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 Quarter Ended March 31, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-5127
MERCANTILE BANKSHARES CORPORATION
(Exact name of registrant as specified in its charter)
Maryland 52-0898572
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2 Hopkins Plaza, Baltimore, Maryland 21201
(Address of principal executive offices)
(Zip Code)
(410) 237-5900
(Registrant's telephone number, including area code)
(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 .
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practical date.
As of April 30, 1994, registrant had outstanding 45,865,760
shares of Common Stock.
1
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
(a) Published Financial Statements, as required by Rule
10-01 of Regulation S-X, are set forth on pages
4 thru 7 of Exhibit 20, attached hereto and
incorporated herein.
Note - Commitments:
Various commitments to extend credit (lines of credit)
are made in the normal course of banking business. At
March 31, 1994, total unused lines of credit approximated
$1,533,568,300. In addition, letters of credit are
issued for the benefit of customers by affiliated banks.
Outstanding letters of credit were $99,937,700 at
March 31, 1994.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
(a) Management's Discussion and Analysis of Financial
Condition and Results of Operations as required by
Item 303 of Regulation S-K is included on page 8 of
Exhibit 20, attached hereto and incorporated herein.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits -
Exhibit 20 - Financial Information. See Part I
(b) No forms 8-K filed
2
<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.
MERCANTILE BANKSHARES CORPORATION
H. Furlong Baldwin
Chairman of the Board
Kenneth A. Bourne, Jr.
Exec. Vice President and Treasurer
MERCANTILE BANKSHARES CORPORATION
FIRST QUARTER REPORT
1994
FOR THE THREE MONTHS ENDED MARCH 31, 1994
MERCANTILE BANKSHARES CORPORATION
TO OUR SHAREHOLDERS:
Net income for the first quarter of 1994 was $.46 per share, an increase of 2%
over the $.45 per share for the comparable period last year. Consolidated net
income for the first three months of 1994 increased 4% to $21,221,000 compared
to $20,492,000 for 1993.
At March 31, 1994, total assets were $5,548,279,000, an increase of 4% over
the $5,320,860,000 at March 31, 1993 and total stockholders' equity was
$664,713,000, an increase of 8% over the comparable amount last year. For more
detailed analyses of quarterly results, please see Management's Discussion on
page 8.
Certain key ratios measure earnings and financial strength. The annualized
return on average total assets was 1.6% and the annualized return on average
equity was 13.0% for the quarter. Average equity as a percentage of average
total assets was 12.0%. The allowance for loan losses was 2.6% of total loans
at the end of the quarter.
H. Furlong Baldwin
Chairman of the Board
Two Hopkins Plaza/P.O. Box 1477/Baltimore, Maryland 21203/(410)237-5900
___________________________________________________________________________
CONTENTS
Principal Affiliates ............................ 2
Consolidated Financial Summary .................. 3
Consolidated Balance Sheets ..................... 4
Statement of Consolidated Income ................ 5
Statement of Consolidated Cash Flows ............ 6
Statement of Changes in Consolidated
Stockholders' Equity ............................ 7
Notes to Consolidated Financial Statements ...... 7
Management's Discussion and Analysis of
Financial Condition and Results of Operations ... 8
Officers and Directors .......................... 10
Corporate Information ........................... 11
1
<PAGE>
PRINCIPAL
AFFILIATES
1. THE ANNAPOLIS
BANKING AND
TRUST CO.
Robert E. Henel, Jr.,
President and CEO
Main Street & Church
Circle
Annapolis, Md. 21401
410/268-3366
2. BALTIMORE
TRUST CO.
Robert E. Dickerson,
President and CEO
One West Church Street
Selbyville, De. 19975
302/436-8236
3. BANK OF SOUTHERN
MARYLAND
Wesley E. Hughes, Jr.,
President and CEO
304 Charles Street
LaPlata, Md. 20646
301/934-1000
4. CALVERT BANK AND
TRUST CO.
Harold J. Kahl,
Chairman, President and CEO
Calvert Village
Shopping Center
P.O. Box 590
Prince Frederick, Md.
