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 March 31, 1994, or
Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from _______ to ___________
________________________
Commission File Number 0-12216
________________________
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, without par value, as of April 30, was 39,525,626 shares.
<PAGE>
INDEX
OLD KENT FINANCIAL CORPORATION
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated Balance Sheets as of March 31, 1994
and December 31, 1993
Consolidated Statements of Income for the quarter
ended March 31, 1994 and 1993
Consolidated Statements of Cash Flows for the
three months ended March 31, 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 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
OLD KENT FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets (Unaudited)___________________________________
March 31, December 31,
(dollars in thousands) 1994 1993
ASSETS:
Cash and due from banks....................... $339,928 $371,789
Federal funds sold and resale agreements...... 187,200 93,200
---------- ----------
Total cash and cash equivalents............... 527,128 464,989
Interest-earning deposits..................... 7,752 32,596
Trading account securities.................... 67,807 38,558
Mortgages held-for-sale....................... 306,929 474,898
Securities available-for-sale:
Collateralized mortgage obligations and
other mortgage-backed securities....... 307,917 394,251
Other securities........................... 1,213,878 988,373
---------- ----------
Total securities available-for-sale
(amortized cost of $1,513,210, in 1994,
and market value of $1,433,744, in 1993).. 1,521,795 1,382,624
Securities held-to-maturity:
Collateralized mortgage obligations
other mortgage-backed securities....... 1,020,351 990,759
Other securities........................... 1,234,736 1,193,949
---------- ----------
Total securities held-to-maturity
(market values of $2,268,599 and
$2,240,798, respectively)................. 2,255,087 2,184,708
Loans......................................... 5,120,767 5,016,686
Allowance for credit losses................... (144,899) (140,725)
---------- ----------
Net loans..................................... 4,975,868 4,875,961
---------- ----------
Premises and equipment........................ 136,486 133,888
---------- ----------
Other assets.................................. 301,313 267,482
Total Assets.................................. $10,100,165 $9,855,704
========== =========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Liabilities:
Deposits:
Non-interest bearing....................... $1,086,048 $1,144,700
Interest-bearing........................... 6,674,408 6,478,800
Foreign deposits -- interest-bearing....... 425,399 347,652
---------- ----------
Total deposits........................... 8,185,855 7,971,152
Short-term borrowed funds..................... 962,997 958,295
Other liabilities............................. 143,615 112,275
Long-term debt................................ 1,193 1,215
---------- ----------
Total Liabilities............................. 9,293,660 9,042,937
---------- ----------
Shareholders' Equity:
Preferred stock: 25,000,000 shares authorized. -- --
Common stock, $1 par value: 150,000,000
shares authorized; 39,508,864 and 40,538,910
shares issued and outstanding............... 39,509 40,539
Capital surplus............................... 89,157 120,109
Retained earnings............................. 672,258 652,119
Valuation adjustment of securities
available-for-sale.......................... 5,581 --
---------- ----------
Total Shareholders' Equity.................... 806,505 812,767
---------- ----------
Total Liabilities and Shareholders' Equity... $10,100,165 $9,855,704
========== =========
See accompanying notes to consolidated financial statements
<PAGE>
OLD KENT FINANCIAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited)_______________________________
For the Three Months
Ended March 31,
(in thousands, except per share data) 1994 1993
Interest Income:
Interest and fees on loans............................ $99,030 $100,601
Interest on mortgages held-for-sale................... 4,945 2,599
Interest on securities available for sale............. 22,490 19,925
Interest on securities held-to-maturity:
Taxable........................................... 33,319 35,931
Tax exempt........................................ 2,769 2,810
Interest on deposits.................................. 179 1,140
Interest on federal funds sold and resale agreements.. 562 171
Interest on trading account securities................ 469 481
------- -------
Total interest income................................. 163,763 163,658
------- -------
Interest Expense:
Interest on domestic deposits......................... 52,241 57,476
Interest on foreign deposits.......................... 2,958 1,771
Interest on short-term borrowed funds................. 7,040 4,484
Interest on long-term debt............................ 25 161
------- -------
Total interest expense................................ 62,264 63,892
------- -------
Net Interest Income..................................... 101,499 99,766
Provision for Credit Losses............................. 4,514 9,449
------- -------
Net interest income after provision
for credit losses................................... 96,985 90,317
------- -------
Other Income:
Trust income.......................................... 10,312 9,948
Service charges on deposit accounts................... 7,434 6,987
Securities transactions............................... (574) 101
