-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OHkx0spAX1iIGtSAGz4/cLUKCK90nAWo4gRBRGEpd+hPFVk8VO/dZigafo7/rpWG EZhy4V4GOQGIKAt9Ijf6yw== 0000829750-97-000005.txt : 19970520 0000829750-97-000005.hdr.sgml : 19970520 ACCESSION NUMBER: 0000829750-97-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PEOPLES HERITAGE FINANCIAL GROUP INC CENTRAL INDEX KEY: 0000829750 STANDARD INDUSTRIAL CLASSIFICATION: STATE COMMERCIAL BANKS [6022] IRS NUMBER: 010137770 STATE OF INCORPORATION: ME FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-16947 FILM NUMBER: 97608817 BUSINESS ADDRESS: STREET 1: ONE PORTLAND SQ STREET 2: P O BOX 9540 CITY: PORTLAND STATE: ME ZIP: 04112 BUSINESS PHONE: 2077618500 MAIL ADDRESS: STREET 1: P O BOX 9540 CITY: PORTLAND STATE: ME ZIP: 04112-9540 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 1997 OR [ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 COMMISSION FILE NUMBER: 0-16947 PEOPLES HERITAGE FINANCIAL GROUP, INC. (Exact name of Registrant as specified in its charter) Maine 01-0137770 State or other jurisdiction of (I.R.S. Employer incorporation or organization Identification No.) One Portland Square, Portland, Maine 04112 (Address of principal executive offices) (Zip Code) (207) 761-8500 (Registrant's telephone number, including area code) Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes X No The number of shares outstanding of each of the Registrant's classes of common stock as of May 1, 1997 is: Common stock, par value $.01 per share 27,891,306 (Class) (Outstanding) INDEX PEOPLES HERITAGE FINANCIAL GROUP, INC. AND SUBSIDIARIES PART I. FINANCIAL INFORMATION Item 1. Financial Statements (unaudited). Consolidated Balance Sheets - March 31, 1997 and December 31, 1996. Consolidated Statements of Income - Three months ended March 31, 1997 and 1996. Consolidated Statements of Changes in Shareholders' Equity - Three months ended March 31, 1997 and 1996. Consolidated Statements of Cash Flows - Three months ended March 31, 1997 and 1996. Notes to Consolidated Financial Statements. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. PART II. OTHER INFORMATION Item 1. Legal proceedings. Item 2. Changes in securities. Item 3. Defaults upon senior securities. Item 4. Submission of matters to a vote of security holders. Item 5. Other information. Item 6. Exhibits and reports on Form 8-K.
PEOPLES HERITAGE FINANCIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In Thousands, Except Number of Shares and Per Share Data) (Unaudited) March 31, December 31, 1997 1996 Assets Cash and due from banks $ 249,781 $ 276,995 Federal funds sold 24,000 83,000 Securities available for sale, at market value 1,172,472 1,045,069 Loans held for sale, market value $118,610 and $103,790 respectively 118,417 103,270 Loans and leases: Residential real estate mortgages 1,166,347 1,176,874 Commercial real estate mortgages 956,975 962,375 Commercial business loans and leases 496,805 477,402 Consumer loans and leases 1,033,001 1,037,949 3,653,128 3,654,600 Less: Allowance for loan and lease losses 66,601 67,488 Net loans and leases 3,586,527 3,587,112 Premises and equipment 72,269 73,956 Goodwill and other intangibles 69,781 71,649 Mortgage servicing rights 27,080 33,314 Other assets 137,709 124,033 $5,458,036 $5,398,398 Liabilities and Shareholders' Equity Deposits: Regular savings $ 765,538 $ 760,340 NOW and money market accounts 1,016,072 1,023,448 Certificates of deposit (including certificates of $100 or more of $238,596 and $232,880, respectively) 1,806,519 1,796,521 Demand deposits 557,907 604,980 Total deposits 4,146,036 4,185,289 Federal funds purchased 17,000 --- Securities sold under repurchase agreements 195,985 197,005 Borrowings from the Federal Home Loan Bank of Boston 464,673 470,080 Other borrowings 17,610 23,884 Other liabilities 68,896 85,130 Total liabilities 4,910,200 4,961,388 Company obligated, mandatorily redeemable securities of subsidiary trust holding solely parent junior subordinated debentures 100,000 --- Shareholders' Equity: Preferred stock (par value $0.01 per share, 5,000,000 shares authorized, none issued) --- --- Common stock (par value $0.01 per share, 100,000,000 shares authorized, 28,576,885 shares issued) 286 286 Paid-in capital 271,790 271,790 Retained earnings 183,307 170,855 Net unrealized gain (loss) on securities available for sale (5,294) (582) Treasury stock at cost (152,163 shares and 355,385 shares, respectively) (2,253) (5,339) Total shareholders' equity 447,836 437,010 $5,458,036 $5,398,398 See accompanying Notes to Consolidated Financial Statements.
PEOPLES HERITAGE FINANCIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (In Thousands, Except Number of Shares and Per Share Data) (Unaudited) Three Months Ended March 31, 1997 1996 Interest and dividend income: Interest on loans and leases $ 83,742 $ 67,930 Interest on mortgage-backed investments 10,424 3,496 Interest on other investments 7,118 8,904 Dividends on equity securities 639 424 Total interest and dividend income 101,923 80,754 Interest expense: Interest on deposits 35,358 29,568 Interest on borrowed funds 8,852 6,047 Total interest expense 44,210 35,615 Net interest income 57,713 45,130 Provision for loan and lease losses --- 450 Net interest income after provision for loan and lease losses 57,713 44,689 Noninterest income: Customer services 5,339 3,269 Mortgage banking services 4,231 3,364 Trust and investment advisory services 1,887 1,644 Net securities gains (losses) 3 504 Other noninterest income 874 688 12,334 9,469 Noninterest expenses: Salaries and employee benefits 21,183 18,238 Occupancy 3,810 3,297 Data processing 3,657 2,798 Equipment 2,927 2,008 Amortization of goodwill and deposit premiums 1,881 925 Advertising and marketing 1,520 993 Distributions on securities of subsidiary trust 1,510 --- Merger expenses --- 453 Other noninterest expenses 6,746 5,870 43,234 34,582 Income before income tax expense 26,813 19,576 Applicable income tax expense 9,803 6,970 Net income $ 17,010 $ 12,606 Weighted average shares outstanding 28,355,812 25,128,427 Earnings per share $ 0.60 $ 0.50 See accompanying Notes to Consolidated Financial Statements.
