-----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, NioAFps2LstMXhiMWuVt9ERI4ibCg5Z9zplX9CA7A2XkoqKgisTPitsts6/3L1vk S4/At3GeiyIv1oZOc+6dWA== 0000310979-97-000004.txt : 19970514 0000310979-97-000004.hdr.sgml : 19970514 ACCESSION NUMBER: 0000310979-97-000004 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970513 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST BANKS AMERICA INC CENTRAL INDEX KEY: 0000310979 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 751604965 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08230 FILM NUMBER: 97602434 BUSINESS ADDRESS: STREET 1: P O BOX 630369 CITY: HOUSTON STATE: TX ZIP: 77263-0369 BUSINESS PHONE: 7137817171 FORMER COMPANY: FORMER CONFORMED NAME: BANCTEXAS GROUP INC DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: COMMERCE SOUTHWEST INC DATE OF NAME CHANGE: 19820831 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 0-8937 FIRST BANKS AMERICA, INC. ------------------------- (Exact name of registrant as specified in its charter) DELAWARE 75-1604965 -------- ---------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) identification No.) P.O. Box 630369, HOUSTON, TEXAS 77263-0369 ------------------------------------------ (address of principal executive offices) (Zip Code) (713) 954-2400 (Registrant's telephone number, including area code) ---------------------------------------------------------------------- (Former name, former address, and former fiscal year, if changed since last report) 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 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. Outstanding at Class April 30, 1997 ----- -------------- Common Stock, $.15 par value 1,103,652 Class B Common Stock, $.15 par value 2,500,000 First Banks America, Inc. INDEX Page PART I FINANCIAL INFORMATION Item 1. Financial Statements: Consolidated Balance Sheets as of March 31, 1997 and December 31, 1996 -1- Consolidated Statements of Income for the three months ended March 31, 1997 and 1996 -3- Consolidated Statements of Cash Flows for the three months ended March 31, 1997 and 1996 -4- Notes to Consolidated Financial Statements -5- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations -7- PART II OTHER INFORMATION Item 6. Exhibit and Reports on Form 8-K -12- SIGNATURES -13- PART I - FINANCIAL INFORMATION Item 1. Financial Statements FIRST BANKS AMERICA, INC. Consolidated Balance Sheets (unaudited) (dollars expressed in thousands, except per share data)
March 31, December 31, 1997 1996 ---- ---- ASSETS ------ Cash and cash equivalents: Cash and due from banks...................................... $ 13,238 12,343 Interest-bearing deposits with other financial institutions- with maturities of three months or less................... 756 146 Federal funds sold........................................... 11,400 9,475 -------- -------- Total cash and cash equivalents........................ 25,394 21,964 -------- -------- Investment securities - available for sale, at fair value........ 90,546 86,910 Loans: Real estate construction and development...................... 43,344 48,025 Commercial and financial...................................... 50,005 44,238 Real estate mortgage.......................................... 55,290 54,761 Consumer and installment...................................... 86,820 96,096 -------- -------- Total loans............................................ 235,459 243,120 Unearned discount.............................................. (1,222) (1,246) Allowance for possible loan losses............................. ( 6,146) (6,147) -------- -------- Net loans.............................................. 228,091 235,727 -------- -------- Bank premises and equipment, net of accumulated depreciation..................................... 6,293 6,369 Intangible asset associated with the purchase of a subsidiary................................................... 3,240 3,127 Accrued interest receivable...................................... 2,015 2,348 Other real estate owned.......................................... 671 785 Deferred income taxes............................................ 15,956 15,519 Other assets..................................................... 1,681 2,433 -------- -------- Total assets........................................... $ 373,887 375,182 ======== ========
FIRST BANKS AMERICA, INC. Consolidated Balance Sheets (unaudited) (dollars expressed in thousands, except per share data) (continued)
