Exhibit 2.
NORWEST CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION
The following Unaudited Pro Forma Combined Financial Information has been
presented using the pooling of interests method of accounting. The
Unaudited Pro Forma Combined Balance Sheet as of December 31, 1993 has
been prepared to reflect the acquisition of First United Bank Group, Inc.
("First United") and the acquisitions of the combined balances for St.
Cloud National Bank & Trust Co., First National Bank of Arapahoe County,
First National Bank of Lakewood, First National Bank of Southeast Denver,
Lindeberg Financial Corporation, Bank of Montana System, D.L. Bancshares,
Inc., Community Credit Co., Double Eagle Financial Corporation and
LaPorte Bancorporation, (the "Combining Companies") with Norwest
Corporation and subsidiaries (the "corporation"), all of which are
expected to be consummated in fiscal 1994. The acquisition of First
United is not individually significant to the corporation, but is
material to the financial statements and the corporation will restate the
financial statements as required in a pooling of interests transaction.
The acquisitions of the Combining Companies are not significant or
material to the financial statements of the corporation, either
individually or in the aggregate, and accordingly, the corporation will
not restate its financial statements for such acquisitions. Therefore,
the Unaudited Pro Forma Combined Income Statement and Unaudited Pro Forma
Combined Earnings Per Share Data for the year ended December 31, 1993
represent a combination of the Consolidated Statements of Income of the
corporation, First United and the Combining Companies. First United's net
loss for the year ended December 31, 1993 includes charges taken pursuant
to the merger agreement for additional credit related reserves of
approximately $23.6 million and merger related expenses and certain
restructuring charges and reserves, including termination costs, systems
and operations costs, and investment banking, legal, and
accounting expenses of approximately $76.1 million. The Unaudited Pro
Forma Combined Income Statements and Unaudited Pro Forma Combined
Earnings Per Share Data for the years ended December 31, 1992 and 1991
represent a combination of the Consolidated Statements of Income of the
corporation and First United. The Unaudited Pro Forma Combined Financial
Information has not been adjusted to reflect immaterial differences in
the accounting and reporting policies between the corporation, First
United and the Combining Companies. Such Unaudited Pro Forma Combined
Financial Information is not necessarily indicative of the consolidated
financial position or results of operations which would have actually
been attained if the acquisitions had been consummated in the past or
what may be attained in the future. Certain of the acquisitions included
in the Unaudited Pro Forma Combined Financial Information are pending
approval by the regulatory agencies, however, such acquisitions would not
have a significant impact on the Unaudited Pro Forma Combined Financial
Statements if such approvals were to be denied.
94
NORWEST CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
DECEMBER 31, 1993
In millions
PRO FORMA
FIRST COMBINED
NORWEST UNITED BANK COMBINING PRO FORMA BALANCE
ASSETS CORPORATION GROUP,INC. COMPANIES ENTRIES (1) SHEET
Cash and due from banks $ 2,653.6 246.8 72.1 (10.4) 2,962.1
Federal funds sold and
resale agreements 405.6 302.1 58.9 - 766.6
Trading account securities 279.1 - - - 279.1
Investment securities 813.4 880.4 605.2 (58.6) 2,240.4
Investment securities
available for sale 1,698.0 514.6 - 7.8 2,220.4
Mortgage-backed securities
available for sale 8,810.1 - - - 8,810.1
Total investment
securities 11,321.5 1,395.0 605.2 (50.8) 13,270.9
Student loans available
for sale 1,351.3 - - - 1,351.3
Mortgages held for sale 6,090.7 - - - 6,090.7
Loans and leases, net
of unearned discount 26,945.0 1,815.3 848.4 (47.7) 29,561.0
Allowance for credit losses (744.9) (46.4) (16.2) 0.4 (807.1)
Net loans and leases 26,200.1 1,768.9 832.2 (47.3) 28,753.9
Premises and equipment, net 756.5 85.6 27.7 (0.9) 868.9
Interest receivable and
other assets 1,723.9 126.2 42.2 0.1 1,892.4
Total assets $50,782.3 3,924.6 1,638.3 (109.3) 56,235.9
LIABILITIES AND
STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing $ 8,338.9 715.4 231.6 (3.7) 9,282.2
Interest-bearing 24,234.3 2,687.9 1,020.0 (72.3) 27,869.9
Total deposits 32,573.2 3,403.3 1,251.6 (76.0) 37,152.1
Short-term borrowings 5,805.1 191.7 109.0 (3.8) 6,102.0
Accrued expenses and
other liabilities 2,033.2 88.6 30.7 (0.1) 2,152.4
Long-term debt 6,802.4 48.5 100.8 (21.8) 6,929.9
Preferred stock 341.9 38.1 2.1 (40.2) 341.9
Common stock 490.2 13.7 14.4 21.5 539.8
Surplus 413.0 101.8 36.9 8.2 559.9
Retained earnings 2,394.4 38.9 95.7 - 2,529.0
Notes receivable from ESOP (16.3) - - - (16.3)
Treasury stock (51.5) - (2.9) 2.9 (51.5)
Foreign currency translation (3.3) - - - (3.3)
Total common stockholders'
equity 3,226.5 154.4 144.1 32.6 3,557.6
Total stockholders' equity 3,568.4 192.5 146.2 (7.6) 3,899.5
Total liabilities and
stockholders' equity $50,782.3 3,924.6 1,638.3 (109.3) 56,235.9
See note to unaudited pro forma combined balance sheet.
