-----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, TQ1zNsQKpLABDKFQCSd+6lRi25uHfZT8eSaTS1YlVgDjla8+TIRoc/+WgxmALb3r F/J+MNLg2RCpE00krSM5jQ== 0000092230-96-000021.txt : 19960717 0000092230-96-000021.hdr.sgml : 19960717 ACCESSION NUMBER: 0000092230-96-000021 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19960715 FILED AS OF DATE: 19960716 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: SOUTHERN NATIONAL CORP /NC/ CENTRAL INDEX KEY: 0000092230 STANDARD INDUSTRIAL CLASSIFICATION: NATIONAL COMMERCIAL BANKS [6021] IRS NUMBER: 560939887 STATE OF INCORPORATION: NC FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10853 FILM NUMBER: 96595456 BUSINESS ADDRESS: STREET 1: 500 N CHESTNUT ST CITY: LUMBERTON STATE: NC ZIP: 28358 BUSINESS PHONE: 9196712000 MAIL ADDRESS: STREET 1: 500 NORTH CHESTNUT STREET CITY: LUMBERTON STATE: NC ZIP: 28358 11-K 1 Savings and Thrift Plan for The Employees of Branch Banking and Trust Company Financial Statements as of December 31, 1995 and 1994 Together with Reports of Independent Public Accountants Report of Independent Public Accountants To the Savings and Thrift Plan Committee of Branch Banking and Trust Company: We have audited the accompanying statement of net assets available for plan benefits, with fund information, of the Savings and Thrift Plan for The Employees of Branch Banking and Trust Company (the Plan) as of December 31, 1995, and the related statement of changes in net assets available for plan benefits, with fund information, for the year ended December 31, 1995. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit 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 audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan as of December 31, 1995, and the changes in net assets available for plan benefits for the year ended December 31, 1995, in conformity with generally accepted accounting principles. Our audit was performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary schedules of assets held for investment purposes and reportable transactions are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The fund information in the statement of net assets available for plan benefits and the statement of changes in net assets available for plan benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. The supplemental schedules and fund information have been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. As explained in the notes thereto, information presented in the schedule of assets held for investment purposes does not disclose the historical cost for investments. Disclosure of this information is required by the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. As explained in the notes thereto, the Plan has not presented the schedule of reportable transactions (transactions in excess of 5% of the current value of plan assets at the beginning of the year) for the BB&T U.S. Treasury Money Market Fund, the BB&T Intermediate U.S. Government Bond Fund, the BB&T Growth and Income Stock Fund, the BB&T Balanced Fund, the BB&T Small Company Growth Fund and the BB&T five-year bank investment contracts. Disclosure of this information is required by the Department of Labor Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. ARTHUR ANDERSEN LLP Charlotte, North Carolina, July 12, 1996 INDEPENDENT AUDITORS' REPORT The Savings and Thrift Plan Committee Branch Banking and Trust Company: We have audited the accompanying statement of net assets available for plan benefits of the Savings and Thrift