Savings and Thrift Plan for The Employees of
Branch Banking and Trust Company
Financial Statements as of December 31, 1995 and 1994
Together with Reports of Independent Public Accountants
Report of Independent Public Accountants
To the Savings and Thrift Plan Committee of
Branch Banking and Trust Company:
We have audited the accompanying statement of net assets available for plan
benefits, with fund information, of the Savings and Thrift Plan for The
Employees of Branch Banking and Trust Company (the Plan) as of December 31,
1995, and the related statement of changes in net assets available for plan
benefits, with fund information, for the year ended December 31, 1995. 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 audit.
We conducted our audit 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 audit provides 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
as of December 31, 1995, and the changes in net assets available for plan
benefits for the year ended December 31, 1995, in conformity with generally
accepted accounting principles.
Our audit was performed 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 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 audit 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.
<PAGE>
As explained in the notes thereto, information presented in the schedule of
assets held for investment purposes does not disclose the historical cost for
investments. Disclosure of this information is required by the Department of
Labor Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974.
As explained in the notes thereto, the Plan has not presented the schedule of
reportable transactions (transactions in excess of 5% of the current value of
plan assets at the beginning of the year) for the BB&T U.S. Treasury Money
Market Fund, the BB&T Intermediate U.S. Government Bond Fund, the BB&T Growth
and Income Stock Fund, the BB&T Balanced Fund, the BB&T Small Company Growth
Fund and the BB&T five-year bank investment contracts. Disclosure of this
information is required by the Department of Labor Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974.
ARTHUR ANDERSEN LLP
Charlotte, North Carolina,
July 12, 1996
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Savings and Thrift Plan Committee
Branch Banking and Trust Company:
We have audited the accompanying statement 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 the related
statements of changes in net assets available for plan benefits for each of
the years in the two-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
as of December 31, 1994, and changes in net assets available for plan benefits
for each of the years in the two-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 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 fund
information has been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, is 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>
<TABLE>
Savings and Thrift Plan for The Employees of
Branch Banking and Trust Company
Statement of Net Assets Available for Plan Benefits, With Fund Information
December 31, 1995
<CAPTION>
Southern
National
Money Fixed Corporation Bank
Market Income Equity Common Investment Balanced
Fund Fund Fund Stock Fund Contracts Fund
Assets:
Investments at fair value-
<S> <C> <C> <C> <C> <C> <C>
Common stock $0 $0 $ 0 $93,955,513 $ 0 $ 0
Mutual funds 0 5,033,017 10,567,435 0 0 356,884
Five year bank investment contracts 0 0 0 0 4,559,575 0
BB&T U.S. Treasury Money Market Fund 11,755,693 0 0 0 0 0
11,755,693 5,033,017 10,567,435 93,955,513 4,559,575 356,884
Investments at cost - Participant loans 0 0 0 0 0 0
Total investments 11,755,693 5,033,017 10,567,435 93,955,513 4,559,575 356,884
Cash 0 0 0 614,883 0 0
Accrued interest receivable 290 0 0 0 0 0
Total assets 11,755,983 5,033,017 10,567,435 94,570,396 4,559,575 356,884
Notes payable 0 0 0 0 0 0
Accrued expenses 0 0 0 0 0 0
Total liabilities 0 0 0 0 0 0
Net assets available for plan benefits $11,755,983 $5,033,017 $10,567,435 $94,570,396 $4,559,575 $356,884
Small
Company Liabilities
Growth Loan to be ESOP
Fund Fund Allocated Allocated Unallocated Total
Assets:
Investments at fair value-
Common stock $ 0 $ 0 $ 0 $6,459,923 $4,566,587 $104,982,023
Mutual funds 780,087 0 0 0 0 16,737,423
Five year bank investment contracts 0 0 0 0 0 4,559,575
BB&T U.S. Treasury Money Market Fund 0 0 0 0 0 11,755,693
780,087 0 0 6,459,923 4,566,587 138,034,714
Investments at cost - Participant loans 0 2,674,538 0 0 0 2,674,538
Total investments 780,087 2,674,538 0 6,459,923 4,566,587 140,709,252
Cash 0 0 0 327 0 615,210
Accrued interest receivable 0 0 0 0 0 290
Total assets 780,087 2,674,538 0 6,460,250 4,566,587 141,324,752
Notes payable 0 0 0 0 2,011,234 2,011,234
Accrued expenses 0 0 41,008 0 0 41,008
Total liabilities 0 0 41,008 0 2,011,234 2,052,242
Net assets available for plan benefits $780,087 $2,674,538 ($41,008) $6,460,250 $2,555,353 $139,272,510
The accompanying notes to financial statements are an integral part of this statement.
