<PAGE> 1
FILED PURSUANT TO RULE 424(b)(2)
REGISTRATION NO. 33-61823
PROSPECTUS SUPPLEMENT
- ----------------------------------
(TO PROSPECTUS DATED SEPTEMBER 12, 1995)
3,500,000 SHARES
(SOUTHTRUST CORPORATION LOGO)
COMMON STOCK
(PAR VALUE $2.50 PER SHARE)
---------------------
The Common Stock of SouthTrust Corporation (the "Corporation") is quoted on
the Nasdaq National Market ("Nasdaq") under the symbol SOTR. On September 26,
1995, the last reported sale price of the Common Stock of the Corporation on
Nasdaq was $25 1/8 per share.
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. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
PRICE TO UNDERWRITING PROCEEDS TO THE
PUBLIC DISCOUNT(1) CORPORATION(2)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share................................ $25.00 $.875 $24.125
- -----------------------------------------------------------------------------------------------
Total(3)................................. $87,500,000 $3,062,500 $84,437,500
- -----------------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------------
</TABLE>
(1) The Corporation has agreed to indemnify the Underwriters against certain
civil liabilities, including liabilities under the Securities Act of 1933.
See "Underwriting."
(2) Before deducting expenses payable by the Corporation estimated at $250,000.
(3) The Corporation has granted the Underwriters an option to purchase up to an
additional 525,000 shares of Common Stock to cover over-allotments. If all
of such shares are purchased, the total Price to Public, Underwriting
Discount and Proceeds to the Corporation will be $100,625,000, $3,521,875
and $97,103,125, respectively. See "Underwriting."
---------------------
The shares of Common Stock are offered by the several Underwriters, subject
to prior sale, when, as and if issued to and accepted by them, and subject to
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 shares of Common Stock will be made in New York, New York
on or about October 2, 1995.
---------------------
MERRILL LYNCH & CO.
CS FIRST BOSTON
DEAN WITTER REYNOLDS INC.
J.C. BRADFORD & CO.
INTERSTATE/JOHNSON LANE
CORPORATION
---------------------
The date of this Prospectus Supplement is September 26, 1995.
<PAGE> 2
The following map sets forth the banking offices of the Corporation's bank
subsidiaries as of June 30, 1995:
Map of Alabama, Florida, Georgia, Mississippi, North Carolina, South Carolina
and Tennessee listing total banking offices in such states.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AT
A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH
STABILIZING, IF COMMENCED, MAY BE DISCONTINUED AT ANY TIME.
S-2
<PAGE> 3
SOUTHTRUST CORPORATION
SouthTrust Corporation (the "Corporation"), a multi-bank holding company
headquartered in Birmingham, Alabama, engages in a full range of banking
services from 438 banking locations in Alabama, Florida, Georgia, Mississippi,
North Carolina, South Carolina and Tennessee. The Corporation also offers a
range of other services, including mortgage banking services, data processing
services and securities brokerage services. As of June 30, 1995, the Corporation
had consolidated total assets of $19.1 billion, which ranked it as the largest
bank holding company headquartered in Alabama. The largest bank subsidiary of
the Corporation is SouthTrust Bank of Alabama, N.A., the oldest predecessor of
which was incorporated in 1887, and which had approximately $10.7 billion in
total assets as of June 30, 1995.
The Corporation has pursued a strategy of acquiring banks and financial
institutions throughout the major growth areas of Florida, Georgia, Mississippi,
North Carolina, South Carolina and Tennessee. The purpose of this expansion is
to give the Corporation business development opportunities in metropolitan
markets with favorable prospects for population and per capita income growth. As
a result of this strategy, the total assets of the Corporation outside of
Alabama have grown to approximately $8.4 billion or 44% of total assets as of
June 30, 1995.
The following table reflects certain information respecting the
geographical distribution of the Corporation's business as of June 30, 1995:
<TABLE>
<CAPTION>
NORTH SOUTH
ALABAMA FLORIDA GEORGIA CAROLINA CAROLINA TENNESSEE MISSISSIPPI
--------- -------- -------- -------- -------- --------- -----------
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
Assets...................... $10,713.4 $3,369.0 $3,876.4 $768.9 $ 339.0 $ 199.0 $ 121.5
Loans....................... 7,333.0 2,478.6 2,548.8 589.9 242.3 137.3 66.8
Deposits.................... 7,219.0 2,916.5 2,771.7 581.0 272.5 156.9 102.4
</TABLE>
Through the first two quarters of 1995, the Corporation effected
acquisitions of four financial institutions, with total assets aggregating
approximately $494.3 million, and as of the date of this Prospectus Supplement,
the Corporation has executed letters of intent or definitive agreements relating
to the acquisition of three financial institutions in Florida, with total assets
aggregating approximately $176.3 million. In the normal course of its business,
the Corporation seeks out and receives inquiries from financial institutions
regarding the possible acquisition of such institutions. The Corporation
routinely evaluates these opportunities. Thus, at any point in time, the number
of acquisition opportunities that may be available to the Corporation, as well
as the stage of development of such activity, is subject to change.
USE OF PROCEEDS
The Corporation intends to use the net proceeds from the sale of the shares
of Common Stock offered hereby (the "Offering") primarily for general corporate
and working capital purposes, including funding investments in, or extensions of
credit to, its banking and nonbanking subsidiaries, and depending on market
conditions, the type of acquisition opportunities presented to the Corporation
and other factors, some portion of such net proceeds may be used to fund the
acquisition of other financial institutions. Pending such use, the Corporation
may temporarily invest the net proceeds in investment grade securities. The
precise amounts and the timing of the application of proceeds will depend upon
the funding requirements of the Corporation and its subsidiaries as well as the
availability of other funds.
S-3
<PAGE> 4
CAPITALIZATION
The following table sets forth the actual consolidated capitalization of
the Corporation and its subsidiaries as of June 30, 1995 and as adjusted at that
date to give effect to the issuance by the Corporation of the 3,500,000 shares
of Common Stock offered hereby and the related expenses:
<TABLE>
<CAPTION>
JUNE 30, 1995
--------------------------
ACTUAL AS ADJUSTED
---------- -----------
(IN THOUSANDS)
<S> <C> <C>
LONG-TERM DEBT
Subordinated:
8 5/8% Subordinated Notes due May 15, 2004................ $ 100,000 $ 100,000
7% Debentures, due May 15, 2003........................... 100,000 100,000
7 5/8% Subordinated Notes due May 1, 2004................. 100,000 100,000
9.95% Subordinated Capital Notes due June 1, 1999......... 75,000 75,000
7.74% Subordinated Notes due May 15, 2025................. 50,000 50,000
7.69% Subordinated Notes due May 15, 2025................. 100,000 100,000
---------- -----------
Total subordinated........................................ 525,000 525,000
Other:
Federal Home Loan Bank Advances........................... 352,887 352,887
Other..................................................... 11,971 11,971
---------- -----------
Total other............................................... 364,858 364,858
---------- -----------
Total long-term debt.............................. 889,858 889,858
---------- -----------
STOCKHOLDERS' EQUITY:
Common Stock, par value $2.50 per share; 200,000,000
shares authorized; 83,950,192 shares issued and
87,450,192 issued as adjusted.......................... 209,875 218,625
Capital surplus........................................... 253,137 328,825
Retained earnings......................................... 815,246 815,246
Unrealized loss on securities available for sale.......... (14,722) (14,722)
Treasury stock at cost (485,934 shares)................... (6,009) (6,009)
---------- -----------
Total stockholders' equity........................ 1,257,527 1,341,965
---------- -----------
Total long-term debt and stockholders' equity..... $2,147,385 $ 2,231,823
========= =========
</TABLE>
S-4
<PAGE> 5
MARKET PRICE AND DIVIDENDS
The Common Stock of the Corporation is quoted on Nasdaq under the symbol
SOTR. As of June 30, 1995, the Corporation had approximately 12,800 holders of
record of its Common Stock. The following table sets forth the high and the low
last sale price per share of Common Stock as reported by Nasdaq and the per
share dividends declared by the Corporation for the quarters indicated. On
September 26, 1995, the last reported sale price of the Common Stock as reported
by Nasdaq was $25 1/8.
<TABLE>
<CAPTION>
PRICE* PER SHARE
--------------- DIVIDENDS
HIGH LOW DECLARED
---- ---- ---------
<S> <C> <C> <C>
1993:
First Quarter............................................... $21 3/8 $16 5/8 $0.15
Second Quarter.............................................. 22 1/8 17 3/4 0.15
Third Quarter............................................... 21 1/4 18 3/8 0.15
Fourth Quarter.............................................. 19 7/8 17 1/4 0.15
1994:
First Quarter............................................... 19 5/8 17 7/8 0.17
Second Quarter.............................................. 22 1/8 18 1/8 0.17
Third Quarter............................................... 21 7/8 19 3/8 0.17
Fourth Quarter.............................................. 20 1/4 17 0.17
1995:
First Quarter............................................... 21 3/8 18 0.20
Second Quarter.............................................. 23 3/8 20 5/8 0.20
Third Quarter (through September 26, 1995).................. 27 1/4 23 0.20
</TABLE>
- ---------------
* The information listed above was obtained from the National Association of
Securities Dealers, Inc., and reflects interdealer prices, without retail
markup, markdown or commissions, and may not represent actual transactions.
Dividends paid by the Corporation on its Common Stock are at the discretion
of the Board of Directors and are affected by certain legal restrictions on the
payment of dividends as described below, the Corporation's earnings and
financial condition and other relevant factors. The Corporation has increased
the dividend paid on its Common Stock for 25 consecutive years. The current
policy of the Corporation is to pay dividends on a quarterly basis. Subject to
an evaluation of its earnings and financial condition and other factors,
including the legal restrictions on the payment of dividends as described below,
the Corporation anticipates that it will continue to pay regular quarterly
dividends with respect to the Common Stock.
There are certain limitations on the payment of dividends to the
Corporation by its subsidiary banks. The amount of dividends that each
subsidiary national bank of the Corporation may declare in one year, without
approval of the Office of the Comptroller of the Currency (the "Comptroller"),
is the sum of the bank's net profits for that year and its retained net profits
for the preceding two years. Under rules promulgated by the Comptroller, the
calculation of net profits is more restrictive under certain circumstances. The
banking authorities in the states where the Corporation owns state-chartered
banks also regulate the payment of dividends by banks organized in such states.
Generally speaking, the Corporation's subsidiary state banks may not declare or
pay a dividend, without the prior written approval of the applicable banking
authority, if the total of all dividends declared by such bank in any calendar
year would exceed the total of its net profits, as defined, for that year
combined with its retained net profits, as defined, for the preceding two years.
Under the foregoing laws and regulations, at June 30, 1995, approximately $254.1
million was available for payment of dividends to the Corporation by its bank
subsidiaries.
S-5
<PAGE> 6
SELECTED FINANCIAL DATA
The following selected financial data are derived from the consolidated
financial statements of the Corporation. This information should be read in
conjunction with, and is qualified by reference to, the more detailed
information contained in the Consolidated Financial Statements of the
Corporation and Notes thereto included in the Corporation's Annual Report on
Form 10-K for the year ended December 31, 1994 and the Corporation's Quarterly
Report on Form 10-Q for the quarter ended June 30, 1995 which are incorporated
herein by reference. The results of operations for the six months ended June 30,
1995 and 1994 are not audited but, in the opinion of management, include all
adjustments necessary for a fair presentation of the results of operations for
such periods. The results for the six months ended June 30, 1995, including net
interest margin and rate of return ratios which are stated on an annualized
basis, are not necessarily indicative of the results that may be expected for
the full year or any other interim period.
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30, YEARS ENDED DECEMBER 31,
------------------- ----------------------------------------------------
1995 1994 1994 1993 1992 1991 1990
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
SUMMARIZED INCOME STATEMENT (IN
THOUSANDS):
Net interest income.............. $329,889 $287,252 $607,545 $529,808 $445,150 $349,272 $278,332
Provision for loan losses........ 26,097 21,892 44,984 45,032 43,305 38,042 44,635
Non-interest income.............. 98,905 91,509 184,778 174,702 136,683 108,881 91,084
Non-interest expense............. 258,701 231,917 485,999 434,951 373,636 296,796 234,713
Income tax expense............... 49,127 41,823 88,338 73,992 50,646 33,309 20,360
Net income....................... 94,869 83,129 173,002 150,535 114,246 90,006 69,708
PER SHARE DATA:
Net income....................... $ 1.15 $ 1.04 $ 2.15 $ 1.94 $ 1.66 $ 1.42 $ 1.14
Cash dividends declared.......... 0.40 0.34 0.68 0.60 0.52 0.48 0.46
Stockholders' equity at period
end............................ 15.07 13.68 13.94 13.25 11.55 10.05 8.99
END OF PERIOD TOTALS (IN MILLIONS):
Loans, net of unearned income.... $ 13,398 $ 10,524 $ 12,122 $ 9,448 $ 7,547 $ 5,965 $ 5,531
Total securities................. 4,063 4,007 3,953 3,733 3,756 3,104 2,449
Total assets..................... 19,079 15,932 17,632 14,708 12,714 10,158 9,006
Deposits......................... 13,814 11,827 12,801 11,515 10,082 8,277 7,228
Long-term debt................... 890 443 641 470 258 140 149
Stockholders' equity............. 1,258 1,094 1,135 1,052 860 662 550
Common shares outstanding (in
thousands)..................... 83,464 79,937 81,426 79,401 74,477 65,837 61,167
SELECTED FINANCIAL RATIOS(1):
Return on average total assets... 1.05% 1.11% 1.09% 1.10% 1.04% 0.96% 0.85%
Return on average stockholders'
equity......................... 16.19 15.71 15.86 15.84 15.66 15.21 13.29
Net interest margin -- taxable
equivalent..................... 4.03 4.28 4.23 4.35 4.61 4.32 4.03
Efficiency ratio................. 59.32 59.96 60.15 60.28 62.19 61.83 59.68
Non-interest expense as % of
average total assets........... 2.87 3.10 3.05 3.19 3.39 3.15 2.85
Nonperforming assets as % of net
loans and other real estate
owned.......................... 0.80 0.95 0.84 1.19 1.69 2.36 1.99
Nonperforming loans as % of net
loans.......................... 0.45 0.59 0.44 0.71 0.96 1.25 0.92
Allowance for loan losses as % of
net loans...................... 1.39 1.42 1.42 1.43 1.38 1.35 1.28
Allowance for loan losses as % of
nonperforming loans............ 309.67 240.24 324.55 200.70 143.35 108.23 139.54
Net charge-offs as % of average
net loans...................... 0.23 0.17 0.19 0.29 0.49 0.55 0.74
Stockholders' equity to assets... 6.59 6.87 6.44 7.15 6.77 6.52 6.10
REGULATORY CAPITAL RATIOS:
Tier I risk-based capital(2)..... 7.51% 8.27% 7.68% 8.55% 8.67% 7.92% 7.72%
Total risk-based capital(2)...... 11.29 12.67 11.71 12.39 12.18 10.62 10.53
Leverage ratio(2)................ 6.06 6.41 6.10 6.51 6.48 5.91 6.27
</TABLE>
- ---------------
(1) Interim period ratios are annualized where appropriate.
