<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period Commission file number 1-7901.
ended September 30, 1995
BARNETT BANKS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Florida 59-0560515
- ----------------------------------- -----------------------
(State of incorporation) (I.R.S. Employer
Identification No.)
50 North Laura Street
Jacksonville, Florida 32202
--------------------------------------
(Address of Principal Executive Offices)
(904) 791-7720
-------------------------------------------------
(Registrants telephone number, Including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirement for the past 90 days.
Yes X No
----- -----
Barnett Banks, Inc. Common Stock - September 30, 1995:
94,596,475 shares outstanding
<PAGE>
1995 Third Quarter
Form 10-Q
Barnett Banks, Inc.
<PAGE>
BARNETT BANKS, INC.
FINANCIAL REVIEW AND FORM 10-Q
TABLE OF CONTENTS
PART I--FINANCIAL INFORMATION
Consolidated Financial Highlights........................................... 3
Management Discussion (Item 2).............................................. 4
Quarterly Average Balances, Yields and Rates..............................12
Financial Statements (Item 1):
Statements of Financial Condition.........................................14
Statements of Income......................................................15
Statements of Changes in Shareholders' Equity.............................16
Statements of Cash Flows..................................................17
Notes to Financial Statements.............................................18
PART II--OTHER INFORMATION
EXHIBITS AND REPORTS ON FORM 8-K (ITEM 6)
- -----------------------------------------
Exhibit 11, "Statement Re computation of per share earnings," is included
in the Notes to Financial Statements on page 19 of this report.
A report on Form 8-K, dated September 5, 1995, filed exhibits related to a
Registration Statement on Form S-3.
<PAGE>
BARNETT BANKS, INC. AND SUBSIDIARIES
FORM 10-Q, SEPTEMBER 30, 1995
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BARNETT BANKS, INC.
Dated: November 13, 1995 /s/Charles W. Newman
-----------------------------------
Charles W. Newman
Chief Financial Officer
Dated: November 13, 1995 /s/Patrick J. McCann
-----------------------------------
Patrick J. McCann
Controller
2 BARNETT BANKS, INC.
<PAGE>
CONSOLIDATED FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
FOR THE PERIODS ENDED SEPTEMBER 30-- ---------------------------- -------------------------
DOLLARS IN MILLIONS EXCEPT PER SHARE DATA 1995 1994 CHANGE 1995 1994 CHANGE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FOR THE PERIOD
Net interest income (taxable-equivalent)....... $446.9 $419.8 6% $1,312.9 $1,251.3 5%
Provision for loan losses...................... 34.2 15.4 -- 85.3 48.5 76
Non-interest income............................ 182.7 138.1 32 528.6 412.8 28
Non-interest expense........................... 379.3 340.3 11 1,124.7 1,022.7 10
Net income..................................... 134.1 123.4 9 395.0 362.6 9
============================================================================================================================
PER COMMON SHARE
Net income:
Primary...................................... $ 1.34 $ 1.21 11% $ 3.91 $ 3.55 10%
Fully diluted................................ 1.29 1.18 9 3.78 3.45 10
Dividends declared............................. .47 .41 15 1.35 1.18 14
Book value(1).................................. 33.75 30.30 11 33.75 30.30 11
Stock price:
High......................................... 58.88 47.63 24 58.88 48.13 22
Low.......................................... 51.25 43.25 18 38.75 39.75 (3)
Close........................................ 56.63 44.25 28 56.63 44.25 28
============================================================================================================================
KEY PERFORMANCE RATIOS
Return on assets............................... 1.30% 1.30% -- 1.28% 1.28% --
Return on common equity........................ 16.54 16.78 (1)% 16.46 16.71 (1)%
Return on total equity......................... 16.02 16.19 (1) 15.94 16.12 (1)
Net yield on earning assets.................... 4.90 4.85 1 4.83 4.90 (1)
Overhead ratio................................. 60.25 61.03 (1) 61.08 61.45 (1)
Shareholders' equity to total assets(1)........ 8.27 8.09 2 8.27 8.09 2
Leverage ratio................................. 6.35 7.66 (17) 6.35 7.66 (17)
Total risk-based capital ratio................. 12.02 13.75 (13) 12.02 13.75 (13)
============================================================================================================================
AVERAGE BALANCES
Assets......................................... $41,136 $38,119 8% $41,076 $37,798 9%
Deposits....................................... 33,447 31,334 7 33,704 31,663 6
Loans, net of unearned income.................. 30,191 26,968 12 29,555 26,447 12
Earning assets................................. 36,364 34,494 5 36,323 34,107 6
Common equity.................................. 3,133 2,835 11 3,089 2,784 11
Total equity................................... 3,347 3,050 10 3,304 2,999 10
Fully diluted shares (thousands)............... 103,469 104,779 (1) 104,611 104,987 --
============================================================================================================================
AT PERIOD-END
Assets............................................................................. $41,175 $38,962 6%
Deposits........................................................................... 32,248 31,606 5
Loans, net of unearned income...................................................... 30,469 27,372 11
Long-term debt..................................................................... 1,151 680 69
Preferred stock.................................................................... 213 215 (1)
Total equity....................................................................... 3,328 3,062 9
Common shares (thousands).......................................................... 94,596 96,978 (2)
============================================================================================================================
</TABLE>
(1)Based on equity before deduction of the employee stock ownership plan
obligation.
BARNETT BANKS, INC. 3
<PAGE>
MANAGEMENT DISCUSSION
<TABLE>
<CAPTION>
TABLE 1 SELECTED QUARTERLY DATA
1995 1994
------------------------- ------------------------------------
DOLLARS IN MILLIONS EXCEPT PER SHARE DATA--TAXABLE-EQUIVALENT THIRD SECOND FIRST FOURTH THIRD SECOND FIRST
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net interest income................................... $446.9 $435.6 $430.5 $426.2 $419.8 $416.2 $415.3
Provision for loan losses............................. 34.2 26.8 24.3 25.6 15.4 13.7 19.3
- ---------------------------------------------------------------------------------------------------------------------------------
Net interest income after loan loss provision......... 412.7 408.8 406.2 400.6 404.4 402.5 396.0
Non-interest income................................... 182.7 183.1 162.8 129.8 138.1 137.4 137.3
Non-interest expense.................................. 379.3 381.9 363.5 341.5 340.3 341.8 340.6
- ---------------------------------------------------------------------------------------------------------------------------------
Income before income taxes............................ 216.1 210.0 205.5 188.9 202.2 198.1 192.7
Income tax provision.................................. 75.4 69.4 66.5 52.6 67.6 65.9 63.7
Taxable-eqivalent adjustment.......................... 6.6 8.4 10.3 10.9 11.2 11.0 11.0
- ---------------------------------------------------------------------------------------------------------------------------------
Net income................................... $134.1 $132.2 $128.7 $125.4 $123.4 $121.2 $118.0
=================================================================================================================================
Primary net income per common share................... $1.34 $1.30 $1.27 $1.24 $1.21 $1.19 $1.15
Fully diluted net income per common share............. 1.29 1.26 1.23 1.21 1.18 1.15 1.12
=================================================================================================================================
</TABLE>
SUMMARY
Barnett earned $134.1 million, or $1.29 per fully diluted share, in the
third quarter compared to $123.4 million, or $1.18 per share, a year earlier,
an increase of 9%. Third quarter net income was up from $132.2 million, or
$1.26 per share, in the second quarter of 1995.
Return on assets in the third quarter was 1.30%, the same as the third
quarter of 1994 and slightly above the 1.28% in the second quarter of 1995.
Return on average common shareholders' equity of 16.54% was slightly below
last year's 16.78% but up from 16.34% in the second quarter.
Earnings for the first nine months of 1995 grew 9% to $395.0 million, or
$3.78 per fully diluted share, from $362.6 million, or $3.45 per share,
earned a year ago. The return on assets of 1.28% equalled the first nine
months of 1994, while return on average common shareholders' equity was
16.46%, compared to 16.71% during the same period in 1994.
Third quarter taxable-equivalent net interest income rose $27.1 million
from the same period last year to $446.9 million, as earning assets grew $1.9
billion and the net yield on earning assets rose 5 basis points to 4.90%.
Non-interest income rose 32% to $182.7 million and represented 29% of total
revenue. Non-interest expense grew 11% to $379.3 million, representing an
overhead ratio of 60.25%. The increases in non-interest income and
non-interest expense primarily reflect the fee revenue and operating expenses
added by acquired companies. TABLE 1 provides summary income statements for
the last seven quarters.
Provision expense was $34.2 million compared to $15.4 million last year
and $26.8 million in the second quarter. Non-performing assets of $282
million on September 30 were .92% of outstandings. Net charge-offs in the
third quarter of $34.0 million were $18.6 million higher than last year, $6.7
million higher than the second quarter and represented an annualized .45% of
average loans.
EARNING ASSETS
LOANS. Average loans increased $3.2 billion, or 12%, from the same
period last year. This growth in loans was paced by lending to consumers.
Third quarter mortgage loan originations of $1.8 billion were up 27%
from the second quarter level. Residential loans totaled $11.4 billion, up
$1.6 billion from last year and $307 million from the second quarter. As part
of the company's asset-liability management strategy, residential loan growth
may decline since the company will sell substantially all new adjustable-rate
mortgage originations in addition to fixed-rate mortgage originations into
the secondary market.
