-----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, V2zqI71cTIB7C6Cpb/QeS4vC96MbmviFCC/+OLQxEyY8zpPrryr/927byXk5H0C4 8RaUhmwtCPnNNcsjetYsIA== 0000950109-95-000463.txt : 19950301 0000950109-95-000463.hdr.sgml : 19950301 ACCESSION NUMBER: 0000950109-95-000463 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950224 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19950224 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: 95515253 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 FORM 8-K 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) February 24, 1995 Southern National Corporation -------------------------------------------------------- (Exact name of registrant as specified in its charter) North Carolina 1-10853 56-0939887 - ------------------------ ------------- -------------------- (State or other jurisdiction (Commission (IRS Employer of incorporation) File Number) Identification No.) 500 North Chestnut Street, Lumberton, North Carolina 28358 - ------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (910) 773-7500 --------------------- Item 5. Other Events The purpose of this Current Report on Form 8-K is to file as Exhibit 99 hereto the financial statements of Commerce Bank for the period ended September 30, 1994. This exhibit was prepared by Commerce Bank, was not prepared by Registrant, and is not to be considered as being filed as part of the Registrant's disclosure obligations under the Securities Exchange Act of 1934, as amended. Such document will be incorporated by reference into future registration statements of the Registrant. Item 7. Financial Statements and Exhibits. (c) Exhibits. 99 Financial Statements of Commerce Bank for the Quarter Ended September 30, 1994 -2- SIGNATURE 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 thereunto duly authorized. SOUTHERN NATIONAL CORPORATION (Registrant) Date: February 24, 1995 By: /s/ David L. Craven Name: David L. Craven Title: Secretary -3- EXHIBIT INDEX Exhibit Number and Description - ------------------------------ 99 Financial statements of Commerce Bank for the Quarter Ended September 30, 1994 -4- EX-99 2 EXHIBIT 99 Exhibit 99 ITEM 1: FINANCIAL STATEMENTS COMMERCE BANK BALANCE SHEET (Unaudited) (In thousands, except common stock data)
September 30, December 31, 1994 1993 1993 -------- -------- -------- Assets Cash and due from banks $ 30,059 $ 32,599 $ 25,800 Temporary investments 15,090 5,260 13,431 Securities: Held to maturity (Market value September 30, 1994 - $87,230 1993 - $253,534, December 31, 1993 - $251,596) 89,744 246,303 247,175 Available for sale (Market value $114,082) 111,894 - - -------- -------- -------- Total Securities 201,638 246,303 247,175 Loans: Commercial 197,358 153,901 185,409 Consumer 108,501 100,196 102,611 Real estate mortgage 101,836 97,299 68,850 Real estate construction & development 16,415 18,086 17,074 Tax-exempt 5,290 6,528 6,477 Less: Unearned income and deferred fees (1,220) (3,120) (2,163) -------- -------- -------- Loans, net of unearned income and deferred fees 429,180 272,870 376,258 Less: Allowance for loan losses (7,458) (6,965) (6,527) -------- -------- -------- Loans, net 421,712 365,885 371,731 Bank properties and equipment, net 19,083 17,816 18,384 Foreclosed property 2,751 3,646 2,080 Other assets 10,572 10,376 10,029 -------- -------- -------- Total assets $ 700,905 $ 681,896 $ 659,630 - ------------------------------------------------------------------------------------------------------------------------------- Liabilities Deposits: Noninterest bearing demand $ 108,008 $ 113,988 $ 103,197 Interest bearing demand 74,038 59,543 72,221 Money market savings 236,666 219,483 227,751 Certificate of deposit less than $100,000 155,181 172,653 164,122 Regular savings 32,799 34,685 28,389 Certificate of deposit greater than $100,000 36,123 29,340 38,481 -------- -------- -------- Total deposits 643,005 629,692 634,141 Short-term borrowings - 175 1,400 Long-term debt 6,772 6,847 6,828 Other liabilities 3,765 3,266 3,872 -------- -------- -------- Total liabilities 653,542 639,979 646,041 -------- -------- -------- Shareholders' Equity Common stock, $2.50 par: 10,000,000 shares authorized: 2,734,652, 2,544,254, and 2,666,792 issued and outstanding 6,837 6,361 6,717 Capital surplus 30,070 25,925 20,062 Retained earnings 11,886 9,651 7,810 Unrealized loss on marketable equity securities - (20) - Net unrealized loss on securities available for sale (1,430) - - -------- -------- -------- Total shareholders' equity 47,363 41,917 43,589 -------- -------- -------- Total liabilities and shareholders' equity $ 700,905 $ 681,896 $ 689,630 - -------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements 1 COMMERCE BANK STATEMENT OF INCOME (Unaudited) (In thousands, except share data)
