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News Release
Date: April 24, 1996
Contact: Ben Rubendall
815-961-7164
[AMCORE LETTERHEAD]
AMCORE REPORTS RECORD 1ST QUARTER EARNINGS
ROCKFORD, ILL. - AMCORE Financial, Inc. posted record first quarter
earnings of $5.6 million, or 40 cents per share for the period ended March 31,
1996 up 21.9 percent compared with $4.6 million or 33 cents per share in the
same period of 1995.
Net interest income for the quarter was $20.6 million, up 6.5 percent,
from $19.3 million in the same quarter of 1995 as a result of a 10 percent
increase in average loans and a 28 percent increase in average securities.
The net interest margin, however, fell 43 basis points to 3.85 percent,
down from 4.28 percent in the 1995 quarter. The decline in the margin was
primarily due to an investment leveraging program, which is designed to better
deploy underutilized capital and improve the return on equity. While this
program results in additional net interest income, it also lowers the net
interest margin due to the smaller interest rate spread.
"We continue to see an improvement in the quality of our loan portfolio,
said Robert J. Meuleman, president and chief executive officer. Total
non-performing loans were down 8.9 percent, or $1.1 million, despite a 9.7
percent increase in the total loan portfolio. Non-performing loans as a
percentage of total loans were .88 percent, down from 1.06 percent at the end
of the 1995 quarter."
The reserve for loan losses was 115 percent of non-performing loans, an
improvement from 109 percent in the 1995 quarter. Non-performing assets were
down $1.3 million, or 9.6 percent from the previous year. Non-performing assets
were .95 percent of total loans and other real estate, down from 1.15 percent
in the 1995 quarter. "This is the first time our non-performing assets have
been below 1 percent for several years," said Meuleman.
Fee-based income for the quarter was up 10.3 percent, or $763,000,
excluding security gains. Much of the increase was due to an 10.2 percent
increase in trust revenues and a 30.7 percent increase in mortgage revenues.
The higher trust revenues resulted from the favorable investment performance of
trust assets. Mortgage revenues rose due to increased refinancing activity
early in the quarter, when lower interest rates generated higher loan volumes.
Total operating expenses for the quarter were up 1.5 percent or $315,000,
from the 1995 quarter. The increase was mostly due to higher mortgage
commissions and the installation of teller automation systems, offset in part
by the reduction in FDIC insurance premiums.
-more-
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AMCORE Financial, Inc.
First Quarter Earnings 1996
Page 2
The efficiency ratio, which measures operating expenses as a percentage of
total revenues, was 67.2 percent, down from 71.2 percent in the first quarter
of 1995.
"We are very pleased with the improvement in our efficiency ratio,
Meuleman said. "This improvement reflects the impact of our continuing efforts
to both hold the line on expenses and increase our sources of revenue.
"To reach this objective, we have set two goals for ourselves: First, we
are committed to providing the best possible customer service, and second, we
are focusing on significant improvement in our operating results.
"In order to achieve these results, we are making a number of changes in
our operations including the combination of four banks in the southern part of
our service area to form a single institution with $425 million in assets and a
service area that more closely matches the economic region served by the
banks," Meuleman said.
"Progress continues with the installation of our new hardware and
software. The modernization of our processing functions is nearly complete, and
we have implemented a new teller automation system that has already improved
our ability to cross-sell additional products to customers and also reduce
operating expenses by cutting paperwork and shortening processing time.
"On the revenue side, we have been pleased with the performance and
improved profitability of our consumer finance company. It has refocused its
efforts on providing retail financing of equipment through agreements with
wholesale distributors.
"Our AMCORE Vintage family of mutual funds continues to grow rapidly,
including our newest fund, the Aggressive Growth Equity Fund. Nearly $600
million has now been invested in the Vintage mutuals," Meuleman said.
Return on equity was 10.77 percent up from 9.94 percent in the first
quarter of 1995. The return on assets was .92 percent, up from .87 percent in
1995.
All prior year financial information has been restated to reflect the
merger with NBM Bancorp, Inc.
AMCORE Financial, Inc. is a northern Illinois-based bank holding company
with assets of approximately $2.67 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".
AMCORE Financial may be reached on the Internet at: HTTP://www.amcore.com/
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AMCORE FINANCIAL, INC.
CONSOLIDATED KEY FINANCIAL DATA SUMMARY
NOTE: All prior year amounts have been restated to reflect the merger with
NBM Bancorp, Inc. This merger was accounted for under the pooling of
interests method.
