<PAGE> 1
PROSPECTUS SUPPLEMENT Filed pursuant to Rule 424(b) 2
(TO PROSPECTUS DATED MARCH 17, 1994)
$100,000,000
SOUTHTRUST CORPORATION (LOGO)
7 5/8% SUBORDINATED NOTES DUE 2004
------------------
Interest on the 7 5/8% Subordinated Notes due 2004 (the "Notes") is payable
by SouthTrust Corporation (the "Company") semi-annually on May 1 and November 1
of each year, beginning November 1, 1994. The Notes are not subject to
redemption prior to maturity. The Notes will be represented by Global Securities
registered in the name of the nominee of The Depository Trust Company, which
will act as the Depositary. Interests in the Notes represented by Global
Securities will be shown on, and transfers thereof will be effected only
through, records maintained by the Depositary and its direct and indirect
participants. Except as described herein, Notes in definitive form will not be
issued.
The Notes will be unsecured and subordinated in right of payment to the
prior payment in full of all present and future Senior Indebtedness of the
Company. See "Description of Debt Securities -- Subordinated Securities" in the
accompanying Prospectus. The Notes are subject to acceleration only in the event
of bankruptcy, insolvency or reorganization of the Company. There will be no
right of acceleration in the case of a default in the payment of interest or in
the performances of any other covenant, or a default in the Notes or in the
Indenture. See "Description of the Notes" herein and "Description of Debt
Securities" in the accompanying Prospectus.
------------------
THE NOTES OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS, DEPOSITS OR OTHER
OBLIGATIONS OF ANY INSURED DEPOSITARY INSTITUTION OR OTHER SUBSIDIARY
OF THE COMPANY AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS SUPPLEMENT OR THE PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO
PUBLIC(1) DISCOUNT(2) COMPANY(1)(3)
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Note 99.592% .65% 98.942%
- ------------------------------------------------------------------------------------------------
Total $99,592,000 $650,000 $98,942,000
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
</TABLE>
(1) Plus accrued interest, if any, from May 5, 1994.
(2) The Company has agreed to indemnify the several Underwriters against certain
liabilities under the Securities Act of 1933. See "Underwriting."
(3) Before deduction of expenses payable by the Company estimated at $100,000.
------------------
The Notes are offered by the several Underwriters, subject to prior sale,
when, as and if issued to and accepted by them, subject to approval of certain
legal matters by counsel for the Underwriters and certain other conditions. The
Underwriters reserve the right to withdraw, cancel or modify such offer and to
reject orders in whole or in part. It is expected that delivery of the Notes
will be made through the book-entry facilities of the Depositary on or about May
5, 1994.
------------------
MERRILL LYNCH & CO.
CS FIRST BOSTON
DEAN WITTER REYNOLDS INC.
------------------
The date of this Prospectus Supplement is April 26, 1994.
<PAGE> 2
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE NOTES OFFERED
HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET.
SUCH STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
---------------------
SOUTHTRUST CORPORATION
The Company is a regional bank holding company headquartered in Birmingham,
Alabama. As of March 31, 1994, the Company had consolidated total assets of
approximately $15.1 billion. Following the enactment of Alabama's interstate
banking legislation in 1987, the Company has pursued a strategy of acquiring
banks and financial institutions throughout the major growth areas of Florida,
Georgia, North Carolina, South Carolina and Tennessee and currently offers a
full range of banking services through 39 bank subsidiaries operating more than
395 offices. The Company, through its bank-related subsidiaries, also offers a
range of other services, including mortgage banking services, data processing
services and securities brokerage services. The largest bank subsidiary of the
Company is SouthTrust Bank of Alabama, N.A., Birmingham, Alabama (the oldest
predecessor of which was incorporated in 1887), which had approximately $4.8
billion in total assets as of March 31, 1994. Of the Company's approximately
$15.1 billion in assets as of March 31, 1994, approximately $9.2 billion were in
Alabama, approximately $2.7 billion were in Georgia and approximately $2.4
billion were in Florida.
