-----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, RQIDuaCt4LwxWd7RQM3RbbPxdQB34o7hc9Rghe9wT9rTCXmH0ZZy5xIVoYTxEAas BYdFBQyoMVWmSz/7UbISXw== 0000037076-97-000076.txt : 19971121 0000037076-97-000076.hdr.sgml : 19971121 ACCESSION NUMBER: 0000037076-97-000076 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971114 SROS: NASD SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIRSTAR CORP /WI/ CENTRAL INDEX KEY: 0000037076 STANDARD INDUSTRIAL CLASSIFICATION: 6021 IRS NUMBER: 390711710 STATE OF INCORPORATION: WI FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 002-28711 FILM NUMBER: 97719092 BUSINESS ADDRESS: STREET 1: 777 E WISCONSIN AVE CITY: MILWAUKEE STATE: WI ZIP: 53202 BUSINESS PHONE: 4147655977 MAIL ADDRESS: STREET 1: 777 EAST WISCONSIN AVENUE CITY: MILWAUKEE STATE: WI ZIP: 53202 FORMER COMPANY: FORMER CONFORMED NAME: FIRST WISCONSIN CORP DATE OF NAME CHANGE: 19890124 FORMER COMPANY: FORMER CONFORMED NAME: FIRST WISCONSIN BANKSHARES CORP DATE OF NAME CHANGE: 19750204 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997 COMMISSION FILE NUMBER 1-2981 FIRSTAR CORPORATION (Exact Name of Registrant as Specified in its Charter) WISCONSIN 39-0711710 (State of Incorporation) (I.R.S. EMPLOYER Identification No.) 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202 Telephone Number (414) 765-4321 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 precedeing 12 months and (2) has been subject to such filing requirements for the past 90 days. As of October 31, 1997, 144,775,871 shares of common stock were outstanding. FIRSTAR CORPORATION CONTENTS PAGE PART I. FINANCIAL INFORMATION Item 1. Financial Statements: Consolidated Balance Sheets 1 Consolidated Statements of Income 2 Consolidated Statements of Cash Flows 3 Supplemental Footnotes 4 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7 Additional Financial Data 14 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 16 SIGNATURES 16
FIRSTAR CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS - - ------------------------------------------------------------------------------------------------ September 30 December 31 September 30 (thousands of dollars) 1997 1996 1996 - - ------------------------------------------------------ ------------ ------------ ------------ (unaudited) (unaudited) ASSETS Cash and due from banks $ 1,222,014 $ 1,449,094 $ 1,402,393 Interest-bearing deposits with banks 24,074 6,349 6,206 Federal funds sold and resale agreements 93,489 192,965 199,399 Trading securities 3,277 13,489 6,757 Securities held to maturity (market value $2,452,347, $2,287,448 and $2,282,608 on September 30, 1997, December 31, 1996 and September 30, 1996) 2,396,802 2,250,776 2,262,745 Securities available for sale 1,776,912 1,966,590 2,018,230 Loans: Commercial and industrial 3,647,079 3,366,016 3,373,991 Real estate 2,990,175 2,992,416 3,006,468 Other 1,049,124 953,145 1,003,490 ------------ ------------ ------------ Commercial loans 7,686,378 7,311,577 7,383,949 Credit card 688,219 684,619 627,888 Real estate - mortgage 2,499,793 2,660,290 2,709,693 Home equity 1,213,265 1,121,580 1,080,396 Other 1,446,162 1,417,468 1,413,737 ------------ ------------ ------------ Consumer loans 5,847,439 5,883,957 5,831,714 ------------ ------------ ------------ Total loans 13,533,817 13,195,534 13,215,663 Reserve for loan losses (213,362) (213,138) (214,510) ------------ ------------ ------------ Loans - net 13,320,455 12,982,396 13,001,153 Bank premises and equipment 365,268 368,699 356,263 Customer acceptance liability 11,451 14,281 18,400 Other assets 556,108 522,781 643,058 ------------ ------------ ------------ Total assets $ 19,769,850 $ 19,767,420 $ 19,914,604 ============ ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Demand $ 3,545,857 $ 3,880,610 $ 3,497,517 Interest-bearing demand 1,562,486 1,687,885 1,539,302 Money market accounts 2,766,660 2,744,751 2,670,292 Savings passbook 1,374,390 1,518,033 1,566,107 Certificates of deposit 5,364,626 5,382,918 5,551,666 ------------ ------------ ------------ Total deposits 14,614,019 15,214,197 14,824,884 Short-term borrowed funds 2,509,864 1,868,606 2,549,526 Long-term debt 758,579 697,194 601,720 Bank acceptances outstanding 11,451 14,281 18,400 Other liabilities 236,808 269,095 275,258 ------------ ------------ ------------ Total liabilities 18,130,721 18,063,373 18,269,788 Stockholders' equity: Preferred stock 6,738 11,344 11,424 Common stock 181,102 188,532 188,532 Issued: September 30, 1997, 144,881,896 shares Issued: December 31, 1996, 150,826,196 shares Issued: September 30, 1996, 150,826,196 shares Capital surplus 0 51,145 45,430 Retained earnings 1,436,873 1,437,891 1,393,020 Treasury stock (2,844) (4,056) (2,320) Held: September 30, 1997, 226,745 shares Held: December 31, 1996, 490,396 shares Held: September 30, 1996, 437,436 shares Restricted stock 0 0 (8) Unrealized gains on securities available for sale 17,260 19,191 8,738 ------------ ------------ ------------ Total stockholders' equity 1,639,129 1,704,047 1,644,816 ------------ ------------ ------------ Total liabilities and stockholders' equity $ 19,769,850 $ 19,767,420 $ 19,914,604 ============ ============ ============ -1-
FIRSTAR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME - - ---------------------------------------------------------------------------------------------- Three Months Ended Nine Months Ended September 30 September 30 (thousands of dollars, except per share data) 1997 1996 1997 1996 - - --------------------------------------------- ----------------------- ----------------------- (unaudited) INTEREST REVENUE Loans $ 288,735 $ 283,309 $ 848,925 $ 831,564 Securities 64,109 65,753 191,958 198,708 Interest-bearing deposits with banks 313 108 599 365 Federal funds sold and resale agreements 1,083 1,829 4,773 3,527 Trading securities 16 19 113 260 ---------- ---------- ---------- ---------- Total interest revenue 354,256 351,018 1,046,368 1,034,424 INTEREST EXPENSE Deposits 119,680 118,222 350,985 346,729 Short-term borrowed funds 33,507 32,876 96,465 95,334 Other debt 13,211 10,054 37,425 33,968 ---------- ---------- ---------- ---------- Total