On September 30, 74% of the residential loan portfolio consisted of
adjustable-rate mortgages. Most of the adjustable-rate mortgage portfolio
reprices annually based on a spread over the one-year constant maturity
Treasury index. This repricing may be limited by annual and lifetime caps.
Installment loans were 12%, or $897 million, higher than the same period
last year with increases in home equity, student and auto loans. Installment
loans grew $232 million during the third quarter to $8.7 billion, primarily
as a result of growth in home equity and auto loans. The volume of automobile
loans, the most significant component of installment loans, is dependent upon
new and used automobile sales, which can vary depending on economic
conditions and other factors.
4 BARNETT BANKS, INC.
<PAGE>
Bank card outstandings of $1.6 billion were 34% higher than the $1.2
billion a year earlier and grew $127 million during the quarter. This growth
is primarily due to increased marketing initiatives.
Commercial loans grew 6%, or $271 million, from last year to $4.6
billion. Commercial real estate loans decreased slightly from last year and
the prior quarter to $3.3 billion.
INVESTMENT SECURITIES AND OTHER EARNING ASSETS. The company's securities
portfolio consists primarily of AAA or equivalent-rated securities, including
49% U.S. Treasury securities, with an average life of 1.11 years. Average
securities of $6.1 billion were $1.3 billion, or 18%, lower than the same
period last year and $581 million, or 9%, below the second quarter. During
the quarter, a portion of the proceeds from maturing securities were used to
fund loan growth. It is not expected that this will continue to be a major
source of funding loans.
At September 30, the available-for-sale securities portfolio had a $39.6
million unrealized gain compared to a $33.1 million unrealized loss at
September 30, 1994 and a $29.6 million unrealized gain at June 30, 1995.
DEPOSITS AND OTHER FUNDING SOURCES
DEPOSITS. Average deposits rose $2.1 billion, or 7%, from the third
quarter of last year to $33.5 billion, reflecting the acquisition of the
Florida franchise of Glendale Federal Bank, FSB on December 15, 1994, offset
in part by reductions in transaction, money market and savings account
balances.
Time deposits rose $3.2 billion from a year ago, but transaction, money
market and savings account balances dropped $1.0 billion. This shift in the
deposit mix contributed to a 55 basis-point increase in the rate paid on
interest-bearing deposits.
Average deposits fell $225 million during the quarter, as transaction,
money market and savings account balances dropped $220 million.
OTHER FUNDING SOURCES. Average federal funds purchased, securities
<TABLE>
<CAPTION>
TABLE 2 INTEREST RATE SENSITIVITY ANALYSIS
NON-RATE
SENSITIVE
0-30 31-90 91-180 181-365 AND OVER
SEPTEMBER 30, 1995--DOLLARS IN MILLIONS DAYS DAYS DAYS DAYS ONE YEAR TOTAL
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Commercial, financial and agricultural.................... $ 3,236 $ 145 $ 125 $ 193 $ 907 $ 4,606
Real estate construction.................................. 846 4 6 7 45 908
Commercial mortgages...................................... 1,012 140 123 210 778 2,263
Residential mortgages..................................... 756 1,295 1,728 3,683 4,035 11,497
Installment............................................... 1,895 462 685 1,296 4,490 8,828
Other loans............................................... 1,787 580 2,367
- --------------------------------------------------------------------------------------------------------------------------
Total loans.......................................... 9,532 2,046 2,667 5,389 10,835 30,469
Securities................................................ 310 926 1,171 1,256 2,282 5,945
Federal funds sold and other earning assets............... 5 5
- --------------------------------------------------------------------------------------------------------------------------
Total earning assets................................. $ 9,847 $2,972 $3,838 $6,645 $13,117 $36,419
==========================================================================================================================
NOW and money market accounts............................. $12,473 $12,473
Savings deposits.......................................... 3,327 3,327
Time deposits............................................. 1,851 $1,780 $3,079 $2,592 $ 2,863 12,165
- --------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits...................... 17,651 1,780 3,079 2,592 2,863 27,965
Short-term borrowings..................................... 2,293 325 100 2,718
Long-term debt............................................ 47 275 40 10 779 1,151
- --------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities........................ $ 19,991 $2,380 $3,119 $2,702 $ 3,642 $31,834
==========================================================================================================================
Gap before interest rate swaps and management adjustments. $(10,144) $ 592 $ 719 $3,943 $ 9,475
Management adjustments(1)................................. 7,647 636 490 214 (8,987)
Interest rate swaps....................................... (638) (1,460) 915 (150) 1,333
- --------------------------------------------------------------------------------------------------------------------------
Interest rate sensitivity gap adjusted for interest rate
swaps and management adjustments........................ (3,135) (232) 2,124 4,007 1,821
Cumulative adjusted interest rate sensitivity gap......... (3,135) (3,367) (1,243) 2,764
Cumulative adjusted gap as a percentage of earning assets:
September 30, 1995...................................... (8.61)% (9.25)% (3.41)% 7.59%
September 30, 1994...................................... (16.49) (15.26) (10.94) 2.50
====================================================================================================
</TABLE>
(1) Management adjustments reflect the company's estimate of the effects of
early principal repayments on residential and other amortizing loans and
securities and the anticipated repricing sensitivity of non-maturity deposit
products. Historically, balances on non-maturity deposit accounts have
remained relatively stable despite changes in market interest rates.
Management has classified certain of these accounts as non-rate sensitive
based on management's historical pricing practices and runoff experience.
Two-thirds of the NOW and savings account balances, and approximately 20% of
the money market account balances, are classified as non-rate sensitive.
BARNETT BANKS, INC. 5
<PAGE>
sold under agreements to repurchase and other short-term borrowings of $2.7
billion remained relatively unchanged from the previous year and the second
quarter.
The company utilizes a commercial paper facility to fund its mortgage
banking and consumer finance loan origination pipelines. Borrowings under
this facility were $709 million at September 30.
ASSET-LIABILITY MANAGEMENT
Net interest income, Barnett's primary source of revenue, is affected by
changes in interest rates as well as the level and mix of earning assets and
interest-bearing liabilities. The impact of changes in interest rates on the
company's net interest income represents Barnett's level of interest rate
sensitivity. Barnett uses several asset-liability management techniques to
measure its interest rate sensitivity within specific rate-sensitivity limits.
Interest rate sensitivity is primarily a function of the repricing
structure of the company's balance sheet. TABLE 2 shows this structure as of
September 30, with each maturity interval referring to the earliest repricing
opportunity (i.e., the earlier of scheduled contractual maturity or next rate
reset date) for each asset and liability. The resultant gaps are a measure of
the sensitivity of earnings to changes in interest rates.
In order to more appropriately reflect the repricing structure of the
company's balance sheet, management has made certain adjustments to the
table. Based on historical and industry data, an estimate of the expected
prepayments of amortizing loans and investment securities is included in the
analysis. Similarly, an adjustment is made to reflect the behavioral
characteristics of certain core deposits without contractual maturity (i.e.,
interest-bearing checking, savings and money market deposit accounts). The
footnote accompanying the table more fully explains the specific adjustments
made to the analysis. This analysis indicates that the company was moderately
liability sensitive on September 30, with a six-month negative gap of 3.41%.
In addition to gap analysis, management uses rate-shock simulation and
duration of equity to measure the rate sensitivity of its balance sheet.
These measures of risk show that an instantaneous 1.00% change in interest
rates would have less than a 1% impact on net interest income over a
twelve-month period.
Barnett controls its interest rate risk principally by managing the
level and duration of certain balance sheet assets and liabilities. The
company also uses off-balance-sheet instruments (derivatives) to manage its
interest rate sensitivity position. Barnett ensures that both balance sheet
and off-balance-sheet instruments used for asset-liability management
purposes are consistent with safe and sound banking practices.
The company's current derivatives portfolio used for asset liability
management purposes, summarized in TABLE 3, has a notional amount of $3.2
billion. This portfolio consists of $2.9 billion of interest rate swaps and
$250 million of interest rate floors. Most of the company's swaps involve
receipt of fixed cash flows in exchange for variable (primarily LIBOR-based)
cash flows. The swaps are linked to prime rate loans and create a net
fixed-rate cash flow. These swaps and floors were executed to reduce the
company's exposure to flat or falling interest
<TABLE>
<CAPTION>
TABLE 3 DERIVATIVE FINANCIAL INSTRUMENTS
WEIGHTED AVERAGE INTEREST RATE
------------------------------
AVERAGE
NOTIONAL REPLACEMENT RECEIVE PAY MATURITY
SEPTEMBER 30, 1995--DOLLARS IN MILLIONS AMOUNT VALUE RATE(1) INDEX RATE(1) INDEX IN YEARS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Interest rate swaps:
Basis swap............................ $ 50 $ .54 5.87% LIBOR 5.20% CMT 2.33
Generic swaps:
Receive fixed....................... 2,340 (7.12) 5.16 Fixed 5.85 LIBOR 1.25
Pay fixed........................... 267 (.42) 5.91 LIBOR 6.38 Fixed 1.99
Index-principal swaps................. 250 (1.48) 4.47 Fixed 5.88 LIBOR .32(2)
Interest rate floors.................... 250 2.64 6.00(3) LIBOR -- -- 2.26
- -----------------------------------------------------------------------------------------------------------------------
Total................................... $3,157 $(5.84) 5.25% 5.89% 1.34
=======================================================================================================================
</TABLE>
(1) Based upon contractual rates at September 30, 1995.
