UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
AMENDMENT TO CURRENT REPORT
Filed Pursuant to Section 13 or 15(D) of
THE SECURITIES EXCHANGE ACT OF 1934
CRESTAR FINANCIAL CORPORATION
(Exact name of registrant as specified in charter)
AMENDMENT NO. 1
to Current Report on Form 8-K
Date of Report (Date of earliest event reported): December 31, 1995
The undersigned registrant hereby amends the
following items, financial statements, exhibits or
other portions of its Current Report on Form 8-K as
set forth in the pages attached hereto:
Item 7(a): Financial Statements of Business Acquired
Item 7(b): Pro Forma Financial Information
<PAGE>
Item 2. Acquisition or Disposition of Assets
On December 31, 1995, Crestar Financial Corporation (Crestar) acquired
Loyola Capital Corporation (Loyola) in a transaction accounted for as a
pooling-of-interests business combination. Crestar issued 5,213,309 common
shares for all of the outstanding common shares of Loyola. The exchange ratio
was 0.64 Crestar common shares for each Loyola common share outstanding on
December 31, 1995. Loyola was the holding company for Loyola F.S.B., a federally
chartered stock savings and loan association with 35 branches, primarily in
central Maryland and Maryland's eastern shore, including 15 branches in the
Baltimore metropolitan area. The assets of Loyola will continue to be used in
providing financial services to customers in Maryland.
Item 7. Financial Statements and Exhibits
(a) Financial Statements of Business Acquired
The financial statements of Loyola were previously filed by Crestar in
a Form 8-K on November 17, 1995, and are hereby incorporated by reference. The
financial statements incorporated by reference include (i) consolidated
statements of financial condition of Loyola Capital Corporation and Subsidiaries
as of December 31, 1994 and 1993, and the related consolidated statements of
income, stockholders' equity and cash flows for each of the years in the three
year period ended December 31, 1994, and the report of KPMG Peat Marwick LLP,
independent auditors, dated February 3, 1995 thereon, and (ii) consolidated
financial statements (unaudited) of Loyola Capital Corporation and Subsidiaries
at September 30, 1995 and the three months and nine months then ended, including
consolidated statements of income for the nine months ended September 30, 1995
and 1994.
(b) Pro Forma Financial Information
Pro forma condensed financial information regarding the merger of
Crestar and Loyola is included in Exhibit 99.1 of this filing.
(c) Exhibits
Exhibit 99.1: Pro forma condensed financial information related to the merger of
Crestar Financial Corporation and Loyola Capital Corporation.
Exhibit 99.2: Consent of KPMG Peat Marwick LLP
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this amendment to be signed on its behalf by the
undersigned hereunto duly authorized.
CRESTAR FINANCIAL CORPORATION
Date: March 14, 1996 By: /s/ LINDA F. RIGSBY
Linda F. Rigsby
Senior Vice President, Deputy
General Counsel and Assistant
Secretary
Exhibit 99.1
PRO FORMA CONDENSED FINANCIAL INFORMATION
On December 31, 1995, Crestar Financial Corporation (Crestar) merged
with Loyola Capital Corporation (Loyola), a savings bank holding company and
parent company of Loyola F.S.B., in a transaction accounted for as a pooling of
interests. Based on an exchange ratio of 0.64 shares of Crestar common stock for
each outstanding share of Loyola common stock, Crestar issued 5,213,309 shares
of common stock.
The following Pro Forma Condensed Statement of Financial Condition
presented assumes that the merger was consummated on September 30, 1995, and the
Pro Forma Condensed Statements of Operations assume that the merger was
consummated at the beginning of each period presented.
The pro forma earnings are not necessarily indicative of the results of
operations had the merger occurred at the beginning of each period presented,
nor are they necessarily indicative of the results of future operations.
