UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] Annual Report Pursuant To Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended December 31, 1994
_________________
[ ] Transition Report Pursuant To Section 13 or 15(d) of
the Securities Exchange Act of 1934
_________________
Commission file number: 0-7931
FIRST COMMERCE CORPORATION
(exact name of registrant as specified in its charter)
Louisiana 72-0701203
(State of incorporation) (I.R.S. Employer
Identification No.)
210 Baronne Street, New Orleans, Louisiana 70112
(address of principal executive offices and zip code)
Registrant's telephone number, including area code: (504) 561-1371
______________________
SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT:
Title of each class:
___________________
Common Stock, $5.00 par value
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
_____ _____
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
___________________________
State the aggregate market value of the voting stock held by nonaffiliates
of the Registrant as of February 24, 1995.
Approximately $694,149,348*
___________________________
Indicate the number of shares outstanding of each of the Registrant's classes
of common stock, as of the latest practicable date.
Common Stock: $5.00 par value; 29,369,774 shares outstanding as of
February 24, 1995.
DOCUMENTS INCORPORATED BY REFERENCE
Part of Form 10-K
Documents Incorporated into which Incorporated
______________________ _______________________
Annual Report to Stockholders for Parts II and IV
the year ended December 31, 1994.
Definitive Proxy Statement Part III
_______________________________________________________________________________
* For the purposes of this computation, shares owned by directors and executive
officers have been excluded.
PART I
Item 1
Description of Business
General
_______
First Commerce Corporation (FCC) is a multi-bank holding
company with five wholly-owned bank subsidiaries in Louisiana:
First National Bank of Commerce (FNBC) in New Orleans, City
National Bank of Baton Rouge (CNB), Rapides Bank & Trust Company
in Alexandria (RB&T), The First National Bank of Lafayette (FNBL)
and The First National Bank of Lake Charles (FNBLC).
Effective February 17, 1995, First Bancshares, Inc. (First),
the parent company of First Bank, Slidell, Louisiana, was
acquired by FCC for 2,705,220 shares of FCC common stock. First
Bank was merged with FNBC. The acquisition was accounted for as
a pooling-of-interests.
Also effective February 17, 1995, City Bancorp, Inc. (City),
the parent company of City Bank & Trust Company (City Bank),
New Iberia, Louisiana, was acquired by FCC for 516,252 shares of
FCC common stock. City Bank was merged with FNBL. The
acquisition was accounted for as a purchase.
The five banks accounted for 99.3% of the assets of FCC at
December 31, 1994, and substantially all of the net income for
1994. The banks offer customary services of banks of similar
size and similar markets, including numerous types of interest-
bearing and noninterest-bearing deposit accounts, commercial and
consumer loans, trust services, correspondent banking services
and safe deposit facilities. For further discussion of FCC's
operations, see the Financial Review section of FCC's 1994 Annual
Report, which is incorporated by reference into Item 7 of this
Annual Report on Form 10-K.
FCC has a number of non-bank subsidiaries none of which,
individually or in the aggregate with other non-bank subsidiaries
account for a significant amount of assets, revenues or earnings.
Regulation
__________
Like other bank holding companies in Louisiana, FCC is
subject to regulation by the Louisiana Commissioner of Financial
Institutions and the Federal Reserve Board. Under the terms of
the Bank Holding Company Act of 1956 (the "Act"), as amended, FCC
is restricted to only banking or bank-related activities
specifically allowed by the Act or the Federal Reserve Board.
The Act requires FCC to file required reports with the Federal
Reserve Board. Each of FCC's subsidiary banks is a member of the
Federal Reserve System and is subject to regulation by the
Federal Reserve Board and the FDIC. The four national bank
subsidiaries are also subject to regulation and supervision by
the Comptroller of the Currency, while the state-chartered bank
subsidiary is subject to regulation and supervision by the
Louisiana Commissioner of Financial Institutions.
Payment of Dividends
The primary source of funds for debt service obligations and
the dividends paid by FCC to its stockholders is the dividends it
receives from the bank subsidiaries. The payment of dividends by
FCC's national banks is regulated by the Comptroller of the
Currency. The payment of dividends by FCC's state bank is
regulated by the Louisiana Commissioner of Financial Institutions
and the Federal Reserve Board. Prior approval must be obtained
from the appropriate regulatory authorities before dividends can
be paid if the amount of defined capital, surplus and retained
earnings is below defined regulatory limits. Additionally, the
national bank subsidiaries may not pay dividends in excess of
their retained net profits (net income less dividends for the
current and prior two years) without prior regulatory approval.
The state bank subsidiary may not pay dividends in excess of
retained net profits (net income less dividends for the current
year and one prior year) without prior regulatory approval.
Under certain circumstances, regulatory authorities may prohibit
the payment of dividends by a bank or its parent holding company.
