SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported): January 6, 1997
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CENTURA BANKS, INC.
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(Exact name of registrant as specified in charter)
North Carolina 1-10646 56-1688522
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(State of Incorporation)(Commission File Number)(IRS Employer Identification No.)
134 North Church Street, Rocky Mount, North Carolina 27804
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(Address of principal executive office) (Zip code)
Registrant's telephone number, including area code: (919) 977-4400
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N/A
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(Former name or former address, if changed since last report)
Exhibit Index on Page 4.
Item 5. Other Events:
On January 6, 1997, Centura Banks, Inc. ("Centura") announced earnings for the
year ended December 31, 1996. Centura's net income increased 12 percent to $72.4
million, excluding a one-time special assessment on deposits. Fully diluted
earnings per share, without the assessment, rose to $2.77 per share compared to
$2.46 the prior year. A press release is attached as Exhibit 99.
Item 7. Financial statements and Exhibits.
The exhibit listed in the Exhibit Index is filed herewith as part of this
Current Report on Form 8-K.
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.
CENTURA BANKS, INC.
Registrant
Date: January 6, 1997 By: /s/ Frank L. Pattillo
Frank L. Pattillo
Chief Financial Officer
EXHIBIT INDEX
Sequential
Page
Exhibit Description of Exhibit Number
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99 Press release dated January 6, 1997 5
For Immediate Release
January 6, 1997
For more information, contact: Ann K. Lawson
Principal Accounting Officer
(919)977-8285
alawson@centura.com
CENTURA BANKS ANNOUNCES HIGHER EARNINGS FOR 1996
ROCKY MOUNT, N.C. - Centura Banks Inc. (NYSE:CBC) announced today that
net income for the year 1996 rose 12 percent to $72.4 million, excluding a
one-time special assessment on deposits. Fully diluted earnings per share,
without the assessment, rose to $2.77 per share compared to $2.46 the prior
year. For the fourth quarter fully diluted earnings per share was 70 cents.
The special charge on deposits, taken during the third quarter, was
assessed by the federal government on financial institutions that have acquired
thrift deposits in recent years in order to recapitalize the Savings Association
Insurance Fund (SAIF). Including the assessment, Centura's net income rose 5
percent to $68 million, or $2.61 per fully diluted share.
"This has been a year of tremendous growth and progress," said Centura
President Cecil W. Sewell Jr., who becomes chairman and CEO in February when
current Chairman Robert R. Mauldin retires. "It is especially rewarding to see
earnings growth like this in light of our continued investments in new sources
of revenue and technology."
Sewell cited several factors for the positive performance, including
continued growth in securities and insurance activities, new ventures into
consumer finance and technology leasing, and successful introductions of
supermarket banking, online banking and a new line of checking accounts.
Noninterest income for 1996 increased 26 percent to $101 million, led
by brokerage, insurance and deposit fees, income from mortgage activities and
higher contributions from the trust division. Loan growth was strong during the
first half of the year and ended at $4.1 billion, 5 percent higher than 1995.
Deposits rose 7 percent to $4.7 billion, while the net interest margin remained
stable.
Excluding the special assessment, return on assets for the year was
1.22 percent, and return on equity was 15.92 percent. Including the assessment,
return on assets was 1.14 percent, and return on equity was 15.02 percent. Asset
quality remained in line with industry standards, even as the bank charged off
several problem loans during the fourth quarter. Net charge-offs were .18
percent of total loans, and nonperforming loans were .47 percent of total loans.
"In 1997, we expect these positive trends to accelerate as we make
greater use of our extensive profitability data and sophisticated database
marketing techniques combined with aggressive advertising and promotion, an
expanding supermarket and ATM network and a more streamlined, focused sales
organization," Sewell said. "In addition, we are implementing plans to improve
processes and greatly enhance efficiency in critical areas of the company."
Centura repurchased approximately 1.2 million shares of its own stock
in 1996, primarily in connection with several acquisitions. During the year,
Centura acquired First Commercial Holding Corp. in Asheville, N.C., First
Community Bank in Gastonia, N.C., FirstSouth Bank in Burlington, N.C., CLG
Leasing in Raleigh, N.C., and purchased a 49 percent interest in First
Greensboro Home Equity in Greensboro, N.C.