interest expense 166,398 161,152 484,875 476,031 ---------- ---------- ---------- ---------- NET INTEREST REVENUE 187,858 189,866 561,493 558,393 Provision for loan losses 11,290 8,908 30,540 28,963 ---------- ---------- ---------- ---------- NET INTEREST REVENUE AFTER LOAN LOSS PROVISION 176,568 180,958 530,953 529,430 OTHER OPERATING REVENUE Trust and investment management fees 44,829 37,414 127,298 110,104 Service charges on deposit accounts 21,963 23,060 65,154 66,477 Credit card service revenue 18,989 18,100 54,251 50,814 Mortgage Banking Revenue 13,445 13,044 32,498 37,108 Data processing fees 5,224 4,687 15,159 13,851 Securities gains 31 22 1,157 64 Other revenue 16,425 17,024 49,216 46,211 ---------- ---------- ---------- ---------- Total other operating revenue 120,906 113,351 344,733 324,629 OTHER OPERATING EXPENSE Salaries 82,942 78,234 245,184 236,908 Employee benefits 15,605 17,338 50,502 56,087 Equipment expense 16,476 15,644 49,233 46,041 Net occupancy expense 16,061 16,782 47,567 47,356 Restructuring expense 0 0 0 50,237 SAIF assessments 0 7,969 0 7,969 Other expense 52,680 51,045 150,002 139,866 ---------- ---------- ---------- ---------- Total other operating expense 183,764 187,012 542,488 584,464 INCOME BEFORE INCOME TAXES 113,710 107,297 333,198 269,595 Applicable income taxes 38,423 38,025 113,408 93,042 ---------- ---------- ---------- ---------- NET INCOME $ 75,287 $ 69,272 $ 219,790 $ 176,553 ========== ========== ========== ========== Net income applicable to common stock $ 75,169 $ 69,072 $ 219,400 $ 175,885 ========== ========== ========== ========== PER COMMON SHARE Net income $ 0.52 $ 0.46 $ 1.51 $ 1.19 Dividends 0.21 0.19 0.61 0.55 -2-
FIRSTAR CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - - ------------------------------------------------------------------------------------------------------- Nine Months Ended September 30 (thousands of dollars) 1997 1996 - - ------------------------------------------------------------------------------------------------------- (unaudited) Cash Flows from Operating Activities: Net Income $ 219,790 $ 176,553 Adjustments: Provision for loan losses 30,540 28,963 Depreciation, amortization, and accretion 45,021 53,118 Net decrease in trading securities 10,212 5,879 Net(increase) decrease in loans held for resale (80,551) 194,694 Gains on sale of assets (1,827) (1,161) Net increase in other assets/liabilities (58,659) (50,777) ------------- -------------- Net cash provided by operating activities 164,526 407,269 Cash Flows from Investing Activities: Net decrease (increase) in federal funds sold and resale agreements 99,476 (67,549) Net increase in interest-bearing deposits with banks (17,725) (739) Sale of securities available for sale 1,157 253,438 Maturities of securities available for sale 437,319 283,934 Maturities of securities held to maturity 267,671 301,791 Purchase of securities available for sale (253,352) (289,284) Purchase of securities held to maturity (418,056) (129,601) Net (increase) decrease in loans (284,116) 153,333 Cash acquired in acquisitions 0 99,456 Proceeds from sale of foreclosed assets 9,500 6,048 Purchase of bank premises and equipment (51,593) (36,783) Proceeds from sale of bank premises and equipment 3,781 2,999 ------------- -------------- Net cash (used in) provided by investing activities (205,938) 577,043 Cash Flows from Financing Activities: Net decrease in deposits (600,178) (611,380) Net increase in short-term borrowed funds 641,258 139,112 Issuance of long-term debt 140,598 0 Repayment of long-term debt (79,213) (161,965) Common/treasury stock repurchases/retires (209,649) (191,920) Common/treasury stock issued 10,936 15,879 Cash dividends (89,420) (82,391) ------------- -------------- Net cash used in financing activities (185,668) (892,665) Net (decrease) increase in cash and due from banks (227,080) 91,647 Cash and due from banks at beginning of period 1,449,094 1,310,746 ------------- -------------- Cash and due from banks at end of period $ 1,222,014 $ 1,402,393 ============= ============== Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 492,012 $ 481,485 Income taxes 88,993 96,547 Transfer to foreclosed assets from loans $ 7,017 $ 6,333 -3-
FIRSTAR CORPORATION AND SUBSIDIARIES SUPPLEMENTAL FOOTNOTES (unaudited) - - ----------------------------------------------------- (thousands of dollars except as otherwise indicated) 1. The financial data presented herein are unaudited, however, in the opinion of management, reflect all adjustments which are necessary for a fair presentation of such information. Results for interim periods should not be considered indicative of results for a full year. Certain amounts have been reclassified in prior periods to conform to classifi- cations used in the September 30, 1997 financial statements. Reference should be made to the financial statements contained in the registrant's annual report on Form 10-K for the year ended December 31, 1996. All shares and per share amounts have been adjusted to reflect the two- for-one common stock split completed in February, 1997. The Financial Accounting Standard Board issued Statement No. 128, "Earnings per Share". The statement will be effective with the preparation of the year-end 1997 financial statements. The statement will require the presentation of basic and diluted earnings per share. Firstar's current calculation of its earnings per share will be equivalent to the basic EPS of SFAS No. 128. The calculation of diluted EPS will not be materially different from the basic EPS. 2. Securities The amortized cost and approximate market values of securities are as follows:
September 30, 1997 -------------------------------------------------- Estimated Amortized Unrealized Unrealized Market Cost Gains Losses Value ----------- ----------- ----------- ----------- Securities held to maturity: U.S. Treasury and federal agencies $ 1,130,766 $ 33,822 $ (1,366)$ 1,163,222 State and political subdivisions 1,259,336 24,382 (1,301) 1,282,417 Corporate debt 6,700 20 (12) 6,708 ----------- ----------- ----------- ----------- Total $ 2,396,802 $ 58,224 $ (2,679)$ 2,452,347 =========== =========== =========== =========== Securities available for sale: U.S. Treasury and federal agencies $ 1,509,852 $ 30,186 $ (2,755)$ 1,537,283 Mortgage backed obligations of federal agencies 98,323 251 (294) 98,280 State and political subdivisions 6,779 27 (11) 6,795 Equity securities 96,340 0 0 96,340 Money market mutual funds 38,214 0 0 38,214 ----------- ----------- ----------- ----------- Total $ 1,749,508 $ 30,464 $ (3,060)$ 1,776,912 =========== =========== =========== ===========
-4- 3. Nonperforming Assets and Past Due Loans
September 30 December 31 September 30 1997 1996 1996 ----------- ----------- ----------- Nonaccrual loans: Commercial $ 34,744 $ 35,757 $ 29,732 Commercial - real estate 21,674 30,128 35,193 Consumer 17,653 19,193 17,271 ----------- ----------- ----------- 74,071 85,078 82,196 Renegotiated loans: Commercial 0 0 0 Commercial - real estate 272 1,028 1,362 ----------- ----------- ----------- 272 1,028 1,362 Foreclosed assets 8,644 8,926 8,887 ----------- ----------- ----------- Total $ 82,987 $ 95,032 $ 92,445 =========== =========== =========== Nonperforming assets as a percent of: Loans and foreclosed assets .61 % .72 % .70 % Total assets .42 .48 .46 Loans past due 90 days and still accruing Commercial $ 46,646 $ 24,368 $ 40,055 Commercial - eeal estate 28,130 27,352 19,438 Consumer 21,073 22,938 23,233 ----------- ----------- ----------- Total $ 95,849 $ 74,658 $ 82,726 =========== =========== ===========
4. Reserve for Loan Losses
Three Months Ended Nine Months Ended September 30 September 30 ------------------------ ------------------------ 1997 1996 1997 1996 ----------- ----------- ----------- ----------- Balance - beginning of period $ 213,763 $ 205,041 $ 213,138 $ 195,283 Provision for loan losses 11,290 8,908 30,540 28,963 Loan recoveries 6,316 6,158 16,243 19,527 Loan charge-offs (18,007) (15,106) (46,559) (43,229) Reserves of acquired banks 0 9,509 0 13,966 ----------- ----------- ----------- ----------- Balance - end of period $ 213,362 $ 214,510 $ 213,362 $ 214,510 =========== =========== =========== =========== Net charge-offs to average loans .35 % .27 % .31 % .25 % Reserve to period-end loans 0.00 0.00 1.58 1.62
-5- 5. Changes in Stockholders' Equity
Preferred Common Capital Retained Stock Stock Surplus Earnings ----------- ----------- ----------- ----------- Balance at December 31, 1995 $ 15,344 $ 188,532 $ 53,236 $ 1,298,857 Net income 0 0 0 176,553 Cash dividends: 0 0 0 0 Preferred stock, series D ($26.25 per share) 0 0 0 (669) Common stock ($.55 per share) 0 0 0 (81,722) Converted 7,840 shares of preferred stock into 336,500 shares of common stock (3,920) 0 (998) 0 Issued 9,774,408 shares of common stock for bank acquisitions 0 0 4,826 0 Issued 1,711,238 shares of common stock for employee benefit plans 0 0 (11,623) 1 Purchased 7,870,200 shares of treasury stock 0 0 0 0 Unrealized gains on securities available for sale 0 0 0 0 Amortization/adjustment of restricted stock 0 0 (11) 0 ----------- ----------- ----------- ----------- Balance at September 30, 1996 $ 11,424 $ 188,532 $ 45,430 $ 1,393,020 =========== =========== =========== ===========
Gain/ Restricted Treasury Loss Stock Stock Total ----------- ----------- ----------- ----------- Balance at December 31, 1995 $ 34,127 $ (442)$ (64,834)$ 1,524,820 Net income 0 0 0 176,553 Cash dividends: 0 0 0 0 Preferred stock, series D ($26.25 per share) 0 0 0 (669) Common stock ($.55 per share) 0 0 0 (81,722) Converted 7,840 shares of preferred stock into 336,500 shares of common stock 0 0 4,916 (2) Issued 9,774,408 shares of common stock for bank acquisitions 0 0 215,002 219,828 Issued 1,711,238 shares of common stock for employee benefit plans 0 0 27,502 15,880 Purchased 7,870,200 shares of treasury stock 0 0 (184,593) (184,593) Unrealized gains on securities available for sale (25,389) 0 0 (25,389) Amortization/adjustment of restricted stock 0 434 (313) 110 ----------- ----------- ----------- ----------- Balance at September 30, 1996 $ 8,738 $ (8)$ (2,320)$ 1,644,816 =========== =========== =========== ===========
Preferred Common Capital Retained Stock Stock Surplus Earnings ----------- ----------- ----------- ----------- Balance at December 31, 1996 $ 11,344 $ 188,532 $ 51,145 $ 1,437,891 Net income 0 0 0 219,790 Cash dividends: 0 0 0 0 Preferred stock, series D ($26.25 per share) 0 0 0 (390) Common stock ($.61 per share) 0 0 0 (89,030) Converted 9,212 shares of preferred stock 0 0 0 0 into 395,352 shares of common stock (4,606) 0 (518) (2,649) Issued 1,040,199 shares of common stock for 0 0 0 0 employee benefit plans 0 0 (5,184) (6,129) Retired 5,944,300 shares of common stock 0 (7,430) (45,443) (122,610) Purchased 1,171,900 shares of treasury stock 0 0 0 0 Unrealized gains on securities available for sale 0 0 0 0 ----------- ----------- ----------- ----------- Balance at September 30, 1997 $ 6,738 $ 181,102 $ 0 $ 1,436,873 =========== =========== =========== ===========
Gain/ Restricted Treasury Loss Stock Stock Total ----------- ----------- ----------- ----------- Balance at December 31, 1996 $ 19,191 $ 0 $ (4,056)$ 1,704,047 Net income 0 0 0 219,790 Cash dividends: 0 0 0 0 Preferred stock, series D ($26.25 per share) 0 0 0 (390) Common stock ($.61 per share) 0 0 0 (89,030) Converted 9,212 shares of preferred stock 0 0 0 0 into 395,352 shares of common stock 0 0 7,772 (1) Issued 1,040,199 shares of common stock for 0 0 0 0 employee benefit plans 0 0 27,606 16,293 Retired 5,944,300 shares of common stock 0 0 0 (175,483) Purchased 1,171,900 shares of treasury stock 0 0 (34,166) (34,166) Unrealized gains on securities available for sale (1,931) 0 0 (1,931) ----------- ----------- ----------- ----------- Balance at September 30, 1997 $ 17,260 $ 0 $ (2,844)$ 1,639,129 =========== =========== =========== ===========
FIRSTAR CORPORATION AND SUBSIDIARIES SUPPLEMENTAL FOOTNOTES (unaudited) - - ----------------------------------------------------- 6. Derivative Financial Instruments The following table summarizes the various types of interest rate contracts that Firstar uses for the purpose of managing interest rate risk.
