Exhibit 99.1
News Release
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CENIT Bancorp, Inc.
Suite 1350, Main Street Tower
300 East Main Street
Norfolk, Virginia 23510-1753
Internet: www.cenit.com
[757] 446-6600
[GRAPHIC_OMITTED]
DATE: July 25, 2001
CONTACT: Michael S. Ives
President and CEO
(757) 446-6600
CENIT REPORTS RECORD NET INCOME AND EARNINGS PER SHARE
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BEFORE MERGER EXPENSES
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(Norfolk, Virginia) - CENIT Bancorp, Inc. (NASDAQ: CNIT) today
announced that earnings for the second quarter of 2001, excluding merger
expenses, were a record $1,825,000, or a record $.42 per diluted share, compared
to $1,543,000 or $.34 per diluted share in the second quarter of 2000, a 24%
increase in diluted earnings per share between the two quarters.
On May 4, 2001, the Company announced it had signed a definitive
agreement with SouthTrust Corporation (SouthTrust) (NASDAQ: SOTR) calling for
the acquisition of the Company by SouthTrust. The definitive agreement provides
for the merger of CENIT Bank with SouthTrust Bank, a subsidiary of SouthTrust.
The merger is planned to exchange 1.14 shares of SouthTrust stock for all
outstanding certificates representing the Company's shares. The merger is
expected to be completed in August 2001 subject to certain conditions, including
shareholder and regulatory approval.
Including merger expenses, net income for the second quarter of 2001
totaled $1,677,000 or $.39 per diluted share.
The Company continues to improve its mix of loans and deposits. The
Company's "Core Banking Loans," which consist of the loan portfolio other than
first mortgage single-family loans, increased by $18.9 million, or 7.3%, in the
twelve months ended June 30, 2001. The average balance of checking, savings and
money market deposits (collectively, "Transaction Deposits") in the second
quarter of 2001 was $253.7 million, an increase of $25.8 million, or 11.3%,
compared to the second quarter of 2000. Average noninterest- bearing deposits
grew to $84.6 million during the second quarter of 2001, an increase of $13.7
million or 19.3% compared to the June 30, 2000 quarter. Average Transaction
Deposits were 52% of average total deposits in the second quarter of 2001
compared to 47% a year ago.
Michael S. Ives, the Company's President and Chief Executive Officer,
commented, "Our bank continues to show strong growth in both Core Banking Loans
and Transaction Deposits. We expect to continue this trend as part of SouthTrust
Bank."
Nonperforming assets were $3.4 million, or .52% of total assets at
June 30, 2001, compared to $1.1 million and .17%, respectively, at June 30,
2000. Net loan recoveries during the second quarter of 2001 were $5,000,
compared to $8,000 of net loan recoveries during the second quarter of 2000. No
loan loss provision was recorded in the second quarter of either 2001 or 2000.
For the six months ended June 30, 2001, the Company earned a record
$3,431,000 or a record $.79 per diluted share, excluding merger expenses,
compared to $2,932,000 or $.64 for the same period in 2000. Including merger
expenses, the Company earned $3,294,000 or $.76 per diluted share during the
first half of 2001.
The Company will pay a quarterly cash dividend of 16 cents per share on
or about July 27, 2001 to the holders of the Company's common stock as of the
close of business on July 12, 2001.
On or about July 3, 2001, the Company mailed a proxy
statement/prospectus to all Company stockholders of record as of June 26, 2001.
The Company has scheduled a vote on the merger with SouthTrust at the Company's
annual stockholders' meeting. The annual meeting will be held on August 2, 2001
at 5:00 p.m. at the Norfolk Waterside Marriott Hotel, 235 East Main Street,
Norfolk, Virginia.
(more)
About CENIT
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CENIT Bancorp, Inc. is the holding company for CENIT Bank. Through its
nineteen banking offices, including three Super Kmart banking centers and
twenty-four automated teller machines, the Company provides a wide range of
banking and financial services in the Hampton Roads, Virginia market, the sixth
largest MSA in the Southeast. CENIT Bank has banking offices in Virginia Beach,
Norfolk, Portsmouth, Chesapeake, Hampton, Newport News, and York County,
Virginia.