March 31, December 31, 1997 1996 ---- ---- LIABILITIES ----------- Deposits: Demand: Non-interest bearing.......................................... $ 53,458 56,161 Interest bearing.............................................. 50,387 53,310 Savings......................................................... 68,210 66,523 Time: Time deposits of $100 or more................................. 30,505 31,679 Other time deposits........................................... 111,283 112,133 ------- ------- Total deposits............................................. 313,843 319,806 Short term borrowings................................................ 6,613 2,092 Note payable......................................................... 14,000 14,000 Deferred income taxes................................................ 1,527 909 Accrued and other liabilities........................................ 4,597 4,877 ------- ------- Total liabilities.......................................... 340,580 341,684 ------- ------- STOCKHOLDERS' EQUITY Common Stock: Common stock, $.15 par value; 6,666,666 shares authorized; 1,412,900 shares issued and outstanding........... 212 212 Class B common stock, $.15 par value; 4,000,000 shares authorized; 2,500,000 shares issued and outstanding........... 375 375 Capital surplus...................................................... 38,040 38,036 Retained deficit since elimination of accumulated deficit of $259,117, effective December 31, 1994........................ (1,874) (2,251) Common treasury stock, at cost; 311,748 shares and 280,430 shares at March 31, 1997 and December 31, 1996, respectively.................................................... (3,169) (2,838) Net fair value adjustment for securities available for sale.......... (277) (36) ------- ------- Total stockholders' equity................................. 33,307 33,498 ------- ------- Total liabilities and stockholders' equity................. $ 373,887 375,182 ======= =======
See accompanying notes to consolidated financial statements FIRST BANKS AMERICA, INC. Consolidated Statements of Income (unaudited) (dollars expressed in thousands, except per share data)
Three months ended March 31, 1997 1996 Interest income: Interest and fees on loans.................................................... $ 5,193 3,979 Investment securities......................................................... 1,248 525 Federal funds sold and other.................................................. 196 504 -------- -------- Total interest income................................................... 6,637 5,008 -------- -------- Interest expense: Deposits: Interest-bearing demand.................................................... 298 98 Savings.................................................................... 545 436 Time deposits of $100 or more.............................................. 421 343 Other time deposits........................................................ 1,513 1,433 Federal Home Loan Bank advances................................................ 30 64 Securities sold under agreements to repurchase, federal funds purchased and other borrowings.............................................. 14 76 Long-term debt................................................................. 276 24 -------- -------- Total interest expense.................................................. 3,097 2,474 -------- -------- Net interest income..................................................... 3,540 2,534 Provision for possible loan losses................................................ 550 100 -------- -------- Net interest income after provision for possible loan losses............ 2,990 2,434 -------- -------- Noninterest income: Service charges on deposit accounts and customer service fees.............. 415 345 Gain on sales of securities, net........................................... - 75 Other income............................................................... 240 18 -------- -------- Total noninterest income................................................ 655 438 -------- -------- Noninterest expense: Salaries and employee benefits............................................. 1,034 725 Occupancy, net of rental income............................................ 398 196 Furniture and equipment.................................................... 186 167 Federal Deposit Insurance Corporation premiums............................. 34 18 Postage, printing and supplies............................................. 99 74 Data processing fees....................................................... 236 80 Legal, examination and professional fees................................... 478 284 Communications............................................................. 129 110 Losses and expenses on foreclosed real estate, net of gains................ (31) 6 Other expenses............................................................. 468 433 -------- -------- Total noninterest expense............................................... 3,031 2,093 -------- -------- Income before provision for income taxes ............................... 614 779 Provision for income taxes........................................................ 237 318 -------- -------- Net income.............................................................. $ 377 461 ======== ======== Earnings per common share......................................................... $ .10 .12 ======== ======== Weighted average shares of common stock and common stock equivalents outstanding (in thousands)......................................... 3,676 4,008 ======== ========
See accompanying notes to consolidated financial statements FIRST BANKS AMERICA, INC. Consolidated Statements of Cash Flows (unaudited) (dollars expressed in thousands)
