SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 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 0-20632
FIRST BANKS, INC.
-----------------
(Exact name of registrant as specified in its charter)
MISSOURI 43-1175538
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
135 NORTH MERAMEC, CLAYTON, MISSOURI 63105
------------------------------------------
(address of principal executive offices) (Zip Code)
(314) 854-4600
--------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes __X_ No ____
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Outstanding at
Class July 31, 1996
----- -------------
Common Stock, $250.00 par value 23,660.86
<PAGE>
First Banks, Inc.
INDEX
Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets as of June 30, 1996
and December 31, 1995 -2-
Consolidated Statements of Income for the three
and six month periods ended June 30, 1996 and 1995 -4-
Consolidated Statements of Cash Flows for the six month
periods ended June 30, 1996 and 1995 -5-
Notes to Consolidated Financial Statements -6-
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations -8-
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K -17-
Signatures -18-
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
FIRST BANKS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (unaudited)
(dollars expressed in thousands, except per share data)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---- ----
ASSETS
------
Cash and cash equivalents:
<S> <C> <C>
Cash and due from banks .................................... $ 111,083 128,553
Interest-bearing deposits with other financial institutions-
with maturities of three months or less ................. 5,215 16,860
Federal funds sold ......................................... 59,700 53,800
----------- -----------
Total cash and cash equivalents ...................... 175,998 199,213
----------- -----------
Investment securities:
Available for sale, at fair value ........................... 503,168 471,791
Held to maturity, at amortized cost (estimated fair
value of $29,866 and $37,021 at June 30, 1996
and December 31,1995, respectively) ...................... 29,749 36,532
----------- -----------
Total investment securities .......................... 532,917 508,323
----------- -----------
Loans:
Commercial .................................................. 381,023 364,018
Real estate construction and development .................... 235,773 209,802
Real estate mortgage:
Residential .............................................. 1,118,493 1,191,236
Commercial ............................................... 558,678 523,816
Consumer and installment .................................... 368,234 419,894
Loans held for sale-residential mortgage .................... 41,898 45,035
----------- -----------
Total loans .......................................... 2,704,099 2,753,801
Unearned discount ............................................ (8,579) (9,582)
Allowance for possible loan losses ........................... (45,921) (52,665)
----------- -----------
Net loans ............................................ 2,649,599 2,691,554
Bank premises and equipment, net of accumulated depreciation ... 49,003 50,278
Intangibles associated with the purchase of subsidiaries ....... 21,440 23,841
Purchased mortgage servicing rights, net of amortization ....... 11,121 12,122
Accrued interest receivable .................................... 22,753 22,027
Receivable from sales of investment securities ................. -- 41,265
Other real estate owned ........................................ 10,398 7,753
Deferred income taxes .......................................... 42,019 41,576
Other assets ................................................... 20,772 25,010
----------- -----------
Total assets ......................................... $ 3,536,020 3,622,962
=========== =========
</TABLE>
<PAGE>
FIRST BANKS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (unaudited)
(dollars expressed in thousands, except per share data)
(continued)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
---- ----
LIABILITIES
-----------
Deposits:
Demand:
<S> <C> <C>
Non-interest bearing ................................ $ 384,334 389,658
Interest bearing .................................... 288,868 307,584
Savings ............................................... 688,554 690,902
Time:
Time deposits of $100 or more ....................... 165,742 201,025
Other time deposits ................................. 1,588,368 1,594,522
----------- -----------
Total deposits ................................... 3,115,866 3,183,691
Federal Home Loan Bank advances ............................ 37,805 49,883
Federal funds purchased .................................... -- 3,000
Securities sold under agreements to repurchase ............. 23,312 17,180
Notes payable .............................................. 75,840 88,135
Accrued interest payable ................................... 9,653 10,726
Deferred income taxes ...................................... 11,091 6,517
Accrued and other liabilities .............................. 7,809 16,788
Minority interest in subsidiaries .......................... 14,151 12,437
----------- -----------
Total liabilities ................................ 3,295,527 3,388,357
----------- -----------
STOCKHOLDERS' EQUITY
--------------------
Preferred stock:
Class C 9.00% increasing rate, redeemable, cumulative,
$1.00 par value, $25.00 stated value; 5,000,000 shares
authorized; 2,200,000 shares issued and outstanding .. 55,000 55,000
Class A, convertible, adjustable rate, $20.00
par value; 750,000 shares authorized; 641,082
shares issued and outstanding ...................... 12,822 12,822
Class B, adjustable rate, $1.50 par value;
200,000 shares authorized; 160,505 shares
issued and outstanding ............................. 241 241
Common stock, $250.00 par value; 25,000 shares
authorized; 23,661 shares issued and outstanding ... 5,915 5,915
Capital surplus ............................................ 4,260 4,307
Retained earnings .......................................... 163,796 156,692
Net fair value adjustment for securities available for sale (1,541) (372)
----------- -----------
Total stockholders' equity ....................... 240,493 234,605
----------- -----------
Total liabilities and stockholders' equity ....... $ 3,536,020 3,622,962
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
FIRST BANKS, INC. AND SUBSIDIARIES
Consolidated Statements of Income (unaudited)
(dollars expressed in thousands, except per share data)
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30, June 30,
-------- --------
1996 1995 1996 1995
---- ---- ---- ----
Interest income:
<S> <C> <C> <C> <C>
Interest and fees on loans ................................... $ 57,773 56,024 116,061 105,105
Investment securities ........................................ 6,382 8,779 13,224 19,706
Federal funds sold and other ................................. 1,298 623 2,824 1,197
-------- -------- -------- --------
Total interest income .................................. 65,453 65,426 132,109 126,008
-------- -------- -------- --------
Interest expense:
Deposits:
Interest-bearing demand ................................... 1,127 1,464 2,413 2,772
Savings ................................................... 5,580 4,999 11,375 10,261
Time deposits of $100 or more ............................. 2,313 2,317 4,847 3,735
Other time deposits ....................................... 21,889 18,987 44,339 35,256
Federal Home Loan Bank advances ............................... 358 4,202 1,243 8,376
Securities sold under agreements to repurchase ................ 232 658 439 1,811
Interest rate exchange agreements, net ........................ 2,387 1,747 4,197 3,377
Notes payable and other ....................................... 1,431 1,687 3,015 3,730
-------- -------- -------- --------
Total interest expense ................................. 35,317 36,061 71,868 69,318
-------- -------- -------- --------
Net interest income .................................... 30,136 29,365 60,241 56,690
Provision for possible loan losses ............................... 3,100 1,644 6,204 3,010
-------- -------- -------- --------
Net interest income after provision for possible
