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): April 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 21 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 April 19, 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: (Susan E. Lester)
____________________
Susan E. Lester
Chief Financial Officer and
Executive Vice President
Dated: April 19, 1995
-3-
<PAGE>
EXHIBIT INDEX
EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
99.1 Press Release of the Company, dated 5
April 19, 1995, entitled "Shawmut
National Corporation reports first
quarter operating results of $85.7
million, or $.66 per common share."
-4-
<PAGE>
SHAWMUT NATIONAL CORPORATION
1995 First Quarter Results
News Media Contact: Investor Contact:
Vincent Loporchio Thomas R. Rice
(617) 292-3239 (203) 986-4872
SHAWMUT NATIONAL CORPORATION REPORTS FIRST QUARTER OPERATING RESULTS OF
$85.7 MILLION, OR $.66 PER COMMON SHARE
____________________________________________________________________________
BOSTON, Mass., and HARTFORD, Conn., April 19, 1995 - Shawmut National
Corporation (NYSE: SNC) reported operating income of $85.7 million for the
first quarter of 1995, or $.66 per common share, an increase of 6 percent from
the $.62 per common share earned in the first quarter of 1994. First quarter
1995 operating income excluded a $36.9 million pre-tax charge ($23.1 million
after-tax) for the settlement of certain employee retirement benefits
triggered by the agreement to merge with Fleet Financial Group. Including
this charge, net income for the first quarter of 1995 was $62.6 million, or
$.47 per common share.
Commenting on first quarter results, Joel B. Alvord, Shawmut's chairman and
chief executive officer said, "We are pleased with Shawmut's year-over-year
earnings improvement. The leading factor driving earnings growth continues to
be Shawmut's enhanced efficiency. Annualized noninterest expenses for the
quarter declined by approximately $114 million from the level a year ago after
adjusting for purchase acquisitions and one-time items. In addition, despite
the pressures of rising funding costs, the level of net interest income was
maintained."
Mr. Alvord continued, "During the first quarter Shawmut National completed the
acquisition of the business finance division of Barclays Business Credit which
was renamed Shawmut Capital Corporation. This acquisition diversifies
Shawmut's loan portfolio, expands Shawmut's presence in the high-growth, high-
return asset-based lending business and enhances earnings."
On February 21, 1995, Shawmut entered into an agreement to merge with the
Fleet Financial Group of Providence, Rhode Island. This transaction will
create one of the ten largest banking companies in the United States. The
merged company will be the only bank ranked in the top ten which is
headquartered in New England. Commenting on the pending Fleet merger Mr.
Alvord observed, "The approval process has not encountered any unanticipated
issues, and we remain comfortable with the expectation of a closing before
year-end."
<PAGE> 5
<TABLE>
<CAPTION>
INCOME STATEMENT HIGHLIGHTS
____________________________________________________________________________
($ in millions)
1995 1994
1Q(1) 1Q 4Q 3Q 2Q(2) 1Q
(Pro (Actual)
forma)
<S> <C> <C> <C> <C> <C> <C>
Net Interest Income (T-E) $ 273.2 $ 273.2 $ 265.9 $ 268.9 $ 268.7 $ 275.4
Tax Equivalent Adjustment (2.9) (2.9) (2.5) (3.0) (3.0) (2.9)
Net Interest Income 270.3 270.3 263.4 265.9 265.7 272.5
Noninterest Income 95.3 95.3 104.2 91.7 93.9 88.7
Noninterest Expenses (3) 228.7 228.7 224.5 226.4 238.0 241.8
Provision for Credit Losses ---- ---- ---- ---- ---- 3.0
Subtotal 136.9 136.9 143.1 131.2 121.6 116.4
Merger Related Charges ---- 36.9 ---- ---- 100.9 ----
Restructuring Related Charges ---- ---- ---- ---- 39.8 ----
Pre-Tax Income (Loss) 136.9 100.0 143.1 131.2 (19.1) 116.4
Income Taxes (Benefit) 51.2 37.4 49.6 45.9 (.4) 39.1
Net Income (Loss) $ 85.7 $ 62.6 $ 93.5 $ 85.3 $ (18.7) $ 77.3
PERFORMANCE RATIOS
ROA (%) 1.04 .76 1.17 1.09 (.24) 1.02
ROCE (%) 15.45 10.98 17.59 16.52 (4.49) 15.47
Net Interest Margin (%) 3.55 3.55 3.65 3.78 3.76 3.91
Efficiency Ratio(%)(3)(4) 62.0 62.0 60.5 62.8 65.4 65.7
COMMON SHARE DATA:
Net Income (Loss) ($) .66 .47 .74 .68 (.19) .62
</TABLE>
(1) First quarter 1995 results before the $23.1 million after-tax merger-
related charge.