20678
410/535-3535
5. THE CHESTERTOWN
BANK OF
MARYLAND
R. Raymond Tarrach,
President and CEO
211 High Street
Chestertown, Md. 21620
410/778-2400
6. THE CITIZENS
NATIONAL BANK
Martin A. Sharpless,
President and CEO
Fourth & Main Streets
Laurel, Md. 20707
301/725-3100
7. COUNTY BANKING
& TRUST CO.
S. Dell Foxx,
President and CEO
123 North Street
P.O. Box 100
Elkton, Md. 21921
410/398-2600
8. THE EASTVILLE BANK
Robert L. Simpson,
President and CEO
16485 Lankford Highway
P.O. Box 7
Eastville, Va. 23347
804/678-5187
9. FARMERS &
MERCHANTS BANK--
EASTERN SHORE
H. B. Rew, Jr.,
President and CEO
25275 Lankford Highway
P.O. Box 623
Onley, Va. 23418
804/787-4111
10. THE FIDELITY BANK
C. Joseph Cunningham, III,
President and CEO
59 East Main Street
Frostburg, Md. 21532
301/689-1111
11. THE FIRST NATIONAL
BANK OF ST. MARY'S
John A. Candela,
President and CEO
5 East Park Avenue
P.O. Box 655
Leonardtown, Md.
20650
301/475-8081
12. THE FOREST HILL
STATE BANK
Paul E. Peak,
President and CEO
130 South Bond Street
Bel Air, Md. 21014
410/838-6131
13. FREDERICKTOWN
BANK & TRUST CO.
Robert E. Gearinger,
President and CEO
30 North Market Street
Frederick, Md. 21701
301/662-8231
14. MERCANTILE-SAFE
DEPOSIT &
TRUST CO.
H. Furlong Baldwin,
Chairman and CEO
2 Hopkins Plaza
Baltimore, Md. 21201
410/237-5900
15. PENINSULA BANK
Jeffrey F. Turner,
President and CEO
11738 Somerset
Avenue
P.O. Box 219
Princess Anne, Md.
21853
410/651-2400
16. THE PEOPLES BANK
OF MARYLAND
Jeffrey N. Heflebower,
President and CEO
205 Market Street
Denton, Md. 21629
410/479-2600
17. POTOMAC VALLEY
BANK
R. Dennis Homberg,
President and CEO
702 Russell Avenue
Gaithersburg, Md.
20877
301/963-7600
18. ST. MICHAELS BANK
William W. Duncan, Jr.,
President and CEO
213 Talbot Street
P.O. Box 70
St. Michaels, Md. 21663
410/745-5091
19. WESTMINSTER BANK
AND TRUST CO.
Ferdinand A. Ruppel, Jr.,
President and CEO
71 East Main Street
Westminster, Md. 21157
410/848-9300
_____________________________
MERCANTILE
MORTGAGE
CORPORATION
Paul W. Parks,
President and CEO
200 East Redwood
Street
Baltimore, Md. 21202
410/347-8940
2
<PAGE>
<TABLE>
CONSOLIDATED FINANCIAL SUMMARY
<CAPTION>
For the 3 Months Ended
March 31,
% Increase
(Dollars in thousands, except per share data) 1994 1993 (Decrease)
- - -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING RESULTS
Net interest income........................... $58,841 $58,273 1%
Net interest income--taxable equivalent....... 59,584 59,140 1
Provision for loan losses..................... 1,822 3,253 (44)
Net income.................................... 21,221 20,492 4
-----------------------------------------------------------------------------
PER COMMON SHARE DATA
Net income.................................... $ .46 $ .45 2%
Dividends paid................................ .17 .15 13
Book value at period end...................... 14.48 13.37 8
Market value at period end.................... 18 1/4 23 1/2 (22)
Market range:
High........................................ 21 23 7/8 (12)
Low......................................... 18 1/4 20 7/8 (13)
-----------------------------------------------------------------------------
AVERAGE CONSOLIDATED BALANCE SHEETS
Total loans................................... $3,545,000 $3,477,500 2%
Total earning assets.......................... 5,219,100 4,988,200 5
Total assets.................................. 5,520,700 5,291,700 4
Total deposits................................ 4,434,600 4,338,200 2
Stockholders' equity.......................... 662,800 608,800 9
-----------------------------------------------------------------------------
RATIOS (Net income annualized)
Return on average assets...................... 1.56% 1.57% (1)%
Return on average equity...................... 12.98 13.65 (5)
Average equity to average assets.............. 12.01 11.50 4
Net interest rate spread--taxable equivalent.. 3.87 4.03 (4)
Effect of noninterest-bearing funds--taxable
equivalent.................................... .76 .78 (3)
Net interest margin on earning assets--taxable
equivalent.................................... 4.63 4.81 (4)
Provision for loan losses (annualized) to
period end loans.............................. .21 .38 (45)
Net charge-offs (annualized) to period end
loans......................................... .01 .17 (94)
