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): April 7, 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 April 7, 1999, Centura Banks, Inc. ("Centura") announced earnings for
the three months ended March 31, 1999. Centura reported net income of $0.71 per
diluted share for the first quarter. Earnings for the first quarter included
merger related and restructuring charges totaling $8.4 million incurred as a
result of the merger with First Coastal Bankshares, Inc. The merger with First
Coastal was completed on March 26, 1999.
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: April 7, 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 April 7, 1999 5
For Immediate Release
April 7, 1999
For more information: Steven J. Goldstein
Chief Financial Officer
Centura Banks, Inc.
(252) 454-8356
sgoldstein@centura.com
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CENTURA BANKS, INC. ANNOUNCES FIRST QUARTER RECURRING
EARNINGS OF 94 CENTS PER SHARE
ROCKY MOUNT, N.C. - Centura Banks, Inc. (NYSE: CBC) today announced record
earnings of 94 cents per diluted share for the first quarter of 1999,
excluding both the financial results from First Coastal Bankshares, Inc. ("First
Coastal"), and merger-related expenses. The merger with First Coastal was
completed on March 26, 1999 and was accounted for as a pooling-of-interests.
For the quarter ended March 31, 1999, recurring earnings totaled $25.5
million, compared with $22.5 million, or 85 cents per diluted share, a year
earlier.
"One of the highlights of the quarter was the completion of our merger with
First Coastal," said Cecil W. Sewell, Centura chairman and chief executive
officer."The addition of First Coastal adds 18 financial stores and strengthens
Centura's presence in the Hampton Roads region of Virginia, an attractive growth
area for Centura. The merger, however, was completed so late in the quarter, we
wanted to highlight recurring results from operations."
Excluding the contributions of First Coastal, non-interest income in the
first quarter accounted for 32 percent of Centura's recurring revenue. Average
loans increased $270 million or 21 percent, on an annualized basis, over the
fourth quarter of 1998.
"Our performance during the quarter reveals strong fundamental earnings and
continuing long-term growth," Sewell said. "This demonstrates that we remain on
course
for achieving profitable growth and shareholder value through the use of
technology, expanded services and delivery channels, and a dedicated sales
force."
Non-recurring expenses related to the merger with First Coastal totaled
$8.4 million, or $0.19 per diluted share. The $8.4 million in non-recurring
expenses includes $1.6 million of severance-related expenses, $1.1 million in
write-offs of certain fixed assets, $1.3 million for terminations of contractual
obligations, $1.5 million of additional allowance for loan losses, and $2.9
million of other transaction-related costs.
Including the non-recurring expenses and the financial results from First
Coastal, net income for the first quarter was $20.6 million or $0.71 per diluted
share.
During the first quarter, Centura also completed the acquisitions of
Capital Advisors, Inc., a commercial mortgage company, and Scotland Bancorp,
Inc., a $58 million savings bank in Laurinburg, North Carolina.
With assets of $8.7 billion, Centura provides a complete line of banking,
investment, insurance, leasing and trust services to individuals and businesses
in North Carolina,South Carolina and Virginia. Centura's broad range of
financial services are provided through a variety of delivery channels,
including 225 full-service financial offices; more than 330 ATMs at financial
offices, Wal-Mart stores and Sam's outlets; the Centura Highway telephone
banking center; Centura's Internet site; and through leading online money
management packages. Additional information may be found on Centura's website at
www.centura.com.