With assets of $6.3 billion, Centura provides a complete line of
banking, investment, insurance and trust services to individuals and businesses
throughout North Carolina. Centura provides financial services through: 166
financial stores, including 11 supermarkets; more than 255 ATMs, including every
N.C. Wal-Mart and Sam's store; the Centura Highway telephone center; Quicken,
QuickBooks and Microsoft Money software and America Online. More information
about Centura is available on the World Wide Web at http://www.centura.com.
###
FINANCIAL HIGHLIGHTS
CENTURA BANKS, INC. AND SUBSIDIARY
3 Months 3 Months Year Year
Ended Ended Ended Ended
Dec. 31 Dec. 31 Dec. 31 Dec. 31
(In thousands, except share and per share data) 1996 1995 Change 1996 1995 Change
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EARNINGS
Interest income $ 123,095 $ 113,539 8.4% $ 469,760 $ 417,635 12.5%
Interest expense 57,011 54,749 4.1 219,676 192,990 13.8
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Net interest income 66,084 58,790 12.4 250,084 224,645 11.3
Provision for loan losses 2,746 1,968 39.5 9,596 7,904 21.4
Noninterest income 27,303 23,381 16.8 100,847 80,110 25.9
Noninterest expense 61,860 54,806 12.9 233,981 195,777 19.5
Income taxes 10,246 8,797 16.5 39,203 36,421 7.6
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Net income $ 18,535 $ 16,600 11.7% $ 68,151 $ 64,653 5.4%
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Net interest income, taxable equivalent $ 67,738 $ 60,165 12.6% $ 256,109 $ 229,827 11.4%
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PER COMMON SHARE
Net income-primary $ 0.70 $ 0.62 12.9% $ 2.61 $ 2.46 6.1%
Net income-fully diluted 0.70 $ 0.62 12.9 2.61 2.46 6.1
Cash dividends paid 0.25 0.23 8.7 1.00 0.85 17.6
Book value 18.51 17.19 7.7 18.51 17.19 7.7
Closing market price 44.625 35.125 27.0 44.625 35.125 27.0
FINANCIAL RATIOS
Return on average assets 1.19 1.18% 1 bp 1.14% 1.25% (11)bp
Return on average shareholders' equity 15.61 14.61 100 15.02 15.22 (20)
Equity to assets (average) 7.62 8.05 (43) 7.62 8.21 (59)
AVERAGE BALANCES
Assets $ 6,197,670 $ 5,597,069 10.7% $ 5,956,290 $ 5,177,851 15.0%
Earning assets 5,703,321 5,140,771 10.9 5,484,974 4,753,846 15.4
Loans 4,181,963 3,866,578 8.2 4,014,391 3,638,129 10.3
Investment securities 1,491,008 1,239,565 20.3 1,436,215 1,082,695 32.7
Noninterest-bearing deposits 690,111 614,168 12.4 647,245 571,606 13.2
Core deposits 4,368,319 3,871,233 12.8 4,101,773 3,646,473 12.5
Total deposits 4,723,099 4,346,241 8.7 4,505,449 4,035,623 11.6
Interest-bearing liabilities 4,944,155 4,443,208 11.3 4,765,846 4,098,579 16.3
Shareholders' equity 472,484 450,692 4.8 453,746 424,877 6.8
PERIOD END BALANCES
Assets $ 6,293,972 $ 5,784,548 8.8% $ 6,293,972 $ 5,784,548 8.8%
Earning assets 5,720,001 5,273,536 8.5 5,720,001 5,273,536 8.5
Loans 4,109,454 3,898,436 5.4 4,109,454 3,898,436 5.4
Investment securities 1,577,880 1,328,625 18.8 1,577,880 1,328,625 18.8
Noninterest-bearing deposits 721,029 656,592 9.8 721,029 656,592 9.8
Core deposits 4,386,616 3,948,325 11.1 4,386,616 3,948,325 11.1
Total deposits 4,733,069 4,443,791 6.5 4,733,069 4,443,791 6.5
Shareholders' equity 475,235 443,311 7.2 475,235 443,311 7.2
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bp Change is measured as difference in basis points.
