<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
April 28, 1999
Date of Report (Date of earliest event recorded)
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 36 pages.
================================================================================
<PAGE>
Item 5. Other Events
The purpose of this Current Report on Form 8-K is to announce that BB&T
Corporation ("BB&T") has entered into a definitive agreement to acquire First
Liberty Financial Corp. ("First Liberty") of Macon, Georgia, in a $500 million
stock swap that will give BB&T its second Georgia bank.
First Liberty, with $1.7 billion in assets, operates 39 banking offices
and 13 consumer finance offices in Macon and Savannah, Georgia, and neighboring
areas. Its principal subsidiaries include First Liberty Mortgage Corp. and OFC
Capital Corp., an equipment leasing subsidiary.
The transaction, approved by the directors of both companies, will be
accounted for as a pooling of interests. Based on BB&T's closing price of $39.00
on Monday, April 26, 1999, First Liberty shareholders will receive .8525 shares
of BB&T common stock for each First Liberty share, worth $33.25.
The final exchange ratio will be determined based on a pricing period
prior to closing. First Liberty shareholders will receive $33.25 worth of BB&T
common stock if BB&T's average price during the pricing period is between $38.22
and $39.12. If BB&T's price is less than $38.22, shareholders will receive a
fixed exchange ratio of 0.87. If BB&T's price is more than $39.12, they will
receive a fixed exchange ratio of 0.85.
First Liberty President and Chief Executive Officer Robert Hatcher will
be named president of BB&T's Georgia Operations. BB&T's newest region will be
headquartered in Macon and First Liberty Executive Vice President Larry Flowers
will be named its president.
First Liberty operates banking offices in Macon and Savannah, and the
following locations: Adel, Butler, Byron, Douglas, Forsyth, Fort Valley,
Milledgeville, Nashville, Roberta, Swainsboro, Sylvania, Tifton, Valdosta,
Vidalia, Warner Robins and Waycross.
The merger, which is subject to the approval of the First Liberty
shareholders and banking regulators, is expected to be completed in the fourth
quarter of 1999.
Item 7. Exhibits
99.1 Analyst Presentation Materials
<PAGE>
SIGNATURE
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
Senior Executive Vice President
and Controller
(Principal Accounting Officer)
Date: April 28, 1999.
<PAGE>
BB&T
and
First Liberty Financial Corp.
Macon, Georgia
Expanding a Great Franchise
Analyst Presentation
April 28, 1999
<PAGE>
Forward-Looking Information
BB&T has made forward-looking statements in the accompanying analyst
presentation materials that are subject to risks and uncertainties. These
statements are based on the beliefs and assumptions of the management of BB&T,
and on the information available to management at the time the analyst
presentation materials were prepared. In particular, the analyst materials in
this report include statements regarding estimated earnings per share of BB&T on
a stand alone basis, expected cost savings from the merger, estimated
restructuring charges relating to the merger, estimated increases in First
Liberty's fee income ratio, the anticipated accretive effect of the merger, and
BB&T's anticipated performance in future periods. With respect to estimated
cost savings and restructuring charges, BB&T has made assumptions about, among
other things, the extent of operational overlap between BB&T and First Liberty,
the amount of general and administrative expense consolidation, costs relating
to converting First Liberty's bank operations and data processing to BB&T's
systems, the size of anticipated reductions in fixed labor costs, the amount of
severance expenses, the extent of the charges that may be necessary to align the
companies' respective accounting reserve policies, and the cost related to the
merger. The realization of cost savings and the amount of restructuring charges
are subject to the risk that the foregoing assumptions are inaccurate.
