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 September 30, 1994, or
Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from _______ to ___________
________________________
Commission File Number 0-12216
________________________
OLD KENT FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Michigan 38-1986608
(State of Incorporation) (I.R.S. Employer
Identification Number)
One Vandenberg Center
Grand Rapids, Michigan 49503
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code(616) 771-5000
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 periods 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 / /
The number of shares outstanding of the registrant's Common
stock, par value of $1, as of October 31, 1994, was 40,553,814 shares.
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INDEX
OLD KENT FINANCIAL CORPORATION
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets as of September 30, 1994
and December 31, 1993
Consolidated Statements of Income for the quarters
and nine months ended September 30, 1994 and 1993
Consolidated Statements of Cash Flows for the
nine months ended September 30, 1994 and 1993
Notes to consolidated financial statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
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OLD KENT FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)___________________________________________________________
<CAPTION>
September 30, December 31,
(dollars in thousands) 1994 1993
<S> <C> <C>
ASSETS:
Cash and due from banks............................................... $414,029 $371,789
Federal funds sold and resale agreements.............................. 185,037 93,200
Total cash and cash equivalents....................................... 599,066 464,989
Interest-earning deposits............................................. 1,858 32,596
Trading account securities............................................ 9,427 38,558
Mortgages held-for-sale............................................... 168,350 474,898
Securities available-for-sale:
Collateralized mortgage obligations and other mortgage-backed
securities..................................................... 385,248 394,251
Other securities................................................... 790,552 988,373
Total securities available-for-sale (amortized cost of
$1,208,546, in 1994, and market value of $1,433,744, in 1993).... 1,175,800 1,382,624
Securities held-to-maturity:
Collateralized mortgage obligations and other mortgage-backed
securities..................................................... 1,081,765 990,759
Other securities................................................... 975,896 1,193,949
Total securities held-to-maturity (market values of
$2,015,754 and $2,240,798, respectively)......................... 2,057,661 2,184,708
Loans................................................................. 6,203,422 5,016,686
Allowance for credit losses........................................... (162,117) (140,725)
Net loans............................................................. 6,041,305 4,875,961
Premises and equipment................................................ 156,262 133,888
Other assets.......................................................... 322,790 267,482
Total Assets.......................................................... $10,532,519 $9,855,704
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Deposits:
Non-interest bearing............................................... $1,249,739 $1,144,700
Interest-bearing................................................... 7,220,580 6,478,800
Foreign deposits -- interest-bearing............................... 170,168 347,652
Total deposits............................................. 8,640,487 7,971,152
Short-term borrowed funds............................................. 922,987 958,295
Other liabilities..................................................... 111,139 112,275
Long-term debt........................................................ 1,141 1,215
Total Liabilities..................................................... 9,675,754 9,042,937
Shareholders' Equity:
Preferred stock: 25,000,000 shares authorized and unissued............ -- --
Common stock, $1 par value: 150,000,000 shares authorized;
40,545,254 and 40,538,910 shares issued and outstanding ............ 40,545 40,539
Capital surplus....................................................... 118,081 120,109
Retained earnings..................................................... 719,415 652,119
Valuation adjustment of securities available-for-sale................. (21,276) --
Total Shareholders' Equity............................................ 856,765 812,767
Total Liabilities and Shareholders' Equity........................... $10,532,519 $9,855,704
</TABLE>
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<TABLE>
OLD KENT FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)___________________________________________________
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
(in thousands, except per share data) 1994 1993 1994 1993
<S> <C> <C> <C> <C>
Interest Income:
Interest and fees on loans............................$127,115 $99,178 $339,148 $301,526
Interest on mortgages available-for-sale.............. 2,926 4,305 11,732 11,369
Interest on securities available-for-sale............. 19,285 18,500 62,498 58,351
Interest on securities held-to-maturity:
Taxable............................................. 32,552 35,434 99,725 108,798
Tax-exempt.......................................... 2,694 2,639 8,216 8,044
Interest on deposits.................................. 342 1,346 882 3,447
Interest on federal funds sold and resale agreements.. 1,185 1,001 2,505 1,571
Interest on trading account securities................ 163 499 880 1,391
Total interest income................................. 186,262 162,902 525,586 494,497
Interest Expense:
Interest on domestic deposits......................... 63,537 56,010 171,408 170,834
Interest on foreign deposits.......................... 1,474 1,732 7,060 5,001
Interest on short-term borrowed funds................. 10,201 5,678 26,040 15,099
Interest on long-term debt............................ 31 34 88 230
Total interest expense................................ 75,243 63,454 204,596 191,164
Net Interest Income..................................... 111,019 99,448 320,990 303,333
