1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
Commission file number 0-13393
AMCORE FINANCIAL, INC.
NEVADA 36-3183870
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
501 Seventh Street, Rockford, Illinois 61104
Telephone number (815) 968-2241
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
The number of shares outstanding of the registrant's Common stock, par value
$.33 per share, at October 31, 1996 was 14,224,578 shares.
Index of Exhibits on Page 15 Page 1 of 25
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AMCORE FINANCIAL, INC.
Form 10-Q Table of Contents
PART I Page Number
ITEM 1 Financial Statements
Consolidated Balance Sheets as of September 30, 1996 and
December 31, 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Consolidated Statements of Income for the Three and Nine
Months Ended September 30, 1996 and 1995 . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows for the Nine
Months Ended September 30, 1996 and 1995 . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . 6
ITEM 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . 9
PART II
ITEM 4 Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . 15
ITEM 6 Exhibits and Reports on Form 10-Q . . . . . . . . . . . . . . . . . . . . . 15
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
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AMCORE Financial, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
(in thousands, except share data) 1996 1995
=========================================================================================================================
Assets Cash and cash equivalents................................................... $ 106,681 $ 101,082
Interest earning deposits in banks.......................................... 384 260
Federal funds sold and other short-term investments......................... 60,317 9,050
Mortgage loans held for sale................................................ 9,378 15,801
Securities available for sale............................................... 1,162,613 884,044
Securities held to maturity (fair value of $11,586 in 1996; $24,967 in 1995) 11,509 24,625
---------------------------
Total securities......................................................... $ 1,174,122 $ 908,669
Loans and leases, net of unearned income.................................... 1,435,562 1,285,961
Allowance for loan and lease losses......................................... (15,078) (13,061)
---------------------------
Net loans and leases..................................................... $ 1,420,484 $ 1,272,900
Premises and equipment, net................................................. 46,433 49,670
Intangible assets, net...................................................... 12,766 14,314
Other real estate owned..................................................... 540 2,116
Other assets................................................................ 59,677 44,670
---------------------------
TOTAL ASSETS............................................................. $ 2,890,782 $ 2,418,532
===========================
Liabilities LIABILITIES
And Deposits:
Stockholders' Interest bearing........................................................... $ 1,677,181 $ 1,512,473
Equity Non-interest bearing....................................................... 260,808 265,232
--------------------------
Total deposits........................................................... $ 1,937,989 $ 1,777,705
Short-term borrowings....................................................... 559,246 292,042
Long-term borrowings........................................................ 148,761 107,803
Other liabilities........................................................... 37,198 31,120
--------------------------
TOTAL LIABILITIES........................................................ $ 2,683,194 $ 2,208,670
--------------------------
STOCKHOLDERS' EQUITY
Preferred stock, $1 par value: authorized 10,000,000 shares;
issued none................................................................ $ - $ -
Common stock, $.33 par value: authorized 30,000,000 shares;
September 30, December 31,
1996 1995
Issued.......... 14,926,695 14,926,695
Outstanding..... 14,224,578 14,174,183 4,976 4,976
Treasury........ 702,117 752,512
Additional paid-in capital.................................................. 56,639 56,412
Retained earnings........................................................... 161,010 149,315
Treasury stock and other.................................................... (6,197) (6,659)
Net unrealized gain (loss) on securities available for sale................. (8,840) (5,818)
--------------------------
TOTAL STOCKHOLDERS' EQUITY............................................... $ 207,588 $ 209,862
--------------------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY............................... $ 2,890,782 $ 2,418,532
==========================
See accompanying notes to consolidated financial statements.
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AMCORE Financial, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
(in thousands, except per share data) 1996 1995 1996 1995
=======================================================================================================================
Interest Interest and fees on loans and leases........................... $ 30,936 $ 28,158 $ 88,773 $ 80,496
Income Interest on securities:
Taxable....................................................... 15,205 10,237 42,093 29,081
Tax-exempt.................................................... 3,651 3,003 10,183 9,003
------------------- ------------------
Total Income from Securities............................... $ 18,856 $ 13,240 $ 52,276 $ 38,084
------------------- ------------------
Interest on federal funds sold and other short-term investments 131 37 529 263
Interest and fees on mortgage loans held for sale.............. 576 991 2,043 2,205
Interest on deposits in banks................................... 8 6 28 15
------------------- ------------------
Total Interest Income...................................... $ 50,507 $ 42,432 $143,649 $121,063
------------------- ------------------
Interest Interest on deposits............................................. $18,649 $ 17,990 $ 53,889 $ 50,353
Expense Interest on short-term borrowings................................ 7,381 3,867 18,103 10,249
Interest on long-term borrowings................................. 2,190 403 7,005 1,279
Other............................................................ 125 91 368 295
------------------- ------------------
Total Interest Expense...................................... $28,345 $ 22,351 $ 79,365 $ 62,176
------------------- ------------------
Net Interest Income.............................................. $22,162 $ 20,081 $ 64,284 $ 58,887
Provision for loan and lease losses......................... 2,234 320 4,090 1,920
------------------- ------------------
Net Interest Income After Provision for Loan and Lease
Losses...................................................... $19,928 $ 19,761 $ 60,194 $ 56,967
------------------- ------------------
Other Trust and asset management income................................ $ 3,430 $ 2,743 $ 10,211 $ 8,763
Income Service charges on deposits...................................... 1,644 1,879 5,044 5,306
Mortgage revenues................................................ 940 1,069 2,641 2,632
Insurance revenues............................................... 894 335 1,519 667
Collection fee income............................................ 501 464 1,647 1,386
Gain on sale of merchant bankcard processing accounts............ 1,400 - 1,400 -
Other............................................................ 1,983 1,563 5,271 4,656
------------------- ------------------
Total Other Income, Excluding Net Realized Security
Gains...................................................... $10,792 $ 8,053 $ 27,733 $ 23,410
Net realized security gains...................................... 352 400 1,371 1,446
------------------- ------------------
Total Other Income.......................................... $11,144 $ 8,453 $ 29,104 $ 24,856
Operating Compensation expense.......................................... $ 8,991 $ 9,352 $ 27,141 $ 27,501
Expenses Employee benefits............................................. 2,392 2,375 7,967 7,691
Net occupancy expense......................................... 1,309 1,372 3,965 3,877
Equipment expense............................................. 2,001 1,756 5,732 6,196
Professional fees............................................. 555 587 1,758 2,174
Advertising and business development.......................... 548 615 1,762 1,846
Amortization of intangible assets............................. 500 516 1,523 1,804
Impairment of long-lived assets............................... - - - 3,269
Insurance expense............................................. 445 90 846 2,387
Other......................................................... 4,828 3,287 12,536 10,515
------------------ ------------------
Total Operating Expenses $21,569 $ 19,950 $ 63,230 $ 67,260
------------------ ------------------
Income Before Income Taxes.................................... $ 9,503 $ 8,264 $ 26,068 $ 14,563
Income taxes.................................................. 2,597 2,024 7,075 2,566
------------------ ------------------
NET INCOME................................................. $ 6,906 $ 6,240 $ 18,993 $ 11,997
================== ==================
EARNINGS PER COMMON SHARE.................................. $ 0.49 $ 0.44 $ 1.34 $ 0.85
DIVIDENDS PER COMMON SHARE................................. 0.16 0.15 0.48 0.45
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING................. 14,217 14,089 14,205 14,069
See accompanying notes to consolidated financial statements.
