<PAGE>
UNITED STATES SECURITIES
AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 11-K
(Mark One)
[X] Annual Report Pursuant to Section 15(d) of the Securities Exchange
Act of 1934 [Fee Required]
For the fiscal year ended December 31, 1994
[ ] Transition Report Pursuant to Section 15(d) of the Securities Exchange
Act of 1934 [No Fee Required]
For the transition period from Commission File Number
to 1-10853
A. SAVINGS AND THRIFT PLAN FOR THE EMPLOYEES OF
BRANCH BANKING AND TRUST COMPANY
B. Southern National Corporation
200 West Second Street
Winston-Salem, North Carolina 27101
REQUIRED INFORMATION
1. Audited financial statements of the plan as of December 31, 1994 and 1993
and each of the years in the three-year period ended December 31, 1994,
prepared in accordance with the requirements of ERISA.
<PAGE>
SIGNATURES
The Plan. Pursuant to the requirements of the Securities Exchange Act of
1934, the trustees (or other persons who administer the employee benefit plan)
have duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
Savings and Thrift Plan for the Employees
of Branch Banking and Trust Company
------------------------------------
(Name of Plan)
Branch Banking and Trust Company, Trustee
by Lottie Kay, Senior Vice President
------------------------------------
(Signature)
Date June 30, 1995
---------------------------
<PAGE>
[LOGO OF KPMG APPEARS HERE]
SAVINGS AND THRIFT PLAN FOR THE
EMPLOYEES OF BRANCH BANKING AND
TRUST COMPANY
Financial statements and Schedules
December 31, 1994 and 1993
(with Independent Auditors' Report Thereon)
<PAGE>
[LETTERHEAD OF KPMG PEAT MARWICK LLP APPEARS HERE]
INDEPENDENT AUDITORS' REPORT
The Savings and Thrift Plan Committee
Branch Banking and Trust Company:
We have audited the accompanying statements of net assets available for plan
benefits of the Savings and Thrift Plan for the Employees of Branch Banking and
Trust Company (the "Plan") as of December 31, 1994 and 1993, and the related
statements of changes in net assets available for plan benefits for each of the
years in the three-year period ended December 31, 1994. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits of the Plan at
December 31, 1994 and 1993 and changes in net assets available for plan benefits
for each of the years in the three-year period ended December 31, 1994, in
conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplementary schedules of assets
held for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The fund information in the
statement of net assets available for plan benefits and the statement of changes
in net assets available for plan benefits is presented for purposes of
additional analysis rather than to present the net assets available for plan
benefits and changes in net assets available for plan benefits of each fund. The
supplemental schedules and fund information have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
KPMG Peat Marwick LLP
May 2, 1995
<PAGE>
SAVINGS AND THRIFT PLAN FOR THE EMPLOYEES
OF BRANCH BANKING AND TRUST COMPANY
Statements of Net Assets Available for Plan Benefits, with Fund Information
December 31, 1994 and 1993
<TABLE>
<CAPTION>
1994
---------------------------------------------------------------------------------------
BB&T
Financial
Money Fixed Corporation Bank
market income Equity common stock investment
fund fund fund fund contracts
---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Assets:
Investments at fair value (note 8):
Common stock (notes 10 and 11) $ - - - 58,888,284 -
Mutual funds - 4,042,294 6,307,322 - -
5-year bank investment contracts - - - - 3,813,747
BB&T U.S. Treasury Money
Market Fund 12,203,492 48,207 310,974 140,800 -
------------ --------- --------- ---------- ---------
12,203,492 4,090,501 6,618,296 59,029,084 3,813,747
Investments at cost:
Participant loans (note 5) 1,094,600 221,378 132,111 1,092,546 131,590
------------ --------- --------- ---------- ---------
Total investments 13,298,092 4,311,879 6,750,407 60,121,630 3,945,337
------------ --------- --------- ---------- ---------
Cash on deposit at Branch
Banking and Trust Company - - - - -
Accrued interest receivable 42,176 22,174 169,722 195 18,571
Due from (to) other funds (283,454) 43,375 75,573 164,506 -