<PAGE>
PRO FORMA CONDENSED STATEMENT OF FINANCIAL CONDITION
SEPTEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION>
Crestar &
Adjustments Loyola
increase pro forma
(Dollars in thousands) Crestar Loyola (decrease) combined
<S> <C> <C> <C> <C>
Assets
Cash and due from banks $ 706,673 $ 26,439 $ - $ 733,112
Securities held to maturity 826,212 260,389 1,086,601
Securities available for sale 1,807,656 36,053 1,843,709
Money market investments 618,164 47,306 665,470
Mortgage loans held for sale 446,781 42,561 489,342
Loans, net of unearned income 9,669,507 2,075,374 11,744,881
Less: Allowance for loan losses (223,430) (11,530) (4,512)(1) (239,472)
Loans - net 9,446,077 2,063,844 11,505,409
Premises and equipment, net 332,949 24,949 357,898
Intangible assets - net 156,226 3,772 159,998
Foreclosed properties - net 14,614 5,694 2,326 (1) 22,634
Other assets 406,841 31,844 438,685
Total Assets $14,762,193 $2,542,851 ($2,186) $17,302,858
Liabilities and Shareholders' Equity
Deposits:
Noninterest-bearing demand deposits $ 2,185,849 $ 27,452 $ - $2,213,301
Interest bearing deposits 8,685,617 1,505,188 10,190,805
Total deposits 10,871,466 1,532,640 12,404,106
Short-term borrowings 1,873,127 478,397 2,351,524
Other liabilities 378,690 50,969 27,094 (1) 456,753
Long-term debt 380,237 303,315 683,552
Total Liabilities 13,503,520 2,365,321 27,094 15,895,935
Shareholders' Equity
Preferred stock, authorized 2,000,000
shares, none issued - - - -
Common stock, $5 par value, authorized
100,000,000 shares; outstanding
37,709,106 actual shares and
42,906,252 pro forma combined 188,546 - 25,985 (2) 214,531
shares
Common stock, $.10 par value, authorized
50,000,000 shares; outstanding
8,120,541 shares - 812 (812)(2) -
Capital surplus 346,725 44,327 (25,173)(2) 365,879
Retained earnings 726,036 132,391 (29,280)(1) 829,147
Net unrealized loss on securities
available for sale (2,634) - - (2,634)
Total Shareholders' 1,258,673 177,530 (29,280) 1,406,923
Equity
Total Liabilities and
Shareholders' Equity $14,762,193 $2,542,851 ($2,186) $17,302,858
</TABLE>
See notes to Pro Forma Condensed Financial Information.
<PAGE>
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1995
(UNAUDITED)
<TABLE>
<CAPTION> Crestar &
(Dollars in thousands, except per share data) Loyola
pro forma
Crestar Loyola combined (3)
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $ 633,792 $ 121,671 $ 755,463
Interest and dividends on securities 112,938 14,967 127,905
Other interest income 30,873 4,083 34,956
Total interest income 777,603 140,721 918,324
Interest Expense
Interest on deposits 245,341 53,283 298,624
Interest on short-term borrowings 51,917 20,722 72,639
Interest on long-term debt 24,075 13,685 37,760
Total interest expense 321,333 87,690 409,023
Net interest income
Net interest income 456,270 53,031 509,301
Provision for loan losses 37,600 668 38,268
Net interest income after provision
for loan losses 418,670 52,363 471,033
Noninterest income
Service charges on deposit accounts 66,189 1,112 67,301
Trust and investment advisory income 44,270 - 44,270
Securities losses (3,529) - (3,529)
Other noninterest income 99,050 7,914 106,964
Total noninterest income 205,980 9,026 215,006
Noninterest expense
Personnel expense 228,440 19,818 248,258
Occupancy expense, net 32,162 3,726 35,888
Equipment expense 20,835 1,219 22,054
Other noninterest expense 128,506 15,803 144,309
Total noninterest expense 409,943 40,566 450,509
Net income
Income before income taxes 214,707 20,823 235,530
Income tax expense 73,326 8,704 82,030
Net income $ 141,381 $ 12,119 $ 153,500
Per common share data
Net income per share:
Primary $ 3.71 $ 1.38 $ 3.51
Fully diluted $ 3.70 $ 1.38 $ 3.50
Weighted average shares outstanding:
Primary 38,107,000 8,743,000 43,702,000
Fully diluted 38,194,000 8,767,000 43,805,000
</TABLE>
See Notes to Pro Forma Condensed Financial Information.
<PAGE>
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
Crestar &
(Dollars in thousands, except per share data) Loyola
pro forma
Crestar Loyola combined(3)
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $ 504,830 $ 95,103 $ 599,933
Interest and dividends on securities 142,124 16,697 158,821
Other interest income 37,298 6,411 44,339
Total interest income 684,882 118,211 803,093
Interest Expense
Interest on deposits 203,420 42,605 246,025
Interest on short-term borrowings 33,190 11,272 44,462
Interest on long-term debt 13,399 14,477 27,876
Total interest expense 250,009 68,354 318,363
Net interest income
Net interest income 434,873 49,857 484,730
Provision for loan losses 26,982 510 27,492
Net interest income after provision
for loan losses 407,891 49,347 457,238
Noninterest income
Service charges on deposit accounts 62,535 744 63,279
Trust and investment advisory income 42,688 - 42,688
Securities losses (1,755) - (1,755)
Other noninterest income 88,385 8,943 97,328
Total noninterest income 191,853 9,687 201,540
Noninterest expense
Personnel expense 228,420 19,923 248,343
Occupancy expense, net 31,953 3,602 35,555
Equipment expense 18,367 1,311 19,678
Other noninterest expense 130,973 16,214 147,187
Total noninterest expense 409,713 41,050 450,763
Net income
Income before income taxes 190,031 17,984 208,015
Income tax expense 63,337 7,097 70,434
Net income $ 126,694 $ 10,887 $ 137,581
Per common share data
Net income per share:
Primary $ 3.34 $ 1.25 $ 3.16
Fully diluted $ 3.34 $ 1.25 $ 3.16
Weighted average shares outstanding:
Primary 37,933,000 8,648,000 43,468,000
Fully diluted 37,953,000 8,667,000 43,500,000
</TABLE>
See Notes to Pro Forma Condensed Financial Information.
