<PAGE>
PROSPECTUS SUPPLEMENT [Alternate Cover Page]
(TO PROSPECTUS DATED NOVEMBER 24, 1995)
$300,000,000
NATIONSBANK(Register mark)
6 1/2% SUBORDINATED NOTES, DUE 2006
Interest on the 6 1/2% Subordinated Notes, due 2006 (the "Notes") will be
payable by NationsBank Corporation ("NationsBank" or the "Corporation")
semiannually on March 15 and September 15, commencing September 15, 1996. The
Notes will mature on March 15, 2006 and are not redeemable prior to maturity.
The Notes are subordinated in right of payment to all existing or future Senior
Indebtedness (as defined herein) of the Corporation. The Notes will not be
listed on a securities exchange.
The Notes will be issued in book-entry only form and will be represented by
one or more global securities (the "Global Notes") registered in the name of The
Depository Trust Company, as depositary ("DTC"), or its nominee. Except as
described herein, the Notes will not be issued in definitive form. The Notes
will be available for purchase in denominations of $1,000 and integral multiples
thereof. Settlement of the Notes will be made in immediately available funds. So
long as the Notes are represented by Global Notes registered in the name of DTC,
the Notes will trade in DTC's Same-Day Funds Settlement System and secondary
market trading activity in the Notes will therefore settle in immediately
available funds.
THESE SECURITIES ARE NOT SAVINGS ACCOUNTS OR DEPOSITS, ARE NOT OBLIGATIONS OF
OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF THE CORPORATION,
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY
OTHER GOVERNMENT AGENCY, AND INVOLVE INVESTMENT RISKS, INCLUDING
POSSIBLE LOSS OF PRINCIPAL.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH
CAROLINA (THE "COMMISSIONER") OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION, THE COMMISSIONER OR ANY
STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
THIS PROSPECTUS SUPPLEMENT IS TO BE USED BY NATIONSBANC CAPITAL MARKETS, INC.
("NCMI"), A BROKER-DEALER AND A DIRECT WHOLLY-OWNED SUBSIDIARY OF
NATIONSBANK, IN CONNECTION WITH OFFERS AND SALES RELATED TO
SECONDARY MARKET TRANSACTIONS IN THE NOTES. NCMI OR ITS AFFILIATES
MAY ACT AS PRINCIPAL OR AGENT IN SUCH TRANSACTIONS. ANY SUCH
SALES WILL BE MADE AT NEGOTIATED PRICES RELATING TO PREVAILING
MARKET PRICES AT THE TIME OF SALE OR OTHERWISE.
NATIONSBANC CAPITAL MARKETS, INC.
The date of this Prospectus Supplement is March 5, 1996.
<PAGE>
[Alternate Page S-2]
DESCRIPTION OF THE NOTES
The information herein concerning the Notes should be read in conjunction
with the statements under "Description of Debt Securities" in the accompanying
Prospectus.
GENERAL
The Notes will be issued in the aggregate principal amount of $300,000,000
under an Indenture dated as of January 1, 1995 between the Corporation and The
Bank of New York, Trustee (the "Indenture") as set forth in the Prospectus. The
Notes will be available for purchase in denominations of $1,000 and integral
multiples thereof. The Notes constitute a single series of debt securities under
the Indenture, unsecured, subordinate and junior in right of payment to all
Senior Indebtedness (as defined in the Indenture and in the Prospectus) of the
Corporation. The Notes will bear interest from March 11, 1996 at the annual rate
specified on the cover page of this Prospectus Supplement. Interest on the Notes
will be payable semiannually in arrears on each March 15 and September 15,
commencing September 15, 1996.
There is no right of acceleration of the payment of principal of the Notes
upon a default in the payment of principal of or interest on such Notes or in
the performance of any covenant of the Corporation contained in the Indenture.
Payment of the principal of the Notes may be accelerated only in the case of the
bankruptcy of the Corporation. See "DESCRIPTION OF DEBT SECURITIES -- Defaults
and Rights of Acceleration" in the accompanying Prospectus.
If any interest payment date falls on a day that is not a Business Day,
payment of such interest may be made on the next succeeding Business Day. If the
maturity date of the Notes falls on a day that is not a Business Day, the
payment of principal will be made on the next succeeding Business Day as if it
were made on the date such payment was due and no interest will accrue for the
period after the stated maturity date. The term "Business Day" with respect to
any Notes means any day other than a Saturday or Sunday that is not a day on
which banking institutions in New York, New York, or Charlotte, North Carolina
are generally authorized or required by law or regulation to be closed.
Initially, the Corporation will make payments of principal and interest at the
office of The Bank of New York, 101 Barclay Street, New York, New York 10286, as
authenticating and paying agent. The Notes will mature on March 15, 2006 and are
not redeemable prior to maturity. No sinking fund is provided for the Notes.
There is no limitation in the Indenture on the amount of Senior Indebtedness or
other obligations which may be issued by the Corporation.
SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in immediately
available funds. So long as the Notes are represented by Global Notes, all
payments of principal and interest will be made by the Corporation in
immediately available funds.
Secondary trading in notes and debentures of corporate issuers is generally
settled in clearing house or next day funds. In contrast, so long as the Notes
are represented by Global Notes registered in the name of DTC or its nominee,
the Notes will trade in DTC's Same-Day Funds Settlement System and secondary
market trading activity in the Notes will therefore be required by DTC to settle
in immediately available funds. No assurance can be given as to the effect, if
any, of settlement in immediately available funds on trading activity in the
Notes.
BOOK-ENTRY SYSTEM
The Notes will be issued in book-entry form only and will be represented by
one or more Global Notes registered in the name of Cede & Co., as nominee of
DTC.
S-2
<PAGE>
Under the book-entry system of DTC, purchases of the Notes must be made by
or through persons that have accounts with DTC ("Participants") or persons that
may hold interests through Participants ("Indirect Participants"). Upon the
issuance of a Global Note, DTC will credit, on its book-entry registration and
transfer system, the respective principal amounts of the individual Notes
represented by such Global Note to the accounts of Participants as designated by
the Underwriters. The ownership of beneficial interests in such Global Note will
be shown on, and the transfer of that ownership will be effected only through,
records maintained by DTC (with respect to interests of Participants), records
of Participants (with respect to interests of Indirect Participants) and the
records of Indirect Participants. So long as DTC, or its nominee, is the
registered holder of a Global Note, DTC or its nominee will be considered the
sole owner or holder of the Notes represented by such Global Note for all
purposes under the Indenture. Except as provided below, owners of beneficial
interests in a Global Note will not be entitled to have Notes that are
represented by such Global Note registered in their names, will not receive or
be entitled to receive physical delivery of such Notes in certificated form and
will not be considered the owners or holders thereof under the Indenture. The
laws of some states require that certain purchasers of securities take physical
delivery of such securities in certificated form. Such transfer restrictions and
such laws may impair the ability to own, transfer or pledge beneficial interests
in a Global Note.
DTC has advised the Corporation as follows: DTC is a limited-purpose trust
company organized under New York law, a "banking organization" within the
meaning of New York law, a member of the Federal Reserve System, a "clearing
corporation" within the meaning of the Uniform Commercial Code as in effect in
the State of New York and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934, as amended.
DTC was created to hold securities deposited by its Participants and to
facilitate the clearance and settlement of securities transactions among
Participants in such securities through electronic computerized book-entry
changes in accounts of the Participants, thereby eliminating the need for
physical movement of securities certificates. DTC's direct Participants include
securities brokers and dealers (including the Underwriters), banks (including
certain subsidiaries of the Corporation), trust companies, clearing corporations
and certain other organizations, some of whom (and/or their representatives)
have ownership interests in DTC. DTC is owned by a number of its Participants
and by the New York Stock Exchange, Inc., the American Stock Exchange, Inc. and
the National Association of Securities Dealers, Inc. (the "NASD"). Indirect
access to DTC's book-entry system is also available to Indirect Participants,
such as banks, brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Participant, either directly or
indirectly. The rules applicable to DTC and its Participants are on file with
the Securities and Exchange Commission.
To facilitate subsequent transfers, all securities deposited with DTC are
registered in the name of its partnership nominee, Cede & Co. The deposit of
securities with DTC and their registration in the name of Cede & Co. effect no
change in beneficial ownership. DTC has no knowledge of the actual beneficial
owners of securities deposited with it such as the Notes; DTC's records reflect
only the identity of the Participants to whose accounts such securities are
credited, which may or may not be the beneficial owners. The Participants will
remain responsible for keeping account of their holdings on behalf of their
customers. Conveyance of notices and other communications by DTC to
Participants, by Participants to Indirect Participants, and by Participants and
Indirect Participants to beneficial owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time. Neither DTC nor Cede & Co. will consent or vote with
respect to securities held by DTC. Under its usual procedures, DTC mails an
omnibus proxy to an issuer as soon as possible after the record date. The
omnibus proxy assigns Cede & Co.'s consenting or voting rights to those
Participants to whose accounts the securities are credited on the record date
(identified in a listing attached to the omnibus proxy).
DTC can act only on behalf of Participants, who in turn act on behalf of
Indirect Participants. Owners of beneficial interests in a Global Note that are
not Participants or Indirect Participants but desire to purchase, sell or
otherwise transfer ownership of such interests may do so only through
Participants and Indirect Participants. In addition, the ability of owners of
beneficial interests in a Global Note to pledge such interests to persons or
entities that do not participate in the DTC system may be limited due to the
lack of certificates for the Notes. Currently, DTC may transmit and receive
payments only in U.S. dollars.
S-3
<PAGE>
Except as otherwise provided herein, the holder of a Global Note shall be
the only person entitled to receive payments with respect to the Notes
represented by such Global Note. Accordingly, payments of principal of and any
interest on individual Notes represented by a Global Note will be made only to
DTC or its nominee, as the case may be, as the registered holder of the Global
Note representing such Notes. DTC has advised the Corporation that it is DTC's
practice to credit Participants' accounts on the payable date in accordance with
their respective holdings with respect to a Global Note as shown on DTC's
records, unless DTC has reason to believe that it will not receive payment on
such date. Payments by Participants to beneficial owners are governed by
standing instructions and customary practices, as is the case with securities
held in "street name." Such instructions will be the responsibility of such
Participant and not of DTC, the Underwriters or the Corporation, subject to any
statutory or regulatory requirements as may be in effect from time to time. The
Corporation will in every case be discharged by payment to, or to the order of,
DTC or its nominee, as the holder of such Global Note, of the amount so paid.