Gains on sales of residential mortgages............... 1,462 3,961
Mortgage servicing revenue............................ 2,697 2,354
Nonrecurring revenue.................................. -- 2,089
Other................................................. 12,403 10,128
------- -------
Total other income.................................... 33,734 35,568
------- -------
Other Expenses:
Salaries and employee benefits........................ 38,004 36,058
Occupancy expense..................................... 6,206 5,557
Equipment expense..................................... 5,048 4,627
FDIC deposit insurance................................ 4,273 4,083
Nonrecurring charges.................................. -- 1525
Other expenses........................................ 29,593 26,669
------- -------
Total other expenses.................................. 83,124 78,519
------- -------
Income Before Income Taxes.............................. 47,595 47,366
Income taxes.......................................... 15,886 17,262
------- -------
Net Income.............................................. $31,709 $30,104
======= =======
Net Income Per Common Share............................. $0.79 $0.74
Dividends Per Common Share.............................. $0.29 $0.26
Number of Shares Used to Calculate
Net Income Per Common Share (Thousands)............... 40,107 40,731
See accompanying notes to consolidated financial statements
<PAGE>
OLD KENT FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
March 31, 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 months ended March 31, 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):
March 31, December 31,
Loans: 1994 1993
Commercial.................................. $1,458,694 $1,351,693
Real estate - Commercial................... 1,125,982 1,167,979
Real estate - Construction................. 138,024 136,565
Real estate - Residential mortgages........ 694,323 754,544
Real estate - Consumer home equity ........ 426,736 426,382
Consumer.................................... 1,148,237 1,062,019
Credit card loans........................... 64,133 62,396
Lease financing............................. 64,638 55,108
Total Loans................................. $5,120,767 $5,016,686
Nonperforming assets:
Nonaccrual loans............................ $42,565 $53,330
Restructured loans.......................... 5,354 5,426
Other real estate owned..................... 15,351 9,480
Total nonperforming assets.................. $63,270 $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 three months
ended March 31,
Allowance for Credit Losses 1994 1993
Balance at January 1,...................... $140,725 $120,790
Allowance of acquired institution........... 176 2,105
Provision for credit losses................. 4,514 9,449
Net loan charge-off's....................... (516) (4,888)
Balance at March 31,........................ $144,899 $127,456
<PAGE>
OLD KENT FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued (Unaudited)
March 31, 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):
<CAPTION>
Carrying
Gross Gross Value
Amortized Unrealized Unrealized at Market
Cost Gains Losses Value
<S> <C> <C> <C> <C>
March 31, 1994:
U.S. Treasury and federal agencies.......... $1,193,016 $26,502 $11,792 $1,207,726
Collateralized mortgage obligations and
other mortgage-backed securities.......... 307,917 353 9,343 298,927
Equity securities........................... 12,277 2,865 -- 15,142
Total securities available-for-sale......... $1,513,210 $29,720 $21,135 $1,521,795
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 -- 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):
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Market
March 31, 1994: Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Treasury and federal agencies.......... $1,011,591 $22,674 $3,533 $1,030,732
Collateralized mortgage obligations and
other mortgage-backed securities.......... 1,020,351 10,453 19,911 1,010,893
State and political subdivision securities.. 220,448 5,714 1,890 224,272
Other securities............................ 2,697 50 45 2,702
Total securities held-to-maturity........... $2,255,087 $38,891 $25,379 $2,268,599
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
</TABLE>
<PAGE>
OLD KENT FINANCIAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- Continued (Unaudited)
March 31, 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, subsequent to the date of these financial
statements, Old Kent acquired EdgeMark Financial Corporation (EdgeMark).
Old Kent is obligated to exchange approximately 1,917,772 shares of its
common stock for all of the outstanding EdgeMark common stock
(approximately 1,461,939 shares) upon surrender by their holders. The
aggregate value of Old Kent Common Stock to be issued is approximately
$62.5 million. The acquisition of EdgeMark will be accounted for as a
purchase. When acquired, EdgeMark had total assets of approximately
$522 million. This acquisition is not expected to have a material
effect on Old Kent's future results of operation or financial condition.
NOTE G: CAPITAL STOCK
During the three months ended March 31, 1994, Old Kent repurchased
approximately 1.1 million shares of its common stock on the open market
for an aggregate price of approximately $33.3 million. The primary
purpose of these transactions was to accumulate shares in anticipation
of those expected to be issued in connection with the acquisition of
EdgeMark. Old Kent intends to repurchase additional shares after March
31, 1994 until that purpose is fulfilled.
