EXHIBIT 99.6
FEDERAL DEPOSIT INSURANCE CORPORATION
WASHINGTON, D. C. 20429
FORM F-4
QUARTERLY REPORT
UNDER SECTION 13 OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JUNE 30, 1994
COMMERCE BANK
-------------
(Exact name of bank as specified in charter)
54-1027360 22584
------------------------------------------------------------
(I.R.S. Identification No.) (FDIC Insurance Cert. No.)
------------------------------------------------------------
VIRGINIA
--------
(State of Incorporation)
3450 Pacific Avenue
Virginia Beach, Virginia 23451
(804) 456-1093
---------------
(Address of principal office and telephone number)
Indicate by check mark whether the Bank (1) has filed all reports required
to be filed by section 13 of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such reports), 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 Bank's classes of
common stock, as of the latest practicable date.
2,725,163 shares of common stock ($2.50 par value) were outstanding as of
June 30, 1994.
ITEM 1: FINANCIAL STATEMENTS
COMMERCE BANK
BALANCE SHEET
(Unaudited)
(In thousands, except common stock data)
June 30, December 31,
1994 1993 1993
---------------- ---------------- ----------------
Assets
Cash and due from banks $ 28,303 $ 22,680 $ 25,800
Temporary investments 12,613 17,115 13,431
Securities:
Held to maturity (Market value June 30, 1994 - $88,230
1993 - $262,085, December 31, 1993 - $251,596) 90,494 254,224 247,175
Available for sale 127,203 - -
----------- ----------- -----------
Total Securities 217,697 254,224 247,175
Loans:
Commercial 183,013 149,698 165,409
Consumer 109,634 92,582 102,611
Real estate mortgage 96,327 86,545 88,850
Real estate construction & development 14,871 14,906 17,074
Tax-exempt 6,354 6,443 6,477
Less: Unearned income and deferred fees (1,766) (3,090) (2,163)
----------- ----------- -----------
Loans, net of unearned income and deferred fees 408,433 347,084 378,258
Less: Allowance for loan losses (7,188) (6,645) (6,527)
----------- ----------- -----------
Loans, net 401,245 340,439 371,731
Bank premises and equipment, net 19,229 16,830 18,384
Foreclosed property 2,870 4,433 3,080
Other assets 10,110 10,676 10,029
----------- ----------- -----------
Total assets $ 692,067 $ 666,397 $ 689,630
- ------------------------------------------------------------------------------------------------------------------------------
Liabilities
Deposits:
Noninterest bearing demand $ 101,268 $ 102,179 $ 103,197
Interest bearing demand 74,792 58,397 72,221
Money market savings 247,108 249,957 227,751
Regular savings 31,198 27,191 28,389
Certificates of deposit less than $100,000 146,027 150,280 164,122
Certificates of deposit greater than $100,000 35,999 28,182 38,461
----------- ----------- -----------
Total deposits 636,392 616,186 634,141
Short-term borrowings - 175 1,400
Long-term debt 6,790 6,866 6,828
Other liabilities 2,292 2,848 3,672
----------- ----------- -----------
Total liabilities 645,474 626,075 646,041
----------- ----------- -----------
Shareholders' Equity
Common stock, $2.50 par: 10,000,000 shares authorized:
2,725,163, 2,533,914, and 2,686,792 issued and outstanding 6,813 6,335 6,717
Capital surplus 29,787 25,721 29,062
Retained earnings 10,587 8,296 7,810
Unrealized loss on marketable equity securities - (30) -
Net unrealized loss on securities available for sale (594) - -
----------- ----------- -----------
Total shareholders' equity 46,593 40,322 43,589
----------- ----------- -----------
Total liabilities and shareholders' equity $ 692,067 $ 666,397 $ 689,630
- ------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements
1
COMMERCE BANK
STATEMENT OF INCOME
(Unaudited)
(In thousands, except share data)
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
------------ ------------ ------------ ------------
Interest Income
Loans, including fees $ 8,659 $ 7,625 $ 16,704 $ 15,002
Securities held to maturity and
available for sale 3,344 4,075 6,885 8,077
Temporary investments 179 164 343 323
------------ ------------ ------------ ------------
Total interest income 12,182 11,864 23,932 23,402
Interest Expense
Deposits 4,865 5,133 9,602 10,311
Short-term borrowings - 7 30 9
Long-term debt 167 159 331 304
------------ ------------ ------------ ------------
Total interest expense 5,032 5,299 9,963 10,624
------------ ------------ ------------ ------------
Net Interest Income 7,150 6,565 13,969 12,778
Provision for loan losses 600 725 1,200 1,525
------------ ------------ ------------ ------------
Net Interest Income After
Provision For Loan Losses 6,550 5,840 12,769 11,253
Noninterest Income
Service charges on deposit accounts 1,021 825 1,960 1,595
Mortgage brokerage income 391 622 981 1,368
Credit card merchant fees 275 234 471 402
Securities gains 10 - 69 86
Trust income 172 165 342 315
Other income 499 344 939 597
------------ ------------ ------------ ------------
Total noninterest income 2,368 2,190 4,762 4,363
Noninterest Expenses
Salaries and benefits 2,818 2,656 5,693 5,211
Occupancy of bank premises 688 591 1,353 1,174
Furniture and equipment 465 387 879 811
Other expenses 2,291 1,908 4,301 3,684
------------ ------------ ------------ ------------
Total noninterest expenses 6,262 5,542 12,226 10,880
------------ ------------ ------------ ------------
Income Before Income Taxes 2,656 2,488 5,305 4,736
Provision for income taxes 815 840 1,703 1,588
------------ ------------ ------------ ------------
Net Income $ 1,841 $ 1,648 $ 3,602 $ 3,148
- ---------------------------------------------------------------------------------------------------------------------
Net Income Per Share
Primary $ 0.66 $ 0.60 $ 1.29 $ 1.15
Fully diluted 0.63 0.57 1.23 1.11
Weighted Average Shares Outstanding
Primary 2,789 2,748 2,802 2,726
Fully diluted 3,050 3,018 3,068 2,993
- ---------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements
2
COMMERCE BANK
STATEMENT OF CASH FLOWS
(Unaudited)
(In thousands)
Six months ended June 30, 1994 1993
------------- -------------
Cash Flows From Operating
Activities:
Net income $ 3,602 $ 3,148
Adjustments to reconcile net income to
cash provided by operating activities:
Provision for loan losses 1,200 1,525
Depreciation and amortization of premises and equipment 913 774
Net amortization of premiums and accretion of discounts 361 337
Amortization of intangible assets 136 161
Gain on sale of securities available for sale (69) -