Three months ended March 31, 1997 1996 Cash flows from operating activities: Net income................................................................ $ 377 461 Adjustments to reconcile net income to net cash: Depreciation and amortization of bank premises and equipment........... 158 161 Amortization, net of accretion......................................... (142) (219) Provision for possible loan losses..................................... 550 100 (Increase) decrease in accrued interest receivable..................... 333 64 Interest accrued on liabilities........................................ 3,097 2,474 Payments of interest on liabilities.................................... (2,802) (2,449) Provision for income taxes............................................. 237 318 Gain on sales of securities, net....................................... - (75) Other.................................................................. 36 (247) --------- --------- Net cash provided by (used in) operating activities................ 1,844 588 --------- --------- Cash flows from investing activities: Sales of investment securities........................................... - 10,513 Maturities of investment securities...................................... 23,324 28,748 Purchases of investment securities....................................... (27,126) (77,700) Net decrease in loans.................................................... 6,859 11,126 Recoveries of loans previously charged off............................... 347 210 Purchases of bank premises and equipment................................. (82) (109) Other investing activities............................................... 34 36 --------- ---------- Net cash provided by (used in) investing activities................ 3,356 27,176) --------- ---------- Cash flows from financing activities: Increase (decrease) in deposits.......................................... (5,963) (2,032) Increase (decrease) in borrowed funds.................................... 4,520 (697) Repurchase of common stock for treasury.................................. (331) (150) Other financing activities............................................... 4 24 --------- ---------- Net cash provided by (used in) financing activities................ (1,770) (2,855) --------- ---------- Net increase (decrease) in cash and cash equivalents............... 3,430 (29,443) Cash and cash equivalents, beginning of period............................... 21,964 40,922 --------- --------- Cash and cash equivalents, end of period..................................... $ 25,394 11,479 ========= =========
See accompanying notes to consolidated financial statements FIRST BANKS AMERICA, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) Basis of Presentation The accompanying consolidated financial statements of First Banks America, Inc. (FBA) are unaudited and should be read in conjunction with the consolidated financial statements contained in the 1996 annual report on Form 10-K. In the opinion of management, all adjustments, consisting of normal recurring accruals considered necessary for a fair presentation of the results of operations for the interim period presented herein, have been included. Operating results for the three months ended March 31, 1997 are not necessarily indicative of the results that may be expected for the year ending December 31, 1997. Certain reclassifications of 1996 amounts have been made to conform with the 1997 presentation. The consolidated financial statements include the accounts of FBA and its subsidiaries, all of which are wholly owned. All significant intercompany accounts and transactions have been eliminated. FBA operates through two banking subsidiaries, BankTEXAS N.A., headquartered in Houston, Texas (BankTEXAS) and Sunrise Bank of California, headquartered in Roseville, California (Sunrise Bank) collectively referred to as Subsidiary Banks. Sunrise Bank was acquired on November 1, 1996. The acquisition was accounted for under the purchase method of accounting and, accordingly, the consolidated financial statements include the financial position and results of operations for the period subsequent to the acquisition date. (2) Transactions with Related Party Following the private placement of Class B common stock in August 1994, FBA began purchasing certain services and supplies from or through its majority shareholder, First Banks, Inc. (First Banks). FBA's financial position and operating results could significantly differ from those that would be obtained if FBA's relationship with First Banks did not exist. First Banks provides data processing and other management services to FBA and the Subsidiary Banks. Under the data processing agreement, a subsidiary of First Banks provides data processing and various related services to FBA. The management fee agreement provides that FBA compensate First Banks on an hourly basis for its use of personnel for various functions including internal auditing, loan review income tax preparation and assistance, accounting, asset/liability and investment services, loan servicing and other management and administrative services. Fees paid under