SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) October 18, 1999
KEYSTONE FINANCIAL, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 0-11460 23-2289209
(State or other jurisdiction (Commission File Number) (IRS Employer ID No.)
of incorporation)
One Keystone Plaza, P.O. Box 3660, Harrisburg, Pennsylvania 17105-3660
(Address of principal executive offices) (ZIP CODE)
Registrant's telephone number including area code: (717) 233-1555
<PAGE>
Item 5. Other Events
The following document is filed as an exhibit to this Form 8-K:
I. Press Release of Keystone Financial, Inc.
dated October 18, 1999.
II. Fiscal Insight
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 hereunto duly authorized.
Keystone Financial, Inc.
(Registrant)
Date: October 18, 1999 Donald F. Holt
-------------------------------
Executive Vice President &
Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
99.1 Press Release of Keystone Financial, Inc. dated
October 18, 1999.
99.2 Fiscal Insight
<PAGE>
For further information, contact:
Donald F. Holt,
Executive Vice President &
Chief Financial Officer
(717) 231-5704
KEYSTONE FINANCIAL REPORTS THIRD QUARTER/NINE MONTHS RESULTS
HARRISBURG, PA Oct. 18 - Keystone Financial, Inc. (NASDAQ: KSTN), today reported
third quarter earnings of 49 cents per share, exclusive of special charges
associated with its year-long restructuring effort. These results represented
net income of $23.9 million and a return on average assets (ROA) and return on
average equity (ROE) of 1.40 percent and 16.33 percent, respectively. Reported
results were in line with a previously issued earnings update, which described
ongoing strategic initiatives designed to grow market share, manage funding
costs, and improve performance.
Keystone previously announced plans to combine its separate banks into a single
bank charter in order to improve performance. This restructuring effort remains
on schedule to be completed by the end of 1999. Keystone incurred special
charges of $2.2 million during the third quarter in connection with the
restructuring. The third quarter charges were incurred coincident with the
conversions to the single bank and consisted primarily of nonrecurring costs
associated with the name change. Including these charges, third quarter results
reflected an earnings per share of 46 cents and an ROA and ROE of 1.31 percent
and 15.37 percent, respectively.
For the nine months ended September 30, 1999, operating earnings exclusive of
special charges of $22 million were $69.6 million or $1.41 per diluted share,
compared with $75.0 million, or $1.44 per share, for the first nine months of
1998. These earnings resulted in a 1.38 percent ROA and a 15.69 percent ROE,
versus 1.46 percent and 14.72 percent, respectively, in the corresponding period
last year.
At the close of the quarter, the company's assets totaled $6.9 billion
consisting primarily of loans of $4.4 billion. Deposits totaled $4.9 billion.
Keystone Financial, Inc. is the holding company for Keystone Financial Bank,
N.A., which has 175 branches throughout Pennsylvania, Maryland and West Virginia
and a Mobile Bank which operates throughout the tri-state area. Keystone also
operates Martindale Andres & Co., an investment management services provider;
Keystone Financial Mortgage Co,; MMC&P, a retirement benefit services firm;
Keystone Brokerage, Inc., offering full service investment planning and discount
brokerage; and a 24-hours-a-day, seven days a week Telephone Banking Center.
For more information, visit the company's web site on the Internet at
www.keyfin.com.
<PAGE>
KEYSTONE FINANCIAL, INC.
Financial Highlights (Unaudited)
For the Three Months Ended For the Nine Months Ended
9/30/99(a) 9/30/98 9/30/99(a) 9/30/98
-------------------------- -------------------------
Net income $23,912,000 $25,581,000 $69,649,000 $74,998,000
Basic earnings per share $.49 $.50 $1.42 $1.46
Diluted earnings per share $.49 $.50 $1.41 $1.44
Average shares outstanding 48,583,000 51,368,000 48,909,000 51,540,000
- --------------------------------------------------------------------------------
(a) 1999 amounts exclude special charges associated with the restructuring
which reduced diluted EPS by $0.25 in the first quarter, $0.01 in the
second quarter, and $0.03 in the third quarter.
