1
NEWS RELEASE
Date:
Oct. 1, 1996
Contact:
Ben Rubendall
815-961-7164
[AMCORE LETTERHEAD]
AMCORE FINANCIAL, INC. ANNOUNCES FORMATION OF
NATIONALLY CHARTERED INVESTMENT SUBSIDIARY
ROCKFORD - The formation of AMCORE Investment Group N.A. was announced
today by Alan Kennebeck, president and chief executive officer of the new
subsidiary. The new company combines the functions AMCORE Trust Co., AMCORE
Capital Management, Inc., and AMCORE Investment Services, Inc. into one
organization.
"We will still have the same people and the same commitment to providing
quality customer services," said Kennebeck. "The most significant change is
that we now have more flexibility in putting together the exact package of
services each of our customers needs, whether it be brokerage, investment
advice, estate planning or management of employee retirement plans."
"In today's rapidly evolving financial services marketplace, the
distinction between many types of investments is blurring, and customers often
need a combination of services, ranging from a trust or personal portfolio with
specific investment management objectives to an employee benefit plan with an
array of mutual fund products.
"Now we are able to offer one-stop shopping without having to refer our
customers to a variety of different AMCORE subsidiaries in order to meet all of
their needs. Our functional organization and legal restructuring supports this
seamless delivery strategy.
"That is why we have adopted the mission statement 'One company, one
culture. Serving the financial needs of customers better than anyone else,'"
Kennebeck said.
The trust portion of the new company includes both personal and employee
benefits accounts with more than $2.4 billion in assets under administration.
The company also manages investments in the AMCORE Vintage mutual fund
family, which includes equity funds that Nelson's Directory of Investment Fund
Mangers has consistently ranked among the top 25 in the world for long-term
return on its investments. It also provides a full-service stock brokerage with
access to the national stock markets as well as a wide range of annuities and
mutual funds.
2
AMCORE Announces New Subsidiary
Page 2
AMCORE Financial, Inc. is a northern Illinois-based bank holding company
with assets of approximately $2.7 billion. Its holdings include 38 banking
locations.
The company also has five primary financial service subsidiaries: an
investment services company, which administers the AMCORE Vintage family of
mutual funds, provides trust and brokerage services; a mortgage company; a
collection agency; a consumer finance company; and an insurance company. AMCORE
common stock is listed on NASDAQ under the symbol "AMFI".
###
3
NEWS RELEASE
Date: Oct. 16, 1996
Contact: Ben Rubendall
815-961-7164 [AMCORE LETTERHEAD]
AMCORE REPORTS ALL-TIME RECORD $6.9 MILLION EARNINGS,
UP 11.4 PERCENT TO 49 CENTS PER SHARE IN THIRD QUARTER
ROCKFORD, IL - AMCORE Financial, Inc. posted record earnings of $6.9
million, or 49 cents per share for the quarter ended September 30, 1996, up
11.4 percent from the 1995 quarter.
Return on equity was 13.6 percent, up from 12.6 percent, while return on
assets, reflecting the impact of leveraged investment transactions, was 1.0
percent, down from 1.08 percent in the third quarter of 1995.
"We are making rapid progress toward our intermediate goal of a 15 percent
return on equity," said Robert J. Meuleman, president and chief executive
officer of AMCORE Financial, Inc.
"Key factors in our record-setting performance were a $152 million, or
12.2 percent, increase in average loans, which resulted in a $2.1 million, or
10.4 percent, rise in net interest income, and additional earnings from our
more aggressive investment leveraging strategy," Meuleman said.
"Our earnings also reflect a $2.7 million increase in non-interest income,
nearly half of which relates to the sale of our merchant processing business.
The net impact of the higher non-interest income was diminished by a $1.9
million rise in the provision for loan losses to keep pace with our strong loan
growth and further strengthen the reserve for loan losses," Meuleman said.
Total non-performing assets decreased $1.0 million, or 7.1 percent, from
the 1995 quarter while other real estate owned declined by $2.0 million. The
allowance for loan losses to ending loans was 1.05 percent, up from 1.04
percent a year ago. The loan loss reserve is now 114 percent of non-performing
loans, up from 108 percent a year ago.
Fee-based income for the quarter was $10.8 million, up 34.0 percent,
excluding security gains. Trust and asset management income rose $800,000, or
30.5 percent, due primarily to strong investment performance.
Insurance revenues nearly tripled to almost $900,000, up $560,000 over the
1995 quarter. 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.
4
AMCORE Financial, Inc.
