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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
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COMMISSION FILE NUMBER: 0-12216
OLD KENT FINANCIAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MICHIGAN
(State of Incorporation)
111 LYON ST., N.W.
GRAND RAPIDS, MICHIGAN
(Address of Principal Executive Offices)
38-1986608
(I.R.S. Employer Identification No.)
49503
(Zip Code)
Registrant's Telephone Number, Including Area Code: (616) 771-5000
Securities Registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $1 PAR VALUE
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
State the aggregate market value of the voting stock held by non-affiliates
of the registrant. The aggregate market value shall be computed by reference to
the price at which the stock was sold, or the average bid and asked prices of
such stock, as of a specified date within 60 days prior to the filing.
Aggregate Market Value as of February 18, 1998: $3,131,440,000
Indicate the number of shares outstanding of each of the registrant's
classes of common stock, as of the latest practicable date.
Common stock outstanding at February 18, 1998: 91,686,375 shares
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's annual report to shareholders for the year
ended December 31, 1997, are incorporated by reference in Part I and Part II.
Portions of the registrant's proxy statement for its April 20, 1998, annual
meeting of shareholders are incorporated by reference in Part II and Part III.
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PART I
ITEM 1. BUSINESS.
Old Kent Financial Corporation ("Old Kent") is a bank holding company and
Michigan business corporation, with its main office in Grand Rapids, Michigan.
Its principal banking subsidiary, Old Kent Bank, serves its communities with 204
banking offices in Michigan and 24 banking offices in Illinois. Old Kent Bank
engages in commercial and retail banking and provides investment management,
trust and other financial services. Approximately 84% of Old Kent's assets are
associated with banking offices serving the lower peninsula of Michigan. The
balance of banking assets are associated with offices serving northeastern
Illinois and 100 mortgage company offices located in 25 states.
Old Kent's business is concentrated in a single industry segment --
commercial banking. Old Kent's subsidiaries offer a wide range of banking,
financial, and fiduciary services. These include accepting deposits, commercial
and retail lending, consumer financing, real estate and lease financing,
equipment leasing, debit cards, safe deposit facilities, automated transaction
machine services, cash management, electronic banking services, money transfer
services, international banking services, corporate and personal trust services,
personal investment and securities brokerage, investment advisory services,
credit life insurance, insurance agency services, and other banking services.
Old Kent Mortgage Company originates residential mortgages and conducts a
traditional retail and wholesale mortgage banking business in one- to
four-family residential mortgage loans. Substantially all mortgage production is
sold into the secondary market. Mortgage servicing for all of Old Kent's
subsidiaries and independent investors is performed by Old Kent Mortgage
Services, Inc.
The principal source of revenues for Old Kent is interest and fees on
loans, which accounted for 58% of total revenues in 1997, 62% in 1996, and 62%
in 1995. Interest on securities is also a significant source of revenue,
accounting for 14% of total revenues in 1997, 17% in 1996, and 19% in 1995.
Mortgage banking activities accounted for 12% of the total revenue in 1997, 7%
in 1996, and 5% in 1995.
Old Kent has had no foreign loans at any time during the last 5 years. The
foreign activities of Old Kent primarily involve time deposits with banks and
placements for domestic customers of the banks. These activities did not
significantly impact Old Kent's financial condition or results of operations.
More detailed information concerning these foreign activities is contained in
the statistical information that appears below.
As of December 31, 1997, Old Kent conducted the business of banking through
the following bank subsidiaries:
BANK MAIN OFFICE ASSETS DEPOSITS LOANS
---- ----------- ------ -------- -----
(IN MILLIONS)
Old Kent Bank Grand Rapids, MI $13,557 $10,120 $9,662
Old Kent Bank, National Association Jonesville, MI 113 99 94
3
Old Kent also conducted business activities closely related to the business
of banking through the following direct and indirect nonbank subsidiaries as of
December 31, 1997:
SUBSIDIARY BUSINESS ACTIVITY STATES WHERE OFFICES ARE LOCATED
---------- ----------------- --------------------------------
Old Kent Brokerage Services, Inc. Full service Michigan, Illinois
brokerage services
Old Kent Financial Life Insurance Credit life and Michigan
Company disability
insurance
Old Kent Insurance Group, Inc. Insurance agency Michigan
Old Kent Mortgage Company Mortgage company Offices in 25 states
Old Kent Mortgage Services, Inc. Mortgage servicing Michigan
Vanguard Financial Service Corp. Leasing California, Illinois,
Massachusetts, Michigan
National Pacific Mortgage Corporation Mortgage company California, Oregon
Republic Mortgage Corp. Mortgage company Utah, Idaho, Nevada
Lyon Street Asset Management Company Investment advisor Michigan
RECENT DEVELOPMENTS
Effective January 1, 1997, Old Kent Bank sold for $1.3 million in cash all
of its shares of Hartger & Willard Mortgage Associates, Inc., its commercial
mortgage company.
Effective January 1, 1997, Old Kent acquired Seaway Financial Corporation
("Seaway"), a bank holding company, and its subsidiaries, The Commercial and
Savings Bank of St. Clair County and The Algonac Savings Bank. The acquisition
was effected by a merger of Seaway with and into Old Kent. This transaction was
accounted for as a purchase for accounting purposes. At the effective date,
Seaway had, on a consolidated basis, assets totaling approximately $345 million
and deposits of approximately $302 million. Seaway stockholders received
approximately 1.9 million shares of common stock of Old Kent. The principal
market for the financial services offered by Seaway was St. Clair County,
Michigan, and the communities within St. Clair County. Effective May 1, 1997,
the two subsidiary banks of Seaway were merged into and with Old Kent Bank.
On January 31, 1997, Old Kent Capital Trust I (the "Trust"), a newly formed
Delaware business trust controlled by Old Kent, issued $100,000,000 of floating
rate subordinated capital income securities. The securities, which mature
February 1, 2027, were sold in a private placement transaction and subsequently
exchanged for registered securities.
On March 1, 1997, Old Kent organized a new national bank subsidiary, Old
Kent Bank, National Association ("Old Kent Bank, N.A."), headquartered in
Jonesville, Michigan. As a part of its organization, Old Kent Bank, N.A.,
purchased the assets and assumed the liabilities of two existing branches of Old
Kent Bank, in Hillsdale and Jonesville, Michigan. Old Kent Bank, N.A.
established an operating subsidiary, GHA National Agency, Inc., to engage in
insurance agency activities from Jonesville, Michigan.
During June, 1997, Old Kent Bank sold substantially all of its credit card
loan portfolio for approximately $266 million. The sale resulted from Old Kent's
decision to discontinue business activity as an underwriter of credit card
loans.
Effective July 1, 1997, Old Kent Bank (Illinois) was merged into and with
Old Kent Bank.
On September 1, 1997, Guyot, Hicks, Anderson & Associates, Inc. ("GHA")
acquired Grand Rapids Holland Insurance Agency, Inc. ("GRH"). This acquisition
was accounted for as a purchase for accounting purposes. On December 31, 1997,
GHA merged with and into GRH. As part of that merger, GRH's name was changed to
Old Kent Insurance Group, Inc.
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On November 21, 1997, Old Kent Bank sold substantially all of its portfolio
of consumer loans collateralized by boats and other marine assets for
approximately $60 million in cash.
Old Kent is engaged in an ongoing review of the utility and economy of its
branch network. During 1997, Old Kent's bank subsidiaries sold, closed, or
eliminated through consolidation, a total of 5 bank branches.
COMPETITION
The business of banking is highly competitive. In addition to competition
from other commercial banks, banks face significant competition from nonbank
financial institutions. Savings associations compete aggressively with
commercial banks for deposits and loans. Credit unions and finance companies are
significant factors in the consumer loan market. Insurance companies, investment
firms, and retailers are significant competitors for some types of business.
