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): October 18, 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 16 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 October 18, 1995, entitled "Shawmut National
Corporation reports third quarter net income of
$91.4 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: October 23, 1995
<PAGE> -3-
EXHIBIT INDEX
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
99.1 Press Release of Shawmut National Corporation, 5
dated October 18, 1995, entitled "Shawmut National
Corporation reports third quarter net income of
$91.4 million, or $.68 per common share."
<PAGE> -4-
Shawmut National Corporation
1995 Third Quarter Results
- ---------------------------------------------------------------------------
News Media Contact: Investor Contact:
Vincent Loporchio Susan E. Lester
(617) 292-3239 (203) 986-3297
SHAWMUT NATIONAL CORPORATION REPORTS
THIRD QUARTER NET INCOME OF
$91.4 MILLION, OR $.68 PER COMMON SHARE
___________________________________________________________________
BOSTON, Mass., and HARTFORD, Conn., October 18, 1995 - Shawmut
National Corporation (NYSE: SNC) reported net income of $91.4
million for the third quarter of 1995, or $.68 per common share,
compared with $85.3 million, or $.68 per common share earned in
the third quarter of 1994. Return on average assets and return
on average common equity for the third quarter of 1995 were 1.07
percent and 15.17 percent, respectively, compared with 1.09 percent
and 16.52 percent, respectively, for the third quarter of 1994.
Commenting on third quarter results, Joel B. Alvord, Shawmut's
chairman and chief executive officer said, "Growth in fee income
supported by efficiency enhancements generated solid financial
results in the quarter. In addition, integration planning for
Shawmut's merger with Fleet Financial Group is proceeding
smoothly, and we anticipate final regulatory approvals shortly."
For the first nine months of 1995, net income was $236.6 million,
or $1.76 per common share, compared with $143.9 million, or
$1.12 per common share for the first nine months of 1994.
Excluding merger and restructuring-related charges from both
periods, operating income was $268.2 million, or $2.02 per
common share for the first nine months of 1995, compared with
$243.7 million, or $1.96 per common share for the 1994 period.
<PAGE> -5-
Shawmut National Corporation
1995 Third Quarter Results
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME STATEMENT HIGHLIGHTS
___________________________________________________________________________________
($ in millions)
1995 1994
--------------------------- ------------------
3Q 2Q 1Q 4Q 3Q
<S> <C> <C> <C> <C> <C>
Net Interest Income (T-E) $ 263.2 $ 271.5 $ 273.2 $ 265.9 $ 268.9
Tax Equivalent Adjustment (1.4) (3.1) (2.9) (2.5) (3.0)
Net Interest Income 261.8 268.4 270.3 263.4 265.9
Noninterest Income 107.2 111.7 95.3 104.2 91.7
Noninterest Expenses (1) 223.3 234.5 228.7 224.5 226.4
Provision for Credit Losses ---- ---- ---- ---- ----
Subtotal 145.7 145.6 136.9 143.1 131.2
Merger Related Charges ---- 13.6 36.9 ---- ----
Pre-Tax Income 145.7 132.0 100.0 143.1 131.2
Income Taxes 54.3 49.4 37.4 49.6 45.9
Net Income $ 91.4 $ 82.6 $ 62.6 $ 93.5 $ 85.3
PERFORMANCE RATIOS
ROA (%) 1.07 .95 .76 1.17 1.09
ROCE (%) 15.17 13.92 10.98 17.59 16.52
Net Interest Margin (%) 3.39 3.39 3.55 3.65 3.78
Efficiency Ratio (%) (1) (2) 60.3 61.4 62.0 60.5 62.8
COMMON SHARE DATA:
Net Income ($) .68 .61 .47 .74 .68
OPERATING PERFORMANCE (1)
Operating Income ($) 91.4 91.1 85.7 93.5 85.3
Operating Income Per Share($) .68 .68 .66 .74 .68
ROA (%) 1.07 1.05 1.04 1.17 1.09
ROCE (%) 15.17 15.49 15.45 17.59 16.52
</TABLE>
(1) Excludes merger-related charges.
(2) Excludes securities gains and losses and provision for
foreclosed properties.
<PAGE> -6-
Shawmut National Corporation
1995 Third Quarter Results
- ---------------------------------------------------------------------------
Net Interest Income
Tax-equivalent net interest income for the third quarter of 1995
was $263.2 million, a decrease of $5.7 million, or 2 percent
relative to the third quarter of 1994, as a decline in net
interest margin more than offset an increase in average interest-
earning assets. Average interest-earning assets were $31.0 billion
for the third quarter of 1995, an increase of $2.6 billion, or 9
percent over the comparable prior year period. The 3.39 percent
net interest margin in the third quarter represented a 39 basis
point decline from the 3.78 percent margin in 1994's third quarter.
