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): January 17, 1995
SHAWMUT NATIONAL CORPORATION
(Exact Name of Registrant as Specified in Charter)
Delaware 1-10102 06-1212629
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
Incorporation)
777 Main Street, Hartford, Connecticut 06115
One Federal Street, Boston, Massachusetts 02211
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 986-2000
(617) 292-2000
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Page 1 of 25 pages
Exhibit Index located on Page 4
<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION
AND EXHIBITS.
The following exhibits are filed with this Current
Report on Form 8-K:
EXHIBIT
NUMBER DESCRIPTION
99.1 Press Release of Shawmut National Corporation,
dated January 17, 1995.
-2-
<PAGE>
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.
SHAWMUT NATIONAL CORPORATION
By: (Joel B. Alvord)
-------------------
Joel B. Alvord
Chairman and Chief
Executive Officer
Dated: January 17, 1995
-3-
<PAGE>
EXHIBIT INDEX
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
99.1 Press Release of the Company, dated 5
January 17, 1995, entitled "Shawmut National
Corporation reports fourth quarter net income
of $93.5 million, or $.74 per common share."
-4-
<PAGE>
SHAWMUT NATIONAL CORPORATION
1994 Fourth Quarter and Full Year Results
News Media Contact: Investor Contact:
Vincent Loporchio Thomas R. Rice
(617) 292-3239 (203) 986-4872
SHAWMUT NATIONAL CORPORATION REPORTS
FOURTH QUARTER NET INCOME OF
$93.5 MILLION, OR $.74 PER COMMON SHARE
___________________________________________________________________
BOSTON, Mass., and HARTFORD, Conn., January 17, 1995 - Shawmut
National Corporation (NYSE: SNC) reported net income for the
fourth quarter of 1994 of $93.5 million, or $.74 per common share
versus income, excluding one-time income tax benefits of $70.2
million, of $76.0 million, or $.62 per common share in the fourth
quarter of 1993. Reported net income in the fourth quarter of
1993 was $146.2 million or $1.22 per common share.
Net income for 1994 of $237.4 million, or $1.87 per common share, was
achieved despite merger-related charges of $73.9 million (after-
tax) associated with the integration of three acquisitions during
the second quarter of 1994. In addition to the merger-related
charges, Shawmut also took a restructuring charge in the second
quarter of 1994 of $25.9 million (after-tax) associated with its
cost management program. Excluding these charges, Shawmut's net
income in 1994 would have been $337.2 million, or $2.70 per
common share.
Net income for 1993 of $329.0 million, or $2.75 per common share,
included after-tax charges of $23.6 million associated with the
implementation of a cost management program, $13.0 million
relating to a bulk sale of real estate assets, $9.2 million for
the writedown in the value of excess servicing rights and $2.3
million related to fair lending initiatives. Also included in
1993 results were income tax benefits of $140.7 million
attributable to a change in the accounting for income taxes and
an after-tax charge of $6.6 million relating to a change in
accounting for certain post-employment benefits. Excluding these
items, net income in 1993 would have been $243.0 million, or
$2.00 per common share.
Excluding the above special items from both 1993 and 1994, earnings
increased $.70 per common share, or 35 percent.
Joel B. Alvord, Shawmut's chairman and chief executive officer said,
"For Shawmut, 1994 will be the year remembered for significant
progress on three strategic fronts: improved operating
efficiency, expanded market share in existing markets and
additional business line and geographic diversification.
<PAGE> 5
We take special pride in having achieved a 60.5 percent efficiency
ratio in the fourth quarter reflecting the greatly enhanced
productivity of the company going into 1995. The restructuring
actions implemented in the last two years have captured nearly
$160 million in cost savings relative to the quarterly run-rate
in the fourth quarter of 1992, while the consolidation of
acquisitions generated an additional $22 million in savings."
Alvord also said, "Loan growth in targeted sectors had a strong finish
to the year. Specialized lending, asset-based lending and
consumer installment lending each had a solid year. The
combination of loan growth and enhanced cost efficiency should do
much to offset the effects of rising interest rates on Shawmut's
1995 earnings."
<TABLE>
<CAPTION>
EARNINGS SUMMARY
_________________________________________________________________________
1994 1993
4Q 3Q 2Q(1) 1Q 4Q(2)
<S> <C> <C> <C> <C> <C>
Net Income (Loss) ($ mm) 93.5 85.3 (18.7) 77.3 146.2
Earnings Per Common Share ($) .74 .68 (.19) .62 1.22
Return on Average
Common Equity (%) 17.59 16.52 (4.49) 15.47 31.57
Return on Average Assets (%) 1.16 1.09 (.24) 1.02 1.89
Efficiency Ratio (%) 60.5 62.8 65.4 65.7 64.5
</TABLE>
(1) Second quarter 1994 results include merger-related charges
totaling $73.9 million after-tax, and a restructuring charge of
$25.9 million after-tax. Excluding these items, net income
would have been $81.1 million, or $.65 per common share,
return on average assets 1.05 percent and return on average
common equity 15.40 percent.
