Delicious
Digg
Facebook
LinkedIn
Twitter
MEMPHIS, Tenn.--July 14, 1997--First Tennessee National Corporation (First Tennessee) (NASDAQ/NMS:FTEN) reported second quarter earnings per share of $.72, an increase of 14 percent over last year's second quarter earnings per share of $.63.
Net income for the quarter was $46.4 million, up 9 percent from the previous year. For the second quarter of 1997, return on average assets was 1.43 percent and return on average common equity was 21.81 percent, compared with 1.34 percent and 19.48 percent, respectively, for the same period in 1996. Total assets were $13.7 billion and shareholders' equity was $880.9 million at June 30, 1997.
For the first six months of 1997, net income totaled $84.9 million, or $1.32 per share compared with $79.8 million, or $1.19 per share, for the same period in 1996. Return on average assets for the first half of 1997 was 1.33 percent and return on average common equity was 19.95 percent, compared with 1.28 percent and 18.37 percent, respectively, in 1996.
"This quarter was highlighted with a return on common equity in excess of 21 percent and 14 percent earnings per share growth," said Ralph Horn, chairman and chief executive officer of First Tennessee. "Our strategy to grow our fee-based businesses continues to be successful, with all of these businesses showing favorable revenue trends during the quarter, in addition to continued improvement in our net interest margin and net interest income growth in the retail/commercial bank."
Noninterest income
Fee income (noninterest income excluding securities gains and losses) grew 19 percent from the second quarter of 1996 and contributed approximately 56 percent to total revenue. For the first six months of 1997, noninterest income increased 10 percent over the same period in 1996.
Fee income in mortgage banking grew 17 percent from the second quarter of 1996 to $71.1 million. Growth in the servicing portfolio was the primary contributing factor as the servicing portfolio grew from $20.5 billion at June 30, 1996, to $23.9 billion at June 30, 1997. Mortgage loan originations declined 14 percent from $2.8 billion in the second quarter of 1996 to $2.4 billion in the second quarter of 1997. For the first six months of 1997, noninterest income in mortgage banking was $135.3 million, a 14 percent increase over the same period in 1996.
First Tennessee Capital Markets experienced a 17 percent increase in fee income from the second quarter of 1996 to $20.0 million. Fee income for the first six months of 1997 was $40.5 million, an 11 percent decline from the same period in 1996. A record level of fee income was earned during the first quarter of 1996 related to stronger customer demand from the benefit of regulatory reclassifications of securities.
Merchant processing fee income increased 60 percent to $8.2 million, and cardholder fees grew 12 percent from the second quarter of 1996 to $4.9 million. Deposit transactions and cash management noninterest income increased 9 percent from the second quarter of 1996 to $21.6 million, and over this same time period noninterest income from trust and investment management services increased 12 percent to $9.5 million. For the first six months of 1997, fee income in merchant processing was $14.9 million, an increase of 37 percent; cardholder fees were $9.4 million, an increase of 13 percent; fees from deposit transactions and cash management were $40.8 million, an increase of 9 percent; and trust and investment management service fees were $18.8 million, an increase of 12 percent.
Net interest income
Net interest income increased 5 percent from the second quarter of 1996, with a 1 percent increase in average earning assets and a 17 basis point improvement in net interest margin from 4.09 percent to 4.26 percent. The net interest margin in the regional banking group improved from 4.49 percent in the second quarter of 1996 to 4.66 percent in the second quarter of 1997. The expiration of the amortization of a terminated basis swap contributed 9 basis point to the improvement.
For the first six months of 1997, net interest income increased 7 percent over the same period last year, with a year-to-date margin of 4.25 percent.
Noninterest expense
Total noninterest expense (operating expense) increased 11 percent from the second quarter of 1996. Employee compensation, incentives and benefits (personnel expense) increased 4 percent. As a result of a larger servicing portfolio, amortization expense of mortgage servicing rights increased $4.5 million (108 percent) from the second quarter of 1996. Most of the other growth relates to expenses associated with the qualifying capital securities offering, equipment rental and depreciation.
For the first six months of 1997, noninterest expense increased 7 percent over the same period last year and personnel expense decreased 1 percent.
Balance sheet
Total average assets grew 2 percent from the second quarter of 1996, with overall loan growth of 7 percent. Commercial loans grew 9 percent and consumer loans grew 6 percent from the second quarter of 1996. Interest-bearing core deposits increased 5 percent from the previous year and were the primary funding source for this loan growth. The mortgage warehouse declined 32 percent from the second quarter of 1996 due to the lower levels of refinancing in the industry this year versus last year.