these agreements were $483,000 for the three months ended March 31, 1997 compared to $223,000 for the three months ended March 31, 1996. The fees for such services are significantly lower than FBA was paying its nonaffiliated vendors. The Subsidiary Banks have $25.7 million and $21.4 million in whole loans and loan participations outstanding at March 31, 1997 and December 31, 1996, respectively, that were purchased from banks affiliated with First Banks. In addition, the Subsidiary Banks have sold $14.5 million and $26.7 million in whole loans and loan participations to affiliates of First Banks at March 31, 1997 and December 31, 1996, respectively. These loan and loan participations were acquired and sold at interest rates and terms prevailing at the dates of their purchase or sale and under standards and policies followed by the Subsidiary Banks. FBA borrowed $14.0 million from First Banks under a $15.0 million note payable agreement to fund the acquisition of Sunrise. The borrowings under the note agreement bear interest at an annual rate of one-quarter percent less than the "Prime Rate" as reported in the Wall Street Journal. The interest expense was $276,000 for the three months ended March 31, 1997. The principal and accrued interest under the note agreement are due and payable on October 31, 2001. The accrued and unpaid interest under the note agreement was $470,000 and $194,000 at March 31, 1997 and December 31, 1996, respectively. (3) Regulatory Capital The Subsidiary Banks are subject to various regulatory capital requirements administered by federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Subsidiary Banks' assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Subsidiary Banks' capital amounts and regulatory classification are also subject to qualitative judgments by the regulators about components, risk weighting, and other factors which may affect possible regulatory actions. Quantitative measures established by regulations to ensure capital adequacy require the Subsidiary Banks to maintain certain minimum capital ratios. The Subsidiary Banks are required to maintain a minimum risk-based capital to risk-weighted assets ratio of 8.00%, with at least 4.00% being "Tier 1" capital. Tier 1 capital is composed of total stockholders' equity excluding the net fair value adjustment for securities available for sale and excess net deferred tax assets, as defined by regulation. In addition, a minimum leverage ratio (Tier 1 capital to total assets) of 3.00% plus an additional cushion of 100 to 200 basis points is expected. In order to be well capitalized under Prompt Corrective Action provisions, the bank is required to maintain a risk weighted assets ratio of at least 10%, a Tier 1 to risk weighted assets ratio of a least 6%, and a leverage ratio of at least 5%. As of August 31, 1995, the date of the most recent notification from FBA's primary regulator, BankTEXAS was categorized as adequately capitalized under the regulatory framework for prompt corrective action. Management believes, as of March 31, 1997, the Subsidiary Banks are well capitalized as defined by the FDIC Act. At March 31, 1997 and December 31, 1996, FBA's and the Subsidiary Banks capital ratios were as follows: Risk-based capital ratios ------------------------- Total Tier 1 Leverage Ratio ----- ------ -------------- 1997 1996 1997 1996 1997 1996 ---- ---- ---- ---- ---- ---- FBA 7.96% 7.64% 6.69% 6.38% 4.92% 5.31% BankTEXAS 11.01 10.29 9.75 9.04 7.92 7.53 Sunrise Bank 18.81 17.67 17.53 16.39 11.32 10.88 Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations General FBA is a registered bank holding company, incorporated in Delaware and headquartered in Houston, Texas. At March 31, 1997, FBA had approximately $373.9 million in total assets; $234.2 million in total loans, net of unearned discount; $313.8 million in total deposits; and $33.3 million in total stockholders' equity. FBA operates through its Subsidiary Banks. Through the Subsidiary Banks' six locations in Texas and three locations in California, FBA offers a broad range of commercial and personal banking services including certificate of deposit accounts, individual retirement and other time deposit accounts, checking and other demand deposit accounts, interest checking accounts, savings accounts and money market accounts. Loans include commercial and industrial, real estate construction and development, commercial and residential real estate and consumer loans. Other financial services include credit-related insurance, automatic teller machines and safe deposit boxes. The following table lists the Subsidiary Banks at March 31, 1997: Loans, net of Number of Total unearned Total locations assets discount deposits --------- -------- -------- -------- BankTEXAS 6 $266,901 175,228 229,046 Sunrise Bank 3 103,179 59,010 85,283 Financial Condition FBA's total assets were $373.9 million and $375.2 million at March 31, 1997 and December 31, 1996, respectively. The primary fluctuation from December 31, 1996 was the continued decrease in the consumer and installment loan portfolio, which consists primarily of indirect automobile loans, of $9.3 million. The funds generated from this decrease were temporarily invested in shorter term investment securities and cash and cash equivalents. Results of Operations Net Income Net income was $377,000 and $461,000 for the three months ended March 31, 1997 and 1996, respectively. Earnings for the first quarter reflect the anticipated impact from the acquisition of Sunrise Bank, which includes $276,000 of interest expense attributable to the borrowings incurred in connection with the funding of the acquisition, as well as certain nonrecurring costs of converting to FBA's systems and procedures and staff reductions. Offsetting this impact to earnings is the continued improvement in the operating results of BankTEXAS, which earned $629,000 for the three months ended March 31, 1997, in comparison to $492,000 for the same period in 1996. Net Interest Income Net interest income was $3.54 million, or 4.30% of average interest earning assets for the three months ended March 31, 1997, compared to $2.53 million, or 3.83% of average interest earning assets, for the same period in 1996. The improved net interest income is reflective of the repositioning of the loan and investment security portfolios of BankTEXAS and the acquisition of Sunrise Bank. In addition, the cost of interest bearing liabilities decreased to 4.48% for the three months ended March 31, 1997 from 4.73% for the same period in 1996. The following table sets forth certain information relating to FBA's average balance sheet, and reflects the average yield earned on interest-earning assets, the average cost of interest-bearing liabilities and the resulting net interest income for the three months ended March 31:
1997 1996 --------------------------------- ------------------------------ Interest Interest Average income/ Yield/ Average income/ Yield/ balance expense rate balance expense rate ------- ------- ---- ------- ------- ---- (dollars expressed in thousands) Assets ------ Interest-earning assets: Loans.................................... $ 233,671 5,193 9.01% $ 188,473 3,979 8.47% Investment securities.................... 85,258 1,248 5.94 39,038 525 5.38 Federal funds sold and other............. 15,037 196 5.28 38,061 504 5.30 ------ -------- --------- ------ Total interest-earning assets...... 333,966 6,637 8.06 265,572 5,008 7.56 -------- ------ Nonearning assets........................... 36,599 29,969 ------- -------- Total assets....................... $ 370,565 $ 295,541 ======= ======== Liabilities and Stockholders' ----------------------------- Equity Interest-bearing liabilities: Interest-bearing demand deposits......... $ 51,893 298 2.33% $ 20,836 98 1.88% Savings deposits......................... 67,851 545 3.25 53,881 436 3.24 Time deposits of $100 or more............ 31,072 421 5.49 24,008 343 5.71 Other time deposits...................... 112,374 1,513 5.46 102,813 1,433 5.58 ------- ----- -------- ----- Total interest-bearing deposits.... 263,190 2,777 4.23 201,538 2,310 4.58 Federal funds purchased, repurchase agreements and Federal Home Loan Bank advances........ 3,277 44 5.45 6,092 140 9.19 Notes payable and other ................. 14,000 276 8.00 1,477 24 6.50 -------- ----- -------- ------- Total interest-bearing liabilities. 280,467 3,097 4.48 209,107 2,474 4.73 ----- ----- Noninterest-bearing liabilities: Demand deposits.......................... 50,197 46,639 Other liabilities........................ 6,313 4,356 ------ --------- Total liabilities.................. 336,977 260,102 Stockholders' equity........................ 33,588 35,439 -------- --------- Total liabilities and stockholders' equity........... $ 370,565 $ 295,541 ======== ======= Net interest income................ 3,540 2,534 ===== ===== Net interest margin................ 4.30% 3.83% ==== ====
Provision for Possible Loan Losses The provision for possible loan losses was $550,000 for the three months ended March 31, 1997, compared to $100,000 for the same period in 1996. Net loan charge-offs were $551,000 for the three months ended March 31, 1997 compared to $541,000 for the same period in 1996. Nonperforming loans were $1.93 million at March 31, 1997 in comparison to $2.10 million and $568,000 at December 31, 1996 and March 31, 1996, respectively. The increase in nonperforming loans during 1996 is attributable to the acquisition of Sunrise Bank. The current provision for possible loan losses reflects management's evaluation of the credit quality of the loans in the portfolio and its assessment of the adequacy of the allowance for possible loan losses. Noninterest Income Noninterest income increased by $217,000 to $655,000 for the three months ended March 31, 1997, from $438,000 for the same period in 1996. Noninterest income consists primarily of service charges on deposit accounts and customer service fees. Service charges on deposit accounts and customer service fees increased by $70,000 to $415,000 from $345,000 for the three months ended March 31, 1997 and 1996, respectively. This increase is attributable to the acquisition of Sunrise Bank. Other income increased by $222,000 to $240,000 from $18,000 for the three