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UNITED STATES SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1994
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM COMMISSION FILE NUMBER
TO 0-7871
BB&T FINANCIAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NORTH CAROLINA 56-1056232
(STATE OF INCORPORATION) (I.R.S. EMPLOYER
IDENTIFICATION NO.)
223 WEST NASH STREET 27893
WILSON, NORTH CAROLINA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
(919) 399-4291
(REGISTRANT'S 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 requirements for the past 90 days. YES X NO
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
COMMON STOCK, $2.50 PAR VALUE 32,195,746
(SHARES OUTSTANDING AS OF
MARCH 31, 1994)
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1
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BB&T FINANCIAL CORPORATION
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PART I--FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Shareholders' Equity 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7-8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9-11
Supplemental Financial Information 12-16
PART II--OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 17
Item 6. Exhibits and Reports on Form 8-K 18
SIGNATURES 19
</TABLE>
2
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PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
BB&T FINANCIAL CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31, MARCH 31,
1994 1993 1993
------------ ------------- -----------
($ IN THOUSANDS, EXCEPT PER SHARE)
<S> <C> <C> <C>
ASSETS
Cash and due from banks................ $ 321,677 318,922 344,230
Interest-bearing bank balances......... 29,874 79,663 18,859
Federal funds sold..................... 7,950 9,550 --
Securities available for sale (at fair
value in 1994, fair value in 1993 of
$736,039, and $434,898, respectively). 2,282,916 725,086 422,050
Securities held to maturity (fair value
of $100,528, $1,493,719, and
$1,345,949, respectively)............. 94,567 1,475,727 1,321,407
Loans.................................. 6,204,662 6,306,443 5,178,850
Less allowance for loan losses......... 92,538 88,235 79,757
------------ ----------- -----------
Net loans............................ 6,112,124 6,218,208 5,099,093
Bank premises and equipment............ 134,740 132,794 96,142
Accrued interest receivable............ 59,647 58,504 52,909
Other assets........................... 195,039 154,663 133,239
------------ ----------- -----------
Total assets......................... $ 9,238,534 9,173,117 7,487,929
============ =========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Noninterest-bearing................... $ 759,686 782,777 675,039
Interest-bearing...................... 6,078,498 6,212,344 5,382,188
------------ ----------- -----------
Total deposits....................... 6,838,184 6,995,121 6,057,227
Short-term borrowed funds.............. 1,203,470 984,325 540,673
Long-term debt......................... 343,391 346,736 138,337
Other liabilities...................... 112,487 103,423 104,137
------------ ----------- -----------
Total liabilities.................... 8,497,532 8,429,605 6,840,374
Shareholders' equity:
Common stock $2.50 par value,
50,000,000 shares authorized; shares
issued of 32,195,746, 32,476,387 and
29,671,851, respectively.............. 80,489 81,191 74,180
Paid-in capital........................ 256,700 266,822 221,676
Retained earnings...................... 419,011 401,953 354,637
Less loan to employee stock ownership
plan.................................. 4,419 4,419 2,938
Less unvested restricted stock......... 2,035 2,035 --
Net unrealized (losses) on securities
available for sale.................... (8,744) -- --
------------ ----------- -----------
Total shareholders' equity........... 741,002 743,512 647,555
------------ ----------- -----------
Total liabilities and shareholders'
equity.............................. $ 9,238,534 9,173,117 7,487,929
============ =========== ===========
</TABLE>
3
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CONSOLIDATED STATEMENTS OF INCOME
BB&T FINANCIAL CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-----------------------------------
1994 1993
----------------- -----------------
($ IN THOUSANDS, EXCEPT PER SHARE)
<S> <C> <C>
INTEREST INCOME
Interest on loans.......................... $ 119,363 103,875
Interest and dividends on securities:
Taxable.................................. 27,357 24,819
Tax exempt............................... 1,708 2,134
Interest on short-term investments......... 635 205
----------------- -----------------
Total interest income.................... 149,063 131,033
----------------- -----------------
INTEREST EXPENSE
Interest on deposits....................... 50,214 48,973
Interest on short-term borrowed funds...... 8,373 3,867
Interest on long-term debt................. 4,140 2,234
----------------- -----------------
Total interest expense................... 62,727 55,074
----------------- -----------------
NET INTEREST INCOME........................ 86,336 75,959
Provision for loan losses.................. 3,350 5,303
----------------- -----------------
NET INTEREST INCOME AFTER PROVISION FOR
LOAN LOSSES............................... 82,986 70,656
----------------- -----------------
NONINTEREST INCOME
Service charges on deposit accounts........ 9,667 8,085
Other service charges, commissions and
fees...................................... 4,501 3,869
Mortgage banking income.................... 5,199 4,139
Gains on sales of securities............... 795 1,112
Trust income............................... 2,701 2,313
Insurance commissions...................... 3,324 2,464
Other operating income..................... 4,803 3,674
----------------- -----------------
Total noninterest income................. 30,990 25,656
----------------- -----------------
NONINTEREST EXPENSE
Salaries and wages......................... 30,446 24,347
Other personnel expense.................... 8,339 6,609
Net occupancy expense...................... 5,612 4,775
Furniture and equipment expense............ 6,230 5,522
Deposit insurance premiums................. 3,887 3,386
Other operating expense.................... 20,426 17,949
----------------- -----------------
Total noninterest expense................ 74,940 62,588
----------------- -----------------
INCOME BEFORE INCOME TAXES................. 39,036 33,724
Income taxes............................... 13,308 10,872
----------------- -----------------
NET INCOME................................. $ 25,728 22,852
================= =================
NET INCOME PER SHARE
Primary.................................... $ .79 .76
Fully diluted.............................. .79 .73
================= =================
AVERAGE NUMBER OF SHARES AND EQUIVALENT
SHARES
Primary.................................... 32,604,286 29,874,518
Fully diluted.............................. 32,604,286 31,801,883
================= =================
</TABLE>
4
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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
