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
April 28, 2005
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)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
|_| Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
|_| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
|_| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
|_| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
FIRST BANKS, INC.
TABLE OF CONTENTS
Page
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ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION................. 1
ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS............................. 1
SIGNATURE................................................................ 2
ITEM 2.02 - RESULTS OF OPERATIONS AND FINANCIAL CONDITION.
On April 28, 2005, First Banks, Inc. issued a press release announcing its
financial results for the three months ended March 31, 2005. A copy of the press
release is attached as Exhibit 99.
ITEM 9.01 - FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
Exhibit Number Description
-------------- -----------
99 Press Release issued by First Banks, Inc. on
April 28, 2005.
SIGNATURE
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 hereunto duly authorized.
FIRST BANKS, INC.
Date: April 28, 2005 By:/s/ Allen H. Blake
----------------------------------------
Allen H. Blake
President, Chief Executive Officer
and Chief Financial Officer
Exhibit 99
First Banks, Inc.
St. Louis, Missouri
Contact: Allen H. Blake Terrance M. McCarthy
President and Senior Executive Vice President and
Chief Executive Officer Chief Operating Officer
First Banks, Inc. First Banks, Inc.
(314) 592-5000 (314) 592-5000
Traded: NASDAQ
Symbol: FBNKN - (First Preferred Capital Trust II, an affiliated trust of
First Banks, Inc.)
FBNKM - (First Preferred Capital Trust III, an affiliated trust of
First Banks, Inc.)
Traded: NYSE
Symbol: FBSPrA - (First Preferred Capital Trust IV, an affiliated trust of
First Banks, Inc.)
FOR IMMEDIATE RELEASE:
First Banks, Inc. Announces First Quarter 2005 Earnings
St. Louis, Missouri, April 28, 2005. First Banks, Inc. ("First Banks" or
the "Company") reported earnings of $22.1 million for the three months ended
March 31, 2005, compared to $18.3 million for the comparable period in 2004,
reflecting an increase of 21.1%. The Company's return on assets and return on
average stockholders' equity increased to 1.04% and 14.67%, respectively, for
the three months ended March 31, 2005, compared to 1.01% and 13.16% for the
comparable period in 2004.
Allen H. Blake, President and Chief Executive Officer of First Banks, said,
"Our financial performance in the first quarter of 2005 reflects strong earnings
for the Company. The Company's 21% increase in earnings was generated by
increased net interest income and noninterest income in accordance with our
internal business plan, and a notable reduction in the provision for loan
losses. Our continued efforts to improve asset quality resulted in a 9%
reduction in nonperforming assets since December 31, 2004, and a $12.8 million
decrease in the provision for loan losses for the first quarter of 2005, as
compared to the same period last year." Mr. Blake added, "In January 2005, we
opened a new branch banking office in Farmington, Missouri, and in February
2005, we successfully completed the information technology conversion for our
recently completed acquisition of Chicago-based CIB Bank, the largest
acquisition in the Company's history." Mr. Blake further added, "Our upcoming
acquisition of First Bank of the Americas, which is expected to be completed at
the end of this month, will further expand our products, services and delivery
channels within the rapidly growing communities of Back of the Yards, Little
Village and Cicero in southwestern Chicago."
Financial results for the three months ended March 31, 2005 reflect
increased net interest and noninterest income, and a reduced provision for loan
losses, partially offset by increased noninterest expense and an increased
provision for income taxes. Net income for the comparable period in 2004
includes two nonrecurring transactions: a gain of $2.7 million, before
applicable income taxes, recorded in February 2004 relating to the sale of a
residential and recreational development property that was foreclosed on in
January 2003; and a $390,000 gain, before applicable income taxes, on the sale
of a Midwest branch banking office in February 2004. Total assets were $8.60
billion at March 31, 2005, compared to $8.73 billion at December 31, 2004. The
overall decline in total assets is primarily attributable to a decline in total
deposits of $97.5 million to $7.05 billion at March 31, 2005, from $7.15 billion
at December 31, 2004, resulting from an anticipated level of attrition
associated with the deposits acquired from CIB Bank, particularly time deposits.
The decline in total deposits was funded from available cash and cash
equivalents as well as maturities of investment securities. The investment
security portfolio declined by $99.4 million to $1.71 billion at March 31, 2005,
from $1.81 billion at December 31, 2004.
