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Previous: OLD KENT FINANCIAL CORP /MI/, 8-K, 2000-01-24 |
Next: WINLAND ELECTRONICS INC, 8-A12B, 2000-01-24 |
| OLD
KENT
Old Kent Financial Corporation |
|
| News Release |
| NYSE: | OK |
| FOR RELEASE: | Immediate |
| DATE: | January 19, 2000 |
| CONTACT: | Albert T. Potas |
| (616) 771-1931 |
Old Kent Extends Record with 1999 Earnings Increase
- Diluted Operating EPS of $2.26 for the Year and $.60 for the Fourth
Quarter -
Grand Rapids, Michigan -- Old Kent Financial Corporation made 1999 its forty-first year of consecutive increases in per share earnings and dividends. Mr. David Wagner, Chairman, President and CEO, described the achievement as "a solid finish to a year filled with accomplishment and growth for Old Kent.''
Year ended December 31, 1999:
Excluding charges related to acquisitions completed by Old Kent in both 1999
and 1998:
* Diluted operating earnings per share was $2.26, a 15.3% increase over
1998.
* Operating earnings were $270.1 million, or 10.3% more than last year.
* Total revenues (taxable equivalent basis) increased 9.7%, excluding
security gains.
* Noninterest revenues grew 18.2% and represented 37.5% of total revenues
compared to 34.8% for 1998.
* Return on average total equity was 21.46%, compared to 18.31% for 1998.
* Return on average total assets was 1.49%, up from 1.38% for 1998.
* Commercial loans grew by $1.1 billion, or 18.9%, and consumer loans
increased $1.0 billion, or 39.8%.
* Credit quality improved; net loan losses were 0.20% of average total
loans, compared to 0.40% for 1998.
After-tax merger related charges recognized by the Corporation were $17.6 million (or $.15 per share) in 1999 and $19.7 million (or $.15 per share) in 1998. Inclusive of these charges, diluted earnings per share was $2.11 for 1999, 16.6% more than 1998. Net income for 1999 was $252.5 million, up 12.1% from net income of $225.3 million for 1998.
Mr. Wagner stated that "Profitable growth best summarizes our accomplishments this past year. Old Kent has grown its franchise, acquiring two banking organizations and announcing two other mergers that will close in early 2000. Old Kent achieved growth in net interest income while also significantly boosting noninterest revenues. Strong loan growth in our loan portfolios has favorably influenced net interest income and help offset the industry wide margin pressures created by rising interest rates.''
"The significant growth in our loan portfolio coming from new customers will
benefit future periods as we cultivate more extensive relationships with these
clients. We continue to develop a true performance culture across the organization
which, when combined with our growing markets, will be the fundamental driver
of superior performance at Old Kent,'' Wagner added.
Quarter ended December 31, 1999:
Excluding the impact of merger related charges recognized in the fourth quarter of 1998:
* Diluted earnings per share was $.60, a 15.4% increase compared to the
same period in 1998.
* Net income was $71.2 million, or 12% more than last year's fourth
quarter.
* Return on average total equity was 23.24%, compared to 19.03% for the
fourth quarter of 1998.
* Return on average total assets was 1.59%, up from 1.41% for the
preceding year's same period.
* The net interest margin was 4.25%, down from 4.33% in the third quarter
of 1999 and up from 4.06% for the quarter ended December 31, 1998.
* Non-interest revenues were 38.1% of total revenues compared to 35.6%
for the final quarter of 1998.
* The efficiency ratio was 57.76% on a consolidated basis and 50.19% for
Old Kent's banking businesses.
* Net loans charged off were $9.2 million, or 0.32% of average loans,
compared to $11.6 million, or 0.45% of average loans, for the three
month period ended December 31, 1998.
Revenues
Total (taxable equivalent basis) revenues, excluding security transactions and non-recurring items, increased by 9.7% to $1.1 billion in 1999. Total noninterest revenues, exclusive of security transactions, were $416.8 million in 1999, 18.2% greater than last year. Net interest income rose by 5.1% to $693.9 million on a fully taxable equivalent basis. The net interest margin for 1999 was 4.20% compared to 4.04% for 1998. These increases were largely the result of improvements in the Corporation's mix of interest earning assets related to growth in commercial and consumer loans. The increase in noninterest income was attributable to ongoing efforts aimed at building fee based revenues. In 1999, these fee based revenues represented 37.5% of total revenues, up from 34.8% in 1998.