######
1999
Financial Highlights
(dollars in thousands, except per share data)
<TABLE>
Quarter Ended September 30, Year-To-Date
Earnings 1999 1998 Change 1999 1998 Change
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Interest Income (1) $67,359 $71,584 (6)% $200,983 $215,276 (7)%
Provision for Credit Losses 3,290 3,081 7 9,903 13,517 (27)
Noninterest Income 26,202 24,310 8 80,513 70,965 13
Net Securities Gains 729 3,444 (79) 1,174 10,357 (89)
Noninterest Expense:
As reported 56,602 56,130 1 187,482 167,705 12
Excluding special charges (3) 54,387 56,130 (3) 165,469 167,705 (1)
Net Income:
As reported 22,472 25,581 (12) 54,991 74,998 (27)
Excluding special charges (3) 23,912 25,581 (7) 69,649 74,998 (7)
Earnings Per Share:
Basic:
As reported $0.46 $0.50 (8)% $1.12 $1.46 (23)%
Excluding special charges (3) 0.49 0.50 (2) 1.42 1.46 (3)
Diluted:
As reported 0.46 0.50 (8) 1.12 1.44 (22)
Excluding special charges (3) 0.49 0.50 (2) 1.41 1.44 (2)
Dividends Per Share 0.29 0.28 4 0.87 0.84 4
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
Quarter Ended September 30, Year-To-Date
1999 1998 1999 1998
------------------------------- ---- --------------------------------- ----------
Excluding Excluding
Performance Indicators As Reported Special Charges(3) As Reported Special Charges(3)
- -------------------------------------------------------------- ---- ----------------------------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Return on Average Assets 1.31% 1.40% 1.47% 1.09% 1.38% 1.46%
Return on Average Equity 15.37 16.33 14.99 12.54 15.69 14.72
Net Interest Margin 4.26 4.26 4.39 4.26 4.26 4.45
Provision for Credit Losses/
Average Loans (2) 0.30 0.30 0.27 0.30 0.30 0.39
Noninterest Expense/Revenues 60.50 58.13 58.53 66.60 58.78 58.59
- -------------------------------------------------------------- --------------------------------------- ----------
</TABLE>
<TABLE>
September 30,
At Period End 1999 1998 Change
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Investments $1,758,893 $1,788,986 (2)%
Loans 4,388,555 4,552,173 (4)
Total Assets 6,877,563 6,906,404 -
Deposits 4,913,753 5,146,364 (5)
Shareholders' Equity 585,844 688,219 (15)
Book Value per Share $12.04 $13.39
Equity to Assets Ratio 8.52% 9.96%
Risk Adjusted Capital/Assets Ratio 12.57 13.90
Asset Quality
- --------------------------------------------------------------------------------
Nonperforming Assets to Loans 0.82% 0.71%
Loans 90 Days Past Due 0.44 0.55
- --------------------------------------------------------------------------------
Total Risk Elements to Loans 1.26% 1.26%
- --------------------------------------------------------------------------------
Allowance for Credit Losses to Loans 1.35% 1.36%
Allowance to Nonperforming Loans 182 246
Net Charge-Offs to Average Loans (2) 0.37 0.34
- --------------------------------------------------------------------------------
(1) Fully taxable-equivalent
(2) Annualized
(3) Special charges incurred in 1999 are primarily associated with the unifi-
cation of Keystone's seven banks under a single charter.
</TABLE>
FINANCIAL HIGHLIGHTS
Keystone recognized third quarter earnings of $0.49 per share, exclusive of
special charges associated with its year-long restructuring effort. These
results represented net income of $23.9 million and an ROA and ROE of 1.40% and
16.33%, respectively. Reported results were in line with a previously issued
earnings update, which described on-going strategic initiatives designed to grow
market share, manage funding costs, and improve performance.
At the end of 1998, Keystone announced plans to combine its separate banks into
a single bank charter in order to reduce operating expenses by 10% and improve
business line execution. This restructuring effort remains on schedule to be
completed by the end of 1999. During the third quarter, Keystone incurred
special charges of $2.2 million in connection with the restructuring. These
charges were incurred coincident with the conversions to the single bank and
consisted primarily of nonrecurring marketing costs associated with the
introduction of the Keystone Financial Bank name and branding efforts. Including
these charges, third quarter results reflected an EPS of $0.46 and an ROA and
ROE of 1.31% and 15.37%, respectively.