Plan for the Employees of Branch Banking and Trust Company (the "Plan") as of December 31, 1994, and the related statements of changes in net assets available for plan benefits for each of the years in the two-year period ended December 31, 1994. These financial statements are the responsibility of the Plan'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 net assets available for plan benefits of the Plan as of December 31, 1994, and changes in net assets available for plan benefits for each of the years in the two-year period ended December 31, 1994, in conformity with generally accepted accounting principles. Our audits were made for the purpose of forming an opinion on the basic financial statements taken as a whole. The fund information in the statement of net assets available for plan benefits and the statement of changes in net assets available for plan benefits is presented for purposes of additional analysis rather than to present the net assets available for plan benefits and changes in net assets available for plan benefits of each fund. The fund information has been subjected to the auditing procedures applied in the audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole. KPMG Peat Marwick LLP May 2, 1995 Savings and Thrift Plan for The Employees of Branch Banking and Trust Company Statement of Net Assets Available for Plan Benefits, With Fund Information December 31, 1995
Southern National Money Fixed Corporation Bank Market Income Equity Common Investment Balanced Fund Fund Fund Stock Fund Contracts Fund Assets: Investments at fair value- Common stock $0 $0 $ 0 $93,955,513 $ 0 $ 0 Mutual funds 0 5,033,017 10,567,435 0 0 356,884 Five year bank investment contracts 0 0 0 0 4,559,575 0 BB&T U.S. Treasury Money Market Fund 11,755,693 0 0 0 0 0 11,755,693 5,033,017 10,567,435 93,955,513 4,559,575 356,884 Investments at cost - Participant loans 0 0 0 0 0 0 Total investments 11,755,693 5,033,017 10,567,435 93,955,513 4,559,575 356,884 Cash 0 0 0 614,883 0 0 Accrued interest receivable 290 0 0 0 0 0 Total assets 11,755,983 5,033,017 10,567,435 94,570,396 4,559,575 356,884 Notes payable 0 0 0 0 0 0 Accrued expenses 0 0 0 0 0 0 Total liabilities 0 0 0 0 0 0 Net assets available for plan benefits $11,755,983 $5,033,017 $10,567,435 $94,570,396 $4,559,575 $356,884 Small Company Liabilities Growth Loan to be ESOP Fund Fund Allocated Allocated Unallocated Total Assets: Investments at fair value- Common stock $ 0 $ 0 $ 0 $6,459,923 $4,566,587 $104,982,023 Mutual funds 780,087 0 0 0 0 16,737,423 Five year bank investment contracts 0 0 0 0 0 4,559,575 BB&T U.S. Treasury Money Market Fund 0 0 0 0 0 11,755,693 780,087 0 0 6,459,923 4,566,587 138,034,714 Investments at cost - Participant loans 0 2,674,538 0 0 0 2,674,538 Total investments 780,087 2,674,538 0 6,459,923 4,566,587 140,709,252 Cash 0 0 0 327 0 615,210 Accrued interest receivable 0 0 0 0 0 290 Total assets 780,087 2,674,538 0 6,460,250 4,566,587 141,324,752 Notes payable 0 0 0 0 2,011,234 2,011,234 Accrued expenses 0 0 41,008 0 0 41,008 Total liabilities 0 0 41,008 0 2,011,234 2,052,242 Net assets available for plan benefits $780,087 $2,674,538 ($41,008) $6,460,250 $2,555,353 $139,272,510 The accompanying notes to financial statements are an integral part of this statement. Savings and Thrift Plan for The Employees of Branch Banking and Trust Company Statement of Net Assets Available for Plan Benefits, With Fund Information December 31, 1994 BB&T Financial Money Fixed Corporation Market Income Equity