning Assets $11,541,949 $233,047 8.10% $11,361,753 $200,852 7.09%
=========== ======== ====== =========== ======== =====
Money Market
Savings $ 1,875,016 $ 19,884 4.25% $ 1,480,798 $ 9,265 2.51%
Regular Savings
& NOW 1,973,010 10,757 2.19 2,476,670 12,956 2.10
Other CDs & Time
Deposits 3,134,902 43,511 5.57 3,234,606 34,792 4.31
CD's Greater than
$100 540,801 7,892 5.85 480,534 4,697 3.92
___________ ________ _____ ____________ _______ _____
Total Interest
Bearing Deposits 7,523,729 82,044 4.37 7,672,608 61,710 3.23
Short-term
Borrowings 868,480 12,717 5.87 1,017,818 10,138 4.00
Long-term
Borrowings 814,073 13,748 6.77 348,715 5,980 6.88
___________ ________ _____ ____________ _______ _____
Total Interest Bearing
Liabilities $ 9,206,282 $108,509 4.73% $ 9,039,141 $ 77,828 3.45%
=========== ======== ====== =========== ======== ======
Net Interest Margin
(FTE) as a Percent
of Average Earning
Assets $124,538 4.33% $123,024 4.34%
======== ====== ======== ======
PROVISION FOR LOAN LOSSES AND CREDIT QUALITY
____________________________________________
Excluding the special $8.9 million loan loss provision increase associated with
the Valley acquisition in the second quarter of 1994, the provision for loan
losses of $4.0 million in the second quarter of 1995 is relatively unchanged
from the second quarter of 1994. The 1995 provision level reflects the
continued relatively stable trend in nonperforming assets and net charge-offs
in relation to the allowance for loan losses.
At June 30, 1995, nonperforming assets were $68.2 million, the lowest level
reported over the past five quarters. Nonaccrual loans, the largest component
of nonperforming assets, decreased $1.0 million when compared to the same period
last year and increased $4.1 million since the first quarter of 1995.
<PAGE>
Total nonaccrual commercial loans and leases reflected an increase of $2.4
million at June 30, 1995 compared to June 30, 1994 and increased $2.7 million
since March 31, 1995. Total nonaccrual real estate loans decreased $3.5 million
in the second quarter of 1995 compared to the second quarter of last year and
increased $1.5 million compared to the first quarter of 1995. The change in
nonaccrual personal loans was insignificant. Other real estate owned declined
due to the sale of closed branch facilities.
Net charge-offs in the second quarter of 1995 amounted to $1.1 million or .05%
of average loans annualized. The second quarter 1995 net charge-offs were $.3
million higher than the same period last year, however they were $0.9 million
less than the first quarter of 1995.
The allowance for loan losses was $160.6 million or 1.75% of total loans at June
30, 1995 compared to $157.7 million or 1.76% of total loans at March 31, 1995
and $149.4 million or 1.71% of total loans at June 30, 1994. The coverage ratio
of the allowance for loan losses to nonperforming loans decreased slightly from
273% at March 31, 1995 to 269% at the end of the current quarter. At June 30,
1994, the coverage ratio was 244%.
The following tables present certain credit quality information and statistics
at June 30, 1995 as well as for the previous four quarters.
