-----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, TY7BkG7Up3/S/4UTertJ1IOCjjGWiUcEv7dHjMFrEWCe00ZYELRg49ukPUvJg+AF Esube+guwFDA/RhPusc8pg== 0000912057-95-010091.txt : 19951120 0000912057-95-010091.hdr.sgml : 19951120 ACCESSION NUMBER: 0000912057-95-010091 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19951114 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19951115 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRST BANK SYSTEM INC CENTRAL INDEX KEY: 0000036104 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 410255900 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-06880 FILM NUMBER: 95593897 BUSINESS ADDRESS: STREET 1: FIRST BANK PL STREET 2: 601 SECOND AVE S CITY: MINNEAPOLIS STATE: MN ZIP: 55402-4302 BUSINESS PHONE: 6129731111 FORMER COMPANY: FORMER CONFORMED NAME: FIRST BANK STOCK CORP DATE OF NAME CHANGE: 19720317 8-K/A 1 8-K/A UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K/A - AMENDMENT NO. 2 CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of report (Date of earliest event reported): NOVEMBER 14, 1995 ----------------- FIRST BANK SYSTEM, INC. ----------------------- (Exact name of registrant as specified in its charter) DELAWARE 1-6880 41-0255900 -------- ------ ---------- (State or other jurisdiction (Commission (I.R.S. Employer of Incorporation) File Number) Identification No.) 601 SECOND AVENUE SOUTH, MINNEAPOLIS, MINNESOTA 55402 - ----------------------------------------------- ----- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: 612-973-1111 ------------ NOT APPLICABLE -------------- (Former name or former address, if changed since last report) The undersigned registrant hereby amends its Current Report on Form 8-K filed on August 18, 1995 to update the financial statements of FirsTier Financial, Inc. to include results for the quarter ended September 30, 1995. Item 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS (a) UNAUDITED FINANCIAL STATEMENTS OF FIRSTIER FINANCIAL, INC. Consolidated Condensed Balance Sheets -- September 30, 1995 and December 31, 1994 (unaudited) Consolidated Statements of Income -- Nine months ended September 30, 1995 and 1994 (unaudited) Consolidated Statements of Retained Earnings -- Nine months ended September 30, 1995 and 1994 (unaudited) Consolidated Statements of Cash Flows -- Nine months ended September 30, 1995 and 1994 (unaudited) Notes to Consolidated Financial Statements -- September 30, 1995 (unaudited) SIGNATURE 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 BANK SYSTEM, INC. By: /s/ David J. Parrin -------------------- David J. Parrin Senior Vice President & Controller DATE: November 14, 1995 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Under Section 13 or 15 (d) of the Securities Exchange Act of 1934 For Quarter Ended September 30, 1995 Commission File No. 0-4515 FIRSTIER FINANCIAL, INC. --------------------------------------------------------- (Exact name of registrant as specified in its charter) Nebraska 47-0523055 ------------------------------ --------------------------------------- (state or other jurisdiction (I.R.S. Employer Identification No.) of incorporation or organization) 1700 Farnam Street Omaha, Nebraska 68102-2183 --------------------------------------------------------- (address of principal executive offices) 402-348-6000 -------------------- (Telephone Number) 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 such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. YES X NO ----- ----- Number of common shares outstanding as of November 7, 1995: Common Stock, $5.00 par value: 18,522,507 shares outstanding. FIRSTIER FINANCIAL, INC. INDEX PART I. FINANCIAL INFORMATION Page No. -------- Item 1. Financial Statements Consolidated Condensed Balance Sheets - September 30, 1995 and December 31, 1994........... 1 Consolidated Statements of Income - Three and nine months ended September 30, 1995 and 1994........... * Consolidated Statements of Retained Earnings - Nine months ended September 30, 1995 and 1994........... * Consolidated Statements of Cash Flows - Nine months ended September 30, 1995 and 1994........... 2 Notes to Consolidated Financial Statements........... 3-4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 5-9 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K............ 10 Signatures........................................... 10 * Incorporated in this quarterly report by reference to FirsTier Financial, Inc.'s September 30, 1995 Quarterly Report to Stockholders (pages 4 and 6) which is attached as an Exhibit to this quarterly report. FIRSTIER FINANCIAL, INC. CONSOLIDATED CONDENSED BALANCE SHEETS (Dollars in Thousands) (Unaudited)
September 30, December 31, 1995 1994 ------------ ------------ ASSETS Cash and due from banks............................................................... $208,242 251,756 Federal funds sold & securities purchased under resale agreements..................... 97,050 119,845 Securities available for sale (amortized cost $255,241 in 1995 and $250,811 in 1994).. 261,411 245,267 Investment securities (market value $755,303 in 1995 and $660,068 in 1994)............ 740,843 692,457 Loans and leases...................................................................... 2,191,140 2,149,268 Less allowance for loan & lease losses............................................... 52,064 53,250 ------------ ------------ Loans and leases, net.............................................................. 2,139,076 2,096,018 ------------ ------------ Premises and equipment, net........................................................... 50,435 49,381 Accrued interest receivable........................................................... 35,082 29,700 Other assets.......................................................................... 53,283 55,563 ------------ ------------ Total assets....................................................................... $3,585,422 3,539,987 ------------ ------------ ------------ ------------ LIABILITIES Demand, non-interest bearing.......................................................... $470,703 560,025 Savings and interest checking......................................................... 867,832 874,647 Time.................................................................................. 1,437,124 1,380,154 ------------ ------------ Total deposits..................................................................... 2,775,659 2,814,826 Short-term borrowings................................................................. 205,543 170,090 Federal Home Loan Bank borrowings..................................................... 156,500 150,000 Other liabilities..................................................................... 59,934 50,646 Long-term debt........................................................................ 11,773 12,193 ------------ ------------ Total liabilities.................................................................. 3,209,409 3,197,755 ------------ ------------ STOCKHOLDERS' EQUITY Preferred stock-$30 par value; authorized 2,000,000 shares............................ - - Common stock-$5 par value; authorized 40,000,000 shares; issued and outstanding: 18,822,202 shares in 1995 and 18,927,195 shares in 1994............................. 94,111 94,073 Surplus............................................................................... 5,432 10,338 Retained earnings..................................................................... 282,621 255,861 Net unrealized securities gains (losses).............................................. 3,824 (3,583) ------------ ------------ 385,988 356,689 Less treasury stock, at cost 300,820 shares in 1995 and 455,050 shares in 1994........ 9,975 14,457 ------------ ------------ Total stockholders' equity......................................................... 376,013 342,232 ------------ ------------ Total liabilities & stockholders' equity........................................... $3,585,422 3,539,987 ------------ ------------ ------------ ------------
