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[AMCORE FINANCIAL, INC. NEWS RELEASE]
Date: July 22, 1996
Contact: Ben Rubendall
815-961-7164
AMCORE REPORTS RECORD EARNINGS
UP 36.4 PERCENT OVER NORMALIZED 1995 QUARTERLY EARNINGS
ROCKFORD, ILL. - AMCORE Financial, Inc. posted record earnings of $6.5
million, or 45 cents per share for the quarter ended June 30, 1996, up 36.4
percent from the 1995 quarter, excluding special charges in the 1995 quarter.
Return on equity was 12.76 percent, up from 9.73 percent, and return on
assets was .96 percent, up from .83 percent, from the second quarter of 1995,
excluding the special charges.
"We are pleased with our progress toward the intermediate goal of a 15
percent return on equity," said Robert J. Meuleman, president and chief
executive officer of AMCORE Financial, Inc.
"Our results reflect the success of programs we have implemented to
generate loan volume and new strategies in the marketing of our diversified
financial services products. Also contributing to the record quarter were a
combination of favorable market factors, business growth, and the first results
of an on-going, corporate wide revenue-enhancement, cost-containment program,"
Meuleman said.
Earnings for the second quarter of 1995 would have been $4.6 million, or
33 cents per share, except for the impact of special charges totaling $3.5
million, which lowered second quarter 1995 earnings by 25 cents per share.
Those charges were associated with merger costs and the adoption of a new
accounting rule.
Net interest income for the quarter was $21.5 million, up 10.6 percent,
from $19.5 million in the same quarter of 1995. Average loans grew 9.5 percent
to $1.3 billion on a year to year basis. "The growth in our loan portfolio
reflects both the strength of the northern Illinois economy and success in
marketing efforts, particularly with our home equity-based loan programs," said
Meuleman.
While net interest income was up, the net interest margin fell 45 basis
points to 3.70 percent, down from 4.15 percent in the 1995 quarter. "The
decline in the margin was primarily due to an investment leveraging program
begun in mid-1995. We are making better use of capital through this program,
which is improving our total interest income and return on equity," Meuleman
said, adding that the return on assets improved, but was held down somewhat by
the impact of the leveraging program.
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Fee-based income for the quarter was $8.8 million up 10.4 percent, or
$821,000, excluding security gains. Much of the increase was due to a $562,000,
or 18.9 percent increase in trust revenues. The higher trust revenues are due
to the favorable investment performance of trust assets and increases in new
accounts.
Insurance revenues totaled $371,000 an increase of $227,000 over the 1995
quarter. "We remain confident in the future of our start-up insurance
operation, and expect increasing revenues as we develop new product lines and
offer insurance services at more of our banking locations," Meuleman said.
Total operating expenses for the quarter declined 1.8 percent or $372,000
from the 1995 quarter, exclusive of special charges, primarily due to a
reduction in FDIC insurance premiums. The efficiency ratio, which measures
operating expenses as a percentage of total revenues, was 63.6 percent, down
from 71.3 percent in the second quarter of 1995, excluding the special charges.
"We are continuing to expand our customer service capabilities," Meuleman
said. "During the quarter we opened our ninth in-store, supermarket branch and
announced plans to open a tenth branch later this year. We have also
implemented a computer system that allows tellers to more effectively recommend
products customers are likely to need."
AMCORE Financial, Inc. is a northern Illinois-based bank holding company
with assets of approximately $2.76 billion. Its holdings include eight
subsidiary banks operating in 38 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
TRAILING TWELVE MONTHS
(IN THOUSANDS, EXCEPT SHARE DATA) QUARTER ENDED JUNE 30, SIX MONTHS ENDED JUNE 30, ENDED JUNE 30,
----------------------------- --------------------------------- -------------------------
PERCENT PERCENT PERCENT
FINANCIAL HIGHLIGHTS 1996 1995 CHANGE 1996 1995 CHANGE 1996 1995 CHANGE
- -------------------------------------------------------------------- ---------------------------- ----------------------------
Net revenues, including security gains. $30,532 $27,828 9.7% $60,082 $55,209 8.8% $118,292 $110,658 6.9%
Operating expenses..................... 20,673 26,637 -22.4% 41,661 47,309 -11.9% 81,791 87,289 -6.3%
Net income............................. 6,457 1,140 466.4% 12,087 5,757 110.0% 24,601 16,785 46.6%
Net income per share................... 0.45 0.08 462.5% 0.85 0.41 107.3% 1.73 1.19 45.4%
Cash dividends per share............... 0.16 0.15 6.7% 0.32 0.30 6.7% 0.62 0.59 5.1%
Book value per share................... 13.95 13.81 1.0%
QUARTER ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
------------------------------ ---------------------------------
PERCENT PERCENT
KEY FINANCIAL RATIOS (A) 1996 1995 CHANGE 1996 1995 CHANGE
- --------------------------------------------------------------------------- ----------------------------------
Return on average assets............... 0.96% 0.83% 16.2% 0.94% 0.85% 10.6%
Return on average equity............... 12.76% 9.73% 31.2% 11.75% 9.89% 18.8%
Net interest margin (FTE).............. 3.70% 4.15% -10.8% 3.77% 4.21% -10.5%
Net operating expense/average assets... 1.74% 2.29% -23.9% 1.85% 2.33% -20.7%
Average total equity to average assets. 7.56% 8.55% -11.6% 8.02% 8.59% -6.7%
Other income/net revenues (1).......... 28.9% 28.9% -0.1% 28.7% 28.4% 1.2%
Efficiency Ratio (FTE)................. 63.6% 71.3% -10.8% 65.4% 71.2% -8.2%
(A) All 1995 ratios have been adjusted to exclude special charges recorded in second quarter.
