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): July 19, 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 22 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 July 19, 1995, entitled "Shawmut National
Corporation reports second quarter operating results
of $91.1 million, or $.68 per common share."
<PAGE> -2-
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: (Susan E. Lester)
--------------------------
Susan E. Lester
Chief Financial Officer and
Executive Vice President
Dated: July 21, 1995
<PAGE> -3-
EXHIBIT INDEX
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
99.1 Press Release of Shawmut National Corporation, 5
dated July 19, 1995, entitled "Shawmut National
Corporation reports second quarter operating results
of $91.1 million, or $.68 per common share."
<PAGE> -4-
SHAWMUT NATIONAL CORPORATION
1995 Second Quarter Results
News Media Contact: Investor Contact:
Vincent Loporchio Thomas R. Rice
(617) 292-3239 (203) 986-4872
SHAWMUT NATIONAL CORPORATION REPORTS SECOND QUARTER
OPERATING RESULTS OF $91.1 MILLION, OR $.68 PER COMMON SHARE
___________________________________________________________________
BOSTON, Mass., and HARTFORD, Conn., July 19, 1995 - Shawmut National
Corporation (NYSE:SNC) reported operating income of $91.1
million for the second quarter of 1995, or $.68 per common share,
an increase of 3 percent from the $.66 per common share operating
results earned in the first quarter of 1995. Second quarter 1995
operating income excluded a $13.6 million pre-tax charge ($8.5
million after-tax) for the settlement of certain compensation
expenses triggered by shareholder approval of the agreement to
merge with Fleet Financial Group. Including this merger-related
charge, net income for the second quarter of 1995 was $82.6
million, or $.61 per common share. After adjusting for merger
and restructuring-related charges in both the first and second
quarters of 1995 as well as 1994's second quarter, operating
income grew by $5.4 million, or 6 percent, versus the first
quarter and by $10.0 million, or 12 percent, versus the second
quarter a year ago.
Commenting on second quarter results, Joel B. Alvord, Shawmut's
chairman and chief executive officer said, "Growth in loans and
fee income supported by efficiency enhancements generated solid
financial results in the quarter. These results demonstrate the
continuing success of our acquisition, cost containment and asset
quality strategies."
Mr. Alvord also commented on the pending merger with Fleet Financial
Group observing, "Integration planning for Shawmut's merger with
Fleet is proceeding smoothly, and we remain on a schedule for
regulatory approvals consistent with a fourth quarter close."
Also of note in the quarter were the acquisition of Northeast Federal
which closed on June 9 and the June 21 authorization by the board
of directors of a common stock repurchase program expected to
result in the repurchase of up to 9 million shares before year-
end 1995.
<PAGE> 5
SHAWMUT NATIONAL CORPORATION
1995 Second Quarter Results
<TABLE>
INCOME STATEMENT HIGHLIGHTS
____________________________________________________________________________
($ in millions)
<CAPTION>
1995 1994
2Q 1Q 4Q 3Q 2Q
<S> <C> <C> <C> <C> <C>
Net Interest Income (T-E) $ 271.5 $ 273.2 $ 265.9 $ 268.9 $ 268.7
Tax Equivalent Adjustment (3.1) (2.9) (2.5) (3.0) (3.0)
Net Interest Income 268.4 270.3 263.4 265.9 265.7
Noninterest Income 111.7 95.3 104.2 91.7 93.9
Noninterest Expenses (1) 234.5 228.7 224.5 226.4 238.0
Provision for Credit Losses ---- ---- ---- ---- ----
Subtotal 145.6 136.9 143.1 131.2 121.6
Merger Related Charges 13.6 36.9 ---- ---- 100.9
Restructuring Related Charges ---- ---- ---- ---- 39.8
Pre-Tax Income (Loss) 132.0 100.0 143.1 131.2 (19.1)
Income Taxes (Benefit) 49.4 37.4 49.6 45.9 (.4)
Net Income (Loss) $ 82.6 $ 62.6 $ 93.5 $ 85.3 $ (18.7)
PERFORMANCE RATIOS
ROA (%) .95 .76 1.17 1.09 (.24)
ROCE (%) 13.92 10.98 17.59 16.52 (4.49)
Net Interest Margin (%) 3.39 3.55 3.65 3.78 3.76
Efficiency Ratio (%) (1) (2) 61.4 62.0 60.5 62.8 65.4
COMMON SHARE DATA:
Net Income (Loss) ($) .61 .47 .74 .68 (.19)
OPERATING PERFORMANCE (1)
Operating Income ($) 91.1 85.7 93.5 85.3 81.1
Operating Income Per Share ($) .68 .66 .74 .68 .65
ROA (%) 1.05 1.04 1.17 1.09 1.05
ROCE (%) 15.49 15.45 17.59 16.52 15.40
</TABLE>
(1) Excludes merger and restructuring-related charges.