Three Months Ended Nine Months Ended September 30, September 30, 1994 1993 1994 1993 -------- -------- -------- -------- Interest Income Loans, including fees $ 9,193 $ 7,882 $ 25,897 $ 22,884 Securities held to maturity and available for sale 3,222 3,841 10,107 11,918 Temporary investments 177 234 520 557 -------- -------- -------- -------- Total interest income 12,592 11,957 36,524 35,359 Interest Expense Deposits 5,091 5,020 14,693 15,331 Short-term borrowings - 7 30 16 Long-term debt 166 165 497 469 -------- -------- -------- -------- Total interest expense 5,257 5,192 15,220 15,816 -------- -------- -------- -------- Net interest income 7,335 6,765 21,304 19,543 Provision for loan losses 600 700 1,800 2,225 -------- -------- -------- -------- Net interest income After Provision For Loan Losses 6,735 6,065 19,504 17,318 Noninterest Income Service charges on deposit accounts 1,007 890 2,967 2,485 Mortgage brokerage income 247 859 1,228 2,227 Credit card merchant fees 304 251 775 653 Securities (losses) gains (28) 1,268 41 1,354 Trust income 162 164 504 479 Other income 372 461 1,311 1,058 -------- -------- -------- -------- Total noninterest income 2,064 3,893 6,826 8,258 Noninterest Expenses Salaries and benefits 2,755 2,717 8,448 7,928 Occupancy of bank premises 726 632 2,079 1,806 Furniture and equipment 472 484 1,351 1,295 Other expenses 2,179 2,998 6,479 6,682 -------- -------- -------- -------- Total noninterest expenses 6,131 6,831 18,357 17,711 -------- -------- -------- -------- Income Before Income Taxes 2,568 3,127 7,973 7,863 Provision for income taxes 821 1,415 2,524 3,003 -------- -------- -------- -------- Net Income $ 1,847 $ 1,712 $ 5,449 $ 4,860 - ---------------------------------------------------------------------------------------------- Net Income Per Share Primary $ 0.64 $ 0.52 $ 1.93 $ 1.77 Fully diluted 0.62 0.50 1.85 1.70 Weighted Average Shares Outstanding Primary 2,854 2,758 2,819 2,735 Fully diluted 3,117 3,022 3,084 3,001 - ----------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements 2 COMMERCE BANK STATEMENT OF CASH FLOWS (Unaudited) (in thousands)
Nine months ended September 30, 1994 1993 ---------- ---------- Cash Flows From Operating Activities: Net Income $ 5,449 $ 4,860 Adjustments to reconcile net income to cash provided by operating activities: Provision for loan losses 1,800 2,225 Depreciation and amortization of premises and equipment 1,390 1,247 Net amortization of premiums and accretion of discounts 517 539 Amortization of intangible assets 203 1,151 Gain on sale of securities available for sale (41) - Gain on sale of securities held to maturity - (1,354) (Increase) decrease in deferred income tax benefits (880) 6 (Decrease) increase in interest receivable 23 (325) (Increase) Decrease in interest payable (106) 181 (Increase) Decrease in other liabilities 36 (344) Decrease in other assets 420 1,480 ---------- ---------- Net cash provided by operating activities: 8,831 8,666 ---------- ---------- Cash Flows From Investing Activities: Securities held to maturity: Proceeds from maturities, calls and prepayments - 23,474 Proceeds from sales - 44,495 Purchases (24,913) (74,777) Securities available for sale: Proceeds from maturities, calls and prepayments 35,352 - Proceeds from sales 33,192 - Net decrease (increase) in temporary investments (1,659) (7,231) Purchases of premises and equipment (2,068) (2,319) Net sale (repurchase) of loan participations 5,219 (813) Net increase in loans (57,000) (33,656) ---------- ---------- Net cash used in investing activities (11,898) (36,364) ---------- ---------- Cash Flows From Financing Activities: Net increases in deposit accounts 8,864 31,708 Proceeds from issuance of common stock 1,118 557 Net decrease in short-term borrowing (1,400) 388 Principal payments on capital lease obligations (58) (64) Cash dividends paid (1,200) (748) ---------- ---------- Net cash provided by financing activities 7,326 31,065 ---------- ---------- Net (decrease) increase in cash and due from banks 4,259 4,367 Cash and due from banks at beginning of period 25,500 28,232 ---------- ---------- Cash and due from banks at end of period $ 30,069 $ 32,599 - ------------------------------------------------------------------------------------------ Supplemental Disclosure of Cash Flow Information: Cash paid during the period: Interest $ 15,114 $ 15,635 Income taxes 2,939 3,386 Noncash financing and investing activities: Capital lease obligation - 1,285 - ------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 3 COMMERCE BANK STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY (Unaudited) (in thousands)