CONSOLIDATED CREDIT QUALITY INFORMATION
($000's)
1995 1994
__________________ _____________________________
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
__________________ _____________________________
NONPERFORMING ASSETS
Nonaccrual $ 48,359 $ 44,210 $ 44,766 $ 53,987 $ 49,384
Renegotiated 3,424 3,826 4,172 4,748 4,328
Past Due 90 Days or More 7,879 9,653 9,093 8,551 7,613
_________________________________________________
Total Nonperforming Loans 59,662 57,689 58,031 67,286 61,325
Other Real Estate Owned 8,510 11,209 12,114 9,697 8,494
_________________________________________________
Total Nonperforming Assets $ 68,172 $ 68,898 $ 70,145 $ 76,983 $ 69,819
=================================================
ALLOWANCE FOR LOAN LOSSES $160,565 $157,689 $153,961 $152,470 $149,371
=================================================
<PAGE>
1995 1994
__________________ _____________________________
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
__________________ _____________________________
NONACCRUAL LOANS BY TYPE ($000's)
Commercial
Commercial, Financial &
Agricultural $ 13,703 $ 11,134 $ 8,372 $ 11,944 $ 11,410
Lease Financing
Receivables 2,246 2,086 1,601 2,883 2,106
________________________________________________
Total Commercial 15,949 13,220 9,973 14,827 13,516
Real Estate
Construction and Land
Development 666 731 902 3,862 3,135
Commercial Mortgage 17,626 16,227 19,706 21,769 20,188
Residential Mortgage 11,590 11,378 11,453 10,725 10,062
________________________________________________
Total Real Estate 29,882 28,336 32,061 36,356 33,385
Personal 2,528 2,654 2,732 2,804 2,483
________________________________________________
Total Nonaccrual Loans $ 48,359 $ 44,210 $ 44,766 $ 53,987 $ 49,384
================================================
RECONCILIATION OF CONSOLIDATED ALLOWANCE FOR LOAN LOSSES ($000's)
Beginning Balance $157,689 $153,961 $152,470 $149,371 $137,174
Provision for Loan Losses 4,005 3,983 4,299 3,655 13,001
Allowance of Bank Acquired --- 1,747 --- --- ---
Loans Charged-off
Commercial 354 809 1,192 653 974
Real Estate 161 1,328 1,501 383 1,191
Personal 1,402 1,328 1,636 877 1,089
Leases 258 133 409 80 289
________________________________________________
Total Charge-offs 2,175 3,598 4,738 1,993 3,543
Recoveries on Loans
Commercial 256 890 1,062 381 1,683
Real Estate 208 225 386 681 538
Personal 576 479 448 347 504
Leases 6 2 34 28 14
________________________________________________
Total Recoveries 1,046 1,596 1,930 1,437 2,739
________________________________________________
Net Loans Charged-off 1,129 2,002 2,808 556 804
________________________________________________
Ending Balance $160,565 $157,689 $153,961 $152,470 $149,371
=================================================
<PAGE>
1995 1994
_________________ __________________________
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
_________________ __________________________
CONSOLIDATED STATISTICS
Net Charge-offs
to Average Loans
Annualized 0.05% 0.09% 0.13% 0.02% 0.04%
Total Nonperforming Loans
to Total Loans 0.65 0.64 0.66 0.76 0.70
Total Nonperforming Assets
to Total Loans and Other
Real Estate Owned 0.74 0.77 0.80 0.86 0.80
Allowance for Loan Losses
to Total Loans 1.75 1.76 1.75 1.71 1.71
Allowance for Loan Losses
to Nonperforming Loans 269 273 265 227 244
OTHER INCOME
____________
Total other income was $102.2 million for the second quarter of 1995, an
increase of $18.6 million or 22.3% when compared to $83.6 million earned in the
second quarter of 1994. Excluding securities losses, other income increased
$11.2 million or 12.3% in the second quarter of 1995 compared to the same period
last year. Fees from data processing services grew $13.7 million or 35.5% and
amounted to $52.3 million this quarter compared to $38.6 million for the same
period last year. This increase was due primarily to processing and software
related revenue. As part of the processing revenue increase, contract buy-out
fees were $2.8 million higher in the second quarter of 1995 compared to the same
period last year and conversion revenue contributed $1.5 million of the
increase. Software consulting revenue contributed $2.6 of the software related
revenue increase while software maintenance revenue increased $1.2 million due
primarily to the acquisition of Software Alliance in December 1994.