See accompanying notes to consolidated financial statements 1 FIRSTIER FINANCIAL, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1995 AND 1994 ($ in thousands) (Unaudited)
1995 1994 -------- --------- Net cash provided by operating activities Income from operations................................... $42,645 41,444 Adjustments to reconcile net income to net cash provided by operations Provision for loan and lease losses.................. 807 (1,220) Depreciation and amortization........................ 5,931 7,020 Net increase in interest receivable.................. (5,034) (5,872) Proceeds from sales of loans......................... 54,242 41,695 Net (increase) decrease in other assets.............. 528 (693) Net increase in other liabilities.................... 9,204 3,511 Net gain on sale of securities available for sale.... (1) 3,721 Other, net........................................... (84) (12) -------- --------- Net cash provided by operations.................. 108,238 89,594 Cash flows from investing activities Net cash received on acquisition..................... 1,530 - Proceeds from sales of securities available for sale. 13,382 17,116 Proceeds from maturities of investment securities.... 37,064 138,499 Proceeds from maturities of securities available for sale............................................... 78,357 27,105 Purchases of investment securities................... (56,694) (75,235) Purchases of securities available for sale........... (112,969) (70,654) Net increase in loans and leases..................... (74,870) (143,039) Proceeds from sale of premises and equipment......... 450 62 Purchases of premises and equipment.................. (5,112) (3,802) Purchases of mortgage servicing rights............... (843) (232) Other, net........................................... 12 557 -------- --------- Net cash used by investing activities............ (119,693) (109,623) Cash flows from financing activities Net increase in time deposits........................ 28,225 52,421 Net decrease in demand deposits and savings accounts. (104,255) (148,781) Net increase in short-term borrowings................ 34,762 104,555 Net increase in Federal Home Loan Bank borrowings.... 6,500 89,690 Principal payments on long-term debt................. (420) (383) Payment of cash dividends............................ (15,886) (13,382) Repurchases of common stock.......................... (4,684) (9,565) Proceeds from exercises of stock options............. 1,292 474 Other, net........................................... (388) - -------- --------- Net cash provided (used) by financing activities. (54,854) 75,029 Net (decrease) increase in cash and cash equivalents....... (66,309) 55,000 Cash and cash equivalents at beginning of period........... 371,601 331,848 -------- --------- Cash and cash equivalents at end of period................. $305,292 386,848 -------- --------- -------- ---------
See accompanying notes to consolidated financial statements 2 FIRSTIER FINANCIAL, INC. PART I. FINANCIAL INFORMATION ITEM 1. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. 2. Operating results for the three and nine month periods ended September 30, 1995, are not necessarily indicative of the results that may be expected for the year ended December 31, 1995. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's annual report on Form 10-K for the year ended December 31, 1994. 3. Income per share computations are based on average shares of common stock outstanding, including common stock equivalents, which total 18,749,481 and 18,880,955, respectively, for the three months ended September 30, 1995 and 1994, and 18,694,966 and 18,977,579, respectively, for the nine months ended September 30, 1995 and 1994. 4. See notes to consolidated financial statements includedon page 6 of FirsTier Financial, Inc.'s September 30, 1995 Quarterly Report to Stockholders which is attached as an Exhibit to this quarterly report. 5. For purposes of the Statement of Cash Flows, FirsTier defines "Cash and due from banks" and "Federal funds sold and securities purchased under resale agreements" as its cash and cash equivalents. FirsTier paid $89.22 million and $68.66 million in interest on deposits and other borrowings, and $13.68 million and $15.09 million for income taxes for the nine months ended September 30, 1995 and 1994, respectively. 6. Effective January 1, 1995, FirsTier adopted SFAS Number 114, "Accounting by Creditors for Impairment of a Loan" and SFAS Number 118, "Accounting by Creditors for Impairment of a Loan-Income Recognition and Disclosures." These Statements, effective for fiscal years beginning after December 15, 1994, address the accounting for a loan when it is probable that all principal and interest amounts due will not be collected in accordance with its contractual terms. FirsTier generally identifies nonaccrual loans as "impaired loans." Certain loans, such as loans carried at the lower of cost or market or 3 FIRSTIER FINANCIAL, INC. PART I. FINANCIAL INFORMATION ITEM 1. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED) smaller balance homogeneous loans (e.g., credit card, installment loans) are exempt from SFAS Number 114 and 118 provisions. The adoption of SFAS Number 114 and 118 does not materially impact required Industry Guide 3 credit risk tables disclosed in FirsTier's Form 10-K for the year ended December 31, 1994. FirsTier continually identifies impaired loans and measures quarterly the extent to which such loans are impaired in accordance with regulatory guidelines. This analysis involves an assessment of the business environment in FirsTier's lending market, the amount of concentrations in industries along with borrowers' employment, historical losses charged to the allowance for loan loss, the level of vulnerability to business cycles, as well as other factors. Loans having a significant recorded investment are measured on an individual basis while loans not having a significant recorded investment are grouped and measured on a pool basis. Generally, FirsTier's "impaired loans" are measured based on the loans' observable market price, the fair value of the collateral (if the loan is collateral dependent) less estimated costs to sell, or the present value of expected future cash flows discounted at the loans' effective interest rate, if the cash flows can be reasonably projected. As of September 30, 1995, the recorded investment in loans considered impaired under SFAS Number 114 was $9.1 million, with a related allowance for credit losses of $2.8 million. All loans designated as impaired have been allocated an allowance for credit loss. FirsTier retained its prior method of recognizing interest and applying cash payments received with respect to impaired loans. The average recorded investment in impaired loans for the quarter ended September 30, 1995, was approximately $8.6 million. During the first nine months of 1995, FirsTier recognized interest income of $132,000 associated with impaired loans. 