See Note 17 of Notes to Consolidated Financial Statements, which
is incorporated by reference into Item 8 of this Annual Report on
Form 10-K.
Borrowings by the Company
Federal law prohibits FCC or any of its non-bank
subsidiaries from borrowing from its bank subsidiaries, unless
the borrowings are secured by specified amounts and types of
collateral. Additionally, such secured loans are generally
limited to 10% of each subsidiary bank's capital and surplus and,
in the aggregate with respect to FCC and all of its subsidiaries,
to 20% of each subsidiary bank's capital and surplus. Further,
a bank holding company and its subsidiaries are prohibited
from engaging in certain tie-in arrangements in connection with
any extension of credit, lease or sale of property or furnishing
of services.
Company Support of Bank Subsidiaries
The Financial Institutions Reform, Recovery and Enforcement
Act of 1989 ("FIRREA") contains a "cross-guarantee" provision
which could result in any insured depository institution owned by
FCC (i.e., any bank subsidiary) being assessed for losses
incurred by the FDIC in connection with assistance provided to,
or the failure of, any other depository institution owned by FCC.
In addition, under Federal Reserve Board policy, FCC is expected
to act as a source of financial strength to each of its bank
subsidiaries and to commit resources to support each such bank in
circumstances in which such bank might need such outside support.
The Federal Deposit Insurance Corporation Improvement Act of
1991 (the "1991 Act") provides, among other things, that
undercapitalized institutions, as defined by regulatory
authorities, must submit recapitalization plans, and a parent
company of such an institution must either (i) guarantee the
institution's compliance with the capital plan, up to an amount
equal to the lesser of five percent of the institution's assets
at the time it becomes undercapitalized or the amount of the
capital deficiency when the institution fails to comply with the
plan, or (ii) suffer certain adverse consequences such as a
prohibition of dividends by the parent company to its
shareholders.
Prompt Corrective Action
The 1991 Act and implementing regulations classify banks
into five categories generally relating to their regulatory
capital ratios and institutes a system of supervisory actions
indexed to particular classification. Generally, banks that are
classified as "well capitalized" or "adequately capitalized" are
not subject to the supervisory actions specified in the 1991 Act
for prompt corrective action, but may be restricted from taking
certain actions that would lower their classification. Banks
classified as "undercapitalized", "significantly
undercapitalized" or "critically undercapitalized" are subject to
restrictions and supervisory actions of increasing stringency
based on the level of classification.
Under the present regulation, all five of FCC's Banks are
"well-capitalized". While such a classification would exclude
the Banks from the restrictions and actions envisioned by the
prompt corrective action provisions of the 1991 Act, the
regulatory agencies have broad powers under other provisions of
federal law that would permit them to place restrictions on the
Banks or take other supervisory action regardless of such
classification.
Other Provisions of the 1991 Act
In general, the 1991 Act subjected banks and bank holding
companies to significantly increased regulation and supervision.
Other significant provisions of the 1991 Act require the federal
regulators to draft non-capital regulatory measures to assure
bank safety, including underwriting standards and minimum
earnings levels. The legislation further requires regulators to
perform annual on-site bank examinations, places limits on real
estate lending and tightens audit requirements. The 1991 Act and
implementing regulations also impose disclosure requirements
relating to fees charged and interest paid on checking and
deposit accounts.
Interstate Banking and Branching Efficiency Act
In 1994, the Interstate Banking and Branching Efficiency Act
of 1994 (the "Interstate Act") was enacted. Among other things,
the Interstate Act (i) allows bank holding companies after
September, 1995 to acquire a bank located in any state, subject
to certain limitations that may be imposed by the state, (ii)
allows banks after June 1, 1997 (or earlier if permitted by state
law) to merge across state lines unless the home state has
enacted prior to June 1, 1997 a law opting out of interstate bank
mergers, and (iii) permits banks to establish branches outside
their state of domicile if expressly permitted by the law of the
state in which the branch is to be located. Registrant is unable
to predict at this time the effect of the Interstate Act on
competition or the extent to which the Louisiana legislature will
enact laws governing interstate bank acquisitions or branching.
Annual Insurance Assessment
FCC's bank subsidiaries are subject to deposit insurance
assessment by the FDIC. The FDIC is currently considering the
reduction of the deposit insurance premium; the timing and
amount of any reduction cannot be predicted.
Miscellaneous
Federal and Louisiana law provide for the enforcement of any
pro rata assessment of stockholders of a bank to cover impairment
of capital stock by sale, to the extent necessary, of the stock
of any assessed stockholder failing to pay the assessment. FCC,
as the stockholder of its bank subsidiaries, is subject to these
provisions.