Non-performing loans to period end loans...... 1.55 2.13 (27)
Allowance for loan losses to period end loans. 2.57 2.56
Allowance for loan losses to non-performing
loans......................................... 166.18 120.36 38
Other real estate owned to period end loans
and OREO...................................... .54 .58 (7)
Non-performing assets to period end loans and
OREO.......................................... 2.08 2.70 (23)
-----------------------------------------------------------------------------
<FN>
See notes to consolidated financial statements
</TABLE>
3
<PAGE>
CONSOLIDATED BALANCE SHEETS
MARCH 31, December 31,
(Dollars in thousands, except per share data) 1994 1993
- - ------------------------------------------------------------------------------
ASSETS
Cash and due from banks................. $ 195,598 $ 161,526
Interest-bearing deposits in other banks 600 600
Investment securities:
U.S. Treasury and government agencies
Held-to-maturity--market value of
$1,190,474 (1994) and $1,700,347
(1993)................................ 1,192,191 1,676,498
Available-for-sale at fair value...... 449,943
States and political subdivisions
Held-to-maturity--market value of
$2,756 (1994) and $3,633 (1993)....... 2,668 3,498
Other investments
Held-to-maturity--market value of
$7,656 (1994) and $7,074 (1993)....... 5,155 4,422
Available-for-sale at fair value...... 1,115
----------- -----------
Total investment securities 1,651,072 1,684,418
----------- -----------
Federal funds sold...................... 750 550
Securities purchased under resale
agreements.............................. 6
Loans................................... 3,567,203 3,577,420
Less: allowance for loan losses......... (91,600) (89,827)
----------- -----------
Loans, net................. 3,475,603 3,487,593
----------- -----------
Bank premises and equipment, less
accumulated depreciation of
$64,040 (1994) and $59,937 (1993)..... 68,048 67,940
Other real estate owned................. 19,402 21,163
Excess cost over equity in affiliated
banks, net.............................. 19,710 19,993
Other assets............................ 117,490 110,225
----------- -----------
Total assets............... $5,548,279 $5,554,008
----------- -----------
----------- -----------
LIABILITIES
Deposits:
Noninterest-bearing deposits.......... $ 858,422 $ 914,773
Interest-bearing deposits............. 3,634,684 3,609,191
----------- -----------
Total deposits............ 4,493,106 4,523,964
Short-term borrowings................... 299,646 292,096
Accrued expenses and other liabilities.. 58,679 50,702
Long-term debt.......................... 32,135 32,350
----------- -----------
Total liabilities......... 4,883,566 4,899,112
----------- -----------
STOCKHOLDERS' EQUITY
Preferred stock, no par value;
authorized 2,000,000 shares; issued and
outstanding--None
Common stock, $2 par value; authorized
67,000,000 shares;
issued 45,908,886 shares in 1994 and
45,997,159 shares in 1993............. 91,818 91,994
Capital surplus......................... 27,329 29,230
Retained earnings....................... 547,067 533,672
Unrealized gains (losses) on securities. (1,501)
----------- -----------
Total stockholders' equity 664,713 654,896
----------- -----------
Total liabilities and stockholders'
equity............................. $5,548,279 $5,554,008
----------- -----------
----------- -----------
[FN]
See notes to consolidated financial statements
4
<PAGE>
STATEMENT OF CONSOLIDATED INCOME
For the 3 Months Ended
March 31,
(Dollars in thousands, except per share data) 1994 1993
- - ------------------------------------------------------------------------------
INTEREST INCOME
Interest and fees on loans.............. $68,712 $70,321
----------- -----------
Interest and dividends on investment
securities:
Taxable interest income............... 21,411 21,367
Tax-exempt interest income............ 46 92
Dividends............................. 51 66
Other investment income............... 5 7
----------- -----------
21,513 21,532
----------- -----------
Other interest income................... 41 158
----------- -----------
Total interest income..... 90,266 92,011
----------- -----------
INTEREST EXPENSE
Interest on deposits.................... 28,444 31,518
Interest on short-term borrowings....... 2,445 1,927