Common Fund Fund Fund Stock Fund Assets: Investments at fair value- Common stock $0 $0 $0 $58,888,284 Mutual funds 0 4,042,294 6,307,322 0 Five year bank investment contracts 0 0 0 0 BB&T U.S. Treasury Money Market Fund 12,203,492 48,207 310,974 140,800 12,203,492 4,090,501 6,618,296 59,029,084 Investments at cost - Participant loans 1,094,600 221,378 132,111 1,092,546 Total investments 13,298,092 4,311,879 6,750,407 60,121,630 Cash on deposit at Branch Banking and Trust Company 0 0 0 0 Accrued interest receivable 42,176 22,174 169,722 195 Due from (to) other funds (283,454) 43,375 75,573 164,506 Total assets 13,056,814 4,377,428 6,995,702 60,286,331 Notes payable 0 0 0 0 Due to plan sponsor 4,853 1,700 2,805 21,216 Total liabilities 4,853 1,700 2,805 21,216 Net assets available for plan benefits $13,051,961 $4,375,728 $6,992,897 $60,265,115 Bank Investment ESOP Contracts Allocated Unallocated Total Assets: Investments at fair value- Common stock $0 $2,112,540 $4,791,672 $65,792,496 Mutual funds 0 0 0 10,349,616 Five year bank investment contracts 3,813,747 0 0 3,813,747 BB&T U.S. Treasury Money Market Fund 0 0 0 12,703,473 3,813,747 2,112,540 4,791,672 92,659,332 Investments at cost - Participant loans 131,590 0 0 2,672,225 Total investments 3,945,337 2,112,540 4,791,672 95,331,557 Cash on deposit at Branch Banking and Trust Company 0 3,164 22 3,186 Accrued interest receivable 18,571 0 0 252,838 Due from (to) other funds 0 0 0 0 Total assets 3,963,908 2,115,704 4,791,694 95,587,581 Notes payable 0 0 3,264,551 3,264,551 Due to plan sponsor 1,507 0 0 32,081 Total liabilities 1,507 0 3,264,551 3,296,632 Net assets available for plan benefits $3,962,401 $2,115,704 $1,527,143 $92,290,949 The accompanying notes to financial statements are an integral part of this statement. Savings and Thrift Plan for The Employees of Branch Banking and Trust Company Statement of Changes in Net Assets Available for Plan Benefits, With Fund Information For the Year Ended December 31, 1995 Southern National Money Fixed Corporation Bank Market Income Equity Common Investment Balanced Fund Fund Fund Stock Fund Contracts Fund Additions to net assets attributed to: Investment income - Dividends 0 0 17,212 2,788,482 0 0 Interest 615,702 307,504 101,398 23,096 279,718 4,664 Net appreciation in value of investments 0 412,524 2,265,500 20,457,254 0 15,316 Total investment income 615,702 720,028 2,384,110 23,268,832 279,718 19,980 Contributions- Employer $379,716 $180,148 $424,578 $2,374,371 $94,486 $51,068 Employees 1,292,118 457,495 1,039,720 4,564,046 170,478 105,785 Merged entity 2,362,285 657,778 1,036,361 6,997,043 0 0 Total contributions 4,034,119 1,295,421 2,500,659 13,935,460 264,964 156,853 Allocation of 79,180 shares of BB&T Financial Corp. common stock 0 0 0 0 0 Total additions 4,649,821 2,015,449 4,884,769 37,204,292 544,682 176,833 Deductions from net assets attributed to: Withdrawals (3,416,449) (532,039) (809,929) (3,629,481) (814,131) (10,621) Administrative expenses (2,160) (747) (1,220) (51,229) (2,726) (44) Interest expense 0 0 0 0 0 0 Other 0 0 0 0 (9,052) 0 Allocation of 79,180 shares of BB&T Financial Corp. common stock 0 0 0 0 0 0 Loans to members - Interest income 0 0 0 0 0 0 Principal repayments 0 0 0 0 0 0 Net transfers of assets among funds (2,527,190) (825,374) (499,082) 781,699 878,401 190,716 Net assets available for plan benefits, beginning of year 13,051,961 4,375,728 6,992,897 60,265,115 3,962,401 0 Net assets available for plan benefits, end of year $11,755,983 $5,033,017 $10,567,435 $94,570,396 $4,559,575 $356,884 Small Company Liabilities Growth Loan to be ESOP Fund Fund Allocated Allocated Unallocated Total Additions to net assets attributed to: Investment income - Dividends 0 0 0 325,642 164,450 3,295,786 Interest 0 0 0 0 0 1,332,082 Net appreciation in value of investments 79,134 0 0 1,661,220 488,470 25,379,418 Total investment income 79,134 0 0 1,986,862 652,920 30,007,286 Contributions- Employer $54,100 $ 0 $ 0 $ 0 $ 2,011,234 $ 5,569,701 Employees 116,563 0 0 1,853,829 0 9,600,034 Merged entity 0 0 0 0 0 11,053,467 Total contributions 170,663 0 0 1,853,829 2,011,234 26,223,202 Allocation of 79,180 shares of BB&T Financial Corp. common stock 0 0 0 1,198,707 0 1,198,707 'Total additions 249,797 0 0 5,039,398 2,664,154 57,429,195 Deductions from net assets attributed to: Withdrawals (12,964) 0 0 (705,550) (149,701) (10,080,865) Administrative expenses (43) 0 (41,008) (4,112) (12,975) (116,264) Interest expense 0 0 0 0 (251,026) (251,026) Other 0 0 0 0 0 (9,052) Allocation of 79,180 shares of BB&T Financial Corp. common stock 0 0 0 0 (1,198,707) (1,198,707) Loans to members - Interest income 0 136,909 0 0 0 136,909 Principal repayments 0 1,071,371 0 0 0 1,071,371 Net transfers of assets among funds 543,297 1,466,258 0 14,810 (23,535) 0 Net assets available for plan benefits, beginning of year 0 0 0 2,115,704 1,527,143 92,290,949 Net assets available for plan benefits, end of year $780,087 $2,674,538 ($41,008) $6,460,250 $2,555,353 $139,272,510 The accompanying notes to financial statements are an integral part of this statement. Savings and Thrift Plan for The Employees of Branch Banking and Trust Company Statement of Changes in Net Assets Available for Plan Benefits, With Fund Information For the Year Ended December 31, 1994 BB&T Financial Money Fixed Corportation Market Income Equity Common Fund Fund Fund Stock Fund Additions to net assets attributed to: Investment income (loss)- Dividends $ 0 $ 0 $ 0 $ 2,155,623 Interest 430,923 676,112 805,959 89,062 Net appreciation (depreciation) in value of investments 0 (477,772) (337,837) (9,264,522) Other 100 0 0 0 Total investment income (loss) 431,023 198,340 468,122 (7,019,837) Contributions- Employer 379,987 225,733 371,640 2,065,026 Employees 1,681,883 476,806 750,939 4,498,725 Merged entities 149,300 0 191,779 0 Total contributions 2,211,170 702,539 1,314,358 6,563,751 Allocation of 40,137 shares of BB&T Financial Corp. common stock 0 0 0 0 Total additions 2,642,193 900,879 1,782,480 (456,086) Deductions from net assets attributed to: Withdrawals (502,933) (200,180) (333,828) (1,242,255) Administrative expenses (26,862) (9,965) (14,165) (179,518) Interest expense 0 0 0 0 Allocation of 40,137 shares of BB&T Financial Corp. common stock 0 0 0 0 Net transfers of assets among funds (1,669,459) (630,238) 306,208 2,448,592 Net assets available for plan benefits, beginning of year 12,609,022 4,315,232 5,252,202 59,694,382 Net assets available for plan benefits, end of year $13,051,961 $4,375,728 $6,992,897 $60,265,115 Bank Investment ESOP Contracts Allocated Unallocated Total Additions to net assets attributed to: Investment income (loss)- Dividends $ 0 $ 87,543 $ 191,667 $ 2,434,833 Interest 241,934 0 0 2,243,990 Net appreciation (depreciation) in value of investments 0 28,107 (1,229,113) (11,281,137) Other 0 14,688 13,305 28,093 Total investment income (loss) 241,934 130,338 (1,024,141) (6,574,221) Contributions- Employer 97,069 0 1,463,500 4,602,955 Employees 599,603 0 0 