UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
July 27, 2001
Date of Report (Date of earliest event reported)
FIRST BANKS, INC.
(Exact name of registrant as specified in its charter)
MISSOURI 0-20632 43-1175538
(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of incorporation) Identification No.)
135 North Meramec, Clayton, Missouri 63105
(Address of principal executive offices) (Zip code)
(314) 854-4600
(Registrant's telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
FIRST BANKS, INC.
TABLE OF CONTENTS
Page
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ITEM 5. OTHER EVENTS.................................................. 1
SIGNATURES ............................................................ 2
ITEM 5 - OTHER EVENTS
On July 27, 2001, First Banks, Inc. issued a press release announcing
its financial results for the three and six months ended June 30, 2001. A copy
of this press release is attached as Exhibit 99.1.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
FIRST BANKS, INC.
By: /s/ James F. Dierberg
---------------------------------------------
James F. Dierberg
Chairman of the Board of Directors
and Chief Executive Officer
July 27, 2001 (Principal Executive Officer)
By: /s/ Allen H. Blake
---------------------------------------------
Allen H. Blake
President, Chief Operating Officer
and Acting Chief Financial Officer
July 27, 2001 (Principal Financial and
Accounting Officer)
Exhibit 99.1
First Banks, Inc.
St. Louis, Missouri
Contact: Allen H. Blake
President and Chief Operating Officer
First Banks, Inc.
(314) 592-5000
Traded: NASDAQ
Symbol: FBNKO - (First Preferred Capital Trust, a subsidiary of First Banks,
Inc.)
FBNKN - (First Preferred Capital Trust II, a subsidiary of First Banks,
Inc.)
FOR IMMEDIATE RELEASE:
First Banks, Inc. Announces
Second Quarter 2001 Earnings
St. Louis, Missouri, July 27, 2001. First Banks, Inc. ("First Banks" or
"the Company") reported earnings of $7.9 million, or $322.78 per common share on
a diluted basis, for the quarter ended June 30, 2001, compared to $14.7 million,
or $594.12 per common share on a diluted basis, for the comparable period in
2000. Net income for the six months ended June 30, 2001 and 2000, was $20.3
million and $29.3 million, or $824.49 and $1,182.47 per common share on a
diluted basis, respectively. The implementation of Statement of Financial
Accounting Standards No. 133, Accounting for Derivative Instruments and Hedging
Activities, on January 1, 2001, resulted in the recognition of a cumulative
effect of change in accounting principle of $1.4 million, net of tax, which
reduced net income. Excluding this item, net income was $21.6 million, or
$882.65 per common share on a diluted basis, for the six months ended June 30,
2001.
James F. Dierberg, Chairman and Chief Executive Officer of First Banks,
said, "The primary factors that led to the decline in our earnings for the
second quarter were continued reductions in the prime lending rate and higher
operating expenses, including nonrecurring charges associated with the
establishment of a specific reserve relating to a contingent liability and the
settlement of certain litigation. The overall decline in earnings was partially
offset by increased net interest income and noninterest income."
Commenting further, Dierberg added, "Net interest income improved
primarily as a result of increased earning assets generated through internal
loan growth along with our acquisitions of Lippo Bank, First Capital Group,
Inc., Bank of Ventura, Commercial Bank of San Francisco, Millennium Bank and
Bank of San Francisco, completed during 2000. However, the improvement in net
interest income was partially mitigated by continued reductions in the prime
lending rate during the second quarter of 2001."
Noninterest income increased to $19.4 million and $35.9 million for the
three and six months ended June 30, 2001, respectively, from $11.5 million and
$21.0 million for the comparable periods in 2000. The primary components of the
increase for the three months ended June 30, 2001 include: a $5.0 million net
gain on derivative instruments, which includes mark-to-market adjustments under
the new accounting pronouncement, as well as $3.8 million of gains resulting
from the terminations of certain interest rate swap agreements; and increased
gains on mortgage loans sold primarily attributable to an increased volume of
loan originations and refinancings. The increase in noninterest income also
reflects increased service charges on deposit accounts, increased income earned
on bank-owned life insurance and increased income associated with the
institutional money management and the international banking divisions.
