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Part I - Financial Information
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Item 1 - Financial Statements
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FIRST FIDELITY BANCORPORATION (AND SUBSIDIARIES)
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(thousands, except per share amounts) Three Months Ended
June 30
--------------------
1995 1994
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INTEREST INCOME
Interest and fees on loans......................... $474,282 $403,509
Interest on federal funds sold and securities
purchased under agreements to resell............. 711 372
Interest and dividends on securities:
Taxable interest income.......................... 93,629 97,481
Tax-exempt interest income....................... 8,483 9,898
Dividends........................................ 985 1,422
Interest on bank deposits.......................... 565 7,322
Interest on trading account securities............. 1,350 1,846
-------- --------
Total Interest Income.......................... 580,005 521,850
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INTEREST EXPENSE
Interest on:
Deposits......................................... 195,630 144,154
Short-term borrowings............................ 28,249 13,577
Long-term debt................................... 14,111 12,682
-------- --------
Total Interest Expense......................... 237,990 170,413
-------- --------
Net Interest Income.......................... 342,015 351,437
Provision for possible credit losses................. 10,000 20,000
-------- --------
Net Interest Income after Provision
for Possible Credit Losses....................... 332,015 331,437
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NON-INTEREST INCOME
Trust income....................................... 27,513 27,628
Service charges on deposit accounts................ 36,503 36,621
Other service charges, commissions and fees........ 26,821 20,816
Trading revenue.................................... 2,158 984
Net securities transactions........................ 6,970 4,726
Other income....................................... 11,944 5,806
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Total Non-Interest Income........................ 111,909 96,581
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NON-INTEREST EXPENSE
Salaries and benefits expense...................... 123,664 118,883
Occupancy expense.................................. 28,891 28,443
Equipment expense.................................. 11,268 10,295
Other expenses..................................... 101,430 103,841
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Total Non-Interest Expense....................... 265,253 261,462
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Income before income taxes........................... 178,671 166,556
Income taxes......................................... 63,413 54,963
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Net Income........................................... 115,258 111,593
Dividends on Preferred Stock......................... 5,113 5,146
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Net Income Applicable to Common Stock................ $110,145 $106,447
======== ========
Per common share:
Net income:
Primary.......................................... $1.37 $1.29
Fully diluted.................................... 1.34 1.27
See accompanying notes to consolidated financial statements.
FIRST FIDELITY BANCORPORATION (AND SUBSIDIARIES) 4 of 36
CONSOLIDATED STATEMENTS OF INCOME (unaudited)
(thousands, except per share amounts) Six Months Ended
June 30
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1995 1994
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INTEREST INCOME
Interest and fees on loans........................ $932,314 $797,655
Interest on federal funds sold and securities
purchased under agreements to resell............ 1,062 490
Interest and dividends on securities:
Taxable interest income......................... 198,634 194,196
Tax-exempt interest income...................... 17,261 20,407
Dividends....................................... 2,171 2,617
Interest on bank deposits......................... 1,095 17,681
Interest on trading account securities............ 2,574 3,421
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Total Interest Income......................... 1,155,111 1,036,467
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INTEREST EXPENSE
Interest on:
Deposits........................................ 379,910 287,261
Short-term borrowings........................... 55,840 24,057
Long-term debt.................................. 29,580 23,515
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Total Interest Expense........................ 465,330 334,833
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Net Interest Income......................... 689,781 701,634
Provision for possible credit losses................ 20,000 44,000
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Net Interest Income after Provision
for Possible Credit Losses...................... 669,781 657,634
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NON-INTEREST INCOME
Trust income...................................... 53,882 54,891
Service charges on deposit accounts............... 72,222 73,905
Other service charges, commissions and fees....... 52,141 40,686
Trading revenue................................... 5,065 4,635
Net securities transactions....................... 14,043 8,808
Other income...................................... 23,901 13,040
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Total Non-Interest Income....................... 221,254 195,965
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NON-INTEREST EXPENSE
Salaries and benefits expense..................... 249,880 241,022
Occupancy expense................................. 58,636 60,377
Equipment expense................................. 22,469 21,223
Other expenses.................................... 206,108 202,419
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Total Non-Interest Expense...................... 537,093 525,041
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Income before income taxes.......................... 353,942 328,558
Income taxes........................................ 125,749 108,099
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Net Income.......................................... 228,193 220,459
Dividends on Preferred Stock........................ 10,321 10,277
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Net Income Applicable to Common Stock............... $217,872 $210,182
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Per common share:
Net income:
Primary......................................... $2.69 $2.54
Fully diluted................................... 2.62 2.49
See accompanying notes to consolidated financial statements.
