U N I T E D S T A T E S
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 for the quarterly
period ended September 30, 1996
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934 for the transition
period from _____________ to _____________
Commission File Number 1-6887
Hawaii 99-0148992
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(State of incorporation) (IRS Employer Identification No.)
130 Merchant Street, Honolulu, Hawaii 96813
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(Address of principal executive offices) (Zip Code)
(808) 847-8888
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(Registrant's telephone number, including area code)
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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, and (2) has been subject to such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Common Stock, $2 Par Value; outstanding at October 31, 1996 - 40,563,426 shares
BANCORP HAWAII, INC. and subsidiaries
September 30, 1996
PART I. - Financial Information
Item 1. Financial Statements
The consolidated statements of condition as of September 30, 1996 and 1995, and December 31, 1995 and related statements of income, shareholders' equity, and cash flows are included herein.
The unaudited financial statements listed above have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and changes in financial position in conformity with generally accepted accounting principles.
The financial statements reflect all adjustments of a normal and recurring nature which are, in the opinion of management, necessary to a fair statement of the results for the interim periods. Certain accounts have been reclassified to conform with the 1996 presentation.
Consolidated Statements of Condition (Unaudited) Bancorp Hawaii, Inc. and subsidiaries
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September 30 December 31 September 30
(in thousands of dollars) 1996 1995 1995
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Assets
Interest-Bearing Deposits $623,592 $789,050 $612,864
Investment Securities - Held to Maturity
(Market Value of $1,266,815, $1,135,364 and $1,540,450 respectively) 1,272,910 1,129,251 1,544,403
Investment Securities - Available for Sale 2,340,746 2,230,902 1,683,968
Funds Sold 88,224 116,173 56,660
Loans 8,683,244 8,152,406 7,893,978
Unearned Income (181,719) (147,404) (142,515)
Reserve for Possible Loan Losses (167,770) (151,979) (150,931)
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Net Loans 8,333,755 7,853,023 7,600,532
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Total Earning Assets 12,659,227 12,118,399 11,498,427
Cash and Non-Interest Bearing Deposits 457,116 469,031 433,665
Premises and Equipment 273,075 246,515 237,962
Customers' Acceptance Liability 27,323 16,825 13,382
Accrued Interest Receivable 85,095 84,669 79,657
Other Real Estate 8,901 9,306 3,823
Intangibles, including Goodwill 96,427 87,673 89,434
Trading Securities 1,449 29 113
Other Assets 171,860 174,337 140,155
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Total Assets $13,780,473 $13,206,784 $12,496,618
==================================================================================================================
Liabilities
Domestic Deposits
Demand - Non-Interest Bearing $1,319,369 $1,549,302 $1,379,789
- Interest-Bearing 1,648,312 1,592,533 1,555,068
Savings 889,874 1,004,550 1,025,868
Time 2,586,714 2,204,242 1,908,192
Foreign Deposits 1,974,221 1,226,143 1,077,974
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Total Deposits 8,418,490 7,576,770 6,946,891
Securities Sold Under Agreements to Repurchase 1,996,536 1,926,540 2,262,197
Funds Purchased 479,538 787,437 537,268
Short-Term Borrowings 489,061 476,867 480,857
Bank's Acceptances Outstanding 27,323 16,825 13,382
Accrued Pension Costs 20,341 21,145 26,527
Accrued Interest Payable 75,294 49,473 55,120
Accrued Taxes Payable 151,530 160,306 160,606
Minority Interest 9,352 2,961 2,470
Other Liabilities 90,828 70,588 72,604
Long-Term Debt 957,431 1,063,436 897,837
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Total Liabilities 12,715,724 12,152,348 11,455,759
Shareholders' Equity
Common Stock ($2 par value), authorized 100,000,000 shares;
outstanding, September 1996 - 40,661,103;
December 1995 - 41,340,817; September 1995 - 41,579,607; 81,322 82,682 83,159
Surplus 215,014 240,080 248,818
Unrealized Valuation Adjustments (12,759) 13,902 11,581
Retained Earnings 781,172 717,772 697,301
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Total Shareholders' Equity 1,064,749 1,054,436 1,040,859
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Total Liabilities and Shareholders' Equity $13,780,473 $13,206,784 $12,496,618
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Consolidated Statements of Income (Unaudited) Bancorp Hawaii, Inc. and subsidiaries
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3 Months 3 Months 9 Months 9 Months
Ended Ended Ended Ended
September 30 September 30 September 30 September 30
(in thousands of dollars except per share amounts) 1996 1995 1996 1995
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Interest Income
Interest on Loans $168,290 $153,465 $493,549 $451,770
Loan Fees 6,381 7,809 22,958 20,918
Income on Lease Financing 8,793 3,372 18,467 9,464
Interest and Dividends on Investment Securities
Taxable 20,542 23,347 49,703 70,111
Non-taxable 292 329 901 1,048
Income on Investment Securities Available for Sale 35,910 26,936 108,769 78,140
Interest on Deposits 9,219 10,379 28,127 28,753
Interest on Security Resale Agreements -- 72 -- 205
Interest on Funds Sold 828 628 2,906 2,343
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Total Interest Income 250,255 226,337 725,380 662,752
Interest Expense
Interest on Deposits 76,389 59,939 209,751 173,908
Interest on Security Repurchase Agreements 23,780 32,137 73,705 92,403
Interest on Funds Purchased 7,323 7,496 22,041 22,645
Interest on Short-Term Borrowings 5,254 4,276 16,726 14,480
Interest on Long-Term Debt 15,191 14,017 47,173 41,376
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Total Interest Expense 127,937 117,865 369,396 344,812
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Net Interest Income 122,318 108,472 355,984 317,940
Provision for Possible Loan Losses 3,733 4,377 12,320 12,950
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Net Interest Income After Provision for Possible Loan Losses 118,585 104,095 343,664 304,990
Non-Interest Income
Trust Income 12,349 11,879 37,067 37,405
Service Charges on Deposit Accounts 7,417 6,491 21,368 19,331
Fees, Exchange, and Other Service Charges 15,280 12,072 40,665 36,857
Other Operating Income 8,199 5,288 24,499 15,822
Investment Securities Gains (Losses) 291 176 229 2,280
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Total Non-Interest Income 43,536 35,906 123,828 111,695
Non-Interest Expense
Salaries 40,727 35,038 118,246 106,043
Pensions and Other Employee Benefits 12,020 10,653 37,500 32,806
Net Occupancy Expense of Premises 10,510 10,150 29,954 30,402
Net Equipment Expense 8,789 7,012 25,343 23,786
Other Operating Expense 40,041 24,734 101,752 78,813
Minority Interest 524 288 1,181 769
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Total Non-Interest Expense 112,611 87,875 313,976 272,619
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Income Before Income Taxes 49,510 52,126 153,516 144,066
Provision for Income Taxes 18,182 19,206 54,865 54,350
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Net Income $31,328 $32,920 $98,651 $89,716
==================================================================================================================
Earnings Per Common Share and Common Share Equivalents $0.76 $0.78 $2.39 $2.13
