FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark one)
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(X)
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
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For the quarterly period ended June 30, 2003
OR
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( ) TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE |
For the transition period from _________ to _________
Commission file number 000-4491
CIK number 0000036966
FIRST TENNESSEE NATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
| Tennessee (State or other jurisdiction of incorporation or organization) |
62-0803242 (I.R.S. Employer Identification No.) |
| 165 Madison Avenue,
Memphis, Tennessee (Address of principal executive offices) |
38103 (Zip Code) |
(901)
523-4444
(Registrant’s telephone number, including area code)
None
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes x No
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act)
Yes x No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Common Stock, $.625 par value Class |
125,830,063 Outstanding on July 31, 2003 |
FIRST TENNESSEE NATIONAL CORPORATION
INDEX
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| Certifications |
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2
PART I.
FINANCIAL INFORMATION
| Item 1. |
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Financial Statements |
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The Consolidated Statements of Condition |
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The Consolidated Statements of Income |
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The Consolidated Statements of Shareholders’ Equity |
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The Consolidated Statements of Cash Flows |
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The Notes to Consolidated Financial Statements |
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This financial information reflects all adjustments that are, in the opinion of management, necessary for a fair presentation of the financial position and results of operations for the interim periods presented.
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CONSOLIDATED STATEMENTS OF CONDITION |
First Tennessee National Corporation |
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June 30 |
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December 31 |
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| (Dollars in thousands)(Unaudited) |
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2003 |
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2002 |
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2002 |
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| Assets: |
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| Cash and due from banks |
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$ |
922,268 |
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$ |
890,972 |
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$ |
1,068,110 |
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| Federal funds sold and securities purchased under agreements to resell |
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280,614 |
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225,540 |
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260,607 |
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| Total cash and cash equivalents |
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1,202,882 |
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1,116,512 |
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1,328,717 |
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| Investment in bank time deposits |
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890 |
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1,140 |
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1,906 |
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| Trading securities |
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885,569 |
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633,464 |
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893,997 |
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| Loans held for sale |
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5,851,079 |
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2,243,146 |
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4,797,565 |
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| Securities available for sale |
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2,266,751 |
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2,044,435 |
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2,419,908 |
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| Securities held to maturity (market value of $197,579 on June 30, 2003; |
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194,433 |
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362,493 |
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280,377 |
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| Loans, net of unearned income |
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12,766,889 |
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10,544,657 |
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11,345,445 |
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| Less:Allowance for loan losses |
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159,080 |
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147,417 |
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144,298 |
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| Total net loans |
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12,607,809 |
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10,397,240 |
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11,201,147 |
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| Premises and equipment, net |
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305,249 |
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247,774 |
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254,132 |
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| Real estate acquired by foreclosure |
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16,414 |
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21,499 |
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11,451 |
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| Mortgage servicing rights, net |
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419,917 |
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624,645 |
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440,482 |
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| Goodwill |
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173,750 |
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163,213 |
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164,617 |
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| Other intangible assets, net |
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32,099 |
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33,175 |
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29,648 |
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| Capital markets receivables and other assets |
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3,982,392 |
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1,927,536 |
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1,999,148 |
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Total assets |
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$ |
27,939,234 |
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$ |
19,816,272 |
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$ |
23,823,095 |
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| Liabilities and shareholders’ equity: |
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| Deposits: |
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| Interest-bearing |
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$ |
9,717,578 |
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$ |
8,875,425 |
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$ |
10,564,489 |
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| Noninterest-bearing |
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5,775,228 |
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3,520,655 |
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5,149,414 |
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| Total deposits |
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15,492,806 |
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12,396,080 |
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15,713,903 |
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| Federal funds purchased and securities sold under agreements to repurchase |
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4,255,579 |
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3,132,475 |
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3,126,350 |
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| Commercial paper and other short-term borrowings |
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668,029 |
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313,673 |
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361,208 |
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| Capital markets payables and other liabilities |
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3,999,825 |
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1,615,453 |
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1,856,347 |
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| Term borrowings |
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1,584,789 |
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650,968 |
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929,715 |
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| Total liabilities |
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26,001,028 |
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18,108,649 |
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21,987,523 |
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| Guaranteed preferred beneficial interests in First Tennessee’s junior |
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100,000 |
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100,000 |
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100,000 |
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| Preferred stock of subsidiary |
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44,442 |
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44,236 |
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44,392 |
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| Shareholders’ equity |
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| Preferred stock - no par value (5,000,000 shares authorized, but unissued) |
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— |
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Common
stock - $.625 par value (shares authorized - 400,000,000; shares |
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78,461 |
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78,397 |
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78,500 |
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| Capital surplus |
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137,122 |
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116,790 |
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119,318 |
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| Undivided profits |
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1,561,648 |
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1,335,102 |
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1,461,946 |
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| Accumulated other comprehensive income |
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16,698 |
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30,012 |
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26,487 |
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| Deferred compensation on restricted stock incentive plans |
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(12,572 |
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(7,070 |
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(5,796 |
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| Deferred compensation obligation |
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12,407 |
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10,156 |
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10,725 |
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| Total shareholders’ equity |
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1,793,764 |
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1,563,387 |
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1,691,180 |
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| Total liabilities and shareholders’ equity |
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$ |
27,939,234 |
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$ |
19,816,272 |
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$ |
23,823,095 |
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See accompanying notes to consolidated financial statements.
4
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CONSOLIDATED STATEMENTS OF INCOME |
First Tennessee National Corporation |
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Three Months Ended |
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Six Months Ended |
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| (Dollars in thousands except per share data)(Unaudited) |
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2003 |
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2002 |
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2003 |
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2002 |
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| Interest income: |
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| Interest and fees on loans |
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$ |
159,894 |
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$ |
166,322 |
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$ |
316,571 |
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$ |
333,285 |
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| Interest on investment securities: |
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| Taxable |
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25,456 |
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36,357 |
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56,430 |
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72,401 |
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| Tax-exempt |
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90 |
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196 |
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213 |
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492 |
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| Interest on loans held for sale |
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66,339 |
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32,046 |
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121,383 |
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72,463 |
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| Interest on trading securities |
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12,692 |
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11,935 |
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23,678 |
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24,906 |
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| Interest on other earning assets |
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1,328 |
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1,844 |
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2,463 |
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3,133 |
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| Total interest income |
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265,799 |
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248,700 |
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520,738 |
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506,680 |
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| Interest expense: |
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| Interest on deposits: |
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| Savings |
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281 |
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586 |
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562 |
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1,157 |
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| Checking interest and money market account |
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6,323 |
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9,954 |
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12,482 |
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20,039 |
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| Certificates of deposit under $100,000 and other time |
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14,508 |
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18,356 |
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29,808 |
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36,934 |
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| Certificates of deposit $100,000 and more |
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17,564 |
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18,308 |
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35,313 |
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39,379 |
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| Interest on short-term borrowings |
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17,443 |
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17,328 |
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31,877 |
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34,045 |
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| Interest on term borrowings |
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9,929 |
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7,002 |
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17,522 |
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13,608 |
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| Total interest expense |
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66,048 |
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71,534 |
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127,564 |
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145,162 |
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| Net interest income |
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199,751 |
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177,166 |
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393,174 |
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361,518 |
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| Provision for loan losses |
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27,501 |
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23,286 |
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54,951 |
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49,208 |
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| Net interest income after provision for loan losses |
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172,250 |
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153,880 |
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338,223 |
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312,310 |
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| Noninterest income: |
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| Mortgage banking |
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