Banks compete for deposits with a broad spectrum of other types of investments
such as mutual funds, debt securities of corporations, and debt securities of
the federal government, state governments and their respective agencies. The
principal methods of competition for financial services are price (interest
rates paid on deposits, interest rates charged on borrowings, and fees charged
for services) and service (convenience and quality of services rendered to
customers).
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that are based on
management's beliefs, assumptions, current expectations, estimates and
projections about the financial services industry, the economy, and about Old
Kent itself. Words such as "anticipates", "believes", "estimates", "expects",
"forecasts", "intends", "is likely", "plans", "projects", variations of such
words and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and
involve certain risks, uncertainties and assumptions ("Future Factors") that are
difficult to predict with regard to timing, extent, likelihood and degree of
occurrence. Therefore, actual results and outcomes may materially differ from
what may be expressed or forecasted in such forward-looking statements. Old Kent
undertakes no obligation to update, amend or clarify forward-looking statements,
as a result of new information, future events, or otherwise.
Future Factors that could cause a difference between an ultimate actual
outcome and a preceding forward-looking statement include, but are not limited
to, changes in interest rates and interest rate relationships; demand for
products and services; the degree of competition by traditional and
non-traditional competitors; changes in banking laws or regulations; changes in
tax laws; changes in prices, levies, and assessments; the impact of
technological advances; government and regulatory policy changes; the outcome of
pending and future litigation and contingencies; trends in customer behaviors as
well as their ability to repay loans; and the vicissitudes of the world and
national economy.
SUPERVISION AND REGULATION
Banks and bank holding companies are extensively regulated. Old Kent Bank
is chartered under Michigan law and is a member of the Federal Reserve System.
It is supervised, examined, and regulated by the Federal Reserve System, the
Federal Deposit Insurance Corporation ("FDIC") and the Financial Institutions
Bureau of the State of Michigan. Old Kent Bank, N.A. is chartered under federal
law and supervised, examined, and regulated by the Office of the Comptroller of
the Currency ("OCC"). Deposits of all of the banks are insured by the FDIC to
the extent provided by law.
Federal and state laws that govern banks significantly limit their business
activities in a number of respects. Prior approval of the Board of Governors of
the Federal Reserve System ("Federal Reserve Board"), and in some cases various
other governing agencies, is required for Old Kent to acquire control of any
additional banks. The business activities of Old Kent and its subsidiaries are
limited to banking and other activities closely related to banking.
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Old Kent is a legal entity separate and distinct from its subsidiary banks
and its other subsidiaries. Transactions between Old Kent's subsidiary banks are
significantly restricted. There are legal limitations on the extent to which Old
Kent's subsidiary banks can lend or otherwise supply funds to Old Kent or
certain of its affiliates. In addition, payment of dividends to Old Kent by
subsidiary banks is subject to various state and federal regulatory limitations.
Federal law contains a "cross-guarantee" provision that could result in
insured depository institutions owned by Old Kent being assessed for losses
incurred by the FDIC in connection with assistance provided to, or the failure
of, any other insured depository institution owned by Old Kent. Under Federal
Reserve Board policy, Old Kent is expected to act as a source of financial
strength to each subsidiary bank and to commit resources to support each
subsidiary bank. Under federal law, the FDIC also has authority to impose
special assessments on insured depository institutions to repay FDIC borrowings
from the United States Treasury or other sources and to establish semiannual
assessment rates on Bank Insurance Fund ("BIF") and Savings Association
Insurance Fund ("SAIF") deposits to maintain the BIF and SAIF at the designated
reserve ratio required by law.
Banks are subject to a number of federal and state laws and regulations
that have a material impact on their business. These include, among others,
state usury laws, state laws relating to fiduciaries, the Truth In Lending Act,
the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Expedited
Funds Availability Act, the Community Reinvestment Act, electronic funds
transfer laws, redlining laws, antitrust laws, environmental laws, and privacy
laws. The instruments of monetary policy of authorities such as the Federal
Reserve Board may influence the growth and distribution of bank loans,
investments, and deposits, and may also affect interest rates on loans and
deposits. These policies may have a significant effect on the operating results
of banks.
The nature of the business of Old Kent's subsidiaries is such that they
hold title, on a temporary or permanent basis, to a number of parcels of real
property. These include property owned for branch offices and other business
purposes as well as properties taken in or in lieu of foreclosure to satisfy
loans in default. Under current state and federal laws, present and past owners
of real property are potentially exposed to liability for the cost of clean up
of contamination on or originating from those properties. These liabilities can
be material and can exceed the value of the contaminated property.
The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994
(the "Riegle-Neal Act") substantially changed the geographic constraints
applicable to the banking industry. The Riegle-Neal Act allows bank holding
companies to acquire banks located in any state in the United States without
regard to geographic restrictions or reciprocity requirements imposed by state
law. Effective June 1, 1997 (or earlier if expressly authorized by applicable
state law), the Riegle-Neal Act also allows banks to establish interstate branch
networks through acquisitions of other banks. The establishment of de novo
interstate branches or the acquisition of individual branches of a bank in
another state (rather than the acquisition of an out-of-state bank in its
entirety) is allowed by the Riegle-Neal Act only if specifically authorized by
state law. The legislation allowed individual states to "opt-out" of certain
provisions of the Riegle-Neal Act by enacting appropriate legislation prior to
June 1, 1997.
Michigan permits both U.S. and non-U.S. banks to establish branch offices
in Michigan. The Michigan Banking Code permits, in appropriate circumstances and
with the approval of the Commissioner, (i) acquisition of Michigan banks by
FDIC-insured banks, savings banks or savings and loan associations located in
other states, (ii) sale by a Michigan bank of branches to an FDIC-insured bank,
savings bank or savings and loan association located in a state in which a
Michigan bank could purchase branches of the purchasing entity, (iii)
consolidation of Michigan banks and FDIC-insured banks, savings banks or savings
and loan associations located in other states having laws permitting such
consolidation, (iv) establishment of branches in Michigan by FDIC-insured banks
located in other states, the District of Columbia or U.S. territories or
protectorates having laws permitting a Michigan bank to establish a branch in
such jurisdiction, and (v) establishment by foreign banks of branches located in
Michigan.
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INVESTMENT ACTIVITIES
As detailed below in the "Investment Portfolio" table, Old Kent derives a
significant amount of income from its investment security portfolio, which is
composed of 5 general categories of securities: (i) U.S. Treasury and federal
agency securities; (ii) collateralized mortgage obligations ("CMOs"); (iii)
mortgage-backed pass-through securities ("MBSs"); (iv) municipal bonds; and (v)
other securities.
U.S. Treasury and federal agency securities are securities backed by the
full faith and credit of the federal government. Most of these securities pay a
fixed rate of interest. Some federal agency securities pay a floating rate of
interest determined periodically according to a predefined index. Principal is
returned at par at a fixed maturity date for most of these securities and
reported yields remain relatively constant. Some federal agency securities are
"callable" and may be prepaid prior to the stated maturity date by the issuer
according to the terms of the obligation. These prepayments could affect the
reported yields if the recognition of purchase premium or discount must be
accelerated to match the timing of the prepaid principal.
CMOs are securities that are collateralized by either whole loan mortgages
or mortgage pass-through securities. CMOs are issued by federal agencies as well
as private entities. The return on these investments is realized through regular
receipt of interest on the outstanding principal amount at a predetermined rate,
combined with any accretion of discount or amortization of premium. Principal is
returned according to a predetermined payout sequence for the various pieces, or
"tranches", of the CMO according to the terms of the obligation, as regular
payments and prepayments are made on the underlying mortgages. The timing and
regularity of these principal receipts may vary over the term of the security.
