UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the period ended March 31, 1994
Commission File Number: 0-12358
CCB FINANCIAL CORPORATION
(Exact name of issuer as specified in charter)
North Carolina 56-1347849
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
111 Corcoran Street, Post Office Box 931, Durham, NC 27702
(Address of principal executive offices)
Registrant's telephone number, including area code (919) 683-7777
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [ X ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
Common Stock, $5 Par value 9,516,379
(Class of Stock) (Shares outstanding as
of April 29, 1994)
CCB FINANCIAL CORPORATION
FORM 10-Q
INDEX
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets
March 31, 1994, December 31, 1993 and March 31, 1993 3
Consolidated Statements of Income
Three Months Ended March 31, 1994 and 1993 4
Consolidated Statements of Shareholders' Equity
Three Months Ended March 31, 1994 and 1993 5
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1994 and 1993 6
Notes to Consolidated Financial Statements
Three Months Ended March 31, 1994 and 1993 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10
Part II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CCB Financial Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
March 31, December 31, March 31,
1994 1993 1993
Assets:
Cash and due from banks $ 163,116,008 191,332,445 200,121,691
Time deposits in other banks 35,154,507 35,431,738 --
Federal funds sold and other short-
term investments 119,321,659 169,286,165 88,600,000
Investment securities (note 2):
Available for sale (market values
of $605,238,338 and $563,187,727) 605,238,338 553,292,393 --
Held for investment (market values
of $66,892,642, $68,553,264 and
$430,194,295) 64,008,926 64,126,134 415,635,793
Loans and lease financing (note 3) 2,161,401,949 2,159,489,054 1,515,127,856
Less reserve for loan and lease
losses (note 4) 26,936,626 26,963,334 18,928,487
Net loans and lease financing 2,134,465,323 2,132,525,720 1,496,199,369
Premises and equipment 42,805,748 42,597,185 35,087,396
Other assets 74,502,663 69,050,959 40,704,902
Total assets $ 3,238,613,172 3,257,642,739 2,276,349,151
Liabilities:
Deposits:
Demand (non-interest bearing) $ 375,521,546 421,432,974 332,207,578
Savings 434,592,625 48,028,190 46,042,433
Money market accounts 794,652,010 1,150,923,169 854,259,488
Time 1,181,251,512 1,196,386,428 757,519,968
Total deposits 2,786,017,693 2,816,770,761 1,990,029,467
Federal funds purchased and
securities sold under
agreements to repurchase 31,338,589 25,526,966 26,363,963
Other short-term borrowed funds 12,984,952 16,202,362 12,926,572
Long-term debt 78,460,490 78,698,073 26,834,479
Other liabilities 72,159,932 69,440,814 26,511,187
Total liabilities 2,980,961,656 3,006,638,976 2,082,665,668
Shareholders' equity:
Serial preferred stock. Authorized
5,000,000 shares; none issued -- -- --
Common stock of $5 par value.
Authorized 20,000,000 shares; 9,516,379,
9,517,277 and 7,816,476 shares issued 47,581,895 47,586,385 39,082,380
Additional paid-in capital 83,332,593 83,349,012 44,950,060
Retained earnings 130,322,812 124,922,331 110,090,484
Unrealized gain (loss) on investment
securities available for sale (note 2) 171,428 (835,677) (439,441)
Less: Unearned common stock held by
Management Recognition Plans (3,757,212) (4,018,288) --
Total shareholders' equity 257,651,516 251,003,763 193,683,483
Total liabilities and
shareholders' equity $ 3,238,613,172 3,257,642,739 2,276,349,151
See accompanying notes to consolidated financial statements.
