EXHIBIT 99.3
FIVE-YEAR FINANCIAL SUMMARY AND SELECTED RATIOS
(Dollars in thousands, except per share data)
As of/For the Years Ended December 31,
--------------------------------------------------------------- Compound
1998 1997 1996 1995 1994 Growth Rate
----------- ----------- ----------- ----------- ----------- -----------
Summary of Operations
Interest income........ $ 2,743,980 $ 2,487,795 $ 2,244,473 $ 2,134,325 $ 1,786,267 11.3%
Interest expense....... 1,373,991 1,219,947 1,085,615 1,077,369 773,328 15.5
----------- ----------- ----------- ----------- ----------- ----
Net interest income.... 1,369,989 1,267,848 1,158,858 1,056,956 1,012,939 7.8
Provision for loan and
lease losses.......... 95,805 103,053 66,816 44,502 29,467 34.3
----------- ----------- ----------- ----------- ----------- ----
Net interest income
after provision for
loan and lease
losses................ 1,274,184 1,164,795 1,092,042 1,012,454 983,472 6.7
Noninterest income..... 558,557 487,270 364,524 275,684 279,281 18.9
Noninterest expense.... 1,062,339 1,052,267 902,490 889,326 806,767 7.1
----------- ----------- ----------- ----------- ----------- ----
Income before income
taxes................. 770,402 599,798 554,076 398,812 455,986 14.0
Provision for income
taxes................. 243,148 205,137 181,540 132,208 155,724 11.8
----------- ----------- ----------- ----------- ----------- ----
Net income............. $ 527,254 $ 394,661 $ 372,536 $ 266,604 $ 300,262 15.1
=========== =========== =========== =========== =========== ====
Per Common Share
Average shares
outstanding (000's):
Basic.................. 313,533 312,885 312,573 310,466 305,388
Diluted................ 319,949 318,174 319,097 324,008 319,214
Basic earnings per
share................. $ 1.68 $ 1.26 $ 1.19 $ 0.84 $ 0.97 14.7
=========== =========== =========== =========== =========== ====
Diluted earnings per
share................. $ 1.65 $ 1.24 $ 1.17 $ 0.82 $ 0.94 15.0
=========== =========== =========== =========== =========== ====
Cash dividends paid.... $ .66 $ .58 $ .50 $ .43 $ .37 15.6
Shareholders' equity... 9.62 8.59 7.91 7.69 6.87 8.8
Average Balances
Securities, at
amortized cost........ $ 9,198,176 $ 8,300,785 $ 7,629,742 $ 7,471,916 $ 7,086,163 6.7
Loans and leases*...... 24,050,234 21,459,467 19,359,629 18,243,461 16,392,019 10.1
Other assets........... 2,595,040 2,004,971 1,853,022 1,809,526 1,827,396 9.2
----------- ----------- ----------- ----------- ----------- ----
Total assets.......... $35,843,450 $31,765,223 $28,842,393 $27,524,903 $25,305,578 9.1
=========== =========== =========== =========== =========== ====
Deposits............... $23,712,815 $22,413,881 $21,407,526 $20,091,276 $19,523,190 5.0
Other liabilities...... 4,800,589 3,710,305 2,888,831 3,843,451 2,882,941 13.6
Long-term debt......... 4,502,828 3,091,514 2,166,297 1,344,247 916,546 48.9
Common shareholders'
equity................ 2,827,218 2,549,523 2,364,580 2,173,584 1,908,758 10.3
Preferred stockholders'
equity................ -- -- 15,159 72,345 74,143 NM
----------- ----------- ----------- ----------- ----------- ----
Total liabilities and
shareholders'
equity............... $35,843,450 $31,765,223 $28,842,393 $27,524,903 $25,305,578 9.1
=========== =========== =========== =========== =========== ====
Period End Balances
Total assets........... $37,903,119 $34,523,133 $30,301,706 $28,343,959 $26,545,187 9.3
Deposits............... 25,263,311 23,474,381 22,053,131 20,962,513 19,723,649 6.4
Long-term debt......... 5,300,536 3,918,156 2,485,710 1,601,574 1,137,295 46.9
Shareholders' equity... 3,044,330 2,694,714 2,485,012 2,415,567 2,119,042 9.5
Selected Performance
Ratios
Rate of return on:
Average total assets... 1.47% 1.24% 1.29% 0.97% 1.19%
Average common
shareholders' equity.. 18.65 15.48 15.73 12.03 15.46
Dividend payout......... 39.29 46.03 42.02 51.19 38.14
Average equity to
average assets......... 7.89 8.03 8.25 8.16 7.84
- --------
* Loans and leases are net of unearned income and include loans held for sale.
NM--Not meaningful.