----------- --------- --------- ---------- ---------
Total assets 13,056,814 4,377,428 6,995,702 60,286,331 3,963,908
----------- --------- --------- ---------- ---------
Notes payable (note 10) - - - - -
Due to plan sponsor 4,853 1,700 2,805 21,216 1,507
----------- --------- --------- ---------- ---------
Total liabilities 4,853 1,700 2,805 21,216 1,507
----------- --------- --------- ---------- ---------
Net assets available for plan benefits $ 13,051,961 4,375,728 6,992,897 60,265,115 3,962,401
========== ========= ========= ========== =========
</TABLE>
<TABLE>
<CAPTION>
ESOP
----------------------------
Allocated Unallocated Total
--------- ----------- -----
<S> <C> <C> <C>
Assets:
Investments at fair value (note 8):
Common stock (notes 10 and 11) 2,112,540 4,791,672 65,792,496
Mutual funds - - 10,349,616
5-year bank investment contracts - - 3,813,747
BB&T U.S. Treasury Money
Market Fund - - 12,703,473
--------- ---------- -----------
2,112,540 4,791,672 92,659,332
Investments at cost:
Participant loans (note 5) - - 2,672,225
--------- --------- ----------
Total investments 2,112,540 4,791,672 95,331,557
--------- --------- ----------
Cash on deposit at Branch
Banking and Trust Company 3,164 22 3,186
Accrued interest receivable - - 252,838
Due from (to) other funds - - -
--------- --------- ----------
Total assets 2,115,704 4,791,694 95,587,581
--------- --------- ----------
Notes payable (note 10) - 3,264,551 3,264,551
Due to plan sponsor - - 32,081
--------- --------- ----------
Total liabilities - 3,264,551 3,296,632
--------- --------- ----------
Net assets available for plan benefits 2,115,704 1,527,143 92,290,949
========= ========= ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SAVINGS AND THRIFT PLAN FOR THE EMPLOYEES
OF BRANCH BANKING AND TRUST COMPANY
Statements of Net Assets Available for Plan Benefits,
with Fund Information, Continued
December 31, 1994 and 1993
<TABLE>
<CAPTION>
1993
---------------------------------------------------------------------------------------
BB&T
Financial
Money Fixed Corporation Bank
market income Equity common stock investment
fund fund fund fund contracts
---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Assets:
Investments at fair value (note 8):
Common stock (notes 10 and 11) $ - - - 58,939,216 -
Mutual funds - 4,112,114 4,957,622 - -
5-year bank investment contracts - - - - 3,512,683
BB&T U.S. Treasury Money
Market Fund 11,847,960 50,162 131,798 71,526 -
------------ --------- --------- ---------- ---------
11,847,960 4,162,276 5,089,420 59,010,742 3,512,683
Investments at cost:
Participant loans (note 5) 805,663 109,051 84,958 682,212 75,189
------------ --------- --------- ---------- ---------
Total investments 12,653,623 4,271,327 5,174,378 59,692,954 3,587,872
------------ --------- --------- ---------- ---------
Cash on deposit at Branch
Banking and Trust Company - 20 96 95 188
Accrued interest receivable 25,274 21,174 55,085 85 22,152
Due from (to) other funds (69,003) 23,017 23,017 22,969 -
----------- --------- --------- ---------- ---------
Total assets 12,609,894 4,315,538 5,252,576 59,716,103 3,610,212
----------- --------- --------- ---------- ---------
Notes payable (note 10) - - - - -
Due to plan sponsor 872 306 374 21,721 1,294
Other liabilities - - - - -
----------- --------- --------- ---------- ---------
Total liabilities 872 306 374 21,721 1,294
----------- --------- --------- ---------- ---------
Net assets available for plan benefits $ 12,609,022 4,315,232 5,252,202 59,694,382 3,608,918
========== ========= ========= ========== =========
</TABLE>
<TABLE>
<CAPTION>
ESOP
----------------------------
Allocated Unallocated Total
--------- ----------- -----
<S> <C> <C> <C>
Assets:
Investments at fair value (note 8):
Common stock (notes 10 and 11) 1,387,631 6,895,600 67,222,447
Mutual funds - - 9,069,736
5-year bank investment contracts - - 3,512,683
BB&T U.S. Treasury Money
Market Fund - - 12,101,446
--------- ---------- -----------
1,387,631 6,895,600 91,906,312
Investments at cost:
Participant loans (note 5) - - 1,757,073
--------- --------- ----------
Total investments 1,387,631 6,895,600 93,663,385
--------- --------- ----------
Cash on deposit at Branch
Banking and Trust Company 53 4 456
Accrued interest receivable - - 123,770