(2) Excludes securities gains and losses and provision for
foreclosed properties.
<PAGE> 6
SHAWMUT NATIONAL CORPORATION
1995 Second Quarter Results
Net Interest Income
Tax-equivalent net interest income for the second quarter of 1995 was
$271.5 million, an increase of $2.8 million, or 1 percent,
relative to the second quarter of 1994. This increase in net
interest income was driven by a $3.5 billion, or 12 percent,
increase in average interest-earning assets, offsetting a 37
basis point decline in net interest margin. The 3.39 percent net
interest margin in the second quarter represented a 16 basis
point decline from the 3.55 percent margin in 1995's first
quarter.
The decline in net interest margin reflected a more expensive funding
mix which included an increase in average retail time deposits of
$368 million and a decrease of $280 million in lower cost savings
deposits. Also contributing to the margin decline from the first
quarter to the second quarter of 1995 was a decrease in the
LIBOR/fed funds spread of 37 basis points.
<TABLE>
NET INTEREST INCOME
___________________________________________________________________________
($ in millions)
<CAPTION>
1995 1994
2Q 1Q 4Q 3Q 2Q
<S> <C> <C> <C> <C> <C>
Average Balances
Loans $ 21,548 $ 20,248 $ 18,174 $ 17,516 $ 17,674
Securities 10,002 10,026 10,226 10,079 10,358
Other Earning Assets 487 627 679 800 550
Total Earning Assets $ 32,037 $ 30,901 $ 29,079 $ 28,395 $ 28,582
Net Interest Margin (%) 3.39 3.55 3.65 3.78 3.76
Net Interest Income (T-E) $ 271.5 $ 273.2 $ 265.9 $ 268.9 $ 268.7
</TABLE>
<PAGE> 7
SHAWMUT NATIONAL CORPORATION
1995 Second Quarter Results
Noninterest Income of $111.7 Million
Noninterest income was $111.7 million for the second quarter of 1995,
an increase of $17.8 million, or 19 percent relative to the
second quarter of 1994. The growth in noninterest income over
the past year included a $6.0 million, or 12 percent, increase in
customer service fees and a $2.3 million, or 8 percent, increase
in trust and agency fees.
Second quarter noninterest income was also up strongly relative to the
first quarter of 1995. The improvement was partially
attributable to an increase in loan servicing fees of $6.3
million to $10.6 million which included a gain on sale of
mortgage servicing rights of $5.8 million. There were no gains
from sales of mortgage servicing rights in the first quarter of
1995 compared with $5.3 million in the second quarter a year ago.
Customer service fees extended a positive trend increasing by $3.2
million, or 6 percent, versus the first quarter, reflecting
acquisitions and growth in ATM fees. Trust and agency fees were
up 2 percent versus the first quarter. Fees of $3.3 million from
Shawmut Capital, acquired in the first quarter of 1995,
contributed to the increase in "other noninterest income" in the
second quarter.
<TABLE>
NONINTEREST INCOME
______________________________________________________________________________
($ in millions)
<CAPTION>
1995 1994
2Q 1Q 4Q 3Q 2Q
<S> <C> <C> <C> <C> <C>
Customer Service Fees $ 54.8 $ 51.6 $ 49.8 $ 48.7 $ 48.8
Trust and Agency Fees 31.4 30.8 30.5 28.5 29.1
Loan Servicing 10.6 4.3 12.6 4.6 10.5
Foreign Exchange Trading .4 (1.2) 2.8 ---- (1.1)
Trading Account Profits 1.0 1.3 1.0 1.0 1.3
Residential Mortgage Sales .2 (.1) (.1) .9 .1
Securities Gains (Losses) 1.3 (.1) ---- .8 ----
Other 12.0 8.7 7.6 7.2 5.2
Total Noninterest Income $ 111.7 $ 95.3 $ 104.2 $ 91.7 $ 93.9
</TABLE>
<PAGE> 8
SHAWMUT NATIONAL CORPORATION
1995 Second Quarter Results
Efficiency Ratio of 61.4 Percent
Noninterest expenses of $248.1 million in the second quarter of 1995
included a $13.6 million pre-tax charge for the settlement of
certain compensation expenses triggered by shareholder approval
on June 21, 1995 of the agreement to merge with Fleet Financial
Group. Excluding merger and restructuring-related charges,
noninterest expenses declined by $3.5 million, or 1 percent,
versus the second quarter of 1994 despite increases in expenses
from purchase acquisitions, including Shawmut Capital and
Northeast Federal. Excluding the expenses of purchase
acquisitions and merger and restructuring-related charges,
quarterly noninterest expenses declined by approximately $24.7
million, or 10 percent, relative to the second quarter of 1994.