4 FIRSTIER FINANCIAL, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following is management's discussion and analysis of certain significant factors which have affected the Registrant's financial condition and results of operations during the periods included in the consolidated financial statements presented with this filing. RESULTS OF OPERATIONS Net income for the third quarter of 1995 was $15,009,000 or $.80 per share, compared to net income of $13,872,000 or $.73 per share for the same period in 1994. Net income for the nine months ended September 30, 1995 was $42,645,000 or $2.28 per share, compared to net income of $41,444,000 or $2.18 per share for the same period in 1994. The annualized return on average assets for the three months ended September 30 was 1.66% in 1995 compared to 1.60% in 1994. The annualized return on average equity for the three months ended September 30 was 16.13% in 1995 compared to 16.18% in 1994. The schedule on page 6, Average Balances/Yields and Rates, shows that FirsTier's net interest income, on a fully taxable equivalent basis for the third quarter of 1995, was $36,040,000, a .5% increase from the $35,863,000 recorded for the same period in 1994. The net interest margin of 4.37% in the third quarter of 1995 was down from the 4.53% net interest margin recorded in the third quarter of 1994. This decrease was mainly attributable to a compressed net interest rate spread but was partially offset by increased net earning assets which were up 4.2% from the third quarter of 1994. Included in net interest income is $424,100 of expense from interest rate swaps which decreased the net interest margin for the quarter by five basis points. Income from interest rate swaps for the quarter ended September 30, 1994 was $143,000 which added two basis points to that quarter's net interest margin. A provision of $269,000 was recorded in the third quarter of1995 compared to a provision of $370,000 for the same period in 1994. The provision recorded was based on FirsTier's on-going analysis of the adequacy of the allowance for loan and lease losses. The allowance for loan and lease losses as a percent of loans and leases as of September 30, 1995, was 2.38% compared to 2.59% as of September 30, 1994. Net charge-offs of loan and lease losses for the third quarter were $1,207,000 compared to net recoveries of $252,000 for the same period in 1994. 5 FIRSTIER FINANCIAL, INC. AVERAGE BALANCES/YIELDS AND RATES (Dollars in Thousands) (Unaudited)
THREE MONTHS ENDED THREE MONTHS ENDED SEPTEMBER 30, 1995 SEPTEMBER 30, 1994 INTEREST AVERAGE INTEREST AVERAGE AVERAGE INCOME/ YIELDS/ AVERAGE INCOME/ YIELDS/ BALANCES EXPENSE RATES BALANCES EXPENSE RATES ASSETS Securities....................................... $995,681 18,569 7.40% $1,008,801 18,366 7.22% Federal funds sold and securities purchased under resale agreements.............. 103,742 1,549 5.93% 110,028 1,316 4.75% Loans and leases, gross.......................... 2,175,473 48,404 8.83% 2,024,936 41,246 8.08% --------- ------- ---------- ------- Total earning assets........................... 3,274,896 68,522 8.30% 3,143,765 60,928 7.69% Other nonearning assets.......................... 308,739 - - 313,246 - - --------- ------- ---------- ------- Total assets.................................$3,583,635 68,522 - $3,457,011 60,928 - ========== ------- ========== ------- LIABILITIES & STOCKHOLDERS' EQUITY Interest-bearing deposits Savings and interest checking.................. $883,124 5,894 2.65% $886,716 4,817 2.16% Time deposits.................................. 1,443,511 21,643 5.95% 1,302,750 15,846 4.83% --------- ------- ---------- ------- Total interest-bearing deposits.............. 2,326,635 27,537 4.70% 2,189,466 20,663 3.74% Short-term borrowings............................ 172,450 2,272 5.23% 208,701 2,168 4.12% Federal Home Loan Bank borrowings................ 156,500 2,381 6.04% 158,788 1,929 4.82% Long-term debt................................... 2,027 55 10.84% 2,302 62 10.62% Capitalized leases............................... 9,827 237 9.56% 10,096 243 9.55% --------- ------- ---------- ------- Total interest-bearing funds................... 2,667,439 32,482 4.83% 2,569,353 25,065 3.87% Demand deposits.................................. 493,542 - - 502,683 - - Other noninterest-bearing funds.................. 53,578 - - 44,746 - - Stockholders' equity............................. 369,076 - - 340,229 - - --------- ------- ---------- ------- Total liabilities and equity.................$3,583,635 32,482 - $3,457,011 25,065 - Net interest margin on a tax ========== ------- ========== ------- equivalent basis........................... $36,040 4.37% $35,863 4.53% ======= ===== ======= ===== NINE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30, 1995 SEPTEMBER 30, 1994 INTEREST AVERAGE INTEREST AVERAGE AVERAGE INCOME/ YIELDS/ AVERAGE INCOME/ YIELDS/ BALANCES EXPENSE RATES BALANCES EXPENSE RATES ASSETS Securities....................................... $984,086 54,974 7.47% $1,038,817 56,344 7.25% Federal funds sold and securities purchased under resale agreements.............. 113,724 5,094 5.99% 93,647 2,882 4.11% Loans and leases, gross.......................... 2,172,554 143,519 8.83% 1,983,521 119,421 8.05% ---------- ------- ---------- ------- Total earning assets........................... 3,270,364 203,587 8.32% 3,115,985 178,647 7.67% Other nonearning assets.......................... 308,477 - - 310,220 - - ---------- ------- ---------- ------- Total assets.................................$3,578,841 203,587 - $3,426,205 178,647 - ========== ------- ========== ------- LIABILITIES & STOCKHOLDERS' EQUITY Interest-bearing deposits Savings and interest checking.................. $868,061 16,326 2.51% $910,682 14,354 2.11% Time deposits.................................. 1,434,787 62,022 5.78% 1,293,140 45,063 4.66% ---------- ------- ---------- ------- Total interest-bearing deposits.............. 2,302,848 78,348 4.55% 2,203,822 59,417 3.60% Short-term borrowings............................ 204,276 8,177 5.35% 210,749 5,524 3.50% Federal Home Loan Bank borrowings................ 153,719 7,102 6.18% 112,435 3,763 4.47% Long-term debt................................... 2,098 171 10.90% 2,369 189 10.67% Capitalized leases............................... 9,896 711 9.60% 10,159 729 9.59% ---------- ------- ---------- ------- Total interest-bearing funds................... 2,672,837 94,509 4.73% 2,539,534 69,622 3.67% Demand deposits.................................. 496,440 - - 504,011 - - Other noninterest-bearing funds.................. 51,553 - - 45,515 - - Stockholders' equity............................. 358,011 - - 337,145 - - ---------- ------- ---------- ------- Total liabilities and equity.................$3,578,841 94,509 - $3,426,205 69,622 - Net interest margin on a tax ========= ------- ========== ------- equivalent basis........................... $109,078 4.46% $109,025 4.68% ======= ===== ======= =====
Note: Income and rates are stated on a tax-equivalent basis assuming a marginal tax rate of 35%. 6 FIRSTIER FINANCIAL, INC. Under-performing assets as a percent of total loans, leases,other real estate owned and repossessed assets was .55% at September 30, 1995 compared to .71% at September 30, 1994. Non-accrual loans as of September 30, 1995 totalled $9,053,000, down 18.4% from the third quarter of 1994. Total under-performing assets at September 30, 1995 total $12,117,000, which represents a $1,300,000 or 12.0% increase from June 30, 1995 and a $2,400,000 or 16.5% decrease from September 30, 1994. Additional information regarding the balance of non-accrual loans at September 30, 1995, and related interest payment information is provided on page 8. Total non-interest income for the third quarter of 1995 was $14,603,000 which is up $129,000, or .9% from the same period in 1994. The increase in non-interest income from the previous year is mainly attributable to Service Charges on Deposits Accounts which increased $550,000 or 14.4%. Total non-interest expense of $26,827,000 for the quarter is down $1,673,000, or 5.9%, from the same period in 1994. This decrease is primarily due to a pretax credit of $1,500,000 received from the FDIC which represents a refund on a portion of fees paid by FirsTier Banks in the second and third quarters of 1995. As