Each of the persons shown in the records of DTC or its nominee as an owner of a
beneficial interest therein must look solely to DTC or its nominee, as the case
may be, for its share of any such payment so made by the Corporation. Neither
the Corporation, the Trustee for the Notes, nor any Paying Agent, Security
Registrar or Transfer Agent for the Notes will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of owners of beneficial interests in a Global Note or for maintaining,
supervising or reviewing any records relating to such beneficial interests.
Although DTC has agreed to the foregoing procedures in order to facilitate
transfers of beneficial interests in Global Notes among its Participants, it is
under no obligation to perform or continue to perform such procedures, and such
procedures may be discontinued at any time.
If DTC is at any time unwilling, unable or ineligible to continue as a
depositary and a successor depositary is not appointed by the Corporation within
90 days, the Corporation will issue registered Notes in certificated form in
exchange for beneficial interests in each Global Note. In addition, the
Corporation may at any time determine not to have the Notes represented by
Global Notes and, in such event, will issue registered Notes in certificated
form in exchange for beneficial interests in Global Notes. In any such instance,
an owner of a beneficial interest in a Global Note will be entitled to physical
delivery in certificated form of a Note or the Notes equal in principal amount
to such beneficial interest and to have such Note or the Notes registered in its
name. Any Notes so issued in certificated form will be issued in denominations
of $1,000 or any integral multiple in excess thereof and will be issued in
registered form only, without coupons.
S-4
<PAGE>
CAPITALIZATION
The following table sets forth the actual capitalization of the Corporation
as of September 30, 1995 and as adjusted to give effect to (i) the issuance of
the Notes offered hereby; (ii) the issuance on October 23, 1995 of the
Corporation's 7 1/4% notes, due 2025; (iii) the issuance on October 31, 1995 of
Main Place Funding Corporation's Mortgage-Backed Bonds, Series 1995-2, due 2000;
(iv) the maturity of the Corporation's 5 3/8% notes, due 1995; (v) the
redemption of the Floating rate collateralized financing, due 1995-1996; (vi)
the addition of certain other senior notes and subordinated notes in connection
with the acquisitions of Bank South Corporation and CSF Holdings, Inc.; (vii)
the issuance and maturity of certain of the Corporation's banking subsidiaries'
notes during the period beginning October 1, 1995 through the date of this
Prospectus Supplement; and (viii) the issuance of the Corporation's medium-term
notes during the period beginning October 1, 1995 through the date of this
Prospectus Supplement.
<TABLE>
<CAPTION>
NATIONSBANK AS
ACTUAL ADJUSTED
<S> <C> <C>
(AMOUNTS IN MILLIONS)
<CAPTION>
<S> <C> <C>
LONG-TERM DEBT
SENIOR DEBT:
NationsBank Corporation (parent):
Floating rate medium-term notes, due 1996-2004.................................................. $ 2,631 $ 3,303
4.55 to 8.20% medium-term notes, due 1996-2001.................................................. 481 962
5 3/8% notes, due 1995.......................................................................... 400 --
4 3/4% notes, due 1996.......................................................................... 400 400
8 1/2% notes, due 1996.......................................................................... 150 150
5.51% ESOP secured notes, due 1996-1999......................................................... 125 125
7 1/2% notes, due 1997.......................................................................... 250 250
5 1/8% notes, due 1998.......................................................................... 300 300
6 5/8% notes, due 1998.......................................................................... 399 399
Floating rate notes, due 1998................................................................... 300 300
5 3/8% notes, due 2000.......................................................................... 397 397
Floating rate notes, due 2000................................................................... 500 500
Floating rate notes, due 2001................................................................... 200 200
9 1/4% unsecured notes, due 2006................................................................ 124 124
Other senior notes.............................................................................. 45 45
6,702 7,455
Subsidiaries (1):
Floating rate collateralized financing, due 1995-1996........................................... 246 --
7.70% mortgage note, due 1996................................................................... 234 234
Bank notes with maturities greater than one year, due 1996-2000................................. 1,642 2,099
Floating rate mortgage-backed bonds, due 1998-2000.............................................. 1,500 3,000
Asset-backed certificates....................................................................... 1,133 1,133
Other senior notes.............................................................................. 81 266
4,836 6,732
Total senior debt............................................................................. 11,538 14,187
</TABLE>
S-5
<PAGE>
<TABLE>
<CAPTION>
NATIONSBANK AS
ACTUAL ADJUSTED
(AMOUNTS IN MILLIONS)
<S> <C> <C>
SUBORDINATED DEBT:
NationsBank Corporation (parent):
9 3/8% notes, due 1997.......................................................................... 75 75
9 3/4% notes, due 1999.......................................................................... 100 100
10 1/2% notes, due 1999......................................................................... 299 299
9 1/8% notes, due 2001.......................................................................... 299 299
8 1/8% notes, due 2002.......................................................................... 349 349
6.20% to 7.20% medium-term notes, due 2003 through 2011......................................... 100 300
6 1/2% notes, due 2003.......................................................................... 600 600
7 3/4% notes, due 2004.......................................................................... 299 299
6 7/8% notes, due 2005.......................................................................... 399 399
7 5/8% notes, due 2005.......................................................................... 296 296
6 1/2% notes, due 2006.......................................................................... -- 298
9 3/8% notes, due 2009.......................................................................... 397 397
10.20% notes, due 2015.......................................................................... 200 200
7 3/4% notes, due 2015.......................................................................... 350 350
8.57% medium-term notes, due 2024, putable 2004................................................. 100 100
7 1/4% notes, due 2025.......................................................................... -- 443
Other subordinated notes........................................................................ 10 53
3,873 4,857
Subsidiaries (1):
9 1/2% notes, due 2004.......................................................................... 300 300
Other subordinated notes........................................................................ 8 35
308 335
Total subordinated debt....................................................................... 4,181 5,192
Total long-term debt.......................................................................... 15,719 19,379
SHAREHOLDERS' EQUITY
Preferred stock, authorized -- 45,000,000 shares; ESOP Convertible, Series C, issued --
2,518,153....................................................................................... 107 107
Common stock, authorized -- 800,000,000 shares; issued -- 270,544,137 (2)......................... 4,388 4,388
Retained earnings................................................................................. 7,476 7,476
Other, including loan to ESOP trust............................................................... (30) (30 )
Total shareholders' equity.................................................................... 11,941 11,941
$27,660 $31,320
</TABLE>
(1) These obligations are direct obligations of certain of the subsidiaries of
NationsBank and, as such, constitute claims against such subsidiaries prior
to the Corporation's equity interest therein.
(2) As of September 30, 1995, (a) 13.9 million shares of Common Stock were
reserved for issuance under various employee benefit plans of the
Corporation and upon the conversion of the ESOP Convertible Preferred Stock,
Series C, (b) 2.8 million shares of Common Stock were reserved for issuance
under the Corporation's Dividend Reinvestment and Stock Purchase Plan and
(c) 34.7 million shares of Common Stock were reserved for issuance in
connection with pending acquisitions. In addition, the Board of Directors
has authorized the repurchase in the open market from time to time of Common
Stock representing the number of shares of Common Stock the Corporation
intends to issue for its Dividend Reinvestment and Stock Purchase Plan and
other employee benefit plans, acquisitions and other purposes.
As of September 30, 1995, the Corporation had $2.6 billion of commercial
paper and other short-term notes payable outstanding. During the nine months
ended September 30, 1995, the amount of commercial paper and other short-term
notes payable outstanding averaged $2.6 billion and ranged from a high of $2.8
billion to a low of $2.3 billion. At September 30, 1995, the Corporation had
unused lines of credit aggregating $1.5 billion, principally to support
commercial paper borrowings.
RATIOS OF EARNINGS TO FIXED CHARGES
The following are the consolidated ratios of earnings to fixed charges for
the nine months ended September 30, 1995 and for each of the years in the
five-year period ended December 31, 1994:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED
SEPTEMBER 30, 1995 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits................................. 1.6 1.9 2.3 2.4 1.1 1.3
Including interest on deposits................................. 1.4 1.5 1.5 1.4 1.0 1.1
</TABLE>
S-6
<PAGE>
RECENT FINANCIAL INFORMATION
NationsBank had net income for 1995 of $1.95 billion, a 15% increase over
1994 net income of $1.69 billion. Earnings per share of common stock for 1995
were $7.13, compared to $6.12 per share in 1994.
For the fourth quarter of 1995, net income was $510 million, or $1.87 per
share, as compared to $405 million, or $1.46 per share, in the fourth quarter of
1994.
Taxable-equivalent net interest income increased 5% in 1995 to $5.6 billion.
The net interest yield in 1995 was 3.33%, compared to 3.58% in 1994. The decline
in net interest yield reflected a narrowing of the spread between investment
securities and market-based funds and higher trading asset levels of the
Corporation's primary government securities dealer.
Noninterest income was $3.1 billion in 1995, compared to $2.6 billion in
1994. Strong capital markets revenues, service fees and mortgage servicing fees
drove the year over year increase.
Noninterest expense was $5.2 billion in 1995, compared to $4.9 billion in
1994. Excluding the impact of acquisitions, noninterest expense increased only
3%, reflecting additional investment in personnel in selected areas, expanded
marketing efforts to support revenue growth and increased expenditures related
to technology initiatives, partially offset by reduced deposit insurance
expense.
The provision for credit losses increased to $382 million in 1995, compared
to $310 million in 1994.
Net charge-offs were $421 million in 1995, or .38% of average net loans,
leases and factored accounts receivable, compared to $316 million, or .33% of
average levels in 1994. The allowance for credit losses was $2.2 billion at
December 31, 1995, or 1.85% of net loans, leases and factored accounts
receivable. The allowance represented 306% of nonperforming loans at December
31, 1995.
Total nonperforming assets were $853 million on December 31, 1995, or .73%
of net loans, leases and factored accounts receivable and other real estate
owned, compared to $1.1 billion on December 31, 1994, or 1.10% of net levels.
Average loans and leases were $109 billion in 1995, a 15% increase over
1994, driven by increases in consumer loans, primarily residential mortgage and
credit card loans, and in commercial loans.
Average deposits in 1995 were $99.3 billion, compared to $93.7 billion in
1994.
On December 31, 1995, total earning assets were $168 billion, of which net
loans and leases were $116 billion and securities were $24 billion.
Total shareholders' equity was $12.8 billion at December 31, 1995, or 6.83%
of total assets. Return on common shareholder equity was 17.01% in 1995,
compared to 16.10% in 1994. Strong revenue growth outpaced expense growth by a
wide margin, improving the efficiency ratio in 1995 to 59.8%, a 277 basis point
progression from 62.5% in 1994.