Headcount as measured by the number of full-time equivalent (FTE)
staff increased by 349 from the first quarter to the second
quarter of 1995. This increase included the absorption of 529
FTE's from the acquisition of Northeast Federal.
<TABLE>
NONINTEREST EXPENSES
___________________________________________________________________________
($ in millions)
<CAPTION>
1995 1994
2Q 1Q 4Q 3Q 2Q
<S> <C> <C> <C> <C> <C>
Compensation $ 98.5 $ 100.1 $ 91.9 $ 97.9 $ 100.0
Employee Benefits 21.9 19.6 19.0 20.9 22.6
Personnel Expense 120.4 119.7 110.9 118.8 122.6
Occupancy 23.3 23.8 24.2 23.8 25.0
Equipment 14.2 14.8 14.5 14.2 13.1
FDIC Insurance 11.0 11.0 10.5 10.3 11.1
Communications 12.3 11.4 12.2 10.3 10.1
Advertising 6.1 6.0 4.3 4.5 6.6
Foreclosed Properties Expense .7 1.6 1.0 .5 2.5
Goodwill Amortization 5.3 4.0 2.6 2.0 1.8
Provision for Foreclosed Properties ---- ---- .5 .6 .9
Other 41.2 36.4 43.8 41.4 44.3
Subtotal 234.5 228.7 224.5 226.4 238.0
Merger Related Expenses 13.6 36.9 ---- ---- 100.9
Restructuring Related Expenses ---- ---- ---- ---- 39.8
Total Noninterest Expenses $ 248.1 $ 265.6 $ 224.5 $ 226.4 $ 378.7
Branches 364 333 338 354 367
Employees (FTE's) 9,885 9,536 9,565 9,970 10,495
Efficiency Ratio (percent) 61.4 62.0 60.5 62.8 65.4
</TABLE>
<PAGE> 9
SHAWMUT NATIONAL CORPORATION
1995 Second Quarter Results
No Provision for Credit Losses for the Second Quarter of 1995
The second quarter of 1995 continued Shawmut's recent history of
having no provision for credit losses. 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 for the remainder of 1995.
Net charge-offs were $29.6 million in the second quarter of 1995. A
bulk sale of $16.1 million of residential mortgages contributed
$4.7 million to net charge-offs during the quarter. Excluding
the bulk sale, net charge-offs would have been $24.9 million in
the second quarter, roughly equal with the previous quarter.
Income Taxes
Income taxes for the second quarter of 1995 were $49.4 million,
representing an effective income tax rate of 37.4 percent
compared with an effective tax rate of 33.3 percent in the second
quarter of 1994, before the effect of merger and restructuring-
related charges. The higher effective tax rate reflects
increased state tax expense and lower levels of nontaxable
income.
<PAGE> 10
SHAWMUT NATIONAL CORPORATION
1995 Second Quarter Results
<TABLE>
ASSET SUMMARY
___________________________________________________________________________
($ in millions)
<CAPTION>
1995 1994
2Q 1Q 4Q 3Q 2Q
<S> <C> <C> <C> <C> <C>
Average Balances
Cash and Due from Banks $ 1,418 $ 1,350 $ 1,475 $ 1,478 $ 1,464
Loans 21,548 20,248 18,174 17,516 17,674
Reserve for Credit Losses (553) (563) (562) (595) (633)
Net Loans 20,995 19,685 17,612 16,921 17,041
Securities 10,002 10,026 10,226 10,079 10,358
Other Earning Assets 487 627 679 800 550
Total Earning Assets 32,037 30,901 29,079 28,395 28,582
Other Assets 1,885 1,836 1,670 1,701 1,696
Total Assets $ 34,787 $ 33,524 $ 31,662 $ 30,979 $ 31,109
End of Period Balances
Cash and Due from Banks $ 1,213 $ 1,485 $ 1,986 $ 1,461 $ 1,320
Loans 22,371 21,135 18,487 17,736 17,329
Reserve for Credit Losses (541) (559) (542) (568) (590)
Net Loans 21,830 20,576 17,945 17,168 16,739
Securities 9,502 9,873 9,992 10,287 9,846
Other Earning Assets 1,079 409 849 635 1,095
Total Earning Assets 32,952 31,417 29,328 28,658 28,270
Other Assets 2,336 1,847 1,627 1,801 1,692
Total Assets $ 35,960 $ 34,190 $ 32,399 $ 31,352 $ 30,692
</TABLE>
Assets Increase by $5.3 Billion Year-over-Year
Period-end assets increased $5.3 billion over the one year period
ending June 30, 1995 and average assets increased by $3.7
billion, or 12 percent. The increase in average assets includes
an increase of $1.3 billion, or 6 percent, in average loans
during the quarter. The growth in average loans in the quarter
includes approximately $1.1 billion as a result of loans
purchased through the acquisitions of Shawmut Capital and
Northeast Federal. Average interest-earning assets increased by
$1.1 billion, or 4 percent, from the first quarter of 1995.
