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
December 5, 2000
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 34 pages.
<PAGE>
Item 5. Other Events
BB&T to acquire Century South Banks of Alpharetta, Ga.
WINSTON-SALEM, N.C. - BB&T Corporation (NYSE: BBT) today said it plans to
buy Century South Banks Inc. (NASDAQ: CSBI) of Alpharetta, Ga., in a $428.2
million stock swap. The acquisition would expand BB&T's Georgia franchise in
fast-growing metropolitan Atlanta and the Savannah, Macon and north Georgia
areas.
Century South Banks, with $1.6 billion in assets, operates 40 banking
offices in Georgia, North Carolina, Tennessee and Alabama through 12 community
banks.
The transaction, approved by the directors of both companies, is valued at
$30.81 per Century South share based on BB&T's closing price Monday of $33.13.
The exchange ratio will be fixed at .93 BB&T share for each Century South share.
The transaction will be accounted for as a pooling-of-interests.
"BB&T and Century South share remarkably similar operating philosophies and
core values," said BB&T Chairman and Chief Executive Officer John Allison. "This
acquisition extends BB&T's presence in the most attractive markets of metro
Atlanta and northward toward our existing operations in northwest Georgia and
South Carolina."
The acquisition also would enhance BB&T's entry into Tennessee by adding
three branch offices in Polk County. BB&T announced in August it would buy
Knoxville-based BankFirst Corp.
Century South was founded in 1982 as Dahlonega Bancorp. It changed its name
to Century South Banks Inc. in 1989. In 1997, it merged with Bank Corporation of
Georgia to form a $1 billion company.
Century South customers will be introduced to BB&T's broad product and
services line, which includes insurance, mutual funds, trust, online banking,
annuities, investment banking, retail brokerage, treasury services,
international banking and leasing.
"The great thing about this merger is that it combines two high performers
that believe strongly in customer-focused community banking," said Joseph W.
Evans, president and chief executive officer of Century South Banks. "Our
customers will continue to get the same personalized attention they always have,
and now they'll also be able to take advantage of all the products and services
offered by the country's 18th largest financial holding company."
More than one-third of Century South's deposits are based in metro Atlanta,
where more jobs are expected to be created over the next 25 years than any city
in the country. BB&T currently controls the seventh largest share of deposits in
metro Atlanta.
Nearly one-fourth of Century South's deposits come from Savannah and Macon,
Georgia's second and third fastest growing metropolitan statistical areas and
cities where BB&T also has a strong presence.
The Century South merger would give BB&T the No. 7 market share in Georgia.
BB&T plans to create a new community bank region in northern Georgia. Its
management team will mostly be made up of Century South employees. BB&T
currently has 23 autonomous regions - each with its own president - which
operate like community banks. Nearly all lending decisions are made locally.
In Georgia, Century South operates banking offices in the following
counties: Bibb, Coweta, Macon, Peach, Chatham, Effingham, Lumpkin, Madison,
Dawson, Gilmer, Fannin, Franklin, Hall and Gwinnett.
Century South's remaining banking offices are in the following counties:
Calhoun County, Ala.; Haywood, Jackson and Cherokee counties, N.C.; and Polk
County, Tenn.
The merger, which is subject to the approval of Century South shareholders
and banking regulators, is expected to be completed in the second quarter of
2001.
Winston-Salem-based BB&T Corporation, with $56.7 billion in assets,
operates 822 banking offices in the Carolinas, Virginia, Maryland, Georgia, West
Virginia, Kentucky and Washington, D.C.
This press release contains forward-looking statements as defined by
federal securities laws. These statements may address issues that involve
significant risks, uncertainties, estimates and assumptions made by management.
Actual results could differ materially from current projections.
Please refer to BB&T's filings with the Securities and Exchange Commission
for a summary of important factors that could affect BB&T's forward-looking
statements. BB&T undertakes no obligation to revise these statements following
the date of this press release.
BB&T's news releases are available at no charge through PR Newswire's
Company News On-Call facsimile service. For a menu of BB&T's news releases or to
retrieve a specific release call 1-800-758-5804, extension 809325.
The foregoing may be deemed to be offering materials of BB&T Corporation in
connection with BB&T's proposed acquisition of Century South Banks Inc., on the
terms and subject to the conditions in the Agreement and Plan of Reorganization,
dated Dec. 4, 2000, between BB&T and Century South Banks Inc. This disclosure is
being made in connection with Regulation of Takeovers and Security Holder
Communications (Release Nos. 33-7760 and 34-42055) adopted by the Securities and
Exchange Commission ("SEC").
Shareholders of Century South Banks Inc. and other investors are urged to
read the proxy statement/prospectus that will be included in the registration
statement on Form S-4, which BB&T will file with the SEC in connection with the
proposed merger because it will contain important information about BB&T,
Century South Banks Inc., the merger, the persons soliciting proxies in the
merger and their interests in the merger and related matters.
After it is filed with the SEC, the proxy statement/prospectus will be
available for free, both on the SEC web site (http://www.sec.gov) and from BB&T
and Century South Banks Inc. as follows:
Alan W. Greer, Shareholder Reporting, BB&T Corporation, P.O. Box 1290,
Winston-Salem, N.C., 27102. Telephone: (336) 733-3021.