PEOPLES HERITAGE FINANCIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (In Thousands, Except Number of Shares and Per Share Data) (Unaudited) Net Par Paid in Retained Unrealized Treasury Value Capital Earnings Gain (loss) Stock Total Balances at December 31, 1995 $256 $224,268 $134,443 $ 3,763 $ (7,805) $354,925 Treasury stock issued for employee benefit plans (83,971 shares at an average price of $8.75) -- -- (215) -- 1,250 1,035 Change in unrealized gains (losses) on securities available for sale, net of tax -- -- -- (2,956) -- (2,956) Net income -- -- 12,606 -- -- 12,606 Cash dividends $0.14 -- -- (3,455) -- -- (3,455) Balances at March 31, 1996 $256 $224,268 $143,379 $ 807 $ (6,555) $362,155 Balances at December 31, 1996 $286 $271,790 $170,855 $ (582) $ (5,339) $437,010 Treasury stock issued for employee benefit plans (207,222 shares at an average price of $11.52) -- -- 494 -- 3,086 3,580 Change in unrealized gains (losses) on securities available for sale, net of tax -- -- -- (4,712) -- (4,712) Net income -- -- 17,010 -- -- 17,010 Cash dividends $0.18 -- -- (5,052) -- -- (5,052) Balances at March 31, 1997 $286 $271,790 $183,307 $ (5,294) $ (2,253) $447,836 See accompanying Notes to Consolidated Financial Statements.
PEOPLES HERITAGE FINANCIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In Thousands) (Unaudited) Three Months Ended March 31, 1997 1996 Cash flows from operating activities: Net income $ 17,010 $ 12,606 Adjustments to reconcile net income to net cash provided by operating activities: Provision for loan losses --- 450 Provision for depreciation 2,494 1,689 Amortization of goodwill and other intangibles 1,868 923 Net (increase) decrease in net deferred tax assets 3,894 (452) Net (gains) losses realized from sales of other real estate owned (169) 54 Net (gains) losses realized from sales of securities and consumer loans (3) (504) Net (gains) realized from sales of loans held for sale (a component of mortgage banking services) (2,366) 510 Net decrease (increase) in mortgage servicing rights 6,234 (2,878) Proceeds from sales of loans held for sale 334,191 233,363 Residential loans originated and purchased for sale (346,972) (251,079) Net decrease (increase) in interest and dividends receivable and other assets (14,046) 276 Net increase (decrease) in other liabilities (17,911) 3,493 Net cash provided (used) by operating activities $ (15,776) $ (1,549) Cash flows from investing activities: Proceeds from sales of securities available for sale $ 52,742 $ 31,143 Proceeds from maturities and principal repayments of securities available for sale 121,317 150,528 Purchases of securities available for sale (308,888) (186,647) Net (increase) decrease in loans and leases 1,651 (239,570) Premiums paid on deposits purchased --- (18,231) Net additions to premises and equipment (807) (2,477) Proceeds from sales of other real estate owned 1,189 545 Net (increase) decrease in repossessed assets owned 378 498 Net cash provided (used) by investing activities $ (132,418) $ (264,211) See accompanying Notes to Consolidated Financial Statements.
PEOPLES HERITAGE FINANCIAL GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS - continued (In Thousands) (Unaudited) Three Months Ended March 31, 1997 1996 Cash flows from financing activities: Net increase (decrease ) in deposits $ (39,253) $ 150,289 Net increase (decrease) in securities sold under repurchase agreements (1,020) (16,283) Proceeds from Federal Home Loan Bank of Boston borrowings 90,911 110,000 Payments on Federal Home Loan Bank of Boston borrowings (96,318) (71,002) Net increase (decrease) in other borrowings (6,274) (765) Proceeds from issuance of subsidiary trust 98,406 --- Sale of treasury stock 3,580 1,035 Cash dividends paid to shareholders (5,052) (3,455) Net cash provided by financing activities $ 44,980 $ 169,819 Increase (decrease) in cash and cash equivalents $ (103,214) $ (95,941) Cash and cash equivalents at beginning of period 359,995 289,191 Cash and cash equivalents at end of period $ 256,781 $ 193,250 Supplemental disclosures of information: Interest paid on deposits and borrowings $ 45,129 $ 34,002 Income taxes paid 3,004 371 Income tax refunds 852 38 Noncash investing transactions: Loans transferred to other real estate owned 2,538 790 Loans originated to finance the sales of other real estate owned 3,604 971 Increases (decreases) resulting from SFAS No. 115: Securities available for sale (7,429) (4,588) Deferred income taxes - liabilities (2,717) (1,632) Net unrealized gain (loss) on securities available for sale (4,712) (2,956) See accompanying Notes to Consolidated Financial Statements.
