UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM 10-Q
(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, 1996
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 (Zip code)
offices)
(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, 1996, registrant had outstanding 47,717,362 shares of Common
Stock.
PAGE 1
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)
MERCANTILE BANKSHARES CORPORATION
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
MARCH 31, December 31,
(Dollars in thousands, except per share data) 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Cash and due from banks........................................................ $ 262,923 $ 247,301
Interest-bearing deposits in other banks....................................... 300 100
Investment securities:
U.S. Treasury and government agencies
Available-for-sale at fair value......................................... 1,515,356 1,535,418
States and political subdivisions
Held-to-maturity--market value of $15,235 (1996) and $15,353 (1995)...... 15,219 15,233
Available-for-sale at fair value......................................... 35 45
Other investments
Held-to-maturity--market value of $5,740 (1996) and $5,359 (1995)........ 5,734 5,352
Available-for-sale at fair value......................................... 16,148 16,206
----------------- -------------------
Total investment securities............................................ 1,552,492 1,572,254
----------------- -------------------
Federal funds sold............................................................. 102,804 26,081
Securities purchased under resale agreement.................................... 49,982
Loans.......................................................................... 4,319,371 4,301,270
Less: allowance for loan losses................................................ (94,997) (91,398)
----------------- -------------------
Loans, net............................................................. 4,224,374 4,209,872
----------------- -------------------
Bank premises and equipment, less accumulated depreciation of
$79,114 (1996) and $77,742 (1995)............................................ 79,129 78,363
Other real estate owned, net................................................... 2,507 2,858
Excess cost over equity in affiliated banks, net............................... 29,750 30,251
Other assets................................................................... 130,433 132,041
----------------- -------------------
Total assets........................................................... $6,384,712 $6,349,103
================= ===================
LIABILITIES
Deposits:
Noninterest-bearing deposits............................................... $ 948,183 $ 983,021
Interest-bearing deposits.................................................. 4,237,836 4,186,360
----------------- -------------------
Total deposits......................................................... 5,186,019 5,169,381
Short-term borrowings.......................................................... 292,364 281,642
Accrued expenses and other liabilities......................................... 89,907 78,631
Long-term debt................................................................. 25,375 25,623
----------------- -------------------
Total liabilities...................................................... 5,593,665 5,555,277
----------------- -------------------
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 47,793,665 shares in 1996 and 48,272,451 shares in 1995............... 95,588 96,545
Capital surplus................................................................ 55,882 66,107
Retained earnings.............................................................. 637,136 620,391
Unrealized gains (losses) on securities, net................................... 2,441 10,783
----------------- -------------------
Total stockholders' equity............................................. 791,047 793,826
----------------- -------------------
Total liabilities and stockholders' equity......................... $6,384,712 $6,349,103
================= ===================
See notes to consolidated financial statements
</TABLE>
PAGE 2
MERCANTILE BANKSHARES CORPORATION
<TABLE>
STATEMENT OF CONSOLIDATED INCOME
<CAPTION>
For the 3 Months Ended
March 31,
(Dollars in thousands, except per share data) 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INTEREST INCOME
Interest and fees on loans........................................................ $ 97,956 $ 90,629
---------------- ----------------
Interest and dividends on investment securities:
Taxable interest income......................................................... 22,008 20,715
Tax-exempt interest income...................................................... 182 165
Dividends....................................................................... 144 103
Other investment income......................................................... 146 62
---------------- ----------------
22,480 21,045
---------------- ----------------
Other interest income............................................................. 1,377 2
---------------- ----------------
Total interest income..................................................... 121,813 111,676
---------------- ----------------
INTEREST EXPENSE
Interest on deposits.............................................................. 42,815 36,862
Interest on short-term borrowings................................................. 3,603 4,958
Interest on long-term debt........................................................ 405 523
---------------- ----------------
Total interest expense.................................................... 46,823 42,343
---------------- ----------------
NET INTEREST INCOME............................................................... 74,990 69,333
Provision for loan losses......................................................... 3,399 1,440
---------------- ----------------
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES............................... 71,591 67,893
---------------- ----------------
NONINTEREST INCOME
Trust division services........................................................... 11,369 10,742
Rental income..................................................................... 2,301 2,318
Service charges on deposit accounts............................................... 3,888 3,908
