-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E9rmeOPYnvPNE0vYGqaaKVc6HAAB/MhOyN3bj0aCPbbrvuOX2saXgobCE3XkqPE8 /nn0DUaog3xRMnIyOLTqkg== 0000950132-96-000281.txt : 19960514 0000950132-96-000281.hdr.sgml : 19960514 ACCESSION NUMBER: 0000950132-96-000281 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960513 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: NATIONAL COMMERCE BANCORPORATION CENTRAL INDEX KEY: 0000101844 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [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: 96561445 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 10-Q FOR PERIOD ENDED 3/31/96 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, 1996 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 required 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 -- 24,667,583 shares as of May 9, 1996. 1 PART I. FINANCIAL INFORMATION - ------------------------------ Item 1. Financial Statements -------------------- NATIONAL COMMERCE BANCORPORATION Consolidated Balance Sheets -------------------------------- (In Thousands)
March 31 Dec. 31 1996 1995 ----------- ---------- (unaudited) ASSETS ------ Cash and cash equivalents: Interest-bearing deposits with other banks $ 17,008 $ 16,660 Cash and non-interest bearing deposits 151,573 144,166 Federal funds sold and securities purchased under agreements to resell 10,998 226,929 ---------- ---------- Total cash and cash equivalents 179,579 387,755 ---------- ---------- Securities: Held-to-maturity 826,984 762,023 Available-for-sale 572,420 516,623 ---------- ---------- Total securities 1,399,404 1,278,646 ---------- ---------- Trading account securities 19,763 20,159 Loans: Commercial, financial and agricultural 401,508 399,580 Real estate - construction 130,980 122,720 Real estate - mortgage 521,908 520,657 Consumer 913,756 871,407 Lease financing 17,564 18,678 ---------- ---------- Total loans 1,985,716 1,933,042 Less: Allowance for loan losses 30,224 29,010 Unearned discounts 1,835 1,829 ---------- ---------- Net loans 1,953,657 1,902,203 ---------- ---------- Premises and equipment, net 18,963 18,382 Broker/dealer customer receivables 9,412 13,444 Other assets 82,594 74,453 ---------- ---------- Total assets $3,663,372 $3,695,042 ========== ==========
See notes to consolidated financial statements. 2 Consolidated Balance Sheets (cont.) - ----------------------------------- (In Thousands)
March 31 Dec. 31 1996 1995 ---------- --------- (unaudited) LIABILITIES AND STOCKHOLDERS' EQUITY Liabilities: Deposits: Non-interest-bearing deposits $ 321,421 $ 331,436 Money market checking 277,658 274,876 Savings 89,497 86,989 Money market savings 742,803 735,911 Certificates of deposit less than $100,000 647,419 677,733 Certificates of deposit of $100,000 or more 477,564 467,825 ---------- ---------- Total deposits 2,556,362 2,574,770 ---------- ---------- Federal funds purchased and securities sold under agreements to repurchase 347,535 404,746 Broker/dealer customer payables 2,387 1,271 Accounts payable and accrued liabilities 46,505 38,396 Federal Home Loan Bank advances 405,513 372,799 Long-term debt 6,381 6,381 ---------- ---------- Total liabilities 3,364,683 3,398,363 ---------- ---------- Stockholders' equity: Common stock 49,606 49,669 Additional paid-in capital 77,879 80,605 Retained earnings 169,151 161,878 Unrealized gains on securities, net of taxes 2,053 4,527 ---------- ---------- Total stockholders' equity 298,689 296,679 Total liabilities and ---------- ---------- stockholders' equity $3,663,372 $3,695,042 ========== ==========
See notes to consolidated financial statements. 3 NATIONAL COMMERCE BANCORPORATION Consolidated Statements of Income --------------------------------- (Unaudited) (In Thousands)
For the three months ended March 31 -------------------- 1996 1995 -------- -------- Interest income: Loans $43,979 $36,090 Securities: Taxable 20,218 16,538 Non-taxable 2,006 2,290 Trading account securities 422 229 Deposits at banks 226 250 Other 399 431 ------- ------- Total interest income 67,250 55,828 ------- ------- Interest expense: Deposits: Money market checking 1,071 1,167 Savings 441 514 Money market savings 7,848 7,527 Certificates of deposit less than $100,000 9,267 7,644 Certificates of deposit of $100,000 or more 6,498 4,823 Federal Home Loan Bank advances 5,238 3,480 Long-term debt 114 113 Federal funds purchased and securities sold under agreements to repurchase 4,442 2,763 ------- ------- Total interest expense 34,919 28,031 ------- ------- Net interest income 32,331 27,797 Provision for loan losses 2,842 1,708 ------- ------- Net interest income after provision for loan losses 29,489 26,089 ------- ------- Other income: Trust service income 2,189 1,949 Service charges on deposits 3,371 3,411 Other service charges and fees 1,750 1,200 Broker/dealer revenue 3,581 1,890 Securities gains 25 53 Other income 4,040 4,005 ------- ------- Total other income 14,956 12,508 ------- -------