Trust fees increased $1.5 million or 10.3%. Fees from other customer services
declined 12.9% or $3.9 million. A $1.0 million decrease in service charges on
deposit accounts and a decline of $1.9 million in other commissions and fees
accounted for the change. Other income decreased $0.1 million or 1.7% this
quarter compared to the same quarter last year. This decline resulted primarily
from the sales of the Corporation's insurance agencies in the later part of 1994
offset in part by gains realized on asset sales not associated with the Valley
merger.
OTHER EXPENSE
_____________
Total other expense for the second quarter of 1995 amounted to $149.5 million
compared to $231.0 million, from the same period a year ago. Excluding the
$76.6 million merger/restructuring charge and the $8.5 miscellaneous charge
reported in the second quarter of 1994, total other expenses for that quarter
would have been $145.9 million. When comparing the second quarter of 1995 to
the adjusted expense number for the second quarter of 1994, total other expense
<PAGE>
increased $3.6 million or 2.5%. A majority of the expense categories reflected
a modest increase or a decrease when compared to the second quarter of 1994.
As noted in our 1994 Annual Report to shareholders, a restructuring/merger
charge related to the Valley merger was recorded in the second quarter of 1994.
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 slight increase in salaries and benefits expense,
occupancy, and processing expense reflects the cost savings achieved through the
merger. The decrease in payments to regulatory agencies was primarily due to
lower deposit insurance costs due to the sale of deposit accounts in 1994 and
a decline in insured deposit accounts overall. Supplies expense was not
significantly affected by the merger. Professional services expense amounted
to $4.7 million for the second quarter of 1995 compared to $3.7 million for the
same period last year. The majority of the increase was due to costs incurred
for technological assistance in software development. The other miscellaneous
expense category is affected by the capitalization of costs, net of
amortization, associated with software development and data processing
conversions. Capitalized software costs increased approximately $2.7 million
in the second quarter of 1995 compared to the same period last year. This
capitalization includes the professional fee expense associated with
technological assistance noted above. Capitalized costs associated with
conversions activity was relatively unchanged.
As noted in prior discussions, M&I Data Services, the Corporation's data
processing division (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. Subsequent
to the merger, the operational functions were moved to a separate affiliate.
While merger efficiencies were realized at DSI, continued strong revenue growth
has resulted in DSI's expense growth to be approximately 20% when comparing the
second quarter of 1995 to the same period a year ago. Excluding DSI's growth
in total expenses, our other affiliates realized an overall expense decline.
INCOME TAXES
____________
The income tax provision for the three months ended June 30, 1995 amounted to
$24.8 million compared to a pre-merger affected charge of $22.7 million for the
three months ended June 30, 1994. The effective tax rate decline was primarily
due to a $1.2 million Federal income tax credit associated with software
development.
MERGER/RESTRUCTURING - UPDATE
_____________________________
As noted above, the merger/restructuring charge of $76.6 million recorded in
June, 1994, was the result of the acquisition of Valley and reflected the costs
associated with executive contracts and the reduction in workforce, the write-
off of duplicate computer and software costs, system conversion costs,
professional fees, and other net costs associated with the merger. As part of
the merger/restructuring process the Corporation in 1994 merged 15 bank charters
and four financial service affiliates into other M&I affiliates which were
providing similar services. The Corporation also closed 49 branch locations
which included 19 required branch divestitures. These activities resulted in
<PAGE>
a reduction of approximately 1,000 employees. During 1995 it is anticipated
that seven additional bank charters will be merged. Since June 30, 1994
approximately 91% of the liability has been utilized either through cash
payments, contractual commitments, or asset writedowns. At the present time,
the Corporation anticipates that the June 30, 1994 merger/restructuring charge
will be adequate to absorb all related costs.
SIX MONTHS ENDED JUNE 30, 1995 AND 1994
_______________________________________
For the six months ended June 30, 1995 the Corporation recorded net income of
$92.4 million compared to $1.5 million for the six months ended June 30, 1994.
Fully diluted net income per share amounted to $.91 compared to $.01 for the
prior year. Net income for the six months ended June 30, 1994 would have been
$77.5 million and fully diluted net income per share would have amounted to $.75
per share had the $76.1 million of unusual charges not been recorded in the
second quarter of 1994. The net operating income improvement of $14.9 million
was due to higher net interest income, higher noninterest income and a decline
in other expenses.
