-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, QCRBEuPAvdDDlJe1bu0jj203n4PLovCyqIkDwhqxcn7DJ1zpri6mFftOkuWUAMMv AQEJYvGf3PeRHLxYExVmAQ== 0000950114-95-000095.txt : 19950516 0000950114-95-000095.hdr.sgml : 19950516 ACCESSION NUMBER: 0000950114-95-000095 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MERCANTILE BANCORPORATION INC CENTRAL INDEX KEY: 0000064907 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 430951744 STATE OF INCORPORATION: MO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-11792 FILM NUMBER: 95539890 BUSINESS ADDRESS: STREET 1: ONE MECANTILE CENTER STREET 2: P O BOX 524 CITY: ST LOUIS STATE: MO ZIP: 63166-0524 BUSINESS PHONE: 3144252525 MAIL ADDRESS: STREET 1: P O BOX 524 CITY: ST LOUIS STATE: MO ZIP: 63166-0524 FORMER COMPANY: FORMER CONFORMED NAME: MERCANTILE TRUST CO DATE OF NAME CHANGE: 19720229 10-Q 1 MERCANTILE BANCORPORATION, INC. FORM 10-Q 1 FORM 10-Q UNITED STATES 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 Quarter Ended March 31, 1995 Commission File Number 1-11792 --------------- --------- Mercantile Bancorporation Inc. - ----------------------------------------------------------------------- (Exact Name of Registrant as Specified in Its Charter) Missouri 43-0951744 - ----------------------------------------------------------------------- (State of Incorporation) (IRS Employer Identification No.) P.O. Box 524 St. Louis, Missouri 63166-0524 - ----------------------------------------------------------------------- (Address of Principal Executive Offices) (Zip Code) Registrant's Telephone Number, Including Area Code (314) 425-2525 -------------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. X ------ ----- Yes No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, $5.00 par value, 52,693,680 shares outstanding as of the close of business on May 1, 1995. 2 PART I FINANCIAL INFORMATION Item 1. Financial Statements. The following consolidated financial statements, included in the Quarterly Report of the Registrant to its Shareholders for the quarter ended March 31, 1995, attached hereto as Exhibit 19, are incorporated herein by reference:
Quarterly Report STATEMENT Reference - ----------------------------------------------------- ---------------- Consolidated Statements of Income - Three Months ended March 31, 1995 and 1994. Page 18 Consolidated Balance Sheets as of March 31, 1995 and December 31, 1994. Page 19 Consolidated Statements of Cash Flows - Three Months ended March 31, 1995 and 1994. Page 21
The following notes to the consolidated financial statements are included as a part of this report: Mercantile Bancorporation Inc. and Subsidiaries Notes to Consolidated Financial Statements NOTE 1 The consolidated financial statements include all adjustments which are, in the opinion of management, necessary to a fair statement of the results of these periods and are of a normal recurring nature. NOTE 2 Effective January 3, 1995, the Registrant acquired UNSL Financial Corp. ("UNSL"), a $508 million asset-holding company for the Lebanon, Missouri- based United Savings Bank. The UNSL acquisition was accounted for as a pooling-of-interests. The historical consolidated financial statements as of December 31, 1994 and for the period ended March 31, 1995 have been restated to reflect this transaction. Also effective January 3, 1995, the Registrant acquired Wedge Bank ("Wedge"), an Alton, Illinois bank with assets totaling $196 million. The Wedge transaction meets the requirements for treatment as a pooling-of- interests; however, due to the immateriality of Wedge's financial condition and results of operations to those of the Registrant, the historical financial statements of the Registrant have not been restated for the Wedge transaction. Net income and net income per share for the Registrant and UNSL prior to restatement were as follows:
Three months ended March 31, 1994 ($ in thousands except per share data) ------------------- REGISTRANT Net income $38,855 Net income per share .91 UNSL Net income 1,011 Net income per share .66
2 3 NOTE 3 Effective May 1, 1995, the Registrant acquired TCBankshares, Inc. ("TCB"), a $1.4 billion asset-holding company based in North Little Rock, Arkansas. Also effective May 1, 1995, the Registrant acquired Central Mortgage Bancshares, Inc. ("CMB"), a $659 million asset-bank holding company based in Kansas City, Missouri. Both acquisitions were accounted for as poolings-of-interests. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Management's Discussion and Analysis of Financial Condition and Results of Operations, included on pages 4 - 17 in the Quarterly Report of the Registrant to its Shareholders for the quarter ended March 31, 1995, is incorporated herein by reference. PART II OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders The annual meeting of shareholders of Registrant was held on April 27, 1995. Of 45,675,135 shares issued, outstanding and eligible to be voted at the meeting, 38,188,918 shares, constituting a quorum, were represented in person or by proxy. Two (2) matters were submitted to a vote of the security-holders at the meeting. 1. ELECTION OF CLASS I DIRECTORS. The first matter was the ------------------------------ election of four Class I director nominees to the Board of Directors. The Restated Articles of Incorporation of the Registrant allow cumulative voting in all director elections and all shareholders were accordingly allowed to cumulate their votes for directors if they so desired. Upon tabulation of the votes cast, it was determined that all four director nominees had been elected. The voting results are set forth below:
Name For Withheld -------------------------------------------------------- Thomas A. Hays 38,097,319 333,325 Harvey Saligman 37,932,305 446,059 Patrick T. Stokes 37,310,915 913,308 John A. Wright 38,097,213 332,498
2. ELECTION OF CLASS II DIRECTOR. The second matter was the ------------------------------ election of one director nominee, Francis A. Stroble, to the Board of Directors in Class II, to continue in office until 1996. Mr. Stroble was previously elected and served as a Class I director. His term as a Class I director expired as of the 1995 annual meeting and he was nominated for reelection at that meeting in Class II. Because only one director stood for election in this class, cumulative voting was not applicable. Upon tabulation of the votes cast it was determined the nominee had been elected. The voting results are set forth below:
Name For Withheld -------------------------------------------------------- Francis A. Stroble 37,871,986 316,932
Because Registrant has a staggered Board, the term of office of the following named Class II and Class III directors, who were not up for election at the 1995 annual meeting, continued after the meeting: Class II (to continue in office until 1996) Richard P. Conerly William A. Hall Earl K. Dille William G. Heckman J. Cliff Eason Charles H. Price 3 4 Class III (to continue in office until 1997) Harry M. Cornell, Jr. Craig D. Schnuck Bernard A. Edison Robert L. Stark Thomas H. Jacobsen Former Class I directors James B. Malloy and Joseph G. Werner completed their terms in 1995 and did not stand for reelection at the 1995 annual meeting. Former Class III director Robert W. Staley retired from the Board effective as of the 1995 annual meeting. Item 6. Exhibits and Reports on Form 8-K. (a) Exhibits: 4-1 Certificate of Designation, Preferences, and Relative Rights, Qualifications, Limitations and Restrictions of the Series B-1 Preferred Stock of Mercantile Bancorporation Inc. 4-2 Certificate of Designation, Preferences, and Relative Rights, Qualifications, Limitations and Restrictions of the Series B-2 Preferred Stock of Mercantile Bancorporation Inc. 10 Mercantile Bancorporation Inc. Amended and Restated Retirement Plan for Directors 19 Quarterly Report of the Registrant to its Shareholders for the quarter ended March 31, 1995. 27 Financial Data Schedule. (b) Reports on Form 8-K: Registrant filed one (1) Current Report on Form 8-K. In that report dated May 12, 1995, Registrant disclosed under Item 2 that it had, effective May 1, 1995 consummated its acquisition of TCBankshares, Inc. ("TCB"), through merger of TCB with and into a wholly-owned subsidiary of Registrant, whereby the shareholders of TCB received an aggregate of approximately 4,500,000 shares of Registrant's common stock in exchange for their TCB shares. Also in that report, under Item 7, Registrant filed the financial statements, notes, and report listed below: Report of the Independent Auditors Dated March 10, 1995. Consolidated Balance Sheets of TCB and Subsidiaries as of December 31, 1994 and 1993. Consolidated Statements of Income of TCB and Subsidiaries for the years ended December 31, 1994, 1993 and 1992. Consolidated Statements of Shareholders' Equity of TCB and Subsidiaries for the years ended December 31, 1994, 1993 and 1992. Consolidated Statements of Cash Flows of TCB and Subsidiaries for the years ended December 31, 1994, 1993 and 1992. Notes to the Consolidated Financial Statements . 4 5 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. MERCANTILE BANCORPORATION INC. (Registrant) Date: May 15, 1995 s/W. Randolph Adams ------------------- W. Randolph Adams Chief Financial Officer 5 6 EXHIBIT INDEX --------------
Exhibit Description ------- ----------- No. --- 4-1 Certificate of Designation, Preferences, Included herein and Relative Rights, Qualifications, Limitations and Restrictions of the Series B-1 Preferred Stock of Mercantile Bancorporation Inc. 4-2 Certificate of Designation, Preferences, Included herein and Relative Rights, Qualifications, Limitations and Restrictions of the Series B-2 Preferred Stock of Mercantile Bancorporation Inc. 10 Mercantile Bancorporation Inc. Included herein Amended and Restated Retirement Plan for Directors 19 Quarterly Report of Registrant Included herein to its Shareholders for the quarter ended March 31, 1995. 27 Financial Data Schedule Included herein
6 EX-4.1 2 SERIES B-1 PREFERRED STOCK CERTIFICATE 1 EXHIBIT 4-1 ----------- 2 CERTIFICATE OF DESIGNATION, PREFERENCES, AND RELATIVE RIGHTS, QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS OF THE SERIES B-1 PREFERRED STOCK OF MERCANTILE BANCORPORATION, INC. ----------------------- Pursuant to Section 351.180 of the General and Business Corporation Law of the State of Missouri ----------------------- I, Ralph W. Babb, Jr., the Vice Chairman of Mercantile Bancorporation, Inc. (the "Company"), a corporation organized and existing under and by virtue of the provisions of the General and Business Corporation Law of the State of Missouri, in accordance with the provisions of Section 351.180.7 thereof, DO HEREBY CERTIFY: FIRST: The Articles of Incorporation of the Company, as amended and currently in effect, authorize the issuance of 5,000,000 shares of Preferred Stock, having no par value (the "Preferred Stock"), and, further, authorize the Board of Directors of the Company, by resolution or resolutions, at any time and from time to time, to divide and establish any or all of the unissued shares of Preferred Stock not then allocated to any series of Preferred Stock into one or more series and, without limiting the generality of the foregoing, to fix and determine the designation of each such share, the number of shares which shall constitute such series and certain powers, preferences and relative participating, optional or other special rights and qualifications, limitations and restrictions of the shares of each series so established. SECOND: The Board of Directors of the Company, at a meeting duly convened and held on the 12th day of January, 1995, at which a quorum was present and voting throughout, duly adopted resolutions designating and setting forth the powers, preferences and rights, and the qualifications, limitations or restrictions of a certain series of said Preferred Stock, other than those which apply to all series of Preferred Stock (for a statement of which reference is made to Article Two of the aforementioned Articles of Incorporation), and authorizing the issuance of a new series of Preferred Stock, as follows: 3 1. Designation and Amount. ----------------------- There shall be a series of the preferred stock of the Company which shall be designated as the "Series B-1 Preferred Stock," no par value, and the number of shares constituting such series shall be 5,306. 2. Definitions and Further Designations. -------------------------------------- As used herein, the following terms shall have the respective meanings ascribed to them and the following designations are hereby made: "Board" shall mean the Board of Directors of the Company. "GBCL" shall mean the General and Business Corporation Law of the State of Missouri, as amended. "Preferred Share" shall mean any share of Series B-1 Preferred Stock. "Redemption Date" shall mean and be the date specified in a Redemption Notice as the effective date of an optional redemption by the Company pursuant to Section 4 hereof. "Redemption Notice" shall mean and be the notice to holders of Preferred Shares of a redemption at the option of the Company pursuant to Section 4 hereof. "Redemption Price" shall mean and be Six Hundred Dollars ($600) for each Preferred Share, together with all dividends declared thereon and unpaid at the Redemption Date for such shares. "Stated Value" of each Preferred Share shall mean and be Ten Dollars ($10). 3. Dividends. ---------- The holder of each share of Series B-1 Preferred Stock, in preference to holders of common stock, shall be entitled to receive noncumulative annual cash dividends in such amounts and when and as declared by the Board of the Company out of the surplus or net profits of the Company. The holders of Series B-1 Preferred Stock shall not be entitled to receive any dividends thereon other than dividends specifically declared by the Board. 