ITEM 1 Business General............................................................79 Distribution of Assets, Liabilities and Stockholders' Equity; Interest Rates and Interest Differential..............................18-20, 74-75 Investment Portfolio........................................27-28, 71 Loan Portfolio.........................24-27, 29-33, 45-46, 50-51, 77 Summary of Loan Loss Experience.............................20, 29-33 Deposits................................................28, 74-75, 77 Return on Equity and Assets........................................76 Short-Term Borrowings..............................................77
ITEM 2
ITEM 2 Properties.........................................................80
ITEM 3
ITEM 3 Legal Proceedings................................................none
ITEM 4
ITEM 4 Submission of Matters to a Vote of Security Holders..............none
PART II
ITEM 5
ITEM 5 Market for the Registrant's Common Equity and Related Stockholder Matters...................38, 68, 76
ITEM 6
ITEM 6 Selected Financial Data............................................15
ITEM 7
ITEM 7 Management's Discussion and Analysis of Financial Condition and Results of Operations.................14-40
ITEM 8
ITEM 8 Financial Statements and Supplementary Data....................73, 80
ITEM 9
ITEM 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure...........................................none
PART III
ITEM 10
ITEM 10 Directors and Executive Officers of the Registrant................82*
ITEM 11
ITEM 11 Executive Compensation..............................................*
ITEM 12
ITEM 12 Security Ownership of Certain Beneficial Owners and Management..................................*
ITEM 13
ITEM 13 Certain Relationships and Related Transactions......................*
PART IV
ITEM 14
ITEM 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K..........................................80
*First Bank System's definitive proxy statement for the 1996 Annual Meeting of Shareholders is incorporated herein by reference, other than the sections entitled "Report of the Compensation and Human Resources Committee on Executive Compensation" and "Comparative Stock Performance."
78 First Bank System, Inc. and Subsidiaries
GENERAL -- First Bank System, Inc. (the "Company") is a regional, multi-state bank holding company headquartered in Minneapolis, Minnesota. The Company was incorporated in Delaware in 1929 and owns more than 99 percent of the capital stock of each of nine banks, a savings association and seven trust companies, having 324 banking offices in Minnesota, Colorado, Wisconsin, Illinois, Montana, North Dakota, South Dakota, Iowa, Kansas, Nebraska, and Wyoming. The Company also has various nonbank subsidiaries engaged in financial services, principally in the Upper Midwest.
The banks are engaged in general commercial banking business, principally in domestic markets. They range in size from $36 million to $10.5 billion in deposits and provide a wide variety of services to individuals, businesses, industry, institutional organizations, governmental entities, and other financial institutions. Depository services include checking accounts, savings accounts, and time certificate contracts. Ancillary services such as treasury management and receivable lockbox collection are provided for corporate customers. Nine banks, a savings association, and seven trust companies provide a full range of fiduciary activities for individuals, estates, foundations, business corporations, and charitable organizations.
The Company provides banking services through its subsidiary banks to both domestic and foreign customers and correspondent banks. These services include consumer banking, commercial lending, financing of import/export trade, foreign exchange, and investment services.
The Company, through its subsidiaries, also provides services in mortgage banking, trust, commercial and agricultural finance, data processing, leasing, and brokerage services.
On a full-time equivalent basis, employment during 1995 averaged a total of 13,231 employees.
COMPETITION -- The commercial banking business is highly competitive. Subsidiary banks compete with other commercial banks and with other financial institutions, including savings and loan associations, mutual savings banks, finance companies, mortgage banking companies, credit unions, and investment companies. In recent years, competition has increased from institutions not subject to the same regulatory restrictions as domestic banks and bank holding companies.
GOVERNMENT POLICIES -- The operations of the Company's various operating units are affected by state and federal legislative changes and by policies of various regulatory authorities, including those of the several states in which they operate, the United States and foreign governments. These policies include, for example, statutory maximum legal lending rates, domestic monetary policies of the Board of Governors of the Federal Reserve System, United States fiscal policy, international currency regulations and monetary policies, and capital adequacy and liquidity constraints imposed by bank regulatory agencies.