8,007,956 Merged entities 0 0 0 341,079 Total contributions 696,672 0 1,463,500 12,951,990 Allocation of 40,137 shares of BB&T Financial Corp. common stock 0 887,463 0 887,463 Total additions 938,606 1,017,801 439,359 7,265,232 Deductions from net assets attributed to: Withdrawals (123,636) (269,599) (143,533) (2,815,964) Administrative expenses (11,878) (14,688) (13,305) (270,381) Interest expense 0 0 (344,300) (344,300) Allocation of 40,137 shares of BB&T Financial Corp. common stock 0 0 (887,463) (887,463) Net transfers of assets among funds (449,609) (5,494) 0 0 Net assets available for plan benefits, beginning of year 3,608,918 1,387,684 2,476,385 89,343,825 Net assets available for plan benefits, end of year $3,962,401 $2,115,704 $1,527,143 $92,290,949 The accompanying notes to financial statements are an integral part of this statement. Savings and Thrift Plan for The Employees of Branch Banking and Trust Company Statement of Changes in Net Assets Available for Plan Benefits, With Fund Information For the Year Ended December 31, 1993 BB&T Financial Money Fixed Corporation Market Income Equity Common Fund Fund Fund Stock Fund Additions to net assets attributed to: Investment income- Dividends $ 0 $ 0 $ 0 $ 1,654,300 Interest 347,146 12,132 55,021 68,843 Net appreciation in value of investments 0 107,163 261,507 2,634,745 Other 0 0 0 0 Total investment income 347,146 119,295 316,528 4,357,888 Contributions- Employer 397,301 180,971 231,426 1,783,762 Employees 1,359,339 314,869 446,373 3,331,219 Merged entities 2,368,873 0 0 0 Total contributions 4,125,513 495,840 677,799 5,114,981 Allocation of 31,873 shares of BB&T Financial Corp. common stock 0 0 0 0 Total additions 4,472,659 615,135 994,327 9,472,869 Deductions from net assets attributed to: Withdrawals (670,021) (75,133) (129,682) (806,487) Administrative expenses (39,142) (11,694) (13,291) (147,528) Interest expense 0 0 0 0 Allocation of 31,873 shares of BB&T Financial Corp. common stock 0 0 0 0 Net transfers of assets among funds (3,928,567) 328,963 622,472 3,132,499 Net assets available for plan benefits, beginning of year 12,774,093 3,457,961 3,778,376 48,043,029 Net assets available for plan benefits, end of year $12,609,022 $4,315,232 $5,252,202 $59,694,382 Bank Investment ESOP Contracts Allocated Unallocated Total Additions to net assets attributed to: Investment income- Dividends $ 0 $ 43,620 $ 169,628 $ 1,867,548 Interest 258,111 0 0 741,253 Net appreciation in value of investments 0 422,104 29,416 3,454,935 Other 0 4,431 7,784 12,215 Total investment income 258,111 470,155 206,828 6,075,951 Contributions- Employer 96,090 0 1,141,228 3,830,778 Employees 177,128 0 0 5,628,928 Merged entities 0 0 0 2,368,873 Total contributions 273,218 0 1,141,228 11,828,579 Allocation of 31,873 shares of BB&T Financial Corp. common stock 0 675,075 0 675,075 Total additions 531,329 1,145,230 1,348,056 18,579,605 Deductions from net assets attributed to: Withdrawals (46,481) (124,205) (184,572) (2,036,581) Administrative expenses (12,084) (7,870) (7,784) (239,393) Interest expense 0 0 (308,632) (308,632) Allocation of 31,873 shares of BB&T Financial Corp. common stock 0 0 (675,075) (675,075) Net transfers of assets among funds (155,367) 0 0 0 Net assets available for plan benefits, beginning of year 3,291,521 374,529 2,304,392 74,023,901 Net assets available for plan benefits, end of year $3,608,918 $1,387,684 $2,476,385 $89,343,825 The accompanying notes to financial statements are an integral part of this statement.
