As filed with the Securities and Exchange Commission on October 20, 1997
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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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):
October 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 Third Quarter Earnings. On October 14, 1997, NationsBank
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Corporation, the registrant (the "Registrant"), announced financial results for
the third quarter of fiscal 1997, reporting earnings of $788 million and
earnings per common share of $1.11. A copy of the press release announcing the
results of the Registrant's fiscal quarter ended September 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 October 14, 1997 with respect to
the Registrant's financial results for the fiscal quarter
ended September 30, 1997.
SIGNATURE
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
Chief Accounting Officer
Dated: October 20, 1997
EXHIBIT INDEX
Exhibit No. Description of Exhibit
- ----------- ----------------------
99.1 Press Release dated October 14, 1997 with respect to the
Registrant's financial results for the fiscal quarter ended
September 30, 1997.
FOR IMMEDIATE RELEASE EXHIBIT 99.1
NATIONSBANK REPORTED 26 PERCENT INCREASE IN NET INCOME TO $788 MILLION IN THIRD
QUARTER 1997
CHARLOTTE, NC, October 14, 1997 -- NationsBank third-quarter net income
increased 26 percent from the year-ago quarter to $788 million, or $1.11 per
common share, reflecting growth in revenue, cost containment and the benefit
from recent acquisitions.
"Diversified revenue streams and our disciplined attention to expense control
have generated increased earnings for our company," said Hugh L. McColl Jr.,
chief executive officer.
"We look forward to leveraging our business strengths across a customer base
expanded by the addition of Montgomery Securities and the pending merger with
Barnett Banks," McColl added.
Net income for the first nine months of 1997 rose 30 percent to $2.26 billion,
or $3.13 per common share. This compared to net income of $1.74 billion, or
$2.91 per common share, in the first nine months of 1996. Excluding a merger-
related charge in the first quarter of 1996, operating net income and earnings
per share for the first nine months of 1996 were $1.82 billion and $3.04,
respectively.
Third quarter 1997 results included the benefit of several acquisitions
completed in 1996 and early 1997, primarily the acquisition of Boatmen's
Bancshares, Inc. on January 7, 1997.
Earnings Highlights (third quarter 1997 compared to third quarter 1996 results)
- -------------------
* Cash basis earnings (net income excluding amortization of intangibles)
were $1.27 per common share, up 13 percent from $1.12 per share
* Return on average tangible common shareholders' equity increased
840 basis points to 32.0 percent, from 23.6 percent
* Noninterest income increased 38 percent to $1.22 billion driven by
increases in all major categories
* The cash basis efficiency ratio improved to 52.0 percent from 54.6 percent,
reflecting successful integration efforts and expense containment
Reported Earnings
- -----------------
NationsBank earned $788 million in the third quarter of 1997. This represented
a 26-percent increase over the $625 million earned in the third quarter 1996.
Earnings per common share for the third quarter 1997 rose 5 percent to $1.11,
from $1.06 in the year-ago quarter. Return on average common shareholders'
equity was 15.9 percent in the third quarter 1997, down from 19.0 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 $899 million in the third quarter of
1997, or $1.27 per common share. This compared to $658 million, or $1.12 per
common share, in the third quarter 1996. The return on average tangible common
shareholders' equity rose to 32.0 percent in the third quarter 1997, from 23.6
percent in the year-ago quarter.
Net Interest Income
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In the third quarter of 1997, taxable-equivalent net interest income increased
24 percent to $2 billion compared to third quarter 1996. The growth was
achieved through a 21-percent increase in average loans and leases and an 11-
basis-point expansion in the net interest yield. The improvement in the net
interest yield to 3.80 percent from 3.69 percent was primarily the result of the
improved contribution of the securities portfolios and deposit expense
management efforts.
Noninterest Income
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Noninterest income rose 38 percent to $1.22 billion in the third quarter of
1997. This growth was attributable to higher levels of income from virtually
all areas, including deposit accounts, asset management and fiduciary service
fees, trading, investment banking and a gain on the sale of a credit card
portfolio.
Efficiency
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In the third quarter of 1997, the cash basis efficiency ratio improved
approximately 260 basis points to 52.0 percent, compared to 54.6 percent in the
third quarter 1996. Including the amortization of intangibles, the efficiency
ratio was 55.5 percent in the third quarter 1997 compared to 55.9 percent in
1996.
Credit Quality
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Total nonperforming assets were $1.27 billion on September 30, 1997, or .91
percent of net loans, leases and factored receivables and other real estate
owned, compared to .93 percent of net levels on September 30, 1996. The
allowance for credit losses totaled $2.78 billion at quarter-end, equaling 252
percent of nonperforming loans, compared to $2.32 billion, or 236 percent, one
year earlier. In the third quarter of 1997, provision for credit losses was
$190 million. Net charge-offs for the quarter were $199 million or .53 percent
of average net loans, leases and factored receivables, compared to .44 percent
in the third quarter 1996.
Capital Strength
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Total shareholders' equity was $20.32 billion on September 30, 1997. This
represented 8.38 percent of period-end assets, compared to 7.09 percent at
September 30, 1996. Book value per common share rose 26 percent to $28.73 at
the end of the third quarter 1997 from third quarter 1996.
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
September 30, 1997, NationsBank had total assets of $242 billion.