Third Quarter Earnings 1996
Page 2
Total operating expenses rose $1.6 million, or 8.1 percent as a result of
several factors including the change in insurance accounting, costs associated
with increased loan growth, a one-time assessment for the SAIF insurance fund,
and a loss on the sale of a bank property.
While net interest income was up, the net interest margin fell 2 basis
points to 3.68 percent from 3.70 percent in the second quarter of 1996 and was
down 36 basis points from 4.04 percent in the third quarter of 1995. "The
decline in the margin from year to year was due to an increase in leveraging
begun in mid-1995 to make better use of capital and to improve return on
equity," Meuleman said.
The efficiency ratio, which measures operating expenses as a percentage of
total revenues, fell to a record 61.0 percent, down from 66.0 percent in the
third quarter of 1995 due to the strong revenue growth.
AMCORE Financial, Inc. is a northern Illinois-based bank holding company
with assets of approximately $2.9 billion. Its holdings include 38 banking
locations.
The company also has five primary financial service subsidiaries: AMCORE
Investment Group N.A., which includes trust services, and coordinates a capital
management company, a brokerage company and the AMCORE Vintage family of mutual
funds; AMCORE Mortgage, Inc.; AMCORE Consumer Finance Co.; AMCORE Insurance
Group, Inc., and Rockford Mercantile Agency, Inc., a bill collection agency.
AMCORE common stock is listed on NASDAQ under the symbol "AMFI."
AMCORE Financial, Inc. may be reached at: http://www.amcore.com on the
Internet.
###
5
AMCORE FINANCIAL, INC.
CONSOLIDATED KEY FINANCIAL DATA SUMMARY
(in thousands, except share data) Quarter Ended Sept. 30, Nine Months Ended Sept. 30,
----------------------------------- ------------------------------
Percent Percent
Financial Highlights 1996 1995 Change 1996 1995 Change
----- ---- --------- ---- ---- -------
Net revenues, including security gains............ $33,306 $28,534 16.7% $93,388 $83,743 11.5%
Operating expenses................................ 21,569 19,950 8.1% 63,230 67,260 -6.0%
Net income........................................ 6,906 6,240 10.7% 18,993 11,997 58.3%
Net income per share.............................. 0.49 0.44 11.4% 1.34 0.85 57.6%
Cash dividends per share.......................... 0.16 0.15 6.7% 0.48 0.43 11.6%
Book value per share.............................. 14.59 14.14 3.2%
Trailing Twelve Months
(in thousands, except share data) Ended Sept. 30,
---------------------------------------
Percent
Financial Highlights 1996 1995 Change
---- ---- --------
Net revenues, including security gains............ $123,064 $111,552 10.3%
Operating expenses................................ 83,410 87,516 -4.7%
Net income........................................ 25,267 17,476 44.6%
Net income per share.............................. 1.78 1.24 43.5%
Cash dividends per share.......................... 0.63 0.58 8.6%
Book value per share..............................
Quarter Ended Sept. 30,
-----------------------------------
Percent
Key Financial Ratios (A) 1996 1995 Change
---- ---- -------
Return on average assets..................................... 1.00% 1.08% -7.3%
Return on average equity..................................... 13.60% 12.61% 7.8%
Net interest margin (FTE).................................... 3.68% 4.04% -8.9%
Average total equity to average assets....................... 7.33% 8.53% -14.0%
Other income/net revenues (1)................................ 32.7% 28.6% 14.4%
Efficiency Ratio (FTE)....................................... 61.0% 66.0% -7.6%
Nine Months Ended Sept. 30,
----------------------------------------
Percent
Key Financial Ratios (A) 1996 1995 Change
---- ---- -------
Return on average assets..................................... 0.96% 0.94% 2.8%
Return on average equity..................................... 12.35% 10.85% 13.8%
Net interest margin (FTE).................................... 3.73% 4.16% -10.3%
Average total equity to average assets....................... 7.79% 8.62% -9.7%
Other income/net revenues (1)................................ 30.1% 28.4% 6.0%
Efficiency Ratio (FTE)....................................... 63.9% 69.5% -8.1%
(A) All 1995 ratios have been adjusted to exclude special charges recorded in
the second quarter.