<PAGE>
PRO FORMA CONDENSED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1994
(UNAUDITED)
<TABLE>
<CAPTION>
Crestar &
(Dollars in thousands, except per share data) Loyola
pro forma
Crestar Loyola combined (3)
<S> <C> <C> <C>
Interest Income
Interest and fees on loans $ 692,710 $ 133,072 $ 825,782
Interest and dividends on securities 183,997 22,277 206,274
Other interest income 49,327 6,062 55,389
Total interest income 926,034 161,411 1,087,445
Interest Expense
Interest on deposits 276,542 57,915 334,457
Interest on short-term borrowings 48,169 16,667 64,836
Interest on long-term debt 19,507 19,485 38,992
Total interest expense 344,218 94,067 438,285
Net interest income
Net interest income 581,816 67,344 649,160
Provision for loan losses 29,682 660 30,342
Net interest income after provision
for loan losses 552,134 66,684 618,818
Noninterest income
Service charges on deposit accounts 82,851 1,063 83,914
Trust and investment advisory income 55,609 - 55,609
Securities losses (10,776) - (10,776)
Other noninterest income 126,586 11,610 138,196
Total noninterest income 254,270 12,673 266,943
Noninterest expense
Personnel expense 303,580 26,364 329,944
Occupancy expense, net 42,231 4,901 47,132
Equipment expense 25,339 1,755 27,094
Other noninterest expense 180,558 21,272 201,830
Total noninterest expense 551,708 54,292 606,000
Net income
Income before income taxes 254,696 25,065 279,761
Income tax expense 85,617 10,026 95,643
Net income $ 169,079 $ 15,039 $ 184,118
Per common share data
Net income per share:
Primary $ 4.47 $ 1.74 $ 4.24
Fully diluted $ 4.47 $ 1.73 $ 4.24
Weighted average shares outstanding:
Primary 37,864,000 8,646,000 43,398,000
Fully diluted 37,867,000 8,660,000 43,409,000
</TABLE>
See Notes to Pro Forma Condensed Financial Information.
<PAGE>
NOTES TO PRO FORMA CONDENSED FINANCIAL INFORMATION
(UNAUDITED)
(1) Certain material, non-recurring expenses totaling $29.3 million, on an
after-tax basis, were recorded in conjunction with the Merger on December 31,
1995. Pre-tax adjustments included $11.3 million for the settlement of
obligations under existing employment contracts, severance pay for involuntary
terminations, early retirement and related employee benefits; $5.8 million
associated with branch closings and related equipment disposals; and $9.5
million of expenses related to effecting the merger. Other non-recurring
adjustments included an increase in the allowance for loan losses of
approximately $4.5 million and a decrease in the reserve for foreclosed
properties of $2.3 million. Such adjustments reflect Crestar's accelerated
disposition strategy with respect to specific loans, and revised valuations of
foreclosed properties based on favorable changes in market conditions. The
income tax benefit associated with the above net non-recurring expenses totaled
approximately $10.1 million. Also at the time of the merger, Crestar recorded a
$10.6 million tax liability associated with the tax bad debt reserves of Loyola
(which becomes payable upon the merger of Loyola F.S.B. into a bank). The impact
of each of the adjustments has been reflected in the Pro Forma Condensed
Statement of Financial Condition as of September 30, 1995.
(2) Based on an exchange ratio of 0.64 for conversion of Loyola common stock
into Crestar common stock (the actual exchange ratio for the December 31, 1995
merger). At September 30, 1995, Crestar and Loyola had 37,709,106 and 8,120,541
common shares outstanding, respectively.
(3) No pro forma adjustments are necessary in the Pro Forma Condensed Statement
of Operations.
EXHIBIT 99.2
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Crestar Financial Corporation
We consent to incorporation by reference in the Form 8-K/A amendment of
current report of Crestar Financial Corporation of our report dated February 3,
1995, relating to the consolidated statements of financial condition of Loyola
Capital Corporation and Subsidiaries as of December 31, 1994 and 1993, and the
related consolidated statements of income, stockholders' equity and cash flows
for each of the years in the three-year period ended December 31, 1994. Our
report refers to a change in accounting for income taxes.
/s/ KPMG Peat Marwick LLP
Richmond, Virginia
March 14, 1996