(2) Calculated under the risk-based and leverage capital guidelines of the
Federal Reserve Board applicable to bank holding companies. Under these
guidelines, regulatory required minimums are 4% and 8% for Tier I and Total
Capital ratios, respectively. The leverage ratio must be maintained at a
level generally considered to be in excess of 4% to 5%.
S-6
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following should be read in conjunction with the financial statements
and the detailed financial information, including the related management's
discussion and analysis, contained in the Corporation's Annual Report on Form
10-K for the year ended December 31, 1994 and Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1995 and June 30, 1995, which are incorporated in
this Prospectus Supplement by reference.
EARNINGS SUMMARY
For the six months ended June 30, 1995, net income was $94.9 million or
$1.15 per share, compared to $83.1 million or $1.04 per share in 1994. Net
income for the first six months of 1995 resulted in returns on average total
assets and average stockholders' equity of 1.05% and 16.19%, respectively.
Net Interest Income. Net interest income is the difference between
interest income and interest expense and is the major component of net income of
the Corporation. For purposes of this discussion, income that either is exempt
from federal income taxes or taxed at a preferential rate has been adjusted to
fully taxable equivalent amounts using a statutory federal tax rate of 35% in
1995 and 1994.
Interest yields, net interest margins and net interest spreads are
calculated using the underlying earning assets cost basis.
Net interest income for the six months ended June 30, 1995 was $337.4
million, an increase of $42.1 million or 14% from the 1994 level of $295.3
million. During the six-month period, total interest income increased $201.5
million or 40% to $709.5 million. These increases reflect an increase in loans,
net of unearned income, of approximately $2.9 billion at June 30, 1995, as
compared to June 30, 1994, as well as an increase in market interest rates.
Total interest expense increased $159.5 million or 75% for the six-month
period to $372.1 million. This increase reflects an increase in the level of
average interest-bearing liabilities of 23% to $14,767.6 million for the first
six months of 1995. The average rate paid on interest-bearing liabilities
increased 151 basis points to 5.08% for the six months ended June 30, 1995.
The taxable equivalent net interest margin for the six-month period
decreased to 4.03% in 1995 from 4.28% in 1994. The taxable equivalent net
interest spreads for the first six months of 1995 and 1994 were 3.39% and 3.79%,
respectively. The net interest spread is affected by competitive pressures,
Federal Reserve Bank monetary policies and the composition of interest-earning
assets and interest-bearing liabilities, including the interest component of the
Corporation's funding activity.
Provision For Loan Losses. The provision for loan losses for the six
months ended June 30, 1995 was $26.1 million, an increase of $4.2 million from
the 1994 level of $21.9 million. For the first six months of 1995, net
charge-offs totaled $14.2 million or 0.23% of average net loans on an annualized
basis. During the same period of 1994, net charge-offs were $8.2 million or
0.17% of net loans on an annualized basis. For the year ended December 31, 1994,
net charge-offs were $19.8 million or 0.19% of net loans.
Non-Interest Income. For the six months ended June 30, 1995, total
non-interest income increased $7.4 million or 8% to $98.9 million. During the
period, service charges on deposit accounts increased $3.8 million or 9% to
$45.6 million. Mortgage origination and service fees were $14.1 million, a
decrease of $1.2 million or 8% from the first six months of 1994. Trust fees
increased 8% to $9.3 million, other fee income increased $4.1 million or 19% to
$25.3 million, and other non-interest income decreased 2% to $4.5 million.
There were no significant non-recurring non-interest income items during
the six-month periods discussed.
Non-Interest Expense. Total non-interest expense for the six months ended
June 30, 1995 was $258.7 million, an increase of $26.8 million or 12% over the
first six months of 1994. The ratio of non-interest expense to average total
assets for the first six months of 1995 was 2.87% compared to 3.10% in 1994.
S-7
<PAGE> 8
Salaries and employee benefits accounted for the largest portion of total
non-interest expense as well as the largest portion of the increase. Salaries
and employee benefits expense increased $12.0 million or 9% to $138.4 million
for the six months ended June 30, 1995. The number of full time equivalent
employees increased approximately 7% from June 30, 1994 to approximately 7,700
at June 30, 1995. Net occupancy expense increased $1.7 million or 9% for the
six-month period primarily as a result of the growth in the number of banking
offices to 438 in 1995 from 400 at June 30, 1994. Equipment expense increased
$1.8 million or 14% to $14.9 million for the six-month period. Federal Deposit
Insurance Corporation insurance expense increased $1.5 million or 12% to $13.8
million for the six-month period as a result of increased deposits. All other
non-interest expense items totaled $70.5 million for the six months ended June
30, 1995, reflecting an increase of 16% over the comparable period of 1994.
There were no significant non-recurring non-interest expense items recorded in
1995 or 1994.
Income tax expense for the six-month period was $49.1 million or an
effective rate of 34.1% in 1995 compared to $41.8 million or an effective rate
of 33.5% in the comparable period of 1994. The increase in the effective tax
rate was due primarily to a decline in the proportional amount of revenue on
non-taxable investment securities and the federal income tax provisions
disallowing 100% of interest expense deemed attributable to debt used to carry
non-taxable investment securities. The statutory federal income tax rate was 35%
in 1995 and 1994.
SUMMARY OF FINANCIAL CONDITION
Total assets at June 30, 1995 were $19.1 billion, representing an increase
of $3.1 billion or 20% from June 30, 1994. At December 31, 1994, total assets
were $17.6 billion. Average total assets for the first six months of 1995 were
$18.2 billion compared to $15.1 billion for the first six months of 1994.
Average earning assets for the first six months of 1995 were $16.8 billion,
representing an increase of 21% over the 1994 level of $13.9 billion. Average
interest-bearing liabilities through June 30, 1995 were $14.8 billion, up 23%
over the 1994 first six-month level of $12.0 billion.
LOANS
Loans, net of unearned income at June 30, 1995 totaled $13,398.3 million
compared to $12,121.9 million at December 31, 1994.
As of December 31, 1994, the Corporation, in recognition of the fact that
certain loans previously classified as real estate mortgage loans were loans
secured by owner-occupied businesses, reclassified these loans as commercial,
financial and agricultural loans and restated the loan portfolio to reflect this
change. Management believes that such reclassification of loans more accurately
reflects the credit risk associated with such loans.
S-8
<PAGE> 9
The following table presents loans by type and percent of total at the end
of the periods presented.
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------------
JUNE 30, 1995 1994 1993
------------------ ------------------ -----------------
AMOUNT % AMOUNT % AMOUNT %
--------- ----- --------- ----- -------- -----
(IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Commercial, financial and agricultural.......... $ 5,508.0 40.8% $ 5,058.4 41.4% $4,094.4 43.0%
Real estate construction........................ 973.3 7.2 675.2 5.5 448.6 4.7
Commercial real estate
mortgage...................................... 1,961.6 14.6 1,776.1 14.6 1,314.2 13.8
Residential real estate mortgage................ 3,108.1 23.0 2,960.0 24.2 2,322.1 24.4
--------- ----- --------- ----- -------- -----
Total real estate loans....................... 6,043.0 44.8 5,411.3 44.3 4,084.9 42.9
Loans to individuals............................ 1,945.9 14.4 1,745.9 14.3 1,347.7 14.1
--------- ----- --------- ----- -------- -----
13,496.9 100.0% 12,215.6 100.0% 9,527.0 100.0%
Unearned income............................... (98.6) (93.7) (78.7)
--------- --------- --------
Loans, net of unearned income................... 13,398.3 12,121.9 9,448.3
Allowance for loan losses..................... (186.1) (171.7) (135.2)
--------- --------- --------
Net Loans....................................... $13,212.2 $11,950.2 $9,313.1
========= ========= ========
</TABLE>
Commercial real estate mortgage loans increased $451.8 million from
December 31, 1994 to $1,961.6 million, or 14.6% of total loans. Residential real
estate mortgage loans at June 30, 1995 were $3,108.1 million or 23.0% of total
loans compared to $2,960.0 million or 24.2% at December 31, 1994. Real estate
construction loans were $973.3 million or 7.2% of total loans, up from $675.2
million at December 31, 1994 when such loans accounted for 5.5% of total loans.
Commercial, financial and agricultural loans at June 30, 1995 were $5,508.0
million or 40.8% of total loans, compared to $5,058.4 million or 41.4% of total
loans at December 31, 1994. This segment is widely diversified and there were no
significant industry concentrations.
Loans to individuals at June 30, 1995 totaled $1,945.9 million or 14.4% of
total loans, compared to $1,745.9 million or 14.3% of total loans at December
31, 1994.
Total unearned income at June 30, 1995 was $98.6 million compared to $93.7
million at December 31, 1994.
Non-Performing Assets. Non-performing assets at June 30, 1995 were $108.2
million or 0.80% of net loans and other real estate owned, representing an
increase of $5.5 million from the December 31, 1994 level of $102.7 million.
Included in non-performing assets at June 30, 1995 were $57.5 million of loans
on non-accrual status, other real estate owned totaling $48.1 million, and $2.6
million of restructured loans. Loans 90 days past due and accruing were $25.4
million at June 30, 1995 compared to $16.6 million at December 31, 1994.
Allowance for Loan Losses. The allowance for loan losses at June 30, 1995
was $186.1 million or 1.39% of net loans compared to $171.7 million or 1.42% at
December 31, 1994. While deterioration of the economy or rising interest rates
could have a near-term effect on the Corporation's earnings, management has
taken into consideration present and expected economic conditions, the level of
risk in the portfolio, the level of non-performing assets, potential problem
loans, and delinquencies in assessing the allowance for loan losses and
considers the allowance for loan losses to be adequate.
INVESTMENT SECURITIES AND SECURITIES AVAILABLE FOR SALE
At June 30, 1995, total securities were $4,063.0 million. Investment
securities amounted to $1,997.8 million and securities classified as available
for sale amounted to $2,065.2 million.
Investment securities increased 19% from the year-end 1994 level to
$1,997.8 million, and included U.S. Treasury securities of $16.4 million, U.S.
Government agency securities of $1,346.1 million, collateralized
S-9
<PAGE> 10
mortgage obligations (CMOs) of $127.5 million, other mortgage backed securities
of $128.3 million, state, county and municipal securities of $285.1 million and
other securities of $94.4 million.
Securities available for sale included U.S. Treasury securities of $422.8
million, U.S. Government agency securities of $293.4 million, CMOs of $1,013.5
million, other mortgage backed securities of $240.6 million, state, county and
municipal securities of $1.7 million and other securities of $93.2 million.
At June 30, 1995, the Corporation's investment portfolio included $1,141.0
million in CMOs, $854.3 million in agency securities with forward coupon rate
increases, commonly known as "step-ups," ($775.4 million of which mature through
1999) and $133.0 million in structured notes ($130.0 million of which mature
through 1997). These securities present various degrees of risk. For example,
the mortgages collateralizing the CMOs can prepay, thereby affecting the yield
of the securities and their carrying amounts, and the step-ups may be called by
the issuer in declining rate environments, resulting in the Corporation
reinvesting the proceeds at lower yields. As for the structured notes, these
securities present the risk of narrowing spreads between floating indices,
resulting in a lower yield on the bonds, as well as the risk, in the case of
inverse floaters, of decreasing yields in rising rate environments.
The carrying amount and approximate fair value of the Corporation's
investment securities and securities available for sale at June 30, 1995 and
December 31, 1994 and 1993 are as follows:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
-------------------------------------------------
JUNE 30, 1995 1994 1993
----------------------- ----------------------- -----------------------
AMORTIZED FAIR AMORTIZED FAIR AMORTIZED FAIR
COST VALUE COST VALUE COST VALUE
---------- ---------- ---------- ---------- ---------- ----------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Investment securities..... $1,997,781 $2,017,381 $1,671,673 $1,618,411 $1,278,007 $1,327,228
Securities available for
sale.................... 2,088,997 2,065,173 2,355,170 2,280,849 2,438,399 2,454,760
---------- ---------- ---------- ---------- ---------- ----------
Totals.................. $4,086,778 $4,082,554 $4,026,843 $3,899,260 $3,716,406 $3,781,988
========= ========= ========= ========= ========= =========
</TABLE>
Short-Term Investments. Short-term investments at June 30, 1995 totaled
$249.8 million, reflecting an increase of $48.8 million from the December 31,
1994 level of $201.0 million. At June 30, 1995, short-term investments consisted
of $27.7 million in federal funds sold, $3.3 million in securities purchased
under resale agreements, $18.9 million in time deposits with other banks and
$199.9 million in assets held for sale. Assets held for sale consisted of $187.5
million in mortgage loans in the process of being securitized and sold to third
party investors and $12.4 million in securities held for trading purposes.
Mortgage loans held for sale are carried at the lower of cost or fair value.
Trading account securities are carried at fair value with unrealized gains and
losses recognized in net income.
The Corporation's Asset/Liability Management Committee monitors current and
future expected economic conditions, as well as the Corporation's liquidity
position in determining desired balances of short-term investments and
alternative uses of such funds.
Other Assets. Other assets at June 30, 1995 were $960.2 million compared
to $877.8 million at December 31, 1994. At June 30, 1995, other assets included
$407.3 million in premises and equipment, due from customers on acceptances of
$29.5 million, other real estate owned of $48.1 million, mortgage servicing
rights of $28.4 million, other intangible assets of $159.7 million and other
non-earning assets of $287.2 million.
Cash and due from banks was $594.4 million at June 30, 1995, a decrease of
$56.0 million from $650.4 million at December 31, 1994.
FUNDING
The Corporation's funding sources can be divided into three broad
categories: deposits, short-term borrowings and long-term debt.
Deposits. Deposits are the Corporation's primary source of funding. Total
deposits at June 30, 1995 were $13,813.7 million up 17% from the June 30, 1994
level of $11,827.2 million. Total deposits at
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<PAGE> 11
December 31, 1994 were $12,801.2 million. At June 30, 1995, total deposits
included interest-bearing deposits of $11,533.9 million and other deposits of
$2,279.8 million.
Core deposits, defined as demand deposits and time deposits less than
$100,000, totaled $12,036.7 million or 87.1% of total deposits at June 30, 1995.
This compares to core deposits of $10,378.0 million or 87.7% of total deposits
at June 30, 1994 and $11,104.9 million or 86.7% at December 31, 1994.
Short-Term Borrowings. Short-term borrowings at June 30, 1995 were
$2,859.1 million and included federal funds purchased of $1,253.7 million,
securities sold under agreements to repurchase of $1,007.3 million and other
borrowed funds of $598.1 million. At June 30, 1995, total short-term borrowings
were 15.0% of total liabilities and stockholders' equity. This compares to total
short-term borrowings of $2,828.0 million or 16.0% of total liabilities and
stockholders' equity at December 31, 1994.
Long-Term Debt. At June 30, 1995, total long-term debt was $889.9 million
representing an increase of $249.2 million from the December 31, 1994 level of
$640.7 million. During the first six months of 1995 the Corporation issued
$256.0 million of additional long-term debt including $150.0 million in
subordinated debt which matures in 2025, and $106.0 million of Federal Home Loan
Bank advances which mature through 1998. During the six-month period, repayments
of long-term debt totaled $6.8 million.
CAPITAL
At June 30, 1995, total stockholders' equity was $1,257.5 million or 6.6%
of total assets compared to $1,135.3 million or 6.4% at December 31, 1994.