Provision for credit losses............................. 5,095 6,581 15,880 26,429
Net interest income after provision
for credit losses................................... 105,924 92,867 305,110 276,904
Other Income:
Trust income.......................................... 10,885 10,123 31,929 29,718
Service charges on deposit accounts................... 8,397 7,631 24,333 22,161
Securities transactions............................... 155 1,128 781 1,122
Mortgage banking gains................................ 1,488 6,965 7,140 17,905
Mortgage loan servicing revenue....................... 3,234 2,070 9,239 6,931
Nonrecurring and OREO income.......................... 348 113 1,949 2,765
Other................................................. 14,478 11,189 38,743 30,311
Total other income.................................... 38,985 39,219 114,114 110,913
Other Expenses:
Salaries and employee benefits........................ 41,659 36,583 121,084 108,718
Occupancy expense..................................... 6,548 5,435 19,282 16,473
Equipment expense..................................... 5,584 4,520 15,953 13,483
FDIC Insurance........................................ 4,687 4,075 13,425 12,237
Nonrecurring charges.................................. --- --- --- 1,525
Other expenses........................................ 32,404 30,600 94,574 87,500
Total other expenses.................................. 90,882 81,213 264,318 239,936
Income Before Income Taxes.............................. 54,027 50,760 154,906 147,881
Income taxes.......................................... 18,523 16,867 52,211 50,463
Net Income.............................................. $35,504 $33,893 $102,695 $97,418
Per Common Share:
Net income............................................ $0.87 $0.83 $2.53 $2.39
Dividends............................................. $0.29 $0.26 $0.87 $0.78
Number of Common Shares Used to Calculate
Primary Income Per Share (in thousands)............... 40,850 40,763 40,577 40,744
See accompanying notes to consolidated financial statements.
</TABLE>
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<TABLE>
OLD KENT FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)______________________________________________________________
<CAPTION>
Nine months ended September 30 (in thousands) 1994 1993
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income...........................................................$ 102,695 $ 97,418
Adjustments to reconcile net income
to net cash provided by operating activities:
Provision for credit losses.................................... 15,880 26,429
Depreciation, amortization and accretion....................... 27,341 18,845
Net gains on sales of assets................................... (3,738) (20,685)
Net decrease (increase) in trading account securities.......... 30,061 (322)
Originations and acquisitions of mortgages held-for-sale....... (1,426,689) (1,441,510)
Sales and prepayments of mortgages held-for-sale............... 1,785,198 1,380,363
Net decrease (increase) in other assets........................ 2,530 (6,388)
Net decrease in other liabilities.............................. (54,462) (9,670)
Net cash provided by operating activities............................ 478,816 44,480
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturities and prepayments of securities available-for-sale.......... 102,679 93,865
Proceeds from sales of securities available-for-sale................. 1,636,010 303,650
Purchases of securities available-for-sale........................... (1,496,144) (438,961)
Maturities and prepayments of securities held-to-maturity............ 485,549 725,908
Proceeds from sales of securities held-to-maturity................... 646 -
Purchases of securities held-to-maturity............................. (335,429) (942,342)
Net decrease (increase) in interest-earning deposits................. 33,368 (62,179)
Net (increase) decrease in loans..................................... (830,070) 28,256
Purchases of leasehold improvements, premises and equipment, net..... (21,467) (19,793)
Acquisition of subsidiaries (net of cash acquired)................... 23,763 (7,522)
Net cash used for investing activities............................... (401,095) (319,118)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in time deposits............................................ 604,545 269,027
Decrease in demand and savings deposits.............................. (402,974) (6,600)
(Decrease) increase in short-term borrowed funds..................... (45,168) 206,356
Payments of long-term debt obligations............................... (74) (14,964)
Issuance of long-term debt obligations............................... - 72
Repurchases of common stock.......................................... (69,169) -
Proceeds from common stock issuances................................. 4,596 1,034
Dividends paid to shareholders....................................... (35,400) (31,612)
Net cash provided by financing activities............................ 56,356 423,313
Net increase in cash and cash equivalents............................ 134,077 148,675
Cash and cash equivalents at beginning of year....................... 464,989 429,378
Cash and cash equivalents at end of period...........................$ 599,066 $ 578,053
Supplemental disclosures of cash flow information:
Interest paid on deposits, short-term borrowings and
long-term debt...................................................$ 199,001 $ 188,642
Federal income taxes paid.......................................... 57,872 54,955
Significant non-cash transaction:
Stock issued to acquire subsidiary.................................$ 62,551 -
See accompanying notes to consolidated financial statements
</TABLE>
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OLD KENT FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
September 30, 1994
NOTE A: BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for
the three and nine months ended September 30, 1994 are not necessarily
indicative of the results that may be expected for the year ended December
31, 1994. For further information, refer to the consolidated financial
statements and footnotes thereto included in the Corporation's annual report
on Form 10-K for the year ended December 31, 1993.