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AMCORE Financial, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
(in thousands) 1996 1995
==================================================================================================
Cash Flows NET INCOME................................................. $ 18,993 $ 11,997
From Adjustments to reconcile net income to net
Operating cash provided by operating activities:
Activities Depreciation and amortization of premises
and equipment ...................................... 3,651 3,565
Amortization and accretion of securities, net......... 2,707 136
Provision for loan and lease losses................... 4,090 1,920
Amortization of intangible assets..................... 1,523 3,478
Gain on sale of securities available for sale......... (1,469) (1,567)
Loss on sale of securities available for sale......... 93 121
Gain on sale of trading securities ................... - (1)
Loss on sale of trading securities ................... - 5
Purchase of trading securities........................ (536) (8017)
Proceeds from sale of trading securities.............. 536 8013
Gain on sale of merchant bankcard processing accounts. (1,400) -
Impairment of long-lived assets....................... - 1,595
Write-down of other real estate owned................. - 123
Non-employee directors compensation expense........... 352 218
Deferred income taxes................................. 2,441 (2,458)
Net decrease(increase) in mortgage loans held for
sale.................................................. 6,423 (4,311)
Other, net............................................ 1,841 4,503
---------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES.......... $ 39,245 $ 19,320
---------------------
Cash Flows Proceeds from maturities of securities..................... $ 145,009 $ 111,232
From Proceeds from sales of securities available for sale....... 147,756 140,972
Investing Purchase of securities held to maturity.................... (517) (16,844)
Activities Purchase of securities available for sale.................. (583,354) (286,405)
Net (increase) decrease in federal funds sold and other
short-term investments .................................. (51,267) 3,736
Net (increase) decrease in interest earning deposits
in banks ................................................. (124) 32
Proceeds from the sale of merchant bankcard
processing accounts ..................................... 1,400 -
Proceeds from the sale of loans and leases................. 2,044 -
Net increase in loans and leases........................... (154,101) (115,631)
Proceeds from the sale of premises and equipment........... 1,921 266
Premises and equipment expenditures........................ (3,774) (5,911)
---------------------
NET CASH REQUIRED FOR INVESTING ACTIVITIES......... ($495,007) ($168,553)
---------------------
Cash Flows Net increase in demand deposits and savings accounts....... $ 34,041 $ 21,459
From Net increase in time deposits.............................. 126,243 97,845
Financing Net increase in short-term borrowings...................... 235,704 45,591
Activities Proceeds from long-term borrowings......................... 74,500 -
Payment of long-term borrowings............................ (2,165) (4,613)
Dividends paid............................................. (6,816) (6,078)
Proceeds from exercise of incentive stock options.......... 337 270
Other, net................................................. (483) -
NET CASH PROVIDED BY FINANCING ACTIVITIES.......... $ 461,361 $ 154,474
---------------------
Net change in cash and cash equivalents.................... $ 5,599 $ 5,241
---------------------
Cash and cash equivalents:
Beginning of year........................................ 101,082 92,201
---------------------
End of period............................................ $ 106,681 $ 97,442
=====================
Supplemental Cash payments for:
Disclosures of Interest paid to depositors.............................. $ 52,031 $ 46,582
Cash Flow Interest paid on borrowings.............................. 22,731 11,112
Information Income taxes paid........................................ 6,554 3,924
Non-Cash Other real estate acquired in settlement of loans.......... 600 2,419
Activities
See accompanying notes to consolidated financial statements.
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ITEM 1 - FINANCIAL STATEMENTS (CONTINUED)
AMCORE FINANCIAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial reporting and with instructions for Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, these financial statements do not include all the
information and footnotes required by generally accepted accounting principles.
These financial statements include, however, all adjustments (consisting of
normal recurring accruals), which in the opinion of management, are considered
necessary for the fair presentation of the results of operations for the
periods shown.
Operating results for the three and nine month periods ended September 30, 1996
are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 1996. For further information, refer to the
consolidated financial statements and footnotes thereto included in the Form
10-K Annual Report of AMCORE Financial, Inc. and Subsidiaries (the "Company")
for the year ended December 31, 1995.
NOTE 2 - EARNINGS PER SHARE
Earnings per share is based on dividing net income by the weighted average
number of shares of common stock outstanding during the periods, adjusted for
common stock equivalents. Common stock equivalents consist of shares issuable
under options granted pursuant to stock plans. The fully-dilutive effect of
common stock equivalents on earnings per share was less than three percent for
all periods presented (see Exhibit 11).