BB&T FINANCIAL CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
NET UNREALIZED
COMMON LOAN TO UNVESTED GAINS (LOSSES) ON TOTAL
SHARES COMMON PAID-IN RETAINED EMPLOYEE STOCK RESTRICTED SECURITIES SHAREHOLDERS'
OUTSTANDING STOCK CAPITAL EARNINGS OWNERSHIP PLAN STOCK AVAILABLE FOR SALE EQUITY
----------- ------- ------- -------- -------------- ---------- ------------------ -------------
($ IN THOUSANDS, EXCEPT PER SHARE)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1,
1993.................. 26,311,915 $65,780 187,671 310,395 (2,938) -- -- 560,908
Equity at January 1,
1993 of pooled
companies acquired in
1993.................. 2,497,976 6,245 10,366 28,862 -- -- -- 45,473
---------- ------- ------- ------- ------ ------ ------- -------
Balance, January 1,
1993 as restated...... 28,809,891 72,025 198,037 339,257 (2,938) -- -- 606,381
Net income............. -- -- -- 22,852 -- -- -- 22,852
Cash dividends paid
($.25 per share)...... -- -- -- (7,108) -- -- -- (7,108)
Options exercised by
employees of pooled
companies prior to
merger................ 48,687 121 293 -- -- -- -- 414
Cash dividends paid by
pooled companies prior
to merger............. -- -- -- (364) -- -- -- (364)
Common stock issued:
Dividend reinvestment
plan................. 57,818 145 1,732 -- -- -- -- 1,877
Employee benefit and
stock option plans... 128,840 322 3,272 -- -- -- -- 3,594
Conversion of
debentures........... 4,616 12 70 -- -- -- -- 82
Acquisitions.......... 692,999 1,732 20,454 -- -- -- -- 22,186
Redemption of common
stock................. (71,000) (177) (2,182) -- -- -- -- (2,359)
---------- ------- ------- ------- ------ ------ ------- -------
Balance, March 31,
1993................. 29,671,851 $74,180 221,676 354,637 (2,938) -- -- 647,555
========== ======= ======= ======= ====== ====== ======= =======
Balance, January 1,
1994.................. 32,476,387 $81,191 266,822 401,953 (4,419) (2,035) -- 743,512
Adjustment of
securities available
for sale to fair value
at January 1.......... -- -- -- -- -- -- 7,925 7,925
Net income............. -- -- -- 25,728 -- -- -- 25,728
Cash dividends paid
($.27 per share)...... -- -- -- (8,670) -- -- -- (8,670)
Common stock issued:
Dividend reinvestment
plan................. 6,089 15 187 -- -- -- -- 202
Employee benefit and
stock option plans... 113,781 284 2,741 -- -- -- -- 3,025
Acquisitions.......... 39,489 99 537 -- -- -- -- 636
Redemption of common
stock................. (440,000) (1,100) (13,587) -- -- -- -- (14,687)
Change in net
unrealized gains
(losses) on securities
available for sale.... -- -- -- -- -- -- (16,669) (16,669)
---------- ------- ------- ------- ------ ------ ------- -------
Balance, March 31,
1994................. 32,195,746 $80,489 256,700 419,011 (4,419) (2,035) (8,744) 741,002
========== ======= ======= ======= ====== ====== ======= =======
</TABLE>
5
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CONSOLIDATED STATEMENTS OF CASH FLOWS
BB&T FINANCIAL CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------
1994 1993
--------- --------
(THOUSANDS)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received..................................... $ 146,876 135,706
Noninterest income received........................... 28,850 25,100
Interest paid......................................... (62,637) (54,020)
Noninterest expense paid.............................. (77,914) (60,014)
Income taxes paid..................................... (22,677) (774)
--------- --------
Net cash provided by operating activities........... 12,498 45,998
--------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of securities available for sale.. 278,998 105,872
Proceeds from maturities or calls of securities....... 44,565 181,249
Purchase of securities................................ (514,968) (156,598)
Net decrease in loans................................. 100,656 19,733
Proceeds from sales of premises and equipment......... 35 88
Purchases of property and equipment................... (6,311) (7,397)
Proceeds from sales of foreclosed properties.......... 4,162 4,024
Cash of companies acquired, net....................... -- 30,492
Purchase of officers' life insurance policies......... -- (30,000)
Other................................................. (6,572) (7,788)
--------- --------
Net cash used in investing activities............... (99,435) 139,675
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Net (decrease) in demand deposits, interest checking
and savings accounts................................. (67,021) (97,500)
Net increase (decrease) in certificates of deposit and
other time deposits.................................. (90,346) 29,837
Net increase (decrease) in short-term borrowed funds.. 219,145 (69,010)
Net (decrease) in long-term debt...................... (3,345) (1,523)
Proceeds from issuance of common stock................ 3,227 5,773
Redemption of common stock............................ (14,687) (2,359)
Dividends paid........................................ (8,670) (7,472)
--------- --------
Net cash provided (used) by financing activities.... 38,303 (142,254)
--------- --------
Net increase (decrease) in cash and cash equivalents.. (48,634) 43,419
Cash and cash equivalents on January 1................ 408,135 319,670
--------- --------
Cash and cash equivalents on March 31................. $ 359,501 363,089
========= ========
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
ACTIVITIES
Common stock issued for purchased company............. -- 22,298
Loans transferred to foreclosed properties............ 2,733 2,082
========= ========
</TABLE>
6
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
BB&T FINANCIAL CORPORATION AND SUBSIDIARIES
NOTE 1. SECURITIES
BB&T adopted the provisions of Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and Equity Securities", as
of January 1, 1994. SFAS No. 115 requires that securities held to maturity be
recorded at amortized cost and securities that are available for sale be
recorded at fair value, with unrealized gains and losses on securities
available for sale reported, net of tax, as a separate component of
shareholders' equity. Upon adoption of SFAS No. 115, BB&T transferred
approximately $1.36 billion of debt and equity securities to the available for
sale portfolio, resulting in an increase to shareholder's equity of $7.9
million. Adoption of SFAS No. 115 had no effect on current year earnings. Prior
to the adoption of SFAS No. 115, securities available for sale were reported at
the lower of cost or market. At January 1 and March 31, 1994 the amortized cost
and fair values of securities were as follows:
<TABLE>
<CAPTION>
GROSS GROSS
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
---------- ---------- ---------- ---------
($ IN THOUSANDS)
<S> <C> <C> <C> <C>
January 1, 1994--Held to Maturity
State and municipal............... $ 114,245 8,038 41 122,242
---------- ------ ------ ---------
$ 114,245 8,038 41 122,242
========== ====== ====== =========
January 1, 1994--Available for Sale
U.S. Treasury..................... $1,898,105 10,007 2,297 1,905,815
U.S. Government agencies and
corporations..................... 165,554 6,228 37 171,745