Due from (to) other funds - - -
--------- --------- ----------
Total assets 1,387,684 6,895,604 93,787,611
--------- --------- ----------
Notes payable (note 10) - 4,419,219 4,419,219
Due to plan sponsor - - 24,567
Other liabilities - - -
--------- --------- ----------
Total liabilities - 4,419,219 4,443,786
--------- --------- ----------
Net assets available for plan benefits 1,387,684 2,476,385 89,343,825
========= ========= ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SAVINGS AND THRIFT PLAN FOR THE EMPLOYEES
OF BRANCH BANKING AND TRUST COMPANY
Statements of Changes in Net Assets Available for Plan Benefits, with Fund
Information
For the years ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
1994
-------------------------------------------------------------------
BB&T
Financial
Money Fixed Corporation Bank
market income Equity common stock investment
fund fund fund fund contracts
---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income (loss):
Dividends (note 11) $ - - - 2,155,623 -
Interest 430,923 676,112 805,959 89,062 241,934
Net appreciation (depreciation) in
value of investments (note 8) - (477,772) (337,837) (9,264,522) -
Other 100 - - - -
------------ --------- --------- ---------- ---------
Total investment income (loss) 431,023 198,340 468,122 (7,019,837) 241,934
------------ --------- --------- ---------- ---------
Contributions (note 3):
Employer 379,987 225,733 371,640 2,065,026 97,069
Employees 1,681,883 476,806 750,939 4,498,725 599,603
Merged entities 149,300 - 191,779 - -
------------ --------- --------- ---------- ---------
Total contributions 2,211,170 702,539 1,314,358 6,563,751 696,672
------------ --------- --------- ---------- ---------
Allocation of 40,137 shares of BB&T
Financial Corp. common stock - - - - -
----------- --------- ---------- ---------- --------
Total additions 2,618,181 891,214 1,772,759 (542,685) 932,823
----------- --------- ---------- ---------- --------
Deductions from net assets attributed to:
Withdrawals (note 6) (502,933) (200,180) (333,828) (1,242,255) (123,636)
Administrative expenses (note 11) (26,862) (9,965) (14,165) (179,518) (11,878)
Interest expense - - - - -
Allocation of 40,137 shares of BB&T
Financial Corp. common stock - - - - -
Net transfers of assets among funds (1,669,459) (630,238) 306,208 2,448,592 (449,609)
Net assets available for plan benefits:
Beginning of year 12,609,022 4,315,232 5,252,202 59,694,382 3,608,918
---------- --------- --------- ---------- ---------
End of year $ 13,335,415 4,332,353 6,917,324 60,100,609 3,962,401
========== ========= ========= ========== =========
<CAPTION>
1994
-------------------------------
ESOP
----------------------
Allocated Unallocated Total
--------- ----------- -----
<S> <C> <C> <C>
Additions to net assets attributed to:
Investment income (loss):
Dividends (note 11) $ 87,543 191,667 2,434,833
Interest - - 2,243,990
Net appreciation (depreciation) in
value of investments (note 8) 28,107 (1,229,113) (11,281,137)
Other 14,688 13,305 28,093
--------- --------- ----------
Total investment income (loss) 130,338 (1,024,141) (6,574,221)
--------- --------- ----------
Contributions (note 3):
Employer - 1,463,500 4,602,955
Employees - - 8,007,956
Merged entities - - 341,079
--------- --------- ----------
Total contributions - 1,463,500 12,951,990
--------- --------- ----------
Allocation of 40,137 shares of BB&T
Financial Corp. common stock 887,463 - 887,463
--------- --------- ----------
Total additions 1,017,801 439,359 7,265,232
--------- --------- ----------
Deductions from net assets attributed to:
Withdrawals (note 6) (269,599) (143,533) (2,815,964)
Administrative expenses (note 11) (14,688) (13,305) (270,381)
Interest expense - (344,300) (344,300)
Allocation of 40,137 shares of BB&T
Financial Corp. common stock - (887,463) (887,463)
Net transfers of assets among funds (5,494) - -
Net assets available for plan benefits:
Beginning of year 1,387,684 2,476,385 89,343,825
--------- --------- ----------
End of year $ 2,115,704 1,527,143 92,290,949
========= ========= ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SAVINGS AND THRIFT PLAN FOR THE EMPLOYEES
OF BRANCH BANKING AND TRUST COMPANY
Statements of Changes in Net Assets Available for Plan Benefits, with Fund
