-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, TShxwpgI07u9bsUckAbZ9MfjxMWKzjvWcuoaHQqr4HxZeVOlzXCUxDtbuvcNB5co +FvoYSraNMlVqVMyH66S/A== 0000092230-95-000005.txt : 19950804 0000092230-95-000005.hdr.sgml : 19950804 ACCESSION NUMBER: 0000092230-95-000005 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950630 ITEM INFORMATION: Other events FILED AS OF DATE: 19950803 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-10853 FILM NUMBER: 95558803 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 8-K 1 Item 5. Other Events The purpose of this Current Report on Form 8-K is to file as Exhibit 99.1 Southern National Corporation's (Southern Nationals) Quarterly Performance Summary for the second quarter of 1995, including sections distributed to the media and a supplement distributed to analysts. EXHIBIT INDEX Exhibit 99.1 Quarterly Performance Summary issued July 27, 1995 For Further Information: ANALYSTS MEDIA B. Gloyden Stewart, Jr. Scott E. Reed Bob Denham Senior Vice President Executive Vice President Vice President Investor Relations Chief Financial Officer Public Relations (919) 399-4219 (910) 733-3088 (910) 773-7363 July 27, 1995 FOR IMMEDIATE RELEASE SOUTHERN NATIONAL REPORTS RESULTS FOR SECOND QUARTER WINSTON-SALEM, N.C. -- Southern National Corporation reported net income of $57.3 million for the second quarter ended June 30. Fully diluted earnings per share for the quarter were $.53. Earnings for the six months ended June 30 were $44.7 million, or $.41 per fully diluted share. Exclusive of nonrecurring charges of $104.4 million, securities losses of $19.8 million and a gain on the sale of branches of $13.0 million that were recorded during the first six months of 1995, Southern National would have had net income after tax of $117.4 million, a 4.7% increase over the first six months of 1994. The first six months results of operations, excluding nonrecurring items, provided returns of 1.18% on assets and 16.0% on common equity. Net income for the second quarter, excluding nonrecurring items, was $59.4 million, which created fully diluted earnings per share of $.55. Asset quality remained strong through the second quarter as nonperforming assets decreased from $74.1 million at June 30, 1994, and $59.7 million at March 31, 1995, to $57.7 million on June 30, or .28% of total assets. Net charge-offs for the first six months were only .14%. The allowance for loan and lease losses was increased to $176.2 million, or 1.28% of loans and leases, compared to $174.2 million, or 1.30%, at the end of the first quarter. In releasing earnings, John A. Allison, chairman and chief executive officer, said, "On May 30, 1995, the new BB&T banking network began operations after the combination of the operating systems of BB&T and Southern National. This conversion was the final step in integrating the subsidiary banks into a high performance organization which can prosper in an extremely competitive banking environment. "The second quarter results of operations include expenses related to the merger and conversion of the banking systems. The corporation also benefited from a gain on the divestiture of branches during the quarter. Our primary goal for the quarter was to complete the systems conversion with minimal inconvenience for our customers. Considering the magnitude and complexity of the transaction, I am delighted with what we have accomplished. One of the most impressive facts is that we increased the number of customer accounts during the weeks when the systems conversion was being implemented. In addition, loan growth has remained strong. "For the remainder of 1995, we will turn our attention to achieving the efficiencies inherent in the merger and increasing our revenues through the cross selling of products and services to our customers. We estimate