Annual Report (Form 10-K), fiscal year 1993

Item 1. Business.
Old Kent Financial Corporation ("Old Kent") is a bank holding company. As of December 31, 1993, Old Kent owned directly and indirectly all of the stock of 16 commercial banks and five operating nonbank subsidiaries which have their principal offices in various cities in Michigan and Illinois.
Old Kent's business is concentrated in a single industry segment--commercial banking. Old Kent's subsidiaries offer a full range of commercial banking services. These include accepting deposits, commercial lending, consumer financing, real estate financing, equipment leasing, bank credit cards, debit cards, safe deposit services, automated teller machines, cash management, electronic banking, money transfer services, international banking services, corporate and personal trust services, personal investment and securities brokerage services, credit life insurance and other banking services.
The principal markets for these financial services are the communities within the states of Michigan and Illinois in which Old Kent subsidiaries are located and the areas immediately surrounding those communities. As of December 31, 1993, Old Kent and its subsidiaries served these markets through 213 banking offices located in and around those communities. Old Kent Bank and Trust Company, which has its headquarters in Grand Rapids, Michigan, accounted for 42% of total deposits and 45% of total loans of Old Kent and its subsidiaries on a consolidated basis as of December 31, 1993.
The principal source of revenues for Old Kent is interest and fees on loans, which accounted for 51.9% of total revenues in 1993, 53.5% in 1992, and 61.4% in 1991. Interest on securities is also a significant source of revenue, accounting for 28.9% of total revenues in 1993, 29.7% in 1992, and 23.4% in 1991.
Old Kent has had no foreign loans at any time during the last five years. The foreign activities of the Corporation primarily involve time deposits with banks and placements for domestic customers of the banks. These activities did not significantly impact the Corporation's financial condition or results of operations. More detailed information concerning foreign activities is contained in Note 20 to the consolidated financial statements in Item 8 of this report.
Effective January 1, 1993, Old Kent acquired University Financial Corporation, a one thrift holding company, headquartered in Elgin, Illinois. The acquisition was effected by a merger of University Financial Corporation with an Old Kent subsidiary corporation. As part of the transaction, the thrift merged with and into Old Kent Bank (Illinois). At
the effective date, University Financial Corporation had assets totaling approximately $275 million dollars on a consolidated basis with its thrift subsidiary having deposits of approximately $198 million. The bank merger gave Old Kent Bank new branches in Elgin, Dundee, and Hampshire, Illinois.
On March 1, 1994, Old Kent acquired Princeton Financial Corp. ("Princeton"). Princeton is a mortgage company headquartered in Orlando, Florida. It conducts a traditional mortgage lending business, originating and servicing one- to four-family residential mortgage loans. Princeton has both retail and wholesale mortgage operations. Its retail operations are conducted through its headquarters in Orlando and 13 satellite offices, all of which are located in Florida. Princeton's wholesale operations are conducted from Princeton's headquarters. For Princeton's fiscal year ended March 31, 1993, Princeton closed approximately $550 million in mortgages through its retail and wholesale operations. At December 31, 1993, Princeton had assets of $65.1 million and stockholders' equity of $5.4 million.
The respective boards of directors of Old Kent and EdgeMark Financial Corporation ("EdgeMark") have approved an Agreement and Plan of Merger dated as of November 1, 1993 (the "Plan of Merger"). Under the Plan of Merger, EdgeMark will be merged with and into Old Kent - Illinois, Inc., a wholly owned subsidiary of Old Kent. EdgeMark stockholders will receive shares of common stock of Old Kent having an aggregate value of approximately $62 million. The affirmative vote of the holders of a majority of the outstanding shares of EdgeMark common stock is required to adopt the Plan of Merger. The transaction is subject to shareholder approval, regulatory approvals and other conditions.
EdgeMark is a bank holding company located in Chicago, Illinois. At December 31, 1993, EdgeMark had, on a consolidated basis, assets of $534 million, deposits of $469 million, a net loan portfolio of $350 million and stockholders' equity of $41 million. EdgeMark owns all the stock of five commercial banks located in Chicago, Countryside, Lombard, Lockport, and Rosemont, Illinois, that operate eight banking offices in six Illinois communities. EdgeMark and its subsidiaries are engaged in the commercial banking and trust business and other related activities. The principal market for the financial services offered by EdgeMark and its subsidiaries is downtown Chicago and the surrounding metropolitan area. It is anticipated that EdgeMark's subsidiary banks in Chicago, Countryside, Lombard, and Rosemont will be consolidated with Old Kent Bank after the merger is completed.
The business of banking is highly competitive. In addition to competition from other commercial banks, banks face significant competition from nonbank financial institutions. Savings associations compete aggressively with commercial banks for deposits and loans. Credit unions and finance companies are significant factors in the consumer loan market. Insurance companies, investment firms and retailers are significant competitors for some types of business. Banks compete for deposits with a
broad spectrum of other types of investments such as mutual funds, debt securities of corporations and debt securities of the federal government, state governments and their respective agencies. The principal methods of competition for financial services are price (interest rates paid on deposits, interest rates charged on borrowings and fees charged for services) and service (convenience and quality of services rendered to customers).
Banks and bank holding companies are extensively regulated. Old Kent's subsidiary banks are chartered under state law and are supervised and regulated by the Federal Deposit Insurance Corporation ("FDIC") and either the Financial Institutions Bureau of the State of Michigan or the Commissioner of Banks and Trust Companies of the State of Illinois. Some of the banks are members of the Federal Reserve System and are supervised, examined and regulated by the Federal Reserve System. Deposits of all of the banks are insured by the FDIC to the extent provided by law.
Federal and state laws which govern banks significantly limit their business activities in a number of respects. Prior approval of the Board of Governors of the Federal Reserve System ("Federal Reserve Board"), and in some cases various other governing agencies, is required for Old Kent to acquire control of any additional banks. The business activities of Old Kent and its subsidiaries are limited to banking and to other activities which are determined by the Federal Reserve Board to be closely related to banking.
Old Kent is a legal entity separate and distinct from its subsidiary banks and other subsidiaries. Transactions between Old Kent's subsidiary banks are significantly restricted. There are legal limitations on the extent to which Old Kent's subsidiary banks can lend or otherwise supply funds to Old Kent or certain of its affiliates. In addition, payment of dividends to Old Kent by subsidiary banks is subject to various state and federal regulatory limitations. Federal and state banking laws and regulations place certain restrictions on the amount of dividends and loans a bank may make to its parent company.
Federal law contains a "cross-guarantee" provision which could result in insured depository institutions owned by Old Kent being assessed for losses incurred by the FDIC in connection with assistance provided to, or the failure of, any other insured depository institution owned by Old Kent. Under Federal Reserve Board policy, Old Kent is expected to act as a source of financial strength to each subsidiary bank and to commit resources to support each subsidiary bank. Under federal law, the FDIC also has authority to impose special assessments on insured depository institutions to repay FDIC borrowings from the United States Treasury or other sources and to establish semiannual assessment rates on Bank Insurance Fund ("BIF") member banks so as to maintain the BIF at the designated reserve ratio defined in the law.
Banks are subject to a number of federal and state laws and regulations which have a material impact on their business. These include, among others, state usury laws, state laws relating to fiduciaries, the Truth In Lending Act, the Equal Credit Opportunity Act, the Fair Credit Reporting Act, the Expedited Funds Availability Act, the Community Reinvestment Act, electronic funds transfer laws, redlining laws, antitrust laws, environmental laws and privacy laws. The instruments of monetary policy of authorities such as the Federal Reserve Board may influence the growth and distribution of bank loans, investments and deposits, and may also affect interest rates on loans and deposits. These policies may have a significant effect on the operating results of banks.
The nature of the business of Old Kent's subsidiaries is such that they hold title, on a temporary or permanent basis, to a number of parcels of real property. These include property owned for branch offices and other business purposes as well as properties taken in or in lieu of foreclosure to satisfy loans in default. Under current state and federal laws, present and past owners of real property are exposed to liability for the cost of clean up of contamination on or originating from such properties, even if they are wholly innocent of the actions which caused the contamination. Such liabilities can be material and can exceed the value of the contaminated property.
Old Kent is authorized to acquire subsidiary banks in any state in which state laws permit such acquisitions. Out-of-state bank holding companies in any state are permitted to acquire banks located in Michigan and Illinois if the laws of the state in which the out-of-state bank holding company is located authorize a bank holding company located in Michigan or Illinois to acquire ownership of banks in that state on a reciprocal basis.
In the aggregate, Old Kent and its subsidiaries had approximately 4,745 employees at December 31, 1993. Old Kent and its subsidiaries are equal opportunity employers whose affirmative action programs comply with applicable federal laws and executive orders.
The following table lists Old Kent's operating subsidiaries as of December 31, 1993:
The statistical information on the following pages further describes certain aspects of the business of the registrant.
DISTRIBUTION OF ASSETS, LIABILITIES AND SHAREHOLDER'S EQUITY; INTEREST RATES AND INTEREST DIFFERENTIAL
The changes in Old Kent's interest income and expense related to changes in balance sheet volume as well as to changes in interest rates appears in the following table:
INVESTMENT PORTFOLIO
The amortized cost of securities held-to-maturity and securities available-for-sale as of the dates indicated are summarized as follows (in thousands of dollars):
INVESTMENT PORTFOLIO (continued)
The following table shows, by class of maturities as of December 31, 1993, the amounts and weighted average yields of securities held-to-maturity and securities available-for-sale:
LOAN PORTFOLIO
For the period from January 1, 1989, to December 31, 1993, Old Kent had no foreign loans outstanding.
The following table presents the amount of loans outstanding at the indicated dates according to the type of loan:
LOAN PORTFOLIO (continued)
The following table shows the maturity of loans (excluding residential mortgages of 1-4 family residences, installment loans and lease financing) outstanding at December 31, 1993. Also provided are the amounts due after one year classified according to their sensitivity to changes in interest rates.
LOAN PORTFOLIO (continued)
The following table summarizes nonaccrual, past due and restructured loans at the dates indicated:
At December 31, 1993, the Company had $77,247,000 in domestic commercial loans for which payments are presently current, but the borrowers are currently experiencing severe financial difficulties. Those loans are subject to constant management attention and their classification is reviewed on a monthly basis.
Additional information with respect to nonaccrual and restructured loans at December 31, 1993, is as follows:
Loan performance is reviewed regularly by loan review personnel, loan officers and senior management. Loans are placed on nonaccrual status when principal or interest is past due 90 days or more and the loan is not well-secured and in the process of collection, or when reasonable doubt exists concerning collectibility of interest or principal. Any interest previously accrued but not collected is reversed and charged against current earnings.
LOAN PORTFOLIO (continued)
Foreign Outstandings: A summary of significant foreign outstandings for the three years ended December 31, 1993, is as follows:
SUMMARY OF LOAN LOSS EXPERIENCE
The following table summarizes loan balances at the end of each period and daily averages; changes in the allowance for credit losses arising from loans charged off and recoveries on loans previously charged off, by loan category; and additions to the allowance which have been charged to expense:
SUMMARY OF LOAN LOSS EXPERIENCE (continued)
SUMMARY OF LOAN LOSS EXPERIENCE (continued)
The allowance for credit losses has been allocated according to the amount deemed to be reasonably necessary to provide for the probable losses being incurred within the following categories at the dates indicated:
DEPOSITS
The daily average amounts of deposits and rates paid on such deposits for the periods indicated are:
The time remaining until maturity of time deposits (all of which are time certificates of deposit) of $100,000 or more at December 31, 1993, is as follows:
SHORT-TERM BORROWED FUNDS
Short-term borrowed funds consist of bank notes, federal funds purchased and securities sold under agreements to repurchase, and treasury tax and loan demand notes. The following amounts and rates applied during the last three years:
Item 2.



Item 2. Properties.
The executive offices of Old Kent and the main office of Old Kent Bank and Trust Company are located in an office complex in downtown Grand Rapids, Michigan. This complex consists of two interconnected buildings, including a 10-story office building. Approximately 65% of the 281,000 square feet of space in the complex is occupied by Old Kent and Old Kent Bank and Trust Company. The balance is leased to others for terms of varying lengths.
Old Kent's operations center is housed in two buildings located near Grand Rapids. The two buildings, which have a total of 340,000 square feet, are owned by Old Kent Bank and Trust Company.
Banking offices of Old Kent Bank (Illinois) in Chicago, Illinois, are located in space leased in the Sears Tower in Chicago, Illinois. The leased premises consist of approximately 25,000 square feet on the street, concourse and mezzanine levels of the building.
Old Kent's subsidiary banks conduct business from a total of 213 banking offices. These offices are located in or in the vicinity of the cities in which the banks have their main offices. Of the banking offices, 162 are owned by the banks or their subsidiaries, and 51 are leased from various independent parties for various lease terms.
Item 3.

Item 3. Legal Proceedings.
Old Kent's subsidiaries are parties, as plaintiff or defendant, to a number of legal proceedings, none of which is considered material, and all of which arose in the ordinary course of their operations.
Item 4.

Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Supplemental Item. Executive Officers of the Registrant.
Old Kent's executive officers are appointed annually by, and serve at the pleasure of, the Old Kent board of directors. Biographical information concerning executive officers who are not directors or nominated for election to the board of directors is presented below:
Martin J. Allen, Jr. (age 57) has been secretary of Old Kent since 1986 and a senior vice president of Old Kent since 1985. Prior to that, he served Old Kent in various other executive capacities. Mr. Allen is also a member of Old Kent's Management Committee.
David A. Dams (age 41) has been an executive vice president of Old Kent Bank and Trust Company since 1986. Prior to that, he served Old Kent in various other executive capacities. Mr. Dams is also a member of Old Kent's Management Committee and a director of Old Kent Financial Life Insurance Company, an Old Kent subsidiary.
E. Philip Farley (age 54) has been an executive vice president of Old Kent Bank and Trust Company since 1987. Prior to that, he served Old Kent in various other executive capacities. Mr. Farley is also a member of Old Kent's Management Committee.
Ralph W. Garlick (age 57) has been an executive vice president-senior credit officer of Old Kent since 1989. He was an executive vice president of Old Kent Bank and Trust Company from 1984 until 1989. Prior to that, he served Old Kent in various other executive capacities. Mr. Garlick is also a member of Old Kent's Management Committee.
Richard L. Haug (age 54) has been a senior vice president and general auditor of Old Kent since 1986.
Charles W. Jennings, Jr. (age 54) has been a senior vice president of human resources of Old Kent since 1984. Prior to that, he served Old Kent in various other executive capacities. Mr. Jennings is also a member of Old Kent's Management Committee.
Kevin T. Kabat (age 37) has been a senior vice president and manager of corporate operations and technology of Old Kent since 1993. He was a senior vice president and manager of corporate operations from 1990 until 1993, and a vice president and director of human resources of Old Kent Bank and Trust Company from 1986 until 1990. Prior to that, he served Old Kent in various other executive capacities. Mr. Kabat is also a member of Old Kent's Management Committee.
David L. Kerstein (age 50) became an executive vice president, retail banking, of Old Kent and Old Kent Bank and Trust Company in 1992. Prior to that, he was a senior vice president of Bank One (Texas), a bank, from 1990 until 1992, and a senior vice president of Citibank FSB (Chicago), a bank, from 1987 until 1990. Mr. Kerstein is also a member of Old Kent's Management Committee.
Leigh I. Sherman (age 45) has been a senior vice president and marketing director of Old Kent since 1989. He was formerly a senior vice president and marketing director of American Security Bank for over 5 years. Mr. Sherman is also a member of Old Kent's Management Committee.
Robert H. Warrington (age 46) has been president of Old Kent Mortgage Company, an indirect subsidiary of Old Kent, since 1993. He was a senior vice president of Old Kent Bank and Trust Company from 1988 until 1993. Prior to that, he served Old Kent in various other executive capacities. Mr. Warrington is also a director of Old Kent Mortgage Company, president and a director of Old Kent Mortgage Services Inc., Chairman of the Board and a director of Princeton Financial Corporation, and a member of Old Kent's Management Committee.