The variability of these principal payments may affect reported yields as the
recognition of purchase premium or discount must be adjusted to match the timing
of the prepaid principal.
MBSs represent an undivided interest in an underlying pool of whole loans.
Old Kent currently only holds MBSs that are guaranteed by one of the federal
agencies. Regular monthly principal and interest payments on the underlying
mortgages are "passed through" to the security holders. Principal payments may
vary as some mortgages are prepaid due to refinancing, payoff, or additional
payment towards the balances of loans that make up the pool. The variability of
these principal payments may affect reported yields as the recognition of
purchase premium or discount must be adjusted to match the timing of the prepaid
principal.
Municipal bonds represent obligations of state and political subdivisions
or their created "authorities." Municipal bonds are issued in various forms.
They may have fixed or floating rates, a fixed maturity or a "callable"
prepayment provision, and interest paid regularly or at maturity. Interest is
generally exempt from federal income tax. The reported yield may be affected by
the prepayment of principal on a callable security.
Other securities represent Federal Reserve Bank stock, Federal Home Loan
Bank stock, and Federal National Mortgage Association stock. Old Kent receives
regular dividend payments from each of these issuers.
As of December 31, 1997, Old Kent had not identified any securities as
being "high risk" as defined by the FFIEC Supervisory Policy Statement on
Securities Activities.
EMPLOYEES
In the aggregate, Old Kent and its subsidiaries had 6,328 employees (on a
full time equivalent basis) at December 31, 1997. Old Kent and its subsidiaries
are equal opportunity employers whose affirmative action programs comply with
applicable federal laws and executive orders.
STATISTICAL INFORMATION
The statistical information on the following pages further describes
certain aspects of the business of Old Kent. Additional statistical information
describing the business of Old Kent appears in the following sections of
Management's Discussion and Analysis of Financial Condition and Results of
Operations incorporated by reference in Item 7 ("MD&A"), the Selected Financial
Data incorporated by reference in Item 6
5
7
("Selected Financial Data"), and the financial statements and notes incorporated
by reference in Item 8 ("Financial Statements"):
MD&A
Average Consolidated Balance Sheets
Net Interest Income
Loan Portfolio
Nonperforming Assets
Provision for Credit Losses
SELECTED FINANCIAL DATA
Dividend payout ratio
Return on average total equity
Return on average total assets
Average equity to average assets
FINANCIAL STATEMENTS
Note 6. Loans and Nonperforming Assets
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INVESTMENT PORTFOLIO
The following table summarizes Old Kent's securities classified as
available-for-sale at December 31, 1997, 1996, and 1995. Securities
available-for-sale are carried on the balance sheet at their estimated fair
market values, with corresponding valuation adjustments included as a component
of shareholders' equity.
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED ESTIMATED
COST GAINS LOSSES MARKET VALUE
--------- ---------- ---------- ------------
(IN THOUSANDS)
December 31, 1997
U.S. Treasury and federal agency securities $ 519,016 $ 2,186 $ 1,975 $ 519,227
Collateralized mortgage obligations:
U.S. Government issued 1,030,220 5,830 2,337 1,033,713
Privately issued 237,363 1,066 2,688 235,741
Mortgage-backed pass-through securities 134,127 280 135 134,272
Other securities 113,709 205 -- 113,914
---------- ------- ------- ----------
Total $2,034,435 $ 9,567 $ 7,135 $2,036,867
========== ======= ======= ==========
December 31, 1996
U.S. Treasury and federal agency securities $1,167,775 $ 298 $ 7,891 $1,160,182
Collateralized mortgage obligations:
U.S. Government issued 419,499 433 3,064 416,868
Privately issued 189,347 465 4,277 185,535
Mortgage-backed pass-through securities 72,452 46 1,179 71,319
Other securities 61,294 -- -- 61,294
---------- ------- ------- ----------
Total $1,910,367 $ 1,242 $16,411 $1,895,198
========== ======= ======= ==========
December 31, 1995
U.S. Treasury and federal agency securities $1,304,855 $10,503 $ 2,930 $1,312,428
Collateralized mortgage obligations:
U.S. Government issued 710,255 5,252 9,678 705,829
Privately issued 4,539 29 40 4,528
Mortgage-backed pass-through securities 162,494 1,709 269 163,934
Other securities 58,374 606 -- 58,980
---------- ------- ------- ----------
Total $2,240,517 $18,099 $12,917 $2,245,699
========== ======= ======= ==========
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INVESTMENT PORTFOLIO -- CONTINUED
The following table summarizes Old Kent's securities classified as
held-to-maturity at December 31, 1997, 1996, and 1995. Securities
held-to-maturity are carried on the balance sheet at their amortized cost.
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
--------- ---------- ---------- ---------
(IN THOUSANDS)
December 31, 1997
U.S. Treasury and federal agency securities $ 15,248 $ 48 $ 11 $ 15,285
Collateralized mortgage obligations:
U.S. Government issued 453,556 682 4,377 449,861
Privately issued 119,526 329 992 118,863
Mortgage-backed pass-through securities 93,896 1,307 294 94,909
Other securities 138,613 4,517 1,146 141,984
-------- ------- ------ --------
Total $820,839 $ 6,883 $6,820 $820,902
======== ======= ====== ========
December 31, 1996
U.S. Treasury and federal agency securities $ 6,116 $ 9 $ 1 $ 6,124
Collateralized mortgage obligations:
U.S. Government issued 462,778 1,878 3,444 461,212
Privately issued 160,699 -- 1,885 158,814
Mortgage-backed pass-through securities 122,878 2,320 247 124,951
Other securities 156,859 4,730 1,098 160,491
-------- ------- ------ --------
Total $909,330 $ 8,937 $6,675 $911,592
======== ======= ====== ========
December 31, 1995
Collateralized mortgage obligations:
U.S. Government issued $456,758 $ 2,963 $5,306 $454,415
Privately issued 95,843 227 390 95,680
Mortgage-backed pass-through securities 127,729 2,939 236 130,432
State and political subdivision securities 190,612 6,031 879 195,764
-------- ------- ------ --------
Total $870,942 $12,160 $6,811 $876,291
======== ======= ====== ========
The following table shows, by class of maturities as of December 31, 1997,
the amounts and weighted average yields of securities available-for-sale and
securities held-to-maturity on the basis of amortized cost:
MATURING
--------------------------------------------------------------------------------------
AFTER ONE BUT AFTER FIVE BUT
WITHIN ONE YEAR WITHIN FIVE YEARS WITHIN TEN YEARS AFTER TEN YEARS
--------------- ------------------ ------------------- ----------------
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
------ ----- ------ ----- ------ ----- ------ -----
(DOLLARS IN THOUSANDS)
U.S. Treasury and other
U.S. government agencies
and corporations $34,533 5.76% $212,880 6.03% $286,851 5.64% -- --
States and other political
subdivisions 21,741 5.76 60,863 5.48 38,003 5.42 $ 18,006 5.91%
Other Securities -- -- -- -- -- -- 113,709 8.11
------- ---- -------- ---- -------- ---- -------- ----
Total $56,274 5.76% $273,743 5.91% $324,854 5.61% $131,715 7.81%
======= ==== ======== ==== ======== ==== ======== ====
- -------------------------
(1) The effective yields are weighted for the scheduled maturity of each
security.
(2) Collateralized mortgage obligations and mortgage-backed securities of
$2,068,688, having a weighted average yield of 6.50% at December 31, 1997,
are not included in the table shown above.