Savings and Thrift Plan for The Employees of
Branch Banking and Trust Company
Statement of Net Assets Available for Plan Benefits, With Fund Information
December 31, 1994
BB&T
Financial
Money Fixed Corporation
Market Income Equity Common
Fund Fund Fund Stock Fund
Assets:
Investments at fair value-
Common stock $0 $0 $0 $58,888,284
Mutual funds 0 4,042,294 6,307,322 0
Five year bank investment
contracts 0 0 0 0
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
Investments at cost -
Participant loans 1,094,600 221,378 132,111 1,092,546
Total investments 13,298,092 4,311,879 6,750,407 60,121,630
Cash on deposit at Branch
Banking and Trust Company 0 0 0 0
Accrued interest receivable 42,176 22,174 169,722 195
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
Notes payable 0 0 0 0
Due to plan sponsor 4,853 1,700 2,805 21,216
Total liabilities 4,853 1,700 2,805 21,216
Net assets available for plan
benefits $13,051,961 $4,375,728 $6,992,897 $60,265,115
Bank
Investment ESOP
Contracts Allocated Unallocated Total
Assets:
Investments at fair value-
Common stock $0 $2,112,540 $4,791,672 $65,792,496
Mutual funds 0 0 0 10,349,616
Five year bank investment
contracts 3,813,747 0 0 3,813,747
BB&T U.S. Treasury Money
Market Fund 0 0 0 12,703,473
3,813,747 2,112,540 4,791,672 92,659,332
Investments at cost -
Participant loans 131,590 0 0 2,672,225
Total investments 3,945,337 2,112,540 4,791,672 95,331,557
Cash on deposit at Branch
Banking and Trust Company 0 3,164 22 3,186
Accrued interest receivable 18,571 0 0 252,838
Due from (to) other funds 0 0 0 0
Total assets 3,963,908 2,115,704 4,791,694 95,587,581
Notes payable 0 0 3,264,551 3,264,551
Due to plan sponsor 1,507 0 0 32,081
Total liabilities 1,507 0 3,264,551 3,296,632
Net assets available for plan
benefits $3,962,401 $2,115,704 $1,527,143 $92,290,949
The accompanying notes to financial statements are an integral part of this statement.
Savings and Thrift Plan for The Employees of
Branch Banking and Trust Company
Statement of Changes in Net Assets Available for Plan Benefits, With Fund Information
For the Year Ended December 31, 1995
Southern
National
Money Fixed Corporation Bank
Market Income Equity Common Investment Balanced
Fund Fund Fund Stock Fund Contracts Fund
Additions to net assets attributed to:
Investment income -
Dividends 0 0 17,212 2,788,482 0 0
Interest 615,702 307,504 101,398 23,096 279,718 4,664
Net appreciation in value of
investments 0 412,524 2,265,500 20,457,254 0 15,316
Total investment income 615,702 720,028 2,384,110 23,268,832 279,718 19,980
Contributions-
Employer $379,716 $180,148 $424,578 $2,374,371 $94,486 $51,068
Employees 1,292,118 457,495 1,039,720 4,564,046 170,478 105,785
Merged entity 2,362,285 657,778 1,036,361 6,997,043 0 0
Total contributions 4,034,119 1,295,421 2,500,659 13,935,460 264,964 156,853
Allocation of 79,180 shares of BB&T
Financial Corp. common stock 0 0 0 0 0
Total additions 4,649,821 2,015,449 4,884,769 37,204,292 544,682 176,833
Deductions from net assets attributed to:
Withdrawals (3,416,449) (532,039) (809,929) (3,629,481) (814,131) (10,621)
Administrative expenses (2,160) (747) (1,220) (51,229) (2,726) (44)
Interest expense 0 0 0 0 0 0
Other 0 0 0 0 (9,052) 0
Allocation of 79,180 shares of BB&T
Financial Corp. common stock 0 0 0 0 0 0
Loans to members - Interest income 0 0 0 0 0 0
Principal repayments 0 0 0 0 0 0
Net transfers of assets among funds (2,527,190) (825,374) (499,082) 781,699 878,401 190,716
Net assets available for plan benefits,
beginning of year 13,051,961 4,375,728 6,992,897 60,265,115 3,962,401 0
Net assets available for plan benefits,
end of year $11,755,983 $5,033,017 $10,567,435 $94,570,396 $4,559,575 $356,884
Small
Company Liabilities
Growth Loan to be ESOP
Fund Fund Allocated Allocated Unallocated Total
Additions to net assets attributed to:
Investment income -
Dividends 0 0 0 325,642 164,450 3,295,786
Interest 0 0 0 0 0 1,332,082
Net appreciation in value of
investments 79,134 0 0 1,661,220 488,470 25,379,418