2 4 4. Redemption at Option of Company. -------------------------------- (a) In accordance with this Section 4, the Company at the option of the Board may redeem the whole or any part of the Series B-1 Preferred Stock outstanding at any time or from time to time by paying the Redemption Price in cash, for each share of Series B-1 Preferred Stock to be redeemed. (b) Not less than thirty (30) days prior to the applicable Redemption Date, a Redemption Notice shall be mailed to each holder of record of the Series B-1 Preferred Stock at their post office address last shown on the stock register of the Company. The Redemption Notice shall: (i) Identify the number of Preferred Shares which are outstanding and the total number of Preferred Shares to be redeemed; (ii) Identify the number of Preferred Shares to be redeemed from the recipient of the notice; (iii) State the Redemption Date and Redemption Price; and (iv) State the manner and the place for delivery to the Company of the certificate or certificates representing the Preferred Shares to be redeemed. (c) On or before the Redemption Date, each holder of Preferred Shares to be redeemed shall surrender the certificate or certificates representing such Preferred Shares to the Company, in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Price for such Preferred Shares shall be payable to the order of the person whose name appears on such certificate or certificates as the owner thereof. (d) In case of the redemption of a part only of Series B-1 Preferred Stock at any time outstanding, the Company shall select by lot, or in such other manner as the Board may determine, the Preferred Shares so to be redeemed. (e) From and after the Redemption Date (unless the Company shall default in payment of the Redemption Price), all dividends on shares called for redemption shall cease to accrue, such shares shall be deemed no longer outstanding, and all rights of the holders thereof as shareholders of the Company, except the right to receive the Redemption Price, shall terminate. (f) The Board shall have full power and authority subject to the limitations and provisions herein contained to prescribe the manner in which and the terms and conditions upon which the Series B-1 Preferred Stock shall be redeemed from time to time. 3 5 5. Liquidation. In the event of any liquidation, dissolution ------------ or winding up of the affairs of the Company, whether voluntary or involuntary, then, before any payment or other distribution, whether in cash, property or otherwise, shall be made to the holders of the common stock of the Company, the holders of Series B-1 Preferred Stock at the time outstanding shall be entitled to be paid in cash the sum of Five Hundred Dollars ($500) per share plus all dividends declared thereon and unpaid. The relative rights of Series B-1 Preferred Stock under such circumstances shall be pari passu in that ----------- holders of each Series of Preferred Stock will receive, pro rata according to their relative preferential rights, all amounts due them before any distribution shall be made to the holders of common stock. The holders of Series B-1 Preferred Stock shall not be entitled to receive any distributive amounts upon the liquidation, dissolution or winding up of the affairs of the Company other than the distributive amounts referred to in this paragraph. 6. Voting Rights. The holders of the Series B-1 Preferred -------------- Stock shall not be entitled to vote except as to matters in respect of which they shall at the time be indefeasibly vested by statute with such right. 7. Preemptive Rights. The holders of Series B-1 Preferred ------------------ Stock shall have no preemptive rights. 8. Status of Shares. Shares of Series B-1 Preferred Stock ----------------- redeemed, purchased or otherwise acquired for value by the Company, shall, after such acquisition, have the status of authorized and unissued shares of Preferred Stock and may be reissued by the Company at any time as shares of any series of Preferred Stock. 9. Amendment and Waiver. No amendment, modification or waiver --------------------- of any provision hereof shall extend to or affect any obligation not expressly amended, modified or waived or impair any right consequent thereon. No course of dealing, and no failure to exercise or delay in exercising any right, remedy, power or privilege granted hereby shall operate as a waiver, amendment or modification of any provision hereof. 10. Miscellaneous. There shall be no other rights attributable -------------- to the Series B-1 Preferred Stock or ownership of the Series B-1 Preferred Stock other than as set forth herein, in the Articles of Incorporation of the Company, or as shall be set forth by statute. 4 6 IN WITNESS WHEREOF, Mercantile Bancorporation, Inc. has caused this Certificate to be signed by its Vice Chairman and attested by its Assistant Secretary this 24th day of April 1995. MERCANTILE BANCORPORATION, INC. By:s/Ralph W. Babb, Jr. ---------------------- Ralph W. Babb, Jr. (SEAL) Vice Chairman Attest: s/Michael J. Marshall - -------------------------------------- Michael J. Marshall Assistant Secretary 5 7 STATE OF MISSOURI ) ) CITY OF ST. LOUIS ) On this 24th day of April 1994, before me personally appeared Ralph W. Babb, Jr., to me personally known, who, being by me duly sworn, did say that he is the Vice Chairman of Mercantile Bancorporation, Inc., a Missouri company, and that he signed the foregoing document as Vice Chairman of the company, and that the said instrument was signed and sealed on behalf of said company by authority of its Board of Directors; and he acknowledged said instrument to be the free act and deed of said company. IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal in the County and State aforesaid, the day and year first above written. s/Latitia O. Williams --------------------------------------- Notary Public 6 EX-4.2 3 SERIES B-2 PREFERRED STOCK CERTIFICATE 1 EXHIBIT 4-2 ----------- 2 CERTIFICATE OF DESIGNATION, PREFERENCES, AND RELATIVE RIGHTS, QUALIFICATIONS, LIMITATIONS AND RESTRICTIONS OF THE SERIES B-2 PREFERRED STOCK OF MERCANTILE BANCORPORATION, INC. ----------------------- Pursuant to Section 351.180 of the General and Business Corporation Law of the State of Missouri ----------------------- I, Ralph W. Babb, Jr., the Vice Chairman of Mercantile Bancorporation, Inc. (the "Company"), a corporation organized and existing under and by virtue of the provisions of the General and Business Corporation Law of the State of Missouri, in accordance with the provisions of Section 351.180.7 thereof, DO HEREBY CERTIFY: FIRST: The Articles of Incorporation of the Company, as amended and currently in effect, authorize the issuance of 5,000,000 shares of Preferred Stock, having no par value (the "Preferred Stock"), and, further, authorize the Board of Directors of the Company, by resolution or resolutions, at any time and from time to time, to divide and establish any or all of the unissued shares of Preferred Stock not then allocated to any series of Preferred Stock into one or more series and, without limiting the generality of the foregoing, to fix and determine the designation of each such share, the number of shares which shall constitute such series and certain powers, preferences and relative participating, optional or other special rights and qualifications, limitations and restrictions of the shares of each series so established. SECOND: The Board of Directors of the Company, at a meeting duly convened and held on the 12th day of January, 1995, at which a quorum was present and voting throughout, duly adopted resolutions designating and setting forth the designations, powers, preferences and rights, and the qualifications, limitations or restrictions of a certain series of said Preferred Stock, other than those which apply to all series of Preferred Stock (for a statement of which reference is made to Article Two of the aforementioned Articles of Incorporation), and authorizing the issuance of a new series of Preferred Stock, as follows: 2 3 1. Designation and Amount. ----------------------- There shall be a series of the preferred stock of the Company which shall be designated as the "Series B-2 Preferred Stock," no par value, and the number of shares constituting such series shall be 9,500. 2. Definitions and Further Designations. ------------------------------------- As used herein, the following terms shall have the respective meanings ascribed to them and the following designations are hereby made: "Board" shall mean the Board of Directors of the Company. "GBCL" shall mean the General and Business Corporation Law of the State of Missouri, as amended. "Preferred Share" shall mean any share of Series B-2 Preferred Stock. "Redemption Date" shall mean and be the date specified in a Redemption Notice as the effective date of an optional redemption by the Company pursuant to Section 4 hereof. "Redemption Notice" shall mean and be the notice to holders of Preferred Shares of a redemption at the option of the Company pursuant to Section 4 hereof. "Redemption Price" shall mean and be One Thousand Dollars ($1,000) for each Preferred Share plus all accrued but unpaid dividends thereon, whether or not earned or declared, accrued to the Redemption Date. "Restrictive Covenant" shall mean any covenant in any credit agreement or other agreement by which the Company is bound and which has the effect of restricting the ability of the Company to pay dividends. "Stated Value" of each Preferred Share shall mean and be Ten Dollars ($10). 3. Dividends. ---------- (a) The holders of Series B-2 Preferred Stock, in preference to the holders of common stock, shall be entitled to receive, when and as declared by the Board, out of net profits of the Company (determined in the manner hereinafter provided) cash dividends thereon, to and including the date of the retirement of such stock, at the rate of Eighty-Five Dollars ($85) per share per year. Such dividends on each share shall be payable at such times as shall be determined by the Board. (b) Such dividends shall be cumulative, so that if dividends at the rate required to be paid on the stock shall not have been paid upon or declared and set apart for 3 4 such stock, the deficiency shall be fully paid or declared and set apart before any dividend or other distribution, whether in cash, property, stock, or otherwise, shall be declared, ordered, set apart, paid or made in respect of the common stock. Dividends on the Series B-2 Preferred Stock shall be deemed to accrue from day to day. 4. Redemption at Option of Company. -------------------------------- (a) The Company may at any time, at its discretion, as expressed by resolution of the Board, retire the outstanding Series B-2 Preferred Stock as a whole by paying, for each share to be redeemed, the Redemption Price; provided that no shares of Series B-2 Preferred Stock shall be called for - ------------- redemption unless all accrued dividends (whether or not earned or declared) to the dividend payment date next preceding the Redemption Date shall have been paid on all shares of Series B-2 Preferred Stock at the time outstanding. (b) Not less than thirty (30) days prior to the applicable Redemption Date, a Redemption Notice shall be mailed to each holder of record of the Series B-2 Preferred Stock at their post office address last shown on the stock register of the Company. The Redemption Notice shall: (i) Identify the number of Preferred Shares to be redeemed from the recipient of the notice; (ii) State the Redemption Date and Redemption Price; and (iii) State the manner and the place for delivery to the Company of the certificate or certificates representing the Preferred Shares to be redeemed. (c) On or before the Redemption Date, each holder of Preferred Shares to be redeemed shall surrender the certificate or certificates representing such Preferred Shares to the Company, in the manner and at the place designated in the Redemption Notice, and thereupon the Redemption Price for such Preferred Shares shall be payable to the order of the person whose name appears on such certificate or certificates as the owner thereof. (d) From and after the Redemption Date (unless the Company shall default in payment of the Redemption Price), all dividends on shares called for redemption shall cease to accrue, such shares shall be deemed to be no longer outstanding, and all rights of the holders thereof as shareholders of the Company, except the right to receive the Redemption Price, shall terminate. (e) The Board shall have full power and authority subject to the limitations and provisions herein contained to prescribe the manner in which and the terms and conditions upon which the Series B-2 Preferred Stock shall be redeemed from time to time. 5. Liquidation. In the event of any liquidation, dissolution, ------------ or winding up of the Company, whether voluntary or involuntary, before any payment or other distribution, 4 5 whether in cash, property, or otherwise, shall be made to the holders of common stock, the holders of Series B-2 Preferred Stock shall be entitled to receive One Thousand Dollars ($1,000) for each share of such stock held by them plus an amount equal to all unpaid dividends thereon, whether or not earned or declared, accrued to the date of payment, but shall not be entitled to any other further payment. The relative rights of Series B-1 and B-2 Preferred Stock under such circumstances shall be pari passu ---- ----- in that holders of each Series of Preferred Stock will receive, pro rata according to their relative preferential rights, all amounts due them before any distribution shall be made to the holders of common stock; provided, however, that a merger or consolidation in accordance with law - ------------------ shall not be deemed a liquidation, dissolution or winding up of the company within the meaning of this Section. 