<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
November 17, 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 xx 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 Hardwick
Holding Company ("Hardwick"), of Dalton, Georgia, and to file certain analyst
presentation materials related to this transaction as Exhibit 99.1.
BB&T will acquire Hardwick in a $138.7 million stock swap that will give
BB&T its fourth Georgia bank.
Hardwick, with $518.3 million in assets, operates nine banking offices in
northwest Georgia. Its two banking subsidiaries are Hardwick Bank & Trust and
First National Bank of Northwest Georgia.
Hardwick Bank & Trust serves Whitfield County. First National Bank of
Northwest Georgia does business in Gordon County under the name, Calhoun First
National Bank, and in Bartow County under the name, Peoples First National Bank.
The transaction is valued at $32.94 per Hardwick share based on BB&T's
November 15, 1999 closing price of $36.56 per share. The final exchange ratio
will be determined based on the average closing price of BB&T common stock
during a pricing period prior to closing. The ratio will be fixed at .9010 BB&T
share for each Hardwick share if BB&T's closing price averages $36 or higher.
The ratio will be fixed at .9320 BB&T share for each Hardwick share if BB&T's
closing price averages $33.50 or lower. If BB&T's closing price averages between
$36 and $33.50, the exchange ratio will float between .9010 and .9320 share of
BB&T for each Hardwick share.
The transaction, approved by the directors of both companies, will be
accounted for as a pooling of interests. The acquisition will increase BB&T's
Georgia assets to $4.6 billion.
Hardwick Chairman and CEO Kenneth Boring will serve on BB&T's Georgia
advisory board and North Carolina bank board.
The merger, which is subject to the approval of Hardwick shareholders and
banking regulators, is expected to be completed in the second quarter of 2000.
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: November 17, 1999.
<PAGE>
BB&T
and
Hardwick Holding Company
Dalton, Georgia
Expanding a Great Franchise
Analyst Presentation
November 17, 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
Hardwick'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
Hardwick, the amount of general and administrative expense consolidation,
costs relating to converting Hardwick'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 Hardwick, 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 Hardwick are engaged; (8) adverse changes may
occur in the securities markets; and (9) competitors of BB&T and Hardwick may
have greater financial resources and develop products that enable such
competitors to compete more successfully than BB&T and Hardwick.
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
(BBT)
. $44.8 billion bank holding company*
. 691 branch locations in NC, SC, VA, GA, MD, WV, KY and the District of
Columbia*
For 3 months
Ended 9/30/99**
-------------
. ROA 1.55%
. Cash Basis ROA 1.69%
. ROE 21.20%
. Cash Basis ROE 27.88%
. Cash Basis Efficiency Ratio 51.17%
* Includes the pending acquisitions of Premier Bancshares, Inc. and First
Liberty Financial Corp.
** Recurring earnings
4
<PAGE>
Hardwick Holding Company
. $518.3 million bank holding company
. 9 banking offices in Georgia
For 3 months
Ended 9/30/99
-------------
. ROA 1.16%
. ROE 10.98%
. Efficiency ratio 61.39%
5
<PAGE>
Pro Forma Company Profile
September 30, 1999
. Size: $45.3 billion in assets
$12.8 billion in market capitalization*
. Offices NC: 341
VA: 104
SC: 90
GA: 91
MD: 51
KY: 10
WV: 7
DC: 6
----------
Total 700
* Based on closing prices as of 11/15/99. Includes outstanding shares for First
Liberty Corp., Premier Bancshares, Inc., and Hardwick Holding Company.
6
<PAGE>
Terms of the Transaction
7
<PAGE>
Consideration
. The exchange ratio will be based on BB&T's average closing price during
a pricing period. The exchange ratio will be fixed at .9010 BB&T shares
per Hardwick share if BB&T's price closes at or above $36.00. The
exchange ratio will be fixed at .9320 BB&T shares per Hardwick share if
BB&T's price closes at or below $33.50. The exchange ratio will float
between .9010 and .9320 if BB&T's price closes between $36.00 and
$33.50.
8
<PAGE>
Terms of the Transaction
. Purchase price: $32.94 per share/1/
. Aggregate value: $138.7 million/1/
. 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
. Expected Closing: Second quarter of 2000
/1/ Based on BB&T's closing stock price of $36.5625 as of 11/15/99.