NOTE 3 - SECURITIES
A summary of securities at September 30, 1996 and December 31, 1995 were as
follows:
- -----------------------------------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Market
(in thousands) Cost Gains Losses Value
- ---------------------------------------------------------------------------------------------------
At September 30, 1996:
Securities Held to Maturity:
U.S. Treasury $ 1,596 $ - $ - $ 1,596
State and political subdivisions 6,998 104 (27) 7,075
Corporate obligations and other 2,915 - - 2,915
- ---------------------------------------------------------------------------------------------------
Total Securities Held to Maturity $ 11,509 $ 104 ($27) $ 11,586
- ---------------------------------------------------------------------------------------------------
Securities Available for Sale:
U.S. Treasury $ 98,699 $ 505 ($626) $ 98,578
U.S. Government agencies 726,011 1,695 (15,575) 712,131
State and political subdivisions 264,516 3,352 (3,521) 264,347
Mortgage-backed securities 23,419 96 (251) 23,264
Corporate obligations and other 64,701 147 (555) 64,293
- ---------------------------------------------------------------------------------------------------
Total Securities Available for Sale $ 1,879,937 $ 7,394 ($35,852) $ 1,881,479
- ---------------------------------------------------------------------------------------------------
Total Securities $ 1,891,446 $ 7,498 ($35,879) $ 1,863,065
- ---------------------------------------------------------------------------------------------------
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NOTE 3 - SECURITIES (CONTINUED)
- ------------------------------------------------------------------------------------------------
Gross Gross
Amortized Unrealized Unrealized Market
(in thousands) Cost Gains Losses Value
- ------------------------------------------------------------------------------------------------
At December 31, 1995:
Securities Held to Maturity:
U.S. Treasury $ 7,601 $ 25 ($6) $ 7,620
State and political subdivisions 9,233 318 (20) 9,531
Corporate obligations and other 7,791 25 7,816
- -----------------------------------------------------------------------------------------------
Total Securities Held to Maturity $ 24,625 $ 368 ($26) $ 24,967
- -----------------------------------------------------------------------------------------------
Securities Available for Sale:
U.S. Treasury $ 110,382 $ 1,342 ($197) $ 111,527
U.S. Government agencies 54,128 543 (153) 54,518
State and political subdivisions 218,273 5,418 (1,064) 222,627
Mortgage-backed securities 415,125 4,174 (634) 418,665
Corporate obligations and other 76,546 562 (401) 76,707
- -----------------------------------------------------------------------------------------------
Total Securities Available for sale $ 874,454 $ 12,039 ($2,449) $ 884,044
- -----------------------------------------------------------------------------------------------
Total Securities $ 899,079 $ 12,407 ($2,475) $ 909,011
- -----------------------------------------------------------------------------------------------
NOTE 4 - LOANS AND LEASES AND ALLOWANCE FOR LOAN AND LEASE LOSSES
The components of non-performing loans and leases at September 30, 1996 and
December 31, 1995 were as follows:
September 30, December 31,
1996 1995
----------------------------
Non-accrual loans and leases $12,804 $10,432
Restructured loans and leases 379 2,491
----------------------------
Total non-performing loans and leases $13,183 $12,923
----------------------------
Past due loans 90 days or more and still accruing interest and not included
above totaled $2,477 and $1,301 at September 30, 1996 and December 31, 1995,
respectively.
An analysis of the allowance for loan and lease losses for the periods ended
September 30, 1996 follows:
Three Months Ended Nine Months Ended
September 30, 1996 September 30, 1996
-----------------------------------------
Balance at the beginning of period $13,802 $13,061
Charge-Offs:
Commercial loans and leases 124 231
Real estate loans -- 230
Installment loans 902 2,178
Credit card loans 162 451
-----------------------------------------
1,188 3,090
Recoveries:
Commercial loans and leases 32 120
Real estate loans 13 262
Installment loans 175 591
Credit card loans 10 44
-----------------------------------------
230 1,017
-----------------------------------------
Net Charge-Offs 958 2,073
Provision charged to expense 2,234 4,090
-----------------------------------------
Balance at end of period $15,078 $15,078
=========================================
Ratio of net charge-offs during the period to average
loans outstanding during the period 0.27% 0.21%
=========================================
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NOTE 5 - LONG-TERM BORROWINGS
The Company has a term loan agreement (Agreement) with an unaffiliated
financial institution that requires semi-annual principal payments and allows
several interest rate and funding period options. At September 30, 1996, the
balance was $15.3 million at an interest rate of 7.16%. The Agreement contains
several restrictive covenants, including dividend payments, maintenance of
various capital adequacy levels and certain restrictions with regard to other
indebtedness. There were no covenant violations of the Agreement as of the end
of the period.
In late 1995 and during 1996, several of the Company's subsidiary banks
borrowed from the Federal Home Loan Bank (FHLB) in connection with the purchase
of mortgage-backed securities for the investment leveraging program. The
current balance of these borrowings is $158,750,000 with an average maturity of
2.2 years, and a weighted average borrowing rate of 5.68%.
Scheduled reductions of long-term borrowings are as follows:
---------------------------------------------------------------------------------------------
(in thousands) Total
---------------------------------------------------------------------------------------------
1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,665
1997 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72,218
1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38,726
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,001
2000 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33,780
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 871
---------------------------------------------------------------------------------------------
SUB-TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 176,261
Less current portion of FHLB borrowings . . . . . . . . . . . . . . . . . . (27,500)
- ----------------------------------------------------------------------------------------------
TOTAL LONG-TERM BORROWINGS . . . . . . . . . . . . . . . . . . . . . . . $ 148,761
- ----------------------------------------------------------------------------------------------
Other long-term borrowings include a non-interest bearing note from the
January, 1993 acquisition of Rockford Mercantile Agency. The note requires
annual payments of $444,000 beginning in 1994 through 2002. The note was
discounted at an interest rate of 8.0%
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AMCORE FINANCIAL, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Management's discussion and analysis focuses on the significant factors which
affected AMCORE Financial, Inc. and subsidiaries (the "Company") financial
condition as of September 30, 1996 as compared to December 31, 1995 and the
results of operations for the three and nine months ended September 30, 1996 as
compared to the same periods in 1995. This discussion is intended to be read
in conjunction with the consolidated financial statements and notes thereto
appearing elsewhere in this report.