For the nine months ended September 30, 1999, operating earnings exclusive of
special charges of $22 million were $69.6 million or $1.41 per diluted share,
compared with $75.0 million or $1.44 per share for the first nine months of
1998. These earnings resulted in a 1.38% ROA and a 15.69% ROE versus 1.46% and
14.72%, respectively, in the corresponding period last year.
Quarterly results reflected a number of favorable performance trends including
increased net interest income from last quarter, continued strength in
noninterest income, and controlled operating expense levels. Asset quality, as
reflected in the absolute measures of delinquent loans and total risk elements,
resulted in an improved credit quality profile.
<TABLE>
1999 1998
- -----------------------------------------------------------------------------------------------------------------------------------
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter Annual
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Earnings per share - basic $0.46 * $0.49 * $0.17 * $0.48 $0.50 $1.94
Earnings per share - diluted $0.46 * $0.49 * $0.17 * $0.48 $0.50 $1.92
Return on average assets 1.31%* 1.45%* 0.50%* 1.42% 1.47% 1.45%
Return on average equity 15.37%* 17.19%* 5.50%* 14.36% 14.99% 14.63%
Net interest margin 4.26% 4.31% 4.22% 4.33% 4.39% 4.42%
Noninterest income/revenues 28.01% 29.98% 27.78% 27.63% 25.35% 25.51%
Provision for credit losses/average loans 0.30% 0.36% 0.24% 0.32% 0.27% 0.37%
Noninterest expense/revenues 60.50%* 56.55%* 83.19%* 57.15% 58.53% 58.22%
Nonperforming assets to loans 0.82% 0.73% 0.78% 0.65% 0.71% -
90 day past due loans to loans 0.44% 0.56% 0.57% 0.64% 0.55% -
- -----------------------------------------------------------------------------------------------------------------------------------
Total risk elements to loans 1.26% 1.29% 1.35% 1.29% 1.26% -
===================================================================================================================================
Allowance for credit losses to loans 1.35% 1.35% 1.36% 1.35% 1.36% -
Allowance for credit losses to
nonperforming loans 182% 206% 195% 242% 246% -
Net charge-offs/average loans 0.37% 0.35% 0.28% 0.39% 0.34% 0.46%
Equity to assets 8.52% 8.54% 8.54% 9.50% 9.96% -
- ------------------------------------------------------------------------------------------------------------------------------------
*Excluding special charges associated with the restructuring, various operating
performance ratios for 1999 were as follows:
</TABLE>
Third Second First
Quarter Quarter Quarter
- --------------------------------------------------------------------------------
Earnings per share - basic $0.49 $0.50 $0.43
Earnings per share - diluted $0.49 $0.50 $0.42
Return on average assets 1.40% 1.48% 1.26%
Return on average equity 16.33% 17.49% 13.81%
Noninterest expense/revenues 58.13% 55.87% 62.46%
- --------------------------------------------------------------------------------
PER SHARE STATISTICS
Diluted Earnings per Share
- -------------------------------------------------------------------------------
Fourth Third Second First
Quarter Quarter Quarter Quarter Total
- -------------------------------------------------------------------------------
1999 $0.46 $0.49 $0.17 $1.12
1998 $0.48 $0.50 $0.48 $0.46 $1.92
1997 $0.49 $0.47 $0.29 $0.43 $1.68
- -------------------------------------------------------------------------------
Average Diluted Shares Outstanding
- --------------------------------------------------------------------------------
Fourth Third Second First Average
Quarter Quarter Quarter Quarter For Year
- --------------------------------------------------------------------------------
1999 48,836,000 48,927,000 50,115,000 49,295,000
1998 51,624,000 51,875,000 52,095,000 52,557,000 52,042,000
1997 52,611,000 52,463,000 51,943,000 52,256,000 52,320,000
- --------------------------------------------------------------------------------
Book Value per Share
- --------------------------------------------------------------------------------
Fourth Third Second First
Quarter Quarter Quarter Quarter
- --------------------------------------------------------------------------------
1999 $12.04 $11.89 $11.99
1998 $13.12 $13.39 $13.05 $13.13
1997 $13.18 $13.06 $12.77 $12.59
- --------------------------------------------------------------------------------
QUARTER-END INFORMATION
<TABLE>
(dollars in thousands) 1999 1998
- ------------------------------------------------------------------------------------------------
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Loans $4,388,555 $4,432,600 $4,413,283 $4,459,783 $4,552,173
Earning assets 6,372,096 6,263,529 6,349,615 6,473,174 6,438,770