Stephen W. Doughty, Chief Financial Officer, Century South Banks Inc., 2325
Lakeview Parkway, Suite 450, Alpharetta, Ga., 30004. Telephone: (678) 624-1366.
In addition to the proposed registration statement and proxy
statement/prospectus, BB&T and Century South Banks Inc. file annual, quarterly
and special reports, proxy statements and other information with the SEC. You
may read and copy any reports, statements or other information filed by either
company at the SEC's public reference rooms at 450 Fifth Street, N.W.,
Washington, D.C. 20549 or at the SEC's other public reference rooms in New York,
N.Y. and Chicago, Ill.
Please call the SEC at 1-800-SEC-0330 for further information on the public
reference rooms. BB&T's and Century South Bank's filings with the SEC are also
available to the public from commercial document-retrieval services and on the
SEC's web site at http://www.sec.gov.
<PAGE>
BB&T
and
Century South Banks, Inc.
Alpharetta, GA
Expanding a Great Franchise
Analyst Presentation
December 5, 2000
1
<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 Century
South Banks, Inc.'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
Century South Banks, Inc., the amount of general and administrative expense
consolidation, costs relating to converting Century South Banks, Inc.'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 Century South Banks, Inc., 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 Century South Banks, Inc., are engaged; (8) adverse changes may occur
in the securities markets; and (9) competitors of BB&T and Century South Banks,
Inc., may have greater financial resources and develop products that enable such
competitors to compete more successfully than BB&T and Century South Banks, Inc.
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 value 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)
- $59.7 billion financial holding company*
- 899 branch locations in NC, SC, VA, GA, MD, WV, KY, TN and the
District of Columbia*
For 3 months
ended 9/30/00**
-------------
- ROA 1.61%
- Cash Basis ROA 1.74%
- ROE 20.25%
- Cash Basis ROE 25.53%
- Cash Basis Efficiency Ratio 49.40%
*Includes the pending acquisitions of FCNB Corp, BankFirst Corporation, and
FirstSpartan Financial Corp.
**Recurring Earnings
4
<PAGE>
Century South Banks, Inc. (CSBI)
- $1.6 billion bank holding company
- 40 locations - 31 banking offices in Georgia, 3 in Tennessee, 4 in
North Carolina, and 2 in Alabama
For 3 months
ended 9/30/00*
-------------
- ROA 1.31%
- Cash Basis ROA 1.36%
- ROE 13.70%
- Cash Basis ROE 14.19%
- Cash Basis Efficiency Ratio 62.88%
*Recurring Earnings
5
<PAGE>
Pro Forma Company Profile
- Size: $61.3 billion in assets
$14.1 billion in market capitalization*
- Offices: NC: 339
VA: 142
GA: 133
SC: 101
WV: 85
MD: 84
TN: 35
KY: 10
DC: 8
AL: 2
----------
Total 939
*Based on closing prices as of 12/04/00
6
<PAGE>
Terms of the Transaction
7
<PAGE>
Terms of the Transaction
- Purchase price: $30.81 per share*
- Aggregate value: $428.2 million*
- Consideration: Fixed exchange ratio of .93 of a share of BB&T common
stock for each CSBI share
- 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: Termination fee
- Expected closing: Second quarter 2001
*Based on BB&T's closing stock price of 33.125 as of 12/04/00
8
<PAGE>
Pricing
- Purchase price $30.81
- Premium/market 26.7%*
- Price/9-30-00 stated book 2.71x
- Price/LTM EPS 22.99x
- Price/LTM Core EPS 20.40x
- BB&T shares issued 12.9 million**
*Based on CSBI's closing stock price of $24.3125 as of 12/04/00
**BB&T shares issued based on CSBI shares outstanding adjusted for stock options
using the treasury method.
