Filed by BB&T Corporation
Pursuant to Rule 425 under the
Securities Act of 1933
Commission File No.: 001-10853
Subject Company: BB&T Corporation
<PAGE>
<PAGE>
BB&T
and
FirstSpartan Financial Corp.
Spartanburg, SC
Expanding a Great Franchise
Analyst Presentation
September 6, 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
FirstSpartan Financial Corp.'s fee income ratio and net interest margin, 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 FirstSpartan Financial Corp., the amount of
general and administrative expense consolidation, costs relating to converting
FirstSpartan Financial Corp.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 FirstSpartan Financial Corp., 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 FirstSpartan Financial Corp. are engaged; (8)
adverse changes may occur in the securities markets; and (9) competitors of BB&T
and FirstSpartan Financial Corp. may have greater financial resources and
develop products that enable such competitors to compete more successfully than
BB&T and FirstSpartan Financial Corp.
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)
- $57.6 billion financial holding company*
- 891 branch locations in NC, SC, VA, GA, MD, WV, KY, TN, and the District
of Columbia*
For 3 months
ended 6/30/00**
-------------
- ROA 1.62%
- Cash Basis ROA 1.76%
- ROE 21.33%
- Cash Basis ROE 27.57%
- Cash Basis Efficiency Ratio 50.23%
* Includes the pending acquisition of FCNB Corp and BankFirst Corporation
** Recurring earnings.
4
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FirstSpartan Financial Corp.
(FSPT)
- $586 million unitary thrift holding company
- 11 banking offices in South Carolina
For 3 months
ended 6/30/00*
-------------
- ROA 1.11%
- Cash Basis ROA 1.11%
- ROE 9.21%
- Cash Basis ROE 9.21%
- Cash Basis Efficiency Ratio 55.00%
* Recurring earnings
5
<PAGE>
Pro Forma Company Profile
- Size: $58.2 billion in assets
$10.8 billion in market capitalization*
- Offices: NC: 337
VA: 146
GA: 102
SC: 101
WV: 83
MD: 83
TN: 32
KY: 10
DC: 8
--------------
Total 902
* Based on closing prices as of 9/05/00
6
<PAGE>
Terms of the Transaction
7
<PAGE>
Terms of the Transaction
- Purchase price: $26.875 per share*
- Aggregate value: $103.9 million*
- Consideration: Fixed exchange ratio of 1.0 share of BB&T
common stock for each FSPT share
- Structure: Tax-free exchange of stock equal to 100% of
purchase price
- Accounting Treatment: Transaction will be accounted for as a purchase
- Lock-up provision: Stock option agreement
- Expected closing: First quarter 2001
* Based on BB&T's closing stock price of $26.875 as of 9/05/00
8
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Pricing
- Purchase price $26.875
- Premium/market 31.9%*
- Price/6-30-00 stated book 1.44x
- Price/LTM EPS 15.18x
- BB&T shares issued 3.9 million**
* Based on FSPT's closing stock price of $20.375 as of 9/05/00
** BB&T shares issued based on FSPT shares outstanding adjusted for stock
options using the treasury method
9
<PAGE>
<TABLE>
Acquisition Comparables*
Acquisitions Announced since February 1, 2000
with Deal Values between $100 Million and $2 Billion
<CAPTION>
Date Seller Deal Value/ Deal Pr/
Buyer Seller Announced Total Assets Deal Value Assets Stock Pr
----- ------ --------- ------------ ---------- ------ --------
($M) ($M) (%) (%)
<S> <C> <C> <C> <C> <C> <C>
Wells Fargo & Company .......... First Commerce Bancshares Inc. 2/2/2000 2,545.6 479.7 18.8 8.9
BB&T Corp. ..................... One Valley Bancorp Inc. 2/7/2000 6,413.0 1,202.2 18.8 30.1
Huntington Bancshares Inc. ..... Empire Banc Corporation 2/7/2000 505.9 138.7 27.4 39.5
BancorpSouth Inc. .............. First United Bancshares Inc. 4/17/2000 2,666.0 455.7 17.1 42.6
M&T Bank Corporation ........... Keystone Financial Inc. 5/17/2000 7,012.3 1,026.7 14.6 33.4
U.S. Bancorp .................. Scripps Financial Corporation 6/27/2000 643.3 155.2 24.1 29.5
M&T Bank Corporation ........... Premier National Bancorp Inc. 7/10/2000 1,570.1 343.2 21.9 57.0