INCOME STATEMENT
- ------------------------------------------------------------------------------ ------------------------------
Interest income............................ $48,505 $40,371 20.1% $93,142 $78,631 18.5%
Interest expense........................... 26,979 20,900 29.1% 51,020 39,825 28.1%
------------------------------- ------------------------------
Net interest income...................... 21,526 19,471 10.6% 42,122 39,806 8.5%
Provision for loan losses.................. 967 871 11.0% 1,856 1,600 16.0%
Other Income:
Trust and asset management income........ 3,539 2,977 18.9% 6,781 5,827 16.4%
Service charges on deposits.............. 1,720 1,695 1.5% 3,400 3,427 -0.8%
Mortgage revenues........................ 968 1,002 -3.4% 1,701 1,563 8.8%
Collection fee income.................... 564 469 20.3% 1,146 922 24.3%
Other.................................... 1,960 1,787 9.7% 3,913 3,618 8.2%
------------------------------- ------------------------------
Total other income.................... 8,751 7,930 10.4% 16,941 15,357 10.3%
Net security gains......................... 255 427 -40.3% 1,019 1,046 -2.6%
Operating expenses:
Personnel costs.......................... 11,799 12,140 -2.8% 23,725 23,465 1.1%
Net occupancy expense.................... 1,271 2,734 -53.5% 2,656 4,100 -35.2%
Equipment expense........................ 1,852 2,802 -33.9% 3,731 4,440 -16.0%
Professional fees........................ 595 1,020 -41.7% 1,203 1,587 -24.2%
Amortization of intangible assets........ 511 2,320 -78.0% 1,023 2,962 -65.5%
Insurance expense........................ 204 1,163 -82.5% 401 2,297 -82.5%
Other.................................... 4,441 4,458 -0.4% 8,922 8,458 5.5%
------------------------------- ------------------------------
Total operating expenses............. 20,673 26,637 -22.4% 41,661 47,309 -11.9%
------------------------------- ------------------------------
Income before income taxes................. 8,892 320 N/M 16,565 6,300 162.9%
Income taxes............................... 2,435 (820) N/M 4,478 543 N/M
------------------------------- ------------------------------
Net income............................ $ 6,457 $ 1,140 466.4% $12,087 $ 5,757 110.0%
=============================== ==============================
Average shares outstanding (000)........... 14,207 14,069 1.0% 14,199 14,059 1.0%
Ending shares outstanding (000)............ 14,217 14,087 0.9% 14,217 14,087 0.9%
N/M = Not meaningful
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AMCORE FINANCIAL, INC.