CCB Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
Three Months Ended March 31, 1994 and 1993
1994 1993
Interest income:
Interest and fees on loans $ 43,721,537 32,377,528
Lease financing income 489,621 541,514
Interest and dividends on investment
securities:
U.S. Treasury 4,122,458 4,098,475
U.S. Government agencies and corporations 2,495,434 1,230,949
States and political subdivisions (tax-
exempt) 875,996 832,888
Equity securities 635,944 773,392
Interest on time deposits in other banks 295,759 -
Interest on federal funds sold and
other short-term investments 1,231,893 569,497
Total interest income 53,868,642 40,424,243
Interest expense:
Deposits 19,589,719 14,939,292
Federal funds purchased and securities
sold under agreements to repurchase 148,110 126,583
Other short-term borrowed funds 61,970 124,744
Long-term debt 1,390,665 525,680
Total interest expense 21,190,464 15,716,299
Net interest income 32,678,178 24,707,944
Provision for loan and lease losses (note 4) 1,251,500 1,000,000
Net interest income after provision for
loan and lease losses 31,426,678 23,707,944
Other income:
Service charges on deposit accounts 4,651,459 4,112,087
Trust and custodian fees 1,812,124 1,512,825
Insurance commissions 792,564 474,333
Merchant discount 837,401 669,624
Other service charges and fees 636,573 463,379
Other 1,566,048 697,151
Investment securities gains (losses) 43,851 38,586
Total other income 10,340,020 7,967,985
Other expenses:
Personnel expense 14,714,217 11,979,636
Net occupancy expense 2,242,968 1,750,353
Equipment expense 2,342,314 1,882,351
Other operating expenses 9,810,077 6,620,667
Total other expenses 29,109,576 22,233,007
Income before income taxes and cumulative
changes in accounting principles 12,657,122 9,442,922
Income taxes 4,211,400 3,091,200
Income before cumulative changes in
accounting principles 8,445,722 6,351,722
Cumulative changes in accounting principles
(note 5) - (1,371,234)
Net income $ 8,445,722 4,980,488
Income per share (note 7):
Income before cumulative changes
in accounting principles:
Primary $ .89 .81
Fully diluted .89 .77
Net income:
Primary .89 .64
Fully diluted .89 .61
Weighted average shares outstanding:
Primary 9,516,408 7,809,810
Fully diluted 9,516,408 8,581,110
See accompanying notes to consolidated financial statements.
CCB Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Three Months Ended March 31, 1994 and 1993
Unrealized
Gain (Loss)
on
Investment
Additional Securities Management Total
Common Paid-In Retained Available Recognition Shareholders'
Stock Capital Earnings for Sale Plans Equity
Balance January 1, 1993 $ 38,895,530 44,095,683 107,454,940 (600,877) - 189,845,276
Net income - - 4,980,488 - - 4,980,488
Conversion of subordinated
debentures 170,245 737,755 - - - 908,000
Stock issued pursuant to
restricted stock plan,
net of forfeitures 16,605 116,622 - - - 133,227
Cash dividends ($.30 per
share) - - (2,344,944) - - (2,344,944)
Revaluation of marketable
equity securities - - - 161,436 - 161,436
Balance March 31, 1993 $ 39,082,380 44,950,060 110,090,484 (439,441) - 193,683,483
Balance December 31, 1993 $ 47,586,385 83,349,012 124,922,331 (835,677) (4,018,288) 251,003,763
Mark to market adjustment,
net of applicable income
taxes (note 2) - - - 6,263,318 - 6,263,318
Balance January 1, 1994 47,586,385 83,349,012 124,922,331 5,427,641 (4,018,288) 257,267,081
Net income - - 8,445,722 - - 8,445,722
Forfeitures of stock issued
pursuant to restricted
stock plan (4,490) (16,419) - - - (20,909)
Earned portion of Management
Recognition Plans - - - - 261,076 261,076
Cash dividends ($.32 per
share) - - (3,045,241) - - (3,045,241)
Change in unrealized gains
(losses), net of applicable
income taxes (note 2) - - - (5,256,213) - (5,256,213)
Balance March 31, 1994 $ 47,581,895 83,332,593 130,322,812 171,428 (3,757,212) 257,651,516
See accompanying notes to consolidated financial statements.
