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)
October 11, 1996
Southern National Corporation
(Exact name of registrant as specified in its charter)
Commission file number : 1-10853
North Carolina 56-0939887
(State of incorporation) (I.R.S. Employer Identification No.)
200 West Second Street
Winston-Salem, North Carolina 27101
(Address of principal executive offices) (Zip Code)
(910) 733-2000
(Registrant's telephone number, including area code)
This Form 8-K has 11 pages. The sequential numbering of the pages is
indicated in the lower center.
<PAGE>
ITEM 5. OTHER EVENTS
The purpose of this Current Report on Form 8-K is to file Southern
National Corporation's Quarterly Performance Summary for the third quarter
of 1996, including sections distributed to the media and a supplement
distributed to analysts.
EXHIBIT INDEX
Exhibit 99.1 Quarterly Performance Summary issued October 11, 1996
<PAGE>
October 11, 1996
FOR IMMEDIATE RELEASE
Contacts:
ANALYSTS MEDIA
B. Gloyden Stewart, Jr. Scott E. Reed Bob Denham
Senior Vice President Senior Executive Vice President Vice President
Investor Relations Chief Financial Officer Public Relations
(919) 246-4219 (910) 733-3088 (910) 733-2202
Southern National reports 3rd quarter earnings
WINSTON-SALEM, N.C. -- Southern National Corporation (NYSE:SNB)
earned $56.0 million for the quarter ended September 30, 1996, or $.50
per fully diluted share. These earnings reflect the impact of a special
assessment on financial institutions with deposits insured by the
Savings Association Insurance Fund. According to the Federal Deposit
Insurance Corporation, the assessment for Southern National is
approximately $33 million ($21 million after tax).
Excluding the impact of this assessment, Southern National earned
$77.2 million for the third quarter, up 13.2% from recurring earnings
for the third quarter of 1995. On a fully diluted per share basis,
Southern National earned $.70, compared to $.59 earned in the prior
year, an increase of 18.6%. Recurring earnings for the quarter produced
a return on average assets of 1.48% and a return on average equity of
18.71%.
"Overall, we are very pleased with our earnings performance for the
third quarter," said Chairman and Chief Executive Officer John A.
Allison. "We have expected the SAIF assessment for some time, and while
it has had a significant negative effect on current quarter results,
Southern National will benefit from this legislation in the future. We
anticipate that our future FDIC insurance expense will be reduced by
approximately $8.8 million annually."
For the nine months ended September 30, 1996, Southern National
reported net income of $204.0 million, or $1.83 per fully diluted
share. Excluding the SAIF assessment, earnings for this period would
have been $225.3 million, an increase of 18.3% over the recurring
earnings recorded in the prior year. Recurring earnings per fully
diluted share for the nine months were $2.02, compared to $1.66 on a
recurring basis in the prior year, an increase of 21.7%. Recurring
earnings for the nine months produced a return on average assets of
1.47% and a return on average common equity of 18.51%.
MORE
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<PAGE>
"Our growth in recurring earnings is being driven by continued
rapid growth in noninterest income, a strong net interest margin and a
superior efficiency ratio, which was 53.3% for the quarter," said
Allison. "Recurring noninterest income increased 22.7% for the nine
months compared with the same period last year. This rate of increase
is ahead of the target we set for the year. In addition, loans continue
to grow at a healthy rate. Independent of our on-going securitization
program, average loans for the third quarter increased an annualized
9.4% from the amount outstanding during the prior quarter."
On August 22, 1996, Southern National announced plans to acquire
Fidelity Financial Bankshares Corporation of Richmond, Va. Fidelity
Financial, with $321 million in assets, operates seven branches in the
Richmond metropolitan area. Southern National also announced plans on
October 1, 1996, to expand its insurance network in South Carolina by
purchasing Boyle-Vaughan Associates Inc. of Columbia, S.C., William
Goldsmith Agency Inc. and the C. Dan Joyner Insurance Agency, both of
Greenville, S.C.
