UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): July 29, 1994
SOUTHERN NATIONAL CORPORATION
(Exact name of as specified in charter)
North Carolina 0-4641 56-0939887
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
200 West 2nd Street Winston-Salem, NC 27101-4036
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 919-773-7200
ITEM 5. OTHER EVENTS
On August 1, 1994, the Registrant and BB&T Financial
Corporation of Wilson, North Carolina jointly announced the
signing of a definitive agreement of merger. The merger of
equals, unanimously approved on July 29, 1994 by the Boards of
Directors of both companies, will be accomplished through a
merger to be accounted for as a pooling-of-interests. Included
as Exhibit 99 is the joint press release.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits:
The Exhibits listed in the Exhibit Index are filed as
part of this Current Report on Form 8-K.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned hereunto duly authorized.
SOUTHERN NATIONAL CORPORATION
(Registrant)
By:
Sherry A. Kellett, Controller
Date: August 8, 1993
EXHIBIT INDEX
Sequential
Exhibit Page No.
99 Press Release dated August 1, 1994
EXHIBIT 99
[BB&T LOGO HERE] [SOUTHERN NATIONAL LOGO HERE]
News Release
Media and Analyst Contacts:
BB&T Southern National
B. Gloyden Stewart, Jr. Bob Denham
(919) 399-4219 (910) 773-7363
Scott E. Reed John R. Spruill
(919) 399-4418 (910) 773-7221
FOR IMMEDIATE RELEASE
BB&T Financial Corporation and Southern National Corporation
Agree to Merger of Equals Creating the 6th Largest Banking
Institution in the Southeast
(August 1, 1994) - BB&T Financial Corporation (NASDAQ: BBTF)
and Southern National Corporation (NYSE: SNB), two of the
Southeast's highest performing banking companies, today jointly
announced the signing of a definitive agreement of merger.
This in-market "merger of equals" will create a financial
institution with more than $18 billion in assets and $2.2 billion
in market capitalization, making the combined franchise the 6th
largest bank in the Southeast and the 35th largest bank in the
United States. Based on deposit market share, this new company
will be the largest bank in its home market of North Carolina and
will be the third largest bank in South Carolina.
The merger of equals, unanimously approved on Friday by the
boards of directors of both companies, will be accomplished
through a merger to be accounted for as a pooling of interests in
which BB&T shareholders will receive 1.45 shares of common stock
of the resulting company of each share of BB&T common stock.
Southern National shareholders will receive 1.00 share of common
stock of the resulting company for each share of Southern
National common stock. The transaction will be structured as a
tax-free exchange. The combined company will have approximately
103 million shares outstanding after taking into account pending
acquisitions.
The merger transaction has an indicated total value of $2.2
billion based on the Friday, July 29, BB&T common stock closing
price of $31.00 per share and the Southern National closing price
of $21.13 per share. BB&T and Southern National have granted
each other options to purchase up to 19.9 percent of the
currently outstanding shares of each other's common stock to be
exercisable under certain conditions. The merged organization
will be called Southern National Corporation and will be
headquartered in Winston-Salem, North Carolina. The lead bank
for the new company and all other subsidiary banks and their
respective offices will carry the name Branch Banking and Trust
Company, BB&T's present name for its lead bank and banking
offices.
BB&T, the oldest bank in North Carolina, was founded in
1872, and Southern National was founded in 1897, both in eastern
North Carolina. During the last decade, they have each expanded
throughout the Carolinas to build strong market presence while
achieving excellent financial results.
John A. Allison IV, 45, BB&T's chairman and chief executive
officer, will be the new institution's chairman and chief
executive officer. He will lead an eight member executive
management team comprised of four senior managers from each
company. L. Glenn Orr, Jr., 54, Southern National's chairman and
chief executive officer, will retire upon consummation of the
merger, but continue as a director of the new company and a
member of the board's executive committee. The new board of
directors will be comprised of 22 individuals, eleven members
each from BB&T and Southern National.
"We are bringing together two high performing and
well-managed institutions that are compatible strategically,
geographically and culturally," said Mr. Orr. "Both partners
already have solid capital positions, excellent credit quality
and strong branch office networks which complement each other
very well. Adding all of the well-recognized benefits of in-
market mergers to this foundation creates the opportunity to
jointly build a banking institution which is stronger and more
competitive than either institution can be on a stand-alone
basis. I have a tremendous amount of respect for the success
John Allison and his team have achieved at BB&T over the years
and have utmost confidence in his ability to lead the new
institution to record growth and profits through the 1990's and
beyond."