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NORWEST CORPORATION AND SUBSIDIARIES
NOTE TO UNAUDITED PRO FORMA COMBINED BALANCE SHEET
(1) Reflects the 1994 completed and pending acquisitions of:
St. Cloud National Bank & Trust Co. through the issuance of
approximately 1,105,822 of the corporation's common stock,
Lindeberg Financial Corporation through the issuance of
approximately 409,940 shares of the corporation's common stock,
First National Bank of Arapahoe County through the issuance of
approximately 257,319 shares of the corporation's common stock,
First National Bank of Lakewood through the issuance of
approximately 332,952 shares of the corporation's common stock,
First National Bank of Southeast Denver through the issuance of
approximately 792,421 shares of the corporation's common stock,
First United Bank Group, Inc. through the issuance of approximately
17,784,986 shares of the corporation's common stock,
Bank of Montana System through the issuance of approximately
4,186,000 shares of the corporation's common stock,
D.L. Bancshares, Inc. through the issuance of approximately 310,269
shares of the corporation's common stock,
Community Credit Co. through the issuance of approximately
3,727,000 shares of the corporation's common stock,
Double Eagle Financial Corporation through the issuance of
approximately 360,000 shares of the corporation's common stock and
LaPorte Bancorporation through the issuance of approximately
524,322 shares of the corporation's common stock.
As a result, adjustments of $21,500,000 and $8,200,000 have been made
to common stock and surplus, respectively, to properly state the par
value of the corporation's common stock and the elimination of Bank
of Montana System's treasury stock.
Also, the pro forma adjustments reflect:
The elimination of $30,200,000 of First United's preferred stock
to reflect the exchange of First United's Series A and Series C
preferred stock for the corporation's common stock and the
redemption for cash of $7,900,000 of First United's Series B
preferred stock.
The divestiture of certain assets and liabilities of Bank of
Montana System's branch banks in Lewistown, Anaconda and Butte,
Montana at book value. The proposed divestiture would include
$1,100,000 cash, $28,800,000 of net loans, $1,400,000 of net
premises and equipment, $100,000 of other assets, $11,700,000 and
$72,300,000 of non-interest bearing and interest bearing deposits,
respectively, $2,700,000 of short-term borrowings and other
liabilities, and $55,300,000 of investment securities to be
96
converted to cash for payment for the excess liabilities to be
sold. In addition, an adjustment is made to reflect the retirement
of Bank of Montana System's long-term debt of $18,500,000 owed to
Norwest Bank Minnesota, N.A., a wholly-owned subsidiary of the
corporation, using the proceeds of a loan in such amounts to be
made by the corporation to Bank of Montana System at the time of
the Merger, and to reflect the related elimination of said loan
from the corporation to Bank of Montana System.
The purchase of $300,000 minority interest of D.L. Bancshares, Inc.
and the retirement of D.L. Bancshares, Inc.'s long-term debt of
$3,300,000 immediately following the Merger using cash generated
from the conversion of investment securities.
The repayment of $900,000 of Double Eagle Financial Corporation's
short-term notes payable using cash provided by United Title Agency
of Arizona, Inc., its wholly-owned subsidiary.
The purchase of $500,000 of other assets from Title Network, Ltd
and the contribution of $25,000 to capitalize the joint venture
with Peter F. Hunt by American Land Title Co., Inc.
The purchase of $8,000,000 in demand deposits in Arizona of First
Nationwide Bank, A Federal Savings Bank, assumed to be converted
into investment securities for a purchase premium of $200,000.