# # #
FINANCIAL HIGHLIGHTS
CENTURA BANKS, INC. AND SUBSIDIARIES
Three Months Ended March 31,
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(Dollars in thousands, except per share data) 1999 (1) 1999 1998 Change
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EARNINGS
Interest income $ 157,572 $ 148,976 5.8 %
Interest expense 74,784 73,498 1.7
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Net interest income 82,788 75,478 9.7
Provision for loan losses 6,266 3,393 84.7
Noninterest income 38,233 32,314 18.3
Noninterest expense 82,818 68,662 20.6
Income taxes 11,360 12,249 (7.3)
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Net income $ 20,577 $ 23,488 (12.4)%
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Net interest income, taxable equivalent $ 84,514 $ 77,278 9.4 %
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PER COMMON SHARE
Earnings per share-basic $ 0.95 $ 0.72 $ 0.85 (15.3)%
Earnings per share-diluted 0.94 0.71 0.83 (14.5)
Cash dividends paid 0.29 0.27 7.4
Book value 24.30 21.90 11.0
Closing market price 58.1875 71.2500 (18.3)
FINANCIAL RATIOS
Return on average assets 1.25 % (2) 0.95 % 1.22 % (27)bp
Return on average shareholders' equity 15.94 (2) 12.05 15.79 (374)
Average equity to average assets 7.90 7.74 16
AVERAGE BALANCES
Assets $ 8,770,262 $ 7,798,474 12.5 %
Earning assets 8,008,631 7,146,715 12.1
Loans 5,849,901 5,130,906 14.0
Investment securities 2,107,805 1,979,565 6.5
Noninterest-bearing deposits 903,556 797,677 13.3
Core deposits 5,476,700 5,240,802 4.5
Total deposits 6,006,459 5,742,340 4.6
Interest-bearing liabilities 7,035,344 6,287,112 11.9
Shareholders' equity 692,576 603,372 14.8
PERIOD END BALANCES
Assets $ 8,739,840 $ 8,142,357 7.3 %
Earning assets 7,970,676 7,438,795 7.2
Loans 5,814,127 5,322,018 9.2
Investment securities 2,097,518 2,092,135 0.3
Noninterest-bearing deposits 927,808 899,074 3.2
Core deposits 5,501,401 5,434,977 1.2
Total deposits 6,045,559 5,928,162 2.0
Shareholders' equity 692,564 618,872 11.9
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bp Change is measured as difference in basis points.
(1) Based on recurring earnings that exclude merger-related expenses,
merger-related provision for loan losses, and First Coastal Bankshares,
Inc.'s results of operations for the three months ended March 31, 1999.
(2) Excludes average assets and average shareholders' equity for First Coastal
Bankshares, Inc.
(3) All prior period financial data has been restated for the "pooling" with
First Coastal Bankshares, Inc.
OTHER FINANCIAL DATA
CENTURA BANKS, INC. AND SUBSIDIARIES
Three Months Ended March 31,
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(Dollars in thousands) 1999 1998 Change
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SHARES OUTSTANDING
Average basic 28,464,482 27,675,911 2.8 %
Average diluted 28,965,826 28,273,364 2.4
Outstanding at period end 28,494,755 28,253,683 0.9
COMPOSITION RATIOS (1)
Earning assets to total assets 91.32 % 91.64 % (32)bp
Loans to earning assets 73.04 71.79 125
Interest-bearing liabilities to earning assets 87.85 87.97 (12)
Loans to total deposits 97.39 89.35 804
Noninterest-bearing deposits to total deposits 15.04 13.89 115
ALLOWANCE FOR LOAN LOSSES
Beginning balance $ 72,310 $ 68,576 5.4 %
Provision for loan losses 6,266 3,393 84.7
Allowance of acquired financial institutions 605 2,068 (70.7)
Charge-offs (5,866) (3,851) 52.3
Recoveries 824 935 (11.9)
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Net charge-offs (5,042) (2,916) 72.9
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Ending balance $ 74,139 $ 71,121 4.2 %
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Net charge-offs to average loans (3) 0.36 % 0.23 % 13 bp
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COMPOSITION OF RISK ASSETS
Nonperforming loans $ 36,363 $ 34,718 4.7 %
Foreclosed property 5,616 6,825 (17.7)
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Nonperforming assets $ 41,979 $ 41,543 1.0 %
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ASSET QUALITY RATIOS (4)
Nonperforming assets to:
Loans and foreclosed property (2) 0.73 % 0.79 % (6)bp
Total assets 0.48 0.51 (3)
Nonperforming loans to total loans (2) 0.64 0.66 (2)
Allowance for loan losses to total loans (2) 1.30 1.36 (6)
Allowance for loan losses to nonperforming loans 2.04 x 2.05 x (1)
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bp Change is measured as difference in basis points.