6. Voting Rights. Holders of shares of Series B-2 Preferred -------------- Stock shall have no voting rights except with respect to a dissolution, a merger or consolidation, or with respect to any proposal that would adversely effect the preferences, privileges and other rights annexed to such shares; and upon a proposal to increase the authorized Preferred Stock of the Company. Provided, however, in case as many as two semi-annual dividend payments - ------------------ (whether or not consecutive and whether or not earned or declared) on the Series B-2 Preferred Stock shall be in arrears, then, and until all arrearages of dividends upon the Series B-2 Preferred Stock shall have been paid and the full dividend on the outstanding Series B-2 Preferred Stock for the then current semi-annual dividend period shall have been declared and funds set apart for the payment thereof, the holders of Series B-2 Preferred Stock at the time outstanding shall be entitled to vote, share for share, on an equal basis with holders of common capital stock. 7. Preemptive Rights. The holders of Series B-2 Preferred ------------------ Stock shall have no preemptive rights. 8. Status of Shares. Shares of Series B-2 Preferred Stock ----------------- redeemed, purchased or otherwise acquired for value by the Company, shall, after such acquisition, have the status of authorized and unissued shares of Preferred Stock and may be reissued by the Company at any time as shares of any series of Preferred Stock. 9. Amendment and Waiver. No amendment, modification or waiver --------------------- of any provision hereof shall extend to or affect any obligation not expressly amended, modified or waived or impair any right consequent thereon. No course of dealing, and no failure to exercise or delay in exercising any right, remedy, power or privilege granted hereby shall operate as a waiver, amendment or modification of any provision hereof. 10. Miscellaneous. There shall be no other rights attributable -------------- to the Series B-2 Preferred Stock or ownership of the Series B-2 Preferred Stock other than as set forth herein, in the Articles of Incorporation of the Company, or as shall be set forth by statute. 5 6 IN WITNESS WHEREOF, Mercantile Bancorporation, Inc. has caused this Certificate to be signed by its Vice Chairman and attested by its Assistant Secretary this 24th day of April 1995. MERCANTILE BANCORPORATION, INC. By:s/Ralph W. Babb, Jr. ---------------------- Ralph W. Babb, Jr. Vice Chairman (SEAL) Attest: s/Michael J. Marshall - -------------------------------------- Michael J. Marshall Assistant Secretary STATE OF MISSOURI ) ) CITY OF ST. LOUIS ) On this 24th day of April 1994, before me personally appeared Ralph W. Babb, Jr., to me personally known, who, being by me duly sworn, did say that he is the Vice Chairman of Mercantile Bancorporation, Inc., a Missouri company, and that he signed the foregoing document as President of the company, and that the said instrument was signed and sealed on behalf of said company by authority of its Board of Directors; and he acknowledged said instrument to be the free act and deed of said company. IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed my official seal in the County and State aforesaid, the day and year first above written. s/Latitia O. Williams ------------------------------------- Notary Public 6 EX-10 4 MATERIAL CONTRACT 1 EXHIBIT 10 ---------- 2 MERCANTILE BANCORPORATION INC. AMENDED AND RESTATED RETIREMENT PLAN FOR DIRECTORS -------------------------------------------------- Mercantile Bancorporation Inc. (the "Company") hereby amends and restates the Mercantile Bancorporation Inc. Retirement Plan for Directors (the "Plan") effective as of April 27, 1995. The rights of any person who retired under the Plan prior to the effective date of this amendment and restatement shall be governed by the terms of the Plan as in effect at their respective dates of retirement. 1. Purpose. The purpose of this Retirement Plan is to provide -------- retirement benefits to certain persons who have rendered extended service as a Director of Mercantile Bancorporation Inc. 2. Definitions. Except where otherwise specifically provided, the ------------ following terms shall have the following meanings for purposes of this Plan: (a) "Participant" means any Outside Director or Other Qualifying Person. (b) "Other Qualifying Person" means any person who shall have served as an Outside Director prior to April 27, 1995 and who shall have retired from such position thereafter as a result of retirement policies of the Board of Directors of the Company then and/or thereafter in effect and who shall have either (i) been appointed by the Board of Directors or any Committee thereof to serve, and who shall have served, in an advisory capacity to the Board of Directors of the Company, or (ii) been elected to, and who shall have served as a member of, the Board of Directors of any bank or trust company affiliate of the Company. (c) "Company" means Mercantile Bancorporation Inc. (d) "Outside Director" means any member of the Board of Directors of the Company. (e) "Plan Year" means, with respect to the Company or any affiliate of the Company, the period from one annual meeting of shareholders of the Company or such affiliate, respectively, until the next annual meeting, including such periods prior to April 27, 1995. (f) "Retainer" means the annual fee payable to a Director of the Company without regard to attendance at meetings of the Board of Directors of the Company or service on any committee thereof. (g) "Retirement" means the date a Participant shall cease to be an Outside Director or Other Qualifying Person, whichever shall last occur. (h) "Year of Service" means each Plan Year during which a person serves as 3 an Outside Director of either the Company or an affiliate of the Company during the entire Plan Year, but no more than one Year of Service shall be earned for any single twelve month period, even if a person is serving as a Director of any one or more of such institutions. 3. Eligibility. A Participant shall be eligible to receive a benefit ------------ under this Plan if such Participant's retirement shall have occurred (i) after July 1, 1989, and (ii) after such Participant shall have completed five (5) Years of Service and attained age sixty (60) years. ---- 4. Vesting. A Participant shall have a vested right to benefits -------- provided under this Plan if such Participant shall have completed five (5) Years of Service and attained at least age sixty (60) years while serving as ---- an Outside Director or as an Other Qualifying Person. Notwithstanding the foregoing, if a Participant dies before such Participant's Retirement, no benefit shall be payable under this Plan. 5. Retirement Benefits. Vested benefits shall be paid under this Plan -------------------- in the amounts and at the times specified below. (a) Amount of Retirement Benefit. The vested benefit payable ----------------------------- under this Plan in the event of Retirement shall be a monthly benefit equal to one-twelfth (1/12) of the Retainer in effect at the date of the Participant's Retirement. (b) Commencement of Benefits. The vested benefit under this Plan ------------------------- shall be paid monthly beginning with the month following the Participant's Retirement. (c) Duration of Benefits. Except as provided in (d), below, Plan --------------------- benefits shall be paid during the Participant's life, before the end of each month, but shall not be paid for more than the number of months equal to twelve (12) times the number of Years of Service which the Participant had at Retirement. (d) Duration of Benefits for Certain Directors. In the case of a ------------------------------------------- Participant who shall have been an Outside Director on July 1, 1989, and who remains an Outside Director or Other Qualifying Person until such Participant attains age seventy (70) years, Plan benefits shall be paid during such Participant's life, before the end of each month, through and including the month in which such Participant dies, without regard to the number of Years of Service which such Participant had at Retirement. 6. Inalienability. The rights and benefits inuring to any Participant --------------- under this Plan may not be assigned, alienated or anticipated. 7. Funding. Nothing contained in this Plan and no action taken -------- pursuant to the provisions hereof shall create or be construed to create a trust of any kind, or a fiduciary relationship between the Company and any Participant or other person. Amounts due under this Plan at any time and from time to time shall be paid from the general funds of the Company. To the extent that any person acquires a right to receive payments hereunder, such right shall be that of an unsecured general creditor of the Company. 4 8. Amendment and Termination. The Company reserves the right at any -------------------------- time to amend or revoke this Plan without liability to any Participant after the effective date of such amendment or termination; provided, however, that no vested benefit may be reduced or eliminated thereby. 9. No Retention or Other Rights. Nothing in this Plan shall give any ----------------------------- Participant the right to be retained as a Director of the Company or any of its affiliates or continued in the status of an Other Qualifying Person. 10. Withholding. All amounts otherwise payable under this Plan ------------ shall be reduced by any amounts required to be withheld therefrom pursuant to Federal, state or local law. 11. Construction. This Plan shall be construed in accordance with ------------- and governed by the laws of the State of Missouri. EX-19 5 QUARTERLY REPORT TO SHAREHOLDERS 1 MERCANTILE BANCORPORATION INC. FIRST QUARTER REPORT 1995 TABLE OF CONTENTS Highlights.......................................................... 1 Letter to Shareholders.............................................. 2 Corporate News Developments......................................... 3 Financial Section Financial Commentary............................................... 4 Condensed Consolidated Quarterly Statement of Income...............................................15 Consolidated Quarterly Average Balance Sheet.....................................................16 Financial Statements...............................................18 Banks and Other Subsidiaries........................................22 Directors and Executive Officers....................................23 Investor Information................................................24
2 HIGHLIGHTS
FIRST QUARTER ($ IN THOUSANDS EXCEPT PER SHARE DATA) 1995 1994 CHANGE - --------------------------------------------------------------------------------------------------------------------------------- PER SHARE DATA Net income $ .97 $ .90 7.8% Dividends declared .33 .28 17.9 Book value at March 31 24.87 22.98 8.2 Market price at March 31 36 1/2 31 7/8 14.5 Average common shares outstanding 45,632,256 44,435,837 2.7 - --------------------------------------------------------------------------------------------------------------------------------- OPERATING RESULTS Taxable-equivalent net interest income $137,595 $131,225 4.9% Tax-equivalent adjustment 2,431 2,309 5.3 Net interest income 135,164 128,916 4.8 Provision for possible loan losses 13,617 8,413 61.9 Other income 52,399 49,536 5.8 Other expense 105,461 106,339 (.8) Income taxes 24,423 23,834 2.5 Net income 44,062 39,866 10.5 - --------------------------------------------------------------------------------------------------------------------------------- ENDING BALANCES Total assets $13,075,489 $12,368,099 5.7% Loans and leases 8,951,639 7,911,267 13.2 Deposits 9,545,973 9,708,669 (1.7) Shareholders' equity 1,130,425 1,022,888 10.5 Reserve for possible loan losses 178,302 168,974 5.5 - --------------------------------------------------------------------------------------------------------------------------------- AVERAGE BALANCES Total assets $13,011,452 $12,654,080 2.8% Earning assets 12,028,096 11,573,015 3.9 Loans and leases 8,761,223 7,756,263 13.0 Deposits 9,815,036 10,316,003 (4.9) Shareholders' equity 1,126,668 1,013,585 11.2 - --------------------------------------------------------------------------------------------------------------------------------- SELECTED RATIOS Return on assets 1.35% 1.26% Return on equity 15.64 15.73 Overhead ratio 55.51 58.83 Other expense to average assets 3.24 3.36 Net interest rate margin 4.58 4.54 Equity to assets 8.65 8.27 Tier I capital to risk-adjusted assets 11.86 11.67 Total capital to risk-adjusted assets 15.61 15.70 Leverage 8.29 7.55 Reserve for possible loan losses to outstanding loans 1.99 2.14 Reserve for possible loan losses to non-performing loans 545.15 371.31 Non-performing assets to outstanding loans and foreclosed assets .51 1.02 - --------------------------------------------------------------------------------------------------------------------------------- SELECTED DATA Banks 42 42 Banking offices 274 273 Full-time equivalent employees 5,926 6,087 - --------------------------------------------------------------------------------------------------------------------------------- All 1994 financial information has been restated to reflect the January 3, 1995 merger with UNSL Financial Corp, which was accounted for as a pooling-of-interests. Includes United Savings Bank, a state-chartered thrift institution.
