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FORM 10-K/A
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number: 1-7901
BARNETT BANKS,INC.
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(Exact name of Registrant as specified in its charter)
FLORIDA 59-0560515
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(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
50 N. LAURA STREET, JACKSONVILLE, FL 32202-3638
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (904) 791-7720
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Securities registered pursuant to Section 12(b) of the Act:
NAME OF EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
Common Stock The New York Stock Exchange
Par Value $2.00 per share
Series A $4.50 Cumulative The New York Stock Exchange
Convertible Preferred Stock
Series C $4.00 Cumulative The New York Stock Exchange
Convertible Preferred Stock
8 1/2% Subordinated Capital The New York Stock Exchange
Notes, due 1999
Securities registered pursuant to Section 12(g) of the Act: None
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 requirements for the past 90 days. Yes X No
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The aggregate market value of the voting stock held by non-affiliates of the
Registrant at December 31, 1995 is approximately $5,597,056,712.
Common Stock outstanding at December 31, 1995:
94,865,368 Shares
DOCUMENTS INCORPORATED BY REFERENCE
NONE
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INDEX TO FORM 10-K/A
CONSOLIDATED--BARNETT BANKS, INC. AND AFFILIATES
PART I
Item 1 Business
Item 2 Properties
Item 3 Legal Proceedings
Item 4 Submission of Matters to a Vote of Security Holders - None
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BUSINESS
GENERAL
Barnett Banks, Inc. is a bank holding company that was organized in
1930. Between 1930 and 1965, Barnett controlled several small banks on the
East Coast of Florida and was affiliated with Barnett Bank of Jacksonville,
N.A. through common ownership. In 1966, the company acquired the Jacksonville
bank, chartered in 1877, and began a program of expansion through the
acquisition and organization of banks in Florida's major population centers.
In 1986, Barnett completed its first acquisition in Georgia.
Now one of the top 25 financial institutions in the United States,
Barnett had assets of $41.6 billion and deposits of $34.2 billion on December
31, 1995. On that date, Barnett owned 32 commercial banks with a total of 613
offices in 45 Florida counties and 8 Georgia counties.
Barnett is a decentralized financial services organization, with its
affiliates acting autonomously in most day-to-day decisions. The principal
role of the holding company is to provide management leadership and support
services to its affiliates that are focused on the sale and delivery of
company products. Most accounting, financial management, human resource
management, audit and loan review functions are provided to affiliates
through regional or central support groups. Dividends and management fees
from affiliates are the holding company's major sources of income. Dividend
payments from the banking affiliates may be limited by statutes. (See
Supervision and Regulation of this Form 10-K as well as NOTE R of NOTES TO
FINANCIAL STATEMENTS in the 1995 Annual Report.) Barnett and its affiliates
had 20,175 full-time employees at December 31, 1995.
CHANGES IN ORGANIZATIONAL STRUCTURE
On February 5, 1996, the company announced that it plans to simplify
its legal structure to enhance internal operations, reduce reporting
redundancies and focus more resources on serving customer needs.
Under the new structure, all but four of the company's 32 banks and
several of its non-bank affiliates will be consolidated into a national bank
to be called Barnett Bank, N.A. Barnett's affiliate banks in Southeast
Georgia, Southwest Georgia, Marion County and the Community Bank of the
Islands on Sanibel Island will retain their individual bank charters.
Barnett expects that its simplified organizational structure will
receive regulatory approval later this year.
BANKING OPERATIONS
The average deposits of a Barnett affiliate bank at the end of 1995
were approximately $1.1 billion. Barnett Bank of South Florida, N.A., had
total deposits of $4.1 billion, or approximately 12% of the combined total
deposits of the company's banking affiliates. Barnett Bank of Broward County,
N.A. had total deposits of $3.8 billion, or 11% of the combined total
deposits of the company's banking affiliates. Barnett Bank of Central Florida
had total deposits of $3.2 billion, or approximately 9% of the combined total
deposits of the company's banking affiliates. Fifteen of the company's other
banking affiliates had total deposits in excess of $500 million, including 6
with total deposits in excess of $1.0 billion. Barnett's banking affiliates
generally provide a full range of commercial banking and related financial
services to the retail, wholesale, manufacturing, real estate and financial
sectors in its markets. State banking laws have been a major factor in the
development of the company's corporate structure in Florida. Prior to 1977,
Florida was a unit banking state, prohibiting the state's banks from
operating branches. At the end of 1976, Barnett operated 60 separate banks in
24 counties. Since then, the Florida Banking Code has been liberalized to
permit cross-county mergers and, in 1988, to permit cross-county branching.