Thomas D. Wisnom (age 55) has been an executive vice president of Old Kent since 1985. Prior to that, he served Old Kent in various other executive capacities. Mr. Wisnom is also a member of Old Kent's Management Committee and is also Chairman of the Board, President and Chief Executive Officer of Old Kent Bank-Southeast.
Richard W. Wroten (age 41) has been an executive vice president and chief financial officer of Old Kent since September 1991. From 1989 until 1991 he was an executive vice president and chief financial officer of First City Bancorporation of Texas, Inc., a bank holding company, and chief financial officer and a director of First City, Texas-Houston N.A., a commercial bank. 1 Until 1989, Mr. Wroten was a partner of Arthur Andersen & Co., an accounting firm. Mr. Wroten is also a member of Old Kent's Management Committee and a director of Old Kent Financial Life Insurance Company and Old Kent Mortgage Company, Old Kent subsidiaries.
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1 On October 30, 1992, over a year after Mr. Wroten joined Old Kent, First City, Texas-Houston N.A. was placed in Federal Deposit Insurance Corporation receivership by bank regulators, and an involuntary, but uncontested, petition was filed placing First City Bancorporation of Texas, Inc., into a proceeding under Chapter 11 of the Federal Bankruptcy Code.
PART II
Item 5.

Item 5. Market for the Registrant's Common Equity and Related Stockholder Matters.
Old Kent has paid regular cash dividends every quarter since it was organized as a bank holding company in 1972. The following table summarizes the quarterly cash dividends paid to shareholders of common stock during the last two years, adjusted for a three-for-two stock split paid in September of 1992:
The earnings of Old Kent's subsidiary banks are the principal source of funds to pay cash dividends. Consequently, cash dividends are dependent upon the earnings, capital needs, regulatory constraints and other factors affecting each individual bank. Based on the projected earnings and liquidity, management expects the Corporation to declare and pay regular quarterly cash dividends on its common shares in 1994.
Old Kent Common Stock is traded over the counter and is quoted in the NASDAQ National Market System under the symbol OKEN. The following table sets forth the range of bid prices quoted on the National Market System for Old Kent Common Stock for the periods indicated, adjusted for a three-for-two stock split paid September 15, 1992. These quotations reflect inter-dealer prices, without retail mark-up, mark-downs or commission and may not necessarily represent actual transactions.
As of February 28, 1994, there were 39,469,389 shares of Old Kent Common Stock issued and outstanding, held by approximately 12,800 holders of record.
Item 6.

Item 6. Selected Financial Data.
Item 7.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
This financial review presents management's discussion and analysis of financial condition and results of operations. This discussion should be read in conjunction with the consolidated financial statements in Item 8, the selected financial data in Item 6, and the financial statistical presentation in Item 1.
Overview
Net income for 1993 was $127.9 million, the highest in Old Kent's twenty-one year history as a bank holding company. This represented a 15.1% increase over net income of $111.1 million for 1992. Fully diluted net income per share was $3.14 for 1993, up by 15.9% over the $2.71 fully diluted net income per share for 1992. Old Kent has reported increases in its annual per share earnings in each of the twenty-one years since the holding company was formed in 1972. Net income has increased at a compound annual growth rate of 10.7% over the last five years, and fully diluted net income per common share has grown at an annual compound rate of 12.4% over that same period.
Effective with the fourth quarter of 1993, the quarterly cash dividend rate on common stock was increased to $.29 per share. The new annualized rate of $1.16 per share is 11.5% greater than the rate paid in the fourth quarter of 1992. Old Kent has paid increased cash dividends in each of its twenty-one years. The compound annual growth rate for the Corporation's per share dividend payment for the last five years is 12.9% and the dividend payout ratio has averaged 34% over that same period of time.
Old Kent's corporate culture is geared toward maximizing shareholder value. The graph in the proxy statement which is in part incorporated by reference in this report compares the performance of Old Kent Common Stock with the S&P 500 and the KBW 50 indices. The total return as shown in this graph is measured using both stock price appreciation and the effect of continuous reinvestment of dividend payments. The S&P 500 index includes the performance of five hundred individual stocks selected by Standard & Poor's Corporation to be a representative indicator of a broad base of industries whose stocks are traded and available to the investing public. The KBW 50 index is based upon the stock performance of 50 large banks selected by Keefe, Bruyette & Woods, Inc., specialists in the banking and thrift industries. The total return of the KBW 50 index is calculated in the same manner as the S&P 500 index. Old Kent's stock performance on a total return basis compares favorably with the total return of the broad based S&P 500 index as well as the banking industry specific KBW 50 index. The graph indicates that an initial $100 investment in Old Kent Common Stock on December 31, 1988, would have been worth $232 on December 31, 1993, providing that all quarterly dividends paid within the intervening five year period were
reinvested in Old Kent Common Stock at the market prices in effect when dividends were paid. This increase in value is equivalent to a compound annual return of 18.4% over those five years for such an investment in Old Kent Common Stock compared to 14.5% for the S&P 500 index and 12.7% for the KBW 50 index.
The Corporation's return on average total equity in 1993 was 16.65%, up from an equity return of 16.25% for 1992. Old Kent's return on equity has averaged 15.5% over the past five years. Old Kent's return on average assets was 1.38% for 1993 compared to 1.27% in 1992, and has averaged 1.2% over the last five years.
Steady annual earnings increases have been attributable to balance sheet growth and to increases in non-interest income. Total average interest-earning assets increased by $424 million, or 5.2%, in 1993, and by $404 million, or 5.2%, in 1992. Over the last five years, total average interest-earning assets have increased at a compound annual growth rate of 4.8%. Interest-earning assets primarily consist of securities (defined herein to include those classified as available-for-sale and those classified as held-to-maturity) and loans. Average securities increased by $214 million, or 7%, in 1993, and by $669 million, or 28%, in 1992. In 1993, total loans averaged $5,167 million, up by $200 million, or 4% more than 1992. In 1992, average total loans were $4,967 million, a 4% decrease from 1991. During 1992 and, to a lesser extent, early 1993, loan demand was adversely affected by weaknesses in the national economy. Loan totals were also affected by sales of residential mortgage loans of $1,990 million in 1993, and $1,169 million in 1992.
Summary of Operating Results
The following is a summary of the major components of the Corporation's operating results for the last five years:
The following table summarizes the relative contribution to fully diluted net income per common share of the various components of net income for the last three years.
Net Interest Income
In the previous summaries, the taxable-equivalent adjustment increases tax-exempt income to an amount equivalent to interest income subject to income taxes at statutory rates. The federal income tax rate was 35% for 1993, and 34% for the prior years. The increase of $20.4 million in taxable-equivalent net interest income for 1993 is primarily due
to an increase in average total earning assets. During 1993, total average interest-earning assets increased by $424 million, or 5.2%. In that same period, total average interest-bearing liabilities increased to a lesser extent, $254 million or 3.6%.
Net interest margin is calculated by dividing taxable-equivalent net interest income by average interest-earning assets. Interest spread is the difference between the average yield on earning assets and the average cost of interest-bearing liabilities. The net interest margin was 4.80% in both 1993 and 1992. The interest spread was 4.29% for 1993, up from 4.23% for 1992. The average yield on interest-earning assets decreased to 7.74% in 1993 from 8.48% in 1992, a decrease of .74%. In contrast, the average cost of interest-bearing liabilities declined by .80%, slightly more than the asset yield. The average cost of interest-bearing liabilities was 3.45% in 1993 compared to 4.25% in 1992. As a result, the interest spread improved modestly, by .06% for the year.
The increase of $44.9 million in taxable-equivalent net interest income in 1992 is also attributable to increased average earning assets as well as a higher net interest margin and interest spread as compared to 1991. The 1992 increase in average earning assets amounted to $404 million, 5.2% more than 1991. The 1992 improvements in net interest margin and spread resulted from a decline in Old Kent's cost of interest-bearing liabilities which exceeded the decrease in yield on average earning assets. The net interest margin in 1992 was 4.80%, up from 4.47% in 1991. The net interest spread for 1992 was 4.23% compared to 3.68% for 1991. The average yield on interest-earning assets declined to 8.48% in 1992 from 9.73% in 1991, a decrease of 1.25%. However, the cost of interest-bearing liabilities declined more, by 1.80%. The average cost of interest-bearing liabilities decreased to 4.25% in 1992 from 6.05% in 1991. Hence, the interest spread improved by .55% in 1992 as compared to 1991.
Interest rates were relatively stable during 1993 and, on average, down slightly from 1992. In this environment, repricing of interest-earning assets and interest-bearing liabilities tended to decrease asset yields and liability costs as described above.
As shown in the table above, interest rates trended downward in 1992 as they had in 1991. The decreases were principally due to the effects of a weakened national economy and the monetary policies of the Federal Reserve System. The downward interest rate cycle had a greater impact on the Corporation's borrowing costs than it had on its rates on earning assets, thus leading to improvement in the net interest margin and interest spread. Borrowing costs were held down throughout the banking
industry by soft loan demand while Old Kent's asset/liability management disciplines served to limit the relative decline in earning asset yields.
There are a number of factors which affect net interest income, including the mix of interest-earning assets, the mix of interest-bearing liabilities, and the interest rate sensitivity of the various categories. As of December 31, 1993, Old Kent's management believes that the Corporation is essentially neutral to changes in interest rates. This means that net interest income is not expected to be materially impacted by upward or downward movements in prevailing interest rates within anticipated ranges. See "Liquidity and Interest Rate Sensitivity."
Analysis of Net Interest Income
The following table allocates net interest income to interest-earning assets by showing how much was attributable to interest-bearing liabilities, and how much was attributable to non-interest-bearing liabilities and equity capital. The interest spread on earning assets funded by interest-bearing liabilities is simply the difference between the average yield on earning assets and the average cost of interest-bearing liabilities. The interest spread on earning assets funded by non-interest-bearing liabilities and equity is the average yield on earning assets.
The following table shows the relative importance of changes in interest spread, earning asset volumes and changes in funding sources:
Loan Portfolio
As a financial intermediary, the acceptance and management of credit risk is an integral part of Old Kent's business activities. The Corporation has established strict credit underwriting standards. These standards include a policy of granting loans only within Old Kent's defined market areas and prohibition of foreign loans. Lending standards are codified in a comprehensive lending policy which is uniform throughout the organization. Old Kent's lending staff is highly skilled and experienced. The Corporation's conservative lending philosophy is implemented through strong administrative and reporting requirements. Old Kent maintains a centralized, independent loan review function which monitors asset quality at each of Old Kent's subsidiary banks. The Corporation also employs a centralized group of specialists which assists the subsidiary banks in resolving troubled loans.
One of Old Kent's strengths is its diversified loan portfolio. Nearly one-half of Old Kent's loan assets are comprised of credits granted to consumers in the form of residential mortgages and a variety of other consumer credit products, such as credit cards, student loans, and other open and closed-end consumer financings.
Loans to commercial borrowers represent approximately one-half of Old Kent's loan portfolio. These loans are grouped by their nature and industry diversification as non-real estate related and as real estate related.
At December 31, 1993, Old Kent's commercial loan portfolio, excluding real estate related loans, approximated $1.4 billion, or about 26% of total loans. Loans to manufacturers represented the largest component at only 28% of total non-real estate commercial loans. These loans are diversified among a large number of borrowers who produce a wide variety of durable and non-durable goods.
Commercial real estate and construction loans at December 31, 1993, aggregated approximately $1.3 billion, or 24%, of total loans. These loans have been grouped as owner-occupied (borrowers who occupy and utilize the loan related property in their respective businesses) and as non-owner-occupied (borrowers whose principal purpose of ownership lies in the production of rental receipts from the related property). As indicated, loans to the various categories of owner-occupied properties were 35% of commercial real estate and construction loans and loans for non-owner occupied properties were 65% of that total. Non-owner occupied loans totaled $0.8 billion, or 15% of total loans, and are distributed over a diverse base of borrowers. The largest grouping within non-owner-occupied loans was housing related loans at 21% of total commercial real estate and construction loans.
Old Kent has no foreign loans. In addition, Old Kent's policy is to be highly restrictive in granting credit to borrowers in businesses which are highly cyclical, such as agriculture and petroleum production, and the Corporation is extremely selective in participating in loan syndications.
Provision for Credit Losses
The provision for credit losses is the amount added to the allowance for credit losses to absorb probable credit losses. The amount of the credit loss provision is determined by management after reviewing the risk characteristics of the loan portfolio, historical credit loss experience and economic conditions. These determinations are reviewed by Old Kent's centralized, independent loan review function which monitors the credit quality of the Corporation's loan portfolio through its uniform procedures, credit grading and reporting systems.
The following table summarizes the credit loss provisions, net credit losses and the allowance for credit losses for the last five years:
The provision for credit losses for 1993 was $23.7 million less than that of 1992 as a result of credit quality improvements. The improved credit quality was evidenced by a $7.8 million, or 32.5%, reduction in net credit losses and by a 21% decrease in total nonperforming assets to $68.2 million as shown below. At December 31, 1993, the allowance for credit losses stood at $140.7 million, having been increased by $17.8 million. This represented the amount by which the provision for credit losses exceeded net credit losses charged to the allowance, and by the $2.1 million allowance acquired with University Financial Corporation. At December 31, 1993, the ratio of the allowance to total nonperforming assets was 206%. Over the past five years, the Corporation's actual loss experience on residential real estate loans has been negligible. At December 31, 1993, the ratio of the allowance to total loans exclusive of residential real estate loans was 3.67%.
During 1992, Old Kent's management, because of its recognition of a continued weak economic environment and its continuous reassessment of the credit quality of its loan portfolios, determined that a higher level of allowance for credit losses was prudent. As a result, the Corporation's provision for credit losses exceeded actual net credit losses by $33.8 million and represents the amount by which the Corporation's allowance for credit losses increased between December 31, 1992, and the preceding year-end date. This addition to the allowance for credit losses brought the allowance up to $120.8 million, or 2.46% of total loans at December 31, 1992.
Nonperforming Assets
The following is a summary of nonperforming assets for the last five years:
The following table summarizes the changes in nonperforming assets during 1993:
Loans past due 90 days or more, but for which interest income continues to be recognized, are not included in the Corporation's nonperforming assets. The following table summarizes such loans for the last five years:
The loan portfolio has been reviewed and analyzed for the purpose of estimating probable credit losses. The management of Old Kent has concluded that the allowance for credit losses at December 31, 1993, is adequate to absorb probable credit losses inherent in the loan portfolio.
Old Kent's policy dictates that specifically identified credit losses be recognized immediately by a charge to the allowance for credit losses. This determination is made for each loan at the time of transfer into nonperforming status after giving consideration to collateral value and the borrower's ability to repay loan principal. Since the Corporation immediately recognizes losses on its nonperforming assets, it does not attach to them specific amounts from the allowance for credit losses. Because the ultimate collection of interest of Old Kent's nonperforming assets is in doubt, no interest income is recognized on these assets, and virtually all payments received are recorded as a reduction of principal.
Other Income
Total non-interest income increased $18.7 million, or 14.6%, in 1993. Excluding the impact of gains on securities transactions and non-recurring revenue, the increase was $20.8 million, or 17.0%, for the year. The increase in total non-interest income in 1992, excluding securities transactions, was $16.3 million, or 15.4%.
Trust activities contribute a significant amount of revenue for Old Kent and represent the largest category of non-interest income. Reported trust fees increased $1.8 million, or 4.8%, in 1993. This compares with an increase of $3.1 million, or 8.8%, in 1992. The 1991 decrease is attributable to the decline in fees related to a marginally-performing trust processing business which Old Kent sold in early 1992. The disposal of this business had a favorable impact on net income. Excluding fees attributable to this activity, revenue related to Old Kent's continuing trust products and services has risen by 14.5% in 1992 and by 6.0% in 1991. Trust fees have been enhanced by new business development. First year fees resulting from new account relationships were up over 9% in 1993 and up by nearly 20% in 1992. The new business
relationships established in these years will also favorably influence subsequent periods. The continued favorable performance in Old Kent's investment management products also had a positive influence on trust fee income in 1993 and 1992. During 1993, assets managed for these products increased by 14%.