1 3 LETTER TO SHAREHOLDERS Solid loan growth, continued improvements in operating efficiencies and a strong, stable net interest rate margin contributed to another record earnings performance for Mercantile. The Corporation also further expanded its franchise with the completion of two mergers. Net income grew by 10.5% for the first three months of 1995 to $44,062,000 from $39,866,000 in 1994. Per share net income was up 7.8% to $.97 from $.90. Mercantile's net interest income for the quarter was $135,164,000, an increase of 4.8% from $128,916,000 the previous year, reflecting a net interest rate margin of 4.58% versus 4.54%. Increased loan demand also contributed to the net interest income gain, as average loans outstanding for the period in 1995 were up 13.0% to $8.8 billion from $7.8 billion in 1994. Total assets at March 31, 1995 reached $13.1 billion, up 5.7% from $12.4 billion one year earlier. Earnings performance continued to keep pace with the Corporation's growth, as return on assets rose to 1.35% for the first quarter of this year from 1.26% for the same period in 1994. Expense reduction efforts continued to show results, as other expense declined .8% to $105,461,000 from $106,339,000 in 1994. The impact can be seen in the further improvement of the overhead ratio to 55.51% in 1995 from 58.83% in 1994, and in the decline of the ratio of other expense to average assets to 3.24% from 3.36%. Mercantile remained on solid footing from an asset quality perspective, with a ratio of non-performing loans to total loans of just .37% at the end of the first quarter. Non-performing loans were $32,707,000 at March 31, 1995, compared with $31,496,000 at the end of 1994. The reserve for possible loan losses at the end of the period this year was $178,302,000, resulting in coverage levels of 1.99% of total loans and 545.15% of non-performing loans. Mergers continued to be important for Mercantile. On January 3, 1995, Wedge Bank, based in Alton, Illinois, and Lebanon, Missouri-based United Savings Bank joined the Corporation's banking system. During the quarter, Mercantile announced plans for mergers with Southwest Bancshares, based in Springfield, Missouri, and AmeriFirst Bancorporation, based in Sikeston, Missouri. Mergers with Kansas City, Missouri-based Central Mortgage Bancshares, Inc., North Little Rock, Arkansas-based TCBankshares and Davenport, Iowa-based Plains Spirit Financial Corporation, remain on track for closing in the second and third quarters. Mercantile continues to build a strong record of consistent earnings growth and franchise expansion in line with a strategy mapped out by a talented senior management team and successfully implemented by an outstanding staff. We thank our customers and shareholders for their continued support. /s/ Thomas H. Jacobsen Thomas H. Jacobsen Chairman of the Board and Chief Executive Officer April 28, 1995 2 MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES 4 CORPORATE NEWS DEVELOPMENTS * MERCANTILE COMPLETED MERGERS WITH WEDGE BANK, BASED IN ALTON, ILLINOIS, AND LEBANON, MISSOURI-BASED UNSL FINANCIAL CORP ON JANUARY 3, 1995, ADDING APPROXIMATELY $700 MILLION IN ASSETS. * In March, Wedge Bank's operations were combined with those of Mercantile Bank of Illinois, enhancing the Corporation's banking presence in Madison County, Illinois and the St. Louis Metro-East area. * Four offices of UNSL's United Savings Bank will become the new Mercantile Bank of Lebanon on May 18. The remaining sixteen United Savings Bank offices will be merged with six existing Mercantile Banks in southwest and central Missouri. * ON JANUARY 27, MERCANTILE ANNOUNCED PLANS TO MERGE WITH THE $181 MILLION-ASSET SOUTHWEST BANCSHARES, HEADQUARTERED IN SPRINGFIELD, MISSOURI. Southwest Bancshares is the holding company for Southwest Bank, which is based in Bolivar, Missouri and has a total of 11 offices in Polk, Greene, Dallas and Hickory counties. Southwest Bank will be merged with Mercantile Bank of Springfield. * AN AGREEMENT TO MERGE WITH SIKESTON, MISSOURI'S AMERIFIRST BANCORPORATION WAS ANNOUNCED ON FEBRUARY 17. AmeriFirst Bank, with approximately $157 million in assets, has two branches in Sikeston and one in Cape Girardeau, Missouri. The operations of AmeriFirst Bank will be combined with those of Mercantile Bank of Sikeston and Mercantile Bank of Cape Girardeau in their respective communities. * THE BOARD OF DIRECTORS OF MERCANTILE BANCORPORATION, AT THEIR REGULAR MEETING IN FEBRUARY, INCREASED THE CORPORATION'S QUARTERLY DIVIDEND TO $.33 PER SHARE OF COMMON STOCK FROM $.28 PER SHARE. The 17.9% increase marked the third consecutive year that Mercantile has raised its dividend. * MERCANTILE BANK OF ILLINOIS N.A. IS ISSUING A NEW CO-BRANDED VISA(R) CARD ON BEHALF OF SBC COMMUNICATIONS INC., FORMERLY SOUTHWESTERN BELL CORPORATION. The card is now available throughout Missouri, Texas, Kansas, Oklahoma and Arkansas. Marketing support for the card includes an extensive advertising and direct mail campaign featuring "Wings" star Crystal Bernard. * THE CITY OF ST. LOUIS APPROVED MERCANTILE'S REQUEST TO CONSTRUCT AN URBAN PLAZA THAT WILL PROVIDE A FOCAL POINT FOR ITS DOWNTOWN HEADQUARTERS SITE. The plaza will be located just south of the Mercantile Tower and east of Mercantile Bank of St. Louis's main office. 3 5 FINANCIAL COMMENTARY PERFORMANCE SUMMARY Net income for Mercantile Bancorporation Inc. ("Corporation" or "Mercantile") in the first quarter of 1995 was $44,062,000, a 10.5% increase from the $39,866,000 earned in the same period a year ago. On a per share basis, net income was $.97, up 7.8% from the $.90 earned in last year's first quarter. First-quarter results reflected an improvement in net interest income, lower levels of operating expenses, a larger provision for possible loan losses and an increase in other income. Return on average assets improved to 1.35% this quarter compared with 1.26% in last year's first quarter, while return on average equity was 15.64% in 1995 versus 15.73% last year. All prior year figures have been restated to include the pre- acquisition accounts and results of operations of UNSL Financial Corp ("UNSL"), the holding company for Lebanon, Missouri-based United Savings Bank, which was merged with Mercantile on January 3, 1995 in a transaction accounted for as a pooling-of-interests. Also effective January 3, 1995, Mercantile completed a merger with Wedge Bank, based in Alton, Illinois. The Wedge transaction meets the requirements for treatment as a pooling-of-interests; however, due to the immateriality of Wedge's financial condition and results of operations to that of Mercantile's, the historical financial statements of the Corporation were not restated for the Wedge transaction. There are five other pending acquisitions in various stages of approval which are summarized in Exhibit 1. - --------------------------------------------------------------------------------------------------------------------------------- EXHIBIT 1 ACQUISITIONS ($ IN THOUSANDS)
CONSIDERATION ------------------ ACCOUNTING DATE ASSETS DEPOSITS CASH SHARES METHOD ---- ------ -------- ---- ------ ---------- ACQUISITIONS COMPLETED UNSL Financial Corp Jan. 3, 1995 $ 508,346 $ 380,716 $11 1,578,107 Pooling Wedge Bank Jan. 3, 1995 195,716 152,865 1 969,954 Pooling United Postal Bancorp, Inc. Feb. 1, 1994 1,260,765 1,025,252 39 5,631,953 Pooling Metro Bancorporation Jan. 3, 1994 370,175 333,183 6 1,638,278 Pooling ACQUISITIONS PENDING Central Mortgage Bancshares, Inc. May 1, 1995 659,064 572,617 - 2,625,000 Pooling TCBankshares, Inc. May 1, 1995 1,424,323 1,209,920 - 4,749,999 Pooling Plains Spirit Financial Corporation 3rd Qtr. 1995 451,631 271,459 Purchase Southwest Bancshares, Inc. 3rd Qtr. 1995 180,737 149,449 - 675,000 Pooling AmeriFirst Bancorporation, Inc. 3rd Qtr. 1995 156,568 130,657 - 661,385 Pooling Estimated shares to be issued in acquisition. In addition to Mercantile common stock issued, the Corporation will assume, through an exchange, the outstanding, non-convertible preferred stock of TCBankshares, Inc. The value of the consideration will total $64 million, which includes up to 1,400,000 shares of Mercantile common stock. - ---------------------------------------------------------------------------------------------------------------------------------
4 MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES 6 Net interest income for the first quarter of 1995 was $135,164,000 compared with $128,916,000 in the year-earlier period, an increase of 4.8%. The net interest rate margin of 4.58% was up four basis points when compared with 4.54% last year. Average earning assets of $12.0 billion grew 3.9% from $11.6 billion in the first quarter of 1994, as average loan volume increased 13.0%. Other income was $52,399,000 in the first quarter of 1995, an increase of $2,863,000 or 5.8% from a year ago. Credit card fees and miscellaneous income were the only categories of non-interest income which improved in the first quarter of 1995. Miscellaneous income in the current quarter included a $5,155,000 gain on the sale of the Corporation's interest in a joint venture that provides ATM switching capabilities in the Midwest region. Non-interest expenses were down $878,000 or .8% from a year ago. Total expenses were $105,461,000 for the quarter compared with $106,339,000 last year. Reduction in expense levels resulted primarily from the realization of synergies from mergers completed in prior years. The result was an improvement in the overhead ratio to 55.51% compared with 58.83% last year, and a reduction in the other expense to average assets ratio to 3.24% from 3.36% in the first quarter of 1994. The provision for possible loan losses for the quarter was $13,617,000 compared with $8,413,000 in 1994, an increase of 61.9%. Net charge- offs for 1995 and 1994 were $13,922,000 and $11,659,000, respectively, and on an annualized basis were .64% of average loans this quarter compared with .60% last year. At March 31, 1995, the reserve for possible loan losses was $178,302,000 and 545.15% of non-performing loans compared with 371.31% last March 31 and 560.58% at year-end 1994. Non-performing loans as of March 31, 1995 were $32,707,000 or .37% of total loans compared with the year-end 1994 figures of $31,496,000 or .37% and $45,508,000 or .58% at March 31, 1994. Foreclosed assets declined to $12,594,000 compared with $13,370,000 at year's end and $35,349,000 last March 31. Earnings in the St. Louis Area (Mercantile Bank of St. Louis N.A., Mercantile Bank of Illinois N.A. and Mercantile Trust Company N.A.) were $21,592,000, down 13.3% from 1994. The first-quarter 1995 results reflected an increase of $8,140,000 in the provision for possible loan losses at Mercantile Bank of Illinois N.A., thereby significantly reducing the overall level of profitability of the St. Louis Area. Return on average assets was 1.24% for the first quarter of 1995 versus 1.46% in 1994. In the 36 Community Banks, net income was $16,592,000, an increase of 12.1%, while return on average assets was 1.36% in 1995 versus 1.34% last year. Earnings for the three banks in the Kansas City Area were $5,409,000, up 12.7% from a year ago. Return on average assets was 1.34% compared with 1.20% last year. 5 7 FINANCIAL COMMENTARY (cont'd) - --------------------------------------------------------------------------------------------------------------------------------- EXHIBIT 2 ORGANIZATIONAL CONTRIBUTION ($ IN THOUSANDS)
MARCH 31, 1995 --------------------------------------------------------------------------- KANSAS PARENT ST. LOUIS CITY COMMUNITY COMPANY AND AREA AREA BANKS ELIMINATIONS CONSOLIDATED --------- ------ --------- ----------- ------------ Net income $ 21,592 $ 5,409 $ 16,592 $ 469 $ 44,062 Average assets 6,978,673 1,609,920 4,878,262 (455,403) 13,011,452 Return on assets 1.24% 1.34% 1.36% 1.35% Net interest rate margin 4.26 4.71 4.62 4.58 Overhead ratio 55.93 56.76 52.50 55.51 Equity to assets 8.38 8.87 8.36 8.65 Reserve for possible loan losses to outstanding loans 2.02 2.09 1.94 1.99 Reserve for possible loan losses to non-performing loans 784.74 701.55 407.89 545.15 Non-performing loans to outstanding loans .26 .30 .47 .37 Non-performing assets to outstanding loans and foreclosed assets .38 .40 .62 .51 Includes the results of Mercantile Bank of St. Louis N.A., Mercantile Bank of Illinois N.A., Mercantile Trust Company N.A., Mercantile Business Credit, Inc. (asset-based lending), Mercantile Investment Services, Inc. (brokerage), Mississippi Valley Advisors Inc. (investment management) and Mississippi Valley Life Insurance Co. (credit life). - ---------------------------------------------------------------------------------------------------------------------------------