"As one of our most important strategic objectives for 1996, we
have continued to look for opportunities to expand our business through
economically feasible acquisitions," said Allison. "Fidelity Financial
is an excellent match for us because of its location in the dynamic
Richmond market and its history of attention to customer service. We
have also pursued acquisitions in our existing major fee-based product
lines, and the planned acquisitions of the Boyle-Vaughan, Goldsmith and
Joyner agencies will provide Southern National with excellent
opportunities to extend our insurance products and services to a
greater market in South Carolina."
All reported amounts have been restated to reflect the merger of
Southern National and Regional Acceptance Corporation in a transaction
accounted for as a pooling of interests. The merger was completed on
September 1, 1996. Approximately $1.9 million in costs related to the
Regional merger were expensed in the third quarter.
Southern National, with $21.1 billion in consolidated assets at
September 30, 1996, is the parent company of Branch Banking and Trust
Company (BB&T) and controls the second largest share of deposits in
North Carolina and the third largest in South Carolina. Through its
subsidiaries in the Carolinas and Virginia, Southern National currently
operates 425 banking offices in 219 cities and towns.
The common stock of Southern National Corporation is traded on
the New York Stock Exchange under the symbol SNB. The stock closed at
$34.00 on October 10.
#
Southern National's news releases are available at no charge
through PR Newswire's Company News On-Call facsimile service. For a menu
of Southern National's news releases or to retrieve a specific release
call 800-758-5804, extension 809325.
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<TABLE>
QUARTERLY PERFORMANCE SUMMARY B. Gloyden Stewart, Jr.
Southern National Corporation (NYSE:SNB) Senior Vice President (919) 246-4219
Page 3 Investor Relations (919) 246-4871
For the Three Months Ended Increase / (Decrease)
<CAPTION>
(Dollars in thousands, except per share data) 9/30/96 9/30/95 $ %
INCOME STATEMENT
<S> <C> <C> <C> <C>
Interest income - taxable equivalent $ 413,850 $ 410,251 $ 3,599 .9 %
Interest expense 197,925 211,851 (13,926) (6.6)
Net interest income - taxable equivalent 215,925 198,400 17,525 8.8
Less: Taxable equivalent adjustment 8,348 8,514 (166) (1.9)
Net interest income 207,577 189,886 17,691 9.3
Provision for loan & lease losses 13,500 7,933 5,567 70.2
Net interest income after provision for
loan & lease losses 194,077 181,953 12,124 6.7
Noninterest income 74,922 62,725 12,197 19.4
Noninterest expense 187,734 147,121 40,613 27.6
Income before income taxes 81,265 97,557 (16,292) (16.7)
Provision for income taxes 25,299 32,971 (7,672) (23.3)
Net income $ 55,966 $ 64,586 (8,620) (13.3) %
PER SHARE DATA
Primary earnings $ .50 $ .57 $ (.07) (12.3) %
Fully diluted earnings .50 .56 (.06) (10.7)
Weighted average shares - Primary 110,841,221 110,162,172
Fully diluted 111,013,052 114,996,393
Dividends paid on common shares $ .27 $ .23 $ .04 17.4 %
PERFORMANCE RATIOS
Return on average assets 1.08 % 1.24 %
Return on average common equity 13.55 16.19
Return on average total equity 13.55 15.78
Net yield on earning assets (taxable equivalent) 4.42 4.04
Efficiency (taxable equivalent) * 53.3 54.0
For the Nine Months Ended Increase / (Decrease)