of September 30, 1995, FirsTier employed a staff of 1,711 FTE which is up 171 FTE, or 11.1%, from the September 30, 1994 employment level. This increase is primarily due to the acquisition of Cornerstone Bank Group in Iowa on January 3, 1995. MATERIAL CHANGES IN FINANCIAL CONDITION All companies included in the consolidated financial statements are "financial" companies. Accordingly, average balances of assets and liabilities are more representative of financial condition than balances as of period-end. The schedule of Average Balances/Yields and Rates on page 6 shows average balances of earning assets and interest bearing liabilities for the periods being reported. Because these average balances are an integral part of the financial statements, all comments as to significant volume changes refer to average balances unless otherwise indicated. Total assets of $3.58 billion for the third quarter of 1995 were up 3.7% from the same period in 1994. Loans have increased $150.5 million, or 7.4%. Average securities of $995.7 million, which included securities available for sale as of September 30, 1995 of $261.4 million, decreased $13.1 million, or 1.3% from 1994. 7 FIRSTIER FINANCIAL, INC. NONACCRUAL LOAN SUMMARY SEPTEMBER 30, 1995 Generally, the accrual of income is discontinued when the full collection of principal or interest is in doubt, or when the payment of principal or interest has become contractually 90 days past due unless the obligation is both well secured and in the process of collection. Nonaccrual loans and the application of cash interest payments on those loans as of September 30, 1995 are as follows ($ in thousands):
Cash interest payments applied as Contractual ---------------------------------- Book balance balance Recovery of Reduction at Sept. at Sept. 30 Interest partial of 1995 1995 income charge-offs principal ------------ ------------ -------- ----------- --------- Contractually past due with: o substantial performance 215 237 1 0 5 o limited performance 1,285 2,019 12 0 30 o no performance 718 819 0 0 4 Contractually current, however,: o payment in full of principal or interest in doubt 6,006 11,640 115 0 393 o other 829 1,122 4 0 9 ------ ------- ---- -- ---- Total $9,053 $15,837 $132 $0 $441 ------ ------- ---- -- ---- ------ ------- ---- -- ----
8 FIRSTIER FINANCIAL, INC. Total deposits for the third quarter averaged $2.82 billion which was up $128.0 million, or 4.8%, from the same period in 1994. Time deposits have increased $140.8 million or 10.8% from the third quarter of 1994 while demand deposits and savings and interest checking have decreased $3.6 million and $9.1 million, respectively, or .4% and 1.8%, respectively. Net funds purchased of $68.7 million (the difference between "short-term borrowings" and "federal funds sold and securities purchased under resale agreements") decreased $30.0 million from the average net purchased position in the third quarter of 1994. Long-term debt as of September 30, 1995 of $11.9 million, consisting of a mortgage loan by the Lincoln Bank and capitalized leases of the Omaha Bank, decreased $544,000 from September 30, 1994. The Parent Company had no borrowings as of September 30, 1995. LIQUIDITY AND CAPITAL RESOURCES The maintenance of an adequate level of liquidity is necessary to ensure that sufficient funds are available to meet customers' loan demand and deposit withdrawals. Sources of liquidity consist of maturities of securities recorded at amortized cost, liquidation of securities held for sale, maturing loans, federal funds sold and borrowings from the Federal Home Loan Bank. Management also considers customer-related core deposits and funds borrowed to be stable and reliable sources of funding. Liquidity is also important for the Parent Company. The Parent Company's primary source of liquidity is dividends and management fees from subsidiary banks. The Parent Company's primary liquidity requirements are the payment of dividends and expenses associated with management and consolidated services provided to subsidiaries. Management believes the Parent Company has adequate liquidity to meet its funding needs. At September 30, 1995 stockholders' equity was $376.0 million compared to $342.6 million at September 30, 1994, an increase of $33.4 million or 9.7%. The Tier 1 Leverage ratios (tangible equity capital divided by adjusted average assets) as of September 30, 1995 and September 30, 1994 were 10.06% and 9.71%, respectively. FirsTier's risk based capital ratios as of September 30, 1995 were 15.01% for Tier I Capital and 16.28% for Total Capital. 9 FIRSTIER FINANCIAL, INC. PART II. OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits - (10) Material Contracts (e)(iv) Amendment dated August 4, 1995 to Executive Employment Agreement with David A. Rismiller (20) Quarterly Report to Stockholders for the period ended September 30, 1995 - Part I Exhibit. (b) Reports on Form 8-K On August 6, 1995, FirsTier filed a report on Form 8-K which disclosed details of an Agreement of Merger and Consolidation of FirsTier Financial, Inc. with and into First Bank System, Inc. SIGNATURES Pursuant to the requirement of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunder duly authorized. FIRSTIER FINANCIAL, INC. Date: November 10, 1995 By:/s/ Aaron C. Hilkemann ------------------------------ Aaron C. Hilkemann Vice President and Director of Financial Operations Date: November 10, 1995 By:/s/ Thomas B. Fischer ------------------------------ Thomas B. Fischer Vice President, Secretary and General Counsel 10 EX-10.(E)(IV) 2 EXHIBIT 10(E)(IV) EMPLOYMENT AGREEMENT THIS AGREEMENT, made by and between FirsTier Financial, Inc., a Nebraska corporation (the "Corporation"), and David A. Rismiller (the "Executive") dated the fourth day of August, 1995. WHEREAS, the Corporation has entered into an Agreement of Merger and Consolidation (the "Merger Agreement") with First Bank System Inc. of even date herewith; WHEREAS, the Executive has served as Chairman, President and Chief Executive Officer of the Corporation, and has gained significant and valuable knowledge and experience with respect to the Corporation in such capacities; and WHEREAS, the Executive and the Corporation have entered into an Employment Agreement dated as of the 20th day of March, 1995 (the "Prior Agreement"); and WHEREAS, the Corporation wishes to provide for the continued involvement of the Executive in the business of the Corporation following the consummation of the Merger (as such term is defined in the Merger Agreement) and the Executive desires to perform such services; NOW, THEREFORE, in consideration of the foregoing, and of the mutual provisions herein contained, the Executive and the Corporation agree with each other as follows: 1. EMPLOYMENT PERIOD. The Corporation hereby retains the Executive for the period commencing on the Effective Date (as such term is defined in the Merger Agreement) and ending on December 31, 1996 (the "Employment Period"), during which time the Executive shall serve as Chairman and Chief Executive Officer of First Bank Nebraska and shall be available to aid the Corporation in the transition period following the acquisition of the Corporation with respect to (a) general corporate and personnel organizational matters; (b) the retention of employees and employee relations; (c) the retention of customers; and (d) cost reduction and organizational efficiencies. During the Employment Period, the Executive shall be an employee of the Corporation for all purposes, including for purposes of the FirsTier Financial, Inc. Omnibus Executive Benefit Plan (the "Omnibus Plan") as well as the Corporation's Restricted Stock Bonus Plan, Discounted Nonqualified Stock Option Plan and Phantom Stock Unit Plan (collectively, the "Stock Plans"). Except as specifically provided herein, this Agreement shall not affect the Executive's rights under the Prior Agreement. 