Interest on long-term debt.............. 536 293
----------- -----------
Total interest expense..... 31,425 33,738
----------- -----------
NET INTEREST INCOME..................... 58,841 58,273
Provision for loan losses............... 1,822 3,253
----------- -----------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES............................ 57,019 55,020
----------- -----------
NONINTEREST INCOME
Trust division services................. 10,512 9,954
Rental income........................... 2,165 1,852
Service charges on deposit accounts..... 3,564 3,708
Other fees.............................. 4,318 3,662
Investment securities gains and (losses) 49 (82)
Other income............................ 3,706 472
----------- -----------
Total noninterest income................ 24,314 19,566
----------- -----------
NONINTEREST EXPENSES
Salaries................................ 19,971 19,147
Employee benefits....................... 6,083 5,276
Net occupancy expense of bank premises.. 4,360 3,782
Furniture and equipment expenses........ 3,301 2,890
Communications and supplies............. 2,205 2,247
FDIC insurance premium expense.......... 2,615 2,556
Other expenses.......................... 7,922 5,487
----------- -----------
Total noninterest expenses 46,457 41,385
----------- -----------
Income before income taxes.............. 34,876 33,201
Applicable income taxes................. 13,655 12,709
----------- -----------
NET INCOME.............................. $21,221 $20,492
----------- -----------
----------- -----------
NET INCOME PER SHARE OF COMMON STOCK(2). $.46 $.45
----------- -----------
----------- -----------
[FN]
See notes to consolidated financial statements
5
<PAGE>
STATEMENT OF CONSOLIDATED CASH FLOWS
For the 3 Months Ended
Increase (decrease) in cash and cash equivalents March 31,
(Dollars in thousands) 1994 1993
- - -------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Interest and fees on loans.............. $ 68,747 $ 70,106
Interest and dividends on investment
securities.............................. 21,270 20,885
Other interest income................... 38 234
Noninterest income...................... 24,275 19,367
Interest paid........................... (32,975) (35,638)
Noninterest expenses paid............... (52,531) (39,098)
Income taxes paid....................... (709) (2,085)
----------- -----------
Net cash provided by operating
activities.......................... 28,115 33,771
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sales of investment
securities held-to-maturity............. 2,516
Proceeds from maturities of investment
securities held-to-maturity............. 88,097 75,229
Proceeds from sales of investment
securities available-for-sale........... 91,094
Purchase of investment securities held-
to-maturity............................. (58,152) (50,632)
Purchase of investment securities
available-for-sale...................... (90,098)
Net (increase) decrease in customer
loans................................... 10,464 (28,856)
Capital expenditures.................... (1,816) (1,463)
----------- -----------
Net cash provided by (used in)
investing activities................ 39,589 (3,206)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in noninterest-bearing
deposits................................ (56,351) (103,940)
Net increase in NOW and savings accounts 2,407 12,063
Net increase (decrease) in certificates
of deposit.............................. 23,086 (41,729)
Net increase (decrease) in short-term
borrowings.............................. 7,550 (26,125)
Repayment of long-term debt............. (215) (213)
Proceeds from issuance of shares........ 1,216 1,300
Repurchase of common shares............. (3,293)
Dividends paid.......................... (7,826) (6,874)
----------- -----------
Net cash used in financing
activities.......................... (33,426) (165,518)
----------- -----------
Net increase (decrease) in cash and cash
equivalents............................. 34,278 (134,953)
Cash and cash equivalents at beginning
of period............................... 162,676 334,716
----------- -----------
Cash and cash equivalents at end of
period.................................. $196,954 $ 199,763
----------- -----------
----------- -----------