loan losses .......................................... 27,036 27,721 54,037 53,680
-------- -------- -------- --------
Noninterest income:
Service charges on deposit accounts and customer
service fees .......................................... 3,129 2,522 6,257 4,868
Credit card fees .......................................... 635 522 1,234 1,045
Loan servicing fees, net .................................. 652 820 1,278 1,776
Gain (loss) on mortgage loans sold and held for sale ...... 9 (463) 112 (544)
Gain (loss) on sale of securities, net .................... 88 187 204 1,879
Gain on sale of mortgage loan servicing rights ............ -- 3,843 -- 3,843
Loss on cancellation of interest rate exchange agreement .. -- (3,342) -- (3,342)
Other income .............................................. 656 1,125 1,203 2,749
-------- -------- -------- --------
Total noninterest income ............................... 5,169 5,214 10,288 12,274
-------- -------- -------- --------
Noninterest expenses:
Salaries and employee benefits ............................ 10,028 9,289 20,361 17,781
Occupancy, net of rental income ........................... 2,642 1,962 4,935 3,846
Furniture and equipment ................................... 1,794 1,648 3,670 3,168
Federal Deposit Insurance Corporation premiums ............ 974 1,651 1,876 3,228
Postage, printing and supplies ............................ 1,303 1,283 2,675 2,460
Data processing fees ...................................... 1,140 1,044 2,349 2,344
Legal, examination and professional fees .................. 1,046 1,473 2,522 2,473
Credit card expenses ...................................... 711 728 1,436 1,142
Communications ............................................ 635 643 1,280 1,190
Advertising ............................................... 418 668 954 1,084
Losses and expenses on foreclosed real estate, net of gains 141 9 491 303
Other expenses ............................................ 3,211 3,643 6,531 6,240
-------- -------- -------- --------
Total noninterest expenses ............................. 24,043 24,041 49,080 45,259
-------- -------- -------- --------
Income before provision for income taxes and
minority interest in income of subsidiaries ........... 8,162 8,894 15,245 20,695
Provision for income taxes ....................................... 2,554 2,802 5,118 6,891
-------- -------- -------- --------
Income before minority interest in income
of subsidiaries ...................................... 5,608 6,092 10,127 13,804
Minority interest in income of subsidiaries ...................... (138) (17) (220) (156)
-------- -------- -------- --------
Net income ............................................. 5,470 6,075 9,907 13,648
Preferred stock dividends ........................................ 1,369 1,369 2,803 2,803
-------- -------- -------- --------
Net income available to common shareholders ............ $ 4,101 4,706 7,104 10,845
======== ======== ======== ========
Earnings per share:
Primary ....................................................... $ 173.34 198.89 300.27 458.36
Fully Diluted ................................................. 165.91 188.04 291.26 434.34
======== ======== ======== ========
Weighted average shares of common stock outstanding .............. 23,661 23,661 23,661 23,661
======== ======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
FIRST BANKS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(dollars expressed in thousands, except per share data)
<TABLE>
<CAPTION>
Six months ended
June 30,
---------------------
1996 1995
---- ----
Cash flows from operating activities:
<S> <C> <C>
Net income .................................................................. $ 9,907 13,648
Adjustments to reconcile net income to net cash:
Depreciation and amortization of bank premises and equipment ............. 3,053 2,563
Amortization, net of accretion ........................................... 1,683 1,312
Originations and purchases of loans held for sale ........................ (85,143) (11,542)
Proceeds from sales of loans held for sale ............................... 58,728 12,482
Provisions for possible loan losses ...................................... 6,204 3,010
Provisions for income taxes currently payable ............................ 5,118 6,891
Payments of income taxes ................................................. (5,018) (310)
(Increase) decrease in accrued interest receivable ....................... (726) 733
Interest accrued on liabilities .......................................... 71,868 56,176
Payments of interest on liabilities ...................................... (72,942) (55,329)
Other .................................................................... (1,584) (2,066)
Minority interest in income of subsidiaries .............................. 220 156
--------- ---------
Net cash provided by (used in) operating activities .................. (8,632) 27,724
--------- ---------
Cash flows from investing activities:
Cash paid for acquired entities, net of cash and cash equivalents received . -- 6,660
Sales of securities of acquired entities ................................... -- 86,713
Other sales of investment securities ....................................... 46,478 173,342
Maturities of investment securities ........................................ 214,441 112,880
Purchases of investment securities ......................................... (245,342) (174,581)
Purchases of mortgage servicing rights ..................................... (44) 1,064
Net (increase) decrease in loans ........................................... 51,069 (116,649)
Recoveries of loans previously charged-off ................................. 3,486 2,264
Purchases of bank premises and equipment ................................... (1,774) (3,406)
Other investing activities ................................................. 10,382 (13,296)
--------- ---------
Net cash provided by (used in) investing activities .................. 78,696 74,991
--------- ---------
Cash flows from financing activities:
Other increases (decreases) in deposits:
Demand and savings deposits ............................................ (26,389) (80,554)
Time deposits .......................................................... (41,436) 29,104
Increase (decrease) in Federal funds purchased ............................. (3,000) (46,537)
Increase (decrease) in Federal Home Loan Bank advances ..................... (12,079) 29,873
Increase (decrease) in securities sold under agreements to repurchase ..... 6,132 (28,227)
Increase (decrease) in notes payable and other borrowings .................. (13,705) 11,683
Payment of preferred stock dividends ....................................... (2,802) (2,803)
--------- ---------
Net cash provided by (used in) financing activities .................. (93,279) (87,461)
--------- ---------
Net increase (decrease) in cash and cash equivalents ................. (23,215) 15,254
Cash and cash equivalents, beginning of period ................................. 199,213 131,296
--------- ---------
Cash and cash equivalents, end of period ....................................... $ 175,998 146,550
========= =========
Noncash investing and financing activities:
Loans transferred to foreclosed real estate ................................ $ 5,986 1,504
Loans to facilitate sale of foreclosed real estate ......................... 164 113
Loans transferred to held for sale ......................................... -- 146,991
========= =========
</TABLE>
See accompanying notes to consolidated financial statements
<PAGE>
FIRST BANKS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Basis of Presentation
The accompanying consolidated financial statements of First Banks, Inc.
and subsidiaries (First Banks) are unaudited and should be read in conjunction
with the consolidated financial statements contained in the 1995 annual report
on Form 10-K. In the opinion of management, all adjustments, consisting of
normal recurring accruals considered necessary for a fair presentation of the
results of operations for the interim periods presented herein, have been
included. Operating results for the three and six month periods ended June 30,
1996 are not necessarily indicative of the results that may be expected for any
other interim period or for the year ending December 31, 1996.