Total investment income 79,134 0 0 1,986,862 652,920 30,007,286
Contributions-
Employer $54,100 $ 0 $ 0 $ 0 $ 2,011,234 $ 5,569,701
Employees 116,563 0 0 1,853,829 0 9,600,034
Merged entity 0 0 0 0 0 11,053,467
Total contributions 170,663 0 0 1,853,829 2,011,234 26,223,202
Allocation of 79,180 shares of BB&T
Financial Corp. common stock 0 0 0 1,198,707 0 1,198,707
'Total additions 249,797 0 0 5,039,398 2,664,154 57,429,195
Deductions from net assets attributed to:
Withdrawals (12,964) 0 0 (705,550) (149,701) (10,080,865)
Administrative expenses (43) 0 (41,008) (4,112) (12,975) (116,264)
Interest expense 0 0 0 0 (251,026) (251,026)
Other 0 0 0 0 0 (9,052)
Allocation of 79,180 shares of BB&T
Financial Corp. common stock 0 0 0 0 (1,198,707) (1,198,707)
Loans to members - Interest income 0 136,909 0 0 0 136,909
Principal repayments 0 1,071,371 0 0 0 1,071,371
Net transfers of assets among funds 543,297 1,466,258 0 14,810 (23,535) 0
Net assets available for plan benefits,
beginning of year 0 0 0 2,115,704 1,527,143 92,290,949
Net assets available for plan benefits,
end of year $780,087 $2,674,538 ($41,008) $6,460,250 $2,555,353 $139,272,510
The accompanying notes to financial statements are an integral part of this statement.
Savings and Thrift Plan for The Employees of
Branch Banking and Trust Company
Statement of Changes in Net Assets Available for Plan Benefits, With Fund Information
For the Year Ended December 31, 1994
BB&T
Financial
Money Fixed Corportation
Market Income Equity Common
Fund Fund Fund Stock Fund
Additions to net assets attributed to:
Investment income (loss)-
Dividends $ 0 $ 0 $ 0 $ 2,155,623
Interest 430,923 676,112 805,959 89,062
Net appreciation (depreciation) in value
of investments 0 (477,772) (337,837) (9,264,522)
Other 100 0 0 0
Total investment income (loss) 431,023 198,340 468,122 (7,019,837)
Contributions-
Employer 379,987 225,733 371,640 2,065,026
Employees 1,681,883 476,806 750,939 4,498,725
Merged entities 149,300 0 191,779 0
Total contributions 2,211,170 702,539 1,314,358 6,563,751
Allocation of 40,137 shares of BB&T
Financial Corp. common stock 0 0 0 0
Total additions 2,642,193 900,879 1,782,480 (456,086)
Deductions from net assets attributed to:
Withdrawals (502,933) (200,180) (333,828) (1,242,255)
Administrative expenses (26,862) (9,965) (14,165) (179,518)
Interest expense 0 0 0 0
Allocation of 40,137 shares of BB&T
Financial Corp. common stock 0 0 0 0
Net transfers of assets among funds (1,669,459) (630,238) 306,208 2,448,592
Net assets available for plan benefits, beginning of year 12,609,022 4,315,232 5,252,202 59,694,382
Net assets available for plan benefits, end of year $13,051,961 $4,375,728 $6,992,897 $60,265,115
Bank
Investment ESOP
Contracts Allocated Unallocated Total
Additions to net assets attributed to:
Investment income (loss)-
Dividends $ 0 $ 87,543 $ 191,667 $ 2,434,833
Interest 241,934 0 0 2,243,990
Net appreciation (depreciation) in value
of investments 0 28,107 (1,229,113) (11,281,137)
Other 0 14,688 13,305 28,093
Total investment income (loss) 241,934 130,338 (1,024,141) (6,574,221)
Contributions-
Employer 97,069 0 1,463,500 4,602,955
Employees 599,603 0 0 8,007,956
Merged entities 0 0 0 341,079
Total contributions 696,672 0 1,463,500 12,951,990
Allocation of 40,137 shares of BB&T
Financial Corp. common stock 0 887,463 0 887,463
Total additions 938,606 1,017,801 439,359 7,265,232
Deductions from net assets attributed to:
Withdrawals (123,636) (269,599) (143,533) (2,815,964)
Administrative expenses (11,878) (14,688) (13,305) (270,381)
Interest expense 0 0 (344,300) (344,300)
Allocation of 40,137 shares of BB&T
Financial Corp. common stock 0 0 (887,463) (887,463)
Net transfers of assets among funds (449,609) (5,494) 0 0
Net assets available for plan benefits, beginning of year 3,608,918 1,387,684 2,476,385 89,343,825
Net assets available for plan benefits, end of year $3,962,401 $2,115,704 $1,527,143 $92,290,949
The accompanying notes to financial statements are an integral part of this statement.