For the 3 Months Ended
Reconciliation of net income to net cash March 31,
provided by operating activities
(Dollars in thousands) 1994 1993
- - -------------------------------------------------------------------------------
Net income.............................. $21,221 $20,492
----------- -----------
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization......... 1,708 1,656
Provision for loan losses............. 1,822 3,253
Write-down of other real estate owned. 1,465 99
Investment securities (gains) and
losses................................ (49) 82
Amortization of excess cost over
equity in affiliates.................. 283 283
Increase in interest receivable....... (211) (786)
(Increase) decrease in other
receivables........................... 10 (281)
(Increase) decrease in other assets... (7,062) 3,081
Decrease in interest payable.......... (1,550) (1,900)
Decrease in accrued expenses.......... (2,468) (2,832)
Increase in taxes payable............. 12,946 10,624
----------- -----------
Total adjustments.......... 6,894 13,279
----------- -----------
Net cash provided by operating
activities.............................. $28,115 $33,771
----------- -----------
----------- -----------
[FN]
See notes to consolidated financial statements
6
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31, 1994 AND 1993
Unrealized
Gains
Common Capital Retained (Losses) on
(Dollars in thousands, except per share data) Stock Surplus Earnings Securities
- - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1992.................. $61,035 $56,452 $480,641
Net income.................................. 20,492
Cash dividends paid:
Common stock ($.15 per share)............. (6,874)
Issuance of 13,431 shares for dividend
reinvestment and stock purchase plan...... 27 425
Issuance of 3,963 shares under exercise
of stock appreciation rights.............. 8 123
Issuance of 2,537 shares for employee stock
purchase dividend reinvestment plan....... 5 79
Issuance of 29,831 shares for employee stock
option plan................................. 60 573
--------- --------- ---------
BALANCE, MARCH 31, 1993..................... $61,135 $57,652 $494,259
--------- --------- ---------
--------- --------- ---------
BALANCE, DECEMBER 31, 1993.................. $91,994 $29,230 $533,672
Unrealized gains (losses) on securities at
January 1, 1994............................. $1,105
Net income.................................. 21,221
Cash dividends paid:
Common stock ($.17 per share)............. (7,826)
Issuance of 29,851 shares for dividend
reinvestment and stock purchase plan........ 60 461
Issuance of 5,040 shares for employee stock
purchase dividend reinvestment plan......... 10 88
Issuance of 41,836 shares for employee stock
option plan................................. 84 513
Purchase of 165,000 shares under stock
repurchase plan............................. (330) (2,963)
Change in unrealized gains (losses) on
securities.................................. (2,606)
--------- --------- --------- -------
BALANCE, MARCH 31, 1994..................... $91,818 $27,329 $547,067 $(1,501)
--------- --------- --------- -------
--------- --------- --------- -------
</TABLE>
_______________________________________________________________________________
NOTES
1) The statements include the accounts of the Corporation and all of its
affiliates, with all significant intercompany transactions eliminated, and
in the opinion of management, include all adjustments necessary for a fair
presentation of the results for the interim period. All such adjustments
are of a normal recurring nature. Effective with the beginning of the 1994
fiscal year, the Corporation adopted the provisions of FASB Statement No.
115, Accounting for Certain Investments in Debt and Equity Securities.
Implementation of this pronouncement did not have a material effect on the
financial statements of the Company. In view of the changing conditions in
the national economy, the effect of actions taken by regulatory authorities
and normal seasonal factors, the results for the interim period are not
necessarily indicative of annual performance.
2) Per share amounts are based on the weighted average number of common
shares outstanding during the period or 45,986,042 shares for 1994 and
45,817,762 shares for 1993.