47
Table 1
Selected Financial Data of Significant Banking Subsidiaries
As of / For the Years Ended December 31, 1998, 1997 and 1996
Carroll
Piedmont County
BB&T-NC BB&T-SC BB&T-VA Franklin Trust Bank
----------- ---------- ---------- -------- -------- --------
(Dollars in thousands)
1998
Total assets............ $25,985,004 $4,641,393 $3,473,368 $800,786 $564,748 $767,969
Securities.............. 6,531,178 783,727 578,224 175,386 161,107 448,996
Loans and leases, net of
unearned income*....... 17,414,700 3,266,871 2,341,767 390,086 340,993 277,359
Deposits................ 17,275,566 3,702,383 2,320,244 536,586 336,323 469,642
Shareholder's equity.... 2,124,446 429,572 457,600 40,848 45,713 50,554
Net interest income..... 871,515 201,132 121,030 27,257 21,588 21,202
Provision for loan and
lease losses........... 44,227 13,455 3,122 1,885 3,875 196
Noninterest income...... 455,760 71,945 41,671 2,771 4,955 7,520
Noninterest expense..... 776,574 119,224 98,452 21,512 12,835 19,303
Net income.............. 361,058 89,653 36,738 4,299 6,748 7,561
----------- ---------- ---------- -------- -------- --------
1997
Total assets............ $22,530,009 $4,364,982 $3,529,844 $647,448 $552,601 $708,268
Securities.............. 5,392,894 1,020,554 887,381 179,388 153,407 412,664
Loans and leases, net of
unearned income*....... 15,402,775 3,052,755 2,287,651 300,441 347,555 256,692
Deposits................ 15,931,795 3,401,236 2,333,873 427,798 332,524 421,019
Shareholder's equity.... 1,771,589 374,871 435,248 39,283 42,907 54,612
Net interest income..... 842,745 184,341 59,122 21,532 21,516 20,434
Provision for loan and
lease losses........... 53,533 14,109 3,400 484 1,925 73
Noninterest income...... 436,607 70,916 16,149 2,447 4,535 6,823
Noninterest expense..... 809,599 135,018 47,349 13,915 13,047 17,205
Net income.............. 278,536 68,024 15,388 5,968 7,529 7,830
----------- ---------- ---------- -------- -------- --------
1996
Total assets............ $20,652,519 $4,213,458 $2,209,614 $497,817 $495,542 $595,454
Securities.............. 4,962,941 1,034,385 883,771 164,116 113,883 325,443
Loans and leases, net of
unearned income*....... 14,149,983 2,901,930 1,180,681 232,581 337,849 237,730
Deposits................ 15,683,080 3,336,711 1,422,785 363,427 317,564 417,197
Shareholder's equity.... 1,601,950 399,965 194,884 31,893 38,249 43,634
Net interest income..... 773,019 173,235 43,822 18,290 20,280 18,880
Provision for loan and
lease losses........... 44,675 8,405 2,584 27 1,808 227
Noninterest income...... 333,119 57,729 11,811 1,770 6,448 4,973
Noninterest expense..... 689,969 134,200 30,129 12,652 13,477 15,113
Net income.............. 250,956 56,489 14,542 4,523 7,708 6,774
----------- ---------- ---------- -------- -------- --------
- --------
* Includes loans held for sale.
48
Table 2
Composition of Loan and Lease Portfolio*
December 31,
-----------------------------------------------------------
1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- -----------
(Dollars in thousands)
Loans:
Commercial, financial and
agricultural................ $ 3,755,789 $ 3,519,613 $ 3,114,718 $ 2,705,436 $ 3,315,921
Real estate--construction and
land development............ 2,424,543 2,318,617 1,694,536 1,253,907 937,298
Real estate--mortgage........ 14,290,610 13,037,395 11,614,776 11,365,695 10,021,940
Consumer..................... 3,059,920 2,992,959 3,074,058 2,727,930 2,628,262
----------- ----------- ----------- ----------- -----------
Loans held for investment.. 23,530,862 21,868,584 19,498,088 18,052,968 16,903,421
Loans held for sale........ 1,056,841 524,102 240,176 272,685 147,576
----------- ----------- ----------- ----------- -----------
Total loans.............. 24,587,703 22,392,686 19,738,264 18,325,653 17,050,997
Leases......................... 1,620,326 788,462 576,991 376,152 304,544
----------- ----------- ----------- ----------- -----------
Total loans and leases... $26,208,029 $23,181,148 $20,315,255 $18,701,805 $17,355,541
=========== =========== =========== =========== ===========
- --------
* Balances include unearned income.
