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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported):
April 13, 1998
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)
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ITEM 5. OTHER EVENTS.
Release of First Quarter Earnings. On April 13, 1998, NationsBank
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Corporation, the registrant (the "Registrant"), announced financial results for
the first quarter of fiscal 1998, reporting earnings of $497 million and
earnings per common share of $.52. A copy of the press release announcing the
results of the Registrant's fiscal quarter ended March 31, 1998 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 April 13, 1998 with respect to the
Registrant's financial results for the fiscal quarter
ended March 31, 1998.
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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: April 15, 1998
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EXHIBIT INDEX
Exhibit No. Description of Exhibit
- ----------- ----------------------
99.1 Press release dated April 13, 1998 with respect to the
Registrant's financial results for the fiscal quarter ended
March 31, 1998.
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Exhibit 99.1
FOR IMMEDIATE RELEASE
April 13, 1998
Contact: Investors Susan Carr (704-386-8059) or Kevin Stitt (704-386-5667)
Media Bob Stickler (704-386-8465)
SIGNIFICANT REVENUE GROWTH DRIVES 33 PERCENT INCREASE
IN OPERATING EARNINGS AT NATIONSBANK
CHARLOTTE, NC, April 13, 1998 -- NationsBank today reported record operating
earnings of $1.14 billion, a gain of 33 percent from $855 million a year earlier
driven by broad-based gains in revenue, merger benefits and tight expense
controls. Operating earnings per share rose 33 percent to $1.20 from $.90. Prior
results have been restated to include Barnett Banks, Inc., which was merged into
NationsBank on January 9, 1998 as a pooling of interests.
Including $642 million in non-recurring, after-tax merger and restructuring
items resulting from the merger with Barnett, net income in the first quarter of
1998 was $497 million, or $.52 per share.
"Our operating results demonstrate the growing momentum at NationsBank,
reflecting the earning power of our franchise," said Hugh L. McColl Jr., chief
executive officer. "We are quite pleased with the contribution from NationsBank
West -- the former Boatmen's franchise -- which we expect to accelerate as we
complete installation of the Model Bank in the second quarter. In addition,
results in Florida, where we are working to assimilate Barnett and have already
begun to introduce new products, have exceeded our expectations. Our transition
plan is on schedule to be completed this fall, and we are excited about our
opportunity to provide an unprecedented combination of convenience, products and
service to Florida consumers and businesses."
Return on average assets, before merger and restructuring items, rose to 1.47
percent from 1.22 percent a year ago. Return on equity increased to 19.01% from
14.69%.
Cash operating earnings -- which exclude the amortization of intangibles --
increased 32 percent to $1.28 billion, or $1.34 per share, from a year earlier.
Return on average tangible common shareholders' equity rose to 37.6 percent from
26.4 percent a year earlier, on an operating basis.
Earnings Highlights (first quarter 1998 compared to first quarter 1997)
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(bullet) Net revenues increased 15 percent to $4.3 billion.
(bullet) Noninterest income rose 34 percent to $1.78 billion and reached
41 percent of net revenues compared to 35 percent a year earlier.
(bullet) Managed loans and leases grew 7 percent to $192.1 billion.
(bullet) The cash basis efficiency ratio improved to 53.3 percent from 56.1
percent, reflecting successful integration efforts and expense
containment.
Net Interest Income
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Taxable-equivalent net interest income increased 5 percent to $2.56 billion, as
average earning assets grew 11 percent. The net yield on earning assets declined
by 21 basis points to 3.82 percent due to a higher level of investment
securities.
Noninterest Income
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Noninterest income grew 34 percent to $1.78 billion, due to increases in almost
all major categories. Investment banking and brokerage fees reflected the
addition of NationsBanc Montgomery Securities in October 1997. The sale of a
partial ownership in a mortgage company resulted in a pretax gain of
approximately $110 million during the first quarter of 1998.
Efficiency
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Noninterest expense rose 10 percent to $2.45 billion, primarily due to the
addition of NationsBanc Montgomery Securities last October. The efficiency ratio
improved to 56.5 percent from 59.1 percent a year earlier, reflecting benefits
from mergers and internal cost-control measures. The cash basis efficiency ratio
decreased to 53.3 percent from 56.1 percent.
Credit Quality
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Nonperforming assets were $1.5 billion on March 31, 1998 and equaled .86 percent
of net loans, leases, factored accounts receivable and foreclosed properties
compared to $1.5 billion, or .81 percent a year earlier. The allowance for
credit losses totaled $3.2 billion on March 31, 1998, equal to 234 percent of
nonperforming loans and 1.81 percent of net loans, leases and factored accounts
receivable. The provision for loan losses in the first quarter was $265 million.
Net charge-offs were $277 million, equal to an annualized .63 percent of average
net loans, leases and factored accounts receivable. Net charge-offs were $215
million,or .49 percent, a year earlier.
Capital Strength
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Total shareholders' equity was $25.2 billion on March 31, 1998. This represented
8.02 percent of period-end assets, compared to 8.38 percent on March 31, 1997.
Book value per common share rose 6 percent to $26.34 at March 31, 1998 from a
year earlier.
NationsBank Corporation, with $315 billion in assets, is the third largest U.S.
bank with full-service operations in 16 states and the District of Columbia.
NationsBank provides financial products and services to 18 million households
and 1 million businesses as well as institutional investors and government
agencies throughout the United States and in major markets around the world. The
company's shares (Symbol: NB) are listed on the New York Stock Exchange.