Old Kent's mortgage banking business performed well during 1999 with a 28% increase in total revenues. This improvement was largely due to the lower interest rate environment during the first six months of the year which enabled strong residential loan production volume, particularly mortgage refinancings. During 1999, Old Kent Mortgage Company ("OKMC'') originated approximately $12.1 billion of residential mortgages, down from $13.5 billion in 1998 when interest rates were generally lower throughout the entire year. Interest rate increases during the last half of 1999 had the effect of dramatically reducing the demand for refinancing and negatively impacted revenues related to mortgage loan origination. The rate increases had the opposite effect on mortgage servicing revenues, as prepayment levels slowed, strengthening the value of Old Kent's mortgage servicing right assets ("MSRs''). At December 31, 1999, the market value of MSRs was $323 million, well above their carrying value of $275 million. In response to slowdowns in mortgage demand precipitated by the higher rates, Old Kent Mortgage Company has been adjusting its production capacity accordingly. At December 31, 1999, Old Kent had 147 nationwide mortgage lending sites and 2,778 employees, compared to 167 such sites and 3,014 employees at June 30, 1999, when OKMC was at its peak capacity.
Investment management and trust revenues totaled $73.8 million for the year
ended December 31, 1999, an 11.4% increase over last year. The increase is attributable
to the effects of aggressive business development efforts along
with expanded product and service offerings. These included: additional choices
in the Corporation's proprietary family of mutual funds, The Kent Funds, along
with specialized advisory services in Old Kent's trust function. Deposit account
revenues increased by 8.3% to $69.7 million in 1999. This increase included
the results of programs which were designed to establish deeper relationships
with our depository customers. Old Kent increased the average profit per household
by 3.3% during 1999. Insurance sales commissions rose by 14.2% to $23.3 million.
All other revenues increased by $7.2 million, or 13.2% reflecting a variety
of positive results which included additional income associated with increased
ATM installations in Old Kent's service area and greater brokerage commissions
linked to a business expansion by Old Kent Securities Corp.
Expenses:
Exclusive of merger related charges, noninterest expenses totaled $660.5 million for 1999, or 10.1% more than last year. This increase was largely related to revenue growth initiatives throughout the Corporation, as described above. Old Kent's consolidated efficiency ratio was 59.5% for 1999, compared to 59.9% for the prior year. For Old Kent's banking business, the efficiency ratio for 1999 improved to 53.0% from 55.6% for 1998. The efficiency ratio expresses how much of each revenue dollar is used to pay operating expenses. The improvement in this ratio reflects both revenue growth and enhanced economies of scale related to Old Kent's successful integration of the businesses it has acquired.
Asset Quality:
The provision for credit losses was $26.2 million for 1999, substantially lower than the $47.2 million for 1998. Net loan losses for the year ended December 31, 1999 were $21.6 million, or 0.20% of average total loans. This compares favorably to net loan losses of $40.3 million, or 0.40% of average total loans for 1998. At December 31, 1999, the allowance for credit losses was 1.53% of total loans. Nonperforming assets were $65.5 million at December 31, 1999, or 0.36% of total assets, down from $72.5 million, or 0.39% of total assets, at December 31, 1998. The Corporation experienced improvements in virtually all credit quality indicators throughout the year.
Stock Repurchase Program:
As of December 31, 1999, the Corporation had completed the repurchase of 1.5 million shares of its common stock under a June 1999 authorization allowing for the repurchase of 3 million shares of its common stock within the ensuing year. As in prior programs, shares are to be acquired ratably on a quarterly basis for use in future stock dividends and for issuances related to the Corporation's dividend reinvestment and employee stock plans.
Conference Call
Old Kent's management will host a conference call to discuss the operating
results for the year ended December 31, 1999, at 11 a.m. (Eastern Standard Time)
on January 19, 2000. The conference may be accessed by dialing 800-521-5426
("listen only'' mode) just prior to the scheduled start time. A replay of the
call will be available through January 26, 2000, by dialing 888-696-1588 (passcode:
644803). The call, on a "live'' or replay basis, may also be accessed through
Old Kent's website, "www.oldkent.com ''.
Description of Old Kent:
Old Kent is a financial services company headquartered in Grand Rapids, Michigan, with a 41 year history of consecutive increases in annual per share earnings and dividends. It operates over 250 banking offices in Michigan, Illinois and Indiana as well as 147 mortgage lending sites throughout the United States. At December 31, 1999, Old Kent had total assets of approximately $18 billion.