During the first six months net income added $94.9 million to capital. Sales of
common stock through the Dividend Reinvestment Plan, the employee stock purchase
and stock option plans for $3.5 million represented the issuance of 234,604
shares. Equity added in business combinations increased equity by $25.1 million.
The conversion of debentures added $0.1 million to equity. Treasury stock
purchases for 7,038 shares reduced equity by $0.1 million. Dividends declared
during the period were $.40 per share and aggregated $32.9 million, and the net
unrealized loss on securities available for sale decreased $31.6 million from
$46.3 million at December 31, 1994 to $14.7 million at June 30, 1995.
The Corporation is subject to the capital adequacy guidelines adopted by
the Federal Reserve Board, which is the regulatory agency that governs bank
holding companies. The Corporation's capital ratios and those of subsidiary
banks are in excess of these regulatory requirements and management expects that
these ratios will continue to be maintained above the minimum levels required by
the regulators.
At June 30, 1995, the Corporation had a total risk-based capital ratio of
11.29%, consisting of a Tier I capital ratio of 7.51% and supplemental capital
elements of 3.78%. The leverage ratio was 6.06%.
COMMITMENTS
The Corporation's subsidiary banks had standby letters of credit
outstanding of approximately $549.5 million at June 30, 1995 and $527.7 million
at December 31, 1994. The Corporation's subsidiary banks had outstanding
commitments to extend credit of approximately $4,310.3 million at June 30, 1995
and $3,873.0 million at December 31, 1994. The Corporation's policies as to
collateral and assumption of credit risk for off-balance sheet commitment is
essentially the same as those for extension of credit to its customers.
Presently the Corporation has no commitments for significant capital
expenditures.
The Corporation's subsidiaries regularly originate and sell loans,
consisting primarily of mortgage loans sold to third party investors, which
contain various recourse provisions to the seller. Losses historically realized
through the repurchase or other satisfaction of these recourse provisions are
insignificant. The total amount of loans outstanding subject to recourse was
$1,245.2 million at June 30, 1995 and $1,275.0 million at December 31, 1994.
Under terms of the recourse agreements, the Corporation would be required to
repurchase certain loans if they become non-performing. All such loans sold had
a loan-to-collateral ratio of 80% or less, or mortgage insurance to cover losses
up to 80% of the collateral value, at the times the various loans were
originated. The underlying collateral to these mortgages are generally 1-4
family residential properties. Potential losses under these recourse agreements
are affected by the collateral value of the
S-11
<PAGE> 12
particular loans involved. Losses are recognized when the mortgage is
repurchased or the obligation is otherwise satisfied.
INTEREST RATE RISK MANAGEMENT
The Corporation's asset/liability strategies are designed to optimize net
interest income while minimizing fluctuations caused by changes in the interest
rate environment. To achieve this, the Corporation uses various modeling
techniques to simulate interest rate stress on interest-earning assets and
interest-bearing liabilities that will reprice during the next year. Important
elements of these modeling techniques include the mix of floating versus fixed
rate assets and liabilities, and the scheduled, as well as expected, repricing
and maturing volumes and rates of the existing balance sheet.
In conjunction with the Corporation's asset/liability management
strategies, the Corporation utilizes interest rate swap agreements ("Swaps") to
hedge certain longer-term liabilities, converting the effective rate paid on the
hedged liabilities to a floating rate from a fixed rate. All Swaps employed by
the Corporation represent end-user activities designed as hedges and,
accordingly, fluctuations in the fair values of such contracts are not included
in the results of operations. At June 30, 1995, the contractual maturities of
Swaps ranged from 1995 to 2005 and aggregated notional amounts of $675 million.
CONTINGENCIES
Several of the Corporation's subsidiaries are defendants in various
proceedings arising in the normal course of business. These claims relate to the
lending and investment advisory services provided by the Corporation and include
alleged compensatory and punitive damages.
In addition, subsidiaries of the Corporation have been named as defendants
in suits that allege fraudulent, deceptive or collusive practices in connection
with certain financing practices (including the sale of insurance). These suits,
which are not filed as class actions, name unaffiliated corporations as
co-defendants, and the Corporation's insurance carrier is defending these suits
under a reservation of rights. These suits are typical of complaints that have
been filed in recent years in the State of Alabama challenging financial
transactions between plaintiffs and various financial institutions. The
complaints in such cases frequently seek punitive damages in transactions
involving fairly small amounts of actual damages, and in recent years, juries in
the State of Alabama, in certain counties where some of the suits described
above are pending, have awarded large punitive damage awards to plaintiffs.
Although it is not possible to determine, with any certainty and at this
point in time, the potential exposure related to punitive damages in connection
with these suits, the Corporation, in the opinion of management, and based upon
consultation with legal counsel, believes that the ultimate resolutions of these
proceedings will not have a material adverse effect on the Corporation's
financial statements.
S-12
<PAGE> 13
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting
Agreement, the Corporation has agreed to sell to each of the Underwriters named
below, and each of the Underwriters, for whom Merrill Lynch, Pierce, Fenner &
Smith Incorporated, CS First Boston Corporation, Dean Witter Reynolds Inc., J.
C. Bradford & Co. and Interstate/Johnson Lane Corporation are acting as
representatives (the "Representatives"), has severally agreed to purchase from
the Corporation, the respective number of shares of Common Stock set forth below
opposite the name of such Underwriter:
<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
------------------------------------------------------------------------ ---------
<S> <C>
Merrill Lynch, Pierce, Fenner & Smith
Incorporated............................................... 476,000
CS First Boston Corporation............................................. 476,000
Dean Witter Reynolds Inc................................................ 476,000
J.C. Bradford & Co...................................................... 476,000
Interstate/Johnson Lane Corporation..................................... 476,000
Bear, Stearns & Co. Inc. ............................................... 80,000
A.G. Edwards & Sons, Inc. .............................................. 80,000
Fox-Pitt, Kelton Inc. .................................................. 80,000
Goldman, Sachs & Co. ................................................... 80,000
Keefe, Bruyette & Woods, Inc. .......................................... 80,000
Morgan Stanley & Co. Incorporated....................................... 80,000
PaineWebber Incorporated................................................ 80,000
Prudential Securities Incorporated...................................... 80,000
Sterne, Agee & Leach, Inc. ............................................. 80,000
Robert W. Baird & Co. Incorporated...................................... 40,000
The Chapman Company..................................................... 40,000
Allen C. Ewing & Co. ................................................... 40,000
First Manhattan Co. .................................................... 40,000
Edward D. Jones & Co. .................................................. 40,000
Legg Mason Wood Walker, Incorporated.................................... 40,000
Morgan Keegan & Company, Inc. .......................................... 40,000
Raymond James & Associates, Inc. ....................................... 40,000
Southeast Research Partners, Inc. ...................................... 40,000
Wheat, First Securities, Inc............................................ 40,000
---------
Total..................................................... 3,500,000
========
</TABLE>
The Underwriters are committed to purchase all of such shares if any are
purchased. Under certain circumstances the commitments of nondefaulting
Underwriters may be increased as set forth in the Underwriting Agreement.
The Corporation has granted the Underwriters an option, exercisable for
thirty days after the date of this Prospectus Supplement, to purchase up to
525,000 additional shares of Common Stock to cover over-allotments, if any, at
the public offering price less the underwriting discount. If the Underwriters
exercise this option, each of the Underwriters will have a firm commitment,
subject to certain conditions, to purchase approximately the same percentage
thereof which the number of shares of Common Stock purchased by it in the
foregoing table is of the 3,500,000 shares of Common Stock initially offered
hereby. The Underwriters may exercise such option only to cover over-allotments
in connection with the sale of the 3,500,000 shares offered hereby.
The Representatives have advised the Corporation that they propose
initially to offer the shares to the public 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 not in excess of $.50 per share. The Underwriters
may allow, and such
S-13
<PAGE> 14
dealers may reallow, a discount not in excess of $.10 per share on sales to
certain other dealers. After the initial public offering, the public offering
price, concession and discount may be changed.
Certain of the Underwriters, including certain of the Representatives, have
from time to time performed investment banking services for the Corporation for
which they received customary fees.
The Corporation has agreed that it will not, with certain exceptions,
offer, sell or otherwise dispose of any shares of Common Stock, or any
securities convertible into, or exchangeable for, Common Stock, for 90 days from
the date of this Prospectus Supplement without the prior written consent of the
Representatives. This prohibition does not apply to shares issued by the
Corporation in connection with conversion rights in effect as of the date of the
Underwriting Agreement, employee benefit or shareholder plans of the Corporation
existing on the date of the Underwriting Agreement, or acquisitions by the
Corporation.
The Corporation has agreed to indemnify the Underwriters against certain
civil liabilities, including liabilities under the Securities Act, or to
contribute to payments the Underwriters may be required to make in respect
thereof.
LEGAL OPINIONS
The legality of the shares offered hereby will be passed upon for the
Corporation by Bradley, Arant, Rose & White, and for the Underwriters by Stroock
& Stroock & Lavan. As of June 30, 1995, the partners and associates of Bradley,
Arant, Rose & White beneficially owned approximately 1,600,000 shares of Common
Stock of the Corporation.
S-14
<PAGE> 15
PROSPECTUS
Dated September 12, 1995
SOUTHTRUST CORPORATION (LOGO)
SouthTrust Corporation (the "Corporation") may offer from time to time
up to $300,000,000 of (i) its notes, debentures or other evidences of unsecured
indebtedness (the "Debt Securities") in one or more currencies on terms to be
determined at the time of sale, (ii) its preferred stock, par value $1.00 per
share (the "Preferred Stock") and (iii) its common stock, par value $2.50 per
share (the "Common Stock"), in one or more currencies on terms to be determined
at the time of sale. The Preferred Stock and Common Stock are collectively
referred to as the "Equity Securities," and the Debt Securities and the Equity
Securities are collectively referred to as the "Offered Securities." The Debt
Securities may be either senior in priority of payment (the "Senior
Securities") or subordinated in right of payment (the "Subordinated
Securities"). When Offered Securities are sold, a supplement to this Prospectus
(the "Prospectus Supplement") will be delivered, which will set forth the
amount and terms of the Offered Securities and of the sale. The Offered
Securities may be sold for U.S. Dollars, Foreign Currencies or foreign currency
units, and the principal of or any interest on the Debt Securities may be
payable in U.S. Dollars, Foreign Currencies or foreign currency units.
When Debt Securities are offered, any applicable Prospectus Supplement will
set forth the specific terms such as, where applicable, the specific
designation, aggregate principal amount, denominations and currency or currency
unit for which the Debt Securities may be purchased, the currency or currency
rate in which the principal and any interest is payable, maturity, interest rate
(which may be fixed or variable), and time of payment of interest, if any, terms
for redemption (which either may be at the option of the Corporation or the
holder), terms for sinking fund payments, initial public offering price, names
of and principal amounts to be purchased by underwriters and compensation of
such underwriters, and information about any listing on a securities exchange of
such Debt Securities as are being offered thereby. When Equity Securities are
offered, any applicable Prospectus Supplement will set forth, in the case of
Preferred Stock, the specifications, such as, where applicable, the specific
title and stated value, any dividend and liquidation rights, voting rights and
the initial public offering price, and, in the case of Common Stock, the initial
public offering price and the aggregate number of shares offered.
The Debt Securities may be issued in registered or bearer form. In
addition, all or a portion of the Debt Securities of a series may be issuable in
temporary or permanent global form. Debt Securities in bearer form will be
offered and sold only outside the United States to non-U.S. Persons and to
foreign branches of certain United States financial institutions. See
"Limitations on Issuance of Bearer Securities."
The Offered Securities may be sold to underwriters for public offering
pursuant to terms of offering fixed at the time of sale. The name of any
underwriter or agent of the Corporation involved in the sale of Offered
Securities will be set forth in any applicable Prospectus Supplement. In
addition, the Offered Securities may be sold by the Corporation directly or
through agents. Any underwriters, dealers or agents participating in the
offering may be deemed "underwriters" within the meaning of the Securities Act
of 1933, as amended (the "Securities Act"). See "Plan of Distribution."
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. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE DEBT SECURITIES WILL BE UNSECURED OBLIGATIONS OF THE CORPORATION AND WILL
NOT BE OBLIGATIONS OF A BANK INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER FEDERAL AGENCY.
The date of this Prospectus is September 12, 1995.
<PAGE> 16
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN AS CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS. THIS PROSPECTUS AND ANY APPLICABLE PROSPECTUS SUPPLEMENT DO NOT
CONSTITUTE AN OFFER OF ANY SECURITIES OTHER THAN THOSE TO WHICH THEY RELATE OR
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY WITHIN ANY JURISDICTION TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION WITHIN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS OR ANY APPLICABLE
PROSPECTUS SUPPLEMENT NOR ANY SALES MADE HEREUNDER OR THEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE CORPORATION SINCE THE DATE HEREOF OR THEREOF OR THAT THE
INFORMATION CONTAINED OR INCORPORATED BY REFERENCE HEREIN OR THEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO SUCH DATE.
AVAILABLE INFORMATION
The Corporation is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the offices of
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street N.W., Washington,
D.C. 20549, as well as at the following regional offices of the Commission: The
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511; and Seven World Trade Center, Suite 1300, New York, New
York 10048. Copies of such material can be obtained from the Commission's Public
Reference Section, Room 1024, Judiciary Plaza, 450 Fifth Street N.W.,
Washington, D.C. 20549 upon payment of prescribed rates. In addition, reports,
proxy statements, information statements and other information concerning the
Corporation may be inspected at the offices of the National Association of
Securities Dealers, Inc., 1735 K Street N.W., Washington, D.C. 20096. This
Prospectus does not contain all information set forth in the Registration
Statement and Exhibits thereto which the Corporation has filed with the
Commission under the Securities Act and to which reference is hereby made.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Corporation are
incorporated, as of their respective filing dates, by reference in this
Prospectus:
(a) The Corporation's Annual Report on Form 10-K for the year ended
December 31, 1994; and
(b) The Corporation's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1995 and June 30, 1995.
All reports and definitive proxy or information statements filed by the
Corporation with the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act after the date of this Prospectus and prior to the termination
of the offering of the Offered Securities offered hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in a document all or a
portion of which is incorporated or deemed to be incorporated by reference
herein shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained herein or in any other
subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Corporation will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, upon the written or oral
request of such person, a copy of any or all of the documents described above,
other than exhibits to such documents (unless such exhibits are specifically
incorporated by reference therein). Written requests should be addressed to
Aubrey D. Barnard, SouthTrust Corporation,
2
<PAGE> 17
SouthTrust Tower, 420 North 20th Street, Birmingham, Alabama 35203. Telephone
requests may be directed to Mr. Barnard at (205) 254-5000.
SOUTHTRUST CORPORATION
The Corporation, a multi-bank holding company headquartered in Birmingham,
Alabama, was incorporated under the laws of Delaware in 1968 in order to acquire
all of the outstanding capital stock of SouthTrust Bank of Alabama, N.A., the
oldest predecessor of which was incorporated in 1887. The Corporation engages in
a full range of banking services through its 18 bank subsidiaries, which operate
from 438 banking locations in Alabama, Florida, Georgia, Mississippi, North
Carolina, South Carolina and Tennessee. The Corporation 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 Corporation is SouthTrust Bank of Alabama, N.A.,
Birmingham, Alabama, which had approximately $10.7 billion in total assets as of
June 30, 1995. Of the Corporation's approximately $19.1 billion in assets as of
June 30, 1995 approximately $10.7 billion were in Alabama, approximately $3.9
billion were in Georgia, and approximately $3.4 billion were in Florida.