(Dollars in thousands, except per share data) 9/30/96 9/30/95 $ %
INCOME STATEMENT
Interest income - taxable equivalent $ 1,219,524 $ 1,197,715 $ 21,809 1.8 %
Interest expense 580,127 606,609 (26,482) (4.4)
Net interest income - taxable equivalent 639,397 591,106 48,291 8.2
Less: Taxable equivalent adjustment 24,862 23,924 938 3.9
Net interest income 614,535 567,182 47,353 8.3
Provision for loan & lease losses 38,161 23,315 14,846 63.7
Net interest income after provision
for loan & lease losses 576,374 543,867 32,507 6.0
Noninterest income 216,995 168,916 48,079 28.5
Noninterest expense 490,849 539,910 (49,061) (9.1)
Income before income taxes 302,520 172,873 129,647 75.0
Provision for income taxes 98,536 58,813 39,723 67.5
Net income $ 203,984 $ 114,060 $ 89,924 78.8 %
PER SHARE DATA
Primary earnings $ 1.85 $ 1.01 $ .84 83.2 %
Fully diluted earnings 1.83 1.00 .83 83.0
Weighted average shares - Primary 110,071,975 109,489,491
Fully diluted 111,722,834 114,782,862
Dividends paid on common shares $ .73 $ .63 .10 15.9
PERFORMANCE RATIOS
Return on average assets 1.33 % .75 %
Return on average common equity 16.76 9.80
Return on average total equity 16.59 9.67
Net yield on earning assets (taxable equivalent) 4.43 4.13
Efficiency (taxable equivalent) * 53.3 56.4
NOTES: Applicable ratios are annualized.
* Excludes securities gains (losses), foreclosed property expense & nonrecurring items for all periods.
- 3 -
</TABLE>
<PAGE>
<TABLE>
QUARTERLY PERFORMANCE SUMMARY B. Gloyden Stewart, Jr.
Southern National Corporation (NYSE:SNB) Senior Vice President (919) 246-4219
Page 4 Investor Relations (919) 246-4871
For the Three Months Ended Increase / (Decrease)
<CAPTION>
(Dollars in thousands, except per share data) 9/30/96 9/30/95 $ %
INCOME STATEMENT EXCLUDING NONRECURRING ITEMS
<S> <C> <C> <C> <C>
Interest income - taxable equivalent $ 413,850 $ 410,251 $ 3,599 .9 %
Interest expense 197,925 211,851 (13,926) (6.6)
Net interest income - taxable equivalent 215,925 198,400 17,525 8.8
Less: Taxable equivalent adjustment 8,348 8,514 (166) (1.9)
Net interest income 207,577 189,886 17,691 9.3
Provision for loan & lease losses 13,500 7,933 5,567 70.2
Net interest income after provision
for loan & lease losses 194,077 181,953 12,124 6.7
Noninterest income 74,922 62,297 12,625 20.3
Noninterest expense 154,709 140,576 14,133 10.1
Income before income taxes 114,290 103,674 10,616 10.2
Provision for income taxes 37,041 35,409 1,632 4.6
Net income excluding nonrecurring items 77,249 68,265 8,984 13.2
Nonrecurring items, net of tax 21,283 3,679 17,604 478.5
Net income $ 55,966 $ 64,586 $ (8,620) (13.3) %
PER SHARE DATA
Primary earnings $ .70 $ .61 $ .09 14.8 %
Fully diluted earnings .70 .59 .11 18.6
Weighted average shares - Primary 110,841,221 110,162,172
Fully diluted 111,013,052 114,996,393
Dividends paid on common shares $ .27 $ .23 $ .04 17.4 %
PERFORMANCE RATIOS
Return on average assets 1.48 % 1.31 %
Return on average common equity 18.71 17.13
Return on average total equity 18.71 16.68
Net yield on earning assets (taxable equivalent) 4.42 4.04
Efficiency (taxable equivalent) * 53.3 54.0
For the Nine Months Ended Increase / (Decrease)
(Dollars in thousands, except per share data) 9/30/96 9/30/95 $ %
INCOME STATEMENT EXCLUDING NONRECURRING ITEMS
Interest income - taxable equivalent $ 1,219,524 $ 1,197,715 $ 21,809 1.8 %
Interest expense 580,127 606,609 (26,482) (4.4)
Net interest income - taxable equivalent 639,397 591,106 48,291 8.2