NOTE B: LOANS AND NONPERFORMING ASSETS
The following summarizes loans and nonperforming assets at the
dates indicated (in thousands of dollars):
September 30, December 31,
Loans: 1994 1993
Commercial...................................... $1,516,842 $1,351,693
Real estate - Commercial....................... 1,229,982 1,167,979
Real estate - Construction..................... 159,507 136,565
Real estate - Residential mortgages............ 1,017,563 754,544
Real estate - Consumer home equity ............ 522,667 426,382
Consumer........................................ 1,554,550 1,062,019
Credit card loans............................... 83,915 62,396
Lease financing................................. 118,396 55,108
Total Loans..................................... $6,203,422 $5,016,686
Nonperforming assets:
Nonaccrual loans................................ $46,371 $53,330
Restructured loans.............................. 5,979 5,426
Other real estate owned......................... 9,982 9,480
Total nonperforming assets...................... $62,332 $68,236
NOTE C: ALLOWANCE FOR CREDIT LOSSES
The following summarizes the changes in the allowance for credit losses
(in thousands of dollars): For the nine months
ended September 30,
Allowance for Credit Losses 1994 1993
Balance at January 1,........................... $140,725 $120,790
Allowance of acquired entities................... 9,236 2,105
Provision for credit losses...................... 15,880 26,429
Gross loans charged-off.......................... (12,843) (18,737)
Gross recoveries of loans previously charged-off. 9,119 6,055
Balance at September 30,......................... $162,117 $136,642
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OLD KENT FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued (Unaudited)
September 30, 1994
<TABLE>
NOTE D: SECURITIES AVAILABLE-FOR-SALE
Note H to the consolidated financial statements contains further information
regarding accounting for certain investments in debt and equity securities.
The following summarizes amortized costs and estimated market values of
securities available-for-sale at the dates indicated (in thousands of dollars):
Carrying
Gross Gross Value
Amortized Unrealized Unrealized at Market
Cost Gains Losses Value
<S> <C> <C> <C> <C>
September 30, 1994:
U.S. Treasury and federal agencies..... $790,970 $4,005 $18,911 $776,064
Collateralized mortgage obligations and
other mortgage-backed securities..... 405,001 134 19,887 385,248
Equity securities...................... 12,575 1,913 0 14,488
Total securities available-for-sale.... $1,208,546 $6,052 $38,798 $1,175,800
Carrying
Value at Gross Gross
Amortized Unrealized Unrealized Market
December 31, 1993: Cost Gains Losses Value
U.S. Treasury and federal agencies..... $976,097 $50,615 $958 $1,025,754
Collateralized mortgage obligations and
other mortgage-backed securities..... 394,251 1,765 4,642 391,374
Equity securities...................... 12,276 4,340 0 16,616
Total securities available-for-sale.... $1,382,624 $56,720 $5,600 $1,433,744
</TABLE>
<TABLE>
NOTE E: SECURITIES HELD-TO-MATURITY
The following summarizes amortized costs and estimated market values of securities
held-to-maturity at the dates indicated (in thousands of dollars):
Gross Gross
Amortized Unrealized Unrealized Market
Cost Gains Losses Value
<S> <C> <C> <C> <C>
September 30, 1994:
U.S. Treasury and federal agencies........... $778,055 $9,000 $5,938 $781,117
Collateralized mortgage obligations and
other mortgage-backed securities........... 1,081,765 2,913 50,076 1,034,602
State and political subdivision securities... 197,818 4,457 2,289 199,986
Other securities............................. 23 27 1 49
Total securities held-to-maturity............ $2,057,661 $16,398 $58,304 $2,015,754
December 31, 1993:
U.S. Treasury and federal agencies........... $986,151 $40,103 $1,059 $1,025,195
Collateralized mortgage obligations and
other mortgage-backed securities........... 990,759 16,894 8,441 999,212
State and political subdivision securities... 204,685 9,019 896 212,808
Other securities............................. 3,113 471 1 3,583
Total securities held-to-maturity............ $2,184,708 $66,487 $10,397 $2,240,798
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OLD KENT FINANCIAL 'CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued (Unaudited)
September 30, 1994
NOTE F: ACQUISITIONS
Effective March 1, 1994, Old Kent purchased Princeton Financial Corp.
