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
January 29, 2002
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 AND REGULATION FD DISCLOSURE..................... 1
SIGNATURES............................................................... 2
ITEM 5 - OTHER EVENTS AND REGULATION FD DISCLOSURE
On January 29, 2002, First Banks, Inc. issued a press release announcing
its financial results for the three months and year ended December 31, 2001. A
copy of this press release is attached as Exhibit 99.2.
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
January 29, 2002 (Principal Executive Officer)
By: /s/ Allen H. Blake
-----------------------------------------
Allen H. Blake
President, Chief Operating Officer
and Acting Chief Financial Officer
January 29, 2002 (Principal Financial and Accounting
Officer)
Exhibit 99.2
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.)
FBNKM - (First Preferred Capital Trust III, a subsidiary of First
Banks, Inc.)
FOR IMMEDIATE RELEASE:
First Banks, Inc. Announces
Fourth Quarter and Year End 2001 Earnings
St. Louis, Missouri, January 29, 2002. First Banks, Inc. ("First Banks" or
"the Company") reported earnings of $29.9 million, or $1,225.79 per common share
on a diluted basis, for the quarter ended December 31, 2001, compared to $12.8
million, or $519.78 per common share on a diluted basis, for the comparable
period in 2000. Net income for the years ended December 31, 2001 and 2000 was
$64.5 million and $56.1 million, or $2,626.77 and $2,267.41 per common share on
a diluted basis, respectively.
The Company recorded a provision for income taxes included in earnings of
$5.9 million for the three months ended December 31, 2001. The provision
includes the effect of an $8.1 million reduction in the deferred tax asset
valuation allowance of First Banks' majority-owned subsidiary, First Banks
America, Inc. ("FBA"). The Company determined the deferred tax asset valuation
allowance was no longer necessary as overall net deferred tax assets are
expected to be recoverable through future earnings.
In addition, the implementation of Statement of Financial Accounting
Standards No. 133, Accounting for Derivative Instruments and Hedging Activities
("SFAS 133"), 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 $65.9 million, or
$2,684.93 per common share on a diluted basis, for the year ended December 31,
2001.
James F. Dierberg, Chairman and Chief Executive Officer of First Banks,
said, "Earnings before income taxes, minority interest in income of subsidiary
and the cumulative effect of change in accounting principle have increased
74.15% and 6.40% for the three months and year ended December 31, 2001,
respectively, over the comparable periods in 2000. The improved earnings
primarily result from increased net interest income and noninterest income,
including a gain on the exchange of an equity investment in an unaffiliated
financial institution. These increases were partially offset by increased
provisions for loan losses and higher operating expenses, including nonrecurring
charges associated with the establishment of a specific reserve related to a
contingent liability and the settlement of certain litigation."
Commenting further, Dierberg added, "Net interest income increased
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, and Charter Pacific Bank and BYL
Bancorp, completed in 2001. However, the improvement in net interest income was
partially mitigated by continued reductions in prevailing interest rates
throughout 2001."
The Company recorded a provision for loan losses of $9.6 million and $23.5
million for the three months and year ended December 31, 2001, respectively,
compared to $3.1 million and $14.1 million for the comparable periods in 2000.
The significant increase in the provision for loan losses reflects increases in
total loans outstanding, net loan charge-offs, past due loans and nonperforming
assets, as well as the recessionary economic conditions prevalent within the
Company's markets.
Noninterest income increased to $40.9 million and $98.6 million for the
three months and year ended December 31, 2001, respectively, from $11.0 million
and $42.8 million for the comparable periods in 2000. The increase is primarily
due to a $19.1 million pre-tax gain recorded in the fourth quarter of 2001 in
conjunction with the exchange of an equity investment relating to the common
stock in an unaffiliated publicly traded financial institution for $10.0 million
in cash and a $14.4 million equity investment in the acquiring unaffiliated
financial institution. The increase also reflects net gains on derivative
instruments of $4.2 million and $18.6 million for the three months and year
ended December 31, 2001, respectively, which includes mark-to-market adjustments
under SFAS 133, as well as $279,000 and $4.0 million of net gains recorded for
the three months and year ended December 31, 2001, respectively, resulting from
the terminations of certain interest rate swap and floor agreements. In
addition, the overall increase in noninterest income reflects increased gains on
mortgage loans sold resulting from increased volumes of loan originations and
refinancings, increased service charges on deposit accounts, a $1.9 million
pre-tax gain on the sale of the credit card loan portfolio, increased brokerage
revenue, increased income on bank-owned life insurance and increased income
associated with the Institutional Money Management and the International Banking
Divisions.