(2) Fourth quarter 1993 results include income tax benefits of
$70.2 million.
<PAGE> 6
Balance Sheet Repositioning and Rising Rates Reduce Net Interest Income
Tax-equivalent net interest income for the fourth quarter was $265.9
million, a decline of $3.0 million, or 1 percent relative to
third quarter results. Strong earning-asset growth driven by an
increase in loans of $751 million, or 17 percent on an annualized
basis, in the fourth quarter relative to the prior quarter was
insufficient to offset the 13 basis point decline in net interest
margin to 3.65 percent.
In reaction to an outlook for rising interest rates, the company
continued implementation of its risk reduction strategy by
extending aggregate funding maturities and shortening the
maturities of certain assets. While this strategy is designed to
reduce the pressure on net interest income should interest rates
continue to rise, its immediate effect was also to reduce net
interest margin.
One measure of the effectiveness of this strategy is the reduction in
the gap between liabilities repricing over the next twelve months
relative to assets repricing during this period. At the end of
the fourth quarter, this one year gap was $1.3 billion liability
sensitive, or approximately 4 percent of interest-earning assets.
This liability sensitive position was more than halved from the
$2.8 billion, or 10 percent of interest-earning assets, at the
end of the third quarter.
The company's exposure to a reduction in annualized net interest
income resulting from an immediate 100 basis point increase in
interest rates was also reduced by these balance sheet actions to
approximately $12 million or an amount that approximates one
percent of full year 1994 net interest income. At the end of the
third quarter of 1994, the earnings exposure to the same
immediate shift in the yield curve had been approximately $21
million.
<PAGE> 7
INCOME STATEMENT HIGHLIGHTS
__________________________________________________________________________
($ in millions)
<TABLE>
<CAPTION> 1994 1993
4Q 3Q 2Q 1Q 4Q
<S> <C> <C> <C> <C> <C>
Net Interest Income (T-E) $ 265.9 $ 268.9 $ 268.7 $ 275.4 $ 282.8
Tax Equivalent Adjustment (2.5) (3.0) (3.0) (2.9) (3.1)
Net Inte rest Income 263.4 265.9 265.7 272.5 279.7
Noninterest Income (a) 104.2 90.9 93.9 89.5 95.8
Noninterest Expenses (b) 224.0 225.8 237.1 239.8 244.3
Provision for Credit Losses ---- ---- ---- 3.0 10.2
Provision for Foreclosed
Properties .5 .6 .9 2.0 6.5
Securities Gains (Losses) ---- .8 ---- (.8) 1.5
Subtotal 143.1 131.2 121.6 116.4 116.0
Merger Related Charges ---- ---- 100.9 ---- ----
Restructuring Related Charges ---- ---- 39.8 ---- ----
Fair Lending Related Charges ---- ---- ---- ---- 3.5
Pre-Tax Income (Loss) 143.1 131.2 (19.1) 116.4 112.5
Income Taxes (Benefit) 49.6 45.9 (.4) 39.1 (33.7)
Net Income (Loss) $ 93.5 $ 85.3 $ (18.7) $ 77.3 $ 146.2
ROA (%) 1.16 1.09 (.24) 1.02 1.89
ROCE (%) 17.59 16.52 (4.49) 15.47 31.57
Net Interest Margin (%) 3.65 3.78 3.76 3.91 3.99
Efficiency Ratio (%) (a) (b) 60.5 62.8 65.4 65.7 64.5
COMMON SHARE DATA:
Net Income (Loss) ($) .74 .68 (.19) .62 1.22
(a) Excludes securities gains and losses.
(b) Excludes provision for foreclosed properties and merger and
restructuring-related charges.
</TABLE>
<PAGE> 8
INCOME STATEMENT HIGHLIGHTS - FULL YEAR 1994 & 1993
__________________________________________________________________________
($ in millions)
<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Net Interest Income (T-E) $ 1,078.9 $ 1,085.0
Tax Equivalent Adjustment (11.4) (13.4)
Net Interest Income 1,067.5 1,071.6
Noninterest Income (a) 378.5 398.3
Noninterest Expenses (b) 926.7 1,020.7
Provision for Credit Losses 3.0 55.9
Provision for Foreclosed
Properties 4.0 76.6
Securities Gains, Net ---- 12.5
Subtotal 512.3 329.2
Merger Related Charges 100.9 ----
Restructuring Related Charges 39.8 36.3
Fair Lending Related Charges ---- 3.5
Pre-Tax Income 371.6 289.4
Income Taxes 134.2 6.6
Income Before Cumulative Effect of
Accounting Changes 237.4 282.8
Cumulative Effect of Accounting
Changes ---- 46.2
Net Income $ 237.4 $ 329.0
ROA(%) .76 1.12
ROCE(%) 11.22 18.90
Net Interest Margin (%) 3.78 4.03
Efficiency Ratio (%) (a) (b) 63.6 67.8
COMMON SHARE DATA:
Income Before Cumulative Effect of
Accounting Changes ($) 1.87 2.35
Net Income ($) 1.87 2.75
(a) Excludes securities gains.