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Average Common Shares and Common Share Equivalents Outstanding 41,182,809 41,955,136 41,334,572 42,070,392
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Consolidated Statements of Shareholders' Equity (Unaudited) Bancorp Hawaii, Inc. and subsidiaries
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Common Unrealized Retained
(in thousands of dollars except per share amounts) Total Stock Surplus Valuation Adj. Earnings
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Balance at December 31, 1995 $1,054,436 $82,682 $240,080 $13,902 $717,772
Net Income 98,651 - - - 98,651
Sale of Common Stock
35,803 Profit Sharing Plan 1,231 72 1,159 - -
201,176 Stock Option Plan 4,629 402 4,227 - -
133,207 Dividend Reinvestment Plan 5,200 265 4,935 - -
1,800 Restricted Share Plan 64 4 60 - -
Stock Repurchased (37,550) (2,103) (35,447) - -
Unrealized Valuation Adjustments
Investment Securities (19,116) - - (19,116) -
Foreign Exchange Translation Adjustment (7,545) - - (7,545) -
Cash Dividends Paid of $.86 Per Share (35,251) - - - (35,251)
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Balance at September 30, 1996 $1,064,749 $81,322 $215,014 ($12,759) $781,172
================================================================================================================
Balance at December 31, 1994 $966,788 $83,703 $260,040 ($18,122) $641,167
Net Income 89,716 - - - 89,716
Sale of Common Stock
96,251 Profit Sharing Plan 2,638 193 2,445 - -
84,332 Stock Option Plan 8,315 782 7,533 - -
132,374 Dividend Reinvestment Plan 5,391 361 5,030 - -
Stock Repurchased (28,110) (1,880) (26,230) - -
Unrealized Valuation Adjustments
Investment Securities 26,021 - - 26,021 -
Foreign Exchange Translation Adjustment 3,682 - - 3,682 -
Cash Dividends Paid of $.81 Per Share (33,582) - - - (33,582)
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Balance at September 30, 1995 $1,040,859 $83,159 $248,818 $11,581 $697,301
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/TABLE
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Consolidated Statements of Cash Flows (Unaudited) Bancorp Hawaii, Inc. and subsidiaries
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Nine Months Ended September 30
(in thousands of dollars) 1996 1995
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Operating Activities
Net Income $98,651 $89,716
Adjustments to reconcile net income to net cash provided by operating activities:
Provision for loan losses, depreciation, and amortization of income and expense 10,796 8,430
Deferred income taxes 5,638 916
Realized and unrealized investment security gains (8,294) (1,373)
Net increase in trading securities 1,420 13,583
Other assets and liabilities, net 4,931 (12,221)
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Net cash provided by operating activities 113,142 99,051
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Investing Activities
Proceeds from redemptions of investment securities held to maturity 459,823 634,489
Purchases of investment securities held to maturity (581,374) (392,932)
Proceeds from sales of investment securities available for sale 734,695 346,666
Purchases of investment securities available for sale (868,188) (620,756)
Net decrease in interest-bearing deposits placed in other banks 421,546 114,152
Net decrease (increase) in funds sold 27,949 (2,493)
Net decrease in loans and lease financing 113,310 17,622
Premises and equipment, net (29,062) (32,980)
Purchase of additional interest:
Banque D'Hawaii (Vanuatu), Ltd. -- 6,808
Credipac Polynesie and Credipac Nouvelle Caledonie (4,114) --
Purchase of majority interest of Banque de Tahiti & New Caledonie
net of cash and non-interest bearing deposits acquired 18,090 --
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Net cash provided by investing activities 292,675 70,576
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Financing Activities
Net increase in demand, savings, and time deposits (16,796) (179,392)
Proceeds from lines of credit and long-term debt 1,059,468 226,204
Principal payments on lines of credit and long-term debt (1,165,473) (189,939)
Net decrease in short-term borrowings (225,709) (59,931)
Proceeds from sale (repurchase) of stock (26,426) (11,766)
Cash dividends (35,251) (33,582)
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Net cash used by financing activities (410,187) (248,406)
Effect of exchange rate changes on cash (7,545) 3,682
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Decrease in cash and non-interest bearing deposits (11,915) (75,097)
Cash and non-interest bearing deposits at beginning of year 469,031 508,762
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Cash and non-interest bearing deposits at end of period $457,116 $433,665
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Financial Review
Performance Highlights
Bancorp Hawaii, Inc. (Bancorp) reported earnings for the nine months ending September 30, 1996 of $98.7 million, an increase of 10.0% from the same period in 1995. On a per share basis, earnings were $2.39 and $2.13 for the year-to-date in 1996 and 1995, respectively.
Bancorp's earnings for the third quarter of 1996 were $31.3 million, down 4.8% from the same period last year. Earnings per share for the third quarter of 1996 were $0.76 compared with $0.78 for the same quarter last year. Comparatively, for the first and second quarters of 1996, earnings per share were $0.79 and $0.84, respectively.
Results for the nine months of 1996 have been affected by two significant events. As reported in the second quarter, Bancorp, through its lead bank subsidiary, Bank of Hawaii, purchased a majority ownership in Banque de Tahiti (BDT) and Banque de Nouvelle Caledonie (BNC) from Credit Lyonnais. Bank of Hawaii further increased its ownership in these two Banks by purchasing remaining minority interests during the third quarter. At September 30, 1996, Bank of Hawaii's ownership in BDT and BNC was 92.4% and 91.5%, respectively. Earnings for BDT and BNC since May 1996 have been included in Bancorp's consolidated financial reports. The second event was the special Savings Association Insurance Fund (SAIF) assessment accrued by Bancorp as of September 30, 1996. The SAIF assessment for Bancorp's savings and loan subsidiaries was $5.0 million pre-tax and $3.0 million after tax which impacted third quarter results.
Performance ratios through September 30, 1996 remained short of Bancorp's long term objective of 1.2% and 17.5% for return on average assets (ROAA) and return on average equity (ROAE), respectively. On an annualized basis, ROAA was 0.99% and ROAE was 12.35% through September 30, 1996. Although not approaching target levels, the 1996 results are improving compared to the 1995 ROAA and ROAE ratios which were 0.98% and 11.87%, respectively.
Total assets were $13.8 billion as of September 30, 1996, up significantly from the $12.5 billion reported at September 30, 1995 and from $13.2 billion at December 31, 1995. Net loans outstanding increased to $8.3 billion at September 30, 1996, compared with $7.6 billion and $7.9 billion at September 30, 1995 and December 31, 1995, respectively. Total investment securities stood at $3.6 billion at September 30, 1996, an increase of 11.9% from the same date in 1995 and a 7.5% increase from December 31, 1995. The increase reflects the securitization of more than $350 million of adjustable rate mortgage loans in the second quarter of 1996.
Total deposits increased to $8.4 billion at the end of September 1996. Comparatively, deposits were $7.6 billion and $6.9 billion at year-end and September 30, 1995, respectively. Securities sold under repurchase agreements (Repos) totaled $2.0 billion at September 30, 1996, increasing 3.6% from the year-end balance outstanding of $1.9 billion.
