<PAGE>
===========================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: April 15, 1999
OLD KENT FINANCIAL CORPORATION
(Exact name of registrant as
specified in its charter)
MICHIGAN 0-14591 38-1986608
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification no.)
incorporation)
111 LYON STREET, N.W.
GRAND RAPIDS, MICHIGAN 49503
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code: (616) 771-5000
<PAGE>
Item 5. OTHER EVENTS.
On April 15, 1999, Old Kent Financial Corporation issued the
press release attached as Exhibit 99 to this Form 8-K.
Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION, AND
EXHIBITS.
(c) Exhibits:
99 Press Release dated April 15, 1999.
-2-
<PAGE>
SIGNATURE
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.
Dated: April 15, 1999 OLD KENT FINANCIAL CORPORATION
(Registrant)
By: /S/ ALBERT T. POTAS
Albert T. Potas
Senior Vice President
-3-
<PAGE>
EXHIBIT INDEX
EXHIBIT NUMBER DOCUMENT
99 Press Release dated April 15, 1999.
<PAGE>
EXHIBIT 99
NYSE: OK
FOR RELEASE: Immediate
DATE: April 15, 1999
CONTACT: Albert T. Potas
(616) 771-1931
OLD KENT REPORTS RECORD EARNINGS - EPS OF $.56
- 19% INCREASE IN FIRST QUARTER EPS FOR OLD KENT -
- RETURN ON EQUITY OF 21% -
- NONINTEREST REVENUES INCREASED 26% -
GRAND RAPIDS, MICHIGAN -- Old Kent reported record operating
results for the three months ended March 31, 1999. David Wagner, Chairman,
President and CEO said "Old Kent is off to a great start toward achieving
its earnings growth aspirations in 1999."
FIRST QUARTER 1999 FINANCIAL HIGHLIGHTS:
- - Earnings per share was $0.56 for the first quarter of 1999, a 19.1%
increase over 1998.
- - Net income was $58.6 million, or 13.7% more than the prior year's
first three months.
- - Noninterest revenues grew 26% and represented 38.6% of total revenues,
up from 33.5% last year.
- - Return on average total equity was 21.11% compared to 17.54% for the
first quarter of 1998.
- - Return on average total assets was 1.44% versus 1.30% for the
preceding year's first quarter.
- - Commercial loans increased to over $5.6 billion at March 31, 1999, up
2.1% since year-end 1998.
- - Consumer loans totaled nearly $2.7 billion at March 31, 1999, up 12.5%
since the year started.
- - Credit quality remained strong -- net losses down to 0.27% of average
loans.
Mr. Wagner attributed the strong quarterly performance to "the
continued development of Old Kent's sales culture, a diverse and growing
revenue stream, the effectiveness of its credit underwriting, and improved
efficiency in Old Kent's core banking businesses." He added, "Our
integration of First Evergreen Corporation was successful and contributed
to our first quarter earnings. The cost savings are fully in place and we
will soon begin to see some revenue enhancements as well. Additionally,
deposit balances have increased in both our Michigan and Illinois markets."
- - more -
<PAGE>
REVENUES:
Total noninterest revenues, exclusive of security transactions and
nonrecurring items, was $95.8 million for the first quarter of 1999, 26%
more than last year's first quarter.
Old Kent's mortgage banking business continued to produce strong
results with revenues of $43.5 million for the first quarter of 1999
compared to $29.9 million for the same period in 1998, an increase of
45.6%. Residential mortgage production for the first three months of 1999
was $3.6 billion, up from $3.0 billion last year. These increases were the
result of a favorable business climate and continued expansion of Old Kent
Mortgage Company which now operates from 160 nationwide offices, compared
to 114 lending sites twelve months ago.
Investment management and trust revenues totaled $17.5 million for the
quarter ended March 31, 1999 and represented a 23.2% increase over last
year's first quarter. This increase reflected the effects of aggressive
sales and business development efforts over the past several quarters.
EXPENSES:
Total noninterest expenses were $148.8 million for the quarter ended
March 31, 1999, 9.2% more than in the same 1998 period. This increase was
entirely related to Old Kent Mortgage Company's continued geographical
expansion, high production volumes and successful revenue generation as
noted above.
In the first quarter of 1999, Old Kent Bank began realizing one
hundred percent of the operating cost savings associated with its
acquisition of First Evergreen Corporation in the previous quarter. This
amounted to over $3 million for the quarter and will exceed $12 million for
the year 1999. The savings primarily resulted from the elimination of
redundant operations of the former First Evergreen Bank, and consequently
created an overall reduction in operational costs from both the first and
fourth quarter of 1998 for Old Kent Bank. The efficiency ratio for Old
Kent's banking businesses was 53.4% for the first quarter of 1999, improved
from 53.8% in the fourth quarter of 1998 and 54.6% for the year ago
quarter.
ASSET QUALITY:
The Corporation's provision for credit losses was $6.9 million for the
first quarter of 1999, down substantially from $15.4 million for the same
period in 1998 and also below the $7.5 million (operating basis) credit
loss provision for the fourth quarter of 1998. Net loan losses for the
first quarter of 1999 totaled $6 million compared to $10 million for the
last year's first quarter. This decrease in net loan losses is the direct
result of Old Kent's continuing emphasis on strong underwriting practices
and its efforts over several quarters to remove marginal credit assets from
- - more -
<PAGE>
its balance sheet. At March 31, 1999, the allowance for credit losses was
1.81% of total loans, compared to 1.86% at March 31, 1998, and to 1.89% at
December 31, 1998. Nonperforming assets were $66 million at March 31,
1999, or .41% of total assets compared to $66.7 million, or .40% of total
assets at the end of 1998.