The decline in net interest margin reflected a more expensive
funding mix which resulted in an increase in the cost of interest-
bearing liabilities of 130 basis points from the 1994 third
quarter, reflecting the increase in market interest rates in this
period and a reduction of $486 million in lower cost savings,
money market and NOW deposits. The cost of funding the repurchase
of the Corporation's common stock and a decrease in the
LIBOR/fed funds spread of 29 basis points also contributed to
the net interest margin decrease.
<TABLE>
<CAPTION>
NET INTEREST INCOME
_____________________________________________________________________________________
($ in millions)
1995 1994
-------------------------------- --------------------
3Q 2Q 1Q 4Q 3Q
<S> <C> <C> <C> <C> <C>
Average Balances
Loans $ 21,862 $ 21,548 $ 20,248 $ 18,174 $ 17,516
Securities 8,426 10,002 10,026 10,226 10,079
Other Earning Assets 675 487 627 679 800
Total Earning Assets $ 30,963 $ 32,037 $ 30,901 $ 29,079 $ 28,395
Net Interest Margin (%) 3.39 3.39 3.55 3.65 3.78
Net Interest Income (T-E) $ 263.2 $ 271.5 $ 273.2 $ 265.9 $ 268.9
</TABLE>
<PAGE> -7-
Shawmut National Corporation
1995 Third Quarter Results
- ---------------------------------------------------------------------------
Noninterest Income of $107.2 Million
Noninterest income was $107.2 million for the third quarter of 1995,
an increase of $15.5 million, or 17 percent relative to the third
quarter of 1994. The growth in noninterest income over the past year
included an $8.5 million, or 17 percent increase in customer service
fees and a $5.2 million, or 18 percent increase in trust and agency
fees. Approximately three fourths of the increase in
noninterest income is attributable to purchase acquisitions.
Noninterest income of $111.7 million in the second quarter of 1995
included a gain on sale of mortgage servicing rights of $5.8 million
and securities gains of $1.3 million. Adjusting for these items,
noninterest income increased $2.6 million.
<TABLE>
<CAPTION>
NONINTEREST INCOME
__________________________________________________________________________________
($ in millions)
1995 1994
----------------------------- ------------------
3Q 2Q 1Q 4Q 3Q
<S> <C> <C> <C> <C> <C>
Customer Service Fees $ 57.2 $ 54.8 $ 51.6 $ 49.8 $ 48.7
Trust and Agency Fees 33.7 31.4 30.8 30.5 28.5
Loan Servicing 4.3 10.6 4.3 12.6 4.6
Foreign Exchange Trading 1.0 .4 (1.2) 2.8 ----
Trading Account Profits .6 1.0 1.3 1.0 1.0
Residential Mortgage Sales ---- .2 (.1) (.1) .9
Securities Gains (Losses) ---- 1.3 (.1) ---- .8
Other 10.4 12.0 8.7 7.6 7.2
Total Noninterest Income $ 107.2 $ 111.7 $ 95.3 $ 104.2 $ 91.7
</TABLE>
<PAGE> -8-
Shawmut National Corporation
1995 Third Quarter Results
- ---------------------------------------------------------------------------
Efficiency Ratio of 60.3 Percent
Noninterest expenses of $223.3 million in the third quarter of
1995 decreased $3.1 million, or 1 percent versus the third
quarter of 1994 despite increases in expenses from purchase
acquisitions, including Shawmut Capital and Northeast Federal.
Excluding the expenses of purchase acquisitions, quarterly
noninterest expenses declined by approximately $35.4 million, or
16 percent relative to the third quarter of 1994. This
decline is attributable to the continuing success of the
Corporation's acquisition integration and cost management efforts,
and a $9.4 million reduction in FDIC insurance.
Headcount as measured by the number of full-time equivalent (FTE) staff
decreased by 225 from the second quarter to the third quarter of 1995.