Any statements in the accompanying exhibit regarding the anticipated accretive
effect of the merger and BB&T's anticipated performance in future periods are
subject to risks relating to, among other things, the following possibilities:
(1) expected cost savings from this merger or other previously-announced mergers
may not be fully realized or realized within the expected time frame; (2)
deposit attrition, customer loss or revenue loss following proposed mergers may
be greater than expected; (3) competitive pressure among depository and other
financial institutions may increase significantly; (4) costs or difficulties
related to the integration of the businesses of BB&T and its merger partners,
including First Liberty, may be greater than expected; (5) changes in the
interest rate environment may reduce margins; (6)general economic or business
conditions, either nationally or regionally, may be less favorable than
expected, resulting in, among other things, a deterioration in credit quality,
or a reduced demand for credit; (7) legislative or regulatory changes, including
changes in accounting standards, may adversely affect the businesses in which
BB&T and First Liberty are engaged; (8) adverse changes may occur in the
securities markets; and (9) competitors of BB&T and First Liberty may have
greater financial resources and develop products that enable such competitors to
compete more successfully than BB&T and First Liberty.
BB&T believes these forward-looking statements are reasonable; however, undue
reliance should not be placed on such forward-looking statements, which are
based on current expectations. Such statements are not guarantees of
performance. They involve risks, uncertainties and assumptions. The future
results and shareholder values of BB&T following completion of the merger may
differ materially from those expressed in these forward-looking statements.
Many of the factors that will determine these results and values are beyond
management's ability to control or predict.
2
<PAGE>
Outline
. Background and transaction terms
. Financial data
. Rationale and strategic objectives
. Investment criteria
. Summary
3
<PAGE>
BB&T Corporation
(BB&T)
. $40.1 billion bank holding company*
. 637 branch locations in NC, SC, VA, GA, MD, WV, KY and the District of
Columbia*
For 3 months
ended 3/31/99**
-----------------
. ROA 1.65%
. Cash Basis ROA 1.77%
. ROE 20.54%
. Cash Basis ROE 25.38%
. Efficiency ratio 50.65%
- -------------
* Includes the pending acquisitions of Mason-Dixon Bancshares,
First Citizens Corporation and Matewan BancShares.
** Recurring earnings
4
<PAGE>
First Liberty Financial Corp.
(FLFC)
. $1.7 billion savings bank holding company
. 39 banking offices in Georgia
. 13 consumer finance offices
. Correspondent mortgage originations in 16 states
For 3 months
ended 3/31/99
---------------
. ROA 1.30%
. ROE 16.20%
. Efficiency ratio 57.54%
5
<PAGE>
Pro Forma Company Profile
March 31, 1999
. Size: $41.8 billion in assets*
$12.8 billion in market capitalization**
. Offices NC: 345
VA: 113
SC: 90
MD: 53
GA: 52
KY: 10
WV: 7
DC: 6
---------------
Total: 676
- ----------
* Includes total assets for First Liberty Financial Corp., Mason-Dixon
Bancshares, Inc., First Citizens Corporation, and Matewan BancShares, Inc.
** Based on 4/26/99 closing prices. Includes shares outstanding for First
Liberty Financial Corp., Mason-Dixon Bancshares, Inc., First Citizens
Corporation, and Matewan BancShares, Inc.
6
<PAGE>
Terms of the Transaction
. Purchase price: $33.25 per share [1]
. Aggregate value: $500.0 million [1] (including options)
. Consideration: Shareholders will receive $33.25 per FLFC share if
BB&T's average price during the pricing period is
between $38.22 and $39.12. If BB&T's price is below
$38.22 First Liberty shareholders will receive a
fixed exchange ratio of .87 and if BB&T's price is
above $39.12 they will receive a fixed exchange
ratio of .85.
. Structure: Tax-free exchange of stock equal to 100% of
purchase price
. Accounting treatment: Transaction will be accounted for as a
pooling-of-interests
. Lock-up provision: Stock option agreement
[1] Based on BB&T's closing stock price of $39.00 on April 26, 1999.
7
<PAGE>
Pricing
. Purchase price $33.25
. Premium / market 46.14%
. Price / 3-31-99 stated book 3.53x
. Price / LTM recurring EPS 24.27x
. BB&T shares issued 12.8 million*
* BB&T shares issued based on FLFC shares outstanding adjusted for stock
options.