Percentage
EARNINGS SUMMARY: 1999 1998 (a) (b) Change
Quarter ended December 31:
Before merger-related charges:
Basic Earnings per Share $0.61 $0.52 17.3%
Diluted Earnings per Share 0.60 0.52 15.4%
Net Income $71,208,000 $63,592,000 12.0%
After merger-related charges:
Basic Earnings per Share $0.61 $0.36 69.4%
Diluted Earnings per Share 0.60 0.36 66.7%
Net Income $71,208,000 $43,914,000 62.2%
Year ended December 31:
Before merger-related charges:
Basic Earnings per Share $2.28 $1.98 15.2%
Diluted Earnings per Share 2.26 1.96 15.3%
Net Income $270,139,000 $245,001,000 10.3%
After merger-related charges:
Basic Earnings per Share $2.13 $1.82 17.0%
Diluted Earnings per Share 2.11 1.81 16.6%
Net Income $252,539,000 $225,323,000 12.1%
Balance Sheet Data at December 31:
Commercial Loans $6,921,409,000 $5,820,846,000 18.9%
Consumer Loans 3,498,587,000 2,503,319,000 39.8%
Residential Mortgage Loans 1,647,064,000 1,895,912,000 -13.1%
Total Loans 12,067,060,000 10,220,077,000 18.1%
Total Interest-earning Assets 16,314,722,000 16,938,265,000 -3.7%
Core Deposits 12,558,552,000 12,958,784,000 -3.1%
Total Deposits 13,695,012,000 14,413,439,000 -5.0%
Total Assets 17,969,832,000 18,614,725,000 -3.5%
Shareholders' Equity 1,226,873,000 1,321,854,000 -7.2%
| (a) | Adjusted to reflect a five percent stock dividend paid July 19, 1999. | |
| (b) | Restated to include "pooling-of-interests'' transactions: CFSB Bancorp, Inc., acquired July 9, 1999; and Pinnacle Banc Group, Inc., acquired September 3, 1999. |
|
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,'' and "should,'' 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, the possibility that anticipated cost savings from mergers and other initiatives may not be fully realized within the expected time frames. 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 conditions after the date of this release. |
# # #
OLD KENT
Financial
Corporation
Consolidated Key Financial Data (a)
[Amounts in thousands, 3rd Quarter
except per share data] 1999
(Unaudited) 4th Quarter Excluding 3rd Quarter
Key Statistics 1999 Merger Charges 1999
Net income $71,208 $70,387 $52,787
Basic earnings per share $0.61 $0.59 $0.45
Diluted earnings per share $0.60 $0.59 $0.44
Cash basis earnings per
share (b) $0.63 $0.62 $0.47
Operating revenue per
share (c) $2.38 $2.37 $2.37
Operating expense per
share (c) $1.37 $1.37 $1.37
Return on average total assets:
Banking 1.69 1.65 1.19
Mortgage banking 0.79 1.00 1.00
Consolidated 1.59 1.57 1.18
Return on average total equity:
Banking 23.73 21.19 16.01
Mortgage banking 18.51 24.68 24.68
Consolidated 23.24 22.31 16.87
Net interest margin:
Banking 4.47 4.54 4.54
Mortgage banking 2.37 2.77 2.77
Consolidated 4.25 4.33 4.33
Yield on average earning
assets 8.02 7.95 7.95
Cost of average paying
liabilities 4.32 4.15 4.15
Efficiency ratio (c):
Banking 50.19 50.90 50.90
Mortgage banking 82.11 78.56 78.56
Consolidated 57.76 57.80 57.80
Net profit margin 25.26 24.88 18.66
Common Stock Information (adjusted for stock dividends)
Book value per share $10.43 $10.48 $10.48
Dividends paid per share 0.220 0.200 0.200
Per share price:
High 42.25 44.75 44.75
Low 33.56 36.63 36.63
Close 35.38 37.13 37.13
Outstanding shares at end
of period 117,610 118,105 118,105
Number of shares used to compute:
Basic earnings per
share 117,670 118,448 118,448
Diluted earnings per
share 118,528 119,366 119,366
OLD KENT
Financial
Corporation
4th Quarter
1998
2nd Quarter 1st Quarter Excluding 4th Quarter
1999 1999 Merger Charges 1998
Net income $65,381 $63,163 $63,592 $43,914
Basic earnings per share $0.55 $0.53 $0.52 $0.36
Diluted earnings per share $0.55 $0.52 $0.52 $0.36
Cash basis earnings per
share (b) $0.58 $0.55 $0.55 $0.39
Operating revenue per
share (c) $2.32 $2.21 $2.13 $2.13
Operating expense per
share (c) $1.44 $1.34 $1.30 $1.30
Return on average total assets:
Banking 1.52 1.49 1.52 1.00
Mortgage banking 0.87 0.82 0.84 0.84
Consolidated 1.44 1.38 1.41 0.98
Return on average total equity:
Banking 20.69 19.15 18.83 12.38
Mortgage banking 25.41 26.35 25.52 25.52
Consolidated 20.98 19.66 19.03 13.34
Net interest margin:
Banking 4.43 4.42 4.46 4.46
Mortgage banking 2.21 1.86 1.67 1.67
Consolidated 4.16 4.04 4.06 4.06
Yield on average earning
assets 7.74 7.71 7.84 7.84
Cost of average paying
liabilities 4.09 4.19 4.41 4.41
Efficiency ratio (c):
Banking 56.18 54.95 55.79 55.79
Mortgage banking 79.26 77.19 76.39 76.39
Consolidated 61.79 60.60 60.90 60.90
Net profit margin 23.50 23.63 24.35 16.81
Common Stock Information (adjusted for stock dividends)
Book value per share $10.52 $10.71 $10.95 $10.95
Dividends paid per share 0.190 0.190 0.190 0.190
Per share price:
High 46.85 45.00 44.29 44.29
Low 40.00 39.52 27.74 27.74
Close 41.88 40.30 44.29 44.29
Outstanding shares at end
of period 118,650 119,452 120,673 120,673
Number of shares used to compute:
Basic earnings per share 118,713 119,998 121,245 121,245
Diluted earnings per
share 119,764 121,236 122,498 122,498
(a) Restated to include "pooling-of-interests" transactions: CFSB
Bancorp, Inc., acquired July 9, 1999; and Pinnacle Banc Group, Inc.,
acquired September 3, 1999.
