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 11, 1999
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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: (252) 454-4400
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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 11, 1999, Centura Banks, Inc. ("Centura") announced earnings for the
year ended December 31, 1998. Centura's net income for 1998 was $96.9 million,
an increase of 16.6 percent over 1997. Diluted earnings per share increased to
$3.60 compared to $3.15 for 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 11, 1999 By: /s/ Steven Goldstein
Steven Goldstein
Chief Financial Officer
EXHIBIT INDEX
Sequential
Page
Exhibit Description of Exhibit Number
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99 Press release dated January 11, 1999 5
For Immediate Release
January 11, 1999
For more information: Steven J. Goldstein
Centura Bank
(252) 454-8356
sgoldstein@centura.com
CENTURA BANK ANNOUNCES RECORD EARNINGS FOR 1998; DECLARES FIRST QUARTER
1999 DIVIDEND
ROCKY MOUNT, N.C. - Centura Banks Inc.(NYSE: CBC) today reported record
profitability for 1998, earning $96.9 million compared to 1997 earnings of $83.1
million, an increase of 16.6 percent. On a diluted per share basis, Centura
earned $3.60 in 1998 as compared to $3.15 for the prior year. Net income for the
fourth quarter 1998 was $25.2 million, an increase of 7.2 percent over the same
period in 1997. Diluted earnings per share for the fourth quarter 1998 were 93
cents compared to 89 cents for the fourth quarter of 1997. Core balance sheet
growth remained strong in 1998, with loans increasing to $5.4 billion for
year-end 1998, 17.8 percent higher than 1997. Net charge-offs for 1998 were 0.28
percent of average loans as compared with 0.25 percent for the prior year.
Year-end deposits rose 5.9 percent in 1998 to $5.7 billion, primarily in
transaction and money market type products. Noninterest income growth of 24.1
percent in 1998 was led by insurance and brokerage commissions, and mortgage and
deposit-related fees.
"We are very pleased with our 1998 results, which reflect the
continuing execution of the strategy adopted by Centura in 1993," said Cecil W.
Sewell, Centura's chairman and CEO. "Centura invested heavily between 1993 and
1997 in new technology, expanded products, and new delivery channels, and 1998
represents the first full year of leveraging that investment. The results show
that understanding our customers and providing a broad range of financial
services delivered through traditional branches, the internet, the Centura
Highway call center, and a dedicated sales force of financial service officers
translates into better service for our customers and more profitable banking
relationships."
Centura declared a cash dividend on January 11, 1999 of 29 cents per
share, payable on March 16, 1999, to shareholders of record on February 26,
1999. On January 7, 1999, Centura announced the acquisition of the Charlotte,
NC-based Capital Advisors, a privately held commercial mortgage banking company.
In 1998 Centura opened or acquired 22 financial services offices,
including eleven full-service offices opened in Hannaford supermarkets located
in North Carolina and the Hampton Roads region of Virginia. Early in 1998,
Centura finalized the acquisition of its second insurance agency, Raleigh-based
Moore & Johnson, positioning Centura Insurance Services as one of the largest
independent insurance agencies in North Carolina. In March of 1998, Centura
finalized its acquisition of South Carolina's Pee Dee State Bank, marking the
company's strategically significant entry into the South Carolina market.
In October 1998, Centura announced that it would acquire First Coastal
Bankshares, Inc., based in Virginia Beach, Virginia. The addition of 17 First
Coastal financial offices
represents a significant expansion for Centura, which
currently operates nine financial offices in the Hampton Roads region of
Virginia.
With assets of $8.2 billion, Centura provides a complete line of
banking, investment, insurance, and trust services to individuals and businesses
in North Carolina, South Carolina, and the Hampton Roads region of Virginia.
Services are provided through 210 financial centers and over 300 ATMs; the
Centura Highway telephone banking center; Centura's Internet site; and
Quicken(R), QuickBooks(R), Microsoft(R) Money and Quicken(R) Lite (formerly
BankNow(TM)), the leading personal finance software packages.