<TABLE>
<CAPTION>
NONINTEREST EXPENSES
__________________________________________________________________________________________
($ in millions)
1995 1994
------------------------------ ------------------
3Q 2Q 1Q 4Q 3Q
<S> <C> <C> <C> <C> <C>
Compensation $ 97.6 $ 98.5 $ 100.1 $ 91.9 $ 97.9
Employee Benefits 21.1 21.9 19.6 19.0 20.9
Personnel Expense 118.7 120.4 119.7 110.9 118.8
Occupancy 25.3 23.3 23.8 24.2 23.8
Equipment 15.9 14.2 14.8 14.5 14.2
FDIC Insurance .9 11.0 11.0 10.5 10.3
Communications 11.6 12.3 11.4 12.2 10.3
Advertising 7.0 6.1 6.0 4.3 4.5
Foreclosed Properties Expense 1.0 .7 1.6 1.0 .5
Goodwill Amortization 7.4 5.3 4.0 2.6 2.0
Provision for Foreclosed Properties ---- ---- ---- .5 .6
Other 35.5 41.2 36.4 43.8 41.4
Subtotal 223.3 234.5 228.7 224.5 226.4
Merger Related Expenses ---- 13.6 36.9 ---- ----
Total Noninterest Expenses $ 223.3 $ 248.1 $ 265.6 $ 224.5 $ 226.4
Branches 364 364 333 338 354
Employees (FTE's) 9,660 9,885 9,536 9,565 9,970
Efficiency Ratio (percent) 60.3 61.4 62.0 60.5 62.8
</TABLE>
<PAGE> -9-
Shawmut National Corporation
1995 Third Quarter Results
- ---------------------------------------------------------------------------
No Provision for Credit Losses for the Third Quarter of 1995
The third quarter of 1995 continued Shawmut's recent history of
having no provision for credit losses. With adequate 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 $30.7 million in the third quarter of
1995, compared with $26.3 million in the third quarter of 1994.
Income Taxes
Income taxes for the third quarter of 1995 were $54.3 million,
representing an effective income tax rate of 37.3 percent,
compared with an effective tax rate of 35.0 percent in the
third quarter of 1994. The higher effective tax rate reflects
increased state tax expense and lower levels of nontaxable income.
<PAGE> -10-
Shawmut National Corporation
1995 Third Quarter Results
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSET SUMMARY
_______________________________________________________________________________________
($ in millions)
1995 1994
-------------------------------- ----------------------
3Q 2Q 1Q 4Q 3Q
<S> <C> <C> <C> <C> <C>
Average Balances
Cash and Due from Banks $ 1,324 $ 1,418 $ 1,350 $ 1,475 $ 1,478
Loans 21,862 21,548 20,248 18,174 17,516
Reserve for Credit Losses (533) (553) (563) (562) (595)
Net Loans 21,329 20,995 19,685 17,612 16,921
Securities 8,426 10,002 10,026 10,226 10,079
Other Earning Assets 675 487 627 679 800
Total Earning Assets 30,963 32,037 30,901 29,079 28,395
Other Assets 2,125 1,885 1,836 1,670 1,701
Total Assets $ 33,879 $ 34,787 $ 33,524 $ 31,662 $ 30,979
End of Period Balances
Cash and Due from Banks $ 1,163 $ 1,213 $ 1,485 $ 1,986 $ 1,461
Loans 21,634 22,371 21,135 18,487 17,736
Reserve for Credit Losses (511) (541) (559) (542) (568)
Net Loans 21,123 21,830 20,576 17,945 17,168
Securities 8,096 9,502 9,873 9,992 10,287
Other Earning Assets 577 1,079 409 849 635
Total Earning Assets 30,307 32,952 31,417 29,328 28,658
Other Assets 2,098 2,336 1,847 1,627 1,801
Total Assets $ 33,057 $ 35,960 $ 34,190 $ 32,399 $ 31,352
</TABLE>
Average Earning Assets Increase by $2.6 Billion Year-over-Year
Average earning assets totaled $31.0 billion for the third quarter
of 1995, an increase of $2.6 billion, or 9 percent over the
prior year. An increase in average loans of $4.3 billion, or
25 percent, was partially offset by a reduction of $1.7 billion,
or 16 percent in average securities. The growth in average
loans includes approximately $3.3 billion as a result of
loans purchased through the acquisitions of Shawmut Capital
and Northeast Federal. The reduction in the securities
portfolio reflects the Corporation's intention to reduce the level
of such lower yielding assets.