3) In September 1993, the Company declared a three-for-two stock split in
the form of a stock dividend. Average shares and per share amounts have been
adjusted to give effect to the dividend.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Net income for the first quarter of 1994 was $.46 per share, an increase of
2% over the $.45 per share for the comparable period last year. Per share
amounts are based on the weighted average number of common shares outstanding
of 45,986,042 for 1994 and 45,817,762 for 1993.In September 1993, the Company
declared a three-for-two stock split in the form of a stock dividend. Average
shares and per share amounts have been adjusted to give effect to the
dividend.
Net interest income for the first three months of 1994 was 1% higher than
the amount for the comparable period in 1993 due to an increase of 5% in
average earning assets which more than offset a 4% decline in net interest
margin. Total noninterest income increased 24% due primarily to a $3,137,000
gain on the sale of an asset which is included in other income. Total
noninterest expenses, excluding the provision for loan losses, for the first
quarter of 1994 increased 12% over the comparable period in 1993 due largely
to a $1,365,000 increase in charges for reserves against the carrying value of
other real estate owned which is included in other expenses. The provision for
loan losses for the first quarter of 1994 was $1,822,000 compared to
$3,253,000 for the first quarter of 1993.
During the quarter ended March 31, 1994, non-performing assets decreased
$11,492,000 to $74,523,000. Non-performing loans, one of the components of
non-performing assets, decreased $9,731,000 and other real estate owned, the
other component, decreased $1,761,000. Net charge-offs were $49,000 in the
first quarter of 1994 and $1,453,000 in the comparable quarter of 1993. The
allowance for loan losses was $91,600,000 at March 31, 1994 or 166% of non-
performing loans.
Average total deposits for the first three months were $4,434,600,000, up 2%
over the $4,338,200,000 for the comparable period in 1993. Average total loans
for the first three months of 1994 were $3,545,000,000 which was 2% higher
than in 1993.
8
<PAGE>
<TABLE>
ANALYSIS OF INTEREST RATES AND INTEREST DIFFERENTIALS
The following table presents the distribution of the average consolidated
balance sheets, interest income/expense and annualized yields earned and rates
paid through the first three months of the year.
<CAPTION>
1994 1993
----------------------------------------- ----------------------------------------
Average Income*/ Yield*/ Average Income*/ Yield*/
(Dollars in thousands) Balance Expense Rate Balance Expense Rate
- - ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Earning assets
Loans:
Commercial.......................... $1,129,300 $20,245 7.3% $1,090,600 $20,036 7.5%
Mortgage and construction........... 1,667,700 33,953 8.3 1,613,100 34,366 8.6
Consumer............................ 748,000 15,211 8.2 773,800 16,708 8.8
---------- -------- ---------- --------
Total loans....................... 3,545,000 69,409 7.9 3,477,500 71,110 8.3
---------- -------- ---------- --------
Federal funds sold.................. 2,700 21 3.2 8,200 59 2.9
Securities purchased under resale
agreements.......................... 400 8 8.1 8,700 82 3.8
Securities:
Taxable securities
U.S. Treasury securities........ 1,661,600 21,399 5.2 1,479,000 21,299 5.8
U.S. Agency and other securities 600 12 8.1 3,300 68 8.4
Other stocks and bonds.......... 5,300 76 5.8 4,900 99 8.2
Tax-exempt securities
States and political
subdivisions.................... 2,900 72 10.1 5,700 144 10.2
---------- -------- ---------- --------
Total securities.............. 1,670,400 21,559 5.2 1,492,900 21,610 5.9
---------- -------- ---------- --------
Interest-bearing deposits in other
banks............................... 600 12 8.1 900 17 7.7
---------- -------- ---------- --------
Total earning assets.......... 5,219,100 91,009 7.1 4,988,200 92,878 7.5
-------- --------
Cash and due from banks............... 180,000 180,800
Bank premises and equipment, net...... 68,200 65,300
Other assets.......................... 144,100 146,600