State and municipal............... 9,752 154 67 9,839
Other securities.................. 13,157 513 1 13,669
---------- ------ ------ ---------
$2,086,568 16,902 2,402 2,101,068
========== ====== ====== =========
March 31, 1994--Held to Maturity
State and municipal............... $ 94,567 5,971 10 100,528
---------- ------ ------ ---------
$ 94,567 5,971 10 100,528
========== ====== ====== =========
March 31, 1994--Available for Sale
U.S. Treasury..................... $2,131,084 3,984 20,366 2,114,702
U.S. Government agencies and
corporations..................... 141,688 2,366 638 143,416
State and municipal............... 16,598 64 504 16,158
Other securities.................. 8,117 523 -- 8,640
---------- ------ ------ ---------
$2,297,487 6,937 21,508 2,282,916
========== ====== ====== =========
</TABLE>
7
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The aggregate value of securities held to maturity and securities available
for sale at March 31, 1994 by contractual maturity were:
<TABLE>
<CAPTION>
AMORTIZED FAIR
COST VALUE
---------- ---------
($ IN THOUSANDS)
<S> <C> <C> <C>
Held to Maturity
Due in one year or less.............................. $ 17,586 17,733
Due after one year through five years................ 28,644 30,157
Due after five years through ten years............... 46,547 50,632
Due after ten years.................................. 1,790 2,006
---------- ---------
Mortgage-backed securities........................... -- --
---------- ---------
$ 94,567 100,528
========== =========
Available for Sale
Due in one year or less.............................. $ 806,299 808,881
Due after one year through five years................ 1,412,168 1,393,143
Due after five years through ten years............... 20,267 19,917
Due after ten years.................................. 13,014 13,438
---------- ---------
Mortgage-backed securities........................... 45,739 47,537
---------- ---------
$2,297,487 2,282,916
========== =========
</TABLE>
During the first quarter of 1994, gross gains of $1,055,000 and gross losses
of $260,000 were realized from sale of securities available for sale.
8
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion and analysis is intended to assist in understanding
BB&T's results of operations and changes in financial position for the three
months ended March 31, 1994. This discussion and analysis should be read in
conjunction with the consolidated financial statements and supplemental
financial data contained elsewhere in this Quarterly Report on Form 10-Q.
Net income for the first quarter ended March 31 totalled $25.7 million,
compared with $22.9 million last year, an increase of 12.6%. Primary net income
per share for the period was $.79, compared with $.76, while on a fully diluted
basis, earnings per share were $.79 and $.73, respectively. Primary net income
per share increased 3.9% and fully diluted income per share increased 8.2% over
the first quarter of 1993. The dilution in per share earnings in 1993 related
to $33.9 million of convertible debentures which were converted to 1.9 million
shares of BB&T common stock in May.
The annualized return on average assets was 1.15% for the first quarter,
compared with 1.27% last year. The annualized returns on average shareholders'
equity were 14.03% and 14.75%, respectively. In evaluating the results of
operations and financial position of BB&T, acquisitions accounted for as
purchases should be considered. Growth rates reported for both balance sheet
and income statement items were significantly enhanced by the acquisitions.
Also, BB&T issued 1,769,536 shares of its common stock to effect purchase
acquisitions in 1993; approximately 1,364,000 shares were reacquired and
retired in 1993 and the first quarter of 1994.
NET INTEREST INCOME
Net interest income for the first quarter increased $10.4 million or 13.7%
over the first three months of 1993. Rates paid for deposits and other funds
increased significantly during the first quarter of 1994, and, while the prime
rate of interest was increased .25% to 6.25% on March 24, there was a
significant compression in interest rate spreads and margins. The taxable
equivalent net interest margin was 4.25% for the first three months of this
year, compared with 4.72% in the first quarter last year and 4.36% in the
fourth quarter of 1993. As a result, the growth in net interest income has not
been as great as that in earning assets.
Average earning assets were $8.6 billion for the first three months of this
year, an increase of approximately $1.7 billion or 25.4% over the first three
months of 1993. Average interest-bearing liabilities increased 26.9% to a total
of $7.5 billion. For the first quarter, average interest-bearing liabilities
were 87.9% of average earning assets, compared with 86.9% last year.
BB&T uses interest rate swaps as hedges to optimize net interest income and
protect its earnings against dramatic changes in market rates of interest.
These hedges contributed approximately $2.6 million to net interest income in
the first quarter of 1994, compared with $4.8 million in the first quarter last
year.
PROVISION AND ALLOWANCE FOR LOAN LOSSES
BB&T's subsidiaries maintain allowances for loan losses to absorb potential
future losses. Provisions for loan losses are charged against earnings to
maintain the allowances at appropriate levels.
The provision for loan losses for the first quarter totalled $3.35 million
and was $1.95 million or 36.8% less than the provision of $5.30 million
recorded for the first three months of 1993. BB&T has been able to
progressively reduce its provision for loan losses throughout 1993 and the
first quarter of 1994 because of constant improvement in the credit quality of
its loan portfolios. The levels of both nonperforming loans and actual charge-
offs have declined for several quarters, and, in fact, BB&T actually
experienced net recoveries in the first quarter of 1994.
Nonperforming loans (nonaccrual and restructured loans) totalled $24.3
million at the end of March, compared with $27.6 million 12 months earlier.
Total nonperforming assets, including foreclosed property,
9
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were $34.9 million at the end of March, compared with $46.5 million at the end
of the first quarter last year. On March 31, nonperforming assets were .56% of
loans and foreclosed property and .38% of total assets, compared with .89% and
.62%, respectively, at the end of the first quarter of 1993. For the first
quarter, BB&T recorded net recoveries on loans of $953,000, compared with net
charge-offs of $1.9 million in the first three months last year.
The allowance for loan losses of $92.5 million was 1.49% of loans outstanding
at the end of the quarter. This compares with an allowance of $79.8 million or
1.54% of outstanding loans at the end of March, 1993. More significantly, the
allowance for loan losses was 3.81 times nonperforming loans at the end of the
quarter, up from 2.88 12 months earlier and 2.88 at the end of 1993. In
Management's opinion, the allowance for loan losses on March 31 was adequate.