Consolidated assets of $13.1 billion were up 5.7% from last March 31. Core deposits declined by 4.6% to $8.7 billion, loans were $9.0 billion, up 13.2% from last year, and shareholders' equity of $1.1 billion was 10.5% higher than at March 31, 1994. Tier I capital to risk-adjusted assets improved to 11.86% compared with 11.67% last year, while Total capital to risk-adjusted assets was 15.61% compared with 15.70% at March 31, 1994. The following financial commentary presents a more thorough discussion and analysis of the results of operations and financial position of the Corporation for the first quarter of 1995. NET INTEREST INCOME Net interest income for the first quarter of 1995 was $135,164,000, a 4.8% increase from the $128,916,000 earned last year. This was the net result of a four-basis-point widening in the net interest rate margin to 4.58% and a 3.9% growth in average earning assets. Factors contributing to the increase in the net interest rate margin included a contraction in the levels of lower-yielding investments, growth in the high-yielding consumer loan categories, higher levels of shareholders' 6 MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES 8 equity and a decline in non-performing assets, partially offset by the continued decline in consumer deposits which were replaced by more costly purchased funds. Average loans grew by $1.0 billion or 13.0%, while investments in debt and equity securities decreased by $322,854,000 or 9.5% and short-term investments declined by $227,025,000 or 54.1%. Loan growth was broad based as average loans in the St. Louis Area banks grew by 8.4%, while volume at the Community Banks and Kansas City Area banks increased by 17.7% and 17.5%, respectively. When compared with the first quarter of 1994, average commercial loans grew by $155,851,000 or 7.8%, while average commercial real estate mortgage and construction loans increased by $77,123,000 or 5.3%. Residential mortgage loans on average grew by $442,342,000 or 17.1%, as the mix of production moved largely to adjustable-rate loans which were retained in the portfolio. Average credit card loans increased by $112,875,000 or 15.1%, due primarily to cross- selling efforts, successful targeted marketing campaigns for new accounts and selected credit limit increases. The new SBC Communications Inc. co-branded credit card should add significantly to this growth in future periods. Other consumer loans increased by $216,736,000 or 22.5%, due to strong growth in indirect auto loans, primarily in outstate Missouri production offices. - --------------------------------------------------------------------------------------------------------------------------------- EXHIBIT 3 LOANS AND LEASES ($ IN THOUSANDS)
MARCH 31 1995 1994 CHANGE ---- ---- ------ Commercial $2,261,717 $2,171,951 4.1% Real estate-commercial 1,341,608 1,312,537 2.2 Real estate-construction 213,422 145,985 46.2 Real estate-residential 3,072,345 2,578,827 19.1 Consumer 1,184,286 969,645 22.1 Credit card 878,063 732,142 19.9 Foreign 198 180 10.0 ---------- ---------- Total Loans and Leases $8,951,639 $7,911,267 13.2 ========== ========== - ---------------------------------------------------------------------------------------------------------------------------------
The $332,854,000 or 9.5% decline in average investments in debt and equity securities came largely through maturities in which the proceeds were used to fund loan growth. Short-term investments are primarily used for short-term excess liquidity or balancing the interest rate sensitivity of the Corporation, and on average decreased by $227,025,000 or 54.1% during the first quarter of 1995. Core deposits continued to contract and were replaced by more costly short-term borrowings and bank notes. Even with the 6.8% reduction in average core deposits, Mercantile remained substantially core funded at 92.78% of total deposits and 75.71% of earning assets. Changes in average core deposits for the past five quarters are shown in the Consolidated Quarterly Average Balance Sheet on Pages 16 and 17 of this report. Average non-interest bearing deposits declined by $314,076,000 or 15.5%. A reclassification of $100,000,000 of these funds to other time deposits and a decrease of $71,356,000 in cash and due from banks reduced the real loss of non-interest bearing funds to $142,720,000. Higher interest rates and, thus, larger earnings credits for those balances to pay for services largely accounted for the decline in this important source of funds. 7 9 FINANCIAL COMMENTARY (cont'd) The $675,595,000 increase in average short-term borrowings and outstanding bank notes of $250,000,000 made up for the loss of core deposits and funded loan growth. All borrowings are in accordance with current liquidity guidelines; the relative levels of short-term borrowings are expected to be reduced in the second quarter of 1995. Average shareholders' equity grew by $113,083,000 or 11.2%, due largely to net earnings retained, stock issued in the Wedge transaction, stock issued in the conversion of the capital notes which matured in April 1995 and a favorable change in the FAS 115 adjustment. The factors discussed previously are consistent with Mercantile's overall corporate policy relative to rate sensitivity and liquidity, which is to produce the optimal yield and maturity mix consistent with interest rate expectations and projected liquidity needs. The Consolidated Quarterly Average Balance Sheet, with rates earned and paid, is summarized by quarter on Pages 16 and 17. OTHER INCOME Non-interest income increased 5.8% during the first quarter of 1995 to $52,399,000. Other income is down in all categories except for credit card fees and miscellaneous income. Trust fees continued to be the largest source of non-interest income, and were $15,168,000 compared with $15,657,000 during the first quarter of 1994, a decrease of 3.1%. Exhibit 5 details the composition of trust fees for the first quarters of 1995 and 1994. Service charge income was down 5.0% or $737,000 for the first quarter of 1995, as core deposit volumes declined and some corporate customers opted to use compensating deposit balances in the higher rate environment to offset analysis charges rather than pay fees. - --------------------------------------------------------------------------------------------------------------------------------- EXHIBIT 4 OTHER INCOME ($ IN THOUSANDS)
FIRST QUARTER 1995 1994 CHANGE ---- ---- ------ Trust $15,168 $15,657 (3.1)% Service charges 13,952 14,689 (5.0) Credit card fees 6,496 5,805 11.9 Mortgage banking 1,385 2,606 (46.9) Investment banking and brokerage 1,360 2,369 (42.6) Letters of credit fees 1,518 1,521 (.2) Foreclosed property income 77 1,286 (94.0) Securities gains (losses) (43) 246 - Other 12,486 5,357 - ------- ------- Total Other Income $52,399 $49,536 5.8 ======= ======= - ---------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------- EXHIBIT 5 TRUST INCOME ($ IN THOUSANDS)
FIRST QUARTER 1995 1994 CHANGE ---- ---- ------ Personal trust-St. Louis Area banks $ 5,037 $ 4,794 5.1% Mississippi Valley Advisors Inc. 3,217 3,244 (.8) Corporate and institutional services 2,664 3,238 (17.7) Kansas City Area banks and Community Banks 4,250 4,381 (3.0) ------- ------- Total Trust Income $15,168 $15,657 (3.1) ======= ======= - ---------------------------------------------------------------------------------------------------------------------------------
8 MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES 10 Credit card fee income was $6,496,000 for the first quarter of 1995, a $691,000 or 11.9% increase from the 1994 level. Credit card income primarily represents fees charged merchants for processing credit card transactions, fees received on transactions of Mercantile cardholders and cardholders' annual fees. Exhibit 6 details credit card revenue by type for 1994 and 1995. Investment banking and brokerage fees were $1,360,000 compared with $2,369,000 last year, a decrease of 42.6%. This income is derived from transaction fees for services performed as a dealer bank for individual and corporate customers, including sales of annuities and mutual funds, profits earned on limited trading positions, and foreign exchange revenue. This source of revenue can vary depending on movements in interest rates and overall market conditions. Mortgage banking revenue declined by $1,221,000 or 46.9% from the first quarter of 1994. Exhibit 7 provides the components of mortgage banking revenue through March 31 of 1995 and 1994. During the first quarter of 1995, the Corporation recorded a gain of $5,155,000 on the sale of its interest in a joint venture that provides ATM switching capabilities in the Midwest region. Excluding that gain, total other income declined by 4.6% from the first quarter of 1994. - --------------------------------------------------------------------------------------------------------------------------------- EXHIBIT 6 CREDIT CARD INCOME ($ IN THOUSANDS)
FIRST QUARTER 1995 1994 CHANGE ---- ---- ------ Interchange fees $2,461 $2,038 20.8% Late payment fees 1,048 1,029 1.8 Annual fees 868 1,259 (31.1) Other cardholder income 1,005 868 15.8 Merchant revenue, net of related expense 1,114 611 82.3 ------ ------ Total Credit Card Income $6,496 $5,805 11.9 ====== ====== - ---------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------- EXHIBIT 7 MORTGAGE BANKING INCOME ($ IN THOUSANDS)
FIRST QUARTER 1995 1994 CHANGE ---- ---- ------ Servicing fees $1,254 $1,232 1.8% Gains on sales of loans 49 1,009 (95.1) Other 82 365 (77.5) ------ ------ Total Mortgage Banking Income $1,385 $2,606 (46.9) ====== ====== - ---------------------------------------------------------------------------------------------------------------------------------
9 11 FINANCIAL COMMENTARY (cont'd) OTHER EXPENSE Expenses other than interest expense and the provision for possible loan losses for the first quarter of 1995 declined to $105,461,000, a reduction of $878,000 or .8% from 1994. Total operating expenses declined to 3.24% of average assets compared with 3.36% last year, and the overhead ratio, defined as operating expenses as a percentage of taxable-equivalent net interest income and other income, improved to 55.51% compared with 58.83% last year. Salary expenses increased by 1.0% during the first quarter, reflecting the costs of merit increases offset by a reduction in headcount of 161. Benefit costs were up by 3.6%, due to the generally higher cost of employee benefit programs. Occupancy and equipment costs declined by 2.9% in the first quarter, reflecting productivity gains and the closing of United Postal overlapping offices during the third quarter of 1994, offset by the costs of maintaining additional offices and a consistent program of upgrading systems and equipment to further enhance productivity. Exhibit 8 details the composition of all other operating expenses, which declined from last year largely due to greater expense controls and the benefits of acquisition consolidation efforts. - --------------------------------------------------------------------------------------------------------------------------------- EXHIBIT 8 OTHER EXPENSE ($ IN THOUSANDS)
FIRST QUARTER 1995 1994 CHANGE ---- ---- ------ Salaries $ 45,795 $ 45,334 1.0% Employee benefits 12,060 11,639 3.6 -------- -------- Total Personnel Expense 57,855 56,973 1.5 Net occupancy 6,418 6,613 (2.9) Equipment 8,537 8,786 (2.8) Advertising/business development 1,663 2,334 (28.7) Postage and freight 4,011 3,724 7.7 Office supplies 2,275 2,043 11.4 Communications 1,847 1,616 14.3 Legal and professional 1,702 2,428 (29.9) Credit card 2,207 2,243 (1.6) FDIC insurance 5,291 5,512 (4.0) Foreclosed property expense 504 410 22.9 Intangible asset amortization 1,567 1,756 (10.8) Other 11,584 11,901 (2.7) -------- -------- Total Other Expense $105,461 $106,339 (.8) ======== ======== RATIOS Overhead ratio 55.51% 58.83% Other expense to average assets 3.24 3.36 - ---------------------------------------------------------------------------------------------------------------------------------
RESERVE FOR POSSIBLE LOAN LOSSES The reserve for possible loan losses was $178,302,000 or 1.99% of loans outstanding at March 31, 1995. This compared with $176,561,000 or 2.06% at year's end and $168,974,000 or 2.14% at March 31, 1994. The reserve coverage of non-performing loans was 545.15% compared with 560.58% at year-end and 371.31% last year. The provision for possible loan losses for the first quarter of 1995 was $13,617,000, which included an increase of $8,140,000 in the provision at Mercantile Bank of Illinois N.A., compared with $8,413,000 last year. The annualized ratio of net charge-offs to average loans for the first quarter was .64% compared with .60% last year, while the corresponding net charge-off figures were $13,922,000 and $11,659,000, respectively. 10 MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES 12 Credit card losses were 4.89% of average credit card loans for this quarter, compared with 4.78% in 1994. Net credit card charge-offs were $10,499,000 in 1995 compared with $8,899,000 last year. Excluding credit card losses, there were few charge-offs of any significance. Mercantile Bank of St. Louis N.A. realized a loss of $1,500,000 on a former United Postal commercial real estate credit, while UNSL recorded charge-offs of $1,400,000 on five commercial real estate loans. Mercantile evaluates the reserves of all banks on a quarterly basis to ensure the timely charge-off of loans and to determine the adequacy of those reserves. At March 31, 1995, the level of the individual Community Bank reserves as a percentage of total loans outstanding ranged from 1.08% to 6.50% with a combined ratio of 1.94%. The coverage of non-performing loans was 407.89% on a combined basis. The St. Louis Area banks combined reserve was 2.02% of loans with a resulting coverage ratio of 784.74%, while the combined reserves of the banks in the Kansas City Area were 2.09% of loans outstanding with a coverage of non-performing loans of 701.55%. Management believes the consolidated reserve of 1.99% of loans and 545.15% of non-performing loans as of March 31, 1995 was adequate based on the risks identified at such date in the respective portfolios. Financial Accounting Standard ("FAS") 114, "Accounting by Creditors for Impairment of a Loan," as amended by FAS 118, was adopted by the Corporation in the first quarter of 1995. The new standard requires an impaired loan to be measured based upon the present value of expected future cash flows discounted at the loan's effective interest rate. As of March 31, 1995, impaired loans totaled $21,728,000, for which the related reserve for possible loan losses is $2,361,000. The Corporation recognized $244,000 of interest income on these impaired loans in 1995. - --------------------------------------------------------------------------------------------------------------------------------- EXHIBIT 9 RESERVE FOR POSSIBLE LOAN LOSSES ($ IN THOUSANDS)
