CCB FINANCIAL CORPORATION REPORTS
HIGHER FIRST QUARTER EARNINGS
For more information contact: For Immediate Release
W. Harold Parker, Jr. 919-683-7631
DURHAM, NC, April 15 - CCB Financial Corporation reported
today that income per share before merger-related expense was
$1.33, an increase of $.17, or 14.7%, over the first quarter
of 1996. After merger-related expenses of $.05, recognized in
connection with the acquisition of Salem Trust Bank on January
31, 1997, income per share was $1.28, an increase of 10.3%.
Results for prior periods have been restated for the Salem
Trust acquisition which was accounted for as a pooling-of-
interests.
"We are pleased with our accomplishments during the first
quarter," said Ernest C. Roessler, CCB's President and Chief
Executive Officer, "as we not only experienced healthy
earnings growth, in line with our budget, but also invested in
expanding our delivery channels and markets. Our earnings
were bolstered by $.06 per share through the securitization of
$138.3 million in mortgage loans, $112.6 million of which
were retained in the securities portfolio. Our merger with
Salem Trust Bank was completed, and we are in the process of
extending our private banking services beyond Winston-Salem.
We opened three additional Harris Teeter in-store locations,
in Aberdeen, Clemmons, and Salisbury, bringing our total to
eleven. We began an extensive promotion of our telephone
banking service after expanding staffing to handle increasing
volumes. We are concluding our on-line banking pilot program
which we will begin to offer to the public during the second
quarter. We successfully promoted intermediate and longer
term CDs, helping to fund our strong loan growth and further
enhance our interest sensitivity position."
"The biggest news of the quarter, however, was the signing of
a definitive agreement to merge with American Federal Bank of
Greenville, SC. This is a very exciting development for us,
as this combination extends our franchise along the vibrant I-
85 corridor into the Greenville-Spartanburg MSA and should
result in improved operating performance. Together, CCB and
American Federal will be the sixth largest financial
institution in the Carolinas, with over 200 offices in 40
counties."
During the first quarter, loans grew at an annualized rate of
14.3% over the fourth quarter of 1996, excluding the impact of
the mortgage securitization, while outstanding credit quality
was maintained. Buoyed by our CD promotion, average deposits
increased by $324.2 million, up 7.4% over the first quarter of
1996. Noninterest income continued its recent growth, as an
annual growth of 7.4% was registered over the fourth quarter
of 1996. Noninterest expenses, excluding non-recurring
expenses, declined by $743,000 from the fourth quarter,
despite increased investments in our alternative delivery
initiatives as well as normal growth.
CCB offers a complete line of traditional banking services to
its customers as well as a full array of financial products
such as investments, insurance, and trust services, through
161 offices, including eleven open seven days a week in Harris
Teeter stores, 153 ATM's, its TeleBanking center, corporate on-
line services, and, coming this quarter, consumer on-line
banking.