CCB Financial Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
Three Months Ended March 31, 1994 and 1993
1994 1993
Operating activities:
Net income $ 8,445,722 4,980,488
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 1,550,755 1,255,306
Provision for loan and lease losses 1,251,500 1,000,000
Deferred income taxes 1,584,556 (2,237,839)
Net gain on sales of investment securities (43,851) (38,586)
Net amortization and accretion on
investment securities 1,133,368 2,838,414
Amortization of intangibles and other assets 658,830 318,697
Accretion of negative goodwill (853,129) -
Decrease (increase) in accrued interest
receivable (1,367,535) (1,029,937)
Increase (decrease) in accrued interest payable (151,189) 1,585,877
Decrease (increase) in other assets (6,336,966) 1,898,317
Increase (decrease) in other liabilities 3,723,436 6,697,053
Vesting of shares held by Management
Recognition Plans 261,076 -
Issuance of restricted stock, net of forfeitures (20,909) 133,227
Other 3,360 -
Net cash provided by operating activities 9,839,024 17,401,017
Investing activities:
Proceeds from maturities and issuer calls of
investment securities held for investment 1,467,480 110,526,710
Purchases of investment securities held for
investment (1,346,034) (80,463,031)
Proceeds from sales of investment securities
available for sale 42,257,269 -
Proceeds from maturities and issuer calls of
investment securities available for sale 166,783,508 -
Purchases of investment securities available
for sale (260,958,654) -
Net decrease (increase) in loans and leases
receivable (3,296,410) 4,910,013
Purchases of premises and equipment (1,759,318) (1,469,972)
Net cash provided (used) by investing
activities (56,852,159) 33,503,720
Financing activities:
Net increase in deposit accounts (30,753,068) (38,476,769)
Net increase in federal funds purchased and
securities sold under agreements to repurchase 5,811,623 1,095,706
Net decrease in other short-term borrowed
funds (3,217,410) (7,460,003)
Proceeds from issuance of long-term debt 3,500,000 -
Repayments of long-term debt (3,740,943) (3,152)
Cash dividends (3,045,241) (2,344,944)
Net cash used by financing activities (31,445,039) (47,189,162)
Net increase (decrease) in cash and cash
equivalents (78,458,174) 3,715,575
Cash and cash equivalents at January 1 396,050,348 285,006,116
Cash and cash equivalents at March 31 $ 317,592,174 288,721,691
Supplemental disclosure of cash flow information:
Interest paid during the year $ 21,341,653 17,302,176
Income taxes paid during the year $ 41,187 647,283
See accompanying notes to consolidated financial statements.
CCB Financial Corporation and Subsidiaries
Notes to Consolidated Financial Statements
Three Months Ended March 31, 1994 and 1993
(1) Consolidation
The consolidated financial statements include the accounts and
results of operations of CCB Financial Corporation (the
Corporation) and its wholly-owned subsidiaries, Central Carolina
Bank and Trust Company (CCB), CCB Savings Bank of Lenoir, Inc.,
SSB, Graham Savings Bank, Inc., SSB and Central Carolina Bank -
Georgia. The consolidated financial statements also include the
accounts and results of operations of CCB Investment and Insurance
Service Corporation, Southland Associates, Inc., CCBDE and 1st
Home Mortgage Acceptance Corporation, wholly-owned subsidiaries of
CCB. All significant intercompany accounts are eliminated in
consolidation.
(2) Investment Securities
Effective January 1, 1994, the Corporation adopted Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" (SFAS 115). Under SFAS
115, debt securities and equity securities that have readily
determinable fair values are segregated into three categories for
accounting and reporting purposes. Debt and equity securities
that the Corporation has the positive intent and ability to hold
until maturity are classified as held for investment and reported
at amortized cost. Debt and equity securities that are bought and
held principally for the purpose of selling them in the near term
are classified as trading securities and reported at fair value,
with unrealized gains and losses included in earnings. Debt and
equity securities not classified as either held for investment or
as trading securities are classified as available for sale
securities and reported at fair value, with unrealized gains and
losses excluded from earnings and reported in a separate component
of shareholders' equity. Adoption of SFAS 115 resulted in the
recognition of net unrealized securities gains on the available
for sale portfolio which have been reported, net of taxes, as a
separate component of shareholders' equity. Prior to the adoption
of SFAS 115, securities classified as available for sale were
reported at the lower of cost or market value. As SFAS 115 cannot
be retroactively applied to prior years' financial statements,
there are no changes in previously reported unrealized losses on
marketable equity securities.
