Exhibit 99.2
NEWS RELEASE
Date: April 27, 1999
Contact: Katherine Taylor
Investor Relations Manager
815-961-7164
AMCORE FINANCIAL ANNOUNCES NEW ORGANIZATIONAL STRUCTURE
-- FIRST QUARTER OPERATING EARNINGS UP 7 PERCENT --
ROCKFORD, IL -- AMCORE Financial, Inc., a $4.2 billion regional financial
services company, announced a new organizational plan that is expected to
improve efficiency, enhance responsiveness to local markets and increase
shareholder value.
"What matters most to our customers is how we respond to their financial
needs with local decision making, local pricing, product innovation and
community involvement," said Robert J. Meuleman, president and chief executive
officer. "We believe that our new structure will continue to embrace our super
community banking commitment and at the same time improve our efficiency."
AMCORE's new "Customer Focused Organizational Structure" will increase the
ability of bank presidents, directors and salespeople to focus on serving
customers and their communities by centralizing or regionalizing certain
corporate functions. To accomplish this, AMCORE will operate as one banking
company while still preserving its super community banking philosophy.
"We need to go beyond merely focusing on achieving higher loan volume and
fee income and take an important step in becoming a more efficient customer
focused company," said Meuleman. "While we have made improvements in our
earnings from a year ago, we believe our new organizational structure will drive
even greater efficiencies in the future."
HIGHLIGHTS:
- Bank presidents and directors will be able to concentrate on customer
needs and sales. This focus on customers and communities should improve
financial performance.
- Operating under one charter is expected to increase operational
efficiencies, address redundancies within the company and reduce
reporting requirements and regulatory fees.
- Each market will have a manager focused on promoting the community
banking philosophy and meeting customers' financial needs.
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- Centralized corporate functions will support a sales staff that is
managed directly at the local market level.
AMCORE expects to have its new organizational structure fully in place in
the fourth quarter. Although the Company will be operating under one charter, it
will not be eliminating directors or bank presidents. Instead, their
responsibilities will change from a fiduciary role to focus more on business
development, corporate advocacy and community leadership. "We recognize the need
to deliver shareholder value while continuing to embrace our super community
banking philosophy," said Meuleman. "The structure we announced today addresses
both critical objectives."
FIRST QUARTER EARNINGS
AMCORE also announced its earnings today for the first quarter ending March
31, 1999 with a 7 percent, or $630,000 increase in net income from operations
from a year ago. Diluted earnings per share from operations were $0.35, a 3
percent increase from $0.34 per share in the first quarter of 1998. Net income
from operations excludes the Midwest Federal Financial Corp. merger related
charges of $3.3 million in 1998.
"The first quarter saw a continuation of our strong loan growth, which is
due to our healthy local economies and the success of our sales management
program," said Meuleman. "We believe our new organizational structure will have
a positive impact on our performance in the future by reducing duplicate efforts
in our markets and allowing our bank presidents and sales force more time to
work closely with their customers and communities."
HIGHLIGHTS
----------
o Net revenues increased 9 percent or $3.7 million from a year ago.
o Average loans for the first quarter were up 26 percent, or $512
million from the same period last year due to a strong regional
economy, sales management initiatives and the Midwest Federal
acquisition.
o Net interest income increased 9 percent in the first quarter.
o Net interest margin in the first quarter dropped 1 basis point to
3.45 percent compared to the previous quarter, while the core
margin, which excludes the leveraged investment portfolio, improved
1 basis point to 4.18 percent compared to the previous quarter.
o Asset quality remains stable. The allowance for loan losses to
ending loans increased to 1.11 percent of loans compared to 1.10
percent a year ago and the allowance for loan losses to
non-performing loans remained at 124 percent for both periods.
o Trust and asset management fees rose 25 percent in the first quarter
to $6.6 million due to strong sales results driven by favorable
investment performance and continued revenue contributions from
Investors Management Group (IMG), Des Moines, Iowa.
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EARNINGS FROM OPERATIONS
------------------------
"We continue to be encouraged by the strong loan growth in our markets,"
said Meuleman. "This is continuing evidence that our sales management training
is delivering expected results. Translating those sales gains into improved
margins remains our primary focus as evidenced by our modest improvement in our
core operating margin."
