Exhibit 99(a)
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FIRST COMMERCE NEWS RELEASE
CORPORATION
NEW ORLEANS, LOUISIANA
JANUARY 15, 1998
CONTACTS: MICHAEL A. FLICK (504) 623-1492
HOLLY E. HOBSON (504) 623-2917
FIRST COMMERCE ANNOUNCES FOURTH QUARTER EARNINGS
New Orleans - First Commerce Corporation (NASDAQ-FCOM)
announced today that its net income for the fourth quarter was
$32.0 million, or $.79 per diluted share. Diluted earnings per
share were $.77 in the third quarter of 1997 and $.72 for the
fourth quarter of 1996.
The following are key items from the fourth quarter:
* Net interest income (FTE) was $96.4 million. The
decrease from both 1997's third quarter and 1996's
fourth quarter was caused by the shift of net interest
income to noninterest income related to the
securitization of credit card loans in 1997's third
quarter. Excluding the effect of this shift, net
interest income rose 1% from the prior quarter and 2%
from 1996's fourth quarter. Loan growth was again the
most significant cause of the net interest income
improvement. However, higher funding costs partially
offset the benefit of loan growth between the fourth
quarters of 1996 and 1997. The net interest margin was
4.46% in the fourth quarter, compared to 4.51% in the
third quarter and 4.76% in last year's fourth quarter.
Excluding the effect of the securitization, the net
interest margin would have been 4.61% in 1997's fourth
quarter and 4.59% in the third quarter.
* The provision for loan losses was $8.6 million in the
fourth quarter, down from $15.8 million in the third
quarter and $14.2 million in 1996's fourth quarter.
Excluding the impact of securitization, the provision
would have been $12.6 million in 1997's fourth quarter
and $18.6 million in the third quarter. The decline in
the provision was related to improved commercial loan
quality.
* Noninterest income was $50.3 million in the fourth
quarter. Excluding all securities transactions and the
securitization effect, noninterest income was $49.3
million in the fourth quarter, up 5% (20% annualized)
from the third quarter and 8% from 1996's fourth
quarter. Credit card fees were the principal factor in
the growth of noninterest income from both prior
periods. Venture capital securities transactions
resulted in gains of $11,000 in the fourth quarter
versus $3.5 million in the third quarter.
* Operating expense was $88.8 million for the fourth
quarter, compared to $84.3 million for the third
quarter and $85.3 million for 1996's fourth quarter.
The 5% increase from the third quarter to the fourth
quarter was principally related to the planned merger
with BANC ONE CORPORATION. The largest increases were
in stock-based incentive pay (caused by the quarter's
20% stock price appreciation), professional fees, and
advertising expenses. Operating expense rose 4% from
the fourth quarter of 1996 to the last quarter of 1997.
Total managed loans rose to $6.7 billion as of December
31, 1997, 8% higher than one year ago and 2% higher than at
September 30, 1997. Average managed loans were $6.4 billion
for 1997, an increase of 17% from 1996. The most significant
increases in average managed loans from 1996 to 1997 were in
credit card (up 26%), commercial real estate (23% higher), and
commercial loans (up 21%). Average consumer loans grew only 9%
in 1997 due to First Commerce's pullback from intensely price-
competitive indirect auto lending. Total deposits were $7.8
billion at December 31, 1997, 7% higher than one year earlier.
Total assets were $9.5 billion as of December 31, 1997.
Nonperforming assets were $39.6 million at December 31,
1997, slightly down from September 30. Net charge-offs were
$9.7 million in the fourth quarter, or .61% of average total
loans, compared to $10.4 million in the third quarter, and
$11.9 million in 1996's fourth quarter. Net charge-offs of
managed credit card loans were $10.7 million in 1997's fourth
quarter, $8.6 million in the third quarter and $7.3 million in
1996's fourth quarter. Higher credit card charge-offs this
quarter were related to the number of accounts that are
reaching the age at which charge-offs peak, which is usually an
account that has been open for 18 to 36 months. As a percent
of total managed loans, net charge-offs were .84% in the fourth
quarter. The allowance for loan losses was 1.29% of total
loans at December 31, 1997.