###
CCB FINANCIAL CORPORATION
Financial Summary (1)
Unaudited
(In Thousands Except Share and Per Share Data)
Three Months Ended
Income Statement 3/31/97 12/31/96 9/30/96 6/30/96 3/31/96
Loan and lease income (TE) $ 87,139 86,257 83,768 81,168 80,374
Securities income (TE) 18,200 17,672 17,313 16,719 17,483
Other interest income 4,035 4,157 3,804 4,448 3,917
Total interest income (TE) 109,374 108,086 104,885 102,335 101,774
Savings/NOW expense 1,852 1,818 1,843 2,146 2,390
Money market account expense 13,546 13,771 13,644 12,917 12,449
Jumbo CD expense 5,512 5,219 4,677 4,191 4,676
Consumer time deposit expense 25,754 24,860 24,323 23,961 24,285
Interest expense on deposits 46,664 45,668 44,487 43,215 43,800
Short-term borrowed
funds expense 1,781 1,702 1,877 1,633 867
Long-term debt expense 948 978 984 1,074 1,277
Total interest expense 49,393 48,348 47,348 45,922 45,944
Net interest income (TE) 59,981 59,738 57,537 56,413 55,830
Provision for loan and
lease losses 1,775 3,891 3,850 3,149 2,133
Net interest income
after provision (TE) 58,206 55,847 53,687 53,264 53,697
Service charges on deposits 7,669 7,512 7,371 7,320 6,987
Other service charges and
fees 1,221 1,406 1,402 1,439 1,424
Trust income 1,798 1,960 1,705 1,921 1,674
Sales and insurance
commissions 1,863 1,829 1,603 1,458 1,199
Merchant discount 1,580 2,001 1,418 1,414 1,283
Accretion of negative
goodwill 839 839 839 839 839
Other 2,401 1,567 2,229 1,623 1,332
Investment securities gains 121 120 560 32 1,303
Investment securities losses (65) (125) (61) (6) (1,318)
Total other income 17,427 17,109 17,066 16,040 14,723
Personnel expense 23,201 22,501 21,834 20,486 21,047
Occupancy 2,923 2,890 3,082 2,896 2,996
Equipment 2,500 2,648 2,489 2,456 2,655
Foreclosed property expense 237 35 73 138 119
Deposit and other insurance 436 145 1,063 551 534
FDIC special assessment
(refund) (2) - (1,000) 8,400 - -
Amortization of intangible
assets 892 910 910 910 985
Other 10,786 12,589 9,959 10,740 10,348
Merger-related expense (1)
and (2) 1,016 - - - -
Total other expenses 41,991 40,718 47,810 38,177 38,684
Income before income
taxes (TE) 33,642 32,238 22,943 31,127 29,736
Tax equivalent adjustment 1,920 2,012 1,932 1,954 2,022
Income before income taxes 31,722 30,226 21,011 29,173 27,714
Income taxes (2) 11,603 10,494 5,432 10,305 9,558
Net income $ 20,119 19,732 15,579 18,868 18,156
Per Share Data
Income before non-recurring
items (2) $ 1.33 1.22 1.22 1.20 1.16
Net income 1.28 1.25 1.00 1.20 1.16
Cash dividends .42 .42 .42 .38 .38
Book value 31.85 31.48 30.46 29.78 29.05
Tangible book value 30.08 29.66 28.57 27.83 26.81
Market value (3):
High 70.00 71.75 55.00 54.75 55.75
Low 63.75 54.75 49.50 49.75 49.25
Close 63.88 68.25 54.75 51.25 50.25
Page 1
CCB FINANCIAL CORPORATION
Financial Summary (1)
Unaudited
(In Thousands Except Share and Per Share Data)
Three Months Ended
Ratios 3/31/97 12/31/96 9/30/96 6/30/96 3/31/96
Income before non-recurring
items (2):
Return on average assets 1.54 % 1.40 1.45 1.47 1.43
Return on average equity 17.03 15.82 16.16 16.60 16.24
Net income:
Return on average assets 1.48 1.45 1.19 1.47 1.43
Return on average equity 16.39 16.31 13.21 16.60 16.24
Net interest margin 4.61 4.65 4.66 4.65 4.67
Average equity to average
assets 9.01 8.88 8.98 8.87 8.83
Operating Efficiency Ratios
As a percentage of average
assets (excluding
non-recurring items (2)):
Noninterest income 1.28 % 1.26 1.30 1.25 1.16
Personnel expense 1.70 1.65 1.66 1.60 1.66
