As filed with the Securities and Exchange Commission on July 18, 1997
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________________
FORM 8-K
CURRANT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
July 14, 1997
NATIONSBANK CORPORATION
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(Exact name of registrant as specified in its charter)
North Carolina
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(State or other jurisdiction of incorporation or organization)
1-6523
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(Commission File Number)
56-0906609
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(IRS Employer Identification No.)
NationsBank Corporate Center
Charlotte, North Carolina
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(Address of principal executive offices)
28255
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(Zip Code)
(704) 386-5000
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(Registrant's telephone number, including area code)
ITEM 5. OTHER EVENTS.
Release of Second Quarter Earnings. On July 14, 1997, NationsBank
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Corporation, the registrant (the "Registrant"), announced financial results for
the second quarter of fiscal 1997, reporting earnings of $762 million and
earnings per common share of $1.05. A copy of the press release announcing the
results of the Registrant's fiscal quarter ended June 30, 1997 is filed as
Exhibit 99.1 to this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(c) Exhibits.
The following exhibits are filed herewith:
EXHIBIT NO. DESCRIPTION OF EXHIBIT
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99.1 Press Release dated July 14, 1997 with respect to the
Registrant's financial results for the fiscal quarter
ended June 30, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
NATIONSBANK CORPORATION
By: /s/ Marc D. Oken
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Marc D. Oken
Executive Vice President
and Chief Accounting Officer
Dated: July 18, 1997
EXHIBIT INDEX
Exhibit No. Description of Exhibit
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99.1 Press release dated July 14, 1997 with respect to the
Registrant's financial results for the fiscal quarter
ended June 30, 1997.
FOR IMMEDIATE RELEASE EXHIBIT 99.1
NATIONSBANK NET INCOME REACHED $762 MILLION
IN SECOND QUARTER 1997
CHARLOTTE, NC, July 14, 1997 -- NationsBank second-quarter net income increased
26 percent from the year-ago quarter to $762 million, or $1.05 per common share,
demonstrating the company's ongoing earnings momentum and benefit from recent
acquisitions.
"Core revenue growth, stable credit quality and continued expense containment
throughout the company drove this quarter's solid performance," said Hugh L.
McColl Jr., chief executive officer. "We are very pleased with expense trends,
which can be attributed mainly to the successful integration of Boatmen's
Bancshares."
Net income for the first six months of 1997 rose 31 percent to $1.47 billion, or
$2.02 per common share. This compared to net income of $1.12 billion, or $1.85
per common share, in the first six months of 1996. Excluding a merger-related
charge in the first quarter of 1996, operating net income and earnings per share
for the first six months of 1996 were $1.20 billion and $1.98, respectively.
Second quarter 1997 results include the impact of internal growth and several
acquisitions completed in 1996 and early 1997, primarily the acquisition of
Boatmen's Bancshares Inc. on Jan. 7, 1997.
Earnings Highlights (second quarter 1997 compared to second quarter 1996
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results)
* Cash basis earnings (net income excluding amortization of intangibles)
were $1.21 per common share, up 15 percent from $1.05 per share
* Tangible return on average tangible common shareholders' equity increased
859 basis points to 30.59 percent, from 22.00 percent
* Investment banking income grew 73 percent, pushing noninterest income
to $1.2 billion
* Net charge-offs as a percentage of average loans remained stable at .49
percent
Reported Earnings
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NationsBank earned $762 million in the second quarter of 1997. This represented
a 26-percent increase over the $605 million earned in the second quarter 1996.
Earnings per common share for the second quarter 1997 rose 5 percent to $1.05,
from $1.00 in the year-ago quarter. Return on average common shareholders'
equity was 15.25 percent in the second quarter 1997, down from 18.00 percent in
the year-ago quarter, due primarily to the equity issued in the Boatmen's
Bancshares Inc. acquisition.
Cash Basis Earnings
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Cash basis earnings increased 37 percent to $873 million in the second quarter
of 1997, or $1.21 per common share. This compares to $637 million, or $1.05 per
common share, in the second quarter 1996. The tangible return on average
tangible common shareholders' equity rose to 30.59 percent in the second quarter
1997, from 22.00 percent in the year-ago quarter.