Investment securities held for investment are stated at amortized
cost. The Corporation has the ability and intent to hold such
securities until maturity. Securities available for sale will be
considered in the Corporation's asset/liability management
strategies and may be sold in response to changes in interest
rates, liquidity needs and/or significant prepayment risk. The
cost of investment securities sold is determined by the
"identified certificate" method.
(3) Loans and Lease Financing
A summary of loans and lease financing at March 31, 1994 and 1993
follows:
1994 1993
Commercial, financial and agricultural $ 382,055,524 321,059,136
Real estate-construction 237,181,184 176,930,151
Real estate-mortgage 1,129,430,178 677,879,782
Instalment loans to individuals 213,099,801 161,483,888
Credit card receivables 177,210,181 157,453,087
Lease financing 25,539,028 23,577,472
Gross loans and lease financing 2,164,515,896 1,518,383,516
Less unearned income 3,113,947 3,255,660
Total loans and lease financing $ 2,161,401,949 1,515,127,856
(4) Reserve for Loan and Lease Losses
Following is a summary of the reserve for loan and lease losses:
1994 1993
Balance at beginning of year $ 26,963,334 19,026,764
Provision charged to operations 1,251,500 1,000,000
Recoveries of loans and leases
previously charged-off 366,598 349,448
Loan and lease losses charged to reserve (1,644,806) (1,447,725)
Balance at March 31 $ 26,936,626 18,928,487
(5) Accounting Changes
The cumulative changes in accounting principles reflect the
adoption of Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than
Pensions", which resulted in a one-time net charge of $2,271,234
($3,736,834 pre-tax) in recognition of the entire Accumulated
Postretirement Benefit Obligation, and adoption of Statement of
Financial Accounting Standards No. 109, "Accounting for Income
Taxes", which resulted in a one-time benefit of $900,000. Both
Statements were adopted on January 1, 1993.
(6) Risk Assets
Following is a summary at March 31, 1994 and 1993 (in thousands):
1994 1993
Nonaccrual loans and lease financing $ 11,817 10,700
Other real estate acquired through loan foreclosures 7,382 9,168
Accruing loans and lease financing
90 days or more past due 1,991 3,189
Restructured loans and lease financing - 71
Total risk assets $ 21,190 23,128
(7) Per Share Data
Primary income per share is computed based on the weighted average
number of common shares outstanding during each period. Fully
diluted income per share is computed based on the weighted average
number of common shares outstanding and common shares issuable
upon full conversion of convertible debt (which was fully
converted or redeemed at June 30, 1993). In this computation,
interest expense on convertible debt, net of applicable income
taxes, is added back to income as if the debt was converted into
common stock at the beginning of the period.
(8) Contingencies
Certain legal claims have arisen in the normal course of business,
which, in the opinion of management and counsel, will have no
material adverse effect on the financial position of the
Corporation or its subsidiaries.
(9) Management Opinion
The financial statements in this report are unaudited. In the
opinion of management, all adjustments (none of which were other
than normal accruals) necessary for a fair presentation of the
financial position and results of operations for the periods
presented have been included.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
The purpose of this discussion and analysis is to aid in the
understanding and evaluation of financial conditions and changes
therein and results of operations of CCB Financial Corporation
(the "Corporation") and its wholly-owned subsidiaries, Central
Carolina Bank and Trust Company ("CCB"), CCB Savings Bank of
Lenoir, Inc., SSB ("CCB Savings"), Graham Savings Bank, Inc.,
SSB ("Graham Savings") and Central Carolina Bank-Georgia ("CCB-
Ga.") (collectively "the Banks"), and CCB's wholly-owned
subsidiaries, CCB Investment and Insurance Service Corporation,
CCBDE, 1st Home Mortgage Acceptance Corporation and Southland
Associates, Inc. for the three months ended March 31, 1994 and
1993. This discussion and analysis is intended to complement
the unaudited financial statements and footnotes and the
supplemental financial data appearing elsewhere in this Form 10-Q,
and should be read in conjunction therewith.