"With the advent of nationwide interstate banking in North
Carolina, we expect the competitive environment in our home
markets to intensify over the next several years," said
Mr. Allison. "This merger permits us both to double our assets,
market capitalization and market power without any earnings
dilution and management disruption. It would be difficult for
either BB&T or Southern National alone to achieve the financial
and operating benefits available to the new merged company."
"I look forward to working closely with all members of the
new executive management team as well as the many other fine
employees of both companies to create an even more profitable
franchise for our collective base of shareholders," Mr. Allison
continued. "In particular, I am extremely grateful to Glenn Orr
for his vision and foresight in initiating discussions, his
cooperation and hard work in structuring the terms of the
merger, and his assistance and support in facilitating a smooth
transition. I look forward to Glenn's active participation on
our board of directors and his continued guidance in helping
us to maximize our potential as a premier super-regional banking
institution."
The new Southern National will be among the largest banks in
the Southeast and the combined franchise will be the leader in
many of the fastest growing markets in North Carolina and South
Carolina. In addition, BB&T's recently announced acquisition of
Commerce Bank in Virginia Beach, Virginia creates a strong
foundation in the southeastern part of that state on which to
build in the future. The strategic focus of the new company
will mirror that of both BB&T and Southern National - to
effectively meet with superior quality all the financial needs of
a growing base of consumer depositors and borrowers, small
business owners and middle-market companies within the North
Carolina, South Carolina and Virginia markets.
As a result of operating efficiencies created from the
merger, including the elimination of approximately 70 of the new
company's combined 535 branch offices, annualized pretax cost
savings in excess of $50 million are expected to be fully
realized within one year of consummation of the merger. Major
cost savings initiatives include the elimination of overlapping
positions, the complete integration of all back office functions
and operations, consolidation of selected branch offices, and all
the other overhead benefits of operating through a single bank
holding company.
"Although we intend to make firm cuts in our operating
expenses quickly and efficiently, there are significant long-term
opportunities for our employees, customers and communities - as
well as for our shareholders," said Mr. Allison. "This merger is
good for Winston-Salem because it will strengthen its position as
a financial center in the Southeast, and as the banking industry
continues its rapid pace of consolidation, North Carolina and
South Carolina will benefit because two well-established local
banking institutions are taking control of their own destiny."
Both Mr. Orr and Mr. Allison emphasized that this merger is not a
sale of either company, but rather the most effective way for
each of them to continue their strategies to maximum the
long-term franchise value of both companies.
Commenting on his decision to retire, Mr. Orr said, "This is
the best way to ensure the full benefits of consolidation are
realized as rapidly as possible. After analyzing past
transactions of this nature, I concluded that sharing management
control for a period of time helps to perpetuate an atmosphere of
separate banks and creates confusion among employees, thereby
slowing the combined institution's ability to achieve maximum
value for its shareholders as soon as possible. I have full
confidence in John's ability to effectively implement the
integration plan which we are designing together and look forward
to monitoring the new Southern National's profitability and
soundness as a member of the board."
The merger is expected to be completed by the end of the
second quarter of 1995 and will be subject to approval by the
shareholders of both companies as well as by federal and state
bank regulatory authorities.
The new company's common and preferred stock will be listed
on the New York Stock Exchange under the symbol SNB, Southern
National's current listing, and is expected to pay an initial
annual dividend of $0.80.
Lehman Brothers provided investment banking advisory
services and a fairness opinion on the exchange ratio to both
BB&T and Southern National in connection with the transaction.
In addition, BB&T received a separate fairness opinion on the
exchange ration from Merrill Lynch & Co., and Southern National
received a separate fairness opinion on the exchange ratio from
Wheat First Butcher Singer.
SELECTED PRO FORMA INFORMATION
As of/For the Six Months Ended June 30, 1994
($ in thousands)
Southern
BB&T* National Combined
Securities $2,680,825 $2,627,244 $5,308,069
Loans 7,101,201 5,098,647 12,199,848
Total Assets 10,570,538 8,236,362 18,806,900
Total Deposits 8,058,865 6,228,803 14,287,668
Shareholders' equity 850,697 593,867 1,444,564
Net Income 58,981 52,931 111,912
ROA 1.13% 1.31% 1.21%
ROE 14.11 18.24 15.85
Equity to assets 8.05 7.21 7.68
Offices 304 231 535
Cities 159 116 275
Shareholders 23,673 20,048 43,721
FTE employees 4,930 3,808 8,738
* Includes Commerce Bank