4 Consolidated Statements of Income (cont.) - -----------------------------------------
For the three months ended March 31 -------------------- 1996 1995 -------- -------- Other expenses: Salaries and employee benefits 11,977 9,808 Occupancy expense 2,350 2,102 Furniture and equipment expenses 903 857 FDIC assessment 110 1,092 Other expenses 9,081 8,205 ------- ------- Total other expenses 24,421 22,064 ------- ------- Income before income taxes 20,024 16,533 Income taxes 6,748 5,313 ------- ------- Net income $13,276 $11,220 ======= ======= Net income per share of common stock $.53 $.45 Dividends per share of common stock $.19 $.17
See notes to consolidated financial statements. 5 NATIONAL COMMERCE BANCORPORATION Consolidated Statements of Cash Flows ------------------------------------ (Unaudited)
For the three months ended March 31 ---------------------- 1996 1995 --------- --------- (In Thousands) Operating activities: Net income $ 13,276 $ 11,220 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Provision for loan losses 2,842 1,708 Provision for depreciation and amortization 1,028 1,029 Amortization of security premiums and accretion of discounts, net (51) (9) Deferred income taxes (credit) 98 (631) Decrease (increase) in trading account securities 396 (9,398) Realized securities gains (losses) (24) (53) (Increase) decrease in broker/dealer customer receivables 4,032 (5,285) Increase in interest receivable 1,845 760 Increase (decrease)in other assets (9,919) 1,317 Increase in broker/dealer customer payables 1,116 658 Increase (decrease) in interest payable (1,326) 1,470 Increase in accounts payable and accrued expenses 11,913 4,917 --------- --------- Net cash provided by operating activities 25,226 7,703 --------- --------- Investing activities: Available for sale securities: Proceeds from the maturities of securities 156,478 14,842 Proceeds from sales of securities 149,690 80,451 Purchases of securities available for sale (281,201) (627) Purchases of securities held to maturity (149,707) 0 Net increase (decrease) in loans (55,577) 8,41l Purchase of premises and equipment (1,459) (1,390) --------- --------- Net cash provided by (used in) investing activities (181,776) 101,687 --------- --------- Financing activities: Net increase (decrease) in demand deposits, NOW accounts and savings accounts 2,167 (103,650) Net increase (decrease) in certificates of deposit (20,575) 141,918 Net decrease in federal funds purchased and securities sold under agreements to repurchase (57,211) (59,267) Increase (decrease) in long-term debt 0 (1) Increase (decrease) in Federal Home Loan Bank advances 32,714 (131,764) Proceeds from exercise of stock options 2,168 672 Issuance of common stock 3,583 0 Repurchases of common stock (9,751) 0 Cash dividends paid (4,721) (4,180) --------- --------- Net cash provided by (used in) financing activities (51,626) (156,272) --------- --------- Decrease in cash and cash equivalents (208,176) (46,882) Cash and cash equivalents at beginning of period 387,755 166,433 --------- --------- Cash and cash equivalents at end of period $ 179,579 $ 119,551 ========= ========= Interest expense $ 36,245 $ 26,561 Income taxes paid $ 1,739 $ 1,757
6 NATIONAL COMMERCE BANCORPORATION -------------------------------- Notes to Consolidated Financial Statements ------------------------------------------ (Unaudited) --------- Note A - Basis of Presentation - ------------------------------ The consolidated balance sheet at December 31, 1995 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 consolidated financial statements included in the Registrant's annual report for the year ended December 31, 1995. 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 - ----------------------------- In accordance with FAS No. 115 "Accounting for Certain Investments in Debt and Equity Securities", as of March 31, 1996 the securities in the "Available for Sale" category included $3,366,000 in unrealized gains. Accordingly, total securities and total stockholders' equity were increased by $3.4 million and $2.1 million (net of taxes), respectively, at March 31, 1996, to reflect the adjustment of the securities portfolio to market. The calculation of book value per share reflects this mark-to-market unrealized gain, whereas the calculation of ROA and ROE do not, because the unrealized gain is not included in net income. The fair value of the "Held to Maturity" category was $819.3 million at March 31, 1996. 