9
<PAGE>
Pricing
. Purchase price $32.94
. Premium/market N/A*
. Price/9-30-99 stated book 2.53x
. Price/LTM EPS 26.35x
. BB&T shares issued 3.79 million**
* Hardwick Holding Company's stock is not publicly traded.
** BB&T shares issued based on Hardwick shares outstanding including unreleased
restricted shares outstanding.
10
<PAGE>
Acquisition Comparables*
Bank Acquisitions with Deal Values over $50 Million Announced Since 8/15/99
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Total Deal Pr/ Deal/Pr
Date Assets Deal Deal Deal/Pr LTM Estimated
Buyer Seller Announced Seller Value Pr/Bk Tg Bk EPS EPS
$000 ($M) (%) (%) (x) (x)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
First Charter Corporation Carolina First BancShares Inc. 11/08/1999 762,687 263.2 401.00 439.57 32.95 28.34
Wells Fargo & Company Michigan Financial Corporation 11/03/1999 833,592 209.3 208.86 208.86 18.12 N/A
Gold Banc Corporation Inc. CountryBanc Holding Company 10/25/1999 463,313 82.7 211.03 286.12 16.83 N/A
Wachovia Corp. B.C. Bankshares Incorporated 10/07/1999 369,703 133.9 360.37 360.37 21.76 N/A
F&M National Corporation State Bank of the Alleghenies 10/06/1999 155,411 53.3 310.53 310.53 21.45 N/A
Summit Bancorp NMBT CORP 10/04/1999 391,930 76.1 245.75 247.15 21.31 20.31
Wells Fargo & Company North County Bancorp 09/30/1999 349,003 112.0 348.13 350.39 23.42 N/A
City National Corporation Pacific Bank NA 09/22/1999 728,622 151.4 197.14 220.20 42.03 18.13
InterWest Bancorp Inc. Liberty Bay Financial Corporation 09/15/1999 179,518 50.7 260.70 262.95 18.33 N/A
Old Kent Financial Corp. Grand Premier Financial 09/10/1999 1,574,959 393.1 206.44 225.44 12.34 19.37
Old National Bancorp. Heritage Financial Services Inc. 09/10/1999 206,794 63.3 381.83 382.38 21.49 N/A
Gold Banc Corporation Inc. American Bancshares Inc. 09/07/1999 484,828 93.1 338.55 339.18 45.45 34.96
U.S. Bancorp Peninsula Bank of San Diego 09/02/1999 453,828 104.4 347.58 348.87 22.69 N/A
Centura Banks Inc. Triangle Bancorp Inc. 08/23/1999 2,285,333 607.7 356.16 412.70 24.38 21.67
Staten Island Bancorp Inc. First State Bancorp 08/18/1999 352,365 84.0 212.26 212.26 18.72 N/A
NBT Bancorp Inc. Lake Ariel Bancorp Inc. 08/16/1999 492,894 92.6 255.88 272.06 25.00 24.67
Maximum 2,285,333 607.7 401.0 439.6 45.5 35.0
Minimum 155,411 50.7 197.1 208.9 12.3 18.1
Average 630,265 160.7 290.1 304.9 24.1 23.9
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
BB&T Corp. Hardwick Holding Company 518,251 138.7 252.8 270.4 26.4 25.1
Over (Under)Average Comparable (37.3) (34.5) 2.2 1.2
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Source for Acquisition Comparables: SNL Securities.
11
<PAGE>
Financial Data
12
<PAGE>
Financial Summary
For Quarter Ended: 9/30/99 9/30/00
BB&T/1/ Hardwick/1/
--------- -----------
ROA 1.55% 1.16%
ROE 21.20 10.98
Net interest margin (FTE) 4.25 4.59
Efficiency ratio 53.15 61.39
Net charge-offs .26 .13
Reserve/NPLs 410.36 486.00
NPAs/assets .28 .29
/1/ Recurring earnings
13
<PAGE>
Capital Strength
BB&T Hardwick
(9/30/99) (9/30/99)
--------- ---------
Equity/assets 7.4% 10.6%
Leverage capital ratio 6.6% 10.0%
Total risk-based capital 13.4% 14.0%
14
<PAGE>
Rationale for Acquisition
. BB&T has an announced strategy to pursue in-market
(Carolinas/Virginia/DC/Maryland/Georgia) and contiguous state
acquisitions of high quality banks and thrifts in the $250 million to
$10 billion range. The acquisition of Hardwick Holding Company is
consistent with this strategy.