Occupancy and equipment
expense .39 .40 .42 .42 .45
Other operating expense .91 1.00 .91 .96 .95
Noninterest expense 3.00 3.05 2.99 2.98 3.06
Net overhead (noninterest
exp. - noninterest inc.) 1.72 % 1.79 1.69 1.73 1.90
Noninterest expense
(excluding non-recurring
items (2)) as a
percentage of net interest
income (TE) and other income 52.93 % 54.29 52.83 52.69 54.83
Average assets per employee
(in millions) $ 2.73 2.68 2.62 2.61 2.59
Average Balances
Assets $ 5,522,844 5,420,934 5,224,191 5,154,265 5,094,067
Loans and lease financing
(all domestic) 3,905,349 3,808,788 3,687,583 3,559,250 3,477,305
Investment securities:
Taxable (4) 952,673 916,676 910,683 899,159 940,989
Tax-exempt 82,357 78,456 75,622 77,285 76,701
Earning assets (4) 5,246,245 5,125,022 4,945,958 4,862,010 4,795,453
Deposits:
Demand deposits (noninterest- 560,958 575,184 530,180 537,057 505,259
bearing)
Savings/NOW accounts 537,739 534,287 516,162 517,647 514,335
Money market accounts 1,414,055 1,435,060 1,397,385 1,364,028 1,347,004
Jumbo CD's 395,733 365,831 329,732 303,837 327,504
Consumer time deposits 1,799,861 1,714,228 1,674,778 1,676,594 1,689,998
Total deposits 4,708,346 4,624,590 4,448,237 4,399,163 4,384,100
Short-term borrowed funds 154,043 157,507 146,275 133,497 77,725
Long-term debt 57,502 58,859 59,153 64,227 76,072
Interest-bearing liabilities 4,358,933 4,265,772 4,123,485 4,059,831 4,032,638
Shareholders' equity 497,857 481,230 469,332 457,290 449,701
Share Data
Common shares outstanding 15,783,920 15,749,832 15,724,178 15,714,469 15,643,377
Weighted average shares
outstanding 15,763,827 15,732,576 15,719,819 15,680,214 15,584,814
Page 2
CCB FINANCIAL CORPORATION
Financial Summary (1)
Unaudited
(In Thousands Except Share and Per Share Data)
As Of Or For The Three Months Ended
Reserve For Loan and
Lease Losses 3/31/97 12/31/96 9/30/96 6/30/96 3/31/96
Beginning balance $ 50,547 48,688 46,857 45,653 44,880
Provision for loan and
lease losses 1,775 3,891 3,850 3,149 2,133
Recoveries 626 763 510 476 508
Charge-offs (2,813) (2,795) (2,529) (2,421) (1,868)
Ending balance $ 50,135 50,547 48,688 46,857 45,653
Net Charge-offs by Type of Loan
Commercial, financial and
agricultural (34) (106) (41) (32) 15
Secured by real estate (36) 165 (172) (351) (22)
Instalment loans to
individuals (458) (753) (544) (551) (259)
Credit card receivables (1,704) (1,315) (1,265) (1,035) (965)
Lease financing 45 (23) 3 24 (129)
Total net charge-offs (2,187) (2,032) (2,019) (1,945) (1,360)
Non-Performing and Risk Assets
Nonperforming assets:
Beginning balance $ 12,689 14,501 14,533 15,529 12,083
Activity during the quarter:
Additions 4,275 1,430 1,795 2,114 4,712
Payments or sales (1,657) (3,115) (1,754) (2,864) (1,217)
Return to performing status - - - - -
Charge-offs or write-downs (154) (127) (73) (246) (49)
Net increase (decrease) 2,464 (1,812) (32) (996) 3,446
Ending balance comprised of:
Nonaccrual loans and leases 13,553 11,271 11,785 11,980 13,283
Foreclosed real estate 1,600 1,418 2,716 2,553 2,246
Total nonperforming assets 15,153 12,689 14,501 14,533 15,529
Ninety days past due and
accruing 3,209 3,066 4,223 4,229 2,768
Total risk assets $ 18,362 15,755 18,724 18,762 18,297
Asset Quality Ratios
Total risk assets to:
Total loans and foreclosed
real estate .48 % .40 .50 .52 .52
Total assets .33 .28 .35 .36 .35
Loan loss reserve to total
risk assets 2.73 x 3.21 2.60 2.50 2.50
Net charge-offs to average
loans (annualized) .23 % .21 .22 .22 .16