Operating expenses increased to $64.4 million and $116.0 million for
the three and six months ended June 30, 2001, respectively, from $41.9 million
and $79.7 million for the comparable periods in 2000. These increases result
primarily from the aforementioned acquisitions completed during 2000; higher
salaries and employee benefit expenses associated with a competitive employment
market; higher data processing fees due to growth and technological advancements
in First Banks' product and service offerings; higher legal, examination and
professional fees primarily associated with ongoing litigation; increased
amortization of intangibles associated with the purchase of the aforementioned
entities; a nonrecurring litigation settlement charge included in other expense;
and a charge to other expense associated with the establishment of a specific
reserve on an unfunded letter of credit. Additionally, guaranteed preferred
debentures expense of $1.5 million on the trust preferred securities issued by
First Preferred Capital Trust II in October 2000 further contributed to the
overall increase in operating expenses. These higher operating expenses,
exclusive of the litigation settlement and the specific reserve on the unfunded
letter of credit, are reflective of significant investments that have been made
in personnel, technology, capital expenditures and new business lines in
conjunction with First Banks' overall strategic growth plan. The payback on
these investments is expected to occur over a longer period of time through
higher and more diversified revenue streams.
As previously announced, First Banks' majority-owned subsidiary, First
Banks America, Inc., signed Definitive Agreements to acquire Charter Pacific
Bank (Charter Pacific), headquartered in Agoura Hills, California, for
approximately $21.4 million and BYL Bancorp (BYL), headquartered in Orange,
California, for approximately $52 million. At June 30, 2001, Charter Pacific and
BYL had total assets of $107.6 million and $278.2 million, respectively. These
transactions, which are subject to regulatory and shareholder approvals, will be
completed in the latter part of 2001.
Additionally, on July 20, 2001, First Banks announced the signing of a
Definitive Agreement to acquire Union Financial Group, Ltd. (UFG), Swansea,
Illinois, for approximately $26.8 million. UFG operates a total of nine banking
offices and had total assets of $361.0 million and deposits of $301.0 million at
June 30, 2001. The transaction, which is subject to regulatory approvals and the
approval of UFG's shareholders, will also be completed in the latter part of
2001.
At June 30, 2001, First Banks had consolidated assets of $5.90 billion
and operated 136 offices in Missouri, Illinois, California, Texas and New
Mexico.
# # #
This release contains forward-looking statements that are subject to risks and
uncertainties arising out of or affecting the Company's business, not all of
which can be predicted or anticipated. These statements are based on information
currently available to First Banks' management, and numerous factors might cause
actual results to differ materially from those contemplated in the
forward-looking statements. For additional information, see the discussions of
forward-looking statements that appear in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" sections of First
Banks' most recent Annual Report on Form 10-K and subsequent Quarterly Reports
on Form 10-Q, as filed with the Securities and Exchange Commission.
FIRST BANKS, INC.
FINANCIAL SUMMARY
(in thousands, except per share data)
(unaudited)
Condensed Consolidated Statement of Income Information
Three months ended Six months ended
June 30, June 30,
---------------------- --------------------
2001 2000 2001 2000
---- ---- ---- ----
Interest income............................................... $ 113,356 104,161 229,393 201,878
Interest expense.............................................. 50,772 45,771 104,912 88,058
Net interest income........................................ 62,584 58,390 124,481 113,820
Provision for loan losses..................................... 3,720 3,620 7,110 7,202
Noninterest income............................................ 19,424 11,471 35,898 21,035
Noninterest expense........................................... 64,398 41,917 116,016 79,710
Income before cumulative effect of change in principle..... 7,899 14,672 21,627 29,259
Cumulative effect of change in accounting principle,
net of tax............................................. -- -- 1,376 --
Net income................................................. 7,899 14,672 20,251 29,259
Basic earnings per common share:
Income before cumulative effect of change in principle..... 328.27 614.51 900.21 1,222.71
Cumulative effect of change in accounting principle,
net of tax............................................. -- -- (58.16) --
--------- --------- -------- ---------
328.27 614.51 842.05 1,222.71
========= ========= ======== =========
Diluted earnings per common share:
Income before cumulative effect of change in principle..... 322.78 594.12 882.65 1,182.47
Cumulative effect of change in accounting principle,
net of tax............................................. -- -- (58.16) --
--------- --------- -------- ---------
322.78 594.12 824.49 1,182.47
========= ========= ======== =========
Condensed Consolidated Balance Sheet Information
June 30, December 31,
2001 2000
--------------- -------------
Total assets......................................................... $5,904,203 5,876,691
Loans, net of unearned discount...................................... 4,861,943 4,752,265
Allowance for loan losses............................................ 77,141 81,592
Deposits............................................................. 4,994,119 5,012,415
Note payable......................................................... 34,500 83,000
Stockholders' equity................................................. 396,404 352,846
Nonperforming assets................................................. 64,708 55,653