(2) The maturity of index-principal swaps can extend to a maximum average of
1.8 years.
(3) The company receives interest equal to the amount by which LIBOR is less
than 6.00%
6 BARNETT BANKS, INC.
<PAGE>
<TABLE>
<CAPTION>
TABLE 4 CHANGE IN NET INTEREST INCOME
THREE MONTHS NINE MONTHS
--------------------------------- ---------------------------------
FOR THE PERIODS ENDED SEPTEMBER 30, 1995-- CHANGE FROM PREVIOUS YEAR DUE TO: CHANGE FROM PREVIOUS YEAR DUE TO:
--------------------------------- ---------------------------------
TAXABLE-EQUIVALENT DOLLARS IN MILLIONS VOLUME RATE(1) TOTAL VOLUME RATE(1) TOTAL
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Interest income:
Loans............................................ $ 70.5 $42.3 $112.8 $198.2 $122.5 $320.7
Taxable securities............................... (12.2) 10.8 (1.4) (22.1) 40.4 18.3
Tax-free securities.............................. (11.3) (1.5) (12.8) (23.4) .9 (22.5)
Other earning assets............................. -- .1 .1 (.6) 1.1 .5
- --------------------------------------------------------------------------------------------------------------------------
Total interest income...................... 47.0 51.7 98.7 152.1 164.9 317.0
- --------------------------------------------------------------------------------------------------------------------------
Interest expense:
NOW and money market accounts.................... (5.2) (3.2) (8.4) (13.3) 19.8 6.5
Savings deposits................................. (.5) (2.0) (2.5) .2 1.5 1.7
Certificates of deposit under $100,000........... 28.0 24.7 52.7 79.2 69.6 148.8
Other time deposits.............................. 6.5 7.2 13.7 14.8 19.4 34.2
- --------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits............ 28.8 26.7 55.5 80.9 110.3 191.2
- --------------------------------------------------------------------------------------------------------------------------
Federal funds purchased and securities sold
under agreements to repurchase.............. (11.2) 4.3 (6.9) (6.9) 23.4 16.5
Other short-term borrowings...................... 11.6 5.6 17.2 22.3 14.8 37.1
Long-term debt................................... 7.8 (2.0) 5.8 14.3 (3.7) 10.6
- --------------------------------------------------------------------------------------------------------------------------
Total interest expense..................... 37.0 34.6 71.6 110.6 144.8 255.4
- --------------------------------------------------------------------------------------------------------------------------
Net interest income........................ $ 10.0 $17.1 $ 27.1 $ 41.5 $ 20.1 $ 61.6
==========================================================================================================================
</TABLE>
(1) Includes changes in interest income and expense not due solely to volume
or rate changes.
rates.
Approximately $2.6 billion of the interest rate swap portfolio is
fixed-term non-amortizing interest rate swaps, $1.0 billion of which mature
in early 1996 and $1.3 billion of which mature beginning April 1997 through
January 1998. During the third quarter, $747 million of index amortized
interest rate swaps matured and the company entered into $1.3 billion of
non-amortizing fixed-term interest rate swaps. These instruments have similar
characteristics to balance-sheet instruments typically used by the company
for asset-liability management purposes.
The derivatives portfolio has operated as intended, reducing the
company's exposure to falling or flat interest rates. The replacement value
related to the company's derivatives portfolio, including deferred gains on
terminated floors, was a positive $18.3 million on September 30, 1995
compared to a negative $78.8 million last year and a positive $12.3 million
on June 30, 1995.
The interest rate swap portfolio reduced interest income in the third
quarter of 1995 by $6.5 million and increased interest expense by $170,000,
representing a 7 basis-point reduction in the net yield on earning assets.
The interest rate swap portfolio reduced third quarter 1994 net interest
income by $2 million, or 3 basis points in the net yield.
Barnett manages the credit exposure of its derivatives in a manner
consistent with the granting of credit. Any exposure is generally measured by
the market replacement value at any point in time. Barnett utilizes
collateral exchange agreements with derivatives counterparties in order to
control the level of credit exposure to these entities.
NET INTEREST INCOME
Barnett's taxable-equivalent net interest income in the third quarter
was $446.9 million, up $27.1 million from last year and $11.3 million from
the second quarter level. These increases primarily reflect loan growth and a
higher net yield on earning assets. TABLE 4 shows the changes in net interest
income by category due to shifts in volume and rate.
The net yield on earning assets rose to 4.90% from 4.85% a year earlier
and 4.80% last quarter. The expansion in the net interest margin from last
year was caused primarily by the increase in loans as a percentage of earning
assets and continued repricing within the loan portfolio partially offset by
increased funding costs and changes in deposit mix. The increase in net yield
from the second quarter was primarily due to favorable changes in asset mix
as well as continued repricing in the residential mortgage and installment
loan portfolios.
The rate on interest-bearing liabilities rose 62 basis points from the
third quarter of 1994. That increase reflects the Federal Reserve's actions
to increase short-term interest rates during the period, as well as increased
use of non-deposit funding and the change in deposit mix previously
mentioned. The rate paid on interest-bearing liabilities in the third quarter
fell 3 basis points from the second quarter level,
BARNETT BANKS, INC. 7
<PAGE>
<TABLE>
<CAPTION>
TABLE 5 OTHER NON-INTEREST EXPENSE
1995 1994
------------------------- ------------------------------------
DOLLARS IN THOUSANDS THIRD SECOND FIRST FOURTH THIRD SECOND FIRST
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Advertising and marketing............................... $ 8,407 $ 7,737 $ 5,416 $ 8,600 $ 7,427 $ 6,594 $ 6,680
Amortization of intangibles............................. 13,415 14,022 12,326 9,235 8,729 9,138 9,474
Communications.......................................... 10,852 10,464 9,321 8,663 8,928 9,130 7,024
Expenses and provision on real estate held for sale..... 2,901 3,418 3,513 2,087 3,083 4,483 6,419
FDIC assessments........................................ 612 18,565 18,533 17,467 17,760 18,042 18,140
Franchise and credit card fees.......................... 5,184 5,613 4,398 4,271 4,150 3,887 4,139
Outside computer services............................... 11,081 10,214 10,404 9,205 9,754 8,499 9,250
Postage................................................. 6,878 6,584 6,311 6,170 5,420 5,831 5,756
Stationery and supplies................................. 4,750 4,770 4,708 4,694 3,428 3,939 3,706
Insurance, taxes and other.............................. 54,852 43,334 45,724 45,258 46,374 44,167 43,775
- -----------------------------------------------------------------------------------------------------------------------------
Total................................................... $118,932 $124,721 $120,654 $115,650 $115,053 $113,710 $114,363
=============================================================================================================================
</TABLE>
(1) Includes a refund from the FDIC representing decreased deposit insurance
premiums from June 1 through September 30.
primarily reflecting the 14 basis-point reduction in the rate paid on NOW and
money market balances and lower rates on non-deposit funding.
The yield on interest-bearing assets increased 68 basis points from the
third quarter of 1994, as a result of the impact of increases in market
interest rates during the period. The rate earned on interest-bearing assets
rose 6 basis points from the second quarter due to the repricing of
adjustable-rate mortgages and the impact of higher yielding loans replacing
maturing securities.
NON-INTEREST INCOME
Non-interest income increased 32% to $182.7 million from $138.1 million
a year ago and was consistent with last quarter. The increase over last year
was primarily generated by the acquisitions of Loan America Financial
Corporation, EquiCredit Corporation and BancPLUS Financial Corporation during
the last 12 months.
Consumer finance income of $23.3 million, representing revenue generated
through EquiCredit's quarterly securitization program and fees for consumer
loan servicing, rose 25% from the second quarter.
Mortgage banking income rose $9.5 million over the same period last year
but fell $9.0 million from the second quarter. The increase over last year
was primarily due to increased net loan servicing revenue as a result of the
acquisitions of Loan America and BancPLUS. Second quarter revenue was higher
than the third quarter due to a $6.7 million gain on the sale of mortgage
servicing rights.
Mortgage servicing provides an ongoing source of fee income to the
company. At September 30, the mortgage servicing portfolio stood at $33.0
billion. This portfolio has grown from $14.1 billion a year ago, as a result
of the previously discussed acquisitions.
NON-INTEREST EXPENSE
Non-interest expense rose 11%, or $38.9 million, from a year ago,
reflecting the impact of acquisitions, partially offset by lower FDIC deposit
insurance premiums. Non-interest expense fell $2.7 million from last quarter
as the reduction in FDIC premiums was largely offset by other expenses. The
overhead ratio of 60.3% in the third quarter was below last year's 61.0% and
the prior quarter's 61.7%.
Salaries and benefits increased 20%, or $31.9 million, from the same
period last year and $2.4 million from last quarter to $192.3 million. The
increase from last year primarily reflects the full-quarter impact of the
addition of 1,431 full-time equivalent employees through acquisitions in the
first quarter while the increase over last quarter represents expense
associated with the higher stock price. Full-time equivalent employees were
19,831 at September 30, compared to 19,890 at June 30, 1995 and 18,307 a year
ago.