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INVESTMENT PORTFOLIO -- CONTINUED
(3) Weighted average interest rates have been computed on a fully taxable
equivalent basis. The rates shown on securities issued by states and
political subdivisions have been restated, assuming a 35% tax rate. The
amount of the adjustment, due to restating the rates, is as follows:
TAX-EXEMPT RATE OF TAXABLE
RATE ADJUSTMENT EQUIVALENTS BASIS
---------- ---------- -----------------
Under 1 Year 5.76% 3.10% 8.86%
1 to 5 Years 5.48 2.95 8.43
5 to 10 Years 5.42 2.91 8.33
Over 10 Years 5.91 3.18 9.09
---- ---- ----
Total 5.58% 3.00% 8.58%
==== ==== ====
(4) The aggregate book value of securities of no single issuer except the U.S.
Government exceeds 10 percent of Old Kent's consolidated shareholders'
equity.
The table below identifies the critical characteristics of Old Kent's three
classes of mortgage-backed related securities for December 31, 1997, 1996, and
1995.
WEIGHTED ESTIMATED
AMORTIZED AVERAGE AVERAGE
COST YIELD LIFE*
--------- -------- ---------
(IN THOUSANDS)
December 31, 1997
Collateralized mortgage obligations:
U.S. Government issued $1,483,776 6.54% 3.39
Privately issued 356,889 6.52 3.21
Mortgage-backed pass-through securities 228,023 6.17 3.90
---------- ---- ----
Total $$2,068,688 6.50% 3.41
========== ==== ====
December 31, 1996
Collateralized mortgage obligations:
U.S. Government issued $ 882,277 6.35% 2.9
Privately issued 350,046 6.46 3.1
Mortgage-backed pass-through securities 195,330 6.83 3.5
---------- ---- ----
Total $1,427,653 6.44% 3.0
========== ==== ====
December 31, 1995
Collateralized mortgage obligations:
U.S. Government issued $1,167,013 6.33% 3.1
Privately issued 100,382 6.45 3.7
Mortgage-backed pass-through securities 290,223 6.90 5.0
---------- ---- ----
Total mortgage-backed related securities $1,557,618 6.45% 3.5
========== ==== ====
- -------------------------
* Estimated average life is the amortization period, in years, used by Old Kent
in the preparation of its financial statements.
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LOAN PORTFOLIO
The following table shows the maturity of loans (excluding residential
mortgages of 1-4 family residences, consumer loans, credit card loans, and lease
financing) outstanding at December 31, 1997. Also provided are the amounts due
after one year classified according to their sensitivity to changes in interest
rates.
DUE IN ONE DUE IN ONE DUE AFTER
YEAR OR LESS TO FIVE YEARS FIVE YEARS
------------ ------------- ----------
(IN THOUSANDS OF DOLLARS)
Commercial, financial and agricultural $1,567,767 $ 872,095 $136,146
Real estate-commercial(1) 446,711 1,234,047 115,550
Real estate-construction 258,376 190,538 108,093
---------- ---------- --------
Total $2,272,854 $2,296,680 $359,789
========== ========== ========
Loans due after one year:
With fixed rates $1,287,878 $235,185
With floating rates 1,008,802 124,604
---------- --------
Total $2,296,680 $359,789
========== ========
- -------------------------
(1) Includes real estate commercial loans secured by 1-4 family residences.
Foreign Outstandings: A summary of significant foreign outstandings at the
end of each of the last three years is as follows:
OUTSTANDINGS TO FOREIGN
-------------------------------------------
BANKS AND PERCENT
OTHER FINANCIAL OF TOTAL
INSTITUTIONS(1) TOTAL ASSETS
--------------- ----- --------
(DOLLARS IN THOUSANDS)
At December 31, 1997
All Countries(2) $ 0 $ 0 0%
======== ======== ====
At December 31, 1996
All Countries(2) $ 0 $ 0 0%
======== ======== ====
At December 31, 1995
All Countries(2) $150,000 $150,000 1.25%
======== ======== ====
- -------------------------
(1) All foreign outstandings at the dates indicated were to banks and other
financial institutions. These consist primarily of interest-earning deposits
with foreign banks and foreign branches of U.S. banks.
(2) Outstandings in each country were less than 1% of Old Kent's total assets.
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DEPOSITS
The daily average amounts of deposits and rates paid on such deposits for
the periods indicated are:
YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------
1997 1996 1995
------------------- ------------------ ------------------
AMOUNT RATE AMOUNT RATE AMOUNT RATE
------ ---- ------ ---- ------ ----
(DOLLARS IN THOUSANDS)
In Domestic Offices:
Non-interest-bearing demand
deposits $ 1,511,391 $1,407,706 $1,329,787
Savings deposits 3,021,239 2.61% 2,981,349 2.65% 3,094,220 2.67%
Time deposits 5,696,980 5.53 5,326,798 5.65 4,667,457 5.70
In Foreign Office:
Time deposits 38,792 5.45% 46,841 5.73% 225,964 6.26%
----------- ---------- ----------
Total $10,268,402 $9,762,694 $9,317,428
=========== ========== ==========
The time remaining until maturity of time deposits of $100,000 or more
issued by domestic offices (all of which are time certificates of deposit) at
December 31, 1997, is as follows:
TIME CERTIFICATES
OF DEPOSIT
-----------------
(DOLLARS IN
THOUSANDS)
3 months or less $ 863,044
Over 3 through 6 months 224,810
Over 6 through 12 months 303,877
Over 12 months 173,850
----------
Total $1,565,581
==========
Time deposits in the foreign office are all in amounts of $100,000 or more.
11
13
OTHER BORROWED FUNDS
Other borrowed funds consist of federal funds purchased, securities sold
under agreements to repurchase, bank notes, treasury tax, loan and demand notes.
The following amounts and rates applied during the last three years:
FEDERAL FUNDS PURCHASED AND
SECURITIES SOLD UNDER
AGREEMENTS TO REPURCHASE: BANK NOTES AGGREGATE OTHER BORROWED FUNDS
------------------------------ ------------------------------ ------------------------------------
1997 1996 1995 1997 1996 1995 1997 1996 1995
---- ---- ---- ---- ---- ---- ---- ---- ----
(DOLLARS IN THOUSANDS) (DOLLARS IN THOUSANDS) (DOLLARS IN THOUSANDS)
Amounts outstanding
at year-end $797,670 $482,499 $536,686 $960,500 $445,000 $575,000 $2,074,791 $1,235,867 $1,307,617
Average amount
outstanding during
year $697,705 $519,579 $429,881 $590,886 $415,410 $591,507 $1,562,014 $1,155,504 $1,185,629
Maximum amount
outstanding any
month-end $872,379 $610,636 $536,686 $960,500 $495,000 $800,000 $2,074,791 $1,327,547 $1,329,425
Weighted average
interest rate at
year-end(1) 5.83% 5.28% 5.86% 5.88% 6.22% 6.35% 5.54% 5.47% 5.95%
Weighted average
interest rate
during year(1) 4.83% 4.67% 5.13% 6.04% 6.36% 6.33% 5.53% 5.50% 5.88%
- -------------------------
(1) The weighted average interest rates are derived by dividing the interest
expense for the period by the daily average balance during the period.
ITEM 2. PROPERTIES.
The executive offices of Old Kent and the main office of Old Kent Bank are
located in an office complex in downtown Grand Rapids, Michigan. This complex
consists of two interconnected buildings, including a 10-story office building.
Approximately 60% of the 305,633 square feet of space in the complex is occupied
by Old Kent and Old Kent Bank. The balance is leased to others for terms of
varying lengths.
Old Kent's operations center is housed in two buildings located near Grand
Rapids. The two buildings, which have a total of 310,000 square feet, are owned
by Old Kent Bank.
Old Kent's subsidiary banks conducted business from a total of 228 full
service banking offices as of December 31, 1997. Of the full service banking
offices, 173 are owned by the banks or their subsidiaries, and 55 are leased
from various independent parties for various lease terms.