(b) Cash basis earnings per share excludes the effect of amortization of
intangibles.
(c) Excludes non-recurring items.
OLD KENT
Financial Corporation
Consolidated Key Financial Data (a)
[Amounts in thousands,
except per share data] 3rd Quarter
1999
(Unaudited) 4th Quarter Excluding 3rd Quarter
Summary Income Statement 1999 Merger Charges 1999
Taxable equivalent net
interest income $174,571 $178,630 $178,630
Interest income 325,655 324,063 324,063
Interest expense 155,398 149,719 149,719
Net interest income 170,257 174,344 174,344
Provision for credit
losses (operating) 7,522 6,783 6,783
Provision for credit
losses (merger related) -- -- --
Other income:
Mortgage banking
revenues - net 49,116 46,352 46,352
Investment management &
trust revenues 18,704 18,556 18,556
Deposit account revenues 18,337 17,854 17,854
Insurance sales
commissions 5,434 5,956 5,956
Other revenues and fees 15,753 15,707 15,707
Total other income 107,344 104,425 104,425
Securities gains 24 3 3
Total 107,368 104,428 104,428
Other expense:
Salaries and employee
benefits 82,513 85,676 85,676
Occupancy expense 13,541 12,707 12,707
Equipment expense 11,744 10,580 10,580
Amortization of goodwill &
intangibles 4,086 4,179 4,179
Other 50,942 50,461 50,461
Total other expense 162,826 163,603 163,603
Merger charges -- -- 26,000
Total 162,826 163,603 189,603
Income before income
taxes 107,277 108,386 82,386
Income taxes 36,069 37,999 37,999
Income taxes (applicable
to merger charges) -- -- (8,400)
Net income $71,208 $70,387 $52,787
2nd Quarter 1st Quarter
Summary Income Statement 1999 1999
Taxable equivalent net
interest income $172,819 $167,911
Interest income 317,180 315,375
Interest expense 148,495 151,462
Net interest income 168,685 163,913
Provision for credit losses
(operating) 4,899 6,971
Provision for credit losses
(merger related) -- --
Other income:
Mortgage banking
revenues - net 48,830 44,037
Investment management &
trust revenues 18,372 18,203
Deposit account revenues 17,316 16,167
Insurance sales commissions 5,979 5,972
Other revenues and fees 15,001 15,167
Total other income 105,498 99,546
Securities gains 5,216 2,706
Total 110,714 102,252
Other expense:
Salaries and employee
benefits 87,071 85,172
Occupancy expense 12,569 12,655
Equipment expense 11,065 9,893
Amortization of goodwill &
intangibles 4,306 4,151
Other 56,951 50,209
Total other expense 171,962 162,080
Merger charges -- --
Total 171,962 162,080
Income before income taxes 102,538 97,114
Income taxes 37,157 33,951
Income taxes (applicable to
merger charges) -- --
Net income $65,381 $63,163
4th Quarter
1998
Excluding 4th Quarter
Summary Income Statement Merger Charges 1998
Taxable equivalent net
interest income $168,329 $168,329
Interest income 322,764 322,764
Interest expense 158,196 158,196
Net interest income 164,568 164,568
Provision for credit losses
(operating) 7,621 7,621
Provision for credit losses
(merger related) -- 3,500
Other income:
Mortgage banking revenues - net 38,950 38,950
Investment management &
trust revenues 18,967 18,967
Deposit account revenues 16,316 16,316
Insurance sales commissions 4,753 4,753
Other revenues and fees 14,016 14,016
Total other income 93,002 93,002
Securities gains 4,347 4,347
Total 97,349 97,349
Other expense:
Salaries and employee benefits 83,776 83,776
Occupancy expense 12,184 12,184
Equipment expense 10,516 10,516
Amortization of goodwill &
intangibles 4,159 4,159
Other 48,503 48,503
Total other expense 159,138 159,138
Merger charges -- 24,993
Total 159,138 184,131
Income before income taxes 95,158 66,665
Income taxes 31,566 31,566
Income taxes (applicable to
merger charges) -- (8,815)
Net income $63,592 $43,914
Five Quarter Average Balances, Yields and Rates (a)
(Unaudited) 4th Quarter 1999 3rd Quarter 1999
Ending Average Yield/ Ending Average Yield/
Balance Balance Rate Balance Balance Rate
(Yields and rates are on a fully taxable-