(1) Balance sheet amounts used in calculations are based on average balances.
(2) Excludes mortgage loans held-for-sale of $105.6 million and $95.9 million
at March 31, 1999 and 1998, respectively.
(3) Excludes mortgage loans held-for-sale, on average, of $124.9 million and
$67.2 million at March 31, 1999 and 1998, respectively.
(4) Balance sheet amounts used in calculations are based on period end
balances.
(5) All prior period financial data has been restated for the "pooling" with
First Coastal Bankshares, Inc.
OTHER FINANCIAL DATA, continued
CENTURA BANKS, INC. AND SUBSIDIARIES
Three months Ended March 31,
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As a Percent of
Average Assets (1)
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(Dollars in thousands) 1999 1998 Change 1999 1998
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NONINTEREST INCOME
Service charges on deposit accouns $ 12,888 $ 10,789 19.5 % 0.60 % 0.56 %
Credit card and related fees 1,769 1,430 23.7 0.08 0.07
Insurance and brokerage commissions 5,818 5,415 7.4 0.27 0.28
Other service charges, commissions and fees 2,786 2,357 18.2 0.13 0.12
Fees for trust services 2,439 2,100 16.1 0.11 0.11
Mortgage income 7,036 4,127 70.5 0.33 0.21
Negative goodwill amortization 334 334 - 0.02 0.02
Operating lease fees, net 1,814 1,705 6.4 0.08 0.09
Other noninterest income 2,866 3,755 (23.7) 0.13 0.20
Noninterest income, excluding securities
transactions 37,750 32,012 17.9 1.75 1.66
Securities gains, net 483 302 59.9 0.02 0.02
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Total noninterest income $ 38,233 $ 32,314 18.3 % 1.77 % 1.68 %
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NONINTEREST EXPENSE
Salaries and overtime $ 31,863 $ 26,998 18.0 % 1.47 % 1.40 %
Fringe benefits and other personnel 7,462 6,448 15.7 0.35 0.34
Occupancy 5,095 4,395 15.9 0.24 0.23
Equipment 5,175 5,528 (6.4) 0.24 0.29
Foreclosed real estate losses and related
operating expense 428 428 - 0.02 0.02
Marketing 1,893 2,518 (24.8) 0.09 0.13
Fees for outsourced services 3,522 2,895 21.7 0.16 0.15
Professional fees 3,393 3,471 (2.3) 0.16 0.18
Other administrative 2,391 2,558 (6.5) 0.11 0.13
FDIC insurance 342 420 (18.6) 0.02 0.02
Deposit intangible and goodwill amotization 2,560 2,213 15.7 0.12 0.12
Office supplies, postage, and telephe 5,118 4,522 13.2 0.24 0.24
Merger-related expenses 6,858 - - 0.32 -
Other operating 6,718 6,268 7.2 0.29 0.33
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Total noninterest expense $ 82,818 $ 68,662 20.6 % 3.83 % 3.57 %
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OTHER PERFORMANCE RATIOS
Pretax operating profit margin, excluding
merger-related expenses (2) 33.01 % 34.25 % (124)bp
Efficiency ratio, excluding merger-
related expenses (3) 61.88 % 62.65 % (77)bp
Net interest income analysis-taxable equivalent:
Selected average yields/rates:
Loans 8.60 % 9.21 % (61)bp
Taxable securities 6.35 6.62 (27)
Tax-exempt securities 9.19 8.88 31
Short-term investments 5.25 4.59 66
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Interest-earning assets 8.00 8.48 (48)
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Total interest-bearing deposit 3.98 4.43 (45)
Borrowed funds 4.86 5.71 (85)
Long-term debt 5.62 6.02 (40
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Total interest-bearing liabilities 4.29 4.72 (43)
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Interest rate spread 3.71 3.76 (5)
Net interest margin 4.22 4.31 (9)
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bp Change is measured as difference in basis points.