Item 2
Properties
FCC's executive offices are located in leased facilities in
the Central Business District of New Orleans. Through its
subsidiaries, FCC also owns or leases its principal banking
facilities and offices in New Orleans, Baton Rouge, Alexandria,
Lafayette and Lake Charles. Of the 105 banking offices open at
the end of 1994, 63 are owned and 42 are leased.
Data processing services for FCC and each of its
subsidiaries are performed in a facility in the Metropolitan New
Orleans area, which is owned by a subsidiary of FCC.
Management considers all properties owned or leased to be
suitable and adequate for their intended purposes and considers
the leases to be fair and reasonable. For additional information
concerning premises and information concerning FCC's obligations
under long-term leases, see Note 10 of Notes to Consolidated
Financial Statements, which is incorporated by reference into
Item 8 of this Annual Report on Form 10-K.
Item 3
Legal Proceedings
In the quarter ended March 31, 1989, suit was filed against
Registrant's wholly owned subsidiary, First National Bank of
Commerce (FNBC) in the matter entitled Guidrey v. Bank of LaPlace
and others, Civil Distric Court for the Parish of Orleans.
Plaintiff seeks to recover losses on certain investments,
claiming that the devendants breached duties owned to him. On
April 22, 1994, a jury found that FNBC had breached a state law
duty to plaintiff, Robert J. Guidry, and found it partially
responsible for plaintiff's loss, which it determined to be
$4.54 million, plus interest from April 17, 1989. On May 3, 1994,
the court entered judgment against FNBC for 15% of the damages
(approximately $681,000) plus interest from April 17, 1989. Both
the plaintiff and FNBC have since appealed to the Louisiana Court
of Appeals. Plaintiff seeks to hold FNBC responsible, jointly
with other devendants, for his damages up to $4.54 million plus
interest. FNBC has appealed on the basis that it is not
responsible to the plaintiff for any amount. In the opinion of
management, after consulting with counsel, the ultimate outcome of
the litigation will not result in a material adverse effect upon
the Registrant.
FCC and its subsidiaries have been named as defendants in
various other legal actions arising from normal business
activities in which damages of various amounts are claimed. The
amount, if any, of ultimate liability with respect to such matters
cannot be determined. However, after consulting with legal
counsel, management believes any such liability will not have a
material effect on FCC's consolidated financial condition.
Item 4: Submission of Matters to a Vote of Securites
Holders, Not Applicable
PART II
Information required for Items 5 through 8
are included in First Commerce Corporation's 1994
Annual Report to stockholders filed as Exhibit 13
herewith and incorporated herein on the pages
indicated below.
Item 5: Market for the Registrant's Common Stock and
Related Stockholder Matters 36-38
Item 6: Selected Financial Data 36-38
Item 7: Management's Discussion and Analysis of
Financial Condition and Results of Operations 16-35
Item 8: Financial Statements and Supplementary Data 39-60
Item 9: Changes in and Disagreements with Accountants
on Accounting and Financial Disclosure, Not
Applicable -
PART III
Item 10: Directors and Executive Officers of the Registrant
Ian Arnof, 55--President, Chief Executive Officer and
Director of FCC since 1983.
R. Jeffrey Brooks, 46--Executive Vice President since 1993;
Director of Strategic Support of FCC from 1993 to 1994;
President and Chief Operating Officer of FNBL from 1992 to 1993;
Senior Vice President and Bankcard Group Manager of FNBC from
1986 to 1992.
Thomas L. Callicutt, Jr., 47--Senior Vice President,
Controller and Principal Accounting Officer of FCC since 1987.
Michael A. Flick, 46--Executive Vice President of FCC since
1985; Chief Administrative Officer of FCC since 1994; Chief
Credit Policy Officer of FCC from 1985 to 1994; Chief Financial
Officer from 1988 to 1992; Secretary to the Board of Directors
since 1987.
Howard C. Gaines, 54--Chairman of the Board of Directors of
FNBC since 1988; Chief Executive Officer of FNBC from 1988 to
1994.
Thomas C. Jaeger, 44--Executive Vice President and Chief
Financial Officer of FCC since 1994; Senior Vice President and
Chief Internal Auditor of FCC from 1989 to 1994. Mr. Jaeger
served as Senior Vice President and Chief Financial Officer of
FNBC from 1987 to 1989.
Kimberly Y. Lee, 34--Executive Vice President and Chief
Internal Auditor of FCC since 1994. Ms. Lee served as Senior
Vice President and Manager of Audit and Credit Review of FCC from
1992 to 1994, and served as a national bank examiner for the
Office of the Comptroller of the Currency from 1982 to 1992.
Ashton J. Ryan, Jr., 47--President of FNBC since 1991;
Chief Executive Officer of FNBC since 1994; Chief Operating
Officer of FNBC from 1991 to 1994; Senior Executive Vice
President of FCC since 1993. From 1981 to 1991, Mr. Ryan was a
partner with Arthur Andersen LLP, New Orleans, Louisiana.