(b) Excludes provision for foreclosed properties and special
items.
</TABLE>
<PAGE> 9
NONINTEREST INCOME
_________________________________________________________________________
($ in millions)
<TABLE>
<CAPTION>
1994 1993
4Q 3Q 2Q 1Q 4Q
<S> <C> <C> <C> <C> <C>
Customer Service Fees $ 49.8 $ 48.7 $ 48.8 $ 48.5 $ 46.0
Trust and Agency Fees 30.5 28.5 29.1 29.4 29.5
Loan Servicing 12.5 4.6 10.5 4.5 1.0
Foreign Exchange Trading 2.8 ---- (1.1) (.7) 2.7
Trading Account Profits 1.0 1.0 1.3 1.2 1.3
Residential Mortgage Sales ---- .9 .1 1.0 2.8
FDIC Assistance ---- ---- ---- ---- 2.2
Other 7.6 7.2 5.2 5.6 10.3
Subtotal 104.2 90.9 93.9 89.5 95.8
Securities Gains (Losses) ---- .8 ---- (.8) 1.5
Total Noninterest Income $ 104.2 $ 91.7 $ 93.9 $ 88.7 $ 97.3
</TABLE>
<PAGE> 10
Noninterest Income of $104.2 Million
Noninterest income, excluding securities gains and losses, was $104.2
million for the fourth quarter of 1994, an increase of $13.3
million from the third quarter of 1994. This increase included
a gain of $8.2 million from the sale of mortgage servicing rights
in the fourth quarter. There were no material gains from sales
of this type in the third quarter of 1994. Foreign exchange
trading showed income of $2.8 million in the fourth quarter
versus a break-even third quarter. Other areas showing growth
included trust and agency where fees were up by $2.0 million
versus the third quarter. This improvement resulted from the
acquisition of Poorman-Douglas which added $2.2 million to fourth
quarter trust and agency fees.
Noninterest income, excluding securities gains, for 1994 totaled
$378.5 million, compared with $398.3 million in 1993. Included
in noninterest income in 1993 were increased residential mortgage
sale gains of $24.6 million and $13.8 million in FDIC assistance
received by acquired institutions. Noninterest income for 1994
included increased gains on sales of mortgage servicing of $12.8
million, and increases of $12.8 million in credit and trade
related service fees, and $6.2 million in deposit and transaction
fees. These increases were partially offset by declines of $10.0
million in cash management fees reflecting both an increase in
customers' earnings credits for deposit balances and competitive
pricing pressure, and a net decline of $3.2 million in other
fees.
Efficiency Ratio of 60.5 Percent Achieved in Fourth Quarter
Shawmut achieved a 60.5 percent efficiency ratio in the fourth
quarter, just short of its stated objective of 60 percent. The
efficiency ratio improved by 230 basis points from 62.8 percent
in the third quarter of 1994 and improved by 400 basis points
from 64.5 percent in last year's fourth quarter. For full year
1994 the efficiency ratio was 63.6 percent, or an improvement of
420 basis points over 1993's 67.8 percent efficiency ratio.
Noninterest expenses, excluding provision for foreclosed properties,
decreased by $1.8 million, or one percent, from the third quarter
of 1994 to $224.0 million. Fourth quarter noninterest expenses
included $4.1 million in expenses from recent acquisitions which
received purchase accounting treatment and therefore these
incremental expenses were not reflected in prior quarters.
Excluding provision for foreclosed properties and special items
as noted above, noninterest expenses for 1994 were $926.7
million, or 9 percent lower, compared to $1,020.7 million in
1993.
<PAGE> 11
Total personnel expenses declined by $7.9 million, or 7 percent
relative to the $118.8 million level reported in 1994's third
quarter. Relative to the same quarter a year ago, the decline
was $14.3 million, or 11 percent. These cost savings followed a
significant decline in head count of 1,783, or 16 percent,
measured on a full-time equivalent (FTE) basis relative to the
year-end 1993 totals. In the fourth quarter alone, headcount was
reduced by 405 FTE's. The actions which produced these results
were a part of the company's continuing restructuring program and
acquisition consolidation.
