<PAGE>
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 14, 1998
BB&T 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)
(336) 733-2000
(Registrant's telephone number, including area code)
This Form 8-K has 12 pages.
<PAGE>
ITEM 5. OTHER EVENTS
The purpose of this Current Report on Form 8-K is to file BB&T Corporation's
Quarterly Performance Summary for the third quarter of 1998, including sections
distributed to the media and a supplement distributed to analysts.
EXHIBIT INDEX
Exhibit 99.1 Quarterly Performance Summary issued October 13, 1998
<PAGE>
October 13, 1998
FOR IMMEDIATE RELEASE
Contacts:
ANALYSTS MEDIA
Tom A. Nicholson Scott E. Reed Bob Denham
Senior Vice President Senior Executive Vice President Vice President
Investor Relations Chief Financial Officer Public Relations
(336) 733-3058 (336) 733-3088 (336) 733-2202
BB&T reports 24.3% increase in 3rd quarter earnings per share
WINSTON-SALEM, N.C. -- BB&T Corporation (NYSE:BBK) reported today that
earnings for the third quarter of 1998 totaled $132.1 million, or $.46 per
diluted share, before after tax nonrecurring charges of $4.9 million associated
with completing the merger with Franklin Bancorporation, Inc., of Washington,
D.C.
Excluding the expenses related to the Franklin merger, BB&T's earnings per
share increased 24.3% compared to the third quarter of 1997. Results from 1997
exclude nonrecurring charges primarily associated with completing the merger
with United Carolina Bancshares Corporation (UCB). Recurring net income
increased 21.3% compared to the same period a year ago. BB&T's current quarter
results produced a return on average assets of 1.64% and a return on average
equity of 21.41%, compared to prior year ratios of 1.48% and 18.80%,
respectively.
BB&T's "cash basis" operating results (which exclude the effect that
intangible assets and related amortization expense have on net income, total
assets and shareholders' equity) for the three months ended September 30, 1998,
demonstrated significant improvement compared to the third quarter of 1997. Cash
basis net income, excluding nonrecurring items, totaled $137.8 million, or $.48
per diluted share, for the third quarter of 1998, an increase of 22.9% and
23.1%, respectively, over comparable prior year amounts. Cash basis earnings
generated a return on average tangible assets of 1.72% and a return on average
tangible equity of 24.87%.
For the nine months ended September 30, 1998, BB&T's net income was $376.3
million, or $1.29 per diluted share, before nonrecurring charges totaling $11.0
million after tax associated with the acquisition of Life Bancorp, Inc., of
Norfolk, Va., in the first quarter of the year and the merger with Franklin,
completed in the current quarter. These earnings represent an increase of 20.0%
and 20.6%, respectively, over the $313.7 million, or $1.07 per diluted share,
earned in the first nine months of 1997.
MORE
<PAGE>
Including the merger-related expenses, net income for the third quarter of
1998 increased to $127.2 million, or $.44 per diluted share, compared to $66.2
million, or $.23 per diluted share, for the third quarter in 1997, which
included nonrecurring charges of $42.7 million after tax primarily in connection
with completing the merger with UCB. Net income for the nine months ended
September 30, 1998, increased 34.8% to $365.3 million, or $1.25 per diluted
share, compared to $271.0 million, or $.93 per diluted share, for the first nine
months of 1997.
"It is a pleasure to report outstanding third quarter earnings and excellent
progress in our efforts to grow our franchise," said Chairman and Chief
Executive Officer John A. Allison. "We benefited from a strong performance by
our noninterest income-generating business segments, improvement in our net
interest margin, which was 4.40% for the third quarter, and better overall
management of noninterest expenses. Noninterest income grew 33.1% in the third
quarter compared to the same period in 1997 and our cash basis efficiency ratio
improved to 49.8%, which represents a significant achievement for BB&T. This
level of efficiency places BB&T firmly in the top 10% of bank holding
companies."