Unrealized Loss on Common Stock Marketable ------------------- Capital Retained Equity Shares Amount Surplus Earnings Security Total -------- -------- --------- ---------- ----------- -------- Nine months ended September 30, 1993 Balance at January 1, 1993 2,511 $ 8,278 $ 25,460 $ 5,705 $ (30) $ 27,413 Net income - - - 4,860 - 4,860 Issuance of common stock 33 83 465 - - 548 Change in valuation allowance for marketable equity security - - - - 10 10 Cash dividends declared - - - (914) - (914) ------ ------- -------- ------- --------- -------- Balance at September 30, 1993 2,544 $ 8,361 $ 25,925 $ 9,651 $ (20) $ 41,917 ------ ------- -------- ------- --------- -------- Nine months ended September 30, 1994 Balance at January 1, 1994 2,687 $ 6,717 $ 29,062 $ 7,810 $ - $ 43,589 Adjustment to beginning balance for change in accounting method for net unrealized gain on securities available for sale, net of tax of $1,253,000 - - - 2,327 - 2,327 Net income - - - 5,449 - 5,449 Issuance of common stock 48 120 1,008 - - 1,128 Changes in net unrealized loss on securities available for sale, net of tax effect - - - (3,767) - (3,767) Cash dividends declared - - - (1,363) - (1,363) ------ ------- -------- ------- --------- -------- Balance at September 30, 1994 2,735 $ 6,837 $ 30,070 $10,456 $ - $ 47,363 - --------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of the financial statements. 4 COMMERCE BANK Form F-4 September 30, 1994 Notes to Financial Statements - ----------------------------- Note 1. General ------- The financial statements in this report have not been audited. In the opinion of management, all adjustments necessary for a fair presentation of the financial position and results of operations for the interim periods have been made. All such adjustments are of a normal recurring nature. These statements should be read in conjunction with the 1993 annual report on Form F-2 and the 1994 reports on Form F-4. Results of operations for the nine months ended September 30, 1994 are not necessarily indicative of the results of operations for the full year or any other interim periods. Note 2. Merger with BB&T Financial Corporation -------------------------------------- Commerce Bank ("Commerce") entered into an Agreement and Plan of Reorganization, dated as of June 24, 1994 (the "Agreement"), with BB&T Financial Corporation, a bank holding company headquartered in Wilson, North Carolina ("BB&T"). The Agreement provides for the merger of Commerce with and into a subsidiary of BB&T. As an inducement for BB&T to enter into Agreement, Commerce entered into a Stock Option Agreement, dated as of June 24, 1994 (the "Option Agreement"), whereby it granted BB&T an irrevocable option (the "Option") to purchase up to that number of shares of Commerce's common stock (the "Option Shares") as would equal 19.9% of the aggregate shares of Commerce common stock that would be outstanding immediately after the issuance of the Option Shares upon full exercise of the Option, at a price of $31.50 per Option Share. The Option is exercisable, in whole or in part, at any time and from time to time for a designated period of time following the occurrence of a "Purchase Event" (as defined in the Option Agreement). Note 3. Commitments ----------- At September 30, 1994, the amount of off-balance sheet commitments to extend credit were $73.1 million and standby letters of credit and financial guarantees were $5.78 million. 5 COMMERCE BANK Form F-4 September 30, 1994 Note 4. Accounting Change ----------------- Effective January 1, 1994, Commerce adopted Statement of Financial Accounting Standard No. 115 ("SFAS 115") "Accounting for Certain Investments in Debt and Equity Securities". In accordance with SFAS 115, prior period financial statements have not been restated to reflect the change in accounting principle. SFAS 115 requires that certain securities be classified into one of three categories: held to maturity, available for sale, or trading based on management's ability and intent at time of purchase. Securities classified as held to maturity are carried at their amortized cost; securities classified as available for sale are carried at their fair values with the amount of unrealized gains or losses, net of income taxes, reported as a separate component of shareholders' equity; and securities classified as trading are carried at their fair value with the unrealized gains or losses included in earnings. As a result of the adoption of SFAS 115, on January 1, 1994, Commerce classified securities with a fair value of approximately $155 million as securities available for sale. The opening balance of shareholders' equity was increased by $2.32 million relating to net unrealized gain on securities available for sale of $3.58 million, less applicable income taxes of $1.25 million. Prior to the adoption of SFAS 115, securities