Intangible assets 56,172 57,247 58,324 60,371 61,466
Total assets 6,877,563 6,748,497 6,829,509 6,968,227 6,906,404
Deposits 4,913,753 5,026,958 5,109,821 5,231,718 5,146,364
Long-term debt
(excluding FHLB) 129,938 129,955 130,096 130,239 130,670
Total shareholders' equity 585,844 576,151 583,350 661,665 688,219
Unrealized securities gains
(losses), net (10,619) (6,666) 1,468 6,284 10,108
- ------------------------------------------------------------------------------------------------
Number of shares outstanding 48,647,898 48,456,882 48,673,031 50,434,735 51,386,653
- ------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
QUARTER-END CAPITAL RATIOS
1999 1998
- -------------------------------------------------------------------------------------------
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Equity to assets 8.52% 8.54% 8.54% 9.50% 9.96%
Tier one capital/Risk adjusted assets 11.33% 11.38% 11.13% 12.59% 12.65%
Total capital/Risk adjusted assets 12.57% 12.63% 12.37% 13.84% 13.90%
Leverage ratio 8.04% 7.93% 7.78% 8.66% 9.01%
- -------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
CONDENSED CONSOLIDATED QUARTERLY AVERAGE
STATEMENTS OF CONDITION
(dollars in thousands) 1999 1998
- ------------------------------------------------------------------------------------------------------------
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
- ------------------------------------------------------------------------------------------------------------
Earning Assets:
Loans and leases $4,395,983 $4,418,446 $4,444,509 $4,493,990 $4,554,806
Loans held for resale 97,311 92,352 81,314 87,263 72,627
Federal funds sold and other 116,712 50,215 103,007 83,559 84,252
Taxable investment securities 1,449,896 1,442,224 1,544,018 1,596,077 1,567,520
Nontaxable investment securities 241,912 223,986 205,976 205,849 209,497
- ------------------------------------------------------------------------------------------------------------
Total earning assets 6,301,814 6,227,223 6,378,824 6,466,738 6,488,702
Cash and due from banks 204,265 205,248 182,718 178,087 172,584
Allowance for credit losses (60,300) (60,087) (60,978) (62,043) (63,175)
Intangible assets 56,692 57,765 59,853 60,898 62,095
Other assets 284,622 264,280 226,585 283,774 247,304
- ------------------------------------------------------------------------------------------------------------
TOTAL ASSETS $6,787,093 $6,694,429 $6,787,002 $6,927,454 $6,907,510
- ------------------------------------------------------------------------------------------------------------
LIABILITIES AND EQUITY
- ------------------------------------------------------------------------------------------------------------
Interest-bearing liabilities:
Deposits less than $100,000:
Now/Savings accounts $790,241 $812,437 $808,068 $803,592 $813,752
Money market accounts 795,353 783,236 774,232 762,234 748,922
Time deposits 2,495,748 2,545,283 2,602,634 2,630,606 2,654,977
Deposits greater than $100,000 250,330 269,040 283,292 316,273 319,874
Short-term borrowings 361,677 357,295 353,721 363,110 389,728
FHLB Borrowings 534,614 405,461 421,325 426,774 387,293
Long-term debt, other 129,948 130,030 130,190 130,606 130,997
- -----------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities 5,357,911 5,302,782 5,373,462 5,433,195 5,445,543
- -----------------------------------------------------------------------------------------------------------
Noninterest-bearing deposits 691,552 682,793 661,527 663,716 641,680
Other liabilities 157,477 144,222 138,410 146,612 143,192
- -----------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES 6,206,940 6,129,797 6,173,399 6,243,523 6,230,415
- -----------------------------------------------------------------------------------------------------------
Shareholders' equity 580,153 564,632 613,603 683,931 677,095
- -----------------------------------------------------------------------------------------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $6,787,093 $6,694,429 $6,787,002 $6,927,454 $6,907,510
- -----------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
CHANGE IN AVERAGE BALANCES (1)
1999 1998
- ------------------------------------------------------------------------------------------------------------
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Loans -3.5% -4.9% -4.8% -4.9% -2.4%
Total assets -1.7% -2.6% -0.2% 2.2% 1.5%
Deposits -3.0% -2.0% -1.6% -0.9% -2.0%
Shareholders' equity -14.3% -16.9% -10.7% -0.1% 1.5%
- ------------------------------------------------------------------------------------------------------------
(1) Compares current quarter to the comparable quarter of the prior year.