Other fees........................................................................ 5,205 4,516
Investment securities gains and (losses).......................................... 66 (993)
Other income...................................................................... 298 130
---------------- ----------------
Total noninterest income.................................................. 23,127 20,621
---------------- ----------------
NONINTEREST EXPENSES
Salaries.......................................................................... 24,828 22,126
Employee benefits................................................................. 6,543 6,488
Occupancy expense of bank premises................................................ 4,812 4,353
Furniture and equipment expenses.................................................. 3,857 3,647
Communications and supplies....................................................... 2,517 2,432
FDIC insurance premium expense.................................................... 73 2,737
Other expenses.................................................................... 7,580 8,026
---------------- ----------------
Total noninterest expenses................................................ 50,210 49,809
---------------- ----------------
Income before income taxes........................................................ 44,508 38,705
Applicable income taxes........................................................... 16,775 14,497
---------------- ----------------
NET INCOME........................................................................ $ 27,733 $ 24,208
================ ================
NET INCOME PER SHARE OF COMMON STOCK (2).......................................... $.58 $.50
================ ================
See notes to consolidated financial statements
</TABLE>
PAGE 3
MERCANTILE BANKSHARES CORPORATION
<TABLE>
STATEMENT OF CONSOLIDATED CASH FLOWS
<CAPTION>
For the 3 Months Ended
Increase (decrease) in cash and cash equivalents March 31,
(Dollars in thousands) 1996 1995
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Interest and fees on loans........................................................ $ 97,611 $ 89,976
Interest and dividends on investment securities................................... 20,100 20,535
Other interest income............................................................. 1,437 27
Noninterest income................................................................ 20,105 22,157
Interest paid..................................................................... (48,271) (41,422)
Noninterest expenses paid......................................................... (36,722) (48,186)
Income taxes paid................................................................. (829) (4,105)
----------------- -----------------
Net cash provided by operating activities................................. 53,431 38,982
----------------- -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturities of investment securities held-to-maturity................ 48,536
Proceeds from sales of investment securities available-for-sale................... 33,441 71,721
Proceeds from maturities of investment securities available-for-sale.............. 156,941 28,819
Purchases of investment securities held-to-maturity............................... (382) (23,775)
Purchases of investment securities available-for-sale............................. (183,381) (13,157)
Net increase in customer loans.................................................... (18,166) (124,848)
Capital expenditures.............................................................. (2,744) (2,800)
Proceeds from sales of other real estate owned.................................... 587
----------------- -----------------
Net cash used in investing activities..................................... (13,704) (15,504)
----------------- -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net decrease in noninterest-bearing deposits...................................... (34,838) (56,272)
Net increase (decrease) in NOW and savings accounts............................... 16,071 (104,331)
Net increase in certificates of deposit........................................... 35,405 178,866
Net increase (decrease) in short-term borrowings.................................. 10,722 (36,995)
Repayment of long-term debt............................................... (248) (228)
Proceeds from issuance of shares.................................................. 1,305 752
Repurchase of common shares....................................................... (14,593) (10,267)
Dividends paid.................................................................... (10,988) (9,533)
----------------- -----------------
Net cash provided by (used in) financing activities....................... 2,836 (38,008)
----------------- -----------------
Net increase (decrease) in cash and cash equivalents.............................. 42,563 (14,530)
Cash and cash equivalents at beginning of period.................................. 323,464 257,146
----------------- -----------------
Cash and cash equivalents at end of period........................................ $366,027 $ 242,616
================= =================
For the 3 Months Ended
Reconciliation of net income to net cash provided by operating activities March 31,
(Dollars in thousands) 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------
Net income........................................................................ $27,733 $24,208
----------------- -----------------
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization................................................... 1,978 1,923
Provision for loan losses....................................................... 3,399 1,440
Write-down of other real estate owned........................................... 29 768
Investment securities (gains) and losses........................................ (66) 993
Amortization of excess cost over equity in affiliates........................... 501 283
Increase in interest receivable................................................. (2,665) (1,138)
(Increase) decrease in other receivables........................................ (2,956) 543
(Increase) decrease in other assets............................................. 7,229 2,341
Increase (decrease) in interest payable......................................... (1,448) 921