BB&T completed two acquisitions during the third quarter. On July 1, BB&T
completed its merger with Franklin, which has total assets of $740 million and
operates nine full service branches. The acquisition marked BB&T's initial entry
into the metro Washington, D.C. market. On September 30, BB&T acquired Maryland
Federal Bancorp, Inc., of Hyattsville, Md. Maryland Federal, with $1.2 billion
in assets, conducts operations through 28 branches in Maryland and the greater
Washington, D.C. area.
On August 10, BB&T announced plans to acquire Scott & Stringfellow Financial
Inc., an investment banking firm based in Richmond, Va. Scott & Stringfellow,
with 31 offices in the Carolinas, Virginia and West Virginia, offers a wide
range of investment-related services while managing more than $10 billion in
assets for its corporate and individual customers.
On August 26, BB&T announced that it will acquire MainStreet Financial
Corporation of Martinsville, Va. MainStreet has approximately $2 billion in
assets and operates 49 banking offices: 46 in Virginia and three in Maryland.
This merger will significantly expand BB&T's presence in Virginia and
metropolitan Washington, D.C., where BB&T will operate 137 banking offices and
have approximately $7.4 billion in assets.
"These transactions enhance our market presence in very strong areas in
Virginia, Maryland and Washington, D.C.," said Mr. Allison. "These markets are
among the nation's leaders in per capita income, education, employment and
population growth. We are excited about our prospects for growth and increased
profitability following these acquisitions."
BB&T had $33.9 billion in assets and 540 banking offices in the Carolinas,
Virginia, Maryland and Washington, D.C., as of September 30, 1998. BB&T's common
stock is traded on the New York Stock Exchange under the trading symbol BBK. The
closing price of BB&T's common stock on October 9 was $28.00 per share.
<PAGE>
<TABLE>
QUARTERLY PERFORMANCE SUMMARY Tom A. Nicholson
BB&T Corporation (NYSE:BBK) Senior Vice President (336) 733-3058
Page 3 Investor Relations FAX(336) 733-3132
For the Three Months Ended Increase (Decrease)
<CAPTION>
(Dollars in thousands, except per share data) 9/30/1998 9/30/1997 $ %
INCOME STATEMENT
<S> <C> <C> <C> <C>
Interest income - taxable equivalent $ 639,144 $ 590,527 $ 48,617 8.2 %
Interest expense 309,119 284,195 24,924 8.8
Net interest income - taxable equivalent 330,025 306,332 23,693 7.7
Less: Taxable equivalent adjustment 16,174 14,290 1,884 13.2
Net interest income 313,851 292,042 21,809 7.5
Provision for loan & lease losses 20,015 21,845 (1,830) (8.4)
Net interest income after provision for
loan & lease losses 293,836 270,197 23,639 8.7
Noninterest income 137,091 150,763 (13,672) (9.1)
Noninterest expense 244,365 314,966 (70,601) (22.4)
Income before income taxes 186,562 105,994 80,568 76.0
Provision for income taxes 59,354 39,759 19,595 49.3
Net income $ 127,208 $ 66,235 $ 60,973 92.1 %
PER SHARE DATA
Basic earnings $ .45 $ .23 $ .22 95.7 %
Diluted earnings .44 .23 .21 91.3
Weighted average shares - Basic 284,261,612 285,456,768
Diluted 289,997,773 290,857,220
Dividends paid on common shares $ .175 $ .155 $ .02 12.9 %
PERFORMANCE RATIOS
Return on average assets 1.58 % .90 %
Return on average equity 20.62 11.43
Net yield on earning assets (taxable equivalent) 4.40 4.45
Efficiency (taxable equivalent) * 51.1 51.0
For the Nine Months Ended Increase (Decrease)
(Dollars in thousands, except per share data) 9/30/1998 9/30/1997 $ %
INCOME STATEMENT
Interest income - taxable equivalent $ 1,886,854 $ 1,717,535 $ 169,319 9.9 %
Interest expense 918,007 815,083 102,924 12.6
Net interest income - taxable equivalent 968,847 902,452 66,395 7.4
Less: Taxable equivalent adjustment 47,104 37,918 9,186 24.2
Net interest income 921,743 864,534 57,209 6.6
Provision for loan & lease losses 64,310 68,015 (3,705) (5.4)
Net interest income after provision for
loan & lease losses 857,433 796,519 60,914 7.6
Noninterest income 388,970 346,695 42,275 12.2
Noninterest expense 711,722 725,178 (13,456) (1.9)
Income before income taxes 534,681 418,036 116,645 27.9
Provision for income taxes 169,349 147,058 22,291 15.2
Net income $ 365,332 $ 270,978 $ 94,354 34.8 %
PER SHARE DATA
Basic earnings $ 1.28 $ .94 $ .34 36.2 %
Diluted earnings 1.25 .93 .32 34.4
Weighted average shares - Basic 286,410,415 288,114,906
Diluted 292,505,930 292,933,116
Dividends paid on common shares $ .485 $ .425 $ .06 14.1 %
PERFORMANCE RATIOS
Return on average assets 1.54 % 1.27 %
Return on average equity 19.78 15.75
Net yield on earning assets (taxable equivalent) 4.35 4.48
Efficiency (taxable equivalent) * 51.5 51.4
NOTES: Applicable ratios are annualized. All per share data (and weighted average shares) have been restated to reflect the
2-for-1 stock split effective on August 3, 1998.