. This acquisition is very consistent with past acquisitions which we
have successfully executed, i.e. it fits our model.
. Hardwick provides BB&T with an enhanced market presence in the high
growth northwestern counties of Georgia.
15
<PAGE>
Strategic Objectives
The key strategic objectives in this acquisition are:
- Extension of BB&T's Georgia franchise
- Improve efficiency
. 25% cost savings to be realized in the year 2001
- Supplement Hardwick's primarily commercial lending expertise in
additional segments such as:
. Mortgage lending
. BB&T's strong retail banking emphasis
. BB&T's extensive array of fee related businesses
- Increase productivity and market penetration through the use of
BB&T's successful "Decathlon" sales management system
16
<PAGE>
Franchise Enhancement
. Enhancement of BB&T's Georgia operations
. Provides added presence in markets contiguous to the Atlanta Metro area
. Provides BB&T with a branch distribution system in the most attractive
markets in Northwest Georgia
. Expands BB&T's penetration along the Interstate 75 corridor between
Atlanta, GA and Chattanooga, TN
. Increases BB&T's asset base in Georgia to $4.6 billion
17
<PAGE>
Efficiency Improvement
Targeted Annual Cost Savings
----------------------------
$5 million or approximately
25% of Hardwick's expense base
18
<PAGE>
After-Tax One-Time Charges
One-time merger-related charges
-------------------------------
$6.5 million
19
<PAGE>
Branch Locations
[map of mid-atlantic United States showing branch locations]
[Legend]
[dark triangle] BB&T Corporation
[light triangle] First Liberty Financial Corp. (BB&T pending acquisition)
[diamond] Premier Bancshares, Inc. (BB&T pending acquisition)
[square] Hardwick Holding Company
20
<PAGE>
Branch Locations
[map of Georgia showing branch locations]
[Legend]
[square] Hardwick Holding Company Branches
21
<PAGE>
Market Characteristics
Northwest Georgia
. Dalton is the county seat of Whitfield County and is
known as the "Carpet Capital of the World."
. Dalton ranks third in the state of Georgia in terms of
manufacturing, capital investment growth, and per capita
income growth.
. 1999 unemployment rate in Whitfield county is 3.4% (24%
below national rate).
. Dalton is located on I-75 between Atlanta, GA and
Chattanooga, TN.
22
<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.
23
<PAGE>
Assumptions
. BB&T's 1999 and 2000 EPS are based on First Call estimates of $1.97 and
$2.20 respectively, and subsequent years are based on 12% income
statement and balance sheet growth.
. Hardwick's 1999 EPS is based on management's estimate of $1.31.
Hardwick's 2000 EPS estimate (on a stand-alone basis) is $1.35.
Subsequent to the acquisition, we have assumed that performance can be
enhanced through more effective management of Hardwick's balance sheet.
For the years 2001 and thereafter, we have assumed 12% income statement
and balance sheet growth except for the enhancements cited below.
. $5.0 million in cost savings (25% of Hardwick's expense base), 60%
realized in the year 2000 and 40% realized in 2001.
. Hardwick's core net interest margin (non-FTE) is maintained annually at
4.60%.
. Hardwick's core fee income ratio is increased to 25% by 2005.