First Banks' primary subsidiaries (Subsidiary Banks) are:
FirstBank, headquartered in St. Louis County, Missouri (First Bank (Missouri)
First Bank, headquartered in O'Fallon, Illinois (First Bank (Illinois))
First Bank FSB, headquartered in St. Louis County, Missouri (First Bank FSB)
First Banks America, Inc., headquartered in Houston, Texas (FBA)
CCB Bancorp, Inc., headquartered in Irvine, California (CCB)
First Commercial Bancorp, Inc., headquartered in Sacramento, California (FCB)
St. Charles Federal Savings and Loan Association, headquartered in St. Charles,
Missouri (St. Charles Federal).
CCB, a wholly owned bank holding company subsidiary, operates through
First Bank & Trust, headquartered in Irvine, California (FB&T). On January 16,
1996, La Cumbre Federal Savings Bank F.S.B., previously operating as a thrift
subsidiary of CCB, was merged into FB&T. In addition, on April 15, 1996, Queen
City Bank, N.A. was merged into FB&T. The mergers of these entities did not have
a significant impact on the consolidated operations of First Banks.
FBA, a majority owned bank holding company subsidiary, operates through
BankTEXAS N.A., headquartered in Houston, Texas. First Banks' ownership interest
in FBA was 66.20% and 65.41% at June 30, 1996 and December 31, 1995,
respectively.
FCB, a majority owned bank holding company subsidiary, operates through
First Commercial Bank, headquartered in Sacramento, California. First Banks'
ownership interest in FCB was 61.46% and 93.29% at June 30, 1996 and December
31, 1995, respectively.
The consolidated financial statements include the accounts of First
Banks, Inc. and its subsidiaries, net of minority interests. All significant
intercompany accounts and transactions have been eliminated in consolidation.
Certain reclassifications of 1995 amounts have been made to conform with the
1996 presentation.
(2) Business Combinations
On June 24, 1996, First Banks' majority owned subsidiary, FBA, executed
a definitive agreement under which FBA will acquire Sunrise Bancorp, Inc.
(Sunrise), Roseville, California, and its wholly owned subsidiary, Sunrise Bank
of California, in an all-cash transaction. Sunrise is headquartered in
Roseville, California and operates two full-service banking offices in Roseville
and Citrus Heights, California and one loan production office in San Francisco,
California. At June 30, 1996, Sunrise had total assets of $113.5 million,
consisting primarily of cash and cash equivalents and investment securities of
$46.9 million and loans of $62.5 million. The transaction, which is subject to
regulatory approvals and the approval of Sunrise shareholders, is expected to
close by November 30, 1996.
<PAGE>
(3) Capital Stock of First Commercial Bancorp, Inc.
FCB completed an offering of an aggregate of 59.69 million shares of
newly-issued FCB common stock at $.10 per share. The common stock subscribed
under the offering totaled 36.09 million shares. As a result of the offering,
First Banks ownership interest in FCB was reduced to 61.46% at June 30, 1996
from 93.29% at December 31, 1995. This reduction in the ownership interest in
FCB did not have a material impact on the financial condition or results of
operations of First Banks.
<PAGE>
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations
General
First Banks is a registered bank holding company, incorporated in
Missouri in 1978 and headquartered in St. Louis County, Missouri. At June 30,
1996, First Banks had $3.54 billion in total assets; $2.70 billion in total
loans, net of unearned discount; $3.12 billion in total deposits; and $240.5
million in total stockholders' equity.
Through the Subsidiary Banks, First Banks offers a broad range of
commercial and personal banking services including certificate of deposit
accounts, individual retirement and other time deposit accounts, checking and
other demand deposit accounts, interest checking accounts, savings accounts and
money market accounts. Loans include commercial, financial, agricultural,
municipal and industrial development, real estate construction and development,
residential real estate and consumer and installment loans. Other financial
services include mortgage banking, credit-related insurance, automatic teller
machines, safe deposit boxes, merchant credit card, corporate cash management,
and corporate and individual trust services offered by certain Subsidiary Banks.
<TABLE>
<CAPTION>
The following table lists the Subsidiary Banks at June 30, 1996 ranked
by asset size:
Loans, net
Percent of No. of of unearned Total
Subsidiary Banks ownership locations Total Assets discounts deposits
- ---------------- --------- --------- ------------ --------- --------
(dollars expressed in thousands)
<S> <C> <C> <C> <C> <C>
First Bank FSB 100.00% 40 $1,040,255 856,850 880,679
First Bank (Missouri) 100.00% 29 798,124 620,982 717,109
First Bank (Illinois) 100.00% 28 797,514 572,047 731,443
CCB 100.00% 14 410,985 329,872 349,651
FBA 66.20% 6 287,554 160,907 245,462
FCB 61.46% 7 151,814 88,768 137,343
St. Charles Federal 100.00% 1 79,562 66,072 63,810
</TABLE>
Financial Condition
First Banks' total assets decreased by $80 million to $3.54 billion
from $3.62 billion at June 30, 1996 and December 31, 1995, respectively. The
decrease is primarily attributable to the reduction in net loans of $42 million
and the settlement in January 1996 of the sale of $41 million of investment
securities carried as a receivable at December 31, 1995. The decrease in net
loans is discussed in the "Lending and Credit Management" section of this Form
10-Q. The proceeds from the reduction in total assets were primarily utilized to
reduce Federal Home Loan Bank advances and fund the planned reduction of time
deposits of $100,000 or more.
Results of Operations
Net Income
Net income was $5.5 million for the three months ended June 30, 1996,
compared to $6.1 million for the same period in 1995. Net income for the six
months ended June 30, 1996 was $9.9 million compared to $13.6 million for the
same period in 1995. Included in income for the six months ended June 30, 1995
were net securities gains of $1.9 million and non-recurring income from the
termination of a self-insurance trust of $802,000. The operating results for
1996 also reflect the immediate negative effect on earnings of the seven
acquisitions completed during 1995. First Banks is restructuring the composition
of acquired assets and liabilities, working to improve the quality of the
acquired loans, building loan loss reserves to First Banks' standards, and
integrating these entities into its systems and cultures. First Banks expects
this restructuring process to be substantially completed during 1996.
<PAGE>
Net Interest Income
Net interest income (expressed on a tax-equivalent basis) was $30.4
million, or 3.69% of average interest earning assets, for the three months ended
June 30, 1996, compared to $29.7 million, or 3.66% of average interest earning
assets, for the same period in 1995. Net interest income (expressed on a
tax-equivalent basis) for the six months ended June 30, 1996 was $60.8 million,
or 3.67% of average interest earning assets, compared to $57.4 million, or 3.61%
of average interest earning assets, for the same period in 1995.
The increased net interest income for 1996 is primarily attributable to
the increase in average interest-earning assets provided primarily by
acquisitions. The increase was partially offset by the interest expense on the
debt incurred in First Banks' acquisition program and the costs associated with
the use of derivative financial instruments in the management of First Banks'
interest rate risk exposure. The expense of such derivative financial
instruments was $3.0 million and $5.4 million for the three and six month
periods ended June 30, 1996, respectively, in comparison to $1.9 million and
$3.6 million for the same periods in 1995.