SUPERVISION AND REGULATION -- The Company is a registered bank holding company under the Bank Holding Company Act of 1956 (the "Act") and is subject to the supervision of, and regulation by, the Board of Governors of the Federal Reserve System (the "Board").
Under the Act, a bank holding company may engage in banking, managing or controlling banks, furnishing or performing services for banks it controls, and conducting activities that the Board has determined to be closely related to banking. The Company must obtain approval of the Board before acquiring control of a bank or acquiring more than 5 percent of the outstanding voting shares of a company engaged in a "bank-related" business. Under the Act and state laws, the Company is subject to certain restrictions as to states in which the Company can acquire a bank.
On September 29, 1994, the Act was amended by The Interstate Banking and Branch Efficiency Act of 1994, which authorizes interstate bank acquisitions anywhere in the country, effective one year after the date of enactment and interstate branching by acquisition and consolidation, effective June 1, 1997, in those states that have not opted out by that date.
National banks are subject to the supervision of, and are examined by, the Comptroller of the Currency. All subsidiary banks of the Company are members of the Federal Deposit Insurance Corporation ("FDIC"), and as such, are subject to examination thereby. In practice, the primary federal regulator makes regular examinations of each subsidiary bank subject to its regulatory review or participates in joint examinations with other federal regulators. Areas subject to regulation by federal authorities include the allowance for credit losses, investments, loans, mergers, issuance of securities, payment of dividends, establishment of branches and other aspects of operations.
The Company and its saving association subsidiary are subject to the supervision of and are examined by the OTS. The savings association is a member of SAIF, which is administered and is subject to examination by the FDIC. As a saving association, the Company's subsidiary must meet the requirements of a qualified thrift lender to avoid certain restrictions relating to dividends, branching and certain new activities. As of December 31, 1995, the savings association was a "qualified thrift lender." Similar to its banking subsidiaries, the savings association is also subject to regulation by the OTS in the areas of credit losses, investments, loans, mergers, issuance of securities, payment of dividends, establishment of branches, and other aspects of operations.
First Bank System, Inc. and Subsidiaries 79
PROPERTIES -- At December 31, 1995, the Company's subsidiaries owned and operated a total of 252 facilities and leased an additional 214 facilities, all of which are well maintained.
The Company's three largest facilities are located in Denver, Minneapolis and St. Paul. In Denver, Colorado National Bank occupies approximately 70 percent of the Colorado National Bank Tower and 100 percent of the Colorado National Bank building. In Minneapolis, First Bank National Association and the Company's corporate offices occupy parts of five buildings, leasing 31 floors in First Bank Place, part of the second floor in the Pillsbury Center, and two floors in the Fifth Street Towers. The Company also occupies 10 floors in the Sixth and Marquette bank building, and six floors of the 1010 Building in Minneapolis. The Company's primary St. Paul presence is the Energy Park Operations Center, and in downtown St. Paul, where it occupies approximately one-fourth of the First National Bank Building, four floors in the First Trust Center, and approximately 70 percent of the space in the Pioneer/ Endicott building complex.
The Company is currently constructing a 150,000 square foot service center in Fargo, North Dakota. The Center will be owned by FBS, is scheduled to open in mid-1996, and will provide space for the growth of service operations.
Additional information with respect to premises and equipment is presented in Notes G and O of Notes to Consolidated Financial Statements.
Schedules to the consolidated financial statements required by Article 9 of Regulation S-X are omitted since the required information is included in the footnotes or is not applicable.
During the three months ended December 31, 1995, the Company filed the following reports on Form 8-K:
Form 8-K filed November 13, 1995, relating to the Company's announcement that it had signed a purchase agreement to merge with First Interstate Bancorp ("First Interstate").
Form 8-K/A filed on November 15, 1995, amending Form 8-K filed on August 18, 1995, which includes unaudited financial statements of FirsTier Financial, Inc. filed pursuant to Item 7(a).
Form 8-K filed November 16, 1995, which discussed the updating of the description of the Rights contained in Item 1 of the FBS Registration Statement on Form 8-A dated December 21, 1988, as amended.