Asset quality
The provision for loan losses increased $4.9 million from the second quarter of 1996 but was flat to first quarter 1997 levels. The allowance for loan losses to total loans remained relatively flat from the second quarter of 1996 at 1.54 percent for the second quarter of 1997 compared to 1.56 percent for the second quarter of 1996. The ratio of nonperforming assets to total loans was .66 percent for the second quarter, an increase from the second quarter 1996 level of .32 percent but a decline from the first quarter 1997 level of .74 percent. The increase in nonperforming assets from the second quarter of 1996 came primarily from the increase in the number of mortgage loans repurchased during the first quarter of 1997 to correct loan file documentation in order to certify loan pools.
Mortgage banking nonperforming loans decreased $4.3 million between the first and second quarters of 1997. The ratio of net charge-offs to average loans increased from .31 percent in the second quarter of 1996 to .54 percent in the second quarter of 1997, reflecting increases in charge-offs in consumer and credit card lending, and less recoveries in commercial loans. Although the percentage of charge-offs increased in credit card lending, it still remained favorable to industry averages.
General
First Tennessee, headquartered in Memphis, Tenn., is a nationwide, diversified financial services institution and is one of the 50 largest bank holding companies in the United States in market capitalization. First Tennessee's market capitalization was $3.1 billion at June 30, 1997. Banking and other financial services are provided through the regional banking group and three national lines of business: FT Mortgage Companies, First Tennessee Capital Markets and transaction processing. Transaction processing includes credit card merchant processing MONEY BELT(SM) (our automated teller machine network), First Express (our nationwide check clearing operation), and transaction-oriented cash management products. The corporation's common stock is traded over the counter on the Nasdaq Stock Market's national market system under the symbol FTEN. It is listed in the financial section of most newspapers as FstTN Ntl and is included in the Standard & Poor's MidCap 400 index.
FIRST TENNESSEE NATIONAL CORPORATION
STATEMENTS OF INCOME - QUARTERLY GROWTH
(Unaudited)
Quarter Ended Growth
June 30 Rate (%)
------------------------
1997 1996
----------- -----------
Per Share Data:
Earnings per share $ .72 $ .63 14.29+
Dividends declared $ .30 $ .265
Selected Financial Ratios:
--------------------------
Return on average assets 1.43% 1.34%
Return on capital(a) 19.52% 19.48%
Return on average common
equity 21.81% 19.48%
Quarter Ended Growth
June 30 Rate (%)
------------------------
1997 1996
----------- -----------
Summary Statements
of Income (thousands)
---------------------
Interest income $ 230,912 $ 225,974 2.19+
Less interest expense 111,894 113,020 1.00--
----------- -----------
Net interest income 119,018 112,954 5.37+
Provision for loan losses 12,504 7,559 65.42+
----------- -----------
Net interest income after
provision for loan
losses 106,514 105,395 1.06+
Noninterest income:
Mortgage banking 71,100 60,902 16.74+
Capital markets 19,990 17,145 16.59+
Deposit transactions and
cash management 21,558 19,860 8.55+
Merchant processing 8,164 5,116 59.58+
Cardholder fees 4,893 4,362 12.17+
Trust and investment
management 9,498 8,458 12.30+
Securities gains/(losses) (789) 52 NA
Other income and
commissions 18,763 13,825 35.72+
----------- -----------
Total noninterest income 153,177 129,720 18.08+
----------- -----------
Adjusted gross income
after provision for
loan losses 259,691 235,115 10.45+
Noninterest expense:
Employee compensation,
incentives, and
benefits 96,764 93,062 3.98+
Occupancy, equipment
rentals, depreciation,
and maintenance 21,239 18,345 15.78+
Amortization of mortgage
servicing rights 8,656 4,166 107.78+
Amortization of intangible
assets 2,403 2,362 1.74+
Deposit insurance premium 370 464 20.26--
Other 56,626 49,598 14.17+
----------- ----------
Total noninterest expense 186,058 167,997 10.75+
----------- ----------
Income before income
taxes 73,633 67,118 9.71+
Applicable income taxes 27,269 24,771 10.08+
----------- ----------
Net income $ 46,364 $ 42,347 9.49+
=========== ==========
Net interest income - FTE $ 120,117 $ 114,377 5.02+
(a) Net income/Total shareholders' equity plus Guaranteed preferred
beneficial interests in First Tennessee's subordinated debentures.