<PAGE> -11-
Shawmut National Corporation
1995 Third Quarter Results
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
LOANS BY TYPE
_________________________________________________________________________________________________
(Period End - $ in millions)
1995 1994
------------------------------------- -----------------------
3Q 2Q 1Q 4Q 3Q
<S> <C> <C> <C> <C> <C>
Commercial/Industrial $ 9,934.5 $ 10,190.2 $ 9,644.2 $ 7,006.4 $ 6,201.3
Owner-Occupied
Commercial Real Estate 1,452.8 1,507.3 1,564.5 1,412.0 1,423.4
Real Estate Investor/Developer
Commercial Mortgage 1,077.6 1,261.3 1,231.6 1,309.2 1,401.3
Construction & Other 102.0 125.4 136.4 157.4 150.5
Total Investor/Developer 1,179.6 1,386.7 1,368.0 1,466.6 1,551.8
Consumer
Residential Mortgage 5,965.3 6,212.5 5,541.2 5,592.1 5,608.1
Home Equity 1,643.4 1,618.6 1,582.9 1,625.7 1,628.8
Installment/Other 1,458.4 1,455.7 1,434.0 1,384.3 1,322.5
Total Consumer 9,067.1 9,286.8 8,558.1 8,602.1 8,559.4
TOTAL $ 21,634.0 $ 22,371.0 $ 21,134.8 $ 18,487.1 $ 17,735.9
</TABLE>
Loans Increase by $3.9 Billion Year-over-Year
Period-end total loans grew by $3.9 billion, or 22 percent over the
one year period ending September 30, 1995. During the third
quarter of 1995 loans decreased by $737.0 million, or 3 percent
as compared with June 30, 1995. The reduction during the quarter
includes a $207.1 million decline in real estate investor/developer
loans as the Corporation continues to reduce its exposure in such
loans, and a $247.2 million decrease in residential mortgages as a
result of the sale of loans acquired with Northeast Federal.
<PAGE> -12-
Shawmut National Corporation
1995 Third Quarter Results
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
CREDIT QUALITY
____________________________________________________________________________________
($ in millions)
1995 1994
------------------------------ --------------------
3Q 2Q 1Q 4Q 3Q
<S> <C> <C> <C> <C> <C>
Nonaccruing Loans $ 187.5 $ 190.9 $ 228.4 $ 224.0 $ 265.9
Foreclosed Properties 4.6 4.0 11.9 18.8 32.1
Total Problem Assets $ 192.1 $ 194.9 $ 240.3 $ 242.8 $ 298.0
Restructured Loans $ 22.2 $ 28.1 $ 29.8 $ 41.8 $ 31.1
Accruing Loans Past Due
90 Days or More $ 42.8 $ 46.4 $ 55.6 $ 43.3 $ 53.1
Reserve for Credit Losses $ 510.5 $ 541.2 $ 559.2 $ 542.1 $ 567.8
Problem Assets as a Percent
of Loans Plus Foreclosed
Properties .89% .87% 1.14% 1.31% 1.68%
Reserve as a Percent of
Nonaccruing Loans 272% 283% 245% 242% 214%
PROBLEM ASSET FLOWS
Inflows $ 80.4 $ 58.7 $ 80.2 $ 55.4 $ 64.9
Outflows(1) $ 42.7 $ 64.2 $ 50.6 $ 69.9 $ 60.9
</TABLE>
(1) Outflows are cash payments, transfers to accruing or to
restructured, and sales.
Problem Assets Decrease by 36 Percent Over the Past Year
Total problem assets at September 30, 1995 were $192.1 million,
a decrease of $105.9 million, or 36 percent from $298.0 million
at September 30, 1994. The acquisitions of Shawmut Capital
and Northeast Federal resulted in $12.4 million of problem
assets held for accelerated disposition at September 30, 1995,
compared with $38.6 million at June 30, 1995. The ratio of
nonaccruing loans plus foreclosed properties to loans plus
foreclosed properties declined to .89 percent at September 30,
1995, compared with 1.68 percent at September 30, 1994.
<PAGE> -13-
Shawmut National Corporation
1995 Third Quarter Results
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
RESERVE FOR CREDIT LOSSES
__________________________________________________________________________________________
($ in millions)
1995 1994
----------------------------- ------------------
3Q 2Q 1Q 4Q 3Q
<S> <C> <C> <C> <C> <C>
Balance at Beginning of Period $ 541.2 $ 559.2 $ 542.1 $ 567.8 $ 589.8
Net Charge-offs 30.7 29.6 24.6 25.7 26.3
Addition for Loans Purchased ---- 11.6 41.7 ---- 4.3
Provision for Credit Losses ---- ---- ---- ---- ----
Balance at End of Period $ 510.5 $ 541.2 $ 559.2 $ 542.1 $ 567.8
Provision for Foreclosed Properties $ ---- $---- $ ---- $ .5 $ .6
Reserve as a Percent of
Nonaccruing Loans 272% 283% 245% 242% 214%
</TABLE>
Reserve Coverage of Nonaccruing Loans of 272 Percent
The reserve for credit losses was $510.5 million at September
30, 1995, compared with $541.2 million at June 30, 1995 and
$567.8 million at September 30, 1994. Reserve coverage
improved over year-ago levels as the ratio of the reserve for
credit losses to nonaccruing loans was 272 percent at
September 30, 1995, compared with 214 percent a year earlier.