Form 8-K filed November 16, 1995, which includes First Interstate's unaudited financial statements and pro forma financial information filed pursuant to Item 7.
Form 8-K filed December 13, 1995, discussing the Company's stock repurchase program.
Form 8-K filed December 15, 1995, regarding the complaint filed by the Company and Eleven Acquisition Corp. against Wells Fargo & Company.
The following Exhibit Index lists the Exhibits to Annual Report on Form 10-K.
(1)3A Restated Certificate of Incorporation, as amended. Filed as Exhibit 2.1 to Form 8-A/A-2 dated October 6, 1994.
3B By-laws.
4 [Pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, copies of instruments defining the rights of holders of long-term debt are not filed. First Bank System, Inc. agrees to furnish a copy thereof to the Securities and Exchange Commission upon request.]
(1)4A Certificate of Designation for First Bank System, Inc. Series 1990A Preferred Stock. Filed as Exhibit 4.4 to Amendment No.1 to Registration Statement on Form S-3, File No.33-42650.
(1)4B Certificate of Designation for First Bank System, Inc. Series 1991A Convertible Preferred Stock. Filed as Exhibit 4.3 to Registration Statement on Form S-4, File No. 33-50700.
(1)4C Certificate of Designation for First Bank System, Inc. Series A Junior Participating Preferred Stock, as amended. Filed as Exhibit 2.4 to Form 8-A/A-2 dated October 6, 1994.
(1)4D Rights Agreement dated as of December 21, 1988, between First Bank System, Inc. and Morgan Shareholder Services Trust Company (now known as First Chicago Trust Company of New York), as amended by Amendment No. 1 dated as of May 30, 1990, Amendment No. 2 dated as of February 17, 1993, and Amendment No. 3 dated November 9, 1995. Filed as Exhibit 4.6 to Registration Statement on Form S-4, File No. 333-0029.
(1)10A Stock Purchase Agreements dated as of May 30, 1990, among Corporate Partners, L.P.; Corporate Offshore Partners, L.P.; The State Board of Administration of Florida and First Bank System, Inc. and related documents. Filed as Exhibits 4.8-4.15 to Registration Statement on Form S-3, File No. 33-42650.
(1)(2)10B First Bank System, Inc. 1987 Stock Option Plan. Filed as Exhibit 10E to report on Form 10-K for fiscal year ended December 31, 1991.
(1)(2)10C First Bank System, Inc. Nonqualified Supplemental Executive Retirement Plan. Filed as Exhibit 10C to report on Form 10-Q for quarter ended March 31, 1995.
(1)(2)10D First Bank System, Inc. Executive Deferral Plan. Filed as Exhibit 10G to report on Form 10-K for fiscal year ended December 31, 1991.
(1)(2)10E First Bank System, Inc. Annual Incentive Plan. Filed as Exhibit 10H to report on Form 10-K for fiscal year ended December 31, 1992.
(1)(2)10F First Bank System, Inc. Independent Director Retirement and Death Benefit Plan. Filed as Exhibit 10I to report on Form 10-K for fiscal year ended December 31, 1992.
(1)(2)10G First Bank System, Inc. Deferred Compensation Plan for Directors. Filed as Exhibit 10J to report on Form 10-K for fiscal year ended December 31, 1992.
(1)(2)10H First Bank System, Inc. 1995 Executive Incentive Plan. Filed as Exhibit 10B to report on Form 10-Q for quarter ended March 31,1995.
(1)(2)10I First Bank System, Inc. Restated Employee Stock Purchase Plan. Filed as Exhibit 10L to report on Form 10-K for fiscal year ended December 31, 1991.
80 First Bank System, Inc. and Subsidiaries
(1)(2)10J Form of Change-in-Control Agreement between First Bank System, Inc. and certain officers of the Company. Filed as Exhibit 10M to report on Form 10-K for fiscal year ended December 31, 1991.