Since 1977, Barnett has consolidated more than 100 Florida banking
organizations into 32 banks, 15 of which serve multi-county markets.
NONBANKING ACTIVITIES
EQUICREDIT CORPORATION is a consumer finance company that specializes
in originating, securitizing and servicing fixed-rate consumer loans secured
by first or second mortgages. It operates in 37 states and originated more
than $1 billion of home equity loans in 1995.
BARNETT BANKS TRUST COMPANY, N.A. provides a full range of trust and
investment management services, including personal trust and estate
administration, institutional asset management, and employee benefit plan
management and administration. It operates 28 sales offices and has total
trust assets of $14 billion, including $10 billion under management.
BARNETT MORTGAGE COMPANY, including its wholly-owned subsidiaries
BancPLUS Financial Corporation and Loan America Financial Corporation, is
among the 25 largest mortgage servicers nationally, servicing a portfolio of
more than $33 billion and 445,000 mortgage loans.
BARNETT SECURITIES, INC. is a full-service brokerage company with 36
offices and 192 financial consultants. Its Capital Markets division is
authorized to engage in financial advisory services and limited underwriting
of certain securities, subject to volume restrictions.
BARNETT CARD SERVICES CORPORATION offers a variety of credit card
services to Barnett's affiliate banks and other credit card issuers.
BARNETT MERCHANT SERVICES CORPORATION, through its joint venture with
First Data Corporation, provides a wide array of credit card processing
services for businesses that accept credit cards as a form of payment.
BARNETT BANKS INSURANCE, INC. reinsures credit life and accident and
health insurance written in connection with loans made by Barnett's
affiliates.
BARNETT TECHNOLOGIES, INC. provides data, item processing and other
operational services for Barnett's affiliates.
COMPETITION
Pursuant to the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994, substantially all state law barriers to the
acquisition of banks by out-of-state bank holding companies were eliminated
as of September 29, 1995. The law will also permit interstate branching by
banks effective June 1, 1997 subject to the ability of states to not adopt
interstate branching completely or to set an earlier effective date. The
company anticipates that the effect of the new law will be to increase
competition within the markets in which it now operates, although the company
cannot predict the extent nor the timing.
In addition to competition from other banks, Barnett continues to
face increased competition from other financial services organizations.
Savings and loan associations continue to compete for loans and deposits,
while finance companies and credit unions compete in the important areas of
consumer lending and deposit gathering. Non-traditional financial service
providers such as brokerages, mutual funds, insurance companies and finance
subsidiaries of industrial companies have intensified competition in recent
years. Additionally, Barnett's national mortgage banking and consumer finance
subsidiaries face significant competition from numerous bank and non-bank
companies.
SUPERVISION AND REGULATION
The banking industry is highly regulated, with numerous federal and
state laws and regulations governing its activities. As a bank holding
company, Barnett is subject to regulation under the Bank Holding Company Act
of 1956, as amended, and its examination and reporting requirements. This
legislation requires the Board of Governors of the Federal Reserve System to
approve bank acquisitions, limits the acquisition of out-of-state banking
organizations unless permitted by state law and limits non-banking
activities. In addition, the Georgia Department of Banking and Finance
regulates the Georgia operations of bank holding companies. Various federal
and state laws and regulations also govern the operations of the company's
banking affiliates.
Barnett's affiliate banks are subject to regulation and supervision by
the Office of the Comptroller of the Currency (OCC) (in the case of
nationally chartered banks), the state banking authorities of the states in
which they are organized (in the case of state chartered banks), the Federal
Reserve Board (in the case of state chartered banks) and the FDIC.
Barnett and its affiliates are also affected by various state and
federal laws, including those relating to consumer protection and similar
matters, as well as by the fiscal and monetary policies of the federal
government and its agencies, including the Federal Reserve Board. An
important purpose of these policies is to curb inflation and control
recessions through control of the supply of money and credit. The Federal
Reserve Board uses its powers to establish reserve requirements of insured
depository institutions and to conduct open market operations in the United
States government securities so as to influence the supply of money and
credit. These policies have a direct effect on the amount of bank loans and
deposits and on interest rates charged on loans and paid on deposits, with
the result that federal policies have a material effect on the earnings of
Barnett and its affiliates. Future policies of the Federal Reserve Board and
other government authorities and future changes in state and federal laws and
regulations cannot be predicted nor can their effect on the future earnings
of Barnett and its affiliates be predicted.