Information, Continued
For the years ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
1993
---------------------------------------------------------------------------------------
BB&T
Financial
Money Fixed Corporation Bank
market income Equity common stock investment
fund fund fund fund contracts
---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income (loss):
Dividends (note 11) $ - - - 1,654,300 -
Interest 347,146 12,132 55,021 68,843 258,111
Net appreciation in value of
investments (note 8) - 107,163 261,507 2,634,745 -
Other - - - - -
------------ --------- --------- ---------- ---------
Total investment income 347,146 119,295 316,528 4,357,888 258,111
------------ --------- --------- ---------- ---------
Contributions (note 3):
Employer 379,301 180,971 231,426 1,783,762 96,090
Employees 1,359,339 314,869 446,373 3,331,219 177,128
Merged entities 2,368,873 - - - -
------------ --------- --------- ---------- ---------
Total contributions 4,125,513 495,840 677,799 5,114,981 273,218
------------ --------- --------- ---------- ---------
Allocation of 31,873 shares of BB&T
Financial Corp. common stock - - - - -
----------- --------- ---------- ---------- --------
Total additions 4,472,659 615,135 994,327 9,472,869 531,329
----------- --------- ---------- ---------- --------
Deductions from net assets attributed to:
Withdrawals (note 6) (670,021) (75,133) (129,682) (806,487) (46,481)
Administrative expenses (note 11) (39,142) (11,694) (13,291) (147,528) (12,084)
Interest expense - - - - -
Allocation of 31,873 shares of BB&T
Financial Corp. common stock - - - - -
Net transfers of assets among funds (3,928,567) 328,963 622,472 3,132,499 (155,367)
Net assets available for plan benefits:
Beginning of year 12,774,093 3,457,961 3,778,376 48,043,029 3,291,521
----------- --------- --------- ---------- ---------
End of year $ 12,609,022 4,315,232 5,252,202 59,694,382 3,608,918
=========== ========= ========= ========== =========
<CAPTION>
ESOP
----------------------------
Allocated Unallocated Total
--------- ----------- -----
<S> <C> <C> <C>
Additions to net assets attributed to:
Investment income (loss):
Dividends (note 11) $ 43,620 169,628 1,867,548
Interest - - 741,253
Net appreciation in value of
investments (note 8) 422,104 29,416 3,454,935
Other 4,431 7,784 12,215
--------- ---------- -----------
Total investment income 470,155 206,828 6,075,951
--------- ----------- -----------
Contributions (note 3):
Employer - 1,141,228 3,830,778
Employees - - 5,628,928
Merged entities - - 2,368,873
--------- --------- ----------
Total contributions - 1,141,228 11,828,579
--------- --------- ----------
Allocation of 31,873 shares of BB&T
Financial Corp. common stock 675,075 - 675,075
---------- --------- ---------
Total additions 1,145,230 1,348,056 18,579,605
---------- --------- ---------
Deductions from net assets attributed to:
Withdrawals (note 6) (124,205) (184,572) (2,036,581)
Administrative expenses (note 11) (7,870) (7,784) (239,393)
Interest expense - (308,632) (308,632)
Allocation of 31,873 shares of BB&T
Financial Corp. common stock - (675,075) (675,075)
Net transfers of assets among funds - - -
Net assets available for plan benefits:
Beginning of year 374,529 2,304,392 74,023,901
--------- --------- ----------
End of year $ 1,387,684 2,476,385 89,343,825
========= ========= ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
SAVINGS AND THRIFT PLAN FOR THE EMPLOYEES
OF BRANCH BANKING AND TRUST COMPANY
Statements of Changes in Net Assets Available for Plan Benefits, with Fund
Information, Continued
For the years ended December 31, 1994, 1993 and 1992
<TABLE>
<CAPTION>
1992
---------------------------------------------------------------------------------------
BB&T
Financial
Money Fixed Corporation Bank
market income Equity common stock investment
fund fund fund fund contracts
---- ---- ---- ---- --------
<S> <C> <C> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Dividends (note 11) $ - - - 1,246,425 -
Interest 459,883 26,268 15,077 42,449 219,901
Net appreciation in value of
investments (note 8) - 159,458 177,964 13,449,718 -
Other - - - 600 -
------------ --------- --------- ---------- ---------
Total investment income 459,883 185,726 193,041 14,739,192 219,901
