<PAGE> 16
WATERHOUSE INVESTOR SERVICES, INC. AND SUBSIDIARIES
INVESTMENT PORTFOLIO
MATURITIES AT AUGUST 31, 1995
($000)
<TABLE>
<CAPTION>
(Securities Held To Maturity)
---------------------------
Estimated
Amortized Market Weighted Average
Cost Value Yield To Maturity
---- ----- -----------------
<S> <C> <C> <C>
U.S. Treasury bills
- -------------------
In one year or less $7,018 $7,029 5.92%
U.S. agencies
- -------------
In one year or less 102,496 102,477 5.83%
After one year through five years 35,192 35,186 5.86%
------ ------
137,688 137,663 5.83%
Over investments
- ----------------
In one year or less 1,000 1,000 6.20%
------- -------
Total held to maturity portfolio 145,706 145,692 5.84%
Federal Reserve Bank Stock 810 810 n/a
-------- --------
Total investment portfolio $146,516 $146,502 5.84%
======== ========
</TABLE>
KEY FINANCIAL RATIOS
FOR THE YEAR ENDED AUGUST 31, 1995
<TABLE>
<CAPTION>
<S> <C>
Return on assets 4.7%
Return on equity 32.9%
Dividend payout ratio 11.9%
Equity to assets 14.2%
</TABLE>
Average balances were computed on a month-end basis.
<PAGE> 28
Waterhouse Investor Services, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Year Ended August 31,
---------------------------------------
1995 1994 1993
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $19,357,226 $15,726,483 $14,356,870
Non cash items included in net income:
Depreciation 2,313,420 1,724,872 799,570
Debt issuance cost 140,472 199,583 ---
Increase (decrease) in allowance for
doubtful accounts 107,821 (81,382) 56,449
(Increase) in operating assets:
Receivable from brokers and dealers (877,076) (2,341,783) (4,134,108)
Receivable from customers (93,260,298) (56,756,748) (86,285,543)
Deposits with clearing organizations (857,051) (760,030) (1,012,769)
Other assets (7,307,297) (885,446) (773,183)
Increases (decreases) in operating liabilities:
Broker loans and overdrafts (36,600,215) (22,664,555) 24,911,170
Deposits received for securities loaned 95,540,652 7,085,722 3,007,345
Payable to brokers and dealers (734,065) 717,698 3,369,693
Payable to customers 29,947,472 25,341,086 39,713,071
Accounts payable, taxes payable, accrued
expenses, and other liabilities 13,063,271 1,395,618 5,996,493
---------- --------- ---------
CASH PROVIDED BY (USED IN)OPERATING ACTIVITIES 20,834,332 (31,298,882) 5,058
---------- ---------- -----
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of furniture and equipment (1,647,592) (4,840,345) (3,185,459)
Interest bearing deposits with other banks (50,000,000) --- ---
Federal funds sold (54,100,000) --- ---
Investment securities purchased (342,024,862) (7,532,305) ---
Proceeds from maturities of investment
securities 203,041,130 --- ---
----------- ---------- ---------
CASH (USED IN) INVESTING ACTIVITIES: (244,731,324) (12,372,650) (3,185,459)
----------- ---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
6% Convertible Subordinated Notes --- 48,500,000 ---
Interest bearing deposits 231,046,433 --- ---
Debt issuance costs --- (1,499,000) ---
Deferred compensation - ESOP --- --- 287,856
Cash dividends paid (1,830,736) (1,521,494) (972,050)
Exercise of stock options and warrants 42,506 114,544 42,045
Federal income tax credit - stock options --- --- 1,398,433
--------- --------- ---------
CASH PROVIDED BY FINANCING ACTIVITIES 229,258,203 45,594,050 756,284
----------- ---------- -------
INCREASE (DECREASE) IN CASH AND DUE FROM BANKS 5,361,211 1,922,518 (2,424,117)
CASH AND DUE FROM BANKS, beginning of year 7,728,832 5,806,314 8,230,431
--------- --------- ---------
CASH AND DUE FROM BANKS, end of year $13,090,043 $7,728,832 $5,806,314
=========== ========== ==========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest $11,608,903 $5,024,724 $2,771,423
=========== =========== ==========
Cash paid for income taxes $12,590,306 $10,790,699 $8,246,613
=========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