NONINTEREST INCOME
Noninterest income for the first quarter totalled $31.0 million and was $5.3
million or 20.8% above the $25.7 million recorded for the same period last
year. Excluding gains on sales of securities, noninterest income increased $5.7
million or 23.0%. The growth in noninterest income was provided by increases in
service charges on deposit accounts and increased revenues from mortgage
banking, insurance agency and trust operations.
Service charges on deposit accounts increased approximately $1.6 million or
19.6% over the initial quarter of last year. Increases in fee schedules were
the primary reason for the growth. Average deposits did increase approximately
$956 million or 16.3%; however, a substantial portion of the deposit growth
came from savings acquisitions, which generally do not generate significant
amounts of service charge income.
Mortgage banking income is derived primarily from the origination,
securitization and sale of mortgage loans and from the servicing of mortgage
loans for third party investors. During the first quarter, BB&T realized $5.2
million in revenues from its mortgage banking activities, an increase of $1.1
million or 25.6% over the $4.1 million recorded in the first quarter last year.
BB&T originated $297 million in mortgage loans in the first three months of
1994, compared with $163 million in the year earlier quarter. BB&T was
servicing approximately $4.1 billion in residential mortgage loans for third
party investors at the end of March. A vast majority of the servicing portfolio
consists of loans originated by BB&T. BB&T realized approximately $2.0 million
from mortgage loan servicing in the first quarter and approximately $2.8
million from the origination and sale of mortgage loans.
In recent years BB&T has built a statewide network of insurance agencies
primarily through acquisition. In the last three years, BB&T has acquired the
assets and liabilities of 7 insurance agencies with operations in cities
throughout North Carolina. Additional acquisitions are anticipated in 1994.
Insurance commissions totalled approximately $3.3 million in the first quarter
of this year, an increase of $860,000 or 34.9% over the $2.5 million recorded
for the first three months of 1993.
BB&T has offered both corporate and personal trust services through its trust
division for many years. Trust income for the first quarter totalled
approximately $2.7 million, compared with $2.3 million in the year earlier
quarter. Approximately $242,000 of the increase was derived from mutual fund
management fees.
In recent years BB&T has acquired several savings institutions which involved
their conversion from mutual association to stock ownership with simultaneous
acquisition by BB&T. In these acquisitions, the value of net assets acquired
has generally exceeded cost, resulting in negative goodwill which is accreted
to earnings over periods of ten years. In the first three months of 1994,
noninterest income included approximately $1.3 million from the amortization of
negative goodwill, compared with $1.0 million for the first quarter of last
year. BB&T recorded gains on sales of securities of $795,000 this year,
compared with $1.1 million in the first three months of last year.
Finally, BB&T has been a registered dealer in securities for many years.
Historically, BB&T took a passive approach to securities sales, offering the
service as an accommodation to its customers. In recent years
10
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BB&T has expanded its sales efforts and, in 1993, organized a separate
broker/dealer subsidiary. Noninterest income for the first quarter included
approximately $683,000 in investment services commissions, compared with
$259,000 in the first quarter of 1993.
NONINTEREST EXPENSE
Noninterest expense for the first quarter increased $12.4 million or 19.7% to
a total of $74.9 million. Thrift acquisitions were again significant
contributors to the increase in operating expense, but expanded technological
capabilities and the growth of insurance agency operations, mortgage banking
and investment brokerage activities were other factors.
Personnel costs, including salaries and benefits, increased $7.8 million or
25.3% to a total of $38.8 million for the first quarter. Salaries grew $6.1
million or 25.1%, while other personnel expense rose $1.7 million or 26.2%. No
employees of acquired companies have been displaced as a result of their
employers affiliation with BB&T. This commitment on the part of BB&T has
resulted in increased personnel cost in the short-term, but it is anticipated
that excess cost will be eliminated through attrition.
Furniture and equipment expense totalled $6.2 million for the first three
months of this year, compared with $5.5 million a year earlier. This represents
an increase of approximately $708,000 or 12.8%. Net occupancy expense increased
17.5% from the first quarter of 1993 to the first quarter of 1994. Net
occupancy expense was $5.6 million and $4.8 million for the first three months
of 1994 and 1993, respectively. Furniture and equipment expense and occupancy
expense increases resulted from platform automation, mergers, upgrades to
computer systems and a $9.7 million addition to BB&T's operation center.
Deposit insurance premiums were up approximately $501,000 in the first
quarter, primarily because of deposits acquired from savings institutions.
Other noninterest expense included an increase of $729,000 in goodwill
amortization as a result of the purchase of a savings institution, and a
reduction of $732,000 in the expense of foreclosed property.
Noninterest expense was 3.34% of average assets for the first quarter of
1994, compared with 3.49% in the same quarter last year. The efficiency ratio
(noninterest expense as a percent of net revenues) was 62.05% for the first
three months of this year, compared with 59.59% in last year's first quarter.
FINANCIAL POSITION
Accompanying tables present the capital adequacy, liquidity and stock
performance of BB&T for the last five quarters. The ratio of average loans to
average deposits was 91.14% for the first quarter, compared with 86.06% in the
year earlier quarter, but BB&T continues to be very liquid. Liquid assets
(cash, cash equivalents and investment securities) were 29.63% of assets at the
end of March, compared with 28.13% 12 months earlier. Securities with a fair
value of approximately $2.3 billion were classified as available for sale on
March 31, 1994. A strong equity position also provides liquidity, and the ratio
of equity to assets at the end of the quarter was still above 8% at 8.02%. This
compares with 8.65% on March 31, 1993. Lower ratios this year primarily
resulted from the purchase for cash of a savings institution with approximately
$537 million in assets and the repurchase and subsequent retirement of BB&T
common stock. Also, shareholders' equity included $8.7 million in net
unrealized losses on securities available for sale on March 31, 1994.