Gain on sale of securities held to maturity - (86)
(Increase) decrease in deferred income tax benefits (90) 6
(Decrease) increase in interest receivable 17 (43)
Decrease in interest payable (273) (66)
Decrease in other liabilities (1,133) (462)
Decrease in other assets 66 1,103
------------- -------------
Net cash provided by operating activities 4,730 6,397
------------- -------------
Cash Flows From Investing Activities:
Securities held to maturity:
Proceeds from maturities, calls and prepayments - 12,651
Proceeds from sales - 5,062
Purchases (23,483) (33,508)
Securities available for sale:
Proceeds from maturities, calls and prepayments 29,016 -
Proceeds from sales 23,653 -
Net decrease (increase) in temporary investments 818 6,800
Purchases of premises and equipment (1,758) (860)
Net sale (repurchase) of loan participations 232 (512)
Net increase in loans (30,946) (19,225)
------------- -------------
Net cash used in investing activities (2,468) (29,592)
------------- -------------
Cash Flows From Financing Activities:
Net increases in deposit accounts 2,251 18,202
Proceeds from issuance of common stock 218 318
Net decrease in short-term borrowing (1,400) (388)
Principal payments on capital lease obligations (38) (45)
Cash dividends paid (790) (444)
------------- -------------
Net cash provided by financing activities 241 17,643
------------- -------------
Net (decrease) increase in cash and due from banks 2,503 (5,552)
Cash and due from banks at beginning of period 25,800 28,232
------------- -------------
Cash and due from banks at end of period $ 28,303 $ 22,680
- ----------------------------------------------------------------------------------------------------------
Supplemental Disclosures Of Cash Flow Information:
Cash paid during the period:
Interest $ 10,236 $ 10,690
Income taxes 2,149 1,887
Noncash financing and investing activities:
Capital lease obligation - 1,285
- ----------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements.
3
COMMERCE BANK
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(Unaudited)
(In thousands)
Unrealized
Loss on
Marketable
Common Stock Capital Retained Equity
--------------------
Shares Amount Surplus Earnings Security Total
-------- -------- --------- ---------- ---------- --------
Six months ended June 30, 1993
Balance at January 1, 1993 2,511 $ 6,278 $ 25,460 $ 5,705 $ (30) $ 37,413
Net income - - - 3,148 - 3,148
Issuance of common stock 23 57 261 - - 318
Cash dividends declared - - - (557) - (557)
-------- -------- --------- ---------- ---------- --------
Balance at June 30, 1993 2,534 $ 6,335 $ 25,721 $ 8,296 $ (30) $ 40,322
-------- -------- --------- ---------- ---------- --------
Six months ended June 30, 1994
Balance at January 1, 1994 2,687 $ 6,717 $ 29,062 $ 7,810 $ - $ 43,589
Adjustment to beginning balance for change in
accounting method for net unrealized gain on
securities available for sale, net of tax of $1,253,000 - - 2,327 - 2,327
Net income - - - 3,602 - 3,602
Issuance of common stock 38 96 725 - - 821
Change in net unrealized loss on securities
available for sale, net of tax effect - - - (2,921) - (2,921)
Cash dividends declared - - - (825) - (825)
-------- -------- --------- ---------- ---------- ---------
Balance at June 30, 1994 2,725 $ 6,813 $ 29,787 $ 9,993 $ - $ 46,593
- ----------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements
4
COMMERCE BANK
Form F-4
June 30, 1994
Notes to Financial Statements
- -----------------------------
Note 1. General
-------
The financial statements in this report have not been audited. In the
opinion of management, all adjustments necessary for a fair presentation of the
financial position and results of operations for the interim periods have been
made. All such adjustments are of a normal recurring nature. These statements
should be read in conjunction with the 1993 annual report on Form F-2 and the
March 31, 1994 report on Form F-4. Results of operations for the six months
ended June 30, 1994 are not necessarily indicative of the results of operations
for the full year or any other interim periods.
Note 2. Merger with BB&T Financial Corporation
--------------------------------------
Commerce Bank ("Commerce") entered into an Agreement and Plan of
Reorganization, dated as of June 24, 1994 (the "Agreement"), with BB&T Financial
Corporation, a bank holding company headquartered in Wilson, North Carolina
("BB&T"). The Agreement provides for the merger of Commerce with and into a
subsidiary of BB&T.
As an inducement for BB&T to enter into the Agreement, Commerce entered
into a Stock Option Agreement, dated as of June 24, 1994 (the "Option
Agreement"), whereby it granted BB&T an irrevocable option (the "Option") to
purchase up to that number of shares of Commerce's common stock (the "Option
Shares") as would equal 19.9% of the aggregate shares of Commerce common stock
that would be outstanding immediately after the issuance of the Option Shares
upon full exercise of the Option, at a price of $31.50 per Option Share. The
Option is exercisable, in whole or in part, at any time and from time to time
for a designated period of time following the occurrence of a "Purchase Event"
(as defined in the Option Agreement).
Note 3. Commitments
-----------
At June 30, 1994, the amount of off-balance sheet commitments to extend
credit were $69.0 million and standby letters of credit and financial guarantees
were $5.25 million.
5
COMMERCE BANK
Form F-4
June 30, 1994
Note 4. Accounting Change
-----------------
Effective January 1, 1994, Commerce adopted Statement of Financial
Accounting Standard No. 115 ("SFAS 115") "Accounting for Certain Investments in
Debt and Equity Securities". In accordance with SFAS 115, prior period
financial statements have not been restated to reflect the change in accounting
principle. SFAS 115 requires that certain securities be classified into one of
three categories: held to maturity, available for sale, or trading based on
management's ability and intent at time of purchase. Securities classified as
held to maturity are carried at their amortized cost; securities classified as
available for sale are carried at their fair values with the amount of
unrealized gains or losses, net of income taxes, reported as a separate
component of shareholders' equity; and securities classified as trading are
carried at their fair value with the unrealized gains or losses included in
earnings.