Net Interest Income
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In the second quarter of 1997, taxable-equivalent net interest income increased
25 percent to $2.02 billion. The growth was achieved through a 20-percent
increase in average loans and leases and a 27-basis-point expansion in the net
interest yield. The continuing improvement in the net interest yield to 3.89
percent from 3.62 percent is the result of higher yields on the loan and lease
portfolio, coupled with deposit expense management efforts.
Noninterest Income
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Noninterest income rose 27 percent to $1.17 billion in the second quarter of
1997. This growth was attributable primarily to higher levels of income from
deposit accounts, asset management and fiduciary service fees and investment
banking fees.
Efficiency
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In the second quarter of 1997, the cash basis efficiency ratio (excluding
amortization of intangibles) improved approximately 130 basis points to 53.0
percent, compared to 54.3 percent in the second quarter 1996. Including the
amortization of intangibles, the efficiency ratio was 56.5 percent in the second
quarter 1997.
Credit Quality
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Total nonperforming assets were $1.27 billion on June 30, 1997, or .84 percent
of net loans, leases and factored receivables and other real estate owned,
compared to .80 percent of net levels on June 30, 1996. The allowance for
credit losses totaled $2.79 billion at quarter-end, equaling 250 percent of
nonperforming loans, compared to $2.29 billion, or 268 percent, one year
earlier. In the second quarter of 1997, provision for credit losses was $190
million, covering net charge-offs of $184 million. Net charge-offs for the
quarter equaled .49 percent of average net loans, leases and factored
receivables, stable when compared to the second quarter 1996.
Capital Strength
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Total shareholders' equity was $20.0 billion on June 30, 1997. This represented
8.31 percent of period-end assets, compared to 7.29 percent at June 30, 1996.
Book value per common share rose to $27.99 at the end of the second quarter
1997. In the second quarter of 1997, NationsBank repurchased approximately 16
million common shares, plus an additional 13 million common shares related to
corresponding issuances for general corporate purposes such as associate stock
option plans.
NationsBank Corporation, headquartered in Charlotte, N.C., is a bank holding
company that provides financial products and services nationally and
internationally to individuals, businesses, corporations, institutional
investors and government agencies. NationsBank has primary retail and
commercial banking operations in 16 states and the District of Columbia. As of
June 30, 1997, NationsBank had total assets of $240 billion.
NATIONSBANK CORPORATION FINANCIAL HIGHLIGHTS
THREE MONTHS SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
1997 1996 1997 1996(1)
FINANCIAL SUMMARY
(In millions except per-share data)
Net income $762 $605 $1,471 $1,118
Earnings per common share 1.05 1.00 2.02 1.85
Fully diluted earnings
per common share 1.02 .99 1.96 1.82
Cash basis earnings (2) 873 637 1,683 1,176
Cash basis earnings per share 1.21 1.05 2.31 1.95
Cash basis fully diluted
per share 1.17 1.04 2.24 1.92
Average common shares issued 720.020 600.924 725.188 600.741
Average fully diluted common
shares issued 743.629 610.742 750.194 610.802
Price per share of common
stock at period end $64.5625 $41.3125 $64.5625 $41.3125
Common dividends paid 237 175 482 349
Common dividends paid per share .33 .29 .66 .58
Preferred dividends paid 3 4 7 8
EARNINGS SUMMARY
(Taxable-equivalent in millions)