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 income statement for the first six months on a comparable basis presented
in the same format as the table for the quarterly results. The results exclude
the after-tax merger related charge of $76.1 taken in the second quarter of
1994.
ROA
1995 1994 Impact
__________________________
Interest Income 7.36% 6.43% 0.93%
Interest Expense (3.37) (2.48) (0.89)
______ ______ ______
Net Interest Income 3.99 3.95 0.04
Provision for Loan Losses (0.13) (0.13) 0.00
Net Securities Gains (Losses) __ 0.01 (0.01)
Other Income 3.22 2.98 0.24
Other Expense (4.70) (4.76) 0.06
______ ______ ______
Income Before Income Taxes 2.38 2.05 0.33
Income Taxes (0.89) (0.79) (0.10)
______ ______ ______
Return on Average Assets 1.49% 1.26% 0.23%
====== ====== ======
<PAGE>
CAPITAL RESOURCES
_________________
At June 30, 1995 Shareholders' equity amounted to $1.17 billion or 9.1% of total
consolidated assets compared with $1.06 billion or 8.4% at December 31, 1994 and
$1.07 billion or 8.5% at June 30, 1994.
During the second quarter of 1995 the net unrealized loss on securities
available for sale decreased $22.0 million resulting in a net unrealized gain
of $7.1 million at June 30, 1995.
The Corporation continued to acquire common shares in accordance with the Stock
Repurchase Program approved by the Corporation's Board of Directors. During the
second quarter of 1995, 0.7 million shares were acquired at an aggregate cost
of $15.5 million. Cumulatively 11.3 million shares have been acquired with an
aggregate cost of $247.9 million since inception of the program in April 1993.
The corporation continues to have a strong capital base and its regulatory
capital ratios remain significantly above the defined minimum regulatory ratios
as shown in the following tables as of June 30, 1995.
<PAGE>
RISK-BASED CAPITAL RATIOS
($ in thousands)
Amount Ratio
__________ ______
Tier 1 capital $1,097,088 11.41%
Tier 1 capital
minimum requirement 384,512 4.00
__________ ______
Excess $ 712,576 7.41%
========== ======
Total capital $1,331,183 13.85%
Total capital
minimum requirement 769,024 8.00
__________ ______
Excess $ 562,159 5.85%
========== ======
Risk-adjusted assets $9,612,795
LEVERAGE RATIO
($ in thousands)
Amount Ratio
___________________ ____________
Tier 1 capital to
adjusted total assets $1,097,088 8.76%
Minimum leverage
requirement (1) 375,638 - 626,064 3.00 - 5.00
___________________ ____________
Excess $721,450 - 471,024 5.76 - 3.76%
=================== ============
Adjusted average total assets $12,521,276
(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 April 25,
1995.
B. Votes cast for items presented for consideration and approval are as
follows:
1) To elect seven Directors to serve until the 1998 Annual Meeting
of Shareholders.
For Against Abstentions Non-vote
Jon F. Chait 75,927,923 982,029 -- --
D.J. Kuester 75,904,958 1,004,994 -- --
Edward L. Meyer, Jr. 75,792,635 1,117,317 -- --
Don R. O'Hare 75,688,182 1,221,770 -- --
San W. Orr, Jr. 75,905,944 1,004,008 -- --
J.A. Puelicher 75,658,806 1,251,146 -- --
Stuart W. Tisdale 75,805,316 1,104,636 -- --
2) To Approve the Marshall & Ilsley Corporation 1995 Directors Stock
Option Plan.