Occupancy and equipment expenses rose 5%, or $3.1 million, from the
third quarter of 1994 and $750,000 from the second quarter of 1995, as a
result of acquisitions and the expansion of the EquiCredit franchise.
Other expense grew 3%, or $3.9 million, from last year's level as
increased amortization of intangibles related to acquisitions,
technology-related expense and other expense more than offset the $17.1
million reduction in FDIC premiums. Barnett's FDIC deposit insurance premium
was reduced from $.23 per $100 to $.04, as a result of the Bank Insurance Fund
8 BARNETT BANKS, INC.
<PAGE>
(BIF) reaching the reserve level mandated by Congress. Other expense fell
$5.8 million from the second quarter, reflecting the FDIC premium reduction
partially offset by higher levels of spending for strategic initiatives,
including marketing and technology.
Approximately $4.6 billion of deposits resulting from thrift
acquisitions are insured through the Savings Association Insurance Fund
(SAIF). These deposits maintained their $.23 per $100 assessment, though
legislation has been proposed which would reduce the SAIF assessment to $.04
for well capitalized institutions. The current legislation, if enacted, would
result in a one-time assessment of approximately 79 basis points to be
charged on 80% of SAIF deposits. Any assessment will depend on enactment of
final legislation which could occur as early as the fourth quarter.
Details of other expense for the past seven quarters are shown in TABLE
5.
ASSET QUALITY
RISK ELEMENTS. As shown in TABLE 6, non-performing assets were $282
million on September 30, representing .92% of gross loans plus real estate
held for sale. In comparison, non-performing assets stood at $304 million, or
1.10% of outstandings, on the same date last year, and $281 million, or .93%
of outstandings, on June 30, 1995. The decrease from last year is the result
of the continued resolution of problem loans, either through repayment,
workout of satisfactory credit arrangements with the borrower, foreclosure,
or reductions due to charge-offs.
Borrower experience and financial capacity are critical factors in
underwriting and approving all loan requests. Barnett's commercial real
estate loan policies generally require a maximum loan-to-value ratio of 75%
and a minimum equity requirement of 20% of cost.
Barnett has reduced its exposure to commercial real estate from a high
of 28% of loans in 1988 to 11% this quarter and anticipates maintaining this
level at or below 15% of loans. The commercial loan portfolio, representing
15% of total loans, is not concentrated in any single industry, but reflects
the broad-based economies in Florida and southern Georgia.
Loans to consumers represent 74% of total loans. Barnett's residential
loans generally are secured by 1-4 family homes, conform to federal agency
underwriting standards and have a maximum loan-to-value ratio of 80% unless
they are protected by mortgage insurance.
Installment loans 30 days or more past due were 1.08% compared to .77%
last year and .79% at the end of the second quarter. Bank card outstandings
30 days or more past due rose to 2.88% from 2.59% in 1994 and 2.52% at the
end of the second quarter.
Barnett's installment loan portfolio during the third quarter consisted
primarily of loans secured by new and used automobiles (62%), home equity
loans (19%) and government-guaranteed student loans (12%).
NET CHARGE-OFFS. As shown in TABLE 7, net charge-offs were $34.0
million, up from $15.4 million a year earlier and $27.3 million in the second
quarter. The increased net charge-offs reflect lower levels of corporate loan
recoveries and higher levels of consumer charge-offs. Bank card net
charge-offs rose $7.8 million, or 82%, over last year and $3.9 million, or
29%, over last quarter due to significant growth in outstandings, as well as
higher market default rates. The ratio of net charge-offs to average loans
remained below the company's expected long-term operating range
<TABLE>
<CAPTION>
TABLE 6 NON-PERFORMING ASSETS
1995 1994
--------------------- ---------------------
PERCENTAGE PERCENTAGE
OF TOTAL OF TOTAL
SEPTEMBER 30--DOLLARS IN THOUSANDS AMOUNT OUTSTANDING(1) AMOUNT OUTSTANDING(1)
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Non-accruing loans:
Less than 90 days past due............... $ 58,065 .19% $ 81,723 .30%
90 days past due......................... 147,379 .48 132,221 .48
- ----------------------------------------------------------------------------------------------------
Total non-accruing loans.............. 205,444 .67 213,944 .78
Reduced-rate loans......................... 2,458 .01 4,638 .01
- ----------------------------------------------------------------------------------------------------
Total non-performing loans............ 207,902 .68 218,582 .79
Real estate held for sale.................. 74,292 .24 85,194 .31
- ----------------------------------------------------------------------------------------------------
Total non-performing assets........... $282,194 .92% $303,776 1.10%
====================================================================================================
Non-performing loans by category:
Commercial, financial and
agricultural........................... $ 37,600 .12% $ 63,851 .23%
Real estate construction................. 17,228 .06 11,116 .04
Commercial mortgages..................... 75,373 .25 98,667 .36
Residential mortgages.................... 77,701 .25 44,948 .16
- ----------------------------------------------------------------------------------------------------
Total................................. $207,902 .68% $218,582 .79%
====================================================================================================
90 days past due accruals.................. $ 45,886 .15% $ 32,752 .12%
====================================================================================================
</TABLE>
(1) Before deduction for unearned income.
BARNETT BANKS, INC. 9
<PAGE>
<TABLE>
<CAPTION>
TABLE 7 LOAN QUALITY INFORMATION
1995 1994
------------------------- ------------------------------------
DOLLARS IN THOUSANDS THIRD SECOND FIRST FOURTH THIRD SECOND FIRST
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net charge-offs (recoveries):
Commercial, financial and agricultural.............. $ 2,049 $ (1,863) $ (2,781) $ 2,365 $ 844 $ (5,243) $ (991)
Real estate construction............................ 428 147 190 115 18 1,014 640
Commercial mortgage................................. 515 2,392 499 16,239 (4,368) (1,621) (2,318)
Residential mortgages............................... 543 261 739 423 369 576 435
Installment......................................... 12,318 12,229 12,381 12,994 8,196 9,184 12,159
Bank card........................................... 17,384 13,510 12,683 10,609 9,564 8,695 8,887
Credit lines........................................ 810 629 727 1,123 793 1,013 601
- -----------------------------------------------------------------------------------------------------------------------------
Total net charge-offs........................ $ 34,047 $ 27,305 $ 24,438 $ 43,868 $ 15,416 $ 13,618 $ 19,413
=============================================================================================================================
Gross charge-offs...................................... $ 44,062 $ 42,529 $ 36,125 $ 57,578 $ 30,775 $ 28,222 $ 31,875
Allowance for loan losses.............................. 503,032 502,251 502,800 501,447 521,871 521,843 521,763
Non-performing loan.................................... 207,902 208,142 221,943 200,455 218,582 225,064 268,992
Non-performing assets.................................. 282,194 280,869 297,223 290,862 303,776 335,638 395,792
Non-performing asset ratio............................. .92% .93% 1.01% 1.01% 1.10% 1.25% 1.50%
Net charge-offs to average loans (annualized).......... .45 .37 .34 .63 .23 .21 .30
Allowance to non-performing loans...................... 242 241 227 250 239 232 194
Allowance to period-end loans.......................... 1.65 1.68 1.72 1.76 1.91 1.95 1.99
=============================================================================================================================
</TABLE>
of 50 to 60 basis points. Net charge-offs in the third quarter represented an
annualized .45% of average outstandings, compared to .37% in the second
quarter and .23% for the same period last year.
PROVISION/ALLOWANCE FOR LOAN LOSSES. Barnett's provision expense in the
third quarter was $34.2 million, compared to $15.4 million in last year's
third quarter and $26.8 million in the second quarter.
The reserve for loan losses stood at $503 million on September 30, 4%
lower than a year ago and unchanged from the second quarter. The decline in
the reserve from last year reflects the changing risk profile of the
portfolio. The percentage of loans to consumers and small businesses has
increased. These loans are smaller, limiting the company's exposure to
potential loss from an individual borrower, and have more predictable loss
experience throughout economic cycles. Small business loans, with an average
loan size of $50,000 to $75,000, are often secured by real estate.
The ratio of the allowance for loan losses to non-performing loans
remained strong as of quarter-end at 242%, compared to 239% .ear earlier and
241% last quarter.
Management believes it is prudent to maintain a strong allowance for
loan losses and considers the current level adequate to cover losses inherent
in the loan portfolio based on current economic conditions.
TAXES
Barnett's income tax expense in interim reporting periods is determined
by estimating the combined federal and state effective tax rate for the year
and applying this rate to taxable income. The company's estimated effective
tax rate for 1995 is 35%.
LIQUIDITY
For banks, liquidity represents the ability to meet both loan
commitments and deposit withdrawals. Funds to meet these needs can be
obtained by converting liquid assets to cash or by attracting new deposits or
other sources of funding. Many factors affect a bank's ability to meet
liquidity needs, including variations in the markets served, its
asset-liability mix, its reputation and credit standing in the market, and
general economic conditions.
In addition to its traditional in-market deposit sources, Barnett has
many other sources of liquidity, including securities available for sale,
asset securitization and other non-relationship funding sources such as bank
notes, commercial paper and wholesale purchased funds.