Less: Taxable equivalent adjustment 24,862 23,924 938 3.9
Net interest income 614,535 567,182 47,353 8.3
Provision for loan & lease losses 38,161 23,315 14,846 63.7
Net interest income after provision
for loan & lease losses 576,374 543,867 32,507 6.0
Noninterest income 216,995 176,879 40,116 22.7
Noninterest expense 457,824 435,118 22,706 5.2
Income before income taxes 335,545 285,628 49,917 17.5
Provision for income taxes 110,278 95,237 15,041 15.8
Net income excluding nonrecurring items 225,267 190,391 34,876 18.3
Nonrecurring items, net of tax 21,283 76,331 (55,048) (72.1)
Net income $ 203,984 $ 114,060 $ 89,924 78.8 %
PER SHARE DATA
Primary earnings $ 2.04 $ 1.70 $ .34 20.0 %
Fully diluted earnings 2.02 1.66 .36 21.7
Weighted average shares - Primary 110,071,975 109,489,491
Fully diluted 111,722,834 114,782,862
Dividends paid on common shares $ .73 $ .63 .10 15.9
PERFORMANCE RATIOS
Return on average assets 1.47 % 1.25 %
Return on average common equity 18.51 16.59
Return on average total equity 18.32 16.14
Net yield on earning assets (taxable equivalent) 4.43 4.13
Efficiency (taxable equivalent) * 53.3 56.4
NOTES: Applicable ratios are annualized.
* Excludes securities gains (losses), foreclosed property expense & nonrecurring items for all periods.
- 4 -
</TABLE>
<PAGE>
<TABLE>
QUARTERLY PERFORMANCE SUMMARY B. Gloyden Stewart, Jr.
Southern National Corporation (NYSE:SNB) Senior Vice President (919) 246-4219
Page 5 Investor Relations (919) 246-4871
As of / For the Nine Months Ended Increase / (Decrease)
(Dollars in thousands) 9/30/96 9/30/95 $ %
<CAPTION>
SELECTED BALANCE SHEET DATA
End of period balances
<S> <C> <C> <C> <C>
Securities, at carrying value* $ 5,616,726 $ 5,379,645 $ 237,081 4.4 %
Loans & leases* 14,110,996 14,180,917 (69,921) (.5)
Allowance for loan & lease losses 184,203 177,149 7,054 4.0
Other earning assets 7,862 9,310 (1,448) (15.6)
Total earning assets 19,754,062 19,556,245 197,817 1.0
Total assets 21,096,557 20,814,751 281,806 1.4
Noninterest-bearing deposits 2,039,356 1,845,262 194,094 10.5
Interest-bearing deposits 12,979,056 12,589,778 389,278 3.1
Total deposits 15,018,412 14,435,040 583,372 4.0
Short-term borrowed funds 2,095,282 3,112,310 (1,017,028) (32.7)
Long-term debt 2,050,211 1,305,282 744,929 57.1
Total interest-bearing liabilities 17,124,549 17,007,370 117,179 .7
Common equity 1,656,806 1,571,547 85,259 5.4
Preferred equity -- 70,689 (70,689) (100.0)
Total shareholders' equity $ 1,656,806 $ 1,642,236 $ 14,570 .9 %
Average balances
Securities, at amortized cost* $ 5,096,602 $ 5,434,168 $ (337,566) (6.2) %
Loans & leases* 14,145,508 13,673,281 472,227 3.5
Other earning assets 14,443 41,744 (27,301) (65.4)
Total earning assets 19,256,553 19,149,193 107,360 .6
Total assets 20,420,352 20,344,572 75,780 .4
Noninterest-bearing deposits 1,833,456 1,697,375 136,081 8.0
Interest-bearing deposits 12,863,318 12,563,735 299,583 2.4
Total deposits 14,696,774 14,261,110 435,664 3.1
Short-term borrowed funds 2,055,123 3,188,018 (1,132,895) (35.5)
Long-term debt 1,756,915 1,043,602 713,313 68.4
Total interest-bearing liabilities 16,675,356 16,795,355 (119,999) (.7)
Common equity 1,622,447 1,503,807 118,640 7.9
Preferred equity 20,248 73,076 (52,828) (72.3)
Total shareholders' equity $ 1,642,695 $ 1,576,883 $ 65,812 4.2 %
NOTES: All items referring to loans & leases include loans held for sale & are net of unearned income.