9
<PAGE>
<TABLE>
Acquisition Comparables*
Comparable Acquisitions Announced since January 1, 2000
with Deal Value Between $100 Million and $1 Billion
Date Seller Deal Value/ Deal Pr/ Deal
Buyer Seller Announced Total Assets Deal Value Assets Stock Pr Pr/Bk
----- ------ --------- ------------ ---------- ------ -------- -----
($M) ($M) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C>
Carolina First Corporation Anchor Financial Corp. 1/10/2000 1,223.8 303.7 24.82 37.37 327.2
Wells Fargo & Co. First Commerce Bancshares Inc. 2/2/2000 2,545.6 479.7 18.84 8.94 191.7
Huntington Bancshares Inc. Empire Banc Corp. 2/7/2000 505.9 138.7 27.42 39.53 304.0
Mutual Savings Bank First Northern Capital Corp. 2/22/2000 804.3 133.4 16.59 66.67 168.4
Harris Financial MHC York Financial Corp. 3/28/2000 1,546.2 179.5 11.61 17.95 158.1
BancorpSouth Inc. First United Bancshares Inc. 4/17/2000 2,666.0 455.7 17.09 42.57 175.3
Prudential Plc Highland Bancorp Inc. 4/25/2000 654.8 113.5 17.33 47.54 224.0
Queens County Bancorp Inc. Haven Bancorp Inc. 6/27/2000 2,965.9 186.5 6.29 9.16 169.1
U.S. Bancorp Scripps Financial Corp. 6/27/2000 643.3 155.5 24.17 29.45 325.6
Wells Fargo & Co. Brenton Banks Inc. 7/7/2000 1,938.5 264.5 13.64 NA 191.9
M&T Bank Corp. Premier National Bancorp Inc. 7/10/2000 1,570.1 343.2 21.86 57.01 242.8
BB&T Corp. FCNB Corp. 7/27/2000 1,593.1 216.7 13.60 -8.81 243.3
BB&T Corp. BankFirst Corp. 8/23/2000 848.8 147.9 17.42 9.76 155.8
Fifth Third Bancorp Ottawa Financial Corp. 8/31/2000 1,084.6 169.7 15.65 16.89 198.0
Compass Bancshares Inc. FirsTier Corporation 9/5/2000 792.4 127.0 16.03 NA 455.5
BB&T Corp. FirstSpartan Financial Corp. 9/6/2000 585.7 102.1 17.43 31.90 144.1
Valley National Bancorp Merchants New York Bancorp 9/6/2000 1,369.7 375.9 27.44 14.51 387.6
Union Planters Corp. Jefferson Savings Bancorp Inc. 9/20/2000 1,634.2 146.1 8.94 26.55 111.8
Southwest Bancorp. of Texas Citizens Bankers Inc. 10/17/2000 413.7 130.0 31.42 NA 303.6
Fifth Third Bancorp Capital Holdings Inc. 10/25/2000 1,084.7 245.4 22.62 29.97 244.4
Wachovia Corp. Republic Security Financial 10/30/2000 3,397.0 342.9 10.09 17.89 165.1
Park National Corp. Security Banc Corp. 11/21/2000 986.5 307.2 31.14 44.37 250.1
Hudson River Bancorp Cohoes Bancorp Inc. 11/24/2000 739.3 160.7 21.74 14.71 124.8
Average 1,373.7 227.2 18.8 27.7 228.8
Median 1,084.7 179.5 17.4 18.0 198.0
Deal Price: $30.81
BB&T Corp Century South Banks, Inc. 1,614.5 428.2 26.5 26.7 271.2
Over/(Under) Average Comparables 7.7 (1.0) 42.4
Deal Pr/ Deal Pr/
Date Deal Pr/ LTM LTM Core
Buyer Seller Announced Tg Bk EPS EPS
----- ------ --------- ----- --- ---
(%) (x) (x)
<S> <C> <C> <C> <C> <C>
Carolina First Corporation Anchor Financial Corp. 1/10/2000 329.6 21.6 21.2
Wells Fargo & Co. First Commerce Bancshares Inc. 2/2/2000 197.2 16.2 18.3
Huntington Bancshares Inc. Empire Banc Corp. 2/7/2000 306.1 19.8 25.9
Mutual Savings Bank First Northern Capital Corp. 2/22/2000 168.4 18.5 19.7
Harris Financial MHC York Financial Corp. 3/28/2000 158.1 19.2 23.6
BancorpSouth Inc. First United Bancshares Inc. 4/17/2000 186.7 13.6 13.7
Prudential Plc Highland Bancorp Inc. 4/25/2000 224.0 11.3 10.5
Queens County Bancorp Inc. Haven Bancorp Inc. 6/27/2000 171.3 17.5 12.3
U.S. Bancorp Scripps Financial Corp. 6/27/2000 325.6 32.9 32.4
Wells Fargo & Co. Brenton Banks Inc. 7/7/2000 204.0 15.4 NA
M&T Bank Corp. Premier National Bancorp Inc. 7/10/2000 250.9 16.5 16.7
BB&T Corp. FCNB Corp. 7/27/2000 259.7 19.5 18.7
BB&T Corp. BankFirst Corp. 8/23/2000 159.0 16.1 20.0
Fifth Third Bancorp Ottawa Financial Corp. 8/31/2000 230.4 16.9 16.9
Compass Bancshares Inc. FirsTier Corporation 9/5/2000 455.5 19.3 NA
BB&T Corp. FirstSpartan Financial Corp. 9/6/2000 144.1 15.2 15.2
Valley National Bancorp Merchants New York Bancorp 9/6/2000 389.1 18.1 18.1
Union Planters Corp. Jefferson Savings Bancorp Inc. 9/20/2000 131.1 12.3 12.3
Southwest Bancorp. of Texas Citizens Bankers Inc. 10/17/2000 308.0 23.2 NA
Fifth Third Bancorp Capital Holdings Inc. 10/25/2000 244.4 20.8 20.8
Wachovia Corp. Republic Security Financial 10/30/2000 184.7 13.5 14.9
Park National Corp. Security Banc Corp. 11/21/2000 274.7 18.1 18.1
Hudson River Bancorp Cohoes Bancorp Inc. 11/24/2000 125.9 25.7 21.0
Average 236.0 18.3 18.5
Median 224.0 18.1 18.1
Deal Price: $30.81
BB&T Corp Century South Banks, Inc. 290.6 23.0 20.4
Over/(Under) Average Comparables 54.6 4.7 1.9
* Source for acquisition comparables: SNL Securities.