</TABLE>
<TABLE>
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in thousands) 1999 1998
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter Annual
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest income $121,957 $119,410 $120,577 $127,639 $130,808 $518,331
Tax equivalent adjustment 2,128 2,180 2,070 2,049 2,178 8,569
- ------------------------------------------------------------------------------------------------------------------------
124,085 121,590 122,647 129,688 132,986 526,900
Interest expense 56,726 54,666 55,947 59,430 61,402 241,366
- ------------------------------------------------------------------------------------------------------------------------
Net interest income 67,359 66,924 66,700 70,258 71,584 285,534
Provision for credit losses 3,290 3,950 2,663 3,633 3,081 17,150
- ------------------------------------------------------------------------------------------------------------------------
Net interest income after provision 64,069 62,974 64,037 66,625 68,503 268,384
Noninterest income 26,202 28,655 25,656 26,830 24,310 97,795
Security transactions 729 20 425 661 3,444 11,018
Noninterest expense 56,602 54,046 76,834 55,484 56,130 223,189
- ------------------------------------------------------------------------------------------------------------------------
Income before income taxes 34,398 37,603 13,284 38,632 40,127 154,008
Income taxes 9,798 11,219 2,899 11,834 12,368 45,692
Tax equivalent adjustment 2,128 2,180 2,070 2,049 2,178 8,569
- ------------------------------------------------------------------------------------------------------------------------
NET INCOME $22,472 $24,204 $8,315 $24,749 $25,581 $99,747
- ------------------------------------------------------------------------------------------------------------------------
Tax effect of security transactions $255 $7 $149 $231 $1,205 $3,856
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
ANALYSIS OF NONINTEREST INCOME
(dollars in thousands) 1999 1998
- --------------------------------------------------------------------------------------------------------------------
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter Annual
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Trust and investment advisory fees $6,784 $7,326 $6,674 $6,281 $6,580 $25,906
Service charges on deposit accounts 4,822 4,458 4,337 4,794 4,899 18,443
Fee income 7,668 6,860 6,259 6,516 6,473 24,548
Mortgage banking income 2,374 3,479 3,582 3,003 3,138 12,412
Reinsurance income 856 1,045 847 1,021 720 3,167
Other income 3,698 5,487 3,957 5,215 2,500 13,319
- --------------------------------------------------------------------------------------------------------------------
Total noninterest income $26,202 $28,655 $25,656 $26,830 $24,310 $97,795
- --------------------------------------------------------------------------------------------------------------------
Noninterest income to average assets(1) 1.53% 1.72% 1.53% 1.54% 1.40% 1.42%
- --------------------------------------------------------------------------------------------------------------------
(1) Annualized
</TABLE>
<TABLE>
ANALYSIS OF NONINTEREST EXPENSE
(dollars in thousands) 1999 1998
- ------------------------------------------------------------------------------------------------------------------
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter Annual
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Salaries expense $22,383 $21,952 $23,831 $23,965 $24,821 $97,443
Employee benefits 3,812 3,979 5,623 3,538 4,342 17,535
Occupancy expense 4,378 4,494 4,739 4,206 4,299 17,302
Furniture and equipment expense 5,152 5,158 5,370 5,153 5,160 20,567
Special charges 2,215 650 19,148 --- --- ---
Other expense 18,662 17,813 18,123 18,622 17,508 70,342
- ------------------------------------------------------------------------------------------------------------------
Total noninterest expense $56,602 $54,046 $76,834 $55,484 $56,130 $223,189
- ------------------------------------------------------------------------------------------------------------------