2. SALARY AND BENEFITS. In consideration of the services and duties agreed to be rendered and performed by the Executive hereunder, the Corporation hereby covenants and agrees to pay the Executive a monthly salary at the rate of one-twelfth of three hundred fifty thousand dollars ($350,000). During the Employment Period, the Executive shall be entitled: to receive health and welfare and similar benefits substantially the same as those provided by the Corporation to the Executive's peer executives; to continued coverage under UNUM policy number LAD318392 providing for disability income (the "Disability Income Policy") as in effect immediately prior to the Effective Date; and to continuation of the fringe benefits provided by the Corporation to the Executive immediately prior to the Effective Date (including, without limitation, providing and paying for: all fees and charges associated with the Executive's membership at the Omaha Country Club; an automobile (the "Automobile") comparable to the automobile currently available for the Executive's use; and home security system) (the "Fringe Benefits"). 3. BONUS POOL. On the business day immediately preceding the date set for the closing of the Merger Agreement, the Executive shall be entitled to receive a cash Bonus as set forth in the FirsTier Financial, Inc. Change of Control Bonus Pool Plan (the "Bonus Pool Plan"). The Corporation hereby covenants and agrees that the Bonus awarded to the Executive pursuant to the terms of the Bonus Pool Plan shall in no event be in an amount comprising less than fifty per cent (50%) of the total available Bonus Pool. 4. CHANGE IN CONTROL PAYMENT. Upon consummation of the Merger the Corporation shall immediately pay to the Executive the termination benefit provided by the Prior Agreement as if the Executive had been terminated by the Corporation as a result of a Change in Control pursuant to Section 5 thereof whether or not the Executive is then employed by the Corporation and regardless of the reason for any such cessation of employment. 5. TERMINATION. (a) During the Employment Period the Corporation may not terminate the Executive's employment other than for "Cause." For purposes of this Agreement, Cause means either: i. Conviction of a felony involving moral turpitude; or ii. Conduct willfully injurious to the Corporation. (b) At the end of the Employment Period or if, during the Employment Period, the Corporation shall terminate the Executive's employment other than for Cause or the Executive shall terminate employment for any reason: i. The Executive shall be entitled to receive retirement benefits under Article V of the Omnibus Plan payable as if the Executive were sixty-two (62) years of age on the date of such cessation of employment, and for purposes of calculating such retirement benefits the Executive shall be deemed to have continued his employment with the Corporation through the attainment of sixty- two (62) years of age at a base annual salary equal to the greater of three hundred fifty thousand dollars ($350,000) and the Executive's base annual salary immediately prior to such cessation of employment; the retirement benefits payable to the Executive shall be calculated in accordance with the assumptions underlying Exhibit A; ii. The Executive shall be entitled to receive retiree life and medical benefits no less favorable than those provided by the Corporation immediately prior to the date of the signing of the Merger Agreement, and for purposes of calculating the retiree benefits to which the Executive shall be entitled the Executive shall be deemed to have continued his employment with the Corporation through the attainment of sixty-two (62) years of age at a base annual salary equal to the greater of three hundred fifty thousand dollars ($350,000) and the Executive's base annual salary immediately prior to such cessation of employment; iii. The Executive shall be entitled to the continuation of the Fringe Benefits until the earlier of his death or the attainment of sixty-two (62) years of age; iv. All stock options, Bonus Shares, Phantom Stock Units and any other rights and benefits granted to the Executive pursuant to the Stock Plans shall immediately become fully vested and/or exercisable as set forth in Section 7 of the Prior Agreement; v. Effective as of the first premium date following such cessation of employment, the Executive shall be entitled to assume and to continue his coverage under the Disability Income Policy as in effect immediately prior to such cessation of employment to the extent permissible under the terms of such policy; such assumption and continuation of the Disability Income Policy shall be at the Executive's own expense, provided, however, that the Corporation shall be liable for and shall pay all premiums and other costs payable with respect to such Disability Income Policy through the first premium date following such cessation of employment; vi. In accordance with the provisions of Section 6.2(d) of the Omnibus Plan, the Executive shall be deemed to have reached his Normal Retirement Date prior to such cessation of employment for purposes of determining the Survivor Benefit to which the Executive and his beneficiary are entitled pursuant to Article VI of the Omnibus Plan; and vii. The Executive shall be entitled to purchase the Automobile from the Corporation at a price not to exceed the Automobile's book value for financial reporting purposes as of the date of such cessation of employment. (c) In addition to the foregoing, in the event that, during the employment period, the Corporation shall terminate the Executive's employment (other than for Cause) without the Executive's written consent, the Executive shall be entitled to receive a termination payment equal to the balance of his annual salary (no less than three hundred fifty thousand dollars ($350,000)) that would be payable if his employment had continued through the end of the calendar year during which such cessation of employment occurs. 6. FULL SETTLEMENT. The Corporation's obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Corporation may have against the Executive or others. In no event shall the Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Executive under any of the provisions of this Agreement and such amounts shall not be reduced whether or not the Executive obtains other employment. The Corporation agrees to pay as incurred, to the full extent permitted by law, all legal fees and expenses which the Executive may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Corporation, the Executive or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Executive about the amount of any payment pursuant to this Agreement), plus in each case interest on any delayed payment at the applicable Federal rate provided for in Section 7872(f)(2)(A) of the Internal Revenue Code of 1986, as amended (the "Code"). 7. CERTAIN ADDITIONAL PAYMENTS. In the event it shall be determined that any payment (within the meaning of Section 280G of the Code) or distribution to or for the benefit of the Executive (determined without regard to any additional payments required under this Section 6) (a "Payment") would be subject to the excise tax imposed by Section 4999 of the Code or any interest or penalties are incurred by the Executive with respect to such excise tax (such excise tax, together with any such interest and penalties, are hereinafter collectively referred to as the "Excise Tax"), then the Executive shall be entitled to receive from the Corporation an additional payment (a "Gross-Up Payment") in an amount such that after payment by the Executive of all taxes (including any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments. All determinations under this Section 6 shall be made by a nationally recognized accounting firm selected by the Executive. 8. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall limit or otherwise affect such rights as the Executive may have under any other agreements with, or plans or programs of, the Corporation or any of its affiliated companies, including, without limitation, the Prior Agreement, the Omnibus Plan or the Stock Plans. Amounts which are vested benefits or which the Executive is otherwise entitled to receive under any plan or program of the Corporation or any of their affiliated companies at or subsequent to the Effective Date including, but not limited to, the Executive's entitlement to severance under the Prior Agreement shall be payable in accordance with such plan or program, except as otherwise expressly provided herein. 9. SUCCESSORS. (a) This Agreement is personal to the Executive and without the prior written consent of the Corporation shall not be assignable by the Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive's legal representatives. (b) This Agreement shall inure to the benefit of and be binding upon the Corporation and its successors. (c) The Corporation will require any successor (whether direct orindirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Corporation to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Corporation would be required to perform it if no such succession had taken place. As used in this Agreement, "Corporation" shall mean the Corporation as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise. 10. MISCELLANEOUS. (a) This Agreement shall be governed by and construed in accordance with the laws of the State of Nebraska, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force or effect. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives. (b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows: IF TO THE EXECUTIVE: David A. Rismiller 1223 South 113th Court Omaha, Nebraska 68144 IF TO THE CORPORATION: FirsTier Financial, Inc. 1700 Farnam Street Omaha, Nebraska 68102-2183 Attention: General Counsel Fax: (402) 348-6221 with a copy to: First Bank System, Inc. First Bank Place 601 Second Avenue South Minneapolis, Minnesota 55402-4302 Attention: Richard A Zona, Vice Chairman and Chief Financial Officer Fax: (612) 973-0410 or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee. (c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement. (d) The Corporation may withhold from any amounts payable under this Agreement such amounts as shall be required to be withheld pursuant to any applicable law or regulation. (e) The Executive's failure to insist upon strict compliance with any provision hereof shall not be deemed to be a waiver of such provision or any other provision thereof. IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant to the authorization from its Board of Directors, the Corporation has caused these presents to be executed in its name on its behalf, all as of the day and year first above written. /s/ -------------------------------------- David A. Rismiller FIRSTIER FINANCIAL, INC. By /s/ ------------------------------------ Walter Scott, Jr., Chairman of the Executive Committee of the Board of Directors Acknowledged and Agreed to: FIRST BANK SYSTEM INC. By /s/ -------------------------------- Richard A. Zona, Vice Chairman and Chief Financial Officer EX-20 3 EXHIBIT 20 TO OUR STOCKHOLDERS, CUSTOMERS AND FRIENDS FirsTier Financial, Inc., reported record net income of $15,009,000 for the third quarter of 1995, an increase of 8.20 percent over net income of $13,872,000 in the same period of 1994. [Logo] For the first nine months, earnings were $42,645,000, a 2.90 percent increase over the $41,444,000 earned in the same period of 1994. On a per share basis, earnings were $.80 for the third quarter and $2.28 for the first nine months, compared to $.73 and $2.18 for the same periods last year, an increase of 9.59 percent and 4.59 percent, respectively. [Logo] The acquisition of the Cornerstone Bank Group on January 3, 1995, has been accounted for as a pooling of interests. As a result, all financial results for 1994 and prior periods have been restated. [Logo] Net interest income was $33.1 million for the third quarter, compared to $33.3 million for the same period last year. Net interest margin was 4.37 percent, compared to 4.53 percent for the third quarter of 1994. [Logo] Non-interest income increased $129,000, or .89 percent from the third quarter of 1994. Non-interest expense in the third quarter decreased $1,673,000, or 5.87 percent, compared to the same period in 1994. Non-interest expense in the third quarter of 1995 reflects a one-time pretax credit of approximately $1.5 million from the Federal Deposit Insurance Agency, representing a refund on a portion of fees paid by FirsTier Bank to the FDIC in the second and third quarters of 1995. [Logo] Under-performing assets on September 30, 1995 totaled $12.1 million, or .55 percent of total loans and other real estate, compared to $14.5 million, or .71 percent of total loans and other real estate on September 30, 1994. Under-performing assets consist of non-accrual loans and leases, loans 90 days past due and still accruing interest, restructured loans, other real estate owned and repossessed assets. [Logo] On August 7, 1995, FirsTier Financial, Inc., and first Bank System, Inc., announced plans for First Bank System to acquire FirsTier Financial. First Bank System will exchange .8829 shares of First Bank System common stock for each share of FirsTier Financial, Inc., common stock. [Logo] First Bank System is the leading bank in Minnesota and a major player in a region stretching from Illinois to Wyoming. Our customers will benefit from their major investment in technology and innovative services including a broad array of mutual funds. This purchase gives our stockholders an attractive price, at approximately 1.9 times book value as of June 30, and it gives stockholders ownership in a company with an excellent track record in growing shareholder value. [Logo] An application for the merger has been filed with the Federal Reserve Board, and a proxy statement/ prospectus has been filed with the Securities and Exchange Commission. Pending regulatory approval, we expect to mail proxies to FirsTier stockholders in December announcing a special stockholders' meeting in January, 1996. Subject to regulatory and stockholders' approvals, the acquisition is expected to be completed early in the first quarter of 1996. Sincerely, /s/ David A. Rismiller - ---------------------------------------------------- David A. Rismiller CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER [LOGO] FIRSTIER FINANCIAL, INC. 2 - -------------------------------------------------------------------------------- BOARD OF DIRECTORS JAMES P. ABEL PRESIDENT NEBCO, Inc. DUANE W. ACKLIE** CHAIRMAN Crete Carrier Corporation LAWRENCE J. ARTH CHAIRMAN AND CHIEF EXECUTIVE OFFICER Ameritas Life Insurance Corporation RICHARD K. DAVIDSON CHAIRMAN AND CHIEF EXECUTIVE OFFICER Union Pacific Railroad Company J. ROBERT DUNCAN CHAIRMAN Duncan Aviation, Inc. STEVEN H. DURHAM CHAIRMAN Global Resources, Ltd. L.L.C. CHARLES F. HEIDER** GENERAL PARTNER Heider-Weitz Partnership JACK R. MCDONNELL** EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING OFFICER FirsTier Financial, Inc. DAVID A. RISMILLER** CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER FirsTier Financial, Inc. WALTER SCOTT, JR.* PRESIDENT AND CHAIRMAN OF THE BOARD Peter Kiewit Sons', Inc. THOMAS J. SKUTT CHAIRMAN OF THE BOARDS AND CHIEF EXECUTIVE OFFICER Mutual of Omaha Insurance Companies DR. L. DENNIS SMITH PRESIDENT University of Nebraska * Chairman of the Executive Committee, Board of Directors ** Member of the Executive Committee, Board of Directors PRINCIPAL CORPORATE OFFICERS DAVID A. RISMILLER** CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER JACK R. MCDONNELL** EXECUTIVE VICE PRESIDENT AND CHIEF OPERATING OFFICER DWAIN C. CARLSON VICE PRESIDENT AND DIRECTOR OF CORPORATE ASSET LIABILITY MANAGEMENT THOMAS B. FISCHER VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL DAVID F. GRIEBEL VICE PRESIDENT AND DIRECTOR OF MARKETING AARON C. HILKEMANN VICE PRESIDENT AND DIRECTOR OF FINANCIAL OPERATIONS MARK J. MATTHES VICE PRESIDENT AND DIRECTOR OF OPERATIONS JOHN F. MOCK VICE PRESIDENT AND DIRECTOR OF HUMAN RESOURCES [LOGO] FINANCIAL HIGHLIGHTS 3 - --------------------------------------------------------------------------------
