-----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, N5V5s7DGNoNGDT3fVptGwLYAYTAw9zwpDFILxXXb6bx9helbx53rhWRpuYGBAS2U YRgeBFFLMCVBJqHU2IhRaw== 0000916641-94-000064.txt : 19940728 0000916641-94-000064.hdr.sgml : 19940728 ACCESSION NUMBER: 0000916641-94-000064 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19940726 ITEM INFORMATION: Other events FILED AS OF DATE: 19940727 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SIGNET BANKING CORP CENTRAL INDEX KEY: 0000009659 STANDARD INDUSTRIAL CLASSIFICATION: 6022 IRS NUMBER: 546037910 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-06505 FILM NUMBER: 94540231 BUSINESS ADDRESS: STREET 1: 7 N EIGHTH ST STREET 2: PO BOX 25970 CITY: RICHMOND STATE: VA ZIP: 23260 BUSINESS PHONE: 8047472000 MAIL ADDRESS: STREET 1: 7 N EIGHTH ST STREET 2: PO BOX 25970 CITY: RICHMOND STATE: VA ZIP: 23260 FORMER COMPANY: FORMER CONFORMED NAME: BANK OF VIRGINIA CO DATE OF NAME CHANGE: 19860717 FORMER COMPANY: FORMER CONFORMED NAME: VIRGINIA COMMONWEALTH BANKSHARES INC DATE OF NAME CHANGE: 19721020 FORMER COMPANY: FORMER CONFORMED NAME: VIRGINIA COMMONWEALTH CORP DATE OF NAME CHANGE: 19701113 8-K 1 SIGNET 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): July 26, 1994 SIGNET BANKING CORPORATION (Exact name of registrant as specified in its charter) Virginia 1-6505 54-6037910 (State or other jurisdiction of (Commission (I.R.S. Employer incorporation or organization) File Number) Identification No.) 7 North Eighth Street, Richmond, Virginia 23219 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code 804 747-2000 Not Applicable Former name, former address and former fiscal year, if changed since last report Page 1 of 12 ITEM 5. Other Events. On July 26, 1994, the board of directors of Signet Banking Corporation (the "Corporation") approved the transfer of designated assets and liabilities of Signet Bank/Virginia's credit card division to OakStone Bank, a newly chartered limited purpose Virginia state member credit card bank which will, in conjunction with this transfer, become a wholly-owned subsidiary of OakStone Financial Corporation, a wholly-owned subsidiary of the Corporation (the "Separation"); concurrently with the Separation shares of common stock, par value $.01 per share, of OakStone Financial Corporation (the "Common Stock") representing up to 19.9% of the outstanding shares of such stock will be offered in a global offering (the "Offerings"); and, subject to the satisfaction of certain conditions, on the first business day that is at least 90 days after the consummation of the Offerings, or on a date as soon as practicable thereafter that such conditions thereto have been satisfied, the Corporation intends to distribute all of the Common Stock it holds to its stockholders in a tax-free distribution. ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits. (b) The following pro forma financial information is being filed herewith: (1) Pro Forma Unaudited Consolidated Condensed Statement of Income for the three months ended March 31, 1994. (2) Pro Forma Unaudited Consolidated Condensed Statement of Income for the year ended December 31, 1993. (3) Pro Forma Unaudited Consolidated Condensed Balance Sheet as of March 31, 1994. (c) Exhibits. 1. News release dated July 27, 1994. Page 2 of 12 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. SIGNET BANKING CORPORATION (Registrant) Date: July 27, 1994 /s/ D. S. Norris D. S. Norris Executive Vice President and Controller (Chief Accounting Officer) Page 3 of 12 Item 7.(b). Pro Forma Financial Information The following tables present (i) the historical consolidated condensed statements of income for the three months ended March 31, 1994 (unaudited) and the year ended December 31, 1993, and the unaudited historical consolidated condensed balance sheet as of March 31, 1994, for Signet Banking Corporation and Subsidiaries (the "Corporation) and (ii) the unaudited pro forma consolidated condensed statements of income for the three months ended March 31, 1994 and the year ended December 31, 1993, and the unaudited pro forma consolidated condensed balance sheet as of March 31, 1994 for the Corporation giving effect to the Pro Forma Adjustments described below. The pro forma consolidated condensed statements of income were prepared assuming that the Pro Forma Adjustments had occurred January 1, 1993. The pro forma consolidated condensed balance sheet was prepared assuming that the Pro Forma Adjustments had occurred March 31, 1994. The pro forma consolidated condensed financial statements presented below do not purport to represent what the results of operations or financial position would actually have been if the Pro Forma Adjustments had occurred on the dates referred to above or to be indicative of the future results of operations or financial position of the Corporation. The Pro Forma Adjustments are based upon available information and certain assumptions that the Corporation believes are reasonable. Page 4 of 12 Item 7.