* Excludes securities gains (losses), foreclosed property expense & nonrecurring items.
</TABLE>
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<TABLE>
QUARTERLY PERFORMANCE SUMMARY Tom A. Nicholson
BB&T Corporation (NYSE:BBK) Senior Vice President (336) 733-3058
Page 4 Investor Relations FAX(336) 733-3132
For the Three Months Ended Increase (Decrease)
<CAPTION>
(Dollars in thousands, except per share data) 9/30/1998 9/30/1997 $ %
INCOME STATEMENT EXCLUDING NONRECURRING ITEMS
<S> <C> <C> <C> <C>
Interest income - taxable equivalent $ 639,144 $ 590,527 $ 48,617 8.2 %
Interest expense 309,119 284,195 24,924 8.8
Net interest income - taxable equivalent 330,025 306,332 23,693 7.7
Less: Taxable equivalent adjustment 16,174 14,290 1,884 13.2
Net interest income 313,851 292,042 21,809 7.5
Provision for loan & lease losses 20,015 21,845 (1,830) (8.4)
Net interest income after provision for
loan & lease losses 293,836 270,197 23,639 8.7
Noninterest income 137,091 102,980 34,111 33.1
Noninterest expense 237,825 208,861 28,964 13.9
Income before income taxes 193,102 164,316 28,786 17.5
Provision for income taxes 60,965 55,403 5,562 10.0
Net income excluding nonrecurring items 132,137 108,913 23,224 21.3
Nonrecurring items, net of tax 4,929 42,678 (37,749) NM
Net income $ 127,208 $ 66,235 60,973 92.1 %
PER SHARE DATA EXCLUDING NONRECURRING ITEMS
Basic earnings $ .46 $ .38 $ .08 21.1 %
Diluted earnings .46 .37 .09 24.3
Weighted average shares - Basic 284,261,612 285,456,768
Diluted 289,997,773 290,857,220
Dividends paid on common shares $ .175 $ .155 $ .02 12.9 %
PERFORMANCE RATIOS EXCLUDING NONRECURRING ITEMS
Return on average assets 1.64 % 1.48 %
Return on average equity 21.41 18.80
Net yield on earning assets (taxable equivalent) 4.40 4.45
Efficiency (taxable equivalent) * 51.1 51.0
For the Nine Months Ended Increase (Decrease)
(Dollars in thousands, except per share data) 9/30/1998 9/30/1997 $ %
INCOME STATEMENT EXCLUDING NONRECURRING ITEMS
Interest income - taxable equivalent $ 1,886,854 $ 1,717,535 $ 169,319 9.9 %
Interest expense 918,007 815,083 102,924 12.6
Net interest income - taxable equivalent 968,847 902,452 66,395 7.4
Less: Taxable equivalent adjustment 47,104 37,918 9,186 24.2
Net interest income 921,743 864,534 57,209 6.6
Provision for loan & lease losses 64,310 68,015 (3,705) (5.4)
Net interest income after provision for
loan & lease losses 857,433 796,519 60,914 7.6
Noninterest income 388,970 298,912 90,058 30.1
Noninterest expense 697,367 619,073 78,294 12.6
Income before income taxes 549,036 476,358 72,678 15.3
Provision for income taxes 172,752 162,702 10,050 6.2
Net income excluding nonrecurring items 376,284 313,656 62,628 20.0
Nonrecurring items, net of tax 10,952 42,678 (31,726) NM