</TABLE>
10
<PAGE>
<TABLE>
Comparable Acquisitions Announced in the Southeast since June 1, 2000
with Seller Assets over $50 Million
Date Seller Deal Value/ Deal Pr/ Deal
Buyer Seller Announced Total Assets Deal Value Assets Stock Pr Pr/Bk
($M) ($M) (%) (%) (%)
<S> <C> <C> <C> <C> <C> <C> <C>
First Community Bcshs Inc. Citizens Southern Bank 6/27/2000 64.6 6.5 10.14 NA 131.0
RHBT Financial Corp. Ridgeway Bancshares Inc. 6/28/2000 64.5 13.7 21.26 NA 194.9
F&M National Corp. Atlantic Financial Corp. 7/6/2000 385.5 71.7 18.60 22.53 162.2
FNB Corp. CNB Holdings Inc. 7/11/2000 51.1 10.1 19.97 32.50 165.4
Citco Community Bkshrs, Inc. Twin City Bancorp 7/18/2000 121.2 20.2 16.67 11.09 139.8
FNB Corp. SWVA Bancshares Inc. 8/8/2000 83.1 8.7 10.47 149.23 129.5
Whitney Holding Corp. Prattville Fncl. Srvcs. Corp. 8/8/2000 165.7 40.5 24.44 NA 179.7
BB&T Corp. BankFirst Corp. 8/23/2000 848.8 147.9 17.42 9.76 155.8
BB&T Corp. FirstSpartan Financial Corp. 9/6/2000 585.7 102.1 17.43 31.90 144.1
Synovus Financial Corp. Carolina Southern Bank 9/19/2000 212.4 64.1 30.18 28.10 272.4
First Sterling Banks Inc. Walton Bank & Trust Co 9/26/2000 58.4 15.0 25.71 NA 240.9
Capital City Bank Group Inc. First Bkshrs of W Point Inc. 9/26/2000 146.5 16.9 11.54 NA 108.7
SouthTrust Corp. First Bank Holding Company 9/28/2000 99.8 22.3 22.35 NA 276.2
Alabama National BanCorp. Peoples State Bk of Groveland 10/10/2000 116.4 15.5 13.31 NA 183.0
First Bancorp Century Bancorp Inc. 10/20/2000 100.5 21.7 21.58 37.54 121.2
Wachovia Corp. Republic Security Financial 10/30/2000 3,397.0 342.9 10.09 17.89 165.1
WesBanco Inc. Freedom Bancshares Inc. 11/24/2000 97.2 11.0 11.31 NA 146.2
Average 388.1 54.8 17.8 37.8 171.5
Median 116.4 20.2 17.4 9.8 162.2
Deal Price: $30.81
BB&T Corp Century South Banks, Inc. 1,614.5 428.2 26.5 26.7 271.2
Over/(Under) Average Comparables 8.7 (11.1) 99.7
Deal Pr Deal Pr/
Date Deal Pr/ LTM LTM Core
Buyer Seller Announced Tg Bk EPS EPS
(%) (x) (x)
<S> <C> <C> <C> <C> <C>
First Community Bcshs Inc. Citizens Southern Bank 6/27/2000 131.0 NA 30.4
RHBT Financial Corp. Ridgeway Bancshares Inc. 6/28/2000 206.6 NA 13.6
F&M National Corp. Atlantic Financial Corp. 7/6/2000 166.0 16.5 17.6
FNB Corp. CNB Holdings Inc. 7/11/2000 NA 50.5 55.8
Citco Community Bkshrs, Inc. Twin City Bancorp 7/18/2000 139.8 16.7 16.7
FNB Corp. SWVA Bancshares Inc. 8/8/2000 129.5 21.5 19.9
Whitney Holding Corp. Prattville Fncl. Srvcs. Corp. 8/8/2000 179.7 NA 25.7
BB&T Corp. BankFirst Corp. 8/23/2000 159.0 20.0 16.1
BB&T Corp. FirstSpartan Financial Corp. 9/6/2000 144.1 15.2 15.2
Synovus Financial Corp. Carolina Southern Bank 9/19/2000 272.4 23.4 23.4
First Sterling Banks Inc. Walton Bank & Trust Co 9/26/2000 240.9 NA 16.9
Capital City Bank Group Inc. First Bkshrs of W Point Inc. 9/26/2000 113.1 NA 30.3
SouthTrust Corp. First Bank Holding Company 9/28/2000 276.2 NA 21.8
Alabama National BanCorp. Peoples State Bk of Groveland 10/10/2000 183.0 NA 12.8
First Bancorp Century Bancorp Inc. 10/20/2000 121.2 21.1 21.1
Wachovia Corp. Republic Security Financial 10/30/2000 184.7 14.9 13.5
WesBanco Inc. Freedom Bancshares Inc. 11/24/2000 146.8 NA 18.6
Average 174.6 22.2 21.7
Median 159.0 14.9 18.6
Deal Price: $30.81
BB&T Corp Century South Banks, Inc. 290.6 23.0 20.4
Over/(Under) Average Comparables 116.0 0.8 (1.3)
*Source for Acquisition Comparables: SNL Securities.