The year-to-year changes were affected by the BDT and BNC acquisition. As of September 30, 1996, BDT and BNC reported total assets of $966.2 million, net loans of $607.8 million and other earning assets of $246.7 million. Deposits at September 30, 1996 were $866.7 million for BDT and BNC.
Risk Elements in Lending Activities
Total loans outstanding were $8.7 billion as of September 30, 1996, an increase of 6.5% over year-end 1995, and 10.0% above loans outstanding at September 30, 1995. The growth reflects the loan portfolios of BDT and BNC which were acquired and the securitization of $350 million in mortgage loans both during the second quarter of 1996. All of the BDT and BNC loans are included in the foreign category. Excluding the impact of these two transactions, loan growth between year-end 1995 and September 30, 1996 would have been 6.6%. The following table presents Bancorp's total loan portfolio for the periods indicated. Growth in the portfolio since September 1995 has been largely in the foreign loans category reflecting the BDT and BNC acquisition.
Loan Portfolio Balances Bancorp Hawaii, Inc., and subsidiaries
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September 30 December 31 September 30
(in millions of dollars) 1996 1995 1995
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Domestic Loans
Commercial and Industrial $1,806.6 $1,902.2 $1,863.0
Real Estate
Construction -- Commercial 216.2 199.6 177.3
-- Residential 28.0 33.7 31.2
Mortgage -- Commercial 1,262.3 1,308.8 1,261.5
-- Residential 2,613.9 2,702.4 2,609.5
Installment 826.4 817.3 774.5
Lease Financing 424.4 392.9 384.6
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Total Domestic 7,177.8 7,356.9 7,101.6
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Foreign Loans 1,505.4 795.5 792.4
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Total Loans $8,683.2 $8,152.4 $7,894.0
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Commercial and Industrial Loans
Commercial and Industrial (C & I) loans ended September 30, 1996 at $1.8 billion. Decreases of 5.0% and 3.0% are reported for C & I loans, compared with year-end 1995 and September 30, 1995, respectively. The decline was the result of large loan payoffs and limited volume of new loan activity. Lending to the cable television and media industry continues to play an important role. Loans to the cable television and media industries totaled $626.5 million, up from $588.0 million and $615.9 million at year-end 1995 and September 30, 1995, respectively.
Real Estate Loans
Real estate loans, as a group, remain the largest segment of the loan portfolio. As of September 30, 1996, real estate loans represented 47.4% of total loans. The table above reports the details of the loans in the real estate group. As the table reflects, residential mortgage loans continue to represent the majority of the real estate loans. As of September 30, 1996, residential mortgages totaled $2.6 billion, compared with $2.7 billion at December 31, 1995 and $2.6 billion at September 30, 1995. The decrease from year-end 1995 resulted from the securitization of $350 million in residential mortgages in the second quarter of this year.
Commercial mortgage loans totaled $1.5 billion at September 30, 1996, similar to the $1.5 billion at year-end 1995 and $1.4 billion at September 30, 1995. Commercial mortgage loans are generally secured by real estate located in Hawaii, although commercial mortgage loans totaling approximately $48.4 million are outstanding in Arizona, largely at First National Bank of Arizona (FNBA) and approximately $182.1 million are outstanding in Guam at Bank of Hawaii and First Savings and Loan Association of America. As reported in Bancorp's 1995 Annual Report to shareholders, the properties securing these loans remain diversified. Properties include shopping centers, commercial/industrial/warehouse facilities, and office buildings. These loans secured by commercial/industrial/warehouse and office buildings are generally partially occupied by the owners.
Construction loans represent 5.9% of the real estate portfolio. As of September 30, 1996, total construction loans (both residential and commercial) totaled $244.2 million, an increase of 4.7% and 17.1% over year-end 1995 and September 30, 1995, respectively. These loans tend to be short-term in nature with permanent take out financing commitments in place before the construction begins.
Other Lending
Other lending includes installment loans, leasing activities and foreign loans. Installment loans increased ending the third quarter of 1996 at $826.4 million, compared with $817.3 million at year-end 1995 and $774.5 million at September 30, 1995. Credit cards (included in the installment totals) have grown to $268.0 million as of September 30, 1996, up 2.4% from year-end 1995 and 12.7% from the same date a year ago. This growth results from the expansion of credit card activity in the Bank of Hawaii with its Contiki Card, co-branded Continental Airlines Card in Micronesia and the MasterCard programs all introduced in 1995. Also included in installment loans are consumer installment loans which totaled $483.9 million at September 30, 1996, compared with $457.8 million at December 31, 1995 and $437.4 million on September 30, 1995. These consumer installment loans consist mainly of auto loans (direct and indirect), unsecured creditlines, and guaranteed student loans.
Leasing activity has increased 8% since year-end 1995. At September 30, 1996, total leases outstanding were $424.4 million compared with $392.9 million at year-end 1995 and $384.6 million September 30, 1995.
Foreign loans totaled $1.5 billion at September 30, 1996, almost double the outstanding balances at year-end 1995 and September 30, 1995. The increase reflects the acquisition of the loan portfolios of BDT and BNC in the second quarter of 1996. BDT and BNC reported total loans of $617.6 million at September 30, 1996, more than half of which was in the C & I category.
Non-Performing Assets and Past Due Loans
Total non-performing assets (NPA) which include non-accrual loans and foreclosed real estate totaled $98.6 million or 1.14% of total loans outstanding as of September 30, 1996. This ratio has grown from 0.70% at both year-end 1995 and September 30, 1995. Total non-performing assets have increased with the acquisition of BDT and BNC who reported $21.5 million in NPA as of September 30, 1996.
Non-accrual loans increased during the quarter ending September 30, 1996 to $89.7 million. Comparatively, non-accrual loans totaled $51.6 million at September 30, 1995, $47.6 million at year-end 1995, and $74.4 million at June 30, 1996. The large increase reflected the non-accrual loans from BDT and BNC and larger loans (two in the commercial category and two in the commercial real estate category) aggregating $9.0 million placed on non-accrual during the third quarter of 1996. Non-accrual residential real estate loans have increased to $23.9 million at September 30, 1996 from $14.7 million at year-end 1995 and $19.0 million a year ago.
Foreclosed real estate has decreased slightly from year-end to $8.9 million. There were less than 20 properties in the foreclosed real estate category as of September 30, 1996. Foreclosed real estate remains at low levels representing 0.06% of total assets as of September 30, 1996.
Accruing loans past due 90 days or more increased from $20.7 million at year-end 1995 to $35.4 million at September 30, 1996. Accruing loans past due 90 days were $21.3 million and $35.0 million at the ends of the first and second quarters of 1996, respectively. As the table below shows, much of the increase has been in the foreign category reflecting the acquisition of the banks in the South Pacific. There is also, however, an increase in the level of installment loan delinquencies which has followed a trend experienced by other banks on the U. S. mainland.