that annual cost savings of approximately $65 - $68 million will be realized." Southern National had consolidated assets of $20.7 billion, consolidated loans of $13.8 billion and consolidated deposits of $14.3 billion at the end of June. Through its subsidiaries in North Carolina, South Carolina and Virginia, Southern National currently operates 452 banking offices. Common stock of Southern National Corporation is traded on the New York Stock Exchange under the symbol SNB. The stock closed at $24.00 on July 26. QUARTERLY PERFORMANCE SUMMARY B. Gloyden Stewart, Jr. Southern National Corporation (NYSE:SNB) Senior Vice President (919) 399-4219 Page 3 Investor Relations FAX (919) 399-4871 For the Six Months Ended Increase/(Decrease) (Dollars in thousands, except per share data)
6/30/95 6/30/94 $ % INCOME STATEMENT Interest income - taxable equivalent Interest & fees on loans & leases $ 606,918 $ 480,418 $ 126,500 26.3 % Interest & dividends on securities 165,837 155,311 10,526 6.8 Interest on short-term investments 1,389 2,123 (734) (34.6) Total interest income - taxable equivalent 774,144 637,852 136,292 21.4 Interest expense Interest on deposits 272,314 208,465 63,849 30.6 Interest on short-term borrowed funds 89,253 37,007 52,246 141.2 Interest on long-term debt 29,384 18,615 10,769 57.9 Total interest expense 390,951 264,087 126,864 48.0 Net interest income - taxable equivalent 383,193 373,765 9,428 2.5 Less: Taxable equivalent adjustment 15,410 13,839 1,571 11.4 Net interest income 367,783 359,926 7,857 2.2 Provision for loan & lease losses 14,000 8,403 5,597 66.6 Net interest income after provision for loan & lease losses 353,783 351,523 2,260 .6 Noninterest income Service charges on deposits 43,781 42,489 1,292 3.0 Mortgage banking activities 8,200 12,860 (4,660) (36.2) Trust revenue 8,995 7,828 1,167 14.9 General insurance commissions 8,278 7,475 803 10.7 Other nondeposit fees & commissions 28,861 24,313 4,548 18.7 Securities (losses) gains, net (19,845) 2,148 (21,993) NM Other income 24,327 14,903 9,424 63.2 Total noninterest income 102,597 112,016 (9,419) (8.4) Noninterest expense Personnel expense 199,576 148,387 51,189 34.5 Occupancy & equipment expense 57,284 44,013 13,271 30.2 Federal deposit insurance expense 15,980 16,599 (619) (3.7) Other noninterest expense 116,019 84,119 31,900 37.9 Total noninterest expense 388,859 293,118 95,741 32.7 Income before income taxes 67,521 170,421 (102,900) (60.4) Provision for income taxes 22,776 58,342 (35,566) (61.0) Net income $ 44,745 $ 112,079 $ (67,334) (60.1) % PER SHARE DATA Primary earnings $ .41 $ 1.07 $ (0.66) (61.7) % Fully diluted earnings .41 1.05 (0.64) (61.0) Weighted average shares - Primary 103,342,418 101,937,734 Fully diluted 108,665,929 106,993,805 Dividends paid on common shares $ .40 $ .34 $ .06 17.6 % NM - not meaningful. NOTE: Fully diluted earnings per share excluding nonrecurring items were $1.08 for the first six months of 1995. QUARTERLY PERFORMANCE SUMMARY B. Gloyden Stewart, Jr. Southern National Corporation (NYSE:SNB) Senior Vice President (919) 399-4219 Page 4 Investor Relations FAX (919) 399-4871 As of / For the Six Months Ended Increase/(Decrease) (Dollars in thousands) 6/30/95 6/30/94 $ % SELECTED BALANCE SHEET DATA End of period balances Securities, at carrying value $ 5,554,532 $ 5,308,069 $ 246,463 4.6 % Loans & leases 13,765,475 12,246,788 1,518,687 12.4 Allowance for loan & lease losses 176,175 173,550 2,625 1.5 Other earning assets 42,923 86,467 (43,544) (50.4) Total earning assets 19,348,364 17,700,193 1,648,171 9.3 Total assets 20,662,252 18,842,721 1,819,531 9.7 Total deposits 14,336,556 14,287,668 48,888 .3 Short-term borrowed funds 3,147,213 2,279,554 867,659 38.1 Long-term debt 1,312,464 619,728 692,736 111.8 Total interest-bearing liabilities 16,996,659 15,470,110 