SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
June 9, 1997
WACHOVIA CORPORATION
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(Exact Name of Registrant as specified in its charter)
NORTH CAROLINA No. 1-9021 No. 56-1473727
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(State or other jurisdiction of (Commission (IRS employer
incorporation) File Number) Identification No.)
100 NORTH MAIN STREET, WINSTON-SALEM, NC 27101
191 PEACHTREE STREET NE, ATLANTA, GA 30303
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:
WINSTON-SALEM 910-770-5000
ATLANTA 404-332-5000
Not applicable
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(Registrant's former address of principal executive offices)
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Item 5. Other Events.
On June 9, 1997, Wachovia Corporation, a North Carolina corporation
(the "Registrant"), entered into an Agreement and Plan of Merger by and between
the Registrant and Jefferson Bankshares, Inc., a Virginia corporation
("Jefferson"), for a tax-free merger of the two companies pursuant to which
each outstanding share of common stock, par value $2.50 per share, of Jefferson
would be converted into .625 shares of common stock, par value $5.00 per share,
of the Registrant (the "Proposed Merger").
This current report on Form 8-K, including the investor materials,
contains forward-looking statements that involve risk and uncertainty. The
Registrant notes that a variety of factors could cause the Registrant's actual
results and experience to differ materially form the anticipated results or
other expectations expressed in the corporations's forward-looking statements.
The risks and uncertainties that may affect the operations,
performance, development, growth projections and results of the Registrant's
business include, but are not limited to, the growth of the economy, interest
rate movements, timely development by the Registrant of technology enhancements
for its products and operating systems, the impact of competitive products,
services and pricing, customer business requirements, Congressional legislation,
acquisition cost savings and revenue enhancements and similar matters. Readers
of this report are cautioned not to place undue reliance on forward- looking
statements which are subject to influence by the named risk factors and
unanticipated future events. Actual results, accordingly, may differ materially
from management expectations.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
99.1 Press release dated June 10, 1997 announcing the
Proposed Merger.
99.2 Investor presentation materials used by the Registrant
on June 10, 1997 relating to the Proposed Merger.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date June 10, 1997
WACHOVIA CORPORATION
By:/s/ Kenneth W. McAllister
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Name: Kenneth W. McAllister
Title: Executive Vice-President
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WACHOVIA
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NEWS ANNOUNCEMENT
Wachovia Corporation
For Additional Information: Atlanta, GA 30383
Robert S. McCoy, Jr. Winston-Salem, NC 27150
Chief Financial Officer, 910-732-5926
James C. Mabry, Manager
Investor Relations, 910-732-5788
June 10, 1997
WACHOVIA, JEFFERSON BANKSHARES INC. ANNOUNCE MERGER
Jefferson Bankshares Inc., the parent of Jefferson National Bank in
Charlottesville, Va., and Wachovia Corporation announced the signing of a
definitive agreement for a merger between the two companies. The agreement has
been approved by the boards of directors of both companies and is subject to the
approval of Jefferson Bankshares' shareholders and appropriate regulatory
agencies. The merger is expected to close by Oct. 31.
The agreement will be structured on a purchase accounting basis and
provides for a tax-free exchange of .625 share of Wachovia Corporation common
stock for each common share of Jefferson Bankshares. Jefferson Bankshares has
issued a stock option to Wachovia representing approximately 19.9 percent of
Jefferson's outstanding shares. Based on Wachovia Corporation's June 9 closing
stock price, the transaction would have a value of approximately $38.83 per
share, or an aggregate consideration of $542 million, based on Jefferson
Bankshares' 13.95 million common shares outstanding. The merger is expected to
have a positive impact on Wachovia's earnings in 1998.
Wachovia Chief Executive L.M. Baker Jr. said, "For some time we have
been looking at strategic opportunities in attractive markets. Jefferson
National is a very strong, well-managed bank located in a number of vibrant
Virginia markets. We are excited about the opportunity to join forces with
them."
O. Kenton McCartney, Chief Executive Officer of Jefferson Bankshares,
said, "With consolidation taking place throughout the banking industry, many
community banks are attempting to align themselves with institutions that can
provide customers the broadest array of products and services. Wachovia and
Jefferson National are compatible in culture and the desire to provide
top-quality service. This merger enables Jefferson National employees to
continue to play an important role in meeting the financial services needs of
customers and communities we serve."
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Merger Agreement-Page 2
Following completion of the merger of Jefferson Bankshares and
Wachovia, Wachovia will file for regulatory approval to merge Jefferson National
Bank into Wachovia Bank, N.A., the principal banking subsidiary of Wachovia
Corporation.
Jefferson Bankshares, headquartered in Charlottesville, Va., had assets
of $2.1 billion as of March 31, 1997, and is the fifth largest Virginia-based
banking company with 96 offices and 60 ATMs. Jefferson National Bank has the No.
1 deposit share in Charlottesville with additional branch presence in the
Tidewater, Richmond, Fredericksburg and Shenandoah Valley areas of Virginia.