7 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, 1996. Financial Condition - ------------------- Following is a comparison of the March 31, 1996, and December 31, 1995, consolidated balance sheets. In the liability section, total deposits decreased by $18 million or 0.7%, principally as a result of a $30 million or 4.5% decrease in certificates of deposit less than $100,000 reflecting current market trends and a $10 million or 3.0% decrease in non-interest-bearing deposits reflecting normally higher year-end non-interest-bearing deposit levels. Partially offsetting these decreases, money market checking accounts increased $3 million or 1.0%, money market savings deposits increased $7 million or 0.9%, savings deposits increased $3 million or 2.9%, and certificates of deposit of $100,000 or more increased $10 million or 2.1%. Federal funds purchased and securities sold under agreements to repurchase decreased $57 million or 14.1% from year-end 1995 levels. This category of liabilities fluctuates with the availability of overnight funds purchased from downstream correspondent banks. Federal Home Loan Bank advances increased $33 million or 8.8% from December 31, 1995. This increase is principally the result of asset/liability management decisions related to the current interest rate environment. In the asset section, total gross loans increased by $53 million or 2.7% compared to December 31, 1995 levels. Commercial loans increased by $2 million or 0.5%, and real estate construction loans increased by $8 million or 6.7%, reflecting current demand. Consumer loans increased $42 million or 4.9%, reflecting increased emphasis on promoting indirect automobile loans. Securities increased by $121 million or 9.4% from year-end 1995. U.S. Government securities increased $18 million or 95.3%, Federal agency securities increased by $42 million or 4.1%, and state and municipal securities decreased $999 thousand or 0.7%, and other securities increased $62 million or 75.7%. Federal funds sold and securities purchased under agreements to resell decreased by $216 million or 95.2% from December 31, 1995 levels, reflecting less excess funds that otherwise were not employed in loans or securities at March 31, 1996. Trading account securities decreased by $396 thousand or 2.0% from year-end 1995 levels. This decrease reflects the trading activity generated by Commerce Investment Corporation, the Company's broker/dealer subsidiary, which fluctuates from time to time. Broker/dealer customer receivables decreased $4 million and payables increased $1 million reflecting levels of activity. 8 Results of Operations - --------------------- Three Months Ended March 31, 1996, Compared to Three Months Ended March 31, 1995 - -------------------------------------------------------------------------------- Net income was $13,276,000 for the first quarter of 1996, an 18.3% increase over the $11,220,000 reported for the same period a year earlier. Earnings per share were $.53, compared to $.45 per share in 1995, up 17.8%. Net interest income, the difference between interest earned on loans and investments and interest paid on interest-bearing liabilities, increased by $4,350,000 or 14.8% for the first quarter of 1996. This increase reflects an $11,238,000 or 19.6% increase in total interest income that more than offsets a $6,888,000 or 24.6% increase in interest expense. Interest income increased in 1996 due to an increase of $595,733,000 or 21.1% in total average earning assets, which more than offset a decrease in the yield on average earning assets from 8.24% in the first quarter of 1995 to 8.07% in the first quarter of 1996. The increased volume of earning assets positively impacted interest income by approximately $12,800,000, while the decreased yield negatively impacted interest income by approximately $1,600,000. Interest expense increased in the first quarter of 1996, reflecting an increase in average interest-bearing liabilities of $525,284,000 or 21.6%, and an increase in the cost of interest- bearing liabilities from 4.67 to 4.74%, 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 $500,000, and the increase in average outstandings negatively affected interest expense by approximately $6,400,000. The net interest margin (taxable equivalent net interest income as a percentage of average earning assets) was 3.96% in first quarter 1996, compared to 4.21% in first quarter of 1995. The provision for loan losses in the first quarter of 1996 was $2,842,000, versus $1,708,000 for the first quarter of 1995. Net charge-offs were $1,628,000, or .33% of average loans compared to $1,172,000 or .30% of average loans in 1995. The increased provision was due to possible losses on current and anticipated loan growth. The allowance for loan losses totaled $30,224,000 at March 31, 1996, representing 1.52% of quarter-end net loans, compared to $24,846,000 or 1.57% of quarter-end net loans at March 31, 1995. Following is a comparison of non-earning assets and loans past due 90 days or more for the quarters ended March 31, 1996, December 31, 1995, and March 31, 1995 (dollars in thousands): 3-31-96 12-31-95 3-31-95 ------- -------- ------- Non-accrual loans 0 0 0 Renegotiated loans 0 0 0 Other real estate 0 30 0 ----- ------ ----- Total non-earning assets 0 30 0 ===== ====== ===== Loans past due 90 day or more 3,670 3,252 2,426 Percentage of total loans .18% .17% .15% Non-interest income totaled $14,956,000 for the quarter, an increase of $2,448,000, or 19.6%, from last year's first quarter. The Company's broker/dealer revenue increased $1,691,000 versus first quarter, 1995, reflecting current market conditions. All other sources of non-interest income, including service charge income, trust service income, and supermarket sublicense income increased a net of $757,000 or 7.1%. 