FIRST TENNESSEE NATIONAL CORPORATION
STATEMENTS OF INCOME - YEARLY GROWTH
(Unaudited)
Year-to-date Growth
June 30 Rate (%)
----------------- --------
1997 1996
--------- ---------
Per Share Data:
Earnings per share $ 1.32 $ 1.19 10.92+
Dividends declared $ .60 $ .53
Selected Financial Ratios:
Return on average assets 1.33% 1.28%
Return on capital(b) 17.92% 18.37%
Return on average common
equity 19.95% 18.37%
Year-to-date Growth
June 30 Rate (%)
----------------- --------
Summary Statements 1997 1996
of Income --------- ---------
(thousands)
Interest income $ 453,238 $ 443,626 2.17+
Less interest expense 218,711 225,294 2.92-
--------- ---------
Net interest income 234,527 218,332 7.42+
Provision for loan losses 25,030 15,592 60.53+
Net interest income after --------- ---------
provision for loan losses 209,497 202,740 3.33+
Noninterest income:
Mortgage banking 135,287 119,021 13.67+
Capital markets 40,455 45,266 10.63-
Deposit transactions and
cash management 40,782 37,295 9.35+
Merchant processing 14,913 10,883 37.03+
Cardholder fees 9,417 8,355 12.71+
Trust and investment managment 18,768 16,754 12.02+
Securities gains/(losses) (760) 310 NA
Other income and commissions 33,391 28,413 17.52+
--------- ---------
Total noninterest income 292,253 266,297 9.75+
--------- ---------
Adjusted gross income
after provision for
loan losses 501,750 469,037 6.97+
Noninterest expense:
Employee compensation,
incentives, and
benefits 190,660 192,004 .70-
Occupancy, equipment rentals,
depreciation, and
maintenance 41,060 35,795 14.71+
Amortization of mortgage
servicing rights 17,491 11,865 47.42+
Amortization of intangible
assets 4,810 4,716 1.99+
Deposit insurance premium 735 883 16.76-
Other 111,628 98,320 13.54+
--------- ---------
Total noninterest expense 366,384 343,583 6.64+
--------- ---------
Income before income
taxes 135,366 125,454 7.90+
Applicable income taxes 50,439 45,666 10.45+
--------- ---------
Net income $ 84,927 $ 79,788 6.44+
========= =========
Net interest income - FTE $ 236,763 $ 221,189 7.04+
(b) Net income/Total shareholders' equity plus Guaranteed preferred
beneficial interests in First Tennessee's subordinated debentures.
FIRST TENNESSEE NATIONAL CORPORATION
STATEMENTS OF INCOME - QUARTERLY
(Unaudited)
2Q97 1Q97 4Q96 3Q96 2Q96
--------- ---------- ------- -------- ---------
Per Share Data:
Earnings per share $ .72 $ .60 $.80 $ .69 $ .63
Dividends declared $ .300 $ .300 $.300 $ .265 $ .265
Selected Financial Ratios:
Return on average assets 1.43% 1.23% 1.67% 1.47% 1.34%
Return on capital(c) 19.52% 16.31% 22.47% 20.71% 19.48%
Return on average common
equity 21.81% 18.09% 22.47% 20.71% 19.48%
2Q97 1Q97 4Q96 3Q96 2Q96
--------- --------- -------- --------- ---------
Summary Statements
of Income (thousands)
Interest income $ 230,912 $ 222,326 $227,094 $ 225,777 $ 225,974
Less interest expense 111,894 106,817 109,287 110,728 113,020
--------- --------- -------- --------- ---------
Net interest income 119,018 115,509 117,807 115,049 112,954
Provision for loan
losses 12,504 12,526 11,232 8,853 7,559
--------- --------- -------- --------- ---------
Net interest income after
provision for loan
losses 106,514 102,983 106,575 106,196 105,395
Noninterest income:
Mortgage banking 71,100 64,187 83,768 71,495 60,902
Capital markets 19,990 20,465 23,654 16,951 17,145
Deposit transactions
and cash management 21,558 19,224 20,792 20,141 19,860
Merchant processing 8,164 6,749 6,666 6,636 5,116