Increase (decrease) in accrued expenses......................................... 3,751 (3,692)
Increase in taxes payable....................................................... 15,946 10,392
----------------- -----------------
Total adjustments......................................................... 25,698 14,774
----------------- -----------------
Net cash provided by operating activities......................................... $53,431 $38,982
================= =================
See notes to consolidated financial statements
</TABLE>
PAGE 4
MERCANTILE BANKSHARES CORPORATION
<TABLE>
STATEMENT OF CHANGES IN CONSOLIDATED STOCKHOLDERS' EQUITY
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND 1995
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, 1994....................... $96,228 $22,988 $606,972 $(2,271)
Net income....................................... 24,208
Cash dividends paid:
Common stock ($.20 per share).................. (9,533)
Issuance of 29,711 shares for dividend
reinvestment and stock purchase plan........... 59 568
Issuance of 6,108 shares for employee stock
purchase dividend reinvestment plan............ 12 113
Purchase of 492,364 shares under stock repurchase
plan............................................. (984) (9,283)
Change in unrealized gains (losses) on securities 2,877
---------------- ---------------- ---------------- ---------------
BALANCE, MARCH 31, 1995.......................... $95,315 $14,386 $621,647 $ 606
================ ================ ================ ===============
BALANCE, DECEMBER 31, 1995....................... $96,545 $66,107 $620,391 $10,783
Net income....................................... 27,733
Cash dividends paid:
Common stock ($.23 per share).................. (10,988)
Issuance of 39,502 shares for dividend
reinvestment and stock purchase plan........... 79 914
Issuance of 6,422 shares for employee stock
purchase dividend reinvestment plan............ 13 160
Issuance of 6,320 shares for employee stock
option plan...................................... 13 126
Purchase of 531,030 shares under stock repurchase
plan............................................. (1,062) (13,531)
Additional paid-in capital--vested stock options. 2,106
Change in unrealized gains (losses) on securities (8,342)
---------------- ---------------- ---------------- ---------------
BALANCE, MARCH 31, 1996.......................... $95,588 $55,882 $637,136 $ 2,441
================ ================ ================ ===============
See notes to consolidated financial statements
</TABLE>
PAGE 5
MERCANTILE BANKSHARES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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. 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) Year to date per share amounts are based on the weighted average number of
common shares outstanding during the period of 47,955,616 shares for 1996
and 47,988,614 shares for 1995.
3) Amounts for 1996 include the accounts of The Sparks State Bank, Sparks,
Maryland, which became an affiliate after the close of business on October
31, 1995. The affiliation was accounted for using the purchase method of
accounting.
4) Under the provisions of Statements of Financial Accounting Standards
("SFAS") No. 114 and 118, "Accounting by Creditors for Impairment of a
Loan," a loan is considered impaired, based upon current information and
events, if it is probable that the Corporation will not collect all
principal and interest payments according to the contractual terms of the
loan agreement. Generally, a loan is considered impaired once either
principal or interest payments become 90 days past due at the end of a
calendar quarter. A loan may be considered impaired sooner if, in
management's judgement, such action is warranted. The impairment of a loan
is measured based upon the present value of expected future cash flows
discounted at the loan's effective interest rate, or the fair value of the
collateral if the repayment is expected to be provided predominantly by the
underlying collateral. Interest income on impaired loans is recognized on
the cash basis. A majority of the Corporation's impaired loans are measured
by reference to the fair value of the collateral. Information with respect
to impaired loans and the related valuation allowance (if the measure of
the impaired loan is less than the recorded investment) is shown below.
<TABLE>
<CAPTION>
MARCH 31, December 31,
(Dollars in thousands) 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Impaired loans with a valuation allowance................................................ $ 5,012 $ 4,628
Impaired loans with no valuation allowance............................................... 15,227 13,661
------------- ------------
Total impaired loans................................................................... $ 20,239 $ 18,289
============= ============
Allowance for loan losses applicable to impaired loans................................... $ 1,904 $ 1,907
Allowance for loan losses applicable to other than impaired loans........................ 93,093 89,491
------------- ------------
Total allowance for loan losses........................................................ $ 94,997 $ 91,398
============= ============
Year-to-date interest income on impaired loans recorded on the cash basis................ $ 191 $ 471
============= ============
Year-to-date average recorded investment in impaired loans during the period............. $ 20,200 $ 23,300
============= ============
Quarter-to-date interest income on impaired loans recorded on the cash basis............. $ 191 $ 190
============= ============
Quarter-to-date average recorded investment in impaired loans during the period.......... $ 20,200 $ 18,500
============= ============
</TABLE>
NOTE: Impaired loans do not include large groups of smaller balance
homogeneous loans that are evaluated collectively for impairment (e.g.
residential mortgages and consumer installment loans). The allowance for loan
losses related to these loans is included in the allowance for loan losses
applicable to other than impaired loans.
5) Various commitments to extend credit (lines of credit) are made in the
normal course of banking business. At March 31, 1996, total unused lines of
credit approximated $1,852,363,300. In addition, letters of credit are
issued for the benefit of customers by affiliated banks. Outstanding
letters of credit were $117,007,800 at March 31, 1996.