* Balances include the securitization of $1.2 billion of loans through September 30, 1996. Average cumulative quarterly
securitizations of loans are as follows: $53.5 million for the third quarter of 1995, $186.6 million for the fourth
quarter of 1995, $354.9 million for the first quarter of 1996, $503.2 million for the second quarter of 1996 and $974.8
million for the third quarter of 1996.
- 5 -
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<PAGE>
<TABLE>
QUARTERLY PERFORMANCE SUMMARY B. Gloyden Stewart, Jr.
Southern National Corporation (NYSE:SNB) Senior Vice President (919) 246-4219
Page 6 Investor Relations (919) 246-4871
(Dollars in thousands, except per share data) As of / For the Quarter Ended
<CAPTION>
9/30/96 6/30/96 3/31/96 12/31/95 9/30/95
INCOME STATEMENT
Interest income - taxable equivalent
<S> <C> <C> <C> <C> <C>
Interest & fees on loans & leases $ 323,363 $ 323,747 $ 318,967 $ 325,960 $ 324,193
Interest & dividends on securities 90,269 81,971 80,590 84,711 85,657
Interest on short-term investments 218 155 244 762 401
Total interest income - taxable
equivalent 413,850 405,873 399,801 411,433 410,251
Interest expense
Interest on deposits 144,489 136,870 140,488 142,056 142,779
Interest on short-term borrowed fund 24,594 27,472 29,536 44,446 48,688
Interest on long-term debt 28,842 25,762 22,074 20,831 20,384
Total interest expense 197,925 190,104 192,098 207,333 211,851
Net interest income - taxable
equivalent 215,925 215,769 207,703 204,100 198,400
Less: Taxable equivalent adjustment 8,348 8,446 8,068 8,611 8,514
Net interest income 207,577 207,323 199,635 195,489 189,886
Provision for loan & lease losses 13,500 13,261 11,400 11,317 7,933
Net interest income after provision for
loan & lease losses 194,077 194,062 188,235 184,172 181,953
Noninterest income
Service charges on deposits 27,340 26,804 25,214 23,459 22,381
Mortgage banking activities 6,992 8,542 9,300 7,827 9,019
Trust income 5,963 6,166 4,674 5,151 4,483
Agency insurance commissions 5,549 4,577 6,189 3,815 3,479
Other insurance commissions 2,943 2,566 2,608 2,770 2,195
Other nondeposit fees & commissions 17,780 17,491 15,623 13,658 14,233
Securities gains (losses), net 705 (154) (8) 131 1,114
Other income 7,650 7,092 5,389 5,267 5,821
Total noninterest income 74,922 73,084 68,989 62,078 62,725
Noninterest expense
Personnel expense 74,599 75,787 74,911 70,615 74,300
Occupancy & equipment expense 26,750 25,091 25,124 24,634 25,621
Federal deposit insurance expense 36,293 3,172 3,355 4,114 2,901
Foreclosed property expense 214 348 744 910 524
Amortization of intangibles 2,482 2,792 3,230 2,817 2,982
Other noninterest expense 47,396 46,281 42,280 38,229 40,793
Total noninterest expense 187,734 153,471 149,644 141,319 147,121
Income before income taxes 81,265 113,675 107,580 104,931 97,557
Provision for income taxes 25,299 37,508 35,729 32,650 32,971
Net income $ 55,966 $ 76,167 $ 71,851 $ 72,281 $ 64,586
PER SHARE DATA
Primary earnings $ .50 $ .69 $ .66 $ .64 $ .57
Fully diluted earnings .50 .68 .64 .63 .56
Dividends paid on common shares .27 .23 .23 .23 .23
Book value per common share 15.18 14.82 14.68 15.04 14.40
NOTE: Fully diluted earnings per share, excluding nonrecurring items, were $.70 in the third quarter of 1996 and $.59 in the
third quarter of 1995.