Total NPAs and loans 90 days past due totaled $134.0 million at September 30, 1996, compared with $77.6 million and $71.4 million at year-end 1995 and September 30, 1995, respectively. Total NPAs and loans 90 days past due represented 1.54% of total loans outstanding at September 30, 1996, compared with 0.95% at year-end 1995 and 0.90% at September 30, 1995.
The following table presents NPAs and loans past due 90 days for the periods indicated.
Bancorp Hawaii, Inc.
Consolidated Non-Performing Assets and Accruing Loans Past Due 90 Days or More
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September 30 December 31 September 30
(in millions of dollars) 1996 1995 1995
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Non-Accrual Loans
Commercial $23.3 $16.9 $15.4
Real Estate
Construction 0.3 0.3 0.5
Commercial 18.0 14.9 15.8
Residential 23.9 14.7 19.0
Installment 2.2 0.8 0.9
Leases -- -- --
Foreign 21.4 -- --
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Subtotal 89.1 47.6 51.6
Foreclosed Real Estate
Domestic 8.9 9.3 3.8
Foreign -- -- --
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Subtotal 8.9 9.3 3.8
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Total Non-Performing Assets 98.0 56.9 55.4
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Accruing Loans Past Due 90 Days or More
Commercial 11.6 1.8 1.2
Real Estate
Construction 0.3 -- --
Commercial 5.3 2.4 0.1
Residential 7.7 5.8 7.5
Installment 9.7 10.5 7.1
Leases 0.3 0.2 0.1
Foreign -- -- --
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Subtotal 34.9 20.7 16.0
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Total $132.9 $77.6 $71.4
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Ratio of Non-Performing Assets
to Total Loans 1.13% 0.70% 0.70%
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Ratio of Non-Performing Assets
and Accruing Loans Past Due
90 Days or More to Total Loans 1.53% 0.95% 0.90%
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Summary of Loan Loss Experience
The reserve for loan losses totaled $167.8 million, 1.97% of loans outstanding as of September 30, 1996. Comparatively, this ratio was 1.95% at September 30, 1995 and 1.90% at year-end 1995.
The provision for losses for the third quarter of 1996 was $3.7 million, bringing the year-to-date loss provision to $12.3 million. Comparatively, the year-to-date provision for losses was $13.0 million as of this date in 1995. Net recoveries of $0.8 million was recognized for the third quarter which brings year-to-date net charge-offs to $3.4 million through September 30, 1996.
Gross charge-offs for the third quarter were $9.1 million, resulting in year-to-date charge-offs of $30.0 million. Gross charge-offs were $21.6 million for the first nine months of 1995. Recoveries have been strong during the year, partly due to the recovery of $7.0 million on loans secured by commercial leasehold property charged-off in 1992 and 1993. For the year-to-date, $26.6 million has been recorded as recoveries.
The year-to-date annualized ratio of net charge-offs to average loans outstanding at September 30, 1996 was -0.04%, compared with 0.18% at year-end 1995 and 0.19% at September 30, 1995.
A detailed breakdown of the loan loss reserve including charge-offs and recoveries by category is presented in the following table.
Summary of Loss Experience Bancorp Hawaii, Inc.
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Third Third First Nine First Nine
Quarter Quarter Months Months
(in millions of dollars) 1996 1995 1996 1995
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Average Loans Outstanding $8,467.4 $7,611.8 $8,317.5 $7,603.4
Balance of Reserve for Possible Loan Losses
at Beginning of Period $163.3 $150.3 $152.0 $148.5
Loans Charged Off
Commercial and Industrial 2.1 0.8 6.0 7.4
Real Estate - Construction -- -- -- 2.1
Real Estate - Mortgage
Commercial 1.5 1.0 2.8 1.5
Residential 0.1 0.5 1.0 0.7
Installment 5.3 3.2 19.9 9.6
Foreign -- -- -- --
Leases 0.1 0.2 0.3 0.3
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Total Charged Off 9.1 5.7 30.0 21.6
Recoveries on Loans Previously Charged Off
Commercial and Industrial 8.1 0.4 21.3 5.9
Real Estate - Construction -- -- 0.7 --
Real Estate - Mortgage
Commercial -- 0.1 0.1 0.1
Residential 0.2 0.1 0.4 0.1
Installment 1.4 0.7 3.5 2.4
Foreign 0.1 0.3 0.1 1.6
Leases 0.1 0.3 0.5 0.9
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Total Recoveries 9.9 1.9 26.6 11.0
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Net Charge Offs (Recoveries) (0.8) 3.8 3.4 10.6
Provision Charged to Operating Expenses 3.7 4.4 12.3 13.0
Reserves Acquired (Sold) -- -- 6.9 --
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Balance at End of Period $167.8 $150.9 $167.8 $150.9
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Ratio of Net Charge Offs (Recoveries) to
Average Loans Outstanding (annualized) -0.04% 0.20% 0.05% 0.19%
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Ratio of Reserve to Loans Outstanding 1.97% 1.95% 1.97% 1.95%
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Capital
Bancorp's total capital at September 30, 1996 totaled $1.1 billion. New shares issued for the profit-sharing, stock option and dividend reinvestment plans increased capital by $2.6 million during the quarter, $11.1 million from these sources for the year-to-date. Under Bancorp's continuing stock repurchase programs, $9.9 million of shares were repurchased during the third quarter of 1996. Dividends for the quarter increased to $12.3 million, compared with $11.3 million for the third quarter of 1995. The dividends were paid at $0.30 per share for the third quarter of 1996.
Regulatory risk-based capital remained well above minimum guidelines. At September 30, 1996, Bancorp's Total Capital and Tier 1 Capital ratios were 11.95% and 9.57%, respectively. This compares with year-end 1995, when the Total Capital Ratio was 12.74% and the Tier 1 Capital Ratio was 10.25%. Regulatory guidelines prescribe a minimum Total Capital Ratio of 10.00% and a Tier 1 Capital Ratio of 6.00% for an institution to qualify as well capitalized. Bancorp's strategy is to maintain its capital ratios at levels to meet this qualification to benefit from the financial and regulatory incentives provided to well capitalized companies.
In addition, the leverage ratio, which represents the ratio of Tier 1 Capital to total quarterly average assets, was 7.41% at September 30, 1996, compared to 7.82% at year-end 1995. The required minimum ratio is 5.00%, to qualify an institution as well capitalized.
Spread Management
The average net interest margin or spread on earning assets for the third quarter of 1996 was 3.80%, an increase from the 3.74% reported for the same quarter in 1995 and a decrease from the 3.91% reported for the second quarter of 1996. Year-to-date spread for 1996 was 3.83% compared with 3.72% for the same period in 1995 and the full year. Although spread has decreased between the second and third quarters of 1996 with the increase in average earning assets reported during the quarter, net interest income increased $1.6 million on a taxable equivalent basis.
The yield on earning assets for the third quarter of 1996 was 7.76%, decreasing from the 7.88% reported for the second quarter of 1996, and the 7.80% for the third quarter of 1995. The yield on earnings assets was 7.77% for all of 1995. The cost of funds rate was 4.60% for the quarter ended September 30, 1996, compared with the 4.76% reported for the second quarter of 1996. Comparatively, the cost of funds rate was 4.82% for the third quarter of 1995 and 4.79% for all of 1995.