EARNINGS SUMMARY
Net income for the third quarter of 1996 was a record $6.9 million, a 10.7% or
$666,000 increase over the third quarter of 1995. Quarterly earnings per share
reached a record $.49 in comparison to the $.44 posted a year earlier. Through
the first nine months of 1996, net income was $19.0 million as compared to
$12.0 million in 1995. Excluding a $3.5 million after-tax charge recorded in
1995, the increase was $3.5 million, or 22.8%. This prior year charge was
related to the impairment of certain long-lived assets required by a new
accounting rule and costs associated with increased merger activity. On a
year-to-date basis, earnings per share totaled $1.34 versus $.85 in 1995.
The record earnings were primarily the result of higher net interest income,
which rose $2.1 million or 10.4%. This increase was caused by strong loan
growth and the impact of an investment leveraging program as discussed in the
Net Interest Income Section. Earnings were further strengthened by a $687,000,
or 25%, increase in trust and asset management income also elevated earnings;
primarily the result of favorable investment performance, growth in the AMCORE
Vintage Funds proprietary mutual fund family and new accounts.
The return on average equity (ROE) for the quarter was 13.60%, up from 12.61%
in 1995. The return on assets (ROA) was 1.00% and 1.08%, respectively, for the
third quarters of 1996 and 1995. On a year-to-date basis, ROE and ROA were
12.35% and .96% respectively, compared with the prior year ROE of 10.85% and
ROA of .94%, after exclusion of the one-time charges. Including the one-time
charges in 1995, ROE and ROA were 8.42% and .73%, respectively.
NET INTEREST INCOME
Net interest income is the primary source of earnings for the Company's banking
and financial service affiliates, totaling $22.2 million in the third quarter
of 1996, as compared to $20.1 million in the same quarter of 1995. This
represents an increase of $2.1 million or 10.4%. Net interest income on a
year-to-date basis totaled $64.3 million, increasing $5.4 million or 9.2% over
1995. For the following analysis, net interest income is presented on a tax
equivalent basis, which adjusts reported interest income on tax-exempt loans
and securities to compare with other sources of fully taxable interest income.
Unlike changes in volume, or rates paid or earned, it has no effect on actual
net interest income or net income as reported in the Consolidated Financial
Statements.
As shown in the following table, tax equivalent net interest income totaled
$24.2 million for the third quarter of 1996, an increase of $2.4 million or
11.2% over the prior year. This increase was primarily a result of higher loan
and investment volumes. The net interest margin, which is computed by dividing
the annualized tax equivalent net interest income by average earning assets,
declined by 36 basis points from 4.04% to 3.68% in the third quarter 1996. The
net interest margin on a year-to-date basis reflected a 43 basis point decline
falling to 3.73% from 4.16% in the prior year. These declines were caused by
the impact of an investment leveraging program and a shift in the deposit mix
to higher rate time deposits. Growth in average loan volumes helped to
mitigate some of the interest margin compression.
The investment leveraging program is designed to better deploy underutilized
capital at affiliate banks and improve the return on equity. The program is
funded through repurchase agreements and Federal Home Loan Bank (FHLB)
borrowings. The proceeds of these borrowings are principally invested in
mortgage-backed securities, municipal and agency securities. While the program
resulted in $1.6 million of additional net interest
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income, it reduced the core net interest spread by 51 basis points from 4.19% to
3.68% for the third quarter of 1996. For the prior year quarter, leveraging
transactions added $678,000 to net interest income and reduced core net interest
spread from 4.30% to 4.04%, a 26 basis point decline. In these leveraging
transactions, investments are made which yield rates exceeding the marginal
costs of funds, but are significantly below the average yield earned by the
company. On a year-to-date basis, the additional net interest income was $4.0
million in 1996 versus $1.6 million a year earlier, a net increase of $2.4
million. Excluding the impact of this program, the core net interest margin for
the third quarter of 1996 declined 11 basis points from the prior year to 4.19%
and, on a year-to-date basis, declined 17 basis points to 4.19%.
ANALYSIS OF NET INTEREST INCOME-TAX EQUIVALENT BASIS
Unaudited Quarters Ended September 30,
(in thousands)
Average Balance Average Rate
- ---------------- ----------------
1996 1995 1996 1995
- ---- ---- ---- ---- INTEREST EARNING ASSETS:
$882,233 $585,307 6.74% 6.84% Taxable securities..............................
267,082 253,627 8.23% 7.13% Tax-exempt securities (1).......................
- ---------- --------- ----- -----
$1,149,315 $838,934 7.09% 6.93% Total securities.............................
- ---------- --------- ----- -----
$8,411 $15,214 7.72% 8.18% Mortgage loans held for sale (3)................
1,402,874 1,250,852 8.65% 8.83% Loans (1) (2)...................................
10,244 3,169 5.31% 5.31% Other earning assets............................
Fees on mortgage loans held for sale (3)........
- ---------- ---------- ----- -----
$2,570,844 $2,108,169 8.00% 8.19% TOTAL EARNING ASSETS (FTE)
- ---------- ---------- ----- -----
INTEREST BEARING LIABILITIES:
$441,298 $453,328 2.52% 2.52% Interest-bearing demand deposits................
147,046 165,852 2.31% 2.53% Savings deposits................................
1,021,053 955,122 5.84% 5.84% Time deposits...................................
- ---------- ---------- ----- -----
$1,609,397 $1,574,302 4.61% 4.53% Total interest-bearing deposits...............
- ---------- ---------- ----- -----
$519,658 $236,580 5.65% 6.48% Short-term borrowings...........................