Wachovia Corporation is the 20th largest U.S. banking company with
assets of $47.5 billion at March 31. As of the same date, Wachovia had 473
banking offices and 830 ATMs predominately in North Carolina, South Carolina and
Georgia. Wachovia opened its first Virginia banking office in Norfolk in 1996
and provides a complete line of middle-market corporate banking, municipal
finance, corporate trust, residential mortgage, private banking, sales finance
and statewide commercial mortgage services.
U.S. BANKER magazine rated Wachovia the No. 1 bank in the country for
1996 among banks with assets of more than $25 billion.
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WACHOVIA CORPORATION
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JEFFERSON BANKSHARES
Extending the Virginia Franchise
JUNE 10, 1997
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JEFFERSON BANKSHARES OVERVIEW TABLE I
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o Total Assets -- $2.1 billion
o 5th largest Virginia-based bank with 96 offices with history
dating back to 1914
o Bank operations are geared to a "Super Community Bank" orientation
o Number-one market presence in Charlottesville, Virginia with 27% market share
o Additional branch presence in Tidewater, Richmond, Fredericksburg
and Shenandoah Valley areas of Virginia
STRATEGIC RATIONALE TABLE II
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o Consistent with strategic initiatives to grow via mergers and acquisitions
o Solidifies current Virginia presence and positions Wachovia for accelerated
future growth in the state
o Double Wachovia's loan portfolio in the state
o Low risk, rapid integration opportunity
o Gain #1 market share in attractive Charlottesville MSA
o Leverage Virginia franchise with a broader array of products and services
o Financially attractive
WACHOVIA/JEFFERSON BANKSHARES--JUNE 10, 1997--PAGE 1
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TRANSACTION SUMMARY TABLE III
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Structure: 100% stock issued in tax-free exchange
Exchange ratio: 0.625
Purchase price: $542 million - based on outstanding
shares
$547 million - based on fully diluted
shares
Per Share: $38.83
Accounting: Purchase
Option: 19.9% Stock Option Agreement
Goodwill: Amortized over 25 years
Closing: By October 31, 1997
Note: Based on Wachovia common stock June 9 closing price of
$62.125.
TRANSACTION PRICING DETAIL TABLE IV
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Jefferson Book Value @ March 31, 1997: $14.83
Jefferson Tangible Book Value: $14.28
Premium/Market: 29%
Price/Book: 2.62x
Price/Tangible Book: 2.72x
Price/97 EPS Consensus: 18.9x
Fully Diluted shares 14.1 million
Approximate number of shares issued: 8.8 million
Note: Based on Wachovia common stock June 9 closing price of $62.125.
WACHOVIA/JEFFERSON BANKSHARES--JUNE 10, 1997--PAGE 2
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TRANSACTION ECONOMICS TABLE V
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o Accretive to reported earnings in 1998
o 2-3% accretive on a cash basis in 1998
o Expense savings -- $18 million pre-tax or 25% of projected 1997 expense base
o Potential revenue enhancements of $1.9 million or 10% of projected 1997 fee
income
o Nonrecurring costs and conforming reserves -- $19 million pre-tax
o Share repurchase in 1997 to offset 100% of shares issued for the merger
WACHOVIA/JEFFERSON BANKSHARES--JUNE 10, 1997--PAGE 3
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TRANSACTION MULTIPLES TABLE VI
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Attractively priced transaction, based on conservative assumptions:
o 25% cost savings projections
o 10% revenue enhancements
<TABLE>
<CAPTION>
WB Stand
Adjusted Alone Trading
Transaction Transaction(2) Multiples
----------- --------- ---------
<S> <C> <C> <C>
Book Value 2.62x 2.62x 2.73x
Tangible Book Value 2.72 2.72 2.76
1997E EPS(1) 18.9 13.4 15.0
1998E EPS(1) 16.9 12.2 13.5
<FN>
(1) IBES median estimate
(2) Adjusted for full implementation of cost savings and revenue enhancements
Excludes impact of one-time costs and goodwill
</FN>
</TABLE>
WACHOVIA/JEFFERSON BANKSHARES--JUNE 10, 1997--PAGE 4
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CORPORATE PRO FORMA SUMMARY
FIRST QUARTER 1997 TABLE VII
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<TABLE>
<CAPTION>
Jefferson Wachovia
($ millions) Bankshares Wachovia Pro Forma
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<S> <C> <C> <C>
Assets $2,149 $47,491 $49,640
Loans 1,403 32,570 33,973
Deposits 1,887 28,832 30,719
Equity 207 3,676 3,883
Equity/Assets 9.61% 7.74% 7.82%
Net Income $ 7 $ 163 $ 170
NPAs 6 74 80
Reserve 15 409 424
Efficiency Ratio 59.6% 52.2% NM
Fee Income/Revenues 16.7% 32.5% NM
</TABLE>
WACHOVIA/JEFFERSON BANKSHARES--JUNE 10, 1997--PAGE 5