OTHER FINANCIAL DATA
CENTURA BANKS, INC. AND SUBSIDIARY
3 Months 3 Months Year Year
Ended Ended Ended Ended
Dec. 31 Dec. 31 Dec. 31 Dec. 31
(In thousands, except share data) 1996 1995 Change 1996 1995 Change
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SHARES OUTSTANDING
Average primary 26,304,896 26,641,134 (1.3)% 26,117,437 26,262,643 (0.6)%
Average fully diluted 26,308,483 26,668,066 (1.3) 26,139,034 26,324,791 (0.7)
Outstanding 25,668,524 25,785,370 (0.5) 25,668,524 25,785,370 (0.5)
COMPOSITION RATIOS*
Earning assets to assets 92.02% 91.85% 17 bp 92.09% 91.81% 28 bp
Loans to earning assets 73.33 75.21 (188) 73.19 76.53 (334)
Interest-bearing liabilities to earning assets 86.69 86.43 26 86.89 86.22 67
Loans to total deposits 88.54 88.96 (42) 89.10 90.15 (105)
Noninterest-bearing deposits to total deposits 14.61 14.13 48 14.37 14.16 21
ALLOWANCE FOR LOAN LOSSES
Beginning balance $ 60,329 $ 55,019 9.7% $ 55,070 $ 48,164 14.3%
Provision for loan losses 2,746 1,968 39.5 9,596 7,904 21.4
Allowance of acquired financial institutions ---- ---- ---- 1,240 3,460 (64.2)
Charge-offs (4,995) (3,389) 47.4 (10,408) (8,306) 25.3
Recoveries 635 1,472 (56.9) 3,217 3,848 (16.4)
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Net charge-offs (4,360) (1,917) 127.4 (7,191) (4,458) 61.3
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Ending balance $ 58,715 $ 55,070 6.6% $ 58,715 $ 55,070 6.6%
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Net charge-offs to average loans 0.41% 0.20% 21 bp 0.18% 0.12% 6 bp
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COMPOSITION OF RISK ASSETS
Nonaccrual loans $ 18,713 $ 18,321 2.1%
Restructured loans 497 954 (47.9)
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Nonperforming loans 19,210 19,275 (0.3)
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Foreclosed property 3,663 2,872 27.5
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Nonperforming assets $ 22,873 $ 22,147 3.3%
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ASSET QUALITY RATIOS**
Nonperforming assets to:
Loans and foreclosed property 0.56% 0.57% (1)bp
Total assets 0.36 0.38 (2)
Nonperforming loans to total loans 0.47 0.49 (2)
Allowance for loan losses to total loans 1.43 1.41 2
Allowance for loan losses to nonperforming loans 3.06x 2.86x 19
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bp Change is measured as difference in basis points.
*Balance sheet amounts used in calculations are based on average balances.