156,780 21,994 5.56% 7.27% Long-term borrowings............................
6,117 4,795 8.13% 7.53% Other...........................................
- ---------- ---------- ----- -----
TOTAL INTEREST-BEARING
$2,291,952 $1,837,671 4.92% 4.83% LIABILITIES..................................
- ---------- ---------- ----- -----
3.08% 3.36% INTEREST RATE SPREAD (FTE)......................
----- -----
NET INTEREST MARGIN/
3.68% 4.04% NET INTEREST INCOME (FTE)....................
===== =====
Interest Earned 1996/1995
or Change
Paid Due to
---------------- ----------------
1996 1995 Volume Rate
------ ------ ------- ----
INTEREST EARNING ASSETS:
Taxable securities.............................. $15,205 $10,237 $5,119 ($151)
Tax-exempt securities (1)....................... 5,617 4,620 255 742
------- ------- ------ -----
Total securities............................. $20,822 $14,857 $5,374 $591
------- ------- ------ -----
Mortgage loans held for sale (3)................ $166 $318 ($135) ($17)
Loans (1) (2)................................... 31,009 28,216 3,370 (577)
Other earning assets............................ 139 43 96 0
Fees on mortgage loans held for sale (3)........ 410 673 (232) (31)
------- ------- ------ -----
TOTAL EARNING ASSETS (FTE) $52,546 $44,107 $8,473 ($34)
======= ======= ====== =====
INTEREST BEARING LIABILITIES:
Interest-bearing demand deposits................ $2,798 $2,883 ($78) ($7)
Savings deposits................................ 854 1,057 (116) (87)
Time deposits................................... 14,997 14,050 984 (37)
------- ------- ------ -----
Total interest-bearing deposits............... $18,649 $17,990 $790 ($131)
------- ------- ------ -----
Short-term borrowings........................... $7,381 $3,867 $4,146 ($632)
Long-term borrowings............................ 2,190 403 1,936 (149)
Other........................................... 125 91 27 7
------- ------- ------ -----
TOTAL INTEREST-BEARING
LIABILITIES.................................. $28,345 $22,351 $6,899 ($905)
------- ------- ------ -----
INTEREST RATE SPREAD (FTE)......................
------- ------- ------ -----
NET INTEREST MARGIN/
NET INTEREST INCOME (FTE).................... $24,201 $21,756 $1,574 $871
======= ======= ====== ====
The above table shows the changes in interest income (tax equivalent) and
interest expense attributable to rate and volume variances. The change in
interest income (tax equivalent) due to both rate and volume has been allocated
to rate and volume changes in proportion to the relationship of the absolute
dollar amounts of the change in each.
(1) The interest on tax-exempt investment loans and securities is calculated
on a tax equivalent basis using a federal tax rate of 35%.
(2) The balances of nonaccrual loans are included in average loans
outstanding. Interest on loans includes yield-related loan fees.
(3) The yield-related fees recognized from the origination of mortgage loans
held for sale are in addition to the interest earned on the loans during
the period in which they are warehoused for sale as shown above.
Total average earning assets for the quarter were $2.57 billion, an increase of
$462.7 million or 21.9% over 1995. Average loans grew by $152 million or
12.2%, primarily the result of growth in commercial real estate loans and
consumer loan portfolios. Average total securities rose by $310.3 million, or
37.0%, to $1.15 billion for the quarter versus $838.9 million in 1995.
Average total interest-bearing liabilities for the third quarter grew to $2.29
billion, a 24.7% or $454.3 million increase over the prior year. Average
interest-bearing deposits rose by $35.1 million or 2.2% during the third
quarter. Growth in average time deposits of $65.9 million more than offset the
$12.0 million decline in interest-bearing demand deposits and $18.8 million
decline in savings deposits, and was utilized to fund loan growth. For the
third quarter, average short-term borrowings rose to $519.7 million, an
increase of $283.0 million over the same quarter in 1995. Average long-term
borrowings also increased $134.8 million from the prior year quarter and
totaled $156.8 million. The increases in borrowings were due to the use of
repurchase agreements
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and FHLB borrowings for the funding of the investment leveraging program.
Average earning assets as a percentage of total average assets was 93.3% and
91.6%, respectively, for the third quarters of 1996 and 1995. The increase was
the result of a 22.0% increase in average earning assets due to the leveraging
strategy and management's focus on reducing non-earning assets.
The yield on average earning assets for the third quarter of 1996 was 8.00%, a
decline of 19 basis points from the 1995 yield for the same period. The
average rate paid on interest bearing liabilities rose by 9 basis points to
4.92% resulting in a decrease in the net interest rate spread of 28 basis
points to 3.08%.
The average rate paid on interest-bearing deposits, as well as time deposits,
remained stable for the third quarter of 1996 at 2.52% and 5.84%, respectively.
Interest bearing savings deposits, however, declined by 22 basis points to
2.31%.
The average rate paid on short-term borrowings declined from 6.48% to 5.65% in
the third quarter, primarily due to lower prevailing short-term rates. The
average rate paid on long-term borrowings also declined in the third quarter
from 7.27% in 1995 to 5.56% in 1996. This decline was mainly due to the lower
rates associated with FHLB borrowings, which have an average rate of 5.68% and
an average maturity of 2.2 years and the impact of a gain on a terminated
interest rate swap that is being amortized over the original estimated life.
On a year-to-date basis, tax equivalent net interest income was $69.9 million
in 1996, an increase of $6.0 million or 9.4% over 1995. For this same period,
the net interest margin was 3.73% as compared to 4.16% for the prior year.
Loan growth and the investment leveraging program resulted in the higher net
interest income. Increased premium amortization, however, from the prepayment
of mortgage-backed securities earlier this year and a larger mix of higher rate
time deposits resulted in the net interest margin decline of 43 basis points.
Earning assets for the first nine months of 1996 yielded 7.97%, a 23 basis
point decline from 1995. At the same time, the average rate paid on interest
bearing liabilities increased by 15 basis points to 4.58%.