(2) 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.
(3) Excludes merger and restructuring-related charges.
(4) Excludes securities gains and losses and provision for foreclosed
properties.
<PAGE> 6
Net Interest Income
Tax-equivalent net interest income for the first quarter of 1995 was $273.2
million, an increase of $7.3 million, or 3 percent, relative to the fourth
quarter. This increase in net interest income resulted from an increase in
average interest-earning assets of $1.8 billion during the quarter. The
growth in average interest-earning assets was primarily due to the purchase
acquisition of Shawmut Capital which closed on January 31, 1995 with $2.4
billion in assets as of that date.
Net interest margin declined by 10 basis points in the first quarter to 3.55
percent from the fourth quarter margin of 3.65 percent. The margin decline
resulted from the liability sensitive nature of Shawmut's balance sheet in an
environment of rising interest rates. Consistent with its strategy in recent
quarters, Shawmut has extended funding maturities while shortening asset
maturities to lessen liability sensitivity. These risk-reduction actions have
contributed to the decline in net interest margin. One measure of interest
rate risk is the one year gap measuring the dollar amount of liabilities which
reprice within one year in excess of assets repricing over the same time
period. At March 31, 1995, this one year gap was approximately $1.2 billion
showing significantly less liability sensitivity from the $5.9 billion one
year gap reported a year ago.
<TABLE>
<CAPTION>
NET INTEREST INCOME
___________________________________________________________________________
($ in millions)
1995 1994
1Q 4Q 3Q 2Q 1Q
<S> <C> <C> <C> <C> <C>
Average Balances
Loans $ 20,248 $ 18,174 $ 17,516 $ 17,674 $ 17,170
Securities 10,026 10,226 10,079 10,358 10,446
Other Earning Assets 627 679 800 550 670
Total Earning Assets $ 30,901 $ 29,079 $ 28,395 $ 28,582 $ 28,286
Net Interest Margin (%) 3.55 3.65 3.78 3.76 3.91
Net Interest Income (T-E) $ 273.2 $ 265.9 $ 268.9 $ 268.7 $ 275.4
</TABLE>
<PAGE> 7
Noninterest Income of $95.3 Million
Noninterest income was $95.3 million for the first quarter of 1995, an
increase of $6.6 million, or 7 percent relative to the first quarter of 1994.
First quarter 1995 noninterest income declined, however, by $8.9 million from
the fourth quarter of 1994. This reduction was primarily the result of a
decline in gains on sales of mortgage servicing rights, which totaled $.1
million in the first quarter of 1995, a decline of $8.1 million from the $8.2
million recorded in the fourth quarter. Also contributing to the decline in
noninterest income this quarter was a $1.2 million loss on foreign exchange
trading which represented an adverse swing of $4.0 million relative to the
$2.8 million earned in the fourth quarter of 1994. Noninterest income
totaling $3.3 million was generated by Shawmut Capital which added $1.0
million to customer service fees and $2.3 million to other income.
<TABLE>
<CAPTION>
NONINTEREST INCOME
____________________________________________________________________________
($ in millions)
1995 1994
1Q 4Q 3Q 2Q 1Q
<S> <C> <C> <C> <C> <C>
Customer Service Fees $ 51.6 $ 49.8 $ 48.7 $ 48.8 $ 48.5
Trust and Agency Fees 30.8 30.5 28.5 29.1 29.4
Loan Servicing 4.3 12.6 4.6 10.5 4.5
Foreign Exchange Trading (1.2) 2.8 ---- (1.1) (.7)
Trading Account Profits 1.3 1.0 1.0 1.3 1.2
Residential Mortgage Sales (.1) (.1) .9 .1 1.0
Securities Gains (Losses) (.1) ---- .8 ---- (.8)
Other 8.7 7.6 7.2 5.2 5.6
Total Noninterest Income $ 95.3 $ 104.2 $ 91.7 $ 93.9 $ 88.7
</TABLE>
<PAGE> 8
Noninterest Expenses Continues to Show Efficiency Improvements
Shawmut reported noninterest expenses of $228.7 million, excluding the $36.9
million charge associated with the settlement of certain employee retirement
benefits caused by the agreement to merge with Fleet. First quarter 1995
noninterest expenses included $9.0 million attributable to Shawmut Capital.
