-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, o4uuQ2mBqmy5nfGpoHftzG4woAvRW6Y2BuOQNh1lLTYRQTIVFOsSXUU/Y/Onc6sQ bmDLubwc/h/AjQdw65nnZA== 0000931763-95-000080.txt : 19950517 0000931763-95-000080.hdr.sgml : 19950517 ACCESSION NUMBER: 0000931763-95-000080 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950509 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL COMMERCE BANCORP CENTRAL INDEX KEY: 0000101844 STANDARD INDUSTRIAL CLASSIFICATION: 6021 IRS NUMBER: 620784645 STATE OF INCORPORATION: TN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-06094 FILM NUMBER: 95535564 BUSINESS ADDRESS: STREET 1: ONE COMMERCE SQ CITY: MEMPHIS STATE: TN ZIP: 38150 BUSINESS PHONE: 9015233242 MAIL ADDRESS: STREET 1: ONE COMMERCE SQ CITY: MEMPHIS STATE: TN ZIP: 38150 FORMER COMPANY: FORMER CONFORMED NAME: UNITED TENNESSEE BANCSHARES CORP DATE OF NAME CHANGE: 19780820 FORMER COMPANY: FORMER CONFORMED NAME: UNITED TENNESSEE BANSHARES CORP DATE OF NAME CHANGE: 19780525 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _______________________ FORM 10Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1995 Commission file number 0-6094 ------ NATIONAL COMMERCE BANCORPORATION -------------------------------- (Exact name of registrant as specified in its charter) Tennessee 62-0784645 --------- ---------- (State or other jurisdiction (I.R.S. Employer of incorporation organization) Identification No.) One Commerce Square Memphis, Tennessee 38150 ------------------ ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number including area code - (901)523-3242 Indicate by check mark whether the registrant (1) has filed all reports to be filed by Section 13 or 15(d) of the Securities and Exchange Act of 1934 during the preceding 12 months (or for such shorter period 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 _____ ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, $2 par value -- 24,619,876 shares as of May 2, 1995. Page 1 of 15 Pages PART I. FINANCIAL INFORMATION - - ------------------------------ Item 1. Financial Statements -------------------- NATIONAL COMMERCE BANCORPORATION Consolidated Balance Sheets --------------------------- (In Thousands)
ASSETS Mar. 31 Dec. 31 ------ 1995 1994 --------- ------- (unaudited) Cash and cash equivalents: Interest bearing deposits $ 16,583 $ 17,620 Cash and non-interest bearing deposits 96,993 123,138 Federal funds sold and securities purchased under agreements to resell 5,975 25,675 ---------- ---------- Total cash and cash equivalents 119,551 166,433 ---------- ---------- Securities: Held to maturity 283,942 283,906 Available for sale 806,209 872,379 ---------- ---------- Total securities 1,090,151 1,156,285 ---------- ---------- Trading account securities 22,905 13,507 Loans: Commercial, financial and agricultural 343,627 356,035 Real estate - construction 102,189 91,424 Real estate - mortgage 496,503 501,489 Consumer 627,365 630,927 Lease financing 15,564 14,818 ---------- ---------- Total loans 1,585,248 1,594,693 Less: Allowance for loan losses 24,846 24,310 Unearned discounts 2,025 1,887 ---------- ---------- Net loans 1,558,377 1,568,496 ---------- ---------- Bank premises and equipment 18,194 17,729 Broker/dealer customer receivables 6,415 1,130 Other assets 69,540 82,229 ---------- ---------- Total assets $2,885,133 $3,005,809 ========== ==========
See notes to consolidated financial statements. 2 Consolidated Balance Sheets (cont.) - - --------------------------- (In Thousands)
Mar. 31 Dec. 31 1995 1994 --------- ------- (unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY ------------------------------------ Liabilities: Deposits: Non-interest bearing deposits $ 265,438 $ 306,684 Money market checking 242,674 257,729 Savings deposits 90,322 93,094 Money market savings 660,974 705,551 Certificates of deposit less than $100,000 629,590 511,772 Certificates of deposit of $100,000 or more 303,660 279,560 ---------- ---------- Total deposits 2,192,658 2,154,390 ---------- ---------- Federal funds purchased and securities sold under agreements to repurchase 215,869 275,136 Broker/dealer customer payables 1,057 399 Accounts payable and accrued liabilities 29,753 23,541 Federal Home Loan Bank advances 189,777 321,541 Long-term debt 6,382 6,383 ---------- ---------- Total liabilities 2,635,496 2,781,390 ---------- ---------- Stockholders' equity: Common stock 49,219 49,094 Additional paid-in capital 78,481 77,785 Retained earnings 137,445 130,404 Unrealized securities gains (losses) (15,508) (32,864) ---------- ---------- Total stockholders' equity 249,637 224,419 Total liabilities and ---------- ---------- stockholders' equity $2,885,133 $3,005,809 ========== ==========
