<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 March 31, 1997
---------------------------------------------
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 April 30, 1997
----- ----------------
Common Stock, $1.00 Par Value 88,639,389
<PAGE>
<PAGE>
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED BALANCE SHEETS (Unaudited)
($000's except share data)
<TABLE>
<CAPTION>
March 31, December 31, March 31,
Assets 1997 1996 1996
- ------ -----------------------------------------
<S> <C> <C> <C>
Cash and cash equivalents:
Cash and due from banks $ 683,073 $ 780,562 $ 617,746
Federal funds sold and
security resale agreements 108,776 123,880 91,878
Money market funds 56,376 63,482 56,748
------------- ------------- -------------
Total cash and cash equivalents 848,225 967,924 766,372
Trading securities 42,076 39,671 31,211
Other short-term investments 48,139 45,711 74,599
Investment securities available for sale at
market value 2,977,094 3,065,048 2,699,621
Investment securities held to maturity,
market value $813,497 ($776,750 December 31,
and $509,557 March 31, 1996) 812,122 773,804 509,487
------------- ------------- -------------
Total investment securities 3,789,216 3,838,852 3,209,108
Loans 9,576,716 9,301,884 8,782,236
Less: Allowance for loan losses 154,599 155,895 161,841
------------- ------------- -------------
Net loans 9,422,117 9,145,989 8,620,395
Premises and equipment, net 318,092 313,381 302,334
Accrued interest and other assets 422,351 411,785 372,553
------------- ------------- -------------
Total Assets $ 14,890,216 $ 14,763,313 $ 13,376,572
============= ============= =============
Liabilities and Shareholders' Equity
- ------------------------------------
Deposits:
Noninterest bearing $ 2,261,330 $ 2,470,882 $ 2,079,165
Interest bearing 8,574,325 8,481,476 7,982,109
------------- ------------- -------------
Total deposits 10,835,655 10,952,358 10,061,274
Funds purchased and security
repurchase agreements 1,656,974 1,337,940 813,479
Other short-term borrowings 401,598 496,609 606,362
Accrued expenses and other liabilities 367,776 379,100 329,197
Long-term borrowings 348,042 336,096 310,036
------------- ------------- -------------
Total liabilities 13,610,045 13,502,103 12,120,348
Shareholders' equity:
Series A convertible preferred stock,
$1.00 par value; 685,314 shares issued (517,129
December 31, and 348,944 March 31, 1996) 685 517 349
Common stock, $1.00 par value; 99,494,335
shares issued 99,494 99,494 99,494
Additional paid-in capital 209,855 204,135 188,884
Retained earnings 1,246,450 1,209,167 1,105,836
Less: Treasury common stock, at cost;
10,846,046 shares (10,910,798 December 31,
and 6,854,035 March 31, 1996) 286,186 279,143 151,620
Deferred compensation 1,170 825 1,098
Net unrealized gains on securities
available for sale, net of related taxes 11,043 27,865 14,379
------------- ------------- -------------
Total shareholders' equity 1,280,171 1,261,210 1,256,224
------------- ------------- -------------
Total Liabilities and
Shareholders' Equity $ 14,890,216 $ 14,763,313 $ 13,376,572
============= ============= =============
</TABLE>
See notes to financial statements.
<PAGE>
<PAGE>
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
($000's except per share data)
Three Months Ended March 31,
-----------------------------
Interest income 1997 1996
- --------------- ------------- -------------
Loans $ 194,946 $ 185,816
Investment securities:
Taxable 50,091 38,573
Exempt from Federal income taxes 10,008 6,156
Trading securities 483 257
Short-term investments 2,395 2,627
------------- -------------
Total interest income 257,923 233,429
Interest expense
- ----------------
Deposits 94,309 87,602
Short-term borrowings 23,823 10,026
Long-term borrowings 10,149 13,164
------------- -------------
Total interest expense 128,281 110,792
------------- -------------
Net interest income 129,642 122,637
Provision for loan losses 4,311 3,577
------------- -------------
Net interest income after
provision for loan losses 125,331 119,060
Other income
- ------------
Data processing services 80,140 58,382
Trust services 18,931 16,803
Other customer services 29,557 28,901
Net securities gains 803 50
Other 8,164 8,577
------------- -------------
Total other income 137,595 112,713
Other expense
- -------------
Salaries and employee benefits 105,382 91,628
Net occupancy 10,130 9,974
Equipment 20,864 19,401
Software Expenses 4,572 3,569
Payments to regulatory agencies 601 540
Processing charges 5,770 4,942
Supplies and printing 4,115 4,611
Professional services 4,126 3,958
Other 25,207 20,566
------------- -------------
Total other expense 180,767 159,189
------------- -------------
Income before income taxes 82,159 72,584
Provision for income taxes 27,360 26,429
------------- -------------
Net income $ 54,799 $ 46,155
============= =============
Net income per common share
- ---------------------------
Primary $ 0.57 $ 0.47
Fully Diluted 0.56 0.46
Dividends paid per common share $ 0.185 $ 0.165
Weighted average common shares outstanding:
Primary 96,385 98,192
Fully diluted 98,288 102,089
See notes to financial statements.
<PAGE>
<PAGE>
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
($000's)
Three Months Ended March 31,
-----------------------------
1997 1996
------------- -------------
Net Cash Provided by Operating Activities $ 57,872 $ 22,862
Cash Flows From Investing Activities:
- -------------------------------------
Net decrease in securities with maturities
of three months or less 2,500 21,135
Proceeds from sales of securities
available for sale 80,207 190,943
Proceeds from maturities of longer
term securities 155,923 205,007
Purchases of longer term securities (216,703) (619,478)
Net (increase) decrease in loans (284,630) 22,297
Purchases of assets to be leased (52,542) (31,715)
Principal payments on lease receivables 39,622 33,441
Fixed asset purchases, net (14,445) (6,374)
Other 2,004 625
------------- -------------
Net cash used in
investing activities (288,064) (184,119)
------------- -------------
Cash Flows From Financing Activities:
- -------------------------------------
Net decrease in deposits (116,703) (219,503)
Proceeds from issuance of commercial paper 79,743 285,889
Payments for maturity of commercial paper (81,036) (265,361)
Net increase in other short-term
borrowings 374,325 276,713
Proceeds from issuance of long-term debt 8,916 4,923
Payments of long-term debt (125,369) (11,072)
Dividends paid (17,516) (15,926)
Purchases of treasury stock (22,190) (27,566)
Other 10,323 2,043
------------- -------------
Net cash provided by financing
activities 110,493 30,140
------------- -------------
Net decrease in cash and cash equivalents (119,699) (131,117)
Cash and cash equivalents, beginning of year 967,924 897,489
------------- -------------
Cash and cash equivalents, end of period $ 848,225 $ 766,372
============= =============
Supplemental cash flow information:
- -----------------------------------
Cash paid during the period for:
Interest $ 123,467 $ 115,494
Income taxes 8,914 6,599
See notes to financial statements.