Results of Operations - Three Months Ended March 31, 1994 and 1993
Income before cumulative changes in accounting principles for
the three months ended March 31, 1994 amounted to $8,446,000, an
increase of $2,094,000 or 33.0% over the same period in 1993.
Net income for the three months ended March 31, 1994 amounted to
$8,446,000, a $3,465,000 increase or 69.6% increase over the
$4,981,000 net income recorded in the first quarter of 1993.
Primary income per share was $.89 in 1994, a $.08 increase over
the 1993 period. On a fully diluted basis, income per share was
also $.89, which represented a $.12 increase over the 1993
period. Returns on average assets and average shareholders'
equity were 1.07% and 13.60%, respectively, compared to .90% and
10.56% in the 1993 period.
Average Balance Sheets and Net Interest Income Analysis on a
taxable equivalent basis for each of the periods are included in
this discussion as Table 1. Average earning assets increased by
$896,428,000 or 43.1% over the 1993 period which was due
primarily to the Corporation's financial institution
acquisitions consummated in the second through fourth quarters
of 1993. The financial institution acquisitions and an overall
decline in interest rates decreased the net interest margin from
5.02% in the first quarter of 1993 to 4.62% in 1994. Despite
the decline in the net interest margin of 40 basis points, net
interest income on a taxable equivalent basis increased
$13,589,000 or 32.8%.
The provision for loan and lease losses was increased to
$1,252,000 from $1,000,000 in 1993 due to the increase in
outstanding loans and lease financing. The reserve for loan and
lease losses to loans and lease financing outstanding was 1.25%
at March 31, 1994 and 1993. Net 1994 loan and lease charge-offs
amounted to $1,278,000 or .24% of average loans and lease
financing compared to .29% in 1993.
Other income increased $2,372,000 in the first quarter of 1994
to $10,340,000 compared to 1993's $7,968,000. The increase was
due in part to a $539,000 increase in service charges on deposit
accounts resulting from increased volume, $318,000 increase in
insurance commissions from increased volume of annuity sales and
$853,000 of negative goodwill accretion from the acquisition of
financial institutions in 1993.
Other expenses in the 1994 period increased by $6,876,000 or
30.9% from the 1993 period. The largest increase was
experienced in personnel expense, a $2,734,000 increase, due to
the 1993 acquisitions of financial institutions. Despite the
increase in personnel expense, a comparison of assets per
employee shows improvement from $1.62 million of assets per
employee at March 31, 1993 to $2.06 million per employee at
March 31, 1994. Other increased expenses included $642,000 of
goodwill amortization, $552,000 of deposit insurance based on
the increased level of deposits and general increases in
expenses resulting from a 42.3% increase in consolidated total
assets from March 1993's level. The effective income tax rate
was 33.27% in 1994 compared to 32.73% in the same period of
1993.
