-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JMDLd2T6uRJq78+b4d1fvd/bP707VS8jnm/XygAnfi05zvsNwhGL1bzhEk5aRDn3 5UEaePlja0D7KlWAHkoptg== 0000950123-97-005261.txt : 19970625 0000950123-97-005261.hdr.sgml : 19970625 ACCESSION NUMBER: 0000950123-97-005261 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970623 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19970624 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: WACHOVIA CORP/ NC CENTRAL INDEX KEY: 0000774203 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 561473727 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-09021 FILM NUMBER: 97628596 BUSINESS ADDRESS: STREET 1: 100 NORTH MAIN ST CITY: WINSTON SALEM STATE: NC ZIP: 27101 BUSINESS PHONE: 9197705000 MAIL ADDRESS: STREET 1: 100 NORTH MAIN ST CITY: WINSTON SALEM STATE: NC ZIP: 27101 FORMER COMPANY: FORMER CONFORMED NAME: FIRST WACHOVIA CORP DATE OF NAME CHANGE: 19910603 8-K 1 FORM 8-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): June 23, 1997 WACHOVIA CORPORATION (Exact Name of Registrant as specified in its charter) NORTH CAROLINA No. 1-9021 No. 56-1473727 (State or other jurisdiction of (Commission (IRS employer incorporation) File Number) Identification No.) 100 NORTH MAIN STREET, WINSTON-SALEM, NC 27101 191 PEACHTREE STREET NE, ATLANTA, GA 30303 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: WINSTON-SALEM 910-770-5000 ATLANTA 404-332-5000 Not applicable (Registrant's former address of principal executive offices) 2 Item 5. Other Events. On June 23, 1997, Wachovia Corporation, a North Carolina corporation (the "Registrant"), entered into an Agreement and Plan of Merger by and between the Registrant and Central Fidelity Banks, Inc., a Virginia corporation ("Central"), for a tax-free merger of the two companies pursuant to which each outstanding share of common stock, par value $5.00 per share, of Central would be converted into 0.63 shares of common stock, par value $5.00 per share, of the Registrant (the "Proposed Merger"). This current report on Form 8-K, including the investor materials, contains forward-looking statements that involve risk and uncertainty. The Registrant notes that a variety of factors could cause the Registrant's actual results and experience to differ materially from the anticipated results or other expectations expressed in the Registrant's forward-looking statements. The risks and uncertainties that may affect the operations, performance, development, growth projections and results of the Registrant's business include, but are not limited to, the growth of the economy, interest rate movements, timely development by the Registrant of technology enhancements for its products and operating systems, the impact of competitive products, services and pricing, customer business requirements, Congressional legislation, acquisition cost savings and revenue enhancements and similar matters. Readers of this report are cautioned not to place undue reliance on forward-looking statements which are subject to influence by the named risk factors and unanticipated future events. Actual results, accordingly, may differ materially from management expectations. Item 7. Financial Statements and Exhibits (c) Exhibits. 99.1 Press release dated June 24, 1997 announcing the Proposed Merger. 99.2 Investor presentation materials used by the Registrant on June 24, 1997 relating to the Proposed Merger. -2- 3 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date June 24, 1997 WACHOVIA CORPORATION By: /s/ Kenneth W. McAllister ---------------------------------- Name: Kenneth W. McAllister Title: Executive Vice-President -3- 4 Exhibit Index 99.1 Press release dated June 24, 1997 announcing the Proposed Merger. 99.2 Investor presentation materials used by the Registrant on June 24, 1997 relating to the Proposed Merger. -4- EX-99.1 2 PRESS RELEASE 1 For Additional Information: Susan Mistr, Central Fidelity, 804-697-7261 Paul E. Mason, Wachovia, 910-732-6387 June 24, 1997 FOR RELEASE: Immediately WACHOVIA, CENTRAL FIDELITY BANKS INC. ANNOUNCE MERGER Central Fidelity Banks Inc., the parent of Central Fidelity National Bank in Richmond, Va., and Wachovia Corporation announced the signing of a definitive agreement for a merger between the two companies. The agreement has been approved by the boards of directors of both companies and is subject to the approval of shareholders and appropriate regulatory agencies. The merger is expected to close in the fourth quarter. The merger with Central Fidelity, combined with Wachovia's recently announced acquisition of Jefferson Bankshares Inc. of Charlottesville, Va., will position Wachovia as the leading bank in Virginia with 335 branch offices and deposits totaling $9.9 billion. Upon completion of both mergers, Wachovia will