97
NORWEST CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1993
In millions
PRO FORMA
FIRST COMBINED
NORWEST UNITED BANK COMBINING PRO FORMA INCOME
CORPORATION GROUP,INC. COMPANIES ENTRIES STATEMENT
Interest income on
Loans and leases $2,505.9 142.7 83.9 - 2,732.5
Investment securities 69.0 58.4 33.8 - 161.2
Mortgage-backed securities - - - - -
Investment securities
available for sale 116.0 5.3 - - 121.3
Mortgage-backed securities
available for sale 588.6 - - - 588.6
Student loans available
for sale 85.3 - - - 85.3
Mortgages held for sale 326.8 - - - 326.8
Other 42.5 6.2 0.1 - 48.8
Total interest income 3,734.1 212.6 117.8 - 4,064.5
Interest expense on
Deposits 777.5 74.8 30.2 - 882.5
Short-term borrowings 234.3 3.8 11.1 - 249.2
Long-term debt 346.2 6.3 0.4 - 352.6
Total interest expense 1,358.0 84.9 41.7 - 1,484.6
Net interest income 2,376.1 127.7 76.1 - 2,579.9
Provision for credit losses 140.1 18.1 4.5 - 162.7
Net interest income
after provision for
credit losses 2,236.0 109.6 71.6 - 2,417.2
Non-interest income
Trust 179.8 7.4 1.1 - 188.3
Service charges on
deposit accounts 190.2 21.4 7.6 - 219.2
Mortgage banking 472.3 2.5 0.7 - 475.5
Credit card 114.3 - - - 114.3
Insurance 176.8 - 2.5 - 179.3
Other fees and service charges 157.3 3.6 1.1 - 162.0
Other 251.8 7.6 27.6 - 287.0
Total non-interest income 1,542.5 42.5 40.6 - 1,625.6
Non-interest expenses
Salaries and benefits 1,416.5 57.9 30.7 - 1,505.1
Net occupancy 178.5 10.6 9.6 - 198.7
Equipment rentals,
depreciation and
maintenance 192.9 9.1 0.3 - 202.3
Business development 146.9 - - - 146.9
Communication 162.1 6.8 - - 168.9
Data processing 100.0 8.2 - - 108.2
FDIC assessment and
regulatory examination fees 72.7 6.9 - - 79.6
Intangible asset amortization 72.0 8.3 - - 80.3
Other 499.2 102.2 42.8 - 644.2
Total non-interest expenses 2,840.8 210.0 83.4 - 3,143.2
Income (loss) before income
taxes and cumulative effect of
a change in method of
accounting for postretirement
medical benefits 937.7 (57.9) 28.8 - 908.6
Income tax expense (benefit) 284.1 (16.6) 9.8 - 277.3
Net income (loss) before
cumulative effect of a change
in method of accounting for
postretirement medical
benefits $ 653.6 (41.3) 19.0 - 631.3
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NORWEST CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1992*
In millions
PRO FORMA
FIRST COMBINED
NORWEST UNITED BANK PRO FORMA INCOME
CORPORATION GROUP,INC. ENTRIES STATEMENT
Interest income on
Loans and leases $2,314.6 140.7 - 2,455.3
Investment securities 172.9 68.2 - 241.1
Mortgage-backed securities 573.1 - - 573.1
Investment securities
available for sale 14.7 2.6 - 17.3
Mortgage-backed securities
available for sale 164.5 - - 164.5
Student loans available for sale 24.2 - - 24.2
Mortgages held for sale 279.4 - - 279.4
Other 43.6 8.3 - 51.9
Total interest income 3,587.0 219.8 - 3,806.8
Interest expense on
Deposits 925.9 89.7 - 1,015.6
Short-term borrowings 273.5 4.4 - 277.9
Long-term debt 309.8 7.3 - 317.1
Total interest expense 1,509.2 101.4 - 1,610.6
Net interest income 2,077.8 118.4 - 2,196.2
Provision for credit losses 266.7 4.1 - 270.8
Net interest income
after provision for
credit losses 1,811.1 114.3 - 1,925.4
Non-interest income
Trust 162.2 6.7 - 168.9
Service charges on
deposit accounts 170.3 20.4 - 190.7
Mortgage banking 275.3 2.4 - 277.7
Credit card 134.2 - - 134.2
Insurance 155.1 - - 155.1
Other fees and service charges 139.6 2.8 - 142.4
Other 192.1 12.4 - 204.5
Total non-interest income 1,228.8 44.7 - 1,273.5
Non-interest expenses
Salaries and benefits 1,124.8 50.6 - 1,175.4
Net occupancy 172.8 8.9 - 181.7
Equipment rentals,
depreciation and
maintenance 167.7 8.1 - 175.8
Business development 113.5 - - 113.5
Communication 140.1 6.0 - 146.1
Data processing 94.1 6.4 - 100.5
FDIC assessment and
regulatory examination fees 68.9 6.3 - 75.2
Intangible asset amortization 73.6 2.8 - 76.4
Other 481.1 27.6 - 508.7
Total non-interest expenses 2,436.6 116.7 - 2,553.3
Income before income taxes and
cumulative effect of a change
in method of accounting for
postretirement medical
benefits 603.3 42.3 - 645.6
Income tax expense 163.2 12.4 - 175.6
Net income before cumulative
effect of a change in method
of accounting for postretire-
ment medical benefits $ 440.1 29.9 - 470.0
*Excludes the cumulative effect of a change in accounting for postretirement
medical benefits of $76 million.