<PAGE> 11
SHAWMUT NATIONAL CORPORATION
1995 Second Quarter Results
<TABLE>
LOANS BY TYPE
___________________________________________________________________________
(Period End - $ in millions)
<CAPTION>
1995 1994
2Q 1Q 4Q 3Q 2Q
<S> <C> <C> <C> <C> <C>
Commercial/Industrial $ 10,190.2 $ 9,644.2 $ 7,006.4 $ 6,201.3 $ 5,992.7
Owner-Occupied
Commercial Real Estate 1,507.3 1,564.5 1,412.0 1,423.4 1,407.1
Real Estate Investor/Developer
Commercial Mortgage 1,261.3 1,231.6 1,309.2 1,401.3 1,461.0
Construction & Other 125.4 136.4 157.4 150.5 150.9
Total Investor/Developer 1,386.7 1,368.0 1,466.6 1,551.8 1,611.9
Consumer
Residential Mortgage 6,212.5 5,541.2 5,592.1 5,608.1 5,474.0
Home Equity 1,618.6 1,582.9 1,625.7 1,628.8 1,609.9
Installment/Other 1,455.7 1,434.0 1,384.3 1,322.5 1,233.5
Total Consumer 9,286.8 8,558.1 8,602.1 8,559.4 8,317.4
TOTAL $ 22,371.0 $ 21,134.8 $ 18,487.1 $ 17,735.9 $ 17,329.1
</TABLE>
Loans Increase by $5.0 Billion Year-over-Year
Period-end total loans grew by $5.0 billion, or 29 percent, over the
one year period ending June 30, 1995. During the second quarter
of 1995 loans grew by $1.2 billion, or 6 percent, as compared
with March 31, 1995. The purchase acquisition of Northeast
Federal contributed $913.5 million to this improvement,
principally residential mortgages.
Commercial and industrial loans increased $546.0 million during the
quarter with asset-based and specialized lending up $218.4
million and $66.9 million, respectively.
<PAGE> 12
SHAWMUT NATIONAL CORPORATION
1995 Second Quarter Results
<TABLE>
CREDIT QUALITY
______________________________________________________________________________
($ in millions)
<CAPTION>
1995 1994
2Q 1Q 4Q 3Q 2Q
<S> <C> <C> <C> <C> <C>
Nonaccruing Loans $ 190.9 $ 228.4 $ 224.0 $ 265.9 $ 285.2
Foreclosed Properties 4.0 11.9 18.8 32.1 42.5
Total Problem Assets $ 194.9 $ 240.3 $ 242.8 $ 298.0 $ 327.7
Restructured Loans $ 28.1 $ 29.8 $ 41.8 $ 31.1 $ 63.8
Accruing Loans Past Due
90 Days or More $ 46.4 $ 55.6 $ 43.3 $ 53.1 $ 47.8
Reserve for Credit Losses $ 541.2 $ 559.2 $ 542.1 $ 567.8 $ 589.8
Problem Assets as a Percent
of Loans Plus Foreclosed
Properties .87% 1.14% 1.31% 1.68% 1.89%
Reserve as a Percent of
Nonaccruing Loans 283% 245% 242% 214% 207%
PROBLEM ASSET FLOWS
Inflows $ 58.7 $ 80.2 $ 55.4 $ 64.9 $ 56.8
Outflows(1) $ 64.2 $ 50.6 $ 69.9 $ 60.9 $ 67.1
</TABLE>
(1) Outflows are cash payments, transfers to accruing or to
restructured, and sales.