The following table sets forth, on a tax-equivalent basis, certain
information relating to First Banks' average balance sheet, and reflects the
average yield earned on interest-earning assets, the average cost of
interest-bearing liabilities and the resulting net interest income for the three
and six month periods ended June 30:
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
1996 1995 1996 1995
---------------------- --------------------- ---------------------- --------------------
Interest Interest Interest Interest
Average income/ Yield/ Average income/ Yield/ Average income/ Yield/ Average income/Yield/
balance expense rate balance expense rate balance expense rate balance expense rate
------- ------------ --------------------- ------- ------------ --------------------
(dollars expressed in thousands)
Assets
Interest-earning assets:
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans $2,710,471 57,887 8.54% $2,621,070 56,162 8.57%$2,716,934 116,297 8.56% $2,500,158 105,378 8.43%
Investment securities 489,709 6,552 5.35 589,047 8,978 6.10 496,015 13,575 5.47 641,874 20,100 6.26
Federal funds sold and other 98,549 1,299 5.27 39,418 623 6.32 106,413 2,824 5.31 38,769 1,197 6.18
------ ------ ------ ------ --------- ------- --------- ------
Total interest-earning assets 3,298,729 65,738 7.97 3,249,535 65,763 8.10 3,319,362 132,696 8.00 3,180,801 126,675 7.96
------ ------ ------- -------
Nonearning assets 221,313 215,908 222,754 209,659
----------- --------- ---------- ---------
Total assets $ 3,520,042 $3,465,443 $ 3,542,116 $3,390,460
========== ========= ========= =========
Liabilities and Stockholders' Equity
Interest-bearing liabilities:
Interest-bearing demand
deposits $ 299,157 1,127 1.51% $275,857 1,464 2.12% $302,450 2,413 1.60% $ 273,781 2,772 2.02%
Savings deposits 687,091 5,580 3.25 642,735 5,040 3.14 688,869 11,375 3.30 621,109 10,261 3.30
Time deposits of $100 or more (1)170,667 2,540 5.95 160,438 2,169 5.41 177,389 5,254 5.92 138,718 3,735 5.39
Other time deposits (1) 1,595,306 23,986 6.01 1,389,561 19,093 5.50 1,598,724 48,005 6.01 1,363,815 35,256 5.17
--------- ------- --------- ------ --------- ------ --------- ------
Total interest-bearing deposits 2,752,221 33,233 4.83 2,468,591 27,766 4.50 2,767,432 67,047 4.85 2,397,423 52,024 4.34
Notes payable and other (1) 124,516 2,084 6.69 392,499 8,295 8.45 136,758 4,821 7.05 424,416 17,294 8.15
--------- ------- --------- ------ -------- ------ --------- ------
Total interest-bearing
liabilities 2,876,737 35,317 4.91 2,861,090 36,061 5.04 2,904,190 71,868 4.95 2,821,839 69,318 4.91
------ ------ ------ ------
Noninterest-bearing liabilities:
Demand deposits 368,565 343,578 364,598 315,548
Other liabilities 36,718 35,733 36,673 30,365
---------- ---------- ---------- ---------
Total liabilities 3,282,020 3,240,401 3,305,461 3,167,752
Stockholders' equity 238,022 225,042 236,655 222,708
---------- --------- ---------- ---------
Total liabilities and
stockholders' equity $3,520,042 $3,465,443 $3,542,116 $3,390,460
========== ========= ========= =========
Net interest income 30,421 29,702 60,828 57,357
====== ======= ======== =======
Net interest margin 3.69% 3.66% 3.67% 3.61%
======= ===== ===== =====
(1) Includes the effects of interest rate exchange agreements
</TABLE>
<PAGE>
Provision for Possible Loan Losses
The provision for possible loan losses was $3.1 million compared to
$1.64 million for the three months ended June 30, 1996 and 1995, respectively.
For the six months ended June 30, 1996 and 1995, the provision for possible loan
losses was $6.2 million and $3.0 million, respectively. The increase reflects
the increase in net loan charge-offs to $7.2 million and $12.9 million from $1.7
million and $2.6 million for the three and six month periods ended June 30, 1996
and 1995, respectively, as well as internal loan growth within corporate
banking.
Loan charge-offs were $10.8 million and $16.4 million for the six month
periods ended December 31, 1995 and June 30, 1996, respectively, compared to
$4.8 million for the six months ended June 30, 1995. Following various
acquisitions, First Banks pursued aggressive problem loan work out procedures
which included conservatively re-valuing loans through write-down or
charge-offs. Generally, these adjustments were anticipated prior to the
acquisitions and adequate reserves for loan losses had been established to
provide for them. In addition, a single commercial loan of approximately $3.7
million was identified in 1995 as having potential problems creating uncertainty
as to its collectibility. During the six months ended June 30, 1996, the
borrower failed to meet certain previously-agreed financial measures and
principal reductions. As a result, it became apparent the loan could not be
collected in the normal course of business and was charged-off. Tables
summarizing nonperforming assets, past due loans and charge-off experience are
presented in the "Lending and Credit Management" section of this Form 10-Q.
Noninterest Income
Noninterest income was $5.2 million and $10.3 million for the three and
six month periods ended June 30, 1996, respectively, in comparison to $5.2
million and $12.3 million for the same periods in 1995. The decrease for the six
months ended June 30, 1996 is primarily attributable to net securities gains and
non-recurring income from the termination of a self-insurance trust of $1.9
million and $802,000, respectively, included in income for the six months period
ended June 30, 1995, partially offset by the additional noninterest income
generated from the seven acquisitions completed throughout 1995.
An increase of $720,000 and $1.58 million in service charges, customer
service fees and credit card fees for the three and six month periods ended June
30, 1996, compared to the same periods in 1995, relate primarily to the
aforementioned acquisitions completed during 1995.
Loan servicing fees, net decreased by $168,000 and $498,000 for the
three and six month periods ended June 30, 1996, respectively, in comparison to
the same periods in 1995, from the sale of $427 million of mortgage loan
servicing rights during July 1995.
Noninterest income also includes net security gains of $88,000 and
$204,000 for the three and six months ended June 30, 1996, respectively, in
comparison to $187,000 and $1.9 million for the same periods in 1995. The
securities sold were classified as available for sale within the investment
security portfolio. Gross gains and losses were $222,000 and $18,000,
respectively, for the six months ended June 30, 1996. For the six months ended
June 30, 1995, the gross gains and losses were $5.8 million and $3.9 million,
respectively.
