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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 29, 1994
BB&T FINANCIAL CORPORATION
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(Exact name of registrant as specified in its charter)
North Carolina 0-7871 56-1056232
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(State or other jurisdiction (Commission (I.R.S. employer
of incorporation) file number) identification no.)
223 West Nash Street, Wilson, North Carolina 27893
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (919) 399-4291
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Not Applicable
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On August 1, 1994, the Registrant and Southern National Corporation of
Winston-Salem, North Carolina jointly announced the signing of a definitive
agreement of merger. The merger of equals, unanimously approved on July 29 by
the Boards of Directors of both companies, will be accomplished through a merger
to be accounted for as a pooling-of-interests. Included as exhibit 99.1 is the
joint press release.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
99.1 Joint Press Release from BB&T Financial Corporation and
Southern National Corporation of Winston-Salem, North Carolina, dated August
1, 1994.
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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
DATE: August 2, 1994 BY: /s/ Scott E. Reed
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Scott E. Reed
Senior Executive Vice President
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Exhibit 99.1
[LOGO OF BB&T [LOGO OF SOUTHERN NATIONAL
APPEARS HERE] APPEARS HERE]
News Release
Media and Analyst Contacts:
BB&T Southern National
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B. Gloyden Stewart, Jr. Bob Denham
(919) 399-4219 (910) 773-7363
Scott E. Reed John R. Spruill
(919) 399-4418 (910) 773-7221
FOR IMMEDIATE RELEASE
BB&T Financial Corporation and Southern National Corporation Agree to Merger of
Equals Creating the 6th Largest Banking Institution in the Southeast (August 1,
1994)--BB&T Financial Corporation (NASDAQ:BBTF) and Southern National
Corporation (NYSE:SNB), two of the Southeast's highest performing banking
companies, today jointly announced the signing of a definitive agreement of
merger.
This in-market "merger of equals" will create a financial institution with more
than $18 billion in assets and $2.2 billion in market capitalization, making the
combined franchise the 6th largest bank in the Southeast and the 35th largest
bank in the United States. Based on deposit market share, this new company will
be the largest bank in its home market of North Carolina and will be the third
largest bank in South Carolina.
The merger of equals, unanimously approved on Friday by the boards of directors
of both companies, will be accomplished through a merger to be accounted for as
a pooling of interests in which BB&T shareholders will receive 1.45 shares of
common stock of the resulting company for each share of BB&T common stock.
Southern National shareholders will receive 1.00 share of common stock of the
resulting company for each share of Southern National common stock. The
transaction will be structured as a tax-free exchange. The combined company will
have approximately 103 million shares outstanding after taking into account
pending acquisitions.
The merger transaction has an indicated total value of $2.2 billion based on the
Friday, July 29, BB&T common stock closing price of $31.00 per share and the
Southern National closing price of $21.13 per share. BB&T and Southern National
have granted each other options to purchase up to 19.9 percent of the currently
outstanding shares of each other's common stock to be exercisable under certain
conditions. The merged organization will be called Southern National Corporation
and will be headquartered in Winston-Salem, North Carolina. The lead bank for
the new company and all other subsidiary banks and their respective offices will
carry the name Branch Banking and Trust Company, BB&T's present name for its
lead bank and banking offices.
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BB&T, the oldest bank in North Carolina, was founded in 1872, and Southern
National was founded in 1897, both in eastern North Carolina. During the last
decade, they have each expanded throughout the Carolinas to build strong market
presence while achieving excellent financial results.
John A. Allison IV, 45, BB&T's chairman and chief executive officer, will be the
new institution's chairman and chief executive officer. He will lead an eight
member executive management team comprised of four senior managers from each
company. L. Glenn Orr, Jr. 54, Southern National's chairman and chief executive
officer, will retire upon consummation of the merger, but continue as a director
of the new company and a member of the board's executive committee. The new
board of directors will be comprised of 22 individuals, eleven members each from
BB&T and Southern National.
"We are bringing together two high performing and well-managed institutions that
are compatible strategically, geographically and culturally," said Mr. Orr.
"Both partners already have solid capital positions, excellent credit quality
and strong branch office networks which complement each other very well. Adding
all of the well-recognized benefits of in-market mergers to this foundation
creates the opportunity to jointly build a banking institution which is stronger
and more competitive than either institution can be on a stand-alone basis. I
have a tremendous amount of respect for the success John Allison and his team
have achieved at BB&T over the years and have utmost confidence in his ability
to lead the new institution to record growth and profits through the 1990's and
beyond."