24
<PAGE>
Earnings Per Share Impact
--------------------------
Accretion Accretion
(Dilution) Pro Forma (Dilution)
Pro Forma Pro Forma Cash Basis Pro Forma
EPS Shares EPS Shares
--------- ---------- ---------- ----------
2000* $2.20 $0.001 $2.34 $0.001
2001 2.47 0.002 2.61 0.003
2002 2.76 0.004 2.91 0.004
2003 3.10 0.006 3.24 0.006
2004 3.47 0.008 3.61 0.008
2005 3.89 0.011 4.03 0.011
2006 4.36 0.013 4.49 0.012
2007 4.88 0.015 5.02 0.013
2008 5.46 0.017 5.60 0.015
2009 6.12 0.019 6.25 0.017
2010 6.85 0.021 6.99 0.019
--------------------------
---------
Internal rate of return 18.64%
-----
---------
* Recurring earnings
25
<PAGE>
ROE Impact/1/
---------------------------
Pro Forma
Pro Forma Cash Basis
ROE (%) Change ROE (%) Change
----------- -------- ----------- --------
2000/2/ 19.22 (0.060) 23.75 (0.109)
2001 19.10 (0.025) 22.76 (0.055)
2002 18.95 (0.015) 21.88 (0.038)
2003 18.77 (0.008) 21.12 (0.027)
2004 18.58 (0.003) 20.45 (0.018)
2005 18.36 0.004 19.86 (0.011)
---------------------------
/1/ The decrease in ROE results from the build up in equity relative to assets.
/2/ Recurring earnings
26
<PAGE>
ROA Impact
-------------------------
Pro Forma
Pro Forma Cash Basis
ROA (%) Change ROA (%) Change
----------- ------- ------------ -------
2000* 1.61 (0.003) 1.74 (0.004)
2001 1.62 (0.002) 1.73 (0.003)
2002 1.62 (0.002) 1.72 (0.002)
2003 1.62 (0.001) 1.71 (0.001)
2004 1.62 (0.001) 1.70 (0.001)
2005 1.63 0.000 1.69 (0.000)
-------------------------
* Recurring earnings
27
<PAGE>
Book Value/Capital Impact
Pro Forma
Book Value Per Share Pro Forma
---------------------
Accretion Leverage Accretion
Stated (Dilution) Ratio (Dilution)
------ ---------- -------- ----------
2000 $12.13 $0.029 7.85% 0.007
2001 13.69 0.031 8.14 0.005
2002 15.48 0.036 8.40 0.004
2003 17.52 0.041 8.65 0.004
2004 19.85 0.049 8.88 0.004
2005 22.51 0.060 9.11 0.004
2006 25.57 0.073 9.33 0.005
2007 29.07 0.088 9.54 0.005
2008 33.07 0.105 9.76 0.005
2009 37.65 0.123 9.97 0.005
2010 42.88 0.144 10.18 0.005
28
<PAGE>
Summary
. The acquisition of Hardwick Holding Company is a strong strategic fit:
- It helps accomplish our goal of expanding the Georgia market
- 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 all years
- IRR 18.64%
- ROE accretive by year 5 and Cash ROE dilutive in all years
- ROA accretive by year 5 and Cash ROA dilutive in all years
- Book value accretive in all years
- Combined leverage ratio remains above 7%
29
<PAGE>
Appendix
. Historical Financial Data
. Glossary
30
<PAGE>
[[Insert Financial summary]]
Hardwick Holding Company
Financial Summary
<TABLE>
<CAPTION>
Estimated
1997 1998 1999
-----------------------------------------------------------
<S> <C> <C> <C>
Earnings Summary (In thousands)
Interest Income (FTE)
Interest on loans & leases $ 27,671 $ 28,764 $ 26,629
Interest & dividends on securities 7,322 8,108 8,937
Interest on temporary investments 693 870 827
----------------- ----------------- -----------------
Total interest income (FTE) 35,686 37,742 36,393
----------------- ----------------- -----------------
Interest Expense
Interest expense on deposit accounts 14,232 15,154 13,517
Interest on short-term borrowings 331 654 889
Interest on long-term debt 100 30 17
----------------- ----------------- -----------------
Total interest expense 14,663 15,838 14,423
----------------- ----------------- -----------------
Net interest income (FTE) 21,023 21,904 21,970
Less taxable equivalency adjustment 490 474 -
----------------- ----------------- -----------------
Net interest income 20,533 21,430 21,970
Provision for loan losses 800 500 200
----------------- ----------------- -----------------
Net interest income after provision 19,733 20,930 21,770
----------------- ----------------- -----------------
Noninterest Income
Service charges on deposit accounts 2,711 2,589 2,706
Non-deposit fees and commissions 430 467 -
G / (L) on sale of real estate &
securities 71 189 (3)
Other operating income 3,610 1,680 2,489