Problem Assets Decrease by 40 Percent Over the Past Year
Total problem assets at June 30, 1995 were $194.9 million, a decrease of
$132.8 million, or 40 percent, from $327.7 million at June 30,
1994 and down $45.4 million, or 19 percent, from $240.3 million at
March 31, 1995. This decline in the second quarter included the
effect of a bulk sale totaling $16.1 million of nonaccruing loans.
The acquisitions of Shawmut Capital and Northeast Federal resulted
in $10.7 million and $22.3 million, respectively, of problem
assets held for accelerated disposition at June 30, 1995. The
ratio of nonaccruing loans plus foreclosed properties to loans
plus foreclosed properties declined to .87 percent at June 30,
1995, compared with 1.14 percent at March 31, 1995 and 1.89
percent at June 30, 1994. Foreclosed properties declined by $7.9
million, or 66 percent, to $4.0 million at June 30, 1995 from
$11.9 million at March 31, 1995.
<PAGE> 13
SHAWMUT NATIONAL CORPORATION
1995 Second Quarter Results
<TABLE>
RESERVE FOR CREDIT LOSSES
___________________________________________________________________________
($ in millions)
<CAPTION>
1995 1994
2Q 1Q 4Q 3Q 2Q
<S> <C> <C> <C> <C> <C>
Balance at Beginning of Period $ 559.2 $ 542.1 $ 567.8 $ 589.8 $ 638.5
Net Charge-offs 29.6 24.6 25.7 26.3 48.7(1)
Addition for Loans Purchased 11.6 41.7 ---- 4.3 ----
Provision for Credit Losses ---- ---- ---- ---- ----
Balance at End of Period $ 541.2 $ 559.2 $ 542.1 $ 567.8 $ 589.8
Provision for Foreclosed
Properties $ ---- $ ---- $ .5 $ .6 $ .9
Reserve as a Percent of
Nonaccruing Loans 283% 245% 242% 214% 207%
</TABLE>
(1) Includes $24.7 million relating to acquired institutions.
Reserve Coverage of Nonaccruing Loans Rises to 283 Percent
The reserve for credit losses was $541.2 million at June 30, 1995,
compared with $559.2 million at March 31, 1995 and $589.8
million at June 30, 1994. Reserve coverage improved over year-
ago levels as the ratio of the reserve for credit losses to
nonaccruing loans was 283 percent at June 30, 1995, compared with
207 percent a year earlier. The reserve coverage was 245 percent
at March 31, 1995.
<PAGE> 14
SHAWMUT NATIONAL CORPORATION
1995 Second Quarter Results
<TABLE>
CAPITAL
____________________________________________________________________________
($ in millions, except per share data)
<CAPTION>
1995 1994
2Q 1Q 4Q 3Q 2Q
<S> <C> <C> <C> <C> <C>
BALANCES
Common Equity $ 2,275 $ 2,082 $ 2,019 $ 1,951 $ 1,890
Tangible Common Equity (a) 1,765 1,725 1,865 1,800 1,772
Total Shareholders' Equity 2,578 2,385 2,197 2,129 2,068
Tier 1 Capital 2,077 2,061 2,091 2,017 1,979
Total Capital 3,150 3,143 2,919 2,858 2,814
Goodwill 510 357 154 152 119
Total Intangibles 523 370 168 168 136
Total Assets 35,960 34,190 32,399 31,352 30,692
CAPITAL RATIOS (%)
Common Equity 6.33 6.09 6.23 6.22 6.16
Tangible Common Equity 4.91 5.05 5.75 5.74 5.77
Tier 1 Capital (b) 6.97 7.37 8.27 8.47 8.49
Total Capital (b) 10.57 11.24 11.55 11.99 12.07
Leverage 6.06 6.21 6.62 6.54 6.38
PER SHARE DATA
Book Value Per Share ($) 17.95 17.06 16.72 16.32 15.93
Average Common
Shares Outstanding (millions) 123.7 121.6 120.3 119.3 118.4
</TABLE>
(a) Defined as common equity less goodwill.
(b) As a percent of risk adjusted assets. Second quarter 1995
data are preliminary.
Book Value Increases to $17.95 Per Share
Book value per share increased by $.89, or 5 percent, to $17.95 per
share during the second quarter of 1995 as common shareholders'
equity increased by $193 million as a result of common equity
issued as the consideration in the purchase of Northeast Federal.