<PAGE>
<PAGE>
MARSHALL & ILSLEY CORPORATION
Notes to Financial Statements
March 31, 1997 & 1996 (Unaudited)
1. The accompanying unaudited consolidated financial statements should be
read in conjunction with Marshall & Ilsley Corporation's ("Corporation")
1996 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
months ended March 31, 1997 and 1996. The results of operations for the
three months ended March 31, 1997 and 1996 are not necessarily indicative
of results to be expected for the entire year. Certain amounts in the
1996 consolidated financial statements and analyses have been
reclassified to conform with the 1997 presentation.
2. The Corporation has 5,000,000 shares of preferred stock authorized, of
which, the Board of Directors has designated 2,000,000 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):
March 31, December 31, March 31,
1997 1996 1996
----------- ----------- -----------
Commercial, financial & agricultural $ 3,056,559 $ 2,917,393 $ 2,974,790
Real estate:
Construction 315,401 323,420 273,594
Residential Mortgage 2,245,344 2,176,224 1,923,288
Commercial Mortgage 2,461,223 2,379,156 2,195,744
----------- ----------- -----------
Total real estate 5,021,968 4,878,800 4,392,626
Personal 1,144,859 1,174,186 1,133,406
Lease financing 353,330 331,505 281,414
----------- ----------- -----------
$ 9,576,716 9,301,884 $ 8,782,236
=========== =========== ===========
4. Investment securities, by type, held by the Corporation are
as follows ($000's):
March 31, December 31, March 31,
1997 1996 1996
----------- ----------- -----------
Investment securities held to maturity:
State and political subdivisions $ 808,072 $ 769,748 $ 505,430
Other 4,050 4,056 4,057
----------- ----------- -----------
Investment securities
held to maturity 812,122 773,804 509,487
Investment securities available for sale:
U.S. treasury and
government agencies 2,830,401 2,856,625 2,563,789
State and political subdivisions 717 719 896
Other 145,976 207,704 134,936
----------- ----------- -----------
Investment securities
available for sale 2,977,094 3,065,048 2,699,621
----------- ----------- -----------
Total investment securities $ 3,789,216 $ 3,838,852 $ 3,209,108
=========== =========== ===========
<PAGE>
<PAGE>
MARSHALL & ILSLEY CORPORATION
Notes to Financial Statements - Continued
March 31, 1997 & 1996 (Unaudited)
5. On March 31, 1997, $16.8 million of the Corporation's 8.5% convertible
subordinated notes were converted by the holder into 1,922,114 shares of
the Corporation's common stock. The common stock acquired by conversion
of the notes was exchanged for 168,185 shares of the Corporation's Series
A convertible preferred stock. These are noncash transactions for
purposes of the Consolidated Statements of Cash Flows.
6. In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings
Per Share." This statement establishes new standards for computing and
presenting earnings per share ("EPS"). SFAS No. 128 supersedes
Accounting Principles Board Opinion No. 15, "Earnings Per Share" and
purports to simplify the standards for computing EPS and makes them
comparable to international standards.
SFAS No. 128 replaces the presentation of primary EPS with a presentation
of basic EPS which excludes dilution and requires dual presentation of
basic and diluted EPS for all entities with complex capital structures.
Diluted EPS is computed similarly to fully diluted EPS pursuant to the
previous standard.
The Corporation is required to adopt the new standard in its year-end
1997 financial statements. All prior period EPS information (including
interim EPS) is required to be restated at that time. Early adoption is
not permitted.
The pro forma impact of adopting SFAS No. 128 for the three months ended
March 31, 1997 and 1996 is as follows (in thousands except per share):
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 31, 1997 March 31, 1996
------------------------ ------------------------
Basic Diluted Basic Diluted
------------------------ ------------------------
<S> <C> <C> <C> <C>
Pro Forma Earnings Per Share $ 0.60 $ 0.56 $ 0.49 $ 0.46
=========== =========== =========== ===========
</TABLE>
<PAGE>
<PAGE>
MARSHALL & ILSLEY CORPORATION
CONSOLIDATED AVERAGE BALANCE SHEETS (Unaudited)
($000's)
Three Months Ended March 31,
---------------------------
Assets 1997 1996
- ------ ------------- -------------
Cash and due from banks $ 578,564 $ 590,807
Short-term investments 180,108 192,583
Trading securities 40,528 20,322
Investment securities:
Taxable 3,027,293 2,526,363
Tax-exempt 848,712 533,576
------------- -------------
Total investment securities 3,876,005 3,059,939
Loans:
Commercial 2,946,136 2,896,492
Real estate 4,933,500 4,422,370
Personal 1,159,720 1,146,921
Lease financing 342,995 277,227
------------- -------------
9,382,351 8,743,010
Less: Allowance for loan losses 157,314 162,517
------------- -------------
Total loans 9,225,037 8,580,493
Premises and equipment, net 316,588 304,693
Accrued interest and other assets 390,713 350,957
------------- -------------
Total Assets $ 14,607,543 $ 13,099,794
============= =============
Liabilities and Shareholders' Equity
- ------------------------------------
Deposits:
Noninterest bearing $ 2,087,103 $ 2,013,864
Interest bearing 8,513,308 7,922,347
------------- -------------
Total deposits 10,600,411 9,936,211
Funds purchased and security repurchase
agreements 1,645,089 678,786
Other short-term borrowings 164,563 90,114
Long-term borrowings 574,791 819,374
Accrued expenses and other liabilities 344,549 309,430
------------- -------------
Total liabilities 13,329,403 11,833,915
Shareholders' equity 1,278,140 1,265,879
------------- -------------
Total Liabilities and Shareholders' Equity $ 14,607,543 $ 13,099,794
============= =============
<PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION OF AND ANALYSIS OF FINANCIAL POSITION AND RESULTS OF
OPERATIONS
Net income for the first quarter of 1997 amounted to $54.8 million compared to
$46.2 million for the same period in the prior year. Primary and fully diluted
earnings per share were $.57 and $.56, respectively for the three months ended
March 31, 1997, compared with $.47 and $.46, respectively for the three months
ended March 31, 1996. The return on average assets and average equity were 1.52%
and 17.39% for the quarter ended March 31, 1997 and 1.42% and 14.66% for the
quarter ended March 31, 1996.