During the three months ended June 30, 1995, First Banks elected to
sell $427 million of mortgage servicing rights which resulted in a gain of $3.8
million. First Banks decided to sell the loan servicing due to favorable pricing
available in the marketplace.
In addition, First Banks sold $147 million of residental mortgage loans
during the three months ended June 30, 1995, resulting in a loss of $284,000. In
connection with the sale of these loans, First Banks terminated an interest rate
exchange agreement, resulting in a loss of $3.3 million for the three months
ended June 30, 1995.
<PAGE>
Noninterest Expenses
Noninterest expenses were $24.0 million for each of the three month
periods ended June 30, 1996 and 1995. In comparison to the prior quarter ended
March 31, 1996, noninterest expense for the three months ended June 30, 1996 has
decreased by $1.0 million. This decrease is consistent with the cost savings
expected upon the integration of the entities acquired throughout 1995 into
existing systems and cultures of First Banks.
Noninterest expense was $49.1 million and $45.3 million for the six
months ended June 30, 1996 and 1995, respectively. The increase of $3.8 million
is primarily attributable to incremental operating expenses of the seven
acquisitions completed throughout 1995. In particular, salaries and employee
benefits increased by $2.6 million to $20.4 million from $17.8 million for the
six month periods ended June 30, 1996 and 1995, respectively. In addition,
occupancy and furniture and equipment expenses increased by $1.6 million to $8.6
million from $7.0 million for the six month periods ended June 30, 1996 and
1995, respectively.
Federal Deposit Insurance Corporation (FDIC) premiums decreased by
$677,000 and $1.4 million for the three and six month periods ended June 30,
1996, respectively, in comparison to the same periods in 1995. On August 8,
1995, the FDIC voted to reduce the deposit insurance premiums paid by most
members of the Bank Insurance Fund (BIF) and to keep existing assessment rates
intact for members of the Savings Association Insurance Fund (SAIF). Under the
reduced assessment rate schedule for the BIF, the best-rated institutions will
pay an annual rate of four cents per $100.00 of assessable deposits, down from
the previous rate of 23 cents per $100.00. The SAIF members will continue to pay
the 23 cents per $100.00 of assessable deposits. The reduction in the BIF became
effective June 1, 1995. In addition, as a result of the continued improvement in
the capitalization of the FDIC's BIF, the assessment for the best rated BIF
members was further reduced to the statutory annual minimum payment of $2,000,
effective January 1, 1996. These premium levels were reviewed by the FDIC on May
14, 1996. The weakest BIF and SAIF institutions will continue to pay 27 cents
and 31 cents per $100.00 of assessable deposits, respectively. First Banks' BIF
depository institutions are First Bank (Missouri), First Bank (Illinois), FB&T,
BankTEXAS N.A., and First Commercial Bank. As a result of acquisitions and
mergers, First Banks' BIF depository institutions also have a total of
approximately $350 million of SAIF-insured deposits. First Banks' SAIF
depository institutions are First Bank FSB and St. Charles Federal which will
continue to be assessed 23 cents per $100.00 of assessable deposits. First
Banks' SAIF depository institutions also have, as a result of acquisitions and
mergers, a total of approximately $20 million of BIF-insured deposits.
In response to concerns that the insurance premium disparity between
the BIF and the SAIF could have a negative effect on SAIF-insured institutions
and the SAIF, legislation may be introduced in Congress to, among other things,
eliminate the deposit insurance premium disparity by merging the BIF and SAIF. A
merger of the BIF and the SAIF may, as described in previously proposed
legislation, entail a one-time special assessment on SAIF-insured deposits. It
cannot be predicted whether, when or in what form any such legislation will be
enacted, or what effect such legislation will ultimately have on First Banks.
Lending and Credit Management
Interest earned on the loan portfolio is the primary source of income
of First Banks. Total loans, net of unearned discount, represented 76.23% and
75.75% of total assets as of June 30, 1996 and December 31, 1995, respectively.
Total loans, excluding loans held for sale and net of unearned discount,
decreased by $50 million to $2.65 billion at June 30, 1996 from $2.70 billion at
December 31, 1995. The decrease reflects First Banks' decision to sell
substantially all of its new originations of fixed and adjustable rate
residential loans into the secondary market, as well as the reduction of its
portfolio of indirect automobile loans at FBA resulting from the institution of
more stringent credit standards in July 1995.
<PAGE>
<TABLE>
<CAPTION>
The following is a summary of nonperforming assets by category:
June 30, December 31,
1996 1995
------------ ------------
(dollars expressed in thousands)
<S> <C> <C>
Commercial $ 5,258 9,930
Real estate construction and development 1,926 2,002
Real estate mortgage:
Residential 13,349 11,143
Commercial 15,468 16,016
Consumer and installment 463 300
---------- ----------
Total nonperforming loans 36,464 39,391
Other real estate 10,398 7,753
---------- ----------
Total nonperforming assets $ 46,862 47,144
========== ==========
Loans, net of unearned discount $2,695,520 2,744,219
========== ==========
Loans past due 90 days or more and still accruing $ 4,880 8,474
========== ==========
Allowance for possible loan losses to loans 1.70% 1.92%
Nonperforming loans to loans 1.35 1.44
Allowance for possible loan losses to nonperforming loans 125.94 133.70
Nonperforming assets to loans and foreclosed assets 1.73 1.71
========== ==========
</TABLE>
Impaired loans, consisting of certain nonaccrual loans and consumer and
installment loans 60 days or more past due, were $24.1 million and $31.5 million
at June 30, 1996 and December 31, 1995, respectively.
<TABLE>
<CAPTION>
The following is a summary of the loan loss experience for the three and six month periods ended June 30:
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
(dollars expressed in thousands)
<S> <C> <C> <C> <C>
Allowance for possible loan losses, beginning of period $50,045 41,001 52,665 28,410
Acquired allowances for possible loan losses - 4,625 - 16,702
------- ------- ------- ------
50,045 45,626 52,665 45,112
Loans charged-off (9,583) (3,006) (16,434) (4,846)
Recoveries of loans previously charged-off 2,359 1,276 3,486 2,264
------- ------- ------- ------
Net loan (charge-offs) recoveries ( 7,224) (1,730) (12,948) (2,582)
------- ------- ------- ------
Provision for possible loan losses 3,100 1,644 6,204 3,010
------- ------- ------- ------
Allowance for possible loan losses, end of period $45,921 45,540 45,921 45,540
====== ====== ======= ======
</TABLE>
The allowance for possible loan losses is based on past loan loss
experience, on management's evaluation of the quality of the loans in the
portfolio and on the anticipated effect of national and local economic
conditions relative to the ability of loan customers to repay. Each quarter, the
allowance for possible loan losses is revised relative to First Banks' internal
watch list and other data utilized to determine its adequacy. The provision for
possible loan losses is management's estimate of the amount necessary to
maintain the allowance at a level consistent with this evaluation. As
adjustments to the allowance for possible loan losses are considered necessary,
they are reflected in the results of operations.