At December 31, 1995, the Corporation's Tier 1 and total risk-based capital
ratios were 7.24% and 11.58%, respectively. The Corporation's leverage ratio was
6.27% at December 31, 1995. The Corporation and its subsidiaries had issued and
outstanding $13.0 billion of senior debt instruments and $4.8 billion of
subordinated debt instruments at December 31, 1995.
S-7
<PAGE>
SELECTED FINANCIAL DATA
The following selected financial data for the five years ended December 31,
1994 are derived from financial statements of the Corporation audited by Price
Waterhouse LLP, independent accountants. The financial data for the nine months
ended September 30, 1995 and 1994 are derived from unaudited financial
statements. The unaudited financial statements include all adjustments,
consisting only of normal recurring accruals, that the Corporation considers
necessary for a fair presentation of its financial position and the results of
its operations as of such dates and for such periods. Results for the nine
months ended September 30, 1995 are not neccessarily indicative of the results
that might be expected for any other interim period or for the year as a whole.
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30, YEAR ENDED
DECEMBER 31,
1995 1994 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
(AMOUNTS IN MILLIONS EXCEPT PER SHARE INFORMATION AND RATIOS)
Income statement:
Income from earning assets................................. $ 9,859 $ 7,611 $ 10,529 $ 8,327 $ 7,780 $ 9,398
Interest expense........................................... 5,825 3,700 5,318 3,690 3,682 5,599
Net interest income........................................ 4,034 3,911 5,211 4,637 4,098 3,799
Provision for credit losses................................ 240 240 310 430 715 1,582
Gains (losses) on sales of securities...................... 8 15 (13) 84 249 454
Noninterest income......................................... 2,232 1,958 2,597 2,101 1,913 1,742
Restructuring expense...................................... -- -- -- 30 -- 330
Noninterest expense (including OREO expense)............... 3,831 3,677 4,930 4,371 4,149 3,974
Income before income taxes and effect of change in method
of accounting for income taxes........................... 2,203 1,967 2,555 1,991 1,396 109
Income tax expense (benefit)............................... 763 682 865 690 251 (93)
Income before effect of change in method of accounting for
income taxes............................................. 1,440 1,285 1,690 1,301 1,145 202
Effect of change in method of accounting for income
taxes.................................................... -- -- -- 200 -- --
Net income................................................. 1,440 1,285 1,690 1,501 1,145 202
Net income applicable to common shareholders............... 1,434 1,277 1,680 1,491 1,121 171
Per common share:
Earnings before effect of change in method of accounting
for income taxes......................................... 5.26 4.66 6.12 5.00 4.60 .76
Earnings................................................... 5.26 4.66 6.12 5.78 4.60 .76
Cash dividends paid........................................ 1.50 1.38 1.88 1.64 1.51 1.48
Shareholders' equity (period-end).......................... 44.00 38.76 39.70 36.39 30.80 27.03
Balance sheet (period-end):
Total assets............................................... 182,138 170,912 169,604 157,686 118,059 110,319
Loans, leases and factored accounts receivable, net of
unearned income.......................................... 114,601 98,556 103,371 92,007 72,714 69,108
Total deposits............................................. 97,870 96,735 100,470 91,113 82,727 88,075
Long-term debt and obligations under capital leases........ 15,741 7,782 8,488 8,352 3,066 2,876
Common shareholders' equity................................ 11,904 10,679 10,976 9,859 7,793 6,252
Total shareholders' equity................................. 11,941 10,709 11,011 9,979 7,814 6,518
Weighted average common shares outstanding (in thousands).... 272,790 274,292 274,656 257,969 243,748 226,305
Performance ratios:
Return on average assets................................... 1.03% 1.05% 1.02% .97%(1) 1.00% .17%
Return on average common shareholders' equity.............. 17.02 16.61 16.10 15.00(1) 15.83 2.70
Risk-based capital ratios:
Tier 1..................................................... 7.16 7.48 7.43 7.41 7.54 6.38
Total...................................................... 11.23 11.57 11.47 11.73 11.52 10.30
Leverage ratio............................................... 5.96 6.32 6.18 6.00 6.16 5.07
Total equity to total assets................................. 6.56 6.27 6.49 6.33 6.62 5.91
Asset quality ratios:
Allowance for credit losses as a percentage of loans,
leases and factored accounts receivable, net of unearned
income................................................... 1.89 2.23 2.11 2.36 2.00 2.32
Allowance for credit losses as a percentage of
nonperforming loans (period-end)......................... 255.57 255.52 273.07 193.38 103.11 81.82
Net charge-offs as a percentage of average loans, leases
and factored accounts receivable, net of unearned
income................................................... .33 .31 .33 .51 1.25 1.86
Nonperforming assets as a percentage of net loans, leases,
factored accounts receivable and other real estate owned
(period-end)............................................. .90 1.29 1.10 1.92 2.72 4.01
<CAPTION>
1990
<S> <<C>
Income statement:
Income from earning assets................................. $ 10,278
Interest expense........................................... 6,670
Net interest income........................................ 3,608
Provision for credit losses................................ 1,025
Gains (losses) on sales of securities...................... 67
Noninterest income......................................... 1,605
Restructuring expense...................................... 91
Noninterest expense (including OREO expense)............... 3,538
Income before income taxes and effect of change in method
of accounting for income taxes........................... 626
Income tax expense (benefit)............................... 31
Income before effect of change in method of accounting for
income taxes............................................. 595
Effect of change in method of accounting for income
taxes.................................................... --
Net income................................................. 595
Net income applicable to common shareholders............... 559
Per common share:
Earnings before effect of change in method of accounting
for income taxes......................................... 2.61
Earnings................................................... 2.61
Cash dividends paid........................................ 1.42
Shareholders' equity (period-end).......................... 27.30
Balance sheet (period-end):
Total assets............................................... 112,791
Loans, leases and factored accounts receivable, net of
unearned income.......................................... 70,891
Total deposits............................................. 89,065
Long-term debt and obligations under capital leases........ 2,766
Common shareholders' equity................................ 5,898
Total shareholders' equity................................. 6,283
Weighted average common shares outstanding (in thousands).... 213,841
Performance ratios:
Return on average assets................................... .52%
Return on average common shareholders' equity.............. 9.56
Risk-based capital ratios:
Tier 1..................................................... 5.79
Total...................................................... 9.58
Leverage ratio............................................... 4.83
Total equity to total assets................................. 5.57
Asset quality ratios:
Allowance for credit losses as a percentage of loans,
leases and factored accounts receivable, net of unearned
income................................................... 1.86
Allowance for credit losses as a percentage of
nonperforming loans (period-end)......................... 100.46
Net charge-offs as a percentage of average loans, leases
and factored accounts receivable, net of unearned
income................................................... .88
Nonperforming assets as a percentage of net loans, leases,
factored accounts receivable and other real estate owned
(period-end)............................................. 2.32
</TABLE>
(1) In 1993, return on average assets and return on average common shareholders'
equity after the tax benefit from the impact of adopting SFAS 109
(Accounting for Income Taxes) were 1.12% and 17.33%, respectively.
S-8
<PAGE>
[Alternate Page S-9]
UNDERWRITING
This Prospectus Supplement and related Prospectus are to be used by
NationsBanc Capital Markets, Inc. ("NCMI"), a broker-dealer and a direct
wholly-owned subsidiary of NationsBank, in connection with offers and sales of
the Notes in secondary market transactions at negotiated prices relating to
prevailing prices at the time of sale or otherwise. NCMI may act as principal or
agent in such transactions. The participation of NCMI in the offer and sale of
the Notes complies with the requirements of Schedule E to the By-laws of the
NASD regarding underwriting of securities of an affiliate. NCMI will not execute
a transaction in the Notes in a discretionary account without the prior written
specific approval of NCMI's customer. NCMI has no obligation to make a market in
the Notes, and if commenced, may discontinue its market-making activities at any
time without notice, at its sole discretion. Furthermore, NCMI may be required
to discontinue its market-making activities during periods when the Corporation
is seeking to sell certain of its securities or when NCMI, such as by means of
its ownership by the Corporation, learns of material non-public information
relating to the Corporation. NCMI would not be able to recommence its
market-making activities until such sale has been completed or such information
has become publicly available. It is not possible to forecast the impact, if
any, that any such discontinuance may have on the market for the Notes. Although
other broker-dealers may make a market in the Notes from time to time, there can
be no assurance that any other broker-dealer will do so at any time when NCMI
discontinues its market-making activities. In addition, any such broker-dealer
that is engaged in market-making activities may thereafter discontinue such
activities at any time at its sole discretion.
S-9
<PAGE>
[Alternate Cover Page]
PROSPECTUS
NATIONSBANK(Register mark)
Debt Securities
NationsBank Corporation ("NationsBank" or the "Corporation") may offer from
time to time its unsecured debt securities, which may be either senior (the
"Senior Debt Securities") or subordinated (the "Subordinated Debt Securities"
and, together with the Senior Debt Securities, the "Debt Securities").
NationsBank may sell up to $3,000,000,000 in aggregate initial offering price of
Debt Securities (or the U.S. dollar equivalent thereof if any of the Debt
Securities are denominated in a foreign currency or currency unit), which may be
offered, separately or together, in one or more series, in amounts, at prices
and on terms to be determined at the time of sale and set forth in an
accompanying supplement to this Prospectus (a "Prospectus Supplement"). Pursuant
to the terms of the Registration Statement of which this Prospectus constitutes
a part, NationsBank may also offer and sell shares of its preferred stock (the
"Preferred Stock"), which may be represented by depositary shares (the
"Depositary Shares"), and shares of its common stock (the "Common Stock"). Any
such Preferred Stock, Depositary Shares or Common Stock will be offered and
issued pursuant to the terms of a separate Prospectus contained in such
Registration Statement. The aggregate amount of Debt Securities that may be
offered and sold pursuant hereto is subject to reduction as the result of the
sale of any Preferred Stock, Depositary Shares or Common Stock pursuant to such
separate Prospectus.
The Senior Debt Securities will rank equally with all other unsubordinated
and unsecured indebtedness of the Corporation. The Subordinated Debt Securities
will be subordinate in right of payment to all existing and future Senior
Indebtedness (as defined herein) of the Corporation.
The Debt Securities may be denominated in U.S. dollars or in another
currency or currency unit (such as the European Currency Unit), and the
principal of (and premium, if any, on) or interest on the Debt Securities may be
payable in U.S. dollars or such foreign currency or currency unit. The specific
terms of each series of Debt Securities offered pursuant to this Prospectus,
including the specific designation, aggregate principal amount, currency or
currency unit in which the principal and any premium or interest may be payable,
authorized denominations, maturity, any premium, any interest rate (which may be
fixed or variable), any interest payment dates, any optional or mandatory
redemption terms, any sinking fund provisions, any subordination terms, any
terms for conversion (in the event that such series is convertible at the option
of the holder or NationsBank into Preferred Stock, Depositary Shares, Common
Stock or other Debt Securities), the form of such series, any securities
exchange on which such Debt Securities may be listed, and any other terms of
such series of Debt Securities will be set forth in the Prospectus Supplement
relating to such series.
