SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) January 21, 1998
One Valley Bancorp, Inc.
(Exact name of registrant as specified in its charter)
West Virginia 0-10042 55-0609408
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
One Valley Square, Charleston, West Virginia 25326
(Address of principal executive offices)
(Zip Code)
(304) 348-7000
(Registrant's telephone number, including area code)
Not applicable
(Former name, address, and fiscal year, if changed since last report)
<PAGE>
One Valley Bancorp, Inc.
Item 5. Other Events
On January 21, 1998, One Valley issued the following press release:
One Valley Bancorp, Inc. (NYSE: OV), a $4.6 billion bank holding
company, reported record annual earnings for the year ended December 31,
1997. Net income for the year totaled $57.4 million, a 7.9% increase over
the $53.2 million earned in 1996. On a per share basis, net income rose 8.3%
to $2.10 from the $1.94 earned in 1996. All per share information includes
the effect of the September 12, 1997, 5 for 4 stock split effected in the
form of a 25% stock dividend. The improvement in net income in 1997 is due
primarily to increases in net interest income and non-interest income.
Fueled by a 9.4% increase in average securities and a 5.8% increase in
average loans outstanding over 1996, net interest income for 1997 rose 3.7%
to $179.2 million compared with $172.9 million earned in 1996. While net
interest income is up from 1996, the net interest margin percentage declined
to 4.56% for 1997 versus the 4.72% for 1996. The declining net interest
margin percentage reflects increased deposit costs due to competitive
pressures and continued emphasis on expanding the customer base, and downward
pressure on loan yields due to the interest rate environment.
Asset quality at One Valley continues to be strong. The non-performing
asset ratio at December 31, 1997 was 0.31% of total loans compared with 0.37%
at December 31, 1996. This ratio compares favorably with peer group bank
holding companies. Net charge-offs as a percentage of total loans for the
year was 0.26%, up from the 0.19% for 1996. One Valley's coverage ratio of
loan loss reserve to non-performing assets at December 31, 1997 was 451.83%,
and is expected to be adequate to cover potential losses on the current level
of non-performing assets.
Total non-interest income for 1997 increased 12.7% over 1996 primarily
due to increased trust revenues, fee income from new products, such as debit
cards and One Valley's expanding ATM network. Non-interest expenses
increased by 3.1% during the same period largely due to increases in staff,
data processing, and general operating costs. One Valley strives to
efficiently expand its services to meet the financial needs of its customers,
thus increasing customer service and financial profitability. As a result,
One Valley's net overhead ratio declined to 2.09% in 1997, compared to 2.18%
in 1996 (excluding a one-time $3.8 million SAIF charge).
For the fourth quarter of 1997, One Valley reported net income of $13.5
million, or $0.50 per share. This compares to net income of $14.5 million or
$0.52 per share reported for the fourth quarter of 1996. During the fourth
quarter of 1997, One Valley recognized non-recurring expenses of $1.8 million
related to the consolidation and growth of its expanding banking operations
in Virginia and West Virginia. These costs include one-time data processing
costs and other operations costs related to the consolidation of banking
operations, legal and consulting charges, staffing related expenses, and
write-downs of excess branch properties to fair market values.
J. Holmes Morrison, President and Chief Executive Officer of One
Valley, said, "One Valley's continuing expansion into the Central Virginia
market enables us to extend and diversify our franchise while capitalizing on
Virginia's strong growth prospects. We look forward to building strong new
community partnerships and providing our current and new customers with sound
financial solutions, personal service and banking convenience."
One Valley's acquisition of fifteen branches in Virginia from the
Wachovia Corporation is expected to be complete by February 20, 1998. In
addition, One Valley's acquisition of FFVA Financial Corporation based in
Lynchburg, Virginia is anticipated to close in the second quarter of 1998.
Once these transactions are complete, One Valley's total assets will expand
to $5.4 billion, with $4.1 billion in its West Virginia operations and $1.3
billion in its Virginia operations.
Mr. Morrison added, "We are pleased with the Company's financial
performance for 1997. As we look toward 1998, we will continue to focus on
One Valley's mission statement constituencies of customers, employees, owners
and the communities we serve."
One Valley Bancorp has 11 affiliate banks that operate 88 locations
serving West Virginia and Virginia. Additional financial data on One Valley
Bancorp follows.
