1
EXHIBIT 99
[AMCORE FINANCIAL, INC. LOGO]
Date: July 26, 1995
Contact: Ben Rubendall
815-961-7164
AMCORE FINANCIAL, INC., REPORTS LOWER SECOND QUARTER EARNINGS DUE TO PREVIOUSLY
ANNOUNCED ONE-TIME CHARGES
ROCKFORD, ILL. - AMCORE Financial, Inc. posted second quarter earnings of
$1.1 million, or 8 cents per share for the period ended June 30, 1995
compared with $5.4 million or 39 cents per share for the same period in 1994.
All financial information has been restated to reflect the mergers with
First State Bancorp of Princeton, Ill., Inc., NBA Holding Company of Aledo, and
NBM Bancorp, Inc., of Mendota.
Second quarter earnings were affected by previously announced charges for
the early adoption of Statement of Financial Accounting Standards (FAS) No.
121- "Accounting for the Impairment of Long-Lived Assets" and other costs
related to recent mergers. Total one-time charges on an after-tax basis
amounted to $3.5 million or 25 cents per share. The merger-related charges
were associated with the May 24th combination with NBM and the recognition of
remaining costs from the FSB and NBA transactions.
"We made a change in accounting for merger costs to record them at the time
a transaction is completed, rather than recognizing them over a period of
years," said Carl J. Dargene, chairman, president and chief executive officer.
"This has an adverse impact on our earnings for the quarter, however, it will
allow us to focus on true operating results going forward."
FAS 121 requires an asset revaluation whenever a change in events or other
circumstances indicate the carrying amount may not be fully recoverable. The
charges of approximately $2.0 million include write-downs of purchase accounting
adjustments and other intangibles assigned to the former Illinois National Bank
building in Rockford and the reduction of goodwill and other intangibles
associated with the acquisition of a collection agency.
Also impacting earnings were approximately $700,000 in higher loan
loss provisions due to strong loan growth. Reserve coverage of
non-performing loans increased to 126 percent, up from 120 percent in the same
quarter of 1994 even though net charge-offs increased $355,000 over the same
quarter in 1994.
Net interest income for the quarter was $19.5 million, up 1.6 percent
from the same quarter of 1994. The net interest margin was 4.15 percent,
down 12 basis points compared with the first quarter of 1995. Compared with
the second quarter of 1994, the net interest margin fell 30 basis points.
Average loans increased $165 million, or 15.8 percent, offsetting the
compression in margins caused by an increase in funding costs, particularly on
certificates of deposit.
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AMCORE Financial, Inc.
Second Quarter Earnings 1995
Page 2
Fee income for the quarter was up $791,000, or 11 percent, excluding
security gains. Approximately $230,000 of this increase was due to the early
adoption of FAS 122 - "Accounting for Mortgage Servicing Rights." This new
accounting rule allows for the recognition of the value of servicing rights
on new mortgage loans. Mortgage servicing income also rose $131,000 as a result
of growth in the mortgage servicing portfolio. Trust fees rose $185,000, or
6.6 percent compared with the second quarter of 1994.
Total operating expenses for the quarter were up $7.3 million from the
1994 quarter. However, without the special one-time charges, the increase was
only $1.7 million, or 9.0 percent, partially reflecting the costs associated
with branch expansion during the past 12 months and the upgrades in data
processing capabilities.
"We are still in the process of consolidating support for our new
affiliates," Dargene said. "We will see reductions in our expense totals as a
result of these efforts. Also, the charges we have taken this quarter will
result in lower expenses in the future, which will improve our operating
results going forward."
Total income taxes decreased $2.6 million from the same quarter of 1994 due
to tax benefits on the one-time charges and the recognition of tax credits.
AMCORE Financial, Inc. is a northern Illinois-based bank holding company
with assets of approximately $2.3 billion. Its holdings include eight
subsidiary banks operating in 37 locations.
The company also has seven primary financial service subsidiaries: a
trust company, a mortgage company, a full-service broker-dealer, a capital
management company, a collection agency, a consumer finance company, and an
insurance company. AMCORE common stock is listed on NASDAQ under the symbol
"AMFI".
###
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AMCORE FINANCIAL, INC.