(1)(2)10K First Bank System, Inc. 1991 Stock Incentive Plan, as amended. Filed as Exhibit 10A to report on Form 10-Q for quarter ended March 31, 1995.
(1)(2)10L First Bank System, Inc. 1994 Stock Incentive Plan. Filed as Exhibit 10M to report on Form 10-K for fiscal year ended December 31, 1993.
(1)(2)10M Agreement between First Bank System, Inc. and John F. Grundhofer dated January 18, 1995. Filed as Exhibit 10O to report on Form 10-K for fiscal year ended December 31, 1994.
(1)(2)10N Deferred Income Agreement between First Bank System, Inc. and John F. Grundhofer dated November 1, 1993. Filed as Exhibit 10O to report on Form 10-K for fiscal year ended December 31, 1993.
(1)(2)10O Description of First Bank System, Inc. Stock Option Loan Policy. Filed as Exhibit 10P to report on Form 10-K for fiscal year ended December 31, 1993.
(1)(2)10P Employment Agreement dated as of April 30, 1993, by and between First Bank System, Inc. and Will F. Nicholson, Jr. Filed as Exhibit 10R to report on Form 10-K for fiscal year ended December 31, 1994.
(1)(2)10Q Employment Agreement dated as of December 31, 1994 by and between First Bank System, Inc. and Will F. Nicholson, Jr. Filed as Exhibit 10S to report on Form 10-K for fiscal year ended December 31, 1994.
(1)(2)10R Consulting Agreement dated as of January 23, 1995, by and between First Bank System, Inc. and Norman M. Jones. Filed as Exhibit 10T to report on Form 10-K for fiscal year ended December 31, 1994.
(1)10S Agreement of Merger and Consolidation, dated July 21, 1994, by and between First Bank System, Inc. and Metropolitan Financial Corporation. Filed as Exhibit 2.1 to Form 8-K filed August 5, 1994.
(1)10T Agreement of Merger and Consolidation dated August 6, 1995 by and between First Bank System, Inc. and FirsTier Financial, Inc. Filed as Exhibit 2.1 to Registration Statement on Form S-4, File No. 333-00299.
(1)10U Settlement Agreement, dated as of January 23, 1996, between First Bank System, Inc., First Interstate Bancorp and Wells Fargo & Co. Filed as Exhibit 2.1 to Form 8-K filed January 26, 1996.
11 Statement re: Computation of Primary and Fully Diluted Net Income per Common Share.
12 Statement re: Computation of Ratio of Earnings to Fixed Charges.
13 Annual Report to Shareholders for the year ended December 31, 1995.
21 Subsidiaries of the Registrant.
23 Consent of Ernst & Young LLP.
27 Financial Data Schedule.
Copies of the Exhibits will be furnished upon request and payment of the Company's reasonable expenses in furnishing the Financial Statement Schedule and Exhibits.
(1) Exhibit has heretofore been filed with the Securities and Exchange Commission and is incorporated herein as an exhibit by reference.
(2) Items that are management contracts or compensatory plans or arrangements required to be filed as an exhibit pursuant to Item 14(c) of this Form 10-K.
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 February 21, 1996, on its behalf by the undersigned thereunto duly authorized.
First Bank System, Inc. John F. Grundhofer Chairman, President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on February 21, 1996, by the following persons on behalf of the registrant and in the capacities indicated.
JOHN F. GRUNDHOFER Chairman, President, Chief Executive Officer, and Director (principal executive officer)
RICHARD A. ZONA Vice Chairman-Finance
SUSAN E. LESTER Executive Vice President and Chief Financial Officer (principal financial officer)
DAVID J. PARRIN Senior Vice President and Controller (principal accounting officer)
ARTHUR D. COLLINS, JR. Director
PETER H. COORS Director
ROGER L. HALE Director
DELBERT W. JOHNSON Director
NORMAN M. JONES Director
JOHN H. KAREKEN Director
RICHARD L. KNOWLTON Director
JERRY W. LEVIN Director
KENNETH A. MACKE Director
MARILYN CARLSON NELSON Director
EDWARD J. PHILLIPS Director
JAMES J. RENIER Director
S. WALTER RICHEY Director
RICHARD L. ROBINSON Director
RICHARD L. SCHALL Director
LYLE E. SCHROEDER Director
First Bank System, Inc. and Subsidiaries 81
EXECUTIVE OFFICERS
JOHN F. GRUNDHOFER Mr. Grundhofer, 57, has been Chairman of the Board, President and Chief Executive Officer of First Bank System since 1990.