The Debt Securities may be sold (i) through underwriting syndicates
represented by managing underwriters, or by underwriters without a syndicate,
with such underwriters to be designated at the time of sale; (ii) through agents
designated from time to time; or (iii) directly by the Corporation. The names of
any underwriters or agents of NationsBank involved in the sale of the Debt
Securities, the public offering price or purchase price and any commissions or
discounts will be set forth in the applicable Prospectus Supplement or a pricing
supplement thereto. The net proceeds to the Corporation from such sale also will
be set forth in such Prospectus Supplement.
This Prospectus may not be used to consummate sales of Debt Securities
unless accompanied by a Prospectus Supplement.
THESE SECURITIES ARE NOT SAVINGS ACCOUNTS OR BANK DEPOSITS, ARE NOT OBLIGATIONS
OF OR GUARANTEED BY ANY BANKING OR NONBANKING AFFILIATE OF NATIONSBANK, AND
ARE NOT INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION
(THE "FDIC") OR ANY OTHER GOVERNMENT AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH
CAROLINA (THE "COMMISSIONER") OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION, THE COMMISSIONER OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
THIS PROSPECTUS AND RELATED PROSPECTUS SUPPLEMENTS ARE TO BE USED BY NATIONSBANC
CAPITAL MARKETS, INC. ("NCMI"), A BROKER-DEALER AND A DIRECT WHOLLY-OWNED
SUBSIDIARY OF NATIONSBANK, IN CONNECTION WITH OFFERS AND SALES RELATED
TO SECONDARY MARKET TRANSACTIONS IN THE DEBT SECURITIES. NCMI OR ITS
AFFILIATES MAY ACT AS PRINCIPAL OR AGENT IN SUCH TRANSACTIONS.
ANY SUCH SALES WILL BE MADE AT NEGOTIATED PRICES RELATING TO
PREVAILING MARKET PRICES AT THE TIME OF SALE OR
OTHERWISE.
NATIONSBANC CAPITAL MARKETS, INC.
The date of this Prospectus is November 24, 1995.
<PAGE>
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, previously filed by the Corporation with the
Securities and Exchange Commission (the "Commission") pursuant to Section 13 of
the Securities Exchange Act of 1934, as amended (the "1934 Act"), are
incorporated herein by reference:
(a) The Corporation's Annual Report on Form 10-K for the year ended
December 31, 1994;
(b) The Corporation's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1995, June 30, 1995 and September 30, 1995;
(c) The Corporation's Current Reports on Form 8-K filed January 26,
1995, February 21, 1995, March 2, 1995 (two reports on this date), March
21, 1995 (amended by Form 8-K/A Amendment No. 1 filed March 21, 1995),
March 27, 1995, April 24, 1995, April 25, 1995, May 16, 1995, July 10,
1995, July 24, 1995, August 31, 1995, September 20, 1995, October 20, 1995
(two reports on this date) and November 9, 1995.
(d) The description of the Corporation's Common Stock contained in its
registration statement filed pursuant to Section 12 of the 1934 Act, and
any amendment or report filed for the purpose of updating such description,
including the Corporation's Current Report on Form 8-K filed on September
21, 1994.
All reports and any definitive proxy or information statements filed by the
Corporation with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the 1934 Act subsequent to the date of this Prospectus and prior to the
termination of the offering of the Debt Securities offered hereby shall be
deemed to be incorporated by reference in this Prospectus and to be a part
hereof from the date of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
THE CORPORATION WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, ON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON, A
COPY OF ANY OR ALL OF THE DOCUMENTS INCORPORATED HEREIN BY REFERENCE (OTHER THAN
EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE
IN SUCH DOCUMENTS). WRITTEN REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED TO JOHN
E. MACK, SENIOR VICE PRESIDENT AND TREASURER, NATIONSBANK CORPORATION,
NATIONSBANK CORPORATE CENTER, CORPORATE TREASURY DIVISION, CHARLOTTE, NORTH
CAROLINA 28255. TELEPHONE REQUESTS MAY BE DIRECTED TO (704) 386-5972.
AVAILABLE INFORMATION
NationsBank is subject to the informational requirements of the 1934 Act
and, in accordance therewith, files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information can be inspected and copied at the following public reference
facilities maintained by the Commission: 450 Fifth Street, N.W., Washington,
D.C. 20549; 7 World Trade Center, Suite 1300, New York, New York 10048; and the
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such material may also be obtained by mail from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, upon payment of prescribed rates. In addition, reports,
proxy statements and other information concerning NationsBank may be inspected
at the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York,
New York 10005 and at the offices of The Pacific Stock Exchange Incorporated,
301 Pine Street, San Francisco, California 94104.
2
<PAGE>
NATIONSBANK CORPORATION
GENERAL
NationsBank is a bank holding company established as a North Carolina
corporation in 1968 and is registered under the Bank Holding Company Act of
1956, as amended (the "BHCA"), with its principal assets being the stock of its
subsidiaries. Through its national banking association subsidiaries (the
"Banks") and its various non-banking subsidiaries, NationsBank provides banking
and banking-related services, primarily throughout the Southeast and
Mid-Atlantic states and Texas. The principal executive offices of NationsBank
are located at NationsBank Corporate Center in Charlotte, North Carolina 28255.
Its telephone number is (704) 386-5000.
OPERATIONS
NationsBank provides a diversified range of banking and certain non-banking
financial services and products through its various subsidiaries. NationsBank
manages its activities through three major business units: the General Bank, the
Global Finance unit and the Financial Services unit.
The General Bank provides comprehensive services in the commercial and
retail banking fields, including trust and private banking operations, the
origination and servicing of home mortgage loans, the issuance and servicing of
credit cards (through a Delaware subsidiary) and certain insurance services. The
General Bank also offers full service brokerage services and discount brokerage
services for its customers through subsidiaries of NationsBank. As of September
30, 1995, the General Bank had banking operations in the following jurisdictions
(listed in declining order of total assets, with the approximate number of
banking offices in parentheses): North Carolina and South Carolina (395); Texas
(274); Maryland, Virginia and the District of Columbia (493); Florida (372);
Georgia (187); and Tennessee and Kentucky (100). NationsBank also has a banking
subsidiary in Delaware that issues and services credit cards. The General Bank
also provides fully automated, 24-hour cash dispensing and depositing services
throughout the states in which it is located through approximately 2,200
automated teller machines.
The Global Finance unit provides to domestic and international customers
comprehensive corporate banking and investment banking services, including loan
syndication, treasury management and leasing; underwriting, trading or
distributing a wide range of securities (including bank-eligible securities and,
to a limited extent, bank-ineligible securities as authorized by the Federal
Reserve Board under Section 20 of the Glass-Steagall Act); and options, futures,
forwards and swaps on certain interest rate and commodity products, and spot and
forward foreign exchange contracts. The Global Finance unit provides its
services through various domestic offices as well as offices located in London,
Frankfurt, Singapore, Mexico City, Grand Cayman, Nassau, Tokyo, Osaka, Paris and
Hong Kong. In addition to these offices, the Global Finance unit has loan
production offices located in New York City, Chicago, Los Angeles, Denver and
Birmingham, Alabama.
The Financial Services unit consists of NationsCredit Corporation,
primarily a consumer finance subsidiary, and Greyrock Capital Group Inc.
(formerly named Nations Financial Capital Corporation), primarily a commercial
finance subsidiary. NationsCredit Corporation, which has approximately 300
offices located in 32 states, provides consumer and retail loan programs and
also offers inventory financing to manufacturers, importers and distributors.
Greyrock Capital Group Inc., which has approximately 79 offices located in 24
states, engages in commercial equipment leasing and makes commercial loans for
debt restructuring, merger and acquisition, real estate financing, equipment
acquisition and working capital purposes; it also acquires consumer loans
secured by automobiles and real estate.
As part of its operations, NationsBank regularly evaluates the potential
acquisition of, and holds discussions with, various financial institutions and
other businesses of a type eligible for bank holding company investment. In
addition, NationsBank regularly analyzes the values of, and submits bids for,
the acquisition of customer-based funds and other liabilities and assets of such
financial institutions and other businesses. As a general rule, NationsBank
publicly announces such material acquisitions when a definitive agreement has
been reached.
3
<PAGE>
SUPERVISION AND REGULATION
GENERAL. As a registered bank holding company, NationsBank is subject to
the supervision of, and to regular inspection by, the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board"). The Banks are organized as
national banking associations, which are subject to regulation, supervision and
examination by the Office of the Comptroller of the Currency (the
"Comptroller"). The Banks are also subject to regulation by the Federal Deposit
Insurance Corporation (the "FDIC") and other federal regulatory agencies. In
addition to banking laws, regulations and regulatory agencies, NationsBank and
its subsidiaries and affiliates are subject to various other laws and
regulations and supervision and examination by other regulatory agencies, all of
which directly or indirectly affect the Corporation's operations, management and
ability to make distributions. The following discussion summarizes certain
aspects of those laws and regulations that affect NationsBank.
The activities of NationsBank, and those of companies which it controls or
in which it holds more than 5% of the voting stock, are limited to banking or
managing or controlling banks or furnishing services to or performing services
for its subsidiaries, or any other activity which the Federal Reserve Board
determines to be so closely related to banking or managing or controlling banks
as to be a proper incident thereto. In making such determinations, the Federal
Reserve Board is required to consider whether the performance of such activities
by a bank holding company or its subsidiaries can reasonably be expected to
produce benefits to the public such as greater convenience, increased
competition or gains in efficiency that outweigh possible adverse effects, such
as undue concentration of resources, decreased or unfair competition, conflicts
of interest or unsound banking practices. Generally, bank holding companies,
such as NationsBank, are required to obtain prior approval of the Federal
Reserve Board to engage in any new activity not previously approved by the
Federal Reserve Board or to acquire more than 5% of any class of voting stock of
any company.
Bank holding companies are also required to obtain the prior approval of
the Federal Reserve Board before acquiring more than 5% of any class of voting
stock of any bank which is not already majority-owned by the bank holding
company. Pursuant to the Riegle-Neal Interstate Banking and Branching Efficiency
Act of 1994 (the "Interstate Banking and Branching Act"), a bank holding company
will be able to acquire banks in states other than its home state beginning
September 29, 1995.