September 30, 1997 -------------------------------------------------------------- Market 12-31-96 Average Average Weighted Value Notional Notional Receive Pay Average Asset Amount Amount Rate Rate Maturity (Liability) --------- --------- ----------- ----------- ----------- ----------- (millions) Interest rate swaps $ 107 $ 29 5.26 % 5.75 % 1.1 yr $ (0.20) Receive fixed rate 27 ---- ---- ---- ---- Index amortizing 62 13 5.79 7.43 1.6 (0.30) Other Receive variable 591 581 4.89 2.0 0.20 --------- --------- ----------- Interest rate floors* $ 787 $ 623 $ (0.30) ========= ========= =========== *Interest rate floors provide for the receipt of payments when the index interest rate is below the predetermined interest rate. <\TABLE. 7. Subsequent Event On October 8, 1997, Firstar announced the formation of Elan Merchant Services, LLC, a joint venture with NOVA Information Systems, Inc. The new company will provide credit card processing services to merchants. Firstar will contribute its existing payment processing contracts to the company and NOVA will provide the technological support. Firstar, who will be the 49% partner in the company, will record a $23 million gain on the transaction in the fourth quarter of 1997. -6- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Forward Looking Information The following discussion includes forward looking statements concerning Firstar's business results that are based on estimates. Actual results could differ materially due to factors such as changes in economic conditions, compression of net interest revenue due to unanticipated declines in net interest margins and outstanding loan balances, unanticipated delays in cost reduction and revenue enhancements, and the ability to attract and retain qualified personnel. Therefore, there can be no assurance that actual results will correspond to these forward looking statements. Financial Discussion - Income Statement Firstar Corporation's net income for the third quarter of 1997 was $75.3 million, or $.52 per common share, up from the $69.3 million, or $.46 per common share, for the same period last year. This represented a 13.0% increase in earnings per share. Return on common equity was 18.51% for the third quarter of the year, compared with 17.27% for the same period last year, while return on average assets was 1.55% compared to 1.41% during the third quarter of last year. Net income for the first nine months of 1997 was $219.8 million, or $1.51 per common share, up from the $176.6 million, or $1.19 per common share, for the same period last year. This represented a 26.9% increase in earnings per share. Return on common equity was 18.57% for the first nine months of the year, compared with 15.35% for the same period last year, while return on average assets was 1.52% compared to 1.24% during the first nine months of last year. In the first quarter of 1996, Firstar recorded a $50.2 million pre-tax charge in connection with Firstar Forward, the corporate wide restructuring program. This change reduced net income by $.21 per share. The third quarter of 1996 included the Savings Association Insurance Fund (SAIF) charge of three cents per share. This banking industry wide SAIF assessment recapitalized the savings and loan deposit insurance fund and was based upon deposits that Firstar acquired through several savings and loan acquisitions. Excluding the restructuring charge and SAIF charge from last year's results, operating earnings rose by 5.6% over the first nine months of 1996 from $1.43 per share to $1.51. Similarly adjusted, operating earnings for the current quarter rose by 6.1% over the third quarter of 1996 from $.49 per share to $.52. Table 1 shows the components of net income and the net interest margin.
Table 1. Condensed income statements - taxable equivalent basis Three Months Ended Nine Months Ended September 30 September 30 ---------------------------------- ---------------------------------- 1997 1996 Change 1997 1996 Change ---------- ---------- ---------- ---------- ---------- ---------- (millions of dollars) (millions of dollars) Interest revenue $ 354.3 $ 351.1 $ 3.2 $ 1,046.4 $ 1,034.6 $ 11.8 Taxable-equivalent adjustment 9.1 8.4 0.7 26.6 25.4 1.2 ---------- ---------- ---------- ---------- ---------- ---------- Interest revenue - taxable-equivalent 363.4 359.5 3.9 1,073.0 1,060.0 13.0 Interest expense 166.4 161.1 5.3 484.9 476.0 8.9 ---------- ---------- ---------- ---------- ---------- ---------- Net interest revenue - taxable-equivalent 197.0 198.4 (1.4) 588.1 584.0 4.1 Provision for loan losses 11.3 8.9 2.4 30.5 29.0 1.5 Other operating revenue 120.9 113.3 7.6 344.7 324.6 20.1 Other operating expense 183.8 187.0 (3.2) 542.5 584.4 (41.9) ---------- ---------- ---------- ---------- ---------- ---------- Income before income taxes 122.8 115.8 7.0 359.8 295.2 64.6 Provision for income taxes 38.4 38.1 0.3 113.4 93.2 20.2 Taxable-equivalent adjustment 9.1 8.4 0.7 26.6 25.4 1.2 ---------- ---------- ---------- ---------- ---------- ---------- Net income $ 75.3 $ 69.3 $ 6.0 $ 219.8 $ 176.6 $ 43.2 ========== ========== ========== ========== ========== ========== Yield on earning assets 8.20 % 8.13 % 0.07 % 8.15 % 8.15 % 0.00 % Cost of interest-bearing liabilities 4.61 4.51 0.10 4.55 4.49 0.06 ---------- ---------- ---------- ---------- ---------- ---------- Interest spread 3.59 3.62 (0.03) 3.60 3.66 (0.06) Impact of interest-free funds 0.86 0.87 (0.01) 0.87 0.83 0.04 ---------- ---------- ---------- ---------- ---------- ---------- Net interest margin 4.45 % 4.49 % (0.04)% 4.47 % 4.49 % (0.02)% ========== ========== ========== ========== ========== ==========
-7- Net interest revenue during the first nine months of 1997, on a taxable equivalent basis, was $588.1 million, a $4.1 million, or .7%, increase from the level experienced in the same period last year. The net interest margin was 4.47% during the first nine months compared to 4.49% a year earlier. The increase in net interest revenue was attributable to the 1.3% increase in average earning asset balances. During the third quarter of 1997, as compared to the second quarter of this year, the net interest margin remained relatively stable at 4.45%. Competitive pricing pressures on loan and deposit rates and a shift in the funding mix to higher cost deposits and borrowed funds will continue to impact the net interest margin. Table 2 shows the components of interest revenue and expense along with changes related to volumes and rates. Total interest revenue on a taxable-equivalent basis increased by $12.9 million to $1,072.9 million during the first nine months of 1997 compared to the same period last year. This resulted from the increase in average earning assets through a bank acquisition which was partially offset by the decline in asset yields. Loan income rose by $17.7 million due to increased balances acquired through an acquisition while the rate earned on total loans declined by .08% to 8.61%. Securities revenue declined by $6.0 million as average balance levels were reduced. Total interest expense was $484.9 million during the first nine months of 1997, an increase of $8.8 million from the same period last year. Interest rates on liabilities increased from 4.49% in 1996 to 4.55% in 1997. Interest expense on total deposits increased $4.3 million in the first nine months of 1997 compared to the same period last year due to higher higher deposit levels and a change in mix of deposits from lower cost passbook and short term certificates of deposit to money market savings accounts and higher priced certificates of deposit. Interest expense on borrowed funds increased by $4.6 million due to higher average balances. In December 1996, the company issued $150 million of securities through Firstar Capital Trust I. These securities are being accounted for as long term debt. Net cash flows of off-balance sheet derivative instruments used to manage interest rate risk reduced net interest revenue by $942 thousand. This compares to a decrease in net interest revenue of $1.3 million during the same period in 1996.