Savings and Thrift Plan for The Employees of
Branch Banking and Trust Company
Statement of Changes in Net Assets Available for Plan Benefits, With Fund Information
For the Year Ended December 31, 1993
BB&T
Financial
Money Fixed Corporation
Market Income Equity Common
Fund Fund Fund Stock Fund
Additions to net assets attributed to:
Investment income-
Dividends $ 0 $ 0 $ 0 $ 1,654,300
Interest 347,146 12,132 55,021 68,843
Net appreciation in value of investments 0 107,163 261,507 2,634,745
Other 0 0 0 0
Total investment income 347,146 119,295 316,528 4,357,888
Contributions-
Employer 397,301 180,971 231,426 1,783,762
Employees 1,359,339 314,869 446,373 3,331,219
Merged entities 2,368,873 0 0 0
Total contributions 4,125,513 495,840 677,799 5,114,981
Allocation of 31,873 shares of BB&T
Financial Corp. common stock 0 0 0 0
Total additions 4,472,659 615,135 994,327 9,472,869
Deductions from net assets attributed to:
Withdrawals (670,021) (75,133) (129,682) (806,487)
Administrative expenses (39,142) (11,694) (13,291) (147,528)
Interest expense 0 0 0 0
Allocation of 31,873 shares of BB&T
Financial Corp. common stock 0 0 0 0
Net transfers of assets among funds (3,928,567) 328,963 622,472 3,132,499
Net assets available for plan benefits, beginning of year 12,774,093 3,457,961 3,778,376 48,043,029
Net assets available for plan benefits, end of year $12,609,022 $4,315,232 $5,252,202 $59,694,382
Bank
Investment ESOP
Contracts Allocated Unallocated Total
Additions to net assets attributed to:
Investment income-
Dividends $ 0 $ 43,620 $ 169,628 $ 1,867,548
Interest 258,111 0 0 741,253
Net appreciation in value of investments 0 422,104 29,416 3,454,935
Other 0 4,431 7,784 12,215
Total investment income 258,111 470,155 206,828 6,075,951
Contributions-
Employer 96,090 0 1,141,228 3,830,778
Employees 177,128 0 0 5,628,928
Merged entities 0 0 0 2,368,873
Total contributions 273,218 0 1,141,228 11,828,579
Allocation of 31,873 shares of BB&T
Financial Corp. common stock 0 675,075 0 675,075
Total additions 531,329 1,145,230 1,348,056 18,579,605
Deductions from net assets attributed to:
Withdrawals (46,481) (124,205) (184,572) (2,036,581)
Administrative expenses (12,084) (7,870) (7,784) (239,393)
Interest expense 0 0 (308,632) (308,632)
Allocation of 31,873 shares of BB&T
Financial Corp. common stock 0 0 (675,075) (675,075)
Net transfers of assets among funds (155,367) 0 0 0
Net assets available for plan benefits, beginning of year 3,291,521 374,529 2,304,392 74,023,901
Net assets available for plan benefits, end of year $3,608,918 $1,387,684 $2,476,385 $89,343,825
The accompanying notes to financial statements are an integral part of this statement.
</TABLE>
Savings and Thrift Plan for The Employees of
Branch Banking and Trust Company
Notes to Financial Statements
December 31, 1995 and 1994
1. Description of Plan:
The following description of the Savings and Thrift Plan for The Employees of
Branch Banking and Trust Company (the Plan) provides only general information.