49
Table 3
Selected Loan Maturities and Interest Sensitivity *
December 31, 1998
------------------------------------
Commercial,
Financial
and Real Estate:
Agricultural Construction Total
------------ ------------ ----------
(Dollars in thousands)
Fixed rate:
1 year or less (2)...................... $ 297,458 $ 373,622 $ 671,080
1-5 years............................... 743,646 184,023 927,669
After 5 years........................... 198,306 -- 198,306
---------- ---------- ----------
Total................................. 1,239,410 557,645 1,797,055
---------- ---------- ----------
Variable rate:
1 year or less (2)...................... 1,283,353 1,250,822 2,534,175
1-5 years............................... 1,132,371 616,076 1,748,447
After 5 years........................... 100,655 -- 100,655
---------- ---------- ----------
Total................................. 2,516,379 1,866,898 4,383,277
---------- ---------- ----------
Total loans and leases (1).......... $3,755,789 $2,424,543 $6,180,332
========== ========== ==========
- --------
* Balances include unearned income.
Scheduled repayments are reported in the maturity category in which the
payment is due. Determinations of maturities are based upon contract terms.
BB&T's credit policy does not permit automatic renewals of loans. At the
scheduled maturity date (including balloon payment date), the customer must
request a new loan to replace the matured loan and execute a new note with
rate, terms and conditions negotiated at that time.
(1) The table excludes:
(Dollars in
thousands)
-----------
(i) consumer loans to individuals for household, family
and other personal expenditures...................... $ 3,059,920
(ii) real estate mortgage loans........................... 14,290,610
(iii) loans held for sale.................................. 1,056,841
(iv) leases............................................... 1,620,326
-----------
$20,027,697
===========
(2) Includes loans due on demand.
50
Table 4
Allocation of Allowance for Loan and Lease Losses by Category
December 31,
-----------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
----------------- ----------------- ----------------- ----------------- -----------------
% Loans % Loans % Loans % Loans % Loans
in each in each in each in each in each
Amount category Amount category Amount category Amount category Amount category
-------- -------- -------- -------- -------- -------- -------- -------- -------- --------
(Dollars in thousands)
Balance at end of period
applicable to:
Commercial, financial
and agricultural...... $ 47,876 14% $ 50,495 15% $ 50,336 15% $ 53,704 14% $ 49,825 19%
Real estate:
Construction and land
development........... 32,266 9 24,403 10 17,651 8 21,122 7 19,625 5
Mortgage............... 110,031 59 108,590 58 94,936 58 90,706 62 81,001 59
-------- --- -------- --- -------- --- -------- --- -------- ---
Real estate--total..... 142,297 68 132,993 68 112,587 66 111,828 69 100,626 64
-------- --- -------- --- -------- --- -------- --- -------- ---
Consumer................ 26,524 12 22,873 13 20,245 16 14,052 15 10,321 15
Leases.................. 12,737 6 8,021 4 5,207 3 3,325 2 2,986 2
Unallocated............. 115,274 -- 87,368 -- 76,302 -- 60,999 -- 73,248 --
-------- --- -------- --- -------- --- -------- --- -------- ---
Total.................. $344,708 100% $301,750 100% $264,677 100% $243,908 100% $237,006 100%
======== === ======== === ======== === ======== === ======== ===
51
Table 5
Composition of Allowance for Loan and Lease Losses
December 31,
---------------------------------------------------------------
1998 1997 1996 1995 1994
----------- ----------- ----------- ----------- -----------
(Dollars in thousands)
Balance, beginning of
period................. $ 301,750 $ 264,677 $ 243,908 $ 237,006 $ 232,413
----------- ----------- ----------- ----------- -----------
Charge-offs:
Commercial, financial
and agricultural..... (14,677) (18,710) (12,085) (12,715) (15,166)
Real estate........... (12,071) (14,399) (12,143) (12,754) (10,170)
Consumer.............. (67,878) (69,664) (50,209) (30,774) (17,623)
Lease receivables..... (1,167) (671) (768) (614) (647)
----------- ----------- ----------- ----------- -----------
Total charge-offs... (95,793) (103,444) (75,205) (56,857) (43,606)
----------- ----------- ----------- ----------- -----------
Recoveries:
Commercial, financial
and agricultural..... 8,047 6,728 8,391 6,314 8,055
Real estate........... 3,593 5,222 6,462 3,754 3,671
Consumer.............. 10,225 7,769 6,659 5,860 5,652
Lease receivables..... 425 232 136 395 295
----------- ----------- ----------- ----------- -----------
Total recoveries.... 22,290 19,951 21,648 16,323 17,673
----------- ----------- ----------- ----------- -----------
Net charge-offs....... (73,503) (83,493) (53,557) (40,534) (25,933)
----------- ----------- ----------- ----------- -----------
Provision charged to
expense.............. 95,805 103,053 66,816 44,502 29,407
----------- ----------- ----------- ----------- -----------
Allowance of loans
acquired in purchase
transactions......... 20,592 17,513 7,510 2,934 1,119
Reconciliation of
fiscal year of merged
company to calender
year................. 64 -- -- -- --
----------- ----------- ----------- ----------- -----------
Balance, end of period.. $ 344,708 $ 301,750 $ 264,677 $ 243,908 $ 237,006
=========== =========== =========== =========== ===========
Average loans and
leases*................ $24,050,234 $21,459,467 $19,359,629 $18,243,461 $16,392,019
Net charge-offs as a
percentage of average
loans and leases....... .31% .39% .28% .22% .16%
=========== =========== =========== =========== ===========
- --------
* Loans and leases are net of unearned income and include loans held for sale.