Loan loss reserve to total
loans 1.30 1.30 1.30 1.30 1.30
Other Information
Number of offices 161 158 156 156 159
Number of employees 2,034 2,019 1,996 1,976 1,968
Number of ATM's 153 143 134 130 129
Intangible assets:
Goodwill $ 24,354 25,100 25,847 26,593 29,614
Deposit base premium 3,547 3,692 3,855 4,018 5,473
Mortgage servicing rights 2,383 2,776 2,555 2,208 1,554
Negative goodwill 21,399 22,238 23,077 23,916 24,755
Parent Company's investment
in subsidiaries 510,422 503,270 486,855 476,333 468,706
Cash dividends 6,627 6,609 6,325 5,718 5,882
Page 3
CCB FINANCIAL CORPORATION
Financial Summary (1)
Unaudited
(In Thousands Except Share and Per Share Data)
Three Months Ended March 31 Increase(Decrease)
Income Statement 1997 1996 Amount %
Loan and lease income (TE) $ 87,139 80,374 6,765 8.4
Securities income (TE) 18,200 17,483 717 4.1
Other interest income 4,035 3,917 118 3.0
Total interest income (TE) 109,374 101,774 7,600 7.5
Savings/NOW expense 1,852 2,390 (538) (22.5)
Money market account expense 13,546 12,449 1,097 8.8
Jumbo CD expense 5,512 4,676 836 17.9
Consumer time deposit expense 25,754 24,285 1,469 6.0
Interest expense on deposits 46,664 43,800 2,864 6.5
Short-term borrowed funds expense 1,781 867 914 105.4
Long-term debt expense 948 1,277 (329) (25.8)
Total interest expense 49,393 45,944 3,449 7.5
Net interest income (TE) 59,981 55,830 4,151 7.4
Provision for loan and lease losses 1,775 2,133 (358) (16.8)
Net interest income after
provision (TE) 58,206 53,697 4,509 8.4
Service charges on deposits 7,669 6,987 682 9.8
Other service charges and fees 1,221 1,424 (203) (14.3)
Trust income 1,798 1,674 124 7.4
Sales and insurance commissions 1,863 1,199 664 55.4
Merchant discount 1,580 1,283 297 23.1
Accretion of negative goodwill 839 839 - N/A
Other 2,401 1,332 1,069 80.3
Investment securities gains 121 1,303 (1,182) (90.7)
Investment securities losses (65) (1,318) 1,253 95.1
Total other income 17,427 14,723 2,704 18.4
Personnel expense 23,201 21,047 2,154 10.2
Occupancy 2,923 2,996 (73) (2.4)
Equipment 2,500 2,655 (155) (5.8)
Foreclosed property expense 237 119 118 99.2
Deposit and other insurance 436 534 (98) (18.4)
Amortization of intangible assets 892 985 (93) (9.4)
Other 10,786 10,348 438 4.2
Merger-related expense (1) and (2) 1,016 - 1,016 N/A
Total other expenses 41,991 38,684 3,307 8.5
Income before income taxes (TE) 33,642 29,736 3,906 13.1
Tax equivalent adjustment 1,920 2,022 (102) (5.0)
Income before income taxes 31,722 27,714 4,008 14.5
Income taxes (2) 11,603 9,558 2,045 21.4
Net income $ 20,119 18,156 1,963 10.8
Per Share Data
Income before non-recurring
items (2) $ 1.33 1.16 .17 14.7
Net income 1.28 1.16 .12 10.3
Cash dividends per share .42 .38 .04 10.5
Page 4
CCB FINANCIAL CORPORATION
Financial Summary (1)
Unaudited
(In Thousands Except Share and Per Share Data)
Three Months Ended March 31
Ratios 1997 1996
Income before non-recurring
items (2):
Return on average assets 1.54 % 1.43
Return on average equity 17.03 16.24
Net income:
Return on average assets 1.48 1.43
Return on average equity 16.39 16.24
Net interest margin 4.61 4.67
Average equity to average 9.01 8.83
assets
As Of March 31 YTD Averages
Balance Sheet Data 1997 1996 1997 1996
Assets $ 5,568,082 5,203,102 5,522,844 5,094,067
Loans and lease financing 3,855,249 3,509,008 3,905,349 3,477,305
Securities held to maturity:
Book value 82,152 78,107 - -
Market value 85,444 82,040 - -
Securities available for sale 1,112,702 888,100 - -