8
<PAGE>
Acquisition Comparables [1]
Bank and Thrift Acquisitions with Deal Values of $240 Million to $750 Million
Announce Since 3-31-98
<TABLE>
<CAPTION>
Total Deal Pr/
Bank/ Assets Date Deal Deal Deal Pr/ 4-Qtr
Buyer Seller Thrift Seller Announced Value Pr/Bk Tg Bk EPS
($000) ($M) (%) (%) (x)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Old Kent Finl Corp. CFSB Bancorp Inc. Thrift 880,347 02/24/99 243.2 333.0 333.0 20.5
Union Planters Corp. Republic Bnkg Corp. Bank 1,542,658 02/22/99 412.0 241.8 259.8 25.0
Summit Bancorp Prime Bancorp Inc. Bank 1,039,340 02/18/99 302.6 324.9 335.2 24.6
U.S. Bancorp Bank of Commerce Bank 638,166 02/18/99 306.3 455.4 455.4 22.5
BB&T Corp. Mason-Dixon Bcshs Bank 1,083,283 01/28/99 247.2 299.2 326.4 23.4
Chittenden Corp. Vermont Financial Bank 2,110,300 12/16/98 454.2 208.2 285.6 27.9
Sky Financial Group First Western Bncp Bank 2,203,139 12/14/98 424.5 280.0 479.9 22.0
Republic Bancorp D&N Financial Corp. Thrift 1,998,299 12/01/98 293.6 246.7 265.1 18.2
Sovereign Bancorp Peoples Bancorp Inc. Thrift 873,466 09/08/98 379.4 111.7 115.1 45.0
BB&T Corp. MainStreet Financial Bank 2,041,955 08/27/98 539.7 320.5 340.3 27.4
First Merit Corp. Signal Corp. Bank 1,519,719 08/11/98 473.0 321.9 466.9 23.4
City Holdings Company Horizon Bancorp Inc. Bank 1,043,327 08/07/98 413.4 360.9 378.8 29.4
Banknorth Group Inc. Evergreen Bancorp Bank 1,048,307 07/31/98 318.7 351.3 352.0 26.9
Peoples Heritage Fin SIS Bancorp Inc. Thrift 1,793,968 07/20/98 430.0 312.8 312.8 32.3
First Commonwealth Southwest Natl Corp. Bank 742,106 07/16/98 269.8 325.5 326.2 30.8
First American Corp. Pioneer Bancshares Bank 993,087 05/28/98 292.0 284.3 300.8 29.7
Republic Security First Palm Beach Bcp Thrift 1,791,370 05/28/98 299.1 237.9 243.1 30.8
Old Kent Finl Corp. First Evergreen Corp Bank 1,933,096 04/21/98 482.3 243.5 247.8 26.7
Star Banc Corp. Trans Financial Inc. Bank 2,115,011 04/09/98 695.8 433.8 461.9 27.9
FirstMerit Corp. Security First Corp. Thrift 677,876 04/05/98 255.1 349.4 354.9 27.4
Maximum 2,203.139 695.8 455.4 479.9 45.0
Minimum 638,166 243.2 111.7 115.1 18.2
Average 1,403,441 376.6 302.1 332.0 27.1
Median 1,301,501 349.1 316.6 329.7 27.1
BB&T Base Model First Liberty Financial Corp. $1,664,348 500.0 352.6 383.9 26.8 *
Over / (Under) Average Comparable 50.5 51.9 (0.3)
* Based on First Liberty's reported earnings for the four quarters ending 3-31-99 of $1.24.
BB&T Base Model First Liberty Financial Corp. $1,664,348 500.0 352.6 383.9 24.3 *
Over / (Under) Average Comparable 50.5 51.9 (2.8)
* Based on First Liberty's recurring earnings for the four quarters ending 3-31-99 of $1.37.
</TABLE>
[1] Source for Acquisition Comparables: SNL Securities.