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 increasing the carrying value of securities available-
for-sale by approximately $8.6 million and increasing total equity by
approximately $5.6 million at March 31, 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.
RESULTS OF OPERATIONS
The Registrant's net income was $31,709,000 for the first quarter compared
to $30,104,000 for the same period in 1993. First quarter earnings per
share was $.79, a 6.8% increase over last year's $.74.
Total assets were approximately $10.1 billion at quarter end, compared to
1993's first quarter-end assets of $9.1 billion. Return on average equity
for the first quarter of 1994 was 15.81% and return on average assets was
1.30% (calculated on a basis excluding the balance sheet effect of
unrealized gains/(losses) on securities available-for-sale). For the first
three months of 1993, return on average equity was 16.39% and return on
average assets was 1.36%
The Registrant's net interest income for the first quarter of 1994 was
$101.5 million, a 1.7% increase over the $99.8 million recorded in the same
period of 1993. This increase primarily resulted from a 11.3% increase in
average interest earning assets, which was partially offset by a decrease
of 43 basis points in the net interest margin. The net interest margin for
the first quarter of 1994 was 4.53% compared to 4.96% for the first three
months of 1993. In general, the decrease in the net interest margin is
attributable to the higher proportion of interest-earning assets invested
in securities, coupled with the effect of an extended period of low
interest rates.
The provision for credit losses was $4.5 million in the first quarter of
1994 and $9.5 million in the first quarter of 1993. This decrease was made
possible because of improved asset quality. The allowance for credit
losses as a percent of loans and leases outstanding was 2.83% at March 31,
1994 and 2.61% at March 31, 1993. Nonperforming assets as a percent of
total loans was 1.24% at March 31, 1994 and 1.66% at March 31, 1993. Net
credit losses were $516,000 or .04% of average loans for the first quarter
of 1994. For the same prior year period, net credit losses were $4,888,000
or .40% of average loans.
Total other operating income, excluding security transactions and
nonrecurring items, increased to $34.3 million during the first quarter of
1994, a 2.8% increase over the first quarter of 1993. Growth occurred
despite a fall off on gains on sales of residential mortgages, which
decreased $2.5 million or 63.1% from a year ago. The decrease in gains on
sales of residential mortgages was largely influenced by reduced
refinancing demand coupled with the effect of a rising interest rate
environment during the first quarter of 1994. All other categories
increased during the first quarter, compared to the same period in 1993,
including an 3.7% increase in trust income, a 6.4% increase in service
charges on deposits, a 14.6% increase in mortgage servicing revenue and a
22.5% increase in other service charges and fees. This latter increase was
mainly due to a $1.2 million, or 35.5% increase in merchant discount
revenue on credit card transactions. This improvement resulted from
increased volume and improved pricing practices.
The Registrant sold approximately $700.0 million of residential
mortgage loans during the quarter. The Registrant's residential mortgage
servicing portfolio increased 47% to $4.0 billion at March 31, 1994, from
$2.7 billion at March 31, 1993. This increase includes the $360 million
servicing portfolio of Princeton Financial Corp. described in footnote F to
the consolidated financial statements.
Total net securities losses for the first quarter of 1994 was $574,000
compared to net securities gains of $101,000 for the same period of 1993.
Total operating expenses, excluding nonrecurring charges, increased during
the first quarter 8.0% over the same period in 1993. Salaries, wages and
employee benefits increased 5.4% over 1993. The number of full-time
equivalent employees increased 4.2% (or 195) to 4,835 at March 31, 1993.
Equipment and net occupancy expenses increased 10.5% over 1993. Other
operating expenses increased 11.0% over 1993. The increase in operating
expenses includes the effect of acquisitions, as the Registrant acquired
three banking sites in the latter part of 1993 and Princeton Financial
Corp. in early 1994. Also, the Registrant's expansion of it's operations
facilities in mid-1993 influenced occupancy and equipment expenses.
BALANCE SHEET CHANGES
Total loans increased 2.3% or $104 million from year-end 1993. Commercial
loans have grown at an annualized rate of 8.4% and consumer loan
outstandings have grown at an annualized rate of 18.3% since the beginning
of the year. Other interest-earning assets increased 3.3% or $140 million.
Total interest-earning assets increased 2.6% or $244 million from year-end
1993.