Shawmut's preliminary Tier 1 and Total risk-based capital ratios
were 6.97 percent and 10.57 percent, respectively, at June 30,
1995, compared with 7.37 percent and 11.24 percent, respectively,
at March 31, 1995. Goodwill increased by $153 million reflecting
the $159 million of goodwill associated with the Northeast
Federal acquisition.
<PAGE> 15
SHAWMUT NATIONAL CORPORATION
1995 Second Quarter Results
The company expects to complete the repurchase of up to 9 million
common shares before the end of 1995. This repurchase program is
designed to offset the 6.5 million common shares issued in
connection with the Northeast Federal acquisition and
approximately 2.5 million common shares in expected stock option
activity.
The Leverage ratio, a measure of Tier 1 capital to average quarterly
assets, was 6.06 percent at June 30, 1995, compared with 6.21
percent at March 31, 1995. 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. Common equity at June 30, 1995 reflects
the repurchase of 3.1 million shares completed in the second
quarter which reduced equity by $99.3 million.
<TABLE>
COMMON STOCK/OTHER DATA
____________________________________________________________________________
<CAPTION>
1995 1994
2Q 1Q 4Q 3Q 2Q
<S> <C> <C> <C> <C> <C>
Market Value Per Share ($)
End of Period 31 7/8 26 3/8 16 3/8 20 3/4 22
High 32 1/2 26 5/8 20 7/8 23 24 3/4
Low 26 1/4 17 3/8 16 3/8 20 5/8 19 1/2
Average Daily Volume (000) 453 1,186 503 448 632
Book Value Per Share(1) ($) 17.95 17.06 16.72 16.32 15.93
Dividends Declared Per Share ($) .22 .22 .22 .20 .20
Market-to-Book (period-end) 1.78 1.55 .98 1.27 1.38
Preferred Dividends ($) (000) 7.2 6.0 3.9 3.9 3.8
Common Shares Outstanding
Average 123.7 121.6 120.3 119.3 118.4
Period End 126.7 122.1 120.8 119.6 118.6
</TABLE>
(1) Period End
<PAGE> 16
SHAWMUT NATIONAL CORPORATION
1995 Second Quarter Results
Other Noteworthy Items in the Quarter Included:
Northeast Federal Acquired - June 12
All 33 Northeast Savings branches -- located in New York,
Massachusetts, and Connecticut -- are units of the Shawmut Bank
in each of these states. Northeast Federal had $2.5 billion in
deposits and $945 million in loans as of March 31, 1995.
Northeast was acquired by Shawmut in a stock-for-stock exchange
of .415 shares of common stock for each share of Northeast stock.
Stock Repurchase Authorized - June 21
The board of directors authorized the repurchase of its common stock
shares sufficient to offset the approximately 6.5 million shares
issued on June 9 in connection with the acquisition of Northeast
Federal Corp. and as well as additional shares expected to be
issued pursuant to its stock option plans. There are
approximately 4.8 million options outstanding. The company
expects that the total program will entail the repurchase of up
to 9 million shares in 1995.
Purchase of Interest in Interpay Inc. - June 30
Shawmut signed a definitive agreement to purchase a minority ownership
interest in Interpay Inc., and its franchises in Connecticut and
New Hampshire for $12 million. Based in Mansfield,
Massachusetts, Interpay provides specialized payroll services to
small- to medium-sized businesses and is the largest privately
held payroll service provider in the U.S. In addition to
payroll, direct deposit and electronic tax filing services,
Interpay utilizes its payroll deduction capabilities to
facilitate employee contributions to 401(K), defined
contribution, and other employee benefits services.