Service charges on deposit accounts increased by nearly $3.5 million in 1993, an increase of 13.0%. This compares to an increase of $1.3 million, or 5.1% in 1992. The increase is partially due to an expanded account base resulting from Old Kent's acquisitions of financial institutions and branch banking sites in recent years. It is also due to the Corporation's continuing focus on improving non-interest revenues.
Net gains on sales of securities during 1993 were $1.6 million compared to $5.7 million in 1992 and $7.4 million in 1991. For further discussion, refer to "Securities Available for Sale."
The low rate environment during 1993 and 1992 caused an increase in demand for loan refinancings. As a result, revenues from mortgage banking activities improved. These activities include the origination and acquisition of residential mortgage loans, a large portion of which are intended to be sold in the secondary market and to be serviced by Old Kent for the purpose of generating fee income. Sales of these loans usually result in the recognition of gains.
The following table summarizes the Corporation's mortgage banking activity for the last five years:
At December 31, 1993, Old Kent had $475 million of residential mortgage loans held-for-sale. At that same date, the Corporation also had outstanding commitments to sell $510 million of such loans in 1994.
Approximately $1 million of gains are expected to be realized in 1994 on fulfillment of those outstanding sales commitments.
The following table summarizes the Corporation's revenue from its mortgage banking activities:
Gains on sales of residential mortgages in 1993 were $20.8 million, up by 41.7% from the amount realized in the preceding year. The 1992 gains totaled $14.7 million, 125.5% more than the 1991 gains. Old Kent's management expects that demand for refinancing of residential mortgages in 1994 will be less than that of 1993. Hence, total gains on the sales of residential mortgage loans may be less than those realized during 1993. Revenue from the Corporation's mortgage servicing activities was $9.4 million in 1993, 49.6% better than that of the preceding year. As shown below, this increase is due to growth in Old Kent's third party servicing portfolio over the past few years. In 1992, mortgage servicing revenue totaled $6.3 million and represented an 18.7% improvement over that of 1991. Old Kent anticipates that mortgage servicing revenues will be enhanced in 1994 due to recent growth in its third party servicing portfolio and, once completed, its acquisition of Princeton Financial Corporation.
Other expenses included the expense for the amortization of purchased mortgage servicing rights. In 1993, this expense significantly increased to $5.2 million from $0.1 million in 1992. The primary reason for this increase was amortization of servicing rights acquired with University Financial Corporation on January 1, 1993. The amortization of this asset was also influenced by the effects of prepayments. Notes 1 and 9 to the consolidated financial statements contain further information regarding purchased mortgage servicing rights.
The following table lists the aggregate balances of residential mortgage loans serviced by Old Kent as of the dates indicated. During 1993, residential mortgage loans serviced for third parties increased by approximately $1.5 billion. This increase included the effect of the Corporation's January 1, 1993, purchase of University Financial Corporation (Elgin, Illinois), which at the time of acquisition serviced approximately $827 million of residential mortgages for third parties. On March 1, 1994, Old Kent acquired Princeton Financial Corp. (Orlando, Florida). At December 31, 1993, Princeton serviced approximately $340 million of residential mortgage loans for third party investors.
Merchant discount and fees from credit card transactions totaled $16.4 million in 1993, up by 21.1% from 1992. The primary reasons for this increase have been growth in the Corporation's merchant customer base and improved pricing practices. In 1992, these revenues totaled $13.5 million and represented a 10.7% increase over the 1991 amount.
Transaction processing fees include items such as fees and commissions on money orders and traveler checks, foreign exchange fees, check cashing and collection charges. These revenues totaled $7.2 million in 1993, up by $1.0 million or 16.3% from 1992. This increase included a $0.8 million increase in commission revenue on Old Kent's sales of third party money order products; until 1992 Old Kent offered its own money order products which enhanced net income by acting as a source of interest-free funding. In 1992, transaction processing fees amounted to $6.2 million and represented a $1.2 million, or 22.9% increase over 1991. This included $1.0 million of increase related to commissions in the initial year (1992) of sales of third party money order products.
Trading account gains were $1.6 million in 1993, compared to $1.9 million in 1992 and $2.6 million in 1991. The trend reflects a lower level of trading account activity both with customers and for the Corporation's own account.
During 1990, Old Kent's banks began leasing space at their various Michigan sites to an unrelated company which offers annuity and mutual fund products to Old Kent customers. As a result, this lease revenue has risen over the last few years.
The following table summarizes the major categories of other income for the last five years:
Other Expenses
Salaries and employee benefits represent the largest category of non-interest expense. These personnel costs increased by $13.4 million, or 10.2%, in 1993, largely due to staffing increases associated with acquisitions over the last two years. This compares with an increase of $2.8 million, or 2.2%, in 1992. Old Kent measures its staff size in terms of full-time equivalent ("FTE") employees. Full-time equivalency expresses staff size by translating the efforts of part-time employees and over-time hours into the equivalent efforts of full-time employees. At December 31, 1993, Old Kent employed 4,745 persons on an "FTE" basis. This compares to 4,570 and 4,610 persons at December 31, 1992 and 1991, respectively.
Occupancy expense increased $2.4 million, or 12.2%, in 1993. This compares with a decrease of $0.9 million, or 4.1%, in 1992. Key influences to the 1993 increase were: (a) the effect of the acquisitions which occurred in late 1992 and early 1993; (b) the mid 1993 expansion of Old Kent's Corporate Service Center (Grand Rapids, Michigan); and (c) a reduction in sublet rental income. The 1992 decrease is primarily due to a reduction in housing requirements at Old Kent's downtown Chicago, Illinois, banking offices. This benefit was partially offset in 1992 by a loss,
comparable in amount, which recognized the expense of future lease payments associated with the space vacated by Old Kent Bank (Illinois).
In 1993, equipment expense increased by $1.8 million, or 10.9%. In 1992, equipment expense decreased slightly, by 0.8%, from 1991. A portion of the 1993 increase related to the previously mentioned acquisitions, the remainder related to expanded usage of technological advances to either reduce operating costs (e.g. data storage using optical technology rather than hardcopy imagery) or to enhance business effectiveness (e.g. enhanced branch bank automation). During the first quarter of 1993, Old Kent recognized a nonrecurring charge of $1.5 million to reflect a loss on the cancellation of a data processing equipment lease. This coincided with the installation of more advanced technology intended to improve efficiency and reduce operational costs.
Included in other expense for the last three years are charges which Old Kent views as nonrecurring in nature. These charges are as follows for the years indicated:
The 1992 charge of $2.3 million shown above for the establishment of a non-loan loss reserve was offset in 1993 by $2.1 million of nonrecurring revenue. This revenue reflected substantial recovery of the amounts originally at risk of loss on December 31, 1992.
The deposit insurance assessment of the Federal Deposit Insurance Corporation (FDIC) increased negligibly in 1993, by 1.5%. In 1992, this cost rose by $1.7 million, or 12.0%. In 1993, Old Kent's subsidiary banks were subjected to the same rate of assessment as they were in 1992. Hence, the modest increase for 1993 related entirely to the amount of deposits on which the assessment is based. In 1992, only a small part of the increase related to growth in the Corporation's deposit base. The primary reason for the increase was an 8.2% increase in the rate of assessment (as shown in the table below):
The following table summarizes the major categories of other expenses for the last five years:
In 1993, severance benefits costs of $956 thousand were primarily the result of Old Kent's decision to close certain branch banking sites. These closures are expected to enhance future profitability by enabling the Corporation to more efficiently provide customer service.
Income Taxes
The income tax provision was $65.7 million in 1993, compared to $52.9 million in 1992, and $40.4 million in 1991. Income tax expense as a percentage of income before income taxes was 33.9% in 1993. This compares with 32.2% in 1992, and 30.3% in 1991. Effective January 1, 1993, the Corporation adopted the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes." The statement calls for a balance sheet approach in determining income tax expense. Old Kent's financial statements for 1992 and preceding years reflected income taxes calculated under the deferred method, which was an income statement approach. The statutory federal income tax rate for Old Kent was 35% for 1993, and 34% for 1992 and 1991. The one percent increase in the federal tax rate for 1993 caused an increase in income taxes of approximately $1.9 million. The cumulative effect of implementing SFAS No. 109 in 1993 was an increase in income taxes of $1.9 million. A reconciliation of income taxes calculated at the statutory rates and income tax expense appears in Note 15 to the consolidated financial statements in Item 8.


Item 8. Financial Statements and Supplementary Data.
Report of Independent Public Accountants
To the Shareholders and the Board of Directors of Old Kent Financial Corporation:
We have audited the accompanying consolidated balance sheets of Old Kent Financial Corporation (a Michigan corporation) and subsidiaries as of December 31, 1993 and 1992, and the related consolidated statements of income, cash flows and shareholders' equity for each of the three years in the period ended December 31, 1993. These financial statements are the responsibility of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Old Kent Financial Corporation and subsidiaries as of December 31,1993 and 1992, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 1993, in conformity with generally accepted accounting principles.
/s/ Arthur Andersen & Co.
Chicago, Illinois,
January 18, 1994
Consolidated Financial Statements
The accompanying notes to consolidated financial statements are an integral part of these statements.
The accompanying notes to consolidated financial statements are an integral part of these statements.
Consolidated Statements of Cash Flows
The accompanying notes to consolidated financial statements are an integral part of these statements.
The accompanying notes to consolidated financial statements are an integral part of these statements.
Notes to Consolidated Financial Statements
Note 1. Summary of Significant Accounting Policies
The consolidated financial statements have been prepared in conformity with generally accepted accounting principles and reporting practices prescribed for the banking industry. A description of significant accounting policies follows:
Basis of Presentation
The consolidated financial statements for Old Kent (The Corporation) include the accounts of Old Kent Financial Corporation (Parent Company) and its wholly owned subsidiaries. Significant intercompany balances and transactions have been eliminated in consolidation.
Cash Equivalents
Old Kent has defined cash and cash equivalents as those amounts included in the consolidated balance sheets as "cash and due from banks, federal funds sold and resale agreements."
Trading Account Securities
Trading account securities, which primarily consist of debt securities, are carried at market value. Gains and losses on trading activities are included in other income in the consolidated statements of income.
Securities Available-for-Sale
Securities available-for-sale includes those securities which might be sold as part of Old Kent's management of interest rate risk, in response to changes in interest rates, prepayment or credit risk or due to desire to increase capital or liquidity. While Old Kent has no current intention to sell these securities, they may not be held for long-term investment. Securities available-for-sale were carried at the lower of aggregate market or cost adjusted for amortization of premium and accretion of discount computed on the interest method over the terms of the securities. Gains and losses on sales of such securities are determined using the specific identification method and are classified as other income in the consolidated statements of income. Adjustments to carrying value resulting from unrealized aggregate market value losses are classified as other income in the consolidated statements of income. Effective January 1, 1994, Old Kent will adopt the provisions of Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities" (see Note 4).
Securities Held-to-Maturity
Securities held-to-maturity are stated at amortized cost. Designation as such a security is made at the time of acquisition and is based on the intent and ability to hold the security for long-term investment. Gains and losses on disposition are based on the net proceeds and the adjusted carrying amount of the securities sold, using the specific identification method. Gains and losses are included in other income in the consolidated statements of income.
Interest Rate Swaps
The Corporation enters into interest rate swap contracts as a means of managing the variability between interest income and interest expense. Income and expense associated with swap transactions is accrued over the periods prescribed by the contracts.
Mortgage Banking Activities
The Corporation routinely sells to investors its originated residential mortgage loans, as well as those acquired from third parties. The Corporation typically retains the servicing rights related to the mortgages sold. Gains on sales of mortgages are recorded to the extent proceeds exceed the carrying value of the loans after allowing for the recognition of a normal servicing fee over the estimated lives of the loans. Mortgage loans held-for-sale are carried at the lower of cost or market, which is determined under the aggregate method. The carrying value of such loans is adjusted by gains and losses associated with the corresponding financial instruments used to hedge against increases in interest rates.
Old Kent capitalizes the cost of servicing rights acquired from independent sources. Amortization of purchased mortgage servicing rights is recorded over the estimated lives of the related loans. The Corporation evaluates the recoverability of each year's purchased mortgage servicing rights separately considering such factors as estimated prepayment rates, current economic conditions and other portfolio characteristics and, if necessary, adjusts the carrying value to reflect net realizable value.
Loans
Except for residential mortgages held-for-sale, loans are stated at their principal amount outstanding, net of unearned income. Loan performance is reviewed regularly by loan review personnel, loan officers and senior management. A loan is placed on nonaccrual status when principal or interest is past due 90 days or more, and the loan is not well secured and in the process of collection, or when, in the opinion of management, there is sufficient reason to doubt collectibility. Interest
previously accrued, but not collected, is reversed and charged against interest income at the time the loan is placed on nonaccrual status.
Payments received on nonaccrual loans are recorded as principal reductions if principal repayment is doubtful. Loans are returned to accrual status when principal and interest payments are brought current and collectibility is no longer in doubt. Interest income on restructured loans is recognized according to the terms of the restructure, subject to the above described nonaccrual policy.
Certain commitment and loan origination fees are deferred and amortized as an adjustment of the related loan's yield over its contractual life using the interest method, or other methods which approximate the interest method. All remaining commitment and loan origination fees and all direct costs associated with originating or acquiring loans are recognized currently, which is not materially different than the prescribed method.
Allowance for Credit Losses
The allowance for credit losses is maintained at a level that, in management's judgment, is adequate to absorb probable credit losses. The amount is based on management's specific review and analysis of the loan portfolio, as well as evaluation of the effects of current economic conditions on the loan portfolio.
This process is based on estimates, and ultimate losses may vary from current estimates. As changes in estimates occur, adjustments to the level of the allowance are recorded in the provision for credit losses in the period in which they become known.
Leasehold Improvements, Premises and Equipment
Leasehold improvements, premises and equipment are stated at original costs, less accumulated depreciation and amortization computed on the straight-line method over the estimated useful lives of the assets or terms of the leases, whichever period is shorter. For income tax purposes, minimum lives and accelerated methods are used.
Other Real Estate Owned
Other real estate owned consists of properties acquired in partial or total satisfaction of debt and properties treated as in-substance foreclosures. Other real estate owned is stated at the lower of the related loan value or fair value. Losses arising at acquisition are charged against the allowance for credit losses. Reductions in fair value subsequent to acquisition are recorded in other expense in the consolidated statements of income, while any gains realized on the disposition of such properties are included in other income.
Intangible Assets
Goodwill, representing the cost of investments in subsidiaries in excess of the fair value of the net assets at acquisition, is amortized over periods ranging from ten to twenty years. Other acquired intangible assets, such as those associated with acquired core deposits, are amortized over periods not exceeding fifteen years.
Trust Assets
Property, other than cash deposits, held in a fiduciary or agency capacity is not included in the consolidated balance sheets, since such assets are not owned by Old Kent.
Pension Benefits
A defined benefit pension plan covers substantially all employees. The plan provides for normal and early retirement, deferred benefits for vested employees and, under certain circumstances, survivor benefits in the event of death. Benefits are based on the employees' years of service and their five highest consecutive years of compensation over the last ten years of service. The proportion of average compensation paid as a pension is determined by age and length of service, as defined in the plan. Contributions to the plan satisfy or exceed the minimum funding requirement of the Employee Retirement Income Security Act (ERISA). Assets held by the plan consist primarily of investments in several of Old Kent's collective investment trust funds and mutual funds.
Old Kent also maintains a noncontributory nonqualified pension plan for certain participants whose retirement benefit payments under the qualified plan are expected to exceed the limits imposed by ERISA. Old Kent maintains nonqualified trusts, referred to as "rabbi" trusts, primarily to fund and secure the benefits in excess of those permitted in certain of the Old Kent qualified pension plans. These arrangements offer certain officers and directors of the Corporation a degree of assurance for ultimate payment of benefits. The assets remain subject to the claims of creditors of Old Kent and are not the property of the employees. Hence, they are accounted for as assets of the Corporation in the consolidated balance sheets.