Average earning assets for the third quarter of 1996 were $12.8 billion, compared with $12.5 billion for the second quarter and $12.4 billion for the year-to-date.
Consolidated Average Balances and Interest Rates Taxable Equivalent Bancorp Hawaii, Inc. and subsidiaries
- ----------------------------------------------------------------------------------------------------------
Three Months Ended Three Months Ended
September 30, 1996 September 30, 1995
Average Income/Yield/ Average Income/Yield/
(in millions of dollars) Balance Expense Rate Balance Expense Rate
- ----------------------------------------------------------------------------------------------------------
Earning Assets
Interest Bearing Deposits $786.1 $9.2 4.67% $695.9 $10.4 5.92%
Investment Securities
-Taxable 1,261.8 20.5 6.48 1,550.0 23.4 5.98
-Tax-Exempt 12.7 0.5 14.12 15.3 0.5 13.16
2,229.4 35.9 6.41 1,587.8 26.9 6.73
Funds Sold 90.7 0.8 3.63 72.6 0.7 3.83
Net Loans
-Domestic 6,990.3 142.4 8.10 6,843.0 143.5 8.32
-Foreign 1,477.1 34.8 9.37 768.8 13.5 6.97
Loan Fees 6.4 7.8
------------------------ ------------------------
Total Earning Assets 12,848.1 250.5 7.76 11,533.4 226.7 7.80
Cash and Due From Banks 463.7 457.9
Other Assets 438.2 405.3
---------- ----------
Total Assets $13,750.0 $12,396.6
========== ==========
Interest Bearing Liabilities
Domestic Deposits - Demand $1,764.1 11.7 2.65 $1,717.6 12.9 2.98
- Savings 913.4 5.8 2.51 1,036.4 7.7 2.95
- Time 2,620.1 35.5 5.40 1,829.8 23.7 5.14
------------------------ ------------------------
Total Domestic 5,297.6 53.0 3.98 4,583.8 44.3 3.84
Total Foreign 1,915.8 23.4 4.85 913.2 15.6 6.78
------------------------ ------------------------
Total Deposits 7,213.4 76.4 4.21 5,497.0 59.9 4.33
Short-Term Borrowings 2,727.4 36.3 5.30 3,199.2 43.9 5.45
Long-Term Debt 1,120.1 15.2 5.40 1,003.7 14.0 5.54
------------------------ ------------------------
Total Interest Bearing Liabilities 11,060.9 127.9 4.60 9,699.9 117.8 4.82
------------------------ ------------------------
Net Interest Income 122.6 3.16 108.9 2.98
Average Spread on Earning Assets 3.80% 3.74%
Demand Deposits 1,364.3 1,406.8
Other Liabilities 254.5 252.1
Shareholders' Equity 1,070.3 1,037.8
---------- ----------
Total Liabilities and Shareholders' Equity $13,750.0 $12,396.6
========== ==========
Provision for Possible Losses 3.7 4.4
Net Overhead 69.1 52.0
------- -------
Income Before Income Taxes 49.8 52.5
Provision for Income Taxes 18.2 19.2
Tax-Equivalent Adjustment 0.3 0.4
------- -------
Net Income $31.3 $32.9
======= =======
|
Consolidated Average Balances and Interest Rates Taxable Equivalent Bancorp Hawaii, Inc. and subsidiaries
- ----------------------------------------------------------------------------------------------------------
Nine Months Ended Nine Months Ended
September 30, 1996 September 30, 1995
Average Income/Yield/ Average Income/Yield/
(in millions of dollars) Balance Expense Rate Balance Expense Rate
- ----------------------------------------------------------------------------------------------------------
Earning Assets
Interest Bearing Deposits $730.8 $28.1 5.14% $648.1 $28.8 5.93%
Investment Securities
-Taxable 1,026.4 49.7 6.47 1,545.3 70.1 6.07
-Tax-Exempt 13.2 1.4 14.06 16.5 1.6 13.06
2,262.7 108.8 6.42 1,590.1 78.2 6.57
Funds Sold 87.5 2.9 4.43 65.9 2.5 5.17
Net Loans
-Domestic 7,132.3 438.3 8.21 6,868.5 424.7 8.27
-Foreign 1,185.2 74.1 8.36 734.8 37.3 6.79
Loan Fees 23.0 20.9
------------------------ ------------------------
Total Earning Assets 12,438.1 726.3 7.80 11,469.2 664.1 7.74
Cash and Due From Banks 455.5 471.1
Other Assets 429.7 388.7
---------- ----------
Total Assets $13,323.3 $12,329.0
========== ==========
Interest Bearing Liabilities
Domestic Deposits - Demand $1,726.4 35.5 2.74 $1,759.1 38.7 2.95
- Savings 956.5 18.1 2.53 1,072.8 23.1 2.88
- Time 2,398.4 97.2 5.41 1,774.9 72.3 5.44
------------------------ ------------------------
Total Domestic 5,081.3 150.8 3.96 4,606.8 134.1 3.89
Total Foreign 1,566.3 58.9 5.03 915.1 39.8 5.82
------------------------ ------------------------
Total Deposits 6,647.6 209.7 4.21 5,521.9 173.9 4.21
Short-Term Borrowings 2,827.3 112.5 5.31 3,169.7 129.5 5.46
Long-Term Debt 1,174.0 47.2 5.37 988.6 41.4 5.60
------------------------ ------------------------
Total Interest Bearing Liabilities 10,648.9 369.4 4.63 9,680.2 344.8 4.76
------------------------ ------------------------
Net Interest Income 356.9 3.17 319.3 2.98
Average Spread on Earning Assets 3.83% 3.72%
Demand Deposits 1,380.1 1,404.7
Other Liabilities 227.0 229.2
Shareholders' Equity 1,067.3 1,014.9
---------- ----------
Total Liabilities and Shareholders' Equity $13,323.3 $12,329.0
========== ==========
Provision for Possible Losses 12.3 13.0
Net Overhead 190.1 160.9
------- -------
Income Before Income Taxes 154.5 145.4
Provision for Income Taxes 54.9 54.4
Tax-Equivalent Adjustment 0.9 1.3
------- -------
Net Income $98.7 $89.7
======= =======
|
Interest Rate Risk and Derivatives
As discussed in Bancorp's 1995 Annual Report, Bancorp
utilizes interest rate sensitivity analysis and computer
simulation techniques to measure the exposure of its earnings to
interest rate movements. The objective of the process is to
position its balance sheet to optimize earnings without unduly
increasing risk. The interest rate sensitivity table presents
the possible exposure to interest rate movements for various time
frames as of September 30, 1996. The distribution of assets and
liabilities in this table is generally made using a combination
of maturities, call provisions, repricing frequency, prepayment
patterns all of which are further adjusted for historic trends
and tendencies. Bancorp analyzes historic data trends for
balance sheet items and makes adjustments for interest rate
sensitivity characteristics as necessary. For example, a portion
of Bancorp's interest bearing demand and savings balances are
relatively insensitive to changes in interest rates.