THREE MONTHS ENDED MARCH 31 1995 1994 ---- ---- BEGINNING BALANCE $176,561 $172,220 PROVISION 13,617 8,413 CHARGE-OFFS (17,464) (15,711) RECOVERIES 3,542 4,052 -------- -------- NET CHARGE-OFFS (13,922) (11,659) ACQUIRED RESERVES 2,046 - -------- ------- ENDING BALANCE $178,302 $168,974 ======== ======== LOANS AND LEASES March 31 balance $8,951,639 $7,911,267 ========== ========== Average balance $8,761,223 $7,756,263 ========== ========== RATIOS Reserve balance to outstanding loans 1.99% 2.14% Reserve balance to non-performing loans 545.15 371.31 Net charge-offs to average loans .64 .60 Earnings coverage of net charge-offs 5.90x 6.19x - ---------------------------------------------------------------------------------------------------------------------------------
11 13 FINANCIAL COMMENTARY (cont'd) NON-PERFORMING ASSETS Non-performing loans (non-accrual and renegotiated loans) were $32,707,000 or .37% of total loans at March 31, 1995 compared with $31,496,000 or .37% at December 31, 1994, and $45,508,000 or .58% at March 31, 1994. Foreclosed assets were $12,594,000 at March 31, 1995 compared with $13,370,000 at year's end and $35,349,000 last year. The ratio of non-performing assets to outstanding loans and foreclosed assets was .51% at March 31, 1995 compared with .52% at December 31, 1994 and 1.02% last year. Loans past due 90 days and still accruing interest were $18,775,000 at March 31, 1995 versus $18,362,000 at year-end and $14,150,000 at March 31, 1994. As noted in Exhibit 10, non-accrual loans increased slightly from the year-end level, yet were down significantly from last year. There were no significant additions to or deletions from non-accrual loans during the first quarter of 1995. All loans classified as renegotiated were paying in accordance with their modified terms at March 31, 1995. Loans past due 90 days and still accruing interest were near the same level as year-end 1994, and consisted largely of credit card loans and residential real estate mortgage loans. Impaired loans, consisting of non-accrual and renegotiated commercial and commercial real estate loans, were $21,728,000 at March 31, 1995 and averaged $21,868,000 for the first quarter. - --------------------------------------------------------------------------------------------------------------------------------- EXHIBIT 10 NON-PERFORMING ASSETS ($ IN THOUSANDS)
MAR. 31 DEC. 31 MAR. 31 1995 1994 1994 ------- ------- ------- NON-ACCRUAL LOANS Commercial $ 6,341 $ 4,110 $10,409 Real estate-commercial 12,934 12,920 14,475 Real estate-construction 308 129 279 Real estate-residential 7,094 7,159 9,302 Consumer 2,643 1,476 1,949 ------- ------- ------- Total Non-accrual Loans 29,320 25,794 36,414 RENEGOTIATED LOANS 3,387 5,702 9,094 ------- ------- ------- TOTAL NON-PERFORMING LOANS $32,707 $31,496 $45,508 ======= ======= ======= FORECLOSED ASSETS Foreclosed real estate $10,601 $ 8,748 $31,565 In-substance foreclosures - 2,473 2,628 Other foreclosed assets 1,993 2,149 1,156 ------- ------- ------- TOTAL FORECLOSED ASSETS $12,594 $13,370 $35,349 ======= ======= ======= TOTAL NON-PERFORMING ASSETS $45,301 $44,866 $80,857 ======= ======= ======= PAST-DUE LOANS (90 DAYS OR MORE) $18,775 $18,362 $14,150 ======= ======= ======= RATIOS Non-performing loans to outstanding loans .37% .37% .58% Non-performing assets to outstanding loans and foreclosed assets .51 .52 1.02 Non-performing assets to total assets .35 .35 .65 - ---------------------------------------------------------------------------------------------------------------------------------
In accordance with FAS 114, in-substance foreclosures have been reclassified to loans. This reclassification did not impact the Company's financial condition or results of operations. 12 MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES 14 CAPITAL RESOURCES Mercantile maintains a strong capital base, which provides a solid foundation for anticipated future asset growth and promotes depositor and investor confidence. Capital management is a continuous process at Mercantile, and ensures that capital is provided for current needs and anticipated growth. Mercantile's strong capital position has enabled it to profitably expand its asset and deposit bases, while maintaining capital ratios at levels stronger than those of other quality banking organizations and well in excess of regulatory standards. At March 31, 1995, shareholders' equity was $1.1 billion, an increase of 10.5% from March 31, 1994. Net earnings retained, conversion of capital notes to equity, a favorable change in the FAS 115 adjustment, and stock issued in the Wedge transaction and under various employee benefit plans accounted for the increase. Equity represented 8.65% of assets compared with 8.27% at March 31, 1994. Significant capital ratios and intangible assets are summarized in Exhibit 11, while Exhibit 2 details the equity capital ratios of the St. Louis Area, Kansas City Area and Community Banks in aggregate. The Corporation has restructured its long-term debt over the past two years and there are no maturities before 1999, other than the 8% convertible subordinated capital notes which were largely converted to common stock, with the balance paid in cash on April 1, 1995. - --------------------------------------------------------------------------------------------------------------------------------- EXHIBIT 11 RISK-BASED CAPITAL ($ IN THOUSANDS)
MAR. 31 DEC. 31 MAR. 31 1995 1994 1994 ------- ------- ------- Capital Tier I $1,073,141 $1,039,508 $ 950,537 Total 1,412,812 1,375,924 1,279,073 Risk-adjusted assets 9,049,486 8,783,690 8,146,986 Tier I capital to risk-adjusted assets 11.86% 11.83% 11.67% Total capital to risk-adjusted assets 15.61 15.66 15.70 Leverage 8.29 8.24 7.55 Double leverage 109.14 107.95 110.01 Long-term debt to total capitalization 19.78 20.72 22.30 Intangible assets $60,576 $64,415 $70,422 - ---------------------------------------------------------------------------------------------------------------------------------
During the first quarter of 1995, Mercantile repurchased 672,500 shares of its common stock via a designated broker dealer at an average cost of $36.22 per share. It is contemplated that the stock will be reissued in the Plains Spirit Financial Corporation acquisition and in conjunction with the 1994 Stock Incentive Plan. 13 15 FINANCIAL COMMENTARY (cont'd) On February 9, 1995, the Board of Directors declared a quarterly cash dividend of $.33 per share which was paid April 1, 1995. This represented an increase of 17.9% over the prior quarterly rate of $.28 per share and a 34.02% payout ratio of first-quarter 1995 earnings. Book value per share was $24.87 at March 31, 1995 compared with $22.98 a year earlier, an increase of 8.2%. Further information relating to dividends, as well as quarterly stock prices, is included in the Investor Information summary on Page 24 of this report. 14 MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES 16 CONDENSED CONSOLIDATED QUARTERLY STATEMENT OF INCOME (THOUSANDS EXCEPT PER SHARE DATA)
1994 1995 1ST QTR. 2ND QTR. 3RD QTR. 4TH QTR. 1ST QTR. -------- -------- -------- -------- -------- INTEREST INCOME Interest and fees on loans and leases $157,099 $162,386 $172,611 $183,453 $196,914 Investments in debt and equity securities 46,468 45,559 43,989 43,427 43,773 Short-term investments 3,608 2,236 1,753 2,795 2,751 -------- -------- -------- -------- -------- Total Interest Income 207,175 210,181 218,353 229,675 243,438 Tax-equivalent adjustment 2,309 2,288 2,235 2,282 2,431 -------- -------- -------- -------- -------- TAXABLE-EQUIVALENT INTEREST INCOME 209,484 212,469 220,588 231,957 245,869 INTEREST EXPENSE Deposits 66,310 65,929 67,803 71,407 79,523 Borrowed funds 11,949 13,956 17,549 26,088 28,751 -------- -------- -------- -------- -------- Total Interest Expense 78,259 79,885 85,352 97,495 108,274 -------- -------- -------- -------- -------- TAXABLE-EQUIVALENT NET INTEREST INCOME 131,225 132,584 135,236 134,462 137,595 PROVISION FOR POSSIBLE LOAN LOSSES 8,413 8,045 8,541 12,393 13,617 OTHER INCOME Trust 15,657 15,917 14,270 13,980 15,168 Service charges 14,689 14,724 15,103 14,025 13,952 Credit card fees 5,805 5,802 6,325 6,777 6,496 Mortgage banking 2,606 1,580 1,337 1,633 1,385 Investment banking and brokerage 2,369 2,263 1,827 1,598 1,360 Securities gains (losses) 246 208 (53) 25 (43) Other 8,164 6,952 8,517 7,854 14,081 -------- -------- -------- -------- -------- Total Other Income 49,536 47,446 47,326 45,892 52,399 OTHER EXPENSE Personnel expense 56,973 56,474 56,098 57,460 57,855 Net occupancy and equipment 15,399 14,812 14,915 15,274 14,955 Other 33,967 33,715 34,766 34,706 32,651 -------- -------- -------- -------- -------- Total Other Expense 106,339 105,001 105,779 107,440 105,461 -------- -------- -------- -------- -------- TAXABLE-EQUIVALENT INCOME BEFORE INCOME TAXES 66,009 66,984 68,242 60,521 70,916 INCOME TAXES Income taxes 23,834 23,461 23,944 24,654 24,423 Tax-equivalent adjustment 2,309 2,288 2,235 2,282 2,431 -------- -------- -------- -------- -------- Adjusted Income Taxes 26,143 25,749 26,179 26,936 26,854 -------- -------- -------- -------- -------- NET INCOME $ 39,866 $ 41,235 $ 42,063 $ 33,585 $ 44,062 ======== ======== ======== ======== ======== NET INCOME PER SHARE $.90 $.92 $.94 $.75 $.97 SIGNIFICANT RATIOS Return on assets 1.26% 1.32% 1.34% 1.06% 1.35% Return on equity 15.73 15.86 15.70 12.25 15.64
MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES 15 17 CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEET ($ IN THOUSANDS)
1994 1ST QTR. 2ND QTR. 3RD QTR. ------------------ ------------------ ------------------ VOLUME RATE VOLUME RATE VOLUME RATE ------ -------- ------ -------- ------ -------- ASSETS Earning Assets Loans and leases, net of unearned income Commercial $ 1,996,109 6.35% $ 2,079,810 6.92% $ 2,103,546 7.52% Real estate-commercial 1,322,596 7.63 1,316,007 8.07 1,297,635 8.25 Real estate-construction 143,455 7.46 164,641 8.06 183,451 8.75 Real estate-residential 2,586,084 7.31 2,586,499 7.32 2,715,910 7.43 Consumer 962,274 8.29 991,281 8.27 1,089,898 8.37 Credit card 745,456 16.64 729,883 16.10 743,139 15.98 Foreign 289 5.54 184 6.52 336 7.14 ----------- ----------- ----------- Total Loans and Leases 7,756,263 8.14 7,868,305 8.29 8,133,915 8.52 Investments in debt and equity securities Trading 10,516 5.44 6,028 6.57 12,736 4.24 Taxable 3,139,879 5.49 3,127,737 5.39 3,003,285 5.41 Tax-exempt 246,475 7.99 243,642 8.08 238,457 8.00 ----------- ----------- ----------- Total 3,396,870 5.67 3,377,407 5.59 3,254,478 5.60 Short-term investments 419,882 3.44 183,702 4.87 178,089 3.94 ----------- ----------- ----------- Total Earning Assets 11,573,015 7.24 11,429,414 7.44 11,566,482 7.63 Non-earning Assets 1,081,065 1,071,865 1,024,733 ----------- ----------- ----------- Total Assets $12,654,080 $12,501,279 $12,591,215 =========== =========== =========== LIABILITIES Acquired Funds Deposits Non-interest bearing $ 2,024,486 $ 1,887,537 $ 1,850,796 Interest bearing demand 1,716,824 1.71 1,714,673 1.70 1,673,158 1.72 Money market accounts 1,658,069 2.83 1,646,808 3.00 1,629,590 3.18 Savings 911,930 2.31 928,529 2.30 909,527 2.33 Consumer time certificates under $100,000 3,427,224 4.28 3,324,631 4.23 3,242,802 4.37 Other time 33,201 2.75 33,587 3.38 34,204 3.17 ----------- ----------- ----------- Total Core Deposits 9,771,734 3.16 9,535,765 3.16 9,340,077 3.26 Time certificates $100,000 and over 502,870 3.68 478,162 3.91 455,381 4.43 Foreign 41,399 4.51 80,465 4.15 136,111 4.80 ----------- ----------- ----------- Total Purchased Deposits 544,269 3.74 558,627 3.95 591,492 4.51 ----------- ----------- ----------- Total Deposits 10,316,003 3.20 10,094,392 3.21 9,931,569 3.36 Short-term borrowings 835,432 2.97 870,773 3.88 1,113,539 4.32 Bank notes - - - - - - Long-term debt 298,915 7.68 292,487 7.54 289,218 7.62 ----------- ----------- ----------- Total Acquired Funds 11,450,350 3.32 11,257,652 3.41 11,334,326 3.60 Other liabilities 190,145 203,643 185,020 SHAREHOLDERS' EQUITY 1,013,585 1,039,984 1,071,869 ----------- ----------- ----------- Total Liabilities and Shareholders' Equity $12,654,080 $12,501,279 $12,591,215 =========== =========== =========== SIGNIFICANT RATIOS Net interest rate spread 3.92% 4.03% 4.03% Net interest rate margin 4.54 4.64 4.68 Taxable-equivalent basis.