Table 1
AVERAGE BALANCES AND NET INTEREST INCOME ANALYSIS
Three Months Ended March 31, 1994 and 1993
(Taxable Equivalent Basis - In Thousands) (1)
1994
Interest Average
Average Income/ Yield/
Balance Expense Rate
Earning Assets:
Loans and lease financing (2) $ 2,156,573 44,256 8.32 %
U.S. Treasury and agency
obligations 530,360 7,171 5.48
State and political
subdivision obligations 50,400 1,348 10.85
Equity securities 48,330 675 5.66
Federal funds sold and other
short-term investments 156,201 1,286 3.34
Time deposits in other banks 33,404 314 3.81
Total earning assets 2,975,268 55,050 7.50
Non-earning assets:
Cash and due from banks 142,031
Premises and equipment 42,907
All other assets, net 32,909
Total assets $ 3,193,115
Interest bearing
liabilities:
Savings and time deposits $ 2,380,365 19,590 3.34 %
Federal funds purchased and
securities sold under
agreements to repurchase 30,616 148 1.96
Other short-term borrowed funds 11,605 62 2.17
Long-term debt 77,271 1,390 7.30
Total interest bearing
liabilities 2,499,857 21,190 3.44
Other liabilities and
shareholders' equity:
Demand deposits 369,994
Other liabilities 71,486
Shareholders' equity 251,778
Total liabilities and
shareholders' equity $ 3,193,115
Net interest income and net
interest margin (3) $ 33,860 4.62 %
Interest rate spread (4) 4.06 %
1993
Interest Average
Average Income/ Yield/
Balance Expense Rate
Earning Assets:
Loans and lease financing (2) $ 1,509,686 33,007 8.87 %
U.S. Treasury and agency
obligations 372,137 5,767 6.28
State and political
subdivision obligations 43,501 1,295 12.07
Equity securities 17,882 306 6.94
Federal funds sold and other
short-term investments 135,634 1,086 3.25
Time deposits in other banks - - -
Total earning assets 2,078,840 41,461 8.09
Non-earning assets:
Cash and due from banks 126,301
Premises and equipment 35,276
All other assets, net 14,017
Total assets $ 2,254,434
Interest bearing
liabilities:
Savings and time deposits $ 1,656,913 14,939 3.66 %
Federal funds purchased and
securities sold under
agreements to repurchase 26,566 126 1.92
Other short-term borrowed funds 19,593 125 2.59
Long-term debt 27,014 526 7.90
Total interest bearing
liabilities 1,730,086 15,716 3.68
Other liabilities and
shareholders' equity:
Demand deposits 310,489
Other liabilities 22,656
Shareholders' equity 191,203
Total liabilities and
shareholders' equity $ 2,254,434
Net interest income and net
interest margin (3) 25,745 5.02 %
Interest rate spread (4) 4.41 %
(1) The taxable equivalent basis is computed using 35% federal and
7.83% state tax rates in 1994 and 34% federal and 7.91% state tax
rates in 1993 where applicable.
(2) The average loan and lease financing balances include non-
accruing loans and lease financing. Loan fees of $1,943,000 and
$1,317,000 for 1994 and 1993, respectively, are included in
interest income.
(3) Net interest margin is computed by dividing net interest
income by total earning assets.
(4) Interest rate spread equals the earning asset yield minus the
interest bearing liability rate.
Financial Condition
Total assets have decreased slightly, .6%, from year-end 1993
but have increased $962,000,000 since March 31, 1993 due to
acquisitions of financial institutions and internal growth.
Virtually all of the increase is in interest-earning assets.
Average assets have increased from $2,694,973,000 for the year
ended December 31, 1993 to $3,193,115,000 for the three months
ended March 31, 1994 and compare to $2,254,434,000 for the three
months ended March 31, 1993.
At March 31, 1994, risk assets (consisting of nonaccrual loans
and lease financing, foreclosed real estate, restructured loans
and lease financing and accruing loans 90 days or more past due)
amounted to approximately $21,190,000 or .98% of outstanding
loans and lease financing and foreclosed real estate. This
compares to approximately $23,252,000 or 1.07% and $23,128,000
or 1.52% at December 31, 1993 and March 31, 1993, respectively.
The reserve for loan and lease losses to risk assets was 1.27x
at March 31, 1994 compared to 1.16x at December 31, 1993 and
.82x at March 31, 1993.
Effective January 1, 1994, the Corporation adopted Statement of
Financial Accounting Standards No. 115, "Accounting for Certain
Investments in Debt and Equity Securities" (SFAS 115). Under
SFAS 115, debt securities and equity securities are segregated
into three categories for accounting and reporting purposes.