Short-term borrowed funds were $1.2 billion at the end of March, up from $541
million at the end of the first quarter 1993. Long-term debt totalled $343.4
million this year, compared with $138.3 million last year. The increase in
long-term debt resulted from the issuance of $232 million of intermediate term
deposit notes by BB&T's North Carolina bank subsidiary. In the second quarter
of 1993, approximately $33.9 million of subordinated debentures were converted
to BB&T common stock, and BB&T will redeem a $50 million variable note issue in
May.
BB&T and its subsidiaries have historically maintained very strong equity and
capital positions. All capital ratios remain well above regulatory guidelines.
Regulatory guidelines require that bank holding companies maintain a Tier 1
risk-based capital ratio of 4% or better and a total risk-based capital ratio
of 8% or better. For BB&T, these ratios were 12.03% and 13.29%, respectively,
at the end of the first quarter.
11
<PAGE>
TABLE 1
QUARTERLY EARNINGS SUMMARY
<TABLE>
<CAPTION>
TWELVE MONTHS 1994 1993
ENDED ------- -------------------------------
MARCH 31, FIRST FOURTH THIRD SECOND FIRST
1994 QUARTER QUARTER QUARTER QUARTER QUARTER
------------- ------- ------- ------- ------- -------
($ IN THOUSANDS, EXCEPT PER SHARE)
<S> <C> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Interest income, taxable
equivalent.............. $591,190 152,510 150,411 146,391 141,878 134,454
Interest expense......... 238,061 62,727 60,286 58,248 56,800 55,074
-------- ------- ------- ------- ------- -------
Net interest income,
taxable equivalent...... 353,129 89,783 90,125 88,143 85,078 79,380
Taxable equivalent
adjustment.............. 14,209 3,447 3,606 3,519 3,637 3,421
-------- ------- ------- ------- ------- -------
Net interest income...... 338,920 86,336 86,519 84,624 81,441 75,959
Provision for loan
losses.................. 15,547 3,350 3,893 4,003 4,301 5,303
-------- ------- ------- ------- ------- -------
Net interest income after
provision for loan
losses.................. 323,373 82,986 82,626 80,621 77,140 70,656
Noninterest income:
Service charges on
deposit accounts...... 37,976 9,667 9,829 9,405 9,075 8,085
Commissions and fees... 51,880 15,398 13,801 12,229 10,452 12,182
Gains on sales of
securities............ 1,061 795 37 82 147 1,112
Other operating income. 26,126 5,130 7,438 6,762 6,796 4,277
Noninterest expense:
Personnel.............. 142,081 38,785 35,388 34,990 32,918 30,956
Premises and equipment. 47,527 11,842 12,869 11,811 11,005 10,297
Other.................. 99,422 24,313 26,854 24,604 23,651 21,335
-------- ------- ------- ------- ------- -------
Income before income
taxes................... 151,386 39,036 38,620 37,694 36,036 33,724
Income taxes............. 50,274 13,308 13,171 12,466 11,329 10,872
-------- ------- ------- ------- ------- -------
Net income........... $101,112 25,728 25,449 25,228 24,707 22,852
======== ======= ======= ======= ======= =======
PER SHARE DATA
Net income:
Primary................ $ 3.12 .79 .78 .77 .78 .76
Fully diluted.......... 3.11 .79 .78 .77 .77 .73
Cash dividends........... 1.04 .27 .27 .25 .25 .25
Book value............... 23.02 23.02 22.89 22.48 22.12 21.82
Closing market price..... 29.13 29.13 33.25 33.88 34.38 33.88
</TABLE>
TABLE 2
PROFITABILITY MEASURES
<TABLE>
<CAPTION>
1994 1993
------- -------------------------------
FIRST FOURTH THIRD SECOND FIRST
QUARTER QUARTER QUARTER QUARTER QUARTER
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Return on average assets................ 1.15% 1.16 1.22 1.27 1.27
Return on average equity................ 14.03 13.81 14.06 14.54 14.75
Net interest margin..................... 4.25 4.36 4.52 4.66 4.72
Yield to break even..................... 2.24 2.32 2.41 2.49 2.51
</TABLE>
12
<PAGE>
TABLE 3
COMPOSITION OF LOAN PORTFOLIO
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
-------------------- ------------
1994 1993 1993
---------- --------- ------------
(THOUSANDS)
<S> <C> <C> <C>
Commercial real estate--nonowner occupied ... $ 716,712 698,001 715,873
Residential real estate--construction,
acquisition and development................. 411,936 366,720 399,834
Commercial real estate--owner occupied....... 932,354 779,207 910,602
Residential real estate--permanent........... 1,961,811 1,447,298 2,130,556
Commercial................................... 975,400 867,710 942,630
Consumer..................................... 595,217 496,452 609,171
Home equity lines............................ 393,134 345,210 390,232
Credit card and related plans................ 130,080 107,038 134,805
Other........................................ 91,841 74,534 77,107
---------- --------- ---------
$6,208,485 5,182,170 6,310,810
========== ========= =========
</TABLE>
TABLE 4
REAL ESTATE LOANS--RISK CATEGORIES--MARCH 31, 1994
<TABLE>
<CAPTION>
NONPERFORMING LOANS
ACQUISITION ----------------------
AND % OF
PERMANENT CONSTRUCTION DEVELOPMENT TOTAL AMOUNT LOAN TYPE
--------- ------------ ----------- ---------- ---------- -----------
(THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
COMMERCIAL-NONOWNER OCCUPIED:
Multi-family................ $281,539 23,097 10,353 314,989 1,834 .58%
Hotels/motels............... 86,662 8,441 -- 95,103 1,347 1.42
Shopping centers/malls...... 73,594 3,718 12,077 89,389 -- --
Office buildings............ 86,267 6,067 5,766 98,100 267 .27
Warehouse/distribution/light
industrial................. 56,243 4,613 13,943 74,799 454 .61
Acquisition only............ -- -- 44,332 44,332 3,050 6.88
-------- ------- ------- ---------- ---------- --------
Total commercial--nonowner
occupied................. 584,305 45,936 86,471 716,712 6,952 .97