The Company has taken advantage of the passage of interstate banking
legislation by acquiring banks in major metropolitan markets in Florida,
Georgia, North Carolina, South Carolina and Tennessee. The effect of this
expansion has been to give the Company access to metropolitan markets with
favorable prospects for growth of population, per capita income, and business
development opportunities.
During 1993, the Company effected acquisitions of 14 financial
institutions, with total assets aggregating $1.3 billion. The following table
presents certain information with respect to acquisitions which are currently
pending:
<TABLE>
<CAPTION>
TOTAL
TOTAL DEPOSITS TOTAL
INSTITUTION LOCATION ASSETS TOTAL LOANS*
------------------------------------ ------------------------ ------ ------------- ------
(IN MILLIONS)
<S> <C> <C> <C> <C>
First Columbus Community Bank &
Trust Company..................... Columbus, Georgia $ 54.2 $ 48.2 $ 35.7
Community Bank of Charlotte......... Port Charlotte, Florida 38.7 33.1 29.7
Island Bank of Collier County....... Marco Island, Florida 29.3 24.9 14.0
Citrus National Bank................ Crystal River, Florida 35.7 32.1 22.2
The Bank of Bradenton............... Bradenton, Florida 46.8 42.3 24.6
University State Bank Corp.......... Tampa, Florida 19.8 17.5 11.8
First Jefferson Corporation......... Biloxi, Mississippi 42.3 39.7 21.9
HomeBanc, F.S.B..................... Atlanta, Georgia 304.8 265.6 246.1
</TABLE>
- ---------------
* Net of unearned income
The Company anticipates accounting for each of these pending transactions
pursuant to the purchase method of accounting, with the exception of First
Columbus Community Bank & Trust Company, The Bank of Bradenton and Community
Bank of Charlotte, which will be accounted for as poolings of interests.
Consummation of the pending transactions is subject, in each case, to, among
other things, approval by applicable regulatory authorities.
As a routine part of its business, the Company evaluates opportunities to
acquire bank holding companies, banks and other financial institutions. Thus, at
any particular point in time, including the date of this Prospectus Supplement,
discussions and, in some cases, negotiations and due diligence activities
looking toward or culminating in the execution of preliminary or definitive
documents respecting potential acquisitions
S-2
<PAGE> 3
may occur or be in progress. These transactions may involve the Company
acquiring such financial institutions in exchange for cash or capital stock.
The principal executive offices of the Company are located at 420 North
20th Street, Birmingham, Alabama 35203, and its telephone number is (205)
254-5000.
USE OF PROCEEDS
The Company currently intends to use approximately $30 million of the net
proceeds from the sale of the Notes to repay certain outstanding long-term
indebtedness due December 1994, which bears a floating interest rate, and
certain outstanding long-term indebtedness due March 1995, which bears an
interest rate of 9.08%. The remainder of the net proceeds will be used for
general corporate purposes, which may include contributing capital to or
extending credit to current and future bank and bank-related subsidiaries of the
Company and possible acquisitions of financial institutions. Pending such use,
the Company may invest the net proceeds in investment securities or other
short-term investments. The precise amount and timing of the application of such
proceeds will depend upon actual funding requirements and the availability of
other funds.
S-3
<PAGE> 4
RECENT DEVELOPMENTS
Net income for the first quarter 1994 was $40.7 million or $0.51 per share
compared to $34.8 million or $0.46 per share for the first quater of 1993. Net
income during the first quarter 1994 resulted in a return on average assets of
1.12% and a return on average stockholders' equity of 15.62% compared to 1.10%
and 15.92%, respectively, during the first quarter of 1993. Total assets reached
$15.1 billion at March 31, 1994, up 12% from $13.4 billion at March 31, 1993.
Total loans grew 21% to $9.8 billion and total deposits were $11.5 billion
compared to $10.7 billion at March 31, 1993. Total stockholders' equity
increased 12% to $1,068.6 million at March 31, 1994 from $923.6 million one year
earlier.