Consequently, Bancorp has allocated portions of those balances to
longer term interest rate sensitivity periods. As the table
indicates, Bancorp's one-year cumulative asset sensitive gap
totaled $267.4 million, representing 1.94% of total assets.
Comparatively, the one-year cumulative gap was $127.6 million
liability sensitive at year-end 1995, or 0.97% of total assets.
Bancorp uses interest rate swaps as a cost effective risk management tool for dealing with interest rate risk. Swap activity remains limited and during the first nine months of 1996 only reflected maturities of existing swap agreements. At September 30, 1996, the notional amount of swaps totaled $0.7 billion compared with $1.1 billion at year-end 1995. Net expense on interest rate swap agreements totaled $1.0 million for the third quarter of 1996 and $3.2 million through September 30, 1996. Comparatively, net expense of $11.7 million was recognized for all of 1995.
Interest Rate Sensitivity Table Bancorp Hawaii, Inc. and subsidiaries - -------------------------------------------------------------------------------------------- SEPTEMBER 30, 1996 OVER NON-INTEREST (in millions of dollars) 0 - 90 DAYS 91-365 DAYS 1 - 5 YEARS 5 YEARS BEARING - -------------------------------------------------------------------------------------------- ASSETS (1) INVESTMENT SECURITIES 1,432.5 863.6 881.6 436.0 - SHORT TERM INVESTMENTS 78.2 10.0 - - - INTERNATIONAL ASSETS 901.0 311.0 22.7 24.7 23.1 DOMESTIC LOANS (2) 2,884.2 2,140.9 1,952.7 812.2 66.5 TRADING SECURITIES - - 1.4 - - OTHER ASSETS 73.1 36.6 256.0 - 572.4 TOTAL ASSETS 5,369.0 3,362.1 3,114.4 1,272.9 662.0 LIABILITIES AND CAPITAL (1) NON-INT BEARING DEMAND (3) 250.1 165.9 639.5 263.9 - INT BEARING DEMAND (3) 247.2 247.2 824.2 329.7 - SAVINGS (3) 106.8 106.8 498.3 178.0 - TIME DEPOSITS 756.7 1,166.5 622.4 41.1 - FOREIGN DEPOSITS 1,312.6 279.0 47.2 - 335.4 S/T BORROWINGS 2,064.0 825.8 75.3 - - LONG-TERM DEBT 212.1 286.6 339.3 119.4 - OTHER LIABILITIES - - - - 374.7 CAPITAL - - - - 1,064.7 TOTAL LIABILITIES AND CAPIT 4,949.5 3,077.8 3,046.2 932.1 1,774.8 INTEREST RATE SWAPS -519.7 83.3 436.4 - - INTEREST SENSITIVITY GAP -100.2 367.6 504.6 340.8 -1112.8 CUMULATIVE GAP -100.2 267.4 772.0 1112.8 - PERCENTAGE OF TOTAL ASSETS -0.73% 1.94% 5.60% 8.08% - Assumptions used: (1) Based on repricing date. (2) Includes the effect of estimated amortization. (3) Historical analysis shows that these deposit categories, while technically subject to immediate withdrawal, actually display sensitivity characteristics that generally fall within one and five years. The allocation presented is based on that historic analysis. |
Liquidity
The ability to meet day-to-day financial needs of Bancorp's customer base is essential. Much of the strategy of meeting liquidity needs as described in Bancorp's 1995 Annual Report remains in place.
At September 30, 1996, deposits were $8.4 billion, compared to $8.4 billion and $7.6 billion reported at June 30, 1996 and year-end 1995, respectively. The growth in deposits is largely reflected in the Foreign category which was due to the acquisition of BDT and BNC earlier this year. The foreign deposit category is generally made up of larger inter-bank deposits, except in the case of the BDT and BNC deposits which were $0.9 billion at September 30, 1996. BDT and BNC deposits are comprised largely of retail type deposits, including demand, savings and time deposits. The competition for deposits not only by banks and saving and loan companies, but also by securities brokerage firms continues to impact the level of deposits. Repos which are offered to government depositors as an alternative to deposits were $2.0 billion at September 30, 1996, compared to $1.7 billion and $1.9 billion at June 30, 1996, and year-end 1995, respectively.
Short term borrowing, including Fed Funds, decreased to $1.0 billion at the end of September 1996 from $1.1 billion at June 30, 1996 and $1.3 billion at year-end 1995. Long-term debt has decreased from $1.1 billion at year-end 1995 to $1.0 billion at the end of September 1996, reflecting maturities. During the quarter no new debt was issued under Bank of Hawaii's $1 billion "revolving" Bank Note program. At September 30, 1996, Bank Notes issued by Bank of Hawaii totaled $600.0 million, compared to $849.6 million outstanding at year-end 1995.
Net Overhead
Bancorp manages its net overhead by focusing on the ratio of non-interest expense to non-interest income. Bancorp's long term goal, as stated in its 1995 Annual Report is to have a ratio of 2 to 1, where fee income offsets at least half of the cost of operations. The ratio for the year-to-date through September 30, 1996 was 2.53, the same ratio for all of 1995.
Bancorp's efficiency ratio was 65.5% for the first nine months of 1996. This productivity indicator expressed as a percentage is non-interest expense divided by net operating revenue (net interest income plus non-interest income before securities transactions). Comparatively, the annual efficiency ratios for 1995 and 1994 were 63.6% and 60.5 %, respectively.
Non-interest income for the third quarter of 1996 was $43.5 million, an increase of 21.2% over the similar quarter of 1995 and up 2.0% over the second quarter of 1996. For the year-to- date, non-interest income totaled $123.8 million, up 10.9% compared with the same period last year. For the year-to-date, BDT and BNC contributed $7.8 million in non-interest income driving the increase. Trust income for the first nine months totaled $37.1 million, down 0.9% compared with the same period a year ago. Service charges on deposit accounts are reporting growth of 10.5% year over year through September 30. Fees, exchange, and other service charges through September 30, 1996 totaled $40.7 million, a 10.3% increase compared with the same period a year ago. The increase was largely due to the BDT and BNC fees and increases in ATM fees and mortgage servicing fees. Other operating income for the year-to-date was $24.5 million through September, an increase from the $15.8 million reported for the same period in 1995. The increase was due to the fees reported by BDT and BNC ($3.3 million for the year-to-date), higher earnings of the remaining affiliates, interest earned on a cash basis, and income from Bank owned life insurance policies.
Investment Securities net gains and losses for 1996 through September were $0.2 million gain, compared with $2.3 million gain in 1995 for the same period. The gains in the prior year were largely due to the liquidation of securities held by Bancorp Hawaii Small Business Investment Corporation.
Non-interest expense for the third quarter of 1996 totaled $112.6 million, compared with $87.9 million for the same period in 1995. Non-interest expenses for the first two quarters of 1996 were $97.6 million and $103.8 million, respectively, the increase between the first and second quarters reflecting the acquisition of BDT and BNC. The increase for the third quarter resulted from a full quarter of expenses for BDT and BNC and the SAIF expense mentioned earlier.