The increase in net income of $8.6 million or 18.7% in the current quarter
compared with the same quarter last year reflects the growth in noninterest
income and the increase in net interest income offset somewhat by an increase
in the provision for loan losses and the increase in noninterest expense.
The following tables present a summary of each of the major elements of the
consolidated operating income statement, certain financial statistics and a
summary of the major operating income statement elements stated as a percent
of average consolidated assets - converted to a fully taxable equivalent basis
(FTE) where appropriate - for the current quarter and previous four quarters.
Operating income excludes approximately $9.6 million ($.10 per share fully
diluted) of special charges relating to the one-time SAIF assessment and write-
off of in-process technology associated with the acquisition of EastPoint
Technology, Inc. which occurred during the third quarter of 1996.
SUMMARY CONSOLIDATED OPERATING INCOME STATEMENTS AND FINANCIAL STATISTICS
- -------------------------------------------------------------------------
($000's except per share data)
<TABLE>
<CAPTION>
1997 1996
----------- -------------------------------------------
First Fourth Third Second First
Quarter Quarter Quarter Quarter Quarter
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Interest Income $ 257,923 $ 255,355 $ 246,625 $ 236,027 $ 233,429
Interest Expense (128,281) (122,457) (120,374) (112,094) (110,792)
---------- ---------- ---------- ---------- ----------
Net Interest Income 129,642 132,898 126,251 123,933 122,637
Provision for Loan Losses (4,311) (4,086) (3,983) (3,548) (3,577)
Net Securities Gains 803 14,677 15 134 50
Other Income 136,792 131,819 123,486 120,476 112,663
Other Expense (180,767) (178,849) (163,587) (164,195) (159,189)
---------- ---------- ---------- ---------- ----------
Income Before Taxes 82,159 96,459 82,182 76,800 72,584
Income Tax Provision (27,360) (34,590) (27,533) (26,432) (26,429)
---------- ---------- ---------- ---------- ----------
Operating Income $ 54,799 $ 61,869 $ 54,649 $ 50,368 $ 46,155
========== ========== ========== ========== ==========
Per Common Share
Operating Income Per Share
Primary $ 0.57 $ 0.63 $ 0.55 $ 0.51 $ 0.47
Fully Diluted 0.56 0.62 0.55 0.50 0.46
Dividends 0.185 0.185 0.185 0.185 0.165
Return on Average Equity
Based on Operating Income 17.39 % 18.95 % 16.96 % 15.87 % 14.66 %
</TABLE>
<PAGE>
<PAGE>
CONSOLIDATED OPERATING INCOME STATEMENT COMPONENTS AS A PERCENT OF
- ------------------------------------------------------------------
AVERAGE TOTAL ASSETS
- --------------------
<TABLE>
<CAPTION>
1997 1996
----------- ---------------------------------------------
First Fourth Third Second First
Quarter Quarter Quarter Quarter Quarter
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Interest Income (FTE) 7.30 % 7.25 % 7.17 % 7.23 % 7.27 %
Interest Expense (3.56) (3.41) (3.44) (3.38) (3.40)
---------- ---------- ---------- ---------- ----------
Net Interest Income 3.74 3.84 3.73 3.85 3.87
Provision for Loan Losses (0.12) (0.11) (0.11) (0.11) (0.11)
Net Securities Gains 0.02 0.41 0.00 0.00 0.00
Other Income 3.80 3.67 3.53 3.63 3.46
Other Expense (5.02) (4.99) (4.68) (4.93) (4.89)
---------- ---------- ---------- ---------- ----------
Income Before Taxes 2.42 2.82 2.47 2.44 2.33
Income Tax Provision (0.90) (1.10) (0.91) (0.92) (0.91)
---------- ---------- ---------- ---------- ----------
Return on Average Assets
Based on Operating Income 1.52 % 1.72 % 1.56 % 1.52 % 1.42 %
========== ========== ========== ========== ==========
</TABLE>
The following table reconciles operating income to operating income before
amortization of intangibles ("tangible operating income"). Amortization includes
amortization of goodwill, core deposit premiums, mortgage servicing rights and
purchased data processing contract rights and is net of negative goodwill
accretion and the income tax expense or benefit, if any, related to each
component. These calculations were specifically formulated by the Corporation
and may not be comparable to similarly titled measures reported by other
companies.
SUMMARY CONSOLIDATED TANGIBLE OPERATING INCOME AND FINANCIAL STATISTICS
- -----------------------------------------------------------------------
($000's except per share data)
<TABLE>
<CAPTION>
1997 1996
----------- -------------------------------------------
First Fourth Third Second First
Quarter Quarter Quarter Quarter Quarter
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Operating Income $ 54,799 $ 61,869 $ 54,649 $ 50,368 $ 46,155
Amortization, net of tax 1,891 1,858 1,748 1,692 1,679
---------- ---------- ---------- ---------- ----------
Tangible Operating Income $ 56,690 $ 63,727 $ 56,397 $ 52,060 $ 47,834
========== ========== ========== ========== ==========
Tangible Operating Income Per Share
Primary $ 0.59 $ 0.65 $ 0.57 $ 0.52 $ 0.49
Fully Diluted 0.58 0.64 0.56 0.52 0.47
</TABLE>
<PAGE>
<PAGE>
NET INTEREST INCOME
- -------------------
Net interest income for the first quarter of 1997 amounted to $129.6 million,
an increase of $7.0 million or 5.7% from the $122.6 million reported for the
first quarter of 1996. The benefit from the increase in the volume of average
earning assets offset the slight decline in the yield on earning assets and the
increase in both the volume and rate of interest bearing liabilities.