9 Non-interest expenses (excluding the provision for loan losses) increased by $2,357,000 or 10.7% in first quarter, 1996, primarily reflecting expenses of new locations and the expenses of introducing new loan and cash management products, partially offset by a reduction in FDIC insurance premiums. The Company's return on average assets and return on average equity were 1.47% and 18.14% respectively, for first quarter of 1996. These compared with 1995 first quarter returns of 1.49% and 17.32%, respectively. Liquidity and Capital Resources - ------------------------------- Interest-bearing bank balances, federal funds sold, trading account securities, and securities available 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 securities are the principal sources of long-term asset liquidity. Total realized stockholders' equity increased by $2,010,000 from December 31, 1995, with retained earnings accounting for substantially all of the increase, partially offset by the effect of a stock repurchase program initiated in January, 1996. Through March 31, 1996, 369,250 shares had been repurchased and cancelled under the program. This decrease in shares outstanding was offset by the issue of 205,615 shares through the exercise of stock options and 129,908 shares issued in exchange for the remaining stock of TransPlatinum Service Corp. The following capital ratios do not include the effect of FAS No. 115 on Tier I capital, total capital, or total risk-weighted assets. As indicated in the following table, the Company and its banking subsidiaries exceeded all minimum required capital ratios for well-capitalized institutions at the indicated dates. 3-31-96 12-31-95 3-31-95 ------- -------- ------- Total capital to risk-weighted assets 13.25% 13.52% 15.48% Tier I capital to risk-weighted assets 12.01% 12.3% 14.23% Tier I capital to assets (leverage ratio) 8.01% 7.91% 9.19% 10 PART II. OTHER INFORMATION - --------------------------- Item 6. Exhibits and Reports on Form 8-K -------------------------------- a. Exhibits 11. Computation of Earnings per Share 27. Financial Data Schedule b. Reports on Form 8-K The Registrant did not file any reports on Form 8-K during the quarter ended March 31, 1996. 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 /s/ Lewis E. Holland -------------------------------------- Lewis E. Holland Executive Vice President, Treasurer and Chief Financial Officer (Authorized Officer) (Principal Financial Officer) Date May 13, 1996 ------------------ 11 EX-11 2 EARNINGS PER SHARE EXHIBIT 11. Computation of Earnings Per Share - ----------------------------------------------
(In Thousands, Except Per Share Data) ------------------------------------- Three Months Ended March 31 1996 1995 ------- ------- Primary: Average shares outstanding 24,834 24,578 Less leveraged ESOP shares (105) (50) Net effect of the assumed exercise of stock options - based on the treasury stock method using average market price 511 655 ------- ------- Total 25,240 25,183 ======= ======= Net income $13,276 $11,220 Per share amount $ .53 $ .45 Fully Diluted: Average shares outstanding 24,834 24,578 Less leveraged ESOP shares (105) (50) Net effect of the assumed exercise of stock options - based on the treasury stock method using higher of quarter-end and average market price 624 655 ------- ------- Total 25,353 25,183 ======= ======= Net income $13,276 $11,220 Per share amount $ .52 $ .45
12 EX-27 3 ARTICLE 9 FDS
9 1,000 3-MOS 3-MOS DEC-31-1996 DEC-31-1995 JAN-01-1996 JAN-01-1995 MAR-31-1996 MAR-31-1995 151,573 96,993 17,008 16,583 10,998 5,975 19,763 22,905 572,420 806,209 826,984 283,942 819,297 278,593 1,983,881 1,583,223 30,224 24,846 3,663,372 2,885,133 2,556,362 2,192,658 393,267 286,219 48,892 30,810 366,162 125,809 298,689 249,637 0 0 0 0 0 0 3,663,372 2,885,133 43,979 36,090 22,224 18,828 1,047 910 67,250 55,828 25,125 21,675 34,919 28,031 32,331 27,797 2,842 1,708 25 53 24,421 22,064 20,024 16,533 20,024 16,533 0 0 0 0 13,276 11,220 .53 .45 .52 .45 3.96 4.21 0 0 3,670 2,426 0 0 530 905 29,010 24,310 2,607 1,746 979 574 30,224 24,846 30,224 24,846 0 0 0 0
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