Interest Rate Risk Management
For financial institutions, the maintenance of a satisfactory level
of net interest income is a primary factor in achieving acceptable income
levels. However, the maturity and repricing characteristics of the institution's
loan and investment portfolios, relative to those within its deposit structure,
may differ significantly. Furthermore, the ability of borrowers to repay loans
and depositors to withdraw funds prior to stated maturity dates introduces
divergent option characteristics which operate primarily as interest rates
<PAGE>
change. This causes various elements of the institution's balance sheet to react
in different manners and at different times relative to changes in interest
rates, thereby leading to increases or decreases in net interest income over
time. Depending upon the amount and velocity of interest rate movements and
their effect on the specific components of the institution's balance sheet, the
effects on net interest income can be substantial. Consequently, a fundamental
requirement in managing a financial institution is establishing effective
control of the exposure of the institution to changes in interest rates.
First Banks manages its interest rate risk by: (1) maintaining an
Asset Liability Committee (ALCO) responsible to First Banks' Board of Directors
to review the overall interest rate risk management activity and approve actions
taken to reduce risk; (2) maintaining an effective monitoring mechanism to
determine First Banks' exposure to changes in interest rates; (3) coordinating
the lending, investing and deposit-generating functions to control the
assumption of interest rate risk; and (4) employing various off-balance sheet
financial instruments to offset inherent interest rate risk when it becomes
excessive. The objective of these procedures is to limit the adverse impact
which changes in interest rates may have on net interest income.
The ALCO has overall responsibility for the effective management of
interest rate risk and the approval of policy guidelines. The ALCO includes the
Chairman and Chief Executive Officer, the senior executives of investments,
credit, retail banking and finance, and certain other officers. The ALCO is
supported by the Asset Liability Management Group which monitors interest rate
risk, prepares analyses for review by the ALCO and implements actions which are
either specifically directed by the ALCO or established by policy guidelines. To
measure the effect of interest rate changes, First Banks recalculates its net
income over a one-year horizon on a pro forma basis assuming instantaneous,
permanent parallel and non-parallel shifts in the yield curve, in varying
amounts both upward and downward.
Derivative financial instruments held by First Banks for purposes of
managing interest rate risk are summarized as follows:
June 30, 1996 December 31,1995
------------- ----------------
Notional Credit Notional Credit
amount exposure amount exposure
------ -------- ------ --------
(dollars expressed in thousands)
Interest rate swap agreements $ 145,000 - 145,000 -
Interest rate floor agreements 105,000 72 105,000 608
Interest rate cap agreements 30,000 483 30,000 292
Forward commitments to sell
mortgage-backed securities 47,000 83 42,000 -
The notional amounts of derivative financial instruments do not
represent amounts exchanged by the parties and, therefore, are not a measure of
First Banks' credit exposure through its use of derivative financial
instruments. The amounts exchanged are determined by reference to the notional
amounts and the other terms of the derivatives.
Prior to 1996, First Banks sold interest rate futures contracts and
purchased options on interest rate futures contracts to hedge the interest rate
risk of its available for sale securities portfolio. The unamortized balance of
net deferred losses on interest rate futures contracts of $3.4 million and $4.6
million at June 30, 1996 and December 31, 1995, respectively, was applied to the
carrying value of the available for sale securities portfolio as part of the
mark-to-market valuation.
Interest rate swap agreements are utilized to extend the repricing
characteristics of certain interest-bearing liabilities to correspond more
closely with the assets of First Banks, with the objective of stabilizing net
interest income over time. The net interest expense for these agreements was
$2.3 million and $4.1 million for the three and six month periods ended June 30,
1996, respectively, in comparison to $1.7 million and $3.4 million for the same
periods in 1995. The maturity dates, notional amounts, interest rates paid and
received, and fair values of interest rate swap agreements outstanding as of the
dates indicated are summarized as follows:
<PAGE>
June 30, 1996:
Notional Interest Rate Fair Value
--------------
Maturity date Amount Paid Received Gain (loss)
------------- ------ ---- -------- ----- ------
(dollars expressed in thousands)
September 30, 1997 $ 35,000 7.04% 5.57% $ (453)
December 8, 1997 15,000 7.90 5.54 (401)
September 30, 1999 35,000 7.32 5.57 (902)
September 30, 2001 35,000 7.65 5.57 (1,531)
January 30, 2005 25,000 8.13 5.48 (1,990)
------- ------
$145,000 7.53 5.55 $(5,277)
======= ==== ==== ======
December 31, 1995:
Notional Interest Rate Fair Value
--------------
Maturity date Amount Paid Received Gain (loss)
------------- ------ ---- -------- -----------
(dollars expressed in thousands)
September 30, 1997 $ 35,000 7.04% 5.69% $ (932)
December 8, 1997 15,000 7.90 5.81 711)
September 30, 1999 35,000 7.32 5.69 (2,073)
September 30, 2001 35,000 7.65 5.69 (3,207)
January 30, 2005 25,000 8.13 5.94 (3,703)
------- --------
$145,000 7.53 5.74 $(10,626)
======== ==== ==== ========
During July 1995, First Banks shortened the effective maturity of its
interest-bearing liabilities through the termination of $225 million of interest
rate swap agreements at a loss of $13.5 million. This loss has been deferred and
is being amortized over the remaining lives of the swap agreements. At June 30,
1996 and December 31, 1995, the unamortized balance of this loss was $9.3
million and $11.6 million, respectively, and was included in other assets. The
amortization of the deferred loss included in interest expense was $1.0 million
and $2.3 million for the three and six month periods ended June 30, 1996.
First Banks also has interest rate cap and floor agreements to limit
the interest expense associated with certain of its interest-bearing liabilities
and the net interest expense of certain interest rate swap agreements,
respectively. At June 30, 1996 and December 31, 1995, the unamortized costs for
these agreements were $542,000 and $685,000, respectively, and were included in
other assets. The net interest expense of the interest rate cap and floor
agreements was $72,000 and $143,000 for the three and six month periods ended
June 30, 1996, respectively in comparison to $68,000 and $106,000 for the same
periods in 1995. There are no amounts receivable under these agreements.
Derivative financial instruments issued by First Banks consist of
commitments to originate fixed-rate loans. Commitments to originate fixed-rate
loans consist primarily of residential real estate loans. These loan
commitments, net of estimated underwriting fallout, and loans held for sale are
hedged with forward contracts to sell mortgage-backed securities.
Liquidity
The liquidity of First Banks and its Subsidiary Banks is the ability to
maintain a cash flow which is adequate to fund operations, service its debt
obligations and meet other commitments on a timely basis. The primary sources of
funds for liquidity are derived from customer deposits, loan payments,
maturities, sales of investments and earnings.