16 MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES 18 CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEET ($ IN THOUSANDS)
1994 1995 4TH QTR. 1ST QTR. ------------------ ------------------ VOLUME RATE VOLUME RATE ------ -------- ------ -------- ASSETS Earning Assets Loans and leases, net of unearned income Commercial $ 2,125,707 8.10% $ 2,151,960 8.55% Real estate-commercial 1,298,728 8.68 1,337,652 8.76 Real estate-construction 200,378 9.02 205,522 9.25 Real estate-residential 2,846,666 7.63 3,028,426 7.71 Consumer 1,153,740 8.33 1,179,010 8.27 Credit card 785,363 15.37 858,331 16.25 Foreign 387 7.24 322 8.70 ----------- ----------- Total Loans and Leases 8,410,969 8.76 8,761,223 9.02 Investments in debt and equity securities Trading 14,443 5.10 12,375 5.27 Taxable 2,874,802 5.57 2,813,067 5.72 Tax-exempt 232,015 8.15 248,574 8.12 ----------- ----------- Total 3,121,260 5.76 3,074,016 5.91 Short-term investments 207,207 5.40 192,857 5.71 ----------- ----------- Total Earning Assets 11,739,436 7.90 12,028,096 8.18 Non-earning Assets 947,411 983,356 ----------- ----------- Total Assets $12,686,847 $13,011,452 =========== =========== LIABILITIES Acquired Funds Deposits Non-interest bearing $ 1,597,373 $ 1,710,410 Interest bearing demand 1,648,799 1.83 1,636,996 1.91 Money market accounts 1,534,224 3.39 1,439,121 3.86 Savings 867,308 2.39 861,001 2.41 Consumer time certificates under $100,000 3,227,788 4.60 3,329,670 4.91 Other time 34,807 3.41 129,387 5.55 ----------- ----------- Total Core Deposits 8,910,299 3.45 9,106,585 3.76 Time certificates $100,000 and over 477,853 4.87 502,328 5.37 Foreign 176,189 5.59 206,123 6.20 ----------- ----------- Total Purchased Deposits 654,042 5.06 708,451 5.61 ----------- ----------- Total Deposits 9,564,341 3.59 9,815,036 3.92 Short-term borrowings 1,524,727 5.20 1,511,027 5.75 Bank notes 50,000 6.24 106,667 6.26 Long-term debt 287,755 7.63 285,031 7.54 ----------- ----------- Total Acquired Funds 11,426,823 3.97 11,717,761 4.33 Other liabilities 163,741 167,023 SHAREHOLDERS' EQUITY 1,096,283 1,126,668 ----------- ----------- Total Liabilities and Shareholders' Equity $12,686,847 $13,011,452 =========== =========== SIGNIFICANT RATIOS Net interest rate spread 3.93% 3.85% Net interest rate margin 4.58 4.58
17 19 CONSOLIDATED STATEMENT OF INCOME (THOUSANDS EXCEPT PER SHARE DATA)
THREE MONTHS ENDED MARCH 31 1995 1994 ---- ---- INTEREST INCOME Interest and fees on loans and leases $196,914 $157,099 Investments in debt and equity securities Trading 163 126 Taxable 40,201 42,971 Tax-exempt 3,409 3,371 -------- -------- Total 43,773 46,468 Due from banks-interest bearing 333 1,272 Federal funds sold and repurchase agreements 2,418 2,336 -------- -------- Total Interest Income 243,438 207,175 INTEREST EXPENSE Interest bearing deposits 76,327 65,843 Foreign deposits 3,196 467 Short-term borrowings 21,707 6,213 Bank notes 1,670 - Long-term debt 5,374 5,736 -------- -------- Total Interest Expense 108,274 78,259 -------- -------- NET INTEREST INCOME 135,164 128,916 PROVISION FOR POSSIBLE LOAN LOSSES 13,617 8,413 -------- -------- NET INTEREST INCOME AFTER PROVISION FOR POSSIBLE LOAN LOSSES 121,547 120,503 OTHER INCOME Trust 15,168 15,657 Service charges 13,952 14,689 Credit card fees 6,496 5,805 Mortgage banking 1,385 2,606 Investment banking and brokerage 1,360 2,369 Securities gains (losses) (43) 246 Other 14,081 8,164 -------- -------- Total Other Income 52,399 49,536 OTHER EXPENSE Salaries 45,795 45,334 Employee benefits 12,060 11,639 Net occupancy 6,418 6,613 Equipment 8,537 8,786 Other 32,651 33,967 -------- -------- Total Other Expense 105,461 106,339 -------- -------- INCOME BEFORE INCOME TAXES 68,485 63,700 INCOME TAXES 24,423 23,834 -------- -------- NET INCOME $ 44,062 $ 39,866 ======== ======== PER SHARE DATA Average common shares outstanding 45,632,256 44,435,837 Net income $.97 $.90 Dividends declared .33 .28 Based on weighted average common shares outstanding.
18 MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES 20 CONSOLIDATED BALANCE SHEET (THOUSANDS)
MARCH 31 DECEMBER 31 MARCH 31 1995 1994 1994 -------- ----------- -------- ASSETS Cash and due from banks $ 608,016 $ 691,999 $ 567,766 Due from banks-interest bearing 23,139 28,338 102,777 Federal funds sold and repurchase agreements 123,884 112,514 61,529 Investments in debt and equity securities Trading 11,542 14,299 6,622 Available-for-sale 287,225 273,743 318,838 Held-to-maturity (Estimated fair value of $2,724,408, $2,679,075 and $3,066,462, respectively) 2,755,422 2,759,987 3,057,298 ----------- ----------- ----------- Total 3,054,189 3,048,029 3,382,758 Loans held-for-sale 46,153 18,064 72,530 Loans and leases, net of unearned income 8,905,486 8,556,162 7,838,737 Reserve for possible loan losses (178,302) (176,561) (168,974) ----------- ----------- ----------- Net Loans and Leases 8,773,337 8,397,665 7,742,293 Bank premises and equipment 215,250 208,773 204,675 Due from customers on acceptances 5,985 6,609 9,979 Other assets 271,689 262,550 296,322 ----------- ----------- ----------- Total Assets $13,075,489 $12,756,477 $12,368,099 =========== =========== =========== LIABILITIES Deposits Non-interest bearing $ 1,391,131 $ 1,530,347 $ 1,474,179 Interest bearing 7,915,343 7,691,235 8,185,723 Foreign 239,499 219,135 48,767 ----------- ----------- ----------- Total Deposits 9,545,973 9,440,717 9,708,669 Federal funds purchased and repurchase agreements 1,507,053 1,382,519 575,454 Other short-term borrowings 174,213 290,180 551,802 Bank notes 250,000 100,000 - Long-term debt 278,669 287,345 293,572 Bank acceptances outstanding 5,985 6,609 9,979 Other liabilities 183,171 149,730 205,735 ----------- ----------- ----------- Total Liabilities 11,945,064 11,657,100 11,345,211 Commitments and contingent liabilities - - - MARCH 31 DEC. 31 MARCH 31 1995 1994 1994 -------- ------- -------- SHAREHOLDERS' EQUITY Preferred stock-no par value Shares authorized 5,000 5,000 5,000 Shares issued - - - - - - Common stock-$5.00 par value Shares authorized 100,000 100,000 70,000 Shares issued 46,227 44,879 44,510 231,134 224,397 222,552 Capital surplus 176,158 167,492 162,502 Retained earnings 750,407 710,442 637,834 Treasury stock, at cost 765 94 - (27,274) (2,954) - ----------- ----------- ---------- Total Shareholders' Equity 1,130,425 1,099,377 1,022,888 ----------- ----------- ----------- Total Liabilities and Shareholders' Equity $13,075,489 $12,756,477 $12,368,099 =========== =========== ===========
MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES 19 21 CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY ($ IN THOUSANDS)
COMMON STOCK --------------------- TOTAL OUTSTANDING CAPITAL RETAINED TREASURY SHAREHOLDERS' SHARES DOLLARS SURPLUS EARNINGS STOCK EQUITY ----------- ------- ------- -------- -------- ------------- BALANCE AT DECEMBER 31, 1993, AS RESTATED 44,378,477 $221,893 $161,802 $612,065 $ - $ 995,760 Net income 39,866 39,866 Dividends declared Mercantile Bancorporation Inc.-$.28 per share (12,018) (12,018) Pooled companies prior to acquisition (372) (372) Issuance of common stock Employee incentive plans 115,686 579 533 1,112 Convertible notes 534 3 11 14 Net fair value adjustment for available-for-sale securities (1,707) (1,707) Pre-merger transactions of pooled companies 15,423 77 156 233 ---------- -------- -------- -------- -------- ---------- BALANCE AT MARCH 31, 1994 44,510,120 $222,552 $162,502 $637,834 $ - $1,022,888 ========== ======== ======== ======== ======== ========== BALANCE AT DECEMBER 31, 1994, AS REPORTED 43,207,524 $216,506 $170,083 $684,615 $ (2,954) $1,068,250 Adjustment to reflect pooling-of-interests 1,578,107 7,891 (2,591) 25,827 - 31,127 ---------- -------- --------- -------- ------- ---------- BALANCE AT DECEMBER 31, 1994, AS RESTATED 44,785,631 224,397 167,492 710,442 (2,954) 1,099,377 Net income 44,062 44,062 Dividends declared-$.33 per share (15,066) (15,066) Issuance of common stock Acquisition of Wedge Bank 969,954 4,850 1,649 7,314 13,813 Employee incentive plans 47,634 232 82 38 352 Convertible notes 331,075 1,655 6,935 8,590 Net fair value adjustment for available-for-sale securities 3,655 3,655 Purchase of treasury stock (672,500) (24,358) (24,358) ---------- -------- -------- -------- -------- ---------- BALANCE AT MARCH 31, 1995 45,461,794 $231,134 $176,158 $750,407 $(27,274) $1,130,425 ========== ======== ======== ======== ======== ==========
20 MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES 22 CONSOLIDATED STATEMENT OF CASH FLOWS (THOUSANDS)
THREE MONTHS ENDED MARCH 31 1995 1994 ---- ---- OPERATING ACTIVITIES Net income $ 44,062 $ 39,866 Adjustments to reconcile net income to net cash provided by operating activities Provision for possible loan losses 13,617 8,413 Depreciation and amortization 6,816 6,978 Provision for deferred income taxes (2,955) 561 Net change in trading securities 2,757 9,113 Net change in loans held-for-sale (28,089) 46,817 Net change in accrued interest receivable 650 1,090 Net change in accrued interest payable 3,834 (4,523) Net change in accrued taxes payable 26,041 27,493 Other, net (2,568) (11,273) --------- ---------- Net Cash Provided by Operating Activities 64,165 124,535 INVESTING ACTIVITIES Investments in debt and equity securities, other than trading securities Purchases (208,351) (402,397) Proceeds from maturities 276,301 345,778 Proceeds from sales of: Available-for-sale securities 1,190 1,020 Securities from acquired entities - 74,014 Net change in loans and leases (231,294) (247,296) Purchases of loans and leases (48,289) (20,063) Proceeds from sales of loans and leases 21,713 69,331 Purchases of premises and equipment (12,316) (7,254) Proceeds from sales of premises and equipment 668 491 Proceeds from sales of foreclosed property 3,566 4,476 Cash and cash equivalents from acquisitions, net of cash paid 7,968 - Other, net 3,543 4,050 --------- ---------- Net Cash Used by Investing Activities (185,301) (177,850) FINANCING ACTIVITIES Net change in non-interest bearing, savings, interest bearing demand and money market deposit accounts (360,906) (217,167) Net change in time certificates of deposit under $100,000 99,866 (114,857) Net change in time certificates of deposit $100,000 and over 94,878 46,926 Net change in other time deposits 98,189 (4,198) Net change in foreign deposits 20,364 22,682 Net change in short-term borrowings (19,985) (16,391) Issuance of bank notes 150,000 - Issuance of long-term debt - 75,000 Principal payments on long-term debt (10) (54,211) Cash dividends paid (15,066) (12,390) Proceeds from issuance of common stock 352 1,195 Purchase of treasury stock (24,358) - Other, net - 150 -------- ---------- Net Cash Provided (Used) by Financing Activities 43,324 (273,261) --------- ---------- DECREASE IN CASH AND CASH EQUIVALENTS (77,812) (326,576) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 832,851 1,058,648 --------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 755,039 $ 732,072 ========= ==========
MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES 21 23 BANKS AND OTHER SUBSIDIARIES
TOTAL ASSETS MAR. 31, 1995 BANK MAIN OFFICE (THOUSANDS) - ---- ----------- ------------- Mercantile Bank of St. Louis N.A. St. Louis, MO $6,631,526 Mercantile Bank of Kansas City Kansas City, MO 771,959 Mercantile Bank of Kansas Overland Park, KS 600,768 United Savings Bank Lebanon, MO 510,429 Mercantile Bank of Illinois Alton, IL 482,046 Mercantile Bank of Joplin Joplin, MO 386,086 Mercantile Bank of Northern Iowa Waterloo, IA 359,619 Mercantile Bank of Springfield Springfield, MO 334,123 Mercantile Bank of St. Joseph St. Joseph, MO 320,595 Mercantile Bank of Illinois N.A. Hartford, IL 270,861 Mercantile Bank of Lawrence Lawrence, KS 222,213 Mercantile Bank of Jefferson County High Ridge, MO 216,844 Mercantile Bank of Topeka Topeka, KS 202,482 Mercantile Bank of Cape Girardeau Cape Girardeau, MO 177,502 Mercantile Bank of the Mineral Area Farmington, MO 160,849 Mercantile Bank of Franklin County Washington, MO 160,734 Mercantile Bank of North Central Missouri Macon, MO 154,208 Mercantile Bank of West Central Missouri Sedalia, MO 151,727 Mercantile Bank of Lake of the Ozarks Eldon, MO 127,503 Mercantile Bank of Poplar Bluff Poplar Bluff, MO 102,095 Mercantile Bank of Mt. Vernon Mt. Vernon, IL 93,760 Mercantile Bank of Centralia Centralia, IL 90,628 TOTAL ASSETS MAR. 31, 1995 BANK MAIN OFFICE (THOUSANDS) - ---- ----------- ------------- Mercantile Bank of Missouri Valley Richmond, MO $86,680 Mercantile Bank of Stoddard/Bollinger Counties Dexter, MO 77,268 Mercantile Bank of Trenton Trenton, MO 75,972 Mercantile Bank of Monett Monett, MO 74,923 Mercantile Bank of Phelps County Rolla, MO 68,941 Mercantile Bank of Flora Flora, IL 68,625 Mercantile Bank of Perryville Perryville, MO 67,253 Mercantile Bank of Pike County Bowling Green, MO 58,267 Mercantile Bank of Boone County Columbia, MO 52,873 Mercantile Bank of East Central Missouri Montgomery City, MO 51,054 Mercantile Bank of Memphis Memphis, MO 50,802 Mercantile Bank of Doniphan Doniphan, MO 50,089 Mercantile Bank of Ste. Genevieve Ste. Genevieve, MO 48,969 Mercantile Bank of Northwest Missouri Maryville, MO 41,860 Mercantile Bank of Willow Springs Willow Springs, MO 39,153 Mercantile Bank of Wright County Hartville, MO 39,128 Mercantile Bank of Sikeston Sikeston, MO 37,887 Mercantile Bank of Carlyle Carlyle, IL 37,328 Mercantile Bank of Plattsburg Plattsburg, MO 37,224 Mercantile Trust Company N.A. St. Louis, MO 9,238 - ---------------------------------------------------------------------------------------------------------------------------------
ASSET-BASED LENDING Mercantile Business Credit, Inc. 12443 Olive Blvd. St. Louis, MO 63141-6432 BROKERAGE SERVICES Mercantile Investment Services, Inc. Mercantile Tower St. Louis, MO 63101-1643 CREDIT LIFE INSURANCE Mississippi Valley Life Insurance Co. Mercantile Tower St. Louis, MO 63101-1643 INSURANCE AGENCY Mercantile Insurance Services, Inc. Mercantile Tower St. Louis, MO 63101-1643 INVESTMENT MANAGEMENT Mississippi Valley Advisors Inc. Mercantile Tower St. Louis, MO 63101-1643 OFF-SHORE BRANCH Mercantile Bank of St. Louis N.A. Cayman Branch Grand Cayman, B.W.I. PENDING AFFILIATIONS Central Mortgage Bancshares, Inc. Kansas City, MO TCBankshares, Inc. North Little Rock, AR Plains Spirit Financial Corporation Davenport, IA Southwest Bancshares, Inc. Springfield, MO AmeriFirst Bancorporation, Inc. Sikeston, MO 22 MERCANTILE BANCORPORATION INC. 24 DIRECTORS AND EXECUTIVE OFFICERS DIRECTORS RICHARD P. CONERLY Retired Chairman Orion Capital Inc. HARRY M. CORNELL, JR. Chairman and Chief Executive Officer Leggett & Platt, Inc. EARL K. DILLE Retired President Union Electric Company J. CLIFF EASON President, Network Services Southwestern Bell Telephone Company BERNARD A. EDISON Director Emeritus Edison Brothers Stores, Inc. WILLIAM A. HALL Assistant to the Chairman Hallmark Cards, Inc. THOMAS A. HAYS Deputy Chairman The May Department Stores Company WILLIAM G. HECKMAN Chairman Emeritus Arch Mineral Corporation THOMAS H. JACOBSEN Chairman and Chief Executive Officer Mercantile Bancorporation Inc. CHARLES H. PRICE II Chairman Mercantile Bank of Kansas City HARVEY SALIGMAN Managing Partner Cynwyd Investments CRAIG D. SCHNUCK Chairman and Chief Executive Officer Schnuck Markets, Inc. ROBERT L. STARK Dean University of Kansas Regents Center PATRICK T. STOKES President Anheuser-Busch, Inc. FRANCIS A. STROBLE Retired Chief Financial Officer Monsanto Company JOHN A. WRIGHT President and Chief Executive Officer Big River Minerals Corp. [FN] Member of Audit Committee Member of Compensation and Management Development Committee Member of Executive Committee Member of Nominating and Board Affairs Committee Member of Community Relations Committee Member of Credit Policy Committee - ------------------------------------------------------------------------ EXECUTIVE OFFICERS THOMAS H. JACOBSEN Chairman and Chief Executive Officer RALPH W. BABB, JR. Vice Chairman W. RANDOLPH ADAMS Senior Executive Vice President and Chief Financial Officer JOHN Q. ARNOLD Senior Executive Vice President and Chief Credit Officer JOHN H. BEIRISE President and Chief Institutional Banking Officer Mercantile Bank of St. Louis N.A. RICHARD H. GOLDBERG Executive Vice President Operations MICHAEL J. GORMAN Chairman Mercantile Bank of St. Louis N.A. RICHARD C. KING President and Chief Executive Officer Mercantile Bank of Kansas City JOHN W. MCCLURE Senior Executive Vice President Community Banking JON P. PIERCE Executive Vice President Human Resources JON W. BILSTROM General Counsel and Secretary PATRICK STRICKLER Executive Vice President Public Affairs ARTHUR G. HEISE Senior Vice President and Auditor MICHAEL T. NORMILE Senior Vice President Finance and Control KENNETH E. SCHUTTE Senior Vice President and Treasurer MERCANTILE BANCORPORATION INC. 23 25 INVESTOR INFORMATION NEW YORK STOCK EXCHANGE: MTL SELECTED DATA
MARCH 31 1995 1994 ---- ---- Market Price $36 1/2 $31 7/8 Yield 3.62% 3.51% Price Earnings Ratio 10.20x 10.92x Book Value $24.87 $22.98 Shares Outstanding Average 45,632,256 44,435,837 Period-end 45,461,794 44,510,120 Shareholders of Record 14,163 14,185 Average Daily Volume 55,337 62,279 - ----------------------------------------------------------------------------------------------------------------------
COMMON STOCK INFORMATION
MARKET PRICE AVERAGE ----------------------------------- DAILY DIVIDEND HIGH LOW CLOSE VOLUME DECLARED ---- --- ----- ------ -------- 1995 1ST QUARTER $37 1/4 $31 1/4 $36 1/2 55,337 $.33 1994 1st Quarter $34 1/8 $29 7/8 $31 7/8 62,279 $.28 2nd Quarter 38 1/8 31 1/8 35 1/8 48,340 .28 3rd Quarter 39 1/4 34 7/8 36 7/8 47,814 .28 4th Quarter 36 7/8 29 1/2 31 1/4 53,259 .28 - ----------------------------------------------------------------------------------------------------------------------- Generally appears as MercBcpMO or MercBc in newspaper stock tables.
DIVIDEND REINVESTMENT PLAN AND DIVIDEND DIRECT DEPOSIT The Dividend Reinvestment Plan provides shareholders of record a regular way of investing cash dividends in additional shares at an average market price and/or investing optional cash payments without payment of brokerage commissions or service charges. Dividend Direct Deposit is a timesaving method of receiving cash dividends through automatic deposit on date of payment to a checking, savings or money market account at any financial institution which participates in an Automated Clearing House. If you wish to participate in or want further information concerning the Dividend Reinvestment Plan or Dividend Direct Deposit, please contact KeyCorp Shareholder Services, Inc., One Mercantile Center, Suite 2120, St. Louis, MO 63101-1673, telephone 314-241-4002. DIVIDEND DATES Dividends are normally paid the first business day of January, April, July and October. 24 MERCANTILE BANCORPORATION INC. 26 DEBT SECURITIES OUTSTANDING (THOUSANDS)
MARCH 31 1995 -------- 7.625% Subordinated Notes, due 2002 $150,000 6.375% Subordinated Notes, due 2004 75,000 9.000% Mortgage-backed Notes, due 1999 53,450
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THOMSON STANDARD MOODY'S FITCH BANKWATCH & POOR'S ------- ----- --------- -------- MERCANTILE BANCORPORATION INC. Issuer Rating B Commercial Paper P-2 TBW-1 A-2 Subordinated Debt 7.625% Subordinated Notes, due 2002 Baa1 BBB+ BBB MERCANTILE BANK OF ST. LOUIS N.A. Bank Notes A1/P-1 A 6.375% Subordinated Notes, due 2004 A3 A- A- BBB+ 9.000% Mortgage-backed Notes, due 1999 AAA Certificates of Deposit TBW-1 A-/A-2 Letters of Credit TBW-1 A-/A-2 - ---------------------------------------------------------------------------------------------------------------------------------
INVESTOR RELATIONS Ralph W. Babb, Jr. Vice Chairman Mercantile Bancorporation Inc. P.O. Box 524 St. Louis, MO 63166-0524 GENERAL COUNSEL Thompson & Mitchell One Mercantile Center St. Louis, MO 63101-1693 TRANSFER AGENT KeyCorp Shareholder Services, Inc. P.O. Box 6477 Cleveland, OH 44101-1477 INDEPENDENT ACCOUNTANTS KPMG Peat Marwick LLP 1010 Market Street St. Louis, MO 63101-2085 25 27 APPENDIX There is a bar-graph titled "COMMON STOCK PRICE RANGE" on page 24 of the printed First Quarter Report. The graph plots Fiscal Quarters to Dollars on the X and Y axis respectively. This graph shows five quarters of market price ranges from the first quarter of 1994 to the first quarter of 1995. Each bar indicates the dollar range of the stock price for the period. The high price is printed above and the low price below the bar. These figures correspond with the Common Stock Information table also on page 24. EX-27 6 ARTICLE 9 FINANCIAL DATA SCHEDULE
9 1,000 3-MOS DEC-31-1995 JAN-01-1995 MAR-31-1995 608,016 23,139 123,884 11,542 287,225 2,755,422 2,724,408 8,951,639 178,302 13,075,489 9,545,973 1,681,266 189,156 278,669 0 0 203,860 926,565 13,075,489 196,914 43,773 2,751 243,438 79,523 108,274 135,164 13,617 (43) 105,461 68,485 44,062 0 0 44,062 .97 .97 4.58 29,320 18,775 3,387 0 176,561 17,464 3,542 178,302 0 0 0 Information only reported at fiscal year-end date.
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