E. Graham Thompson, 58--Executive Vice President, Chief
Credit Policy Officer and Director of Risk Management of FCC
since 1994; Chief Executive Officer of FNBL from 1992 to 1994;
Chairman of FNBL from 1993 to 1994; President of FNBL from 1992
to 1993; Chief Executive Officer of RBT from 1992 to 1994;
President and Chief Executive Officer of CNB from 1987 to 1992.
Joseph V. Wilson III, 45--Senior Executive Vice President of
FCC since 1993; Executive Vice President of FCC from 1989 to
1992; Executive Vice President--Retail Group of FNBC from 1984
to 1989.
The remaining information required under Item
10, and the information required by Items 11
through 13 is incorporated by reference to the
Registrant's definitive Proxy Statement for the
1995 Annual Meeting of Stockholders filed with
the Securities and Exchange Commission.
PART IV
Item 14: Exhibits, Financial Statement Schedules and
Reports on Form 8-K
(a) 1. Financial Statements - See Item 8.
2. Financial Statement Schedules - All
schedules are omitted, since they are
either not applicable or the required
information is shown in the financial
statements or notes thereto.
Item 14.
(a) 3. Exhibits
2. Agreement and Plan of Merger dated May 27, 1994
between First Commerce Corporation and First
Bancshares, Inc., included as Exhibit 2 to First
Commerce Corporation's Registration Statement on
Form S-4 (Registration Number 33-54865) and
incorporated herein by referece.
3.1 Amended and Restated Articles of Incorporation of
First Commerce Corporation, included as Exhibit 3.1 to
First Commerce Corporation's Annual Report on Form 10-
K for the year ended December 31, 1993, and
incorporated herein by reference.
3.2 Amended By-laws of First Commerce Corporation,
included as Exhibit 3.2 to First Commerce
Corporation's Annual Report on Form 10-K for the year
ended December 31, 1993, and incorporated herein by
reference.
4.1 Indenture between First Commerce Corporation and
Republic Bank Dallas, N.A. (now NationsBank Texas, N.
A.), Trustee, including the form of 12 3/4%
Convertible Debenture due 2000, Series A included as
Exhibit 4.1 to First Commerce Corporation's Annual
Report on Form 10-K for the year ended December 31,
1985 and incorporated herein by reference.
4.2 Indenture between First Commerce Corporation and
Republic Bank Dallas, N.A. (now NationsBank Texas, N.
A.), Trustee, including the form of 12 3/4%
Convertible Debenture due 2000, Series B included as
Exhibit 4.2 to First Commerce Corporation's Annual
Report on Form 10-K for the year ended December
31, 1986 and incorporated herein by reference.
10.1 Amended and Restated First Commerce Corporation
Supplemental Tax-Deferred Savings Plan.
10.2 First Commerce Corporation Retirement Benefit
Restoration Plan.
10.3 Restatement of First Commerce Corporation Supplemental
Tax-Deferred Savings Trust Agreement.
10.4 First Commerce Corporation Amended and Restated 1992
Stock Incentive Plan, Form of Nonqualified Stock Option
Agreement and Form of Restricted Stock Agreement.
11 Statement Re: Computation of Earnings Per Share.
13 First Commerce Corporation's 1994 Annual Report to
Stockholders.
21 Subsidiaries of First Commerce Corporation.
23 Consent of Arthur Andersen LLP.
24 Power of Attorney.
27 Financial Data Schedule.
(b) Reports on Form 8-K - The Registrant was
not required to file any reports on Form
8-K during the three-month period ended
December 31, 1994.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
First Commerce Corporation
(Registrant)
By /s/ Thomas L. Callicutt, Jr.
_________________________
Thomas L. Callicutt, Jr.
Senior Vice President,
Controller and Principal
Accounting Officer
Date March 20, 1995
_______________________
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of
the Registrant and in the capacities on the dates indicated.
Signatures Title
__________ _____
Ian Arnof President and Chief Executive Officer
Hermann Moyse, Jr. Chairman of the Board
Thomas C. Jaeger Executive Vice President and
Chief Financial Officer
James J. Bailey III Director
Sydney J. Besthoff III Director
Robert H. Bolton Director
Frances B. Davis Director
Laurance Eustis, Jr. Director
By /s/ Thomas L. Callicutt, Jr.
William P. Fuller Director ____________________________
Thomas L. Callicutt, Jr.
Arthur Hollins III Director Attorney-in-Fact
F. Ben James, Jr. Director
Erik F. Johnsen Director Date: March 20, 1995
J. Merrick Jones, Jr. Director
Edwin Lupberger Director
O. Miles Pollard, Jr. Director
G. Frank Purvis, Jr. Director
Edward M. Simmons Director
H. Leighton Steward Director
J. B. Storey Director
Robert A. Weigle Director