(Princeton) in a cash transaction. Princeton is an Orlando, Florida based
mortgage company with thirteen offices. If this purchase had been in
effect as of January 1, 1993, there would have been no material effect on
the consolidated results of operation or financial condition. At the date
of acquisition, Princeton had assets of approximately $70 million and
serviced approximately $360 million of residential mortgages for third
party investors.
Effective May 2, 1994, Old Kent acquired EdgeMark Financial Corporation
(EdgeMark) with assets of $522 million. Old Kent exchanged 1,917,566
shares of its common stock for all of the outstanding EdgeMark common stock.
The aggregate value of Old Kent common stock issued was $62.6 million. The
acquisition of EdgeMark was accounted for as a purchase. If this purchase
and related stock repurchase (Note G) had been effective as of January 1,
1993, there would have been no material effect on Old Kent's results of
operation or financial condition.
On August 24, 1994, Old Kent Financial Corporation entered into an agreement
under which it would acquire First National Bank Corp, a bank holding company
with assets of approximately $518 million, headquartered in Mount Clemens,
Michigan. First National Bank Corp has sixteen offices, all in the northern
suburban area of the Detroit market. The acquisition will be accounted for
as a pooling-of-interests and is subject to stockholder and regulatory
approvals. The acquisition is expected to be completed during the first
quarter of 1995. Old Kent expects to issue approximately 2.5 million shares
of its common stock in exchange for all of the outstanding shares of First
National Bank Corp.
NOTE G: CAPITAL STOCK
During the nine months ended September 30, 1994, Old Kent repurchased
approximately 2.1 million shares of its common stock on the open market for
an aggregate price of $69 million. The shares were purchased in connection
with the acquisition of EdgeMark Financial Corporation.
NOTE H: ACCOUNTING POLICIES
Effective January 1, 1994, Old Kent adopted the provisions of Statement of
Financial Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities". Adoption of this statement had the effect
of decreasing the carrying value of securities available-for-sale by
approximately $32.7 million and decreasing total equity by approximately
$21.3 million at September 30, 1994. Adoption of this statement had no
effect on net income or cash flows.
Effective January 1, 1994, Old Kent adopted the provisions of Statement of
Financial Accounting Standards No. 112, "Employer' Accounting for
Postemployment Benefits". Adoption of this statement had no material impact
on the consolidated financial statements included in this report.
As reflected in the accompanying consolidated balances sheets, certain
residential mortgages, held by Old Kent with the positive intent to be sold
to third party investors, have been classified as such in 1994. Financial
statements dated prior to 1994 reflect these assets as a component of total
loans.
Prior year's amounts included in these financial statements have been
reclassified to conform with the 1994 presentation to place them on a
basis comparable with the current periods' financial statements.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors which have affected the Registrant's financial condition and results
of operations during the periods included in the consolidated financial
statements included in this filing. The Registrant's forms 10-Q for the
quarterly periods ended March 31 and June 30, 1994, are herein incorporated
by reference.
RESULTS OF OPERATIONS
The Registrant's net income was $35,504,000 for the third quarter compared
to $33,893,000 for the same period in 1993. Third quarter earnings per share
was $.87, a 4.8% increase over last year's $.83. Year-to-date net income was
$102,695,000 compared to $97,418,000 a year ago and earnings per share was
$2.53, a 5.9% increase over last year's $2.39.