As a result of the adoption of SFAS 115, on January 1, 1994, Commerce
classified securities with a fair value of approximately $155 million as
securities available for sale. The opening balance of shareholders' equity was
increased by $2.32 million relating to net unrealized gain on securities
available for sale of $3.58 million, less applicable income taxes of $1.25
million. Prior to the adoption of SFAS 115, securities deemed available for
sale were carried at the lower of aggregate amortized cost or market value.
Note 5. Earnings Per Share
------------------
Primary earnings per share are calculated on the basis of the weighted
average number of shares outstanding during the period after giving retroactive
effect to the 5% stock dividends declared in 1993 and 1992. Dilutive stock
options have been converted to common stock equivalents for the calculation of
weighted average shares outstanding based upon the average market price of
Commerce's common stock. Fully diluted earnings per share assumes the
conversion of outstanding convertible subordinated capital notes and elimination
of interest paid thereon, after tax effect, and the exercise of dilutive stock
options, as of the beginning of each period. The dilutive effect of outstanding
options and convertible subordinated debt is computed using the greater of the
closing price or the average market price of Commerce's stock. The computation
of earnings per share is provided on the following page.
6
COMMERCE BANK
Form F-4
June 30,1994
Earnings per share were determined as follows:
(In thousands, except per share)
Three Months Ended Six Months Ended
June 30, June 30,
1994 1993 1994 1993
------ ------ ------ ------
Primary
Average common shares outstanding 2,695 2,674 2,705 2,649
Dilutive common stock options assumed exercised 94 74 97 77
----------------------------------------------------------------------------------------------------
Average primary shares outstanding 2,789 2,748 2,802 2,726
----------------------------------------------------------------------------------------------------
Net Income $1,841 $1,648 $3,602 $3,148
Per Share Amount .66 .60 1.29 1.15
----------------------------------------------------------------------------------------------------
Fully diluted
Average common shares outstanding 2,695 2,674 2,705 2,649
Dilutive common stock options 92 81 100 81
Dilutive convertible subordinated capital
notes assumed converted 263 263 263 263
----------------------------------------------------------------------------------------------------
Average fully diluted shares outstanding 3,050 3,018 3,068 2,993
----------------------------------------------------------------------------------------------------
Net Income $1,841 $1,648 $3,602 $3,148
Add interest on convertible subordinated
capital notes, after taxes 81 81 162 162
----------------------------------------------------------------------------------------------------
Adjusted net income $1,922 $1,729 $3,764 $3,310
----------------------------------------------------------------------------------------------------
Per share amount $.63 $.57 $1.23 $ 1.11
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7
COMMERCE BANK FINANCIAL HIGHLIGHTS
(Dollars in thousands, except
per share data)
Three Months Ended Six Months Ended
June 30, June 30,
Increase Increase
1994 1993 (Decrease) 1994 1993 (Decrease)
------------ ------------ ----------- ------------ ------------ ------------
Earnings:
Net interest income $ 7,150 $ 6,565 8.9 % $ 13,969 $ 12,778 9.3 %
Net income 1,841 1,648 11.7 3,602 3,148 14.4
- ------------------------------------------------------------------------------------------------------------------------------------
Per Share Data:
Net income :
Primary $ 0.66 $ 0.60 10.0 % $ 1.29 $ 1.15 12.2 %
Fully diluted 0.63 0.57 10.5 1.23 1.11 10.8
Book value at period end - - 17.10 15.91 7.5
Cash dividends 0.15 0.12 25.0 0.30 0.22 36.4
- ------------------------------------------------------------------------------------------------------------------------------------
Selected Financial Ratios:
Return on average assets 1.07 % 1.01 % 1.06 % 0.99 %
Return on average equity 16.00 16.56 15.62 16.21
Net interest spread 3.94 3.81 3.88 3.80
Net interest margin 4.51 4.37 4.44 4.35
Net overhead ratio 2.46 2.23 2.40 2.25
Average loans / average deposits 63.29 56.48 62.58 56.00
- ------------------------------------------------------------------------------------------------------------------------------------
Daily Averages:
Assets $ 688,284 $ 652,170 5.5 % $ 685,716 $ 640,941 7.0 %
Earning assets 635,945 602,499 5.6 633,949 592,057 7.1
Loans, net of unearned income 400,133 339,361 17.9 392,227 333,154 17.7
Investment securities 221,782 246,729 (10.1) 228,293 243,380 (6.2)
Deposits 632,194 600,887 5.2 626,807 590,961 6.1
Shareholders' equity 46,145 39,922 15.6 46,484 39,158 18.7
Primary shares outstanding 2,789 2,748 1.5 2,802 2,726 2.8
Fully diluted shares outstanding 3,050 3,018 1.1 3,068 2,993 2.5
- ------------------------------------------------------------------------------------------------------------------------------------
At Period End:
Assets $ 692,067 $ 666,397 3.9 %
Earning assets 638,743 619,422 3.1
Loans, net of unearned income 408,433 347,084 17.7
Investment securities 217,697 254,224 (14.4)
Deposits 636,392 616,186 3.3
Shareholders' equity 46,593 40,322 15.6
Allowance for loan losses 7,188 6,645 8.2
Nonperforming assets 5,273 4,877 8.1
- ------------------------------------------------------------------------------------------------------------------------------------
Risk-Based Capital Ratios:
Tier I 10.27 % 9.71 %
Total 12.63 12.23
Tier I leverage 6.67 5.99
Total risk weighted assets $ 450,871 $ 394,039
- ------------------------------------------------------------------------------------------------------------------------------------
8
COMMERCE BANK
Selected Quarterly Financial Data
(Dollars in thousands, except
per share data)
Second First Fourth Third Second
Quarter Quarter Quarter Quarter Quarter
1994 1994 1993 1993 1993
- -----------------------------------------------------------------------------------------------------------------------
Results of operations:
Interest income $ 12,182 $ 11,750 $ 11,888 $ 11,957 $ 11,864
Interest expense 5,032 4,931 5,167 5,192 5,299
- -----------------------------------------------------------------------------------------------------------------------
Net interest income 7,150 6,819 6,721 6,765 6,565
Provision for loan losses 600 600 600 700 725
- -----------------------------------------------------------------------------------------------------------------------