Retirement Savings Plans
Old Kent maintains a defined contribution retirement savings plan covering substantially all employees. The Corporation's contribution is equal to 50% of the amount contributed by the participating employees. Old Kent's contribution is limited to a maximum of 3% of base wages as described under terms of the plans. The estimated contribution by Old Kent is charged to expense during the year in which the employee contribution is
received and is included in employee benefits in the consolidated statements of income.
Income Taxes
Effective January 1, 1993, the Corporation adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes." SFAS No. 109 required a change from the deferral method of accounting for income taxes of Accounting Principles Board Opinion No. 11 to the asset and liability method of accounting for income taxes. Under the asset and liability method of SFAS No. 109, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using the enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be reversed. Old Kent and its subsidiaries file a consolidated federal income tax return.
Income per Common Share
Primary earnings per common share are computed by dividing net income by the weighted average number of common shares outstanding and common equivalent shares with a dilutive effect. Common equivalent shares are shares which may be issuable to employees upon exercise of outstanding stock options.
Fully diluted earnings per common share are determined on the assumption that the weighted average number of common shares and common equivalent shares outstanding is further increased by conversion of the convertible debentures. Net income is increased by the after tax interest expense related to convertible debentures.
Reclassification
Certain reclassifications have been made to prior periods' financial statements to place them on a basis comparable with the current period's financial statements.
Note 2. Acquisitions
Effective January 1, 1993, Old Kent acquired all of the outstanding common stock of University Financial Corporation (Elgin, Illinois) for approximately $12.5 million in cash. University Financial Corporation owned First Federal of Elgin, F.S.A. which, upon acquisition, was merged into Old Kent's Illinois banking subsidiary. When acquired, University Financial Corporation had assets of approximately $275 million and deposits of approximately $198 million. This acquisition was accounted for as a purchase. If this purchase had been effective January 1, 1992, there would have been no material effect on the consolidated results of operations or financial condition.
In August 1993, Old Kent purchased a retail banking site located in Southfield, Michigan, and its related deposits of approximately $18 million. This acquisition became a branch of Old Kent Bank - East (Brighton, Michigan).
In September 1992, the Corporation acquired five banking offices, and their related deposits of approximately $53 million, in the Lansing, Michigan area from a federal savings bank for approximately $4.6 million in cash. This acquisition was accounted for as a purchase. If this purchase had been effective January 1, 1991, there would have been no material effect on the consolidated results of operations or financial condition for 1992 or 1991.
Pending at December 31, 1993, is Old Kent's acquisition of EdgeMark Financial Corporation (Chicago, Illinois). At December 31, 1993, EdgeMark Financial Corporation (EdgeMark) had assets of approximately $534 million and deposits of approximately $469 million. Old Kent expects to exchange approximately $62 million of its common stock for all the shares of EdgeMark. In a related transaction, Old Kent intends to repurchase a similar number of its shares in the open market. The acquisition is subject to approval by EdgeMark shareholders, regulatory authorities and other customary conditions. Both the acquisition and stock repurchase are expected to be completed by June 30, 1994. The acquisition of EdgeMark will be accounted for as a purchase, and is not expected to have a material effect on Old Kent's future results of operations or financial condition.
On March 1, 1994, Old Kent purchased Princeton Financial Corp. (Orlando, Florida). Princeton Financial Corp. (Princeton) is a mortgage company which originates and sells residential mortgages, while retaining a substantial portion of the related servicing rights. At December 31, 1993, Princeton had assets of approximately $65 million and serviced loans of approximately $340 million for third party investors. Princeton will be acquired in a cash transaction which is expected to occur on, or about, March 1, 1994. This acquisition will be accounted for as a purchase, and is not expected to have a material effect on Old Kent's future results of operations or financial condition.
Note 3. Cash and Due From Banks
The Federal Reserve requires the banking subsidiaries to maintain certain average reserve balances. These average reserves approximated $56 million during 1993 and $38 million during 1992.
Note 4. Securities Available-for-Sale
The following summarizes amortized cost and market value of securities available-for-sale:
The amortized cost and market value of securities available-for-sale at December 31, 1993, are shown below by their contractual maturity. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay the obligation with or without call or prepayment penalties.
Effective January 1, 1994, the Corporation will adopt the provisions of Statement of Financial Accounting Standards ("SFAS") No. 115, "Accounting for Certain Investments in Debt and Equity Securities." This statement requires that "securities available-for-sale" be carried on the balance sheet at fair value, with corresponding (after tax) valuation adjustments included in shareholders' equity. As of December 31, 1993, and for prior periods, Old Kent carried these assets at the lower of amortized cost or aggregate market value. The Corporation's adoption of SFAS No. 115 will have the effect of increasing the carrying value of securities available-for-sale by approximately $51.1 million and shareholders' equity by approximately $33.2 million.
The following summarizes amortized cost and market value of securities available-for-sale at the previous year-end:
Note 5. Securities Held-To-Maturity
The following summarizes amortized cost and market value of securities held-to-maturity:
The amortized cost and market value of securities held-to- maturity at December 31, 1993, are shown below by their contractual maturity. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay the obligation with or without call or prepayment penalties.
Securities having an amortized cost of $861.2 million at December 31, 1993, were pledged to secure public and trust deposits and for other purposes, as required by law.
The following summarizes amortized cost and market value of securities held-to-maturity at the previous year-end:
Note 6. Loans and Nonperforming Assets
The following summarizes loans:
During 1993, 1992, and 1991, Old Kent originated and acquired residential mortgage loans totaling $2,386 million, $1,344 million, and $721 million, respectively. Old Kent also sold residential mortgage loans aggregating $1,990 million, $1,169 million and $538 million in 1993, 1992 and 1991, respectively, while retaining a substantial portion of the servicing rights associated with those loans.
At December 31, 1993, Old Kent had outstanding commitments to sell residential mortgage loans of approximately $510 million. Also at that date, the Corporation's total loans included approximately $475 million of residential mortgage loans whose characteristics would enable Old Kent to fulfill outstanding sales commitments.
Loans made by Old Kent to its directors and executive officers, including their family members and associated entities, aggregated $174 million and $116 million at December 31, 1993 and 1992, respectively. During 1993, new loans and other additions amounted to $192 million and repayments were $134 million. These loans were made in the ordinary course of business under normal credit terms, including interest rate and collateralization and do not represent more than a normal risk of collection.
The table below summarizes nonperforming assets:
Loans past due 90 days or more, but for which interest income continues to be recognized, totaled $9.0 million and $9.9 million at December 31, 1993 and 1992, respectively. Gross interest income that would have been recorded in 1993 for nonaccrual and restructured loans as of December 31, 1993, assuming interest had been accrued throughout the year in accordance with original terms, was $5.4 million. The comparable total for 1992 was $6.7 million. The amount of interest included in income on these loans was $1.1 million and $1.9 million in 1993 and 1992, respectively.
Although Old Kent has a diversified loan portfolio, a substantial natural geographic concentration of credit risk exists within the Corporation's defined customer market areas. These geographic market areas are the State of Michigan, the greater Grand Rapids, Michigan area, and the Chicago, Illinois metropolitan and suburban markets. There are no significant concentrations of credit where customers' ability to honor loan terms is dependent upon a single economic sector.
In May 1993, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 114, "Accounting by Creditors for Impairment of a Loan." Old Kent is required to adopt this statement after December 31, 1994. This statement requires that the recorded investment in certain impaired loans (as defined by the statement) be adjusted by means of a valuation allowance to reflect a net carrying value determined by one of the following methods: (1) the present value of expected future cash flows discounted at the loan's effective interest rate, (2) the loan's observable market price, or (3) at the fair value of the collateral, if the loan is collateral dependent. It is anticipated that, when adopted, the provisions of SFAS No. 114 will not have a material effect on the Corporation's financial condition and results of operations.
Note 7. Allowance for Credit Losses
The following summarizes the changes in the allowance for credit losses:
Note 8. Leasehold Improvements, Premises and Equipment
The following summarizes leasehold improvements, premises and equipment:
Note 9. Intangible Assets
Other assets, as shown on the consolidated balance sheets, includes the following intangible assets (net of accumulated amortization):
In 1993, the Corporation prospectively adopted the provisions of Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes." Pursuant to this statement, Old Kent increased the carrying value of certain intangibles and related amortization expenses to reflect the reclassification of certain deferred income taxes associated with previous business combinations. Under this new accounting standard, deferred income taxes are recorded as such, rather than as reductions of the carrying values of the intangibles. The effect of this reclassification on associated amortization expense was not material.
Other expense, as shown in the consolidated statements of income, includes amortization expense associated with the intangible assets shown above. For the years 1993, 1992 and 1991, this amortization expense totaled $6,924,000, $5,784,000 and $5,193,000, respectively.
Other assets, as shown on the consolidated balance sheets also includes the value of unamortized mortgage servicing rights purchased by the Corporation. At December 31,1993, these assets totaled $4,609,000. For the years 1993, 1992, and 1991, amortization expense related to these assets were $5,190,000, $128,000, and $31,000, respectively.
Note 10. Short-Term Borrowed Funds
The following summarizes short-term borrowed funds:
At December 31, 1993, short-term borrowed funds included bank notes totaling $235 million which had original maturities of one year or less and are scheduled to mature at various dates in 1994. The rates of interest on these notes range from 3.32% to 3.48%.
Note 11. Capital Stock
On November 2, 1993, the Corporation announced that, in connection with its anticipated acquisition of EdgeMark Financial Corporation in 1994, it would repurchase shares of Old Kent Common Stock similar in number to the amount which are expected to be issued for that acquisition. The aggregate amount of such repurchases is expected to approximate $62 million.
At the Annual Meeting of Shareholders held on April 19, 1993, shareholders approved a proposal to amend the Articles of Incorporation to increase the number of authorized shares of common stock from 50 million to 150 million shares.
On September 15, 1992, the Corporation issued 13,466,117 shares in payment of a three-for-two common stock split, effected in the form of a share dividend. All per share data, presented in these financial statements, have been restated for the effects of the split.
During 1992, the Corporation repurchased 1,781,659 shares (pre-split basis) of its common stock at an aggregate cost of $69,994,000. The purpose of this stock repurchase was to meet expected needs for shares of Old Kent Common Stock. These needs included the issuance of shares in connection with the exercise of conversion rights by holders of Old Kent Financial Corporation 8% Convertible Subordinated Debentures, due 2010 ("Debentures").
During 1992, Old Kent issued 1,811,979 shares (pre-split basis) of its common stock to Debenture holders who exercised conversion rights. As a result of the Debentures being called for an early redemption, nearly all holders of the $45,897,000 of Debentures outstanding at December 31, 1991, exercised their conversion rights. This conversion process resulted in additional shareholders' equity of approximately $46 million. At December 31, 1993 and 1992, there were no Debentures outstanding.
At December 31, 1993 and 1992, there were 25,000,000 shares of preferred stock authorized but not issued, of which 3,000,000 are designated Series A Preferred Stock and 300,000 are designated Series B Preferred Stock.
On December 31, 1993, the Corporation had outstanding 27,025,940 Series B Preferred Stock Purchase Rights ("Rights"). The Rights were originally issued in January 1989 as a dividend to holders of the Corporation's common stock at the rate of one right for each share of common stock outstanding. As a result of the three-for-two split of the
Corporation's stock which occurred in 1992, each share of the Corporation's common stock presently represents 2/3rds of a Right. Each full Right entitles the holder thereof, until January 10, 1999, to buy one one-hundredth (1/100) of a share of Series B Preferred Stock at an exercise price of $80.00. The exercise price and the number of shares of Series B Preferred Stock issuable upon the exercise to the Rights are subject to adjustment in certain cases to prevent dilution. The Rights are evidenced by common stock certificates and are not exercisable or transferable apart from the common stock until the occurrence of certain events set forth in a Rights Agreement under which the Rights were issued. The Rights do not have any voting rights and are redeemable, at the option of the Corporation, at a price of $0.01 per Right prior to any person acquiring beneficial ownership of at least 20% of the common stock. The Rights expire on January 10, 1999. So long as the Rights are not separately transferable, the Corporation will issue 2/3rds of a Right (subject to possible future adjustment) with each new share of common stock issued.
Note 12. Long-Term Stock Incentive Plans
Old Kent has stock option plans under which options may be granted to certain officers and employees at not less than the market price of Old Kent's common stock on the date of grant. The options granted are exercisable immediately and expire within ten years of the date of grant, subject to certain cancellation provisions relating to employment. At December 31, 1993, a total of 2,004,678 shares were reserved for stock options, consisting of 720,430 shares for options granted at prices from $7.85 to $31.63, and 1,284,248 shares available for future option grants.
The following table summarizes stock option transactions for the last three years:
(Amounts shown above have been adjusted to reflect the effect of stock splits subsequent to grant dates.)
Old Kent also has restricted stock plans under which certain officers and employees may be awarded restricted stock. The plans provide for the issuance of a maximum of 1,080,844 authorized but previously unissued shares of Old Kent's common stock, subject to certain antidilution adjustments, as defined in the plans. Shares issued pursuant to the plans are restricted as to sale or transfer for a period of up to five years, but provide the recipients with all other rights and benefits of ownership. During 1993, 1992, and 1991, Old Kent issued 23,170 shares, 30,996 shares and 26,766 shares of its common stock with total market values of $733,000, $887,000 and $505,000, respectively, which are being amortized ratably to expense over the period of restriction. At December 31, 1993, there were 247,447 shares reserved for future restricted stock plan awards.
Old Kent also has a deferred stock compensation plan under which key employees may be awarded shares of stock as deferred compensation to be received at a specified later date, which may be up to five years after the date of the award. The plan provides for the issuance of a maximum of 300,000 authorized but previously unissued shares of Old Kent's common stock. Shares awarded under the plan would not be issued until the end of the deferral period, unless there is a change of control of the Corporation, in which case the shares would be issued to a trust where they are to be held and distributed at the end of the deferral period. Employees who receive awards under this plan will receive additional compensation equal to the dividends which would have been paid on the shares awarded if they were outstanding during the deferral period. During 1993, 1992 and 1991, Old Kent awarded 20,835 shares, 22,925 shares and 36,810 shares of its common stock valued at $659,000, $629,000 and $678,000, respectively at their award dates, as deferred compensation which are ratably charged to expense from the date of award to the end of the deferral period based on current market value. At December 31, 1993, there were 256,240 shares reserved for future deferred stock compensation plan awards.
Note 13. Other Income and Other Expense
Other income, as shown on the consolidated statements of income, includes the following:
Other expense, as shown on the consolidated statements of income, includes the following:
Securities transactions for available-for-sale and held-to-maturity securities, as shown on the consolidated statements of income, includes gross gains and gross losses as follows:
Note 14. Employee Benefits
The Corporation provides pension benefits to substantially all of its employees under the terms of the "Old Kent Retirement Income Plan." Old Kent also provides its key executives with pension benefits under the provisions of the "Old Kent Executive Retirement Income Plan." The following table sets forth the funded status of the pension plans and the amounts included in Old Kent's consolidated balance sheets:
Net pension income included the following components:
The following assumptions were used in determining the actuarial present value of the projected benefit obligations as of December 31 for each of the following years:
Old Kent has adopted amended assumptions, as shown above, for use in the actuarial determination of its projected benefit obligations at December 31, 1993. The amended assumptions reflect a change in outlook based on management's assessment of expected economic conditions for the foreseeable future.
Eligible employees may elect to participate in Old Kent's retirement savings plans whereby the Company contributes a fifty percent matching contribution for each amount contributed by participating employees, within limits as defined in the plans. The cost of these retirement savings plans was $2,194,000, $1,949,000 and $1,771,000 for 1993, 1992 and 1991, respectively.
The Corporation provides post-retirement benefits other than pensions for a small group of employees who were entitled to such benefits under plans of predecessor banking organizations acquired by Old Kent. These benefits primarily consist of health care and life insurance. The costs of these benefits are not material and are recognized in the financial statements during the employees' years of service.