----------------- ----------------- -----------------
Total noninterest income 6,822 4,925 5,192
----------------- ----------------- -----------------
Noninterest Expense
Personnel 9,000 8,614 9,191
Occupancy & equipment 3,162 3,186 3,184
FDIC premiums 48 43 -
Other operating expenses 6,354 6,519 6,746
----------------- ----------------- -----------------
Total noninterest expense 18,564 18,362 19,121
----------------- ----------------- -----------------
7,991 7,493 7,841
Income taxes 2,765 2,406 2,395
----------------- ----------------- -----------------
Net income before nonrecurring charges 5,226 5,087 5,446
----------------- ----------------- -----------------
Nonrecurring charges - - -
----------------- ----------------- -----------------
Net income $ 5,226 $ 5,087 $ 5,446
================= ================= =================
Basic EPS $ 1.32 $ 1.27 $ 1.32
Diluted EPS 1.29 1.26 1.31
Diluted EPS before nonrecurring charges 1.29 1.26 1.31
Book value $ 12.58 $ 13.40 $ 13.24
EOP shares 4,021 4,188 4,197
Basic shares 3,973 4,009 4,139
Diluted shares 4,047 4,033 4,157
</TABLE>
31
<PAGE>
[Insert Financial Summary]
Hardwick Holding Company
Financial Summary
<TABLE>
<CAPTION>
Estimated
1997 1998 1999
-----------------------------------------------------------
<S> <C> <C> <C>
Average Balance Sheet
(In thousands)
Assets
Loans $290,500 $308,487 $306,728
Securities 116,674 130,779 153,108
Other earning assets 12,832 16,736 21,198
----------------- ----------------- -----------------
Total interest-earning assets 420,006 456,002 481,034
----------------- ----------------- -----------------
Goodwill & other intangibles 5,259 4,267 3,761
Other assets 36,920 35,468 36,697
----------------- ----------------- -----------------
Total assets $462,184 $495,737 $521,492
================= ================= =================
Net interest margin 5.01% 4.80% 4.57%
Securities as a percent of earning assets 28% 29% 32%
Liabilities & Shareholders' Equity
Interest-bearing deposits:
Money Market & NOW $ 93,698 $100,398 $113,250
Savings 29,144 29,581 29,553
CD's and other time 193,825 205,103 197,775
----------------- ----------------- -----------------
Total interest-bearing deposits 316,667 335,082 340,578
Short-term borrowed funds 6,572 13,343 23,437
Long-term debt 1,377 368 181
----------------- ----------------- -----------------
Total interest-bearing liabilities 324,616 348,793 364,196
Demand deposits 83,956 89,216 96,994
Other liabilities 4,093 4,440 4,816
----------------- ----------------- -----------------
Total liabilities 412,665 442,449 466,006
----------------- ----------------- -----------------
Preferred equity - - -
Common equity 49,519 53,288 55,486
----------------- ----------------- -----------------
Total equity 49,519 53,288 55,486
----------------- ----------------- -----------------
----------------- ----------------- -----------------
Total liabilities & shareholders' equity $462,184 $495,737 $521,492
================= ================= =================
Other int-liab. as a percent of total 1.7% 2.8% 4.5%
assets
</TABLE>
32
<PAGE>
[[Insert Financial Summary]]
Hardwick Holding Company
Financial Summary
<TABLE>
<CAPTION>
Estimated
1997 1998 1999
------------------------------------------------
<S> <C> <C> <C>
Ratio Analysis
ROA 1.13% 1.03% 1.04%
ROCE 10.55% 9.55% 9.81%
Efficiency ratio 66.8% 68.9% 70.4%
Adj. noninterest income / Adj. revenues 24.3% 17.8% 19.1%
Average equity / Average assets 10.7% 10.7% 10.6%
Credit Quality
(In thousands)
Beginning $ 6,778 $ 6,984 $ 7,119
--------- --------- ---------
Provision 800 500 200
Acquired allowance - - -
Net charge-offs (594) (365) (613)
---------- --------- ---------
Ending allowance $ 6,984 $ 7,119 $ 6,706
---------- --------- ---------
Allowance 2.20% 2.33% 2.09%
Charge-off rate 0.20% 0.12% 0.20%
Period end loans & leases $317,556 $305,891 $321,308
Period end common equity $ 50,603 $ 56,117 $ 55,589
</TABLE>
33
<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.
34