1,526,549 9.9 Common equity 1,498,366 1,363,876 134,490 9.9 Preferred equity 71,785 74,143 (2,358) (3.2) Total shareholders' equity $1,570,151 $1,438,019 $132,132 9.2 Average balances Securities, at amortized cost $5,424,635 $5,315,611 $109,024 2.1 Loans & leases 13,372,850 12,071,629 1,301,221 10.8 Other earning assets 47,188 132,521 (85,333) (64.4) Total earning assets 18,844,673 17,519,761 1,324,912 7.6 Total assets 20,017,016 18,631,655 1,385,361 7.4 Total deposits 14,286,445 14,264,472 21,973 .2 Short-term borrowed funds 3,044,118 2,094,308 949,810 45.4 Long-term debt 908,230 644,835 263,395 40.8 Total interest-bearing liabilities 16,545,394 15,255,910 1,289,484 8.5 Common equity 1,447,925 1,342,964 104,961 7.8 Preferred equity 73,896 74,143 (247) (.3) Total shareholders' equity $1,521,821 1,417,107 $104,714 7.4 PERFORMANCE RATIOS Return on average assets .45 % 1.21 % Return on average common equity 5.87 16.44 Net yield on earning assets (taxable equivalent) 4.10 4.30 Efficiency (taxable equivalent)* 58.5 % 60.0 % NOTES: All items referring to loans & leases include loans held for sale & are net of unearned income. Applicable ratios are annualized. * Excludes securities gains (losses) & foreclosed property expense for all periods & nonrecurring items of $86,851 for the first six months of 1995. QUARTERLY PERFORMANCE SUMMARY B. Gloyden Stewart, Jr. Southern National Corporation (NYSE:SNB) Senior Vice President (919) 399-4219 Page 5 Investor Relations FAX (919) 399-4871 As of / For the Quarter Ended (Dollars in thousands, except per share data) 6/30/95 3/31/95 12/31/94 9/30/94 6/30/94 INCOME STATEMENT Interest income - taxable equivalent Interest & fees on loans & leases $ 311,721 $295,197 $282,921 $264,354 $245,862 Interest & dividends on securities 85,601 80,236 80,575 77,370 78,018 Interest on short-term investments 733 656 995 2,066 952 Total interest income - taxable equivalent 398,055 376,089 364,491 343,790 324,832 Interest expense Interest on deposits 142,180 130,134 120,093 113,318 105,104 Interest on short-term borrowed fund 48,194 41,059 34,051 27,418 21,782 Interest on long-term debt 14,761 14,623 12,835 9,477 9,619 Total interest expense 205,135 185,816 166,979 150,213 136,505 Net interest income - taxable equivalent 192,920 190,273 197,512 193,577 188,327 Less: Taxable equivalent adjustment 7,958 7,452 7,248 7,001 7,061 Net interest income 184,962 182,821 190,264 186,576 181,266 Provision for loan & lease losses 7,000 7,000 7,104 2,339 2,902 Net interest income after provision for loan & lease losses 177,962 175,821 183,160 184,237 178,364 Noninterest income Service charges on deposits 22,511 21,270 21,355 21,262 21,779 Mortgage banking activities 3,350 4,850 4,365 4,919 3,628 Trust revenue 4,715 4,280 5,278 4,074 4,036 General insurance commissions 4,163 4,115 4,067 3,727 3,449 Other nondeposit fees & commissions 14,217 14,644 12,824 12,823 12,203 Gains on sale of servicing rights, net -- -- 2,759 17 -- Securities gains (losses), net -- (19,845) 7 919 627 Other income 17,404 6,923 7,616 8,019 7,523 Total noninterest income 66,360 36,237 58,271 55,760 53,245 Noninterest expense Personnel expense 75,343 124,233 72,030 73,016 70,944 Occupancy & equipment expense 27,729 29,555 21,939 22,122 22,299 Federal deposit insurance expense 7,975 8,005 8,083 8,015 8,178 Foreclosed property expense 1,034 700 705 1,327 1,187 Amortization expense - intangible assets 2,522 2,279 2,173 2,051 1,978 Other noninterest expense 45,300 64,184 41,208 37,549 40,554 Total noninterest expense 159,903 228,956 146,138 144,080 145,140 Income (loss) before income taxes 84,419 (16,898) 95,293 95,917 86,469 Provision for income taxes 27,121 (4,345) 32,651 33,766 29,361 Net income (loss) $57,298 $(12,553) $62,642 $62,151 $57,108 PER SHARE DATA Primary earnings (loss) $ .54 $ (.13) $ .60 $ .59 $ .55 Fully diluted earnings (loss) .53 (.13) .58 .58 .53 Dividends paid on common shares .20 .20 .20 .20 .17 Book value per common share 14.59 13.90 13.92 13.81 13.49 NOTE: Fully diluted earnings per share excluding nonrecurring items were $.54 in first quarter 1995 and $.55 in second quarter 1995. QUARTERLY PERFORMANCE SUMMARY B. Gloyden Stewart, Jr. Southern National Corporation (NYSE:SNB) Senior Vice President (919) 399-4219 Page 6 Investor Relations FAX (919) 399-4871 As of / For the Quarter Ended (Dollars in thousands) 6/30/95 3/31/95 12/31/94 9/30/94 6/30/94 SELECTED BALANCE SHEET DATA End of period balances Securities, at carrying value $ 5,554,532 $ 5,228,543 $ 5,425,117 $ 5,266,125 $ 5,308,069 Loans & leases 13,765,475 13,370,959 13,108,102 12,664,661 12,246,788 Allowance for losses 176,175 174,189 171,734 172,110 173,550 Other earning assets 42,923 29,727 33,983 172,441 86,467 Total earning assets 19,348,364 18,673,928 18,686,965 18,181,624 17,700,193 Total assets 20,662,252 19,892,337 19,855,063 19,430,978 18,842,721 Total deposits 14,336,556 14,519,612 14,314,154 14,402,090 14,287,668 Short-term borrowed funds 3,147,213 2,690,366 2,902,528 2,610,841 2,279,554 Long-term debt 1,312,464 902,047 910,755 708,449 619,728 Total interest-bearing liabilities 16,996,659 16,336,533 16,284,418 15,954,969 15,470,110 Common equity 1,498,366 1,420,365 1,422,334 1,403,530 1,363,876 Preferred equity 71,785 74,143 74,143 74,143 74,143 Total shareholders, equity 1,570,151 1,494,508 1,496,477 1,477,673 1,438,019 Goodwill 43,989 44,892 46,131 38,459 39,397 Core deposit & other intangibles 17,916 17,332 17,691 17,177 17,517 Total intangibles 61,905 62,224 63,822 55,636 56,914 Negative goodwill 48,529 50,088 51,720 53,493 55,093 Average balances Securities, at amortized cost $ 5,466,584 $ 5,382,220 $ 5,449,499 $ 5,350,772 $ 5,410,458 Loans & leases 13,541,095 13,202,736 12,865,637 12,424,214 12,082,232 Other earning assets 47,557 46,815 74,248 183,451 108,971 Total earning assets 19,055,236 18,631,771 18,389,384 17,958,437 17,601,661 Total assets 20,249,404 19,782,046 19,524,878 19,071,278 18,712,128 Total deposits 14,314,915 14,257,659 14,334,248 14,330,620 14,221,620 Short-term borrowed funds 3,219,920 2,866,363 2,643,910 2,445,588 2,232,787 Long-term debt 910,946 905,484 807,457 610,943 630,600 Total interest-bearing liabilities 16,736,208 16,352,460 16,029,882 15,683,955 15,385,668 Common equity 1,466,255 1,429,391 1,424,207 1,378,773 1,342,540 Preferred equity 73,652 74,143 74,143 74,143 74,143 Total shareholders' equity 1,539,907 1,503,534 1,498,350 1,452,916 1,416,683 RISK-BASED CAPITAL Risk-based capital: Tier 1 $ 1,495,054 $ 1,432,677 $ 1,513,090 $ 1,458,249 $ 1,411,418 Total 1,664,728 1,588,705 1,671,574 1,613,260 1,559,732 Risk-based capital ratios: Tier 1 11.3 % 11.5 % 12.3 % 12.3 % 12.4 % Total 12.6 12.7 13.6 13.6 13.7 Leverage capital ratio 7.4 7.3 7.8 7.7 7.6 PERFORMANCE RATIOS Return on average assets 1.13 % (.26) % 1.27 % 1.29 % 1.22 % Return on average common equity 15.32 (3.93) 17.09 17.51 16.67 Net yield on earning assets (taxable equivalent) 4.06 4.14 4.26 4.28 4.29 Efficiency (taxable equivalent)* 58.1 58.8 57.5 57.5 59.7 Equity as a percentage of total assets end of period 7.6 7.5 7.5 7.6 7.6 Average earning assets as a percentage of average total assets 94.1 94.2 94.2 94.2 94.1 Average loans & leases as a percentage of average deposits 94.6 92.6 89.8 86.7 85.0 NOTES: All items referring to loans & leases include loans held for sale & are net of unearned income. Applicable ratios are annualized. * Excludes gains on sale of servicing rights, securities gains (losses) & foreclosed property expense for all periods, nonrecurring items totaling $83,393 for the first quarter of 1995 and $3,458 for the second quarter of 1995. QUARTERLY