The high proportion of residential and installment loans on Barnett's
balance sheet provides it with an exceptional amount of contingent liquidity
through the conventional securitization programs that exist today. Management
believes that the level of liquidity is sufficient to meet current and future
funding requirements.
On April 1, the company commenced a commercial paper program to provide
the primary funding for its mortgage banking and consumer finance operations.
On September 30, the company had $709 million of commercial paper
outstanding. This facility is supported by $760 million in back-up lines of
credit.
During the quarter, the company issued $200 million of fixed-rate
medium-term notes with maturities of one to three years and $150 million of
6.90% subordinated debt due 2005. As of September 30, the company had
approximately $560
10 BARNETT BANKS, INC.
<PAGE>
<TABLE>
<CAPTION>
TABLE 8 CAPITAL RATIOS
SEPTEMBER 30--DOLLARS IN MILLIONS 1995 1994
- -----------------------------------------------------------------------
<S> <C> <C>
Tier I capital................................ $ 2,563 $ 2,909
Total risk-based capital...................... 3,539 3,660
Total risk-adjusted assets.................... 29,420 26,615
- -----------------------------------------------------------------------
Tier I capital ratio.......................... 8.71% 10.93%
Total risk-based capital ratio................ 12.02 13.75
Tier I leverage ratio......................... 6.35 7.66
=======================================================================
</TABLE>
million in debt and preferred stock available under existing shelf
registrations with the Securities and Exchange Commission.
CAPITAL
On September 30, shareholders' equity totaled $3.3 billion, up 9% from a
year earlier. Shareholders' equity fell $11.0 million from June 30 as the
company continued to repurchase its own common stock. The company repurchased
2.3 million shares during the quarter. The company called for redemption its
Series C $4.00 Cumulative Convertible Preferred Stock. In October,
substantially all of those shares converted into common shares.
The growth of shareholders' equity from last year was provided primarily
through retained earnings. During the last 12 months, this source added $333
million to capital. Shareholders' equity, before deducting the Employee Stock
Ownership Plan obligation, was 8.27% of assets at the end of the third
quarter, compared to 8.09% a year earlier and 8.18% on June 30.
Barnett declared a dividend of $.47 for the third quarter, up 15% from
the $.41 declared last year and representing a common dividend payout ratio
of 36%.
The company is subject to risk-based capital guidelines that measure
capital relative to risk-weighted assets and off-balance-sheet financial
instruments. Capital guidelines issued by the Federal Reserve Board require
bank holding companies to have a minimum total risk-based capital ratio of
8%, with at least half of total capital in the form of Tier I capital.
As TABLE 8 shows, Barnett significantly exceeded these capital
guidelines on September 30, with a Tier I capital ratio of 8.71% and a total
risk-based capital ratio of 12.02%.
In addition, a leverage ratio is used in connection with the risk-based
capital standards and is defined as Tier I capital divided by average assets
for the most recent quarter. The minimum leverage ratio under this standard
is 3% for the highest-rated bank holding companies which are not undertaking
significant expansion programs. An additional 1% to 2% may be required for
other companies, depending upon their regulatory ratings and expansion
plans. On September 30, 1995, Barnett's leverage ratio was 6.35%.
IMPACT OF ACCOUNTING STANDARDS
Effective January 1, 1995, Barnett adopted Statement of Financial
Accounting Standards (SFAS) No. 114, "Accounting by Creditors for Impairment
of a Loan," which prescribes how the allowance for loan losses related to
impaired loans should be determined. The adoption of this standard had no
significant impact on the financial condition or results of operations of the
company. For more information, see Note C of Notes to Financial Statements.
In March 1995, the Financial Accounting Standards Board issued SFAS No.
121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of." The statement must be adopted by the company on or
before January 1, 1996. The company has not yet adopted the standard, but in
management's opinion adoption of this standard will not have a significant
impact on the financial condition or results of operations of the company.
In May 1995, the Financial Accounting Standards Board issued SFAS No.
122, "Accounting for Mortgage Servicing Rights." The statement requires that
an enterprise recognize as separate assets the rights to service mortgage
loans for others, however those servicing rights are acquired. Additionally,
the enterprise must periodically assess its capitalized mortgage servicing
rights for impairment based on the fair value of those rights. The company
must adopt the statement prospectively on or by January 1, 1996. The company
has not yet adopted the standard. The company is currently evaluating the
impact of adoption.
11 BARNETT BANKS, INC.
<PAGE>
QUARTERLY AVERAGE BALANCES, YIELDS AND RATES
CONSOLIDATED--BARNETT BANKS, INC. AND AFFILIATES
<TABLE>
<CAPTION>
1995
-----------------------------------------------------------------------------------
THIRD SECOND FIRST
-------------------------- -------------------------- --------------------------
AVERAGE AVERAGE AVERAGE
AVERAGE YIELD AVERAGE YIELD AVERAGE YIELD
DOLLARS IN MILLIONS--TAXABLE-EQUIVALENT BALANCE INTEREST OR RATE BALANCE INTEREST OR RATE BALANCE INTEREST OR RATE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Loans:
Commercial, financial and agricultural... $ 4,556 $ 97.2 8.47% $ 4,555 $ 95.8 8.43% $ 4,442 $ 91.9 8.39%
Real estate construction................. 946 25.0 10.48 948 25.3 10.69 925 24.2 10.62
Commercial mortgages..................... 2,304 50.7 8.73 2,345 51.0 8.72 2,383 50.5 8.60
Residential mortgages.................... 11,417 219.4 7.69 11,110 210.2 7.57 10,755 198.9 7.40
Installment.............................. 8,667 195.5 8.95 8,435 185.9 8.84 8,301 176.6 8.63
Bank card................................ 1,566 62.0 15.69 1,439 59.1 16.47 1,375 53.0 15.64
Credit lines............................. 735 19.5 10.50 730 19.2 10.55 718 16.9 9.53
- --------------------------------------------------------------------------------------------------------------------------------
Total loans, net of unearned income... 30,191 665.8 8.77 29,562 643.7 8.73 28,899 608.0 8.49
- --------------------------------------------------------------------------------------------------------------------------------
Securities(1):
Taxable.................................. 5,771 81.0 5.59 6,194 86.3 5.58 6,702 92.2 5.57
Tax-free................................. 356 10.5 11.82 514 15.5 12.02 593 21.3 14.34
- --------------------------------------------------------------------------------------------------------------------------------
Total securities...................... 6,127 91.5 5.95 6,708 101.8 6.07 7,295 113.5 6.29
- --------------------------------------------------------------------------------------------------------------------------------
Other earning assets....................... 46 .7 5.84 47 .7 6.14 92 1.3 5.92
Total earning assets.................. 36,364 $758.0 8.29% 36,317 $746.2 8.23% 36,286 $722.8 8.04%
- --------------------------------------------------------------------------------------------------------------------------------
Cash....................................... 1,943 2,012 2,064
Other assets............................... 3,332 3,401 3,007
Allowance for loan losses.................. (503) (498) (499)
- --------------------------------------------------------------------------------------------------------------------------------
Total assets.......................... $41,136 $41,232 $40,858
================================================================================================================================
LIABILITIES AND EQUITY
NOW and money market accounts.............. $12,576 $69.6 2.19% $12,665 $ 73.5 2.33% $13,198 $81.0 2.49%
Savings deposits........................... 3,362 16.9 2.00 3,451 17.2 2.00 3,619 20.3 2.27
Certificates of deposit under $100,000..... 9,990 133.1 5.29 10,071 131.5 5.24 9,698 116.3 4.86
Other time deposits........................ 2,209 31.2 5.61 2,133 29.4 5.52 1,943 24.6 5.02
- --------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing deposits....... 28,137 250.8 3.54 28,320 251.6 3.56 28,498 242.2 3.45
Federal funds purchased and securities sold
under agreements to repurchase........... 1,491 21.2 5.65 1,892 27.9 5.91 1,734 24.4 5.71
Other short-term borrowings................ 1,159 18.2 6.24 838 13.3 6.37 579 8.6 6.02
Long-term debt............................. 1,028 20.9 8.11 842 17.8 8.48 815 17.1 8.40
- --------------------------------------------------------------------------------------------------------------------------------
Total interest-bearing liabilities.... 31,815 $311.1 3.88% 31,892 $310.6 3.91% 31,626 $292.3 3.75%
Demand deposits............................ 5,340 5,382 5,441
Other liabilities.......................... 634 618 568
Preferred equity........................... 214 215 215
Common equity.............................. 3,133 3,125 3,008
- --------------------------------------------------------------------------------------------------------------------------------
Total liabilities and equity.......... $41,136 $41,232 $40,858
================================================================================================================================
SPREAD AND NET YIELD
Interest rate spread....................... 4.41% 4.32% 4.29%
Cost of funds supporting earning assets.... 3.39 3.43 3.27
Net yield on earning assets................ $446.9 4.90 $435.6 4.80 $430.5 4.77
================================================================================================================================
</TABLE>
(1) Average yields on investment securities available for sale have been
calculated based on amortized cost.