-------- ------- ------- ---------- ---------- --------
RESIDENTIAL--CONSTRUCTION,
ACQUISITION, AND DEVELOPMENT. -- 125,746 210,686 336,432 1,430 .43
-------- ------- ------- ---------- ---------- --------
Total real estate......... $584,305 171,682 297,157 1,053,144 8,382 .80%
======== ======= ======= ========== ========== ========
TOTAL LOANS................... $6,208,485 24,260 .39%
TOTAL REAL ESTATE/TOTAL LOANS. 16.96% 34.55
</TABLE>
13
<PAGE>
TABLE 5
AVERAGE BALANCE SHEETS
BB&T FINANCIAL CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, THREE MONTHS ENDED DECEMBER 31,
--------------------------------------------------------------- -------------------------------------
1994 1993 1993
------------------------------- ------------------------------- -------------------------------------
AVERAGE INCOME/ AVERAGE AVERAGE INCOME/ AVERAGE AVERAGE INCOME/ AVERAGE
BALANCE EXPENSE YIELD/RATE BALANCE EXPENSE YIELD/RATE BALANCE EXPENSE YIELD/RATE
---------- -------- ---------- ---------- -------- ---------- ------------ ---------- ------------
(THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Loans.................. $6,221,479 119,865 7.81% $5,051,908 104,437 8.38 % $ 5,994,188 117,965 7.81%
Securities:
U. S. Government and
other................ 2,148,089 29,286 5.53 1,621,181 26,436 6.61 2,042,823 28,831 5.60
State and municipal... 110,177 2,724 10.03 127,728 3,376 10.72 122,430 3,257 10.55
---------- -------- ---------- -------- ------------ ----------
Total securities...... 2,258,266 32,010 5.75 1,748,909 29,812 6.91 2,165,253 32,088 5.88
Interest-bearing bank
balances.............. 68,194 552 3.28 21,717 202 3.77 41,241 305 2.93
Federal funds sold..... 11,480 83 2.93 451 3 2.70 6,503 53 3.23
---------- -------- ---------- -------- ------------ ----------
Total earning assets.. 8,559,419 152,510 7.23 6,822,985 134,454 7.99 8,207,185 150,411 7.27
---------- -------- ---------- -------- ------------ ----------
Allowance for loan
losses................ (90,128) (78,053) (86,829)
Net unrealized gains on
securities available
for sale.............. 7,523 -- --
Cash and due from
banks, noninterest-
bearing............... 283,502 250,098 281,495
Bank premises and
equipment............. 133,873 94,041 121,983
Other assets........... 210,205 186,750 208,795
---------- ---------- ------------
Total assets.......... $9,104,394 $7,275,821 $ 8,732,629
========== ========== ============
LIABILITIES AND
SHAREHOLDERS' EQUITY
Interest-bearing
deposits:
Savings............... $ 824,352 5,253 2.58% $ 471,378 3,377 2.91% $ 660,935 4,494 2.70%
Interest checking..... 960,815 4,713 1.99 747,391 3,988 2.16 895,657 4,412 1.95
Money rate savings.... 721,298 4,085 2.30 733,054 4,807 2.66 751,406 4,203 2.22
Certificates of
deposit and other
time deposits........ 3,602,454 36,163 4.07 3,316,468 36,801 4.50 3,467,681 35,776 4.09
---------- -------- ---------- -------- ------------ ----------
Total interest-bearing
deposits............. 6,108,919 50,214 3.33 5,268,291 48,973 3.77 5,775,679 48,885 3.36
Short-term borrowed
funds................. 1,068,858 8,373 3.18 526,554 3,867 2.98 985,316 7,367 2.97
Long-term debt......... 344,504 4,140 4.87 133,146 2,234 6.80 337,847 4,034 4.74
---------- -------- ---------- -------- ------------ ----------
Total interest-bearing
liabilities.......... 7,522,281 62,727 3.38 5,927,991 55,074 3.77 7,098,842 60,286 3.37
---------- -------- ---------- -------- ------------ ----------
Demand deposits,
noninterest-bearing... 717,658 601,821 780,504
Other liabilities...... 120,921 117,896 122,425
Shareholders' equity... 743,534 628,113 730,858
---------- ---------- ------------
Total liabilities and
shareholders' equity. $9,104,394 $7,275,821 $ 8,732,629
========== ========== ============
Interest income and
rate earned........... $152,510 7.23% $134,454 7.99% $ 150,411 7.27%
Interest expense and
rate paid............. 62,727 3.38 55,074 3.77 60,286 3.37
Interest rate spread... 3.85 4.22 3.90
NET INTEREST INCOME AND
NET YIELD ON AVERAGE
INTEREST-EARNING
ASSETS................ $ 89,783 4.25% $ 79,380 4.72% $ 90,125 4.36%
======== ======== ==========
</TABLE>
14
<PAGE>
TABLE 6
ANALYSIS OF ALLOWANCE FOR LOAN LOSSES
<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
MARCH 31, DECEMBER 31,
---------------------------------
1994 1993 1993
--------- ---------------------
(THOUSANDS)
<S> <C> <C> <C>
Balance, beginning of period................. $ 88,235 73,085 73,085
Provision for loan losses.................... 3,350 5,303 17,500
Allowances of purchased companies............ -- 3,248 10,560
--------- -------- -------
91,585 81,636 101,145
Loans charged off............................ 1,446 2,806 18,590
Recoveries................................... 2,399 927 5,680
--------- -------- -------
Net loans charged off...................... (953) 1,879 12,910
--------- -------- -------
Balance, end of period....................... $ 92,538 79,757 88,235
========= ======== =======
Net charge-offs (annualized) to average loans
outstanding................................. (.06)% .15 .23
Allowance for loan losses to loans
outstanding at end of period................ 1.49 1.54 1.40
Allowance for loan losses to nonperforming
loans....................................... 3.81x 2.88 2.88
</TABLE>
TABLE 7
NONPERFORMING ASSETS AND PAST DUE LOANS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
--------------- ------------
1994 1993 1993
------- ------ ------------
(THOUSANDS)
<S> <C> <C> <C>
Nonaccrual loans................................... $23,022 26,428 29,328
Restructured loans................................. 1,238 1,221 1,303
Foreclosed property................................ 10,606 18,817 12,105