Net interest income after
provision for loan losses 6,550 6,219 6,121 6,065 5,840
Noninterest income 2,358 2,335 2,346 2,625 2,190
Securities gains 10 59 53 1,268 -
Noninterest expense (1) 6,262 5,964 5,995 6,831 5,542
- -----------------------------------------------------------------------------------------------------------------------
Income before income taxes 2,656 2,649 2,525 3,127 2,488
Provision for income taxes 815 888 834 1,415 840
- -----------------------------------------------------------------------------------------------------------------------
Net income $ 1,841 $ 1,761 $ 1,691 $ 1,712 $ 1,648
=======================================================================================================================
Per Share Data:
Net income :
Primary $ 0.66 $ 0.63 $ 0.61 $ 0.62 $ 0.60
Fully diluted 0.63 0.60 0.58 0.60 0.57
Book value at period end 17.10 17.09 16.22 16.48 15.91
Cash dividends 0.15 0.15 0.15 0.14 0.12
Common stock price: (2)
High 39.00 27.50 25.50 25.50 25.50
Low 24.50 25.50 23.00 22.75 22.50
Close 39.00 26.50 24.00 23.75 25.50
=======================================================================================================================
Average Balance Sheet Data
Assets:
Loans, net of unearned income $ 400,133 $ 384,233 $ 369,323 $ 354,239 $ 339,361
Investment securities 221,782 234,876 245,039 240,369 246,729
Temporary Investments 14,030 12,821 12,356 20,941 16,409
- -----------------------------------------------------------------------------------------------------------------------
Total earning assets 635,945 631,930 626,718 615,549 602,499
Allowance for loan losses (6,912) (6,809) (6,844) (6,713) (6,313)
Other Assets 59,251 57,998 58,637 56,375 55,984
Total Assets $ 688,284 $ 683,119 $ 678,511 $ 665,211 $ 652,170
=======================================================================================================================
Liabilities and Shareholders'
Equity:
Interest bearing deposits $ 532,136 $ 528,279 $ 529,081 $ 516,719 $ 511,875
Short-term borrowings 77 3,623 1,337 818 859
Long-term borrowings 6,799 6,818 6,837 6,856 6,878
- -----------------------------------------------------------------------------------------------------------------------
Total interest bearing liabilities 539,012 538,720 537,255 524,393 519,612
Non interest bearing liabilities 103,127 93,081 98,291 99,022 92,636
Equity 46,145 46,828 42,965 41,796 39,922
- -----------------------------------------------------------------------------------------------------------------------
Total liabilities and equity $ 688,284 $ 683,119 $ 678,511 $ 665,211 $ 652,170
=======================================================================================================================
Financial Ratios:
Return on average assets 1.07 % 1.05 % 0.99 % 1.02 % 1.01 %
Return on average equity 16.00 15.25 15.61 16.25 16.56
Net interest margin 4.51 4.38 4.28 4.36 4.37
=======================================================================================================================
(1) The third quarter of 1993 included a non-recurring, noncash adjustment of
$910,000 for the write down of an intangible asset.
(2) As reported by NASDAQ
9
COMMERCE BANK
Form F-4
June 30,1994
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion is intended to assist readers in understanding and
evaluating the results of operations and financial condition of Commerce Bank
("Commerce"). The following should be read in conjunction with Commerce's 1993
Annual Report on Form F-2 and the March 31, 1994 report on Form F-4.
Performance Summary
- -------------------
Net income for the second quarter of 1994 was $1.84 million and represented
a 11.7% increase over second quarter earnings for 1993 of $1.65 million.
Primary earnings per share were $.66 compared with $.60, and fully diluted
earnings per share were $.63 compared with $.57 for the second quarter of 1994
compared with 1993. Net income for the first six months of 1994 was $3.60
million or 14.4% above comparable 1993 net income of $3.15 million. Primary
earnings per share were $1.29 compared with $1.15, and fully diluted earnings
per share were $1.23 compared with $1.11 for the second half of 1993. The
increase in net income for the second quarter and first half of 1993 was due to
a higher net interest income, increased noninterest income and a lower provision
for loan losses. Net income for the second quarter of 1994 was 4.54%, or
$80,000 above the $1.76 million reported for the first quarter of 1994.
The return on annualized average assets was 1.07% for the second quarter of
1994 compared with 1.01% for the same period in 1993. The annualized return of
average equity was 16.00% for the second quarter of 1994. In comparison, ROE
was 16.56% for the same period of 1993. ROA for the first half of 1994 was
1.06% while ROE was 15.62% compared with .99% and 16.21% for the first half of
1993, respectively.
Total assets at June 30, 1994 were $692.1 million while total deposits were
$636.4 million and represented a 3.9% and 3.3% growth rate over the prior year
levels, respectively. Average earning assets increased 5.6% to $635.9 million
during the second quarter of 1994 when compared with 1993.
10
COMMERCE BANK
Form F-4
June 30, 1994
The following table presents an analysis of Commerce's return on average
assets and equity.
June 30, March 31,
Three Months Ended 1994 1993 1994
---------- ---------- ----------
As a percent of average earning assets:
Net Interest Income 4.51 % 4.42 % 4.38 %
Provision for Loan Losses (0.38) (0.49) (0.39)
Noninterest Income 1.49 1.47 1.50
Noninterest Expenses (3.95) (3.73) (3.83)
Securities Gains 0.01 - 0.04
Applicable Income Taxes (0.51) (0.57) 0.57
---------- ---------- ----------
Return on Average Earning Assets 1.16 % 1.10 % 1.13 %
Multiplied by
Average Earning Assets to Average Total Assets 92.40 92.38 92.51
---------- ---------- ----------
Return on Average Assets 1.07 % 1.01 % 1.05 %
Multiplied by
Ratio of Average Assets to Average Equity 14.95 16.40 14.52
---------- ---------- ----------
Return on Average Total Equity 16.00 % 16.56 % 15.25 %
- ---------------------------------------------------------------------------------------------
EARNINGS ANALYSIS
Net Interest Income
- -------------------
Net interest income, the principal source of Commerce's earnings, is the
amount of income generated by interest-earning assets (primarily loans and
investment securities) reduced by the total interest cost of the funds (chiefly
deposits) incurred to carry them.