NONINTEREST EXPENSES
__________________________________________________________________________
($ in millions)
<TABLE>
<CAPTION>
1994 1993
4Q 3Q 2Q 1Q 4Q
<S> <C> <C> <C> <C> <C>
Compensation $ 91.9 $ 97.9 $ 100.0 $ 102.2 $ 105.2
Employee Benefits 19.0 20.9 22.6 23.6 20.0
Occupancy 24.1 23.8 25.0 26.3 25.7
Equipment 14.5 14.2 13.1 13.4 14.3
FDIC Insurance 10.5 10.3 11.1 11.8 12.6
Communications 12.1 10.3 10.1 10.4 11.0
Advertising 4.3 4.5 6.6 4.5 5.8
Foreclosed Properties Expense 1.0 .5 2.5 3.7 3.1
Other 46.6 43.4 46.1 43.9 46.6
Subtotal 224.0 225.8 237.1 239.8 244.3
Merger Related Expenses ---- ---- 100.9 ---- ----
Restructuring Related Expenses ---- ---- 39.8 ---- ----
Fair Lending Related Expenses ---- ---- ---- ---- 3.5
Provision for Foreclosed
Properties .5 .6 .9 2.0 6.5
Total Noninterest Expenses $ 224.5 $ 226.4 $ 378.7 $ 241.8 $ 254.3
Branches (not restated) 338 354 367 270 270
Employees (FTE's) 9,565 9,970 10,495 11,002 11,348
Efficiency Ratio (percent) 60.5 62.8 65.4 65.7 64.5
</TABLE>
<PAGE> 12
No Provision for Credit Losses for the Fourth Quarter of 1994
The fourth quarter continued Shawmut's 1994 pattern of having no
provision for credit losses (an originally reported zero
provision in the first quarter of 1994 was restated to $3.0
million to reflect provisioning actions of acquired banks). The
provision for credit losses in the fourth quarter of 1993 was
$10.2 million. With continuing increases in reserve coverage and
improving credit quality in the loan portfolio, Shawmut does not
currently anticipate that provisions for credit losses will be
necessary in the first half and possibly all of 1995.
Net charge-offs were $25.7 million during the fourth quarter of 1994.
This compares with net charge-offs of $26.3 million during the
third quarter of 1994 and $35.1 million during the fourth quarter
a year ago.
The provision for foreclosed properties was $.5 million in the fourth
quarter of 1994, down from $.6 million in the third quarter of
1994 and down from $6.5 million during the fourth quarter of
1993.
Income Taxes
Income taxes for the fourth quarter of 1994 were $49.6 million,
representing an effective income tax rate of 34.7 percent. This
compares with income taxes of $36.5 million for the comparable
prior year quarter, or an effective income tax rate of 32.4
percent, prior to the recognition of $70.2 million of income tax
benefits associated with the reduction of the deferred tax asset
valuation allowance.
<PAGE> 13
ASSET SUMMARY
__________________________________________________________________________
($ in millions)
<TABLE>
<CAPTION>
1994 1993
4Q 3Q 2Q 1Q 4Q
<S> <C> <C> <C> <C> <C>
Average Balances
Cash and Due from Banks $ 1,891 $ 1,478 $ 1,464 $ 1,551 $ 1,576
Loans 18,174 17,516 17,674 17,170 17,124
Reserve for Credit Losses (562) (595) (633) (668) (696)
Net Loans 17,612 16,921 17,041 16,502 16,428
Securities 10,226 10,079 10,358 10,446 10,378
Other Earning Assets 679 800 550 670 749
Total Earning Assets 29,079 28,395 28,582 28,286 28,251
Other Assets 1,670 1,701 1,696 1,584 1,496
Total Assets $ 32,078 $ 30,979 $ 31,109 $ 30,753 $ 30,627
End of Period Balances
Cash and Due from Banks $ 1,986 $ 1,461 $ 1,320 $ 1,358 $ 1,540
Loans 18,487 17,736 17,329 17,559 17,598
Reserve for Credit Losses (542) (568) (590) (639) (669)
Net Loans 17,945 17,168 16,739 16,920 16,929
Securities 9,992 10,287 9,846 10,365 10,342
Other Earning Assets 849 635 1,095 735 576
Total Earning Assets 29,328 28,658 28,270 28,659 28,516
Other Assets 1,627 1,801 1,692 1,869 1,716
Total Assets $ 32,399 $ 31,352 $ 30,692 $ 31,247 $ 31,103
</TABLE>
Average Interest-Earning Assets Up $684 Million in Fourth Quarter
Shawmut's total average interest-earning assets increased by $684
million, or 2 percent, from the third quarter of 1994. The
performance was largely propelled by strong loan growth with
average loans up by $658 million, or 4 percent, relative to the
third quarter 1994 averages.
<PAGE> 14
LOANS BY TYPE
__________________________________________________________________________
Period End - $ in millions)
<TABLE>
<CAPTION>
1994 1993
4Q 3Q 2Q 1Q 4Q
<S> <C> <C> <C> <C> <C>
Commercial/Industrial $ 7,006.4 $ 6,201.3 $ 5,992.7 $ 6,188.7 $ 6,393.5
Owner-Occupied
Commercial Real Estate 1,412.0 1,423.4 1,407.1 1,421.8 1,492.8
Real Estate Investor/
Developer
Commercial Mortgage 1,309.2 1,401.3 1,461.0 1,518.7 1,526.5
Construction & Other 157.4 150.5 150.9 152.1 160.7
Total Investor/Developer 1,466.6 1,551.8 1,611.9 1,670.8 1,687.2
Consumer
Residential Mortgage 5,592.1 5,608.1 5,474.0 5,570.3 5,325.9
Home Equity 1,625.7 1,628.8 1,609.9 1,580.1 1,637.8
Installment/Other 1,384.3 1,322.5 1,233.5 1,127.5 1,060.5
Total Consumer 8,602.1 8,559.4 8,317.4 8,277.9 8,024.2
TOTAL $ 18,487.1 $ 17,735.9 $ 17,329.1 $ 17,559.2 $ 17,597.7
</TABLE>
Loans Up $751 million in Fourth Quarter of 1994
Shawmut's period-end loan portfolio grew by $751 million, or 17
percent on an annualized basis, in the fourth quarter of 1994
compared with the third quarter. The commercial and industrial
portfolio was up sharply from the previous quarter with much of
the increase coming from specialized lending. Showing good loan
growth in the consumer sector was installment lending which was
up $62 million, or 5 percent in the quarter.
