01—Abstract
Summary
Summary of the 10-K filed March 29, 1996. Cited figures are marked; the original filing is the authoritative source.
NationsBank Corporation, a North Carolina bank holding company headquartered in Charlotte, reported net income of $1.95 billiona for 1995, up 15% from $1.69 billion in 1994, with earnings per common share rising 17% to $7.13 from $6.12.
The company stated it had $187.3 billionb in total assets at December 31, 1995, making it the third-largest banking company in the United States, and it operates through three business units: the General Bank, Global Finance and Financial Services. Return on average common shareholders' equity rose to 17.01% from 16.10%, and the efficiency ratio improved to 59.77%. Growth was driven largely by acquisitions and loan expansion.
Average loans and leases rose 15% to $109.5 billionc, and the company completed several acquisitions in late 1995 and early 1996, including Bank South Corporation (about $7.4 billion in assets, accounted for as a pooling of interests) and CSF Holdings, Inc. (about $516 million paid in cash). Credit quality remained sound overall: nonperforming assets declined 25% to $853 million, though net charge-offs rose to $421 million (0.38% of average loans) from $316 million, and management expects higher charge-offs to continue in 1996 as the loan mix shifts toward consumer lending. The company's regulatory capital ratios stood at a Tier 1 risk-based ratio of 7.24%, a total risk-based ratio of 11.58% and a leverage ratio of 6.27% at year-end 1995.
Long-term debt more than doubled to $17.8 billiond from $8.5 billion, reflecting funding of earning-asset growth and acquisitions. The filing states that pending legal actions are not expected to be material to the company's financial position or results of operations.
02—Key points
Key Highlights
- Net income of $1.95 billion in 1995, up 15% from $1.69 billion in 1994; earnings per common share of $7.13, up 17%
- Total assets of $187.3 billion at December 31, 1995; described as the third-largest banking company in the United States
- Return on average common shareholders' equity of 17.01%, up from 16.10%; efficiency ratio improved to 59.77%
- Noninterest income rose 19% to $3.1 billion; noninterest expense increased 4% to $5.2 billion
- Nonperforming assets fell 25% to $853 million; net charge-offs increased to $421 million (0.38% of average loans) from $316 million
- Acquisitions completed in late 1995 and early 1996 include Bank South Corporation (about $7.4 billion in assets) and CSF Holdings, Inc. (about $516 million cash purchase price)
- Long-term debt rose to $17.8 billion from $8.5 billion; Tier 1 risk-based capital ratio of 7.24% and leverage ratio of 6.27%
03—Questions
Frequently Asked Questions
How did NationsBank perform financially in 1995?
Net income rose 15% to $1.95 billion, and earnings per common share increased 17% to $7.13 from $6.12. Return on average common shareholders' equity improved to 17.01% from 16.10%.
What drove loan growth and revenue in 1995?
Average loans and leases grew 15% to $109.5 billion, led mainly by residential mortgages and other consumer loans. Noninterest income increased 19% to $3.1 billion, reflecting deposit service fees, capital markets revenues and acquisition-related mortgage servicing fees.
How was asset quality in 1995?
Nonperforming assets declined 25% to $853 million at year-end. Net charge-offs increased to $421 million, or 0.38% of average loans, from $316 million in 1994, due to higher credit card and other consumer charge-offs. Management expects higher charge-offs to continue in 1996.
What acquisitions did NationsBank complete or announce?
The company completed the acquisition of Bank South Corporation on January 9, 1996, issuing about 26 million shares, and CSF Holdings, Inc. on January 10, 1996, for about $516 million in cash. It also agreed to acquire Charter Bancshares, Inc. (expected to close in the second quarter of 1996) and LDI Corporation for about $28 million in cash.
Is the company adequately capitalized?
At December 31, 1995, the Tier 1 risk-based capital ratio was 7.24%, the total risk-based capital ratio was 11.58% and the leverage ratio was 6.27%. The filing states that these ratios compare favorably with regulatory minimums, and that each of the subsidiary banks is considered adequately or well capitalized.
04—Continue