Net interest income for the second quarter of 1994 was $7.15 million, a
8.9% increase over comparative 1993. Net interest income for the first half of
1994 was $14.0 million or 9.3% above comparative 1993. Net interest margin for
the second quarter and first half of 1994 was 4.51% and 4.44%, respectively, and
represented an improvement from 4.37% and 4.35% for the comparative periods of
1993. The increase in net interest income for 1994 benefitted from growth in
average earning assets, including 18% loan growth for both periods, and
favorable interest rate spreads due to a reduced cost of funds. Net interest
spread for the second quarter of 1994 was 3.94% versus 3.81% for the second
quarter of 1993
11
COMMERCE BANK
Form F-4
June 30, 1994
and 3.83% for the first quarter of 1994. Net interest spread for the first half
of 1994 improved 8 basis points, to 3.88% from 3.80% for the first half of 1993.
Average earning assets increased $33.4 million, or 5.6%, rising from $602.5
million for the second quarter of 1993 to $635.9 million in 1994. Average
earning assets for the first half of 1994 were $633.9 million, or 7.1% above
$592.0 million for comparative 1993. Average earning assets increased 6.4%
during the second quarter of 1994 when compared with the first quarter of 1994
while the mix reflected continued growth in loans.
The annualized yield on earning assets decreased 22 basis points, from
7.90% for the second quarter of 1993 to 7.68% for comparative 1994.
The annualized cost of interest bearing liabilities decreased 35 basis
points, from 4.09% for the second quarter of 1993 to 3.74% for the second
quarter of 1994. The decrease in annualized cost of interest bearing
liabilities is due to the deposit mix to a greater proportion of rate sensitive
products, increased noninterest bearing deposits, and lower rates of interest.
(See Deposits). The cost of interest bearing liabilities decreased 16 basis
points, from 3.71% for the first quarter of 1994 to 3.74% for the second quarter
of 1994.
Substantially, the same factors impacted net interest income when comparing
the first half of 1994 with 1993 as were discussed above for the three months
ended June 30, 1994 and 1993.
12
COMMERCE BANK
Form F-4
June 30, 1994
The following tables provide Commerce's average balance sheet, interest
earned or paid and the related yields and rates on major categories.
(Dollars in thousands) Three Months Ended June 30, / Three Months Ended June 30,
----------------------------------------------------------------------------------------------------
Average Balance Income/Expense Yield/Rate Change due to (3)
--------------------- --------------------- --------------- Increase ----------------------
Assets: 1994 1993 1994 1993 1994 1993 (Decrease) Rate Volume
---------- ---------- --------- --------- ------- ------ ---------- --------- ----------
Loans, net of unearned
income & deferred fees
(1)(2) $ 400,133 $ 339,361 $ 8,659 $ 7,625 8.68 % 9.01 % $ 1,034 $ (270) $ 1,304
Investment securities(2) 221,782 246,729 3,344 4,075 6.05 6.62 (731) (336) (395)
Temporary investments 14,030 16,409 178 164 5.12 4.01 15 40 (26)
---------- ---------- --------- --------- ---------- --------- ----------
Total earning assets 635,945 602,499 12,181 11,864 7.68 7.90 318 (566) 883
Allowance for loan losses (6,723) (6,313)
Nonearning assets 59,062 55,984
---------- ----------
Total assets $ 688,284 $ 652,170
========== ==========
Liabilities &
Shareholders' Equity:
Interest bearing deposits $ 532,136 $ 511,875 $ 4,865 $ 5,133 3.67 % 4.02 % $ (268) $ (464) $ 196
Short-term borrowings 77 859 - 7 2.59 3.27 (7) (1) (6)
Long-term debt 6,799 6,878 167 159 9.85 9.27 8 10 (2)
---------- ---------- --------- --------- ---------- --------- ----------
Total interest bearing
liabilities 539,012 519,612 5,032 5,299 3.74 4.09 (267) (455) 188
Noninterest bearing
liabilities 103,127 92,636
Shareholders' equity 46,145 39,922
---------- ----------
Total liabilities &
equity $ 688,284 $ 652,170
========== ========== --------- --------- ---------- --------- ----------
Net interest income $ 7,149 $ 6,565 $ 585 $ (111) $ 695
========= ========= ========== ========= ==========
Net interest spread 3.94 % 3.81 %
Net interest margin 4.51 % 4.37 %
- ----------------------------------------------------------------------------------------------------------------------------------
Three Months Ended June 30, / Three Months Ended March 31,
---------------------------------------------------------------------------------------------------
Average Balance Income/Expense Yield/Rate Change due to (3)
--------------------- --------------------- --------------- Increase ----------------------
Assets: 1994 1993 1994 1993 1994 1993 (Decrease) Rate Volume
---------- ---------- --------- --------- ------- ------ ---------- --------- ----------
Loans, net of unearned
income & deferred fees
(1)(2) $ 400,133 $ 384,233 $ 8,659 $ 8,045 8.68 % 8.49 % $ 614 $ 214 $ 400
Investment securities(2) 221,782 234,876 3,344 3,541 6.05 6.11 (197) (29) (168)
Temporary investments 14,030 12,821 178 164 5.12 5.19 14 (2) 16
---------- ---------- --------- --------- ---------- --------- ----------
Total earning assets 635,945 631,930 12,181 11,750 7.68 7.54 431 183 248
Allowance for loan losses (6,723) (6,723)
Nonearning assets 59,062 57,912
---------- ----------
Total assets $ 688,284 $ 683,119
========== ==========
Liabilities &
Shareholders' Equity:
Interest bearing deposits $ 532,136 $ 528,279 $ 4,865 $ 4,737 3.67 % 3.64 % $ 128 $ 67 $ 61
Short-term borrowings 77 3,623 - 29 2.59 2.50 (29) (5) (24)
Long-term debt 6,799 6,818 166 165 9.79 9.81 1 0 1
---------- ---------- --------- --------- ---------- --------- ----------
Total interest bearing
liabilities 539,012 538,720 5,031 4,931 3.74 3.71 100 62 38
Noninterest bearing
liabilities 103,127 97,571
Shareholders' equity 46,145 46,828
---------- ----------
Total liabilities &
equity $ 688,284 $ 683,119
========== ========== ---------- ---------- ---------- --------- ----------
Net interest income $ 7,150 $ 6,819 $ 331 $ 121 $ 210
========== ========== ========== ========= ==========
Net interest spread 3.94 % 3.83 %
Net interest margin 4.51 % 4.38 %
- ----------------------------------------------------------------------------------------------------------------------------------
13
COMMERCE BANK
Form F-4
June 30, 1994
Three Months Ended June 30, / Three Months Ended June 30,
----------------------------------------------------------------------------------------------------
Average Balance Income/Expense Yield/Rate Change due to (3)