**Balance sheet amounts used in calculations are based on period end balances.
OTHER FINANCIAL DATA, continued
CENTURA BANKS, INC. AND SUBSIDIARY
3 Months 3 Months Year Year
Ended Ended As a Percent of Ended Ended As a Percent of
Dec. 31 Dec. 31 Average Assets# Dec. 31 Dec. 31 Average Assets
(Dollars in thousands) 1996 1995 Change 1996 1995 1996 1995 Change 1996 1995
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NONINTEREST INCOME
Service charges on deposit accounts $ 9,401 $ 8,349 12.6% 0.60% 0.59% $ 34,758 $ 29,686 17.1% 0.58% 0.57%
Credit card and related fees 1,391 1,167 19.2 0.09 0.08 4,979 4,220 18.0 0.08 0.08
Insurance & brokerage commissions 2,948 2,080 41.7 0.19 0.15 11,097 7,013 58.2 0.19 0.14
Other service charges, commissions and fees 1,947 898 116.8 0.12 0.06 5,926 3,403 74.1 0.10 0.07
Fees for trust services 1,900 1,527 24.4 0.12 0.11 6,841 6,108 12.0 0.11 0.12
Mortgage income 2,591 2,597 (0.2) 0.17 0.18 11,486 7,104 61.7 0.19 0.14
Negative goodwill amortization 334 334 0.0 0.02 0.02 1,337 1,337 0.0 0.02 0.03
Operating lease fees 3,226 3,495 (7.7) 0.21 0.25 12,745 11,779 8.2 0.21 0.23
Other noninterest income 3,449 2,935 17.5 0.23 0.22 9,880 10,074 (1.9) 0.18 0.18
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Noninterest income, excluding securities
transactions 27,187 23,382 16.3 1.75 1.66 99,049 80,724 22.7 1.66 1.56
Securities gains (losses), net 116 (1) --- 0.01 0.00 1,798 (614) (392.8) 0.03 (0.01)
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Total noninterest income $27,303 $ 23,381 16.8% 1.76% 1.66% $100,847 $ 80,110 25.9% 1.69% 1.55%
====================================================================================================================================
NONINTEREST EXPENSE
Salaries and overtime $24,115 $ 21,126 14.2% 1.55% 1.50% $ 88,411 $ 77,039 14.8% 1.48% 1.49%
Fringe benefits and other personnel costs 4,892 4,993 (2.0) 0.31 0.35 21,256 18,747 13.4 0.36 0.36
Occupancy 3,209 3,020 6.3 0.21 0.21 12,657 11,732 7.9 0.21 0.23
Equipment 5,437 4,059 34.0 0.35 0.29 19,556 14,478 35.1 0.33 0.28
Foreclosed real estate losses and related
operating expense 299 317 (5.7) 0.02 0.02 756 682 10.9 0.01 0.01
Marketing 2,730 1,613 69.3 0.18 0.11 7,549 6,195 21.9 0.13 0.12
Professional fees 5,453 3,325 64.0 0.35 0.24 14,589 9,432 54.7 0.24 0.18
Other administrative 4,649 2,345 98.3 0.30 0.17 8,544 7,930 7.7 0.14 0.15
FDIC insurance (4) 1,200 --- 0.00 0.09 10,197 5,727 78.1 0.17 0.11
Deposit intangible and goodwill amortization 1,343 1,210 11.0 0.09 0.09 5,034 4,148 21.4 0.08 0.08
Office supplies, postage and telephone 4,243 3,724 13.9 0.27 0.26 16,188 13,452 20.3 0.27 0.26
Depreciation on leased equipment 1,357 2,373 (42.8) 0.09 0.17 7,944 7,192 10.5 0.13 0.14
Other operating 4,137 5,501 (24.8) 0.25 0.38 21,300 19,023 12.0 0.38 0.37
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Total noninterest expense $61,860 $ 54,806 12.9% 3.97% 3.88% $233,981 $195,777 19.5% 3.93% 3.78%
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OTHER PERFORMANCE RATIOS
Pretax operating profit margin + 32.02% 32.04% (2)bp 31.76% 34.28% (252)bp
Efficiency ratio*** 65.09% 65.60% (51)bp 65.55% 63.17% 238 bp
Net interest income analysis-taxable equivalent:
Selected average yields/rates:
Loans 9.34% 9.56% (22)bp 9.45% 9.60% (15)bp
Taxable securities 6.65 6.51 14 6.48 6.43 5
Tax-exempt securities 8.99 8.39 60 8.87 8.70 17
Short-term investments 5.43 6.36 (93) 5.20 6.49 (129)
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Interest-earning assets 8.63 8.82 (19) 8.67 8.88 (21)
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Total interest-bearing deposits 4.35 4.67 (32) 4.38 4.44 (6)
Borrowed funds 5.25 5.71 (46) 5.17 5.80 (63)
Long-term debt 6.47 6.43 4 6.32 6.64 (32)
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Total interest-bearing liabilities 4.59 4.89 (30) 4.61 4.71 (10)
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Interest rate spread 4.04 3.93 11 4.06 4.17 (11)
Net interest margin 4.66 4.60 6 4.66 4.82 (16)
====================================================================================================================================
bp Change is measured as difference in basis points.