SELECTED FINANCIAL DATA
The following table sets forth certain selected historical consolidated
financial information for the Company. The historical income statement data
included in the selected financial data for the five most recent fiscal years
are derived from audited consolidated financial statements of the Company. The
financial data for the interim periods ended March 31, 1994 and 1993 are derived
from the unaudited historical financial statements of the Company and reflect,
in the opinion of management of the Company, all adjustments (consisting only of
recurring adjustments) necessary for a fair presentation of such data. This
information should be read in conjunction with the consolidated financial
statements of the Company, and the related notes thereto, included in documents
incorporated herein by reference.
SOUTHTRUST CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEARS ENDED DECEMBER 31,
---------------------- -------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
--------- --------- --------- --------- --------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
INCOME STATEMENT DATA
(in thousands except per share
data)
Interest income............... $ 238,207 $ 224,332 $ 927,551 $ 828,080 $ 823,725 $776,661 $684,624
Interest expense.............. 99,881 96,320 397,743 382,930 474,453 498,329 450,147
--------- --------- --------- --------- --------- -------- --------
Net interest income.... 138,326 128,012 529,808 445,150 349,272 278,332 234,477
Provision for loan losses..... 10,189 11,305 45,032 43,305 38,042 44,635 21,166
--------- --------- --------- --------- --------- -------- --------
Net interest income after
provision for loan losses... 128,137 116,707 484,776 401,845 311,230 233,697 213,311
Non-interest income........... 46,822 38,081 174,702 136,683 108,881 91,084 78,686
Non-interest expense.......... 113,405 103,175 434,951 373,636 296,796 234,713 200,147
--------- --------- --------- --------- --------- -------- --------
Income before income taxes.... 61,554 51,613 224,527 164,892 123,315 90,068 91,850
Provision for income taxes.... 20,817 16,769 73,992 50,646 33,309 20,360 19,075
--------- --------- --------- --------- --------- -------- --------
Net income............. $ 40,737 $ 34,844 $ 150,535 $ 114,246 $ 90,006 $ 69,708 $ 72,775
--------- --------- --------- --------- --------- -------- --------
--------- --------- --------- --------- --------- -------- --------
Net income per common share
and common share
equivalent.................. $ 0.51 $ 0.46 $ 1.94 $ 1.66 $ 1.42 $ 1.14 $ 1.21
Cash dividends declared per
common share................ 0.17 0.15 0.60 0.52 0.48 0.46 0.43
Average common shares and
common share equivalents
outstanding................. 79,847 76,245 77,772 68,948 63,255 61,148 60,077
BALANCE SHEET DATA (at period
end)
(in millions)
Total assets.................. $15,081.0 $13,427.7 $14,708.0 $12,714.4 $10,158.1 $9,005.9 $7,763.2
Total loans net of unearned
income...................... 9,849.4 8,121.5 9,448.3 7,546.6 5,965.0 5,531.4 4,690.5
Total deposits................ 11,538.3 10,651.9 11,515.3 10,082.0 8,277.2 7,228.0 6,054.5
Total stockholders' equity.... 1,068.6 923.6 1,051.8 860.4 662.0 549.6 507.1
</TABLE>
S-4
<PAGE> 5
<TABLE>
<CAPTION>
THREE MONTHS
ENDED MARCH 31, YEARS ENDED DECEMBER 31,
---------------- ------------------------------------------
1994 1993 1993 1992 1991 1990 1989
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED RATIOS
Return on average assets...................... 1.12% 1.10% 1.10% 1.04% 0.96% 0.85% 1.03%
Return on average stockholders' equity........ 15.62 15.92 15.84 15.66 15.21 13.29 15.44
Net interest margin -- fully taxable
equivalent.................................. 4.27 4.53 4.35 4.61 4.32 4.03 4.06
Net interest spread -- fully taxable