months ended March 31, 1997 and 1996, respectively. The increase is comprised of a $127,000 legal settlement received by Sunrise Bank and a net gain of $24,000 realized upon disposition of repossessed and other assets for the three months ended March 31, 1997, compared to a net loss of $50,000 for the same period in 1996. Offsetting the increase in noninterest income for the three months ended March 31, 1997, was a gain of $75,000 recognized upon the sale of an investment security during the three months ended March 31, 1996. Noninterest Expense Noninterest expense was $3.0 million for the three months ended March 31, 1997 compared to $2.1 million for the same period in 1996. The increase is attributable to the noninterest expense of Sunrise Bank, which was acquired by FBA on November 1, 1996, of $1.2 million, partially offset by a reduction in the noninterest expense of BankTEXAS. Lending and Credit Management Interest earned on the loan portfolio is the primary source of income of FBA. Total loans, net of unearned discount, represented 62.6% and 64.5% of total assets as of March 31, 1997 and December 31, 1996, respectively. Total loans, net of unearned discount, were $234.2 million and $241.9 million at March 31, 1997 and December 31, 1996, respectively. The decrease is primarily due to the consumer automobile loan portfolio reflecting the more stringent lending practices implemented during 1995 and 1996. As the size of the consumer automobile loan portfolio declines, FBA has expanded its corporate lending function, including purchasing loans from affiliated banks. FBA's nonperforming loans consist of loans on a nonaccrual status and loans on which the original terms have been restructured. Impaired loans, consisting of nonaccrual and consumer and installment loans 60 days or more past due were $2.7 million and $3.7 million at March 31, 1997 and December 31, 1996, respectively. The following is a summary of nonperforming assets and past due loans at the dates indicated:
March 31, December 31, 1997 1996 ---- ---- (dollars expressed in thousands) Nonperforming assets: Nonperforming loans.................................... $ 1,930 2,095 Other real estate...................................... 671 785 ------- ------- Total nonperforming assets.......................... $ 2,601 2,880 ======= ======= Loans past due: Over 30 days to 90 days................................ $ 4,651 6,471 Over 90 days and still accruing........................ 656 583 ------- ------- Total past due loans................................ $ 5,307 7,054 ======= ======= Loans, net of unearned discount.......................... $ 234,237 241,874 ======= ======= Asset quality ratios: Allowance for possible loan losses to loans............ 2.62% 2.54% Nonperforming loans to loans .......................... .82 .87 Allowance for possible loan losses to nonperforming loans ................................ 318.45 293.41 Nonperforming assets to loans and other real estate.... 1.11 1.19 ======== ========
The allowance for possible loan losses is based on past loan loss experience, on management's evaluation of the quality of the loans in the portfolio and on the anticipated effect of national and local economic conditions relative to the ability of loan customers to repay. Each month, the allowance for possible loan losses is reviewed relative to FBA's internal watch list and other data utilized to determine its adequacy. The provision for possible loan losses is management's estimate of the amount necessary to maintain the allowance at a level consistent with this evaluation. As adjustments to the allowance for possible loan losses are considered necessary, they are reflected in the results of operations. The following is a summary of the loan loss experience for the three months ended March 31: 1997 1996 ---- ---- (dollars expressed in thousands) Allowance for possible loan losses, beginning of period $ 6,147 5,228 Loans charged-off (898) (751) Recoveries of loans previously charged-off 347 210 ------ ----- Net loan (charge-offs) recoveries (551) (541) ------ ----- Provision for possible loan losses 550 100 ------ ----- Allowance for possible loan losses, end of period $ 6,146 4,787 ====== ===== Liquidity The liquidity of FBA and the Subsidiary Banks is the ability to maintain a cash flow which is adequate to fund operations, service debt obligations and meet other commitments on a timely basis. The primary sources of funds for liquidity are derived from customer deposits, loan payments, maturities, sales of investments and operations. In addition, FBA and the Subsidiary Banks may avail themselves of more volatile sources of funds through issuance of certificates of deposit in denominations of $100,000 or more, federal funds borrowed, securities sold under agreements to repurchase and borrowings from the Federal Home Loan Bank. The aggregate funds acquired from those sources were $37.1 million and $33.8 million at March 31, 1997, and December 31, 1996, respectively. At March 31, 1997, FBA's more volatile sources of funds mature as follows: (dollars expressed in thousands) Three months or less $ 16,179 Over