Safe Harbor Statement
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This News Release contains forward-looking statements with respect to
the goals, plans, objectives, intentions, expectations, financial condition,
results of operations, future performance and business of CENIT, including,
without limitation, statements relating to the earnings outlook of CENIT. These
forward-looking statements may be preceded by, followed by or include the words
"may", "could", "would", "should", "believes", "expects", "anticipates",
"estimates", "intends", "plans" or similar expressions. These forward-looking
statements involve risks and uncertainties that are subject to change based on
various factors, many of which are beyond CENIT's control. Some of these factors
include (1) the strength of the U. S. economy in general and the strength of the
local economy in which CENIT conducts its operations, which may be different
than expected and which may result in, among other things, deterioration in
credit quality or reduced demand for credit; (2) the effects of, and changes in,
the interest rate policies of the board of governors of the Federal Reserve
system, which may be different from those anticipated by CENIT in this News
Release; (3) legislation or regulatory changes that adversely affect the
businesses in which CENIT is engaged; (4) changes in accounting principles,
practices, policies or guidelines; and (5) changes in the real estate market
generally and in the markets in which CENIT conducts its operations, which may
affect the demand for mortgages and other real estate-based loans. This News
Release, including the forward-looking statements contained herein, speaks only
as of the date hereof, and CENIT disclaims any obligation to update or revise
the statements contained in this News Release following the date hereof.
##
(Selected Consolidated Financial Data to follow)
CENIT BANCORP, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except per share data)
(Unaudited)
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At or for the At or for the
Six Months Three Months
Ended Ended
June 30, June 30,
2001 2000 2001 2000
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Income Data
Interest income $ 22,692 $ 23,249 $ 11,185 $ 11,651
Interest expense 11,413 12,472 5,442 6,268
----------- ----------- ----------- -----------
Net interest income 11,279 10,777 5,743 5,383
Provision for loan losses 12 29 - -
----------- ----------- ----------- -----------
Net interest income after provision
for loan losses 11,267 10,748 5,743 5,383
Other income 3,600 3,229 1,844 1,636
Other expenses 9,554 9,396 4,841 4,608
----------- ----------- ----------- -----------
Income before income taxes 5,313 4,581 2,746 2,411
Provision for income taxes 2,019 1,649 1,069 868
----------- ----------- ----------- -----------
Net income $ 3,294 $ 2,932 $ 1,677 $ 1,543
=========== =========== =========== ===========
Basic earnings per share (1) $ .78 $ .65 $ .40 $ .34
Diluted earnings per share (1) $ .76 $ .64 $ .39 $ 34
Basic earnings per share excluding
merger expenses (5) $ .81 $ .65 $ .43 $ .34
Diluted earnings per share excluding
merger expenses (5) $ .79 $ .64 $ .42 $ .34
Cash dividends per share $ .32 $ .30 $ .16 $ .15
Average Balance Sheet Data
Loans, net $ 464,831 $ 471,054 $ 461,602 $ 471,974
Investment securities 250 51,074 250 47,331
Mortgage-backed certificates 124,339 82,277 125,578 81,313
Interest-earning assets 606,796 620,087 608,160 615,573
Interest-bearing deposits 403,305 409,192 404,153 412,097
Borrowings 104,655 125,595 98,568 114,430
Interest-bearing liabilities 507,960 534,787 502,721 526,527
Assets 645,252 657,340 645,469 653,278
Liabilities 592,787 606,377 592,448 602,452
Noninterest-bearing deposits 79,532 66,435 84,630 70,907
Stockholders' equity 52,465 50,963 53,021 50,826
See NOTES TO SELECTED CONSOLIDATED FINANCIAL DATA.
1
CENIT BANCORP, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands)
(Unaudited)
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At or for the At or for the
Six Months Three Months
Ended Ended
June 30, June 30,
2001 2000 2001 2000
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Spread and Margin Analysis
Yield on:
Loans, net 7.79% 7.84% 7.69% 7.90%
Investment securities 8.80% 5.64% 9.60% 5.62%
Mortgage-backed certificates 6.60% 6.89% 6.55% 6.92%
Interest-earning assets 7.48% 7.50% 7.36% 7.57%
Cost of:
Interest-bearing deposits 4.33% 4.28% 4.19% 4.37%
Borrowings 5.11% 5.91% 4.91% 6.19%
Interest-bearing liabilities 4.49% 4.66% 4.33% 4.76%
Interest rate spread 2.99% 2.84% 3.03% 2.81%
Net interest margin 3.72% 3.48% 3.78% 3.50%
Ratios
Return on average assets 1.02% .89% 1.04% .94%
Return on average stockholders' equity 12.56% 11.51% 12.65% 12.14%
Return on average assets, excluding
merger expenses (5) 1.06% .89% 1.13% .94%
Return on average stockholders' equity,
excluding merger expenses (5) 13.08% 11.51% 13.77% 12.14%
Cash Basis Operating Results and Ratios (2)
Net income $ 3,427 $ 3,068 $ 1,744 $ 1,611
Basic earnings per share $ .81 $ .68 $ .41 $ .36
Diluted earnings per share $ .79 $ .67 $ .40 $ .36
Return on average tangible assets 1.07% .94% 1.09% .99%
Return on average tangible equity 13.82% 12.85% 13.90% 13.52%
Net income excluding merger expenses (5) $ 3,564 $ 3,068 $ 1,891 $ 1,611
Diluted earnings per share excluding
merger expenses (5) $ .82 $ .67 $ .43 $ .36
Credit Data
Total nonperforming assets, net $ 3,363 $ 1,139 $ 3,363 $ 1,139
Total nonperforming assets, net,
to total assets .52% .17% .52% .17%
Allowance for loan losses to loans held for
investment, net .83% .81% .83% .81%
Ratio of net charge-offs to average loans .02% .02% - -
Net charge-offs (recoveries) $ 49 $ 46 $ (5) $ (8)
See NOTES TO SELECTED CONSOLIDATED FINANCIAL DATA.