Southwest Securities Group ..... Matrix Bancorp Inc. 7/14/2000 1,302.6 112.3 8.6 140.6
BB&T Corp. ..................... FCNB Corp 7/27/2000 1,593.1 226.5 14.2 (8.8)
BB&T Corp. ..................... BankFirst 8/23/2000 848.8 149.7 17.6 9.8
Maximum ........................ 7,012.3 1,202.2 27.4 140.6
Minimum ........................ 505.9 112.3 8.6 (8.8)
Average ........................ 2,510.1 429.0 18.3 38.3
Median ......................... 1,581.6 284.9 18.2 31.7
Deal Price: $26.875
BB&T Corp ...................... FirstSpartan 585.7 103.9 17.7 31.9
Over/(Under) Average Comparables (325.1) (0.6) (6.4)
Deal Pr/ Deal Pr/
Deal Deal Pr/ LTM LTM Core
Pr/Bk Tg Bk EPS EPS
----- ----- --- ---
(%) (%) (x) (x)
Wells Fargo & Company .......... First Commerce Bancshares Inc. 2/2/2000 191.7 197.2 16.2 18.3
BB&T Corp. ..................... One Valley Bancorp Inc. 2/7/2000 211.4 232.5 15.1 15.4
Huntington Bancshares Inc. ..... Empire Banc Corporation 2/7/2000 304.0 306.1 19.8 25.9
BancorpSouth Inc. .............. First United Bancshares Inc. 4/17/2000 175.3 186.7 13.6 13.7
M&T Bank Corporation ........... Keystone Financial Inc. 5/17/2000 184.5 204.0 21.2 12.5
U.S. Bancorp .................. Scripps Financial Corporation 6/27/2000 325.6 325.6 32.9 32.4
M&T Bank Corporation ........... Premier National Bancorp Inc. 7/10/2000 242.8 250.9 16.5 16.7
Southwest Securities Group ..... Matrix Bancorp Inc. 7/14/2000 176.9 176.9 11.2 11.4
BB&T Corp. ..................... FCNB Corp 7/27/2000 243.3 259.7 19.5 15.4
BB&T Corp. ..................... BankFirst 8/23/2000 161.2 164.5 16.3 15.9
Maximum ........................ 325.6 325.6 32.9 32.4
Minimum ........................ 161.2 164.5 11.2 11.4
Average ........................ 221.7 230.4 18.2 17.8
Median ......................... 201.6 218.3 16.4 15.7
Deal Price: $26.875
BB&T Corp ...................... FirstSpartan 144.1 144.1 15.2 15.2
Over/(Under) Average Comparables (77.6) (86.3) (3.0) (2.6)
* Source for Acquisition Comparables: SNL Securities.
</TABLE>
10
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Financial Data
11
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Financial Summary
For Quarter Ended: 6/30/00 6/30/00
BB&T* FSPT
---- ----
ROA 1.62% 1.11%
ROE 21.33 9.21
Net interest margin (FTE) 4.22 3.68
CB Efficiency ratio 50.23 55.00
Net charge-offs .22 .01
Reserve/NPLs 384.28 100.90
NPAs/assets .29 .67
* Recurring earnings
12
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Capital Strength
BB&T FSPT
(6/30/00) (6/30/00)
--------- ---------
Equity/assets 7.6% 12.1%
Leverage capital ratio 7.1% 11.9%
Total risk-based capital 12.7% 18.3%
13
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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 FirstSpartan Financial Corp. is consistent with this
strategy.
- This acquisition is very consistent with past acquisitions which we have
successfully executed, i.e. it fits our model.
14
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Strategic Objectives
The key strategic objectives achieved in this acquisition:
- Enhances franchise value with an additional $586 million in assets in
Upstate SC and the number one market share position in Greenville and
Spartanburg counties.
- Improves efficiency
- 45.0% cost savings fully realized in the first 12 months of operations
following conversion.
- Utilizes FirstSpartan'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 FirstSpartan's traditional thrift
customer.
- Increases product and market penetration through the use of BB&T's world
standard sales system.
15
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Franchise Enhancement
- Acquisition of a successful $586 million community bank that has an
operating philosophy and core values very similar to those of BB&T.
- Moves BB&T from the number four market share position in economically
attractive Spartanburg County to the number one position with a 25%
market share.*
- Strengthens BB&T's existing #1 market share position in the strategically
important Greenville - Spartanburg - Anderson MSA.