# # #
FINANCIAL HIGHLIGHTS
CENTURA BANKS, INC. AND SUBSIDIARIES
Three Months Ended December 31, Year Ended December 31,
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(Dollars in thousands, except per share data) 1998 1997 Change 1998 1997 Change
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EARNINGS
Interest income $ 147,732 $ 137,136 7.7 % $ 575,665 $ 515,089 11.8 %
Interest expense 70,116 66,041 6.2 276,347 247,184 11.8
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Net interest income 77,616 71,095 9.2 299,318 267,905 11.7
Provision for loan losses 4,075 3,849 5.9 15,144 13,418 12.9
Noninterest income 35,732 32,215 10.9 136,456 109,974 24.1
Noninterest expense 70,449 65,131 8.2 273,445 238,983 14.4
Income taxes 13,619 10,826 25.8 50,314 42,420 18.6
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Net income $ 25,205 $ 23,504 7.2 % $ 96,871 $ 83,058 16.6 %
=============================================================================================================================
Net interest income, taxable equivalent $ 79,448 $ 73,000 8.8 % $ 306,618 $ 275,632 11.2 %
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PER COMMON SHARE
Earnings per share-basic $ 0.95 $ 0.91 4.4 % $ 3.67 $ 3.22 14.0 %
Earnings per share-diluted 0.93 0.89 4.5 3.60 3.15 14.3
Cash dividends paid 0.29 0.27 7.4 1.14 1.06 7.5
Book value 23.66 20.82 13.6 23.66 20.82 13.6
Closing market price 74.3750 69.0000 7.8 74.3750 69.0000 7.8
FINANCIAL RATIOS
Return on average assets 1.25 % 1.33 % (8)bp 1.28 % 1.26 % 2 bp
Return on average shareholders' equity 15.98 17.53 (155) 16.30 16.28 2
Average equity to average assets 7.83 7.58 25 7.84 7.73 11
AVERAGE BALANCES
Assets $ 7,993,700 $ 7,016,355 13.9 % $ 7,583,932 $ 6,601,084 14.9 %
Earning assets 7,291,076 6,416,636 13.6 6,907,055 6,055,606 14.1
Loans 5,168,833 4,562,210 13.3 4,932,935 4,309,064 14.5
Investment securities 2,087,493 1,824,878 14.4 1,944,808 1,715,801 13.3
Noninterest-bearing deposits 888,682 783,938 13.4 837,850 717,506 16.8
Core deposits 5,076,659 4,784,855 6.1 4,974,646 4,512,153 10.2
Total deposits 5,586,720 5,240,681 6.6 5,479,824 4,899,453 11.8
Interest-bearing liabilities 6,342,211 5,603,768 13.2 6,031,103 5,286,057 14.1
Shareholders' equity 625,863 531,935 17.7 594,335 510,330 16.5
PERIOD END BALANCES
Assets $ 8,235,891 $ 7,125,430 15.6 % $ 8,235,891 $ 7,125,430 15.6 %
Earning assets 7,516,835 6,458,063 16.4 7,516,835 6,458,063 16.4
Loans 5,402,984 4,586,582 17.8 5,402,984 4,586,582 17.8
Investment securities 2,074,504 1,828,056 13.5 2,074,504 1,828,056 13.5
Noninterest-bearing deposits 946,872 816,475 16.0 946,872 816,475 16.0
Core deposits 5,165,832 4,892,847 5.6 5,165,832 4,892,847 5.6
Total deposits 5,680,692 5,364,925 5.9 5,680,692 5,364,925 5.9
Shareholders' equity 629,843 538,336 17.0 629,843 538,336 17.0
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bp Change is measured as difference in basis points.
OTHER FINANCIAL DATA
CENTURA BANKS, INC. AND SUBSIDIARIES
Three Months Ended December 31, Year Ended December 31,
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(Dollars in thousands) 1998 1997 Change 1998 1997 Change
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(C>
SHARES OUTSTANDING
Average basic 26,587,538 25,854,971 2.8 % 26,421,073 25,798,324 2.4 %
Average diluted 27,069,524 26,413,005 2.5 26,922,791 26,331,392 2.2
Outstanding at period end 26,618,931 25,862,375 2.9 26,618,931 25,862,375 2.9
COMPOSITION RATIOS *
Earning assets to total assets 91.21 % 91.45 % (24)bp 91.07 % 91.74 % (67)bp
Loans to earning assets 70.89 71.10 (21) 71.42 71.16 26
Interest-bearing liabilities to earning assets 86.99 87.33 (34) 87.32 87.29 3
Loans to total deposits 92.52 87.05 547 90.02 87.95 207
Noninterest-bearing deposits to total deposits 15.91 14.96 95 15.29 14.64 65
ALLOWANCE FOR LOAN LOSSES
Beginning balance $ 67,105 $ 62,282 7.7 % $ 64,279 $ 58,715 9.5 %
Provision for loan losses 4,075 3,849 5.9 15,144 13,418 12.9
Allowance of acquired financial institutions - 723 (100.0) 2,068 3,133 (34.0)
Charge-offs (4,286) (3,898) 10.0 (17,320) (14,425) 20.1
Recoveries 627 1,323 (52.6) 3,350 3,438 (2.6)
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Net charge-offs (3,659) (2,575) 42.1 (13,970) (10,987) 27.2
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Ending balance $ 67,521 $ 64,279 5.0 % $ 67,521 $ 64,279 5.0 %
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Net charge-offs to average loans 0.28 % 0.22 % 6 bp 0.28 % 0.25 % 3 bp
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COMPOSITION OF RISK ASSETS
Nonperforming loans $ 29,134 $ 23,722 22.8 %
Foreclosed property 3,931 4,155 (5.4)
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Nonperforming assets $ 33,065 $ 27,877 18.6 %