PHILIP G. HEASLEY Mr. Heasley, 46, has served as Vice Chairman since 1993. He is responsible for retail bank products, Payment Systems, and operations and technology. In February 1996, Mr. Heasley assumed additional responsibility for consumer and small business sales and services carried out through bank branches.
RICHARD A. ZONA Mr. Zona, 51, was named Vice Chairman-Finance in February 1996, and assumed responsibility for private financial services and business banking. Mr. Zona previously served as Vice Chairman and Chief Financial Officer.
J. ROBERT HOFFMANN Mr. Hoffmann, 50, has been Executive Vice President and Chief Credit Officer since 1990.
SUSAN E. LESTER Ms. Lester, 39, was named Executive Vice President and Chief Financial Officer in February 1996. She had served as Executive Vice President, Finance, since December 1995. From May 1994 to November 1995, Ms. Lester was Executive Vice President and Chief Financial Officer of Shawmut National Corporation. Before that, she served as Executive Vice President and Controller at First Bank System.
LEE R. MITAU Mr. Mitau, 47, was named Executive Vice President, General Counsel and Secretary in 1995. Previously, he was a Senior Partner at Dorsey & Whitney P.L.L.P.
JOHN M. MURPHY, JR. Mr. Murphy, 54, has been Chairman and Chief Investment Officer, First Trust National Association, since 1990.
DANIEL C. ROHR Mr. Rohr, 49, has served as Executive Vice President of the Commercial Banking Group since 1990.
ROBERT H. SAYRE Mr. Sayre, 56, has served as Executive Vice President of Human Resources since 1990.
DAVID R. EDSTAM Mr. Edstam, 48, was named Executive Vice President and Treasurer in 1995. He previously served as Senior Vice President and Treasurer.
ELIZABETH A. MALKERSON Ms. Malkerson, 46, has been Senior Vice President of Corporate Relations since 1990.
DAVID J. PARRIN Mr. Parrin, 40, has been Senior Vice President and Controller since 1994. Previously, he was a Partner at Ernst & Young LLP.
DIRECTORS
JOHN F. GRUNDHOFER Chairman, President and Chief Executive Officer First Bank System, Inc. Minneapolis, Minnesota
ARTHUR D. COLLINS, JR.* Chief Operating Officer Medtronic, Inc. Minneapolis, Minnesota
PETER H. COORS* Vice Chairman and Chief Executive Officer Coors Brewing Company Golden, Colorado
ROGER L. HALE President and Chief Executive Officer TENNANT Minneapolis, Minnesota
DELBERT W. JOHNSON Chairman and Chief Executive Officer Pioneer Metal Finishing, Inc. Minneapolis, Minnesota
NORMAN M. JONES Chairman of the Board First Bank, fsb Minneapolis, Minnesota
JOHN H. KAREKEN Professor Emeritus of Banking and Finance Curtis L. Carlson School of Management University of Minnesota Minneapolis, Minnesota
RICHARD L. KNOWLTON Chairman The Hormel Foundation Austin, Minnesota
JERRY W. LEVIN** Chairman and Chief Executive Officer Revlon, Inc. New York, New York
KENNETH A. MACKE Macke Partners Golden Valley, Minnesota
MARILYN CARLSON NELSON Vice Chair Carlson Holdings, Inc. Minneapolis, Minnesota
EDWARD J. PHILLIPS Chairman and Chief Executive Officer Phillips Beverage Company Minneapolis, Minnesota
JAMES J. RENIER Retired Chairman of the Board and Chief Executive Officer Honeywell Inc. Minneapolis, Minnesota
S. WALTER RICHEY President and Chief Executive Officer Meritex, Inc. Minneapolis, Minnesota