Contributions (note 3):
Employer 467,686 148,136 188,844 1,317,197 84,840
Employees 1,926,557 267,845 386,515 2,666,480 182,644
Merged entities 2,824,562 - - 57,550 -
------------ --------- --------- ---------- ---------
Total contributions 5,218,805 415,981 575,359 4,041,227 267,484
------------ --------- --------- ---------- ---------
Allocation of 10,654 shares of BB&T
Financial Corp. common stock - - - - -
----------- --------- ---------- ---------- --------
Total additions 5,678,688 601,707 768,400 18,780,419 487,385
----------- --------- ---------- ---------- --------
Deductions from net assets attributed to:
Withdrawals (note 6) (572,237) (326,924) (164,635) (1,279,385) (56,002)
Administrative expenses (note 11) (24,902) (5,082) (5,801) (71,067) (5,687)
Interest expense - - - - -
Allocation of 10,654 shares of BB&T
Financial Corp. common stock - - - - -
Net transfers of assets among funds (4,032,966) 424,131 414,231 2,667,228 535,279
Net assets available for plan benefits:
Beginning of year 11,725,510 2,764,129 2,766,181 27,945,834 2,330,546
----------- --------- --------- ---------- ---------
End of year $12,774,093 3,457,961 3,778,376 48,043,029 3,291,521
=========== ========= ========= ========== =========
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
ESOP
----------------------------
Allocated Unallocated Total
--------- ----------- -----
<S> <C> <C> <C>
Additions to net assets attributed to:
Investment income:
Dividends (note 11) 10,792 138,342 1,395,559
Interest - - 763,578
Net appreciation in value of
investments (note 8) 136,404 1,514,437 15,437,981
Other 3,273 24,558 28,431
--------- ---------- -----------
Total investment income 150,469 1,677,337 17,625,549
--------- ----------- -----------
Contributions (note 3):
Employer - 847,755 3,054,458
Employees - - 5,430,041
Merged entities - - 2,882,112
--------- --------- ----------
Total contributions - 847,755 11,366,611
--------- --------- ----------
Allocation of 10,654 shares of BB&T
Financial Corp. common stock 216,566 - 216,566
---------- --------- ---------
Total additions 367,035 2,525,092 29,208,726
---------- --------- ---------
Deductions from net assets attributed to:
Withdrawals (note 6) (14,983) (156,514) (2,570,680)
Administrative expenses (note 11) (2,754) (6,397) (121,690)
Interest expense - (280,527) (280,527)
Allocation of 10,654 shares of BB&T
Financial Corp. common stock - (216,566) (216,566)
Net transfers of assets among funds (7,903) - -
Net assets available for plan benefits:
Beginning of year 33,134 439,304 48,004,638
--------- --------- ----------
End of year 374,529 2,304,392 74,023,901
========= ========= ==========
</TABLE>
<PAGE>
SAVINGS AND THRIFT PLAN FOR THE EMPLOYEES
OF BRANCH BANKING AND TRUST COMPANY
Notes to Financial Statements
December 31, 1994 and 1993
(1) Formation of the Plan and Summary of Significant Accounting Principles
----------------------------------------------------------------------
(a) Formation of the Plan
---------------------
The Savings and Thrift Plan for the Employees of Branch Banking and Trust
Company (the "Plan") is sponsored by Branch Banking and Trust Company (the
"Bank"). The Plan was established July 1, 1982 for the purpose of promoting
the future economic welfare of the Bank's employees.
The Employee Stock Ownership Plan ("ESOP") is sponsored by the Bank's
parent, BB&T Financial Corporation ("BB&T"). ESOPs were established in 1991
as leveraged plans for the employees of the Gate City Federal Savings and
Loan Association and the Albemarle Savings and Loan Association, both of
which were acquired by BB&T during 1991. An ESOP was also established in
1992 as a leveraged plan for the employee of Peoples Federal Savings and
Loan Association. During 1993, ESOPs were established as leveraged plans
for the employees of Carolina Savings Bank. Edenton Savings and Loan
Association, Mutual Savings Bank of Rockingham, and Citizens of
Mooresville, all of which were acquired BB&T in 1993. The ESOP is a
separate fund of the Plan and is only for the employees of these acquired
institutions.
(b) Basis of Presentation
---------------------
The accompanying financial statements have been prepared on the accrual
basis of accounting.