The Interstate Banking and Branching Act also authorizes banks to merge
across state lines, therefore creating interstate branches, beginning June 1,
1997. Under such legislation, each state has the opportunity to "opt out" of
this provision, thereby prohibiting interstate branching in such states, or to
"opt in" at an earlier time, thereby allowing interstate branching within that
state prior to June 1, 1997. Furthermore, pursuant to such act, a bank is now
able to open new branches in a state in which it does not already have banking
operations, if the laws of such state permit such DE NOVO branching. Of those
states in which the Banks are located, Maryland, North Carolina and Virginia
have enacted legislation to "opt in," thereby permitting interstate branching
prior to June 1, 1997, and Texas has adopted legislation to "opt out" of the
interstate branching provisions (which Texas law currently expires on September
2, 1999).
As previously described, NationsBank regularly evaluates merger and
acquisition opportunities, and it anticipates that it will continue to evaluate
such opportunities in light of the new legislation.
Proposals to change the laws and regulations governing the banking industry
are frequently introduced in Congress, in the state legislatures and before the
various bank regulatory agencies. In 1995, several bills have been introduced in
Congress that would have the effect of broadening the securities underwriting
powers of bank holding companies and possibly permitting bank holding companies
to engage in nonfinancial activities. The likelihood and timing of any such
proposals or bills being enacted and the impact they might have on NationsBank
and its subsidiaries cannot be determined at this time.
CAPITAL AND OPERATIONAL REQUIREMENTS. The Federal Reserve Board, the
Comptroller and the FDIC have issued substantially similar risk-based and
leverage capital guidelines applicable to United States banking organizations.
In addition, those regulatory agencies may from time to time require that a
banking organization maintain capital above the minimum levels, whether because
of its financial condition or actual or anticipated growth.
The Federal Reserve Board risk-based guidelines define a two-tier capital
framework. Tier 1 capital consists of common and qualifying preferred
shareholders' equity, less certain intangibles and other adjustments.
4
<PAGE>
Tier 2 capital consists of subordinated and other qualifying debt, and the
allowance for credit losses up to 1.25% of risk-weighted assets. The sum of Tier
1 and Tier 2 capital less investments in unconsolidated subsidiaries represents
qualifying total capital, at least 50% of which must consist of Tier 1 capital.
Risk-based capital ratios are calculated by dividing Tier 1 and total capital by
risk-weighted assets. Assets and off-balance sheet exposures are assigned to one
of four categories of risk-weights, based primarily on relative credit risk. The
minimum Tier 1 capital ratio is 4% and the minimum total capital ratio is 8%.
The Corporation's Tier 1 and total risk-based capital ratios under these
guidelines at September 30, 1995 were 7.16% and 11.23%, respectively.
The leverage ratio is determined by dividing Tier 1 capital by adjusted
average total assets. Although the stated minimum ratio is 3%, most banking
organizations are required to maintain ratios of at least 100 to 200 basis
points above 3%. The Corporation's leverage ratio at September 30, 1995 was
5.96%. Management believes that NationsBank meets its leverage ratio
requirement.
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), among other things, identifies five capital categories for insured
depository institutions (well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized) and requires the respective Federal regulatory agencies to
implement systems for "prompt corrective action" for insured depository
institutions that do not meet minimum capital requirements within such
categories. FDICIA imposes progressively more restrictive constraints on
operations, management and capital distributions, depending on the category in
which an institution is classified. Failure to meet the capital guidelines could
also subject a banking institution to capital raising requirements. An
"undercapitalized" bank must develop a capital restoration plan and its parent
holding company must guarantee that bank's compliance with the plan. The
liability of the parent holding company under any such guarantee is limited to
the lesser of 5% of the bank's assets at the time it became "undercapitalized"
or the amount needed to comply with the plan. Furthermore, in the event of the
bankruptcy of the parent holding company, such guarantee would take priority
over the parent's general unsecured creditors. In addition, FDICIA requires the
various regulatory agencies to prescribe certain non-capital standards for
safety and soundness relating generally to operations and management, asset
quality and executive compensation and permits regulatory action against a
financial institution that does not meet such standards.
The various regulatory agencies have adopted substantially similar
regulations that define the five capital categories identified by FDICIA, using
the total risk-based capital, Tier 1 risk-based capital and leverage capital
ratios as the relevant capital measures. Such regulations establish various
degrees of corrective action to be taken when an institution is considered
undercapitalized. Under the regulations, a "well capitalized" institution must
have a Tier 1 capital ratio of at least 6%, a total capital ratio of at least
10% and a leverage ratio of at least 5% and not be subject to a capital
directive order. An "adequately capitalized" institution must have a Tier 1
capital ratio of at least 4%, a total capital ratio of at least 8% and a
leverage ratio of at least 4%, or 3% in some cases. Under these guidelines, each
of the Banks is considered adequately or well capitalized.
Banking agencies have recently adopted final regulations which mandate that
regulators take into consideration concentrations of credit risk and risks from
non-traditional activities, as well as an institution's ability to manage those
risks, when determining the adequacy of an institution's capital. This
evaluation will be made as a part of the institution's regular safety and
soundness examination. Banking agencies also have recently adopted final
regulations requiring regulators to consider interest rate risk (when the
interest rate sensitivity of an institution's assets does not match the
sensitivity of its liabilities or its off-balance-sheet position) in the
evaluation of a bank's capital adequacy. Concurrently, banking agencies have
proposed a methodology for evaluating interest rate risk. After gaining
experience with the proposed measurement process, those banking agencies intend
to propose further regulations to establish an explicit risk-based capital
charge for interest rate risk.
DISTRIBUTIONS. The Corporation's funds for cash distributions to its
shareholders are derived from a variety of sources, including cash and temporary
investments. The primary source of such funds, however, is dividends received
from its banking subsidiaries. The amount of dividends that each Bank may
declare in a calendar year without approval of the Comptroller is the Bank's net
profits for that year, as defined by statute, combined with its net retained
profits, as defined, for the preceding two years. In addition, from time to time
NationsBank applies for, and may receive, permission from the Comptroller for
one or more of the Banks to declare special dividends. In 1995, the Banks can
initiate dividend payments without prior regulatory approval
5
<PAGE>
[Alternate Page 6]
of up to $1.0 billion plus an additional amount equal to their net profits for
1995 up to the date of any such dividend declaration.
In addition to the foregoing, the ability of NationsBank and the Banks to
pay dividends may be affected by the various minimum capital requirements and
the capital and non-capital standards established under FDICIA as described
above. Furthermore, the Comptroller may prohibit the payment of a dividend by a
national bank if it determines that such payment would constitute an unsafe or
unsound practice. The right of NationsBank, its shareholders and its creditors
to participate in any distribution of the assets or earnings of its subsidiaries
is further subject to the prior claims of creditors of the respective
subsidiaries.
SOURCE OF STRENGTH. According to Federal Reserve Board policy, bank holding
companies are expected to act as a source of financial strength to each
subsidiary bank and to commit resources to support each such subsidiary. This
support may be required at times when a bank holding company may not be able to
provide such support. In the event of a loss suffered or anticipated by the
FDIC -- either as a result of default of a banking or thrift subsidiary of
NationsBank or related to FDIC assistance provided to a subsidiary in danger of
default -- the other banking subsidiaries of NationsBank may be assessed for the
FDIC's loss, subject to certain exceptions.
USE OF PROCEEDS
The net proceeds from the sale of the Debt Securities will be used for
general corporate purposes, including the Corporation's working capital needs,
the funding of investments in, or extensions of credit to, its banking and
nonbanking subsidiaries, possible acquisitions of other financial institutions
or their assets or liabilities, possible acquisitions of or investments in other
businesses of a type eligible for bank holding companies and possible reduction
of outstanding indebtedness or repurchase of outstanding equity securities of
the Corporation. Pending such use, the Corporation may temporarily invest the
net proceeds in investment grade securities. The Corporation may, from time to
time, engage in additional capital financings of a character and in amounts to
be determined by the Corporation in light of its needs at such time or times and
in light of prevailing market conditions. If the Corporation elects at the time
of issuance of Debt Securities to make different or more specific use of
proceeds other than that set forth herein, such use will be described in the
applicable Prospectus Supplement.
RATIOS OF EARNINGS TO FIXED CHARGES
The following are the Corporation's consolidated ratios of earnings to
fixed charges for the nine months ended September 30, 1995 and for each of the
years in the five-year period ended December 31, 1994:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1995 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding interest on deposits...................................... 1.6 1.9 2.3 2.4 1.1 1.3
Including interest on deposits...................................... 1.4 1.5 1.5 1.4 1.0 1.1
</TABLE>
For purposes of computing the consolidated ratios, earnings represent net
income of the Corporation plus applicable income taxes and fixed charges, less
capitalized interest and the equity in undistributed earnings of unconsolidated
subsidiaries and associated companies. Fixed charges represent interest expense
(exclusive of interest on deposits in one case and inclusive of such interest in
the other), capitalized interest, amortization of debt discount and appropriate
issuance costs and one-third (the amount deemed to represent an appropriate
interest factor) of net rent expense under all lease commitments.
PLAN OF DISTRIBUTION
This Prospectus is to be used by NationsBanc Capital Markets, Inc.
("NCMI"), a broker-dealer and a direct wholly-owned subsidiary of NationsBank,
in connection with offers and sales of the Debt Securities in secondary market
transactions at negotiated prices relating to prevailing prices at the time of
sale or otherwise. NCMI may act as principal or agent in such transactions. The
participation of NCMI in the offer and sale of the
6
<PAGE>
[Alternate Page 7]
Debt Securities complies with the requirements of Schedule E to the By-laws of
the National Association of Securities Dealers, Inc. (the "NASD") regarding
underwriting of securities of an affiliate. NCMI will not execute a transaction
in the Debt Securities in a discretionary account without the prior written
specific approval of NCMI's customer. NCMI has no obligation to make a market in
the Debt Securities, and may discontinue its market-making activities at any
time without notice, at its sole discretion. Furthermore, NCMI may be required
to discontinue its market-making activities during periods when the Corporation
is seeking to sell certain of its securities or when NCMI, such as by means of
its ownership by the Corporation, learns of material non-public information
relating to the Corporation. NCMI would not be able to recommence its market-
making activities until such sale has been completed or such information has
become publicly available. It is not possible to forecast the impact, if any,
that any such discontinuance may have on the market for the Debt Securities.
While other broker-dealers may make a market in the Debt Securities from time to
time, there can be no assurance that any other broker-dealer will do so at any
time when NCMI discontinues its market-making activities. In addition, any such
broker-dealer that is engaged in market-making activities may thereafter
discontinue such activities at any time at its sole discretion.