PEOPLES HERITAGE FINANCIAL GROUP, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS March 31, 1997 Note 1 - Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with generally accepted accounting principles and predominant practices within the banking industry. The Company has not changed its accounting and reporting policies from those disclosed in its 1996 Annual Report on Form 10-K. In the opinion of management, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation of the consolidated financial statements have been included. The results of operations and other data for the three months ended March 31, 1997 are not necessarily indicative of results that may be expected for any other interim period or the entire year ending December 31, 1997. Certain amounts in prior periods have been reclassified to conform to the current presentation. PEOPLES HERITAGE FINANCIAL GROUP, INC. AND SUBSIDIARIES PART I - ITEM 2 Management's Discussion and Analysis Results have been restated for the acquisition of Bank of New Hampshire on April 2, 1996, which was accounted for as a pooling of interests. The results of Family Bank ("Family"), which was accounted for as a purchase, have been included from the date of acquisition, December 6, 1996. On January 31, 1997, the Company issued, through a subsidiary trust, $100 million of 9.06% of Company obligated mandatorily redeemable securities (the Trust Capital Securities). See Capital for further details. SUMMARY Peoples Heritage Financial Group (the "Company") reported net income of $17.0 million, or $.60 per share, for the first quarter of 1997. This compares with $12.6 million, or $.50 per share, for the first quarter of 1996 and $15.5 million, or $.63 per share, for the fourth quarter of 1996. First quarter return on equity was 15.55%, which compared to 14.06% in the first quarter of 1996 and 16.83% in the fourth quarter of 1996. The first quarter return on assets was 1.28%, which compared to 1.24% for the same period in 1996 and 1.32% in the fourth quarter. Earnings and profitability, when compared with the same period last year, increased due to 29% revenue growth, which was generated both internally and through acquisitions. Related expenses increased only 25%, as the Company improved efficiency. During the period, the Company's efficiency ratio, which measures overhead as a percent of revenue, improved from 63.08% in 1996 to 59.57% in 1997. Compared to the fourth quarter, earnings increased 10%, primarily due to the contribution of two additional months resulting from the acquisition of Family. However, earnings per share and return on equity declined somewhat. These declines were due to higher average equity levels in the first quarter as a result of the shares issued to acquire Family late in the fourth quarter and the issuance of $100 million of Trust Capital Securities on January 31, 1997. The Company expects that the $100 million share buyback authorized in the second quarter of 1997 will reduce average equity levels in future quarters. It is anticipated that such repurchases will have a favorable impact on return on equity and earnings per share. Selected quarterly data is provided in Table 1.
TABLE 1 - Selected Quarterly Data 1997 1996 (Dollars in Thousands) First Fourth Third Second First Net interest income $ 57,713 $ 50,659 $ 47,944 $ 46,831 $ 45,139 Provision for loan losses --- --- --- 450 450 Net interest income after loan loss provision 57,713 50,659 47,944 46,381 44,689 Non-interest income (excluding securities transactions) 12,331 9,975 9,805 9,196 8,965 Securities transactions 3 4 (1) --- 504 Non-interest expenses (excluding SAIF assessment and merger charges) 43,234 37,649 34,404 34,934 34,129 SAIF assessment and merger charges --- --- 1,852 4,652 453 Income before income taxes 26,813 22,989 21,492 15,991 19,576 Income tax provision 9,803 7,450 7,300 5,848 6,970 Net income $ 17,010 $ 15,539 $ 14,192 $ 10,143 $ 12,606 Earnings per share $ 0.60 $ 0.63 $ 0.56 $ 0.40 $ 0.50 Return on average assets 1.28% 1.32% 1.29% 0.93% 1.24% Return on average equity 15.55% 16.83% 15.21% 11.20% 14.06% Efficiency ratio (1) 59.57% 62.09% 59.58% 62.35% 63.08% (1) Excludes one-time SAIF assessment and merger charges and expenses related to company obligated, mandatorily redeemable securities of subsidiary trust holding solely parent junior subordinated debentures.
TABLE 2 - Average Balances, Yields and Rates 1997 1996 First Fourth Average Yield/(1) Average Yield/(1) Balance Interest Rate Balance Interest Rate (Dollars in Thousands) Loans and leases (2): Residential real estate mortgages $1,327,467 $ 25,954 7.82% $1,180,109 $23,521 7.97% Commercial real estate mortgages 966,083 22,870 9.60 858,009 20,767 9.63 Commercial loans and leases 479,822 11,467 9.69 445,582 10,581 9.45 Consumer loans and leases 1,026,128 23,553 9.31 955,172 22,343 9.31 Total loans and leases 3,799,500 83,844 8.91 3,438,872 77,212 8.93 Securities available for sale (3) 1,091,909 17,795 6.56 845,828 13,373 6.29 Federal funds sold 25,340 430 6.88 29,859 467 6.22 Total earning assets 4,916,749 102,069 8.38 4,314,559 91,052 8.40 Nonearning assets 471,757 368,153 Total assets $5,388,506 $4,682,712 Interest-bearing deposits: Regular savings 760,705 5,013 2.67 642,188 4,351 2.70 NOW and money market accounts 980,957 6,166 2.55 902,006 5,899 2.60 Certificates of deposit 1,808,264 24,179 5.42 1,548,624 21,360 5.49 Total interest-bearing deposits 3,549,926 35,358 4.04 3,092,818 31,610 4.07 Borrowed funds 689,014 8,853 5.21 634,938 8,557 5.36 Total interest bearing liabilities 4,238,940 44,211 4.23 3,727,756 40,167 4.29 Demand deposits 549,552 509,547 Other liabilities (3) 105,182 79,146 Securities of subsidiary trust 50,806 --- Shareholders' equity (3) 444,026 366,263 Total liabilities and shareholders' equity $5,388,506 $4,682,712 Net earning assets $ 677,809 $ 586,803 Net interest income (fully-taxable equivalent) 57,858 50,885 Less: fully-taxable equivalent adjustments (145) (226) Net interest income $57,713 50,659 Net interest rate spread (fully-taxable equivalent) 4.15% 4.11% Net interest margin (fully-taxable equivalent) 4.73% 4.69% (1) Annualized. (2) Loans and leases includes loans held for sale. (3) Excludes effect of unrealized gains or losses on securities available for sale. TABLE 2 - (Cont'd) 1996 1996 Third Second Average Yield/(1) Average Yield/(1) Balance Interest Rate Balance Interest Rate (Dollars in Thousands) Loans and leases (2): Residential real estate mortgages $1,117,953 $ 22,105 7.91% $1,128,536 $ 22,272 7.89% Commercial real estate mortgages 820,851 20,127 9.75 828,358 19,876 9.65 Commercial loans and leases 428,292 10,236 9.51 423,868 10,137 9.62 Consumer loans and leases 867,533 20,422 9.36 821,400 19,152 9.38 Total loans and leases 3,234,629 72,890 8.96 3,202,162 71,437 8.97 Securities available for sale (3) 799,857 12,668 6.30 794,510 12,418 6.29 Federal funds sold 16,129 186 4.59 39,622 452 4.59 Total earning assets 4,050,615 85,744 8.42 4,036,294 84,307 8.40 Nonearning assets 