<PAGE> 15
CREDIT QUALITY
__________________________________________________________________________
($ in millions)
<TABLE>
<CAPTION>
1994 1993
4Q 3Q 2Q 1Q 4Q
<S> <C> <C> <C> <C> <C>
Nonaccruing Loans $ 224.0 $ 265.9 $ 285.2 $ 328.6 $ 372.9
Foreclosed Properties 18.8 32.1 42.5 51.5 64.5
Total Problem Assets $ 242.8 $ 298.0 $ 327.7 $ 380.1 $ 437.4
Restructured Loans $ 41.8 $ 31.1 $ 63.8 $ 63.6 $ 73.3
Accruing Loans Past Due
90 Days or More $ 43.3 $ 53.1 $ 47.8 $ 46.4 $ 42.6
Reserve for Credit Losses $ 542.1 $ 567.8 $ 589.8 $ 638.5 $ 669.2
Problem Assets as a Percent
of Loans Plus Foreclosed
Properties 1.31% 1.68% 1.89% 2.16% 2.48%
Reserve as a Percent of
Nonaccruing Loans 242% 214% 207% 194% 179%
_____________________________________________________________________________
PROBLEM ASSET FLOWS
Inflows $ 55.4 $ 64.9 $ 56.8 $ 52.6 $ 94.5
Outflows* $ 69.9 $ 60.9 $ 67.1 $ 58.9 $ 112.0
</TABLE>
* Outflows are cash payments, transfers to accruing or to
restructured, and sales.
Problem Assets Decline by 19 Percent during the Fourth Quarter of 1994
Total problem assets at December 31, 1994 declined to $242.8 million,
down $55.2 million, or 19 percent, from $298.0 million at
September 30, 1994 and down $194.6 million, or 44 percent, from
$437.4 million a year ago. The ratio of nonaccruing loans plus
foreclosed properties to loans plus foreclosed properties declined
to 1.31 percent at December 31, 1994, compared with 1.68 percent
at September 30, 1994 and 2.48 percent at December 31, 1993.
Foreclosed properties declined by $13.3 million, or 41 percent, to
$18.8 million at December 31, 1994 from $32.1 million at September
30, 1994.
<PAGE> 16
RESERVE FOR CREDIT LOSSES
__________________________________________________________________________
($ in millions)
<TABLE>
<CAPTION>
1994 1993
4Q 3Q 2Q 1Q 4Q
<S> <C> <C> <C> <C> <C>
Balance at Beginning of Period $ 567.8 $ 589.8 $ 638.5 $ 669.2 $ 694.1
Net Charge-offs 25.7 26.3 48.7(1) 33.7 35.1
Addition for Loans Purchased ---- 4.3 ---- ---- ----
Provision for Credit Losses ---- ---- ---- 3.0 10.2
Balance at End of Period $ 542.1 $ 567.8 $ 589.8 $ 638.5 $ 669.2
Provision for Foreclosed Properties $ .5 $ .6 $ .9 $ 2.0 $ 6.5
Reserve as a Percent of
Nonaccruing Loans 242% 214% 207% 194% 179%
</TABLE>
(1) Includes $24.7 million relating to the acquired
institutions.
Reserve Coverage of Nonaccruing Loans Rises to 242 Percent
The reserve for credit losses was $542.1 million at December 31, 1994,
compared with $567.8 million at September 30, 1994 and $669.2
million at December 31, 1993. Reserve coverage continued to
strengthen as the ratio of the reserve for credit losses to
nonaccruing loans was 242 percent at December 31, 1994,
compared with 179 percent a year earlier. The reserve coverage
was 214 percent at September 30, 1994. Net charge-offs were
$25.7 million in the fourth quarter, down $9.4 million, or 27
percent, from the same quarter a year ago.