FIRST FIDELITY BANCORPORATION (AND SUBSIDIARIES) 6 of 36
CONSOLIDATED STATEMENTS OF CONDITION
June 30 December 31
1995 1994
(thousands) (unaudited)
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[S] [C] [C]
ASSETS
Cash and due from banks............................ $1,750,833 $2,082,002
Interest-bearing time deposits..................... 455,033 35,567
Securities held to maturity........................ 3,877,896 4,186,860
(market value of $3,879,660 at June 30, 1995
and $4,049,457 at December 31, 1994)
Securities available for sale, at market value..... 2,409,976 3,781,163
Trading account securities, at market value........ 100,529 110,494
Federal funds sold and securities purchased under
agreements to resell............................. 703,375 50,675
Loans, net of unearned income...................... 23,999,147 23,801,241
Less: Reserve for possible credit losses......... (565,450) (599,333)
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Net loans...................................... 23,433,697 23,201,908
Premises and equipment............................. 428,328 437,677
Customers' acceptance liability.................... 160,374 215,556
Other assets....................................... 2,041,740 2,113,794
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Total Assets................................. $35,361,781 $36,215,696
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LIABILITIES
Deposits in domestic offices:
Demand deposits.................................. $5,195,045 $5,393,749
Savings/NOW deposits............................. 8,831,105 9,271,335
Money market deposit accounts.................... 3,919,395 4,257,135
Other consumer time deposits..................... 9,467,150 8,858,443
Corporate certificates of deposit................ 381,616 393,058
Deposits in overseas offices....................... 1,024,612 733,132
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Total Deposits................................. 28,818,923 28,906,852
Short-term borrowings.............................. 2,020,966 2,716,922
Acceptances outstanding............................ 161,355 218,625
Other liabilities.................................. 744,470 682,699
Long-term debt..................................... 676,750 813,623
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Total Liabilities............................ 32,422,464 33,338,721
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STOCKHOLDERS' EQUITY
Preferred stock.................................... 219,219 229,707
Common stock ($1.00 par)
Authorized: 150,000,000 shares
Issued: 81,998,930 shares at June 30, 1995 and
82,003,121 shares at December 31, 1994......... 81,999 82,003
Surplus............................................ 1,255,143 1,256,020
Retained earnings.................................. 1,556,804 1,430,149
Net unrealized losses--securities
available for sale............................... (8,494) (75,232)
Less treasury stock, at cost: 3,345,884 shares at
June 30, 1995 and 1,020,282 shares
at December 31, 1994........................... (165,354) (45,672)
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Total Common Stockholders' Equity............ 2,720,098 2,647,268
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Total Stockholders' Equity................... 2,939,317 2,876,975
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Total Liabilities and Stockholders' Equity... $35,361,781 $36,215,696
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See accompanying notes to consolidated financial statements.
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FIRST FIDELITY BANCORPORATION (AND SUBSIDIARIES)
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited)
(thousands)
Six Months Ended
June 30
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1995 1994
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Balance, January 1.................................. $2,876,975 $2,738,428
Net income........................................ 228,193 220,459
Common Stock issued:
Private placement--Santander exercise
of warrants................................... - 121,189
Stock options and dividend reinvestment plan.... 13,744 13,114
Other........................................... - 1,567
Purchases of treasury stock....................... (155,699) (144,634)
Dividends on Common Stock......................... (80,313) (67,118)
Dividends on Preferred Stock...................... (10,321) (10,277)
Net unrealized gains (losses)-- securities
available for sale.............................. 66,738 (55,624)
Other............................................. - 3,200
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Balance, June 30.................................... $2,939,317 $2,820,304
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FIRST FIDELITY BANCORPORATION (AND SUBSIDIARIES)
CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)
Six Months Ended
June 30
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(thousands) 1995 1994
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Cash flows from operating activities:
Net income......................................... $228,193 $220,459
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for possible credit losses............... 20,000 44,000
Depreciation, amortization and accretion........... 39,837 36,363
Deferred income tax provision...................... 26,858 27,524
Gain on sale of assets............................. (16,950) (6,828)
Net securities transactions (gains)................ (14,043) (8,808)
Proceeds from sales of trading account
securities....................................... 5,081,262 5,084,239
Purchases of trading account securities............ (5,066,232) (5,092,353)