three months through six months 6,032 Over six months through twelve months 6,630 Over twelve months 8,277 ------- Total $ 37,118 ======= Management believes the available liquidity and earnings of the Subsidiary Banks will be sufficient to provide funds for FBA's operating and debt service requirements both on a short-term and long-term basis. Effects of New Accounting Standard FBA adopted the provisions of SFAS 125, Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities (SFAS 125) prospectively on January 1, 1997. SFAS 125 established accounting and reporting standards for transfers and servicing of financial assets and extinguishment of liabilities. The standards established by SFAS 125 are based on consistent applications of a financial-components approach that focuses on control. Under that approach, after a transfer of financial assets, an entity recognizes the financial and servicing assets it controls and the liabilities it has incurred, derecognizes financial assets when control has been surrendered, and derecognizes liabilities when extinguished. This statement provides consistent standards for distinguishing transfers of financial assets that are sales from transfers that are secured borrowings. The implementation of SFAS 125 did not have a material effect on the consolidated financial position or results of operation of FBA. In February 1997, the FASB issued SFAS 128, Earnings Per Share (SFAS 128). SFAS 128 supersedes Accounting Principles Board Opinion No. 15, Earnings Per Share (APB 15) and specifies the computation, presentation, and disclosure requirements for earnings per share (EPS) for entities with publicly held common stock or potential common stock. SFAS 128 was issued to simplify the computation of EPS and to make the U.S. standard more compatible with the EPS standards of other countries and that of the International Accounting Standards Committee. It replaces the presentation of primary EPS with a presentation of basic EPS and fully diluted EPS with diluted EPS. SFAS 128 also requires dual presentation of basic and diluted EPS on the face of the income statement for all entities with complex capital structures, and requires a reconciliation of the numerator and denominator of the basic EPS computation to the numerator and denominator of the diluted EPS Computation. Basic EPS, unlike primary EPS, excludes dilution and is computed by dividing income available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised and converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the entity. Diluted EPS is computed similarly to fully diluted EPS under APB15. SFAS 128 is effective for financial statements for both interim and annual periods ending after December 15, 1997. Earlier application is not permitted. After adoption, all prior-period EPS data presented shall be restated to conform with SFAS 128. FBA does not believe the implementation of SFAS 128 will have a material effect on its computation of earnings per share. In February 1997, the FASB issued SFAS 129, Disclosure of Information about Capital Structure (SFAS 129). SFAS 129 establishes standards for disclosing information about an entity's capital structure. It applies to all entities. SFAS 129 continues the previous requirements to disclose certain information about an entity's capital structure found in APB 10, Omnibus Opinion-1966, APB 15 and SFAS 47, Disclosure of Long-Term Obligations, for entities that were subject to the requirements of those standards. SFAS 129 eliminates the exemption of nonpublic entities from certain disclosure requirements of APB 15 as provided by SFAS 21, Suspension of the reporting of Earnings per Share and Segment Information by Nonpublic Enterprises. It supersedes specific disclosure requirements of APB 10, APB 15 and SFAS 47 and consolidates them in SFAS 129 for ease of retrieval and for greater visibility to nonpublic entities. SFAS 129 is effective for financial statements for periods ending after December 15, 1997. It contains no change in disclosure requirements for entities that were previously subject to the requirements of APB 10 and 15 and SFAS 47. PART II - OTHER INFORMATION Item 6 - Exhibit and Reports on Form 8-K (a) The exhibit is numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K. Exhibit Number Description 27 Article 9 - Financial Data Schedule (EDGAR only) 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 thereunto duly authorized. FIRST BANKS AMERICA, INC. Registrant Date: May 12, 1997 By: /s/James F. Dierberg -------------------- James F. Dierberg Chairman, President and Chief Executive Officer Date: May 12, 1997 By: /s/Allen H. Blake ----------------- Allen H. Blake Vice President, Chief Financial Officer and Secretary (Principal Financial Officer) EX-27 2 FDS --
9 0000310979 First Banks America, Inc. 1,000 3-mos Dec-31-1997 Jan-01-1997 Mar-31-1997 13,238 756 11,400 0 90,546 0 0 234,237 (6,146) 373,887 313,843 6,613 6,124 14,000 0 0 587 32,720 373,887 5,193 1,248 196 6,637 2,777 3,097 3,540 550 0 3,031 614 614 0 0 377 .10 .10 8.06 1,930 656 0 5,866 6,147 898 347 6,146 6,146 0 0
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