Average earning assets increased $1.5 billion or 12.2% in the first quarter of
1997 compared to the same period a year ago. Including securitized adjustable
rate mortgage loans (ARMS), average loans grew approximately $693.1 million or
7.5% compared to the first quarter of last year. Average securities, excluding
securitized ARMs, increased $762.3 million which reflects the Corporation's
intent, initiated in the prior year, to increase the portfolio size with higher
yielding and longer-term securities to adjust the rate sensitivity and leverage
the consolidated balance sheet.
Average interest bearing liabilities increased $1.4 billion or 14.6% in the
first quarter of 1997 compared to the same period in 1996. Average interest
bearing deposits increased $591.0 million or 7.5% ,average short-term borrowings
increased $1.0 billion while average long-term borrowings decreased $244.6
million or 29.9%. Average noninterest bearing deposits increased $73.2
million or 3.6% during the first quarter of 1997 compared to the first quarter
of 1996.
At the end of the first quarter of 1997, the holder of the Corporation's 8.5%
convertible notes converted the remaining $16.8 million of such debt into Series
A convertible preferred stock. During the first quarter of 1997, approximately
$105 million of the Corporation's banking subsidiaries' Bank Notes matured and
were refinanced primarily with short-term borrowings and brokered certificates
of deposit.
The growth and composition of the Corporation's quarterly average loan portfolio
for the current quarter and previous four quarters are reflected below.
Securitized ARM loans which are classified in the consolidated balance sheets
as investment securities available for sale are included to provide a more
meaningful comparison ($ in millions):
<TABLE>
<CAPTION>
1997 1996
--------- ------------------------------------ Annual
First Fourth Third Second First Growth
Quarter Quarter Quarter Quarter Quarter PCT
--------- ------------------ ----------------- -------
<S> <C> <C> <C> <C> <C> <C>
Commercial Loans $ 2,946 $ 2,919 $ 2,981 $ 2,945 $ 2,897 1.7 %
Real Estate Loans
Construction 323 321 283 267 288 12.4
Commercial Mortgages 2,417 2,359 2,303 2,226 2,190 10.4
Residential Mortgages 2,193 2,201 2,093 1,953 1,944 12.8
Securitized ARM loans 550 487 460 491 496 10.9
--------- --------- -------- -------- -------- -------
Residential Mortgages 2,743 2,688 2,553 2,444 2,440 12.4
--------- --------- -------- -------- -------- -------
Total Real Estate Loans 5,483 5,368 5,139 4,937 4,918 11.5
Personal Loans
Personal Loans 872 871 851 841 847 3.0
Student Loans 288 283 281 292 300 (4.1)
--------- --------- -------- -------- -------- -------
Total Personal Loans 1,160 1,154 1,132 1,133 1,147 1.1
Lease Financing
Receivables 343 318 295 282 277 23.7
--------- --------- -------- -------- -------- -------
Total Consolidated
Average Loans & ARMs $ 9,932 $ 9,759 $ 9,547 $ 9,297 $ 9,239 7.5 %
========= ========= ======== ======== ======== =======
Total Consolidated
Average Loans $ 9,382 $ 9,272 $ 9,087 $ 8,806 $ 8,743 7.3 %
========= ========= ======== ======== ======== =======
</TABLE>
<PAGE>
<PAGE>
During 1996 approximately $224 million of ARM loans were converted into
government guaranteed agency pool securities of which, approximately $88 million
of such loans were securitized in the first quarter of 1996. There were no ARM
loan securitizations during the first quarter of 1997. Including the securitized
ARMs, average residential mortgages increased by approximately $303 million or
12.4% in the first quarter of 1997 compared with the first quarter of 1996.
Approximately $114.3 million of the increase is attributable to home equity
loans and lines of credit.
Lease financing receivables increased $65.8 million or 23.7% in the first
quarter of 1997 compared with the same period last year of which, approximately
$44.4 million is due to growth in automobile leasing.
The growth and composition of the Corporation's quarterly average deposits for
the current and prior year's quarters are as follows ($ in millions):
<TABLE>
<CAPTION>
1997 1996
--------- ------------------------------------ Annual
First Fourth Third Second First Growth
Quarter Quarter Quarter Quarter Quarter PCT
--------- --------- ----------------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Noninterest Bearing
Commercial $ 1,362 $ 1,462 $ 1,368 $ 1,302 $ 1,280 6.4 %
Personal 331 329 384 427 418 (20.8)
Other 394 436 358 308 316 24.7
--------- --------- -------- -------- -------- -------
Total Noninterest
Bearing Deposits 2,087 2,227 2,110 2,037 2,014 3.6
Interest Bearing
Savings & NOW 1,753 1,787 1,803 1,817 1,842 (4.8)
Money Market 2,613 2,557 2,451 2,407 2,386 9.5
Other CDs & Time Deposits 3,027 3,054 3,048 3,039 3,034 (0.2)
CDs Greater than $100 662 643 643 614 621 6.7
Brokered CDs 458 369 221 115 39 N.M.
--------- --------- -------- -------- -------- -------
Total Interest
Bearing Deposits 8,513 8,410 8,166 7,992 7,922 7.5
--------- --------- -------- -------- -------- -------
Total Consolidated
Average Deposits $ 10,600 $ 10,637 $ 10,276 $ 10,029 $ 9,936 6.7 %
========= ========= ======== ======== ======== =======
</TABLE>
Money market savings and brokered CDs exhibited the greatest growth when
comparing average deposits in the first quarter of 1997 to the first quarter
of 1996. The money market index account increased $325.3 million or 21.9% and
averaged $1.8 billion in the first quarter of 1997 compared with $1.5 billion
during the same period last year. The increase in brokered CDs represents the
Corporation's intent to acquire longer-term CDs with maturities of one year or
more in order to provide a stable source of funds that over time is less costly
than Bank Notes.
The Corporation's consolidated average interest earning assets and interest
bearing liabilities, interest earned and interest paid for the current quarter
and comparative prior year quarter are presented in the following table.
Securitized ARM loans that are classified as investment securities available for
sale are included with loans to make the comparative information more
meaningful.