See notes to consolidated financial statements. 3 NATIONAL COMMERCE BANCORPORATION Consolidated Statements of Income --------------------------------- (Unaudited) (In Thousands)
For the three months ended March 31 ---------------- 1995 1994 ---- ---- Interest income: Loans $36,090 $28,958 Securities: Taxable 16,538 11,841 Non-taxable 2,290 2,018 Trading account securities 229 641 Deposits at banks 250 151 Other 431 76 ------- ------- Total interest income 55,828 43,685 Interest expense: Deposits: Money market checking 1,167 1,264 Savings 514 588 Money market savings 7,527 2,947 Certificates of deposit less than $100,000 7,644 5,457 Certificates of deposit of $100,000 or more 4,823 2,845 Federal Home Loan Bank advances 3,480 2,417 Long-term debt 113 96 Federal funds purchased and securities sold under agreements to repurchase 2,763 1,824 ------- ------- Total interest 28,031 17,438 ------- ------- Net interest income 27,797 26,247 Provision for loan losses 1,708 1,661 Net interest income after ------- ------- provision for loan losses 26,089 24,586 ------- ------- Other income: Trust service income 1,949 2,119 Service charges on deposits 3,411 3,624 Other service charges and fees 1,200 1,127 Broker/dealer revenue 1,890 2,122 Securities gains 53 335 Other income 4,005 2,351 ------- ------- Total non-interest income 12,508 11,678 ------- ------- Other expenses: Salaries and employee benefits 9,808 9,696 Occupancy expense 2,102 1,762 Furniture and equipment expenses 857 786 FDIC assessment 1,092 1,056 Other expenses 8,205 7,831 ------- ------- Total non-interest expense 22,064 21,131 ------- -------
4 Consolidated Statements of Income (cont.) - - ---------------------------------
For the three months ended March 31 -------------------- 1995 1995 ---- ----- Income before income taxes l6,533 15,133 Income taxes 5,313 4,978 ------- ------- Net income $11,220 $10,155 ======= ======= Net income per share of common stock $.45 $.41 Dividends per share of common stock $.17 $.15
See notes to consolidated financial statements. 5 NATIONAL COMMERCE BANCORPORATION Consolidated Statements of Cash Flows ------------------------------------- (Unaudited)
For the Three Months Ended March 31 1995 1994 ---- ---- (In Thousands) Operating Activities: Net income $11,220 $10,155 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Provision for loan losses 1,708 1,661 Provision for depreciation and amortization 1,029 931 Amortization of security premiums and accretion of discounts, net (9) 74 Deferred income taxes (credit) (631) (400) Decrease (increase) in trading account securities (9,398) 20,745 Realized securities gains (losses) (53) (335) (Increase) decrease in broker/dealer customer receivables (5,285) 11,242 Increase (decrease) in interest receivable 760 (864) Increase (decrease) in other assets 1,317 (3,566) Increase (decrease) in broker/dealer customer payables 658 (9,029) Increase in interest payable 1,470 1,962 Increase in accounts payable and accrued expenses 4,917 12,874 -------- -------- Net cash provided by operating activities 7,703 45,450 -------- -------- Investing Activities: Available for sale securities: Proceeds from the maturities of securities 14,842 88,956 Proceeds from sales of securities 80,451 58,858 Purchases of securities (627) (256,056) Net increase (decrease) in loans 8,411 (54,442) Purchase of premises and equipment (1,390) (2,309) -------- -------- Net cash provided by (used in) investing activities 101,687 (164,993) -------- -------- Financing Activities: Net increase (decrease) in demand deposits, NOW accounts and savings accounts (103,650) 20,447 Net increase in certificates of deposit 141,918 68,829 Net decrease in federal funds purchased and securities sold under agreements to repurchase (59,267) (23,791) Increase (decrease) in long-term debt (1) 14 Increase (decrease) in Federal Home