PROVISION AND ALLOWANCE FOR LOAN AND LEASE LOSSES
The provision for loan and lease losses was $2.2 million for the third quarter
of 1996 as compared to $320,000 for the same period a year earlier. These
increased provisions were made in response to growth in the loan portfolio and
to strengthen overall reserve ratios. Total net charge-offs for the quarter
were $1.0 million versus $770,000 in 1995. On a year-to-date basis, net
charge-offs totaled $2.1 million in 1996, up from the $2.0 million recorded in
1995. The annualized ratio of third quarter net charge-offs to average loans
and leases was .27% in 1996 versus .25% a year earlier. The year-to-date ratio
was .21% in 1996 as compared to .22% in 1995. Losses at the consumer finance
company, which typically run higher than banks, totaled $190,000 for the
quarter and $423,000 on a year-to-date basis. Without the impact of the
finance company net charge-offs, the annualized ratios would have been .23% for
the quarter and .16% year-to-date for 1996. Provisions are expected to remain
at or above third quarter levels in the near term due to continuing loan growth
and the expansion of the consumer finance business.
Total non-performing loans were $13.2 million at September 30, 1996, an
increase of $2.8 million since December 31, 1995, due primarily to one local
commercial loan totaling $3.1 million. The company to whom the loan was
extended has filed for voluntary bankruptcy pending the appeal of a product
liability judgment against the company. No loss has been allocated to this
loan, however, the ultimate resolution of the appeal and its effect on the
company cannot be determined at this time. Total other real estate owned was
$540,000 at the end of the third quarter, a decline of $1.6 million when
compared with the $2.1 million at December 31, 1995 due to the disposition of
three large properties. Accordingly, total non-performing assets were $13.7
million at September 30, 1996, an increase of $1.1 million since December 31,
1995.
The allowance for loan and lease losses as a percentage of total net loans and
leases was 1.05% at September 30, 1996, compared to 1.04% a year ago and 1.02%
at December 31, 1995. At September 30, 1996, the allowance covered 114.4% of
non-performing loans and leases versus 101.1% at December 31, 1995 and 107.5%
at September 30, 1995. Total non-performing assets, which includes
non-performing loans and leases and other real estate owned, as a percentage of
loans, leases and other real estate owned were .96% at September 30, 1996,
compared to 1.16% a year earlier and 1.09% at December 31, 1995.
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OTHER INCOME
Non-interest income for the third quarter of 1996 increased by 34.0% or $2.7
million exclusive of net security gains over the prior year quarter. Slightly
more than half of this increase resulted from the sale of the merchant bankcard
processing accounts during the quarter. The gain from the sale totaled $1.4
million. On a year-to-date basis, non-interest income totaled $27.7 million, a
$4.3 million or 18.5% increase over 1995, exclusive of net security gains.
Trust and asset management income totaled $3.4 million for the third quarter of
1996, a $687,000 or 25.0% increase over the comparable period last year. On a
year-to-date basis, trust and asset management income rose to $10.2 million, an
increase of $1.4 million or 16.5% over the prior year. These increases were
the result of favorable market performance of trust assets, growth in the
AMCORE Vintage Funds proprietary mutual fund family and the addition of new
trust accounts. Other non-interest income increased $1.7 million or 101.6% for
the quarter and $1.7 million or 34.4% on a year-to-date basis. This increase
was the primary result of the gain on the sale of the merchant bankcard
accounts.
Mortgage revenues totaled $940,000 for the third quarter of 1996, a decline of
12.1% from the third quarter of 1995 due to a drop in mortgage loan volumes.
This was partially offset by increased servicing income from a larger servicing
portfolio. On a year-to-date basis, mortgage revenues totaled $2.6 million,
virtually unchanged from the same period of 1995.
Insurance revenues totaled $894,000 for the third quarter of 1996, an increase
of $559,000 over the same period a year ago. On a year-to-date basis,
insurance revenues totaled $1.5 million versus $667,000 during the nine months
in 1995. The growth was due to a combination of increased credit life sales as
well as a change in accounting practices to report insurance revenues on a
gross basis prior to deductions for claims reserves and other related costs.
Net security gains for the third quarter of 1996 were $352,000 versus $400,000
a year earlier. On a year-to-date basis, net security gains were $1.4 million,
virtually unchanged from the same period of 1995.
OPERATING EXPENSES
Total operating expenses for the third quarter of 1996 were $21.6 million, a
$1.6 million or 8.1% increase over 1995. This increase was caused by increases
in equipment, insurance and other expenses as discussed below.
On a year-to-date basis, these expenses totaled $63.2 million versus $67.3
million in 1995, a decrease of $4.0 million. Approximately $5.6 million of the
1995 year-to-date expense was caused by the impairment and merger-related
charges recorded in 1995. Excluding these charges, total operating expenses
for the year would have increased by $1.6 million or 2.6%.
Personnel costs, which includes compensation expense and employee benefits, is
the largest component of operating expense. Total personnel costs in the third
quarter of 1996 declined $344,000 or 2.9% over the prior year quarter. This
decrease was primarily due to lower mortgage commission paid because of lower
mortgage loan volumes and increases in deferred salaries resulting from higher
loan volumes in 1996. On a year-to-date basis, personnel costs totaled $35.1
million and increased $665,000 or 1.9% over 1995, exclusive of $749,000 in 1995
merger-related charges. The increase was primarily due to increased benefit
expenses and higher insurance commission expense.
Total equipment expense for the third quarter of 1996 was $2.0 million versus
$1.8 million a year earlier, an increase of $245,000 or 14.0%. On a
year-to-date basis, equipment expense totaled $5.7 million, an increase of
$736,000 or 14.7% over 1995, exclusive of the prior year's $1.2 million in
merger-related charges. These increases were principally caused by the upgrade
in information systems hardware and software and various client/server
networks. These upgrades were associated with the installation of a new teller
automation product delivery system and the expansion of this system throughout
the entire customer service platform. The teller system was fully implemented
during the second quarter of 1996. The platform phase will be approximately
20% implemented by year end and should be fully implemented by year end 1997.