<PAGE>
ONE VALLEY BANCORP, INC. AND SUBSIDIARIES
Financial Highlights
(unaudited in thousands, except per share data)
For The Three Months
Ended December 31
1997 1996 Change
FOR THE PERIOD
Net Interest Income $45,276 $44,360 2.06
Net Income 13,486 14,447 (6.65)
PER COMMON SHARE
Net Income $0.50 $0.52 (3.85)
Cash Dividends 0.21 0.19 10.53
FINANCIAL RATIOS
Return On Assets 1.20% 1.36%
Return On Equity 12.75% 14.18%
DAILY AVERAGES
Total Assets 4,484,638 4,245,665 5.63
Loans, Net 2,875,384 2,756,550 4.31
Total Earning Assets 4,188,859 3,959,490 5.79
Deposits 3,475,471 3,378,647 2.87
Shareholders' Equity 422,929 407,613 3.76
For The Year
Ended December 31
1997 1996 Change
FOR THE PERIOD
Net Interest Income $179,186 $172,868 3.65
Net Income 57,364 53,155 7.92
PER COMMON SHARE
Net Income $2.10 $1.94 8.25
Cash Dividends 0.80 0.74 8.11
Book Value 15.61 14.77 5.69
FINANCIAL RATIOS
Return On Assets 1.31% 1.30%
Return On Equity 13.88% 13.64%
DAILY AVERAGES
Total Assets 4,387,065 4,104,520 6.88
Loans, Net 2,809,252 2,652,817 5.90
Total Earning Assets 4,101,279 3,822,611 7.29
Deposits 3,438,441 3,270,975 5.12
Shareholders' Equity 413,226 389,705 6.04
AT PERIOD END
Total Assets 4,582,264 4,267,303 7.38
Loans, Net 2,926,992 2,768,467 5.73
Total Earning Assets 4,287,700 3,953,419 8.46
Deposits 3,517,562 3,406,016 3.27
Shareholders' Equity 424,275 408,577 3.84
LOAN QUALITY RATIOS
Allowance for Loan Losses
as a % of Total Loans 1.40 1.49
Loans Past Due Over 90 Days
as a % of Total Loans 0.19 0.15
Non-Performing Assets as
a % of Total Loans 0.31 0.37
Non-Performing Assets as
a % of Total Assets 0.20 0.24
<PAGE>
ONE VALLEY BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(unaudited in thousands)
December 31 December 31
1997 1996
ASSETS
Cash and Due From Banks $122,615 $146,152
Interest Bearing Deposits
With Other Banks 2,162 9,897
Federal Funds Sold 18,900 4,825
Cash and Cash Equivalents 143,677 160,874
Securities
Available-for-Sale,
at fair value 1,102,014 952,908
Held-to-Maturity
(Estimated Fair Value,
December 31, 1997 - $244,063;
December 31, 1996 - $219,841) 237,632 217,322
Loans
Total Loans 2,968,678 2,810,212
Less: Allowance For Loan
Losses 41,686 41,745
Net Loans 2,926,992 2,768,467
Premises & Equipment - Net 84,451 84,087
Other Assets 87,498 83,645
Total Assets $4,582,264 $4,267,303
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits
Non-interest Bearing $464,380 $406,630
Interest Bearing 3,053,182 2,999,386
Total Deposits 3,517,562 3,406,016
Short-term Borrowings
Federal Funds Purchased 22,581 17,278
Repurchase Agreements and
Other Borrowings 545,899 360,796
Total Short-term Borrowings 568,480 378,074
Long-term Borrowings 21,875 28,892
Other Liabilities 50,072 45,744
Total Liabilities 4,157,989 3,858,726
Shareholders' Equity:
Preferred Stock-$10 par value;
1,000,000 shares authorized
but none issued 0 0
Common Stock-$10 par value;
40,000,000 shares authorized,
Issued 31,520,688 shares at
December 31, 1997;
24,923,176 shares at
December 31, 1996 315,207 249,232
Capital Surplus 75,617 73,834
Retained Earnings 124,401 152,006
Unrealized Gain on
Securities Available-for-Sale,
net of deferred income 4,145 883
Treasury Stock - 4,346,846 shares
at December 31, 1997;
2,792,360 shares at
December 31, 1996; at cost (95,095) (67,378)
Total Shareholders' Equity 424,275 408,577
Total Liabilities and
Shareholders' Equity $4,582,264 $4,267,303
<PAGE>
ONE VALLEY BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(unaudited in thousands, except per share data)
For The Three Months
Ended December 31
1997 1996
INTEREST INCOME
Interest and Fees on Loans
Taxable $63,706 $60,863
Tax-Exempt 737 769
Total 64,443 61,632
Interest on Investment Securities
Taxable 17,369 16,290
Tax-Exempt 3,015 2,758
Total 20,384 19,048
Other Interest Income 428 276