On August 10, 1993, the Federal Deposit Insurance Act was amended to
provide that in the event of the liquidation or other resolution of an
insured depository institution occurring on or after such date, the claims of
depositors of such institution (including claims by the FDIC as subrogee of
insured depositors) are entitled to priority in payment over the claims of
any other senior or general creditors of the institution, including
shareholders.
Effective December 31, 1992, the federal bank regulatory authorities
each adopted risk-based capital guidelines to which Barnett and its banking
affiliates are subject. These guidelines establish a systematic analytical
framework that makes regulatory capital requirements more sensitive to
differences in risk profile among banking organizations, takes off-balance
sheet exposures into explicit account in assessing capital adequacy and
minimizes disincentives to holding liquid, low-risk assets. Failure to meet
applicable capital guidelines could subject a bank to a variety of
enforcement remedies available to the federal regulatory authorities,
including limitation on the ability to pay dividends, the issuance of a
directive to increase capital, the termination of deposit insurance by the
FDIC, and appointment of a conservator or receiver. On December 31, 1995,
Barnett and each of its affiliate banks' capital levels exceeded the capital
guidelines established by the federal banking authorities.
The Federal Deposit Insurance Corporation Improvement Act of 1991
(FDICIA) provides for expanded regulation of depository institutions and
their affiliates and assigns to the federal banking agencies broad powers to
take prompt corrective action to resolve problems of insured depository
institutions. The extent of these powers depends upon whether the
institutions in question are "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized," or "critically
undercapitalized." A depository institution is considered "well capitalized"
if it has (i) a total risk-based capital ratio of 10% or greater, (ii) a Tier
1 risk-based capital ratio of 6% or greater, (iii) a leverage ratio of 5% or
greater and (iv) is not subject to any order or written directive to meet and
maintain a specific capital level. On December 31,1995, Barnett and each of
its affiliate banks were considered by federal regulatory authorities to be
"well capitalized."
Barnett's nonbanking activities are supervised by the Federal Reserve
Board. In addition, Barnett Banks Insurance, Inc. and Barnett Annuities
Corporation are subject to insurance laws and regulations of the Insurance
Commissioner of the State of Florida. The activities of Barnett Securities,
Inc. are governed by the Securities and Exchange Commission, the National
Association of Securities Dealers and state securities laws.
The FDICIA recapitalized the deposit insurance funds and gave
regulators the authority to restrict the operations, management and capital
distributions of a bank, depending upon its risk. On December 31, 1995, all
of Barnett's affiliate banks fell into the lowest risk category. FDICIA also
directs regulators to establish underwriting and operations standards,
encompassing such areas as real estate lending, consumer disclosure rules,
internal controls and new reporting requirements.
As discussed under the Competition section, the Riegle-Neal Interstate
Banking and Branching Efficiency Act of 1994 eliminated substantially all
state law barriers to the acquisition of banks by out-of-state bank holding
companies.
PROPERTIES
On December 31, 1995, the company and its affiliates had consolidated
premises and equipment with a net book value of $1.1 billion. The company and
its affiliates generally own their offices and related facilities. Most of
the company's non-banking affiliates and many of the company's consolidated
operations functions are housed in a multi-use office park in Jacksonville.
LEGAL PROCEEDINGS
The company and its subsidiaries are subject to various pending legal
proceedings arising in the normal course of business. After consultation with
legal counsel, management does not anticipate that the ultimate liability, if
any, arising out of these matters will have a material effect on the
company's financial condition.
EXECUTIVE OFFICERS
CHARLES E. RICE, 60, Chairman of the Board and Chief Executive Officer
since November 1988 and Chairman of the Board, President and Chief Executive
Officer from April 1984 to November 1988. Mr. Rice, who has been Chief
Executive Officer since 1979, joined the company in 1966 and was first
elected an executive officer in 1971.
ALLEN L. LASTINGER, JR., 53, President and Chief Operating Officer
since January 1991; Vice Chairman and Chief Banking Officer from November
1988 to December 1990; and Vice Chairman/Retail Banking from April 1984 to
November 1988. Mr. Lastinger joined the company in 1971 and was first elected
an executive officer in 1980.