Table 2. Analysis of interest revenue and expense Nine Months Ended September 30 --------------------------------------------------------------- Interest Total Due to ------------------------ ------------------------ 1997 1996 Change Volume Rate ----------- ----------- ----------- ----------- ----------- (thousands of dollars) Interest-bearing deposits with banks $ 599 $ 365 $ 234 $ 224 $ 10 Federal funds sold and resale agreements 4,773 3,527 1,246 1,606 (360) Trading securities 115 303 (188) (269) 81 Securities 213,247 219,289 (6,042) (10,686) 4,644 Commercial loans 472,026 460,518 11,508 22,230 (10,722) Consumer loans 382,180 376,016 6,164 3,527 2,637 ----------- ----------- ----------- Total loans 854,206 836,534 17,672 26,015 (8,343) ----------- ----------- ----------- Total interest revenue 1,072,940 1,060,018 12,922 13,926 (1,004) Interest-bearing demand 18,257 16,118 2,139 479 1,660 Money market accounts 86,814 75,160 11,654 6,898 4,756 Savings passbook 25,360 30,515 (5,155) (2,675) (2,480) Certificates of deposit 220,554 224,936 (4,382) (3,392) (990) ----------- ----------- ----------- Total deposits 350,985 346,729 4,256 1,177 3,079 Short-term borrowed funds 96,465 95,334 1,131 680 451 Long-term debt 37,425 33,968 3,457 4,517 (1,060) ----------- ----------- ----------- Total interest expense 484,875 476,031 8,844 3,433 5,411 ----------- ----------- ----------- Net interest revenue $ 588,065 $ 583,987 $ 4,078 7,647 (3,569) =========== =========== =========== Calculations are computed on a taxable-equivalent basis using a tax rate of 35%. The change attributable to both volume and rate has been allocated proportionately to the changes due to volume and rate.
-8- The objective of Firstar's asset/liability management policy is to maintain adequate capital and liquidity and to manage interest rate risk to produce an acceptable level of net interest revenue. The policy is to employ an asset liability management strategy which limits the potential impact to net income over the subsequent four quarters. Using the most recent simulation modeling, Firstar was within these guidelines. The recently completed asset- liability forecast shows that consolidated net interest revenue is expected to decline by up to $8 million under the low and most likely scenarios as compared to current rates. Under a high rate scenario a reduction of $20 million in net interest revenue is possible. Under all four rate scenarios the forecast shows higher net interest income than experienced during the prior four quarters. The rate scenarios used assume an average prime rate over the next four quarters of 8.65% under the most likely, 7.41% under the low, and 9.75% under the high scenarios, as compared to the current prime rate of 8.5%. The provision for loan losses of $30.5 million was $1.6 million higher than last year. Net charge-offs for the first nine months of 1997 were at .31% of average outstanding loans compared to .25% a year earlier. The reserve for loan losses represented 1.58% of total loans at September 30, 1997, down from 1.62% a year earlier. Consumer loan losses for the third quarter of 1997 have remained level with the prior quarter. Net charge-offs on consumer loans were .59% in the current quarter compared to the high of .72% in the fourth quarter of 1996 and are slightly higher than the third quarter of 1996. Credit card charge-offs for the third quarter of 1997 were 3.66%, up slightly from the 3.52% of the second quarter, but down from the 1996 levels. Firstar expects credit card charge- offs to be in the range of 3.25% to 4.25% over the next twelve months. Commercial loan charge-offs increased during the quarter from the unusually low levels in the prior two quarters. Nonperforming assets were $83.0 million at September 30, 1997 which represented .61% of total loans and foreclosed assets. This was a reduction of $8.9 million and $9.5 million from the prior quarter and one year ago, respectively. Loans past due 90 days or more rose by $22.9 million from the prior quarter level to $95.8 million. This was attributable to a few loans which were in the process of renewal and were subsequently removed from past due status.
Table 3. Net loan charge-offs Quarter ended ---------------------------------------------------------------------------------- 9-30-97 6-30-97 3-31-97 12-31-96 9-30-96 6-30-96 3-31-96 ---------- ---------- ---------- ---------- ---------- ---------- ---------- (thousands of dollars) Credit card $ 6,172 $ 5,673 $ 5,556 $ 8,304 $ 6,162 $ 5,674 $ 4,746 Other consumer 2,485 2,869 4,497 2,314 1,800 2,722 1,072 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total consumer 8,657 8,542 10,053 10,618 7,962 8,396 5,818 Commercial 3,034 363 (333) 4,438 986 266 274 ---------- ---------- ---------- ---------- ---------- ---------- ---------- Total net charge-offs $ 11,691 $ 8,905 $ 9,720 $ 15,056 $ 8,948 $ 8,662 $ 6,092 ========== ========== ========== ========== ========== ========== ========== Net charge-offs as a % of: Credit card 3.66 % 3.52 % 3.44 % 5.11 % 3.94 % 3.81 % 3.20 % Other consumer 0.19 0.22 0.36 0.17 0.14 0.22 0.08 Total consumer 0.59 0.59 0.71 0.72 0.55 0.60 0.41 Commercial 0.16 0.02 (0.02) 0.24 0.05 0.02 0.02 Total loans 0.35 0.27 0.30 0.46 0.27 0.27 0.19
Other operating revenue, excluding securities gains and losses, was $343.6 million in the first nine months of 1997, an increase of 5.9% from the same period last year. Table 4 shows the composition of other operating revenue. -9-
Table 4. Other operating revenue Three Months Ended Nine Months Ended September 30 September 30 ---------------------------------- ---------------------------------- 1997 1996 Change 1997 1996 Change ---------- ---------- ---------- ---------- ---------- ---------- (thousands of dollars) (thousands of dollars) Trust and investment management fees $ 44,829 $ 37,414 19.8 % $ 127,298 $ 110,104 15.6 % Service charges on deposit accounts 21,963 23,060 (4.8) 65,154 66,477 (2.0) Credit card service revenue 18,989 18,100 4.9 54,251 50,814 6.8 Mortgage loan servicing 2,988 6,874 (56.5) 9,446 17,724 (46.7) Mortgage loan origination 10,457 6,170 69.5 23,052 19,384 18.9 Data processing fees 5,224 4,687 11.5 15,159 13,851 9.4 Insurance revenue 2,487 3,881 (35.9) 8,332 8,389 (0.7) Brokerage revenue 2,818 2,301 22.5 8,261 8,252 0.1 International fees 1,741 1,565 11.2 4,827 4,342 11.2 Foreign exchange gains 641 586 9.4 2,049 1,844 11.1 ATM fees 1,868 1,412 32.3 4,349 3,983 9.2 Safe deposit fees 1,106 901 22.8 3,582 3,010 19.0 Trading securities gains 196 635 (69.1) 922 1,549 (40.5) Other 5,568 5,743 (3.0) 16,894 14,842 13.8 ---------- ---------- ---------- ---------- Subotal 120,875 113,329 6.7 343,576 324,565 5.9 Securities (losses) gains 31 22 1,157 64 Total ---------- ---------- ---------- ---------- $ 120,906 $ 113,351 6.7 % $ 344,733 $ 324,629 6.2 % ========== ========== ========== ==========