* Based on June 30, 1999 FDIC Deposit Information
16
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Efficiency Improvement
Targeted Annual Cost Savings
----------------------------
$6.2 million or approximately
45.0% of FSPT's expense base
Assumes closing of 6 of 11 locations
or 55% of FSPT's branches
17
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After-Tax One-Time Charges
One-time after-tax merger-related charges
$2.8 million
18
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Branch Locations
[Map showing location of both existing and pending BB&T branches
throughout MD, VA, DC, WV, KY, NC, SC, TN and GA inserted here]
19
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Branch Locations
[Map showing location of BB&T and FirstSpartan Financial Corporation
branches throughout South Carolina inserted here]
20
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Market Characteristics
[Graphic of State of South Carolina inserted on left side of slide]
- According to a study conducted by the European version of Expansion
Management magazine, Greenville-Spartanburg-Anderson MSA received nearly
$1.9 billion in European investment from 1998 to 1999, the most of any area
in the U.S.
- The Greenville-Spartanburg-Anderson MSA is a key part of the super-regional
urban corridor along I-85. This geographic area, stretching from Atlanta
through Upstate South Carolina to the triangle area in North Carolina, has
been cited as one of the fastest growing urban regions in the nation.
- Greenville-Spartanburg-Anderson MSA ranks in the top 50 MSA's in net
in-migration.
- BMW recently announced plans for a $300 million expansion of its Spartanburg
County facility, which will create an additional 500 jobs. This follows a
recently completed $600 million investment which doubled the employment for
the production of the X5.
- More than 500 manufacturing companies are located in Spartanburg County.
Although the textile industry in still a major component of the area's
industrial base, the area is now home to a broad array of other industries
such as automotive and automotive-related industries and food processing and
packaging industries.
- Entrepreneur magazine named the Greenville-Spartanburg-Anderson MSA as the
8th best mid-sized area for small business.
21
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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 tradeoffs among
criteria.
22
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Assumptions
- BB&T's 2000 and 2001 EPS are based on a First Call estimate of $2.17 and
$2.47 and subsequent years are based on 12% income statement and balance
sheet growth.
- FSPT's 2000 EPS is based on an EPS estimate of $1.75 provided by FSPT's
management.
- 45% annual cost savings ($6.2 million) fully realized in the first 12 months
following conversion.
- Growth Rates - Following the acquisition, we have assumed 12% income
statement and balance sheet growth except for the enhancements cited below:
- FSPT's noninterest income is grown at approximately 22% in years 1-5,
14% in year 6 and year 7, and is then grown at 12% in the remaining
periods.
- FSPT's noninterest expense is grown at approximately 8% in year 1 and
then at 12% in the remaining years.
- FSPT's core net interest margin (non-FTE) is incrementally increased over
years 3-7 from a projected 3.53% in year 1 to 4.25% in year 7 and held
constant thereafter.
- FSPT's loan loss allowance is immediately raised to 1.30% to match BB&T's
reserve philosophy.
- FSPT's net charge-off rate for loan losses is incrementally increased over
years 1-5 from a projected 0.16% in year 1 to 0.35% in year 5 and held
constant thereafter.
- BB&T expects to purchase substantially all of the shares of its common stock
to be issued in connection with this transaction. Such purchases will be
made pursuant to authority granted by BB&T's board of directors.