Participants should refer to the plan agreement for a more complete
description of the Plan's provisions.
The Plan is sponsored by Branch Banking and Trust Company (BB&T-NC or the
Bank) and was established July 1, 1982, for the purpose of promoting the
future economic welfare of the Bank's employees. The Plan offers seven
investment options for employee contributions: the BB&T U.S. Treasury Money
Market Fund, the BB&T Intermediate U.S. Government Bond Fund, the BB&T Growth
and Income Stock Fund, the BB&T Balanced Fund, the BB&T Small Company Growth
Fund, BB&T Five-Year Bank Investment Contracts (which invests in five-year
guaranteed income contracts of the Bank) and the Southern National Corporation
Common Stock Fund (formerly the BB&T Financial Corporation Common Stock Fund).
Each participant may elect to direct employee and employer contributions to
any combination of the funds. Effective during 1995, participants may change
their investment elections daily.
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.
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. Participants are
fully vested in their accounts at all times.
The Plan permits a participant to borrow up to 50% of their 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 12 months. The minimum loan amount is $1,000. Only
one loan can be made during the 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 1% at the time of the
loan.
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 this account in installments over a period not to
exceed the longer of 15 years, the participant's life expectancy, or the life
expectancy of the participant and beneficiary, a lump sum, or any combination
of the two.
Employee Stock Ownership Plan
The Employee Stock Ownership Plan (ESOP) is sponsored by the Bank's parent,
Southern National Corporation (the Corporation or SNC), previously BB&T
Financial Corporation (BB&T). On February 28, 1995, SNC merged with BB&T.
Each BB&T shareholder received 1.45 shares of SNC common stock for each share
of BB&T common stock held.
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 employees 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 by BB&T in 1993. The ESOP is a
separate fund of the Plan and is only for the employees of these acquired
institutions.
The ESOP initially purchased BB&T common shares using the proceeds of notes
payable to BB&T (see Note 6). In connection with the merger, the notes became
payable to SNC and the Plan received 1.45 shares of SNC common stock for each
share of BB&T stock held on February 28, 1995. The stock is held in a trust
established under the Plan and the notes are to be repaid over a period of
five years by corporate 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 (IRC). Shares vest fully upon
allocation.
The notes are collateralized by the unallocated shares of stock and are
guaranteed by the Bank. SNC 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 the accounts of employees with vested rights in allocated stock (Allocated)
and stock not yet allocated to employees (Unallocated).
2. Significant Accounting Policies:
Basis of Accounting
The accompanying financial statements have been prepared on the accrual basis
of accounting.
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 exdividend date.
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.
3. Determination of Participants' Account Balances:
Participants' account balances are valued daily as follows:
- Employee and matching employer contributions when contributed are added
to the participants' accounts for each type of investment fund.
- Participants' accounts are reduced by amounts withdrawn.
- Earnings from each investment fund are allocated within that fund as
specified by the Plan. Dividends received on SNC common stock
(previously BB&T 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 mutual funds 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.
4. 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)
1995 1994 1993
<S> <C> <C> <C>
Common stock $ 22,606,944 $ (10,465,528) $ 3,086,265
Mutual funds 2,772,474 (815,609) 368,670
$ 25,379,418 $ (11,281,137) $ 3,454,935
</TABLE>
At December 31, 1995 and 1994, the fair market value of individual investments
that represent 5% or more of the Plan's total net assets are as follows:
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Southern National Corporation common stock $ 104,982,023 $ 65,792,496
BB&T U.S. Treasury Money Market Fund,
5.2% and 4.91% at December 31, 1995
and 1994, respectively 11,755,983 12,703,473
Branch Banking & Trust Company Growth
and Income Stock Fund 10,567,435 6,307,322
Branch Banking & Trust Intermediate U.S.
Government Fund 5,033,017 NA
</TABLE>
Included above, at December 31, 1995 and 1994, respectively, are approximately
246,092 and 109,400 shares of the ESOP's Southern National Corporation common
stock which were allocated to the participants' accounts with 173,965 and
248,140 shares being unallocated.
5. Tax Status:
The Internal Revenue Service (IRS) 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 IRC and therefore are exempt
from federal income taxes. The Plan and its underlying trust have been
restated to conform with current tax law changes. The restated plan
instrument was submitted to the IRS for a letter of determination that the
Plan continues to qualify as exempt from federal taxes. No updated
determination letter has yet been received. In the opinion of the plan
administrator, the Plan and its underlying trust are currently being operated
in compliance with the applicable requirements of the IRC.