Other operating revenue represents 37.0% of total taxable equivalent revenue for the first nine months of 1997 compared to 35.7% for the same period one year ago. Trust and investment management fees are the single largest source of fee revenue, contributing $127.3 million, or 37%, of other operating revenue. This level represents a 15.6% growth in revenue during the first nine months of 1997 compared to the same period last year. Trust and investment assets under management were $25.1 billion on September 30, 1997, a 20.9% increase from the year earlier level due to both the result of general market appr- eciation and additional net new business. Additionally, assets held in custody accounts rose by 37.1% to a level of $91.2 billion due in part to increased mutual fund services business. The increased volatility of equity markets and interest rates may have a significant effect on trust and investment management fees in the coming months. Revenue from service charges on deposit accounts at $65.2 million for the first nine months of 1997 was 2.0% below last year. Credit card service revenues are the third largest source of fee revenue, totaling $54.3 million during the first nine months of 1997. This level represented a 6.8% increase over the same period last year. Increased cardholder fees and interbank fees have contributed to this revenue growth. Mortgage loan servicing revenues declined by 46.7% from the year earlier level due to gains on the sale of servicing rights last year and the resulting lower level of serviced loans. Revenue from mortgage loan originations activity for the first nine months of this year increased 18.9% due to a gain on sale of portfolio mortgages in the third quarter of $1.4 million and continued improvement in origination volumes during the past two quarters. The remaining sources of other operating revenue derive from a wide range of services and aggregated $64.4 million, an increase of 7.2% over the first nine months of 1996. This year's revenue included $1.6 million of nonrecurring items. Other operating expense declined to a level of $542.5 million for the first nine months of 1997. Excluding the restructuring charges and SAIF assessment, expenses increased by 3.1%. Personnel costs increased less than 1%. Nonpersonnel expense, excluding the one-time charges, increased by 5.8%. The detail of other operating expense is shown in Table 5. -10- Full-time equivalent personnel headcount was 7,755 on September 30, 1997, down from 8,420 one year earlier. Staff reductions have occurred under the corporate wide restructuring program. The impact of the staff reductions was offset by increases in temporary staffing costs, higher variable pay, employees added through the bank acquisition, and normal salary increases for all employees. Increased temporary staffing has occurred as these resources are dedicated to implement technology related enhancements, including year 2000 compliance changes, and to staff operation areas of the company. Employee benefit expense has declined due to lower pension and other postretirement benefit costs. Business development expense rose by 15.7% from a somewhat unrepresentative lower level last year and as a result of increased focus on customer development activities this year. Professional fees increased 17.6% due to some one-time costs and increased use of outside consultants in various areas of the company to implement process improvement changes. Processing losses increased 37.2% due to higher fraud losses and other one-time losses incurred through the centralization of various operational functions. All other operating expenses totaled $199.7 million, an increase of 3.1% over the first nine months of 1996. During the first quarter of 1996, Firstar recorded a $50.2 million charge in connection with Firstar Forward, the corporate wide restructuring program which was announced in January 1996. This program was completed in June 1997. The 1996 charge included severance accruals of $24.0 million associated with staff reductions of approx- imately 1,500 people, fixed asset writedowns of $3.9 million and other project costs of $22.3 million. There are approximately $2.4 million of remaining cash payments to be made as of September 30, 1997. The efficiency ratio, which is the ratio of expense to revenue, was 58.2% in the first nine months of 1997 compared to 57.9% a year earlier.
Table 5. Other operating expense Three Months Ended Nine Months Ended September 30 September 30 ---------------------------------- ---------------------------------- 1997 1996 Change 1997 1996 Change ---------- ---------- ---------- ---------- ---------- ---------- (thousands of dollars) (thousands of dollars) Salaries $ 82,942 $ 78,234 6.0 % $ 245,184 $ 236,908 3.5 % Employee benefits 15,605 17,338 (10.0) 50,502 56,087 (10.0) ---------- ---------- ---------- ---------- Total personnel expense 98,547 95,572 3.1 295,686 292,995 0.9 Net occupancy expense 16,061 16,782 (4.3) 47,567 47,356 0.4 Equipment expense 16,476 15,644 5.3 49,233 46,041 6.9 Business development 6,945 6,875 1.0 21,622 18,683 15.7 F.D.I.C. insurance 599 398 50.5 1,902 2,130 (10.7) Stationery and supplies 5,423 5,769 (6.0) 16,282 17,814 (8.6) Delivery 5,191 4,956 4.7 14,833 14,471 2.5 Professional fees 5,716 6,159 (7.2) 18,335 15,591 17.6 Information processing expense 6,392 5,550 15.2 17,161 15,371 11.6 Amortization of intangibles 4,375 5,102 (14.2) 13,001 12,491 4.1 Employee education/recruiting 2,495 2,136 16.8 6,523 4,976 31.1 Federal Reserve processing fees 1,990 1,552 28.2 5,171 4,085 26.6 Commissions and service fees 1,512 1,451 4.2 4,015 4,381 (8.4) Wire communication 2,510 2,361 6.3 7,539 7,262 3.8 Processing and other losses 3,654 1,541 137.1 7,131 5,198 37.2 Credit card assessment fees 1,474 1,561 (5.6) 4,285 4,355 (1.6) Net foreclosed assets expense(income) (87) 126 (145) 662 Published information 828 691 19.8 2,190 1,932 13.4 Insurance 529 803 (34.1) 896 1,425 (37.1) Other 3,134 4,014 (21.9) 9,261 9,039 2.5 ---------- ---------- ---------- ---------- Total nonpersonnel expense 85,217 83,471 2.1 246,802 233,263 5.8 Restructuring charges 0 0 0 50,237 SAIF assessment 0 7,969 0 7,969 ---------- ---------- ---------- ---------- Total other operating expense $ 183,764 $ 187,012 (1.7)% $ 542,488 $ 584,464 (7.2)% ========== ========== ========== ==========