9
<PAGE>
Financial Data
10
<PAGE>
Financial Summary
For Quarter Ended: 3/31/99 3/31/99
BB&T [1] FLFC
------- -------
ROA 1.65% 1.30%
ROE 20.54 16.20
Net interest margin (FTE) 4.28 3.81
Efficiency ratio 50.65 57.54
Net charge-offs / avg. loans .21 .49
Allowance / nonperf. Loans 388.59 141.58
Nonperf. Assets / total assets .31 .87
[1] Recurring earnings
11
<PAGE>
Capital Strength
BB&T FLFC
(3/31/99) (3/31/99)
-------- --------
Shareholders' equity / total assets 7.8% 8.0%
Leverage capital ratio 6.9% 7.7%
total risk-based capital ratio 14.1% 12.5%
12
<PAGE>
Rationale for Acquisition
. BB&T has an announced strategy to pursue in-market and contiguous state
acquisitions of high quality banks and thrifts in the $250 million to $10
billion range. The acquisition of First Liberty is consistent with this
strategy.
. This acquisition is very consistent with past acquisitions which we have
successfully executed, i.e. it fits our model.
. BB&T and First Liberty share similar cultures.
. First Liberty provides BB&T with entry into the Macon and Savannah, Georgia
markets.
13
<PAGE>
Strategic Objectives
. The key strategic objectives in this acquisition are:
- Entry into the Macon and Savannah, Georgia markets
- Grow fee income using BB&T's wider array of fee-based services
- Improve efficiency
- 25% cost savings fully realized in the year 2000
- Develop additional commercial relationships using BB&T's product
offerings
14
<PAGE>
Franchise Enhancement
. Market extension merger into the Macon and Savannah, Georgia markets
. Expand BB&T's community bank in Georgia
. Gives BB&T an enhanced base for future market expansion opportunities in
Georgia
. Extends BB&T's presence into additional economically vital Georgia markets
. Savannah is a natural extension of BB&T's Coastal SC markets.
15
<PAGE>
Grow Fee Income
BB&T FLFC
3/31/99 3/31/99
------- -------
Fee income ratio 30.8% 20.2%
Goal to raise FLFC's fee income ratio by leveraging BB&T's sales management
system and broader product selection
16
<PAGE>
Efficiency Improvement
Targeted Anual Cost Savings
---------------------------
$11.4 million or approximately 25% of FLFC's expense base
17
<PAGE>
After-Tax One-Time Charges
One-time merger-related charges
-------------------------------
$11 million
18
<PAGE>
Branch Locations
[Map of Mid-Atlantic United States showing branch locations]
[icon] BB&T Branches
[icon] MainStreet Financial Branches (BB&T Pending Conversion)
[icon] First Citizens Corporation Branches (BB&T Pending Conversion)
[icon] Mason-Dixon Bancshares Branches (BB&T Pending Conversion)
[icon] Matewan Bancshares Branches
[icon] Fist Liberty Financial Corp. Branches
19
<PAGE>
Economic Vitality Map
[Map of Georgia]
[icon] First Liberty Financial Corp. Branches
20
<PAGE>
Market Characteristics
Macon and Savannah
. Georgia's economy is projected to be among the Southeast region's most
prosperous and to outperform the national economy substantially.
. After Atlanta, Savannah and Macon are Georgia's second and third fastest
growing MSA's, respectively.
. Total population in the Macon MSA is projected to increase 6% by 2003 to
337,836.
. Total 1999 employment in the Macon MSA is projected to increase 1.6% from
1998 to 150,978.
. Total population in the Savannah MSA is projected to increase 7% by 2003 to
307,907.
. Total 1999 employment in the Savannah MSA is projected to increase 1.7%
from 1998 to 135,606.
. Savannah attracts over 6 million tourists annually, generating over $634
million in revenue.