- 6 -
</TABLE>
<PAGE>
<TABLE>
QUARTERLY PERFORMANCE SUMMARY B. Gloyden Stewart, Jr.
Southern National Corporation (NYSE:SNB) Senior Vice President (919) 246-4219
Page 7 Investor Relations (919) 246-4871
As of / For the Quarter Ended
<CAPTION>
(Dollars in thousands) 9/30/96 6/30/96 3/31/96 12/31/95 9/30/95
SELECTED BALANCE SHEET DATA
End of period balances
<S> <C> <C> <C> <C> <C>
Securities, at carrying value $ 5,616,726 $ 5,261,852 $ 4,835,082 $ 5,355,313 $ 5,379,645
Loans & leases 14,110,996 14,143,518 14,209,510 13,951,991 14,180,917
Allowance for loan & lease losses 184,203 181,269 178,885 175,588 177,149
Other earning assets 7,862 22,209 12,608 120,149 9,310
Total earning assets 19,754,062 19,482,208 19,058,784 19,376,273 19,556,245
Total assets 21,096,557 20,719,452 20,328,588 20,636,430 20,814,751
Noninterest-bearing deposits 2,039,356 1,946,849 1,995,143 1,885,725 1,845,262
Interest-bearing deposits 12,979,056 13,043,835 13,168,170 12,798,331 12,589,778
Total deposits 15,018,412 14,990,684 15,163,313 14,684,056 14,435,040
Short-term borrowed funds 2,095,282 1,906,065 1,676,998 2,595,416 3,112,310
Long-term debt 2,050,211 1,955,559 1,603,346 1,383,935 1,305,282
Total interest-bearing liabilities 17,124,549 16,905,459 16,448,514 16,777,682 17,007,370
Common equity 1,656,806 1,619,030 1,602,601 1,641,279 1,571,547
Preferred equity -- -- -- 70,063 70,689
Total shareholders' equity 1,656,806 1,619,030 1,602,601 1,711,342 1,642,236
Goodwill 38,596 38,681 39,948 41,252 42,574
Core deposit & other intangibles 7,312 7,700 7,809 8,278 8,750
Total intangibles 45,908 46,381 47,757 49,530 51,324
Mortgage servicing rights 35,549 29,786 21,786 18,265 14,245
Negative goodwill 40,732 42,291 43,851 45,410 46,969
Average balances
Securities, at amortized cost $ 5,353,806 $ 4,975,231 $ 4,957,943 $ 5,321,514 $ 5,452,924
Loans & leases 14,145,593 14,269,580 14,021,351 14,051,563 14,020,701
Other earning assets 14,983 10,780 17,560 52,218 31,033
Total earning assets 19,514,382 19,255,591 18,996,854 19,425,295 19,504,658
Total assets 20,703,073 20,400,678 20,154,199 20,579,829 20,745,290
Noninterest-bearing deposits 1,853,529 1,848,295 1,798,323 1,889,603 1,705,197
Interest-bearing deposits 13,139,545 12,741,060 12,706,314 12,332,095 12,506,069
Total deposits 14,993,074 14,589,355 14,504,637 14,221,698 14,211,266
Short-term borrowed funds 1,823,310 2,129,143 2,215,462 3,029,962 3,297,130
Long-term debt 1,977,109 1,779,639 1,511,577 1,376,756 1,309,932
Total interest-bearing liabilities 16,939,964 16,649,842 16,433,353 16,738,813 17,113,131
Common equity 1,642,720 1,631,951 1,592,447 1,610,440 1,552,214
Preferred equity -- -- 60,967 70,176 71,463
Total shareholders' equity 1,642,720 1,631,951 1,653,414 1,680,616 1,623,677
RISK-BASED CAPITAL
Risk-based capital:
Tier 1 $ 1,622,634 $ 1,606,263 $ 1,555,932 $ 1,630,645 $ 1,584,509
