FOR IMMEDIATE RELEASE Exhibit 99.1
July 13, 1998
Contact: Investors Susan Carr (704-386-8059)
Kevin Stitt (704-386-5667)
Media Bob Stickler (704-386-8465)
DOUBLE-DIGIT REVENUE GROWTH DRIVES 23 PERCENT INCREASE IN OPERATING EARNINGS
AT NATIONSBANK
CHARLOTTE, NC, July 13, 1998 -- NationsBank today reported that operating
earnings rose 23 percent in the second quarter to $1.13 billion, or $1.18 per
common share. Earnings totaled $919 million, or $.97 per share, a year earlier.
This significant earnings improvement was primarily due to strong, broad-based
increases in revenue, particularly from loan growth, investment banking and
brokerage activities.
The company also recorded during the second quarter of 1998 a $430 million pre-
tax gain on the sale of 67 banking offices in Florida arising from the merger
with Barnett Banks. Including that gain, net income for the quarter was $1.41
billion, or $1.47 per share.
"NationsBank's core operating performance trends continue to be quite positive,"
said Chief Executive Officer Hugh L. McColl Jr. "We are particularly pleased
with the growth in our fee-based businesses, such as investment banking and
brokerage, which is lessening our dependence on spread-based income." McColl
also noted that the assimilation of Barnett in Florida is on track. "We couldn't
feel better about both our transition efforts and our financial performance in
Florida," he said.
Operating earnings represented a return on average assets of 1.45 percent and a
return on equity of 18.3 percent, exceeding the 1.30 percent and 15.7 percent,
respectively, a year earlier.
Cash operating earnings -- which exclude the amortization of intangibles --
increased 21 percent from a year earlier to $1.27 billion, or $1.32 per share.
Return on average tangible common shareholders' equity rose to 35 percent on an
operating basis from 30 percent a year earlier.
For the first six months of 1998, operating earnings totaled $2.27 billion, or
$2.38 per share, up 28 percent from $1.77 billion, or $1.87 per share a year
earlier. Net income for the first six months was $1.90 billion, or $1.99 per
share.
Earnings Highlights (second quarter 1998 compared to second quarter 1997)
- -------------------------------------------------------------------------
* Total revenues increased 14 percent to $4.42 billion.
* Noninterest income rose 31 percent to $1.86 billion, equal to 42 percent of
total revenues compared to 37 percent a year earlier.
* Managed loans and leases grew 8 percent to $194 billion.
* The cash basis efficiency ratio improved to 53.6 percent from 54.0 percent.
Net Interest Income
- -------------------
Taxable-equivalent net interest income increased 4 percent to $2.56 billion, as
average earning assets grew 10 percent. The net interest yield on earning assets
declined by 24 basis points to 3.81 percent due to a higher level of investment
securities as a result of leveraging excess capital.
Noninterest Income
- ------------------
Noninterest income grew 31 percent to $1.86 billion. Investment banking and
brokerage fees more than doubled, reflecting strong internal growth as well as
the addition of NationsBanc Montgomery Securities in October 1997. Fees from
credit cards, service charges and mortgage banking as well as trading were also
up.
Efficiency
- ----------
Noninterest expense rose 12 percent to $2.51 billion, primarily due to the
addition of NationsBanc Montgomery Securities. The efficiency ratio improved to
56.7 percent from 57.3 percent a year earlier, reflecting benefits from mergers
and internal cost-control measures.
Credit Quality
- --------------
Nonperforming assets were $1.44 billion, or .80 percent of net loans, leases,
factored accounts receivable and foreclosed properties on June 30, 1998, down
from $1.49 billion, or .82 percent a year earlier. The allowance for credit
losses totaled $3.21 billion on June 30, 1998, equal to 248 percent of
nonperforming loans and 1.78 percent of net loans, leases and factored accounts
receivable. The provision for loan losses in the second quarter was $265
million. Net charge-offs were $276 million, equal to an annualized .61 percent
of average net loans, leases and factored accounts receivable.
Capital Strength
- ----------------
Total shareholders' equity was $26.7 billion at June 30, 1998. This represented
8.66 percent of period-end assets, compared to 8.27 percent on June 30, 1997.
Book value per common share rose 11 percent to $27.71 at June 30, 1998 from a
year earlier.
NationsBank Corporation, with $308 billion in assets, is the third largest U.S.
bank with full-service operations in 16 states and the District of Columbia.