The quarter's compensation expenses also included $2.9 million of stock
incentive adjustments reflecting the increase in Shawmut's stock price during
the quarter which was strongly influenced by the announcement of the agreement
to merge with Fleet. Noninterest expenses before these items would have been
$216.8 million, a decline of $7.7 million, or 3 percent, relative to the
fourth quarter of 1994. On a comparable basis excluding the expenses of
purchase acquisitions, quarterly noninterest expenses declined by
approximately $28.5 million relative to the first quarter of 1994 for
annualized savings of $114 million. The actions which produced these results
were a part of the company's continuing cost management program and
acquisition consolidation.
<TABLE>
<CAPTION>
NONINTEREST EXPENSES
_____________________________________________________________________________
($ in millions)
1995 1994
1Q 4Q 3Q 2Q 1Q
<S> <C> <C> <C> <C> <C>
Compensation $ 100.1 $ 91.9 $ 97.9 $ 100.0 $ 102.2
Employee Benefits 19.6 19.0 20.9 22.6 23.6
Personnel Expense 119.7 110.9 118.8 122.6 125.8
Occupancy 23.8 24.2 23.8 25.0 26.3
Equipment 14.8 14.5 14.2 13.1 13.4
FDIC Insurance 11.0 10.5 10.3 11.1 11.8
Communications 11.4 12.2 10.3 10.1 10.4
Advertising 6.0 4.3 4.5 6.6 4.5
Foreclosed Properties
Expense 1.6 1.0 .5 2.5 3.7
Goodwill Amortization 4.0 2.6 2.0 1.8 1.7
Provision for Foreclosed
Properties ---- .5 .6 .9 2.0
Other 36.4 43.8 41.4 44.3 42.2
Subtotal 228.7 224.5 226.4 238.0 241.8
Merger Related Expenses 36.9 ---- ---- 100.9 ----
Restructuring Related
Expenses ---- ---- ---- 39.8 ----
Total Noninterest Expenses $ 265.6 $ 224.5 $ 226.4 $ 378.7 $ 241.8
Branches (not restated) 333 338 354 367 270
Employees (FTE's) 9,536 9,565 9,970 10,495 11,002
Efficiency Ratio (percent) 62.0 60.5 62.8 65.4 65.7
</TABLE>
<PAGE> 9
Total personnel expenses in the first quarter increased by $8.8 million, or 8
percent relative to the $110.9 million level reported in 1994's fourth
quarter. This increase included compensation expense for Shawmut Capital of
$5.9 million as well as the $2.9 million expense for stock incentives
discussed above. Without these two items, personnel expense would have been
$110.9 million, flat compared with the fourth quarter of 1994, and down $14.9
million, or 12 percent, from the first quarter one year ago. The year-over-
year cost savings followed a decline in head count of 1,466, or 13 percent,
measured on a full-time equivalent (FTE) basis relative to the first quarter
of 1994. This was accomplished despite the addition of approximately 300
FTE's at Shawmut Capital.
No Provision for Credit Losses for the First Quarter of 1995
The first quarter of 1995 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). As discussed in more detail below, the reserve
for credit losses increased by $17.1 million as acquired reserves within
Shawmut Capital exceeded net charge-offs during the reporting period. 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 $24.6 million during the first quarter of 1995. This
compares with net charge-offs of $25.7 million in the fourth quarter of 1994
and $33.7 million during the first quarter a year ago.
Income Taxes
Income taxes for the first quarter of 1995 were $37.4 million, representing an
effective income tax rate of 37.4 percent. This compares with income taxes of
$39.1 million for the comparable prior year quarter, or an effective income
tax rate of 33.6 percent.