FOR THE THREE MONTHS ENDED FOR THE NINE MONTHS ENDED SEPTEMBER 30 SEPTEMBER 30 PERCENTAGE PERCENTAGE 1995 1994 CHANGE 1995 1994 CHANGE --------- --------- ---------- ---------- ---------- ---------- INCOME AND DIVIDENDS ($ IN THOUSANDS) Net Income................ $ 15,009 13,872 8.2% $ 42,645 41,444 2.9% Cash Dividends Declared... 5,556 4,429 25.4 15,886 13,382 18.7 PER SHARE Net Income................ .80 .73 9.6 2.28 2.18 4.6 Cash Dividends Declared... .30 .26 15.4 .86 .78 10.3 FINANCIAL INFORMATION ($ IN THOUSANDS) Average Assets............ 3,583,635 3,457,011 3.7 3,578,841 3,426,205 4.5 Average Loans and Leases................... 2,175,473 2,024,936 7.4 2,172,554 1,983,521 9.5 Average Deposits.......... 2,820,177 2,692,149 4.8 2,799,288 2,707,833 3.4 Average Stockholders' Equity................... 369,076 340,229 8.5 358,011 337,145 6.2 Book Value Per Share (At September 30)........ 20.30 18.43 10.1 Market Value Per Share (At September 30)........ 41.13 33.00 24.6 RATIOS Return on Average Assets................... 1.66% 1.60 3.8 1.59 1.62 (1.9) Return on Average Equity................... 16.13 16.18 (0.3) 15.93 16.44 (3.1) Average Equity to Assets................... 10.30 9.84 4.7 10.00 9.84 1.6 Tier 1 Leverage........... 10.06 9.71 3.6 Net Interest Margin....... 4.37 4.53 (3.5) 4.46 4.68 (4.7) OTHER INFORMATION Number of Shares.......... 18,521,382 18,591,020 (0.4) Number of Stockholders.... 2,045 2,063 (0.9)
[LOGO] CONSOLIDATED STATEMENTS OF INCOME (Unaudited) ($ in thousands, except per share amounts) 4 - --------------------------------------------------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30 SEPTEMBER 30 1995 1994 1995 1994 --------- --------- --------- --------- INTEREST INCOME Interest and fees on loans and leases Taxable............................................................ $ 47,723 40,528 141,486 116,304 Nontaxable......................................................... 455 479 1,366 2,115 Interest on securities Taxable............................................................ 9,679 10,913 29,047 34,413 Nontaxable......................................................... 6,172 5,173 18,010 15,240 Interest on federal funds sold and resale agreements................. 1,549 1,317 5,093 2,882 --------- --------- --------- --------- Total interest income.............................................. 65,578 58,410 195,002 170,954 --------- --------- --------- --------- INTEREST EXPENSE Interest on deposits Savings and interest checking...................................... 5,895 4,817 16,326 14,354 Time............................................................... 21,642 15,846 62,023 45,063 Interest on short-term and FHLB borrowings........................... 4,653 4,097 15,279 9,287 Interest on long-term debt........................................... 292 305 881 918 --------- --------- --------- --------- Total interest expense............................................. 32,482 25,065 94,509 69,622 --------- --------- --------- --------- NET INTEREST INCOME................................................ 33,096 33,345 100,493 101,332 Provision for loan and lease losses.................................... 269 370 807 (1,220) --------- --------- --------- --------- NET INTEREST INCOME AFTER PROVISION FOR LOAN AND LEASE LOSSES...... 32,827 32,975 99,686 102,552 --------- --------- --------- --------- NON-INTEREST INCOME Trust services....................................................... 4,188 4,126 12,557 12,145 Service charges on deposit accounts.................................. 4,363 3,813 12,758 11,647 Credit card fees..................................................... 2,658 2,562 7,309 6,842 Securities gains, net................................................ (9) -- 1 212 Other................................................................ 3,403 3,973 9,824 10,868 --------- --------- --------- --------- Total non-interest income.......................................... 14,603 14,474 42,449 41,714 --------- --------- --------- --------- NON-INTEREST EXPENSE Salaries and benefits................................................ 14,183 13,524 42,200 41,184 Premises and equipment............................................... 3,566 3,824 10,742 11,368 Data processing fees................................................. 1,280 1,383 3,867 4,090 Credit card processing expense....................................... 1,527 1,340 4,265 4,069 Amortization of goodwill............................................. 464 382 1,323 1,188 Other................................................................ 5,807 8,047 21,575 25,771 --------- --------- --------- --------- Total non-interest expense......................................... 26,827 28,500 83,972 87,670 --------- --------- --------- --------- Income before income tax expense................................... 20,603 18,949 58,163 56,596 Income tax expense................................................. 5,594 5,077 15,518 15,152 --------- --------- --------- --------- NET INCOME............................................................. $ 15,009 13,872 42,645 41,444 --------- --------- --------- --------- --------- --------- --------- --------- NET INCOME PER SHARE................................................... $ .80 .73 2.28 2.18 --------- --------- --------- --------- --------- --------- --------- ---------
See accompanying notes to consolidated financial statements [LOGO] CONSOLIDATED BALANCE SHEETS September 30, (Unaudited) ($ in thousands) 5 - --------------------------------------------------------------------------------
1995 1994 ------------ ---------- ASSETS Cash and due from banks......................................................................... $ 208,242 235,413 Federal funds sold and securities purchased under resale agreements............................. 97,050 151,435 Securities available for sale (amortized cost $255,241 in 1995 and $285,919 in 1994)............ 261,411 282,397 Investment securities (market value $755,303 in 1995 and $695,291 in 1994)...................... 740,843 707,527 Loans and leases, net........................................................................... 2,139,076 2,002,883 Premises and equipment.......................................................................... 50,435 49,828 Accrued interest receivable..................................................................... 35,082 31,943 Other assets.................................................................................... 53,283 56,014 ------------ ---------- TOTAL ASSETS.................................................................................. $ 3,585,422 3,517,440 ------------ ---------- ------------ ---------- LIABILITIES Deposits Demand, non-interest-bearing.................................................................. $ 470,703 455,615 Savings and interest checking................................................................. 