Less: allowance for loan losses....... (90,700) (89,200)
---------- ----------
Total assets.................. $5,520,700 $5,291,700
---------- ----------
---------- ----------
Interest-bearing liabilities
Deposits:
Savings deposits.................. $2,329,300 14,801 2.6 $2,237,500 16,468 3.0
Time deposits..................... 1,289,000 13,643 4.3 1,350,800 15,050 4.5
---------- -------- ---------- --------
Total interest-bearing
deposits...................... 3,618,300 28,444 3.2 3,588,300 31,518 3.6
Short-term borrowings............... 336,600 2,445 2.9 279,300 1,927 2.8
Long-term debt...................... 32,200 536 6.8 15,000 293 7.9
---------- -------- ---------- --------
Total interest-bearing funds.. 3,987,100 31,425 3.2 3,882,600 33,738 3.5
-------- --------
Noninterest-bearing deposits.......... 816,300 749,900
Other liabilities and accrued expenses 54,500 50,400
---------- ----------
Total liabilities............. 4,857,900 4,682,900
Stockholders' equity.................. 662,800 608,800
---------- ----------
Total liabilities and
stockholders' equity.......... $5,520,700 $5,291,700
---------- ----------
---------- ----------
Net interest income................... $59,584 $59,140
-------- --------
-------- --------
Net interest rate spread.............. 3.9% 4.0%
Effect of noninterest-bearing funds... .7 .8
---- ----
Net interest margin on earning assets. 4.6% 4.8%
---- ----
---- ----
Taxable-equivalent adjustment included
in:
Loan income......................... $ 697 $ 789
Investment securities income........ 46 78
-------- --------
Total......................... $ 743 $ 867
-------- --------
-------- --------
<FN>
*Presented on a tax equivalent basis using the statutory federal
corporate income tax rate of 35% for 1994 and 34% for 1993.
</TABLE>
9
<PAGE>
MERCANTILE BANKSHARES CORPORATION
OFFICERS
H. Furlong Baldwin
Chairman of the Board and Chief Executive Officer
Douglas W. Dodge
Vice Chairman of the Board
Edward K. Dunn, Jr.
President
Kenneth A. Bourne, Jr.
Executive Vice President and Treasurer
Hugh W. Mohler
Executive Vice
President
John A. O'Connor, Jr.
Senior Vice President and Secretary
Robert W. Johnson
Senior Vice President
O. James Talbott, II
Senior Vice President
Brian B. Topping
Vice President
Jerry F. Graham
Vice President and
Controller
DIRECTORS
H. Furlong Baldwin
Chairman of the Board and Chief Executive Officer of Mercantile Bankshares
Corporation and Chairman of the Board and Chief Executive Officer of
Mercantile-Safe Deposit & Trust Company
Thomas M. Bancroft, Jr.
Former Chairman of the Board and Chief Executive Officer of The New York
Racing Association
Richard O. Berndt
Partner in the law firm of Gallagher, Evelius & Jones
James A. Block, M.D.
President and Chief Executive Officer of Johns Hopkins Health System and The
Johns Hopkins Hospital
George L. Bunting, Jr.
President and Chief Executive Officer of Bunting Management Group
Douglas W. Dodge
Vice Chairman of the Board of Mercantile Bankshares Corporation and
President and Chief Operating Officer of Mercantile-Safe Deposit & Trust
Company
Edward K. Dunn, Jr.
President of Mercantile Bankshares Corporation and a Vice Chairman of the
Board of Mercantile-Safe Deposit & Trust Company
B. Larry Jenkins
Chairman of the Board, President and Chief Executive Officer of Monumental
Life Insurance Company and a Senior Vice President of AEGON USA, Inc.
Robert D. Kunisch
Chairman of the Board, President and Chief Executive Officer of PHH
Corporation
William J. McCarthy
Principal of William J. McCarthy, P.C., a Partner in the law firm of
Venable, Baetjer and Howard
Morris W. Offit
Chairman of the Board and Chief Executive Officer of OFFITBANK
Christian H. Poindexter
Chairman of the Board and Chief Executive Officer of Baltimore Gas &
Electric Company
William B. Potter
Former Chairman of the Board, President and Chief Executive Officer of
Preston Corporation
William C. Richardson
President of The Johns Hopkins University
Bishop L. Robinson
Secretary of the Department of Public Safety and Correctional Services for
the State of Maryland
Donald J. Shepard
Chairman of the Board, President and Chief Executive Officer of AEGON USA,
Inc.