Savings and Thrift Plan for The Employees of Branch Banking and Trust Company Notes to Financial Statements December 31, 1995 and 1994 1. Description of Plan: The following description of the Savings and Thrift Plan for The Employees of Branch Banking and Trust Company (the Plan) provides only general information. Participants should refer to the plan agreement for a more complete description of the Plan's provisions. The Plan is sponsored by Branch Banking and Trust Company (BB&T-NC or the Bank) and was established July 1, 1982, for the purpose of promoting the future economic welfare of the Bank's employees. The Plan offers seven investment options for employee contributions: the BB&T U.S. Treasury Money Market Fund, the BB&T Intermediate U.S. Government Bond Fund, the BB&T Growth and Income Stock Fund, the BB&T Balanced Fund, the BB&T Small Company Growth Fund, BB&T Five-Year Bank Investment Contracts (which invests in five-year guaranteed income contracts of the Bank) and the Southern National Corporation Common Stock Fund (formerly the BB&T Financial Corporation Common Stock Fund). Each participant may elect to direct employee and employer contributions to any combination of the funds. Effective during 1995, participants may change their investment elections daily. The Plan covers all employees who meet the age and service requirements. Under the terms of the Plan, employees are eligible to participate in the Plan at age 21 with one year of continuous employment in which they have worked at least 1,000 hours. Participation in the Plan is based on voluntary election by each employee. Contributions to the Plan are made monthly by employees in amounts equal to whole percentages, from 1% to 16%, of their monthly compensation. The Bank makes matching contributions of 100% of the first 2% and 50% of the next 4% of each participant's compensation contributed to the Plan. Participants are fully vested in their accounts at all times. The Plan permits a participant to borrow up to 50% of their account balance, but not more than the lesser of one-half of the value of the account balance, not to exceed $50,000 or $50,000 minus the participant's highest outstanding loan amount of the prior 12 months. The minimum loan amount is $1,000. Only one loan can be made during the plan year and a participant may have only one loan outstanding at any time. The interest rate to be paid on the amounts borrowed is equal to the Bank's prime lending rate plus 1% at the time of the loan. Under terms of the Plan, a participant is allowed to withdraw certain funds from his account twice a year. Upon retirement, a participant may elect to have distributions paid from this account in installments over a period not to exceed the longer of 15 years, the participant's life expectancy, or the life expectancy of the participant and beneficiary, a lump sum, or any combination of the two. Employee Stock Ownership Plan The Employee Stock Ownership Plan (ESOP) is sponsored by the Bank's parent, Southern National Corporation (the Corporation or SNC), previously BB&T Financial Corporation (BB&T). On February 28, 1995, SNC merged with BB&T. Each BB&T shareholder received 1.45 shares of SNC common stock for each share of BB&T common stock held. ESOPs were established in 1991 as leveraged plans for the employees of the Gate City Federal Savings and Loan Association and the Albemarle Savings and Loan Association, both of which were acquired by BB&T during 1991. An ESOP was also established in 1992 as a leveraged plan for the employees of Peoples Federal Savings and Loan Association. During 1993, ESOPs were established as leveraged plans for the employees of Carolina Savings Bank, Edenton Savings and Loan Association, Mutual Savings Bank of Rockingham and Citizens of Mooresville, all of which were acquired by BB&T in 1993. The ESOP is a separate fund of the Plan and is only for the employees of these acquired institutions. The ESOP initially purchased BB&T common shares using the proceeds of notes payable to BB&T (see Note 6). In connection with the merger, the notes became payable to SNC and the Plan received 1.45 shares of SNC common stock for each share of BB&T stock held on February 28, 1995. The stock is held in a trust established under the Plan and the notes are to be repaid over a period of five years by corporate contributions to the trust fund. As the ESOP makes each payment of principal, an appropriate percentage of stock will be allocated to eligible employees' accounts in accordance with applicable regulations under the Internal Revenue Code (IRC). Shares vest fully upon allocation. The notes are collateralized by the unallocated shares of stock and are guaranteed by the Bank. SNC has no rights against shares once they are allocated under the ESOP. Accordingly, the financial statements of the Plan present separately the assets and liabilities and changes therein pertaining to the accounts of employees with vested rights in allocated stock (Allocated) and stock not yet allocated to employees (Unallocated). 