The ESOP purchased BB&T common shares using the proceeds of notes payable
to BB&T (see note 10), and holds the stock in a trust established under the
Plan. The notes are to be repaid over a period of five years by Bank
contributions to the trust fund. As the ESOP makes each payment of
principal, an appropriate percentage of stock will be allocated to eligible
employees' accounts in accordance with applicable regulations under the
Internal Revenue Code. Shares vest fully upon allocation.
The notes are collateralized by the unallocated shares of stock and are
guaranteed by the Bank. BB&T Financial Corporation has no rights against
shares once they are allocated under the ESOP. Accordingly, the financial
statements of the Plan present separately the assets and liabilities and
changes therein pertaining to:
(a) the accounts of employees with vested rights in allocated stock
(Allocated), and
(b) stock not yet allocated to employees (Unallocated).
(c) Investments in Securities
-------------------------
Investments in securities are stated at fair value. The fair value of
marketable securities is based on published quotations obtained from
national securities exchanges. Investments in mutual funds are valued at
fair value based on quoted market prices of the underlying fund securities.
Bank investment contracts are stated at contract value.
Securities transactions are recorded on the trade date. Dividend income is
recorded on the ex-dividend date.
<PAGE>
SAVINGS AND THRIFT PLAN FOR THE EMPLOYEES
OF BRANCH BANKING AND TRUST COMPANY
Notes to Financial Statements, Continued
(1) Formation of the Plan and Summary of Significant Accounting Principles,
-----------------------------------------------------------------------
Continued
---------
(d) Investments in Participant Loans
--------------------------------
Investments in participant loans are stated at cost. Adjustments necessary
to reflect the fair value of the loans would not be material to the
financial statements.
(e) Accounting Developments
-----------------------
The AICPA has issued Statement of Position (SOP) 94-4, Reporting of
Investment Contracts Held by Health and Welfare Benefit Plans and Defined-
Contribution Pension Plans. The SOP specifies the accounting for health and
welfare benefit plans and defined-contribution pension plans for investment
contracts issued by either an insurance enterprise or other entity.
Defined-contribution plans, including both health and welfare and pension
plans, should report investment contracts with fully benefit-responsive
features at contract value and other investment contracts at fair value.
The SOP also permits health and welfare benefit plans and defined
contribution pension plans to report contracts that incorporate mortality
or morbidity risk at contract value.
A fully benefit-responsive investment contract provides a liquidity
guarantee by a financially responsible third party of principal
and previously accrued interest for liquidating transfers, loans or
hardships withdrawals initiated by plan participants. The SOP provides
further guidance, including examples of contract terms that fully benefit-
responsive.
This SOP is effective for financial statements for the plan years beginning
after December 15, 1994, except that the application of this SOP to
investment contracts entered into before December 31, 1993, is delayed to
plan years beginning after December 15, 1995. Earlier application is
encouraged.
(2) Participation in Plan
---------------------
The Plan covers all employees who meet the age and service requirements.
Under the terms of the Plan, employees are eligible to participate in the
Plan at age 21 with one year of continuous employment in which they have
worked at least 1,000 hours. Participation in the Plan is based on
voluntary election by each employee.
The employees of the aforementioned acquired institutions are the only
participants in the ESOP.
(3) Contributions
-------------
Contributions to the Plan are made monthly by employees in amounts equal to
whole percentages, from 1% to 16%, of their monthly compensation. The Bank
makes matching contributions of 100% of the first 2%, and 50% of the next
4% of each participant's compensation contributed to the Plan.
<PAGE>
SAVINGS AND THRIFT PLAN FOR THE EMPLOYEES
OF BRANCH BANKING AND TRUST COMPANY
Notes to Financial Statements, Continued
(4) Vesting and Termination of Plan
-------------------------------
Participants are fully vested in their accounts at all times. Although it
has not expressed an intent to do so, the Bank has the right to discontinue
its contributions at any time or to terminate the Plan. In the event of
Plan termination, the assets would be distributed in accordance with the
Plan documents.
(5) Investment Election
-------------------
The Plan offers five investment options for employee contributions: the
Money Market fund, the Fixed income fund, the Equity fund, Bank investment
contracts (which invest in five year guaranteed income contracts of the
Bank) and the BB&T Financial Corporation common stock fund. Each
participant may elect to direct employee and employer contributions to any
combination of the funds. Participants may change their investment
elections once each quarter.