NationsBank provides financial products and services to 18 million households
and 1 million businesses as well as institutional investors and government
agencies throughout the United States and in major markets around the world. The
company's shares (Symbol: NB) are listed on the New York Stock Exchange.
www.nationsbank.com
NationsBank Corporation
Three Months Six Months
Ended June 30 Ended June 30
Financial Summary 1998 1997 1998 1997
(In millions except per-share data)
Operating net income............... $ 1,131 $ 919 $ 2,270 $ 1,774
Operating earnings per common
share......................... 1.18 .97 2.38 1.87
Diluted operating earnings per
common share.................. 1.15 .94 2.32 1.81
Cash basis earnings (1)............ 1,268 1,046 2,546 2,014
Cash basis earnings per common
share......................... 1.32 1.10 2.67 2.12
Cash basis diluted earnings per
common share.................. 1.29 1.07 2.60 2.06
Dividends paid per common share.... .38 .33 .76 .66
Price per share of common stock at
period end....................... 76.69 64.56 76.69 64.56
Average common shares.............. 958.392 946.462 954.040 945.826
Average diluted common shares...... 982.335 976.453 978.032 976.767
Summary Income Statement (Operating Basis)
(Taxable-equivalent in millions)
Net interest income................ $ 2,563 $ 2,472 $ 5,127 $ 4,916
Provision for credit losses........ (265) (225) (530) (447)
Gains on sales of securities....... 108 29 260 72
Noninterest income................. 1,859 1,424 3,635 2,745
Foreclosed properties (expense)
income........................... (16) - (21) 2
Noninterest expense................ (2,508) (2,233) (4,960) (4,458)
Income before income taxes......... 1,741 1,467 3,511 2,830
Income taxes - including FTE
adjustment....................... 610 548 1,241 1,056
Operating net income............... $ 1,131 $ 919 $ 2,270 $ 1,774
Summary Balance Sheet
(Average balances in billions)
Loans and leases, net.............. $ 178.958 $ 179.430 $177.835 $ 178.405
Managed loans and leases, net (2).. 194.104 180.010 193.351 180.235
Securities......................... 47.170 27.210 48.295 27.382
Earning assets..................... 269.831 244.428 270.507 244.761
Total assets....................... 312.540 284.194 313.728 283.906
Deposits........................... 169.584 167.762 168.561 167.943
Shareholders' equity............... 24.855 23.531 24.584 23.598
Common shareholders' equity........ 24.797 23.426 24.524 23.458
Performance Indices (Operating Basis)
Return on average common
shareholders' equity............. 18.27% 15.68% 18.64% 15.18%
Return on average tangible common
shareholders' equity............. 35.06 30.36 36.29 28.30
Return on average assets........... 1.45 1.30 1.46 1.26
Return on average tangible assets.. 1.68 1.53 1.69 1.48
Net interest yield................. 3.81 4.05 3.81 4.05
Efficiency ratio................... 56.71 57.31 56.61 58.19
Cash basis efficiency ratio........ 53.60 54.03 53.45 55.05
Net charge-offs (in millions)...... $ 276 $ 220 $ 553 $ 435
% of average loans, leases and
factored accounts receivable,
net........................... .61% .49% .62% .49%
Managed credit card net charge-offs
as a % of average managed
credit card receivables........ 6.44 6.05 6.57 5.88
Reported Results (Including Merger and Restructuring Items)
(In millions except per-share data)
Net income......................... $ 1,408 $ 919 $ 1,905 $ 1,774
Earnings per common share....... 1.47 .97 1.99 1.87
Diluted earnings per common
share......................... 1.43 .94 1.95 1.81
Return on average common
shareholders' equity............... 22.75 15.68 15.64 15.18
(1) Cash basis earnings equal operating net income excluding amortization of
intangibles.
(2) Prior periods are restated for comparison (e.g. acquisitions, divestitures
and securitizations).
(3) Ratios and amounts for 1997 have not been restated to reflect the impact of
the Barnett Banks, Inc. merger.
June 30
1998 1997
Balance Sheet Highlights
(In billions except per-share data)
Loans and leases, net.................................... $ 179.755 $ 180.424
Securities............................................... 44.958 25.849
Earning assets........................................... 268.393 245.240
Total assets............................................. 307.985 284.286
Deposits................................................. 169.238 168.444
Shareholders' equity..................................... 26.670 23.506
Common shareholders' equity.............................. 26.607 23.445
Per share............................................. 27.71 25.00
Total equity to assets ratio (period-end)................ 8.66 8.27
Risk-based capital (3)
Tier 1 capital ratio.................................. 7.30% 6.83%
Total capital ratio................................... 11.77 11.32
Leverage ratio (3)....................................... 6.21 6.05
Common shares issued (in millions)....................... 960.352 937.822
Allowance for credit losses.............................. $ 3.215 $ 3.272
Allowance for credit losses as a % of net loans, leases
and factored accounts receivable...................... 1.78% 1.80%
Allowance for credit losses as a % of
nonperforming loans................................... 248.15 253.11
Nonperforming loans...................................... $ 1.295 $ 1.293
Nonperforming assets..................................... 1.443 1.494
Nonperforming assets as a % of:
Total assets.......................................... .47% .53%
Net loans, leases, factored accounts receivable and
foreclosed properties............................... .80 .82
Other Data
Full-time equivalent headcount........................... 98,961 100,269
Banking centers.......................................... 3,067 3,248
ATMs..................................................... 6,960 6,932
BUSINESS SEGMENT RESULTS - Three months ended June 30, 1998
(In millions)
Return
on risk
Average adjusted
Total Net loans and tangible
Revenue Income leases, net equity
Consumer Banking $ 2,578 $ 503 $ 99,394 30%
Commercial Banking 480 187 34,313 29
Asset Management 316 82 8,935 44
Corporate Finance 983 249 36,842 25