PAGE 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
MERCANTILE BANKSHARES CORPORATION
EARNINGS SUMMARY
Consolidated net income per share for the first quarter of 1996 was $.58, an
increase of 16% over the $.50 for the comparable period last year.
Consolidated net income was $27,733,000, an increase of 15% over the
$24,208,000 for the first quarter of 1995. Amounts for 1996 include the
accounts of The Sparks State Bank, Sparks, Maryland, which became an affiliate
after the close of business on October 31, 1995. The affiliation was accounted
for using the purchase method of accounting.
NET INTEREST INCOME AND NET INTEREST MARGIN
Net interest income for the three months ended March 31, 1996 was 8% higher
than the amount for the comparable period in 1995 primarily due to an increase
of 7% in average earning assets. Average loans increased by 8% over the first
quarter of 1995 to $4,295,000,000 for the first quarter of 1996.
NONINTEREST INCOME
Total noninterest income for the quarter ended March 31, 1996 increased 12%
to $23,127,000 from $20,621,000 for the first quarter of 1995. Factors
contributing to this increase include $66,000 in gains on investment
securities during the first quarter of 1996 compared to $993,000 in losses on
securities in 1995, a 6% increase in trust division revenues and higher
mortgage banking fees.
NONINTEREST EXPENSES
Total noninterest expenses, excluding the provision for loan losses, for the
first quarter of 1996 increased 1% from the comparable period in 1995.
Increases in salaries, occupancy expense of bank premises, furniture and
equipment expenses, communications and supplies, and employee benefits, were
largely offset by a reduction in FDIC insurance premiums paid and to lower
expenses related to foreclosed property.
ANALYSIS OF FINANCIAL CONDITION
Investment securities decreased 1% to $1,552,492,000 at March 31, 1996 from
$1,572,254,000 at December 31, 1995. Total loans outstanding increased
slightly to $4,319,371,000 at March 31, 1996 from $4,301,270,000 at December
31, 1995.
Total deposits changed very little to $5,186,019,000 at March 31, 1996 from
$5,169,381,000 at December 31, 1995. However, noninterest-bearing deposits
declined 4% to $948,183,000, or 18% of total deposits at March 31, 1996
compared to $983,021,000, or 19% of total deposits at December 31, 1995 while
interest-bearing deposits increased 1% to $4,237,836,000, or 82% of total
deposits at March 31, 1996 compared to $4,186,360,000, or 81% of total
deposits at December 31, 1995. The growth in interest-bearing deposit accounts
is due predominantly to an increase in time deposits.
Total stockholders' equity decreased slightly because share repurchases,
dividends paid, and unrealized losses on investment securities more than
offset the increase from net income for the quarter ended March 31, 1996.
However, exceptional capital strength is still maintained as evidenced by the
ratio of stockholders' equity to total assets, which stood at 12.4% at March
31, 1996 compared to 12.5% at December 31, 1995. For more details see the
Statement of Changes in Consolidated Stockholders' Equity on page 5.
ASSET QUALITY
Non-Performing Assets
Non-performing assets consist of non-accrual loans, renegotiated loans and
other real estate owned (i.e., real estate acquired in foreclosure or in lieu
of foreclosure). With respect to non-accrual loans, the Corporation's policy
is that, regardless of the value of the underlying collateral and/or
guarantees, no interest is accrued on the entire balance once either principal
or interest payments on any loan become 90 days past due at the end of a
calendar quarter. All accrued and uncollected interest on such loans is
eliminated from the income statement and is recognized only as collected. A
loan may be put on non-accrual status sooner than this standard if, in
management's judgement, such action is warranted. During the three months
ended March 31, 1996, non-performing assets increased $2,627,000 to
$26,720,000. Other real estate owned, one of the components of non-performing
assets, decreased $351,000 while non-performing loans, the other component,
increased $2,978,000.