equivalent.................................. 3.78 4.05 3.88 4.07 3.65 3.15 2.98
CREDIT QUALITY ANALYSIS
(in millions)
Non-accrual loans............................. $ 58.2 $ 53.6 $ 58.6 $ 71.6 $ 70.6 $ 42.0 $ 32.9
Restructured loans............................ 2.4 2.0 8.8 0.7 3.7 8.7 5.3
------ ------ ------ ------ ------ ------ ------
Total non-performing loans.................. 60.6 55.6 67.4 72.3 74.3 50.7 38.2
Other real estate owned....................... 43.4 60.6 45.7 56.5 68.3 60.4 19.8
------ ------ ------ ------ ------ ------ ------
Total non-performing assets................. 104.0 116.2 113.1 128.8 142.6 111.1 58.0
Accruing loans
90 days or more past due.................... 16.9 16.7 13.2 11.1 12.0 13.9 6.5
------ ------ ------ ------ ------ ------ ------
Total non-performing assets and accruing
loans 90 days or more past due............ $120.9 $132.9 $126.3 $139.9 $154.6 $125.0 $ 64.5
------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------
Provision for loan losses..................... $ 10.2 $ 11.3 $ 45.0 $ 43.3 $ 38.0 $ 44.6 $ 21.2
Net charge-offs............................... $ 2.7 $ 7.8 $ 24.6 $ 31.5 $ 31.7 $ 37.0 $ 16.6
RATIOS
For the Period Ended:
Net change-offs as a % of average net loans
(annualized basis)........................ 0.12% 0.41% 0.29% 0.49% 0.55% 0.74% 0.38%
Period End:
Allowance as a % of net loans............... 1.45 1.38 1.43 1.38 1.35 1.28 1.27
Allowance as a % non-performing loans....... 235.68 201.61 200.70 143.35 108.23 139.54 156.36
Non-performing assets as a % of loans net of
unearned income plus OREO................. 1.05 1.42 1.19 1.69 2.36 1.99 1.23
Non-performing assets and accuring loans 90
days or more past due as a % of loans net
of unearned income plus OREO.............. 1.22 1.62 1.33 1.84 2.56 2.24 1.37
LIQUIDITY AND CAPITAL ADEQUACY RATIOS
Loans/deposits................................ 85.36% 76.24% 82.05% 74.85% 72.07% 76.53% 77.47%
Equity/assets................................. 7.09 6.88 7.15 6.77 6.52 6.10 6.53
Tier I risk-based capital..................... 8.45* 8.77 8.55 8.67 7.92 7.71 7.91
Total risk-based capital...................... 12.15* 12.15 12.39 12.18 10.62 10.52 10.76
Leverage...................................... 6.57 6.45 6.51 6.48 5.91 6.27 6.97
</TABLE>
- ---------------
* Estimated for March 31, 1994
S-5
<PAGE> 6
DESCRIPTION OF THE NOTES
GENERAL
The following is a brief description of the terms of the Notes. This
description does not purport to be complete, should be read in conjunction with
the statements under "Description of Debt Securities" in the accompanying
Prospectus and is subject to and qualified in its entirety by such description
and the Subordinated Indenture dated as of May 1, 1992 (the "Indenture"),
between the Company and Chemical Bank, as Trustee (the "Trustee"). The Indenture
is an exhibit to the Registration Statement of which the accompanying Prospectus
and this Prospectus Supplement form a part.
The Notes offered hereby will mature on May 1, 2004 and are limited to
$100,000,000 aggregate principal amount. The Notes will bear interest at the
rate of 7 5/8% per annum, commencing on May 5, 1994. Interest will be payable
semi-annually on May 1 and November 1 of each year, commencing November 1, 1994,
to the persons in whose names the Notes are registered at the close of business
fifteen calendar days prior to the applicable interest payment date and at
maturity to the persons to whom principal is payable. Principal and interest
will be payable at the corporate trust operations office of the Trustee located
at 450 West 33rd Street, 15th Floor, New York, New York 10001. At the option of
the Company, interest may be paid by mailing a check to the address of the
person entitled thereto as it appears on the register for the Notes or by wire
transfer to an account maintained by the person entitled thereto.