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ASSET QUALITY RATIOS **
Nonperforming assets to:
Loans and foreclosed property 0.61 % 0.61 % - bp
Total assets 0.40 0.39 1
Nonperforming loans to total loans 0.54 0.52 2
Allowance for loan losses to total loans 1.25 1.40 (15)
Allowance for loan losses to nonperforming loans 2.32 x 2.71 x (0.39)x
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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 SUBSIDIARIES
Three Months Ended December 31, Year Ended December 31,
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As a Percent of As a Percent of
Average Assets * Average Assets *
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(Dollars in thousands) 1998 1997 Change 1998 1997 1998 1997 Change 1998 1997
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NONINTEREST INCOME
Service charges on deposit accounts $ 13,230 $ 11,115 19.0 % 0.66 % 0.63 % $ 48,139 $ 40,703 18.3 % 0.63 % 0.62 %
Credit card and related fees 2,187 1,922 13.8 0.11 0.11 8,114 6,643 22.1 0.11 0.10
Insurance and brokerage commissions 4,595 3,945 16.5 0.23 0.22 19,577 14,031 39.5 0.26 0.21
Other service charges, commissions and fees 2,691 2,245 19.9 0.13 0.13 10,286 7,925 29.8 0.14 0.12
Fees for trust services 2,404 2,007 19.8 0.12 0.11 9,304 7,737 20.3 0.12 0.12
Mortgage income 5,173 3,300 56.8 0.26 0.19 17,689 11,568 52.9 0.23 0.18
Negative goodwill amortization 334 334 - 0.02 0.02 1,337 1,337 - 0.02 0.02
Operating lease fees, net 2,034 1,391 46.2 0.10 0.08 7,498 4,625 62.1 0.10 0.07
Other noninterest income 3,060 5,855 (47.7) 0.14 0.32 13,918 15,269 (8.9) 0.18 0.23
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Noninterest income, excluding securities
transactions 35,708 32,114 11.2 1.77 1.81 135,862 109,838 23.7 1.79 1.67
Securities gains, net 24 101 (76.2) - 0.01 594 136 336.8 0.01 -
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Total noninterest income $ 35,732 $ 32,215 10.9 % 1.77 % 1.82 % $ 136,456 $ 109,974 24.1 % 1.80 % 1.67 %
====================================================================================================================================
NONINTEREST EXPENSE
Salaries and overtime $ 29,822 $ 25,523 16.8 % 1.48 % 1.44 % $ 110,351 $ 92,508 19.3 % 1.46 % 1.40 %
Fringe benefits and other personnel costs 5,713 4,581 24.7 0.28 0.26 23,763 21,117 12.5 0.31 0.32
Occupancy 4,119 3,397 21.3 0.20 0.19 15,913 13,796 15.4 0.21 0.21
Equipment 5,163 5,712 (9.6) 0.26 0.32 20,874 21,632 (3.5) 0.28 0.33
Foreclosed real estate losses and related
operating expense 241 386 (37.6) 0.01 0.02 1,171 1,373 (14.7) 0.02 0.02
Marketing 1,617 2,881 (43.9) 0.08 0.16 8,432 9,080 (7.1) 0.11 0.14
Fees for outsourced services 3,588 2,331 53.9 0.18 0.13 13,058 8,219 58.9 0.17 0.12
Professional fees 2,914 4,684 (37.8) 0.14 0.27 12,750 15,914 (19.9) 0.17 0.24
Other administrative 2,487 2,406 3.4 0.12 0.14 9,487 8,555 10.9 0.13 0.13
FDIC insurance 328 344 (4.7) 0.02 0.02 1,369 1,304 5.0 0.02 0.02
Deposit intangible and goodwill amortization 2,264 2,073 9.2 0.11 0.12 8,948 6,520 37.2 0.12 0.10
Office supplies, postage and telephone 4,936 4,185 18.0 0.25 0.24 19,976 16,702 19.6 0.26 0.25
Other operating 7,257 6,628 9.5 0.37 0.37 27,353 22,263 22.9 0.35 0.34
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Total noninterest expense $ 70,449 $ 65,131 8.2 % 3.50 % 3.68 % $ 273,445 $ 238,983 14.4 % 3.61 % 3.62 %
====================================================================================================================================
OTHER PERFORMANCE RATIOS
Pretax operating profit margin ** 35.30 % 34.44 % 86 bp 34.87 % 34.54 % 33 bp
Efficiency ratio *** 61.16 % 61.90 % (74)bp 61.72 % 61.98 % (26)bp
Net interest income analysis-taxable equivalent:
Selected average yields/rates:
Loans 8.82 % 9.33 % (51)bp 9.13 % 9.43 % (30)bp
Taxable securities 6.48 6.70 (22) 6.59 6.64 (5)
Tax-exempt securities 8.69 9.06 (37) 8.84 8.93 (9)
Short-term investments 4.78 4.99 (21) 5.24 5.36 (12)
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Interest-earning assets 8.14 8.58 (44) 8.41 8.64 (23)
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Total interest-bearing deposits 4.08 4.38 (30) 4.27 4.40 (13)
Borrowed funds 4.75 5.32 (57) 5.10 5.30 (20)
Long-term debt 6.29 6.64 (35) 6.44 6.68 (24)
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Total interest-bearing liabilities 4.37 4.66 (29) 4.56 4.68 (12)
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Interest rate spread 3.77 3.92 (15) 3.85 3.96 (11)
Net interest margin 4.33 4.51 (18) 4.41 4.56 (15)
====================================================================================================================================
bp Change is measured as difference in basis points.