52
Table 6
Composition of Securities Portfolio
December 31,
--------------------------------
1998 1997 1996
---------- ---------- ----------
(Dollars in thousands)
Trading Securities (at estimated fair
value):..................................... $ 60,422 $ 67,878 $ --
---------- ---------- ----------
Securities held to maturity (at amortized
cost):
U.S. Treasury, government and agency
obligations............................. 51,102 105,236 106,690
States and political subdivisions........ 232,406 271,993 295,496
Mortgage-backed securities............... 70,355 142,164 287,444
Other securities......................... 6,920 1,315 --
---------- ---------- ----------
Total securities held to maturity.......... 360,783 520,708 689,630
---------- ---------- ----------
Securities available for sale (at estimated
fair value):
U.S. Treasury, government and agency
obligations............................. 3,802,694 4,564,923 4,167,767
States and political subdivisions........ 175,669 65,464 36,416
Mortgage-backed securities............... 3,918,583 3,157,595 2,745,483
Other securities......................... 1,257,406 490,187 329,370
---------- ---------- ----------
Total securities available for sale........ 9,154,352 8,278,169 7,279,036
---------- ---------- ----------
Total securities............................. $9,575,557 $8,866,755 $7,968,666
========== ========== ==========
53
Table 7
Scheduled Maturities of Time Deposits
December 31, 1998
(Dollars in thousands)
Time Deposits $100,000 and Over
Maturity Schedule
Less than three months........................................... $ 1,373,286
Three through six months......................................... 728,706
Seven through twelve months...................................... 560,866
Over twelve months............................................... 807,639
-----------
Total.......................................................... $ 3,470,497
===========
Total Time Deposits
Time Deposits Due to Mature by December 31,
1999............................................................. $ 9,263,124
2000............................................................. 2,470,478
2001............................................................. 381,595
2002............................................................. 230,755
2003............................................................. 141,105
2004 and later................................................... 23,376
-----------
Total.......................................................... $12,510,433
===========
54
Table 8
Short-Term Borrowed Funds
The following information summarizes certain pertinent information for the
past three years on short-term borrowed funds:
1998 1997 1996
---------- ---------- ----------
(Dollars in thousands)
Maximum outstanding at any month-end
during the year.......................... $5,466,616 $3,993,462 $3,062,245
Average outstanding during the year....... 4,240,583 3,308,445 2,531,285
Average interest rate during the year..... 5.23% 5.26% 5.26%
Average interest rate at end of year...... 4.83 5.47 4.94
55
Table 9
Capital Adequacy for BB&T Corporation and Principal Banking Subsidiaries
Carroll
Regulatory BB&T- BB&T- BB&T- Piedmont County
Minimums BB&T NC SC VA Franklin Trust Bank
---------- ---- ----- ----- ----- -------- -------- -------
Risk-based capital
ratios:
Tier 1 capital (1).... 4.0% 10.5% 10.9% 12.7% 15.3% 8.5% 12.2% 12.0%
Total risk-based
capital (2).......... 8.0 15.0 12.2 13.9 16.5 9.7 13.4 12.8
Tier 1 leverage ratio
(3).................... 3.0 7.1 7.2 9.3 10.0 5.3 8.3 6.4
- --------
(1) Shareholders' equity less nonqualifying intangible assets; computed as a
ratio of risk-weighted assets, as defined in the risk-based capital
guidelines.
(2) Tier 1 capital plus qualifying loan loss allowance and subordinated debt;
computed as a ratio of risk-weighted assets as defined in the risk-based
capital guidelines.
(3) Tier 1 capital computed as a percentage of fourth quarter average assets
less nonqualifying intangibles.
56
Table 10
Securities
December 31, 1998
-------------------------------
Carrying Value Average Yield (3)
-------------- ----------------
(Dollars in thousands)
U.S. Treasury, government and agency
obligations (1):
Within one year............................ $1,028,989 6.34%
One to five years.......................... 3,106,278 6.15
Five to ten years.......................... 599,781 6.53
After ten years............................ 3,107,686 6.63
---------- ----
Total.................................... 7,842,734 6.39
---------- ----
States and political subdivisions:
Within one year............................ 30,575 8.74
One to five years.......................... 142,084 8.49
Five to ten years.......................... 88,013 7.88
After ten years............................ 147,403 7.64
---------- ----
Total.................................... 408,075 8.07
---------- ----
Other securities:
Within one year............................ 28,816 5.12
One to five years.......................... 38,242 7.48
Five to ten years.......................... 5,651 7.34
After ten years............................ 264,825 6.74
---------- ----
Total.................................... 337,534 6.69
---------- ----
Securities with no stated maturity........... 987,214 6.40
---------- ----
Total securities (2)....................... $9,575,557 6.48%
========== ====
- --------
(1) Included in U.S. Treasury, government and agency obligations are mortgage-
backed securities totaling $3.9 billion classified as available for sale
and disclosed at estimated fair value. These securities are included in
each of the categories based upon final stated maturity dates. The
original contractual lives of these securities range from five to 30
years; however, a more realistic average maturity would be substantially
shorter because of the monthly return of principal on certain securities.
