EXHIBIT (99)
PRO FORMA FINANCIAL INFORMATION
PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
The following unaudited pro forma combined condensed statements of income
present the combined statements of income assuming the companies had been
combined for each period presented on a pooling of interests or purchase
accounting basis (effective as of January 1, 1993), as appropriate.
FIRST UNION HOME PRO FORMA PURCHASE PRO FORMA
(IN THOUSANDS EXCEPT PER SHARE DATA) CORPORATION FEDERAL COMBINED ACQUISITIONS ADJUSTMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1994
Interest income........................................... $ 3,705,191 11,952 3,717,143 377,344 (34,284)
Interest expense.......................................... 1,450,774 7,058 1,457,832 206,496 --
Net interest income....................................... 2,254,417 4,894 2,259,311 170,848 (34,284)
Provision for loan losses................................. 75,000 205 75,205 (52) --
Net interest income after provision for loan losses....... 2,179,417 4,689 2,184,106 170,900 (34,284)
Securities available for sale transactions................ (1,581) (19) (1,600) 1,101 --
Investment security transactions.......................... 3,595 -- 3,595 -- --
Noninterest income........................................ 855,051 1,048 856,099 27,299 --
Noninterest expense....................................... 1,973,280 5,088 1,978,368 140,096 24,043
Income before income taxes................................ 1,063,202 630 1,063,832 59,204 (58,327)
Income taxes.............................................. 369,371 86 369,457 18,629 (17,897)
Net income................................................ 693,831 544 694,375 40,575 (40,430)
Dividends on preferred stock.............................. 18,522 -- 18,522 -- --
Net income applicable to common stockholders.............. $ 675,309 544 675,853 40,575 (40,430)
Pro forma per common share data:
Net income available to common stockholders............. $ 3.94
Average common shares (in thousands).................... 171,265
PRO FORMA
(IN THOUSANDS EXCEPT PER SHARE DATA) COMBINED
NINE MONTHS ENDED SEPTEMBER 30, 1994
Interest income........................................... 4,060,203
Interest expense.......................................... 1,664,328
Net interest income....................................... 2,395,875
Provision for loan losses................................. 75,153
Net interest income after provision for loan losses....... 2,320,722
Securities available for sale transactions................ (499)
Investment security transactions.......................... 3,595
Noninterest income........................................ 883,398
Noninterest expense....................................... 2,142,507
Income before income taxes................................ 1,064,709
Income taxes.............................................. 370,189
Net income................................................ 694,520
Dividends on preferred stock.............................. 18,522
Net income applicable to common stockholders.............. 675,998
Pro forma per common share data:
Net income available to common stockholders............. 3.94
Average common shares (in thousands).................... 171,755
POOLING OF
FIRST UNION INTEREST PRO FORMA PURCHASE PRO FORMA
CORPORATION ACQUISITIONS COMBINED ACQUISITIONS ADJUSTMENTS
YEAR ENDED DECEMBER 31, 1993
Interest income....................................... $ 4,556,332 35,971 4,592,303 527,957 (41,100)
Interest expense...................................... 1,790,439 21,228 1,811,667 306,225 --
Net interest income................................... 2,765,893 14,743 2,780,636 221,732 (41,100)
Provision for loan losses............................. 221,753 3,579 225,332 2,827 --
Net interest income after provision for loan losses... 2,544,140 11,164 2,555,304 218,905 (41,100)
Securities available for sale transactions............ 25,767 -- 25,767 12,618 --