The reserve coverage was 283 percent at June 30, 1995.
<PAGE> -14-
Shawmut National Corporation
1995 Third Quarter Results
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
CAPITAL
______________________________________________________________________________________
($ in millions, except per share data)
1995 1994
----------------------------- -------------------
3Q 2Q 1Q 4Q 3Q
<S> <C> <C> <C> <C> <C>
BALANCES
Common Equity $ 2,201 $ 2,275 $ 2,082 $ 2,019 $ 1,951
Tangible Common Equity (a) 1,696 1,765 1,725 1,865 1,800
Total Shareholders' Equity 2,504 2,578 2,385 2,197 2,129
Tier 1 Capital 2,008 2,077 2,061 2,091 2,017
Total Capital 3,069 3,151 3,143 2,919 2,858
Goodwill 505 510 357 154 151
Total Intangibles 518 523 370 168 168
Total Assets 33,057 35,960 34,190 32,399 31,352
CAPITAL RATIOS (%)
Common Equity 6.66 6.33 6.09 6.23 6.22
Tangible Common Equity 5.13 4.91 5.05 5.75 5.74
Tier 1 Capital (b) 7.11 6.96 7.37 8.27 8.47
Total Capital (b) 10.86 10.56 11.24 11.55 11.99
Leverage 6.02 6.08 6.21 6.62 6.54
PER SHARE DATA
Book Value Per Share ($) 17.94 17.95 17.06 16.72 16.32
Average Common
Shares Outstanding (millions) 124.2 123.7 121.6 120.3 119.3
(a) Defined as common equity less goodwill.
(b) As a percent of risk adjusted assets. Third quarter 1995
data are preliminary.
</TABLE>
Book Value of $17.94 Per Share
Book value per share was $17.94 at September 30, 1995, an increase
of 10 percent over a year ago. The slight decrease in book
value from the prior quarter is a result of the Corporation's
common stock repurchase program. Instituted in the second
quarter of 1995, the program is designed to offset 6.5 million
common shares issued in connection with the June 1995 acquisition
of Northeast Federal and approximately 2.5 million common shares
in expected stock option activity. Through September 30, 1995,
8.1 million common shares had been repurchased.
<PAGE> -15-
Shawmut National Corporation
1995 Third Quarter Results
- ---------------------------------------------------------------------------
Shawmut's preliminary Tier 1 and Total risk-based capital ratios
were 7.11 percent and 10.86 percent, respectively, at September
30, 1995, compared with 6.96 percent and 10.56 percent,
respectively, at June 30, 1995. The Leverage ratio, a measure
of Tier 1 capital to average quarterly assets, was 6.02
percent at September 30, 1995, compared with 6.08 percent at June
30, 1995. The Corporation's and its principal banking subsidiaries'
riskbased capital and leverage ratios continue to exceed the
ratios designated for well-capitalized financial institutions.
<TABLE>
<CAPTION>
COMMON STOCK/OTHER DATA
____________________________________________________________________________
1995 1994
-------------------------- ----------------
3Q 2Q 1Q 4Q 3Q
<S> <C> <C> <C> <C> <C>
Market Value Per Share ($)
End of Period 33 5/8 31 7/8 26 3/8 16 3/8 20 3/4
High 34 1/2 32 1/2 26 5/8 20 7/8 23
Low 29 7/8 26 1/4 17 3/8 16 3/8 20 5/8
Average Daily Volume (000) 363 453 1,186 503 448
Book Value Per Share(1) ($) 17.94 17.95 17.06 16.72 16.32
Dividends Declared Per Share ($) .22 .22 .22 .22 .20
Market-to-Book (period-end) 1.87 1.78 1.55 .98 1.27
Preferred Dividends ($) (000) 6.8 7.2 6.0 3.9 3.9
Common Shares Outstanding
Average 124.2 123.7 121.6 120.3 119.3
Period End 122.7 126.7 122.1 120.8 119.6
(1) Period End
</TABLE>
<PAGE> -16-