12 BARNETT BANKS, INC.
<PAGE>
<TABLE>
<CAPTION>
1994
- ----------------------------------------------------------------------------------------------------------------------------
FOURTH THIRD SECOND FIRST
- ------------------------- --------------------------- ----------------------------- ----------------------------
AVERAGE AVERAGE AVERAGE AVERAGE
AVERAGE YIELD AVERAGE YIELD AVERAGE YIELD AVERAGE YIELD
BALANCE INTEREST OR RATE BALANCE INTEREST OR RATE BALANCE INTEREST OR RATE BALANCE INTEREST OR RATE
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 4,350 $ 87.8 8.01% $ 4,285 $ 84.1 7.79% $ 4,165 $ 80.0 7.71% $ 4,075 $ 72.4 7.20%
896 22.5 9.94 833 19.5 9.31 820 17.7 8.66 856 16.5 7.83
2,428 51.5 8.42 2,456 51.9 8.38 2,517 52.0 8.29 2,568 51.2 8.08
10,229 185.7 7.26 9,769 175.2 7.17 9,577 168.9 7.06 9,453 168.3 7.12
7,996 168.8 8.38 7,770 162.7 8.31 7,537 154.3 8.22 7,220 148.8 8.25
1,286 48.6 15.01 1,165 47.6 16.21 1,118 46.6 16.70 1,101 44.3 16.30
704 15.4 8.69 690 14.7 8.45 679 12.7 7.51 675 12.2 7.31
- ----------------------------------------------------------------------------------------------------------------------------
27,889 578.1 8.25 26,968 553.0 8.16 26,413 530.7 8.05 25,948 513.0 7.95
- ----------------------------------------------------------------------------------------------------------------------------
6,815 86.7 5.07 6,785 82.4 4.84 6,804 79.3 4.67 6,955 79.5 4.60
660 23.3 14.10 691 23.3 13.49 742 22.9 12.32 769 23.6 12.28
- ----------------------------------------------------------------------------------------------------------------------------
7,475 110.0 5.87 7,476 105.7 5.64 7,546 102.2 5.42 7,724 103.1 5.36
- ----------------------------------------------------------------------------------------------------------------------------
67 .8 5.26 50 .6 4.61 66 .7 4.08 123 .9 3.17
- ----------------------------------------------------------------------------------------------------------------------------
35,431 $688.9 7.74% 34,494 $659.3 7.61% 34,025 $633.6 7.46% 33,795 $617.0 7.34%
- ----------------------------------------------------------------------------------------------------------------------------
2,061 1,985 2,094 2,233
2,302 2,159 2,105 2,055
(524) (519) (519) (518)
- ----------------------------------------------------------------------------------------------------------------------------
$39,270 $38,119 $37,705 $37,565
============================================================================================================================
$13,353 $ 80.2 2.38% $13,476 $ 78.0 2.30% $13,718 $ 73.3 2.14% $13,751 $ 66.3 1.96%
3,477 20.1 2.29 3,450 19.4 2.23 3,473 17.6 2.03 3,478 15.7 1.83
7,801 88.8 4.52 7,409 80.4 4.30 7,379 76.7 4.17 7,397 75.0 4.11
1,655 19.0 4.55 1,608 17.5 4.32 1,647 16.9 4.12 1,648 16.6 4.08
- ----------------------------------------------------------------------------------------------------------------------------
26,286 208.1 3.14 25,943 195.3 2.99 26,217 184.5 2.82 26,274 173.6 2.68
2,838 36.7 5.12 2,488 28.1 4.48 1,748 16.7 3.84 1,675 12.2 2.96
194 2.7 5.60 96 1.0 4.31 99 1.1 4.30 109 .9 3.25
690 15.2 8.84 681 15.1 8.87 681 15.1 8.88 682 15.0 8.82
- ----------------------------------------------------------------------------------------------------------------------------
30,008 $262.7 3.47% 29,208 $239.5 3.26% 28,745 $217.4 3.03% 28,740 $201.7 2.84%
5,562 5,391 5,573 5,599
584 470 370 296
215 215 215 215
2,901 2,835 2,802 2,715
- ----------------------------------------------------------------------------------------------------------------------------
$39,270 $38,119 $37,705 $37,565
============================================================================================================================
4.27% 4.35% 4.43% 4.50%
2.94 2.76 2.56 2.42
$462.2 4.80 $419.8 4.85 $416.2 4.90 $415.3 4.92
============================================================================================================================
</TABLE>
BARNETT BANKS, INC. 13
<PAGE>
STATEMENTS OF FINANCIAL CONDITION
CONSOLIDATED--BARNETT BANKS, INC. AND AFFILIATES
<TABLE>
<CAPTION>
SEPTEMBER 30 DECEMBER 31
----------------------- ------------
DOLLARS IN THOUSANDS (UNAUDITED) 1995 1994 1994
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Cash and due from banks....................................................... $ 1,903,021 $ 2,236,389 $ 2,872,855
Federal funds sold and securities purchased under agreements to resell........ 4,707 450,487 35,040
Investment securities held to maturity (fair value $3,409,517;
$5,085,762 and $4,864,666).............................................. 3,395,001 5,115,955 4,944,808
Investment securities available for sale...................................... 2,550,273 2,145,488 2,738,600
Loans......................................................................... 30,497,071 27,467,058 28,594,523
Less: Allowance for loan losses............................................... (503,032) (521,871) (501,447)
Unearned income......................................................... (28,320) (95,512) (73,370)
- --------------------------------------------------------------------------------------------------------------------------
Net loans............................................................... 29,965,719 26,849,675 28,019,706
Premises and equipment........................................................ 1,035,726 1,009,109 1,015,187
Intangible assets............................................................. 765,568 214,905 498,264
Other assets.................................................................. 1,555,063 939,669 1,153,859
- --------------------------------------------------------------------------------------------------------------------------
Total assets............................................................ $41,175,078 $38,961,677 $41,278,319
==========================================================================================================================
LIABILITIES
Demand deposits............................................................... $5,282,560 $ 5,568,372 $ 5,957,700
NOW and money market accounts................................................. 12,473,006 13,565,908 13,933,880
Savings deposits.............................................................. 3,326,864 3,451,063 3,683,880
Certificates of deposit under $100,000........................................ 9,931,682 7,425,321 9,585,472
Other time deposits........................................................... 2,233,427 1,595,673 1,947,699
- --------------------------------------------------------------------------------------------------------------------------
Total deposits.......................................................... 33,247,539 31,606,337 35,108,631
Short-term borrowings:
Federal funds purchased and securities sold under agreements
to repurchase......................................................... 1,490,293 2,983,082 1,250,506
Commercial paper........................................................ 708,772 11,882 6,199
Other short-term borrowings............................................. 518,975 105,057 397,199
Other liabilities............................................................. 730,116 512,999 604,925
Long-term debt................................................................ 1,151,211 680,296 776,676
- --------------------------------------------------------------------------------------------------------------------------
Total liabilities....................................................... 37,846,906 35,899,653 38,144,136
- --------------------------------------------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Preferred stock, $.10 par value, 20,000,000 shares authorized:
Series A, outstanding 1,976,416; 2,000,000 and 2,000,000 shares............ 98,821 100,000 100,000
Series B, outstanding 11,989; 12,701 and 12,289 shares..................... 300 317 307
Series C, outstanding 2,277,554; 2,300,000 and 2,300,000 shares............ 113,878 115,000 115,000
Common stock, $2 par value, 200,000,000 shares authorized;
issued 94,596,475; 96,977,878 and 96,732,754 shares........................ 189,193 193,956 193,466
Contributed capital........................................................... 627,570 747,468 741,654
Net unrealized gain (loss) on investment securities available for sale........ 25,329 (20,889) (26,998)
Retained earnings............................................................. 2,350,361 2,017,843 2,098,977
Less: Employee stock ownership plan obligation,
collateralized by 2,393,433; 2,839,138 and 2,732,372 shares............. (77,280) (91,671) (88,223)
- --------------------------------------------------------------------------------------------------------------------------
Total shareholders' equity.............................................. 3,328,172 3,062,024 3,134,183
- --------------------------------------------------------------------------------------------------------------------------
Total liabilities and shareholders' equity..............................$41,175,078 $38,961,677 $41,278,319
==========================================================================================================================
</TABLE>
THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE
FINANCIAL STATEMENTS.