21
<PAGE>
BB&T Investment Criteria
. EPS and Cash Basis EPS (accretive by year 2)
. Internal rate of return (15% or better)
. Return on equity and Cash Basis ROE (accretive by year 3)
. Return on assets and Cash Basis ROA (accretive by year 3)
. Book value per share (accretive by year 5)
. Must not cause combined leverage capital ratio to go below 7%
Criteria are listed in order of importance. There are sometimes trade-offs
among criteria.
22
<PAGE>
Assumptions
. BB&T 1999 EPS and 2000 EPS are based on First Call estimates of $1.94 and
$2.18, respectively. Subsequent years are based on 9% income statement and
balance sheet growth.
. $11.4 million in cost savings (25% of FLFC's expense base). Cost savings
will be recognized over 2 years with 25% of total cost savings achieved in
1999 and the remaining 75% in 2000.
. Fee income improvement - raise FLFC's fee income ratio from 20.0% for March
QTD 1999 to 25% for full-year 2001 by leveraging BB&T's sales management
system and expanded product offerings.
. FLFC's net interest margin (non-FTE) is increased over five years to 4.30%
. For FLFC, we have assumed income statements and balance sheet growth of 10%
annually from 2001 and thereafter except for the enhancements cited above.
23
<PAGE>
Impact of Earnings Per Share
Accretion Accretion
(Dilution) Pro Forma (Dilution)
Pro Forma Pro Forma Cash Basis Pro Forma
EPS Shares EPS Shares
--------- ---------- ---------- ----------
1999* $1.93 $(0.01) $2.04 $(0.01)
2000 2.18 0.00 2.30 0.00
2001 2.37 0.01 2.49 0.01
2002 2.59 0.02 2.70 0.02
2003 2.83 0.02 2.94 0.02
2004 3.09 0.03 3.18 0.03
2005 3.37 0.04 3.46 0.04
2006 3.68 0.04 3.77 0.05
2007 4.01 0.05 4.10 0.05
2008 4.38 0.06 4.46 0.06
2009 4.77 0.07 4.86 0.07
Internal Rate of Return 15.03%
*Recurring earnings
24
<PAGE>
Impact on ROE*
Pro Forma
Pro Forma Cash Basis
ROE(%) Change ROE(%) Change
----------- ------- ------------ -------
1999** 19.86 (0.24) 24.36 (0.39)
2000 19.96 (0.07) 23.61 (0.16)
2001 19.33 0.01 22.24 (0.05)
2002 18.83 0.01 21.16 (0.04)
2003 18.42 0.04 20.28 (0.01)
2004 18.04 0.06 19.47 0.03
* The decrease in ROE results from the build up in equity relative to assets.
** Recurring earnings
25
<PAGE>
Impact on ROA
Pro Forma
Pro Forma Cash Basis
ROA(%) Change ROA(%) Change
----------- ------- ------------ -------
1999* 1.52 (.01) 1.63 (.01)
2000 1.58 (.00) 1.68 (.00)
2001 1.58 .00 1.67 .00
2002 1.58 .00 1.66 .00
2003 1.59 .01 1.66 .01
2004 1.59 .01 1.65 .01
* Recurring earnings
26
<PAGE>
Impact on Book Value / Leverage Ratio
Pro Forma
Book Value Per Share
--------------------- Pro Forma
Accretion Leverage Accretion
Stated (Dilution) Ratio (Dilution)
-------- ----------- ---------- ----------
1999 $10.28 $0.05 7.20% .04
2000 11.57 0.05 7.62 .03
2001 12.98 0.07 8.01 .03
2002 14.51 0.09 8.35 .03
2003 16.20 0.11 8.66 .04
2004 18.06 0.15 8.95 .04
2005 20.11 0.19 9.22 .05
2006 22.38 0.24 9.48 .06
2007 24.89 0.30 9.72 .06
2008 27.68 0.37 9.96 .07
2009 30.91 0.44 10.24 .07
27
<PAGE>
Summary
. The acquisition of First Liberty Financial Corporation is a strong
strategic fit:
- It helps accomplish or goal of expanding our Georgia market; more
specifically, into the Macon and Savannah MSA's
- It fits culturally and geographically
- This is the type of merger we have consistently successfully
executed
. Overall Investment Criteria are met:
- EPS and Cash Basis EPS accretive in 2000
- IRR 15.03%
- ROA and Cash Basis ROA accretive in 2001
- Book value accretive in 1999
- Combined leverage ratio remains above 7%
- Accelerated dividend growth potential in 2000
28
<PAGE>
Appendix
. Historical Financial Data
. Glossary
29
<PAGE>
First Liberty Financial Corp.