2
CENIT BANCORP, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands)
(Unaudited)
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At or for the At or for the
Six Months Three Months
Ended Ended
June 30, June 30,
2001 2000 2001 2000
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Other Income and Other Expense Data
Deposit fees $ 1,442 $ 1,374 $ 702 $ 666
Merchant processing fees 1,148 1,117 620 607
Gains on sales of loans 596 259 302 128
Commercial mortgage brokerage fees 17 2 11 2
Fees from accounts receivable program 99 163 23 85
Loan servicing fees and late charges 141 130 76 58
Gains on sales of securities
available for sale, net - 16 - 16
Other miscellaneous 157 168 110 74
----------- ----------- ----------- -----------
Total other income $ 3,600 $ 3,229 $ 1,844 $ 1,636
=========== =========== =========== ===========
Salaries and employee benefits $ 4,126 $ 4,267 $ 1,971 $ 1,971
Equipment, data processing and supplies 1,575 1,593 780 786
Net occupancy expense of premises 1,099 1,128 556 556
Merchant processing 896 854 486 464
Professional fees 388 345 202 188
Loan processing 252 234 132 124
Amortization of intangibles 170 174 85 87
Postage 127 123 62 59
Federal deposit insurance premiums 46 48 23 24
Advertising and promotion 214 239 137 126
Expense, gains/losses on sales and
provision for losses on real estate
owned, net (15) 39 (20) 33
Merger expenses (5) 168 - 168 -
Other miscellaneous 508 352 259 190
----------- ----------- ----------- -----------
Total other expenses $ 9,554 $ 9,396 $ 4,841 $ 4,608
=========== =========== =========== ===========
See NOTES TO SELECTED CONSOLIDATED FINANCIAL DATA.
3
CENIT BANCORP, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands, except per share data)
(Unaudited)
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June 30, December 31, June 30,
2001 2000 2000
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Balance Sheet Data
Cash and federal funds sold $ 41,998 $ 29,550 $ 36,590
Securities available for sale at fair value:
Investment securities (adjusted cost of
$250, $250, and $37,367, respectively) 230 230 36,595
Mortgage-backed certificates (adjusted costs of
$121,799, $98,361, and $73,823, respectively) 123,653 99,032 73,019
Loans, net 459,526 475,052 479,535
Interest receivable 3,435 3,546 4,041
Real estate owned, net 697 - 69
Federal Home Loan Bank stock, at cost 5,050 5,050 6,050
Property and equipment, net 12,003 13,087 13,375
Goodwill and other intangibles, net 2,776 2,946 3,118
Other assets 2,572 3,736 3,639
------------ ------------ ------------
Total assets $ 651,940 $ 632,229 $ 656,031
============ ============ ============
Noninterest-bearing deposits $ 96,525 $ 88,748 $ 88,677
Interest-bearing deposits 413,328 405,736 412,098
------------ ------------ ------------
Total deposits 509,853 494,484 500,775
Advances from the Federal Home Loan Bank 70,000 70,000 86,000
Securities sold under agreements to repurchase 14,748 13,369 15,006
Other liabilities 3,942 2,923 3,851
------------ ------------ ------------
Total liabilities 598,543 580,776 605,632
------------ ------------ ------------
Stockholders' equity (3) 53,397 51,453 50,399
------------ ------------ ------------
Total liabilities and stockholders' equit $ 651,940 $ 632,229 $ 656,031
============ ============ ============
Book value per share (4) $ 12.58 $ 12.11 $ 11.40
Tangible book value per share (4) $ 11.93 $ 11.42 $ 10.70
Common stock outstanding excluding unallocated
common stock held by the Company's
Employee Stock Ownership Plan 4,243,858 4,248,315 4,420,420
Common stock outstanding including unallocated
common stock held by the Company's
Employee Stock Ownership Plan 4,430,690 4,443,271 4,623,498
Closing stock price $ 29.50 $ 12.25 $ 11.88
See NOTES TO SELECTED CONSOLIDATED FINANCIAL DATA.