Investment security transactions...................... 7,435 948 8,383 -- --
Noninterest income.................................... 1,165,086 36,256 1,201,342 49,184 --
Noninterest expense................................... 2,521,647 26,648 2,548,295 194,692 34,612
Income before income taxes............................ 1,220,781 21,720 1,242,501 86,015 (75,712)
Income taxes.......................................... 403,260 312 403,572 12,606 (22,950)
Net income............................................ 817,521 21,408 838,929 73,409 (52,762)
Dividends on preferred stock.......................... 24,900 94 24,994 1,204 --
Net income applicable to common stockholders.......... $ 792,621 21,314 813,935 72,205 (52,762)
Pro forma per common share data:
Net income available to common stockholders......... $ 4.73
Average common shares (in thousands)................ 167,692
PRO FORMA
COMBINED
YEAR ENDED DECEMBER 31, 1993
Interest income....................................... 5,079,160
Interest expense...................................... 2,117,892
Net interest income................................... 2,961,268
Provision for loan losses............................. 228,159
Net interest income after provision for loan losses... 2,733,109
Securities available for sale transactions............ 38,385
Investment security transactions...................... 8,383
Noninterest income.................................... 1,250,526
Noninterest expense................................... 2,777,599
Income before income taxes............................ 1,252,804
Income taxes.......................................... 393,228
Net income............................................ 859,576
Dividends on preferred stock.......................... 26,198
Net income applicable to common stockholders.......... 833,378
Pro forma per common share data:
Net income available to common stockholders......... 4.85
Average common shares (in thousands)................ 171,859
See accompanying notes to pro forma financial information.
PRO FORMA COMBINED CONDENSED BALANCE SHEET
AS OF SEPTEMBER 30, 1994
(UNAUDITED)
The following unaudited pro forma combined condensed balance sheet combines
the consolidated historical balance sheets on the assumption that the
acquisitions had been effective as of September 30, 1994, on a pooling of
interests or purchase accounting basis, as appropriate.
PURCHASES
OF LOANS
FIRST UNION HOME PRO FORMA PRO FORMA PURCHASE PRO FORMA PRO FORMA AND
(IN THOUSANDS) CORPORATION FEDERAL ADJUSTMENT COMBINED ACQUISITIONS ADJUSTMENTS COMBINED DEPOSITS
ASSETS
Cash and due from
banks.................. $3,212,888 1,752 -- 3,214,640 80,517 (923,744) 2,371,413 1,680,980
Interest-bearing
balances............... 632,206 65 -- 632,271 25 -- 632,296 --
Federal funds sold and
securities purchased
under resale
agreements............. 1,771,643 -- -- 1,771,643 8,745 -- 1,780,388 --
Total cash and cash
equivalents.......... 5,616,737 1,817 -- 5,618,554 89,287 (923,744) 4,784,097 1,680,980
Trading account assets... 1,303,453 -- -- 1,303,453 -- -- 1,303,453 --
Securities available for
sale................... 8,226,530 966 -- 8,227,496 292,283 -- 8,519,779 --
Investment securities.... 3,179,763 30,130 -- 3,209,893 1,901,342 (62,301) 5,048,934 --
Loans, net of unearned
income................. 51,633,034 195,464 -- 51,828,498 4,511,066 -- 56,339,564 13,209
Allowance for loan
losses............... (1,004,298 ) (2,496) -- (1,006,794) (43,031) -- (1,049,825) --
Loans, net............. 50,628,736 192,968 -- 50,821,704 4,468,035 -- 55,289,739 13,209
Premises and equipment... 1,617,933 548 -- 1,618,481 86,333 (21,867) 1,682,947 7,875
Due from customers on
acceptances............ 133,928 -- -- 133,928 -- -- 133,928 --
Mortgage servicing
rights................. 89,666 -- -- 89,666 11,991 24,805 126,462 --
Credit card premium...... 62,463 -- -- 62,463 -- -- 62,463 --
Other intangible