equivalent basis, dollars in millions)
Assets:
Loans:
Commercial loans
and leases $6,921 $6,673 8.54% $6,548 $6,400 8.44%
Consumer loans 3,499 3,279 8.96 3,163 3,074 8.92
Residential
mortgages 1,647 1,569 7.74 1,539 1,920 7.80
Total loans 12,067 11,521 8.55 11,250 11,394 8.46
Securities 3,311 3,417 6.35 3,383 3,563 6.55
Mortgages held-for-
sale 900 1,246 8.02 1,451 1,402 7.53
Other interest -
earning assets 37 176 5.48 75 68 5.09
Total earning
assets 16,315 16,360 8.02 16,159 16,427 7.95
Unrealized gain/(loss)
on S.A.F.S. (87) (65) (54) (40)
Allowance for credit
losses (184) (186) (186) (184)
Cash and due from
banks 589 574 551 591
Goodwill and other
intangibles 129 132 134 136
Mortgage servicing
rights 275 288 275 276
Other assets 933 783 763 686
Total assets $17,970 $17,886 $17,642 $17,892
Liabilities and shareholders' equity:
Savings deposits $5,306 $5,288 3.01% $5,240 $5,307 2.80%
Negotiable and foreign
deposits 1,137 1,082 5.62 969 962 5.15
Consumer time
deposits 5,212 5,303 4.84 5,352 5,432 4.78
Total interest -
bearing deposits 11,655 11,673 4.09 11,561 11,701 3.91
Federal funds purchased and
repurchase agreements 935 784 4.44 704 889 4.36
Other borrowed funds 1,616 1,617 5.63 1,626 1,540 5.48
Subordinated debt 100 100 6.74 100 100 6.74
Floating rate subordinated
securities 100 100 7.09 100 100 6.37
Total interest -
bearing funds 14,406 14,274 4.32 14,091 14,330 4.15
Demand deposits 2,040 2,064 2,011 2,055
Other liabilities 297 322 302 256
Shareholders' equity:
Common stock, surplus, and
retained earnings 1,298 1,268 1,273 1,277
Net unrealized gain/(loss)
on S.A.F.S. (71) (42) (35) (26)
Total liabilities and
shareholders'
equity $17,970 $17,886 $17,642 $17,892
Selected Ratios
Net interest spread 3.70% 3.80%
Net interest income
as a percent of average
earning assets 4.25% 4.33%
Total equity
to total assets 6.83% 7.02%
Tangible equity to
tangible assets 6.15% 6.31%
Memoranda
Core deposits 12,558 12,655 12,602 12,794
Total deposits 13,695 13,737 13,571 13,756
Mortgage servicing
portfolio 14,726 15,113
Mortgage banking full-time
equivalent employees 2,778 2,951
Total full-time equivalent
employees 8,018 8,304
2nd Quarter 1999 1st Quarter 1999
Ending Average Yield/ Ending Average Yield/
Balance Balance Rate Balance Balance Rate
Assets:
Loans:
Commercial loans
and leases $6,282 $6,108 8.24% $5,944 $5,859 8.37%
Consumer loans 2,950 2,871 8.96 2,804 2,553 9.08
Residential
mortgages 1,940 1,899 7.70 1,905 1,859 7.63
Total loans 11,172 10,878 8.34 10,653 10,271 8.41
Securities 3,662 4,119 6.53 4,115 4,165 6.55
Mortgages held-for-
sale 1,379 1,612 6.83 1,436 2,121 6.79
Other interest -
earning assets 14 31 4.67 30 154 5.25
Total earning
assets 16,227 16,640 7.74 16,234 16,711 7.71
Unrealized gain/(loss)
on S.A.F.S. (37) 1 18 24
Allowance for credit
losses (181) (181) (181) (180)
Cash and due from
banks 637 615 579 629
Goodwill and other
intangibles 138 140 142 141
Mortgage servicing
rights 271 261 255 230
Other assets 757 736 799 745
Total assets $17,812 $18,212 $17,846 $18,300
Liabilities and shareholders' equity:
Savings deposits $5,212 $5,212 2.69% $5,159 $5,103 2.71%
Negotiable and foreign
deposits 975 1,233 4.93 1,258 1,481 5.06
Consumer time
deposits 5,512 5,505 4.86 5,521 5,567 5.05
Total interest -
bearing deposits 11,699 11,950 3.92 11,938 12,151 4.06
Federal funds purchased and
repurchase agreements 893 1,103 4.36 892 1,123 4.34
Other borrowed funds 1,406 1,320 5.03 1,170 1,172 5.01
Subordinated debt 100 100 6.74 100 100 6.74
Floating rate subordinated
securities 100 100 6.08 100 100 6.09
Total interest -
bearing funds 14,198 14,573 4.09 14,200 14,646 4.19
Demand deposits 2,101 2,113 2,011 2,055
Other liabilities 265 280 355 314
Shareholders' equity:
Common stock, surplus and
retained earnings 1,271 1,245 1,267 1,268
Net unrealized gain/(loss)
on S.A.F.S. (23) 1 13 17
Total liabilities and