The Plan permits a participant to borrow up to 50% of his or her account
balance, but not more than the lesser of one-half of the value of the
account balance, not to exceed $50,000, or $50,000 minus the participant's
highest outstanding loan amount of the prior twelve months. The minimum
loan amount is $1,000. Only one loan can be made during any Plan year and a
participant may have only one loan outstanding at any time. The interest
rate to be paid on the amounts borrowed is equal to the Bank's prime
lending rate plus one percent at the time of the loan.
(6) Withdrawals
-----------
Under terms of the Plan, a participant is allowed to withdraw certain funds
from his account twice a year. Upon retirement, a participant may elect to
have distributions paid from his account in (1) installments over a period
not to exceed the longer of fifteen years, the participant's life
expectancy, or the life expectancy of the participant and beneficiary, (2)
a lump sum, or (3) any combination of the two.
(7) Determination of Participants' Account Balances
-----------------------------------------------
Participants' account balances are determined monthly as follows:
(a) Employee and matching employer contributions for each month are added
to the participants' accounts for each type of investment fund.
(b) Participants' accounts are reduced by amounts withdrawn.
(c) Earnings from each investment fund are allocated within that fund as
specified by the Plan. Income earned in the Fixed Income Fund or the
Equity Fund is added to the principal of the Fund and reinvested as a
part thereof. Dividends received on BB&T Financial Corporation common
stock are credited to participants' accounts based on the number of
shares of stock held for each participant electing to invest in stock.
Earnings from other investments are allocated based upon the ratio
that each participant's adjusted account balance as defined by the
Plan bears to the total of all participants' account balances.
<PAGE>
SAVINGS AND THRIFT PLAN FOR THE EMPLOYEES
OF BRANCH BANKING AND TRUST COMPANY
Notes to Financial Statements, Continued
(8) Investments
-----------
The Plan's investments are administered by the Bank's Trust Division. The
appreciation (depreciation) in value of the Plan's investments (including
investments bought and sold as well as held during the year) is as follows:
<TABLE>
<CAPTION>
Net appreciation (depreciation)
------------------------------------
1994 1993 1992
----------- --------- ----------
<S> <C> <C> <C>
Common stock $(10,465,528) 3,086,265 15,150,559
Mutual funds (815,609) 368,670 287,422
----------- --------- ----------
$(11,281,137) 3,454,935 15,437,981
=========== ========= ==========
</TABLE>
At December 31, 1994 and 1993 the following investments exceeded five
percent of Plan net assets:
<TABLE>
<CAPTION>
1994 1993
----------------------- -----------------------
Shares, Shares,
par value Current par value Current
or units value or units value
---------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
BB&T Financial Corporation
common stock 2,349,732 $65,792,496 2,006,713 $67,222,447
BB&T U.S. Treasury Money
Market Fund, 4.91%
and 2.43% at December 31,
1994 and 1993, respectively 12,703,473 12,703,473 12,101,446 12,101,446
Branch Banking and Trust
Company Growth and
Income Stock Fund 589,469 6,307,322 439,116 4,957,622
</TABLE>
Included above, at December 31, 1994 and 1993, respectively, are
approximately 75,448 and 31,873 shares of the ESOP's BB&T Financial
Corporation common stock which were allocated to the participants' accounts
with the remaining 171,131 and 192,372 shares being unallocated.
(9) Federal Income Taxes
--------------------
The Internal Revenue Service issued its latest determination letter on
January 6, 1987 which stated that the Plan and its underlying trust
qualify, in form, under the applicable provisions of the Internal Revenue
Code and therefore are exempt from federal income taxes. The Plan and its
underlying trust have been amended to conform with current tax law changes.
The amended plan instruments will be submitted to the Internal Revenue
Service for a letter of determination that the Plan continues to qualify as
exempt from Federal taxes. In the opinion of the Plan Administrator, the
Plan and its underlying trust have operated within the terms of the Plan
and remain qualified under the applicable provisions of the Internal
Revenue Code.
<PAGE>
SAVINGS AND THRIFT PLAN FOR THE EMPLOYEES
OF BRANCH BANKING AND TRUST COMPANY
Notes to Financial Statements, Continued
(10) Notes Payable
-------------
The notes payable to BB&T Financial Corporation consist of notes in the
original amount of $6,018,871. Proceeds from the notes were used by the
ESOP to purchase common stock of BB&T Financial Corporation. The note for
the Gate City and Albemarle ESOP bears interest at 9% and is payable
annually. The principal balance is to be repaid in monthly installments
with the final payment due in July 1996. The ESOP note for Peoples Federal
bears interest at 9% and is payable annually. The principal balance is to
be repaid in monthly installments with the final payment due in June 1997.