------- ------ ------
Total nonperforming assets....................... $34,866 46,466 42,736
======= ====== ======
Total nonperforming assets to:
Loans and foreclosed property.................... .56% .89 .68
Total assets..................................... .38 .62 .47
======= ====== ======
Accruing loans past due 90 days.................... $24,631 16,791 18,940
======= ====== ======
</TABLE>
15
<PAGE>
TABLE 8
NONINTEREST INCOME AND EXPENSE
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
-------------------------------------------
PERCENT OF
PERCENT AVERAGE ASSETS
INCREASE --------------
1994 1993 (DECREASE) 1994 1993
------- ------ ---------- ------- -------
(THOUSANDS)
<S> <C> <C> <C> <C> <C>
NONINTEREST INCOME
Service charges on deposit
accounts.......................... $ 9,667 8,085 19.6% .43 .45
Other service charges, commissions
and fees.......................... 4,501 3,869 16.3 .20 .22
Mortgage banking income............ 5,199 4,139 25.6 .23 .23
Gains on sales of securities....... 795 1,112 (28.5) .04 .06
Trust income....................... 2,701 2,313 16.8 .12 .13
Insurance commissions.............. 3,324 2,464 34.9 .15 .14
Other operating income............. 4,803 3,674 30.7 .21 .20
------- ------ ----- ------- -------
$30,990 25,656 20.8% 1.38 1.43
======= ====== ===== ======= =======
NONINTEREST EXPENSE
Salaries and wages................. $30,446 24,347 25.1% 1.36 1.36
Other personnel expense............ 8,339 6,609 26.2 .37 .37
Net occupancy expense.............. 5,612 4,775 17.5 .25 .26
Furniture and equipment expense.... 6,230 5,522 12.8 .28 .31
Deposit insurance premiums......... 3,887 3,386 14.8 .17 .19
Other operating expense............ 20,426 17,949 13.8 .91 1.00
------- ------ ----- ------- -------
$74,940 62,588 19.7% 3.34 3.49
======= ====== ===== ======= =======
EFFICIENCY RATIO 62.05% 59.59%
======= ======
</TABLE>
TABLE 9
SELECTED RATIOS
<TABLE>
<CAPTION>
1994 1993
------- -------------------------------
FIRST FOURTH THIRD SECOND FIRST
QUARTER QUARTER QUARTER QUARTER QUARTER
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
CAPITAL ADEQUACY
Average equity to average assets....... 8.17% 8.37 8.65 8.74 8.63
Equity to assets at period end......... 8.02 8.11 8.62 8.67 8.65
Risk-based capital ratios:
Tier 1 capital........................ 12.03 11.85 12.81 12.96 12.72
Total capital......................... 13.29 13.61 14.79 14.95 15.44
Tier 1 leverage ratio.................. 7.83 8.08 8.60 9.29 8.79
LIQUIDITY
Average loans to:
Average deposits...................... 91.14% 91.43 91.03 87.37 86.06
Average deposits and short-term
borrowed funds....................... 78.80 79.47 79.37 78.19 78.98
STOCK PERFORMANCE
Market price (period end).............. $29.13 33.25 33.88 34.38 33.88
Price/earnings ratio (based on quarter
end stock price and trailing 12 months
fully diluted earnings per share)..... 9.36x 10.90 12.32 12.88 12.98
Price/book ratio (period end).......... 1.27 1.45 1.51 1.55 1.55
</TABLE>
16
<PAGE>
PART II. OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The following matters were submitted to a vote of security holders at the
Annual Meeting of Shareholders of Registrant held on Tuesday, April 26, 1994:
Proposal 1.--Fixing the number of directors to be elected at twenty-seven
(27) and the election of the twenty-three (23) nominees named below:
<TABLE>
<CAPTION>
VOTE
---------------------------------------
AGAINST OR BROKER
NAME OF DIRECTOR FOR WITHHELD ABSTAIN NON-VOTE
- - ---------------- ---------- ---------- ------- ---------
<S> <C> <C> <C> <C>
Joseph B. Alala, Jr..................... 23,407,934 404,116 3,157,547
John A. Allison IV...................... 23,408,571 403,479 3,157,547
W. Watson Barnes........................ 23,410,477 401,573 3,157,547
Paul B. Barringer....................... 23,409,739 402,311 3,157,547
Robert L. Brady......................... 23,410,302 401,748 3,157,547
W. G. Clark III......................... 23,410,602 401,448 3,157,547
Jesse W. Corbett, Jr.................... 23,410,382 401,668 3,157,547
W. R. Cuthbertson, Jr................... 23,410,272 401,778 3,157,547
Fred H. Deaton, Jr...................... 23,409,539 402,511 3,157,547
Joe L. Dudley, Sr....................... 23,404,552 407,498 3,157,547
Tom D. Efird............................ 23,409,472 402,578 3,157,547
O. William Fenn, Jr..................... 23,408,187 403,863 3,157,547
James E. Heins.......................... 23,408,187 403,863 3,157,547
Raymond A. Jones, Jr.................... 23,409,039 403,011 3,157,547
Kelly S. King........................... 23,408,702 403,348 3,157,547
David R. LaFar III...................... 23,410,402 401,648 3,157,547
J. Ernest Lathem, M.D................... 23,409,852 402,198 3,157,547
James H. Maynard........................ 23,410,312 401,738 3,157,547
A. Winniett Peters...................... 23,408,554 403,496 3,157,547
Richard L. Player, Jr................... 23,410,042 402,008 3,157,547
Larry J. Waggoner....................... 23,409,452 402,598 3,157,547
Henry G. Williamson, Jr................. 23,410,002 402,048 3,157,547
William B. Young, MD.................... 23,408,595 403,455 3,157,547
</TABLE>
Proposal 2.--Amending the Corporation's Articles of Incorporation to increase
the number of authorized shares of Common Stock from 50,000,000 shares to
100,000,000 shares.
<TABLE>
<CAPTION>
VOTE
---------------------------------------
AGAINST OR BROKER
FOR WITHHELD ABSTAIN NON-VOTE
---------- ---------- ------- ---------
<S> <C> <C> <C>
21,994,920 1,571,994 245,136 3,157,547
</TABLE>
Proposal 3.--Ratifying the selection of KPMG Peat Marwick as independent
auditors for the Corporation.