Total assets were $10.5 billion at quarter-end compared to 1993's third
quarter-end assets of $9.5 billion. Return on average equity for the third
quarter of 1994, excluding the effect of unrealized gains/(losses) on
securities available-for-sale was 16.36% and including this effect was
16.61%. Return on average equity for the third quarter of 1993 was 17.33%.
Return on average assets excluding the effect of unrealized gains/(losses)
on securities available-for-sale was 1.37% for the third quarter of 1994 and
including this effect was 1.38%. Return on assets was 1.45% for the third
quarter of 1993.
The Registrant's net interest income for the third quarter of 1994 was $111.0
million, a 11.6% increase over the $99.4 million recorded in the same period
of 1993. This increase primarily resulted from a 10.5% increase in average
interest earning assets and a slightly higher net interest margin of 4.66% for
the third quarter of 1994 compared to 4.63% for the third quarter of 1993.
The provision for credit losses was $5.1 million in the third quarter of 1994
and $6.6 million in the third quarter of 1993. The decrease in the provision
reflects improved asset quality. The allowance for credit losses as a
percent of loans and leases outstanding was 2.61% at September 30, 1994 and
2.77% at September 30, 1993. Nonperforming assets as a percent of total
loans was 1.00% at September 30, 1994 and 1.58% at September 30, 1993. Net
credit losses were $1,557,000 or .10% of average loans for the third quarter
of 1994 compared to $2,196,000 or .18% of average loans for the same period
a year ago.
Total other operating income, excluding security transactions and
nonrecurring items, increased 1.6% to $38.5 million during the third
quarter of 1994 over the same period a year ago. Growth occurred despite
a fall off in mortgage banking gains, which decreased $5.5 million or
78.6% from a year ago. The decrease in mortgage banking gains was largely
influenced by reduced refinancing demand coupled with the effect of a rising
interest rate environment during 1994. Mortgage servicing revenue increased
$1.2 million or 56.2% during the third quarter of 1994 over the same period
a year ago. This reflects an increase of $1.2 billion in our third party
mortgage servicing portfolio from a year ago. All other categories increased
during the third quarter as compared to the same period in 1993, including a
7.5% increase in trust income, a 10.0% increase in service charges on
deposits and a 29.4% increase in other service charges and fees. The latter
increase was mainly due to a $1.8 million increase in merchant discount
revenue on credit card transactions resulting from increased volume and
improved pricing practices. Nonrecurring and other real estate owned income
(primarily gains on sales of properties) was $348 thousand for the third
quarter 1994 compared to $113 thousand a year ago.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
The Registrant sold approximately $286.2 million of residential mortgage
loans during the quarter. The Registrant's residential third party mortgage
servicing portfolio increased 38.8% to $4.3 billion at September 30, 1994,
from $3.1 billion at September 30, 1993. This increase includes the $360
million servicing portfolio of Princeton Financial Corporation described in
Note F to the consolidated financial statements.
Total net securities gains for the third quarter of 1994 were $155,000
compared to gains of $1,128,000 for the same period of 1993.
Total operating expenses, excluding nonrecurring charges, increased during
the third quarter 11.9% over the similar period of 1993. Salaries, wages
and employee benefits increased 13.9% over 1993. The number of full-time
equivalent employees increased 6.6% (or 307) to 4,987 at September 30, 1994.
Equipment and net occupancy expenses increased 21.9% over 1993, and other
operating expenses increased 7.0% over 1993. The increase in operating
expenses includes the effect of acquisitions, as the Registrant acquired
three Michigan banking sites in the latter part of 1993, Princeton Financial
Corp. in March and EdgeMark Financial Corporation in May of 1994. Also, the
Registrant's expansion of it's operations facilities in mid-1993 influenced
other expenses and occupancy and equipment expense.
BALANCE SHEET CHANGES
Total loans increased 23.7% or $1.2 billion from year-end 1993. This
increase includes approximately $384 million in loans acquired from the
acquisition of EdgeMark Financial Corporation. Excluding this purchase,
since the beginning of the year, commercial loans have grown 6.9% and
consumer loan outstandings have grown 26.4%. The primary reason for the
significant growth in consumer loans has been strong loan demand,
particularly for automobile financings. As a result of increased loan
demand, other interest-earning assets decreased 13.7% or $576 million.