867,832 855,757 Time.......................................................................................... 1,437,124 1,313,103 ------------ ---------- TOTAL DEPOSITS................................................................................ 2,775,659 2,624,475 Short-term borrowings........................................................................... 205,543 339,630 Federal Home Loan Bank borrowings............................................................... 156,500 148,715 Other liabilities............................................................................... 59,934 49,685 Long-term debt.................................................................................. 11,773 12,324 ------------ ---------- TOTAL LIABILITIES............................................................................. 3,209,409 3,174,829 ------------ ---------- STOCKHOLDERS' EQUITY Preferred stock -- $30 par value; authorized 2,000,000 shares................................... -- -- Common stock -- $5 par value; authorized 40,000,000 shares; issued and outstanding 18,822,202 shares in 1995 and 18,927,195 shares in 1994................................................... 94,111 94,073 Surplus......................................................................................... 5,432 10,345 Retained earnings............................................................................... 282,621 251,202 Net unrealized securities gains (losses)........................................................ 3,824 (2,285) ------------ ---------- 385,988 353,335 Less treasury stock, at cost 300,820 shares in 1995 and 336,175 shares in 1994.................. 9,975 10,724 ------------ ---------- TOTAL STOCKHOLDERS' EQUITY.................................................................... 376,013 342,611 ------------ ---------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.................................................. $ 3,585,422 3,517,440 ------------ ---------- ------------ ----------
See accompanying notes to consolidated financial statements [LOGO] OTHER FINANCIAL INFORMATION 6 - -------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF RETAINED EARNINGS Nine Months Ended September 30 (Unaudited) ($ IN THOUSANDS)
1995 1994 ---------- ---------- BALANCE AT JANUARY 1.............. $ 255,862 252,092 Net Income........................ 42,645 41,444 Cash dividends declared........... 15,886 13,382 ($.86 and $.78 per share in 1995 and 1994, respectively)........ Less transfer to Surplus.......... -- 28,952 ---------- ---------- BALANCE AT SEPTEMBER 30........... $ 282,621 251,202 ---------- ---------- ---------- ----------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) On August 7, 1995, FirsTier and First Bank System announced First Bank System's intention to acquire FirsTier. Under terms of the agreement, FirsTier shareholders will receive .8829 shares of First Bank System stock for each FirsTier share held. Pending regulatory and shareholder approval, the transaction is expected to be consummated in the first quarter of 1996. (2) On January 3, 1995, FirsTier acquired Cornerstone Bank Group, Inc. in a transaction accounted for as a pooling of interests. In connection with this acquisition, FirsTier issued 1,555,075 shares in exchange for 100% of the outstanding shares of Cornerstone Bank Group, Inc. All prior period financial information has been restated to reflect this acquisition. (3) On April 1, 1995, FirsTier acquired all of the outstanding shares of First Continental Financial, Inc., the holding company of River City National Bank, which had assets of approximately $41 million. River City National Bank operated in three locations in west Omaha, Nebraska, and are now branches of FirsTier Bank, N.A., Omaha. This acquisition has been accounted for as a purchase transaction. (4) Certain accounts in the financial statements of the prior year have been reclassified to conform with current year presentation. Such reclassifications had no effect on net income. ALLOWANCE FOR LOAN AND LEASE LOSSES ($ IN THOUSANDS)
1995 1994 ------- ------ BALANCE AT JANUARY 1.................... $53,250 54,345 Addition due to acquisition............. 290 -- Provision for credit losses............. 807 (1,220) Losses charged off...................... 4,608 3,669 Recoveries on amounts charged off....... 2,325 3,816 ------- ------ BALANCE AT SEPTEMBER 30................. $52,064 53,272 ------- ------ ------- ------ Allowance as a percentage of loans and leases................................. 2.38% 2.59 Net charge-offs as a percentage of average loans and leases............... .11% (.01)
UNDER-PERFORMING ASSETS ($ IN THOUSANDS)
SEPTEMBER 30 1995 1994 ------- ------ Non-accrual loans and leases............ $ 9,053 11,091 Loans ninety days past due and accruing............................... 1,580 1,397 Restructured loans...................... 18 543 Other real estate owned................. 1,312 1,377 Repossessed assets...................... 154 109 ------- ------ TOTAL UNDER-PERFORMING ASSETS........... $12,117 14,517 ------- ------ ------- ------ Under-performing assets as a percentage of loans, leases, other real estate owned and repossessed assets................................. .55% .71 ------- ------ ------- ------
[LOGO] ANALYSIS OF NET INTEREST INCOME (TAX EQUIVALENT BASIS) ($ IN THOUSANDS) 7 - --------------------------------------------------------------------------------
THREE MONTHS ENDED NINE MONTHS ENDED SEPTEMBER 30 SEPTEMBER 30 1995 1994 1995 1994 ------------ ---------- ------------ ---------- Net interest income................................................. $ 36,040 35,863 109,078 109,025 Average earning assets.............................................. 3,274,896 3,143,766 3,270,364 3,115,985 Average interest-bearing liabilities................................ 2,667,439 2,569,353 2,672,837 2,539,534 Yield on earning assets............................................. 8.30% 7.69 8.32 7.67 Cost of interest-bearing liabilities................................ 4.83 3.87 4.73 3.67 Net interest margin................................................. 4.37 4.53 4.46 4.68 Net interest rate spread............................................ 3.47 3.82 3.59 4.00 Interest-bearing liabilities to interest-earning assets............. 81.45 81.73 81.73 81.50
STOCKHOLDERS' INFORMATION STOCK DATA
DIVIDENDS DECLARED YEAR PERIOD HIGH LOW PER SHARE - --------- ---------------- --------- --------- --------------- 1994 First Quarter 33.17 28.00 .26 Second Quarter 31.83 29.33 .26 Third Quarter 35.00 31.00 .26 Fourth Quarter 33.00 30.00 .26 1995 First Quarter 33.50 29.50 .26 Second Quarter 37.50 32.75 .30 Third Quarter 41.13 36.00 .30
The common stock of FirsTier Financial, Inc. (FRST) is traded on the Over-the-Counter Market and is quoted on the NASDAQ National Market System. CORPORATE OFFICE The Corporate Office is located at 1700 Farnam Street, P.O. Box 3443, Omaha, Nebraska 68103-0443. The telephone number is (402) 348-6000. FORM 10Q A copy of the third quarter report to the Securities and Exchange Commission (Form 10Q) may be obtained without charge by written request to the Director of Marketing at the Corporate Office. INDEPENDENT PUBLIC ACCOUNTANTS The independent public accountants of FirsTier Financial, Inc. are Arthur Andersen LLP, Omaha, Nebraska. TRANSFER AGENT Stockholder inquiries may be directed to: State Street Bank and Trust Company Securities Transfer Services Department P.O. Box 8204 Boston, MA 02266 Telephone: (800) 257-1770 8:00 a.m. to 6:00 p.m. (Eastern Time) [LOGO] [LOGO] - ---------------------------------- 1700 FARNAM STREET P.O. BOX 3443 OMAHA, NEBRASKA 68103-0443 [LOGO] - ---------------------------------------------------- T H I R D Q U A R T E R R E P O R T [LOGO] - ------------------------------------------ SEPTEMBER 30, 1995 -----END PRIVACY-ENHANCED MESSAGE-----