The Notes will be unsecured and subordinated in right of payment to the
prior payment in full of all present and future Senior Indebtedness of the
Company as described under the caption "Description of Debt
Securities -- Subordinated Securities" in the accompanying Prospectus. As of
March 31, 1994, the Company had approximately $10.0 million principal amount of
Senior Indebtedness outstanding.
The Notes are not subject to redemption prior to maturity. No sinking fund
is provided for the Notes. The Notes are subject to acceleration only in the
event of bankruptcy, insolvency or reorganization of the Company. There will be
no right of acceleration in the case of a default in the payment of interest or
in the performances of any other covenant, or a default in the Notes or in the
Indenture.
BOOK-ENTRY SYSTEM
The Notes initially will be represented by one or more global securities
(the "Global Securities") deposited with The Depository Trust Company ("DTC")
and registered in the name of a nominee of DTC. Except as set forth below, the
Notes will be available for purchase in denominations of $1,000 and integral
multiples thereof in book-entry form only. The term "Depositary" refers to DTC
or any successor depositary.
DTC has advised the Company and the Underwriters as follows: DTC is a
limited-purpose trust company organized under the laws of the State of New York,
a member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
was created to hold securities of persons who have accounts with DTC
("participants") and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating the need
for physical movement of securities certificates. DTC's participants include
securities brokers and dealers (including the Underwriters), banks, trust
companies, clearing corporations and certain other organizations, some of which
(and/or their representatives) own DTC. Access to DTC's book-entry system is
also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a participant,
either directly or indirectly.
Upon the issuance by the Company of Notes represented by the Global
Securities, the Depositary or its nominee will credit, on its book-entry
registration and transfer system, the respective principal amounts of the Notes
represented by such Global Securities to the accounts of participants. The
accounts to be credited shall be designated by the Underwriters. Ownership of
beneficial interests in Notes represented by the Global Securities will be
limited to participants or persons that hold interests through participants.
Ownership of such
S-6
<PAGE> 7
beneficial interest in Notes will be shown on, and the transfer of that
ownership will be effected only through, records maintained by the Depositary
(with respect to interests of participants in the Depositary), or by
participants in the Depositary or persons that may hold interests through such
participants (with respect to persons other than participants in the
Depositary). The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to transfer beneficial interests in
Notes represented by Global Securities.
So long as the Depositary for a Global Security, or its nominee, is the
registered owner of such Global Security, the Depositary or its nominee, as the
case may be, will be considered the sole owner or holder of the Notes
represented by such Global Security for all purposes under the Indenture. Except
as provided below, owners of beneficial interest in Notes represented by Global
Securities will not be entitled to have the Notes represented by such Global
Securities registered in their names, will not receive or be entitled to receive
physical delivery of Notes in definitive form and will not be considered the
owners or holders thereof under the Indenture. Unless and until the Global
Securities are exchanged in whole or in part for individual certificates
evidencing the Notes represented thereby, such Global Securities may not be
transferred except as a whole by the Depositary for such Global Securities to a
nominee of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by the Depositary or any nominee of
such Depositary to a successor Depositary or any nominee of such successor
Depositary.
Payments of principal of and interest on the Notes represented by Global
Securities registered in the name of the Depositary or its nominee will be made
by the Company through the Paying Agent to the Depositary or its nominee, as the
case may be, as the registered owner of the Notes represented by such Global
Securities.
The Company has been advised that the Depositary or its nominee, upon
receipt of any payment of principal or interest in respect of the Notes
represented by Global Securities, will credit immediately the accounts of the
related participants with payment in amounts proportionate to their respective
beneficial interest in the Notes represented by the Global Securities as shown
on the records of the Depositary. The Company expects that payments by
participants to owners of beneficial interest in the Notes represented by the
Global Securities will be governed by standing customer instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in the "street name." Such payments will
be the responsibility of such participants.