Total 2,050,123 2,022,831 1,714,575 1,785,681 1,751,971
Risk-based capital ratios:
Tier 1 11.3 % 11.9 % 12.3 % 13.2 % 12.1 %
Total 14.3 15.0 13.5 14.4 13.4
Leverage capital ratio 7.9 7.9 7.7 7.9 7.7
PERFORMANCE RATIOS
Return on average assets 1.08 % 1.50 % 1.43 % 1.39 % 1.24 %
Return on average common equity 13.55 18.77 17.99 17.50 16.19
Return on average total equity 13.55 18.77 17.48 17.06 15.78
Net yield on earning assets
(taxable equivalent) 4.42 4.49 4.38 4.17 4.04
Efficiency (taxable equivalent) * 53.3 53.0 53.8 51.8 54.0
Equity as a percentage of total assets
end of period 7.9 7.8 7.9 8.3 7.9
Average earning assets as a percentage
of average total assets 94.3 94.4 94.3 94.4 94.0
Average loans & leases as a percentage
of average deposits 94.3 97.8 96.7 98.8 98.7
NOTES: All items referring to loans & leases include loans held for sale & are net of unearned income.
Applicable ratios are annualized.
* Excludes securities gains (losses), foreclosed property expense & nonrecurring items for all periods.
- 7 -
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<PAGE>
<TABLE>
QUARTERLY PERFORMANCE SUMMARY B. Gloyden Stewart, Jr.
Southern National Corporation (NYSE:SNB) Senior Vice President (919) 246-4219
Page 8 Investor Relations (919) 246-4871
(Dollars in thousands, except per share data) As of / For the Quarter Ended
<CAPTION>
9/30/96 6/30/96 3/31/96 12/31/95 9/30/95
ASSET QUALITY ANALYSIS
Allowance For Loan & Lease Losses
<S> <C> <C> <C> <C> <C>
Beginning balance $ 181,269 $ 178,885 $ 175,588 $ 177,149 $ 178,929
Provision for loan & lease losses 13,500 13,261 11,400 11,317 7,933
Charge-offs (15,014) (14,150) (11,161) (15,713) (12,497)
Recoveries 4,448 3,273 3,058 2,835 2,784
Ending balance $ 184,203 $ 181,269 $ 178,885 $ 175,588 $ 177,149
Nonperforming Assets
Nonaccrual loans & leases $ 63,088 $ 68,014 $ 69,473 $ 66,198 $ 65,807
Foreclosed real estate 7,166 4,926 4,938 6,868 6,981
Other foreclosed property 8,609 7,426 6,336 6,784 5,914
Nonperforming assets $ 78,863 $ 80,366 $ 80,747 $ 79,850 $ 78,702
Asset Quality Ratios
Nonaccrual loans & leases as a
percentage of total loans & leases .45 % .48 % .49 % .47 % .46 %
Nonperforming assets as a percentage of:
Total assets .37 .39 .40 .39 .38
Loans & leases plus
foreclosed property .56 .57 .57 .57 .55
Net charge-offs as a percentage of
average loans & leases .30 .31 .23 .36 .27
Allowance for loan & lease losses as
a percentage of loans & leases 1.31 1.28 1.26 1.26 1.25
Ratio of allowance for loan & lease
losses to:
Net charge-offs 4.38 x 4.19 x 5.49 x 3.44 x 4.60 x
Nonaccrual loans & leases 2.92 2.67 2.57 2.65 2.69
MEMO ITEMS
Unrealized (depreciation)
appreciation on securities
available for sale, net of tax $ (11,736) $ (33,614) $ (1,088) $ 31,167 $ 8,321
Common stock prices (daily
close): High 33.88 31.75 29.75 27.00 27.13
Low 28.63 28.88 25.88 25.63 23.63