Brian B. Topping
Vice President of Mercantile Bankshares Corporation and a Vice Chairman of
the Board of Mercantile-Safe Deposit & Trust Company
Jay M. Wilson
Former President
of Steeltin Can
Corporation
Calman J. Zamoiski, Jr.
Chairman of the Board of Independent Distributors, Incorporated
10
<PAGE>
CORPORATE INFORMATION
STRUCTURE/STRATEGY
Mercantile Bankshares Corporation is a multi-bank holding company with
nineteen affiliate banks and a mortgage banking company. Each member bank
operates as a community bank, with its own name, management, Board of
Directors and tradition of community service.
While operating as a community bank, with a high degree of local autonomy and
community identification, each affiliate is able to offer the more
sophisticated services and outstanding financial strength of a major
banking organization.
Our policy, across the affiliate system, is to establish ongoing customer
relationships founded on service and to focus on those particular services we
know how to perform well.
PERSONAL BANKING
The banking affiliates of Mercantile Bankshares Corporation have 143 retail
banking offices providing personal banking services. Services include deposit
vehicles such as checking accounts, NOW accounts, Money Market Deposit
Accounts, Certificates of Deposit and Individual Retirement Accounts. Loans
are made to individuals to meet a variety of consumer needs.
CORPORATE BANKING
Each of the Corporation's affiliates pursues a commercial banking program
serving local businesses. Specialized corporate banking services are centered
at Mercantile-Safe Deposit & Trust Company. Corporate banking services include
the making of various types of commercial and real estate loans, accepting
deposits, cash management and short-term money market investing.
TRUST AND INVESTMENT
The Trust Division of Mercantile-Safe Deposit & Trust Company provides
services to individuals, corporations and non-profit institutions. Services
for individuals include investment management, estate settlement, living and
testamentary trusts and custody of securities. Employee benefit plans, master
and directed trusteeship and corporate financial services are provided to
businesses. Endowment trusts are managed for non-profit institutions. The
Trust Division is also investment advisor to M.S.D.&T. Funds, Inc., which
provides a series of open-ended, no-load mutual funds.
MORTGAGE BANKING
Through offices in Maryland and Delaware, Mercantile Mortgage Corporation
generates and services real estate mortgage loans and construction loans, as
principal and as agent. Residential and commercial real estate appraisals are
offered through an appraisal subsidiary.
_______________________________________________________________________________
STOCK INFORMATION
The common stock of Mercantile Bankshares Corporation is traded over-the-
counter in the NASDAQ National Market System under the symbol MRBK.
AUTOMATIC DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
Mercantile Bankshares Corporation offers its shareholders of common stock a
Plan whereby they may automatically invest their cash dividends in Mercantile
stock at a price which is 5% less than the market price on the dividend
payment date. Plan participants may also make additional cash payments to
purchase stock through the Plan at the market price. Mercantile Bankshares
Corporation absorbs all fees and transaction costs. Shareholders who wish to
enroll in the Plan should contact the Corporation's Transfer Agent.
DIVIDEND DISBURSING AGENT AND
TRANSFER AGENT FOR STOCK
Mercantile-Safe Deposit & Trust Company
Corporate Trust Department
2 Hopkins Plaza, P.O. Box 2258
Baltimore, Maryland 21203
410/237-5211
11
<PAGE>
APPENDIX
Appearing at the top of page 2 of the First Quarter Report to Shareholders next
to the heading "PRINCIPAL AFFILIATES", is the outline of a map of the state of
Maryland, the eastern shore of Virginia and southern Delaware. Shown in the
approximate geographic location of each bank affiliate's headquarters are the
numbers 1 through 19 which correspond to the numerical listing of affiliates
contained on the same page.