If the Depositary is at any time unwilling or unable to continue as
Depositary and a successor Depositary is not appointed by the Company within 90
days, the Company will issue individual Notes in definitive form in exchange for
the Global Securities. In addition, the Company may at any time and in its sole
discretion determine not to have Global Securities, and, in such event, will
issue individual Notes in definitive form in exchange for the Global Securities.
In either instance, the Company will issue Notes in definitive form, equal in
aggregate principal amount to the Global Securities, in such names and in such
principal amounts as the Depositary shall request. Notes so issued in definitive
form will be issued in denominations of $1,000 and integral multiples thereof
and will be issued in registered form only, without coupons.
Neither the Company, the Trustee, any Paying Agent nor the registrar for
the Notes will have any responsibility or liability for any aspect of the
records relating to or payments made on account of beneficial ownership
interests in the Notes represented by such Global Securities or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material federal income tax consequences
under the Internal Revenue Code of 1986, as amended (the "Code"), of holding and
disposing of interests in the Notes. The summary is based upon laws,
regulations, rulings and judicial decisions now in effect, all of which are
subject to change (possibly on a retroactive basis). This summary does not
discuss all aspects of federal income taxation that may be relevant to investors
in light of their personal investment circumstances or to certain types of
investors subject to special treatment under the federal income tax laws (for
example, dealers in securities, tax-exempt
S-7
<PAGE> 8
organizations, insurance companies, real estate investment trusts, regulated
investment companies, individual retirement accounts and other tax deferred
accounts, and foreign taxpayers), and does not discuss the consequences to an
investor under state, local or foreign tax laws. Prospective investors are
advised to consult their own tax advisors regarding the federal, state, local
and other tax considerations of holding and disposing of interests in the Notes.
STATED INTEREST
An investor will be required to report as income for federal income tax
purposes interest earned on an interest in the Note in accordance with the
investor's method of tax accounting. An investor using the accrual method of
accounting for tax purposes is required to include interest in ordinary income
as such interest accrues, while a cash basis investor must include interest in
income when payments are received (or made available for receipt) by such
investor.
SALE, EXCHANGE OR RETIREMENT OF NOTES
Upon the sale, exchange or retirement (including redemption) of an interest
in a Note, an investor generally will recognize gain or loss in an amount equal
to the difference between the amount of cash and the fair market value of any
property received on the sale, exchange or retirement of an interest in the Note
(other than in respect of accrued and unpaid interest on the interest in the
Note) and such investor's adjusted tax basis in the interest in the Note. If an
investor holds the interest in the Note as a capital asset, such gain or loss
will be capital gain or loss, except to the extent of any accrued market
discount (see "Market Discount" below), and will be long-term capital gain or
loss if the interest in the Note has been held for more than one year at the
time of sale, exchange or retirement.
MARKET DISCOUNT
"Market discount" is defined generally as the excess of the stated
redemption price at maturity of the interest in a Note over the tax basis of the
interest in a Note in the hands of the investor immediately after its
acquisition and a "market discount bond" is any bond, debenture, note,
certificate or other evidence of indebtedness that has market discount. In
general, an interest in the Note in the hands of an original investor is not a
market discount bond. In addition, under a de minimis exception, there is no
market discount if the excess of the stated redemption price at maturity of the
interest in the Note over the investor's tax basis therein is less than 0.25% of
the stated redemption price at maturity of the interest in the Note multiplied
by the number of complete years after the acquisition date to the maturity date
of the interest in the Note. Market discount generally will accrue ratably
during the period from the date of acquisition to the maturity date of the
interest in the Note, unless the investor elects to accrue such discount on the
basis of the constant interest method.
An investor in whose hands an interest in the Note is a market discount
bond generally will be required to treat as ordinary income any gain recognized
on the sale, exchange, redemption or other disposition of the interest in the
Note to the extent of accrued market discount. An investor in an interest in the
Note acquired at market discount also may be required to defer the deduction of
all or a portion of the interest on any indebtedness incurred or maintained to
purchase or carry the interest in the Note until it is disposed of in a taxable
transaction.