WWW.NATIONSBANK.COM
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NATIONSBANK CORPORATION
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<CAPTION>
THREE MONTHS
ENDED MARCH 31
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FINANCIAL OPERATING SUMMARY 1998 1997
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(In millions except per-share data)
<S> <C> <C>
Net income $ 1,139 $ 855
Earnings per common share 1.20 .90
Diluted earnings per common share 1.17 .88
Cash basis earnings (1) 1,278 968
Cash basis earnings per common share 1.34 1.02
Cash basis diluted earnings per common share 1.31 .99
Average common shares issued 949.641 945.184
Average diluted common shares issued 973.561 972.669
Price per share of common stock at period end $ 72.9375 $ 55.5000
Common dividends paid 362 293
Common dividends paid per share .38 .33
Preferred dividends paid 2 4
OPERATING EARNINGS SUMMARY
(Taxable-equivalent in millions)
Net interest income $ 2,564 $ 2,444
Provision for credit losses (265) (222)
Gains on sales of securities 152 43
Noninterest income 1,776 1,321
Foreclosed properties (expense) income (5) 2
Noninterest expense (2,452) (2,225)
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Income before income taxes 1,770 1,363
Income taxes - including FTE adjustment * 631 508
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Net income $ 1,139 $ 855
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* FTE adjustment $ 34 $ 31
AVERAGE BALANCE SHEET SUMMARY
(In billions)
Loans and leases, net $ 176.700 $ 177.369
Managed loans and leases, net (2) 192.124 180.101
Securities held for investment 1.091 1.919
Securities available for sale 48.342 25.638
Total securities 49.433 27.557
Earning assets 271.192 245.098
Total assets 314.929 283.614
Noninterest-bearing deposits 39.451 36.280
Interest-bearing deposits 128.077 131.848
Total deposits 167.528 168.128
Shareholders' equity 24.310 23.666
Common shareholders' equity 24.248 23.491
OTHER OPERATING FINANCIAL DATA
Net interest yield 3.82% 4.03%
Return on average assets 1.47 1.22
Return on average tangible assets 1.70 1.43
Return on average common shareholders' equity 19.01 14.69
Return on average tangible common shareholders' equity 37.60 26.37
Total equity to assets ratio (period-end) 8.02 8.38
Gross charge-offs (in millions) $ 351 $ 291
Net charge-offs (in millions) 277 215
% of average loans, leases and factored accounts receivable, net .63% .49%
Managed credit card net charge-offs as a % of average
managed credit card receivables 6.69% 5.72%
Efficiency ratio 56.50 59.09
Cash basis efficiency ratio 53.30 56.09
REPORTED RESULTS (OPERATING RESULTS INCLUDING MERGER AND RESTRUCTURING ITEMS)
Net income $ 497 $ 855
Earnings per common share .52 .90
Diluted earnings per common share .51 .88
Return on average common shareholders' equity 8.28% 14.69%
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(1) Cash basis earnings equal net income excluding amortization of intangibles.
(2) Prior periods are restated for comparison (e.g. acquisitions and
securitizations).
(3) Ratios and amounts for 1997 have not been restated to reflect the impact of
the Barnett Banks, Inc. merger.
NATIONSBANK CORPORATION - Continued
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<CAPTION>
MARCH 31
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1998 1997
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BALANCE SHEET SUMMARY
(In billions)
<S> <C> <C>
Loans and leases, net $ 178.252 $ 178.363
Securities held for investment 1.028 1.836
Securities available for sale 50.271 24.808
Total securities 51.299 26.644
Earning assets 273.055 243.115
Factored accounts receivable 1.234 1.212
Mortgage servicing rights 1.353 1.217
Goodwill, core deposit and other intangibles 10.404 9.168
Total assets 314.503 280.755
Noninterest-bearing deposits 42.660 39.596
Interest-bearing deposits 127.386 131.068
Total deposits 170.046 170.664
Shareholders' equity 25.220 23.525
Common shareholders' equity 25.160 23.400
Per share (not in billions) 26.34 24.94
Risk-based capital (3)
Tier 1 capital $ 17.188 $ 13.516
Tier 1 capital ratio 6.80% 7.06%
Total capital $ 28.286 $ 22.159
Total capital ratio 11.19% 11.58%
Leverage ratio (3) 5.64% 6.19%
Common shares issued (in millions) 955.199 938.136
Allowance for credit losses $ 3.245 $ 3.262
Allowance for credit losses as a % of net loans, leases and factored
accounts receivable 1.81% 1.82%
Allowance for credit losses as a % of nonperforming loans 233.89 263.99
Nonperforming loans $ 1.388 $ 1.236
Nonperforming assets 1.536 1.453
Nonperforming assets as a % of:
Total assets .49% .52%
Net loans, leases, factored accounts receivable
and foreclosed properties .86% .81%
OTHER DATA
Full-time equivalent headcount 99,995 101,701
Banking centers 3,214 3,253
ATMs 7,018 6,718
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BUSINESS UNIT RESULTS - THREE MONTHS ENDED MARCH 31, 1998
(In millions)
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<CAPTION>
AVERAGE LOANS RETURN ON AVERAGE
TOTAL REVENUE NET INCOME AND LEASES, NET TANGIBLE EQUITY
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<S> <C> <C> <C> <C> <C> <C> <C>
CONSUMER BANKING $ 2,509 58% $ 460 40% $ 99,493 56% 27%
MIDDLE MARKET 449 10 165 14 33,865 19 28
ASSET MANAGEMENT 306 7 75 7 7,781 5 44
CORPORATE FINANCE 914 21 242 21 35,859 20 25
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