Net income $ 365,332 $ 270,978 $ 94,354 34.8 %
PER SHARE DATA EXCLUDING NONRECURRING ITEMS
Basic earnings $ 1.31 $ 1.09 $ .22 20.2 %
Diluted earnings 1.29 1.07 .22 20.6
Weighted average shares - Basic 286,410,415 288,114,906
Diluted 292,505,930 292,933,116
Dividends paid on common shares $ .485 $ .425 $ .06 14.1 %
PERFORMANCE RATIOS EXCLUDING NONRECURRING ITEMS
Return on average assets 1.58 % 1.47 %
Return on average equity 20.37 18.23
Net yield on earning assets (taxable equivalent) 4.35 4.48
Efficiency (taxable equivalent) * 51.5 51.4
NOTES: Applicable ratios are annualized. All per share data (and weighted average shares) have been restated to reflect the
2-for-1 stock split effective on August 3, 1998.
* Excludes securities gains (losses), foreclosed property expense & nonrecurring items for all periods.
NM - not meaningful.
</TABLE>
<PAGE>
<TABLE>
QUARTERLY PERFORMANCE SUMMARY Tom A. Nicholson
BB&T Corporation (NYSE:BBK) Senior Vice President (336) 733-3058
Page 5 Investor Relations FAX(336) 733-3132
<CAPTION>
As of / For the Nine Months Ended Increase (Decrease)
(Dollars in thousands) 9/30/1998 9/30/1997 $ %
SELECTED BALANCE SHEET DATA
End of period balances
<S> <C> <C> <C> <C>
Securities, at carrying value $ 8,270,849 $ 7,354,988 $ 915,861 12.5 %
Loans & leases 23,138,218 20,119,225 3,018,993 15.0
Allowance for loan & lease losses 313,769 270,068 43,701 16.2
Other earning assets 241,785 70,314 171,471 243.9
Total earning assets 31,498,647 27,472,966 4,025,681 14.7
Total assets 33,875,788 29,205,372 4,670,416 16.0
Noninterest-bearing deposits 3,026,236 2,776,847 249,389 9.0
Interest-bearing deposits 19,071,419 17,652,913 1,418,506 8.0
Total deposits 22,097,655 20,429,760 1,667,895 8.2
Short-term borrowed funds 4,087,763 2,827,590 1,260,173 44.6
Long-term debt 4,386,201 3,251,531 1,134,670 34.9
Total interest-bearing liabilities 27,545,383 23,732,034 3,813,349 16.1
Total shareholders' equity $ 2,738,472 $ 2,280,803 $ 457,669 20.1 %
Average balances
Securities, at amortized cost $ 7,616,748 $ 7,239,229 $ 377,519 5.2 %
Loans & leases 21,924,505 19,566,542 2,357,963 12.1
Other earning assets 186,068 80,520 105,548 131.1
Total earning assets 29,727,321 26,886,291 2,841,030 10.6
Total assets 31,781,170 28,517,575 3,263,595 11.4
Noninterest-bearing deposits 2,846,159 2,617,205 228,954 8.7
Interest-bearing deposits 18,356,880 17,769,602 587,278 3.3
Total deposits 21,203,039 20,386,807 816,232 4.0
Short-term borrowed funds 3,732,965 2,770,875 962,090 34.7
Long-term debt 3,858,294 2,727,802 1,130,492 41.4
Total interest-bearing liabilities 25,948,139 23,268,279 2,679,860 11.5
Total shareholders' equity $ 2,469,469 $ 2,300,780 $ 168,689 7.3 %
NOTES: All items referring to loans & leases include loans held for sale & are net of unearned income.