Net interest income experienced continued growth, increasing $3.4 million
to $78.1 million for the three months ended March 31, 2005, from $74.7 million
for the comparable period in 2004. Average earning assets were $8.01 billion for
the three months ended March 31, 2005, compared to $6.61 billion for the
comparable period in 2004, and net interest margin was 3.97% and 4.56% for the
three months ended March 31, 2005 and 2004, respectively. The increase in net
interest income is primarily attributable to net interest-earning assets
provided by the Company's 2004 acquisitions, higher-yielding investment
securities and internal loan growth, partially offset by increased interest
expense associated with higher deposit rates, increased levels of other
borrowings and the issuance of additional subordinated debentures late in 2004
to partially fund the acquisition of CIB Bank. Net interest income was adversely
affected by a decline in earnings on the Company's interest rate swap agreements
that were entered into in conjunction with its interest rate risk management
program to mitigate the effects of decreasing interest rates. These derivative
financial instruments used to hedge interest rate risk contributed $3.6 million
to net interest income for the three months ended March 31, 2005, compared to
$16.2 million for the comparable period in 2004. The decreased earnings on the
interest rate swap agreements in 2005 reflect the impact of higher interest
rates and maturities of interest rate swap agreements of $750.0 million during
2004 and $200.0 million in March 2005, as well as the Company's termination of
an additional $150.0 million of interest rate swap agreements in February 2005.
The current interest rate environment, overall economic conditions and the
maturity and termination of certain interest rate swap agreements, as discussed
above, continue to exert pressure on the Company's net interest margin.
Nonperforming assets improved during the first quarter of 2005, decreasing
to $81.6 million at March 31, 2005, from $89.8 million at December 31, 2004 and
$90.2 million at March 31, 2004. A significant portion of nonperforming assets
includes nonperforming loans associated with the recent acquisition of CIB Bank
in November 2004, which have decreased to $43.7 million at March 31, 2005 from
$50.5 million at December 31, 2004. Nonperforming loans were 1.30% of loans, net
of unearned discount, at March 31, 2005, compared to 1.40% and 1.64% at December
31, 2004 and March 31, 2004, respectively. Additionally, loans past due 90 days
or more and still accruing decreased from $28.7 million at December 31, 2004 to
$8.8 million at March 31, 2005. The decrease in nonperforming assets and problem
loans during the three months ended March 31, 2005 primarily resulted from the
sale of approximately $2.8 million of certain acquired nonperforming loans, net
loan charge-offs of $6.6 million, loan payoffs and/or refinancings of various
credits, and loan renewals. While the Company has made substantial progress in
improving asset quality, the level of nonperforming loans from the Company's
recent acquisitions has contributed to generally high levels of problem loans.
The Company continues to closely monitor its loan portfolio and considers this
in its overall assessment of the adequacy of the allowance for loan losses.
While the Company continues its efforts to reduce nonperforming loans, it
expects the overall level of such loans to remain at somewhat elevated levels in
the near future primarily as a result of the significant level of nonperforming
loans associated with the CIB Bank acquisition.
The allowance for loan losses was $144.2 million at March 31, 2005,
compared to $150.7 million at December 31, 2004 and $124.9 million at March 31,
2004. The Company did not record a provision for loan losses for the three
months ended March 31, 2005, in comparison to a $12.8 million provision for loan
losses recorded for the three months ended March 31, 2004. The reduced provision
for the three months ended March 31, 2005 resulted from the recent sale of
certain nonperforming loans, payoffs and/or refinancings as well as an overall
improvement in asset quality, as previously discussed. The allowance for loan
losses as a percentage of nonperforming loans was 180.71% at March 31, 2005,
compared to 175.65% at December 31, 2004 and 142.94% at March 31, 2004. Net loan
charge-offs were $6.6 million and $5.3 million for the three months ended March
31, 2005 and 2004, respectively.
Noninterest income was $21.1 million and $20.6 million for the three months
ended March 31, 2005 and 2004, respectively. The increase is attributable to
increases in loan servicing fees, service charges on deposit accounts and
customer service fees related to higher deposit balances, investment management
fees, and a $500,000 recovery of loan collection expenses. The overall increase
in noninterest income for 2005 was partially offset by a $288,000 net loss on
the disposal of certain fixed assets, primarily associated with the demolition
of a drive-thru facility, a decline in rental income associated with reduced
commercial leasing activities and net losses on derivative instruments. In
addition, in February 2004, the Company recorded a $390,000 gain, net of
expenses, attributable to the sale of a Midwest branch banking office.