(2) Includes securities held to maturity of $360.8 million carried at
amortized cost and securities available for sale and trading securities
carried at estimated fair values of $9.2 billion and $60.4 million,
respectively.
(3) Taxable equivalent basis as applied to amortized cost.
57
Table 11
Asset Quality
December 31,
----------------------------
1998 1997 1996
-------- -------- --------
(Dollars in thousands)
Nonaccrual loans and leases*..................... $ 97,321 $109,264 $ 74,679
Restructured loans............................... 1,348 2,492 2,678
Foreclosed property.............................. 29,328 37,636 31,915
-------- -------- --------
Nonperforming assets........................... $127,997 $149,392 $109,272
======== ======== ========
Loans 90 days or more past due and still
accruing...................................... $ 54,299 $ 49,224 $ 45,472
======== ======== ========
Asset Quality Ratios:
Nonaccrual and restructured loans and leases as
a percentage of
loans and leases.............................. .39% .49% .38%
Nonperforming assets as a percentage of:
Total assets................................. .34 .43 .36
Loans and leases plus foreclosed property.... .50 .65 .54
Net charge-offs as a percentage of average
loans and leases.............................. .31 .39 .28
Allowance for losses as a percentage of loans
and leases.................................... 1.35 1.32 1.31
Ratio of allowance for losses to:
Net charge-offs.............................. 4.69x 3.61x 4.94x
Nonaccrual and restructured loans and
leases...................................... 3.49 2.70 3.42
- --------
NOTE: Items referring to loans and leases are net of unearned income and
include loans held for sale.
* Includes $ 31.4 million, $ 40.1 million and $ 37.4 million of impaired
loans at December 31, 1998, 1997 and 1996, respectively.
See Note D in the "Notes to Consolidated Financial Statements."
58
Table 12
FTE Net Interest Income and Rate/Volume Analysis
For the Years Ended December 31, 1998, 1997 and 1996
Average Balances Yield/Rate Income/Expense
------------------------------------ ---------------- --------------------------------
1998 1997 1996 1998 1997 1996 1998 1997 1996
------------ ----------- ----------- ---- ---- ---- ---------- ---------- ----------
(Dollars in thousands)
Assets
Securities (1):
U.S. Treasury,
government and
other (5)....... $ 8,867,463 $ 7,987,465 $ 7,306,601 6.70% 6.75% 6.56% $ 594,180 $ 539,165 $ 479,592
States and
political
subdivisions.... 330,713 313,320 323,141 8.36 8.29 8.45 27,650 25,981 27,304
------------ ----------- ----------- ---- ---- ---- ---------- ---------- ----------
Total securities
(5)............. 9,198,176 8,300,785 7,629,742 6.76 6.81 6.64 621,830 565,146 506,896
Other earning
assets (2)...... 237,408 145,233 190,042 5.64 5.80 5.51 13,397 8,420 10,470
Loans and
leases, net of
unearned income
(1)(3)(4)(5).... 24,050,234 21,459,467 19,359,629 9.06 9.19 9.13 2,178,055 1,971,424 1,766,786
------------ ----------- ----------- ---- ---- ---- ---------- ---------- ----------
Total earning
assets.......... 33,485,818 29,905,485 27,179,413 8.40 8.51 8.40 2,813,282 2,544,990 2,284,152
------------ ----------- ----------- ---- ---- ---- ---------- ---------- ----------
Non-earning
assets.......... 2,357,632 1,859,738 1,662,980
------------ ----------- -----------
Total assets.... $ 35,843,450 $31,765,223 $28,842,393
============ =========== ===========
Liabilities and
Shareholders'
Equity
Interest-bearing
deposits:
Savings and
interest-
checking........ $ 2,140,766 $ 2,521,969 $ 2,690,519 1.96 1.97 2.04 42,004 49,640 55,021
Money rate
savings......... 6,003,304 5,010,436 4,206,697 3.01 3.10 2.89 180,495 155,385 121,440
Other time
deposits........ 12,316,725 11,942,250 11,721,825 5.44 5.51 5.55 669,831 657,970 650,054
------------ ----------- ----------- ---- ---- ---- ---------- ---------- ----------
Total interest-
bearing
deposits........ 20,460,795 19,474,655 18,619,041 4.36 4.43 4.44 892,330 862,995 826,515
Short-term
borrowed funds.. 4,240,583 3,308,445 2,531,285 5.23 5.26 5.26 221,615 174,040 133,231