--------------------- --------------------- --------------- Increase ----------------------
Assets: 1994 1993 1994 1993 1994 1993 (Decrease) Rate Volume
---------- ---------- --------- --------- ------- ------ ---------- --------- ----------
Loans, net of unearned
income & deferred fees
(1)(2) $ 392,227 $ 333,154 $ 16,704 $ 15,002 8.59 % 9.14 % $ 1,702 $ (925) $ 2,627
Investment securities(2) 228,293 243,380 6,885 8,077 6.08 6.69 (1,192) (710) (482)
Temporary investments 13,429 15,523 343 323 5.15 4.19 20 68 (48)
---------- ---------- --------- --------- ---------- --------- ----------
Total earning assets 633,949 592,057 23,932 23,402 7.61 7.97 530 (1,567) 2,097
Allowance for loan losses (6,818) (6,101)
Nonearning assets 58,585 54,985
---------- ----------
Total assets $ 685,716 $ 640,941
========== ==========
Liabilities &
Shareholders' Equity:
Interest bearing deposits $ 530,218 $ 506,784 $ 9,602 $ 10,311 3.65 % 4.10 % $ (709) $ (1,170) $ 461
Short-term borrowings 1,840 646 30 9 3.29 2.81 21 1 20
Long-term debt 6,808 6,450 331 304 9.80 9.50 27 9 18
---------- ---------- --------- --------- ---------- --------- ----------
Total interest bearing
liabilities 538,866 513,880 9,963 10,624 3.73 4.17 (661) (1,160) 499
Noninterest bearing
liabilities 100,366 87,903
Shareholders' equity 46,484 39,158
---------- ----------
Total liabilities &
equity $ 685,716 $ 640,941
========== ========== ---------- --------- ----------
Net interest income $ 13,969 $ 12,778 $ 1,191 $ (407) $ 1,598
========= ========= ========== ========= ==========
Net interest spread 3.88 % 3.80 %
Net interest margin 4.44 % 4.35 %
- ----------------------------------------------------------------------------------------------------------------------------------
(1) Includes nonaccrual loans, and income on such loans is recognized on a
cash basis.
(2) Interest and yields are presented on a book basis, as tax-equivalent
adjustments are not significant.
(3) The changes for each category of income and expenses are divided between
the portion of change attributable to the variances in average levels and
yields or rates for that category, with the amount of change that cannot
be separated being allocated to each variance proportionately.
Noninterest Income
- ------------------
Total noninterest income was $2.37 million for the second quarter of 1994,
representing a 8.1% increase over the same period of 1993. Total noninterest
income, exclusive of securities gains, for the first half of 1994 was $4.69
million, or 9.7% above the $4.28 million earned in comparative 1993. Commerce
recorded $69,000 in securities gains during the first half of 1994 compared with
$86,000 for the same period of 1993. Noninterest income, exclusive of
securities gains, for the second quarter of 1994 was $23,000 or 1.0% above the
first quarter of 1994.
The increase in noninterest income, exclusive of securities gains and
mortgage brokerage income, for the second quarter and first half of 1994
benefitted from growth in all categories of income. The decrease in mortgage
brokerage income reflects a decline in refinancing activity due to increased
interest rates.
14
COMMERCE BANK
Form F-4
June 30, 1994
The following tables provide an analysis of noninterest income.
(Dollars in thousands)
Increase(Decrease)
----------------------------------------------------------------------------------------------------
Three Months Ended June 30, /
------------------------------------------------ ----------------------------------------------
Three Months Ended June 30, Three Months Ended March 31,
------------------------------------------------ ----------------------------------------------
1994 over 1993 1994 over 1994
---------------------- ----------------------
1994 1993 Amount Percent 1994 1994 Amount Percent
-------- -------- -------- --------- -------- -------- -------- ---------
Service charges on deposit
accounts $ 1,021 $ 825 $ 196 23.8 % $ 1,021 $ 939 $ 82 8.7 %
Mortgage brokerage income 391 622 (231) (37.1) 391 590 (199) (33.7)
Credit card merchant fees 275 234 41 17.5 275 196 79 40.3
Trust income 172 165 7 4.2 172 170 2 1.2
Other income 499 344 155 45.1 499 440 59 13.4
-------- -------- -------- -------- -------- --------
2,358 2,190 168 7.7 2,358 2,335 23 1.0
Securities gains 10 - 10 n/m 10 59 (49) (83.1)
-------- -------- -------- -------- -------- --------
Total noninterest
income $ 2,368 $ 2,190 $ 178 8.1 % $ 2,368 $ 2,394 $ (26) (1.1) %
======== ======== ======== ======== ======== ========
Six Months Ended June 30,
----------------------------------------------------
1994 over 1993
----------------------------
1994 1993 Amount Percent
-------- -------- ------------ ------------
Service charges on deposit accounts $ 1,960 $ 1,595 $ 365 22.9 %
Mortgage brokerage income 981 1,368 (387) (28.3)
Credit card merchant fees 471 402 69 17.2
Trust income 342 315 27 8.6
Other income 939 597 342 57.3
-------- -------- ------------
4,693 4,277 419 9.7
Securities gains 69 86 (17) (19.8)
-------- -------- ------------
Total noninterest income $ 4,762 $ 4,363 $ 399 9.1 %
======== ======== ============
n/m -- not meaningful
Noninterest Expense
- -------------------
Total noninterest expense for the second quarter and first half of 1994 was
$6.26 million and $12.2 million, respectively, which represented a 13.0% and
12.4% increase over the comparative periods of 1993. The increase in
noninterest expense is primarily due to servicing a larger customer base in
1994.
15
COMMERCE BANK
Form F-4
June 30, 1994
Salaries and benefits expense was $2.82 million for the second quarter of
1994, up 6.1% from comparative 1993. Salaries and benefits for the first six
months of 1994 were $5.69 million or 9.2% above comparative 1993. The higher
expense reflected regular merit and promotional increases along with an increase
in the number of employees to service growth in the customer base. The number
of full-time-equivalent employees was 344 at June 30, 1994 compared with 304 for
June 30, 1993.
Occupancy of bank premises expense increased 15.2% or $179,000, during the
first half of 1994 when compared with 1993 due to scheduled rent increases and
increased lease space for branch locations and operations. Furniture and
equipment expense increased 8.4% or $68,000 during the first half of 1994 over
comparative 1993 as a result of expenses associated with maintenance and
depreciation charges from equipment upgrades. FDIC insurance premiums increased
7.7%, or $50,000, during the first half of 1994 when compared with 1993 due to
growth in the deposit base.