DESCRIPTION OF DEBT SECURITIES
THE FOLLOWING DESCRIPTION OF THE TERMS OF THE DEBT SECURITIES SETS FORTH
CERTAIN GENERAL TERMS AND PROVISIONS OF THE DEBT SECURITIES TO WHICH ANY
PROSPECTUS SUPPLEMENT MAY RELATE. THE PARTICULAR TERMS OF THE DEBT SECURITIES
OFFERED BY ANY PROSPECTUS SUPPLEMENT AND THE EXTENT, IF ANY, TO WHICH SUCH
GENERAL PROVISIONS MAY APPLY TO THE DEBT SECURITIES SO OFFERED WILL BE DESCRIBED
IN THE PROSPECTUS SUPPLEMENT RELATING TO SUCH DEBT SECURITIES.
Any Senior Debt Securities offered hereby are to be issued under an
Indenture dated as of January 1, 1995 (such Indenture, as it may be amended from
time to time, the "Senior Indenture") between the Corporation and BankAmerica
National Trust Company, Trustee (the "Senior Trustee"). Any Subordinated Debt
Securities offered hereby are to be issued under an Indenture dated as of
January 1, 1995 (such Indenture, as it may be amended from time to time, the
"Subordinated Indenture") between the Corporation and The Bank of New York,
Trustee (the "Subordinated Trustee" and, together with the Senior Trustee, the
"Trustees"). A copy of the Senior Indenture and the Subordinated Indenture
(each, an "Indenture" and together, the "Indentures") is incorporated by
reference in the Registration Statement of which this Prospectus forms a part.
The following summaries of certain provisions of the Indentures do not
purport to be complete and are subject to and qualified in their entirety by
reference to the provisions of the applicable Indentures. Whenever particular
sections or defined terms of the Indentures are referred to, it is intended that
such sections or defined items shall be incorporated herein by reference. Unless
otherwise indicated, capitalized terms shall have the meanings ascribed to them
in the Indentures.
GENERAL
The respective Indentures provide that there is no limitation on the amount
of debt securities that may be issued thereunder from time to time. The amount
of Debt Securities that may be offered and sold pursuant to this Prospectus,
however, is limited to the aggregate initial offering price of the securities
registered under the Registration Statement of which this Prospectus forms a
part, subject to reduction as the result of the sale by the Corporation of other
securities under the Registration Statement.
The Debt Securities will be direct, unsecured obligations of the
Corporation. The Senior Debt Securities of each series will rank equally with
all unsecured senior debt of the Corporation. The Subordinated Debt Securities
of each series will be subordinate and junior in right of payment to the prior
payment in full of all Senior Indebtedness (as hereinafter defined) of the
Corporation. See "DESCRIPTION OF DEBT SECURITIES -- Subordination."
The Debt Securities will be issued in fully registered form without
coupons. Unless otherwise set forth in the applicable Prospectus Supplement, the
Debt Securities denominated in U.S. dollars will be issued in denominations of
$1,000 or an integral multiple thereof.
The Debt Securities may be denominated in U.S. dollars or in another
currency or currency unit. If any of the Debt Securities are denominated in a
foreign currency or currency unit, or if principal of (or premium, if any) or
any interest on any of the Debt Securities is payable in any foreign currency or
currency unit, the
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authorized denominations, restrictions, tax consequences, specific terms and
other information with respect to such issue of Debt Securities and such foreign
currency or currency unit will be set forth in the Prospectus Supplement
relating thereto.
The Debt Securities may be issued in one or more series with the same or
various maturities. Certain Debt Securities may be issued which provide for an
amount less than the principal amount thereof to be due and payable in the event
of an acceleration of the maturity thereof (each an "Original Issue Discount
Security"). Original Issue Discount Securities may bear no interest or may bear
interest at a rate which at the time of issuance is below market rates and will
be sold at a discount (which may be substantial) below their stated principal
amount. Certain Debt Securities may be deemed to be issued with original issue
discount for United States Federal income tax purposes. The Prospectus
Supplement with respect to any series of Debt Securities issued with such
original issue discount will contain a discussion of Federal income tax
considerations with respect thereto.
The particular terms of each series of Debt Securities to be offered and
sold will be described in the Prospectus Supplement relating to such Debt
Securities, including: (1) the designation of the particular series; (2) the
aggregate principal amount of such series which may be authenticated and
delivered under the applicable Indenture; (3) the person to whom any interest on
any Debt Security of the series shall be payable, if other than the person in
whose name that Debt Security (or one or more predecessor Debt Securities) is
registered at the close of business on the regular record date for such
interest; (4) the date or dates on which the principal of the Debt Securities of
such series is payable; (5) the rate or rates, and if applicable the method used
to determine the rate, at which the Debt Securities of such series shall bear
interest, if any, the date or dates from which such interest shall accrue, the
date or dates on which such interest shall be payable and the record date or
dates for the interest payable on any Debt Securities on any interest payment
date; (6) the place or places at which, subject to the provisions of the
applicable Indenture, the principal of (and premium, if any, on) and any
interest on Debt Securities of such series shall be payable, any Debt Securities
of the series may be surrendered for registration of transfer, and notices and
demands to or upon the Corporation in respect of the Debt Securities of the
series and the Indenture may be served; (7) the obligation, if any, of the
Corporation to redeem or purchase Debt Securities of such series, at the option
of the Corporation or at the option of a holder thereof, pursuant to any sinking
fund or other redemption provisions and the period or periods within which, the
price or prices at which and the terms and conditions upon which Debt Securities
of the series may be so redeemed or purchased, in whole or in part; (8) if other
than denominations of $1,000 and any integral multiple thereof, the
denominations in which any Debt Securities of such series shall be issuable; (9)
if other than the principal amount thereof, the portion of the principal amount
of Debt Securities of such series which shall be payable upon declaration of
acceleration of the maturity thereof; (10) the currency, currencies or currency
units, in which payment of the principal of (and premium, if any, on) and any
interest on any Debt Securities of the series shall be payable if other than the
currency of the United States of America and the manner of determining the
equivalent thereof in the currency of the United States of America for purposes
of the applicable Indenture; (11) if the principal of (and premium, if any, on)
or any interest on the Debt Securities of the series are to be payable, at the
election of the Corporation or a holder thereof, in one or more currencies or
currency units, other than that or those in which the Debt Securities are stated
to be payable, the currency or currencies in which payment of the principal of
(and premium, if any, on) and any interest on Debt Securities of such series as
to which such election is made shall be payable, and the periods within which
and the terms and conditions upon which such election is to be made; (12) if the
amount of payments of principal of (and premium, if any, on) or any interest on
the Debt Securities of the series may be determined with reference to an index,
the manner in which such amounts shall be determined; (13) whether the Debt
Securities will be issued in book-entry only form; (14) the identification or
method of selection of any interest rate calculation agents, exchange rate
calculation agents or other agents with respect to Debt Securities of such
series; (15) if either or both of Section 14.02 (defeasance) or Section 14.03
(covenant defeasance) of the applicable Indenture do not apply to the Debt
Securities of the series; (16) any provisions relating to the extension of
maturity of, or the renewal of, Debt Securities of such series and (17) any
other terms of the Debt Securities of such series (which terms shall not be
inconsistent with the provisions of the applicable Indenture).
The ability of NationsBank to make payments of principal of and premium, if
any, and interest on the Debt Securities may be affected by the ability of the
Banks to pay dividends. The ability of the Banks, as well as of
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the Corporation, to pay dividends in the future currently is, and could be
further, influenced by bank regulatory requirements and capital guidelines. See
"SUPERVISION AND REGULATION."
Neither the Senior Indenture nor the Subordinated Indenture contains
provisions that would provide protection to holders of Debt Securities against a
decline in credit quality resulting from takeovers, recapitalizations, the
incurrence of additional indebtedness or similar restructurings by the
Corporation. If credit quality declines as a result of such an event, or
otherwise, the ratings of any Debt Securities then outstanding may be withdrawn
or downgraded.
CONVERSION
The Debt Securities of any series may be convertible at the option of the
holder or the Corporation, into Preferred Stock, Depositary Shares, Common Stock
or other Debt Securities if the Prospectus Supplement relating to such series of
Debt Securities so provides. In such case, the Prospectus Supplement relating to
such series of Debt Securities will set forth (i) the period(s) during which
such conversion may be elected, (ii) the conversion price payable and the number
of shares or amount of Preferred Stock, Depositary Shares, Common Stock or other
Debt Securities purchaseable upon conversion, and adjustments thereto, if any,
in certain events, (iii) the procedures for electing such conversion and (iv)
all other terms for such conversion (which terms shall not be inconsistent with
the provisions of the applicable Indenture).
EXCHANGE, REGISTRATION AND TRANSFER
At the option of the holder, subject to the terms of the applicable
Indenture, Debt Securities of any series (other than Debt Securities issued in
book-entry form) will be exchangeable for other Debt Securities of the same
series and of an equal aggregate principal amount and tenor of any authorized
denominations.
Debt Securities may be presented for exchange as provided above, and Debt
Securities may be presented for registration of transfer (with the form of
transfer endorsed thereon duly executed), at the office of the Security
Registrar or at the office of any transfer agent of the Corporation designated
and maintained for such purpose with respect to Debt Securities of a series
pursuant to the terms of the applicable Indenture, as referred to in an
applicable Prospectus Supplement. Such transfer or exchange will be effected
upon the Security Registrar or transfer agent, as the case may be, being
satisfied with the documents of title and identity of the person making the
request. No service charge shall be made for any exchange or registration of
transfer of Debt Securities, but the Corporation may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection therewith.
If a Prospectus Supplement refers to any transfer agents (in addition to
the Security Registrar) designated by the Corporation with respect to any series
of Debt Securities, the Corporation may at any time rescind the designation of
any such transfer agent or approve a change in the location through which any
such transfer agent acts, except that the Corporation will be required to
maintain a transfer agent in each place of payment for such series. The
Corporation may at any time designate additional transfer agents with respect to
any series of Debt Securities.
The Corporation shall not be required to (i) issue, exchange, or register
the transfer of any Debt Security of any series to be redeemed for a period of
15 days next preceding any selection of such Debt Securities to be redeemed; or
(ii) exchange or register the transfer of any Debt Security so selected, called
or being called for redemption, except the unredeemed portion of any Debt
Security being redeemed in part.
For a discussion of restrictions on the exchange, registration and transfer
of Book-Entry Securities, see "DESCRIPTION OF DEBT SECURITIES -- Book-Entry
Securities."