CONSOLIDATED KEY FINANCIAL DATA SUMMARY
NOTE: All amounts have been restated to reflect the mergers with First State
Bancorp of Princeton, Illinois, Inc., NBA Holding Company of
Aledo, Illinois, and the May 24, 1995 merger with NBM Bancorp,
Inc. These mergers were accounted for under the pooling of
interests method.
QUARTER ENDED JUNE 30,
-------------------------------------
(IN THOUSANDS, EXCEPT SHARE DATA) PERCENT
FINANCIAL HIGHLIGHTS 1995 1994 CHANGE
-------------------------------------------------------------------------------------------
Net revenues, including security gains............ $27,828 $26,722 4.1%
Operating expenses................................ 26,637 19,313 37.9%
Net income........................................ 1,140 5,441 -79.0%
Net income per share.............................. 0.08 0.39 -79.5%
Cash dividends per share.......................... 0.15 0.15 0.0%
Book value per share.............................. 13.81 13.04 5.9%
(IN THOUSANDS, EXCEPT SHARE DATA) SIX MONTHS ENDED JUNE 30,
-------------------------------------
PERCENT
FINANCIAL HIGHLIGHTS 1995 1994 CHANGE
-------------------------------------------------------------------------------------------
Net revenues, including security gains............ $55,209 $53,345 3.5%
Operating expenses................................ 47,309 38,710 22.2%
Net income........................................ 5,757 10,773 -46.6%
Net income per share.............................. 0.41 0.77 -46.8%
Cash dividends per share.......................... 0.30 0.28 6.9%
Book value per share..............................
TRAILING TWELVE MONTHS
(IN THOUSANDS, EXCEPT SHARE DATA) ENDED JUNE 30,
-------------------------------------
PERCENT
FINANCIAL HIGHLIGHTS 1995 1994 CHANGE
-------------------------------------------------------------------------------------------
Net revenues, including security gains............ $110,659 $107,647 2.8%
Operating expenses................................ 87,289 77,711 12.3%
Net income........................................ 16,785 21,658 -22.5%
Net income per share.............................. 1.20 1.55 -22.7%
Cash dividends per share.......................... 0.63 0.53 19.3%
Book value per share..............................
QUARTER ENDED JUNE 30,
----------------------------------------
PERCENT
KEY FINANCIAL RATIOS (A) 1995 1994 CHANGE
-----------------------------------------------------------------------------------------------------------
Return on average assets..................................... 0.83% 1.07% -22.3%
Return on average equity..................................... 9.73% 11.76% -17.3%
Net interest margin (FTE).................................... 4.15% 4.45% -6.7%
Net operating expense/average assets......................... 2.29% 2.31% -0.9%
Average total equity to average assets....................... 8.55% 9.10% -6.0%
Other income/net revenues (1)................................ 28.9% 27.1% 6.6%
Efficiency Ratio (FTE)....................................... 71.3% 67.7% 5.3%
(A) All 1995 ratios have been adjusted to exclude one-time charges
recorded in the second quarter.
INCOME STATEMENT
Interest income................................................. $40,371 $33,725 19.7%
Interest expense................................................ 20,900 14,557 43.6%
--------------------------------------
Net interest income.......................................... 19,471 19,168 1.6%
Provision for loan losses....................................... 871 174 400.6%
Other Income:
Trust income................................................. 2,977 2,792 6.6%
Service charges on deposits.................................. 1,695 1,671 1.4%
Mortgage revenues............................................ 1,002 645 55.3%
Collection fee income........................................ 469 435 7.8%
Other........................................................ 1,787 1,596 12.0%
--------------------------------------
Total other income........................................ 7,930 7,139 11.1%
Net security gains.............................................. 427 415 2.9%
Operating expenses:
Personnel costs.............................................. 12,140 10,129 19.9%
Net occupancy expense........................................ 2,734 1,176 132.5%
Equipment expense............................................ 2,802 1,533 82.8%
Insurance expense............................................ 1,163 1,134 2.6%
Professional fees............................................ 1,020 778 31.1%
Amortization of intangible assets............................ 2,320 648 258.0%
Other........................................................ 4,458 3,915 13.9%
--------------------------------------
Total operating expenses.................................. 26,637 19,313 37.9%
--------------------------------------
Income before income taxes...................................... 320 7,235 -95.6%
Income taxes.................................................... (820) 1,794 -145.7%
--------------------------------------
Net income................................................ $1,140 $5,441 -79.0%
======================================
Average shares outstanding (000)................................ 14,069 14,018 0.4%
Ending shares outstanding (000)................................. 14,087 14,021 0.5%
SIX MONTHS ENDED JUNE 30,
----------------------------------------
PERCENT
KEY FINANCIAL RATIOS (A) 1995 1994 CHANGE
----------------------------------------
Return on average assets..................................... 0.85% 1.07% -20.9%
Return on average equity..................................... 9.89% 11.80% -16.1%
Net interest margin (FTE).................................... 4.21% 4.51% -6.7%
Net operating expense/average assets......................... 2.33% 2.36% -1.2%
Average total equity to average assets....................... 8.59% 9.11% -5.7%
Other income/net revenues (1)................................ 28.4% 27.1% 4.6%
Efficiency Ratio (FTE)....................................... 71.2% 68.0% 4.7%
(A) All 1995 ratios have been adjusted to exclude one-time charges recorded in
the second quarter.