Cardholder fees 4,893 4,524 4,576 4,224 4,362
Trust and investment
management 9,498 9,270 9,223 8,727 8,458
Securities gains/(losses) (789) 29 (3,035) 44 52
Other income and
commissions 18,763 14,628 16,789 14,201 13,825
---------- --------- -------- --------- ---------
Total noninterest
income 153,177 139,076 162,433 142,419 129,720
---------- --------- -------- --------- ---------
Adjusted gross income
after provision for
loan losses 259,691 242,059 269,008 248,615 235,115
Noninterest expense:
Employee compensation,
incentives, and
benefits 96,764 93,896 99,371 94,005 93,062
Occupancy, equipment
rentals, depreciation,
and maintenance 21,239 19,821 19,524 18,617 18,345
Amortization of mortgage
servicing rights 8,656 8,835 7,507 6,669 4,166
Amortization of
intangible assets 2,403 2,407 2,363 2,412 2,362
Deposit insurance
premium 370 365 (13) 4,259 464
Other 56,626 55,002 57,239 48,950 49,598
--------- --------- -------- --------- ---------
Total noninterest
expense 186,058 180,326 185,991 174,912 167,997
--------- --------- -------- --------- ---------
Income before income
taxes 73,633 61,733 83,017 73,703 67,118
Applicable income
taxes 27,269 23,170 29,695 26,906 24,771
--------- --------- -------- --------- ---------
Net income $ 46,364 $ 38,563 $ 53,322 $ 46,797 $ 42,347
========= ========= ======== ========= =========
Net interest
income - FTE $ 120,117 $ 116,646 $119,115 $ 116,308 $ 114,377
(c) Net income/Total shareholders' equity plus Guaranteed preferred
beneficial interests in First Tennessee's subordinated debentures.
FIRST TENNESSEE NATIONAL CORPORATION
AVERAGE STATEMENTS OF CONDITION - QUARTERLY GROWTH
(Unaudited)
Quarter Ended Growth
June 30 Rate (%)
------------------------
Average Balance
Sheet (thousands) 1997 1996
----------------- ----------- -----------
Loans, net of unearned income:
Commercial $ 3,633,626 $ 3,335,006 8.95+
Consumer 2,730,127 2,584,850 5.62+
Permanent mortgage 627,076 663,753 5.53-
Credit card receivables 540,559 523,043 3.35+
Real estate construction 313,930 264,615 18.64+
Nonaccrual - Regional
Banking Group 11,989 8,628 38.95+
Nonaccrual - Mortgage
Banking 32,113 4,632 593.29+
------------ ------------
Total loans, net of
unearned income 7,889,420 7,384,527 6.84+
Investment securities 2,162,429 2,213,470 2.31--
Mortgage loans held for sale 827,256 1,212,254 31.76--
Other earning assets 417,286 399,737 4.39+
------------ ------------
Total earning assets 11,296,391 11,209,988 .77+
Cash and due from banks 639,862 663,744 3.60--
Other assets 1,063,850 833,058 27.70+
------------ ------------
Total assets $ 13,000,103 $ 12,706,790 2.31+
============ ============
Certificates of deposits under
$100,000 and other
time $ 2,808,247 $ 2,884,512 2.64--
Other interest-bearing deposits 3,792,187 3,414,895 11.05+
------------ ------------
Total interest-bearing
core deposits 6,600,434 6,299,407 4.78+
Certificates of deposits $100,000
and more 950,751 929,749 2.26+
Short-term borrowed funds 2,225,148 2,159,860 3.02+
Term borrowings 182,785 257,768 29.09--
------------ ------------
Total interest-bearing
liabilities 9,959,118 9,646,784 3.24+
Demand deposits 1,662,041 1,812,756 8.31--
Other liabilities 426,195 372,823 14.32+
Qualifying capital securities(d) 100,000 - N/A
Shareholders' equity 852,749 874,427 2.48--
------------ ------------
Total liabilities and
shareholders'
equity $ 13,000,103 $ 12,706,790 2.31+
============ ============