Total loans increased 17 percent, or $358 million from the same period a
year ago, and was evenly balanced between commercial and retail lending. Average
earning assets rose 12.5 percent causing a $2.9 million increase in net interest
income on a fully taxable equivalent basis. A portion of the loan growth was
funded through a decrease in investment securities. The core interest margin
remained unchanged from a year ago, but improved 1 basis point when compared to
the fourth quarter of 1998. Net interest margin decreased 10 basis points to
3.45 percent when compared to the first quarter of 1998. Earning asset yields
fell 43 basis points compared to the first quarter of 1998, primarily on
mortgage related assets, which more than offset a 38 basis point decrease in
total funding costs.
Trust and asset management revenues increased 25 percent to $6.6 million in
the first quarter of 1999 compared to $5.3 million in the first quarter of 1998.
The increase is due to strong sales efforts and revenue contributions from
bringing Vintage mutual fund administration in-house through IMG. Total managed
assets, which includes fee based accounts and Vintage Fund balances, rose 2.2
percent during the quarter and now stands at $4.25 billion.
Total operating expenses for the first quarter of 1999 increased 7 percent
to $29.4 million when compared to the first quarter of 1998. The increase in
expenses is due to the addition of Midwest Federal and Investors Management
Group, both of which were not restated in prior year numbers, and data
processing conversion expenses.
ASSET QUALITY AND RESERVES
--------------------------
The allowance for loan losses to total loans was 1.11 percent at March 31,
1999, compared to 1.10 percent at March 31, 1998, and 1.08 percent at December
31, 1998. The allowance for loan losses to non-performing loans remained at 124
percent at the end of both periods. Total non-performing assets at March 31,
1999 were $24.9 million, or 0.59 percent of total assets compared to $20.8
million or 0.52 percent of total assets last year.
"We have been increasing the level of allowance for loan losses over the
past several quarters to match the strong loan growth we've experienced," said
Meuleman. Net charge-offs represented 11 basis points annualized of average
loans for the first quarter, a 2 basis point increase from the same period a
year ago.
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AMCORE Financial, Inc., headquartered in northern Illinois, is a financial
services company with banking assets of $4.2 billion and nine banks operating in
66 locations in Illinois and Wisconsin. The company also has four financial
services companies: AMCORE Investment Group, which provides trust and brokerage
services, and through Investors Management Group, provides capital management,
mutual fund administrative services, and is the investment advisor for the
Vintage family of mutual funds; AMCORE Mortgage, Inc.; AMCORE Consumer Finance
Company, Inc. and AMCORE Insurance Group, Inc.
This news release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995 with respect to the new
organizational structure and results of operations and businesses of AMCORE.
Forward-looking statements may include hopes, beliefs, expectations or
predictions of the future. These forward-looking statements involve certain
risks and uncertainties. Factors that may cause actual results to differ
materially from those contemplated, projected, forecasted or estimated in such
forward-looking statements include, among others, the following possibilities:
(I) heightened competition, including specifically the intensification of price
competition, the entry of new competitors and the formation of new products by
new and existing competitors; (II) adverse state and federal legislation and
regulation; (III) failure to obtain new customers and retain existing customers;
(IV) inability to carry out marketing and/or expansion plans; (V) loss of key
executives; (VI) changes in interest rates including the effect of prepayment;
(VII) general economic and business conditions which are less favorable than
expected; (VIII) unanticipated changes in industry trends; (IX) changes in
Federal Reserve Board monetary policies; (X) inability to realize cost savings
anticipated with the new organizational structure, mergers or data processing
outsourcing; and (XI) higher than expected costs or other difficulties
associated with merger integration, data processing conversion or Year 2000
compliance solutions.
AMCORE common stock is listed on The NASDAQ Stock Market under the symbol
"AMFI." Further information about AMCORE Financial Inc. can be found at our
website at http://www.AMCORE.com.
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AMCORE Financial, Inc.
CONSOLIDATED KEY FINANCIAL DATA SUMMARY
NOTE: AMCORE Financial, Inc. (AFI) acquired Investors Management Group, Ltd. on
February 17, 1998, which was accounted for as a purchase. AFI merged
with Midwest Federal Financial Corp. on March 27, 1998. This transaction
was accounted for as a pooling of interests, however, the size of the
transaction does not require restatement of prior year amounts. AFI
acquired Wellmark Capital Value, Inc. on March 31, 1999, which was
accounted for as a purchase.