ITEM 3. LEGAL PROCEEDINGS.
Old Kent's subsidiaries are parties, as plaintiff or defendant, to a number
of legal proceedings. Except as described below, all of these proceedings are
considered to be ordinary routine litigation incidental to their business, and
none is considered to be a material pending legal proceeding.
Old Kent Bank is named, among other defendants, in a lawsuit filed by Grow
Group, Inc. ("Grow") in 1994 presently pending in the United States District
Court for the Western District of Michigan. Principal defendants in this case
include Perrigo Company ("Perrigo"), Michael J. Jandernoa (Chairman of the Board
and Chief Executive Officer of Perrigo, and presently a director of Old Kent),
certain other persons who are believed to have been directors and officers of
Perrigo, Old Kent Bank, and National Bank of Detroit ("NBD"; now NBD Bank), with
which Old Kent Bank participated in the financing arrangement that is in part
the subject of the case. In 1988, Old Kent Bank participated in a credit
facility that partially financed the purchase of all of the stock of Perrigo
from Grow by individual and corporate defendants in the case. Grow now alleges
that NBD and Old Kent Bank conspired with and aided and abetted the individual
defendants in certain breaches of duties, fraud, and usurpation of corporate
opportunity; misappropriated and used
12
14
confidential and proprietary information for their own benefit; and breached a
relationship of trust and confidence with Grow. Grow demands judgment against
the defendants, jointly and severally, for damages in an unspecified but
apparently material amount, profits and benefits accruing to the defendants as a
result of the alleged wrongful acts, punitive damages, interest, and costs.
Based on the information presently available, Old Kent has no reason to believe
that there is a basis for a meritorious claim against Old Kent Bank on the
allegations stated in this case.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
Not applicable.
SUPPLEMENTAL ITEM. EXECUTIVE OFFICERS OF THE REGISTRANT.
Old Kent's executive officers are appointed annually by, and serve at the
pleasure of, the Old Kent board of directors. Biographical information
concerning executive officers as of February 16, 1998, who are not directors or
nominated for election to the board of directors is presented below:
Steven D. Crandall (age 45) has been Senior Vice President (Human
Resources) of Old Kent since 1997 and a Senior Vice President of Old Kent since
1989. Mr. Crandall is also a member of Old Kent's Management Committee.
David A. Dams (age 45) has been Executive Vice President (Corporate
Banking) of Old Kent Bank since 1989 and an Executive Vice President of Old Kent
Bank since 1986. Mr. Dams is also a member of Old Kent's Management Committee.
Gregory K. Daniels (age 45) has been Senior Vice President and Chief
Information Officer of Old Kent since 1997 and Senior Vice President of Old Kent
since 1996. Prior to that, he was a Business Unit Executive with IBM. Mr.
Daniels is also a member of Old Kent's Management Committee.
E. Philip Farley (age 58) has been Executive Vice President (Community Bank
Administration) of Old Kent since January, 1998. Prior to that, he served as
Executive Vice President of Old Kent Bank from 1987 to 1997. Mr. Farley is also
a member of Old Kent's Management Committee.
Ralph W. Garlick (age 61) has been Executive Vice President of Old Kent
since 1984. Mr. Garlick is also a member of Old Kent's Management Committee.
Richard L. Haug (age 58) has been Senior Vice President and General Auditor
of Old Kent since 1986.
James A. Hubbard (age 43) has been Senior Executive Vice President of Old
Kent since February, 1998 and President of Old Kent Bank-Illinois since 1997. He
was Executive Vice President of Old Kent from 1997 to February, 1998.
Previously, Mr. Hubbard held various positions with American National Bank in
Chicago, Illinois. Mr. Hubbard is also a member of Old Kent's Management
Committee.
David L. Kerstein (age 53) has been Executive Vice President (Retail
Banking and Marketing) of Old Kent since 1997 and Executive Vice President
(Retail Banking) of Old Kent since 1992. Mr. Kerstein is also a member of Old
Kent's Management Committee.
Kenneth C. Krei (age 48) has been Executive Vice President (Investment
Services) of Old Kent Bank since 1997. Prior to that, he was Senior Vice
President of Old Kent Bank since 1996. Prior to that, Mr. Krei held various
positions with Bank of America (Continental Bank) in Chicago, Illinois. Mr. Krei
is also a member of Old Kent's Management Committee.
Larry S. Magnesen (age 40) has been Senior Vice President (Retail
Administration) of Old Kent Bank since 1997. Prior to that, he was Senior Vice
President of Old Kent since 1996. Prior to that, he was a Vice President of Banc
One Corporation (a bank holding company) and Banc One Ohio Corporation (a bank).
Mr. Magnesen is also a member of Old Kent's Management Committee.
William L. Sanders (age 51) has been Senior Executive Vice President and
Chief Financial Officer of Old Kent since 1997 and Treasurer of Old Kent since
February, 1998. Prior to that, he was Executive Vice
13
15
President and Chief Financial Officer of Bank Plus Corporation (a savings
institution) and Executive Vice President and Chief Financial Officer of H.F.
Ahmanson & Company (Home Savings of America) (a thrift institution). Mr. Sanders
is also a member of Old Kent's Management Committee.
Daniel W. Terpsma (age 43) has been Executive Vice President of Old Kent
Bank and President of Old Kent Bank-East since 1997. Prior to that, he was
Senior Vice President of Old Kent Bank. Mr. Terpsma is a director of Riviera
Tool Company. Mr. Terpsma is also a member of Old Kent's Management Committee.
Mary E. Tuuk (age 33) has been Senior Vice President (Legal Coordinator) of
Old Kent since February, 1998 and Secretary of Old Kent since 1996. She was Vice
President (Legal Coordinator) of Old Kent from 1996 to February, 1998. Prior to
that, she was an attorney with the law firm Chapman and Cutler.
Michael J. Whalen (age 49) has been Senior Vice President and Senior Credit
Officer of Old Kent since 1997. Prior to that, he was President of Old Kent
Bank-Illinois. Mr. Whalen is also a member of Old Kent's Management Committee.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The information under the caption "Old Kent Common Stock" and "Cash
Dividends" on pages S-26 of Old Kent's Annual Report to Shareholders for the
year ended December 31, 1997 (the "1997 Annual Report"), is here incorporated by
reference. Old Kent's 1997 Annual Report is printed and distributed with its
definitive Proxy Statement for its Annual Meeting of Shareholders to be held
April 20, 1998 (the "1998 Proxy Statement").
On September 1, 1997, Old Kent issued approximately 86,246 shares of its
common stock to the then-shareholders of GRH as consideration for all of the
issued and outstanding capital stock GRH. The issuance of securities was exempt
from registration under Section 4(2) of the Securities Act of 1933, as amended,
and Rule 506 of Regulation D promulgated thereunder. Based on information
provided by the former GRH shareholders and to the reasonable belief of Old
Kent, each of the 17 former GRH shareholders was an "accredited investor" or,
either alone or with his or her personal representative, had such knowledge and
experience in financial and business matters that he or she was capable of
evaluating the merits and risks of the investment. Old Kent did not employ an
underwriter in this transaction.
ITEM 6. SELECTED FINANCIAL DATA.
The information under the caption "Five Year Summary of Selected Financial
Data" on page S-3 of Old Kent's 1997 Annual Report is here incorporated by
reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The information under the caption "Financial Review" on pages S-4 through
S-36 of Old Kent's 1997 Annual Report is here incorporated by reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
The information under the caption "Market Risk Management" on pages S-28
through S-34 of Old Kent's 1997 Annual Report is here incorporated by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
The financial statements, notes and the report of independent public
accountants on pages S-38 through S-71 of Old Kent's 1997 Annual Report is here
incorporated by reference.