<PAGE>
<PAGE>
YIELD & COST ANALYSIS FIRST QUARTER
($ in millions) --------------------------------------------------------
1997 1996
--------------------------- ---------------------------
Average Average
Average Yield or Average Yield or
Balance Interest Cost Balance Interest Cost
-------------------------- --------------------------
Loans (a) $ 9,932.3 $ 205.4 8.39% $ 9,239.1 $ 195.1 8.49%
Investment Securities:
Taxable 2,477.4 40.1 6.56 2,030.3 29.7 5.89
Tax Exempt (a) 848.7 14.6 6.99 533.6 9.1 6.81
Other Short-term
Investments (a) 220.6 2.9 5.29 212.9 2.9 5.45
-------------------------- --------------------------
Total Interest
Earning Assets $ 13,479.0 $ 263.0 7.91% $ 12,015.9 $ 236.8 7.93%
========================== ==========================
Money Market Savings $ 2,613.0 $ 27.0 4.18% $ 2,386.6 $ 24.5 4.13%
Regular Savings
& NOW 1,752.9 9.1 2.12 1,841.8 9.7 2.11
Other CDs & Time
Deposits 3,027.3 42.3 5.67 3,034.6 43.9 5.82
CDs Greater than
$100 & Brokered CDs 1,120.1 15.9 5.74 659.3 9.5 5.80
-------------------------- --------------------------
Total Interest
Bearing Deposits 8,513.3 94.3 4.49 7,922.3 87.6 4.45
Short-term
Borrowings 1,809.7 23.8 5.34 768.9 10.0 5.24
Long-term
Borrowings 574.8 10.2 7.16 819.4 13.2 6.46
-------------------------- --------------------------
Total Interest
Bearing Liabilities $ 10,897.8 $ 128.3 4.77% $ 9,510.6 $ 110.8 4.69%
========================== ==========================
Net Interest Margin
(FTE) as a Percent
of Average Earning
Assets $ 134.7 4.05% $ 126.0 4.22%
=============== ===============
(a) Fully taxable equivalent basis (FTE), assuming a Federal income tax rate
of 35%, and excluding disallowed interest expense.
The net interest margin as a percent of average earning assets declined 17 basis
points from 4.22% in the first quarter of 1996 to 4.05% in the current quarter.
The yield on average earning assets declined slightly while the cost of interest
bearing liabilities increased 8 basis points. The cost of interest bearing
deposits increased 4 basis points and short-term borrowing costs increased 10
basis points. The cost of long-term borrowings increased 70 basis points which
reflects, in part, the issuance of $200 million of 7.65% cumulative preferred
capital securities in December, 1996.
At March 31, 1997, the Corporation had standard receive fixed/pay floating
interest rate swaps and interest rate floors designated as hedges to manage the
interest rate volatility associated with variable rate loans and the convexity
risk associated with investments in collateralized mortgage obligations.
<PAGE>
<PAGE>
The Corporation's position with respect to interest rate swaps and interest rate
floors at March 31, 1997 consisted of the following ($ in millions):
Interest Rate Swaps
-------------------
Notional Value $450
Weighted average receive rate 6.31%
Weighted average pay rate 5.58%
Weighted average remaining term (in years) 2.7
Estimated fair value ($3.1)
Interest Rate Floors
--------------------
Notional Value $50
Strike Rate 5.13%
Index 5.59%
Weighted average remaining term (in years) 4.6
Estimated fair value $0.17
Unamortized premium $0.12
For the three months ended March 31, 1997, the effect on net interest income
resulting from the swaps net of floor premium amortization was a positive $0.8
million which increased the yield on loans and securitized ARMs by 3 basis
points. The effect on net interest income in the first quarter of 1996 was not
material.
PROVISION FOR LOAN LOSSES AND CREDIT QUALITY
- --------------------------------------------
At March 31, 1997, nonperforming assets were $77.6 million compared to $75.0
million at December 31, 1996 and $90.8 million at March 31, 1996. Nonaccrual
loans, the largest component of nonperforming assets, increased $2.4 million
since year-end 1996 and decreased $9.0 million since March 31, 1996. Other real
estate owned and loans past due 90 days or more increased slightly since year
end while renegotiated loans decreased slightly since December 31, 1996.
Compared to March 31, 1996, renegotiated loans decreased $1.4 million, loans
past due 90 days or more were relatively unchanged and other real estate owned
decreased $3.0 million.
Total nonaccrual commercial loans and leases increased $2.4 million since year-
end 1996 and decreased $15.4 million since March 31, 1996. Nonaccrual
commercial loans and leases are substantially responsible for the increase in
nonperforming assets at March 31, 1997 compared to nonperforming assets at
December 31, 1996. Since year end 1996, nonaccrual real estate loans and
nonaccrual personal loans have remained relatively unchanged.
Net charge-offs in the first quarter of 1997 amounted to $5.6 million or .24%
of average loans compared to $.9 million or .04% of average loans in the fourth
quarter of 1996 and $2.7 million or .13% of average loans in the first quarter
of 1996. Four larger commercial loans accounted for approximately $2.7 million
and two larger commercial real estate loans accounted for $.8 million of the net
charge-off activity during the first quarter of 1997.
The allowance for loan losses amounted to $154.6 million or 1.61% of total loans
at March 31, 1997 compared to $155.9 million or 1.68% at December 31, 1996 and
$161.8 million or 1.84% at March 31, 1996. The coverage ratio of the allowance
for loan losses to nonperforming loans was 215% at March 31, 1997 compared with
225% at December 31, 1996 and 197% at March 31, 1996.
The provision for loan losses amounted to $4.3 million in the first quarter of
1997 compared to $3.6 million in the first quarter of 1996. The increase is
primarily due to loan growth.