As a bank holding company, the Corporation is subject to regulation and
supervision by the Board of Governors of the Federal Reserve System (the
"Federal Reserve Board") under the Bank Holding Company Act of 1956, as amended
(the "Holding Company Act"). As of December 31, 1994, the capital ratios of the
Corporation and each banking subsidiary of the Corporation were in excess of the
fully phased-in risk-based and leverage capital guidelines of the Federal
Reserve Board, the Office of the Comptroller of the Currency (the
"Comptroller"), and the Federal Deposit Insurance Corporation (the "FDIC"), as
applicable. The various bank and bank-related subsidiaries of the Corporation
are subject to regulation and supervision by the state banking authorities of
the state in which the subsidiary is organized, the Comptroller, the Federal
Reserve Board and/or the FDIC. The amount of dividends that each subsidiary bank
of the Corporation may pay is limited by regulation. See "Regulatory Matters."
The Corporation has pursued a strategy of acquiring banks and financial
institutions throughout the major growth areas of Florida, Georgia, Mississippi,
North Carolina, South Carolina and Tennessee. The purpose of this expansion is
to give the Corporation access to metropolitan markets with favorable prospects
for growth of population, per capita income, and business development
opportunities. As a result of this strategy, the total assets of the Corporation
outside of Alabama have grown to approximately $8.4 billion or 44% of total
assets at June 30, 1995.
Through the first two quarters of 1995, the Corporation effected
acquisitions of four financial institutions, with total assets aggregating
approximately $494.0 million, and as of the date of this Prospectus, the
Corporation has executed letters of intent or definitive agreements relating to
the acquisition of three financial institutions, with total assets aggregating
approximately $177.2 million. As a routine part of its business, the Corporation
evaluates opportunities to acquire bank holding companies, banks and other
financial institutions. In addition, in the normal course of its business, the
Corporation receives inquiries and solicitations from banks and other financial
institutions regarding the possible acquisition of banks and financial
institutions. The Corporation routinely reviews and evaluates these inquiries.
Thus, at any particular point in time, including the date of this Prospectus,
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 may occur or be in progress.
The Corporation's headquarters are located at 420 North 20th Street,
Birmingham, Alabama 35203 and its telephone number is (205) 254-5000.
3
<PAGE> 18
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
The following are the consolidated ratios of earnings to fixed charges for
each of the periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
YEAR ENDING DECEMBER 31, JUNE 30,
-------------------------------- -----------
1994 1993 1992 1991 1990 1995 1994
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
EARNINGS TO FIXED CHARGES
Including Interest on Deposits............. 1.51 1.56 1.42 1.26 1.18 1.38 1.58
Excluding Interest on Deposits............. 3.02 4.28 4.23 2.87 1.98 2.31 3.68
</TABLE>
For purposes of computing the consolidated ratios, earnings represent net
income applicable to Common Stock, plus applicable income taxes and fixed
charges. Fixed charges represent interest expense, capitalized interest and
amortization of debt expense. The ratios of earnings to combined fixed charges
and preferred stock dividends are identical to the ratios of earnings to fixed
charges listed above because no shares of Preferred Stock of the Corporation
were outstanding during the periods indicated above.
USE OF PROCEEDS
The net proceeds from the sale of the Offered Securities will be used for
general corporate purposes, including the Corporation's working capital needs,
the funding of investments in, or extensions of credit to, its banking and
nonbanking subsidiaries, possible acquisitions of other financial institutions
or their assets or liabilities, possible acquisitions of or investments in other
businesses of a type eligible for bank holding companies and possible reduction
of outstanding indebtedness. Pending such use, the Corporation may temporarily
invest the net proceeds in investment grade securities. The Corporation may,
from time to time, engage in additional capital financings of a character and in
amounts to be determined by the Corporation in light of its need at such time or
times and in light of prevailing market conditions. If the Corporation elects at
the time of issuance of the Offered Securities to make different or more
specific use of proceeds other than that set forth herein, such use will be
described in the applicable Prospectus Supplement.
REGULATORY MATTERS
The Corporation is a bank holding company within the meaning of the Holding
Company Act, and is registered with the Federal Reserve Board. The Corporation's
banking subsidiaries are subject to restrictions under federal law which limit
the transfer of funds by the subsidiary banks to the Corporation and its
nonbanking subsidiaries, whether in the form of loans, extensions of credit,
investments or asset purchases. Such transfers by any subsidiary bank to the
Corporation or any nonbanking subsidiary are limited in amount to 10% of the
subsidiary bank's capital and surplus and, with respect to the Corporation and
all such nonbanking subsidiaries, to an aggregate of 20% of such bank's capital
and surplus. Furthermore, such loans and extensions of credit are required to be
secured in specified amounts. The Holding Company Act also prohibits, subject to
certain exceptions, a bank holding company from engaging in or acquiring direct
or indirect control of more than 5% of the voting stock of any company engaged
in nonbanking activities. An exception to this prohibition is for activities
expressly found by the Federal Reserve Board to be so closely related to banking
or managing or controlling banks as to be a proper incident thereto.
As a bank holding company, the Corporation is required to file with the
Federal Reserve Board semi-annual reports and such additional information as the
Federal Reserve Board may require. The Federal Reserve Board may also make
examinations of the Corporation and each of its subsidiaries.
Various federal and state statutory provisions limit the amount of
dividends the subsidiary banks can pay to the Corporation without regulatory
approval. The approval of the Comptroller is required for any dividend by a
national bank if the total of all dividends declared by the bank in any calendar
year would exceed the total of its net profits, as defined by the Comptroller,
for that year combined with its retained net profits for the preceding two years
less any required transfers to surplus or a fund for the retirement of any
preferred stock. Comparable prohibitions on the declaration of dividends are
imposed by the Alabama Banking Code, the
4
<PAGE> 19
Florida Financial Institutions Code, the North Carolina Banking Code, the South
Carolina Banking Code, the Tennessee Banking Code, the Financial Institution
Code of Georgia and the Mississippi Banking Code. In addition, a national bank
may not pay a dividend in an amount greater than its net profits then on hand
after deducting its loan losses and bad debts. For this purpose, bad debts are
defined to include, generally, the principal amount of loans which are in
arrears with respect to interest by six months or more or are past due as to
payment of principal (in each case to the extent that such debts are in excess
of the reserve for possible credit losses). Under the foregoing laws and
regulations, at June 30, 1995, approximately $254.1 million was available for
payment of dividends to the Company by its bank subsidiaries during the final
two quarters of 1995. The payment of dividends by any subsidiary bank may also
be affected by other factors, such as the maintenance of adequate capital for
such subsidiary bank. In addition to the foregoing restrictions, the Federal
Reserve Board has the power to prohibit dividends by bank holding companies if
their actions constitute unsafe or unsound practices. The Federal Reserve Board
has issued a policy statement on the payment of cash dividends by bank holding
companies, which expresses the Federal Reserve Board's view that a bank holding
company experiencing earnings weaknesses should not pay cash dividends that
exceed its net income or that could only be funded in ways that weaken the bank
holding company's financial health, such as by borrowing. Furthermore, the
Comptroller also has the authority to prohibit the payment of dividends by a
national bank when it determines such payment to be an unsafe and unsound
banking practice.
RISK-BASED CAPITAL GUIDELINES
Under the Federal Reserve Board's risk-based capital guidelines applicable
to the Corporation, the minimum ratio of capital to risk-weighted assets
(including certain off-balance sheet items, such as standby letters of credit)
is 8%. To be considered a "well capitalized" bank under the guidelines, a bank
must have a total risk-based capital ratio in excess of 10%. At December 31,
1994, all of the Corporation's subsidiary banks were considered "well
capitalized." At least half of the total capital is to be comprised of common
equity, retained earnings and a limited amount of perpetual preferred stock,
after subtracting goodwill, and certain other adjustments ("Tier 1 capital").
The remainder may consist of perpetual debt, mandatory convertible debt
securities, a limited amount of subordinated debt, other preferred stock not
qualifying for Tier 1 capital and a limited amount of loan loss reserves ("Tier
2 capital"). The Company's national banking subsidiaries are subject to similar
capital requirements adopted by the Comptroller, and its state non-member bank
subsidiaries are subject to similar capital requirements adopted by the FDIC. In
addition, the Federal Reserve Board, the Comptroller and the FDIC have adopted a
minimum leverage ratio (Tier 1 capital to total assets) of 3%. Generally,
banking organizations are expected to operate well above the minimum required
capital level of 3% unless they meet certain specified criteria, including that
they have the highest regulatory ratings. Most banking organizations are
required to maintain a leverage ratio of 3% plus an additional cushion of at
least 1% to 2%. The guidelines also provide that banking organizations
experiencing internal growth or making acquisitions will be expected to maintain
strong capital positions substantially above the minimum supervisory levels
without significant reliance upon intangible assets. On December 31, 1994, the
Corporation had a Tier 1 capital ratio of 7.68%, a total risk-based capital
ratio of 11.71% and a leverage ratio of 6.10%.
Under the Financial Institutions Reform, Recovery and Enforcement Act of
1989, failure to meet the capital guidelines could subject a banking institution
to a variety of enforcement remedies available to federal regulatory
authorities, including the termination of deposit insurance by the FDIC.
FDICIA CAPITAL REQUIREMENTS
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") substantially revised the depositary institution regulatory and
funding provisions of the Federal Deposit Insurance Act as well as several other
federal banking statutes. Among other things, FDICIA requires the federal
banking regulators to take prompt corrective action in respect of depositary
institutions that do not meet minimum capital requirements. FDICIA establishes
five capital tiers: "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized" and "critically
undercapitalized." A depository institution is well capitalized if it
significantly exceeds the minimum level required by regulation for each relevant
capital measure, adequately capitalized if it meets each such measure,
undercapitalized if it fails to meet any such
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measure, significantly undercapitalized if it is significantly below such
measure and critically undercapitalized if it fails to meet any critical capital
level set forth in regulations. The critically undercapitalized level occurs
where tangible equity is less than 2% of total tangible assets or less than 65%
of the minimum leverage ratio to be prescribed by regulation (except to the
extent that 2% would be higher than such 65% level). A depository institution
may be deemed to be in a capitalization category that is lower than is indicated
by its actual capital position if it receives an unsatisfactory examination
rating.
FDICIA generally prohibits a depository institution from making any capital
distribution (including payment of a dividend) or paying any management fee to
its holding company if the depository institution would thereafter be
undercapitalized. Undercapitalized depository institutions became subject to
restrictions on borrowing from the Federal Reserve System, effective as of
December 19, 1993. In addition, undercapitalized depository institutions are
subject to growth limitations and are required to submit capital restoration
plans. A depository institution's holding company must guarantee the capital
plan, up to an amount equal to the lesser of 5% of the depository institution's
assets at the time it becomes undercapitalized or the amount of the capital
deficiency when the institution fails to comply with the plan. The federal
banking agencies may not accept a capital plan without determining, among other
things, that the plan is based on realistic assumptions and is likely to succeed
in restoring the depository institution's capital. If a depository fails to
submit an acceptable plan, it is treated as if it is significantly
undercapitalized.
Significantly undercapitalized depository institutions may be subject to a
number of requirements and restrictions, including orders to sell sufficient
voting stock to become adequately capitalized, requirements to reduce total
assets and cessation of receipt of deposits from correspondent banks. Critically
undercapitalized depository institutions are subject to appointment of a
receiver or conservator.
SOURCE OF STRENGTH
According to Federal Reserve Board policy, bank holding companies are
expected to act as a source of financial strength to each subsidiary bank and to
commit resources to support each such subsidiary. This support may be required
at times when a bank holding company may not be able to provide such support. In
the event of a loss suffered or anticipated by the FDIC -- either as a result of
default of a banking subsidiary of the Corporation or related to FDIC assistance
provided to a subsidiary in danger of default -- the other banking subsidiaries
of the Corporation may be assessed for the FDIC's loss, subject to certain
exceptions.
THE RIEGLE-NEAL INTERSTATE BANKING AND BRANCHING EFFICIENCY ACT
In September 1994, the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 (the "Interstate Banking Act") became law. The Interstate
Banking Act has two major provisions regarding the merger, acquisition and
operation of banks across state lines. First it provides that effective
September 29, 1995, adequately capitalized and managed bank holding companies
will be permitted to acquire banks in any state. State laws prohibiting
interstate banking or discriminating against out-of-state banks will be
preempted as of the effective date. States cannot enact laws opting out of this
provision; however, states may adopt a minimum restriction requiring that target
banks located within the state be in existence for a period of years, up to a
maximum of five years, before such bank may be subject to the Interstate Banking
Act. The Interstate Banking Act establishes deposit caps which prohibit
acquisitions that would result in the acquirer controlling 30% or more of the
deposits of insured banks and thrifts held in the state in which the acquisition
or merger is occurring or in any state in which the target maintains a branch or
10% or more of the deposits nationwide. State-level deposit caps are not
preempted as long as they do not discriminate against out-of-state acquirers,
and the federal deposit caps apply only to initial entry acquisitions.
In addition to the foregoing, the Interstate Banking Act provides that as
of June 1, 1997, adequately capitalized and managed banks will be able to engage
in interstate branching by merging banks in different states. However, unlike
the interstate banking provision, states may opt out of the application of this
provision by enacting specific legislation before June 1, 1997. If a state does
not opt-out, banks will be required to comply with the state's provisions with
respect to branching across state lines.
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Proposals to change the laws and regulations governing the banking industry
are frequently introduced in Congress, in the state legislatures and before the
various bank regulatory agencies. The likelihood and timing of any such changes
and the impact such changes might have on the Corporation and its subsidiaries,
however, cannot be determined at this time.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities sets forth
certain general terms and provisions of the Debt Securities to which any
applicable Prospectus Supplement may relate. The particular terms of the Debt
Securities offered by any applicable Prospectus Supplement (the "Offered Debt
Securities") and the extent, if any, to which such general provisions may apply
to the Debt Securities so offered will be described in the Prospectus Supplement
relating to such Offered Debt Securities.
The Senior Securities will be issued under an Indenture (the "Senior
Indenture") between the Corporation and a Trustee to be named in any applicable
Prospectus Supplement (the "Senior Debt Trustee"). The Subordinated Securities
will be issued under an Indenture (the "Subordinated Indenture") between the
Corporation and a Trustee to be named in any applicable Prospectus Supplement
(the "Subordinated Debt Trustee"). Copies of the forms of Senior Indenture and
the Subordinated Indenture (collectively, the "Indentures") are filed as
exhibits to this Registration Statement.
The following summaries of the Debt Securities and the Indentures do not
purport to be complete and are subject to, and are qualified in their entirety
by reference to, all the provisions of the Indentures, including the applicable
definitions therein of certain terms used in this Prospectus. All capitalized
terms not defined in this Prospectus shall have the definitions ascribed to them
in the Indentures.
GENERAL
The Debt Securities will be direct, unsecured obligations of the
Corporation. The Indentures do not limit the amount of Debt Securities that may
be issued thereunder and provide that Debt Securities may be issued thereunder
from time to time in one or more series. The amount of Debt Securities that may
be offered and sold pursuant to this Prospectus, however, is limited to the
aggregate initial offering price of the securities registered under the
Registration Statement of which this Prospectus forms a part.