<PAGE> 17
SHAWMUT NATIONAL CORPORATION
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
(in millions, except QUARTER ENDED
per share data) JUN 95 MAR 95 DEC 94 SEP 94 JUN 94
<S> <C> <C> <C> <C> <C>
INTEREST INCOME
AND EXPENSES
Tax-equivalent interest
and dividend income $ 617.2 $ 584.3 $ 524.6 $ 492.8 $ 474.6
Interest expense 345.7 311.1 258.7 223.9 205.9
Tax-equivalent net
interest income 271.5 273.2 265.9 268.9 268.7
Tax-equivalent adjustment 3.1 2.9 2.5 3.0 3.0
Net interest income 268.4 270.3 263.4 265.9 265.7
Provision for credit losses
Net interest income after provision
for credit losses 268.4 270.3 263.4 265.9 265.7
NONINTEREST INCOME
Customer service fees 54.8 51.6 49.8 48.7 48.8
Trust and agency fees 31.4 30.8 30.5 28.5 29.1
Securities gains (losses), net 1.3 (.1) -- .8 --
Other 24.2 13.0 23.9 13.7 16.0
Total 111.7 95.3 104.2 91.7 93.9
NONINTEREST EXPENSES
Compensation and benefits 120.4 119.7 110.9 118.8 122.6
Occupancy and equipment 37.5 38.6 38.7 38.0 38.1
Foreclosed properties
Provision -- -- .5 .6 .9
Expenses .7 1.6 1.0 .5 2.5
Merger related charges 13.6 36.9 100.9
Restructuring related charges 39.8
Other 75.9 68.8 73.4 68.5 73.9
Total 248.1 265.6 224.5 226.4 378.7
Income (loss) before income taxes 132.0 100.0 143.1 131.2 (19.1)
Income taxes (benefit) 49.4 37.4 49.6 45.9 (.4)
Net income (loss) $ 82.6 $ 62.6 $ 93.5 $ 85.3 $ (18.7)
COMMON SHARE DATA
Net income (loss) $ .61 $ .47 $ .74 $ .68 $ (.19)
Dividends declared .22 .22 .22 .20 .20
Book value 17.95 17.06 16.72 16.32 15.93
Average shares 123.7 121.6 120.3 119.3 118.4
End of period shares 126.7 122.1 120.8 119.6 118.6
Preferred dividends declared $ 7.2 $ 6.0 $ 3.9 $ 3.9 $ 3.8
</TABLE>
<PAGE> 18
SHAWMUT NATIONAL CORPORATION
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
(in millions, except SIX MONTHS ENDED
per share data) JUN 95 JUN 94
<S> <C> <C>
INTEREST INCOME
AND EXPENSES
Tax-equivalent interest
and dividend income $ 1,201.5 $ 931.9
Interest expense 656.8 387.8
Tax-equivalent net
interest income 544.7 544.1
Tax-equivalent adjustment 6.0 5.9
Net interest income 538.7 538.2
Provision for credit losses 3.0
Net interest income after provision
for credit losses 538.7 535.2
NONINTEREST INCOME
Customer service fees 106.4 97.3
Trust and agency fees 62.2 58.5
Securities gains (losses), net 1.2 (.8)
Other 37.2 27.6
Total 207.0 182.6
NONINTEREST EXPENSES
Compensation and benefits 240.1 248.4
Occupancy and equipment 76.1 77.8
Foreclosed properties
Provision -- 2.9
Expenses 2.3 6.2
Merger related charges 50.5 100.9
Restructuring related charges 39.8
Other 144.7 144.5
Total 513.7 620.5
Income before income taxes 232.0 97.3
Income taxes 86.8 38.7
Net income $ 145.2 $ 58.6
COMMON SHARE DATA
Net income $ 1.08 $ .43
Dividends declared .44 .40
Book value 17.95 15.93
Average shares 122.7 118.1
End of period shares 126.7 118.6
Preferred dividends declared $ 13.2 $ 7.7
</TABLE>
<PAGE> 19
SHAWMUT NATIONAL CORPORATION
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
QUARTER ENDED
(in millions) JUN 95 MAR 95 DEC 94 SEP 94 JUN 94
AVERAGE BALANCES
<S> <C> <C> <C> <C> <C>
Loans $ 21,548 $ 20,248 $ 18,174 $ 17,516 $ 17,674
Securities 10,002 10,026 10,226 10,079 10,358
Interest-earning assets 32,037 30,901 29,079 28,395 28,582
Total assets 34,787 33,524 31,662 30,979 31,109
Core deposits 17,469 17,121 17,696 17,877 17,635
Other borrowings 8,727 8,340 7,546 7,527 9,101
Notes and debentures 2,289 2,234 1,860 1,619 1,108
Interest-bearing liabilities 27,676 26,539 24,639 24,034 24,174
Common shareholders' equity 2,172 2,092 2,021 1,955 2,012
Shareholders' equity 2,475 2,361 2,199 2,134 2,200
END OF PERIOD BALANCES
Loans $ 22,371 $ 21,135 $ 18,487 $ 17,736 $ 17,329
Securities 9,502 9,873 9,992 10,287 9,846
Interest-earning assets 32,952 31,417 29,328 28,658 28,270
Total assets 35,960 34,190 32,399 31,352 30,692
Core deposits 19,740 16,871 18,337 17,788 18,245
Other borrowings 7,915 8,370 7,087 7,669 7,311
Notes and debentures 2,339 2,397 2,022 1,634 1,609
Interest-bearing liabilities 28,220 27,381 24,693 24,439 23,624
Common shareholders' equity 2,275 2,082 2,019 1,951 1,890
Shareholders' equity 2,578 2,385 2,197 2,129 2,068
Tier 1 capital (a) 2,077 2,061 2,091 2,017 1,979
Total capital (a) 3,150 3,143 2,919 2,858 2,814
(a) June 1995 data are preliminary.