In addition, First Banks and its Subsidiary Banks may avail themselves
of more volatile sources of funds through issuance of certificates of deposit in
denominations of $100,000 or more, federal funds borrowed, securities sold under
agreements to repurchase, borrowings from the Federal Home Loan Bank (FHLB), and
other borrowings, including First Banks' $90 million credit agreement with a
group of unaffiliated financial institutions. The aggregate funds acquired from
those sources were $303 million at June 30, 1996 and $359 million at December
31, 1995. The decrease is primarily attributable to the reduction in
certificates of deposit in denominations of $100,000 or more of $35.3 million,
reduction in FHLB advances of $12.1 million and notes payable which decreased by
$12.3 million as of June 30, 1996 in comparison to December 31, 1995. The funds
utilized to reduce certificates of deposit in denominations of $100,000 or more
and FHLB advances were obtained from the proceeds of sales of investment
securities, which settled in January 1996, and from the funds generated from the
planned reduction within the residential real estate loan portfolio. The funds
utilized to reduce notes payable of First Banks, Inc. were obtained from the
dividends from the Subsidiary Banks and available liquidity.
<PAGE>
At June 30, 1996, First Banks' more volatile sources of funds mature as
follows:
(dollars expressed in thousands)
Three months or less $160,655
Over three months through six months 37,530
Over six months through twelve months 74,553
Over twelve months 29,961
--------
Total $302,699
========
Management believes the future earnings of its Subsidiary Banks will be
sufficient to provide funds for growth and to permit the distribution of
dividends to First Banks sufficient to meet First Banks' operating and debt
service requirements both on a short-term and long-term basis and to pay the
dividends on the Class C 9% Increasing Rate, Redeemable, Cumulative Preferred
Stock (Class C Shares).
Capital
Risk-based capital guidelines for financial institutions are designed
to relate regulatory capital requirements to the risk profiles of the specific
institutions and to provide more uniform requirements among the various
regulators. First Banks and the Subsidiary Banks are required to maintain a
minimum risk-based capital to risk-weighted assets ratio of 8.00%, with at least
4.00% being "Tier 1" capital. Tier 1 capital is composed of common stockholders'
equity, qualifying perpetual preferred stock and minority interests in equity
accounts of consolidated subsidiaries, less intangibles associated with the
purchase of subsidiaries, net losses on financial futures contracts deferred for
financial reporting purposes, and the excess of net deferred tax assets, as
defined by regulation. Consistent with regulatory reporting, Tier 1 capital also
excludes the fair value adjustment for available for sale investment securities.
In addition, a minimum leverage ratio (Tier 1 capital to total assets) of 3.00%
plus an additional cushion of 100 to 200 basis points is expected. All classes
of First Banks' preferred stock qualify as Tier 1 capital under the risk-based
guidelines.
<TABLE>
<CAPTION>
At June 30, 1996 and December 31, 1995, First Banks' and the Subsidiary Banks' capital ratios were as
follows:
Risk based capital ratios
Total Tier 1 Leverage Ratio
----- ------ --------------
1996 1995 1996 1995 1996 1995
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
First Banks 9.75% 9.34% 8.36% 7.77% 5.92% 5.32%
First Bank FSB 11.31 11.90 10.06 10.80 6.58 6.74
First Bank (Illinois) 11.72 12.91 10.46 11.66 7.23 7.22
First Bank (Missouri) 10.40 10.03 9.15 8.78 7.19 7.01
FBA 14.18 11.69 12.92 10.43 8.61 8.38
CCB 17.20 15.25 15.92 13.96 11.28 9.58
FCB 6.74 4.99 5.44 3.68 3.69 2.14
St. Charles Federal 16.11 18.95 15.54 18.46 8.00 8.73
</TABLE>
FCB's capital has improved to "undercapitalized" at June 30, 1996 from
"significantly undercapitalized" at December 31, 1995 for regulatory purposes as
a result of the offering of newly-issued common stock as more fully described in
note 3 to the consolidated financial statements. The risk based total and Tier 1
capital ratios and leverage ratio for First Commercial Bank were 12.95%, 11.65%
and 7.91%, respectively, at June 30, 1996 and is considered "adequately
capitalized" for regulatory purposes.
Effects of New Accounting Standards
First Banks adopted the provisions of Statement of Financial Accounting
Standards (SFAS) 121, Accounting for the Impairment of Long-Lived Assets and for
Long-Lived Assets to Be Disposed Of (SFAS 121), on January 1, 1996. SFAS 121
<PAGE>
established accounting standards for the impairment of long-lived assets,
certain identifiable intangibles, and goodwill related to those assets to be
held and used and for long-lived assets and certain identifiable intangibles to
be disposed of.
SFAS 121 requires that long-lived assets and certain identifiable
intangibles to be held and used by an entity be reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. In performing the review for recoverability, the entity
should estimate the future cash flows expected to result from the use of the
asset and its eventual disposition. If the sum of the expected future cash flows
(undiscounted and without interest charges) is less than the carrying amount of
the asset, an impairment loss is recognized. Otherwise, an impairment loss is
not recognized. Measurement of an impairment loss for long-lived assets and
identifiable intangibles that an entity expects to hold and use should be based
on the fair value of the asset.
First Banks adopted the provisions of SFAS 122, Accounting for Mortgage
Servicing Rights (SFAS 122), on January 1, 1996. SFAS 122 amends SFAS 65,
Accounting for Certain Mortgage Banking Activities. SFAS 122 requires that a
mortgage banking enterprise recognize as separate assets rights to service
mortgage loans for others, regardless of how those servicing rights are
acquired.
A mortgage banking enterprise that acquires mortgage servicing rights
through either the purchase or origination of mortgage loans and sells or
securitizes those loans with servicing rights retained should allocate the total
cost of the mortgage loans to the servicing rights and the loans (without the
mortgage servicing rights), based on their relative fair values if it is
practicable to estimate those fair values. If it is not practicable to estimate
the fair values of the mortgage servicing rights and the mortgage loans (without
the mortgage servicing rights), the entire cost of purchasing or originating the
loans should be allocated to the mortgage loans (without the mortgage servicing
rights) and no cost should be allocated to the mortgage servicing rights.
SFAS 122 requires that a mortgage banking enterprise assess its
capitalized mortgage servicing rights for impairment based on the fair value of
those rights. The entity should stratify its mortgage servicing rights that are
capitalized after the adoption of this statement based on one or more of the
predominate risk characteristics of the underlying loans. Impairment should be
recognized through a valuation allowance for each impaired stratum.
The implementation of SFAS 121 and SFAS 122 did not have a material
effect on First Banks' consolidated financial statements.