The information under the caption "Quarterly Financial Data" on page S-36
of Old Kent's 1997 Annual Report is here incorporated by reference.
14
16
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
Not applicable.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
The information set forth under the captions "Board of Directors" and
"Section 16(a) Beneficial Ownership Reporting Compliance" in the 1998 Proxy
Statement is here incorporated by reference.
ITEM 11. EXECUTIVE COMPENSATION.
The information set forth under the captions "Compensation of Executive
Officers and Directors," "Executive Severance Agreements," and "Compensation of
Directors" in the 1998 Proxy Statement is here incorporated by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The information set forth under the caption "Voting Securities" in the 1998
Proxy Statement is here incorporated by reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The information set forth under the caption "Certain Relationships and
Related Transactions" in the 1998 Proxy Statement is here incorporated by
reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
(a) (1) Financial Statements. The following financial statements and report of
independent public accountants of Old Kent Financial Corporation and its
subsidiaries are filed as part of this report:
Report of Independent Public Accountants dated January 14, 1998
Consolidated Balance Sheets -- December 31, 1997 and 1996
Consolidated Statements of Income for each of the three years in the period
ended December 31, 1997
Consolidated Statements of Cash Flows for each of the three years in the
period ended December 31, 1997
Consolidated Statements of Shareholders' Equity for each of the three years
in the period ended December 31, 1997
Notes to Consolidated Financial Statements
The financial statements, the notes to financial statements, and the report
of independent public accountants listed above are incorporated by reference in
Item 8 of this report.
(2) Financial Statement Schedules. Not applicable.
(3) Exhibits. The following exhibits are filed as part of this report:
NUMBER EXHIBIT
- ------ -------
3.1 Restated Articles of Incorporation. Previously filed as
Exhibit 3(a) to Old Kent's Form 10-Q Quarterly Report for
the fiscal quarter ended March 31, 1993. Here incorporated
by reference.
15
17
NUMBER EXHIBIT
- ------ -------
3.2 Bylaws. Previously filed as Exhibit 3(b) to Old Kent's Form
10-Q Quarterly Report filed for the fiscal quarter ended
June 30, 1997. Here incorporated by reference.
4.1 Rights Agreement. Previously filed as an exhibit to Old
Kent's Form 8-A Registration Statement filed January 21,
1997. Here incorporated by reference.
4.2 Certificate of Designation, Preferences, and Rights of
Series C Preferred Stock. Previously filed as Exhibit 4.3 to
Old Kent's Form 8-K filed March 5, 1997. Here incorporated
by reference.
4.3 Form of Old Kent Capital Trust I Floating Rate Subordinated
Capital Income Securities (Liquidation Amount of $1,000 per
Capital Security). Previously filed as Exhibit 4.7 to Old
Kent's Form S-4 Registration Statement filed July 10, 1997.
Here incorporated by reference.
4.4 Form of Old Kent Financial Corporation Floating Rate Junior
Subordinated Debenture due 2027. Previously filed as Exhibit
4.5 to Old Kent's Form S-4 Registration Statement filed July
10, 1997. Here incorporated by reference.
4.5 Amended and Restated Declaration of Trust, dated as of
January 31, 1997, among Old Kent; Albert T. Potas, Thomas E.
Powell, and Mary E. Tuuk, as "Regular Trustees" (as defined
therein); Bankers Trust Company; and Bankers Trust
(Delaware). Previously filed as Exhibit 4.6 to Old Kent's
Form 8-K filed March 5, 1997. Here incorporated by
reference.
4.6 Guarantee Agreement, dated as of August 21, 1997, between
Old Kent and Bankers Trust Company. Previously filed as
Exhibit 4.7 to Old Kent's Form 8-K filed March 4, 1998. Here
incorporated by reference.
4.7 Indenture, dated as of January 31, 1997, between Old Kent
and Bankers Trust Company. Previously filed as Exhibit 4.8
to Old Kent's Form 8-K filed March 5, 1997. Here
incorporated by reference.
4.8 Long-Term Debt. Old Kent has outstanding long-term debt
that, at the time of this report, does not exceed 10% of Old
Kent's total consolidated assets. Old Kent agrees to furnish
copies of the agreements defining the rights of holders of
such long-term indebtedness to the Securities and Exchange
Commission upon request.
10.1 Executive Stock Option Plan of 1986.* Previously filed as
Exhibit 10 to Old Kent's Form 10-Q Quarterly Report for its
fiscal quarter ended September 30, 1995. Here incorporated
by reference.
10.2 Amendment to Executive Stock Option Plan of
1986.* Previously filed as Exhibit 10.19 to Old Kent's Form
8-K filed March 5, 1997. Here incorporated by reference.
10.3 Restricted Stock Plan of 1987.* Previously filed as part of
Old Kent's Definitive Proxy Statement dated March 6, 1992.
Here incorporated by reference.
10.4 Amendment to Restricted Stock Plan of 1987.* Previously
filed as Exhibit 10(f) to Old Kent's Form 8-K filed February
23, 1996. Here incorporated by reference.
10.5 Old Kent Executive Retirement Income Plan and Related
Trust.* Previously filed as Exhibit 10.5 to Old Kent's Form
8-K filed March 4, 1998. Here incorporated by reference.
10.6 Amendment to Executive Retirement Income Plan.* Previously
filed as Exhibit 10.6 to Old Kent's Form 8-K filed March 4,
1998. Here incorporated by reference.
10.7 Old Kent Executive Thrift Plan and Related
Trust.* Previously filed as Exhibit 10.7 to Old Kent's Form
8-K filed March 4, 1998. Here incorporated by reference.
10.8 Amendment to Executive Thrift Plan.* Previously filed as
Exhibit 10(h) to Old Kent's Form 10-K Annual Report for its
fiscal year ended December 31, 1994. Here incorporated by
reference.
10.9 Old Kent Deferred Compensation Plan and Related
Trust.* Previously filed as Exhibit 10.9 to Old Kent's Form
8-K filed March 4, 1998. Here incorporated by reference.
10.10 Stock Option Incentive Plan of 1992.* Previously filed as
Exhibit 10(b) to Old Kent's Form 10-Q Quarterly Report for
its fiscal quarter ended June 30, 1995. Here incorporated by
reference.
16
18
NUMBER EXHIBIT
- ------ -------
10.11 Amendment to Stock Option Incentive Plan of
1992.* Previously filed as Exhibit 10.20 to Old Kent's Form
8-K filed March 5, 1997. Here incorporated by reference.
10.12 Amendment to Stock Option Incentive Plan of
1992.* Previously filed as Exhibit 10(d) to Old Kent's Form
10-Q Quarterly Report for the fiscal quarter ended June 30,
1997. Here incorporated by reference.
10.13 Deferred Stock Compensation Plan and Related
Trust.* Previously filed as Exhibit 10(j) to Old Kent's Form
10-K Annual Report for its fiscal year ended December 31,
1994. Here incorporated by reference.
10.14 Old Kent Directors' Deferred Compensation Plan and Related
Trust.* Previously filed as Exhibit 10(n) to Old Kent's Form
10-K Annual Report for its fiscal year ended December 31,
1994. Here incorporated by reference.
10.15 Amendment to Old Kent Directors' Deferred Compensation
Plan.* Previously filed as Exhibit 10.15 to Old Kent's Form
8-K filed March 4, 1998. Here incorporated by reference.
10.16 Executive Incentive Bonus Plan.* Previously filed as part of
Old Kent's Definitive Proxy Statement dated March 1, 1997.
Here incorporated by reference.