15 BARNETT BANKS, INC.
<PAGE>
STATEMENTS OF INCOME
CONSOLIDATED--BARNETT BANKS, INC. AND AFFILIATES
<TABLE>
<CAPTION>
THREE MONTHS NINE MONTHS
----------------- -------------------
FOR THE PERIODS ENDED SEPTEMBER 30--DOLLARS IN THOUSANDS (UNAUDITED) 1995 1994 1995 1994
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME
Loans.......................................................... $662,859 $550,282 $1,908,795 $1,589,052
Investment securities.......................................... 87,811 97,271 290,151 285,706
Federal funds sold and securities purchased
under agreements to resell.................................. 675 583 2,740 2,222
- ------------------------------------------------------------------------------------------------------------------------
Total interest income....................................... 751,345 648,136 2,201,686 1,876,980
- ------------------------------------------------------------------------------------------------------------------------
INTEREST EXPENSE
Deposits....................................................... 250,800 195,288 744,592 553,467
Federal funds purchased and securities sold under agreements
to repurchase............................................... 21,230 28,084 73,549 57,053
Other short-term borrowings.................................... 18,227 1,047 40,116 2,978
Long-term debt................................................. 20,832 15,090 55,763 45,218
- ------------------------------------------------------------------------------------------------------------------------
Total interest expense...................................... 311,089 239,509 914,020 658,716
- ------------------------------------------------------------------------------------------------------------------------
Net interest income......................................... 440,256 408,627 1,287,666 1,218,264
Provision for loan losses...................................... 34,198 15,443 85,324 48,491
- ------------------------------------------------------------------------------------------------------------------------
Net interest income after provision for loan losses......... 406,058 393,184 1,202,342 1,169,773
- ------------------------------------------------------------------------------------------------------------------------
NON-INTEREST INCOME
Service charges on deposit accounts............................ 55,699 59,084 167,214 168,611
Mortgage banking income........................................ 15,964 6,460 49,938 23,448
Trust income................................................... 19,189 19,152 58,253 58,522
Consumer finance income........................................ 23,293 -- 59,461 --
Credit card discounts and fees................................. 14,988 13,079 43,971 39,391
Brokerage income............................................... 7,868 6,962 21,832 23,487
Other service charges and fees................................. 30,277 26,189 86,526 78,951
Securities transactions........................................ 58 354 84 (217)
Other income................................................... 15,366 6,869 41,355 20,568
- ------------------------------------------------------------------------------------------------------------------------
Total non-interest income................................... 182,702 138,149 528,634 412,761
- ------------------------------------------------------------------------------------------------------------------------
NON-INTEREST EXPENSE
Salaries and employee benefits................................. 192,327 160,419 559,224 486,338
Net occupancy expense.......................................... 32,142 30,196 94,410 89,214
Furniture and equipment expense................................ 35,850 34,652 106,769 104,005
Other expense.................................................. 118,932 115,053 364,307 343,126
- ------------------------------------------------------------------------------------------------------------------------
Total non-interest expense.................................. 379,251 340,320 1,124,710 1,022,683
- ------------------------------------------------------------------------------------------------------------------------
Net non-interest expense.................................... 196,549 202,171 596,076 609,922
- ------------------------------------------------------------------------------------------------------------------------
EARNINGS
Income before income taxes..................................... 209,509 191,013 606,266 559,851
Provision for income taxes..................................... 75,421 67,569 211,302 197,237
- ------------------------------------------------------------------------------------------------------------------------
Net income.................................................. $134,088 $123,444 $394,964 $362,614
========================================================================================================================
EARNINGS PER SHARE
Primary: Earnings per share............................ $1.34 $1.21 $3.91 $3.55
Average number of shares...................... 96,752,165 98,093,769 97,435,884 98,302,558
Dividends on preferred stock.................. $4,525 $4,550 $13,625 $13,650
Fully diluted: Earnings per share............................ $1.29 $1.18 $3.78 $3.45
Average number of shares...................... 103,468,628 104,778,709 104,611,238 104,987,498
========================================================================================================================
</TABLE>
THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE
FINANCIAL STATEMENTS.
BARNETT BANKS, INC. 15
<PAGE>
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
CONSOLIDATED--BARNETT BANKS, INC. AND AFFILIATES
<TABLE>
<CAPTION>
CONTRI- NET
PREFERRED COMMON BUTED UNREALIZED RETAINED ESOP
DOLLARS IN THOUSANDS (UNAUDITED) STOCK STOCK CAPITAL GAIN (LOSS) EARNINGS OBLIGATION TOTAL
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
FOR THE PERIOD
Balance at January 1, 1994................... $215,351 $194,809 $775,719 $ 3,772 $1,786,561 $(102,121) $2,874,091
Net income................................... 362,614 362,614
Change in unrealized gain (loss) on
investment securities available for sale... (24,661) (24,661)
Cash dividends declared:
Common ($1.18 per share)................... (117,656) (117,656)
Preferred:
Series A................................ (6,750) (6,750)
Series B................................ (26) (26)
Series C................................ (6,900) (6,900)
Issuances of common stock:
Stock purchase, option and
employee benefit plans.................. 1,943 30,926 10,450 43,319
Preferred stock conversions................ (34) 7 27 --
Repurchases of common stock.................. (2,803) (59,204) (62,007)
- ---------------------------------------------------------------------------------------------------------------------------------
Balance at September 30, 1994................ $215,317 $193,956 $747,468 $(20,889) $2,017,843 $(91,671) $3,062,024
=================================================================================================================================
FOR THE PERIOD
Balance at January 1, 1995................... $215,307 $193,466 $741,654 $(26,998) $2,098,977 $(88,223) $3,134,183
Net income................................... 394,964 394,964
Change in unrealized gain (loss) on
investment securities available for sale.. 52,327 52,327
Cash dividends declared:
Common ($1.35 per share).................. (129,933) (129,933)
Preferred:
Series A................................ (6,728) (6,728)
Series B................................ (22) (22)
Series C................................ (6,897) (6,897)
Issuances of common stock:
Stock purchase, option and
employee benefit plans.................. 2,329 54,772 10,943 68,044
Preferred stock conversions............... (2,308) 147 2,161 --
Repurchases of common stock.................. (6,749) (171,017) (177,766)
- ---------------------------------------------------------------------------------------------------------------------------------
Balance at September 30, 1995................ $212,999 $189,193 $627,570 $ 25,329 $2,350,361 $(77,280) $3,328,172
=================================================================================================================================
</TABLE>
THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE
FINANCIAL STATEMENTS.
16 BARNETT BANKS, INC.
<PAGE>
STATEMENTS OF CASH FLOWS
CONSOLIDATED--BARNETT BANKS, INC. AND AFFILIATES
<TABLE>
<CAPTION>
FOR THE PERIODS ENDED SEPTEMBER 30--DOLLARS IN THOUSANDS (UNAUDITED) 1995 1994
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income.................................................................................... $ 394,964 $ 362,614
Reconcilement of net income to net cash provided by operating activities:
Provision for loan losses................................................................... 85,324 48,491
Depreciation and amortization............................................................... 170,821 100,005
Employee benefits funded by equity.......................................................... 19,379 21,155
Deferred income tax provision............................................................... 22,078 8,530
Decrease (increase) in interest receivable.................................................. 5,366 (17,498)
Increase in interest payable................................................................ 17,421 18,070
(Increase) decrease in other assets......................................................... (120,479) 20,553
(Decrease) increase in other liabilities.................................................... (58,151) 16,470
Originations of loans held for sale......................................................... (3,411,164) (403,000)
Proceeds from sales of loans held for sale.................................................. 1,843,965 525,845
Other....................................................................................... (31,314) (24,469)
- -----------------------------------------------------------------------------------------------------------------------------
Net cash provided by operating activities................................................ (1,061,790) 676,766
- -----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investment securities available for sale......................................... (650,883) (1,221,870)
Proceeds from sales of investment securities available for sale............................... 179,993 --
Proceeds from maturities of investment securities available for sale.......................... 758,308 1,089,060
Purchases of investment securities held to maturity........................................... (290,187) (2,930,535)
Proceeds from maturities of investment securities held to maturity............................ 1,842,952 3,607,867
Net increase in loans......................................................................... (192,549) (1,599,881)
Purchases of premises and equipment........................................................... (110,112) (74,591)
Proceeds from sales of premises and equipment................................................. 31,001 34,557
Payments for purchases of acquired companies, net of cash acquired............................ (465,563) --
- -----------------------------------------------------------------------------------------------------------------------------
Net cash used by investing activities.................................................... 1,102,960 (1,095,393)
- -----------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net decrease in demand, NOW, savings and money market accounts................................ (2,493,030) (878,658)
Net increase (decrease) in other time deposits................................................ 631,938 (148,771)
Net increase in federal funds purchased and securities sold
under agreements to repurchase.............................................................. 239,787 1,261,249
Proceeds from issuance of short-term notes.................................................... 425,000 --
Net increase in other short-term borrowings................................................... 154,841 6,761
Principal repayments of long-term debt........................................................ (127,192) (1,828)
Proceeds from issuance of long term debt...................................................... 400,000 --
Issuances of common stock..................................................................... 48,665 22,164
Repurchases of common stock................................................................... (177,766) (62,007)
Cash dividends................................................................................ (143,580) (131,332)
- -----------------------------------------------------------------------------------------------------------------------------
Net cash provided by financing activities................................................ (1,041,337) 62,578
- -----------------------------------------------------------------------------------------------------------------------------
Net decrease in cash and cash equivalents..................................................... (1,000,167) (351,049)
Cash and cash equivalents, January 1.......................................................... 2,907,895 3,037,925
- -----------------------------------------------------------------------------------------------------------------------------
Cash and cash equivalents, September 30....................................................... $ 1,907,728 $ 2,686,876
=============================================================================================================================
</TABLE>
FOR THE PERIODS ENDED SEPTEMBER 30, 1995 AND 1994, INCOME TAXES OF $203
MILLION AND $168 MILLION WERE PAID AND INTEREST OF $898 MILLION AND $636
MILLION WAS PAID, RESPECTIVELY. CASH AND CASH EQUIVALENTS INCLUDES CASH AND
DUE FROM BANKS, INTEREST-BEARING DEPOSITS IN OTHER BANKS, SECURITIES
PURCHASED UNDER AGREEMENTS TO RESELL AND FEDERAL FUNDS SOLD.