</TABLE>
11
<PAGE>
Financial Data
12
<PAGE>
Financial Summary
For Quarter Ended: 9/30/00 9/30/00
BB&T* CSBI*
---- ----
ROA 1.61% 1.31%
ROE 20.25 13.70
Net interest margin (FTE) 4.16 4.98
CB Efficiency ratio 49.40 62.88
Net charge-offs .23 .17
Reserve/NPLs 405.37 259.00
NPAs/assets .28 .52
*Recurring earnings
13
<PAGE>
Capital Strength
BB&T CSBI
(9/30/00) (9/30/00)
--------- ---------
Equity/assets 7.7% 9.7%
Leverage capital ratio 6.9% 9.3%
Total risk-based capital 12.1% 14.3%
14
<PAGE>
Rationale For Acquisition
- BB&T has an announced strategy to pursue in-market (Carolinas/Virginia/West
Virginia/DC/Maryland/Georgia/ Tennessee) and contiguous state acquisitions
of high quality banks and thrifts in the $250 million to $10 billion range.
The acquisition of Century South Banks, Inc. is consistent with this
strategy.
- This acquisition is very consistent with past acquisitions which we have
successfully executed, i.e. it fits our model.
- Century South provides BB&T with an enhanced market presence in the high
growth Metro Atlanta, Savannah, Dalton, and Macon markets.
15
<PAGE>
Strategic Objectives
The key strategic objectives achieved in this acquisition:
- Increases market share in BB&T's existing Georgia markets
- Improves efficiency
- 35% cost savings fully realized in the first 12 months of operations
following conversion
- Utilizes Century South's branch franchise to sell BB&T's broad array of
retail and commercial banking products to their existing customer base
and expand the reach of the branch beyond Century South's traditional
customer
- Increases product and market penetration through the use of BB&T's world
standard sales system
16
<PAGE>
Franchise Enhancement
- Improves BB&T's market share from #8 to #7 in Georgia
- Provides added presence to BB&T's existing markets in Savannah and Macon
- Extends BB&T's branch distribution system in the most attractive markets
of Metro Atlanta, and northward towards BB&T's existing operations in
Dalton, Georgia and Greenville, South Carolina
- Significantly increases market share in north Georgia, specifically
Gainesville and Dahlonega, giving BB&T the mass to create a third
Georgia-based community bank
- Enhances BB&T's initial entry into Tennessee with branches in 3
communities that complement the operations of BB&T's pending acquisition
of BankFirst Corporation
- Significant cross-sell opportunities from addition of BB&T's broad product
line
17
<PAGE>
CSBI's Distribution of Deposits
Percentage of Total Deposits
[Pie Chart Displays the Following Percentage of Total Deposits]
Atlanta 36%
Savannah 11%
Macon 11%
Dalton 5%
Athens 5%
Other in Georgia 9%
North Carolina 9%
Alabama 7%
Tennessee 7%
18
<PAGE>
Efficiency Improvement
Targeted Annual Cost Savings
----------------------------
$18.3 million or approximately
35% of CSBI's expense base
Assumes closing of 11 of 40 locations
19
<PAGE>
After-Tax One-Time Charges
One-time after-tax merger-related charges
$21.0 million
20
<PAGE>
Branch Locations
[Map showing location of both existing and pending BB&T branches
throughout AL, MD, VA, DC, WV, KY, NC, SC, TN and GA inserted here]
21
<PAGE>
Branch Locations
[Map showing location of Century South Bank branches
throughout GA, AL, NC, and TN inserted here]
22
<PAGE>
Market Characteristics
[Graphic of State of Georgia inserted on left side of slide]
- Georgia is the 10th most populated state. In the past 5 years, the
population gain is the 4th largest in the country.
- Job growth in Georgia is projected to be the fastest in the Southeast.
- Atlanta, Savannah, and Macon are Georgia's 3 fastest growing MSAs.
- With 3.76 million residents (2000 estimate), the Metro Atlanta market is
the Southeast's largest and fastest growing MSA, ranking 11th in the
nation.
- With a projected 267,600 new jobs created between 1995-2000, Metro Atlanta
was rated as the Top Metropolitan Area for Job Creation by DRI/McGraw Hill.
23
<PAGE>
Market Characteristics
[Graphic of State of Georgia inserted on left side of slide
with Metro Atlanta area displayed with concentric circles]
- In 1999 Metro Atlanta was ranked #1 nationally in terms of population net
migration by the Bureau of Census.
- Metro Atlanta was ranked #1 nationally in terms of private building permits
issued year-to-date by the Bureau of Census.
- Metro Atlanta experienced the 2nd largest population growth in the US from
1990 to 1998, behind only Los Angeles, CA.
- The US Bureau of Labor Statistics projects employment in Atlanta to
increase by 1.8 million between 1998-2025, the fastest job growth in the
US.
- Metro Atlanta was noted as having the "Best Economic Performance in the US"
from 1997-2000 by EYKL Ernst & Young Kenneth Leventhal Group.
24
<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.
25
<PAGE>
Assumptions
- BB&T's 2001 EPS is based on the First Call estimate of $2.46 and subsequent
years are based on 12% income statement and balance sheet growth.
- CSBI's 2001 EPS, prior to acquisition effects, is based on the First Call
estimate of $1.65.
- 35% annual cost savings ($18.3 million) fully realized in the first 12
months following conversion.
- Growth Rates - Following the acquisition, we have assumed a base rate of 12%
income statement and balance sheet growth except for the enhancements cited
below:
- CSBI's noninterest income is grown at approximately 26% in years 1
through 5 in order to achieve a fee income ratio of 25% by year 5 and is
then grown at 12% in years 6 - 10.