Any applicable Prospectus Supplement will describe the following terms of
the Offered Debt Securities: (l) the title of the Offered Debt Securities; (2)
any limit on the aggregate principal amount of the Offered Debt Securities; (3)
the date or dates on which the Offered Debt Securities may be issued and are or
will be payable; (4) the rate or rates per annum (which may be fixed or
variable) at which the Offered Debt Securities will bear interest, if any, or
the method by which such rate or rates shall be determined, and the date or
dates from which such interest, if any, will accrue; (5) the date or dates on
which such interest, if any, on the Offered Debt Securities will be payable and
the Regular Record Dates for any such Interest Payment Dates, and the extent to
which, or the manner in which, any interest payable on a temporary or permanent
global Debt Security ("Global Notes") on an Interest Payment Date will be paid
if other than in the manner described under the heading "Global Notes" below;
(6) each office or agency where, subject to the terms of the relevant Indenture
as described below under "Payment and Paying Agents," the principal of, and
premium, if any, and any interest on the Offered Debt Securities will be payable
and each office or agency where, subject to the terms of the relevant Indenture
as described below under "Denominations, Registration and Transfer", the Offered
Debt Securities may be presented for registration of transfer or exchange and,
if applicable, conversion; (7) the period or periods within which, the price or
prices at which, and the terms and conditions upon which the Offered Debt
Securities may be redeemed at the option of the Corporation; (8) the obligation
or option, if any, of the Corporation to redeem, to repay or purchase the
Offered Debt Securities pursuant to any sinking fund or similar provisions or at
the option of a Holder thereof and the period or periods within which, the price
or prices at which and the terms and conditions upon which the Offered Debt
Securities will be redeemed, repaid or purchased pursuant to any such
obligation; (9) whether the Offered Debt Securities are to be issued with
original issue discount within the meaning of section 1273(a) of the Internal
Revenue Code of 1986, as amended (the "Code"), and the regulations thereunder
and the amount of
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such discount; (10) provisions, if any, for the defeasance of the Offered Debt
Securities; (11) whether the Offered Debt Securities are to be issued as
Registered Securities or Bearer Securities, or both, and if Bearer Securities
are issued, whether Coupons will be attached thereto, whether Bearer Securities
may be exchanged for Registered Securities and the circumstances and places for
such exchange, if permitted, and any United States tax consequences to foreign
investors in Offered Debt Securities; (12) whether the Offered Debt Securities
are to be issued in whole or in part in the form of one or more temporary or
permanent Global Notes in registered or bearer form and, if so, the identity of
the depositary, if any, for such Global Note or Notes; (13) any provisions for
payment of additional amounts for taxes, and any provisions for redemption in
the event the Corporation must comply with reporting requirements in respect of
an Offered Debt Security other than a Floating Rate Security ("Affected
Security") or must pay such additional amounts in respect of any Offered Debt
Security; (14) if other than in U.S. Dollars, the Foreign Currency or Currencies
in which the Debt Securities may be denominated and the principal of, and
premium, if any, and any interest on the Offered Debt Securities shall or may be
paid and, if applicable, whether at the election of the Corporation and/or the
Holder, and the conditions and manner of determining the exchange rate or rates;
(15) any index used to determine the amount of payment of principal of and
premium, if any, and any interest on the Offered Debt Securities; (16) the
applicable Overdue Rate, if any; (17) any addition to, or modification or
deletion of, any Events of Default or covenants provided for with respect to the
Offered Debt Securities; (18) the priority of payment of such Offered Debt
Securities; and (19) any other detailed terms and provisions of the Offered Debt
Securities which are not inconsistent with the relevant Indenture. Any
applicable Prospectus Supplement will also describe any special provisions for
the payment of additional amounts with respect to the Offered Debt Securities
and terms relevant to Offered Debt Securities denominated in a Currency other
than U.S. Dollars.
Debt Securities may be issued as Discount Securities to be sold at a
substantial discount below their principal amount. Discount Securities mean any
Debt Securities issued with an "original issue discount" within the meaning of
Section 1273(a) of the Code and the regulations thereunder. Special United
States income tax and other considerations applicable to Discount Securities
will be described in any applicable Prospectus Supplement relating thereto.
Discount Securities may provide for the declaration of acceleration of the
Maturity of an amount less than the principal amount thereof upon the occurrence
of an Event of Default and the continuation thereof.
DENOMINATIONS, REGISTRATION AND TRANSFER
Each Debt Security may be denominated in U.S. Dollars or in other
currencies, European Currency Units ("ECU") or other composite currencies (the
"Specified Currency"), all as set forth in any applicable Prospectus Supplement.
See "Currency Risks."
Debt Securities of a series may be issuable as Registered Securities, as
Bearer Securities with or without Coupons attached or as both Registered
Securities and Bearer Securities. Debt Securities of a series may be issuable in
whole or in part in the form of one or more Global Notes, as described below
under "Global Notes." Unless otherwise provided in an applicable Prospectus
Supplement with respect to a series of Debt Securities, the Debt Securities will
be issuable as Registered Securities without Coupons and in denominations (a) if
denominated in U.S. Dollars, of $1,000 or any integral multiple thereof, or (b)
if denominated in a Specified Currency other than U.S. Dollars, as set forth in
the applicable Prospectus Supplement. One or more Global Notes may be issued in
a denomination or aggregate denominations equal to the aggregate principal
amount of Outstanding Debt Securities of the series to be represented by such
Global Note or Notes.
In connection with the sale during the restricted period (referred to under
"Limitations on Issuance of Bearer Securities"), no Bearer Security may be
mailed or otherwise delivered to any location in the United States (as defined
under "Limitations on Issuance of Bearer Securities") and a Bearer Security may
be delivered only if the Person entitled to receive such Bearer Security
furnishes written certification, in the form required by the applicable
Indenture, to the effect that such Bearer Security is not owned by or on behalf
of a U.S. Person (as defined under "Limitations on Issuance of Bearer
Securities"), or, if a beneficial interest in such Bearer Security is owned by
or on behalf of a U.S. Person, that such U.S. Person (i) acquired and holds such
Bearer Securities through a foreign branch of a financial institution, (ii) is a
financial institution
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purchasing for its own accounts and, in the case of either (i) or (ii), such
financial institution agrees to comply with the requirements of Section 165(j)
(3) (A), (B) or (C) of the Code and the regulations thereunder, or (iii) is a
financial institution purchasing for resale during the restricted period only to
non-U.S. Persons outside the United States. See "Global Notes -- Bearer Debt
Securities" and "Limitations on Issuance of Bearer Securities."
Registered Securities of any series (other than a Global Note) will be
exchangeable for other Registered Securities of the same series and a like
aggregate principal amount and tenor of different authorized denominations. In
addition, if so provided in any applicable Prospectus Supplement, Bearer
Securities of any series which are registrable as to principal and interest may,
at the option of the Holder and subject to the terms of the applicable
Indenture, be exchangeable into Registered Securities of the same series of any
authorized denominations and of a like aggregate principal amount and tenor. Any
Bearer Security surrendered for exchange shall be surrendered with all unmatured
Coupons and all matured Coupons in default except that any Bearer Security
surrendered in exchange for a Registered Security between a Regular Record Date
or a Special Record Date and the relevant date for payment of interest shall be
surrendered without the Coupon relating to such date for payment of interest and
interest will not be payable in respect of the Registered Security issued in
exchange for such Bearer Security, but will be payable only to the Holder of
such Coupon when due in accordance with the terms of the applicable Indenture.
Except as provided in an applicable Prospectus Supplement, Bearer Securities
will not be issued in exchange for Registered Securities.
Debt Securities may be presented for exchange as provided above, and
Registered Securities (other than Global Notes) may be presented for
registration of transfer (with the form of transfer endorsed thereon duly
executed), at the office of the Security Registrar or co-Security Registrar
designated by the Corporation for such purpose with respect to any series of
Debt Securities and referred to in an applicable Prospectus Supplement, without
service charge and upon payment of any taxes and other governmental charges as
described in the applicable Indenture. Such transfer or exchange will be
effected upon the Security Registrar or co-Security Registrar being satisfied
with the documents of title and identity of the person making the request. The
Corporation has appointed the Senior Debt Trustee and the Subordinated Debt
Trustee (the Senior Debt Trustee and the Subordinated Debt Trustee are herein
collectively referred to as the "Trustees") as Security Registrars in respect of
Debt Securities issued under the Senior Indenture and the Subordinated Indenture
respectively.
CURRENCY RISKS
Debt Securities denominated or payable in foreign currencies may entail
significant risks. These risks include, without limitation, the possibility of
significant fluctuations in the foreign currency markets, the imposition or
modification of foreign exchange controls and potential illiquidity. These risks
will vary depending upon the Currency or Currencies involved and will be more
fully described in any applicable Prospectus Supplement.
PAYMENT AND PAYING AGENTS
Unless otherwise indicated in any applicable Prospectus Supplement, payment
of principal of, and premium, if any, and any interest on Bearer Securities will
be payable, subject to any applicable laws and regulations, at the offices of
such Paying Agents outside the United States as the Corporation may designate
from time to time. Unless otherwise indicated in any applicable Prospectus
Supplement, payment of interest on Bearer Securities on any Interest Payment
Date will be made only against surrender of the Coupon relating to such Interest
Payment Date. No payment with respect to any Bearer Security will be made at any
office or agency of the Corporation in the United States or by check mailed to
any address in the United States or by transfer to an account maintained in the
United States. Payments will not be made in respect of Bearer Securities or
Coupons pursuant to presentation to the Corporation or its designated Paying
Agents within the United States or the making of any other demand for payment to
the Corporation or its designated Paying Agents within the United States.
Notwithstanding the foregoing, payment of principal of, and premium, if any, and
interest on Bearer Securities denominated and payable in U.S. Dollars will be
made at the office of the Corporation's Paying Agent in the City of New York if
(but only if) payment of the full amount thereof in
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U.S. Dollars at all offices or agencies outside the United States is illegal or
effectively precluded by exchange controls or other similar restrictions.
Unless otherwise indicated in any applicable Prospectus Supplement, payment
of principal of, and premium, if any, and any interest on Registered Securities
will be made at the office of such Paying Agent or Paying Agents as the
Corporation may designate from time to time, except that at the option of the
Corporation payment of any interest may be made (i) by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register or (ii) by wire transfer to an account maintained by the
Person entitled thereto. Unless otherwise indicated in any applicable Prospectus
Supplement, payment of any installment of interest on Registered Securities will
be made to the Person in whose name such Registered Security is registered at
the close of business on the Regular Record Date for such interest.
Unless otherwise indicated in any applicable Prospectus Supplement, the
relevant Trustee will act as the Corporation's sole Paying Agent through its
principal office in The City of New York, with respect to Offered Debt
Securities which are issuable solely as Registered Securities. Any Paying Agents
outside the United States and other Paying Agents in the United States initially
designated by the Corporation for the Offered Debt Securities will be named in
any applicable Prospectus Supplement. The Corporation may at any time designate
additional Paying Agents or rescind the designation of any Paying Agent or
approve a change in the office through which any Paying Agent acts, except that,
if Debt Securities of a series are issuable only as Registered Securities, the
Corporation will be required to maintain a Paying Agent in each Place of Payment
for such series and, if Debt Securities of a series may be issuable as Bearer
Securities, the Corporation will be required to maintain (i) a Paying Agent in
The City of New York for payments with respect to any Registered Securities of
the series (and for payments with respect to Bearer Securities of the series in
the circumstances described above, but not otherwise), and (ii) a Paying Agent
in a Place of Payment located outside the United States where Debt Securities of
such series and any Coupons appertaining thereto may be presented and
surrendered for payment; provided that if the Debt Securities of such series are
listed on The Stock Exchange of the United Kingdom and the Republic of Ireland
or the Luxembourg Stock Exchange or any other stock exchange located outside the
United States and such stock exchange shall so require, the Corporation will
maintain a Paying Agent in London or Luxembourg or any other required city
located outside the United States, as the case may be, for the Debt Securities
of such series.
All monies paid by the Corporation to the Trustees or a Paying Agent for
the payment of principal of, and premium, if any, and any interest on any Debt
Securities which remain unclaimed at the end of two years after such principal,
premium or interest shall have become due and payable will be repaid to the
Corporation and the Holder of such Debt Securities or any Coupon will thereafter
look only to the Corporation for payment thereof.
GLOBAL NOTES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more Global Notes that will be deposited with or on behalf of a
depositary located in the United States (a "U.S. Depositary") or a common
depositary located outside the United States (a "Common Depositary") identified
in any applicable Prospectus Supplement relating to such series. Global Notes
may be issued in either registered or bearer form and in either temporary or
permanent form.
The specific terms of the depositary arrangement with respect to any
Offered Debt Securities of a series will be described in any applicable
Prospectus Supplement relating to such series. The Corporation anticipates that
the following provisions will apply to all depositary arrangements.
Book-Entry Debt Securities
Unless otherwise specified in any applicable Prospectus Supplement, Debt
Securities which are to be represented by a Global Note to be deposited with or
on behalf of a U.S. Depositary will be represented by a Global Note registered
in the name of such depositary or its nominee. Upon the issuance of a Global
Note in registered form, the U.S. Depositary for such Global Note will credit,
on its book-entry registration and
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transfer system, the respective principal amounts of the Debt Securities
represented by such Global Note to the accounts of institutions that have
accounts with such depositary or its nominee ("Participants"). The accounts to
be credited shall be designated by the underwriters or agents of such Debt
Securities or by the Corporation if such Debt Securities are offered and sold
directly by the Corporation. Ownership of beneficial interests in such Global
Notes will be limited to Participants or persons that may hold interests through
Participants. Ownership of beneficial interests by Participants in such Global
Notes will be shown on, and the transfer of that ownership interest will be
effected only through, records maintained by the U.S. Depositary or its nominee
for such Global Note. Ownership of beneficial interests in Global Notes by
persons that hold through Participants will be shown on, and the transfer of
that ownership interest within such Participant will be effected only through,
records maintained by such Participant. The laws of some jurisdictions 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 a Global Note.
So long as the U.S. Depositary for a Global Note in registered form, or its
nominee, is the registered owner of such Global Note, such depositary or such
nominee, as the case may be, will be considered the sole owner or Holder of the
Debt Securities represented by such Global Note for all purposes under the
Indenture governing such Debt Securities. Except as set forth below, owners of
beneficial interests in such Global Notes will not be entitled to have Debt
Securities of the series represented by such Global Note registered in their
names, will not receive or be entitled to receive physical delivery of Debt
Securities of such series in definitive form and will not be considered the
owners or Holders thereof under the applicable Indenture.
Payment of principal of, premium, if any, and any interest on Debt
Securities registered in the name of or held by a U.S. Depositary or its nominee
will be made to the U.S. Depositary or its nominee, as the case may be, as the
registered owner or the Holder of the Global Note representing such Debt
Securities. None of the Corporation, the Trustees, any Paying Agent or the
Security Registrar for such Debt Securities will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests in a Global Note for such Debt Securities or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
The Corporation expects that the U. S. Depositary for Debt Securities of a
series, upon receipt of any payment of principal, premium or interest in respect
of a permanent Global Note, will credit immediately Participants' accounts with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such Global Note as shown on the records of such
depositary. The Corporation also expects that payments by Participants to owners
of beneficial interests in such Global Note held through such Participants will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of such Participants.