Total investment securities (4) 1,194,854 966,207 1,035,030 1,017,690
Earning assets (4) 5,283,321 4,874,557 5,246,247 4,795,453
Deposits:
Demand deposits (noninterest- 593,843 548,221 560,958 505,259
bearing)
Savings/NOW accounts 553,016 527,748 537,739 514,335
Money market accounts 1,425,921 1,357,541 1,414,055 1,347,004
Jumbo CD's 384,742 305,034 395,733 327,504
Consumer time deposits 1,830,801 1,707,441 1,799,861 1,689,998
Total deposits 4,788,323 4,445,985 4,708,346 4,384,100
Short-term borrowed funds 112,617 128,352 154,043 77,725
Subordinated notes 32,985 35,103 32,985 35,103
(qualifying debt)
Other long-term debt 23,741 35,951 24,517 40,969
Interest-bearing liabilities 4,363,823 4,097,170 4,358,933 4,032,639
Shareholders' equity 502,735 454,448 497,857 449,701
Fair value adjustment included
in shareholders' equity (2,416) 2,686 5,195 9,295
Three Months Ended March 31
Share Data 1997 1996
Weighted average shares outstanding 15,763,827 15,584,814
Reserve For Loan Losses
Beginning balance $ 50,547 44,880
Provision for loan and lease losses 1,775 2,133
Recoveries 626 508
Charge-offs (2,813) (1,868)
Ending balance $ 50,135 45,653
Net charge-offs to average
loans (annualized) .23 % .16
Page 5
CCB FINANCIAL CORPORATION
Financial Summary (1)
Unaudited
(In Thousands Except Share and Per Share Data)
Three Months Ended March 31
Operating Efficiency Ratios 1997 1996
As a percentage of average
assets (excluding
non-recurring items (2)):
Noninterest income 1.28 % 1.16
Personnel expense 1.70 1.66
Occupancy and equipment expense .39 .45
Other operating expense .91 .95
Noninterest expense 3.00 3.06
Net overhead (noninterest
expense - noninterest income) 1.72% 1.90
Noninterest expense (excluding
non-recurring items (2))
as a percentage of net interest
income (TE) and other income 52.93 % 54.83
As Of March 31
1997 1996
Risk-Adjusted Capital (Estimated)
On-balance sheet risk assets $ 3,792,663 3,669,874
Off-balance sheet risk assets 132,834 117,328
Total risk-adjusted assets 3,925,497 3,787,202
Tier I capital 477,180 416,675
Tier II capital 82,054 80,699
Total capital 559,234 497,374
Tier I capital ratio 12.16 % 11.00
Total capital ratio 14.25 13.13
Leverage capital ratio 8.68 8.24
(1) All amounts prior to March 31, 1997 are restated for the
Corporation's January 31, 1997 merger with Salem Trust Bank
which was accounted for as a pooling-of-interests. Merger-
related expense included severance and other employee benefit
costs, costs related to a branch closure, systems conversion
costs and other restructuring and transaction-related
expenses. The after-tax effect of the 1997 merger-related
expense was $792,000.
(2) Non-recurring items:
* During the first quarter of 1997, merger-related expense
was incurred which totaled $792,000 (after-tax) or $.05 per
share.
* During the third quarter of 1996, a tax benefit of
$1,553,000 was recorded for forgiveness of the recapture of
tax bad debt reserves of a former savings bank subsidiary.
Also during the third quarter of 1996, an FDIC special
assessment of $8,400,000 to recapitalize the Savings
Association Insurance Fund was recorded. The after-tax effect
of these transactions was to decrease net income by $3,487,000
or $.22 per share.
* During the fourth quarter of 1996, CCB contested the FDIC
special assessment as originally levied which resulted in a $1
million reduction in the special assessment. The assessment
reduction, net of taxes, totaled $.03 per share for the
quarter.