have assets totaling approximately $60.2 billion, making it the 17th largest bank in the country, and a retail banking network totaling 817 banking offices and 1,134 ATMs throughout Virginia, the Carolinas and Georgia. The agreement with Central Fidelity is expected to be accounted for as a pooling of interests and provides for a tax-free exchange of .63 shares of Wachovia Corporation common stock for each common share of Central Fidelity. Based on Wachovia Corporation's June 23 closing stock price and Central Fidelity's 58.8 million fully diluted shares, the transaction would have a value of approximately $39.45 per share, or a purchase price of $2.3 billion. The merger is expected to have a positive impact on Wachovia's earnings in 1999. Wachovia Chief Executive L.M. Banker Jr. said, "Central Fidelity has an impressive franchise throughout Virginia. The company's culture is quite similar to Wachovia's, with a focus on meeting customer needs and a relationship-management approach to the market. I am very excited about the opportunity to merge our companies and look forward to introducing Wachovia's services to individuals and businesses across this great commonwealth." - more - 2 Merger Agreement - Page 2 "In looking at our industry recently, and after careful consideration of the challenges we face, we determined that the best way to serve our customers and build value for shareholders was to form an alliance with another bank, one that shares our philosophy for doing business," said Lewis N. Miller Jr., Chairman and Chief Executive Officer of Central Fidelity Banks Inc. "In seeking a partner, there was one obvious choice--Wachovia. It is only natural that the best bank in Virginia would choose as its partner the best bank in the nation." Central Fidelity, headquartered in Richmond, Va., had assets of $10.6 billion as of March 31, 1997, and is the third largest Virginia-based banking company with 244 offices and 221 ATMs throughout the commonwealth. Central Fidelity is among the top three banks in market share in five of the six largest markets in Virginia. Central Fidelity has granted Wachovia a stock option representing approximately 19.9 percent of Central Fidelity's outstanding shares. Wachovia also announced that it and Central Fidelity each have terminated their stock repurchase programs. On June 10, Wachovia announced that it has reached a definitive agreement to merge with Jefferson Bankshares. As of March 31, Jefferson Bankshares had assets of $2.1 billion. Jefferson National Bank has 96 offices and 60 ATMs. Jefferson National has the No. 1 deposit share in Charlottesville with additional branch presence in the Tidewater, Richmond, Fredericksburg and Shenandoah Valley areas of Virginia. Wachovia Corporation, which has dual headquarters in Winston-Salem, N.C., and Atlanta, is the 20th largest U.S. banking company with assets of $47.5 billion. Wachovia has 473 banking offices and 830 ATMs, predominately in North Carolina, South Carolina and Georgia. U.S. Banker magazine recently rated Wachovia the No. 1 bank in the country for 1996 among banks with assets of more than $25 billion. THIS ANNOUNCEMENT ALSO IS AVAILABLE ON PR NEWSWIRE. ADDITIONAL INFORMATION ON WACHOVIA CORPORATION AND ITS SUBSIDIARIES IS AVAILABLE ON THE INTERNET AT HTTP://WWW.WACHOVIA.COM. EDITOR/REPORTER ADVISORY: Central Fidelity and Wachovia invite you to participate in a 12 p.m. telephone news conference today. Executives from Central Fidelity, Wachovia and Jefferson Bankshares will be available to discuss the merger. To participate in the call, dial 1-800-611-1147 and ask to participate in the "Central Fidelity News Conference." Please call in between 11:45 a.m. and 12 p.m. No calls will be admitted to the news conference after 12 p.m. A recording of the news conference will be available from 3 p.m. Tuesday to 3 p.m. Wednesday at 1-800-475-6701, Access Code #346881. EX-99.2 3 INVESTOR PRESENTATION MATERIALS 1 CREATING VIRGINIA'S PREMIER BANKING FRANCHISE [WACHOVIA LOGO] Merger with [CENTRAL FIDELITY LOGO] June 24, 1997 2 This presentation contains certain forward looking statements with respect to the financial condition, results of operations and business of Wachovia Corporation and, assuming the consummation of the merger, a combined Wachovia Corporation/Central Fidelity Banks, Inc., including statements relating to: (a) the cost savings and accretion to cash earnings and reported earnings that will be realized from the merger; (b) the impact on revenues of the merger, including the potential for enhanced revenues and the impact on revenues of consolidation of retail branches and other operations as planned: and (c) the restructuring charges expected to be incurred in connection with the merger. These forward looking statements