In 1992, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards ("SFAS") No. 112, "Employers Accounting for Postemployment Benefits." This statement requires employers to recognize the obligation to provide postemployment benefits during the period in which the employee renders service to the employer. Such benefits may include, but are not limited to, salary continuation, severance benefits, job training, outplacement and counseling services, and continuation of health care and life insurance benefits. For 1993 and prior, Old Kent recognized the estimated expense of such benefits at the date of the event giving rise to such obligations. Adoption of SFAS No. 112 is required in 1994 and the Corporation's management believes that its adoption will not materially impact Old Kent's financial condition or results of operations.
Note 15. Income Taxes
As described in Note 1, effective January 1, 1993, the Corporation began accounting for income taxes under the provisions of SFAS No. 109. As permitted under SFAS No. 109, the Corporation recorded the cumulative effect of this change; thus, prior year financial statements have not been restated. The net effect of adopting SFAS No. 109 was not material to the Corporation's results of operations or its financial condition.
Components of the provision for income taxes are as follows:
Income tax expense differs from that computed at the federal statutory rate as follows:
Components of the deferred tax assets and liabilities were as follows:
Components of the deferred tax provision (benefit) are as follows:
Note 16. Commitments and Contingencies
Certain facilities and equipment are leased under noncancelable operating lease agreements which expire at various dates through the year 2013. The aggregate minimum rental commitments are as follows:
Rental expense charged to operations in 1993, 1992, and 1991, amounted to approximately $8,584,000, $8,866,000, and $9,568,000, respectively, including amounts paid under short-term cancelable leases. Certain leases contain provisions for renewal and purchase options, and require payment of property taxes, insurance and related expenses.
Included as a reduction of Old Kent's occupancy expense is building rental income of approximately $4,032,000, $4,350,000, and $4,226,000, for 1993, 1992, and 1991, respectively.
At December 31, 1993, Old Kent and its subsidiaries were parties, both as plaintiff and as defendant, to a number of lawsuits which arose in the ordinary course of business. In the opinion of management, after consultation with the Corporation's counsel, the ultimate resolution of these matters will not have a material effect on the Corporation's consolidated financial position and results of operations.
Note 17. Financial Instruments with Off-Balance-Sheet Risk
In the normal course of business, Old Kent is a party to financial instruments with off-balance-sheet risk in order to meet the financing needs of its customers and to reduce its own exposure to fluctuating interest rates. These financial instruments include commitments to extend credit, standby and commercial letters of credit, interest rate swap agreements and commitments to purchase foreign currencies. These instruments involve, to varying degrees, elements of credit and interest rate risk in excess of the amounts recognized in the consolidated balance sheets. The contract or notional amounts of such instruments reflect the extent of involvement that Old Kent has in particular classes of financial instruments.
The Corporation's exposure to credit loss in the event of nonperformance by the other party to the financial instrument for commitments to extend credit, and to potential credit loss associated with letters of credit issued, is represented by the contractual amount of those instruments. Old Kent uses the same credit policies in making commitments and conditional obligations as it does for loans and other such on-balance-sheet instruments. Old Kent is not subject to any credit loss based on the contract or notional amounts of interest rate swap agreements. Notional principal amounts are used in such transactions to express their volume; however, the amounts potentially subject to credit risk are much smaller. Risk of loss associated with these agreements is limited to amounts due for interest. Old Kent controls the credit risk of its interest rate swap agreements through credit approvals, limits and monitoring procedures.
At December 31, Old Kent was a party to the following financial instruments having off-balance-sheet risk:
Commitments to extend credit are agreements to lend cash to a customer as long as there is no breach of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Old Kent evaluates the creditworthiness of each customer on a case-by-case basis. The amount of collateral obtained, if deemed necessary by Old Kent, upon extension of credit is based upon management's credit evaluation of the counterparty.
Standby letters of credit are Old Kent's conditional commitments to guarantee the performance of a customer to another party. For such letters of credit, the credit risk to and underwriting standards issued by Old Kent are essentially the same as those of commitments to extend credit to a customer.
Interest rate swap transactions generally involve the exchange of fixed and floating rate interest payment obligations without the exchange of the underlying principal amounts. Old Kent's primary use of interest rate swap instruments has been, as a counterparty, for the management of its interest rate risk exposures.
Commitments to purchase foreign currencies and U.S. dollar exchanges represent Old Kent's obligation to acquire or to settle transactions based upon foreign denominated currencies. These arrangements are entered into by Old Kent in the normal course of business for the purpose of servicing its customers who may generate transactions involving or based upon foreign currency denominations. On such transactions, Old Kent's risk is limited to short-term fluctuations in the rate of exchange between the U.S. dollar and the respective value of a foreign denominated currency.
Note 18. Estimated Fair Value of Financial Instruments
In accordance with Statement of Financial Accounting Standards No. 107, "Disclosures about Fair Value of Financial Instruments" ("SFAS No. 107"), the following methods and assumptions were used to estimate the fair value of each significant class of financial instrument, as defined by SFAS No. 107, for which it is practicable to estimate that value.
The estimated fair values of financial instruments, as shown below, are not intended to reflect the estimated liquidation or market value of the Corporation taken as a whole. The disclosed fair value estimates are limited to Old Kent's significant financial instruments at December 31, 1993. These include financial instruments recognized as assets and liabilities on the consolidated balance sheet as well as certain off-balance-sheet financial instruments. The estimated fair values shown
below do not include any value for assets and liabilities which are not financial instruments as defined by SFAS No. 107, such as the value of real property, the value of "core deposit intangibles," the value of mortgage servicing rights, nor the value of anticipated future business.
The estimated fair value amounts were determined using available market information, current pricing information applicable to Old Kent and various valuation methodologies. Where market quotations were not available for financial instruments, considerable management judgment was involved in the determination of estimated fair values. Therefore, the estimated fair value of financial instruments shown below may not be representative of the amounts at which they could be exchanged in a current or future transaction. Due to the inherent uncertainties of expected cash flows of financial instruments, the use of alternate valuation assumptions and methods could have a significant effect on the derived estimated fair value amounts.
Cash and cash equivalents, interest receivable, short-term borrowed funds and interest payable
For these short-term instruments, the carrying amount was deemed to be a reasonable estimate of fair value.
Interest-earning deposits
The estimated fair value of these holdings was calculated by discounting the expected future cash flows using rates applicable to similar instruments with the same remaining maturity.
Trading account securities, securities available-for-sale and securities held-to-maturity
The estimated fair values were based upon quoted market or dealer prices.
Net loans (including residential mortgages held-for-sale)
Generally, the fair value of loans was estimated by discounting the expected future cash flows using current interest rates at which similar loans would be made to borrowers with similar credit ratings and remaining maturities. The fair value for credit card loans, student loans and certain "open-end" consumer loans was based upon available market prices for similar loans, adjusted for differences in loan characteristics. The fair value of loans on nonaccrual status was estimated at a discount of their carrying amounts. For certain variable rate loans that reprice frequently, the estimated fair value is equal to the carrying value. The estimated fair value of mortgages held-for-sale includes the estimated fair value of directly related financial instruments used as hedges.
Deposit liabilities
The fair value of fixed-maturity time deposits was estimated using the rates currently offered for deposits of similar remaining maturities. The fair value of demand and savings deposits is the amount payable on demand at the reporting date.
Long-term debt obligations
The fair value of long-term debt obligations at December 31, 1992, was estimated by discounting the future cash flows using current interest rates available to the Corporation for debt of similar terms and remaining maturities. The fair value of long-term debt obligations at December 31, 1993, approximated the carrying value.
Off-balance-sheet financial instruments
The estimated fair value of interest rate swap agreements was based upon dealer quotations for the amount which might be realized from a transfer, sale or termination of such agreements. The fair value of Old Kent's commitments to extend credit and its outstanding letters of credit are insignificant and therefore not presented.
The following summarizes the carrying value and estimated fair value of financial instruments:
Note 19. Condensed Financial Information of the Parent Company
The condensed financial information of the parent company, Old Kent Financial Corporation, is summarized as follows:
Federal and state banking laws and regulations place certain restrictions on the amount of dividends and loans a bank may make to its parent company. In 1994, the subsidiary banks may distribute to the parent company, in addition to their 1994 net income, approximately $140 million in dividends without written approval from bank regulatory agencies. The remaining net assets of subsidiary banks, approximating $517 million at December 31, 1993, are unavailable for transfer to the parent company.
Note 20. Foreign Activities
The following is a summary of assets attributable to foreign activities:
The foreign activities of Old Kent are integrated with domestic activities and, therefore, it is not possible to segregate with precision the operating results relating solely to foreign activities. Rates used to determine the internal allocation of funds were based on the average rates of selected interest-bearing sources of funds. Income taxes have been provided at statutory U.S. federal tax rates.
The following is selected income data related to foreign activities:
Quarterly Financial Data (Unaudited)
The following is a summary of selected quarterly results of operations for the years ended December 31, 1993 and 1992. This unaudited financial information is not a part of the previously presented financial statements.
Item 9.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Not applicable.
PART III
Item 10.



Item 10. Directors and Executive Officers of the Registrant.
The information set forth under the captions "Board of Directors" and "Compliance with Section 16(a) of the Exchange Act" in the registrant's definitive Proxy Statement for its April 18, 1994, annual meeting of shareholders is here incorporated by reference.
Item 11.

Item 11. Executive Compensation.
The information set forth under the captions "Compensation of Executive Officers and Directors," "Executive Severance Agreements" and "Compensation of Directors" in the registrant's definitive Proxy Statement for its April 18, 1994, annual meeting of shareholders is here incorporated by reference.
Item 12.

Item 12. Security Ownership of Certain Beneficial Owners and Management.
The information set forth under the caption "Voting Securities" in the registrant's definitive Proxy Statement for its April 18, 1994, annual meeting of shareholders is here incorporated by reference.
Item 13.

Item 13. Certain Relationships and Related Transactions.
The information set forth under the caption "Certain Relationships and Related Transactions" in the registrant's definitive Proxy Statement for its April 18, 1994, annual meeting of shareholders is here incorporated by reference.
PART IV
Item 14.

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) (1) Financial Statements. The following financial statements and independent auditors' report of Old Kent Financial Corporation and its subsidiaries are filed as part of this report:
Report of Independent Public Accountants dated January 18, Consolidated Balance Sheets--December 31, 1993 and 1992 Consolidated Statements of Income for each of the three years in the period ended December 31, 1993 Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 1993 Consolidated Statements of Shareholders' Equity for each of the three years in the period ended December 31, 1993 Notes to Consolidated Financial Statements
The financial statements, the notes to financial statements, and the independent auditors' report listed above are set forth in Item 8 of this report.
(2) Financial Statement Schedules. Not applicable.
(3) Exhibits. The following exhibits are filed as part of this report:
Old Kent will furnish a copy of any exhibit listed above to any shareholder of the registrant without charge upon written request to Mr. Martin J. Allen, Jr., Secretary, Old Kent Financial Corporation, One Vandenberg Center, Grand Rapids, Michigan 49503.
(b) Reports on Form 8-K.
Old Kent filed no Current Reports on Form 8-K during the last quarter of the period covered by this report.
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 its behalf by the undersigned, thereunto duly authorized.
OLD KENT FINANCIAL CORPORATION (registrant)
Date: March 29, 1994 By /s/ Richard W. Wroten Richard W. Wroten Executive Vice President and Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated.
March 29, 1994 /s/ John M. Bissell* John M. Bissell Director
March 29, 1994 /s/ John D. Boyles* John D. Boyles Director
March 29, 1994 /s/ John C. Canepa* John C. Canepa Chairman of the Board and Chief Executive Officer, and Director (Principal Executive Officer)
March 29, 1994 /s/ Earl D. Holton* Earl D. Holton Director
March 29, 1994 /s/ Michael J. Jandernoa* Michael J. Jandernoa Director
March 29, 1994 /s/ John P. Keller* John P. Keller Director
March 29, 1994 /s/ Jerry K. Myers* Jerry K. Myers Director
March 29, 1994 /s/ William U. Parfet* William U. Parfet Director
March 29, 1994 /s/ Percy A. Pierre* Percy A. Pierre Director
March 29, 1994 /s/ Robert L. Sadler* Robert L. Sadler Vice Chairman of the Board and Director
March 29, 1994 /s/ Peter F. Secchia* Peter F. Secchia Director
March 29, 1994 /s/ B. P. Sherwood, III* B. P. Sherwood, III Vice Chairman of the Board, Treasurer, and Director
March 29, 1994 /s/ Martha L. Thornton* Martha L. Thornton Director
March 29, 1994 /s/ David J. Wagner* David J. Wagner Executive Vice President and Director
March 29, 1994 /s/ Richard W. Wroten Richard W. Wroten Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)
*By /s/ Richard W. Wroten Richard W. Wroten Attorney-in-Fact
Commission File No. 0-12216
SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549
EXHIBITS TO FORM 10-K
For the Fiscal Year Ended December 31, 1993
Old Kent Financial Corporation One Vandenberg Center Grand Rapids, Michigan 49503
EXHIBIT 3(B)
BYLAWS
of
OLD KENT FINANCIAL CORPORATION
ARTICLE I
OFFICES
Section 1. Principal Office. The principal office shall be in the City of Grand Rapids, County of Kent, State of Michigan.
Section 2. Other Offices. The Corporation may also have offices at such other places both within and without the State of Michigan as the board of directors may from time to time determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. Times and Places of Meetings. All meetings of the shareholders shall be held at such times and places, within or without the State of Michigan, as may be fixed from time to time by the board of directors. If no designation of the place of a meeting is made, such meeting shall be held at the principal office of Old Kent Bank and Trust Company in Grand Rapids, Michigan.
Section 2. Annual Meetings. Annual meetings of the share- holders shall be held each year at such time on such business day in the month of April as may be designated by the board of directors, or if no such designation is made, at 10 a.m. on the third Monday in April, or if that day is a legal holiday, then on the next succeeding business day at such place and hour as shall be fixed by the board of directors.
Section 3. Special Meetings. Special meetings of the shareholders may be called by resolution of a majority of the board of directors or by the Chairman of the Board or Chief Executive Officer of the Corporation, and shall be held on a date fixed by the board of directors or the Chairman of the Board or Chief Executive Officer.
Section 4. Notice of Meetings. Written notice of each meeting of shareholders, stating the time, place and purposes thereof, shall be given to each shareholder entitled to vote at
the meeting not less than ten (10) nor more than sixty (60) days before the date fixed for the meeting. Notice of a meeting need not be given to any shareholder who signs a waiver of notice before or after the meeting. Attendance of a shareholder at a meeting shall constitute both (a) a waiver of notice or defective notice except when the shareholder attends a meeting for the express purpose of objecting, at the beginning of the meeting, to holding the meeting or transacting any business because the meeting has not been lawfully called or convened, and (b) a waiver of objection to consideration of a particular matter at the meeting that is not within the purpose or purposes described in the meeting notice, except when the shareholder objects to considering the matter when it is presented.
Section 5. Shareholder List. The officer or agent who has charge of the stock ledger of the Corporation shall prepare and make a complete list of the shareholders entitled to vote at each meeting, arranged by class or series of shares in alphabetical order, showing the address of and the number of shares registered in the name of each shareholder. The list shall be produced and kept at the time and place of the meeting and may be inspected during the whole time of the meeting by any shareholder who is present at the meeting.
Section 6. Quorum. Unless a greater or lesser quorum is provided in the Articles of Incorporation or by law, shares entitled to cast a majority of the votes at a meeting constitute a quorum at the meeting. Except when the holders of a class or series of shares are entitled to vote separately on an item of business, shares of all classes and series entitled to vote shall be combined as a single class and series for the purpose of determining a quorum. When the holders of a class or series of shares are entitled to vote separately on an item of business, shares of that class or series entitled to cast a majority of the votes of that class or series at a meeting constitute a quorum of that class or series at the meeting, unless a greater or lesser quorum is provided in the Articles of Incorporation or by law. If there is no quorum, the officer of the Corporation presiding as chairman of the meeting shall have the power to adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present, when any business may be transacted which might have been transacted at the meeting as first convened had there been a quorum. However, if the adjournment is for more than thirty (30) days, or if after the adjournment the board fixes a new record date for the adjourned meeting, notice of the time, place and purposes of such meeting shall be given to each shareholder of record on the new record date. Once a quorum is determined to be present, the shareholders present in person or by proxy at such meeting may continue to do business until adjournment, notwithstanding the withdrawal of enough shareholders to leave less than a quorum.