FOR THE PERIODS ENDED SEPTEMBER 30, 1995 AND 1994, $57 MILLION AND $51
MILLION OF LOANS, RESPECTIVELY, WERE TRANSFERRED TO REAL ESTATE HELD FOR SALE.
DURING THE PERIOD ENDED SEPTEMBER 30, 1995, THE COMPANY ACQUIRED $990 MILLION
OF NON-CASH ASSETS AND $525 MILLION OF LIABILITIES.
THE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THESE
FINANCIAL STATEMENTS.
BARNETT BANKS, INC. 17
<PAGE>
NOTES TO FINANCIAL STATEMENTS
A. GENERAL
The accounting and reporting policies of Barnett Banks, Inc. and its
affiliates conform to generally accepted accounting principles and to
predominant practices within the banking industry. The company has not
changed its accounting and reporting policies from those disclosed in its
1994 Annual Report on Form 10-K, except for the adoption on January 1, 1995
of Statement of Financial Accounting Standards No. 114, "Accounting by
Creditors for Impairment of a Loan," as described in the form 10-Q for the
period ended March 31, 1995.
In the opinion of the company's management, all adjustments necessary to
fairly present the financial position as of September 30, 1995 and 1994, and
the results of operations and cash flows for the periods then ended, all of
which are of a normal and recurring nature, have been included.
The results of operations for the three- and nine-month periods ended
September 30, 1995 may not be indicative of operating results for the year
ending December 31, 1995. Certain prior year and prior quarter amounts have
been reclassified to conform to current classifications.
In January 1995, the company acquired EquiCredit Corporation, a
Jacksonville-based consumer finance company, for $332 million. EquiCredit
specializes in originating, selling and servicing fixed-rate consumer loans
secured by first or second mortgages. In February 1995, the company acquired
BancPLUS Financial Corporation, a Texas-based full-service mortgage banking
company, for $162 million. These acquisitions have been accounted for as
purchase transactions, in accordance with APB No. 16. Amounts assigned to
intangible assets may vary as final valuation and other information becomes
available.
B. LOANS
<TABLE>
<CAPTION>
SEPTEMBER 30--DOLLARS IN THOUSANDS
NET OF UNEARNED INCOME 1995 1994
- ------------------------------------------------------------------------------
<S> <C> <C>
Commercial, financial and agricultural............. $ 4,605,319 $ 4,307,213
Real estate construction........................... 908,211 854,782
Commercial mortgages............................... 2,262,588 2,465,755
Residential mortgages.............................. 11,497,295 9,909,795
Installment........................................ 8,828,175 7,919,123
Bank card.......................................... 1,623,934 1,214,213
Credit lines....................................... 743,229 700,665
- ------------------------------------------------------------------------------
Total......................................... $30,468,751 $27,371,546
==============================================================================
</TABLE>
C. ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED SEPTEMBER 30--
DOLLARS IN THOUSANDS 1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C>
Beginning balance................................... $501,447 $521,827
Recoveries.......................................... 36,926 42,425
Provision expense................................... 85,324 48,491
Loans charged off................................... (122,716) (90,872)
Other............................................... 2,051 --
- ----------------------------------------------------------------------------
Ending balance...................................... $503,032 $521,871
============================================================================
</TABLE>
The company defines impaired loans as all non-performing loans except
residential mortgages and small business loans. At September 30, 1995
impaired loans totaled $116 million. Of that amount, approximately $74
million in impaired loans have related reserves of $14 million. An additional
$42 million in impaired loans were determined to be carried at or below fair
value and, accordingly, have no reserves. The allowance for loan losses is
established to cover potential losses inherent in the portfolio as a whole.
The company recognizes income on impaired loans primarily on the cash
basis. Any change in the present value of expected cash flows is recognized
through the allowance for loan losses. For the three-month period ended
September 30, 1995, the average carrying amount of impaired loans was $115
million, on which the company recognized income of $1.0 million.
D. LONG-TERM DEBT
<TABLE>
<CAPTION>
SEPTEMBER 30--DOLLARS IN THOUSANDS 1995 1994
- ----------------------------------------------------------------------------
<S> <C> <C>
7.75% Sinking Fund Debentures, due 1997,
with annual sinking fund payments of
$700,000 through 1996............................. $ 10,200 $ 10,900
Less: Face value of debentures repurchased
and held for future retirements................... (772) (1,472)
- ----------------------------------------------------------------------------
Total outstanding.............................. 9,428 9,428
8.50% Subordinated Capital Notes, due 1999.......... 200,000 200,000
Medium-term notes, due in varying
maturities through 2003, with
interest from a floating 4.275%
to a fixed 10.00%................................. 476,150 201,900
9.875% Subordinated Capital Notes,
due 2001.......................................... 100,000 100,000
6.90% Subordinated Capital Notes,
due 2005.......................................... 150,000 --
10.875% Subordinated Capital Notes,
due 2003.......................................... 55,000 55,000
8.50% Subordinated Capital Notes,
due 2007.......................................... 100,000 100,000
Mortgage Collateralized Bonds, due
1996 with interest from
a floating 6.348%................................. 47,700 --
Capitalized lease obligations....................... 12,933 13,968
- ----------------------------------------------------------------------------
Total.......................................... $1,151,211 $680,296
============================================================================
</TABLE>
18 BARNETT BANKS, INC.
<PAGE>
E. EARNINGS PER SHARE
The weighted-average number of shares used in the computation of
earnings per share is as follows:
<TABLE>
<CAPTION>
FOR THE PERIODS ENDED SEPTEMBER 30-- THREE MONTHS NINE MONTHS
----------------- ------------------
DOLLARS IN THOUSANDS 1995 1994 1995 1994
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PRIMARY SHARES:
Average common shares outstanding............ 95,439,355 97,105,956 96,495,060 97,391,735
Common shares assumed outstanding
to reflect dilutive effect of:
Convertible preferred stock................ 31,478 33,981 31,782 35,187
Common stock options....................... 1,281,332 953,832 909,042 875,636
- -------------------------------------------------------------------------------------------------
Total...................................... 96,752,165 98,093,769 97,435,884 98,302,558
=================================================================================================
Adjustments for preferred dividends.......... $4,525 $4,550 $13,625 $13,650
=================================================================================================
</TABLE>
<TABLE>
<CAPTION>
FOR THE PERIODS ENDED SEPTEMBER 30-- THREE MONTHS NINE MONTHS
----------------- ------------------
DOLLARS IN THOUSANDS 1995 1994 1995 1994
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FULLY DILUTED SHARES:
Average common shares outstanding............ 95,439,355 97,105,956 96,495,060 97,391,735
Common shares assumed outstanding
to reflect dilutive effect of:
Convertible preferred stock............... 6,684,934 6,718,921 6,706,112 6,720,127
Common stock options...................... 1,344,339 953,832 1,410,066 875,636
- --------------------------------------------------------------------------------------------------
Total..................................... 103,468,628 104,778,709 103,611,238 104,987,498
==================================================================================================
</TABLE>
F. SUBSEQUENT EVENT - CONVERSION OF PREFERRED STOCK
During the quarter, the company called for redemption of its Series C
$4.00 Cumulative Convertible Preferred Stock. In October 1995, substantially
all of those shares converted into common shares.
G. COMMITMENTS AND CONTINGENCIES
Barnett has $4.6 billion of deposits resulting from thrift acquisitions
that are insured through the Savings Association Insurance Fund (SAIF). These
deposits maintained their $.23 per $100 assessment, though legislation has
been proposed which would reduce the SAIF assessment from $.23 to $.04 for
well capitalized institutions. The current legislation, if enacted, would
result in a one-time assessment of approximately 79 basis points to be
charged on 80% of SAIF deposits. Any assessment will depend on enactment of
final legislation which could occur as early as the fourth quarter.
BARNETT BANKS, INC. 19
<PAGE>
Barnett Banks, Inc.
Post Office Box 40789
Jacksonville Florida 32203-0789
Telephone: 904/791-7720
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 9
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 1,903
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 5
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 2,550
<INVESTMENTS-CARRYING> 3,395
<INVESTMENTS-MARKET> 3,410
<LOANS> 30,469
<ALLOWANCE> 503
<TOTAL-ASSETS> 41,175
<DEPOSITS> 33,248
<SHORT-TERM> 2,718
<LIABILITIES-OTHER> 730
<LONG-TERM> 1,151
<COMMON> 189
0
213
<OTHER-SE> 2,926
<TOTAL-LIABILITIES-AND-EQUITY> 41,175
<INTEREST-LOAN> 1,909
<INTEREST-INVEST> 290
<INTEREST-OTHER> 3
<INTEREST-TOTAL> 2,202
<INTEREST-DEPOSIT> 745
<INTEREST-EXPENSE> 914
<INTEREST-INCOME-NET> 1,288
<LOAN-LOSSES> 85
<SECURITIES-GAINS> 0
<EXPENSE-OTHER> 1,125
<INCOME-PRETAX> 606
<INCOME-PRE-EXTRAORDINARY> 606
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 395
<EPS-PRIMARY> 3.91
<EPS-DILUTED> 3.78
<YIELD-ACTUAL> 0
<LOANS-NON> 0
<LOANS-PAST> 0
<LOANS-TROUBLED> 0
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 0
<CHARGE-OFFS> 0
<RECOVERIES> 0
<ALLOWANCE-CLOSE> 0
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