involve certain risks and uncertainties. Factors that may cause actual results to differ materially from those contemplated by such forward looking statements include, among others, the following possibilities: (1) expected costs savings from the merger cannot be fully realized or realized within the expected time frame; (2) revenues following the merger are lower than expected; (3) competitive pressure among depository institutions increases significantly; (4) costs or difficulties related to the integration of the businesses of Wachovia Corporation and Central Fidelity Banks, Inc. are greater than expected; (5) changes in the interest rate environment reduce interest margins; (6) general economic conditions, either nationally or in the states in which the combined company will be doing business, are less favorable than expected; or (7) legislation or regulatory changes adversely affect the businesses in which the combined company would be engaged. [WACHOVIA LOGO] 1 [CENTRAL FIDELITY LOGO] 3 TRANSACTION RATIONALE - -------------------------------------------------------------------------------- - Creates Virginia's Premier Banking Franchise - Attractive growth market - Positions WB as the premier player in the state - Leadership position in major MSAs - Financially Attractive - Accretive to reported EPS by 4th Q 1998, prior to merger expenses - Significant cost savings and revenue enhancement opportunities - Best of class operating and credit quality statistics - Low Risk - Virginia strategy represents less than 25% of WB's market cap. - Solidifies balance sheet position - WB is acquisition-ready [WACHOVIA LOGO] 2 [CENTRAL FIDELITY LOGO] 4 TRANSACTION SUMMARY - -------------------------------------------------------------------------------- CONSIDERATION: 0.63 WB shares for each CFBS share TERMS: Fixed Exchange Ratio 19.9% Stock Option ($32.19 Exercise Price) No Caps, Collars or Walkaways PRICE PER SHARE: $39.45 per CFBS share* TRANSACTION VALUE: $2.3 billion* STRUCTURE: Pooling of Interests/Tax-Free Exchange EXPECTED CLOSING: 4th Quarter 1997 SHARE REPURCHASE: Both companies to suspend announced share repurchase initiatives BOARD COMPOSITION: 3 CFBS members added to WB's Board - ---------- * Based on WB's closing share price of $62.625 on June 23, 1997 [WACHOVIA LOGO] 3 [CENTRAL FIDELITY LOGO] 5 TRANSACTION PRICING ================================================================================
- -------------------------------------------------------------------------------- CFBS CFBS ACQUISITION WITH WB TRADING ACQUISITION SYNERGIES(1) MULTIPLES - -------------------------------------------------------------------------------- Aggregate Value $2.3B $2.3B $10.2B Price to: LTM EPS 19.8x 13.9x 16.0x 1997E EPS(2) 18.3 13.0 15.1 1998E EPS(2) 16.6 12.2 13.6 Book Value 2.99 2.99 2.75 Tangible Book Value 3.24 3.24 2.78
- -------------------------------------------------------------------------------- (1) Includes the full phase-in of cost savings and revenue enhancements associated with the transaction. (2) Based on I.B.E.S. estimates. [WACHOVIA LOGO] 4 [CENTRAL FIDELITY LOGO] 6 TRANSACTION PRICING ================================================================================
- -------------------------------------------------------------------------------- TOTAL VIRGINIA STRATEGY WB TRADING WITH SYNERGIES(1) MULTIPLES - -------------------------------------------------------------------------------- Aggregate Value $2.9B $10.2B Price to: LTM EPS 13.9x 16.0x 1997E EPS(2) 13.1 15.1 1998E EPS(2) 12.3 13.6 Book Value 2.93 2.75 Tangible Book Value 3.15 2.78
- -------------------------------------------------------------------------------- (1) Reflects acquisition of both CFBS and JBNK, and includes full phase-in of cost savings and revenue enhancements associated with both transactions. (2) Based on I.B.E.S. estimates. [WACHOVIA LOGO] 5 [CENTRAL FIDELITY LOGO] 7 TRANSACTION ECONOMICS ================================================================================ - Accretive to reported EPS by 4th Q 1998, before merger related costs - 4% accretive to reported 1999E EPS - Significant cost savings and revenue enhancement opportunities - Cost savings equal to 30% of CFBS's operating expenses - Revenue enhancements equal to at least 10% of non-interest income - Ability to reinvest additional capital created - Non-recurring charges - $174 million pre-tax - $117 million taken through one-time charge in 1997 - $57 million expensed in 1998 [WACHOVIA LOGO] 6 [CENTRAL FIDELITY LOGO] 8 LOW RISK STRATEGY ================================================================================ - Two transactions represent less than 25% of WB's pro forma total assets and market capitalization - In-market cost savings are available - Market is adjacent and complementary - Familiar competitive landscape - Solidifies balance sheet position - WB is acquisition - ready [WACHOVIA LOGO] 7 [CENTRAL FIDELITY LOGO] 9 PRO FORMA OVERVIEW ================================================================================