<PAGE> 17
CAPITAL
__________________________________________________________________________
($ in millions, except per share data)
<TABLE>
<CAPTION>
1994 1993
4Q 3Q 2Q 1Q 4Q
<S> <C> <C> <C> <C> <C>
Common Equity $ 2,019 $ 1,951 $ 1,890 $ 1,937 $ 1,908
Tangible Common Equity (a) 1,865 1,800 1,772 1,828 1,799
Total Shareholders' Equity 2,197 2,129 2,068 2,130 2,102
Tier 1 Capital 2,097 2,017 1,979 2,043 1,977
Total Capital 2,922 2,858 2,814 2,904 2,862
Goodwill 154 152 119 108 110
Total Intangibles 168 168 136 127 128
Total Assets 32,399 31,352 30,692 31,247 31,103
Capital Ratios (%)
Common Equity Ratio 6.23 6.22 6.16 6.20 6.14
Tangible Common Equity Ratio 5.75 5.74 5.77 5.85 5.78
Tier 1 Capital Ratio (b) 8.37 8.47 8.49 8.90 8.79
Total Capital Ratio (b) 11.66 11.99 12.07 12.65 12.73
Leverage Ratio 6.56 6.54 6.38 6.66 6.48
Book Value Per Share ($) 16.72 16.32 15.93 16.41 16.25
Average Common Shares
Outstanding (millions) 120.3 119.3 118.4 117.8 117.1
</TABLE>
(a) Defined as common equity less goodwill.
(b) As a percent of risk adjusted assets. Fourth quarter 1994
data are preliminary.
Book Value Increases to $16.72 Per Share
Book value per share increased by $.40, or 2 percent, to $16.72 per
share in the fourth quarter of 1994 from September 30, 1994.
Common shareholders' equity increased by $68 million in the
fourth quarter of 1994. Shawmut's preliminary Risk-based Tier 1
and Total capital ratios were 8.37 percent and 11.66 percent,
respectively, at December 31, 1994, compared with 8.47 percent
and 11.99 percent, respectively, at September 30, 1994. The
Leverage ratio, a measure of Tier 1 capital to quarterly average
assets, was 6.56 percent at December 31, 1994, compared with
6.54 percent at September 30, 1994. The Corporation's and its principal
banking subsidiaries' risk-based capital and leverage ratios continue
to exceed the ratios designated for well-capitalized financial institutions.
<PAGE> 18
COMMON STOCK/OTHER DATA
__________________________________________________________________________
<TABLE>
<CAPTION>
1994 1993
4Q 3Q 2Q 1Q 4Q
<S> <C> <C> <C> <C> <C>
Market Value Per Share ($)
End of Period 16 3/8 20 3/4 22 20 1/4 21 3/4
High 20 7/8 23 24 3/4 23 7/8 24 7/8
Low 16 3/8 20 5/8 19 1/2 20 1/8 20 1/8
Average Daily Volume (000) 503 448 632 499 367
Book Value Per Share(1) ($) 16.72 16.32 15.93 16.41 16.25
(1) Period End
</TABLE>
Other Noteworthy Items in the Quarter Included:
Shawmut National to Acquire Business Finance Division of Barclays
Business Credit - November 14
Shawmut National Corporation signed a definitive agreement to
acquire the net assets of the Business Finance Division of
Barclays Business Credit, Inc., the U.S. commercial finance
operation of Barclays, PLC, for a cash premium of $290 million.
Barclays Business Credit, Inc. based in Glastonbury, CT,
provides asset-based financing to middle-market companies
through fifteen offices nationwide. As of September 30, 1994,
total receivables outstanding approximated $2.1 billion.
Barclays Business Credit, Inc. traces its roots back over seventy-
five years. Over 90 percent of outstanding receivables are
located outside New England, and over 80 percent outside the
Northeast. Outstanding receivables have grown at a five year
compound rate of 15 percent, while net losses have been held
well below commercial finance industry norms. The transaction
is expected to close in the first quarter of 1995. The
proceeds of a preferred stock offering anticipated for the
first quarter will be used toward the funding required for the
acquisition.
<PAGE> 19
Shawmut National to Purchase Old Stone Trust Company - November 21
Shawmut National Corporation announced that the Resolution Trust
Corporation selected Shawmut as the winning bidder for the Old
Stone Trust Company, based in Providence, Rhode Island. Old
Stone Trust had managed and custody assets totaling $417
million at September 30, 1994. A purchase price was not
disclosed.
Shawmut National Increases Dividend by 10 Percent - December 15
Shawmut National Corporation increased the quarterly common dividend
by 10 percent to $.22 per share. The dividend is payable
January 15 to holders of record as of January 5. Shawmut last
announced an increase in its quarterly dividend in December,
1993, doubling the dividend payable in January, 1994 to $.20
per share.