A Global Note may not be transferred except as a whole by the U.S.
Depositary for such Global Note to or among a nominee or a successor. If a U.S.
Depositary for Debt Securities of a series is at any time unwilling or unable to
continue as depositary and a successor depositary is not appointed by the
Corporation within ninety days, the Corporation will issue Debt Securities in
definitive registered form in exchange for the Global Note or Global Notes
representing such Debt Securities. In addition, the Corporation may at any time
and in its sole discretion determine not to have any Debt Securities in
registered form represented by one or more Global Notes and, in such event, will
issue Debt Securities in definitive form in exchange for the Global Note or
Global Notes representing such Debt Securities. Further, if the Corporation so
specifies with respect to Debt Securities of a series, an owner of a beneficial
interest in a Global Note representing Debt Securities of such series may, on
terms acceptable to the Corporation and the U.S. Depositary, receive individual
Debt Securities of such series in exchange for such beneficial interests,
subject to any limitations in any applicable Prospectus Supplement relating to
such Offered Debt Securities. In any such instance, an owner of a beneficial
interest in a Global Note will be entitled to physical delivery in definitive
form of Debt Securities of the series represented by such Global Note equal in
principal amount to such beneficial interest and to have such Debt Securities
registered in its name.
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Bearer Debt Securities
Unless otherwise specified in any applicable Prospectus Supplement, all
Bearer Securities of a series initially will be issued in the form of a single
temporary Global Note, to be deposited with a Common Depositary in London for
the operator of the Euro-clear System ("Euro-clear Operator") or CEDEL, S.A.
("CEDEL") for credit to the designated accounts. Commencing 40 days after the
issue date of a temporary Global Note, the Debt Securities represented by such
temporary Global Note will be exchangeable for definitive Debt Securities or for
interests in a permanent Global Note, without interest Coupons, representing
Debt Securities having the same interest rate and Stated Maturity but in each
such case only upon written certification in the form and to the effect
described above under "Denominations, Registration and Transfer." The beneficial
owner of a Debt Security represented by a temporary Global Note or a permanent
Global Note, on or after the applicable exchange date and upon 30 days' notice
to the relevant Trustee given through the Euro-clear Operator or CEDEL, may
exchange its interest for definitive Bearer Securities or definitive Registered
Securities of any authorized denomination. No Bearer Security delivered in
exchange for a portion of a temporary Global Note or a permanent Global Note
shall be mailed or otherwise delivered to any location in the United States in
connection with such exchange.
Unless otherwise specified in any applicable Prospectus Supplement,
interest in respect of any portion of a temporary Global Note payable in respect
of an Interest Payment Date occurring prior to the date on which Debt Securities
represented by such temporary Global Note are exchangeable for definitive Debt
Securities or for interests in a permanent Global Note will be paid to each of
the Euro-clear Operator and CEDEL with respect to the portion of the temporary
Global Note held for its account. Each of the Euro-clear Operator and CEDEL,
will undertake in such circumstances to credit such interest received by it in
respect of a temporary Global Note to the respective accounts for which it holds
such temporary Global Note only upon receipt in each case of written
certification in the form and to the effect described above under
"Denominations, Registration and Transfer."
LIMITATIONS ON THE CORPORATION AND CERTAIN SUBSIDIARIES
The Indentures prohibit the sale, assignment, transfer or other disposition
of any shares of, or securities convertible into, or options, warrants or rights
to subscribe for or purchase shares of, Voting Stock of a Major Constituent
Bank, and further prohibits a Major Constituent Bank from issuing any shares of,
or securities convertible into, or options, warrants or rights to subscribe for
or purchase shares of, such Voting Stock, if, after giving effect to the
transaction and to the issuance of the maximum number of shares of Voting Stock
issuable upon all such convertible securities, options, warrants or rights, the
Major Constituent Bank would cease to be a Controlled Subsidiary, as provided in
the Indentures. The Indentures further prohibit the merger or consolidation of
any Major Constituent Bank with or into any other corporation, or the other
disposition of all or substantially all of its properties and assets to any
Person, if, after giving effect to such transaction, its successor in the merger
or consolidation, or the person that acquires all or substantially all of its
assets or properties will become a Controlled Subsidiary; provided, however,
that the Corporation may sell, assign, transfer or otherwise dispose of any
shares of, or securities convertible into, or options, warrants or rights to
subscribe for or purchase shares of, Voting Stock of a Major Constituent Bank,
(i) in compliance with an order of a court or regulatory authority of competent
jurisdiction; or (ii) where the proceeds, if any, from such sale, assignment or
disposition are, within a reasonable period of time, invested in any Controlled
Subsidiary engaged in the banking business or any other business in which bank
holding companies may legally engage, pursuant to an understanding or agreement
in principle reached at the time of such sale, assignment or disposition.
SENIOR SECURITIES
The Senior Securities will be direct, unsecured obligations of the
Corporation and will rank pari passu with all outstanding unsecured, senior
indebtedness of the Corporation.
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EVENTS OF DEFAULT
The following are Events of Default under the Senior Indenture with respect
to Senior Securities of any series: (a) default in the payment of any interest
on any Senior Security of that series when it becomes due and payable, and
continuance of such default for a period of 30 days; (b) default in the payment
of the principal of or any premium on any Senior Security of such series at its
maturity; (c) default in the deposit of any sinking fund payment, when and as
due by the terms of any Senior Security of that series; (d) failure of the
Corporation, subject to the terms of the Indenture, to perform any other
covenant of the Corporation in the Senior Indenture unless the Holders of
majority in principal of outstanding Senior Securities waives compliance with
such covenant; (e) default in the performance, or breach, of any covenant or
warranty of the Corporation (other than a covenant included in such Indenture
solely for the benefit of a series of Debt Securities other than that series),
and continuance of such default or breach for 90 days after written notice as
provided in such Indenture; (f) certain events involving bankruptcy, insolvency
or reorganization of the Corporation or a Major Constituent Bank whether
voluntary or involuntary; (g) indebtedness for borrowed money of the Corporation
or any Major Constituent Bank in excess of $5,000,000 (whether such indebtedness
now exists or is hereafter created) is not paid at final maturity or becomes or
is declared due and payable prior to the date or dates on which such
indebtedness would otherwise have become due and payable as a result of the
occurrence of one or more events of default as defined in any mortgages,
indentures, or instruments under which such indebtedness may have been issued or
by which such indebtedness may have been secured ("acceleration"), and such
failure at final maturity to pay or acceleration or accelerations, as the case
may be, shall not be rescinded, annulled, or cured prior to the expiration of 30
days after the date such failure to pay at final maturity or acceleration or
accelerations occurred; and (h) any other event of default provided for with
respect to Debt Securities of that series.
If any Event of Default (other than an Event of Default specified in clause
(f) above) occurs and is continuing with respect to Senior Securities of any
series at the time outstanding, either the Senior Debt Trustee or the Holders of
at least 25% in aggregate principal amount of the Outstanding Debt Securities of
that series may declare the principal amount (or, if the Debt Securities of that
series are Discount Securities, such portion of the principal amount as may be
specified in the terms of that series) of all the Debt Securities of that series
to be due and payable immediately in the Currency in which such Senior
Securities are denominated. If an Event of Default specified in clause (f) above
occurs, such principal amount shall become immediately due and payable without
any declaration or other act on the part of the Trustee or any Holder. At any
time after a declaration of acceleration with respect to Senior Securities of
any series has been made, but before a judgment or decree based on acceleration
has been obtained, the Holders of a majority in aggregate principal amount of
Outstanding Debt Securities of that series may, under certain circumstances,
rescind and annul such acceleration.
The Senior Indenture provides that upon the occurrence of an Event of
Default specified in items (a), (b) or (c) above, the Corporation will, upon
demand of the Senior Debt Trustee, pay to the Senior Debt Trustee, for the
benefit of the Holder of any such Senior Security, the whole amount then due and
payable on such Senior Securities or matured Coupons for principal, premium, if
any, and interest. The Senior Indenture further provides that if the Corporation
fails to pay such amount forthwith upon such demand, the Senior Debt Trustee
may, among other things, institute a judicial proceeding for the collection
thereof.
SUBORDINATED SECURITIES
The Subordinated Securities will be direct, unsecured obligations of the
Corporation and will rank pari passu with all outstanding, unsecured,
subordinated indebtedness of the Corporation. Any applicable Prospectus
Supplement relating to a series of Subordinated Securities will set forth the
aggregate amount of outstanding indebtedness of the Corporation as of the most
recent practicable date that by the terms of such debt securities would be
senior to such Subordinated Securities and any limitation on the issuance of
additional senior indebtedness.
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Subordination
The Subordinated Securities will be subordinate and junior in right of
payment, to the extent set forth in the Subordinated Indenture, to all Senior
Indebtedness (as defined below) of the Corporation. In the event that the
Corporation shall default in the payment of any principal of or interest on any
Senior Indebtedness when the same becomes due and payable, whether at maturity
or at a date fixed for prepayment or by declaration or otherwise, then, unless
and until such default shall have been cured or waived or shall have ceased to
exist, no direct or indirect payment (in cash, property, securities, by set-off
or otherwise) will be made or agreed to be made for principal of or interest on
the Subordinated Securities, or in respect of any redemption, retirement,
purchase or other acquisition of any of the Subordinated Securities. "Senior
Indebtedness" means (i) any obligation of the Corporation to its creditors
whether now outstanding or subsequently incurred, as to which, in the creating
instrument, it is provided that such obligation is Senior Indebtedness, (ii) the
Corporation's 8 5/8% Subordinated Notes due May 15, 2004, (iii) the
Corporation's 7% Debentures due May 15, 2003, and (iv) the Corporation's 7 5/8%
Subordinated Notes due May 1, 2004.
In the event of (i) any insolvency, bankruptcy, receivership, liquidation,
reorganization, readjustment, composition or other similar proceeding relating
to the Corporation, its creditors or its property, (ii) any proceeding for the
liquidation, dissolution or other winding up of the Corporation, voluntary or
involuntary, whether or not involving insolvency or bankruptcy proceedings,
(iii) any assignment by the Corporation for the benefit of creditors or (iv) any
other marshalling of the assets of the Corporation, all Senior Indebtedness
(including any interest thereon accruing after the commencement of any such
proceedings) will be paid in full before any payment or distribution, whether in
cash, securities or other property, is made on account of the principal of or
interest on the Subordinated Securities. In such event, any payment or
distribution on account of the principal of or interest on the Subordinated
Securities, whether in cash, securities or other property (other than securities
of the Corporation or any other corporation provided for by a plan of
reorganization or readjustment the payment of which is subordinate, at least to
the extent provided in the subordination provisions with respect to the
Subordinated Securities, to the payment of all Senior Indebtedness at the time
outstanding, and to any securities issued in respect thereof under any such plan
of reorganization or readjustment), which would otherwise (but for the
subordination provisions) be payable or deliverable in respect of the
Subordinated Securities, will be paid or delivered directly to the holders of
Senior Indebtedness in accordance with the priorities then existing among such
holders until all Senior Indebtedness (including any interest thereon accruing
after the commencement of any such proceedings) has been paid in full. If any
payment or distribution on account of the principal of or interest on the
Subordinated Securities of any character or any security, whether in cash,
securities or other property (other than securities of the Corporation or any
other corporation provided for by a plan of reorganization or readjustment, the
payment of which is subordinate, at least to the extent provided in the
subordination provisions with respect to the Subordinated Securities, to the
payment of all Senior Indebtedness at the time outstanding and to any securities
issued in respect thereof under any such plan of reorganization or
readjustment), shall be received by any Holder of any Subordinated Securities in
contravention of any of the terms of the Subordinated Indenture and before all
the Senior Indebtedness shall have been paid in full, such payment or
distribution or security will be received in trust for the benefit of, and will
be paid over or delivered and transferred to, the holders of the Senior
Indebtedness at the time outstanding in accordance with the priorities then
existing among such holders for application to the payment of all Senior
Indebtedness remaining unpaid to the extent necessary to pay all such Senior
Indebtedness in full. In the event of any such proceeding, after payment in full
of all sums owing with respect to Senior Indebtedness, the Holders of
Subordinated Securities, together with the holders of any obligations of the
Corporation ranking on a parity with the Subordinated Securities, will be
entitled to be repaid from the remaining assets of the Corporation the amounts
at that time due and owing on account of unpaid principal of or any premium and
interest on the Subordinated Securities and such other obligations before any
payment or other distribution, whether in cash, property or otherwise, shall be
made on account of any capital stock or obligations of the Corporation ranking
junior to the Subordinated Securities and such other obligations. By reason of
such subordination, in the event of the insolvency of the Corporation, holders
of Senior Indebtedness may receive more, ratably, and Holders of the
Subordinated Securities having a claim pursuant to such Subordinated Securities
may receive less, ratably, than the other creditors of the Corporation. Such
subordination will not prevent the occurrence of an Event of Default in respect
of the
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Subordinated Securities. See "Events of Default and Limited Rights of
Acceleration" for limitations on the right of acceleration.
Events of Default and Limited Rights of Acceleration
The Subordinated Indenture defines an Event of Default as being certain
events involving the bankruptcy, insolvency or reorganization of the Corporation
and, if specified in the resolution adopted by the Board of Directors with
respect to a series, certain other events. If an Event of Default occurs and is
continuing, either the Subordinated Debt Trustee or the Holders of at least 25%
in aggregate principal amount of the Outstanding Subordinated Securities of that
series (or, if the Subordinated Securities of that series are Discount
Securities, such portion of the principal amount as may be specified in the
terms of the series) may declare the principal amount of all the Subordinated
Securities of that series to be due and payable immediately in the Currency in
which such Subordinated Securities are denominated. The foregoing provision
would be subject as to enforcement to the broad equity powers of a federal
bankruptcy court and to the determination by that court of the nature of the
rights of the Holders of the Subordinated Securities. At any time after a
declaration of acceleration with respect to the Subordinated Securities has been
made, but before a judgment or decree based on acceleration has been obtained,
the Holders of a majority in aggregate principal amount of outstanding
Subordinated Securities may, under certain circumstances, rescind and annul such
acceleration.
Any applicable Prospectus Supplement relating to a series of Subordinated
Securities may provide for a right of acceleration of the payment of principal
of the Subordinated Securities, or certain series thereof, upon a default in the
payment of principal or interest or in the performance of any covenant or
agreement in the Subordinated Securities or Subordinated Indenture. If not so
provided, in the event of a default in the payment of principal or accrued
interest or the performance of any covenant or agreement in the Subordinated
Securities or Subordinated Indenture, the Subordinated Debt Trustee may, subject
to certain limitations and conditions, seek to enforce payment of such principal
or accrued interest or the performance of such covenant or agreement.
MISCELLANEOUS RIGHTS AND OBLIGATIONS OF TRUSTEES
The Indentures provide that, subject to the duty of the Trustees during
default to act with the required standard of care, the respective Trustee will
be under no obligation to exercise any of its rights or powers under the
relevant Indenture at the request or direction of any of the Holders, unless
such Holders shall have offered to such Trustee reasonable security or indemnity
against costs, expenses and liabilities which might be incurred by such Trustee.