Salaries and benefits totaled $52.7 million for the third quarter of 1996 compared with $45.7 million for the same quarter a year ago. The increase is primarily due to the consolidation of BDT and BNC into Bancorp's totals. BDT and BNC reported salaries and benefits of $4.6 million for the quarter. For the year-to-date, Bancorp's salary and benefits totaled $155.7 million compared with $138.8 million for the same period in 1995. Again, the increase is partly due to the BDT and BNC salary and benefit expenses. The remaining increase is attributed to higher compensation expenses that are driven by the profitability of the company; expenses such as profit-sharing and incentive compensation are greater than in the prior year.
Net occupancy and equipment expense for the third quarter totaled $19.3 million, compared to $17.2 million for the same quarter in 1995, an increase of 12.4%. For the year-to-date, net occupancy and equipment expense totaled $55.3 million, an increase of 2.0%, compared with the same period in 1995.
Other operating expenses for the third quarter totaled $40.0 million, an increase from the $24.7 million reported for the same quarter in 1995. For the year-to-date, other operating expense totaled $101.8 million in 1996, compared with $78.8 million in 1995. The increase in this expense was driven by the expenses for BDT and BNC ($10.3 million), the special SAIF assessment of $5.0 million and the loss on the early disposition of leased equipment recorded in the first quarter of $2.8 million.
Part II. - Other Information
Items 1 to 5 omitted pursuant to instructions.
Item 6 - Exhibits and Reports on Form 8-K
(a) The following exhibits are filed herewith:
Exhibit #11 - Statement regarding computation of per share earnings.
Exhibit #20 - Report furnished to shareholders for the quarter ended June 30, 1996.
Exhibit #27 - Financial Data Schedule.
(b) There were no reports on Form 8-K filed during the quarter ended September 30, 1996.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Date November 13, 1996 BANCORP HAWAII, INC.
/s/ RICHARD J. DAHL
(Signature)
Richard J. Dahl
President and Chief Operating
Officer
/s/ DAVID A. HOULE
(Signature)
David A. Houle
Senior Vice President,
Treasurer and Chief Financial
Officer
|
Bancorp Hawaii, Inc.
Exhibit 11 - Statement Regarding Computation of Per Share Earnings
Nine Months Ended September 30
Fully
Primary Diluted
----------- ------------
1996
----
Net Income $98,651,000 $98,651,000
=========== ===========
Daily Average Shares Outstanding 40,939,442 40,939,442
Shares Assumed Issued for Stock Options 395,130 395,130
----------- -----------
41,334,572 41,334,572
=========== ===========
Earnings Per Common Share and
Common Share Equivalents $2.39 $2.39
=========== ===========
1995
----
Net Income $89,716,000 $89,716,000
=========== ===========
Daily Average Shares Outstanding 41,730,453 41,730,453
Shares Assumed Issued for Stock Options 339,939 380,520
----------- -----------
42,070,392 42,110,973
=========== ===========
Earnings Per Common Share and
Common Share Equivalents $2.13 $2.13
=========== ===========
|
To Our Shareholders:
Hawaii's strengthening economy and an improved interest rate environment gave rise to Bancorp Hawaii's higher profits and strong earnings growth this quarter. Your company reported second quarter earnings of $34.6 million, 21.2 percent above last year's second quarter and 5.8 percent above the first quarter of 1996. Earnings per share for the second quarter were $0.84, an increase of 23.5 percent over the $0.68 reported for the second quarter of 1995.
Through the first six months of 1996 Bancorp's earnings were $67.3 million, an 18.5 percent increase from $56.8 million reported for the first half of 1995. Year-to-date earnings per share of $1.63 were 20.7 percent higher than the $1.35 reported for the first six months of 1995. Deposits and repurchase agreements reached $10.1 billion, up from $9.3 billion for the same period last year. Net loans increased to $8.2 billion, up from $7.4 billion reported at June 30, 1995. Year-to-date return on average assets was 1.03 percent, and return on average equity was 12.70 percent.
Your company's results for the second quarter reflect its focus on improving asset mix and building core earnings. Diligent efforts in collection of loans previously charged-off resulted in recoveries of more than $14 million for the second quarter allowing loan loss provisions to remain at slightly over $4 million.
Activities in Bancorp's overseas markets also exerted a positive impact on the company's quarterly results. The acquisition of majority holding in Banque de Tahiti and Banque de Nouvelle Caledonie was finalized in May, and the operating results of these institutions are included in Bancorp's consolidated financial statements for the second quarter. These markets have excellent potential for growth, and we anticipate that our subsidiaries and branches throughout the South and West Pacific will continue to perform well.
In June Bank of Hawaii upgraded its representative office in Taipei to a full service branch specializing in corporate services, trade-related finance, and intra-Pacific investment. Taiwan's thriving market offers Bancorp tremendous growth opportunities.
The quarter also saw the opening of First National Bank of Arizona's (FNBA's) 6th office in the Phoenix metropolitan area. FNBA, Bancorp's U.S. Mainland subsidiary, turned in an excellent performance in terms of growth and profitability. In addition, Bank of Hawaii opened its first in-store branch on Maui at Star Markets in Kihei last month and introduced a number of new products for customers-both business clients and consumers-including the innovative Bankoh Mileage Access debit card, the second of its kind in the nation, and the Bankoh Business Service Center, a unique breakthrough approach to merchant servicing.
On July 26 your Board of Directors declared a quarterly dividend of 30 cents per share on the outstanding common stock representing an increase of 7.1 percent from 28 cents per share. Bancorp last increased its dividend in October 1995 when the board approved a 3/4 cent per share increase. The dividend will be payable on September 13, 1996 to shareholders of record at the close of business on August 19, 1996.
We are encouraged by Bancorp's performance for the first half of 1996 and staunchly confident in the economic potential of your company's franchise. These results assure us that we are on the right track for success as we continue to seek new opportunities to develop and grow within our markets. We count your support and confidence among our most valuable assets.