Income Statement
Income Statement
Interest income................................................. $50,507 $42,432 19.0%
Interest expense................................................ 28,345 22,351 26.8%
------- ------- ------
Net interest income.......................................... 22,162 20,081 10.4%
Provision for loan losses....................................... 2,234 320 598.1%
Other Income:
Trust and asset management income............................ 3,430 2,628 30.5%
Service charges on deposits.................................. 1,644 1,879 -12.5%
Mortgage revenues............................................ 940 1,069 -12.1%
Insurance revenues........................................... 894 335 166.9%
Collection fee income........................................ 501 464 8.0%
Other........................................................ 3,383 1,678 101.6%
------- ------- ------
Total other income........................................ 10,792 8,053 34.0%
Net security gains.............................................. 352 400 -12.0%
Operating expenses:
Personnel costs.............................................. 11,383 11,727 -2.9%
Net occupancy expense........................................ 1,309 1,372 -4.6%
Equipment expense............................................ 2,001 1,756 14.0%
Professional fees............................................ 555 587 -5.5%
Amortization of intangible assets............................ 500 516 -3.1%
Insurance expense............................................ 445 90 394.4%
Other........................................................ 5,376 3,902 37.8%
------- ------- ------
Total operating expenses.................................. 21,569 19,950 8.1%
------- ------- ------
Income before income taxes...................................... 9,503 8,264 15.0%
Income taxes.................................................... 2,597 2,024 28.3%
------- ------- ------
Net income...................................................... $ 6,906 $ 6,240 10.7%
======= ======= ======
Average shares outstanding (000)................................ 14,217 14,089 0.9%
Ending shares outstanding (000)................................. 14,225 14,094 0.9%
Income Statement
Income Statement
Interest income................................................. $143,649 $121,063 18.7%
Interest expense................................................ 79,365 62,176 27.6%
-------- -------- -----
Net interest income.......................................... 64,284 58,887 9.2%
Provision for loan losses....................................... 4,090 1,920 113.0%
Other Income:
Trust and asset management income............................ 10,211 8,455 20.8%
Service charges on deposits.................................. 5,044 5,306 -4.9%
Mortgage revenues............................................ 2,641 2,632 0.3%
Insurance revenues........................................... 1,519 667 127.7%
Collection fee income........................................ 1,647 1,386 18.8%
Other........................................................ 6,671 4,964 34.4%
-------- -------- -----
Total other income........................................ 27,733 23,410 18.5%
Net security gains.............................................. 1,371 1,446 -5.2%
Operating expenses:
Personnel costs.............................................. 35,108 35,192 -0.2%
Net occupancy expense........................................ 3,965 5,472 -27.5%
Equipment expense............................................ 5,732 6,196 -7.5%
Professional fees............................................ 1,758 2,174 -19.1%
Amortization of intangible assets............................ 1,523 3,478 -56.2%
Insurance expense............................................ 846 2,387 -64.6%
Other........................................................ 14,298 12,361 15.7%
-------- -------- -----
Total operating expenses.................................. 63,230 67,260 -6.0%
-------- -------- -----
Income before income taxes...................................... 26,068 14,563 79.0%
Income taxes.................................................... 7,075 2,566 175.7%
-------- -------- ------
Net income...................................................... $ 18,993 $ 11,997 58.3%
======== ======== ======
Average shares outstanding (000)................................ 14,205 14,069 1.0%
Ending shares outstanding (000)................................. 14,225 14,094 0.9%
6
AMCORE Financial, Inc.
Quarter Ended Sept. 30,
(in thousands) 1996 1995
- -------------------------------------------------------------------------------- --------------------------------------------
Ending Average Yield/ Average Yield/
Balance Balance Rate Balance Rate
- -------------------------------------------------------------------------------- --------------------------------------------
Assets:
Taxable securities........................................... $ 902,269 $ 882,233 6.74% $ 585,307 6.84%
Tax-exempt securities (FTE).................................. 271,853 267,082 8.23% 253,627 7.13%
Other earning assets......................................... 60,701 10,244 5.31% 3,169 5.31%
Mortgage loans held for sale................................. 9,378 8,411 7.72% 15,214 8.18%
Loans, net of unearned income (FTE).......................... 1,435,562 1,402,874 8.65% 1,250,852 8.83%
---------- ---------------------------------------------
Total Earning Assets...................................... $2,679,763 $2,570,844 8.00% $ 2,108,169 8.19%
Intangible assets......................................... 12,766 12,981 15,135
Other non-earning assets.................................. 198,253 171,655 178,150
---------- ---------------------------------------------
Total Assets.............................................. $2,890,782 $2,755,480 $ 2,301,454
---------- ---------------------------------------------
Liabilities and Stockholders' Equity:
Interest bearing deposits.................................... $1,677,181 $1,609,397 4.61% $ 1,574,302 4.53%
Non-interest bearing deposits................................ 260,808 237,357 248,884
---------- ---------------------------------------------
Total Deposits............................................ $1,937,989 $1,846,754 $ 1,823,186
---------- ---------------------------------------------
Short-term borrowings........................................ 559,246 519,658 5.65% 236,580 6.48%
Long-term borrowings......................................... 148,761 156,780 5.56% 21,994 7.27%
Other........................................................ 6,218 6,117 8.13% 4,795 7.53%
---------- ---------------------------------------------
Total Interest Bearing Liabilities........................ 2,391,406 2,291,952 4.92% 1,837,671 4.83%
Other liabilities......................................... 30,980 24,183 18,633
---------- ---------------------------------------------
Total Liabilities......................................... $2,683,194 $2,553,492 $ 2,105,188
Stockholders' Equity...................................... 207,588 201,988 196,266
---------- ---------------------------------------------
Total Liabilities and
Stockholders' Equity...................................... $2,890,782 $2,755,480 $ 2,301,454
----------- ---------------------------------------------
Nine Months Ended Sept. 30,
(in thousands 1996 1995
- ------------------------------------------------------------------ -------------------------------------------------
Average Yield/ Average Yield/
Balance Rate Balance Rate
- ------------------------------------------------------------------ -------------------------------------------------
Assets:
Taxable securities........................................... $ 836,964 6.61% $ 545,792 7.03%
Tax-exempt securities (FTE).................................. 256,067 8.04% 252,645 7.23%
Other earning assets......................................... 13,935 5.25% 6,330 5.79%
Mortgage loans held for sale................................. 9,731 7.60% 10,908 8.12%
Loans, net of unearned income (FTE).......................... 1,342,725 8.70% 1,212,098 8.78%
-------------------------------------------------
Total Earning Assets...................................... $ 2,459,422 7.97% $ 2,027,773 8.20%
Intangible assets......................................... 13,340 16,849
Other non-earning assets.................................. 166,406 165,980
-------------------------------------------------
Total Assets.............................................. $ 2,639,168 $ 2,210,602
-------------------------------------------------
Liabilities and Stockholders' Equity:
Interest bearing deposits.................................... $ 1,572,457 4.58% $ 1,520,480 4.43%
Non-interest bearing deposits................................ 236,683 238,548
-------------------------------------------------
Total Deposits............................................ $ 1,809,140 $ 1,759,028
-------------------------------------------------
Short-term borrowings........................................ 442,324 5.47% 216,917 6.32%
Long-term borrowings......................................... 152,693 6.13% 23,071 7.41%
Other........................................................ 5,946 8.27% 4,556 8.66%
-------------------------------------------------
Total Interest Bearing Liabilities........................ 2,173,420 4.88% 1,765,024 4.71%
Other liabilities......................................... 23,578 16,456
-------------------------------------------------
Total Liabilities......................................... $ 2,433,681 $ 2,020,028
Stockholders' Equity...................................... 205,487 190,574
-------------------------------------------------
Total Liabilities and
Stockholders' Equity...................................... $ 2,639,168 $ 2,210,602
-------------------------------------------------
------------------------------------
Quarter Ended Sept. 30,
------------------------------------
Percent
Asset Quality (in thousands) 1996 1995 Change
- ----------------------------------------------------------------------------------------------------------
Ending allowance for loan losses................................ $15,078 $13,190 14.3%
Net charge-offs................................................. 958 770 24.4%
Net charge-offs to average loans (2)............................ 0.27% 0.25% 8.0%
Non-performing assets:
Nonaccrual................................................... $12,804 $9,674 32.4%
Restructured................................................. 379 2,597 -85.4%
-----------------------------------
Non-performing loans...................................... 13,183 12,271 7.4%
Other real estate owned (OREO)............................... 540 2,502 -78.4%
-----------------------------------
Total non-performing assets............................... $13,723 $14,773 -7.1%
===================================
Key Asset Quality Ratios
Allowance to ending loans.................................... 1.05% 1.04% 1.0%
Allowance to non-performing loans............................ 114.4% 107.5% 6.4%
Non-performing loans to loans................................ 0.92% 0.96% -4.3%
Non-performing assets to loans & OREO........................ 0.96% 1.16% -17.6%
Capital Adequacy
Total risk-based capital..................................... 12.94% 12.97% -0.2%
Tier 1 risk-based capital.................................... 12.05% 12.11% -0.5%
Leverage ratio............................................... 7.37% 8.05% -8.4%
------------------------------
Nine Months Ended Sept. 30,
------------------------------
Percent
1996 1995 Change
------------------------------
Ending allowance for loan losses................................
Net charge-offs................................................. $2,073 $2,028 2.2%
Net charge-offs to average loans (2)............................ 0.21% 0.22% -4.5%
Footnotes
(1) Excluding net security gains.
(2) On an annualized basis.