(in thousands, except share data) Trailing Twelve Months Ended
Quarter Ended March 31, March 31,
---------------------------------------------------------------------------------
Percent Percent
Financial Highlights 1999 1998 Change 1999 1998 Change
- ---------------------------------------------------------------------------------------------------------------------------------
Net revenues, including security gains.......... $ 45,545 $ 41,892 8.7% $ 185,135 $ 162,223 14.1%
Net interest income - FTE....................... 34,294 31,388 9.3% 135,627 122,348 10.9%
Operating expenses.............................. 29,358 27,409 7.1% 117,046 120,913 (3.2%)
Net income from operations...................... 10,036 9,406 6.7% 43,518 36,275 20.0%
Net income...................................... 10,036 6,099 64.6% 43,518 26,524 64.1%
Basic earnings per share from operations........ 0.35 0.35 0.0% 1.51 1.35 11.9%
Basic earnings per share........................ 0.35 0.23 52.2% 1.51 0.99 52.5%
Diluted earnings per share from operations...... 0.35 0.34 2.9% 1.50 1.32 13.6%
Diluted earnings per share...................... 0.35 0.22 59.1% 1.50 0.96 56.3%
Cash dividends per share........................ 0.14 0.12 16.7% 0.56 0.47 19.1%
Book value per share............................ 11.06 10.83 2.2%
Quarter Ended March 31,
------------------------------------
Key Financial Ratios (A) 1999 1998 Change
- ------------------------------------------------------------------------------------
Return on average assets...................... 0.98% 1.03% (0.05%)
Return on average equity...................... 12.75% 13.09% (0.34%)
Net interest margin (FTE)..................... 3.45% 3.55% (0.10%)
Core interest margin (FTE).................... 4.18% 4.18% 0.00%
Efficiency Ratio (FTE) ...................... 61.09% 61.83% (0.74%)
(A) All ratios have been adjusted to exclude merger-related and information
systems charges.
(in thousands, except share data)
Quarter Ended March 31,
--------------------------------------
Percent
Income Statements 1999 1998 Change
- --------------------------------------------------------------------------------------
Interest income........................... $ 72,892 $ 68,315 6.7%
Interest expense.......................... 41,109 39,362 4.4%
-------------------------------------
Net interest income.................... 31,783 28,953 9.8%
Provision for loan losses................. 2,226 2,145 3.8%
Non-interest income:
Trust and asset management income...... 6,587 5,261 25.2%
Service charges on deposits............ 2,218 1,864 19.0%
Mortgage revenues...................... 2,138 2,638 (19.0%)
Other.................................. 2,626 2,634 (0.3%)
-------------------------------------
Total non-interest income........... 13,569 12,397 9.5%
Net security gains........................ 193 542 (64.4%)
Operating expenses:
Personnel costs........................ 16,725 15,670 6.7%
Net occupancy expense.................. 1,729 1,713 0.9%
Equipment expense...................... 2,105 1,821 15.6%
External data processing expense....... 1,601 298 N/M
Professional fees...................... 1,131 895 26.4%
Advertising and business development... 746 766 (2.6%)
Amortization of intangible assets...... 497 586 (15.2%)
Other.................................. 4,824 5,660 (14.8%)
-------------------------------------
Total operating expenses............ 29,358 27,409 7.1%
-------------------------------------
Income before income taxes................ 13,961 12,338 13.2%
Income taxes.............................. 3,925 2,932 33.9%
-------------------------------------
Net income from operations................ $ 10,036 $ 9,406 6.7%
Merger related charges, net of tax .... - 3,307 N/M
-------------------------------------
Net income................................ $ 10,036 $ 6,099 64.6%
=====================================
Average shares outstanding - basic (000).. 28,475 27,099 5.1%
Average shares outstanding - diluted (000) 28,924 27,533 5.1%
Ending shares outstanding (000)........... 28,222 29,043 (2.8%)
AMCORE Financial, Inc.