Total interest-earning assets (excluding securities available-for-sale
valuation adjustment) increased 6.6% or $611 million from year-end 1993.
Total deposits increased 8.4% or $669 million from year-end 1993.
Non-interest bearing deposits increased 9.2% or $105 million and
interest-bearing deposits increased by 8.3% or $564 million. Short-term
borrowed funds decreased 3.7% or $35 million from year-end 1993.
LIQUIDITY AND CAPITAL RESOURCES
The maintenance of an adequate level of liquidity is necessary to ensure
that sufficient funds are available to meet customer's loan demand and
deposit withdrawals. The banking subsidiaries' liquidity sources consist of
short-term marketable securities, maturing loans and federal funds loaned.
Liquidity has also been obtained through liabilities such as customer-related
core deposits, funds borrowed, certificates of deposit and public funds
deposits.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION
AND RESULTS OF OPERATIONS (CONTINUED)
At September 30, 1994, shareholders' equity was $857 million, compared to
$793 million at September 30, 1993, an increase of $64 million, or 8.1%.
Total equity at September 30, 1994 is reduced by an after-tax unrealized
loss of $21 million on securities available-for-sale (see note H to the
consolidated financial statements). Shareholders' equity as a percentage
of total assets, excluding the balance sheet effect of unrealized gains/
losses on securities available for sale as of September 30, 1994 was 8.31%.
The following table represents the Registrant's regulatory capital position
as of September 30, 1994.
Regulatory capital at September 30, 1994
(in millions) Tier 1 Total
Leverage Risk-Based Risk-Based
Ratio Capital Capital
Actual capital $777.2 $783.4 $873.3
Required regulatory minimum capital 312.8 284.7 569.4
Capital in excess of requirements $464.4 $498.7 $303.9
Actual ratio 7.43% 11.01% 12.27%
Regulatory Minimum Ratio 3.00% 4.00% 8.00%
Ratio considered "well capitalized"
by regulatory agencies 5.00% 6.00% 10.00%
During the first nine months of 1994, the Registrant repurchased
approximately 2.1 million shares of it's common stock for an aggregate
price of $69 million. As described in note G to the consolidated financial
statements, these repurchases were directly related to the Registrant's
purchase of EdgeMark Financial Corporation (note F to the consolidated
financial statements). These repurchases had the effect of decreasing book
value per common share as shown in the table below.
Book value per common share, December 31, 1993 $20.05
Net income per common share for the nine months
ended September 30, 1994 (including $.03 estimated
beneficial effect of common stock repurchased
during the period) 2.53
Dividends per common share (.87)
Effect of adoption of SFAS 115 as of January 1, 1994 to
include valuation adjustment of securities
available-for-sale (.52)
Effect of common stock repurchases during the
first nine months of 1994 (1.71)
Effect of stock issuances during the first nine months of 1994 1.66
Book value per common share, September 30, 1994 $21.14
<PAGE>
PART II OTHER INFORMATION
Item 1. Legal Proceedings.
This item is inapplicable or is omitted pursuant to the
instructions to Part II.
Item 2. Changes in Securities.
This item is inapplicable or is omitted pursuant to the
instructions to Part II.
Item 3. Defaults on Senior Securities.
This item is inapplicable or is omitted pursuant to the
instructions to Part II.
Item 4. Submission of Matters to a Vote of Security Holders.
This item is inapplicable or is omitted pursuant to the
instructions to Part II.
Item 5. Other Information.
This item is inapplicable or is omitted pursuant to the
instructions to Part II.
Item 6. Exhibits and Reports on Form 8-K.
a.) Exhibits.
Exhibit 11 - Statement Re Computation of Earnings
Per Share.
Exhibit 27 - Financial Data Schedules
b.) Reports on Form 8-K.
No Form 8-K was filed during the third quarter
of 1994.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act o
the registrant has duly caused this report to be signed on it
by the undersigned thereunto duly authorized.