Equipment costs should continue to be at or above prior year levels, but it is
expected that operational productivity will be improved by the teller and
platform systems and that cross-selling capabilities will also be enhanced.
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Professional fees totaled $555,000 for the third quarter of 1996, a decline of
$32,000 or 5.5% over the same period in 1995. On a year-to-date basis,
professional fees totaled $1.8 million declining $154,000 or 8.1% from the
prior year, exclusive of $262,000 in merger-related charges.
Intangibles amortization expense totaled $500,000 in the third quarter of 1996,
a decline of $16,000 or 3.1% from 1995; and on a year-to-date basis, totaled
$1.5 million, a decline of $281,000 or 15.6% from the prior year. The declines
in amortization expense were due mainly to lower levels of collection agency
intangibles caused by a $1.7 million impairment charge in the second quarter of
1995 which resulted from the early adoption of Statement of Financial
Accounting Standards (FAS) No. 121 - "Accounting for the Impairment of
Long-Lived Assets". The total impact of this new accounting standard in 1995
was $3.3 million, as shown on the Consolidated Statements of Income, and also
included a $1.6 million charge for the reduction of carrying values assigned to
certain bank facilities.
Insurance expense totaled $445,000 for the quarter versus $90,000 for the same
period in 1995. The increase is primarily due to a one-time special assessment
of $228,000 booked as a result of legislation signed into law on September 30,
1996 related to Savings Association Insurance Fund (SAIF) - assessable
deposits. For further information on this, please refer to the information
under Other Matters. On a year-to-date basis, insurance expense decreased $1.5
million from 1995 to 1996 due to the reduction of FDIC insurance premiums.
Other operating expense includes loan processing costs, printing and supplies,
communication expense, credit card expense, other real estate expense, external
data processing costs, correspondent bank fees, and other miscellaneous
expenses. This category of expense totaled $4.8 million for the third quarter
of 1996, an increase of $1.5 million or 46.9% from the prior year quarter. The
increase in other operating expense was primarily due to insurance claim
reserves and related expenses resulting from the change in accounting practice
for insurance revenues and the $300,000 loss on the sale of a building that was
sold during the quarter. On a year-to-date basis, other operating expense
totaled $12.5 million, an increase of $2.0 million or 19.2% over 1995 due to a
combination of higher loan processing costs, additional credit card expenses,
and the items mentioned for the quarter.
Income tax expense for the third quarter of 1996 totaled $2.6 million versus
$2.0 million the prior year. The effective tax rate rose to 27.3%, up from
24.5% in the same quarter last year due to a higher proportion of taxable
earnings. For the nine months ended September 30, 1996, income taxes totaled
$7.1 million compared to $2.6 million in 1995. The effective tax rate on a
year-to-date basis was 27.1% versus 24.7% in 1995, excluding the impact of the
impairment and merger-related charges and tax credits recorded in 1995.
SUMMARY OF FINANCIAL CONDITION
At September 30, 1996 total assets were $2.89 billion, a $472.3 million or
19.5% increase since December 31, 1995. As mentioned earlier, loan growth and
the purchase of securities in connection with the investment leveraging program
accounted for much of the increase. At September 30, 1996, total loans
outstanding were $1.44 billion, an increase of $149.6 million or 11.6% since
the end of 1995. Total securities at September 30, 1996 were $1.17 billion
versus $908.7 million at the end of 1995, an increase of $265.5 million or
29.2%.
The funding for the investment leveraging program caused short-term borrowings
to increase $267.2 million over the previous year-end to total $559.2 million
at September 30, 1996. The increased FHLB borrowings also caused long-term
borrowings to rise $41.0 million since the end of 1995 to $148.8 million at
September 30, 1996. Total deposits at the end of the quarter were $1.94
billion, an increase of $160.3 million or 9.0% since the end of 1995, primarily
certificates of deposit. The Company is also utilizing brokered CD funding to
meet its lending commitments.
CAPITAL
Stockholders' equity declined 1.1% in the first nine months of 1996 to $207.6
million. An increase in market interest rates caused a $14.7 million after-tax
reduction in the fair value of securities available for sale. Without this
reduction in fair value, total stockholders' equity would have increased $12.3
million, or 6.1%. At September 30, 1996, the risk-based capital ratio was
12.94% and the Tier 1 risk-based capital ratio was
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12.05%, both well above the 10.00% and 6.00% minimum required ratios. The
leverage ratio at September 30, 1996 was 7.37% versus 8.05% in 1995, both well
above the minimum required. Dividends per share for the third quarter
increased 6.7% or $.01 to $.16 over the same period in 1995. The book value
per share at September 30, 1996 rose by 3.2% to $14.59 when compared to the
December 31, 1995 book value.
OTHER MATTERS
On September 30, 1996, the Company realigned three financial service
subsidiaries under a non-depository bank charter. The former AMCORE Trust
Company was converted from a state-chartered trust company charter and is now
named AMCORE Investment Group, N.A. (AIG). AMCORE Capital Management, Inc. and
AMCORE Investment Services, Inc. were sold from the lead bank, AMCORE Rockford
and became subsidiaries of AIG on the same date. This merger is intended to
increase operating efficiencies and bring all investment gathering subsidiaries
under one legal entity.
On September 30, 1996, the President signed into law an omnibus appropriations
act that includes, among other things, a section entitled the "Deposit
Insurance Funds Act of 1996". This legislation requires the thrift industry to
recapitalize its insurance fund with a one-time assessment, while it delays a
pro rata sharing of the FICO interest payments for three years. Banks with
deposits insured by the Savings Association Insurance Fund (SAIF), such as the
Company and its subsidiary banks, received a 20 percent discount on the upfront
fee. In accordance with the legislation, the Company took a one-time charge of
$228,000 for a contribution to the Fund. The Company acquired former thrift
deposits when it purchased the Roscoe and South Beloit offices in 1991.