2. Significant Accounting Policies: Basis of Accounting The accompanying financial statements have been prepared on the accrual basis of accounting. Investments in Securities Investments in securities are stated at fair value. The fair value of marketable securities is based on published quotations obtained from national securities exchanges. Investments in mutual funds are valued at fair value based on quoted market prices of the underlying fund securities. Bank investment contracts are stated at contract value. Securities transactions are recorded on the trade date. Dividend income is recorded on the exdividend date. Investments in Participant Loans Investments in participant loans are stated at cost. Adjustments necessary to reflect the fair value of the loans would not be material to the financial statements. 3. Determination of Participants' Account Balances: Participants' account balances are valued daily as follows: - Employee and matching employer contributions when contributed are added to the participants' accounts for each type of investment fund. - Participants' accounts are reduced by amounts withdrawn. - Earnings from each investment fund are allocated within that fund as specified by the Plan. Dividends received on SNC common stock (previously BB&T common stock) are credited to participants' accounts based on the number of shares of stock held for each participant electing to invest in stock. Earnings from mutual funds are allocated based upon the ratio that each participant's adjusted account balance, as defined by the Plan, bears to the total of all participants' account balances. 4. Investments: The Plan's investments are administered by the Bank's Trust Division. The appreciation (depreciation) in value of the Plan's investments (including investments bought and sold as well as held during the year) is as follows:
Net Appreciation (Depreciation) 1995 1994 1993 Common stock $ 22,606,944 $ (10,465,528) $ 3,086,265 Mutual funds 2,772,474 (815,609) 368,670 $ 25,379,418 $ (11,281,137) $ 3,454,935
At December 31, 1995 and 1994, the fair market value of individual investments that represent 5% or more of the Plan's total net assets are as follows:
1995 1994 Southern National Corporation common stock $ 104,982,023 $ 65,792,496 BB&T U.S. Treasury Money Market Fund, 5.2% and 4.91% at December 31, 1995 and 1994, respectively 11,755,983 12,703,473 Branch Banking & Trust Company Growth and Income Stock Fund 10,567,435 6,307,322 Branch Banking & Trust Intermediate U.S. Government Fund 5,033,017 NA
Included above, at December 31, 1995 and 1994, respectively, are approximately 246,092 and 109,400 shares of the ESOP's Southern National Corporation common stock which were allocated to the participants' accounts with 173,965 and 248,140 shares being unallocated. 5. Tax Status: The Internal Revenue Service (IRS) issued its latest determination letter on January 6, 1987, which stated that the Plan and its underlying trust qualify, in form, under the applicable provisions of the IRC and therefore are exempt from federal income taxes. The Plan and its underlying trust have been restated to conform with current tax law changes. The restated plan instrument was submitted to the IRS for a letter of determination that the Plan continues to qualify as exempt from federal taxes. No updated determination letter has yet been received. In the opinion of the plan administrator, the Plan and its underlying trust are currently being operated in compliance with the applicable requirements of the IRC. 6. Notes Payable: The notes payable to SNC (originally payable to BB&T, see Note 1) consist of notes in the original amount of $6,018,871. Proceeds from the notes were used by the ESOP to originally purchase common stock of BB&T. As discussed in Note 1, in connection with the merger, the Plan received 1.45 shares of SNC common stock for each share of BB&T common stock held as of February 28, 1995. The notes for the Gate City and Albemarle ESOPs bear interest at 9% and are payable annually. The principal balance is to be repaid in monthly installments with the final payment due in July 1996. The ESOP note for Peoples Federal bears interest at 9% and is payable annually. The principal balance is to be repaid in monthly installments with the final payment due in June 1997. The ESOP note for Carolina Savings Bank and Edenton Savings and Loan Association bears interest at 7% and is payable annually. The principal balance is to be repaid in monthly installments with the final payment due in May 1998. The ESOP note for Mutual Savings of Rockingham bears interest at 7% and is payable annually. The principal balance is to be repaid in monthly installments with the final payment due in October 1998. The ESOP note for Citizens of Mooresville bears interest at 7% and is payable annually. The principal balance is to be repaid in monthly installments with the final payment due in November 1998. The debt is guaranteed by the Bank and secured by the unallocated shares of SNC common stock. 