If a meeting is adjourned solely for the purpose of receiving the results of voting by shareholders, such meeting need not be reconvened. If not reconvened, such meeting shall stand adjourned pending submission of the results of voting to the Secretary of the Corporation, whereupon such meeting shall stand adjourned until the next regular or special meeting of shareholders.
Section 7. Vote Required. When a quorum is present at a meeting, any action to be taken by a vote of the shareholders, other than the election of directors, shall be authorized by a majority of the votes cast by the holders of shares entitled to vote on the action, unless a greater vote is required by the Articles of Incorporation or express provision of statute. Except as otherwise provided by the Articles of Incorporation, directors shall be elected by a plurality of the votes cast at an election.
Section 8. Voting Rights. Except as otherwise provided by the Articles of Incorporation or the resolution or resolutions of the board of directors creating any class of stock, each shareholder shall at every meeting of the shareholders be entitled to one vote in person or by proxy for each share of the capital stock having voting power held by such shareholder. Each proxy to vote shall be in writing and signed by the shareholder or his or her duly authorized representative, and no proxy shall be voted after three years from its date, unless the proxy provides for a longer period.
Section 9. Conduct of Meetings. Meetings of shareholders generally shall follow accepted rules of parliamentary procedure, subject to the following:
(a) The chairman of the meeting shall have absolute authority over matters of procedure, and there shall be no appeal from the ruling of the chairman. If, in his or her absolute discretion, the chairman deems it advisable to dispense with the rules of parliamentary procedure as to any meeting of shareholders or part thereof, he or she shall so state and shall clearly state the rules under which the meeting or appropriate part thereof shall be conducted.
(b) If disorder should arise which, in the absolute discretion of the chairman, prevents the continuation of the legitimate business of the meeting, the chairman may quit the chair and announce the adjournment of the meeting, and upon his or her so doing, the meeting is immediately adjourned without the necessity of any vote or further action of the shareholders.
(c) The chairman may require any person who is not a bona fide shareholder of record on the record date, or a validly appointed proxy of such a shareholder, to leave the meeting.
(d) The chairman may introduce nominations, resolutions or motions submitted by the board of directors for consideration by the shareholders without a motion or second. Except as the chairman shall direct, a resolution or motion not submitted by the board of directors shall be considered for a vote only if proposed by a shareholder of record on the record date or a validly appointed proxy of such a shareholder, and seconded by such a shareholder or proxy other than the individual who proposed the resolution or motion.
(e) Except as the chairman shall direct, no matter may be presented to the meeting which has not been submitted in writing to the Secretary for inclusion in the agenda at least 10 days before the date of the meeting.
(f) When all shareholders present at a meeting in person or by proxy have been offered an opportunity to vote on any matter properly before a meeting, the chairman may at his or her discretion declare the polls to be closed, and no further votes may be cast or changed after such declaration. If no such declaration is made by the chairman, the polls shall remain open and shareholders may cast additional votes or change votes until the inspectors of election have delivered their final report to the chairman.
(g) When the chairman has declared the polls to be closed on all matters then before a meeting, the chairman may declare the meeting to be adjourned pending determination of the results by the inspectors of election. In such event, the meeting shall be considered adjourned for all purposes, and the business of the meeting shall be finally concluded upon delivery of the final report of the inspectors of election to the chairman at or after the meeting.
(h) When the chairman determines that no further matters may properly come before a meeting, he or she may declare the meeting to be adjourned, without motion, second, or vote of the shareholders.
(i) When the chairman has declared a meeting to be adjourned, unless the chairman has declared the meeting to be adjourned until a later date, no further business may properly be considered at the meeting even though shareholders or holders of proxies representing a quorum may remain at the site of the meeting.
Section 10. Inspectors of Election. The board of directors or, if they shall not have so acted, the chairman may appoint, at or prior to any meeting of shareholders, one or more persons (who may be directors and/or employees of the Corporation) to serve as inspectors of election. The inspectors so appointed shall determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, the validity and effect of proxies, and shall receive votes or ballots, hear and determine challenges and questions arising in connection with the right to vote, count and tabulate votes or ballots, determine the result, and do such acts as are proper to conduct the election or vote with fairness to all shareholders.
Section 11. Voting. When any vote is taken by written ballot at any meeting of shareholders, an unrevoked proxy submitted in accordance with its terms shall be accepted in lieu of, and shall be deemed to constitute, a written ballot marked as specified in such proxy.
ARTICLE III
RECORD DATE
Section 1. Fixing of Record Date by Board. For the purpose of determining the shareholders entitled to notice of or to vote at any meeting of shareholders, or any adjournment thereof, or to express consent to or dissent from any corporate action in writing without a meeting, or for the purpose of determining shareholders entitled to receive payment of any dividend or the distribution or allotment of any rights or evidences of interests arising out of any change, conversion or exchange of capital stock, or for the purpose of any other action, the board of directors may fix, in advance, a date as the record date for any such determination of shareholders. Such date shall not be more than sixty (60) days nor less than ten (10) days before the date of any such meeting, nor more than sixty (60) days prior to the effectuation of any other action proposed to be taken. Only shareholders of record on a record date so fixed shall be entitled to notice of, and to vote at, such meeting or to receive payment of any dividend or the distribution or allotment of any rights or evidences of interests arising out of any change, conversion or exchange of capital stock.
Section 2. Provision for Record Date in the Absence of Board Action. If a record date is not fixed by the board of directors: (a) the record date for determination of shareholders entitled to notice of or to vote at a meeting of shareholders shall be the close of business on the day next preceding the day on which notice is given, or, if no notice is given, the day next preceding the day on which the meeting is held; and (b) the record date for determining shareholders entitled to express consent to corporate action in writing, without a meeting, when no prior action by the board of directors is necessary, shall be the day on which the first written consent is expressed; and (c) the record date for determining shareholders for any other purpose shall be the close of business on the day on which the resolution of the board relating thereto is adopted.
Section 3. Adjournments. When a determination of shareholders of record entitled to notice of or to vote at a meeting of shareholders has been made as provided in this Article, the determination applies to any adjournment of the meeting, unless the board fixes a new record date for the adjourned meeting.
ARTICLE IV
DIRECTORS
Section 1. Number and Qualification of Directors. Each director shall be at least twenty-one (21) years of age. A director need not be a shareholder, a citizen of the United States, or a resident of the State of Michigan. The number of directors shall be fixed by resolution of the board of directors as provided in the Articles of Incorporation.
Section 2. Vacancies. Vacancies and newly created directorships resulting from any increase in the authorized number of directors shall be filled in the manner provided in the Articles of Incorporation.
Section 3. Powers. The business and affairs of the Corporation shall be managed by its board of directors which may exercise all such powers of the Corporation and do all such lawful acts and things as are not by statute or by the Articles of Incorporation or by these Bylaws directed or required to be exercised or done by the shareholders.
Section 4. Fees and Expenses. The directors may be paid their expenses, if any, of attendance at each meeting of the board of directors and may be paid a fixed sum for attendance at each meeting of the board of directors or a stated salary as director. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving compensation therefor. Members of special or standing committees may be allowed like compensation for attending committee meetings.
Section 5. Resignation and Removal. Any director may resign at any time and such resignation shall take effect upon receipt of written notice thereof by the Corporation, or at such subsequent time as set forth in the notice of resignation. Directors may be removed only as provided by statute or the Articles of Incorporation.
ARTICLE V
MEETINGS OF DIRECTORS
Section 1. Place of Meetings. The board of directors of the Corporation may hold meetings, both regular and special, either within or without the State of Michigan.
Section 2. First Meeting of Newly Elected Board. The first meeting of each newly elected board of directors shall be held immediately following the annual meeting of shareholders, and no notice of such meeting shall be necessary to the newly elected directors to legally constitute the meeting, provided a quorum shall be present. In the event such meeting is not held immediately following the annual meeting of shareholders, the meeting may be held at such time and place as shall be specified in a notice given as hereinafter provided for special meetings of the board of directors, or as shall be specified in a written waiver signed by all of the directors.
Section 3. Regular Meetings. Regular meetings of the board of directors may be held with or without notice at such time and at such place as shall from time to time be determined by the board.
Section 4. Special Meetings. Special meetings of the board may be called by the Chairman of the Board or the Chief Executive Officer on two (2) days' notice to each director, either personally, by mail, by telegram or by facsimile transmission; special meetings shall be called by the Chairman of the Board or Chief Executive Officer in like manner and on like notice on the written request of two (2) directors.
Section 5. Purpose Need Not Be Stated. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the board of directors need be specified in the notice of such meeting.
Section 6. Quorum. At all meetings of the board of directors a majority of the total number of directors shall constitute a quorum for the transaction of business, and the acts of a majority of the directors present at any meeting at which there is a quorum shall be the acts of the board of directors, except as may be otherwise specifically provided by statute or by the Articles of Incorporation. If a quorum is not present at any meeting of the board of directors, the directors present thereat may adjourn the meeting from time to time, without notice other than announcement at the meeting, until a quorum is present.
Section 7. Action Without a Meeting. Unless otherwise restricted by the Articles of Incorporation or these Bylaws, any action required or permitted to be taken at any meeting of the board of directors or of any committee thereof may be taken without a meeting if, before or after the action, all members of the board or of such committee, as the case may be, consent thereto in writing and such written consent is filed with the minutes or proceedings of the board or committee.
Section 8. Meeting by Telephone or Similar Equipment. Members of the board of directors or any committee designated by the board of directors may participate in a meeting of such board, or committee, by means of conference telephone or similar communications equipment by means through which all persons participating in the meeting can communicate with each other. Participation in a meeting pursuant to this Section shall constitute presence in person at the meeting.
Section 9. Waiver of Notice. Attendance of a director at or participation in a meeting of the board of directors or any committee constitutes a waiver of notice of the meeting, except where a director attends a meeting for the express purpose of objecting, at the beginning of the meeting or upon his or her arrival, to the meeting or the transaction of any business because the meeting has not lawfully been called or convened, and the person does not thereafter vote for or assent to any action taken at the meeting. Notice of any meeting of the board or a committee need not be given to any person entitled thereto who waives such notice in writing, either before or after the meeting.
ARTICLE VI
COMMITTEES OF DIRECTORS
Section 1. Committees. The board of directors may from time to time appoint committees, whose membership shall consist of such members of the board of directors as it may deem advisable, to serve at the pleasure of the board. The board of
directors may also appoint directors to serve as alternates for members of each committee in the absence or disability of regular members. The board of directors may fill any vacancies in any committee as they occur.
Section 2. Executive Committee. The Executive Committee, if there is one, shall have and may exercise the full powers and authority of the board of directors in the management of the business affairs and property of the Corporation during the intervals between meetings of the board of directors. The Executive Committee shall also have the power and authority to declare distributions and dividends and to authorize the issuance of stock.
Section 3. Audit Committee.
(a) Function. The Audit Committee shall perform the function of an audit committee for the Corporation and each of its subsidiaries as that function may be defined for the purpose of compliance with laws and regulations applicable to the Corporation and each of its subsidiaries. The Audit Committee shall have the following duties and responsibilities:
(i) causing a suitable examination of the financial records and operations of the Corporation and each of its subsidiaries to be made by the internal auditor of the Corporation;
(ii) recommending to the board of directors the employment of independent public accountants who fulfill the requirements established by Section 36 of the Federal Deposit Insurance Act, as amended, and any regulations issued pursuant to such act by the Federal Deposit Insurance Corporation or any successor of such corporation;
(iii) reviewing with the independent public accountants and management of the Corporation and its subsidiaries the bases for reports required by Section 36 of the Federal Deposit Insurance Act, as amended, and any regulations issued pursuant to such act by the Federal Deposit Insurance Corporation or any successor of such corporation;
(iv) reviewing examination reports of the Corporation prepared by regulatory authorities and such other information concerning examination
reports of the Corporation's subsidiaries as the committee deems advisable; and
(v) reporting to the board of directors at least once each calendar year concerning the results of examinations made and such conclusions and recommendations as the Audit Committee deems advisable.
(b) Eligibility of Members. Directors who fulfill all of the following conditions shall be eligible to serve on the Audit Committee:
(i) members may not be current employees of the Corporation or any of its subsidiaries; and
(ii) members must satisfy the requirements established by Section 36 of the Federal Deposit Insurance Act, as amended, and any regulations issued pursuant to such act by the Federal Deposit Insurance Corporation or any successor of such corporation.
(c) Authorized Actions. The Audit Committee shall have the power to take and effect such actions as it deems necessary or advisable in the performance of its duties. The committee may engage counsel and other consultants to assist the committee in performing its duties. Such counsel and other consultants may but need not be otherwise engaged by the Corporation unless otherwise prohibited by applicable laws or regulations.
Section 4. Personnel Committee.
(a) Function. The Personnel Committee shall perform the function of a compensation committee as that function may be defined for the purpose of compliance with laws and regulations applicable to the Corporation. The Personnel Committee shall have the following duties and responsibilities:
(i) administering the option plans and benefit plans of the Corporation which are approved by the board of directors;
(ii) determining the compensation policy of the Corporation, reviewing the personnel policies and programs of the Corporation, and submitting recommendations to the board of directors;
(iii) determining the compensation of the Chief Executive Officer, reviewing individual salaries of other executive officers, and submitting recommendations to the board of directors; and
(iv) preparing an annual report that may be submitted to the Corporation's shareholders concerning the compensation policy of the Corporation and the committee's compensation decisions during the previous fiscal year.
(b) Eligibility of Members. Directors who fulfill all of the following conditions shall be eligible to serve on the Personnel Committee:
(i) members may not be current or former employees of the Corporation or any of its subsidiaries;
(ii) members must be disinterested persons as such term may be defined for purposes of Section 16 of the Securities Exchange Act of 1934, as amended; and
(iii) members must not have an Interlocking Relationship with any executive officer of the Corporation.
An Interlocking Relationship shall include a relationship where an executive officer of the Corporation serves as a member of the board of directors of another entity of which a director of the Corporation is an executive officer, or any other relationship that would be required to be disclosed pursuant to Item 402(j)(3) of Regulation S-K issued by the Securities and Exchange Commission.
(c) Authorized Actions. The Personnel Committee shall have the power to take and effect the following actions:
(i) authorize the issuance of stock pursuant to the option plans and benefit plans of the Corporation which are approved by the board of directors;
(ii) interpret the option plans and benefit plans of the Corporation which it administers to the extent that such power does not conflict with the terms of the applicable plan document; and
(iii) engage counsel and other consultants as the committee may deem necessary or advisable to assist the committee in performing its duties, which counsel and other consultants may but need not be otherwise engaged by the Corporation.
Section 5. Committee on Directors. The Committee on Directors, if there is one, shall consider candidates for the board of directors, propose to the board of directors candidates for directors for submission to the shareholders at the annual meeting, and review the retirement policy for directors and make recommendations to the board of directors concerning this policy.
Section 6. Other Committees. The board of directors may designate such other committees as it may deem appropriate, and such committees shall exercise the authority delegated to them.
Section 7. Meetings. Each committee provided for above shall meet as often as its business may require and may fix a day and time for regular meetings, notice of which shall not be required. Whenever the day fixed for a meeting shall fall on a holiday, the meeting shall be held on the following business day or on such other day as the chairman of the committee may determine. Special meetings of committees may be called by any member, and notice thereof may be given to the members by telephone, telegram, letter or facsimile transmission. A majority of the members of a committee shall constitute a quorum for the transaction of the business of the committee. A record of the proceedings of each committee shall be kept and presented to the board of directors.
Section 8. Substitutes. In the absence or disqualification of a member of a committee, the members thereof present at a meeting and not disqualified from voting, whether or not they constitute a quorum, may unanimously appoint another member of the board to act at the meeting in place of such absent or disqualified member.