4
CENIT BANCORP, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands)
(Unaudited)
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June 30, December 31, June 30,
2001 2000 2000
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Loan Data
Loans
-----
First mortgage loans:
Single-family $ 177,781 $ 205,263 $ 218,289
Multi-family 7,996 7,620 8,423
Commercial real estate 94,607 84,896 80,266
Construction 76,965 78,762 73,064
Acquisition/development and residential lots 22,707 22,829 24,289
Commercial business 44,558 46,780 39,628
Consumer:
Equity and second mortgage 64,262 60,343 59,721
Other consumer 12,965 14,604 15,483
Less: undisbursed portion of construction and
acquisition and development loans (45,573) (46,241) (41,279)
------------- ------------- -------------
Gross loans 456,268 474,856 477,884
Allowance for loan losses (3,767) (3,804) (3,842)
Unearned discounts, premiums, and
loan fees, net 1,452 1,464 1,503
------------- ------------- -------------
Loans held for investment, net 453,953 472,516 475,545
Loans held for sale 5,573 2,536 3,990
------------- ------------- -------------
Loans, net $ 459,526 $ 475,052 $ 479,535
============= ============= =============
Percentage of gross loans
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First mortgage single-family 39% 43% 46%
All other (Core Banking Loans) 61% 57% 54%
------------- ------------- -------------
100% 100% 100%
============= ============= =============
See NOTES TO SELECTED CONSOLIDATED FINANCIAL DATA.
5
CENIT BANCORP, INC.
SELECTED CONSOLIDATED FINANCIAL DATA
(Dollars in thousands)
(Unaudited)
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Average Balances
For the Quarter Ended Balances At
--------------------- ------------------------------------------------
June 30, June 30, December 31, June 30,
2001 2000 2001 2000 2000
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Deposit Data
Deposits
--------
Noninterest-bearing $ 84,630 $ 70,907 $ 96,525 $ 88,748 $ 88,677
Interest-bearing savings,
checking and money
market 169,056 156,980 178,755 162,662 159,335
----------- ----------- ----------- ----------- -----------
Total transaction deposits 253,686 227,887 275,280 251,410 248,012
Certificates of deposit 235,097 255,117 234,573 243,074 252,763
----------- ----------- ----------- ----------- -----------
Total deposits $ 488,783 $ 483,004 $ 509,853 $ 494,484 $ 500,775
=========== =========== =========== =========== ===========
Percentage of deposits
Noninterest-bearing 17% 15% 19% 18% 18%
Interest-bearing savings,
checking and money
market 35% 32% 35% 33% 32%
----- ----- ----- ----- --
Total transaction deposits 52% 47% 54% 51% 50%
Certificates of deposit 48% 53% 46% 49% 50%
----- ----- ----- ----- --
Total deposits 100% 100% 100% 100% 100%
===== ===== ===== ===== ===
See NOTES TO SELECTED CONSOLIDATED FINANCIAL DATA.
6
CENIT BANCORP, INC.
NOTES TO SELECTED CONSOLIDATED FINANCIAL DATA
(Unaudited)
(1) Basic earnings per share is calculated using weighted average shares
outstanding. For the six month period and three month period ended June 30,
2001, weighted average shares used to compute basic earnings per share were
4,242,513 and 4,240,938, respectively. For the six months and three months
ended June 30, 2000, weighted average shares used to compute basic earnings
per share were 4,516,812 and 4,490,362, respectively.
Diluted earnings per share is calculated by adding common stock equivalents
to the weighted average shares outstanding. For the six month period and
three month period ended June 30, 2001, weighted average shares used to
compute diluted earnings per share were 4,326,470 and 4,351,472,
respectively. For the six months and three months ended June 30, 2000,
weighted average shares used to compute diluted earnings per share were
4,567,611 and 4,535,545, respectively.
(2) Cash basis operating results exclude the effect on net income of
amortization expense applicable to intangible assets which include goodwill
and core deposit intangibles. Cash basis operating ratios exclude the
effect of amortization of intangible assets from net income and the
unamortized balances of intangibles from assets and equity.
The Company has presented cash basis operating results and ratios because
management understands that such information is used by many investors and
analysts. Cash basis operating data is not intended to represent and should
not be considered more meaningful than, or as a substitute for, other
measures of performance determined in accordance with generally accepted
accounting principles.
(3) Includes accumulated other comprehensive income (loss), net of income
taxes, of $1,156,000, $403,000 and $(977,000) at June 30, 2001, December
31, 2000 and June 30, 2000, respectively.
(4) Book value per share and tangible book value per share, computed by
including unallocated common stock held by the Company's Employee Stock
Ownership Plan at June 30, 2001 were $12.05 and $11.43, respectively; at
December 31, 2000 were $11.58 and $10.92, respectively; and at June 30,
2000 were $10.90 and $10.23, respectively.
(5) On May 4, 2001, the Company announced it had signed a definitive agreement
with SouthTrust Corporation calling for the acquisition of the Company by
SouthTrust. As of June 30, 2001, the Company has incurred $168,000 of
expenses, before taxes, related to this proposed merger.
7