PAGE 7
<TABLE>
<CAPTION>
Non-Performing Assets MARCH 31, December 31,
(Dollars in thousands) 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Non-accrual loans (1)................................................................ $24,213 $21,235
Renegotiated loans (1)............................................................... NONE NONE
Loans contractually past due 90 days or more and still accruing interest............. NONE NONE
--------------- ---------------
Total non-performing loans....................................................... 24,213 21,235
Other real estate owned.............................................................. 2,507 2,858
--------------- ---------------
Total non-performing assets...................................................... $26,720 $24,093
=============== ===============
</TABLE>
1) Total interest on these loans is not considered to be material in any of
the periods reported herein. Aggregate gross interest income of $575,000
and $1,946,000 for the first quarter of 1996 and the year 1995, respectively,
on non-accrual and renegotiated loans, would have been recorded if these
loans had been accruing on their original terms throughout the period or
since origination if held for part of the period. The amount of interest
income on the non-accrual and renegotiated loans that was recorded totalled
$197,000 and $1,086,000 for the first quarter of 1996 and the year 1995,
respectively.
NOTE: As of March 31, 1996, the Corporation was monitoring loans estimated to
aggregate $4,606,000 not currently classified as non-accrual or renegotiated
loans. These loans have characteristics which indicate they may result in such
classification in the future.
Provision and Allowance for Loan Losses
Each Mercantile Bankshares Corporation (MBC) affiliate is required to maintain
an adequate allowance for loan losses and their boards of directors, along with
MBC management, maintain a regular overview to assure that adequacy. On a
periodic basis, significant credit exposures, non-accrual loans, impaired loans,
other non-performing assets and various statistical measurements of asset
quality are examined to assure the adequacy of the allowance for loan losses.
The following table presents a summary of the activity in the Allowance for
Loan Losses.
<TABLE>
<CAPTION>
For the 3 Months Ended
Allowance for Loan Losses March 31,
(Dollars in thousands) 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Allowance balance--beginning......................................................... $ 91,398 $ 91,257
Charge-offs:
Commercial, financial and agricultural............................................. (709) (171)
Real estate--construction..........................................................
Real estate--mortgage.............................................................. (62) (160)
Consumer........................................................................... (909) (415)
--------------- ---------------
Totals........................................................................... (1,680) (746)
--------------- ---------------
Recoveries:
Commercial, financial and agricultural............................................. 926 349
Real estate--construction.......................................................... 4 26
Real estate--mortgage.............................................................. 686 115
Consumer........................................................................... 264 297
--------------- ---------------
Totals........................................................................... 1,880 787
--------------- ---------------
Net (charge-offs)/recoveries......................................................... 200 41
Provision for loan losses............................................................ 3,399 1,440
--------------- ---------------
Allowance balance--ending............................................................ $ 94,997 $ 92,738
=============== ===============
Average loans outstanding during period.............................................. $4,295,000 $3,975,300
=============== ===============
Net charge-offs/(recoveries) annualized--as a percentage of average
loans outstanding during period.................................................... (.02)% ---%
=============== ===============
Allowance for loan losses at period end as a percentage of
average loans...................................................................... 2.2% 2.3%
=============== ===============
Allowance for loan losses at period end as a percentage of
non-performing loans at period end................................................. 392.3% 277.4%
=============== ===============
</TABLE>
Charge-Offs
Intensive collection efforts continue after charge-off in order to maximize
the recovery of amounts previously charged off. Net recoveries were
$200,000 for the first quarter of 1996 versus net recoveries of $41,000
during the first quarter of 1995. For further details of charge-offs and
recoveries see the preceding Allowance For Loan Losses table.
PAGE 8
MERCANTILE BANKSHARES CORPORATION
<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>
1996 1995