RICHARD L. ROBINSON Chairman and Chief Executive Officer Robinson Dairy, Inc. Denver, Colorado
RICHARD L. SCHALL Retired Vice Chairman of the Board Dayton Hudson Corporation Minneapolis, Minnesota
LYLE E. SCHROEDER President and Chief Executive Officer Sioux Valley Hospital Sioux Falls, South Dakota
*Elected effective February 21, 1996
**Elected effective July 19, 1995
82 First Bank System, Inc. and Subsidiaries
FBS LOCATIONS*
MINNESOTA Albert Lea Alexandria (2) Amboy Anoka (2) Apple Valley Austin Babbitt Blaine Blooming Prairie Bloomington (4) Brainerd Brooklyn Center Brooklyn Park Burnsville Chisago City Cloquet Columbia Heights Cottage Grove Duluth (7) Eagan (2) East Grand Forks Eden Prairie (2) Edina (3) Elk River Fairmont Fergus Falls Forest Lake Grand Rapids Hibbing Hopkins Lamberton Little Canada Mankato (2) Maple Grove Minneapolis (15) Minnetonka (2) Monticello Moorhead New Prague Oakdale Owatonna Pine City Pine River Plymouth (2) Princeton Prior Lake Ramsey Robbinsdale Rochester (4) Sauk Rapids Shoreview St. Anthony St. Cloud (2) St. Louis Park St. Paul (6) Stillwater Virginia Wayzata West St. Paul White Bear Lake (2) Willmar Woodbury
COLORADO Arvada (2) Aspen Aurora (4) Boulder (2) Broomfield Canon City Colorado Springs (6) Denver (18) Englewood (3) Evergreen Fort Collins (2) Glenwood Springs Golden Grand Junction (2) Greeley Highlands Ranch La Junta Lakewood (4) Littleton (4) Longmont Loveland Northglenn Parker Pueblo (4) Westminster (2) Wheat Ridge
ILLINOIS Chicago (6) Des Plaines (3) Downers Grove
IOWA Altoona Alvord Ankeny Carlisle Clear Lake Council Bluffs (4) Des Moines (6) Doon Hampton Iowa Falls Knoxville Mason City (2) Nevada Pella Red Oak Rock Valley Wellman West Des Moines (2) Williamsburg
KANSAS Andover Augusta Clay Center El Dorado Emporia (2) Eureka Gardner Holton Iola Lawrence (2) Manhattan Overland Park Prairie Village Pratt Topeka (2) Wichita (4)
MONTANA Billings (2) Bozeman Butte Great Falls (3) Havre Helena Miles City Missoula (2)
NEBRASKA Beatrice Bellevue Blair Columbus David City Elkhorn Fremont (2) Gering Grand Island (2) Hastings Kearney (2) La Vista Lincoln (10) Millard Norfolk (2) North Platte Omaha (21) Scottsbluff (3)
NORTH DAKOTA Beulah Bismarck (4) Devils Lake Dickinson Fargo (5) Grafton Grand Forks (4) Jamestown Langdon Lisbon Mandan Minot (2) Valley City Wahpeton West Fargo Williston
SOUTH DAKOTA
Aberdeen Colton Hartford Humboldt Mitchell Pierre Rapid City (4) Sioux Falls (7)
WISCONSIN Brookfield Brown Deer Hudson LaCrosse Milwaukee (2) Onalaska
WYOMING Casper Cheyenne (2) Cody Evanston Gillette Green River Lander Laramie Riverton Rock Springs Sheridan Torrington Worland
CORPORATE TRUST OFFICES Billings, MT Cheyenne, WY Chicago, IL Denver, CO Des Plaines, IL Duluth, MN Fargo, ND Grand Junction, CO Los Angeles, CA Milwaukee, WI Minneapolis, MN New York, NY Portland, OR Pueblo, CO Rochester, MN San Francisco, CA Seattle, WA Sioux Falls, SD St. Paul, MN
REPUBLIC ACCEPTANCE CORP. OFFICES Des Plaines, IL Lakewood, CO Milwaukee, WI Minneapolis, MN St. Louis, MO
*First Bank System, Inc. primarily serves Minnesota, Colorado, Illinois, Iowa, Kansas, Montana, Nebraska, North Dakota, South Dakota, Wisconsin, and Wyoming through 356 banking locations and 18 nonbank offices. This includes the offices of FirsTier Financial, Inc., which FBS acquired February 16, 1996.