On October 3, 1996, the Company announced the signing of a letter of intent to
acquire Country Bank Shares Corporation (CBSC) based in Mt. Horeb, Wisconsin.
The merger is expected to be accounted for as a pooling of interests, with the
shareholders of CBSC receiving 4.3267 shares of AMCORE common stock in exchange
for their stock. CBSC is a four-bank holding company with one merger now in
progress. The offer to acquire CBSC is contingent upon the completion of their
acquisition of Belleville Bancshares Corporation. CBSC will have nine
locations in south-central Wisconsin, with assets of approximately $285
million. The transaction is subject to normal regulatory approvals and the
approvals of CBSC shareholders and AMCORE's board of directors.
On October 30, 1996, the Company announced the signing of a definitive
agreement to acquire First National Bancorp, Inc. (FNB) based in Monroe,
Wisconsin. The merger is expected to be accounted for as a pooling of
interests, with the shareholders of FNB receiving 7.54 shares of AMCORE common
stock in exchange for their stock. FNB is a one-bank holding company with five
locations in southern Wisconsin. FNB has assets of approximately $214 million.
The transaction is subject to normal regulatory approvals and the approvals of
FNB shareholders and AMCORE's board of directors.
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PART II
ITEM 4. Submission of Matters to a Vote of Security Holders
(a)-(c) Incorporated herein by reference to the Company's Quarterly
Report on Form 10-Q for the quarter ended March 31, 1996 (File No.
0-13393)
ITEM 6. Exhibits and Reports on Form 10-Q Page
(a) 3 Amended and Restated Articles of Incorporation of AMCORE
Financial, Inc. dated May 1, 1990 (Incorporated by reference to
Exhibit 23 of AMCORE's Annual Report on Form 10-K for the year
ended December 31, 1989).
3.1 By-laws of AMCORE Financial, Inc. as amended May 17, 1990
(Incorporated by reference to Exhibit 3.1 of AMCORE's Annual
Report of Form 10-K for the year ended December 31, 1994).
4 Rights Agreement dated February 21, 1996, between AMCORE
Financial, Inc. and Firstar Trust Company (Incorporated by
reference to AMCORE's Form 8-K as filed with the Commission on
February 28, 1996).
10.1* 1995 Stock Incentive Plan (Incorporated by reference to Exhibit
22 of AMCORE's Annual Report on Form 10-K for the year ended
December 31, 1994).
10.2* AMCORE Financial, Inc. 1994 Stock Option Plan for Non-Employee
Directors (Incorporated by reference to Exhibit 23 of AMCORE's
Annual Report on Form 10-K for the year ended December 31,
1993).
10.3A* Amended and Restated Transitional Compensation Agreement dated
June 1, 1996 between AMCORE Financial, Inc. and Robert J.
Meuleman. (Incorporated by reference to Exhibit 10.3A of
AMCORE's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996.)
10.3B* Amended and Restated Transitional Compensation Agreement dated
June 1, 1996 between AMCORE Financial, Inc. and the following
individuals: F. Taylor Carlin, John R. Hecht, and James S.
Waddell. (Incorporated by reference to Exhibit 10.3B of
AMCORE's Quarterly Report on Form 10-Q for the quarter ended
June 30, 1996.)
10.3C* Transitional Compensation Agreement dated June 1, 1996 between
AMCORE Financial, Inc. and the following individuals: Charles
E. Gagnier and Gerald W. Lister. (Incorporated by reference to
Exhibit 10.3C of AMCORE's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1996.)
10.3D* Transitional Compensation Agreement dated June 1, 1996 between
AMCORE Financial, Inc. and the following individuals: Kenneth
E. Edge, William J. Hippensteel, Alan W. Kennebeck and James F.
Warsaw. (Incorporated by reference to Exhibit 10.3D of AMCORE's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1996.)
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Page
10.4 Loan Agreement for $17,000,000 Term Loan and $25,000,000 Line
of Credit Note dated November 10, 1995 with M&I Marshall &
Ilsley Bank (Incorporated by reference to Exhibit 10.5 to
AMCORE's Annual Report on Form 10-K for the year ended December
31, 1995).
10.5 Commercial Paper Placement Agreement dated November 10, 1995
with M&I Marshall and Ilsley Bank (Incorporated by reference to
Exhibit 10.6 to AMCORE's Annual Report on Form 10-K for the
year ended December 31, 1995).
10.6* Executive Insurance Agreement dated March 1, 1996 between AFI
and the following executives: Robert J. Meuleman, F. Taylor
Carlin and James S. Waddell (Incorporated by reference to
Exhibit 10.6 of the Company's Form 10-Q for the quarter ended
March 31, 1996).
11 Statement Re-Computation of Per Share Earnings 18
22 1996 Notice of Annual Meeting of Stockholders and Proxy
Statement (Incorporated by reference to Exhibit 22 of the
Company's Annual Report on Form 10-K for the year ended
December 31, 1995).
27 Financial Data Schedule 19
99 Additional exhibits - Press releases dated October 1, 1996 and 20
October 16, 1996.
(b) One report on Form 8-K was filed with the Commission and dated
October 17, 1996 announcing the signing of a Letter of Intent
for the acquisition of Country Bank Shares Corporation on
October 3, 1996. (Incorporated by reference to AMCORE's Form
8-K as filed with the Commission on October 17, 1996.)
One report on Form 8-K was filed with the Commission and dated
October 30, 1996 announcing the signing of a definitive
agreement for AMCORE to acquire First National Bancorp, Inc. on
October 30, 1996. (Incorporated by reference to AMCORE's Form
8-K as filed with the Commission on November 6, 1996.)
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SIGNATURES
Pursuant to the requirements 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.
AMCORE Financial, Inc.
(Registrant)
Date: November 13, 1996
/s/ John R. Hecht
--------------------------------------------------
John R. Hecht
Senior Vice President and Chief Financial Officer
(Duly authorized officer of the registrant
and principal financial officer)
17