Other expenses increased 18.7%, or $567,000 for the first half of 1994 when
compared with 1993. The increase was primarily due to the added expenses of
supporting customer services.
Noninterest expense for the second quarter of 1994 increased $298,000 or
5.0% when compared with the first quarter of 1994.
16
COMMERCE BANK
Form F-4
June 30, 1994
The following tables provide an analysis of noninterest expense.
(Dollars in thousands)
Increase(Decrease)
-------------------------------------------------------------------------------------
Three Months Ended June 30,
-------------------------------------- --------------------------------------
Three Months Ended June 30,/ Three Months Ended March 31,
-------------------------------------- --------------------------------------
1994 over 1993 1994 over 1994
---------------- ----------------
1994 1993 Amount Percent 1994 1994 Amount Percent
------- ------- ------ ------- ------- ------- ------ -------
Salaries and benefits $ 2,818 $ 2,656 $ 162 6.1 % $ 2,818 $ 2,875 $ (57) (2.0)%
Occupancy of bank premises 688 591 97 16.4 688 665 23 3.5
Furniture and equipment 465 387 78 20.2 465 414 51 12.3
FDIC insurance premiums 351 326 25 7.7 351 351 - -
Other expenses 1,940 1,582 358 22.6 1,940 1,659 281 16.9
------- ------- ------ ------- ------- ------
Total noninterest expenses $ 6,262 $ 5,542 $ 720 13.0 % $ 6,262 $ 5,964 $ 298 5.0 %
======= ======= ====== ======= ======= ======
Six Months Ended June 30,/
---------------------------------------
1994 over 1993
-----------------
1994 1993 Amount Percent
------- ------- ------- -------
Salaries and benefits $ 5,693 $ 5,211 $ 482 9.2 %
Occupancy of bank premises 1,353 1,174 179 15.2
Furniture and equipment 879 811 68 8.4
FDIC insurance premiums 702 652 50 7.7
Other expenses 3,599 3,032 567 18.7
------- ------- -------
Total noninterest expenses $12,226 $10,880 $1,346 12.4 %
======= ======= =======
Provision for Income Taxes
- --------------------------
Commerce reported a provision for income taxes of $815,000 and $840,000 for
the second quarter of 1994 and 1993, respectively, for an effective tax rate of
30.7% and 33.8%. The provision for income taxes for the first half of 1994 was
$1.70 million, or 7.2% above the 1993 level and was due to increased earnings.
BALANCE SHEET ANALYSIS
Temporary Investments
- ---------------------
Temporary investments were $12.6 million at June 30, 1994 and consisted of
interest bearing deposits with other banks in the amount of $1.0 million,
mortgages held for sale of $1.6 million, and federal funds sold of $10.0
million. Temporary investments are used for daily cash management purposes,
manage-
17
COMMERCE BANK
Form F-4
June 30, 1994
ment of short-term interest rate opportunities and interest rate risk, and
as a result daily balances vary. The average balance of temporary investments
during the second quarter of 1994 was $14.0 million and represented 2.2% of
total earning assets compared with $16.4 million or 2.7% for 1993. The average
balance of temporary investments for the first half of 1994 was $13.4 million,
or 2.1% of total average earning assets, compared with $15.5 million, or 2.62%
for comparative 1993.
Securities
- ----------
As further discussed under Financial Statements Note 4, Commerce adopted
SFAS No. 115 effective January 1, 1994. Total securities were $217.7 million on
June 30, 1994, representing a 14.4% decrease from comparative 1993.
Loans and Asset Quality
- -----------------------
During the first six months of 1994, average loans, net of unearned income
and deferred fees, increased 17.7% to $392.2 million and were 61.9% of total
earning assets compared with 56.2% for 1993. Loans, net of unearned income were
$408.4 million at June 30, 1994, or 17.7% and $61.4 million above the $347.1
million reported at June 30, 1993.
Nonperforming assets at June 30, 1994 were $5.27 million as compared with
$4.88 million a year earlier and $4.0 million at the end of 1993.
Net loan charge-offs were $221,000 for the second quarter of 1994, compared
with $291,000 for the same period of 1993. Net loan charge-offs for the first
half of 1994 declined 2.2% to $539,000 from $551,000 for comparative 1993. The
provision for loan losses for the second quarter of 1994 was $600,000, compared
with the $725,000 provision for comparative 1993. The provision for loan losses
for the first half of 1994 was $1.2 million, or 21.3% and $325,000 lower than
the $1.53 million reported for comparative 1993. The decline in the provision
for loan losses during 1994 correlates with a lower level of net loan charge-
offs and improvement in other asset quality indicators.
The allowance for loan losses at June 30, 1994 was $7.19 million, which was
equivalent to 1.76% of period end loans, compared with 1.91% for the second
quarter of 1993.
18
COMMERCE BANK
Form F-4
June 30, 1994
The following table summarizes activity in the allowance for loan losses
for the periods indicated.
(In thousands)
Three Months Ended Six Months Ended
------------------------------- ------------------
June 30, June 30, March 31, June 30,
Allowance for Loan Losses 1994 1993 1994 1994 1993
-------- -------- --------- -------- --------
Balance, beginning of period $ 6,809 $ 6,211 $ 6,527 $ 6,527 $ 5,671
Provision charged to earnings 600 725 600 1,200 1,525
Loan charge-offs (314) (402) (411) (725) (774)
Loan recoveries 93 111 93 186 223
-------- -------- --------- -------- --------
Net charge-offs (221) (291) (318) (539) (551)
-------- -------- --------- -------- --------
Balance, end of period $ 7,188 $ 6,645 $ 6,809 $ 7,188 $ 6,645
======== ======== ========= ======== ========
The following table shows the level of nonperforming assets and related
information for the periods indicated.