23
<PAGE>
Earnings Per Share Impact
Accretion Accretion
(Dilution) Pro Forma (Dilution)
Pro Forma Pro Forma Cash Basis Pro Forma
EPS Shares EPS Shares
----------- ----------- ------------ ------------
2001* $ 2.47 $0.004 $ 2.62 $0.012
2002 2.78 0.013 2.93 0.021
2003 3.12 0.019 3.26 0.027
2004 3.50 0.027 3.64 0.035
2005 3.92 0.037 4.07 0.045
2006 4.40 0.047 4.54 0.055
2007 4.93 0.059 5.08 0.066
2008 5.53 0.068 5.67 0.076
2009 6.20 0.079 6.34 0.087
2010 6.94 0.091 7.09 0.099
Internal Rate of Return 22.62%
------
* Recurring Earnings
24
<PAGE>
ROE Impact 1
Pro Forma
Pro Forma Cash Basis
ROE (%) Change ROE (%) Change
----------- -------- ------------ --------
2001 2 21.59 0.034 26.72 0.420
2002 21.86 0.090 26.11 0.409
2003 21.39 0.106 24.70 0.350
2004 20.93 0.118 23.52 0.306
2005 20.52 0.128 22.54 0.273
1 The decrease in ROE results from the build up 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
25
<PAGE>
ROA Impact
Pro Forma
Pro Forma Cash Basis
ROA (%) Change ROA (%) Change
----------- -------- ------------ --------
2001* 1.64 (0.017) 1.75 (0.012)
2002 1.64 (0.012) 1.75 (0.007)
2003 1.65 (0.009) 1.74 (0.005)
2004 1.65 (0.006) 1.73 (0.003)
2005 1.66 (0.004) 1.73 (0.001)
* Recurring earnings
26
<PAGE>
Book Value/Capital Impact
Pro Forma
Book Value Per Share
-------------------- Pro Forma
Accretion Leverage Accretion
Stated (Dilution) Ratio (Dilution)
-------- ------------ ---------- -----------
2001 $ 12.00 $ 0.003 7.05% (0.153)
2002 13.75 0.012 7.42 (0.139)
2003 15.77 0.026 7.76 (0.125)
2004 18.08 0.047 8.08 (0.111)
2005 20.66 0.076 8.36 (0.097)
2006 23.57 0.113 8.60 (0.083)
2007 26.82 0.160 8.82 (0.069)
2008 30.47 0.214 9.00 (0.056)
2009 34.56 0.278 9.17 (0.045)
2010 39.14 0.350 9.31 (0.034)
27
<PAGE>
Summary
- The acquisition of FirstSpartan Financial Corp. is a strong strategic fit:
- Significantly improves our existing franchise in Spartanburg County with
a resulting market share percentage of 25%.
- It helps accomplish our goal of expanding and strengthening our position
in Upstate South Carolina.
- It fits culturally and geographically.
- Overall Investment Criteria are met:
- EPS and Cash Basis EPS accretive in year 1
- IRR 22.62%
- ROE and Cash ROE accretive immediately
- ROA accretive in year 7 and Cash ROA accretive in year 6
- Book value accretive in year 1
- Combined leverage ratio remains above 7%
28
<PAGE>
Appendix
- Historical Financial Data
- Glossary
- Where to go for additional information about BB&T, FirstSpartan and the
merger
29
<PAGE>
<TABLE>
FirstSpartan
Financial Summary
<CAPTION>
For The Year Ending June 30, June 30, June 30,
1998 1999 2000
-------- -------- ---------
Earnings Summary (In thousands)
<S> <C> <C> <C>
Interest Income (FTE)
Interest on loans & leases ................ $ 32,146 $ 34,811 $ 37,622
Interest & dividends on securities ........ 1,349 1,936 2,214
Interest on temporary investments ......... 3,919 1,878 1,070
-------- -------- ---------
Total interest income (FTE) ........... 37,414 38,625 40,906
-------- -------- ---------
Interest Expense
Interest expense on deposit accounts ...... 17,003 16,885 17,157
Interest on short-term borrowings ......... 150 1,481 4,066
Interest on long-term debt ................ -- -- --
-------- -------- ---------
Total interest expense ................ 17,153 18,366 21,223
-------- -------- ---------
Net interest income ....................... 20,261 20,259 19,683
Provision for loan losses ................. 460 800 683
-------- -------- ---------
Net interest income after provision ....... 19,801 19,459 19,000
-------- -------- ---------
Noninterest Income
Service charges on deposit accounts ....... 1,378 2,225 3,181
G / (L) on sale of real estate & securities -- (53) --
Other operating income .................... 988 1,926 1,075
-------- -------- ---------
Total noninterest income .............. 2,366 4,098 4,256
-------- -------- ---------
Noninterest Expense
Personnel ................................. 5,016 9,318 7,627
Occupancy & equipment ..................... 1,106 1,504 1,566
FDIC premiums ............................. 354 326 265
Other operating expenses .................. 3,344 1,732 3,990
-------- -------- ---------
Total noninterest expense ............. 9,820 12,880 13,448
-------- -------- ---------
Net income before taxes ................... 12,347 10,677 9,808
Income taxes .............................. 4,807 4,484 3,866
-------- -------- ---------
Net income before nonrecurring charges .... 7,540 6,193 5,942
-------- -------- ---------
Nonrecurring charges ...................... -- (1,219) (1) --
-------- -------- ---------
Net income ............................ $ 7,540 $ 4,974 $ 5,942
======== ======== =========
Basic EPS ................................. $ 1.85 $ 1.36 $ 1.77
Diluted EPS ............................... 1.85 1.36 1.77
Diluted EPS before nonrecurring charges ... 1.85 1.69 1.77
Book value ................................ $ 29.57 $ 17.43 $ 18.65
EOP shares ................................ 4,253 3,788 3,720
Basic shares .............................. 4,067 3,666 3,360
Diluted shares ............................ 4,067 3,666 3,360
Note 1: Reflects after-tax effect of $2.1 million compensation charge related to $12 special dividend.