OLD KENT FINANCIAL CORPORATION
Date: November 15, 1994 /s/ John C. Canepa
--------------------------------
Chairman of the Board
and Chief Executive Officer
Date: November 15, 1994 /s/ Richard W. Wroten
----------------------------------
Executive Vice President and
Chief Financial Officer
<PAGE>
<TABLE>
EXHIBIT 11
OLD KENT FINANCIAL CORPORATION
EARNINGS PER SHARE CALCULATIONS - PRIMARY AND FULLY DILUTED
<CAPTION>
Three Months Ended September 30 Nine Months Ended September 30
1 9 9 4 1 9 9 3 1 9 9 4 1 9 9 3
<S> <C> <C> <C> <C>
P R I M A R Y
NET INCOME...................... $35,504,000 $33,893,000 $102,695,000 $97,418,000
Deduct dividends on
preferred stock............... - 0 - - 0 - - 0 - - 0 -
INCOME FOR PRIMARY
E.P.S. CALCULATION............. $35,504,000 $33,893,000 $102,695,000 $97,418,000
Average common
shares outstanding............. 40,583,800 40,513,158 40,330,021 40,489,189
Common stock equivalents........ 265,759 249,749 247,451 255,213
SHARES FOR PRIMARY
E.P.S. CALCULATION............. 40,849,559 40,762,907 40,577,472 40,744,402
PRIMARY E.P.S................... $0.87 $0.83 $2.53 $2.39
F U L L Y D I L U T E D
NET INCOME...................... $35,504,000 $33,893,000 $102,695,000 $97,418,000
Add back interest on convertible
debt (net of income tax)...... 0 0 0 0
INCOME FOR FULLY DILUTED
E.P.S. CALCULATION............. $35,504,000 $33,893,000 $102,695,000 $97,418,000
Average common
shares outstanding............. 40,583,800 40,513,158 40,330,021 40,489,189
Common stock equivalents........ 265,759 249,749 247,451 255,213
Additional common shares
issuable to debt holders...... 0 0 0 0
SHARES FOR FULLY DILUTED
E.P.S. CALCULATION............. 40,849,559 40,762,907 40,577,472 40,744,402
FULLY DILUTED E.P.S............. $0.87 $0.83 $2.53 $2.39
</TABLE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 9
<LEGEND> This schedule contains summary financial information extracted
from SEC Form 10-Q and is qualified in its entirety by reference
to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<PERIOD-TYPE> 9-MOS
<PERIOD-END> 09-30-94
<CASH> 414,029
<INT-BEARING-DEPOSITS> 7,390,748
<FED-FUNDS-SOLD> 185,037
<TRADING-ASSETS> 9,427
<INVESTMENTS-HELD-FOR-SALE> 1,175,800
<INVESTMENTS-CARRYING> 2,057,661
<INVESTMENTS-MARKET> 2,015,755
<LOANS> 6,203,422
<ALLOWANCE> 162,117
<TOTAL-ASSETS> 10,532,519
<DEPOSITS> 8,640,487
<SHORT-TERM> 922,987
<LIABILITIES-OTHER> 111,139
<LONG-TERM> 1,141
<COMMON> 40,545
0
0
<OTHER-SE> 816,220
<TOTAL-LIABILITIES-AND-EQUITY> 10,532,519
<INTEREST-LOAN> 339,148
<INTEREST-INVEST> 182,171
<INTEREST-OTHER> 4,267
<INTEREST-TOTAL> 525,586
<INTEREST-DEPOSIT> 178,468
<INTEREST-EXPENSE> 204,596
<INTEREST-INCOME-NET> 320,990
<LOAN-LOSSES> 15,880
<SECURITIES-GAINS> 781
<EXPENSE-OTHER> 264,318
<INCOME-PRETAX> 154,906
<INCOME-PRE-EXTRAORDINARY> 102,695
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 120,695
<EPS-PRIMARY> 2.53
<EPS-DILUTED> 2.53
<YIELD-ACTUAL> 4.62
<LOANS-NON> 46,371
<LOANS-PAST> 10,216
<LOANS-TROUBLED> 5,979
<LOANS-PROBLEM> 76,914
<ALLOWANCE-OPEN> 140,725
<CHARGE-OFFS> 12,843
<RECOVERIES> 9,919
<ALLOWANCE-CLOSE> 162,117
<ALLOWANCE-DOMESTIC> 162,117
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