</TABLE>
<PAGE>
<TABLE>
QUARTERLY PERFORMANCE SUMMARY Tom A. Nicholson
BB&T Corporation (NYSE:BBK) Senior Vice President (336) 733-3058
Page 6 Investor Relations FAX(336) 733-3132
As of / For the Quarter Ended
<CAPTION>
(Dollars in thousands, except per share data) 9/30/1998 6/30/1998 3/31/1998 12/31/1997 9/30/1997
INCOME STATEMENTS EXCLUDING
NONRECURRING ITEMS
Interest income - taxable equivalent
<S> <C> <C> <C> <C> <C>
Interest & fees on loans & leases $ 510,077 $ 497,138 $ 484,365 $ 472,183 $ 463,098
Interest & dividends on securities 127,019 129,900 130,509 127,542 126,630
Interest on short-term investments 2,048 2,801 2,997 1,761 799
Total interest income - taxable equivalent 639,144 629,839 617,871 601,486 590,527
Interest expense
Interest on deposits 202,862 201,654 198,216 197,319 197,722
Interest on short-term borrowed funds 46,501 53,217 48,244 44,115 40,353
Interest on long-term debt 59,756 53,698 53,859 50,446 46,120
Total interest expense 309,119 308,569 300,319 291,880 284,195
Net interest income - taxable equivalent 330,025 321,270 317,552 309,606 306,332
Less: Taxable equivalent adjustment 16,174 15,692 15,238 15,369 14,290
Net interest income 313,851 305,578 302,314 294,237 292,042
Provision for loan & lease losses 20,015 21,955 22,340 22,443 21,845
Net interest income after provision for
loan & lease losses 293,836 283,623 279,974 271,794 270,197
Noninterest income
Service charges on deposits 42,854 42,254 41,466 37,844 37,087
Mortgage banking activities 22,485 22,688 15,263 13,381 13,439
Trust revenue 8,997 8,006 7,819 8,097 8,498
Agency insurance commissions 12,346 12,180 14,036 9,664 9,775
Other insurance commissions 2,798 3,210 2,979 3,564 2,696
Other nondeposit fees & commissions 29,760 27,457 24,837 24,729 22,870
Securities gains, net 2,064 1,188 2,460 1,696 1,016
Other income 15,787 13,253 12,783 12,946 7,599
Total noninterest income 137,091 130,236 121,643 111,921 102,980
Noninterest expense
Personnel expense 120,145 118,182 115,051 108,771 106,337
Occupancy & equipment expense 39,518 39,971 37,083 36,115 35,556
Foreclosed property expense 217 635 828 948 707
Amortization of intangibles
& servicing rights 11,058 11,027 10,167 7,191 6,129
Other noninterest expense 66,887 64,883 61,715 60,231 60,132
Total noninterest expense 237,825 234,698 224,844 213,256 208,861
Income before income taxes 193,102 179,161 176,773 170,459 164,316
Provision for income taxes 60,965 56,478 55,309 55,576 55,403
Net income $ 132,137 $ 122,683 $ 121,464 $ 114,883 $ 108,913
PER SHARE DATA EXCLUDING
NONRECURRING ITEMS
Basic earnings $ .46 $ .43 $ .42 $ .40 $ .38
Diluted earnings .46 .42 .41 .39 .37
Dividends paid .175 .155 .155 .155 .155
Book value $ 9.42 $ 8.62 $ 8.62 $ 8.46 $ 8.01
NOTES: Applicable ratios are annualized. All per share data (and weighted average shares) have been restated to reflect the
2-for-1 stock split effective on August 3, 1998.