(b).1. Signet Banking Corporation and Subsidiaries Pro Forma Unaudited Consolidated Condensed Statement of Income Three Months Ended March 31, 1994 (in thousands - except per share) Signet Signet Banking Banking Corporation Pro Forma Corporation Historical Adjustments Pro Forma Interest income: Loans, including fees $134,164 $(52,697)(1) $81,467 Investment securities 4,781 4,781 Other 50,690 (7,875)(1) 42,815 Total interest 189,635 (60,572) 129,063 income Interest expense: Interest on deposits 42,273 (1,153)(1) 41,120 Short-term borrowings 16,280 (16,280)(1) Long-term borrowings 3,866 3,866 Total interest expense 62,419 (17,433) 44,986 Net interest income 127,216 (43,139) 84,077 Provision for loan losses 5,499 (7,982)(1) (2,483) Net interest income after provision for loan losses 121,717 (35,157) 86,560 Non-interest income 128,363 (87,664)(1) 40,699 Non-interest expense 172,109 (68,774)(1) 103,335 Income before income taxes 77,971 (54,047) 23,924 Applicable income taxes 24,858 (18,917)(2) 5,941 Net income $53,113 $(35,130) $17,983 Earnings per common $0.93 $0.31 share Cash dividends declared declared per share 0.25 0.25 Average common shares outstanding 57,247 57,247 Page 5 of 12 Item 7.(b).2. Signet Banking Corporation and Subsidiaries Pro Forma Unaudited Consolidated Condensed Statement of Income Year Ended December 31, 1993 (in thousands - except per share) Signet Signet Banking Banking Corporation Pro Forma Corporation Historical Adjustments Pro Forma Interest income: Loans, including fees $552,071 $(223,594)(1) $328,477 Investment securities 114,928 114,928 securities Other 136,726 (36,263)(1) 100,463 Total interest income 803,725 (259,857) 543,868 Interest expense: Interest on deposits 168,197 168,197 Short-term borrowings 89,507 (67,994)(1) 21,513 Long-term borrowings 16,681 16,681 Total interest expense 274,385 (67,994) 206,391 Net interest income 529,340 (191,863) 337,477 Provision for loan losses 47,286 (34,030)(1) 13,256 Net interest income after provision for loan losses 482,054 (157,833) 324,221 Non-interest income 365,436 (194,825)(1) 170,611 Non-interest expense 598,316 (181,804)(1) 416,512 Income before income 249,174 (170,854) 78,320 taxes Applicable income taxes 74,760 (60,369)(2) 14,391 Net income $174,414 $(110,485) $63,929 Earnings per common $3.06 $1.12 share Cash dividends declared per share 0.80 0.80 Average common shares outstanding 56,920 56,920 Page 6 of 12 Item 7.(b).1. and 2. Signet Banking Corporation and Subsidiaries Pro Forma Unaudited Consolidated Condensed Statements of Income Pro Forma Adjustments (in thousands) 1) The pro forma consolidated condensed income statements reflect the reduction of income and expenses related to the designated assets and liabilities of the Corporation's credit card division had the distribution of all of the common stock in OakStone Financial Corporation occurred for the periods presented. 2) The pro forma consolidated condensed income statements reflect the net effects of the Pro Forma Adjustments at the federal statutory rate of 35% for the periods presented. Page 7 of 12 Item 7.(b).3. Signet Banking Corporation and Subsidiaries Pro Forma Unaudited Consolidated Condensed Balance Sheet March 31, 1994 (in thousands) Signet Banking Signet Banking Corporation Pro Forma Corporation Historical Adjustments Pro Forma Assets Cash and due from banks $ 502,040 $ (362)(1) $501,678 Interest bearing deposits with other banks 217,430 217,430 Federal funds sold and securities purchased under resale agreements 728,735 728,735 Securities available for sale 1,637,359 1,637,359 Credit card loans held for securitization 1,000,000 (1,000,000)(1) Loans held for sale 241,312 241,312 Trading account securities 262,944 262,944 Investment securities 232,393 232,393 Gross loans 6,028,232 (1,649,005)(1) 4,379,227 Less: Unearned income (53,494) (53,494) Allowance for loan losses (250,477) 63,516 (1) (186,961) Net loans 5,724,261 (1,585,489)(1) 4,138,772 Premises and equipment (net) 232,267 (36,231)(1) 174,660 (21,376)(3) Interest receivable 92,951 (10,349)(1) 82,602 Other assets 657,883 (187,982)(1) 469,901 Total assets $11,529,575 $(2,841,789) $8,687,786 Liabilities Deposits $7,934,684 $ (496,581) $7,438,103 Short-term borrowings 2,101,941 (2,101,941)(1) Long-term borrowings 254,124 254,124 Interest payable 35,490 35,490 Other liabilities 185,403 (46,195)(1) 139,208 Total liabilities 10,511,642 (2,644,717) 7,866,925 Stockholders' equity 1,017,933 (197,072)(2) 820,861 Total liabilities and $11,529,575 $(2,841,789) $8,687,786 stockholders' equity
Page 8 of 12 Item 7.(b).3. Signet Banking Corporation and Subsidiaries Pro Forma Unaudited Consolidated Condensed Balance Sheet Pro Forma Adjustments (in thousands) 1) The pro forma consolidated condensed balance sheet reflects the reduction of the designated assets and liabilities of the Corporation's credit card division had the distribution of all of the common stock of OakStone Financial Corporation occurred at the balance sheet date. (2)The pro forma consolidated condensed balance sheet reflects the reduction of stockholders' equity designated to be transferred to OakStone Financial Corporation as of the balance sheet date. (3)The pro forma consolidated condensed balance sheet reflects, at the balance sheet date, the transfer of ownership of an operations building in Richmond, Virginia that OakStone Financial Corporation will use for future operations. Pursuant to a separation agreement, such building will be transferred to OakStone Financial Corporation at net book value upon consummation of the Separation and Offering. Page 9 of 12 EX-1 2 EXHIBIT 1 Signet Banking Corporation