<TABLE>
NATIONSBANK CORPORATION FINANCIAL HIGHLIGHTS
<CAPTION>
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30 ENDED SEPTEMBER 30
1997 1996 1997 1996(1)
--------------------------------------
FINANCIAL SUMMARY
(In millions except per-share data)
<S> <C> <C> <C> <C>
Net income $788 $625 $2,259 $1,743
Earnings per common share 1.11 1.06 3.13 2.91
Fully diluted earnings
per common share 1.08 1.05 3.04 2.87
Cash basis earnings (2) 899 658 2,582 1,834
Cash basis earnings per share 1.27 1.12 3.58 3.06
Cash basis fully diluted
earnings per share 1.23 1.11 3.48 3.02
Average common shares issued 708.278 585.266 719.489 595.545
Average fully diluted common
shares issued 728.373 596.135 741.455 606.154
Price per share of common
stock at period end $61.8750 $43.4375 $61.8750 $43.4375
Common dividends paid 232 169 714 518
Common dividends paid per share .33 .29 .99 .87
Preferred dividends paid 2 3 9 11
EARNINGS SUMMARY
(Taxable-equivalent in millions)
Net interest income $2,001 $1,616 $5,996 $4,811
Provision for credit losses (190) (145) (570) (455)
Gains on sales of securities 19 26 91 34
Noninterest income 1,224 886 3,502 2,688
Other real estate owned expense (5) (6) (7) (13)
Noninterest expense (1,788) (1,400) (5,396) (4,317)
Income before income taxes 1,261 977 3,616 2,748
Income taxes - including
FTE adjustment* 473 352 1,357 1,005
Net income $788 $625 $2,259 $1,743
*FTE adjustment $29 $21 $86 $72
AVERAGE BALANCE SHEET SUMMARY
(In billions)
Loans and leases, net $146.536 $121.197 $147.109 $122.729
Managed loans and leases, net 151.929 126.666 152.521 126.662
Securities held for investment 1.424 3.173 1.662 3.730
Securities available for sale 24.625 16.388 22.086 19.227
Total securities 26.049 19.561 23.748 22.957
Earning assets 209.678 174.299 208.846 179.465
Total assets 241.867 197.923 241.526 203.093
Noninterest-bearing deposits 31.901 24.190 31.185 24.000
Interest-bearing deposits 100.750 83.525 102.902 84.200
Total deposits 132.651 107.715 134.087 108.200
Shareholders' equity 19.678 13.133 20.126 13.276
Common shareholders' equity 19.619 13.014 20.013 13.163
OTHER FINANCIAL DATA
Net interest yield 3.80% 3.69% 3.84% 3.58%
Return on average assets 1.29 1.26 1.25 1.15
Return on average
tangible assets 1.53 1.34 1.48 1.22
Return on average common
shareholders' equity 15.91 19.00 15.03 17.58
Return on average tangible
common shareholders' equity 31.96 23.56 29.55 21.56
Total equity to assets ratio
(period-end) 8.38 7.09 8.38 7.09
Gross charge-offs (in millions) $283 $194 $793 $628
Net charge-offs (in millions) 199 135 567 447
% of average loans, leases and
factored accounts receivable, net .53% .44% .51% .48%
Managed credit card net charge-offs
as a % of average managed credit
card receivables 6.74% 4.67% 6.36% 4.29%
Efficiency ratio 55.47 55.92 56.82 55.97
Cash basis efficiency ratio 52.04 54.63 53.42 54.75
(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.
</TABLE>
<TABLE>
<CAPTION>
SEPTEMBER 30
1997 1996
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BALANCE SHEET SUMMARY
(In billions)
<S> <C> <C>
Loans and leases, net $138.352 $120.829
Securities held for investment 1.301 3.035
Securities available for sale 34.239 13.334
Total securities 35.540 16.369
Earning assets 212.176 167.284
Factored accounts receivable 1.230 1.249
Mortgage servicing rights 1.186 .944
Goodwill, core deposit and
other intangibles 8.404 2.002
Total assets 242.437 187.671
Noninterest-bearing deposits 33.010 25.990
Interest-bearing deposits 97.437 82.142
Total deposits 130.447 108.132
Shareholders' equity 20.317 13.304
Common shareholders' equity 20.262 13.186
Per common share (not in billions) 28.73 22.88
Risk-based capital
Tier 1 capital $13.451 $11.128
Tier 1 capital ratio 7.00% 7.05%
Total capital $22.221 $19.031
Total capital ratio 11.56% 12.05%
Leverage ratio 6.16% 6.30%
Common shares issued (in millions) 705.348 576.224
Allowance for credit losses $2.783 $2.319
Allowance for credit losses
as % of net loans, leases
and factored accounts receivable 1.99% 1.90%
Allowance for credit losses
as % of nonperforming loans 251.74 235.64
Nonperforming loans $1.106 $.984
Nonperforming assets 1.266 1.135
Nonperforming assets as % of:
Total assets .52% .61%
Net loans, leases, factored accounts
receivable and other real estate owned .91% .93%
OTHER DATA
Full-time equivalent headcount 78,097 63,142
Banking centers 2,583 1,980
ATMs 6,052 3,609
</TABLE>
<TABLE>
BUSINESS UNIT RESULTS - Three months ended September 30, 1997
(in millions)
<CAPTION>
General Bank Global Finance Financial Services
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<S> <C> <C> <C> <C> <C> <C>
Total revenue $2,389 75% $628 20% $174 5%
Net income 530 67% 196 24% 35 4%
Return on average
tangible equity 32% 18% 14%
Average loans and
leases, net $94,882 65% $43,527 30% $8,698 5%
</TABLE>