Net interest income $2,017 $1,611 $3,995 $3,195
Provision for credit losses (190) (155) (380) (310)
Gains (losses) on sales
of securities 29 (6) 72 8
Noninterest income 1,165 917 2,278 1,802
Other real estate owned expense (4) (7) (2) (7)
Noninterest expense (1,798) (1,405) (3,608) (2,917)
Income before income taxes 1,219 955 2,355 1,771
Income taxes - including
FTE adjustment* 457 350 884 653
Net income $762 $605 $1,471 $1,118
*FTE adjustment $29 $24 $57 $51
AVERAGE BALANCE SHEET SUMMARY
(In billions)
Loans and leases, net $148.113 $123.726 $147.400 $123.504
Managed loans and leases, net 153.353 127.317 152.819 126.660
Securities held for investment 1.647 3.731 1.782 4.012
Securities available for sale 20.851 18.328 20.796 20.662
Total securities 22.498 22.059 22.578 24.674
Earning assets 208.004 178.588 208.423 182.077
Total assets 240.508 202.796 241.352 205.707
Noninterest-bearing deposits 31.310 24.601 30.821 23.905
Interest-bearing deposits 103.351 85.387 103.997 84.542
Total deposits 134.661 109.988 134.818 108.447
Shareholders' equity 20.057 13.552 20.354 13.348
Common shareholders' equity 19.952 13.438 20.214 13.238
OTHER FINANCIAL DATA
Net interest yield 3.89% 3.62% 3.86% 3.52%
Return on average assets 1.27 1.20 1.23 1.09
Return on average
tangible assets 1.51 1.28 1.46 1.16
Return on average common
shareholders' equity 15.25 18.00 14.60 16.87
Return on average tangible
common shareholders' equity 30.59 22.00 28.41 20.58
Total equity to assets ratio
(period end) 8.31 7.29 8.31 7.29
Gross charge-offs (in millions) $259 $224 $510 $434
Net charge-offs (in millions) 184 157 368 312
% of average loans, leases and
factored accounts receivable, net .49% .50% .50% .50%
Managed credit card net charge-offs
as a % of average managed credit
card receivables 6.26% 4.36% 6.18% 4.08%
Efficiency ratio 56.48 55.57 57.51 56.00
Cash basis efficiency ratio 53.00 54.31 54.13 54.83
(1) 1996 results included a merger-related charge of $118
million($77 million, net of tax, or $.13 per common share).
(2) Cash basis earnings equal net income excluding amortization
of intangibles.
JUNE 30
1997 1996
BALANCE SHEET SUMMARY
(In billions)
Loans and leases, net $149.320 $122.643
Securities held for investment 1.548 3.304
Securities available for sale 19.716 15.806
Total securities 21.264 19.110
Earning assets 209.947 173.654
Factored accounts receivable 1.126 1.062
Mortgage servicing rights 1.196 .862
Goodwill, core deposit and
other intangibles 8.570 1.891
Total assets 240.362 192.308
Noninterest-bearing deposits 34.251 24.242
Interest-bearing deposits 100.798 83.882
Total deposits 135.049 108.124
Shareholders' equity 19.970 14.025
Common shareholders' equity 19.909 13.905
Per common share (not in billions) 27.99 23.09
RISK-BASED CAPITAL
Tier 1 capital $13.122 $11.971
Tier 1 capital ratio 6.83% 7.58%
Total capital $21.737 $18.847
Total capital ratio 11.32% 11.93%
Leverage ratio 6.05% 6.64%
Common shares issued (in millions) 711.404 602.166
Allowance for credit losses $2.790 $2.292
Allowance for credit losses
as % of net loans, leases
and factored accounts receivable 1.85% 1.85%
Allowance for credit losses
as % of nonperforming loans 249.66 268.34
Nonperforming loans $1.117 $.854
Nonperforming assets 1.267 .992
Nonperforming assets as % of:
Total assets .53% .52%
Net loans, leases, factored accounts
receivable and other real estate owned .84% .80%
OTHER DATA
Full-time equivalent headcount 79,336 62,137
Banking centers 2,630 1,948
ATMs 5,931 3,333
BUSINESS UNIT RESULTS - Three months ended June 30, 1997
(in millions)
General Bank Global Finance Financial Services
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Total revenue $2,303 73% $682 22% $167 5%
Net income 478 63% 225 30% 33 4%
Return on average
tangible equity 29% 22% 13%
Average loans and
leases, net $97,017 65% $42,889 29% $8,542 6%