(3) New York Stock Exchange Symbol: CCB
(4) Average balances exclude the mark-to-market adjustment
for Statement of Financial Accounting Standards No. 115.
(5) Faxed copies of the Corporation's news releases are
available at no charge 24 hours a day, 7 days a week from PR
Newswire's Company News On-Call at 1-800-758-5804. The
automated system will ask for a six-digit code (150641) and
allows a caller to choose from a menu of the Corporation's
news releases. The selected news releases will be faxed
within minutes of request. Alternatively, news releases and
other information regarding the Corporation are posted on the
Internet at http://www.prnewswire.com under CCB Financial
Corporation.
Page 6
CCB FINANCIAL CORPORATION
Average Balances and Net Interest Income Analysis
Three Months Ended March 31, 1997 and 1996
(Taxable Equivalent Basis-In Thousands) (1)
1997
Interest Average
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans and lease financing (2) $ 3,905,349 87,139 9.02 %
U.S. Treasury and agency obligations (3) 935,965 16,090 6.88
States and political subdivision
obligations 82,357 1,822 8.85
Equity and other securities (3) 16,708 288 6.90
Federal funds sold and other
short-term investments 239,840 3,183 5.38
Time deposits in other banks 66,026 852 5.23
Total earning assets (3) 5,246,245 109,374 8.42
Non-earning assets:
Cash and due from banks 140,113
Premises and equipment 68,972
All other assets, net 67,514
Total assets $ 5,522,844
Interest-bearing liabilities:
Savings and time deposits $ 4,147,388 46,664 4.56 %
Short-term borrowed funds 154,043 1,781 4.69
Long-term debt 57,502 948 6.60
Total interest-bearing liabilities 4,358,933 49,393 4.59
Other liabilities and shareholders' equity:
Demand deposits 560,958
Other liabilities 105,096
Shareholders' equity 497,857
Total liabilities and shareholders' equity $ 5,522,844
Net interest income and net interest
margin (4) $ 59,981 4.61 %
Interest rate spread (5) 3.83 %
CCB FINANCIAL CORPORATION
Average Balances and Net Interest Income Analysis, Continued
Three Months Ended March 31, 1997 and 1996
(Taxable Equivalent Basis-In Thousands) (1)
1996
Interest Average
Average Income/ Yield/
Balance Expense Rate
Earning assets:
Loans and lease financing (2) $ 3,477,305 80,374 9.28
U.S. Treasury and agency obligations (3) 910,865 15,152 6.65
States and political subdivision
obligations 76,701 1,796 9.37
Equity and other securities (3) 30,124 535 7.10
Federal funds sold and other
short-term investments 229,589 3,033 5.31
Time deposits in other banks 70,869 884 5.02
Total earning assets (3) 4,795,453 101,774 8.52
Non-earning assets:
Cash and due from banks 159,928
Premises and equipment 69,442
All other assets, net 69,244
Total assets $ 5,094,067
Interest-bearing liabilities:
Savings and time deposits $ 3,878,841 43,800 4.54
Short-term borrowed funds 77,725 867 4.49
Long-term debt 76,072 1,277 6.71
Total interest-bearing liabilities 4,032,638 45,944 4.58
Other liabilities and shareholders' equity:
Demand deposits 505,259
Other liabilities 106,469
Shareholders' equity 449,701
Total liabilities and shareholders' equity $ 5,094,067
Net interest income and net interest
margin (4) 55,830 4.67
Interest rate spread (5) 3.94
(1) The taxable equivalent basis is computed using 35% federal
and 7.50% in 1997 and 35% federal and 7.75% state tax rates in
1996 where applicable.
(2) The average loan and lease financing balances include non-
accruing loans and lease financing. Loan fees of $2,488,000
and $2,908,000 for 1997 and 1996, respectively, are included
in interest income.
(3) The average balances for debt and equity securities
exclude the effect of their mark-to-market adjustment, if any.
(4) Net interest margin is computed by dividing net interest
income by total earning assets.
(5) Interest rate spread equals the earning asset yield minus
the interest-bearing liability rate.