For 68,033,798
Against 6,824,562
Abstentions 2,043,592
Broker Non-Vote 8,000
The continuing Directors of the Corporation are:
Mr. Boldt Mr. Abdoo
Mr. Bolduc Mr. Bueche
Mr. Francke Mr. Gunnlaugsson
Mr. Jacobs Mr. Kellner
Mr. Kress Mr. Platten
Mr. Zuehlke Mr. Wigdale
Mr. Wright
Item 6 - Exhibits and Reports on Form 8-K
_________________________________________
A. Exhibits:
Exhibit 11 - Statement - Computation of Earnings Per Share
Exhibit 12 - Marshall & Ilsley Corporation Computation of
Ratio of Earnings to Fixed Charges
Exhibit 27 - Financial Data Schedule
B. Reports on Form 8-K:
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.
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
August 11, 1995
<PAGE>
MARSHALL & ILSLEY CORPORATION EXHIBIT 11
CALCULATION OF EARNINGS PER SHARE
($000's except per share data)
Three Months Ended June 30,
-----------------------------
PRIMARY 1995 1994
------- ------------ ------------
Earnings:
Net income (loss) $46,237 ($37,061)
============ ============
Shares:
Weighted average number of common shares
outstanding 93,386 95,480
Additional shares relating to:
Convertible preferred stock 3,833 -
Stock options outstanding at end
of each period and exercised
during each period (a) 1,096 -
------------ ------------
Total average primary shares outstanding 98,315 95,480
============ ============
PRIMARY EARNINGS (LOSS) PER SHARE $0.47 ($0.39)
============ ============
FULLY DILUTED
-------------
Earnings:
Net income (loss) $46,237 ($37,061)
Add: Interest on convertible notes,
net of income tax effect 465 -
------------ ------------
Total earnings (loss) as adjusted $46,702 ($37,061)
============ ============
Shares:
Weighted average number of common shares
outstanding 93,386 95,480
Additional shares relating to:
Convertible preferred stock 3,833 -
Stock options outstanding at end
of each period and exercised
during each period (b) 1,213 -
Assumed conversion of convertible notes 3,844 -
------------ ------------
Total average fully diluted shares outstanding 102,276 95,480
============ ============
FULLY DILUTED EARNINGS (LOSS) PER SHARE $0.46 ($0.39)
============ ============
Notes:
------
(a) Based on the treasury stock method using average market price.
(b) Based on the treasury stock method using period-end market price, if higher
than average market price for options outstanding at end of each period and
market price at date of exercise for options exercised during each period.
<PAGE>
MARSHALL & ILSLEY CORPORATION EXHIBIT 11
CALCULATION OF EARNINGS PER SHARE
($000's except per share data)
Six Months Ended June 30,
-----------------------------
PRIMARY 1995 1994
------- ------------ ------------
Earnings:
Net income $92,372 $1,452
============ ============
Shares:
Weighted average number of common shares
outstanding 93,464 95,771
Additional shares relating to:
Convertible preferred stock 3,833 2,345
Stock options outstanding at end
of each period and exercised
during each period (a) 1,105 1,591
------------ ------------
Total average primary shares outstanding 98,402 99,707
============ ============
PRIMARY EARNINGS PER SHARE $0.94 $0.01
============ ============
FULLY DILUTED
-------------
Earnings:
Net income $92,372 $1,452
Add: Interest on convertible notes,
net of income tax effect 930 -
------------ ------------
Total earnings as adjusted $93,302 $1,452
============ ============
Shares:
Weighted average number of common shares
outstanding 93,464 95,771
Additional shares relating to:
Convertible preferred stock 3,833 2,345
Stock options outstanding at end
of each period and exercised
during each period (b) 1,284 1,608
Assumed conversion of convertible notes 3,844 -
------------ ------------
Total average fully diluted shares outstanding 102,425 99,724
============ ============
FULLY DILUTED EARNINGS PER SHARE $0.91 $0.01
============ ============
Notes:
------
(a) Based on the treasury stock method using average market price.
(b) Based on the treasury stock method using period-end market price, if higher
than average market price for options outstanding at end of each period and
market price at date of exercise for options exercised during each period.