"With the advent of nationwide interstate banking in North Carolina, we expect
the competitive environment in our home markets to intensify over the next
several years," said Mr. Allison. "This merger permits us both to double our
assets, market capitalization and market power without any earnings dilution and
management disruption. It would be difficult for either BB&T or Southern
National alone to achieve the financial and operating benefits available to the
new merged company."
"I look forward to working closely with all members of the new executive
management team as well as the many other fine employees of both companies to
create an even more profitable franchise for our collective base of
shareholders," Mr. Allison continued. "In particular, I am extremely grateful to
Glenn Orr for his vision and foresight in initiating discussions, his
cooperation and hard work in structuring the terms of the merger, and his
assistance and support in facilitating a smooth transition. I look forward to
Glenn's active participation on our board of directors and his continued
guidance in helping us to maximize our potential as a premier super-regional
banking institution."
The new Southern National will be among the largest banks in the Southeast and
the combined franchise will be the leader in many of the fastest growing markets
in North Carolina and South Carolina. In addition, BB&T's recently announced
acquisition of Commerce Bank in Virginia Beach, Virginia creates a strong
foundation in the southeastern part of that state on which to build in the
future. The strategic focus of the new company will mirror that of both BB&T and
Southern National -- to effectively meet with superior quality all the financial
needs of a growing base of consumer depositors and borrowers, small business
owners and middle-market companies within the North Carolina, South Carolina and
Virginia markets.
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As a result of operating efficiencies created from the merger, including the
elimination of approximately 70 of the new company's combined 535 branch
offices, annualized pretax cost savings in excess of $50 million are expected to
be fully realized within one year of consummation of the merger. Major cost
savings initiatives include the elimination of overlapping positions, the
complete integration of all back office functions and operations, consolidation
of selected branch offices, and all the other overhead benefits of operating
through a single bank holding company.
"Although we intend to make firm cuts in our operating expenses quickly and
efficiently, there are significant long-term opportunities for our employees,
customers and communities -- as well as for our shareholders," said Mr. Allison.
"This merger is good for Winston-Salem because it will strengthen its position
as a financial center in the Southeast, and as the banking industry continues
its rapid pace of consolidation, North Carolina and South Carolina will benefit
because two well-established local banking institutions are taking control of
their own destiny." Both Mr. Orr and Mr. Allison emphasized that this merger is
not a sale of either company, but rather the most effective way for each of them
to continue their strategies to maximize the long-term franchise value of both
companies.
Commenting on his decision to retire, Mr. Orr said, "This is the best way to
ensure the full benefits of consolidation are realized as rapidly as possible.
After analyzing past transactions of this nature, I concluded that sharing
management control for a period of time helps to perpetuate an atmosphere of
separate banks and creates confusion among employees, thereby slowing the
combined institution's ability to achieve maximum value for its shareholders as
soon as possible. I have full confidence in John's ability to effectively
implement the integration plan which we are designing together and look forward
to monitoring the new Southern National's profitability and soundness as a
member of the board."
The merger is expected to be completed by the end of the second quarter of 1995
and will be subject to approval by the shareholders of both companies as well as
by federal and state bank regulatory authorities.
The new company's common and preferred stock will be listed on the New York
Stock Exchange under the symbol SNB, Southern National's current listing, and is
expected to pay an initial annual dividend of $0.80.
Lehman Brothers provided investment banking advisory services and a fairness
opinion on the exchange ratio to both BB&T and Southern National in connection
with the transaction. In addition, BB&T received a separate fairness opinion on
the exchange ratio from Merrill Lynch & Co., and Southern National received a
separate fairness opinion on the exchange ratio from Wheat First Butcher Singer.
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SELECTED PRO FORMA INFORMATION
As of/ For the Six Months Ended June 30, 1994
($ in thousands)
Southern
BB&T* National Combined
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<S> <C> <C> <C>
Securities $ 2,680,825 $ 2,627,244 $ 5,308,069
Loans 7,101,201 5,098,647 12,199,848
Total assets 10,570,538 8,236,362 18,806,900
Total deposits 8,058,865 6,228,803 14,287,668
Shareholders' equity 850,697 593,867 1,444,564
Net income 58,981 52,931 111,912
ROA 1.13% 1.31% 1.21%
ROE 14.11 18.24 15.85
Equity to assets 8.05 7.21 7.68
Offices 304 231 535
Cities 159 116 275
Shareholders 23,673 20,048 43,721
FTE employees 4,930 3,808 8,738
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* Includes Commerce Bank