INCOME STATEMENT
Interest income................................................. $78,631 $66,707 17.9%
Interest expense................................................ 39,825 28,401 40.2%
------------------------------------------
Net interest income.......................................... 38,806 38,306 1.3%
Provision for loan losses....................................... 1,600 304 426.3%
Other Income:
Trust income................................................. 5,827 5,450 6.9%
Service charges on deposits.................................. 3,427 3,287 4.3%
Mortgage revenues............................................ 1,563 1,416 10.4%
Collection fee income........................................ 922 887 3.9%
Other........................................................ 3,618 3,213 12.6%
------------------------------------------
Total other income........................................ 15,357 14,253 7.7%
Net security gains.............................................. 1,046 786 33.1%
Operating expenses:
Personnel costs.............................................. 23,465 20,524 14.3%
Net occupancy expense........................................ 4,100 2,326 76.3%
Equipment expense............................................ 4,440 3,037 46.2%
Insurance expense............................................ 2,297 2,263 1.5%
Professional fees............................................ 1,587 1,519 4.5%
Amortization of intangible assets............................ 2,962 1,298 128.2%
Other........................................................ 8,458 7,743 9.2%
------------------------------------------
Total operating expenses.................................. 47,309 38,710 22.2%
------------------------------------------
Income before income taxes...................................... 6,300 14,331 -56.0%
Income taxes.................................................... 543 3,558 -84.7%
Net income................................................ $5,757 $10,773 -46.6%
==========================================
Average shares outstanding (000)................................ 14,059 14,017 0.3%
Ending shares outstanding (000)................................. 14,087 14,021 0.5%
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AMCORE FINANCIAL, INC.
QUARTER ENDED JUNE 30,
(IN THOUSANDS) 1995 1994
------------------------------------------------------------------------ --------------------------------------------------------
ENDING AVERAGE YIELD/ AVERAGE YIELD/
BALANCE BALANCE RATE BALANCE RATE
------------------------------------------------------------------------ --------------------------------------------------------
ASSETS:
Taxable securities..................................... $631,269 $514,117 7.18% $512,342 6.12%
Tax-exempt securities (FTE)............................ 173,442 260,362 7.06% 256,368 7.65%
Other earning assets................................... 4,356 18,041 6.78% 34,008 4.23%
Mortgage loans held for sale........................... 18,418 10,392 7.69% 13,314 6.21%
Loans, net of unearned income (FTE).................... 1,234,483 1,214,870 8.80% 1,049,373 8.13%
----------- ----------- ------ ----------- ------
Total Earning Assets................................ $2,061,968 $2,017,782 8.25% $1,865,405 7.53%
Intangible assets................................... 15,343 16,682 19,177
Other non-earning assets............................ 189,116 187,788 155,642
----------- ----------- ------ ----------- ------
TOTAL ASSETS........................................ $2,266,427 $2,222,252 $2,040,224
=========== =========== ====== =========== ======
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest bearing deposits.............................. $1,535,533 $1,509,785 4.59% $1,423,762 3.56%
Non-interest bearing deposits.......................... 258,764 255,154 244,675
----------- ----------- ------ ----------- ------
Total Deposits...................................... $1,794,297 $1,764,939 $1,668,437
----------- ----------- ------ ----------- ------
Short-term borrowings.................................. 224,122 215,195 5.84% 140,784 3.68%
Long-term borrowings................................... 21,973 22,915 7.25% 27,651 7.11%
Other.................................................. 4,896 5,067 6.17% 4,301 12.03%
----------- ----------- ------ ----------- ------
Total Interest Bearing Liabilities.................. 1,786,524 1,752,962 4.78% 1,596,498 3.66%
Other liabilities................................... 26,562 24,225 13,471