(d) Guaranteed preferred beneficial interests in First Tennessee's
subordinated debentures
FIRST TENNESSEE NATIONAL CORPORATION
AVERAGE STATEMENTS OF CONDITION - YEARLY GROWTH
(Unaudited)
Year-to-date Growth
June 30 Rate (%)
----------------------- -------
Average Balance
Sheet (thousands) 1997 1996
----------- -----------
Loans, net of unearned income:
Commercial $ 3,581,817 $ 3,329,007 7.59 +
Consumer 2,715,073 2,564,287 5.88 +
Permanent mortgage 628,683 672,748 6.55 --
Credit card receivables 542,631 519,955 4.36 +
Real estate construction 306,628 255,480 20.02 +
Nonaccrual - Regional
Banking Group 11,538 9,382 22.98 +
Nonaccrual - Mortgage
Banking 30,328 5,013 504.99 +
----------- -----------
Total loans, net of
unearned income 7,816,698 7,355,872 6.26 +
Investment securities 2,182,505 2,172,016 .48 +
Mortgage loans held for sale 798,170 1,138,075 29.87 --
Other earning assets 377,722 371,505 1.67 +
----------- -----------
Total earning assets 11,175,095 11,037,468 1.25 +
Cash and due from banks 668,622 665,131 .52 +
Other assets 1,036,766 807,266 28.43 +
------------ ------------
Total assets $ 12,880,483 $ 12,509,865 2.96 +
============ ============
Certificates of deposits under
$100,000 and other time $ 2,834,570 $ 2,872,090 1.31 --
Other interest-bearing deposits 3,685,189 3,348,165 10.07 +
----------- -----------
Total interest-bearing
core deposits 6,519,759 6,220,255 4.81 +
Certificates of deposits $100,000
and more 863,718 823,364 4.90 +
Short-term borrowed funds 2,160,820 2,120,818 1.89 +
Term borrowings 195,972 258,454 24.18 --
----------- -----------
Total interest-bearing
liabilities 9,740,269 9,422,891 3.37 +
Demand deposits 1,758,797 1,833,614 4.08 --
Other liabilities 425,607 380,140 11.96 +
Qualifying capital securities(e) 97,238 - N/A
Shareholders' equity 858,572 873,220 1.68 --
----------- -----------
Total liabilities and
shareholders' equity $ 12,880,483 $ 12,509,865 2.96 +
============ ============
(e) Guaranteed preferred beneficial interests in First Tennessee's
subordinated debentures
FIRST TENNESSEE NATIONAL CORPORATION
AVERAGE STATEMENTS OF CONDITION - QUARTERLY
(Unaudited)
2Q97 1Q97 4Q96 3Q96 2Q96
------------ ----------- ----------- ---------- -----------
Average Balance
Sheet (thousands)
Loans, net of unearned income:
Commercial $ 3,633,626 $ 3,529,430 $ 3,482,527 $ 3,392,149 $ 3,335,006
Consumer 2,730,127 2,699,853 2,669,872 2,630,614 2,584,850
Permanent
mortgage 627,076 630,309 642,094 652,710 663,753
Credit
card
receivables 540,559 544,726 542,211 538,510 523,043
Real estate
construction 313,930 299,246 300,322 288,855 264,615
Nonaccrual -
Regional
Banking Group 11,989 11,082 11,976 9,570 8,628
Nonaccrual -
Mortgage
Banking 32,113 28,523 7,058 5,640 4,632
---------- ---------- ---------- ---------- ----------
Total loans,
net of
unearned
income 7,889,420 7,743,169 7,656,060 7,518,048 7,384,527
Investment
securities 2,162,429 2,202,804 2,268,953 2,199,210 2,213,470
Mortgage loans
held for sale 827,256 768,760 874,172 1,089,101 1,212,254
Other earning
assets 417,286 337,719 273,159 293,791 399,737
---------- ---------- ---------- ---------- ----------
Total
earning
assets 11,296,391 11,052,452 11,072,344 11,100,150 11,209,988
Cash and due
from banks 639,862 697,702 675,272 645,781 663,744
Other assets 1,063,850 1,009,381 958,353 879,721 833,058
---------- ---------- ---------- ---------- ----------
Total
assets $13,000,103 $12,759,535 $12,705,969 $12,625,652 $12,706,790