Noninterest expense to average assets(1)(2) 3.18% 3.20% 3.45% 3.18% 3.22% 3.25%
- ------------------------------------------------------------------------------------------------------------------
Noninterest expense to revenues (2) 58.13% 55.87% 62.46% 57.15% 58.53% 58.22%
- ------------------------------------------------------------------------------------------------------------------
E.O.P. full-time equivalent employees 2,517 2,598 2,707 2,965 3,010
- ------------------------------------------------------------------------------------------------------------------
(1) Annualized
(2) Excluding special charges
</TABLE>
<TABLE>
NET INTEREST INCOME ANALYSIS
Third Quarter
- -------------------------------------------------------------------------------------------------------
1999 1998
- -------------------------------------------------------------------------------------------------------
(dollars in thousands) Amount Rate Amount Rate Change
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest income:*
Loans - Commercial $17,439 8.23% $17,867 8.76% $ (428)
Commercial - Real Estate 34,254 8.42 34,489 9.08 (235)
Consumer - Mortgage 13,601 7.75 15,193 7.90 (1,592)
Consumer 28,222 9.06 33,989 9.21 (5,767)
Loans held for resale 2,070 8.51 1,498 8.18 572
Investments 26,952 6.36 28,760 6.42 (1,808)
Federal funds sold and other 1,547 5.30 1,190 5.51 357
- -------------------------------------------------------------------------------------------------------
124,085 7.83 132,986 8.14 (8,901)
- -------------------------------------------------------------------------------------------------------
Interest expense:
Deposits - NOW/Savings 2,770 1.39 3,160 1.54 (390)
Money Market 5,951 2.97 5,425 2.87 526
Time 34,200 4.94 40,092 5.34 (5,892)
Short-term borrowings 4,174 4.58 4,725 4.81 (551)
FHLB borrowings 7,753 5.75 5,651 5.79 2,102
Long-term debt, other 1,876 5.73 2,349 7.11 (473)
- -------------------------------------------------------------------------------------------------------
56,726 4.20 61,402 4.47 (4,678)
- -------------------------------------------------------------------------------------------------------
Net interest income $67,359 $71,584 $ (4,225)
- -------------------------------------------------------------------------------------------------------
Spread 3.63 3.67
- -------------------------------------------------------------------------------------------------------
Net interest margin 4.26% 4.39%
- -------------------------------------------------------------------------------------------------------
*Fully taxable equivalent
</TABLE>
<TABLE>
Year-to-Date
- ----------------------------------------------------------------------------------------------------------
1999 1998
- ----------------------------------------------------------------------------------------------------------
(dollars in thousands) Amount Rate Amount Rate Change
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Interest income:*
Loans - Commercial $51,785 8.11% $54,806 8.80% $ (3,021)
Commercial - Real Estate 100,954 8.51 101,752 9.12 (798)
Consumer - Mortgage 41,108 7.77 46,669 7.95 (5,561)
Consumer 85,860 9.09 103,940 9.15 (18,080)
Loans held for resale 5,562 8.21 3,789 8.07 1,773
Investments 79,639 6.24 82,399 6.57 (2,760)
Federal funds sold and other 3,414 5.10 3,857 5.54 (443)
- ----------------------------------------------------------------------------------------------------------
368,322 7.81 397,212 8.22 $ (28,890)
- ----------------------------------------------------------------------------------------------------------
Interest expense:
Deposits - NOW/Savings 8,857 1.47 9,633 1.55 (776)
Money Market 16,700 2.85 15,477 2.82 1,223
Time 104,245 4.95 121,445 5.41 (17,200)
Short-term borrowings 11,679 4.37 13,746 4.85 (2,067)
FHLB borrowings 19,311 5.68 15,368 5.81 3,943
Long-term debt, other 6,545 6.73 6,267 7.25 278
- ----------------------------------------------------------------------------------------------------------
167,339 4.19 181,936 4.49 (14,597)
- ----------------------------------------------------------------------------------------------------------