----------- ----------- ------ ----------- ------
Total Liabilities................................... $2,071,850 $2,032,341 $1,854,644
Stockholders' Equity................................ 194,577 189,911 185,580
----------- ----------- ------ ----------- ------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY................................ $2,266,427 $2,222,252 $2,040,224
=========== =========== ====== =========== ======
SIX MONTHS ENDED JUNE 30,
(IN THOUSANDS) 1995 1994
---------------------------------------------------------- ------------------------------------------------------------
AVERAGE YIELD/ AVERAGE YIELD/
BALANCE RATE BALANCE RATE
---------------------------------------------------------- ------------------------------------------------------------
ASSETS:
Taxable securities..................................... $508,811 7.20% $509,630 6.10%
Tax-exempt securities (FTE)............................ 258,012 7.12% 250,355 7.79%
Other earning assets................................... 20,019 6.45% 33,949 4.00%
Mortgage loans held for sale........................... 8,718 8.08% 12,209 7.35%
Loans, net of unearned income (FTE).................... 1,197,232 8.71% 1,040,918 8.14%
----------- ------ ----------- -------
Total Earning Assets................................ $1,992,792 8.18% $1,847,061 7.57%
Intangible assets................................... 17,321 19,456
Other non-earning assets............................ 177,731 154,918
----------- ------ ----------- -------
TOTAL ASSETS........................................ $2,187,844 $2,021,435
=========== ====== =========== =======
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest bearing deposits.............................. $1,491,459 4.38% $1,422,175 3.56%
Non-interest bearing deposits.......................... 250,744 242,777
----------- ------ ----------- -------
Total Deposits...................................... $1,742,203 $1,664,952
----------- ------ ----------- -------
Short-term borrowings.................................. 207,678 6.20% 123,687 3.46%
Long-term borrowings................................... 23,215 7.61% 28,703 6.80%
Other.................................................. 4,975 8.27% 4,216 11.19%
----------- ------ ----------- -------
Total Interest Bearing Liabilities.................. 1,727,327 4.65% 1,578,781 3.63%
Other liabilities................................... 21,821 15,712
----------- ------ ----------- -------
Total Liabilities................................... $1,999,892 $1,837,270
Stockholders' Equity................................ 187,952 184,165
----------- ------ ----------- -------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY................................ $2,187,844 $2,021,435
=========== ====== =========== =======
--------------------------------- ---------------------------
QUARTER ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
--------------------------------- ---------------------------
PERCENT PERCENT
ASSET QUALITY (IN THOUSANDS) 1995 1994 CHANGE 1995 1994 CHANGE
------------------------------------------------------------------------------------------ ---------------------------
Ending allowance for loan losses...................... $13,645 $14,142 -3.5%
Net charge-offs....................................... 1,004 649 54.7% $1,258 $929 35.4%
Net charge-offs to average loans (2).................. 0.33% 0.25% 32.0% 0.21% 0.18% 16.7%
Non-performing assets:
Nonaccrual......................................... $8,185 $10,942 -25.2%
Restructured....................................... 2,661 857 210.5%
-------- --------- ---------
Non-performing loans............................ 10,846 11,799 -8.1%
Other real estate owned (OREO)..................... 2,550 791 222.4%
-------- --------- ---------
Total non-performing assets..................... $13,396 $12,590 6.4%
======== ========= =========
KEY ASSET QUALITY RATIOS
Allowance to ending loans.......................... 1.11% 1.30% -14.9%
Allowance to non-performing loans.................. 125.8% 119.9% 5.0%
Non-performing loans to loans...................... 0.88% 1.08% -19.0%
Non-performing assets to loans & OREO.............. 1.08% 1.16% -6.3%
CAPITAL ADEQUACY
Total risk-based capital........................... 13.04% 13.45% -3.0%
Tier 1 risk-based capital.......................... 12.12% 12.39% -2.2%
Leverage ratio..................................... 8.11% 8.21% -1.2%
FOOTNOTES
(1) Excluding net security gains.
(2) On an annualized basis.