========== ========== ========== ========== ==========
Certificates
of deposits
under
$100,000
and other
time $ 2,808,247 $ 2,861,187 $ 2,891,124 $ 2,905,366 $ 2,884,512
Other
interest-
bearing
deposits 3,792,187 3,577,002 3,489,933 3,446,259 3,414,895
---------- ---------- ---------- ---------- ----------
Total
interest-
bearing
core
deposits 6,600,434 6,438,189 6,381,057 6,351,625 6,299,407
Certificates
of deposits
$100,000
and more 950,751 775,718 834,411 861,729 929,749
Short-term
borrowed
funds 2,225,148 2,095,777 2,050,952 2,140,398 2,159,860
Term
borrowings 182,785 209,305 241,405 256,451 257,768
---------- ---------- ---------- ---------- ----------
Total
interest-
bearing
liabilities 9,959,118 9,518,989 9,507,825 9,610,203 9,646,784
Demand
deposits 1,662,041 1,856,628 1,847,351 1,750,140 1,812,756
Other
liabilities 426,195 425,014 406,896 366,369 372,823
Qualifying
capital
securities(f) 100,000 94,444 - - -
Shareholders'
equity 852,749 864,460 943,897 898,940 874,427
---------- ---------- ---------- ---------- ----------
Total
liabilities
and
shareholders'
equity $13,000,103 $12,759,535 $12,705,969 $12,625,652 $12,706,790
========== ========== ========== ========== ==========
Average
shares
outstanding 64,005,532 64,582,657 67,117,011 67,144,391 67,224,935
(f) Guaranteed preferred beneficial interests in First Tennessee's
subordinated debentures
FIRST TENNESSEE NATIONAL CORPORATION
PERIOD-END STATEMENTS OF CONDITION
(Unaudited)
June 30 Growth
------------------------
Period-End Balance 1997 1996 Rate (%)
Sheet (thousands) ----------- -----------
Loans, net of unearned income:
Commercial $ 3,707,017 $ 3,394,050 9.22+
Consumer 2,751,428 2,603,152 5.70+
Permanent mortgage 636,859 658,219 3.25--
Credit card receivables 537,398 534,784 .49+
Real estate construction 335,443 283,150 18.47+
Nonaccrual - Regional
Banking Group 11,506 9,730 18.25+
Nonaccrual - Mortgage
Banking 26,821 4,606 482.31+
----------- -----------
Total loans, net of
unearned income 8,006,472 7,487,691 6.93+
Investment securities 2,141,036 2,248,084 4.76--
Mortgage loans held for sale 814,160 1,103,237 26.20--
Other earning assets 641,483 302,720 111.91+
------------ ------------
Total earning assets 11,603,151 11,141,732 4.14+
Cash and due from banks 634,748 674,458 5.89--
Other assets 1,441,694 1,138,767 26.60+
------------ ------------
Total assets $ 13,679,593 $ 12,954,957 5.59+
============ ============
Certificates of deposits under
$100,000 and other time $ 2,778,707 $ 2,900,771 4.21--
Other interest-bearing deposits 3,831,660 3,463,597 10.63+
Certificates of deposits $100,000
and more 826,200 748,146 10.43+
Short-term borrowed funds 2,588,339 2,117,889 22.21+
Term borrowings 181,768 257,327 29.36--
------------ ------------
Total interest-bearing
liabilities 10,206,674 9,487,730 7.58+
Demand deposits 1,617,425 1,859,864 13.04--
Other liabilities 874,571 715,029 22.31+
Qualifying capital securities(g) 100,000 - N/A
Shareholders' equity 880,923 892,334 1.28--
------------ ------------
Total liabilities and
shareholders' equity $ 13,679,593 $ 12,954,957 5.59+
============ ===========
(g) Guaranteed preferred beneficial interests in First Tennessee's
subordinated debentures.
FIRST TENNESSEE NATIONAL CORPORATION
ASSET QUALITY HIGHLIGHTS
(Unaudited)
Asset Quality
-------------
2Q97 1Q97 4Q96 3Q96 2Q96
--------- -------- --------- --------- ----------
Allowance for
Loan Losses:
Beginning Reserve $ 121,688 $ 117,748 $ 117,717 $ 116,478 $ 114,631