shareholders'
equity $17,812 $18,212 $17,846 $18,300
Selected Ratios
Net interest spread 3.65% 3.52%
Net interest income
as a percent of average
earning assets 4.16% 4.04%
Total equity
to total assets 7.01% 7.17%
Tangible equity to
tangible assets 6.28% 6.42%
Memoranda
Core deposits 12,825 12,830 12,691 12,725
Total deposits 13,800 14,063 13,949 14,206
Mortgage servicing
portfolio 14,729 14,653
Mortgage banking full-time
equivalent employees 3,014 2,760
Total full-time equivalent
employees 8,492 8,244
4th Quarter 1998
Ending Average Yield/
Balance Balance Rate
Assets:
Loans:
Commercial loans and leases $5,821 $5,754 8.49%
Consumer loans 2,503 2,510 9.29
Residential mortgages 1,896 1,903 7.68
Total loans 10,220 10,167 8.53
Securities 4,089 4,148 6.71
Mortgages held-for-sale 2,263 2,163 6.90
Other interest - earning assets 366 88 4.76
Total earning assets 16,940 16,566 7.84
Unrealized gain/(loss) on S.A.F.S. 50 26
Allowance for credit losses (180) (182)
Cash and due from banks 667 644
Goodwill and other intangibles 143 145
Mortgage servicing rights 218 200
Other assets 778 606
Total assets $18,614 $18,005
Liabilities and shareholders' equity:
Savings deposits $5,122 $4,895 2.78%
Negotiable and foreign deposits 1,455 1,221 5.22
Consumer time deposits 5,592 5,675 5.19
Total interest - bearing
deposits 12,169 11,791 4.19
Federal funds purchased and
repurchase agreements 1,259 1,193 4.48
Other borrowed funds 1,146 1,052 6.34
Subordinated debt 100 100 6.74
Floating rate subordinated
securities 100 100 6.55
Total interest - bearing
funds 14,774 14,236 4.41
Demand deposits 2,245 2,167
Other liabilities 274 285
Shareholders' equity:
Common stock, surplus, and retained
earnings 1,288 1,299
Net unrealized gain/(loss)
on S.A.F.S. 33 18
Total liabilities and
shareholders' equity $18,614 $18,005
Selected Ratios
Net interest spread 3.43%
Net interest income as a percent
of average earning assets 4.06%
Total equity to total assets 7.10%
Tangible equity to tangible assets 6.38%
Memoranda
Core deposits 12,959 12,737
Total deposits 14,414 13,958
Mortgage servicing portfolio 14,006
Mortgage banking full-time
equivalent employees 2,578
Total full-time equivalent
employees 8,090
(Unaudited) Credit Quality 4th 3rd 2nd 1st 4th Quarter Quarter Quarter Quarter Quarter 1999 1999 1999 1999 1998 Ending allowance for credit losses $184.3 $186.0 $181.4 $180.9 $179.6 Nonperforming assets: Nonaccrual 55.5 50.6 54.7 62.4 61.2 Renegotiated 1.9 1.9 3.0 2.9 3.2 Total impaired loans 57.4 52.5 57.7 65.3 64.4 Other real estate owned 8.1 6.5 6.2 6.8 8.1 Total nonperforming assets 65.5 59.0 63.9 72.1 72.5 Loans delinquent over 90 days 14.2 17.1 16.1 10.6 16.9 Gross charge-offs 13.8 8.8 9.6 10.3 15.8 Recoveries 4.6 6.6 5.2 4.5 4.2 Net charge-offs 9.2 2.2 4.4 5.8 11.6 Provision for credit losses 7.5 6.8 4.9 7.0 11.1 Key Ratios: Allowance to loans 1.53% 1.65% 1.62% 1.70% 1.76% Allowance to impaired loans 321.23 354.27 314.38 276.75 278.95 Impaired loans to loans 0.48 0.47 0.52 0.61 0.63 Nonperforming assets to assets 0.36 0.33 0.36 0.40 0.39 90 days delinquent to loans 0.12 0.15 0.14 0.10 0.16 Net charge-offs to average loans 0.32 0.07 0.16 0.23 0.45
OLD KENT
Financial
Corporation
Consolidated Key Financial Data (a)
[Amounts in thousands, except per share data]
Excluding Merger Excluding Merger
Charges Charges
(Unaudited) YTD Dec 31, YTD Dec 31, YTD Dec 31, YTD Dec 31,
Key Statistics 1999 1999 1998 1998
Net income $270,139 $252,539 $245,001 $225,323
Basic earnings
per share $2.28 $2.13 $1.98 $1.82
Diluted earnings
per share $2.26 $2.11 $1.96 $1.81
Cash basis earnings
per share (b) $2.38 $2.24 $2.08 $1.93
Operating revenue
per share (c) $9.28 $9.28 $8.12 $8.12
Operating expense
per share (c) $5.52 $5.52 $4.87 $4.87
Return on average total assets:
Banking 1.59 1.47 1.48 1.35
Mortgage banking 0.86 0.86 0.70 0.70
Consolidated 1.49 1.40 1.38 1.27