Net interest income $200,983 $215,276 $ (14,293)
- ----------------------------------------------------------------------------------------------------------
Spread 3.62 3.73
- ----------------------------------------------------------------------------------------------------------
Net interest margin 4.26% 4.45%
- ----------------------------------------------------------------------------------------------------------
*Fully taxable equivalent
</TABLE>
<TABLE>
PERIOD-END LOAN PORTFOLIO ANALYSIS
(dollars in thousands) 1999 1998
- ----------------------------------------------------------------------------------------------------------------
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Commercial:
Commercial and industrial $ 625,162 $ 648,804 $ 625,183 $ 615,925 $ 664,818
Floor plan financing 156,965 180,601 189,538 167,762 151,025
Obligations of political subdivisions 62,212 62,722 62,993 63,487 67,197
- ----------------------------------------------------------------------------------------------------------------
844,339 892,127 877,714 847,174 883,040
- ----------------------------------------------------------------------------------------------------------------
Commercial real estate:
Commercial and industrial 1,366,960 1,346,405 1,320,740 1,299,052 1,264,061
Multi-family residential 79,864 79,903 72,576 76,752 84,881
Obligations of political subdivisions 46,855 54,748 51,025 47,493 47,799
Construction and land development 107,765 108,098 101,946 95,279 99,696
Agricultural 13,931 13,421 12,217 11,873 10,470
- ------------------------------------------------------------------------------------------------------------------
1,615,375 1,602,575 1,558,504 1,530,449 1,506,907
- ------------------------------------------------------------------------------------------------------------------
Consumer:
Real estate 703,083 694,684 710,836 754,280 771,668
Installment 420,343 458,420 503,265 543,513 592,461
Home equity 570,106 538,398 503,087 508,729 506,429
Personal lines of credit 40,177 39,411 39,218 39,754 39,053
Lease financing 195,132 206,985 220,659 235,884 252,615
- ------------------------------------------------------------------------------------------------------------------
1,928,841 1,937,898 1,977,065 2,082,160 2,162,226
-----------------------------------------------------------------------------------------------------------------
Total Loans $ 4,388,555 $ 4,432,600 $ 4,413,283 $ 4,459,783 $ 4,552,173
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
RISK ELEMENTS ANALYSIS
(dollars in thousands) 1999 1998
- ----------------------------------------------------------------------------------------------------------
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Nonperforming assets:
Nonaccrual loans $ 31,659 $ 28,177 $ 30,307 $ 24,675 $ 24,607
Troubled debt restructurings 854 952 431 264 588
Other real estate 3,488 3,339 3,677 3,982 7,008
- ----------------------------------------------------------------------------------------------------------
Total nonperforming assets 36,001 32,468 34,415 28,921 32,203
Loans 90 days or more past due 19,290 24,757 25,435 28,549 25,091
- ---------------------------------------------------------------------------------------------------------
Total risk elements $ 55,291 $ 57,225 $ 59,850 $ 57,470 $ 57,294
- ---------------------------------------------------------------------------------------------------------
Delinquent loans to period-end loans* 1.71% 1.75% 1.80% 1.99% 1.80%
- ---------------------------------------------------------------------------------------------------------
Nonperforming assets to period-end loans 0.82% 0.73% 0.78% 0.65% 0.71%
- ---------------------------------------------------------------------------------------------------------
Total risk elements to period-end loans 1.26% 1.29% 1.35% 1.29% 1.26%
- ---------------------------------------------------------------------------------------------------------
*The numerator consists of loans 30 days or more past due.