(Data as of March 31, 1997) - -------------------------------------------------------------------------------- WB WB STAND ALONE (1) PRO FORMA (2) - -------------------------------------------------------------------------------- Assets $47.5B $60.8B Deposits 28.8 38.7 Branches 483 817 ATMs 830 1,134 Market Capitalization(3) $10.2B $13.0B Tangible Leverage Ratio 8.93% 9.14%
- -------------------------------------------------------------------------------- (1) Before acquisition of CFBS and JBNK. (2) Pro forma acquisition of CFBS and JBNK. (3) Based on WB's closing share price of $62.625 on June 23, 1997. [WACHOVIA LOGO] 8 [CENTRAL FIDELITY LOGO] 10 ================================================================================ CREATES VIRGINIA'S PREMIER FRANCHISE ================================================================================ [WACHOVIA LOGO] [CENTRAL FIDELITY LOGO] 11 ATTRACTIVE AND COMPLEMENTARY MARKET ================================================================================ [MAP] Percent MSA Households in the Attractive Segments as of 1996* * Based on ranking of MSAs on percent of households in attractive segments solely within the states of GA, NC, SC, & VA. " Attractive segments" include younger affluent, affluent, middle core, older upscale & older mass market PSI segments. [WACHOVIA LOGO] 9 [CENTRAL FIDELITY LOGO] 12 PREMIER VIRGINIA FRANCHISE ================================================================================ - - WB will be the leading bank in Virginia
- -------------------------------------------------------------------------------- MARKET SHARE DEPOSITS BRANCHES - -------------------------------------------------------------------------------- 1. WB PRO FORMA 13.6% $9.9B 335(1) 2. NationsBank 13.5 9.7 211 3. Crestar 12.8 9.2 252 4. First Union 9.6 6.9 144 5. First Virginia 8.8 6.3 311
- -------------------------------------------------------------------------------- (1) Before planned branch consolidations. [WACHOVIA LOGO] 10 [CENTRAL FIDELITY LOGO] 13 STRONG VIRGINIA MARKET PRESENCE ================================================================================ - - Top three position in five of the six largest MSAs
- -------------------------------------------------------------------------------- DEPOSIT MARKET MSAs RANK SIZE - -------------------------------------------------------------------------------- Charlottesville 1 $1,520MM Lynchburg 1 2,381 Norfolk/Virginia Beach 1 9,933 Richmond/Petersburg 3 16,560 Roanoke 3 3,614 - --------------------------------------------------------------------------------
[WACHOVIA LOGO] 11 [CENTRAL FIDELITY LOGO] 14 ================================================================================ FINANCIALLY ATTRACTIVE ================================================================================ [WACHOVIA LOGO] [CENTRAL FIDELITY LOGO] 15 FINANCIALLY ATTRACTIVE TRANSACTION ================================================================================ - - Accretive to reported EPS by 4th Q 1998, before merger related expenses - Significant cost savings and revenue enhancement opportunities - Meaningful opportunities to leverage additional capital created - Best of class operating and credit quality statistics - - Low risk transaction - Represents less than 25% of WB's pro forma market capitalization - Solidifies balance sheet position - WB is acquisition - ready [WACHOVIA LOGO] 12 [CENTRAL FIDELITY LOGO] 16 EARNINGS IMPACT ================================================================================
(Dollars in Millions; Except For Per Share Amounts) - -------------------------------------------------------------------------------- 1997 1998 1999 - -------------------------------------------------------------------------------- WB Estimated Net Income(1) $ 672 $ 744 $ 820 JBNK Estimated Net Income(2) 8 32 34 Cost Savings/Revenue Enhancements 2 6 13 Goodwill Amortization (4) (17) (17) CFBS Estimated Net Income(2) 125 136 146 Cost Savings/Revenue Enhancements -- 27 58 Return on Additional Capital Created (3) -- 20 40 Merger Related Charges (81) (34) -- ------- ------- ------- WB Reported Est. Net Income $ 722 $ 914 $ 1,094 WB Stand Alone Est. EPS $ 4.15 $ 4.59 $ 5.05 Est. Pro Forma Reported EPS 3.59 4.38 5.24 Accretion/(Dilution) (13.5)% (4.6)% 3.8% Avg. Shares Outstanding (Millions) 201.3 208.5 208.5