In June 1995, the FASB issued SFAS 125, Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities (SFAS 125). SFAS
125 established accounting and reporting standards for transfers and servicing
of financial assets and extinguishment of liabilities.
The standards established by SFAS 125 are based on consistent
applications of a financial-components approach that focuses on control under
that approval, after a transfer of financial assets, an entity recognizes the
financial and servicing assets it controls and the liabilities it has incurred,
derecognizes financial assets when control has been surrendered, and
derecognizes liabilities when extinguished. This statement provides consistent
standards for distinguishing transfers of financial assets that are sales from
transfers that are secured borrowings.
SFAS 125 is effective for transfers and servicing of financial assets
and extinguisments of liabilities occurring after December 31, 1996, and is to
be applied prospectively. Earlier or retroactive application is not permitted.
First Banks does not believe the implementation of SFAS 125 will have a
material effect on its consolidated financial position or results of operation.
<PAGE>
Part II- OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
On April 17, 1996, First Banks held its annual meeting of shareholders
at which time Mr. James F. Dierberg and Mr. Allen H. Blake were appointed to
serve as Chairman and Secretary, respectively. Nominated for directors were
Messrs. James F. Dierberg, Allen H. Blake, Donald Gunn, Jr. and George Markos.
There being no further nominations, the Chairman ordered the election be
conducted and the votes of the Shareholders tallied. Mr. Blake reported that the
vote for the election of the nominated Directors was unanimous.
Item 6. Exhibits and Reports on Form 8-K
(a) These Exhibits are numbered in accordance with the Exhibit Table of Item
601 of Regulation S-K.
Exhibit
Number Description
11 Calculations of Earnings per Common Share
27 Financial Data Schedule (EDGAR only)
(b) First Banks, Inc. filed no reports on Form 8-K during the three month
and six month periods ended June 30, 1996.
<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.
FIRST BANKS, INC.
Registrant
Date: August 8, 1996 By: /s/ James F. Dierberg
---------------------
James F. Dierberg
Chairman, President and
Chief Executive Officer
Date: August 8, 1996 By: /s/ Allen H. Blake
-------------------
Allen H. Blake
Senior Vice President
and Chief Financial Officer
(Principal Financial Officer)
<PAGE>
Exhibit 11
<PAGE>
Exhibit 11
<TABLE>
<CAPTION>
FIRST BANKS, INC.
Calculation of Earnings per Share
For the Three Months Ended For the Six Months Ended
June 30, June 30,
------------------------------- ----------------------------
1996 1995 1996 1995
---- ----- ---- ----
Average shares outstanding:
<S> <C> <C> <C> <C>
Class C preferred stock 2,200,000 2,200,000 2,200,000 2,200,000
Class A preferred stock 641,082 641,082 641,082 641,082
Class B preferred stock 160,505 160,505 160,505 160,505
Common Stock 23,661 23,661 23,661 23,661
========= ============ =========== ===========
Net income $ 5,469,943 6,074,492 9,907,247 13,647,846
Preferred stock dividends:
Class C preferred stock (1,237,500) (1,237,500) (2,475,000) (2,475,000)
Class A preferred stock (128,216) (128,216) (320,541) (320,541)
Class B preferred stock (2,809) (2,809) (7,022) (7,022)
--------- -------- --------- ----------
Income available to common
stockholders $ 4,101,418 4,705.967 7,104,684 10,845,283
========= ========= ========== ==========
Primary earnings per share $ 173.34 198.89 300.27 458.36
====== ====== ====== ======
Fully diluted earnings per share:
Dividends per share:
Class C preferred stock $ 0.5625 0.5625 1.1250 1.1250
Class A preferred stock 0.2000 0.2000 0.5000 0.5000
Class B preferred stock 0.0175 0.0175 0.0437 0.0437
====== ====== ====== ======
Class A preferred stock outstanding 641,082 641,082 641,082 641,082
Book value/share of common stock,
beginning of year $ 7,038.74 6,307.84 7,038.74 6,307.84
Dilution of common equity upon
exercise of options and
warrants of subsidiary bank (41.32) (43.74) (41.32) (43.74)
--------- -------- -------- --------
$ 6,997.42 6,264.11 6,997.42 6,264.11
========= ======== ======== ========
Common stock issuable upon conversion 1,832 2,047 1,832 2,047
Shares of common stock outstanding 23,661 23,661 23,661 23,661
--------- ----------- -------- --------
25,493 25,708 25,493 25,708
========= =========== ======== ========
Net income $ 5,469,943 6,074,492 9,907,247 13,647,846
Class C preferred dividends (1,237,500) (1,237,500) (2,475,000) (2,475,000)
Class B preferred dividends (2,809) (2,809) (7,022) (7,022)
----------- ----------- --------- ----------
Fully-diluted net income $ 4,229,634 4,834,183 7,425,225 11,165,824
========== =========== ========= ==========
Fully-diluted earnings per share $ 165.91 188.04 291.26 434.34
========== =========== ========= =========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 9
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jan-01-1996
<PERIOD-END> Jun-30-1996
<CASH> 111,083
<INT-BEARING-DEPOSITS> 5,215
<FED-FUNDS-SOLD> 59,700
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 503,168
<INVESTMENTS-CARRYING> 29,749
<INVESTMENTS-MARKET> 0
<LOANS> 2,695,520
<ALLOWANCE> (45,921)
<TOTAL-ASSETS> 3,536,020
<DEPOSITS> 3,115,866
<SHORT-TERM> 136,957
<LIABILITIES-OTHER> 42,704
<LONG-TERM> 0
0
68,063
<COMMON> 5,915
<OTHER-SE> 166,515
<TOTAL-LIABILITIES-AND-EQUITY> 3,536,020
<INTEREST-LOAN> 57,773
<INTEREST-INVEST> 6,382
<INTEREST-OTHER> 1,298
<INTEREST-TOTAL> 65,453
<INTEREST-DEPOSIT> 30,909
<INTEREST-EXPENSE> 35,317
<INTEREST-INCOME-NET> 30,136
<LOAN-LOSSES> 3,100
<SECURITIES-GAINS> 88
<EXPENSE-OTHER> 24,043
<INCOME-PRETAX> 8,024
<INCOME-PRE-EXTRAORDINARY> 8,024
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,470
<EPS-PRIMARY> 173.34
<EPS-DILUTED> 165.91
<YIELD-ACTUAL> 7.97
<LOANS-NON> 36,464
<LOANS-PAST> 4,880
<LOANS-TROUBLED> 210
<LOANS-PROBLEM> 35,426
<ALLOWANCE-OPEN> 52,665
<CHARGE-OFFS> (16,434)
<RECOVERIES> 3,486
<ALLOWANCE-CLOSE> 45,921
<ALLOWANCE-DOMESTIC> 45,921
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