Debt and equity securities that the Corporation has the positive
intent and ability to hold until maturity are classified as held
for investment and reported at amortized cost. Debt and equity
securities that are bought and held principally for the purpose
of selling them in the near term are classified as trading
securities and reported at fair value, with unrealized gains and
losses included in earnings. Debt and equity securities not
classified as either held for investment or as trading
securities are classified as available for sale securities and
reported at fair value, with unrealized gains and losses
excluded from earnings and reported in a separate component of
shareholders' equity. Adoption of SFAS 115 resulted in the
recognition of net unrealized securities gains on the available
for sale portfolio which have been reported, net of tax, as a
separate component of shareholders' equity. After adjusting
for changes in market value during the quarter, this component
of shareholders' equity totals $171,428 at March 31, 1994.
Investment securities to be held until maturity are classified
as such and will continue to be recorded at amortized cost.
The Corporation's capital position has historically been strong
as evidenced by the Corporation's ratios of average
shareholders' equity to average total assets of 7.89% and 8.48%
for the three months ended March 31, 1994 and 1993,
respectively. Furthermore, the Corporation and the Banks
continue to maintain higher capital ratios than required under
regulatory guidelines. Due to the retention of earnings and the
public offerings of common stock and qualifying debt late in
1993, the Corporation's and Banks' capital ratios are returning
to their pre-acquisition capital ratio levels. The chart below
shows that the Corporation and the Banks significantly exceed
all risk-based capital requirements at March 31, 1994.
March 31, December 31, March 31, Regulatory
Ratio 1994 1993 1993 Minimums
Tier 1 Capital 4.00%
Corporation 10.21% 9.93% 11.24%
CCB 9.33 9.12 11.38
CCB Savings 19.39 17.87 -
Graham Savings 33.90 34.16 -
CCB-Ga. 27.73 30.42 -
Total Capital 8.00
Corporation 13.13 12.86 13.83
CCB 11.40 11.21 12.53
CCB Savings 21.28 19.67 -
Graham Savings 35.59 35.90 -
CCB-Ga. 28.48 31.26 -
Leverage 4.00
Corporation 7.38 8.50 8.48
CCB 6.88 7.47 8.28
CCB Savings 8.95 8.59 -
Graham Savings 16.91 16.64 -
CCB-Ga. 16.66 35.35 -
The Corporation has increased its annual cash dividends
consistently over the past 30 years, increasing to $.32 per
share for the three months ended March 31, 1994 from $.30 per
share for the same period in 1993. Book value increased 9.2% to
$27.07 per share at March 31, 1994 from 1993's level of $24.78.
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Shareholders of the Corporation was
held on April 5, 1994. Proxies for the Annual Meeting
were solicited pursuant to Regulation 14 under the Act.
The proposals voted upon and effected at the Annual
Meeting were (1) increase the number of directors of the
Corporation to 18, (2) elect 18 members of the Board of
Directors (3) approve the Corporation's Long-Term
Incentive Plan, (4) increase the number of authorized
shares of the Corporation's common and preferred stock
from 25,000,000 to 35,000,000 and (5) ratify the
appointment of KPMG Peat Marwick as the Corporation's
independent auditors for 1994. See Exhibit 99 for the
voting results of each of the proposals voted on at the
Annual Meeting.
Item 6. Exhibits and Reports on Form 8-K
(a). Exhibits
Exhibit 10 - CCB Financial Corporation Long-Term Incentive Plan
Exhibit 99 - Report of Inspectors of Election on Quorum and Voting
Results from the Annual Meeting of Shareholders
held on April 5, 1994
(b). Reports on Form 8-K
A report on Form 8-K dated March 14, 1994 was filed under Items 5 and 7.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
CCB FINANCIAL CORPORATION
Registrant
Date: May 13, 1994 /s/ ERNEST C. ROESSLER
Ernest C. Roessler
President and Chief Executive Officer
Date: May 13, 1994 /s/ W. HAROLD PARKER, JR.
W. Harold Parker, Jr.
Senior Vice President and Controller
(Chief Accounting Officer)
EXHIBIT INDEX
Exhibit No. Description
10 CCB Financial Corporation Long-Term Incentive Plan
99 Report of Inspectors of Election on Quorum and Voting
Results from the Annual Meeting of Shareholders held
on April 5, 1994