6 Loan Bank advances (131,764) 70,334 Proceeds from exercise of stock options 672 183 Issuance of common stock 0 88 Cash dividends paid (4,180) (3,666) ---------- --------- Net cash provided by (used in) financing activities (156,272) 132,438 ---------- --------- Increase (decrease) in cash and cash equiv. (46,882) 12,895 Cash and cash equivalents at beginnning of period 166,433 120,396 -------- -------- Cash and Cash Equivalents at End of Period $119,551 $133,291 ======== ======== Cash paid during the period for: Interest expense $26,561 $15,476 ======= ======= Income taxes $1,757 $1,235 ====== ======
7 NATIONAL COMMERCE BANCORPORATION -------------------------------- Notes to Consolidated Financial Statements ------------------------------------------ (Unaudited) ----------- Note A - Basis of Presentation - - ------------------------------ The consolidated balance sheet at December 3l, 1994, has been derived from the audited financial statements at that date. The accompanying unaudited interim consolidated financial statements reflect all adjustments (consisting only of normally recurring accruals) which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The statements should be read in conjunction with the summary of accounting policies and notes to financial statements included in the Registrant's annual report for the year ended December 31, 1994. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted in accordance with the rules of the Securities and Exchange Commission. Note B - Securities Portfolio - - ----------------------------- The Company adopted FAS No. 115 "Accounting for Certain Investments in Debt and Equity Securities" at December 31, 1993. As a result, as of March 31, 1995, the securities in the "Available for Sale" category included $25,423,000 in unrealized losses. Accordingly, total securities and total stockholders' equity were decreased by $25.4 million and $15.5 million (net of taxes), respectively, at March 31, 1995, to reflect the adjustment of the securities portfolio to market. The calculation of book value per share reflects this mark-to-market unrealized loss, whereas the calculation of ROA and ROE do not, because the unrealized loss is not included in net income. The fair value of the "Held to Maturity" category was $278.6 million at March 31, 1995. 8 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ----------------------------------------------------------- AND RESULTS OF OPERATIONS ------------------------- The purpose of this discussion is to focus on important factors affecting the Company's financial condition and results of operations. Reference should be made to the consolidated financial statements (including the notes thereto) for an understanding of the following discussion and analysis. In this discussion, net interest income and net interest margin are presented on a fully taxable equivalent basis. All per share data is adjusted to reflect all stock dividends and stock splits declared through March 31, 1995. Financial Condition ------------------- Following is a comparison of the March 31, 1995, and December 31, 1994 , consolidated balance sheets. In the liability section, total deposits increased by $38 million or 1.8%, principally as a result of $118 million or 23.0% increase in certificates of deposit less than $100,000 and a $24 million or 8.6% increase in certificates of deposit of $1000,000 or more. Partially offsetting these increases, money market savings deposits decreased $45 million or 6.3%, total non interest-bearing deposits decreased $41 million or 13.4% reflecting current market trends and normally higher year-end non-interest-bearing deposit levels, money market checking accounts decreased $15 million or 5.8%, and savings deposits decreased $3 million or 3.0% Federal funds purchased and securities sold under agreements to repurchase decreased $59 million or 21.5% from year-end 1994 levels. This category of liabilities fluctuates with the availability of overnight funds purchased from downstream correspondent banks. Federal Home Loan Bank advances decreased $132 million or 41.0% from December 31, 1994. This decrease is principally the result of asset/liability management decisions due to the current interest rate environment. In the assets section, total gross loans decreased by $9 million or .6% compared to December 31, 1994 levels. Commercial loans decreased by $12 million or 3.5%, and real