Return on average total equity:
Banking 21.25 19.88 18.22 16.69
Mortgage banking 23.78 23.78 19.16 19.16
Consolidated 21.46 20.17 18.31 16.90
Net interest margin:
Banking 4.47 4.47 4.40 4.40
Mortgage banking 2.27 2.27 1.30 1.30
Consolidated 4.20 4.20 4.04 4.04
Yield on average
earning assets 7.86 7.86 7.96 7.96
Cost of average
paying liabilities 4.19 4.19 4.53 4.53
Efficiency ratio (c):
Banking 52.96 52.96 55.55 55.55
Mortgage banking 79.15 79.15 80.90 80.90
Consolidated 59.46 59.46 59.87 59.87
Net profit margin 24.32 22.74 24.20 22.27
Common Stock Information (adjusted for stock dividends)
Book value
per share $10.43 $10.43 $10.95 $10.95
Dividends paid
per share 0.80 0.80 0.688 0.688
Per share price:
High 46.85 46.85 44.29 44.29
Low 33.56 33.56 27.50 27.50
Close 35.38 35.38 44.29 44.29
Outstanding shares at
end of period 117,610 117,610 120,673 120,673
Number of shares used to compute:
Basic earnings
per share 118,700 118,700 123,512 123,512
Diluted earnings
per share 119,715 119,715 124,766 124,766
| (a) | Restated to include "pooling-of-interests" transactions: First Evergren Corporation acquired October 1, 1998; CFSB Bancorp, Inc., acquired July 9, 1999; and Pinnacle Banc Group, Inc., acquired September 3, 1999. | |
| (b) | Cash basis earnings per share excludes the effect of amortization of intangibles. | |
| (c) | Excludes non-recurring items. |
Consolidated Key Financial Data (a) [Amounts in thousands, except per share data] Excluding Merger Excluding Merger Charges Charges (Unaudited) YTD Dec 31, YTD Dec 31, YTD Dec 31, YTD Dec 31, Summary Income 1999 1999 1998 1998 Statement Taxable equivalent net interest income $693,929 $693,929 $660,312 $660,312 Interest income 1,282,273 1,282,273 1,286,115 1,286,115 Interest expense 605,073 605,073 639,747 639,747 Net interest income 677,200 677,200 646,368 646,368 Provision for credit losses (operating) 26,175 26,175 43,718 43,718 Provision for credit losses (merger related) -- -- -- 3,500 Other income: Mortgage banking revenues - net 188,335 188,335 147,155 147,155 Investment management & trust revenues 73,835 73,835 66,250 66,250 Deposit account revenues 69,673 69,673 64,304 64,304 Insurance sales commissions 23,340 23,340 20,434 20,434 Other revenues and fees 61,629 61,629 54,436 54,436 Total other income 416,812 416,812 352,579 352,579 Securities gains 7,948 7,948 16,899 16,899 Total 424,760 424,760 369,478 369,478 Other expense: Salaries and employee benefits 340,432 340,432 322,308 322,308 Occupancy expense 51,472 51,472 46,677 46,677 Equipment expense 43,283 43,283 39,510 39,510 Amortization of goodwill & intangibles 16,722 16,722 16,656 16,656 Other 208,560 208,560 174,790 174,790 Total other expense 660,469 660,469 599,941 599,941 Merger charges -- 26,000 -- 24,993 Total 660,469 686,469 599,941 624,934 Income before income taxes 415,316 389,316 372,187 343,694 Income taxes 145,177 145,177 127,186 127,186 Income taxes (applicable to merger charges) -- (8,400) -- (8,815) Net income $270,139 $252,539 $245,001 $225,323
OLD KENT
Financial
Corporation
Average Balances, Yields and Rates (a) Twelve months ended Dec 31, 1999 1998 (Yields and rates are Average Average Average Average on a fully taxable- Balance Rate Balance Rate equivalent basis, dollars in thousands) Average Assets: Loans $11,020,230 8.44% $10,179,364 8.76% Securities 3,813,067 6.50 4,334,136 6.55 Mortgages available-for-sale 1,592,083 7.21 1,745,941 6.91 Other interest earning assets 106,796 5.31 76,225 4.99 Total earning assets 16,532,176 7.86 16,335,666 7.96 Unrealized gain/ (loss) on securities available-for-sale (20,510) 12,794 Allowance for loan losses (182,760) (179,640) Cash and due from banks 602,259 600,968 Goodwill and other intangibles 137,405 150,903 Mortgage servicing rights (net) 271,147 196,732 Other assets 730,373 605,776 Total Assets $18,070,090 $17,723,199 Average Liabilities and