</TABLE>
<PAGE> 20
SHAWMUT NATIONAL CORPORATION
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
QUARTER ENDED
(in millions) JUN 95 MAR 95 DEC 94 SEP 94 JUN 94
LOANS BY TYPE
<S> <C> <C> <C> <C> <C>
Commercial/industrial $ 10,190.2 $ 9,644.2 $ 7,006.4 $ 6,201.3 $ 5,992.7
Owner-occupied commercial
real estate 1,507.3 1,564.5 1,412.0 1,423.4 1,407.1
Real estate investor/
developer
Commercial mortgage 1,261.3 1,231.6 1,309.2 1,401.3 1,461.0
Construction and other 125.4 136.4 157.4 150.5 150.9
Consumer
Residential mortgage 6,212.5 5,541.2 5,592.1 5,608.1 5,474.0
Home equity 1,618.6 1,582.9 1,625.7 1,628.8 1,609.9
Installment/other 1,455.7 1,434.0 1,384.3 1,322.5 1,233.5
Total $ 22,371.0 $ 21,134.8 $ 18,487.1 $ 17,735.9 $ 17,329.1
NONACCRUING LOANS
BY TYPE
Commercial/industrial $ 47.1 $ 55.0 $ 36.0 $ 59.3 $ 60.6
Owner-occupied commercial
real estate 47.4 52.0 57.6 59.8 67.5
Real estate investor/
developer
Commercial mortgage 50.8 64.5 66.9 65.9 70.6
Construction and other 3.9 4.7 16.0 24.1 20.9
Consumer
Residential mortgage 28.9 42.6 38.4 46.2 48.8
Home equity 9.4 7.2 6.5 7.0 8.2
Installment/other 3.4 2.4 2.6 3.6 8.6
Total $ 190.9 $ 228.4 $ 224.0 $ 265.9 $ 285.2
</TABLE>
<PAGE> 21
SHAWMUT NATIONAL CORPORATION
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
(in millions, except QUARTER ENDED
ratio data) JUN 95 MAR 95 DEC 94 SEP 94 JUN 94
ASSET QUALITY
<S> <C> <C> <C> <C> <C>
Nonaccruing loans
Less than 90 days past due $ 63.2 $ 76.6 $ 72.5 $ 72.5 $ 78.1
90 or more days past due 127.7 151.8 151.5 193.4 207.1
Total nonaccruing loans 190.9 228.4 224.0 265.9 285.2
Foreclosed properties 4.0 11.9 18.8 32.1 42.5
Total nonaccruing loans plus
foreclosed properties $ 194.9 $ 240.3 $ 242.8 $ 298.0 $ 327.7
Restructured loans $ 28.1 $ 29.8 $ 41.8 $ 31.1 $ 63.8
Accruing loans past
due 90 days or more $ 46.4 $ 55.6 $ 43.3 $ 53.1 $ 47.8
Nonaccruing loans to loans .85 % 1.08 % 1.21 % 1.50 % 1.65 %
Nonaccruing loans plus
foreclosed properties to loans
plus foreclosed properties .87 1.14 1.31 1.68 1.89
Reserve for credit losses to
nonaccruing loans 283.00 245.00 242.00 214.00 207.00
RESERVE FOR CREDIT LOSSES
Beginning balance $ 559.2 $ 542.1 $ 567.8 $ 589.8 $ 638.5
Provision
Addition for loans purchased 11.6 41.7 4.3
Loan charge-offs (42.5) (33.4) (43.7) (40.7) (60.5)
Recoveries 12.9 8.8 18.0 14.4 11.8
Net charge-offs (29.6) (24.6) (25.7) (26.3) (48.7)
Ending balance $ 541.2 $ 559.2 $ 542.1 $ 567.8 $ 589.8
Net charge-offs (annualized) to
average loans .55 % .49 % .57 % .60 % 1.10 %
Reserve for credit losses to loans 2.42 2.65 2.93 3.20 3.40
Reserve for credit losses to
net charge-offs (annualized) 4.57 X 5.67 X 5.28 X 5.40 X 3.03 X
</TABLE>
<PAGE> 22