------------------------------------------ ------------------------------------------
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........................ $1,413,100 $ 33,139 9.4% $1,304,500 $ 30,821 9.6%
Mortgage and construction......... 2,384,200 54,072 9.1 2,181,300 49,493 9.2
Consumer.......................... 497,700 11,659 9.4 489,500 11,191 9.3
------------- ------------ ------------- ------------
Total loans................... 4,295,000 98,870 9.3 3,975,300 91,505 9.3
------------- ------------ ------------- ------------
Federal funds sold.................. 90,000 1,165 5.2 200 1 2.0
Securities purchased under resale
agreements............................ 13,500 210 6.3
Securities:
Taxable securities
U.S. Treasury securities........ 1,524,300 21,726 5.7 1,539,300 20,358 5.4
U.S. Agency securities.......... 21,100 282 5.4 27,200 357 5.3
Other stocks and bonds.......... 16,600 318 7.7 9,300 186 8.1
Tax-exempt securities
States and political
subdivisions.......................... 15,300 287 7.5 13,400 259 7.8
------------- ------------ ------------- ------------
Total securities.............. 1,577,300 22,613 5.8 1,589,200 21,160 5.4
------------- ------------ ------------- ------------
Interest-bearing deposits in other
banks................................. 300 2 2.5 100 1 4.1
------------- ------------ ------------- ------------
Total earning assets.......... 5,976,100 122,860 8.3 5,564,800 112,667 8.2
------------ ------------
Cash and due from banks............... 200,700 192,400
Bank premises and equipment, net...... 78,800 75,100
Other assets.......................... 149,500 144,200
Less: allowance for loan losses....... (93,400) (92,100)
------------- -------------
Total assets.................. $6,311,700 $5,884,400
============= =============
Interest-bearing liabilities
Deposits:
Savings deposits.................. $2,213,400 14,566 2.6 $2,254,900 17,122 3.1
Time deposits..................... 1,999,500 28,249 5.7 1,572,600 19,740 5.1
------------- ------------ ------------- ------------
Total interest-bearing
deposits.................... 4,212,900 42,815 4.1 3,827,500 36,862 3.9
Short-term borrowings............... 291,000 3,603 5.0 363,800 4,958 5.5
Long-term debt...................... 25,500 405 6.4 31,300 523 6.8
------------- ------------ ------------- ------------
Total interest-bearing funds.. 4,529,400 46,823 4.2 4,222,600 42,343 4.1
------------ ------------
Noninterest-bearing deposits.......... 913,900 859,700
Other liabilities and accrued expenses 77,400 67,600
------------- -------------
Total liabilities............. 5,520,700 5,149,900
Stockholders' equity.................. 791,000 734,500
------------- -------------
Total liabilities and
stockholders' equity........ $6,311,700 $5,884,400
============= =============
Net interest income................... $ 76,037 $ 70,324
============ ============
Net interest rate spread.............. 4.1% 4.1%
Effect of noninterest-bearing funds... 1.0 1.0
----------- -----------
Net interest margin on earning assets. 5.1% 5.1%
=========== ===========
Taxable-equivalent adjustment included
in:
Loan income....................... $ 914 $ 876
Investment securities income...... 133 115
------------ ------------
Total......................... $ 1,047 $ 991
============ ============
*Presented on a tax equivalent basis using the statutory federal corporate
income tax rate of 35%.
</TABLE>
PAGE 9
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits--
Exhibit 27--Financial Data Schedule
(b) No Forms 8-K filed.
PAGE 10
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
May 14, 1996 /s/ H. Furlong Baldwin
By: H. Furlong Baldwin
Chairman of the Board and
Chief Executive Officer
May 14, 1996 /s/ Kenneth A. Bourne, Jr.
By: Kenneth A. Bourne, Jr.
Exec. Vice President and Treasurer
PAGE 11
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
MERCANTILE BANKSHARES CORPORATION MARCH 31, 1996 FINANCIAL STATEMENTS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 262,923,000
<INT-BEARING-DEPOSITS> 300,000
<FED-FUNDS-SOLD> 102,804,000
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 1,531,539,000
<INVESTMENTS-CARRYING> 20,953,000
<INVESTMENTS-MARKET> 20,975,000
<LOANS> 4,319,371,000
<ALLOWANCE> 94,997,000
<TOTAL-ASSETS> 6,384,712,000
<DEPOSITS> 5,186,019,000
<SHORT-TERM> 292,364,000
<LIABILITIES-OTHER> 89,907,000
<LONG-TERM> 25,375,000
0
0
<COMMON> 95,588,000
<OTHER-SE> 695,459,000
<TOTAL-LIABILITIES-AND-EQUITY> 6,384,712,000
<INTEREST-LOAN> 97,956,000
<INTEREST-INVEST> 22,480,000
<INTEREST-OTHER> 1,377,000
<INTEREST-TOTAL> 121,813,000
<INTEREST-DEPOSIT> 42,815,000
<INTEREST-EXPENSE> 46,823,000
<INTEREST-INCOME-NET> 74,990,000
<LOAN-LOSSES> 3,399,000
<SECURITIES-GAINS> 66,000
<EXPENSE-OTHER> 50,210,000
<INCOME-PRETAX> 44,508,000
<INCOME-PRE-EXTRAORDINARY> 44,508,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,733,000
<EPS-PRIMARY> .58
<EPS-DILUTED> .58
<YIELD-ACTUAL> 5.1
<LOANS-NON> 24,213,000
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 4,606,000
<ALLOWANCE-OPEN> 91,398,000
<CHARGE-OFFS> 1,680,000
<RECOVERIES> 1,880,000
<ALLOWANCE-CLOSE> 94,997,000
<ALLOWANCE-DOMESTIC> 94,997,000
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