<PAGE>
<PAGE>
CONSOLIDATED CREDIT QUALITY INFORMATION ($000's)
1997 1996
--------- ---------------------------------------
First Fourth Third Second First
NONPERFORMING ASSETS Quarter Quarter Quarter Quarter Quarter
- -------------------- --------- --------- -------- ---------- --------
Nonaccrual $ 62,576 $ 60,176 $ 65,377 $ 80,344 $ 71,567
Renegotiated 1,736 1,819 1,878 2,936 3,093
Past Due 90 Days or More 7,517 7,366 8,329 7,492 7,422
--------- --------- -------- -------- --------
Total Nonperforming Loans 71,829 69,361 75,584 90,772 82,082
Other Real Estate Owned 5,729 5,629 6,406 7,332 8,744
--------- --------- -------- -------- --------
Total Nonperforming Assets $ 77,558 $ 74,990 $ 81,990 $ 98,104 $ 90,826
========= ========= ======== ======== ========
ALLOWANCE FOR LOAN LOSSES $ 154,599 $ 155,895 $152,755 $163,866 $161,841
========= ========= ======== ======== ========
CONSOLIDATED STATISTICS
- -----------------------
Net Charge-offs
to Average Loans
Annualized 0.24% 0.04% 0.66% 0.07% 0.13%
Total Nonperforming Loans
to Total Loans 0.75 0.75 0.81 1.01 0.93
Total Nonperforming Assets
to Total Loans and Other
Real Estate Owned 0.81 0.81 0.88 1.09 1.03
Allowance for Loan Losses
to Total Loans 1.61 1.68 1.64 1.82 1.84
Allowance for Loan Losses
to Nonperforming Loans 215 225 202 181 197
<PAGE>
1997 1996
--------- ------------------------------------
First Fourth Third Second First
NONACCRUAL LOANS BY TYPE Quarter Quarter Quarter Quarter Quarter
- ------------------------ --------- ------------------------------------
Commercial
Commercial, Financial &
Agricultural $ 17,945 $ 16,257 $ 21,902 $ 37,495 $ 33,608
Lease Financing
Receivables 2,290 1,624 1,393 1,677 2,069
--------- --------- -------- -------- --------
Total Commercial 20,235 17,881 23,295 39,172 35,677
Real Estate
Construction and Land
Development 1,650 731 488 642 630
Commercial Mortgage 19,987 19,760 21,218 21,295 17,063
Residential Mortgage 17,286 18,284 17,212 16,293 14,785
--------- --------- -------- -------- --------
Total Real Estate 38,923 38,775 38,918 38,230 32,478
Personal 3,418 3,520 3,164 2,942 3,412
--------- --------- -------- -------- --------
Total Nonaccrual Loans $ 62,576 $ 60,176 $ 65,377 $ 80,344 $ 71,567
========= ========= ======== ======== ========
1997 1996
RECONCILIATION OF --------- ------------------------------------
CONSOLIDATED ALLOWANCE First Fourth Third Second First
FOR LOAN LOSSES Quarter Quarter Quarter Quarter Quarter
- ------------------------ --------- ------------------------------------
Beginning Balance $ 155,895 $ 152,755 $163,866 $161,841 $161,430
Provision for Loan Losses 4,311 4,086 3,983 3,548 3,577
Allowance of Bank Acquired -- -- -- -- --
Allowance Transfer for Loan
Securitizations -- -- -- -- (440)
Loans Charged-off
Commercial 3,305 1,471 13,044 1,012 763
Real Estate 1,466 1,258 1,378 242 455
Personal 2,003 1,959 1,430 1,663 1,336
Leases 80 93 254 61 1,989
--------- --------- -------- -------- --------
Total Charge-offs 6,854 4,781 16,106 2,978 4,543
Recoveries on Loans
Commercial 349 1,701 255 438 828
Real Estate 235 1,619 125 385 323
Personal 652 474 589 605 665
Leases 11 41 43 27 1
--------- --------- -------- -------- --------
Total Recoveries 1,247 3,835 1,012 1,455 1,817
--------- --------- -------- -------- --------
Net Loans Charged-off 5,607 946 15,094 1,523 2,726
--------- --------- -------- -------- --------
Ending Balance $ 154,599 $ 155,895 $152,755 $163,866 $161,841
========= ========= ======== ======== ========
<PAGE>
<PAGE>
OTHER INCOME
- ------------
Total other income in the first quarter of 1997 amounted to $137.6 million, an
increase of $24.9 million or 22.1%, compared to $112.7 million in the same
period last year.
Data processing revenue increased $21.7 million or 37.3 % from $58.4 million in
the first quarter of 1996 to $80.1 million in the current quarter. Processing
revenue increased $14.4 million or 34.7%. Software revenue increased $1.8
million or 28.3% which reflects, in part, the purchase acquisition of EastPoint
Technology, Inc. which occurred in the third quarter of 1996. Buyout fees,
which can vary from period to period, increased $4.4 million. Revenues from
unique services such as contract programming and consulting increased $.9
million. Due to the timing of conversions and contract signings no significant
customer(s) began their processing cycles during the first quarter of 1996.
Compared to the fourth quarter of 1996, revenue from data processing services
increased $5.7 million or 7.7% of which, $2.0 million represents an increase in
buyout fees.
Trust services revenue amounted to $18.9 million in the first quarter of 1997,
an increase of $2.1 million or 12.7% compared to $16.8 million in the first
quarter of 1996. While all components of trust services revenue experienced an
increase, personal trust fees increased $1.1 million and accounted for 53% of
the total growth in trust revenue.
Other customer services increased $.7 million or 2.3% and totaled $29.6 million
in the first quarter of 1997 compared to $28.9 million in the same period one
year ago. Service charges on deposits of $13.6 million increased $.7 million
from the prior year.
Net securities gains in the first quarter of 1997 amounted to $.8 million and
were not significant in the first quarter of 1996. During the first quarter of
1997, the Corporation's Capital Markets Group realized gains of $2.1 million
which were offset by $1.3 million of net securities losses recognized by the
Corporation from the sale of available for sale securities.
All other income amounted to $8.2 million in the first quarter of 1997 compared
to $8.6 million in the first quarter of 1996. Gains from the sale of
residential mortgage loans which includes the servicing rights declined $1.6
million. Gains on the sale of other real estate increased $0.3 million. During
the first quarter of 1997 the Corporation realized a gain from the sale of a
banking branch for approximately $.6 million.
OTHER EXPENSE
- -------------
Total other expenses in the first quarter of 1997 amounted to $180.8 million,
an increase of $21.6 million or 13.6% compared to $159.2 million in the same
period last year.
The increase in expenses is primarily attributable to the Corporation's
nonbanking businesses especially its Data Services Division ("Data Services").