Total Interest Income 85,255 80,956
INTEREST EXPENSE
Deposits 32,951 31,573
Short-term Borrowings 6,598 4,585
Long-term Borrowings 430 438
Total Interest Expense 39,979 36,596
Net Interest Income 45,276 44,360
Provision For Loan Losses 2,090 1,368
Net Interest Income
After Provision For Loan Losses 43,186 42,992
OTHER INCOME
Trust Department Income 2,495 2,355
Service Charges on Deposit Accounts 4,022 3,750
Real Estate Loan Processing &
Servicing Fees 1,477 1,418
Other Service Charges and Fees 2,798 2,103
Other Operating Income 1,058 1,012
Securities Transactions 633 0
Total Other Income 12,483 10,638
OTHER EXPENSES
Salaries and Employee Benefits 16,702 15,703
Occupancy Expense - Net 2,002 1,804
Equipment Expenses 2,396 2,513
Federal Deposit Insurance 190 157
Outside Data Processing 2,877 1,362
Other Operating Expenses 11,285 10,138
Total Other Expenses 35,452 31,677
Income Before Taxes 20,217 21,953
Applicable Income Taxes 6,731 7,506
NET INCOME 13,486 14,447
NET INCOME PER SHARE $0.50 $0.52
DILUTED NET INCOME PER SHARE $0.49 $0.51
For The Year
Ended December 31
1997 1996
INTEREST INCOME
Interest and Fees on Loans
Taxable $247,662 $235,153
Tax-Exempt 2,990 2,813
Total 250,652 237,966
Interest on Investment Securities
Taxable 68,798 62,447
Tax-Exempt 12,003 11,076
Total 80,801 73,523
Other Interest Income 1,484 664
Total Interest Income 332,937 312,153
INTEREST EXPENSE
Deposits 128,910 119,865
Short-term Borrowings 23,076 18,276
Long-term Borrowings 1,765 1,144
Total Interest Expense 153,751 139,285
Net Interest Income 179,186 172,868
Provision For Loan Losses 7,381 5,204
Net Interest Income
After Provision For Loan Losses 171,805 167,664
OTHER INCOME
Trust Department Income 10,228 9,322
Service Charges on Deposit Accounts 15,043 14,572
Real Estate Loan Processing &
Servicing Fees 5,642 5,642
Other Service Charges and Fees 10,732 8,078
Other Operating Income 4,808 3,591
Securities Transactions 709 (413)
Total Other Income 47,162 40,792
OTHER EXPENSES
Salaries and Employee Benefits 66,702 64,631
Occupancy Expense - Net 7,073 6,887
Equipment Expenses 8,803 9,137
Federal Deposit Insurance 808 4,917
Outside Data Processing 8,264 5,692
Other Operating Expenses 40,699 37,151
Total Other Expenses 132,349 128,415
Income Before Taxes 86,618 80,041
Applicable Income Taxes 29,254 26,886
NET INCOME $57,364 $53,155
NET INCOME PER SHARE $2.10 $1.94
DILUTED NET INCOME PER SHARE $2.07 $1.92
<PAGE>
ONE VALLEY BANCORP, INC. AND SUBSIDIARIES
Analysis of Loan Losses and Non-Performing Assets
(unaudited in thousands)
For The Three Months
Ended December 31
1997 1996
ALLOWANCE FOR LOAN LOSSES
Balance, Beginning of Period $41,790 $41,709
Loan Losses 2,681 1,966
Loan Recoveries 487 634
Net Charge-offs 2,194 1,332
Balance of Acquired
Subsidiary 0 0
Provision For Loan Losses 2,090 1,368
Balance, End of Period $41,686 $41,745
For The Year
Ended December 31
1997 1996
ALLOWANCE FOR LOAN LOSSES
Balance, Beginning of Period $41,745 $39,534
Loan Losses 9,737 7,038
Loan Recoveries 2,297 1,819
Net Charge-offs 7,440 5,219
Balance of Acquired
Subsidiary 0 2,226
Provision For Loan Losses 7,381 5,204
Balance, End of Period $41,686 $41,745
Total Loans, End of Period $2,968,678 $2,810,212
Allowance For Loan Losses
As a % of Total Loans 1.40 1.49
NON-PERFORMING ASSETS AT QUARTER END
Non-Accrual Loans $7,418 $8,528
Foreclosed Properties 1,808 1,791
Total Non-Performing Assets $9,226 $10,319
Non-Performing Assets
As a % of Total Loans 0.31 0.37
Loans Past Due Over 90 Day $5,641 $4,273
Loans Past Due Over 90 Days
As a % of Total Loans 0.19 0.15
<PAGE>
ONE VALLEY BANCORP, INC. AND SUBSIDIARIES
Consolidated Average Balance Sheets
(unaudited in thousands)
Three Months Ended December 31
1997 1996
Amount Yield Amount Yield
/Rate /Rate
(pct.) (pct.)