YEAR 2000 READINESS DISCLOSURE:
On March 31, 1999, the Corporation was fully compliant on all "mission
critical" computer system applications and 85% compliant on non-critical
applications. Management expects the Corporation to be fully compliant on
non-critical applications by mid-1999, and plans to continue detailed
"event level testing" and to enhance existing contingency plans throughout
the year. Through March 31, 1999, Old Kent had cumulatively spent
approximately $13.5 million of its original $16 million total estimate for
"Y2K" related expenditures.
STOCK REPURCHASE PROGRAM:
As of March 31, 1999, the Corporation had repurchased 4.9 million
shares of its common stock under a June 1998 authorization for 6 million
shares. As in prior programs, shares are acquired ratably on a quarterly
basis primarily for anticipated future stock dividends. Old Kent
anticipates concluding repurchase activity under this authorization within
the next three months.
PENDING ACQUISITIONS:
On February 24, 1999, the Corporation announced that it would acquire
CFSB Bancorp Inc. ("CFSB"), the parent of Community First Bank (Lansing,
Michigan), in a "pooling of interests" transaction. At March 31, 1999,
CFSB had total assets of $889 million, deposits of $580 million, and 16
mid-Michigan banking locations. The acquisition will place Old Kent first
in deposit market share and residential mortgage lending in the Lansing
area.
On March 19, 1999, Old Kent announced that it would acquire Pinnacle
Banc Group, Inc., ("Pinnacle"), a bank holding company headquartered in the
Chicago suburb of Oak Brook, Illinois. This transaction is also intended
to be a "pooling of interests." At March 31, 1999, Pinnacle's assets
totaled $1,045 million and its deposits were $872 million. Its banks
operate thirteen branches in the Chicago metropolitan area and three in
western Illinois. Upon consummation, Old Kent would rank fifth in deposit
market share for the greater Chicago area.
The Corporation expects to complete both transactions during the third
quarter of 1999 with anticipated pre-tax merger related charges totaling
$26 million, and aggregate cost savings of $15.5 million to be realized in
the twelve months following consummation. Old Kent's management believes
that these mergers will be accretive to earnings per share for the year
2000 by four percent.
- - more -
<PAGE>
DESCRIPTION OF OLD KENT:
Old Kent is a financial services company headquartered in Grand
Rapids, Michigan, with a 40 year history of consecutive increases in annual
per share earnings and dividends. It operates 234 full service banking
offices in Michigan, Illinois, and Indiana as well as 160 mortgage lending
sites throughout the United States. At March 31, 1999, Old Kent had total
assets of $15.9 billion.
<TABLE>
<CAPTION>
PERCENTAGE
EARNINGS SUMMARY: 1999 1998 <FA> <FB> CHANGE
- ----------------- ---- -------------- ----------
<S> <C> <C> <C>
QUARTER ENDED MARCH 31:
Basic Earnings per Share $0.56 $0.47 19.1%
Diluted Earnings per Share 0.56 0.47 19.1%
Net Income $58,603,000 $51,523,000 13.7%
BALANCE SHEET DATA AT MARCH 31:
Commercial Loans $5,620,553,000 $5,369,322,000 4.7%
Consumer Loans 2,662,451,000 2,421,729,000 9.9%
Residential Mortgage Loans 1,023,480,000 1,110,362,000 -7.8%
Total Loans 9,306,484,000 8,901,413,000 4.6%
Total Interest-earning Assets 14,445,616,000 14,863,511,000 -2.8%
Core Deposits 11,235,087,000 10,954,524,000 2.6%
Total Deposits 12,490,645,000 12,001,082,000 4.1%
Total Assets 15,911,816,000 16,147,378,000 -1.5%
Shareholders' Equity 1,098,966,000 1,203,323,000 -8.7%
<FN>
<Fa> adjusted to reflect a five percent stock dividend paid July 17, 1998.
<Fb> restated to include First Evergreen Corporation acquired October 1,
1998, in a "pooling-of-interests" transaction.
</FN>
</TABLE>
- ---------------------------------------------------------------------------
FORWARD LOOKING STATEMENT
This press release contains certain forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include expressions such as "expects",
"intends", "believes", "should" and that the company is "fully Year 2000
compliant", which are necessarily statements of belief as to the expected
outcomes of future events. Actual results could materially differ from
those presented. Internal and external factors that might cause such a
difference include, but are not limited to, (1) expected cost savings from
the merger might not be fully realized within the expected time frame, (2)
the ability of other companies on which the Corporation relies to modify or
- - more -
<PAGE>
convert their systems to be Year 2000 compliant, and (3) the ability to
locate and correct all relevant computer codes and similar uncertainties.
Actual results could materially differ from those contained in, or implied
by such statements. Old Kent undertakes no obligation to release revisions
to these forward looking statements or reflect events or circumstances
after the date of this release.
- ---------------------------------------------------------------------------
# # #