Financial Summary
<TABLE>
<CAPTION>
Sept. 30 Sept. 30 Sept. 30
1996 1997 1998
------------ ------------ ------------
<S> <C> <C> <C>
Earnings Summary (in thousands)
Interest Income (FTE)
Interest on loans & leases $ 77,000 $ 88,142 $ 93,364
Interest & dividends on securities 11,273 13,290 15,559
Interest on temporary investments 6,374 6,635 5,013
---------- ---------- ----------
Total interest income (FTE) 94,647 108,067 113,936
---------- ---------- ----------
Interest Expense
Interest expense on deposit accounts 40,977 43,529 46,589
Interest on short-term borrowings 6,359 7,100 11,203
Interest on long-term debt 2,823 6,974 2,511
---------- ---------- ----------
Total interest expense 50,159 57,603 60,303
---------- ---------- ----------
Net interest income (FTE) 44,488 50,464 53,633
Less taxable equivalency adjustment - - -
---------- ---------- ----------
Net interest income 44,488 50,464 53,633
Provision for loan losses 3,432 5,654 5,671
---------- ---------- ----------
Net interest income after provision 41,056 44,810 47,962
---------- ---------- ----------
Noninterest Income
Service charges on deposit accounts 5,740 6,952 7,333
Non-deposit fees and commissions 2,445 2,310 1,621
G/(L) on sale of loans, real estate & securities 1,759 2,260 5,153
Other operating income 2,621 3,942 4,773
---------- ---------- ----------
Total noninterest income 12,565 15,464 18,880
---------- ---------- ----------
Noninterest Expense
Personnel 18,165 21,086 23,290
Occupancy & equipment 4,409 4,298 4,948
FDIC premiums 1,424 769 668
Other operating expenses 10,190 12,099 11,407
---------- ---------- ----------
Total noninterest expense 34,188 38,252 40,313
---------- ---------- ----------
Net income before taxes 19,433 22,022 26,529
Income taxes 6,354 6,904 9,204
---------- ---------- ----------
Net income before nonrecurring charges 13,079 15,118 17,325
---------- ---------- ----------
Nonrecurring charges (2,341) (4,831) (1,868)
---------- ---------- ----------
Net income $ 10,738 $ 10,287 $ 15,457
---------- ---------- ----------
Basic EPS $ 0.83 $ 0.78 $ 1.16
Diluted EPS 0.82 0.76 1.14
Diluted EPS before nonrecurring charges 1.00 1.11 1.28
Book value $ 8.14 $ 8.20 $ 9.02
EOP shares 12,550 13,355 13,552
Basic shares 12,387 13,045 13,373
Diluted shares 13,080 13,592 13,585
</TABLE>
30
<PAGE>
First Liberty Financial Corp.