343,924 354,128 Total assets $4,394,539 $4,390,422 Interest-bearing deposits: Regular savings 599,793 4,089 2.71 595,325 4,014 2.71 NOW and money market accounts 859,895 5,607 2.59 864,797 5,532 2.57 Certificates of deposit 1,430,091 19,781 5.50 1,462,168 20,242 5.57 Total interest-bearing deposits 2,889,779 29,477 4.06 2,922,290 29,788 4.10 Borrowed funds 602,873 8,085 5.34 584,974 7,466 5.13 Total interest bearing liabilities 3,492,652 37,562 4.28 3,507,264 37,254 4.27 Demand deposits 463,251 423,588 Other liabilities (3) 65,805 94,342 Securities of subsidiary trust --- --- Shareholders' equity (3) 372,831 365,228 Total liabilities and shareholders' equity $4,394,539 $4,390,422 Net earning assets $ 557,963 $ 529,030 Net interest income (fully-taxable equivalent) 48,182 47,053 Less: fully-taxable equivalent adjustments (238) (222) Net interest income $ 47,944 $ 46,831 Net interest rate spread (fully-taxable equivalent) 4.14% 4.13% Net interest margin (fully-taxable equivalent) 4.73% 4.69% (1) Annualized. (2) Loans and leases includes loans held for sale. (3) Excludes effect of unrealized gains or losses on securities available for sale. TABLE 2 (Cont'd) 1996 First Average Yield/(1) Balance Interest Rate (Dollars in Thousands) Loans and leases (2): Residential real estate mortgages $ 955,643 $ 19,459 8.14% Commercial real estate mortgages 821,072 20,360 9.97 Commercial loans and leases 402,900 9,887 9.87 Consumer loans and leases 779,603 18,362 9.47 Total loans and leases 2,959,218 68,068 9.25 Securities available for sale (3) 752,285 11,646 6.23 Federal funds sold 93,232 1,235 5.33 Total earning assets 3,804,735 80,949 8.56 Nonearning assets 272,408 Total assets $4,077,143 Interest-bearing deposits: Regular savings 575,680 3,979 2.78 NOW and money market accounts 847,984 5,745 2.72 Certificates of deposit 1,406,904 19,843 5.67 Total interest-bearing deposits 2,830,568 29,567 4.20 Borrowed funds 450,311 6,048 5.40 Total interest bearing liabilities 3,280,879 35,615 4.37 Demand deposits 395,453 Other liabilities (3) 43,838 Securities of subsidiary trust --- Shareholders' equity (3) 356,973 Total liabilities and shareholders' equity $4,077,143 Net earning assets $ 523,856 Net interest income (fully-taxable equivalent) 45,334 Less: fully-taxable equivalent adjustments (195) Net interest income $ 45,139 Net interest rate spread (fully-taxable equivalent) 4.19% Net interest margin (fully-taxable equivalent) 4.79% (1) Annualized. (2) Loans and leases includes loans held for sale. (3) Excludes effect of unrealized gains or losses on securities available for sale.
EARNING ASSETS The discussion and analysis that follows is based upon information set forth in Table 2 regarding average balances, yields and rates. Loans Average loans of $3.8 billion rose $840.3 million from a year earlier and $360.6 million from the fourth quarter primarily as a result of the Family acquisition and internal growth in consumer and residential loans. Loans as a percent of average earning assets fell from 79.7% at the end of 1996 to 77.3%, due to the 54.4% ratio of Family at the time of acquisition. The Company expects to increase Family's percentage of loans to earning assets in the future as this acquisition is assimilated. Average residential real estate loans (which includes loans held for sale) of $1.3 billion grew 38.9% from last year and 12.5% from the fourth quarter, primarily due to $189.6 million of Family loans included as of December 6, 1996 and $216.4 million obtained as part of the acquisition on February 16, 1996 of five branches from Fleet Bank NH (the "Branch Acquisition"). Excluding these acquisitions, annual growth was 8.7% and annualized growth from the fourth quarter was 1.3%. The growth represents an increase in originations from the retail and correspondent networks. First quarter originations were $428.1 million, of which $339.1 million represented correspondent production. This compares to $268.4 million and $182.5 million, respectively, in the first quarter of 1996 and $386.2 million and $268.4 million, respectively, in the fourth quarter. Mortgage originations, particularly refinancings, are highly dependent upon interest rates. At March 31, 1997, 46% of portfolio loans were fixed rate and 54.0% were variable rate. Portfolio adjustable rate loans are generally indexed 3.50% above the 1-year constant maturity treasury (CMT), after an initial below market rate. Average commercial loans of $479.8 million grew 19% from last year and 8% from the fourth quarter, primarily due to $49.9 million of Family loans included from December 6, 1996. Excluding Family, annual growth of 9% resulted from the Company's focus on lending to sound, small and medium size business customers within its geographic markets. Excluding Family, outstanding commercial loans were unchanged as compared with the fourth quarter, reflecting normal seasonal activity in northern New England. The average yield on commercial loans declined from 9.87% during the first quarter of 1996 to 9.69% during the first quarter of 1997 reflecting increased competition. Average commercial real estate loans of $966.1 million increased 18% from last year and 13% from the fourth quarter, primarily due to $151.2 million of Family loans included as of December 6, 1996. Excluding Family, commercial real estate loans declined 2% from last year and 1% from the fourth quarter, as management continues to reduce commercial real estate as a percent of total loans. The average yield on commercial real estate loans declined from 9.97% during the first quarter of 1996 to 9.60% during the first quarter of 1997 reflecting increased competition. Average consumer loans grew 30% from last year and 6% from the fourth quarter, primarily due to $79.1 million of Family loans included from December 6, 1996. Excluding Family, annual growth of 20% resulted primarily from an increase in home equity and indirect installment loans. Mobile home loan blanaces continue to decline as the Company has de- emphasized this product. The average yield on consumer loans declined from 9.47% during the first quarter of 1996 to 9.31% during the first quarter of 1997 reflecting both a change in the mix of consumer loans and increased competition. Securities Available for Sale and Other Earning Assets The Company's $1.2 billion securities portfolio at March 31, 1997 consisted of AAA rated securities, primarily mortgage- backed securities and U.S. Treasury securities or equivalent rated securities. Average securities increased 45% from last year and 29% from the fourth quarter, primarily as a result of $393.5 million of Family securities included as of December 6, 1996. The average securities yield was 6.56% for the first quarter of 1997, as compared to 6.23% for the first quarter of 1996 and 6.29% for the fourth quarter. The increased yield was due to reinvesting maturing U.S. Treasury securities into higher-yielding mortgage-backed securities, higher market interest rates and the addition of higher yielding securities