<PAGE> 10
<TABLE>
<CAPTION>
ASSET SUMMARY
___________________________________________________________________________
($ in millions)
1995 1994
1Q 4Q 3Q 2Q 1Q
<S> <C> <C> <C> <C> <C>
Average Balances
Cash and Due from Banks $ 1,350 $ 1,475 $ 1,478 $ 1,464 $ 1,551
Loans 20,248 18,174 17,516 17,674 17,170
Reserve for Credit Losses (563) (562) (595) (633) (668)
Net Loans 19,685 17,612 16,921 17,041 16,502
Securities 10,026 10,226 10,079 10,358 10,446
Other Earning Assets 627 679 800 550 670
Total Earning Assets 30,901 29,079 28,395 28,582 28,286
Other Assets 1,836 1,670 1,701 1,696 1,584
Total Assets $ 33,524 $ 31,662 $ 30,979 $ 31,109 $ 30,753
End of Period Balances
Cash and Due from Banks $ 1,485 $ 1,986 $ 1,461 $ 1,320 $ 1,358
Loans 21,135 18,487 17,736 17,329 17,559
Reserve for Credit Losses (559) (542) (568) (590) (639)
Net Loans 20,576 17,945 17,168 16,739 16,920
Securities 9,873 9,992 10,287 9,846 10,365
Other Earning Assets 409 849 635 1,095 735
Total Earning Assets 31,417 29,328 28,658 28,270 28,659
Other Assets 1,847 1,627 1,801 1,692 1,869
Total Assets $ 34,190 $ 32,399 $ 31,352 $ 30,692 $ 31,247
</TABLE>
Average Interest-Earning Assets Increase by $1.8 Billion in First Quarter
Shawmut's total average interest-earning assets increased by $1.8 billion, or
6 percent, from the fourth quarter of 1994. This increase included a $1.7
billion increment to average interest-earning assets from the purchase
acquisition of Shawmut Capital on January 31, 1995. At quarter end, Shawmut
Capital had $2.8 billion in assets, including $2.6 billion in loans.
<PAGE> 11
<TABLE>
<CAPTION>
LOANS BY TYPE
___________________________________________________________________________
(Period End - $ in millions)
1995 1994
1Q 4Q 3Q 2Q 1Q
<S> <C> <C> <C> <C> <C>
Commercial/Industrial $ 9,644.0 $ 7,006.4 $ 6,201.3 $ 5,992.7 $ 6,188.7
Owner-Occupied
Commercial Real Estate 1,564.7 1,412.0 1,423.4 1,407.1 1,421.8
Real Estate Investor/Developer
Commercial Mortgage 1,231.6 1,309.2 1,401.3 1,461.0 1,518.7
Construction & Other 136.4 157.4 150.5 150.9 152.1
Total Investor/Developer 1,368.0 1,466.6 1,551.8 1,611.9 1,670.8
Consumer
Residential Mortgage 5,541.2 5,592.1 5,608.1 5,474.0 5,570.3
Home Equity 1,582.9 1,625.7 1,628.8 1,609.9 1,580.1
Installment/Other 1,434.0 1,384.3 1,322.5 1,233.5 1,127.5
Total Consumer 8,558.1 8,602.1 8,559.4 8,317.4 8,277.9
TOTAL $ 21,134.8 $ 18,487.1 $ 17,735.9 $ 17,329.1 $ 17,559.2
</TABLE>
Loans Increase by $2.6 Billion
Shawmut's period-end loan portfolio grew by $2.6 billion, or 14 percent, in
the first quarter of 1995 from December 31, 1994. Shawmut Capital displayed
robust growth with loans rising by $157 million from the $2.4 billion on the
January 31, 1995 acquisition date to $2.6 billion at quarter end. Declines in
the investor/developer portfolio and residential mortgages of $98.6 million
and $50.9 million, respectively, were offset by growth in the commercial and
industrial portfolio of $155.9 million (excluding Shawmut Capital), and an
increase of $49.7 million in consumer installment lending.