assets................. 1,091,488 -- -- 1,091,488 75,724 364,493 1,531,705 136,521
Segregated assets........ 209,209 -- -- 209,209 -- -- 209,209 --
Other assets............. 2,083,212 4,638 -- 2,087,850 187,325 (12,776) 2,262,399 783
Total assets........... $74,243,118 231,067 -- 74,474,185 7,112,320 (631,390) 80,955,115 1,839,368
LIABILITIES AND
STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing.... 10,295,616 -- -- 10,295,616 169,350 -- 10,464,966 --
Interest-bearing....... 43,391,435 192,349 -- 43,583,784 4,887,440 -- 48,471,224 1,833,831
Total deposits......... 53,687,051 192,349 -- 53,879,400 5,056,790 -- 58,936,190 1,833,831
Short-term borrowings.... 9,988,596 1,985 -- 9,990,581 618,002 -- 10,608,583 --
Bank acceptances
outstanding............ 133,928 -- -- 133,928 -- -- 133,928 --
Other liabilities........ 1,541,549 2,453 -- 1,544,002 154,493 9,590 1,708,085 5,537
Long-term debt........... 3,269,363 21,500 -- 3,290,863 642,055 -- 3,932,918 --
Total liabilities...... 68,620,487 218,287 -- 68,838,774 6,471,340 9,590 75,319,704 1,839,368
STOCKHOLDERS' EQUITY
Preferred stock.......... 31,592 -- -- 31,592 5,861 (5,861) 31,592 --
Common stock............. 585,948 10 1,644 587,602 43,624 (43,624) 587,602 --
Paid-in capital.......... 1,693,389 4,615 (1,644) 1,696,360 532,122 (532,122) 1,696,360 --
Retained earnings........ 3,482,620 8,195 -- 3,490,815 114,058 (114,058) 3,490,815 --
Less: Treasury stock..... -- -- -- -- (48,983) 48,983 -- --
Unrealized loss on debt
and equity
securities............. (170,918 ) (40) -- (170,958) (5,702) 5,702 (170,958) --
Total stockholders'
equity............... 5,622,631 12,780 -- 5,635,411 640,980 (640,980) 5,635,411 --
Total liabilities and
stockholders'
equity............... $74,243,118 231,067 -- 74,474,185 7,112,320 (631,390) 80,955,115 1,839,368
PRO FORMA
(IN THOUSANDS) COMBINED
<
ASSETS
Cash and due from
banks.................. 4,052,393
Interest-bearing
balances............... 632,296
Federal funds sold and
securities purchased
under resale
agreements............. 1,780,388
Total cash and cash
equivalents.......... 6,465,077
Trading account assets... 1,303,453
Securities available for
sale................... 8,519,779
Investment securities.... 5,048,934
Loans, net of unearned
income................. 56,352,773
Allowance for loan
losses............... (1,049,825)
Loans, net............. 55,302,948
Premises and equipment... 1,690,822
Due from customers on
acceptances............ 133,928
Mortgage servicing
rights................. 126,462
Credit card premium...... 62,463
Other intangible
assets................. 1,668,226
Segregated assets........ 209,209
Other assets............. 2,263,182
Total assets........... 82,794,483
LIABILITIES AND
STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing.... 10,464,966
Interest-bearing....... 50,305,055
Total deposits......... 60,770,021
Short-term borrowings.... 10,608,583
Bank acceptances
outstanding............ 133,928
Other liabilities........ 1,713,622
Long-term debt........... 3,932,918
Total liabilities...... 77,159,072
STOCKHOLDERS' EQUITY
Preferred stock.......... 31,592
Common stock............. 587,602
Paid-in capital.......... 1,696,360
Retained earnings........ 3,490,815
Less: Treasury stock..... --
Unrealized loss on debt
and equity
securities............. (170,958)
Total stockholders'
equity............... 5,635,411
Total liabilities and
stockholders'
equity............... 82,794,483
See accompanying notes to pro forma financial information.
NOTES TO PRO FORMA FINANCIAL INFORMATION
(1) The pro forma information presented is not necessarily indicative of
the results of operations or the combined financial position that would
have resulted had the acquisitions indicated in Note (2) been
consummated at the beginning of the periods indicated, nor is it
necessarily indicative of the results of operations in future periods
or the future financial position of the combined entities.