*** Noninterest expense divided by sum of taxable equivalent net interest income plus noninterest income.
+ Sum of income before taxes plus the taxable equivalent adjustment divided by the sum of taxable equivalent
net interest income plus noninterest income.
# Data presented is annualized.
QUARTERLY FINANCIAL TRENDS
CENTURA BANKS, INC. AND SUBSIDIARY
1996 1995
--------------------------------------------------------- ----------- 4th Qtr 96
Fourth Third Second First Fourth vs.
(Dollars in thousands) Quarter Quarter Quarter Quarter Quarter 3rd Qtr 96
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FINANCIAL SUMMARY *
Assets $ 6,197,670 $ 6,024,327 $ 5,848,330 $ 5,751,434 $ 5,597,069 2.9%
Earning assets 5,703,321 5,544,087 5,384,075 5,305,364 5,140,771 2.9
Loans 4,181,963 4,097,846 3,954,978 3,820,022 3,866,578 2.1
Investment securities 1,491,008 1,407,955 1,395,395 1,450,207 1,239,565 5.9
Total deposits 4,723,099 4,592,544 4,348,934 4,353,866 4,346,241 2.8
Interest-bearing liabilities 4,944,155 4,813,779 4,692,359 4,610,606 4,443,208 2.7
Stockholders' equity 472,484 457,072 438,358 446,830 450,692 3.4
Total market capitalization (period end) 1,145,458 1,002,912 925,033 938,709 905,711 14.2
Net income 18,535 14,716 17,259 17,641 16,600 26.0
PROFITABILITY/PERFORMANCE SUMMARY *
Pretax operating profit margin + 32.02% 26.96% 33.53% 34.77% 32.04% 506 bp
Efficiency ratio *** 65.09 70.38 63.71 62.80 65.60 (529)
Net interest margin # 4.66 4.61 4.58 4.51 4.60 5
Return on average assets # 1.19 0.97 1.19 1.23 1.18 22
Return on average equity # 15.61 12.81 15.84 15.88 14.61 280
Equity to assets (average) 7.62 7.59 7.50 7.77 8.05 3
PER SHARE SUMMARY
Earnings per share - primary $ 0.70 $ 0.57 $ 0.67 $ 0.62 $ 0.62 22.8%
Earnings per share - fully diluted 0.70 0.57 0.67 0.67 0.62 22.8
Cash dividends paid 0.25 0.25 0.25 0.25 0.23 0.0
Book value per share 18.51 18.04 17.27 17.43 17.19 2.6
Closing market price 44.625 38.625 36.750 36.750 35.125 15.5
KEY INTANGIBLE ASSETS **
Goodwill $ 64,411 $ 66,348 $ 50,599 $ 51,584 $ 52,590 (2.9)%
Deposit base premium 2,401 2,742 2,896 3,050 3,203 (12.4)
Capitalized excess servicing 7,162 7,110 6,905 6,543 6,367 0.7
Capitalized mortgage servicing rights 13,884 12,602 10,209 9,579 8,021 10.2
ASSET QUALITY SUMMARY **
Nonperforming assets $ 22,873 $ 20,398 $ 22,466 $ 21,104 $ 22,147 12.1%
Allowance for loan losses 58,715 60,329 58,011 56,483 55,070 (2.7)
Nonperforming assets to total assets 0.36% 0.33% 0.38% 0.36% 0.38% 3 bp
Allowance for loan losses to loans 1.43 1.43 1.44 1.45 1.41 (0)
Net charge-offs to average loans # 0.41 0.13 0.09 0.07 0.20 28
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bp Change is measured as difference in basis points.
* Balance sheet amounts are based on average balances unless otherwise
noted. ** Balance sheet amounts are based on period end balances unless
otherwise noted.
***Noninterest expense divided by sum of noninterest income plus net interest
income, taxable equivalent basis. + Sum of income before taxes plus the
taxable equivalent adjustment divided by the sum of taxable equivalent
net interest income plus noninterest income.