at Family Bank. At March 31, 1997, the available-for-sale portfolio had a $5.3 million net unrealized loss, compared to a net unrealized gain of $1.2 million and a net unrealized loss of $1.1 million at March 31, 1996 and December 31, 1996, respectively. The decline in market value was due to increases in market interest rates in the first quarter. The Company does not have any intention at this time to sell these securities and believes that the declines are temporary. DEPOSITS AND OTHER FUNDING SOURCES Deposits Average deposits of $4.1 billion increased 27% from the first quarter of last year and 14% from the fourth quarter primarily as a result of $774.6 million of Family deposits and $160.9 million of deposits acquired in conjunction with the Branch Acquisition on February 16, 1996. At March 31, 1997, the ratio of loans to deposits stood at 88%, down from 90% at March 31, 1996 but up from 87% at December 31, 1996. This is primarily the result of the acquisition of Family which had a loan to deposit ratio of 60.6%. Average transaction accounts (demand deposit, NOW and money market accounts) of $1.5 billion were up 23% from last year and 8% from the fourth quarter. Excluding Family and the Branch Acquisition, annual growth in transaction accounts was 3%, which was due to the Company's increased marketing of these lower cost accounts. Excluding Family, transaction accounts declined 3% during the first quarter compared with the fourth quarter of 1996 due to normal seasonal outflows. The average rate paid on NOW and money market accounts declined from 2.72% during the first quarter of 1996 to 2.55% during the first quarter of 1997 due to an increase in lower yielding NOW accounts. Average savings and time deposit balances of $2.6 billion increased 29.6% from last year and 17.3% from the fourth quarter primarily due to $685.9 million of Family deposits. The average rate paid on savings accounts has remained relatively flat, while the rate paid on time deposits has slightly decreased. Other Funding Sources The Company's primary source of funding, other than deposits, is the Federal Home Loan Bank ("FHLB"). Average FHLB borrowings for the first quarter were $464.1 million, compared with $256.1 for the first quarter of last year and $431.0 for the fourth quarter. FHLB borrowings increased from the first quarter of 1996 because growth in earning assets exceeded growth in deposits, while the increase from the fourth quarter of 1996 was attributable primarily to the Family acquisition. FHLB borrowings are secured by a blanket lien on qualified collateral consisting primarily of loans with first mortgages secured by 1-4 family properties, certain unencumbered securities and other qualified assets. At March 31, 1997, FHLB borrowings amounted to at $464.7 million. The Company's estimated additional borrowing capacity with the FHLB at March 31, 1997 was $803.4 million. ASSET-LIABILITY MANAGEMENT Net interest income, the Company's primary source of revenue, is affected by changes in interest rates as well as fluctuations in the level and duration of assets and liabilities contained on the Company's balance sheet. The impact of changes in interest rates on the Company's net interest income represents its level of interest rate risk. The Company analyzes the future impact on net interest income as a result of changing interest rates based on projections, including anticipated business activity, anticipated changes in interest rates and other variables, which are adjusted periodically. The results of this analysis indicates that the Company is relatively rate neutral within a twelve month period. Management estimates that an instantaneous 2% change in interest rates would have less than a 3% impact on net interest income over a twelve month period. This assessment is based on management's ability to exert some control with respect to the extent and timing of the change in rates paid on the Company's interest-bearing deposits. The Company's methods for analyzing the effects of changes in interest rates on its operations incorporate assumptions concerning, among other things, the amortization and prepayment of assets and liabilities. Management believes that these assumptions approximate actual experience and considers them reasonable, although the actual amortization and repayment of assets and liabilities may vary substantially. The primary objective of the Company's asset-liability management is to maximize net interest income while maintaining acceptable levels of interest-rate sensitivity. The Liquidity and Funds Management Committee sets specific rate-sensitivity limits for the Company. The Committee monitors and adjusts the Company's exposure to changes in interest rates to achieve predetermined risk targets that it believes are consistent with current and expected market conditions. Management strives to minimize the negative impact on net interest income caused by changes in interest rates. At this time, management believes the Company's asset-liability mix is sufficiently balanced within a broad range of interest rate scenarios to minimize the impact of significant rate movements. The Company controls its interest rate risk by managing the level and duration of certain on-balance-sheet assets and liabilities. The Company does not currently use off-balance- sheet instruments (derivatives) to manage its interest rate sensitivity position. The Company has, however, purchased interest rate floors tied to the CMT index to mitigate the prepayment risk associated with mortgage servicing rights (see " Non- Interest Income" for further details). The value of the CMT floors is inversely related to movements in interest rates, while the value of the servicing rights is positively related to movements in interest rates. When rates decline, people are more likely to refinance their mortgages, which reduces the value of the servicing rights to the Company. When rates increase, the opposite is true. While not accorded hedge accounting treatment due to the uncertainty of strict correlation, in the event that interest rates fall, any resulting increase in the value of the CMT floors are intended to offset, in part, the prospective impairment of the servicing rights. The CMT floors are carried at market value of $112 thousand and are included in other assets. The CMT floors reduced mortgage banking income by $166 thousand, $94 thousand, and $128 thousand in the first quarter of 1997, the first quarter of 1996, and the fourth quarter of 1996, respectively. NET INTEREST INCOME The Company's taxable-equivalent net interest income, which represented 83% of revenues, was $57.9 million in the first quarter, up 28% from the first quarter of 1996 and 14% from the fourth quarter. The increases primarily reflect higher earning assets as a result of the Family and Branch acquisitions. Table 3 shows the changes from the first quarter of 1996 to the first quarter of 1997 in tax equivalent net interest income by category due to rate and volume.