Decrease (increase) in accrued interest receivable. 3,925 (3,081)
Increase in accrued interest payable............... 40,645 42,066
Change in current taxes payable.................... 13,965 35,621
Other, net......................................... 98,209 127,329
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Net cash provided by operating activities...... 455,669 506,531
Cash flows from investing activities:
Proceeds from maturities of securities
held to maturity................................. 736,264 1,439,318
Purchases of securities held to maturity........... (501,122) (936,070)
Proceeds from sales of securities available
for sale......................................... 1,621,565 497,067
Proceeds from maturities of securities
available for sale............................... 197,910 408,296
Purchases of securities available for sale......... (247,134) (1,396,346)
Net (disbursements) from lending activities........ (217,335) (129,033)
Purchases of premises and equipment................ (26,952) (31,043)
Proceeds from sales of premises and equipment...... 1,621 6,378
Net change in acceptances.......................... (2,088) (5,600)
Net cash on acquisitions........................... 943,182 49,454
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Net cash provided by/(used in)
investing activities......................... 2,505,911 (97,579)
Cash flows from financing activities:
Change in demand, savings/NOW, and money market
deposits......................................... (1,432,538) (546,401)
Change in corporate certificates of deposit and
deposits in overseas offices..................... 280,038 (6,880)
Change in other consumer time deposits............. 2,543 (469,920)
Change in short-term borrowings.................... (695,956) 442,503
Issuance of long-term debt......................... - 200,000
Payments on long-term debt......................... (136,873) (181)
Purchases of treasury stock........................ (155,699) (144,634)
Issuance of common stock........................... 13,744 134,303
Dividends paid..................................... (95,842) (77,380)
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Net cash (used in) financing activities........ (2,220,583) (468,590)
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Net change in cash and cash equivalents........ 740,997 (59,638)
Cash and cash equivalents at beginning
of period (A)................................ 2,168,244 2,826,039
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Cash and cash equivalents at end
of period (A)................................ $2,909,241 $2,766,401
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Supplemental disclosures:
Total amount of interest paid for the period....... $424,685 $292,767
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Total amount of income taxes paid for
the period....................................... $81,535 $99,196
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Total amount of loans transferred to OREO.......... $17,668 $23,194
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(A) Reconciliation: June 30 December 31
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1995 1994 1994 1993
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Cash and due from banks......... $1,750,833 $1,765,962 $2,082,002 $1,831,270
Interest-bearing time deposits.. 455,033 441,899 35,567 979,769
Federal funds sold and
securities purchased under
agreements to resell.......... 703,375 558,540 50,675 15,000
---------- ---------- ---------- ----------
Total cash and cash
equivalents................... $2,909,241 $2,766,401 $2,168,244 $2,826,039
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See accompanying notes to consolidated financial statements.
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SUMMARIZED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) In Management's opinion, the financial information, which
is unaudited, reflects all adjustments (consisting solely
of normal recurring adjustments) necessary for a fair
presentation of the financial information as of and for
the three and six month periods ended June 30, 1995 and
June 30, 1994 in conformity with generally accepted
accounting principles. These financial statements should
be read in conjunction with First Fidelity
Bancorporation's ("First Fidelity" or "the Company"
herein) 1994 Annual Report on Form 10-K.
(2) Primary earnings per share is based on the weighted
average number of common shares outstanding during each
period, including the assumed exercise of dilutive stock
options and warrants, using the treasury stock method.
Primary earnings per share also reflects provisions for
dividend requirements on all outstanding shares of the
Company's preferred stock.
Fully diluted earnings per share is based on the weighted
average number of common shares outstanding during each
period, including the assumed conversion of convertible
preferred stock into common stock and the assumed
exercise of dilutive stock options and warrants using the
treasury stock method. Fully diluted earnings per share
also reflects provisions for dividend requirements on
non-convertible preferred stock.
(3) As previously reported, effective January 1, 1995, the
Company adopted Statement of Financial Accounting
Standards ("SFAS") 114, "Accounting by Creditors for
Impairment of a Loan" and SFAS 118, "Accounting by
Creditors for Impairment of a Loan--Income Recognition
and Disclosures". Under SFAS 114 and SFAS 118, impaired
loans must be measured based on the present value of
expected future cash flows, discounted at the loan's
effective interest rate, or as a practical expedient, at
the loan's observable market price, or the fair value of
the collateral if the loan is collateral-dependent.