Operating expenses increased to $59.4 million and $230.3 million for the
three months and year ended December 31, 2001, respectively, from $48.7 million
and $171.2 million for the comparable periods in 2000. The increased operating
expenses result primarily from: acquisitions completed during 2000 and 2001;
higher salaries and employee benefit expenses associated with a competitive
employment market; higher information technology fees due to growth and
technological advancements in product and service offerings; higher legal,
examination and professional fees associated with certain litigation and the
continued expansion of overall corporate activities; increased amortization of
intangibles associated with the aforementioned acquisitions completed during
2000; a nonrecurring litigation settlement charge included in other expense; and
a $1.8 million charge to other expense associated with the establishment of a
specific reserve for an unfunded letter of credit. For the year ended December
31, 2001, guaranteed preferred debentures expense of $6.0 million and $634,000
on the trust preferred securities issued by First Preferred Capital Trust II in
October 2000 and First Preferred Capital Trust III in November 2001,
respectively, also contributed to the overall increase in operating expenses.
These higher operating expenses, exclusive of the litigation settlement and the
specific reserve for the unfunded letter of credit, are reflective of
significant investments that have been made in personnel, technology, equipment,
facilities and new product and business lines which are part of First Banks'
overall strategic growth plan. The payback on these investments is expected to
occur over time through higher and more diversified revenue streams.
As previously announced, FBA completed its acquisitions of Charter Pacific
Bank, Agoura Hills, California, on October 16, 2001 and BYL Bancorp and its
wholly-owned banking subsidiary, BYL Bank Group, Orange, California, on October
31, 2001. In addition, First Banks completed its acquisitions of Union Financial
Group, Ltd. ("UFG"), Swansea, Illinois, on December 31, 2001 and Plains
Financial Corporation ("PFC"), Des Plaines, Illinois, on January 15, 2002.
Charter Pacific Bank, BYL Bancorp, UFG and PFC had assets of $101.5 million,
$281.5 million, $341.4 million and $250.0 million, respectively, at the time of
the acquisitions.
At December 31, 2001, First Banks had consolidated assets of $6.78 billion
and operated 150 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 Year ended
December 31, December 31,
---------------------- --------------------
2001 2000 2001 2000
---- ---- ---- ----
Interest income............................................... $ 104,626 113,366 444,743 422,826
Interest expense.............................................. 39,641 51,481 191,014 187,679
--------- -------- -------- --------
Net interest income........................................ 64,985 61,885 253,729 235,147
Provision for loan losses..................................... 9,600 3,060 23,510 14,127
Noninterest income............................................ 40,865 10,993 98,609 42,778
Noninterest expense........................................... 59,433 48,677 230,261 171,163
--------- -------- -------- --------
Income before provision for income taxes, minority
interest in income of subsidiary and cumulative
effect of change in accounting principle................. 36,817 21,141 98,567 92,635
Provision for income taxes.................................... 5,928 7,794 30,048 34,482
--------- -------- -------- --------
Income before minority interest in income of
subsidiary and cumulative effect of change in
accounting principle..................................... 30,889 13,347 68,519 58,153
Minority interest in income of subsidiary..................... 1,007 557 2,629 2,046
--------- -------- -------- --------
Income before cumulative effect of change in accounting
principle................................................ 29,882 12,790 65,890 56,107
Cumulative effect of change in accounting principle,
net of tax................................................. -- -- (1,376) --
--------- -------- -------- --------
Net income................................................. $ 29,882 12,790 64,514 56,107
========= ======== ======== ========
Basic earnings per common share:
Income before cumulative effect of change in principle..... $1,251.86 529.46 2,751.54 2,338.04
Cumulative effect of change in accounting principle,
net of tax.............................................. -- -- (58.16) --
--------- -------- -------- --------
$1,251.86 529.46 2,693.38 2,338.04
========= ======== ======== ========
Diluted earnings per common share:
Income before cumulative effect of change in principle..... $1,225.79 519.78 2,684.93 2,267.41
Cumulative effect of change in accounting principle,
net of tax.............................................. -- -- (58.16) --
--------- -------- -------- --------
$1,225.79 519.78 2,626.77 2,267.41
========= ======== ======== ========
Condensed Consolidated Balance Sheet Information
December 31, December 31,
2001 2000
--------------- -------------
Total assets......................................................... $ 6,778,451 5,876,691
Loans, net of unearned discount...................................... 5,408,869 4,752,265
Allowance for loan losses............................................ 97,164 81,592
Deposits............................................................. 5,683,904 5,012,415
Note payable......................................................... 27,500 83,000
Stockholders' equity................................................. 448,657 352,846
Nonperforming assets................................................. 71,624 55,653