TABLE 3 - Rate Volume Analysis Three Months Ended March 31, 1997 vs. Three Months Ended March 31, 1996 Quarterly Change from Previous year due to: Total Volume Rate (1) Change (Dollars in Thousands) Interest income: Loans and leases $19,168 $(3,392) $15,776 Securities available for sale 5,214 935 6,149 Federal funds sold (892) 87 (805) Total interest income 23,490 (2,370) 21,120 Interest expense: Deposits Regular savings 1,268 (234) 1,034 NOW and money market accounts 893 (472) 421 Certificates of deposit 5,615 (1,279) 4,336 Total deposits 7,776 (1,985) 5,791 Borrowed funds 3,179 (374) 2,805 Total interest expense 10,955 (2,359) 8,596 Net interest income (fully taxable equivalent) $12,535 $ (11) $12,524 (1) Includes changes in interest income and expense not due solely to volume or rate changes.
The first quarter of 1997 net interest margin was 4.73% compared to 4.79% in the first quarter of 1996 and 4.69% in the fourth quarter. The 6 basis point annual decline was due primarily to the acquisition of Family, whose net interest margin was significantly lower than the Company's. Securities made up 41% of Family's earning assets at the date of acquisition. It is anticipated that the Company's net interest margin will benefit as the Company is able to deploy those securities into higher yielding loans. In addition, the Company 's net interest income benefited by approximately $1.1 million from the issuance of $100.0 million of Trust Capital Securities on January 31, 1997. NON-INTEREST INCOME First quarter non-interest income of $12.3 million increased 30% from the first quarter of 1996 and 24% from the fourth quarter. The increases were attributable to the Family and Branch acquisitions, as well as internal initiatives to increase non-interest income. Customer services income of $5.3 million increased 63% from the first quarter of last year and 20% from the fourth quarter. Excluding Family, the 2% increase was attributable to growth in the number of transaction accounts and an increase in ATM charges. Growth from the fourth quarter was primarily the result of the acquisition of Family. Mortgage banking services income of $4.2 million increased 26% from last year and 37% from the fourth quarter. The first quarter of 1997 included a $1.3 million gain from the sale of servicing rights, compared to $200 thousand in the first quarter of 1996 and $236 thousand in the fourth quarter. The gain in the first quarter of 1997 resulted from the sale of $11.3 million of mortgage servicing rights related to $766.5 million of residential mortgages serviced for investors. The Company expects to continue to sell servicing rights periodically in the future in order to manage the size of its servicing asset. Mortgage servicing rights amounted to $27.1 million at March 31, 1997, which was 17% higher than a year earlier, but 19% lower than at year end. See Table 4 for details.
TABLE 4 - Mortgage Banking At or for the Three Months Ended March 31, December 31, September 30, June 30, March 31, 1997 1996 1996 1996 1996 (Dollars in Thousands) Residential mortgages serviced for investors at end of period $3,346,804 $3,227,659 $2,953,213 $2,819,545 $2,701,552 Residential mortgage sales income $ 1,113 $ 1,722 $ 1,419 $ 1,550 $ 1,332 Residential mortgage servicing income 1,865 1,132 1,247 1,621 1,832 Gain on sale of mortgage servicing 1,253 236 649 --- 200 Total $ 4,231 $ 3,090 $ 3,315 $ 3,171 $ 3,364
Trust and investment advisory services income of $1.9 million increased 15% from the first quarter of 1996 and 6% from the fourth quarter. Assets under management amounted to $1.2 billion at March 31, 1997, an increase of $16.4 million from December 31, 1996. The Company recorded securities gains of $3 thousand during the first quarter of 1997 as compared to $504 thousand in the first quarter of 1996 and $4 thousand in the fourth quarter. NON-INTEREST EXPENSE Non-interest expense of $43.2 million increased 25% from the first quarter of 1996 and 15% from the fourth quarter primarily as a result of the Family acquisition and the issuance of the Trust Capital Securities. Excluding these two items, non- interest expense would have decreased 1% and 3%, respectively, as a result of efficiencies created in the Bank of New Hampshire transaction. Reflecting this, the first quarter efficiency ratio, which excludes distributions on the Trust Capital Securities, fell to 59.57%. This compares to 63.08% in the first quarter of 1996 and 62.09% in the fourth quarter. Salaries and benefits expense of $21.2 million increased 16% from last year and 10% from the fourth quarter. Excluding Family, salaries and benefits would have increased 2% from last year and would have been unchanged as compared with the fourth quarter. First quarter full-time equivalent employees were 2,365, compared to 2,003 for the same period last year and 2,307 for the fourth quarter. Data processing expense increased 31% from last year. In addition to Family, much of this increase was due to the fact that Bank of New Hampshire data processing was outsourced in the second quarter of 1996. Accordingly, the salaries, occupancy, and other costs of those operations are now data processing expense. Occupancy expense increased 16% from the first quarter of last year and was 28% higher than the fourth quarter, due primarily to the acquisition of Family. At March 31, 1997, the Company had 132 full-service banking offices, of which 7 were supermarket branches. This compared to 111 and 2 at March 31, 1996, respectively, and 132 and 6 at December 31, 1996, respectively. Equipment expense increased 46% from the first quarter of last year and was 28% higher than the fourth quarter, due primarily to Family as well as the expansion of the Company's branch and ATM networks and continued investments in computer-related technology. Amortization of goodwill and deposit premiums during the first quarter of 1997 increased 103% from the first quarter of 1996 and 30% from the fourth quarter. The increases were directly related to the Branch Acquisition during the first quarter of 1996 and the purchase of Family during the fourth quarter of 1996. Advertising and marketing expenses increased 53% from the first quarter of 1996 and was 7% higher than the fourth quarter. The increases were related in large part to the addition of Family but also reflected the Company's efforts to promote its products and services in an increasingly competitive market for financial services.