<PAGE> 12
<TABLE>
<CAPTION>
CREDIT QUALITY
______________________________________________________________________________
($ in millions)
1995 1994
1Q 4Q 3Q 2Q 1Q
<S> <C> <C> <C> <C> <C>
Nonaccruing Loans $ 228.4 $ 224.0 $ 265.9 $ 285.2 $ 328.6
Foreclosed Properties 11.9 18.8 32.1 42.5 51.5
Total Problem Assets $ 240.3 $ 242.8 $ 298.0 $ 327.7 $ 380.1
Restructured Loans $ 29.8 $ 41.8 $ 31.1 $ 63.8 $ 63.6
Accruing Loans Past Due
90 Days or More $ 55.6 $ 43.3 $ 53.1 $ 47.8 $ 46.4
Reserve for Credit Losses $ 559.2 $ 542.1 $ 567.8 $ 589.8 $ 638.5
Problem Assets as a Percent
of Loans Plus Foreclosed
Properties 1.14% 1.31% 1.68% 1.89% 2.16%
Reserve as a Percent of
Nonaccruing Loans 245% 242% 214% 207% 194%
PROBLEM ASSET FLOWS
Inflows $ 102.0(1) $ 55.4 $ 64.9 $ 56.8 $ 52.6
Outflows(2) $ 69.0(3) $ 69.9 $ 60.9 $ 67.1 $ 58.9
</TABLE>
(1) Includes $36.9 million from the purchase of Shawmut Capital.
(2) Outflows are cash payments, transfers to accruing or to restructured,
and sales.
(3) Includes $15.6 million identified as assets held for accelerated
disposition.
Problem Assets Decrease by 1 Percent during the First Quarter of 1995
Total problem assets at March 31, 1995 decreased to $240.3 million, a decrease
of $2.5 million, or 1 percent, from $242.8 million at December 31, 1994 and
down $139.8 million, or 37 percent, from $380.1 million a year ago. The
acquisition of Shawmut Capital added $14.1 million to problem asset totals at
period end. An additional $13.0 million of assets within Shawmut Capital
were identified as problem assets held for accelerated disposition. The
ratio of nonaccruing loans plus foreclosed properties to loans plus
foreclosed properties declined to 1.14 percent at March 31, 1995,
compared with 1.31 percent at December 31, 1994 and 2.16 percent at March
31, 1994. Foreclosed properties declined by $6.9 million, or 37 percent, to
$11.9 million at March 31, 1995 from $18.8 million at December 31, 1994.
<PAGE> 13
<TABLE>
<CAPTION>
RESERVE FOR CREDIT LOSSES
___________________________________________________________________________
($ in millions)
1995 1994
1Q 4Q 3Q 2Q 1Q
<S> <C> <C> <C> <C> <C>
Balance at Beginning of Period $ 542.1 $ 567.8 $ 589.8 $ 638.5 $ 669.2
Net Charge-offs 24.6 25.7 26.3 48.7(1) 33.7
Addition for Loans Purchased 41.7 ---- 4.3 ---- ----
Provision for Credit Losses ---- ---- ---- ---- 3.0
Balance at End of Period $ 559.2 $ 542.1 $ 567.8 $ 589.8 $ 638.5
Provision for Foreclosed
Properties $ ---- $ .5 $ .6 $ .9 $ 2.0
Reserve as a Percent of
Nonaccruing Loans 245% 242% 214% 207% 194%
</TABLE>
(1) Includes $24.7 million relating to the acquired institutions.
Reserve Coverage of Nonaccruing Loans Rises to 245 Percent
The reserve for credit losses was $559.2 million at March 31, 1995, compared
with $542.1 million at December 31, 1994 and $638.5 million at March 31,
1994. Reserves of $41.7 million were added with the acquisition of Shawmut
Capital. Reserve coverage improved over year-ago levels as the ratio of the
reserve for credit losses to nonaccruing loans was 245 percent at March 31,
1995, compared with 194 percent a year earlier. The reserve coverage was 242
percent at December 31, 1994. Net charge-offs were $24.6 million in the first
quarter, down $9.1 million, or 27 percent, from the same quarter a year ago.