Announces Plans for Credit Card Spin-off RICHMOND, VA (July 27, 1994) - Today, Signet Banking Corporation filed a registration statement with the Securities and Exchange Commission for an initial public offering of up to a 19.9 percent interest in a newly formed corporation that will house Signet's national credit card business. Signet stated that the initial public offering could be completed by early fall. Signet intends to follow this offering with a tax-free distribution to Signet shareholders of its remaining interest in the credit card company. This distribution could be completed as early as year-end 1994. The new credit card company will apply for a listing on the New York Stock Exchange. J.P. Morgan Securities Inc., Goldman, Sachs & Co. and Smith Barney Inc. will act as managing underwriters of the offering. "This is a milestone event for our company in which we take great pride - - marking the culmination of an extensive 12-month review by our Board of Directors and senior management team," said Robert M. Freeman, chairman and chief executive officer of Signet Banking Corporation. "In 1988, we began investing in technology that would enable us to become a state-of-the-art, unique provider of financial products and services. We successfully achieved this objective in our credit card division, and with the spin-off, we will be able to concentrate fully on improving the business strategies of our Core Bank. The transactions we are announcing today will enhance shareholder value by creating two strong and independent financial institutions," Freeman said. Richard D. Fairbank, who heads Signet's credit card division, will serve as chief executive officer of the new credit card bank. When the spin-off is complete, Fairbank will assume the additional title of chairman. Signet's existing management committee will remain at Signet, and will oversee the plans the company has developed for its core banking businesses. Page 10 of 12 "This initiative is the result of a great team effort at Signet on behalf of the shareholders," Fairbank said. "We are excited by the opportunities and challenges of continuing innovative financial strategies in the new company. We have named the new company OakStone Financial Corporation reflecting its financial strength and stability." Signet's credit card business is one of the 15 largest issuers of MasterCard and VISA credit cards in the United States, as measured by loan outstandings. As of June 30, 1994, Signet had about 4 million accounts and $6.6 billion in managed loans outstanding. The new credit card company will be headquartered in Northern Virginia with operations centers in Richmond and Fredericksburg, VA. Signet's Board of Directors will serve as the interim board of the new card company until the spin-off is complete and a separate board is established. Signet also announced that it intends to implement a comprehensive core bank improvement program that will focus on cost reductions and revenue initiatives. Signet expects to take special one-time charges during the third quarter in connection with cost reduction measures (an early retirement plan and employee severance) and termination of certain data processing services related to the separation of the credit card business. It is estimated that these charges in the aggregate may range between $60 and $70 million on a pretax basis. Revenue initiatives will include the development of selected national product strategies in the areas of student lending, equity and mortgage lending, and installment lending. Signet plans to apply the experience it has gained in the use of information-based technology as it continues to redefine its core banking business. "Throughout this year and next, we will reinvent Signet Bank one process and one product at a time with the goal of delivering maximum long- term value to our customers and our shareholders," stated Malcolm S. McDonald, Signet's president and chief operating officer. "We will turn what is already a very good banking franchise into a 'Best Bank'," Freeman added. "We've done it before, and we'll do it again. Signet has a proud 73-year history of serving our customers and communities, and we will continue in that proud and independent tradition as we look toward what we believe to be a very promising future." Page 11 of 12 Signet Banking Corporation is a $10.8 billion organization comprised of five lines of business, including Bank Card, Consumer Banking, Capital Markets, Commercial Banking and Real Estate Lending. Signet has gained national prominence as one of the fastest-growing credit card issuers in the United States. With 240 full-service banking offices throughout Virginia, Maryland and the District of Columbia and a 24-hour Telebanking center, Signet provides a full array of investment, credit, cash management, and general banking products and services to institutional and individual customers. ### A registration statement relating to these securities has been filed with the Securities and Exchange Commission but has not yet become effective. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This news release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any State in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such State. 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