10.17 Executive Stock Incentive Plan of 1997.* Previously filed as
part of Old Kent's Definitive Proxy Statement dated March 1,
1997. Here incorporated by reference.
10.18 Amendment to Executive Stock Incentive Plan of
1997.* Previously filed as Exhibit 10(d) to Old Kent's Form
10-Q Quarterly Report for the fiscal quarter ended June 30,
1997. Here incorporated by reference.
10.19 Pooling and Service Agreement. Previously filed as Exhibit
10(r) to Old Kent's Form 8-K filed February 23, 1996. Here
incorporated by reference.
10.20 Executive Severance Agreements.* The form of Executive
Severance Agreement was previously filed as Exhibit 10.17 to
Old Kent's Form 8-K filed March 5, 1997. Here incorporated
by reference. An updated participant schedule was previously
filed as Exhibit 10.20 to Old Kent's Form 8-K filed March 4,
1998. Here incorporated by reference.
10.21 Executive Severance Agreements.* The form of Executive
Severance Agreement was previously filed as Exhibit 10.18 to
Old Kent's Form 8-K filed March 5, 1997. Here incorporated
by reference. An updated participant schedule was previously
filed as Exhibit 10.21 to Old Kent's Form 8-K filed March 4,
1998. Here incorporated by reference.
10.22 Indemnity Agreement.* The form of Indemnity Agreement was
previously filed as Exhibit 10(c) to Old Kent's Form 10-Q
Quarterly Report for the fiscal quarter ended June 30, 1997.
Here incorporated by reference. A participant schedule was
previously filed as Exhibit 10.22 to Old Kent's Form 8-K
filed March 4, 1998. Here incorporated by reference.
10.23 Restricted Stock Agreement for Mr. Warrington.* Previously
filed as Exhibit 10(p) to Old Kent's Form 8-K filed February
23, 1996. Here incorporated by reference.
10.24 Restricted Stock Agreement for Mr. Warrington.* Previously
filed as Exhibit 10(q) to Old Kent's Form 8-K filed February
23, 1996. Here incorporated by reference.
12 Statement Re Computation of Other Ratios.
13 Annual Report to Shareholders. This exhibit, except for
those portions expressly incorporated by reference in this
filing, is furnished for the information of the Commission
and is not deemed "filed" as part of this filing.
21 Subsidiaries of Registrant. Previously filed as Exhibit 21
to Old Kent's Form 8-K filed March 4, 1998. Here
incorporated by reference.
23 Consent of Independent Public Accountants.
24 Powers of Attorney.
17
19
NUMBER EXHIBIT
- ------ -------
27 Financial Data Schedule.
99 Old Kent Thrift Plan Performance Table.
- -------------------------
* These agreements are management contracts or compensation plans or
arrangements required to be filed as exhibits to this Form 10-K.
Old Kent will furnish a copy of any exhibit listed above to any Old Kent
shareholder without charge upon written request to Ms. Mary E. Tuuk,
Secretary, Old Kent Financial Corporation, 111 Lyon St., N.W., Grand Rapids,
Michigan 49503.
(b) Reports on Form 8-K. Old Kent filed the following report on Form 8-K
during the last quarter of the period covered by this report:
Date of Event Reported Item Reported
October 20, 1997 Item 5
18
20
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
OLD KENT FINANCIAL CORPORATION
(Registrant)
Date: March 5, 1998 By /s/ MARY E. TUUK
--------------------------------------
Mary E. Tuuk
Secretary and Senior Vice President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities indicated.
March 5, 1998 /s/ RICHARD L. ANTONINI*
------------------------------------------------------------
Richard L. Antonini
Director
March 5, 1998 /s/ JOHN M. BISSELL*
------------------------------------------------------------
John M. Bissell
Director
March 5, 1998 /s/ JOHN D. BOYLES*
------------------------------------------------------------
John D. Boyles
Director
March 5, 1998 /s/ WILLIAM P. CRAWFORD*
------------------------------------------------------------
William P. Crawford
Director
March 5, 1998 /s/ RICHARD M. DEVOS, JR.*
------------------------------------------------------------
Richard M. DeVos, Jr.
Director
March 5, 1998 /s/ WILLIAM G. GONZALEZ*
------------------------------------------------------------
William G. Gonzalez
Director
March 5, 1998 /s/ JAMES P. HACKETT*
------------------------------------------------------------
James P. Hackett
Director
March 5, 1998 /s/ ERINA HANKA*
------------------------------------------------------------
Erina Hanka
Director
19
21
March 5, 1998 /s/ EARL D. HOLTON*
------------------------------------------------------------
Earl D. Holton
Director
March 5, 1998 /s/ ROBERT L. HOOKER*
------------------------------------------------------------
Robert L. Hooker
Director
March 5, 1998 /s/ MICHAEL J. JANDERNOA*
------------------------------------------------------------
Michael J. Jandernoa
Director
March 5, 1998 /s/ KEVIN T. KABAT*
------------------------------------------------------------
Kevin T. Kabat
Vice Chairman of the Board and Director
March 5, 1998 /s/ FRED P. KELLER*
------------------------------------------------------------
Fred P. Keller
Director
March 5, 1998 /s/ JOHN P. KELLER*
------------------------------------------------------------
John P. Keller
Director
March 5, 1998 /s/ HENDRIK G. MEIJER*
------------------------------------------------------------
Hendrik G. Meijer
Director
March 5, 1998 /s/ PERCY A. PIERRE*
------------------------------------------------------------
Percy A. Pierre
Director
March 5, 1998 /s/ PATRICK M. QUINN*
------------------------------------------------------------
Patrick M. Quinn
Director
March 5, 1998 /s/ MARILYN J. SCHLACK*
------------------------------------------------------------
Marilyn J. Schlack
Director
March 5, 1998 /s/ PETER F. SECCHIA*
------------------------------------------------------------
Peter F. Secchia
Director
20
22
March 5, 1998 /s/ DAVID J. WAGNER*
------------------------------------------------------------
David J. Wagner
Chairman, President, Chief Executive Officer, and
Director (Principal Executive Officer)
March 5, 1998 /s/ MARGARET SELLERS WALKER*
------------------------------------------------------------
Margaret Sellers Walker
Director
March 5, 1998 /s/ ROBERT H. WARRINGTON*
------------------------------------------------------------
Robert H. Warrington
Vice Chairman of the Board and Director
March 5, 1998 /s/ WILLIAM L. SANDERS*
------------------------------------------------------------
William L. Sanders
Senior Executive Vice President,
Chief Financial Officer, and Treasurer
(Principal Financial and Accounting Officer)
March 5, 1998 *By /s/ MARY E. TUUK
--------------------------------------------------------
Mary E. Tuuk
Attorney-in-Fact
21
23
INDEX TO EXHIBITS
EXHIBIT NO. DESCRIPTION
- ------- --- -----------
3.1 Restated Articles of Incorporation. Previously filed as Exhibit
3(a) to Old Kent's Form 10-Q Quarterly Report for the fiscal quarter
ended March 31, 1993. Here incorporated by reference.
3.2 Bylaws. Previously filed as Exhibit 3(b) to Old Kent's Form 10-Q
Quarterly Report filed for the fiscal quarter ended June 30, 1997.
Here incorporated by reference.
4.1 Rights Agreement. Previously filed as an exhibit to Old Kent's
Form 8-A Registration Statement filed January 21, 1997. Here
incorporated by reference.
4.2 Certificate of Designation, Preferences, and Rights of Series C
Preferred Stock. Previously filed as Exhibit 4.3 to Old Kent's Form
8-K filed March 5, 1997. Here incorporated by refernce.
4.3 Form of Old Kent Capital Trust I Floating Rate Subordinated Capital
Income Securities (Liquidation Amount of $1,000 per Capital
Security). Previously filed as Exhibit 4.7 to Old Kent's Form S-4
Registration Statement filed July 10, 1997. Here incorporated by
reference.