Shareholders' Equity: Savings deposits $5,227,457 2.80% $4,632,882 2.79% Time deposits: Negotiable 1,112,653 5.17 1,083,640 5.50 Foreign 75,232 5.11 37,384 5.37 Other time 5,450,700 4.88 5,836,520 5.33 Total interest-bearing deposits 11,866,042 4.00 11,590,426 4.33 Federal funds purchased and repurchase agreements 973,603 4.37 1,002,060 4.82 Other borrowed funds 1,413,549 5.32 1,315,516 5.79 Subordinated debt 100,000 6.74 100,000 6.74 Floating rate subordinated securities 100,000 6.41 100,000 6.74 Total interest-bearing funds 14,453,194 4.19 14,108,002 4.53 Demand deposits 2,071,822 2,031,358 Other liabilities 293,085 250,689 Shareholders' equity: Common stock, capital surplus and retained earnings 1,264,907 1,323,601 Unrealized gain/(loss) on securities available-for-sale (12,918) 9,549 Total Liabilities and Shareholders' Equity $18,070,090 $17,723,199 Net Interest Spread 3.67% 3.43% Net Interest Income as a Percentage of Average Earning Assets 4.20% 4.04%
OLD KENT
Financial
Corporation
Credit Loss Reserve Summary
(Unaudited)
(Amounts in thousands)
YTD - 99 YTD - 98 Q4-99 Q3-99
Beginning Reserve $179,605 $173,203 $185,969 $181,399
Provision 26,175 47,216 7,522 6,783
Net Charge-offs 21,613 40,339 9,204 2,213
Other 120 (475) -- --
Ending Reserve $184,287 $179,605 $184,287 $185,969
Net Loan Charge-offs
Commercial Loans $10,147 $24,998 $6,338 ($492)
Consumer Loans 10,845 14,670 2,798 2,126
Real Estate -
Mortgages 621 671 68 579
Total Net Loan
Charge-offs $21,613 $40,339 $9,204 $2,213
Net Charge-off Ratio 0.20% 0.40% 0.32% 0.07%
Q2-99 Q1-99 Q4-98
Beginning Reserve $180,851 $179,605 $180,034
Provision 4,899 6,971 11,121
Net Charge-offs 4,351 5,845 11,550
Other -- 120 --
Ending Reserve $181,399 $180,851 $179,605
Net Loan Charge-offs
Commercial Loans $1,644 $2,659 $9,055
Consumer Loans 2,467 3,452 2,338
Real Estate -
Mortgages 240 (266) 157
Total Net Loan
Charge-offs $4,351 $5,845 $11,550
Net Charge-off Ratio 0.16% 0.23% 0.45%
OLD KENT
Financial
Corporation
Selected Mortgage Banking Information (Unaudited) For the Quarter Ended 12/31/99 09/30/99 06/30/99 Net mortgage banking revenue (thousands) $49,116 $46,352 $48,830 Mortgage originations (millions) $2,216 $2,739 $3,503 Home purchases as a percentage of mortgage originations 72% 73% 56% Mortgage originations percentage by loan type: Conventional loans 56% 58% 70% FHA/VA loans 34% 33% 27% Sub-prime loans 10% 9% 3% Mortgage loan sales (millions) $2,349 $2,804 $3,330 Loans serviced for others (millions) $14,726 $15,113 $14,729 Mortgage servicing rights (millions) $275 $275 $271 Servicing portfolio weighted average coupon 7.45% 7.41% 7.38% Number of branch offices/states 147/32 152/31 167/32 Mortgage Servicing Rights Balance at beginning of period $274,949 $270,851 $255,132 Additions 52,877 55,704 68,024 Sales (43,051) (38,181) (36,082) Amortization (9,879) (13,425) (16,223) Balance at end of period $274,896 $274,949 $270,851 Estimated fair value of mortgage servicing rights $323,000 $340,000 $328,000 For the Quarter Ended 03/31/99 12/31/98 Net mortgage banking revenue (thousands) $44,037 $38,950 Mortgage originations (millions) $3,633 $4,411 Home purchases as a percentage of mortgage originations 38% 33% Mortgage originations percentage by loan type: Conventional loans 75% 77% FHA/VA loans 23% 21% Sub-prime loans 2% 2% Mortgage loan sales (millions) $4,279 $3,623 Loans serviced for others (millions) $14,653 $14,006 Mortgage servicing rights (millions) $255 $218 Servicing portfolio weighted average coupon 7.36% 7.45% Number of branch offices/ states 160/32 143/32 Mortgage Servicing Rights Balance at beginning of period $218,497 $187,746 Additions 91,287 62,799 Sales (38,525) (18,163) Amortization (16,127) (13,885) Balance at end of period $255,132 $218,497 Estimated fair value of mortgage servicing rights $304,000 $261,000
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