PERFORMANCE SUMMARY B. Gloyden Stewart, Jr. Southern National Corporation (NYSE:SNB) Senior Vice President (919) 399-4219 Page 7 Investor Relations FAX (919) 399-4871 As of / For the Quarter Ended (Dollars in thousands, except per share data) 6/30/95 3/31/95 12/31/94 9/30/94 6/30/94 ASSET QUALITY ANALYSIS Allowance For Losses Beginning balance $ 174,189 $ 171,734 $ 172,110 $ 173,550 $ 174,006 Allowance for acquired loans -- -- 1,119 -- -- Provision for losses 7,000 7,000 7,104 2,339 2,902 Charge-offs (8,378) (7,094) (11,916) (5,944) (6,811) Recoveries 3,364 2,549 3,317 2,165 3,453 Ending balance $ 176,175 $ 174,189 $ 171,734 $ 172,110 $ 173,550 Nonperforming Assets Nonaccrual loans & leases $ 47,013 $ 48,451 $ 47,039 $ 43,219 $ 55,496 Foreclosed property 10,673 11,239 12,153 17,963 18,577 Nonperforming assets $ 57,686 $ 59,690 $ 59,192 $ 61,182 $ 74,073 Loans 90 days or more past due & still accruing $ 30,335 $ 21,653 $ 24,224 $ 27,134 $ 27,667 Asset Quality Ratios Nonaccrual loans & leases as a percentage of total loans & lease .34 % .36 % .36 % .34 % .45 % Nonperforming assets as a percentage of: Total assets .28 .30 .30 .31 .39 Loans & leases plus foreclosed property .42 .45 .45 .48 .60 Net charge-offs as a percentage of average loans & leases .15 .14 .27 .12 .11 Allowance for losses as a percentage of loans & leases 1.28 1.30 1.31 1.36 1.42 Ratio of allowance for losses to: Net charge-offs 8.76 x 9.45 x 5.03 x 11.48 x 12.89 x Nonaccrual loans & leases 3.75 3.60 3.65 3.98 3.13 MEMO ITEMS Unrealized appreciation (depreciation) on securities available for sale (net of tax) $ 9,055 $ (26,956) $ (72,584) $ (47,413) $ (35,611) Common stock prices: High 24.13 22.38 21.13 21.88 21.88 Low 19.88 18.88 17.13 20.00 18.88 End of period 24.00 19.88 19.13 20.75 20.00 Weighted average shares - Primary 103,523,801 103,380,544 102,948,357 102,571,211 102,027,925 - Fully diluted 108,774,906 108,424,625 107,996,378 107,617,714 107,082,681 End of period shares outstanding 102,709,306 102,182,679 102,215,032 101,616,534 101,135,273 End of period offices 452 530 NOTES: All items referring to loans & leases include loans held for sale & are net of unearned income. Applicable ratios are annualized. QUARTERLY PERFORMANCE SUMMARY B. Gloyden Stewart, Jr. Southern National Corporation (NYSE:SNB) Senior Vice President (919) 399-4219 Page 8 Investor Relations FAX (919) 399-4871 For the Quarter Ended INTEREST YIELDS/RATES (Taxable equivalent) 6/30/95 3/31/95 12/31/94 9/30/94 6/30/94 Interest income: Securities* 6.28 % 6.05 % 5.87 % 5.74 % 5.78 % Loans & leases 9.23 9.07 8.72 8.44 8.16 Other earning assets 6.18 5.68 5.32 4.47 3.50 Total earning assets* 8.38 8.19 7.86 7.60 7.40 Interest expense: Interest-bearing deposits 4.52 4.20 3.79 3.56 3.37 Short-term borrowed funds 6.00 5.81 5.11 4.45 3.91 Long-term debt 6.50 6.55 6.31 6.15 6.12 Total interest-bearing liabilities 4.92 4.61 4.13 3.80 3.56 Net yield on earning assets 4.06 4.14 4.26 4.28 4.29 * Yields calculated based on securities at amortized cost. (Dollars in thousands) DERIVATIVES: INTEREST RATE SWAPS, CAPS & FLOORS As of 6/30/95 Type Notional Receive Pay Unrealized Amount Rate Rate Gains/(Losses) Receive fixed swaps $ 623,055 6.21 % 6.22 % $ 639 Pay fixed swaps 103,229 6.03 7.26 (976) Caps & floors 700,000 -- -- (3,898) Total $ 1,426,284 6.18 % 6.37 % $ (4,235) Contractual Maturity Schedule One Year One to After Total or Less Five Years Five Years Receive fixed swaps $ 623,055 $ 40,000 $ 583,055 $ -- Pay fixed swaps 103,229 40,000 63,229 -- Caps & floors 700,000 -- 650,000 50,000 Total $ 1,426,284 $ 80,000 $ 1,296,284 $ 50,000
S I G N A T U R E S 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. Southern National Corporation (Registrant) By: Sherry A. Kellett, Controller Date: July 27, 1995 -----END PRIVACY-ENHANCED MESSAGE-----