Subject to such provisions for the indemnification of the Trustees, the Holders
of a majority in aggregate principal amount of the Outstanding Debt Securities
of any series will have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the relevant Trustee, or
exercising any trust or power conferred on such Trustee, with respect to the
Debt Securities of that series.
The Corporation is required to furnish the Trustees annually with a
statement as to the performance by the Corporation of certain of its obligations
under the relevant Indentures and as to any default in such performance and to
file with the relevant Trustee written notice of the occurrence of any default
or Event of Default within ten business days of the Corporation becoming aware
of such default or Event of Default.
MODIFICATION AND WAIVER
Modifications of and amendments to an Indenture may be made by the
Corporation and the relevant Trustee with the consent of the Holders of not less
than a majority in principal amount of the Outstanding Debt Securities of each
series affected by such modification or amendment voting separately; provided,
however, that no such modification or amendment may, without the consent of the
Holder of each Outstanding Debt Security affected thereby, (a) change the Stated
Maturity of the principal of, or any installment of principal or interest on,
any Debt Security, (b) reduce the principal amount of, or any premium or
interest on, any Debt Security, (c) reduce the amount of principal of a Discount
Security payable upon
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acceleration of the Maturity thereof, (d) change the Currency in which principal
of, or any premium or interest on, any Debt Security is denominated or payable,
(e) adversely affect the right of repayment or repurchase, if any, at the option
of the Holder, (f) reduce the amount of or postpone the date fixed for any
payment under any sinking fund or similar provisions, (g) impair the right to
institute suit for the enforcement of any payment on or with respect to any Debt
Security, (h) reduce the percentage in principal amount of Outstanding Debt
Securities of any series, the consent of whose Holders is required for
modification or amendment of the relevant Indenture or for waiver of compliance
with certain provisions of such Indenture or for waiver of certain defaults, (i)
limit the obligation of the Corporation to maintain a paying agency outside the
United States for Bearer Securities, (j) limit the obligation of the Corporation
to redeem an Affected Security, or (k) modify the provisions of an Indenture
relating to the modification of the Indenture, or the circumstances under which
the Holders may waive past defaults by and certain covenants of the Corporation.
The Holders of not less than a majority in principal amount of the
Outstanding Debt Securities of each series may, on behalf of all Holders of Debt
Securities of that series, waive, insofar as that series is concerned,
compliance by the Corporation with certain covenants of the relevant Indenture
and any Event of Default resulting in acceleration of such Debt Securities in
specified circumstances. The Holders of a majority in aggregate principal amount
of the Outstanding Debt Securities of each series may, on behalf of all Holders
of Debt Securities of that series, waive any past default under the relevant
Indenture with respect to Debt Securities of that series, except a default, (i)
in the payment of principal, premium, if any, or interest or in the payment of
any sinking fund installment or analogous obligation, or (ii) in respect of a
covenant or provision that cannot be modified or amended without the consent of
the Holders of each Outstanding Debt Security affected thereby.
The Corporation may, with the consent of its Board of Directors and the
Trustee, change the terms of an Indenture through an indenture supplement
without the consent of any Holders only for the following purposes: (i) to
evidence the succession of another corporation to the Corporation and the
assumption by any such successor of the covenants of the Corporation under the
relevant Indenture; (ii) to add to the covenants of the Corporation for the
benefit of the Holders or to surrender any right or power herein conferred upon
the Corporation; (iii) to add any additional Events of Default; (iv) to add to
or change any of the provisions of the relevant Indenture to facilitate the
issuance of Debt Securities in bearer form; (v) to change or eliminate any of
the relevant Indenture's provisions, provided that there are no Debt Securities
outstanding which are entitled to the benefit of such provision; (vi) to secure
the Debt Securities; (vii) to supplement any of the provisions of the relevant
Indenture to such extent as shall be necessary to permit or facilitate the
defeasance and discharge of any series of Debt Securities provided that any such
action shall not adversely affect the interests of the Holders of Debt
Securities of such series or any other series of Debt Securities; (viii) to
establish the form or terms of the Debt Securities and Coupons, if any, as
permitted by the relevant Indenture; (ix) to evidence and provide for the
acceptance of appointment by a successor Trustee or facilitate the
administration of the trusts under the relevant Indenture by more than one
Trustee; (x) to make any modifications, amendments or supplements to any
provisions herein which modifications, amendments or supplements are required
pursuant to any amendment of the Trust Indenture Act of 1939 enacted, or any of
the rules promulgated thereunder, after the date hereof; and (xi) to cure any
ambiguity, any defect or any inconsistent provision, provided such action shall
not adversely affect the Holders' interests in any material respect.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Both Indentures provide that the Corporation shall not consolidate with or
merge into any other corporation or convey, transfer or lease its properties and
assets substantially to any Person, and shall not permit any person to
consolidate with or merge into the Corporation or convey, transfer or lease its
properties and assets substantially to the Corporation, unless (i) the
corporation into which the Corporation is merged or consolidated or to which
substantially all of the Corporation's assets or properties are conveyed,
transferred or leased, or the corporation resulting from such merger or
consolidation, expressly assumes the payment of the principal (and premium, if
any) and interest on all the Debt Securities and the performance of every
covenant of the Indentures; (ii) no Event of Default, and no event which after
notice of lapse of time, or both, would
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become an Event of Default, shall happen or be continuing upon the occurrence of
such transaction; (iii) the Corporation formed by such consolidation or into
which the Corporation shall have been merged or the Person to which such sale,
lease or other disposition shall have been made is a banking institution or a
bank holding company subject to Federal or State authority; and (iv) the
Corporation delivers to the respective Trustee an Officers' Certificate and an
Opinion of Counsel stating that the consolidation, merger, conveyance, transfer
or lease required in connection with such transaction, and the supplemental
indenture, if any, complies with the Indentures and all conditions precedent
have been complied with.
DEFEASANCE
If so specified in any applicable Prospectus Supplement with respect to the
Offered Debt Securities of any series, the Corporation, at its option, (i) will
be discharged from any and all obligations in respect of the Offered Debt
Securities of such series (except for certain obligations to register the
transfer or exchange of Offered Debt Securities of such series, to replace
stolen, lost or mutilated Offered Debt Securities of such series, to maintain
paying agencies and to hold moneys for payment in trust) or (ii) will not be
subject to provisions of the relevant Indenture concerning limitations upon the
disposition of Voting Stock of Major Constituent Banks, and the consolidation,
merger and sale of assets in each case if the Corporation deposits with the
relevant Trustee, in trust, money or U.S. Government Obligations which through
the payment of interest thereon and principal thereof in accordance with their
terms will provide money in an amount sufficient to pay all the principal,
premium, if any, and interest on the Offered Debt Securities of such series on
the dates such payments are due in accordance with the terms of such Offered
Debt Securities. To exercise either such option, the Corporation is required,
among other things, to deliver to the relevant Trustee an opinion of counsel to
the effect that (1) the Corporation has received from or there has been
published by the United States Internal Revenue Service a ruling to the effect
that the deposit and related defeasance would not cause the Holders of the
Offered Debt Securities of such series to recognize income, gain or loss for
United States income tax purposes and (2) if the Offered Debt Securities of such
series are then listed on any national securities exchange, such Offered Debt
Securities would not be delisted from such exchange as a result of the exercise
of such option. Notwithstanding the foregoing, no discharge or defeasance
described above shall affect the obligations, if applicable, of the Corporation
with respect to the conversion of Debt Securities of a given series into Common
Stock.
NOTICES
Except as otherwise provided in the Indentures, notices to Holders of
Bearer Securities will be given by publication at least twice in a daily
newspaper in The City of New York and, if Debt Securities of such series are
then listed on The Stock Exchange of the United Kingdom and the Republic of
Ireland or the Luxembourg Stock Exchange or any other stock exchange located
outside the United States and such stock exchange shall so require, in a daily
newspaper in London or Luxembourg or any other required city located outside the
United States, as the case may be, or, if not practicable, elsewhere in Europe.
Notices to Holders of Registered Securities will be given by mail to the address
of such Holders as they appear in the Security Register.
GOVERNING LAW
The Indentures, the Offered Securities and the Coupons, if any, will be
governed by, and construed in accordance with, the laws of the State of New
York. A judgment for money damages by courts in the United States, including a
money judgment based on an obligation expressed in a Foreign Currency,
ordinarily will be rendered only in U.S. Dollars.
REGARDING THE TRUSTEES
The Corporation and certain subsidiaries from time to time may borrow from
the Trustees, maintain deposit accounts and conduct other banking transactions
with them in the ordinary course of their business.
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U.S. FEDERAL TAXATION
The Prospectus Supplement will contain a brief summary of the relevant
United States federal income taxation laws applicable to the Offered Debt
Securities.
DESCRIPTION OF CAPITAL STOCK
The following summaries of the Preferred Stock and the Common Stock do not
purport to be complete and are subject to and qualified in their entirety by
reference to the applicable provisions of the Delaware General Corporation Law
and the Company's Restated Certificate of Incorporation, including the
Certificate of Designation describing the Series A Junior Participating
Preferred Stock, and the Corporation's Restated Bylaws.
The authorized capital stock of the Corporation consists of 200,000,000
shares of Common Stock, and 5,000,000 shares of Preferred Stock. As of June 30,
1995, 83,464,258 shares of Common Stock were issued and outstanding and no
shares of Preferred Stock were outstanding. As of December 31, 1994, 2,741,834
shares of Common Stock were reserved for issuance pursuant to employee benefit
plans of the Corporation, and 90,812 were reserved for the conversion of
convertible debentures assumed in connection with a 1988 acquisition by the
Corporation. In addition, 500,000 shares of Preferred Stock designated as Series
A Junior Participating Preferred Stock were reserved for issuance upon the
exercise of certain rights described below under "Stockholders' Rights Plan."
Since the Corporation is a holding company, the right of the Corporation,
and hence the right of creditors and stockholders of the Corporation, to
participate in any distribution of assets of any subsidiary (including
SouthTrust Bank of Alabama, N.A.) upon its liquidation or reorganization or
otherwise necessarily is subject to the prior claims of creditors of the
subsidiary, except to the extent that claims of the Corporation itself as a
creditor of the subsidiary may be recognized.
DESCRIPTION OF PREFERRED STOCK
The following descriptions of the terms of the Preferred Stock sets forth
certain general items and provisions of the Preferred Stock to which any
applicable Prospectus Supplement may relate. The specific terms of any series of
the Preferred Stock offered by any applicable Prospectus Supplement will be
described in any applicable Prospectus Supplement relating to such series of the
Preferred Stock. If so indicated in any applicable Prospectus Supplement, the
terms of any such series may differ from the terms set forth below. The
description of certain provisions of the Preferred Stock set forth below and in
any applicable Prospectus Supplement does not purport to be complete and is
subject to and qualified in its entirety by reference to the Certificate of
Designations relating to each series of the Preferred Stock which will be filed
with the Commission.
General
Under the Corporation's Restated Certificate of Incorporation, the Board of
Directors is authorized without further stockholder action to provide for the
issuance of up to 5,000,000 shares of Preferred Stock, in one or more series, by
adoption of a resolution or resolutions providing for the issuance of such
series and determining the relative rights and preferences of the shares of any
such series with respect to the rate of dividend, call provisions, payments on
liquidation, sinking fund provisions, conversion privileges and voting rights
and whether the shares shall be cumulative, noncumulative or partially
cumulative. The holders of the Preferred Stock would not have any preemptive
right to subscribe for any shares issued by the Corporation. It is not possible
to state the actual effect of the authorization and issuance of Preferred Stock
upon the rights of holders of the Common Stock unless and until the Board of
Directors determines the price and specific rights of the holders of a series of
the Preferred Stock. Such effects might include, however, (i) restrictions on
dividends on the Common Stock if dividends on Preferred Stock have not been
paid; (ii) dilution of the voting power of the Common Stock to the extent that
the Preferred Stock has voting rights, or that any Preferred Stock series is
convertible into Common Stock; (iii) dilution of the equity interest of the
Common Stock
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unless the Preferred Stock is redeemed by the Corporation; and (iv) the Common
Stock not being entitled to share in the Corporation's assets upon liquidation
until satisfaction of any liquidation preference granted the Preferred Stock.
While the ability of the Corporation to issue Preferred Stock is, in the
judgment of the Corporation's Board of Directors, desirable in order to provide
flexibility in connection with possible acquisitions and other corporate
purposes, its issuance could impede an attempt by a third party to acquire a
majority of the outstanding voting stock of the Corporation.
In connection with the adoption of the Stockholder's Rights Plan described
below, the Corporation's Board of Directors designated 500,000 shares of the
Corporation's authorized but unissued Preferred Stock as Series A Junior
Participating Stock (which has been previously referred to as the "Series A
Preferred Stock"). The terms of the Series A Preferred Stock are such that one
share of Series A Preferred Stock will be approximately equivalent in terms of
dividend and voting rights to 100 shares of Common Stock. No shares of Series A
Preferred Stock have been issued as of the date of the Prospectus.
DESCRIPTION OF COMMON STOCK
Dividend Rights
Subject to any prior rights of any Preferred Stock of the Corporation
outstanding, holders of the Common Stock are entitled to dividends when, as and
if declared by the Board of Directors out of funds legally available therefor.
Under Delaware law, the Corporation may pay dividends out of surplus (whether
capital surplus or earned surplus) or net profits for the fiscal year in which
declared or for the preceding fiscal year, even if its surplus accounts are in a
deficit position. The sources of funds for payment of dividends by the
Corporation are its subsidiaries. Because its primary subsidiaries are banks,
payments made by such subsidiaries to the Corporation are limited by law and
regulations of the bank regulatory authorities. See "Regulatory Matters."
Voting Rights and Other Matters
The holders of the Common Stock are entitled to one vote per share on all
matters brought before the stockholders. The holders of the Common Stock do not
have the right to cumulate their shares of Common Stock in the election of
directors. The Restated Certificate of Incorporation of the Corporation provides
that in the event of a transaction or a series of transactions with an
Interested Stockholder (generally defined as a holder of more than 10% of the
voting stock of the Corporation or an affiliate of such a holder) pursuant to
which the Corporation would be merged into or with another corporation or
securities of the Corporation would be issued in a transaction which would
permit control of the Corporation to pass to another entity, or similar
transactions having the same effect, approval of such transactions requires the
vote of the holders of 70% of the voting power of the outstanding voting
securities of the Corporation, except in cases in which either certain price
criteria and procedural requirements are satisfied or the transaction is
recommended to the stockholders by a majority of the members of the Board of
Directors who are unaffiliated with the Interested Stockholder and who were
directors before the Interested Stockholder became an Interested Stockholder.
The Common Stock does not have any conversion rights, nor are there any
redemption or sinking fund provisions applicable thereto. Holders of Common
Stock are not entitled to any preemptive rights.
Liquidation Rights
In the event of liquidation, holders of the Common Stock will be entitled
to receive pro rata any assets distributable to stockholders with respect to the
shares held by them, after payment of indebtedness and such preferential amounts
as may be required to be paid to the holders of any Preferred Stock hereafter
issued by the Corporation.
Provisions With Respect to Board of Directors
The Restated Certificate of Incorporation of the Corporation provides that
the members of the Board of Directors are divided into three classes as nearly
equal in number as possible. Each class is elected for a three-year term. At
each Annual Meeting of Stockholders, roughly one-third of the members of the
Board of
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Directors will be elected for a three-year term. The other directors will remain
in office until their three year terms expire. Therefore, control of the Board
of Directors cannot be changed in one year, and at least two annual meetings
must be held before a majority of the members of the Board of Directors can be
changed.