4.4 Form of Old Kent Financial Corporation Floating Rate Junior
Subordinated Debenture due 2027. Previously filed as Exhibit 4.5 to
Old Kent's Form S-4 Registration Statement filed July 10, 1997. Here
incorporated by reference.
4.5 Amended and Restated Declaration of Trust, dated as of January 31,
1997, among Old Kent; Albert T. Potas, Thomas E. Powell, and Mary E.
Tuuk, as "Regular Trustees" (as defined therein); Bankers Trust
Company; and Bankers Trust (Delaware). Previously filed as Exhibit
4.6 to Old Kent's Form 8-K filed March 5, 1997. Here incorporated by
reference.
4.6 Guarantee Agreement, dated as of August 21, 1997, between Old Kent
and Bankers Trust Company. Previously filed as Exhibit 4.7 to Old
Kent's Form 8-K filed March 4, 1998. Here incorporated by reference.
4.7 Indenture, dated as of January 31, 1997, between Old Kent and Bankers
Trust Company. Previously filed as Exhibit 4.8 to Old Kent's Form
8-K filed March 5, 1997. Here incorportaed by reference.
4.8 Long-Term Debt. Old Kent has outstanding long-term debt that, at the
time of this report, does not exceed 10% of Old Kent's total
consolidated assets. Old Kent agrees to furnish copies of the
agreements defining the rights of holders of such long-term
indebteness to the Securities and Exchange Commission upon request.
10.1 Executive Stock Option Plan of 1986.* Previously filed as Exhibit 10
to Old Kent's Form 10-Q Quarterly Report for its fiscal quarter ended
September 30, 1995. Here incorporated by reference.
10.2 Amendment to Executive Stock Option Plan of 1986.* Previously filed
as Exhibit 10.19 to Old Kent's Form 8-K filed March 5, 1997. Here
incorporated by reference.
10.3 Restricted Stock Plan of 1987.* Previously filed as part of Old
Kent's Definitive Proxy Statement dated March 6, 1992. Here
incorporated by reference.
10.4 Amendment to Restricted Stock Plan of 1987.* Previously filed as
Exhibit 10(f) to Old Kent's Form 8-K filed February 23, 1996. Here
incorporated by reference.
10.5 Old Kent Executive Retirement Income Plan and Related Trust. *
Previously filed as Exhibit 10.5 to Old Kent's Form 8-K filed March
4, 1998. Here incorporated by reference.
10.6 Amendment to Executive Retirement Income Plan . *
Previously filed as Exhibit 10.6 to Old Kent's Form 8-K filed March
4, 1998. Here incorporated by reference.
10.7 Old Kent Executive Thrift Plan and Related Trust.* Previously filed
as Exhibit 10.7 to Old Kent's Form 8-K filed March 4, 1998. Here
incorporated by reference.
10.8 Amendment to Executive Thrift Plan.* Previously filed as Exhibit
10(h) to Old Kent's Form 10-K Annual Report for its fiscal year
ended December 31, 1994. Here incorporated by reference.
10.9 Old Kent Deferred Compensation Plan and Related Trust.*
Previously filed as Exhibit 10.9 to Old Kent's Form 8-K filed
March 4, 1998. Here incorporated by reference.
10.10 Stock Option Incentive Plan of 1992.* Previously filed as Exhibit
10(b) to Old Kent's Form 10-Q Quarterly Report for its fiscal
quarter ended June 30, 1995. Here incorporated by reference.
10.11 Amendment to Stock Option Incentive Plan of 1992.* Previously
filed as Exhibit 10.20 to Old Kent's Form 8-K filed March 5,
1997. Here incorporated by reference.
24
10.12 Amendment to Stock Option Incentive Plan of 1992.* Previously
filed as Exhibit 10(d) to Old Kent's Form 10-Q Quarterly Report for
the fiscal quarter ended June 30, 1997. Here incorporated by
reference.
10.13 Deferred Stock Compensation Plan and Related Trust.* Previously
filed as Exhibit 10(j) to Old Kent's Form 10-K Annual Report for
its fiscal year ended December 31, 1994. Here incorporated by
reference.
10.14 Old Kent Directors' Deferred Compensation Plan and Related Trust.*
Previously filed as Exhibit 10(n) to Old Kent's Form 10-K Annual
Report for its fiscal year ended December 31, 1994. Here
incorporated by reference.
10.15 Amendment to Old Kent Directors' Deferred Compensation Plan.*
Previously filed as Exhibit 10.15 to Old Kent's Form 8-K filed
March 4, 1998. Here incorporated by reference.
10.16 Executive Incentive Bonus Plan.* Previously filed as part of Old
Kent's Definitive Proxy Statement dated March 1, 1997. Here
incorporated by reference.
10.17 Executive Stock Incentive Plan of 1997.* Previously filed as part
of Old Kent's Definitive Proxy Statement dated March 1, 1997.
Here incorporated by reference.
10.18 Amendment to Executive Stock Incentive Plan of 1997.* Previously
filed as Exhibit 10(d) to Old Kent's Form 10-Q Quarterly Report
for the fiscal quarter ended June 30, 1997. Here incorporated by
reference.
10.19 Pooling and Service Agreement. Previously filed as Exhibit 10(r)
to Old Kent's Form 8-k filed February 23, 1996. Here
incorporated by reference.
10.20 Executive Severance Agreements.* The form of Executive Severance
Agreement was previously filed as Exhibit 10.17 to Old Kent's
Form 8-K filed March 5, 1997. Here incorporated by reference.
An updated participant schedule was previously filed as Exhibit
10.20 to Old Kent's Form 8-K filed March 4, 1998. Here incorporated
by reference.
10.21 Executive Severance Agreements.* The form of Executive Severance
Agreement was previously filed as Exhibit 10.18 to Old Kent's
Form 8-K filed March 5, 1997. Here incorporated by reference.
An updated participant schedule was previously filed as Exhibit
10.21 to Old Kent's Form 8-K filed March 4, 1998. Here
incorporated by reference.
10.22 Indemnity Agreement.* The form of Indemnity Agreement was
previously filed as Exhibit 10(c) to Old Kent's Form 10-Q
Quarterly Report for the fiscal quarter ended June 30, 1997.
Here incorporated by reference. A participant schedule was
previously filed as Exhibit 10.22 to Old Kent's Form 8-K filed
March 4, 1998. Here incorporated by reference.
10.23 Restricted Stock Agreement for Mr. Warrington.* Previously filed
as Exhibit 10(p) to Old Kent's Form 8-K filed February 23, 1996.
Here incorporated by reference.
10.24 Restricted Stock Agreement for Mr. Warrington.* Previously filed
as Exhibit 10(q) to Old Kent's Form 8-K filed February 23, 1996.
Here incorporated by reference.
12 Statement Re Computation of Other Ratios.
13 Annual Report to Shareholders. This exhibit, except for those
portions expressly incorporated by reference in this filing, is
furnished for the information of the Commission and is not
deemed "filed" as part of this filing.
21 Subisidiaries of Registrant. Previously filed as Exhibit 21 to
Old Kent's Form 8-K filed March 4, 1998. Here incorporated by
reference.
23 Consent of Independent Public Accountants.
24 Powers of Attorney.
27 Financial Data Schedule.
99 Old Kent Thrift Plan Performance Table.
-------------------------
* These agreements are management contracts or compensation plans or
arrangements required to be filed as exhibits to this Form 10-K.
Old Kent will furnish a copy of any exhibit listed above to any Old
Kent shareholder without charge upon written request to Ms. Mary E.
Tuuk, Secretary, Old Kent Financial Corporation, 111 Lyon St., N.W.,
Grand Rapids, Michigan 49503