ARTICLE VII
OFFICERS AND TITLED POSITIONS
Section 1. Appointment of Officers. The board of directors at its first meeting after the annual meeting of shareholders, or as soon as practicable after the election of directors in each year, shall appoint from its number a Chairman of the Board and a President. The board of directors shall also appoint a Secretary, a Treasurer and a Chief Financial Officer, all of whom shall be officers of the Corporation. The board of directors may
also appoint and expressly designate such other individuals as it may deem proper to be officers of the Corporation, with such titles as the board of directors may deem appropriate. If the offices of Chairman of the Board and President are held by a single person, that officer shall be the Chief Executive Officer of the Corporation; if not, the board of directors shall designate either the Chairman of the Board or the President to be the Chief Executive Officer of the Corporation. The dismissal of an officer, the appointment of an officer to fill the office of one who has been dismissed or has ceased for any reason to be an officer, the appointment of any additional officers, and the change of an officer to a different or additional office, may be made by the board of directors at any later meeting. Any two or more offices may be filled by the same person.
Section 2. Appointments to Titled Positions. The board may from time to time designate and appoint individuals to fill titled positions as it may deem proper. Such holders of other titled positions as may from time to time be appointed by the board of directors pursuant to this Article shall hold such titles as are assigned by the board of directors and shall perform such duties and exercise such authority as may be assigned by the board of directors or the Chief Executive Officer. The dismissal of the holder of a titled position, the appointment of a replacement for the holder of a titled position to fill the place of one who has been dismissed or has ceased for any reason to hold a titled position, the appointment of any additional titled position holders, and the change of a titled position holder to a different or additional position, may be made by the board of directors at any meeting. Any two or more titled positions may be filled by the same person.
Section 3. Authority of Officers. The Chief Executive Officer, the President (if not also the Chief Executive Officer), the Secretary, the Treasurer, the Chief Financial Officer and such other persons as the board of directors shall have appointed and expressly designated as officers shall be the only officers of the Corporation. Only the officers of the Corporation shall have discretionary authority to determine the fundamental policies of the Corporation. Holders of titled positions who have not been expressly designated as officers of the Corporation in this Section or by the board of directors shall not be officers of the Corporation regardless of their titles.
Section 4. Authority of Titled Positions. Holders of titled positions who are not officers shall not have discretionary authority to determine fundamental policies of the Corporation and shall not, by reason of holding such titled positions, be entitled to have access to any files, records or other information relating or pertaining to the Corporation, its
business and finances, or to attend or receive the minutes of any meetings of the board of directors or any committee of the Corporation, except as and to the extent expressly authorized and permitted by the board of directors or the Chief Executive Officer.
Section 5. Term of Service. Each officer and holder of a titled position shall serve at the pleasure of the board. The board of directors may remove any officer or holder of a titled position from that office or position for cause or without cause. Any officer or holder of a titled position may resign his or her office or position at any time, such resignation to take effect upon receipt of written notice thereof by the Corporation unless otherwise specified in the resignation.
Section 6. Chairman of the Board. The Chairman of the Board shall preside at all meetings of the shareholders and all meetings of the board of directors.
Section 7. President. The President shall, subject to the direction of the board of directors, see that all orders and resolutions of the board are carried into effect, and shall perform all other duties necessary or appropriate to his or her office, subject, however, to his or her right and the right of the directors to delegate any specific powers to any other officer or officers of the Corporation. In case of the absence or inability to act of the Chairman of the Board, the President shall exercise all of the duties and responsibilities of the Chairman until the board shall otherwise direct.
Section 8. Chief Executive Officer. The Chief Executive Officer, in addition to his or her duties as Chairman of the Board or President, as the case may be, shall have final authority, subject to the control of the board of directors, over the general policy and business of the Corporation and shall have the general control and management of the business and affairs of the Corporation. The Chief Executive Officer shall have the power, subject to the control of the board of directors, to appoint, suspend or discharge and to prescribe the duties and to fix the compensation of such agents and employees of the Corporation, other than the officers appointed by the board, as he or she may deem necessary.
Section 9. Vice-Chairmen of the Board. Each Vice-Chairman of the Board shall have such powers and perform such duties as may be assigned to him or her from time to time by the board of directors or the Chief Executive Officer. In case of the absence or inability to act of the Chairman of the Board and the President, the duties of his or her office shall, unless otherwise specified by these Bylaws, be performed by the Vice-
Chairmen of the Board in the order of their seniority or such other priority as may be established by the board or by the Chief Executive Officer, unless and until the board shall otherwise direct, and, when so acting, the duly authorized Vice- Chairman of the Board shall have all the powers of, and shall be subject to the restrictions upon, the Chairman of the Board or the President.
Section 10. Vice Presidents. Each Executive Vice President, Senior Vice President, Vice President, Assistant Vice President and such other vice presidents as may be designated by the board of directors shall have such powers and perform such duties as may be assigned to him or her from time to time by the board of directors or the Chief Executive Officer. In case of the absence or inability to act of the President, and in the absence or inability to act of the Vice-Chairmen of the Board, the duties of the President shall, unless otherwise specified by these Bylaws, be performed by the Executive Vice Presidents, the Senior Vice Presidents, the Vice Presidents, the Assistant Vice Presidents and then such other vice presidents as may be designated by the board in the order of their seniority or such other priority as may be established by the board or by the Chief Executive Officer, unless and until the board shall otherwise direct, and, when so acting, the duly authorized Executive Vice President, Senior Vice President, Vice President or Assistant Vice President shall have all the powers of, and shall be subject to the restrictions upon, the President. Executive Vice Presidents, Senior Vice Presidents, Vice Presidents and Assistant Vice Presidents have the authority to sign or execute contracts and other documents which shall be binding on the Corporation and to fulfill the terms thereof, but such Executive Vice Presidents, Senior Vice Presidents, Vice Presidents and Assistant Vice Presidents shall not have the discretionary policy-making authority conferred upon the officers by these Bylaws unless expressly designated as an officer by the board of directors.
Section 11. Secretary. The Secretary shall attend all sessions of the board of directors and all meetings of the shareholders and shall record all votes and the minutes of all proceedings in a book to be kept for that purpose. The Secretary shall perform like duties for committees when required. He or she shall give, or cause to be given, notice of all meetings of the shareholders and meetings of the board of directors. He or she shall keep in safe custody the seal of the Corporation and shall see that it is affixed to all documents the execution of which, on behalf of the Corporation under its seal, is necessary or appropriate, and when so affixed may attest the same. He or she shall perform such other duties as may be prescribed by the board of directors or the Chief Executive Officer.
Section 12. Treasurer. The Treasurer shall have custody of the corporate funds and securities, except as otherwise provided by the board, shall cause to be kept full and accurate accounts of receipts and disbursements in books belonging to the Corporation, and shall deposit all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the board of directors. He or she shall disburse the funds of the Corporation as may be ordered by the board or directors, taking proper vouchers for such disbursements, and shall render to the directors, at the regular meetings of the board or whenever they may require it, an account of all his or her transactions as Treasurer and of the financial condition of the Corporation.
Section 13. Absence. In the case of the absence or inability to act of any officer or holder of any titled position, or for any other reason that the board may deem sufficient, the board of directors or the Chief Executive Officer may delegate for the time being the powers or duties of such officer or holder of any titled position, to any other director or officer. To the extent that the enumerated powers or duties do not involve participation in major policy-making functions of the Corporation or the exercise of discretionary authority to that end, said powers or duties may be delegated for the time being to the holder of a titled position, but shall be exercised under the supervision of an officer.
ARTICLE VIII
INDEMNIFICATION
Section 1. Indemnification Other Than in Actions by or in the Right of the Corporation. Any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of the Corporation) by reason of the fact that he or she is or was a director or executive officer of the Corporation or a subsidiary, or, while serving as such a director or executive officer, is or was serving at the request of the Corporation or a subsidiary as a director, officer, partner, trustee, employee or agent of another foreign or domestic - Corporation, partnership, joint venture, trust or other enterprise, whether for profit or not, shall be indemnified by the Corporation against expenses (including attorneys' fees), judgments, penalties, fines and amounts paid in settlement actually and reasonably incurred by him or her in connection with such action, suit or proceeding if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation or its
shareholders, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any action, suit or proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Corporation or its shareholders, or with respect to any criminal action or proceeding, that he or she had reasonable cause to believe that his or her conduct was unlawful. Persons who are not directors or executive officers of the Corporation or a subsidiary may be similarly indemnified in respect of such service to the extent authorized at any time by the board of directors, except as otherwise provided by statute or the Articles of Incorporation.
Section 2. Indemnification in Actions by or in the Right of the Corporation. Any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action or suit by or in the right of the Corporation to procure a judgment in its favor by reason of the fact that he or she is or was a director or executive officer of the Corporation or a subsidiary, or, while serving as such a director or executive officer, is or was serving at the request of the Corporation or a subsidiary as a director, officer, partner, trustee, employee or agent of another foreign or domestic Corporation, partnership, joint venture, trust or other enterprise, whether for profit or not, shall be indemnified by the Corporation against expenses (including attorneys' fees) and amounts paid in settlement actually and reasonably incurred by him or her in connection with the action or suit if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Corporation or its shareholders. Indemnification shall not be made for any claim, issue or matter in which such person has been found liable to the Corporation except to the extent authorized in Section 6 of this Article. Persons who are not directors or executive officers of the Corporation or a subsidiary may be similarly indemnified in respect of such service to the extent authorized at any time by the board of directors, except as otherwise provided by statute or the Articles of Incorporation.
Section 3. Expenses. To the extent that a director or executive officer, or other person whose indemnification is authorized by the board of directors, has been successful on the merits or otherwise, including the dismissal of an action without prejudice, in the defense of any action, suit or proceeding referred to in Section 1 or 2 of this Article, or in the defense of any claim, issue or matter therein, he or she shall be indemnified against expenses (including attorneys' fees) actually
and reasonably incurred by him or her in connection therewith and any action, suit or proceeding brought to enforce the mandatory indemnification provided in this Section.
Section 4. Authorization of Indemnification. Any indemnification under Section 1 or 2 of this Article (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification is proper in the circumstances because the person has met the applicable standard of conduct set forth in this Article and upon an evaluation of the reasonableness of expenses and amounts paid in settlement. Such determination shall be made (a) by the board of directors by a majority vote of a quorum consisting of directors who are not parties or threatened to be made parties to such action, suit or proceeding, or if such a quorum cannot be obtained, by a majority vote of a committee duly designated by the board consisting solely of two or more directors not at the time parties or threatened to be made parties to such action, suit or proceeding; (b) by independent legal counsel (who may be the regular counsel of the Corporation) in a written opinion, which counsel shall be selected as provided in (a) above, provided that if a committee cannot be designated as provided in (a) above, then the board shall select such independent counsel; (c) by all Independent Directors (as that term is defined in the Michigan Business Corporation Act) who are not parties or threatened to be made parties to such action, suit or proceeding; or (d) by the shareholders, but shares held by directors, officers, employees or agents who are parties or threatened to be made parties to such action, suit or proceeding may not be voted. In designating a committee under (a) above, or in the selection of independent legal counsel in the event a committee cannot be designated pursuant to (b) above, all directors may participate. The Corporation may indemnify a person for a portion of expenses (including reasonable attorneys' fees), judgments, penalties, fines and amounts paid in settlement for which the person is entitled to indemnification under Section 1 or 2 of this Article, even though the person is not entitled to indemnification for the total amount of such expenses, judgments, penalties, fines and amounts paid in settlement.
Section 5. Advancing of Expenses. Expenses incurred by any person who is or was serving as a director or executive officer of the Corporation or a subsidiary in defending a civil or criminal action, suit or proceeding described in Section 1 or 2 of this Article shall be paid by the Corporation in advance of the final disposition of such action, suit or proceeding if (a) the person furnishes the Corporation a written affirmation of his or her good faith belief that he or she has met the applicable standard of conduct set forth in Section 1 or 2 of this Article; (b) the person furnishes the Corporation a written undertaking,
executed personally or on his or her behalf, to repay the advance if it is ultimately determined that he or she did not meet the applicable standard of conduct; and (c) a determination is made that the facts then known to those making the determination would not preclude indemnification under the Michigan Business Corporation Act. Persons who are or were not serving as a director or executive officer of the Corporation or a subsidiary may receive similar advances of expenses to the extent authorized at any time by the board of directors, except as otherwise provided by statute or the Articles of Incorporation. Determinations under this Section shall be made in the manner specified in Section 4 of this Article. Notwithstanding the foregoing, in no event shall any advance be made in instances where the board or independent legal counsel reasonably determines that such person deliberately breached his or her duty to the Corporation or its shareholders.
Section 6. Right to Indemnification Upon Application; Procedure Upon Application. A director, executive officer or other person who is a party or threatened to be made a party to an action, suit or proceeding may apply for indemnification to the court conducting the proceeding or to another court of competent jurisdiction. On receipt of an application, the court may order indemnification if it determines that the person is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not he or she met the applicable standard of conduct set forth in Section 1 or 2 of this Article or was adjudged liable as described in Section 2 of this Article, provided, however, that if he or she was adjudged liable, his or her indemnification shall be limited to reasonable expenses incurred.
Section 7. Indemnification Under Bylaws Not Exclusive. The indemnification or advancement of expenses provided by this Article shall not be deemed exclusive of any other rights to which those seeking indemnification or advancement of expenses may be entitled under the Articles of Incorporation, any bylaw, agreement, vote of shareholders or disinterested directors, or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent, and shall inure to the benefit of the heirs, executors and administrators of such a person. The total amount of expenses advanced or indemnified from all sources shall not exceed the amount of actual expenses incurred by the person seeking indemnification or advancement of expenses. All rights to indemnification under this Article shall be deemed to be provided by a contract between the Corporation and the director, officer, employee or agent who serves in such capacity at any time while these Bylaws and other relevant provisions of the
general corporation law and other applicable law, if any, are in effect. Any repeal or modification thereof shall not affect any rights or obligations then existing.
Section 8. Insurance. The Corporation may purchase and maintain insurance on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, partner, trustee, employee or agent of another Corporation, partnership, joint venture, trust or other enterprise against any liability asserted against him or her and incurred by him or her in any such capacity, or arising out of his or her status as such, whether or not the Corporation would have the power to indemnify him or her against such liability under the provisions of this Article.
Section 9. Mergers. For the purposes of this Article, references to the "Corporation" include all constituent Corporations absorbed in a consolidation or merger, as well as the resulting or surviving Corporation, so that any person who is or was a director, officer, employee or agent of such constituent Corporation, or is or was serving at the request of such constituent Corporation as a director, officer, partner, trustee, employee or agent of another foreign or domestic Corporation, partnership, joint venture, trust or other enterprise, whether for profit or not, shall stand in the same position under the provisions of this Article with respect to the resulting or surviving Corporation if he or she had served the resulting or surviving Corporation in the same capacity.
Section 10. Savings Clause. If this Article or any portion thereof shall be invalidated on any ground by any court of competent jurisdiction, then the Corporation shall nevertheless indemnify each director, executive officer or other person whose indemnification is authorized by the board of directors as to expenses (including attorneys' fees), judgments, fines and amounts paid in settlement with respect to any action, suit or proceeding, whether civil, criminal, administrative or investigative, including a grand jury proceeding and an action by the Corporation, to the full extent permitted by any applicable portion of this Article that shall not have been invalidated or by any other applicable law.
ARTICLE IX
SUBSIDIARIES
Section 1. Subsidiaries. The board of directors, the Chief Executive Officer, or any executive officer designated by the board of directors may vote the shares of stock owned by the
Corporation in any subsidiary, whether wholly or partly owned by the Corporation, in such manner as they may deem in the best interests of the Corporation, including, without limitation, for the election of directors of any subsidiary corporation, or for any amendments to the charter or bylaws of any such subsidiary corporation, or for the liquidation, merger or sale of assets of any such subsidiary corporation. The board of directors, the Chief Executive Officer, or any executive officer designated by the board of directors may cause to be elected to the board of directors of any such subsidiary corporation such persons as they shall designate, any of whom may, but need not be, directors, executive officers, or other employees or agents of the Corporation. The board of directors, the Chief Executive Officer, or any executive officer designated by the board of directors may instruct the directors of any such subsidiary corporation as to the manner in which they are to vote upon any issue properly coming before them as the directors of such subsidiary corporation, and such directors shall have no liability to the Corporation as the result of any action taken in accordance with such instructions.