- CSBI's core net interest margin (non-FTE) is incrementally decreased to
4.50% by year 5 and held constant thereafter.
- CSBI's loan loss allowance is conformed to BB&T's allowance level of 1.30%.
- CSBI's net charge-off rate for loan losses is raised to 0.35% in year 1 and
is held constant thereafter.
26
<PAGE>
Earnings Per Share Impact
Accretion Accretion
(Dilution) Pro Forma (Dilution)
Pro Forma Pro Forma Cash Basis Pro Forma
EPS Shares EPS Shares
----------- ----------- ------------ ------------
2001* $ 2.45 $ (0.01) $ 2.58 $ (0.02)
2002 2.78 0.01 2.91 0.01
2003 3.11 0.01 3.24 0.01
2004 3.48 0.01 3.62 0.01
2005 3.91 0.02 4.04 0.02
2006 4.37 0.02 4.51 0.02
2007 4.90 0.02 5.03 0.02
2008 5.49 0.03 5.62 0.03
2009 6.15 0.03 6.28 0.03
2010 6.89 0.04 7.02 0.03
Internal rate of return 17.21%
-------
*Recurring earnings
27
<PAGE>
ROE Impact 1
Pro Forma
Pro Forma Cash Basis
ROE(%) Change ROE (%) Change
----------- -------- ------------ --------
2001 2 21.38 (0.10) 26.02 (0.20)
2002 21.87 0.08 25.74 0.02
2003 21.36 0.06 24.38 0.01
2004 20.87 0.05 23.24 0.01
2005 20.47 0.07 22.32 0.04
1 The decrease in ROE results from the buildup in equity relative to assets. If
consistent with attaining and maintaining a leverage capital ratio of at least
7%, BB&T may choose to leverage the balance sheet further through future
purchase acquisitions.
2 Recurring earnings
28
<PAGE>
ROA Impact
Pro Forma
Pro Forma Cash Basis
ROA (%) Change ROA (%) Change
----------- -------- ------------ --------
2001* 1.64 (0.00) 1.75 (0.01)
2002 1.67 0.01 1.76 0.01
2003 1.67 0.01 1.75 0.01
2004 1.67 0.01 1.74 0.01
2005 1.67 0.01 1.74 0.01
*Recurring earnings
29
<PAGE>
Book Value/Capital Impact
Pro Forma
Book Value Per Share
-------------------- Pro Forma
Accretion Leverage Accretion
Stated (Dilution) Ratio (Dilution)
-------- ------------ ---------- -----------
2001 $ 11.97 $ (0.01) 7.22% 0.02
2002 13.72 0.01 7.57 0.03
2003 15.74 0.00 7.91 0.03
2004 18.03 0.01 8.22 0.03
2005 20.61 0.03 8.49 0.04
2006 23.50 0.05 8.72 0.04
2007 26.73 0.08 8.93 0.05
2008 30.35 0.10 9.11 0.05
2009 34.41 0.13 9.26 0.05
2010 38.95 0.17 9.40 0.06
30
<PAGE>
Summary
- The acquisition of Century South Banks, Inc. is a strong strategic fit:
- It helps accomplish our goal of expanding the Georgia market; more
specifically, the Atlanta MSA
- 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 year 2
- IRR 17.21%
- ROE and Cash ROE accretive in year 2
- ROA and Cash ROA accretive in year 2
- Book value accretive in year 3
- Combined leverage ratio remains above 7%
31
<PAGE>
Appendix
- Historical Financial Data
- Glossary
- Where to go for additional information about BB&T, Century South Banks, Inc.
and the merger
32
<PAGE>
<TABLE>
<CAPTION>
Century South Banks, Inc. Nine months 9/30/00
Financial Summary ended vs.