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NORWEST CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 1991
In millions
PRO FORMA
FIRST COMBINED
NORWEST UNITED BANK PRO FORMA INCOME
CORPORATION GROUP,INC. ENTRIES STATEMENT
Interest income on
Loans and leases $2,555.9 145.7 - 2,701.6
Investment securities 245.3 58.6 - 303.9
Mortgage-backed securities 740.9 - - 740.9
Investment securities
available for sale - - - -
Mortgage-backed securities
available for sale - - - -
Student loans available
for sale - - - -
Mortgages held for sale 192.1 - - 192.1
Other 67.9 19.5 - 87.4
Total interest income 3,802.1 223.8 - 4,025.9
Interest expense on
Deposits 1,373.0 109.5 - 1,482.5
Short-term borrowings 342.6 9.8 - 352.4
Long-term debt 308.6 6.8 - 315.4
Total interest expense 2,024.2 126.1 - 2,150.3
Net interest income 1,777.9 97.7 - 1,875.6
Provision for credit losses 401.9 4.5 - 406.4
Net interest income
after provision for
credit losses 1,376.0 93.2 - 1,469.2
Non-interest income
Trust 143.8 5.8 - 149.6
Service charges on
deposit accounts 156.7 15.8 - 172.5
Mortgage banking 185.9 1.3 - 187.2
Credit card 152.4 - - 152.4
Insurance 140.6 - - 140.6
Other fees and service charges 125.9 2.7 - 128.6
Other 125.9 7.2 - 133.1
Total non-interest income 1,031.2 32.8 - 1,064.0
Non-interest expenses
Salaries and benefits 937.8 45.5 - 983.3
Net occupancy 154.4 9.2 - 163.6
Equipment rentals,
depreciation and
maintenance 143.1 7.8 - 150.9
Business development 90.3 - - 90.3
Communication 124.1 5.2 - 129.3
Data processing 90.4 3.9 - 94.3
FDIC assessment and
regulatory examination fees 62.8 5.0 - 67.8
Intangible asset amortization 62.2 2.4 - 64.6
Other 274.4 23.0 - 297.4
Total non-interest expenses 1,939.5 102.0 - 2,041.5
Income before income taxes and
cumulative effect of a change
in method of accounting for
postretirement medical
benefits 467.7 24.0 - 491.7
Income tax expense 66.8 6.6 - 73.4
Net income before cumulative
effect of a change in method
of accounting for postretire-
ment medical benefits $ 400.9 17.4 - 418.3
100
NORWEST CORPORATION AND SUBSIDIARIES
UNAUDITED PRO FORMA COMBINED EARNINGS PER SHARE DATA
Pro forma net income per common share has been computed based on the pro forma
combined historical net income and on the historical combined weighted average
common shares outstanding giving effect to the issuance of approximately 17.8
million common shares in connection with the acquisition of First United Bank
Group, Inc. as of the beginning of the earliest period presented and, in
addition, the issuance of approximately 12.0 million common shares in
connection with the acquisition of the combining companies as of the beginning
of 1993. The following table sets forth amounts, adjusted for the effect of
common stock equivalents, used to compute net income per common share data (in
millions except per share amounts):
Year Ended December 31
1993 1992* 1991
Net income:
Used for Primary $600.9 437.7 396.9
Used for Fully Diluted $619.9 458.1 405.7
Average Common and Common Equivalent Shares:
Used for Primary 319.7 303.4 297.3
Used for Fully Diluted 335.8 322.4 306.8
Net Income Per Common Share:
Primary $ 1.88 1.44 1.33
Fully Diluted $ 1.85 1.42 1.32
* Excludes the cumulative effect of a change in accounting for
postretirement medical benefits of $76 million.
101