ASSETS
Loans
Taxable $2,872,272 8.82 $2,751,331 8.80
Tax-Exempt 45,235 9.94 47,091 9.99
Total 2,917,507 8.82 2,798,422 8.82
Less: Allowance for Losses 42,123 41,872
Net Loans 2,875,384 8.95 2,756,550 8.95
Securities
Taxable 1,055,741 6.58 974,483 6.69
Tax-Exempt 228,173 8.13 204,846 8.29
Total 1,283,914 6.86 1,179,329 6.96
Federal Funds Sold & Other 29,561 5.74 23,611 4.65
Total Earning Assets 4,188,859 8.30 3,959,490 8.34
Other Assets 295,779 286,175
Total Assets $4,484,638 $4,245,665
LIABILITIES AND EQUITY
Interest Bearing Liabilities
Deposits $3,052,980 4.28 $2,987,230 4.20
Short-term Borrowings 513,553 5.10 398,408 4.79
Long-term Borrowings 27,800 6.14 14,672 6.10
Total Interest
Bearing Liabilities 3,594,333 4.41 3,400,310 4.28
Non-interest Bearing Deposits 422,491 391,417
Other Liabilities 44,885 46,325
Total Liabilities 4,061,709 3,838,052
Shareholders' Equity 422,929 407,613
Total Liabilities & Equity $4,484,638 $4,245,665
Interest Income To Earning Assets 8.30 8.34
Interest Expense To Earning Assets 3.79 3.68
Net Interest Margin 4.51 4.66
Year Ended December 31
1997 1996
Amount Yield Amount Yield
/Rate /Rate
(pct.) (pct.)
ASSETS
Loans
Taxable $2,805,019 8.83 $2,650,425 8.87
Tax-Exempt 46,208 9.95 43,740 9.89
Total 2,851,227 8.85 2,694,165 8.89
Less: Allowance for Losses 41,975 41,348
Net Loans 2,809,252 8.98 2,652,817 9.03
Securities
Taxable 1,035,664 6.64 948,239 6.59
Tax-Exempt 226,223 8.16 204,742 8.32
Total 1,261,887 6.92 1,152,981 6.89
Federal Funds Sold & Other 30,140 4.92 16,813 3.95
Total Earning Assets 4,101,279 8.31 3,822,611 8.36
Other Assets 285,786 281,909
Total Assets $4,387,065 $4,104,520
LIABILITIES AND EQUITY
Interest Bearing Liabilities
Deposits $3,028,238 4.26 $2,886,158 4.15
Short-term Borrowings 461,725 5.00 386,197 4.79
Long-term Borrowings 28,610 6.17 15,226 6.11
Total Interest
Bearing Liabilities 3,518,573 4.37 3,287,581 4.24
Non-interest Bearing Deposits 410,203 384,817
Other Liabilities 45,063 42,417
Total Liabilities 3,973,839 3,714,815
Shareholders' Equity 413,226 389,705
Total Liabilities & Equity $4,387,065 $4,104,520
Interest Income To Earning Assets 8.31 8.36
Interest Expense To Earning Assets 3.75 3.64
Net Interest Margin 4.56 4.72
Note: Yields are computed on a fully taxable equivalent
basis using the rate of 35%.
<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.
One Valley Bancorp, Inc.
DATE: January 21, 1998
BY /s/ Laurance G. Jones
Laurance G. Jones
Executive Vice President &
Chief Financial Officer