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in an applicable Prospectus Supplement,
principal of (and premium, if any, on) and any interest on Debt Securities will
be payable, subject to any applicable laws and regulations, at the offices of
such paying agents as the Corporation may designate from time to time pursuant
to the applicable Indenture, except that, at the option of the Corporation,
payment of any interest may be made by check mailed to the address of the person
entitled thereto as such address shall appear in the Security Register. Unless
otherwise indicated in an applicable Prospectus Supplement, payment of interest
on a Debt Security on any
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interest payment date generally will be made to the person in whose name such
Debt Security is registered at the close of business on the regular record date
for such interest payment date.
The Corporation has designated the principal corporate trust offices of the
Senior Trustee and the Subordinated Trustee in the City of New York as the
places where the Senior Debt Securities and Subordinated Debt Securities,
respectively, may be presented for payment. The Corporation may at any time
designate additional paying agents or rescind the designation of any paying
agent or approve a change in the office through which any paying agent acts. Any
other paying agents designated by the Corporation for the Debt Securities of
each series will be named in an applicable Prospectus Supplement.
BOOK-ENTRY SECURITIES
If so specified in an applicable Prospectus Supplement, all or any portion
of the Debt Securities of a series may be issued in book-entry form represented
by one or more global Debt Securities in registered form ("Book-Entry
Securities") to be deposited with, or on behalf of a depositary (a "Depositary")
identified in the Prospectus Supplement relating to such series, for credit to
the respective accounts of the beneficial owners of such Debt Securities (or to
such other accounts as they may direct). The specific terms of the depositary
arrangement with respect to any such series of Debt Securities will be described
in the Prospectus Supplement relating to such series. Unless otherwise specified
in the applicable Prospectus Supplement, the Corporation anticipates that the
following provisions will apply to all depositary arrangements with a
Depositary.
Upon the issuance of a Book-Entry Security, the Depositary will credit, on
its book-entry registration and transfer system, the respective principal
amounts of the Debt Securities represented by such Book-Entry Security to the
accounts of institutions that have accounts with such depositary or its nominee
("participants"). The accounts to be credited shall be designated by the
underwriters or agents of such Debt Securities or by the Corporation, if such
Debt Securities are offered and sold directly by the Corporation. Ownership of
beneficial interests in such Book-Entry Security will be limited to participants
or persons that may hold interests through participants. Ownership of a
beneficial interest in such a Book-Entry Security will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
the Depositary or its nominee (with respect to participants' interests) for such
Book-Entry Security or by participants or persons that hold through
participants. The laws of some jurisdictions require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to acquire or transfer beneficial
interests in a Book-Entry Security.
So long as the Depositary for a Book-Entry Security, or its nominee, is the
registered owner of such Book-Entry Security, such depositary or such nominee,
as the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Book-Entry Security for all purposes under the
Indenture governing such Debt Securities. Except as set forth below, owners of
beneficial interests in such Book-Entry Security will not be entitled to have
Debt Securities of the series represented by such Book-Entry Security registered
in their names, will not receive or be entitled to receive physical delivery of
Debt Securities of such series in definitive form and will not be considered the
owners or holders thereof under the Indenture. Accordingly, each person owning a
beneficial interest in a Book-Entry Security must rely on the procedures of the
Depositary and, if such person is not a participant, on the procedures of the
participant and, if applicable, the indirect participant, through which such
person owns its interest, to exercise any rights of a holder under the
Indenture.
Payment of principal of (and premium, if any) and any interest on Debt
Securities registered in the name of or held by a Depositary or its nominee will
be made to the Depositary or its nominee, as the case may be, as the registered
owner or the holder of the Book-Entry Security representing such Debt
Securities. None of the Corporation, the Trustee, any paying agent, any
authenticating agent or the Security Registrar for such Debt Securities will
have any responsibility or liability for any aspect of the records relating to
or payments made on account of beneficial ownership interests in a Book-Entry
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
The Corporation expects that the Depositary for Debt Securities of a
series, upon receipt of any payment of principal of (and premium, if any) and
any interest on the Debt Securities represented by such Book-Entry Security,
will credit immediately participants' accounts with payments in amounts
proportionate to their respective holdings in principal amount of beneficial
interest in such Book-Entry Security as shown on the
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records of such Depositary. The Corporation also expects that payments by
participants to owners of beneficial interests in such Book-Entry Security held
through such participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name." Such payments will be
the responsibility of such participants.
Unless and until it is exchanged in whole for Debt Securities in definitive
form, a Book-Entry Security may not be transferred except as a whole by the
Depositary for such Book-Entry Security to a nominee of such depositary or to
another depositary or a nominee for such other depositary. If a Depositary for
Debt Securities is at any time unwilling or unable to continue as depositary and
a successor depositary is not appointed by the Corporation within 90 days, the
Corporation will issue Debt Securities in definitive form in exchange for the
Book-Entry Security or Book-Entry Securities representing all such Debt
Securities. In addition, the Corporation may at any time and in its sole
discretion determine not to have any Debt Securities represented by a Book-Entry
Security and, in such event, will issue such Debt Securities in definitive form
in exchange for the Book-Entry Security or Book-Entry Securities representing
all such Debt Securities. In any such instance, an owner of a beneficial
interest in a Book-Entry Security will be entitled to physical delivery in
definitive form of Debt Securities of the series represented by such Book-Entry
Security equal in principal amount to such beneficial interest and to have such
Debt Securities registered in the name of the owner of such beneficial interest.
SUBORDINATION
The Subordinated Debt Securities are subordinate and subject, to the extent
and in the manner set forth in the Subordinated Indenture, in right of payment
to the prior payment in full of all Senior Indebtedness of the Corporation.
"Senior Indebtedness" is defined by the Subordinated Indenture as any
indebtedness for money borrowed (including all indebtedness of the Corporation
for borrowed and purchased money of the Corporation, all obligations of the
Corporation arising from off-balance sheet guarantees by the Corporation and
direct credit substitutes, and obligations of the Corporation associated with
derivative products such as interest and foreign exchange rate contracts and
commodity contracts) that is outstanding on the date of execution of the
Subordinated Indenture, or is thereafter created, incurred or assumed, for the
payment of which the Corporation is at the time of determination responsible or
liable as obligor, guarantor or otherwise, and all deferrals, renewals,
extensions and refundings of any such indebtedness or obligations, other than
the Subordinated Debt Securities or any other indebtedness as to which, in the
instrument creating or evidencing the same or pursuant to which the same is
outstanding, it is provided that such indebtedness is subordinate in right of
payment to any other indebtedness of the Corporation. The Prospectus Supplement
relating to each series of Subordinated Debt Securities will set forth the
aggregate amount of then outstanding Senior Indebtedness of the Corporation and
any limitation on the issuance of additional Senior Indebtedness.
No payment on account of principal of (and premium, if any, on) or
interest, if any, on the Subordinated Debt Securities shall be made, and no
Subordinated Debt Securities shall be purchased, either directly or indirectly,
by the Corporation or any of its subsidiaries, if any default or event of
default with respect to any Senior Indebtedness shall have occurred and be
continuing and the Corporation and the Subordinated Trustee shall have received
written notice thereof from the holders of at least 10 percent in principal
amount of any kind or category of any Senior Indebtedness (or the representative
or representatives of such holders) or the Subordinated Trustee shall have
received written notice thereof from the Corporation.
In the event that any Subordinated Debt Security is declared due and
payable before the date specified therein as the fixed date on which the
principal thereof is due and payable pursuant to the Subordinated Indenture, or
upon any payment or distribution of assets of the Corporation of any kind or
character to creditors upon any dissolution or winding up or total or partial
liquidation or reorganization of the Corporation, all principal of (and premium,
if any, on) and interest due or to become due upon all Senior Indebtedness shall
first be paid in full before the holders of the Subordinated Debt Securities
(the "Subordinated Debt Holders"), or the Subordinated Trustee, shall be
entitled to retain any assets (other than shares of stock of the Corporation as
reorganized or readjusted or securities of the Corporation or any other
corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinated, at least to the same extent as the
Subordinated Debt Securities, to the payment of all Senior Indebtedness which
may at the time be outstanding, provided that the rights of the holders of the
Senior Indebtedness are not altered by such reorganization or readjustment) so
paid or distributed in respect of the Subordinated Debt Securities (for
principal or
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interest, if any). Upon such dissolution or winding up or liquidation or
reorganization, any payment or distribution of assets of the Corporation of any
kind or character, whether in cash, property or securities (other than shares of
stock of the Corporation as reorganized or readjusted or securities of the
Corporation or any other corporation provided for by a plan of reorganization or
readjustment, the payment of which is subordinated, at least to the same extent
as the Subordinated Debt Securities, to the payment of all Senior Indebtedness
which may at the time be outstanding, provided that the rights of the holders of
the Senior Indebtedness are not altered by such reorganization or readjustment),
to which the Subordinated Debt Holders or the Subordinated Trustee would be
entitled, except for the subordination provisions of the Subordinated Indenture,
shall be paid by the Corporation or by any receiver, trustee in bankruptcy,
liquidating trustee, agent or other person making such payment or distribution,
or by the Subordinated Debt Holders or the Subordinated Trustee if received by
them or it, directly to the holders of the Senior Indebtedness (pro rata to each
such holder on the basis of the respective amounts of Senior Indebtedness held
by such holder) or their representatives, to the extent necessary to pay all
Senior Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness, before any payment or
distribution is made to the Subordinated Debt Holders or to the Subordinated
Trustee.
Subject to the payment in full of all Senior Indebtedness, the Subordinated
Debt Holders shall be subrogated (equally and ratably with the holders of all
indebtedness of the Corporation which, by its express terms, ranks on a parity
with the Subordinated Debt Securities and is entitled to like rights of
subrogation) to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of the Corporation applicable to the Senior
Indebtedness until the Subordinated Debt Securities shall be paid in full.