Total deposits increased 2.7% or $215 million from year-end 1993. Non-
interest bearing deposits decreased 5.1% or $59 million and interest-
bearing deposits increased by 4.0% or $273 million. Short-term borrowed
funds remained at similar levels at March 31, 1994, and December 31, 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.
At March 31, 1994, shareholders' equity was $807 million, compared to $746
million at March 31, 1993, an increase of $60 million, or 8.1%. Total
equity at March 31, 1994 includes an (after-tax) unrealized gain of $5.6
million on securities available-for-sale (see note H to the consolidated
financial statements). Shareholders' equity as a percentage of total assets
as of March 31, 1994 was 7.99%. The following table represents the
Registrant's regulatory capital position as of March 31, 1994.
Regulatory capital at March 31, 1994
(in millions) Tier 1 Total
Leverage Risk-Based Risk-Based
Ratio Capital Capital
Actual capital $748.4 $755.9 $834.8
Required regulatory minimum capital 301.4 249.8 499.6
Capital in excess of requirements $447.0 $506.1 $335.2
Actual ratio 7.50% 2.11% 3.37%
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 quarter of 1994, the Registrant repurchased approximately
1.1 million shares of it's common stock for an aggregate price of $33.3
million. As described in note G to the consolidated financial statements,
these repurchases 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 three months
ended March 31, 1994 (including $.01 estimated
beneficial effect of common stock repurchased
during the period)................................... .79
Dividends per common share.............................. (.29)
Effect of common stock repurchases during the
first quarter of 1994............................... (.28)
Book value per common share, March 31, 1994............. $20.27
The Registrant expects that by June 30, 1994, the overall effect of common
stock repurchases on book value per common share during the first half of
1994, will be largely offset by the issuance of common stock to acquire
EdgeMark.
<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.
OLD KENT FINANCIAL CORPORATION
Date: May 12, 1994 /s/ John C. Canepa
----------------------------
John C. Canepa
Chairman of the Board
and Chief Executive Officer
Date: May 12, 1994 /s/ Richard W. Wroten
----------------------------
Richard W. Wroten
Executive Vice President and
Chief Financial Officer
<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.
The registrant's annual meeting of shareholders was held on
April 18, 1994. The election of directors and procedural
matters were voted upon. The Directors were approved by the
following votes.
Votes Cast
-------------------
Election of Directors For Withheld
---------- --------
All nominees for director
were elected:
Mr. Earl D. Holton 33,373,110 251,134
Mr. Michael J. Jandernoa 33,398,454 225,790
Mr. Jerry K. Myers 33,401,308 222,936
Mr. B.P. Sherwood, III 33,396,182 228,062
The terms of office of the following directors continued after
the meeting:
John M. Bissel Percy A. Pierre, Ph. D.
John D. Boyles Robert L. Sadler
John C. Canepa Peter F. Secchia
John P. Keller Martha L. Thornton
William U. Parfet David J. Wagner
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.
b.) Reports on Form 8-K.
No Form 8-K was filed during the first quarter of 1994.
<PAGE>
EXHIBIT INDEX
Exhibit Page Number
11 Statement of Earnings per Share 15
EXHIBIT 11 -- PROFORMA COMPARISON
OLD KENT FINANCIAL CORPORATION
EARNINGS PER SHARE CALCULATIONS - PRIMARY AND FULLY DILUTED
Three Months Ended March 31
1 9 9 4 1 9 9 3
P R I M A R Y
NET INCOME.............................. $31,709,000 $30,104,000
Deduct dividends on preferred stock..... - 0 - - 0 -
INCOME FOR PRIMARY
E.P.S. CALCULATION..................... $31,709,000 $30,104,000
Average common shares outstanding....... 39,902,157 40,460,515
Common stock equivalents................ 205,132 270,980
SHARES FOR PRIMARY
E.P.S. CALCULATION..................... 40,107,289 40,731,495
PRIMARY E.P.S........................... $0.79 $0.74
F U L L Y D I L U T E D
NET INCOME.............................. $31,709,000 $30,104,000
Add back interest on convertible
debt (net of income tax).............. 0 0
INCOME FOR FULLY DILUTED
E.P.S. CALCULATION..................... $31,709,000 $30,104,000
Average common shares outstanding....... 39,902,157 40,460,515
Common stock equivalents................ 205,132 270,980
Additional common shares
issuable to debt holders.............. 0 0
SHARES FOR FULLY DILUTED
E.P.S. CALCULATION..................... 40,107,289 40,731,495
FULLY DILUTED E.P.S..................... $0.79 $0.74