Sincerely,
LAWRENCE M. JOHNSON
Lawrence M. Johnson
Chairman and Chief Executive Officer
Corporate Offices:
Financial Plaza of the Pacific
130 Merchant Street
Honolulu, Hawaii 96813
Investor or Analyst Inquiries:
David A. Houle
Senior Vice President, Treasurer and Chief Financial Officer
(808) 537-8288
or
Sharlene K. Bliss
Investor Relations Officer
(808) 537-8037
or
Cori C. Weston
Corporate Secretary
(808) 537-8272
Highlights (Unaudited) Bancorp Hawaii, Inc., and subsidiaries
- ----------------------------------------------------------------------------------------------------------
June 30 June 30
1996 1995
- ----------------------------------------------------------------------------------------------------------
Return on Average Assets 1.03% 0.93%
- ----------------------------------------------------------------------------------------------------------
Return on Average Equity 12.70% 11.42%
- ----------------------------------------------------------------------------------------------------------
Average Spread on Earning Assets 3.85% 3.71%
- ----------------------------------------------------------------------------------------------------------
Book Value Per Common Share $25.71 $24.59
- ----------------------------------------------------------------------------------------------------------
Loss Reserve/Loans and Leases Outstanding 1.95% 1.99%
- ----------------------------------------------------------------------------------------------------------
Average Equity/Average Assets 8.14% 8.16%
- ----------------------------------------------------------------------------------------------------------
Common Stock Price Range High Low Dividend
1995................................ $37.13 $24.88 $1.08
1996 First Quarter............ $36.25 $33.25 $0.28
Second Quarter................ $37.63 $33.13 $0.28
|
Consolidated Statements of Income (Unaudited)
- --------------------------------------------------------------------------------------------------------------------------------
3 Months 3 Months 6 Months 6 Months
Ended Ended Ended Ended
June 30 June 30 June 30 June 30
(in thousands of dollars except per share amounts) 1996 1995 1996 1995
- --------------------------------------------------------------------------------------------------------------------------------
Total Interest Income $244,038 $221,830 $475,125 $436,415
Total Interest Expense 123,209 114,683 241,459 226,947
- --------------------------------------------------------------------------------------------------------------------------------
Net Interest Income 120,829 107,147 233,666 209,468
Provision for Possible Loan Losses 4,163 4,120 8,587 8,573
- --------------------------------------------------------------------------------------------------------------------------------
Net Interest Income After Provision for Possible Loan Losses 116,666 103,027 225,079 200,895
Total Non-Interest Income 42,666 35,978 80,292 75,789
Total Non-Interest Expense 103,787 93,689 201,365 184,744
- --------------------------------------------------------------------------------------------------------------------------------
Income Before Income Taxes 55,545 45,316 104,006 91,940
Provision for Income Taxes 20,932 16,768 36,683 35,144
- --------------------------------------------------------------------------------------------------------------------------------
Net Income $34,613 $28,548 $67,323 $56,796
================================================================================================================================
Earnings Per Common Share and Common Share Equivalents $0.84 $0.68 $1.63 $1.35
- --------------------------------------------------------------------------------------------------------------------------------
Average Common Shares and Common Share Equivalents Outstanding 41,276,498 42,121,368 41,411,266 42,129,385
- --------------------------------------------------------------------------------------------------------------------------------
|
Consolidated Statements of Condition (Unaudited)
- --------------------------------------------------------------------------------------------------------------------------------
June 30 December 31 June 30
1996 1995 1995
- --------------------------------------------------------------------------------------------------------------------------------
Assets
Interest-Bearing Deposits $638,204 $789,050 $752,923
Investment Securities (Market Value of $3,465,850, $3,366,266
and $3,108,419 respectively) 3,498,246 3,360,153 3,117,484
Securities Purchased Under Agreements to Resell -- -- 90,000
Funds Sold 218,628 116,173 144,900
Loans 8,549,043 8,152,406 7,704,174
Unearned Income (177,225) (147,404) (142,084)
Reserve for Possible Loan Losses (163,266) (151,979) (150,302)
Net Loans 8,208,552 7,853,023 7,411,788
- --------------------------------------------------------------------------------------------------------------------------------
Total Earning Assets 12,563,630 12,118,399 11,517,095
Cash and Non-Interest Bearing Deposits 482,067 469,031 474,554
Premises and Equipment 271,762 246,515 231,978
Other Assets 372,695 372,839 350,024
- --------------------------------------------------------------------------------------------------------------------------------
Total Assets $13,690,154 $13,206,784 $12,573,651
================================================================================================================================
Liabilities
Deposits $8,422,821 $7,576,770 $7,003,918
Securities Sold Under Agreements to Repurchase 1,695,907 1,926,540 2,250,738
Funds Purchased 600,232 787,437 379,473
Short-Term Borrowings 499,580 476,867 655,652
Other Liabilities 364,489 321,298 385,362
Long-Term Debt 1,057,225 1,063,436 877,640
- --------------------------------------------------------------------------------------------------------------------------------
Total Liabilities 12,640,254 12,152,348 11,552,783
Shareholders' Equity
Common Stock ($2 par value), authorized 100,000,000 shares;
outstanding, June 1996 - 40,830,130;
December 1995 - 41,340,817; June 1995 - 41,520,923; 81,660 82,682 83,042
Surplus 221,897 240,080 249,718
Unrealized Valuation Adjustments (15,760) 13,902 12,410
Retained Earnings 762,103 717,772 675,698
- --------------------------------------------------------------------------------------------------------------------------------
Total Shareholders' Equity 1,049,900 1,054,436 1,020,868
- --------------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Shareholders' Equity $13,690,154 $13,206,784 $12,573,651
================================================================================================================================
|
| ARTICLE 9 |
| THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED STATEMENTS OF CONDITION AND CONSOLIDATED STATEMENTS OF INCOME AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. |
| MULTIPLIER: 1000 |
| PERIOD TYPE | 9 MOS |
| FISCAL YEAR END | DEC 31 1995 |
| PERIOD END | SEP 30 1996 |
| CASH | 457116 |
| INT BEARING DEPOSITS | 623592 |
| FED FUNDS SOLD | 88224 |
| TRADING ASSETS | 1449 |
| INVESTMENTS HELD FOR SALE | 2340746 |
| INVESTMENTS CARRYING | 1272910 |
| INVESTMENTS MARKET | 1266815 |
| LOANS | 8683244 |
| ALLOWANCE | 167770 |
| TOTAL ASSETS | 13780473 |
| DEPOSITS | 8418490 |
| SHORT TERM | 2965135 |
| LIABILITIES OTHER | 374668 |
| LONG TERM | 957431 |
| PREFERRED MANDATORY | 81322 |
| PREFERRED | 0 |
| COMMON | 0 |
| OTHER SE | 983427 |
| TOTAL LIABILITIES AND EQUITY | 13780473 |
| INTEREST LOAN | 516507 |
| INTEREST INVEST | 159373 |
| INTEREST OTHER | 49500 |
| INTEREST TOTAL | 725380 |
| INTEREST DEPOSIT | 209751 |
| INTEREST EXPENSE | 369396 |
| INTEREST INCOME NET | 355984 |
| LOAN LOSSES | 12320 |
| SECURITIES GAINS | 229 |
| EXPENSE OTHER | 313976 |
| INCOME PRETAX | 153516 |
| INCOME PRE EXTRAORDINARY | 153516 |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | 98651 |
| EPS PRIMARY | 2.39 |
| EPS DILUTED | 2.39 |
| YIELD ACTUAL | 3.83 |
| LOANS NON | 89613 |
| LOANS PAST | 35376 |
| LOANS TROUBLED | 0 |
| LOANS PROBLEM | 0 |
| ALLOWANCE OPEN | 151979 |
| CHARGE OFFS | 30038 |
| RECOVERIES | 26281 |
| ALLOWANCE CLOSE | 167770 |
| ALLOWANCE DOMESTIC | 0 |
| ALLOWANCE FOREIGN | 0 |
| ALLOWANCE UNALLOCATED | 0 |