</TABLE>
30
<PAGE>
<TABLE>
FirstSpartan
Financial Summary
<CAPTION>
For The Year Ending June 30, June 30, June 30,
1998 1999 2000
-------- -------- --------
Average Balance Sheet
(In thousands)
<S> <C> <C> <C>
Assets
Loans .................................. $395,465 $441,514 $474,156
Securities ............................. 22,059 34,127 34,820
Other earning assets ................... 63,967 34,902 18,147
-------- -------- --------
Total interest-earning assets ...... 481,491 510,543 527,123
-------- -------- --------
Goodwill & other intangibles ........... -- -- --
Other assets ........................... 17,544 24,740 31,957
-------- -------- --------
Total assets ....................... $499,035 $535,283 $559,080
======== ======== ========
Net interest margin .................... 4.21% 3.97% 3.73%
Liabilities & Shareholders' Equity
Interest-bearing deposits:
Money Market & NOW ..................... $ 51,462 $ 71,262 $ 77,875
Savings ................................ 61,931 55,485 53,001
CD's and other time .................... 238,845 245,720 257,055
-------- -------- --------
Total interest-bearing deposits .... 352,238 372,467 387,931
Short-term borrowed funds .............. 2,970 27,603 72,405
Long-term debt ......................... -- -- --
-------- -------- --------
Total interest-bearing liabilities . 355,208 400,070 460,336
Demand deposits ........................ 9,660 15,960 23,530
Other liabilities ...................... 6,901 5,725 7,016
-------- -------- --------
Total liabilities .................. 371,769 421,755 490,882
-------- -------- --------
Common equity .......................... 127,266 113,528 68,198
-------- -------- --------
Total equity ....................... 127,266 113,528 68,198
-------- -------- --------
-------- -------- --------
Total liabilities & shareholders' equity $499,035 $535,283 $559,080
======== ======== ========
31
</TABLE>
<PAGE>
<TABLE>
FirstSpartan
Financial Summary
For The Year Ending
<CAPTION>
June 30, June 30, June 30,
1998 1999 2000
---------- ---------- ----------
Ratio Analysis
<S> <C> <C> <C>
ROA ................................... 1.51% 1.16% 1.06%
ROCE .................................. 5.92% 5.46% 8.71%
Efficiency ratio ...................... 43.4% 52.8% 56.2%
Adj. noninterest income / Adj. revenues 10.5% 17.0% 17.8%
Average equity / Average assets ....... 25.5% 21.2% 12.2%
Credit Quality
(In thousands)
Beginning ............................. $ 1,796 $ 2,179 $ 2,896
---------- ---------- ----------
Provision ............................. 460 800 683
Acquired allowance .................... -- -- --
Net charge-offs ....................... (77) (83) (105)
-- -- --
---------- ---------- ----------
Ending allowance ...................... $ 2,179 $ 2,896 $ 3,474
---------- ---------- ----------
Allowance ............................. 0.52% 0.66% 0.69%
Charge-off rate ....................... 0.02% 0.02% 0.02%
Period end loans & leases ............. $ 419,484 $ 438,638 $ 507,123
Period end common equity .............. $ 125,761 $ 66,041 $ 69,384
32
</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.
33
<PAGE>
The foregoing may be deemed to be offering materials of BB&T Corporation in
connection with BB&T's proposed acquisition of FirstSpartan Financial Corp on
the terms and subject to the conditions in the Agreement and Plan of
Reorganization, dated September 5, 2000, between BB&T and FirstSpartan. 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 FirstSpartan 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, FirstSpartan, 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 FSPT and BB&T as follows:
Lamar Simpson Alan W. Greer
Chief Financial Officer Shareholder Reporting
FirstSpartan Financial Corp. BB&T Corporation
Post Office Box 1806 Post Office Box 1290
Spartanburg, SC 29304 Winston-Salem, North Carolina 27102
Phone: (864) 580-5500 Phone: (336) 733-3021
In addition to the proposed registration statement and proxy
statement/prospectus, BB&T and FSPT 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 FSPT'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.
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