<PAGE>
MARSHALL & ILSLEY CORPORATION Exhibit 12
Computation of Ratio of Earnings to Fixed Charges
($ in thousands)
<TABLE>
<CAPTION>
6 Months
Ended Years Ended December 31,
June 30 --------------------------------------------------------------
Earnings: 1995 1994 1993 1992 1991 1990
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Earnings before income taxes, extraordinary
items and cumulative effect of changes
in accounting principles $143,013 $167,803 $264,584 $231,792 $186,738 $143,192
Fixed charges, excluding interest on deposits 57,134 77,074 47,905 50,687 66,641 85,234
----------- ----------- ----------- ----------- ----------- -----------
Earnings including fixed charges but
excluding interest on deposits 200,147 244,877 312,489 282,479 253,379 228,426
Interest on deposits 155,542 255,861 272,100 334,443 448,757 466,537
----------- ----------- ----------- ----------- ----------- -----------
Earnings including fixed charges and
interest on deposits $355,689 $500,738 $584,589 $616,922 $702,136 $694,963
=========== =========== =========== =========== =========== ===========
Fixed Charges:
Interest Expense:
Short-term borrowings $27,524 $39,681 $18,010 $17,606 $32,065 $56,849
Long-term borrowings 26,182 30,537 23,088 26,439 27,770 22,524
One-third of rental expense for all operating
leases (the amount deemed representative
of the interest factor) 3,428 6,856 6,807 6,642 6,806 5,861
----------- ----------- ----------- ----------- ----------- -----------
Fixed charges excluding interest on deposits 57,134 77,074 47,905 50,687 66,641 85,234
Interest on deposits 155,542 255,861 272,100 334,443 448,757 466,537
----------- ----------- ----------- ----------- ----------- -----------
Fixed charges including interest on deposits $212,676 $332,935 $320,005 $385,130 $515,398 $551,771
=========== =========== =========== =========== =========== ===========
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits 3.50 x 3.18 x 6.52 x 5.57 x 3.80 x 2.68 x
Including interest on deposits 1.67 x 1.50 x 1.83 x 1.60 x 1.36 x 1.26 x
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 630,157
<INT-BEARING-DEPOSITS> 7,564,044
<FED-FUNDS-SOLD> 43,250
<TRADING-ASSETS> 13,946
<INVESTMENTS-HELD-FOR-SALE> 1,845,273
<INVESTMENTS-CARRYING> 451,079
<INVESTMENTS-MARKET> 453,617
<LOANS> 9,174,548
<ALLOWANCE> 160,565
<TOTAL-ASSETS> 12,798,972
<DEPOSITS> 9,626,861
<SHORT-TERM> 1,082,768
<LIABILITIES-OTHER> 279,890
<LONG-TERM> 642,413
0
349
<COMMON> 99,494
<OTHER-SE> 1,067,197
<TOTAL-LIABILITIES-AND-EQUITY> 12,798,972
<INTEREST-LOAN> 381,069
<INTEREST-INVEST> 64,537
<INTEREST-OTHER> 6,869
<INTEREST-TOTAL> 452,475
<INTEREST-DEPOSIT> 155,542
<INTEREST-EXPENSE> 53,706
<INTEREST-INCOME-NET> 243,227
<LOAN-LOSSES> 7,988
<SECURITIES-GAINS> (33)
<EXPENSE-OTHER> 292,172
<INCOME-PRETAX> 143,013
<INCOME-PRE-EXTRAORDINARY> 143,013
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 92,372
<EPS-PRIMARY> 0.94
<EPS-DILUTED> 0.91
<YIELD-ACTUAL> 4.34
<LOANS-NON> 48,359
<LOANS-PAST> 7,879
<LOANS-TROUBLED> 3,424
<LOANS-PROBLEM> 59,662
<ALLOWANCE-OPEN> 153,961
<CHARGE-OFFS> 5,773
<RECOVERIES> 2,642
<ALLOWANCE-CLOSE> 160,565
<ALLOWANCE-DOMESTIC> 160,565
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