estate construction loans increased by $11 million or 11.8%, reflecting current demand. Consumer loans decreased $4 million or 0.6%, and real estate mortgage loans decreased by $5 million or 1.0%, reflecting a higher interest rate environment. Securities decreased by $66 million or 5.7% from year-end 1994. U.S. Government securities decreased $44 million or 36.4%, Federal agency securities decreased by $22 million or 2.6%, and 9 state and municipal securities decreased $1 million or 0.7%, and other securities increased $1 million or 2.9%. Effective December 31, 1993, the Company early adopted Financial Accounting Statement No. 115, "Accounting for Certain Investments in Debt and Equity Securities", which resulted in the adjustment of the majority of the securities portfolio to market value. This adjustment decreased the securities portfolio by $53.9 million and decreased stockholders' equity by $32.9 million at December 31, 1994, and decreased the securities portfolio by $25.4 million and decreased stockolders' equity by $15.5 million at March 31, 1995. The amortized cost of securities held to maturity totaled $283.9 million, and the market value of securities available for sale totaled $806.2 million at March 31, 1995. Federal funds sold and securities purchased under agreements to resell decreased by $19.7 million or 76.7% from December 31, 1994 levels, reflecting excess funds that otherwise were not employed in loans or securities at March 31, 1995. Trading account securities increased by $9.4 million or 69.6% from year-end 1994 levels. This increase relates to inventories of Commerce Investment Corporation, the Company's broker/dealer subsidiary, which fluctuate from time to time. Broker/dealer customer receivables and payables both increased, reflecting levels of activity. Results of Operations --------------------- Three Months Ended March 31, 1995, Compared to Three Months Ended March 31, 1994 --------------------------------------------------------------------------- Net income was $11,220,000 for the first quarter of 1995, a 10.5% increase over the $10,155,000 reported for the same period a year earlier. Earnings per share were $.45, compared to $.41 per share in 1994, up 9.8%. Net interest income, the difference between interest earned on loans and investments and interest paid on interest-bearing liabilities, increased by $1,804,000 or 6.6% for the first quarter of 1995. This increase reflects a $12,397,000 or 27.6% increase in total interest income that more than offsets a $10,593,000 or 60.7% increase in interest expense. Interest income increased in 1995 due to an increase of $328,529,000 or 13.2% in total average earnings assets, and an increase in the yield on average earning assets from 7.31% in the first quarter of 1994 to 8.24% in the first quarter of 1995. The increased volume of earning assets positively impacted interest income by approximately $5,918,000, while the increased yield positively impacted interest income by approximately $6,479,000. Interest expense increased in the first quarter of 1995, reflecting an increase in average interest-bearing liabilities of $305,500,000 10 or 14.3%, and an increase in the cost of interest-bearing liabilities from 3.32% to 4.67%, primarily as a result of deposit gathering in new markets. The increase in the rate paid on interest-bearing liabilities negatively affected interest expense by approximately $8,092,000, and the increase in average outstandings negatively affected interest expense by approximately $2,501,000. The net interest margin (taxable equivalent net interest income as a percentage of average earning assets) was 4.21% in first quarter 1995, compared to 4.47% in first quarter of 1994. The provision for loan losses in the first quarter of 1995 was $1,708,000, versus $1,661,000 for the quarter of 1994. Net charge-offs were $1,172,000, compared to $896,000 in 1994. The allowance for loan losses totaled $24,846,000 at March 31, 1995, representing 1.57% of quarter-end net loans, compared to $22,232,000 or 1.53% of quarter-end net loans at March 31, 1994. Following is a comparison of non-earning assets and loans past due 90 days of more for the quarters ended March 31, 1995, December 31, 1994, and March 31, 1994, (dollars in thousands):