(In thousands)
June 30, June 30, March 31,
Nonperforming assets: 1994 1993 1994
-------------- ------------- --------------
Nonperforming loans $ 2,403 $ 444 $ 1,494
Foreclosed property 2,870 4,433 2,733
-------------- ------------- --------------
Total nonperforming assets 5,273 4,877 4,227
============== ============= ==============
Loans past due 90 days accruing interest $ 1,647 $ 339 $ 1,010
- -------------------------------------------------------------------------------------------------------
Asset Quality Ratios
Allowance for loan losses to nonperforming loans 2.99 X 14.97 X 4.56 X
Allowance for loan losses to period end loans 1.76 % 1.91 % 1.74 %
Nonperforming assets to period end loans 1.29 1.41 0.61
Nonperforming assets to period end assets 0.76 0.73 1.08
Net charge-offs to average loans (annualized) 0.28 0.33 0.33
- -------------------------------------------------------------------------------------------------------
19
COMMERCE BANK
Form F-4
June 30, 1994
Deposits
- --------
Total deposits at June 30, 1994 were $636.4 million, representing an
increase of 3.3% or $20.2 million over comparative 1993. Total average deposits
increased 6.1% during the first six months of 1994 to $626.8 million when
compared with the first half of 1993.
The cost of interest bearing deposits was 3.67% for the second quarter of
1994 compared with 4.02% for the second quarter of 1993 and 3.64% for the first
quarter of 1994. The cost of interest bearing deposits for the first half of
1994 was 3.65%, or 45 basis points lower than the 4.10% cost for the first half
of 1993. The lower cost in 1994 reflects the continued lowering of market rates
of interest.
Average noninterest bearing demand deposits as a percentage of average
total deposits were 15.41% and 14.24% during the first half of 1994 and 1993,
respectively. Average noninterest bearing demand deposits were 15.8% and 14.8%
of average total deposits for the second quarter of 1994 and 1993, respectively.
The following table sets forth a summary of Commerce's various deposits
categories and their respective cost rates.
(In thousands)
Average Balance/Cost Rate
- --------------------------------------------------------------------------------------------------------------------------
June 30, June 30, March 31,
Three months ended, 1994 1993 1994
----------- ----------- -----------
Interest bearing demand $ 73,140 2.21 % $ 60,280 2.52 % $ 69,688 2.21 %
Money market savings 243,938 3.31 249,506 3.62 237,718 3.14
Certificates:Less than $100,000 152,235 4.82 150,989 5.17 158,305 4.85
Greater than $100,000 31,200 5.26 24,527 5.89 33,985 5.17
Regular savings 31,623 2.71 26,573 2.97 28,583 2.74
----------- ----------- -----------
Total interest bearing 532,136 3.67 511,875 4.02 528,279 3.64
Noninterest bearing 100,058 89,012 93,081
----------- ----------- -----------
Total $ 632,194 3.17 % $ 600,887 3.43 % $ 621,360 3.09 %
=========== =========== ===========
20
COMMERCE BANK
Form F-4
June 30, 1994
(In thousands)
Average Balance/Cost Rate
- ---------------------------------------------------------------------------------------------
June 30, June 30,
Six months ended, 1994 Mix 1993 Mix
-------- ------ -------- ------
Interest bearing demand $ 71,423 2.21 % 13.47 $ 60,086 2.62 % 11.86
Money market savings 240,845 3.23 45.42 247,833 3.97 48.90
Certificates:Less than $100,000 154,805 4.85 29.20 151,027 5.23 29.80
Greater than $100,000 32,585 5.23 6.15 23,233 5.89 4.58
Regular savings 30,560 2.70 5.76 24,605 2.96 4.86
-------- ------ -------- ------
Total interest bearing 530,218 3.65 100.00 506,784 4.10 100.00
Noninterest bearing 96,589 84,177
-------- --------
Total $626,807 3.21 % $590,961 3.62 %
-------- --------
Short-Term Borrowings and Long-Term Debt
- ----------------------------------------
Commerce had no short-term borrowings at June 30, 1994, however, the
average balance during the first half of 1994 was $1.8 million. Long-term debt
was $6.79 million at June 30, 1994 and consisted of $5.0 million, 10%
convertible subordinated capital notes issued September 1, 1990 and capital
lease obligations of $1.79 million.
Common Stock and Dividends
- --------------------------
Commerce's Board of Directors declared a $.15 cash dividend during the
second quarter of 1994 representing a 25% increase over the $.12 declared in
1993.
The high and low prices for Commerce's common stock are set forth with
other selected quarterly financial data on page 9.
Liquidity and Capital Structure
- -------------------------------
Commerce continued to experience a high degree of liquidity during the
second quarter of 1994, as reflected in its liquid asset ratio of 37.5% at June
30, 1994. Average loans to average deposits were 62.6% for the first half of
1994 in comparison with 56.0% for 1993.
Shareholders' equity was $46.6 million at June 30, 1994, representing a
21
COMMERCE BANK
Form F-4
June 30, 1994
15.6% increase over the prior year.
The following table provides information on the risk-based capital
position of Commerce.
June 30, December 31,
1994 1993 1993
----------- ---------- --------------
Tier I Capital:
Shareholders' equity $ 47,187 $ 40,322 $ 43,589
Less: intangible assets 888 2,077 1,024
----------- ----------- --------------
Total Tier I 46,299 38,245 42,565
Tier II Capital:
Qualifying allowance for loan losses (1) 5,655 4,947 5,460
Mandatory convertible debt instruments 4,995 4,995 4,995
----------- ---------- --------------
Total Tier II 10,650 9,942 10,455
----------- ---------- --------------
Total Risk Based Capital $ 56,949 $ 48,187 $ 53,020
=========== =========== ==============
Total Assets $692,067 $666,397 $689,630
Total Risk Weighted Assets 450,871 394,039 436,800
Risk Weighted Assets to Total Assets 65.15% 59.13% 63.34%
Risk Based Capital Ratios:
Tier I (4% minimum requirement) 10.27% 9.71% 9.74%
Total (8% minimum requirement) 12.63% 12.23% 12.14%
Tier I Leverage Ratio (3% minimum requirement) 6.67% 5.99% 6.49%
- --------------------------------------------------------------------------------
(1) Limited to 1.25% of risk weighted assets
22
COMMERCE BANK
Form F-4
June 30, 1994
Signatures
Under the requirements of the Securities Exchange Act of 1934, the Bank has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
COMMERCE BANK
Date: August 10, 1994 /s/ Gerald T. McDonald
--------------- ----------------------------
Gerald T. McDonald
Executive Vice President/CFO
(804) 456-1006
Date: August 10, 1994 /s/ Clyde E. McFarland
--------------- ----------------------------
Clyde E. McFarland
Vice President/Controller
(804) 456-1093
23