QUARTER ENDED JUNE 30,
(in thousands) 1996 1995
- ------------------------------------------------------- -----------------------------------------------
ENDING AVERAGE YIELD/ AVERAGE YIELD/
BALANCE BALANCE RATE BALANCE RATE
- ------------------------------------------------------- -----------------------------------------------
ASSETS:
Taxable securities...................... $886,427 $903,472 6.53% $527,309 7.17%
Tax-exempt securities (FTE)............. 270,168 260,318 8.21% 260,362 7.06%
Other earning assets.................... 3,421 5,462 5.29% 4,849 6.93%
Mortgage loans held for sale............ 10,043 10,335 8.11% 10,392 7.69%
Loans, net of unearned income (FTE)..... 1,365,535 1,330,409 8.73% 1,214,870 8.80%
----------- ---------------------------------------------
Total Earning Assets................. $2,535,594 $2,509,996 7.95% $2,017,782 8.25%
Intangible assets.................... 13,273 13,615 16,682
Other non-earning assets............. 207,364 168,906 187,788
----------- ---------------------------------------------
TOTAL ASSETS......................... $2,756,231 $2,692,517 $2,222,252
========== ============================================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest bearing deposits............... $1,571,291 $1,579,668 4.58% $1,509,785 4.59%
Non-interest bearing deposits........... 253,215 236,711 255,154
----------- ---------------------------------------------
Total Deposits....................... $1,824,506 $1,816,379 $1,764,939
----------- ---------------------------------------------
Short-term borrowings................... 525,080 464,984 5.38% 215,195 5.84%
Long-term borrowings.................... 174,227 174,937 6.09% 22,915 7.25%
Other................................... 6,036 5,924 9.10% 5,067 6.17%
----------- ---------------------------------------------
Total Interest Bearing Liabilities... 2,276,634 2,225,513 4.88% 1,752,962 4.78%
Other liabilities.................... 28,002 26,810 24,225
----------- ---------------------------------------------
Total Liabilities.................... $2,557,851 $2,489,034 $2,032,341
Stockholders' Equity................. 198,380 203,483 189,911
----------- ---------------------------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY................. $2,756,231 $2,692,517 $2,222,252
========== ============================================
SIX MONTHS ENDED JUNE 30,
(in thousands) 1996 1995
- ------------------------------------------------------------------------------------------------
AVERAGE YIELD/ AVERAGE YIELD/
BALANCE RATE BALANCE RATE
- ------------------------------------------------------------------------------------------------
ASSETS:
Taxable securities........................ $825,275 6.48% $521,557 7.19%
Tax-exempt securities (FTE)............... 245,104 8.11% 258,012 7.12%
Other earning assets...................... 9,656 5.49% 7,273 6.26%
Mortgage loans held for sale.............. 10,399 7.55% 8,718 8.08%
Loans, net of unearned income (FTE)....... 1,311,055 8.75% 1,197,232 8.71%
--------------------------------------------
Total Earning Assets................... $2,401,489 7.97% $1,992,792 8.18%
Intangible assets...................... 13,877 17,322
Other non-earning assets............... 164,856 177,730
--------------------------------------------
TOTAL ASSETS........................... $2,580,222 $2,187,844
============================================
LIABILITIES AND STOCKHOLDERS' EQUITY:
Interest bearing deposits................. $1,552,956 4.56% $1,491,459 4.38%
Non-interest bearing deposits............. 235,372 250,744
--------------------------------------------
Total Deposits......................... $1,788,328 $1,742,203
--------------------------------------------
Short-term borrowings..................... 401,479 5.37% 207,678 6.20%
Long-term borrowings...................... 151,670 6.38% 23,215 7.61%
Other..................................... 5,859 8.34% 4,975 8.27%
--------------------------------------------
Total Interest Bearing Liabilities..... 2,111,964 4.86% 1,727,327 4.65%
Other liabilities...................... 26,008 21,821
--------------------------------------------
Total Liabilities...................... $2,373,344 $1,999,892
Stockholders' Equity................... 206,878 187,952
--------------------------------------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY................... $2,580,222 $2,187,844
============================================
-------------------------------- ---------------------------------
QUARTER ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
-------------------------------- ---------------------------------
PERCENT PERCENT
ASSET QUALITY (IN THOUSANDS) 1996 1995 CHANGE 1996 1995 CHANGE
- ----------------------------------------------------------------------------------- ----------------------------------
Ending allowance for loan losses.............. $13,802 $13,645 1.2%
Net charge-offs............................... 420 1,004 -58.2% $1,115 $1,258 -11.4%
Net charge-offs to average loans (2).......... 0.13% 0.33% -60.6% 0.17% 0.21% -19.0%
Non-performing assets:
Nonaccrual................................. $12,465 $8,185 52.3%
Restructured............................... 1,726 2,661 -35.1%
-----------------------------------
Non-performing loans.................... 14,191 10,846 30.8%
Other real estate owned (OREO)............. 766 2,550 -70.0%
-----------------------------------
Total non-performing assets............. $14,957 $13,396 11.7%
===================================
KEY ASSET QUALITY RATIOS
- ----------------------------------------------
Allowance to ending loans.................. 1.01% 1.11% -8.9%
Allowance to non-performing loans.......... 97.3% 125.8% -22.7%
Non-performing loans to loans.............. 1.04% 0.88% 18.1%
Non-performing assets to loans & OREO...... 1.09% 1.08% 1.4%
CAPITAL ADEQUACY
- -----------------------------------------------------------------------------------
Total risk-based capital................... 13.29% 13.04% 1.9%
Tier 1 risk-based capital.................. 12.43% 12.12% 2.6%
Leverage ratio............................. 7.42% 8.11% -8.5%
FOOTNOTES
- ---------
(1) Excluding net security gains.
(2) On an annualized basis.
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