(IN THOUSANDS, EXCEPT SHARE DATA) QUARTER ENDED MAR. 31, TRAILING TWELVE MONTHS ENDED MAR. 31,
-------------------------------- --------------------------------------
PERCENT PERCENT
FINANCIAL HIGHLIGHTS 1996 1995 CHANGE 1996 1995 CHANGE
- ------------------------------------------------------------------------------------ --------------------------------------
Net revenues, including security gains.............. $29,550 $27,381 7.9% $115,588 $109,552 5.5%
Operating expenses.................................. 20,988 20,673 1.5% 87,755 79,966 9.7%
Net income.......................................... 5,630 4,617 21.9% 19,284 21,086 -8.5%
Net income per share................................ 0.40 0.33 21.2% 1.37 1.50 -8.7%
Cash dividends per share............................ 0.16 0.13 23.1% 0.61 0.55 10.9%
Book value per share................................ 14.55 13.67 6.4%
QUARTER ENDED MAR. 31,
---------------------------------------
PERCENT
KEY FINANCIAL RATIOS 1996 1995 CHANGE
- ------------------------------------------------------------------------------------------------------
Return on average assets................................. 0.92% 0.87% 5.0%
Return on average equity................................. 10.77% 9.94% 8.4%
Net interest margin (FTE)................................ 3.85% 4.28% -10.0%
Net operating expense/average assets..................... 1.96% 2.39% -17.9%
Average total equity to average assets................... 8.51% 8.79% -3.1%
Other income/net revenues (1)............................ 28.5% 27.8% 2.5%
Efficiency Ratio (FTE)................................... 67.2% 71.2% -5.6%
INCOME STATEMENT
- ------------------------------------------------------------------------------------------------------
Interest income..................................... $44,637 $38,260 16.7%
Interest expense.................................... 24,041 18,925 27.0%
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Net interest income.............................. 20,596 19,335 6.5%
Provision for loan losses........................... 889 729 21.9%
Other Income:
Trust and asset management income................ 3,242 2,943 10.2%
Service charges on deposits...................... 1,680 1,732 -3.0%
Mortgage revenues................................ 733 561 30.7%
Collection fee income............................ 582 453 28.5%
Other............................................ 1,953 1,738 12.4%
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Total other income............................ 8,190 7,427 10.3%
Net security gains.................................. 764 619 23.4%
Operating expenses:
Personnel costs.................................. 11,926 11,325 5.3%
Net occupancy expense............................ 1,385 1,366 1.4%
Equipment expense................................ 1,879 1,638 14.7%
Insurance expense................................ 197 1,134 -82.6%
Professional fees................................ 608 567 7.2%
Amortization of intangible assets................ 512 642 -20.2%
Other............................................ 4,481 4,001 12.0%
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Total operating expenses...................... 20,988 20,673 1.5%
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Income before income taxes.......................... 7,673 5,979 28.3%
Income taxes........................................ 2,043 1,362 50.0%
--------------------------------------
Net income.................................... $5,630 $4,617 21.9%
======================================
Average shares outstanding (000).................... 14,192 14,046 1.0%
Ending shares outstanding (000)..................... 14,200 14,062 1.0%
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AMCORE Financial, Inc.
QUARTER ENDED MAR. 31,
(in thousands) 1996 1995
- ---------------------------------------------------------------- -----------------------------------------------------
ENDING AVERAGE YIELD/ AVERAGE YIELD/
BALANCE BALANCE RATE BALANCE RATE
- ---------------------------------------------------------------- -----------------------------------------------------
ASSETS:
Taxable securities........................ $901,464 $741,786 6.46% $525,320 6.93%
Tax-exempt securities (FTE)............... 256,177 229,774 8.00% 235,609 7.78%
Other earning assets...................... 2,581 18,878 4.09% 22,197 6.13%
Mortgage loans held for sale.............. 11,318 10,463 6.99% 7,028 8.65%
Loans, net of unearned income (FTE)....... 1,305,115 1,291,853 8.76% 1,174,331 8.66%
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Total Earning Assets................... $2,476,655 $2,292,754 7.99% $1,964,485 8.13%
Intangible assets...................... 13,793 14,107 18,046
Other non-earning assets............... 180,333 162,286 162,193
---------- -----------------------------------------------------
Total Assets........................... $2,670,781 $2,469,147 $2,144,724
========== =====================================================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest bearing deposits................. $1,554,570 $1,527,796 4.53% $1,471,226 4.16%
Non-interest bearing deposits............. 241,541 236,604 231,648
---------- -----------------------------------------------------
Total Deposits......................... $1,796,111 $1,764,400 $1,702,874
---------- -----------------------------------------------------
Short-term borrowings..................... 457,049 330,577 5.47% 208,800 6.31%
Long-term borrowings...................... 178,893 134,737 6.42% 24,497 7.65%
Other..................................... 5,301 5,273 8.29% 4,802 10.64%
---------- -----------------------------------------------------
Total Interest Bearing Liabilities..... 2,195,813 1,998,383 4.83% 1,709,325 4.49%
Other liabilities...................... 26,748 23,979 15,299
---------- -----------------------------------------------------
Total Liabilities...................... $2,464,102 $2,258,966 $1,956,272
Stockholders' Equity................... 206,679 210,181 188,452
---------- -----------------------------------------------------
Total Liabilities and
Stockholders' Equity................... $2,670,781 $2,469,147 $2,144,724
========== =====================================================
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QUARTER ENDED DEC. 31,
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PERCENT
ASSET QUALITY (IN THOUSANDS) 1996 1995 CHANGE
- ------------------------------------- ------------------------------------
Ending allowance for loan losses.......................................... $13,255 $13,775 -3.8%
Net charge-offs........................................................... 695 255 172.5%
Net charge-offs to average loans (2)...................................... 0.22% 0.09% 144.4%
Non-performing assets:
Nonaccrual............................................................. $9,744 $10,575 -7.9%
Restructured........................................................... 1,757 2,050 -14.3%
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Non-performing loans................................................ 11,501 12,625 -8.9%
Other real estate owned (OREO)......................................... 890 1,084 -17.9%
------------------------------------
Total non-performing assets......................................... $12,391 $13,709 -9.6%
====================================
Key Asset Quality Ratios
Allowance to ending loans.............................................. 1.02% 1.16% -12.3%
Allowance to non-performing loans...................................... 115.3% 109.1% 5.6%
Non-performing loans to loans.......................................... 0.88% 1.06% -17.0%
Non-performing assets to loans & OREO.................................. 0.95% 1.15% -17.6%
Capital Adequacy
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Total risk-based capital............................................... 13.36% 13.26% 0.8%
Tier 1 risk-based capital.............................................. 12.51% 12.40% 0.9%
Leverage ratio......................................................... 7.90% 8.14% -2.9%
Footnotes
(1) Excluding net security gains.
(2) On an annualized basis.