7. Plan Termination: Although it has not expressed an intent to do so, the Bank has the right to discontinue its contributions at any time or to terminate the Plan. In the event of plan termination, the assets would be distributed in accordance with the plan documents. 8. Related-party Transactions: During the years ended December 31, 1995, 1994 and 1993, the Plan purchased 677,392, 665,653 and 548,396 shares, respectively, of SNC (formerly BB&T) common stock at a cost of $16,072,633, $12,831,789 and $11,651,602, respectively. In addition, 321,169, 159,235 and 113,677 shares were distributed during 1995, 1994 and 1993, respectively, to employees who withdrew their vested interests. The Plan received cash dividends of $3,278,574, $2,434,833 and $1,867,548 on its investment in Southern National Corporation common stock during 1995, 1994 and 1993, respectively. Included in plan assets are mutual funds sponsored by the Bank, guaranteed income contracts issued by the Bank and cash on deposit at the Bank. The cost of administrative services rendered by the Bank's Trust Division for the years ended December 31, 1995, 1994 and 1993, was $116,264, $270,381 and $239,393, respectively. During 1995, transaction processing responsibilities previously managed by the Bank's trust division were performed by a third-party service provider. 9. Subsequent Event: Effective January 1, 1996, Southern National's Employee Stock Ownership Plan was merged into the Plan to form the Southern National Corporation 401(k) Savings Plan. The new plan permits employees to contribute up to 16% of their compensation to the Plan. SNC matches up to 6% of the employee's compensation with a 100% matching contribution. Savings and Thrift Plan for The Employees of Branch Banking and Trust Company Item 27(a) - Schedule of Assets Held for Investment Purposes December 31 ,1995
Par Value or Shares Identity of Party and Description of Assets Cost Fair Value *BB&T U.S. Treasury Money Market Fund 5.2% at 11,755,693 December 31, 1995 ** $11,755,693 *Branch Banking and Trust Company Intermediate 494,402 U.S. Government Bond Fund ** 5,033,017 *Branch Banking and Trust Company Growth and 770,221 Income Fund ** 10,567,435 *Southern National Corporation Common Stock 3,999,314 Fund 104,982,023 *5 Year Bank Investment Contracts 5.30% to 4,559,575 8.15% at December 31, 1995 ** 4,559,575 *Branch Banking and Trust Company Balanced 31,087 Fund ** 356,884 *Branch Banking and Trust Company Small 50,458 Company Growth Fund ** 780,087 Participant loans, varying maturities, rates 2,674,538 ranging from 7.00% to 11.00% ** 2,674,538 * Denotes party-in-interest. ** Note: The above schedule could not be completed due to the trustee's inability to provide cost information for these investments. The accompanying notes to financial statements are an integral part of this statement. Savings and Thrift Plan for The Employees of Branch Banking and Trust Company Item 27(d) - Schedule of Reportable Transactions (1) December 31 ,1995 Aggregate Selling Price or Aggregate Aggregate Maturity Cost of Identity of Party and Description of Purchase Proceeds Asset Sold Net Realized Assets Price (2) (3) (2) (3) or Matured Gain (Loss) Southern National Corporation Common Stock- (43 purchases) $16,072,633 $0 $0 $0 (69 sales) 0 7,743,451 * *
*Historical cost information is unavailable and is therefore not provided in this schedule. (1) This schedule presents transactions in any security where the aggregate of transactions in that security exceeds 5% of plan assets at January 1, 1995. (2) The value of securities at the time of purchase or sale is the market value. (3) Brokerage commissions are included in purchase prices and deducted from sales proceeds. Note: The above schedule could not be completed for the BB&T U.S. Treasury Money Market Fund, the BB&T Intermediate U.S. Government Bond Fund, the BB&T Growth and Income Stock Fund, the BB&T Balanced Fund, the BB&T Small Company Growth Fund and the BB&T Five-Year Bank Investment Contracts due to the inability of the Trustee to provide this information. The accompanying notes to financial statements are an integral part of this statement. -----END PRIVACY-ENHANCED MESSAGE-----