Noninterest expenses were $63.8 million and $52.6 million for the three
months ended March 31, 2005 and 2004, respectively. The Company's efficiency
ratio was 64.28% and 55.25% for the three months ended March 31, 2005 and 2004,
respectively. The $11.2 million increase in noninterest expenses was primarily
attributable to an overall increase in expenses resulting from our 2004
acquisitions, an increase in salary and employee benefit expenses and an
increase in expenses and losses, net of gains, on other real estate. Salary and
employee benefit expenses increased $5.2 million for the three months ended
March 31, 2005, compared to the comparable period in 2004, due primarily to the
impact of recent acquisitions and costs associated with employing and retaining
qualified personnel, including increased employee benefit costs. Expenses and
losses, net of gains, on other real estate, were $38,000 for the three months
ended March 31, 2005, compared to net gains of $2.7 million for the three months
ended March 31, 2004. The $2.8 million increase in these noninterest expenses
for the three months ended March 31, 2005, as compared to the comparable period
in 2004, was primarily due to a $2.7 million gain recorded in February 2004 on
the sale of a foreclosed residential and recreational development property. The
increase in noninterest expenses is also attributable to increased legal,
examination and professional fees, which included approximately $386,000 of fees
for information technology, accounting and other services provided by the seller
of CIB Bank pursuant to a service agreement to provide services from the date of
the sale through the date of the system conversion. Furthermore, increased
amortization of intangibles associated with the purchase of subsidiaries and
increased advertising and business development expense resulting from broadened
advertising campaigns and the expansion of the Company's sales, marketing and
product group in 2004, also contributed to the increase in noninterest expenses.
As previously announced, First Banks and FBA Bancorp, Inc. ("FBA") entered
into an Agreement and Plan of Reorganization that provides for First Banks to
acquire FBA and its wholly owned banking subsidiary, First Bank of the Americas,
S.S.B., for approximately $10.5 million in cash. FBA is headquartered in
Chicago, Illinois, and through First Bank of the Americas, S.S.B., operates
three banking offices in the southwestern Chicago metropolitan area. The
transaction is expected to be completed on April 29, 2005. FBA reported
consolidated assets of $73.2 million, loans, net of unearned discount, of $51.8
million, deposits of $54.8 million and stockholders' equity of $7.1 million at
March 31, 2005.
At March 31, 2005, First Banks had consolidated assets of $8.60 billion and
operated 167 branch banking offices in Missouri, Illinois, California and Texas.
# # #
This press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These statements include, but
are not limited to, statements about First Banks' plans, objectives, estimates
or projections with respect to our future financial condition, expected or
anticipated revenues with respect to our results of operations and our business,
expectations and intentions and other statements that are not historical facts.
Such statements are based upon the current beliefs and expectations of First
Banks' management and are subject to significant risks and uncertainties which
may cause actual results to differ materially from those contemplated in the
forward-looking statements. The following factors, among others, could cause
actual results to differ from those set forth in the forward-looking statements:
increased competition and its effect on pricing, spending, third-party
relationships and revenues; and the risk of new and changing regulation.
Additional factors which may cause First Banks' results to differ materially
from those described in the forward-looking statements may be found in First
Banks' most recent Annual Report on Form 10-K as filed with the Securities and
Exchange Commission ("SEC") and available at the SEC's internet site
(http://www.sec.gov). The forward-looking statements in this press release speak
only as of the date of the press release, and First Banks does not assume any
obligation to update the forward-looking statements or to update the reasons why
actual results could differ from those contained in the forward-looking
statements.
FIRST BANKS, INC.
FINANCIAL SUMMARY
(in thousands, except per share data)
(unaudited)
Selected Operating Data
Three Months Ended
March 31,
--------------------------
2005 2004
---- ----
Interest income....................................................... $ 112,228 96,127
Interest expense...................................................... 34,149 21,474
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Net interest income............................................... 78,079 74,653
Provision for loan losses............................................. -- 12,750
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Net interest income after provision for loan losses............... 78,079 61,903
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Noninterest income.................................................... 21,101 20,559
Noninterest expense................................................... 63,755 52,602
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Income before provision for income taxes.......................... 35,425 29,860
Provision for income taxes............................................ 13,298 11,591
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Net income........................................................ $ 22,127 18,269
========= =======
Basic earnings per common share....................................... $ 926.87 763.81
========= =======
Diluted earnings per common share..................................... $ 915.04 753.93
========= =======
Selected Financial Data
March 31, December 31,
2005 2004
---- ----
Total assets.......................................................... $8,599,324 8,732,841
Investment securities................................................. 1,713,981 1,813,349
Loans, net of unearned discount....................................... 6,156,446 6,137,968
Allowance for loan losses............................................. 144,154 150,707
Deposits.............................................................. 7,054,429 7,151,970
Other borrowings...................................................... 556,009 594,750
Note payable.......................................................... 4,000 15,000
Subordinated debentures............................................... 271,835 273,300
Stockholders' equity.................................................. 605,208 600,893
Nonperforming assets.................................................. 81,594 89,830
Selected Financial Ratios
Three Months Ended
March 31,
----------------------
2005 2004
---- ----
Return on average assets.............................................. 1.04% 1.01%
Return on average equity.............................................. 14.67 13.16
Net interest margin................................................... 3.97 4.56
Efficiency ratio...................................................... 64.28 55.25