End of period 33.25 31.75 27.75 26.25 26.25
Weighted average shares -
Primary 110,841,221 110,944,393 108,334,659 110,551,176 110,162,172
Fully diluted 111,013,052 111,230,630 112,109,898 114,895,400 114,996,393
End of period shares outstanding 109,112,010 109,224,753 109,137,735 109,151,655 109,117,898
End of period banking offices 425 432 437 441 447
As of / For the Nine Months Ended Increase / (Decrease)
(Dollars in thousands) 9/30/96 9/30/95 $ %
Allowance For Loan & Lease Losses
Beginning balance $ 175,588 $ 174,102 $ 1,486 .9 %
Provision for loan & lease losses 38,161 23,315 14,846 63.7
Charge-offs (40,325) (29,013) 11,312 39.0
Recoveries 10,779 8,745 2,034 23.3
Ending balance $ 184,203 $ 177,149 $ 7,054 4.0 %
Asset Quality Ratios
Net charge-offs as a percentage of
average loans & leases .28 % .20 %
Ratio of allowance for loan & lease losses to
net charge-offs 4.67 x 6.54 x
NOTES: All items referring to loans & leases include loans held for sale & are net of unearned income.
Applicable ratios are annualized.
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<PAGE>
<TABLE>
QUARTERLY PERFORMANCE SUMMARY B. Gloyden Stewart, Jr.
Southern National Corporation (NYSE:SNB) Senior Vice President (919) 246-4219
Page 9 Investor Relations (919) 246-4871
For the Quarter Ended
<CAPTION>
9/30/96 6/30/96 3/31/96 12/31/95 9/30/95
INTEREST YIELDS/RATES (Taxable equivalent)
Interest income:
<S> <C> <C> <C> <C> <C>
Securities* 6.74 % 6.63 % 6.54 % 6.32 % 6.23 %
Loans & leases 9.10 9.13 9.15 9.20 9.17
Other earning assets 5.79 5.78 5.59 5.79 5.13
Total earning assets* 8.45 8.48 8.46 8.40 8.34
Interest expense:
Interest-bearing deposits 4.37 4.32 4.45 4.57 4.53
Short-term borrowed funds 5.37 5.19 5.36 5.82 5.86
Long-term debt 5.80 5.82 5.87 6.00 6.17
Total interest-bearing liabilities 4.65 4.59 4.70 4.91 4.91
Net yield on earning assets 4.42 % 4.49 % 4.38 % 4.17 % 4.04 %
NOTE: *Yields calculated based on securities at amortized cost.
As of
(Dollars in thousands) 9/30/96
DERIVATIVES: INTEREST RATE SWAPS
Notional Receive Pay Unrealized
Type Amount Rate Rate Gains (Losses)
Receive fixed swaps $ 485,000 6.60 % 5.51 % $ 2,306
Pay fixed swaps 304,610 5.56 5.47 35
Basis swaps 250,000 5.69 5.51 (1,718)
Floors 105,000 -- -- 284
Total $ 1,144,610 6.08 % 5.50 % $ 907
One Year One to After
Contractual Maturity Schedule Total or Less Five Years Five Years
Receive fixed swaps $ 485,000 $ 35,000 $ 200,000 $ 250,000
Pay fixed swaps 304,610 15,604 284,620 4,386
Basis swaps 250,000 -- 250,000 --
Floors 105,000 -- 105,000 --
Total $ 1,144,610 $ 50,604 $ 839,620 $ 254,386
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S I G N A T U R E
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: /S/ SHERRY A. KELLETT
Sherry A. Kellett
Executive Vice President and Controller
(Principal Accounting Officer)
Date: October 11, 1996