3-31-95 12-31-94 3-31-94 ------- -------- ------- Non-accrual loans 0 0 0 Renegotiated loans 0 0 0 Other real estate 0 61 1,816 - -- ----- Total non-earning assets 0 61 1,816 = == ===== Loans past due 90 days or more 2,426 2,432 2,238
Non-interest income totaled $12,508,000 for the quarter, an increase of $830,000, or 7.1%, from last year's first quarter. The Company's broker/dealer revenue decreased $232,000 versus first quarter, 1994, reflecting current market conditions. All other sources of non-interest income, including service charge income, trust service income, and supermarket sublicence income increased a net of $1,062,000 or 11.1%. Non-interest expenses (excluding the provision for loan losses) increased by $933,000 or 4.4% in first quarter, 1995, primarily reflecting expenses of new locations totaling approximately $525,000. The Company's return on average assets and return on average equity, excluding unrealized losses on investment securities, were 1.49% and 17.32% respectively, for the first quarter of 1995. These compared with 1994 first quarter returns of 1.52% and 17.75%. 11 Liquidity and Capital Resources - - ------------------------------- Interest-bearing bank balances, federal funds sold, trading account securities,and securities held for sale are the principal sources of short-term asset liquidity. Other sources of short-term liquidity include federal funds purchased and repurchase agreements, credit lines with other banks, and borrowings from the Federal Reserve Bank and the Federal Home Loan Bank. Maturing loans and investment securities are the principal sources of long-term assets liquidity. Total realized stockholders' equity increased by $7,862,000 from December 31, 1994, with retained earnings accounting for substantially all of the increase. The following capital ratios do not include the effect of FAS No. 115 on Tier I capital, total capital, or total risk-weighted assets.
3-31-95 12-31-94 3-31-94 ------- -------- ------- Total capital to risk-weighted assets 15.48% 14.87% 14.90% Tier I capital to risk-weighed assets 14.23% 13.62% 13.65% Leverage ratio 9.19% 8.56% 8.45%
12 PART II. OTHER INFORMATION --------------------------- Item 6. Exhibits and Reports on Form 8-K a. Exhibits 11. Computation of Earnings per Share 27. Financial Data Shedule b. Reports on Form 8-K The Registrant did not file any reports on Form 8-K during the quarter ended March 31, 1995. 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 hereunto duly authorized. NATIONAL COMMERCE BANCORPORATION (Registrant) By______________________________ Lewis E. Holland Vice President and Chief Financial Officer (Authorized Officer) (Principal Financial Officer) Date ______________________ 13 EX-11 2 EARNINGS PER SHARE EXHIBIT 11 - Computation of Earnings Per Share ----------------------------------------------
(In Thousands, Except Per Share Data) --------------------- Three Months Ended March 31 --------------------- 1995 1994 ---- ---- Primary: Average shares outstanding 24,578 24,415 Less leveraged ESOP shares (50) (75) Net effect of the assumed exercise of stock options - based on the treasury stock method using average market price 655 665 ------ ------ Total 25,183 25,005 ====== ====== Net income $11,220 $10,155 Per share amount $.45 $.41 Fully Diluted: Average shares outstanding 24,578 24,415 Less leveraged ESOP shares (50) (75) Net effect of the assumed exercise of stock options - based on the treasury stock method using higher of quarter-end and average market price 655 665 ------ ------ Total 25,183 25,005 ====== ====== Net income $11,220 $10,155 Per share amount $.45 $.41
14 EX-27 3 FINANCIAL DATA SCHEDULE
9 1,000 3-MOS 3-MOS DEC-31-1995 DEC-31-1994 JAN-01-1995 JAN-31-1994 MAR-31-1995 MAR-31-1994 96,993 84,721 16,583 20,216 5,975 28,354 22,905 42,379 806,209 931,706 283,942 140,735 278,593 140,150 1,583,223 1,449,800 24,846 22,232 2,885,133 2,760,788 2,192,658 2,008,917 286,219 284,365 30,810 44,117 125,809 186,120 249,637 237,269 0 0 0 0 0 0 2,885,133 2,760,788 36,090 28,958 18,828 13,859 910 868 55,828 43,685 21,675 13,101 28,031 17,438 27,797 26,247 1,708 1,661 53 335 22,064 21,131 16,533 15,133 16,533 15,133 0 0 0 0 11,220 10,155 .45 .41 .45 .41 4.21 4.47 0 0 2,426 2,238 0 0 905 1,977 24,310 21,467 1,746 1,361 574 465 24,846 22,232 24,846 22,232 0 0 0 0
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