TABLE 5 - Other Non-Interest Expenses 1997 1996 1996 1996 1996 First Fourth Third Second First Quarter Quarter Quarter Quarter Quarter (Dollars in Thousands) Postage and freight $1,070 $ 765 $ 825 $ 673 $ 815 Telephone 1,005 1,215 921 838 677 Office supplies 824 1,009 755 677 677 Deposits and other assessments 372 111 2,270 (1) 324 345 Collection and carrying costs of non-performing assets 213 189 502 378 504 Other 3,262 3,284 2,191 4,339 2,852 $6,746 $6,573 $7,464 $7,229 $5,870 (1) Third quarter 1996 includes a $1.9 million one-time Savings Association Insurance Fund ("SAIF") assessment.
TAXES The first quarter effective tax rate of 37% compares to 36% in the first quarter of 1996 and 32% in the fourth quarter. The most significant factors are the timing of Maine investment tax credits and increased non-deductible goodwill as a result of the Family acquisition. ASSET QUALITY As shown in Table 6, nonperforming assets were $51.1 million at March 31, 1997, which represented 0.94% of total assets. This compares favorably to $53.9 million or 1.27% at March 31, 1996 and $54.3 million or 1.01% at December 31, 1996. The declines were due primarily to continued workout efforts on non- performing loans, sales of other real estate owned ("OREO") properties and fewer loans being placed on non-accrual status as a result of the strong economy.
TABLE 6 -- Nonperforming Assets March 31, Dec. 31, Sept.30, June 30, March 31, 1997 1996 1996 1996 1996 (Dollars in Thousands) Residential real estate loans: Nonaccrual loans $ 5,053 $ 3,867 $ 3,901 $ 5,032 $ 6,089 Accruing loans which are 90 days overdue 3,886 5,560 3,528 2,238 3,800 Total 8,939 9,427 7,429 7,270 9,889 Commercial real estate mortgages: Nonaccrual loans 15,854 15,270 16,233 15,628 16,917 Accruing loans which are 90 days overdue --- --- --- --- 128 Troubled debt restructurings 1,473 1,581 1,691 1,878 1,793 Total 17,327 16,851 17,924 17,506 18,838 Commercial business loans and leases: Nonaccrual loans 6,875 8,016 7,688 7,567 5,631 Accruing loans which are 90 days overdue --- --- --- --- 111 Troubled debt restructurings 199 579 614 1,114 1,349 Total 7,074 8,595 8,302 8,681 7,091 Consumer loans and leases: Nonaccrual loans 6,439 5,097 4,505 4,368 4,099 Accruing loans which are 90 days overdue 1,934 2,478 1,595 602 1,051 Total 8,373 7,575 6,100 4,970 5,150 Total nonperforming loans: Nonaccrual loans 34,221 32,250 32,327 32,595 32,736 Accruing loans which are 90 days overdue 5,820 8,038 5,123 2,840 5,090 Troubled debt restructurings 1,672 2,160 2,305 2,992 3,142 Total 41,713 42,448 39,755 38,427 40,968 Other nonperforming assets: Other real estate owned, net of related reserves 7,390 10,000 9,674 10,033 11,089 Repossessions, net of related reserves 1,964 1,819 1,572 1,316 1,865 Total other nonperforming assets 9,354 11,819 11,246 11,349 12,954 Total nonperforming assets $51,067 $54,267 $51,001 $49,776 $53,922 Total nonperforming loans as a percentage of total loans (1) 1.14% 1.16% 1.25% 1.23% 1.36% Total nonperforming assets as a percentage of total assets 0.94% 1.01% 1.14% 1.14% 1.27% Total nonperforming assets as a percentage of total loans (1) and total other nonperforming assets 1.39% 1.48% 1.60% 1.59% 1.67% (1) Exclusive of loans held for sale.
The Company has reduced its exposure to commercial real estate from 33% of total loans at December 31, 1991 to 26% at March 31, 1997 and anticipates maintaining this portfolio at or below this level. The commercial business portfolio, which represented 14% of loans at March 31, 1997, is not concentrated in any single industry, but reflects the broad-based economies of Maine, New Hampshire and northeastern Massachusetts. The Company's commercial business loans are generally to small and medium size businesses located within its geographic market area. The Company's residential loans are generally secured by 1-4 family homes, conform to federal agency underwriting standards and have a maximum loan to value ratio of 80%, unless they are protected by mortgage insurance. At March 31, 1997, 0.77% of the Company's residential loans were non- performing, as compared with 1.00% at March 31, 1996 and 0.80% at December 31, 1996. At March 31, 1997, the Company's consumer loan portfolio included 36% home equity loans, 20% automobile loans, 20% mobile home loans and 24% of other loan types. At March 31, 1997, 0.81% of consumer loans were non-performing. This compares to 0.65% at March 31, 1996 and 0.50% at December 31, 1996. Net Charge-offs As shown in Table 7, first quarter net charge-offs were $887 thousand or nine basis points of average loans and leases outstanding. This compares to $202 thousand or three basis points for the first quarter of 1996 and $1.2 million or fourteen basis points for the fourth quarter.
TABLE 7 - Allowance for Loan and Lease Losses 1997 1996 1996 1996 1996 First Fourth Third Second First Quarter Quarter Quarter Quarter Quarter (Dollars in Thousands) Average loans and leases outstanding during the period (1) $3,799,500 $3,438,872 $3,234,629 $3,202,162 $2,959,218 Allowance at beginning of period $ 67,488 $ 61,663 $ 63,654 $ 65,533 $ 60,975 Additions due to acquisitions and purchases --- 7,055 --- --- 4,310 Charge-offs: Residential real estate mortgages 516 582 495 1,163 434 Commercial real estate mortgages 261 5,064 1,658 1,158 888 Commercial businesss loans and leases 323 1,211 249 679 855 Consumer loans and leases 1,568 1,182 722 1,092 741 Total loans charged off 2,668 8,039 3,124 4,092 2,918 Recoveries: Residential real estate mortgages 90 97 93 248 62 Commercial real estate mortgages 890 5,721 591 1,169 2,060 Commercial business loans and leases 574 780 245 92 420 Consumer loans and leases 227 211 204 254 174 Total loans recovered 1,781 6,809 1,133 1,763 2,716 Net charge-offs 887 1,230 1,991 2,329 202 Additions charged to operating expenses --- --- --- 450 450 Allowance at end of period $ 66,601 $ 67,488 $ 61,663 $ 63,654 $ 65,533 Ratio of net charge-offs to average loans and leases outstanding during the period-annualized (1) 0.09% 0.14% 0.25% 0.29% 0.03% Ratio of allowance to total loans and leases at end of period (2) 1.82% 1.85% 1.94% 2.04% 2.17% Ratio of allowance to nonperforming loans at end of period 159.67% 158.99% 155.11% 165.65% 159.96% (1) Average loans and leases include portfolio loans and loans held for sale. (2) Excludes loans held for sale.
