The earnings momentum First Security Corp. generated in 1988 is continuing in 1989 as first-quarter earnings were the highest since 1983.
"First Security is in its strongest position in over six years," Chairman and Chief Executive Spencer F. Eccles told shareholders at the bank holding company's annual meeting Monday."Earnings are up, loan volume is on the increase, and non-performing assets are being continually reduced. At the same time, expenses are being controlled, and the economy continues to improve."
If he had to choose one word to describe First Security Corp. in 1989, said Eccles, that word would be "sound."
"We are safe, we're strong, we're making good progress along the track of a planned growth program . . . and we view the future with optimism," Eccles said.
On the heels of the good news, Eccles said directors had declared a regular quarterly dividend of 30 cents per share on the company's common stock, payable June 5 to shareholders of record May 19.
Citing First Security's recent acquisition of Twin Falls Bank & Trust and the federal government's plans to sell several local savings and loans, Eccles said the company wants to be in a position to acquire other financial institutions as opportunities arise, and that means increasing the price of First Security's stock.
"Now that our earnings are firmly established on the road upward, we intend to keep them moving in that direction. Earnings of 1 percent or better on assets and 15 percent or better on equity are attainable, and we intend to do just that."
Twenty-one directors were elected to the corporation's board during the meeting, including one new director, James C. Beardall, chairman, president and chief executive officer of Ogden-based Anderson Lumber Co.
Also announced was the promotion of J. Patrick McMurray, president and chief administrative officer of First Security Bank of Idaho to chief executive officer of the bank, succeeding James E. Phelps who will continue as chairman.
Eccles said net income in 1988 was $33.04 million, up from $27.03 the previous year for a 22.2 percent increase. Earnings per share were $2.58, up from $2.13 in 1987.
First quarter 1989 earnings of $9.46 million were up from $8.04 in the first three months of 1988. On a per share basis, fully diluted earnings rose from 63 cents in first quarter 1988 to 73 cents for the same period this year.
Eccles credited increased loans and a successful asset/liability management program, which improved average net interest margins from 4.42 to 4.68 percent, as a major factor in last year's earnings jump.
Also cited was the "steady, aggressive progress" First Security made last year in reducing its non-performing assets, mostly real estate. Eccles said that progress is continuing in 1989 as non-performing assets were reduced from $94.72 million on January 1 to $89.76 million on March 31.
But loan growth and reduction of non-performing assets don't automatically translate into increased profits, he said. Also needed is control of expenses.
"I am happy to report that we have done just that," Eccles said. "Despite the 34 percent increase in business generated during 1988, our non-interest expense was up only a quarter of a percent during the period."
Beardall, the new First Security Corp. director, has been with Anderson Lumber Co. for 22 years, serving in a variety of positions. He was named chief executive in 1980 and chairman in 1988.
He is a graduate of Brigham Young University and is a certified public accountant. He is a past president of the Mountain States Lumber and Building Material Dealers Association and has served as a national director of the National Lumber and Building Materials Dealers Association, representing 12 western states. He is chairman-elect of the Ogden Chamber of Commerce.
McMurray is a native of Boise and is a graduate of the University of Idaho, the American Bankers Association National Graduate School of Commercial Lending, and the Pacific Coast Banking School.