Data Services expense growth reflects the impact of the acquisition of EastPoint
Technology, Inc., the cost of adding processing capacity and other related
costs associated with increased revenue growth and maintenance activities
associated with the Year 2000. It is estimated that the net cost to change
existing computer programs for both internal and external software will be
approximately $25 million. It is anticipated that a substantial portion of the
total cost will be incurred over the next two years and will be expensed as
incurred. Data Services incurred approximately $2 million of expense in all of
1996 and incurred approximately $2 million of expense in the first quarter of
1997 related to the Year 2000. Future data processing revenue is critically
dependent upon the successful implementation of the necessary changes.
<PAGE>
<PAGE>
Expenses of the Corporation's banks in the first quarter of 1996 and throughout
all of 1996 include costs of implementing certain initiatives in the areas of
retail and small business lending, loan and deposit operational support and
product and service distribution networks.
Salaries and employee benefits expense amounted to $105.4 million in the first
quarter of 1997 compared to $91.6 million in the first quarter of 1996, an
increase of $13.8 million or 15.0%. Salaries and employee benefits expense of
Data Services increased $10.8 million or 28.8% in the current quarter compared
to the same period last year. At March 31, 1997 Data Services had
approximately 3,157 employees compared to 2,643 at March 31, 1996 which
reflects, in part, the addition of EastPoint Technology, Inc. and four data
centers.
Data Services expense growth accounted for approximately 74% of the increase in
equipment, software, and processing expenses in the first quarter of 1997
compared to the first of 1996. The decrease in supplies and printing expense
of $.5 million in the current quarter compared with the same period last year
is also primarily attributable to Data Services.
All other expense increased 22.6% or $4.6 million from $20.6 million in the
first quarter of 1996 to $25.2 million in the first quarter of 1997. Data
Services contributed $1.7 million of the expense growth. Credit card franchise
and authorization fees increased $2.1 million. During the first quarter of
1997, the Corporation incurred employee related losses of $.7 million. In
addition to the above, this category of expense is affected by the
capitalization of costs, net of amortization, associated with software
development and data processing conversions. The amount of cost capitalized,
net of amortization in the first quarter of 1997, was $1.7 million more than the
amount recorded in the first quarter of the prior year.
INCOME TAXES
- ------------
The provision for income taxes for the three months ended March 31, 1997
amounted to $27.4 million compared to $26.4 million for the three months ended
March 31, 1996. The decrease in the effective tax rate is primarily due to the
increase in interest income exempt from Federal income taxes.
CAPITAL RESOURCES
- -----------------
Shareholders' equity was $1.28 billion at March 31, 1997 compared to $1.26
billion at December 31, 1996 and March 31, 1996.
Net unrealized gains on securities available for sale decreased $16.8 million
since December 31, 1996. This decrease was offset by the March 31, 1997
conversion of the Corporation's 8.5% convertible subordinated notes as more
fully described in Note 5 of the Notes to Financial Statements.
The Corporation continued to acquire common shares in accordance with the Stock
Repurchase Program approved by its Board of Directors. During the first quarter
of 1997, .8 million shares of common stock were acquired with an aggregate cost
of $28.7 million. Since inception of the program 19.2 million common shares
have been acquired with a cumulative cost of $479.4 million or $24.94 per share
on a weighted average basis.
<PAGE>
<PAGE>
The Corporation continues to have a strong capital base and its regulatory
capital ratios are significantly above the minimum requirements as shown in the
following tables.
<TABLE>
<CAPTION>
RISK-BASED CAPITAL RATIOS ($ in millions)
-------------------------------------------------------------------------
March 31, 1997 December 31, 1996
------------------------------------ ------------------------------------
Amount Ratio Amount Ratio
------------------- ---------------- ------------------- ----------------
<S> <C> <C> <C> <C>
Tier 1 Capital $ 1,400.4 12.75 % $ 1,361.9 12.71 %
Tier 1 Capital
Minimum Requirement 439.4 4.00 428.5 4.00
---------- ------ ---------- ------
Excess $ 961.0 8.75 % $ 933.4 8.71 %
========== ====== ========== ======
Total Capital $ 1,637.9 14.91 % $ 1,596.4 14.90 %
Total Capital
Minimum Requirement 878.8 8.00 857.1 8.00
---------- ------ ---------- ------
Excess $ 759.1 6.91 % $ 739.3 6.90 %
========== ====== ========== ======
Risk-Adjusted Assets $ 10,984.5 $ 10,713.4
========== ==========
LEVERAGE RATIOS ($ in millions)
-------------------------------------------------------------------------
Tier 1 Capital $ 1,400.4 9.65 % $ 1,361.9 9.61 %
Minimum Leverage Requirement 435.5 -725.7 3.00 - 5.00 425.3 -708.8 3.00 - 5.00
----------------- -------------- ----------------- --------------
Excess $ 964.9 -674.7 6.65 - 4.65 % $ 936.6 -653.1 6.61 - 4.61 %
================= ============== ================= ==============
Adjusted Average Total Assets $ 14,514.8 $ 14,175.4
========== ==========
</TABLE>
RECENT DEVELOPMENTS
- -------------------
On March 15,1997, the Corporation announced it would acquire Security Capital
Corporation ("Security") for approximately 12.3 million shares of its Common
Stock and approximately $376 million in cash in a transaction to be accounted
for as a purchase.
Security is the parent of Security Bank S.S.B. a Wisconsin state-chartered
stock savings bank headquartered in Milwaukee, Wisconsin. As of December 31,
1996, Security had consolidated assets of approximately $3.7 billion.
The transaction is anticipated to be completed by October 1, 1997, pending
regulatory and shareholder approvals.
On March 17, 1997, Standard & Poor's announced that it had placed the
Corporation and the preferred stock rating of its subsidiary, M&I Capital Trust
A, on Credit Watch with negative implications, following the announced
acquisition of Security and affirmed the ratings of the Corporation's bank
subsidiaries based on their strong financial condition and good operating
performance.
According to Standard & Poor's, upon completion of the Security acquisition,
the Corporation's senior debt and long-term counterparty rating may go to
single-A from A-plus, and the subordinated debt rating to A-minus from
single-A; M&I Capital Trust A's preferred stock rating will likely go to
BBB-plus from A-minus.
None of the other rating agencies made similar announcements. The Corporation
does not anticipate that such announcement will have an adverse impact on its
ability to issue debt or materially affect its ability to issue debt at
competitive rates.