Long-term debt.. 4,502,828 3,091,514 2,166,297 5.78 5.92 5.81 260,046 182,912 125,869
------------ ----------- ----------- ---- ---- ---- ---------- ---------- ----------
Total interest-
bearing
liabilities..... 29,204,206 25,874,614 23,316,623 4.70 4.71 4.66 1,373,991 1,219,947 1,085,615
------------ ----------- ----------- ---- ---- ---- ---------- ---------- ----------
Noninterest-
bearing
deposits........ 3,252,020 2,939,226 2,788,485
Other
liabilities..... 560,006 401,860 357,546
Shareholders'
equity.......... 2,827,218 2,549,523 2,379,739
------------ ----------- -----------
Total
liabilities and
shareholders'
equity.......... $ 35,843,450 $31,765,223 $28,842,393
============ =========== ===========
Average interest
rate spread..... 3.70 3.80 3.74
Net yield on
earning assets.. 4.30% 4.43% 4.41% $1,439,291 $1,325,043 $1,198,537
==== ==== ==== ========== ========== ==========
Taxable
equivalent
adjustment...... $ 69,302 $ 57,195 $ 39,679
========== ========== ==========
1998 v. 1997 1997 v. 1996
------------------------------ -----------------------------
Change due to Change due to
Increase ------------------- Increase ------------------
(Decrease) Rate Volume (Decrease) Rate Volume
---------- --------- --------- ---------- -------- ---------
Assets
Securities (1):
U.S. Treasury,
government and
other (5)....... $ 55,015 $ (3,978) $ 58,993 $ 59,573 $13,910 $ 45,663
States and
political
subdivisions.... 1,669 216 1,453 (1,323) (503) (820)
---------- --------- --------- ---------- -------- ---------
Total securities
(5)............. 56,684 (3,762) 60,446 58,250 13,407 44,843
Other earning
assets (2)...... 4,977 (230) 5,207 (2,050) 524 (2,574)
Loans and
leases, net of
unearned income
(1)(3)(4)(5).... 206,631 (28,352) 234,983 204,638 11,805 192,833
---------- --------- --------- ---------- -------- ---------
Total earning
assets.......... 268,292 (32,344) 300,636 260,838 25,736 235,102
---------- --------- --------- ---------- -------- ---------
Non-earning
assets..........
Total assets....
Liabilities and
Shareholders'
Equity
Interest-bearing
deposits:
Savings and
interest-
checking........ (7,636) (156) (7,480) (5,381) (2,015) (3,366)
Money rate
savings......... 25,110 (4,867) 29,977 33,945 9,502 24,443
Other time
deposits........ 11,861 (8,582) 20,443 7,916 (4,249) 12,165
---------- --------- --------- ---------- -------- ---------
Total interest-
bearing
deposits........ 29,335 (13,605) 42,940 36,480 3,238 33,242
Short-term
borrowed funds.. 47,575 (1,146) 48,721 40,809 (73) 40,882
Long-term debt.. 77,134 (4,471) 81,605 57,043 2,342 54,701
---------- --------- --------- ---------- -------- ---------
Total interest-
bearing
liabilities..... 154,044 (19,222) 173,266 134,332 5,507 128,825
---------- --------- --------- ---------- -------- ---------
Noninterest-
bearing
deposits........
Other
liabilities.....
Shareholders'
equity..........
Total
liabilities and
shareholders'
equity..........
Average interest
rate spread.....
Net yield on
earning assets.. $114,248 $(13,122) $127,370 $126,506 $20,229 $106,277
========== ========= ========= ========== ======== =========
Taxable
equivalent
adjustment......
- ----
(1) Yields related to securities, loans and leases exempt from both Federal
and state income taxes, Federal income taxes only or state income taxes
only are stated on a taxable equivalent basis assuming tax rates in effect
for the periods presented.
(2) Includes Federal funds sold and securities purchased under resale
agreements or similar arrangements.
(3) Loan fees, which are not material for any of the periods shown, have been
included for rate calculation purposes.
(4) Nonaccrual loans have been included in the average balances. Only the
interest collected on such loans has been included as income.
(5) Includes assets which were held for sale or available for sale at
amortized cost and trading securities at estimated fair value.
59
Table 13
Noninterest Income
% Change
---------------
Years Ended December 31,
-------------------------- 1998 v. 1997 v.