<PAGE> 20
SHAWMUT NATIONAL CORPORATION
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
(in millions, except QUARTER ENDED
per share data) DEC 94 SEP 94 JUN 94 MAR 94 DEC 93
INTEREST INCOME AND EXPENSES
<S> <C> <C> <C> <C> <C>
Tax-equivalent interest
and dividend income $ 524.6 $ 492.8 $ 474.6 $ 457.3 $ 466.2
Interest expense 258.7 223.9 205.9 181.9 183.4
Tax-equivalent net
interest income 265.9 268.9 268.7 275.4 282.8
Tax-equivalent adjustment 2.5 3.0 3.0 2.9 3.1
Net interest income 263.4 265.9 265.7 272.5 279.7
Provision for credit losses 3.0 10.2
Net interest income after
provision for credit losses 263.4 265.9 265.7 269.5 269.5
NONINTEREST INCOME
Customer service fees 49.8 48.7 48.8 48.5 46.0
Trust and agency fees 30.5 28.5 29.1 29.4 29.5
Securities gains (losses), net -- 0.8 -- (0.8) 1.5
Other 23.9 13.7 16.0 11.6 20.3
Total 104.2 91.7 93.9 88.7 97.3
NONINTEREST EXPENSES
Compensation and benefits 110.9 118.8 122.6 125.8 125.2
Occupancy and equipment 38.6 38.0 38.1 39.7 40.0
Foreclosed properties
Provision 0.5 0.6 0.9 2.0 6.5
Expenses 1.0 0.5 2.5 3.7 3.1
Merger related charges 100.9
Restructuring related charges 39.8
Fair lending related charges 3.5
Other 73.5 68.5 73.9 70.6 76.0
Total 224.5 226.4 378.7 241.8 254.3
Income (loss) before income taxes 143.1 131.2 (19.1) 116.4 112.5
Income taxes (benefit) 49.6 45.9 (0.4) 39.1 (33.7)
Net income (loss) $ 93.5 $ 85.3 $ (18.7) $ 77.3 $ 146.2
COMMON SHARE DATA
Net income (loss) $ 0.74 $ 0.68 $ (0.19) $ 0.62 $ 1.22
Dividends declared 0.22 0.20 0.20 0.20 0.20
Book value 16.72 16.32 15.93 16.41 16.25
Average shares 120.3 119.3 118.4 117.8 117.1
End of period shares 120.8 119.6 118.6 118.0 117.4
Preferred dividends declared $ 3.8 $ 3.9 $ 3.8 $ 3.9 $ 3.9
</TABLE>
<PAGE> 21
<TABLE>
<CAPTION>
(in millions, except YEAR ENDED DECEMBER
per share data) 1994 1993
INTEREST INCOME AND EXPENSES
<S> <C> <C>
Tax-equivalent interest
and dividend income $ 1,949.3 $ 1,840.4
Interest expense 870.4 755.4
Tax-equivalent net
interest income 1,078.9 1,085.0
Tax-equivalent adjustment 11.4 13.4
Net interest income 1,067.5 1,071.6
Provision for credit losses 3.0 55.9
Net interest income after
provision for credit losses 1,064.5 1,015.7
NONINTEREST INCOME
Customer service fees 195.8 186.5
Trust and agency fees 117.5 116.8
Securities gains, net -- 12.5
Other 65.2 95.0
Total 378.5 410.8
NONINTEREST EXPENSES
Compensation and benefits 478.1 500.3
Occupancy and equipment 154.4 163.8
Foreclosed properties
Provision 4.0 76.6
Expenses 7.7 28.6
Merger related charges 100.9
Restructuring related charges 39.8 36.3
Other 286.5 331.5
Total 1,071.4 1,137.1
Income before income taxes
and accounting changes 371.6 289.4
Income taxes 134.2 6.6
Income before accounting changes 237.4 282.8
Cumulative effect of
accounting changes 46.2
Net income $ 237.4 $ 329.0
COMMON SHARE DATA
Income before accounting changes $ 1.87 $ 2.35
Net income 1.87 2.75
Dividends declared 0.82 0.50
Book value 16.72 16.25
Average shares 119.0 113.9
End of period shares 120.8 117.4
Preferred dividends declared $ 15.4 $ 15.5
</TABLE>
<PAGE> 22
<TABLE>
<CAPTION>
QUARTER ENDED
(in millions) DEC 94 SEP 94 JUN 94 MAR 94 DEC 93
AVERAGE BALANCES
<S> <C> <C> <C> <C> <C>
Loans $ 18,174 $ 17,516 $ 17,674 $ 17,170 $ 17,124
Securities 10,226 10,079 10,358 10,446 10,378
Interest-earning assets 29,079 28,395 28,582 28,286 28,251
Total assets 32,078 30,979 31,109 30,753 30,627
Core deposits 18,112 17,877 17,635 17,642 18,065
Other borrowings 7,546 7,527 9,101 9,292 8,753
Notes and debentures 1,860 1,619 1,108 760 815
Interest-bearing liabilities 24,639 24,034 24,174 23,831 23,757
Common shareholders' equity 2,021 1,955 2,012 1,925 1,789
Shareholders' equity 2,199 2,134 2,200 2,118 1,983
END OF PERIOD BALANCES
Loans $ 18,487 $ 17,736 $ 17,329 $ 17,559 $ 17,598
Securities 9,992 10,287 9,846 10,365 10,342
Interest-earning assets 29,328 28,658 28,270 28,659 28,516
Total assets 32,399 31,352 30,692 31,247 31,103
Core deposits 18,337 17,788 18,245 17,251 18,112
Other borrowings 7,087 7,669 7,311 10,052 9,283
Notes and debentures 2,022 1,634 1,609 859 759
Interest-bearing liabilities 24,693 24,439 23,624 24,663 24,029
Common shareholders' equity 2,019 1,951 1,890 1,937 1,908
Shareholders' equity 2,197 2,129 2,068 2,130 2,102
Tier 1 capital (a) 2,097 2,017 1,979 2,043 1,977
Total capital (a) 2,922 2,858 2,814 2,904 2,862
</TABLE>
(a) December 1994 data are preliminary.