</TABLE>
<TABLE>
COMPONENTS OF NONPERFORMING ASSETS
(dollars in thousands) 1999 1998
- ---------------------------------------------------------------------------------------------------
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Commercial $ 13,944 $ 9,259 $ 10,418 $ 10,066 $ 10,658
Commercial real estate 14,097 14,943 15,100 10,581 10,788
Consumer 4,472 4,927 5,220 4,292 3,749
- ---------------------------------------------------------------------------------------------------
Nonaccrual and restructured loans 32,513 29,129 30,738 24,939 25,195
Other real estate 3,488 3,339 3,677 3,982 7,008
- ---------------------------------------------------------------------------------------------------
Total nonperforming assets $ 36,001 $ 32,468 $ 34,415 $ 28,921 $ 32,203
- ---------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
ALLOWANCE FOR CREDIT LOSSES
(dollars in thousands) 1999 1998
- --------------------------------------------------------------------------------------------
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance at beginning of period $ 59,971 $ 59,857 $ 60,274 $ 61,933 $ 62,777
Loans charged-off:
Commercial (697) (426) (773) (536) (852)
Real estate secured (822) (577) (900) (1,379) (1,038)
Consumer (2,671) (2,952) (1,888) (2,926) (2,582)
Lease financing (410) (480) (146) (14) (73)
- --------------------------------------------------------------------------------------------
Total loans charged-off (4,600) (4,435) (3,707) (4,855) (4,545)
- --------------------------------------------------------------------------------------------
Recoveries:
Commercial 38 34 112 73 89
Real estate secured 62 276 306 57 150
Consumer 317 249 171 248 354
Lease financing 32 40 38 62 27
- ---------------------------------------------------------------------------------------------
Total recoveries 449 599 627 440 620
- ---------------------------------------------------------------------------------------------
Net loans charged-off (4,151) (3,836) (3,080) (4,415) (3,925)
Provision for credit losses 3,290 3,950 2,663 3,633 3,081
Other - - - (877) -
- ---------------------------------------------------------------------------------------------
Balance at end of period $ 59,110 $ 59,971 $ 59,857 $ 60,274 $ 61,933
- ---------------------------------------------------------------------------------------------
Net loans charged-off to
average loans* 0.37% 0.35% 0.28% 0.39% 0.34%
- ---------------------------------------------------------------------------------------------
Provision for credit losses
to average loans* 0.30% 0.36% 0.24% 0.32% 0.27%
- ---------------------------------------------------------------------------------------------
Allowance for credit losses
to loans 1.35% 1.35% 1.36% 1.35% 1.36%
- ---------------------------------------------------------------------------------------------
*Annualized
</TABLE>
<TABLE>
OTHER RATIOS
1999 1998
- -------------------------------------------------------------------------------------
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Investment portfolio - market to
amortized cost 98.7% 99.2% 100.5% 101.1% 101.8%
Dividend payout ratio 63.0% 58.0% 170.6%* 60.4% 56.0%
Loans to deposits ratio, average 87.5% 86.8% 86.6% 86.8% 87.9%
- -------------------------------------------------------------------------------------
* Excluding the special charges, dividend payout ratio would have been 67.4%.
</TABLE>
<TABLE>
FEE GENERATION ACTIVITY
(dollars in thousands) 1999 1998
- --------------------------------------------------------------------------------------------
Third Second First Fourth Third
Quarter Quarter Quarter Quarter Quarter
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Mortgage loans originated $ 138,235 $ 148,657 $ 117,875 $ 146,726 $ 114,308
Mortgage loans sold 76,447 118,951 85,451 104,984 76,970
End of period mortgages
serviced for others 996,855 982,885 977,742 956,613 989,279
End of period indirect loans
securitized & serviced 24,341 29,252 37,543 46,985 57,058
- --------------------------------------------------------------------------------------------
</TABLE>
Market Price and Dividends Declared
- -------------------------------------------------------------
Closing Bid Price Range
- -------------------------------------------------------------
Dividends
Quarter High Low Declared
- -------------------------------------------------------------
1999
- -------------------------------------------------------------
I $37.19 $32.25 $0.29
II 33.06 29.50 0.29
III 29.56 23.75 0.29
- -------------------------------------------------------------
$0.87
- -------------------------------------------------------------
- -------------------------------------------------------------
1998
- -------------------------------------------------------------
I $42.00 $36.00 $0.28
II 41.53 34.00 0.28
III 37.13 27.88 0.28
IV 37.00 25.72 0.29
- -------------------------------------------------------------
$1.13
- -------------------------------------------------------------
1997
- -------------------------------------------------------------
I $28.00 $24.88 $0.26
II 33.25 24.50 0.26
III 38.88 30.56 0.26
IV 41.00 34.00 0.28
- -------------------------------------------------------------
$1.06
- -------------------------------------------------------------