1998 1997 1996 1997 1996
-------- -------- -------- ------- -------
(Dollars in thousands)
Service charges on deposits........ $178,319 $158,451 $141,069 12.5% 12.3%
Mortgage banking income............ 83,081 53,774 42,342 54.5 27.0
Trust income....................... 42,603 36,849 33,188 15.6 11.0
Agency insurance commissions....... 52,186 40,149 27,541 30.0 45.8
Other insurance commissions........ 10,947 13,904 13,484 (21.3) 3.1
Securities gains, net.............. 8,561 4,701 4,091 82.1 14.9
Bankcard fees and merchant
discounts......................... 30,219 24,042 19,385 25.7 24.0
Investment banking and brokerage... 43,796 27,180 16,982 61.1 60.1
Other bank service fees and
commissions....................... 51,741 41,246 27,964 25.4 47.5
International income............... 4,563 3,685 3,206 23.8 14.9
Amortization of negative goodwill.. 6,243 6,180 6,238 1.0 (.9)
Other noninterest income........... 46,298 77,109 29,034 (40.0) 165.6
-------- -------- -------- ----- -----
Total noninterest income......... $558,557 $487,270 $364,524 14.6% 33.7%
======== ======== ======== ===== =====
60
Table 14
Noninterest Expense
% Change
---------------
Years Ended December 31,
------------------------------ 1998 v. 1997 v.
1998 1997 1996 1997 1996
---------- ---------- -------- ------- -------
(Dollars in thousands)
Salaries and wages............. $ 441,630 $ 409,877 $358,806 7.7% 14.2%
Pension and other employee
benefits...................... 98,630 102,948 85,620 (4.2) 20.2
Net occupancy expense on bank
premises...................... 66,660 85,110 64,684 (21.7) 31.6
Furniture and equipment
expense....................... 101,704 89,855 74,546 13.2 20.5
Federal deposit insurance
premiums...................... 4,655 5,463 51,071 (14.8) (89.3)
Foreclosed property expense.... 2,379 3,456 2,672 (31.2) 29.3
Amortization of intangibles and
mortgage servicing rights..... 51,785 25,965 16,747 99.4 55.0
Software....................... 10,879 14,662 11,518 (25.8) 27.3
Telephone...................... 22,131 19,990 17,399 10.7 14.9
Donations...................... 6,335 7,007 6,280 (9.6) 11.6
Advertising and public
relations..................... 27,727 27,935 25,906 (0.7) 7.8
Travel and transportation...... 10,595 9,094 7,667 16.5 18.6
Professional services.......... 51,327 50,713 29,314 1.2 73.0
Supplies....................... 18,018 17,228 16,055 4.6 7.3
Loans and lease expense........ 26,114 42,152 32,885 (38.0) 28.2
Deposit related expense........ 15,131 16,936 14,318 (10.7) 18.3
Other noninterest expenses..... 106,639 123,876 87,002 (13.9) 42.4
---------- ---------- -------- ----- -----
Total noninterest expense.... $1,062,339 $1,052,267 $902,490 1.0% 16.6%
========== ========== ======== ===== =====
61
Table 15
Interest Rate Sensitivity Gap Analysis
December 31, 1998
Expected Repricing or Maturity Date
-------------------------------------------------------------
Within One One to Three to After Five
Year Three Years Five Years Years Total
----------- ----------- ---------- ---------- -----------
(Dollars in thousands)
Assets
Securities and other
interest-
earning assets*...... $ 2,497,629 $ 2,361,507 $3,084,797 $1,546,704 $ 9,490,637
Federal funds sold and
securities purchased
under resale
agreements or similar
arrangements......... 116,458 -- -- -- 116,458
Loans and leases**.... 15,301,582 4,970,299 2,881,301 2,336,919 25,490,101
----------- ----------- ---------- ---------- -----------
Total interest-earning
assets................. 17,915,669 7,331,806 5,966,098 3,883,623 35,097,196
----------- ----------- ---------- ---------- -----------
Liabilities
Savings and interest
checking***.......... -- 1,201,681 400,560 400,560 2,002,801
Money rate
savings***........... 3,565,615 3,565,614 -- -- 7,131,229
Other time deposits... 8,614,897 2,715,204 387,893 153,763 11,871,757
Foreign deposits...... 638,676 -- -- -- 638,676
Federal funds
purchased and
securities sold under
repurchase agreements
or
similar
arrangements......... 2,410,488 50,870 169,727 -- 2,631,085
Long-term debt and
other borrowings..... 3,192,399 797,696 508,404 1,922,700 6,421,199
----------- ----------- ---------- ---------- -----------
Total interest-bearing
liabilities............ 18,422,075 8,331,065 1,466,584 2,477,023 $30,696,747
----------- ----------- ---------- ---------- ===========
Asset-liability gap..... (506,406) (999,259) 4,499,514 1,406,600
----------- ----------- ---------- ----------
Derivatives affecting
interest rate
sensitivity:
Pay fixed interest
rate swaps........... 184,946 (10,133) (100,736) (74,077)
Receive fixed interest
rate swaps........... (718,000) 164,000 294,000 260,000
Caps, floors and
collars.............. (747,250) 500,000 247,250 --
----------- ----------- ---------- ----------
(1,280,304) 653,867 440,514 185,923
----------- ----------- ---------- ----------
Interest rate
sensitivity gap........ $(1,786,710) $ (345,392) $4,940,028 $1,592,523
=========== =========== ========== ==========
Cumulative interest rate
sensitivity gap........ $(1,786,710) $(2,132,102) $2,807,926 $4,400,449
=========== =========== ========== ==========
- --------
* Securities based on amortized cost.