An investor in an interest in the Note acquired at a market discount may
elect to include a market discount in income as it accrues, in which case the
foregoing rules would not apply. This election would apply to all market
discount bonds acquired by the electing investor on or after the first day of
the first taxable year to which the election applies. The election may be
revoked only with the consent of the Internal Revenue Service.
BACKUP WITHHOLDING
An investor may be subject to backup withholding at the rate of 31% with
respect to interest paid on the interest in the Notes, unless such an investor
(a) is a corporation or comes within certain other exempt
S-8
<PAGE> 9
categories and, when required, demonstrates this fact or (b) provides a correct
taxpayer identification number, certifies as to no loss of exemption from backup
withholding and otherwise complies with applicable requirements of the backup
withholding rules. An investor who does not provide the participant in the
Depositary in whose name the principal amount of the Note in which the investor
has an interest is held with his correct taxpayer identification number may be
subject to penalties imposed by the Internal Revenue Service. Any amount paid as
backup withholding will be creditable against the investor's income tax
liability.
UNDERWRITING
The Underwriters named below have severally agreed to purchase from the
Company the following respective principal amounts of the Notes:
<TABLE>
<CAPTION>
PRINCIPAL AMOUNT
UNDERWRITER OF NOTES
----------------------- ----------------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................................. $ 45,000,000
CS First Boston Corporation............................................... 45,000,000
Dean Witter Reynolds Inc.................................................. 10,000,000
----------------
Total........................................................ $100,000,000
----------------
----------------
</TABLE>
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent and that the
Underwriters will be obligated to purchase all of the Notes if any are
purchased.
The Company has been advised by the Underwriters that they propose to offer
the Notes to the public initially at the public offering price set forth on the
cover page of this Prospectus Supplement and to certain dealers at such price
less a concession of .40% of the principal amount per Note; that the
Underwriters and such dealers may allow a discount of .25% of such principal
amount on sales to certain other dealers; and that after the initial public
offering the public offering price and concession and discount to dealers may be
changed by the Underwriters.
The Notes are a new issue of securities with no established trading market.
The Underwriters have advised the Company that they intend to act as market
makers for the Notes. However, the Underwriters are not obligated to do so and
may discontinue any market making at any time without notice. No assurance can
be given as to the liquidity of the trading market for the Notes.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act of 1933, or
contribute to payments which the Underwriters may be required to make in respect
thereof.
S-9
<PAGE> 10
[This page intentionally left blank]
<PAGE> 11
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NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS SUPPLEMENT OR THE PROSPECTUS IN
CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. NEITHER THE
DELIVERY OF THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS NOR ANY SALE MADE
HEREUNDER AND THEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE AN IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTITUTE AN OFFER OR
SOLICITATION BY ANYONE IN ANY STATE IN WHICH SUCH OFFER OR SOLICITATION IS NOT
AUTHORIZED OR IN WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT
QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
PROSPECTUS SUPPLEMENT
SouthTrust Corporation............... S-2
Use of Proceeds...................... S-3
Recent Developments.................. S-4
Selected Financial Data.............. S-4
Description of the Notes............. S-6
Certain Federal Income Tax
Consequences....................... S-7
Underwriting......................... S-9
PROSPECTUS
Available Information................ 2
Incorporation of Certain Documents by
Reference.......................... 2
SouthTrust Corporation............... 3
Use of Proceeds...................... 4
Regulatory Matters................... 4
Description of Debt Securities....... 6
Limitations on Issuance of Bearer
Securities......................... 16
Plan of Distribution................. 17
Legal Opinions....................... 18
Experts.............................. 18
</TABLE>
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- ------------------------------------------------------
- ------------------------------------------------------
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$100,000,000
SOUTHTRUST CORPORATION (LOGO)
7 5/8% SUBORDINATED NOTES
DUE 2004
---------------------
PROSPECTUS SUPPLEMENT
---------------------
MERRILL LYNCH & CO.
CS FIRST BOSTON
DEAN WITTER REYNOLDS INC.
APRIL 26, 1994
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- ------------------------------------------------------