-11- Income tax expense was $113.4 million in the first nine months of 1997 compared to $93.0 million in the same period last year. The effective tax rate was 34.0% in 1997 compared to 34.5% in 1996. Financial Discussion - Balance Sheet Total assets on September 30, 1997 were $19.8 billion, up $2.4 million from December 31, 1996 and down $145 million from a year earlier. Earning assets totaled $17.8 billion, up $203 million from year end. Earning assets have increased $119 million, or .7% from a year earlier. Average loans totaled $13.3 billion during the first nine months of 1997, an increase of $403 million, or 3.1% from a year earlier. A bank acquisition which occurred in the third quarter of last year added approximately $625 million of loans. Exclusive of this acquisition related impact, average loans declined by .3% from a year ago. Commercial loans averaged $7.5 billion during the first nine months of 1997, an increase of $349 million, or 4.9% from a year earlier. Excluding loans acquired through the bank acquisition, commercial loans declined by .1% from last year. Average loans have increased during the past three quarters when compared with the immediate prior quarter at an annualized rate of 1.6% in the third quarter, 8.4% in the second quarter and 3.9% in the first quarter. While this loan growth is encouraging, competitive pressures are leading to narrower interest spreads for commercial lending. Consumer loans, excluding residential mortgages, averaged $3.2 billion, an increase of $253 million, or 8.5% over the first nine months of 1996. Excluding loans from the bank acquisition, consumer lending increased by 6.3%. Good growth has occurred in home equity loans and credit card loans, which are up 17.2% and 8.4% respectively, excluding acquisition impacts from the same period one year ago. Residential mortgage loans, exclusive of loans acquired through bank acquisition and loans held for sale, declined by 5.9% on average from the first nine months of 1996. The reduction was attributable to the normal loan amortization and prepayments partially offset by the placement in the portfolio of some shorter term variable rate mortgages. Firstar's strategy is to originate and sell mortgages into the secondary market thereby reducing the amount of mortgages held on the balance sheet. Total securities, including both those designated as available for sale and those held to maturity averaged $4.2 billion during the first nine months of 1997 compared with $4.4 billion a year earlier. Similar to portfolio mortgages, Firstar has reduced the size of its investment portfolio through normal run-off and redeploying the proceeds to loans or reduce short-term borrowed funds. Funding sources, consisting of deposits and borrowed funds, averaged $17.4 billion during the first nine months of 1997. Total deposits averaged $14.3 billion, a decrease of 2.4% from a year ago excluding the bank acquisition impact. Increased competition for consumer deposits and continued consumer sensitivity to interest rates and other uses of funds, such as investments in equity markets, have limited Firstar's deposit growth. Borrowed funds averaged $3.1 billion during the first nine months of 1997, up 2.1% from a year earlier. In December 1996 Firstar issued through Firstar Capital Trust I, $150 million of Trust Capital Securities. These securities qualify as Tier 1 capital and are mandatorily redeemable in 30 years. These securities are included in long term debt at September 30, 1997. This is a change from the presentation in Firstar's 1996 Form 10-K wherein these securities were classified as a minority interest. Stockholders' equity totaled $1,639 million at September 30, 1997, a decrease of $65 million from year end 1996. Firstar repurchased and retired 5,944,300 shares of its common stock during the first five months of this year under its previously announced stock buyback plan which authorized up to 12 million shares for repurchase. Additionally, 1,171,900 shares of common stock were purchased and placed in treasury stock for reissuance under stock option plans and convertible securities during the first nine months of 1997. Shares reissued under option plans and conversions totaled 1,435,551 during the first nine months of 1997. -12- Firstar's capital management plan strives to match longer term capital needs with maintaining sound capital levels. It is Firstar's policy to manage tier 1 leverage to the top quartile level of its peer group which was 8.97% at the end of the second quarter of 1997. Firstar's tier 1 leverage ratio was 8.28% at September 30, 1997. Future purchases by Firstar of its common stock for retirement will take into consideration the goal of returning to the top quartile range of its peers for the tier 1 leverage ratio. On October 16, 1997, the board of directors declared a quarterly dividend to common stockholders of $.21 per share. The dividend is payable November 15 to shareholders of record on October 27. The board also declared a quarterly dividend of $8.75 per Series D preferred share payable December 31 to stockholders of record on December 15.
Table 6. Capital components and ratios September 30 December 31 September 30 1997 1996 1996 ------------ ------------ ------------ (thousands of dollars) Risk-based capital: Stockholders' equity $ 1,639,129 $ 1,704,047 $ 1,644,816 Trust capital securities 150,000 150,000 0 Unrealized (gains) losses on securities available for sale (17,260) (19,191) (8,738) Minority interest in subsidiaries 2,798 2,384 2,278 Less disallowed intangibles (191,507) (200,540) (189,814) ------------ ------------ ------------ Total Tier I capital 1,583,160 1,636,700 1,448,542 Allowable reserve for loan losses 185,789 175,725 177,724 Allowable long-term debt 40,000 75,668 75,668 ------------ ------------ ------------ Total Tier II capital 225,789 251,393 253,392 ------------ ------------ ------------ Total capital $ 1,808,949 $ 1,888,093 $ 1,701,934 ============ ============ ============ Risk-adjusted assets $ 14,835,573 $ 14,020,587 $ 14,181,132 Tier I capital to risk-adjusted assets 10.67 % 11.67 % 10.21 % Total capital to risk-adjusted assets 12.19 13.47 12.00 Tier I leverage ratio 8.28 8.55 7.49
-13-