Provision 12,504 12,526 11,232 8,853 7,559
Charge-offs (12,960) (10,653) (13,631) (10,742) (9,159)
Loan recoveries 2,226 2,067 2,430 3,128 3,447
--------- --------- --------- --------- ---------
Ending Balance $ 123,458 $ 121,688 $ 117,748 $ 117,717 $ 116,478
========= ========= ========= ========= =========
Nonperforming Assets:
Nonperforming loans $ 11,506 $ 11,613 $ 9,978 $ 12,390 $ 9,730
Foreclosed real
estate 4,676 5,807 5,137 3,667 5,334
Other assets 227 194 196 203 925
--------- --------- --------- --------- ---------
Total Regional
Banking Group $ 16,409 $ 17,614 $ 15,311 $ 16,260 $ 15,989
========= ========= ========= ========= =========
Mortgage Banking
nonperforming
loans 26,821 31,109 8,948 6,217 4,606
Mortgage Banking
foreclosed real
estate 9,734 8,824 2,686 3,392 3,380
--------- --------- --------- --------- ---------
Total nonperforming
assets $ 52,964 $ 57,547 $ 26,945 $ 25,869 $ 23,975
========= ========= ========= ========= =========
Loans and leases
past due 90 days
or more $ 31,449 $ 36,038 $ 30,747 $ 32,424 $ 32,157
2Q97 1Q97 4Q96 3Q96 2Q96
--------- --------- -------- --------- ---------
Asset Quality Ratios - Total First Tennessee
Nonperforming loans
to total loans
(net of unearned
income) .48% .55% .24% .24% .19%
Nonperforming assets
to total loans
(net of unearned
income) plus
foreclosed real
estate and
other assets .66% .74% .35% .34% .32%
Allowance for loan
losses to total loans 1.54% 1.57% 1.52% 1.54% 1.56%
Allowance for loan
losses to
nonperforming loans 322.12% 284.84% 622.15% 632.65% 812.49%
Allowance for loan
losses to
nonperforming assets 233.10% 211.46% 436.99% 455.05% 485.83%
Net charge-offs to
average loans .54% .44% .59% .41% .31%
Asset Quality Ratios - Regional Banking Group
Nonperforming loans
to total loans
(net of unearned
income) .14% .15% .13% .16% .13%
Nonperforming assets
to total loans
(net of unearned
income) plus
foreclosed real estate
and other assets .21% .23% .20% .21% .21%
Allowance for loan
losses to total loans 1.49% 1.51% 1.52% 1.53% 1.55%
Allowance for loan
losses to
nonperforming loans 1,035.14% 1,005.39% 1,172.18% 943.98% 1,189.31%
Allowance for loan
losses to
nonperforming
assets 725.84% 662.86% 763.90% 719.31% 723.75%
FIRST TENNESSEE NATIONAL CORPORATION
CAPITAL AND MARGIN HIGHLIGHTS
(Unaudited)
Capital Adequacy:
2Q97 1Q97 4Q96 3Q96 2Q96
---------- ---------- ---------- ---------- ----------
Tier 1 Capital(h) $ 891,553 $ 860,643 $856,769 $ 837,091 $ 803,839
Tier 2 Capital(h) 275,886 270,841 266,864 263,594 263,537
---------- ---------- ---------- ---------- ----------
Total Capital(h)$1,167,439 $1,131,484 $1,123,633 $1,100,685 $1,067,376
========== ========== ========== ========== ==========
Risk-Adjusted
Assets(h) $10,135,657 $9,735,710 $9,515,107 $9,158,018 $9,157,648
Tier 1 Ratio(h) 8.80% 8.84% 9.00% 9.14% 8.78%
Tier 2 Ratio(h) 2.72% 2.78% 2.81% 2.88% 2.88%
---------- ---------- ---------- ---------- ----------
Total Capital 11.52% 11.62% 11.81% 12.02% 11.66%
========== ========== ========== ========== ==========
Leverage Ratio(h) 6.90% 6.79% 6.80% 6.67% 6.37%
Common Equity/Asset
Ratio (average) 6.56% 6.78% 7.43% 7.12% 6.88%
Total Equity(i)/Assets
Ratio (average) 7.33% 7.52% 7.43% 7.12% 6.88%
Book Value $ 13.76 $ 13.17 $ 14.28 $ 13.78 $ 13.29
(h) Current quarter is an estimate.
(i) Total equity includes shareholders' equity and Guaranteed
preferred beneficial interests in First Tennessee's subordinated
debentures.