First Commerce Corporation is a New Orleans-based bank
holding company operating six Louisiana banks in Alexandria,
Baton Rouge, Lafayette, Lake Charles, Monroe and New Orleans.
On October 20, 1997, First Commerce entered into a merger
agreement with BANC ONE CORPORATION. The merger is expected to
be completed in the second quarter of 1998 after approvals by
shareholders and regulators are received.
FIRST COMMERCE CORPORATION AND SUBSIDIARIES
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FINANCIAL HIGHLIGHTS
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Fourth Fourth Twelve Months Ended
Quarter Quarter December 31
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(dollars in thousands, except per share data) 1997 1996 1997 1996
INCOME DATA ------------ ------------ --------------------------------
Net interest income $ 94,573 $ 96,232 $ 381,980 $ 369,742
Net interest income (tax equivalent) $ 96,440 $ 97,776 $ 389,234 $ 375,500
Provision for loan losses $ 8,565 $ 14,168 $ 52,371 $ 37,983
Other income (exclusive of investment securities
transactions) $ 50,267 $ 45,498 $ 194,511 $ 171,177
Investment securities transactions $ 17 $ 407 $ 1,002 $ 1,360
Operating expense $ 88,785 $ 85,304 $ 338,129 $ 326,848
Operating income $ 32,025 $ 28,442 $ 124,962 $ 117,554
Net income $ 32,036 $ 28,707 $ 125,613 $ 118,438
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AVERAGE BALANCE SHEET DATA
Loans - reported $6,342,332 $5,982,771 $6,318,995 $5,512,428
Loans - managed * $6,642,332 $5,982,771 $6,439,817 $5,512,428
Securities $2,208,532 $2,157,419 $2,119,454 $2,253,065
Earning assets $8,603,204 $8,188,195 $8,497,804 $7,831,517
Total assets $9,294,972 $8,843,783 $9,183,476 $8,525,109
Deposits $7,492,684 $6,950,851 $7,449,963 $6,887,675
Long-term debt $ 390,797 $ 82,460 $ 341,117 $ 85,338
Stockholders' equity $ 798,845 $ 710,131 $ 758,136 $ 724,674
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PER COMMON SHARE DATA
Net income - diluted $ 0.79 $ 0.72 $ 3.10 $ 2.89
Net income - basic $ 0.83 $ 0.77 $ 3.24 $ 3.05
Operating income - diluted $ 0.79 $ 0.71 $ 3.08 $ 2.87
Operating income - basic $ 0.83 $ 0.76 $ 3.22 $ 3.03
Book value (end of period) $ 21.03 $ 18.66 $ 21.03 $ 18.66
Closing stock price $ 67.25 $ 38.88 $ 67.25 $ 38.88
Cash dividends $ 0.40 $ 0.40 $ 1.60 $ 1.45
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RATIOS
Net income as a percent of:
Average assets 1.37% 1.29% 1.37% 1.39%
Average total equity 15.91% 16.08% 16.57% 16.34%
Average common equity 15.91% 16.81% 16.57% 16.95%
Net interest income (tax equivalent) as
a percent of average earning assets 4.46% 4.76% 4.58% 4.79%
Average loans as a percent of average deposits 84.65% 86.07% 84.82% 80.03%
Operating expense less other income
(excluding investment securities transactions)
as a percent of average earning assets 1.78% 1.93% 1.69% 1.99%
Operating expense as a percent of
total revenue (tax equivalent and excluding
investment securities transactions) 60.52% 59.54% 57.92% 59.79%
Other income (excluding investment securities
transactions) as a percent of total revenue 34.26% 31.76% 33.32% 31.31%
Allowance for loan losses as a percent of
loans, at end of period 1.29% 1.31% 1.29% 1.31%
Nonperforming assets as a percent of
loans plus foreclosed assets, at end of period 0.61% 0.51% 0.61% 0.51%
Stockholders' equity as a percent
of total assets, at end of period 8.64% 7.87% 8.64% 7.87%
Leverage ratio at end of period 8.35% 7.76% 8.35% 7.76%
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* Managed portfolio represents the owned loan portfolio plus the securitized credit card receivables.