First Security Corp. reported first-quarter earnings Wednesday of 29 cents per share (before charges related to its failed merger with Zions Bancorp) for the first quarter of 2000, down 12.1 percent from the fourth quarter of 1999 but a much stronger performance than the 25 percent to 27 percent decline the company had warned last month might be coming in the first quarter.

It was that dire forecast, issued on March 3, that sent First Security stock -- as well as the shares of its then merger partner, Zions Bancorp -- into a tailspin that eventually led to the deal being voted down by Zions' shareholders.Now, First Security is preparing to be acquired by San Francisco-based Wells Fargo & Co., a merger in which each FSCO share will be converted into 0.355 share of Wells Fargo stock, a deal valued at some $3.2 billion. That merger is expected to be completed in the third quarter, pending regulatory and shareholder approvals.

The company said in its quarterly earnings report Wednesday that the better than expected results are due to its "aggressive effort to reposition its mortgage business, to improve the net interest margin, and to return to more normalized chargeoffs in the consumer loan area."

Spencer F. Eccles, chairman and chief executive officer, termed the past 12 months "very challenging" for the bank holding company and its shareholders and credited the "resiliency and dedication" of his employees and "loyalty and respect" of customers for boosting first quarter earnings above expectations.

Excluding pre-tax charges of $36 million ($23.4 million after tax), first quarter earnings totaled $58.4 million. When the merger charges are included, net income totaled $35.0 million or 17 cents per share.

In addition to the merger termination expenses, First Security's first quarter earnings reflect the impact on earnings created by the merger and the slowdown in the company's mortgage banking business as well as higher interest rates.

Eccles said that during the past few weeks, First Security has done an analysis of its business lines and earnings capacity in the face of rising interest rates which has hurt its mortgage lending and other lines of business. "We are comfortable that we will earn between $1.18 and $1.23 per share for 2000 on a stand-alone basis" and before any costs from disentangling itself from Zions.