Net Interest Margin
2Q97 1Q97 4Q96 3Q96 2Q96
------- ------- ------- ------- -------
Yield on earning assets 8.14 % 8.06 % 8.14 % 8.06 % 8.04 %
Rates paid on interest-
bearing liabilities 4.49 % 4.51 % 4.55 % 4.57 % 4.69 %
------- ------- ------- ------- -------
Net interest spread 3.65 % 3.55 % 3.59 % 3.49 % 3.35 %
Effect of interest-free sources .53 % .63 % .64 % .61 % .66 %
Loan fees .09 % .09 % .09 % .09 % .10 %
FRB interest and penalties ( .01)% ( .03)% ( .02)% ( .01)% ( .02)%
------- ------- ------- ------- -------
Net interest margin 4.26 % 4.24 % 4.30 % 4.18 % 4.09 %
======= ======= ======= ======= =======
FIRST TENNESSEE NATIONAL CORPORATION
REGIONAL BANKING GROUP HIGHLIGHTS
(Dollars in thousands, Unaudited)
2Q97 1Q97 4Q96 3Q96 2Q96
------- -------- -------- -------- --------
REGIONAL BANKING GROUP
Total Revenues 153,051 $146,279 $148,933 $141,614 $138,748
Loan Loss Provision 12,397 8,430 10,919 8,853 7,559
Operating Expenses 86,082 86,218 84,946 81,008 79,234
------- -------- -------- -------- --------
Pre-Tax Income $54,572 $51,631 $53,068 $51,753 $51,955
Retail/Commercial Bank
Total Revenues $128,222 $121,737 $124,896 $118,014 $115,596
Loan Loss Provision 5,781 1,963 4,583 3,234 2,039
Operating Expenses 73,675 73,783 73,242 69,793 67,564
------- -------- -------- -------- --------
Pre-Tax Income $48,766 $45,991 $47,071 $44,987 $45,993
Credit Card
Total Revenues $15,235 $15,170 $14,715 $14,769 $14,546
Loan Loss Provision 6,616 6,467 6,336 5,619 5,520
Operating Expenses 5,853 5,811 5,127 4,746 5,317
------- -------- -------- -------- --------
Pre-Tax Income $2,766 $2,892 $3,252 $4,404 $3,709
Key Statistics:
Outstandings $537,398 $529,197 $564,802 $537,034 $534,784
Annualized Net
Charge-offs /
Average Loans 5.15% 4.59% 4.46% 3.94% 3.98%
Trust Services
Total Revenues $9,594 $9,372 $9,322 $8,831 $8,606
Operating Expenses 6,554 6,624 6,577 6,469 6,353
------- -------- -------- -------- --------
Pre-Tax Income $3,040 $2,748 $2,745 $2,362 $2,253
Key Statistics:
Managed Assets
(FTBNA) $6,065,780 $5,700,164 $5,657,171 $5,423,824 $5,333,677
The business line financial information excludes significant
nonrecurring items, such as security gains and losses. Expenses have
been allocated based on management's best estimates, and equity has
been assigned to reflect the inherent risk in each individual
business line.
FIRST TENNESSEE NATIONAL CORPORATION
NATIONAL BUSINESS LINES HIGHLIGHTS
(Dollars in thousands, Unaudited)
2Q97 1Q97 4Q96 3Q96 2Q96
----------- ----------- ----------- ----------- ----------
MORTGAGE BANKING
Total Revenues $79,758 $70,470 $93,443 $82,482 $70,825
Loan Loss
Provision 107 4,096 313 -- --
Operating
Expenses 68,107 61,869 69,745 63,004 60,987
----------- ---------- ---------- ----------- ----------
Pre-Tax Income $11,544 $4,505 $23,385 $19,478 $9,838
Key Statistics:
Origination
Volume $2,389,664 $1,949,526 $2,378,802 $2,433,067 $2,771,878
Servicing
Portfolio $23,924,375 $23,383,506 $22,288,031 $21,698,381 $20,491,292
CAPITAL MARKETS
Total Revenues $21,203 $21,076 $24,717 $17,618 $18,517
Operating
Expenses 15,526 16,084 17,352 13,739 14,514
----------- ----------- ----------- ----------- -----------
Pre-Tax Income $5,677 $4,992 $7,365 $3,879 $4,003
Key Statistics:
Total Securities
Bought/Sold $46,007,572 $47,258,846 $54,534,714 $43,640,882 $55,118,434
Total
Underwritings $4,796,000 $6,028,000 $6,723,000 $3,691,000 $6,992,000
TRANSACTION PROCESSING
Total Revenues $19,897 $17,507 $17,492 $16,967 $15,953
Operating Expenses 14,313 14,125 13,948 13,339 13,260
----------- ----------- ----------- ----------- -----------
Pre-Tax Income $5,584 $3,382 $3,544 $3,628 $2,693
Key Statistics:
Merchant
Transactions
Processed 31,007,086 26,988,136 27,899,716 29,305,213 27,882,205
MONEY BELT
Transactions
Processed
(correspondent) 5,010,301 4,472,319 4,417,275 4,428,613 4,233,942
First Express
Transactions
Processed 87,585,406 90,818,856 91,229,168 93,155,912 96,412,243
NOTE: The business line financial information excludes significant
nonrecurring items, such as security gains and losses.
Expenses have been allocated based on management's best
estimates, and equity has been assigned to reflect the
inherent risk in each individual business line.
Mixx
Yahoo! Buzz