First Bank System, Inc. and Subsidiaries 83
CORPORATE DATA
EXECUTIVE OFFICES First Bank Place 601 Second Avenue South Minneapolis, Minnesota 55402-4302 (612) 973-1111
ANNUAL MEETING The annual meeting of shareholders will be held at the Minneapolis Convention Center, 1301 Second Avenue South, Minneapolis, Minnesota 55403, at 2 p.m. on Wednesday, April 17, 1996.
SECURITIES INFORMATION First Bank System Common Stock is traded on the New York Stock Exchange under the ticker symbol FBS and also may be found under the listing FtBkSy. The transfer agent and registrar for First Bank System is First Chicago Trust Company of New York, P.O. Box 2500, Jersey City, New Jersey 07303-2500.
DIVIDEND REINVESTMENT First Bank System shareholders can take advantage of a plan that provides automatic reinvestment of dividends and/or optional cash purchases of additional shares at market price of up to $5,000 per quarter. If you would like more information, contact First Chicago Trust Company of New York, P.O. Box 2598, Jersey City, New Jersey 07303-2598, (800) 446-2617.
INVESTMENT COMMUNITY CONTACTS John R. Danielson Senior Vice President, Investor Relations (612) 973-2261
General Information, Investor Relations (612) 973-2263 First Bank System, Inc. P.O. Box 522 Minneapolis, Minnesota 55480
FINANCIAL INFORMATION FBS news and financial results are available by fax, mail, or on-line.
Fax. To access our fax on demand service, call 1-800-758-5804. When asked, enter FBS's extension number, 312402. Enter "1" for the most current news release or "2" for a menu of recent releases. Enter your fax and phone numbers as directed. The information will be faxed to you immediately.
Mail. If you don't have access to a fax machine or prefer not to use FSB's fax- on-demand service, we will be glad to automatically mail to you our quarterly earnings news release. To get on our mailing list, please contact Corporate Relations, First Bank System, First Bank Place, Minneapolis, Minnesota 55402, (612) 973-2434.
Internet. To access information about FBS, including news releases, product information, and a list of service locations, visit our home page on the world wide web. Our address is www.fbs.com.
For additional annual reports, quarterly financial data on Form 10-Q, or information about the 1996 annual meeting of shareholders, please contact Corporate Relations, First Bank System, First Bank Place, Minneapolis, Minnesota 55402, (612) 973-2434.
COMMUNITY RESPONSIBILITY REPORT For information about FBS's community reinvestment activities, call FBS Community Relations, (612) 973-2440.
First Bank System is an Equal Employment Opportunity/Affirmative Action employer.
84 First Bank System, Inc. and Subsidiaries
Design and Typography: The Nancekivell Group / Printing: Banta Direct Marketing Group: The Press
[LOGO] First Bank System
P.O. Box 522 Minneapolis, Minnesota
GRAPHICS APPENDIX
Inside Front Cover - ------------------
Map of the United States. The 11 Midwest and Rocky Mountain states (Montana, Wyoming, Colorado, North Dakota, South Dakota, Nebraska, Kansas, Minnesota, Iowa, Wisconsin, and Illinois) in which FBS has retail banking offices are shaded.