The ESOP note for Carolina Savings Bank and Edenton Savings and Loan
Association bears interest at 7% and is payable annually. The principal
balance is to be repaid in monthly installments with the final payment due
in May 1998. The ESOP note for Mutual Savings of Rockingham bears interest
at 7% and is payable annually. The principal balance is to be repaid in
monthly installments with the final payment due in October 1998. The ESOP
note for Citizens of Mooresville bears interest at 7% and is payable
annually. The principal balance is to be repaid in monthly installments
with the final payment due in November 1998.
The debt is guaranteed by the Bank and secured by the unallocated shares of
BB&T Financial Corporation common stock.
(11) Related Party Transactions
--------------------------
During the years ended December 31, 1994, 1993 and 1992, the Plan purchased
459,071, 378,204 and 327,000 shares, respectively, of BB&T Financial
Corporation common stock at a cost of $12,831,789, $11,651,602 and
$8,744,712, respectively. In addition, 109,817,78,398 and 54,885 shares
were distributed during 1994, 1993 and 1992, respectively, to employees who
withdrew their vested interests. The Plan received cash dividends of
$2,434,833, $1,867,548 and $1,395,559 on its investment in BB&T Financial
Corporation common stock during 1994, 1993 and 1992, respectively.
Included in plan assets are mutual funds sponsored by the Bank, guaranteed
income contracts issued by the Bank, and cash on deposit at the Bank.
The cost of administrative services rendered by the Bank's Trust Division
for the years ended December 31, 1994, 1993 and 1992 was $270,381, $239,393
and $121,690, respectively.
(12) Subsequent Event
----------------
On August 1, 1994, BB&T and Southern National Corporation ("SNC") jointly
announced the signing of a definitive agreement to merge. The merger was
subsequently consummated on February 28, 1995, through the issuance of 1.45
shares of SNC common stock for each outstanding share of BB&T common stock.
<PAGE>
SAVINGS AND THRIFT PLAN FOR THE EMPLOYEES
OF BRANCH BANKING AND TRUST COMPANY
Item 27a - Schedule of Assets Held for Investment Purposes
December 31, 1994
<TABLE>
<CAPTION>
Par value Identity of party and Fair
or shares description of assets Cost value
---------- --------------------- ----- ------
<S> <C> <C> <C>
12,703,473 *BB&T U.S. Treasury Money Market Fund
4.91% at December 31, 1994 $ 12,703,473 12,703,473
440,817 *Branch Banking and Trust Company
Intermediate U.S. Government Bond Fund 4,406,459 4,042,294
589,469 *Branch Banking and Trust Company
Growth and Income Stock Fund 6,234,899 6,307,322
2,349,732 *BB&T Financial Corporation Common Stock 53,499,174 65,792,496
2,672,225 Participant Loans, varying maturities, rates
ranging from 7.00% to 11.00% 2,672,225 2,672,225
3,813,747 *5-Year Bank Investment Contracts 5.30%
to 8.15% at December 31, 1994 3,813,747 3,813,747
---------- ----------
$ 83,329,977 95,331,557
========== ==========
</TABLE>
*Denotes party-in-interest
<PAGE>
SAVINGS AND THRIFT PLAN FOR THE EMPLOYEES
OF BRANCH BANKING AND TRUST COMPANY
Item 27d - Schedule of Reportable Transactions (1)
December 31, 1994
<TABLE>
<CAPTION>
Aggregate
selling Aggregate
Aggregate price or cost
purchase maturity of asset Net
Identity of party and price proceeds sold or realized
description of assets (2) (3) (2) (3) matured gain (loss)
- --------------------- -------- -------- -------- -----------
<S> <C> <C> <C> <C>
BB&T Financial Corporation
common stock $ 12,831,789 4,184,435 3,462,283 722,152
BB&T U.S. Treasury Money
Market Fund 8,789,048 8,187,941 8,187,941 -
</TABLE>
(1) This schedule presents transactions in any security where the aggregate of
transactions in that security exceeds five percent of plan assets at
January 1, 1994.
(2) The value of securities at the time of purchase or sale is the market
value.
(3) Brokerage commissions are included in purchase prices and deducted from
sales proceeds.