<PAGE> 14
<TABLE>
<CAPTION>
CAPITAL
____________________________________________________________________________
($ in millions, except per share data)
1995 1994
1Q 4Q 3Q 2Q 1Q
<S> <C> <C> <C> <C> <C>
BALANCES
Common Equity $ 2,083 $ 2,019 $ 1,951 $ 1,890 $ 1,937
Tangible Common Equity (a) 1,726 1,865 1,800 1,772 1,828
Total Shareholders' Equity 2,386 2,197 2,129 2,068 2,130
Tier 1 Capital 2,062 2,091 2,017 1,979 2,043
Total Capital 3,145 2,919 2,858 2,814 2,904
Goodwill 357 154 152 119 108
Total Intangibles 370 168 168 136 127
Total Assets 34,190 32,399 31,352 30,692 31,247
CAPITAL RATIOS (%)
Common Equity 6.09 6.23 6.22 6.16 6.20
Tangible Common Equity 5.05 5.75 5.74 5.77 5.85
Tier 1 Capital (b) 7.33 8.27 8.47 8.49 8.90
Total Capital (b) 11.19 11.55 11.99 12.07 12.65
Leverage 6.21 6.62 6.54 6.38 6.66
PER SHARE DATA
Book Value Per Share ($) 17.06 16.72 16.32 15.93 16.41
Average Common
Shares Outstanding (millions) 121.6 120.3 119.3 118.4 117.8
</TABLE>
(a) Defined as common equity less goodwill.
(b) As a percent of risk adjusted assets. First quarter 1995 data are
preliminary.
Book Value Increases to $17.06 Per Share
Book value per share increased by $.34, or 2 percent, to $17.06 per share
during the first quarter of 1995 as common shareholders' equity increased by
$64 million. Shawmut's preliminary Tier 1 and Total risk-based capital ratios
were 7.33 percent and 11.19 percent, respectively, at March 31, 1995, compared
with 8.27 percent and 11.55 percent, respectively, at December 31, 1994. The
declines in capital ratios resulted from the increases in both assets and
goodwill as a result of the acquisition of Shawmut Capital. During the first
quarter Shawmut issued $125 million of fixed rate perpetual preferred stock
which
<PAGE> 15
counted toward Tier 1 capital. Shawmut also added to Total capital through
the issuance of $250 million of subordinated bank notes. The Leverage ratio,
a measure of Tier 1 capital to average quarterly assets, was 6.21 percent at
March 31, 1995, compared with 6.62 percent at December 31, 1994. The
Corporation's and its principal banking subsidiaries' risk-based capital and
leverage ratios continue to exceed the ratios designated for well-capitalized
financial institutions.
<TABLE>
<CAPTION>
COMMON STOCK/OTHER DATA
____________________________________________________________________________
1995 1994
1Q 4Q 3Q 2Q 1Q
<S> <C> <C> <C> <C> <C>
Market Value Per Share ($)
End of Period 26 3/8 16 3/8 20 3/4 22 20 1/4
High 26 5/8 20 7/8 23 24 3/4 23 7/8
Low 17 3/8 16 3/8 20 5/8 19 1/2 20 1/8
Average Daily Volume (000) 1,186 503 448 632 499
Book Value Per Share(1) ($) 17.06 16.72 16.32 15.93 16.41
Dividends Declared Per Share ($) .22 .22 .20 .20 .20
Market-to-Book (period-end) 1.55 .98 1.27 1.38 1.23
</TABLE>
(1) Period End
Other Noteworthy Items in the Quarter Included:
Shawmut Completes Acquisition of Business Finance Division of Barclays
Business Credit - January 31.
On January 31, 1995, Shawmut completed the acquisition of the business finance
division of Barclays Business Credit, a U.S. commercial finance operation of
Barclays PLC. A cash premium of $290 million was paid. The unit was renamed
Shawmut Capital Corporation, and operates as a subsidiary of Shawmut Bank
Connecticut, N.A. Based in Glastonbury, Connecticut, Shawmut Capital
Corporation provides secured corporate financing to middle-market companies
through 16 offices -- 14 located outside of New England. As of March 31,
1995, loans were $2.6 billion, more than 90 percent with borrowers outside of
New England.
<PAGE> 16
Shawmut and Fleet Agree to Merge - February 21
On February 21, 1995, Shawmut National Corporation and Fleet Financial
Group entered into an Agreement and Plan of Merger. The proposed merger
will create one of the ten largest banks in the country and the only one
headquartered in New England. The combined institution has pro-forma
financial characteristics including more than $80 billion in assets, a
retail network of nearly 1,000 branches, $56 billion in deposits and a
market capitalization of $9 billion. Nationally it will rank as the
largest third-party student loan servicer, the second largest mortgage
company, the third largest small business loan portfolio, the sixth
largest retail branch network and the tenth largest commercial loan
portfolio. The merger is expected to be completed by the end of 1995.