(1) Data presented is annualized.
(2) Sum of income before taxes plus the taxable equivalent adjustment divided by
the sum of taxable equivalent
net interest income plus noninterest income.
(3) Noninterest expense divided by sum of taxable equivalent net interest income
plus noninterest income.
(4) All prior period financial data has been restated for the "pooling" with
First Coastal Bankshares, Inc.
QUARTERLY FINANCIAL TRENDS
CENTURA BANKS, INC. AND SUBSIDIARIES
1999 1998 1st Qtr 99
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First Fourth Third Second First vs.
(Dollars in thousands, except per share data) Quarter Quarter Quarter Quarter Quarter 4th Qtr 98
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FINANCIAL SUMMARY (1)
Assets $ 8,770,262 $ 8,561,203 $ 8,225,607 $ 8,148,591 $ 7,798,474 2.4 %
Earning assets 8,008,631 7,833,188 7,520,744 7,433,697 7,146,715 2.2
Loans 5,849,901 5,611,039 5,446,908 5,372,738 5,130,906 4.3
Investment securities 2,107,805 2,179,818 2,043,215 2,032,376 1,979,565 (3.3)
Total deposits 6,006,459 5,984,683 5,965,263 5,860,150 5,742,340 0.4
Interest-bearing liabilities 7,035,344 6,826,099 6,559,422 6,544,009 6,287,112 3.1
Shareholders' equity 692,576 673,130 652,202 629,539 603,372 2.9
Total market capitalization (period end) 1,658,039 2,106,168 1,780,108 1,764,457 2,013,075 (21.3)
Net income 20,577 25,397 26,347 25,082 23,488 (19.0)
PROFITABILITY/PERFORMANCE SUMMARY (1)
Pretax operating profit margin (2) 33.01 % 33.95 % 34.77 % 34.28 % 34.25 % (94)bp
Efficiency ratio (2) 61.88 62.25 61.87 62.58 62.65 (37)
Net interest margin 4.22 4.24 4.38 4.33 4.31 (2)
Return on average assets 0.95 1.18 1.27 1.23 1.22 (23)
Return on average equity 12.05 14.97 16.03 15.98 15.79 (292)
Average equity to average assets 7.90 7.86 7.93 7.73 7.74 4
PER SHARE SUMMARY
Earnings per share - basic $ 0.72 $ 0.90 $ 0.93 $ 0.89 $ 0.85 (20.0)%
Earnings per share - diluted 0.71 0.88 0.92 0.87 0.83 (19.3)
Cash dividends paid 0.29 0.29 0.29 0.29 0.27 -
Book value per share 24.30 23.88 23.52 22.49 21.90 1.8
Closing market price 58.1875 74.3750 63.0000 62.5000 71.2500 (21.8)
KEY INTANGIBLE ASSETS (3)
Goodwill $ 121,162 $ 102,858 $ 104,671 $ 105,204 $ 107,293 17.8 %
Mortgage servicing rights 37,467 33,464 31,473 30,179 28,422 12.0
ASSET QUALITY SUMMARY (3)
Nonperforming assets $ 41,979 $ 38,105 $ 37,538 $ 40,469 $ 41,543 10.2 %
Allowance for loan losses 74,139 72,310 71,390 71,262 71,121 2.5
Nonperforming assets to total assets 0.48 % 0.43 % 0.45 % 0.49 % 0.51 % 5 bp
Allowance for loan losses to total loans (4) 1.30 1.27 1.33 1.34 1.36 3
Net charge-offs to average loans (4) 0.36 0.26 0.29 0.27 0.23 10
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bp Change is measured as difference in basis points.
(1) Balance sheet amounts are based on average balances unless otherwise noted.
(2) Excludes merger-related expenses.
(3) Balance sheet amounts are based on period end balances unless otherwise
noted.
(4) Excludes mortgage loans held-for-sale.
(5) All prior period financial data has been restated for the "pooling" with
First Coastal Bankshares, Inc.