Quarter Ended March 31,
----------------------------------------------------------
(in thousands) 1999 1998
- -----------------------------------------------------------------------------------------------------------------------------
Ending Average Yield/ Average Yield/
Balance Balance Rate Balance Rate
- -----------------------------------------------------------------------------------------------------------------------------
Assets:
Taxable securities................................ $ 1,037,527 $ 1,069,039 6.13% $ 1,164,847 6.94%
Tax-exempt securities (FTE)....................... 347,143 338,466 7.82% 326,343 8.04%
Other earning assets.............................. 19,170 17,029 3.73% 10,209 5.25%
Loans held for sale............................... 26,286 32,030 5.27% 28,552 7.57%
Loans, net of unearned income (FTE)............... 2,519,582 2,483,163 8.34% 1,971,572 8.77%
------------------------------------------------------------------------
Total Earning Assets (FTE)..................... $ 3,949,708 $ 3,939,727 7.67% $ 3,501,523 8.10%
Intangible assets.............................. 18,581 18,754 15,266
Other non-earning assets....................... 231,853 211,712 201,450
------------------------------------------------------------------------
Total Assets................................... $ 4,200,142 $ 4,170,193 $ 3,718,239
========================================================================
Liabilities and Stockholders' Equity:
Interest bearing deposits......................... $ 2,550,973 $ 2,541,968 4.53% $ 2,221,116 4.93%
Non-interest bearing deposits..................... 375,278 352,491 316,274
------------------------------------------------------------------------
Total Deposits................................. $ 2,926,251 $ 2,894,459 $ 2,537,390
------------------------------------------------------------------------
Short-term borrowings............................. 614,308 581,188 5.30% 632,941 5.76%
Long-term borrowings.............................. 296,273 318,232 6.39% 204,490 6.47%
------------------------------------------------------------------------
Total Interest Bearing Liabilities............. 3,461,554 3,441,388 4.83% 3,058,547 5.21%
Other liabilities.............................. 51,063 57,070 51,918
------------------------------------------------------------------------
Total Liabilities.............................. $ 3,887,895 $ 3,850,949 $ 3,426,739
Stockholders' Equity........................... 312,247 319,244 291,500
------------------------------------------------------------------------
Total Liabilities and
Stockholders' Equity........................... $ 4,200,142 $ 4,170,193 $ 3,718,239
========================================================================
------------------------------------------------------------------------
Quarter Ended
------------------------------------------------------------------------
March 31, Percent December 31, Percent
Asset Quality (in thousands) 1999 1998 Change 1998 Change
- ----------------------------------------------------------------------------------------------------------------------------
Ending allowance for loan losses.................... $ 27,919 $ 23,745 17.6% $ 26,403 5.7%
Net charge-offs..................................... 710 454 56.4% 1,513 (53.1%)
Net charge-offs to average loans (B)................ 0.11% 0.09% 0.02% 0.25% (0.14%)
Non-performing assets:
Non-performing loans - nonaccrual................ $ 22,425 $ 19,138 17.2% $ 18,179 23.4%
Other real estate owned (OREO)................... 2,477 1,655 49.7% 2,321 6.7%
========================================================================
Total non-performing assets................... $ 24,902 $ 20,793 19.8% $ 20,500 21.5%
========================================================================
Loans 90 days past due and still accruing........... $ 8,078 $ 3,430 135.5% $ 7,272 11.1%
(B) On an annualized basis.
Key Asset Quality Ratios Change Change
- --------------------------------------------------------------------------------------------------------------
Allowance to ending loans.................. 1.11% 1.10% 0.01% 1.08% 0.03%
Allowance to non-performing loans.......... 124.50% 124.07% 0.43% 145.24% (20.74%)
Non-performing loans to loans.............. 0.89% 0.89% 0.00% 0.74% 0.15%
Non-performing assets to loans & OREO...... 0.99% 0.96% 0.03% 0.84% 0.15%
Non-performing assets to total assets...... 0.59% 0.52% 0.07% 0.50% 0.09%
Capital Adequacy
- --------------------------------------------------------------------------------------------------------------
Total risk-based capital.................... 12.99% 14.05% (1.06%) 13.46% (0.47%)
Tier 1 risk-based capital................... 11.98% 13.09% (1.11%) 12.49% (0.51%)
Leverage ratio.............................. 7.99% 8.81% (0.82%) 8.31% (0.32%)