<PAGE> 17
SHAWMUT NATIONAL CORPORATION
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
(in millions, except QUARTER ENDED
per share data) MAR 95 DEC 94 SEP 94 JUN 94 MAR 94
<S> <C> <C> <C> <C> <C>
INTEREST INCOME
AND EXPENSES
Tax-equivalent interest
and dividend income $ 584.3 $ 524.6 $ 492.8 $ 474.6 $ 457.3
Interest expense 311.1 258.7 223.9 205.9 181.9
Tax-equivalent net
interest income 273.2 265.9 268.9 268.7 275.4
Tax-equivalent adjustment 2.9 2.5 3.0 3.0 2.9
Net interest income 270.3 263.4 265.9 265.7 272.5
Provision for credit losses 3.0
Net interest income after provision
for credit losses 270.3 263.4 265.9 265.7 269.5
NONINTEREST INCOME
Customer service fees 51.6 49.8 48.7 48.8 48.5
Trust and agency fees 30.8 30.5 28.5 29.1 29.4
Securities gains (losses), net (0.1) -- 0.8 -- (0.8)
Other 13.0 23.9 13.7 16.0 11.6
Total 95.3 104.2 91.7 93.9 88.7
NONINTEREST EXPENSES
Compensation and benefits 119.7 110.9 118.8 122.6 125.8
Occupancy and equipment 38.6 38.7 38.0 38.1 39.7
Foreclosed properties
Provision -- 0.5 0.6 0.9 2.0
Expenses 1.6 1.0 0.5 2.5 3.7
Merger related charges 36.9 100.9
Restructuring related charges 39.8
Other 68.8 73.4 68.5 73.9 70.6
Total 265.6 224.5 226.4 378.7 241.8
Income (loss) before income taxes 100.0 143.1 131.2 (19.1) 116.4
Income taxes (benefit) 37.4 49.6 45.9 (0.4) 39.1
Net income (loss) $ 62.6 $ 93.5 $ 85.3 $ (18.7) $ 77.3
COMMON SHARE DATA
Net income (loss) $ 0.47 $ 0.74 $ 0.68 $ (0.19) $ 0.62
Dividends declared 0.22 0.22 0.20 0.20 0.20
Book value 17.06 16.72 16.32 15.93 16.41
Average shares 121.6 120.3 119.3 118.4 117.8
End of period shares 122.1 120.8 119.6 118.6 118.0
Preferred dividends declared $ 6.0 $ 3.9 $ 3.9 $ 3.8 $ 3.9
</TABLE>
<PAGE> 18
<TABLE>
<CAPTION>
QUARTER ENDED
(in millions) MAR 95 DEC 94 SEP 94 JUN 94 MAR 94
<S> <C> <C> <C> <C> <C>
AVERAGE BALANCES
Loans $ 20,248 $ 18,174 $ 17,516 $ 17,674 $ 17,170
Securities 10,026 10,226 10,079 10,358 10,446
Interest-earning assets 30,901 29,079 28,395 28,582 28,286
Total assets 33,524 31,662 30,979 31,109 30,753
Core deposits 17,121 17,696 17,877 17,635 17,642
Other borrowings 8,340 7,546 7,527 9,101 9,292
Notes and debentures 2,234 1,860 1,619 1,108 760
Interest-bearing liabilities 26,539 24,639 24,034 24,174 23,831
Common shareholders' equity 2,092 2,021 1,955 2,012 1,925
Shareholders' equity 2,361 2,199 2,134 2,200 2,118
END OF PERIOD BALANCES
Loans $ 21,135 $ 18,487 $ 17,736 $ 17,329 $ 17,559
Securities 9,873 9,992 10,287 9,846 10,365
Interest-earning assets 31,417 29,328 28,658 28,270 28,659
Total assets 34,190 32,399 31,352 30,692 31,247
Core deposits 16,871 18,337 17,788 18,245 17,251
Other borrowings 8,371 7,087 7,669 7,311 10,052
Notes and debentures 2,397 2,022 1,634 1,609 859
Interest-bearing liabilities 27,381 24,693 24,439 23,624 24,663
Common shareholders' equity 2,083 2,019 1,951 1,890 1,937
Shareholders' equity 2,386 2,197 2,129 2,068 2,130
Tier 1 capital (a) 2,062 2,091 2,017 1,979 2,043
Total capital (a) 3,145 2,919 2,858 2,814 2,904
(a) March 1995 data are preliminary.