</TABLE>
<PAGE>
<TABLE>
QUARTERLY PERFORMANCE SUMMARY Tom A. Nicholson
BB&T Corporation (NYSE:BBK) Senior Vice President (336) 733-3058
Page 7 Investor Relations FAX(336) 733-3132
As of / For the Quarter Ended
<CAPTION>
(Dollars in thousands) 9/30/1998 6/30/1998 3/31/1998 12/31/1997 9/30/1997
PERFORMANCE RATIOS EXCLUDING
NONRECURRING ITEMS
<S> <C> <C> <C> <C> <C>
Return on average assets 1.64 % 1.53 % 1.57 % 1.52 % 1.48 %
Return on average equity 21.41 19.97 19.73 19.62 18.80
Net yield on earning assets (taxable equivalent) 4.40 4.29 4.37 4.37 4.45
Efficiency (taxable equivalent) * 51.1 52.0 51.3 50.6 51.0
Noninterest income as a percentage of total
income (taxable equivalent) * 29.0 28.7 27.3 26.3 25.0
Equity as a percentage of total assets
end of period 8.1 7.7 7.7 7.8 7.8
Average earning assets as a percentage
of average total assets 93.5 93.7 93.4 93.8 94.2
Average loans & leases as a percentage
of average deposits 104.5 103.6 102.1 100.5 98.0
CASH BASIS PERFORMANCE**
Net income excluding nonrecurring items $ 137,769 $ 127,931 $ 126,517 $ 118,719 $ 112,141
Diluted earnings per share .48 .44 .43 .41 .39
Return on average tangible assets 1.72 % 1.61 % 1.65 % 1.58 % 1.53 %
Return on average tangible equity 24.87 22.97 22.62 21.77 20.55
Efficiency ratio (taxable equivalent) * 49.8 50.8 50.1 49.6 50.2
SELECTED BALANCE SHEET DATA
End of period balances
Securities, at carrying value $ 8,270,849 $ 7,539,724 $ 7,969,566 $ 7,594,263 $ 7,354,988
Loans & leases 23,138,218 22,288,027 21,839,178 21,233,870 20,119,225
Allowance for loan & lease losses 313,769 294,226 286,742 279,596 270,068
Other earning assets 241,785 187,795 209,915 302,867 70,314
Total earning assets 31,498,647 29,935,288 29,939,448 29,049,751 27,472,966
Total assets 33,875,788 32,159,363 32,148,679 31,290,247 29,205,372
Noninterest-bearing deposits 3,026,236 2,998,966 2,906,193 2,973,151 2,776,847
Interest-bearing deposits 19,071,419 18,582,154 18,322,232 18,402,823 17,652,913
Total deposits 22,097,655 21,581,120 21,228,425 21,375,974 20,429,760
Short-term borrowed funds 4,087,763 3,534,220 4,198,477 3,493,199 2,827,590
Long-term debt 4,386,201 4,081,840 3,740,225 3,534,203 3,251,531
Total interest-bearing liabilities 27,545,383 26,198,214 26,260,934 25,430,225 23,732,034
Total shareholders' equity 2,738,472 2,465,782 2,482,561 2,439,110 2,280,803
Goodwill 388,294 235,561 215,365 206,997 111,568
Core deposit & other intangibles 6,180 6,502 6,461 6,837 7,213
Total intangibles 394,474 242,063 221,826 213,834 118,781
Mortgage servicing rights 98,433 87,519 72,353 68,780 64,911
Negative goodwill $ 28,310 $ 29,871 $ 31,431 $ 32,992 $ 34,494
Average balances
Securities, at amortized cost $ 7,461,704 $ 7,725,496 $ 7,665,281 $ 7,389,149 $ 7,383,652
Loans & leases 22,271,025 22,105,607 21,387,170 20,561,612 19,989,459
Other earning assets 149,583 201,021 208,245 132,185 62,546
Total earning assets 29,882,312 30,032,124 29,260,696 28,082,946 27,435,657
Total assets 31,952,749 32,068,458 31,315,298 29,939,928 29,124,995
Noninterest-bearing deposits 2,933,474 2,868,428 2,734,387 2,754,793 2,679,346
Interest-bearing deposits 18,384,264 18,468,089 18,216,443 17,698,977 17,720,933
Total deposits 21,317,738 21,336,517 20,950,830 20,453,770 20,400,279
Short-term borrowed funds 3,488,026 4,029,351 3,683,668 3,313,540 3,031,576
Long-term debt 4,167,594 3,700,977 3,701,186 3,358,158 3,068,112
Total interest-bearing liabilities 26,039,884 26,198,417 25,601,297 24,370,675 23,820,621
Total shareholders' equity $ 2,448,113 $ 2,463,748 $ 2,497,084 $ 2,323,200 $ 2,298,912
RISK-BASED CAPITAL***
Risk-based capital:
Tier 1 $ 2,244,330 $ 2,166,004 $ 2,209,375 $ 2,153,212 $ 2,093,592
Total 3,334,852 3,291,604 2,968,844 2,909,563 2,848,266
Risk-based capital ratios:
Tier 1 10.0 % 10.2 % 10.5 % 10.3 % 10.1 %
Total 14.8 15.5 14.0 13.9 13.7
Leverage capital ratio 7.1 6.8 7.1 7.3 7.2
NOTES: All items referring to loans & leases include loans held for sale & are net of unearned income.