deemed available for sale were carried at the lower of aggregate amortized cost or market value. Note 5. Earnings Per Share ------------------ Primary earnings per share are calculated on the basis of the weighted average number of shares outstanding during the period after giving retroactive effect to the 5% stock dividends declared in 1993 and 1992. Dilutive stock options have been converted to common stock equivalents for the calculation of weighted average shares outstanding based upon the average market price of Commerce's common stock. Fully diluted earnings per share assumes the conversion of outstanding convertible subordinated capital notes and elimination of interest paid thereon, after tax effect, and the exercise of dilutive stock options, as of the beginning of each period. The dilutive effect of outstanding options and convertible subordinated debt is computed using the greater of the closing price or the average market price of Commerce's stock. The computation of earnings per share is provided on the following page. 6 Earnings per share were determined as follows: (In thousands, except per share)
Three Months Ended Nine Months Ended September 30, September 30, 1994 1993 1994 1993 ---- ---- ---- ---- Primary Average common shares outstanding 2,731 2,665 2,713 2,655 Dilutive common stock options assumed exercised 123 93 106 80 - --------------------------------------------------------------------------------------------------- Average primary shares outstanding 2,854 2,758 2,819 2,735 - --------------------------------------------------------------------------------------------------- Net Income $1,847 $1,712 $5,449 $4,860 Per Share Amount .64 .52 1.93 1.77 - --------------------------------------------------------------------------------------------------- Fully diluted Average common shares outstanding 2,731 2,665 2,713 2,655 Dilutive common stock options 123 94 103 83 Dilutive convertible subordinated capital notes assumed converted 263 263 263 263 - --------------------------------------------------------------------------------------------------- Average fully diluted shares outstanding 3,117 3,022 3,084 3,001 - --------------------------------------------------------------------------------------------------- Net Income $1,847 $1,712 $5,449 $4,860 Add interest on convertible subordinated capital notes, after taxes 81 81 243 243 - --------------------------------------------------------------------------------------------------- Adjusted net income $1,928 $1,793 $5,692 $5,103 - --------------------------------------------------------------------------------------------------- Per share amount $.62 $.60 $1.85 $1.70 - ---------------------------------------------------------------------------------------------------
Note 6. Non-recurring Charge -------------------- During the third quarter of 1993, Commerce recorded a special non-recurring, noncash charge to earnings of $910,000 for the write down of the excess cost over the fair value of tangible and identified intangible assets of deposits acquired on September 15, 1990. The adjustment better aligns management's estimate of the unidentified intangible asset value, given changes in operating strategy and market and economic conditions. At September 30, 1994 Commerce had unamortized intangible assets of $821,000. 7 COMMERCE BANK FINANCIAL HIGHLIGHTS (Dollars in thousands, except per share date)
Three Months Ended Nine Months Ended September 30, (Decrease) September 30, (Decrease) 1994 1993 Increase 1994 1993 Increase --------- --------- ---------- --------- --------- ---------- Earnings: Net interest income $ 7,335 $ 6,765 8.4% $ 21,304 $ 19,543 9.0% Net income 1,847 $ 1,712 7.9% $ 5,449 $ 4,860 12.1 - --------------------------------------------------------------------------------------------------- Per Share Data: Net income: Primary $ 0.64 $ 0.62 3.2% $ 1.93 $ 1.77 9.0% Fully diluted 0.62 0.60 3.3 1.85 1.70 8.8 Book value at period and - - 17.32 16.48 5.1 Cash dividends 0.20 0.14 42.9 0.50 0.36 38.9 - --------------------------------------------------------------------------------------------------- Selected Financial Ratios: Return on average asset 1.06% 1.02% 1.06% 1.00% Return on average equity 15.59 16.25 15.61 16.22 Net interest spread 3.92 3.78 3.90 3.79 Net interest margin 4.54 4.36 4.48 4.36 Net overhead ratio 2.50 2.12 2.43 2.21 Average loans/average deposits 65.72 58.88 63.65 57.81 - --------------------------------------------------------------------------------------------------- Daily Averages: Assets $ 692,081 $ 665,211 4.0% $ 687,861 $ 649,120 6.0% Earning assets 640,267 615,549 4.0 636,079 699,973 6.0 Loans, net of unearned income 417,872 364,239 16.0 400,870 340,259 17.8 Investment securities 208,964 240,369 (13.1) 221,779 242,366 (8.5) Deposits 636,839 612,224 3.9 629,651 598,126 5.3 Shareholders' equity 46,985 41,796 12.4 46,653 40,047 16.5 Primary shares outstanding 2,864 2,758 3.5 2,819 2,735 3.1 Fully diluted shares outstanding 3,117 3,022 3.1 3,084 3,001 2.8 - --------------------------------------------------------------------------------------------------- At Period End: Assets $ 699,610 $ 681,896 2.6% Earning assets 644,842 624,443 3.3 Loans, net of unearned income 426,114 372,870 14.8 Investment securities 201,638 246,303 (18.1) Deposits 643,005 629,692 2.1 Shareholders' equity 47,363 41,917 13.0 Allowance for loan losses 7,468 6,955 6.9 Nonperforming assets 6,892 4,126 42.8 - --------------------------------------------------------------------------------------------------- Risk-Based Capital Ratios: Tier 1 10.51% 10.02% Total 12.85 12.50 Tier 1 Average 6.77 6.30 Total risk weighted assets $ 467,877 $ 407,517 - ---------------------------------------------------------------------------------------------------
8 COMMERCE BANK Selected Quarterly Financial Data (Dollars in thousands, except per share date)
Third Second First Fourth Third Quarter Quarter Quarter Quarter Quarter 1994 1994 1994 1993 1993 - ------------------------------------------------------------------------------------------------- Results of operations: Interest income $ 12,592 $ 12,182 $ 11,750 $ 11,888 $ 11,957 Interest expense 5,257 5,032 4,931 5,167 5,192 - ------------------------------------------------------------------------------------------------- Net interest income 7,335 7,150 6,819 6,721 6,765 Provision for loan losses 600 600 600 600 700 - ------------------------------------------------------------------------------------------------- Net interest income after provision for loan losses 6,735 6,550 6,219 6,121 6,065 Noninterest income 2,092 2,358 2,335 2,346 2,625 Securities (losses) gains (28) 10 59 53 1,268 Noninterest expense (1) 6,131 6,262 5,964 5,995 6,831 - ------------------------------------------------------------------------------------------------- Income before income taxes 2,668 2,656 2,649 2,525 3,127 Provision for income taxes 821 815 888 834 1,415 - ------------------------------------------------------------------------------------------------- Net income $ 1,847 $ 1,841 $ 1,761 $ 1,691 $ 1,712 ================================================================================================= Per Share Data: Net Income: Primary $ 0.64 $ 0.66 $ 0.63 $ 0.61 $ 0.62 Fully diluted 0.62 0.63 0.60 0.58 0.60 Book value at period end 17.32 17.10 17.09 16.22 16.48 Cash dividends 0.20 0.15 0.15 0.15 0.14 Common stock price:(2) High 39.50 39.00 27.50 25.50 25.50 Low 36.00 24.50 25.50 23.00 22.75 Close 37.13 39.00 26.50 24.00 23.75 ================================================================================================= Average Balance Sheet Data Assets: Loans, net of unearned income $ 417,872 $ 400,133 $ 384,233 $ 369,232 $ 354,239 Investment Securities 208,964 221,782 234,876 245,039 240,369 Temporary Investments 13,431 14,030 12,821 12,356 20,941 - ------------------------------------------------------------------------------------------------- Total earning assets 640,267 635,945 631,930 626,718 615,549 Allowance for loan losses (7,242) (6,912) (6,809) (6,844) (6,713) Other Assets 59,056 59,251 57,998 58,637 56,375 Total Assets $ 692,081 $ 688,284 $ 683,119 $ 678,511 $ 665,211 ================================================================================================= Liabilities and Shareholders' Equity: Interest bearing deposits $ 531,206 $ 532,136 $ 528,279 $ 529,081 $ 516,719 Short-term borrowings - 77 3,623 1,337 818 Long-term borrowings 6.781 6,799 6,818 6,837 6,856 - ------------------------------------------------------------------------------------------------- Total interest bearing liabilities 537,987 539,012 538,720 537,255 524,393 Non interest bearing liabilities 107,109 103,127 93,081 98,291 99,022 Equity 46,385 46,145 46,828 42,965 41,796 - ------------------------------------------------------------------------------------------------- Total liabilities and equity $ 692,081 $ 688,284 $ 683,119 $ 678,511 $ 665,211 ================================================================================================= Financial Ratios: Return on average assets 1.06% 1.07% 1.05% 0.99% 1.02% Return on average equity 15.59 16.00 15.25 15.61 16.25 Net interest margin 4.54 4.51 4.38 4.28 4.36 =================================================================================================
(1) The third quarter of 1993 included a non-recurring, noncash adjustment of $910,000 for the write down of an intangible asset. (2) As reported by NASDAQ 9 -----END PRIVACY-ENHANCED MESSAGE-----