Page 1: - -------
Graphs illustrate the following information:
Return on average common equity (percent) 1991: 14.7 1992: 12.6 1993: 15.8 1994: 17.6 1995: 21.3
Return on average assets (percent) 1991: 0.95 1992: 1.02 1993: 1.28 1994: 1.40 1995: 1.73
Earnings per share (dollars and fully diluted) 1991: 1.92 1992: 2.08 1993: 2.82 1994: 3.32 1995: 4.11
Efficiency ratio (percent) 1991: 68.3 1992: 65.2 1993: 60.4 1994: 58.1 1995: 53.3
Shareholders' equity to assets ratio (percent) 1991: 7.5 1992: 8.4 1993: 8.2 1994: 7.7 1995: 8.0
Allowance coverage of nonperforming loans ratio (percent) 1991: 120 1992: 149 1993: 208 1994: 283 1995: 401
Graphs before merger-related items and nonrecurring items.
- ------
Photograph of John F. Grundhofer, chairman, president and chief executive officer
Graph illustrates the following information: Six-year total return* (percent)
Index: 12/31/89 = 100 FBS = FBS Common Stock S&P500 = Standard & Poor's Index of 500 Stocks KBW 50 = Keefe Bruyette & Woods 50-bank index
1989: FBS/100, S&P500/100, KBW 50/100 1990: FBS/83, S&P500/97, KBW 50/72 1991: FBS/159, S&P500/126, KBW 50/114 1992: FBS/193, S&P500/136, KBW 50/145 1993: FBS/217, S&P500/150, KBW 50/153 1994: FBS/243, S&P500/152, KBW 50/145 1995: FBS/375, S&P500/209, KBW 50/232
* Capital appreciation plus dividends
$100 invested in FBS stock in 1989 would have been worth $375 at year-end 1995, compared with $232 for the KBW index of 50 banks and $209 for the S&P 500.
- ------
Table entitled "Recent Acquisitions" (assets in Millions)
BankAmerica Corporate Trust, closing date: 1Q96, location: National, assets: N/A FirsTier Financial, Inc., closing date: 1Q96, location: Nebraska, assets: 3,700 Midwestern Services, Inc., closing date: 4Q95, location: Nebraska, assets: 229 Southwest Holdings, Inc., closing date: 4Q95, location: Nebraska, assets: 195 Metropolitan Financial Corporation, closing date: 1Q95, location: Midwest, assets: 7,900 First Western Corporation, closing date: 1Q95, location: South Dakota, assets: 317
- ------
Graphs illustrate the following information:
Pie chart shows that the Retail and Community Banking Group accounts for 57 percent of FBS net income.
Net Income (Millions) 1993: 202 1994: 252 1995: 322
Net Interest Income (Millions) 1993: 949 1994: 1,021 1995: 1,052
Noninterest Income (Millions) 1993: 228 1994: 237 1995: 221
Efficiency Ratio (percent) 1993: 69.4 1994: 64.9 1995: 56.8
Graphs before merger-related items and nonrecurring items. - ------
Graphs illustrate the following information:
Pie chart shows that the Payment Systems group accounts for 15 percent of FBS net income.
Net Income (Millions) 1993: 68 1994: 78 1995: 85
Net Interest Income (Millions) 1993: 148 1994: 172 1995: 156
Noninterest Income (Millions) 1993: 157 1994: 195 1995: 261
Efficiency Ratio (percent) 1993: 43.6
1994: 46.2 1995: 49.2
Graphs before merger-related items and nonrecurring items. - -------
Graphs illustrate the following information:
Pie chart shows that the Commercial Banking group accounts for 19 percent of FBS net income.
Net Income (Millions) 1993: 105 1994: 106 1995: 111
Net Interest Income (Millions) 1993: 227 1994: 216 1995: 218
Noninterest Income (Millions) 1993: 60 1994: 58 1995: 60
Efficiency Ratio (percent) 1993: 33.7 1994: 32.8 1995: 31.9
Graphs before merger-related items and nonrecurring items. - -------
Graphs illustrate the following information:
Pie chart shows that the Trust and Investment group accounts for 9 percent of FBS net income.
Net Income (Millions) 1993: 36 1994: 35 1995: 50
Net Interest Income (Millions) 1993: 32 1994: 25 1995: 29
Noninterest Income (Millions) 1993: 173 1994: 180 1995: 211
Efficiency Ratio (percent) 1993: 71.2 1994: 71.9 1995: 66.4
Graphs before merger-related items and nonrecurring items.