RICHARD A. ANDERSON, 51, Regional Banking Executive/ Central Region
since April 1994; President and Chief Executive Officer of Barnett Bank of
Broward County, N.A. from January 1990 to April 1994; and President and Chief
Executive Officer of Barnett Bank of Naples from June 1987 to January 1990.
Mr. Anderson joined the company in 1979 and was first elected an executive
officer in 1994.
JUDY BEAUBOUEF, 49, Chief Legal Executive since 1991; Associate
General Counsel from 1988 to 1991. Ms. Beaubouef joined the company in 1988
and was first elected an executive officer in 1991.
SUSAN S. BLASER, 46, Chief Marketing Executive since December 1994;
Senior Vice President for Retail Banking for First Bank System from February
1991 to October 1994; Senior Vice President of CVN Companies from 1988 to
1990. Ms. Blaser joined the company as an executive officer in 1994.
RICHARD C. BREWER, 54, Chief Credit Policy Executive since July 1994;
Regional Banking Executive/Central Region from January 1989 to July 1994; and
Chairman and Chief Executive Officer of Barnett Bank of Southwest Florida
from January 1986 to January 1989. Mr. Brewer joined the company in 1970 and
was first elected an executive officer in 1989.
LEE H. CHAPLIN, JR., 56, Regional Banking Executive/North Region since
February 1991; Regional Banking Executive/South Region from January 1990 to
February 1991; Regional Banking Executive/South Region and President and
Chief Executive Officer of Barnett Bank of South Florida, N.A. from January
1989 to January 1990; and President of Barnett Bank of South Florida, N.A.
from May 1985 to January 1989. Mr. Chaplin joined the company in 1983 and was
first elected an executive officer in 1990.
DOUGLAS K. FREEMAN, 45, Chief Corporate Banking Executive since August
1991; Executive Vice President for Business Banking of Wells Fargo Bank from
January 1989 to August 1991. Mr. Freeman joined the company as an executive
officer in 1991.
RICHARD J. JONES, 45, Chief Asset Management Executive for Barnett
Banks, Inc. since July 1995; President and Chief Executive Officer of Fleet
Investment Services and Corporate Vice President of Fleet Financial Group
from 1991 to 1995.
PAUL T. KERINS, 52, Chief Human Resources Executive since February
1985, when he joined the company as an executive officer.
PATRICK J. MCCANN, 39, Controller since September 1992; Director of
Finance/Central Region from January 1989 to September 1992; Chief Financial
Officer of Barnett Bank of Southwest Florida from January 1988 to June 1989;
and Controller from September 1987 to January 1988. Mr. McCann joined the
company in 1987 and was first elected an executive officer in 1992.
JAMES F. MONDELLO, 52, Regional Banking Executive/ South Region since
February 1991; Regional Banking Executive/East Region from January 1989 to
February 1991; and Executive Vice President and Chief Operating Officer of
Barnett Bank of Polk County from January 1988 to January 1989. Mr. Mondello
joined the company in 1983 and was first elected an executive officer in 1989.
CHARLES W. NEWMAN, 46, Chief Financial Officer since January 1992 and
Executive Vice President and Controller from January 1988 to January 1992.
Mr. Newman joined the company in 1983 and was first elected an executive
officer in 1985.
HINTON F. NOBLES, JR., 50, Executive Vice President since April 1985.
Mr. Nobles joined the company in 1974 and was first elected an executive
officer in 1983.
JONATHAN J. PALMER, 52, Chief Retail Banking and Technology Executive
since October 1994; Chief Technology Executive from July 1990 to October 1994
and Chairman and Chief Executive Officer of Barnett Technologies, Inc. from
November 1990 to October 1994. Mr. Palmer joined the company as an executive
officer in 1990.
RICHARD J. REDICK, 45, Director of Finance since February 1993, when
he joined the company as an executive officer; Executive Vice President of
BayBank Boston, N.A. from 1983 to February 1993.
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SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this amendment to be signed on behalf by the
undersigned, thereunto duly authorized.
BARNETT BANKS, INC.
By: /s/ Patrick J. McCann
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Patrick J. McCann
Controller
(Principal Accounting Officer)
Date: February 12, 1996