6. Notes Payable:
The notes payable to SNC (originally payable to BB&T, see Note 1) consist of
notes in the original amount of $6,018,871. Proceeds from the notes were used
by the ESOP to originally purchase common stock of BB&T. As discussed in Note
1, in connection with the merger, the Plan received 1.45 shares of SNC common
stock for each share of BB&T common stock held as of February 28, 1995.
The notes for the Gate City and Albemarle ESOPs bear interest at 9% and are
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
SNC common stock.
7. Plan Termination:
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.
8. Related-party Transactions:
During the years ended December 31, 1995, 1994 and 1993, the Plan purchased
677,392, 665,653 and 548,396 shares, respectively, of SNC (formerly BB&T)
common stock at a cost of $16,072,633, $12,831,789 and $11,651,602,
respectively. In addition, 321,169, 159,235 and 113,677 shares were
distributed during 1995, 1994 and 1993, respectively, to employees who
withdrew their vested interests. The Plan received cash dividends of
$3,278,574, $2,434,833 and $1,867,548 on its investment in Southern National
Corporation common stock during 1995, 1994 and 1993, 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, 1995, 1994 and 1993, was $116,264, $270,381 and
$239,393, respectively. During 1995, transaction processing responsibilities
previously managed by the Bank's trust division were performed by a
third-party service provider.
9. Subsequent Event:
Effective January 1, 1996, Southern National's Employee Stock Ownership Plan
was merged into the Plan to form the Southern National Corporation 401(k)
Savings Plan. The new plan permits employees to contribute up to 16% of their
compensation to the Plan. SNC matches up to 6% of the employee's compensation
with a 100% matching contribution.
<TABLE>
Savings and Thrift Plan for The Employees of
Branch Banking and Trust Company
Item 27(a) - Schedule of Assets Held for Investment Purposes
December 31 ,1995
<CAPTION>
Par Value
or Shares Identity of Party and Description of Assets Cost Fair Value
*BB&T U.S. Treasury Money Market Fund 5.2% at
<C> <S> <C> <C>
11,755,693 December 31, 1995 ** $11,755,693
*Branch Banking and Trust Company Intermediate
494,402 U.S. Government Bond Fund ** 5,033,017
*Branch Banking and Trust Company Growth and
770,221 Income Fund ** 10,567,435
*Southern National Corporation Common Stock
3,999,314 Fund 104,982,023
*5 Year Bank Investment Contracts 5.30% to
4,559,575 8.15% at December 31, 1995 ** 4,559,575
*Branch Banking and Trust Company Balanced
31,087 Fund ** 356,884
*Branch Banking and Trust Company Small
50,458 Company Growth Fund ** 780,087
Participant loans, varying maturities, rates
2,674,538 ranging from 7.00% to 11.00% ** 2,674,538
* Denotes party-in-interest.
** Note: The above schedule could not be completed due to the trustee's
inability to provide cost information for these investments.
The accompanying notes to financial statements are an integral part of this statement.
Savings and Thrift Plan for The Employees of
Branch Banking and Trust Company
Item 27(d) - Schedule of Reportable Transactions (1)
December 31 ,1995
Aggregate
Selling
Price or Aggregate
Aggregate Maturity Cost of
Identity of Party and Description of Purchase Proceeds Asset Sold Net Realized
Assets Price (2) (3) (2) (3) or Matured Gain (Loss)
Southern National Corporation
Common Stock-
(43 purchases) $16,072,633 $0 $0 $0
(69 sales) 0 7,743,451 * *
</TABLE>
*Historical cost information is unavailable and is therefore not provided in
this schedule.
(1) This schedule presents transactions in any security where the aggregate
of transactions in that security exceeds 5% of plan assets at
January 1, 1995.
(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.
Note: The above schedule could not be completed for the BB&T U.S. Treasury
Money Market Fund, the BB&T Intermediate U.S. Government Bond Fund, the
BB&T Growth and Income Stock Fund, the BB&T Balanced Fund, the BB&T
Small Company Growth Fund and the BB&T Five-Year Bank Investment
Contracts due to the inability of the Trustee to provide this
information.
The accompanying notes to financial statements are an integral part of this
statement.