(2) During 1994, First Union Corporation (the "Corporation") entered into
various transactions which included (i) the November 1994 pooling of
interest acquisition of Home Federal Savings Bank with income before
income taxes and other items of $2 million for the year ended December
31, 1993, and which involved the issuance of 507,000 shares of the
Corporation's common stock, (ii) the pending purchase accounting
acquisitions of First Florida Savings Bank, FSB, Ameribanc Investors
Group, American Savings Bank of Florida, FSB, and Coral Gables Fedcorp,
Inc. at an aggregate estimated cost of approximately $856 million,
(iii) the December 1994 purchase of a DE MINIMUS amount of loans, and
the purchase of deposits from Chase Manhattan Bank of Florida, N.A.
("Chase") and Great Western Federal Savings Bank ("Great Western"),
which in the aggregate amounted to $1.8 billion, at an aggregate cost
of approximately $137 million, and (iv) during the first nine months of
1994, the purchase of deposits of Jacksonville Federal Savings
Association, Citizens Federal Savings Association, Cobb Federal Savings
Association and Hollywood Federal Savings Association from the
Resolution Trust Corporation ("RTC") in the aggregate amount of $642
million, at an aggregate cost of $68 million. Purchases of deposits
from Chase, Great Western and the RTC do not constitute a sufficient
continuity of operations, and moreover, additional financial data is
not available to develop meaningful and reliable pro forma income
statement information with respect to such purchases. Additionally,
prior to September 30, 1994, completed transactions included the 1994
second quarter pooling of interests acquisitions of American
Bancshares, Inc. and Lieber & Company with aggregate assets of $213
million as of the dates required and income before income taxes and
other items of $20 million for the year ended December 31, 1993,
and which involved the issuance of 3,662,000 shares of the
Corporation's common stock, and the August 1994 purchase accounting
acquisition of BancFlorida Financial Corporation with assets of $1.5
billion and income before income taxes of $5 million in the seven
months ended July 31, 1994, at a cost of $161 million. Goodwill and
deposit base premium of approximately $454 million and $327 million,
respectively, are currently expected to result from all completed and
pending purchase transactions. On a pooling of interests accounting
basis, income and other financial statements of the Corporation issued
after consummation of such pooling of interests transactions would
normally be restated retroactively to reflect the consolidated combined
financial position and results of operations of the Corporation as if
such transactions had taken place prior to the periods covered by such
financial statements; however, because of the relative immateriality of
such transactions to the Corporation on a consolidated basis, such
statements, while restated herein for the purpose of presenting pro
forma financial information, will not be retroactively restated solely
as a result of consummation of those acquisitions.
(3) In determining the pro forma adjustment amounts related to the pro
forma combined condensed statements of income, a 3.68 percent and 3.12
percent cost of funds for the nine months ended September 30, 1994 and
for the year ended December 31, 1993, respectively, a six-to-ten year
straight-line life related to investment securities, a nine-year
straight-line life related to loans, a 10-year straight-line life
related to premises and equipment and mortgage servicing rights, a
10-year sum-of-the-years digits method related to deposit base premium,
and a 25-year straight-line life related to goodwill, were used.
(4) Certain insignificant reclassifications have been included herein to
conform statement presentations. Transactions conducted in the ordinary
course of business between the companies are immaterial and,
accordingly, have not been eliminated.
(5) The unaudited pro forma financial information does not include any
material expenses or restructuring charges related to the acquisitions.
(6) As indicated by the foregoing unaudited pro forma financial information
and based solely on combined financial information as of September 30,
1994, upon consummation of the acquisitions, the Corporation's
historical net income per common share for the nine months ended
September 30, 1994, and for the year ended December 31, 1993, would not
have been dilutive. It should not necessarily be assumed, however, that
the foregoing data will represent actual dilution with respect to the
acquisitions.