FIRSTAR CORPORATION AND SUBSIDIARIES ADDITIONAL FINANCIAL DATA (unaudited) - - ---------------------------------------------------------------------------------------------------- Selected Financial Data (thousands of dollars, except per share) Quarter ended Nine Months ended September 30 September 30 ---------------------- ------------------------------ 1997 1996 1997 1996 ---------------------- ------------------------------ Earnings and Dividends Net income $ 75,287 $ 69,272 $ 219,790 $ 176,553 Per common share: Net income 0.52 0.46 1.51 1.19 Dividends 0.21 0.19 0.61 0.55 Stockholders' equity 0.00 0.00 11.28 10.86 Performance Ratios Return on average assets 1.55 % 1.41 % 1.52 % 1.24 % Return on average common equity 18.51 17.27 18.57 15.35 Dividend payout ratio 40.38 41.30 40.40 46.22 Equity to assets 0.00 0.00 8.29 8.26 Net loan charge-offs as a percentage of average loans 0.35 0.27 0.31 0.25 Nonperforming assets as a percentage of loans and foreclosed assets 0.00 0.00 0.61 0.70 Net interest margin 4.45 4.49 4.47 4.49 Efficiency ratio* 57.82 57.44 * 58.23 57.92 * Fee revenue as a percentage of average assets 2.48 2.31 2.38 2.27 Statistical Data Full-time equivalent staff (at quarter end) 0 0 7,755 8,420 Average common shares outstanding (000's) 144,611 149,416 145,265 147,285 Actual common shares outstanding (000's at quarter end) 0 0 144,655 150,389 Stock Price Information High $ 38.000 $ 24.563 $ 38.000 $ 24.875 Low 30.625 21.438 25.563 18.313 Close 36.250 24.438 36.250 24.438 *Excludes nonrecurring items. -14-
FIRSTAR CORPORATION AND SUBSIDIARIES ADDITIONAL FINANCIAL DATA (Unaudited) - - -------------------------------------------------------------------------------------------------------- Consolidated Average Balance Sheets, Net Interest Revenue and Rate Analysis (Thousands of Dollars) Quarter ended September 30 ------------------------------------------------------------------------ 1997 1996 ------------------------------------- ---------------------------------- Average Average Average Average Balance Interest Rate Balance Interest Rate ------------------------------------- ---------------------------------- Assets Interest-bearing deposits with banks $ 22,039 $ 313 5.63 % $ 8,820 $ 108 4.87 % Federal funds sold and resale agreements 76,183 1,083 5.64 121,716 1,829 5.98 Trading securities 1,166 16 5.44 8,799 35 1.58 Securities: Taxable 2,913,495 49,162 6.72 3,215,682 52,411 6.50 Nontaxable 1,242,398 22,273 7.17 1,116,720 20,150 7.22 ----------- ---------- ----------- ---------- Total securities 4,155,893 71,435 6.86 4,332,402 72,561 6.69 Loans: Commercial 7,542,064 161,146 8.48 7,352,926 158,365 8.57 Consumer 5,815,916 129,360 8.85 5,789,922 126,606 8.72 ----------- ---------- ----------- ---------- Total loans 13,357,980 290,506 8.64 13,142,848 284,971 8.64 ----------- ---------- ----------- ---------- Interest earning assets 17,613,261 363,353 8.20 17,614,585 359,504 8.13 Reserve for loan losses (212,240) (213,171) Cash and due from banks 987,957 1,069,877 Other assets 929,540 1,039,556 ----------- ----------- Total assets $ 19,318,518 $ 19,510,847 =========== =========== Liabilities and Stockholders' Equity Interest-bearing demand $ 1,599,625 $ 6,489 1.61 % $ 1,562,501 $ 5,509 1.40 % Money market accounts 2,767,882 30,317 4.35 2,644,523 26,594 4.00 Savings passbook 1,416,480 8,076 2.26 1,599,096 10,004 2.49 Certificates of deposit 5,306,137 74,798 5.59 5,346,708 76,115 5.66 Short-term borrowed funds 2,495,752 33,507 5.33 2,471,395 32,876 5.29 Other debt 755,803 13,211 6.99 600,082 10,054 6.70 ----------- ---------- ----------- ---------- Interest-bearing liabilities 14,341,679 166,398 4.61 14,224,305 161,152 4.51 Demand deposits 3,127,312 3,393,956 Other liabilities 231,278 290,191 Stockholders' equity 1,618,249 1,602,395 ----------- ----------- Total liabilities and stockholders' equity $ 19,318,518 $ 19,510,847 =========== =========== Net interest revenue/margin $ 196,955 4.45 % $ 198,352 4.49 % ========== ==========
:
Nine months ended September 30 ------------------------------------- ---------------------------------- 1997 1996 ----------------------------------- ---------------------------------- Average Average Average Average Balance Interest Rate Balance Interest Rate ------------------------------------- ---------------------------------- Assets Interest-bearing deposits with banks $ 15,895 $ 599 5.04 % $ 9,938 $ 365 4.91 % Federal funds sold and resale agreements 118,911 4,773 5.37 82,070 3,527 5.74 Trading securities 2,514 115 6.12 8,924 303 4.54 Securities: Taxable 2,989,346 149,017 6.66 3,271,382 157,943 6.44 Nontaxable 1,195,214 64,230 7.17 1,124,249 61,346 7.28 ----------- ---------- ----------- ---------- Total securities 4,184,560 213,247 6.80 4,395,631 219,289 6.66 Loans: Commercial 7,472,054 472,026 8.45 7,122,763 460,518 8.64 Consumer 5,788,107 382,180 8.82 5,734,525 376,016 8.75 ----------- ---------- ----------- ---------- Total loans 13,260,161 854,206 8.61 12,857,288 836,534 8.69 ----------- ---------- ----------- ---------- Interest earning assets 17,582,041 1,072,940 8.15 17,353,851 1,060,018 8.15 Reserve for loan losses (212,559) (205,119) Cash and due from banks 991,819 1,039,184 Other assets 918,800 905,690 ----------- ----------- Total assets $ 19,280,101 $ 19,093,606 =========== =========== Liabilities and Stockholders' Equity Interest-bearing demand $ 1,588,389 $ 18,257 1.54 % $ 1,544,880 $ 16,118 1.39 % Money market accounts 2,751,338 86,814 4.22 2,529,782 75,160 3.97 Savings passbook 1,468,081 25,360 2.31 1,616,297 30,515 2.52 Certificates of deposit 5,300,002 220,554 5.56 5,379,349 224,936 5.59 Short-term borrowed funds 2,439,833 96,465 5.29 2,422,597 95,334 5.26 Other debt 707,361 37,425 7.06 660,488 33,968 6.86 ----------- ---------- ----------- ---------- Interest-bearing liabilities 14,255,004 484,875 4.55 14,153,393 476,031 4.49 Demand deposits 3,174,327 3,111,532 Other liabilities 263,600 285,290 Stockholders' equity 1,587,170 1,543,391 ----------- ----------- Total liabilities and stockholders' equity $ 19,280,101 $ 19,093,606 =========== =========== Net interest revenue/margin $ 588,065 4.47 % $ 583,987 4.49 % ========== ========== -15-
PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (a) Exhibits to Part 1 of Form 10-Q 27. Financial Data Schedule (b) No reports on Form 8-K were filed during the quarter 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. FIRSTAR CORPORATION /s/ Jeffrey B. Weeden ------------------ Jeffrey B. Weeden Senior Vice President-Finance and Treasurer (Chief Financial Officer) November 14, 1997 -16- EX-27 2 EXHIBIT 27 (FDS) FILED WITH FORM 10-Q
9 1,000 9-MOS DEC-31-1996 SEP-30-1997 1,222,014 24,074 93,489 3,277 1,776,912 2,396,802 2,452,347 13,533,817 213,362 19,769,850 14,614,019 2,509,864 248,259 758,579 181,102 0 6,738 1,451,289 19,769,850 848,925 191,958 5,485 1,046,368 350,985 484,875 561,493 30,540 1,157 542,488 333,198 219,790 0 0 219,790 1.51 1.51 4.47 74,071 95,849 272 0 213,138 46,559 16,243 213,362 212,997 365 0
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