Special Vote Requirements for Certain Amendments to Restated Certificate of
Incorporation
The General Corporation law of the State of Delaware and the Restated
Certificate of Incorporation and Bylaws of the Corporation provide that a
director, or the entire Board of Directors, may be removed by the stockholders
only for cause. The Restated Certificate of Incorporation and Bylaws of the
Corporation also provide that the affirmative vote of the holders of at least
70% of the voting power of the outstanding capital stock entitled to vote for
the election of directors is required to remove a director or the entire Board
of Directors from office. Certain portions of the Restated Certificate of
Incorporation of the Corporation described in certain of the preceding
paragraphs, including those related to business combinations and the classified
Board of Directors, may be amended only by the affirmative vote of the holders
of 70% of the outstanding voting stock of the Corporation.
Possible Effect of Special Provisions
Certain of the provisions contained in the Restated Certificate of
Incorporation and Bylaws of the Corporation described above have the effect of
making it more difficult to change the Board of Directors, and may make the
Board of Directors less responsive to stockholder control. These provisions also
may tend to discourage attempts by third parties to acquire the Corporation,
and, as a result, may adversely affect the price that a potential purchaser
would be willing to pay for the capital stock of the Corporation, thereby
reducing the amount a stockholder might realize in, for example, a tender offer
for the capital stock of the Corporation.
Stockholders' Rights Plan
On February 22, 1989, the Board of Directors of the Company declared a
dividend to holders of Common Stock of record on March 6, 1989 (the "Record
Date") of one right (a "Right"; collectively, the "Rights") for, and to be
attached to, each share of Common Stock outstanding on the Record Date. Each
Right entitles the holder thereof to purchase from the Company one one-hundredth
of a share of Preferred Stock designated as the Series A Junior Participating
Preferred Stock ("Series A Preferred Stock") at a purchase price of $75.00 (the
"Purchase Price"). Such resolutions also provide that as long as the Rights are
attached to shares of Common Stock as provided in the Rights Agreement referred
to below, the appropriate number of Rights shall be issued with each share of
Common Stock issued after March 6, 1989. The number of Rights attached to or to
be issued with each share of SouthTrust Common Stock as well as the redemption
price for each such Right, were appropriately decreased as a result of a
three-for-two stock split effected by SouthTrust on January 24, 1992, and a
three-for-two stock split effected by SouthTrust on May 19, 1993. Accordingly,
at the present time four-ninths of a Right is attached to each share of
SouthTrust Common Stock.
The Rights will expire on February 22, 1999, unless redeemed earlier, and
will not be exercisable or transferable separately from the shares of Common
Stock until the close of business on the Distribution Date, which will occur on
the earlier of (i) the tenth day following a public announcement that a person
(an "Acquiring Person") or any associate or affiliate of an Acquiring Person has
acquired, or obtained the right to acquire, beneficial ownership of 20% or more
of the outstanding Common Stock (the "Stock Acquisition Date"); or (ii) the
tenth day following commencement of a tender or exchange offer which would
result in the ownership of 20% or more of the outstanding Common Stock; or (iii)
the tenth day after the Board of Directors declares, upon a determination by at
least a majority of the Corporation's independent directors, that a person,
alone or with affiliates and associates (an "Adverse Person"), has become the
beneficial owner of a substantial amount (not to be less than 10%) of
outstanding Common Stock and that such person's ownership either is intended to
cause the Corporation to take action adverse to its long-term interests or may
cause a material adverse impact on the Corporation to the detriment of the
Corporation's Stockholders.
In the event that (i) the Board of Directors determines that a person is an
Adverse Person; (ii) the Corporation is the surviving corporation in a merger
with an Acquiring Person and the Corporation's Common
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<PAGE> 35
Stock remains outstanding and unchanged and is not exchanged for securities of
the Acquiring Person or other property; (iii) an Acquiring Person receives a
financial benefit or advantage, through certain self-dealing transactions
involving the Corporation, greater than that received by other stockholders of
the Corporation or that which would have resulted from arms-length negotiations;
(iv) a person becomes the beneficial owner of 30% or more of the outstanding
Common Stock of the Corporation (except pursuant to a "Fair Offer" as determined
by the independent directors); or (v) while there is an Acquiring Person, an
event involving the Corporation or any of its subsidiaries occurs which results
in the Acquiring Person's proportionate ownership interest being increased by
more than 1%, each holder of a Right will have the right to receive, upon
payment of the Purchase Price, in lieu of Series A Preferred Stock, a number of
shares of Common Stock (or, in certain circumstances, cash or other property)
having a value equal to twice the Purchase Price. Rights are not exercisable
following the occurrence of any of the events set forth in this paragraph until
the expiration of the period during which the Rights may be redeemed by the
Corporation as described below. Notwithstanding the foregoing, after the
occurrence of any of the events set forth in this paragraph, Rights that are
(or, under certain circumstance, Rights that were) beneficially owned by an
Acquiring Person or an Adverse Person will be null and void.
Unless the Rights are redeemed earlier, if, after the Distribution Date,
the Corporation is acquired in a merger or other business combination in which
the Corporation is not the surviving corporation or in which Common Stock is
changed into or exchanged for securities of any other person or other property
(other than a merger which follows a Fair Offer) or 50% or more of the assets or
earning power of the Corporation and its subsidiaries (taken as a whole) are
sold or transferred, the Rights Agreement provides that each holder of record of
a Right will from and after the time have the right to receive, upon payment of
the Purchase Price, that number of shares of common stock of the acquiring
company which has value equal to twice the Purchase Price.
At any time until ten days following the Stock Acquisition Date (subject to
certain provisions requiring action by a majority of the Disinterested
Directors, as defined in the Rights Agreement), the Corporation may redeem the
Rights in whole, but not in part, at a price of $.01 per Right. Prior to the
Distribution Date, the Corporation may, except with respect to the Purchase
Price, redemption price or date of expiration of the Rights, amend the Rights in
any manner. At any time after the Distribution Date, the Corporation may amend
the Rights in any manner that does not adversely affect the interest of holders
of the Rights as such.
The Rights have certain anti-takeover effects and may adversely affect a
third party's attempt to acquire the Corporation. The Rights will cause
substantial dilution to a person or group that attempts to acquire the
Corporation. The Rights should not interfere with any merger or other business
combination approved by the Board of Directors of the Corporation since, among
other things, the Board of Directors may, at its option, under certain
circumstances, redeem all but not less than all of the then outstanding Rights
at $.01 per Right.
The foregoing description of the Rights and the Series A Preferred Stock
does not purport to be complete and is qualified in its entirety by reference to
the Rights Agreement between the Corporation and Mellon Bank, N.A., as Rights
Agent, a copy of which is filed as an exhibit to the Registration Statement of
which this Prospectus forms a part, and the Certificate of Designation for the
Series A Preferred Stock.
Transfer Agent
The transfer agent for the Common Stock is Mellon Securities Trust Company.
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES
In compliance with United States federal tax laws and regulations, Bearer
Securities may not be offered or sold during the restricted period (as defined
in Section 1.163-5(c)(2)(i)(D)(7) of the United States Treasury Regulations,
which is generally the first 40 days after the closing date, and with respect to
unsold allotments, until sold) or delivered in connection with a sale during the
restricted period, directly or indirectly, in the United States or to U.S.
Persons other than to foreign branches of United States financial institutions
(as defined in United States Treasury Regulations Section 1.165-12(c)(1)(v))
purchasing for their own
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account or for resale during the restricted period, which institutions agree in
writing to comply with the requirements of Section 165(j)(3)(A), (B) or (C) of
the Code, and the regulations thereunder. A sale of Bearer Securities may be
made during the restricted period to a United States Person who acquired and
holds the Bearer Security through a foreign branch of the United States
Financial Institution that agrees to comply with the requirements of Section
165(j)(3)(A), (B) or (C) and the regulations thereunder. Any underwriters,
agents and dealers participating in the offering of Debt Securities, directly or
indirectly, must agree that they will not offer or sell, directly or indirectly,
any Bearer Securities in the United States or to U.S. Persons (other than the
financial institutions described above).
Bearer Securities (other than temporary global securities) and any Coupons
which may be detached therefrom will bear a legend substantially to the
following effect: "Any United States Person who holds this obligation will be
subject to limitations under the United States income tax laws, including the
limitations provided in Sections 165(j) and 1287(a) of the Internal Revenue
Code." The sections referred to in such legend provide that a U.S. Person (other
than a United States Financial Institution described above or a U.S. Person
holding through such a financial institution) who holds Bearer Securities or
Coupons appertaining thereto will not be allowed to deduct any loss realized on
Bearer Securities and any gain (which might otherwise be characterized as
capital gain) recognized on any sale or disposition (including the receipt of
principal) of such Bearer Securities will be treated as ordinary income.
Purchasers of Bearer Securities also may be affected by certain limitations
under United States tax laws which will be described in an applicable Prospectus
Supplement.
PLAN OF DISTRIBUTION
The Corporation may sell the Offered Securities being offered hereby to
underwriters or through agents or directly to purchasers. The applicable
Prospectus Supplement will set forth the terms of the offering of the Offered
Securities to which such Prospectus Supplement relates, including the name or
names of any underwriters or agents with whom the Corporation has entered into
arrangements with respect to the sale of such Offered Securities, the public
offering or purchase price of such Offered Securities and the net proceeds to
the Corporation from such sale, any underwriting discounts and other items
constituting underwriters' compensation, any discounts and commissions allowed
or paid to dealers, if any, any commissions allowed or paid to agents, and the
securities exchanges, if any, on which the Offered Securities will be listed.
Dealer trading may take place in the Offered Securities, including Offered
Securities not listed on any securities exchange.
The Offered Securities may be purchased to be re-offered to the public
through underwriting syndicates led by one or more managing underwriters, or
through one or more underwriters. The underwriter or underwriters with respect
to an underwritten offering of the Offered Securities will be named in any
applicable Prospectus Supplement relating to such offering and, if an
underwriting syndicate is used, the managing underwriter or underwriters will be
set forth on the cover page of any applicable Prospectus Supplement. Unless
otherwise set forth in any applicable Prospectus Supplement, the obligations of
the underwriters to purchase the Offered Securities will be subject to certain
conditions precedent, and each of the underwriters with respect to a sale of
Offered Securities will be obligated to purchase all of its allocated Offered
Securities if any are purchased. Any initial public offering price and any
discount or concessions allowed or reallowed or paid to dealers may be changed
from time to time.
Offered Securities may be offered and sold by the Corporation, directly or
through agents designated by the Corporation from time to time, which agents may
be affiliates of the Corporation. Any agent involved in the offer and sale of
the Offered Securities in respect of which this Prospectus is being delivered
will be named, and any commissions payable by the Corporation to such agent will
be set forth, in any applicable Prospectus Supplement. Unless otherwise
indicated in any applicable Prospectus Supplement, any such agent will be acting
on a reasonable effort basis for the period of its appointment.
If so indicated in the applicable Prospectus Supplement, the Corporation
may authorize underwriters, dealers or agents to solicit offers by certain
institutions to purchase Offered Securities from the Corporation at
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<PAGE> 37
the public offering price set forth in such Prospectus Supplement pursuant to
delayed delivery contracts ("Delayed Delivery Contracts") providing for payment
and delivery on the date or dates stated in the Prospectus Supplement. Each
Delayed Delivery Contract will be for an amount of Offered Securities not less
than and, unless the Corporation otherwise agrees, the aggregate amount of
Offered Securities sold pursuant to Delayed Delivery Contracts shall be not more
than the respective minimum and maximum amounts stated in the Prospectus
Supplement. Institutions with which Delayed Delivery Contracts, when authorized,
may be made include commercial and savings banks, insurance companies, pension
funds, investment companies and educational and charitable institutions, but
shall in all cases be subject to the approval of the Corporation in its sole
discretion. The obligations of the purchaser under any Delayed Delivery Contract
to pay for and take delivery of Offered Securities will not be subject to any
conditions except that (i) the purchase of Offered Securities by such
institution shall not at the time of delivery be prohibited under the laws of
the jurisdiction to which such institution is subject; and (ii) any related sale
of Offered Securities to underwriters shall have occurred. A commission set
forth in the Prospectus Supplement will be paid to underwriters soliciting
purchases of Offered Securities pursuant to Delayed Delivery Contracts accepted
by the Corporation. The underwriters will not have any responsibility in respect
of the validity of performance of Delayed Delivery Contracts.
The Debt Securities and Preferred Stock will be new issues of securities
with no established trading market. Any underwriters to whom such Debt
Securities or Preferred Stock are sold by the Company for public offering and
sale may make a market in such Debt Securities or Preferred Stock, but such
underwriters will not be 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 any Offered Securities.
Any underwriter or agent participating in the distribution of the Offered
Securities may be deemed to be an underwriter, as that term is defined in the
Securities Act, of the Offered Securities so offered and sold and any discounts
or commissions received by them from the Corporation and any profit realized by
them on the sale or resale of the Offered Securities may be deemed to be
underwriting discounts and commissions under the Securities Act or to the
contribution with respect to payments which the underwriters or agents may be
required to make in respect thereof.
Underwriters, agents and their controlling persons may be entitled, under
agreements entered into with the Corporation, to indemnification by the
Corporation against certain civil liabilities, including liabilities under the
Securities Act or to contribution with respect to payments which the
underwriters or agents may be required to make in respect thereof.
LEGAL OPINIONS
The legality of the Offered Securities being offered hereby will be passed
upon for the Corporation by Bradley, Arant, Rose & White, Birmingham, Alabama,
and, for the underwriters by Stroock & Stroock & Lavan, New York, New York. As
of June 30, 1995, the partners and associates of Bradley, Arant, Rose & White
beneficially owned approximately 1,600,000 shares of Common Stock of the
Corporation.
EXPERTS
The consolidated financial statements of the Corporation and its
subsidiaries incorporated by reference in this Prospectus and elsewhere in this
Registration Statement have been audited by Arthur Andersen LLP, independent
public accountants, for the periods indicated in their reports thereon and have
been incorporated herein by reference in reliance upon the authority of said
firm as experts in giving said reports.
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NO DEALER, SALESMAN 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.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
PROSPECTUS SUPPLEMENT
SouthTrust Corporation................ S-3
Use of Proceeds....................... S-3
Capitalization........................ S-4
Market Price and Dividends............ S-5
Selected Financial Data............... S-6
Management's Discussion and
Analysis............................ S-7
Underwriting.......................... S-13
Legal Opinions........................ S-14
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........ 7
Description of Capital Stock.......... 18
Limitations on Issuance of
Bearer Securities................... 21
Plan of Distribution.................. 22
Legal Opinions........................ 23
Experts............................... 23
</TABLE>
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3,500,000 SHARES
(SOUTHTRUST CORPORATION LOGO)
COMMON STOCK
(PAR VALUE $2.50 PER SHARE)
------------------------------
PROSPECTUS SUPPLEMENT
------------------------------
MERRILL LYNCH & CO.
CS FIRST BOSTON
DEAN WITTER REYNOLDS INC.
J. C. BRADFORD & CO.
INTERSTATE/JOHNSON LANE
CORPORATION
September 26, 1995
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