Provision/Allowance for Loan Losses The Company did not record a division for loan losses for either the first quarter of 1997 or the fourth quarter of 1996. The provision for the first quarter of 1996 was $450 thousand. At March 31, 1997, the allowance for loan and lease losses amounted to $66.6 million or 1.82% of loans, as compared to 2.17% at March 31, 1996 and 1.85% at December 31, 1996. Management considers the allowance appropriate and adequate to cover potential losses inherent in the loan portfolio based on the current economic environment. The ratio of allowance for loan losses to non-performing loans was 160% at March 31, 1997, which remained relatively unchanged from year end and at the end of the first quarter 1996. LIQUIDITY For banks, liquidity represents the ability to meet both loan commitments and deposit withdrawals. Funds to meet these needs generally can be obtained by converting liquid assets to cash or by attracting new deposits or other sources of funding. Many factors affect a bank's ability to meet liquidity needs, including variations in the markets served, its asset-liability mix, its reputation and credit standing in the market and general economic conditions. In addition to traditional in-market deposit sources, the Company has many other sources of liquidity, including proceeds from maturing securities and loans, the sale of securities, asset securitizations and other non-relationship funding sources, such as FHLB borrowings, senior or subordinated debt, commercial paper and wholesale purchased funds. Management believes that the high proportion of residential and installment consumer loans in the Company's loan portfolio provides it with an additional amount of contingent liquidity through the conventional securitization programs that exist today. Management believes that the level of liquidity is sufficient to meet current and future funding requirements. CAPITAL At March 31, 1997, shareholders' equity totaled $448 million. In addition, in January 1997, a subsidiary trust of the Company issued $100 million of Trust Capital Securities which mature in 2027 and which qualify as Tier 1 Capital. The Company declared an $.18 per share dividend for the first quarter, representing a 30% dividend payout ratio. On April 16, 1997, the Company's Board of Directors approved the repurchase of up to $100 million of its Common Stock on the open market. The Company is subject to risk-based capital guidelines that measure capital relative to risk-weighted assets. Capital guidelines issued by the Federal Reserve Board require the Company to maintain certain ratios, set forth in Table 8. As indicated in such table, the Company's regulatory capital currently substantially exceeds all applicable requirements. The Company's banking subsidiaries also are subject to federal regulatory capital requirements. At March 31, 1997, each of the Company's banking subsidiaries was deemed to be "well capitalized" under the regulations of the applicable federal banking agency.
TABLE 8 - Regulatory Capital Requirements For Capital Actual Adequacy Purposes Excess Amount Ratio Amount Ratio Amount Ratio (Dollars in Thousands) As of March 31, 1997: Total capital (to risk weighted assets) $523,149 15.36% $272,399 8.00% $250,750 7.36% Tier 1 capital (to risk weighted assets) $480,290 14.11% $136,199 4.00% $344,091 10.11% Tier 1 leverage capital ratio (to average assets) $480,290 9.05% $212,319 4.00% $267,971 5.05% As of December 31, 1996: Total capital (to risk weighted assets) $409,144 12.24% $267,428 8.00% $141,716 4.24% Tier 1 capital (to risk weighted assets) $367,041 10.98% $133,714 4.00% $233,327 6.98% Tier 1 leverage capital ratio (to average assets) $367,041 7.96% $184,445 4.00% $182,596 3.96%
IMPACT OF NEW ACCOUNTING STANDARDS In February, 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128 "Earnings per Share." This Statement requires disclosure of "basic" and "diluted" earnings per share. The Statement is required to be implemented retroactively in the fourth quarter of 1997. The Company's current reported earnings per share is the same as "basic." The Company estimates that diluted earnings per share will be lower by less than 3% than the current reported earnings per share. Part II - Other Information Item 1. Legal Proceedings: The Company is involved in routine legal proceedings occurring in the ordinary course of business which in the aggregate are believed by management to be immaterial to the financial condition and results of operations of the Company. Item 2. Changes in securities - not applicable. Item 3. Defaults upon senior securities - not applicable. Item 4. Submission of matters to a vote of security holders - none. Item 5. Other Information. Item 6. Exhibits and reports on Form 8-K. (a) On January 23, 1997, the Company filed a report on Form 8-K regarding the press release for the 1996 earnings. (b) On January 29, 1997, the Company filed a report on Form 8-K regarding the sale of $100 million of 9.06% Capital Securities. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PEOPLES HERITAGE FINANCIAL GROUP, INC. Date May 14, 1997 By: William J. Ryan Chairman, President and Chief Executive Officer Date May 14, 1997 By: Peter J. Verrill Executive Vice President, Chief Operating Officer and Chief Financial Officer (principal financial and accounting officer) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. PEOPLES HERITAGE FINANCIAL GROUP, INC. /s/ William J. Ryan Date May 14, 1997 By: William J. Ryan Chairman, President and Chief Executive Officer /s/ Peter J. Verrill Date May 14, 1997 By: Peter J. Verrill Executive Vice President, Chief Operating Officer and Chief Financial Officer (principal financial and accounting officer) EX-27 2
9 3-MOS DEC-31-1997 MAR-31-1997 249,781 0 24,000 0 1,172,472 0 0 3,653,128 66,601 5,458,036 4,146,036 695,268 68,896 0 286 0 0 447,550 5,458,036 83,742 17,542 639 101,923 35,358 8,852 57,713 0 3 43,234 26,813 26,813 0 0 17,010 .60 .60 4.73 34,221 5,820 1,672 0 67,488 2,668 1,781 66,601 66,601 0 0
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