** Loans and leases include loans held for sale and are net of unearned
income.
*** Projected runoff of deposits that do not have a contractual maturity date
was computed based upon decay rate assumptions developed by bank
regulators to assist banks in addressing FDICIA rule 305.
62
Table 16
Capital--Components and Ratios
December 31,
----------------------
1998 1997
---------- ----------
(Dollars in
thousands)
Tier 1 capital.......................................... $2,636,111 $2,458,263
Tier 2 capital.......................................... 1,145,880 777,819
---------- ----------
Total regulatory capital................................ $3,781,991 $3,236,082
========== ==========
Risk-based capital ratios:
Tier 1 capital........................................ 10.5% 10.8%
Total regulatory capital.............................. 15.0 14.2
Tier 1 leverage ratio................................... 7.1 7.5
63
Table 17
Quarterly Common Stock Summary
1998 1997
------------------------------ ------------------------------
Sales Prices Sales Prices
-------------------- Dividends -------------------- Dividends
High Low Last Paid High Low Last Paid
------ ------ ------ --------- ------ ------ ------ ---------
Quarter Ended:
March 31....... $33.84 $29.03 $33.84 $.155 $20.38 $17.63 $18.63 $.135
June 30........ 34.06 32.03 33.81 .155 23.56 17.88 22.50 .135
September 30... 36.03 28.00 29.94 .175 27.56 22.66 26.72 .155
December 31.... 40.63 27.31 40.31 .175 32.50 25.97 32.03 .155
Year......... 40.63 27.31 40.31 .66 32.50 17.63 32.03 .58
64
Table 18
Quarterly Financial Summary--Unaudited
1998 1997
----------------------------------------------- ------------------------------------------------
Fourth Third Second First Fourth Third Second First
Quarter Quarter Quarter Quarter Quarter Quarter Quarter Quarter
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
(Dollars in thousands, except per share data)
Consolidated Summary of
Operations:
Net interest income
FTE.................. $ 374,985 $ 361,990 $ 353,868 $ 348,448 $ 340,051 $ 334,424 $ 334,337 $ 316,231
FTE adjustment........ 18,946 17,276 16,773 16,307 18,421 14,605 13,422 10,747
Provisions for loan
and lease losses..... 24,302 21,428 26,275 23,800 31,157 22,953 26,618 22,325
Securities gains
(losses), net........ 2,119 2,277 1,348 2,817 1,567 1,081 (841) 2,894
Other noninterest
income............... 144,578 142,195 136,950 126,273 116,395 156,051 104,382 105,741
Noninterest expense... 282,393 269,576 254,604 255,766 265,503 335,590 228,723 222,451
Provision for income
taxes................ 61,184 62,773 61,799 57,392 45,939 43,568 57,699 57,931
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income............ $ 134,857 $ 135,409 $ 132,715 $ 124,273 $ 96,993 $ 74,840 $ 111,416 $ 111,412
=========== =========== =========== =========== =========== =========== =========== ===========
Diluted net income per
share................ $ .42 $ .43 $ .42 $ .39 $ .31 $ .24 $ .35 $ .35
=========== =========== =========== =========== =========== =========== =========== ===========
Selected Average
Balances:
Assets................ $37,657,707 $35,479,318 $35,552,607 $34,655,171 $33,055,978 $32,169,244 $31,701,883 $30,493,344
Securities, at
amortized cost....... 9,742,293 8,936,839 9,110,430 8,997,836 8,495,169 8,453,512 8,319,927 7,933,291
Loans and leases*..... 25,062,213 24,054,547 23,923,871 23,139,123 22,330,866 21,720,773 21,430,060 20,647,319
Total earning assets.. 35,008,315 33,201,128 33,302,951 32,405,403 31,036,831 30,303,839 29,895,348 28,734,918
Deposits.............. 24,722,315 23,479,519 23,560,244 23,073,640 22,612,264 22,529,036 22,749,309 22,037,789
Short-term borrowed
funds................ 4,195,572 3,984,815 4,550,666 4,234,519 3,735,198 3,465,015 3,188,864 2,801,706
Long-term debt........ 5,085,355 4,712,504 4,126,352 4,073,684 3,597,116 3,253,015 2,831,322 2,605,277
Total interest-bearing
liabilities.......... 30,524,668 28,896,563 29,028,315 28,346,740 26,738,681 26,266,719 25,829,402 24,694,455
Shareholders' equity.. 3,059,665 2,738,963 2,745,368 2,762,584 2,580,461 2,552,884 2,566,656 2,539,426
- ------
* Loans and leases are net of unearned income and include loans held for sale.
65