<TABLE>
<CAPTION>
VOTE
---------------------------------------
AGAINST OR BROKER
FOR WITHHELD ABSTAIN NON-VOTE
---------- ---------- ------- ---------
<S> <C> <C> <C>
23,651,332 51,972 108,746 3,157,547
</TABLE>
17
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION OF EXHIBIT REFERENCE
----------- ---------------------- ---------
<C> <S> <C>
(2)(a) Agreement and Plan of Reorganization dated
May 27, 1993 by and between Home Savings
Bank of Albemarle, SSB and Registrant Exhibit (2)(b)/1/
(2)(b) Agreement and Plan of Reorganization dated
June 22, 1993 by and between Asheville Sav-
ings Bank, SSB and Registrant Exhibit (2)(c)/1/
(2)(c) Agreement and Plan of Reorganization and Plan
of Merger, attached as Annex A dated Decem-
ber 7, 1993 by and between L.S.B.
Bancshares, Inc. and Registrant Exhibit (2)(c)/2/
(4)(a) Definitive Form of Certificate for common
stock, $2.50 par value, of Registrant Exhibit "B"/3/
(4)(b) Definitive Form of Floating Rate Subordinated
Notes due 1997, issued by Registrant Exhibit (4)(b)/4/
(4)(c) Indenture dated as of December 1, 1985, be-
tween Registrant and Bankers Trust Company,
Trustee, pursuant to which Registrant's
Floating Rate Subordinated Notes due 1997
are issued and held Exhibit (4)(c)/4/
(10)(a) Form of Branch Banking and Trust Company Long
Term Incentive Plan Exhibit (19)/5/
(10)(b) Form of Branch Banking and Trust Company Ex-
ecutive Incentive Compensation Plan Exhibit (10)(b)/6/
(10)(c) Form of BB&T Financial Corporation Non-Em-
ployee Director Stock Option Plan Exhibit (10)(c)/7/
(11) Statement re Computation of Per Share Earn-
ings Filed Herewith
(99) Articles of Amendment of BB&T Financial Cor-
poration Filed Herewith
</TABLE>
- - --------
(1) Incorporated by reference to the identified exhibit under Registrant's Form
10-Q, File No. 0-7871, filed August 13, 1993.
(2) Incorporated by reference to the identified exhibit under Registrant's Form
10-K, File No. 0-7871, filed March 17, 1994.
(3) Incorporated by reference to the identified exhibit under Registrant's Form
10-Q, File No. 2-50199, filed October 14, 1979.
(4) Incorporated by reference to the identified exhibit under Registrant's
Registration Statement on Form S-3, No. 33-1965, filed December 5, 1985.
(5) Incorporated by reference to the identified exhibit under Registrant's Form
10-Q, File No. 0-7871, filed May 14, 1991.
(6) Incorporated by reference to the identified exhibit under Registrant's Form
10-K, file No. 0-7871, filed February 22, 1985.
(7) Incorporated by reference to the identified exhibit under Registrant's Form
10-K, File No. 0-7871, filed March 16, 1992.
(b) Reports on Form 8-K
On January 10, 1994, the Registrant filed Form 8-K, filing the unaudited
interim financial statements of Old Stone Bank of North Carolina, Citizens
Savings Bank, SSB, Asheville Savings Bank, Home Savings Bank of Albemarle and
L.S.B. Bancshares, Inc. and audited financial statements of L.S.B. Bancshares,
Inc.
On February 4, 1994, the Registrant filed Form 8-K reporting the agreement to
terminate the Agreement and Plan of Reorganization whereby Scotland Savings
Bank, SSB was to convert from mutual to stock form and simultaneously be
acquired by the Registrant and to file the unaudited financial statements of
Asheville Savings Bank, SSB.
18
<PAGE>
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.
BB&T Financial
Corporation(Registrant)
/s/ Scott E. Reed
By: _________________________________
Scott E. ReedSenior Executive Vice
President and Chief Financial
Officer
Date: May 16, 1994
19
<PAGE>
EXHIBIT (11)
BB&T FINANCIAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-----------------------------
1994 1993
-------------- --------------
($ IN THOUSANDS, EXCEPT SHARE
AND PER SHARE)
<S> <C> <C>
Primary
Net income..................................... $ 25,728 22,852
============== ==============
Shares
Weighted average number of common shares out-
standing...................................... 32,154,527 29,325,991
Add shares assuming exercise of options reduced
by the number of shares which could have been
purchased with the proceeds from exercise of
such options.................................. 449,759 548,527
-------------- --------------
Primary weighted average number of common
shares and equivalent share................... 32,604,286 29,874,518
============== ==============
Primary income per common share and equivalent
share........................................... $ .79 .76
============== ==============
Assuming full dilution
Net income..................................... $ 25,728 22,852
Add after tax interest expense and amortization
of issue costs applicable to convertible de-
benture....................................... -- 386
-------------- --------------
Net income as adjusted........................... $ 25,728 23,238
============== ==============
Shares
Weighted average number of common shares out-
standing...................................... 32,154,527 29,325,991
Add shares assuming exercise of options reduced
by the number of shares which could have been
purchased with the proceeds from exercise of
such options.................................. 449,759 561,142
Add shares assuming conversion of convertible
debentures.................................... -- 1,914,750
-------------- --------------
Fully diluted weighted average number of shares.. 32,604,286 31,801,883
============== ==============
Fully diluted income per share................... $ .79 .73
============== ==============
</TABLE>
<PAGE>
EXHIBIT (99)
ARTICLES OF AMENDMENT
OF
BB&T FINANCIAL CORPORATION
The undersigned Corporation hereby submits these Articles of Amendment for
the purpose of amending its Articles of Incorporation:
1. The name of the Corporation is BB&T Financial Corporation;
2. The following Amendment to the Articles of Incorporation of the
Corporation was adopted by its shareholders on the 26th day of April, 1994,
in the manner prescribed by law:
The Articles of Incorporation of BB&T Financial Corporation are hereby
amended to increase the number of shares of common stock, $2.50 par value,
that the Corporation is authorized to issue from 50,000,000 shares to
100,000,000 shares.
3. No exchange, reclassification, or cancellation of issued shares will
be effected by the foregoing amendment.
4. These Articles of Amendment will become effective upon filing by the
Secretary of State of North Carolina.
This is the 2nd day of May, 1994.
BB&T Financial Corporation
/s/ Henry G. Williamson, Jr.
By: _________________________________
H. G. Williamson, Jr., President
and Chief Operating Officer