SALE OR ISSUANCE OF CAPITAL STOCK OF BANKS
The Senior Indenture prohibits the issuance, sale or other disposition of
capital stock, or securities convertible into or options, warrants or rights to
acquire capital stock, of any Principal Subsidiary Bank (as defined below) or of
any subsidiary which owns shares of capital stock, or securities convertible
into or options, warrants or rights to acquire capital stock, of any Principal
Subsidiary Bank, with the following exceptions: (a) sales of directors'
qualifying shares; (b) sales or other dispositions for fair market value, if,
after giving effect to such disposition and to conversion of any shares or
securities convertible into capital stock of a Principal Subsidiary Bank, the
Corporation would own directly or indirectly not less than 80% of each class of
the capital stock of such Principal Subsidiary Bank (or any successor
corporation thereto); (c) sales or other dispositions made in compliance with an
order of a court or regulatory authority of competent jurisdiction; (d) any sale
by a Principal Subsidiary Bank (or any successor corporation thereto) of
additional shares of its capital stock to its shareholders at any price, so long
as (i) prior to such sale the Corporation owns, directly or indirectly, shares
of the same class and (ii) immediately after such sale, the Corporation owns,
directly or indirectly, at least as great a percentage of each class of capital
stock of such Principal Subsidiary Bank as it owned prior to such sale of
additional shares; (e) any sale by a Principal Subsidiary Bank (or any successor
corporation thereto) of additional securities convertible into shares of its
capital stock to its shareholders at any price, so long as (i) prior to such
sale the Corporation owns, directly or indirectly, securities of the same class
and (ii) immediately after such sale the Corporation owns, directly or
indirectly, at least as great a percentage of each class of such securities
convertible into shares of capital stock of such Principal Subsidiary Bank as it
owned prior to such sale of additional securities; (f) any sale by a Principal
Subsidiary Bank (or any successor corporation thereto) of additional options,
warrants or rights to subscribe for or purchase shares of its capital stock to
its shareholders at any price, so long as (i) prior to such sale the Corporation
owns, directly or indirectly, options, warrants or rights, as the case may be,
of the same class and (ii) immediately after such sale, the Corporation owns,
directly or indirectly, at least as great a percentage of each class of such
options, warrants or rights, as the case may be, to subscribe for or purchase
shares of capital stock of such Principal Subsidiary Bank as it owned prior to
such sale of additional options, warrants or rights; or (g) any issuance of
shares of capital stock, or securities convertible into or options, warrants or
rights to subscribe for or purchase shares of capital stock, of a Principal
Subsidiary Bank or any subsidiary which owns shares of capital stock, or
securities convertible into or options, warrants or rights to acquire capital
stock, of any Principal Subsidiary Bank, to the Corporation or a wholly owned
subsidiary of the Corporation.
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A Principal Subsidiary Bank is defined in the Senior Indenture as any Bank
(other than NationsBank of Delaware, National Association) with total assets
equal to more than 10% of the Corporation's total consolidated assets.
WAIVER OF COVENANTS
Under the terms of either Indenture, compliance with certain covenants or
conditions of such Indenture may be waived by the holders of a majority in
principal amount of the Debt Securities of all series to be affected thereby and
at the time outstanding under that Indenture (including, in the case of holders
of Senior Debt Securities, the covenant described above).
MODIFICATION OF THE INDENTURES
Each Indenture contains provisions permitting the Corporation and the
applicable Trustee to modify such Indenture or the rights of the holders of Debt
Securities or coupons, if any, thereunder, with the consent of the holders of
not less than 66 2/3% in aggregate principal amount of the Debt Securities of
all series at the time outstanding under that Indenture and to be affected
thereby (voting as one class), except that no such modification shall (a) extend
the fixed maturity of, reduce the principal amount or redemption premium, if
any, of, or reduce the rate of or extend the time of payment of interest on, any
Debt Security without the consent of the holder of each security so affected, or
(b) reduce the aforesaid percentage of Debt Securities, the consent of holders
of which is required for any such modification, without the consent of the
holders of all Debt Securities then outstanding under that Indenture. Each
Indenture also provides that the Corporation and the respective Trustee may,
from time to time, execute supplemental indentures in certain limited
circumstances without the consent of any holders of outstanding Debt Securities.
Each Indenture provides that in determining whether the holders of the
requisite principal amount of the Debt Securities outstanding have given any
request, demand, authorization, direction, notice, consent or waiver thereunder,
(i) the principal amount of an Original Issue Discount Security that shall be
deemed to be outstanding shall be the amount of the principal thereof that would
be due and payable upon an event of default, and (ii) the principal amount of a
Debt Security denominated in a foreign currency or currency unit shall be the
U.S. dollar equivalent, determined on the date of original issuance of such Debt
Security.
MEETINGS AND ACTION BY SECURITYHOLDERS
Each Indenture contains provisions for convening meetings of the holders of
Debt Securities for certain purposes. A meeting may be called at any time by the
Trustee in its discretion and shall be called by the Trustee upon request by the
Corporation or the holders of at least 10% in aggregate principal amount of the
Debt Securities outstanding of such series, in any case upon notice given in
accordance with "Notices" below. Any resolution passed or decision taken at any
meeting of holders of Debt Securities of any series duly held in accordance with
the applicable Indenture, or such other action taken in accordance with the
terms of the applicable Indenture, will be binding on all holders of Debt
Securities of that series and the related coupons.
DEFAULTS AND RIGHTS OF ACCELERATION
An Event of Default is defined in the Subordinated Indenture generally as
bankruptcy of the Corporation under Federal bankruptcy laws. An Event of Default
is defined in the Senior Indenture generally as (i) the Corporation's failure to
pay principal (or premium, if any) when due on any securities of a series, (ii)
the Corporation's failure to pay interest on any securities of a series, within
30 days after the same becomes due, (iii) the Corporation's breach of any of its
other covenants contained in the Senior Debt Securities or the Senior Indenture,
which breach is not cured within 90 days after written notice by the Senior
Trustee or by the holders of at least 25% in principal amount of the Senior Debt
Securities then outstanding under the Senior Indenture and affected thereby, and
(iv) certain events involving the bankruptcy, insolvency or liquidation of the
Corporation.
Each Indenture provides that if an Event of Default under the respective
Indenture occurs and is continuing, either the respective Trustee or the holders
of 25% in principal amount, or, if any such Debt Securities are Original Issue
Discount Debt Securities, such lesser amounts as may be described in an
applicable Prospectus Supplement, of the Debt Securities then outstanding under
that Indenture (or, with respect to an Event of Default under the Senior
Indenture due to a default in the payment of principal (or premium, if any) or
interest
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or performance of any other covenant, the outstanding Debt Securities of all
series affected by such default) may declare the principal amount of all of such
Debt Securities to be due and payable immediately. Payment of principal of the
Subordinated Debt Securities may not be accelerated in the case of a default in
the payment of principal (or premium, if any) or interest or the performance of
any other covenant of the Corporation. Upon certain conditions a declaration of
an Event of Default may be annulled and past defaults may be waived by the
holders of a majority in principal amount of the Debt Securities then
outstanding (or of such series affected, as the case may be).
COLLECTION OF INDEBTEDNESS, ETC.
Each Indenture also provides that in the event of a failure by the
Corporation to make payment of principal of or interest on the Debt Securities
(and, in the case of payment of interest, such failure to pay shall have
continued for 30 days), the Corporation will, upon demand of the respective
Trustee, pay to it, for the benefit of the holders of the Debt Securities the
amount then due and payable on the Debt Securities for principal and interest,
with interest on the overdue principal and, to the extent payment of interest
shall be legally enforceable, upon overdue installments of interest at the rate
borne by the Debt Securities. Each Indenture further provides that if the
Corporation fails to pay such amount forthwith upon such demand, the respective
Trustee may, among other things, institute a judicial proceeding for the
collection thereof. However, each Indenture provides that notwithstanding any
other provision of the Indenture, the holder of any Debt Security shall have the
right to institute suit for the enforcement of any payment of principal of and
interest on such Debt Security on the respective stated maturities expressed in
such Debt Security and that such right shall not be impaired without the consent
of such holder.
The holders of a majority in principal amount of the Debt Securities then
outstanding under an Indenture shall have the right to direct the time, method
and place of conducting any proceeding for any remedy available to the Trustee
under that Indenture, provided that the holders shall have offered to the
Trustee reasonable indemnity against expenses and liabilities. Each Indenture
requires the annual filing by the Corporation with the respective Trustee of a
certificate as to the absence of default and as to compliance with the terms of
that Indenture.
NOTICES
Except as otherwise provided in the applicable Indenture, notices to
holders of Debt Securities will be given by first-class mail to the addresses of
such holders as they appear in the Security Register.
CONCERNING THE TRUSTEES
The Corporation and the Banks have from time to time maintained deposit
accounts and conducted other banking transactions with The Bank of New York and
BankAmerica National Trust Company and their affiliated entities in the ordinary
course of business. Each of the Trustees also serves as trustee for certain
series of the Corporation's outstanding indebtedness under other indentures.
LEGAL OPINIONS
The legality of the Debt Securities will be passed upon for the Corporation
by Smith Helms Mulliss & Moore, L.L.P., Charlotte, North Carolina, and for the
underwriters or agents by Stroock & Stroock & Lavan, New York, New York. As of
the date of this Prospectus, certain members of Smith Helms Mulliss & Moore,
L.L.P. beneficially own approximately 50,000 shares of the Corporation's Common
Stock.
EXPERTS
The consolidated financial statements of the Corporation incorporated in
this Prospectus by reference to the Corporation's Annual Report on Form 10-K for
the year ended December 31, 1994, have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, given on the authority
of said firm as experts in auditing and accounting.
14
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[Alternate Back Cover Page]
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS SUPPLEMENT AND PROSPECTUS IN CONNECTION WITH THE OFFERING MADE HEREBY
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE CORPORATION OR BY NATIONSBANC CAPITAL
MARKETS, INC. NEITHER THE DELIVERY OF THIS PROSPECTUS SUPPLEMENT OR PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE CORPORATION
SINCE THE DATE HEREOF. THIS PROSPECTUS SUPPLEMENT AND PROSPECTUS DO NOT
CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER
OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR
SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. THIS PROSPECTUS SUPPLEMENT AND THE RELATED
PROSPECTUS ARE TO BE USED BY NATIONSBANC CAPITAL MARKETS, INC., A BROKER-DEALER
AND A DIRECT WHOLLY-OWNED SUBSIDIARY OF THE CORPORATION, IN CONNECTION WITH
OFFERS AND SALES RELATED TO SECONDARY MARKET TRANSACTIONS.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
PROSPECTUS SUPPLEMENT
Description of the Notes...................... S-2
Capitalization................................ S-5
Ratios of Earnings to Fixed Charges........... S-6
Recent Financial Information.................. S-7
Selected Financial Data....................... S-8
Underwriting.................................. S-9
PROSPECTUS
Incorporation of Certain Documents by
Reference................................... 2
Available Information......................... 2
NationsBank Corporation....................... 3
Supervision and Regulation.................... 4
Use of Proceeds............................... 6
Ratios of Earnings to Fixed Charges........... 6
Plan of Distribution.......................... 6
Description of Debt Securities................ 7
Legal Opinions................................ 14
Experts....................................... 14
</TABLE>
$300,000,000
NATIONSBANK(Register mark)
6 1/2% SUBORDINATED NOTES,
DUE 2006
PROSPECTUS SUPPLEMENT
NATIONSBANC CAPITAL MARKETS, INC.
MARCH 5, 1996