Applicable ratios are annualized. All per share data (and weighted average shares) have been restated to reflect the
2-for-1 stock split effective on August 3, 1998.
* Excludes securities gains (losses), foreclosed property expense & nonrecurring items for all periods.
** Cash basis operating results exclude the effect on earnings of amortization expense applicable to intangible assets
that do not qualify as regulatory capital. Cash basis performance ratios exclude the effect of amortization of
nonqualifying intangible assets from earnings and the unamortized balances of nonqualifying intangibles from assets and
equity.
*** Current quarter estimated.
</TABLE>
<PAGE>
<TABLE>
QUARTERLY PERFORMANCE SUMMARY Tom A. Nicholson
BB&T Corporation (NYSE:BBK) Senior Vice President (336) 733-3058
Page 8 Investor Relations FAX(336) 733-3132
As of / For the Quarter Ended
<CAPTION>
(Dollars in thousands, except per share data) 9/30/1998 6/30/1998 3/31/1998 12/31/1997 9/30/1997
ASSET QUALITY ANALYSIS
Allowance For Loan & Lease Losses
<S> <C> <C> <C> <C> <C>
Beginning balance $ 294,226 $ 286,742 $ 279,596 $ 270,068 $ 264,826
Allowance for acquired loans 15,542 1,269 - 12,012 1,690
Provision for loan & lease losses 20,015 21,955 22,340 29,995 21,845
Charge-offs (21,220) (20,782) (20,681) (36,183) (22,920)
Recoveries 5,206 5,042 5,487 3,704 4,627
Ending balance $ 313,769 $ 294,226 $ 286,742 $ 279,596 $ 270,068
Nonperforming Assets
Nonaccrual loans & leases $ 83,623 $ 78,919 $ 92,971 $ 99,938 $ 74,735
Foreclosed real estate 20,570 19,476 15,477 20,937 16,531
Other foreclosed property 11,322 13,911 14,603 13,986 13,914
Restructured loans 525 528 - 1,377 1,532
Nonperforming assets $ 116,040 $ 112,834 $ 123,051 $ 136,238 $ 106,712
Loans 90 days or more past due
& still accruing $ 46,873 $ 48,947 $ 42,257 $ 44,362 $ 40,075
Asset Quality Ratios
Nonaccrual loans & leases as a
percentage of total loans & leases .36 % .35 % .43 % .47 % .37 %
Nonperforming assets as a percentage of:
Total assets .34 .35 .38 .44 .37
Loans & leases plus
foreclosed property .50 .51 .56 .64 .53
Net charge-offs as a percentage of
average loans & leases .29 .29 .29 .63 .36
Allowance for loan & lease losses as
a percentage of loans & leases 1.36 1.32 1.31 1.32 1.34
Ratio of allowance for loan & lease losses to:
Net charge-offs 4.94 x 4.66 x 4.65 x 2.17 x 3.72 x
Nonaccrual and restructured loans & leases 3.73 3.70 3.08 2.76 3.54
MEMO ITEMS
Unrealized appreciation on securities
available for sale, net of tax $ 92,472 $ 49,739 $ 48,122 $ 49,368 $ 43,433
Common stock prices (daily close): High 36.03 34.06 33.84 32.50 27.56
Low 28.00 32.03 29.03 25.97 22.66
End of period $ 29.94 $ 33.81 $ 33.84 $ 32.03 $ 26.72
Weighted average shares - Basic 284,261,612 286,202,810 288,816,880 285,598,814 285,456,768
Diluted 289,997,773 292,403,822 295,173,066 291,097,614 290,857,220
End of period shares outstanding* 290,805,799 142,974,787 144,061,025 144,084,236 142,333,251
End of period banking offices 540 524 527 532 512
As of / For the Nine Months Ended Increase / (Decrease)
(Dollars in thousands) 9/30/1998 9/30/1997 $ %
Allowance For Loan & Lease Losses
Beginning balance $ 279,596 $ 243,568 $ 36,028 14.8 %
Allowance for acquired loans 16,811 5,501 11,310 205.6
Provision for loan & lease losses 64,310 68,015 (3,705) (5.4)
Charge-offs (62,683) (61,646) 1,037 1.7
Recoveries 15,735 14,630 1,105 7.6
Ending balance $ 313,769 $ 270,068 $ 45,775 16.9 %
Asset Quality Ratios
Net charge-offs as a percentage of
average loans & leases .29 % .32 %
Ratio of allowance for loan & lease losses to
net charge-offs 5.00 x 4.30 x
NOTES: All items referring to loans & leases include loans held for sale & are net of unearned income.