Financial Summary
<TABLE>
<CAPTION>
Sept. 30 Sept. 30 Sept. 30
1996 1997 1998
---------- ---------- ----------
<S> <C> <C> <C>
Average Balance Sheet
(In thousands)
Assets
Loans $ 832,686 $ 943,983 $1,004,303
Securities 155,499 202,453 248,090
Other earning assets 93,719 108,465 75,145
---------- ---------- ----------
Total interest-earning assets 1,081,904 1,254,901 1,327,538
---------- ---------- ----------
Goodwill & other intangibles 10,211 10,503 10,871
Other assets 108,495 105,842 128,596
---------- ---------- ----------
Total assets $1,200,610 $1,371,245 $1,467,004
---------- ---------- ----------
Net interest margin 4.11% 4.02% 4.04%
Securities as a percent of earning assets 14% 16% 19%
Liabilities & Shareholders' Equity
Interest-bearing deposits:
Money Market & NOW $ 217,350 $ 220,599 $ 205,032
Savings 64,088 58,450 54,800
CD's and other time 550,075 617,320 670,468
---------- ---------- ----------
Total interest-bearing deposits 831,513 896,369 930,300
Short-term borrowed funds 106,605 121,787 212,038
Long-term debt 30,450 110,304 47,358
---------- ---------- ----------
Total interest-bearing liabilities 968,568 1,128,460 1,189,696
Demand deposits 108,822 117,310 145,196
Other liabilities 23,021 17,073 16,246
---------- ---------- ----------
Total liabilities 1,100,411 1,262,843 1,351,138
---------- ---------- ----------
Preferred equity 7,564 3,782 -
Common equity 92,635 104,620 115,866
---------- ---------- ----------
Total equity 100,199 108,402 115,866
---------- ---------- ----------
Total liabilities & shareholders' equity $1,200,610 $1,371,245 $1,467,004
---------- ---------- ----------
Other int-liab. as a percent of total assets 11% 17% 18%
</TABLE>
31
<PAGE>
First Liberty Financial Corp.
Financial Summary
<TABLE>
<CAPTION>
Sept. 30 Sept. 30 Sept. 30
1996 1997 1998
------- -------- --------
<S> <C> <C> <C>
Ratio Analysis
ROA 1.09% 1.10% 1.18%
ROCE 14.12% 14.45% 14.95%
Efficiency ratio 61.8% 60.1% 59.8%
Adj. Noninterest income / Adj. Revenues 22.0% 23.5% 26.0%
Average equity / Average assets 8.3% 7.9% 7.9%
Credit Quality
(in thousands)
Beginning $ 10,791 $ 11,605 $ 14,389
-------- ---------- ----------
Provision 3,432 7,764 5,671
Acquired allowance (43) - 666
Net charge-offs (2,575) (4,980) (4,342)
-------- ---------- ----------
Ending allowance $ 11,605 $ 14,389 $ 16,384
-------- ---------- ----------
Allowance 1.27% 1.43% 1.59%
Charge-off rate 0.31% 0.53% 0.43%
Period end loans & leases $913,642 $1,003,977 $1,028,383
Perion end common equity $102,158 $ 109,514 $ 122,204
</TABLE>
32
<PAGE>
Glossary
Return on Assets - recurring earnings for the period as a percentage of average
assets for the period.
Return on Equity - recurring earnings for the period as a percentage of average
common equity for the period.
Cash Basis Performance Results and Ratios - These calculations exclude the
effect on net income of amortization expense applicable to certain intangible
assets. The ratios also exclude the effect of the unamortized balances of these
intangibles from assets and equity.
Efficiency Ratio - calculated as recurring noninterest expense as a percentage
of the sum of recurring net interest income on a fully taxable equivalent basis
and recurring noninterest income.
Leverage Capital Ratio - Common shareholders' equity excluding unrealized
securities gains and losses and certain intangible assets as a percentage of
average assets for the most recent quarter less certain intangible assets.
Total Risk-Based Capital Ratio - the sum of shareholders' equity, a qualifying
portion of subordinated debt and a qualifying portion of the allowance for loan
and lease losses as a percentage of risk-weighted assets.
Net Charge-Off Ratio - Loan losses net of recoveries as a percentage of average
loans and leases.
Internal Rate of Return - the interest rate that equates the present value of
future returns to the investment outlay. An investment is considered acceptable
if its IRR exceeds the required return. The investment is defined as the market
value of the stock and/or other consideration to be received by the selling
shareholders.
Recurring Results or Ratios - earnings excluding charges and expenses
principally related to completing mergers and acquisitions.
Certain of the ratios discussed above may be annualized if the applicable
periods are less than a full year.
33