* Data presented is annualized.
** Sum of income before taxes plus the taxable equivalent adjustment divided
by the sum of taxable equivalent net interest income plus noninterest income.
*** Noninterest expense divided by sum of taxable equivalent net interest
income plus noninterest income.
QUARTERLY FINANCIAL TRENDS
CENTURA BANKS, INC. AND SUBSIDIARIES
1998 1997
------------------------------------------------------------- 4th Qtr 98
Fourth Third Second First Fourth vs.
(Dollars in thousands, except per share data) Quarter Quarter Quarter Quarter Quarter 3rd Qtr 98
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FINANCIAL SUMMARY *
Assets $ 7,993,700 $ 7,630,774 $ 7,530,503 $ 7,171,199 $ 7,016,355 4.8 %
Earning assets 7,291,076 6,951,132 6,839,222 6,538,033 6,416,636 4.9
Loans 5,168,833 4,991,800 4,905,005 4,659,863 4,562,210 3.5
Investment securities 2,087,493 1,933,096 1,909,105 1,847,024 1,824,878 8.0
Total deposits 5,586,720 5,560,743 5,439,886 5,328,216 5,240,681 0.5
Interest-bearing liabilities 6,342,211 6,044,908 6,000,169 5,730,250 5,603,768 4.9
Shareholders' equity 625,863 606,270 584,778 559,568 531,935 3.2
Total market capitalization (period end) 1,979,783 1,673,297 1,658,538 1,892,382 1,784,504 18.3
Net income 25,205 25,135 24,054 22,477 23,504 0.3
ROFITABILITY/PERFORMANCE SUMMARY *
Pretax operating profit margin *** 35.30 % 34.94 % 34.66 % 34.52 % 34.44 % 36 bp
Efficiency ratio + 61.16 61.52 62.02 62.22 61.90 (36)
Net interest margin 4.33 4.48 4.43 4.43 4.51 (15)
Return on average assets 1.25 1.31 1.28 1.27 1.33 (6)
Return on average equity 15.98 16.45 16.50 16.29 17.53 (47)
Average equity to average assets 7.83 7.95 7.77 7.80 7.58 (12)
PER SHARE SUMMARY
Earnings per share - basic $ 0.95 $ 0.95 $ 0.91 $ 0.87 $ 0.91 - %
Earnings per share - diluted 0.93 0.93 0.89 0.85 0.89 -
Cash dividends paid 0.29 0.29 0.29 0.27 0.27 -
Book value per share 23.66 23.28 22.22 21.62 20.82 1.6
Closing market price 74.3750 63.0000 62.5000 71.2500 69.0000 18.1
KEY INTANGIBLE ASSETS **
Goodwill $ 102,858 $ 104,671 $ 105,204 $ 107,293 $ 106,108 (1.7)%
Mortgage servicing rights 33,274 31,197 29,917 28,147 28,238 6.7
ASSET QUALITY SUMMARY **
Nonperforming assets $ 33,065 $ 32,084 $ 33,418 $ 33,199 $ 27,877 3.1 %
Allowance for loan losses 67,521 67,105 66,991 66,828 64,279 0.6
Nonperforming assets to total assets 0.40 % 0.41 % 0.44 % 0.44 % 0.39 % (1)bp
Allowance for loan losses to period end loans 1.25 1.34 1.36 1.38 1.40 (9)
Allowance for loan losses to average loans 1.31 1.34 1.37 1.43 1.41 (3)
Net charge-offs to average loans 0.28 0.31 0.28 0.25 0.22 (3)
====================================================================================================================================
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.
*** Sum of income before taxes plus the taxable equivalent adjustment
divided by the sum of taxable equivalent net interest income plus
noninterest income.
+ Noninterest expense divided by sum of taxable equivalent net interest
income plus noninterest income.