Applicable ratios are annualized. All per share data (and weighted average shares) have been restated to reflect the
2-for-1 stock split effective on August 3, 1998.
*End of period shares reflect the 2-for-1 stock split following the August 3, 1998, effective date. Shares reflected prior
to the effective date are stated as originally reported.
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<PAGE>
<TABLE>
QUARTERLY PERFORMANCE SUMMARY Tom A. Nicholson
BB&T Corporation (NYSE:BBK) Senior Vice President (336) 733-3058
Page 9 Investor Relations FAX(336) 733-3132
For the Quarter Ended
<CAPTION>
9/30/1998 6/30/1998 3/31/1998 12/31/1997 9/30/1997
INTEREST YIELDS/RATES (Taxable equivalent)
Interest income:
<S> <C> <C> <C> <C> <C>
Securities* 6.80 % 6.73 % 6.83 % 6.90 % 6.86 %
Loans & leases 9.10 9.01 9.16 9.12 9.21
Other earning assets 5.43 5.59 5.84 5.29 5.07
Total earning assets* 8.51 8.40 8.52 8.52 8.57
Interest expense:
Interest-bearing deposits 4.38 4.38 4.41 4.42 4.43
Short-term borrowed funds 5.29 5.30 5.31 5.28 5.28
Long-term debt 5.71 5.81 5.87 5.98 5.98
Total interest-bearing liabilities 4.71 4.72 4.75 4.75 4.74
Net yield on earning assets 4.40 % 4.29 % 4.37 % 4.37 % 4.45 %
NOTE: *Yields calculated based on securities at amortized cost.
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<TABLE>
As of
(Dollars in thousands) 9/30/1998
DERIVATIVES: INTEREST RATE SWAPS, CAPS, FLOORS & COLLARS
Notional Receive Pay Unrealized
Type Amount Rate Rate Gains (Losses)
<S> <C> <C> <C> <C>
Receive fixed swaps $ 1,110,600 6.45 % 5.64 % $ 52,283
Pay fixed swaps 1,104,298 5.66 5.71 (6,420)
Basis swaps 100,000 5.77 5.59 (1)
Caps, floors & collars 1,247,250 -- -- 258
Total $ 3,562,148 6.04 % 5.67 % $ 46,120
One Year One to After
Contractual Maturity Schedule Total or Less Five Years Five Years
Receive fixed swaps $ 1,110,600 $ 550,600 $ 300,000 $ 260,000
Pay fixed swaps 1,104,298 1,010,600 62,820 30,878
Basis swaps 100,000 100,000 -- --
Caps, floors & collars 1,247,250 500,000 747,250 --
Total $ 3,562,148 $ 2,161,200 $ 1,110,070 $ 290,878
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<PAGE>
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.
BB&T CORPORATION
(Registrant)
By: /S/ SHERRY A. KELLETT
Sherry A. Kellett
Executive Vice President and Controller
(Principal Accounting Officer)
Date: October 14, 1998