- -------------------------------------------------------------------------------- (1) 1997 and 1998 based on mean I.B.E.S. estimates, with 10% growth rate in 1999. (2) 1997 and 1998 based on mean I.B.E.S. estimates with 8.0% and 7.5% growth rate in 1999 for JBNK and CFBS, respectively. (3) Assumes additional capital (defined as capital in excess of tangible leverage ratio of 8.50% resulting from transaction) to be redeployed at an after tax rate of 8%. [WACHOVIA LOGO] 13 [CENTRAL FIDELITY LOGO] 17 COST SAVINGS ESTIMATES ================================================================================ - - Contribution from in-market nature of JBNK allows for total cost savings equal to 30% of CFBS's expense base
(Dollars in Millions) - -------------------------------------------------------------------------------- CFBS EXPENSE PROJ. COST % OF BASE SAVINGS EXPENSE - -------------------------------------------------------------------------------- Personnel $151 $ 55 36% Occupancy 31 6 19 Equipment 19 4 21 Other 63 14 22 ---- ---- TOTAL $264 $ 79 30% - --------------------------------------------------------------------------------
[WACHOVIA LOGO] 14 [CENTRAL FIDELITY LOGO] 18 SIGNIFICANT REVENUE ENHANCEMENT OPPORTUNITIES ================================================================================ - - Revenue enhancements estimates of 10% of CFBS's non-interest income base are driven by: - Broader array of products - Repricing initiatives - No assumptions made with regard to potential funding advantages - - Pro forma for projected revenue enhancements, the VA franchise's fee income will reach 21% of total revenues [WACHOVIA LOGO] 15 [CENTRAL FIDELITY LOGO] 19 ENHANCED PROFITABILITY LEVELS ================================================================================
(Data as of March 31, 1997) - -------------------------------------------------------------------------------- WB STAND WB PRO ALONE (1) FORMA (2) - -------------------------------------------------------------------------------- Net Interest Margin 4.14% 4.17% Efficiency Ratio 52.2 49.6 ROAA 1.42 1.47 ROAE 17.9 18.4(3)
- -------------------------------------------------------------------------------- (1) Before acquisition of CFBS and JBNK. (2) Pro forma acquisition of CFBS and JBNK, assuming full realization of cost savings and synergies. (3) ROAE prior to impact of restructuring charge. Based on tangible returns on tangible common equity. [WACHOVIA LOGO] 16 [CENTRAL FIDELITY LOGO] 20 SUPERIOR ASSET QUALITY ================================================================================ - - Asset quality statistics remain best of class
(Data as of March 31, 1997; Dollars in Millions) - -------------------------------------------------------------------------------- WB PRO WB JBNK CFBS FORMA - -------------------------------------------------------------------------------- Nonperforming Loans (NPLs) $ 58 $ 5 $ 38 $100 REO 16 2 16 33 ---- ---- ---- ---- Nonperforming Assets (NPAs) $ 73 $ 6 $ 53 $133 Loan Loss Reserves $409 $ 15 $110 $549(1) Reserves/Total Loans 1.26% 1.08% 1.62% 1.35% Reserves/NPLs 707 335 293 550 NPLs/Loans 0.18% 0.32% 0.56% 0.25% NPAs/Loans & REO 0.23 0.45 0.78 0.33
- -------------------------------------------------------------------------------- (1) Includes $15 million of additional loan loss reserves. N.B. Totals may not foot because of rounding. [WACHOVIA LOGO] 17 [CENTRAL FIDELITY LOGO] 21 POSITIVE BALANCE SHEET IMPACT ================================================================================ - - Transactions improve WB's funding mix, liquidity and capital ratios
(Dollars in Millions) - -------------------------------------------------------------------------------- WB WB STAND ALONE (1) PRO FORMA (2) - -------------------------------------------------------------------------------- Loans $32,570 $40,781 Total Assets 47,491 60,842 Deposits 28,832 38,736 Loans/Deposits 113% 105% Deposits/Liabilities 66.7 70.6 Tangible Leverage Ratio 8.93% 9.14%
- -------------------------------------------------------------------------------- (1) Before acquisition of CFBS and JBNK. (2) Pro forma acquisition of CFBS and JBNK. [WACHOVIA LOGO] 18 [CENTRAL FIDELITY LOGO] 22 SUMMARY ================================================================================ - - Creates Virginia's Premier Banking Franchise - Attractive growth market - Positions WB as the premier player in the state - Leadership position in major MSAs - - Financially Attractive - Accretive to reported EPS by 4th Q 1998, prior to merger expenses - Significant cost savings and revenue enhancement opportunities - Best of class operating and credit quality statistics - - Low Risk - Virginia strategy represents less than 25% of WB's pro forma market capitalization - Solidifies balance sheet position - Wachovia is acquisition-ready [WACHOVIA LOGO] 19 [CENTRAL FIDELITY LOGO] -----END PRIVACY-ENHANCED MESSAGE-----