<PAGE>
<PAGE>
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K
- -----------------------------------------
A. Exhibits:
Exhibit 11 - 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:
On March 17, 1997, the Corporation filed a report on Form 8-K, reporting
the announcement that Marshall and Ilsley Corporation and Security
Capital Corporation ("Security") have entered into an Agreement and Plan
of Merger dated as of March 14, 1997 providing for the merger of Security
with and into the Corporation.
On March 31, 1997 the Corporation filed a report on Form 8-K to disclose
that Standard & Poor's announced that it had placed the Marshall & Ilsley
Corporation and the preferred stock rating of its subsidiary, M&I Capital
Trust A, on Credit Watch following its announced acquisition of Security
Capital Corporation.
<PAGE>
<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
May 14, 1997
<PAGE>
EXHIBIT 11
MARSHALL & ILSLEY CORPORATION
COMPUTATION OF EARNINGS PER SHARE
($000's except per share data)
Three Months Ended March 31,
----------------------------
PRIMARY 1997 1996
- ------- --------------------------
Earnings:
Net income $ 54,799 $ 46,155
============ ============
Shares:
Weighted average number of common shares
outstanding 88,838 93,077
Additional shares relating to:
Convertible preferred stock 5,776 3,833
Stock options outstanding at end
of each period and exercised
during each period (a) 1,522 1,282
Stock Repurchase Forward Agreement 249 --
------------ ------------
Total average primary shares outstanding 96,385 98,192
============ ============
EARNINGS PER SHARE:
Primary $ 0.57 $ 0.47
============ ============
FULLY DILUTED
- -------------
Earnings:
Net income $ 54,799 $ 46,155
Add: Interest on convertible notes,
net of income tax effect 232 465
------------ ------------
$ 55,031 $ 46,620
============ ============
Shares:
Weighted average number of common shares
outstanding 88,838 93,077
Additional shares relating to:
Convertible preferred stock 5,776 3,833
Stock options outstanding at end
of each period and exercised
during each period (b) 1,524 1,335
Assumed conversion of convertible notes 1,901 3,844
Stock Repurchase Forward Agreement 249 --
------------ ------------
Total average fully diluted shares outstanding 98,288 102,089
============ ============
EARNINGS PER SHARE:
Fully Diluted $ 0.56 $ 0.46
============ ============
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
($000's)
<TABLE>
<CAPTION>
Three
Months
Ended
March Years Ended December 31,
31, -----------------------------------------------------
Earnings: 1997 1996 1995 1994 1993 1992
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Earnings before income taxes, extraordinary
items and cumulative effect of changes
in accounting principles $ 82,159 $ 313,141 $ 299,879 $ 167,803 $ 264,584 $ 231,792
Fixed charges, excluding interest on deposits 36,131 113,515 108,683 77,074 47,905 50,687
--------- --------- --------- --------- --------- ---------
Earnings including fixed charges but
excluding interest on deposits 118,290 426,656 408,562 244,877 312,489 282,479
Interest on deposits 94,309 360,838 331,734 255,861 272,100 334,443
--------- --------- --------- --------- --------- ---------
Earnings including fixed charges and
interest on deposits $ 212,599 $ 787,494 $ 740,296 $ 500,738 $ 584,589 $ 616,922
========= ========= ========= ========= ========= =========
Fixed Charges:
Interest Expense:
Short-term borrowings $ 23,823 $ 62,071 $ 47,740 $ 39,681 $ 18,010 $ 17,606
Long-term borrowings 10,149 42,808 53,709 30,537 23,088 26,439
One-third of rental expense for all operating
leases (the amount deemed representative
of the interest factor) 2,159 8,636 7,234 6,856 6,807 6,642
--------- --------- --------- --------- --------- ---------
Fixed charges excluding interest on deposits 36,131 113,515 108,683 77,074 47,905 50,687
Interest on deposits 94,309 360,838 331,734 255,861 272,100 334,443
--------- --------- --------- --------- --------- ---------
Fixed charges including interest on deposits $ 130,440 $ 474,353 $ 440,417 $ 332,935 $ 320,005 $ 385,130
========= ========= ========= ========= ========= =========
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits 3.27 x 3.76 x 3.76 x 3.18 x 6.52 x 5.57 x
Including interest on deposits 1.63 x 1.66 x 1.68 x 1.50 x 1.83 x 1.60 x
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1997
<CASH> 683,073
<INT-BEARING-DEPOSITS> 104,515
<FED-FUNDS-SOLD> 108,776
<TRADING-ASSETS> 42,076
<INVESTMENTS-HELD-FOR-SALE> 2,977,094
<INVESTMENTS-CARRYING> 812,122
<INVESTMENTS-MARKET> 813,497
<LOANS> 9,576,716
<ALLOWANCE> 154,599
<TOTAL-ASSETS> 14,890,216
<DEPOSITS> 10,835,655
<SHORT-TERM> 2,058,572
<LIABILITIES-OTHER> 367,776
<LONG-TERM> 348,042
0
685
<COMMON> 99,494
<OTHER-SE> 1,179,992
<TOTAL-LIABILITIES-AND-EQUITY> 14,890,216
<INTEREST-LOAN> 194,946
<INTEREST-INVEST> 60,099
<INTEREST-OTHER> 2,878
<INTEREST-TOTAL> 257,923
<INTEREST-DEPOSIT> 94,309
<INTEREST-EXPENSE> 128,281
<INTEREST-INCOME-NET> 129,642
<LOAN-LOSSES> 4,311
<SECURITIES-GAINS> 803
<EXPENSE-OTHER> 180,767
<INCOME-PRETAX> 82,159
<INCOME-PRE-EXTRAORDINARY> 54,799
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 54,799
<EPS-PRIMARY> 0.57
<EPS-DILUTED> 0.56
<YIELD-ACTUAL> 4.05
<LOANS-NON> 62,576
<LOANS-PAST> 7,517
<LOANS-TROUBLED> 1,736
<LOANS-PROBLEM> 71,829
<ALLOWANCE-OPEN> 155,895
<CHARGE-OFFS> 6,854
<RECOVERIES> 1,247
<ALLOWANCE-CLOSE> 154,599
<ALLOWANCE-DOMESTIC> 154,599
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