September 30, 9/30/99
1997 % Change 1998 % Change 1999 % Change 2000 % Change
--------------------------------------------------------------------------------------------
Earnings Summary (In thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest Income (FTE)
Interest on loans & leases ............ $ 87,318 N/A $ 93,921 7.6% $ 95,532 1.7% $ 86,643 22.8%
Interest & dividends on securities .... 15,807 N/A 12,929 -18.2% 13,628 5.4% 13,712 37.9%
Interest on temporary investments ..... 3,093 N/A 3,055 -1.2% 1,896 -37.9% 848 -42.8%
---------- ---------- ----------- -----------
Total interest income (FTE) ....... 106,218 5.8% 109,905 3.5% 111,056 1.0% 101,203 23.4%
---------- ---------- ----------- -----------
Interest Expense
Interest expense on deposit accounts .. 46,598 N/A 46,272 -0.7% 43,824 -5.3% 41,753 28.8%
Interest on short-term borrowings ..... 69 N/A 69 0.0% 569 724.6% 970 139.5%
Interest on long-term debt ............ 586 N/A 547 -6.7% 1,410 157.8% 3,325 307.5%
---------- ---------- ----------- -----------
Total interest expense ............ 47,253 4.6% 46,888 -0.8% 45,803 -2.3% 46,048 36.9%
---------- ---------- ----------- -----------
Net interest income (FTE) ............. 58,965 6.7% 63,017 6.9% 65,253 3.5% 55,155 14.1%
Less taxable equivalency
adjustment ..................... 1,285 1,265 1,066 657
---------- ---------- ----------- -----------
Net interest income ................... 57,680 6.3% 61,752 7.1% 64,187 3.9% 54,498 14.7%
Provision for loan losses ............. 5,567 125.4% 3,425 -38.5% 2,593 -24.3% 1,998 7.2%
---------- ---------- ----------- -----------
Net interest income after provision ... 52,113 0.6% 58,327 11.9% 61,594 5.6% 52,500 15.0%
---------- ---------- ----------- -----------
Noninterest Income
Service charges on deposit accounts ... 6,851 N/A 7,146 4.3% 6,674 -6.6% 5,581 12.2%
Non-deposit fees and commissions ...... -- N/A -- N/A -- N/A -- N/A
G / (L) on sale of real estate &
securities .......................... 24 N/A 393 1537.5% 474 20.6% 85 -82.0%
Other operating income ................ 4,738 N/A 5,741 21.2% 5,759 0.3% 5,378 24.1%
---------- ---------- ----------- -----------
Total noninterest income .......... 11,613 7.7% 13,280 14.4% 12,907 -2.8% 11,044 13.0%
---------- ---------- ----------- -----------
Noninterest Expense
Personnel ............................. 24,383 N/A 26,891 10.3% 27,129 0.9% 23,027 13.0%
Occupancy & equipment ................. 6,915 N/A 6,563 -5.1% 7,157 9.1% 5,337 0.9%
FDIC premiums ......................... -- N/A -- N/A -- N/A -- N/A
Other operating expenses .............. 14,479 N/A 14,197 -1.9% 13,218 -6.9% 12,053 19.5%
---------- ---------- ----------- -----------
Total noninterest expense ......... 45,777 9.7% 47,651 4.1% 47,504 -0.3% 40,417 13.1%
---------- ---------- ----------- -----------
Net income before taxes ............... 17,949 -13.8% 23,956 33.5% 26,997 12.7% 23,127 17.5%
Income taxes .......................... 5,136 7,936 8,935 7,629
Net income before nonrecurring
---------- ---------- ----------- -----------
charges ............................. 12,813 -14.1% 16,020 25.0% 18,062 12.7% 15,498 17.4%
---------- ---------- ----------- -----------
Nonrecurring charges .................. (438) 1,174 (2,282) --
---------- ---------- ----------- -----------
Net income ........................ $ 12,375 -17.0% $ 17,194 38.9% 15,780 -8.2% 15,498 17.4%
========== ========== =========== ===========
Basic EPS ............................. $ 0.93 -17.7% $ 1.28 37.6% $ 1.17 -8.6% $ 1.13 15.9%
Diluted EPS ........................... 0.91 -17.8% 1.26 38.3% 1.16 -8.0% 1.12 15.6%
Diluted EPS before nonrecurring
charges ............................. 0.94 -14.9% 1.18 24.5% 1.33 13.0% 1.12 15.6%
Book value ............................ $ 9.35 7.6% $ 10.15 8.6% $ 10.22 0.7% $ 11.36 8.0%
EOP shares ............................ 13,331 13,467 13,318 13,731
Basic shares .......................... 13,303 13,430 13,490 13,695
Diluted shares ........................ 13,567 13,626 13,590 13,837
N/A - NOT AVAILABLE
</TABLE>
33
<PAGE>
<TABLE>
<CAPTION>
Century South Banks, Inc. Nine months 9/30/00
Financial Summary ended vs.
September 30, 9/30/99
1997 % Change 1998 % Change 1999 % Change 2000 % Change
--------------------------------------------------------------------------------------------
Average Balance Sheet
(In thousands)
Assets
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Loans ............................... $ 827,281 8.3% $ 907,818 9.7% $ 971,521 7.0% $1,167,543 21.6%
Securities .......................... 237,887 -1.5% 197,624 -16.9% 215,943 9.3% 278,206 32.2%
Other earning assets ................ 59,315 28.1% 54,624 -7.9% 37,844 -30.7% 14,151 -64.9%
Total interest-earning
------------ ----------- ------------ -----------
assets ........................ 1,124,483 6.9% 1,160,066 3.2% 1,225,308 5.6% 1,459,900 20.6%
------------ ----------- ------------ -----------
Goodwill & other intangibles ........ -- N/A 6,570 N/A 4,397 -33.1% 10,172 129.0%
Other assets ........................ 92,629 -4.7% 91,126 -1.6% 88,569 -2.8% 86,988 -1.5%
------------ ----------- ------------ -----------
Total assets .................... $ 1,217,112 5.9% $1,257,762 3.3% $ 1,318,274 4.8% $1,557,060 19.5%
============ =========== ============ ===========
Net interest margin FTE ............. 5.2% 5.4% 5.3% 5.0%
Securities as a percent of
earning assets .................... 21.2% 17.0% 17.6% 19.1%
Liabilities & Shareholders' Equity
Interest-bearing deposits:
Money Market & NOW .................. $ 250,561 14.0% $ 288,866 15.3% $ 311,481 7.8% $ 374,174 21.6%
Savings ............................. 84,852 2.7% 68,458 -19.3% 68,001 -0.7% 74,647 9.6%
CD's and other time ................. 600,938 3.7% 593,783 -1.2% 595,778 0.3% 691,638 17.0%
------------ ----------- ------------ -----------
Total interest-bearing
deposits ...................... 936,351 6.2% 951,107 1.6% 975,260 2.5% 1,140,459 18.0%
Short-term borrowed funds ........... 833 -58.5% 895 7.4% 10,955 1124.0% 20,341 91.4%
Long-term debt ...................... 9,701 -27.2% 10,608 9.3% 25,006 135.7% 71,877 265.4%
------------ ----------- ------------ -----------
Total interest-bearing
liabilities ................... 946,885 5.5% 962,610 1.7% 1,011,221 5.0% 1,232,677 23.6%
Demand deposits ..................... 139,255 6.7% 152,006 9.2% 154,992 2.0% 159,528 3.3%
Other liabilities ................... 10,806 -15.5% 11,955 10.6% 13,090 9.5% 15,626 26.2%
------------ ----------- ------------ -----------
Total liabilities ............... 1,096,946 5.4% 1,126,571 2.7% 1,179,303 4.7% 1,407,831 21.0%
------------ ----------- ------------ -----------
Preferred equity .................... -- -- -- --
Common equity ....................... 120,166 131,191 138,971 149,229
------------ ----------- ------------ -----------
Total equity .................... 120,166 10.9% 131,191 9.2% 138,971 5.9% 149,229 7.1%
------------ ----------- ------------ -----------
------------ ----------- ------------ -----------
Total liabilities & shareholders'
equity ............................ $ 1,217,112 5.9% $1,257,762 3.3% $ 1,318,274 4.8% $1,557,060 19.5%
============ =========== ============ ===========
Other int-liab. as a percent of
total assets 0.9% 0.9% 2.7% 5.9%
34
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Century South Banks, Inc. Nine months 9/30/00
Financial Summary ended vs.
September 30, 9/30/99
1997 % Change 1998 % Change 1999 % Change 2000 % Change
--------------------------------------------------------------------------------------------
Ratio Analysis
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ROA ............................... 1.1% 1.3% 1.4% 1.3%
ROCE .............................. 10.7% 12.2% 13.0% 13.9%
Efficiency ratio .................. 64.9% 62.8% 61.1% 61.1%
Adj. noninterest income /
Adj. revenues ................... 16.4% 17.0% 16.0% 16.6%
Average equity / Average assets ... 9.9% 10.4% 10.5% 9.6%
Credit Quality
(In thousands)
Beginning ......................... $ 11,568 $ 13,690 $ 14,108 $ 15,183
------------ ----------- ------------ -----------
Provision ......................... 5,567 3,425 2,593 1,998
Acquired allowance ................ -- (558) -- 1,378
Net charge-offs ................... (3,445) (2,449) (1,518) (969)
------------ ----------- ------------ -----------
Ending allowance .................. $ 13,690 $ 14,108 $ 15,183 $ 17,590
Allowance ......................... 1.56% 1.53% 1.47% 1.45%
Charge-off rate ................... 0.42% 0.27% 0.16% 0.11%
Period end loans,net of
unearned & leases ............... $ 877,638 10.9% $ 924,061 5.3% $1,030,373 11.5% $ 1,217,184 21.5%
Period end common equity .......... $ 124,630 7.7% $ 136,681 9.7% $ 136,085 -0.4% $ 156,034 9.6%
Period end assets ................. $ 1,264,424 5.0% $1,262,471 -0.2% $1,393,402 10.4% $ 1,614,497 20.2%
35
</TABLE>
<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.
36
<PAGE>
The foregoing may be deemed to be offering materials of BB&T Corporation in
connection with BB&T's proposed acquisition of Century South Banks, Inc. on the
terms and subject to be conditions in the Agreement and Plan of Reorganization,
dated December 4, 2000, between BB&T and Century South. This filing is being
made in connection with Regulation of Takeovers and Security Holder
Communications (Release Nos. 33-7760 and 34-42055) adopted by the Securities and
Exchange Commission ("SEC").
Shareholders of Century South and other investors are urged to read the proxy
statement/prospectus that will be included in the registration statement of Form
S-4 which BB&T will file with the SEC in connection with the proposed merger
because it will contain important information about BB&T, Century South, the
merger, the persons soliciting proxies in the merger and their interests in the
merger and related matters. After it is filed with the SEC, the proxy
statement/prospectus will be available for free, both on the SEC's web site
(http://www.sec.gov) and from CSBI and BB&T as follows:
Stephen W. Doughty Alan W. Greer
Chief Financial Officer Shareholder Reporting
Century South Banks, Inc. BB&T Corporation
2325 Lakeview Pkwy, Suite 450 Post Office Box 1290
Alpharetta, Georgia 30004 Winston-Salem, North Carolina 27102
Phone: (678) 624-1366 Phone: (336) 733-3021
In addition to the proposed registration statement and proxy
statement/prospectus, BB&T and CSBI file annual, quarterly and special reports,
proxy statements and other information with the SEC. You may read and copy any
reports, statements or other information filed by either company at the SEC's
public reference rooms at 450 Fifth Street, N.W., Washington, D.C. 20549 or at
the SEC's other public reference rooms in New York, New York and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information on the
public reference rooms. BB&T's and CSBI's filings with the SEC are also
available to the public from commercial document-retrieval services and on the
SEC's web site at http://www.sec.gov.
37
<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: December 5, 2000.