Section 2. Subsidiary Officers Not Executive Officers. The officers of any subsidiary corporation shall not, by virtue of holding such title and position, be deemed to be executive officers of the Corporation, nor shall any such officer of a subsidiary corporation, unless he or she is also a director or executive officer of the Corporation, be entitled to have access to any files, records or other information relating or pertaining to the Corporation, its business and finances, or to attend or receive the minutes of any meetings of the board of directors or any committee of the Corporation, except as and to the extent expressly authorized and permitted by the board of directors or the Chief Executive Officer.
ARTICLE X
CERTIFICATES OF STOCK
Section 1. Form. Every holder of stock in the Corporation shall be entitled to have a certificate, signed by, or in the name of the Corporation by, the Chairman of the Board, a Vice Chairman of the Board, the President, an Executive Vice President, a Senior Vice President, or a Vice President and the Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary of the Corporation, certifying the number of shares owned by him or her in the Corporation. The certificate may, but need not be, sealed with the seal of the Corporation, or a facsimile thereof.
Section 2. Facsimile Signatures. Where a certificate is signed (a) by a transfer agent or an assistant transfer agent, or (b) by a transfer clerk acting on behalf of the Corporation and a registrar, the signatures of the Chairman of the Board, Vice Chairman of the Board, President, Executive Vice President, Senior Vice President, Vice President, Treasurer, Assistant Treasurer, Secretary or Assistant Secretary may be facsimiles. In case any officer(s) or any holder(s) of a titled position who has signed, or whose facsimile signature(s) has been used on, any certificate shall cease to be such officer(s) or holder(s) before such certificate has been delivered by the Corporation, such certificate may nevertheless be issued and delivered as though the person(s) who signed such certificate or whose facsimile signature(s) appears thereon continued to be such officer(s) or holder(s) of such titled position.
Section 3. Lost Certificates. The officers may direct a new certificate to be issued in place of any certificate theretofore issued by the Corporation alleged to have been lost, stolen or destroyed upon the making of an affidavit of that fact by the person claiming the certificate of stock to be lost, stolen or destroyed. When authorizing such issue of a new certificate or certificates, the officers may, in their discretion and as a condition precedent to the issuance thereof, require the owner of such lost, stolen or destroyed certificate, or his or her legal representative, to advertise the same in such manner as it shall require and/or to give the Corporation a bond in such sum as they may direct as indemnity against any claim that may be made against the Corporation with respect to the certificate alleged to have been lost, stolen or destroyed.
Section 4. Registered Owner. The Corporation shall be entitled to recognize the exclusive rights of a person registered on its books as the owner of shares to receive dividends and to vote as such owner, and to hold liable for calls and assessments a person registered on its books as the owner of shares; the Corporation shall not be bound to recognize any equitable or other claim to or interest in such share or shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise provided by the laws of Michigan.
ARTICLE XI
GENERAL PROVISIONS
Section 1. Checks. Any signature on any check, demand or note may be signed by the facsimile signature of any person authorized by the board of directors to sign under this Section 1 of Article XI. If any officer who has signed or whose facsimile signature has been used shall cease to be such officer, such
document may nevertheless be signed by means of such facsimile signature and delivered as though the person who signed such document or whose facsimile signature has been used thereon had not ceased to be such officer.
Section 2. Fiscal Year. The fiscal year of the Corporation shall be fixed by resolution of the board of directors.
Section 3. Seal. The corporate seal shall have inscribed thereon the name of the Corporation and the words "Corporate Seal, Michigan." The seal may be used by causing it or a facsimile thereof to be impressed, affixed, reproduced or otherwise.
Section 4. Voting Securities. The Chief Executive Officer or any executive officer designated by the board of directors shall have full power and authority on behalf of the Corporation to attend and to act and to vote, or to execute in the name or on behalf of the Corporation a proxy authorizing an agent or attorney-in-fact for the Corporation to attend and to act and to vote, at any meetings of security holders of corporations in which the Corporation may hold securities, and at such meetings he or she and his or her duly authorized agent or attorney-in- fact shall possess and may exercise any and all rights and powers incident to the ownership of such securities and which, as the owner thereof, the Corporation might have possessed and exercised if present.
Section 5. Dividends. Dividends upon the capital stock of the Corporation, subject to the provisions of the Articles of Incorporation, if any, may be declared by the board of directors at any regular or special meeting pursuant to law. Dividends may be paid in cash, in property, or in shares of capital stock, subject to the provisions of the Articles of Incorporation.
Section 6. Reserves. Before payment of any dividends, there may be set aside out of any funds of the Corporation available for dividends such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve or reserves to meet contingencies, or for equalizing dividends, or for repairing or maintaining any property of the Corporation, or for such other purpose as the directors shall think conducive to the interests of the Corporation, and the directors may modify or abolish any such reserve in the manner in which it was created.
ARTICLE XII
AMENDMENTS
These Bylaws may be amended, altered, changed, added to or repealed by the shareholders at any regular or special meeting of the shareholders if notice of such action be contained in the notice of such meeting, or by the board of directors at any regular or special meeting of the board of directors.
EXHIBIT 11
EXHIBIT 12
EXHIBIT 21
SUBSIDIARIES OF REGISTRANT as of December 31, 1993
1. Old Kent Bank and Trust Company Jurisdiction of Incorporation: Michigan
2. Old Kent Bank Jurisdiction of Incorporation: Illinois
3. Old Kent Bank-Central Jurisdiction of Incorporation: Michigan
4. Old Kent Bank-Grand Traverse Jurisdiction of Incorporation: Michigan
5. Old Kent Bank-Southwest Jurisdiction of Incorporation: Michigan
6. Old Kent Bank of Grand Haven Jurisdiction of Incorporation: Michigan
7 Old Kent Bank of Holland Jurisdiction of Incorporation: Michigan
8. Old Kent Bank-Southeast Jurisdiction of Incorporation: Michigan
9. Old Kent Bank of Brighton Jurisdiction of Incorporation: Michigan
10. Old Kent Bank of Gaylord Jurisdiction of Incorporation: Michigan
11. Old Kent Bank of Petoskey Jurisdiction of Incorporation: Michigan
12. Old Kent Bank of Big Rapids Jurisdiction of Incorporation: Michigan
13. Old Kent Bank of Cadillac Jurisdiction of Incorporation: Michigan
14. Old Kent Bank of Hillsdale Jurisdiction of Incorporation: Michigan
15. Old Kent Bank of St. Johns Jurisdiction of Incorporation: Michigan
16. Old Kent Bank of Ludington Jurisdiction of Incorporation: Michigan
17. Hartger & Willard Mortgage Associates, Inc. Jurisdiction of Incorporation: Michigan
18. Old Kent Brokerage Services, Inc. Jurisdiction of Incorporation: Michigan
19. Old Kent Financial Life Insurance Company Jurisdiction of Incorporation: Arizona
20. Vanguard Financial Service Corp. Jurisdiction of Incorporation: Illinois
21. Old Kent Mortgage Company Jurisdiction of Incorporation: Michigan
EXHIBIT 23
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our report dated January 18, 1994, included in this Form 10-K, into the Corporation's previously filed registration statements, as amended, for Old Kent Financial Corporation's offering of senior and subordinated debt (Registration No. 33-46205), Incentive Stock Option Plan of 1982 (Registration No. 2-78222), Old Kent Thrift Plan (Registration No. 33-17309), Executive Stock Option Plan of 1986 (Registration No. 33-4723), Stock Option Incentive Plan of 1992 (Registration No. 33-49896), Employee Stock Purchase Plan (Registration No. 33-57334), Dividend Reinvestment Plan (Registration No. 33-33058), and the offering of common stock (Registration No. 33-51997).
/s/ Arthur Andersen & Co.
Chicago, Illinois March 29, 1994
EXHIBIT 24
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, as the case may be, of Old Kent Financial Corporation, does hereby appoint MARTIN J. ALLEN, JR.; JOHN C. CANEPA; B. P. SHERWOOD, III; and RICHARD W. WROTEN, or any of them, his or her attorneys or attorney to execute in his or her name an Annual Report of Old Kent Financial Corporation on Form 10-K for its fiscal year ended December 31, 1993, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 19, 1994 /s/ John M. Bissell John M. Bissell
EXHIBIT 24
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, as the case may be, of Old Kent Financial Corporation, does hereby appoint MARTIN J. ALLEN, JR.; JOHN C. CANEPA; B. P. SHERWOOD, III; and RICHARD W. WROTEN, or any of them, his or her attorneys or attorney to execute in his or her name an Annual Report of Old Kent Financial Corporation on Form 10-K for its fiscal year ended December 31, 1993, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 18, 1994 /s/ John D. Boyles John D. Boyles
EXHIBIT 24
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, as the case may be, of Old Kent Financial Corporation, does hereby appoint MARTIN J. ALLEN, JR.; JOHN C. CANEPA; B. P. SHERWOOD, III; and RICHARD W. WROTEN, or any of them, his or her attorneys or attorney to execute in his or her name an Annual Report of Old Kent Financial Corporation on Form 10-K for its fiscal year ended December 31, 1993, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 25, 1994 /s/ John C. Canepa John C. Canepa
EXHIBIT 24
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, as the case may be, of Old Kent Financial Corporation, does hereby appoint MARTIN J. ALLEN, JR.; JOHN C. CANEPA; B. P. SHERWOOD, III; and RICHARD W. WROTEN, or any of them, his or her attorneys or attorney to execute in his or her name an Annual Report of Old Kent Financial Corporation on Form 10-K for its fiscal year ended December 31, 1993, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 21, 1994 /s/ Earl D. Holton Earl D. Holton
EXHIBIT 24
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, as the case may be, of Old Kent Financial Corporation, does hereby appoint MARTIN J. ALLEN, JR.; JOHN C. CANEPA; B. P. SHERWOOD, III; and RICHARD W. WROTEN, or any of them, his or her attorneys or attorney to execute in his or her name an Annual Report of Old Kent Financial Corporation on Form 10-K for its fiscal year ended December 31, 1993, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 31, 1994 /s/ Michael J. Jandernoa Michael J. Jandernoa
EXHIBIT 24
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, as the case may be, of Old Kent Financial Corporation, does hereby appoint MARTIN J. ALLEN, JR.; JOHN C. CANEPA; B. P. SHERWOOD, III; and RICHARD W. WROTEN, or any of them, his or her attorneys or attorney to execute in his or her name an Annual Report of Old Kent Financial Corporation on Form 10-K for its fiscal year ended December 31, 1993, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 18, 1994 /s/ John P. Keller John P. Keller
EXHIBIT 24
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, as the case may be, of Old Kent Financial Corporation, does hereby appoint MARTIN J. ALLEN, JR.; JOHN C. CANEPA; B. P. SHERWOOD, III; and RICHARD W. WROTEN, or any of them, his or her attorneys or attorney to execute in his or her name an Annual Report of Old Kent Financial Corporation on Form 10-K for its fiscal year ended December 31, 1993, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 21, 1994 /s/ Jerry K. Myers Jerry K. Myers
EXHIBIT 24
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, as the case may be, of Old Kent Financial Corporation, does hereby appoint MARTIN J. ALLEN, JR.; JOHN C. CANEPA; B. P. SHERWOOD, III; and RICHARD W. WROTEN, or any of them, his or her attorneys or attorney to execute in his or her name an Annual Report of Old Kent Financial Corporation on Form 10-K for its fiscal year ended December 31, 1993, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 19, 1994 /s/ William U. Parfet William U. Parfet
EXHIBIT 24
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, as the case may be, of Old Kent Financial Corporation, does hereby appoint MARTIN J. ALLEN, JR.; JOHN C. CANEPA; B. P. SHERWOOD, III; and RICHARD W. WROTEN, or any of them, his or her attorneys or attorney to execute in his or her name an Annual Report of Old Kent Financial Corporation on Form 10-K for its fiscal year ended December 31, 1993, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 19, 1994 /s/ Percy A. Pierre Percy A. Pierre
EXHIBIT 24
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, as the case may be, of Old Kent Financial Corporation, does hereby appoint MARTIN J. ALLEN, JR.; JOHN C. CANEPA; B. P. SHERWOOD, III; and RICHARD W. WROTEN, or any of them, his or her attorneys or attorney to execute in his or her name an Annual Report of Old Kent Financial Corporation on Form 10-K for its fiscal year ended December 31, 1993, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
March 29, 1994 /s/ Robert L. Sadler Robert L. Sadler
EXHIBIT 24
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, as the case may be, of Old Kent Financial Corporation, does hereby appoint MARTIN J. ALLEN, JR.; JOHN C. CANEPA; B. P. SHERWOOD, III; and RICHARD W. WROTEN, or any of them, his or her attorneys or attorney to execute in his or her name an Annual Report of Old Kent Financial Corporation on Form 10-K for its fiscal year ended December 31, 1993, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 16, 1994 /s/ Peter F. Secchia Peter F. Secchia
EXHIBIT 24
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, as the case may be, of Old Kent Financial Corporation, does hereby appoint MARTIN J. ALLEN, JR.; JOHN C. CANEPA; B. P. SHERWOOD, III; and RICHARD W. WROTEN, or any of them, his or her attorneys or attorney to execute in his or her name an Annual Report of Old Kent Financial Corporation on Form 10-K for its fiscal year ended December 31, 1993, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 25, 1994 /s/ B. P. Sherwood, III B. P. Sherwood, III
EXHIBIT 24
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, as the case may be, of Old Kent Financial Corporation, does hereby appoint MARTIN J. ALLEN, JR.; JOHN C. CANEPA; B. P. SHERWOOD, III; and RICHARD W. WROTEN, or any of them, his or her attorneys or attorney to execute in his or her name an Annual Report of Old Kent Financial Corporation on Form 10-K for its fiscal year ended December 31, 1993, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 25, 1994 /s/ Martha L. Thornton Martha L. Thornton
EXHIBIT 24
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, as the case may be, of Old Kent Financial Corporation, does hereby appoint MARTIN J. ALLEN, JR.; JOHN C. CANEPA; B. P. SHERWOOD, III; and RICHARD W. WROTEN, or any of them, his or her attorneys or attorney to execute in his or her name an Annual Report of Old Kent Financial Corporation on Form 10-K for its fiscal year ended December 31, 1993, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 26, 1994 /s/ David J. Wagner David J. Wagner
EXHIBIT 24
POWER OF ATTORNEY
The undersigned, in his or her capacity as a director or officer, or both, as the case may be, of Old Kent Financial Corporation, does hereby appoint MARTIN J. ALLEN, JR.; JOHN C. CANEPA; B. P. SHERWOOD, III; and RICHARD W. WROTEN\, or any of them, his or her attorneys or attorney to execute in his or her name an Annual Report of Old Kent Financial Corporation on Form 10-K for its fiscal year ended December 31, 1993, and any amendments to that report, and to file it with the Securities and Exchange Commission. Each attorney shall have power and authority to do and perform in the name and on behalf of the undersigned, in any and all capacities, every act to be done in the premises as fully and to all intents and purposes as the undersigned could do in person, and the undersigned hereby ratifies and approves the acts of such attorneys.
Date Signature
January 25, 1994 /s/ Richard W. Wroten Richard W. Wroten Officer
EXHIBIT 99
OLD KENT THRIFT PLAN PERFORMANCE TABLE
March 25, 1994
The following table illustrates the comparative investment performance of the four investment options offered under the Old Kent Thrift Plan. The performance of some or all of these options also serves as a measure for determining benefits under the Executive Thrift Plan and the Deferred Compensation Plan. The table shows the value of a hypothetical initial investment of $1,000 invested on December 31, 1990 and its value as of December 31 of each subsequent year shown below:
This document constitutes part of a prospectus covering securities that have been registered under the Securities Act of 1933.