<PAGE> 23
<TABLE>
<CAPTION>
QUARTER ENDED
(in millions) DEC 94 SEP 94 JUN 94 MAR 94 DEC 93
LOANS BY TYPE
<S> <C> <C> <C> <C> <C>
Commercial/industrial $ 7,006.4 $ 6,201.3 $ 5,992.7 $ 6,188.7 $ 6,393.5
Owner-occupied commercial
real estate 1,412.0 1,423.4 1,407.1 1,421.8 1,492.8
Real estate investor/
developer
Commercial mortgage 1,309.2 1,401.3 1,461.0 1,518.7 1,526.5
Construction and other 157.4 150.5 150.9 152.1 160.7
Consumer
Residential mortgage 5,592.1 5,608.1 5,474.0 5,570.3 5,325.9
Home equity 1,625.7 1,628.8 1,609.9 1,580.1 1,637.8
Installment/other 1,384.3 1,322.5 1,233.5 1,127.5 1,060.5
Total $ 18,487.1 $ 17,735.9 $ 17,329.1 $ 17,559.2 $ 17,597.7
NONACCRUING LOANS
BY TYPE
Commercial/industrial $ 36.0 $ 59.3 $ 60.6 $ 63.6 $ 85.0
Owner-occupied commercial
real estate 57.6 59.8 67.5 72.8 79.6
Real estate investor/
developer
Commercial mortgage 66.9 65.9 70.6 92.0 97.4
Construction and other 16.0 24.1 20.9 24.9 25.0
Consumer
Residential mortgage 38.4 46.2 48.8 61.2 71.7
Home equity 6.6 7.0 8.2 9.2 8.7
Installment/other 2.5 3.6 8.6 4.9 5.5
Total $ 224.0 $ 265.9 $ 285.2 $ 328.6 $ 372.9
FORECLOSED PROPERTIES BY TYPE
Real estate investor/
developer $ 12.6 $ 25.3 $ 35.0 $ 39.7 $ 51.7
Residential mortgage 6.2 6.8 7.5 11.8 12.8
Total $ 18.8 $ 32.1 $ 42.5 $ 51.5 $ 64.5
</TABLE>
<PAGE> 24
<TABLE>
<CAPTION>
(in millions, except QUARTER ENDED
ratio data) DEC 94 SEP 94 JUN 94 MAR 94 DEC 93
ASSET QUALITY
<S> <C> <C> <C> <C> <C>
Nonaccruing loans
Less than 90 days past due $ 72.5 $ 72.5 $ 78.1 $ 90.2 $ 106.9
90 or more days past due 151.5 193.4 207.1 238.4 266.0
Total nonaccruing loans 224.0 265.9 285.2 328.6 372.9
Foreclosed properties 18.8 32.1 42.5 51.5 64.5
Total nonaccruing loans plus
foreclosed properties $ 242.8 $ 298.0 $ 327.7 $ 380.1 $ 437.4
Restructured loans $ 41.8 $ 31.1 $ 63.8 $ 63.6 $ 73.3
Accruing loans past
due 90 days or more $ 43.3 $ 53.1 $ 47.8 $ 46.4 $ 42.6
Nonaccruing loans to loans 1.21 % 1.50 % 1.65 % 1.87 % 2.12 %
Nonaccruing loans plus
foreclosed properties to loans
plus foreclosed properties 1.31 1.68 1.89 2.16 2.48
Reserve for credit losses to
nonaccruing loans 242.00 214.00 207.00 194.00 179.00
RESERVE FOR CREDIT LOSSES
Beginning balance $ 567.8 $ 589.8 $ 638.5 $ 669.2 $ 694.1
Provision 3.0 10.2
Addition for loans purchased 4.3
Loan charge-offs (43.5) (40.7) (60.5) (45.7) (53.0)
Recoveries 17.8 14.4 11.8 12.0 17.9
Net charge-offs (25.7) (26.3) (48.7) (33.7) (35.1)
Ending balance $ 542.1 $ 567.8 $ 589.8 $ 638.5 $ 669.2
Net charge-offs (annualized) to
average loans 0.57 % 0.60 % 1.10 % 0.78 % 0.82 %
Reserve for credit losses to loans 2.93 3.20 3.40 3.64 3.80
Reserve for credit losses to
net charge-offs (annualized) 5.28 X 5.40 X 3.03 X 4.75 X 4.76 X
</TABLE>
-30-
<PAGE> 25