</TABLE>
<PAGE> 19
<TABLE>
<CAPTION>
QUARTER ENDED
(in millions) MAR 95 DEC 94 SEP 94 JUN 94 MAR 94
LOANS BY TYPE
<S> <C> <C> <C> <C> <C>
Commercial/industrial $ 9,644.0 $ 7,006.4 $ 6,201.3 $ 5,992.7 $ 6,188.7
Owner-occupied commercial
real estate 1,564.7 1,412.0 1,423.4 1,407.1 1,421.8
Real estate investor/
developer
Commercial mortgage 1,231.6 1,309.2 1,401.3 1,461.0 1,518.7
Construction and other 136.4 157.4 150.5 150.9 152.1
Consumer
Residential mortgage 5,541.2 5,592.1 5,608.1 5,474.0 5,570.3
Home equity 1,582.9 1,625.7 1,628.8 1,609.9 1,580.1
Installment/other 1,434.0 1,384.3 1,322.5 1,233.5 1,127.5
Total $ 21,134.8 $ 18,487.1 $ 17,735.9 $ 17,329.1 $ 17,559.2
NONACCRUING LOANS
BY TYPE
Commercial/industrial $ 55.0 $ 36.0 $ 59.3 $ 60.6 $ 63.6
Owner-occupied commercial
real estate 52.0 57.6 59.8 67.5 72.8
Real estate investor/
developer
Commercial mortgage 64.5 66.9 65.9 70.6 92.0
Construction and other 4.7 16.0 24.1 20.9 24.9
Consumer
Residential mortgage 42.6 38.4 46.2 48.8 61.2
Home equity 7.2 6.5 7.0 8.2 9.2
Installment/other 2.4 2.6 3.6 8.6 4.9
Total $ 228.4 $ 224.0 $ 265.9 $ 285.2 $ 328.6
</TABLE>
<PAGE> 20
<TABLE>
<CAPTION>
(in millions, except QUARTER ENDED
ratio data) MAR 95 DEC 94 SEP 94 JUN 94 MAR 94
ASSET QUALITY
<S> <C> <C> <C> <C> <C>
Nonaccruing loans
Less than 90 days past due $ 76.6 $ 72.5 $ 72.5 $ 78.1 $ 90.2
90 or more days past due 151.8 151.5 193.4 207.1 238.4
Total nonaccruing loans 228.4 224.0 265.9 285.2 328.6
Foreclosed properties 11.9 18.8 32.1 42.5 51.5
Total nonaccruing loans plus
foreclosed properties $ 240.3 $ 242.8 $ 298.0 $ 327.7 $ 380.1
Restructured loans $ 29.8 $ 41.8 $ 31.1 $ 63.8 $ 63.6
Accruing loans past
due 90 days or more $ 55.6 $ 43.3 $ 53.1 $ 47.8 $ 46.4
Nonaccruing loans to loans 1.08 % 1.21 % 1.50 % 1.65 % 1.87 %
Nonaccruing loans plus
foreclosed properties to loans
plus foreclosed properties 1.14 1.31 1.68 1.89 2.16
Reserve for credit losses to
nonaccruing loans 245.00 242.00 214.00 207.00 194.00
RESERVE FOR CREDIT LOSSES
Beginning balance $ 542.1 $ 567.8 $ 589.8 $ 638.5 $ 669.2
Provision 3.0
Addition for loans purchased 41.7 4.3
Loan charge-offs (33.4) (43.7) (40.7) (60.5) (45.7)
Recoveries 8.8 18.0 14.4 11.8 12.0
Net charge-offs (24.6) (25.7) (26.3) (48.7) (33.7)
Ending balance $ 559.2 $ 542.1 $ 567.8 $ 589.8 $ 638.5
Net charge-offs (annualized) to
average loans 0.49 % 0.57 % 0.60 % 1.10 % 0.78 %
Reserve for credit losses to loans 2.65 2.93 3.20 3.40 3.64
Reserve for credit losses to
net charge-offs (annualized) 5.67 X 5.28 X 5.40 X 3.03 X 4.75 X
</TABLE>
<PAGE> 21
